Costamare Inc. Reports Results for the Third Quarter and Nine-Months Ended September 30, 2018

Wednesday, 24. October 2018 22:10

MONACO, Oct. 24, 2018 (GLOBE NEWSWIRE) -- Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the third quarter and nine-months ended September 30, 2018.

  • Adjusted Net Income available to common stockholders of $9.8 million or $0.09 per share and $33.6 million or $0.31 per share for the three-months and the nine-months ended September 30, 2018, respectively.
  • Successfully concluded pre and post delivery financing of its five newbuild vessels, currently under construction, which will enter into 10-year charters to Yang Ming upon their delivery. The ships are expected to be delivered between the second quarter of 2020 and the second quarter of 2021.
  • Purchased two 1996-built, 8,044 TEU sister containerships Maersk Kleven and Maersk Kotka in September 2018. Upon their delivery the vessels commenced a 2.5-year charter with Maersk.
  • Agreed to install scrubbers on five Post Panamax container vessels (two 8,827 TEU vessels and three 9,403 TEU vessels). Following the installation of the scrubbers, the existing charter rates will be increased and the original charter expiry (ranging from 2023 to 2024) will be extended for a period of 3 years.
  • Chartered in total 23 vessels over the quarter (excluding the two recent secondhand acquisitions).
  • Declared dividend of $0.10 per share on its common stock and dividends on all four classes of its preferred stock.

See “Financial Summary” and “Non-GAAP Measures” below for additional detail

New Business Developments

A. New acquisitions

  • In September 2018, we purchased two 1996-built, 8,044 TEU containerships, the Maersk Kleven and Maersk Kotka. Both vessels have a 2.5-year charter with Maersk Line at a daily rate of $17,500.

B. New financing transactions

  • In August 2018, we entered into pre and post delivery financing agreements for our five newbuild containerships, each of approximately 12,690 TEU capacity and currently under construction, with a leading financial institution.

C. Vessel disposals

  • In October 2018, we sold for demolition the 1998-built, 3,842 TEU container vessel MSC Koroni.
  • In August 2018, we concluded the sale for demolition of the 1998-built, 1,645 TEU container vessel Padma.

D. New charter agreements

  • The Company has chartered in total 23 vessels over the quarter (excluding the two recent secondhand acquisitions). More specifically, the Company:
    -  Agreed to install scrubbers and increase the current daily rate of $43,000 for the 2014-built 9,403 TEU containerships MSC Azov, MSC Ajaccio and MSC Amalfi with MSC until their original earliest redelivery dates (December 2, 2023 - MSC Azov, February 1, 2024 -MSC Ajaccio and March 16, 2024 -MSC Amalfi). Also agreed to extend the relevant charters for a period of 3 years starting from their original earliest redelivery dates. 
    -  Agreed to install scrubbers and increase the current daily rate of $42,000 for the 2013-built 8,827 TEU containerships MSC Athens and MSC Athos with MSC until their original earliest redelivery dates (January 29, 2023 -MSC Athens and February 24, 2023 - MSC Athos). Also agreed to extend the relevant charters for a period of 3 years starting from their original earliest redelivery dates.
    -  Agreed to charter the 2016-built, 11,010 TEU containership Cape Akritas with Evergreen for a period of 40 to 50 days at charterers’ option, starting from September 6, 2018, at a daily rate of $26,000. Subsequently agreed to extend the charter for a period of 8 to 11 months at charterers’ option, starting from October 26, 2018 at a daily rate of $28,000.
    -  Agreed to extend the charter of the 2017-built, 11,010 TEU containership Cape Kortia with Evergreen for a period of 8 to 11 months at charterers’ option, starting from November 13, 2018 at a daily rate of $28,000.
    -  Agreed to extend the charter of the 2006-built, 9,469 TEU containership Cosco Ningbo with Cosco for a period of 6 to 10 months at charterers’ option, starting from September 19, 2018, at a daily rate of $17,900.
    -  Agreed to extend the charter of the 2006-built, 9,469 TEU containership Cosco Guangzhou with Cosco for a period of 6 to 10 months at charterers’ option, starting from September 18, 2018, at a daily rate of $17,900.
    -  Agreed to extend the charter of the 2006-built, 9,469 TEU containership Cosco Beijing with Cosco for a period of 6 to 10 months at charterers’ option, starting from October 9, 2018, at a daily rate of $17,900.
    -  Agreed to extend the charter of the 2006-built, 9,469 TEU containership Cosco Yantian with Cosco for a period of 6 to 10 months at charterers’ option, starting from October 27, 2018, at a daily rate of $17,900.
    -  Agreed to extend the charter of the 2006-built, 9,469 TEU containership Cosco Hellas with Cosco for a period of 6 to 10 months at charterers’ option, starting from November 7, 2018, at a daily rate of $17,900.
    -  Agreed to charter the 1997-built, 7,403 TEU containership Maersk Kawasaki with Maersk for a period of 6 to 9 months at charterers’ option, starting from September 7, 2018, at a daily rate of $12,100.
    -  Agreed to extend the charter of the 2000-built, 6,648 TEU containership Sealand New York with Maersk for a period starting from September 5, 2018 and expiring at charterers’ option during the period from October 15, 2018 to October 30, 2018, at a daily rate of $16,800. Subsequently, agreed to charter the vessel with MSC for a period of 11 to 13 months at charterers’ option, starting from November 10, 2018 at a daily rate of $11,450.
    -  Extended the charters of the 2002-built, 4,992 TEU containerships Zim New York and Zim Shanghai for an additional one-year period expiring on October 1, 2019 at a daily rate of $12,650 per vessel starting from October 2, 2018.
    -  Agreed to extend the charter of the 2002-built, 4,132 TEU containership Ulsan with Maersk for a period starting from August 30, 2018 and expiring at charterers’ option during the period from October 10, 2018 to March 15, 2019, at a daily rate of $12,200. Subsequently agreed to extend the charter for a period of 3 to 8 months at charterers’ option, starting from November 10, 2018 at a daily rate of $10,900.
    -  Agreed to charter the 1997-built, 2,458 TEU containership Messini with Evergreen for a period of 5 to 8 months at charterers’ option, starting from September 3, 2018, at a daily rate of $10,600.
    -  Agreed to charter the 2000-built, 1,645 TEU containership Neapolis with Evergreen for a period of 5 to 8 months at charterers’ option, starting from September 17, 2018, at a daily rate of $10,700.
    -  Agreed to charter the 2000-built, 2,474 TEU containership Areopolis with Evergreen for a period of 4 to 6 months at charterers’ option, starting from October 21, 2018, at a daily rate of $9,850.
    -  Agreed to extend the charter of the 2001-built, 1,550 TEU containership Arkadia with Evergreen for a period of 6 to 9 months at charterers’ option, starting from October 31, 2018, at a daily rate of $9,800.
    -  Agreed to extend the charter of the 1992-built, 2,024 TEU containership MSC Reunion with MSC for a period of 11 to 13 months at charterers’ option, starting from September 1, 2018, at a daily rate of $8,550.
    -  Agreed to charter the 2008-built, 1,300 TEU containership Michigan with Unimed Feeder Services A/S for a period of 21 to 30 days at charterers’ option, starting from September 20, 2018, at a daily rate of $8,500. Subsequently, agreed to charter the vessel with MSC for a period of 11 to 13 months at charterers’ option, starting from October 16, 2018, at a daily rate of $7,200.

