SSW [Seaspan] 6-K: Item 1 — Information Contained in this Form

Ticker: SSW, Company: Seaspan CORP, Type: 6-K, Date: 2019-11-18
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Webplus: SSW/20191118/6-K/1/000.htm SEC Original: ssw-6k_20190930.htm
Item 1 — Information Contained in this Form 6-K Report SEASPAN CORPORATION Ryan Courson Chief Financial Officer (Principal Financial and Accounting Officer) SEASPAN CORPORATION INDEX PART I — FINANCIAL INFORMATION 1 Item 1 — Interim Consolidated Financial Statements (Unaudited) 1 Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 3 — Quantitative and




Item 1 — Information Contained in this Form 6-K Report

Attached as Exhibit I is Seaspan Corporation’s report on Form 6-K, or this Report, for the quarter ended September 30, 2019. This Report is hereby incorporated by reference into: the Registration Statement of Seaspan Corporation filed with the Securities and Exchange Commission, (the “SEC”), on May 30, 2008 on Form F-3D (Registration No. 333-151329), the Registration Statement of Seaspan Corporation filed with the SEC on March 31, 2011 on Form S-8 (Registration No. 333-173207), the Registration Statement of Seaspan Corporation filed with the SEC on June 20, 2013 on Form S-8 (Registration No. 333-189493), the Registration Statement of Seaspan Corporation filed with the SEC on April 24, 2012 on Form F-3 (Registration No. 333-180895), as amended on March 22, 2013, the Registration Statement of Seaspan Corporation filed with the SEC on April 29, 2014 on Form F-3 (Registration No. 333-195571), as amended on March 3, 2017 and April 19, 2017, the Registration Statement of Seaspan Corporation filed with the SEC on November 28, 2014 on Form F-3 (Registration No. 333-200639), as amended on March 3, 2017 and April 19, 2017, the Registration Statement of Seaspan Corporation filed with the SEC on November 28, 2014 on Form S-8 (Registration No. 333-200640), the Registration Statement of Seaspan Corporation filed with the SEC on March 12, 2015 on Form F-3D (Registration No. 333-202698), the Registration Statement of Seaspan Corporation filed with the SEC on May 23, 2016 on Form F-3 (Registration No. 333-211545), as amended on March 3, 2017, March 7, 2017 and April 19, 2017, the Registration Statement of Seaspan Corporation filed with the SEC on June 24, 2016 on Form S-8 (Registration No. 333-212230), the Registration Statement of Seaspan Corporation filed with the SEC on August 25, 2017 on Form F-3 (Registration No. 333-220176),  the Registration Statement of Seaspan Corporation filed with the SEC on December 21, 2017 on Form S-8 (Registration No. 333-222216), the Registration Statement of Seaspan Corporation filed with the SEC on April 13, 2018 on Form F-3D (Registration No. 333-224291), the Registration Statement of Seaspan Corporation filed with the SEC on April 13, 2018 (Registration No. 333-224288), as amended on May 3, 2018 and May 7, 2018, the Registration Statement of Seaspan Corporation filed with the SEC on September 28, 2018 on Form F-3 (Registration No. 333-227597), the Registration Statement of Seaspan Corporation filed with the SEC on January 18, 2019 on Form F-3 (Registration No. 333-229312), and the Registration Statement of Seaspan Corporation filed with the SEC on March 27, 2019 on Form F-3 (Registration No. 333-230524).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

SEASPAN CORPORATION

 

 

 

 

Date:  November 18, 2019

By:

 

/s/ Ryan Courson

 

 

 

Ryan Courson

 

 

 

Chief Financial Officer

 

 

 

(Principal Financial and Accounting Officer)

 

 

 

 


EXHIBIT I

SEASPAN CORPORATION
REPORT ON FORM 6-K FOR THE QUARTER ENDED SEPTEMBER 30, 2019

INDEX

 

 

Unless we otherwise specify, when used in this Report, the terms “Seaspan”, the “Company”, “we”, “our” and “us” refer to Seaspan Corporation and its subsidiaries. References to our “Manager” are to Seaspan Management Services Limited and its wholly-owned subsidiaries which provide us with all of our technical, administrative and strategic services.

 

 

 

 

 

 


 

References to customers are as follows:

 

Customer

 

Reference

Arkas Line

 

Arkas

CMA CGM S.A.

 

CMA CGM

China COSCO Holdings Company Limited

 

COSCO

Hapag-Lloyd AG

 

Hapag-Lloyd

Hyundai Merchant Marine Co., Ltd.

 

HMM

Korea Marine Transport Co., Ltd.

 

KMTC

Maersk Line A/S(2)

 

Maersk

MSC Mediterranean Shipping Company S.A.

 

MSC

Mitsui O.S.K. Lines, Ltd.(1)

 

MOL

Ocean Network Express Pte. Ltd.(1)

 

ONE

Yang Ming Marine Transport Corp.

 

Yang Ming Marine

_____________________

 

(1)

On April 1, 2018, MOL, K-Line and Nippon Yusen Kabushiki Kaisha integrated their container shipping businesses under a new joint venture company, Ocean Network Express Pte. Ltd.

