Costamare Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2015
/EINPresswire.com/ -- ATHENS, GREECE -- (Marketwired) -- 01/27/16 -- Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the fourth quarter and year ended December 31, 2015.
- Voyage revenues adjusted on a cash basis of $122.9 million and $493.0 million for the three months and the year ended December 31, 2015, respectively.
- Adjusted EBITDA of $86.2 million and $348.2 million for the three months and the year ended December 31, 2015, respectively.
- Adjusted Net income available to common stockholders of $32.8 million or $0.44 per share and $130.4 million or $1.74 per share for the three months and the year ended December 31, 2015, respectively.
See "Financial Summary" and "Non-GAAP Measures" below for additional detail.
Dividend Announcements
- To date, we have declared dividends in 21 consecutive quarters without any reduction. Over the past five years, we have increased the dividend 16%.
- On January 4, 2016, we declared a dividend for the fourth quarter ended December 31, 2015, of $0.29 per share on our common stock, payable on February 4, 2016, to stockholders of record on January 21, 2016.
- On January 4, 2016, 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 all paid on January 15, 2016 to holders of record on January 14, 2016.
New Business Developments
- In December 2015, we entered into a financing agreement with a leading Chinese financial institution regarding the two 3,800 TEU vessels ordered together with York Capital from Jiangsu New Yangzi Shipbuilding Co., Ltd and chartered to members of the Hamburg Süd group. The financing is under the structure of a sale and leaseback transaction.
- The Company sold the 1986-built, 2,633TEU containership MSC Challenger for demolition, for a sale price of approximately $5.0 million. The vessel was delivered to her buyers in November 2015. The Company recorded an accounting gain of approximately $1.7 million from the sale.
- The Company entered into the following charter arrangements:
- Agreed to charter the 2010-built, 8,531 TEU containership Navarino with PIL for a period of minimum 11 and maximum 13 months at a daily rate of $10,500. The vessel was delivered to PIL on December 13, 2015.
- Agreed to charter the 2000-built, 2,474 TEU containership Areopolis with Zim for a period of minimum 2 and maximum 6 months at a daily rate of $6,000. The vessel was delivered to Zim on January 4, 2016.
- Agreed to extend the charter of the 1999-built, 2,526 TEU containership Elafonissos with Maersk for a period of minimum 2 and maximum 12 months starting from November 28, 2015 at a daily rate of $6,500. Subsequently, the vessel was chartered with CMA CGM for a period of minimum 2 and maximum 10 months starting from February 6, 2016, at a daily rate of $6,000.
- Agreed to extend the charter of the 1997-built, 2,458 TEU containership Messini with Evergreen for a period of minimum 6 and maximum 10 months starting from February 1, 2016 at a daily rate of $6,000.
- Agreed to extend the charter of the 1991-built, 2,020 TEU containership MSC Pylos with MSC for a period of minimum 11 and maximum 13 months starting from February 1, 2016 at a daily rate of $6,300.
- Agreed to extend the charter of the 1998-built, 1,645 TEU containership Padma with Yang Ming for a period of minimum 3 and maximum 7 months starting from January 26, 2016 at a daily rate of $7,400.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
"2015 represented another profitable year for the Company.
In December, we arranged pre-delivery financing with a leading Chinese financial institution, for the two 3,800 TEU container vessels which are scheduled for delivery in the first and second quarters of 2018. Upon delivery, the vessels will commence a 7-year charter with Hamburg Süd.
Regarding the market, charter rates and asset values have been under pressure, especially during the second half of the year, as a result of weak demand.
We believe that today's depressed asset value environment provides attractive opportunities and the potential to increase our shareholders' returns."
Financial Summary
Three-month period
Year ended December 31, ended December 31,
----------------------- -----------------------
(Expressed in thousands of
U.S. dollars, except share
and per share data) 2014 2015 2014 2015
----------- ----------- ----------- -----------
Voyage revenue $ 483,995 $ 490,378 $ 120,866 $ 122,276
Accrued charter revenue (1) $ 7,023 $ 2,618 $ 782 $ 589
Voyage revenue adjusted on a
cash basis (2) $ 491,018 $ 492,996 $ 121,648 $ 122,865
Adjusted EBITDA (3) $ 343,195 $ 348,227 $ 82,734 $ 86,209
Adjusted Net Income
available to common
stockholders (3) $ 122,938 $ 130,351 $ 30,799 $ 32,772
Weighted Average number of
shares 74,800,000 75,027,474 74,800,000 75,250,426
Adjusted Earnings per share
(3) $ 1.64 $ 1.74 $ 0.41 $ 0.44
EBITDA (3) $ 327,459 $ 348,719 $ 80,913 $ 87,755
Net Income $ 115,087 $ 143,764 $ 30,800 $ 38,328
Net Income available to
common stockholders $ 103,178 $ 125,861 $ 27,722 $ 33,062
Weighted Average number of
shares 74,800,000 75,027,474 74,800,000 75,250,426
Earnings per share $ 1.38 $ 1.68 $ 0.37 $ 0.44
(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 years and the three-month periods ended December 31, 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
Three-month period ended
Year ended December 31, December 31,
------------------------ ------------------------
(Expressed in thousands
of U.S. dollars, except
share and per share
data) 2014 2015 2014 2015
----------- ----------- ----------- -----------
Net Income $ 115,087 $ 143,764 $ 30,800 $ 38,328
Earnings allocated to
Preferred Stock (11,909) (17,903) (3,078) (5,266)
----------- ----------- ----------- -----------
Net Income available to
common stockholders 103,178 125,861 27,722 33,062
----------- ----------- ----------- -----------
Accrued charter revenue 7,023 2,618 782 589
Gain on sale / disposal
of vessels (2,543) (1,688) - (1,688)
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 6,082 587 1,177 2
General and
administrative expenses
- non-cash component - 8,623 - 1,404
Write-off of costs
related to the
withdrawal of Costamare
Partners LP
registration statement. - 3,326 - 3,326
Amortization of prepaid
