News Column

Costamare Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2013

January 27, 2014

ATHENS, GREECE -- (Marketwired) -- 01/27/14 -- Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the fourth quarter and the year ended December 31, 2013 . Voyage revenues of $112.5 million and $414.2 million for the three months and the year ended December 31, 2013 , respectively. Voyage revenues adjusted on a cash basis of $116.8 million and $429.2 million for the three months and the year ended December 31, 2013 , respectively. Adjusted EBITDA of $75.7 million and $282.4 million for the three months and the year ended December 31, 2013 , respectively. Net income of $26.9 million and $103.1 million for the three months and the year ended December 31, 2013 , respectively. Net income available to common stockholders of $25.9 million or $0.35 per share and $101.6 million or $1.36 per share for the three months and the year ended December 31, 2013 , respectively. Adjusted Net income available to common stockholders of $30.5 million or $0.41 per share and $108.8 million or $1.46 per share for the three months and the year ended December 31, 2013 , respectively. See "Financial Summary" and "Non-GAAP Measures" below for additional detail. New Business Developments New Acquisitions We have ordered nine newbuilds with capacities between 9,000 and 14,000 TEU pursuant to our joint venture agreement with York Capital Management ("York). The newbuilds are scheduled to be delivered between the 4th quarter of 2015 and the third quarter of 2016. The Company holds an equity interest ranging between 25% and 49% in each of the relevant vessel-owning entities. Long term time charters have been agreed for the five 14,000 TEU capacity newbuilds with members of the Evergreen Group ("Evergreen") which represent total contracted revenue for the joint venture of $ 850 million , assuming the exercise of the owner's options. Deliveries of existing orders In November 2013 , the Company took delivery of the 8,827 TEU newbuild containership vessel Vantage built by Sungdong Shipbuilding and Marine Engineering in South Korea . Upon delivery, the vessel commenced its long term charter with Evergreen. In January 2014 , the Company took delivery of the 9,403 TEU newbuild containership vessel MSC Azov built by Shanghai Jiangnan Changxing Heavy Industry in China . Upon delivery, the vessel commenced its long term charter with MSC. New Financing Arrangements In January 2014 we agreed with a leading Chinese financial institution the refinancing of three of our newbuildings, under a ten-year sale and leaseback transaction. The refinancing of the first vessel, the 9,403 TEU MSC Azov, became effective upon her delivery on January 14, 2014 . Under the sale and leaseback transaction, the vessel will be chartered back on a bareboat basis to one of our subsidiaries and will remain on time charter to its current time charterer. New Chartering Arrangements In January 2014 , the Company entered into an agreement to charter the 2010 built 8,531 TEU vessel Navarino for a period of approximately one year to MSC. The vessel is expected to be delivered to its charterers in March 2014 . In October 2013 , the Company entered into an agreement to extend the charter of the 1991 built 3,351 TEU vessel Karmen for a period of minimum two months and maximum six months with Sea Consortium at a daily rate of $6,800 , starting from November 15, 2013 . Preferred Share Offering On January 21, 2014 , the Company completed a public offering of 4.0 million shares of its 8.50% Series C Cumulative Redeemable Perpetual Preferred Stock (the "Series C Preferred Stock"). The gross proceeds from the offering before the underwriting discount and other offering expenses were $100.0 million . We plan to use the net proceeds of this offering for general corporate purposes, including vessel acquisitions or investments under the Framework Agreement. Dividend Announcements On January 2, 2014 , we declared a dividend of $0.476563 per share of our Series B Preferred Stock paid on January 15, 2014 , to holders of record on January 14, 2014 . On January 6, 2014 , we declared a dividend for the fourth quarter ended December 31, 2013 , of $0.27 per share of our common stock, payable on February 4, 2014 , to stockholders of record at the close of trading of the Company's common stock on the New York Stock Exchange on January 21, 2014 . This will be the Company's 13th consecutive quarterly dividend since it commenced trading on the New York Stock Exchange . Mr. Gregory Zikos , Chief Financial Officer of Costamare Inc. , commented: "During the fourth quarter of the year, the Company delivered positive results while at the same time implementing its fleet renewal and expansion strategy. Together with our partners we have ordered in total 9 newbuildings with deliveries starting from the end of 2015. Five 14,000 TEU ships have been chartered to Evergreen under long-term charters, representing total contracted revenues of approximately $850 million . Regarding our existing newbuilding program, we accepted delivery of eight out of the ten newbuildings ordered in total. The remaining two deliveries are expected to take place in March and April of 2014. On the financing front, we have agreed to refinance three of our newbuildings with a leading Chinese financial institution, and last week we completed a public offering of 4.0 million perpetual preferred shares, raising gross proceeds of $100.0 million . Regarding our chartering arrangements, our re-chartering risk is minimized. The charters for the vessels opening in 2014 account for approximately 3% of our 2014 contracted revenues. Finally, on January 2 , we declared a dividend on our Series B Preferred Stock, and on January 6 , we declared a dividend on our common stock. We are successfully executing on our growth strategy, having invested and placed orders together with our partners close to $1.0 billion in new projects since the inception of our joint venture 8 months ago. This year also marks the 40th anniversary of Costamare . We feel we are well positioned to continue to grow selectively and on healthy grounds." Financial Summary Three-month period ended Year ended December 31, December 31, ------------------------ ----------------------- (Expressed in thousands of U.S. dollars, except share and per share data): 2012 2013 2012 2013 ------------ ----------- ----------- ----------- Voyage revenue $ 386,155 $ 414,249 $ 95,193 $ 112,549 Accrued charter revenue (1) $ 6,261 $ 14,976 $ 2,352 $ 4,303 Voyage revenue adjusted on a cash basis (2) $ 392,416 $ 429,225 $ 97,545 $ 116,852 Adjusted EBITDA (3) $ 253,097 $ 282,414 $ 62,510 $ 75,692 Adjusted Net Income available to common stockholders (3) $ 91,346 $ 108,846 $ 23,625 $ 30,477 Weighted Average number of shares 67,612,842 74,800,000 73,658,696 74,800,000 Adjusted Earnings per share (3) $ 1.35 $ 1.46 $ 0.32 $ 0.41 EBITDA (3) $ 242,880 $ 275,119 $ 61,816 $ 71,116 Net Income $ 81,129 $ 103,087 $ 22,931 $ 26,852 Net Income available to common stockholders $ 81,129 $ 101,551 $ 22,931 $ 25,901 Weighted Average number of shares 67,612,842 74,800,000 73,658,696 74,800,000 Earnings per share $ 1.20 $ 1.36 $ 0.31 $ 0.35 (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, or "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, 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 to EBITDA and adjusted EBITDA below. Non-GAAP Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (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. Tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the years and three-month periods ended December 31, 2013 and December 31, 2012 . Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income, (iii) Adjusted earnings per share, (iv) EBITDA and (v) Adjusted EBITDA. Reconciliation of Net Income to Adjusted Net Income available to common stockholders Three-month period ended Year ended December 31, December 31, ----------------------- ------------------------ (Expressed in thousands of U.S. dollars, except share and per share data) 2012 2013 2012 2013 ----------- ----------- ----------- ----------- Net Income $ 81,129 $ 103,087 $ 22,931 $ 26,852 Distributed earnings allocated to Preferred Stock - (1,536) - (951) ----------- ----------- ----------- ----------- Net Income available to common stockholders 81,129 101,551 22,931 25,901 ----------- ----------- ----------- ----------- Accrued charter revenue 6,261 14,976 2,352 4,303 (Gain)/ Loss on sale/disposal of vessels 2,796 (518) (1,500) - Realized (Gain)/ Loss on Euro/USD forward contracts 698 (615) (299) - (Gain)/ Loss on derivative instruments 462 (6,548) 141 273 ----------- ----------- ----------- ----------- Adjusted Net income available to common stockholders $ 91,346 $ 108,846 $ 23,625 $ 30,477 =========== =========== =========== =========== Adjusted Earnings per Share $ 1.35 $ 1.46 $ 0.32 $ 0.41 =========== =========== =========== =========== Weighted average number of shares 67,612,842 74,800,000 73,658,696 74,800,000 =========== =========== =========== =========== Adjusted Net income and Adjusted Earnings per Share represent net income before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, gain/ (loss) on sale/ disposal of vessels, realized (gain)/ loss on Euro/USD forward contracts 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 and Adjusted Earnings per Share are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Adjusted Net income 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 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 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 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 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 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. Reconciliation of Net Income to Adjusted EBITDA Three-month period ended Year ended December 31, December 31, ------------------------ ------------------------ (Expressed in thousands of U.S. dollars) 2012 2013 2012 2013 ----------- ----------- ----------- ----------- Net Income $ 81,129 $ 103,087 $ 22,931 $ 26,852 Interest and finance costs 74,734 74,533 16,894 17,610 Interest income (1,495) (543) (322) (95) Depreciation 80,333 89,958 20,151 24,800 Amortization of dry- docking and special survey costs 8,179 8,084 2,162 1,949 ----------- ----------- ----------- ----------- EBITDA 242,880 275,119 61,816 71,116 Accrued charter revenue 6,261 14,976 2,352 4,303 (Gain)/ Loss on sale/disposal of vessels 2,796 (518) (1,500) - Realized (Gain)/ Loss on Euro/USD forward contracts 698 (615) (299) - Gain/ (Loss) on derivative instruments 462 (6,548) 141 273 ----------- ----------- ----------- ----------- Adjusted EBITDA $ 253,097 $ 282,414 $ 62,510 $ 75,692 =========== =========== =========== =========== EBITDA represents net income before interest and finance costs, interest income, depreciation and amortization of deferred dry-docking and special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation, amortization of deferred dry-docking and special survey costs, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, gain/ (loss) on sale/disposal of vessels, realized gain/ (loss) on Euro/USD forward contracts 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. generally accepted accounting principles, or "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. Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income. Results of Operations Three-month period ended December 31, 2013 compared to the three-month period ended December 31, 2012 During the three-month periods ended December 31, 2013 and 2012, we had an average of 51.6 and 47.0 vessels, respectively, in our fleet. In the three-month period ended December 31, 2013 , we accepted delivery of the newbuild vessel Vantage with a TEU capacity of 8,827. In the three-month period ended December 31, 2012 , no vessels were acquired or sold. In the three-month periods ended December 31, 2013 and 2012, our fleet ownership days totaled 4,746 and 4,324 days, respectively. Ownership days are the primary driver of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned. Three-month period ended (Expressed in millions of U.S. December 31, Percentage ------------------ dollars, except percentages) 2012 2013 Change Change -------- -------- Voyage revenue $ 95.2 $ 112.5 $ 17.3 18.2% Voyage expenses (1.5) (1.0) (0.5) (33.3%) Voyage expenses - related parties (0.7) (0.9) 0.2 28.6% Vessels operating expenses (27.8) (30.1) 2.3 8.3% General and administrative expenses (1.0) (5.2) 4.2 420.0% Management fees - related parties (3.8) (4.2) 0.4 10.5% Amortization of dry-docking and special survey costs (2.2) (1.9) (0.3) (13.6%) Depreciation (20.2) (24.8) 4.6 22.8% Gain on sale / disposal of vessels 1.5 - (1.5) (100.0%) Foreign exchange losses (0.1) (0.1) - - Interest income 0.3 0.1 (0.2) (66.7%) Interest and finance costs (16.9) (17.6) 0.7 4.1% Equity gain on investments - 0.4 0.4 100.0% Other 0.2 - (0.2) (100.0%) Loss on derivative instruments (0.1) (0.3) 0.2 200.0% -------- -------- Net Income $ 22.9 $ 26.9 ======== -------- Three-month period ended (Expressed in millions of U.S. December 31, Percentage ------------------- dollars, except percentages) 2012 2013 Change Change --------- --------- Voyage revenue $ 95.2 $ 112.5 $ 17.3 18.2% Accrued charter revenue 2.4 4.3 1.9 79.2% --------- --------- Voyage revenue adjusted on a cash basis $ 97.6 $ 116.8 $ 19.2 19.7% ========= ========= Fleet operational data Three-month period ended December 31, Percentage ------------------- 2012 2013 Change Change --------- --------- Average number of vessels 47.0 51.6 4.6 9.8% Ownership days 4,324 4,746 422 9.8% Number of vessels under dry- docking 3 1 (2) Voyage Revenue Voyage revenue increased by 18.2%, or $17.3 million , to $112.5 million during the three-month period ended December 31, 2013 , from $95.2 million during the three-month period ended December 31, 2012 . This increase was mainly due to (i) revenue earned by the newbuild vessels delivered to us during the year ended December 31, 2013 ; partly offset by (ii) decreased charter rates in certain of our vessels during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 , and (iii) revenues not earned by vessels which were sold for scrap during the year ended December 31, 2013 . Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 19.7%, or $19.2 million , to $116.8 million during the three-month period ended December 31, 2013 , from $97.6 million during the three-month period ended December 31, 2012 . This increase was mainly due to (i) revenue earned by the newbuild vessels delivered to us during the year ended December 31, 2013 ; partly offset by (ii) decreased charter rates in certain of our vessels during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 , and (iii) revenues not earned by vessels which were sold for scrap during the year ended December 31, 2013 . Voyage Expenses Voyage expenses decreased by 33.3% or $0.5 million , to $1.0 million during the three-month period ended December 31, 2013 , from $1.5 million during the three-month period ended December 31, 2012 . Voyage expenses mainly include (i) off-hire expenses of our fleet, mainly related to fuel consumption and (ii) third party commissions. The decrease during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 , was mainly attributable to the decreased off-hire expenses, mainly relating to bunkers consumption. Voyage Expenses - related parties Voyage expenses - related parties in the amount of $0.9 million during the three-month period ended December 31, 2013 and in the amount of $0.7 million during the three-month period ended December 31, 2012 , represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our group management agreement. Vessels' Operating Expenses Vessels' operating expenses, which also include the realized gain/ (loss) under derivative contracts entered into in relation to foreign currency exposure, increased by 8.3%, or $2.3 million , to $30.1 million during the three-month period ended December 31, 2013 , from $27.8 million during the three-month period ended December 31, 2012 . The increase was partly attributable to the increased ownership days of our fleet during the three-month period ended December 31, 2013 compared to the three-month period ended December 31, 2012 . General and Administrative Expenses General and administrative expenses increased by $4.2 million , to $5.2 million during the three-month period ended December 31, 2013 , from $1.0 million during the three-month period ended December 31, 2012 . General and administrative expenses for the three-month periods ended December 31, 2013 and 2012, included $0.25 million in each period for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our group management agreement. Management Fees - related parties Management fees paid to our managers increased by 10.5%, or $0.4 million , to $4.2 million during the three-month period ended December 31, 2013 , from $3.8 million during the three-month period ended December 31, 2012 . The increase was primarily attributable to (i) the inflation related upward adjustment by 4% of the management fee for each vessel (effective January 1, 2013 ), as provided under our group management agreement and (ii) the increased average number of vessels during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 . Amortization of Dry-docking and Special Survey Costs Amortization of deferred dry-docking and special survey costs was $1.9 million for the three-month period ended December 31, 2013 and $2.2 million for the three-month period ended December 31, 2012 . During the three-month periods ended December 31, 2013 and 2012, one vessel and three vessels, respectively, underwent and completed their special survey. Depreciation Depreciation expense increased by 22.8%, or $4.6 million , to $24.8 million during the three-month period ended December 31, 2013 , from $20.2 million during the three-month period ended December 31, 2012 . The increase was mainly attributable to the depreciation expense charged for the seven newbuilding vessels delivered to us during the year ended December 31, 2013 , partly offset by the depreciation expense not charged for the vessels sold for scrap during the year ended December 31, 2013 . Gain on Sale/Disposal of Vessels During the three-month period ended December 31, 2013 , no vessels were sold. During the three-month period ended December 31, 2012 , we recorded a book gain of $1.5 million from the effect of the partial reversal of a provision recorded in 2011 for costs associated with the grounding of the vessel Rena . Foreign Exchange Losses Foreign exchange losses were $0.1 million during the three-month period ended December 31, 2013 and $0.1 million during the three-month period ended December 31, 2012 . Interest Income Interest income decreased by 66.7% or $0.2 million , to $0.1 million during the three-month period ended December 31, 2013 , from $0.3 million during the three-month period ended December 31, 2012 . The decrease was mainly attributable to the decreased average cash balance during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 . Interest and Finance Costs Interest and finance costs increased by 4.1%, or $0.7 million , to $17.6 million during the three-month period ended December 31, 2013 , from $16.9 million during the three-month period ended December 31, 2012 . The increase was mainly attributable to the increased interest expense charged to the consolidated income statement in relation with the loan facilities of the seven newbuild vessels which were delivered to us during the year ended December 31, 2013 ; partly offset by the decreased loan commitment fees charged to us during the three-month period ended December 31, 2013 , compared to the three-month period ended December 31, 2012 . Equity Gain on Investments The equity gain on investments of $0.4 million for the three month period ended December 31, 2013 , represents our share of the net earnings of thirteen jointly owned companies pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of these companies. Loss on Derivative Instruments The fair value of our 27 interest rate derivative instruments which were outstanding as of December 31, 2013 , equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2013 , the fair value of these 27 interest rate derivative instruments in aggregate amounted to a liability of $103.2 million . Twenty-six of the 27 interest rate derivative instruments that were outstanding as at December 31, 2013 , qualified for hedge accounting and the effective portion of the change in their fair value is recorded in "Other Comprehensive Income" ("OCI")". For the three-month period ended December 31, 2013 , a net gain of $12.0 million has been included in "OCI" and a net loss of $0.3 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 December 31, 2013 . Cash Flows Three-month periods ended December 31, 2013 and 2012 Condensed cash flows Three-month period ended December 31, ------------------------ (Expressed in millions of U.S. dollars) 2012 2013 ----------- ----------- Net Cash Provided by Operating Activities $ 44.7 $ 57.8 Net Cash Used in Investing Activities $ (74.5) $ (107.9) Net Cash Provided by Financing Activities $ 80.0 $ 23.1 Net Cash Provided by Operating Activities Net cash flows provided by operating activities for the three-month period ended December 31, 2013 , increased by $13.1 million to $57.8 million , compared to $44.7 million for the three-month period ended December 31, 2012 . The increase was primarily attributable to increased cash from operations of $19.3 million due to cash generated from the chartering of the seven newbuild vessels delivered to us during the year ended December 31, 2013 and to decreased dry-docking payments of $2.3 million , partly offset by unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $5.1 million . Net Cash Used in Investing Activities Net cash used in investing activities was $107.9 million in the three-month period ended December 31, 2013 , which primarily consisted of $108.1 million