Press Releases

View and read historical press releases from 2005 to present.

Seaspan Reports Financial Results for the Three and Six Months Ended June 30, 2011

Signs Newbuilding Contracts for Fuel Efficient 10000 TEU Vessels and Secures Ten-Year Time Charters with Hanjin Shipping

Newbuilding Contracts Expected to be First in a Series of Orders in Company's Next Phase of Fleet Expansion

 

HONG KONG, CHINA - Aug. 4, 2011 /CNW/ - Seaspan Corporation (NYSE:SSW) announced today the financial results for the three and six months ended June 30, 2011. Below is a summary of Seaspan's key financial results:

Summary of Key Financial Results (dollars in thousands):                    

                                Three Months Ended                          
                                     June 30,                Change         
                              ----------------------------------------------
                                    2011        2010           $         %  
                              ----------- ----------- ---------- -----------
Reported net loss             $  (34,862) $ (121,842) $   86,980      71.4% 
Normalized net earnings(1)    $   28,675  $   22,284  $    6,391      28.7% 
Loss per share, basic and                                                   
 diluted                      $    (0.72) $    (1.89) $     1.17      61.9% 
Normalized earnings per                                                     
 share, converted(1) (Series                                                
 A preferred shares converted                                               
 at $15)                      $     0.24  $     0.27  $    (0.03)    (11.1%)
Cash available for                                                          
 distribution to common                                                     
 shareholders(2)              $   53,533  $   46,164  $    7,369      16.0% 
Adjusted EBITDA(3)            $   95,831  $   68,538  $   27,293      39.8% 


                                Six Months Ended                            
                                    June 30,                 Change         
                             -----------------------------------------------
                                   2011        2010           $           % 
                             ----------- ----------- ----------- -----------
Reported net earnings (loss) $   15,690  $ (158,458) $  174,148       109.9%
Normalized net earnings(1)   $   53,821  $   41,912  $   11,909        28.4%
Loss per share, basic and                                                   
 diluted                     $    (0.17) $    (2.52) $     2.35        93.3%
Normalized earnings per                                                     
 share, converted(1) (Series                                                
 A preferred shares                                                         
 converted at $15)           $     0.48  $     0.50  $    (0.02)      (4.0)%
Cash available for                                                          
 distribution to common                                                     
 shareholders(2)             $  104,430  $   86,096  $   18,334        21.3%
Adjusted EBITDA(3)           $  183,066  $  124,566  $   58,500        47.0%

-----------------------------                                               

(1) Normalized net earnings and normalized earnings per share are non-GAAP  
measures that are adjusted for items such as the change in fair value of    
financial instruments, interest expense, interest expense at the hedged rate
and other items that Seaspan believes are not representative of its         
operating performance. Normalized earnings per share, converted, reflects   
normalized earnings per share on a pro-forma basis on the assumption that   
the Series A preferred shares are converted at $15.00 per share. Please read
"Reconciliation of Non-GAAP Financial Measures for the Three and Six Months 
Ended June 30, 2011 - Description of Non-GAAP Financial Measures - B.       
Normalized Net Earnings and Normalized Earnings per Share" for a description
of normalized net earnings and normalized earnings per share and normalized 
earnings per share, converted, and for reconciliations of these measures to 
net earnings and earnings per share, respectively.                          

(2)   Cash available for distribution to common shareholders is a non-GAAP  
measure that represents net earnings adjusted for depreciation, amortization
of deferred charges, non-cash share-based compensation, dry-dock adjustment,
change in fair value of financial instruments, interest expense, interest   
expense at the hedged rate, cash dividends paid on preferred shares and     
other items that Seaspan believes are not representative of its operating   
performance. Please read "Reconciliation of Non-GAAP Financial Measures for 
the Three and Six Months Ended June 30, 2011 - Description of Non-GAAP      
Financial Measures - A. Cash Available for Distribution to Common           
Shareholders" for a description of cash available for distribution to common
shareholders and a reconciliation of cash available for distribution to net 
earnings.                                                                   

(3)   Adjusted EBITDA is a non-GAAP measure that represents net earnings    
(loss) before interest expense and other debt-related expenses, interest    
income, income tax expense, depreciation and amortization expense, change in
fair value of financial instruments, and certain non-cash charges and       
selected items that are generally unusual or non-recurring that Seaspan     
believes are not representative of its operating performance. Please read   
"Reconciliation of Non-GAAP Financial Measures for the Three and Six Months 
Ended June 30, 2011 - Description of Non-GAAP Financial Measures - C.       
Adjusted EBITDA" for a description of adjusted EBITDA and a reconciliation  
of adjusted EBITDA to net earnings.                                         

Summary of Key Highlights                                                   

--  Achieved vessel utilization of 98.9% for the three and six months ended
    June 30, 2011; 

--  Accepted delivery of four newbuilding vessels during the second quarter,
    bringing Seaspan's operating fleet to a total of 62 vessels as at June
    30, 2011. Two of the four delivered vessels are 13100 TEU vessels, the
    largest vessels in Seaspan's fleet and flagship vessels in COSCON's
    containership fleet; 

--  Completed second issuance of four million shares of 9.5% Series C
    preferred stock in May 2011 for net proceeds of $105.2 million; 

--  Signed construction contracts for three newbuilding 10000 TEU
    containerships scheduled for delivery in 2014, and diversified Seaspan's
    high-quality customer portfolio by signing ten-year, fixed-rate charters
    for the newbuilding vessels with Hanjin Shipping Co., Ltd. ("Hanjin");  

--  Paid the first quarterly dividend on the Series C preferred shares on
    May 2, 2011 of $0.606944 per share; 

--  Paid a first quarter dividend of $0.1875 per common share on May 23,
    2011, which represents a 50.0% and 87.5% increase over the dividends
    paid for the fourth quarter of 2010 and first quarter of 2010,
    respectively; 

--  Declared a quarterly dividend of $0.600347 per Series C preferred share
    on July 19, 2011, representing a distribution of $8.4 million. The
    dividend was paid on August 1, 2011 to all Series C shareholders of
    record as of July 29, 2011 for the period from April 30, 2011 to July
    29, 2011; and 

--  Declared a second quarter dividend of $0.1875 per common share to be
    paid on August 22, 2011 to all common shareholders of record as of
    August 15, 2011, increasing cumulative dividends declared to $7.34 per
    common share since August 2005 initial public offering. 

Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of Seaspan, commented, "During the second quarter, we continued to grow our fleet, positioning Seaspan to further expand its contracted revenue stream, net earnings and cash available for distribution. In addition to taking delivery of four newbuildings, we capitalized on a compelling ship acquisition environment and commenced our next phase of growth."

Mr. Wang added, "We are pleased to have re-entered the newbuilding market by signing contracts for the construction of three 10000 TEU newbuildings pursuant to our right of first refusal agreement with Greater China Intermodal Investments LLC ("GCI"). In addition to realizing volume discounts and favorable pricing terms, we drew upon our new containership venture to introduce our innovative SAVER design, which we believe will provide significantly improved fuel efficiency and operational savings to customers. The addition of Hanjin, the largest Korean-based liner company, is aligned with Seaspan's strategy of diversifying its high quality customer portfolio."

Mr. Wang concluded, "During the second quarter, we also maintained our focus on strengthening Seaspan's capital structure to fund future growth by completing our second offering of our Series C preferred stock. We intend to pursue attractive growth opportunities that strengthen our leadership position in the industry and to utilize our strong balance sheet to continue to act opportunistically. We expect our most recent newbuilding orders to be the first in a series of orders in our next phase of fleet expansion as we continue to benefit from the scale and buying power of our recently formed containership venture, and to serve as a template for our controlled and balanced growth strategy."

Second Quarter Developments

Issuance of Four Million Series C Preferred Shares

On May 25, 2011, Seaspan completed a public offering of four million shares of its Series C preferred stock at price of $27.15 per share, for net proceeds of $105.2 million, which included accrued dividends to May 25, 2011 of $0.15 per share. The shares were sold at a $2.00 premium per share over the stated liquidation preference of $25 per share. Dividends are payable on the Series C preferred shares at an initial rate of 9.5% per annum of the stated liquidation preference. Seaspan intends to use the net proceeds from this offering for general corporate purposes, including funding the construction of its three new 10000 TEU containerships.

Newbuilding Order and New Customer

Seaspan has signed contracts for the construction of three 10000 TEU newbuilding containerships with Jiangsu New Yangzi Shipbuilding Co., Ltd. and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd. The contracts were signed pursuant to Seaspan's right of first refusal agreement with GCI, an investment vehicle established by an affiliate of global alternative asset manager, The Carlyle Group, in which Seaspan holds an 11% ownership interest. The vessels will be constructed using Seaspan's fuel efficient New Panamax SAVER design, which was nominated for Nor-Shipping's Next Generation Ship Award, and will be chartered under ten-year, fixed-rate time charters with Hanjin. Hanjin is the largest Korean-based liner company and a new addition to Seaspan's high-quality customer portfolio. After the initial ten-year charter periods, Hanjin will have options to recharter each ship for an additional two years. The three vessels acquired by Seaspan are scheduled for delivery in 2014. Seaspan has options to purchase an additional 18 similar newbuilding vessels, which will also be subject to Seaspan's right of first refusal agreement with GCI. The conflicts committee of Seaspan's board of directors approved the allocation of the vessels between Seaspan and GCI and Seaspan's acquisition of the three vessels.

Seaspan intends to fund the construction of the three new 10000 TEU containerships with existing growth capital, including proceeds from its recent Series C preferred share offerings, and cash from operations.

Subsequent Events

On August 1, 2011, Seaspan accepted delivery of the Budapest Bridge, bringing its operating fleet to 63 vessels.

Results for the Three and Six Months ended June 30, 2011

The following tables summarize vessel utilization and the impact of off-hire time on Seaspan's revenues for the three and six months ended June 30, 2011:

                            First Quarter   Second Quarter    Year to Date  
                           -------------------------------------------------
                             2011     2010    2011    2010    2011     2010 
                           ------- -------- ------- ------- ------- --------
Vessel Utilization:                                                         
Ownership Days              5,087    3,908   5,421   4,390  10,508    8,298 
Less Off-hire Days:                                                         
  Scheduled 5-Year Survey     (53)     (20)    (58)    (42)   (111)     (62)
  Unscheduled Off-hire         (2)     (91)     (3)     (4)     (5)     (95)
                           ------- -------- ------- ------- ------- --------
Operating Days              5,032    3,797   5,360   4,344  10,392    8,141 
                           ------- -------- ------- ------- ------- --------
                           ------- -------- ------- ------- ------- --------
Vessel Utilization           98.9%    97.2%   98.9%   99.0%   98.9%    98.1%
                           ------- -------- ------- ------- ------- --------
                           ------- -------- ------- ------- ------- --------

                     First Quarter      Second Quarter      Year to Date    
                   ---------------------------------------------------------
                       2011     2010      2011     2010      2011      2010 
                   --------- -------- --------- -------- --------- ---------
Revenue - Impact                                                            
 of Off-Hire (in                                                            
 thousands):                                                                
100% Utilization   $121,983  $82,378  $134,902  $98,360  $256,885  $180,738 
Less Off-hire:                                                              
  Scheduled 5-Year                                                          
   Survey              (955)    (347)   (1,173)    (738)   (2,128)   (1,085)
  Unscheduled Off-                                                          
   hire(4)              (33)  (1,662)      (57)     (77)      (90)   (1,739)
                   --------- -------- --------- -------- --------- ---------
Actual Revenue                                                              
 Earned            $120,995  $80,369  $133,672  $97,545  $254,667  $177,914 
                   --------- -------- --------- -------- --------- ---------
                   --------- -------- --------- -------- --------- ---------


------------------                                                          
(4) Includes charterer deductions that are not related to off-hire.         