lease rentals 4,024 4,982 1,256 1,256
Realized Loss on
Euro/USD forward
contracts (1) 451 2,898 388 169
Gain on derivative
instruments (1) (5,469) (16,856) (526) (5,348)
----------- ----------- ----------- -----------
Adjusted Net income
available to common
stockholders $ 122,938 $ 130,351 $ 30,799 $ 32,772
=========== =========== =========== ===========
Adjusted Earnings per
Share $ 1.64 $ 1.74 $ 0.41 $ 0.44
=========== =========== =========== ===========
Weighted average number
of shares 74,800,000 75,027,474 74,800,000 75,250,426
=========== =========== =========== ===========
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, gain on sale/disposal of vessels, realized 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, write-off of costs related to the withdrawal of registration statement of Costamare Partners LP, 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
Year ended December Three-month period
31, ended December 31,
---------------------- ----------------------
(Expressed in thousands of
U.S. dollars) 2014 2015 2014 2015
---------- ---------- ---------- ----------
Net Income $ 115,087 $ 143,764 $ 30,800 $ 38,328
Interest and finance costs 95,562 92,276 19,961 20,889
Interest income (815) (1,373) (284) (320)
Depreciation 105,787 101,645 26,942 25,611
Amortization of prepaid
lease rentals 4,024 4,982 1,256 1,256
Amortization of dry-docking
and special survey costs 7,814 7,425 2,238 1,991
---------- ---------- ---------- ----------
EBITDA 327,459 348,719 80,913 87,755
Accrued charter revenue 7,023 2,618 782 589
Gain on sale / disposal of
vessels (2,543) (1,688) - (1,688)
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 6,082 587 1,177 2
General and administrative
expenses - non-cash
component - 8,623 - 1,404
Write-off of costs related
to the withdrawal of
Costamare Partners LP
registration statement. - 3,326 - 3,326
Realized Loss on Euro/USD
forward contracts (1) 451 2,898 388 169
Gain on derivative
instruments (1) (5,469) (16,856) (526) (5,348)
---------- ---------- ---------- ----------
Adjusted EBITDA $ 343,195 $ 348,227 $ 82,734 $ 86,209
========== ========== ========== ==========
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, gain on sale / disposal of vessels, realized 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, write-off of costs related to the withdrawal of registration statement of Costamare Partners LP 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 December 31, 2015 compared to the three-month period ended December 31, 2014
During the three-month periods ended December 31, 2015 and 2014, we had an average of 54.6 and 54.2 vessels in our fleet, respectively. In the three-month period ended December 31, 2015, we sold the vessel MSC Challenger with a TEU capacity of 2,633. In the three-month period ended December 31, 2014, we took delivery of the secondhand containership Lakonia with a TEU capacity of 2,586. In the three-month periods ended December 31, 2015 and 2014, our fleet ownership days totaled 5,023 and 4,982 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.
Three-month period
ended December 31,
------------------
(Expressed in millions of U.S. Percentage
dollars, except percentages) 2014 2015 Change Change
-------- --------
Voyage revenue $ 120.9 $ 122.3 $ 1.4 1.2%
Voyage expenses (1.0) (0.9) (0.1) (10.0%)
Voyage expenses - related parties (0.9) (0.9) - -
Vessels' operating expenses (30.5) (28.6) (1.9) (6.2%)
General and administrative
expenses (3.2) (4.7) 1.5 46.90%
Management fees - related parties (4.3) (4.3) - -
General and administrative
expenses - non-cash component - (1.4) 1.4 100.0%
Amortization of dry-docking and
special survey costs (2.2) (2.0) (0.2) (9.1%)
Depreciation (26.9) (25.6) (1.3) (4.8%)
Amortization of prepaid lease
rentals (1.3) (1.3) - -
Gain on sale / disposal of vessels - 1.7 1.7 100.0%
Foreign exchange gains/ (losses) 0.1 (0.1) (0.2) (200.0%)
Interest income 0.3 0.3 - -
Interest and finance costs (20.0) (20.9) 0.9 4.5%
Equity loss on investments (1.2) (0.6) (0.6) (50.0%)
Other 0.5 - (0.5) (100.0%)
Gain on derivative instruments 0.5 5.3 4.8 960.0%
-------- --------
Net Income $ 30.8 $ 38.3
======== ========
Three-month period
ended December 31,
-------------------
(Expressed in millions of U.S. Percentage
dollars, except percentages) 2014 2015 Change Change
--------- ---------
Voyage revenue $ 120.9 $ 122.3 $ 1.4 1.2%
Accrued charter revenue 0.8 0.6 (0.2) (25.0%)
--------- ---------
Voyage revenue adjusted on a cash
basis $ 121.7 $ 122.9 $ 1.2 1.0%
========= =========
Three-month period
ended December 31,
-------------------
Percentage
Vessels operational data 2014 2015 Change Change
--------- ---------
Average number of vessels 54.2 54.6 0.4 0.7%
Ownership days 4,982 5,023 41 0.8%
Number of vessels under dry-
docking 6 3 (3)
Voyage Revenue
Voyage revenue increased by 1.2%, or $1.4 million, to $122.3 million during the three-month period ended December 31, 2015, from $120.9 million during the three-month period ended December 31, 2014. This increase was mainly due to (i) increased charter rates in certain of our vessels during the three-month period ended December 31, 2015, compared to the three-month period ended December 31, 2014, (ii) decreased off-hire days, mainly due to scheduled dry-dockings during the three-month period ended December 31, 2015, compared to the three-month period ended December 31, 2014; partly offset by revenue not earned by the vessel sold for demolition during the three-month period ended December 31, 2015.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 1.0%, or $1.2 million, to $122.9 million during the three-month period ended December 31, 2015, from $121.7 million during the three-month period ended December 31, 2014. This increase was mainly due to (i) increased charter rates in certain of our vessels during the three-month period ended December 31, 2015, compared to the three-month period ended December 31, 2014, (ii) decreased off-hire days, mainly due to scheduled dry-dockings during the three-month period ended December 31, 2015, compared to the three-month period ended December 31, 2014; partly offset by revenue not earned by the vessel sold for demolition during the three-month period ended December 31, 2015.
