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Costamare Inc. Reports Results for Fourth Quarter and Year


Costamare Inc. Reports Results for Fourth Quarter and Year Ended December 31, 2012

ATHENS, GREECE -- (Marketwire) -- 01/23/13 -- Costamare Inc. ("Costamare" or the "Company") (NYSE: CMRE) today reported unaudited financial results for the fourth quarter and year ended December 31, 2012.

Financial Highlights


 
--  Voyage revenues of $95.2 million and $386.2 million for the three
    months and year ended December 31, 2012, respectively.
    
    
--  Voyage revenues adjusted on a cash basis of $97.6 million and $392.4
    million for the three months and year ended December 31, 2012,
    respectively.
    
    
--  Adjusted EBITDA of $62.5 million and $253.1 million for the three
    months and year ended December 31, 2012, respectively.
    
    
--  Net income of $22.9 million or $0.31 per share and $81.1 million or
    $1.20 per share for the three months and the year ended December 31,
    2012, respectively.
    
    
--  Adjusted net income of $23.6 million or $0.32 per share and $91.3
    million or $1.35 per share for the three months and year ended
    December 31, 2012, respectively.

New Business Developments


 
--  The Company purchased the 2003-built, 5,928 TEU container vessel
    Venetiko (ex. Ace Ireland) for $22.2 million. The vessel is expected
    to be delivered to the Company no later than February 28, 2013. The
    acquisition is initially entirely financed with cash on hand. The
    Company also entered into a charter agreement with Pacific
    International Lines (Pte) Ltd., Singapore ("PIL") for a period of
    minimum 12 months and maximum of 15 months at a daily rate of $14,500.
    The vessel is expected to be delivered to her charterers by the end of
    March 2013.
    
    
--  The Company sold the 1984-built, 3,876 TEU containership MSC
    Washington for demolition for approximately $8.2 million. The vessel
    was delivered to its buyers on January 2, 2013. The sale of the MSC
    Washington resulted in a book gain of approximately $3.2 million.
    
    
--  In January 2013, our manager Costamare Shipping Company S.A. entered
    into a co-operation agreement (the "Co-operation Agreement") with
    third party ship managers V Ships Greece Ltd., pursuant to which the
    two companies w
ill establish a ship management cell (the "Cell")
    within V Ships Greece Ltd. The Cell will provide technical management
    services to initially about 22 Costamare Inc. container vessels for
    which Costamare Shipping will remain the head manager and also to
    vessels of third party clients. The Co-operation Agreement provides
    that Costamare Shipping Company S.A. will receive part of the profits
    generated by the Cell. Costamare Inc. and Costamare Shipping Company
    S.A. have agreed that Costamare Shipping Company S.A. will pass to
    Costamare Inc. the net profit it receives pursuant to the Co-operation
    Agreement as a refund or reduction of the management fees payable by
    Costamare Inc. to Costamare Shipping Company S.A. This arrangement
    will provide us with the operational flexibility needed to respond to
    changing market conditions, while reducing our ship management
    expenditure.

Dividend Announcements


 
--  On January 17, 2013, the Company declared a dividend for the fourth
    quarter ended December 31, 2012, of $0.27 per share, payable on
    February 13, 2013 to stockholders of record at the close of trading of
    the Company's common stock on the New York Stock Exchange on January
    30, 2013. This will be the Company's ninth consecutive quarterly
    dividend since it commenced trading on the New York Stock Exchange.

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

"During the fourth quarter of the year, the Company continued to deliver positive results.

"On the ship management front, the Co-operation Agreement between our manager and V-Ships provides us both with the resources needed to achieve our growth plans and the flexibility to adjust the size of our fleet depending on market conditions in a highly cyclical industry.

"At the same time we have addressed the potential for conflicts of interest; by aligning the interests of the listed entity and our manager in the structure. The management company will be passing along to the listed entity its entire share of the profits resulting from the Co-operation Agreement. As a result of this arrangement, we expect that over time the management fees currently paid by Costamare Inc. can be reduced.

"Regarding new transactions, we bought a 2003 built approx. 6,000 TEU container vessel for a purchase price of $22.2 million. The vessel has been chartered for a period of 12-15 months at a rate yielding attractive returns with a lot of upside.

"At the same time we took advantage of a strong demolition market and sold a 29 - year old vessel; the transaction resulted in an accounting gain of approximately $3.2 million.

"In a challenging market we have minimized our re-chartering risk. The charters for the vessels opening in 2013 and 2014 account for approximately 4% and 3% of our 2013 and 2014 contracted revenues respectively.

"Finally, on January 17 we declared a dividend for the fourth quarter of $0.27 per share. Consistent with our dividend policy, we continue to offer an attractive dividend, which we consider to be sustainable based on the size of our contracted cash flows, the quality of our charterers and the prudent amortization of our debt.

"We believe that going forward, a containership market under pressure provides us with the opportunity to expand opportunistically in a low rate and asset values environment."


 
                                                                            
                              Financial Summary                             
                                                                            
                                                        Three-month period  
                             Year ended December 31,    ended December 31,  
                             ----------------------- -----------------------
(Expressed in thousands of                                                  
 U.S. dollars, except share                                                 
 and per share data):            2011        2012        2011        2012   
                             ----------- ----------- ----------- -----------
                                                                            
                                                                            
Voyage revenue               $   382,155 $   386,155 $   101,990 $    95,193
Accrued charter revenue (1)  $    30,313 $     6,261 $     7,095 $     2,352
Voyage revenue adjusted on a                                                
 cash basis (2)              $   412,468 $   392,416 $   109,085 $    97,545
                                                                            
Adjusted EBITDA (3)          $   274,669 $   253,097 $    74,671 $    62,510
                                                                            
Adjusted Net Income (3)      $   112,763 $    91,346 $    32,595 $    23,625
Weighted Average number of                                                  
 shares                       60,300,000  67,612,842  60,300,000  73,658,696
Adjusted Earnings per share                                                 
 (3)                         $      1.87 $      1.35 $      0.54
 $      0.32
                                                                            
EBITDA (3)                   $   249,498 $   242,880 $    68,158 $    61,816
Net Income                   $    87,592 $    81,129 $    26,082 $    22,931
Weighted Average number of                                                  
 shares                       60,300,000  67,612,842  60,300,000  73,658,696
Earnings per share           $      1.45 $      1.20 $      0.43 $      0.31

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

(3) Adjusted net income, adjusted earnings per share, EBITDA and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of net income to adjusted net income and net income to EBITDA and adjusted EBITDA below.

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the years and three-month periods ended December 31, 2012 and December 31, 2011. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income, (iii) Adjusted earnings per share, (iv) EBITDA and (v) Adjusted EBITDA.