E. Dividend announcements

  • On October 1, 2018, we declared a dividend for the quarter ended September 30, 2018, of $0.10 per share on our common stock, payable on November 8, 2018, to stockholders of record as of October 23, 2018.
     
  • On October 1, 2018, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, a dividend of $0.531250 per share on our Series C Preferred Stock, a dividend of $0.546875 per share on our Series D Preferred Stock and a dividend of $0.554688 per share on our Series E Preferred Stock which were all paid on October 15, 2018 to holders of record as of October 12, 2018.

Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:

“During the third quarter the Company delivered profitable results.

Seasonality, combined with concerns about demand growth and trade tensions have resulted in a softer market, both in terms of charter rates and asset prices. We have however chartered in total 25 ships during the quarter. This includes the agreement to install scrubbers on 5 Post Panamax container vessels subject to an increase in the current charter hire and a further extension of the original charter tenor for 3 years. 

We recently acquired with equity two 1996 built 8,000 TEU sister containerships, which we chartered to Maersk for a fixed period of 2.5 years. We are currently in discussions regarding the debt financing of those ships.   

Finally on the financing side, we have concluded with a leading financial institution on a pre and post-delivery basis the debt finance for the five 13,000 TEU new buildings chartered to Yang Ming for 10 years. The vessels are expected to be delivered between the second quarter of 2020 and the second quarter of 2021.”

                 
Financial Summary
                 
  Nine-month period ended
September 30,

 Three-month period ended
September 30,

(Expressed in thousands of U.S. dollars, except share and per share data): 2017
 2018
 2017
 2018
                 
                 
Voyage revenue $311,815  $274,244  $101,274  $90,913 
Accrued charter revenue (1) $(8,452) $(5,031) $(2,853) $(1,464)
Voyage revenue adjusted on a cash basis (2) $303,363  $269,213  $98,421  $89,449 
                 
Adjusted Net Income available to common stockholders (3) $58,525  $33,598  $17,176  $9,763 
Weighted Average number of shares  98,123,877   109,870,776   106,528,748   110,913,448 
Adjusted Earnings per share (3) $0.60  $0.31  $0.16  $0.09 
                 
Net Income $70,206  $47,507  $24,143  $14,040 
Net Income available to common stockholders $54,409  $24,821  $18,819  $6,136 
Weighted Average number of shares  98,123,877   109,870,776   106,528,748   110,913,448 
Earnings per share $0.55  $0.23  $0.18  $0.06 
                 

(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period and during the last years of such charter cash received will exceed revenue recognized on a straight line basis.
(2) Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash "Accrued charter revenue" recorded under charters with escalating charter rates. However, Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles ("GAAP"). We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the "Fleet List" below.
(3) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are non-GAAP measures. Refer to the reconciliation of Net Income to Adjusted Net Income.

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and nine-month periods ended September 30, 2018 and 2017. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.

 
Reconciliation of Net Income to Adjusted Net Income available to common stockholders
and Adjusted Earnings per Share
     
  Nine-month period ended
September 30,
 Three-month period ended
September 30,
(Expressed in thousands of U.S. dollars, except share and per share data) 2017 2018 2017 2018
             
Net Income$70,206 $47,507 $24,143 $14,040 
Earnings allocated to Preferred Stock (15,797) (22,686) (5,324) (7,904)
Net Income available to common stockholders 54,409  24,821  18,819  6,136 
Accrued charter revenue (8,452) (5,031) (2,853) (1,464)
General and administrative expenses – non-cash component 3,002  3,098  924  971 
Amortization of prepaid lease rentals, net 6,375  6,095  2,055  2,054 
Realized (Gain) / loss on Euro/USD forward contracts (1) (682) 97  (501) 250 
Loss / (Gain) on sale / disposals of vessels 4,856  861  (1,514) - 
Swaps’ breakage costs -  1,234  -  - 
Loss on vessel held for sale -  1,919  -  1,919 
Loss on asset held for sale by a jointly owned company with York included in equity gain on investments -  664  -  (4)
(Gain) / loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) (983) (160) 246  (99)
Adjusted Net Income available to common stockholders$58,525 $33,598 $17,176 $9,763 
Adjusted Earnings per Share$0.60 $0.31 $0.16 $0.09 
Weighted average number of shares 98,123,877  109,870,776  106,528,748  110,913,448 
             

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock, but before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized (gain) / loss on Euro/USD forward contracts, loss (gain) on sale / disposal of vessels, loss on vessel held for sale, loss on asset held for sale by a jointly owned company with York included in equity gain on investments, swaps’ breakage costs, non-cash general and administrative expenses and non-cash other items, amortization of prepaid lease rentals, net and non-cash changes in fair value of derivatives. "Accrued charter revenue" is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are not recognized measurements under U.S. GAAP. We believe that the presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net Income available to common stockholders and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

(1) Items to consider for comparability include gains and charges. Gains positively impacting Net Income available to common stockholders are reflected as deductions to Adjusted Net Income available to common stockholders. Charges negatively impacting Net Income available to common stockholders are reflected as increases to Adjusted Net Income available to common stockholders.

