SOURCE: Costamare Inc.

Costamare Inc.

October 24, 2016 16:15 ET

Costamare Inc. Reports Results for the Third Quarter and Nine-Months Ended September 30, 2016

MONACO--(Marketwired - Oct 24, 2016) - Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the third quarter and nine-months ended September 30, 2016.

  • Voyage revenues adjusted on a cash basis of $115.5 million and $353.2 million for the three and nine-months ended September 30, 2016, respectively.

  • Adjusted EBITDA of $80.8 million and $250.1 million for the three and nine-months ended September 30, 2016, respectively.

  • Adjusted Net income available to common stockholders of $28.1 million or $0.37 per share and $92.1 million or $1.21 per share for the three and nine-months ended September 30, 2016, respectively.

See "Financial Summary" and "Non-GAAP Measures" below for additional detail.

New Business Developments

A. New charter agreements

  • The Company entered into the following charter arrangements:
    • Agreed to extend the charter of the 2010-built, 8,531 TEU containership Navarino with PIL for a period of 12 to 18 months starting from November 13, 2016, at a daily rate of $9,000.
    • Charterers declared their second round voyage option and extended the charter of the 1998-built, 3,842 TEU containership Itea for a period expiring at the charterer's option during the period from November 20, 2016 through November 25, 2016, at a daily rate of $6,250.
    • Agreed to extend the charter of the 2000-built, 2,474 TEU containership Areopolis with Evergreen for a period of 6 to 10 months starting from September 20, 2016, at a daily rate of $5,950.
    • Agreed to extend the charter of the 1992-built, 3,351 TEU containership Marina with Evergreen for a period expiring at the charterer's option during the period from November 30, 2016 through February 28, 2017, at a daily rate of $5,500.
    • Agreed to charter the 1998-built, 1,645 TEU containership Padma with Evergreen for a period of 30 to 90 days starting from August 29, 2016, at a daily rate of $6,500. Subsequently, agreed to charter the vessel with Evergreen for a further period of 6 to 9 months at a daily rate of $7,000, starting from November 22, 2016.
    • Agreed to charter the 1996-built, 1,504 TEU containership Prosper with Sea Consortium for a period of 3 to 6 months starting from August 16, 2016, at a daily rate of $6,900.
    • Agreed to extend the charter of the 1994-built, 1,162 TEU containership Petalidi with CMA CGM for a period of 8 to 12 months starting from October 3, 2016, at a daily rate of $6,950.
    • Agreed to charter the 2001-built, 1,078 TEU containership Stadt Luebeck with Sea Consortium for a period of 32 to 90 days starting from August 26, 2016, at a daily rate of $6,500.

B. Newbuild vessel deliveries

  • On September 5, 2016, October 4, 2016 and October 24, 2016, respectively, we accepted delivery of the 14,424 TEU containerships Talos, Taurus and Theseus, three containerships acquired pursuant to our joint venture with York. The vessels commenced their 10 year time charters with Evergreen. Costamare holds a 40% interest in the entities that own each vessel. The deliveries mark the completion of this particular project.

  • On September 30, 2016, we accepted delivery of the 11,010 TEU containership Cape Akritas acquired pursuant to our joint venture with York. 

C. Newbuild vessel delivery deferrals

  • In September 2016, we reached an agreement with Hanjin Heavy Industries to defer the deliveries of the remaining four 11,010 TEU containerships ordered pursuant to our joint venture with York. Delivery of the vessels is now scheduled for the first quarter 2017.

D. Dividend announcements

  • On October 4, 2016, we declared a dividend for the third quarter ended September 30, 2016, of $0.10 per share on our common stock, payable on November 4, 2016, to stockholders of record on October 21, 2016.

  • On October 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 October 17, 2016 to holders of record on October 14, 2016.

E. New dividend reinvestment plan

  • On July 6, 2016, we implemented a dividend reinvestment plan (the "plan"). The plan offers holders of Company common stock the opportunity to purchase additional shares by having their cash dividends automatically reinvested in Company common stock. Participation in the plan is optional, and shareholders who decide not to participate in the plan will continue to receive cash dividends, as declared and paid in the usual manner.

    The terms and conditions of the plan are set forth under the heading "Description of Plan" in the prospectus available as part of the registration statement filed by the Company with the Securities and Exchange Commission (the "SEC") on the SEC's website at http://www.sec.gov.

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

"During the third quarter the Company delivered solid results.

On the chartering side, we continue to employ our vessels, having chartered in total eight ships opening during the last three months.

Regarding our new building program, we have now accepted delivery of all five 14,000 TEU vessels, which have commenced their 10-year charters. We have also accepted delivery of one 11,000 TEU vessel, bought together with our joint venture partners, and we have deferred the delivery of the remaining four vessels for the first quarter of 2017.

As mentioned in our latest press release of this month, our goal is to strengthen the Company and enhance long term shareholder value.

As committed shareholders, members of the founding family, currently controlling an interest of above 65% of the Company, have each reinvested in full their cash dividends since the inception of the Company's dividend reinvestment plan."