Voyage Expenses
Voyage expenses were $0.9 million, during the three-month period ended December 31, 2015 and $1.0 million during the three-month period ended December 31, 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 December 31, 2015 and 2014, and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. ("Costamare Shipping") and Costamare Shipping Services Ltd. ("Costamare Services") in accordance with (i) the Group Management Agreement until November 2, 2015, and (ii) the Management Agreements (as described below) from November 2, 2015.
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 6.2%, or $1.9 million, to $28.6 million during the three-month period ended December 31, 2015, from $30.5 million during the three-month period ended December 31, 2014.
General and Administrative Expenses
General and administrative expenses increased by 46.9%, or $1.5 million, to $4.7 million during the three-month period ended December 31, 2015, from $3.2 million during the three-month period ended December 31, 2014. The increase is mainly attributable to costs incurred by our subsidiary, Costamare Partners LP, which were transferred to our consolidated income statement during the three month period ended December 31, 2015.
Management Fees - related parties
Management fees paid to our managers were $4.3 million during the three-month periods ended December 31, 2015 and 2014, as provided under the Group Management Agreement and the Management Agreements, as applicable.
General and Administrative expenses - non-cash component
General and administrative expenses - non-cash component for the three-month period ended December 31, 2015, amounted to $1.4 million, representing the value of the shares issued to Costamare Services on December 31, 2015, pursuant to the Services Agreement (as described below). 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 $2.0 million for the three-month period ended December 31, 2015 and $2.2 million for the three-month period ended December 31, 2014. During the three-month period ended December 31, 2015, three vessels underwent and completed their special survey. During the three-month period ended December 31, 2014, six vessels underwent and completed their special survey.
Depreciation
Depreciation expense decreased by 4.8%, or $1.3 million, to $25.6 million during the three-month period ended December 31, 2015, from $26.9 million during the three-month period ended December 31, 2014. The decrease was attributable to a change in the estimated scrap value of vessels, which had a favorable effect of $1.3 million for the three-month period ended December 31, 2015.
Amortization of Prepaid Lease Rentals
Amortization of the prepaid lease rentals was $1.3 million during the three-month periods ended December 31, 2015 and 2014.
Gain on Sales / Disposals of Vessels
During the three-month period ended December 31, 2015, we recorded a gain of $1.7 million from the sale of one vessel. There were no vessels disposed of during the three-month period ended December 31, 2014.
Foreign Exchange Gains/ (Losses)
Foreign exchange losses were $0.1 million during the three-month period ended December 31, 2015. Foreign exchange gains were $0.1 million during the three-month period December 31, 2014.
Interest Income
Interest income amounted to $0.3 million for the three-month periods ended December 31, 2015 and 2014.
Interest and Finance Costs
Interest and finance costs increased by 4.5%, or $0.9 million, to $20.9 million during the three-month period ended December 31, 2015, from $20.0 million during the three-month period ended December 31, 2014.
Equity Loss on Investments
The equity loss on investments of $0.6 million for the three-month period ended December 31, 2015, represents our share of the net losses of nineteen 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 loss of $0.6 million is mainly attributable to General and administrative expenses of $0.3 million incurred by 12 jointly-owned companies that had vessels under construction during the three month period ended December 31, 2015.
Gain on Derivative Instruments
The fair value of our interest rate derivative instruments which were outstanding as of December 31, 2015, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2015, the fair value of these interest rate derivative instruments in aggregate amounted to a liability of $52.1 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 December 31, 2015, a net gain of $12.7 million has been included in OCI and a net gain of $5.9 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 three-month period ended December 31, 2015.
Cash Flows
Three-month periods ended December 31, 2015 and 2014
Three-month period ended
Condensed cash flows December 31,
------------------------
(Expressed in millions of U.S. dollars) 2014 2015
----------- -----------
Net Cash Provided by Operating Activities $ 62.5 $ 65.1
Net Cash Used in Investing Activities $ (10.1) $ (14.7)
Net Cash Used in Financing Activities $ (77.9) $ (84.9)
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended December 31, 2015, increased by $2.6 million to $65.1 million, compared to $62.5 million for the three-month period ended December 31, 2014. The increase was primarily attributable to (a) increased cash from operations of $1.2 million, (b) the favorable 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 $0.7 million, (c) decreased special survey costs of $4.1 million and (d) decreased payments for interest (including swap payments) during the period of $1.9 million.
Net Cash Used in Investing Activities
Net cash used in investing activities was $14.7 million in the three-month period ended December 31, 2015, which mainly consisted of $17.2 million for advance payments for the construction of three newbuild vessels ordered pursuant to the Framework Agreement with York, $0.6 million for advance payment for the acquisition of one secondhand vessel pursuant to the Framework Agreement with York and $4.7 million we received from the sale for scrap of MSC Challenger.
Net cash used in investing activities was $10.1 million in the three-month period ended December 31, 2014, which mainly consisted of: (a) $1.7 million payments (net of $26.3 million we received as dividend distributions) associated with the equity investments pursuant to the Framework Agreement with York, which range from 25% to 49% in jointly-owned companies, and (b) $8.4 million in payments primarily for the acquisition of one secondhand vessel.