Results of Operations

Three-month period ended September 30, 2018 compared to the three-month period ended September 30, 2017

During the three-month periods ended September 30, 2018 and 2017, we had an average of 55.8 and 53.5 vessels, respectively, in our fleet. In the three-month period ended September 30, 2018, we accepted delivery of the secondhand containerships Megalopolis, Marathopolis, Maersk Kleven and Maersk Kotka with an aggregate TEU capacity of 26,002. In the three-month period ended September 30, 2017 we sold the container vessels Mandraki and Mykonos with an aggregate capacity of 9,656 TEU. In the three-month periods ended September 30, 2018 and 2017, our fleet ownership days totaled 5,136 and 4,922 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

         
(Expressed in millions of U.S. dollars,
 Three-month period
ended September 30,
    Percentage
except percentages) 2017 2018Change
 Change
             
         
Voyage revenue$101.3 $90.9 $(10.4) (10.3%)
Voyage expenses (0.4) (1.9) 1.5  375.0%
Voyage expenses – related parties (0.8) (0.8) -  - 
Vessels’ operating expenses (26.0) (27.4) 1.4  5.4%
General and administrative expenses (1.5) (1.3) (0.2) (13.3%)
Management fees – related parties (5.0) (5.0) -  - 
General and administrative expenses - non-cash component (0.9) (1.0) 0.1  11.1%
Amortization of dry-docking and special survey costs (1.9) (1.8) (0.1) (5.3%)
Depreciation (24.2) (23.8) (0.4) (1.7%)
Amortization of prepaid lease rentals, net (2.0) (2.0) -  - 
Gain on sale / disposal of vessels 1.5  -  (1.5) (100%)
Loss on vessel held for sale -  (1.9) 1.9  n.m. 
Interest income 0.8  0.8  -  - 
Interest and finance costs (18.0) (14.9) (3.1) (17.2%)
Equity gain on investments 1.6  3.9  2.3  143.8%
Other (0.1) 0.1  0.2  n.m. 
Gain / (Loss) on derivative instruments (0.3) 0.1  0.4  n.m. 
Net Income$24.1 $14.0    
          


         
(Expressed in millions of U.S. dollars,
 Three-month period
ended September 30,
    Percentage
except percentages) 2017 2018 Change
 Change
         
Voyage revenue$101.3 $90.9 $(10.4) (10.3%)
Accrued charter revenue (2.9) (1.5) (1.4) (48.3%)
Voyage revenue adjusted on a cash basis$98.4 $89.4 $(9.0) (9.1%)
             


         
Vessels’ operational data Three-month period
ended September 30,
   Percentage
  2017 2018 Change Change
         
Average number of vessels 53.5 55.8 2.3 4.3%
Ownership days 4,922 5,136 214 4.3%
Number of vessels under dry-docking 1 4 3  
         

Voyage Revenue

Voyage revenue decreased by 10.3%, or $10.4 million, to $90.9 million during the three-month period ended September 30, 2018, from $101.3 million during the three-month period ended September 30, 2017. The decrease is mainly attributable to decreased charter rates and increased off-hire days for certain of our vessels and revenue not earned by two vessels sold for demolition in the third quarter of 2017 and the second quarter of 2018; partly off-set by revenue earned by four secondhand vessels acquired during the fourth quarter of 2017 and second and third quarter of 2018.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), decreased by 9.1%, or $9.0 million, to $89.4 million during the three-month period ended September 30, 2018, from $98.4 million during the three-month period ended September 30, 2017. Accrued charter revenue for the three-month periods ended September 30, 2018 and 2017, amounted to $1.5 million and $2.9 million, respectively.

Voyage Expenses

Voyage expenses were $1.9 million and $0.4 million for the three-month periods ended September 30, 2018 and 2017, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $0.8 million for each of the three-month periods ended September 30, 2018 and 2017. Voyage expenses – related parties represent (i) fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping Company S.A. (“Costamare Shipping”) and by Costamare Shipping Services Ltd. (“Costamare Services”) pursuant to the Framework Agreement between Costamare Shipping and us dated November 2, 2015 (the “Framework Agreement”), the Services Agreement between Costamare Services and our vessel-owning subsidiaries dated November 2, 2015 (the “Services Agreement”) and the individual ship-management agreements pertaining to each vessel and (ii) charter brokerage fees payable to Blue Net Chartering GmbH & Co. KG (“Blue Net”) pursuant to the Agreement Regarding Charter Brokerage dated January 1, 2018 between Costamare Shipping and Blue Net.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, were $27.4 million and $26.0 million during the three-month periods ended September 30, 2018 and 2017, respectively.

General and Administrative Expenses

General and administrative expenses were $1.3 million and $1.5 million during the three-month periods ended September 30, 2018 and 2017, respectively and both include $0.63 million which is part of the annual fee that Costamare Services receives based on the Services Agreement.

Management Fees – related parties

Management fees paid to our managers pursuant to the Framework Agreement were $5.0 million during each of the three-month periods ended September 30, 2018 and 2017, respectively.

General and administrative expenses – non-cash component

General and administrative expenses – non-cash component were $1.0 million for the three-month period ended September 30, 2018, representing the value of the shares issued to Costamare Services on September 28, 2018, pursuant to the Services Agreement. For the three-month period ended September 30, 2017, the respective amount was $0.9 million, representing the fair value of the shares issued to Costamare Services on September 29, 2017, pursuant to the Services Agreement.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $1.8 million and $1.9 million during the three-month periods ended September 30, 2018 and 2017, respectively. During the three-month period ended September 30, 2018, two vessels underwent and completed their special survey and two were in process of completing their special survey. During the three-month period ended September 30, 2017, one vessel underwent and completed her special survey.

Depreciation

Depreciation expense decreased by 1.7% or $0.4 million, to $23.8 million during the three-month period ended September 30, 2018, from $24.2 million during the three-month period ended September 30, 2017. The decrease was mainly attributable to depreciation expense not charged during the three-month period ended September 30, 2018, due to the sale of two vessels during the third quarter of 2017 and the second quarter of 2018; partly off-set by the depreciation charged during the three-month period ended September 30, 2018, due to the acquisition of one secondhand vessel in fourth quarter of 2017 and six vessels in the second and third quarter of 2018.

Amortization of Prepaid Lease Rentals, net

Amortization of prepaid lease rentals, net was $2.0 million for each of the three-month periods ended September 30, 2018 and 2017, respectively.

