UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED December 31, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-34934
COSTAMARE INC.
(Exact name of Registrant as specified in its charter)
NOT APPLICABLE
(Translation of Registrant’s name into English)
Republic of The Marshall Islands
(Jurisdiction of incorporation or organization)
7 Rue du Gabian
MC 98000 Monaco
(Address of principal executive offices)
Anastassios Gabrielides, Secretary
7 rue du Gabian
MC 98000 Monaco
Telephone: +377 93 25 09 40 E-mail address: generalcounsel@costamare.com
(Name, Address, Telephone Number and E-mail Address of Company contact person)
SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Common Stock, $0.0001 par value per share | CMRE | New York Stock Exchange | ||
Preferred stock purchase rights | New York Stock Exchange | |||
Series B Preferred Shares, $0.0001 par value per share | CMRE.PRB | New York Stock Exchange | ||
Series C Preferred Shares, $0.0001 par value per share | CMRE.PRC | New York Stock Exchange | ||
Series D Preferred Shares, $0.0001 par value per share | CMRE.PRD | New York Stock Exchange | ||
Series E Preferred Stock, $0.0001 par value per share | CMRE.PRE | New York Stock Exchange |
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d) OF THE ACT: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
122,301,711 shares of Common Stock
1,970,649 Series B Preferred Stock, $0.0001 par value per share
3,973,135 Series C Preferred Stock, $0.0001 par value per share
3,986,542 Series D Preferred Stock, $0.0001 par value per share
4,574,100 Series E Preferred Stock, $0.0001 par value per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer ☒ | Non-accelerated filer ☐ |
Emerging growth company ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ ☐ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
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• | “Costamare”, the “Company”, “we”, “our”, “us” or similar terms when used in a historical context refer to Costamare Inc., or any one or more of its subsidiaries or their predecessors, or to such entities collectively, except that when such terms are used in this annual report in reference to the common stock, the 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”), the 8.50% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”), the 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (the “Series D Preferred Stock”) or the 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (the “Series E Preferred Stock” and, together with the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock, the “Preferred Stock”), they refer specifically to Costamare Inc.; |
• | currency amounts in this annual report are in U.S. dollars; and |
• | all data regarding our fleet and the terms of our charters is as of March 21, 2023. |
• | general market conditions and shipping industry trends, including charter rates, vessel values and the future supply of, and demand for, ocean-going containership and dry bulk shipping services; |
• | our continued ability to enter into time charters with existing and new customers, and to re-charter on favorable terms our vessels upon the expiry of existing charters; |
• | our future financial condition and liquidity, including our ability to make required payments under our credit facilities, and comply with our loan covenants; |
• | our ability to finance our capital expenditures, acquisitions and other corporate activities; |
• | risks related to our dry bulk operating platform, including uncertainty related to the introduction of a new line of business for the Company, the fact that the chartering-in and chartering-out of dry bulk vessels is inherently more volatile than traditional vessel ownership and risks associated with derivative instruments such as forward freight agreements and bunker hedging; |
• | risks related to our leasing business, including uncertainty related to the introduction of a new line of business for the Company, as well as exposure to new financial, counterparty and legal risks; |
• | our cooperation with our joint venture partners and any expected benefits and risks, including risks associated with the Company’s expansion into new lines of business in connection with any joint venture entities, arising from such joint venture arrangements; |
• | the effects of a possible worldwide economic slowdown; |
• | disruption of world trade due to rising protectionism or the breakdown of multilateral trade agreements; |
• | environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; |
• | business disruptions and economic uncertainty resulting from the continued outbreak of the COVID-19 virus (and variants that may emerge), including possible delays due to quarantine of vessels and crew caused by COVID-19 infection; |
• | business disruptions due to natural disasters or other disasters outside our control; |
• | fluctuations in interest rates and currencies, including the value of the U.S. dollar relative to other currencies, and the impact of the discontinuation of remaining London Interbank Offered Rate tenors for US Dollars, or “LIBOR,” after June 30, 2023 on any of our debt referencing LIBOR in the interest rate; |
• | technological advancements in the design, construction and operations of containerships and dry bulk vessels and opportunities for the profitable operations of our vessels; |
• | the financial health of our customers, our lenders and other counterparties, and their ability to perform their obligations; |
• | potential disruption of shipping routes due to accidents, political events, sanctions, piracy or acts by terrorists and armed conflicts; |
• | future, pending or recent acquisitions of vessels or other assets, the recent commencement of operations of our dry bulk platform, our business strategy, areas of possible expansion and expected capital spending or operating expenses, including the recent investment in a leasing business; |
• | expectations relating to dividend payments and our ability to make such payments; |
• | the availability of existing secondhand vessels or newbuild vessels to purchase, the time that it may take to construct and take delivery of new vessels or the useful lives of our vessels; |
• | the availability of key employees and crew, the length and number of off-hire days, dry-docking requirements, fuel and insurance costs; |
• | our anticipated general and administrative expenses, including our fees and expenses payable under our management and services agreements, as may be amended from time to time; |
• | our ability to leverage to our advantage our managers’ relationships and reputation within the international shipping industry; |
• | our ability to maintain long-term relationships with major liner companies; |
• | expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as requirements imposed by classification societies and standards demanded by our charterers; |
• | any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity breach; |
• | risks inherent in vessel operation, including perils of the sea, terrorism, piracy and discharge of pollutants; |
• | potential liability from current or future litigation; |
• | our business strategy and other plans and objectives for future operations; and |
• | other factors discussed in “Item 3. Key Information—D. Risk Factors” of this annual report. |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
• | Our profitability will be dependent on the level of charter rates in the international shipping industry, which depends on macroeconomic factors outside our control; |
• | The market value of our vessels can fluctuate substantially over time, and if these values are low at a time when we are attempting to dispose of a vessel, we could incur a loss; |
• | The international dry bulk industry is highly competitive, and we may be unable to compete successfully for charters with established companies or new entrants that may have greater resources and access to capital; |
• | The operation of dry bulk vessels has certain unique operational risks which could affect our earnings and cash flow; |
• | Our operating results are subject to seasonal fluctuations; |
• | We may be adversely impacted by disruptions in the global financial markets due to terrorist attacks, regional armed conflict, or geopolitical risk; and |
• | Decreases in the level of China’s export of goods and import of raw materials could have a material adverse impact on our charterers’ business, which could adversely impact our operations. |
• | Delay in, or cancelation of, the delivery of any secondhand vessels we may agree to acquire, or any future newbuild vessel orders, could adversely affect our earnings; |
• | Our revenues are heavily dependent on our charterers and other counterparties fulfilling their obligations under agreements with us; |
• | We may have difficulty properly managing our growth through acquisitions of new or secondhand vessels and we may not realize expected benefits from these acquisitions; |
• | Our managers may be unable to attract and retain qualified, skilled crews on our behalf necessary to operate our business or may pay rising crew and other vessel operating costs; |
• | Fuel price fluctuations may have an adverse effect on our cash flows, liquidity and our ability to pay dividends to our stockholders; |
• | We must make substantial capital expenditures to maintain the operating capacity of our fleet, and these amounts may increase as our fleet ages; |
• | We are subject to regulation and liability under environmental and operational safety laws that could require significant expenditures; |
• | The recently established dry bulk operating platform exposes us to new operational, counterparty and legal risks which could affect our earnings and cash flow; |
• | Declines in the value of our derivative instruments, such as forward freight agreements, could have an adverse effect on our future performance, results of operations, cash flows and financial position; |
• | The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates, foreign currencies, bunker prices and freight rates can result in reductions in our stockholders’ equity as well as reductions in our income; |
• | Our recent investment in the leasing business exposes us to new financial, counterparty and legal risks which could adversely affect our business, financial position, results of operations and cash flow; |
• | Our business depends upon certain members of our senior management who may not necessarily continue to work for us; |
• | Our chairman and chief executive officer has affiliations with our managers and others that could create conflicts of interest between us and our managers or other entities in which he has an interest; |
• | Our managers are privately held companies and there is little or no publicly available information about them; and |
• | Being active in multiple lines of business, including managing multiple fleets, requires management to allocate significant attention and resources, and failure to successfully or efficiently manage each line of business may harm our business and operating results. |
• | The price of our securities may be volatile and future sales of our equity securities could cause the market price of our securities to decline; |
• | Investors may view our having multiple lines of business, including ownership of multiple fleets, negatively, which may decrease the trading price of our securities; |
• | Holders of Preferred Stock have extremely limited voting rights; and |
• | Members of the Konstantakopoulos family are our principal existing stockholders and will effectively be able to control the outcome of matters on which our stockholders are entitled to vote; their interests may be different from yours. |
• | supply of and demand for energy resources, commodities, semi-finished and finished consumer and industrial products; |
• | changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products; |
• | the location of regional and global exploration, production and manufacturing facilities; |
• | the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products; |
• | the globalization of production and manufacturing; |
• | global and regional economic and political conditions, including armed conflicts, terrorist activities, sanctions, embargoes, strikes, tariffs and “trade wars”; |
• | economic slowdowns caused by public health events such as the continued COVID-19 outbreak; |
• | natural disasters and other disruptions in international trade; |
• | disruptions and developments in international trade; |
• | changes in seaborne and other transportation patterns, including the distance cargo products are transported by sea, competition with other modes of cargo transportation and trade patterns; |
• | environmental and other regulatory developments; |
• | currency exchange rates; and |
• | weather. |
• | the availability of financing; |
• | the price of steel and other raw materials; |
• | the number of newbuilding orders and deliveries, including slippage in deliveries; |
• | the cost of newbuildings and the time it takes to construct a newbuild; |
• | the number of shipyards and ability of shipyards to deliver vessels; |
• | port and canal congestion; |
• | scrap prices and the time it takes to scrap a vessel; |
• | speed of vessel operation; |
• | costs of bunkers and other operating costs; |
• | vessel casualties; |
• | the efficiency and age profile of the existing containership and dry bulk fleet in the market; |
• | the number of vessels that are out of service, namely those that are laid-up, dry-docked, awaiting repairs or otherwise not available for hire; |
• | the economics of slow steaming; |
• | government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations; and |
• | sanctions (in particular, sanctions on Iran, Russia and Venezuela, amongst others). |
• | marine disaster; |
• | piracy; |
• | environmental accidents; |
• | grounding, fire, explosions and collisions; |
• | cargo and property loss or damage; |
• | business interruptions caused by mechanical failure, human error, war, terrorism, disease and quarantine, political action in various countries or adverse weather conditions; and |
• | work stoppages or other labor problems with crew members serving on our vessels, some of whom are unionized and covered by collective bargaining agreements. |
• | prevailing economic conditions in the markets in which our vessels operate; |
• | reduced demand for containerships or dry bulk vessels, including as a result of a substantial or extended decline in world trade; |
• | increases in the supply of vessel capacity; |
• | changes in prevailing charter hire rates; |
• | the physical condition, size, age and technical specification of the ships; |
• | the costs of building new vessels; |
• | changes in technology which can render older vessels obsolete; |
• | the relative environmental efficiency of the vessel, as compared to others in the markets in which our vessels operate; |
• | whether the vessel is equipped with an exhaust gas scrubber or not; and |
• | the cost of retrofitting or modifying existing ships to respond to technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise. |
• | quality or engineering problems; |
• | breach of contract by, or disputes with, our counterparties; |
• | changes in governmental regulations or maritime self-regulatory organization standards; |
• | work stoppages or other labor disturbances at the shipyard; |
• | bankruptcy of or other financial crisis involving the shipyard or other seller; |
• | a backlog of orders at the shipyard; |
• | sanctions imposed on the seller, the shipyard, or the vessel; |
• | political, social or economic disturbances; |
• | weather interference or a catastrophic event, such as a major earthquake or fire, or other accident; |
• | disruptions due to the outbreak of COVID-19; |
• | requests for changes to the original vessel specifications; |
• | shortages of or delays in the receipt of necessary construction materials, such as steel; |
• | an inability to obtain requisite permits or approvals; |
• | financial instability of the lenders under our committed credit facilities, resulting in potential delay or inability to draw down on such facilities; and |
• | financial instability of the charterers under our agreed time charters for the newbuild vessels, resulting in potential delay or inability to charter the newbuild vessels. |
• | the operations of the shipyards that build any newbuild vessels we may order; |
• | the availability of employment for our vessels; |
• | locating and identifying suitable secondhand vessels; |
• | obtaining newbuild or secondhand contracts at acceptable prices; |
• | obtaining required financing on acceptable terms; |
• | consummating vessel acquisitions; |
• | enlarging our customer base; |
• | hiring additional shore-based employees and seafarers; |
• | continuing to meet technical and safety performance standards; and |
• | managing joint ventures or significant acquisitions and integrating the new ships into our fleet. |
• | fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements; |
• | be unable (through our managers) to hire, train or retain qualified shore-based and seafaring personnel to manage and operate our growing business and fleet; |
• | decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions; |
• | significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions; |
• | incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired; or |
• | incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges. |
• | global and regional economic and political conditions; |
• | supply and demand for energy resources, commodities, semi-finished and finished consumer and industrial products; |
• | developments in international trade; |
• | changes in seaborne and other transportation patterns, including changes in the distances that cargoes are transported; |
• | environmental concerns and regulations; |
• | weather; |
• | the number of newbuilding deliveries; |
• | the improved fuel efficiency of newer vessels; and |
• | the recycling rate of older vessels. |
• | pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends; |
• | purchase or otherwise acquire for value any shares of our subsidiaries’ capital; |
• | make or repay loans or advances, other than repayment of the credit facilities; |
• | make investments in or provide guarantees to other persons; |
• | sell or transfer significant assets, including any vessel or vessels mortgaged under the credit facilities, to any person, including Costamare Inc. and our subsidiaries; |
• | create liens on assets; or |
• | allow the Konstantakopoulos family’s direct or indirect holding in Costamare Inc. to fall below 30% of the total issued and outstanding share capital. |
• | the ratio of our total liabilities (after deducting all cash and cash equivalents) to market value adjusted total assets (after deducting all cash and cash equivalents) may not exceed 0.75:1; |
• | the ratio of EBITDA over net interest expense must be equal to or higher than 2.5:1, however such covenant should not be considered breached unless the Company’s liquidity is less than 5% of the total debt or market value adjusted net worth is less than $600 million; |
• | the aggregate amount of all cash and cash equivalents may not be less than the greater of (i) $30 million or (ii) 3% of the total debt; and |
• | the market value adjusted net worth must at all times exceed $500 million. |
• | our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms; |
• | we may need to use a substantial portion of our cash from operations to make principal and interest payments on our debt, thereby reducing the funds that would otherwise be available for operations, future business opportunities and dividends to our stockholders; |
• | our debt level could make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and |
• | our debt level may limit our flexibility in responding to changing business and economic conditions. |
• | renew existing charters upon their expiration; |
• | obtain new charters; |
• | successfully enter into sale and purchase transactions and interact with shipyards; |
• | obtain financing and other contractual arrangements with third parties on commercially acceptable terms (therefore potentially increasing operating expenditure for the fleet); |
• | maintain satisfactory relationships with our charterers and suppliers; |
• | operate our fleet efficiently; or |
• | successfully execute our business strategies. |
• | actual or anticipated fluctuations in quarterly and annual results; |
• | fluctuations in the seaborne transportation industry, including fluctuations in the containership and dry bulk markets; |
• | our payment of dividends; |
• | mergers and strategic alliances in the shipping industry; |
• | changes in governmental regulations or maritime self-regulatory organization standards; |
• | shortfalls in our operating results from levels forecasted by securities analysts; |
• | announcements concerning us or our competitors; |
• | general economic conditions; |
• | terrorist acts; |
• | future sales of our stock or other securities; |
• | investors’ perceptions of us and the international shipping industry; |
• | the general state of the securities markets; and |
• | other developments affecting us, our industry or our competitors. |
• | our existing stockholders’ proportionate ownership interest in us will decrease; |
• | the dividend amount payable per share on our securities may be lower; |
• | the relative voting strength of each previously outstanding share may be diminished; and |
• | the market price of our securities may decline. |
• | the charter hire payments we obtain from our charters as well as our ability to charter or re-charter our vessels and the charter rates obtained; |
• | the due performance by our charterers of their obligations; |
• | our fleet expansion strategy and associated uses of our cash and our financing requirements; |
• | delays in the delivery of newbuild vessels and the beginning of payments under charters relating to those vessels; |
• | the level of our operating costs, such as the costs of crews, vessel maintenance, lubricants and insurance; |
• | the number of unscheduled off-hire days for our fleet and the timing of, and number of days required for, scheduled dry-docking of our vessels; |
• | disruptions related to the ongoing COVID-19 or future pandemics; |
• | prevailing global and regional economic and political conditions; |
• | changes in interest rates; |
• | currency exchange rate fluctuations; |
• | dry bulk freight rates and bunker prices; |
• | the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business; |
• | the requirements imposed by classification societies; |
• | the level of capital expenditures we make, including for maintaining or replacing vessels and complying with regulations; |
• | the level of capital requirements of our dry bulk operating platform and our leasing business; |
• | our debt service requirements, including fluctuations in interest rates, and restrictions on distributions contained in our debt instruments; |
• | fluctuations in our working capital needs; |
• | our ability to make, and the level of, working capital borrowings; |
• | changes in the basis of taxation of our activities in various jurisdictions; |
• | modification or revocation of our dividend policy by our board of directors; |
• | the ability of our subsidiaries to pay dividends and make distributions to us; |
• | the dividend policy adopted by Costamare Ventures and the Joint Venture entities (each as defined in “Item 4. Information on the Company—Business Overview—Our Fleet—Framework Deed”); and |
• | the amount of any cash reserves established by our board of directors. |
• | authorize our board of directors to issue “blank check” preferred stock without stockholder approval; |
• | provide for a classified board of directors with staggered, three-year terms; |
• | prohibit cumulative voting in the election of directors; |
• | authorize the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding stock entitled to vote for those directors; |
• | prohibit stockholder action by written consent unless the written consent is signed by all stockholders entitled to vote on the action; and |
• | establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
ITEM 4. | INFORMATION ON THE COMPANY |
Vessel Name | Charterer | Year Built | Capacity (TEU) | Current Daily Charter Rate(1) (U.S. dollars) | Expiration of Charter(2) | |
1 | TRITON | Evergreen | 2016 | 14,424 | (*) | March 2026 |
2 | TITAN(ii) | Evergreen | 2016 | 14,424 | (*) | April 2026 |
3 | TALOS(ii) | Evergreen | 2016 | 14,424 | (*) | July 2026 |
4 | TAURUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
5 | THESEUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
6 | YM TRIUMPH(ii) | Yang Ming | 2020 | 12,690 | (*) | May 2030 |
7 | YM TRUTH(ii) | Yang Ming | 2020 | 12,690 | (*) | May 2030 |
8 | YM TOTALITY(ii) | Yang Ming | 2020 | 12,690 | (*) | July 2030 |
9 | YM TARGET(ii) | Yang Ming | 2021 | 12,690 | (*) | November 2030 |
10 | YM TIPTOP(ii) | Yang Ming | 2021 | 12,690 | (*) | March 2031 |
11 | CAPE AKRITAS | MSC | 2016 | 11,010 | 33,000 | August 2031 |
12 | CAPE TAINARO | MSC | 2017 | 11,010 | 33,000 | April 2031 |
13 | CAPE KORTIA | MSC | 2017 | 11,010 | 33,000 | August 2031 |
14 | CAPE SOUNIO | MSC | 2017 | 11,010 | 33,000 | April 2031 |
15 | CAPE ARTEMISIO | Hapag Lloyd / (*) | 2017 | 11,010 | 36,650 / (*) | March 2030(3) |
16 | ZIM SHANGHAI (ex. COSCO GUANGZHOU) | ZIM | 2006 | 9,469 | 72,700 | July 2025 |
17 | ZIM YANTIAN (ex. COSCO NINGBO) | ZIM | 2006 | 9,469 | 72,700 | June 2025 |
18 | YANTIAN | COSCO | 2006 | 9,469 | 39,600 | February 2024 |
19 | COSCO HELLAS | COSCO | 2006 | 9,469 | 39,600 | February 2024 |
20 | BEIJING | COSCO | 2006 | 9,469 | 39,600 | March 2024 |
21 | MSC AZOV | MSC | 2014 | 9,403 | 46,300 | December 2026(4) |
22 | MSC AMALFI | MSC | 2014 | 9,403 | 46,300 | March 2027(5) |
23 | MSC AJACCIO | MSC | 2014 | 9,403 | 46,300 | February 2027(6) |
24 | MSC ATHENS | MSC | 2013 | 8,827 | 35,300 | January 2026 |
25 | MSC ATHOS | MSC | 2013 | 8,827 | 35,300 | February 2026 |
26 | VALOR | Hapag Lloyd / (*) | 2013 | 8,827 | 32,400 / (*) | April 2030(7) |
27 | VALUE | Hapag Lloyd / (*) | 2013 | 8,827 | 32,400 / (*) | April 2030(8) |
28 | VALIANT | Hapag Lloyd / (*) | 2013 | 8,827 | 32,400 / (*) | June 2030(9) |
29 | VALENCE | Hapag Lloyd / (*) | 2013 | 8,827 | 32,400 / (*) | July 2030(10) |
30 | VANTAGE | Hapag Lloyd / (*) | 2013 | 8,827 | 32,400 / (*) | September 2030(11) |
31 | NAVARINO | MSC/ (*) | 2010 | 8,531 | 31,000 / (*) | March 2029(12) |
32 | MAERSK KLEVEN | Maersk/MSC | 1996 | 8,044 | 25,000/41,500 | June 2026(13) |
33 | MAERSK KOTKA | Maersk/MSC | 1996 | 8,044 | 25,000/41,500 | June 2026(13) |
34 | MAERSK KOWLOON | Maersk | 2005 | 7,471 | 18,500 | August 2025 |
35 | KURE | COSCO/MSC | 1996 | 7,403 | 31,000/41,500 | May 2026(14) |
36 | METHONI | Maersk | 2003 | 6,724 | 46,500 | August 2026 |
37 | PORTO CHELI | Maersk | 2001 | 6,712 | 30,075 | June 2026 |
38 | ZIM TAMPA | ZIM | 2000 | 6,648 | 45,000 | July 2025 |
39 | ZIM VIETNAM (ex. MAERSK KOLKATA) | ZIM | 2003 | 6,644 | 53,000 | October 2025 |
40 | ZIM AMERICA (ex. MAERSK KINGSTON) | ZIM | 2003 | 6,644 | 53,000 | October 2025 |
41 | ARIES | (*) | 2004 | 6,492 | 58,500 | March 2026 |
42 | ARGUS | (*)/ /(*) | 2004 | 6,492 | (*)/58,500 | April 2026(15) |
43 | PORTO KAGIO | Maersk | 2002 | 5,908 | 28,822 | June 2026 |
44 | GLEN CANYON | ZIM | 2006 | 5,642 | 62,500 | June 2025 |
45 | PORTO GERMENO | Maersk | 2002 | 5,570 | 28,822 | June 2026 |
46 | LEONIDIO | Maersk | 2014 | 4,957 | 14,200 | December 2024(16) |
47 | KYPARISSIA | Maersk | 2014 | 4,957 | 14,200 | November 2024(16) |
48 | MEGALOPOLIS | Maersk | 2013 | 4,957 | 13,500 | July 2025(17) |
49 | MARATHOPOLIS | Maersk | 2013 | 4,957 | 13,500 | July 2025(17) |
50 | OAKLAND | CMA CGM | 2000 | 4,890 | 21,000 | May 2023 |
51 | GIALOVA | ZIM | 2009 | 4,578 | 25,500 | April 2024 |
52 | DYROS | Maersk | 2008 | 4,578 | 22,750 | January 2024 |
53 | NORFOLK | Maersk | 2009 | 4,259 | 30,000 | May 2023 |
54 | VULPECULA | OOCL/ZIM | 2010 | 4,258 | 22,700/43,250 (on average) | April 2028(18) |
55 | VOLANS | ZIM | 2010 | 4,258 | 24,250 | April 2024 |
56 | VIRGO | Maersk | 2009 | 4,258 | 30,200 | February 2024 |
57 | VELA | OOCL/ZIM | 2009 | 4,258 | 22,700/43,250 (on average) | April 2028(19) |
58 | ANDROUSA | Maersk | 2010 | 4,256 | 22,750 | May 2023 |
59 | NEOKASTRO | CMA CGM | 2011 | 4,178 | 39,000 | February 2027 |
60 | ULSAN | Maersk | 2002 | 4,132 | 34,730 | January 2026 |
61 | POLAR ARGENTINA(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | October 2024(20) |
62 | POLAR BRASIL(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | January 2025(20) |
63 | LAKONIA | COSCO | 2004 | 2,586 | 26,500 | March 2025 |
64 | SCORPIUS | Hapag Lloyd | 2007 | 2,572 | 17,750 | June 2023 |
65 | ETOILE | (*)/(*) | 2005 | 2,556 | (*)/(*) | April 2026(21) |
66 | AREOPOLIS | COSCO | 2000 | 2,474 | 26,500 | April 2025 |
67 | MONEMVASIA(i) | CMA CGM | 1998 | 2,472 | 17,300 | May 2023 |
68 | ARKADIA(i) | Swire Shipping | 2001 | 1,550 | 14,250 | February 2024(22) |
69 | MICHIGAN | MSC / (*) | 2008 | 1,300 | 18,700 / (*) | October 2025(23) |
70 | TRADER | (*)/(*) | 2008 | 1,300 | (*)/(*) | October 2026(24) |
71 | LUEBECK | MSC / (*) | 2001 | 1,078 | 15,000 / (*) | April 2026(25) |
(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 (unless otherwise noted) could expire. |
(3) | Cape Artemisio is currently chartered to Hapag Lloyd at a daily rate of $36,650 until March 12, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(4) | This charter rate will be earned by MSC Azov until December 2, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300. |
(5) | This charter rate will be earned by MSC Amalfi until March 16, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300. |
(6) | This charter rate will be earned by MSC Ajaccio until February 1, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300. |
(7) | Valor is currently chartered to Hapag Lloyd at a daily rate of $32,400 until April 3, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(8) | Value is currently chartered to Hapag Lloyd at a daily rate of $32,400 until April 25, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(9) | Valiant is currently chartered to Hapag Lloyd at a daily rate of $32,400 until June 5, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(10) | Valence is currently chartered to Hapag Lloyd at a daily rate of $32,400 until July 3, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(11) | Vantage is currently chartered to Hapag Lloyd at a daily rate of $32,400 until September 8, 2025 at the earliest. Upon redelivery of the vessel from Hapag Lloyd the vessel will commence a new charter with a leading liner company for a period of 60 to 64 months at an undisclosed rate. |
(12) | Navarino is currently chartered to MSC at a daily rate of $31,000 until March 1, 2025 at the earliest. Upon redelivery of the vessel from MSC the vessel will commence a new charter with a leading liner company for a period of 48 to 52 months at an undisclosed rate. |
(13) | The current daily rate of each of Maersk Kleven and Maersk Kotka is a base rate of $17,000, adjusted pursuant to the terms of a 50:50 profit/loss sharing mechanism based on market conditions with a minimum charter rate of $12,000 and a maximum charter rate of $25,000. Upon redelivery of each vessel from Maersk between June 2023 and October 2023, each vessel will commence a new charter with MSC for a period of 36 to 38 months at a fixed daily rate of $41,500. |
(14) | Upon redelivery of Kure from COSCO between May 2023 and July 2023, the vessel will commence a new charter with MSC for a period of 36 to 38 months at a daily rate of $41,500. Until then the daily charter rate will be $31,000. |
(15) | Vessel’s daily charter rate will be $58,500 from April 2023. Until then the vessel is chartered at an undisclosed rate. |
(16) | Charterer has the option to extend the current time charter for an additional period of 12 to 24 months at a daily rate of $17,000. |
(17) | Charterer has the option to extend the current time charter for an additional period of approximately 24 months at a daily rate of $14,500. |
(18) | Vulpecula is currently chartered to OOCL at a daily rate of $22,700. Upon redelivery of the vessel from OOCL in April 2023 (earliest estimated redelivery date per charterparty terms) the vessel will commence a new charter with ZIM for a period of 60 to 64 months at a daily rate of $43,250, on average. The daily rate is $99,000 for the first 12 month period beginning February 2023, $91,250 for the second 12 month period, $10,000 for the third 12 month period and $8,000 for the remaining duration of the charter. |
(19) | Vela is currently chartered to OOCL at a daily rate of $22,700. Upon redelivery of the vessel from OOCL in April 2023 (charterers have tendered redelivery notice) the vessel will commence a new charter with ZIM for a period of 60 to 64 months at a daily rate of $43,250, on average. The daily rate will be $99,000 for the first 12 month period beginning January 2023, $91,250 for the second 12 month period, $10,000 for the third 12 month period and $8,000 for the remaining duration of the charter. |
(20) | Charterer has the option to extend the current time charter for three additional one-year periods at a daily rate of $21,000. |
(21) | Etoile is currently chartered at an undisclosed rate until April 2023 at the earliest. Upon redelivery of the vessel from its current charterer the vessel will commence a new charter with a leading liner company for a period of 36 to 39 months at an undisclosed rate. |
(22) | This charter rate will be earned by Arkadia from May 5, 2023. Until then the daily rate will be $21,500. |
(23) | Michigan is currently chartered to MSC at a daily rate of $18,700 until October 2023 at the earliest. Upon redelivery of the vessel from MSC the vessel will commence a new charter with a leading liner company for a period of 24 to 26 months at an undisclosed rate. |
(24) | Trader is currently chartered at an undisclosed rate until October 1, 2024 at the earliest. Upon redelivery of the vessel from its current charterer the vessel will commence a new charter with a leading liner company for a period of 24 to 26 months at an undisclosed rate. |
(25) | Luebeck is currently chartered to MSC at a daily rate of $15,000 until April 2024 at the earliest. Upon redelivery of the vessel from MSC the vessel will commence a new charter with a leading liner company for a period of 24 to 26 months at an undisclosed rate. |
(i) | Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest of 49% in each of the vessel-owning companies. |
(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. |
Vessel Name | Year Built | Capacity (DWT) | |
1 | AEOLIAN | 2012 | 83,478 |
2 | GRENETA | 2010 | 82,166 |
3 | HYDRUS | 2011 | 81,601 |
4 | PHOENIX | 2012 | 81,569 |
5 | BUILDER | 2012 | 81,541 |
6 | FARMER | 2012 | 81,541 |
7 | SAUVAN | 2010 | 79,700 |
8 | ROSE | 2008 | 76,619 |
9 | MERCHIA | 2015 | 63,800 |
10 | SEABIRD | 2016 | 63,553 |
11 | DAWN | 2018 | 63,530 |
12 | ORION | 2015 | 63,473 |
13 | DAMON | 2012 | 63,227 |
14 | TITAN I | 2009 | 58,090 |
15 | ERACLE | 2012 | 58,018 |
16 | PYTHIAS | 2010 | 58,018 |
17 | NORMA | 2010 | 58,018 |
18 | ORACLE | 2009 | 57,970 |
19 | CURACAO | 2011 | 57,937 |
20 | URUGUAY | 2011 | 57,937 |
21 | ATHENA | 2012 | 57,809 |
22 | SERENA | 2010 | 57,266 |
23 | LIBRA | 2010 | 56,729 |
24 | PEGASUS | 2011 | 56,726 |
25 | MERIDA | 2012 | 56,670 |
26 | CLARA | 2008 | 56,557 |
27 | PEACE | 2006 | 55,709 |
28 | PRIDE | 2006 | 55,705 |
29 | BERMONDI | 2009 | 55,469 |
30 | COMITY | 2010 | 37,302 |
31 | VERITY | 2012 | 37,163 |
32 | PARITY | 2012 | 37,152 |
33 | ACUITY | 2011 | 37,149 |
34 | EQUITY | 2013 | 37,071 |
35 | DISCOVERY | 2012 | 37,019 |
36 | TAIBO (i) | 2011 | 35,112 |
37 | BERNIS | 2011 | 34,627 |
38 | MANZANILLO | 2010 | 34,426 |
39 | ADVENTURE | 2011 | 33,755 |
40 | ALLIANCE | 2012 | 33,751 |
41 | CETUS | 2010 | 32,527 |
42 | PROGRESS | 2011 | 32,400 |
43 | MINER (i) | 2010 | 32,300 |
44 | KONSTANTINOS | 2012 | 32,178 |
45 | RESOURCE | 2010 | 31,776 |
(i) | Denotes vessel that we have agreed to sell. |
• | Costamare Shipping provided commercial and insurance services to all of our containerships and dry bulk vessels, including vessels acquired pursuant to the Framework Deed, as well as technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 25 of our containerships; |
• | V.Ships Greece provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 23 of our containerships, including two Joint Venture vessels, and 27 of our dry bulk vessels; |
• | V.Ships Shanghai provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 12 of our containerships including two Joint Venture vessels, and two of our dry bulk vessels; |
• | Vinnen provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to five of our containerships; |
• | HanseContor provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to six of our containerships; |
• | BSM provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to 10 of our dry bulk vessels; and |
• | FML provided technical, crewing, provisioning, bunkering, sale and purchase and accounting services to six of our dry bulk vessels. |
2023 | 2024 | 2025 | 2026 | 2027 | |||||
Number of Containerships | 17 | 11 | 14 | 18 | 9 | ||||
Number of Dry Bulk Vessels | 7 | 5 | 13 | 13 | 15 |
(1) | Excludes one dry bulk vessel that we have agreed to sell and two containerships (Maersk Kalamata and Sealand Washington, that were sold in January and February 2023, respectively) that have been classified as assets held for sale. |