Net Cash Used in Financing Activities
Net cash used in financing activities was $84.9 million in the three-month period ended December 31, 2015, which mainly consisted of (a) $48.7 million of repaid indebtedness, (b) $3.5 million repaid under our sale and leaseback agreements (c) $21.8 million paid for dividends to holders of our common stock for the third quarter of 2015, (d) $1.0 million paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock ("Series B Preferred Stock"), $2.1 million paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock ("Series C Preferred Stock") and $2.2 million paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock ("Series D Preferred Stock"), for the period from July 15, 2015 to October 14, 2015.
Net cash used in financing activities was $77.9 million in the three-month period ended December 31, 2014, which mainly consisted of: (a) $46.9 million repaid indebtedness, (b) $3.2 million repaid relating under our sale and leaseback agreements, (c) $20.9 million paid for dividends to holders of our common stock for the second quarter of 2014, and (d) $1.0 million paid for dividends to holders of our Series B Preferred Stock and $2.1 million paid for dividends to holders of our Series C Preferred Stock, in both cases for the period from July 15, 2014 to October 14, 2014.
Results of Operations
Year ended December 31, 2015, compared to the year ended December 31, 2014
During the year ended December 31, 2015 and 2014, we had an average of 54.9 and 54.5 vessels, respectively in our fleet. In the year ended December 31, 2015, pursuant to the Framework Agreement with York, a jointly-owned vessel entity took delivery of the secondhand vessel Arkadia with a TEU capacity of 1,550 and we sold the vessel MSC Challenger with a TEU capacity of 2,633. In the year ended December 31, 2014, we took delivery of the newbuild vessels MSC Azov, MSC Ajaccio and MSC Amalfi with an aggregate TEU capacity of 28,209 and the secondhand vessels Neapolis, Areopolis and Lakonia with an aggregate TEU capacity of 6,705 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 took delivery of the secondhand vessel Elafonisos with a TEU capacity of 2,526. In the year ended December 31, 2015 and 2014, our fleet ownership days totaled 20,038 and 19,885 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.
Year ended
December 31,
------------------
(Expressed in millions of U.S. Percentage
dollars, except percentages) 2014 2015 Change Change
-------- --------
Voyage revenue $ 484.0 $ 490.4 $ 6.4 1.3%
Voyage expenses (3.6) (2.8) (0.8) (22.2%)
Voyage expenses - related parties (3.6) (3.7) 0.1 2.8%
Vessels' operating expenses (120.8) (117.2) (3.6) (3.0%)
General and administrative
expenses (7.7) (8.8) 1.1 14.3%
Management fees - related parties (18.5) (18.9) 0.4 2.2%
General and administrative
expenses - non-cash component - (8.6) 8.6 100.0%
Amortization of dry-docking and
special survey costs (7.8) (7.4) (0.4) (5.1%)
Depreciation (105.8) (101.6) (4.2) (4.0%)
Amortization of prepaid lease
rentals (4.0) (5.0) 1.0 25.0%
Gain on sale / disposal of vessels 2.5 1.7 (0.8) (32.0%)
Foreign exchange losses - (0.1) 0.1 100.0%
Interest income 0.8 1.3 0.5 62.5%
Interest and finance costs (95.6) (92.3) (3.3) (3.5%)
Swaps breakage cost (10.2) - (10.2) (100.0%)
Equity loss on investments (3.4) (0.5) (2.9) (85.3%)
Other 3.3 0.4 (2.9) (87.9%)
Gain on derivative instruments 5.5 16.9 11.4 207.3%
-------- --------
Net Income $ 115.1 $ 143.8
======== ========
(Expressed in millions of U.S. Year ended Percentage
dollars, except percentages) December 31, Change Change
------------------
2014 2015
-------- --------
Voyage revenue $ 484.0 $ 490.4 $ 6.4 1.3%
Accrued charter revenue 7.0 2.6 (4.4) (62.9%)
-------- --------
Voyage revenue adjusted on a cash
basis $ 491.0 $ 493.0 $ 2.0 0.4%
======== ========
Year ended
December 31,
------------------
Percentage
Vessels operational data 2014 2015 Change Change
-------- --------
Average number of vessels 54.5 54.9 0.4 0.7%
Ownership days 19,885 20,038 153 0.8%
Number of vessels under dry-
docking 11 10 (1)
Voyage Revenue
Voyage revenue increased by 1.3%, or $6.4 million, to $490.4 million during the year ended December 31, 2015, from $484.0 million during the year ended December 31, 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, (ii) increased charter rates in certain of our vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014; partly offset by revenue not earned by vessels which were sold for demolition during the year ended December 31, 2014 and increased off-hire days, mainly due to scheduled dry-dockings during the year ended December 31, 2015, compared to the year ended December 31, 2014.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 0.4%, or $2.0 million, to $493.0 million during the year ended December 31, 2015, from $491.0 million during the year ended December 31, 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, (ii) increased charter rates in certain of our vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014; partly offset by revenue not earned by vessels which were sold for demolition during the year ended December 31, 2014 and increased off-hire days, mainly due to scheduled dry-dockings during the year ended December 31, 2015, compared to the year ended December 31, 2014.
Voyage Expenses
Voyage expenses decreased by 22.2%, or $0.8 million, to $2.8 million during the year ended December 31, 2015, from $3.6 million during the year ended December 31, 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 $3.7 million and $3.6 million during the years ended December 31, 2015 and 2014, respectively and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping and Costamare Services in accordance with (i) the Group Management Agreement until November 2, 2015, and (ii) the Management Agreements from November 2, 2015.
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 3.0% or $3.6 million to $117.2 million during the year ended December 31, 2015, from $120.8 million during the year ended December 31, 2014.
General and Administrative Expenses
General and administrative expenses increased by 14.3% or $1.1 million, to $8.8 million during the year ended December 31, 2015, from $7.7 million during the year ended December 31, 2014. The increase is mainly attributable to costs incurred by our subsidiary, Costamare Partners LP, which were transferred to our consolidated income statement during the year ended December 31, 2015.
