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» Seaspan Corporation's CEO Discusses Q2 2011 Results Earnings Call Transcript
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I would also like to remind you that during this call, we may discuss certain non-GAAP financial measures including adjusted EBITDA, cash available for distribution to common shareholders, normalized net earnings, normalized earnings per share and normalized converted earnings per share. In regards to such financial measures and for reconciliation of such measures to the most closely comparable U.S. GAAP measures, please refer to our earnings release.I will now pass the call over to Gerry, who will discuss our highlights for the quarter and other recent developments. Gerry Wang Thank you, Sai. Good morning to everybody. Please turn to slide three of the website presentation. Seaspan’s business continue to perform as expected in the third quarter despite broader uncertainty in the global economy. I would like to highlight five points that speak to the ongoing stability and growth in our business. First, our operating fleet remains fully employed on fixed-rate time charges without any major off-hire incidence. We achieved a utilization rate of 99.8% for the quarter and grew revenues, cash available for distribution and normalized net income by 39%, 22.5% and 30.6%, respectively for the quarter compared with results for the third quarter of 2010. Second, we continue to successfully implement our newbuilding program. We expended our fully time charter fleet by taking delivery of three newbuildings, the Budapest Bridge to K-Line, the COSCO Development and COSCO Harmony to COSCON, all secured on long-term contracts of 12 years. We now have 65 vessels in operation with four 13100 TEU vessels remaining to be delivered to COSCO through the first half of 2012 and three 10000 TEU vessels remaining to be delivered to Hanjin in 2014. Third, our Board declared another dividend on our common stock and our Series C preferred shares. In total, we have declared cumulative common stock dividends of $7.5 per share since our IPO in 2005 and a cumulative preferred stock dividend of a $1.80 per share since we first issued the shares in January of this year.
As we continue to take delivery of our newbuilding fleet, we intend on continuing to sustainably increase our dividends over time while maintaining our flexibility for future growth.Fourth, we took additional steps to enhance our capital structure and a financial flexibility during the third quarter by entering into our $150 million non-recourse loan facility relating to one of our 13100 TEU newbuilding vessels and 12-year time charted to COSCON. The vessel is under construction at Hyundai Heavy Industries and was previously financed with up to $75 million under one of our revolving credit facilities. Fifth and finally, I’m pleased to announce that we have entered into agreements with MSC bareboat charters two of our four 4800 TEU vessels for five years and that we are finalizing similar bareboat charter agreements with MSC for the remaining two 4800 TEU vessels. This transaction is aligned with our strategy of generating stable cash flow and maintaining a modern fleet with an efficient cost structure. For this bareboat charters, we’re locking in an income stream for the next five years. We’re effectively removing our operating exposure to our four oldest vessels enabling us to redeploy valuable operational resources towards our remaining modern fleet with an average age of about four years. Sai will review the financial implications of this transaction later on in this call. I would now like to turn the call to Sai to discuss our quarterly financial results. Sai please. Sai Chu Thanks Gerry. Please turn to slide four for a summary of our three and nine-month results for the periods ended September 30, 2011, compared to the same periods in 2010. We began 2011 with 55 vessels in operation and accepted delivery of 10 vessels as of September 30, 2011, bringing our fleet to a total of 65 vessels in operation at quarter end. Revenue increased substantially due to the increased number of operating days and higher time charter rates attributed to the delivery of our larger newbuild vessel. Read the rest of this transcript for free on seekingalpha.com