Costamare Inc. Reports Results for the Third Quarter and Nine-Month Period Ended September 30, 2015
ATHENS, GREECE -- (Marketwired) -- 10/21/15 -- Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the third quarter and nine months ended September 30, 2015.
- Voyage revenues of $124.0 million and $368.1 million for the three and the nine months ended September 30, 2015, respectively.
- Voyage revenues adjusted on a cash basis of $124.7 million and $370.1 million for the three and nine months ended September 30, 2015, respectively.
- Adjusted EBITDA of $88.7 million and $262.0 million for the three and nine months ended September 30, 2015, respectively.
- Net income of $34.8 million and $105.4 million for the three and nine months ended September 30, 2015, respectively.
- Net income available to common stockholders of $29.5 million or $0.39 per share and $92.8 million or $1.24 per share for the three and nine months ended September 30, 2015, respectively.
- Adjusted Net income available to common stockholders of $34.6 million or $0.46 per share and $97.6 million or $1.30 per share for the three and nine months ended September 30, 2015, respectively.
See "Financial Summary" and "Non-GAAP Measures" below for additional detail.
New Business Developments
- In August 2015, together with York Capital, we agreed to acquire the 2001-built, 1,550 TEU containership Arkadia for a price of $6.0 million. The Company holds a 49% equity percentage in the vessel owning entity. The vessel was delivered on September 9, 2015. The Company agreed to charter the vessel to Evergreen, for a period of two years at a daily rate of $10,600.
- In October 2015, together with York Capital, we agreed to acquire the 1998-built, 2,472 TEU containership Helgoland Trader for a price of $6.5 million. The Company holds a 49% equity percentage in the vessel owning entity. The vessel is expected to be delivered not later than April 30, 2016. The vessel is currently on charter to Maersk at a daily rate of $8,750.
- The Company entered into the following charter arrangements:
- Exercised the options to extend for one year the charters of the 2002-built 4,992 TEU containerships Zim New York and Zim Shanghai with Zim. The daily rate has been determined at $14,534 starting from October 1, 2015.
- Agreed to extend the charter of the 2004-built, 4,992 TEU containership Zim Piraeus with Zim for a period of minimum 9 and maximum 13 months starting from October 31, 2015 at a daily rate of $12,500.
- Agreed to extend the charter of the 2001-built, 1,078TEU containership Stadt Luebeck with CMA CGM for a period of minimum 5.5 and maximum 12 months starting from September 22, 2015 at a daily rate of $7,400 or $8,000 per day depending on the vessel's trading pattern. Currently the vessel is earning $8,000 per day.
- Agreed to extend the charter of the 1994-built, 1,162TEU containership Petalidi with CMA CGM for a period of minimum 8 and maximum 12 months starting from October 3, 2015 at a daily rate of $7,600.
- Agreed to extend the charter of the 1998-built, 3,842TEU containership MSC Itea with MSC for a period of minimum 6 and maximum 8 months starting from August 7, 2015 at a daily rate of $10,000.
- Agreed to extend the charter of the 1991-built, 3,351TEU containership Karmen with Evergreen for a period of minimum 6 and maximum 9 months starting from September 21, 2015 at a daily rate of $11,000.
- Agreed to extend the charter of the 2003-built, 5,928 TEU containership Venetiko with OOCL for a period of minimum 40 and maximum 150 days starting from October 15, 2015 at a daily rate of $10,000.
- Agreed to extend the charter of the 1996-built, 1,504TEU containership Prosper with Sea Consortium for a period of minimum 3 and maximum 6 months starting from November 15, 2015 at a daily rate of $8,400.
- Fixed the 1992-built, 3,351TEU containership Marina on a trip charter for a voyage from the Mediterranean to the Far East. Subsequently agreed to charter the vessel with Evergreen for a period of minimum 6 and maximum 9 months starting from November 7, 2015 at a daily rate of $8,800.
Dividend Announcements
- On October 1, 2015, 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 and a dividend of $0.546875 per share on our Series D Preferred Stock which were paid on October 15, 2015 to holders of record on October 14, 2015.
- On October 1, 2015, we declared a dividend for the third quarter ended September 30, 2015, of $0.29 per share on our common stock, payable on November 4, 2015, to stockholders of record on October 21, 2015. This will be the Company's twentieth consecutive quarterly dividend since it commenced trading on the New York Stock Exchange.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
"During the third quarter of the year, the Company continued to deliver positive results.
We have opportunistically acquired with equity two secondhand ships with time charters in place. At the same time we are actively looking for new opportunities, either in the second hand, or in the newbuildings market.
Regarding market conditions, charter rates and asset values have been under pressure, as a result of weak demand.
We continue to grow in a low asset value environment, which provides opportunities and upside for healthy and well capitalized players."
Financial Summary
Nine-month period ended Three-month period ended
September 30, September 30,
------------------------- -------------------------
(Expressed in thousands
of U.S. dollars, except
share and per share
data): 2014 2015 2014 2015
------------ ------------ ------------ ------------
Voyage revenue $ 363,129 $ 368,102 $ 124,726 $ 124,033
Accrued charter revenue
(1) $ 6,241 $ 2,029 $ 1,120 $ 643
Voyage revenue adjusted
on a cash basis (2) $ 369,370 $ 370,131 $ 125,846 $ 124,676
Adjusted EBITDA (3) $ 260,461 $ 262,018 $ 87,021 $ 88,690
Adjusted Net Income
available to common
stockholders (3) $ 92,139 $ 97,579 $ 28,103 $ 34,569
Weighted Average number
of shares 74,800,000 74,952,340 74,800,000 75,100,826
Adjusted Earnings per
share (3) $ 1.23 $ 1.30 $ 0.38 $ 0.46
EBITDA (3) $ 246,546 $ 260,964 $ 94,136 $ 84,876
Net Income $ 84,287 $ 105,436 $ 37,074 $ 34,823
Net Income available to
common stockholders $ 75,456 $ 92,799 $ 33,962 $ 29,499
Weighted Average number
of shares 74,800,000 74,952,340 74,800,000 75,100,826
Earnings per share $ 1.01 $ 1.24 $ 0.45 $ 0.39
(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, adjusted earnings per share, EBITDA and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income available to common stockholders to EBITDA and adjusted EBITDA below.
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-month and nine-month periods ended September 30, 2015 and 2014. 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, (iii) Adjusted Earnings per share, (iv) EBITDA and (v) Adjusted EBITDA.