advance payments for the construction and purchase of three newbuild vessels. Net cash used in investing activities was $74.5 million in the three-month period ended December 31, 2012 , which mainly consisted of (a) $82.1 million advance payments for the construction and purchase of five newbuild vessels and (b) $7.9 million advance payment we received from the sale of one vessel for scrap which was delivered to her scrap buyers in January 2013 . Net Cash Provided By Financing Activities Net cash provided by financing activities was $23.1 million in the three-month period ended December 31, 2013 , which mainly consisted of (a) $43.2 million of indebtedness that we repaid, (b) $91.5 million we drew down from two of our credit facilities (c) $20.2 million we paid for dividends to our stockholders for the third quarter of 2013 and (d) $0.7 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares for the period from August 6, 2013 to October 14, 2014 . Net cash provided by financing activities was $80.0 million in the three-month period ended December 31, 2012 , which mainly consisted of (a) $40.8 million of indebtedness that we repaid, (b) $47.5 million we drew down from three of our credit facilities, (c) $20.2 million we paid for dividends to our stockholders for the third quarter of the year 2012 and (d) $93.5 million net proceeds we received from our follow-on offering in October 2012 , net of underwriting discounts and expenses incurred in the offering. Results of Operations Year ended December 31, 2013 compared to the year ended December 31, 2012 During the year ended December 31, 2013 and 2012, we had an average of 49.6 and 46.8 vessels, respectively, in our fleet. In the year ended December 31, 2013 , we accepted delivery of the newbuild vessels MSC Athens, MSC Athos, Valor, Value, Valiant, Valence and Vantage with an aggregate TEU capacity of 61,789TEU and the secondhand vessel Venetiko with a TEU capacity of 5,928 and we sold three vessels, the MSC Washington, MSC Austria and MSC Antwerp with an aggregate TEU capacity of 11,343. In the year ended December 31, 2012 , we accepted delivery of five secondhand vessels MSC Ulsan, Koroni, Kyparissia, Stadt Luebeck and Messini with an aggregate TEU capacity of 15,352 and we sold four vessels Gather, Gifted, Genius I and Horizon with an aggregate TEU capacity of 9,834. In the years ended December 31, 2013 and 2012, our fleet ownership days totaled 18,119 and 17,113 days, respectively. Ownership days are the primary driver of voyage revenue and vessels operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned. Year ended (Expressed in millions of U.S. December 31, Percentage -------------------- dollars, except percentages) 2012 2013 Change Change --------- --------- Voyage revenue $ 386.2 414.2 $ 28.0 7.3% Voyage expenses (5.5) (3.5) (2.0) (36.4%) Voyage expenses - related parties (2.9) (3.1) 0.2 6.9% Vessels operating expenses (112.5) (116.0) 3.5 3.1% General and administrative expenses (4.0) (8.5) 4.5 112.5% Management fees - related parties (15.2) (16.6) 1.4 9.2% Amortization of dry-docking and special survey costs (8.2) (8.1) (0.1) (1.2%) Depreciation (80.3) (89.9) 9.6 12.0% Gain/ (Loss) on sale/disposal of vessels (2.8) 0.5 3.3 117.9% Foreign exchange gains 0.1 - (0.1) (100.0%) Interest income 1.5 0.6 (0.9) (60.0%) Interest and finance costs (74.7) (74.5) (0.2) (0.3%) Equity gain on investments - 0.7 0.7 100.0% Other (0.1) 0.8 0.9 900.0% Gain/ (Loss) on derivative instruments (0.5) 6.5 7.0 1,400.0% --------- --------- Net Income $ 81.1 $ 103.1 ========= ========= (Expressed in millions of U.S. Year ended dollars, except percentages) December 31, Percentage ------------------- 2012 2013 Change Change --------- --------- Voyage revenue $ 386.2 $ 414.2 $ 28.0 7.3% Accrued charter revenue 6.2 15.0 8.8 141.9% --------- --------- Voyage revenue adjusted on a cash basis $ 392.4 $ 429.2 $ 36.8 9.4% ========= ========= Year ended December 31, Percentage ------------------- Fleet operational data 2012 2013 Change Change --------- --------- Average number of vessels 46.8 49.6 2.8 6.0% Ownership days 17,113 18,119 1,006 5.9% Number of vessels under dry- docking 9 8 (1) Voyage Revenue Voyage revenue increased by 7.3%, or $28.0 million , to $414.2 million during the year ended December 31, 2013 , from $386.2 million during the year ended December 31, 2012 . This increase was mainly attributable to (i) revenue earned by the newbuild vessels delivered to us during the year ended December 31, 2013 ; partly offset by (ii) decreased charter rates in certain of our vessels during the year ended December 31, 2013 , compared to the year ended December 31, 2012 , and (iii) revenues not earned by vessels which were sold for scrap during the years ended December 31, 2013 and 2012. Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 9.4%, or $36.8 million , to $429.2 million during the year ended December 31, 2013 , from $392.4 million during the year ended December 31, 2012 . This increase was mainly attributable to (i) revenue earned by the newbuild vessels delivered to us during the year ended December 31, 2013 ; partly offset by (ii) decreased charter rates in certain of our vessels during the year ended December 31, 2013 , compared to the year ended December 31, 2012 , and (iii) revenues not earned by vessels which were sold for scrap during the years ended December 31, 2013 and 2012. Voyage Expenses Voyage expenses decreased by 36.4%, or $2.0 million , to $3.5 million during the year ended December 31, 2013 , from $5.5 million during the year ended December 31, 2012 . The decrease was primarily attributable to the decreased off-hire expenses of our fleet, mainly bunkers consumption and by the decreased third party commissions charged to us during the year ended December 31, 2013 , compared to the year ended December 31, 2012 . Voyage Expenses - related parties Voyage expenses - related parties increased by 6.9% or $0.2 million to $3.1 million during the year ended December 31, 2013 , from $2.9 million during the year ended December 31, 2012 and represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our group management agreement. Vessels' Operating Expenses Vessels' operating expenses, which also includes the realized gain/ (loss) under derivative contracts entered into in relation to foreign currency exposure, increased by 3.1% or $3.5 million to $116.0 million during the year ended December 31, 2013 , from $112.5 million during the year ended December 31, 2012 . The increase was mainly attributable to the increased ownership days of our fleet during the year ended December 31, 2013 compared to the year ended December 31, 2012 . General and Administrative Expenses General and administrative expenses increased by $4.5 million , to $8.5 million during the year ended December 31, 2013 , from $4.0 million during the year ended December 31, 2012 . Furthermore, General and administrative expenses for the years ended December 31, 2013 and December 31, 2012 , include $1.0 million in each period for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our group management agreement. Management Fees - related parties Management fees paid to our managers increased by 9.2%, or $1.4 million , to $16.6 million during the year ended December 31, 2013 , from $15.2 million during the year ended December 31, 2012 . The increase was