UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2020

Commission File Number: 001-34934

Costamare Inc.
(Translation of registrant's name into English)

7 rue du Gabian, MC 98000 Monaco
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ X ]      Form 40-F [   ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):


INCORPORATION BY REFERENCE

Exhibit 99.2 to this Report on Form 6-K shall be incorporated by reference into our registration statements on Form F-3, as filed with the U.S. Securities and Exchange Commission on July 6, 2016 (File No. 333-212415), March 2, 2018 (File No. 333-223392) and December 19, 2018 (File No. 333-228457), to the extent not superseded by information subsequently filed or furnished (to the extent we expressly state that we incorporate such furnished information by reference) by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

EXHIBIT INDEX

99.1         Press Release, dated January 28, 2020: Costamare Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2019
99.2   Financial Report for the Fourth Quarter and Year Ended December 31, 2019


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

        Costamare Inc.    
    (Registrant)
     
   
Date: January 28, 2020       /s/ Gregory G. Zikos    
    Gregory G. Zikos
    Chief Financial Officer
   
EdgarFiling

EXHIBIT 99.1

Costamare Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2019

MONACO, Jan. 28, 2020 (GLOBE NEWSWIRE) -- Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the fourth quarter and year ended December 31, 2019.

(1) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share 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.  Fleet Renewal

  1. Vessel Acquisitions

      II.  Vessel Disposals

B.  New Financing Agreements

C.  Dividend announcements

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

“During the fourth quarter and the year, net income and earnings per share increased substantially boosted by higher charter rates and the addition of new ships.

As part of our fleet renewal program, we acquired four panamax vessels with an average age of about 11 years during the quarter and disposed of an equal number of ships with an average age of 27 years.

During the year larger vessels enjoyed a rising charter market and today there is limited supply available in the post -panamax sizes. 

We have 18 post -panamax ships coming off charter over the next twelve months, which positions us favorably, should market momentum continue.”

 
Financial Summary
 
      Year ended December 31,
  Three-month period ended
December 31,
(Expressed in thousands of U.S. dollars, except share and per share data):     2018       2019     2018
    2019
                               
                               
Voyage revenue   $ 380,397     $ 478,109     $ 106,153     $ 124,468
Accrued charter revenue (1)   $ (7,294 )   $ 3,893     $ (2,263 )   $ 4,008
Amortization of Time-charter assumed   $ 26     $ 191     $ 26     $ 48
Voyage revenue adjusted on a cash basis (2)   $ 373,129     $ 482,193     $ 103,916     $ 128,524
                               
Adjusted Net Income available to common stockholders (3)   $ 46,857     $ 105,082     $ 13,259     $ 38,382
Weighted Average number of shares     110,395,134       115,747,452       111,951,107       118,724,718
Adjusted Earnings per share (3)   $ 0.42     $ 0.91     $ 0.12     $ 0.32
                               
Net Income   $ 67,239     $ 98,999     $ 19,732     $ 35,887
Net Income available to common stockholders   $ 36,736     $ 67,730     $ 11,915     $ 28,070
Weighted Average number of shares     110,395,134       115,747,452       111,951,107       118,724,718
Earnings per share   $ 0.33     $ 0.59     $ 0.11     $ 0.24

(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” in Exhibit 99.2.
(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-month periods and years ended December 31, 2019 and 2018. 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

    Year ended December 31,   Three-month period ended
December 31,
(Expressed in thousands of U.S. dollars, except share and per share data)   2018     2019     2018     2019  
                         
Net Income $ 67,239   $ 98,999   $ 19,732   $ 35,887  
Earnings allocated to Preferred Stock   (30,503 )   (31,269 )   (7,817 )   (7,817 )
Net Income available to common stockholders   36,736     67,730     11,915     28,070  
Accrued charter revenue   (7,294 )   3,893     (2,263 )   4,008  
General and administrative expenses – non-cash component   3,755     3,879     657     1,426  
Non-recurring, non-cash write-off of loan deferred financing costs   -     1,253     -     126  
Amortization of prepaid lease rentals, net   8,150     -     2,055     -  
Amortization of Time charter assumed   26     191     26     48  
Realized loss on Euro/USD forward contracts (1)   97     553     -     186  
Vessels’ impairment loss   -     3,042     -     -  
Loss on sale / disposal of vessels   3,071     19,589     291     689  
Swaps’ breakage costs   1,234     16     -     -  
Non-recurring, voyage expenses, tank cleaning
costs in order to comply with the global sulphur
cap of 0.5% m/m in anticipation of the entry into
force on January 1, 2020 of the relevant MARPOL
Annex VI regulations
  -     1,524     -     1,524  
Loss on vessels held for sale   101     2,495     101     2,495  
Loss on sale / disposal of vessel by a jointly
owned company with York included in equity
gain on investments
  707     38     43     -  
Non-recurring, voyage expenses tank cleaning
costs in order to comply with the global sulphur
cap of 0.5% m/m in anticipation of the entry into
force on January 1, 2020 of the relevant MARPOL
Annex VI regulations incurred by jointly owned
companies with York
  -     92     -     92  
Non-recurring, non-cash write-off of loan deferred
financing costs by jointly owned companies with York
  -     136     -     136  
Loss on asset held for sale by a jointly owned
company with York included in equity gain on
investments
  112     -     112     -  
(Gain) / loss on derivative instruments, excluding
interest accrued and realized on non-hedging
derivative instruments (1)
  162     651     322     (418 )
Adjusted Net Income available to common stockholders $ 46,857   $ 105,082   $ 13,259   $ 38,382  
Adjusted Earnings per Share $ 0.42   $ 0.91   $ 0.12   $ 0.32  
Weighted average number of shares   110,395,134     115,747,452     111,951,107     118,724,718  

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock, but before non-cash “Accrued charter revenue” recorded under charters with escalating charter rates, realized loss on Euro/USD forward contracts, vessels’ impairment loss, loss on sale / disposal of vessels, swaps’ breakage costs, 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, (gain) / loss on asset held for sale by a jointly owned company with York included in equity gain on investments, non-cash general and administrative expenses and non-cash other items, non-recurring, voyage expenses, tank cleaning costs in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations, non-recurring, voyage expenses tank cleaning costs in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations incurred by jointly owned companies with York, non-recurring, non-cash write-off of loan deferred financing costs, non-recurring, non-cash write-off of loan deferred financing costs by jointly owned companies with York, amortization of prepaid lease rentals, net, 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.

