UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2023
Commission File Number: 001-34934
COSTAMARE INC.
(Translation of registrant’s name into English)
7 rue du Gabian, MC 98000 Monaco
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
INCORPORATION BY REFERENCE
Exhibit 99.1 to this Report on Form 6-K shall be incorporated by reference
into our registration statements on Form F-3, as filed with the U.S. Securities and Exchange Commission on July 6, 2016 (File No.
333-212415) and March 15, 2021 (File No. 333-254266) to the extent not superseded by information subsequently filed or furnished (to the
extent we expressly state that we incorporate such furnished information by reference) by us under the Securities Act of 1933 or the Securities
Exchange Act of 1934, in each case as amended.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 13, 2023
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COSTAMARE INC. |
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|
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By: |
/s/ Gregory G. Zikos |
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Name: |
Gregory G. Zikos |
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Title: |
Chief Financial Officer |
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Exhibit 99.1
COSTAMARE INC.
Consolidated Balance Sheets
As of December 31, 2022 and September 30, 2023
(Expressed in thousands of U.S. dollars)
| |
December 31, 2022 | |
September 30, 2023 |
ASSETS | |
| (Audited) | | |
| (Unaudited) | |
CURRENT ASSETS: | |
| | | |
| | |
Cash and cash equivalents (Note 1) | |
$ | 718,049 | | |
$ | 726,011 | |
Restricted cash (Note 1) | |
| 9,768 | | |
| 10,429 | |
Margin deposits (Note 22(d)) | |
| - | | |
| 38,651 | |
Accounts receivable, net (Note 3) | |
| 26,943 | | |
| 40,654 | |
Inventories (Note 6) | |
| 28,039 | | |
| 66,572 | |
Due from related parties (Note 3) | |
| 3,838 | | |
| 29 | |
Fair value of derivatives (Notes 22 and 23) | |
| 25,660 | | |
| 31,692 | |
Insurance claims receivable | |
| 5,410 | | |
| 17,881 | |
Time charter assumed (Note 14) | |
| 199 | | |
| 199 | |
Accrued charter revenue (Note 14) | |
| 10,885 | | |
| 9,553 | |
Short-term investments (Note 5) | |
| 120,014 | | |
| - | |
Investment in leaseback vessels (Note 12(b)) | |
| - | | |
| 21,639 | |
Net investment in sales type lease vessels, current (Note 12(c)) | |
| - | | |
| 17,734 | |
Prepayments and other assets | |
| 10,622 | | |
| 63,619 | |
Vessels held for sale (Note 7) | |
| 55,195 | | |
| 12,058 | |
Total current assets | |
| 1,014,622 | | |
| 1,056,721 | |
FIXED ASSETS, NET: | |
| | | |
| | |
Vessels, net (Note 7) | |
| 3,666,861 | | |
| 3,547,606 | |
Total fixed assets, net | |
| 3,666,861 | | |
| 3,547,606 | |
OTHER NON-CURRENT ASSETS: | |
| | | |
| | |
Equity method investments (Note 10) | |
| 20,971 | | |
| 10,811 | |
Investment in leaseback vessels, non-current (Note 12(b)) | |
| - | | |
| 143,670 | |
Accounts receivable, net, non-current (Note 3) | |
| 5,261 | | |
| 6,461 | |
Deferred charges, net (Note 8) | |
| 55,035 | | |
| 69,130 | |
Finance leases, right-of-use assets (Note 12(a)) | |
| - | | |
| 39,562 | |
Net investment in sales type lease vessels, non-current (Note 12(c)) | |
| - | | |
| 27,483 | |
Restricted cash, non-current (Note 1) | |
| 83,741 | | |
| 70,233 | |
Time charter assumed, non-current (Note 14) | |
| 468 | | |
| 319 | |
Accrued charter revenue, non-current (Note 14) | |
| 11,627 | | |
| 10,493 | |
Fair value of derivatives, non-current (Notes 22 and 23) | |
| 37,643 | | |
| 42,376 | |
Operating leases, right-of-use assets (Note 13) | |
| - | | |
| 311,512 | |
Total assets | |
$ | 4,896,229 | | |
$ | 5,336,377 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Current portion of long-term debt, net of deferred financing costs (Note 11) | |
$ | 320,114 | | |
$ | 339,442 | |
Accounts payable | |
| 18,155 | | |
| 48,760 | |
Due to related parties (Note 3) | |
| 2,332 | | |
| 4,146 | |
Finance lease liability (Note 12) | |
| - | | |
| 2,648 | |
Operating lease liabilities, current portion (Note 13) | |
| - | | |
| 175,331 | |
Accrued liabilities | |
| 51,551 | | |
| 40,955 | |
Unearned revenue (Note 14) | |
| 25,227 | | |
| 45,725 | |
Fair value of derivatives (Notes 22 and 23) | |
| 2,255 | | |
| 10,554 | |
Other current liabilities | |
| 3,456 | | |
| 5,370 | |
Total current liabilities | |
| 423,090 | | |
| 672,931 | |
NON-CURRENT LIABILITIES: | |
| | | |
| | |
Long-term debt, net of current portion and deferred financing costs (Note 11) | |
| 2,264,507 | | |
| 2,087,880 | |
Finance lease liability, net of current portion (Note 12) | |
| - | | |
| 24,565 | |
Operating lease liabilities, non-current portion (Note 13) | |
| - | | |
| 131,361 | |
Fair value of derivatives, non-current portion (Notes 22 and 23) | |
| 13,655 | | |
| 14,011 | |
Unearned revenue, net of current portion (Note 14) | |
| 34,540 | | |
| 29,871 | |
Other non-current liabilities | |
| - | | |
| 6,284 | |
Total non-current liabilities | |
| 2,312,702 | | |
| 2,293,972 | |
COMMITMENTS AND CONTINGENCIES (Note 15) | |
| - | | |
| - | |
Temporary equity – Redeemable non-controlling interest in subsidiary – (Note 16) | |
| 3,487 | | |
| 1,148 | |
STOCKHOLDERS’ EQUITY: | |
| | | |
| | |
Preferred stock (Note 17) | |
| - | | |
| - | |
Common stock (Note 17) | |
| 12 | | |
| 12 | |
Treasury stock (Note 17) | |
| (60,095 | ) | |
| (120,095 | ) |
Additional paid-in capital (Note 17) | |
| 1,423,954 | | |
| 1,434,069 | |
Retained earnings | |
| 746,658 | | |
| 962,887 | |
Accumulated other comprehensive income (Notes 22 and 24) | |
| 46,421 | | |
| 44,712 | |
Total Costamare Inc. stockholders’ equity | |
| 2,156,950 | | |
| 2,321,585 | |
Non-controlling interest (Note 1) | |
| - | | |
| 46,741 | |
Total stockholders’ equity | |
| 2,156,950 | | |
| 2,368,326 | |
Total liabilities and stockholders’ equity | |
$ | 4,896,229 | | |
$ | 5,336,377 | |
The accompanying notes are an integral part of these unaudited interim consolidated
financial statements.
COSTAMARE INC.
Unaudited Consolidated Statements of Income
For the nine-month periods ended September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data)
| |
For the nine-month periods ended September 30, |
| |
2022 | |
2023 |
REVENUES: | |
| |
|
Voyage revenue (Note 19) | |
$ | 848,428 | | |
$ | 1,011,968 | |
Income from investments in leaseback vessels | |
| - | | |
| 4,591 | |
Total revenues | |
| 848,428 | | |
| 1,016,559 | |
EXPENSES: | |
| | | |
| | |
Voyage expenses | |
| (34,014 | ) | |
| (185,851 | ) |
Charter-in hire expenses (Note 2(b)) | |
| - | | |
| (174,670 | ) |
Voyage expenses-related parties (Note 3) | |
| (11,726 | ) | |
| (10,262 | ) |
Vessels’ operating expenses | |
| (198,330 | ) | |
| (194,110 | ) |
General and administrative expenses | |
| (7,261 | ) | |
| (12,447 | ) |
General and administrative expenses – related parties (Note 3) | |
| (7,730 | ) | |
| (6,306 | ) |
Management and agency fees-related parties (Note 3) | |
| (32,868 | ) | |
| (43,950 | ) |
Amortization of dry-docking and special survey costs (Note 8) | |
| (9,459 | ) | |
| (14,472 | ) |
Depreciation (Notes 7, 12 and 24) | |
| (124,236 | ) | |
| (124,566 | ) |
Vessel’s impairment loss (Note 7) | |
| - | | |
| (229 | ) |
Gain on sale of vessels, net (Notes 7 and 12(c)) | |
| 21,250 | | |
| 118,046 | |
Loss on vessel held for sale (Note 7) | |
| - | | |
| (4,855 | ) |
Foreign exchange gains/(losses) | |
| 555 | | |
| (1,284 | ) |
Operating income | |
| 444,609 | | |
| 361,603 | |
OTHER INCOME / (EXPENSES): | |
| | | |
| | |
Interest income | |
| 1,093 | | |
| 25,544 | |
Interest and finance costs (Note 20) | |
| (86,444 | ) | |
| (110,023 | ) |
Income from equity method investments (Note 10) | |
| 1,593 | | |
| 689 | |
Other, net | |
| 2,299 | | |
| 5,710 | |
Loss on derivative instruments, net (Note 22) | |
| (2,634 | ) | |
| (7,179 | ) |
Total other expenses, net | |
| (84,093 | ) | |
| (85,259 | ) |
Net income | |
$ | 360,516 | | |
$ | 276,344 | |
Net loss attributable to non-controlling interest in subsidiaries (Note 16) | |
| - | | |
| 5,052 | |
Net income attributable to Costamare Inc. | |
$ | 360,516 | | |
$ | 281,396 | |
Earnings allocated to Preferred Stock (Note 18) | |
| (23,302 | ) | |
| (23,302 | ) |
Net income available to Common Stockholders | |
$ | 337,214 | | |
$ | 258,094 | |
Earnings per common share, basic and diluted (Note 18) | |
$ | 2.74 | | |
$ | 2.13 | |
Weighted average number of shares, basic and diluted (Note 18) | |
| 123,295,035 | | |
| 121,059,768 | |
The accompanying notes are an integral part of these unaudited interim consolidated
financial statements.
COSTAMARE INC.
Unaudited Consolidated Statements of Comprehensive Income
For the nine-month periods ended September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars)
| |
For the nine-month periods ended September 30, |
| |
2022 | |
2023 |
Net income for the period | |
$ | 360,516 | | |
$ | 276,344 | |
Other comprehensive income / (loss): | |
| | | |
| | |
Unrealized gain / (loss) on cash flow hedges, net (Notes 22 and 24) | |
| 47,924 | | |
| (4,641 | ) |
Reclassification of amount excluded from the interest rate caps assessment of effectiveness based on an amortization approach to Interest and finance costs | |
| 560 | | |
| 2,826 | |
Effective portion of changes in fair value of cash flow hedges (Notes 22 and 24) | |
| 1,453 | | |
| 59 | |
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation (Note 24) | |
| 47 | | |
| 47 | |
Other comprehensive income / (loss) for the period | |
$ | 49,984 | | |
$ | (1,709 | ) |
Total comprehensive income for the period | |
| 410,500 | | |
| 274,635 | |
Comprehensive loss attributable to non-controlling interest in subsidiaries | |
| - | | |
| 5,052 | |
Total comprehensive income for the period attributable to Costamare Inc. | |
$ | 410,500 | | |
$ | 279,687 | |
The accompanying notes are an integral part of these unaudited interim consolidated
financial statements.
COSTAMARE INC.
