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 /PRNewswire/ - 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. [phone]
Email: [e-mail]

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