Seaspan accepted delivery of 13 vessels during the year ended December 31, 2010. Seaspan began 2011 with 55 vessels in operation and accepted delivery of seven vessels as at June 30, 2011, bringing its fleet to a total of 62 vessels in operation as at that date. Operating days are the primary driver of revenue, while ownership days are the primary driver for ship operating costs.

                   Three Months                    Six Months               
                  Ended June 30,    Increase    Ended June 30,    Increase  
                ------------------------------------------------------------
                    2011   2010   Days      %     2011    2010   Days     % 
                ------------------------------------------------------------
Operating days     5,360  4,344  1,016   23.4%  10,392   8,141  2,251  27.7%
Ownership days     5,421  4,390  1,031   23.5%  10,508   8,298  2,210  26.6%


Financial Summary  Three Months                    Six Months              
 (in millions)    Ended June 30,    Change      Ended June 30,    Change    
                ------------------------------------------------------------
                   2011   2010      $      %    2011    2010       $     % 
                ------------------------------------------------------------

Revenue         $ 133.7 $ 97.5 $ 36.1   37.0% $254.7 $ 177.9 $ 76.8   43.1% 
Ship operating                                                             
 expense           32.8   26.6    6.2   23.4%   63.9    49.0   14.8   30.3% 
Depreciation       32.8   24.1    8.8   36.4%   62.8    44.4   18.4   41.5% 
General and                                                                 
 administrative                                                           
 expenses           5.0    2.4    2.6  107.6%    7.7     4.3    3.4   79.3% 
Interest expense   10.7    6.9    3.7   53.9%   20.8    12.0    8.8   73.7% 
Change in fair                                                              
 value of                                                                   
 financial                                                                  
 instruments loss  84.7  157.7  (72.9) (46.2%)  78.9   223.2 (144.2) (64.6%)

Revenue

The increase in operating days and the dollar impact thereof, for the three and six months ended June 30, 2011 was due to the following:

                          Three Months Ended June    Six Months Ended June  
                                 30, 2011                  30, 2011         
                         ------------------------- -------------------------
                          Operating      $ impact   Operating      $ impact 
                               Days           (in        Days           (in 
                             impact      millions)      impact     millions)
                         -----------  ------------ -----------  ------------
2011 vessel deliveries          416   $      16.3         553   $      21.2 
Full period contribution                                                    
 for 2010 vessel                                                            
 deliveries                     615          20.1       1,657          54.9 
Change in daily                                                             
 charterhire rate                 -           0.1           -           0.1 
Scheduled off-hire              (16)         (0.4)        (49)         (1.0)
Unscheduled off-hire              1             -          90           1.6 
                         -----------  ------------ -----------  ------------
Total                         1,016   $      36.1       2,251   $      76.8 
                         -----------  ------------ -----------  ------------
                         -----------  ------------ -----------  ------------

Vessel utilization was 98.9%, for both the three and six months ended June 30, 2011 compared to 99.0% and 98.1% for each of the comparable periods in the prior year.

The increase in vessel utilization for the six months ended June 30, 2011 was primarily due to the 90 days of unscheduled off-hire resulting from the grounding of the CSAV Licanten (formerly the CSCL Hamburg) in the Gulf of Aqaba on December 31, 2009. During the six months ended June 30, 2010 four dry-dockings were completed, which resulted in 62 days of scheduled off-hire for the following vessels:

                  Vessel                         Commenced
                  --------------------  ------------------

                  CSCL Vancouver                        Q1
                  CSAV Licanten(5)                      Q2
                  CSCL Sydney                           Q2
                  CSCL New York                         Q2


(5) CSAV Licanten's next dry-docking was originally scheduled for 2013,     
however Seaspan combined the repairs of the CSAV Licanten with an earlier   
dry-docking which defers the next scheduled dry-docking to 2015.            

During the six months ended June 30, 2011 Seaspan completed seven dry-dockings which resulted in a total of 111 days of scheduled off-hire for the following vessels:

                  Vessel                         Commenced
                  --------------------  ------------------

                  CSCL Sao Paulo(6)                     Q1
                  Jakarta Express                       Q1
                  Saigon Express                        Q1
                  Rio Grande Express                    Q1
                  Lahore Express                        Q2
                  Santos Express                        Q2
                  Victor                                Q2


(6) CSCL Sao Paulo's next dry-docking was originally scheduled for 2013;    
however, Seaspan combined the scheduled dry-docking for this vessel with    
repairs initiated in December 2010 to achieve savings and defer the next    
scheduled dry-docking to 2016.                                              

Seaspan's cumulative vessel utilization since its initial public offering in August 2005 is 99.1%.

