EXHIBIT 99.1

DANAOS CORPORATION

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with our interim condensed consolidated financial statements (unaudited) and the notes thereto included elsewhere in this report.

Results of Operations

Three months ended September 30, 2023 compared to three months ended September 30, 2022

During the three months ended September 30, 2023, Danaos had an average of 68.0 container vessels compared to 71.0 container vessels during the three months ended September 30, 2022. Our containership fleet utilization for the three months ended September 30, 2023 was 97.7% compared to 97.1% for the three months ended September 30, 2022.

Operating Revenues

Operating revenues decreased by 8.0%, or $20.8 million, to $239.2 million in the three months ended September 30, 2023 from $260.0 million in the three months ended September 30, 2022.

Operating revenues for the three months ended September 30, 2023 reflected:

· a $9.5 million decrease in revenues in the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to decreased amortization of assumed time charters;

· a $5.5 million decrease in revenues in the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to vessel disposals;

· a $3.1 million decrease in revenues in the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to lower non-cash revenue recognition in accordance with US GAAP; and

· a $2.7 million decrease in revenues in the three months ended September 30, 2023 compared to the three months ended September 30, 2022 mainly as a result of lower charter rates.

Voyage Expenses

Voyage expenses decreased by $1.3 million to $9.0 million in the three months ended September 30, 2023 from $10.3 million in the three months ended September 30, 2022 primarily as a result of a decrease in commissions and the average number of vessels in our fleet.

Vessel Operating Expenses

Vessel operating expenses increased by $0.3 million to $39.5 million in the three months ended September 30, 2023 from $39.2 million in the three months ended September 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,499 per vessel per day for the three months ended September 30, 2023 compared to $6,173 per vessel per day for the three months ended September 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among the most competitive in the industry.

Depreciation

Depreciation expense decreased by 5.3%, or $1.8 million, to $32.3 million in the three months ended September 30, 2023 from $34.1 million in the three months ended September 30, 2022 mainly due to our recent sale of three vessels.

Amortization of Deferred Drydocking and Special Survey Costs

Amortization of deferred drydocking and special survey costs increased by $1.7 million to $4.8 million in the three months ended September 30, 2023 from $3.1 million in the three months ended September 30, 2022.

General and Administrative Expenses

General and administrative expenses decreased by $0.1 million to $7.1 million in the three months ended September 30, 2023, from $7.2 million in the three months ended September 30, 2022.

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Interest Expense and Interest Income

Interest expense decreased by 73.1%, or $11.7 million, to $4.3 million in the three months ended September 30, 2023 from $16.0 million in the three months ended September 30, 2022. The decrease in interest expense is a result of:

· a $5.8 million decrease in interest expense due to a decrease in our average indebtedness by $549.2 million between the two periods. Average indebtedness was $422.1 million in the three months ended September 30, 2023, compared to average indebtedness of $971.3 million in the three months ended September 30, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 2.2% as a result of higher interest rates;

· a $3.5 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the three months ended September 30, 2023; and

· a $2.4 million decrease in the amortization of deferred finance costs and debt discount.

As of September 30, 2023, outstanding debt, gross of deferred finance costs, was $417.4 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $868.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $79.6 million, gross of deferred finance costs, as of September 30, 2022. See “Liquidity and Capital Resources”.

Interest income increased by $1.8 million to $3.1 million in the three months ended September 30, 2023 compared to $1.3 million in the three months ended September 30, 2022 mainly as a result of increased interest rates and average amount of time deposits in the three months ended September 30, 2023.

Loss on Investments

We recognized a $9.3 million loss on marketable securities in the three months ended September 30, 2023 on our shareholding interest in Eagle Bulk Shipping Inc. (“Eagle Bulk” or “EGLE”) of 1,552,865 shares of common stock. This loss compares to a loss on investments of $107.3 million on our shareholding interest in ZIM Integrated Shipping Services Ltd. (“ZIM”) recognized in the three months ended September 30, 2022. In September 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $161.3 million.

Dividend Income

Dividend income of $0.9 million was recognized on EGLE ordinary shares in the three months ended September 30, 2023 compared to $27.0 million recognized on ZIM ordinary shares in the three months ended September 30, 2022.

Equity Loss on Investments

Equity loss on investments amounting to $0.5 million in the three months ended September 30, 2023 relates to our share of initial expenses of a newly established company, Carbon Termination Technologies Corporation (“CTTC”), currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other Finance Expenses

Other finance expenses increased by $1.0 million to $1.2 million in the three months ended September 30, 2023 compared to $0.2 million in the three months ended September 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.

Loss on Derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $0.9 million in each of the three months ended September 30, 2023 and September 30, 2022.

Other Income/(expenses), net

Other expenses, net were $1.1 million in the three months ended September 30, 2023 compared to other income, net of $0.4 million in the three months ended September 30, 2022.

Income Taxes

Income taxes of $3.8 million in the three months ended September 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares compared to no income tax in the three months ended September 30, 2023.

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Nine months ended September 30, 2023 compared to nine months ended September 30, 2022

During the nine months ended September 30, 2023, Danaos had an average of 68.1 container vessels compared to 71.0 container vessels during the nine months ended September 30, 2022. Our containership fleet utilization for the nine months ended September 30, 2023 was 97.7% compared to 98.1% for the nine months ended September 30, 2022.

Operating Revenues

Operating revenues decreased by 2.2%, or $16.6 million, to $724.3 million in the nine months ended September 30, 2023 from $740.9 million in the nine months ended September 30, 2022.

Operating revenues for the nine months ended September 30, 2023 reflect:

· a $33.2 million increase in revenues in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 mainly as a result of higher charter rates;

· a $29.5 million decrease in revenues in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to decreased amortization of assumed time charters;

· a $14.2 million decrease in revenues in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to vessel disposals; and

· a $6.1 million decrease in revenues in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to lower non-cash revenue recognition in accordance with US GAAP.

Voyage Expenses

Voyage expenses decreased by $1.7 million to $25.2 million in the nine months ended September 30, 2023 from $26.9 million in the nine months ended September 30, 2022 primarily as a result of a decrease in commissions and the average number of vessels in our fleet.

Vessel Operating Expenses

Vessel operating expenses increased by $3.1 million to $122.0 million in the nine months ended September 30, 2023 from $118.9 million in the nine months ended September 30, 2022, primarily as a result of an increase in the average daily operating cost for vessels on time charter to $6,758 per vessel per day for the nine months ended September 30, 2023 compared to $6,314 per vessel per day for the nine months ended September 30, 2022, which was partially offset by a decrease in the average number of vessels in our fleet. The average daily operating cost increased mainly due to increased repair and maintenance expenses. Management believes that our daily operating costs remain among the most competitive in the industry.

Depreciation

Depreciation expense decreased by 5.4%, or $5.5 million, to $95.8 million in the nine months ended September 30, 2023 from $101.3 million in the nine months ended September 30, 2022 due to our recent sale of three vessels.

Amortization of Deferred Drydocking and Special Survey Costs

Amortization of deferred drydocking and special survey costs increased by $4.1 million to $13.1 million in the nine months ended September 30, 2023 from $9.0 million in the nine months ended September 30, 2022.

General and Administrative Expenses

General and administrative expenses decreased by $0.6 million to $21.1 million in the nine months ended September 30, 2023, from $21.7 million in the nine months ended September 30, 2022. The decrease was primarily attributable to decreased management fees due to the recent sale of three vessels.

Gain on Sale of Vessels

In January 2023, we completed the sale of the Amalia C for net proceeds of $4.9 million resulting in a gain of $1.6 million.

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Interest Expense and Interest Income

Interest expense decreased by 65.6%, or $32.3 million, to $16.9 million in the nine months ended September 30, 2023 from $49.2 million in the nine months ended September 30, 2022. The decrease in interest expense is a result of:

· a $16.7 million decrease in interest expense due to a decrease in our average indebtedness by $696.4 million between the two periods. Average indebtedness was $462.9 million in the nine months ended September 30, 2023, compared to average indebtedness of $1,159.3 million in the nine months ended September 30, 2022. This decrease was partially offset by an increase in our debt service cost by approximately 2.7% as a result of higher interest rates;

· a $10.0 million decrease in interest expense due to an increase in capitalized interest expense on our vessels under construction in the nine months ended September 30, 2023;

· a $7.7 million decrease in the amortization of deferred finance costs and debt discount; and

· a $2.1 million reduction of accumulated accrued interest that had been accrued in 2018 in relation to two of our credit facilities that were fully repaid in May 2022.

As of September 30, 2023, outstanding debt, gross of deferred finance costs, was $417.4 million, which included $262.8 million principal amount of our Senior Notes. These balances compare to debt of $868.1 million, which included $300.0 million principal amount of our Senior Notes, and a leaseback obligation of $79.6 million, gross of deferred finance costs, as of September 30, 2022.

Interest income increased by $8.0 million to $9.4 million in the nine months ended September 30, 2023 compared to $1.4 million in the nine months ended September 30, 2022 mainly as a result of increased interest rates and average amount of time deposits in the nine months ended September 30, 2023.

Loss on Investments

We recognized a $2.9 million loss on marketable securities in the nine months ended September 30, 2023 on our shareholding interest in EGLE of 1,552,865 shares of common stock. This loss compares to a loss on investments of $176.4 million on our shareholding interest in ZIM recognized in the nine months ended September 30, 2022. In the nine months ended September 30, 2022, we sold all of our remaining ordinary shares of ZIM for net proceeds of $246.6 million.

Dividend Income

Dividend income of $0.9 million was recognized on EGLE ordinary shares in the nine months ended September 30, 2023 compared to $165.4 million recognized on ZIM ordinary shares in the nine months ended September 30, 2022.

Gain/(loss) on Debt Extinguishment

A $2.3 million loss on early extinguishment of our leaseback obligations in the nine months ended September 30, 2023 compares to a $22.9 million gain related to our early extinguishment of debt in the nine months ended September 30, 2022.

Equity Loss on Investments

Equity loss on investments amounting to $3.9 million in the nine months ended September 30, 2023 relates to our share of initial expenses of a newly established company, CTTC, currently engaged in the research and development of decarbonization technologies for the shipping industry.

Other Finance Expenses

Other finance expenses increased by $2.3 million to $3.4 million in the nine months ended September 30, 2023 compared to $1.1 million in the nine months ended September 30, 2022 mainly due to commitment fees for our recently established revolving credit facility.

Loss on Derivatives

Amortization of deferred realized losses on interest rate swaps remained stable at $2.7 million in each of the nine months ended September 30, 2023 and September 30, 2022.

Other Income/(expenses), net

Other expenses, net were $0.6 million in the nine months ended September 30, 2023 compared to other income, net of $1.3 million in the nine months ended September 30, 2022

Income Taxes

Income taxes of $18.3 million, in the nine months ended September 30, 2022, related to the taxes withheld on dividend income earned on ZIM ordinary shares and compared to no income tax in the nine months ended September 30, 2023.

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Liquidity and Capital Resources

Our principal source of funds has been operating cash flows, vessel sales, and long-term bank borrowings, as well as equity provided by our stockholders from our initial public offering in October 2006; common stock sales in August 2010 and the fourth quarter of 2019, the capital contribution of Danaos Investment Limited as Trustee of the 883 Trust (“DIL”) on August 10, 2018 and dividends and sales proceeds from our divested investment in ZIM ordinary shares in 2021 and 2022. In February 2021, we sold $300 million of 8.500% senior unsecured notes due 2028 (the “Senior Notes”). In December 2022, we repurchased $37.2 million aggregate principal amount of our Senior Notes in a privately negotiated transaction. We may also at any time and from time to time, seek to retire or purchase our outstanding debt securities through cash purchases, in open-market purchases, privately negotiated transactions or otherwise. Our principal uses of funds have been capital expenditures to establish, grow and maintain our fleet, comply with international shipping standards, environmental laws and regulations and to fund working capital requirements and repayment of debt.

Our short-term liquidity needs primarily relate to the funding of our vessel operating expenses, drydocking costs, installment payments for our ten contracted containership newbuildings, payments for the acquisition of contracted dry bulk vessels, debt interest payments, servicing our debt obligations, payment of dividends and repurchases of our common stock. Our long-term liquidity needs primarily relate to installment payments for our ten contracted newbuildings and any additional vessel acquisitions in the containership or drybulk sector and debt repayment. We anticipate that our primary sources of funds will be cash from operations and equity or debt financings. We currently expect that the sources of funds available to us will be sufficient to meet our short-term liquidity (for the next 12 months after the issuance of the condensed consolidated financial statements) and long-term liquidity requirements.

