Seaspan Reports Financial Results for the Quarter Ended March 31, 2012

HONG KONG, CHINA – May 16, 2012 /CNW/ – Seaspan Corporation (NYSE:SSW) announced today its financial results for the quarter ended March 31, 2012. Below is a summary of Seaspan's key financial results:

Summary of Key Financial Results (in thousands of USD):

	Quarter Ended March 31,				Change
	2012		2011		$			%
Reported net earnings	$	51,258	$	50,552	$	706		1.4	%
Normalized net earnings(1)	$	33,228	$	25,146	$	8,082		32.1	%
Earnings per share, basic	$	0.54	$	0.56	$	(0.02)		(3.6)	%
Earnings per share, diluted	$	0.51	$	0.53	$	(0.02)		(3.8)	%
Normalized earnings per share, converted(1) (Series A preferred shares converted at $15)	$	0.30	$	0.24	$	0.06		25.0	%
Cash available for distribution to common shareholders(2)	$	65,344	$	50,897	$	14,447		28.4	%
Adjusted EBITDA(3)	$	115,826	$	87,235	$	28,591		32.8	%

(1) Normalized net earnings and normalized earnings per share are non-GAAP measures that are adjusted for items such as the change in fair value of financial instruments, interest expense, interest expense at the hedged rate, organizational development costs and certain other items that Seaspan believes are not representative of its operating performance. Normalized earnings per share, converted, reflects normalized earnings per share on a pro-forma basis on the assumption that Seaspan's outstanding Series A preferred shares are converted at $15.00 per share. Please read "Reconciliation of Non-GAAP Financial Measures for the Quarters Ended March 31, 2012 and 2011- Description of Non-GAAP Financial Measures – B. Normalized Net Earnings and Normalized Earnings per Share" for a description of normalized net earnings and normalized earnings per share, converted, and for reconciliations of these measures to net earnings and earnings per share, respectively.

(2) Cash available for distribution to common shareholders is a non-GAAP measure that represents net earnings adjusted for depreciation, amortization of deferred charges, non-cash share-based compensation, dry-dock adjustment, change in fair value of financial instruments, interest expense, interest expense at the hedged rate, cash dividends paid on preferred shares, loss on vessels, bareboat charter adjustment, organizational development costs and certain other items that Seaspan believes are not representative of its operating performance. Please read "Reconciliation of Non-GAAP Financial Measures for the Quarters Ended March 31, 2012 and 2011 – Description of Non-GAAP Financial Measures – A. Cash Available for Distribution to Common Shareholders" for a description of cash available for distribution to common shareholders and a reconciliation of cash available for distribution to net earnings.

(3) Adjusted EBITDA is a non-GAAP measure that represents net earnings before interest expense and other debt-related expenses, interest income, income tax expense, depreciation and amortization expense, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs and certain other non-cash charges and items that Seaspan believes are not representative of its operating performance. Please read "Reconciliation of Non-GAAP Financial Measures for the Quarters Ended March 31, 2012 and 2011 – Description of Non-GAAP Financial Measures – C. Adjusted EBITDA" for a description of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings.

Summary of Key Highlights

• Achieved vessel utilization of 99.1% for the quarter ended March 31, 2012. 
   
• Accepted delivery of two newbuilding vessels during the quarter, bringing Seaspan's operating fleet to a total of 67 vessels at March 31, 2012. The two delivered vessels are 13100 TEU vessels, the largest vessels in Seaspan's fleet and flagship vessels in COSCON's containership fleet. 
   
• Paid a fourth quarter dividend of $0.59375 per Series C preferred share on January 30, 2012, representing a distribution of $8.3 million. The dividend was paid to all Series C shareholders of record as of January 27, 2012 for the period from October 30, 2011 to January 29, 2012. 
   
• Paid a fourth quarter dividend of $0.1875 per common share on February 22, 2012, increasing cumulative dividends paid to $7.72 per common share since Seaspan's August 2005 initial public offering. 
   
• Repurchased 11.3 million Class A common shares through a tender offer at a price of $15 per share for an aggregate cost of $169.5 million excluding, fees and expenses. 
   

Gerry Wang, Chief Executive Officer, Co-Chairman, and Co-Founder of Seaspan, commented, "During the first quarter, Seaspan continued to generate strong, stable operational and financial results for shareholders. We also took delivery of two newbuildings during the quarter, increasing our fleet to 67 vessels. Consistent with our strategy, both vessels commenced operations under long-term time charters with a leading liner company."