 

(2)

A subsidiary of A.P. Moller-Maersk A/S.

We use the term “twenty-foot equivalent unit”, or TEU, the international standard measure of containers, in describing the capacity of our containerships, which are also referred to as our “vessels”. We identify the classes of our vessels by the approximate average TEU capacity of the vessels in each class. However, the actual TEU capacity of a vessel may differ from the approximate average TEU capacity of the vessels in such vessel’s class.

The information and the unaudited interim consolidated financial statements in this Report should be read in conjunction with the consolidated financial statements and related notes and the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report (on Form 20-F) and Quarterly Report (on Form 6-K) for the year ended December 31, 2018 and quarters ended March 31, 2019 and June 30, 2019, respectively. The Annual Report and Quarterly Reports were filed with the U.S. Securities and Exchange Commission, on March 26, 2019, May 3, 2019 and August 14, 2019, respectively. Unless otherwise indicated, all amounts in this Report are presented in U.S. dollars, or USD. We prepare our consolidated financial statements in accordance with United States generally accepted accounting principles, or U.S. GAAP.

 

 

 

 

 


SEASPAN CORPORATION

PART I — FINANCIAL INFORMATION

ITEM 1 — INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEASPAN CORPORATION

Interim Consolidated Balance Sheets

(Unaudited)

(Expressed in thousands of United States dollars, except number of shares and par value amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

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 (note 4)

 

 

44,469

 

 

 

44,348

 

Fair value of financial instruments (note 20(c))

 

 

 

 

 

113

 

 

 

 

347,289

 

 

 

453,840

 

Vessels (note 5)

 

 

5,761,779

 

 

 

5,926,274

 

Right-of-use assets (note 6)

 

 

985,563

 

 

 

 

Gross investment in lease (note 4)

 

 

784,340

 

 

 

817,631

 

Goodwill

 

 

75,321

 

 

 

75,321

 

Other assets (note 7)

 

 

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 (note 8)

 

 

61,538

 

 

 

55,915

 

Current portion of long-term debt (note 9)

 

 

361,882

 

 

 

722,641

 

Current portion of operating lease liabilities (note 10)

 

 

159,757

 

 

 

 

Current portion of long-term obligations under other financing arrangements (note 11)

 

 

144,328

 

 

 

48,384

 

Current portion of other long-term liabilities (note 12)

 

 

7,124

 

 

 

32,243

 

 

 

 

806,364

 

 

 

929,394

 

Deferred revenue (note 8)

 

 

351,889

 

 

 

376,884

 

Long-term debt (note 9)

 

 

2,437,433

 

 

 

2,764,900

 

Operating lease liabilities (note 10)

 

 

810,764

 

 

 

 

Long-term obligations under other financing arrangements (note 11)

 

 

458,770

 

 

 

591,372

 

Other long-term liabilities (note 12)

 

 

12,968

 

 

 

180,157

 

Fair value of financial instruments (note 20(c))

 

 

56,323

 

 

 

127,172

 

Total liabilities

 

 

4,934,511

 

 

 

4,969,879

 

 

 

 

 

 

 

 

 

 

Puttable preferred shares; $0.01 par value; nil issued and outstanding

   (2018 - 1,986,449)  (notes 2 and 13(a))

 

 

 

 

 

48,139

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Share capital (note 13):

 

 

 

 

 

 

 

 

Preferred shares; $0.01 par value, 150,000,000 shares authorized

   (2018 - 150,000,000); 33,335,570 shares issued and outstanding (2018 - 33,272,706)

 

 

 

 

 

 

 

 

Class A common shares; $0.01 par value; 400,000,000 shares authorized

   (2018 - 400,000,000); 215,649,215 shares issued and outstanding (2018 – 176,835,837)

 

 

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

 

Basis of presentation (note 1(a))

Commitments and contingencies (note 18)

Subsequent events (note 22)

See accompanying notes to interim consolidated financial statements.

 

1


SEASPAN CORPORATION

Interim Consolidated Statements of Operations

(Unaudited)

(Expressed in thousands of United States 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 (note 10)

 

 

38,268

 

 

 

33,048

 

 

 

116,304

 

 

 

96,571

 

Income related to modification of time charters (note 17)

 

 

 

 

 

 

 

 

(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 (note 9)

 

 

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 (note 20(c))

 

 

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

 

Earnings per share (note 14):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A common share, basic

 

$

0.12

 

 

$

0.37

 

 

$

1.47

 

 

$

1.10

 

Class A common share, diluted

 

$

0.11

 

 

$

0.36

 

 

$

1.44

 

 

$

1.07

 

 

See accompanying notes to interim consolidated financial statements.

 

2


SEASPAN CORPORATION

Interim Consolidated Statements of Comprehensive Income

(Unaudited)

(Expressed in thousands of United States 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 (note 20(c))

 

 

254

 

 

 

271

 

 

 

772

 

 

 

847

 

Comprehensive income

 

$

43,217

 

 

$

80,244

 

 

$

369,014

 

 

$

216,548

 

 

See accompanying notes to interim consolidated financial statements.

