Costamare Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2023

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MONACO, Feb. 07, 2024 (GLOBE NEWSWIRE) — Costamare Inc. (“Costamare” or the “Company”) (NYSE:CMRE) today reported unaudited financial results for the fourth quarter (“Q4 2023”) and year ended December 31, 2023.

I. PROFITABILITY AND LIQUIDITY

FY 2023 Net Income available to common stockholders of $354.7 million ($2.95 per share).

FY 2023 Adjusted Net Income available to common stockholders1 of $249.0 million ($2.07 per share).
Q4 2023 Net Income available to common stockholders of $96.6 million ($0.82 per share).
Q4 2023 Adjusted Net Income available to common stockholders1 of $80.0 million ($0.68 per share).
2023 Year-end liquidity2 of $989.0 million.

II. DRY BULK OPERATING PLATFORM

Costamare Bulkers Inc. (“CBI”) has currently fixed a fleet of 51 dry bulk vessels on period charters, consisting of:

32 Newcastlemax/ Capesize vessels.
19 Kamsarmax vessels.

Majority of the fixed fleet is on index linked charter-in agreements, consisting of:

26 charters for Newcastlemax/ Capesize vessels that are index linked.
9 charters for Kamsarmax vessels that are index linked.

Average remaining tenor for the Newcastlemax/ Capesize and Kamsarmax chartered-in fleet of 13 and 6 months, respectively.

III. LEASE FINANCING PLATFORM

Controlling interest in Neptune Maritime Leasing Limited (“NML”).

Company’s current investment in NML of $123.2 million.
Growing leasing platform, having funded 23 shipping assets as of the date of this press release, for a total amount of approximately $250 million, on the back of what we believe is a healthy pipeline.

______________________
1 Adjusted Net Income available to common stockholders and respective per share figures are non-GAAP measures and should not be used in isolation or as substitutes for Costamare’s financial results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). For the definition and reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.
2 Including our share of cash amounting to $0.4 million held by vessel owning-companies set-up pursuant to the Framework Deed dated May 15, 2013, as amended and restated from time to time (the “Framework Deed”), between the Company and York Capital Management Global Advisors LLC and an affiliated fund (collectively, “York Capital”), margin deposits relating to our forward freight agreements (“FFAs”) and bunker swaps of $13.7 million, short term investments in U.S. Treasury Bills amounting to $17.5 million and $132.2 million of available undrawn funds from two hunting license facilities as of December 31, 2023.

IV. SALE AND PURCHASE ACTIVITY

Vessel Disposals

Conclusion of the sale of the following dry bulk vessels:

 

m/v Peace built in 2006 with a 55,709 DWT capacity.

 

m/v Pride built in 2006 with a 55,705 DWT capacity.

 

m/v Manzanillo built in 2010 with a 34,426 DWT capacity.

 

m/v Progress built in 2011 with a 32,400 DWT capacity.

 

m/v Cetus built in 2010 with a 32,527 DWT capacity.

 
Net sale proceeds after debt prepayment amounted to $32.9 million.

 
 

Agreement for the sale of the following dry bulk vessels:

 

m/v Merida built in 2012 with a 56,670 DWT capacity (expected conclusion of sale within Q1 2024).

 

m/v Konstantinos built in 2012 with a 32,178 DWT capacity (expected conclusion of sale within Q1 2024).

 

m/v Adventure built in 2011 with a 33,755 DWT capacity (expected conclusion of sale within Q1 2024)3.

 

m/v Alliance built in 2012 with a 33,751 DWT capacity (expected conclusion of sale by Q2 2024)3.

 
Estimated net sale proceeds from the vessels agreed to be sold after debt prepayment of $25.8 million.

Vessel/ Equity Interest Acquisitions

Conclusion of the acquisition of the 51% equity interest in the company owning the 2001-built, 1,550 TEU capacity containership, Arkadia in December 2023. Prior to the conclusion of this acquisition, the Company already owned 49% equity interest with the remaining 51% owned by York Capital.
Agreement for the acquisition of the 2011-built, 180,643 DWT capacity dry bulk vessel, Iron Miracle (tbr. Miracle) (expected conclusion within Q1 2024).