Financial Summary

             
  Nine-month period ended September 30,   Three-month period ended September 30,  
(Expressed in thousands of U.S. dollars, except share and per share data): 2015 2016   2015 2016  
                 
                     
Voyage revenue $ 368,102 $ 358,055   $ 124,033 $ 118,256  
Accrued charter revenue (1) $ 2,029 $ (4,894 ) $ 643 $ (2,827 )
Voyage revenue adjusted on a cash basis (2) $ 370,131 $ 353,161   $ 124,676 $ 115,429  
                     
Adjusted EBITDA (3) $ 262,018 $ 250,064   $ 88,690 $ 80,841  
                     
Adjusted Net Income available to common stockholders (3) $ 97,579 $ 92,081   $ 34,569 $ 28,122  
Weighted Average number of shares   74,952,340   75,814,641     75,100,826   76,486,847  
Adjusted Earnings per share (3) $ 1.30 $ 1.21   $ 0.46 $ 0.37  
                     
EBITDA (3) $ 250,669 $ 232,962   $ 82,454 $ 67,999  
Net Income $ 105,436 $ 92,710   $ 34,823 $ 20,672  
Net Income available to common stockholders $ 92,799 $ 76,913   $ 29,499 $ 15,348  
Weighted Average number of shares   74,952,340   75,814,641     75,100,826   76,486,847  
Earnings per share $ 1.24 $ 1.01   $ 0.39 $ 0.20  
                     

(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, 2016 and 2015. 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 stockholders and Adjusted Earnings per Share

                 
  Nine-month period ended September 30,   Three-month period ended September 30,  
(Expressed in thousands of U.S. dollars, except share and per share data) 2015   2016   2015   2016  
             
Net Income $ 105,436   $ 92,710   $ 34,823   $ 20,672  
Earnings allocated to Preferred Stock   (12,637 )   (15,797 )   (5,324 )   (5,324 )
Net Income available to common stockholders   92,799     76,913     29,499     15,348  
Accrued charter revenue   2,029     (4,894 )   643     (2,827 )
(Gain)/Loss on sale / disposal of vessels   -     4,440     -     4,440  
Swaps breakage cost   -     9,404     -     9,404  
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments   585     -     145     -  
General and administrative expenses - non-cash component   7,219     4,114     1,836     1,368  
Non-recurring, non-cash write-off of loan deferred financing costs   -     586     -     586  
Amortization of prepaid lease rentals   3,726     4,579     1,256     2,102  
Realized Loss / (Gain) on Euro/USD forward contracts (1)   2,729     (898 )   775     (220 )
(Gain)/ Loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1)   (11,508 )   (2,163 )   415     (2,079 )
Adjusted Net income available to common stockholders $ 97,579   $ 92,081   $ 34,569   $ 28,122  
Adjusted Earnings per Share $ 1.30   $ 1.21   $ 0.46   $ 0.37  
Weighted average number of shares   74,952,340     75,814,641     75,100,826     76,486,847  
                         

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent net income after earnings allocated to preferred stock, but before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized loss / (gain) on Euro/USD forward contracts, loss on sale / disposal of vessels, swaps breakage cost, 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, Non-recurring, non-cash write-off of loan deferred financing costs, 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 September 30,   Three-month period ended September 30,  
(Expressed in thousands of U.S. dollars) 2015   2016   2015   2016  
                         
                         
Net Income $ 105,436   $ 92,710   $ 34,823   $ 20,672  
Interest and finance costs   61,092     55,090     19,222     18,414  
Interest income   (1,053 )   (1,140 )   (321 )   (403 )
Depreciation   76,034     75,786     25,623     25,217  
Amortization of prepaid lease rentals   3,726     4,579     1,256     2,102  
Amortization of dry-docking and special survey costs   5,434     5,937     1,851     1,997  
EBITDA   250,669     232,962     82,454     67,999  
Accrued charter revenue   2,029     (4,894 )   643     (2,827 )
(Gain)/Loss on sale / disposal of vessels   -     4,440     -     4,440  
Swaps breakage cost   -     9,404     -     9,404  
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments   585     -     145     -  
General and administrative expenses - non-cash component   7,219     4,114     1,836     1,368  
Non-recurring, non-cash write-off of loan deferred financing costs   -     586     -     586  
Realized Loss / (Gain) on Euro/USD forward contracts (1)   2,729     (898 )   775     (220 )
(Gain) / Loss on derivative instruments, including interest accrued and realized on non-hedging derivative instruments (1)   (1,213 )   4,350     2,837     91  
Adjusted EBITDA $ 262,018   $ 250,064   $ 88,690   $ 80,841  
                         

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, swaps breakage cost, realized loss / (gain) on Euro/USD forward contracts, 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, Non-recurring, non-cash write-off of loan deferred financing costs 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, 2016 compared to the three-month period ended September 30, 2015

During the three-month periods ended September 30, 2016 and 2015, we had an average of 53.4 and 55.0 vessels, respectively, in our fleet. In the three-month period ended September 30, 2016, we sold the 3,351 TEU vessel Karmen. In the three-month periods ended September 30, 2016 and 2015, our fleet ownership days totaled 4,912 and 5,060 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,
except percentages)
Three-month period ended September 30,     Change   Percentage
Change
 
2015     2016    
       
                           
Voyage revenue $ 124.0     $ 118.3     $ (5.7 ) (4.6 %)
Voyage expenses   (0.9 )     (0.4 )     (0.5 ) (55.6 %)
Voyage expenses - related parties   (0.9 )     (0.9 )     -   -  
Vessels' operating expenses   (28.8 )     (27.2 )     (1.6 ) (5.6 %)
General and administrative expenses   (1.4 )     (1.4 )     -   -  
Management fees - related parties   (4.9 )     (4.9 )     -   -  
General and administrative expenses - non-cash component   (1.8 )     (1.4 )     (0.4 ) (22.2 %)
Amortization of dry-docking and special survey costs   (1.9 )     (2.0 )     0.1   5.3 %
Depreciation   (25.6 )     (25.2 )     (0.4 ) (1.6 %)
Amortization of prepaid lease rentals   (1.2 )     (2.1 )     0.9   75.0 %
Loss on sale / disposal of vessels   -       (4.4 )     4.4   100.0 %
Foreign exchange gains/ (losses)   (0.2 )     (0.1 )     (0.1 ) (50.0 %)
Interest income   0.3       0.4       0.1   33.3 %
Interest and finance costs   (19.2 )     (18.4 )     (0.8 ) (4.2 %)
Swaps breakage cost   -       (9.4 )     9.4   100.0 %
Equity gain / (loss) on investments   0.1       (0.1 )     (0.2 ) (200.0 %)
Loss on derivative instruments   (2.8 )     (0.1 )     (2.7 ) (96.4 %)
Net Income $ 34.8     $ 20.7              
                   
