This is the Tagline, edited under "Misc Content"

Seaspan Reports Third Quarter 2019 Results

Achieves highest quarterly utilization rate since 2011 of 99.6%,
Closes $500 million accordion, increasing Portfolio Financing Program to $1.5 billion and finishes the quarter with over $912 million of liquidity

HONG KONG, Nov. 7, 2019 /CNW/ - Seaspan Corporation ("Seaspan") (NYSE: SSW) announced today its financial results for the three and nine months ended September 30, 2019.

Highlights for the Third Quarter and First Nine Months of 2019:

  • Increased portfolio financing program by $500.0 million to $1.5 billion
  • Agreed to acquire 9600 TEU vessel which Seaspan expects will enter into a three year time charter with Ocean Network Express ("ONE")
  • Achieved vessel utilization of 99.6% for the third quarter, the highest quarterly utilization since 2011, and 98.8% for the first nine months
  • Operating earnings of $116.1 million for the third quarter and $570.6 million for the first nine months
  • Earnings per diluted share of $0.11 for the third quarter and $1.44 for the first nine months; changes in fair value of financial instruments contributed a loss of $0.10 per diluted share for the third quarter and a loss of $0.17 per diluted share for the first nine months
  • Cash flow from operations of $145.9 million for the third quarter and $645.2 million for the first nine months

 

Comments from Management

Bing Chen, President and Chief Executive Officer, commented, "Our focus on Operational Excellence in quality, reliability, and scalability, together with Customer Partnership, as the preferred solution provider of our customers, has resulted in our highest quarterly utilization rate since 2011, of 99.6% for our 112 vessels fleet. We continue to strengthen our customer centric approach, which this quarter generated an attractive vessel acquisition to facilitate the growth needs of one of our customers, in addition to a tailored charter solution for another. We see growing opportunities to broaden and deepen our customer partnerships as our sector stabilizes into a new normal marked by consolidation, and we expect our momentum to continue throughout the remainder of the year."

Ryan Courson, Chief Financial Officer, said, "During the quarter we continued to execute across our business delivering, ahead of plan, a total of $645 million year-to-date cash flows from operations. We remain focused on the balance sheet as well, advancing our capital plan with the increase of our portfolio financing program to $1.5 billion of total commitments. The increased capacity provides room and flexibility to finance new acquisitions, including our recently acquired 9600 TEU vessel, which is expected to be delivered in April. The execution on our capital plan has significantly improved capital availability and flexibility, positioning us to execute on our next phase of growth."

Significant Developments During the Quarter Ended September 30, 2019

Portfolio Financing Program Increased to $1.5 billion

On May 15, 2019, Seaspan entered into a credit agreement with a syndicate of lenders for a $1.0 billion secured credit facility as part of a portfolio financing program (the "Program"). The Program is secured by a portfolio of vessels (the "Collateral Pool") and bears interest at LIBOR plus 2.25% per annum. Seaspan may add, substitute and remove vessels from the Collateral Pool during the term, subject to a borrowing base, portfolio concentration limits, absence of defaults and compliance with financial covenants and certain negative covenants.

On September 18, 2019, Seaspan increased the committed amount under the Program by $500.0 million to a total of $1.5 billion. The additional commitments are subject to the same terms, conditions and Collateral Pool security requirements as the initial tranche.

Series D Preferred Shares

In September 2019, Seaspan redeemed 1,923,585 shares of 7.95% Series D preferred shares for $47.8 million.

Purchase of 9600 TEU Vessel

On September 9, 2019, Seaspan closed an agreement to purchase a 2010-built 9600 TEU containership. The vessel is expected to be delivered by the end of April 2020, at which point Seaspan expects the vessel will enter into a 36 month fixed rate time charter with ONE. Subsequent to delivery of the vessel, Seaspan's fleet will expand to 113 vessels.

Unencumbered Vessels

As of November 7, 2019, Seaspan had 31 unencumbered vessels.

Subsequent Events

Debt Prepayment

In October 2019, Seaspan refinanced secured term loan facilities, totalling $180.1 million, using proceeds from the Program. As of September 30, 2019, this balance was classified as current liabilities due to the issuance of voluntary irrevocable prepayment notices by Seaspan.