 
                                                                            
            Reconciliation of Net Income to Adjusted Net Income             
                                                                            
                                                   Three-month period ended 
                           Year ended December 31,       December 31,       
                          ------------------------ ------------------------ 
(Expressed in thousands                                                     
 of U.S. dollars, except                                                    
 share and per share                                                        
 data)                        2011         2012        2011         2012    
                          -----------  ----------- -----------  ----------- 
                                                                            
Net Income                $    87,592  $    81,129 $    26,082  $    22,931 
Accrued charter revenue        30,313        6,261       7,095        2,352 
(Gain)/ Loss on                                                             
 sale/disposal of vessels     (13,077)       2,796      (2,306)      (1,500)
Realized (Gain)/ Loss on                                                    
 Euro/USD forward                                                           
 contracts                     (1,971)         698        (405)        (299)
(Gain)/ Loss on                                                             
 derivative instruments         8,709          462       2,129          141 
Initial purchases of                                                        
 consumable stores for                                                      
 newly acquired vessels         1,197            -           -            - 
                                                                            
                          -----------  ----------- -----------  ----------- 
Adjusted Net income       $   112,763  $    91,346 $    32,595  $    23,625 
                          ===========  =========== ===========  =========== 
Adjusted Earnings per                                                       
 Share                    $      1.87  $      1.35 $      0.54  $      0.32 
                          ===========  =========== ===========  =========== 
Weighted average number                                                     
 of shares                 60,300,000   67,612,842  60,300,000   73,658,696 
                          ===========  =========== ===========  =========== 

Adjusted Net income and Adjusted Earnings per Share represent net income before gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized (gain)/loss on Euro/USD forward contracts and the cash of initial purchases of consumable stores for newly acquired vessels. "Accrued charter revenue" is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net income and Adjusted Earnings per Share are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of Adjusted Net income and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net income and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net income and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net income and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating perfo rmance and liquidity. In evaluating Adjusted Net income and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net income and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.


 
                                                                            
               Reconciliation of Net Income to Adjusted EBITDA              
                                                                            
                                      Year ended        Three-month period  
                                     December 31,       ended December 31,  
                                 --------------------  -------------------- 
(Expressed in thousands of U.S.                                             
 dollars)                           2011       2012       2011       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
                                                                            
Net Income                       $  87,592  $  81,129  $  26,082  $  22,931 
Interest and finance costs          75,441     74,734     19,488     16,894 
Interest income                       (477)    (1,495)      (123)      (322)
Depreciation                        78,803     80,333     20,711     20,151 
Amortization of dry-docking and                                             
 special survey costs                8,139      8,179      2,000      2,162 
                                 ---------  ---------  ---------  --------- 
EBITDA                             249,498    242,880     68,158     61,816 
Accrued charter revenue             30,313      6,261      7,095      2,352 
(Gain)/ Loss on sale/disposal of                                            
 vessels                           (13,077)     2,796     (2,306)    (1,500)
Realized (Gain)/ Loss on                                                    
 Euro/USD forward contracts         (1,971)       698       (405)      (299)
Gain/ (Loss) on derivative                                                  
 instruments                         8,709        462      2,129        141 
Initial purchases of consumable                                             
 stores for newly acquired                                                  
 vessels                             1,197          -          -          - 
                                 ---------  ---------  ---------  --------- 
Adjusted EBITDA                  $ 274,669  $ 253,097  $  74,671  $  62,510 
                                 =========  =========  =========  ========= 

EBITDA represents net income before interest and finance costs, interest income, depreciation and amortization of deferred dry-docking & special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation, amortization of deferred dry-docking & special survey costs, gain/(loss) on sale of vessels, non-cash changes in fair value of derivatives, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized (gain)/loss on Euro/USD forward contracts and the cash of initial purchases of consumable stores for newly acquired vessels. "Accrued charter revenue" is attributed to the time difference between the revenue recognition and the cash collection. However, EBITDA and Adjusted EBITDA are not recognized measurements under U.S. generally accepted accounting principles, or "GAAP." We believe that the presentation of EBITDA and Adjusted EBITDA are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that EBITDA and Adjusted EBITDA are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that EBITDA and Adjusted EBITDA are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of EBITDA and Adjusted EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Note: Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to net income. Charges negatively impacting net income are reflected as increases to net income.

Results of Operations

Three-month period ended December 31, 2012 compared to the three-month period ended December 31, 2011

During the three-month periods ended December 31, 2012 and 2011, we had an average of 47.0 and 48.3 vessels, respectively, in our fleet. In the three-month period ended December 31, 2012, no vessels were acquired or sold. In the three-month period ended December 31, 2011, we acquired the secondhand vessel MSC Methoni with a TEU capacity of 6,724 and we sold three vessels, while the vessel Rena was determined to be a constructive total loss ("CTL") for insurance purposes in October 2011, with an aggregate TEU capacity, including the vessel Rena, of 8,922. In the three-month period ended December 31, 2012 and 2011, our fleet ownership days totaled 4,324 and 4,446 days, respectively. Ownership days are the primary driver of voyage revenue and vessels' operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.


 
                                                                            
                                Three-month period                          
                                ended December 31,                          
                               --------------------                         
(Expressed in millions of U.S.                                  Percentage  
  dollars, except percentages)    2011       2012      Change     Change    
                               ---------  ---------  ---------  ----------  
                                                                            
                                                                            
Voyage revenue                 $   102.0  $    95.2  $    (6.8)       (6.7%)
Voyage expenses                     (0.9)      (1.5)       0.6        66.7% 
Voyage expenses - related                                                   
 parties                            (0.8)      (0.7)      (0.1)      (12.5%)
Vessels operating expenses         (27.0)     (27.8)       0.8         3.0% 
General and administrative                                                  
 expenses                           (1.4)      (1.0)      (0.4)      (28.6%)
Management fees - related                                                   
 parties                            (4.1)      (3.8)      (0.3)       (7.3%)
Amortization of dry-docking                                                 
 and special survey costs           (2.0)      (2.2)       0.2        10.0% 
Depreciation                       (20.7)     (20.2)      (0.5)       (2.4%)
Gain/ (loss) on sale/disposal                                               
 of vessels                          2.3        1.5       (0.8)      
(34.8%)
Foreign exchange gains/                                                     
 (losses)                            0.2       (0.1)      (0.3)     (150.0%)
Interest income                      0.1        0.3        0.2       200.0% 
Interest and finance costs         (19.5)     (16.9)      (2.6)      (13.3%)
Other                                  -        0.2        0.2       100.0% 
Gain/ (loss) on derivative                                                  
 instruments                        (2.1)      (0.1)      (2.0)      (95.2%)
                               ---------  ---------                         
Net Income                     $    26.1  $    22.9  $                      
                               =========  =========                         
                                                                            
                                                                            
                                  Three-month period                        
                                  ended December 31,                        
                                 -------------------                        
 (Expressed in millions of U.S.                                 Percentage  
   dollars, except percentages)     2011      2012     Change     Change    
                                 --------- --------- ---------  ----------  
                                                                            