(Expressed in millions of U.S. dollars,
except percentages)
Three-month period ended September 30,     Change   Percentage
Change
 
2015   2016    
                         
Voyage revenue $ 124.0   $ 118.3     $ (5.7 ) (4.6 %)
Accrued charter revenue   0.7     (2.8 )     (3.5 ) (500.0 %)
Voyage revenue adjusted on a cash basis $ 124.7   $ 115.5     $ (9.2 ) (7.4 %)
             
Vessels operational data Three-month period ended September 30,     Percentage
Change
 
2015 2016 Change  
             
Average number of vessels 55.0 53.4 (1.6 ) (2.9 %)
Ownership days 5,060 4,912 (148 ) (2.9 %)
Number of vessels under dry-docking 4 - (4 )    

Voyage Revenue

Voyage revenue decreased by 4.6%, or $5.7 million, to $118.3 million during the three-month period ended September 30, 2016, from $124.0 million during the three-month period ended September 30, 2015. The decrease was mainly attributable (i) to decreased charter rates for certain of our vessels during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015, (ii) to revenue not earned by two vessels sold for demolition in November 2015 and in August 2016, respectively and (iii) to decreased revenue days of our fleet during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015 ; partly offset by decreased off-hire days of our fleet during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015. 

Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 7.4%, or $9.2 million, to $115.5 million during the three-month period ended September 30, 2016, from $124.7 million during the three-month period ended September 30, 2015. The decrease was mainly attributable (i) to decreased charter rates for certain of our vessels during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015, (ii) to revenue not earned by two vessels sold for demolition in November 2015 and in August 2016, respectively and (iii) to decreased revenue days of our fleet during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015; partly offset by decreased off-hire days of our fleet during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015.

Voyage Expenses

Voyage expenses were $0.4 million and $0.9 million, during the three-month periods ended September 30, 2016 and 2015, respectively. 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 in the amount of $0.9 million during the three-month periods ended September 30, 2016 and 2015, represent fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping Company S.A. ("Costamare Shipping") and by Costamare Shipping Services Ltd. ("Costamare Services") pursuant to the Framework Agreement between Costamare Shipping and us dated November 2, 2015 (the "Framework Agreement"), the Services Agreement between Costamare Services and our vessel-owning subsidiaries dated November 2, 2015 (the "Services Agreement") and the individual ship-management agreements pertaining to each vessel. 

Vessels' Operating Expenses

Vessels' operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 5.6%, or $1.6 million, to $27.2 million during the three-month period ended September 30, 2016, from $28.8 million during the three-month period ended September 30, 2015.

General and Administrative Expenses

General and administrative expenses were $1.4 million for the three-month period ended September 30, 2016 and 2015. General and administrative expenses for the three-month periods ended September 30, 2016 and 2015, included $0.63 million which is part of the annual fee that Costamare Services receives based on the Services Agreement, effected on November 2, 2015. Prior to November 2, 2015, this annual fee, in the same amount, was charged by Costamare Shipping pursuant to the Amended and Restated Group Management Agreement (the "Group Management Agreement"), which was effective from January 1, 2015 until November 2, 2015.

Management Fees -- related parties

Management fees paid to our managers were $4.9 million during each of the three-month periods ended September 30, 2016 and 2015, pursuant to the Framework Agreement, in effect from November 2, 2015, and the Group Management Agreement, in effect prior to November 2, 2015, respectively.

General and Administrative expenses -- non-cash component

General and administrative expenses -- non-cash component for the three-month period ended September 30, 2016 amounted to $1.4 million, representing the value of the shares issued to Costamare Services on September 30, 2016, pursuant to the Services Agreement. For the three-month period ended September 30, 2015, the non-cash component of general and administrative expenses was $1.8 million, representing the value of shares issued to Costamare Shipping on September 30, 2015, pursuant to the Group Management Agreement. The decrease was attributable to the decrease in the fair value of the shares issued on September 30, 2016 compared to the shares issued on September 30, 2015.

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 September 30, 2016 and $1.9 million for the three-month period ended September 30, 2015. During the three-month period ended September 30, 2016, no vessel underwent any special survey. During the three-month period ended September 30, 2015, four vessels underwent and completed their special survey.

Depreciation

Depreciation expense decreased by 1.6% or $0.4 million, to $25.2 million during the three-month period ended September 30, 2016, from $25.6 million during the three-month period ended September 30, 2015.

Amortization of Prepaid Lease Rentals

Amortization of prepaid lease rentals was $2.1 million during the three-month period ended September 30, 2016. Amortization of prepaid lease rentals was $1.2 million during the three-month period ended September 30, 2015.

Loss on sale / disposal of vessels

During the three-month period ended September 30, 2016, we recorded a loss of $4.4 million from the sale of one vessel, the Karmen. There were no vessels disposed of during the three-month period ended September 30, 2015.

Foreign Exchange Gains / (Losses)

Foreign exchange losses were $0.1 million and $0.2 million during the three-month periods ended September 30, 2016 and 2015, respectively.

Interest Income

Interest income amounted to $0.4 million and $0.3 million for the three-month periods ended September 30, 2016 and 2015, respectively.

Interest and Finance Costs

Interest and finance costs decreased by 4.2%, or $0.8 million, to $18.4 million during the three-month period ended September 30, 2016, from $19.2 million during the three-month period ended September 30, 2015. The decrease was mainly attributable to the decreased average loan balance during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015.