Mr. Wang added, "Based on our favourable results, our board has declared a $0.25 per share dividend on our Class A common stock for the first quarter, representing a 33% increase. We remain committed to drawing upon our strong and flexible capital structure to further grow our high-quality fleet in a disciplined manner. In achieving this important goal, we intend to continue to emphasize our SAVER vessel design, which we believe provides customers with improved efficiency and operational savings."

First Quarter Developments

Delivery of Vessels

In March 2012, Seaspan accepted delivery of the COSCO Excellence and COSCO Faith vessels. Both 13100 TEU vessels are on charter to COSCON under 12-year, fixed-rate time charter contracts.

Time Charter

In March 2012, CSCL did not exercise its option to extend the time charter for the CSCL Dalian. Seaspan plans to re-charter the vessel, subject to market conditions, following its redelivery to Seaspan on or about July 2012.

UASC Madinah

In March 2012, Seaspan was notified the time charter for the UASC Madinah will not be extended and the vessel will be returned to Seaspan in June 2012. This vessel is owned by one of Seaspan's subsidiaries, and is being chartered to Seaspan. Seaspan's subsidiary financed the vessel with a term loan from a leading U.S. bank, and this term loan will mature in June upon the expiration of the UASC time charter. Subject to certain conditions, the vessel will be sold to the U.S. bank in June 2012 for the amount outstanding under the term loan and will be leased back to Seaspan's subsidiary for approximately nine years.

Open Market Share Repurchase Plan

In February 2012, Seaspan's Board of Directors authorized the repurchase of up to $50.0 million of its Class A common shares. The share repurchase authorization does not have an expiration date and repurchase activity will depend on factors such as working capital needs, repayment of debt, share price, and economic and market conditions. Share repurchases may be effected from time to time through open market purchases or in privately negotiated transactions, and the repurchase program may be suspended, delayed or discontinued at any time. Seaspan has entered into a Rule 10b5-1 plan in connection with the share repurchase program. No shares were repurchased during the quarter ended March 31, 2012.

Acquisition of Seaspan Management Services Limited

On January 27, 2012, Seaspan acquired all of the issued and outstanding share capital of Seaspan Management Services Limited (the "Manager"), and acquired and cancelled all of the issued and outstanding shares of Seaspan's Class C common stock, which were owned by a subsidiary of the Manager.

The purchase price for the acquisition, excluding potential balance sheet adjustments and any contingent consideration for managed fleet growth payments, was $54.0 million, which Seaspan paid through the issuance of approximately 4.2 million shares of its Class A common stock, valued on a per share basis equal to $12.794, being the volume-weighted average trading price for the 90 trading days immediately preceding the closing date of the acquisition. For accounting purposes, under U.S. GAAP, the purchase price is required to be valued at the acquisition date. Therefore, the closing share price on the day prior to acquisition of $15.85 per share was used to value the Class A common shares at $66.9 million.

The Manager provides technical, administrative and strategic services to Seaspan. Prior to the acquisition, the Manager was owned by affiliates of Seaspan's largest shareholder and certain of Seaspan's directors. The acquisition increases Seaspan's control over access to services that the Manager provides on a long-term basis, and reduces certain conflicts between Seaspan and its directors who had interests in the Manager. Seaspan previously paid fees to the Manager for technical services on a fixed basis, which fees were adjusted every three years. As a result of the acquisition, Seaspan's costs for these services will vary more directly with the actual cost of providing technical services for Seaspan's fleet. The conflicts committee of Seaspan's board of directors, which committee is composed of independent directors, with the assistance of financial and legal advisors, reviewed and approved the acquisition of the Manager. For additional information about Seaspan's acquisition of the Manager, please see Seaspan's Form 6-K filed with the SEC on January 30, 2012.

Tender Offer

On January 19, 2012, Seaspan repurchased 11.3 million shares of its Class A common stock tendered in a tender offer at a price of $15.00 per share, for an aggregate cost of $169.5 million excluding fees and expenses related to the tender offer.

Subsequent Events

Dividends

On April 17, 2012, Seaspan declared a quarterly dividend of $0.59375 per Series C preferred share, representing a total distribution of $8.3 million. This dividend was paid on April 30, 2012 to all shareholders of record on April 27, 2012.