Management Fees - related parties
Management fees paid to our managers increased by 2.2%, or $0.4 million, to $18.9 million during the year ended December 31, 2015, from $18.5 million during the year ended December 31, 2014, pursuant to the Group Management Agreement and the Management Agreements, as applicable. 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 the Group Management Agreement in effect at such time, and (ii) the increased average number of vessels during the year ended December 31, 2015, compared to the year ended December 31, 2014.
General and Administrative expenses - non-cash component
General and administrative expenses - non-cash component for the year ended December 31, 2015, amounted to $8.6 million, representing the value of the shares issued to our manager on March 31, 2015, on June 30, 2015 and September 30, 2015, pursuant to the Group Management Agreement, and the value of the shares issued to Costamare Services issued on December 31, 2015, pursuant to the Services Agreement. No amounts were incurred in 2014.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs for the years ended December 31, 2015 and 2014 were $7.4 million and $7.8 million, respectively. During the year ended December 31, 2014, eleven vessels, underwent and completed their special survey. During the year ended December 31, 2015, ten vessels, underwent and completed their special survey.
Depreciation
Depreciation expense decreased by 4.0%, or $4.2 million, to $101.6 million during the year ended December 31, 2015, from $105.8 million during the year ended December 31, 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 $5.4 million for the year ended December 31, 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 was $5.0 million and $4.0 million during the years ended December 31, 2015 and 2014, respectively.
Gain on Sale/Disposal of Vessels
During the year ended December 31, 2015, we recorded a gain of $1.7 million from the sale of one vessel. During the year ended December 31, 2014, we recorded a net gain of $2.5 million from the sale of three vessels.
Interest Income
During the years ended December 31, 2015 and 2014, interest income was $1.3 million and $0.8 million, respectively.
Interest and Finance Costs
Interest and finance costs decreased by 3.5%, or $3.3 million, to $92.3 million during the year ended December 31, 2015, from $95.6 million during the year ended December 31, 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 and a reduction in the write off of finance costs relating to loan refinancing during 2015; 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 year ended December 31, 2015, the equity loss on investments was $0.5 million. The equity loss on investments represents our share of the net losses of nineteen 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 loss of $0.5 million is mainly attributable to General and administrative expenses of $0.8 million incurred by 12 jointly-owned companies that had vessels under construction during the year ended December 31, 2015.
Gain on Derivative Instruments
The fair value of our interest rate derivative instruments which were outstanding as of December 31, 2015, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2015, the fair value of these interest rate derivative instruments in aggregate amounted to a liability of $52.1 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 year ended December 31, 2015, a net gain of $11.3 million has been included in OCI and a net gain of $18.2 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 year ended December 31, 2015. Furthermore, during the year ended December 31, 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
Years ended December 31, 2015 and 2014
Condensed cash flows Year ended December 31,
------------------------
(Expressed in millions of U.S. dollars) 2014 2015
----------- -----------
Net Cash Provided by Operating Activities $ 243.3 $ 244.7
Net Cash Used in Investing Activities $ (119.3) $ (43.0)
Net Cash Used in Financing Activities $ (104.3) $ (214.7)
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities increased by $1.4 million to $244.7 million for the year ended December 31, 2015, compared to $243.3 for the year ended December 31, 2014. The increase was primarily attributable to the (i) increased cash from operations of $2.0 million, (ii) decreased payments for interest (including swap payments) during the period of $7.6 million and (iii) decreased special survey costs of $0.7 million; partly offset by 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 $9.8 million.
Net Cash Used in Investing Activities
Net cash used in investing activities was $43.0 million in the year ended December 31, 2015, which mainly consisted of $38.8 million in advance payments for the construction of five 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, $0.6 million for advance payment for the acquisition of one secondhand vessel pursuant to the Framework Agreement and $4.7 million we received from the sale for scrap of MSC Challenger.
Net cash used in investing activities was $119.3 million in the year ended December 31, 2014, which consisted of: (a) $59.1 million for capitalized costs and advance payments for the construction and delivery of three newbuild vessels, (b) $29.0 million in payments primarily for the acquisition of three secondhand vessels, (c) $53.3 million (net of $31.8 million we received as dividend distributions) in payments, pursuant to the Framework Agreement with York 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 $214.7 million in the year ended December 31, 2015, which mainly consisted of (a) $196.9 million of indebtedness that we repaid, (b) $13.5 million we repaid relating to our sale and leaseback agreements, (c) $86.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2014, first quarter of 2015, second quarter of 2015 and third quarter of 2015, and (d) $3.8 million we paid for dividends to holders of our Series B Preferred Stock and $8.5 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, April 15, 2015 to July 14, 2015 and July 15, 2015 to October 14, 2015 and $3.7 million we paid for dividends to holders of our Series D Preferred Stock for the period from May 13, 2015 to July 14, 2015 and July 15, 2015 to October 14, 2015 and (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 $104.3 million in the year ended December 31, 2014, which mainly consisted of: (a) $356.6 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) $9.6 million we repaid regarding our sale and leaseback agreements, (e) $83.0 million we paid for dividends to holders of our common stock for the fourth quarter of 2013, the first quarter of 2014, the second quarter of 2014 and the third quarter of 2014, (f) $3.8 million we paid for dividends to holders of our Series B Preferred Stock for the period from October 15, 2013 to October 14, 2014, and $6.2 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 October 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
As previously disclosed, on November 27, 2015 we signed a Framework Agreement with Costamare Shipping (the "Costamare Shipping Framework Agreement") and a Services Agreement with Costamare Services (the "Services Agreement" and, together with the Costamare Shipping Framework Agreement, the "Management Agreements"), both shipmanagement companies controlled by members of the family of our Chairman and chief executive officer, Konstantinos Konstantakopoulos, 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 are substantially the same as the services and fees under the Group Management Agreement. On November 27, 2015, the Company entered into 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 each of which have received or may receive shares of our common stock as fee compensation under the Management Agreements.