Gain on sale / disposal of vessels

During the three-month period ended September 30, 2018, no vessel was sold. During the three-month period ended September 30, 2017, we recorded a net gain of $1.5 million from the sale of two vessels, the Mykonos and the Mandraki (which was classified as asset held for sale as at June 30, 2017).

Loss on vessel held for sale

During the three-month period ended September 30, 2018, we recorded a loss on vessel held for sale of $1.9 million representing the expected loss from sale for demolition of one of our vessels during the next twelve month period.

Interest Income

Interest income amounted to $0.8 million for each of the three-month periods ended September 30, 2018 and 2017, respectively.

Interest and Finance Costs

Interest and finance costs were $14.9 million and $18.0 million during the three-month periods ended September 30, 2018 and 2017, respectively. The decrease is mainly attributable to the decreased average loan balance during the three-month period ended September 30, 2018 compared to the three-month period ended September 30, 2017.

Equity Gain on Investments

During the three-month period ended September 30, 2018, we recorded an equity gain on investments of $3.9 million representing our share of the net gain of 18 jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015 (the “Framework Deed”), between the Company and a wholly-owned subsidiary on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”) on the other hand. During the three-month period ended September 30, 2017, we recorded an equity gain on investments of $1.6 million also relating to investments under the Framework Deed. The increase is mainly attributable to the income generated by certain newbuild vessels that were delivered from the shipyard during 2017 and the six-month period ended June 30, 2018 and commenced their charters.

Gain / (Loss) on Derivative Instruments

The fair value of our 13 interest rate derivative instruments which were outstanding as of September 30, 2018 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2018, the fair value of these 13 interest rate derivative instruments in aggregate amounted to a net asset of $10.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the three-month period ended September 30, 2018, a net gain of $0.5 million has been included in OCI and a net loss of $0.1 million has been included in Gain/ (Loss) on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended September 30, 2018.

Cash Flows

Three-month periods ended September 30, 2018 and 2017

Condensed cash flows Three-month period ended
September 30,
(Expressed in millions of U.S. dollars) 2017 2018
Net Cash Provided by Operating Activities $ 46.7  $ 38.8 
Net Cash Provided by / (Used in) Investing Activities $ 17.3  $ (48.6)
Net Cash Provided by / (Used in) Financing Activities $ (68.2) $ 4.7 
       

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended September 30, 2018, decreased by $7.9 million to $38.8 million, compared to $46.7 million for the three-month period ended September 30, 2017. The decrease is mainly attributable to the decreased cash from operations of $9.0 million, the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $5.2 million and the increased special survey costs of $2.5 million during the three-month period ended September 30, 2018 compared to the three-month period ended September 30, 2017; partly off-set by decreased payments for interest (including swap payments) during the period of $3.6 million.

Net Cash Provided by / (Used in) Investing Activities

Net cash used in investing activities was $48.6 million in the three-month period ended September 30, 2018, which mainly consisted of net payments in relation to the acquisition of four secondhand vessels and five newbuild vessels and payment for capital injection into one entity pursuant to the Framework Deed.

Net cash provided by investing activities was $17.3 million in the three-month period ended September 30, 2017. This amount mainly includes $17.0 million we received from the sale of two vessels and of $1.0 million in payments for working capital injected into certain entities pursuant to the Framework Deed.

Net Cash Provided by / (Used in) Financing Activities

Net cash provided by financing activities was $4.7 million in the three-month period ended September 30, 2018, which mainly consisted of (a) $18.0 million net proceeds we received relating to our debt financing agreements, (b) $4.9 million we paid for dividends to holders of our common stock for the second quarter of 2018 and (d) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock"), $2.1 million we paid for dividends to holders of our 8.50% Series C Cumulative Redeemable Perpetual Preferred Stock ("Series C Preferred Stock"), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock") and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (“Series E Preferred Stock") for the period from April 15, 2018 to July 14, 2018.

Net cash used in financing activities was $68.2 million in the three-month period ended September 30, 2017, which mainly consisted of (a) $57.6 million net payments relating to our debt financing agreements, (b)  $4.8 million we paid for dividends to holders of our common stock for the second quarter of 2017 and (c) $1.0 million we paid for dividends to holders of our Series B Preferred Stock, $2.1 million we paid for dividends to holders of our Series C Preferred Stock and $2.2 million we paid for dividends to holders of our Series D Preferred Stock, for the period from April 15, 2017 to July 14, 2017.

Nine-month period ended September 30, 2018 compared to the nine-month period ended September 30, 2017

During the nine-month periods ended September 30, 2018 and 2017, we had an average of 54.4 and 52.7 vessels, respectively, in our fleet. In the nine-month period ended September 30, 2018 we accepted delivery of the secondhand containerships Michigan, Trader, Megalopolis, Marathopolis, Maersk Kleven and Maersk Kotka with an aggregate capacity of 28,602 TEU and we sold the container vessel Itea with a capacity of 3,842 TEU. In the nine-month period ended September 30, 2017, we accepted delivery of the secondhand containerships Leonidio, Kyparissia and Maersk Kowloon with an aggregate capacity of 17,385 TEU and we sold the container vessels Romanos, Marina, Mandraki and Mykonos with an aggregate capacity of 18,057 TEU. In the nine-month periods ended September 30, 2018 and 2017, our fleet ownership days totaled 14,854 and 14,378 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

         
(Expressed in millions of U.S. dollars,
 Nine-month period ended
September 30,
    Percentage
except percentages) 2017 2018Change
 Change
             
         
Voyage revenue$311.8 $274.2 $(37.6) (12.1%)
Voyage expenses (2.0) (4.9) 2.9  145.0%
Voyage expenses – related parties (2.3) (2.3) -  - 
Vessels’ operating expenses (76.9) (80.2) 3.3  4.3%
General and administrative expenses (4.3) (4.1) (0.2) (4.7%)
Management fees – related parties (14.4) (14.5) 0.1  0.7%
General and administrative expenses - non-cash component (3.0) (3.1) 0.1  3.3%
Amortization of dry-docking and special survey costs (5.8) (5.2) (0.6) (10.3%)
Depreciation (72.7) (69.8) (2.9) (4.0%)
Amortization of prepaid lease rentals, net (6.4) (6.1) (0.3) (4.7%)
Loss on sale / disposal of vessels (4.8) (0.9) (3.9) (81.3%)
Loss on vessel held for sale -  (1.9) (1.9) n.m. 
Interest income 1.9  2.6  0.7  36.8%
Interest and finance costs (53.3) (44.2) (9.1) (17.1%)
Swaps’ breakage costs -  (1.2) 1.2  n.m. 
Equity gain on investments 2.5  9.1  6.6  264.0%
Other 0.6  0.2  (0.4) (66.7%)
Loss on derivative instruments (0.7) (0.2) (0.5) (71.4%)
Net Income$70.2 $47.5    
          