On May 12, 2012, Seaspan's board of directors declared a quarterly dividend of $0.25 per Class A common share. The dividend will be paid on June 8, 2012 to all shareholders of record as of May 29, 2012. This represents a 33.3% increase over the previous quarterly common share dividend. With this dividend, Seaspan has increased its quarterly common share dividend by 150% since March 31, 2010. Seaspan expects common share dividends for the four quarters ending December 31, 2012 to total $1.00 per share.

Delivery of vessels

On April 18 and 27, 2012, Seaspan accepted delivery of the COSCO Hope and the COSCO Fortune, respectively, bringing its operating fleet to 69 vessels. Both 13100 TEU vessels are on charter to COSCON under 12-year, fixed-rate time charter contracts.

Time Charter

On April 24, 2012, Seaspan fixed the CSCL Ningbo on a six-month time charter with CSCL at a charter rate of $8,450 per day, with an additional six-month extension option at a charter rate of $12,250 per day.

Loan Facility Transaction

On May 12, 2012, three of Seaspan's subsidiaries concluded documentation for a $224 million loan facility with a leading Chinese bank relating to the construction of its three 10000 TEU newbuilding vessels. Seaspan expects the agreement to be executed by early June 2012. These vessels are scheduled to be delivered in 2014, when they will commence operations under charters with Hanjin Shipping Co., Ltd. ("Hanjin") for a period of 10 years, plus an additional two years at the option of Hanjin. Seaspan has conditionally guaranteed certain financial obligations of its subsidiaries to the Chinese bank under the loan facility.

Results for the Quarter Ended March 31, 2012

The following tables summarize vessel utilization and the impact of off-hire time on Seaspan's revenues for the quarter ended March 31, 2012:

		First Quarter
		2012		2011
Vessel Utilization:
Ownership Days		5,591		5,087
Less Off-hire Days:
	Scheduled 5-Year Survey	(44)		(53)
	Unscheduled Off-hire	(7)		(2)
Operating Days		5,540		5,032
Vessel Utilization		99.1	%	98.9	%

		First Quarter
		2012			2011
Revenue – Impact of Off-Hire (in thousands):
100% Utilization		$	153,349		$	121,983
Less Off-hire:
	Scheduled 5-Year Survey		(1,058)			(955)
	Unscheduled Off-hire(1)		(202)			(33)
Actual Revenue Earned		$	152,089		$	120,995
(1) Includes charterer deductions that are not related to off-hire.

Seaspan accepted delivery of 10 vessels during the year ended December 31, 2011. Seaspan began 2012 with 65 vessels in operation and during the quarter ended March 31, 2012, accepted delivery of two vessels, bringing its fleet to a total of 67 vessels in operation as at March 31, 2012. Operating days are the primary driver of revenue, while ownership days are the primary driver for ship operating costs.

The following table summarizes Seaspan's consolidated financial results for the quarters ended March 31, 2012 and 2011:

Financial Summary (in millions)	Quarter Ended March 31,					Change
	2012		2011			$		%
Revenue	$	152.1	$	121.0		$	31.1	25.7	%
Ship operating expense		34.6		31.1			3.5	11.2	%
Depreciation		37.3		30.0			7.3	24.4	%
General and administrative expenses		5.9		2.7			3.2	117.1	%
Interest expense		17.0		10.1			6.8	67.3	%
Change in fair value of financial instruments (gain)/loss		4.7		(5.8)			10.5	180.6	%

	Quarter Ended March 31,		Increase
	2012	2011	Days	%
Operating days	5,540	5,032	508	10.1	%
Ownership days	5,591	5,087	504	9.9	%

Revenue

The increase in operating days and the dollar impact thereof, for the quarter ended March 31, 2012 relative to the corresponding period in 2011, was due to the following:

	Quarter Ended March 31, 2012
	Operating Days impact		$ impact (in millions)
2012 vessel deliveries	40		$	2.3
Full period contribution for 2011 vessel deliveries	763			35.6
Changes due to bareboat charters(1)	(360)			(8.4)
Change in daily charterhire rate	–			0.2
Change in charterhire days	61			1.7
Scheduled off-hire	9			(0.1)
Unscheduled off-hire	(5)			(0.2)
Total	508		$	31.1
(1) Seaspan bareboat chartered to MSC four 4800 TEU vessels commencing in the fourth quarter of 2011. These transactions were accounted for as sales-type leases with the vessels being deemed disposed of and a gross investment in lease recorded which is being amortized to income through interest income from leasing. In the comparable period in the prior year, the hire payments from the time chartering of these vessels to A.P. Møller-Mærsk A/S was included in revenue.