EdgarFiling

EXHIBIT 99.2

Financial Report

Results of Operations

Three-month period ended December 31, 2019 compared to the three-month period ended December 31, 2018

During the three-month periods ended December 31, 2019 and 2018, we had an average of 59.2 and 59.8 vessels, respectively, in our fleet. In the three-month period ended December 31, 2019, we accepted delivery of the secondhand containerships Vulpecula, Volans, and Vela with an aggregate TEU capacity of 12,774 and we sold Sierra II, Reunion and Namibia II with an aggregate TEU capacity of 6,070. In the three-month period ended December 31, 2018, we acquired the 60% equity interest of York Capital Management in each of the 14,000 TEU container vessels Triton, Titan, Talos, Taurus and Theseus and as a result we obtained 100% of the equity interest in each of these five vessels. In the three-month period ended December 31, 2018, we sold the 3,842 TEU container vessel MSC Koroni. In the three-month periods ended December 31, 2019 and 2018, our fleet ownership days totaled 5,447 and 5,505 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 December 31,

          Percentage
 
except percentages)     2018       2019       Change     Change  
                           
Voyage revenue   $ 106.2     $ 124.5     $ 18.3     17.2 %
Voyage expenses     (1.0 )     (2.1 )     1.1     110.0 %
Voyage expenses – related parties     (0.9 )     (1.7 )     0.8     88.9 %
Vessels’ operating expenses     (30.3 )     (28.8 )     (1.5 )   (5.0 %)
General and administrative expenses     (1.3 )     (1.4 )     0.1     7.7 %
Management fees – related parties     (5.0 )     (5.2 )     0.2     4.0 %
General and administrative expenses - non-cash component     (0.7 )     (1.4 )     0.7     100.0 %
Amortization of dry-docking and special survey costs     (2.1 )     (2.2 )     0.1     4.8 %
Depreciation     (26.5 )     (28.4 )     1.9     7.2 %
Amortization of prepaid lease rentals, net     (2.1 )     -       (2.1 )   n.m.  
Loss on sale / disposal of vessels     (0.3 )     (0.7 )     0.4     133.3 %
Loss on vessels held for sale     (0.1 )     (2.5 )     2.4     n.m.  
Interest income     0.8       0.8       -     -  
Interest and finance costs     (19.7 )     (19.7 )     -     -  
Equity gain on investments     2.9       4.0       1.1     37.9 %
Other     0.1       0.3       0.2     n.m.  
Gain / (Loss) on derivative instruments     (0.3 )     0.4       0.7     n.m.  
Net Income   $ 19.7     $ 35.9              


                             
(Expressed in millions of U.S. dollars,
    Three-month period
ended December 31,

          Percentage
 
except percentages)     2018       2019     Change     Change  
Voyage revenue   $ 106.2     $ 124.5   $ 18.3     17.2 %
Accrued charter revenue     (2.3 )     4.0     6.3     n.m.  
Amortization of Time-charter assumed     -       -     -     -  
Voyage revenue adjusted on a cash basis (1)   $ 103.9     $ 128.5   $ 24.6     23.7 %


                 
Vessels’ operational data   Three-month period ended
December 31,

        Percentage
 
    2018   2019   Change     Change  
Average number of vessels   59.8   59.2   (0.6 )   (1.0 %)
Ownership days   5,505   5,447   (58 )   (1.1 %)
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” below for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue increased by 17.2%, or $18.3 million, to $124.5 million during the three-month period ended December 31, 2019, from $106.2 million during the three-month period ended December 31, 2018. The increase is mainly attributable to revenue earned by (i) five vessels acquired during the fourth quarter of 2018 and two vessels acquired during the fourth quarter of 2019 , (ii) increased charter rates for certain of our vessels during the fourth quarter of 2019 compared to the fourth quarter of 2018 and (iii) decreased off-hire days for certain of our vessels during the fourth quarter of 2019 compared to the fourth quarter of 2018, partly off-set by revenue not earned by five vessels sold during the year ended December 31, 2019. 

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 23.7%, or $24.6 million, to $128.5 million during the three-month period ended December 31, 2019, from $103.9 million during the three-month period ended December 31, 2018. Accrued charter revenue for the three-month periods ended December 31, 2019 was a positive amount of $4.0 million and for the three-month period ended December 31, 2018 was a negative amount of $2.3 million.

Voyage Expenses

Voyage expenses were $2.1 million and $1.0 million for the three-month periods ended December 31, 2019 and 2018, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions. Voyage expenses for the three month period ended December 31, 2019 include a cost of $1.5 million relating to our vessels’ tank cleaning in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations.

Voyage Expenses – related parties

Voyage expenses – related parties were $1.7 million and $0.9 million for the three-month periods ended December 31, 2019 and 2018, respectively. Voyage expenses – related parties represent (i) fees of 1.25%1 in the aggregate on voyage revenues charged by related managers and (ii) charter brokerage fees payable to a related charter brokerage company.

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 $28.8 million and $30.3 million during the three-month periods ended December 31, 2019 and 2018, respectively. Daily vessels’ operating expenses were $5,283 and $5,512 for the three-month periods ended December 31, 2019 and 2018, 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 $1.4 million and $1.3 million during the three-month periods ended December 31, 2019 and 2018, respectively, and both include $0.63 million paid to a related manager.

Management Fees – related parties

Management fees paid to our related managers were $5.2 million and $5.0 million during the three-month periods ended December 31, 2019 and 2018, respectively.

General and administrative expenses – non-cash component

General and administrative expenses – non-cash component for the three-month period ended December 31, 2019 amounted to $1.4 million, representing the value of the shares issued to a related manager on December 30, 2019. General and administrative expenses – non-cash component for the three-month period ended December 31, 2018, amounted to $0.7 million, representing the value of the shares issued to a related manager on December 31, 2018.