• | natural resource damages and the costs of assessment thereof; |
• | real and personal property damage; |
• | net loss of taxes, royalties, rents, fees and other lost revenues; |
• | lost profits or impairment of earning capacity due to property or natural resource damages; and |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources. |
• | on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications; |
• | on-board installation of ship security alert systems; |
• | the development of ship security plans; and |
• | compliance with flag state security certification requirements. |
ITEM 4.A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 - 2032 | ||||||||||||||||||||||
No. of Vessels whose Charters Expire(1)(2) | 51 | 9 | 12 | 21 | 3 | 2 | 16 | |||||||||||||||||||||
No. of Containerships whose Charters Expire | 6 | 9 | 12 | 21 | 3 | 2 | 16 | |||||||||||||||||||||
No. of Dry Bulk Vessels whose Charters Expire(1)(2) | 45 | — | — | — | — | — | — | |||||||||||||||||||||
TEU of Expiring Containership Charters | 29,269 | 55,993 | 68,243 | 169,636 | 22,984 | 8,516 | 171,166 | |||||||||||||||||||||
DWT of Expiring Dry Bulk Vessel Charters | 2,436,134 | — | — | — | — | — | — | |||||||||||||||||||||
Contracted Days | 24,601 | 20,870 | 17,730 | 10,617 | 6,733 | 5,928 | 9,796 | |||||||||||||||||||||
Available Days | 16,369 | 20,121 | 23,515 | 29,650 | 33,052 | 33,966 | 145,294 | |||||||||||||||||||||
Contracted/Total Days | 60.0 | % | 50.9 | % | 43.0 | % | 26.4 | % | 16.9 | % | 14.9 | % | 6.3 | % | ||||||||||||||
Containership Contracted/Total Containership Days (TEU -adjusted)(3) | 96.8 | % | 87.8 | % | 79.3 | % | 54.2 | % | 37.4 | % | 35.2 | % | 16.0 | % | ||||||||||||||
Dry Bulk Vessel Contracted/Total Dry Bulk Vessel Days (dwt-adjusted)(4) | 8.1 | % | — | — | — | — | — | — |
(1) | Includes seven dry bulk vessels with no employment as at December 31, 2022. |
(2) | Total days are calculated on the assumption that the vessels will continue trading until the age of 30 years old for containerships and 25 years for dry bulk vessels, unless the containership will exceed 30 years of age or the dry bulk vessel will exceed 25 years of age at the expiry of its current time charter, in which case we assume that the vessel continues trading until that expiry date. Sealand Washington and Maersk Kalamata are classified as held for sale and therefore the available days are calculated up to February 14, 2023. |
(3) | Contracted Days coverage for containerships adjusted by TEU capacity. |
(4) | Contracted Days coverage for dry bulk vessels adjusted by dwt capacity. |
• | Number of Vessels in Our Fleet. The number of vessels in our fleet is a key factor in determining the level of our revenues. Aggregate expenses also increase as the size of our fleet increases. Vessel acquisitions and dispositions give rise to gains and losses and other one-time items. Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the ownership days each vessel was part of our fleet during the period divided by the number of calendar days in that period. As of March 21, 2023, our containership fleet amounted to a total of 71 vessels (including four vessels acquired by Joint Venture entities in which we hold a minority equity interest) and our dry bulk fleet amount to a total of 45 vessels (including two secondhand vessels that we have agreed to sell). |
• | Charter Rates. The charter rates we obtain for our vessels also drive our revenues. Charter rates are based primarily on demand and supply of vessel capacity at the time we enter into the charters for our vessels. Demand and supply can fluctuate significantly over time as a result of changing economic conditions affecting trade flow between ports and the industries which use our shipping services. Vessels operated under long-term charters are less susceptible to cyclical containership charter rates than vessels operated on shorter-term charters, such as spot charters. We are exposed to varying charter rate environments when our chartering arrangements expire and we seek to deploy our vessels under new charters. As illustrated in the table above under “—Overview”, we aim to reduce our exposure to any one particular rate environment and point in the shipping cycle on the containership sector by staggering the maturities of our vessels’ charters, while in the dry bulk sector we operate our vessels primarily on short term time charters, index-linked time charters, or voyage charters. See “—Voyage Revenue”. |
• | Utilization of Our Fleet. We calculate utilization of our fleet by dividing the number of days during which our vessels are employed less the aggregate number of days that our vessels are off-hire due to any reason other than due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys by the number of days during which our vessels are employed. We use fleet utilization to measure our vessels’ condition and efficiency in servicing our clients whilst employed. Historically, our fleet has had a limited number of unscheduled off-hire days during the period of employment. In 2020, 2021 and 2022 our fleet utilization for each year was 99.6%, 99.3% and 98.4%, respectively. More specifically, in 2022 our containerships fleet utilization rate was 99.3% and our dry bulk fleet utilization rate was 96.8%. If the utilization pattern of our fleet changes, our financial results would be affected. |
• | Expenses and Other Costs. Our ability to control our fixed and variable expenses is critical to our ability to maintain acceptable profit margins. These expenses include commission expenses, crew wages and related costs, the cost of insurance and vessel registry, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricating oil costs, tonnage taxes, regulatory fees, vessel scrubbers and Ballast Water Treatment System (“BWTS”) maintenance expenses and other miscellaneous expenses. In addition, factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages, are paid, can cause our vessel operating expenses to increase. We proactively manage our foreign currency exposure by entering into Euro/dollar forward contracts in an effort to minimize volatility in Euro denominated expenses. |
Year Ended December 31, | ||||||||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||||||||
(Expressed in thousands of U.S. dollars, except for share and per share data) | ||||||||||||||||||||
STATEMENT OF INCOME | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Voyage revenue | $ | 380,397 | $ | 478,109 | $ | 460,319 | $ | 793,639 | $ | 1,113,859 | ||||||||||
Expenses: | ||||||||||||||||||||
Voyage expenses | 5,847 | 5,291 | 7,372 | 13,311 | 49,069 | |||||||||||||||
Voyage expenses-related parties | 3,201 | 5,282 | 6,516 | 11,089 | 15,418 | |||||||||||||||
Vessels’ operating expenses | 110,571 | 116,101 | 117,054 | 179,981 | 269,231 | |||||||||||||||
General and administrative expenses | 5,408 | 5,551 | 7,360 | 9,405 | 12,440 | |||||||||||||||
General and administrative expenses-non-cash component | 3,755 | 3,879 | 3,655 | 7,414 | 7,089 | |||||||||||||||
Management and agency fees-related parties | 19,533 | 21,319 | 21,616 | 29,621 | 46,735 | |||||||||||||||
Amortization of dry-docking and special survey costs | 7,290 | 8,948 | 9,056 | 10,433 | 13,486 | |||||||||||||||
Depreciation | 96,261 | 113,462 | 108,700 | 136,958 | 165,998 | |||||||||||||||
Amortization of prepaid lease rentals | 8,150 | — | — | — | — | |||||||||||||||
(Gain) / loss on sale of vessels, net | 3,071 | 19,589 | 79,120 | (45,894 | ) | (126,336 | ) | |||||||||||||
Loss on vessel held for sale | 101 | 2,495 | 7,665 | — | — | |||||||||||||||
Vessels’ impairment loss | — | 3,042 | 31,577 | — | 1,691 | |||||||||||||||
Foreign exchange (gains) / losses, net | 51 | 27 | 300 | (29 | ) | (3,208 | ) | |||||||||||||
Operating income | $ | 117,158 | $ | 173,123 | $ | 60,328 | $ | 441,350 | $ | 662,246 | ||||||||||
Other Income / (expenses): | ||||||||||||||||||||
Interest income | $ | 3,454 | $ | 3,349 | $ | 1,827 | $ | 1,587 | $ | 5,956 | ||||||||||
Interest and finance costs | (63,992 | ) | (89,007 | ) | (68,702 | ) | (86,047 | ) | (122,233 | ) | ||||||||||
Swaps breakage cost | (1,234 | ) | (16 | ) | (6 | ) | — | — | ||||||||||||
Equity gain on investments | 12,051 | 11,369 | 16,195 | 12,859 | 2,296 | |||||||||||||||
Gain on sale of equity securities | — | — | — | 60,161 | — | |||||||||||||||
Dividend income from investment in equity securities | — | — | — | 1,833 | — | |||||||||||||||
Other, net | 350 | 784 | 1,181 | 4,624 | 3,729 | |||||||||||||||
Gain / (loss) on derivative instruments, net | (548 | ) | (603 | ) | (1,946 | ) | (1,246 | ) | 2,698 | |||||||||||
Total other expenses | $ | (49,919 | ) | $ | (74,124 | ) | $ | (51,451 | ) | $ | (6,229 | ) | $ | (107,554 | ) | |||||
Net Income | $ | 67,239 | $ | 98,999 | $ | 8,877 | $ | 435,121 | $ | 554,692 | ||||||||||
Earnings allocated to Preferred Stock | $ | (30,503 | ) | $ | (31,269 | ) | $ | (31,082 | ) | $ | (31,068 | ) | (31,068 | ) | ||||||
Gain on retirement of Preferred Stock | — | — | 619 | — | — | |||||||||||||||
Net loss attributable to the non-controlling interest | $ | — | — | — | — | 263 | ||||||||||||||
Net income / (loss) available to Common Stockholders | $ | 36,736 | $ | 67,730 | $ | (21,586 | ) | $ | 404,053 | $ | 523,887 | |||||||||
Earnings / (loss) per common share, basic and diluted | $ | 0.33 | $ | 0.59 | $ | (0.18 | ) | $ | 3.28 | $ | 4.26 | |||||||||
Weighted average number of shares, basic and diluted | 110,395,134 | 115,747,452 | 120,696,130 | 123,070,730 | 122,964,358 | |||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Net cash provided by operating activities | $ | 140,784 | $ | 250,391 | $ | 274,284 | $ | 466,494 | $ | 581,593 | ||||||||||
Net cash provided by / (used in) investing activities | (112,645 | ) | (8,858 | ) | (36,397 | ) | (787,456 | ) | 42,488 | |||||||||||
Net cash provided by / (used in) financing activities | (80,533 | ) | (212,153 | ) | (241,862 | ) | 482,594 | (166,051 | ) | |||||||||||
Net increase / (decrease) in cash, cash equivalents and restricted cash | (52,394 | ) | 29,380 | (3,975 | ) | 161,632 | 458,030 | |||||||||||||
Dividends and distributions paid | (49,143 | ) | (58,655 | ) | (65,470 | ) | (71,263 | ) | (119,548 | ) | ||||||||||
BALANCE SHEET DATA (at year end) | ||||||||||||||||||||
Total current assets | $ | 170,768 | $ | 197,244 | $ | 192,050 | $ | 426,124 | $ | 1,014,622 | ||||||||||
Total assets | 3,050,811 | 3,011,958 | 3,010,516 | 4,407,041 | 4,896,229 | |||||||||||||||
Total current liabilities | 224,669 | 266,534 | 206,974 | 370,027 | 423,090 | |||||||||||||||
Total long-term debt, including current portion | 1,316,554 | 1,426,162 | 1,465,619 | 2,467,321 | 2,607,534 | |||||||||||||||
Temporary equity – Redeemable non-controlling interest in subsidiary | — | — | — | — | 3,487 | |||||||||||||||
Common stock | 11 | 12 | 12 | 12 | 12 | |||||||||||||||
Total stockholders’ equity/net assets | 1,357,124 | 1,410,728 | 1,348,820 | 1,725,899 | 2,156,950 |
Average for the Year Ended December 31, | ||||||||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||||||||
FLEET DATA | ||||||||||||||||||||
Number of vessels | 55.8 | 60.3 | 60.0 | 83.6 | 116.7 | |||||||||||||||
TEU capacity (of our containerships) | 333,989 | 403,930 | 417,980 | 521,389 | 542,264 | |||||||||||||||
DWT capacity (of our dry bulk vessels)* | — | — | — | 1,252,917 | 2,442,106 |
* | Average DWT capacity for the year ended December 31, 2021 was calculated based on 201 days (the period from June 14, 2021 to December 31, 2021), given that we did not own any dry bulk vessels prior to June 14, 2021. |
Year ended December 31, | Percentage Change | |||||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | |||||||||||||
Voyage revenue | $ | 793.6 | $ | 1,113.9 | $ | 320.3 | 40.4 | % | ||||||||
Voyage expenses | (13.3 | ) | (49.1 | ) | 35.8 | n.m. | ||||||||||
Voyage expenses – related parties | (11.1 | ) | (15.4 | ) | 4.3 | 38.7 | % | |||||||||
Vessels’ operating expenses | (180.0 | ) | (269.2 | ) | 89.2 | 49.6 | % | |||||||||
General and administrative expenses | (9.4 | ) | (12.4 | ) | 3.0 | 31.9 | % | |||||||||
Management and agency fees – related parties | (29.6 | ) | (46.7 | ) | 17.1 | 57.8 | % | |||||||||
General and administrative expenses – non-cash component | (7.4 | ) | (7.1 | ) | (0.3 | ) | (4.1 | %) | ||||||||
Amortization of dry-docking and special survey costs | (10.4 | ) | (13.5 | ) | 3.1 | 29.8 | % | |||||||||
Depreciation | (137.0 | ) | (166.0 | ) | 29.0 | 21.2 | % | |||||||||
Gain on sale of vessels, net | 45.9 | 126.3 | 80.4 | 175.2 | % | |||||||||||
Vessels’ impairment loss | - | (1.7 | ) | 1.7 | n.m. | |||||||||||
Foreign exchange gains | 0.1 | 3.2 | 3.1 | n.m. | ||||||||||||
Interest income | 1.6 | 5.9 | 4.3 | n.m. | ||||||||||||
Interest and finance costs | (86.1 | ) | (122.2 | ) | 36.1 | 41.9 | % | |||||||||
Gain on sale of equity securities | 60.2 | - | (60.2 | ) | n.m. | |||||||||||
Income from equity method investments | 12.8 | 2.3 | (10.5 | ) | (82.0 | %) | ||||||||||
Dividend income from investment in equity securities | 1.8 | - | (1.8 | ) | n.m. | |||||||||||
Other | 4.6 | 3.7 | (0.9 | ) | (19.6 | %) | ||||||||||
Gain / (loss) on derivative instruments | (1.2 | ) | 2.7 | 3.9 | n.m. | |||||||||||
Net Income | $ | 435.1 | $ | 554.7 |
Year ended December 31, | ||||||||||||||||
Vessels’ operational data | 2021 | 2022 | Change | Percentage Change | ||||||||||||
Average number of vessels | 83.6 | 116.7 | 33.1 | 39.6 | % | |||||||||||
Ownership days | 30,525 | 42,595 | 12,070 | 39.5 | % | |||||||||||
Number of vessels under dry-docking and special survey | 15 | 23 | 8 |
Year ended December 31, 2021 | ||||||||||||||||
(Expressed in millions of U.S. dollars) | Container vessels | Dry bulk vessels (1) | Other | Total | ||||||||||||
Voyage revenue | $ | 678.3 | $ | 115.3 | $ | - | $ | 793.6 | ||||||||
Voyage expenses | (7.1 | ) | (6.2 | ) | - | (13.3 | ) | |||||||||
Voyage expenses – related parties | (9.6 | ) | (1.5 | ) | - | (11.1 | ) | |||||||||
Vessels’ operating expenses | (151.5 | ) | (28.5 | ) | - | (180.0 | ) | |||||||||
General and administrative expenses | (8.2 | ) | (1.2 | ) | - | (9.4 | ) | |||||||||
Management fees – related parties | (24.9 | ) | (4.7 | ) | - | (29.6 | ) | |||||||||
General and administrative expenses – non-cash component | (6.3 | ) | (1.1 | ) | - | (7.4 | ) | |||||||||
Amortization of dry-docking and special survey costs | (10.3 | ) | (0.1 | ) | - | (10.4 | ) | |||||||||
Depreciation | (125.8 | ) | (11.2 | ) | - | (137.0 | ) | |||||||||
Gain on sale of vessels, net | 45.9 | - | - | 45.9 | ||||||||||||
Foreign exchange gains | 0.1 | - | - | 0.1 | ||||||||||||
Interest income | 1.6 | - | - | 1.6 | ||||||||||||
Interest and finance costs | (81.9 | ) | (4.2 | ) | - | (86.1 | ) | |||||||||
Gain on sale of equity securities | - | - | 60.2 | 60.2 | ||||||||||||
Income from equity method investments | - | - | 12.8 | 12.8 | ||||||||||||
Dividend income from investment in equity securities | - | - | 1.8 | 1.8 | ||||||||||||
Other | 4.3 | 0.3 | - | 4.6 | ||||||||||||
Loss on derivative instruments | (1.1 | ) | (0.1 | ) | - | (1.2 | ) | |||||||||
Net Income | $ | 303.5 | $ | 56.8 | $ | 74.8 | $ | 435.1 |
Year ended December 31, 2022 | ||||||||||||||||||||||||
Container vessels | Dry bulk vessels | CBI | Other | Eliminations | Total | |||||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||||||||||
Voyage revenue | $ | 797.4 | $ | 316.1 | $ | 0.4 | $ | - | $ | - | $ | 1,113.9 | ||||||||||||
Intersegment voyage revenue | - | 0.8 | - | - | (0.8 | ) | - | |||||||||||||||||
Voyage expenses | (11.4 | ) | (37.6 | ) | (0.1 | ) | - | - | (49.1 | ) | ||||||||||||||
Intersegment voyage expenses | - | - | (0.8 | ) | - | 0.8 | - | |||||||||||||||||
Voyage expenses – related parties | (11.4 | ) | (4.0 | ) | - | - | - | (15.4 | ) | |||||||||||||||
Vessels’ operating expenses | (169.4 | ) | (99.8 | ) | - | - | - | (269.2 | ) | |||||||||||||||
General and administrative expenses | (7.7 | ) | (4.4 | ) | (0.3 | ) | - | - | (12.4 | ) | ||||||||||||||
Management and agency fees– related parties | (27.0 | ) | (16.9 | ) | (2.8 | ) | - | - | (46.7 | ) | ||||||||||||||
General and administrative expenses - non-cash component | (4.4 | ) | (2.7 | ) | - | - | - | (7.1 | ) | |||||||||||||||
Amortization of dry-docking and special survey costs | (11.8 | ) | (1.7 | ) | - | - | - | (13.5 | ) | |||||||||||||||
Depreciation | (126.3 | ) | (39.7 | ) | - | - | - | (166.0 | ) | |||||||||||||||
Gain on sale of vessels, net | 122.8 | 3.5 | - | - | - | 126.3 | ||||||||||||||||||
Vessels’ impairment loss | - | (1.7 | ) | - | - | - | (1.7 | ) | ||||||||||||||||
Foreign exchange gains | 2.2 | 1.0 | - | - | - | 3.2 | ||||||||||||||||||
Interest income | 3.6 | 2.3 | - | - | - | 5.9 | ||||||||||||||||||
Interest and finance costs | (101.9 | ) | (20.3 | ) | - | - | - | (122.2 | ) | |||||||||||||||
Income from equity method investments | - | - | - | 2.3 | - | 2.3 | ||||||||||||||||||
Other | 2.3 | 1.4 | - | - | - | 3.7 | ||||||||||||||||||
Gain on derivative instruments | 1.5 | 1.1 | 0.1 | - | - | 2.7 | ||||||||||||||||||
Net Income / (loss) | $ | 458.5 | $ | 97.4 | $ | (3.5 | ) | $ | 2.3 | $ | - | $ | 554.7 |
Year ended December 31, | ||||||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | Percentage Change | ||||||||||||
Voyage revenue | $ | 793.6 | $ | 1,113.9 | $ | 320.3 | 40.4 | % | ||||||||
Accrued charter revenue(2) | (11.3 | ) | (2.6 | ) | 8.7 | 77.0 | % | |||||||||
Amortization of Time charter assumed | (0.4 | ) | 0.2 | 0.6 | n.m. | |||||||||||
Voyage revenue adjusted on a cash basis (3) | $ | 781.9 | $ | 1,111.5 | $ | 329.6 | 42.2 | % |
Year ended December 31, | Percentage | |||||||||||||||
2020 | 2021 | Change | Change | |||||||||||||
Voyage revenue | $ | 460.3 | $ | 793.6 | $ | 333.3 | 72.4 | % | ||||||||
Voyage expenses | (7.4 | ) | (13.3 | ) | 5.9 | 79.7 | % | |||||||||
Voyage expenses – related parties | (6.5 | ) | (11.1 | ) | 4.6 | 70.8 | % | |||||||||
Vessels’ operating expenses | (117.1 | ) | (180.0 | ) | 62.9 | 53.7 | % | |||||||||
General and administrative expenses | (7.4 | ) | (9.4 | ) | 2.0 | 27.0 | % | |||||||||
Management fees – related parties | (21.6 | ) | (29.6 | ) | 8.0 | 37.0 | % | |||||||||
General and administrative expenses - non-cash component | (3.7 | ) | (7.4 | ) | 3.7 | 100.0 | % | |||||||||
Amortization of dry-docking and special survey costs | (9.0 | ) | (10.4 | ) | 1.4 | 15.6 | % | |||||||||
Depreciation | (108.7 | ) | (137.0 | ) | 28.3 | 26.0 | % | |||||||||
Gain / (loss) on sale / disposal of vessels, net | (79.1 | ) | 45.9 | 125.0 | n.m. | |||||||||||
Loss on vessels held for sale | (7.7 | ) | — | (7.7 | ) | n.m. | ||||||||||
Vessels’ impairment loss | (31.6 | ) | — | (31.6 | ) | n.m. | ||||||||||
Foreign exchange gains / (losses) | (0.3 | ) | 0.1 | 0.4 | n.m. | |||||||||||
Interest income | 1.9 | 1.6 | (0.3 | ) | (15.8 | %) | ||||||||||
Interest and finance costs | (68.7 | ) | (86.1 | ) | 17.4 | 25.3 | % | |||||||||
Swaps’ breakage cost | — | — | — | n.m. | ||||||||||||
Gain on sale of equity securities | — | 60.2 | 60.2 | n.m. | ||||||||||||
Income from equity method investments | 16.2 | 12.8 | (3.4 | ) | (21.0 | %) | ||||||||||
Dividend income from investment in equity securities | — | 1.8 | 1.8 | n.m. | ||||||||||||
Other | 1.2 | 4.6 | 3.4 | n.m. | ||||||||||||
Loss on derivative instruments | (1.9 | ) | (1.2 | ) | (0.7 | ) | (36.8 | %) | ||||||||
Net Income | $ | 8.9 | $ | 435.1 |
Year ended December 31, | Percentage | |||||||||||||||
2020 | 2021 | Change | Change | |||||||||||||
Average number of vessels | 60.0 | 83.6 | 23.6 | 39.3 | % | |||||||||||
Ownership days | 21,965 | 30,525 | 8,560 | 39.0 | % | |||||||||||
Number of vessels under dry-docking | 11 | 15 | 4 |
Year ended December 31, 2021 | ||||||||||||||||
(Expressed in millions of U.S. dollars) | Container vessels | Dry bulk vessels (1) | Other | Total | ||||||||||||
Voyage revenue | $ | 678.3 | $ | 115.3 | $ | - | $ | 793.6 | ||||||||
Voyage expenses | (7.1 | ) | (6.2 | ) | - | (13.3 | ) | |||||||||
Voyage expenses – related parties | (9.6 | ) | (1.5 | ) | - | (11.1 | ) | |||||||||
Vessels’ operating expenses | (151.5 | ) | (28.5 | ) | - | (180.0 | ) | |||||||||
General and administrative expenses | (8.2 | ) | (1.2 | ) | - | (9.4 | ) | |||||||||
Management fees – related parties | (24.9 | ) | (4.7 | ) | - | (29.6 | ) | |||||||||
General and administrative expenses – non-cash component | (6.3 | ) | (1.1 | ) | - | (7.4 | ) | |||||||||
Amortization of dry-docking and special survey costs | (10.3 | ) | (0.1 | ) | - | (10.4 | ) | |||||||||
Depreciation | (125.8 | ) | (11.2 | ) | - | (137.0 | ) | |||||||||
Gain on sale of vessels, net | 45.9 | - | - | 45.9 | ||||||||||||
Foreign exchange gains | 0.1 | - | - | 0.1 | ||||||||||||
Interest income | 1.6 | - | - | 1.6 | ||||||||||||
Interest and finance costs | (81.9 | ) | (4.2 | ) | - | (86.1 | ) | |||||||||
Gain on sale of equity securities | - | - | 60.2 | 60.2 | ||||||||||||
Income from equity method investments | - | - | 12.8 | 12.8 | ||||||||||||
Dividend income from investment in equity securities | - | - | 1.8 | 1.8 | ||||||||||||
Other | 4.3 | 0.3 | - | 4.6 | ||||||||||||
Loss on derivative instruments | (1.1 | ) | (0.1 | ) | - | (1.2 | ) | |||||||||
Net Income | $ | 303.5 | $ | 56.8 | $ | 74.8 | $ | 435.1 |
Year ended December 31, | Percentage | |||||||||||||||
2020 | 2021 | Change | Change | |||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | ||||||||||||||||
Voyage revenue | $ | 460.3 | $ | 793.6 | $ | 333.3 | 72.4 | % | ||||||||
Accrued charter revenue(1) | 21.3 | (11.3 | ) | (32.6 | ) | (153.1 | ) | |||||||||
Amortization of Time charter assumed | 0.2 | (0.4 | ) | (0.6 | ) | n.m. | ||||||||||
Voyage revenue adjusted on a cash basis(2) | $ | 481.8 | $ | 781.9 | $ | 300.1 | 62.3 | % |
(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. |
(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. Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. 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 table in “Item 4. Information On The Company—Business Overview—Our Fleet, Acquisitions and Vessels Under Construction”. |
Year ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||
Condensed cash flows | ||||||||||||
Net Cash Provided by Operating Activities | $ | 274.3 | $ | 466.5 | $ | 581.6 | ||||||
Net Cash Provided by / (Used in) Investing Activities | (36.4 | ) | (787.5 | ) | 42.5 | |||||||
Net Cash Provided by / (Used in) Financing Activities | (241.9 | ) | 482.6 | (166.1 | ) |
Credit Facilities and Other Financing Arrangements | Outstanding Principal Amount | Interest Rate(1) | Maturity | Repayment profile | ||||
(Expressed in thousands of U.S. dollars) | ||||||||
Bank Debt | ||||||||
Tatum et al | 34,400 | LIBOR + Margin(2) | 2025 | Straight-line amortization with balloon | ||||
Adele Shipping | 48,500 | LIBOR + Margin(2) | 2026 | Straight-line amortization with balloon | ||||
Cadence et al | 82,800 | LIBOR + Margin(2) | 2027 | Variable amortization with balloon | ||||
Sander et al | 85,000 | SOFR + Margin(2) | 2030 | Straight-line amortization with balloon | ||||
Raymond et al | 112,430 | LIBOR + Margin(2) | 2025 | Straight-line amortization with balloon | ||||
Caravokyra et al | 6,928 | LIBOR + Margin(2) | 2025 | Straight-line amortization with balloon | ||||
Capetanissa et al | 15,671 | LIBOR + Margin(2) | 2025 | Straight-line amortization with balloon | ||||
Berg | 10,540 | LIBOR/SOFR + Margin(2) | 2026 | Straight-line amortization with balloon | ||||
Verandi et al | 43,500 | SOFR + Margin(2) | 2026 | Variable amortization | ||||
Evantone et al | 17,750 | LIBOR + Margin(2) | 2026 | Straight-line amortization with balloon | ||||
Ainsley et al | 131,250 | LIBOR + Margin(2) | 2031 | Straight-line amortization with balloon | ||||
Hyde et al | 127,212 | Fixed Rate / SOFR + Margin(2) | 2029 | Straight-line amortization with balloon | ||||
Kemp | 64,300 | LIBOR + Margin(2) | 2029 | Variable amortization with balloon | ||||
Achilleas et al 2 | 66,974 | LIBOR + Margin(2) | 2026 | Straight-line amortization with balloon | ||||
Novara et al | 65,043 | LIBOR + Margin(2) | 2025-2026 | Variable amortization with balloon | ||||
Dry Bulk (Facility 1) | 24,387 | LIBOR + Margin(2) | 2026 | Variable installments with balloon | ||||
Dry Bulk (Facility 3) | 49,095 | LIBOR + Margin(2) | 2026 | Variable amortization with balloon | ||||
Dry Bulk (Facility 4) | 67,882 | LIBOR + Margin(2) | 2026-2027 | Variable amortization with balloon | ||||
Dry Bulk (Facility 6) | 47,884 | LIBOR + Margin(2) | 2027 | Straight-line amortization with balloon | ||||
Dry Bulk (Facility 7) | 52,361 | LIBOR + Margin(2) | 2027-2028 | Variable amortization with balloon | ||||
Bails et al 2 | 62,500 | LIBOR + Margin(2) | 2026 | Variable amortization with balloon | ||||
Dry Bulk (Facility 8) | 82,885 | SOFR + Margin(2) | 2028 | Variable amortization with balloon | ||||
Dry Bulk (Facility 9) | 33,700 | SOFR + Margin(2) | 2026 | Variable amortization with balloon | ||||
Dry Bulk (Facility 10) | 30,000 | SOFR + Margin(2) | 2028 | Variable amortization with balloon | ||||
Benedict et al | 458,952 | SOFR + Margin(2) | 2027 | Variable amortization with balloon | ||||
Other Financing Arrangements | ||||||||
Sale and Leaseback (Facility 3) | 378,848 | Fixed Rate | 2030- 2031 | Bareboat structure-fixed daily charter with balloon | ||||
Bertrand et al Financing arrangements | 300,082 | Fixed Rate | 2028 | Variable amortization with balloon | ||||
Unsecured Bond Loan | ||||||||
Bond Loan | 106,660 | Fixed Rate | 2026 | Bullet |
(1) | The interest rates of long-term bank debt at December 31, 2022 ranged from 2.99% to 7.47%, and the weighted average interest rate as at December 31, 2022 was 4.9%. Such calculations have accounted for fixed rate long-term bank debt and interest rate swaps/caps. |
(2) | The interest rate margin of long-term bank debt at December 31, 2022 ranged from 1.50% to 3.90%, and the weighted average interest rate margin as at December 31, 2022 was 2.3%. |
(i) | the first tranche is $15.0 million and is repayable in 14 equal quarterly installments of approximately $1.0 million and a balloon payment of $1.1 million that is payable together with the last installment, |
(ii) | the second tranche is $26.0 million and is repayable in 14 equal quarterly installments of $1.5 million and a balloon payment of $5.0 million that is payable together with the last installment, and |
(iii) | the third tranche is $26.0 million and is repayable in 14 equal quarterly installments of $1.5 million and a balloon payment of $5.0 million that is payable together with the last installment. |
• | pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends; |
• | purchase or otherwise acquire for value any shares of the subsidiaries’ capital; |
• | make loans or assume financial obligations which are not subordinated to the respective credit facilities; |
• | make investments in other persons; |
• | sell or transfer significant assets, including any vessel or vessels mortgaged under the credit facilities, to any person other than as per the provisions of the respective credit facilities; |
• | create liens on assets; or |
• | allow the Konstantakopoulos family’s direct or indirect holding in Costamare Inc. to fall below 30% of the total issued share capital. |
• | the ratio of our total liabilities (after deducting all cash and cash equivalents) to market value adjusted total assets (after deducting all cash and cash equivalents) may not exceed 0.75:1; |
• | the ratio of EBITDA over net interest expense must be equal to or higher than 2.5:1, however such covenant should not be considered breached unless the Company’s liquidity is less than 5% of the total debt or market value adjusted net worth is less than $600 million; |
• | the aggregate amount of all cash and cash equivalents may not be less than the greater of (i) $30 million or (ii) 3% of the total debt; and |
• | the market value adjusted net worth must at all times exceed $500 million. |
December 31, 2021 | December 31, 2022 | |||||||||||||||
No. of Container Vessels (*) | Amount ($ US Million) (**) | No. of Container Vessels (*) | Amount ($ US Million) (**) | |||||||||||||
5-year historical average rate | 1 | 1.1 | — | — | ||||||||||||
3-year historical average rate | 1 | 1.1 | — | — | ||||||||||||
1-year historical average rate | — | — | — | — |
(*) | Number of container vessels the carrying value of which would not have been recovered. |
(**) | Aggregate carrying value that would not have been recovered. |
December 31, 2021 | December 31, 2022 | |||||||||||||||
No. of Bulker Vessels (*) | Amount ($ US Million) (**) | No. of Bulker Vessels (*) | Amount ($ US Million) (**) | |||||||||||||
5-year historical average rate | — | — | — | — | ||||||||||||
3-year historical average rate | — | — | — | — | ||||||||||||
1-year historical average rate | — | — | — | — |
(*) | Number of bulker vessels the carrying value of which would not have been recovered. |
(**) | Aggregate carrying value that would not have been recovered. |
Vessel | Capacity (TEU) | Built | Acquisition Date | Carrying Value December 31, 2021 ($ US Million)(1) (**) | Carrying Value December 31, 2022 ($ US Million)(1) | |||||||
1 | Triton | 14,424 | 2016 | November 2018 | 109.0 | 104.8 | ||||||
2 | Titan | 14,424 | 2016 | November 2018 | 109.6 | 105.4 | ||||||
3 | Talos | 14,424 | 2016 | November 2018 | 109.8 | 105.7 | ||||||
4 | Taurus | 14,424 | 2016 | November 2018 | 108.8 | 106.0 | ||||||
5 | Theseus | 14,424 | 2016 | November 2018 | 108.9 | 106.5 | ||||||
6 | YM Triumph | 12,690 | 2020 | July 2020 | 90.3 | 87.6 | ||||||
7 | YM Truth | 12,690 | 2020 | August 2020 | 90.4 | 87.6 | ||||||
8 | YM Totality | 12,690 | 2020 | September 2020 | 90.9 | 88.2 | ||||||
9 | YM Target | 12,690 | 2021 | February 2021 | 91.9 | 89.1 | ||||||
10 | YM Tiptop | 12,690 | 2021 | May 2021 | 93.2 | 90.4 | ||||||
11 | Cape Akritas | 11,010 | 2016 | March 2021 | 79.6 | 76.6 | ||||||
12 | Cape Tainaro | 11,010 | 2017 | March 2021 | 79.3 | 78.3 | ||||||
13 | Cape Kortia | 11,010 | 2017 | March 2021 | 79.3 | 78.4 | ||||||
14 | Cape Sounio | 11,010 | 2017 | March 2021 | 78.8 | 77.6 | ||||||
15 | Cape Artemisio | 11,010 | 2017 | March 2021 | 77.6 | 76.2 | ||||||
16 | Cosco Hellas | 9,469 | 2006 | July 2006 | 54.6 | 51.4 | ||||||
17 | Zim Shanghai (ex. Cosco Guangzhou) | 9,469 | 2006 | February 2006 | 53.0 | 50.0 | ||||||
18 | Beijing | 9,469 | 2006 | June 2006 | 53.9 | 50.8 | ||||||
19 | Yantian | 9,469 | 2006 | April 2006 | 53.6 | 50.5 | ||||||
20 | Zim Yantian (ex. Cosco Ningbo) | 9,469 | 2006 | March 2006 | 53.1 | 50.1 | ||||||
21 | MSC Azov | 9,403 | 2014 | January 2014 | 81.3 | 77.8 | ||||||
22 | MSC Ajaccio | 9,403 | 2014 | March 2014 | 81.6 | 78.1 | ||||||
23 | MSC Amalfi | 9,403 | 2014 | April 2014 | 82.1 | 78.7 | ||||||
24 | MSC Athens | 8,827 | 2013 | March 2013 | 78.8 | 75.1 | ||||||
25 | MSC Athos | 8,827 | 2013 | April 2013 | 77.9 | 74.4 | ||||||
26 | Valor | 8,827 | 2013 | June 2013 | 73.1 | 70.0 |
27 | Value | 8,827 | 2013 | June 2013 | 73.2 | 70.1 | ||||||
28 | Valiant | 8,827 | 2013 | August 2013 | 74.0 | 70.9 | ||||||
29 | Valence | 8,827 | 2013 | September 2013 | 74.4 | 71.2 | ||||||
30 | Vantage | 8,827 | 2013 | November 2013 | 74.5 | 71.4 | ||||||
31 | Navarino* | 8,531 | 2010 | May 2010 | 80.7 | 76.7 | ||||||
32 | Maersk Kleven | 8,044 | 1996 | September 2018 | 12.9 | 12.2 | ||||||
33 | Maersk Kotka | 8,044 | 1996 | September 2018 | 12.7 | 12.0 | ||||||
34 | Maersk Kowloon | 7,471 | 2005 | May 2017 | 14.9 | 14.3 | ||||||
35 | Kure | 7,403 | 1996 | December 2007 | 11.5 | 12.9 | ||||||
36 | Methoni (ex. MSC Methoni) | 6,724 | 2003 | October 2011 | 36.5 | 33.7 | ||||||
37 | Porto Cheli | 6,712 | 2001 | June 2021 | 36.5 | 33.6 | ||||||
38 | Sealand Washington(2) | 6,648 | 2000 | August 2000 | 24.7 | - | ||||||
39 | Zim Tampa (ex. Kobe) | 6,648 | 2000 | June 2000 | 23.7 | 21.7 | ||||||
40 | Maersk Kalamata(2) | 6,644 | 2003 | June 2003 | 31.0 | - | ||||||
41 | Zim America (ex. Maersk Kingston) | 6,644 | 2003 | April 2003 | 30.8 | 28.7 | ||||||
42 | Zim Vietnam (ex. Maersk Kolkata) | 6,644 | 2003 | January 2003 | 30.0 | 28.8 | ||||||
43 | Aries | 6,492 | 2004 | February 2021 | 10.3 | 12.3 | ||||||
44 | Argus | 6,492 | 2004 | March 2021 | 10.3 | 12.1 | ||||||
45 | Porto Germeno | 5,908 | 2002 | June 2021 | 34.3 | 33.2 | ||||||
46 | Glen Canyon | 5,642 | 2006 | March 2021 | 12.0 | 12.0 | ||||||
47 | Porto Kagio | 5,570 | 2002 | June 2021 | 33.7 | 33.9 | ||||||
48 | Leonidio | 4,957 | 2014 | May 2017 | 18.1 | 17.4 | ||||||
49 | Kyparissia | 4,957 | 2014 | May 2017 | 18.1 | 17.4 | ||||||
50 | Megalopolis | 4,957 | 2013 | July 2018 | 22.0 | 21.1 | ||||||
51 | Marathopolis | 4,957 | 2013 | July 2018 | 22.1 | 21.2 | ||||||
52 | Oakland * | 4,890 | 2000 | October 2000 | 19.7 | 18.0 | ||||||
53 | Gialova | 4,578 | 2009 | August 2021 | 20.0 | 19.2 | ||||||
54 | Dyros | 4,578 | 2008 | January 2022 | - | 19.1 | ||||||
55 | Norfolk * | 4,259 | 2009 | May 2021 | 26.5 | 25.3 | ||||||
56 | Vulpecula | 4,258 | 2010 | December 2019 | 10.2 | 10.5 | ||||||
57 | Volans | 4,258 | 2010 | December 2019 | 10.2 | 10.4 | ||||||
58 | Virgo | 4,258 | 2009 | January 2020 | 9.7 | 10.0 | ||||||
59 | Vela | 4,258 | 2009 | December 2019 | 10.0 | 9.6 | ||||||
60 | Androusa | 4,256 | 2010 | April 2021 | 20.6 | 20.2 | ||||||
61 | Neokastro | 4,178 | 2011 | December 2020 | 10.6 | 10.2 | ||||||
62 | Ulsan | 4,132 | 2002 | February 2012 | 18.2 | 19.3 | ||||||
63 | Lakonia | 2,586 | 2004 | December 2014 | 7.4 | 7.1 | ||||||
64 | Scorpius | 2,572 | 2007 | September 2020 | 7.1 | 6.6 | ||||||
65 | Etoile | 2,556 | 2005 | November 2017 | 9.4 | 8.9 | ||||||
66 | Areopolis | 2,474 | 2000 | May 2014 | 6.7 | 6.3 | ||||||
67 | Michigan | 1,300 | 2008 | April 2018 | 5.7 | 5.5 | ||||||
68 | Trader | 1,300 | 2008 | April 2018 | 5.7 | 5.6 | ||||||
69 | Luebeck | 1,078 | 2001 | August 2012 | 4.8 | 4.4 | ||||||
TOTAL | 3,165.8 | 3,020.3 |
(1) | For impairment test calculation, Carrying Value includes the unamortized balance of dry-docking cost as at December 31, 2021 and 2022. |
(2) | As of December 31, 2022, the vessel was classified as held for sale. |
* | Indicates container vessels which we believe, as of December 31, 2022, may have had fair values below their carrying values. As of December 31, 2022, we believe that the aggregate carrying value of these three vessels was $16.5 million more than their market value. |
** | We believe that as of December 31, 2021 all our container vessels had fair values that exceeded their carrying values. |
Vessel | Size (dwt) | Built | Acquisition Date | Carrying Value December 31, 2021 ($ US Million)(1) (**) | Carrying Value December 31, 2022 ($ US Million)(1) | ||||||
1 | Aeolian* | 83,478 | 2012 | August, 2021 | 21.0 | 22.2 | |||||
2 | Greneta | 82,166 | 2010 | December, 2021 | 18.9 | 17.9 | |||||
3 | Hydrus* | 81,601 | 2011 | December, 2021 | 18.7 | 17.7 | |||||
4 | Phoenix* | 81,569 | 2012 | December, 2021 | 19.7 | 21.6 | |||||
5 | Builder* | 81,541 | 2012 | June, 2021 | 21.9 | 22.2 | |||||
6 | Farmer* | 81,541 | 2012 | September, 2021 | 21.7 | 20.9 | |||||
7 | Sauvan | 79,700 | 2010 | July, 2021 | 16.2 | 15.3 | |||||
8 | Rose* | 76,619 | 2008 | October, 2021 | 17.8 | 16.5 | |||||
9 | Merchia | 63,800 | 2015 | December, 2021 | 23.7 | 22.6 | |||||
10 | Seabird | 63,553 | 2016 | July, 2021 | 22.0 | 20.9 | |||||
11 | Dawn | 63,530 | 2018 | July, 2021 | 23.2 | 22.3 | |||||
12 | Orion | 63,473 | 2015 | November, 2021 | 23.6 | 22.5 | |||||
13 | Damon* | 63,227 | 2012 | December, 2021 | 22.3 | 21.5 | |||||
14 | Titan I* | 58,090 | 2009 | November, 2021 | 16.3 | 15.2 | |||||
15 | Eracle* | 58,018 | 2012 | July, 2021 | 15.3 | 15.7 | |||||
16 | Pythias* | 58,018 | 2010 | December, 2021 | 17.5 | 16.4 | |||||
17 | Norma* | 58,018 | 2010 | March 2022 | - | 16.0 | |||||
18 | Oracle* | 57,970 | 2009 | January 2022 | - | 15.8 | |||||
19 | Uruguay | 57,937 | 2011 | September, 2021 | 18.2 | 17.1 | |||||
20 | Curacao | 57,937 | 2011 | October, 2021 | 18.3 | 17.2 | |||||
21 | Athena* | 57,809 | 2012 | September, 2021 | 15.4 | 15.7 | |||||
22 | Thunder(2) | 57,334 | 2009 | September, 2021 | 13.9 | - | |||||
23 | Serena* | 57,266 | 2010 | August, 2021 | 14.7 | 14.5 | |||||
24 | Libra* | 56,729 | 2010 | January 2022 | - | 14.7 | |||||
25 | Pegasus* | 56,726 | 2011 | June, 2021 | 14.4 | 14.3 | |||||
26 | Merida* | 56,670 | 2012 | August, 2021 | 16.4 | 15.6 | |||||
27 | Clara | 56,557 | 2008 | August, 2021 | 14.6 | 13.6 | |||||
28 | Peace | 55,709 | 2006 | July, 2021 | 12.1 | 11.8 | |||||
29 | Pride | 55,705 | 2006 | July, 2021 | 12.1 | 11.1 | |||||
30 | Bermondi* | 55,469 | 2009 | October, 2021 | 16.1 | 15.5 | |||||
31 | Comity | 37,302 | 2010 | August, 2021 | 12.2 | 11.5 | |||||
32 | Verity* | 37,163 | 2012 | July, 2021 | 13.7 | 14.6 | |||||
33 | Parity* | 37,152 | 2012 | September, 2021 | 13.8 | 14.9 | |||||
34 | Acuity | 37,149 | 2011 | July, 2021 | 14.0 | 13.5 | |||||
35 | Equity | 37,071 | 2013 | October, 2021 | 14.9 | 14.4 | |||||
36 | Discovery | 37,019 | 2012 | July, 2021 | 13.9 | 13.3 | |||||
37 | Taibo | 35,112 | 2011 | September, 2021 | 10.2 | 12.4 | |||||
38 | Bernis | 34,627 | 2011 | July, 2021 | 13.3 | 12.6 |
39 | Manzanillo | 34,426 | 2010 | July, 2021 | 11.2 | 10.6 | |||||
40 | Adventure | 33,755 | 2011 | June, 2021 | 10.0 | 9.8 | |||||
41 | Alliance | 33,751 | 2012 | July, 2021 | 10.0 | 11.0 | |||||
42 | Cetus | 32,527 | 2010 | October, 2021 | 12.1 | 11.3 | |||||
43 | Progress | 32,400 | 2011 | August, 2021 | 13.0 | 12.0 | |||||
44 | Miner* | 32,300 | 2010 | August, 2021 | 12.5 | 11.8 | |||||
45 | Konstantinos | 32,178 | 2012 | September, 2021 | 11.8 | 12.5 | |||||