Unaudited Consolidated Statements of Stockholders’ Equity
For the nine-month periods ended September 30, 2022 and 2023
(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 | |
Par value | |
Additional Paid-in Capital | |
Accumulated Other Comprehensive Income / (Loss) | |
Retained Earnings | |
Costamare Inc. | |
Non-controlling interest | |
Total |
BALANCE, January 1, 2022 | |
| 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 | | |
$ | - | | |
$ | 1,725,899 | |
- Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 360,516 | | |
| 360,516 | | |
| - | | |
| 360,516 | |
- Issuance of common stock (Notes 3 and 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,475,409 | | |
| - | | |
| - | | |
| - | | |
| 31,938 | | |
| - | | |
| - | | |
| 31,938 | | |
| - | | |
| 31,938 | |
- Repurchase of common stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (4,736,702 | ) | |
| (60,095 | ) | |
| - | | |
| - | | |
| - | | |
| (60,095 | ) | |
| - | | |
| (60,095 | ) |
- Dividends – Common stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (104,713 | ) | |
| (104,713 | ) | |
| - | | |
| (104,713 | ) |
- Dividends – Preferred stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (23,301 | ) | |
| (23,301 | ) | |
| - | | |
| (23,301 | ) |
- Other comprehensive income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 49,984 | | |
| - | | |
| 49,984 | | |
| - | | |
| 49,984 | |
BALANCE, September 30, 2022 | |
| 4,574,100 | | |
$ | - | | |
| 3,986,542 | | |
$ | - | | |
| 3,973,135 | | |
$ | - | | |
| 1,970,649 | | |
$ | - | | |
| 126,460,513 | | |
$ | 12 | | |
| (4,736,702 | ) | |
$ | (60,095 | ) | |
$ | 1,418,574 | | |
$ | 47,753 | | |
$ | 573,984 | | |
$ | 1,980,228 | | |
$ | - | | |
$ | 1,980,228 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
BALANCE, January 1, 2023 | |
| 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 | | |
$ | - | | |
$ | 2,156,950 | |
-Acquisition of non-controlling interest (Note 1) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 34,132 | | |
| 34,132 | |
- Net income (1) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 281,396 | | |
| 281,396 | | |
| 1,037 | | |
| 282,433 | |
- Issuance of subsidiary shares to non-controlling interest (Note 1) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,271 | ) | |
| - | | |
| - | | |
| (6,271 | ) | |
| 12,759 | | |
| 6,488 | |
- Issuance of common stock (Notes 3 and 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,711,406 | | |
| - | | |
| - | | |
| - | | |
| 16,386 | | |
| - | | |
| - | | |
| 16,386 | | |
| - | | |
| 16,386 | |
- Repurchase of common stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,267,808 | ) | |
| (60,000 | ) | |
| - | | |
| - | | |
| - | | |
| (60,000 | ) | |
| - | | |
| (60,000 | ) |
- Dividends to non-controlling shareholders of subsidiary | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,187 | ) | |
| (1,187 | ) |
- Dividends – Common stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (41,866 | ) | |
| (41,866 | ) | |
| - | | |
| (41,866 | ) |
- Dividends – Preferred stock (Note 17) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (23,301 | ) | |
| (23,301 | ) | |
| - | | |
| (23,301 | ) |
- Other comprehensive loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,709 | ) | |
| - | | |
| (1,709 | ) | |
| - | | |
| (1,709 | ) |
BALANCE, September 30, 2023 | |
| 4,574,100 | | |
$ | - | | |
| 3,986,542 | | |
$ | - | | |
| 3,973,135 | | |
$ | - | | |
| 1,970,649 | | |
$ | - | | |
| 128,749,819 | | |
$ | 12 | | |
| (11,004,510 | ) | |
$ | (120,095 | ) | |
$ | 1,434,069 | | |
$ | 44,712 | | |
$ | 962,887 | | |
$ | 2,321,585 | | |
$ | 46,741 | | |
$ | 2,368,326 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) | Net income excludes net loss attributable to redeemable non-controlling interest in subsidiary of $6,089 during the nine-month period
ended September 30, 2023. Temporary equity – redeemable non-controlling interest in subsidiary is reflected outside of the permanent
stockholders’ equity on the 2023 consolidated balance sheet. See Note 16 of the Notes to the Consolidated Financial Statements. |
The accompanying notes are an integral part of these unaudited interim consolidated
financial statements.
COSTAMARE INC.
Unaudited Consolidated Statements of Cash Flows
For the nine-month periods ended September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars)
| |
|
| |
|
| |
For the nine-month periods ended September 30, |
| |
2022 | |
2023 |
Cash Flows From Operating Activities: | |
| | | |
| | |
Net income: | |
$ | 360,516 | | |
$ | 276,344 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation | |
| 124,236 | | |
| 124,566 | |
Amortization and write-off of financing costs | |
| 7,510 | | |
| 6,763 | |
Amortization of deferred dry-docking and special survey costs | |
| 9,459 | | |
| 14,472 | |
Amortization of assumed time charter | |
| 148 | | |
| (141 | ) |
Amortization of hedge effectiveness excluded component from cash flow hedges | |
| 560 | | |
| 2,826 | |
Equity based payments | |
| 5,701 | | |
| 4,294 | |
Gain from short-term investments | |
| - | | |
| (3,499 | ) |
Loss on derivative instruments, net | |
| 2,634 | | |
| 13,828 | |
Gain on sale of vessels, net | |
| (21,250 | ) | |
| (118,046 | ) |
Vessel’s impairment loss | |
| - | | |
| 229 | |
Loss on vessel held for sale | |
| - | | |
| 4,855 | |
Income from equity method investments | |
| (1,593 | ) | |
| (689 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| 87 | | |
| (52,716 | ) |
Due from related parties | |
| (3,447 | ) | |
| 3,809 | |
Inventories | |
| (3,640 | ) | |
| (38,398 | ) |
Insurance claims receivable | |
| (3,188 | ) | |
| (17,859 | ) |
Prepayments and other | |
| 770 | | |
| (56,323 | ) |
Accounts payable | |
| (5,883 | ) | |
| 30,225 | |
Due to related parties | |
| (861 | ) | |
| 46 | |
Accrued liabilities | |
| 10,533 | | |
| (10,690 | ) |
Unearned revenue | |
| 1,029 | | |
| 12,622 | |
Other liabilities | |
| 64 | | |
| 6,466 | |
Dividend received | |
| 1,114 | | |
| 1,680 | |
Dry-dockings | |
| (28,065 | ) | |
| (33,522 | ) |
Accrued charter revenue | |
| 784 | | |
| 7,326 | |
Net Cash provided by Operating Activities | |
| 457,218 | | |
| 178,468 | |
Cash Flows From Investing Activities: | |
| | | |
| | |
Equity method investments | |
| - | | |
| (1,274 | ) |
Return of capital from equity method investments | |
| 14 | | |
| 755 | |
Payments to acquire short-term investments | |
| (59,716 | ) | |
| (182,182 | ) |
Settlements of short-term investments | |
| 35,000 | | |
| 305,695 | |
Proceeds from the settlement of insurance claims | |
| 982 | | |
| 5,573 | |
Acquisition of a subsidiary, net of cash acquired | |
| - | | |
| 2,544 | |
Issuance of investments in leaseback vessels | |
| - | | |
| (131,609 | ) |
Capital collections from vessels’ leaseback arrangements | |
| - | | |
| 5,552 | |
Vessel acquisition and additions to vessel cost | |
| (56,163 | ) | |
| (73,816 | ) |
Proceeds from the sale of vessels, net | |
| 40,480 | | |
| 181,186 | |
Net Cash provided by / (used in) in Investing Activities | |
| (39,403 | ) | |
| 112,424 | |
Cash Flows From Financing Activities: | |
| | | |
| | |
Proceeds from long-term debt and finance leases | |
| 816,399 | | |
| 564,206 | |
Repayment of long-term debt and finance leases | |
| (691,145 | ) | |
| (732,165 | ) |
Payment of financing costs | |
| (18,803 | ) | |
| (25,039 | ) |
Capital contribution from non-controlling interest to subsidiaries | |
| - | | |
| 11,392 | |
Repurchase of common stock | |
| (60,095 | ) | |
| (60,000 | ) |
Dividends paid | |
| (101,775 | ) | |
| (54,171 | ) |
Net Cash used in Financing Activities | |
| (55,419 | ) | |
| (295,777 | ) |
Net increase/(decrease) in cash, cash equivalents and restricted cash | |
| 362,396 | | |
| (4,885 | ) |
Cash, cash equivalents and restricted cash at beginning of the period | |
| 353,528 | | |
| 811,558 | |
Cash, cash equivalents and restricted cash at end of the period | |
$ | 715,924 | | |
$ | 806,673 | |
Supplemental Cash Information: | |
| | | |
| | |
Cash paid during the period for interest, net of capitalized interest | |
$ | 67,149 | | |
$ | 113,686 | |
Non-Cash Investing and Financing Activities: | |
| | | |
| | |
Dividend reinvested in common stock of the Company
| |
$ | 26,239 | | |
$ | 12,093 | |
Right-of-use assets obtained in exchange for operating lease obligations | |
$ | - | | |
$ | 404,082 | |
The accompanying notes are an integral part of these unaudited interim consolidated
financial statements.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(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 nine-month period ended September 30, 2023, the Company issued 448,800 shares to Costamare Shipping Services Ltd. (“Costamare
Services”) (Note 3). On July 6, 2016, the Company implemented a dividend reinvestment plan (the “Plan”) (Note 17). As
of September 30, 2023, under the Plan, the Company has issued to its common stockholders 20,330,804 shares, in aggregate. As of September
30, 2023, the aggregate outstanding share capital was 117,745,309 common shares. As of September 30, 2023, members of the Konstantakopoulos
Family owned, directly or indirectly, approximately 64.5% of the outstanding common shares, in the aggregate.
As of September 30, 2023, wholly owned subsidiaries of the Company owned
and operated a fleet of 68 container vessels with a total carrying capacity of approximately 516,329 twenty-foot equivalent units (“TEU”)
and 45 dry bulk vessels with a total carrying capacity of approximately 2,748,661 of dead-weight tonnage (“DWT”). As of December
31, 2022, wholly owned subsidiaries of the Company owned and 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”). The Company provides worldwide marine transportation services by chartering its
container vessels to some of the world’s leading liner operators and since 2021, by chartering its dry bulk vessels to a diverse
group of charterers.
During the fourth quarter of 2022, the Company established a dry bulk operating
platform under Costamare Bulkers Inc. (“CBI”), a majority-owned subsidiary of Costamare organized in the Republic of the Marshall
Islands, and agreed to invest an amount of up to $200,000 (Note 16). 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. As of September
30, 2023, CBI charters-in 59 dry-bulk vessels on period charters.
In March 2023, the Company entered into an agreement with Neptune Maritime
Leasing Limited (“NML”) pursuant to which it agreed to invest in NML’s ship sale and leaseback business up to $200,000
in exchange for up to 40% of its ordinary shares and up to 79.05% of its preferred shares. In addition, the Company received a special
ordinary share in NML which carries 75% of the voting rights of the ordinary shares providing control over NML. NML was established in
2021 to acquire, own and bareboat charter out vessels through its wholly-owned subsidiaries. On March 30, 2023, the Company invested in
NML the amount of $11,099 and as a result acquired controlling financial interest. The Company accounted for the control obtained in NML
at March 30, 2023 “as a business combination”, which resulted in the application of the “acquisition method”,
as defined under ASC 805, Business Combinations, with the Company to be considered the accounting acquirer of NML. The assets acquired
and liabilities assumed on the date of control were recorded at fair value. The assets acquired consisted mainly of four sale and leaseback
contracts, under which NML had acquired and leased back under bareboat charter agreements, one container vessel and three dry bulk
vessels, all accounted for as failed sales (Note 12(b)). In addition, the Company estimated the fair value of the noncontrolling interest
at the acquisition date at $34,132. The Company does not consider the acquisition a material business combination.
At September 30, 2023, 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.
In addition, as of September 30, 2023, Costamare had one majority-owned subsidiary incorporated in the Republic of the Marshall Islands
and controlled one company incorporated under the laws of Jersey, which had 18 subsidiaries incorporated in the Republic of the Marshall
Islands and one incorporated in the Republic of Liberia.
Revenues for the nine-month periods ended September 30, 2022 and 2023,
derived from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues) were as follows:
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
|
|
2022 |
|
2023 |
A |
|
13% |
|
10% |
B |
|
19% |
|
10% |
C |
|
5% |
|
13% |
Total |
|
37% |
|
33% |
The reconciliation of the cash, cash equivalents and restricted cash at
the end of the nine-month periods ended September 30, 2022 and 2023 is presented in the table below:
| |
2022 | |
2023 |
Reconciliation of cash, cash equivalents and restricted cash | |
| | | |
| | |
Cash and cash equivalents | |
$ | 619,832 | | |
$ | 726,011 | |
Restricted cash – current portion | |
| 10,855 | | |
| 10,429 | |
Restricted cash – non-current portion | |
| 85,237 | | |
| 70,233 | |
Total cash, cash equivalents and restricted cash | |
$ | 715,924 | | |
$ | 806,673 | |
The accompanying unaudited interim condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable
rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they
do not include all the information and notes required by U.S. GAAP for annual financial statements. These statements and the accompanying
notes should be read in conjunction with the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed
with the SEC on April 3, 2023.
These unaudited interim condensed consolidated financial statements have
been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect
all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation of the Company’s
financial position, results of operations and cash flows for the periods presented. Operating results for the nine-month period ended
September 30, 2023, are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2023.
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
June 2022, time charter rates for containerships (across all sizes) have demonstrated significant declines of 79% on average, mainly driven
by reduced growth in the transportation of containerized goods, inflation, and the normalization of supply chains.
The economic environment of the dry bulk segment improved significantly
in 2021 and 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 recent discontinuation of the multilateral agreement among Russia, Ukraine, Turkey and the United Nations to allow grain exports from
the Black Sea region. The Black Sea conflict along with several geopolitical factors, such as the vulnerability of the global economy
and the increased interest rate environment, have resulted in charter rates across the major categories of dry bulk vessels being at higher
levels at the end of the third quarter 2023 compared to the end of the second quarter of 2023.
The ongoing 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 global economic conditions, the
Russia-Ukraine conflict and the Israeli-Hamas conflict, along with their potential direct or indirect negative effects on the containership
and dry bulk markets and will provide further updates if market circumstances warrant it.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
2. Significant Accounting Policies and Recent Accounting Pronouncements:
A discussion of the Company’s significant accounting policies
can be found in Note 2 of the Company’s Consolidated Financial Statements included in the Annual Report on Form 20-F for the year
ended December 31, 2022. There have been no material changes to these policies in the nine-month period ended September 30, 2023, except
for as discussed below:
| (a) | Accounting for Revenues and Expenses: Revenues are primarily
generated from time charter or voyage 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 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 charterer may charter the vessel with or without the
owner’s crew and other operating services (time charter and bareboat charter, respectively). Thus, the agreed daily rates (hire
rates) in the case of time charter agreements also include compensation for part of the agreed crew and other operating and maintenance
services provided by the owner (non-lease components). The Company, as lessor, has elected not to allocate the consideration in the agreement
to the separate lease and non-lease components, 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.