Swaps Breakage Cost

During the three-month period ended September 30, 2016, we terminated one interest rate derivative instrument that qualified for hedge accounting and we paid the counterparty breakage costs of $9.4 million.

Equity Gain / (Loss) on Investments

The equity loss on investments of $0.1 million for the three-month period ended September 30, 2016, represents our share of the net losses of nineteen jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015 (the "Framework Deed"), between the Company and a wholly-owned subsidiary, on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, "York") and is mainly attributable to the pre-delivery expenses charged to certain vessels that were under construction during the three-month period ended September 30, 2016. We hold a range of 25% to 49% of the capital stock of these companies.

Loss on Derivative Instruments

The fair value of our 19 interest rate derivative instruments which were outstanding as of September 30, 2016 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2016, the fair value of these 19 interest rate derivative instruments in aggregate amounted to a liability of $32.3 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, 2016, a net gain of $17.6 million has been included in OCI and a net gain of $0.1 million has been included in Gain / (Loss) on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended September 30, 2016.

Cash Flows
Three-month periods ended September 30, 2016 and 2015

Condensed cash flows Three-month period ended September 30,  
(Expressed in millions of U.S. dollars) 2015   2016  
Net Cash Provided by Operating Activities $ 59.3   $ 49.8  
Net Cash Used in Investing Activities $ (9.2 ) $ (16.9 )
Net Cash Used in Financing Activities $ (75.5 ) $ (25.9 )

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended September 30, 2016, decreased by $9.5 million to $49.8 million for the three-month period ended September 30, 2016, compared to $59.3 million for the three-month period ended September 30, 2015. The decrease was mainly attributable to the decreased cash from operations of $9.2 million; partly off-set by decreased special survey costs of $4.3 million during the three-month period ended September 30, 2016 compared to the three-month period ended September 30, 2015.

Net Cash Used in Investing Activities

Net cash used in investing activities was $16.9 million in the three-month period ended September 30, 2016, which mainly consisted of $20.4 million (net of $0.3 million we received as dividend distributions) in advance payments for the construction of five newbuild vessels, working capital injection in certain entities pursuant to the Framework Deed and $3.6 million in proceeds we received from the sale of one vessel.

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 Deed, and $3.2 million, paid for the acquisition of a secondhand vessel pursuant to the Framework Deed.

Net Cash Used in Financing Activities

Net cash used in financing activities was $25.9 million in the three-month period ended September 30, 2016, which mainly consisted of (a) $49.5 million of indebtedness that we repaid, (b) $7.2 million we repaid relating to our sale and leaseback agreements, (c) $110.8 million we paid for the prepayment of two of our credit facilities, (d) 151.8 million we received in connection with the sale and leaseback transaction concluded for two of our vessels, (e) $7.5 million we paid for dividends to holders of our common stock for the second quarter of 2016 and (f) $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") and $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock ("Series D Preferred Stock"), for the period from April 15, 2016 to July 14, 2016.

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 Preferred Stock, $2.1 million we paid for dividends to holders of our 8.500% 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 Preferred Stock for the period from May 13, 2015 to July 14, 2015.

Results of Operations

Nine-month period ended September 30, 2016, compared to the nine-month period ended September 30, 2015

During the nine-month periods ended September 30, 2016 and 2015, we had an average of 53.8 and 55.0 vessels, respectively in our fleet. In the nine-month period ended September 30, 2016, we sold the 3,351 TEU vessel Karmen. In the nine-month periods ended September 30, 2016 and 2015, our fleet ownership days totaled 14,740 and 15,015 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,
except percentages)
Nine-month period ended September 30,     Change   Percentage
Change
 
2015     2016    
       
                           
Voyage revenue $ 368.1     $ 358.1     $ (10.0 ) (2.7 %)
Voyage expenses   (1.9 )     (1.5 )     (0.4 ) (21.1 %)
Voyage expenses - related parties   (2.8 )     (2.7 )     (0.1 ) (3.6 %)
Vessels' operating expenses   (88.6 )     (79.6 )     (9.0 ) (10.2 %)
General and administrative expenses   (4.1 )     (4.3 )     0.2   4.9 %
Management fees - related parties   (14.6 )     (14.4 )     (0.2 ) (1.4 %)
General and administrative expenses - non-cash component   (7.2 )     (4.1 )     (3.1 ) (43.1 %)
Amortization of dry-docking and special survey costs   (5.4 )     (5.9 )     0.5   9.3 %
Depreciation   (76.0 )     (75.8 )     (0.2 ) (0.3 %)
Amortization of prepaid lease rentals   (3.7 )     (4.6 )     0.9   24.3 %
Loss on sale / disposal of vessels   -       (4.4 )     4.4   100.0 %
Foreign exchange gains / (losses)   -       (0.3 )     0.3   100.0 %
Interest income   1.1       1.1       -   -  
Interest and finance costs   (61.1 )     (55.1 )     (6.0 ) (9.8 %)
Swaps breakage cost   -       (9.4 )     9.4   100.0 %
Equity loss on investments   -       (0.5 )     0.5   100.0 %
Other   0.4       0.5       0.1   25.0 %
Gain / (Loss) on derivative instruments   1.2       (4.4 )     (5.6 ) (466.7 %)
Net Income $ 105.4     $ 92.7              
                           
(Expressed in millions of U.S. dollars,
except percentages)
Nine-month period ended September 30,     Change   Percentage
Change
 
2015   2016    
                         
Voyage revenue $ 368.1   $ 358.1     $ (10.0 ) (2.7 %)
Accrued charter revenue   2.0     (4.9 )     (6.9 ) (345.0 %)
Voyage revenue adjusted on a cash basis $ 370.1   $ 353.2     $ (16.9 ) (4.6 %)
                         