Voyage revenue                   $   102.0 $    95.2 $    (6.8)       (6.7%)
Accrued charter revenue                7.1       2.4      (4.7)      (66.2%)
                                 --------- ---------                        
Voyage revenue adjusted on a                                                
 cash basis                      $   109.1 $    97.6 $                      
                                 ========= =========                        
                                                                            
                                                                            
                                       Three-month                          
                                       period ended                         
                                       December 31,                         
                                    -----------------                       
                                                                Percentage  
Fleet operational data                2011     2012    Change     Change    
                                    -------- -------- --------  ----------  
                                                                            
Average number of vessels               48.3     47.0     (1.3)       (2.7%)
Ownership days                         4,446    4,324     (122)       (2.7%)
Number of vessels underwent dry-                                            
 dock and special survey during the                                         
 periods                                   -        3        3              

Voyage Revenue

Voyage revenue decreased by 6.7%, or $6.8 million, to $95.2 million during the three-month period ended December 31, 2012, from $102.0 million during the three-month period ended December 31, 2011. The decrease in Voyage revenue is mainly due to decreased ownership days of our fleet by 2.7% during the three-month period ended December 31, 2012, compared to the three-month period ended December 31, 2011. Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 10.5%, or $11.5 million, to $97.6 million during the three-month period ended December 31, 2012, from $109.1 million during the three-month period ended December 31, 2011. The decrease is mainly attributable to the decreased ownership days of our fleet and the decreased charter hire received in accordance with certain escalation clause s of our charters during the three-month period ended December 31, 2012 compared to the three-month period ended December 31, 2011.

Voyage Expenses

Voyage expenses increased by 66.7%, or $0.6 million, to $1.5 million during the three-month period ended December 31, 2012, from $0.9 million during the three-month period ended December 31, 2011. The increase was primarily attributable to the off-hire expenses, mainly relating to bunkers consumption (i) of three vessels that were dry-docked (ii) of two vessels on their way to their new charters and, (iii) of one vessel on the way to her scrap buyer (delivered for scrap in January 2013) during the three-month period ended December 31, 2012; partly offset by the decreased third party commissions charged to us in the three-month period December 31, 2012, compared to the three-month period ended December 31, 2011.

Voyage Expenses - related parties

Voyage expenses - related parties in the amount of $0.7 million during the three-month period ended December 31, 2012 and in the amount of $0.8 million during the three-month period ended December 31, 2011, represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 3, 2010.

Vessels' Operating Expenses

Vessels' operating expenses, which also include the realized gain (loss) under derivative contracts entered into in relation to foreign currency exposure, increased by 3.0%, or $0.8 million, to $27.8 million during the three-month period ended December 31, 2012, from $27.0 million during the three-month period ended December 31, 2011. The increase is partly attributable to the increase of the average vessel size of our fleet during the three-month period ended December 31, 2012, compared to the same period of 2011; partly offset by the decreased ownership days of our fleet during the three-month period ended December 31, 2012, compared to the same period of 2011.

General and Administrative Expenses

General and administrative expenses decreased by 28.6%, or $0.4 million, to $1.0 million during the three-month period ended December 31, 2012, from $1.4 million during the three-month period ended December 31, 2011. The decrease in the three-month period ended December 31, 2012, was mainly attributable to decreased public-company related expenses charged to us compared to the three-month period ended December 31, 2011. Furthermore, General and administrative expenses for the three-month period ended December 31, 2012 and 2011, include $0.25 million for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 3, 2010.

Management Fees - related parties

Management fees paid to our managers decreased by 7.3%, or $0.3 million, to $3.8 million during the three-month period ended December 31, 2012, from $4.1 during the three-month period ended December 31, 2011. The decrease was primarily attributable to the decreased fleet ownership days for the three-month period ended December 31, 2012, compared to the three-month period ended December 31, 2011.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $2.2 million for the three-month period ended December 31, 2012 and $2.0 for the three-month period ended December 31, 2011. During the three-month period ended December 31, 2012 and 2011, three vessels and no vessels underwent their special survey, respectively.

Depreciation

Depreciation expense decreased by 2.4%, or $0.5 million, to $20.2 million during the three-month period ended December 31, 2012, from $20.7 million during the three-month period ended December 31, 2011. The decrease was primarily attributable to the depreciation expense not charged for eight vessels that were sold during the fourth quarter of 2011 and the year ended December 31, 2012; partly offset by the depreciation expense charged for five vessels that were acquired during the year ended December 31, 2012.

Gain/ (Loss) on Sale/Disposal of Vessels

In the three-month period ended December 31, 2012, we recorded a book gain of $1.5 from the effect of the partial reversal of a provision recorded in 2011 for costs associated with the grounding of the vessel Rena. During the three-month period ended December 31, 2011, we recorded in aggregate, on a net basis, a gain of $2.3 million from the sale of three vessels and the "CTL" of the vessel Rena.

Foreign Exchange Gains/ (Losses)

Foreign exchange gains/ losses were losses of $0.1 million during the three-month period ended December 31, 2012, and gains of $0.2 million during the three-month period ended December 31, 2011.

Interest Income

During the three-month period ended December 31, 2012, interest income increased by 200.0%, or $0.2 million, to $0.3 million, from $0.1 million during the three-month period ended December 31, 2011. The change in interest income was mainly due to the increased cash deposits in interest bearing accounts during the three-month period ended December 31, 2012, compared to the three-month period ended December 31, 2011, which resulted from the increased average cash balance during the three-month period ended December 31, 2012, compared to the three-month period ended December 31, 2011.

Interest and Finance Costs

Interest and finance costs decreased by 13.3%, or $2.6 million, to $16.9 million during the three-month period ended December 31, 2012, from $19.5 million during the three-month period ended December 31, 2011. The decrease is partly attributable to decreased financing costs and commitment fees charged to us mainly in relation to new credit facilities we entered into during the year ended December 31, 2011, in connection with our new building program; partly offset by the capitalized interest in relation to our new-building program.

Gain/ (Loss) on Derivative Instruments

The fair value of our 28 interest rate derivative instruments which were outstanding as of December 31, 2012, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2012, the fair value of these 28 interest rate derivative instruments in aggregate amounted to a liability of $180.8 million. Twenty-seven of the 28 interest rate derivative instruments that were outstanding as at December 31, 2012, qualified for hedge accounting and the effective portion of the change in their fair value is recorded in "Comprehensive loss". For the three-month period ended December 31, 2012, a gain of $12.0 million has been included in "Comprehensive loss" and a loss of $0.05 million has been included in "Gain/ (loss) on derivative instruments" in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended December 31, 2012.