Ship Operating Expense

The increase in ownership days, and the dollar impact thereof, for the three and six months ended June 30, 2011 was due to the following:

                                  Three Months Ended   Six Months Ended June
                                    June 30, 2011             30, 2011      
                                ---------------------- ---------------------
                                 Ownership   $ impact   Ownership  $ impact
                                      Days        (in        Days       (in
                                    impact   millions)     impact  millions)
                                ---------- ----------- ---------- ----------

2011 vessel deliveries                 416   $    2.9         553   $    3.8
Full period contribution for                                                
 2010 vessel deliveries                615        3.7       1,657       10.2
Changes in extraordinary(7)                                                 
 costs & expenses not covered by                                            
 the fixed fee                           -       (0.4)          -        0.8
                                ---------- ----------- ---------- ----------
Total                                1,031   $    6.2       2,210   $   14.8
                                ---------- ----------- ---------- ----------
                                ---------- ----------- ---------- ----------

(7) Extraordinary costs and expenses are defined in Seaspan's management    
agreements and do not relate to extraordinary items as defined by financial 
reporting standards. The portion of extraordinary costs compared to the     
fixed technical management fee were 3.6% and 4.6% of total expenses for the 
three and six months ended June 30, 2011, as compared to 6.2% and 4.4% for  
the comparable periods in the prior year. The decrease for the three months
ended June 30, 2011 is mainly attributable to the bunkers consumed during   
off-hire for the CSAV Licanten in 2010.                                     

Depreciation

The increases in depreciation expense for the three and six months ended June 30, 2011 were due to the additional ownership days from the seven deliveries in 2011 and a full period of ownership for the 13 deliveries in 2010.

General and Administrative Expenses

The increases in general and administrative expenses for the three and six months ended June 30, 2011 were primarily due to the new employment agreement with Seaspan's chief executive officer, additional fees paid to Seaspan's board of directors for an increased number of meetings and increased legal costs and professional fees to support growth transactions.

Interest Expense

Interest expense is comprised of interest at the variable rate plus the applicable margin incurred on debt for operating vessels and a reclassification of amounts from accumulated other comprehensive income related to previously designated hedging relationships. The increases in interest expense for the three and six months ended June 30, 2011, were primarily due to higher average operating debt balances compared to the comparable periods in the prior year. The average LIBOR for the three and six months ended June 30, 2011 was 0.4%, compared to 0.3% for both of the comparable periods of the prior year. Although Seaspan has entered into fixed interest rate swaps, the difference between the variable interest rate and the swapped fixed rate on operating debt is recorded in Seaspan's change in fair value of financial instruments caption as required by financial reporting standards. The interest incurred on long-term debt for Seaspan's vessels under construction is capitalized to the respective vessels under construction.

Change in Fair Value of Financial Instruments

The change in fair value of financial instruments resulted in a loss of $84.7 million for the three months ended June 30, 2011, compared to a loss of $157.7 million for the comparable quarter last year. The change in fair value of financial instruments resulted in a loss of $78.9 million for the six months ended June 30, 2011, compared to a loss of $223.2 million for the comparable period last year. The decreases in change in fair value for the three and six months ended June 30, 2011 were primarily due to decreases in the forward LIBOR curve. The fair value of interest rate swap and swaption agreements is subject to change based on Seaspan's company-specific credit risk included in the discount factor and the interest rate implied by the current swap curve, including its relative steepness. In determining the fair value, these factors are based on the current information available to Seaspan. These factors are expected to change through the life of the instruments, causing the fair value to fluctuate significantly due to the large notional amounts and long-term nature of Seaspan's derivative instruments. As these factors may change, the fair value of the instruments is an estimate and may deviate significantly from the actual cash settlements realized over the term of the instruments.

Dividends Declared:

Class A Common Shares

For the quarter ended June 30, 2011, Seaspan declared a quarterly dividend of $0.1875 per common share, representing a total distribution of $12.9 million. The dividend will be paid on August 22, 2011 to all shareholders of record as of August 15, 2011. Because Seaspan adopted a dividend reinvestment plan, or DRIP, the actual amount of cash dividends paid may be less than $12.9 million based on shareholder participation in the DRIP.

Since Seaspan's initial public offering in August 2005, the company has declared cumulative dividends of $7.34 per common share. Since Seaspan adopted the DRIP in May 2008, a total of 2.4 million shares have been issued through shareholder participation in the DRIP. Since the plan's adoption, participating shareholders have invested $26.5 million in the DRIP.

Series C Preferred Shares

On May 2, 2011, Seaspan paid for the first time, a quarterly dividend of $0.606944 per share on its 9.5% Series C preferred shares, representing a distribution of $6.1 million. The dividend was paid to all 9.5% Series C preferred shareholders of record as of April 29, 2011 for the period from January 28, 2011 to April 29, 2011.

On July 19, 2011, Seaspan declared a quarterly dividend of $0.600347 per share, on its 9.5% Series C preferred shares, representing a distribution of $8.4 million. The dividend was paid on August 1, 2011 to all shareholders of record as July 29, 2011 for the period from April 30, 2011 to July 29, 2011.

About Seaspan

Seaspan is a leading independent charter owner of containerships, which it charters primarily pursuant to long-term fixed-rate time charters to major container liner companies. Seaspan's contracted fleet of 72 containerships consists of 63 containerships in operation and nine containerships scheduled for delivery through 2014. Seaspan's operating fleet of 63 vessels has an average age of approximately five years and an average remaining charter period of approximately seven years. All of the nine vessels to be delivered to Seaspan are already committed to fixed-rate time charters of between 10 and 12 years in duration from delivery. Seaspan's customer base consists of nine of the world's largest liner companies, including A.P. Moller-Maersk A/S, China Shipping Container Lines (Asia) Co., Ltd., Compania Sud Americana de Vapores S.A., COSCO Container Lines Co., Ltd., Hanjin Shipping Co., Ltd., Hapag-Lloyd USA, LLC, Kawasaki Kisen Kaisha Ltd., Mitsui O.S.K. Lines, Ltd., and United Arab Shipping Company (S.A.G.).