Vessel utilization was 99.1% for the quarter ended March 31, 2012 compared to 98.9% for the comparable period in the prior year.

The increase in vessel utilization for the quarter ended March 31, 2012 was primarily due to a decrease in scheduled off-hire. For the quarter ended March 31, 2011, there were four scheduled dry-dockings which resulted in 53 days of off-hire. During the quarter ended March 31, 2012, Seaspan commenced four dry-dockings which resulted in 44 days of scheduled off-hire. The decrease in scheduled off-hire was partially offset by an increase in unscheduled off-hire.

The dry-dockings Seaspan commenced during the quarter ended March 31, 2012 involved the following vessels:

Vessel	Commenced
Rio de Janeiro Express	Q1
CSCL Zeebrugge	Q1
COSCO Fuzhou	Q1
COSCO Yingkou	Q1

Seaspan's cumulative vessel utilization since its initial public offering in August 2005 is 99.3%.

Ship Operating Expense

Prior to the acquisition of the Manager, the ship operating expense was comprised of fees paid to the Manager for technical services in exchange for a fixed fee per day per vessel, which was adjusted every three years. The fixed technical management fee was established based on costs expected to be incurred by the Manager in providing the technical services. As a result of the acquisition, Seaspan's ship operating expense is made up of the direct operating costs of the vessels.

Ship operating expense for the quarter ended March 31, 2012 of $34.6 million included $9.3 million of technical management fees paid to the Manager during the pre-acquisition period from January 1 to January 26, 2012 and $25.3 million in direct costs incurred during the post-acquisition period from January 27 to March 31, 2012.

Ship operating expense increased to $34.6 million for the quarter ended March 31, 2012, from $31.1 million for the same period in the prior year. In 2011, the ship operating expenses represented the amounts paid to the Manager for technical management fees. The increase in ship operating expense was primarily due to an increase in ownership days resulting from the two vessel deliveries in the first quarter of 2012 and a full period of expenses for the 10 vessel deliveries during 2011. In addition, lubricant costs, spares and repairs and maintenance increased due to a worldwide rise in the cost of lubricants, service and parts prices. Prior to the acquisition of the Manager, the entire fixed technical service fee was classified as ship operating expense. As a result of the acquisition of the Manager, the portion of the Manager's general and administrative expenses previously included in the fixed technical service fee, because such expenses are not operating in nature, has been reclassified as general and administrative expenses in 2012 and are no longer included in ship operating expense. This decrease partially offsets the increases described above.

Depreciation

The increase in depreciation expense for the quarter ended March 31, 2012 was due to the two vessel deliveries in 2012 and a full period of ownership for the 10 deliveries in 2011, offset by the impact of the disposition of four MSC bareboat charter vessels.

General and Administrative Expenses

The increase in general and administrative expenses for the quarter ended March 31, 2012 compared to the corresponding period of the prior year was primarily the result of the reclassification of general and administrative expenses of the Manager from ship operating expenses, as described above.

Interest Expense

Interest expense is comprised primarily of interest at the variable rate plus the applicable margin incurred on debt for operating vessels and a reclassification of amounts from accumulated other comprehensive income related to previously designated hedging relationships. The increase in interest expense for the quarter ended March 31, 2012, was primarily due to a higher average operating debt balance and higher average LIBOR compared to the comparable period in the prior year. The average LIBOR for the quarter ended March 31, 2012 was 0.5% compared to 0.4% for the corresponding period of the prior year. Although Seaspan has entered into fixed interest rate swaps for much of its variable rate debt, the difference between the variable interest rate and the swapped fixed rate on operating debt is recorded in Seaspan's change in fair value of financial instruments caption as required by financial reporting standards. The interest incurred on long-term debt for Seaspan's vessels under construction is capitalized to the respective vessels under construction.

Change in Fair Value of Financial Instruments

The change in fair value of financial instruments resulted in a loss of $4.7 million for the quarter ended March 31, 2012, compared to a gain of $5.8 million for the comparable quarter last year. The changes in change in fair value for the quarter ended March 31, 2012 were primarily due to decreases in the forward LIBOR curve. The fair value of interest rate swap and swaption agreements is subject to change based on Seaspan's company-specific credit risk included in the discount factor and the interest rate implied by the current swap curve, including its relative steepness. In determining the fair value, these factors are based on the current information available to Seaspan. These factors are expected to change through the life of the instruments, causing the fair value to fluctuate significantly due to the large notional amounts and long-term nature of Seaspan's derivative instruments. As these factors may change, the fair value of the instruments is an estimate and may deviate significantly from the actual cash settlements realized over the term of the instruments. Seaspan's valuation techniques have not changed and remain consistent with those followed by other valuation practitioners.