Vessels operational data Nine-month period ended September 30,    
Percentage
Change
 
2015 2016 Change  
             
Average number of vessels 55.0 53.8 (1.2 ) (2.2 %)
Ownership days 15,015 14,740 (275 ) (1.8 %)
Number of vessels under dry-docking 7 6 (1 )    
             

Voyage Revenue

Voyage revenue decreased by 2.7%, or $10.0 million, to $358.1 million during the nine-month period ended September 30, 2016, from $368.1 million during the nine-month period ended September 30, 2015. The decrease was mainly attributable (i) to decreased charter rates for certain of our vessels during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015, (ii) to revenue not earned by two vessels sold for demolition in November 2015 and in August 2016, respectively and (iii) to decreased revenue days of our fleet during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015; partly offset by decreased off-hire days of our fleet during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015 and by revenue earned due to increased calendar days by one day during the nine-month period ended September 30, 2016 (274 calendar days) compared to the nine-month period ended September 30, 2015 (273 calendar days).

Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 4.6%, or $16.9 million, to $353.2 million during the nine-month period ended September 30, 2016, from $370.1 million during the nine-month period ended September 30, 2015. The decrease was mainly attributable (i) to decreased charter rates for certain of our vessels during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015, (ii) to revenue not earned by two vessels sold for demolition in November 2015 and in August 2016, respectively and (iii) to decreased revenue days of our fleet during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015; partly offset by decreased off-hire days of our fleet during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015 and by revenue earned due to increased calendar days by one day during the nine-month period ended September 30, 2016 (274 calendar days) compared to the nine-month period ended September 30, 2015 (273 calendar days).

Voyage Expenses

Voyage expenses were $1.5 million and $1.9 million during the nine-month periods ended September 30, 2016 and 2015, respectively. 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 in the amount of $2.7 million and $2.8 million during the nine-month periods ended September 30, 2016 and 2015, respectively, represent fees of 0.75% in the aggregate on voyage revenues charged to us by Costamare Shipping and Costamare Services, as provided under the Framework Agreement and Services Agreement, respectively.

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 10.2% or $9.0 million to $79.6 million during the nine-month period ended September 30, 2016, from $88.6 million during the nine-month period ended September 30, 2015.

General and Administrative Expenses

General and administrative expenses increased by 4.9%, or $0.2 million, to $4.3 million during the nine-month period ended September 30, 2016, from $4.1 million during the nine-month period ended September 30, 2015. General and administrative expenses for the nine-month periods ended September 30, 2016 and 2015 included $1.9 million which is part of the annual fee that Costamare Services receives based on the Services Agreement. Prior to November 2, 2015, this annual fee, in the same amount, was charged by Costamare Shipping pursuant to the Group Management Agreement, which was effective from January 1, 2015 until November 2, 2015.

Management Fees -- related parties

Management fees paid to our managers decreased by 1.4%, or $0.2 million, to $14.4 million during the nine-month period ended September 30, 2016, from $14.6 million during the nine-month period ended September 30, 2015 pursuant to the Framework Agreement, in effect from November 2, 2015, and the Group Management Agreement in effect prior to November 2, 2015, respectively. The decrease was attributable to the decreased average number of vessels during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015.

General and Administrative expenses -- non-cash component

General and administrative expenses -- non-cash component for the nine-month period ended September 30, 2016 amounted to $4.1 million, representing the value of the shares issued to Costamare Services on March 31, 2016, June 30, 2016 and September 30, 2016, pursuant to the Services Agreement. For the nine-month period ended September 30, 2015, the non-cash component of general and administrative expenses was $7.2 million, representing the value of shares issued to Costamare Shipping on March 31, 2015, June 30, 2015 and September 30, 2015, respectively, pursuant to the Group Management Agreement.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $5.9 million for the nine-month period ended September 30, 2016 and $5.4 million for the nine-month period ended September 30, 2015. During the nine-month period ended September 30, 2016, six 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 0.3%, or $0.2 million, to $75.8 million during the nine-month period ended September 30, 2016, from $76.0 million during the nine-month period ended September 30, 2015.

Amortization of Prepaid Lease Rentals

Amortization of prepaid lease rentals was $4.6 million during the nine-month period ended September 30, 2016. Amortization of prepaid lease rentals was $3.7 million during the nine-month period ended September 30, 2015.

Loss on sale / disposal of vessels

During the nine-month period ended September 30, 2016, we recorded a loss of $4.4 million from the sale of one vessel. There were no vessels disposed of during the nine-month period ended September 30, 2015.

Foreign Exchange Gains / (Losses)

Foreign exchange losses were $0.3 million and $0, during the nine-month period ended September 30, 2016 and 2015, respectively.

Interest Income

Interest income amounted to $1.1 million for the nine-month periods ended September 30, 2016 and 2015.

Interest and Finance Costs

Interest and finance costs decreased by 9.8%, or $6.0 million, to $55.1 million during the nine-month period ended September 30, 2016, from $61.1 million during the nine-month period ended September 30, 2015. The decrease was mainly attributable to the decreased average loan balance during the nine-month period ended September 30, 2016 compared to the nine-month period ended September 30, 2015.

Swaps Breakage Cost

During the nine-month period ended September 30, 2016, we terminated one interest rate derivative instrument that qualified for hedge accounting and we paid the counterparty breakage costs of $9.4 million.

Equity Loss on Investments

The equity loss on investments of $0.5 million for the nine-month period ended September 30, 2016 represents our share of the net losses of nineteen jointly owned companies pursuant to the Framework Deed and is mainly attributable to the pre-delivery expenses charged to certain vessels that were under construction during the nine-month period ended September 30, 2016. We hold a range of 25% to 49% of the capital stock of these companies.