Under a voyage charter, a vessel is provided for the transportation
of specific goods between specific ports in return for payment of an agreed upon freight per ton of cargo. The Company has determined
that its voyage charter agreements do not contain a lease because the charterer under such contracts does not have the right to control
the use of the vessel since the Company, as the ship-owner, retains control over the operations of the vessel, provided also that the
terms of the voyage charter are pre-determined, and any change requires the Company’s consent and are therefore considered service
contracts that fall under the provisions of ASC 606 “Revenue from contracts with customers”. The Company accounts for a voyage
charter when all the following criteria are met: (i) the parties to the contract have approved the contract in the form of a written charter
agreement or fixture recap and are committed to perform their respective obligations, (ii) the Company can identify each party’s
rights regarding the services to be transferred, (iii) the Company can identify the payment terms for the services to be transferred,
(iv) the charter agreement has commercial substance (that is, the risk, timing, or amount of the future cash flows is expected to change
as a result of the contract) and (v) it is probable that the Company will collect substantially all of the consideration to which it will
be entitled in exchange for the services that will be transferred to the charterer. The majority of revenue from voyage charter agreements
is collected in advance. The Company has determined that there is one single performance obligation for each of its voyage contracts,
which is to provide the charterer with an integrated transportation service within a specified time period. The Company is also engaged
in contracts of affreightment which are contracts for multiple voyage charter employments. In addition, the Company has concluded that
revenues from voyage charters in the spot market or under contracts of affreightment are recognized ratably over time because the charterer
simultaneously receives and consumes the benefits of the Company’s performance as the Company performs. Therefore, since the Company’s
performance obligation under each voyage contract is met evenly as the voyage progresses, revenue is recognized on a straight line basis
over the voyage days from the loading of cargo to its discharge.
Demurrage income, which is considered a form of variable
consideration, is included in voyage revenues, and represents payments by the charterer to the vessel owner when loading or discharging
time exceeds the stipulated time in the voyage charter agreements.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Under voyage charter agreements, all voyage costs are borne
and paid by the Company. Voyage expenses consist primarily of brokerage commissions, bunker consumption, port and canal expenses and agency
fees related to the voyage. All voyage costs are expensed as incurred with the exception of the contract fulfilment costs that incur from
the latter of the end of the previous vessel employment and the contract date and until the commencement of loading the cargo on the relevant
vessel, which are capitalized to the extent the Company, in its reasonable judgement, determines that they (i) are directly related to
a contract, (ii) are recoverable and (iii) enhance the Company’s resources by putting the Company’s vessel in a location to
satisfy its performance obligation under a contract pursuant to the provisions of ASC 340-40 “Other assets and deferred costs”.
These capitalized contract fulfilment costs are recorded under “Other current assets” and are amortized on a straight-line
basis as the related performance obligations are satisfied. As of September 30, 2023, capitalized contract fulfilment costs, which are
recorded under “Prepayments and other assets” amounted to $6,637.
(b) Operating leases - Leases for Lessees: Vessel
leases, where the Company is regarded as the lessee, are classified as operating leases, based on an assessment of the terms of the lease.
According to the provisions of ASC 842-20-30-1, at the commencement date, a lessee shall measure both of the following: a) The lease liability
at the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement and b)
The right-of-use asset, which shall consist of all of the following: i) The amount of the initial measurement of the lease liability,
ii) Any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and iii) Any initial
direct costs incurred by the lessee.
After lease commencement, the Company measures the lease liability
for operating leases at the present value of the remaining lease payments using the discount rate determined at lease commencement. The
right-of-use asset is subsequently measured at the amount of the remeasured lease liability, adjusted for the remaining balance of any
lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized
initial direct costs. Any changes made to leased assets to customize it for a particular use or need of the lessee are capitalized as
leasehold improvements.
In cases of operating lease agreements that meet the definition
of ASC 842 for a short-term lease (the lease has a lease term of 12 months or less) and does not include an option to purchase the underlying
asset that the lessee is reasonably certain to exercise, the Company can make the short-term lease election at the commencement date.
A lessee that makes the short-term lease election does not recognize a lease liability or right-of-use asset on its balance sheet. Instead,
the lessee recognizes lease payments on a straight-line basis over the lease term.
For charter-in arrangements classified as operating leases,
lease expense is recognized on a straight-line basis over the rental periods of such charter agreements and is included under the caption
“Charter-in hire expenses” in the Consolidated Statement of Income (see Note 13). Revenues generated from charter-in vessels
are included in Voyage revenues in the consolidated statements of income. During the nine-month period ended September 30, 2023 the Company
chartered-in 71 third-party vessels. Revenues generated from those charter-in vessels during the nine-month period ended September 30,
2023 amounted to $270,838 and are included in Voyage revenues in the consolidated statements of income, out of which $36,440 constitute
sublease income deriving from time charter agreements.
Lease assets used by the Company are reviewed periodically
for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Measurement
of the impairment loss is based on the fair value of the asset. The Company determines the fair value of its lease assets based on management
estimates and assumptions by making use of available market data. As of September 30, 2023, the management of the Company has concluded
that events and circumstances did not trigger the existence of potential impairment.
(c) Investment in leaseback vessels: Investment
in leaseback vessels refer to vessels purchased and leased back to the same party as part of a sale and leaseback transaction. These transactions
are evaluated under sale and leaseback accounting guidance contained in ASC 842 to determine whether it is appropriate to account for
the transaction as a purchase of an asset. If the transfer of the asset to the buyer-lessor does not qualify as a purchase, then the transaction
constitutes a failed sale and leaseback and the purchase price paid is accounted for as a loan receivable under ASC 310.
Investments in leaseback vessels are carried at the amount
receivable, net of an allowance for credit losses. Collaterals are required to be maintained at a specified minimum level at all times
on the basis of the agreements in force. The Company monitors collateral levels and requires counter parties to provide additional collateral,
to meet minimum collateral requirements if the fair value of the collateral changes. The Company applies the practical expedient based
on collateral maintenance provisions in estimating an allowance for credit losses for Investment in leaseback vessels. An allowance for
credit losses on partially secured Investments in leaseback vessels is estimated based on the aging of those receivables. As of September
30, 2023, the fair value of the collaterals held exceeds the amortized cost of the loans receivable and as a result no allowance for credit
losses has been recognized.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(d) Non-redeemable noncontrolling interests:
Ownership interests in the company's subsidiaries held by parties other than the parent are presented separately from the parent's equity
on the Consolidated Balance Sheet. The amount of consolidated net income attributable to the parent and the noncontrolling interests are
both presented on the face of the Consolidated Statement of Income and Consolidated Statement of Stockholders’ Equity.
(e) Derivative Financial Instruments: As of September
30, 2023, the Company has elected one of the optional expedients provided in the ASU 2020-04 Reference Rate Reform and its update, that
allows an entity to assert that a hedged forecasted transaction referencing LIBOR remains probable of occurring, regardless of the modification
or expected modification to the terms of the hedged item to replace the reference rate. The Company applied the accounting relief as relevant
contract and hedge accounting relationship modifications were made during the reference rate reform transition period.
(f) Business Combinations: The Company accounts
for business combinations using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired
and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair values of identifiable
assets and liabilities requires estimates and the use of valuation techniques when market value is not readily available and requires
a significant amount of management judgment. The excess of the purchase price over fair values of identifiable assets acquired and liabilities
assumed is recorded as goodwill.
(g) Sales-Type leases
- Leases for Lessors: If for a vessel lease, where the Company is regarded as the lessor,
the lease is classified as a sales-type lease, the carrying amount of the vessel is derecognized and a net investment in the lease is
recorded. For a sales-type lease, the net investment in the lease is measured at lease commencement date as the sum of the lease receivable
and the estimated residual value of the vessel. Any selling profit or loss arising from a sales-type lease is recorded at lease commencement.
Over the term of the lease, the company recognizes finance income on the net investment in the lease and any variable lease payments,
which are not included in the net investment in the lease.
The estimated residual value represents the estimated fair
value of the vessels under lease at the end of the lease. Estimating residual value has specific risks, and management of these risks
is dependent upon the Company’s ability to accurately project future vessel values. The company estimates future fair value of leased
vessels by using historical models, analyzing the current market for new and used vessels and obtaining independent valuation analyses.
The company periodically reassess the realizable value of its
lease residual values. Anticipated decreases in specific future residual values that are considered to be other-than-temporary are recognized
immediately upon identification and are recorded as an adjustment to the residual value estimate. In addition, the Company pursuant to
the provisions of “ASC 326 Financial Instruments — Credit Losses” assesses at each reporting period the counterparties’
credit worthiness in order to conclude whether an allowance for credit losses is required to be recognized. For sales-type leases, this
reduction lowers the recorded net investment and is recognized as a loss charged to finance income in the period in which the estimate
is changed. For the nine-month period ended September 30, 2023 no impairment recognition was deemed necessary.
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 and as further amended and restated on June 28, 2021 (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.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
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 receives (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, 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, 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 (effective from January 1, 2022)
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.
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.
Management fees charged by Costamare Shipping in the nine-month periods
ended September 30, 2022 and 2023, amounted to $32,868 and $31,580, respectively, and are included in Management and agency fees-related
parties in the accompanying consolidated statements of income. In addition, Costamare Shipping and Costamare Services charged (i) $9,236
for the nine-month period ended September 30, 2023 ($10,606 for the nine-month period ended September 30, 2022), 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 income, (ii) $2,000 charged by Costamare Services, which is included
in General and administrative expenses – related parties in the accompanying consolidated statements of income for the nine-month
period ended September 30, 2023 ($2,000 for the nine-month period ended September 30, 2022) and (iii) $4,294, representing the fair value
of 448,800 shares issued to Costamare Services, which is included in General and administrative expenses – related parties in the
accompanying consolidated statements of income for the nine-month period ended September 30, 2023 ($5,701 for the nine-month period ended
September 30, 2022). Furthermore, in accordance with the management agreements with third-party managers, third-party managers have been
provided with the amount of $75 and $50 per vessel as working capital security. As at December 31, 2022, the working capital security
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 consolidated balance sheets. As at September 30, 2023, the working capital security was $6,675 in aggregate, of which
$6,450 is included in Accounts receivable, net, non-current and $225 in Accounts receivable, net in the accompanying consolidated balance
sheets.
During the nine-month periods ended September 30, 2022 and 2023, Costamare
Shipping charged in aggregate to the companies established pursuant to the Framework Deed (Notes 9 and 10) the amounts of $1,328 and $1,802,
respectively, for services provided in accordance with the respective management agreements. The balance due to Costamare Shipping at
September 30, 2023 amounted to $2,047 and is included in Due to related parties in the accompanying consolidated balance sheet. 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 Services at September 30, 2023 amounted to $1,403 and is included in Due to related parties
in the accompanying consolidated balance sheet. The balance due to Costamare Services at December 31, 2022 amounted to $1,380 and is included
in Due to related parties in the accompanying consolidated balance sheet.
(b) 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 year ended December 31, 2022 and the nine-month period ended September 30, 2023, 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 year ended December 31, 2022 and the nine-month period ended September 30, 2023 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 nine-month
periods ended September 30, 2022 and 2023, BNC charged the ship-owning companies $567 and $520, respectively, which are included in Voyage
expenses—related parties in the accompanying consolidated statements of income. 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 nine-month periods ended September 30, 2022 and 2023, BNA charged the ship-owning companies
$553 and $506, respectively, which are included in Voyage expenses – related parties in the accompanying consolidated statements
of income.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
(c) LC LAW Stylianou & Associates LLC (“LCLAW”):
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 of two other subsidiaries of the Company. LCLAW provides
legal services to the Company. During the nine-month period ended September 30, 2023, LCLAW charged our subsidiaries $12, which is included
in “General and Administrative Expenses - Related Parties” in the accompanying consolidated statements of income. During the
nine-month period ended September 30, 2022, LCLAW charged Costamare Participations Plc $29, which are included in “General and Administrative
Expenses - Related Parties” in the accompanying consolidated statements of income. There was no balance due from/to LCLAW at both
December 31, 2022 and September 30, 2023.
(d) 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. On November 14, 2022, CBI entered into separate
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%.
Pursuant to the Service Agreements each of the Local Agencies is managed by individuals who hold the minority shareholder interest in
CBI (see Note 16). During the nine-month period ended September 30, 2023, the Local Agencies charged CBI with aggregate agency fees of
$11,085, which are included in “Management and agency fees-related parties” in the accompanying consolidated statements of
income. The balance due from the three Local Agencies as of September 30, 2023, amounted to $29, in aggregate and is included in Due from
related parties in the accompanying consolidated balance sheets. 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 consolidated balance sheets. 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 consolidated balance
sheets.
(e) Neptune Global Finance Ltd. (“NGF”): Since
March 2023, the Company’s Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos owns 51% of NGF, a company incorporated
under the laws of Jersey which provides among others administrative and strategic services to NML. NGF receives a fee of 1.5% on the contributed
capital invested in NML and a fee of 0.8% on the committed capital to be invested in NML. The remaining 49% of NGF is owned by the Managing
Director and member of the Board of Directors of NML. From the date Mr. Konstantinos Konstantakopoulos acquired 51% of NGF to September
30, 2023, NGF charged an amount of $1,285 as management fees, which are included in Management and agency fees-related parties in the
accompanying consolidated statements of income. The balance due to NGF at September 30, 2023 amounted to $696 and is included in Due to
related parties in the accompanying consolidated balance sheets.
(f) Codrus capital AG (“Codrus”): In March 2023,
the Company entered into an agreement with Codrus, a company incorporated under the laws of Canton Zug, Switzerland, for the provision
of financial and strategic advice to the Company, for an annual fee of $250. Codrus is controlled by the Managing Director and member
of the Board of Directors of NML. As of September 30, 2023 there was no balance due from/to Codrus.