primarily attributable to (i) the inflation related upward adjustment by 4% of the management fee for each vessel (effective January 1, 2013 ), as provided under our group management agreement and (ii) the increased average number of vessels during the year ended December 31, 2013 , compared to the year ended December 31, 2012 . Amortization of Dry-docking and Special Survey Costs Amortization of deferred dry-docking and special survey costs for the years ended December 31, 2013 and 2012 was $8.1 million and $8.2 million , respectively. During the years ended December 31, 2013 and 2012, eight vessels and nine vessels, respectively, underwent their special survey. Depreciation Depreciation expense increased by 12.0%, or $9.6 million , to $89.9 million during the year ended December 31, 2013 , from $80.3 million during the year ended December 31, 2012 . The increase was primarily attributable to the depreciation expense charged for the seven newbuild vessels delivered to us during the year ended December 31, 2013 . Gain/ (Loss) on Sale/Disposal of Vessels During the year ended December 31, 2013 , we recorded a net gain of $0.5 million from the sale of three vessels. During the year ended December 31, 2012 , we recorded a net loss of $2.8 million mainly from the sale of four vessels (including the effect of the partial reversal of a provision recorded in 2011 for costs associated with the grounding of the vessel Rena ). Foreign Exchange Gains Foreign exchange gains amounted to nil and $0.1 million during the years ended December 31, 2013 and 2012, respectively. Interest Income During the year ended December 31, 2013 , interest income decreased by 60.0%, or $0.9 million , to $0.6 million from $1.5 million during the year ended December 31, 2012 . Interest and Finance Costs Interest and finance costs decreased by 0.3%, or $0.2 million , to $74.5 million during the year ended December 31, 2013 , from $74.7 million during the year ended December 31, 2012 . The decrease was mainly attributable to (i) the capitalized interest in relation with our newbuilding program, (ii) the decreased commitment fees charged to us; partly offset by the increased interest expense charged to our consolidated income statement in relation with the loan facilities of the seven newbuild vessels which were delivered to us during the year ended December 31, 2013 . Equity Gain on Investments The equity gain on investments of $0.7 million represents our share of the net earnings of thirteen jointly owned companies formed pursuant to the Framework Agreement with York. We hold a range of 25% to 49% of the capital stock of each company. Gain/ (Loss) on Derivative Instruments The fair value of our 27 interest rate derivative instruments which were outstanding as of December 31, 2013 , equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2013 , the fair value of these 27 interest rate derivative instruments in aggregate amounted to a liability of $103.2 million . Twenty-six of the 27 interest rate derivative instruments that were outstanding as at December 31, 2013 , qualified for hedge accounting and the effective portion of the change in their fair value is recorded in "Other Comprehensive Income" ("OCI"). For the year ended December 31, 2013 , a gain of $71.1 million has been included in "OCI" and a net gain of $6.5 million has been included in "Gain/ (Loss) on derivative instruments" in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the year ended December 31, 2013 . Cash Flows Year ended December 31, 2013 and 2012 Condensed cash flows Year ended December 31, ---------------------------- (Expressed in millions of U.S. dollars) 2012 2013 ------------- ------------- Net Cash Provided by Operating Activities $ 168.1 $ 186.7 Net Cash Used in Investing Activities $ (236.5) $ (621.1) Net Cash Provided by Financing Activities $ 237.7 260.4 Net Cash Provided by Operating Activities Net cash flows provided by operating activities for the year ended December 31, 2013 , increased by $18.6 million to $186.7 million , compared to $168.1 million for the year ended December 31, 2012 . The increase was primarily attributable to increased cash from operations of $36.8 million due to cash generated from the charters of the seven newbuild vessels delivered to us during the year ended December 31, 2013 and to decreased dry-docking payments of $5.0 million , partly offset by unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $20.1 million and increased payments for interest (including swap payments) of $2.7 million . Net Cash Used in Investing Activities Net cash used in investing activities was $621.1 million in the year ended December 31, 2013 , which consisted primarily of (a) $590.4 million advance payments for the construction and purchase of ten newbuild vessels, (b) $51.9 million in payments for the acquisition of four secondhand vessels, (c) $8.7 million in payments, pursuant to the Framework Agreement with York, to hold a minority equity interest in jointly-owned companies, (d) $13.9 million net proceeds we received from the sale for scrap of MSC Antwerp and MSC Austria (including $0.6 million in payments for expenses related to the sale of MSC Washington) and (e) $16.0 million we received, pursuant to the Framework Agreement with York, for York's 51% equity interest in the ship-owning companies of the vessels Petalidi, Ensenada Express and X-Press Padma and for initial working capital for such ship-owning companies. Net cash used in investing activities was $236.5 million in the year ended December 31, 2012 , which consisted of (a) $191.2 million advance payments for the construction and purchase of ten newbuild vessels, (b) $74.1 million in payments for the acquisition of five secondhand vessels and (c) $28.7 million we received from the sale of four vessels, including the advance payment we received from the sale of one vessel for scrap which was delivered to her scrap buyers in January 2013 . Net Cash Provided By Financing Activities Net cash provided by financing activities was $260.4 million in the year ended December 31, 2013 , which mainly consisted of (a) $163.7 million of indebtedness that we repaid, (b) $469.4 million we drew down from four of our credit facilities, (c) $80.8 million we paid for dividends to our stockholders for the fourth quarter of the year ended December 31, 2012 , and the first, second and third quarters of 2013, (d) $48.0 million net proceeds we received from our public offering in August 2013 of 2.0 million shares of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares, net of underwriting discounts and expenses incurred in the offering and (e) $0.7 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Shares for the period from August 6, 2013 to October 14, 2013 . Net cash provided by financing activities was $237.7 million in the year ended December 31, 2012 , which mainly consisted of (a) $170.2 million of indebtedness that we repaid, (b) $288.6 million we drew down from six of our credit facilities, (c) $73.1 million we paid for dividends to our stockholders for the fourth quarter of the year ended December 31, 2011 , first quarter of the year 2012, the second quarter of the year 2012 and the third quarter of the year 2012 and (d) $194.1 million net proceeds we received from our two follow-on offerings in March 2012 and October 2012 , net of underwriting