Dividends Declared

For the quarter ended March 31, 2012, Seaspan declared a quarterly dividend of $0.25 per Class A common share, representing a total distribution of $15.7 million. The dividend will be paid on June 8, 2012 to all shareholders of record as of May 29, 2012. Because Seaspan adopted a dividend reinvestment plan, or DRIP, the actual amount of cash dividend paid may be less than $15.7 million based on shareholder participation in the DRIP.

Since Seaspan's initial public offering in August 2005, it has declared cumulative dividends of $7.97 per common share. Since Seaspan adopted the DRIP in May 2008, a total of 3.3 million shares have been issued, and $38.1 million of dividends have been reinvested, through shareholder participation in the DRIP.

About Seaspan

Seaspan is a leading independent owner and manager of containerships, which it charters primarily pursuant to long-term fixed-rate time charters to major container liner companies. Seaspan's contracted fleet of 72 containerships consists of 69 containerships in operation and three containerships scheduled for delivery in 2014. Seaspan's operating fleet of 69 vessels has an average age of approximately five years and an average remaining charter period of approximately seven years. All of the three vessels to be delivered to Seaspan are already committed to fixed-rate time charters of 10 years in duration from delivery. Seaspan's customer base consists of nine of the world's largest liner companies, including China Shipping Container Lines (Asia) Co., Ltd., Compania Sud Americana de Vapores S.A., COSCO Container Lines Co., Ltd., Hanjin Shipping Co., Ltd., Hapag-Lloyd USA, LLC, Kawasaki Kisen Kaisha Ltd., Mediterranean Shipping Company S.A., Mitsui O.S.K. Lines, Ltd., and United Arab Shipping Company (S.A.G.).

Seaspan's common shares are listed on the New York Stock Exchange under the symbol "SSW".

Seaspan's Series C preferred shares are listed on the New York Stock Exchange under the symbol "SSW PR C".

Conference Call and Webcast

Seaspan will host a conference call and webcast presentation for investors and analysts to discuss its results for the quarter ended March 31, 2012 on May 17, 2012 at 7:00 a.m. PT / 10:00 a.m. ET. Participants should call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International) and request the Seaspan call. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call 1-855-859-2056 or 1-404-537-3406 and enter the replay passcode: 79662823. The recording will be available from May 17, 2012 at 10:00 a.m. PT / 1:00 p.m. ET through 8:59 p.m. PT / 11:59 p.m. ET on May 31, 2012. The conference call will also be broadcast live over the Internet and will include a slide presentation. To access the live webcast and slide presentation, go to www.seaspancorp.com and click on "News & Events" and then "Events & Presentations" for the link. The webcast and slides will be archived on the site for one year.

SEASPAN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2012
(IN THOUSANDS OF US DOLLARS)
		March 31, 2012			December 31, 2011
Assets
Current assets:
	Cash and cash equivalents	$	289,478		$	481,123
	Short term investments		10,578			–
	Accounts receivable		16,945			6,837
	Prepaid expenses		26,608			17,398
	Gross investment in lease		14,600			14,640
			358,209			519,998
Vessels			4,601,268			4,289,331
Vessels under construction			231,537			407,918
Deferred charges			45,386			45,917
Gross investment in lease			92,198			95,798
Goodwill			66,662			–
Other assets			78,202			88,754
		$	5,473,462		$	5,447,716
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities	$	55,164		$	47,400
	Deferred revenue		23,666			23,257
	Current portion of long-term debt		78,039			81,482
	Current portion of other long-term liabilities		37,045			37,649
			193,914			189,788
Long-term deferred revenue			11,298			12,503
Long-term debt			2,958,137			2,914,247
Other long-term liabilities			643,035			583,263
Fair value of financial instruments			539,010			564,490
			4,345,394			4,264,291
Share capital			770			838
Treasury shares			(1,444)			–
Additional paid-in capital			1,773,435			1,860,979
Deficit			(591,415)			(622,406)
Accumulated other comprehensive loss			(53,278)			(55,986)
Total shareholders' equity			1,128,068			1,183,425
		$	5,473,462		$	5,447,716