             
(Expressed in millions of U.S. dollars,
 Nine-month period ended
September 30,

    Percentage
except percentages) 2017 2018Change Change
             
Voyage revenue$311.8 $274.2 $(37.6) (12.1%)
Accrued charter revenue (8.5) (5.0) (3.5) (41.2%)
Voyage revenue adjusted on a cash basis$303.3 $269.2 $(34.1) (11.2%)
             
Vessels’ operational data Nine-month period ended
September 30,

    Percentage
  2017
 2018
Change Change
             
Average number of vessels 52.7  54.4  1.7  3.2%
Ownership days 14,378  14,854  476  3.3%
Number of vessels under dry-docking 4  15  11    
             

Voyage Revenue

Voyage revenue decreased by 12.1%, or $37.6 million, to $274.2 million during the nine-month period ended September 30, 2018, from $311.8 million during the nine-month period ended September 30, 2017. The decrease is mainly attributable to decreased charter rates and increased off-hire days for certain of our vessels and revenue not earned by four vessels sold for demolition in the third quarter of 2017 and the second quarter of 2018; partly off-set by revenue earned by four secondhand vessels acquired during the second and fourth quarter of 2017 and four vessels acquired during the second and third quarter of 2018. 

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), decreased by 11.2%, or $34.1 million, to $269.2 million during the nine-month period ended September 30, 2018, from $303.3 million during the nine-month period ended September 30, 2017. Accrued charter revenue for the nine-month periods ended September 30, 2018 and 2017, amounted to $5.0 million and $8.5 million, respectively.

Voyage Expenses

Voyage expenses were $4.9 million and $2.0 million for the nine-month periods ended September 30, 2018 and 2017, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $2.3 million for each of the nine-month periods ended September 30, 2018 and 2017. Voyage expenses – related parties represent (i) fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping and by Costamare Services pursuant to the Framework Agreement, the Services Agreement and the individual ship-management agreements pertaining to each vessel and (ii) charter brokerage fees payable to Blue Net pursuant to the Agreement Regarding Charter Brokerage dated January 1, 2018 between Costamare Shipping and Blue Net.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, were $80.2 million and $76.9 million during the nine-month periods ended September 30, 2018 and 2017, respectively.

General and Administrative Expenses

General and administrative expenses were $4.1 million and $4.3 million during the nine-month periods ended September 30, 2018 and 2017, respectively, and both include $1.9 million which is part of the annual fee that Costamare Services receives based on the Services Agreement.

Management Fees – related parties

Management fees paid to our managers pursuant to the Framework Agreement were $14.5 million and $14.4 million for the nine-month periods ended September 30, 2018 and 2017, respectively.

General and administrative expenses – non-cash component

General and administrative expenses – non-cash component for the nine-month period ended September 30, 2018 amounted to $3.1 million representing the value of the shares issued to Costamare Services on March 30, 2018, June 29 and September 28, 2018, pursuant to the Services Agreement. For the nine-month period ended September 30, 2017, the respective amount was $3.0 million, representing the fair value of the shares issued to Costamare Services on March 30, 2017, June 30 and September 29, 2017, pursuant to the Services Agreement.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $5.2 million and $5.8 million during the nine-month periods ended September 30, 2018 and 2017, respectively. During the nine-month period ended September 30, 2018, 13 vessels underwent and completed their special survey and two were in process of completing their special survey. During the nine-month period ended September 30, 2017, four vessels underwent and completed their special survey.

Depreciation

Depreciation expense decreased by 4.0% or $2.9 million, to $69.8 million during the nine-month period ended September 30, 2018, from $72.7 million during the nine-month period ended September 30, 2017. The decrease was mainly attributable to depreciation expense not charged during the nine-month period ended September 30, 2018, due to the sale of four vessels during the nine-month period ended September 30, 2017; partly off-set by the depreciation charged during the nine-month period ended September 30, 2018, due to the acquisition of four secondhand vessels during the year ended December 31, 2017 and the acquisition of six during the nine-month period ended September 30, 2018.

Amortization of Prepaid Lease Rentals, net

Amortization of prepaid lease rentals, net was $6.1 million during the nine-month period ended September 30, 2018. Amortization of prepaid lease rentals, net was $6.4 million during the nine-month period ended September 30, 2017.

Loss on sale / disposal of vessels

During the nine-month period ended September 30, 2018 we recorded a loss of $0.9 million from the sale of the vessel Itea, which was classified as Asset held for sale as at December 31, 2017. During the nine-month period ended September 30, 2017, we recorded an aggregate net loss of $4.2 million from the sale of the vessels Marina, Mandraki and the Mykonos and a loss of $0.6 million from the sale of the vessel Romanos which was classified as Asset held for sale as at December 31, 2016.

Loss on vessel held for sale

During the nine-month period ended September 30, 2018, we recorded a loss on vessel held for sale of $1.9 million representing the expected loss from sale for demolition of one of our vessels during the next twelve month period.

Interest Income

Interest income amounted to $2.6 million and $1.9 million for the nine-month periods ended September 30, 2018 and 2017, respectively.

Interest and Finance Costs

Interest and finance costs were $44.2 million and $53.3 million during the nine-month periods ended September 30, 2018 and 2017, respectively. The decrease is mainly attributable to the decreased average loan balance during the nine-month period ended September 30, 2018 compared to the nine-month period ended September 30, 2017.

Swaps Breakage Cost

During the nine-month period ended September 30, 2018, we terminated three interest rate derivative instruments that qualify for hedge accounting and we paid the counterparties breakage costs of $1.2 million.