Reconciliation of Net Income to Adjusted Net Income available to common
stockholdersand Adjusted Earnings per Share
Nine-month period ended Three-month period ended
September 30, September 30,
(Expressed in thousands
of U.S. dollars, except
share and per share
data) 2014 2015 2014 2015
----------- ----------- ----------- -----------
Net Income $ 84,287 $ 105,436 $ 37,074 $ 34,823
Earnings allocated to
Preferred Stock (8,831) (12,637) (3,112) (5,324)
----------- ----------- ----------- -----------
Net Income available to
common stockholders 75,456 92,799 33,962 29,499
Accrued charter revenue 6,241 2,029 1,120 643
Gain on sale / disposal
of vessels (2,543) - (5,446) -
Swaps breakage cost 10,192 - - -
Unrealized loss from swap
option agreement held by
a jointly owned company
with York included in
equity loss on
investments 4,905 585 190 145
General and
administrative expenses
- non-cash component - 7,219 - 1,836
Amortization of prepaid
lease rentals 2,768 3,726 1,256 1,256
Realized Loss on Euro/USD
forward contracts (1) 63 2,729 63 775
(Gain) / Loss on
derivative instruments
(1) (4,943) (11,508) (3,042) 415
----------- ----------- ----------- -----------
Adjusted Net income
available to common
stockholders $ 92,139 $ 97,579 $ 28,103 $ 34,569
=========== =========== =========== ===========
Adjusted Earnings per
Share $ 1.23 $ 1.30 $ 0.38 $ 0.46
=========== =========== =========== ===========
Weighted average number
of shares 74,800,000 74,952,340 74,800,000 75,100,826
=========== =========== =========== ===========
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, loss on sale/disposal of vessels, realized (gain) /loss on Euro/USD forward contracts, swaps breakage costs, unrealized loss from a swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, General and administrative expenses - non-cash component, amortization of prepaid lease rentals 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 are reflected as deductions to adjusted net income. Charges negatively impacting net income are reflected as increases to adjusted net income.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Nine-month period ended Three-month period ended
September 30, September 30,
------------------------ ------------------------
(Expressed in thousands
of U.S. dollars) 2014 2015 2014 2015
----------- ----------- ----------- -----------
Net Income $ 84,287 $ 105,436 $ 37,074 $ 34,823
Interest and finance
costs 75,601 71,387 27,239 21,644
Interest income (531) (1,053) (240) (321)
Depreciation 78,845 76,034 27,027 25,623
Amortization of prepaid
lease rentals 2,768 3,726 1,256 1,256
Amortization of dry-
docking and special
survey costs 5,576 5,434 1,780 1,851
---------- ---------- ---------- ----------
EBITDA 246,546 260,964 94,136 84,876
---------- ---------- ---------- ----------
Accrued charter revenue 6,241 2,029 1,120 643
Gain on sale / disposal
of vessels (2,543) - (5,446) -
Swaps breakage cost 10,192 - - -
Unrealized loss from swap
option agreement held by
a jointly owned company
with York included in
equity loss on
investments 4,905 585 190 145
General and
administrative expenses
- non-cash component - 7,219 - 1,836
Realized Loss on Euro/USD
forward contracts 63 2,729 63 775
(Gain) / Loss on
derivative instruments (4,943) (11,508) (3,042) 415
----------- ----------- ----------- -----------
Adjusted EBITDA $ 260,461 $ 262,018 $ 87,021 $ 88,690
=========== =========== =========== ===========
EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease rentals, depreciation and amortization of deferred dry-docking and special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease rentals, depreciation, amortization of deferred dry-docking and special survey costs, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, loss on sale / disposal of vessels, realized gain / (loss) on Euro / USD forward contracts, swaps breakage costs, unrealized loss from swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, General and administrative expenses - non-cash component and non-cash changes in fair value of derivatives. "Accrued charter revenue" is attributed to the time difference between the revenue recognition and the cash collection. However, EBITDA and Adjusted EBITDA are not recognized measurements under U.S. GAAP. We believe that the presentation of EBITDA and Adjusted EBITDA 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 EBITDA and Adjusted EBITDA are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that EBITDA and Adjusted EBITDA are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of EBITDA and Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating EBITDA and Adjusted EBITDA, 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 EBITDA and Adjusted EBITDA 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 are reflected as deductions to adjusted EBITDA. Charges negatively impacting net income are reflected as increases to adjusted EBITDA.
Results of Operations
Three-month period ended September 30, 2015 compared to the three-month period ended September 30, 2014
During the three-month periods ended September 30, 2015 and 2014, we had an average of 55.0 vessels in our fleet. In the three-month period ended September 30, 2015, pursuant to the Framework Agreement with York, a jointly-owned vessel entity accepted delivery of the secondhand vessel Arkadia with a TEU capacity of 1,550. In the three-month period ended September 30, 2014, we sold the vessels MSC Kyoto and Akritas with an average TEU capacity of 7,028. Furthermore, pursuant to the Framework Agreement with York, a jointly-owned vessel entity accepted delivery of the secondhand vessel Elafonisos with a TEU capacity of 2,526. In the three-month periods ended September 30, 2015 and 2014, our fleet ownership days totaled 5,060 and 5,058 days, respectively. Ownership days are the primary driver 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
except percentages) September 30, Percentage
------------------------
2014 2015 Change Change
----------- ----------- ----------- ----------
Voyage revenue $ 124.7 $ 124.0 $ (0.7) (0.6%)
Voyage expenses (0.8) (0.9) 0.1 12.5%
Voyage expenses - related
parties (0.9) (0.9) - -
Vessels' operating
expenses (30.5) (28.8) (1.7) (5.6%)
General and
administrative expenses (2.0) (1.4) (0.6) (30.0%)
Management fees - related
parties (4.9) (4.9) - -
General and
administrative expenses
- non-cash component - (1.8) 1.8 100.0%
Amortization of dry-
docking and special
survey costs (1.8) (1.9) 0.1 5.6%
Depreciation (27.0) (25.6) (1.4) (5.2%)
Amortization of prepaid
lease rentals (1.2) (1.2) - -
Gain on sale / disposal
of vessels 5.4 - (5.4) (100.0%)
Foreign exchange gains/
(losses) 0.1 (0.2) (0.3) (300.0%)
Interest income 0.2 0.3 0.1 50.0%
Interest and finance
costs (27.2) (21.6) (5.6) (20.6%)
Equity gain on
investments - 0.1 0.1 100.0%
Gain / (Loss) on
derivative instruments 3.0 (0.4) (3.4) (113.3%)
----------- -----------
Net Income $ 37.1 $ 34.8
----------- -----------
(Expressed in millions of
U.S. dollars, Three-month period
except percentages) ended September 30, Percentage
-----------------------
2014 2015 Change Change
----------- -----------
Voyage revenue $ 124.7 $ 124.0 $ (0.7) (0.6%)
Accrued charter revenue 1.1 0.7 (0.4) (36.4%)
----------- -----------
Voyage revenue adjusted on
a cash basis $ 125.8 $ 124.7 $ (1.1) (0.9%)
=========== ===========
Three-month period
Vessels operational data ended September 30, Percentage
-----------------------
2014 2015 Change Change
----------- -----------
Average number of vessels 55.0 55.0 - -
Ownership days 5,058 5,060 2 -
Number of vessels under
dry-docking 2 4 2
Voyage Revenue
Voyage revenue decreased by 0.6%, or $0.7 million, to $124.0 million during the three-month period ended September 30, 2015, from $124.7 million during the three-month period ended September 30, 2014. This decrease was mainly due to (i) increased off-hire days, mainly due to scheduled dry-dockings during the three-month period ended September 30, 2015, compared to the three-month period ended September 30, 2014, (ii) by revenue not earned by vessels sold for demolition during the three-month period ended September 30, 2014; partly offset by increased charter rates in certain of our vessels during the three-month period ended September 30, 2015, compared to the three-month period ended September 30, 2014 and the revenue earned by one secondhand vessel delivered to us during the three-month period ended December 31, 2014.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 0.9%, or $1.1 million, to $124.7 million during the three-month period ended September 30, 2015, from $125.8 million during the three-month period ended September 30, 2014. This decrease was mainly due to (i) increased off-hire days, mainly due to scheduled dry-dockings during the three-month period ended September 30, 2015, compared to the three-month period ended September 30, 2014, (ii) by revenue not earned by vessels sold for demolition during the three-month period ended September 30, 2014; partly offset by increased charter rates in certain of our vessels during the three-month period ended September 30, 2015, compared to the three-month period ended September 30, 2014 and the revenue earned by one secondhand vessel delivered to us during the three-month period ended December 31, 2014.