SEASPAN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011
(IN THOUSANDS OF US DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)
		Quarter ended March 31, 2012			Quarter ended March 31, 2011
Revenue		$	152,089		$	120,995
Operating expenses:
	Ship operating		34,550			31,066
	Depreciation		37,281			29,958
	General and administrative		5,850			2,694
			77,681			63,718
Operating earnings			74,408			57,277
Other expenses (earnings):
	Interest expense		16,975			10,147
	Interest income		(308)			(155)
	Interest income from leasing		(1,343)			–
	Undrawn credit facility fees		805			1,261
	Amortization of deferred charges		2,211			1,274
	Equity loss on investment		134			–
	Change in fair value of financial instruments		4,676			(5,802)
			23,150			6,725
Net earnings		$	51,258		$	50,552
Deficit, beginning of period			(622,406)			(469,616)
Dividends on common shares			(11,735)			(8,581)
Dividends on Series B preferred shares			–			(591)
Dividends on Series C preferred shares			(8,313)			–
Amortization of Series C issuance costs			(219)			(324)
Deficit, end of period		$	(591,415)		$	(428,560)
Weighted average number of shares, basic (thousands)			63,696			68,854
Weighted average number of shares, diluted (thousands)			83,566			85,285
Earnings per share, basic		$	0.54		$	0.56
Earnings per share, diluted		$	0.51		$	0.53

SEASPAN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011
(IN THOUSANDS OF US DOLLARS)
		Quarter ended March 31, 2012		Quarter ended March 31, 2011
Net earnings		$	51,258	$	50,552
Other comprehensive income:
	Amounts reclassified to net earnings during the period, relating to cashflow hedging instruments		2,708		3,376
Comprehensive income		$	53,966	$	53,928

SEASPAN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011
(IN THOUSANDS OF US DOLLARS)
			Quarter ended March 31, 2012			Quarter ended March 31, 2011
Cash provided by (used in):
Operating activities:
	Net earnings		$	51,258		$	50,552
	Items not involving cash:
		Depreciation		37,281			29,958
		Share-based compensation		586			387
		Amortization of deferred charges		2,211			1,274
		Amounts reclassified from other comprehensive loss		2,542			3,285
		Unrealized change in fair value of financial instruments		(25,783)			(35,552)
		Equity loss on investment		134			–
Change in assets and liabilities				(18,470)			(13,515)
Cash from operating activities				49,759			36,389
Financing activities:
	Preferred shares issued, net of share issue costs			–			240,376
	Draws on credit facilities			45,490			1,910
	Repayment on credit facilities			(10,042)			–
	Repayment on other long-term liabilities			(24,649)			(2,213)
	Tender Offer			(170,609)			–
	Financing fees			(16)			(682)
	Dividends on common shares(4)			(7,367)			(6,251)
	Dividends on preferred shares			(8,313)			(320)
Cash from (used in) financing activities				(175,506)			232,820
Investing activities:
	Expenditures for vessels			(86,635)			(90,561)
	Cash acquired on acquisition of Seaspan Management Services Ltd.			23,910			–
	Short term investments			(10,214)			–
	Intangible assets			7,041			(589)
Cash used in investing activities				(65,898)			(91,150)
Increase (decrease) in cash and cash equivalents				(191,645)			178,059
Cash and cash equivalents, beginning of period				481,123			34,219
Cash and cash equivalents, end of period			$	289,478		$	212,278
(4) During the quarter ended March 31, 2012, non-cash dividends of $4.4 million were paid through the dividend reinvestment plan. Shareholders have invested a total of $38.1 million in the dividend reinvestment plan since its adoption in May 2008.

SEASPAN CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011

(IN THOUSANDS OF US DOLLARS)

Description of Non-GAAP Financial Measures

A. Cash Available for Distribution to Common Shareholders

Cash available for distribution to common shareholders is defined as net earnings adjusted for depreciation, interest expense, amortization of deferred charges, non-cash share-based compensation, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs, amounts paid for dry-docking, cash dividends paid on preferred shares, interest expense at the hedged rate and certain other items that Seaspan believes affect the comparability of its operating results.

Cash available for distribution to common shareholders is a non-GAAP measure used to assist in evaluating Seaspan's ability to make quarterly cash dividends before reserves for replacement capital expenditures. Cash available for distribution to common shareholders is not defined by United States generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.