Cash Flows


 
                                                                            
      Three-month period ended December 31, 2012 and December 31, 2011      
                                                                            
                                                        Three-month period  
Condensed cash flows                                    ended December 31,  
                                                       -------------------- 
(Expressed in millions of U.S. dollars)                   2011       2012   
                                                       ---------  --------- 
Net Cash Provided by Operating Activities              $    60.8  $    44.7 
Net Cash Used in Investing Activities                  $   (27.1) $   (74.5)
Net Cash Provided by (Used in) Financing Activities    $    (6.2) $    80.0 

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the thre e-month period ended December 31, 2012, decreased by $16.1 million to $44.7 million, compared to $60.8 million for the three-month period ended December 31, 2011. The decrease was primarily attributable to (a) the decreased cash from operations of $11.5 million deriving from escalating charter rates, (b) the increased dry-docking payments of $3.1 million and (c) by the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $3.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $74.5 million in the three-month period ended December 31, 2012, which mainly consists of (a) $82.1 million advance payments for the construction and purchase of five newbuild vessels and (b) $7.9 million advance payment we received from the sale of one vessel for scrap which was delivered to her scrap buyers in January 2013.

Net cash used in investing activities was $27.1 million in the three-month period ended December 31, 2011.

Net Cash Provided By (Used in) Financing Activities

Net provided by financing activities was $80.0 million in the three-month period ended December 31, 2012, which mainly consists of (a) $40.8 million of indebtedness that we repaid, (b) $47.5 million we drew down f rom three of our credit facilities, (c) $20.2 million we paid for dividends to our stockholders for the third quarter of the year 2012 and (d) $93.5 million net proceeds we received from our follow-on offering in October 2012, net of underwriting discounts and expenses incurred in the offering.

Net cash used in financing activities was $6.2 million in the three-month period ended December 31, 2011, which mainly consists of (a) $40.7 million of indebtedness that we repaid, (b) $57.3 million we drew down from two of our credit facilities and (c) $16.3 million we paid for dividends to our stockholders for the third quarter of the year 2011.

Results of Operations

Year ended December 31, 2012 compared to the year ended December 31, 2011

During the years ended December 31, 2012 and 2011, we had an average of 46.8 and 47.8 vessels, respectively, in our fleet. In the year ended December 31, 2012, we accepted delivery of five secondhand vessels MSC Ulsan, Koroni, Kyparissia, Stadt Luebeck and Messini with an aggregate TEU capacity of 15,352 and we sold four vessels Gather, Gifted, Genius I and Horizon with an aggregate TEU capacity of 9,834. In the year ended December 31, 2011, we accepted delivery of ten secondhand vessels MSC Pylos, Zagora, Marina, Prosper, Konstantina, MSC Sierra II, MSC Namibia II, MSC Sudan II, MSC Romanos and MSC Methoni with an aggregate TEU capacity of 29,242 and we sold six second-hand vessels MSC Sierra, MSC Namibia, MSC Sudan, MSC Fado, MSC Tuscany and Garden, while the vessel Rena was determined to be a constructive total loss ("CTL") for insurance purposes in October 2011, with an aggregate TEU capacity of 13,836. In the years ended December 31, 2012 and 2011, our fleet ownership days totaled 17,113 and 17,437 days, respectively. Ownership days are the primary driver of voyage revenue and vessels operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.


 
                                                                            
                                    Year ended                              
                                   December 31,                             
                               --------------------                         
(Expressed in millions of U.S.                                  Percentage  
  dollars, except percentages)    2011       2012      Change     Change    
                               ---------  ---------                         
                                                                            
                                                                            
Voyage revenue                 $   382.2  $   386.2  $     4.0         1.0% 
Voyage expenses                     (4.2)      (5.5)       1.3        31.0% 
Voyage expenses - related                                                   
 parties                            (2.9)      (2.9)         -           -  
Vessels operating expenses        (110.4)    (112.5)       2.1         1.9% 
General and administrative                                                  
 expenses                           (5.0)      (4.0)      (1.0)      (20.0%)
Management fees - related                                                   
 parties                           (15.3)     (15.2)      (0.1)       (0.7%)
Amortization of dry-docking                                                 
 and special survey costs           (8.1)      (8.2)       0.1         1.2% 
Depreciation                       (78.8)     (80.3)       1.5         1.9% 
Gain/ (Loss) on sale/disposal                                               
 of vessels                         13.1       (2.8)     (15.9)     (121.4%)
Foreign exchange gains/                                                     
 (losses)                            0.1        0.1          -           -  
Interest income                      0.5        1.5        1.0       200.0% 
Interest and finance costs         (75.4)     (74.7)      (0.7)       (0.9%)
Other                                0.5       (0.1)      (0.6)     (120.0%)
Gain/ (Loss) on derivative                                                  
 instruments                        (8.7)      (0.5)      (8.2)      (94.3%)
                               ---------  ---------                         
Net Income                     $    87.6  $    81.1  $                      
                               =========  =========                         
                                                                            
                                                                            
                                     Year ended                             
                                     December 31,                           
                                 -------------------                        
 (Expressed in millions of U.S.                                 Percentage  
   dollars, except percentages)     2011      2012     Change     Change    
                                 --------- ---------                        
                                                                            
Voyage revenue                   $   382.2 $   386.2 $     4.0         1.0% 
Accrued charter revenue               30.3       6.2     (24.1)      (79.5%)
                                 --------- ---------                        
Voyage revenue adjusted on a                                                
 cash basis                      $   412.5 $   392.4 $                      
                                 ========= =========                        
                                                                            
                                        Year ended                          
                                       December 31,                         
                                    -----------------                       
                                                                Percentage  
Fleet operational data                2011     2012    Change     Change    
                                    -------- --------                       
                                                                            
Average number of vessels               47.8     46.8     (1.0)       (2.1%)
Ownership days                        17,437   17,113     (324)       (1.9%)
Number of vessels underwent dry-                                            
 dock and special survey during the                                         
 years                                     8        9        1           -  

Voyage Revenue

Voyage revenue increased by 1.0%, or $4.0 million, to $386.2 million during the year ended December 31, 2012, from $382.2 million during the year ended December 31, 2011. Ownership days decreased by 1.9% or 324 days to 17,113 days during the year ended December 31, 2012, from 17,437 days during the year ended December 31, 2011. The increase in Voyage revenue is mainly due to the fact that larger vessels, chartered on average at higher rates, were employed by the Company during the year ended December 31, 2012, compared to the year ended December 31, 2011. Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 4.9%, or $20.1 million, to $392.4 million during the year ended December 31, 2012, from $412.5 million during the year ended December 31, 2011. The decrease is attributable to decreased charter hire rece ived in accordance with certain escalation clauses of our charters during the year ended December 31, 2012, compared to the year ended December 31, 2011; partly offset by the fact that larger vessels, chartered on average at higher rates, were employed by the Company during the year ended December 31, 2012, compared to the year ended December 31, 2011.