Distribution

The Board of Directors declared a quarterly distribution in the amount of $0.125 per share for its Class A Common Shares, paid on October 30, 2019 to shareholders of record as at the close of business on October 21, 2019. Regular quarterly dividends on the Preferred Shares Series D, Series E, Series G, Series H and Series I were also declared.

Class A Common Shares Outstanding

As of November 7, 2019, there were 215.7 million Class A Common Shares outstanding.

Results for the Three and Nine Months Ended September 30, 2019 and 2018

Financial Results

The following table summarizes Seaspan's consolidated financial results for the three and nine months ended September 30, 2019 and 2018:

Financial Summary

(in millions of US dollars, except earnings per share
amount)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

                       

Revenue

$

282.7

 

$

295.0

 

$

843.5

 

$

801.4

Ship operating expense

 

56.8

   

55.4

   

170.4

   

163.7

Depreciation and amortization expense

 

63.9

   

65.1

   

189.8

   

181.1

General and administrative expense

 

7.7

   

8.1

   

23.3

   

24.5

Operating lease expense

 

38.3

   

33.0

   

116.3

   

96.6

Income related to modification of time charters

 

   

   

227.0

   

Operating earnings

 

116.1

   

133.4

   

570.6

   

335.6

Interest expense and amortization of deferred

                     

financing fees

 

45.0

   

56.0

   

151.5

   

149.4

Net earnings

 

43.0

   

80.0

   

368.2

   

215.7

Net earnings to common shareholders

 

25.0

   

63.5

   

314.0

   

162.6

Earnings per share, diluted

 

0.11

   

0.36

   

1.44

   

1.07

Cash from operating activities

 

145.9

   

150.6

   

645.2

   

355.9

 

Ownership Days, Operating Days and Vessel Utilization

Ownership days are the number of days a vessel is owned and available for charter. Operating days are the number of days a vessel is available to the charterer for use.

The primary driver of ownership days are the increases or decreases in the number of vessels owned, while the drivers of operating days are ownership days and the number of days the vessels are off-hire.

Ownership days were unchanged for the three months ended September 30, 2019, and increased by 1,791 days for the nine months ended September 30, 2019, compared with the same periods in 2018. The increase for the nine months ended September 30, 2019 was primarily due to the full period contribution of the additional 16 vessels acquired through the acquisition of Greater China Intermodal Investments LLC ("GCI"), which contributed 1,152 days, with the remainder due to the 2018 vessel deliveries.Vessel utilization represents the number of operating days as a percentage of ownership days.

The following table summarizes Seaspan's vessel utilization for the nine months ended September 30, 2019 and 2018 and for each quarter for the 24 months ended September 30, 2019:

 

2017

 

2018

 

2019

 

Nine Months
Ended

September 30,

 
 

Q4

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

2018

 

2019

 

Vessel Utilization:

                                       

Ownership Days(1)

7,905

 

8,030

 

9,546

 

9,844

 

9,844

 

9,630

 

9,737

 

9,844

 

27,420

 

29,211

 

Less Off-hire Days:

                                       

Scheduled Dry Docking

 

(104)

 

 

(8)

 

(22)

 

(13)

 

(54)

 

(36)

 

(112)

 

(103)

 

Unscheduled Off-hire(2)

(319)

 

(149)

 

(137)

 

(146)

 

(240)

 

(166)

 

(71)

 

(3)

 

(432)

 

(240)

 

Operating Days(1)

7,586

 

7,777

 

9,409

 

9,690

 

9,582

 

9,451

 

9,612

 

9,805

 

26,876

 

28,868

 

Vessel Utilization

96.0

%

96.8

%

98.6

%

98.4

%

97.3

%

98.1

%

98.7

%

99.6

%

98.0

%

98.8

%

____________________________

(1)

Operating and ownership days include leased vessels and exclude vessels under bareboat charter.

(2)

Unscheduled off-hire includes days related to vessels being off-charter.

 

Vessel utilization increased for the three and nine months ended September 30, 2019, compared with the same periods in 2018. The increase for the nine months ended September 30, 2019 was primarily due to a decrease in the number of unscheduled off-hire days and scheduled off-hire days for dry-docking.

