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Costamare Inc. Reports Results for the Third Quarter and the Nine-Month Period Ended September 30, 2020

Costamare Inc
·52 min read

MONACO, Oct. 27, 2020 (GLOBE NEWSWIRE) -- Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the third quarter (“Q3 2020”) and nine-months ended September 30, 2020.

  • Liquidity of $210.4 million as of end Q3 2020 (including our share of cash amounting to $23.0 million held in companies co-owned with York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”)). No meaningful debt maturities until 2024.

  • Net Income of $25.2 million or $0.14 per share in Q3 2020.

  • Adjusted Net Income available to common stockholders(1) of $26.7 million or $0.22 per share in Q3 2020.

  • Voyage Revenues of $107.9 million in Q3 2020.

  • Continued its fleet renewal. More specifically, the Company:

    ° Acquired or agreed to acquire the below three containerships of an average age of 12 years:

    JPO Scorpius (2007-built, 2,572 TEU capacity)

    • A 2006-built, 5,600 TEU container vessel – acquisition is expected to be concluded in 2021

    • A 2011-built, 4,200 TEU container vessel – acquisition is expected to be concluded in 2020

    ° Sold the below two containerships of an average age of 23 years:

    • Zagora
    (1995-built, 1,162 TEU capacity)

    • Singapore Express (2000-built, 4,890 TEU capacity) – sale was concluded in October 2020

  • Delivery on August 7, 2020 and September 25, 2020 of the 12,690 TEU containerships YM Truth (ex. Hull Nr YZJ2015-2058) and YM Totality (ex. Hull Nr YZJ2015-2059), respectively, the second and third of a series of five sister vessels ordered in May 2018. The vessels commenced their ten-year charters with Yang Ming.

  • Chartered in total 13 vessels over the quarter.

  • Concluded the installation of scrubbers on board the two 2013-built, 8,827 TEU sister containerships, MSC Athens and MSC Athos and drawing down of a total amount of $12 million for their financing.

  • Declared dividend of $0.10 per share on its common stock and dividends on all four classes of its preferred stock.

(1) Adjusted Net Income available to common stockholders and respective per share figures are non-GAAP measures and should not be used in isolation or as substitutes for Costamare’s financial results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). For the definition and reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.

New Business Developments

A. New charter agreements

  • The Company has chartered in total 13 vessels over the quarter. More specifically, the Company agreed to:

    I. Vessels above 5,500 TEU capacity (Post – Panamax)

    - Extend the charter of the 2017-built, 11,010 TEU containership Cape Artemisio for two years (until Q1-Q3 2025) with Hapag Lloyd, at a daily rate of $36,650.
    - Extend the charter of the 2016-built, 11,010 TEU containership Cape Akritas with ZIM for a period of 10.5 to 12 months at charterers’ option, starting from September 19, 2020, at a daily rate of $34,750.
    - Extend the charter of the 2017-built, 11,010 TEU containership Cape Kortia with ZIM for a period of 10.5 to 12 months at charterers’ option, starting from October 8, 2020, at a daily rate of $34,750.
    - Extend the charters of the 2006-built, 9,469 TEU containerships Cosco Guangzhou and Cosco Ningbo with COSCO for a period of approximately 17 to 19.5 months at charterers’ option, starting from November 15, 2020, at a daily rate of $30,900.
    - Extend the charter of the 2000-built, 6,648 TEU containership York with Maersk for a period of approximately 20.5 to 23 months at charterers’ option, starting from December 1, 2020, at a daily rate of $21,250.
    - Charter the 2003-built, 5,928 TEU containership Venetiko for a period of approximately 10 to 11.5 months at charterers’ option, starting from August 31, 2020, at an undisclosed daily rate.
    - Charter the 2001-built, 5,576 TEU containership Ensenada for a period of 7 to 9 months at charterers’ option, starting from November 12, 2020, at a daily rate of $21,500.

    II. Vessels below 5,500 TEU capacity

    - Extend the charters of the 2002-built, 4,992 TEU containerships ZIM Shanghai and ZIM New York with ZIM for an additional one-year period expiring on October 1, 2021, at a daily rate of $14,438 per vessel starting from October 2, 2020.
    - Charter the 1996-built, 1,504 TEU containership Prosper with Sealand Maersk Asia for a period of 1 to 3 months at charterers’ option, starting from August 27, 2020, at a daily rate of $6,000. Subsequently, agreed to extend the charter for a period of 3.5 to 6 months at charterers’ option, starting from November 28, 2020, at a daily rate of $8,500.
    - Charter the 1997-built, 2,458 TEU containership Messini for a period of 4 to 6 months at charterers’ option, starting from October 11, 2020, at a daily rate of $9,850.
    - Charter the 2008-built, 1,300 TEU containership Trader for a period of approximately 4 to 6 months at charterers’ option, starting from September 1, 2020, at an undisclosed daily rate.

B. Fleet Renewal

I. Vessel Acquisitions

• In September 2020, we acquired the 2007-built, 2,572 TEU container vessel JPO Scorpius.

• In October 2020, we signed two Memorandum of Agreements for the acquisition of one 2011-built, 4,200 TEU container vessel and one 2006-built, 5,600 TEU container vessel. The first vessel is expected to be delivered in 2020 and the second one in 2021.

II. Vessel Disposals

• In September 2020, we sold the 1995-built, 1,162 TEU capacity containership Zagora.

• In October 2020, we sold the 2000-built, 4,890 TEU capacity containership Singapore Express.

C. Newbuild vessel deliveries

  • On August 7, 2020 and September 25, 2020, we accepted delivery of the 12,690 TEU containerships YM Truth and YM Totality, respectively, the second and third of a series of five vessels ordered in May 2018. The vessels commenced their respective ten-year charters with Yang Ming. Both vessels, as well as the remaining two sister vessels currently under construction have secured pre and post delivery financing.