46 | Resource | 31,776 | 2010 | September, 2021 | 12.4 | 11.1 | |||||
TOTAL | 685.0 | 701.6 |
(1) | For impairment test calculation, Carrying Value includes the unamortized balance of dry-docking cost as at December 31, 2021 and 2022. |
(2) | Vessel sold in 2022. |
* | Indicates dry bulk vessels which we believe, as of December 31, 2022, may have had fair values below their carrying values. As of December 31, 2022, we believe that the aggregate carrying value of these 21 vessels was $29.4 million more than their aggregate market value. |
** | We believe that as of December 31, 2021 all our dry-bulk vessels had fair values that exceeded their carrying values. |
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Name | Age | Position |
Konstantinos Konstantakopoulos | 53 | Chief Executive Officer, Chairman of the Board and Class III Director |
Gregory Zikos | 54 | Chief Financial Officer and Class II Director |
Vagn Lehd Møller | 76 | Class II Director |
Charlotte Stratos | 68 | Class III Director |
Konstantinos Zacharatos | 50 | Class I Director |
Anastassios Gabrielides | 58 | General Counsel and Secretary |
• | a Code of Business Conduct and Ethics for all officers and employees, which incorporates a Code of Ethics for directors and a Code of Conduct for corporate officers; |
• | a Corporate Governance, Nominating and Compensation Committee Charter; and |
• | an Audit Committee Charter. |
• | the appointment, compensation, retention and oversight of independent auditors and approving any non-audit services performed by such auditors; |
• | assisting the board in monitoring the integrity of our financial statements, the independent auditors’ qualifications and independence, the performance of the independent accountants and our internal audit function and our compliance with legal and regulatory requirements; |
• | annually reviewing an independent auditors’ report describing the auditing firm’s internal quality-control procedures, and any material issues raised by the most recent internal quality control review, or peer review, of the auditing firm; |
• | discussing the annual audited financial and quarterly statements with management and the independent auditors; |
• | discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | discussing policies with respect to risk assessment and risk management; |
• | meeting separately, and periodically, with management, internal auditors and the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s responses; |
• | setting clear hiring policies for employees or former employees of the independent auditors; |
• | annually reviewing the adequacy of the audit committee’s written charter, the scope of the annual internal audit plan and the results of internal audits; |
• | establishing procedures for the consideration of all related-party transactions, including matters involving potential conflicts of interest or potential usurpations of corporate opportunities; |
• | reporting regularly to the full board of directors; and |
• | handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time. |
• | nominating candidates, consistent with criteria approved by the full board of directors, for the approval of the full board of directors to fill board vacancies as and when they arise, as well as putting in place plans for succession, in particular, of the chairman of the board of directors and executive officers; |
• | selecting, or recommending that the full board of directors select, the director nominees for the next annual meeting of stockholders; |
• | developing and recommending to the full board of directors corporate governance guidelines applicable to us and keeping such guidelines under review; |
• | overseeing the evaluation of the board and management; and |
• | handling such other matters that are specifically delegated to the corporate governance, nominating and compensation committee by the board of directors from time to time. |
• | each person or entity that we know beneficially owns 5% or more of our common stock; |
• | each of our officers and directors; and |
• | all our directors and officers as a group. |
Shares of Common Stock Beneficially Held | ||||||||
Identity of Person or Group | Number of Shares | Percentage | ||||||
Officers and Directors | ||||||||
Konstantinos Konstantakopoulos(1) | 32,268,462 | 26.3 | % | |||||
Gregory Zikos(2) | * | |||||||
Konstantinos Zacharatos(3) | * | |||||||
Vagn Lehd Møller | * | |||||||
Charlotte Stratos | — | |||||||
Anastassios Gabrielides(4) | * | |||||||
All officers and directors as a group (six persons) | 32,346,306 | 26.4 | % | |||||
5% Beneficial Owners | ||||||||
Achillefs Konstantakopoulos(5) | 21,862,174 | 17.8 | % | |||||
Christos Konstantakopoulos(6) | 20,551,588 | 16.8 | % |
(1) | Konstantinos Konstantakopoulos, our chairman and chief executive officer, owns 13,182,873 shares of common stock directly and 18,781,888 shares of common stock indirectly through entities he controls and his immediate family owns 303,701 shares of common stock. He also holds 12,800 shares of Series B Preferred Stock, 24,749 shares of Series C Preferred Stock, 60,153 shares of Series D Preferred Stock and 305,000 shares of Series E Preferred Stock through an entity he controls, 0.6%, 0.6%, 1.5% and 6.7%, respectively, of the issued and outstanding shares of Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, respectively. |
(2) | Gregory Zikos holds less than 1% of our issued and outstanding Series E Preferred Stock. |
(3) | Konstantinos Zacharatos holds less than 1% of our issued and outstanding Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock. |
(4) | Anastassios Gabrielides, our General Counsel and Secretary, holds less than 1% of our issued and outstanding Series D Preferred Stock. |
(5) | Achillefs Konstantakopoulos, the brother of our chairman and chief executive officer, owns 18,438,585 shares of common stock directly and 2,643,589 shares of common stock indirectly through entities he controls and his immediate family owns 780,000 shares of common stock. He also holds 30,203 shares of Series B Preferred Stock, 80,390 shares of Series C Preferred Stock and 102,300 shares of Series D Preferred Stock through an entity he controls, or 1.5%, 2.0% and 2.6% of the issued and outstanding shares of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively. His immediate family also holds 31,350 shares of Series B Preferred Stock, or 1.6% of the issued and outstanding shares of Series B Preferred Stock. |
(6) | Christos Konstantakopoulos, the brother of our chairman and chief executive officer, owns 20,551,588 shares of common stock directly. |
* | Owns less than 1% of our issued and outstanding common stock. |
• | any moneys payable by us under the applicable agreement have not been paid when due or if on demand within 20 business days of payment having been demanded; |
• | if we materially breach the agreement and we have failed to cure such breach within 20 business days after we are given written notice from Costamare Shipping or Costamare Services, as applicable; or |
• | there is a change of control of our Company or the vessel-owning subsidiaries, as applicable. |
• | any moneys payable by Costamare Shipping or Costamare Services under or pursuant to the applicable agreement are not paid or accounted for within 10 business days after receiving written notice from us; |
• | Costamare Shipping or Costamare Services, as applicable materially breaches the agreement and has failed to cure such breach within 20 business days after receiving written notice from us; |
• | there is a change of control of Costamare Shipping or Costamare Services, as applicable; or |
• | Costamare Shipping or Costamare Services, as applicable, is convicted of, enters a plea of guilty or nolo contendere with respect to, or enters into a plea bargain or settlement admitting guilt for a crime (including fraud), which conviction, plea bargain or settlement is demonstrably and materially injurious to Costamare, if such crime is not a misdemeanor and such crime has been committed solely and directly by an officer or director of Costamare Shipping or Costamare Services, as applicable, acting within the terms of its employment or office. |
• | the other party ceases to conduct business, or all or substantially all of the equity interests, properties or assets of the other party are sold, seized or appropriated which, in the case of seizure or appropriation, is not discharged within 20 business days; |
• | the other party files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation, or if a petition is filed against such party seeking to have it declared insolvent or bankrupt and such petition is not dismissed or stayed within 90 business days of its filing, or such party admits in writing its insolvency or its inability to pay its debts as they mature, or if an order is made for the appointment of a liquidator, manager, receiver or trustee of such party of all or a substantial part of its assets, or if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of such party’s undertaking, property or assets or if an order is made or a resolution is passed for Costamare Shipping’s, Costamare Services’ or our winding up; |
• | the other party is prevented from performing any obligations under the applicable agreement by any cause whatsoever of any nature or kind beyond the reasonable control of such party respectively for a period of two consecutive months or more (“Force Majeure”); or |
• | in the case of the Framework Agreement, all supervision agreements and all ship-management agreements are terminated in accordance with their respective terms. |
ITEM 8. | FINANCIAL INFORMATION |
Payment Date | Preferred Series B amount paid per share | Preferred Series C amount paid per share | Preferred Series D amount paid per share | Preferred Series E amount paid per share | ||||||||||||
October 15, 2013 | $ | 0.365400 | - | - | - | |||||||||||
January 15, 2014 | $ | 0.476563 | - | - | - | |||||||||||
April 15, 2014 | $ | 0.476563 | $ | 0.495833 | - | - | ||||||||||
July 15, 2014 | $ | 0.476563 | $ | 0.531250 | - | - | ||||||||||
October 15, 2014 | $ | 0.476563 | $ | 0.531250 | - | - | ||||||||||
January 15, 2015 | $ | 0.476563 | $ | 0.531250 | - | - | ||||||||||
April 15, 2015 | $ | 0.476563 | $ | 0.531250 | - | - | ||||||||||
July 15, 2015 | $ | 0.476563 | $ | 0.531250 | $ | 0.376736 | - | |||||||||
October 15, 2015 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
January 15, 2016 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
April 15, 2016 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
July 15, 2016 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
October 17, 2016 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
January 17, 2017 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
April 17, 2017 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
July 17, 2017 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
October 16, 2017 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
January 16, 2018 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | - | |||||||||
April 16, 2018 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.462240 | ||||||||
July 16, 2018 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
October 15, 2018 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
January 15, 2019 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
April 15, 2019 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
July 15, 2019 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
October 15, 2019 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
January 15, 2020 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
April 15, 2020 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
July 15, 2020 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
October 15, 2020 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
January 15, 2021 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
April 15, 2021 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
July 15, 2021 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
October 15, 2021 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
January 18, 2022 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
April 18, 2022 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
July 15, 2022 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
October 17, 2022 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 | ||||||||
January 17, 2023 | $ | 0.476563 | $ | 0.531250 | $ | 0.546875 | $ | 0.554688 |
Year Ended December 31, | ||||||||||||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | Total | |||||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||||||||||
Common Stock dividends paid | $ | 20.9 | $ | 27.4 | $ | 34.3 | $ | 40.2 | $ | 88.4 | $ | 211.2 | ||||||||||||
Common Stock dividends paid in shares under the Dividend Reinvestment Plan | 23.1 | 18.5 | 13.8 | 12.6 | 30.3 | 98.3 | ||||||||||||||||||
Preferred Stock dividends paid | 28.3 | 31.3 | 31.2 | 31.1 | 31.1 | 153.0 | ||||||||||||||||||
Total | $ | 72.3 | $ | 77.2 | $ | 79.3 | $ | 83.9 | $ | 149.8 | $ | 462.5 |
ITEM 9. | THE OFFER AND LISTING |
ITEM 10. | ADDITIONAL INFORMATION |
Common Stock
• | the designation of the series; |
• | the number of shares of the series; |
• | the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and |
• | the voting rights, if any, of the holders of the series. |
• | 10 days following the first public announcement that a person or group of affiliated or associated persons or an “acquiring person” has acquired or obtained the right to acquire beneficial ownership of 15% or more of our outstanding common stock; or |
• | 10 business days following the start of a tender or exchange offer that would result, if closed, in a person becoming an “acquiring person”. |
• | our common stock certificates will evidence the rights, and the rights will be transferable only with those certificates; and |
• | any new shares of common stock will be issued with rights, and new certificates will contain a notation incorporating the rights agreement by reference. |
• | we are acquired in a merger or other business combination transaction; or |
• | 50% or more of our assets, cash flows or earning power is sold or transferred. |
• | any person other than our existing stockholder becoming the beneficial owner of common stock with voting power equal to 50% or more of the total voting power of all shares of common stock entitled to vote in the election of directors; or |
• | the occurrence of a flip-over event. |
• | to cure any ambiguity, omission, defect or inconsistency; |
• | to make changes that do not adversely affect the interests of holders of rights, excluding the interests of any acquiring person; or |
• | to shorten or lengthen any time period under the rights agreement, except that we cannot change the time period when rights may be redeemed or lengthen any time period, unless such lengthening protects, enhances or clarifies the benefits of holders of rights other than an acquiring person. |
(a) | Restrictive Covenant Agreement dated November 3, 2010, as amended and restated on July 1, 2021 between Costamare Inc. and Konstantinos Konstantakopoulos, please see “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions—Restrictive Covenant Agreements”. |
(b) | Stockholder Rights Agreement dated October 19, 2010, between Costamare Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent. For a description of the Stockholder Rights Agreement, please see “Item 10. Additional Information—B. Memorandum and Articles of Association—Stockholder Rights Plan”. |
(c) | Trademark License Agreement dated November 3, 2010 as amended and restated on March 14, 2022 between Costamare Inc. and Costamare Shipping Company S.A., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Trademark License Agreement”. |
(d) | Restrictive Covenant Agreement dated July 24, 2012, between Costamare Inc. and Konstantinos Zacharatos, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Restrictive Covenant Agreements”. |
(e) | Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015, between Sparrow Holdings, L.P., York Capital Management Global Advisors LLC, Costamare Inc. and Costamare Ventures Inc., please see “Item 4. Information on the Company—B. Business Overview—Our Fleet—Framework Deed”. |
(f) | Services Agreement dated November 2, 2015, as amended and restated on June 28, 2021, by and between the subsidiaries of Costamare Inc. set out in Schedule A thereto and Costamare Shipping Services Ltd., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreement”. |
(g) | Amended and Restated Registration Rights Agreement dated as of November 27, 2015, between Costamare Inc. and the Stockholders named therein, please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Registration Rights Agreement”. |
(h) | Agreement Regarding Charter Brokerage dated January 1, 2018, by and between Costamare Shipping Company S.A. and Blue Net Chartering GmbH & Co. KG., please see “Item 4. Information on the Company—B. Business Overview—Chartering of Our Fleet”. |
(i) | Framework Agreement dated November 2, 2015, as amended and restated on January 17, 2020, and as further amended and restated on June 28, 2021, by and between Costamare Inc. and Costamare Shipping Company S.A., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management and Services Agreement”. |
(j) | Longshaw Agreement dated June 14, 2021, by and between Costamare Inc. and Longshaw Maritime Investments S.A., please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Longshaw Share Purchase Agreement”. |
(k) | Amended and Restated Subscription and Shareholders’ Agreement Relating to Neptune Maritime Leasing Limited dated March 14, 2023, by and among Snow White Investments Limited, International Maritime Holdings A.G., Codrus Capital A.G., Stephen Asplin, Konstantinos Karamanis, Costamare Maritime Finance Limited and Neptune Maritime Leasing Limited, please see “Item 4. Information on the Company—A. History and Development of the Company”. |
Marshall Islands | Delaware | |
Shareholder Meetings | ||
Held at a time and place as designated in the bylaws. | May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the Board of Directors. | |
May be held in or outside of the Marshall Islands. | May be held in or outside of Delaware. | |
Whenever shareholders are required to take action at a meeting, written notice shall state the place, date and hour of the meeting, and unless it is the annual meeting, indicates that it is being issued by or at the direction of the person calling the meeting, and if such meeting is a special meeting such notice shall also state the purpose for which it is being called. | Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any. | |
A copy of the notice of any meeting shall be given personally, sent by mail or by electronic transmission not less than 15 nor more than 60 days before the date of the meeting. | Written notice shall be given not less than 10 nor more than 60 days before the meeting. | |
Shareholder’s Voting Rights | ||
Any action required to be taken by a meeting of shareholders may be taken without a meeting if consent is in writing, sets forth the action so taken and is signed by all the shareholders entitled to vote or if the articles of incorporation so provide, by holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. | With limited exceptions, shareholders may act by written consent to elect directors. | |
Any person authorized to vote may authorize another person to act for him or her by proxy. | Any person authorized to vote may authorize another person or persons to act for him or her by proxy. | |
Unless otherwise provided in the articles of incorporation or bylaws, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one-third of the shares entitled to vote at a meeting. | For stock corporations, the certificate of incorporation or bylaws may specify the number to constitute a quorum, but in no event shall a quorum consist of less than one third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum. |
Marshall Islands | Delaware | |
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders. | When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders. | |
The articles of incorporation may provide for cumulative voting in the election of directors. | The certificate of incorporation may provide for cumulative voting. | |
Any two or more domestic corporations may merge into a single corporation if approved by the board and if authorized by the vote of the majority of holders of outstanding shares entitled to vote at a shareholder meeting. | Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by shareholders of each constituent corporation at an annual or special meeting. | |
Any sale, lease, exchange or other disposition of all or substantially all the assets of a corporation, if not made in the corporation’s usual or regular course of business, once approved by the board, shall be authorized by the affirmative vote of two-thirds of the shares of those entitled to vote at a shareholder meeting. | Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when so authorized by a resolution adopted by the holders of a majority of the outstanding stock of a corporation entitled to vote. | |
Any domestic corporation owning at least 90% of the outstanding shares of each class of another domestic corporation may merge such other corporation into itself without the authorization of the shareholders of any corporation. | Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent of shareholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called shareholder meeting. | |
Any mortgage, pledge of or creation of a security interest in all or any part of the corporate property may be authorized without the vote or consent of the shareholders, unless otherwise provided for in the articles of incorporation. | Any mortgage or pledge of a corporation’s property and assets may be authorized without the vote or consent of shareholders, except to the extent that the certificate of incorporation otherwise provides. |
Directors | ||
The board of directors must consist of at least one member. | The board of directors must consist of at least one member. | |
Number of members can be changed by an amendment to the bylaws, by the shareholders, or by action of the board pursuant to the bylaws. | Number of board members shall be fixed by the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by amendment of the certificate of incorporation. | |
If the board of directors is authorized to change the number of directors, it can only do so by a majority of the entire board and so long as no decrease in the number shall shorten the term of any incumbent director. |
Marshall Islands | Delaware | |
Removal: | Removal: | |
• Any or all of the directors may be removed for cause by vote of the shareholders. | • Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides. | |
• If the articles of incorporation or the bylaws so provide, any or all of the directors may be removed without cause by vote of the shareholders | • In the case of a classified board, shareholders may effect removal of any or all directors only for cause. | |
Dissenter’s Rights of Appraisal | ||
With limited exceptions, appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation. | With limited exceptions, appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation. | |
A holder of any adversely affected shares who does not vote on, or consent in writing to, an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the amendment | The certificate of incorporation may provide that appraisal rights are available for shares as a result of an amendment to the certificate of incorporation, any merger or consolidation or the sale of all or substantially all of the assets. | |
• alters or abolishes any preferential right of any outstanding shares having preference; | ||
• creates, alters, or abolishes any provision or right in respect to the redemption of any outstanding shares; | ||
• alters or abolishes any preemptive right of such holder to acquire shares or other securities; or | ||
• excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being authorized of any existing or new class. |
Shareholder’s Derivative Actions | ||
An action may be brought in the right of a corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates or of a beneficial interest in such shares or certificates. It shall be made to appear that the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by operation of law. | In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or that such shareholder’s stock thereafter devolved upon such shareholder by operation of law. |
Marshall Islands | Delaware | |
Complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board of directors or the reasons for not making such effort. | ||
Such action shall not be discontinued, compromised or settled, without the approval of the High Court of the Marshall Islands | ||
Reasonable expenses, including attorneys’ fees, may be awarded if the action is successful | ||
Corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of stock and the shares have a value of less than $50,000. |
(a) | the use of vessels; |
(b) | the hiring or leasing of vessels for use on a time, operating or bareboat charter basis; |
(c) | the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income; or |
(d) | the performance of services directly related to those uses. |
(a) | it is organized in a foreign country (or the “country of organization”) that grants an “equivalent exemption” to U.S. corporations; and |
(b) | either |
(i) | more than 50% of the value of its stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to U.S. corporations; or |
(ii) | its stock is “primarily and regularly traded on an established securities market” in its country of organization, in another country that grants an “equivalent exemption” to U.S. corporations, or in the United States. |
(a) | we had, or were considered to have, a fixed place of business in the United States involved in the earning of U.S. source gross transportation income; and |
(b) | substantially all of our U.S. source gross transportation income was attributable to regularly scheduled transportation, such as the operation of a vessel that followed a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
(a) | the common stock or Preferred Stock, as the case may be, is readily tradable on an established securities market in the United States (such as the NYSE); |
(b) | we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (see the discussion below under “PFIC Status”); |
(c) | you own our common stock or our Preferred Stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock or Preferred Stock becomes ex-dividend; |
(d) | you are not under an obligation to make related payments with respect to positions in substantially similar or related property; and |
(e) | certain other conditions are met. |
(a) | at least 75% of our gross income for such taxable year consists of “passive income” (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
(b) | at least 50% of the average value of our assets during such taxable year consists of “passive assets” (i.e., assets that produce, or are held for the production of, passive income). |
(i) | the excess distribution or gain would be allocated ratably over your aggregate holding period for our common stock or Preferred Stock; |
(ii) | the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to such U.S. holder who does not make a QEF or a “mark-to-market” election would be taxed as ordinary income; and |
(iii) | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
(a) | the gain is effectively connected with your conduct of a trade or business in the United States. If you are entitled to the benefits of an applicable income tax treaty with respect to that gain, that gain generally is taxable in the United States only if it is attributable to a permanent establishment maintained by you in the United States as required by such income tax treaty; or |
(b) | you are an individual who is present in the United States for 183 days or more during the taxable year of disposition and certain other conditions are met. |
(1) | fail to provide us with an accurate taxpayer identification number; |
(2) | are notified by the IRS that you have failed to report all interest or dividends required to be shown on your Federal income tax returns; or |
(3) | in certain circumstances, fail to comply with applicable certification requirements. |
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Year | Amount | ||
2023 | 8.0 | ||
2024 | 6.4 | ||
2025 | 4.8 | ||
2026 | 3.5 | ||
2027 | 2.3 |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
ITEM 16.A. | AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16.B. | CODE OF ETHICS |
ITEM 16.C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2022 | 2021 | |||||||
Audit fees | € | 660,000 | € | 527,000 | ||||
Audit-related fees | € | 207,000 | € | 329,000 | ||||
Tax fees | € | 12,660 | € | 8,906 | ||||
All other fees | € | 8,270 | € | — | ||||
Total fees | € | 887,930 | € | 864,906 |
ITEM 16.D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16.E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
Period | Total Number of Common Shares Purchased | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs | ||||
January 2022 | ||||||||
February 2022 | 248,899(1) | |||||||
March 2022 | 74,800(2) | |||||||
April 2022 | ||||||||
May 2022 | 1,282,993(1) | |||||||
June 2022 | 216,390 74,800(2) | 11.90 | ||||||
July 2022 | 417,418 | 10.87 | ||||||
August 2022 | 298,941(1) 100,000 | 11.54 | ||||||
September 2022 | 738,187 74,800(2) | 9.57 | ||||||
October 2022 | 321,090 | 8.92 | ||||||
November 2022 | 388,327(1) | |||||||
December 2022 | 74,800(2) | |||||||
Total | 4,311,445 |
(1) | These shares were issued by the Company pursuant to the Dividend Reinvestment Plan. |
(2) | These shares were issued to Costamare Services by the Company pursuant to the Services Agreement in exchange for services provided to the Company’s vessel-owning subsidiaries. |
Period | Total Number of Common Shares Purchased | Average Price Paid per Share ($)(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||
January 2022 | ||||||||
February 2022 | ||||||||
March 2022 | ||||||||
April 2022 | ||||||||
May 2022 | 13.59 | 1,553,472 | 128,890,486 | |||||
June 2022 | 12.27 | 2,987,737 | 92,222,784 | |||||
July 2022 | 11.85 | 195,493 | 89,905,273 | |||||
August 2022 | ||||||||
September 2022 | ||||||||
October 2022 | ||||||||
November 2022 | ||||||||
December 2022 | ||||||||
Total | 12.69 | 4,736,702 | 89,905,273 |
(1) | The average price paid per share includes commissions paid for each transaction. |
ITEM 16.F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16.G. | CORPORATE GOVERNANCE |
ITEM 16.H. | MINE SAFETY DISCLOSURE |
ITEM 17. | FINANCIAL STATEMENTS |
ITEM 18. | FINANCIAL STATEMENTS |
ITEM 19. | EXHIBITS |
Exhibit No. | Description | |
Second Amended and Restated Articles of Incorporation(1) | ||
First Amended and Restated Bylaws(1) | ||
Description of Securities | ||
Restrictive Covenant Agreement dated November 3, 2010, as amended and restated on July 1, 2021 between Costamare Inc. and Konstantinos Konstantakopoulos(5) | ||
Form of Stockholders Rights Agreement between Costamare Inc. and American Stock Transfer & Trust Company, LLC(2) | ||
Trademark License Agreement dated November 3, 2010, as amended and restated on March 14, 2022, between Costamare Inc. and Costamare Shipping Company S.A.(7) | ||
Form of Restrictive Covenant Agreement between Costamare Inc. and Konstantinos Zacharatos(2) | ||
Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015, between Sparrow Holdings, L.P., York Capital Management Global Advisors LLC, Costamare Inc. and Costamare Ventures Inc.(3) | ||
Services Agreement dated November 2, 2015, as amended and restated on June 28, 2021 by and between the subsidiaries of Costamare Inc. set out in Schedule A thereto and Costamare Shipping Services Ltd.(6) | ||
Amended and Restated Registration Rights Agreement dated as of November 27, 2015 between Costamare Inc. and the Stockholders named therein(3) | ||
Agreement Regarding Charter Brokerage dated January 1, 2018, by and between Costamare Shipping Company S.A. and Blue Net Chartering GmbH & Co. KG(4) | ||
Framework Agreement dated November 2, 2015, as amended and restated on January 17, 2020, and as further amended and restated on June 28, 2021 by and between Costamare Inc. and Costamare Shipping Company S.A.(5) | ||
Longshaw Agreement dated June 14, 2021, by and between Costamare Inc. and Longshaw Maritime Investments S.A. (7)* | ||
Local Service Agreement dated November 14, 2022, between Costamare Bulkers Inc. and Costamare Bulkers Services GmbH (8) | ||
Local Service Agreement dated November 14, 2022, between Costamare Bulkers Inc. and Costamare Bulkers Services ApS (8) | ||
Local Service Agreement dated November 14, 2022, between Costamare Bulkers Inc. and Costamare Bulkers Services Pte. Ltd. (8) | ||
Amended and Restated Subscription and Shareholders’ Agreement Relating to Neptune Maritime Leasing Limited dated March 14, 2023, by and among Snow White Investments Limited, International Maritime Holdings A.G., Codrus Capital A.G., Stephen Asplin, Konstantinos Karamanis, Costamare Maritime Finance Limited and Neptune Maritime Leasing Limited | ||
Amended and Restated Management Services Agreement dated March 14, 2023, among Neptune Maritime Leasing Limited and Neptune Global Financing Limited | ||
List of Subsidiaries of Costamare Inc. | ||
Rule 13a-14(a)/15d-14(a) Certification of Costamare Inc.’s Chief Executive Officer | ||
Rule 13a-14(a)/15d-14(a) Certification of Costamare Inc.’s Chief Financial Officer | ||
Costamare Inc. Certification of Konstantinos Konstantakopoulos, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 |
Costamare Inc. Certification of Gregory Zikos, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 | ||
Consent of Independent Registered Public Accounting Firm | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
(1) | Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on March 1, 2013 and hereby incorporated by reference to such Annual Report. |
(2) | Previously filed as an exhibit to Costamare Inc.’s Registration Statement on Form F-1 (File No. 333-170033), declared effective by the SEC on November 3, 2010 and hereby incorporated by reference to such Registration Statement. |
(3) | Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC on April 27, 2016 and hereby incorporated by reference to such Annual Report. |
(4) | Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2018, filed with the SEC on March 7, 2019 and hereby incorporated by reference to such Annual Report. |
(5) | Previously filed as an exhibit to Costamare Inc.’s Report on Form 6-K, filed with the SEC on August 10, 2021 and hereby incorporated by reference to such Form 6-K. |
(6) | Previously filed as an exhibit to Costamare Inc.’s Report on Form 6-K, filed with the SEC on August 24, 2021 and hereby incorporated by reference to such Form 6-K. |
(7) | Previously filed as an exhibit to Costamare Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022 and hereby incorporated by reference to such Annual Report. |
(8) | Previously filed as an exhibit to Costamare Inc.’s Report on Form 6-K, filed with the SEC on November 30, 2022 and hereby incorporated by reference to such Form 6-K. |
* | Certain portions of this exhibit have been redacted pursuant to Instruction 4(a) as to Exhibits of Form 20-F. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC or its Staff upon request. |
COSTAMARE INC., | |||
By | /s/ Konstantinos Konstantakopoulos | ||
Name: | Konstantinos Konstantakopoulos | ||
Title: | Chief Executive Officer |
Report of Independent Registered Public Accounting Firm (PCAOB Firm ID #1457) | F-2 |
Report of Independent Registered Public Accounting Firm | F-4 |
Consolidated Balance Sheets As of December 31, 2021 and 2022 | F-5 |
Consolidated Statements of Operations For The Years Ended December 31, 2020, 2021, and 2022 | F-6 |
Consolidated Statements of Comprehensive Income For The Years Ended December 31, 2020, 2021 and 2022 | F-7 |
Consolidated Statements of Stockholders’ Equity For the years ended December 31, 2020, 2021 and 2022 | F-8 |
Consolidated Statements of Cash Flows December 31, 2020, 2021 And 2022 | F-9 |
Notes to Consolidated Financial Statements | F-10 |
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Costamare Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Costamare Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 3, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment of vessels | ||
Description of the Matter | At December 31, 2022, the carrying value of the Company’s vessels was $3,666,861 thousand. As discussed in Notes 2, 7 and 21(c) to the consolidated financial statements, the Company evaluates its vessels for impairment whenever events or changes in circumstances indicate that the carrying value of a vessel might exceed its fair value in accordance with the guidance in ASC 360 – Property, Plant and Equipment. As part of the assessment performed, management analyzes the future undiscounted net operating cash flows expected to be generated throughout the remaining useful life of each vessel and compares it to the carrying value to conclude whether indicators of impairment exist. Where the vessel’s carrying value exceeds the undiscounted net operating cash flows, management recognizes impairment loss equal to the excess of the carrying value over the fair value of the vessel.