(g) 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.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
4. Segmental Financial Information
The Company has four reportable segments from which it derives its revenues:
(1) container vessels segment, (2) dry bulk vessels segment, (3) operating platform segment (CBI segment) and (4) investment in leaseback
vessels through NML (Note 1 and 12) (NML 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 operation of dry bulk vessels. Under the operating platform segment CBI charters-in/out dry bulk vessels and enters into contracts
of affreightment, FFAs and may also utilize hedging solutions. Under the leasing segment NML acquires and bareboat charters out the acquired
vessels to the respective seller-lessee of the vessels, who have the obligation to purchase the vessel at the end of the bareboat agreement
and the right to purchase the vessel prior to the end of the bareboat agreement at a pre-agreed price.
The tables below present information about the Company’s reportable
segments as of December 31, 2022 and September 30, 2023, and for the nine-month periods ended September 30, 2022 and 2023. 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, 2022 and September 30, 2023 and
for the nine-month periods ended September 30, 2022 and 2023, Other segment includes equity method investments’ balances, due from
related parties balances, cash balances and income and short-term investments. Summarized financial information concerning each of the
Company’s reportable segments is as follows:
For the nine-month period ended September 30, 2023 |
| |
Container vessels
segment | |
Dry bulk vessels
segment | |
CBI | |
NML | |
Other | |
Eliminations | |
Total |
Voyage revenue | |
$ | 621,822 | | |
$ | 111,429 | | |
$ | 278,717 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 1,011,968 | |
Intersegment voyage revenue | |
| - | | |
| 5,590 | | |
| - | | |
| - | | |
| - | | |
| (5,590 | ) | |
| - | |
Income from investments in leaseback vessels | |
| - | | |
| - | | |
| - | | |
| 4,591 | | |
| - | | |
| - | | |
| 4,591 | |
Net Income/ (Loss) for the Period | |
$ | 397,859 | | |
$ | (42,998 | ) | |
$ | (81,187 | ) | |
$ | 2,096 | | |
$ | 574 | | |
$ | - | | |
$ | 276,344 | |
For the nine-month period ended September 30, 2022 |
| |
Container vessels
segment | |
Dry bulk vessels
segment | |
Other | |
Total |
Voyage revenue | |
$ | 591,758 | | |
$ | 256,670 | | |
$ | - | | |
$ | 848,428 | |
Net Income for the Period | |
$ | 262,009 | | |
$ | 96,914 | | |
$ | 1,593 | | |
$ | 360,516 | |
As of September 30, 2023 |
| |
Container vessels
segment | |
Dry bulk vessels
segment | |
CBI | |
NML | |
Other | |
Eliminations | |
Total |
Total Assets | |
$ | 3,220,081 | | |
$ | 793,992 | | |
$ | 496,913 | | |
$ | 184,853 | | |
$ | 643,558 | | |
$ | (3,020 | ) | |
$ | 5,336,377 | |
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
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 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
5. Short-term investments:
During the nine-month periods ended September 30, 2023 and 2022, the Company
invested an amount of $182,182 and $59,716, respectively, in zero-coupon U.S. treasury bills (the “Bills”). During the nine-month
periods ended September 30, 2023 and 2022, the Company received the amount of $305,695 and $35,000, respectively from the sale/maturity
of its short-term investments. As of September 30, 2023, the Company did not hold any short-term investments. As of December 31, 2022,
the Company held five 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, net:
The amounts in the accompanying consolidated balance sheets are as follows:
| |
Vessel Cost | |
Accumulated Depreciation | |
Net Book Value |
Balance, January 1, 2023 | |
$ | 4,796,102 | | |
$ | (1,129,241 | ) | |
$ | 3,666,861 | |
Depreciation | |
| - | | |
| (124,053 | ) | |
| (124,053 | ) |
Vessel acquisitions and other vessels’ costs | |
| 73,816 | | |
| - | | |
| 73,816 | |
Vessel sales, transfers and other movements | |
| (110,708 | ) | |
| 41,690 | | |
| (69,018 | ) |
Balance, September 30, 2023 | |
$ | 4,759,210 | | |
$ | (1,211,604 | ) | |
$ | 3,547,606 | |
During the nine-month period ended September 30, 2023, the Company agreed
to acquire the three secondhand dry-bulk vessel Enna (ex. Aquaenna), Dorado (ex. Aquarange) and Arya
(ex. Ultra Regina) with an aggregate DWT capacity of 417,241.
During the nine-month period ended September 30, 2023, the Company sold
the container vessels Sealand Washington and Maersk Kalamata, which were held for sale at December 31, 2022, and the
dry bulk vessels Miner, Taibo and Comity and recognized an aggregate net gain of $88,467, which is included in Gain
on sale of vessels, net in the accompanying consolidated statement of income for the nine-month period ended September 30, 2023.
On September 22, 2023, the Company decided to make arrangements to sell
the container vessel Oakland. 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 September 30, 2023, the amount of
$12,058, separately reflected in Vessels held for sale in the September 30, 2023 consolidated balance sheet, represents the fair market
value of the vessel based on the vessel’s estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy).
The difference between the estimated fair value less cost to sell of the vessel and the vessel’s carrying value, amounting to $4,855,
was recorded in the nine-month period ended September 30, 2023, and is separately reflected as Loss on vessel held for sale in the accompanying
consolidated statement of income.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the nine-month period ended September 30, 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 nine-month period ended September 30, 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 nine-month period ended September 30, 2022, the
Company prepaid the outstanding balance of Benedict Maritime Co. (Note 11.B.2) and re-acquired the 2016-built, 14,424 TEU container vessel
Triton.
During the nine-month period ended September 30, 2022, the Company sold
the dry bulk vessel Thunder and the container vessel Messini, which were classified as held for sale at March 30, 2022 and
December 9, 2021, respectively and recognized an aggregate gain of $21,250, which is separately reflected in Gain on sale of vessels,
net in the accompanying consolidated statement of income for the nine-month period ended September 30, 2022.
During the nine-month period ended September 30, 2023, the Company recorded
an impairment loss in relation to one of its dry bulk vessels in the amount of $229. The fair value of the vessel was determined through
Level 2 of the fair value hierarchy (Note 23).
As of September 30, 2023, 98 of the Company’s vessels, with a total
carrying value of $2,693,502, 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 (Note 11.B.1), the four out of five vessels
acquired in 2018 under the Share Purchase Agreement (Note 11.B.2) with York Capital Management Global Advisors LLC and its affiliate Sparrow
Holdings, L.P. (collectively, “York”), one vessel acquired from York (Notes 10 and 13) and five 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, 2023 | |
$ | 55,035 | |
Additions | |
| 33,522 | |
Amortization | |
| (14,472 | ) |
Write-off and other movements (Note 7) | |
| (4,955 | ) |
Balance, September 30, 2023 | |
$ | 69,130 | |
During the nine-month period ended September 30, 2023, 17 vessels
underwent and completed their dry-docking and special survey and one vessel was in the process of completing her dry-docking and special
survey. During the nine-month period ended September 30, 2022, 15 vessels underwent and completed their dry-docking and special survey
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 income.
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.
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 Ltd.
As at September 30, 2023, the Company holds 49% of the capital stock of
three 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.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
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 %
September 30, 2023 |
|
Date Established /Acquired |
|
|
Steadman Maritime Co. |
|
- |
|
49% |
|
July 1, 2013 |
Geyer Maritime Co. |
|
Arkadia |
|
49% |
|
May 18, 2015 |
Goodway Maritime Co. |
|
- |
|
49% |
|
September 22, 2015 |
During the nine-month period ended September 30, 2023, the Company received,
in the form of a special dividend, $1,274 from Geyer Maritime Co. During the nine-month period ended September 30, 2023, the Company contributed
$980 to the equity of Platt Maritime Co. and $294 to the equity of Sykes Maritime Co.
During the nine-month period ended September 30, 2022, the Company received,
in the form of a special dividend, $1,128 from Steadman Maritime Co.
On May 12, 2023, the Company agreed to sell its 49% equity interest in
the company operating the 2018-built, 3,800 TEU capacity containership, Polar Argentina to York, which at that time held the remaining
51% and to acquire from York the 51% equity interest in the company operating the 2018-built, 3,800 TEU capacity containership, Polar
Brasil. Both transfers were concluded on June 2, 2023, whereupon the Company owns 100% equity interest of the company operating the
containership Polar Brasil. Management accounted for this transaction as an asset acquisition under ASC 805 “Business Combinations”
whereas the cost consideration was proportionally allocated on a relative fair value basis to the assets acquired.
For the nine-month period ended September 30, 2022 and 2023, the Company
recorded net income of $1,593 and $689, respectively, from equity method investments, which is separately reflected as Income from equity
method investments in the accompanying consolidated statements of income.
The summarized combined financial information of the companies accounted
for as equity method investment is as follows:
| |
December 31, 2022 | |
September 30, 2023 |
Current assets | |
$ | 11,697 | | |
$ | 16,296 | |
Non-current assets | |
| 91,471 | | |
| 6,599 | |
Total assets | |
$ | 103,168 | | |
$ | 22,895 | |
| |
| | | |
| | |
Current liabilities | |
$ | 7,472 | | |
$ | 696 | |
Non-current liabilities | |
| 52,760 | | |
| - | |
Total liabilities | |
$ | 60,232 | | |
$ | 696 | |
| |
|
| |
Nine-month period ended September 30, |
| |
2022 | |
2023 |
Voyage revenue | |
$ | 17,147 | | |
$ | 12,673 | |
Net income | |
$ | 3,254 | | |
$ | 1,406 | |
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
11. Long-Term Debt:
The amounts shown in the accompanying consolidated balance sheets
consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrower(s) |
|
|
December 31, 2022 |
|
|
September 30, 2023 |
|
A. |
|
|
Term Loans: |
|
|
|
|
|
|
|
|
1 |
|
Nerida Shipping Co. |
|
$ |
- |
|
$ |
- |
|
|
2 |
|
Singleton Shipping Co. and Tatum Shipping Co. |
|
|
34,400 |
|
|
- |
|
|
3 |
|
Costamare. Inc. |
|
|
- |
|
|
- |
|
|
4 |
|
Bastian Shipping Co. and Cadence Shipping Co. |
|
|
82,800 |
|
|
- |
|
|
5 |
|
Adele Shipping Co. |
|
|
48,500 |
|
|
- |
|
|
6 |
|
Costamare Inc. |
|
|
112,430 |
|
|
- |
|
|
7 |
|
Quentin Shipping Co. and Sander Shipping Co. |
|
|
- |
|
|
- |
|
|
8 |
|
Costamare Inc. |
|
|
- |
|
|
- |
|
|
9 |
|
Capetanissa Maritime Corporation et al. |
|
|
15,671 |
|
|
- |
|
|
10 |
|
Caravokyra Maritime Corporation et al. |
|
|
6,928 |
|
|
- |
|
|
11 |
|
Kelsen Shipping Co. |
|
|
- |
|
|
- |
|
|
12 |
|
Uriza Shipping S.A. |
|
|
- |
|
|
- |
|
|
13 |
|
Berg Shipping Co. |
|
|
10,540 |
|
|
- |
|
|
14 |
|
Reddick Shipping Co. and Verandi Shipping Co. |
|
|
- |
|
|
- |
|
|
15 |
|
Evantone Shipping Co. and Fortrose Shipping Co. |
|
|
17,750 |
|
|
- |
|
|
16 |
|
Ainsley Maritime Co. and Ambrose Maritime Co. |
|
|
131,250 |
|
|
123,214 |
|
|
17 |
|
Hyde Maritime Co. and Skerrett Maritime Co. |
|
|
127,212 |
|
|
118,731 |
|
|
18 |
|
Kemp Maritime Co. |
|
|
64,300 |
|
|
59,950 |
|
|
19 |
|
Vernes Shipping Co. |
|
|
- |
|
|
- |
|
|
20 |
|
Achilleas Maritime Corporation et al. |
|
|
66,974 |
|
|
55,007 |
|
|
21 |
|
Novara et al. |
|
|
65,043 |
|
|
- |
|
|
22 |
|
Costamare Inc. |
|
|
49,095 |
|
|
35,738 |
|
|
23 |
|
Costamare Inc. |
|
|
- |
|
|
- |
|
|
24 |
|
Costamare Inc. |
|
|
24,387 |
|
|
- |
|
|
25 |
|
Amoroto et al. |
|
|
67,882 |
|
|
57,534 |
|
|
26 |
|
Costamare Inc. |
|
|
- |
|
|
- |
|
|
27 |
|
Dattier Marine Corp et al. |
|
|
- |
|
|
- |
|
|
28 |
|
Bernis Marine Corp. et al. |
|
|
47,884 |
|
|
43,242 |
|
|
29 |
|
Costamare Inc. |
|
|
52,361 |
|
|
- |
|
|
30 |
|
Costamare Inc. |
|
|
62,500 |
|
|
44,000 |
|
|
31 |
|
Adstone Marine Corp. et al. |
|
|
- |
|
|
- |
|
|
32 |
|
Amoroto et al. |
|
|
33,700 |
|
|
25,570 |
|
|
33 |
|
Benedict et al. |
|
|
458,952 |
|
|
397,381 |
|
|
34 |
|
Reddick Shipping Co. and Verandi Shipping Co. |
|
|
43,500 |
|
|
36,000 |
|
|
35 |
|
Quentin Shipping Co. and Sander Shipping Co. |
|
|
85,000 |
|
|
77,219 |
|
|
36 |
|
Greneta Marine Corp. et al. |
|
|
30,000 |
|
|
27,034 |
|
|
37 |
|
Bastian Shipping Co. et al. |
|
|
- |
|
|
276,540 |
|
|
38 |
|
Adstone Marine Corp. et al. |
|
|
82,885 |
|
|
104,026 |
|
|
39 |
|
NML Loan1 |
|
|
- |
|
|
6,672 |
|
|
40 |
|
Kalamata Shipping Corporation et al. |
|
|
- |
|
|
66,500 |
|
|
41 |
|
Capetanissa Maritime Corporation et al. |
|
|
- |
|
|
23,292 |
|
|
42 |
|
Archet Marine Corp. |
|
|
- |
|
|
64,545 |
|
|
43 |
|
NML Loan 2 |
|
|
- |
|
|
36,000 |
|
|
44 |
|
NML Loan 3 |
|
|
- |
|
|
18,980 |
|
|
|
|
Total Term Loans |
|
$ |
1,821,944 |
|
$ |
1,697,175 |
|
B. |
|
|
Other financing arrangements |
|
|
678,930 |
|
|
644,698 |
|
C. |
|
|
Unsecured Bond Loan |
|
|
106,660 |
|
|
105,940 |
|
|
|
|
Total long-term debt |
|
$ |
2,607,534 |
|
$ |
2,447,813 |
|
|
|
|
Less: Deferred financing costs |
|
|
(22,913) |
|
|
(20,491) |
|
|
|
|
Total long-term debt, net |
|
$ |
2,584,621 |
|
$ |
2,427,322 |
|
|
|
|
Less: Long-term debt current portion |
|
|
(325,611) |
|
|
(344,719) |
|
|
|
|
Add: Deferred financing costs, current portion |
|
|
5,497 |
|
|
5,277 |
|
|
|
|
Total long-term debt, non-current, net |
|
$ |
2,264,507 |
|
$ |
2,087,880 |
|
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(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. On January 9, 2023, following the execution of the loan agreement discussed in Note 11.A.37, the then outstanding balance of $34,400
was fully repaid.