Equity Gain on Investments

During the nine-month period ended September 30, 2018, we recorded an equity gain on investments of $9.1 million representing our share of the net gain of 18 jointly owned companies pursuant to the Framework Deed, between the Company and a wholly-owned subsidiary on the one hand, and York on the other hand. During the nine-month period ended September 30, 2017, we recorded an equity gain on investments of $2.5 million also relating to investments under the Framework Deed. The increase is mainly attributable to the income generated by certain newbuild vessels that were delivered from the shipyard during 2017 and the six-month period ended June 30, 2018 and commenced their charters.

Loss on Derivative Instruments

The fair value of our 13 interest rate derivative instruments which were outstanding as of September 30, 2018 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2018, the fair value of these 13 interest rate derivative instruments in aggregate amounted to a net asset of $10.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the nine-month period ended September 30, 2018, a net gain of $8.2 million has been included in OCI and a net loss of $0.1 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the nine-month period ended September 30, 2018.

 
Cash Flows
Nine-month periods ended September 30, 2018 and 2017
   
Condensed cash flows Nine-month period ended
September 30,
(Expressed in millions of U.S. dollars) 2017 2018
Net Cash Provided by Operating Activities $ 145.3  $ 105.8 
Net Cash Used in Investing Activities $ (33.6) $ (113.5)
Net Cash Used in Financing Activities $ (88.6) $ (56.4)
       

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the nine-month period ended September 30, 2018, decreased by $39.5 million to $105.8 million, compared to $145.3 million for the nine-month period ended September 30, 2017. The decrease is mainly attributable to the decreased cash from operations of $34.2 million, the increased special survey costs of $11.9 million during the nine-month period ended September 30, 2018 compared to the nine-month period ended September 30, 2017 and the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $5.1 million; partly off-set by  decreased payments for interest (including swap payments) during the period of $12.5 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $113.5 million in the nine-month period ended September 30, 2018, which mainly consisted of net payments relating to the acquisition of six secondhand vessels and five newbuild vessels, payments for capital injection into certain entities pursuant to the Framework Deed and proceeds we received from sale for scrap of one vessel.

Net cash used in investing activities was $33.6 million in the nine-month period ended September 30, 2017, which mainly consisted of payments for the acquisition of three secondhand vessels and payments for working capital injected into certain entities pursuant to the Framework Deed (net of dividend distributions we received); partly off-set by proceeds we received from the sale of four vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $56.4 million in the nine-month period ended September 30, 2018, which mainly consisted of (a) $130.2 million net payments relating to our debt financing agreements, (b) $111.2 million net proceeds we received from our public offering in January 2018, of 4.6 million shares of our Series E Preferred Stock, net of underwriting discounts and expenses incurred in the offering, (c) $14.1 million we paid for dividends to holders of our common stock for the fourth quarter of 2017, the first quarter of 2018 and the second quarter of 2018 and (d) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock, $6.6 million we paid for dividends to holders of our Series D Preferred Stock, for the periods from October 15, 2017 to January 14, 2018, January 15, 2018 to April 14, 2018 and April 15, 2018 to July 14, 2018 and $4.7 million we paid for dividends to holders of our Series E Preferred Stock, for the period from January 30, 2018 to April 14, 2018 and April 15, 2018 to July 14, 2018.

Net cash used in financing activities was $88.6 million in the nine-month period ended September 30, 2017, which mainly consisted of (a) $91.7 million we received from our follow-on offering in May 2017, net of underwriting discounts and expenses incurred in the offering, (b) $150.8 million net payments relating to our debt financing agreements, (c) $12.0 million we paid for dividends to holders of our common stock for the fourth quarter of 2016, the first quarter of 2017 and the second quarter of 2017 and (d) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock and $6.6 million we paid for dividends to holders of our Series D Preferred Stock, for the periods from October 15, 2016 to January 14, 2017, January 15, 2017 to April 14, 2017 and April 15, 2017 to July 14, 2017.

Change in the manner of presentation of certain items

Effective January 1, 2018, we adopted ASU No. 2016-15—Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments and ASU No. 2016-18—Statement of Cash Flows (Topic 230)—Restricted Cash. In order to conform to the current period presentation, we present comparatives in the condensed statement of cash flows as the new ASUs require.

Liquidity and Unencumbered Vessels

Cash and cash equivalents

As of September 30, 2018, we had a total cash liquidity of $154.8 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of October 24, 2018, the following vessels were free of debt.

    
Unencumbered Vessels
(Refer to fleet list for full details)
    
Vessel NameYear
Built
 TEU
Capacity
CMA CGM L’ETOILE2005 2,556
MICHIGAN2008 1,300
TRADER2008 1,300
MAERSK KLEVEN1996 8,044
MAERSK KOTKA1996 8,044
ELAFONISOS (*)1999 2,526
MONEMVASIA (*)1998 2,472
ARKADIA (*)2001 1,550
    

(*) Vessels acquired pursuant to the Framework Deed with York.

Conference Call details:

On Thursday, October 25, 2018 at 8:30 a.m. ET, Costamare’s management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or +1-412-317-9258 (from outside the US and the UK). Please quote “Costamare”. A replay of the conference call will be available until November 1, 2018. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088; and the access code required for the replay is: 10125429.

Live webcast:

There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com) under the “Investors” section. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Costamare Inc.

Costamare Inc. is one of the world’s leading owners and providers of containerships for charter. The Company has 44 years of history in the international shipping industry and a fleet of 79 containerships, with a total capacity of approximately 549,000 TEU, including five newbuild containerships currently under construction. Seventeen of our containerships have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock trade on the New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”, “CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.

Forward-Looking Statements

This earnings release contains “forward-looking statements”. In some cases, you can identify these statements by forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could” and “expect” and similar expressions. These statements are not historical facts but instead represent only Costamare’s belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare’s control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.’s most recent Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors”.

Company Contacts:

Gregory Zikos - Chief Financial Officer
Konstantinos Tsakalidis - Business Development

Costamare Inc., Monaco
Tel: (+377) 93 25 09 40
Email: ir@costamare.com

Fleet List
The table below provides additional information, as of October 24, 2018, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.