Auditing management’s recoverability assessment was complex given the judgement and estimation uncertainty involved in determining the assumption of the future charter rates for non-contracted revenue days, when forecasting net operating cash flows. These rates are particularly subjective as they involve the development and use of assumptions about shipping market through the end of the useful lives of the vessels which are forward looking and subject to the inherent unpredictability of future global economic and market conditions. |
How We Addressed the Matter in Our Audit | We obtained an understanding of the Company’s impairment process, evaluated the design, and tested the operating effectiveness of the controls over the Company’s determination of future charter rates for non-contracted revenue days.
We analyzed management’s impairment assessment by comparing the methodology used to evaluate impairment of each vessel against the accounting guidance in ASC 360. To test management’s undiscounted net operating cash flow forecasts, our procedures included, among others, comparing the future vessel charter rates used by management for non-contracted revenue days, with historical market data from external analysts, historical data for vessels, and recent economic and industry changes. In addition, we performed sensitivity analyses to assess the impact of changes to future charter rates for non-contracted revenue days in the determination of the net operating cash flows. We assessed the adequacy of the Company’s disclosures in Notes 2, 7 and 21(c) to the consolidated financial statements. | |
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
We have served as the Company’s auditor since 2009.
Athens, Greece
April 3, 2023
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Costamare Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Costamare Inc.’s internal control over financial reporting as of December 31, 2022 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Costamare Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Costamare Inc. as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated April 3, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.
Athens, Greece
April 3, 2023
Consolidated Balance Sheets
As of December 31, 2021 and 2022
(Expressed in thousands of U.S. dollars)
December 31, 2021 | December 31, 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents (Note 2(e)) | $ | 276,002 | $ | 718,049 | ||||
Restricted cash (Note 2(e)) | 8,856 | 9,768 | ||||||
Accounts receivable, net (Note 3) | 20,978 | 26,943 | ||||||
Inventories (Note 6) | 21,365 | 28,039 | ||||||
Due from related parties (Note 3) | - | 3,838 | ||||||
Fair value of derivatives (Notes 20 and 21) | - | 25,660 | ||||||
Insurance claims receivable | 3,970 | 5,410 | ||||||
Time charter assumed (Note 13) | 198 | 199 | ||||||
Accrued charter revenue (Note 13) | 7,361 | 10,885 | ||||||
Short-term investments (Note 5) | - | 120,014 | ||||||
Prepayments and other assets | 8,595 | 10,622 | ||||||
Vessels held for sale (Note 7) | 78,799 | 55,195 | ||||||
Total current assets | 426,124 | 1,014,622 | ||||||
FIXED ASSETS, NET: | ||||||||
Right-of-use assets (Note 12) | 191,303 | - | ||||||
Vessels and advances, net (Note 7) | 3,650,192 | 3,666,861 | ||||||
Total fixed assets, net | 3,841,495 | 3,666,861 | ||||||
OTHER NON-CURRENT ASSETS: | ||||||||
Equity method investments (Note 10) | 19,872 | 20,971 | ||||||
Accounts receivable, net, non-current (Note 3) | 5,076 | 5,261 | ||||||
Deferred charges, net (Note 8) | 31,859 | 55,035 | ||||||
Restricted cash, non-current (Note 2(e)) | 68,670 | 83,741 | ||||||
Time charter assumed, non-current (Note 13) | 667 | 468 | ||||||
Accrued charter revenue, non-current (Note 13) | 8,183 | 11,627 | ||||||
Fair value of derivatives, non-current (Notes 20 and 21) | 3,429 | 37,643 | ||||||
Other non-current assets (Note 5) | 1,666 | - | ||||||
Total assets | $ | 4,407,041 | $ | 4,896,229 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Current portion of long-term debt, net of deferred financing costs (Note 11) | $ | 272,365 | $ | 320,114 | ||||
Accounts payable | 18,865 | 18,155 | ||||||
Due to related parties (Note 3) | 1,694 | 2,332 | ||||||
Finance lease liabilities, net (Note 12) | 16,676 | - | ||||||
Accrued liabilities | 27,304 | 51,551 | ||||||
Unearned revenue (Note 13) | 23,830 | 25,227 | ||||||
Fair value of derivatives (Notes 20 and 21) | 6,876 | 2,255 | ||||||
Other current liabilities | 2,417 | 3,456 | ||||||
Total current liabilities | 370,027 | 423,090 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Long-term debt, net of current portion and deferred financing costs (Note 11) | 2,169,718 | 2,264,507 | ||||||
Finance lease liabilities, net of current portion (Note 12) | 99,689 | - | ||||||
Fair value of derivatives, non-current portion (Notes 20 and 21) | 7,841 | 13,655 | ||||||
Unearned revenue, net of current portion (Note 13) | 33,867 | 34,540 | ||||||
Total non-current liabilities | 2,311,115 | 2,312,702 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 14) | - | - | ||||||
Temporary equity – Redeemable non-controlling interest in subsidiary – (Note 15) | - | 3,487 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Preferred stock (Note 16) | - | - | ||||||
Common stock (Note 16) | 12 | 12 | ||||||
Treasury stock (Note 16) | - | (60,095 | ) | |||||
Additional paid-in capital (Note 16) | 1,386,636 | 1,423,954 | ||||||
Retained earnings | 341,482 | 746,658 | ||||||
Accumulated other comprehensive income / (loss) (Notes 20 and 22) | (2,231 | ) | 46,421 | |||||
Total stockholders’ equity | 1,725,899 | 2,156,950 | ||||||
Total liabilities and stockholders’ equity | $ | 4,407,041 | $ | 4,896,229 |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Operations
For the years ended December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data)
For the years ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
REVENUES: | ||||||||||||
Voyage revenue | $ | 460,319 | $ | 793,639 | $ | 1,113,859 | ||||||
EXPENSES: | ||||||||||||
Voyage expenses | (7,372 | ) | (13,311 | ) | (49,069 | ) | ||||||
Voyage expenses-related parties (Note 3) | (6,516 | ) | (11,089 | ) | (15,418 | ) | ||||||
Vessels’ operating expenses | (117,054 | ) | (179,981 | ) | (269,231 | ) | ||||||
General and administrative expenses | (4,103 | ) | (6,872 | ) | (9,737 | ) | ||||||
General and administrative expenses – related parties (Note 3) | (6,912 | ) | (9,947 | ) | (9,792 | ) | ||||||
Management and agency fees-related parties (Note 3) | (21,616 | ) | (29,621 | ) | (46,735 | ) | ||||||
Amortization of dry-docking and special survey costs (Note 8) | (9,056 | ) | (10,433 | ) | (13,486 | ) | ||||||
Depreciation (Notes 7, 12 and 22) | (108,700 | ) | (136,958 | ) | (165,998 | ) | ||||||
Gain / (loss) on sale of vessels, net (Note 7) | (79,120 | ) | 45,894 | 126,336 | ||||||||
Loss on vessels held for sale (Note 7) | (7,665 | ) | - | - | ||||||||
Vessels’ impairment loss (Notes 7 and 8) | (31,577 | ) | - | (1,691 | ) | |||||||
Foreign exchange gains / (losses) | (300 | ) | 29 | 3,208 | ||||||||
Operating income | 60,328 | 441,350 | 662,246 | |||||||||
OTHER INCOME / (EXPENSES): | ||||||||||||
Interest income | 1,827 | 1,587 | 5,956 | |||||||||
Interest and finance costs (Note 18) | (68,702 | ) | (86,047 | ) | (122,233 | ) | ||||||
Swaps breakage cost, net (Note 20) | (6 | ) | - | - | ||||||||
Income from equity method investments (Note 10) | 16,195 | 12,859 | 2,296 | |||||||||
Gain on sale of equity securities (Note 5) | - | 60,161 | - | |||||||||
Dividend income (Note 5) | - | 1,833 | - | |||||||||
Other, net | 1,181 | 4,624 | 3,729 | |||||||||
Gain / (loss) on derivative instruments, net (Note 20) | (1,946 | ) | (1,246 | ) | 2,698 | |||||||
Total other expenses, net | (51,451 | ) | (6,229 | ) | (107,554 | ) | ||||||
Net income | $ | 8,877 | $ | 435,121 | $ | 554,692 | ||||||
Net loss attributable to the non-controlling interest (Note 15) | - | - | 263 | |||||||||
Net income attributable to Costamare Inc. | $ | 8,877 | $ | 435,121 | $ | 554,955 | ||||||
Earnings allocated to Preferred Stock (Note 17) | (31,082 | ) | (31,068 | ) | (31,068 | ) | ||||||
Gain on retirement of Preferred Stock (Note 17) | 619 | - | - | |||||||||
Net income / (loss) available to Common Stockholders | $ | (21,586 | ) | $ | 404,053 | $ | 523,887 | |||||
Earnings / (losses) per common share, basic and diluted (Note 17) | $ | (0.18 | ) | $ | 3.28 | $ | 4.26 | |||||
Weighted average number of shares, basic and diluted (Note 17) | 120,696,130 | 123,070,730 | 122,964,358 |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars)
For the years ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Net income for the year | $ | 8,877 | $ | 435,121 | $ | 554,692 | ||||||
Other comprehensive income: | ||||||||||||
Unrealized gain / (loss) on cash flow hedges, net (Notes 20 and 22) | (6,806 | ) | 6,799 | 46,435 | ||||||||
Reclassification of amount excluded from the interest rate caps assessment of effectiveness based on an amortization approach to Interest and finance costs | - | - | 1,286 | |||||||||
Effective portion of changes in fair value of cash flow hedges (Notes 20 and 22) | - | (1,136 | ) | 868 | ||||||||
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation (Note 22) | 63 | 63 | 63 | |||||||||
Other comprehensive income / (loss) for the year | $ | (6,743 | ) | $ | 5,726 | $ | 48,652 | |||||
Total comprehensive income for the year | 2,134 | 440,847 | 603,344 | |||||||||
Comprehensive loss attributable to the non-controlling interest (Note 15) | - | - | 263 | |||||||||
Total comprehensive income for the year attributable to Costamare Inc. | $ | 2,134 | $ | 440,847 | $ | 603,607 |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Stockholders’ Equity
For the years ended December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data)
Preferred Stock (Series E) | Preferred Stock (Series D) | Preferred Stock (Series C) | Preferred Stock (Series B) | Common Stock | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
# of shares | Par value | # of shares | Par value | # of shares | Par value | # of shares | Par value | # of shares | Par value | # of shares | Value | Additional Paid-in Capital | Accumulated Other Comprehensive Income / (Loss) | Retained Earnings/ (Accumulated Deficit) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, January 1, 2020 | 4,600,000 | $ | - | 4,000,000 | $ | - | 4,000,000 | $ | - | 2,000,000 | - | 119,132,696 | $ | 12 | - | $ | - | $ | 1,351,352 | $ | (1,214 | ) | $ | 60,578 | $ | 1,410,728 | ||||||||||||||||||||||||||||||||||||||
- Net income | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 8,877 | 8,877 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Adoption of new accounting policy (Note 5) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (543 | ) | (543 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Issuance of common stock (Notes 3 and 16) | - | - | - | - | - | - | - | - | 3,027,942 | - | - | - | 17,437 | - | - | 17,437 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Retirement of Preferred Stock (Note 16) | (25,900 | ) | - | (13,458 | ) | - | (26,865 | ) | - | (29,351 | ) | - | - | - | - | - | (2,303 | ) | - | 619 | (1,684 | ) | ||||||||||||||||||||||||||||||||||||||||||
- Dividends – Common stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (48,127 | ) | (48,127 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Dividends – Preferred stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (31,125 | ) | (31,125 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Other comprehensive loss | - | - | - | - | - | - | - | - | - | - | - | - | - | (6,743 | ) | - | (6,743 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, Balance 31, 2020 | 4,574,100 | $ | - | 3,986,542 | $ | - | 3,973,135 | $ | - | 1,970,649 | $ | - | 122,160,638 | $ | 12 | - | $ | - | $ | 1,366,486 | $ | (7,957 | ) | $ | (9,721 | ) | $ | 1,348,820 | ||||||||||||||||||||||||||||||||||||
- Net income | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 435,121 | 435,121 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Issuance of common stock (Notes 3 and 16) | - | - | - | - | - | - | - | - | 1,824,466 | - | - | - | 20,064 | - | - | 20,064 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Dividends – Common stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (52,850 | ) | (52,850 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Dividends – Preferred stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (31,068 | ) | (31,068 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Gain from common control transaction (Note 3) | - | - | - | - | - | - | - | - | - | - | - | - | 86 | - | - | 86 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Other comprehensive income | - | - | - | - | - | - | - | - | - | - | - | - | - | 5,726 | - | 5,726 | ||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, Balance 31, 2021 | 4,574,100 | $ | - | 3,986,542 | $ | - | 3,973,135 | $ | - | 1,970,649 | $ | - | 123,985,104 | $ | 12 | - | $ | - | $ | 1,386,636 | $ | (2,231 | ) | $ | 341,482 | $ | 1,725,899 | |||||||||||||||||||||||||||||||||||||
- Net income (1) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 554,955 | 554,955 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Issuance of common stock (Notes 3 and 16) | - | - | - | - | - | - | - | - | 3,053,309 | - | - | - | 37,318 | - | - | 37,318 | ||||||||||||||||||||||||||||||||||||||||||||||||
- Repurchase of common stock (Note 16) | - | - | - | - | - | - | - | - | - | - | (4,736,702 | ) | (60,095 | ) | - | - | - | (60,095 | ) | |||||||||||||||||||||||||||||||||||||||||||||
- Dividends – Common stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (118,711 | ) | (118,711 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Dividends – Preferred stock (Note 16) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (31,068 | ) | (31,068 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
- Other comprehensive income | - | - | - | - | - | - | - | - | - | - | - | - | - | 48,652 | - | 48,652 | ||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2022 | 4,574,100 | $ | - | 3,986,542 | $ | - | 3,973,135 | $ | - | 1,970,649 | $ | - | 127,038,413 | $ | 12 | (4,736,702 | ) | $ | (60,095 | ) | $ | 1,423,954 | $ | 46,421 | $ | 746,658 | $ | 2,156,950 |
(1) | Net income excludes net loss attributable to non-controlling interest of $263 during the year ended December 31, 2022. Temporary equity - non-controlling interest in subsidiary is reflected outside of the permanent stockholders’ equity on the 2022 consolidated balance sheet. See Note 15 of the Notes to the Consolidated Financial Statements. |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
For the years ended December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars)
For the years ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Cash Flows From Operating Activities: | ||||||||||||
Net income: | $ | 8,877 | $ | 435,121 | $ | 554,692 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation | 108,700 | 136,958 | 165,998 | |||||||||
Credit loss provision | 26 | (324 | ) | - | ||||||||
Amortization of debt discount | (933 | ) | (1,280 | ) | - | |||||||
Amortization and write-off of financing costs | 3,645 | 6,704 | 10,255 | |||||||||
Amortization of deferred dry-docking and special survey costs | 9,056 | 10,433 | 13,486 | |||||||||
Amortization of assumed time charter | 192 | (424 | ) | 198 | ||||||||
Amortization of hedge effectiveness excluded component from cash flow hedges | - | - | 1,286 | |||||||||
Equity based payments | 3,655 | 7,414 | 7,089 | |||||||||
Increase in short-term investments | - | - | (1,296 | ) | ||||||||
Gain on sale of equity securities | - | (60,161 | ) | - | ||||||||
(Gain) / loss on derivative instruments, net | 1,759 | 1,246 | (2,698 | ) | ||||||||
(Gain) / loss on sale of vessels, net | 79,120 | (45,894 | ) | (126,336 | ) | |||||||
Loss on vessels held for sale | 7,665 | - | - | |||||||||
Vessels’ impairment loss | 31,577 | - | 1,691 | |||||||||
Income from equity method investments | (16,195 | ) | (12,859 | ) | (2,296 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 3,852 | (12,828 | ) | (6,150 | ) | |||||||
Due from related parties | 5,953 | 3,549 | (3,838 | ) | ||||||||
Inventories | 91 | (9,917 | ) | (6,674 | ) | |||||||
Insurance claims receivable | (1,504 | ) | (4,102 | ) | (4,209 | ) | ||||||
Prepayments and other | (853 | ) | 3,133 | (361 | ) | |||||||
Accounts payable | 1,367 | 9,639 | (710 | ) | ||||||||
Due to related parties | (41 | ) | 1,261 | 638 | ||||||||
Accrued liabilities | 3,619 | 11,892 | 21,903 | |||||||||
Unearned revenue | 1,950 | 11,347 | (2,267 | ) | ||||||||
Other current liabilities | 284 | (599 | ) | 1,039 | ||||||||
Dividend from equity method investees | 16,653 | 6,370 | 1,114 | |||||||||
Dry-dockings | (15,481 | ) | (18,882 | ) | (38,330 | ) | ||||||
Accrued charter revenue | 21,250 | (11,303 | ) | (2,631 | ) | |||||||
Net Cash provided by Operating Activities | 274,284 | 466,494 | 581,593 | |||||||||
Cash Flows From Investing Activities: | ||||||||||||
Return of capital from equity method investments | 32,996 | 8,820 | 14 | |||||||||
Payments to acquire short-term investments | - | - | (178,718 | ) | ||||||||
Settlements of short-term investments | - | - | 60,000 | |||||||||
Debt securities capital redemption | - | 8,183 | - | |||||||||
Proceeds from the settlement of insurance claims | 2,228 | 1,035 | 2,769 | |||||||||
Proceeds from sale of equity securities | - | 63,963 | - | |||||||||
Vessel acquisition and advances/Additions to vessel cost | (101,917 | ) | (992,093 | ) | (61,895 | ) | ||||||
Proceeds from the sale of vessels, net | 30,296 | 122,636 | 220,318 | |||||||||
Net Cash provided by / (used in) in Investing Activities | (36,397 | ) | (787,456 | ) | 42,488 | |||||||
Cash Flows From Financing Activities: | ||||||||||||
Proceeds from long-term debt and finance leases | 285,903 | 1,225,397 | 1,014,284 | |||||||||
Repayment of long-term debt and finance leases | (451,038 | ) | (655,400 | ) | (984,313 | ) | ||||||
Payment of financing costs | (7,478 | ) | (16,140 | ) | (20,129 | ) | ||||||
Swap termination | (2,095 | ) | - | - | ||||||||
Retirement of preferred stock | (1,684 | ) | - | - | ||||||||
Repurchase of common stock | - | - | (60,095 | ) | ||||||||
Dividends paid | (65,470 | ) | (71,263 | ) | (119,548 | ) | ||||||
Proceeds from issuance of common stock in subsidiary | - | - | 3,750 | |||||||||
Net Cash provided by / (used in) Financing Activities | (241,862 | ) | 482,594 | (166,051 | ) | |||||||
Net increase / (decrease) in cash, cash equivalents and restricted cash | (3,975 | ) | 161,632 | 458,030 | ||||||||
Cash, cash equivalents and restricted cash at beginning of the year | 195,871 | 191,896 | 353,528 | |||||||||
Cash, cash equivalents and restricted cash at end of the year | $ | 191,896 | $ | 353,528 | $ | 811,558 | ||||||
Supplemental Cash Information: | ||||||||||||
Cash paid during the year for interest, net of capitalized interest | $ | 63,725 | $ | 71,813 | $ | 100,699 | ||||||
Non-Cash Investing and Financing Activities: | ||||||||||||
Dividend reinvested in common stock of the Company | $ | 13,783 | $ | 12,655 | $ | 30,231 |
The accompanying notes are an integral part of these consolidated financial statements.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
1. Basis of Presentation and General Information:
The accompanying consolidated financial statements include the accounts of Costamare Inc. (“Costamare”) and its wholly-owned and majority-owned subsidiaries (collectively, the “Company”). Costamare is organized under the laws of the Republic of the Marshall Islands.
On November 4, 2010, Costamare completed its initial public offering (“Initial Public Offering”) in the United States under the United States Securities Act of 1933, as amended (the “Securities Act”). During the year ended December 31, 2022, the Company issued 598,400 shares to Costamare Shipping Services Ltd. (“Costamare Services”) (Note 3). On July 6, 2016, the Company implemented a dividend reinvestment plan (the “Plan”) (Note 16). As of December 31, 2022, under the Plan, the Company has issued to its common stockholders 19,068,198 shares, in aggregate. As of December 31, 2022, the aggregate outstanding share capital was 122,301,711 common shares. As of December 31, 2022, members of the Konstantakopoulos Family owned, directly or indirectly, approximately 60.8% of the outstanding common shares, in the aggregate.
As of December 31, 2022, the Company owned and/or operated a fleet of 69 container vessels with a total carrying capacity of approximately 525,821 twenty-foot equivalent units (“TEU”) and 45 dry bulk vessels with a total carrying capacity of approximately 2,436,134 of dead-weight tonnage (“DWT”), through wholly owned subsidiaries. As of December 31, 2021, the Company owned and/or operated a fleet of 72 container vessels with a total carrying capacity of approximately 543,645 TEU and 43 dry bulk vessels with a total carrying capacity of approximately 2,320,750 of DWT, through wholly owned subsidiaries. The Company provides worldwide marine transportation services by chartering its container vessels to some of the world’s leading liner operators and since June 14, 2021, by chartering its dry bulk vessels to a diverse group of charterers (Note 3(d)). During the year ended December 31, 2022, a new dry bulk operating platform was established and operates under Costamare Bulkers Inc. (“CBI”), a majority-owned subsidiary of Costamare organized in the Republic of the Marshall Islands (Note 15). CBI is chartering-in and chartering-out dry bulk vessels, entering into contracts of affreightment, forward freight agreements (“FFAs”) and may also utilize hedging solutions.
At December 31, 2022, Costamare had 150 wholly-owned subsidiaries incorporated in the Republic of Liberia, 12 incorporated in the Republic of the Marshall Islands and three incorporated in the Republic of Cyprus. Furthermore, as of December 31, 2022, Costamare had one majority-owned subsidiary incorporated in the Republic of the Marshall Islands.
As the international container shipping industry recovered from the COVID-19 pandemic, time charter rates improved significantly from their sizable pandemic-related declines until the first half of 2022, due to the increased demand for containerized goods coupled with inefficiencies in the global supply chain caused by the pandemic. However, since the end of June 2022, time charter rates for containerships (across all sizes) have demonstrated significant declines of 75% on average, mainly driven by reduced growth in the transportation of containerized goods, inflation and the normalization of supply chains.
Similarly, the economic environment of the dry bulk segment has improved during the year of 2021 and in the first half of 2022 due to the increase in the demand for commodities. The ongoing geopolitical conflict between Russia and Ukraine has negatively impacted the export of dry bulk commodities from the Black Sea region, causing importing countries to look to other regions of the world for their import needs. The net effect on dry bulk shipping charter rates caused by the sourcing of dry bulk commodities from areas outside the Black Sea region is difficult to quantify since rates are dependent on a plethora of factors including the effect of diplomatic efforts such as the continuation of the multilateral agreement among Russia, Ukraine, Turkey and the United Nations to resume grain exports from the Black Sea region. The Black Sea conflict along with several geopolitical factors, such as the strict Covid-19 policy regime in China throughout most part of 2022, have resulted in charter rates weakening significantly during the fourth quarter of 2022 when compared to the third quarter of 2022.
The Russia-Ukraine conflict has also resulted in the imposition of sanctions that impact the international shipping industry. For example, our vessels may be required to make port calls in Russia that are not subject to primary sanctions but may, over time, expose us to secondary sanctions related to the maritime sector of the Russian economy.
The Company will continue to monitor the developments of the COVID-19 pandemic and of the Russia-Ukraine conflict along with their potential direct or indirect negative effects on the containership and dry bulk markets and will provide further updates on the situation if market circumstances warrant it.
2. Significant Accounting Policies and Recent Accounting Pronouncements:
(a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the accounts of Costamare and its wholly owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Costamare, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Accounting Standards Codification (“ASC”) 810 “Consolidation”, a voting interest entity is an entity in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make financial and operating decisions. Costamare consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%), of the voting interest. Variable interest entities (“VIE”) are entities as defined under ASC 810-10, that, in general, either do not have equity investors with voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. A controlling financial interest in a VIE is present when a company absorbs a majority of an entity’s expected losses, receives a majority of an entity’s expected residual returns, or both. The company with a controlling financial interest, known as the primary beneficiary, is required to consolidate the VIE. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it may be the primary beneficiary, and would be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. As of December 31, 2021 and 2022 no such interest existed.
(b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(c) Comprehensive Income / (Loss): In the statement of comprehensive income, the Company presents the change in equity (net assets) during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by shareholders and distributions to shareholders. The Company follows the provisions of ASC 220 “Comprehensive Income”, and presents items of net income, items of other comprehensive income (“OCI”) and total comprehensive income in two separate but consecutive statements. Reclassification adjustments between OCI and net income are required to be presented separately on the statement of comprehensive income.
(d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar because the Company’s vessels operate in international shipping markets and, therefore, primarily transact business in U.S. dollars. The Company’s books of accounts are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated into U.S. dollars at the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of operations.
(e) Cash, Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty.
Restricted cash consists of minimum cash deposits to be maintained at all times under certain of the Company’s loan agreements. Restricted cash also includes bank deposits and deposits in so-called “retention accounts” that are required under the Company’s borrowing arrangements which are used to fund the loan installments coming due. The funds can only be used for the purposes of loan repayment. A reconciliation of the cash, cash equivalents and restricted cash is presented in the table below:
For the years ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash | ||||||||||||
Cash and cash equivalents | $ | 143,922 | $ | 276,002 | $ | 718,049 | ||||||
Restricted cash – current portion | 4,998 | 8,856 | 9,768 | |||||||||
Restricted cash – non-current portion | 42,976 | 68,670 | 83,741 | |||||||||
Total cash, cash equivalents and restricted cash | $ | 191,896 | $ | 353,528 | $ | 811,558 |
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(f) Accounts Receivable, net: The amount shown as receivables, at each balance sheet date, mainly includes receivables from charterers for hire, net of any provision for doubtful accounts and accrued interest on these receivables, if any. Operating lease receivables under ASC 842 are not in scope of ASC 326. ASC 842 requires lessors to evaluate the collectability of all lease payments. If collection of all operating lease payments, plus any amount necessary to satisfy a residual value guarantee, is not probable (either at lease commencement or after the commencement date), lease income is constrained to the lesser of cash collected or lease income reflected on a straight-line or another systematic basis, plus variable rent when it becomes accruable. The provision established for doubtful accounts as of December 31, 2021 and 2022, was nil.
(g) Inventories: Inventories consist of bunkers, lubricants and spare parts which are stated at the lower of cost and net realizable value on a consistent basis. Cost is determined by the first in, first out method.
(h) Insurance Claims Receivable: The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, recovery is probable under the related insurance policies and the claim is not subject to litigation. The Company assessed the provisions of “ASC 326 Financial Instruments — Credit Losses” by assessing the counterparties’ credit worthiness and concluded that there is no material impact in the Company’s financial statements.
(i) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are charged to expense as incurred.
The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessel’s remaining estimated economic useful life, after considering the estimated residual value which is equal to the product of vessels’ lightweight tonnage and estimated scrap rate.
Management estimates the useful life of the Company’s container and dry bulk vessels to be 30 and 25 years, respectively, from the date of initial delivery from the shipyard and the estimated scrap rate used to calculate the vessels’ salvage value is $0.300 per lightweight ton for both container and dry bulk vessels. Secondhand container and dry bulk vessels are depreciated from the date of their acquisition through their remaining estimated useful life.
If the estimated economic lives assigned to the Company’s vessels prove to be too long because of unforeseen events such as an extended period of weak markets, the broad imposition of age restrictions by the Company’s customers’, new regulations, or other future events, the remaining estimated useful life of any affected vessel is adjusted accordingly.
