DAC

Market Context

• Ongoing unresolved conflicts in Ukraine and Iran created exceptional tightness in global shipping markets, pushing sector rates to multi-year highs. A brief ceasefire allowed the company to safely extract its two vessels from the Gulf region, with all crew and vessels remaining fully operational.
• Combined disruptions from Gulf shipping instability, Bab el-Mandeb transit restrictions, and U.S. tariff measures have created sustained tight market conditions, with shipping the only industry able to absorb this scale of disruption and maintain global goods/energy/raw material supply.

Strategic Execution

• Executed on the long-term strategy of securing extended charter employment at attractive rates and arranging competitive long-term financing for the company's newbuilding program. The dry bulk segment delivered strong profitability with cape size rates at multi-year highs.
• Extended charters across a large portion of the fleet during the quarter, adding $683 million to the contracted revenue backlog, which now stands at a record $4.6 billion with an average charter duration of 4.7 years.
• Continued terming out debt financing: refinanced two additional vessels via Japanese operating leases, secured $236 million in Jolko financing commitments for three vessels delivering in 2027, and entered a $132 million credit facility to finance six 1800 T-Union newbuildings.

Financial Position

• 78 of the company's 87 operating vessels are debt-free, with net leverage of just 0.3x trailing twelve month EBITDA, and total available liquidity (including cash, undrawn RCF capacity, and marketable securities) of approximately $1.5 billion, providing ample flexibility to pursue accretive growth opportunities.
• As of quarter end, cash balances totaled $1 billion, with additional committed facilities in place to fully support the ongoing newbuilding program.

Contract Coverage

• Current contracted coverage levels: 100% of container operating days for 2026, 93% for 2027, 79% for 2028, and over 60% for 2029.

Management did not issue explicit numerical revenue or earnings guidance for future periods, and maintained the company's long-standing strategic approach to capital allocation and growth. The company reaffirmed its commitment to pursuing only accretive investment opportunities, and to maintaining a fortress balance sheet to capture opportunities that arise during market volatility.

1. Container Segment: Container vessel revenue was broadly stable at $237.9 million, down $0.8 million from the prior year comparable quarter. New building deliveries of container ships added $3.2 million in incremental revenue, and higher charter rates contributed an additional $0.6 million. These gains were offset by a $3.4 million reduction in non-cash revenue recognition under U.S. GAAP and a $1.2 million increase in period charges. Revenue contribution percentage for container is approximately 87% of total company revenue.

2. Dry Bulk Segment: Dry bulk revenue increased 57% year-over-year, rising from $22.7 million to $35.7 million, driven primarily by strong improved market conditions. HSI time charter equivalent rates rose to $30,400 per day from $18,000 per day in Q2 2025, and the segment also benefited from operating one additional acquired vessel. Segment adjusted EBITDA increased to $18.8 million from $5.9 million year-over-year. Revenue contribution percentage for dry bulk is approximately 13% of total company revenue.

• Ongoing unresolved geopolitical conflicts in Ukraine and Iran create uncertainty for global shipping operations and supply chains, with the potential to disrupt vessel transits and impact market stability.
• Current elevated newbuilding prices and high market volatility increase the risk of new non-accretive investments, leading the company to exercise heightened caution for new growth initiatives at current price levels.
• Actual future results may differ materially from forward-looking statements due to a range of unforeseen factors, which are detailed in the company's SEC filings.

Q: Given the company's large current cash generation and existing record backlog, what is management's approach to new investments at this point in the market cycle? / A: Management noted that the risk of new investments at today's elevated prices is much higher, and growing accretively is far more difficult than simple growth. The company is using current strong market conditions to strengthen its fortress balance sheet and lock in long-term low-cost financing. Management will wait for attractive opportunities to emerge given current market volatility, as the company already completed its growth at more reasonable price points with accretive long-term charters, and is being very cautious at current valuations.

Q: With the company generating significant free cash flow, what should shareholders expect for future dividend increases after maintaining the current 90 cent dividend for four quarters? / A: Management stated that the board of directors will make the final decision on the pace of future dividend increases. The company has historically followed a pattern of moderate gradual increases rather than large one-time jumps, and the dividend decision will be addressed by the board in the next quarter.

Q: What is the charter structure for the company's Cape size dry bulk vessels, after the segment's strong quarterly improvement? Are most on spot or fixed charter? / A: Management confirmed that nearly all Cape size vessels operate on the spot market. Only a small number are on index-linked charters, which function similarly to spot rates, and just one vessel is on a fixed rate contract through the end of 2026.

Q: Can you provide an update on the Alaska LNG project, and will the company pursue speculative LNG vessel orders without pre-existing long-term contracts? / A: Management confirmed the company will not pursue speculative LNG newbuilding orders, and any orders will be tied directly to LNG production from the Alaska LNG project. The project is progressing, with remaining legislative arrangements required before a final investment decision (FID), which management expects to be finalized in September 2026.