Good day, and welcome to the Danaos Corporation Conference Call to discuss the financial results for the three months ended December 31, 2016. As a reminder, today's call is being recorded. Hosting the call today is Dr. John Coustas, Chief Executive Officer of Danaos Corporation; and Mr. Evangelos Chatzis, Chief Financial Officer of Danaos Corporation. Dr. Coustas and Mr. Chatzis will be making some introductory comments and then we will open the call to a question-and-answer session.

Thank you, operator, and good morning everyone. Before we begin, I quickly want to remind everyone that management's remarks this morning may contain certain forward-looking statements, and that actual results could differ materially from those projected today. These forward-looking statements are made as of today and we undertake no obligation to update them. Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review these detailed Safe Harbor and Risk Factor disclosures. Please also note that where we feel appropriate, we will continue to refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA, and adjusted net income to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release and the accompanying materials. With this, let me turn the call over to Dr. Coustas, who will provide the overview for the quarter.

Thank you, Evangelos. Good morning, and thank you all for joining today's call to discuss our results for the fourth quarter 2016. Danaos' results for the fourth quarter of 2016 reflect the impact of the bankruptcy of Hanjin Shipping, which previously chartered eight of our vessels on long-term charter party agreements, representing approximately 20% of our fixed contracted revenue. These charter party agreements were terminated, and each of the chartered vessels were returned to us, as we have previously announced. The $24.0 million decrease in our adjusted net income is primarily the result of a $23.3 million decrease in operating revenues resulting from the Hanjin bankruptcy. During the fourth quarter, our fleet utilization decreased to 90.4% after the Hanjin charter cancellations. We have re-chartered the five 3,400 TEU vessels on short-term charters at market rates that reflect the prevailing weak chartering environment and managed to secure employment of up to 12 months starting from April 2017 for the remaining three 10,100 TEU vessels. Excluding the effect of these cancellations, our fleet utilization increased to 99.5% compared to 98.3% in the fourth quarter of 2015. As a result of the decrease in our operating income and charter attached values, primarily caused by the Hanjin bankruptcy, as of December 31, 2016 we were in breach of certain financial covenants for which we have obtained waivers until April 1, 2017, and continue to engage in discussion with our lenders to address the matter. Because the waivers are for a period of less than 12 months after the balance sheet date, all of the debt has been classified as current in the December 31, 2016 financial statements. Otherwise the Company is currently in position to service all its operational and contractual financial obligations. During 2016, we continued de-leveraging our balance sheet and reduced indebtedness…

Thank you, and good morning again. I will briefly review the results for the quarter, and then open up the call to Q&A. During the fourth quarter of 2016, we had an average of 55 containerships compared to 56 containerships for the fourth quarter of 2015. Danaos also holds a 49% shareholding interest in Gemini Shipholdings Corp; an entity formed during the third quarter of 2015, and has acquired four container ships. Our adjusted net income was $23.2 million or $0.21 per share for the quarter, compared to $47.2 million or $0.43 per share of adjusted net income for the fourth quarter of 2015. This $24 million decrease is mainly attributed to $23.3 million of lower operating revenues as a result of the Hanjin bankruptcy, while a further decline in revenues of $7.9 million for the quarter as a result of weaker charter market conditions was partially offset by a $5.2 million decrease in net finance costs due to lower debt balances and interest rate swap expirations, a $1.1 million decrease in total operating expenses, and a $0.9 million improvement in the operating performance of our equity investment in Gemini Shipholdings Corp. We have adjusted our net income in the current quarter mainly for vessel-related impairment $437.4 million for 25 vessels in our fleet and four vessels in the Gemini fleet, and the $29.4 million impairment on Zim equity and debt instruments. The vessel impairment charges relate to a total impairment loss of $212.9 million recognized for five 3,400 TEU vessels formerly chartered to Hanjin, and was a result of the loss of the charters, and an impairment loss of $224.5 million recognized for 20 of our vessels, and four Gemini vessels, all between 2,200 and 6,500 TEU as a result of the continued weakness of the container ship market,…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from John Gandolfo with Clarksons Platou Securities. Please go ahead.