Seaspan's common shares are listed on the New York Stock Exchange under the symbol "SSW".

Seaspan's Series C preferred shares are listed on the New York Stock Exchange under the symbol "SSW PR C".

Conference Call and Webcast

Seaspan will host a conference call and webcast presentation for investors and analysts to discuss its results for the three and six months ended June 30, 2011 on Thursday August 4, 2011 at 7:00 a.m. PT / 10:00 a.m. ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and request the Seaspan call. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call 1-855-859-2056 or 1-404-537-3406 and enter the replay passcode: 86799304. The recording will be available from August 4, 2011 at 10:00 a.m. PT / 1:00 p.m. ET through 8:59 p.m. PT / 11:59 p.m. ET on August 18, 2011. The conference call will also be broadcast live over the Internet and will include a slide presentation. To access the live webcast and slide presentation, go to www.seaspancorp.com and click on "News & Events" then "Events & Presentations" for the link. The webcast and slides will be archived on the site for one year.

                            SEASPAN CORPORATION                             
                    UNAUDITED CONSOLIDATED BALANCE SHEET                    
                            AS OF JUNE 30, 2011                             
                        (IN THOUSANDS OF US DOLLARS)                        

                                           June 30, 2011  December 31, 2010 
                                        ----------------- ------------------
Assets                                                                      
Current assets:                                                             
 Cash and cash equivalents                 $     152,828      $      34,219 
 Accounts receivable                               1,472              1,017 
 Prepaid expenses                                 13,939             11,528 
                                        ----------------- ------------------
                                                 168,239             46,764 

Vessels                                        4,021,978          3,191,734 
Vessels under construction                       526,109          1,019,138 
Deferred charges                                  39,792             37,607 
Other assets                                      81,392             81,985 
                                        ----------------- ------------------
                                           $   4,837,510      $   4,377,228 
                                        ----------------- ------------------
                                        ----------------- ------------------

Liabilities and Shareholders' Equity                                        
Current liabilities:                                                        
 Accounts payable and accrued                                               
  liabilities                              $      35,413      $      28,394 
 Deferred revenue                                  7,311             10,696 
 Current portion of other long-term                                         
  liabilities                                     33,425             19,096 
                                        ----------------- ------------------
                                                  76,149             58,186 

Long-term debt                                 2,399,068          2,396,771 
Other long-term liabilities                      601,230            524,716 
Fair value of financial instruments              426,065            407,819 
                                        ----------------- ------------------
                                               3,502,512          3,387,492 

Share capital                                        835                691 
Additional paid-in capital                     1,879,124          1,526,822 
Deficit                                         (483,179)          (469,616)
Accumulated other comprehensive loss             (61,782)           (68,161)
                                        ----------------- ------------------
Total shareholders' equity                     1,334,998            989,736 
                                        ----------------- ------------------

                                           $   4,837,510      $   4,377,228 
                                        ----------------- ------------------
                                        ----------------- ------------------


                             SEASPAN CORPORATION                            
  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE THREE 
                 AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010                
           (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)           

                               Three        Three          Six          Six 
                              months       months       months       months 
                               ended        ended        ended        ended 
                             June 30,     June 30,     June 30,     June 30,
                                2011         2010         2011         2010 
                         ------------ ------------ ------------ ------------

Revenue                    $ 133,672    $  97,545    $ 254,667    $ 177,914 

Operating expenses:                                                         
 Ship operating               32,809       26,583       63,875       49,040 
 Depreciation                 32,818       24,055       62,776       44,373 
 General and                                                                
  administrative               5,032        2,424        7,726        4,308 
                         ------------ ------------ ------------ ------------
                              70,659       53,062      134,377       97,721 
                         ------------ ------------ ------------ ------------

Operating earnings            63,013       44,483      120,290       80,193 

Other expenses                                                              
 (earnings):                                                                
 Interest expense             10,656        6,926       20,803       11,979 
 Interest income                (172)          (6)        (327)         (36)
 Undrawn credit facility                                                    
  fees                         1,221          906        2,482        2,061 
 Amortization of                                                            
  deferred charges             1,423          831        2,697        1,488 
 Change in fair value of                                                    
  financial instruments       84,747      157,668       78,945      223,159 
                         ------------ ------------ ------------ ------------
                              97,875      166,325      104,600      238,651 
                         ------------ ------------ ------------ ------------

Net earnings (loss)        $ (34,862)   $(121,842)   $  15,690    $(158,458)

Deficit, beginning of                                                       
 period                     (428,560)    (393,201)    (469,616)    (349,802)
Dividends on common                                                         
 shares                      (12,902)      (6,800)     (21,483)     (13,583)
Dividends on series B                                                       
 preferred shares               (605)        (218)      (1,196)        (218)
Dividends on series C                                                       
 preferred shares             (6,069)           -       (6,069)           - 
Amortization of Series C                                                    
 issuance costs                 (181)           -         (505)           - 
                         ------------ ------------ ------------ ------------
Deficit, end of period     $(483,179)   $(522,061)   $(483,179)   $(522,061)
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------

Weighted average number                                                     
 of shares, basic             69,019       68,090       68,937       68,012 
Weighted average number                                                     
 of shares, diluted           85,977       68,090       85,631       68,012 