D. Dividend announcements

  • On October 2, 2020, we declared a dividend for the quarter ended September 30, 2020, of $0.10 per share on our common stock, payable on November 5, 2020, to stockholders of record of common stock as of October 20, 2020.

  • On October 2, 2020, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, a dividend of $0.531250 per share on our Series C Preferred Stock, a dividend of $0.546875 per share on our Series D Preferred Stock and a dividend of $0.554688 per share on our Series E Preferred Stock, which were all paid on October 15, 2020 to holders of record as of October 14, 2020.


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

“During the third quarter the Company continued its profitability.

As part of our fleet renewal program, we sold for demolition two vessels with an average age of 23 years and we agreed to acquire three larger secondhand ships on average 11 years younger. The new acquisitions will be initially funded with equity.

Meanwhile, our newbuilding program is progressing on schedule, and we have now accepted delivery of three out of the five 13,000 TEU vessels, which have commenced their 10-year charters.

On the market, the inactive containership fleet continues to shrink to levels below 2%, on the back of healthy demand for container shipping. Charter rates have been rising and we have chartered in total 13 ships during the quarter. We have 14 ships coming off charter over the next six months which positions us favorably, should market momentum continue.

With liquidity of above $200 million, no meaningful debt maturities over the next three years and minimal capex commitments we are well positioned for acquisition opportunities increasing shareholder value and returns.”

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):

2019

2020

2019

2020

Voyage revenue

$

353,641

$

341,176

$

123,631

$

107,903

Accrued charter revenue (1)

$

(115

)

$

15,942

$

(306

)

$

8,221

Amortization of Time-charter assumed

$

143

$

144

$

48

$

49

Voyage revenue adjusted on a cash basis (2)

$

353,669

$

357,262

$

123,373

$

116,173

Adjusted Net Income available to common stockholders (3)

$

66,700

$

91,005

$

30,948

$

26,740

Weighted Average number of shares

114,744,125

120,319,521

117,111,191

121,094,924

Adjusted Earnings per share (3)

$

0.58

$

0.76

$

0.26

$

0.22

Net Income / (Loss)

$

63,112

$

(18,198

)

$

35,976

$

25,249

Net Income / (Loss) available to common stockholders

$

39,660

$

(40,894

)

$

28,072

$

17,395

Weighted Average number of shares

114,744,125

120,319,521

117,111,191

121,094,924

Earnings / (Losses) per share

$

0.35

$

(0.34

)

$

0.24

$

0.14

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

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and the nine-month periods ended September 30, 2020 and 2019. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.

Exhibit I
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)

2019

2020

2019

2020

Net Income / (Loss)

$

63,112

$

(18,198

)

$

35,976

$

25,249

Earnings allocated to Preferred Stock

(23,452

)

(23,315

)

(7,904

)

(7,854

)

Gain on retirement of Preferred Stock

-

619

-

-

Net Income / (Loss) available to common stockholders

39,660

(40,894

)

28,072

17,395

Accrued charter revenue

(115

)

15,942

(306

)

8,221

General and administrative expenses - non-cash component

2,453

2,416

908

908

Amortization of Time charter assumed

143

144

48

49

Realized (Gain) / loss on Euro/USD forward contracts (1)

367

(488

)

159

(410

)

Vessels’ impairment loss

3,042

31,577

-

-

Loss on sale / disposals of vessels

18,420

65,260

-

432

Non-recurring, non-cash write-off of loan deferred financing costs

1,127

478

1,127

-

Swaps’ breakage costs

16

6

16

6

Loss on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments

38

-

-

-

Loss on vessels held for sale

480

14,359

480

-

Loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1)

1,069

2,205

444

139

Adjusted Net Income available to common stockholders

$

66,700

$

91,005

$

30,948

$

26,740

Adjusted Earnings per Share

$

0.58

$

0.76

$

0.26

$

0.22

Weighted average number of shares

114,744,125

120,319,521

117,111,191

121,094,924

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

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

Results of Operations

Three-month period ended September 30, 2020 compared to the three-month period ended September 30, 2019

During the three-month periods ended September 30, 2020 and 2019, we had an average of 59.5 and 60.0 vessels, respectively, in our fleet. In the three-month period ended September 30, 2020, we accepted delivery of the newbuild vessels YM Triumph, YM Truth and YM Totality with an aggregate TEU capacity of 38,070 and the secondhand vessel JPO Scorpius with a TEU capacity of 2,572; and we sold the vessels Kawasaki, Kokura and Zagora with an aggregate TEU capacity of 15,968. In the three-month periods ended September 30, 2020 and 2019, our fleet ownership days totaled 5,478 and 5,520 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

(Expressed in millions of U.S. dollars,

Three-month period ended September 30,

Percentage

except percentages)

2019

2020

Change

Change

Voyage revenue

$

123.6

$

107.9

$

(15.7

)

(12.7

%)

Voyage expenses

(0.7

)

(2.4

)

1.7

242.9

%

Voyage expenses – related parties

(1.7

)

(1.6

)

(0.1

)

(5.9

%)

Vessels’ operating expenses

(29.2

)

(30.2

)

1.0

3.4

%

General and administrative expenses

(1.5

)

(1.5

)

-

-

Management fees – related parties

(5.3

)

(5.5

)

0.2

3.8

%

General and administrative expenses - non-cash component

(0.9

)

(0.9

)

-

-

Amortization of dry-docking and special survey costs

(2.3

)

(2.2

)

(0.1

)

(4.3

%)

Depreciation

(25.3

)

(25.9

)

0.6

2.4

%

Loss on sale / disposals of vessels

-

(0.4

)

0.4

n.m.

Loss on vessels held for sale

(0.5

)

-

(0.5

)

n.m.