Voyage Expenses

Voyage expenses increased by 31.0%, or $1.3 million, to $5.5 million during the year ended December 31, 2012, from $4.2 million during the year ended December 31, 2011. The increase was primarily attributable to the increased off-hire expenses of our fleet, mainly bunkers consumption; partly offset by the decreased third party commissions charged to us during the year ended December 31, 2012, compared to the year ended December 31, 2011.

Voyage Expenses - related parties

Voyage expenses - related parties in the amount of $2.9 million during the years ended December 31, 2012, and 2011, represent fees of 0.75% on voyage revenues charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 3, 2010.

Vessels' Operating Expenses

Vessels' operating expenses, which also include the realized gain or loss under derivative contracts entered into in relation to foreign currency exposure, increased by 1.9%, or $2.1 million, to $112.5 million during the year ended December 31, 2012, from $110.4 million during the year ended December 31, 2011. The increase is partly attributable to the increase of the average vessel size of the fleet during the year ended December 31, 2012, compared to the same period of 2011; partly offset by the decreased ownership days of our fleet during the year ended December 31, 2012, compared to the same period of 2011.

General and Administrative Expenses

General and administrative expenses decreased by 20.0%, or $1.0 million, to $4.0 million during the year ended December 31, 2012, from $5.0 million during the year ended December 31, 2011. The decrease in the year ended December 31, 2012, was mainly attributable to decreased public-company related expenses charged to us compared to the year ended December 31, 2011. Furthermore, General and administrative expenses for the years ended December 31, 2012 and December 31, 2011, include $1.0 million, respectively, for the services of the Company's officers in aggregate charged to us by Costamare Shipping Company S.A. as provided under our management agreement signed on November 3, 2010.

Management Fees - related parties

Management fees paid to our managers decreased by 0.7%, or $0.1 million, to $15.2 million during the year ended December 31, 2012, from $15.3 million during the year ended December 31, 2011. The decrease was primarily attributable to the decreased fleet ownership days for the year ended December 31, 2012, compared to the year ended December 31, 2011.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs for the years ended December 31, 2012 and 2011 was $8.2 million and $8.1 million, respectively. During the years ended December 31, 2012 and 2011, 9 vessels and 8 vessels, respectively, underwent their special surveys.

Depreciation

Depreciation expense increased by 1.9%, or $1.5 million, to $80.3 million during the year ended December 31, 2012, from $78.8 million during the year ended December 31, 2011. The increase was primarily attributable to the depreciation expense charged for the five larger and younger containerships delivered to us during the year ended December 31, 2012, partly offset by the depreciation expense not charged relating to the four smaller and older vessels sold during the year ended December 31, 2012.

Gain/ (Loss) on Sale/Disposal of Vessels

During the year ended December 31, 2012, we recorded a net loss of $2.8 million mainly from the sale of four vessels (including the effect of the partial reversal of a provision recorded in 2011 for costs associated with the grounding of the vessel Rena). During the year ended December 31, 2011, we recorded in aggregate, on a net basis, a gain of $13.1 million from the sale of six vessels and the "CTL" of the vessel Rena.

Foreign Exchange Gains

Foreign exchange gains amounted to $0.1 million and $0.1 during the years ended December 31, 2012 and 2011, respectively.

Interest Income

During the year ended December 31, 2012, interest income increased by 200.0%, or $1.0 million, to $1.5 million, from $0.5 million during the year ended December 31, 2011. The increase in interest income was mainly due to the increased cash deposits in interest bearing accounts during the year ended December 31, 2012, compared to the year ended December 31, 2011, which resulted from the increased average cash balance during the year ended December 31, 2012, compared to the year ended December 31, 2011.

Interest and Finance Costs

Interest and finance costs decreased by 0.9%, or $0.7 million, to $74.7 million during the year ended December 31, 2012, from $75.4 million during the year ended December 31, 2011. The decrease is partly attributable to the decreased financing costs and capitalized interest in relation with our newbuilding program; partly offset by the increased interest expense charged to us during the year ended December 31, 2012, compared to the year ended December 31, 2011.

Gain/ (Loss) on Derivative Instruments

The fair value of our 28 interest rate derivative instruments which were outstanding as of December 31, 2012, equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2012, the fair value of these 28 interest rate derivative instruments in aggregate amounted to a liability of $180.8 million. Twenty-seven of the 28 interest rate derivative instruments that were outstanding as at December 31, 2012, qualified for hedge accounting and the effective portion of the change in their fair value is recorded in "Comprehensive loss". For the year ended December 31, 2012, a loss of $8.5 million has been included in "Comprehensive loss" and a loss of $1.6 million has been included in "Gain (loss) on derivative instruments" in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the year ended December 31, 2012.

Cash Flows

Year ended December 31, 2012 and 2011


 
                                                                            
Condensed cash flows                                Year ended December 31, 
                                                   ------------------------ 
(Expressed in millions of U.S. dollars)                2011         2012    
                                                   -----------  ----------- 
Net Cash Provided by Operating Activities          $     195.2  $     168.1 
Net Cash Used in Investing Activities              $    (283.8) $   ( 236.5)
Net Cash Provided by Financing Activities          $      26.8  $     237.7 

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the year ended December 31, 2012 decreased by $27.1 million to $168.1 million, compared to $195.2 million for the year ended December 31, 2011. The decrease was primarily attributable to (a) the decreased cash from operations of $20.1 million deriving from escalating charter rates, (b) the increased dry-docking payments of $5.0 million and (c) increased payments for interest (including swap payments) of $3.5 million; partly offset by favorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $1.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities was $236.5 million in the year ended December 31, 2012, which consisted of (a) $191.2 million advance payments for the construction and purchase of ten newbuild vessels, (b) $74.1 million in payments for the acquisition of five secondhand vessels and (c) $28.7 million we received from the sale of four vessels including the advance payment we received from the sale of one vessel for scrap which was delivered to her scrap buyers in January 2013.

Net cash used in investing activities was $283.8 million in the year ended December 31, 2011.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $237.7 million in the year ended December 31, 2012, which mainly consisted of (a) $170.2 million of indebtedness that we repaid, (b) $288.6 million we drew down from six of our credit facilities, (c) $73.1 million we paid for dividends to our stockholders for the fourth quarter of the year ended December 31, 2011, first quarter of the year 2012, the second quarter of the yea r 2012 and the third quarter of the year 2012 and (d) $194.1 million net proceeds we received from our two follow-on offerings in March 2012 and October 2012, net of underwriting discounts and expenses incurred in the offerings.

Net cash provided by financing activities was $26.8 million in the year ended December 31, 2011, which mainly consists of (a) $124.6 million of indebtedness that we repaid, (b) $226.3 million we drew down from five of our credit facilities and (c) $61.5 million, in aggregate, we paid for dividends to our stockholders for the fourth quarter of the year 2010, the first quarter of the year 2011, the second quarter of the year 2011 and the third quarter of the year 2011.