Under our existing multi-year charters as of September 30, 2023, we had $2.4 billion of total contracted cash revenues, with $227.5 million for the remainder of 2023, $821.0 million for 2024 and thereafter $1.4 billion. Although these contracted cash revenues are based on contracted charter rates, we are dependent on the ability and willingness of our charterers to meet their obligations under these charters. In May 2022, we received a $238.9 million charter hire prepayment related to charter contracts for 15 of our vessels, representing partial prepayment of charter hire payable during the period from May 2022 through January 2027. This prepayment is recorded as unearned revenue on our balance sheet and recognized as revenue in our income statement over the term of the applicable charters.

As of September 30, 2023, we had cash and cash equivalents of $306.3 million. As of September 30, 2023, we had $348.75 million of remaining borrowing availability under a reducing revolving credit facility, the availability under which reduces on a quarterly basis. As of September 30, 2023, we had $417.4 million of outstanding indebtedness (gross of deferred finance costs), including $262.8 million relating to our Senior Notes. As of September 30, 2023, we were obligated to make quarterly fixed amortization payments, totaling $24.4 million to September 30, 2024, related to the long-term bank debt. We are also obligated to make certain payments to our Manager, Danaos Shipping. As described below under “—Management Agreement” in November 2023, we extended the term of our management agreement from December 31, 2024 to December 31, 2025 and in conjunction therewith the fees and commissions payable thereunder were modified.

In June 2022, we drew down $130.0 million under a new senior secured term loan facility from BNP Paribas and Credit Agricole, which is secured by six 5,466 TEU sister vessels acquired in 2021. This facility is repayable in 8 quarterly instalments of $5.0 million, followed by 12 quarterly instalments of $1.9 million together with a balloon payment of $67.2 million payable over five-year term. In December 2022, we early extinguished the remaining $437.75 million of the Citibank/Natwest $815 mil. Facility and replaced it with the $382.5 mil. Revolving Credit Facility with Citibank, out of which nil is drawn down as of September 30, 2023 and with the Alpha Bank $55.25 mil. Facility, which was drawn down in full and under which $49.6 million is outstanding as of September 30, 2023. The Citibank $382.5 mil. Revolving Credit Facility is reducing and repayable over 5 years in 20 quarterly reductions of $11.25 million each together with a final reduction of $157.5 million at maturity in December 2027. We pay a commitment fee at a rate of 0.8% per annum on the undrawn amount of this facility. The Alpha Bank $55.25 mil. Facility is repayable over 5 years with 20 consecutive quarterly instalments of $1.875 million each, together with a balloon payment of $17.75 million at maturity in December 2027.

On March 11, 2022, we entered into contracts for the construction of two 7,100 TEU container vessels with expected vessels delivery in 2024. On April 1, 2022, as amended on April 21, 2022, we entered into contracts for the construction of four 8,000 TEU container vessels with expected vessels delivery in 2024. On April 28, 2023, we entered into contracts for the construction of two 6,000 TEU container vessels with expected vessels delivery in 2024 and 2025. On June 20, 2023, we entered into contracts for the construction of two 8,200 TEU container vessels with expected vessels delivery in 2026. The aggregate purchase price of the vessel construction contracts amounts to $834.9 million.

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The remaining contractual commitments under these 10 vessel construction contracts are analyzed as follows as of September 30, 2023 (in millions of U.S. dollars):

Payments due by period ended	$	345.9
September 30, 2024
September 30, 2025		108.3
September 30, 2026		75.4
December 31, 2026		47.1
Total contractual commitments	$	576.7

Additionally, a supervision fee of $850 thousand per newbuilding vessel (as amended on November 10, 2023) will be payable to Danaos Shipping Company Limited (“the Manager”) over the construction period starting from steel cutting. Supervision fees totaling $1.1 million were charged by the Manager and capitalized to the vessels under construction in the nine months ended September 30, 2023. Interest expense amounting to $5.0 million and $12.0 million was capitalized to the vessels under construction in the year ended December 31, 2022 and in the nine months ended September 30, 2023, respectively.

Subsequent to September 30, 2023, we declared a dividend of $0.80 per share of common stock payable on December 6, 2023 to holders of record on November 27, 2023. We intend to pay a regular quarterly dividend on our common stock, which will have an impact on our liquidity. Payments of dividends are subject to the discretion of our board of directors, provisions of Marshall Islands law affecting the payment of distributions to stockholders and the terms of our credit facilities, which permit the payment of dividends so long as there has been no event of default thereunder nor would occur as a result of such dividend payment, and Senior Notes, which include limitations on the amount of dividends and other restricted payments that we may make, and will be subject to conditions in the container and drybulk shipping industries, our financial performance and us having sufficient available excess cash and distributable reserves.

In June 2022, we announced a share repurchase program of up to $100 million of our common stock. We had repurchased 466,955 shares of our common stock in the open market for $28.6 million as of December 31, 2022. In the nine months ended September 30, 2023, we repurchased an additional 852,721 shares for $52.5 million, out of which 2,900 shares valued at $0.2 million remained unsettled as of September 30, 2023. Subsequent to September 30, 2023, we repurchased 250,519 shares of our common stock in the open market for $16.3 million. A $100 million increase to the existing share repurchase program, for a total aggregate amount of $200 million, was approved by our Board of Directors on November 10, 2023. As of November 10, 2023, the Company has repurchased an aggregate of approximately $97.4 million of common stock under the share purchase program. All purchases have been made on the open market within the safe harbor provisions of Regulation 10b-18 under the Exchange Act. Under the share repurchase program, shares of our common stock may be purchased in open market or privately negotiated transactions, at times and prices that are considered to be appropriate by the Company, and the program may be suspended or discontinued at any time.

Marketable Securities

In June 2023, we acquired marketable securities, comprising 1,552,865 shares of common stock of Eagle Bulk, for $68.2 million (out of which $24.4 million from Virage International Ltd., our related company). As of September 30, 2023, these marketable securities were fair valued at $65.3 million and we recognized a $2.9 million loss on these marketable securities. Additionally, we recognized dividend income on these shares amounting to $0.9 million in the three months ended September 30, 2023. Eagle Bulk is listed on the New York Stock Exchange (Ticker: EGLE) and currently owns and operates a fleet of 52 Ultramax and Supramax bulk carriers that aggregate to approximately 3.2 million deadweight tons (“DWT”).

ZIM Equity Securities

On January 27, 2021, ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares. Following this offering the Company owned 10,186,950 ordinary shares of ZIM. These shares were recorded at a book value of $75 thousands as of December 31, 2020. In 2021, we sold 3,000,000 ZIM ordinary shares resulting in net proceeds to us of $120.7 million. In April 2022, we sold 1,500,000 ZIM ordinary shares resulting in net proceeds to us of $85.3 million and we sold our remaining shareholding interest in ZIM of 5,686,950 ordinary shares for $161.3 million in September 2022. For the year ended December 31, 2022 we recognized a $176.4 million loss on these shares. Additionally we recognized dividend income on these shares amounting to $165.4 million gross of withholding taxes of $18.3 million in the year ended December 31, 2022. See Note 6, “Other Current and Non-current Assets” to our condensed consolidated financial statements included in this report.

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Investments in Affiliates

In March 2023, we invested $4.3 million in the common shares of a newly established company Carbon Termination Technologies Corporation (“CTTC”), incorporated in the Republic of the Marshall Islands, which represents a 49% ownership interest. CTTC currently engages in research and development of decarbonization technologies for the shipping industry. We use equity method of accounting for this investment. Our share of CTTC’s initial expenses amounted to $3.9 million and is presented under “Equity loss on investments” in the condensed consolidated statement of income in the nine months ended September 30, 2023.

Acquisition of Capesize Bulk Carriers

In July 2023, we reached an agreement to acquire 5 Capesize bulk carriers built in 2010 through 2012 that aggregate to 879,306 DWT for a total of $103 million. One of these vessels was delivered to us on September 26, 2023, three vessels in October 2023 and the remaining one is expected to be delivered in November 2023. Additionally, in September 2023, we entered into agreements to acquire 2 Capesize bulk carriers built in 2009 that aggregate to 351,765 DWT for a total of $36.6 million. These 2 vessels are expected to be delivered to us between November and December 2023. The remaining aggregate contractual commitments under these vessel acquisition agreements amounted to $110.9 million as of September 30, 2023.

Impact of the wars in Ukraine and Gaza on our Business

As disclosed in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023, the current conflict between Russia and Ukraine, and related sanctions imposed by the U.S., EU and others, adversely affect the crewing operations of our Manager, which has crewing offices in St. Petersburg, Odessa and Marioupol (damaged by the war), and trade patterns involving ports in the Black Sea or Russia, and as well as impacting world energy supply and creating uncertainties in the global economy, which in turn impact containership and drybulk demand. The extent of the impact will depend largely on future developments.

The war between Israel and Hamas in the Gaza Strip has not affected our business to date; however, an escalation of this conflict could have reverberations on the regional and global economies that could have the potential to adversely affect demand for containership cargoes and our business

Cash Flows

	Nine Months ended September 30, 2023			Nine Months ended September 30, 2022
		(In thousands)
Net cash provided by operating activities	$	430,112		$	789,244
Net cash provided by/(used in) investing activities	$	(198,551	)	$	164,504
Net cash used in financing activities	$	(192,939	)	$	(514,161	)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities decreased by $359.1 million, to $430.1 million provided by operating activities in the nine months ended September 30, 2023 compared to $789.2 million provided by operating activities in the nine months ended September 30, 2022. The decrease was the result of: (i) $149.8 million in ZIM dividends that were collected in the nine months ended September 30, 2022 compared to $0.9 million dividends collected on our shareholding interest in EGLE in the nine months ended September 30, 2023, (ii) a $247.0 million decrease in cash operating revenues as a result of the charter revenue prepayment that occurred in the nine months ended September 30, 2022, (iii) a $14.2 million decrease in operating revenues due to a decrease in the average number of vessels in our fleet as a result of vessel sales, (iv) a $8.8 million increase in cash operating expenses and (v) a $5.4 million increase in drydocking expenses, which were partially offset by: (i) a $33.2 million increase in operating revenues due to higher charter rates, (ii) a $29.5 million decrease in net finance costs and (iii) a $2.5 million improvement in working capital between the two periods.

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Net Cash Provided by/(Used in) Investing Activities

Net cash flows provided by/(used in) investing activities decreased by $363.1 million, to $198.6 million used in investing activities in the nine months ended September 30, 2023 compared to $164.5 million provided by investing activities in the nine months ended September 30, 2022. The decrease was due to: (i) a $246.6 million in proceeds from the sale of ZIM shares collected in the nine months ended September 30, 2022 compared to no such proceeds in the nine months ended September 30, 2023 as we no longer held ZIM shares during the latter period, (ii) a $9.1 million decrease in vessel sale proceeds, (iii) a $29.8 million increase in advances and payments for vessel acquisitions in the nine months ended September 30, 2023, (iv) a $4.9 million increase in additions to vessel cost and (v) $74.4 million in net investments in the nine months ended September 30, 2023, which include $68.2 million invested in Eagle Bulk Shipping and our investment in Carbon Termination Technologies, which were partially offset by a $1.7 million decrease in advance payments for vessels under construction between the two periods.

Net Cash Used in Financing Activities

Net cash flows used in financing activities decreased by $321.2 million, to $192.9 million used in financing activities in the nine months ended September 30, 2023 compared to $514.1 million used in financing activities in the nine months ended September 30, 2022 due to (i) a $454.3 million decrease in payments of long-term debt and leaseback obligations, (ii) a $13.9 million decrease in finance costs, (iii) a $3.4 million decrease in payments of accumulated accrued interest and (iv) a $1.1 million decrease in dividend payments on our common stock, which were partially offset by (i) a $127.7 million decrease in proceeds from long-term debt and (ii) a $23.8 million increase in repurchase of common stock in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes, however, that certain non-GAAP financial measures used in managing the business may provide users of this financial information additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our performance. See the table below for supplemental financial data and corresponding reconciliation to GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.

EBITDA and Adjusted EBITDA

EBITDA represents net income before interest income and expense, taxes, depreciation, as well as amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs, debt discount and commitment fees. Adjusted EBITDA represents net income before interest income and expense, taxes other than withholding taxes on dividends received, depreciation, amortization of deferred drydocking & special survey costs, amortization of assumed time charters, amortization of deferred realized losses of cash flow interest rate swaps, amortization of finance costs, debt discount and commitment fees, gain/loss on investments, gain/loss on debt extinguishment, gain on sale of vessels and stock-based compensation. We believe that EBITDA and Adjusted EBITDA assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. EBITDA and Adjusted EBITDA are also used: (i) by prospective and current customers as well as potential lenders to evaluate potential transactions; and (ii) to evaluate and price potential acquisition candidates. Our EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA/Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA/Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Because of these limitations, EBITDA/Adjusted EBITDA should not be considered as principal indicators of our performance.