Loss per share, basic      $   (0.72)   $   (1.89)   $   (0.17)   $   (2.52)
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------
Loss per share, diluted    $   (0.72)   $   (1.89)   $   (0.17)   $   (2.52)
                         ------------ ------------ ------------ ------------
                         ------------ ------------ ------------ ------------



                            SEASPAN CORPORATION                             
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE AND 
                   SIX MONTHS ENDED JUNE 30, 2011 AND 2010                  
                        (IN THOUSANDS OF US DOLLARS)                        

                                      Three      Three        Six       Six 
                                     months     months     months    months 
                                      ended      ended      ended     ended 
                                    June 30,   June 30,   June 30,  June 30,
                                       2011       2010       2011      2010 
                                  ---------- ---------- --------- ----------

Net earnings (loss)               $ (34,862) $(121,842) $  15,690 $(158,458)

Other comprehensive income:                                                 
 Amounts reclassified to earnings                                           
  (loss) during the period            3,003      3,361      6,379     6,042 
                                  ---------- ---------- --------- ----------

Comprehensive income (loss)       $ (31,859) $(118,481) $  22,069 $(152,416)
                                  ---------- ---------- --------- ----------
                                  ---------- ---------- --------- ----------


                            SEASPAN CORPORATION                             
              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS               
         FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010          
                        (IN THOUSANDS OF US DOLLARS)                        

                                  Three       Three         Six         Six 
                                 months      months      months      months 
                                  ended       ended       ended       ended 
                                June 30,    June 30,    June 30,    June 30,
                                   2011        2010        2011        2010 
                             ----------- ----------- ----------- -----------

Cash provided by (used in):                                                 

Operating activities:                                                       
 Net earnings (loss)         $  (34,862) $ (121,842) $   15,690  $ (158,458)
 Items not involving cash:                                                  
  Depreciation                   32,818      24,055      62,776      44,373 
  Share-based compensation          865         727       1,252       1,274 
  Amortization of deferred                                                  
   charges                        1,423         831       2,697       1,488 
  Amounts reclassified from                                                 
   other comprehensive loss       2,900       3,294       6,185       5,924 
  Unrealized change in fair                                                 
   value of financial                                                       
   instruments                   53,798     129,144      18,246     167,559 
Change in assets and                                                        
 liabilities                      3,281       3,954     (10,234)     (4,494)
                             ----------- ----------- ----------- -----------
Cash provided by operating                                                  
 activities                      60,223      40,163      96,612      57,666 
                             ----------- ----------- ----------- -----------

Financing activities:                                                       
  Preferred shares issued,                                                  
   net of share issue costs     104,280      25,895     344,656      25,895 
  Draws on credit facilities        387     183,124       2,297     362,480 
  Other long-term                                                           
   liabilities                        -           -           -      21,250 
  Repayment on other long-                                                  
   term liabilities              (3,487)          -      (5,700)          - 
  Financing fees                   (385)       (214)     (1,067)     (3,077)
  Dividends on common                                                       
   shares(8)                     (9,375)     (5,159)    (15,626)    (10,306)
  Dividends on series B                                                     
   preferred shares                (325)       (121)       (645)       (121)
  Dividends on series C                                                     
   preferred shares              (6,069)          -      (6,069)          - 
                             ----------- ----------- ----------- -----------
Cash provided by (used in)                                                  
 financing activities            85,026     203,525     317,846     396,121 
                             ----------- ----------- ----------- -----------

Investing activities:                                                       
  Expenditures for vessels     (208,704)   (316,316)   (299,265)   (574,625)
  Restricted cash                 5,000           -       5,000      (5,000)
  Intangible assets                (995)       (754)     (1,584)     (1,174)
                             ----------- ----------- ----------- -----------
Cash used in investing                                                      
 activities                    (204,699)   (317,070)   (295,849)   (580,799)
                             ----------- ----------- ----------- -----------

Increase (decrease) in cash                                                 
 and cash equivalents           (59,450)    (73,382)    118,609    (127,012)

Cash and cash equivalents,                                                  
 beginning of period            212,278      79,770      34,219     133,400 
                             ----------- ----------- ----------- -----------
Cash and cash equivalents,                                                  
 end of period               $  152,828  $    6,388  $  152,828  $    6,388 
                             ----------- ----------- ----------- -----------
                             ----------- ----------- ----------- -----------

(8) During the three and six months ended June 30, 2011, non-cash dividends 
of $3.5 million and $5.9 were paid through the dividend reinvestment plan,  
respectively. Shareholders have invested a total of $26.5 million in the    
dividend reinvestment plan since its adoption in May 2008.                  


                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010         
                         (IN THOUSANDS OF US DOLLARS)                       

Description of Non-GAAP Financial Measures

A. Cash Available for Distribution to Common Shareholders

Cash available for distribution to common shareholders is defined as net earnings adjusted for depreciation, amortization of deferred charges, non-cash share-based compensation, amounts paid for dry-docking, change in fair value of financial instruments, interest expense(9), interest expense at the hedged rate(11), cash dividends paid on preferred shares and certain other items that the Company believes affect the comparability of its operating results. Cash available for distribution to common shareholders is a non-GAAP measure used to assist in evaluating Seaspan's ability to make quarterly cash dividends before reserves. Cash available for distribution to common shareholders is not defined by United States generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.