Liquidity and Capital Expenditures

Cash and cash equivalents

As of December 31, 2012, we had a total cash liquidity of $314.6 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of January 23, 2013, the following vessels were free of debt.


 
                                                            
              Unencumbered Vessels in the water             
  (refer to fleet list on page 17 for full charter details) 
                                                            
                                          Year        TEU   
Vessel Name                               Built    Capacity 
-------------------------------------- ---------- ----------
NAVARINO                                  2010       8,531  
VENETIKO (ex. ACE IRELAND)                2003       5,928  
MSC KYOTO                                 1981       3,876  
AKRITAS                                   1987       3,152  
MSC CHALLENGER                            1986       2,633  
MESSINI                                   1997       2,458  

Capital commitments

As of January 23, 2012, we had outstanding commitments relating to our contracted newbuilds aggregating $629.5 million payable in installments until the vessels are delivered. In addition we had $17.8 million outstanding commitment relating to the acquisition of the secondhand vessel Venetiko (ex. Ace Ireland) payable upon delivery of the vessel.

Conference Call details:

On Thursday, January 24, 2013 at 8:30 a.m., EST, Costamare's management team will hold a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "Costamare."

A replay of the conference call will be available until January 31, 2013. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) (0) 1452 550 000 and the access code required for the replay is: 25306424#.

Live webcast:

There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com) under the "Investors" section. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Costamare Inc.

Costamare Inc. is one of the world's leading owners and providers of containerships for charter. The Company has 38 years of history in the international shipping industry and a fleet of 57 containerships, with a total capacity of approximately 331,000 TEU, including 10 newbuild containerships on order. Costamare Inc.'s common shares trade on the New York Stock Exchange under the symbol "CMRE."

Forward-Looking Statements

This earnings release contains "forward-looking statements". In some cases, you can identify these statements by forward-looking words such as "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "could" and "expect" and similar expressions. These statements are not historical facts but instead represent only Costamare's belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare's control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.'s Annual Report on Form 20-F (File No. 001-34934) under the caption "Risk Factors."

Fleet List

The tables below provide additional information, as of January 23, 2013, about our fleet of 57 containerships, including 10 newbuilds on order. Each vessel is a cellular containership, meaning it is a dedicated container vessel.


 
                                                                            
----------------------------------------------------------------------------
                                                                     Average
                                                                      Daily 
                                                                     Charter
                                                 Current              Rate  
                                          Time    Daily               Until 
                          Year Capacity Charter  Charter Expiration Earliest
   Vessel Name Charterer  Built  (TEU)    Term    Hire   of Charter  Expiry 
                                          (1)     (U.S.      (1)       of   
                                                dollars)             Charter
                                                                      (U.S. 
                                                                    dollars)
                                                                       (2)  
----------------------------------------------------------------------------
1  COSCO       COSCO      2006   9,469     12    36,400   December   36,400 
   GUANGZHOU                             years              2017            
----------------------------------------------------------------------------
2  COSCO       COSCO      2006   9,469     12    36,400    January   36,400 
   NINGBO                                years              2018            
----------------------------------------------------------------------------
3  COSCO       COSCO      2006   9,469     12    36,400   February   36,400 
   YANTIAN                               years              2018            
----------------------------------------------------------------------------
4  COSCO       COSCO      2006   9,469     12    36,400  April 2018  36,400 
   BEIJING                               years                              
----------------------------------------------------------------------------
5  COSCO       COSCO      2006   9,469     12    37,519   May 2018   37,519 
   HELLAS                                years                              
----------------------------------------------------------------------------
6  NAVARINO    Evergreen  2010   8,531    1.5    30,950   September  30,950 
                                         years              2013            
----------------------------------------------------------------------------
7  MAERSK      A.P.       1997   7,403     10    37,000   December   37,000 
   KAWASAKI    Moller-                   years              2017            
   (i)         Maersk                                                       
----------------------------------------------------------------------------
8  MAERSK KURE A.P.       1996   7,403     10    37,000   December   37,000 
   (i)         Moller-                   years              2017            
               Maersk                                                       
----------------------------------------------------------------------------
9  MAERSK      A.P.       1997   7,403     10    37,000   February   37,000 
   KOKURA (i)  Moller-                   years              2018            
               Maersk                                                       
----------------------------------------------------------------------------
10 MSC METHONI MSC        2003   6,724     10    29,000   September  29,000 
                                         years              2021            
----------------------------------------------------------------------------
11 SEALAND NEW A.P.       2000   6,648     11    30,375  March 2018  27,174 
   YORK        Moller-                   years     (3)                      
               Maersk                                                       
----------------------------------------------------------------------------
12 MAERSK KOBE A.P.       2000   6,648     11    38,179   May 2018   29,383 
               Moller-                   years     (4)                      
               Maersk                                                       
----------------------------------------------------------------------------
13 SEALAND     A.P.       2000   6,648     11    30,375   June 2018  27,349 
   WASHINGTON  Moller-                   years     (5)                      
               Maersk                                                       
----------------------------------------------------------------------------
14 SEALAND     A.P.       2000   6,648     11    25,375    August    25,874 
   MICHIGAN    Moller-                   years     (6)      2018            
               Maersk                                                       
----------------------------------------------------------------------------
15 SEALAND     A.P.       2000   6,648     11    30,375    October   27,497 
   ILLINOIS    Moller-                   years     (7)      2018            
               Maersk                                                       
----------------------------------------------------------------------------
16 MAERSK      A.P.       2003   6,644     11    38,865   November   31,671 
   KOLKATA     Moller-                   years     (8)      2019            
               Maersk                                                       
----------------------------------------------------------------------------
17 MAERSK      A.P.       2003   6,644     11    38,461   February   31,780 
   KINGSTON    Moller-                   years     (9)      2020            
               Maersk                                                       
----------------------------------------------------------------------------
18 MAERSK      A.P.       2003   6,644     11    38,418  April 2020  31,870 
   KALAMATA    Moller-                   years    (10)                      
               Maersk                                                       
----------------------------------------------------------------------------
19 VENETIKO    PIL        2003   5,928    1.0    14,500  March 2014  14,500 
   (ex. ACE                               year                              
   IRELAND)                                                                 
   (ii)                                                                     
----------------------------------------------------------------------------
20 MSC ROMANOS MSC        2003   5,050    5.3    28,000   November   28,000 
                                         years              2016            
----------------------------------------------------------------------------
21 ZIM NEW     ZIM        2002   4,992     13    23,150     July     23,150 
   YORK                                  years            2015(11)          
----------------------------------------------------------------------------
22 ZIM         ZIM        2002   4,992     13    23,150    August    23,150 
   SHANGHAI                              years            2015(11)          
----------------------------------------------------------------------------
23 ZIM PIRAEUS ZIM        2004   4,992     10    22,150  March 2014  34,315 
   (iii)                                 years    (12)                      
----------------------------------------------------------------------------
24 OAKLAND     Hapag      2000   4,890  8 years  30,500   September  30,500 
   EXPRESS     Lloyd                                        2016            
----------------------------------------------------------------------------
25 HALIFAX     Hapag      2000   4,890  8 years  30,500    October   30,500 
   EXPRESS     Lloyd                                        2016            
----------------------------------------------------------------------------
26 SINGAPORE   Hapag      2000   4,890  8 years  30,500   July 2016  30,500 
   EXPRESS     Lloyd                                                        
----------------------------------------------------------------------------
27 MSC         MSC        1988   4,828    7.8    20,000    August    20,000 
   MANDRAKI                              years              2017            
----------------------------------------------------------------------------
28 MSC MYKONOS MSC        1988   4,828    8.2    20,000   September  20,000 
                                         years              2017            
----------------------------------------------------------------------------
29 MSC ULSAN   MSC        2002   4,132    5.3    16,500  March 2017  16,500 
                                         years                              
----------------------------------------------------------------------------
30 MSC ANTWERP MSC        1993   3,883    4.3    17,500    August    17,500 
                                         years              2013            
----------------------------------------------------------------------------
31 MSC KYOTO   MSC        1981   3,876    3.1    17,250   June 2013  17,250 
                                         years                              
----------------------------------------------------------------------------
32 KORONI      Evergreen  1998   3,842  2 years  10,500  April 2014  11,225 
                                                  (13)                      
----------------------------------------------------------------------------
33 KYPARISSIA  Evergreen  1998   3,842  2 years  10,500   May 2014   11,268 
                                                  (14)                      
----------------------------------------------------------------------------
34 MSC AUSTRIA MSC        1984   3,584    9.5    13,500   September  13,500 
                                         years    (15)      2018            
----------------------------------------------------------------------------
35 KARMEN      Sea        1991   3,351    1.5     7,000    January    7,000 
               Consortium                years              2013            
----------------------------------------------------------------------------
36 MARINA      Evergreen  1992   3,351    1.1     8,000  April 2013   8,000 
                                         years                              
----------------------------------------------------------------------------
37 KONSTANTINA Evergreen  1992   3,351    1.0     7,550   September   7,550 
                                          year              2013            
----------------------------------------------------------------------------
38 AKRITAS     Hapag      1987   3,152  4 years  12,500    August    12,500 
               Lloyd                                        2014            
----------------------------------------------------------------------------
39 MSC         MSC        1986   2,633    4.8    10,000   July 2015  10,000 
   CHALLENGER                            years                              
----------------------------------------------------------------------------
40 MESSINI     Evergreen  1997   2,458    1.5     8,100   February    8,100 
                                         years              2014            
--------------------------------------------------------------
--------------
41 MSC REUNION MSC        1992   2,024  6 years  11,500   June 2014  11,500 
   (iv)                                                                     
----------------------------------------------------------------------------
42 MSC NAMIBIA MSC        1991   2,023    6.8    11,500   July 2014  11,500 
   II (iv)                               years                              
----------------------------------------------------------------------------
43 MSC SIERRA  MSC        1991   2,023    5.7    11,500   June 2014  11,500 
   II (iv)                               years                              
----------------------------------------------------------------------------
44 MSC PYLOS   MSC        1991   2,020  3 years  11,500    January   11,500 
   (iv)                                                     2014            
----------------------------------------------------------------------------
45 PROSPER                1996   1,504                                      
----------------------------------------------------------------------------
46 ZAGORA (iv) MSC        1995   1,162    1.7     5,500  April 2013   5,500 
                                         years                              
----------------------------------------------------------------------------
47 STADT       CMA CGM    2001   1.078    0.7     6,200  April 2013   6,200 
   LUEBECK (v)                           years                              
----------------------------------------------------------------------------