Liquidity and Capital Expenditures
Cash and cash equivalents
As of December 31, 2015, we had a total cash liquidity of $162.8 million, consisting of cash, cash equivalents and restricted cash.
Debt-free vessels
As of January 27, 2016, 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 January 27, 2016, we had outstanding equity commitments relating to our twelve contracted newbuilds aggregating approximately $108.3 million payable until the vessels are delivered. The amounts represent our interest in the relevant jointly-owned entities with York. Approximately $86.4 million of the above mentioned commitments, relate to five 11,000 TEU vessels on order, for which we are in discussion to finance with several banks. Additionally, we had an outstanding commitment of $2.5 million, relating to the purchase price of the Helgoland Trader, which is expected to be paid on delivery of the vessel.
Conference Call details:
On Thursday, January 28, 2016, 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 February 29, 2016. 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: 10079587.
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 42 years of history in the international shipping industry and a fleet of 72 containerships, with a total capacity of approximately 467,000 TEU, including 12 newbuild containerships on order and one secondhand vessel to be delivered. Eighteen of our containerships, including 12 newbuilds on order and one secondhand vessel to be delivered, 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 January 27, 2016, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Agreement with York and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.
----------------------------------------------------------------------------
Average
Daily
Charter
Current Rate
Time Daily Expiration Until
Vessel Name Charterer Year Capacity Charter Charter of Charter Earliest
Built (TEU) Term(1) Rate (1) Expiry of
(U.S. Charter
dollars) (U.S.
dollars)
(2)
----------------------------------------------------------------------------
1 COSCO COSCO 2006 9,469 12 years 36,400 December 36,400
GUANGZHOU 2017
----------------------------------------------------------------------------
2 COSCO COSCO 2006 9,469 12 years 36,400 January 36,400
NINGBO 2018
----------------------------------------------------------------------------
3 COSCO COSCO 2006 9,469 12 years 36,400 February 36,400
YANTIAN 2018
----------------------------------------------------------------------------
4 COSCO COSCO 2006 9,469 12 years 36,400 April 2018 36,400
BEIJING
----------------------------------------------------------------------------
5 COSCO COSCO 2006 9,469 12 years 37,519 May 2018 37,519
HELLAS
----------------------------------------------------------------------------
6 MSC AZOV MSC 2014 9,403 10 years 43,000 November 43,000
2023
----------------------------------------------------------------------------
7 MSC AJACCIO MSC 2014 9,403 10 years 43,000 February 43,000
2024
----------------------------------------------------------------------------
8 MSC AMALFI MSC 2014 9,403 10 years 43,000 March 2024 43,000
----------------------------------------------------------------------------
9 MSC ATHENS MSC 2013 8,827 10 years 42,000 January 42,000
2023
----------------------------------------------------------------------------
10 MSC ATHOS MSC 2013 8,827 10 years 42,000 February 42,000
2023
----------------------------------------------------------------------------
11 VALOR Evergreen 2013 8,827 7.0 41,700 April 41,700
years(i) 2020(i)
----------------------------------------------------------------------------
12 VALUE Evergreen 2013 8,827 7.0 41,700 April 41,700
years(i) 2020(i)
----------------------------------------------------------------------------
13 VALIANT Evergreen 2013 8,827 7.0 41,700 June 41,700
years(i) 2020(i)
----------------------------------------------------------------------------
14 VALENCE Evergreen 2013 8,827 7.0 41,700 July 41,700
years(i) 2020(i)
----------------------------------------------------------------------------
15 VANTAGE Evergreen 2013 8,827 7.0 41,700 September 41,700
years(i) 2020(i)
----------------------------------------------------------------------------
16 NAVARINO PIL 2010 8,531 1.0 year 10,500 November 10,500
2016(ii)
----------------------------------------------------------------------------
17 MAERSK A.P. 1997 7,403 10 years 37,000 December 37,000
KAWASAKI Moller- 2017
(iii) Maersk
----------------------------------------------------------------------------
18 MAERSK KURE A.P. 1996 7,403 10 years 37,000 December 37,000
(iii) Moller- 2017
Maersk
----------------------------------------------------------------------------
19 MAERSK A.P. 1997 7,403 10 years 37,000 February 37,000
KOKURA Moller- 2018
(iii) Maersk
----------------------------------------------------------------------------
20 MSC METHONI MSC 2003 6,724 10 years 29,000 September 29,000
2021
----------------------------------------------------------------------------
21 SEALAND NEW A.P. 2000 6,648 11 years 26,100 March 2018 26,100
YORK Moller-
Maersk
----------------------------------------------------------------------------
22 MAERSK KOBE A.P. 2000 6,648 11 years 26,100 May 2018 26,100
Moller-
Maersk
----------------------------------------------------------------------------
23 SEALAND A.P. 2000 6,648 11 years 26,100 June 2018 26,100
WASHINGTON Moller-
Maersk
----------------------------------------------------------------------------
24 SEALAND A.P. 2000 6,648 11 years 26,100 August 26,100
MICHIGAN Moller- 2018
Maersk
----------------------------------------------------------------------------
25 SEALAND A.P. 2000 6,648 11 years 26,100 October 26,100
ILLINOIS Moller- 2018
Maersk
----------------------------------------------------------------------------
26 MAERSK A.P. 2003 6,644 11 years 26,100 November 26,100
KOLKATA Moller- 2019
Maersk
----------------------------------------------------------------------------
27 MAERSK A.P. 2003 6,644 11 years 38,461 February 26,862
KINGSTON Moller- (4) 2020
Maersk
----------------------------------------------------------------------------
28 MAERSK A.P. 2003 6,644 11 years 38,418 April 2020 27,190