Revenue

Revenue decreased by 4.2% to $282.7 million and increased by 5.3% to $843.5 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease in revenue for the three months ended September 30, 2019 was primarily due to the changes in the daily charter hire rates of seven time charters which were modified in the first quarter of 2019, offset by higher operating days. Seaspan recognized $227.0 million of income from modification, and these seven charters were subsequently rechartered to other customers at market rates. The increase in revenue for the nine months ended September 30, 2019 was primarily due to the contribution of additional operating days from the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

The increase in operating days and the related financial impact thereof for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018, is attributable to the following:

 

Three Months Ended
September 30

 

Nine Months Ended
September 30

 

Ownership
Days
Impact

 

Operating
Days
Impact

 

$ Impact
(in millions
of US
dollars)

 

Ownership
Days
Impact

 

Operating
Days
Impact

 

$ Impact
(in
millions

of US
dollars)

Full period contribution from 2018 vessel

                         

deliveries

 

 

$

 

639

 

639

 

$

17.3

Addition of 16 vessels from acquisition of GCI

 

   

 

1,152

 

1,152

   

42.9

Changes in daily charter hire rates and recharters

 

   

 

 

   

5.8

Changes in daily charter hire rates on modified
charters(1)

 

   

(12.7)

 

 

   

(24.4)

Unscheduled Off-hire(2)

 

143

   

1.2

 

 

192

   

2.4

Scheduled off-hire

 

(28)

   

(0.8)

 

 

9

   

(0.7)

Other

 

   

 

 

   

(1.2)

Total

 

115

 

$

(12.3)

 

1,791

 

1,992

 

$

42.1

_______________________________

(1)

Seven time charters were modified in the first quarter of 2019 and Seaspan recognized $227.0 million of income from modification; these seven charters have been rechartered to other customers at market rates.

(2)

Unscheduled off-hire includes days related to vessels being off-charter.

 

Ship Operating Expense

Ship operating expense increased by 2.6% to $56.8 million and by 4.1% to $170.4 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The increase for the three months ended September 30, 2019 is primarily due to an increase in maintenance expenses. The increase for the nine months ended September 30, 2019 was primarily due to an increase in ownership days from the period contribution of the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

The following table summarizes Seaspan's operating cost per operating day for the nine months ended September 30, 2019 and 2018 and for each quarter for the 24 months ended September 30, 2019:

 

2017

 

2018

 

2019

 

Nine Months
Ended

September 30,

 

Q4

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

2018

 

2019

Operating Cost:

                                                         

Ownership Days(1)

 

7,905

   

8,030

   

9,546

   

9,844

   

9,844

   

9,630

   

9,737

   

9,844

   

27,420

   

29,211

Vessel Operating Costs

                                                         

(in millions of US dollars)

$

48.1

 

$

49.5

 

$

58.8

 

$

55.4

 

$

55.6

 

$

57.7

 

$

55.9

 

$

56.8

   

163.7

   

170.4

Operating Cost per
Ownership Day

$

6,086

 

$

6,170

 

$

6,156

 

$

5,624

 

$

5,648

 

$

5,993

 

$

5,743

 

$

5,770

 

$

5,969

 

$

5,833

________________________________

(1)

Ownership days include leased vessels and exclude vessels under bareboat charter.

 

Ship operating cost per ownership day increased by 2.6% to $5,770 and decreased by 2.3% to $5,833 for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by 1.8% to $63.9 million and increased by 4.8% to $189.8 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended was primarily due to asset write-offs in 2018. The increase for the nine months ended September 30, 2019 was primarily due to an increase in ownership days from the period contribution of the acquisition of vessels from the GCI transaction and 2018 vessel deliveries.

General and Administrative Expense

General and administrative expense decreased by 4.9% to $7.7 million and by 4.9% to $23.3 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended was primarily due to a decrease in professional fees and share-based compensation expenses. For the nine months ended September 30, 2019, this decrease was primarily due to transition payments paid to the former CFO in 2018.

Operating Lease Expense

Operating lease expense increased by 16.1% to $38.3 million and by 20.4% to $116.3 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The increase was primarily due to the amortization of deferred gains related to Seaspan's vessel sale-leaseback transactions, which are no longer recognized through operating leases. Upon adoption of Accounting Standards Update 2016-02 "Leases" on January 1, 2019, the remaining balance of these deferred gains were recognized through opening deficit as a cumulative adjustment.