                                  Three       Three         Six         Six 
                                 months      months      months      months 
                                  ended       ended       ended       ended 
                                June 30,    June 30,    June 30,    June 30,
                                   2011        2010        2011        2010 
                             ----------- ----------- ----------- -----------

Net earnings (loss)          $  (34,862) $ (121,842) $   15,690  $ (158,458)
Add:                                                                        
 Depreciation                    32,818      24,055      62,776      44,373 
 Interest expense(9)             10,656       6,926      20,803      11,979 
 Amortization of deferred                                                   
  charges                         1,423         831       2,697       1,488 
 Share-based compensation           865         727       1,252       1,274 
 Change in fair value of                                                    
  financial instruments          84,747     157,668      78,945     223,159 
Less:                                                                       
 Amounts paid for dry-dock                                                  
  adjustment                     (2,970)     (1,612)     (4,428)     (2,830)
 Series B preferred share                                                   
  dividends paid(10)               (325)       (121)       (645)       (121)
 Series C preferred share                                                   
  dividends paid and                                                        
  accumulated(10)                (6,953)          -     (11,043)          - 
                             ----------- ----------- ----------- -----------
Net cash flows before cash                                                  
 interest payments               85,399      66,632     166,047     120,864 
Less:                                                                       
Interest expense at the                                                     
 hedged rate(11)                (31,866)    (20,468)    (61,617)    (34,768)
                             ----------- ----------- ----------- -----------
Cash available for                                                          
 distribution to common                                                     
 shareholders                $   53,533  $   46,164  $  104,430  $   86,096 
                             ----------- ----------- ----------- -----------
                             ----------- ----------- ----------- -----------

Seaspan has changed the definition of cash available for distribution to common shareholders for comparative figures to reflect adjustments to the definition in the prior year. The following items are now excluded as adjustments: non-cash undrawn credit facility fees and non-cash interest income. In addition, cash interest paid at the hedged rate is replaced with interest expense at the hedged rate(11). This change resulted in decreases of approximately 5% and 3% in cash available for distribution to common shareholders for the three and six months ended June 30, 2010.

(9) Interest expense as reported on the consolidated statement of           
operations.                                                                 

(10) Dividends related to the Series B and Series C preferred shares have   
been deducted as they reduce cash available for distribution to common      
shareholders.                                                               

(11) Interest expense at the hedged rate is calculated as the interest      
incurred on operating debt at the fixed rate on the related interest rate   
swaps plus the applicable margin on the related credit facilities, on an    
accrual basis.                                                              


                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
         FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010          
            (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)          

Description of Non-GAAP Financial Measures

B. Normalized Net Earnings and Normalized Earnings per Share

Normalized net earnings is defined as net earnings adjusted for items such as the change in fair value of financial instruments, interest expense(9), interest expense at the hedged rate(11) and certain other items Seaspan believes affect the comparability of operating results. With these adjustments, normalized net earnings reflects interest expense on Seaspan's operating debt at the fixed rate on its interest rate swaps plus the applicable margin on the related credit facilities. Normalized net earnings is useful because it excludes the change in fair value of financial instruments that affect the comparability of Seaspan's operating results and includes interest at the hedged rate, which includes the effect of the interest rate swaps on Seaspan's operating debt.

Normalized net earnings is not defined by GAAP and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.

Normalized earnings per share, converted, is calculated as normalized net earnings, less dividends on Series B preferred shares, less dividends on Series C preferred shares, divided by the "converted" number of shares outstanding for the period. The Series A preferred shares automatically convert to Class A common shares at a price of $15.00 per share at any time on or after January 31, 2014 if the trailing 30-day average trading price of the common shares is equal to or above $15.00. If the share price is less than $15.00, Seaspan can choose to not convert the preferred shares and to increase the annual increase in the liquidation preference to 15% per annum from 12%. The "converted" number of shares includes: basic weighted average number of shares, share-based compensation, and the impact of the Series A preferred shares converted at $15.00 per share. This method is reflective of Seaspan's ability to control the conversion if the share price is less than $15.00 and the per share impact of the preferred shares conversion at $15.00.

Normalized earnings per share, basic can be computed as normalized net earnings attributable to common shareholders divided by the weighted average number of shares used to compute reported earnings per share, basic.

Normalized earnings per share, converted, diluted, and basic are not defined by GAAP and should not be considered as an alternative to earnings per share or any other indicator of Seaspan's performance required to be reported by GAAP.

                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010         
           (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)           

Description of Non-GAAP Financial Measures                                  

B. Normalized Net Earnings and Normalized Earnings per Share (continued)    

                                     Three      Three        Six        Six 
                                    months     months     months     months 
                                     ended      ended      ended      ended 
                                   June 30,   June 30,   June 30,   June 30,
                                      2011       2010       2011       2010 
                                 ---------- ---------- ---------- ----------

Net earnings (loss)              $ (34,862) $(121,842) $  15,690  $(158,458)
Adjust:                                                                     
  Change in fair value of                                                   
   financial instruments            84,747    157,668     78,945    223,159 
  Interest expense(9)               10,656      6,926     20,803     11,979 
  Interest expense at the hedged                                            
   rate(11)                        (31,866)   (20,468)   (61,617)   (34,768)
                                 ---------- ---------- ---------- ----------
Normalized net earnings          $  28,675  $  22,284  $  53,821  $  41,912 
                                 ---------- ---------- ---------- ----------

Less: preferred share dividends                                             

  Series A                           7,435      6,606     14,577     12,952 
  Series B                             605        218      1,196        218 
  Series C (including                                                       
   amortization of issuance                                                 
   costs)                            7,134          -     11,548          - 
                                 ---------- ---------- ---------- ----------
                                    15,174      6,824     27,321     13,170 
                                 ---------- ---------- ---------- ----------
Normalized net earnings                                                     
 attributable to common                                                     
 shareholders                    $  13,501  $  15,460   $ 26,500   $ 28,742 
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------

Weighted average number of                                                  
 shares used to compute earnings                                            
 (loss) per share:                                                          