3. 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.33, the Company prepaid the amount of $21,242. On September 14, 2022, the then outstanding
balance of $5,946 was fully repaid.
4. 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 and general corporate purposes relating to the two vessels. The facility was drawn down in two tranches on June
24, 2019. On January 4, 2023, following the execution of the loan agreement discussed in Note 11.A.37, the then outstanding balance of
$82,800 was fully repaid.
5. 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 and general corporate purposes
relating to the vessel. The facility was drawn down on July 12, 2019. On January 9, 2023, following the execution of the loan agreement
discussed in Note 11.A.37, the then outstanding balance of $48,500 was fully repaid.
6. 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. On January 11, 2023, following the execution of
the loan agreement discussed in Note 11.A.37, the then outstanding balance of $112,430 was fully repaid.
7. 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.35, the then outstanding balance of $64,852 was fully repaid.
8. 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,
following the execution of the loan agreement discussed in Note 11.A.30, the then outstanding balance of $24,554 of the loan was fully
repaid.
9. 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.33, 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. On December 7, 2022, the Company prepaid $8,503, due to the sale of vessel Sealand
Washington (Note 7). On May 30, 2023, following the execution of the loan agreement discussed in Note 11.A.41, the then outstanding
balance of $14,186 was fully repaid.
10. 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 execution of the agreement of the loan discussed in Note 11.A.33, 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 7). On April 24, 2023, following the execution of the loan agreement discussed in Note 11.A.40, the then outstanding balance of
$6,663 was fully repaid.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
11. 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.
12. 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.33, the Company fully prepaid the then outstanding balance
of $16,100 of the loan.
13. 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. On May 30, 2023, following the execution of the loan agreement discussed in Note 11.A.41, the then outstanding
balance of $9,980 was fully repaid.
14. 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.34, the then outstanding balance of $11,300 was fully repaid.
15. 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. On January 4, 2023, following the execution of the loan agreement discussed in Note 11.A.37, the then
outstanding balance of $17,750 was fully repaid.
16. 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 and for general corporate purposes.
The facility was drawn down in two tranches on March 24, 2021. As of September 30, 2023, the outstanding balance of each tranche of $61,607.1
is repayable in 30 equal quarterly installments of $1,339.3, from December 2023 to March 2031 and a balloon payment of $21,428.6 each
payable together with the last installment.
17. 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 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 September 30, 2023, the outstanding balance of Tranche A of $59,365.4 is repayable
in 22 equal quarterly installments of $1,413.5, from December 2023 to March 2029 and a balloon payment of $28,269.2 payable together with
the last installment. As of September 30, 2023, the outstanding balance of Tranche B of $59,365.4 is repayable in 22 equal quarterly installments
of $1,413.5, from December 2023 to March 2029 and a balloon payment of $28,269.2 payable together with the last installment.
18. 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 and for general corporate purposes. The facility was drawn down
on March 30, 2021. As of September 30, 2023, the outstanding balance of the loan of $59,950 is repayable in 22 equal quarterly installments
of $1,425, from December 2023 to March 2029 and a balloon payment of $28,600 payable together with the last installment.
19. 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. 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.33, the Company
fully prepaid the then outstanding balance of $12,200 of the loan.
20. 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. 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, 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, on the then outstanding balance. On October 7, 2022, the Company prepaid $6,492, due to the sale of Sealand Illinois,
on the then outstanding balance. On May 8, 2023, the loan agreement was amended, resulting in the extension of the repayment period until
September 2026 for the Refinancing tranche and until December 2026 for Tranches A and B. As of September 30, 2023, the outstanding balance
of the Refinancing tranche of $12,007 is repayable in 12 equal quarterly installments of $989.2 payable from December 2023 to September
2026 and a balloon payment of $136.5, payable together with the last installment. As of September 30, 2023, the outstanding balance of
Tranche A of $21,500 is repayable in 13 equal quarterly installments of $1,500, from December 2023 to December 2026 and a balloon payment
of $2,000 payable together with the last installment. As of September 30, 2023, the outstanding balance of Tranche B of $21,500 is repayable
in 13 equal quarterly installments of $1,500, from December 2023 to December 2026 and a balloon payment of $2,000 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.30). As of
September 30, 2023, the vessel Oakland was classified as “Vessels held for sale” (Note 7) and the outstanding amount
of $2,668 is included in the Current portion of long-term debt, net of deferred financing costs in the accompanying balance sheet (Note
25(c)).
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
21. 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. On April 24, 2023, following the execution of the loan agreement discussed in Note 11.A.40, the then outstanding
balance of $61,895 was fully repaid.
22. 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. 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.
On May 25, 2023, the Company prepaid $5,475, due to the sale of vessel Comity (Note 7). As of September 30, 2023, the aggregate
outstanding balance of $35,738 is repayable in variable quarterly installments from October 2023 to October 2026 with an aggregate balloon
payment of $15,598.8 that is payable together with the respective last installments.
23. 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. 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.36, 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.38, the Company fully prepaid the then outstanding balance
of $62,788 of the loan.
24. 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. 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.27). 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.28). On March 16, 2023, the Company prepaid the amount of $6,985 due
to the sale of vessel Taibo (Note 7). On June 20, 2023, following the execution of the loan agreement discussed in Note 11.A.42,
the then outstanding balance of $16,310 was fully repaid.
25. 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, 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.32). On March 23, 2023, the Company prepaid the amount of $5,226 due to the sale
of vessel Miner (Note 7). On March 31, 2023, the loan agreement was amended, resulting in the extension of the repayment period
until July 2027. As of September 30, 2023, the aggregate outstanding balance of $57,534 is repayable in variable quarterly installments
from October 2023 to July 2027 with an aggregate balloon payment of $36,215.5 that is payable together with the respective last installments.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
26. 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.
27. 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.24. 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.36, 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.38, the Company fully prepaid the then
outstanding balance of $9,390 of the loan.
28. 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.24. 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.24. As of September
30, 2023, the aggregate outstanding balance of $43,242 is repayable in 14 equal quarterly installments of $1,547.1, from October 2023
to January 2027 and a balloon payment of $21,583 payable together with the last installment.
29. 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. On June 20, 2023, following the execution of the loan agreement discussed in Note 11.A.42, the then outstanding balance of
$49,469 was fully repaid.
30. 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.8, Tranche C of the term loan discussed
in Note 11.A.20 and for general corporate purposes. On January 31, 2022, the Company drew down the amount of $85,000. As of September
30, 2023, the outstanding balance of $44,000 is repayable in 10 variable quarterly installments, from October 2023 to January 2026 and
a balloon payment of $19,000 payable together with the last installment.
31. 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 (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.38, the Company fully prepaid
the then outstanding balance of $10,125 of the loan.
32. 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.25 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 September 30, 2023, the aggregate outstanding balance of $25,570 is repayable in 11 variable quarterly installments,
from October 2023 to April 2026 with an aggregate balloon payment of $10,940 that is payable together with the respective last installments.
33. 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.3, 11.A.9, 11.A.10, to refinance the term loans
discussed in Notes 11.A.12 and 11.A.19, 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 September 30, 2023, the aggregate outstanding balance of $397,381 is repayable
in 15 variable quarterly installments, from December 2023 to June 2027 with an aggregate balloon payment of $89,523.8 that is payable
together with the respective last installments.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
34. 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.14. On September
30, 2022, Reddick Shipping Co. and Verandi Shipping Co. drew down the amount of $46,000. As of September 30, 2023, the outstanding balance
of $36,000 is repayable in 12 equal quarterly installments of $3,000, from December 2023 to September 2026.
35. 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.7. On November
14, 2022, Quentin Shipping Co. and Sander Shipping Co. drew down in two tranches the aggregate amount of $85,000. As of September 30,
2023, the outstanding balance of each tranche of $38,609.4 is repayable in 29 equal quarterly installments of $1,296.9, from November
2023 to November 2030 and a balloon payment of $1,000 payable together with the last installment.
36. 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 Notes 11.A.23 and 11.A.27. On November 22, 2022, Greneta Marine Corp., Merle Marine Corp. and Gassin Marine Corp. drew
down the amount of $30,000. As of September 30, 2023, the aggregate outstanding balance of $27,034 is repayable in 21 variable quarterly
installments, from November 2023 to November 2028 with an aggregate balloon payment of $6,273.8 that is payable together with the respective
last installment.
37. 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.4, 11.A.5, 11.A.6 and 11.A.15 and for general corporate purposes. During January 2023 the aggregate amount of 322,830
was drawn. As of September 30, 2023, the aggregate outstanding balance of $276,540 is repayable in variable quarterly installments, from
December 2023 to December 2029 with an aggregate balloon payment of $16,800 that is payable together with the respective last installment.
38. 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.23 11.A.27
and 11.A.31. On December 20, 2022, the amount of $82,885 was drawn down. On September 7, 2023, pursuant to a supplemental agreement signed
during the third quarter of 2023, Oldstone Marine Corp. and Kinsley Marine Corp. drew down in two tranches the aggregate amount of $27,450.
As of September 30, 2023, the aggregate outstanding balance of $104,026 is repayable in variable quarterly installments, from October
2023 to September 2029 with an aggregate balloon payment of $39,948.2 that is payable together with the respective last installments.
39. At the time that the Company obtained control in NML (Note 1) that
took place during the nine-month period ended September 30, 2023, an NML subsidiary had entered into a loan agreement to finance one sale
and leaseback arrangement. As of September 30, 2023, the outstanding balance of $6,672 is repayable in 10 variable quarterly installments,
from November 2023 to February 2026 with an aggregate balloon payment of $900 that is payable together with the respective last installment.
40. On April 19, 2023, Alford Shipping Co., Finney Shipping Co., Kalamata
Shipping Corporation, Nisbet Shipping Co. and Novara Shipping Co. signed a loan agreement with a bank for an amount of $72,000 in order
to refinance the term loans discussed in Notes 11.A.10 and 11.A.21. On April 24, 2023, Alford Shipping Co., Finney Shipping Co., Kalamata
Shipping Corporation, Nisbet Shipping Co. and Novara Shipping Co. drew down the amount of $69,000. As of September 30, 2023, the outstanding
balance of $66,500 is repayable in 23 equal quarterly installments of $2,500, from October 2023 to April 2029 and a balloon payment of
$9,000 payable together with the last installment.
41. On May 26, 2023, Capetanissa Maritime Corporation and Berg Shipping
Co. signed a loan agreement with a bank for an amount of $25,548 in order to refinance the term loans discussed in Notes 11.A.9 and 11.A.13.
On May 30, 2023, Capetanissa Maritime Corporation and Berg Shipping Co. drew down the amount of $24,167 in two tranches. As of September
30, 2023, the outstanding balance of Tranche A of $13,673.8 is repayable in 19 equal quarterly installments of $513.2, from November 2023
to May 2028 and a balloon payment of $3,923 payable together with the last installment. As of September 30, 2023, the outstanding balance
of Tranche B of $9,618.2 is repayable in 19 equal quarterly installments of $361.8, from November 2023 to May 2028 and a balloon payment
of $2,744 payable together with the last installment.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
42. On June 19, 2023, Archet Marine Corp., Bagary Marine Corp., Bellet
Marine Corp., Courtin Marine Corp., Cron Marine Corp., Kinsley Marine Corp., Laudio Marine Corp., Nailstone Marine Corp., Oldstone Marine
Corp., Pomar Marine Corp., Ravenstone Marine Corp., Rocester Marine Corp., Silkstone Marine Corp., Snarestone Marine Corp. and Sweptstone
Marine Corp. signed a loan agreement with a bank for an amount of up to $150,000 in order to refinance the term loans discussed in Notes
11.A.24 and 11.A.29, as well as the acquisition of further vessels. On June 20, 2023, the amount of $65,779 was drawn down. As of September
30, 2023 the aggregate outstanding balance of $64,545 is repayable in 23 variable quarterly installments, from December 2023 to June 2029
with an aggregate balloon payment of $36,172 that is payable together with the respective last installments.