discounts and expenses incurred in the offerings. Liquidity and Capital Expenditures Cash and cash equivalents As of December 31, 2013 , we had a total cash liquidity of $152.3 million , consisting of cash, cash equivalents and restricted cash. Debt-free vessels As of January 27, 2014 , the following vessels were free of debt. Unencumbered Vessels in the water(*) (refer to fleet list on page 17 for full charter details) Year TEU Vessel Name Built Capacity ----------- ----------- NAVARINO 2010 8,531 VENETIKO 2003 5,928 MESSINI 1997 2,458 (*) Does not include three secondhand vessels acquired and nine newbuild vessels ordered pursuant to the Framework Agreement with York , which are also free of debt. Capital commitments As of January 27, 2014 , we had outstanding commitments relating to our contracted newbuilds, including the JV newbuilds, aggregating approximately $382.6 million payable in installments until the vessels are delivered, which amount includes our interest in the relevant vessel-owning entities. Conference Call details: On Tuesday, January 28, 2014 at 8:30 a.m., ET , Costamare's management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-866-524-3160 (from the US), 0808 238 9064 (from the UK ) or +1-412-317-6760 (from outside the US). Please quote "Costamare". A replay of the conference call will be available until February 28, 2014 . 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: 10039870. 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 40 years of history in the international shipping industry and a fleet of 67 containerships, with a total capacity in excess of 438,000 TEU, including 11 newbuild containerships on order. Twelve of our containerships, including nine newbuilds, have been acquired pursuant to the Framework Agreement with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company's common stock, Series B Preferred Stock and Series C Preferred Stock trade on the New York Stock Exchange under the symbols "CMRE", "CMRE PR B" and "CMRE PR C", respectively. Forward-Looking Statements This earnings release contains "forward-looking statements". In some cases, you can identify these statements by forward-looking words such as "believe", "intend", "anticipate", "estimate", "project", "forecast", "plan", "potential", "may", "should", "could" and "expect" and similar expressions. These statements are not historical facts but instead represent only Costamare's belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare's control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.'s Annual Report on Form 20-F (File No. 001-34934) under the caption "Risk Factors". Fleet List The tables below provide additional information, as of January 27, 2014 , about our fleet of containerships, including our newbuilds on order and the vessels acquired pursuant to the Framework Agreement with York . Each vessel is a cellular containership, meaning it is a dedicated container vessel. ---------------------------------------------------------------------------- Average Daily Charter Current Rate Daily Until Vessel Year Capacity Time Charter Expiration Earliest Name Charterer Built (TEU) Charter Rate of Expiry Term(1) (U.S. Charter(1) of dollars) Charter (U.S. dollars) (2) ---------------------------------------------------------------------------- 1 COSCO 12 December GUANGZHOU COSCO 2006 9,469 years 36,400 2017 36,400 ---------------------------------------------------------------------------- 2 COSCO 12 January NINGBO COSCO 2006 9,469 years 36,400 2018 36,400 ---------------------------------------------------------------------------- 3 COSCO 12 February YANTIAN COSCO 2006 9,469 years 36,400 2018 36,400 ---------------------------------------------------------------------------- 4 COSCO 12 BEIJING COSCO 2006 9,469 years 36,400 April 2018 36,400 ---------------------------------------------------------------------------- 5 COSCO 12 HELLAS COSCO 2006 9,469 years 37,519 May 2018 37,519 ---------------------------------------------------------------------------- 6 10 November MSC AZOV MSC 2014 9,403 years 43,000 2023 43,000 ---------------------------------------------------------------------------- 7 10 January MSC ATHENS MSC 2013 8,827 years 42,000 2023 42,000 ---------------------------------------------------------------------------- 8 10 February MSC ATHOS MSC 2013 8,827 years 42,000 2023 42,000 ---------------------------------------------------------------------------- 9 7 years April VALOR Evergreen 2013 8,827 (i) 41,700 2020(i) 41,700 ---------------------------------------------------------------------------- 10 7 years April VALUE Evergreen 2013 8,827 (i) 41,700 2020(i) 41,700 ---------------------------------------------------------------------------- 11 7 years June VALIANT Evergreen 2013 8,827 (i) 41,700 2020(i) 41,700 ---------------------------------------------------------------------------- 12 7 years July VALENCE Evergreen 2013 8,827 (i) 41,700 2020(i) 41,700 ---------------------------------------------------------------------------- 13 7 years September VANTAGE Evergreen 2013 8,827 (i) 41,700 2020(i) 41,700 ---------------------------------------------------------------------------- 14 NAVARINO 1.0 February (ii) MSC 2010 8,531 year 2015 ---------------------------------------------------------------------------- 15 MAERSK A.P. KAWASAKI Moller- 10 December (iii) Maersk 1997 7,403 years 37,000 2017 37,000 ---------------------------------------------------------------------------- 16 A.P. MAERSK Moller- 10 December KURE(iii) Maersk 1996 7,403 years 37,000 2017 37,000 ---------------------------------------------------------------------------- 17 MAERSK A.P. KOKURA Moller- 10 February (iii) Maersk 1997 7,403 years 37,000 2018 37,000 ---------------------------------------------------------------------------- 18 MSC 10 September METHONI MSC 2003 6,724 years 29,000 2021 29,000 ---------------------------------------------------------------------------- 19 A.P. SEALAND Moller- 11 30,375 NEW YORK Maersk 2000 6,648 years (3) March 2018 26,387 ---------------------------------------------------------------------------- 20 A.P. MAERSK Moller- 11 38,179 KOBE Maersk 2000 6,648 years (4) May 2018 27,296 ---------------------------------------------------------------------------- 21 A.P. SEALAND Moller- 11 30,375 WASHINGTON Maersk 2000 6,648 years (5) June 2018 26,655 ---------------------------------------------------------------------------- 22 A.P. SEALAND Moller- 11 25,375 August MICHIGAN Maersk 2000 6,648 years (6) 2018 25,984 ---------------------------------------------------------------------------- 23 A.P. SEALAND Moller- 11 30,375 October ILLINOIS Maersk 2000 6,648 years (7) 2018 26,877 ---------------------------------------------------------------------------- 24 A.P. MAERSK Moller- 11 38,865 November KOLKATA Maersk 2003 6,644 years (8) 2019 30,290 ---------------------------------------------------------------------------- 25 A.P. MAERSK Moller- 11 38,461 February KINGSTON Maersk 2003 6,644 years (9) 2020 30,671 ---------------------------------------------------------------------------- 26 A.P. MAERSK Moller- 11 38,418 KALAMATA Maersk 2003 6,644 years (10) April 2020 30,806 ---------------------------------------------------------------------------- 27 VENETIKO 1.0 (iv) PIL 2003 5,928 year 14,500 March 2014 14,500 ---------------------------------------------------------------------------- 28 ENSENADA Hapag 2.0 EXPRESS(*) Lloyd 2001 5,576 years 19,000 May 2015 19,000 ---------------------------------------------------------------------------- 29 MSC 5.3 November ROMANOS MSC 2003 5,050 years 28,000 2016 28,000 ---------------------------------------------------------------------------- 30 ZIM NEW 13 23,150 September 23,150 YORK ZIM(**) 2002 4,992 years (11) 2015 (11) ---------------------------------------------------------------------------- 31 ZIM 13 23,150 September 23,150 SHANGHAI ZIM(**) 2002 4,992 years (11) 2015 (11) ---------------------------------------------------------------------------- 32 ZIM 10 22,150 September 24,844 PIRAEUS(v) ZIM(**) 2004 4,992 years (12) 2015 (12) ---------------------------------------------------------------------------- 33 OAKLAND Hapag September EXPRESS Lloyd 2000 4,890 8 years 30,500 2016 30,500 ---------------------------------------------------------------------------- 34 HALIFAX Hapag October EXPRESS Lloyd 2000 4,890 8 years 30,500 2016 30,500 ---------------------------------------------------------------------------- 35 SINGAPORE Hapag EXPRESS Lloyd 2000 4,890 8 years 30,500 July 2016 30,500 ---------------------------------------------------------------------------- 36 MSC 7.8 August MANDRAKI MSC 1988 4,828 years 20,000 2017 20,000 ---------------------------------------------------------------------------- 37 MSC 8.2 September MYKONOS MSC 1988 4,828 years 20,000 2017 20,000 ---------------------------------------------------------------------------- 38 5.3 MSC ULSAN MSC 2002 4,132 years 16,500 March 2017 16,500 ---------------------------------------------------------------------------- 39 9.5 13,500 September MSC KYOTO MSC 1981 3,876 years (13) 2018 13,500 ---------------------------------------------------------------------------- 40 KORONI Evergreen 1998 3,842 2 years 11,500 April 2014 11,500 ---------------------------------------------------------------------------- 41 KYPARISSIA Evergreen 1998 3,842 2 years 11,500 May 2014 11,500 ---------------------------------------------------------------------------- 42 Sea 1.7 January KARMEN Consortium 1991 3,351 years 6,800 2014 6,800 ---------------------------------------------------------------------------- 43 1.8 February MARINA Evergreen 1992 3,351 years 7,000 2014 7,000 ---------------------------------------------------------------------------- 44 KONSTANTIN A 1992 3,351 ---------------------------------------------------------------------------- 45 Hapag August AKRITAS Lloyd 1987 3,152 4 years 12,500 2014 12,500 ---------------------------------------------------------------------------- 46 MSC 4.8 CHALLENGER MSC 1986 2,633 years 10,000 July 2015 10,000 ---------------------------------------------------------------------------- 47 1.5 February MESSINI Evergreen 1997 2,458 years 8,100 2014 8,100 ---------------------------------------------------------------------------- 48 MSC REUNION MSC (vi) 1992 2,024 6 years 11,500 June 2014 11,500 ---------------------------------------------------------------------------- 49 MSC NAMIBIA MSC 6.8 II(vi) 1991 2,023 years 11,500 July 2014 11,500 ---------------------------------------------------------------------------- 50 MSC SIERRA 5.7 II(vi) MSC 1991 2,023 years 11,500 June 2014 11,500 ---------------------------------------------------------------------------- 51 MSC January PYLOS(vi) MSC 1991 2,020 3 years 11,500 2014 11,500 ---------------------------------------------------------------------------- 52 X-PRESS Sea 2.0 7,650 PADMA(*) Consortium 1998 1,645 years (14) June 2015 8,023 ---------------------------------------------------------------------------- 53 1.0 PROSPER COSCO 1996 1,504 year 7,350 March 2014 7,350 ---------------------------------------------------------------------------- 54 3.7 ZAGORA MSC 1995 1,162 years 5,700 April 2015 5,700 ---------------------------------------------------------------------------- 55 PETALIDI 1.0 (*) CMA CGM 1994 1,162 years 6,300 June 2014 6,300 ---------------------------------------------------------------------------- 56 STADT 1.7 6,400 LUEBECK CMA CGM 2001 1.078 years (15) July 2014 6,400 ---------------------------------------------------------------------------- Newbuilds ---------------------------------------------------------------------------- Expected Delivery Vessel Name Shipyard Charterer (based on latest shipyard schedule) ---------------------------------------------------------------------------- 1 H1069A Jiangnan Changxing MSC March 2014 ---------------------------------------------------------------------------- 2 H1070A Jiangnan Changxing MSC April 2014 ---------------------------------------------------------------------------- 3 NCP0113(*) Hanjin Subic Bay 4th Quarter 2015 ---------------------------------------------------------------------------- 4 NCP0114(*) Hanjin Subic Bay 1st Quarter 2016 ---------------------------------------------------------------------------- 5 NCP0115(*) Hanjin Subic Bay 1st Quarter 2016 ---------------------------------------------------------------------------- 6 NCP0116(*) Hanjin Subic Bay 2nd Quarter 2016 ---------------------------------------------------------------------------- 7 S2121(*) Samsung Heavy Evergreen 2nd Quarter 2016 ---------------------------------------------------------------------------- 8 S2122(*) Samsung Heavy Evergreen 2nd Quarter 2016 ---------------------------------------------------------------------------- 9 S2123(*) Samsung Heavy Evergreen 3rd Quarter 2016 ---------------------------------------------------------------------------- 10 S2124(*) Samsung Heavy Evergreen 3rd Quarter 2016 ---------------------------------------------------------------------------- 11 S2125(*) Samsung Heavy Evergreen 3rd Quarter 2016 ---------------------------------------------------------------------------- Our newbuilds on order have capacities ranging from approximately 9,000 to 14,000 TEU, with an aggregate capacity in excess of 125,000 TEU. (1) Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts. (2) This average rate is calculated based on contracted charter rates for the days remaining between January 27, 2014 and the earliest expiration of each charter. Certain of our charter rates change until their earliest expiration dates, as indicated in the footnotes below. (3) This charter rate changes on May 8, 2014 to $26,100 per day until the earliest redelivery date. (4) This charter rate changes on June 30, 2014 to $26,100 per day until the earliest redelivery date. (5) This charter rate changes on August 24, 2014 to $26,100 per day until the earliest redelivery date. (6) This charter rate changes on October 20, 2014 to $26,100 per day until the earliest redelivery date. (7) This charter rate changes on December 4, 2014 to $26,100 per day until the earliest redelivery date. (8) This charter rate changes on January 13, 2016 to $26,100 per day until the earliest redelivery date. (9) This charter rate changes on April 28, 2016 to $26,100 per day until the earliest redelivery date. (10) This charter rate changes on June 11, 2016 to $26,100 per day until the earliest redelivery date. (11) We agreed to defer payment of 30% of the daily charter rate under our charter agreements until December 31, 2013 , which the charterer is