Amortization of dry-docking and special survey

Amortization of deferred dry-docking and special survey costs was $2.2 million and $2.1 million during the three-month periods ended December 31, 2019 and 2018, respectively. During the three-month period ended December 31, 2018, two vessels underwent and completed their special survey and two were in process of completing their special survey. During the three-month period ended December 31, 2019, no vessel underwent any special survey.

Depreciation

Depreciation expense for the three-month period ended December 31, 2019 and 2018 was $28.4 million and $26.5 million, respectively.

Amortization of Prepaid Lease Rentals, net

Amortization of prepaid lease rentals, net for the three-month periods ended December 31, 2019 and 2018 was nil and $2.1 million, respectively.

Loss on sale / disposal of vessels

During the three-month period ended December 31, 2019, we sold the vessels Sierra II, Reunion and Namibia II and we recorded a loss of $0.7 million, in aggregate. As at September 30, 2019, the vessels Reunion and Sierra II were classified as assets held for sale.  During the three-month period ended December 31, 2018, we sold the 3,842 TEU container vessel MSC Koroni and we recorded a loss of $0.3 million.

Loss on vessels held for sale

During the three-month period ended December 31, 2019, we recorded a loss on vessels held for sale of $2.5 million, representing the expected loss from the sale of two of our vessels during the next twelve-month period. During the three-month period ended December 31, 2018, we recorded a loss on vessel held for sale of $0.1 million, representing the expected loss from the sale of one of our vessels during the next twelve-month period.

Interest Income

Interest income amounted to $0.8 million and $0.8 million for each of the three-month periods ended December 31, 2019 and 2018.

Interest and Finance Costs

Interest and finance costs were $19.7 million for each of the three-month periods ended December 31, 2019 and 2018.

Equity Gain on Investments

During the three-month period ended December 31, 2019, we recorded an equity gain on investments of $4.0 million representing our share of the gain in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated (the “Framework Deed”), with York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”). Since November 12, 2018, we have held 100% of the equity interest in five previously jointly owned companies with York, and as of that date these five companies are consolidated in our consolidated financial statements. As of December 31, 2019, 13 companies are jointly-owned with York (of which, 10 companies currently own vessels). During the three-month period ended December 31, 2018, we recorded an equity gain on investments of $2.9 million also relating to investments under the Framework Deed.

Gain / (Loss) on Derivative Instruments

The fair value of our four interest rate derivative instruments which were outstanding as of December 31, 2019 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2019, the fair value of these four interest rate derivative instruments in aggregate amounted to a net asset of $0.4 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the three-month period ended December 31, 2019, a gain of $0.4 million has been included in OCI, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended December 31, 2019.

___________________________________
1 0.75% until June 30, 2019

Cash Flows

Three-month periods ended December 31, 2019 and 2018

Condensed cash flows   Three-month period ended
December 31,
(Expressed in millions of U.S. dollars)     2018       2019  
Net Cash Provided by Operating Activities   $ 35.0     $ 76.8  
Net Cash Provided by / (Used in) Investing Activities   $ 0.9     $ (17.8 )
Net Cash Used in Financing Activities   $ (24.2 )   $ (67.3 )

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended December 31, 2019, increased by $41.8 million to $76.8 million, from $35.0 million for the three-month period ended December 31, 2018. The increase is mainly attributable to the increased cash from operations of $24.6 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 $12.7 million, the decreased special survey costs of $3.9 million and the decreased payments for interest (including swap payments) of $0.2 million during the three-month period ended December 31, 2019 compared to the three-month period ended December 31, 2018.

Net Cash Provided by / (Used in) Investing Activities

Net cash used in investing activities was $17.8 million in the three-month period ended December 31, 2019, which mainly consisted of advance payments for upgrades for certain of our vessels, payments for the acquisition of three secondhand vessels, advance payment for the acquisition of one vessel, which was delivered in January 2020, dividend distributions we received from two entities jointly -owned with York pursuant to the Framework Deed and proceeds we received from the sale of three vessels.    

Net cash provided by investing activities was $0.9 million in the three-month period ended December 31, 2018, which mainly consisted of proceeds we received from the sale of one vessel, net payments for the acquisition of the 60% equity interest in five companies previously jointly owned with York pursuant to the Framework Deed and payments for capitalized expenses for certain of our vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $67.3 million in the three-month period ended December 31, 2019, which mainly consisted of (a) $52.6 million of payments relating to our debt financing agreements, (b) $7.0 million we paid for dividends to holders of our common stock for the third quarter of 2019 and (c) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), $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 $2.6 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 July 15, 2019 to October 14, 2019.

Net cash used in financing activities was $24.2 million in the three-month period ended December 31, 2018, which mainly consisted of (a) $9.0 million net payments relating to our debt financing agreements, (b) $6.6 million we paid for dividends to holders of our common stock for the third quarter of 2018 and (c) $1.0 million we paid for dividends to holders of our Series B Preferred Stock, $2.1 million we paid for dividends to holders of our Series C Preferred Stock, $2.2 million we paid for dividends to holders of our Series D Preferred Stock and $2.6 million we paid for dividends to holders of our Series E Preferred Stock for the period from July 15, 2018 to October 14, 2018.