43. During the nine-month period ended September 30, 2023, NML entered
into a loan agreement to finance its four sale and leaseback arrangements. As of September 30, 2023, the outstanding balance of $36,000
is repayable in 20 variable quarterly installments, from October 2023 to July 2028 with an aggregate balloon payment of $14,400 that is
payable together with the respective last installment.
44. During the nine-month period ended September 30, 2023, NML entered
into a loan agreement to finance its two sale and leaseback arrangements. As of September 30, 2023, the aggregate outstanding balance
of $18,980 is repayable in 19 equal quarterly installments, from October 2023 to April 2028 with an aggregate balloon payment of $9,100
that is payable together with the respective last installment.
The term loans discussed above bear interest at Term Secured Overnight
Financing Rate (“SOFR”) (applicable to all loans discussed above except the loans discussed in Notes 11.A.28, 11.A.33, 11.A.37
and 11.A.41 and the loan discussed in Note 11.A.17 which bears a fixed rate) or Daily Non-Cumulative Compounded SOFR (applicable to the
loans discussed in Notes 11.A.28, 11.A.33, 11.A.37 and 11.A.41), 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 130% in all loans excluding one for which it
is 140%, 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, five wholly-owned subsidiaries of the Company, entered
into five pre and post-delivery financing agreements with a financial institution for the five newbuild containerships. 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 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 September 30, 2023 and following the delivery of the five newbuilds,
the aggregate outstanding amount of their financing arrangements is repayable in various installments from October 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 nine-month
period ended September 30, 2023, the interest expense incurred amounted to $12,767 ($13,409 for the nine-month period ended September
30, 2022), in aggregate, and is included in Interest and finance costs in the accompanying 2023 consolidated statement of income.
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.33, the Company prepaid the then outstanding amount of $77,435 in order to acquire the vessel Triton.
As at September 30, 2023, the aggregate outstanding amount of the four financing arrangements is repayable in various installments from
November 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 nine-month period ended September 30, 2023, the interest
expense incurred amounted to $9,468 ($11,994 for the nine-month period ended September 30, 2022), in aggregate, and is included in Interest
and finance costs in the accompanying consolidated statements of income.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
As of September 30, 2023, the aggregate outstanding balance of the financing
arrangements under (1) and (2) above was $644,698.
C. Unsecured Bond Loan (“Bond Loan”)
In May 2021, Costamare Participations Plc (the “Issuer”), a
wholly owned subsidiary of the Company, 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 September 30, 2023, the outstanding balance of the bond amounted
to $105,940. For the nine-month period ended September 30, 2023, the interest expense incurred amounted to $2,201 ($2,142 for the nine-month
period ended September 30, 2022) and is included in Interest and finance costs in the accompanying consolidated statements of income.
The scheduled repayments under the Term Loans, Other Financing Arrangements
and Bond loan after September 30, 2023, giving effect to the prepayment of the term loan discussed in 11.A.20, are in the aggregate as
follows:
12-month period
ending September 30, | |
Amount |
2024 | |
$ | 344,719 | |
2025 | |
| 324,346 | |
2026 | |
| 438,424 | |
2027 | |
| 379,349 | |
2028 | |
| 288,479 | |
2029 and thereafter | |
| 672,496 | |
Total | |
$ | 2,447,813 | |
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, 2022 and September 30, 2023, was in the range
2.99% - 7.47% and 2.64% - 9.00%, 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, 2022 and September 30, 2023,
was 4.9% and 4.9%, respectively.
Total interest expense incurred on long-term debt including the effect
of the hedging interest rate swaps / caps (discussed in Notes 20 and 22) for the nine-month periods ended September 30, 2022 and 2023,
amounted to $72,788 and $98,169, respectively.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(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 are as follows:
Balance, January 1, 2023 | |
$ | 22,913 | |
Additions | |
| 3,977 | |
Amortization and write-off | |
| (6,399 | ) |
Balance, September 30, 2023 | |
$ | 20,491 | |
Less: Current portion of financing costs | |
| (5,277 | ) |
Financing costs, non-current portion | |
$ | 15,214 | |
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 income (Note 20).
12. Right-of-Use Assets, Finance Lease Liabilities, Investment in leaseback
vessels and Net investment in Sales-type leases:
(a) Right-of-Use Assets and Finance Lease Liabilities: 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.33). 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.33). 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.
On May 12, 2023, the Company (Note 10) entered into a Share Purchase Agreement
with York and assumed the related finance lease liability with reference to the sale and leaseback agreement in place dated December 15,
2015. The respective lease contains a purchase obligation at the end of the lease term. On the acquisition date, the Company accounted
for the arrangement as finance lease and recognized the finance lease liability amounting to $28,064, making use of an incremental borrowing
rate of 6.04%. As of September 30, 2023, the outstanding amount of the finance lease liability bears fixed interest and is repayable in
various installments from October 2023 to April 2025 and a balloon payment of $23,113, payable together with the last installment.
The depreciation with respect to the right-of-use assets under finance
lease, charged during the nine-month periods ended September 30, 2022 and 2023, amounted to $3,284 and $465, respectively, and is included
in Depreciation in the accompanying consolidated statements of income. As of September 30, 2023 and December 31, 2022, the carrying value
of the right-of-use assets under finance lease amounted to $39,562 and nil, respectively, and is separately reflected as Finance leases,
right-of-use assets, in the accompanying consolidated balance sheet.
Total interest expenses incurred on finance leases, for the nine-month
periods ended September 30, 2022 and 2023, amounted to $2,109 and $468, respectively, and are included in Interest and finance costs in
the accompanying consolidated statements of income.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
The annual lease payments under the finance lease after September 30,
2023 are in the aggregate as follows:
12-month period ending September 30, | |
Amount |
2024 | |
$ | 4,189 | |
2025 | |
| 25,333 | |
Total | |
$ | 29,522 | |
Less: Amount of interest | |
| (2,309 | ) |
Total lease payments | |
$ | 27,213 | |
The total finance lease liabilities, are presented in the accompanying
December 31, 2022 and September 30, 2023 consolidated balance sheet as follows:
| |
December 31, 2022 | |
September 30, 2023 |
Finance lease liabilities – current | |
$ | - | | |
$ | 2,648 | |
Finance lease liabilities – non-current | |
| - | | |
| 24,565 | |
Total | |
$ | - | | |
$ | 27,213 | |
(b) Investments in leaseback vessels:
At the time that the Company obtained control in NML (Note 1), NML subsidiaries
had the following vessels under sale and leaseback arrangements:
1. One container vessel that was originally acquired in May 2021 by a wholly
owned subsidiary of NML and leased back under bareboat charter to the seller for a period of 4.75 years. The seller-lessee has the obligation
to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price.
The quarterly payments under the bareboat charter agreement bear interest at SOFR plus a margin. At March 30, 2023, the date the Company
obtained control over NML, the Company assessed that the arrangement constituted a failed sale and recognized loan receivable of $9,479.
As of September 30, 2023, the outstanding loan receivable balance under the bareboat agreement was $7,755 and is included in Investments
in leaseback vessels in the accompanying consolidated balance sheets.
2. One dry bulk vessel that was originally acquired in May 2022 by a wholly
owned subsidiary of NML and leased back under bareboat charter to the seller for a period of 5.5 years. The seller-lessee has the obligation
to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price.
The monthly payments under the bareboat charter agreement bear interest at Daily Non-Cumulative Compounded SOFR plus a margin. At March
30, 2023, the date the Company obtained control over NML, the Company assessed that the arrangement constituted a failed sale and recognized
loan receivable of $8,439. As of September 30, 2023, the outstanding loan receivable balance under the bareboat agreement was $8,050 and
is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
3. One dry bulk vessel that was originally acquired in December 2022 by
a wholly owned subsidiary of NML and leased back under bareboat charter to the seller for a period of 5.0 years. The seller-lessee has
the obligation to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed
price. The monthly payments under the bareboat charter agreement bear interest at fixed rate. At March 30, 2023, the date the Company
obtained control over NML, the Company assessed that the arrangement constituted a failed sale and recognized loan receivable of $15,194.
As of September 30, 2023, the outstanding loan receivable balance under the bareboat agreement was $14,049 and is included in Investments
in leaseback vessels in the accompanying consolidated balance sheets.
4. One dry bulk vessel that was originally acquired in December 2022 by
a wholly owned subsidiary of NML and leased back under bareboat charter to the seller for a period of 5.0 years. The seller-lessee has
the obligation to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed
price. The monthly payments under the bareboat charter agreement bear interest at Daily Non-Cumulative Compounded SOFR plus a margin.
At March 30, 2023, the date the Company obtained control over NML, the Company assessed that the arrangement constituted a failed sale
and recognized loan receivable of $6,515. As of September 30, 2023, the outstanding loan receivable balance under the bareboat agreement
was $6,132 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Subsequent to the NML acquisition (Note 1), NML acquired the following
vessels under sale and lease back arrangements:
1. In March 2023, NML acquired one dry-bulk vessel for $12,250, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $11,502 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
2. In April 2023, NML acquired one dry-bulk vessel for $12,250, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $11,596 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
3. In May 2023, NML acquired one dry-bulk vessel for $10,350, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at Daily Non-Cumulative Compounded SOFR plus a margin. The Company assessed that the
arrangement constituted a failed sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding
loan receivable balance under the bareboat agreement was $9,687 and is included in Investments in leaseback vessels in the accompanying
consolidated balance sheets.
4. In June 2023, NML acquired one dry-bulk vessel for $9,350, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at Daily Non-Cumulative Compounded SOFR plus a margin. The Company assessed that the
arrangement constituted a failed sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding
loan receivable balance under the bareboat agreement was $8,836 and is included in Investments in leaseback vessels in the accompanying
consolidated balance sheets.
5. In July 2023, NML acquired one tanker vessel for $10,000, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $9,916 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
6. In July 2023, NML acquired one tanker vessel for $10,000, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $9,915 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
7. In July 2023, NML acquired one tanker vessel for $10,000, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $9,915 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
8. In July 2023, NML acquired one tanker vessel for $10,000, and leased
the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase the vessel
at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly payments
under the bareboat charter agreement bear interest at SOFR plus a margin. The Company assessed that the arrangement constituted a failed
sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $9,915 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
9. In August 2023, NML acquired an offshore supply vessel for $13,000,
and leased the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase
the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly
payments under the bareboat charter agreement bear fixed interest. The Company assessed that the arrangement constituted a failed sale
and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance under
the bareboat agreement was $12,751 and is included in Investments in leaseback vessels in the accompanying consolidated balance sheets.
10. In August 2023, NML acquired an offshore supply vessel for
$13,000, and leased the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the
obligation to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a
pre-agreed price. The monthly payments under the bareboat charter agreement bear fixed interest. The Company assessed that the
arrangement constituted a failed sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the
outstanding loan receivable balance under the bareboat agreement was $12,751 and is included in Investments in leaseback vessels in
the accompanying consolidated balance sheets.
11. In September 2023, NML acquired one dry-bulk vessel for $8,500, and
leased the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation to purchase
the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price. The monthly
payments under the bareboat charter agreement bear interest at Daily Non-Cumulative Compounded SOFR plus a margin. The Company assessed
that the arrangement constituted a failed sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023,
the outstanding loan receivable balance under the bareboat agreement was $8,391 and is included in Investments in leaseback vessels in
the accompanying consolidated balance sheets.
12. In September 2023, NML acquired a multipurpose offshore vessel for
$14,400, and leased the vessel back to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation
to purchase the vessel at the end of the lease term and the right to purchase it prior to the end of this period at a pre-agreed price.
The monthly payments under the bareboat charter agreement bear fixed interest. The Company assessed that the arrangement constituted a
failed sale and accounted for the purchase price paid as loan receivable. As of September 30, 2023, the outstanding loan receivable balance
under the bareboat agreement was $14,148 and is included in Investments in leaseback vessels in the accompanying consolidated balance
sheets.
(c) Net investment in Sales-type leases: In April and May
2023, the container vessels Vela and Vulpecula, respectively, commenced variable rate time charters. The time charters were
classified as Sales-type leases and on their commencement dates an aggregate gain of $29,579 was recognized and is included in Gain on
sale of vessels, net in the accompanying consolidated statements of income.
The balance of the Net investment in sales-type lease reflected in the
accompanying balance sheet is analyzed as follows:
| |
September 30, 2023 |
Lease receivable | |
$ | 45,069 | |
Unguaranteed residual value | |
| 148 | |
Net investment in sales-type lease vessels | |
$ | 45,217 | |
| |
| | |
Net investment in sales-type lease vessels, current | |
| (17,734 | ) |
Net investment in sales-type lease vessels, non-current | |
$ | 27,483 | |
The following table presents a maturity analysis of the lease payments
on sales-type leases over the next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the net investment
in the lease receivables recognized in the consolidated balance sheet at September 30, 2023.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
12-month period ending
September 30, | |
Amount |
2024 | |
$ | 67,179 | |
2025 | |
| 38,893 | |
2026 | |
| 6,391 | |
2027 | |
| 5,606 | |
2028 | |
| 3,154 | |
Total undiscounted cash flows | |
$ | 121,223 | |
Present value of lease payments* | |
$ | 45,069 | |
*The difference between the present value of the lease payments and the
net investment in the lease balance in the balance sheet is due to the vessels unguaranteed residual value, which is included in the net
investment in the lease balance but is not included in the future lease payments.