Interest Expense and Amortization of Deferred Financing Fees

The following table summarizes Seaspan's borrowings:

 (in millions of US dollars)

September 30,

 

2019

 

2018

Long-term debt, excluding deferred financing fees:

         

Revolving credit facilities

$

756.0

 

$

812.3

Term loan credit facilities

 

1,648.8

   

2,243.8

Senior unsecured notes

 

80.0

   

417.9

Fairfax Notes

 

500.0

   

250.0

Debt discount and fair value adjustment

 

(155.8)

   

(88.1)

Long-term obligations under other financing arrangements, excluding

         

deferred financing fees

 

609.7

   

660.1

Total borrowings

$

3,438.7

 

$

4,296.0

 

Interest expense and amortization of deferred financing fees decreased by $11.0 million to $45.0 million and increased by $2.1 million to $151.5 million for the three and nine months ended September 30, 2019, respectively, compared with the same periods in 2018. The decrease for the three months ended September 30, 2019 was primarily due to the early prepayments of long-term debt. The increase for the nine months ended September 30, 2019 was primarily due to the issuance of the Fairfax Notes and debt assumed in connection with the acquisition of GCI.

Change in Fair Value of Financial Instruments

The change in fair value of financial instruments resulted in a loss of $22.1 million and $37.7 million for the three and nine months ended September 30, 2019, respectively. The losses for this period were primarily due to the impact of swap settlements and a decrease in the LIBOR forward curve.

Liquidity and Unencumbered Vessels

As of September 30, 2019, Seaspan had total liquidity of $912.9 million, consisting of $258.9 million of cash and cash equivalents and $654.0 million available under its revolving credit facilities and term loan credit facilities.

 

As of September 30, 2019

TEU Class

 

Vessel Count

2500

 

4

3500

 

2

4250

 

18

8500

 

2

10000

 

2

13100

 

1

14000

 

2

Total

 

31

 

About Seaspan

Seaspan is the leading independent charter owner of containerships with industry leading ship management services. Seaspan charters its vessels primarily pursuant to long-term, fixed-rate, time charters from the world's largest container shipping liners. Seaspan's operating fleet consists of 112 containerships with a total capacity of more than 900,000 TEU, an average age of approximately seven years and an average remaining lease period of approximately four years, on a TEU weighted basis.

Seaspan has the following securities listed on The New York Stock Exchange:

Symbol

 

Description

     

SSW

 

Class A Common Shares

SSW PR D

 

Series D Preferred Shares

SSW PR E

 

Series E Preferred Shares

SSW PR G

 

Series G Preferred Shares

SSW PR H

 

Series H Preferred Shares

SSW PR I

 

Series I Preferred Shares

SSWA

 

7.125% Senior Unsecured Notes due 2027

SSW25

 

5.500% Senior Notes due 2025

SSW26

 

5.500% Senior Notes due 2026

 

 

 

Conference Call and Webcast

Seaspan will host a conference call and webcast presentation for investors, analysts, and interested parties to discuss its third quarter results on November 7, 2019 at 8:30 a.m. ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and request the Seaspan call (conference ID: 8690787). The live webcast and slide presentation are available under "Events & Presentations" at www.seaspancorp.com.

A recording will be available at 1-855-859-2056 or 1-404-537-3406 (Conference passcode: 8690787).

SEASPAN CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018

(IN THOUSANDS OF US DOLLARS)

 
 

September 30, 2019

 

December 31, 2018

Assets

         

Current assets:

         

Cash and cash equivalents

$

258,901

 

$

357,327

Short-term investments

 

   

2,532

Accounts receivable

 

11,790

   

13,001

Prepaid expenses and other

 

32,129

   

36,519

Gross investment in lease

 

44,469

   

44,348

Fair value of financial instruments

 

   

113

   

347,289

   

453,840

           

Vessels

 

5,761,779

   

5,926,274

Right-of-use assets

 

985,563

   

Gross investment in lease

 

784,340

   

817,631

Goodwill

 

75,321

   

75,321

Other assets

 

185,416

   

204,931

 

$

8,139,708

 

$

7,477,997

Liabilities, puttable preferred shares and shareholders' equity

         

Current liabilities:

         

Accounts payable and accrued liabilities

 

71,735

   

70,211

Current portion of deferred revenue

 

61,538

   

55,915

Current portion of long-term debt

 

361,882

   

722,641

Current portion of operating lease liabilities

 

159,757

   

Current portion of long-term obligations under other financing

         

arrangements

 

144,328

   

48,384

Current portion of other long-term liabilities

 