		Quarter ended March 31, 2012			Quarter ended March 31, 2011
Net earnings		$	51,258		$	50,552
Add:
	Depreciation		37,281			29,958
	Interest expense		16,975			10,147
	Amortization of deferred charges		2,211			1,274
	Share-based compensation		586			387
	Change in fair value of financial instruments		4,676			(5,802)
	Bareboat charter adjustment, net (1)		2,297			―
	Organizational development costs(2)		631			―
Less:
	Amounts paid for dry-dock adjustment		(1,946)			(1,458)
	Series B preferred share dividends paid(3)		―			(320)
	Series C preferred share dividends paid and accumulated(3)		(8,313)			(4,090)
Net cash flows before interest payments			105,656			80,648
Less:
	Interest expense at the hedged rate(4)		(40,312)			(29,751)
Cash available for distribution to common shareholders		$	65,344		$	50,897

SEASPAN CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011

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

Description of Non-GAAP Financial Measures

B. Normalized Net Earnings and Normalized Earnings per Share

Normalized net earnings is defined as net earnings adjusted for items such as interest expense, change in fair value of financial instruments, loss on vessels, interest expense at the hedged rate, organizational development costs and certain other items Seaspan believes affect the comparability of operating results. Normalized net earnings is a useful measure because it excludes those items that Seaspan believes are not representative of its operating performance.

Normalized net earnings is not defined by GAAP and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.

Normalized earnings per share, converted, is calculated as normalized net earnings, less dividends on Series B (until their repurchase on November 30, 2011) and Series C preferred shares, divided by the "converted" number of shares outstanding for the period. The Series A preferred shares automatically convert to Class A common shares at a price of $15.00 per share at any time on or after January 31, 2014 if the trailing 30-day average trading price of the common shares is equal to or above $15.00. If the share price is less than $15.00, Seaspan can choose to not convert the preferred shares and to increase the annual increase in the liquidation preference to 15% per annum from 12%. The "converted" number of shares includes: basic weighted average number of shares, share-based compensation, and the impact of the Series A preferred shares converted at $15.00 per share. This method reflects Seaspan's ability to control the conversion if the share price is less than $15.00 and the per share impact of the preferred shares conversion at $15.00.

Normalized earnings per share, basic, can be computed as normalized net earnings attributable to common shareholders divided by the weighted-average number of shares used to compute reported earnings per share, basic.

Normalized earnings per share, converted, diluted, and basic are not defined by GAAP and should not be considered as an alternative to earnings per share or any other indicator of Seaspan's performance required to be reported by GAAP.

SEASPAN CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011

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

Description of Non-GAAP Financial Measures

B. Normalized Net Earnings and Normalized Earnings per Share (continued)

		Quarter ended March 31, 2012			Quarter ended March 31, 2011
Net earnings		$	51,258		$	50,552
Adjust:
	Interest expense		16,975			10,147
	Change in fair value of financial instruments		4,676			(5,802)
	Organizational development costs (2)		631			–
	Interest at hedged rate(4)		(40,312)			(29,751)
Normalized net earnings		$	33,228		$	25,146
Less: preferred share dividends
	Series A		8,128			7,142
	Series B		–			591
	Series C (including amortization of issuance costs)		8,534			4,414
			16,662			12,147
Normalized net earnings attributable to common shareholders		$	16,566		$	12,999
Weighted average number of shares used to compute earnings per share:
Reported and normalized, basic			63,696			68,854
	Share-based compensation		198			101
	Contingent consideration		703			–
	Shares held in escrow		586			–
	Series A preferred shares liquidation preference converted at $15		18,383			16,330
Normalized, converted			83,566			85,285
	Series A preferred shares 115% premium (30-day trailing average)		–			–
Reported, diluted(5)			83,566			85,285
Earnings per share:
	Reported, basic	$	0.54		$	0.56
	Reported, diluted	$	0.51		$	0.53
	Normalized, converted – preferred shares converted at $15(6)	$	0.30		$	0.24

SEASPAN CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE QUARTERS ENDED MARCH 31, 2012 AND 2011

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

Description of Non-GAAP Financial Measures

C. Adjusted EBITDA

Adjusted EBITDA is defined as net earnings before interest expense and other debt-related expenses, income tax expense, interest income, depreciation and amortization expense, change in fair value of financial instruments, loss on vessels, bareboat charter adjustment, organizational development costs and certain other items that Seaspan believes are not representative of its operating performance.