Year ended December 31, 2019 compared to the year ended December 31, 2018

During the years ended December 31, 2019 and 2018, we had an average of 60.3 and 55.8 vessels, respectively, in our fleet. In the year ended December 31, 2019, we accepted delivery of the secondhand containerships Vulpecula, Volans and Vela with an aggregate TEU capacity of 12,774 and we sold the vessels Sierra II, Reunion, Namibia II, MSC Pylos and Piraeus with an aggregate TEU capacity of 13,082. In the year ended December 31, 2018, (i) we acquired the 60% equity interest of York Capital Management in each of the 14,000 TEU container vessels Triton, Titan, Talos, Taurus and Theseus and, as a result, we obtained 100% of the equity interest in each of these five vessels, (ii) we accepted delivery of the secondhand containerships Michigan, Trader, Megalopolis, Marathopolis, Maersk Kleven and Maersk Kotka with an aggregate capacity of 28,602 TEU and (iii) we sold the container vessels Itea and MSC Koroni with an aggregate capacity of 7,684 TEU. In the years ended December 31, 2019 and 2018, our fleet ownership days totaled 22,002 and 20,359 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,
  Year ended December 31,
        Percentage
 
except percentages)   2018    2019    Change     Change  
                         
                   
Voyage revenue $ 380.4   $ 478.1   $ 97.7     25.7 %
Voyage expenses   (5.8 )   (5.3 )   (0.5 )   (8.6 %)
Voyage expenses – related parties   (3.2 )   (5.3 )   2.1     65.6 %
Vessels’ operating expenses   (110.6 )   (116.1 )   5.5     5.0 %
General and administrative expenses   (5.4 )   (5.6 )   0.2     3.7 %
Management fees – related parties   (19.5 )   (21.3 )   1.8     9.2 %
General and administrative expenses - non-cash component   (3.8 )   (3.9 )   0.1     2.6 %
Amortization of dry-docking and special survey costs   (7.3 )   (8.9 )   1.6     21.9 %
Depreciation   (96.3 )   (113.5 )   17.2     17.9 %
Amortization of prepaid lease rentals, net   (8.2 )   -     (8.2 )   n.m.  
Loss on sale / disposal of vessels   (3.1 )   (19.6 )   16.5     n.m.  
Loss on vessels held for sale   (0.1 )   (2.5 )   2.4     n.m.  
Vessels’ impairment loss   -     (3.0 )   3.0     n.m.  
Foreign exchange losses   (0.1 )   -     (0.1 )   n.m.  
Interest income   3.5     3.3     (0.2 )   (5.7 %)
Interest and finance costs   (64.0 )   (89.0 )   25.0     39.1 %
Swaps’ breakage costs   (1.2 )   -     (1.2 )   n.m.  
Equity gain on investments   12.1     11.4     (0.7 )   (5.8 %)
Other   0.4     0.8     0.4     100.0 %
Loss on derivative instruments   (0.6 )   (0.6 )   -     -  
Net Income $ 67.2   $ 99.0        


(Expressed in millions of U.S. dollars,
    Year ended December 31,
          Percentage
 
except percentages)     2018      2019      Change     Change  
                             
Voyage revenue   $ 380.4     $ 478.1   $ 97.7     25.7 %
Accrued charter revenue     (7.3 )     3.9     11.2     n.m.  
Amortization of Time-charter assumed     -       0.2     0.2     n.m.  
Voyage revenue adjusted on a cash basis (1)   $ 373.1     $ 482.2   $ 109.1     29.2 %
                             
                             
      Year ended December 31,
          Percentage
 
Vessels’ operational data     2018     2019     Change     Change  
                             
Average number of vessels     55.8       60.3     4.5     8.1 %
Ownership days     20,359       22,002     1,643     8.1 %
Number of vessels under dry-docking     17       6     (11 )      

(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” below for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue increased by 25.7%, or $97.7 million, to $478.1 million during the year ended December 31, 2019, from $380.4 million during the year ended December 31, 2018. The increase is mainly attributable to revenue earned by (i) ten vessels acquired during the year ended December 31, 2018 and two vessels acquired during the fourth quarter of 2019, (ii) decreased off-hire days for certain of our vessels during the year ended December 31, 2019 compared to the year ended December 31, 2018 and (iii) increased charter rates for certain of our vessels during the year ended December 31, 2019, partly offset by revenue not earned by two vessels sold during 2018 and five vessels sold during 2019.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 29.2%, or $109.1 million, to $482.2 million during the year ended December 31, 2019, from $373.1 million during the year ended December 31, 2018. Accrued charter revenue for the year ended December 31, 2019 and 2018 was a positive amount of $3.9 million and a negative amount of $7.3 million, respectively.

Voyage Expenses

Voyage expenses were $5.3 million and $5.8 million for the years ended December 31, 2019 and 2018, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions. Voyage expenses for the year ended December 31, 2019, include a cost of $1.5 million relating to our vessels’ tank cleaning in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations.

Voyage Expenses – related parties

Voyage expenses – related parties were $5.3 million and $3.2 million for the years ended December 31, 2019 and 2018, respectively. Voyage expenses – related parties represent (i) fees of 1.25%2  in the aggregate on voyage revenues charged by related managers and (ii) charter brokerage fees payable to a related charter brokerage company.

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 $116.1 million and $110.6 million during the years ended December 31, 2019 and 2018, respectively. Daily vessels’ operating expenses were $5,277 and $5,431 for the years ended December 31, 2019 and 2018, respectively. Daily vessels’ 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 $5.6 million and $5.4 million during the years ended December 31, 2019 and 2018, respectively, and both include $2.5 million which is part of the annual fee paid to a related manager.

Management Fees – related parties

Management fees paid to our managers were $21.3 million and $19.5 million during the years ended December 31, 2019 and 2018, respectively.

General and administrative expenses – non-cash component

General and administrative expenses – non-cash component for the year ended December 31, 2019 amounted to $3.9 million representing the value of the shares issued to a related manager on March 29, 2019, June 28, 2019, September 30, 2019 and December 30, 2019. General and administrative expenses – non-cash component for the year ended December 31, 2018 amounted to $3.8 million representing the value of the shares issued to a related manager on March 30, 2018, June 29, 2018, September 28, 2018 and December 31, 2018.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $8.9 million and $7.3 million during the years ended December 31, 2019 and 2018, respectively. During the year December 31, 2019, six vessels underwent and completed their special survey. During the year ended December 31, 2018, 17 vessels underwent and completed their special survey.

Depreciation

Depreciation expense for the year ended December 31, 2019 and 2018, was $113.5 million and $96.3 million, respectively. The increase was partly attributable to the increased average number of vessels during the year ended December 31, 2019 compared to the year ended December 31, 2018.