Gain / (Loss) on Derivative Instruments

The fair value of our 19 interest rate derivative instruments which were outstanding as of September 30, 2016 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2016, the fair value of these 19 interest rate derivative instruments in aggregate amounted to a liability of $32.3 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, 2016, a net gain of $14.6 million has been included in OCI and a net loss of $4.0 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 nine-month period ended September 30, 2016.

Cash Flows

Nine-month periods ended September 30, 2016 and 2015

Condensed cash flows Nine-month period ended September 30,  
(Expressed in millions of U.S. dollars) 2015     2016  
Net Cash Provided by Operating Activities $ 179.6     $ 169.5  
Net Cash Used in Investing Activities $ (28.3 )   $ (31.1 )
Net Cash Used in Financing Activities $ (129.8 )   $ (131.8 )

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities decreased by $10.1 million to $169.5 million for the nine-month period ended September 30, 2016, compared to $179.6 million for the nine-month period ended September 30, 2015. The decrease was mainly attributable to decreased cash from operations of $17.0 million; partly offset by decreased payments for interest (including swap payments) of $4.8 million during the nine-month period September 30, 2016 compared to the nine-month period ended September 30, 2015.

Net Cash Used in Investing Activities

Net cash used in investing activities was $31.1 million in the nine-month period ended September 30, 2016, which mainly consisted of (i) $32.1 million (net of $3.0 million we received as dividend distributions) in advance payments for the construction of seven newbuild vessels, the acquisition of a secondhand vessel and working capital injection in certain entities pursuant to the Framework Deed, (ii) $1.6 million in payments for upgrades to one of our vessels and (iii) $3.6 million proceeds we received from the sale of one vessel.

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 Deed and $3.2 million, paid for the acquisition of a secondhand vessel pursuant to the Framework Deed.

Net Cash Used in Financing Activities

Net cash used in financing activities was $131.8 million in the nine-month period ended September 30, 2016, which mainly consisted of (a) $142.1 million of indebtedness that we repaid, (b) $14.4 million we repaid relating to our sale and leaseback agreements, (c) $39.0 million that we drew down from one of our credit facilities, (d) $110.8 million we paid for the prepayment of two of our credit facilities, (e) $151.8 million we received in connection with the sale and leaseback transaction concluded for two of our vessels, (f) $51.3 million we paid for dividends to holders of our common stock for the fourth quarter of 2015, the first and the second quarter of 2016 and (g) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock and $6.6 million we paid for dividends to holders of our Series D Preferred Stock, in each case for each of the periods from October 15, 2015 to January 14, 2016, January 15, 2016 to April 14, 2016 and April 15, 2016 to July 14, 2016.

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, (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, in both cases for each of 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.

Change in the manner of presentation of certain items

Effective January 1, 2016, we changed the way we present in the statements of income the interest accrued and realized on non-hedging derivative instruments and have reclassified such from the Interest and Finance costs line item to Gain / (Loss) on derivative instruments, on the 2016 consolidated statements of income and their comparatives.

Liquidity and Capital Expenditures

Cash and cash equivalents

As of September 30, 2016, we had a total cash liquidity of $154.1 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of October 24, 2016, the following vessels were free of debt.

Unencumbered Vessels
 (Refer to fleet list for full charter details)

Vessel Name Year
Built
TEU
Capacity
NCP0152(*) 2017 11,010
ELAFONISSOS(*) 1999 2,526
MONEMVASIA(*) 1998 2,472
MESSINI 1997 2,458
NEAPOLIS 2000 1,645
ARKADIA(*) 2001 1,550

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

Capital commitments

As of October 24, 2016, we had outstanding equity commitments relating to our six contracted newbuilds aggregating approximately $3.2 million payable until the vessels are delivered. The amount represents our interest in the relevant jointly-owned entities under the Framework Deed, and excludes approximately $21.6 million relating to our interest in the delivery installment of the last 11,000 TEU vessel on order, which we expect will funded with debt.

Conference Call details:

On Tuesday, October 25, 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: 1-844-887-9405 (from the US), 0808 238 9064 (from the UK) or +1-412-317-9258 (from outside the US). Please quote "Costamare."

A replay of the conference call will be available until November 25, 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: 10095122.

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 71 containerships, with a total capacity of approximately 464,000 TEU, including six newbuild containerships to be delivered. Eighteen of our containerships, including six newbuilds on order, have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company's common stock, Series B Preferred Stock, Series C Preferred Stock 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 24, 2016, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.