Voyage Expenses
Voyage expenses were $0.9 million, during the three-month period ended September 30, 2015 and $0.8 million during the three-month period ended September 30, 2014. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.
Voyage Expenses - related parties
Voyage expenses - related parties were $0.9 million during the three-month periods ended September 30, 2015 and 2014, and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our group management agreement.
Vessels' Operating Expenses
Vessels' operating expenses, which include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 5.6%, or $1.7 million, to $28.8 million during the three-month period ended September 30, 2015, from $30.5 million during the three-month period ended September 30, 2014.
General and Administrative Expenses
General and administrative expenses were decreased by 30.0%, or $0.6 million, to $1.4 million during the three-month period ended September 30, 2015, from $2.0 million during the three-month period ended September 30, 2014. General and administrative expenses for the three-month period ended September 30, 2015, included $0.63 million which is part of the annual fee that our manager receives based on the amended and restated group management agreement, effective as of January 1, 2015. For the three-month period ended September 30, 2014 this amount was $0.25 million.
Management Fees - related parties
Management fees paid to our managers were $4.9 million during the three-month periods ended September 30, 2015 and 2014.
General and Administrative expenses - non-cash component
General and administrative expenses - non-cash component for the three-month period ended September 30, 2015, amounted to $1.8 million, representing the value of the shares issued to our manager on September 30, 2015, pursuant to the amended and restated group management agreement, effective as of January 1, 2015. No amounts were incurred in the 2014 period.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $1.9 million for the three-month period ended September 30, 2015 and $1.8 million for the three-month period ended September 30, 2014. During the three-month period ended September 30, 2015, four vessels underwent and completed their special survey. During the three-month period ended September 30, 2014, two vessels underwent and completed their special survey.
Depreciation
Depreciation expense decreased by 5.2%, or $1.4 million, to $25.6 million during the three-month period ended September 30, 2015, from $27.0 million during the three-month period ended September 30, 2014. The decrease was mainly attributable to a change in the estimated scrap value of vessels, which had a favorable effect of $1.4 million for the three-month period ended September 30, 2015.
Amortization of Prepaid Lease Rentals
Amortization of the prepaid lease rentals were $1.2 million during the three-month periods ended September 30, 2015 and 2014.
Gain on Sales / Disposals of Vessels
During the three-month period ended September 30, 2014 we recorded a gain of $5.4 million from the sale of two vessels.
Foreign Exchange Gains/ (Losses)
Foreign exchange losses were $0.2 million during the three-month period ended September 30, 2015. Foreign exchange gains were $0.1 million during the three-month period September 30, 2014.
Interest Income
Interest income for the three-month periods ended September 30, 2015 and 2014, amounted to $0.3 million and $0.2 million, respectively.
Interest and Finance Costs
Interest and finance costs decreased by 20.6%, or $5.6 million, to $21.6 million during the three-month period ended September 30, 2015, from $27.2 million during the three-month period ended September 30, 2014. The decrease was partly attributable to the decreased loan interest expense charged to the consolidated statement of income resulting from the decrease in the outstanding loan amount.
Equity Gain on Investments
The equity gain on investments of $0.1 million for the three-month period ended September 30, 2015, represents our share of the net gains of sixteen jointly owned companies pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of these companies. The net gain of $0.1 million includes an unrealized loss of $0.1 million deriving from a swap option agreement entered into by a jointly-owned company.
Gain / (Loss) on Derivative Instruments
The fair value of our interest rate derivative instruments which were outstanding as of September 30, 2015, equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2015, the fair value of these interest rate derivative instruments in aggregate amounted to a liability of $67.0 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, 2015, a net loss of $3.6 million has been included in OCI and a net loss of $0.5 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, 2015.
Cash Flows
Three-month periods ended September 30, 2015 and 2014
Three-month period ended
Condensed cash flows September 30,
--------------------------------
(Expressed in millions of U.S. dollars) 2014 2015
--------------- ---------------
Net Cash Provided by Operating Activities $ 65.8 $ 59.3
Net Cash Provided by / (Used in) Investing
Activities $ 13.9 $ (9.2)
Net Cash Used in Financing Activities $ (88.9) $ (75.5)
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended September 30, 2015, decreased by $6.5 million to $59.3 million, compared to $65.8 million for the three-month period ended September 30, 2014. The decrease was primarily attributable to 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 $9.0 million, increased special survey costs of $3.0 million and decreased cash from operations of $1.1 million; partly offset by the decreased payments for interest (including swap payments) during the period of $2.5 million.
Net Cash Provided by / (Used in) Investing Activities
Net cash used in investing activities was $9.2 million in the three-month period ended September 30, 2015, which mainly consisted of $4.3 million for an advance payment for the construction of one newbuild vessel, ordered pursuant to the Framework Agreement with York and $3.2 million, paid for the acquisition of a secondhand vessel pursuant to the Framework Agreement.
Net cash provided by investing activities was $13.9 million in the three-month period ended September 30, 2014, which mainly consisted of: (a) $0.8 million payments (net of $3.7 million we received as a dividend distribution) associated with the equity investments pursuant to the Framework Agreement with York, which range from 25% to 49% in jointly-owned companies, and (b) a $15.3 million payment we received from the sale for scrap of MSC Kyoto and Akritas.