Newbuilds


 
                                                                            
----------------------------------------------------------------------------
Vessel Name       Shipyard                Charterer    Expected    Capacity 
                                                       Delivery    (TEU)(16)
                                                      (based on             
                                                        latest              
                                                       shipyard             
                                                      schedule)             
----------------------------------------------------------------------------
1    Hull S4010   Sungdong Shipbuilding   MSC         March 2013     8,770  
----------------------------------------------------------------------------
2    Hull S4011   Sungdong Shipbuilding   MSC         March 2013     8,770  
----------------------------------------------------------------------------
3    Hull S4020   Sungdong Shipbuilding   Evergreen    May 2013      8,770  
----------------------------------------------------------------------------
4    Hull S4021   Sungdong Shipbuilding   Evergreen    May 2013      8,770  
----------------------------------------------------------------------------
5    Hull S4022   Sungdong Shipbuilding   Evergreen   July 2013      8,770  
----------------------------------------------------------------------------
6    Hull S4023   Sungdong Shipbuilding   Evergreen   July 2013      8,770  
----------------------------------------------------------------------------
7    Hull S4024   Sungdong Shipbuilding   Evergreen  August 2013     8,770  
----------------------------------------------------------------------------
8    H1068A       Jiangnan Changxing      MSC       November 2013    9,400  
----------------------------------------------------------------------------
9    H1069A       Jiangnan Changxing      MSC       December 2013    9,400  
----------------------------------------------------------------------------
10   H1070A       Jiangnan Changxing      MSC       February 2014    9,400  
----------------------------------------------------------------------------

(1) Charter terms and expiration dates are based on the earliest date charters could expire. (2) This average rate is calculated based on contracted charter rates for the days remaining between January 23, 2013 and the earliest expiration of each charter. Certain of our charter rates change until their earliest expiration dates, as indicated in the footnotes below. (3) This charter rate changes on May 8, 2014 to $26,100 per day until the earliest redelivery date.

(4) This charter rate changes on June 30, 2014 to $26,100 per day until the earliest redelivery date. (5) This charter rate changes on August 24, 2014 to $26,100 per day until the earliest redelivery date. (6) This charter rate changes on October 20, 2014 to $26,100 per day until the earliest redelivery date. (7) This charter rate changes on December 4, 2014 to $26,100 per day until the earliest redelivery date. (8) This charter rate changes on January 13, 2016 to $26,100 per day until the earliest redelivery date. (9) This charter rate changes on April 28, 2016 to $26,100 per day until the earliest redelivery date. (10) This charter rate changes on June 11, 2016 to $26,100 per day until the earliest redelivery date.

(11) Charterers shall have the option to terminate the charter by giving six months' notice, in which case they will have to make a one-time payment which shall be the $6.9 million reduced proportionately by the amount of time by which the original 3-year extension period is shortened. (12) The charterer is required to pay approximately $5.0 million no later than July 2016, representing accrued charter hire, the payment of which was deferred. (13) The charter rate will change to $11,500 per day, starting from May 2013 until the earliest redelivery date. (14) The charter rate will change to $11,500 per day, starting from June 2013 until the earliest redelivery date. (15) As from December 1, 2012 until redelivery, the charter rate is to be a minimum of $13,500 per day plus 50% of the difference between the market rate and the charter rate of $13,500. The market rate is to be determined annually based on the Hamburg ConTex type 3500 TEU index published on October 1 of each year until redelivery. (16) Based on finalized vessel specifications.