Interest income

0.8

0.3

(0.5

)

(62.5

%)

Interest and finance costs

(24.0

)

(16.1

)

(7.9

)

(32.9

%)

Income from equity method investments

3.1

4.0

0.9

29.0

%

Other

0.3

0.1

(0.2

)

(66.7

%)

Loss on derivative instruments

(0.4

)

(0.4

)

-

-

Net Income

$

36.0

$

25.2

(Expressed in millions of U.S. dollars,

Three-month period ended September 30,

Percentage

except percentages)

2019

2020

Change

Change

Voyage revenue

$

123.6

$

107.9

$

(15.7

)

(12.7

%)

Accrued charter revenue

(0.3

)

8.2

8.5

n.m.

Amortization of time charter assumed

-

-

-

-

Voyage revenue adjusted on a cash basis (1)

$

123.3

$

116.1

$

(7.2

)

(5.8

%)


Vessels’ operational data

Three-month period ended September 30,

Percentage

2019

2020

Change

Change

Average number of vessels

60.0

59.5

(0.5

)

(0.8

%)

Ownership days

5,520

5,478

(42

)

(0.8

%)

Number of vessels under dry-docking

-

2

2

(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Financial Summary” above for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue decreased by 12.7%, or $15.7 million, to $107.9 million during the three-month period ended September 30, 2020, from $123.6 million during the three-month period ended September 30, 2019. The decrease is mainly attributable to revenue not earned by three vessels sold during the fourth quarter of 2019, one vessel sold during the first quarter of 2020 and three vessels sold during the third quarter of 2020, to decreased charter rates for certain of our vessels during the third quarter of 2020 compared to the third quarter of 2019 and to the increased idle days of our fleet during the third quarter of 2020 compared to the third quarter of 2019; partly offset by revenue earned by three vessels acquired during the fourth quarter of 2019, one vessel acquired during the first quarter of 2020 and four vessels acquired during the third quarter of 2020.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), decreased by 5.8%, or $7.2 million, to $116.1 million during the three-month period ended September 30, 2020, from $123.3 million during the three-month period ended September 30, 2019. Accrued charter revenue was a positive amount of $8.2 million for the three-month period ended September 30, 2020 and a negative amount of $0.3 million for the three-month period ended September 30, 2019.

Voyage Expenses

Voyage expenses were $2.4 million and $0.7 million for the three-month periods ended September 30, 2020 and 2019, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $1.6 million and $1.7 million for the three-month periods ended September 30, 2020 and 2019, respectively. Voyage expenses – related parties represent fees of 1.25% in the aggregate on voyage revenues charged by related managers and charter brokerage fees payable to two related charter brokerage companies for an amount of approximately $0.2 million, in the aggregate.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, were $30.2 million and $29.2 million during the three-month periods ended September 30, 2020 and 2019, respectively. Daily vessels’ operating expenses were $5,520 and $5,282 for the three-month periods ended September 30, 2020 and 2019, respectively. Daily operating expenses are calculated as vessels’ operating expenses for the period over the ownership days of the period.

General and Administrative Expenses

General and administrative expenses were $1.5 million and $1.5 million during the three-month periods ended September 30, 2020 and 2019, respectively, and both include $0.63 million paid to a related manager.

Management Fees – related parties

Management fees paid to our related managers were $5.5 million and $5.3 million during the three-month periods ended September 30, 2020 and 2019, respectively.

General and administrative expenses - non-cash component

General and administrative expenses - non-cash component for the three-month period ended September 30, 2020 amounted to $0.9 million, representing the value of the shares issued to a related manager on September 30, 2020. General and administrative expenses - non-cash component for the three-month period ended September 30, 2019, amounted to $0.9 million, representing the value of the shares issued to a related manager on September 30, 2019.

Amortization of dry-docking and special survey

Amortization of deferred dry-docking and special survey costs was $2.2 million and $2.3 million during the three-month periods ended September 30, 2020 and 2019, respectively. During the three-month period ended September 30, 2020, two vessels underwent and completed their special survey. During the three-month period ended September 30, 2019, no vessel underwent any special survey.

Depreciation

Depreciation expense for the three-month period ended September 30, 2020 and 2019 was $25.9 million and $25.3 million, respectively.

Loss on sale / disposal of vessels

During the three-month period ended September 30, 2020, we recorded an additional loss of $0.4 million, in the aggregate, from the sale of the vessel Zagora which was classified as an asset held for sale as at December 31, 2019 and from the sale of the vessels Kawasaki and Kokura which were classified as assets held for sale as at June 30, 2020.

Interest Income

Interest income amounted to $0.3 million and $0.8 million for the three-month periods ended September 30, 2020 and 2019, respectively.

Interest and Finance Costs

Interest and finance costs were $16.1 million and $24.0 million during the three-month periods ended September 30, 2020 and 2019, respectively. The decrease is mainly attributable to the decreased financing cost and the reduced average loan balances during the three-month period ended September 30, 2020 compared to the three-month period ended September 30, 2019.

Swaps’ Breakage Costs

During the three-month period ended September 30, 2020, we terminated two interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties breakage costs in the amount of $0.006 million in the aggregate. During the three-month period ended September 30, 2019, we terminated eight interest rate derivative instruments that qualified for hedge accounting and three that did not qualify for hedge accounting and we paid the counterparties breakage costs, net in the amount of $0.016 million in the aggregate.

Income from Equity Method Investments

During the three-month period ended September 30, 2020, we recorded an income from the equity method investments of $4.0 million representing our share of the income in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated (the “Framework Deed”), with York. As of September 30, 2020, 13 companies are jointly-owned with York (of which, 10 companies currently own vessels). During the three-month period ended September 30, 2019, we recorded an income from equity method investments of $3.1 million also relating to investments under the Framework Deed.

Gain/(Loss) on Derivative Instruments

The fair value of our seven interest rate derivative instruments which were outstanding as of September 30, 2020 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2020, the fair value of these seven interest rate derivative instruments in aggregate amounted to a liability of $7.9 million. The change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item while the change in the fair value of the interest rate derivatives representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in Gain/(Loss) on Derivative Instruments. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Gain/(Loss) on Derivative Instruments. For the three-month period ended September 30, 2020, a net gain of $0.4 million has been included in OCI and a loss of $0.1 million has been included in Gain/(Loss) on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended September 30, 2020.