(j) Time Charters Assumed with the Acquisition of Second-hand Vessels: The Company records identified assets or liabilities associated with the acquisition of a vessel at fair value, determined by reference to market data. The Company values any asset or liability arising from the market value of any time charters assumed when a vessel is acquired from entities that are not under common control. This policy does not apply when a vessel is acquired from entities that are under common control. The amount to be recorded as an asset or liability of the time charter assumed at the date of vessel delivery is based on the difference between the current fair market value of the time charter and the net present value of future contractual cash flows under the time charter. When the present value of the contractual cash flows of the time charter assumed is greater than its current fair value, the difference is recorded as accrued charter revenue. When the opposite situation occurs, any difference, capped to the vessel’s fair value on a charter free basis, is recorded as unearned revenue. Such assets and liabilities, respectively, are amortized as a reduction of, or an increase in, revenue over the period of the time charter assumed.
(k) Impairment of Long-lived Assets: The Company reviews its vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel might not be recoverable. The Company considers information, such as vessel sales and purchases, business plans and overall market conditions in order to determine if an impairment might exist.
As part of the identification of impairment indicators and Step 1 of impairment analysis the Company computes estimates of the future undiscounted net operating cash flows for each vessel based on assumptions regarding time charter rates, vessels’ operating expenses, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Container vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (based on the most recent ten year historical average rates after eliminating outliers and without adjustment for any growth rate) over the remaining estimated life of the vessel, assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of 2.5% over a five-year period, based on management’s estimates taking into consideration the Company’s historical data, (ii) planned dry-docking and special survey expenditures and (iii) management fees expenditures. Charter rates for container shipping vessels are cyclical and subject to significant volatility based on factors beyond Company’s control. Therefore, the Company considers the most recent ten-year historical average, after eliminating outliers, to be a reasonable estimation of expected future charter rates over the remaining useful life of the Company’s vessels. The Company defines outliers as index values provided by an independent, third-party maritime research services provider. Given the spread of rates between peaks and troughs over the decade, the Company believes the most recent ten-year historical average rates, after eliminating outliers, provide a fair estimate in determining a rate for long-term forecasts. The salvage value used in the impairment test is estimated at $0.300 per light weight ton in accordance with the container vessels’ depreciation policy.
Dry bulk vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (using the most recent ten- year average of historical one-year time charter rates available for each type of dry bulk vessel over the remaining estimated life of each vessel, net of commissions), assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of 2.5% over a five-year period, based on management’s estimates, (ii) planned dry-docking and special survey expenditures and (iii) management fees expenditures. Charter rates for dry bulk vessels are cyclical and subject to significant volatility based on factors beyond Company’s control. Therefore, the Company considers the most recent ten-year average of historical one-year time charter rates available for each type of dry bulk vessel, to be a reasonable estimation of expected future charter rates over the remaining useful life of its dry bulk vessels. The Company believes the most recent ten-year average of historical one-year time charter rates available for each type of dry bulk vessel provide a fair estimate in determining a rate for long-term forecasts. The salvage value used in the impairment test is estimated at $0.300 per light weight ton in accordance with the dry bulk vessels’ depreciation policy.
The assumptions used to develop estimates of future undiscounted net operating cash flows are based on historical trends as well as future expectations. If those future undiscounted net operating cash flows are greater than a vessel’s carrying value, there are no impairment indications for such vessel. If those future undiscounted net operating cash flows are less than a vessel’s carrying value, including unamortized dry-docking costs (Note 2(m)), the Company proceeds to Step 2 of the impairment analysis for such vessel.
In Step 2 of the impairment analysis, the Company determines the fair value of the vessels that failed Step 1 of the impairment analysis, based on management estimates and assumptions, making use of available market data and taking into consideration third party valuations. Therefore, the Company has categorized the fair value of the vessels as Level 2 in the fair value hierarchy. The difference between the carrying value of the vessels that failed Step 1 of the impairment analysis and their fair value as calculated in Step 2 of the impairment analysis is recognized in the Company’s accounts as impairment loss.
The review of the carrying amounts in connection with the estimated recoverable amount of the Company’s vessels as of December 31, 2022 resulted in an impairment loss of $1,691. As of December 31, 2020 and 2021, the Company concluded that $31,577 and nil, respectively, of impairment loss should be recorded.
(l) Long-lived Assets Classified as Held for Sale: The Company classifies long lived assets and disposal groups as being held for sale in accordance with ASC 360, Property, Plant and Equipment, when: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. According to ASC 360-10-35, the fair value less cost to sell of the long-lived asset (disposal group) should be assessed each reporting period it remains classified as held for sale. Subsequent changes in the long-lived asset's fair value less cost to sell (increase or decrease) would be reported as an adjustment to its carrying amount, except that the adjusted carrying amount should not exceed the carrying amount of the long-lived asset at the time it was initially classified as held for sale. These long-lived assets are not depreciated once they meet the criteria to be classified as held for sale and are classified in current assets on the consolidated balance sheet. As of December 31, 2022 and 2021, two container vessels and four container vessels were classified as Held for sale, respectively.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(m) Accounting for Special Survey and Dry-docking Costs: The Company follows the deferral method of accounting for special survey and dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the yard and parts used in the dry-docking or special survey. If a survey is performed prior to the scheduled date, the remaining unamortized balances are immediately written off. Unamortized balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of the vessel’s sale. Furthermore, unamortized dry-docking and special survey balances of vessels that are classified as Assets held for sale and are not recoverable as of the date of such classification are immediately written-off to the consolidated statement of operations.
(n) Financing Costs: Costs associated with new loans or refinancing of existing loans, including fees paid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as deferred charges. Deferred financing costs are presented as a deduction from the corresponding liability. Such fees are deferred and amortized to interest and finance costs during the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made.
(o) Concentration of Credit Risk: Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, net (included in current and non-current assets), equity method investments, and derivative contracts (interest rate swaps, interest rate caps, cross-currency rate swaps, foreign currency contracts, FFAs and bunkers swap agreements). The Company places its cash and cash equivalents, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by the counterparties to its derivative instruments; however, the Company limits its exposure by diversifying among counterparties with high credit ratings. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ and investees’ financial condition and receiving charter hires in advance, and therefore generally does not require collateral for its accounts receivable.
(p) Accounting for Revenues and Expenses: Revenues are primarily generated from time charter agreements. Time charter agreements contain a lease as they meet the criteria of a lease under ASC 842. All agreements contain a minimum non-cancellable period and an extension period at the option of the charterer. Each lease term is assessed at the inception of that lease. Under a time-charter agreement, the charterer pays a daily hire for the use of the vessel and reimburses the owner for hold cleanings, extra insurance premiums for navigating in restricted areas and damages caused by such charterer. Additionally, the charterer pays port and canal dues to third parties, as well as for bunkers consumed during the term of the time charter agreement. Such costs are considered direct costs for the charterers as they are directly paid by charterers, unless they are paid to the account of the owner, in which case they are included in voyage expenses. Additionally, the owner pays commissions on the daily hire, to both the charterer and the brokers, which are direct costs and are recorded in voyage expenses. Under a time-charter agreement, the owner provides services related to the operation and the maintenance of the vessel, including crew, spares and repairs, which are recognized in operating expenses. Time charter revenues are recognized over the term of the charter as service is provided, when they become fixed and determinable. Revenues from time charter agreements providing for varying annual rates are accounted for as operating leases and thus recognized on a straight-line basis over the non-cancellable rental periods of such agreements, as service is performed. Revenue generated from variable lease payments is recognized in the period when changes in the facts and circumstances on which the variable lease payments are based occur. Unearned revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met, including any unearned revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight-line basis. The Company, as lessor, has elected not to allocate the consideration in the agreement to the separate lease and non-lease components (operation and maintenance of the vessel), as their timing and pattern of transfer to the charterer, as the lessee, are the same and the lease component, if accounted for separately, would be classified as an operating lease. Additionally, the lease component is considered the predominant component as the Company has assessed that more value is ascribed to the lease of the vessel rather than to the services provided under the time charter contracts.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Revenues for 2020, 2021 and 2022 derived from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues) were as follows:
2020 | 2021 | 2022 | ||||||||||
A | 21 | % | 16 | % | 13 | % | ||||||
B | 20 | % | 20 | % | 18 | % | ||||||
C | 11 | % | 12 | % | 7 | % | ||||||
D | 29 | % | 12 | % | 8 | % | ||||||
E | 10 | % | 9 | % | 7 | % | ||||||
Total | 91 | % | 69 | % | 53 | % |
(q) Derivative Financial Instruments: The Company enters into interest rate swap contracts, cross-currency swap agreements and interest rate cap agreements with counterparties to manage its exposure to fluctuations of interest rate and foreign currencies risks associated with specific borrowings. Interest rate, differentials paid or received under these swap agreements are recognized as part of the interest expense related to the hedged debt. All derivatives are recognized in the consolidated financial statements at their fair value. On the inception date of the derivative contract, the Company designates the derivative as an accounting hedge of the variability of cash flow to be paid for a forecasted transaction (“cash flow” hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in the consolidated statement of comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in earnings in the period in which those fair value changes occur. Realized gains or losses on early termination of the undesignated derivative instruments are also classified in earnings in the period of termination of the respective derivative instrument. The Company may re-designate an undesignated hedge after its inception as a hedge but then will consider its non-zero value at re-designation in its assessment of effectiveness of the cash flow hedge.
The interest rate caps are accounted for as cash flow hedges when they are expected to be highly effective in hedging variable rate interest payments under certain term loans. Changes in the fair value of the interest rate caps are reported within accumulated other comprehensive income. The initial value of the component excluded from the assessment of effectiveness is recognized in earnings using a systematic and rational method over the life of the hedging instrument. Any amounts excluded from the assessment of hedge effectiveness are presented in the same income statement line being Interest and finance costs where the earnings effect of the hedged item is presented.
The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions.
This process includes linking all derivatives that are designated as cash flow hedges to specific forecasted transactions or variability of cash flow.
The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. The Company considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, in accordance with ASC 815 “Derivatives and Hedging”.
Also, the Company enters into FFAs to establish market positions in the dry bulk derivative freight markets and to hedge its exposure in the physical dry bulk freight markets and into bunker swap agreements to hedge its exposure to bunker prices. The differentials paid or received under these instruments are recognized in earnings as part of the gain /(loss) on derivative instruments. The Company has not designated these FFAs and bunker swap agreements as hedge accounting instruments.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Furthermore, the Company enters into forward exchange rate contracts to manage its exposure to currency exchange risk on certain foreign currency liabilities. The Company has not designated these forward exchange rate contracts as hedge accounting instruments.
(r) Earnings per Share: Basic earnings per share are computed by dividing net income attributable to common equity holders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. The Company had no dilutive securities outstanding during the three-year period ended December 31, 2022. Earnings per share attributable to common equity holders are adjusted by the contractual amount of dividends related to the preferred stockholders that accrue for the period and the gain on retirement of preferred stock which was recognized during the year ended December 31, 2020 (Note 17).
(s) Fair Value Measurements: The Company follows the provisions of ASC 820 “Fair Value Measurements and Disclosures”, which defines and provides guidance as to the measurement of fair value. This standard defines a hierarchy of measurement and indicates that, when possible, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets and the lowest priority (Level 3) to unobservable data for example, the reporting entity’s own data. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. ASC 820 applies when assets or liabilities in the financial statements are to be measured at fair value but does not require additional use of fair value beyond the requirements in other accounting principles (Notes 20 and 22).
(t) Segment Reporting: The Company determined that currently it operates under three reportable segments: (1) a container vessels segment, as a provider of worldwide marine transportation services by chartering its container vessels, (2) a dry bulk vessels segment, as a provider of dry bulk commodities transportation services by chartering its dry bulk vessels and (3) operating platform which charters-in/out dry bulk vessels and enters into contracts of affreightment, FFAs and may also utilize hedging solutions. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.
(u) Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change of control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.
(v) Non-controlling interest: The Company classifies non-controlling interest of its equity ventures based upon a review of the legal provisions governing the redemption of such interest. Those provisions are embodied within the equity venture’s operating agreement. The Company’s equity ventures that are subject to operating agreement provisions that require the Company to purchase the non-controlling equity holders’ interest upon the occurrence of certain specific triggering events that are not solely within the control of the Company, are classified as redeemable noncontrolling interest in temporary equity. Redeemable noncontrolling interest is initially recorded at its fair value as of the date of issue. Such fair value is determined using various accepted valuation methods, including the income approach, the market approach, the cost approach, and a combination of one or more of these approaches. Subsequent to the closing date of the transaction ,the recorded value for redeemable non-controlling interest is adjusted at the end of each reporting period for (a) comprehensive income (loss) that is attributed to the non-controlling interest, which is calculated by multiplying the non-controlling interest percentage by the comprehensive income (loss) of the equity venture’s during the reporting period, (b) dividends paid to the noncontrolling interest holders during the reporting period, and (c) any other transactions that increase or decrease the Company’s ownership interest in the equity venture, as a result of which the Company retains its controlling interest.
If the Company determines at the end of the reporting period that it is probable that an event would occur to otherwise require the redemption of a redeemable non-controlling interest (redeemable non-controlling interest is currently redeemable), then the Company adjusts the recorded amount to its maximum redemption amount at the reporting date. If the Company determines that it is not probable that an event would occur to otherwise require the redemption of a redeemable non-controlling interest (i.e., the date for such event is not set or such event is not certain to occur), then the redeemable non-controlling interest is not considered currently redeemable, and no further adjustment is required.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(w) Equity Method Investments: Investments in the common stock of entities, in which the Company has significant influence, as defined by ASC 323, over operating and financial policies, are accounted for using the equity method. Under this method, the investment in such entities is initially recorded at cost and is adjusted to recognize the Company’s share of the earnings or losses of the investee after the acquisition date and is adjusted for impairment whenever facts and circumstances indicate that a decline in fair value below the cost basis is other than temporary. The amount of the adjustment is included in the determination of net income / (loss). Dividends received from an investee reduce the carrying amount of the investment. When the Company’s share of losses in an investee equals or exceeds its interest in the investee, the Company does not recognize further losses unless the Company has incurred obligations or made payments on behalf of the investee.
(x) Right-of-Use Asset - Finance Leases: The Financial Accounting Standards Board (“FASB”) ASC 842 classifies leases from the standpoint of the lessee at the inception of the lease as finance leases or operating leases. The determination of whether an arrangement is (or contains) a finance lease is based on the substance of the arrangement at the inception date and is assessed in accordance with the criteria set in ASC 842-10-25-2. If none of the criteria in ASC 842-10-25-2 are met, leases are accounted for as operating leases.
Furthermore, as a result of electing to apply the package of practical expedients, at January 1, 2019, the Company’s capital leases under ASC 840 became finance leases under ASC 842 as lease classification is not reassessed in transition. Therefore, at that date, the Company, as lessee, initially recognized a finance lease right-of-use asset and lease liability measured at the carrying amount of the capital lease assets and capital lease obligations under ASC 840. After January 1, 2019, the Company, as lessee, followed ASC 840 for expense recognition unless the lease is modified and the modified lease is not accounted for as a separate contract or the Company is otherwise required to remeasure its lease liability in accordance with ASC 842. At January 1, 2019, the Company continued to recognize the deferred gain or loss, previously described as prepaid or unearned rental income, related to its failed sale and leaseback transactions under ASC 840, but reclassified such amounts to the right-of-use asset and changed the amortization period from over the lease term to in proportion to the amortization of the right-of-use asset.
Finance leases are accounted for as the acquisition of a finance right-of-use asset and the incurrence of an obligation by the lessee. At the commencement date of the finance lease, a lessee initially measures the lease liability at the present value, using the discount rate determined on the commencement, of the lease payments to be made over the lease term. Subsequently, the lease liability is increased by the interest on the lease liability and decreased by the lease payments during the period. The interest on the lease liability is determined in each period during the lease term as the amount that produces a constant periodic discount rate on the remaining balance of the liability, taking into consideration the reassessment requirements.
A lessee initially measures the finance right-of-use asset at cost which consists of the amount of the initial measurement of the lease liability; any lease payments made to the lessor at or before the commencement date, less any lease incentives received; and any initial direct costs incurred by the lessee. Subsequently, the finance right-of-use asset is measured at cost less any accumulated amortization and any accumulated impairment losses, taking into consideration the reassessment requirements. A lessee shall amortize the finance right-of-use asset on a straight-line basis (unless another systematic basis better represents the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits) from the commencement date to the earlier of the end of the useful life of the finance right-of-use asset or the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the underlying asset, the lessee shall amortize the right-of-use asset to the end of the useful life of the underlying asset.
For sale and leaseback transactions, if the transfer is not a sale in accordance with ASC 842-40-25-1 through 25-3, the Company, as seller-lessee - does not derecognize the transferred asset and accounts for the transaction as financing. An excess of carrying value over fair market value at the date of sale would indicate that the recoverability of the carrying amount of an asset should be assessed under the guidelines of ASC 360.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(y) Investments in Equity and Debt Securities:
ASC 825 “Financial Instruments” requires equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies, but excluding those accounted for under the equity method, those that result in consolidation of the investee and certain other investments) to be measured at fair value with changes in the fair value recognized through net income. However, for equity investments that don’t have readily determinable fair values and don’t qualify for practical expedient in ASC 820 to estimate fair value using the net asset value (“NAV”) per share (or its equivalent) of the investment, entities may choose to measure those investments at cost, less any impairment. The Company initially recognizes such equity securities at cost. Subsequently, any dividends distributed by the investee to the Company are recognized as income when received, but only to the extent they represent net accumulated earnings of the investee since the Company’s initial recognition of the investment. Net accumulated earnings are recognized as income by the Company only if they are distributed to the investor as dividends. Any dividends received in excess of net accumulated earnings are recognized as a reduction in the carrying amount of the investment. Management evaluates the equity securities for other-than-temporary-impairment at each reporting date. An investment in cost method equity securities is considered impaired if the fair value of the investment is less than its carrying value, in which case the Company recognizes in earnings an impairment loss equal to the difference between their carrying value and their fair value. Consideration is given to significant deterioration in the earnings performance, or business prospects of the investee, significant adverse change in the regulatory, economic, or technological environment of the investee, significant adverse change in the general market condition in which the investee operates, as well as factors that raise significant concerns about the investee’s ability to continue as a going concern.
Held-to-maturity debt securities are initially recognized at cost and subsequently are measured at amortized cost, less expected credit losses. The amortized cost is adjusted for amortization of premiums and accretion of discounts to maturity. Management evaluates debt securities held-to-maturity for expected credit losses at each reporting date.
The Company assessed the provisions of “ASC 326 Financial Instruments — Credit Losses” and calculated the estimated credit loss provision by using the Probability of Default and the Loss Given Default parameters (Note 5). During the year ended December 31, 2021, the Company redeemed / sold the entirety of its investments in debt and equity securities and as such there were no outstanding amounts as of the year-end date.
(z) Stock Based Compensation: The Company accounts for stock-based payment awards granted to Costamare Shipping Services Ltd. (Notes 3 and 16(a)) for the services provided, following the guidance in ASC 505-50 “Equity Based Payments to Non-Employees”. The fair value of the stock-based payment awards is recognized in the line item General and administrative expenses - related parties in the consolidated statements of operations.
(aa) Going concern: The Company evaluates whether there is substantial doubt about its ability to continue as a going concern by applying the provisions of ASC 205-40. In more detail, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date the financial statements are issued. As part of such evaluation, the Company did not identify any conditions that raise substantial doubt about the entity's ability to continue as a going concern. Accordingly, the Company continues to adopt the going concern basis in preparing its consolidated financial statements.
(ab) Treasury stock: Treasury stock is stock that is repurchased by the issuing entity, reducing the number of outstanding shares in the open market. When shares are repurchased, they may either be cancelled or held for reissue. If not cancelled, such shares are referred to as treasury shares. The cost of the acquired shares is shown as a deduction in stockholders' equity. Dividends on such shares held in the entity’s treasury should not be reflected as income and are not shown as a reduction in equity. Depending on whether the shares are acquired for reissuance or retirement, treasury shares are accounted for under the cost method or the constructive retirement method. The cost method is also used when the reporting entity’s management has not made decisions as to whether the reacquired shares will be retired, held indefinitely or reissued. The Company elected for the repurchase of its common shares to be accounted for under the cost method. Under this method, the treasury stock account is charged for the aggregate cost of shares reacquired.
(ac) Short-term investments: Short-term investments consist of U.S. Treasury Bills with maturities exceeding three months at the time of purchase and are stated at amortized cost, which approximates fair value.
(ad) Long lived Assets- Financing Arrangements: Following the implementation of ASC 606 Revenue from Contracts with Customers, sale and leaseback transactions, which include an obligation for the Company, as seller-lessee, to repurchase the asset, are precluded from being accounted for the transfer of the asset as sale, as the transaction is classified as a financing by the Company, since it effectively retains control of the underlying asset. As such, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest. Interest costs incurred (i) under financing arrangements that relate to vessels in operation are expensed to Interest and finance costs in the consolidated statement of operations and (ii) under financing arrangements that relate to vessels under construction are capitalized to Vessels and advances, net in the consolidated balance sheets.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
New Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be terminated because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update apply to all entities that elect to apply the optional guidance in Topic 848. ASU 2020-04 and ASU 2021-10 could be adopted as of March 12, 2020 through December 31, 2022.
In December 2022, the FASB issued ASU No. 2022-06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848). Topic 848 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate (e.g., LIBOR) reform if certain criteria are met, for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The ASU deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The ASU is effective as of December 21, 2022 through December 31, 2024. The Company will continue to evaluate transactions or contract modifications occurring as a result of reference rate reform and to determine whether to apply the optional guidance. As of December 31, 2022, the Company has not yet elected any optional expedients provided in the standard.
3. Transactions with Related Parties:
(a) Costamare Shipping Company S.A. (“Costamare Shipping”) and Costamare Shipping Services Ltd. (“Costamare Services”): Costamare Shipping is a ship management company wholly owned by Mr. Konstantinos Konstantakopoulos, the Company’s Chairman and Chief Executive Officer. Costamare Shipping provides the Company with commercial, technical and other management services pursuant to a Framework Agreement dated November 2, 2015, as amended and restated on January 17, 2020 to allow Costamare Shipping to retain certain relevant payouts from insurance providers and as further amended and restated on June 28, 2021 to allow Costamare Shipping to provide services in relation to other types of vessels (including dry bulk vessels), in addition to container vessels (the “Framework Agreement”), and separate ship management agreements with the relevant vessel owning subsidiaries. Costamare Services, a company controlled by the Company’s Chairman and Chief Executive Officer and members of his family, provides, pursuant to a Services Agreement dated November 2, 2015 as amended and restated on June 28, 2021 (the “Services Agreement”), the Company’s vessel-owning subsidiaries with chartering, sale and purchase, insurance and certain representation and administrative services. Costamare Shipping and Costamare Services are not part of the consolidated group of the Company.
On November 27, 2015, the Company amended and restated the Registration Rights Agreement entered into in connection with the Company’s Initial Public Offering, to extend registration rights to Costamare Shipping and Costamare Services each of which have received or may receive shares of its common stock as fee compensation.
Pursuant to the Framework Agreement and the Services Agreement, Costamare Shipping and Costamare Services received (i) for each vessel a daily fee of $1.020 and $0.510 for any vessel subject to a bareboat charter, effective from January 1, 2022 (prior to that date the daily fee was $0.956 and $0.478 for any vessel subject to a bareboat charter), prorated for the calendar days the Company owned each vessel and for the three-month period following the date of the sale of a vessel, (ii) a flat fee of $840, effective from January 1, 2022 (prior to that date the flat fee was $787 for the construction of any newbuild vessel), for the supervision of the construction of any newbuild vessel contracted by the Company, (iii) a fee of 1.25% on all gross freight, demurrage, charter hire, ballast bonus or other income earned with respect to each vessel in the Company’s fleet and (iv) a quarterly fee of $667 (as of January 1, 2022; prior to that date the quarterly fee was $625) plus the value of 149,600 shares which Costamare Services may elect to receive in kind. Fees under (i), and (ii) and the quarterly fee under (iv) are annually adjusted upwards to reflect any strengthening of the Euro against the U.S. dollar and/or material unforeseen cost increases.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The Company is able to terminate the Framework Agreement and/or the Services Agreement, subject to a termination fee, by providing written notice to Costamare Shipping or Costamare Services, as applicable, at least 12 months before the end of the subsequent one-year term. The termination fee is equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been delegated to a sub-manager or a sub-provider, as applicable); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above.
In 2013, Costamare Shipping entered into a co-operation agreement (the “Co-operation Agreement”) with third-party ship managers V.Ships Greece Ltd. (“V.Ships Greece”), pursuant to which the two companies established a ship management cell (the “Cell”) under V.Ships Greece. The Cell provided management services to certain of the Company’s container vessels, pursuant to separate management agreements entered into between V.Ships Greece and the relevant vessel-owning subsidiary, for a daily management fee. The Cell also provided ship management services to third-party owners. Effective April 1, 2019, the Company terminated its agreement with Costamare Shipping, whereby Costamare Shipping passed to the Company the net profit, if any, it received pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by the Company to Costamare Shipping under the Framework Agreement. Following the termination of the Co-operation Agreement on October 16, 2020, V.Ships Greece continues to provide management services to the Company’s vessels (as well as to vessels acquired under the Framework Deed and to third party vessels). As at December 31, 2022, V.Ships Greece provided services to 62 Costamare vessels, of which 14 were subcontracted for certain management services to V.Ships (Shanghai) Limited.
Management fees charged by Costamare Shipping in the years ended December 31, 2020, 2021 and 2022, amounted to $21,442, $29,621 and $43,915, respectively, and are included in Management and agency fees-related parties in the accompanying consolidated statements of operations. In addition, Costamare Shipping and Costamare Services charged (i) $13,930 for the year ended December 31, 2022 ($9,756 and $5,739 for the years ended December 31, 2021 and 2020, respectively), representing a fee of 1.25% on all gross revenues, as provided in the Framework Agreement and the Services Agreement, as applicable, which is included in Voyage expenses-related parties in the accompanying consolidated statements of operations, (ii) $2,667, which is included in General and administrative expenses – related parties in the accompanying consolidated statements of operations for the year ended December 31, 2022 ($2,500 for the years ended December 31, 2021 and 2020) and (iii) $7,089, representing the fair value of 598,400 shares, which is included in General and administrative expenses – related parties in the accompanying consolidated statements of operations for the year ended December 31, 2022 ($7,414 and $3,655 for the years ended December 31, 2021 and 2020, respectively). Furthermore, in accordance with the management agreements with V.Ships Greece and the other third-party managers, V.Ships Greece and the other third-party managers have been provided with the amount of $75 and $50 per vessel as working capital security. As at December 31, 2021, it was $5,525 in aggregate, of which $5,075 is included in Accounts receivable, net, non-current and $450 in Accounts receivable, net in the accompanying 2021 consolidated balance sheet. As at December 31, 2022, it was $5,625 in aggregate, of which $5,250 is included in Accounts receivable, net, non-current and $375 in Accounts receivable, net in the accompanying 2022 consolidated balance sheet.
During the years ended December 31, 2020, 2021 and 2022, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed (Notes 9 and 10) the amounts of $3,611, $2,752 and $1,776, respectively, for services provided in accordance with the respective management agreements. The balance due from Costamare Shipping at December 31, 2022 amounted to $3,581 and is included in Due from related parties in the accompanying consolidated balance sheet. The balance due to Costamare Shipping at December 31, 2021 amounted to $743 and is included in Due to related parties in the accompanying consolidated balance sheet. The balance due to Costamare Services at December 31, 2021 and 2022, amounted to $951 and $1,380, respectively, and is included in Due to related parties in the accompanying consolidated balance sheets.
(b) Shanghai Costamare Ship Management Co., Ltd. (“Shanghai Costamare”): Shanghai Costamare, a company incorporated in the People’s Republic of China, controlled by the Company’s Chairman and Chief Executive Officer, provided certain vessel-owning subsidiaries with management services. Shanghai Costamare was not part of the consolidated group of the Company. On October 16, 2020, it was agreed that Shanghai Costamare would terminate operations and the owners of the 16 Company’s containerships that were managed by Shanghai Costamare on that date entered into ship managements agreements with V.Ships Greece, which subcontracted certain management services to V.Ships (Shanghai) Limited. The actual transfer of the management of 15 vessels was completed on December 31, 2020. On January 8, 2021, the management of the remaining vessel was fully taken over by V.Ships (Shanghai) Limited. There was no balance due from/to Shanghai Costamare at both December 31, 2021 and 2022.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(c) Blue Net Chartering GmbH & Co. KG (“BNC”) and Blue Net Asia Pte., Ltd. (“BNA”): On January 1, 2018, Costamare Shipping appointed, on behalf of the vessels it manages, BNC, a company 50% (indirectly) owned by the Company’s Chairman and Chief Executive Officer, to provide charter brokerage services to all container vessels under its management (including container vessels owned by the Company). BNC provides exclusive charter brokerage services to containership owners. Under the charter brokerage services agreement as amended, each container vessel-owning subsidiary paid a fee of €9,413 for the years ended December 31, 2021 and 2022, in respect of each vessel, prorated for the calendar days of ownership (including as disponent owner under a bareboat charter agreement), provided that in respect of container vessels which remain chartered under the same charter party agreement in effect on January 1, 2018, the fee was €1,281 for the years ended December 31, 2021 and 2022 in respect of each vessel, prorated for the calendar days of ownership (including as disponent owner under a bareboat charter agreement). On March 29, 2021, four of the Company’s container vessels agreed to pay a daily brokerage commission of $0.165 per day to BNC in connection with charters arranged by it. During the years ended December 31, 2020, 2021 and 2022, BNC charged the ship-owning companies $378, $467 and $431, respectively, which are included in Voyage expenses—related parties in the accompanying consolidated statements of operations. BNC also provided chartering services to a revenue sharing pool (until 31 August 2021), which included one of the Company’s container vessels. In addition, on March 31, 2020, Costamare Shipping agreed, on behalf of five of the container vessels it manages, to pay to BNA, a company 50% (indirectly) owned by the Company’s Chairman and Chief Executive Officer, a commission of 1.25% of the gross daily hire earned from the charters arranged by BNA for these five Company container vessels. During the years ended December 31, 2020, 2021 and 2022, BNA charged the ship-owning companies $399, $866 and $1,057 which are included in Voyage expenses – related parties in the accompanying consolidated statements of operations.
(d) Longshaw Maritime Investments S.A. (“Longshaw”): On June 14, 2021, the Company entered into a Share Purchase Agreement (“SPA’’) with Longshaw, a related party entity controlled by the Company’s Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, for the acquisition of all of its equity interest in 16 companies, which had acquired or had agreed to acquire dry bulk vessels. The aggregate purchase price, which was paid by the Company on September 9, 2021, for the acquisition of these 16 companies was $54,491, in exchange for the net assets of the acquired companies, that amounted to $54,578. During the year ended December 31, 2021, all of the dry bulk vessels that were part of the acquisition, Builder, Pegasus, Adventure, Eracle, Peace, Sauvan, Pride, Alliance, Manzanillo, Acuity, Seabird, Aeolian, Comity, Athena, Farmer and Greneta (with an aggregate DWT of 932,329) were delivered to the Company. The acquisition has been accounted as a transaction between companies under common control and the excess of the carrying value of the net assets acquired above the purchase price agreed amounting to $86 was recorded as a capital contribution within additional paid in capital.
(e) LC LAW Stylianou & Associates LLC (“LCLAW”): Ms. Lora Stylianou, the managing partner of LCLAW, a Cyprus law firm, is the non-executive President of the Board of Directors of Costamare Participations Plc (Note 11.C), a wholly owned subsidiary of the Company and is a board member and officer or two other subsidiaries of the Company. LCLAW provides legal services to the Company. During the year ended December 31, 2022, LCLAW charged our subsidiaries $36, which is included in “General and Administrative Expenses - Related Parties” in the accompanying consolidated statements of operations. During the year ended December 31, 2021, LCLAW charged our subsidiaries $91 in total, of which (i) $33 is included in "General and Administrative Expenses - Related Parties" in the accompanying consolidated statements of operations for the year ended December 31, 2021 ($23 for the year ended December 31, 2020) and (ii) $58 is included in Financing Costs (Note 11.D). There was no balance due from/to LCLAW at both December 31, 2021 and December 31, 2022.
(f) Other related parties' transactions: On November 3, 2010, the Company and the Company’s Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, entered into a Restrictive Covenant Agreement (the “Original RCA”), pursuant to which the activities of Mr. Konstantakopoulos with respect to the container vessel sector, because of his capacity as a director or officer of the Company, were restricted. In July 2021, the Original RCA was amended and restated, and Mr. Konstantakopoulos agreed to similarly restrict his activities in the dry bulk sector.
(g) Local Agencies: Costamare Bulkers Services GmbH (“Local Agency A”) a company incorporated under the laws of the Republic of Germany, Costamare Bulkers Services ApS (“Local Agency B”) a company incorporated under the laws of the Kingdom of Denmark and Costamare Bulkers Services Pte. Ltd. (“Local Agency C” and together with the Local Agency A and Local Agency B, the “Local Agencies”) a company incorporated under the laws of the Republic of Singapore are wholly owned by the Company’s Chairman and CEO. Each of the Local Agencies is managed pursuant to a service contract by individuals who have the minority shareholder interest in CBI (see Note 15). On November 14, 2022, CBI entered into agreements with the three Local Agencies (collectively the “Service agreements”) for the provision of chartering and other services on a cost basis (including all expenses related to the provision of the services) plus a mark-up which is currently set at 11%. During the year ended December 31, 2022, the Local Agencies charged CBI with aggregate agency fees of $2,820, which are included in “Management and agency fees-related parties” in the accompanying 2022 consolidated statement of operations. The balance due from Local Agency A at December 31, 2022 amounted to $257 and is included in Due from related parties in the accompanying 2022 consolidated balance sheet. The balance due to Local Agency B and Local Agency C at December 31, 2022 amounted to $952 and is included in Due to related parties in the accompanying 2022 consolidated balance sheet.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
4. Segmental Financial Information
The Company has three reportable segments from which it derives its revenues: (1) container vessels segment, (2) dry bulk vessels segment vessels and (3) operating platform segment. The reportable segments reflect the internal organization of the Company and are strategic businesses that offer different services. The container vessel business segment consists of transportation of containerized products through ownership and operation of container vessels. The dry bulk business segment consists of transportation of dry bulk cargoes through ownership and trading of dry bulk vessels. Under the CBI segment the Company charters-in/out dry bulk vessels and enters into contracts of affreightment, FFAs and may also utilize hedging solutions.