 

 

 

3


SEASPAN CORPORATION

Interim Consolidated Statements of Puttable Preferred Shares and Shareholders’ Equity

(Unaudited)

(Expressed in thousands of United States dollars, except number of shares and per share amounts)

Three months ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Series D puttable

 

 

 

Number of

 

 

non-puttable

 

 

 

 

 

 

 

puttable

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

other

 

 

 

 

Total

 

 

preferred shares

 

 

 

common

 

 

preferred

 

Common

 

 

 

 

preferred

 

 

 

 

Treasury

 

 

 

 

paid-in

 

 

 

 

 

 

 

 

 

 

comprehensive

 

 

 

 

shareholders'

 

 

Shares

 

Amount

 

 

 

shares

 

 

shares

 

shares

 

 

 

 

shares

 

 

 

 

shares

 

 

 

 

capital

 

 

 

 

Deficit

 

 

 

 

loss

 

 

 

 

equity

 

Balance, June 30, 2019,

   carried forward

 

1,983,585

 

$

48,969

 

 

 

 

215,617,526

 

 

 

33,275,570

 

$

2,157

 

 

 

 

$

333

 

 

 

 

$

(374

)

 

 

 

$

3,450,025

 

 

 

 

$

(224,965

)

 

 

 

$

(22,053

)

 

 

 

$

3,205,123

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42,963

 

 

 

 

 

 

 

 

 

 

42,963

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

254

 

 

 

 

 

254

 

Dividends on Class A common

   shares ($0.13 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,958

)

 

 

 

 

 

 

 

 

 

(26,958

)

Dividends on preferred shares (Series

   D - $0.50 per share; Series E -

   $0.52 per share; Series G - $0.51;

   Series H - $0.49 per share; Series

   I - $0.50 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,247

)

 

 

 

 

 

 

 

 

 

(18,247

)

Accretion of puttable preferred

   shares with holder put option

 

 

 

303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(303

)

 

 

 

 

 

 

 

 

 

(303

)

Exercise of puttable preferred share

   with holder put option (note 2)

 

(1,923,585

)

 

(47,782

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of put option on

   puttable preferred shares

 

(60,000

)

 

(1,490

)

 

 

 

 

 

 

60,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,490

 

Shares issued through dividend

    reinvestment program

 

 

 

 

 

 

 

30,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

303

 

Share-based compensation expense

   (note 15):

    Restricted Class A common

      shares, phantom share

      units, restricted stock units and

      stock options

 

 

 

 

 

 

 

1,195

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

693

 

 

 

 

 

(122

)

 

 

 

 

 

 

 

 

 

572

 

Balance, September 30, 2019

 

 

$

 

 

 

 

215,649,215

 

 

 

33,335,570

 

$

2,158

 

 

 

 

$

333

 

 

 

 

$

(374

)

 

 

 

$

3,452,511

 

 

 

 

$

(227,632

)

 

 

 

$

(21,799

)

 

 

 

$

3,205,197

 

See accompanying notes to interim consolidated financial statements.

 

4

 


 

SEASPAN CORPORATION

Interim Consolidated Statements of Puttable Preferred Shares and Shareholders’ Equity

(Unaudited)

(Expressed in thousands of United States dollars, except number of shares and per share amounts)

Three months ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Series D puttable

 

 

 

Number of

 

 

 

 

non-puttable

 

 

 

 

 

 

Non-puttable

 

 

 

 

 

 

Additional

 

 

 

 

 

 

other

 

 

Total

 

 

preferred shares

 

 

 

common

 

 

 

 

preferred

 

 

Common

 

 

preferred

 

 

Treasury

 

 

paid-in

 

 

 

 

 

 

comprehensive

 

 

shareholders’

 

 

Shares

 

Amount

 

 

 

shares

 

 

 

 

shares

 

 

shares

 

 

shares

 

 

Shares

 

 

capital

 

 

Deficit

 

 

loss

 

 

equity

 

Balance, June 30, 2018, carried

   forward

 

1,986,449

 

$

47,256

 

 

 

 

137,283,264

 

 

 

 

 

32,872,706

 

 

$

1,373

 

 

$

329

 

 

$

(371

)

 

$

2,862,936

 

 

$

(749,752

)

 

$

(23,112

)

 

$

2,091,403

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

79,973

 

 

 

 

 

 

79,973

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

271

 

 

 

271

 

Series I preferred shares issued

 

 

 

 

 

 

 

 

 

 

 

 

6,000,000

 

 

 

 

 

 

60

 

 

 

 

 

 

149,940

 

 

 

 

 

 

 

 

 

150,000

 

Warrants issued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,523

 

 

 

 

 

 

 

 

 

67,523

 

Exercise of warrants

 

 

 

 

 

 

 

38,461,539

 

 

 

 

 

 

 

 

385

 

 

 

 

 

 

 

 

 

249,348