Adjusted EBITDA provides useful information to investors in assessing Seaspan's results of operations. Seaspan believes that this measure is useful in assessing performance and highlighting trends on an overall basis. Seaspan also believes that this measure can be useful in comparing its results with those of other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net earnings. Adjusted EBITDA is not defined by GAAP and should not be considered as an alternative to net earnings or any other indicator of Seaspan's performance required to be reported by GAAP.

		Quarter ended March 31, 2012			Quarter ended March 31, 2011
Net earnings		$	51,258		$	50,552
Add:
	Interest expense		16,975			10,147
	Interest income		(308)			(155)
	Undrawn credit facility fees		805			1,261
	Depreciation		37,281			29,958
	Amortization of deferred charges		2,211			1,274
	Change in fair value of financial instruments		4,676			(5,802)
	Bareboat charter adjustment, net(1)		2,297			–
	Organizational development costs(2)		631			–
Adjusted EBITDA		$	115,826		$	87,235

(1)	In the second half of 2011, Seaspan entered into agreements to bareboat charter to MSC four 4800 TEU vessels for a five year term, beginning from vessel delivery dates that occurred in 2011. Upon delivery of the vessels to MSC, the transactions were accounted for as sales-type leases. The vessels were disposed of and a gross investment in leases was recorded, which is being amortized to income through interest income from leasing. The bareboat charter adjustment is included to reverse the GAAP accounting treatment and reflect the transaction as if the vessels had not been disposed of. Therefore, the bareboat charter fees are added back and the interest income from leasing is deducted resulting in a net bareboat charter adjustment.
(2)	Organizational development costs include professional fees and integration costs related to the acquisition of the Manager.
(3)	Dividends related to the Series B and Series C preferred shares have been deducted as they reduce cash available for distribution to common shareholders. All outstanding Series B preferred shares were redeemed on November 30, 2011.
(4)	Interest expense at the hedged rate is calculated as the interest incurred on operating debt at the fixed rate on the related interest rate swaps plus the applicable margin on the related credit facilities and variable rate leases, on an accrual basis. Interest expense on fixed rate leases is calculated on the effective interest rate.
(5)	If the effect of Series A preferred shares is anti-dilutive, their effect is excluded from the computation of reported diluted earnings per share.
(6)	Normalized earnings per share, converted, for the quarter ended March 31, 2012 is comparable to the comparable quarter in the prior year. Excluding share count changes, a decrease of $0.04 per share due to the impact of the Series B and C preferred shares for the three months ended March 31, 2012 was offset by an increase of $0.10 per share due to a rise in normalized net earnings. In addition, due to a decrease in converted share count (85,285 to 83,566), there is an increase of $0.01 per share.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect management's current views with respect to certain future events and performance, including, in particular, statements regarding: future operating results; expansion of Seaspan's business; future dividends; the effects of the acquisition of the Manager on Seaspan and its operations and results, including, among other things, on ship operating expenses and general and administrative expenses; the closing of the financing for the three newbuilding vessels; repurchases of Seaspan common shares under its share repurchase program; vessel deliveries; vessel financing arrangements; and Seaspan's capital requirements. Although these statements are based upon assumptions Seaspan believes to be reasonable, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to: the availability to Seaspan of containership acquisition opportunities; the availability and cost to Seaspan of financing to pursue growth opportunities; integration of the Manager acquisition and the number of additional vessels managed by the Manager in the future; satisfaction of closing conditions for the newbuilding vessel financing; chartering rates; conditions in the containership market; increased operating expenses; the number of off-hire days; dry-docking requirements; Seaspan's ability to borrow funds under its credit facilities and to obtain additional financing in the future; Seaspan's future cash flows and its ability to make dividend and other payments; the time that it may take to construct new ships; Seaspan's continued ability to enter into primarily long-term, fixed-rate time charters with customers; changes in governmental rules and regulations or actions taken by regulatory authorities; the financial condition of shipyards, charterers, lenders, refund guarantors and other counterparties and their ability to perform their obligations under their agreements with Seaspan; the potential for early termination of long-term contracts and Seaspan's potential inability to renew or replace long-term contracts; conditions in the public equity markets and the price of Seaspan's common shares; and other factors detailed from time to time in Seaspan's periodic reports and filings with the Securities and Exchange Commission, including Seaspan's Report on Form 20-F for the year ended December 31, 2011. 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.