8

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

	Nine Months ended September 30, 2023			Nine Months ended September 30, 2022
	(In thousands)
Net income	$	426,378		$	406,489
Depreciation and amortization of right-of-use assets		95,764			101,253
Amortization of deferred drydocking & special survey costs		13,109			9,006
Amortization of assumed time charters		(16,806	)		(46,256	)
Amortization of deferred realized losses of cash flow interest rate swaps		2,709			2,709
Amortization of finance costs, debt discount and commitment fees		3,965			9,393
Interest income		(9,410	)		(1,444	)
Interest expense		15,174			39,768
Income taxes		-			18,250
EBITDA		530,883			539,168
Loss on investments and dividend withholding taxes		2,895			158,136
Loss/(gain) on debt extinguishment		2,254			(22,939	)
Gain on sale of vessels		(1,639	)		-
Stock based compensation		-			373
Adjusted EBITDA	$	534,393		$	674,738

EBITDA decreased by $8.3 million, to $530.9 million in the nine months ended September 30, 2023 from $539.2 million in the nine months ended September 30, 2022. This decrease was mainly attributed to (i) $165.4 million in dividends from ZIM (gross of withholding taxes) recognized in the nine months ended September 30, 2022 compared to $0.9 million in dividends from EGLE recognized in the nine months ended September 30, 2023, (ii) a $25.2 million decrease in gain on debt extinguishment between the two periods, (iii) a $3.9 million equity loss on investments in the nine months ended September 30, 2023 and (iv) a $2.7 million increase in total operating expenses between the two periods, which were partially offset by (i) a $173.5 million change in fair value of investments, (ii) a $12.9 million increase in operating revenues (excluding $29.5 million decrease in amortization of assumed time charters) and (iii) a $1.6 million gain on sale of vessel in the nine months ended September 30, 2023 compared to no such gain in the nine months ended September 30, 2022.

Adjusted EBITDA decreased by $140.3 million, to $534.4 million in the nine months ended September 30, 2023 from $674.7 million in the nine months ended September 30, 2022. This decrease was mainly attributed to (i) recognition of a $147.1 million dividend from ZIM (net of withholding taxes) in the nine months ended September 30, 2022 compared to $0.9 million in dividends from EGLE in the nine months ended September 30, 2023, (ii) a $3.1 million increase in total operating expenses and (iii) a $3.9 million equity loss on investments in the nine months ended September 30, 2023, which were partially offset by a $12.9 million increase in operating revenues (excluding a $29.5 million decrease in amortization of assumed time charters). Adjusted EBITDA for the nine months ended September 30, 2023 is adjusted for a $2.9 million change in fair value of investments, a $2.3 million loss on debt extinguishment and a $1.6 million gain on sale of vessel.

9

Credit Facilities

We, as borrower or guarantor, and certain of our subsidiaries, as borrowers or guarantors, have entered into a number of credit facilities in connection with financing the acquisition of certain vessels in our fleet. Our existing credit facilities are secured by, among other things, our vessels (as described below). The following summarizes certain terms of our credit facilities and our Senior Notes:

Credit Facility	Outstanding Principal Amount (in millions)(1)		Collateral Vessels
BNP Paribas/Credit Agricole $130.0 mil. Facility	$	105.0	The Wide Alpha, the Stephanie C, the Maersk Euphrates, the Wide Hotel, the Wide India and the Wide Juliet
Alpha Bank $55.25 mil. Facility	$	49.6	The Bremen and the Kota Santos
Citibank $382.5 mil. Revolving Credit Facility	$	-	The Express Berlin, the Express Rome, the Express Athens, the Hyundai Smart, the Hyundai Speed, the Hyundai Ambition, the Pusan C, the Le Havre, the Europe, the America, the CMA CGM Musset, the Racine (ex CMA CGM Racine), the CMA CGM Rabelais, the CMA CGM Nerval, the YM Maturity and the YM Mandate
Senior Notes	$	262.8	None

(1) As of September 30, 2023.

As of September 30, 2023, there was $348.75 million of remaining borrowing availability under our Citibank $382.5 mil. Revolving Credit Facility. As of September 30, 2023, 44 of our container vessels and 1 recently acquired drybulk vessel were unencumbered. For additional information regarding the credit facilities and related repayment schedule, please refer to Note 8 “Long-term Debt, net” in the unaudited condensed consolidated financial statements included in this report.

Senior Notes

On February 11, 2021, we consummated an offering of $300 million aggregate principal amount of 8.500% Senior Notes due 2028 of Danaos Corporation, which we refer to as the Senior Notes. The Senior Notes are general senior unsecured obligations of Danaos Corporation.

The Senior Notes were issued pursuant to an Indenture, dated as of February 11, 2021, between the Company and Citibank, N.A., London Branch, as trustee, paying agent, registrar and transfer agent. The Senior Notes bear interest at a rate of 8.500% per year, payable in cash on March 1 and September 1 of each year, commencing September 1, 2021. The Senior Notes will mature on March 1, 2028.

In December 2022, we repurchased $37.2 million aggregate principal amount of our Senior Notes in a privately negotiated transaction. For additional details regarding the Senior Notes please refer to Note 8, “Long-term Debt, net” in the unaudited condensed consolidated financial statements included elsewhere in this report and “Item 5. Operating and Financial Review and Prospects –Senior Notes” in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023.

Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Swaps

In the past, we entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to hedge our exposure to fluctuations in prevailing market interest rates, as well as interest rate swap agreements converting the fixed rate we paid in connection with certain of our credit facilities into floating interest rates in order to economically hedge the fair value of the fixed rate credit facilities against fluctuations in prevailing market interest rates. All of these interest rate swap agreements have expired and we do not currently have any outstanding interest rate swap agreements. Refer to Note 9, “Financial Instruments”, to our unaudited condensed consolidated financial statements included in this report.

10

Foreign Currency Exchange Risk

We did not enter into derivative instruments to hedge the foreign currency translation of assets or liabilities or foreign currency transactions during the nine months ended September 30, 2023 and 2022.

Impact of Inflation and Interest Rates Risk on our Business

We continue to see near-term impacts on our business due to elevated inflation in the United States of America, the Eurozone and other countries, including ongoing global prices pressures in the wake of the war in Ukraine, driving up energy and commodity prices, which continue to affect our operating expenses. Interest rates have increased rapidly and substantially as central banks in developed countries raise interest rates in an effort to subdue inflation. The eventual implications of tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital for our business.

Capitalization and Indebtedness

The table below sets forth our consolidated capitalization as of September 30, 2023.

· on an actual basis; and

· on an as adjusted basis to reflect, in the period from October 1, 2023 to November 10, 2023, repurchases of 250,519 shares of our common stock for an aggregate purchase price of $16.3 million, the issuance of 100,000 shares of our common stock as equity awards under our equity compensation plan and the issuance of 100,000 shares of our common stock payable under our amended and restatement management agreement.

Other than these adjustments, there have been no other material changes to our capitalization from debt or equity issuances, re-capitalizations, special dividends, or debt repayments as adjusted in the table below between October 1, 2023 and November 10, 2023.

	As of September 30, 2023
	Actual			As adjusted
	(US Dollars in thousands)
Debt:
Senior unsecured notes	$	262,766		$	262,766
BNP Paribas/Credit Agricole $130 mil. Facility		105,000			105,000
Alpha Bank $55.25 mil. Facility		49,625			49,625
Citibank $382.5 mil. Revolving Credit Facility		-			-
Total debt (1)(2)	$	417,391		$	417,391
Stockholders’ equity:
Preferred stock, par value $0.01 per share; 100,000,000 preferred shares authorized and none issued; actual and as adjusted		-			-
Common stock, par value $0.01 per share; 750,000,000 shares authorized; 25,155,955 shares issued and 19,497,008 shares outstanding actual and 19,446,489 shares outstanding as adjusted		195			194
Additional paid-in capital		695,593			679,283
Accumulated other comprehensive loss		(70,941	)		(70,941	)
Retained earnings (3)		2,267,526			2,267,526
Total stockholders’ equity		2,892,373			2,876,062
Total capitalization	$	3,309,764		$	3,293,453

(1) All of the indebtedness reflected in the table, other than Danaos Corporation’s unsecured senior notes due 2028 ($262.8 million on an actual basis), is secured and is guaranteed by Danaos Corporation, in the case of indebtedness of our subsidiaries ($49.6 million on an actual basis), or by our subsidiaries, in the case of indebtedness of Danaos Corporation ($105.0 million on an actual basis). See Note 4 “Fixed Assets, net and Advances for Vessels under Construction” and Note 8 “Long-Term Debt, net” to our unaudited condensed consolidated financial statements included elsewhere in this report.

(2) Total debt is presented gross of deferred finance costs, which amount to $6.8 million.

(3) Does not reflect dividend of $0.80 per share of common stock declared by the Company payable on December 6, 2023 to holders of record as of November 27, 2023.

11

Our Fleet

The following table describes in detail our container vessels deployment profile as of November 10, 2023:

Vessel Details			Charter Arrangements
Vessel Name	Year Built	Size (TEU)	Expiration of Charter (1)	Charterer	Contracted Employment through (2)	Charter Rate (3)		Extension Options (4)
								Period	Charter Rate
Hyundai Ambition	2012	13,100	April 2027	HMM Confidential (6)	June 2024 April 2027	$64,918 $51,500		+ 6 months +10.5 to 13.5 months +10.5 to 13.5 months	$51,500 $51,500 $51,500
Hyundai Speed	2012	13,100	April 2027	HMM Confidential (6)	June 2024 April 2027	$64,918 $51,500		+ 6 months +10.5 to 13.5 months +10.5 to 13.5 months	$51,500 $51,500 $51,500
Hyundai Smart	2012	13,100	June 2027	HMM Confidential (6)	May 2024 June 2027	$64,918 $54,000		+ 3 to 26 months	$54,000
Hyundai Respect	2012	13,100	April 2027	HMM Confidential (6)	March 2024 April 2027	$64,918 $54,000		+ 3 to 26 months	$54,000
Hyundai Honour	2012	13,100	March 2027	HMM Confidential (6)	February 2024 March 2027	$64,918 $54,000		+ 3 to 26 months	$54,000
Express Rome	2011	10,100	April 2027	Hapag Lloyd Confidential (6)	May 2024 April 2027	$30,000 $37,000		+4 months + 6 months	$30,000 $37,000
Express Berlin	2011	10,100	August 2026	Confidential (6)	August 2026	$33,000		+ 4 months	$33,000
Express Athens	2011	10,100	April 2027	Hapag Lloyd Confidential (6)	May 2024 April 2027	$30,000 $37,000		+4 months + 6 months	$30,000 $37,000
Le Havre	2006	9,580	June 2028	Confidential (6)	June 2028	$58,500		+ 4 months	$58,500
Pusan C	2006	9,580	May 2028	Confidential (6)	May 2028	$58,500		+ 4 months	$58,500
Bremen	2009	9,012	January 2028	Confidential (6)	January 2028	$56,000		+ 4 months	$56,000
C Hamburg	2009	9,012	January 2028	Confidential (6)	January 2028	$56,000		+ 4 months	$56,000
Niledutch Lion	2008	8,626	May 2026	Niledutch	May 2026	$47,500		+ 4 months	$47,500
Belita	2006	8,533	July 2026	CMA CGM	July 2026	$45,000		+ 6 months	$45,000
Kota Manzanillo	2005	8,533	February 2026	PIL	February 2026	$47,500		+ 4 months	$47,500
CMA CGM Melisande	2012	8,530	January 2028	CMA CGM	August 2024	$43,000
				Confidential (6)	January 2028	$34,500		+ 3 to 13.5 months	$34,500
CMA CGM Attila	2011	8,530	May 2027	CMA CGM	January 2024	$43,000
				Confidential (6)	May 2027	$34,500		+ 3 to 13.5 months	$34,500
CMA CGM Tancredi	2011	8,530	July 2027	CMA CGM	February 2024	$43,000
				Confidential (6)	July 2027	$34,500		+ 3 to 13.5 months	$34,500
CMA CGM Bianca	2011	8,530	September 2027	CMA CGM	April 2024	$43,000
				Confidential (6)	September 2027	$34,500		+ 3 to 13.5 months	$34,500
CMA CGM Samson	2011	8,530	November 2027	CMA CGM	June 2024	$43,000
				Confidential (6)	November 2027	$34,500		+ 3 to 13.5 months	$34,500
America	2004	8,468	April 2028	Confidential (6)	April 2028	$56,000		+ 4 months	$56,000
Europe	2004	8,468	May 2028	Confidential (6)	May 2028	$56,000		+ 4 months	$56,000
Kota Santos (ex Phoebe)	2005	8,463	August 2026	PIL	August 2025	$55,000
					August 2026	$50,000		+ 4 months	$55,000
CMA CGM Moliere	2009	6,500	March 2027	Confidential (6)	March 2027	$55,000		+ 2 months	$55,000
CMA CGM Musset	2010	6,500	September 2025	Confidential (6)	September 2025	$60,000		+ 23 to 25 months	$55,000
CMA CGM Nerval	2010	6,500	November 2025	Confidential (6)	November 2025	$40,000		+ 23 to 25 months	$30,000
CMA CGM Rabelais	2010	6,500	January 2026	Confidential (6)	January 2026	$40,000		+ 23 to 25 months	$30,000
Racine (ex CMA CGM Racine)	2010	6,500	April 2026	Confidential (6)	April 2024 April 2026	$30,000 $32,500		+ 2 months	$32,500
YM Mandate	2010	6,500	January 2028	Yang Ming	January 2028	$26,890	(5)	+ 8 months	$26,890
YM Maturity	2010	6,500	April 2028	Yang Ming	April 2028	$26,890	(5)	+ 8 months	$26,890
Dimitra C	2002	6,402	January 2024	Hapag Lloyd	January 2024	$21,500		+ 3 months	$21,500
ZIM Savannah	2002	6,402	May 2024	ZIM	May 2024	$36,000		+ 6 months	$36,000
Kota Lima	2002	5,544	November 2024	PIL	November 2024	$39,999		+ 4 months	$39,999
								+ 10 to 14 months	$27,500
								+ 10 to 12 months	$24,000
Suez Canal	2002	5,610	April 2026	Confidential (6)	April 2024 April 2026	$25,500 $27,500		+ 2 months	$27,500
Wide Alpha	2014	5,466	March 2024	ONE	March 2024	$18,500		+ 3 months	$18,500
Stephanie C	2014	5,466	June 2025	Confidential (6)	June 2025	$55,500		+ 4 months	$55,500
Maersk Euphrates	2014	5,466	April 2024	Maersk	April 2024	$17,500		+ 4 months	$17,500
Wide Hotel	2015	5,466	May 2024	ONE	May 2024	$18,500		+ 3 months	$18,500
Wide India	2015	5,466	November 2025	Confidential (6)	November 2025	$53,500		+ 4 months	$53,500
Wide Juliet	2015	5,466	September 2025	Confidential (6)	September 2025	$24,750		+ 4 months + 7 to 9 months	$24,750 $25,000