V. NEW DEBT FINANCING

Conclusion of a new financing in the form of a hunting license facility with a European financial institution for the financing of the acquisition of containerships and dry bulk vessels. More specifically:
  – Committed amount of up to $60 million.
  – Drawdown availability until Q2 2025.
  – Loan tenor of six years following each respective drawdown.

No meaningful debt maturities until 2026.

______________________
3 Subject to final documentation.

VI. OWNED FLEET CHARTER UPDATE4 – FULLY EMPLOYED CONTAINERSHIP FLEET FOR 2024

95% and 78% of the containership fleet5 fixed for 2024 and 2025, respectively.
Contracted revenues for the containership fleet of approximately $2.5 billion with a TEU-weighted duration of 3.6 years6.
Entered into more than 40 chartering agreements for the owned dry bulk fleet since Q3 2023 earnings release.

VII. DIVIDEND ANNOUNCEMENTS – SHARE REPURCHASE PROGRAM

On January 2, 2024, the Company declared a dividend of $0.115 per share on the common stock, which was paid on February 7, 2024, to holders of record of common stock as of January 22, 2024.
On January 2, 2024, the Company declared a dividend of $0.476563 per share on the Series B Preferred Stock, $0.531250 per share on the Series C Preferred Stock, $0.546875 per share on the Series D Preferred Stock and $0.554688 per share on the Series E Preferred Stock, which were all paid on January 16, 2024 to holders of record as of January 12, 2024.
Available funds remaining under the share repurchase program of $30 million for common shares and $150 million for preferred shares.

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

“2023 has been a growth year for Costamare. The Company had revenues of $1.5 billion and generated Net Income of about $350 million. Liquidity stood at around $1 billion as of year-end.

Following our strategic decision in 2021 to enter into the dry bulk sector at an opportune time in the cycle, we grew during 2023 our newly established trading platform to an operator managing a fleet of 51 dry bulk vessels. Having invested $200 million in the new venture, we have a long-term commitment to the sector whose fundamentals we view positively.

Regarding Neptune Maritime Leasing, the platform has been steadily growing on a prudent basis throughout 2023, having now concluded leasing transactions for 23 ships with a total value of about $250 million. We are committed to growing further the leasing business on the back of a healthy pipeline extending over the coming quarters.

On the owned dry bulk fleet side, we are executing our strategy to renew the dry bulk fleet and increase its average size. During the year we took the decision to dispose of 12 smaller sized vessels and agreed to acquire three capesize and one ultramax vessel. Subject to market conditions, our goal is to continue our expansion in the dry market.

On the containership market, recent events have been contributing positively to the supply and demand dynamics, pushing up box and charter rates. These recent developments are mitigating the effects of oversupply in the containership market, as tonnage is expected to remain tight at least until the Chinese New Year. We have proactively secured employment for 95% and 78% of our open days for 2024 and 2025 respectively, putting our contracted revenues for container vessels at $2.5 billion with a remaining time charter duration of 3.6 years.”

______________________
4 Please refer to the Containership Fleet List table for additional information on vessel employment details for our containership fleet.
5 Calculated on a TEU basis.
6 As of February 6, 2024.

Financial Summary

 
 
 
 
 
 
 
 
 
 

 
 
Year ended December 31,
 
Three-month period
ended December 31,

(Expressed in thousands of U.S. dollars, except share and per share data)
 
 2022 
 
 
 2023 
 
 2022 
 
 
2023
 

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 

Voyage revenue
 
$
1,113,859
 
 
 
$
1,502,491
 
 
$
265,431
 
 
$
490,523
 

Accrued charter revenue (1)
 
$
(2,631
)
 
 
$
3,293
 
 
$
(3,413
)
 
$
(1,222
)

Amortization of time-charter assumed
 
$
198
 
 
 
$
(197
)
 
$
50
 
 
$
(56
)

Voyage revenue adjusted on a cash basis (2)
 
$
1,111,426
 
 
 
$
1,505,587
 
 
$
262,068
 
 
$
489,245
 

Income from investments in leaseback vessels
 
 

 
 
 
$
8,915
 
 
 

 
 
$
4,324
 

 
 