Cash Flows

Three-month periods ended September 30, 2020 and 2019

Condensed cash flows

Three-month period ended September 30,

(Expressed in millions of U.S. dollars)

2019

2020

Net Cash Provided by Operating Activities

$

66.4

$

66.7

Net Cash Used in Investing Activities

$

(0.4

)

$

(23.3

)

Net Cash Used in Financing Activities

$

(145.7

)

$

(57.2

)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended September 30, 2020, increased by $0.3 million to $66.7 million, from $66.4 million for the three-month period ended September 30, 2019. The increase is mainly attributable to 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 $12.2 million and the decreased payments for interest (including swap payments) of $3.4 million during the three-month period ended September 30, 2020 compared to the three-month period ended September 30, 2019; partly off-set by decreased cash from operations of $7.2 million and by the increased special survey costs of $2.5 million during the three-month period ended September 30, 2020 compared to the three-month period ended September 30, 2019.

Net Cash Used in Investing Activities

Net cash used in investing activities was $23.3 million in the three-month period ended September 30, 2020, which mainly consisted of payments for upgrades for certain of our vessels and payments for the delivery of three newbuild vessels and one second hand vessel; partly off-set by proceeds we received from the sale of three vessels.

Net cash used in investing activities was $0.4 million in the three-month period ended September 30, 2019, which mainly consisted of dividend distributions we received from 10 entities jointly-owned with York pursuant to the Framework Deed and advance payments for upgrades for certain of our vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $57.2 million in the three-month period ended September 30, 2020, which mainly consisted of (a) $32.7 million net payments relating to our debt financing agreements, (b) $9.3 million we paid for dividends to holders of our common stock for the second quarter of 2020 and (c) $0.9 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”), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock”) and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (“Series E Preferred Stock”) for the period from April 15, 2020 to July 14, 2020.

Net cash used in financing activities was $145.7 million in the three-month period ended September 30, 2019, which mainly consisted of (a) $128.4 million of net payments relating to our debt financing agreements, (b) $7.0 million we paid for dividends to holders of our common stock for the second quarter of 2019 and (c) $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, $2.2 million we paid for dividends to holders of our 8.75% Series D Preferred Stock and $2.5 million we paid for dividends to holders of our 8.875% Series E Preferred Stock for the period from April 15, 2019 to July 14, 2019.

Nine-month period ended September 30, 2020 compared to the nine-month period ended September 30, 2019

During the nine-month periods ended September 30, 2020 and 2019, we had an average of 59.9 and 60.6 vessels, respectively, in our fleet. In the nine-month periods ended September 30, 2020, we accepted delivery of the newbuild vessels YM Triumph, YM Truth and YM Totality with an aggregate TEU capacity of 38,070 and the secondhand vessels JPO Virgo and JPO Scorpius with a TEU capacity of 6,830; and we sold the vessels Neapolis, Kawasaki, Kokura and Zagora with an aggregate TEU capacity of 17,613. In the nine-month period ended September 30, 2019, we sold the container vessels MSC Pylos and Piraeus with an aggregate TEU capacity of 7,012. In the nine-month periods ended September 30, 2020 and 2019, our fleet ownership days totaled 16,413 and 16,555 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

(Expressed in millions of U.S. dollars,

Nine-month period ended September 30,

Percentage

except percentages)

2019

2020

Change

Change

Voyage revenue

$

353.6

$

341.2

$

(12.4

)

(3.5

%)

Voyage expenses

(3.2

)

(6.4

)

3.2

100.0

%

Voyage expenses – related parties

(3.6

)

(4.7

)

1.1

30.6

%

Vessels’ operating expenses

(87.3

)

(85.0

)

(2.3

)

(2.6

%)

General and administrative expenses

(4.1

)

(5.3

)

1.2

29.3

%

Management fees – related parties

(16.2

)

(16.0

)

(0.2

)

(1.2

%)

General and administrative expenses - non-cash component

(2.5

)

(2.4

)

(0.1

)

(4.0

%)

Amortization of dry-docking and special survey costs

(6.7

)

(6.8

)

0.1

1.5

%

Depreciation

(85.1

)

(81.6

)

(3.5

)

(4.1

%)

Loss on sale / disposal of vessels

(18.4

)

(65.3

)

46.9

254.9

%

Loss on vessels held for sale

(0.5

)

(14.4

)

13.9

n.m.

Vessels’ impairment loss

(3.0

)

(31.6

)

28.6

n.m.

Foreign exchange losses

-

(0.2

)

0.2

n.m.

Interest income

2.5

1.5

(1.0

)

(40.0

%)

Interest and finance costs

(69.3

)

(51.5

)

(17.8

)

(25.7

%)

Swaps’ breakage costs

-

-

-

-

Income from equity method investments

7.4

12.2

4.8

64.9

%

Other

0.5

0.5

-

-

Loss on derivative instruments

(1.0

)

(2.4

)

1.4

140.0

%

Net Income / (Loss)

$

63.1

$

(18.2

)

(Expressed in millions of U.S. dollars,
except percentages)

Nine-month period ended September 30,

Change

Percentage
Change

2019

2020

Voyage revenue

$

353.6

$

341.2

$

(12.4

)

(3.5

%)

Accrued charter revenue

(0.1

)

15.9

16.0

n.m.