12

Vessel Details			Charter Arrangements
Vessel Name	Year Built	Size (TEU)	Expiration of Charter (1)	Charterer	Contracted Employment through (2)	Charter Rate (3)	Extension Options (4)
							Period	Charter Rate
							+ 11 to 13 months	$30,000
Rio Grande	2008	4,253	November 2024	OOCL	December 2023	$50,000
					November 2024	$17,000	+ 2 months	$45,000
Merve A (ex ZIM Sao Paolo)	2008	4,253	September 2025	Confidential (6)	September 2025	$24,000	+ 4 months	$24,000
Kingston (ex ZIM Kingston)	2008	4,253	June 2025	Confidential (6)	June 2025	$23,900	+ 2 months	$23,900
ZIM Monaco	2009	4,253	October 2024	Confidential (6)	October 2024	$53,000	+ 6 months	$53,000
Dalian	2009	4,253	March 2026	Confidential (6)	March 2026	$48,000	+ 3 months	$48,000
ZIM Luanda	2009	4,253	August 2025	ZIM	August 2025	$30,000	+ 4 months	$30,000
Seattle C	2007	4,253	October 2024	OOCL	November 2023	$50,000
					October 2024	$17,000	+ 2 months	$45,000
Vancouver	2007	4,253	November 2024	OOCL	December 2023	$50,000
					November 2024	$17,000	+ 2 months	$45,000
Derby D	2004	4,253	January 2027	CMA CGM	January 2027	$36,275	+ 3 months	$36,275
Tongala	2004	4,253	November 2024	Confidential (6)	November 2024	$53,000	+ 6 months	$53,000
Dimitris C	2001	3,430	November 2025	CMA CGM	November 2025	$40,000	+ 4 months	$40,000
Express Argentina	2010	3,400	September 2024	Confidential (6)	September 2024	$19,250	+3 months	$19,250
Express Brazil	2010	3,400	June 2025	CMA CGM	June 2025	$37,750	+ 2 months	$37,750
Express France	2010	3,400	September 2025	CMA CGM	September 2025	$37,750	+ 2 months	$37,750
Express Spain	2011	3,400	January 2025	Cosco	January 2025	$40,000	+ 2 months	$40,000
Express Black Sea	2011	3,400	January 2025	Cosco	January 2025	$40,000	+ 2 months	$40,000
Singapore	2004	3,314	May 2024	OOCL	November 2023	$38,450
					May 2024	$21,000	+ 6 months	$37,000
Colombo	2004	3,314	January 2025	Cosco	January 2025	$40,000	+ 2 months	$40,000
Zebra	2001	2,602	November 2024	Maersk	November 2024	$32,000	+ 4 months	$32,000
Artotina	2001	2,524	May 2025	Confidential (6)	May 2025	$28,000	+ 2 months	$28,000
Phoenix D	1997	2,200	March 2025	Maersk	March 2025	$28,000	+ 6 months	$28,000
Stride	1997	2,200	January 2025	Cosco	January 2025	$26,250	+ 2 months	$26,250
Sprinter	1997	2,200	December 2024	Cosco	December 2024	$26,250	+ 2 months	$26,250
Future	1997	2,200	December 2024	Cosco	December 2024	$26,250	+ 2 months	$26,250
Advance	1997	2,200	January 2025	Cosco	January 2025	$26,250	+ 2 months	$26,250
Bridge	1998	2,200	December 2024	Samudera	December 2024	$23,000	+ 6 months	$23,000
Highway	1998	2,200	February 2024	Confidential (6)	November 2023 February 2024	$15,000 $8,100	+ 2 months	$8,100
Progress C	1998	2,200	November 2024	Cosco	November 2024	$26,250	+ 2 months	$26,250

1.	Earliest date charters could expire. Most charters include options for the charterers to extend their terms as described in the “Extension Options” column.
2.	This column indicates the date through which the charter rate set forth in the column to the immediate right of such date is payable. For charters with the same charter rate throughout the fixed term of the charter, this date is the same as the charter expiration date set forth in the “Expiration of Charter” column.
3.	Gross charter rate, which does not include charter commissions.
4.	At the option of the charterer.
5.	Bareboat charter rate.
6.	Charterer not disclosed due to confidentiality arrangements.

13

The following table describes the details of our Capesize drybulk vessels, which did not generate any operating revenues in the three months ended September 30, 2023:

Vessel Name	Year Built		Capacity (DWT)
Bulk Achievement(2)		2011		175,850
Bulk Genius(1)		2012		175,580
Bulk Ingenuity(1)		2011		176,022
Integrity(1)		2010		175,996
Peace		2010		175,858
West Trader(2)		2009		175,879
East Trader(2)		2009		175,886

1.	The vessels were delivered to us in October and November 2023.
2.	The vessels are expected to be delivered to us between November and December 2023.

The specifications of our 10 contracted containerships under construction as of November 10, 2023 are as follows:

Hull Number	Year Built	Size (TEU)	Shipyard	Expected Delivery Period	Minimum Charter Duration(1)	Charter rate(2)	Extension Options(3)
							Period	Charter Rate(2)
Hull No. C7100-7	2024	7,165	Dalian Shipbuilding	3rd Quarter 2024	3 Years	$36,000	+ 4 months + 22 to 26 months	$36,000 $40,000
Hull No. C7100-8	2024	7,165	Dalian Shipbuilding	4th Quarter 2024	3 Years	$36,000	+ 4 months + 22 to 26 months	$36,000 $40,000
Hull No. HN4009	2024	8,010	Daehan Shipbuilding	2nd Quarter 2024	3 Years	$42,000	+ 3 months	$42,000
Hull No. HN4010	2024	8,010	Daehan Shipbuilding	2nd Quarter 2024	3 Years	$42,000	+ 3 months	$42,000
Hull No. HN4011	2024	8,010	Daehan Shipbuilding	3rd Quarter 2024	3 Years	$42,000	+ 3 months	$42,000
Hull No. HN4012	2024	8,010	Daehan Shipbuilding	3rd Quarter 2024	3 Years	$42,000	+ 3 months	$42,000
Hull No. CV5900-07	2024	6,014	Qingdao Yangfan Shipbuilding	4th Quarter 2024	-
Hull No. CV5900-08	2025	6,014	Qingdao Yangfan Shipbuilding	2nd Quarter 2025	-
Hull No. YZJ2023-1556	2026	8,258	Jiangsu NewYangzi Shipbuilding	3rd Quarter 2026	-
Hull No. YZJ2023-1557	2026	8,258	Jiangsu NewYangzi Shipbuilding	4th Quarter 2026	-

1.	Earliest period charters could expire. Most charters include options for the charterers to extend their terms as described in the “Extension Options” column.
2.	Gross charter rate, which does not include charter commissions.
3.	At the option of the charterer.

Executive Officers

On November 10, 2023, Iraklis Prokopakis’s previously announced retirement from his executive role as Senior Vice President and Chief Operating Officer of the Company became effective. Mr. Prokopakis will remain a member of the Company’s Board of Directors. On November 10, 2023, Dimitris Vastarouchas, who had been serving as the Company’s Deputy Chief Operating Officer was appointed the Company’s Chief Operating Officer, and Filippos Prokopakis, who had been serving as Commercial Director of our Manager, Danaos Shipping, was appointed Chief Commercial Officer of the Company.

Management Agreement

On November 10, 2023, we entered into an Amended and Restated Management Agreement with Danaos Shipping, extending the term from December 31, 2024 to December 31, 2025. Under the Amended and Restated Management Agreement we will pay our Manager the following fees: (i) an annual management fee of $2,000,000, commencing in 2024, and 100,000 shares of our common stock, payable annually commencing in the fourth quarter of 2023, (ii) a daily vessel management fee of $475 for vessels on bareboat charter, pro-rated for the number of calendar days we own each vessel, commencing in 2024, (iii) a daily vessel management fee of $950 for vessels on time charter, pro-rated for the number of calendar days we own each vessel, (iv) a fee of 1.25% on all freight, charter hire, ballast bonus and demurrage for each vessel, commencing in 2024, (v) a fee of 1.0% based on the contract price of any vessel bought or sold by it on our behalf, including newbuilding contracts, and (vi) a flat fee of $850,000 per newbuilding vessel, which we capitalize, for the on premises supervision of any newbuilding contracts by selected engineers and others of its staff.

14

Forward Looking Statements

Matters discussed in this report may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning our operations, cash flows, financial position, including with respect to vessel and other asset values, plans, objectives, goals, strategies, future events, performance or business prospects, changes and trends in our business and the markets in which we operate, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions. Although Danaos Corporation believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Danaos Corporation cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include any resurgence of the COVID-19 pandemic, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our operating expenses, including bunker prices, drydocking and insurance costs, our ability to operate profitably in the drybulk sector, our ability to obtain financing and comply with covenants in our financing arrangements, actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events, including the conflict in Ukraine and related sanctions, any escalation of the conflict in Israel and Gaza, or acts by terrorists.

Risks and uncertainties are further described in reports filed by us with the U.S. Securities and Exchange Commission.