Net Cash Used in Financing Activities
Net cash used in financing activities was $75.5 million in the three-month period ended September 30, 2015, which mainly consisted of (a) $49.5 million of indebtedness that we repaid, (b) $3.4 million we repaid relating to our sale and leaseback agreements (c) $21.8 million we paid for dividends to holders of our common stock for the second quarter of 2015, (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 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock ("Series C Preferred Stock"), both for the period from April 15, 2015 to July 14, 2015 and $1.5 million we paid for dividends to holders of our 8.750% Series D Cumulative Redeemable Perpetual Preferred Stock ("Series D Preferred Stock") for the period from May 13, 2015 to July 14, 2015.
Net cash used in financing activities was $88.9 million in the three-month period ended September 30, 2014, which mainly consisted of: (a) $56.0 million of indebtedness that we repaid, (b) $3.2 million we repaid relating to our sale and leaseback agreements, (c) $20.9 million we paid for dividends to holders of our common stock for the second quarter of 2014, and (d) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (the "Series B Preferred Stock") and $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (the "Series C Preferred Stock"), in both cases for the period from April 15, 2014 to July 14, 2014.
Results of Operations
Nine-month period ended September 30, 2015, compared to the nine-month period ended September 30, 2014
During the nine-month period ended September 30, 2015 and 2014, we had an average of 55.0 and 54.6 vessels, respectively in our fleet. In the nine-month period ended September 30, 2015, pursuant to the Framework Agreement with York, a jointly-owned vessel entity accepted delivery of the secondhand vessel Arkadia with a TEU capacity of 1,550. In the nine-month period ended September 30, 2014, we accepted delivery of the newbuild vessels MSC Azov, MSC Ajaccio and MSC Amalfi with an aggregate TEU capacity of 28,209 TEU and the secondhand vessels Neapolis and Areopolis with an aggregate TEU capacity of 4,119 and we sold the vessels Konstantina, MSC Kyoto and Akritas with an aggregate TEU capacity of 10,379. Furthermore, pursuant to the Framework Agreement with York, a jointly-owned vessel entity accepted delivery of the secondhand vessel Elafonisos with a TEU capacity of 2,526 TEU. In the nine-month period ended September 30, 2015 and 2014, our fleet ownership days totaled 15,015 and 14,903 days, respectively. Ownership days are the primary driver 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
except percentages) ended September 30, Percentage
------------------------
2014 2015 Change Change
----------- -----------
Voyage revenue $ 363.1 $ 368.1 $ 5.0 1.4%
Voyage expenses (2.6) (1.9) (0.7) (26.9%)
Voyage expenses - related
parties (2.7) (2.8) 0.1 3.7%
Vessels' operating
expenses (90.4) (88.6) (1.8) (2.0%)
General and administrative
expenses (4.5) (4.1) (0.4) (8.9%)
Management fees - related
parties (14.2) (14.6) 0.4 2.8%
General and administrative
expenses - non-cash
component - (7.2) 7.2 100.0%
Amortization of dry-
docking and special
survey costs (5.6) (5.4) (0.2) (3.6%)
Depreciation (78.8) (76.0) (2.8) (3.6%)
Amortization of prepaid
lease rentals (2.8) (3.7) 0.9 32.1%
Gain on sale / disposal of
vessels 2.5 - (2.5) (100.0%)
Interest income 0.5 1.1 0.6 120.0%
Interest and finance costs (75.6) (71.4) (4.2) (5.6%)
Swaps breakage cost (10.2) - (10.2) (100.0%)
Equity loss on investments (2.2) - (2.2) (100.0%)
Other 2.9 0.4 (2.5) (86.2%)
Gain on derivative
instruments 4.9 11.5 6.6 134.7%
----------- -----------
Net Income $ 84.3 $ 105.4
----------- -----------
(Expressed in millions of
U.S. dollars, except Nine-month period
percentages) ended September 30, Percentage
------------------------
2014 2015 Change Change
----------- -----------
Voyage revenue $ 363.1 $ 368.1 $ 5.0 1.4%
Accrued charter revenue 6.2 2.0 (4.2) (67.7%)
----------- -----------
Voyage revenue adjusted on
a cash basis $ 369.3 $ 370.1 $ 0.8 0.2%
=========== ===========
Nine-month period ended
Vessels operational data September 30, Percentage
-----------------------
2014 2015 Change Change
---------- ----------
Average number of vessels 54.6 55.0 0.4 0.7%
Ownership days 14,903 15,015 112 0.8%
Number of vessels under
dry-docking 5 7 2
Voyage Revenue
Voyage revenue increased by 1.4%, or $5.0 million, to $368.1 million during the nine-month period ended September 30, 2015, from $363.1 million during the nine-month period ended September 30, 2014. This increase was mainly attributable to (i) revenue earned by the three newbuild vessels and three secondhand vessels delivered to us during the year ended December 31, 2014; partly offset by (ii) increased off-hire days, mainly due to scheduled dry-dockings during the nine-month period ended September 30, 2015, compared to the nine-month period ended September 30, 2014, and (iii) revenue not earned by vessels which were sold for demolition during the nine-month period ended December 31, 2014.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 0.2%, or $0.8 million, to $370.1 million during the nine-month period ended September 30, 2015, from $369.3 million during the nine-month period ended September 30, 2014. This increase was mainly attributable to (i) revenue earned by the three newbuild vessels and three secondhand vessels delivered to us during the year ended December 31, 2014; partly offset by (ii) increased off-hire days, mainly due to scheduled dry-dockings during the nine-month period ended September 30, 2015, compared to the nine-month period ended September 30, 2014, and (iii) revenue not earned by vessels which were sold for demolition during the nine-month period ended December 31, 2014.
Voyage Expenses
Voyage expenses decreased by 26.9%, or $0.7 million, to $1.9 million during the nine-month period ended September 30, 2015, from $2.6 million during the nine-month period ended September 30, 2014. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.
Voyage Expenses - related parties
Voyage expenses - related parties were $2.8 million and $2.7 million during the nine-month periods ended September 30, 2015 and 2014, respectively and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our group management agreement.
Vessels' Operating Expenses
Vessels' operating expenses, which also includes the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 2.0% or $1.8 million to $88.6 million during the nine-month period ended September 30, 2015, from $90.4 million during the nine-month period ended September 30, 2014.