Thanks guys for taking my questions. Just want to start off, it's [ph] good to see the employment has been secured on the 10,000 TEUs, especially given that the number of vessels laid up idling in the class range. Was wondering if you can give some color on overall development in the short-term market for the class, and if you would be able to give some additional details on the structure of the employment for the three vessels that were chartered?

Well, the situation is that still the market is greatly oversupplied. We have managed to secure employment for our vessels to a significant extent because of our relationships and our performance with our charterers, but of course the rates are nowhere satisfactory. But at least it keeps the vessels employed, at least the 10,000s above OpEx levels. And I think this is a good step, in any case this employment is for up to a year. So we do not really -- we have not committed the vessels long-term. So we keep our options open for whatever future that is going to happen in the market, any kind of uptick.

Got, thanks. Really is there any way to be able to disclose a little bit more details on the rate issued, or is above OpEx where we should be looking at from OEM [ph] or around OpEx? Excuse me.

Yes, I mean, these rates it's low teens rates.

Okay, got it. Thank you for that. And now securing employment for these vessels, has it better positioned Danaos in its ongoing covenant negotiations?

Sorry, could you please repeat that?

Sorry. I said, has securing employment for the vessels redelivered from Hanjin better positioned Danaos in current covenant negotiations?

On which negotiations?

On the -- basically the breach of covenant, has it better positioned you in your discussions with the banks…

Yes, well I don't know. I think that really the banks were expecting that we would be able to charter the vessels. I don't think really that makes, to be honest, any difference, especially because it's not a groundbreaking rate.

Okay.

No, I don't really think it makes any difference. I mean, that was expected, and we had already said that we would be able to secure some type of employment.

Got it. Thank you very much for the time, that's all for me.

Thank you.

Our next question comes from Mark Suarez with McQuilling Holdings. Please go ahead.

Hi, good morning guys. Thanks for taking my question here. Just…

Hi, Mark.

And by the way, I appreciate the color, as always, on your initial comments. When you talk about indebtedness, I'm wondering what are you looking for in terms of repayment schedule now that the Hanjin situation -- you have some more clarity as to the charters and such, and I'm wondering what your repayment schedule looks like now in terms of debt for 2017 and '18. Do you have a sense of what that's going to look like?

Mark, you can use as decent guidance what we have disclosed in our annual report as our contractual amortization payments. That I think is a good guideline of amortization for the foreseeable future.

Got you. And then just maybe on the macro for a second, we have seen talks now of rate increases. Obviously the alliances are helping a bit at the margins. But again, you still have this oversupply issue that I think needs to be resolved over the next 24 months, in my opinion. Scrapping has accelerated as of late. Do you see -- do you have a sense of what sort of scrapping levels do you need to see or contracting levels, especially on the post-Panamax segment before you can maybe more confidently say there will be an inflection on the supply and demand balance over the next 24 months?

Mark, we are not optimistic for the medium-term which is how we define the next 24 months. For the imbalance to be corrected only on the back of scrapping, I don't think this can work. You need demand to meaningfully resume. And we do not see this -- we do not see any visible signs of such a spike in demand, especially with the latest developments and with the Trump approach to the trade alliances and all these things, things are not pointing to a direction where one can be optimistic about increasing demand for the transfer of boxes.

Got it, okay. And on the contracting side, and I guess you guys have very good relationships with some of the shipyards, we're beginning to see a meaningful deceleration of that contracting trend, as I alluded to before, do you see the same thing and do you expect this to remain so for the next, I would say, 2017-18 kind of range?

You mean contracting for new buildings?

Yes, for the post-Panamax, especially the post-Panamax. So, anything about…

There hasn't been no ordering for quite sometime, and we do not expect it to resume. The liners are, you know -- seem to be content with using assets from the market to satisfy their needs.

Okay, great. Well, I appreciate the details as always, guys. Thanks for your time.

Thanks, Mark.

Thank you.

[Operator Instructions] It appears that we have no further questions at this time. I would like to turn the call back over to Dr. Coustas for any further comments or closing remarks.

Thank you all for joining this conference call and for your continued interest in our story. Look forward to hosting you on our next earnings call. Thank you.

Thank you all for joining this conference call, and your continued interest in our story. We look forward to hosting you on our next earnings call. Have a nice day.