15

INDEX TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (unaudited)	F-2
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	F-3
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)	F-4
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2023 and 2022 (unaudited)	F-5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)	F-6
Notes to the Unaudited Condensed Consolidated Financial Statements	F-7

F-1

DANAOS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(Expressed in thousands of United States Dollars, except share and per share amounts)

			As of
			September 30,			December 31,
	Notes		2023			2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	306,290		$	267,668
Accounts receivable, net				7,351			5,635
Inventories				16,831			16,099
Prepaid expenses				1,408			1,312
Due from related parties		14		41,728			34,002
Other current assets		6		124,589			47,805
Total current assets				498,197			372,521
NON-CURRENT ASSETS
Fixed assets at cost, net of accumulated depreciation of $1,278,166 (2022: $1,182,402)		4		2,652,958			2,721,494
Advances for vessels acquisition and vessels under construction		4		289,149			190,736
Deferred charges, net		5		33,998			25,554
Investments in affiliates		3		411			-
Other non-current assets		6		79,226			89,923
Total non-current assets				3,055,742			3,027,707
Total assets			$	3,553,939		$	3,400,228
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable			$	18,104		$	24,505
Accrued liabilities		7		16,682			21,362
Current portion of long-term debt, net		8		24,400			27,500
Current portion of long-term leaseback obligation, net		4		-			27,469
Unearned revenue				76,471			111,149
Other current liabilities		14		37,424			16,422
Total current liabilities				173,081			228,407
LONG-TERM LIABILITIES
Long-term debt, net		8		386,222			402,440
Long-term leaseback obligation, net of current portion		4		-			44,542
Unearned revenue, net of current portion				71,233			111,564
Other long-term liabilities		14		31,030			52,861
Total long-term liabilities				488,485			611,407
Total liabilities				661,566			839,814
Commitments and Contingencies		10
STOCKHOLDERS’ EQUITY
Preferred stock (par value $0.01, 100,000,000 preferred shares authorized and not issued as of September 30, 2023 and December 31, 2022)		11		-			-
Common stock (par value $0.01, 750,000,000 common shares authorized as of September 30, 2023 and December 31, 2022. 25,155,955 and 25,155,928 shares issued as of September 30, 2023 and December 31, 2022; and 19,497,008 and 20,349,702 shares outstanding as of September 30, 2023 and December 31, 2022)		11		195			203
Additional paid-in capital				695,593			748,109
Accumulated other comprehensive loss		9		(70,941	)		(74,209	)
Retained earnings				2,267,526			1,886,311
Total stockholders’ equity				2,892,373			2,560,414
Total liabilities and stockholders’ equity			$	3,553,939		$	3,400,228

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Expressed in thousands of United States Dollars, except share and per share amounts)

			Three months ended						Nine months ended
			September 30,						September 30,
	Notes		2023			2022			2023			2022
OPERATING REVENUES		12	$	239,215		$	260,037		$	724,268		$	740,861
OPERATING EXPENSES
Voyage expenses		14		(8,959	)		(10,320	)		(25,241	)		(26,952	)
Vessel operating expenses				(39,494	)		(39,186	)		(121,994	)		(118,929	)
Depreciation and amortization of right-of-use assets				(32,325	)		(34,141	)		(95,764	)		(101,253	)
Amortization of deferred drydocking and special survey costs		5		(4,772	)		(3,084	)		(13,109	)		(9,006	)
General and administrative expenses		14		(7,070	)		(7,157	)		(21,107	)		(21,684	)
Gain on sale of vessels		4		-			-			1,639			-
Income From Operations				146,595			166,149			448,692			463,037
OTHER INCOME (EXPENSES):
Interest income				3,091			1,323			9,410			1,444
Interest expense				(4,306	)		(15,968	)		(16,909	)		(49,161	)
Loss on investments		6		(9,333	)		(107,290	)		(2,895	)		(176,386	)
Dividend income		6		901			27,013			901			165,399
Gain/(loss) on debt extinguishment		4,8		-			-			(2,254	)		22,939
Equity loss on investments		3		(526	)		-			(3,852	)		-
Other finance expenses				(1,236	)		(155	)		(3,358	)		(1,096	)
Other income/(expenses), net				(1,117	)		411			(648	)		1,272
Loss on derivatives		9		(913	)		(913	)		(2,709	)		(2,709	)
Total Other Income/(Expenses), net				(13,439	)		(95,579	)		(22,314	)		(38,298	)
Income before income taxes				133,156			70,570			426,378			424,739
Income taxes		6		-			(3,770	)		-			(18,250	)
Net Income			$	133,156		$	66,800		$	426,378		$	406,489
EARNINGS PER SHARE
Basic earnings per share			$	6.76		$	3.29		$	21.28		$	19.77
Diluted earnings per share			$	6.76		$	3.29		$	21.28		$	19.75
Basic weighted average number of common shares (in thousands)		13		19,693			20,299			20,039			20,560
Diluted weighted average number of common shares (in thousands)		13		19,693			20,318			20,039			20,579

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(Expressed in thousands of United States Dollars)

			Three months ended				Nine months ended
			September 30,				September 30,
	Notes		2023		2022		2023		2022
Net income for the period			$	133,156	$	66,800	$	426,378	$	406,489
Other comprehensive income:
Prior service cost of defined benefit plan				187		-		559		-
Amortization of deferred realized losses on cash flow hedges		9		913		913		2,709		2,709
Total Other Comprehensive Income				1,100		913		3,268		2,709
Comprehensive Income			$	134,256	$	67,713	$	429,646	$	409,198

The accompanying notes are an integral part of these condensed consolidated financial statements

F-4

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited)

(Expressed in thousands of United States Dollars)

	Common Stock
	Number of shares			Par value			Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Total
As of December 31, 2021		20,717		$	207		$	770,676		$	(71,455	)	$	1,388,595		$	2,088,023
Net Income		—			—			—			—			331,465			331,465
Dividends ($0.75 per share)		—			—			—			—			(15,537	)		(15,537	)
Stock compensation		—			—			124			—			—			124
Net movement in other comprehensive income		—			—			—			893			—			893
As of March 31, 2022		20,717		$	207		$	770,800		$	(70,562	)	$	1,704,523		$	2,404,968
Net Income		—			—			—			—			8,224			8,224
Repurchase of common stock		(178	)		(2	)		(11,206	)		—			—			(11,208	)
Dividends ($0.75 per share)		—			—			—			—			(15,538	)		(15,538	)
Stock compensation		—			—			124			—			—			124
Issuance of common stock		—			—			5			—			—			5
Net movement in other comprehensive income		—			—			—			903			—			903
As of June 30, 2022		20,539		$	205		$	759,723		$	(69,659	)	$	1,697,209		$	2,387,478
Net Income		—			—			—			—			66,800			66,800
Repurchase of common stock		(289	)		(3	)		(17,342	)		—			—			(17,345	)
Dividends ($0.75 per share)		—			—			—			—			(15,231	)		(15,231	)
Stock compensation		—			—			125			—			—			125
Issuance of common stock		—			—			2			—			—			2
Net movement in other comprehensive income		—			—			—			913			—			913
As of September 30, 2022		20,250		$	202		$	742,508		$	(68,746	)	$	1,748,778		$	2,422,742
		Common Stock
		Number of shares			Par value			Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Total
As of December 31, 2022		20,350		$	203		$	748,109		$	(74,209	)	$	1,886,311		$	2,560,414
Net Income		—			—			—			—			146,201			146,201
Dividends ($0.75 per share)		—			—			—			—			(15,262	)		(15,262	)
Repurchase of common stock		(41	)		—			(2,196	)		—			—			(2,196	)
Issuance of common stock		—			—			1			—			—			1
Net movement in other comprehensive income		—			—			—			1,079			—			1,079
As of March 31, 2023		20,309		$	203		$	745,914		$	(73,130	)	$	2,017,250		$	2,690,237
Net Income		—			—			—			—			147,021			147,021
Dividends ($0.75 per share)		—			—			—			—			(15,099	)		(15,099	)
Repurchase of common stock		(557	)		(6	)		(33,760	)		—			—			(33,766	)
Net movement in other comprehensive income		—			—			—			1,089			—			1,089
As of June 30, 2023		19,752		$	197		$	712,154		$	(72,041	)	$	2,149,172		$	2,789,482
Net Income		—			—			—			—			133,156			133,156
Dividends ($0.75 per share)		—			—			—			—			(14,802	)		(14,802	)
Repurchase of common stock		(255	)		(2	)		(16,561	)		—			—			(16,563	)
Net movement in other comprehensive income		—			—			—			1,100			—			1,100
As of September 30, 2023		19,497		$	195		$	695,593		$	(70,941	)	$	2,267,526		$	2,892,373

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-5

DANAOS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Expressed in thousands of United States Dollars)

			Nine months ended
			September 30,
	Notes		2023			2022
Cash Flows from Operating Activities
Net income			$	426,378		$	406,489
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of right-of-use assets				95,764			101,253
Amortization of deferred drydocking and special survey costs				13,109			9,006
Amortization of assumed time charters				(16,806	)		(46,256	)
Amortization of finance costs				1,735			6,960
Debt discount amortization				-			2,433
Loss on investments				2,895			176,386
Payments for drydocking and special survey costs deferred				(21,553	)		(16,159	)
Gain on sale of vessels				(1,639	)		-
Loss/(gain) on debt extinguishment				2,254			(22,939	)
Equity loss on investments				3,852			-
Prior service cost and periodic cost				1,106			-
Stock based compensation				-			373
Amortization of deferred realized losses on interest rate swaps				2,709			2,709
(Increase)/Decrease in
Accounts receivable				(1,716	)		1,986
Inventories				(732	)		(3,281	)
Prepaid expenses				(96	)		(367	)
Due from related parties				(7,726	)		(9,737	)
Other assets, current and non-current				(2,870	)		(40,168	)
Increase/(Decrease) in
Accounts payable				(4,265	)		(449	)
Accrued liabilities				(3,540	)		(208	)
Unearned revenue, current and long-term				(58,203	)		189,994
Other liabilities, current and long-term				(544	)		31,219
Net Cash provided by Operating Activities				430,112			789,244
Cash Flows from Investing Activities
Vessels additions and advances				(128,058	)		(95,134	)
Proceeds/Advances from sale of vessels				3,914			13,000
Proceeds from sale of investments				-			246,638
Investments in affiliates/marketable securities				(74,407	)		-
Net Cash provided by/(used in) Investing Activities				(198,551	)		164,504
Cash Flows from Financing Activities
Proceeds from long-term debt				-			127,725
Payments of long-term debt				(20,625	)		(401,000	)
Payments of leaseback obligation				(72,925	)		(146,866	)
Dividends paid				(45,163	)		(46,298	)
Repurchase of common stock				(52,334	)		(28,553	)
Payments of accumulated accrued interest				-			(3,373	)
Finance costs				(1,892	)		(15,796	)
Net Cash used in Financing Activities				(192,939	)		(514,161	)
Net Increase in cash, cash equivalents and restricted cash				38,622			439,587
Cash, cash equivalents and restricted cash at beginning of period		15		267,668			129,756
Cash, cash equivalents and restricted cash at end of period		15	$	306,290		$	569,343
Supplemental information: Cash paid for interest, net of amounts capitalized				20,564			44,029

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-6

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 Basis of Presentation and General Information

The accompanying condensed consolidated financial statements (unaudited) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The reporting and functional currency of Danaos Corporation and its subsidiaries (“Danaos” or the “Company”), is the United States Dollar.

Danaos Corporation, formerly Danaos Holdings Limited, was formed on December 7, 1998 under the laws of Liberia and is presently the sole owner of all outstanding shares of the companies listed below. Danaos Holdings Limited was redomiciled in the Marshall Islands on October 7, 2005. In connection with the redomiciliation, the Company changed its name to Danaos Corporation. On October 14, 2005, the Company filed and the Marshall Islands accepted Amended and Restated Articles of Incorporation. The authorized capital stock of Danaos Corporation is 750,000,000 shares of common stock with a par value of $0.01 and 100,000,000 shares of preferred stock with a par value of $0.01. Refer to Note 11, “Stockholders’ Equity”. The Company’s principal business is the acquisition and operation of vessels. Danaos conducts its operations through the vessel owning companies whose principal activity is the ownership and operation of containerships and drybulk vessels that are under the exclusive management of a related party of the Company.

In the opinion of management, the accompanying condensed consolidated financial statements (unaudited) of Danaos and subsidiaries contain all adjustments necessary to state fairly, in all material respects, the Company’s condensed consolidated financial position as of September 30, 2023, the condensed consolidated results of operations for the three and nine months ended September 30, 2023 and 2022 and the condensed consolidated cash flows for the nine months ended September 30, 2023 and 2022. All such adjustments are deemed to be of a normal, recurring nature. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in Danaos’ Annual Report on Form 20-F for the year ended December 31, 2022. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for the full year. The year-end condensed consolidated balance sheet data was derived from annual financial statements. These condensed consolidated financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America.

The condensed consolidated financial statements (unaudited) have been prepared to reflect the consolidation of the companies listed below. The historical balance sheets and results of operations of the companies listed below have been reflected in the condensed consolidated balance sheets and condensed consolidated statements of income, comprehensive income, cash flows and stockholders’ equity at and for each period since their respective incorporation dates.