 
 
 
 
 
 
 
 

Adjusted Net Income available to common stockholders (3)
 
$
405,274
 
 
 
$
249,006
 
 
$
74,837
 
 
$
79,981
 

Weighted Average number of shares
 
 
122,964,358
 
 
 
 
120,299,172
 
 
 
121,983,112
 
 
 
118,042,187
 

Adjusted Earnings per share (3)
 
$
3.30
 
 
 
$
2.07
 
 
$
0.61
 
 
$
0.68
 

 
 
 
 
 
 
 
 
 
 

Net Income
 
$
554,692
 
 
 
$
381,019
 
 
$
194,176
 
 
$
104,675
 

Net Income available to common stockholders
 
$
523,887
 
 
 
$
354,681
 
 
$
186,672
 
 
$
96,586
 

Weighted Average number of shares
 
 
122,964,358
 
 
 
 
120,299,172
 
 
 
121,983,112
 
 
 
118,042,187
 

Earnings per share
 
$
4.26
 
 
 
$
2.95
 
 
$
1.53
 
 
$
0.82
 

(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period and during the last years of such charter cash received will exceed revenue recognized on a straight-line basis. The reverse is true for charters with descending rates.
(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. 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 of our fleet are described in the notes to the “Fleet List” tables below.
(3) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are non-GAAP measures. Refer to the reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per Share.

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three-month and the years ended December 31, 2023 and 2022. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.

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

 
 
Year-ended
December 31,
 
Three-month period ended
December 31,

(Expressed in thousands of U.S. dollars, except share and per share data)
 
2022

 
2023
 
2022
 
2023

 
 
 
 
 
 
 
 
 
 
 
 

Net Income
$
554,692
 
$
381,019
 
$
194,176
 
$
104,675
 

Earnings allocated to Preferred Stock
 
(31,068
)
 
(31,068
)
 
(7,767
)
 
(7,767
)

Non-Controlling Interest
 
263
 
 
4,730
 
 
263
 
 
(322
)

Net Income available to common stockholders
 
523,887
 
 
354,681
 
 
186,672
 
 
96,586
 

Accrued charter revenue
 
(2,631
)
 
3,293
 
 
(3,413
)
 
(1,222
)

General and administrative expenses – non-cash component
 
7,089
 
 
5,850
 
 
1,388
 
 
1,556
 

Amortization of time-charter assumed
 
198
 
 
(197
)
 
50
 
 
(56
)

Realized (gain) / loss on Euro/USD forward contracts (1)
 
2,323
 
 
(729
)
 
517
 
 
(193
)

Vessels’ impairment loss
 
1,691
 
 
434
 
 
1,691
 
 
205
 

(Gain) / loss on sale of vessels, net
 
(126,336
)
 
(112,220
)
 
(105,086
)
 
971
 

Loss on vessels held for sale
 

 
 
2,305
 
 

 
 
2,305
 

Loss on sale of vessels, net, by jointly owned companies with York Capital included in equity gain on investments (1)
 

 
 
493
 
 

 
 

 

Non-recurring, non-cash write-off of loan deferred financing costs
 
3,309
 
 
1,484
 
 
914
 
 
45
 

Gain on derivative instruments, excluding realized (gain)/loss on derivative instruments (1)
 
(2,698
)
 
(4,801
)
 
(5,332
)
 
(18,629
)

Non-recurring payments for loan cancellation fees
 
1,032
 
 

 
 
26
 
 

 

Other non-cash items
 
(2,590
)
 
(1,587
)
 
(2,590
)
 
(1,587
)

Adjusted Net Income available to common stockholders
$
405,274
 
$
249,006
 
$
74,837
 
$
79,981
 

Adjusted Earnings per Share
$
3.30
 
$
2.07
 
$
0.61
 
$
0.68
 

Weighted average number of shares
 
122,964,358
 
 
120,299,172
 
 
121,983,112
 
 
118,042,187
 

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock and Non-Controlling Interest, but before non-cash “Accrued charter revenue” recorded under charters with escalating or descending charter rates, amortization of time-charter assumed, loss on vessels held for sale, realized (gain) / loss on Euro/USD forward contracts, vessels’ impairment loss, (gain) / loss on sale of vessels, net, loss on sale of vessels, net, by jointly owned companies with York Capital included in equity gain on investments, non-recurring, non-cash write-off of loan deferred financing costs, general and administrative expenses – non-cash component, gain on derivative instruments, excluding realized (gain)/loss on derivative instruments, non-recurring payments for loan cancellation fees and other non-cash items. “Accrued charter revenue” is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are not recognized measurements under U.S. GAAP. We believe that the presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net Income available to common stockholders and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