required to pay to us no later than July 2015 . The charterer has the option to terminate the charter by giving six months' notice, in which case they will have to make a one-time payment which shall be the $6.9 million reduced proportionately by the amount of time by which the original 3-year extension period is shortened. Although this deferral agreement expired as of December 31, 2013 , we have continued negotiations with the charterer regarding a restructuring of the charter. See footnote (**) below. (12) This charter rate changes on May 9, 2014 to $15,000 per day until the earliest redelivery date. We agreed to defer payment of 17.5% of the daily charter rate under our charter agreements until December 31, 2013 , which the charterer is required to pay to us no later than July 2015 . The charterer is required to pay approximately $5.0 million no later than July 2016 , representing accrued charter hire, the payment of which was deferred during the period July 2009 to December 2012 . Although this deferral agreement expired as of December 31, 2013 , we have continued negotiations with the charterer regarding a restructuring of the charter. See footnote (**) below. (13) 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. (14) This charter rate changes on July 27, 2014 to $8,225 per day until the earliest redelivery date. (15) The charterer has a unilateral option to extend the charter of the vessel for a period of six months at a rate of $8,500 per day. (i) Assumes exercise of Owners unilateral options to extend the charter of these vessels for two one year periods. (ii) The vessel is expected to be delivered to its Charterers on March 3, 2014 . (iii) The charterer has a unilateral option to extend the charter of the vessel for two periods of 30 months each +/-90 days on the final period performed, at a rate of $41,700 per day. (iv) The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months at a rate of $28,000 per day. (v) The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months +/-60 days at a rate of $27,500 per day. (vi) Owners have a unilateral option to extend the charters of the vessels for an additional period of two years at market rate, to be defined annually, based on the closest category on the Contex index. (*) Denotes vessels acquired pursuant to the Framework Agreement with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities. (**) ZIM is engaged in ongoing discussions with its creditors, including vessel and container lenders, shipowners, shipyards, unsecured lenders and bond holders, to restructure its debt and charter obligations. Costamare is participating in discussions with ZIM regarding concessions or modification to the existing charter arrangements with ZIM. COSTAMARE INC. Consolidated Statements of Income Three-months ended Year ended December 31, December 31, -------------------------- -------------------------- (Expressed in thousands of U.S. dollars, except share and per share amounts) 2012 2013 2012 2013 ------------ ------------ ------------ ------------ REVENUES: Voyage revenue $ 386,155 $ 414,249 $ 95,193 $ 112,549 EXPENSES: Voyage expenses (5,533) (3,484) (1,543) (964) Voyage expenses - related parties (2,873) (3,139) (712) (856) Vessels' operating expenses (112,462) (115,998) (27,762) (30,094) General and administrative expenses (4,045) (8,517) (959) (5,234) Management fees - related parties (15,171) (16,580) (3,753) (4,277) Amortization of dry- docking and special survey costs (8,179) (8,084) (2,162) (1,949) Depreciation (80,333) (89,958) (20,151) (24,800) Gain/ (Loss) on sale/disposals of vessels (2,796) 518 1,500 - Foreign exchange gains (losses) 110 8 (57) (110) ------------ ------------ ------------ ------------ Operating income $ 154,873 $ 169,015 $ 39,594 $ 44,265 ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSES): Interest income $ 1,495 $ 543 $ 322 $ 95 Interest and finance costs (74,734) (74,533) (16,894) (17,610) Equity gain on investments - 692 - 397 Other (43) 822 50 (22) Gain/ (Loss) on derivative instruments (462) 6,548 (141) (273) ------------ ------------ ------------ ------------ Total other income (expenses) $ (73,744) $ (65,928) $ (16,663) $ (17,413) ------------ ------------ ------------ ------------ Net Income $ 81,129 $ 103,087 $ 22,931 $ 26,852 ============ ============ ============ ============ Distributed earnings allocated to Preferred Stock - (1,536) - (951) ------------ ------------ ------------ ------------ Net Income available to common stockholders $ 81,129 $ 101,551 $ 22,931 $ 25,901 ============ ============ ============ ============ Earnings per common share, basic and diluted $ 1.20 $ 1.36 $ 0.31 $ 0.35 ============ ============ ============ ============ Weighted average number of shares, basic and diluted 67,612,842 74,800,000 73,658,696 74,800,000 ============ ============ ============ ============ COSTAMARE INC. Consolidated Balance Sheets As of As of December 31, December 31, ------------- ------------- (Expressed in thousands of U.S. dollars) 2012 2013 ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 267,321 $ 93,379 Restricted cash 5,330 9,067 Accounts receivable 2,237 16,145 Inventories 9,398 11,005 Due from related parties 2,616 2,679 Fair value of derivatives 165 - Insurance claims receivable 1,454 1,429 Accrued charter revenue 5,100 409 Prepayments and other 1,862 2,450 Vessels held for sale 4,441 - ------------- ------------- Total current assets $ 299,924 $ 136,563 ------------- ------------- FIXED ASSETS, NET: Advances for vessels acquisitions $ 339,552 $ 240,871 Vessels, net 1,582,345 2,187,388 ------------- ------------- Total fixed assets, net $ 1,921,897 $ 2,428,259 ------------- ------------- NON-CURRENT ASSETS: Investment in affiliates $ - $ 23,732 Deferred charges, net 34,099 29,864 Accounts receivable, non current - 7,334 Restricted cash 41,992 49,826 Accrued charter revenue 13,422 10,264 ------------- ------------- Total assets $ 2,311,334 $ 2,685,842 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 162,169 $ 206,717 Accounts payable 5,882 5,814 Accrued liabilities 9,292 14,386 Unearned revenue 5,595 9,601 Fair value of derivatives 55,701 55,322 Other current liabilities 10,772 3,140 ------------- ------------- Total current liabilities $ 249,411 $ 294,980 ------------- ------------- NON-CURRENT LIABILITIES Long-term debt, net of current portion $ 1,399,720 $ 1,660,859 Fair value of derivatives, net of current portion 125,110 47,890 Unearned revenue, net of current portion 16,641 25,164 ------------- ------------- Total non-current liabilities $ 1,541,471 $ 1,733,913 ------------- ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock $ 8 $ 8 Additional paid-in capital 714,100 762,142 Accumulated deficit (40,814) (20,047) Accumulated other comprehensive loss (152,842) (85,154) ------------- ------------- Total stockholders' equity $ 520,452 $ 656,949 ============= ============= Total liabilities and stockholders' equity $ 2,311,334 $ 2,685,842 ============= ============= Contacts: Company Contact: Gregory Zikos Chief Financial Officer Konstantinos Tsakalidis Business Development Costamare Inc. Athens, Greece Tel: (+30) 210-949-0050 Email: Email Contact Investor Relations Advisor/ Media Contact: Gus Okwu Allison+Partners New York Telephone: (+1) 646-428-0638 Source: Costamare Inc.


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