Reported and normalized, basic      69,019     68,090     68,937     68,012 

  Share-based compensation             142         91        121         65 

  Series A preferred shares                                                 
   liquidation preference                                                   
   converted at $15                 16,816     14,941     16,573     14,725 
                                 ---------- ---------- ---------- ----------

Normalized, converted               85,977     83,122     85,631     82,802 
  Series A preferred shares 115%                                            
   premium (30-day trailing                                                 
   average)                              -      6,796          -      7,329 
                                 ---------- ---------- ---------- ----------
Reported, diluted(12)               85,977     89,918     85,631     90,131 
                                 ---------- ---------- ---------- ----------

Earnings (loss) per share:                                                  

    Reported, basic              $   (0.72) $   (1.89) $   (0.17) $   (2.52)
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
    Reported, diluted            $   (0.72) $   (1.89) $   (0.17) $   (2.52)
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
    Normalized, converted-             
     preferred shares converted                                             
     at $15(13)                  $    0.24  $    0.27  $    0.48  $    0.50 
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------

(12) If the effect of Series A preferred shares is anti-dilutive, their     
effect is excluded from the computation of reported diluted earnings (loss) 
per share.                                                                  

(13) Normalized earnings per share, converted, decreased for the three and  
six months ended June 30, 2011 as compared to the comparable periods in the 
prior year. Excluding share count changes, an increase of $0.07 per share   
due to a rise in normalized net earnings was offset by a decrease of $0.09  
per share due to the impact of the Series B and C preferred shares for the  
three months ended June 30, 2011. In addition, due to an increase in        
converted share count (from 83,122 to 85,977), there is a decrease of $0.01 
per share for the three months ended June 30, 2011. Excluding share count   
changes, an increase of $0.14 per share due to a rise in normalized net     
earnings was offset by a decrease of $0.14 per share due to the impact of   
the Series B and C preferred shares for the six months ended June 30, 2011. 
In addition, due to a rise in converted share count (82,802 to 85,631),     
there is a decrease of $0.02 per share for the six months ended June 30,    
2011.                                                                       

                             SEASPAN CORPORATION                            
                RECONCILIATION OF NON-GAAP FINANCIAL MEASURES               
                FOR THE QUARTER ENDED JUNE 30, 2011 AND 2010               
            (IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)          
                 Description of Non-GAAP Financial Measures                 

C. Adjusted EBITDA

Adjusted EBITDA is defined as net earnings (loss) before interest expense(9) and other debt-related expenses, interest income, income tax expense, depreciation and amortization expense, change in fair value of financial instruments, and certain non-cash charges and selected items that are generally unusual or non-recurring.

Adjusted EBITDA provides useful information to investors in assessing Seaspan's results of operations. Seaspan believes that this measure is useful in assessing performance and highlighting trends on an overall basis. Seaspan also believes that this measure can be useful in comparing its results with those of other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net earnings. Adjusted EBITDA is not defined by GAAP and should not be considered as an alternative to net earnings (loss) or any other indicator of Seaspan's performance required to be reported by GAAP.

                                     Three      Three        Six        Six 
                                    months     months     months     months 
                                     ended      ended      ended      ended 
                                   June 30,   June 30,   June 30,   June 30,
                                      2011       2010       2011       2010 
                                 ---------- ---------- ---------- ----------

Net earnings (loss)              $ (34,862) $(121,842) $  15,690  $(158,458)
Add:                                                                        
 Interest expense(9)                10,656      6,926     20,803     11,979 
 Interest income                      (172)        (6)      (327)       (36)
 Undrawn credit facility fees        1,221        906      2,482      2,061 
 Depreciation                       32,818     24,055     62,776     44,373 
 Amortization of deferred                                                   
  charges                            1,423        831      2,697      1,488 
 Change in fair value of                                                    
  financial instruments             84,747    157,668     78,945    223,159 
                                 ---------- ---------- ---------- ----------
Adjusted EBITDA                  $  95,831  $  68,538  $ 183,066  $ 124,566 
                                 ---------- ---------- ---------- ----------

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect management's current views with respect to certain future events and performance, including, in particular, statements regarding: future operating results; expansion of Seaspan's business; Seaspan's arrangement with GCI and its effects on its growth and business; vessel deliveries; and Seaspan's future capital requirements. Although these statements are based upon assumptions Seaspan believes to be reasonable, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to: the availability to Seaspan and GCI of containership acquisition opportunities; the availability and cost to Seaspan and GCI of financing to pursue growth opportunities; chartering rates; conditions in the containership market; increased operating expenses; the number of off-hire days; dry-docking requirements; Seaspan's ability to borrow funds under its credit facilities and to obtain additional financing in the future; Seaspan's future cash flows and its ability to make dividend and other payments; the time that it may take to construct new ships; Seaspan's continued ability to enter into primarily long-term, fixed-rate time charters with customers; changes in governmental rules and regulations or actions taken by regulatory authorities; the financial condition of shipyards, charterers, lenders, refund guarantors and other counterparties and their ability to perform their obligations under their agreements with Seaspan; the potential for early termination of long-term contracts and Seaspan's potential inability to renew or replace long-term contracts; conditions in the public equity markets; and other factors detailed from time to time in Seaspan's periodic reports and filings with the Securities and Exchange Commission, including Seaspan's Report on Form 20-F for the year ended December 31, 2010. Seaspan expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in Seaspan's views or expectations, or otherwise.

For further information: For Investor Relations Inquiries: Seaspan Corporation, Mr. Sai W. Chu, Chief Financial Officer, 604-638-2575 / For Media Inquiries: The IGB Group, Mr. Leon Berman, 212-477-8438
To Top