KALAMATA Moller- (5)
Maersk
----------------------------------------------------------------------------
29 VENETIKO 2003 5,928
----------------------------------------------------------------------------
30 ENSENADA 2001 5,576
EXPRESS(*)
----------------------------------------------------------------------------
31 MSC ROMANOS MSC 2003 5,050 5.3 years 28,000 November 28,000
2016
----------------------------------------------------------------------------
32 ZIM NEW ZIM 2002 4,992 14 years 14,534 September 14,534
YORK 2016(6)
----------------------------------------------------------------------------
33 ZIM ZIM 2002 4,992 14 years 14,534 September 14,534
SHANGHAI 2016(6)
----------------------------------------------------------------------------
34 ZIM PIRAEUS ZIM 2004 4,992 10 years 12,500 July 2016 12,500
----------------------------------------------------------------------------
35 OAKLAND Hapag 2000 4,890 8.0 years 30,500 September 30,500
EXPRESS Lloyd 2016
----------------------------------------------------------------------------
36 HALIFAX Hapag 2000 4,890 8.0 years 30,500 October 30,500
EXPRESS Lloyd 2016
----------------------------------------------------------------------------
37 SINGAPORE Hapag 2000 4,890 8.0 years 30,500 July 2016 30,500
EXPRESS Lloyd
----------------------------------------------------------------------------
38 MSC MSC 1988 4,828 7.8 years 20,000 August 20,000
MANDRAKI 2017
----------------------------------------------------------------------------
39 MSC MYKONOS MSC 1988 4,828 8.2 years 20,000 September 20,000
2017
----------------------------------------------------------------------------
40 MSC ULSAN MSC 2002 4,132 5.3 years 16,500 March 2017 16,500
----------------------------------------------------------------------------
41 MSC KORONI MSC 1998 3,842 9.5 years 13,500 September 13,500
(7) 2018
----------------------------------------------------------------------------
42 MSC ITEA MSC 1998 3,842 1.5 years 10,000 February 10,000
2016
----------------------------------------------------------------------------
43 KARMEN Evergreen 1991 3,351 1.5 years 11,000 March 2016 11,000
----------------------------------------------------------------------------
44 MARINA Evergreen 1992 3,351 0.5 years 8,800 May 2016 8,800
----------------------------------------------------------------------------
45 LAKONIA Evergreen 2004 2,586 2.0 years 8,600 February 8,600
2017
----------------------------------------------------------------------------
46 ELAFONISOS A.P. 1999 2,526 1.2 years 6,500 January 6,500
(*)(8) Moller- 2016
Maersk
----------------------------------------------------------------------------
47 AREOPOLIS Zim 2000 2,474 0.3 years 6,000 March 2016 6,000
----------------------------------------------------------------------------
48 HELGOLAND A.P. 1998 2,472 0.5 years 8,750 March 2016 8,750
TRADER Moller-
(*)(9) Maersk
----------------------------------------------------------------------------
49 MESSINI Evergreen 1997 2,458 3.3 years 7,900 August 6,051
(10) 2016
----------------------------------------------------------------------------
50 MSC REUNION MSC 1992 2,024 8.0 years 11,200 July 2016 11,200
----------------------------------------------------------------------------
51 MSC NAMIBIA MSC 1991 2,023 8.8 years 11,200 July 2016 11,200
II
----------------------------------------------------------------------------
52 MSC SIERRA MSC 1991 2,023 7.7 years 11,200 June 2016 11,200
II
----------------------------------------------------------------------------
53 MSC PYLOS MSC 1991 2,020 6.0 years 7,250 January 6,314
(11) 2017
----------------------------------------------------------------------------
54 PADMA(*) Yang Ming 1998 1,645 1.2 years 7,400 April 2016 7,400
----------------------------------------------------------------------------
55 NEAPOLIS 2000 1,645
----------------------------------------------------------------------------
56 ARKADIA(*) Evergreen 2001 1,550 2.0 years 10,600 August 10,600
2017
----------------------------------------------------------------------------
57 PROSPER Sea 1996 1,504 0.7 years 8,400 February 8,400
Consortium 2016
----------------------------------------------------------------------------
58 ZAGORA MSC 1995 1,162 4.7 years 7,400 May 2016 7,400
----------------------------------------------------------------------------
59 PETALIDI(*) CMA CGM 1994 1,162 2.0 years 7,600 June 2016 7,600
----------------------------------------------------------------------------
60 STADT CMA CGM 2001 1.078 2.7 years 8,000 March 2016 8,800
LUEBECK (12)
----------------------------------------------------------------------------
Newbuilds
----------------------------------------------------------------------------
Capacity Expected
Vessel Name Shipyard (TEU) Charterer Delivery(3)
----------------------------------------------------------------------------
1 NCP0113(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
----------------------------------------------------------------------------
2 NCP0114(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
----------------------------------------------------------------------------
3 NCP0115(*) Hanjin Subic Bay 11,010 2nd Quarter 2016
----------------------------------------------------------------------------
4 NCP0116(*) Hanjin Subic Bay 11,010 3rd Quarter 2016
----------------------------------------------------------------------------
5 NCP0152(*) Hanjin Subic Bay 11,010 1st Quarter 2017
----------------------------------------------------------------------------
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 4th Quarter 2016
----------------------------------------------------------------------------
11 YZJ1206(*) Jiangsu New Yangzi 3,800 Hamburg Süd 1st Quarter 2018
----------------------------------------------------------------------------
12 YZJ1207 (*) Jiangsu New Yangzi 3,800 Hamburg Süd 2nd Quarter 2018
----------------------------------------------------------------------------
(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 January 27, 2016 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) Based on latest shipyard production schedule, subject to change.