Amortization of time charter assumed

0.2

0.2

-

-

Voyage revenue adjusted on a cash basis (1)

$

353.7

$

357.3

$

3.6

1.0

%


Vessels’ operational data

Nine-month period ended September 30,

Percentage
Change

2019

2020

Change

Average number of vessels

60.6

59.9

(0.7

)

(1.2

%)

Ownership days

16,555

16,413

(142

)

(0.9

%)

Number of vessels under dry-docking

6

9

3

(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Financial Summary” above for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue decreased by 3.5%, or $12.4 million, to $341.2 million during the nine-month period ended September 30, 2020, from $353.6 million during the nine-month period ended September 30, 2019. The decrease is mainly attributable to revenue not earned by five vessels sold during the year ended December 31, 2019 and four vessels sold during the nine-month period ended September 30, 2020, to decreased hire rates in certain of our vessels and to increased idle days of our fleet during the nine-month period ended September 30, 2020 compared to the nine-month period ended September 30, 2019; partly offset by revenue earned by three vessels acquired during the fourth quarter of 2019, one vessel acquired during the first quarter of 2020 and four vessels acquired during the third quarter of 2020.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 1.0%, or $3.6 million, to $357.3 million during the nine-month period ended September 30, 2020, from $353.7 million during the nine-month period ended September 30, 2019. Accrued charter revenue was a positive amount of $15.9 million for the nine-month period ended September 30, 2020 and a negative amount of $0.1 million for the nine-month period ended September 30, 2019.

Voyage Expenses

Voyage expenses were $6.4 million and $3.2 million for the nine-month periods ended September 30, 2020 and 2019, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $4.7 million and $3.6 million for the nine-month periods ended September 30, 2020 and 2019, respectively. Voyage expenses – related parties represent fees of 1.25%1 in the aggregate on voyage revenues charged by related managers and charter brokerage fees payable to two related charter brokerage companies for an amount of approximately $0.5 million, in the aggregate.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, were $85.0 million and $87.3 million during the nine-month periods ended September 30, 2020 and 2019, respectively. Daily vessels’ operating expenses were $5,179 and $5,275 for the nine-month periods ended September 30, 2020 and 2019, respectively. Daily operating expenses are calculated as vessels’ operating expenses for the period over the ownership days of the period.

General and Administrative Expenses

General and administrative expenses were $5.3 million and $4.1 million during the nine-month periods ended September 30, 2020 and 2019, respectively, and both include $1.9 million paid to a related manager.

Management Fees – related parties

Management fees paid to our related managers were $16.0 million and $16.2 million during the nine-month periods ended September 30, 2020 and 2019, respectively.

__________________

1 0.75% until June 30, 2019

General and administrative expenses - non-cash component

General and administrative expenses - non-cash component for the nine-month period ended September 30, 2020 amounted to $2.4 million, representing the value of the shares issued to a related manager on March 30, 2020, June 30, 2020 and September 30, 2020. General and administrative expenses – non-cash component for the nine-month period ended September 30, 2019 amounted to $2.5 million representing the value of the shares issued to a related manager on March 29, 2019, June 28, 2019 and September 30, 2019.

Amortization of dry-docking and special survey

Amortization of deferred dry-docking and special survey costs was $6.8 million and $6.7 million during the nine-month periods ended September 30, 2020 and 2019, respectively. During the nine-month period ended September 30, 2020, nine vessels underwent and completed their special survey. During the nine-month period ended September 30, 2019, six vessels underwent and completed their special survey.

Depreciation

Depreciation expense for the nine-month period ended September 30, 2020 and 2019 was $81.6 million and $85.1 million, respectively.

Loss on sale / disposal of vessels

During the nine-month period ended September 30, 2020, we recorded an aggregate net loss of $65.3 million from the sale of the vessels Neapolis, Kawasaki, Kokura and Zagora. Neapolis and Zagora were classified as assets held for sale as at December 31, 2019. During the nine-month period ended September 30, 2019, we recorded an aggregate loss of $18.4 million from the sale of the vessels Piraeus and MSC Pylos. MSC Pylos was classified as asset held for sale as at December 31, 2018.

Loss on vessels held for sale

During the nine-month period ended September 30, 2020, we recorded a loss on vessels held for sale of $14.4 representing the expected loss from sale of the vessel Singapore Express during the next twelve-month period. During the nine-month period ended September 30, 2019, we recorded a loss on vessels held for sale of $0.5 million representing the expected loss from sale of two of our vessels during the next twelve-month period.

Vessels’ impairment loss

During the nine-month period ended September 30, 2020, we recorded an impairment loss in relation to five of our vessels in the amount of $31.6 million, in the aggregate. During the nine-month period ended September 30, 2019, we recorded an impairment loss in relation to two of our vessels in the amount of $3.0 million, in the aggregate.

Interest Income

Interest income amounted to $1.5 million and $2.5 million for the nine-month periods ended September 30, 2020 and 2019, respectively.

Interest and Finance Costs

Interest and finance costs were $51.5 million and $69.3 million during the nine-month periods ended September 30, 2020 and 2019, respectively. The decrease is mainly attributable to the decreased financing cost and the reduced average loan balances during the nine-month period ended September 30, 2020 compared to the nine-month period ended September 30, 2019.

Swaps’ Breakage Costs

During the nine-month period ended September 30, 2020, we terminated two interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties breakage costs in the amount of $0.006 million in the aggregate. During the nine-month period ended September 30, 2019, we terminated eight interest rate derivative instruments that qualified for hedge accounting and three that did not qualify for hedge accounting and we paid the counterparties breakage costs, net in the amount of $0.016 million in the aggregate.

Income from Equity Method Investments

During the nine-month period ended September 30, 2020, we recorded an income from the equity method investments of $12.2 million representing our share of the income in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated (the “Framework Deed”), with York. As of September 30, 2020, 13 companies are jointly-owned with York (of which, 10 companies currently own vessels). During the nine-month period ended September 30, 2019, we recorded an income from equity method investments of $7.4 million also relating to investments under the Framework Deed.

Loss on Derivative Instruments

The fair value of our seven interest rate derivative instruments which were outstanding as of September 30, 2020 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2020, the fair value of these seven interest rate derivative instruments in aggregate amounted to a liability of $7.9 million. The change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item while the change in the fair value of the interest rate derivatives representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in Gain/(Loss) on Derivative Instruments. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Gain/(Loss) on Derivative Instruments. For the nine-month period ended September 30, 2020, a net loss of $7.7 million has been included in OCI and a net loss of $2.2 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the nine-month period ended September 30, 2020.