The tables below present information about the Company’s reportable segments as of December 31, 2021 and December 31, 2022, and for the years ended December 31, 2021 and 2022. The Company measures segment performance based on net income. Items included in the segment’s net income are allocated to the extent that the items are directly or indirectly attributable to the segments. With regards to the items that are allocated by indirect calculation, their allocations keys are defined on the basis of each segment’s drawing on key resources. The Other segment includes items that due to their nature are not allocated to any of the Company’s reportable segments. As of December 31, 2021 and December 31, 2022 and for the years ended December 31, 2021 and 2022, Other segment includes equity method investments’ balances, due from related parties balances and income and short-term investments. Summarized financial information concerning each of the Company’s reportable segments is as follows:
For the year ended December 31, 2022 | ||||||||||||||||||||||||
Container vessels segment | Dry bulk vessels segment | CBI | Other | Eliminations | Total | |||||||||||||||||||
Voyage revenue | $ | 797,392 | $ | 316,100 | $ | 367 | $ | - | $ | - | $ | 1,113,859 | ||||||||||||
Intersegment voyage revenue | - | 800 | - | - | (800 | ) | - | |||||||||||||||||
Voyage expenses | (11,323 | ) | (37,602 | ) | (144 | ) | - | - | (49,069 | ) | ||||||||||||||
Intersegment voyage expenses | - | - | (800 | ) | - | 800 | - | |||||||||||||||||
Vessels’ operating expenses | (169,426 | ) | (99,805 | ) | - | - | - | (269,231 | ) | |||||||||||||||
Depreciation | (126,340 | ) | (39,658 | ) | - | - | - | (165,998 | ) | |||||||||||||||
Amortization of dry-docking and special survey costs | (11,831 | ) | (1,655 | ) | - | - | - | (13,486 | ) | |||||||||||||||
Vessels’ Impairment loss | - | (1,691 | ) | - | - | - | (1,691 | ) | ||||||||||||||||
Gain on sale of vessels, net | 122,884 | 3,452 | - | - | - | 126,336 | ||||||||||||||||||
Interest income | 3,666 | 2,290 | - | - | - | 5,956 | ||||||||||||||||||
Interest and finance costs | (101,888 | ) | (20,333 | ) | (12 | ) | - | - | (122,233 | ) | ||||||||||||||
Income from equity method investments | - | - | - | 2,296 | - | 2,296 | ||||||||||||||||||
Net Income/ (Loss) for the Year | $ | 458,494 | $ | 97,405 | $ | (3,503 | ) | $ | 2,296 | $ | - | $ | 554,692 |
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
For the year ended December 31, 2021 | ||||||||||||||||
Container vessels segment | Dry bulk vessels segment | Other | Total | |||||||||||||
Voyage revenue | $ | 678,292 | $ | 115,347 | $ | - | $ | 793,639 | ||||||||
Vessels’ operating expenses | (151,452 | ) | (28,529 | ) | - | (179,981 | ) | |||||||||
Depreciation | (125,811 | ) | (11,147 | ) | - | (136,958 | ) | |||||||||
Amortization of dry-docking and special survey costs | (10,346 | ) | (87 | ) | - | (10,433 | ) | |||||||||
Gain on sale of vessels, net | 45,894 | - | - | 45,894 | ||||||||||||
Interest income | 1,587 | - | - | 1,587 | ||||||||||||
Interest and finance costs | (81,887 | ) | (4,160 | ) | - | (86,047 | ) | |||||||||
Income from equity method investments | - | - | 12,859 | 12,859 | ||||||||||||
Net Income for the Year | $ | 303,490 | $ | 56,814 | $ | 74,817 | $ | 435,121 |
As of December 31, 2022 | ||||||||||||||||||||||||
Container vessels segment | Dry bulk vessels segment | CBI | Other | Eliminations | Total | |||||||||||||||||||
Total Assets | $ | 3,272,559 | $ | 771,027 | $ | 101,807 | $ | 751,838 | $ | (1,002 | ) | $ | 4,896,229 |
As of December 31, 2021 | ||||||||||||||||
Container vessels segment | Dry bulk vessels segment | Other | Total | |||||||||||||
Total Assets | $ | 3,672,212 | $ | 714,957 | $ | 19,872 | $ | 4,407,041 |
5. Current Assets: Short-term investments / Non-current Assets: Debt Securities, Held to Maturity, and Other Non-Current Assets:
In 2014, Zim Integrated Services (“Zim”) agreed with its creditors, including vessel and container lenders, ship-owners, shipyards, unsecured lenders and bond holders, to restructure its debt. Based on this agreement, the Company received Zim shares representing approximately 1.2% of the outstanding Zim shares immediately after the restructuring and $8,229 aggregate principal amount of unsecured interest-bearing Zim notes maturing in 2023 consisting of $1,452 of 3.0% Series 1 Notes due 2023 amortizing subject to available cash flows in accordance with a corporate mechanism and $6,777 of 5.0% Series 2 Notes due 2023 non-amortizing (of the 5% interest, 3% is payable quarterly in cash and 2% interest is accrued quarterly with deferred cash payment on maturity) in exchange for amounts owed by Zim to the Company under their charter agreements. The Company calculated the fair value of the instruments received from Zim based on the agreement discussed above, available information on Zim and other similar contracts with similar terms, maturities and interest rates, and recorded at fair value of $676 in relation to the Series 1 Notes, $3,567 in relation to the Series 2 Notes and $7,802 in relation to its equity participation in Zim. The difference between the aggregate fair value of the debt and equity securities received from Zim and the then net carrying value of the amounts due from Zim of $2,888 was written-off in 2014.
The Company accounted on a quarterly basis, for the unwinding of the interest on the Series 1 and Series 2 Notes. During the year ended December 31, 2021, the Company recorded $458 in relation to their unwinding, which is included in “Interest income” in the 2021 consolidated statement of operations. The Company had classified such debt securities under Debt securities, held to maturity, since it had no intention to sell the securities in the near term. During the year ended December 31, 2016, the Company received $46 capital redemption of the Series 1 Notes, reducing the principal to $1,406. Additionally, on March 22, 2021, the Company received $394 capital redemption of the Series 1 Notes, reducing the principal to $1,012, as of that date. Furthermore, in June 2021, the Company received $7,789 capital redemption of the Series 1 and 2 Notes, in aggregate, and the outstanding balance at the date of the capital redemption of $6,774, net of accumulated provision for Credit losses of $569 calculated as of December 31, 2020, following the provisions of “ASC 326 Financial Instruments — Credit Losses”, was fully settled. As a result of the full redemption of the Series 1 and Series 2 Notes, the Company recorded a gain of $1,015, which is included in Other, net, in the accompanying 2021 statement of operations. The Series 1 and Series 2 Zim Notes were carried at amortized cost. These financial instruments were not measured at fair value on a recurring basis. The Company assessed the provisions of “ASC 326 Financial Instruments — Credit Losses” in relation to its Series 1 and Series 2 Notes securities and a Credit loss provision of $245 was calculated as of March 31, 2021 and as result a gain of $324 is included in Other, net in the 2021 consolidated statement of operations. The remaining securities were fully redeemed in June 2021.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
On January 28, 2021, Zim completed its initial public offering in the United States under the United States Securities Act of 1933, as amended. Since then, the Company classified the equity securities of Zim that it owned at Fair Value through Net Income as the Company did not have the ability to exercise significant influence on matters at Zim, and there is readily available fair value for these securities. The Company recorded the subsequent changes in fair value in the consolidated statements of operations based on the closing price of Zim ordinary shares on the New York Stock Exchange (NYSE) on each reporting date (Level 1 inputs of the fair value hierarchy). In September 2021, the Company received a special dividend amounting to $1,833, which is separately reflected in Dividend income in the accompanying 2021 statement of operations. During the year ended December 31, 2021, the Company sold its 1,221,800 ordinary shares of Zim and recorded a gain of $60,161. As of December 31, 2021, the Company did not hold any Zim securities.
As of December 31, 2022, the Company holds five zero-coupon U.S. treasury bills (the “Bills”) with an aggregate face value of $121,000 at a cost of $118,927. All Bills have a maturity exceeding three months at the time of purchase and are stated at amortized cost, which approximates their fair value.
6. Inventories:
Inventories in the accompanying consolidated balance sheets relate to bunkers, lubricants and spare parts on board the vessels.
7. Vessels and advances, net:
The amounts in the accompanying consolidated balance sheets are as follows:
Vessel Cost | Accumulated | Net Book | ||||||||||
Balance, January 1, 2021 | $ | 3,525,967 | $ | (1,075,457 | ) | $ | 2,450,510 | |||||
Depreciation | - | (129,406 | ) | (129,406 | ) | |||||||
Vessel acquisitions, advances and other vessels’ costs | 1,467,937 | - | 1,467,937 | |||||||||
Vessel sales, transfers and other movements | (306,008 | ) | 167,159 | (138,849 | ) | |||||||
Balance, December 31, 2021 | $ | 4,687,896 | $ | (1,037,704 | ) | $ | 3,650,192 | |||||
Depreciation | - | (162,651 | ) | (162,651 | ) | |||||||
Vessel acquisitions, advances and other vessels’ costs | 249,023 | - | 249,023 | |||||||||
Vessel sales, transfers and other movements | (140,817 | ) | 71,114 | (69,703 | ) | |||||||
Balance, December 31, 2022 | $ | 4,796,102 | $ | (1,129,241 | ) | $ | 3,666,861 |
During the year ended December 31, 2022, the Company acquired the secondhand container vessel Dyros with a TEU capacity of 4,578, and three secondhand dry bulk vessels, the Oracle, Libra and Norma with an aggregate DWT of 172,717. Furthermore, during the year ended December 31, 2022, the Company prepaid the outstanding balances of Jodie Shipping Co., Kayley Shipping Co., Plange Shipping Co. and Simone Shipping Co. finance lease liabilities (Note 12) and re-acquired the 2013-built, 8,827 TEU container vessels, MSC Athens and MSC Athos and the 2014-built, 4,957 TEU container vessels, Leonidio and Kyparissia. In addition, during the year ended December 31, 2022, the Company prepaid the outstanding balance of Benedict Maritime Co. finance arrangement (Note 11.B.2) and re-acquired the 2016-built, 14,424 TEU container vessel Triton.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the year ended December 31, 2021, the Company (i) acquired the secondhand container vessels Aries, Argus, Glen Canyon, Androusa, Norfolk, Porto Cheli, Porto Kagio, Porto Germeno and Gialova with an aggregate TEU capacity of 49,909, (ii) took delivery of the newbuild container vessels YM Target and YM Tiptop with an aggregate TEU capacity of 25,380 and (iii) took delivery of 43 secondhand dry bulk vessels, 16 of which were part of the SPA (Note 3(d)), the Builder, Pegasus, Adventure, Eracle, Peace, Sauvan, Pride, Alliance, Manzanillo, Acuity, Seabird, Aeolian, Comity, Athena, Farmer and Greneta, with an aggregate DWT of 850,163 and 27 additional dry bulk vessels that were agreed to be acquired during the year ended December 31, 2021, the Bernis, Verity, Dawn, Discovery, Clara, Serena, Merida, Progress, Miner, Parity, Uruguay, Resource, Konstantinos, Taibo, Thunder, Equity, Cetus, Curacao, Rose, Bermondi, Titan I, Orion, Merchia, Damon, Pythias, Hydrus and Phoenix, with an aggregate DWT of 1,388,422.
During the year ended December 31, 2021, the Company purchased the equity interest (in the range from 51% to 75%) held by funds managed and/or advised by York Capital Management Global Advisors LLC and its affiliate Sparrow Holdings, L.P. (collectively, “York”) (Notes 9 and 10) in the companies owning the containerships Cape Akritas, Cape Tainaro, Cape Artemisio, Cape Kortia and Cape Sounio, with an aggregate capacity of 55,050 TEU, at an aggregate net consideration price of $88,854 after subtracting term loans of $302,193 (Note 11) assumed at the time of the acquisition. As a result, the Company acquired the controlling interest and became the sole shareholder of the vessel owning companies of the said five container vessels (Note 10). Any favorable or unfavorable lease terms associated with these vessels were recorded as an intangible asset or liability (“Time charter assumed”) at the time of the acquisition. The aggregate Time charter assumed, net, at the time of the acquisitions was a liability of $589, current and non-current portion (Note 13). Management accounted for this acquisition as an asset acquisition under ASC 805 “Business Combinations”.
During the year ended December 31, 2021, the Company agreed to acquire (i) the 2008-built, 4,578 TEU secondhand container vessel Dyros, which was delivered during the first quarter of 2022 and (ii) two secondhand dry bulk vessels Oracle and Libra with an aggregate DWT of 114,699 which were delivered to the Company during the first quarter of 2022.
During the year ended December 31, 2021, the Company ordered from a shipyard a number of newbuild container vessels (some 12,690 TEU and some 15,000 TEU). During the year ended December 31, 2022, the Company served notices of termination for the abovementioned shipbuilding contracts due to the shipyard’s repudiation thereof/default thereunder and has served notice of arbitration to the relevant shipyard under the said shipbuilding contracts.
During the year ended December 31, 2020, the Company acquired the 2009-built, 4,258 TEU Virgo, the 2007-built, 2,572 TEU Scorpius and the 2011-built, 4,178 TEU Neokastro and took delivery of the 12,690 TEU newbuilds YM Triumph, YM Truth and YM Totality from the shipyard. Upon their delivery, all three newbuild vessels commenced their 10-year time charters.
On February 14, 2022, the Company decided to make arrangements to sell the container vessels Sealand Washington and Maersk Kalamata and on March 30, 2022, the Company decided to make arrangements to sell the dry bulk vessel Thunder. At these dates, the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the three vessels as “held for sale” were met. As of December 31, 2022, the amount of $55,195, separately reflected in Vessels held for sale in the December 31, 2022 consolidated balance sheet, represents the aggregate carrying value of Sealand Washington and Maersk Kalamata at the time that held for sale criteria were met on the basis that as of that date each vessel’s fair value less cost to sell exceeded each vessel’s carrying value. Each vessel’s fair value is based on its estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy). Both vessels were sold during the first quarter of 2023 (Note 23(c)).
On December 9, 2021, the Company decided to make arrangements to sell the container vessels Sealand Illinois, Sealand Michigan, York and Messini. At that date, the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the vessel as “held for sale” were met. As of December 31, 2021, the amount of $78,799 (including $3,742 transferred from Deferred charges, net), separately reflected in Vessels held for sale in the 2021 consolidated balance sheet, represents the aggregate carrying value of those vessels at the time that held for sale criteria were met on the basis that as of that date each vessel’s fair value less cost to sell exceeded each vessel’s carrying value. Their fair value was based on the vessel’s estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy).
During the year ended December 31, 2022, the Company sold the dry bulk vessel Thunder which was classified as held for sale at March 30, 2022 and the container vessels Messini, Sealand Michigan, Sealand Illinois and York, which were classified as held for sale at December 9, 2021 and recognized an aggregate gain of $126,336, which is separately reflected in Gain / (loss) on sale of vessels, net in the accompanying consolidated statement of operations for the year ended December 31, 2022.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the year ended December 31, 2021, the Company sold the container vessels (i) Halifax Express, which was classified as a Vessel held for sale at December 31, 2020, (ii) Prosper and Venetiko, which were classified as Vessels held for sale at March 31, 2021, (iii) Zim Shanghai and Zim New York, which were classified as Vessels held for sale at June 30, 2021, and recognized an aggregate net gain of $45,894, which is separately reflected in Gain / (loss) on sale of vessels, net in the accompanying 2021 consolidated statement of operations.
During the year ended December 31, 2022, the Company recorded an impairment loss in relation to four of its dry bulk vessels in the amount of $1,691. The fair values of the four vessels were determined through Level 2 inputs of the fair value hierarchy (Note 21).
During the year ended December 31, 2020, the Company recorded an impairment loss in relation to five of its container vessels in the amount of $31,577 (including $693 transferred from Deferred charges, net). The fair values of the five vessels were determined through Level 2 inputs of the fair value hierarchy (Note 21).
As of December 31, 2022, 99 of the Company’s vessels, with a total carrying value of $2,765,863, have been provided as collateral to secure the long-term debt discussed in Note 11. This excludes the vessels YM Triumph, YM Truth, YM Totality, YM Target and YM Tiptop, the four vessels acquired in 2018 under the Share Purchase Agreement (Note 11.B) with York and six unencumbered vessels.
8. Deferred Charges, net:
Deferred charges, net include the unamortized dry-docking and special survey costs. The amounts in the accompanying consolidated balance sheets are as follows:
Balance, January 1, 2021 | $ | 27,682 | ||
Additions | 18,882 | |||
Amortization | (10,433 | ) | ||
Write-off and other movements (Note 7) | (4,272 | ) | ||
Balance, December 31, 2021 | $ | 31,859 | ||
Additions | 38,330 | |||
Amortization | (13,486 | ) | ||
Write-off and other movements (Note 7) | (1,668 | ) | ||
Balance, December 31, 2022 | $ | 55,035 |
During the year ended December 31, 2022, 18 vessels underwent and completed their dry-docking and special survey and five vessels were in the process of completing their dry-docking and special survey. During the years ended December 31, 2020 and 2021, 11 and 14 vessels underwent and completed their dry-docking and special survey and nil and one vessel was in the process of completing her dry-docking and special survey. The amortization of the dry-docking and special survey costs is separately reflected in the accompanying consolidated statements of operations.
9. Costamare Ventures Inc.:
On May 18, 2015, the Company, along with its wholly owned subsidiary, Costamare Ventures Inc. (“Costamare Ventures”), amended and restated the Framework Deed, which was further amended on June 12, 2018 (the “Framework Deed”) with York to invest jointly in the acquisition and construction of container vessels. Under the Framework Deed, the decisions regarding vessel acquisitions are made jointly by Costamare Ventures and York and the Company reserves the right to acquire any vessels that York decides not to pursue. The commitment period ended on May 15, 2020 and the termination of the Framework Deed will occur on May 15, 2024, or upon the occurrence of certain extraordinary events as described therein.
On termination and on the occurrence of certain extraordinary events, Costamare Ventures may elect to divide the vessels owned by all such vessel-owning entities between itself and York to reflect their cumulative participation in all such entities. Costamare Shipping provides ship management and administrative services to the vessels acquired under the Framework Deed, with the right to subcontract to V.Ships Greece.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
As at December 31, 2022, the Company holds 49% of the capital stock of five jointly-owned companies formed pursuant to the Framework Deed with York (Note 10). The Company accounts for the entities formed under the Framework Deed as equity investments.
10. Equity Method Investments:
The companies accounted for as equity method investments, all of which are incorporated in the Marshall Islands, are as follows:
Entity | Vessel | Participation % December 31, 2022 | Date Established /Acquired |
Steadman Maritime Co. | - | 49% | July 1, 2013 |
Marchant Maritime Co. (*) | - | - | - |
Horton Maritime Co. (*) | - | - | - |
Smales Maritime Co. (**) | - | - | - |
Geyer Maritime Co. | Arkadia | 49% | May 18, 2015 |
Goodway Maritime Co. | Monemvasia | 49% | September 22, 2015 |
Platt Maritime Co. | Polar Argentina | 49% | May 18, 2015 |
Sykes Maritime Co. | Polar Brasil | 49% | May 18, 2015 |
(*) Dissolved on June 24, 2021
(**) Dissolved on August 16, 2022
During the year ended December 31, 2022, the Company received, in the form of a special dividend, $1,128 from Steadman Maritime Co.
During the year ended December 31, 2021, Steadman Maritime Co. sold its vessel Ensenada and provided a special dividend to the Company amounting to $15,190. On March 22, 2021, March 24, 2021 and March 29, 2021, the Company entered into three share purchase agreements to acquire the ownership interest (in the range of 51% to 75%) held by funds managed and/or advised by York in five jointly-owned companies, namely Ainsley Maritime Co. and Ambrose Maritime Co., Hyde Maritime Co. and Skerrett Maritime Co. and Kemp Maritime Co., which had been formed pursuant to the Framework Deed. At the date of the acquisition, the aggregate net value of assets and liabilities transferred to the Company amounted to $141,040. Management accounted for this acquisition as an asset acquisition under ASC 805 “Business Combinations” whereas the cost consideration over proportionate cost of the net asset values acquired was proportionally allocated on a relative fair value basis to the net identifiable assets acquired (that is to the vessels and related time charters (Note 13)).
For the years ended December 31, 2020, 2021 and 2022, the Company recorded net income of $16,195, $12,859 and $2,296, respectively, from equity method investments, which is separately reflected as Income from equity method investments in the accompanying consolidated statements of operations.
The summarized combined financial information of the companies accounted for as equity method investment is as follows:
December 31, 2021 | December 31, 2022 | |||||||
Current assets | $ | 12,468 | $ | 11,697 | ||||
Non-current assets | 92,770 | 91,471 | ||||||
Total assets | $ | 105,238 | $ | 103,168 | ||||
Current liabilities | $ | 6,576 | $ | 7,472 | ||||
Non-current liabilities | 58,110 | 52,760 | ||||||
Total liabilities | $ | 64,686 | $ | 60,232 |
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
For the years ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Voyage revenue | $ | 96,533 | $ | 43,088 | $ | 23,789 | ||||||
Net income | $ | 39,433 | $ | 27,617 | $ | 4,686 |
11. Long-Term Debt:
The amounts shown in the accompanying consolidated balance sheets consist of the following:
Borrower(s) | December 31, 2021 | December 31, 2022 | |||||||||||
A. | Term Loans: | ||||||||||||
1. | Nerida Shipping Co. | 9,975 | - | ||||||||||
2. | Singleton Shipping Co. and Tatum Shipping Co. | 37,600 | 34,400 | ||||||||||
3. | Reddick Shipping Co. and Verandi Shipping Co. | - | - | ||||||||||
4. | Costamare. Inc. | 30,188 | - | ||||||||||
5. | Bastian Shipping Co. and Cadence Shipping Co. | 98,000 | 82,800 | ||||||||||
6. | Adele Shipping Co. | 54,500 | 48,500 | ||||||||||
7. | Costamare Inc. | 123,990 | 112,430 | ||||||||||
8. | Quentin Shipping Co. and Sander Shipping Co. | 72,898 | - | ||||||||||
9. | Costamare Inc. | 24,554 | - | ||||||||||
10. | Capetanissa Maritime Corporation et al. | 56,500 | 15,671 | ||||||||||
11. | Caravokyra Maritime Corporation et al. | 54,400 | 6,928 | ||||||||||
12. | Achilleas Maritime Corporation et al. | - | - | ||||||||||
13. | Kelsen Shipping Co. | 4,050 | - | ||||||||||
14. | Uriza Shipping S.A. | 17,400 | - | ||||||||||
15. | Berg Shipping Co. | 11,660 | 10,540 | ||||||||||
16. | Reddick Shipping Co. and Verandi Shipping Co. | 14,900 | - | ||||||||||
17. | Evantone Shipping Co. and Fortrose Shipping Co. | 20,750 | 17,750 | ||||||||||
18. | Ainsley Maritime Co. and Ambrose Maritime Co. | 141,964 | 131,250 | ||||||||||
19. | Hyde Maritime Co. and Skerrett Maritime Co. | 138,519 | 127,212 | ||||||||||
20. | Kemp Maritime Co. | 70,350 | 64,300 | ||||||||||
21. | Vernes Shipping Co. | 12,650 | - | ||||||||||
22. | Achilleas Maritime Corporation et al. | 125,360 | 66,974 | ||||||||||
23. | Novara et al. | 63,833 | 65,043 | ||||||||||
24. | Costamare Inc. | 59,952 | 49,095 | ||||||||||
25. | Costamare Inc. | 80,228 | - | ||||||||||
26. | Costamare Inc. | - | - | ||||||||||
27. | Costamare Inc. | 79,348 | 24,387 | ||||||||||
28. | Amoroto et al. | 103,423 | 67,882 | ||||||||||
29. | Costamare Inc. | - | - | ||||||||||
30. | Dattier Marine Corp et al. | 43,480 | - | ||||||||||
31. | Bernis Marine Corp. et al. | - | 47,884 | ||||||||||
32. | Costamare Inc. | - | 52,361 | ||||||||||
33. | Costamare Inc. | - | 62,500 | ||||||||||
34. | Adstone Marine Corp. et al. | - | - | ||||||||||
35. | Amoroto et al. | - | 33,700 | ||||||||||
36. | Benedict et al. | - | 458,952 | ||||||||||
37. | Reddick Shipping Co. and Verandi Shipping Co. | - | 43,500 | ||||||||||
38. | Quentin Shipping Co. and Sander Shipping Co. | - | 85,000 | ||||||||||
39. | Greneta Marine Corp. et al. | - | 30,000 | ||||||||||
40. | Bastian Shipping Co. et al. | - | - | ||||||||||
41. | Adstone Marine Corp. et al. | - | 82,885 | ||||||||||
Total Term Loans | $ | 1,550,472 | $ | 1,821,944 | |||||||||
B. | Other financing arrangements | 803,589 | 678,930 | ||||||||||
C. | Unsecured Bond Loan | 113,260 | 106,660 | ||||||||||
Total long-term debt | $ | 2,467,321 | $ | 2,607,534 | |||||||||
Less: Deferred financing costs | (25,238 | ) | (22,913 | ) | |||||||||
Total long-term debt, net | 2,442,083 | 2,584,621 | |||||||||||
Less: Long-term debt current portion | (278,326 | ) | (325,611 | ) | |||||||||
Add: Deferred financing costs, current portion | 5,961 | 5,497 | |||||||||||
Total long-term debt, non-current, net | $ | 2,169,718 | $ | 2,264,507 |
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
A. Term Loans:
1. On August 1, 2017, Nerida Shipping Co. entered into a loan agreement with a bank for an amount of up to $17,625 for the purpose of financing general corporate purposes relating to Maersk Kowloon. On August 3, 2017 the Company drew the amount of $17,625. On July 1, 2022, the then outstanding balance of $9,075 was fully repaid.
2. On July 17, 2018, Tatum Shipping Co. and Singleton Shipping Co. entered into a loan agreement with a bank for an amount of up to $48,000, for the purpose of financing general corporate purposes relating to the vessels Megalopolis and Marathopolis. The facility has been drawn down in two tranches on July 20, 2018 and August 2, 2018. As of December 31, 2022, the outstanding balance of Tranche A of $17,200 is repayable in 11 equal quarterly installments of $400, from January 2023 to June 2025 and a balloon payment of $12,800 payable together with the last installment. As of December 31, 2022, the outstanding balance of Tranche B of $17,200 is repayable in 11 equal quarterly installments of $400, from February 2023 to July 2025 and a balloon payment of $12,800 payable together with the last installment.
3. On October 26, 2018, Reddick Shipping Co. and Verandi Shipping Co., entered into a loan agreement with a bank for an amount of up to $25,000, for the purpose of financing general corporate purposes relating to the vessels Maersk Kleven and Maersk Kotka. The facility has been drawn down in two tranches on October 30, 2018. On March 24, 2021, the then outstanding balance of $14,020 was fully repaid.
4. On November 27, 2018, the Company entered into a loan agreement with a bank for an amount of $55,000 in order to refinance previously held loans. The facility has been drawn down in two tranches. Tranche A of $28,000 was drawn down on November 30, 2018 and Tranche B (the revolving part of the loan) of $27,000 was drawn down on December 11, 2018. During the year ended December 31, 2019 and following the sale of the vessels MSC Pylos, Sierra II, Reunion and Namibia II, the Company prepaid in aggregate, the amount of $10,615. On November 11, 2020, the Company drew down the amount of $5,803 under the revolving part of the loan and provided the vessel Scorpius as additional security. On June 23, 2022, following the agreement of the loan discussed in Note 11.A.36, the Company prepaid the amount of $21,242. On September 14, 2022, the then outstanding balance of $5,946 was fully repaid.
5. On June 18, 2019, Bastian Shipping Co. and Cadence Shipping Co., entered into a loan agreement with a bank for an amount of up to $136,000, for the purpose of financing the acquisition costs of MSC Ajaccio and MSC Amalfi (Note 12) and general corporate purposes relating to the two vessels. The facility was drawn down in two tranches on June 24, 2019. As of December 31, 2022, the aggregate outstanding balance of the two tranches of $82,800 is repayable in 18 variable quarterly installments, from March 2023 to June 2027 and a balloon payment per tranche of $14,400 payable together with the last installment.
6. On June 24, 2019, Adele Shipping Co. entered into a loan agreement with a bank for an amount of up to $68,000, for the purpose of financing the acquisition cost of MSC Azov (Note 12) and general corporate purposes relating to the vessel. The facility was drawn down on July 12, 2019. As of December 31, 2022, the outstanding balance of the loan of $48,500 is repayable in 15 equal quarterly installments of $1,500, from January 2023 to June 2026 and a balloon payment of $26,000 payable together with the last installment.
7. On June 28, 2019, the Company entered into a loan agreement with a bank for an amount of up to $150,000, in order to partially refinance two term loans. Vessels Value, Valence and Vantage were provided as security. The facility was drawn down in three tranches on July 15, 2019. As of December 31, 2022, the outstanding balance of each tranche of $37,476.7, is repayable in 11 equal quarterly installments of $963.3 from January 2023 to July 2025 and a balloon payment of $26,880, each payable together with the last installment.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
8. On July 18, 2019, the Company entered into a loan agreement with a bank for an amount of up to $94,000, in order to partially refinance one term loan. Vessels Valor and Valiant were provided as security. The facility was drawn down in two tranches on July 24, 2019. On November 14, 2022, following the execution of the loan agreement discussed in Note 11.A.38, the then outstanding balance of $64,852 was fully repaid.
9. On February 13, 2020, the Company entered into a loan agreement with a bank for an amount of up to $30,000 in order to partly finance the acquisition cost of the vessels Vulpecula, Volans, Virgo and Vela. On February 18, 2020, the Company drew down the amount of $30,000 in four tranches. On January 31, 2022, the then outstanding balance of $24,554 of the loan was fully repaid (Note 11.A.33).
10. On April 24, 2020, Capetanissa Maritime Corporation, Christos Maritime Corporation, Costis Maritime Corporation, Joyner Carriers S.A. and Rena Maritime Corporation, entered into a loan agreement with a bank for an amount of up to $70,000, in order to refinance two term loans. The facility was drawn down on May 6, 2020. On March 8, 2022, the Company prepaid $3,062, due to the sale of vessel Messini (Note 7), on the then outstanding balance. On June 28, 2022, following the agreement of the loan discussed in Note 11.A.36, the Company prepaid the amount of $13,964 of the loan. On October 13, 2022, the Company prepaid $8,264, due to the sale of vessel York (Note 7). On December 7, 2022, the Company prepaid $8,503, due to the sale of vessel Sealand Washington (Note 23(c)). As of December 31, 2022, the outstanding balance of $15,671 is repayable in 10 equal quarterly installments of $742.3 from February 2023 to May 2025 and a balloon payment of $8,247.8 payable together with the last installment.
11. On May 29, 2020, Caravokyra Maritime Corporation, Costachille Maritime Corporation, Kalamata Shipping Corporation, Marina Maritime Corporation, Navarino Maritime Corporation and Merten Shipping Co., entered into a loan agreement with a bank for an amount of up to $70,000, in order to partly refinance one term loan. The facility was drawn down on June 4, 2020. On June 21, 2022, following the agreement of the loan discussed in Note 11.A.36, the Company prepaid the amount of $35,885 of the loan. On December 5, 2022, the Company prepaid $6,927.6, due to the sale of vessel Maersk Kalamata (Note 23(c)). As of December 31, 2022, the outstanding balance of $6,928 is repayable in 10 equal quarterly installments of $265 from March 2023 to June 2025 and a balloon payment of $4,277.6 payable together with the last installment.
12. On June 11, 2020, Achilleas Maritime Corporation, Angistri Corporation, Fanakos Maritime Corporation, Fastsailing Maritime Co., Flow Shipping Co., Idris Shipping Co., Leroy Shipping Co., Lindner Shipping Co., Miko Shipping Co., Spedding Shipping Co., Takoulis Maritime Corporation and Timpson Shipping Co., entered into a loan agreement with a bank for an amount of up to $70,000, in order to partly refinance one term loan. The facility was drawn down on June 17, 2020. On September 10, 2020 and September 16, 2020, the Company prepaid $1,450 and $4,878, respectively due to the sale of vessels Zagora and Singapore Express, on the then outstanding balance. On January 29, 2021 and May 21, 2021, the Company prepaid $4,861 and $1,012, respectively due to the sale of vessels Halifax Express and Prosper (Note 7), on the then outstanding balance. On June 4, 2021, the then outstanding balance of $50,105 of the loan was fully repaid.
13. On December 15, 2020, Kelsen Shipping Co. entered into a loan agreement with a bank for an amount of $8,100, in order to partially refinance one term loan. The facility was drawn down on December 17, 2020. On December 19, 2022, the then outstanding balance of $2,025 was fully repaid.
14. On November 10, 2020, Uriza Shipping S.A. entered into a loan agreement with a bank for an amount of $20,000, in order to refinance one term loan. The facility was drawn down on November 12, 2020. On June 29, 2022, following the execution of the agreement of the loan discussed in Note 11.A.36, the Company fully prepaid the then outstanding balance of $16,100 of the loan.
15. On January 27, 2021, Berg Shipping Co. entered into a loan agreement with a bank for an amount of $12,500, in order to finance the acquisition cost of the vessel Neokastro. The facility was drawn down on January 29, 2021. As of December 31, 2022, the outstanding balance of the loan of $10,540 is repayable in 13 equal quarterly installments of $280, from January 2023 to January 2026 and a balloon payment of $6,900 payable together with the last installment.
16. On March 16, 2021, Reddick Shipping Co. and Verandi Shipping Co. entered into a loan agreement with a bank for an amount of $18,500, in order to refinance one term loan and for general corporate purposes. The facility was drawn down in two tranches on March 23, 2021. On September 30, 2022, following the execution of the loan agreement discussed in Note 11.A.37, the then outstanding balance of $11,300 was fully repaid.