General and Administrative Expenses
General and administrative expenses decreased by 8.9% or $0.4 million, to $4.1 million during the nine-month period ended September 30, 2015, from $4.5 million during the nine-month period ended September 30, 2014. General and administrative expenses for the nine-month period ended September 30, 2015, included $1.9 million which is part of the annual fee that our manager receives based on the amended and restated group management agreement, effective as of January 1, 2015. For the nine-month period ended September 30, 2014 this amount was $0.75 million.
Management Fees - related parties
Management fees paid to our managers increased by 2.8%, or $0.4 million, to $14.6 million during the nine-month period ended September 30, 2015, from $14.2 million during the nine-month period ended September 30, 2014. The increase was primarily attributable to (i) the upward adjustment by 4% of the management fee for each vessel (effective January 1, 2015), as provided under our group management agreement, and (ii) the increased average number of vessels during the nine-month period ended September 30, 2015, compared to the nine-month period ended September 30, 2014.
General and Administrative expenses - non-cash component
General and administrative expenses - non-cash component for the nine-month period ended September 30, 2015, amounted to $7.2 million, representing the value of the shares issued to our manager on March 31, 2015, on June 30, 2015 and on September 30, 2015, pursuant to the amended and restated group management agreement, effective as of January 1, 2015. No amounts were incurred in the 2014 period.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs for the nine-month periods ended September 30, 2015 and 2014, were $5.4 million and $5.6 million, respectively. During the nine-month period ended September 30, 2014, five vessels, underwent and completed their special survey. During the nine-month period ended September 30, 2015, seven vessels, underwent and completed their special survey.
Depreciation
Depreciation expense decreased by 3.6%, or $2.8 million, to $76.0 million during the nine-month period ended September 30, 2015, from $78.8 million during the nine-month period ended September 30, 2014. The decrease was mainly attributable to the depreciation expense not charged for the vessels sold for demolition during the year ended December 31, 2014 and to a change in the estimated scrap value of vessels, which had a favorable effect of $4.1 million for the nine-month period ended September 30, 2015; partly offset by the depreciation expense charged for the three newbuild and three secondhand vessels delivered to us during the year ended December 31, 2014.
Amortization of Prepaid Lease Rentals
Amortization of the prepaid lease rentals were $3.7 million and $2.8 million during the nine-month periods ended September 30, 2015 and 2014, respectively.
Gain on Sale/Disposal of Vessels
During the nine-month period ended September 30, 2014, we recorded a net gain of $2.5 million from the sale of three vessels.
Interest Income
During the nine-month periods ended September 30, 2015 and 2014, interest income was $1.1 million and $0.5 million, respectively.
Interest and Finance Costs
Interest and finance costs decreased by 5.6%, or $4.2 million, to $71.4 million during the nine-month period ended September 30, 2015, from $75.6 million during the nine-month period ended September 30, 2014. The decrease was partly attributable to the decreased loan interest expense charged to the consolidated statement of income resulting from the decrease in the outstanding loan amount, a reduction in the write off of finance costs relating to loan refinancing in the 2015 period; partially offset by the fact that the 2014 period benefited from the capitalization of interest associated with the delivery of vessels during that period, which did not recur during 2015.
Equity Loss on Investments
During the nine-month period ended September 30, 2015, the equity gain/ (loss) on investments was nil. The equity gain/ (loss) on investments, represents our share of the net losses of sixteen jointly owned companies pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of these companies. The net gain / (loss) includes an unrealized loss of $0.1 million deriving from a swap option agreement entered into by a jointly-owned company.
Gain on Derivative Instruments
The fair value of our interest rate derivative instruments which were outstanding as of September 30, 2015, equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2015, the fair value of these interest rate derivative instruments in aggregate amounted to a liability of $67.0 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 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, 2015, a net loss of $1.4 million has been included in OCI and a net gain of $12.3 million has been included in Gain 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, 2015. Furthermore, during the nine-month period ended September 30, 2014, we terminated three interest rate derivative instruments that qualified for hedge accounting and we paid the counterparty breakage costs of $10.2 million, in aggregate and has been included in Swaps breakage cost in the 2014 consolidated statement of income.
Cash Flows
Nine-month periods ended September 30, 2015 and 2014
Nine-month period ended
Condensed cash flows September 30,
--------------------------------
(Expressed in millions of U.S. dollars) 2014 2015
--------------- ---------------
Net Cash Provided by Operating Activities $ 180.7 $ 179.6
Net Cash Used in Investing Activities $ (109.1) $ (28.3)
Net Cash Used in Financing Activities $ (26.4) $ (129.8)
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities decreased by $1.1 million to $179.6 million for the nine-month period ended September 30, 2015, compared to $180.7 for the nine-month period ended September 30, 2014. The decrease was primarily attributable to 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 $10.5 million and increased special survey costs of $3.4 million; partly offset by the decreased payments for interest (including swap payments) during the period of $5.7 million and increased cash from operations of $0.8 million.
Net Cash Used in Investing Activities Net cash used in investing activities was $28.3 million in the nine-month period ended September 30, 2015, which mainly consisted of $21.6 million in advance payments for the construction of three newbuild vessels, ordered pursuant to the Framework Agreement with York and $3.2 million, paid for the acquisition of a secondhand vessel pursuant to the Framework Agreement.
Net cash used in investing activities was $109.1 million in the nine-month period ended September 30, 2014, which consisted of: (a) $59.1 million for capitalized costs and advance payments for the construction and delivery of three newbuild vessels, (b) $20.5 million in payments primarily for the acquisition of two secondhand vessels, (c) $51.6 million (net of $5.5 million we received as a dividend distribution) in payments, pursuant to the Framework Agreement with York, to hold an equity interest ranging from 25% to 49% in jointly-owned companies and (d) $22.1 million we received from the sale for scrap of Konstantina, MSC Kyoto and Akritas.
Net Cash Used in Financing Activities
Net cash used in financing activities was $129.8 million in the nine-month period ended September 30, 2015, which mainly consisted of (a) $148.2 million of indebtedness that we repaid, (b) $10.0 million we repaid relating to our sale and leaseback agreements, (c) $64.5 million we paid for dividends to holders of our common stock for the fourth quarter of 2014, first quarter of 2015 and second quarter of 2015, and (d) $2.9 million we paid for dividends to holders of our Series B Preferred Stock and $6.4 million we paid for dividends to holders of our Series C Preferred Stock, both for the periods from October 15, 2014 to January 14, 2015, January 15, 2015 to April 14, 2015 and April 15, 2015 to July 14, 2015 and $1.5 million we paid for dividends to holders of our Series D Preferred Stock for the period from May 13, 2015 to July 14, 2015, (e) $96.6 million net proceeds we received from our public offering in May 2015, of 4.0 million shares of our Series D Preferred Stock, net of underwriting discounts and expenses incurred in the offering.