 

 
Vessel NameChartererYear
Built
Capacity
(TEU)
Current Daily
Charter Rate
(1)
(U.S. dollars)
Expiration of
Charter
(2)
1TRITON(i)(ii)Evergreen201614,424(*)March 2026
2TITAN(i)(ii)Evergreen201614,424(*)April 2026
3TALOS(i)(ii)Evergreen201614,424(*)July 2026
4TAURUS(i)(ii)Evergreen201614,424(*)August 2026
5THESEUS(i)(ii)Evergreen201614,424(*)August 2026
6CAPE AKRITAS(i)Evergreen201611,01028,000 June 2019(3)
7CAPE TAINARO(i)OOCL201711,01028,250March 2019
8CAPE KORTIA(i)Evergreen201711,01028,000July 2019(4)
9CAPE SOUNIO(i)ZIM201711,01030,700March 2019
10CAPE ARTEMISIO(i)Hapag Lloyd201711,01027,000 (net)May 2019
11COSCO GUANGZHOUCOSCO20069,46917,900March  2019
12COSCO NINGBOCOSCO20069,46917,900March  2019
13COSCO YANTIANCOSCO20069,46917,900April 2019(5)
14COSCO BEIJINGCOSCO20069,46917,900April 2019
15COSCO HELLASCOSCO20069,46917,900May 2019(6)
16MSC AZOV(ii)MSC20149,40343,000December 2026(7)
17MSC AJACCIO(ii)MSC20149,40343,000February 2027(7)
18MSC AMALFI(ii)MSC20149,40343,000March 2027(7)
19MSC ATHENS(ii)MSC20138,82742,000January 2026(8)
20MSC ATHOS(ii)MSC20138,82742,000February 2026(8)
21VALOREvergreen20138,82741,700April 2020
22VALUEEvergreen20138,82741,700April 2020
23VALIANTEvergreen20138,82741,700June 2020
24VALENCEEvergreen20138,82741,700July 2020
25VANTAGEEvergreen20138,82741,700September 2020
26NAVARINOPIL20108,531(*)February 2019
27MAERSK KLEVENMaersk19968,04417,500April 2021
28MAERSK KOTKAMaersk19968,04417,500April 2021
29MAERSK KOWLOONMaersk20057,47116,000June 2022
30MAERSK KAWASAKIMaersk19977,40312,100March 2019
31KURECOSCO19967,40316,350April 2019
32NILEDUTCH PANTHERNileDutch19977,40312,750November 2018
33MSC METHONIMSC20036,72429,000September 2021
34SEALAND NEW YORKMSC20006,64811,450(9)October 2019
35MAERSK KOBEMaersk20006,64816,000February 2019
36SEALAND WASHINGTONMaersk20006,648(*)March 2022(10)
37SEALAND MICHIGANMaersk20006,648(*)March 2022(10)
38SEALAND ILLINOISMaersk20006,648(*)March 2022(10)
39MAERSK  KOLKATAMaersk20036,64426,100March 2022(11)
40MAERSK KINGSTON (ex. MSC KINGSTON)Maersk20036,64426,100March 2022(11)
41MAERSK KALAMATAMaersk20036,64426,100March 2022(11)
42VENETIKO  Hapag Lloyd20035,92811,750November 2018
43ENSENADA (i)ONE20015,57616,000February 2019
44ZIM NEW YORKZIM20024,99212,650September 2019(12)
45ZIM SHANGHAIZIM20024,99212,650September 2019(12)
46PIRAEUS(*)20044,992(*)November 2018
47LEONIDIO(ii)Maersk20144,95714,200December 2024
48KYPARISSIA(ii)Maersk20144,95714,200November 2024
49MEGALOPOLISMaersk20134,957(*)July 2025
50MARATHOPOLISMaersk20134.957(*)July 2025
51OAKLAND EXPRESSHapag Lloyd20004,8908,800February 2019
52HALIFAX EXPRESSHapag Lloyd20004,8908,800February 2019
53SINGAPORE EXPRESSHapag Lloyd20004,8908,800February 2019
54ULSANMaersk20024,13210,900February 2019(13)
55POLAR ARGENTINA(i)(ii)Maersk20183,80019,700October 2024
56POLAR BRASIL(i)(ii)Maersk20183,80019,700January 2025
57LAKONIAEvergreen20042,58611,300January 2019
58CMA CGM L’ETOILECMA CGM20052,55612,250March 2019
59ELAFONISOS(i)MSC19992,526(*)January 2019
60AREOPOLISEvergreen20002,4749,850February 2019
61MONEMVASIA(i)Maersk19982,4729,250November  2021
62MESSINIEvergreen19972,45810,600February 2019
63MSC REUNIONMSC19922,0248,550August 2019
64MSC NAMIBIA IIMSC19912,0239,170July 2019
65MSC SIERRA IIMSC19912,0239,170June 2019
66MSC PYLOSMSC19912,0206,800January 2019
67NEAPOLISEvergreen20001,64510,700February 2019
68ARKADIA(i)Evergreen20011,5509,800April 2019(14)
69PROSPEREvergreen19961,50410,100January 2019
70MICHIGANMSC20081,3007,200September 2019
71TRADER-20081,300--
72ZAGORAMSC19951,1627,800May 2019
73PETALIDI(i)DELTA19941,162$170,000 (lump sum)October 2018
74LUEBECKMSC20011,0786,500January 2019
       

Newbuilds

 Vessel Name
ShipyardCapacity
(TEU)
ChartererExpected Delivery(15)
1YZJ2015-2057Jiangsu Yangzijiang
Shipbuilding Group
12,690Yang MingQ2 2020
2YZJ2015-2058Jiangsu Yangzijiang
Shipbuilding Group
12,690Yang MingQ3 2020
3YZJ2015-2059Jiangsu Yangzijiang
Shipbuilding Group
12,690Yang MingQ3 2020
4YZJ2015-2060Jiangsu Yangzijiang
Shipbuilding Group
12,690Yang MingQ2 2021
5YZJ2015-2061  Jiangsu Yangzijiang
Shipbuilding Group
12,690Yang MingQ2 2021
      

(1) Daily charter rates are gross, unless stated otherwise.

(2) Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.

(3) This charter rate will be earned by Cape Akritas from October 26, 2018. Until then the daily charter rate will be $26,000.

(4) This charter rate will be earned by Cape Kortia from November 13, 2019. Until then the daily charter rate will be in the mid twenty-thousand dollars.

(5) This charter rate will be earned by Cosco Yantian from October 27, 2018. Until then the daily charter rate will be $16,000.

(6) This charter rate will be earned by Cosco Hellas from November 7, 2018. Until then the daily charter rate will be $16,000.