    Vessel Name   Charterer   Year Built   Capacity (TEU)   Current Daily Charter Rate (U.S. dollars) Expiration of Charter(1)
1   TRITON(*)(***)   Evergreen   2016   14,424     March 2026
2   TITAN(*)(***)   Evergreen   2016   14,424     April 2026
3   TALOS(*)(***)   Evergreen   2016   14,424     July 2026
4   TAURUS(*)(***)   Evergreen   2016   14,424     August 2026
5   THESEUS(*)(***)   Evergreen   2016   14,424     August 2026
6   CAPE AKRITAS(*)       2016   11,010      
7   COSCO GUANGZHOU   COSCO   2006   9,469   36,400 December 2017
8   COSCO NINGBO   COSCO   2006   9,469   36,400 January 2018
9   COSCO YANTIAN   COSCO   2006   9,469   36,400 February 2018
10   COSCO BEIJING   COSCO   2006   9,469   36,400 April 2018
11   COSCO HELLAS   COSCO   2006   9,469   37,519 May 2018
12   MSC AZOV(**)   MSC   2014   9,403   43,000 November 2023
13   MSC AJACCIO(**)   MSC   2014   9,403   43,000 February 2024
14   MSC AMALFI(**)   MSC   2014   9,403   43,000 March 2024
15   MSC ATHENS(**)   MSC   2013   8,827   42,000 January 2023
16   MSC ATHOS(**)   MSC   2013   8,827   42,000 February 2023
17   VALOR   Evergreen   2013   8,827   41,700 April 2020(i)
18   VALUE   Evergreen   2013   8,827   41,700 April 2020(i)
19   VALIANT   Evergreen   2013   8,827   41,700 June 2020(i)
20   VALENCE   Evergreen   2013   8,827   41,700 July 2020(i)
21   VANTAGE   Evergreen   2013   8,827   41,700 September 2020(i)
22   NAVARINO   PIL   2010   8,531    10,500(3) November 2017
23   MAERSK KAWASAKI(ii)   A.P. Moller-Maersk   1997   7,403   37,000 December 2017
24   MAERSK KURE(ii)   A.P. Moller-Maersk   1996   7,403   37,000 December 2017
25   MAERSK KOKURA(ii)   A.P. Moller-Maersk   1997   7,403   37,000 February 2018
26   MSC METHONI   MSC   2003   6,724   29,000 September 2021
27   SEALAND NEW YORK   A.P. Moller-Maersk   2000   6,648   26,100 March 2018
28   MAERSK KOBE   A.P. Moller-Maersk   2000   6,648   26,100 May 2018
29   SEALAND WASHINGTON   A.P. Moller-Maersk   2000   6,648   26,100 June 2018
30   SEALAND MICHIGAN   A.P. Moller-Maersk   2000   6,648   26,100 August 2018
31   SEALAND ILLINOIS   A.P. Moller-Maersk   2000   6,648   26,100 October 2018
32   MSC  KOLKATA   A.P. Moller-Maersk   2003   6,644   26,100 November 2019
33   MSC KINGSTON   A.P. Moller-Maersk   2003   6,644   26,100 February 2020
34   MSC KALAMATA   A.P. Moller-Maersk   2003   6,644   26,100 April 2020
35   VENETIKO       2003   5,928      
36   ENSENADA EXPRESS(*)       2001   5,576      
37   MSC ROMANOS       2003   5,050      
38   ZIM NEW YORK   ZIM   2002   4,992   7,736 September 2017(4)
39   ZIM SHANGHAI   ZIM   2002   4,992   7,736 September 2017(4)
40   ZIM PIRAEUS   ZIM   2004   4,992   5,350 December 2016
41   OAKLAND EXPRESS   Hapag Lloyd   2000   4,890   30,500(5) November 2016
42   HALIFAX EXPRESS   Hapag Lloyd   2000   4,890   6,300 November 2016
43   SINGAPORE EXPRESS   Hapag Lloyd   2000   4,890   6,300 November 2016
44   MSC MANDRAKI   MSC   1988   4,828   20,000 June 2017
45   MSC MYKONOS   MSC   1988   4,828   20,000 August 2017
46   MSC ULSAN   MSC   2002   4,132   16,500 March 2017
47   MSC KORONI   MSC   1998   3,842   13,500(6) September 2018
48   ITEA   ACL   1998   3,842   6,250 November 2016
49   MARINA   Evergreen   1992   3,351   5,500 November 2016
50   LAKONIA   Evergreen   2004   2,586   8,600 February 2017
51   ELAFONISOS(*)       1999   2,526      
52   AREOPOLIS   Evergreen   2000   2,474   5,950 March 2017
53   MONEMVASIA(*)(iii)   A.P. Moller-Maersk   1998   2,472   8,750 November 2016
54   MESSINI   Evergreen   1997   2,458   6,000 November 2016
55   MSC REUNION   MSC   1992   2,024   6,800 July 2017
56   MSC NAMIBIA II   MSC   1991   2,023   6,800 July 2017
57   MSC SIERRA II   MSC   1991   2,023   6,800 June 2017
58   MSC PYLOS   MSC   1991   2,020   6,300 January 2017
59   PADMA(*)   Evergreen   1998   1,645   6,500(7) March 2017
60   NEAPOLIS   Evergreen   2000   1,645   6,900 January 2017
61   ARKADIA(*)   Evergreen   2001   1,550   10,600 August 2017
62   PROSPER   Sea Consortium   1996   1,504   6,600 November 2016
63   ZAGORA   MSC   1995   1,162   6,300 June 2017
64   PETALIDI(*)   CMA CGM   1994   1,162   6,950 June 2017
65   STADT LUEBECK   Sea Consortium   2001   1,078   6,500 November 2016

Newbuilds

   
Vessel Name

Shipyard

Capacity (TEU)

Charterer
Expected Delivery(2)
1   NCP0114(*) Hanjin Subic Bay 11,010   Q1 2017
2   NCP0115(*) Hanjin Subic Bay 11,010   Q1 2017
3   NCP0116(*) Hanjin Subic Bay 11,010   Q1 2017
4   NCP0152(*) Hanjin Subic Bay 11,010   Q1 2017
5   YZJ1206(*) (***) Jiangsu New Yangzi 3,800 Hamburg Süd Q1 2018
6   YZJ1207 (*) (***) Jiangsu New Yangzi 3,800 Hamburg Süd Q2 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) Based on latest shipyard production schedule, subject to change.
(3) This charter rate changes on November 13, 2016 to $9,000 daily until the earliest redelivery date.
(4) 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 Company exercised its option for a second year of extension. The rate for the second year has been determined at $7,736 per day.
(5) This charter rate changes on October 25, 2016 to $6,300 per day until the earliest redelivery date.
(6) 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.
(7) This charter rate changes on November 22, 2016 to $7,000 per day until the earliest redelivery date.
(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.
(iii) We have entered into a five year charter agreement with Maersk upon the expiry of the current charter agreement, at a rate of $9,250 daily.
(*) Denotes vessels acquired pursuant to the Framework Deed with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.
(**) Denotes vessels subject to a sale and leaseback transaction
(***) Denotes vessels acquired pursuant to the Framework Deed which are subject to sale and leaseback transactions.