Net cash used in financing activities was $26.4 million in the nine-month period ended September 30, 2014, which mainly consisted of: (a) $309.8 million of indebtedness that we repaid, (b) $9.0 million we drew down from one of our credit facilities, (c) $256.7 million we received regarding the sale and leaseback transaction concluded for the three newbuild vessels, (d) $6.3 million we repaid regarding our sale and leaseback agreements, (e) $62.1 million we paid for dividends to holders of our common stock for the fourth quarter of 2013, the first quarter of 2014 and the second quarter of 2014, (f) $2.9 million we paid for dividends to holders of our Series B Preferred Stock for the period from October 15, 2013 to July 14, 2014, and $4.1 million we paid for dividends to holders of our Series C Preferred Stock for the period from the original issuance of the Series C preferred Stock on January 21, 2014 to July 14, 2014, and (g) $96.5 million net proceeds we received from our public offering in January 2014 of 4.0 million shares of our Series C Preferred Stock, net of underwriting discounts and expenses incurred in the offering.
Management Agreements
In October 2015, the Company's audit committee and board of directors approved the terms of a Framework Agreement with Costamare Shipping Company S.A. ("Costamare Shipping") and a Services Agreement with Costamare Shipping Services Ltd. ("Costamare Services"), shipmanagement companies owned by members of the Konstantakopoulos family, to replace the amended and restated management agreement with Costamare Shipping dated March 3, 2015 (the "Group Management Agreement"). The aggregate services provided by Costamare Shipping and Costamare Services to the Company and the aggregate fees payable by the Company for such services will be substantially the same as the services and fees under the Group Management Agreement. The audit committee and board also approved an amendment to the Registration Rights Agreement entered into in connection with the Company's initial public offering, to extend registration rights to Costamare Shipping and Costamare Services.
Liquidity and Capital Expenditures
Cash and cash equivalents As of September 30, 2015, we had a total cash liquidity of $191.7 million, consisting of cash, cash equivalents and restricted cash.
Debt-free vessels As of October 21, 2015, the following vessels were free of debt.
Unencumbered Vessels in the water(*)
(refer to fleet list for full charter details)
Year TEU
Vessel Name Built Capacity
------------------------- ------------------------- ------------------------
NAVARINO 2010 8,531
VENETIKO 2003 5,928
MSC ITEA 1998 3,842
LAKONIA 2004 2,586
AREOPOLIS 2000 2,474
MESSINI 1997 2,458
NEAPOLIS 2000 1,645
(*) Does not include three secondhand vessels acquired and five newbuild vessels ordered pursuant to the Framework Agreement with York, which are also free of debt.
Capital commitments
As of October 21, 2015, we had outstanding commitments relating to our ten contracted newbuilds aggregating approximately $276.1 million payable in installments until the vessels are delivered, out of which $170.8 million will be funded through committed financing. Additionally, we had an outstanding commitment of $3.2 million, relating to the purchase price of the Helgoland Trader, which is expected to be paid on delivery of the vessel. The amounts represent our interest in the relevant jointly-owned entities with York.
Conference Call details:
On Thursday, October 22, 2015, 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: 1-866-524-3160 (from the US), 0808 238 9064 (from the UK) or +1-412-317-6760 (from outside the US). Please quote "Costamare".
A replay of the conference call will be available until November 22, 2015. 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: 10074683.
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 41 years of history in the international shipping industry and a fleet of 71 containerships, with a total capacity of approximately 462,000 TEU, including ten newbuild containerships on order and one secondhand vessel to be delivered. Sixteen of our containerships, including ten newbuilds, have been acquired pursuant to the Framework Agreement 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 and Series D Preferred Stock trade on the New York Stock Exchange under the symbols "CMRE", "CMRE PR B", "CMRE PR C" and "CMRE PR D", 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 Annual Report on Form 20-F (File No. 001-34934) under the caption "Risk Factors".
Fleet List
The tables below provide additional information, as of October 21, 2015, about our fleet of containerships, including our newbuilds on order and the vessels acquired pursuant to the Framework Agreement with York. Each vessel is a cellular containership, meaning it is a dedicated container vessel.
----------------------------------------------------------------------------
Average
Daily
Charter
Rate
Until
Earliest
Current Expiry
Daily of
Time Charter Expiration Charter
Charter Rate of (U.S.
Year Capacity Term (U.S. Charter dollars)
Vessel Name Charterer Built (TEU) (1) dollars) (1) (2)
----------------------------------------------------------------------------
1 COSCO 12 December
GUANGZHOU COSCO 2006 9,469 years 36,400 2017 36,400
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2 COSCO 12 January
NINGBO COSCO 2006 9,469 years 36,400 2018 36,400
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3 COSCO 12 February
YANTIAN COSCO 2006 9,469 years 36,400 2018 36,400
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4 COSCO 12 April
BEIJING COSCO 2006 9,469 years 36,400 2018 36,400
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5 COSCO 12 May
HELLAS COSCO 2006 9,469 years 37,519 2018 37,519
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6 MSC 10 November
AZOV MSC 2014 9,403 years 43,000 2023 43,000
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7 MSC 10 February
AJACCIO MSC 2014 9,403 years 43,000 2024 43,000
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8 MSC 10 March
AMALFI MSC 2014 9,403 years 43,000 2024 43,000
----------------------------------------------------------------------------
9 MSC 10 January
ATHENS MSC 2013 8,827 years 42,000 2023 42,000
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10 MSC 10 February
ATHOS MSC 2013 8,827 years 42,000 2023 42,000
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11 VALOR 7.0 April
Evergreen 2013 8,827 years(i) 41,700 2020(i) 41,700
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12 VALUE 7.0 April
Evergreen 2013 8,827 years(i) 41,700 2020(i) 41,700
----------------------------------------------------------------------------
13 VALIANT 7.0 June
Evergreen 2013 8,827 years(i) 41,700 2020(i) 41,700
----------------------------------------------------------------------------
14 VALENCE 7.0 July
Evergreen 2013 8,827 years(i) 41,700 2020(i) 41,700
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15 VANTAGE 7.0 September
Evergreen 2013 8,827 years(i) 41,700 2020(i) 41,700
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16 NAVARINO 2010 8,531
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17 MAERSK A.P.