Cash Flows

Nine-month periods ended September 30, 2020 and 2019

Condensed cash flows

Nine-month period ended September 30,

(Expressed in millions of U.S. dollars)

2019

2020

Net Cash Provided by Operating Activities

$

173.6

$

205.9

Net Cash Provided by/ (Used in) Investing Activities

$

8.9

$

(21.7

)

Net Cash Used in Financing Activities

$

(144.8

)

$

(192.7

)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the nine-month period ended September 30, 2020, increased by $32.3 million to $205.9 million, from $173.6 million for the nine-month period ended September 30, 2019. The increase is mainly attributable to the increased cash from operations of $3.6 million, 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 $18.2 million and the decreased payments for interest (including swap payments) of $13.5 million during the nine-month period ended September 30, 2020 compared to the nine-month period ended September 30, 2019; partly off-set by the increased special survey costs of $6.3 million during the nine-month period ended September 30, 2020 compared to the nine-month period ended September 30, 2019.

Net Cash Provided by / (Used in) Investing Activities

Net cash used in investing activities was $21.7 million in the nine-month period ended September 30, 2020, which mainly consisted of payments for upgrades for certain of our vessels and payments for the delivery of three newbuild vessels and two second hand vessels; partly off-set by proceeds we received from the sale of four of our vessels and by return of capital we received from nine entities jointly-owned with York pursuant to the Framework Deed.

Net cash provided by investing activities was $8.9 million in the nine-month period ended September 30, 2019, which mainly consisted of proceeds we received from the sale of two vessels, dividend distribution we received from 11 entities jointly -owned with York pursuant to the Framework Deed and advance payments for upgrades for certain of our vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $192.7 million in the nine-month period ended September 30, 2020, which mainly consisted of (a) $133.2 million net payments relating to our debt financing agreements, (b) $25.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2019, the first quarter of 2020 and the second quarter of 2020 and (c) $2.8 million we paid for dividends to holders of our 7.625% Series B Preferred Stock, $6.3 million we paid for dividends to holders of our 8.500% Series C Preferred Stock, $6.6 million we paid for dividends to holders of our 8.75% Series D Preferred Stock and $7.5 million we paid for dividends to holders of our 8.875% Series E Preferred Stock for the period from October 15, 2019 to January 14, 2020, January 15, 2020 to April 14, 2020 and April 15, 2020 to July 14, 2020.

Net cash used in financing activities was $144.8 million in the nine-month period ended September 30, 2019, which mainly consisted of (a) $97.1 million of net payments relating to our debt financing agreements (including the prepayments following the sale of two container vessels during the three-month period ended March 31, 2019), (b) $20.4 million we paid for dividends to holders of our common stock for the fourth quarter of 2018, the first quarter of 2019 and the second quarter of 2019 and (c) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock, $6.6 million we paid for dividends to holders of our Series D Preferred Stock and $7.5 million we paid for dividends to holders of our Series E Preferred Stock for the period from October 15, 2018 to January 14, 2019, January 15, 2019 to April 14, 2019 and April 15, 2019 to July 14, 2019.

Liquidity and Unencumbered Vessels

Cash and cash equivalents

As of September 30, 2020, we had a total cash liquidity of $187.4 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of October 27, 2020, the following vessels were free of debt.

Unencumbered Vessels
(Refer to fleet list for full details)

Vessel Name

Year
Built

TEU
Capacity

JPO SCORPIUS

2007

2,572

ETOILE

2005

2,556

MICHIGAN

2008

1,300

ENSENADA (*)

2001

5,576

MONEMVASIA (*)

1998

2,472

ARKADIA (*)

2001

1,550

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

Conference Call details:

On Wednesday, October 28, 2020 at 8:30 a.m. EST, Costamare’s management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or +1-412-317-9258 (from outside the US and the UK). Please quote “Costamare”. A replay of the conference call will be available until November 4, 2020. 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: 10149408.

Live webcast:

There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com). 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 46 years of history in the international shipping industry and a fleet of 72 containerships, with a total capacity of approximately 529,000 TEU, including two newbuild containerships currently under construction. Ten of our containerships have been acquired pursuant to the Framework Deed with York by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock trade on the New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”, “CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.

Forward-Looking Statements

This earnings release contains “forward-looking statements”. In some cases, you can identify these statements by forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could”, “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 the Company’s Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors” and the Company’s Results for the First Quarter ended March 31, 2020 on Form 6-K (filed on May 11, 2020 with the SEC) under the caption “Risk Factor Update”.

Company Contacts:

Gregory Zikos - Chief Financial Officer
Konstantinos Tsakalidis - Business Development

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

Fleet List

The table below provides additional information, as of October 27, 2020, 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(1) (U.S. dollars)

Expiration of Charter(2)

1

TRITON(ii)

Evergreen

2016

14,424

(*)

March 2026

2

TITAN(ii)

Evergreen

2016

14,424

(*)

April 2026

3

TALOS(ii)

Evergreen

2016

14,424

(*)

July 2026

4

TAURUS(ii)

Evergreen

2016

14,424

(*)

August 2026

5

THESEUS(ii)

Evergreen

2016

14,424

(*)

August 2026

6

YM TRIUMPH(ii)

Yang Ming

2020

12,690

(*)

May 2030

7

YM TRUTH(ii)

Yang Ming

2020

12,690

(*)

May 2030

8

YM TOTALITY(ii)

Yang Ming

2020

12,690

(*)

July 2030

9

CAPE AKRITAS(i)

ZIM

2016

11,010

34,750

August 2021

10

CAPE TAINARO(i)

ZIM

2017

11,010

38,000

March 2021

11

CAPE KORTIA(i)

ZIM

2017

11,010

34,750

August 2021

12

CAPE SOUNIO(i)

ZIM

2017

11,010

38,000

March 2021

13

CAPE ARTEMISIO(i)