COSTAMARE INC.
Consolidated Statements of Income

  Nine-months ended September 30,   Three-months ended September 30,  
(Expressed in thousands of U.S. dollars, except share and per share amounts) 2015   2016   2015   2016  
  (Unaudited)   (Unaudited)  
REVENUES:                        
Voyage revenue $ 368,102   $ 358,055   $ 124,033   $ 118,256  
                         
EXPENSES:                        
Voyage expenses   (1,902 )   (1,456 )   (874 )   (416 )
Voyage expenses - related parties   (2,757 )   (2,686 )   (928 )   (888 )
Vessels' operating expenses   (88,554 )   (79,648 )   (28,774 )   (27,189 )
General and administrative expenses   (4,056 )   (4,311 )   (1,374 )   (1,443 )
Management fees - related parties   (14,615 )   (14,441 )   (4,925 )   (4,871 )
General and administrative expenses - non-cash component   (7,219 )   (4,114 )   (1,836 )   (1,368 )
Amortization of dry-docking and special survey costs   (5,434 )   (5,937 )   (1,851 )   (1,997 )
Depreciation   (76,034 )   (75,786 )   (25,623 )   (25,217 )
Amortization of prepaid lease rentals   (3,726 )   (4,579 )   (1,256 )   (2,102 )
Loss on sale / disposal of vessels   -     (4,440 )   -     (4,440 )
Foreign exchange gains / (losses)   15     (334 )   (215 )   (105 )
Operating income $ 163,820   $ 160,323   $ 56,377   $ 48,220  
                         
OTHER INCOME / (EXPENSES):                        
Interest income $ 1,053   $ 1,140   $ 321   $ 403  
Interest and finance costs   (61,092 )   (55,090 )   (19,222 )   (18,414 )
Swaps breakage cost   -     (9,404 )   -     (9,404 )
Equity gain / (loss) on investments   38     (460 )   85     (55 )
Other   404     551     99     13  
Gain /(Loss) on derivative instruments   1,213     (4,350 )   (2,837 )   (91 )
Total other income / (expenses) $ (58,384 ) $ (67,613 ) $ (21,554 ) $ (27,548 )
Net Income $ 105,436   $ 92,710   $ 34,823   $ 20,672  
Earnings allocated to Preferred Stock   (12,637 )   (15,797 )   (5,324 )   (5,324 )
Net Income available to common stockholders $ 92,799   $ 76,913   $ 29,499   $ 15,348  
                         
Earnings per common share, basic and diluted $ 1.24   $ 1.01   $ 0.39   $ 0.20  
Weighted average number of shares, basic and diluted   74,952,340     75,814,641     75,100,826     76,486,847  

COSTAMARE INC.
Consolidated Balance Sheets

  As of December 31,   As of September 30,  
(Expressed in thousands of U.S. dollars) 2015   2016  
  (Unaudited)  
ASSETS            
CURRENT ASSETS:            
Cash and cash equivalents $ 100,105   $ 106,720  
Restricted cash   14,007     6,365  
Accounts receivable   1,111     1,218  
Inventories   10,578     10,350  
Due from related parties   6,012     3,346  
Fair value of derivatives   352     -  
Insurance claims receivable   3,906     5,720  
Prepaid lease rentals   4,982     8,745  
Accrued charter revenue   457     427  
Prepayments and other   3,546     7,430  
Total current assets $ 145,056   $ 150,321  
FIXED ASSETS, NET:            
Capital leased assets $ 242,966   $ 388,029  
Vessels, net   2,004,650     1,753,300  
Total fixed assets, net $ 2,247,616   $ 2,141,329  
NON-CURRENT ASSETS:            
Investment in affiliates $ 117,931   $ 149,563  
Prepaid lease rentals, non-current   35,829     53,877  
Deferred charges, net   22,809     22,668  
Accounts receivable, non-current   1,425     1,500  
Restricted cash   48,708     41,044  
Accrued charter revenue   569     288  
Other non-current assets   12,612     12,864  
Total assets $ 2,632,555   $ 2,573,454  
LIABILITIES AND STOCKHOLDERS' EQUITY            
CURRENT LIABILITIES:            
Current portion of long-term debt (*) $ 183,828   $ 181,353  
Accounts payable   4,047     4,178  
Due to related parties   371     205  
Capital lease obligations (*)   14,307     28,779  
Accrued liabilities   15,225     15,161  
Unearned revenue   18,356     19,747  
Fair value of derivatives   32,462     19,752  
Other current liabilities   1,712     1,876  
Total current liabilities $ 270,308   $ 271,051  
NON-CURRENT LIABILITIES            
Long-term debt, net of current portion (*) $ 1,134,764   $ 924,096  
Capital lease obligations, net of current portion (*)   217,810     338,566  
Fair value of derivatives, net of current portion   19,655     12,505  
Unearned revenue, net of current portion   26,508     19,446  
Total non-current liabilities $ 1,398,737   $ 1,294,613  
COMMITMENTS AND CONTINGENCIES            
STOCKHOLDERS' EQUITY:            
Preferred stock $ -   $ -  
Common stock   8     8  
Additional paid-in capital   963,904     982,399  
Retained earnings   44,247     55,435  
Accumulated other comprehensive loss   (44,649 )   (30,052 )
Total stockholders' equity $ 963,510   $ 1,007,790  
Total liabilities and stockholders' equity $ 2,632,555   $ 2,573,454  

(*) Amounts net of deferred financing costs

Contact Information

  • Company Contacts:

    Gregory Zikos -- Chief Financial Officer
    Konstantinos Tsakalidis -- Business Development

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