13. Operating lease Right-of-Use Assets and Liabilities:
During the nine-month period ended September 30, 2023, CBI chartered-in
64 third-party vessels on short/medium/long term period charters. The carrying value of the operating lease liabilities and corresponding
right-of-use assets recognized in connection with the time charter-in vessel arrangements as of September 30, 2023 amounted to $306,692.
To determine the operating lease liability at each lease commencement, the Company used incremental borrowing rates since the rates implicit
in each lease were not readily determinable. For the operating charter-in arrangements that have commenced during the nine-month period
ended September 30, 2023, the Company used incremental borrowing rates ranging between 5.20% and 7.07% and the respective weighted average
remaining lease term as of September 30, 2023 was 2.25 years. The payments required to be made after September 30, 2023, for the outstanding
operating lease liabilities of the time charter-in vessel agreements with an initial term exceeding 12 months, recognized on the balance
sheet, are as follows:
12-month period ending September 30, | |
Amount |
2024 | |
$ | 183,855 | |
2025 | |
| 82,346 | |
2026 | |
| 59,488 | |
2027 | |
| 6,776 | |
Total | |
$ | 332,465 | |
Discount based on incremental borrowing rate | |
| (25,773 | ) |
Operating lease liabilities, including current portion | |
$ | 306,692 | |
14. 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,
2022 and September 30, 2023, 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, 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.
As at September 30, 2023, the net accrued charter revenue, totaling ($24,865), comprises of $9,553 separately reflected in Current assets,
$10,493 separately reflected in Non-current assets, and ($44,911) (discussed in (b) below) included in Unearned revenue in current and
non-current liabilities in the accompanying consolidated 2023 balance sheet. The maturities of the net accrued charter revenue as of September
30 of each 12-month period presented below are as follows:
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
12-month period ending September 30, | |
Amount |
2024 | |
$ | (5,771 | ) |
2025 | |
| (8,606 | ) |
2026 | |
| (9,857 | ) |
2027 | |
| (631 | ) |
Total | |
$ | (24,865 | ) |
(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, 2022 and as of
September 30, 2023, reflect: (a) cash received prior to the balance sheet date for which all criteria to recognize as revenue have not
been met, (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 and (c) the unamortized balance of the Time charter assumed liability
associated with the acquisition of Polar Brasil discussed in Note 10, with charter party assumed at value below its fair market
value at the date of delivery of the vessel. During the nine-month period ended September 30, 2023, the amortization of the liability
amounted to $289 and is included in Voyage revenue in the accompanying 2023 consolidated statement of income.
| |
December 31, 2022 | |
September 30, 2023 |
Hires collected in advance | |
$ | 16,906 | | |
$ | 29,525 | |
Charter revenue resulting from varying charter rates | |
| 42,861 | | |
| 44,911 | |
Unamortized balance of charters assumed | |
| - | | |
| 1,160 | |
Total | |
$ | 59,767 | | |
$ | 75,596 | |
Less current portion | |
| (25,227 | ) | |
| (45,725 | ) |
Non-current portion | |
$ | 34,540 | | |
$ | 29,871 | |
The Company recorded $12,520 as unearned revenue related to voyage charter
agreements in progress as of September 30, 2023, which will be recognized in earnings during the 12-month period following the balance
sheet date, as the performance obligations will be satisfied in that period.
(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. 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, 2022 and September 30, 2023,
the aggregate balance of time charter assumed (current and non-current) was $667 and $518, respectively, and is separately reflected in
the accompanying consolidated balance sheets. During the nine-month periods ended September 30, 2022 and 2023, the amortization expense
of Time charter assumed amounted to $148 and $148, respectively, and is included in Voyage revenue in the accompanying consolidated statements
of income.
15. Commitments and Contingencies
(a) Charters-out: As of September 30, 2023, future minimum
revenues assuming 365 revenue days per annum per vessel and the earliest redelivery dates possible, based on vessels’ committed,
non-cancellable, charter-out contracts, are as follows:
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
12-month period ending September 30, | |
Amount |
2024 | |
$ | 958,255 | |
2025 | |
| 681,376 | |
2026 | |
| 459,390 | |
2027 | |
| 228,133 | |
2028 | |
| 206,418 | |
2029 and thereafter | |
| 362,285 | |
Total | |
$ | 2,895,857 | |
The above calculation includes the charter-out arrangements of the Company’s
vessels and third-party vessels chartered-in as at September 30, 2023, but excludes the charter-out arrangements of: 14 dry bulk vessels
for which their time charter rate is index-linked, one container for which the Company had not secured employment as of September 30,
2023 and 29 voyages for which their rate is index-linked. These arrangements as at September 30, 2023, have remaining terms of up to 96
months.
(b) Charter-in commitments: The Company had no charter-in
commitments as of September 30, 2023.
(c) Capital Commitments: The Company had no capital commitments
as of September 30, 2023.
(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 has not been
established in the accompanying consolidated financial statements.
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 Company and Costamare Shipping are parties to lawsuits
filed 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.
In February 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. Further, the Company’s subsidiary, together with the other
containership company, reached agreements in February and April 2023 with the other parties that were actively asserting claims related
to the oil spill, including having reached agreements to resolve claims asserted by Amplify and subrogation claims that were asserted
by or could be asserted by a number of Amplify’s insurers relating to property damage, loss of production, and liabilities triggered
by the discharge of oil from Amplify’s pipeline. In connection with these settlements, neither the Company’s subsidiary
nor 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. The Company also believes that adequate insurance is in place to cover any liability,
if any should arise, from other claims that may be pursued against the Company’s subsidiary.
16. Redeemable Non-controlling Interest
In 2022, Costamare Bulkers Holdings Limited (“CBHL”),a wholly
owned subsidiary of the Company, 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. During the nine-month period ended September 30, 2023, CBI increased its share
capital by issuing another 100,000,000 common shares to CBHL in exchange of $100,000 and 8,108,108 common shares to the Other Investors
in exchange of $3,750.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
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(e)) (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 none of the remaining Other Investors accept to purchase all
the offered shares, secondly by offering its shares to the Company; (c) if the Company does not 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 it was initially determined that the shareholders agreement contains provisions that require
the Company to repurchase the non-controlling equity interest upon an occurrence of a 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. Based
upon the Company’s evaluation of the redemption provisions concerning redeemable noncontrolling interests as of September 30, 2023,
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). 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 for the portion of comprehensive income / (loss) of the period and the effect of the capital increases performed
by the holders of non-controlling interest into the period. The changes to redeemable non-controlling interest in subsidiary during the
nine-month period ended on September 30, 2023, were as follows:
Temporary equity – Redeemable non-controlling interest in subsidiary | |
Amount |
Balance, December 31, 2022 | |
$ | 3,487 | |
Capital increase in non-controlling interest | |
| 3,750 | |
Net loss attributable to redeemable non-controlling interest | |
| (6,089 | ) |
Balance, September 30, 2023 | |
$ | 1,148 | |
17. Common Stock and Additional Paid-In Capital:
(a) Common Stock: During each of the nine-month periods ended
September 30, 2022 and 2023, the Company issued 448,800 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 nine-month period ended September 30, 2023.
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, 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. During the nine-month period ended September
30, 2023, the Company issued 1,262,606 shares, at par value of $0.0001 to its common stockholders, at an average price of $9.5777 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. 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. During the
nine-month period ended September 30, 2023, the Company repurchased, under the share repurchase program, 6,267,808 common shares at an
aggregate cost of $60,000.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
As of September 30, 2023, the aggregate issued share capital was 128,749,819
common shares at par value of $0.0001. As of September 30, 2023 the issued share capital outstanding after deducting the treasury stock
repurchased was 117,745,309 common shares.
(b) 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 and the nine-month period ended September 30, 2023, (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) in cases where capital increase take place in a subsidiary through shares issuance,
the difference between the cash contributed from the non-controlling interests and the share of subsidiary’s equity acquired from
the non-controlling interests.
(c) Dividends declared and / or paid: During the nine-month
period ended September 30, 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 (iii) 0.115 per common share and, after accounting
for shareholders participating in the Plan, the Company paid $10,250 in cash and issued 330,961 shares pursuant to the Plan for the second
quarter of 2022. During the nine-month period ended September 30, 2023, 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 $10,219 in cash and issued 384,177
shares pursuant to the Plan for the fourth quarter of 2022, (ii) $0.115 per common share and, after accounting for shareholders participating
in the Plan, the Company paid $10,043 in cash and issued 498,030 shares pursuant to the Plan for the first quarter of 2023 and (iii) $0.115
per common share and, after accounting for shareholders participating in the Plan, the Company paid $9,511 in cash and issued 380,399
shares pursuant to the Plan for the second quarter of 2023.
During the nine-month period ended September 30, 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 and (iii) $939, or $0.476563 per share
for the period from April 15, 2022 to July 14, 2022. During the nine-month period ended September 30, 2023, 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, 2022 to January 14, 2023,
(ii) $939, or $0.476563 per share for the period from January 15, 2023 to April 14, 2023 and (iii) $939, or $0.476563 per share for the
period from April 15, 2023 to July 14, 2023.
During the nine-month period ended September 30, 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 and (iii) $2,111, or $0.531250 per
share for the period from April 15, 2022 to July 14, 2022. During the nine-month period ended September 30, 2023, 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, 2022 to January
14, 2023, (ii) $2,111, or $0.531250 per share for the period from January 15, 2023 to April 14, 2023 and (iii) $2,111, or $0.531250 per
share for the period from April 15, 2023 to July 14, 2023.
During the nine-month period ended September 30, 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 and (iii) $2,180, or $0.546875 per
share for the period from April 15, 2022 to July 14, 2022. During the nine-month period ended September 30, 2023, 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, 2022 to January
14, 2023, (ii) $2,180, or $0.546875 per share for the period from January 15, 2023 to April 14, 2023 and (iii) $2,180, or $0.546875 per
share for the period from April 15, 2023 to July 14, 2023.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
During the nine-month period ended September 30, 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 and (iii) $2,537, or $0.554688 per
share for the period from April 15, 2022 to July 14, 2022. During the nine-month period ended September 30, 2023, 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, 2022 to January
14, 2023, (ii) $2,537, or $0.554688 per share for the period from January 15, 2023 to April 14, 2023 and (iii) $2,537, or $0.554688 per
share for the period from April 15, 2023 to July 14, 2023.
18. 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 nine-month periods ended September 30, 2022 and 2023, amounted to $23,302.
| |
For the nine-month period ended September 30, |
| |
2022 | |
2023 |
| |
EPS | |
EPS |
Net income | |
$ | 360,516 | | |
$ | 276,344 | |
Less: Net loss attributable to non-controlling interest in subsidiaries | |
| - | | |
| 5,052 | |
Net income attributable to Costamare Inc. | |
| 360,516 | | |
| 281,396 | |
Less: paid and accrued earnings allocated to Preferred Stock | |
| (23,302 | ) | |
| (23,302 | ) |
Net income available to common stockholders | |
| 337,214 | | |
| 258,094 | |
Weighted average number of common shares, basic and diluted | |
| 123,295,035 | | |
| 121,059,768 | |
Earnings per common share, basic and diluted | |
$ | 2.74 | | |
$ | 2.13 | |
19. Voyage Revenues:
The following table shows the voyage revenues earned from time charters and voyage charters
during the nine-month periods ended September 30, 2022 and 2023:
| |
|
| |
For the nine-month period ended September 30, |
| |
2022 | |
2023 |
Time charters | |
$ | 848,428 | | |
$ | 740,873 | |
Voyage charters and Contracts of Affreightment | |
| - | | |
| 244,168 | |
Finance income in sales-type leases | |
| - | | |
| 26,927 | |
Total | |
$ | 848,428 | | |
$ | 1,011,968 | |
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
20. Interest and Finance Costs:
The Interest and finance costs in the accompanying consolidated statements of income are as
follows:
| |
For the nine-month period ended September 30, |
| |
2022 | |
2023 |
Interest expense | |
$ | 72,580 | | |
$ | 114,115 | |
Derivatives effect | |
| 2,317 | | |
| (15,478 | ) |
Amortization and write-off of financing costs | |
| 7,510 | | |
| 6,368 | |
Amortization of excluded component related to cash flow hedges | |
| 560 | | |
| 2,826 | |
Bank charges and other financing costs | |
| 3,477 | | |
| 2,192 | |
Total | |
$ | 86,444 | | |
$ | 110,023 | |
21. 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 income. The Company believes that its subsidiaries that are engaged in the dry bulk operating platform business and in the
sale and leaseback business are not subject to tax on their income in their respective countries of incorporation.
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.
22. 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, 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.
During the nine-month period ended September 30, 2023, the Company entered
into four interest rate cap agreements with a facility counterparty relating to the loans discussed in Note 11.A.20, 11.A.33 and 11.A.42,
with an aggregate notional amount of $333,727 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 SOFR or Daily Compounded SOFR exceeds 2.53%-3.50%. In addition, during the
nine-month period ended September 30, 2023, the Company entered into two interest rate cap agreements with a facility counterparty relating
to the loans discussed in Note 11.A.37 and Note 11.A.25, with an aggregate notional amount of $310,646 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 SOFR or Daily Compounded
SOFR exceeds 2.74%-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 respective loans. 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 $21,062
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 2024 to 2029.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
Furthermore, the Company entered into an interest rate swap agreement with
notional amount of $45,231, which met hedge accounting criteria according to ASC 815 related to the loan discussed in Note 11.A.17.
During the nine-month period ended September 30, 2023, the Company terminated
the interest rate caps related to the loans discussed in Note 11.A.5, 11.A.20, 11.A.24, 11.A.25 and 11.A.29 and received the aggregate
amount of $9,217, which is included in Loss on derivative instruments, net in the accompanying 2023 statement of income. Additionally,
the Company terminated three interest rate swaps relating to the loan discussed in Note 11.A.6 and received the amount of $7,597 in aggregate,
which is included in Loss on derivative instruments, net in the accompanying 2023 statement of income.