F-7

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1 Basis of Presentation and General Information (Continued)

As of September 30, 2023, Danaos included the following vessel owning companies (the “Danaos Subsidiaries”):

Container vessels

Company	Date of Incorporation	Vessel Name	Year Built	TEU(1)
Megacarrier (No. 1) Corp.	September 10, 2007	Hyundai Honour	2012	13,100
Megacarrier (No. 2) Corp.	September 10, 2007	Hyundai Respect	2012	13,100
Megacarrier (No. 3) Corp.	September 10, 2007	Hyundai Smart	2012	13,100
Megacarrier (No. 4) Corp.	September 10, 2007	Hyundai Speed	2012	13,100
Megacarrier (No. 5) Corp.	September 10, 2007	Hyundai Ambition	2012	13,100
CellContainer (No. 6) Corp.	October 31, 2007	Express Berlin	2011	10,100
CellContainer (No. 7) Corp.	October 31, 2007	Express Rome	2011	10,100
CellContainer (No. 8) Corp.	October 31, 2007	Express Athens	2011	10,100
Karlita Shipping Co. Ltd.	February 27, 2003	Pusan C	2006	9,580
Ramona Marine Co. Ltd.	February 27, 2003	Le Havre	2006	9,580
Oceancarrier (No. 2) Corp.	October 15, 2020	Bremen	2009	9,012
Oceancarrier (No. 3) Corp.	October 15, 2020	C Hamburg	2009	9,012
Blackwell Seaways Inc.	January 9, 2020	Niledutch Lion	2008	8,626
Oceancarrier (No. 1) Corp.	February 19, 2020	Kota Manzanillo	2005	8,533
Springer Shipping Co.	April 29, 2019	Belita	2006	8,533
Teucarrier (No. 5) Corp.	September 17, 2007	CMA CGM Melisande	2012	8,530
Teucarrier (No. 1) Corp.	January 31, 2007	CMA CGM Attila	2011	8,530
Teucarrier (No. 2) Corp.	January 31, 2007	CMA CGM Tancredi	2011	8,530
Teucarrier (No. 3) Corp.	January 31, 2007	CMA CGM Bianca	2011	8,530
Teucarrier (No. 4) Corp.	January 31, 2007	CMA CGM Samson	2011	8,530
Oceanew Shipping Ltd.	January 14, 2002	Europe	2004	8,468
Oceanprize Navigation Ltd.	January 21, 2003	America	2004	8,468
Rewarding International Shipping Inc.	October 1, 2019	Kota Santos	2005	8,463
Boxcarrier (No. 2) Corp.	June 27, 2006	CMA CGM Musset	2010	6,500
Boxcarrier (No. 3) Corp.	June 27, 2006	CMA CGM Nerval	2010	6,500
Boxcarrier (No. 4) Corp.	June 27, 2006	CMA CGM Rabelais	2010	6,500
Boxcarrier (No. 5) Corp.	June 27, 2006	Racine (ex CMA CGM Racine)	2010	6,500
Boxcarrier (No. 1) Corp.	June 27, 2006	CMA CGM Moliere	2009	6,500
Expresscarrier (No. 1) Corp.	March 5, 2007	YM Mandate	2010	6,500
Expresscarrier (No. 2) Corp.	March 5, 2007	YM Maturity	2010	6,500
Kingsland International Shipping Limited	June 26, 2015	Catherine C (2)	2001	6,422
Leo Shipping and Trading S.A.	October 29, 2015	Leo C (2)	2002	6,422
Actaea Company Limited	October 14, 2014	Zim Savannah	2002	6,402
Asteria Shipping Company Limited	October 14, 2014	Dimitra C	2002	6,402
Averto Shipping S.A.	June 12, 2015	Suez Canal	2002	5,610
Sinoi Marine Ltd.	June 12, 2015	Kota Lima	2002	5,544
Oceancarrier (No. 4) Corp.	July 6, 2021	Wide Alpha	2014	5,466
Oceancarrier (No. 5) Corp.	July 6, 2021	Stephanie C	2014	5,466
Oceancarrier (No. 6) Corp.	July 6, 2021	Maersk Euphrates	2014	5,466
Oceancarrier (No. 7) Corp.	July 6, 2021	Wide Hotel	2015	5,466
Oceancarrier (No. 8) Corp.	July 6, 2021	Wide India	2015	5,466
Oceancarrier (No. 9) Corp.	July 6, 2021	Wide Juliet	2015	5,466
Continent Marine Inc.	March 22, 2006	Zim Monaco	2009	4,253
Medsea Marine Inc.	May 8, 2006	Dalian	2009	4,253
Blacksea Marine Inc.	May 8, 2006	Zim Luanda	2009	4,253
Bayview Shipping Inc.	March 22, 2006	Rio Grande	2008	4,253
Channelview Marine Inc.	March 22, 2006	Merve A (ex Zim Sao Paolo)	2008	4,253
Balticsea Marine Inc.	March 22, 2006	Kingston (ex Zim Kingston)	2008	4,253
Seacarriers Services Inc.	June 28, 2005	Seattle C	2007	4,253
Seacarriers Lines Inc.	June 28, 2005	Vancouver	2007	4,253
Containers Services Inc.	May 30, 2002	Tongala	2004	4,253
Containers Lines Inc.	May 30, 2002	Derby D	2004	4,253

F-8

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1 Basis of Presentation and General Information (Continued)

Company	Date of Incorporation	Vessel Name	Year Built	TEU(1)
Boulevard Shiptrade S.A	September 12, 2013	Dimitris C	2001	3,430
CellContainer (No. 4) Corp.	March 23, 2007	Express Spain	2011	3,400
CellContainer (No. 5) Corp.	March 23, 2007	Express Black Sea	2011	3,400
CellContainer (No. 1) Corp.	March 23, 2007	Express Argentina	2010	3,400
CellContainer (No. 2) Corp.	March 23, 2007	Express Brazil	2010	3,400
CellContainer (No. 3) Corp.	March 23, 2007	Express France	2010	3,400
Wellington Marine Inc.	January 27, 2005	Singapore	2004	3,314
Auckland Marine Inc.	January 27, 2005	Colombo	2004	3,314
Vilos Navigation Company Ltd.	May 30, 2013	Zebra	2001	2,602
Trindade Maritime Company	April 10, 2013	Amalia C (3)	1998	2,452
Sarond Shipping Inc.	January 18, 2013	Artotina	2001	2,524
Speedcarrier (No. 7) Corp.	December 6, 2007	Highway	1998	2,200
Speedcarrier (No. 6) Corp.	December 6, 2007	Progress C	1998	2,200
Speedcarrier (No. 8) Corp.	December 6, 2007	Bridge	1998	2,200
Speedcarrier (No. 1) Corp.	June 28, 2007	Phoenix D	1997	2,200
Speedcarrier (No. 2) Corp.	June 28, 2007	Advance	1997	2,200
Speedcarrier (No. 3) Corp.	June 28, 2007	Stride	1997	2,200
Speedcarrier (No. 5) Corp.	June 28, 2007	Future	1997	2,200
Speedcarrier (No. 4) Corp.	June 28, 2007	Sprinter	1997	2,200
Container vessels under construction
Boxsail (No. 1) Corp.	March 4, 2022	Hull No. C7100-7	2024	7,165
Boxsail (No. 2) Corp.	March 4, 2022	Hull No. C7100-8	2024	7,165
Teushipper (No. 1) Corp.	March 14, 2022	Hull No. HN4009	2024	8,010
Teushipper (No. 2) Corp.	March 14, 2022	Hull No. HN4010	2024	8,010
Teushipper (No. 3) Corp.	March 14, 2022	Hull No. HN4011	2024	8,010
Teushipper (No. 4) Corp.	March 14, 2022	Hull No. HN4012	2024	8,010
Boxsail (No. 3) Corp.	March 4, 2022	Hull No. CV5900-07	2024	6,014
Boxsail (No. 4) Corp.	March 4, 2022	Hull No. CV5900-08	2025	6,014
Boxline (No. 1) Corp.	June 7, 2023	Hull No. YZJ2023-1556	2026	8,258
Boxline (No. 2) Corp.	June 7, 2023	Hull No. YZJ2023-1557	2026	8,258

(1) Twenty-feet equivalent unit, the international standard measure for containers and containership capacity.

(2) The Company completed the sale of the Catherine C and the Leo C in November 2022.

(3) The Company held the Amalia C for sale as of December 31, 2022 and completed the sale in January 2023.

Drybulk vessels

Company	Date of Incorporation	Vessel Name	Year Built	DWT(4)
Bulk No. 1 Corp.	July 14, 2023	Integrity (5)	2010	175,996
Bulk No. 2 Corp.	July 14, 2023	Bulk Achievement (6)	2011	175,850
Bulk No. 3 Corp.	July 14, 2023	Bulk Ingenuity (5)	2011	176,022
Bulk No. 4 Corp.	July 14, 2023	Bulk Genius (5)	2012	175,580
Bulk No. 5 Corp.	July 14, 2023	Peace	2010	175,858
Bulk No. 6 Corp.	September 15, 2023	West Trader (6)	2009	175,879
Bulk No. 7 Corp.	September 25, 2023	East Trader (6)	2009	175,886

(4) DWT, dead weight tons, the international standard measure for drybulk vessels capacity.

(5) The vessels were delivered to the Company in October and November 2023.

(6) The vessels are expected to be delivered to the Company between November and December 2023.

Impact of the wars in Ukraine and Gaza on the Company’s Business

As disclosed in the Company’s Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023, the current conflict between Russia and Ukraine, and related sanctions imposed by the U.S., EU and others, adversely affect the crewing operations of the Company’s Manager, which has crewing offices in St. Petersburg, Odessa and Mariupol (damaged by the war), and trade patterns involving ports in the Black Sea or Russia, and as well as impacting world energy supply and creating uncertainties in the global economy, which in turn impact containership and drybulk demand. The extent of the impact will depend largely on future developments.

F-9

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1 Basis of Presentation and General Information (Continued)

The war between Israel and Hamas in the Gaza Strip has not affected the Company’s business to date; however, an escalation of this conflict could have reverberations on the regional and global economies that could have the potential to adversely affect demand for containership cargoes and the Company’s business.

2 Significant Accounting Policies

For a detailed discussion about the Company’s significant accounting policies, see Note 2 “Significant Accounting Policies” in the Company’s consolidated financial statements included in the Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 9, 2023. During the nine months ended September 30, 2023, there were no significant changes made to the Company’s significant accounting policies.

3 Investments in Affiliates

In March 2023, the Company invested $4.3 million in the common shares of a newly established company Carbon Termination Technologies Corporation (“CTTC”), incorporated in the Republic of the Marshall Islands, which represents the Company’s 49% ownership interest. CTTC currently engages in research and development of decarbonization technologies for the shipping industry. Equity method of accounting is used for this investment. The Company’s share of CTTC’s initial expenses amounted to $3.9 million and is presented under “Equity loss on investments” in the condensed consolidated statement of income in the nine months ended September 30, 2023.

4 Fixed Assets, net & Advances for Vessels Acquisition and Vessels under Construction

In July 2023, the Company reached an agreement to acquire 5 Capesize bulk carriers built in 2010 through 2012 that aggregate to 879,306 DWT for a total of $103.0 million. One of these vessels was delivered to the Company on September 26, 2023, three vessels in October 2023 and the remaining one is expected to be delivered in November 2023. Additionally, in September 2023, the Company entered into agreements to acquire 2 Capesize bulk carriers built in 2009 that aggregate to 351,765 DWT for a total of $36.6 million. These 2 vessels are expected to be delivered to the Company between November and December 2023. The remaining aggregate contractual commitments under these vessel acquisition agreements amounted to $110.9 million (including commissions) as of September 30, 2023. The estimated useful life of Capesize bulk carriers is 25 years from the year built.

On April 1, 2022, the Company entered into contracts, as amended on April 21, 2022, for the construction of four 8,000 TEU container vessels with expected vessels delivery in 2024. On March 11, 2022, the Company entered into contracts for the construction of two 7,100 TEU container vessels with expected vessels delivery in 2024. On April 28, 2023, the Company entered into contracts for the construction of two 6,000 TEU container vessels with expected vessels delivery in 2024 and 2025. On June 20, 2023, the Company entered into contracts for the construction of two 8,200 TEU container vessels with expected vessels delivery in 2026. The aggregate purchase price of the vessel construction contracts amounts to $834.9 million. The remaining contractual commitments under 10 vessel construction contracts are analyzed as follows as of September 30, 2023 (in thousands):

Payments due by period ended
September 30, 2024	$	345,903
September 30, 2025		108,336
September 30, 2026		75,360
December 31, 2026		47,100
Total contractual commitments	$	576,699

Additionally, a supervision fee of $850 thousand per newbuilding vessel(as amended on November 10, 2023 – refer to Note 16, “Subsequent Events”) will be payable to Danaos Shipping Company Limited (the “Manager”) over the construction period. Supervision fees totaling $1.1 million were charged by the Manager and capitalized to the vessels under construction in the nine months ended September 30, 2023. Interest expense amounting to $5.0 million was capitalized to the vessels under construction in the year ended December 31, 2022 and $12.0 million in the nine months ended September 30, 2023.