(i) The charterer has a unilateral option to extend the charter of the vessel for two periods of 30 months each +/-90 days on the final period performed, at a rate of $41,700 per day. (ii) The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months at a rate of $28,000 per day. (iii) The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months +/-60 days at a rate of $27,500 per day.

(iv) Owners have a unilateral option to extend the charters of the vessels for an additional period of two years at market rate, to be defined annually, based on the closest category on the Contex index.

(v) The charterer has a unilateral option to extend the charter for an additional six months after the initial period at a daily rate of $8,500.


 
                                                                            
                               COSTAMARE INC.                               
                     Consolidated Statements of Income                      
                                                                            
                                                      Three months ended    
                          Year ended December 31,        December 31,       
                         ------------------------  ------------------------ 
(Expressed in thousands                                                     
 of U.S. dollars, except                                                    
 share and per share                                                        
 amounts)                    2011         2012         2011         2012    
                         -----------  -----------  -----------  ----------- 
                                                 
                           
                                                                            
REVENUES:                                                                   
Voyage revenue           $   382,155  $   386,155  $   101,990  $    95,193 
                                                                            
EXPENSES:                                                                   
Voyage expenses               (4,218)      (5,533)        (898)      (1,543)
Voyage expenses -                                                           
 related parties              (2,877)      (2,873)        (767)        (712)
Vessels' operating                                                          
 expenses                   (110,359)    (112,462)     (27,047)     (27,762)
General and                                                                 
 administrative expenses      (4,958)      (4,045)      (1,391)        (959)
Management fees -                                                           
 related parties             (15,349)     (15,171)      (4,074)      (3,753)
Amortization of dry-                                                        
 docking and special                                                        
 survey costs                 (8,139)      (8,179)      (2,000)      (2,162)
Depreciation                 (78,803)     (80,333)     (20,711)     (20,151)
Gain/ (Loss) on sale of                                                     
 vessels                      13,077       (2,796)       2,306        1,500 
Foreign exchange gains                                                      
 (losses)                        133          110          137          (57)
                         -----------  -----------  -----------  ----------- 
Operating income         $   170,662  $   154,873  $    47,545  $    39,594 
                         -----------  -----------  -----------  ----------- 
                                                                            
OTHER INCOME (EXPENSES):                                                    
Interest income          $       477  $     1,495  $       123  $       322 
Interest and finance                                                        
 costs                       (75,441)     (74,734)     (19,488)     (16,894)
Other                            603          (43)          31           50 
Gain/ (Loss) on                                                             
 derivative instruments       (8,709)        (462)      (2,129)        (141)
                         -----------  -----------  -----------  ----------- 
Total other income                                                          
 (expenses)              $   (83,070) $   (73,744) $   (21,463) $   (16,663)
                         -----------  -----------  -----------  ----------- 
Net Income               $    87,592  $    81,129  $    26,082  $    22,931 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
Earnings per common                                                         
 share, basic and                                                           
 diluted                 $      1.45  $      1.20  $      0.43  $      0.31 
                         ===========  ===========  ===========  =========== 
Weighted average number                                                     
 of shares, basic and                                                       
 diluted                  60,300,000   67,612,842   60,300,000   73,658,696 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                               COSTAMARE INC.                               
                        Consolidated Balance Sheets                         
                                                                            
                                                   As of          As of     
                                                December 31,   December 31, 
                                               -------------  ------------- 
   (Expressed in thousands of U.S. dollars)         2011           2012     
                                               -------------  ------------- 
                                                 (Audited)                  
ASSETS                                                                      
CURRENT ASSETS:                                                             
Cash and cash equivalents                      $      97,996  $     267,321 
Restricted cash                                        7,371          5,330 
Receivables                                            2,150          2,237 
Inventories                                            9,335          9,398 
Due from related parties                               3,585          2,616 
Fair value of derivatives                                  -            165 
Insurance claims receivable                            3,076          1,454 
Accrued charter revenue                               13,428          5,100 
Prepayments and other                                  1,910          1,862 
Vessels held for sale                                      -          4,441 
                                               -------------  ------------- 
Total current assets                           $     138,851  $     299,924 
                                               -------------  ------------- 
FIXED ASSETS, NET:                                                          
Advances for vessels acquisitions              $     148,373  $     339,552 
Vessels, net                                       1,618,887      1,582,345 
                                               -------------  ------------- 
Total fixed assets, net                        $   1,767,260  $   1,921,897 
                                               -------------  ------------- 
NON-CURRENT ASSETS:                                                         
Deferred charges, net                          $      32,641  $      34,099 
Restricted cash                                       38,707         41,992 
Accrued charter revenue                                5,086         13,422 
                                               -------------  ------------- 
Total assets                                   $   1,982,545  $   2,311,334 
                                               =============  ============= 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
CURRENT LIABILITIES:                                                        
Current portion of long-term debt              $     153,176  $     162,169 
Accounts payable                                       4,057          5,882 
Accrued liabilities                                   13,455          9,292 
Unearned revenue                                       6,901          5,595 
Fair value of derivatives                             46,481         55,701 
Other current liabilities                              2,519         10,772 
                                               -------------  ------------- 
Total current liabilities                      $     226,589  $     249,411 
                                               -------------  ------------- 
NON-CURRENT LIABILITIES                                                     
Long-term debt, net of current portion         $   1,290,244  $   1,399,720 
Fair value of derivatives, net of current                                   
 portion                                             125,194        125,110 
Unearned revenue, net of current portion              10,532         16,641 
                                               ----
---------  ------------- 
Total non-current liabilities                  $   1,425,970  $   1,541,471 
                                               -------------  ------------- 
COMMITMENTS AND CONTINGENCIES                                               
STOCKHOLDERS' EQUITY:                                                       
Common stock                                   $           6  $           8 
Additional paid-in capital                           519,971        714,100 
Accumulated deficit                                  (48,854)       (40,814)
Accumulated other comprehensive loss                (141,137)      (152,842)
                                               -------------  ------------- 
Total stockholders' equity                     $     329,986  $     520,452 
                                               -------------  ------------- 
Total liabilities and stockholders' equity     $   1,982,545  $   2,311,334 
                                               =============  ============= 

Contacts:

Company Contact: Gregory Zikos Chief Financial Officer Konstantinos Tsakalidis Business Development Costamare Inc., Athens, Greece Tel: (+30) 210-949-0000 Email: ir@costamare.com

Investor Relations Advisor/ Media Contact: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (+1) 212-661-7566 E-mail: costamare@capitallink.com

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