Hapag Lloyd

2017

11,010

36,650

March 2025

14

COSCO GUANGZHOU

COSCO

2006

9,469

30,900

April 2022(3)

15

COSCO NINGBO

COSCO

2006

9,469

30,900

April 2022(3)

16

YANTIAN

COSCO

2006

9,469

(*)

November 2020

17

BEIJING

COSCO

2006

9,469

(*)

November 2020

18

COSCO HELLAS

COSCO

2006

9,469

(*)

November 2020

19

MSC AZOV

MSC

2014

9,403

46,300

December 2026(4)

20

MSC AMALFI

MSC

2014

9,403

46,300

March 2027(5)

21

MSC AJACCIO

MSC

2014

9,403

46,300

February 2027(6)

22

MSC ATHENS(ii)

MSC

2013

8,827

45,300

January 2026(7)

23

MSC ATHOS(ii)

MSC

2013

8,827

45,300

February 2026(8)

24

VALOR

Hapag Lloyd

2013

8,827

32,400

April 2025

25

VALUE

Hapag Lloyd

2013

8,827

32,400

April 2025

26

VALIANT

Hapag Lloyd

2013

8,827

32,400

June 2025

27

VALENCE

Hapag Lloyd

2013

8,827

32,400

July 2025

28

VANTAGE

Hapag Lloyd

2013

8,827

32,400

September 2025

29

NAVARINO

MSC

2010

8,531

23,000

March 2021

30

MAERSK KLEVEN

Maersk

1996

8,044

17,500

April 2021

31

MAERSK KOTKA

Maersk

1996

8,044

17,500

April 2021

32

MAERSK KOWLOON

Maersk

2005

7,471

16,000

June 2022

33

KURE

COSCO

1996

7,403

9,500

November 2020

34

MSC METHONI

MSC

2003

6,724

29,000

September 2021

35

YORK

Maersk

2000

6,648

21,250

August 2022(9)

36

KOBE

RCL Feeder

2000

6,648

14,500

August 2021

37

SEALAND WASHINGTON

Maersk

2000

6,648

18,500

March 2022(10)

38

SEALAND MICHIGAN

Maersk

2000

6,648

18,500

March 2022(10)

39

SEALAND ILLINOIS

Maersk

2000

6,648

18,500

March 2022(10)

40

MAERSK KOLKATA

Maersk

2003

6,644

18,500

March 2022(10)

41

MAERSK KINGSTON

Maersk

2003

6,644

18,500

March 2022(10)

42

MAERSK KALAMATA

Maersk

2003

6,644

18,500

March 2022(10)

43

VENETIKO

(*)

2003

5,928

(*)

July 2021

44

ENSENADA (i)

(*)

2001

5,576

21,500

June 2021(11)

45

ZIM NEW YORK

ZIM

2002

4,992

14,438

October 2021(12)

46

ZIM SHANGHAI

ZIM

2002

4,992

14,438

October 2021(12)

47

LEONIDIO(ii)

Maersk

2014

4,957

14,200

December 2024

48

KYPARISSIA(ii)

Maersk

2014

4,957

14,200

November 2024

49

MEGALOPOLIS

Maersk

2013

4,957

13,500

July 2025

50

MARATHOPOLIS

Maersk

2013

4.957

13,500

July 2025

51

OAKLAND EXPRESS

Hapag Lloyd

2000

4,890

13,750

January 2021

52

HALIFAX EXPRESS

Hapag Lloyd

2000

4,890

10,000

November 2020

53

VULPECULA

OOCL

2010

4,258

7,000

December 2020

54

VOLANS

ZIM

2010

4,258

7,000

November 2020

55

VIRGO

Evergreen

2009

4,258

8,600

February 2021

56

VELA

OOCL

2009

4,258

7,950

November 2020

57

ULSAN

Maersk

2002

4,132

12,000

June 2021

58

POLAR ARGENTINA(i)(ii)

Maersk

2018

3,800

19,700

October 2024

59

POLAR BRASIL(i)(ii)

Maersk

2018

3,800

19,700

January 2025

60

LAKONIA

COSCO

2004

2,586

7,500

November 2020

61

JPO SCORPIUS

Pool

2007

2,572

Pool Participation

62

ETOILE

(*)

2005

2,556

(*)

January 2021

63

AREOPOLIS

COSCO

2000

2,474

7,500

November 2020

64

MONEMVASIA(i)

Maersk

1998

2,472

9,250

November 2021

65

MESSINI

(*)

1997

2,458

9,850

February 2021

66

ARKADIA(i)

Evergreen

2001

1,550

8,650

November 2020

67

PROSPER

Sealand Maersk Asia

1996

1,504

8,500

March 2021(13)

68

MICHIGAN

MSC

2008

1,300

6,650

November 2020

69

TRADER

(*)

2008

1,300

(*)

January 2021

70

LUEBECK

MSC

2001

1,078

6,200

January 2021

Newbuilds



Vessel Name



Shipyard



Capacity (TEU)



Charterer

Expected Delivery(14)