F-10

4 Fixed Assets, net & Advances for Vessels Acquisition and Vessels under Construction (Continued)

On December 23, 2022, the Company entered into an agreement to sell the vessel Amalia C for an aggregate gross consideration of $5.1 million, which was delivered to its buyers in January 2023 resulting in a $1.6 million gain separately presented under “Gain on sale of vessels” in the condensed consolidated statement of income. The vessel was presented as held for sale under “Other current assets” and a $1.0 million advance payment received for sale of the vessel was presented under “Other current liabilities” as of December 31, 2022. On January 17, 2022, the Company entered into agreement to sell its vessels Catherine C and Leo C for aggregate gross consideration of $130.0 million, out of which $13.0 million were advanced by the buyers in January 2022. The vessels were delivered to their buyers in November 2022 resulting in a $37.2 million gain.

The Company assumed time charter liabilities related to its acquisition of vessels in the second half of 2021. The amortization of these assumed time charters amounted to $16.8 million and $46.3 million in the nine months ended September 30, 2023 and September 30, 2022, respectively and is presented under “Operating revenues” in the condensed consolidated statement of income. The remaining unamortized amount of $9.0 million is presented under “Unearned revenue, current portion” in the condensed consolidated balance sheet as of September 30, 2023 and is expected to be amortized into “Operating revenues” in the next 12 months.

The residual value (estimated scrap value at the end of the vessels’ useful lives) of the fleet was estimated at $492.3 million and $487.3 million as of September 30, 2023 and as of December 31, 2022, respectively. The Company has calculated the residual value of the vessels taking into consideration the 10 year average and the 5 year average of the scrap prices. The Company has applied uniformly the scrap value of $300 per ton for all vessels. The Company believes that $300 per ton is a reasonable estimate of future scrap prices, taking into consideration the cyclicality of the nature of future demand for scrap steel. Although the Company believes that the assumptions used to determine the scrap rate are reasonable and appropriate, such assumptions are highly subjective, in part, because of the cyclical nature of future demand for scrap steel.

On May 12, 2020, the Company refinanced the existing leaseback obligation related to the vessels Hyundai Honour and Hyundai Respect with a new sale and leaseback arrangement with Oriental Fleet International Company Limited (“Oriental Fleet”) amounting to $139.1 million with a four years term, at the end of which the Company would reacquire these vessels. This arrangement did not qualify for a sale of the vessels and the net proceeds were recognized as a financial leaseback liability. In January 2023, the Company gave early termination notice to Oriental Fleet and fully repaid its outstanding leaseback obligation related to these two vessels on May 12, 2023. The early termination resulted in a loss of $2.3 million, which is presented under “Loss on debt extinguishment” in the consolidated statement of income.

5            Deferred Charges, net

Deferred charges, net consisted of the following (in thousands):

	Drydocking and Special Survey Costs
As of January 1, 2022	$	11,801
Additions		29,939
Write-off		(4,016	)
Amortization		(12,170	)
As of December 31, 2022		25,554
Additions		21,553
Amortization		(13,109	)
As of September 30, 2023	$	33,998

F-11

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5 Deferred Charges, net (Continued)

The Company follows the deferral method of accounting for drydocking and special survey costs in accordance with accounting for planned major maintenance activities, whereby actual costs incurred are deferred and amortized on a straight-line basis over the period until the next scheduled survey, which is two and a half years. If special survey or drydocking is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Furthermore, when a vessel is drydocked for more than one reporting period, the respective costs are identified and recorded in the period in which they were incurred and not at the conclusion of the drydocking.

6 Other Current and Non-current Assets

Other current and non-current assets consisted of the following (in thousands):

	As of		As of
	September 30, 2023		December 31, 2022
Straight-lining of revenue	$	39,764	$	22,007
Marketable securities		65,267		-
Claims receivable		12,168		15,169
Vessel held for sale		-		3,297
Other assets		7,390		7,332
Total current assets	$	124,589	$	47,805
Straight-lining of revenue	$	70,887	$	83,873
Other non-current assets		8,339		6,050
Total non-current assets	$	79,226	$	89,923

In June 2023, the Company acquired marketable securities of Eagle Bulk Shipping Inc. consisting of 1,552,865 shares of common stock for $68.2 million (out of which $24.4 million from Virage International Ltd., a related company). As of September 30, 2023, these marketable securities were fair valued at $65.3 million and the Company recognized a $2.9 million loss on these marketable securities reflected under “Loss on investments” in the condensed consolidated statement of income. Additionally, the Company recognized dividend income on these shares amounting to $0.9 million in the three months ended September 30, 2023.

The Company’s shareholding interest in ZIM of 7,186,950 ordinary shares was fair valued at $423.0 million and presented under “Other current assets” in the condensed consolidated balance sheet as of December 31, 2021, based on the closing price of ZIM ordinary shares on the NYSE on that date. In April 2022, the Company sold 1,500,000 ordinary shares of ZIM resulting in net proceeds of $85.3 million. All the remaining shareholding interest of 5,686,950 ordinary shares were sold for $161.3 million in September 2022. For the nine months ended September 30, 2022, the Company recognized $176.4 million loss on these shares compared to none in the nine months ended September 30, 2023. This loss is reflected under “Loss on investments” in the condensed consolidated statement of income. Additionally, the Company recognized dividend income on these shares amounting to $165.4 million in the nine months ended September 30, 2022 gross of withholding taxes compared to none in the nine months ended September 30, 2023. Withholding taxes amounting to $18.3 million were recognized on dividend income under “Income taxes” in the condensed consolidated statement of income in the nine months ended September 30, 2022.

F-12

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7 Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	As of		As of
	September 30, 2023		December 31, 2022
Accrued interest	$	2,736	$	8,267
Accrued drydocking expenses		2,601		2,332
Accrued expenses		11,345		10,763
Total	$	16,682	$	21,362

Accrued expenses mainly consisted of accruals related to the operation of the Company’s fleet as of September 30, 2023 and December 31, 2022.

8 Long-Term Debt, net

Long-term debt, net consisted of the following (in thousands):

Credit Facility	Balance as of September 30, 2023			Balance as of December 31, 2022
BNP Paribas/Credit Agricole $130 mil. Facility	$	105,000		$	120,000
Alpha Bank $55.25 mil. Facility		49,625			55,250
Citibank $382.5 mil. Revolving Credit Facility		–			–
Senior unsecured notes		262,766			262,766
Total long-term debt	$	417,391		$	438,016
Less: Deferred finance costs, net		(6,769	)		(8,076	)
Less: Current portion		(24,400	)		(27,500	)
Total long-term debt net of current portion and deferred finance cost	$	386,222		$	402,440

In June 2022, the Company drew down $130.0 million of senior secured term loan facility from BNP Paribas and Credit Agricole, which is secured by six 5,466 TEU sister vessels acquired in 2021. This facility is repayable in eight quarterly instalments of $5.0 million, twelve quarterly instalments of $1.9 million together with a balloon payment of $67.2 million payable over five-year term. The facility bears interest at SOFR plus a margin of 2.16% as adjusted by the sustainability margin adjustment.

In the three months ended June 30, 2022, the Company early extinguished certain loan facilities resulting in a total gain on debt extinguishment of $22.9 million, which is separately presented in the consolidated statement of income. In December 2022, the Company early extinguished the remaining $437.75 million of the Citibank/Natwest $815 mil. Facility and replaced it with Citibank of up to $382.5 mil. Revolving Credit Facility, out of which nil is drawn down as of September 30, 2023 and with Alpha Bank $55.25 mil. Facility, which was drawn down in full. Citibank $382.5 mil. Revolving Credit Facility is reducing and repayable over 5 years in 20 quarterly reductions of $11.25 million each together with a final reduction of $157.5 million at maturity in December 2027. This facility bears interest at SOFR plus a margin of 2.0% and commitment fee of 0.8% on any undrawn amount and is secured by sixteen of the Company’s vessels. Alpha Bank $55.25 mil. Facility is repayable over 5 years with 20 consecutive quarterly instalments of $1.875 million each, together with a balloon payment of $17.75 million at maturity in December 2027. This facility bears interest at SOFR plus a margin of 2.3% and is secured by two of the Company’s vessels.

F-13

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8 Long-Term Debt, net (Continued)

The Company incurred interest expense amounting to $27.1 million (including interest on leaseback obligations), out of which $12.0 million was capitalized in the nine months ended September 30, 2023 compared to $41.8 million of interest expense incurred (including interest on leaseback obligations), out of which $2.0 million was capitalized in the nine months ended September 30, 2022. As of September 30, 2023, there was a $348.75 million remaining borrowing availability under the Company’s Citibank $382.5 mil. Revolving Credit Facility. Twenty-four of the Company’s vessels having a net carrying value of $1,540.4 million as of September 30, 2023, were subject to first preferred mortgages as collateral to the Company’s credit facilities other than its senior unsecured notes.

On February 11, 2021, the Company issued in a private placement, $300.0 million aggregate principal amount of senior unsecured notes, which bear interest at a fixed rate of 8.50% per annum and mature on March 1, 2028. At any time on or after March 1, 2024, March 1, 2025 and March 1, 2026 the Company may elect to redeem all or any portion of the notes, respectively, at a price equal to 104.25%, 102.125% and 100%, respectively, of the principal amount being redeemed. Prior to March 1, 2024 the Company may redeem up to 35% of the aggregate principal of the notes from equity offering proceeds at a price equal to 108.50% within 90 days after the equity offering closing. In December 2022, the Company repurchased $37.2 million aggregate principal amount of its unsecured senior notes in a privately negotiated transaction. Interest payments on the notes are payable semi-annually commencing on September 1, 2021. $9.0 million of bond issuance costs were deferred over the life of the bond and recognized through the effective interest method.

The scheduled debt maturities of long-term debt subsequent to September 30, 2023 are as follows (in thousands):

Payments due by period ended	Principal repayments
September 30, 2024	$	24,400
September 30, 2025		15,100
September 30, 2026		15,100
September 30, 2027		80,400
March 2028		282,391
Total long-term debt	$	417,391

Alpha Bank $55.25 mil. Facility and Citibank $382.5 mil. Revolving Credit Facility contain a requirement to maintain minimum fair market value of collateral vessels to loan value coverage of 120% and the BNP Paribas/Credit Agricole $130 mil. Facility of 125%. Additionally, these facilities require to maintain the following financial covenants:

(i)	minimum liquidity of $30.0 million;
(ii)	maximum consolidated debt (less cash and cash equivalents) to consolidated EBITDA ratio of 6.5x; and
(iii)	minimum consolidated EBITDA to net interest expense ratio of 2.5x.

Each of the credit facilities except for senior unsecured notes are collateralized by first preferred mortgages over the vessels financed, general assignment of all hire freights, income and earnings, the assignment of their insurance policies, as well as any proceeds from the sale of mortgaged vessels, stock pledges and benefits from corporate guarantees. The Company was in compliance with the financial covenants contained in the credit facilities agreements as of September 30, 2023 and December 31, 2022.

F-14

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9 Financial Instruments

The following is a summary of the Company’s risk management strategies and the effect of these strategies on the Company’s condensed consolidated financial statements.

Interest Rate Risk: Interest rate risk arises on bank borrowings. The Company monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favorable rates.

Concentration of Credit Risk: Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company is exposed to credit risk in the event of non-performance by counterparties, however, the Company limits this exposure by diversifying among counterparties with high credit ratings. The Company depends upon a limited number of customers for a large part of its revenues. Credit risk with respect to trade accounts receivable is generally managed by the selection of customers among the major liner companies in the world and their dispersion across many geographic areas.

Fair Value: The carrying amounts reflected in the accompanying consolidated balance sheets of financial assets and liabilities (excluding long-term bank loans and certain other non-current assets) approximate their respective fair values due to the short maturity of these instruments. The fair values of long-term floating rate bank loans approximate the recorded values, generally due to their variable interest rates. The fair value of senior unsecured notes is measured based on quoted market prices. The fair value of marketable securities is measured based on the closing price of the securities on the NYSE.

a. Interest Rate Swap Hedges

The Company currently has no outstanding interest rate swaps agreements. However, in the past years, the Company entered into interest rate swap agreements with its lenders in order to manage its floating rate exposure. Certain variable-rate interests on specific borrowings were associated with vessels under construction and were capitalized as a cost of the specific vessels. In accordance with the accounting guidance on derivatives and hedging, the amounts related to realized gains or losses on cash flow hedges that have been entered into and qualified for hedge accounting, in order to hedge the variability of that interest, were recognized in accumulated other comprehensive loss and are reclassified into earnings over the depreciable life of the constructed asset, since that depreciable life coincides with the amortization period for the capitalized interest cost on the debt. An amount of $2.7 million was reclassified into earnings for the nine months ended September 30, 2023 and 2022, representing its amortization over the depreciable life of the vessels. An amount of $3.6 million is expected to be reclassified into earnings within the next 12 months.

b. Fair Value of Financial Instruments

The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy.