Amortization of Prepaid Lease Rentals, net

Amortization of prepaid lease rentals, net for the years ended December 31, 2019 and 2018 was nil and $8.2 million, respectively.

Loss on sale / disposal of vessels

During the year ended December 31, 2019, we recorded an aggregate loss of $19.6 million from the sale of the container vessels Piraeus, MSC Pylos, Reunion, Sierra II and Namibia II. MSC Pylos was classified as asset held for sale as at December 31, 2018. During the year ended December 31, 2018, we recorded a loss of $2.2 million from the sale of the vessel MSC Koroni and $0.9 million from the sale of the vessel Itea, which was classified as Asset held for sale as at December 31, 2017.

Loss on vessels held for sale

During the year ended December 31, 2019, we recorded a loss on vessels held for sale of $2.5 million representing the expected loss from the sale of two of our vessels during the next twelve-month period. During the year ended December 31, 2018, we recorded a loss on vessel held for sale of $0.1 million, representing the expected loss from the sale of one of our vessels during the next twelve-month period.

Vessels’ impairment loss

During the year ended December 31, 2019, we recorded an impairment loss in relation to two of our vessels in the amount of $3.0 million, in the aggregate. During the year ended December 31, 2018, no impairment loss was recorded.

Interest Income

Interest income amounted to $3.3 million and $3.5 million for the years ended December 31, 2019 and 2018, respectively.

Interest and Finance Costs

Interest and finance costs were $89.0 million and $64.0 million during the years ended December 31, 2019 and 2018, respectively. The increase is mainly attributable to the increased average loan balance during the year ended December 31, 2019 compared to the year ended December 31, 2018.

Swaps Breakage Cost

During the year ended December 31, 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. During the year ended December 31, 2018, we terminated three interest rate derivative instruments that qualify for hedge accounting and we paid the counterparties breakage costs of $1.2 million.

Equity Gain on Investments

During the year ended December 31, 2019, we recorded an equity gain on investments of $11.4 million representing our share of the net gain in jointly-owned companies pursuant to the Framework Deed. Since November 12, 2018, we have held 100% of the equity interest in five previously jointly-owned companies with York, and as of that date these five companies are consolidated in our consolidated financial statements. As of December 31, 2019, 13 companies are jointly-owned with York (of which, 10 companies currently own vessels). During the year ended December 31, 2018, we recorded an equity gain on investments of $12.1 million also relating to investments under the Framework Deed.

Loss on Derivative Instruments

The fair value of our four interest rate derivative instruments which were outstanding as of December 31, 2019 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2019, the fair value of these four interest rate derivative instruments in aggregate amounted to a net asset of $0.4 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the year ended December 31, 2019, a net loss of $5.8 million has been included in OCI and a net loss of $0.7 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, 2019.

_________________________
2
 0.75% up to June 30, 2019

Cash Flows
Years ended December 31, 2019 and 2018

Condensed cash flows   Years ended December 31,
(Expressed in millions of U.S. dollars)     2018       2019  
Net Cash Provided by Operating Activities   $ 140.8     $ 250.4  
Net Cash Used in Investing Activities   $ (112.6 )   $ (8.9 )
Net Cash Used in Financing Activities   $ (80.5 )   $ (212.2 )

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the year ended December 31, 2019 increased by $109.6 million to $250.4 million, compared to $140.8 million for the year ended December 31, 2018. The increase is mainly attributable to the increased cash from operations of $109.1 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 $20.4 million and the decreased special survey costs of $12.3 million during the year ended December 31, 2019 compared to the year ended December 31, 2018, partly off-set by increased payments for interest (including swap payments) during the year of $19.3 million.
  
Net Cash Used in Investing Activities

Net cash used in investing activities was $8.9 million in the year ended December 31, 2019, which mainly consisted of advance payments for upgrades for certain of our vessels, payments for the acquisition of three secondhand vessels, advance payment for the acquisition of one vessel, which was delivered in January 2020, dividend distribution we received from 11 entities jointly -owned with York pursuant to the Framework Deed and proceeds we received from the sale of five vessels.

Net cash used in investing activities was $112.6 million in the year ended December 31, 2018, which mainly consisted of net payments relating to the acquisition of six secondhand vessels and five newbuild vessels, net payments for the acquisition of the 60% equity interest in five companies previously jointly owned with York pursuant to the Framework Deed, payments for capital injection into certain entities pursuant to the Framework Deed (net of dividend distributions we received) and proceeds we received from the sale of two vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $212.2 million in the year ended December 31, 2019, which mainly consisted of (a) $149.6 million of net payments relating to our debt financing agreements (including the prepayments following the sale of five container vessels during the year ended December 31, 2019), (b) $27.4 million we paid for dividends to holders of our common stock for the fourth quarter of 2018, the first quarter of 2019, the second quarter of 2019 and the third quarter of 2019 and (c) $3.8 million we paid for dividends to holders of our Series B Preferred Stock, $8.5 million we paid for dividends to holders of our Series C Preferred Stock, $8.8 million we paid for dividends to holders of our Series D Preferred Stock and $10.2 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, April 15, 2019 to July 14, 2019 and July 15, 2019 to October 14, 2019.

Net cash used in financing activities was $80.5 million in the year ended December 31, 2018, which mainly consisted of (a) $139.2 million net payments relating to our debt financing agreements, (b) $111.2 million net proceeds we received from our January 2018 public offering, of 4.6 million shares of our Series E Preferred Stock, net of underwriting discounts and expenses incurred in the offering, (c) $20.9 million we paid for dividends to holders of our common stock for the fourth quarter of 2017, the first quarter of 2018, the second quarter of 2018 and the third quarter of 2018 and (d) $3.8 million we paid for dividends to holders of our Series B Preferred Stock, $8.5 million we paid for dividends to holders of our Series C Preferred Stock, $8.8 million we paid for dividends to holders of our Series D Preferred Stock, for the periods from October 15, 2017 to January 14, 2018, January 15, 2018 to April 14, 2018, April 15, 2018 to July 14, 2018 and July 15, 2018 to October 14, 2018 and $7.2 million we paid for dividends to holders of our Series E Preferred Stock, for the period from January 30, 2018 to April 14, 2018, April 15, 2018 to July 14, 2018 and July 15, 2018 to October 14, 2018.