(7) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $43,000 until the original earliest redelivery dates of the vessels (December 2, 2023-MSC Azov, February 1, 2024-MSC Ajaccio and March 16, 2024-MSC Amalfi). The charters will also be extended for 3 years.

(8) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $42,000 until the original earliest redelivery dates of the vessels (January 29, 2023-MSC Athens and February 24, 2023-MSC Athos). The charters will also be extended for 3 years.

(9) This charter rate will start on November 10, 2018.

(10) The daily rate for Sealand Washington, Sealand Michigan and Sealand Illinois will be a fixed rate until March 1, 2019. From March 1, 2019, the daily rate will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.

(11) This charter rate will be earned by Maersk Kolkata, Maersk Kingston and Maersk Kalamata until November 14, 2019, February 28, 2020 and April 12, 2020, respectively. From the aforementioned dates, the daily rate for each of the three vessels, will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.

(12) The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under its 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of Zim’s equity and approximately $8.2 million in interest bearing notes maturing in 2023. In May 2018, the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for a one year period at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for this fourth optional year has been determined at $12,650 per day.

(13) This charter rate will be earned by Ulsan from November 10, 2018. Until then the daily charter rate will be $12,200.

(14) This charter rate will be earned by Arkadia from October 31, 2018. Until then the daily charter rate will be $10,400.

(15) Based on latest shipyard construction schedule, subject to change.

(i) Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.

(ii) Denotes vessels subject to a sale and leaseback transaction. 

(*) Denotes charterer’s identity and/or current daily charter rates and/or charter expiration dates which are treated as confidential.

 
COSTAMARE INC.
Consolidated Statements of Income
     
  Nine-months ended September 30, Three-months ended September 30,
(Expressed in thousands of U.S. dollars, except share and per share amounts)
 2017 2018 2017 2018
             
         
REVENUES:        
Voyage revenue$311,815 $274,244 $101,274 $90,913 
         
EXPENSES:        
Voyage expenses (2,025) (4,894) (452) (1,857)
Voyage expenses – related parties (2,339) (2,340) (760) (752)
Vessels' operating expenses (76,875) (80,226) (26,028) (27,384)
General and administrative expenses (4,321) (4,080) (1,517) (1,295)
Management fees - related parties (14,355) (14,549) (4,968) (4,998)
General and administrative expenses – non-cash component (3,002) (3,098) (924) (971)
Amortization of dry-docking and special survey costs (5,780) (5,183) (1,869) (1,825)
Depreciation (72,677) (69,766) (24,162) (23,803)
Amortization of prepaid lease rentals, net (6,375) (6,095) (2,055) (2,054)
Gain/(Loss) on sale / disposal of vessels (4,856) (861) 1,514  - 
Loss on vessel held for sale -  (1,919) -  (1,919)
Foreign exchange gains / (losses) 32  (16) 1  2 
Operating income$119,242 $81,217 $40,054 $24,057 
         
OTHER INCOME / (EXPENSES):        
Interest income$1,869 $2,634 $753 $756 
Interest and finance costs (53,300) (44,248) (17,962) (14,870)
Swaps’ breakage cost -  (1,234) -  - 
Equity gain on investments 2,532  9,114  1,645  3,915 
Other 545  231  (61) 136 
Gain/(Loss) on derivative instruments (682) (207) (286) 46 
Total other income / (expenses)$(49,036)$(33,710)$(15,911)$(10,017)
Net Income$70,206 $47,507 $24,143 $14,040 
Earnings allocated to Preferred Stock (15,797) (22,686) (5,324) (7,904)
Net Income available to common stockholders$54,409 $24,821 $18,819 $6,136 
         
         
Earnings per common share, basic and diluted$0.55 $0.23 $0.18 $0.06 
Weighted average number of shares, basic and diluted 98,123,877  109,870,776  106,528,748  110,913,448 
             


 
COSTAMARE INC.
Consolidated Balance Sheets
     
  As of December 31, As of September 30,
(Expressed in thousands of U.S. dollars) 2017 2018
ASSETS   (Unaudited)
CURRENT ASSETS:    
Cash and cash equivalents$178,986 $117,910
Restricted cash 7,238  5,361
Accounts receivable 1,324  3,351
Inventories 9,662  10,184
Due from related parties 5,273  3,532
Fair value of derivatives 112  3,520
Insurance claims receivable 2,091  3,146
Prepaid lease rentals 8,752  8,752
Asset held for sale 7,315  7,433
Accrued charter revenue 185  -
Prepayments and other 5,697  4,253
Total current assets$226,635 $167,442
FIXED ASSETS, NET:    
Capital leased assets$415,665 $405,371
Vessels and advances, net 1,579,509  1,658,232
Total fixed assets, net$1,995,174 $2,063,603
NON-CURRENT ASSETS:    
Equity method investments$161,897 $165,833
Prepaid lease rentals, non-current 42,918  36,373
Deferred charges, net 15,429  24,927
Accounts receivable, non-current 1,800  11,712
Restricted cash 32,661  31,531
Fair value of derivatives, non-current 4,358  6,707
Other non-current assets 9,426  9,807
Total assets$2,490,298 $2,517,935
LIABILITIES AND STOCKHOLDERS’ EQUITY    
CURRENT LIABILITIES:    
Current portion of long-term debt$206,318 $142,191
Accounts payable 6,314  6,749
Due to related parties 203  144
Capital lease obligations 32,874  33,930
Accrued liabilities 10,755  14,689
Unearned revenue 15,310  12,550
Fair value of derivatives 3,307  -
Other current liabilities 1,627  1,818
Total current liabilities$276,708 $212,071
NON-CURRENT LIABILITIES     
Long-term debt, net of current portion$644,662 $632,455
Capital lease obligations, net of current portion 339,332  313,752
Unearned revenue, net of current portion 11,057  5,823
Total non-current liabilities$995,051 $952,030
COMMITMENTS AND CONTINGENCIES    
STOCKHOLDERS’ EQUITY:    
Preferred stock$- $-
Common stock 11  11
Additional paid-in capital 1,175,774  1,308,620
Retained earnings 43,723  37,963
Accumulated other comprehensive income / (loss) (969) 7,240
Total stockholders’ equity$1,218,539 $1,353,834
Total liabilities and stockholders’ equity$2,490,298 $2,517,935
      

 

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