Level I: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation of these items does not entail a significant amount of judgment.

Level II: Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III: Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2023 and December 31, 2022.

F-15

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9 Financial Instruments (Continued)

The estimated fair values of the Company’s financial instruments are as follows:

	As of September 30, 2023				As of December 31, 2022
	Book Value		Fair Value		Book Value		Fair Value
	(in thousands of $)
Cash and cash equivalents	$	306,290	$	306,290	$	267,668	$	267,668
Marketable securities	$	65,267	$	65,267	$	—	$	—
Secured long-term debt, including current portion(1)	$	154,625	$	154,625	$	175,250	$	175,250
Unsecured long-term debt(1)	$	262,766	$	266,707	$	262,766	$	255,868

The estimated fair value of the financial instruments that are measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of September 30, 2023:

	Fair Value Measurements as of September 30, 2023
	Total		(Level I)		(Level II)		(Level III)
	(in thousands of $)
Marketable securities	$	65,267	$	65,267	$	—	$	—

The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of September 30, 2023:

	Fair Value Measurements as of September 30, 2023
	Total		(Level I)		(Level II)		(Level III)
	(in thousands of $)
Cash and cash equivalents	$	306,290	$	306,290	$	—	$	—
Secured long-term debt, including current portion(1)	$	154,625	$	—	$	154,625	$	—
Unsecured long-term debt(1)	$	266,707	$	266,707	$	—	$	—

The estimated fair value of the financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows as of December 31, 2022:

	Fair Value Measurements as of December 31, 2022
	Total		(Level I)		(Level II)		(Level III)
	(in thousands of $)
Cash and cash equivalents	$	267,668	$	267,668	$	—	$	—
Secured long-term debt, including current portion(1)	$	175,250	$	—	$	175,250	$	—
Unsecured long-term debt(1)	$	255,868	$	255,868	$	—	$	—

(1) Secured and unsecured long-term debt, including current portion is presented gross of deferred finance costs of $6.8 million and $8.1 million as of September 30, 2023 and December 31, 2022, respectively. The fair value of the Company’s secured debt is estimated based on currently available debt with similar contract terms, interest rate and remaining maturities.

F-16

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10 Commitments and Contingencies

There are no material legal proceedings to which the Company is a party or to which any of its properties are the subject, or other contingencies that the Company is aware of, other than routine litigation incidental to the Company’s business.

The Company has outstanding commitments under vessel construction contracts and contracts for the acquisition of secondhand drybulk vessels as of September 30, 2023, see the Note 4 “Fixed Assets, net & Advances for Vessels Acquisition and Vessels under Construction”.

11 Stockholders’ Equity

In the nine months ended September 30, 2023, the Company declared a dividend of $0.75 per share of common stock in February, May and August amounting to $45.2 million. In the nine months ended September 30, 2022, the Company declared a dividend of $0.75 per share of common stock in February, May and August amounting to $46.3 million. The Company issued 27 and 95 shares of common stock pursuant to its dividends reinvestment plan in the nine months ended September 30, 2023 and September 30, 2022, respectively.

In June 2022, the Company announced a share repurchase program of up to $100 million of the Company’s common stock. The Company had repurchased 466,955 shares of the Company’s common stock in the open market for $28.6 million until December 31, 2022. In the nine months ended September 30, 2023, the Company repurchased an additional 852,721 shares for $52.5 million, out of which 2,900 shares valued at $0.2 million remained unsettled as of September 30, 2023.

As of April 18, 2008, the Board of Directors and the Compensation Committee approved incentive compensation of the Manager’s employees with its shares from time to time, after specific for each such time, decision by the compensation committee and the Board of Directors in order to provide a means of compensation in the form of free shares to certain employees of the Manager of the Company’s common stock. The plan was effective as of December 31, 2008. Pursuant to the terms of the plan, employees of the Manager may receive (from time to time) shares of the Company’s common stock as additional compensation for their services offered during the preceding period. The total amount of stock to be granted to employees of the Manager will be at the Company’s Board of Directors’ discretion only and there will be no contractual obligation for any stock to be granted as part of the employees’ compensation package in future periods.

On March 16, 2021, the Company granted 40,000 shares to certain employees of the Manager, out of which 10,000 fully vested on the grant date, 1,050 were forfeited and 9,650 restricted shares vested on December 31, 2021. An additional 224 restricted shares were forfeited in the year ended December 31, 2022 and the remaining 19,076 restricted shares vested on December 31, 2022. On December 14, 2022, the Company granted 100,000 fully vested shares to executive officers. The fair value of shares granted was calculated based on the closing trading price of the Company’s shares at the grant date. Stock based compensation expenses of nil and $0.4 million were recognized under “General and administrative expenses” in the condensed consolidated statements of income in the nine months period ended September 30, 2023 and September 30, 2022, respectively. No restricted stock are issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

The aggregate number of shares of common stock for which awards may be granted under the Plan shall not exceed 1,000,000 shares plus the number of unvested shares granted before August 2, 2019. The equity awards may be granted by the Company’s Compensation Committee or Board of Directors under its amended and restated 2006 equity compensation plan. Awards made under the Plan that have been forfeited, cancelled or have expired, will not be treated as having been granted for purposes of the preceding sentence.

F-17

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11 Stockholders’ Equity (Continued)

The Company has also established the Directors Share Payment Plan under its 2006 equity compensation plan. The purpose of the plan is to provide a means of payment of all or a portion of compensation payable to directors of the Company in the form of Company’s Common Stock. The plan was effective as of April 18, 2008. Each member of the Board of Directors of the Company may participate in the plan. Pursuant to the terms of the plan, directors may elect to receive in Company’s common stock all or a portion of their compensation. Following December 31 of each year, the Company delivers to each Director the number of shares represented by the rights credited to their share payment account during the preceding calendar year. During the nine months ended September 30, 2023 and September 30, 2022, none of the directors elected to receive their compensation in Company shares.

12 Lease Arrangements

Charters-out

As of September 30, 2023, the Company generated operating revenues from its 68 container vessels on time charters or bareboat charter agreements, with remaining terms ranging from less than one year to June 2028. The Capesize drybulk vessel did not generate any operating revenues nor had any lease arrangements as of September 30, 2023. Under the terms of the charter party agreements, most charterers have options to extend the duration of contracts ranging from less than one year to three years after the expiration of the contract. The Company determines fair value of its vessels at the lease commencement date and at the end of lease term for lease classification with the assistance from valuations obtained by third party independent shipbrokers. The Company manages its risk associated with the residual value of its vessels after the expiration of the charter party agreements by seeking multi-year charter arrangements for its vessels.

In May 2022, the Company received $238.9 million of charter hire prepayment related to charter contracts for 15 of the Company’s vessels, representing partial prepayment of charter hire payable up to January 2027. This charter hire prepayment is recognized in revenue through the remaining period of each charter party agreement, in addition to the contracted future minimum payments reflected in the below table. The future minimum payments, expected to be received on non-cancellable time charters and bareboat charters classified as operating leases consisted of the following as of September 30, 2023 (in thousands):

Remainder of 2023	$	227,469
2024		820,996
2025		627,777
2026		447,044
2027		275,867
2028		35,354
Total future rentals	$	2,434,507

Rentals from time charters are not generally received when a vessel is off-hire, including time required for normal periodic maintenance of the vessel. In arriving at the future minimum rentals, an estimated time off-hire to perform periodic maintenance on each vessel has been deducted, although there is no assurance that such estimate will be reflective of the actual off-hire in the future.

F-18

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13 Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended
	September 30, 2023		September 30, 2022
	(in thousands)
Numerator:
Net income	$	133,156	$	66,800
Denominator (number of shares in thousands):
Basic weighted average common shares outstanding		19,693		20,299
Effect of dilutive securities:
Diluted effect of non-vested shares		-		19
Diluted weighted average common shares outstanding		19,693		20,318

	Nine months ended
	September 30, 2023		September 30, 2022
	(in thousands)
Numerator:
Net income	$	426,378	$	406,489
Denominator (number of shares in thousands):
Basic weighted average common shares outstanding		20,039		20,560
Effect of dilutive securities:
Diluted effect of non-vested shares		-		19
Diluted weighted average common shares outstanding		20,039		20,579

14 Related Party Transactions

Management fees to the Manager amounted to $15.8 million and $16.5 million in the nine months ended September 30, 2023 and 2022, respectively, and are presented under “General and administrative expenses” in the condensed consolidated statements of income.

Commissions to the Manager amounted to $8.6 million and $11.6 million in the nine months ended September 30, 2023 and 2022, respectively and are presented under “Voyage expenses” in the condensed consolidated statements of income. Commission of 0.5% on the contract price of the vessel sold in January 2023 amounted to $25.6 thousand and is presented under “Gain on sale of vessels”. Commission of 0.5% on the contract price of a newly acquired vessel amounted to $0.1 million and was capitalized to the vessel cost in the nine months ended September 30, 2023. Additionally, supervision fees for vessels under construction totaling $1.1 million were charged by the Manager and capitalized to vessels under construction costs in the nine months ended September 30, 2023 and nil in 2022, respectively.

The balance “Due from related parties” in the condensed consolidated balance sheets totaling $41.7 million and $34.0 million as of September 30, 2023 and December 31, 2022, respectively, represents advances to the Manager on account of the vessels’ operating and other expenses. Advances related to a defined benefit executive retirement plan amounting to $6.8 million and presented under “Other current liabilities” as of December 31, 2022 were fully paid in the three months ended March 31, 2023. The remaining defined benefit obligation of $6.9 million and $6.4 million is presented under “Other long-term liabilities” as of September 30, 2023 and December 31, 2022, respectively. The Company recognized prior service cost and periodic cost of this defined benefit executive retirement plan amounting to $1.1 million and nil in the nine months ended September 30, 2023 and September 30, 2022, respectively. An amount of $0.1 million as of September 30, 2023 and December 31, 2022 was due to executive officers and is presented under “Accounts payable” in the condensed consolidated balance sheets.

F-19

DANAOS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15 Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following (in thousands):

	As of		As of		As of		As of
	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Cash and cash equivalents	$	306,290	$	267,668	$	556,343	$	129,410
Restricted cash, current		-		-		13,000		346
Total	$	306,290	$	267,668	$	569,343	$	129,756

The Company was required to maintain cash on retention account as collateral for the then upcoming scheduled debt payments related to the now repaid Eurobank $30 mil. Facility, which was recorded in restricted cash under current assets as of December 31, 2021. Additionally, the Company received an advance payment for sale of the vessels of $13.0 million, which was held on an escrow account under current assets as of September 30, 2022.

16 Subsequent Events

The Company has declared a dividend of $0.80 per share of common stock payable on December 6, 2023, to holders of record on November 27, 2023.

Subsequent to September 30, 2023, the Company repurchased 250,519 shares of its common stock in the open market for $16.3 million under its previously announced share repurchase program. Additional share repurchase program of up to $100 million was approved by the Company’s Board of Directors on November 10, 2023.

On November 10, 2023, the Company entered into an Amended and Restated Management Agreement with the Manager, extending the term from December 31, 2024 to December 31, 2025. Under the Amended and Restated Management Agreement the Company will pay to the Manager the following fees: (i) an annual management fee of $2,000,000, commencing in 2024, and 100,000 shares of the Company’s common stock, payable annually commencing in the fourth quarter of 2023, (ii) a daily vessel management fee of $475 for vessels on bareboat charter, pro-rated for the number of calendar days the Company owns each vessel, commencing in 2024, (iii) a daily vessel management fee of $950 for vessels on time charter, pro-rated for the number of calendar days the Company owns each vessel, (iv) a fee of 1.25% on all freight, charter hire, ballast bonus and demurrage for each vessel, commencing in 2024, (v) a fee of 1.0% based on the contract price of any vessel bought or sold by it on our behalf, including newbuilding contracts, and (vi) a flat fee of $850,000 per newbuilding vessel, which is capitalized to the newbuilding cost, for the on premises supervision of any newbuilding contracts by selected engineers and others of its staff.

F-20