Liquidity and Unencumbered Vessels

Cash and cash equivalents

As of December 31, 2019, we had a total cash liquidity of $195.9 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of January 28, 2020, the following vessels were free of debt.

 
Unencumbered Vessels
 (Refer to fleet list for full details)
 
    Year   TEU
Vessel Name    Built   Capacity
ETOILE   2005   2,556
VOLANS   2010   4,258
VELA   2009   4,258
VULPECULA   2010   4,258
JPO VIRGO   2009   4,258
KOKURA   1997   7,403
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, January 29, 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 February 5, 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: 10138768.

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 76 containerships, with a total capacity of approximately 549,000 TEU, including five newbuild containerships currently under construction. Ten of our containerships have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, 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 Costamare Inc.’s most recent Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors”.

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 January 28, 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 CAPE AKRITAS(i) ZIM 2016 11,010 43,250 August 2020
7 CAPE TAINARO(i) ZIM 2017 11,010 39,500 March 2020
8 CAPE KORTIA(i) ZIM 2017 11,010 43,250 September 2020
9 CAPE SOUNIO(i) ZIM 2017 11,010 33,500 March 2020
10 CAPE ARTEMISIO(i) Hapag Lloyd 2017 11,010 32,500 (net) March 2020
11 COSCO GUANGZHOU COSCO 2006 9,469 28,900 April 2020
12 COSCO NINGBO COSCO 2006 9,469 28,900 April 2020
13 COSCO YANTIAN COSCO 2006 9,469 28,900 May 2020
14 COSCO BEIJING COSCO 2006 9,469 28,900 May 2020
15 COSCO HELLAS COSCO 2006 9,469 28,900 May 2020
16 MSC AZOV MSC 2014 9,403 43,000 December 2026(3)
17 MSC AMALFI MSC 2014 9,403 43,000 March 2027(3)
18 MSC AJACCIO MSC 2014 9,403 46,300 February 2027(4)
19 MSC ATHENS(ii) MSC 2013 8,827 42,000 January 2026(5)
20 MSC ATHOS(ii) MSC 2013 8,827 42,000 February 2026(5)
21 VALOR Evergreen/Hapag Lloyd 2013 8,827 41,700/34,500 April 2023(6)
22 VALUE Evergreen/Hapag Lloyd 2013 8,827 41,700/34,500 April 2023(6)
23 VALIANT Evergreen/Hapag Lloyd 2013 8,827 41,700/34,500 June 2023(6)
24 VALENCE Evergreen/Hapag Lloyd 2013 8,827 41,700/34,500 July 2023(6)
25 VANTAGE Evergreen/Hapag Lloyd 2013 8,827 41,700/34,500 September 2023(6)
26 NAVARINO Evergreen 2010 8,531 21,900 February 2020
27 MAERSK KLEVEN Maersk 1996 8,044 17,500 April 2021
28 MAERSK KOTKA Maersk 1996 8,044 17,500 April 2021
29 MAERSK KOWLOON Maersk 2005 7,471 16,000 June 2022
30 MAERSK KAWASAKI Maersk 1997 7,403 17,050 February 2020
31 KURE COSCO 1996 7,403 21,500 April 2020
32 KOKURA Maersk 1997 7,403 17,050 February 2020
33 MSC METHONI MSC 2003 6,724 29,000 September 2021
34 YORK - 2000 6,648 - Scheduled for Dry Dock
35 MAERSK KOBE Maersk 2000 6,648 17,000 April 2020
36 SEALAND WASHINGTON Maersk 2000 6,648 (*)  March 2022(7)
37 SEALAND MICHIGAN Maersk 2000 6,648 (*)  March 2022(7)
38 SEALAND ILLINOIS Maersk 2000 6,648 (*)  March 2022(7)
39 MAERSK KOLKATA Maersk 2003 6,644 (*)  March 2022(7)
40 MAERSK KINGSTON Maersk 2003 6,644 26,100 March 2022(8)
41 MAERSK KALAMATA Maersk 2003 6,644 26,100 March 2022(8)
42 VENETIKO Hapag Lloyd 2003 5,928 20,000 August 2020
43 ENSENADA (i) ONE 2001 5,576 21,000 May 2020
44 ZIM NEW YORK ZIM 2002 4,992 12,430 October 2020(9)
45 ZIM SHANGHAI ZIM 2002 4,992 12,430 October 2020(9)
46 LEONIDIO(ii) Maersk 2014 4,957 14,200 December 2024
47 KYPARISSIA(ii) Maersk 2014 4,957 14,200 November 2024
48 MEGALOPOLIS Maersk 2013 4,957 (*)  July 2025
49 MARATHOPOLIS Maersk 2013 4.957 (*)  July 2025
50 OAKLAND EXPRESS Hapag Lloyd 2000 4,890 13,750 January 2021
51 HALIFAX EXPRESS Hapag Lloyd 2000 4,890 10,000 October 2020
52 SINGAPORE EXPRESS Hapag Lloyd 2000 4,890 10,000 July 2020
53 VULPECULA - 2010 4,258 - -
54 VOLANS Maersk 2010 4,258 13,250 February 2020
55 JPO VIRGO CMA CGM 2009 4,258 13,850 March 2020
56 VELA Hapag Lloyd 2009 4,258 13,750 March 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 Evergreen 2004 2,586 (*)  March 2020
61 ETOILE - 2005 2,556 - Scheduled for Dry Dock
62 AREOPOLIS Evergreen 2000 2,474 (*)  March 2020
63 MONEMVASIA(i) Maersk 1998 2,472 9,250 November 2021
64 MESSINI Evergreen 1997 2,458 8,650 March 2020
65 NEAPOLIS - 2000 1,645 - Vessel scheduled to be sold
66 ARKADIA(i) Evergreen 2001 1,550 9,450 February 2020
67 PROSPER Evergreen 1996 1,504 7,100 February 2020
68 MICHIGAN MSC 2008 1,300 6,650 September 2020
69 TRADER - 2008 1,300 - -
70 ZAGORA MSC 1995 1,162 6,500 May 2020
71 LUEBECK MSC 2001 1,078 6,200 January 2021