(1) Items to consider for comparability include gains and charges. Gains positively impacting Net Income available to common stockholders are reflected as deductions to Adjusted Net Income available to common stockholders. Charges negatively impacting Net Income available to common stockholders are reflected as increases to Adjusted Net Income available to common stockholders.

 

Results of Operations

Three-month period ended December 31, 2023 compared to the three-month period ended December 31, 2022

During the three-month periods ended December 31, 2023 and 2022, we had an average of 111.6 and 114.7 vessels, respectively, in our owned fleet. In addition, during the three-month period ended December 31, 2023, through our dry bulk operating platform Costamare Bulkers Inc. (“CBI”), we chartered-in an average of 63.3 third-party dry bulk vessels. As of February 6, 2024, CBI has chartered-in 51 dry bulk vessels on period charters.

During the three-month period ended December 31, 2023, we sold the dry bulk vessels Peace, Pride and Cetus with an aggregate DWT of 143,941 and the container vessel Oakland with a TEU capacity of 4,890.

Furthermore, during the three-month period ended December 31, 2023, we acquired the 51% equity interest of York Capital of the 2001-built, 1,550 TEU capacity containership Arkadia and as a result we obtained 100% of the equity interest in the vessel.

Up to December 31, 2023, we have invested in Neptune Maritime Leasing Limited (“NML”) the amount of $119.6 million. During the three-month period ended December 31, 2023, NML is included in our consolidated financial statements.

In the three-month periods ended December 31, 2023 and 2022, our fleet ownership days totaled 10,267 and 10,552 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

Consolidated Financial Results and Vessels’ Operational Data(1)

 (Expressed in millions of U.S. dollars,
except percentages)

 
Three-month period ended December 31,
 
Change

 
Percentage
Change

 
2022
 
2023
 
 

 
 
 

 
 
 
 
 
 
 
 
 

Voyage revenue
$
265.4
 
$
490.5
 
$
225.1
 
 
84.8
%

Income from investments in leaseback vessels
 

 
 
4.3
 
 
4.3
 
 
n.m.

Voyage expenses
 
(15.1
)
 
(90.0
)
 
74.9
 
 
n.m.

Charter-in hire expenses
 

 
 
(166.3
)
 
166.3
 
 
n.m.

Voyage expenses – related parties
 
(3.7
)
 
(3.7
)
 

 
 
n.m.

Vessels’ operating expenses
 
(70.9
)
 
(64.0
)
 
(6.9
)
 
(9.7
%)

General and administrative expenses
 
(3.1
)
 
(3.9
)
 
0.8
 
 
25.8
%

Management and agency fees – related parties
 
(13.9
)
 
(12.3
)
 
(1.6
)
 
(11.5
%)

General and administrative expenses – non-cash component
 
(1.4
)
 
(1.5
)
 
0.1
 
 
7.1
%

Amortization of dry-docking and special survey costs
 
(4.0
)
 
(5.3
)
 
1.3
 
 
32.5
%

Depreciation
 
(41.7
)
 
(41.8
)
 
0.1
 
 
0.2
%

Gain / (loss) on sale of vessels, net
 
105.1
 
 
(1.0
)
 
(106.1
)
 
n.m.

Loss on vessels held for sale
 

 
 
(2.3
)
 
2.3
 
 
n.m.