During the year ended December 31, 2022, the Company entered into eight
interest rate cap agreements with a facility counterparty relating to the loan discussed in Note 11.A.22, 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 12 interest rate cap agreements with
other counterparties relating to the loans discussed in Notes 11.A.5, 11.A.20, 11.A.24, 11.A.25, 11.A.28, 11.A.29 and 11.A.33, 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.5, 11.A.20, 11.A.22, 11.A.24, 11.A.25, 11.A.28, 11.A.29 and 11.A.33. 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 September 30, 2023 amounted to an asset of $42,501 ($24,939 as of December 31, 2022) and is included in the Fair value of derivatives
current and non-current in the accompanying September 30, 2023 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, both meeting the hedge accounting criteria
under ASC 815.
As of September 30, 2023, 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
September 30,
2023
(in USD) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21/5/2021 |
|
21/11/2025 |
|
€ |
50,000 |
|
|
$ |
61,175 |
|
|
|
2.70 |
% |
|
|
4.10 |
% |
|
|
$ (8,360 |
) |
25/5/2021 |
|
21/11/2025 |
|
€ |
50,000 |
|
|
$ |
61,200 |
|
|
|
2.70 |
% |
|
|
4.05 |
% |
|
|
$ (8,199 |
) |
Total fair value |
|
|
|
$ (16,559 |
) |
At December 31, 2022 and September 30, 2023, the Company had interest rate
swap agreements, cross-currency rate swap agreements and interest rate cap agreements with an outstanding notional amount of $1,094,930
and $1,321,336, respectively. The fair value of these derivatives outstanding as at December 31, 2022 and September 30, 2023 amounted
to a net asset of $44,918 and a net asset of $55,916, respectively, and these are included in the accompanying consolidated balance sheets.
The maturity of these derivatives ranges between July 2024 and March 2031.
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
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 $27,564.
(b) Interest rate swaps/ interest rate caps/ cross currency swaps
that do not meet the criteria for hedge accounting: As of September 30, 2023, 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 September 30, 2023,
the Company holds 27 Euro/U.S. dollar forward agreements totaling $86,100 at an average forward rate of Euro/U.S. dollar 1.0712, expiring
in monthly intervals up to December 2025.
As of September 30, 2023, CBI holds three Singapore dollar/U.S. dollar
forward agreements totaling $1,902 at an average forward rate of Singapore dollar/U.S. dollar 1.3343, with settlements up to December
2023.
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, 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.
The total change of forward contracts fair value for the nine-month period
ended September 30, 2023, was a loss of $1,614 (loss of $2,350 for the nine-month period ended September 30, 2022) and is included in
Loss on derivative instruments, net in the accompanying consolidated statements of income. The fair value of the forward contracts as
at December 31, 2022 and September 30, 2023, amounted to an asset of $2,379 and an asset of $765, respectively.
(d) Forward Freight Agreements (“FFAs”) and Bunker swap
agreements: As of September 30, 2023, the Company had a series of FFAs and bunker swap agreements, none of which qualify for hedge
accounting. 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
and September 30, 2023 amounted to a net asset of $96 and a net liability of $7,178, respectively. As of September 30, 2023, the Company
deposited cash collateral related to its FFA derivative instruments of $38,651, which is recorded within margin deposits in the accompanying
consolidated balance sheet. The amount of collateral to be posted is defined in the terms of the respective agreement executed with counterparties
and is required when the agreed upon threshold limits are exceeded.
| |
Derivatives | |
Derivatives |
| |
Assets-Current | |
Assets-Non-Current |
FFAs | |
$ | 2,705 | | |
$ | 2,136 | |
Bunker swaps | |
| 828 | | |
| - | |
Interest rate swaps | |
| 9,395 | | |
| 20,579 | |
Interest rate caps | |
| 20,978 | | |
| 21,523 | |
Forward currency contracts | |
| 491 | | |
| 274 | |
Total gross derivative contracts | |
$ | 34,397 | | |
$ | 44,512 | |
| |
| | | |
| | |
Amounts offset | |
| | | |
| | |
Counterparty netting | |
| (2,705 | ) | |
| (2,136 | ) |
Total derivative assets, September 30, 2023 | |
$ | 31,692 | | |
$ | 42,376 | |
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
| |
Derivatives | |
Derivatives |
| |
Liabilities-Current | |
Liabilities-Non-Current |
FFAs | |
$ | (9,751 | ) | |
$ | (2,241 | ) |
Bunker swaps | |
| (699 | ) | |
| (156 | ) |
Cross-currency rate swaps | |
| (2,809 | ) | |
| (13,750 | ) |
Total gross derivative contracts | |
$ | (13,259 | ) | |
$ | (16,147 | ) |
| |
| | | |
| | |
Amounts offset | |
| | | |
| | |
Counterparty netting | |
| 2,705 | | |
| 2,136 | |
Total derivative liabilities, September 30, 2023 | |
$ | (10,554 | ) | |
$ | (14,011 | ) |
The Effect of Derivative Instruments for the nine-month periods ended |
September 30, 2022 and 2023 |
Derivatives in ASC 815 Cash Flow Hedging Relationships |
| |
Amount of Gain / (Loss) Recognized in Accumulated OCI on Derivative |
| |
2022 | |
2023 |
Interest rate swaps and cross-currency swaps | |
$ | 37,036 | | |
$ | 4,833 | |
Interest rate caps (included component) | |
| 20,018 | | |
| 24,574 | |
Interest rate caps (excluded component) (1) | |
| (8,293 | ) | |
| (18,511 | ) |
Reclassification to Interest and finance costs | |
| 616 | | |
| (15,478 | ) |
Reclassification of amount excluded from the interest rate caps assessment of hedge effectiveness based on an amortization approach to Interest and finance costs | |
| 560 | | |
| 2,826 | |
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation | |
| 47 | | |
| 47 | |
Total | |
$ | 49,984 | | |
$ | (1,709 | ) |
(1) Excluded component represents interest rate
caps instruments time value.
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 |
|
|
|
|
2022 |
|
|
2023 |
|
Hedging interest rate swaps and caps |
|
Loss on derivative instruments, net |
|
$ |
- |
|
|
$ |
12,157 |
|
Non-hedging interest rate swaps |
|
Loss on derivative instruments, net |
|
|
(284) |
|
|
|
(283) |
|
Forward Freight Agreements |
|
Loss on derivative instruments, net |
|
|
- |
|
|
|
(17,885) |
|
Bunker swap agreements |
|
Loss on derivative instruments, net |
|
|
- |
|
|
|
446 |
|
Forward currency contracts |
|
Loss on derivative instruments, net |
|
|
(2,350) |
|
|
|
(1,614) |
|
Total |
|
$ |
(2,634) |
|
|
$ |
(7,179) |
|
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
23. 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 and receivables from sales-type leases 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. For investments in leaseback vessels the Company is exposed to a limited degree
of credit risk since through this type of arrangements the receivable amounts are secured by the legal ownership on each of the vessels
acquired. Credit risk in leaseback vessels is managed through setting receivable amounts appropriate for each vessel based on information
obtained from the vessel’s third party independent valuations and the counterparties’ lending history. In addition, the Company
follows standardized established policies which include monitoring of the counterparties’ financial performance, debt covenants
(including vessels values), and shipping industry trends.
(c) Fair value: The carrying amounts reflected in the accompanying
consolidated balance sheet of short-term investments 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 and investment in leaseback vessels 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.17, the fair value
of investment in leaseback vessels with fixed interest rate discussed in Notes 12(b)(3), 12(b)(9), 12(b)(10) and 12(b)(12), 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 22 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 other financing arrangements with fixed interest rates
discussed in Note 11.B determined through Level 2 of the fair value hierarchy as of September 30, 2023, amounted to $560,565 in the aggregate
($600,416 in the aggregate at December 31, 2022). The fair value of the term loan with fixed interest rates discussed in Note 11.A.17,
determined through Level 2 of the fair value hierarchy as of September 30, 2023, amounted to $107,721 ($116,311 at December 31, 2022).
The fair value of investment in leaseback vessels with fixed rate discussed in Notes 12(b)(3), 12(b)(9), 12(b)(10) and 12(b)(12) determined
through Level 2 of the fair value hierarchy as of September 30, 2023, amounted to $54,170. The fair value of the Company’s other
financing arrangements (Note 11.B), term loan with fixed interest rates discussed in Note 11.A.17 and investment in leaseback vessels
discussed in Notes 12(b)(3), 12(b)(9), 12(b)(10) and 12(b)(12), 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 22(a) and (b) equates to the amount that would be paid or received
by the Company to cancel the agreements. As at December 31, 2022 and September 30, 2023, the fair value of these derivative instruments
in aggregate amounted to a net asset of $44,918 and a net asset of $55,916, respectively.
The fair value of the forward currency contracts discussed in Note 22(c)
and the forward freight agreements and bunker swap agreements discussed in Note 22(d) determined through Level 2 of the fair value hierarchy
as at December 31, 2022 and September 30, 2023, amounted to a net asset of $2,475 and a net liability of $6,413, respectively.
The fair value of the Bond Loan discussed in Note 11.C determined through
Level 1 of the fair value hierarchy as at September 30, 2023, amounted to $99,054 ($102,394 at December 31, 2022).
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(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, 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 | | |
$ | - | |
| |
September 30, 2023 | |
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 | |
$ | 765 | | |
$ | - | | |
$ | 765 | | |
$ | - | |
Forward Freight Agreements-liability position | |
| (7,151 | ) | |
| - | | |
| (7,151 | ) | |
| - | |
Bunker swap agreements-asset position | |
| 828 | | |
| - | | |
| 828 | | |
| - | |
Bunker swap agreements-liability position | |
| (855 | ) | |
| - | | |
| (855 | ) | |
| - | |
Interest rate swaps-asset position | |
| 29,974 | | |
| - | | |
| 29,974 | | |
| - | |
Interest rate caps-asset position | |
| 42,501 | | |
| - | | |
| 42,501 | | |
| - | |
Cross-currency rate swaps-liability position | |
| (16,559 | ) | |
| - | | |
| (16,559 | ) | |
| - | |
Total | |
$ | 49,503 | | |
$ | - | | |
$ | 49,503 | | |
$ | - | |
Assets measured at fair value on a non-recurring basis:
During the nine-month period ended September 30, 2023, the Company recorded
an impairment loss of $229 (Note 7) for one of its dry bulk vessels as its future undiscounted net operating cash flows were less than
its carrying amount. The fair value of the dry bulk vessel was determined through Level 2 inputs of the fair value hierarchy.
24. Comprehensive Income:
During the nine-month period ended September 30, 2022, Accumulated other
comprehensive income increased with net gains of $49,984 relating to (i) the change of the fair value of derivatives that qualify for
hedge accounting (gain of $47,308), plus the settlements to net income of derivatives that qualify for hedge accounting (gain of $616),
(ii) the effective portion of changes in fair value of cash flow hedges (gain of $1,453), (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 $560)
and (iv) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($47).
During the nine-month period ended September 30, 2023, Accumulated other
comprehensive income decreased with net losses of $1,709 relating to (i) the change of the fair value of derivatives that qualify for
hedge accounting (gain of $10,837), plus the settlements to net income of derivatives that qualify for hedge accounting (loss of $15,478),
(ii) the effective portion of changes in fair value of cash flow hedges (gain of $59), (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 $2,826)
and (iv) the amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to depreciation ($47).
COSTAMARE INC.
Notes to Unaudited Consolidated Financial Statements
September 30, 2022 and 2023
(Expressed in thousands of U.S. dollars, except share and per share data, unless otherwise stated)
25. Subsequent Events:
| (a) | Declaration and payment of dividends (common stock): On October 2, 2023, the Company declared
a dividend of $0.115 per share on the common stock, which was paid on November 6, 2023, to holders of record of common stock as of October
20, 2023. |
| (b) | Declaration and payment of dividends (preferred stock Series B, Series C, Series D and Series E):
On October 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 October 16, 2023 to holders of record as of October 13, 2023. |
| (c) | Vessels’ sale: (i) On October 17, 2023, pursuant to the Memorandum
of Agreement dated September 28, 2023, the container vessel Oakland was delivered to her buyers (Note 7). On October
13, 2023, pursuant to the sale of the vessel Oakland, the Company prepaid the amount of $2,668 related to the term loan discussed
in Note 11.A.20. (ii) On October 19 and October 27, 2023, the Company entered into Memorandum of Agreements for the sale of the 2006-built,
55,709 DWT capacity dry bulk vessel, Peace, and of the 2006-built, 55,705 DWT capacity dry bulk vessel, Pride, respectively.
The vessels are expected to be delivered to their new owners during the fourth quarter of 2023. |
| | |
| (d) | Investment in leaseback vessels: In October
2023, NML acquired one dry-bulk vessel for $8,500 and leased the vessel back
to the seller under bareboat charter for a period of 5.0 years. The seller-lessee has the obligation
to purchase the vessel at the end of the lease term and the right to purchase it prior to the
end of this period at a pre-agreed price. The monthly payments under the bareboat charter agreement
bear interest at Daily Non-Cumulative Compounded SOFR plus a margin. |
| | |
| | Furthermore, in October 2023, NML signed commitment
letters, subject to final documentation, with third party shipowners (sellers) to acquire five vessels under sale
and bareboat agreements, under which the vessels will be chartered back to the sellers under bareboat charter agreements, for an aggregate
amount of up to $44.8 million. |
41
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