Newbuilds

   

Vessel Name

 

Shipyard
 

Capacity
(TEU)
 

Charterer
Expected Delivery(10)
1 YZJ2015-2057 Jiangsu Yangzijiang
Shipbuilding Group
12,690 Yang Ming Q2 2020
2 YZJ2015-2058 Jiangsu Yangzijiang
Shipbuilding Group
12,690 Yang Ming Q3 2020
3 YZJ2015-2059 Jiangsu Yangzijiang
Shipbuilding Group
12,690 Yang Ming Q3 2020
4 YZJ2015-2060 Jiangsu Yangzijiang
Shipbuilding Group
12,690 Yang Ming Q2 2021
5 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) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $43,000 until the original earliest redelivery dates of the vessels (December 2, 2023-MSC Azov and March 16, 2024-MSC Amalfi). The charters will also be extended for 3 years.
(4) 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.
(5) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $42,000 until the original earliest redelivery dates of the vessels (January 29, 2023-MSC Athens and February 24, 2023-MSC Athos). The charters will also be extended for 3 years.
(6) Upon redelivery of each vessel from Evergreen between April 2020 and January 2021, each vessel will commence a 3 year charter with Hapag Lloyd at a daily rate of $34,500. Until then the daily charter rate of each vessel will be $41,700.
(7) The daily rate for Sealand Washington, Sealand Michigan, Sealand Illinois and Maersk Kolkata is a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.
(8) This charter rate will be earned by Maersk Kingston and Maersk Kalamata until February 28, 2020 and April 12, 2020, respectively. From the aforementioned dates until expiry of the charter, the daily rate for each vessel will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions.
(9) 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 2019, 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 fifth optional year has been determined at $12,430 per day.
(10) 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.
   


COSTAMARE INC.
Consolidated Statements of Income
 
      Year ended
December 31,
    Three-month period ended
December 31,
(Expressed in thousands of U.S. dollars,
except share and per share amounts)
    2018
  2019
  2018
  2019
                         
                         
REVENUES:                        
Voyage revenue   $ 380,397     $ 478,109     $ 106,153     $ 124,468  
                         
EXPENSES:                        
Voyage expenses     (5,847 )     (5,291 )     (953 )     (2,111 )
Voyage expenses – related parties     (3,201 )     (5,282 )     (861 )     (1,672 )
Vessels' operating expenses     (110,571 )     (116,101 )     (30,345 )     (28,779 )
General and administrative expenses     (5,408 )     (5,551 )     (1,328 )     (1,436 )
Management fees – related parties     (19,533 )     (21,319 )     (4,984 )     (5,155 )
General and administrative expenses – non-cash component     (3,755 )     (3,879 )     (657 )     (1,426 )
Amortization of dry-docking and special survey costs     (7,290 )     (8,948 )     (2,107 )     (2,211 )
Depreciation     (96,261 )     (113,462 )     (26,495 )     (28,381 )
Amortization of prepaid lease rentals, net     (8,150 )     -       (2,055 )     -  
Loss on sale / disposal of vessels     (3,071 )     (19,589 )     (291 )     (689 )
Loss on vessels held for sale     (101 )     (2,495 )     (101 )     (2,495 )
Vessels’ impairment loss     -       (3,042 )     -       -  
Foreign exchange gains / (losses)     (51 )     (27 )     (35 )     1  
Operating income   $ 117,158     $ 173,123     $ 35,941     $ 50,114  
                         
OTHER INCOME / (EXPENSES):                        
Interest income   $ 3,454     $ 3,349     $ 820     $ 837  
Interest and finance costs     (63,992 )     (89,007 )     (19,744 )     (19,665 )
Swaps’ breakage cost, net     (1,234 )     (16 )     -       -  
Equity gain on investments     12,051       11,369       2,937       3,960  
Other     350       784       119       223  
Gain / (Loss) on derivative instruments     (548 )     (603 )     (341 )     418  
Total other expenses   $ (49,919 )   $ (74,124 )   $ (16,209 )   $ (14,227 )
Net Income   $ 67,239     $ 98,999     $ 19,732     $ 35,887  
Earnings allocated to Preferred Stock     (30,503 )     (31,269 )     (7,817 )     (7,817 )
Net Income available to common stockholders   $ 36,736     $ 67,730     $ 11,915     $ 28,070  
                         
                         
Earnings per common share, basic and diluted   $ 0.33     $ 0.59     $ 0.11     $ 0.24  
Weighted average number of shares, basic and diluted     110,395,134       115,747,452       111,951,107       118,724,718  


 
COSTAMARE INC.
Consolidated Balance Sheets
 
    As of December 31,     As of December 31,
(Expressed in thousands of U.S. dollars)   2018     2019 
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents   $ 113,714   $ 148,928  
Restricted cash   5,600     6,912  
Accounts receivable   5,625     7,397  
Inventories   11,020     10,546  
Due from related parties   4,681     7,576  
Fair value of derivatives   3,514     748  
Insurance claims receivable   6,476     1,607  
Prepaid lease rentals   8,752     -  
Asset held for sale   4,838     4,908  
Time charter assumed   190     192  
Prepayments and other   6,358     8,430  
Total current assets $ 170,768   $ 197,244  
FIXED ASSETS, NET:          
Right-of-use assets $ 401,901   $ 188,429  
Vessels and advances, net   2,206,786     2,431,830  
Total fixed assets, net $ 2,608,687   $ 2,620,259  
NON-CURRENT ASSETS:          
Equity method investments $ 131,082   $ 111,681  
Prepaid lease rentals, non-current   34,167     -  
Deferred charges, net   26,250     21,983  
Accounts receivable, non-current   17,789     8,600  
Restricted cash   47,177     40,031  
Fair value of derivatives, non-current   3,727     605  
Time charter assumed, non-current   1,222     1,030  
Other non-current assets   9,942     10,525  
Total assets $ 3,050,811   $ 3,011,958  
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Current portion of long-term debt $ 149,162   $ 210,745  
Accounts payable   8,586     6,215  
Due to related parties   196     473  
Finance lease liabilities   34,299     16,810  
Accrued liabilities   17,624     19,417  
Unearned revenue   12,432     10,387  
Fair value of derivatives   -     397  
Other current liabilities   2,370     2,090  
Total current liabilities $ 224,669   $ 266,534  
NON-CURRENT LIABILITIES          
Long-term debt, net of current portion $ 1,159,244   $ 1,206,405  
Finance lease liabilities, net of current portion   305,033     119,925  
Fair value of derivatives, net of current portion   -     433  
Unearned revenue, net of current portion   4,741     7,933  
Total non-current liabilities $ 1,469,018   $ 1,334,696  
COMMITMENTS AND CONTINGENCIES          
STOCKHOLDERS’ EQUITY:          
Preferred stock $ -   $ -  
Common stock   11     12  
Additional paid-in capital   1,313,840     1,351,352  
Retained earnings   38,734     60,578  
Accumulated other comprehensive income / (loss)   4,539     (1,214 )
Total stockholders’ equity $ 1,357,124   $ 1,410,728  
Total liabilities and stockholders’ equity $ 3,050,811   $ 3,011,958  
             