17. On March 18, 2021, Evantone Shipping Co. and Fortrose Shipping Co. entered into a loan agreement with a bank for an amount of $23,000 for the purpose of financing general corporate purposes. The facility was drawn down on March 23, 2021. As of December 31, 2022, the outstanding balance of the loan of $17,750 is repayable in 13 equal quarterly installments of $750, from March 2023 to March 2026 and a balloon payment of $8,000 payable together with the last installment.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
18. On March 19, 2021, Ainsley Maritime Co. and Ambrose Maritime Co. entered into a loan agreement with a bank for an amount of $150,000, in order to refinance two term loans (Note 7) and for general corporate purposes. The facility was drawn down in two tranches on March 24, 2021. As of December 31, 2022, the outstanding balance of each tranche of $65,625 is repayable in 33 equal quarterly installments of $1,339.3, from March 2023 to March 2031 and a balloon payment of $21,428.6 each payable together with the last installment.
19. On March 24, 2021, Hyde Maritime Co. and Skerrett Maritime Co. entered into a loan agreement with a bank for an amount of $147,000, in order to refinance two term loans (Note 7) and for general corporate purposes. The facility was drawn down in two tranches on March 26, 2021. On December 20, 2022, the loan agreement was amended, resulting in the extension of the repayment period until March 2029. As of December 31, 2022, the outstanding balance of Tranche A of $63,605.8 is repayable in 25 equal quarterly installments of $1,413.5, from March 2023 to March 2029 and a balloon payment of $28,269.2 payable together with the last installment. As of December 31, 2022, the outstanding balance of Tranche B of $63,605.8 is repayable in 25 equal quarterly installments of $1,413.5, from March 2023 to March 2029 and a balloon payment of $28,269.2 payable together with the last installment.
20. On March 29, 2021, Kemp Maritime Co. entered into a loan agreement with a bank for an amount of $75,000, in order to refinance one term loan (Note 7) and for general corporate purposes. The facility was drawn down on March 30, 2021. As of December 31, 2022, the outstanding balance of the loan of $64,300 is repayable in 25 variable quarterly installments from March 2023 to March 2029 and a balloon payment of $28,600 payable together with the last installment.
21. On March 29, 2021, Vernes Shipping Co. entered into a loan agreement with a bank for an amount of $14,000, in order to finance the acquisition cost of the vessel Glen Canyon (Note 7). The facility was drawn down on March 31, 2021. On June 21, 2022, following the execution of the agreement of the loan discussed in Note 11.A.36, the Company fully prepaid the then outstanding balance of $12,200 of the loan.
22. On June 1, 2021, Achilleas Maritime Corporation, Angistri Corporation, Fanakos Maritime Corporation, Fastsailing Maritime Co., Lindner Shipping Co., Miko Shipping Co., Saval Shipping Co., Spedding Shipping Co., Tanera Shipping Co., Timpson Shipping Co. and Wester Shipping Co., entered into a loan agreement with a bank for an amount of up to $158,105, in order to partly refinance one term loan and to finance the acquisition cost of the vessels Porto Cheli, Porto Kagio and Porto Germeno (Note 7). The facility was drawn down in four tranches. On June 4, 2021, the Refinancing tranche of $50,105 and Tranche C of $38,000 were drawn down, on June 7, 2021, Tranche A of $35,000 was drawn down and on June 24, 2021, Tranche B of $35,000 was drawn down. On August 12, 2021, the Company prepaid $7,395.1 due to the sale of vessel Venetiko (Note 7), on the then outstanding balance. On October 12, 2021 and October 25, 2021, the Company prepaid $6,531 and $6,136, respectively due to the sale of ZIM Shanghai and ZIM New York (Note 7), on the then outstanding balance. On October 7, 2022, the Company prepaid $6,492, due to the sale of Sealand Illinois (Note 7), on the then outstanding balance. As of December 31, 2022, the outstanding balance of the Refinancing tranche of $14,974.4 is repayable in 14 equal quarterly installments of $989.2 payable from March 2023 to June 2026 and a balloon payment of $1,125.6, payable together with the last installment. As of December 31, 2022, the outstanding balance of Tranche A of $26,000 is repayable in 14 equal quarterly installments of $1,500, from March 2023 to June 2026 and a balloon payment of $5,000 payable together with the last installment. As of December 31, 2022, the outstanding balance of Tranche B of $26,000 is repayable in 14 equal quarterly installments of $1,500, from March 2023 to June 2026 and a balloon payment of $5,000 payable together with the last installment. On February 1, 2022, the then outstanding balance of Tranche C of $34,730 was fully repaid (Note 11.A.33).
23. On June 7, 2021, Novara Shipping Co., Finney Shipping Co., Alford Shipping Co. and Nisbet Shipping Co. entered into a loan agreement with a bank for an amount of up to $79,000, in order to finance the acquisition cost of the vessels Androusa, Norfolk, Gialova and Dyros (Note 7). The first two tranches of the facility of $22,500 each, were drawn on June 10, 2021, the third tranche of $22,500 was drawn on August 25, 2021, while the fourth tranche of $11,500 was drawn on January 18, 2022. As of December 31, 2022, the aggregate outstanding balance $36,360 of the first two tranches, is repayable in 10 variable quarterly installments from March 2023 to June 2025 and a balloon payment of $24,120 in the aggregate, payable together with the last installment. As of December 31, 2022, the outstanding balance of the third tranche of $18,562.5, is repayable in 11 variable quarterly installments from February 2023 to August 2025 with a balloon payment of $10,980, payable together with the last installment. As of December 31, 2022, the outstanding balance of the fourth tranche of $10,120, is repayable in 13 variable quarterly installments from January 2023 to January 2026 with a balloon payment of $4,692, payable together with the last installment.
24. On July 8, 2021, the Company entered into a loan agreement with a bank for an amount of up to $62,500, in order to finance the acquisition cost of the vessels Pegasus, Eracle, Peace, Sauvan, Pride, Acuity, Comity and Athena (Note 7). An aggregate amount of $49,236.3, was drawn during July 2021, an amount of $7,300 was drawn in August 2021 and an amount of $5,963.8 was drawn in October 2021, to finance the acquisition of the eight vessels. As of December 31, 2022, the aggregate outstanding balance of $49,095 is repayable in variable quarterly installments from January 2023 to October 2026 with an aggregate balloon payment of $17,684.5 that is payable together with the respective last installments.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
25. On July 9, 2021, the Company entered into a loan agreement with a bank for an amount of up to $81,500, in order to finance the acquisition cost of the vessels Builder, Adventure, Manzanillo, Alliance, Seabird, Aeolian, Farmer and Greneta (Note 7). Five tranches of the facility with aggregate amount of $44,620 were drawn during July 2021 to finance the acquisition of the first five vessels, one tranche amounting to $12,480 was drawn in August 2021 to finance the acquisition of the vessel Aeolian, one tranche amounting to $13,250 was drawn in October 2021 to finance the acquisition of the vessel Farmer and one tranche amounting to $11,150 was drawn in December 2021 to finance the acquisition of the vessel Greneta. On November 21, 2022, following the execution of the agreement of the loan discussed in Note 11.A.39, the Company fully prepaid the then outstanding balance of $10,220 of the tranche regarding the vessel Greneta. On December 20, 2022, following the execution of the agreement of the loan discussed in Note 11.A.41, the Company fully prepaid the then outstanding balance of $62,788 of the loan.
26. On July 12, 2021, the Company entered into a revolving facility agreement for an amount of up to $24,500, for the purpose of financing general and working capital purposes. The amount of $24,500 was drawn down on July 15, 2021. On November 1, 2021, the Company fully prepaid the outstanding balance of $24,500.
27. On July 16, 2021, the Company entered into a hunting license facility agreement with a bank for an amount of up to $120,000, in order to finance the acquisition cost of the vessels Bernis, Verity, Dawn, Discovery, Clara, Serena, Parity, Taibo, Thunder, Curacao, Equity and Rose (Note 7). Three tranches of the facility with an aggregate amount of $34,200 were drawn during July 2021, to finance the acquisition of the first three vessels, three tranches of the facility with an aggregate amount of $28,050 were drawn during August 2021, to finance the acquisition of the subsequent three vessels, three tranches of the facility with an aggregate amount of $27,600 were drawn during September 2021, to finance the acquisition of the subsequent three vessels and three last tranches of the facility with an aggregate amount of $30,150 were drawn during October and November 2021, to finance the acquisition of the last three vessels. On December 21, 2021, the Company prepaid the amount of $38,844 regarding the tranches of vessels Clara, Rose, Thunder and Equity (Note 11.A.30). On January 7, 2022, the Company prepaid the amount of $51,885 regarding the tranches of vessels Bernis, Verity, Dawn, Discovery and Parity (Note 11.A.31). As of December 31, 2022, the aggregate outstanding balance of $24,387 is repayable in variable quarterly installments from January 2023 to October 2026 with an aggregate balloon payment of $12,570 that is payable together with the respective last installments.
28. On July 27, 2021, Amoroto Marine Corp., Bermeo Marine Corp., Bermondi Marine Corp., Briande Marine Corp., Camarat Marine Corp., Camino Marine Corp., Canadel Marine Corp., Cogolin Marine Corp., Fruiz Marine Corp., Gajano Marine Corp., Gatika Marine Corp., Guernica Marine Corp., Laredo Marine Corp., Onton Marine Corp. and Solidate Marine Corp. amongst others, entered into a hunting license facility agreement with a bank for an amount of up to $125,000, in order to finance the acquisition cost of the vessels Progress, Merida, Miner, Uruguay, Resource, Konstantinos, Cetus, Titan I, Bermondi, Orion, Merchia and Damon (Note 7), as well as the acquisition of further vessels. Two tranches of the facility with an aggregate amount of $18,000 were drawn during August 2021 to finance the acquisition of the first two vessels, four tranches of the facility with an aggregate amount of $32,430 were drawn during September 2021 to finance the acquisition of the subsequent four vessels, one tranche of the facility with an aggregate amount of $7,347 was drawn during October 2021 to finance the acquisition of the vessel Cetus, three tranches of the facility with an aggregate amount of $33,645 were drawn during November 2021 to finance the acquisition of the subsequent three vessels, one tranche of the facility with an amount of $14,100 was drawn in December 2021 to finance the acquisition of the subsequent vessel and one tranche of the facility with an amount of $13,374 was drawn in January 2022 to the finance the acquisition of the last vessel. On April 29, 2022, Amoroto Marine Corp., Bermondi Marine Corp., Camarat Marine Corp. and Cogolin Marine Corp. prepaid the aggregate amount $38,020 (Note 11.A.35). As of December 31, 2022, the aggregate outstanding balance of $67,882 is repayable in variable quarterly installments from January 2023 to January 2027 with an aggregate balloon payment of $41,926.2 that is payable together with the respective last installments.
29. On September 10, 2021, the Company entered into a hunting license facility agreement with a bank for an amount of up to $150,000 in order to finance part of the acquisition cost of dry bulk vessels. On April 19, 2022, the Company terminated the hunting license facility agreement.
30. On December 10, 2021, Dattier Marine Corp., Dramont Marine Corp., Gassin Marine Corp. and Merle Marine Corp. entered into a loan agreement with a bank for an amount of up to $43,500, in order to refinance the term loan of the vessels Equity, Thunder, Rose and Clara discussed in Note 11.A.27. The facility was drawn down on December 20, 2021. On May 11, 2022, the Dattier Marine Corp. prepaid the amount of $10,645, due to the sale of vessel Thunder (Note 7), on the then outstanding balance. On November 21, 2022, following the execution of the agreement of the loan discussed in Note 11.A.39, the Company prepaid the then outstanding balance of $19,562.5 of the tranches regarding the vessels Clara and Rose. On December 20, 2022, following the execution of the agreement of the loan discussed in Note 11.A.41, the Company fully prepaid the then outstanding balance of $9,390 of the loan.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
31. On December 24, 2021, Bernis Marine Corp., Andati Marine Corp., Barral Marine Corp., Cavalaire Marine Corp. and Astier Marine Corp. entered into a loan agreement with a bank for an amount of up to $55,000, in order to refinance the term loan of the vessels Bernis, Verity, Dawn, Discovery and Parity discussed in Note 11.A.27. On January 5, 2022, Bernis Marine Corp., Andati Marine Corp., Barral Marine Corp., Cavalaire Marine Corp. and Astier Marine Corp. drew down the aggregate amount of $52,525, in order to refinance in part the term loan discussed in Note 11.A.27. As of December 31, 2022, the aggregate outstanding balance of $47,883.7 is repayable in 17 equal quarterly installments of $1,547.1, from January 2023 to January 2027 and a balloon payment of $21,583 payable together with the last installment.
32. On December 28, 2021, the Company entered into a hunting license facility agreement with a bank for an amount of up to $100,000 in order to finance the acquisition cost of the secondhand dry bulk vessels Pythias, Hydrus, Phoenix, Oracle and Libra (Note 7). During January 2022, the Company drew down the aggregate amount of $56,700. As of December 31, 2022, the aggregate outstanding balance of $52,361 is repayable in variable quarterly installments, from January 2023 to January 2028 with an aggregate balloon payment of $26,807.5 that is payable together with the respective last installments.
33. On January 26, 2022, the Company entered into a loan agreement with a bank for an amount of up to $85,000 in order to refinance the term loan discussed in Note 11.A.9, Tranche C of the term loan discussed in Note 11.A.22 and for general corporate purposes. On January 31, 2022, the Company drew down the amount of $85,000. As of December 31, 2022, the outstanding balance of $62,500 is repayable in 13 variable quarterly installments, from January 2023 to January 2026 and a balloon payment of $19,000 payable together with the last installment.
34. On April 5, 2022, Adstone Marine Corp., Barlestone Marine Corp., Bilstone Marine Corp., Cromford Marine Corp., Featherstone Marine Corp., Hanslope Marine Corp., Kinsley Marine Corp., Nailstone Marine Corp., Oldstone Marine Corp., Ravenstone Marine Corp., Rocester Marine Corp., Shaekerstone Marine Corp., Silkstone Marine Corp., Snarestone Marine Corp. and Sweptstone Marine Corp. signed a hunting license loan agreement with a bank for an amount of up to $120,000, in order to partly finance the acquisition of the secondhand dry bulk vessel Norma (ex. Magda) (Note 7). On April 11, 2022, Adstone Marine Corp. drew down the amount of $10,800. On December 20, 2022, following the execution of the agreement of the loan discussed in Note 11.A.41, the Company fully prepaid the then outstanding balance of $10,125 of the loan.
35. On April 21, 2022, Amoroto Marine Corp., Bermondi Marine Corp., Camarat Marine Corp. and Cogolin Marine Corp. entered into a loan agreement with a bank for an amount of up to $40,500 in order to refinance the term loan of the vessels Merida, Bermondi, Titan I and Uruguay discussed in Note 11.A.28 and for general corporate purposes. On April 28, 2022, Amoroto Marine Corp., Bermondi Marine Corp., Camarat Marine Corp. and Cogolin Marine Corp. drew down the amount of $40,500. As of December 31, 2022, the aggregate outstanding balance of $33,700 is repayable in 14 variable quarterly installments, from January 2023 to April 2026 with an aggregate balloon payment of $10,940 that is payable together with the respective last installments.
36. On May 12, 2022, Benedict Maritime Co., Caravokyra Maritime Corporation, Costachille Maritime Corporation, Navarino Maritime Corporation, Duval Shipping Co., Jodie Shipping Co., Kayley Shipping Co., Madelia Shipping Co., Marina Maritime Corporation, Percy Shipping Co., Plange Shipping Co., Rena Maritime Corporation, Rockwell Shipping Co., Simone Shipping Co., Vernes Shipping Co., Virna Shipping Co. and Uriza Shipping S.A. signed a syndicated loan agreement for an amount of up to $500,000 in order to partly refinance the term loans discussed in Notes 11.A.4, 11.A.10, 11.A.11, to refinance the term loans discussed in Notes 11.A.14 and 11.A.21, to finance the acquisition cost of one vessel under a financing agreement discussed in Note 11.B.2, to finance the acquisition cost of the four vessels under the finance leases discussed in Note 12 and for general corporate purposes. During June 2022, Benedict Maritime Co., Caravokyra Maritime Corporation, Costachille Maritime Corporation, Navarino Maritime Corporation, Duval Shipping Co., Jodie Shipping Co., Kayley Shipping Co., Madelia Shipping Co., Marina Maritime Corporation, Percy Shipping Co., Plange Shipping Co., Rena Maritime Corporation, Rockwell Shipping Co., Simone Shipping Co., Vernes Shipping Co., Virna Shipping Co. and Uriza Shipping S.A. drew down the aggregate amount of $500,000. As of December 31, 2022, the aggregate outstanding balance of $458,952 is repayable in 18 variable quarterly installments, from March 2023 to June 2027 with an aggregate balloon payment of $89,523.8 that is payable together with the respective last installments.
37. On September 29, 2022, Reddick Shipping Co. and Verandi Shipping Co. signed a loan agreement with a bank for an amount of $46,000 in order to refinance the term loan discussed in Note 11.A.16. On September 30, 2022, Reddick Shipping Co. and Verandi Shipping Co. drew down the amount of $46,000. As of December 31, 2022, the outstanding balance of $43,500 is repayable in 15 variable quarterly installments, from March 2023 to September 2026.
38. On November 11, 2022, Quentin Shipping Co. and Sander Shipping Co. signed a loan agreement with a bank for an amount of $85,000 in order to refinance the term loan discussed in Note 11.A.8. On November 14, 2022, Quentin Shipping Co. and Sander Shipping Co. drew down in two tranches the aggregate amount of $85,000. As of December 31, 2022, the outstanding balance of each tranche of $42,500 is repayable in 32 equal quarterly installments of $1,296.9, from February 2023 to November 2030 and a balloon payment of $1,000 payable together with the last installment.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
39. On November 17, 2022, Greneta Marine Corp., Merle Marine Corp. and Gassin Marine Corp. amongst others, signed a loan agreement with a bank for an amount of $30,000 in order to partly refinance the term loans discussed in Note 11.A.25 and Note 11.A.30. On November 22, 2022, Greneta Marine Corp., Merle Marine Corp. and Gassin Marine Corp. drew down the amount of $30,000. As of December 31, 2022, the aggregate outstanding balance of $30,000 is repayable in 24 variable quarterly installments, from February 2023 to November 2028 with an aggregate balloon payment of $6,273.8 that is payable together with the respective last installment.
40. On December 14, 2022, Bastian Shipping Co., Cadence Shipping Co., Adele Shipping Co., Raymond Shipping Co., Terance Shipping Co., Undine Shipping Co., Tatum Shipping Co., Singleton Shipping Co., Evantone Shipping Co. and Fortrose Shipping Co. signed a loan agreement with a bank for an amount of $322,830 in order to refinance the term loans discussed in Notes 11.A.2, 11.A.5, 11.A.6, 11.A.7 and 11.A.17 and for general corporate purposes. No drawdown had occurred as of December 31, 2022 (Note 23(d)).
41. On December 15, 2022, Adstone Marine Corp., Auber Marine Corp., Barlestone Marine Corp., Bilstone Marine Corp., Blondel Marine Corp., Cromford Marine Corp., Dramont Marine Corp., Featherstone Marine Corp., Lenval Marine Corp., Maraldi Marine Corp., Rivoli Marine Corp., Terron Marine Corp. and Valrose Marine Corp. signed a secured floating interest rate loan agreement with a bank for an amount of $120,000 in order to partly refinance the term loans discussed in Notes 11.A.25 and 11.A.30. On December 20, 2022, the amount of $82,885 was drawn down. As of December 31, 2022, the aggregate outstanding balance of $82,885 is repayable in variable quarterly installments, from January 2023 to December 2028 with an aggregate balloon payment of $33,085.7 that is payable together with the respective last installments.
The term loans discussed above bear interest at LIBOR (applicable to all loans discussed above except the loans discussed in Notes 11.A.35, 11.A.36, 11.A.37, 11.A.38, 11.A.39, 11.A.40 and 11.A.41 and the loan discussed in Note 11.A.19 which bears a fixed rate) or Term Secured Overnight Financing Rate (“SOFR”) (applicable to the loans discussed in Notes 11.A.35, 11.A.37, 11.A.38, 11.A.39 and 11.A.41) or Daily Non-Cumulative Compounded SOFR (applicable to the loans discussed in Notes 11.A.36 and 11.A.40), plus a spread and are secured by, inter alia, (a) first-priority mortgages over the financed vessels, (b) first priority assignments of all insurances and earnings of the mortgaged vessels and (c) corporate guarantees of Costamare or its subsidiaries, as the case may be. The loan agreements contain usual ship finance covenants, including restrictions as to changes in management and ownership of the vessels, as to additional indebtedness and as to further mortgaging of vessels, as well as minimum requirements regarding hull Value Maintenance Clauses in the range of 100% to 125%, restrictions on dividend payments if an event of default has occurred and is continuing or would occur as a result of the payment of such dividend and may also require the Company to maintain minimum liquidity, minimum net worth, interest coverage and leverage ratios, as defined.
B. Other Financing Arrangements
1. In August 2018, the Company, through five wholly-owned subsidiaries, entered into five pre and post-delivery financing agreements with a financial institution for the five newbuild containerships (Note 7). The Company is required to repurchase each underlying vessel at the end of the lease and as such it has assessed that under ASC 606, the advances paid for the vessels under construction are not derecognized and the amounts received are accounted for as financing arrangements. The financing arrangements bear fixed interest and the interest expense incurred for the year ended December 31, 2021 amounted to $465, in the aggregate, and is capitalized in “Vessels and advances, net” in the accompanying 2021 consolidated balance sheet. The total financial liability under these financing agreements is repayable in 121 monthly installments beginning upon vessel delivery date including the amount of purchase obligation at the end of the agreements. As of December 31, 2022 and following the delivery of the five newbuilds (Note 7), the aggregate outstanding amount of their financing arrangements is repayable in various installments from January 2023 to May 2031 including the amount of purchase obligation at the end of each financing agreement. The financing arrangements bear fixed interest and for the year ended December 31, 2022, the interest expense incurred amounted to $17,821, in aggregate, ($16,715 for the year ended December 31, 2021 and $4,191 for the year ended December 31, 2020) and is included in Interest and finance costs in the accompanying 2022 consolidated statement of operations.
2. On November 12, 2018, the Company entered into a Share Purchase Agreement with York (the “York SPA”). As at that date, the Company assumed the financing arrangements that the five ship-owning companies had entered into for their vessels along with the obligation to pay the remaining part of the consideration under the provisions of the Share Purchase Agreement within the next 18 months from the date of the transaction. According to the financing arrangements, the Company is required to repurchase each underlying vessel at the end of the lease and as such it has assessed that under ASC 606 and ASC 840 the assumed financial liability is accounted for as a financing arrangement. The amount payable to York has been accounted for under ASC 480-Distinguishing liabilities from equity and has been measured under ASC 835-30- Imputation of interest in accordance with the interest method. On May 12, 2020, the outstanding amount of the Company’s obligation to York was fully repaid. On June 17, 2022, following the agreement of the loan discussed in Note 11.A.36, the Company prepaid the then outstanding amount of $77,435 under the York SPA in order to acquire the vessel Triton (Note 7). As at December 31, 2022, the aggregate outstanding amount of the four financing arrangements is repayable in various installments from February 2023 to October 2028 and a balloon payment for each of the four financing arrangements of $32,022, payable together with the last installment. The financing arrangements bear fixed interest and for the year ended December 31, 2022, the interest expense incurred amounted to $15,329 ($18,807 for the year ended December 31, 2021 and $28,410 for the year ended December 31, 2020), in aggregate, and is included in Interest and finance costs in the accompanying consolidated statements of operations.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
As of December 31, 2022, the aggregate outstanding balance of the financing arrangements under (1) and (2) above was $678,930.
C. Unsecured Bond Loan (“Bond Loan”)
In May 2021, the Company, through its wholly owned subsidiary, Costamare Participations Plc (the “Issuer”), issued €100 million of unsecured bonds to investors (the “Bond Loan”) and listed the bonds on the Athens Exchange. The Bond Loan will mature in May 2026 and carries a coupon of 2.70%, payable semiannually. The bond offering was completed on May 25, 2021. The trading of the Bonds on the Athens Exchange commenced on May 26, 2021. The net proceeds of the offering were used for the repayment of indebtedness, vessel acquisitions and working capital purposes.
The Bond Loan can be called in part (pro-rata) or in full by the Issuer on any coupon payment date, after the second anniversary and until 6 months prior to maturity. If the Bond Loan is redeemed (in part or in full) on i) the 5th and/or 6th coupon payment date, bondholders will receive a premium of 1.5% on the nominal amount of the bond redeemed, ii) the 7th and/or 8th coupon payment date, bondholders will receive a premium of 0.5% on the nominal amount of the bond redeemed; no premium shall be paid for a redemption occurring on the 9th coupon payment date. In case there is a material change in the tax treatment of the Bond Loan for the Issuer, then the Issuer has the right, at any time, to fully prepay the Bond Loan without paying any premium. The Issuer can exercise the early redemption right in part, one or more times, by pre-paying each time a nominal amount of bonds equal to at least €10 million, provided that the remaining nominal amount of the bonds after the early redemption is not lower than €50 million.
As of December 31, 2022, the outstanding balance of the bond amounted to $106,660. For the year ended December 31, 2022, the interest expense incurred amounted to $2,866 ($1,896 for the year ended December 31, 2021) and is included in Interest and finance costs in the accompanying consolidated statements of operations.
The annual repayments under the Term Loans, Other Financing Arrangements and Bond loan after December 31, 2022 are in the aggregate as follows:
Year ending December 31, | Amount | |||
2023 | $ | 325,611 | ||
2024 | 306,246 | |||
2025 | 443,699 | |||
2026 | 486,077 | |||
2027 | 343,568 | |||
2028 and thereafter | 702,333 | |||
Total | $ | 2,607,534 |
The interest rate of Costamare’s Term Loans and Other Financing Arrangements (inclusive of fixed rate Term Loans and the related cost of derivatives) as at December 31, 2020, 2021 and 2022, was in the range 2.07% - 6.34% ,1.82% - 4.80% and 2.99% - 7.47%, respectively. The weighted average interest rate of Costamare’s Term Loans and Other Financing Arrangements (inclusive of fixed rate Term Loans and the related cost of derivatives) as at December 31, 2020, 2021 and 2022, was 4.1%, 3.3% and 4.9%, respectively.
Total interest expense incurred on long-term debt including the effect of the hedging interest rate swaps (discussed in Notes 18 and 20) and capitalized interest for the years ended December 31, 2020, 2021 and 2022, amounted to $65,497, $74,017 and $104,613, respectively. Of the above amounts, $62,223, $73,552 and $104,613, are included in Interest and finance costs in the accompanying consolidated statements of operations for the years ended December 31, 2020, 2021 and 2022, respectively, whereas in 2020, an amount of $3,274 was capitalized and in 2021 an amount of $465.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
D. Financing Costs
The amounts of financing costs included in the loan balances and finance lease liabilities (Note 12) are as follows:
Balance, January 1, 2021 | $ | 14,080 | ||
Additions | 18,034 | |||
Amortization and write-off | (6,704 | ) | ||
Transfers and other movements | 306 | |||
Balance, December 31, 2021 | $ | 25,716 | ||
Additions | 7,347 | |||
Amortization and write-off | (10,255 | ) | ||
Transfers and other movements | 105 | |||
Balance, December 31, 2022 | $ | 22,913 | ||
Less: Current portion of financing costs | (5,497 | ) | ||
Financing costs, non-current portion | $ | 17,416 |
Financing costs represent legal fees and fees paid to the lenders for the conclusion of the Company’s financing. The amortization and write-off of loan financing costs is included in Interest and finance costs in the accompanying consolidated statements of operations (Note 18).
12. Right-of-Use Assets and Finance Lease Liabilities:
Between January and April 2014, the Company took delivery of the newbuild container vessels MSC Azov, MSC Ajaccio and MSC Amalfi. Upon the delivery of each vessel, the Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to these vessels by entering into a ten-year sale and leaseback transaction for each container vessel. The shipbuilding contracts were novated to the financial institution for an amount of $85,572 each. On June 18, 2019, Bastian Shipping Co. and Cadence Shipping Co. signed a loan agreement with a bank for the purpose of financing the acquisition costs of the MSC Ajaccio and the MSC Amalfi (Note 11.A.5). On July 12, 2019 and July 15, 2019, the two above-mentioned subsidiaries repaid the then outstanding lease liability of the two container vessels.
On June 24, 2019, Adele Shipping Co. signed a loan agreement with a bank for the purpose of financing the acquisition cost of the MSC Azov (Note 11.A.6). On July 12, 2019, the Company drew down the amount of $68,000 and on July 18, 2019 the above-mentioned subsidiary repaid the then outstanding lease liability of the container vessel.
On July 6, 2016 and July 15, 2016, the Company agreed with a financial institution to refinance the then outstanding balance of the loans relating to the container vessels MSC Athos and the MSC Athens, by entering into a seven-year sale and leaseback transaction for each vessel. In May 2019, a supplemental agreement was signed to the existing sale and leaseback facility with the financial institution for an additional amount of up to $12,000 in order to finance the installation of scrubbers on the containerships MSC Athens and MSC Athos. In September 2020, after the completion of the scrubber installation on the two vessels, the Company drew down the amount of $12,000 and the repayment of the outstanding liability was extended up to 2026. On May 12, 2022, Jodie Shipping Co. and Kayley Shipping Co. signed a syndicated loan agreement for the purpose of financing the acquisition costs of the MSC Athens and the MSC Athos (Note 11.A.36). On June 8, 2022, the Company exercised the options to re-purchase the two above-mentioned container vessels (Note 7) and the two above-mentioned subsidiaries prepaid the corresponding portion of the then outstanding lease liability. At the same date the Company derecognized the right-of-use assets regarding those vessels amounting to $152,982 and recognized vessels owned with the same amount within Vessels and advances, net.
On June 19, 2017, the Company entered into two seven-year sale and leaseback transactions with a financial institution for the container vessels Leonidio and Kyparissia. On May 12, 2022, Simone Shipping Co. and Plange Shipping Co. signed a syndicated loan agreement for the purpose of financing the acquisition costs of the Leonidio and the Kyparissia (Note 11.A.36). On June 15, 2022, the Company exercised the options to re-purchase the two above-mentioned container vessels (Note 7) and the two above-mentioned subsidiaries prepaid the corresponding portion of the then outstanding lease liability. At the same date, the Company derecognized the right-of-use assets regarding those vessels amounting to $34,924 and recognized vessels owned with the same amount within Vessels and advances, net.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The total value of the vessels, at the inception of the finance lease transactions, was $452,564, in the aggregate. The depreciation charged during the years ended December 31, 2020, 2021 and 2022, amounted to $7,096, $7,489 and $3,284, respectively, and is included in Depreciation in the accompanying consolidated statements of operations. As of December 31, 2021, and 2022, accumulated depreciation amounted to $35,220 and nil, respectively, and is included in Right-of-use assets, in the accompanying consolidated balance sheets. As of December 31, 2021, and 2022, the net book value of the vessels amounted to $191,303 and nil, respectively, and is separately reflected as Right-of-use assets, in the accompanying consolidated balance sheets.
Total interest expenses incurred on finance leases, for the years ended December 31, 2020, 2021 and 2022, amounted to $5,626, $4,661 and $2,109, respectively, and are included in Interest and finance costs in the accompanying consolidated statements of operations.
The total finance lease liabilities, net of related financing costs, are presented in the accompanying December 31, 2021 and 2022 consolidated balance sheet as follows:
December 31, 2021 | December 31, 2022 | |||||||
Finance lease liabilities – current | $ | 16,858 | $ | - | ||||
Less: current portion of financing costs | (182 | ) | - | |||||
Finance lease liabilities – non-current | 99,985 | - | ||||||
Less: non-current portion of financing costs | (296 | ) | - | |||||
Total | $ | 116,365 | $ | - |
13. Accrued Charter Revenue, Current and Non-Current, Unearned Revenue, Current and Non-Current and Time Charter Assumed, Current and Non-Current:
(a) Accrued Charter Revenue, Current and Non-Current: The amounts presented as current and non-current accrued charter revenue in the accompanying consolidated balance sheets as of December 31, 2021 and 2022, reflect revenue earned, but not collected, resulting from charter agreements providing for varying annual charter rates over their terms, which were accounted for on a straight-line basis at their average rates.
As at December 31, 2021, the net accrued charter revenue, totaling ($22,980), comprises of $7,361 separately reflected in Current assets, $8,183 separately reflected in Non-current assets, and ($38,524) (discussed in (b) below) included in Unearned revenue in current and non-current liabilities in the accompanying consolidated 2021 balance sheet. As at December 31, 2022, the net accrued charter revenue, totaling ($20,349), comprises of $10,885 separately reflected in Current assets, $11,627 separately reflected in Non-current assets, and ($42,861) (discussed in (b) below) included in Unearned revenue in current and non-current liabilities in the accompanying consolidated 2022 balance sheet. The maturities of the net accrued charter revenue as of December 31 of each year presented below are as follows:
Year ending December 31, | Amount | |||
2023 | $ | 2,564 | ||
2024 | (5,887 | ) | ||
2025 | (12,649 | ) | ||
2026 | (4,377 | ) | ||
Total | $ | (20,349 | ) |
(b) Unearned Revenue, Current and Non-Current: The amounts presented as current and non-current unearned revenue in the accompanying consolidated balance sheets as of December 31, 2021 and 2022, reflect: (a) cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met and (b) any unearned revenue resulting from charter agreements providing for varying annual charter rates over their term, which were accounted for on a straight-line basis at their average rate. During the year ended December 31, 2022, the amortization of the liability amounted to nil, ($621 and nil for the years ended December 31, 2021 and 2020, respectively) and is included in Voyage revenue in the accompanying consolidated statement of operations.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
December 31, 2021 | December 31, 2022 | |||||||
Hires collected in advance | $ | 19,173 | $ | 16,906 | ||||
Charter revenue resulting from varying charter rates | 38,524 | 42,861 | ||||||
Total | $ | 57,697 | $ | 59,767 | ||||
Less current portion | (23,830 | ) | (25,227 | ) | ||||
Non-current portion | $ | 33,867 | $ | 34,540 |
(c) Time Charter Assumed, Current and Non-Current: On November 12, 2018, the Company purchased the 60% equity interest it did not previously own, in the companies owning the containerships Triton, Titan, Talos, Taurus and Theseus. Any favorable lease terms associated with these vessels were recorded as an intangible asset (“Time charter assumed”) at the time of the acquisition and will be amortized over a period of 7.4 years. On March 29, 2021, the Company purchased the 51% equity interest it did not previously own, in the company owning the containership Cape Artemisio (Note 10). Any favorable lease term associated with this vessel was recorded as an intangible asset (“Time charter assumed”) at the time of the acquisition and will be amortized over a period of 4.3 years. As of December 31, 2021 and 2022, the aggregate balance of time charter assumed (current and non-current) was $865 and $667, respectively, and is separately reflected in the accompanying consolidated balance sheets. During the years ended December 31, 2020, 2021 and 2022, the amortization expense of Time charter assumed amounted to $192, ($424) and $198, respectively, and is included in Voyage revenue in the accompanying consolidated statements of operations.