KAWASAKI Moller- 10 December
(ii) Maersk 1997 7,403 years 37,000 2017 37,000
----------------------------------------------------------------------------
18 MAERSK A.P.
KURE Moller- 10 December
(ii) Maersk 1996 7,403 years 37,000 2017 37,000
----------------------------------------------------------------------------
19 MAERSK A.P.
KOKURA Moller- 10 February
(ii) Maersk 1997 7,403 years 37,000 2018 37,000
----------------------------------------------------------------------------
20 MSC 10 September
METHONI MSC 2003 6,724 years 29,000 2021 29,000
----------------------------------------------------------------------------
21 SEALAND A.P.
NEW Moller- 11 March
YORK Maersk 2000 6,648 years 26,100 2018 26,100
----------------------------------------------------------------------------
22 MAERSK A.P.
KOBE Moller- 11 May
Maersk 2000 6,648 years 26,100 2018 26,100
----------------------------------------------------------------------------
23 SEALAND A.P.
WASHINGTON Moller- 11 June
Maersk 2000 6,648 years 26,100 2018 26,100
----------------------------------------------------------------------------
24 SEALAND A.P.
MICHIGAN Moller- 11 August
Maersk 2000 6,648 years 26,100 2018 26,100
----------------------------------------------------------------------------
25 SEALAND A.P.
ILLINOIS Moller- 11 October
Maersk 2000 6,648 years 26,100 2018 26,100
----------------------------------------------------------------------------
26 MAERSK A.P.
KOLKATA Moller- 11 38,865 November
Maersk 2003 6,644 years (3) 2019 26,822
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27 MAERSK A.P.
KINGSTON Moller- 11 38,461 February
Maersk 2003 6,644 years (4) 2020 27,576
----------------------------------------------------------------------------
28 MAERSK A.P.
KALAMATA Moller- 11 38,418 April
Maersk 2003 6,644 years (5) 2020 27,863
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29 VENETIKO 0.3 December
OOCL 2003 5,928 years 10,000 2015 10,000
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30 ENSENADA
EXPRESS
(*) 2001 5,576
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31 MSC 5.3 November
ROMANOS MSC 2003 5,050 years 28,000 2016 28,000
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32 ZIM
NEW 14 September
YORK ZIM 2002 4,992 years 14,534 2016(6) 14,534
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33 ZIM 14 September
SHANGHAI ZIM 2002 4,992 years 14,534 2016(6) 14,534
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34 ZIM 10 July
PIRAEUS ZIM 2004 4,992 years 13,744 2016 12,544
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35 OAKLAND Hapag 8.0 September
EXPRESS Lloyd 2000 4,890 years 30,500 2016 30,500
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36 HALIFAX Hapag 8.0 October
EXPRESS Lloyd 2000 4,890 years 30,500 2016 30,500
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37 SINGAPORE Hapag 8.0 July
EXPRESS Lloyd 2000 4,890 years 30,500 2016 30,500
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38 MSC 7.8 August
MANDRAKI MSC 1988 4,828 years 20,000 2017 20,000
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39 MSC 8.2 September
MYKONOS MSC 1988 4,828 years 20,000 2017 20,000
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40 MSC 5.3 March
ULSAN MSC 2002 4,132 years 16,500 2017 16,500
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41 MSC 9.5 13,500 September
KORONI MSC 1998 3,842 years (7) 2018 13,500
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42 MSC 1.5 February
ITEA MSC 1998 3,842 years 10,000 2016 10,000
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43 KARMEN 1.5 March
Evergreen 1991 3,351 years 11,000 2016 11,000
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44 MARINA(8) 0.5 May
Evergreen 1992 3,351 years 8,800 2016 8,800
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45 MSC 4.8 November
CHALLENGER MSC 1986 2,633 years 10,000 2015 10,000
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46 LAKONIA 2.0 February
Evergreen 2004 2,586 years 8,600 2017 8,600
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47 ELAFONISOS A.P.
(*) Moller- 0.9 November
Maersk 1999 2,526 years 7,000 2015 7,000
----------------------------------------------------------------------------
48 AREOPOLIS 0.7 November
Evergreen 2000 2,474 years 7,200 2015 7,200
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49 HELGOLAND
TRADER 0.5 March
(*) (9) Maersk 1998 2,472 years 8,750 2016 8,750
----------------------------------------------------------------------------
50 MESSINI 3.3 February
Evergreen 1997 2,458 years 7,900 2016 7,900
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51 MSC 8.0 July
REUNION MSC 1992 2,024 years 11,200 2016 11,200
----------------------------------------------------------------------------
52 MSC
NAMIBIA 8.8 July
II MSC 1991 2,023 years 11,200 2016 11,200
----------------------------------------------------------------------------
53 MSC
SIERRA 7.7 June
II MSC 1991 2,023 years 11,200 2016 11,200
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54 MSC 5.0 January
PYLOS MSC 1991 2,020 years 7,250 2016 7,250
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55 PADMA 0.9 January
(*) Yang Ming 1998 1,645 years 8,000 2016 8,000
----------------------------------------------------------------------------
56 NEAPOLIS 2000 1,645
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57 ARKADIA 2.0 August
(*) Evergreen 2001 1,550 years 10,600 2017 10,600
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58 PROSPER Sea
Consortiu 0.7 9,500 February
m 1996 1,504 years (10) 2016 8,635
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59 ZAGORA 4.7 May
MSC 1995 1,162 years 7,400 2016 7,400
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60 PETALIDI 2.0 June
(*) CMA CGM 1994 1,162 years 7,600 2016 7,600
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61 STADT 2.7 8,000 March
LUEBECK CMA CGM 2001 1.078 years (11) 2016 8,800
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Newbuilds
----------------------------------------------------------------------------
Expected Delivery
Capacity (based on latest
Vessel Name Shipyard (TEU) Charterer shipyard schedule)
----------------------------------------------------------------------------
1 NCP0113(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
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2 NCP0114(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
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3 NCP0115(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
----------------------------------------------------------------------------
4 NCP0116(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
----------------------------------------------------------------------------
5 NCP0152(*) Hanjin Subic Bay 11,010 4th Quarter 2016
----------------------------------------------------------------------------
6 S2121(*) Samsung Heavy 14,354 Evergreen 2nd Quarter 2016
----------------------------------------------------------------------------
7 S2122(*) Samsung Heavy 14,354 Evergreen 2nd Quarter 2016
----------------------------------------------------------------------------
8 S2123(*) Samsung Heavy 14,354 Evergreen 3rd Quarter 2016
----------------------------------------------------------------------------
9 S2124(*) Samsung Heavy 14,354 Evergreen 3rd Quarter 2016
----------------------------------------------------------------------------
10 S2125(*) Samsung Heavy 14,354 Evergreen 3rd Quarter 2016
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(1) 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. (2) This average rate is calculated based on contracted charter rates for the days remaining between October 21, 2015 and the earliest expiration of each charter. Certain of our charter rates change until their earliest expiration dates, as indicated in the footnotes below. (3) This charter rate changes on January 13, 2016 to $26,100 per day until the earliest redelivery date. (4) This charter rate changes on April 28, 2016 to $26,100 per day until the earliest redelivery date. (5) This charter rate changes on June 11, 2016 to $26,100 per day until the earliest redelivery date. (6) The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under the 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 July the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for one year pursuant to its option to extend the charter of two of the three vessels chartered to Zim for successive one year periods at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for the first year has been determined at $14,534 daily. (7) As from December 1, 2012 until redelivery, the charter rate is to be a minimum of $13,500 per day plus 50% of the difference between the market rate and the charter rate of $13,500. The market rate is to be determined annually based on the Hamburg ConTex type 3500 TEU index published on October 1 of each year until redelivery. (8) The vessel is currently on a voyage charter and is expected to be delivered to Evergreen on November 7, 2015. (9) The vessel is expected to be delivered to us no later than April 30, 2016. (10) This charter changes on November 15, 2015 to $8,400 per day until the earliest redelivery date. (11) The charter rate will be $8,000 per day provided that the vessel trades within the Red Sea once every 20 days, while it will change to $7,400 for non-Red Sea trading. As of October 21, 2015, the vessel is earning $8,000 per day.