7,124

   

32,243

   

806,364

   

929,394

           

Deferred revenue

 

351,889

   

376,884

Long-term debt

 

2,437,433

   

2,764,900

Operating lease liabilities

 

810,764

   

Long-term obligations under other financing arrangements

 

458,770

   

591,372

Other long-term liabilities

 

12,968

   

180,157

Fair value of financial instruments

 

56,323

   

127,172

   

4,934,511

   

4,969,879

           

Puttable preferred shares

 

   

48,139

           

Shareholders' equity:

         

Share capital

 

2,491

   

2,102

Treasury shares

 

(374)

   

(371)

Additional paid in capital

 

3,452,511

   

3,126,457

Deficit

 

(227,632)

   

(645,638)

Accumulated other comprehensive loss

 

(21,799)

   

(22,571)

   

3,205,197

   

2,459,979

 

$

8,139,708

 

$

7,477,997

 

SEASPAN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE AMOUNTS)

 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

                       

Revenue

$

282,716

 

$

294,981

 

$

843,459

 

$

801,419

                       

Operating expenses (income):

                     

Ship operating

 

56,789

   

55,360

   

170,419

   

163,676

Depreciation and amortization

 

63,917

   

65,053

   

189,841

   

181,085

General and administrative

 

7,673

   

8,148

   

23,335

   

24,494

Operating leases

 

38,268

   

33,048

   

116,304

   

96,571

Income related to modification of time charters

 

   

   

(227,000)

   

   

166,647

   

161,609

   

272,899

   

465,826

                       

Operating earnings

 

116,069

   

133,372

   

570,560

   

335,593

                       

Other expenses (income):

                     

Interest expense and amortization of deferred

                     

financing fees

 

44,999

   

56,038

   

151,464

   

149,387

Interest expense related to amortization of debt

                     

discount

 

4,439

   

2,193

   

12,910

   

5,091

Interest income

 

(1,958)

   

(1,128)

   

(8,239)

   

(2,893)

Refinancing expenses

 

2,921

   

   

6,136

   

Acquisition related gain on contract settlement

 

   

   

   

(2,430)

Change in fair value of financial instruments

 

22,068

   

(4,526)

   

37,661

   

(29,775)

Equity income on investment

 

   

   

   

(1,216)

Other expenses

 

637

   

822

   

2,386

   

1,728

   

73,106

   

53,399

   

202,318

   

119,892

                       

Net earnings

$

42,963

 

$

79,973

 

$

368,242

 

$

215,701

                       

Dividends - preferred shares

 

(17,917)

   

(16,498)

   

(54,254)

   

(53,066)

Net earnings attributable to common shares

$

25,046

 

$

63,475

 

$

313,988

 

$

162,635

                       

Weighted average number of shares, basic

 

216,142

   

170,232

   

213,938

   

147,292

Effect of dilutive securities:

                     

Share-based compensation

 

697

   

543

   

460

   

381

Fairfax warrants

 

5,696

   

3,255

   

3,841

   

3,860

Weighted average number of shares, diluted

 

222,535

   

174,030

   

218,239

   

151,533

                       

Earnings per share, basic

$

0.12

 

$

0.37

 

$

1.47

 

$

1.10

Earnings per share, diluted

$

0.11

 

$

0.36

 

$

1.44

 

$

1.07

 

SEASPAN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(IN THOUSANDS OF US DOLLARS)

 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

                       

Net earnings

$

42,963

 

$

79,973

 

$

368,242

 

$

215,701

                       

Other comprehensive income:

                     

Amounts reclassified to net earnings during the period

                     

relating to cash flow hedging instruments

 

254

   

271

   

772

   

847

                       

Comprehensive income

$

43,217

 

$

80,244

 

$

369,014

 

$

216,548

 

SEASPAN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

(IN THOUSANDS OF US DOLLARS)

 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Cash from (used in):

                     

Operating activities:

                     

Net earnings

$

42,963

 

$

79,973

 

$

368,242

 

$

215,701

Items not involving cash:

                     

Depreciation and amortization

 

63,917

   

65,053

   

189,841

   

181,085

Amortization of right-of-use assets

 

28,036

   

   

83,443

   

Share-based compensation

 

693

   

355

   

2,655

   

1,905

Amortization of deferred financing fees, debt discount

                     

and fair value of long-term debt

 