Vessels’ impairment loss
 
(1.7
)
 
(0.2
)
 
(1.5
)
 
(88.2
%)

Foreign exchange gains
 
2.7
 
 
3.9
 
 
1.2
 
 
44.4
%

Interest income
 
4.9
 
 
6.9
 
 
2.0
 
 
40.8
%

Interest and finance costs
 
(35.8
)
 
(34.4
)
 
(1.4
)
 
(3.9
%)

Income from equity method investments
 
0.7
 
 
0.1
 
 
(0.6
)
 
(85.7
%)

Other
 
1.4
 
 
1.2
 
 
(0.2
)
 
(14.3
%)

Gain on derivative instruments, net
 
5.3
 
 
24.5
 
 
19.2
 
 
n.m.

Net Income
$
194.2
 
$
104.7
 
 
 
 

 
 
 
 
 
 
 
 
 

(Expressed in millions of U.S. dollars,
except percentages)

 
Three-month period ended December 31,
 
Change

 
Percentage
Change

 
2022
 
 
2023
 
 
 

 
 
 
 
 
 
 
 
 

Voyage revenue
$
265.4
 
$
490.5
 
$
225.1
 
 
84.8
%

Accrued charter revenue
 
(3.4
)
 
(1.2
)
 
2.2
 
 
64.7
%

Amortization of time-charter assumed
 
0.1
 
 
(0.1
)
 
(0.2
)
 
n.m.

Voyage revenue adjusted on a cash basis (1)
$
262.1
 
$
489.2
 
$
227.1
 
 
86.6
%

 
 
 
 
 
 
 
 
 

Vessels’ operational data

 
Three-month period ended December 31,
 
 
 
Percentage
Change

 
2022
 
2023
 
Change
 

 
 
 
 
 
 
 
 
 

Average number of vessels
 
114.7
 
111.6
 
 
(3.1
)
 
(2.7
%)

Ownership days
 
10,552
 
10,267
 
 
(285
)
 
(2.7
%)

Number of vessels under dry-docking and special survey
 
7
 
7
 
 

 
 
 

(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Consolidated Financial Results and Vessels’ Operational Data” above for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue increased by 84.8%, or $225.1 million, to $490.5 million during the three-month period ended December 31, 2023, from $265.4 million during the three-month period ended December 31, 2022. The increase is mainly attributable to (i) revenue earned by CBI, which has been fully operational since the first quarter of 2023 and (ii) increased charter rates in certain of our container vessels; partly off-set by decreased charter rates in certain of our dry bulk vessels and by revenue not earned by six container vessels and six dry bulk vessels that were sold during the fourth quarter of 2022 and the year ended December 31, 2023.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”) increased by 86.6%, or $227.1 million, to $489.2 million during the three-month period ended December 31, 2023, from $262.1 million during the three-month period ended December 31, 2022. Accrued charter revenue for the three-month periods ended December 31, 2023 and 2022 was a negative amount of $1.2 million and a negative amount of $3.4 million, respectively.

Income from investments in leaseback vessels

Income from investments in leaseback vessels was $4.3 million for the three-month period ended December 31, 2023. Income from investments in leaseback vessels was earned from NML’s operations during the fourth quarter of 2023. NML acquires, owns and bareboat charters out vessels through its wholly-owned subsidiaries.

Voyage Expenses

Voyage expenses were $90.0 million and $15.1 million for the three-month periods ended December 31, 2023 and 2022, respectively. Voyage expenses increased, period over period, mainly due to the operations of CBI which has been fully operational since the first quarter of 2023. Voyage expenses mainly include (i) fuel consumption mainly related to dry bulk vessels, (ii) third-party commissions, (iii) port expenses and (iv) canal tolls.

Charter-in Hire Expenses

Charter-in hire expenses were $166.3 million and nil for the three-month periods ended December 31, 2023 and 2022, respectively. Charter-in hire expenses are expenses relating to chartering-in of third-party dry bulk vessels under charter agreements through CBI.

Voyage Expenses – related parties

Voyage expenses – related parties were $3.7 million each of the three-month periods ended December 31, 2023 and 2022. Voyage expenses – related parties represent (i) fees of 1.25%, in the aggregate, on voyage revenues earned by our owned fleet charged by a related manager and a related service provider and (ii) charter brokerage fees (in respect of our container vessels) payable to two related charter brokerage companies for an amount of approximately $0.4 million and $0.4 million, in the aggregate, for the three-month periods ended December 31, 2023 and 2022, respectively.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain/(loss) under derivative contracts entered into in relation to foreign currency exposure, were $64.0 million and $70.9 million during the three-month periods ended December 31, 2023 and 2022, respectively. Daily vessels’ operating expenses were $6,231 and $6,719 for the three-month periods ended December 31, 2023 and 2022, respectively. Daily operating expenses are calculated as vessels’ operating expenses for the period over the ownership days of the period.