(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 per day.
(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 will commence its new charter with CMA CGM for a period of
minimum 2 and maximum 10 months on February 6, 2016 at a daily rate of
$6,000.
(9) The vessel is expected to be delivered to us no later than April 30,
2016.
(10) This charter rate changes on February 1, 2016 to $6,000 per day until
the earliest redelivery date.
(11) This charter rate changes on February 1, 2016 to $6,300 per day until
the earliest redelivery date.
(12) 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 January 27, 2016, 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 a period of 12 months.
(iii) 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
Three-months ended
Years ended December 31, December 31,
------------------------ ------------------------
(Expressed in thousands
of U.S. dollars, except
share and per share
amounts) 2014 2015 2014 2015
----------- ----------- ----------- -----------
REVENUES:
Voyage revenue $ 483,995 $ 490,378 $ 120,866 $ 122,276
EXPENSES:
Voyage expenses (3,608) (2,831) (1,018) (929)
Voyage expenses -
related parties (3,629) (3,673) (905) (916)
Vessels' operating
expenses (120,815) (117,193) (30,423) (28,639)
General and
administrative expenses (7,708) (8,775) (3,203) (4,719)
Management fees -
related parties (18,469) (18,877) (4,270) (4,262)
General and
administrative expenses
- non-cash component - (8,623) - (1,404)
Amortization of dry-
docking and special
survey costs (7,814) (7,425) (2,238) (1,991)
Depreciation (105,787) (101,645) (26,942) (25,611)
Amortization of prepaid
lease rentals (4,024) (4,982) (1,256) (1,256)
Gain on sale / disposals
of vessels 2,543 1,688 - 1,688
Foreign exchange gains /
(losses) 7 (129) 80 (144)
----------- ----------- ----------- -----------
Operating income $ 214,691 $ 217,913 $ 50,691 $ 54,093
----------- ----------- ----------- -----------
OTHER INCOME /
(EXPENSES):
Interest income $ 815 $ 1,373 $ 284 $ 320
Interest and finance
costs (95,562) (92,276) (19,961) (20,889)
Swaps breakage costs (10,192) - - -
Equity loss on
investments (3,428) (529) (1,191) (567)
Other 3,294 427 451 23
Gain on derivative
instruments 5,469 16,856 526 5,348
----------- ----------- ----------- -----------
Total other income /
(expenses) $ (99,604) $ (74,149) $ (19,891) $ (15,765)
----------- ----------- ----------- -----------
Net Income $ 115,087 $ 143,764 $ 30,800 $ 38,328
=========== =========== =========== ===========
Earnings allocated to
Preferred Stock (11,909) (17,903) (3,078) (5,266)
----------- ----------- ----------- -----------
Net Income available to
common stockholders $ 103,178 $ 125,861 $ 27,722 $ 33,062
=========== =========== =========== ===========
Earnings per common
share, basic and
diluted $ 1.38 $ 1.68 $ 0.37 $ 0.44
=========== =========== =========== ===========
Weighted average number
of shares, basic and
diluted 74,800,000 75,027,474 74,800,000 75,250,426
=========== =========== =========== ===========
COSTAMARE INC.
Consolidated Balance Sheets
As of As of
December 31, December 31,
------------- -------------
(Expressed in thousands of U.S. dollars) 2014 2015
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 113,089 $ 100,105
Restricted cash 14,264 14,007
Accounts receivable 2,365 1,111
Inventories 11,565 10,578
Due from related parties 4,447 6,012
Fair value of derivatives - 352
Insurance claims receivable 1,759 3,906
Prepaid lease rentals 4,982 4,982
Accrued charter revenue 511 457
Prepayments and other 4,993 3,545
------------- -------------
Total current assets $ 157,975 $ 145,055
------------- -------------
FIXED ASSETS, NET:
Capital leased assets $ 250,547 $ 242,966
Vessels, net 2,098,820 2,004,650
------------- -------------
Total fixed assets, net $ 2,349,367 $ 2,247,616
------------- -------------
NON-CURRENT ASSETS:
Investment in affiliates $ 73,579 $ 117,931
Prepaid lease rentals, non-current 40,811 35,830
Deferred charges, net 28,675 28,815
Accounts receivable, non-current 1,425 1,425
Restricted cash 49,818 48,708
Accrued charter revenue 1,025 569
Other non-current assets 12,065 12,612
------------- -------------
Total assets $ 2,714,740 $ 2,638,561
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 192,951 $ 185,259
Accounts payable 6,296 4,047
Due to related parties - 371
Capital lease obligations 13,508 14,534
Accrued liabilities 19,119 15,225
Unearned revenue 12,929 18,356
Fair value of derivatives 43,287 32,462
Other current liabilities 2,286 1,712
------------- -------------
Total current liabilities $ 290,376 $ 271,966
------------- -------------
NON-CURRENT LIABILITIES
Long-term debt, net of current portion $ 1,326,990 $ 1,137,832
Capital lease obligations, net of current
portion 233,625 219,090
Fair value of derivatives, net of current
portion 31,653 19,655
Unearned revenue, net of current portion 29,454 26,508
------------- -------------
Total non-current liabilities $ 1,621,722 $ 1,403,085
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $ - $ -
Common stock 8 8
Additional paid-in capital 858,665 963,904
Retained earnings 103 44,247
Accumulated other comprehensive loss (56,134) (44,649)
------------- -------------
Total stockholders' equity $ 802,642 $ 963,510
------------- -------------
Total liabilities and stockholders' equity $ 2,714,740 $ 2,638,561
============= =============
Company Contacts:
Gregory Zikos
Chief Financial Officer
Konstantinos Tsakalidis
Business Development
Costamare Inc., Athens, Greece
Tel: (+30) 210-949-0050
Email: ir@costamare.com
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