7,743

   

5,726

   

22,629

   

14,283

Amounts reclassified from other comprehensive income

                     

to interest expense

 

70

   

80

   

219

   

254

Unrealized change in fair value of financial instruments

 

(406)

   

(13,925)

   

(13,724)

   

(62,834)

Acquisition related gain on contract settlement

 

   

   

   

(2,430)

Equity income on investment

 

   

   

   

(1,216)

Deferred gain on sale-leasebacks

 

   

(5,527)

   

   

(16,636)

Amortization of acquired revenue contracts

 

3,977

   

1,902

   

9,796

   

5,461

Refinancing expenses

 

2,921

   

   

6,136

   

Other

 

(576)

   

(355)

   

(1,313)

   

(1,044)

Changes in assets and liabilities

 

(3,425)

   

17,307

   

(22,763)

   

21,414

Cash from operating activities

 

145,913

   

150,589

   

645,161

   

355,943

                       

Financing activities:

                     

Preferred shares issued, net of issuance costs

 

   

144,416

   

   

144,416

Repayment of credit facilities

 

(367,040)

   

(225,916)

   

(1,276,755)

   

(360,660)

Draws on credit facilities

 

115,900

   

   

734,893

   

325,600

Fairfax notes and warrants issued

 

   

   

250,000

   

250,000

Draws on long-term obligations under other financing

                     

arrangements

 

   

   

   

46,964

Repayments on long-term obligations under other

                     

financing arrangements

 

(12,787)

   

(12,365)

   

(38,004)

   

(35,672)

Senior unsecured notes repurchased, including related

                     

expenses

 

   

   

(8,998)

   

Redemption of preferred shares

 

(47,782)

   

(143,430)

   

(47,782)

   

(143,430)

Repayments on senior unsecured notes

 

   

   

(311,398)

   

Proceeds from exercise of warrants

 

   

250,000

   

250,000

   

250,000

Financing fees

 

(7,890)

   

(2,753)

   

(23,619)

   

(15,868)

Dividends on common shares

 

(26,656)

   

(9,549)

   

(75,115)

   

(28,358)

Dividends on preferred shares

 

(18,247)

   

(14,720)

   

(53,685)

   

(49,680)

Cash from (used in) financing activities

 

(364,502)

   

(14,317)

   

(600,463)

   

383,312

                       

Investing activities:

                     

Expenditures for vessels

 

(3,532)

   

(5,613)

   

(9,810)

   

(306,626)

Short-term investments

 

106

   

(105)

   

2,532

   

(2,401)

Prepayment on vessel purchase

 

(6,620)

   

   

(6,620)

   

Other assets

 

(1,100)

   

(201)

   

(6,806)

   

2,510

Loans to affiliate

 

   

   

   

(427)

Payments on settlement of interest swap agreements

 

(104,825)

   

(8,390)

   

(122,054)

   

(30,992)

Acquisition of GCI

 

   

   

   

(333,581)

Cash acquired from GCI acquisition

 

   

   

   

70,121

Cash used in investing activities

 

(115,971)

   

(14,309)

   

(142,758)

   

(601,396)

                       

Increase (decrease) in cash, cash equivalents and restricted cash

 

(334,560)

   

121,963

   

(98,060)

   

137,859

Cash, cash equivalents and restricted cash, beginning of period

 

607,896

   

283,132

   

371,396

   

267,236

Cash, cash equivalents and restricted cash, end of period

$

273,336

 

$

405,095

 

$

273,336

 

$

405,095

                       
                       

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the amounts shown in the consolidated statements of cash flows:

                       
 

September 30,

           
 

2019

 

2018

           

Cash and cash equivalents

$

258,901

 

$

391,030

           

Restricted cash included in other assets

 

14,435

   

14,065

           

Total cash, cash equivalents and restricted cash shown in the

                     

consolidated statements of cash flows

$

273,336

 

$

405,095

           

 

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act) concerning Seaspan's operations, cash flows, and financial position, including, without limitation, the likelihood of its success in developing and expanding its business. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "will," "may," "potential," "should" and similar expressions are forward‑looking statements. These forward-looking statements represent Seaspan's estimates and assumptions only as of the date of this release and are not intended to give any assurance as to future results. As a result, you are cautioned not to rely on any forward-looking statements. Forward-looking statements appear in a number of places in this release. Although these statements are based upon assumptions Seaspan believes to be reasonable based upon available information, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to:

  • future growth prospects and ability to expand Seaspan's business;
  • Seaspan's expectations as to impairments of its vessels, including the timing and amount of currently anticipated impairments;
  • the future valuation of Seaspan's vessels and goodwill;
  • potential acquisitions, vessel financing arrangements and other investments, and Seaspan's expected risks and benefits from such transactions as well as the likelihood of consummating any such transaction;
  • future time charters and vessel deliveries, including future long-term charters for certain existing vessels;
  • estimated future capital expenditures needed to preserve the operating capacity of Seaspan's fleet including, its capital base, and comply with regulatory standards, its expectations regarding future dry-docking and operating expenses, including ship operating expense and general and administrative expenses;
  • Seaspan's expectations about the availability of vessels to purchase, the time it may take to construct new vessels, the delivery dates of new vessels, the commencement of service of new vessels under long-term time charter contracts and the useful lives of its vessels;
  • availability of crew, number of off-hire days and dry-docking requirements;
  • general market conditions and shipping market trends, including charter rates, increased technological innovation in competing vessels and other factors affecting supply and demand;
  • Seaspan's financial condition and liquidity, including its ability to borrow and repay funds under its credit facilities, to refinance its existing facilities and to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
  • Seaspan's continued ability to meet its current liabilities as they become due;
  • Seaspan's continued ability to maintain, enter into or renew primarily long-term, fixed-rate time charters with its existing customers or new customers;
  • the potential for early termination of long-term contracts and Seaspan's potential inability to enter into, renew or replace long-term contracts;
  • the introduction of new accounting rules for leasing and exposure to currency exchange rates and interest rate fluctuations;
  • conditions inherent in the operation of ocean-going vessels, including acts of piracy;
  • acts of terrorism or government requisition of Seaspan's containerships during periods of war or emergency;
  • adequacy of Seaspan's insurance to cover losses that result from the inherent operational risks of the shipping industry;
  • lack of diversity in Seaspan's operations and in the type of vessels in its fleet;
  • conditions in the public equity market and the price of Seaspan's shares;
  • Seaspan's ability to leverage to its advantage its relationships and reputation in the containership industry;
  • changes in governmental rules and regulations or actions taken by regulatory authorities, and the effect of governmental regulations on Seaspan's business;
  • the financial condition of Seaspan's customers, lenders, and other counterparties and their ability to perform their obligations under their agreements with us;
  • Seaspan's continued ability to meet specified restrictive covenants and other conditions in its financing and lease arrangements, its notes and its preferred shares;
  • any economic downturn in the global financial markets and export trade and increase in trade protectionism and potential negative effects of any recurrence of such disruptions on Seaspan's customers' ability to charter Seaspan's vessels and pay for Seaspan's services;
  • the value of Seaspan's vessels and other factors or events that trigger impairment assessments or results;
  • taxation of Seaspan's earnings and of distributions to its shareholders;
  • Seaspan's exemption from tax on U.S. source international transportation income and exemption from tax on China-sourced international transportation service income;
  • the ability to bring claims in China and Marshall Islands, where the legal systems are not well-developed;
  • potential liability from future litigation; and
  • other factors detailed from time to time in Seaspan's periodic reports.

 

Forward-looking statements in this release are estimates and assumptions reflecting the judgment of senior management and involve known and unknown risks and uncertainties. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond Seaspan's control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Accordingly, these forward-looking statements should be considered in light of various important factors listed above and including, but not limited to, those set forth in "Item 3. Key Information—D. Risk Factors" in Seaspan's Annual Report for the year ended December 31, 2018 on Form 20-F filed on March 26, 2019 and in the "Risk Factors" in Reports on Form 6-K that are filed with the Securities and Exchange Commission from time to time relating to its quarterly financial results.

Seaspan does not intend to revise any forward-looking statements in order to reflect any change in Seaspan's expectations or events or circumstances that may subsequently arise. 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. You should carefully review and consider the various disclosures included in Seaspan's Annual Report and in Seaspan's other filings made with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect Seaspan's business, prospects and results of operations.

Investor Inquiries:
Mr. Matt Borys
Seaspan Corporation
Tel. +1-778-328-5340
Email: mborys@seaspanltd.ca

 

SOURCE Seaspan Corporation