1

YZJ2015-2060

Jiangsu Yangzijiang
Shipbuilding Group

12,690

Yang Ming

Q1 2021

2

YZJ2015-2061

Jiangsu Yangzijiang
Shipbuilding Group

12,690

Yang Ming

Q2 2021

(1) Daily charter rates are gross, unless stated otherwise. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.
(2) Charter terms and expiration dates are based on the earliest date charters could expire.
(3) This charter rate will be earned by Cosco Guangzhou and Cosco Ningbo from November 15, 2020. Until then both vessels are chartered at an undisclosed daily rate.
(4) This charter rate will be earned by MSC Azov until December 2, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.
(5) This charter rate will be earned by MSC Amalfi until March 16, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.
(6) This charter rate will be earned by MSC Ajaccio until February 1, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.
(7) This charter rate will be earned by MSC Athens until January 29, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.
(8) This charter rate will be earned by MSC Athos until February 24, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.
(9) This charter rate will be earned by York from December 1, 2020. Until then the daily charter rate will be $11,500.
(10) The daily rate for Sealand Washington, Sealand Michigan, Sealand Illinois, Maersk Kolkata, Maersk Kingston and Maersk Kalamata is a base rate of $16,000, adjusted pursuant to the terms of a 50:50 profit/loss sharing mechanism based on market conditions with a minimum charter rate of $12,000 and a maximum charter rate of $25,000.
(11) This charter rate will be earned by Ensenada from November 12, 2020. Until then the daily charter rate will be $8,700.
(12) The amounts in the table reflect the current charter terms, giving effect to our agreement with ZIM under its 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of ZIM’s equity and approximately $8.2 million in interest bearing notes maturing in 2023. In May 2020, the Company exercised its option to extend the charters of ZIM New York and ZIM Shanghai for a one year period at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for this sixth optional year has been determined at $14,438 per day.
(13) This charter rate will be earned by Prosper from November 28, 2020. Until then the daily charter rate will be $6,000.
(14) Based on latest shipyard construction schedule, subject to change.

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

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

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)

2019

2020

2019

2020

REVENUES:

Voyage revenue

$

353,641

$

341,176

$

123,631

$

107,903

EXPENSES:

Voyage expenses

(3,180

)

(6,383

)

(701

)

(2,380

)

Voyage expenses – related parties

(3,610

)

(4,753

)

(1,658

)

(1,623

)

Vessels' operating expenses

(87,322

)

(84,999

)

(29,158

)

(30,241

)

General and administrative expenses

(4,115

)

(5,301

)

(1,464

)

(1,543

)

Management fees - related parties

(16,164

)

(16,023

)

(5,337

)

(5,502

)

General and administrative expenses - non-cash component

(2,453

)

(2,416

)

(908

)

(908

)

Amortization of dry-docking and special survey costs

(6,737

)

(6,765

)

(2,266

)

(2,228

)

Depreciation

(85,081

)

(81,618

)

(25,320

)

(25,881

)

Loss on sale / disposal of vessels, net

(18,420

)

(65,260

)

-

(432

)

Loss on vessels held for sale

(480

)

(14,359

)

(480

)

-

Vessels’ impairment loss

(3,042

)

(31,577

)

-

-

Foreign exchange gains / (losses)

(28

)

(203

)

(45

)

4

Operating income

$

123,009

$

21,519

$

56,294

$

37,169

OTHER INCOME / (EXPENSES):

Interest income

$

2,512

$

1,464

$

826

$

377

Interest and finance costs

(69,342

)

(51,452

)

(24,026

)

(16,085

)

Swaps’ breakage cost, net

(16

)

(6

)

(16

)

(6

)

Income from equity method investments

7,409

12,201

3,110

3,960

Other

561

468

234

160

Loss on derivative instruments

(1,021

)

(2,392

)

(446

)

(326

)

Total other expenses

$

(59,897

)

$

(39,717

)

$

(20,318

)

$

(11,920

)

Net Income / (Loss)

$

63,112

$

(18,198

)

$

35,976

$

25,249

Earnings allocated to Preferred Stock

(23,452

)

(23,315

)

(7,904

)

(7,854

)

Gain on retirement of Preferred Stock

-

619

-

-

Net Income / (Loss) available to common stockholders

$

39,660

$

(40,894

)

$

28,072

$

17,395

Earnings / (Losses) per common share, basic and diluted

$

0.35

$

(0.34

)

$

0.24

$

0.14

Weighted average number of shares, basic and diluted

114,744,125

120,319,521

117,111,191

121,094,924

COSTAMARE INC.
Consolidated Balance Sheets

As of December 31,

As of September 30,

(Expressed in thousands of U.S. dollars)

2019

2020

ASSETS

(Unaudited)

CURRENT ASSETS:

Cash and cash equivalents

$

148,928

$

138,435

Restricted cash

6,912

5,591

Accounts receivable

7,397

8,321

Inventories

10,546

10,016

Due from related parties

7,576

2,122

Fair value of derivatives

748

-

Insurance claims receivable

1,607

1,498

Asset held for sale

4,908

5,750

Time charter assumed

192

191

Prepayments and other

8,430

9,693

Total current assets

$

197,244

$

181,617

FIXED ASSETS, NET:

Right-of-use assets

$

188,429

$

200,921

Vessels and advances, net

2,431,830

2,479,124

Total fixed assets, net

$

2,620,259

$

2,680,045

NON-CURRENT ASSETS:

Equity method investments

$

111,681

$

82,320

Deferred charges, net

21,983

27,064

Accounts receivable, non-current

8,600

3,911

Restricted cash

40,031

43,343

Fair value of derivatives, non-current

605

-

Time charter assumed, non-current

1,030

887

Other non-current assets

10,525

10,456

Total assets

$

3,011,958

$

3,029,643

LIABILITIES AND STOCKHOLDERS EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt

$

210,745

$

167,037

Accounts payable

6,215

9,506

Due to related parties

473

385

Finance lease liabilities

16,810

16,451

Accrued liabilities

19,417

19,977

Unearned revenue

10,387

12,047

Fair value of derivatives

397

3,517

Other current liabilities

2,090

2,390

Total current liabilities

$

266,534

$

231,310

NON-CURRENT LIABILITIES

Long-term debt, net of current portion

$

1,206,405

$

1,312,411

Finance lease liabilities, net of current portion

119,925

120,512

Fair value of derivatives, net of current portion

433

4,479

Unearned revenue, net of current portion

7,933

24,326

Total non-current liabilities

$

1,334,696

$

1,461,728

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS EQUITY:

Preferred stock

$

-

$

-

Common stock

12

12

Additional paid-in capital

1,351,352

1,362,370

Retained earnings / (Accumulated deficit)

60,578

(16,879

)

Accumulated other comprehensive loss

(1,214

)

(8,898

)

Total stockholders equity

$

1,410,728

$

1,336,605

Total liabilities and stockholders equity

$

3,011,958

$

3,029,643