 
Financial Summary
 
      Year ended December 31,
  Three-month period ended
December 31,
(Expressed in thousands of U.S. dollars, except share and per share data):     2018       2019     2018
    2019
                               
                               
Voyage revenue   $ 380,397     $ 478,109     $ 106,153     $ 124,468
Accrued charter revenue (1)   $ (7,294 )   $ 3,893     $ (2,263 )   $ 4,008
Amortization of Time-charter assumed   $ 26     $ 191     $ 26     $ 48
Voyage revenue adjusted on a cash basis (2)   $ 373,129     $ 482,193     $ 103,916     $ 128,524
                               
Adjusted Net Income available to common stockholders (3)   $ 46,857     $ 105,082     $ 13,259     $ 38,382
Weighted Average number of shares     110,395,134       115,747,452       111,951,107       118,724,718
Adjusted Earnings per share (3)   $ 0.42     $ 0.91     $ 0.12     $ 0.32
                               
Net Income   $ 67,239     $ 98,999     $ 19,732     $ 35,887
Net Income available to common stockholders   $ 36,736     $ 67,730     $ 11,915     $ 28,070
Weighted Average number of shares     110,395,134       115,747,452       111,951,107       118,724,718
Earnings per share   $ 0.33     $ 0.59     $ 0.11     $ 0.24

(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” above.
(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-month periods and years ended December 31, 2019 and 2018. 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.

Reconciliation of Net Income to Adjusted Net Income available to common stockholders and Adjusted Earnings per Share

    Year ended December 31,   Three-month period ended
December 31,
(Expressed in thousands of U.S. dollars, except share and per share data)   2018     2019     2018     2019  
                         
Net Income $ 67,239   $ 98,999   $ 19,732   $ 35,887  
Earnings allocated to Preferred Stock   (30,503 )   (31,269 )   (7,817 )   (7,817 )
Net Income available to common stockholders   36,736     67,730     11,915     28,070  
Accrued charter revenue   (7,294 )   3,893     (2,263 )   4,008  
General and administrative expenses – non-cash component   3,755     3,879     657     1,426  
Non-recurring, non-cash write-off of loan deferred financing costs   -     1,253     -     126  
Amortization of prepaid lease rentals, net   8,150     -     2,055     -  
Amortization of Time charter assumed   26     191     26     48  
Realized loss on Euro/USD forward contracts (1)   97     553     -     186  
Vessels’ impairment loss   -     3,042     -     -  
Loss on sale / disposal of vessels   3,071     19,589     291     689  
Swaps’ breakage costs   1,234     16     -     -  
Non-recurring, voyage expenses, tank cleaning
costs in order to comply with the global sulphur
cap of 0.5% m/m in anticipation of the entry into
force on January 1, 2020 of the relevant MARPOL
Annex VI regulations
  -     1,524     -     1,524  
Loss on vessels held for sale   101     2,495     101     2,495  
Loss on sale / disposal of vessel by a jointly
owned company with York included in equity
gain on investments
  707     38     43     -  
Non-recurring, voyage expenses tank cleaning
costs in order to comply with the global sulphur
cap of 0.5% m/m in anticipation of the entry into
force on January 1, 2020 of the relevant MARPOL
Annex VI regulations incurred by jointly owned
companies with York
  -     92     -     92  
Non-recurring, non-cash write-off of loan deferred
financing costs by jointly owned companies with York
  -     136     -     136  
Loss on asset held for sale by a jointly owned
company with York included in equity gain on
investments
  112     -     112     -  
(Gain) / loss on derivative instruments, excluding
interest accrued and realized on non-hedging
derivative instruments (1)
  162     651     322     (418 )
Adjusted Net Income available to common stockholders $ 46,857   $ 105,082   $ 13,259   $ 38,382  
Adjusted Earnings per Share $ 0.42   $ 0.91   $ 0.12   $ 0.32  
Weighted average number of shares   110,395,134     115,747,452     111,951,107     118,724,718  

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock, but before non-cash “Accrued charter revenue” recorded under charters with escalating charter rates, realized loss on Euro/USD forward contracts, vessels’ impairment loss, loss on sale / disposal of vessels, swaps’ breakage costs, 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, (gain) / loss on asset held for sale by a jointly owned company with York included in equity gain on investments, non-cash general and administrative expenses and non-cash other items, non-recurring, voyage expenses, tank cleaning costs in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations, non-recurring, voyage expenses tank cleaning costs in order to comply with the global sulphur cap of 0.5% m/m in anticipation of the entry into force on January 1, 2020 of the relevant MARPOL Annex VI regulations incurred by jointly owned companies with York, non-recurring, non-cash write-off of loan deferred financing costs, non-recurring, non-cash write-off of loan deferred financing costs by jointly owned companies with York, amortization of prepaid lease rentals, net, 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.