14. Commitments and Contingencies
a) Time charters: As of December 31, 2022, future minimum contractual time charter revenues assuming 365 revenue days per annum per vessel and the earliest redelivery dates possible, based on vessels’ committed, non-cancellable, time charter contracts, are as follows:
Year ending December 31, | Amount | |||
2023 | $ | 832,687 | ||
2024 | 757,998 | |||
2025 | 651,507 | |||
2026 | 374,428 | |||
2027 | 223,638 | |||
2028 and thereafter | 504,571 | |||
Total | $ | 3,344,829 |
The above calculation includes the time charter arrangements of the Company’s vessels in operation as at December 31, 2022, but excludes the time charter arrangements of: 16 dry bulk vessels in operation for which their time charter rate is index-linked and seven dry bulk vessels and three container vessels (including the two container vessels held for sale (Note 7) as at December 31, 2022) for which the Company had not secured employment as of December 31, 2022. These arrangements as at December 31, 2022, have remaining terms of up to 105 months.
(b) Capital Commitments: The Company had no capital commitments as of December 31, 2022.
(c) Debt guarantees with respect to entities formed under the Framework Deed: As of December 31, 2022 and following the transaction with York discussed in Note 7, Costamare does not guarantee any loan with respect to entities formed under the Framework Deed.
(d) Other: Various claims, suits, and complaints, including those involving government regulations, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents or suppliers relating to the Company’s vessels. Currently, management is not aware of any such claims not covered by insurance or of any contingent liabilities, which should be disclosed, or for which a provision has not been established in the accompanying consolidated financial statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities not covered by insurance which should be disclosed or for which a provision should be established in the accompanying consolidated financial statements.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The Company is covered for liabilities associated with the vessels’ operations up to the customary limits provided by the Protection and Indemnity (“P&I”) Clubs, members of the International Group of P&I Clubs.
A subsidiary of the Company and Costamare Shipping are defendants and third-party defendants in lawsuits pending in the United States Court for the Central District of California relating to liabilities associated with damage to a pipeline and an oil spill that occurred in October 2021 off the coast of Long Beach, California. The oil spill was caused by the rupture of a pipeline owned by Amplify Energy Corp. and certain affiliates (“Amplify”). The claimants in the lawsuit allege that a vessel owned by one of the Company’s subsidiaries, the containership Beijing, dragged its anchor across the pipeline many months prior to the rupture, during a severe heavy wind event when numerous other vessels were unable to hold their ground and dragged their anchors, and contributed to the spill. The complaint alleges that a vessel owned by another containership company also dragged its anchor across the pipeline on the same day.
There are certain other claims outstanding, including a claim by certain insurers that provided liability insurance coverage to Amplify that was triggered by the discharge of oil from Amplify’s pipeline. The Company is defending against the allegations of the remaining claimants. The Company believes that adequate insurance is in place to cover any liability, if any should arise, from the remaining claims that have been asserted (Note 23(e)).
15. Non-controlling Interest
The Company through its wholly owned subsidiary Costamare Bulkers Holdings Limited (“CBHL”), has participated with three other investors (the “Other investors”) in the share capital increase by CBI whereby (i) CBHL became the holder of 100,000,000 common shares of CBI (representing 92.5% of the issued share capital of CBI) in exchange of $100,000 and (ii) the three Other investors acquired, in aggregate, 8,108,108 common shares of CBI (representing 7.5% of the issued share capital of CBI) in exchange of $3,750. On November 14, 2022, CBHL and the Other Investors entered into a shareholders agreement to regulate the operation of CBI. Pursuant to the shareholders agreement, an Other investor can sell its shares in CBI at any time after the earlier of (i) the date that the service contract (Note 3(g)) (the “Service Contract”) of the beneficial owner of that Other investor is terminated without cause by the relevant employer and (ii) November 22, 2025. In the event that the relevant Other investor seeks to sell its shares, according to the terms of the shareholders’ agreement it can do so by: (a) first offering all (and not part) of its shares to the remaining Other investors; (b) if the remaining Other investors don't accept to purchase all the offered shares, secondly by offering its shares to the Company; (c) if the Company does accept to purchase all the offered shares, thirdly by offering the shares to any third party; and (d) if no third party accepts to buy all the offered shares, fourthly by serving notice (the Put Notice) on the Company to purchase the offered shares at a cash price equaling 70% or, in the case the Service Contract was terminated without cause, 100% of their fair market value at the time of such Put Notice. In that case, the Company shall in effect redeem to the relevant Other investor the whole or part of the value of its shares.
Based upon the Company’s evaluation of the redemption provisions concerning redeemable noncontrolling interests as of December 31, 2022, the Company determined that the shareholder agreement contains provisions that require the Company to repurchase the non-controlling equity interest upon occurrence of specific triggering event that is not solely within control of the Company, and as such the Company classified the redeemable non-controlling interest outside of permanent equity. Moreover, the Company determined in accordance with authoritative accounting guidance that it was not probable that an event otherwise requiring redemption of any redeemable noncontrolling interest would occur (i.e., the date for such event was not set or such event is not certain to occur) and therefore the Company concluded that the non-controlling interest is not currently redeemable. Therefore, none of the redeemable noncontrolling interests were identified as mandatorily redeemable interests at such times, and the Company did not record any values in respect of any mandatorily redeemable interests. Therefore, the redeemable non-controlling interest was adjusted only for the portion of comprehensive income (loss) of the period. The changes to redeemable non-controlling interest in subsidiary during the year ended on December 31, 2022, were as follows:
Temporary equity – Redeemable non-controlling interest in subsidiary | Amount | |||
Balance, January 1, 2022 | $ | - | ||
Initial redeemable non-controlling interest in subsidiary | 3,750 | |||
Net loss attributable to non-controlling interest | (263 | ) | ||
Balance, December 31, 2022 | $ | 3,487 |
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
16. Common Stock and Additional Paid-In Capital:
(a) Common Stock: During each of the years ended December 31, 2021 and 2022, the Company issued 598,400 shares at par value of $0.0001 to Costamare Services pursuant to the Services Agreement (Note 3). The fair value of such shares was calculated based on the closing trading price at the date of issuance. There were no share-based payment awards outstanding during the year ended December 31, 2022.
On July 6, 2016, the Company implemented the Plan. The Plan offers holders of Company common stock the opportunity to purchase additional shares by having their cash dividends automatically reinvested in the Company’s common stock. Participation in the Plan is optional, and shareholders who decide not to participate in the Plan will continue to receive cash dividends, as declared and paid in the usual manner. During the year ended December 31, 2021, the Company issued 1,226,066 shares, at par value of $0.0001 to its common stockholders, at an average price of $10.3223 per share. During the year ended December 31, 2022, the Company issued 2,454,909 shares, at par value of $0.0001 to its common stockholders, at an average price of $12.3142 per share.
On November 30, 2021, the Company approved a share repurchase program of up to a maximum $150,000 of its common shares and up to $150,000 of its preferred shares. The timing of repurchases and the exact number of shares to be purchased will be determined by the Company’s management, in its discretion. As of December 31, 2021, no common shares had been repurchased under the share repurchase program. During the year ended December 31, 2022, the Company repurchased, under the share repurchase program, 4,736,702 common shares at an aggregate cost of $60,095.
As of December 31, 2022, the aggregate issued share capital was 127,038,413 common shares at par value of $0.0001. As of December 31, 2022 the issued share capital outstanding after deducting the treasury stock repurchased was 122,301,711 common shares.
(b) Preferred Stock: During the year ended December 31, 2020, the Company repurchased and retired 95,574 preferred shares of all classes in the aggregate, at an average price of $17.63 per share. The face value of the preferred shares was cleared from Additional Paid-in Capital while the gain from this transaction, resulting as the difference between the fair value of the consideration paid and the carrying value of the preferred stock, was posted to retained earnings and added to net income to arrive at income available to common stockholders in the calculation of the earnings per share for the period (Note 17).
(c) Additional Paid-in Capital: The amounts shown in the accompanying consolidated balance sheets, as additional paid-in capital include: (i) payments made by the stockholders at various dates to finance vessel acquisitions in excess of the amounts of bank loans obtained, (ii) the difference between the par value of the shares issued in the Initial Public Offering in November 2010 and the offerings in March 2012, October 2012, August 2013, January 2014, May 2015, December 2016, May 2017 and January 2018 and the net proceeds received from the issuance of such shares excluding the shares bought back during the year ended December 31, 2020 and 2022, (iii) the difference between the par value and the fair value of the shares issued to Costamare Shipping and Costamare Services (Note 3), (iv) the difference between the par value of the shares issued under the Plan and (v) the capital contribution resulted from the common control transaction with Longshaw (Note 3).
(d) Dividends declared and / or paid: During the year ended December 31, 2021, the Company declared and paid to its common stockholders $0.10 per common share and, after accounting for shareholders participating in the Plan, the Company paid (i) $9,342 in cash and issued 362,866 shares pursuant to the Plan for the fourth quarter of 2020 and (ii) $9,360 in cash and issued 275,457 shares pursuant to the Plan for the first quarter of 2021 and for the second and third quarters of 2021, the Company declared and paid $0.115 per common share to its common stockholders and, after accounting for shareholders participating in the Plan, the Company paid (iii) $10,755 in cash and issued 322,274 shares pursuant to the Plan for the second quarter of 2021 and (iv) $10,738 in cash and issued 265,469 shares pursuant to the Plan for the third quarter of 2021. During the year ended December 31, 2022, the Company declared and paid to its common stockholders (i) $0.115 per common share and, after accounting for shareholders participating in the Plan, the Company paid $10,745 in cash and issued 274,939 shares pursuant to the Plan for the fourth quarter of 2021, (ii) $0.615 per common share and, after accounting for shareholders participating in the Plan, the Company paid $57,479 in cash and issued 1,420,709 shares pursuant to the Plan for the first quarter of 2022 and for the second and third quarters of 2022, the Company declared and paid $0.115 per common share to its common stockholders and, after accounting for shareholders participating in the Plan, the Company paid (iii) $10,250 in cash and issued 330,961 shares pursuant to the Plan for the second quarter of 2022 and (iv) $10,006 in cash and issued 428,300 shares pursuant to the Plan for the third quarter of 2022.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the year ended December 31, 2021, the Company declared and paid to its holders of Series B Preferred Stock (i) $939, or $0.476563 per share for the period from October 15, 2020 to January 14, 2021, (ii) $939, or $0.476563 per share for the period from January 15, 2021 to April 14, 2021, (iii) $939, or $0.476563 per share, for the period from April 15, 2021 to July 14, 2021 and (iv) $939, or $0.476563 per share, for the period from July 15, 2021 to October 14, 2021. During the year ended December 31, 2022, the Company declared and paid to its holders of Series B Preferred Stock (i) $939, or $0.476563 per share for the period from October 15, 2021 to January 14, 2022, (ii) $939, or $0.476563 per share for the period from January 15, 2022 to April 14, 2022, (iii) $939, or $0.476563 per share, for the period from April 15, 2022 to July 14, 2022 and (iv) $939, or $0.476563 per share, for the period from July 15, 2022 to October 14, 2022.
During the year ended December 31, 2021, the Company declared and paid to its holders of Series C Preferred Stock (i) $2,111, or $0.531250 per share for the period from October 15, 2020 to January 14, 2021, (ii) $2,111, or $0.531250 per share for the period from January 15, 2021 to April 14, 2021, (iii) $2,111, or $0.531250 per share, for the period from April 15, 2021 to July 14, 2021 and (iv) $2,111, or $0.531250 per share, for the period from July 15, 2021 to October 14, 2021. During the year ended December 31, 2022, the Company declared and paid to its holders of Series C Preferred Stock (i) $2,111, or $0.531250 per share for the period from October 15, 2021 to January 14, 2022, (ii) $2,111, or $0.531250 per share for the period from January 15, 2022 to April 14, 2022, (iii) $2,111, or $0.531250 per share, for the period from April 15, 2022 to July 14, 2022 and (iv) $2,111, or $0.531250 per share, for the period from July 15, 2022 to October 14, 2022.
During the year ended December 31, 2021, the Company declared and paid to its holders of Series D Preferred Stock (i) $2,180, or $0.546875 per share for the period from October 15, 2020 to January 14, 2021, (ii) $2,180, or $0.546875 per share for the period from January 15, 2021 to April 14, 2021, (iii) $2,180, or $0.546875 per share, for the period from April 15, 2021 to July 14, 2021 and (iv) $2,180, or $0.546875 per share, for the period from July 15, 2021 to October 14, 2021. During the year ended December 31, 2022, the Company declared and paid to its holders of Series D Preferred Stock (i) $2,180, or $0.546875 per share for the period from October 15, 2021 to January 14, 2022, (ii) $2,180, or $0.546875 per share for the period from January 15, 2022 to April 14, 2022, (iii) $2,180, or $0.546875 per share, for the period from April 15, 2022 to July 14, 2022 and (iv) $2,180, or $0.546875 per share, for the period from July 15, 2022 to October 14, 2022.
During the year ended December 31, 2021, the Company declared and paid to its holders of Series E Preferred Stock (i) $2,537, or $0.554688 per share for the period from October 15, 2020 to January 14, 2021, (ii) $2,537, or $0.554688 per share for the period from January 15, 2021 to April 14, 2021, (iii) $2,537, or $0.554688 per share, for the period from April 15, 2021 to July 14, 2021 and (iv) $2,537, or $0.554688 per share, for the period from July 15, 2021 to October 14, 2021. During the year ended December 31, 2022, the Company declared and paid to its holders of Series E Preferred Stock (i) $2,537, or $0.554688 per share for the period from October 15, 2021 to January 14, 2022, (ii) $2,537, or $0.554688 per share for the period from January 15, 2022 to April 14, 2022, (iii) $2,537, or $0.554688 per share, for the period from April 15, 2022 to July 14, 2022 and (iv) $2,537, or $0.554688 per share, for the period from July 15, 2022 to October 14, 2022.
17. Earnings per share
All common shares issued are Costamare common stock and have equal rights to vote and participate in dividends. Profit or loss attributable to common equity holders is adjusted by the contractual amount of dividends on Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock that should be paid for the period. Dividends paid or accrued on Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock during the years ended December 31, 2020, 2021 and 2022, amounted to $31,082, $31,068 and $31,068, respectively.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
For the year ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Basic LPS | Basic EPS | Basic EPS | ||||||||||
Net income | $ | 8,877 | $ | 435,121 | $ | 554,692 | ||||||
Less: Net loss attributable to the non-controlling interest | - | - | 263 | |||||||||
Net income attributable to Costamare Inc. | 8,877 | 435,121 | 554,955 | |||||||||
Less: paid and accrued earnings allocated to Preferred Stock | (31,082 | ) | (31,068 | ) | (31,068 | ) | ||||||
Add: gain from retirement of Preferred Stock | 619 | - | - | |||||||||
Net income / (loss) available to common stockholders | (21,586 | ) | 404,053 | 523,887 | ||||||||
Weighted average number of common shares, basic and diluted | 120,696,130 | 123,070,730 | 122,964,358 | |||||||||
Earnings / (losses) per common share, basic and diluted | $ | (0.18 | ) | $ | 3.28 | $ | 4.26 |
18. Interest and Finance Costs:
The Interest and finance costs in the accompanying consolidated statements of operations are as follows:
For the year ended December 31, | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Interest expense | $ | 66,526 | $ | 72,261 | $ | 107,205 | ||||||
Interest capitalized | (3,274 | ) | (465 | ) | - | |||||||
Derivatives’ effect | 1,323 | 6,417 | (483 | ) | ||||||||
Amortization and write-off of financing costs | 3,645 | 6,520 | 10,255 | |||||||||
Amortization of excluded component related to cash flow hedges | - | - | 1,286 | |||||||||
Bank charges and other financing costs | 482 | 1,314 | 3,970 | |||||||||
Total | $ | 68,702 | $ | 86,047 | $ | 122,233 |
19. Taxes:
Under the laws of the countries of incorporation for the vessel-owning companies and/or of the countries of registration of the vessels, the companies are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in Vessel operating expenses in the accompanying consolidated statements of operations.
The vessel-owning companies with vessels that have called on the United States during the relevant year of operation are obliged to file tax returns with the Internal Revenue Service. The applicable tax is 50% of 4% of U.S.-related gross transportation income unless an exemption applies. Management believes that, based on current legislation the relevant vessel-owning companies are entitled to an exemption under Section 883 of the Internal Revenue Code of 1986, as amended.
20. Derivatives:
(a) Interest rate and Cross-currency swaps and interest rate caps that meet the criteria for hedge accounting: The Company manages its exposure to floating interest rates and foreign currencies by entering into interest rate swaps, interest rate caps and cross-currency rate swap agreements with varying start and maturity dates.
The interest rate swaps are designed to hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in three-month or six-month USD LIBOR or SOFR. According to the Company’s Risk Management Accounting Policy, after putting in place the formal documentation at the inception of the hedging relationship, as required by ASC 815, following the adoption of ASU 2017-12, these interest rate derivatives instruments qualified for hedge accounting. The change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Accumulated Other Comprehensive Income” and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in Interest and finance costs. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Gain / (Loss) on derivative instruments.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the year ended December 31, 2022, the Company entered into a series of eight interest rate cap agreements with a facility counterparty relating to the loan discussed in Note 11.A.24, with a total notional amount of $54,784 to limit the maximum interest rate on the variable-rate debt of the mentioned loan and limit exposure to interest rate variability when three-month LIBOR exceeds 1.50%. Furthermore, during the same period, the Company entered into a series of 12 interest rate cap agreements with other counterparties relating to the loans discussed in Notes 11.A.6, 11.A.22, 11.A.27, 11.A.28, 11.A.31, 11.A.32 and 11.A.36, with a total notional amount of $562,285 to limit the maximum interest rate on the variable-rate debt of the mentioned loans and limit exposure to interest rate variability when three-month LIBOR or SOFR exceeds 3.00%. The interest rate caps were accounted for as cash flow hedges because they are expected to be highly effective in hedging exposure to variable rate interest payments under the loans discussed in Notes 11.A.6, 11.A.22, 11.A.24, 11.A.27, 11.A.28, 11.A.31, 11.A.32 and 11.A.36. The Company assessed at the inception of these interest rate caps that only intrinsic value shall be included in the assessment of hedge effectiveness. The Company paid a premium of $12,948 in aggregate, representing the time value of the interest rate caps at their inception. The time value has been excluded from the assessment of hedge effectiveness and is being recognized in earnings using a systematic and rational method over the duration of the respective interest rate caps. Changes in the fair value of the interest rate caps are reported within Accumulated other comprehensive income. The interest rate caps mature during the period from July 2024 to January 2028. The fair value of these interest rate cap derivative instruments outstanding as of December 31, 2022 amounted to an asset of $24,939, and is included in the Fair value of derivatives current and non-current in the accompanying December 31, 2022 consolidated balance sheet.
During the year ended December 31, 2022, the Company entered into two interest rate swap agreements with an aggregate notional amount of $85,000, which both met hedge accounting criteria according to ASC 815.
During the year ended December 31, 2021, the Company entered into three interest rate swap agreements with an aggregate notional amount of $225,000, which met hedge accounting criteria according to ASC 815. Furthermore, during the year ended December 31, 2021, the Company entered into two cross-currency swap agreements, which converted the Company’s variability of the interest and principal payments in Euro into USD functional currency cash flows with respect to the Unsecured Bond (Note 11(c)), in order to hedge its exposure to fluctuations deriving from Euro. The two cross-currency swaps are designated as cash flow hedging Instruments for accounting purposes.
As of December 31, 2022, the notional amount of the two cross-currency swaps was $122,375 in the aggregate. The principal terms of the two cross-currency swap agreements are as follows:
Effective date | Termination date | Notional amount (Non-amortizing) on effective date in Euro | Notional amount (Non-amortizing) on effective date in USD | Fixed rate (Costamare receives in Euro) | Fixed rate (Costamare pays in USD) | Fair value December 31, 2022 (in USD) | ||||||||||||||||
21/5/2021 | 21/11/2025 | € | 50,000 | $ | 61,175 | 2.70 | % | 4.10 | % | $ | (7,906 | ) | ||||||||||
25/5/2021 | 21/11/2025 | € | 50,000 | $ | 61,200 | 2.70 | % | 4.05 | % | $ | (7,992 | ) | ||||||||||
Total fair value | $ | (15,898 | ) |
At December 31, 2021 and 2022, the Company had interest rate swap agreements, cross-currency rate swap agreements and interest rate cap agreements with an outstanding notional amount of $569,177 and $1,094,930 respectively. The fair value of these derivatives outstanding as at December 31, 2021 and 2022 amounted to a net liability of $10,882 and a net asset of $44,918, respectively, and these are included in the accompanying consolidated balance sheets. The maturity of these derivatives range between July 2024 and March 2031.
The estimated net amount that is expected to be reclassified within the next 12 months from Accumulated Other Comprehensive Income / (Loss) to earnings in respect of the settlements on interest rate swap, cross-currency rate swap and interest rate cap amounts to $22,729.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(b) Interest rate swaps/ interest rate caps/ cross currency swaps that do not meet the criteria for hedge accounting: As of December 31, 2022, the Company did not hold any interest rate swaps or interest rate caps or cross currency swaps that do not qualify for hedge accounting.
(c) Foreign currency agreements: As of December 31, 2022, the Company was engaged in 36 Euro/U.S. dollar forward agreements totaling $108,600 at an average forward rate of Euro/U.S. dollar 1.0690, expiring in monthly intervals up to December 2025.
As of December 31, 2022, the Company through CBI was engaged in eight Singapore dollar/U.S. dollar forward agreements totaling $7,336 at an average forward rate of Singapore dollar/U.S. dollar 1.3411, with settlements up to December 2023.
As of December 31, 2021, the Company was engaged in six Euro/U.S. dollar forward agreements totaling $15,000 at an average forward rate of Euro/U.S. dollar 1.1668, expiring in monthly intervals up to June 2022.
The total change of forward contracts fair value for the year ended December 31, 2022, was a gain of $2,784 (gain of $337 for the year ended December 31, 2020 and loss of $866 for the year ended December 31, 2021) and is included in Gain / (Loss) on derivative instruments, net in the accompanying consolidated statements of operations. The fair value of the forward contracts as at December 31, 2021 and December 31, 2022, amounted to a liability of $406 and an asset of $2,379, respectively.
(d) Forward Freight Agreements (“FFAs”) and Bunker swap agreements: As of December 31, 2022, the Company had six FFAs and one bunker swap agreement, none of which qualify for hedge accounting. The fair value of these derivatives outstanding as of December 31, 2022 amounted to a net asset of $96.
The Effect of Derivative Instruments for the years ended | ||||||||||||
December 31, 2020, 2021 and 2022 | ||||||||||||
Derivatives in ASC 815 Cash Flow Hedging Relationships | ||||||||||||
Amount of Gain / (Loss) Recognized in Accumulated OCI on Derivative | ||||||||||||
2020 | 2021 | 2022 | ||||||||||
Interest rate swaps and cross-currency swaps | $ | (8,129 | ) | $ | (754 | ) | $ | 36,591 | ||||
Interest rate caps (included component) | - | - | 4,495 | |||||||||
Interest rate caps (excluded component) (1) | - | - | 6,700 | |||||||||
Reclassification to Interest and finance costs | 1,323 | 6,417 | (483 | ) | ||||||||
Reclassification of amount excluded from the interest rate caps assessment of hedge effectiveness based on an amortization approach to Interest and finance costs | - | - | 1,286 | |||||||||
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation | 63 | 63 | 63 | |||||||||
Total | $ | (6,743 | ) | $ | 5,726 | $ | 48,652 |
(1) Excluded component represents interest rate caps instruments time value.
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Derivatives Not Designated as Hedging Instruments under ASC 815 | |||||||||||||
Location of Gain / (Loss) Recognized in Income on Derivative | Amount of Gain / (Loss) Recognized in Income on Derivative | ||||||||||||
2020 | 2021 | 2022 | |||||||||||
Non-hedging interest rate swaps | Gain / (loss) on derivative instruments, net | $ | (2,283 | ) | $ | (380 | ) | $ | (182 | ) | |||
Forward Freight Agreements | Gain / (loss) on derivative instruments, net | - | - | 108 | |||||||||
Bunker swap agreements | Gain / (loss) on derivative instruments, net | - | - | (12 | ) | ||||||||
Forward currency contracts | Gain / (loss) on derivative instruments, net | 337 | (866 | ) | 2,784 | ||||||||
Total | $ | (1,946 | ) | $ | (1,246 | ) | $ | 2,698 |
21. Financial Instruments:
(a) Interest rate risk: The Company’s interest rates and loan repayment terms are described in Note 11.
(b) Concentration of credit risk: Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, net (included in current and non-current assets), equity method investments and derivative contracts (interest rate swaps, interest rate caps, cross-currency rate swaps, foreign currency contracts, FFAs and bunkers swap agreements). The Company places its cash and cash equivalents, consisting mostly of deposits, with established financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by the counterparties to its derivative instruments; however, the Company limits its exposure by diversifying among counterparties with high credit ratings. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ and investees’ financial condition, receives charter hires in advance and generally does not require collateral for its accounts receivable.
(c) Fair value: The carrying amounts reflected in the accompanying consolidated balance sheet of financial assets and accounts payable approximate their respective fair values due to the short maturity of these instruments. The fair value of long-term bank loans with variable interest rates approximates the recorded values, generally due to their variable interest rates. The fair value of other financing arrangements with fixed interest rates discussed in Note 11.B and the term loan with fixed interest rates discussed in Note 11.A.19, the fair value of the interest rate swap agreements, the cross-currency rate swap agreements, the interest rate cap agreements, the foreign currency agreements, the FFAs and the bunker swap agreement discussed in Note 20 are determined through Level 2 of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements and are derived principally from publicly available market data and in case there is no such data available, interest rates, yield curves and other items that allow value to be determined.
The fair value of the Company’s other financing arrangements with fixed interest rates discussed in Note 11.B determined through Level 2 of the fair value hierarchy as of December 31, 2022, amounted to $600,416 in the aggregate ($789,687 in the aggregate at December 31, 2021). The fair value of the term loan with fixed interest rates discussed in Note 11.A.19, determined through Level 2 of the fair value hierarchy as of December 31, 2022, amounted to $116,311 ($137,926 at December 31, 2021).The fair value of the Company’s other financing arrangements (Note 11.B ) and the term loan with fixed interest rates discussed in Note 11.A.19, are estimated based on the future swap curves currently available and remaining maturities as well as taking into account the Company’s creditworthiness.
The fair value of the interest rate swap agreements, cross-currency rate swap agreements and interest rate cap agreements discussed in Note 20(a) and (b) equates to the amount that would be paid or received by the Company to cancel the agreements. As at December 31, 2021 and 2022, the fair value of these derivative instruments in aggregate amounted to a net liability of $10,882 and a net asset of $44,918, respectively.
The fair value of the forward currency contracts discussed in Note 20(c) and the forward freight agreements and bunker swap agreements discussed in Note 20(d) determined through Level 2 of the fair value hierarchy as at December 31, 2021 and December 31, 2022, amounted to a liability of $406 and a net asset of $2,475, respectively.
The fair value of the Bond Loan discussed in Note 11.C determined through Level 1 of the fair value hierarchy as at December 31, 2022, amounted to $102,394 ($113,260 at December 31, 2021).
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The following tables summarize the hierarchy for determining and disclosing the fair value of assets and liabilities by valuation technique on a recurring basis as of the valuation date:
December 31, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
Recurring measurements: | ||||||||||||||||
Forward currency contracts-liability position | $ | (406 | ) | $ | - | $ | (406 | ) | $ | - | ||||||
Interest rate swaps-liability position | (4,145 | ) | - | (4,145 | ) | - | ||||||||||
Interest rate swaps-asset position | 3,429 | - | 3,429 | - | ||||||||||||
Cross-currency rate swaps-liability position | (10,166 | ) | - | (10,166 | ) | - | ||||||||||
Total | $ | (11,288 | ) | $ | - | $ | (11,288 | ) | $ | - |
December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
Recurring measurements: | ||||||||||||||||
Forward currency contracts-asset position | $ | 2,379 | $ | - | $ | 2,379 | $ | - | ||||||||
Forward Freight Agreements-asset position | 108 | - | 108 | - | ||||||||||||
Bunker swap agreements-liability position | (12 | ) | - | (12 | ) | - | ||||||||||
Interest rate swaps-asset position | 35,877 | - | 35,877 | - | ||||||||||||
Interest rate caps-asset position | 24,939 | - | 24,939 | - | ||||||||||||
Cross-currency rate swaps-liability position | (15,898 | ) | - | (15,898 | ) | - | ||||||||||
Total | $ | 47,393 | $ | - | $ | 47,393 | $ | - |
Assets measured at fair value on a non-recurring basis:
During the year ended December 31, 2020, five container vessels were recorded at fair value as their future undiscounted net operating cash flows were less than their carrying amount. The fair values of these five vessels amounting to $30,500 in aggregate, were determined through Level 2 inputs of the fair value hierarchy.
During the year ended December 31, 2022, four dry bulk vessels were recorded at fair value as their future undiscounted net operating cash flows were less than their carrying amount. The fair values of these four vessels amounting to $1,691 in aggregate, were determined through Level 2 inputs of the fair value hierarchy.
22. Comprehensive Income:
During the year ended December 31, 2020, Accumulated other comprehensive loss increased with net losses of $6,743 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (loss of $8,129), net of the settlements to net income of derivatives that qualify for hedge accounting (gain of $1,323) and (ii) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($63).
During the year ended December 31, 2021, Accumulated other comprehensive loss decreased with net gains of $5,726 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (gain of $382), net of the settlements to net income of derivatives that qualify for hedge accounting (gain of $6,417), (ii) the effective portion of changes in fair value of cash flow hedges (loss of $1,136) and (iii) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($63).
COSTAMARE INC.
Notes to Consolidated Financial Statements
December 31, 2020, 2021 and 2022
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the year ended December 31, 2022, Accumulated other comprehensive income increased with net gains of $48,652 relating to (i) the change of the fair value of derivatives that qualify for hedge accounting (gain of $49,137), plus the settlements to net income of derivatives that qualify for hedge accounting (loss of $2,702), (ii) the effective portion of changes in fair value of cash flow hedges (gain of $868), (iii) reclassification of amount excluded from the interest rate caps assessment of hedge effectiveness based on an amortization approach to Interest and finance costs (gain of $1,286) and (iv) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($63).
23. Subsequent Events:
(a) | Declaration and payment of dividends (common stock): On January 2, 2023, the Company declared a dividend of $0.115 per share on the common stock, which was paid on February 7, 2023, to holders of record of common stock as of January 20, 2023. |
(b) | Declaration and payment of dividends (preferred stock Series B, Series C, Series D and Series E): On January 2, 2023, the Company declared a dividend of $0.476563 per share on the Series B Preferred Stock, $0.531250 per share on the Series C Preferred Stock, $0.546875 per share on the Series D Preferred Stock and $0.554688 per share on the Series E Preferred Stock, which were all paid on January 17, 2023 to holders of record as of January 13, 2023. |
(c) | Vessels’ sale: On January 9, 2023, based on a Memorandum of Agreement the Company entered into on September 17, 2022, the container vessel Maersk Kalamata was delivered to her buyers (Note 7). On February 23, 2023, based on a Memorandum of Agreement the Company entered into on September 17, 2022, the container vessel Sealand Washington was delivered to her buyers (Note 7). On February 23, 2023, the Company agreed to sell the dry bulk vessel Taibo, which will be delivered to her buyers in the second quarter of 2023. On March 17, 2023, the Company agreed to sell the dry bulk vessel Miner which was delivered to her buyers on March 31, 2023. |
(d) | Drawdowns of loan facilities: (i) On January 4, 2023, Bastian Shipping Co., Cadence Shipping Co., Evantone Shipping Co. and Fortrose Shipping Co. drew down the aggregate amount of $130,180 related to the term loan discussed in Note 11.A.40 in order to refinance two term loan discussed in Notes 11.A.5 and 11.A.17 and for general corporate purposes. (ii) On January 9, 2023, Adele Shipping Co., Tatum Shipping Co. and Singleton Shipping Co., drew down the aggregate amount of $82,700 related to the term loan discussed in Note 11.A.40 in order to refinance two term loan discussed in Notes 11.A.2 and 11.A.6 and for general corporate purposes. (iii) On January 11, 2023, Raymond Shipping Co., Terance Shipping Co. and Undine Shipping Co. drew down the aggregate amount of $109,950 related to the term loan discussed in Note 11.A.40 in order to refinance the term loan discussed in Note 11.A.7 and for general corporate purposes. |
(e) | Contingencies – Other: In relation to a case discussed in Note 14(d), on February 8, 2023, the Company’s subsidiary, together with the other containership company, reached an agreement to resolve a putative class action claim for economic losses and property damage allegedly incurred by individuals and businesses affected by the oil spill, which is subject to court approval. On February 27, 2023, the Company’s subsidiary, together with the other containership company, reached an agreement to resolve claims asserted by Amplify and subrogation claims by Amplify’s property damage and loss of production insurers. In connection with these settlements, neither the Company’s subsidiary or Costamare Shipping have admitted liability. The Company believes that any payments that will be required under these settlement agreements will be fully covered by insurance. |
(f) | Investment in Lease Financing Business: In March 2023 the Company, through a wholly owned subsidiary, acquired from unrelated third parties, controlling interest of Neptune Maritime Leasing Limited (“Neptune”), which was originally established to acquire, own and bareboat charter vessels through its wholly-owned subsidiaries. Pursuant to the shareholders’ agreement, the Company received a special share in Neptune which carries 75% of the voting rights in Neptune and agreed to invest up to $200,000. As of the acquisition date the assets under Neptune investment portfolio consist of one container and three dry bulk vessels which are under bareboat charter agreements and Management presently does not consider it a material business combination. |