(i) Assumes exercise of owner's unilateral options to extend the charter of these vessels for two one year periods at the same charter rate. The charterer also has corresponding options to unilaterally extend the charter for the same periods at the same charter rate. (ii) The charterer has a unilateral option to extend the charter of the vessel for two periods of 30 months each +/-90 days on the final period performed, at a rate of $41,700 per day.
(*) Denotes vessels acquired pursuant to the Framework Agreement with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.
COSTAMARE INC.
Consolidated Statements of Income
Nine-months ended Three-months ended
September 30, September 30,
------------------------ ------------------------
(Expressed in thousands
of U.S. dollars, except
share and per share
amounts) 2014 2015 2014 2015
----------- ----------- ----------- -----------
(Unaudited)
REVENUES:
Voyage revenue $ 363,129 $ 368,102 $ 124,726 $ 124,033
EXPENSES:
Voyage expenses (2,590) (1,902) (814) (874)
Voyage expenses - related
parties (2,724) (2,757) (936) (928)
Vessels' operating
expenses (90,392) (88,554) (30,487) (28,774)
General and
administrative expenses (4,505) (4,056) (2,055) (1,374)
Management fees - related
parties (14,199) (14,615) (4,901) (4,925)
General and
administrative expenses
- non-cash component - (7,219) - (1,836)
Amortization of dry-
docking and special
survey costs (5,576) (5,434) (1,780) (1,851)
Depreciation (78,845) (76,034) (27,027) (25,623)
Amortization of prepaid
lease rentals (2,768) (3,726) (1,256) (1,256)
Gain on sale / disposals
of vessels 2,543 - 5,446 -
Foreign exchange gains /
(losses) (73) 15 37 (215)
----------- ----------- ----------- -----------
Operating income $ 164,000 $ 163,820 $ 60,953 $ 56,377
----------- ----------- ----------- -----------
OTHER INCOME /
(EXPENSES):
Interest income $ 531 $ 1,053 $ 240 $ 321
Interest and finance
costs (75,601) (71,387) (27,239) (21,644)
Swaps breakage costs (10,192) - - -
Equity gain / (loss) on
investments (2,237) 38 38 85
Other 2,843 404 40 99
Gain / (Loss) on
derivative instruments 4,943 11,508 3,042 (415)
----------- ----------- ----------- -----------
Total other income /
(expenses) $ (79,713) $ (58,384) $ (23,879) $ (21,554)
----------- ----------- ----------- -----------
Net Income $ 84,287 $ 105,436 $ 37,074 $ 34,823
=========== =========== =========== ===========
Earnings allocated to
Preferred Stock (8,831) (12,637) (3,112) (5,324)
----------- ----------- ----------- -----------
Net Income available to
common stockholders $ 75,456 $ 92,799 $ 33,962 $ 29,499
=========== =========== =========== ===========
Earnings per common
share, basic and diluted$ 1.01 $ 1.24 $ 0.45 $ 0.39
=========== =========== =========== ===========
Weighted average number
of shares, basic and
diluted 74,800,000 74,952,340 74,800,000 75,100,826
=========== =========== =========== ===========
COSTAMARE INC.
Consolidated Balance Sheets
As of As of
December 31, September 30,
(Expressed in thousands of U.S. dollars) 2014 2015
(Audited) (Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 113,089 $ 134,613
Restricted cash 14,264 8,757
Accounts receivable 2,365 1,590
Inventories 11,565 12,609
Due from related parties 4,447 3,834
Fair value of derivatives - 234
Insurance claims receivable 1,759 3,394
Prepaid lease rentals 4,982 4,985
Accrued charter revenue 511 439
Prepayments and other 4,993 6,859
--------------- ---------------
Total current assets $ 157,975 $ 177,314
--------------- ---------------
FIXED ASSETS, NET:
Capital leased assets $ 250,547 $ 244,877
Vessels, net 2,098,820 2,030,325
--------------- ---------------
Total fixed assets, net $ 2,349,367 $ 2,275,202
--------------- ---------------
NON-CURRENT ASSETS:
Investment in affiliates $ 73,579 $ 100,115
Prepaid lease rentals, non-current 40,811 37,082
Deferred charges, net 28,675 28,769
Accounts receivable, non-current 1,425 1,425
Restricted cash 49,818 48,280
Accrued charter revenue 1,025 690
Other non-current assets 12,065 12,518
--------------- ---------------
Total assets $ 2,714,740 $ 2,681,395
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 192,951 $ 185,258
Accounts payable 6,296 6,746
Due to related parties - 282
Capital lease obligations 13,508 14,280
Accrued liabilities 19,119 19,480
Unearned revenue 12,929 15,767
Fair value of derivatives 43,287 35,521
Other current liabilities 2,286 2,006
--------------- ---------------
Total current liabilities $ 290,376 $ 279,340
--------------- ---------------
NON-CURRENT LIABILITIES
Long-term debt, net of current portion $ 1,326,990 $ 1,186,507
Capital lease obligations, net of current
portion 233,625 222,814
Fair value of derivatives, net of current
portion 31,653 31,432
Unearned revenue, net of current portion 29,454 27,764
--------------- ---------------
Total non-current liabilities $ 1,621,722 $ 1,468,517
--------------- ---------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $ - $ -
Common stock 8 8
Additional paid-in capital 858,665 962,500
Retained earnings 103 28,444
Accumulated other comprehensive loss (56,134) (57,414)
--------------- ---------------
Total stockholders' equity $ 802,642 $ 933,538
--------------- ---------------
Total liabilities and stockholders' equity $ 2,714,740 $ 2,681,395
--------------- ---------------
Contacts: Company Contact: Gregory Zikos Chief Financial Officer Konstantinos Tsakalidis - Business Development Costamare Inc., Athens, Greece Tel: (+30) 210-949-0050 Email: [email protected]
Source: Costamare Inc.