General and Administrative Expenses

General and administrative expenses were $3.9 million and $3.1 million during the three-month periods ended December 31, 2023 and 2022, respectively, and include amounts of $0.67 million and $0.67 million, respectively, that were paid to a related service provider.

Management and Agency Fees – related parties

Management fees charged by our related managers were $11.7 million and $11.1 million during the three-month periods ended December 31, 2023 and 2022, respectively. Furthermore, during the three-month period ended December 31, 2023 and 2022, agency fees of $0.6 million and $2.8 million, respectively, were charged by our related agency companies, respectively, in connection with the operations of CBI.

General and Administrative Expenses – non-cash component

General and administrative expenses – non-cash component for the three-month period ended December 31, 2023 amounted to $1.5 million, representing the value of the shares issued to a related service provider on December 29, 2023. General and administrative expenses – non-cash component for the three-month period ended December 31, 2022 amounted to $1.4 million, representing the value of the shares issued to a related service provider on December 30, 2022.

Amortization of Dry-Docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $5.3 million and $4.0 million during the three-month periods ended December 31, 2023 and 2022, respectively. During the three-month period ended December 31, 2023, five vessels underwent and completed their dry-docking and special survey and two vessels were in the process of completing their dry-docking and special survey. During the three-month period ended December 31, 2022, two vessels underwent and completed their dry-docking and special survey and five vessels were in the process of completing their dry-docking and special survey.

Depreciation

Depreciation expense for the three-month periods ended December 31, 2023 and 2022 was $41.8 million and $41.7 million, respectively.

Gain / (Loss) on Sale of Vessels, net

During the three-month period ended December 31, 2023, we recorded a net loss of $1.0 million from the sale of the dry bulk vessels Peace, Pride and Cetus and the sale of the container vessel Oakland, which was classified as a vessel held for sale as of September 30, 2023. During the three-month period ended December 31, 2022, we recorded a gain of $105.1 million from the sale of the container vessels Sealand Michigan, Sealand Illinois and York, each of which was classified as a vessel held for sale as of September 30, 2022 (initially classified as vessels held for sale as of December 31, 2021).

Vessels Held for Sale

During the three-month period ended December 31, 2023, we recorded a loss on vessels held for sale of $2.3 million representing the expected loss from the sale of the dry bulk vessels Konstantinos and Progress during the next twelve-month period. Furthermore, during the three-month period ended December 31, 2023, the dry bulk vessels Manzanillo and Adventure were each classified as a vessel held for sale but no loss on vessels held for sale was recorded, since each vessel’s estimated fair value less costs to sell exceeded each vessel’s carrying value. As of December 31, 2022, the container vessels Sealand Washington and Maersk Kalamata (each of which was initially classified as a vessel held for sale during the first quarter of 2022) continued to be classified as vessels held for sale. No loss on vessels held for sale was recorded during the fourth quarter of 2022, since each vessel’s fair value less cost to sell exceeded each vessel’s carrying value.

Vessels’ Impairment Loss

During the three-month period ended December 31, 2023, we recorded an impairment loss in relation to one of our dry bulk vessels in the amount of $0.2 million. During the three-month period ended December 31, 2022, we recorded an impairment loss in relation to four of our dry bulk vessels in the amount of $1.7 million, in the aggregate.

Interest Income

Interest income amounted to $6.9 million and $4.9 million for the three-month periods ended December 31, 2023 and 2022, respectively.

Interest and Finance Costs

Interest and finance costs were $34.4 million and $35.8 million during the three-month periods ended December 31, 2023 and 2022, respectively. The decrease is mainly attributable to the decreased interest expense due to lower average loan balance during the three-month period ended December 31, 2023 compared to the three-month period ended December 31, 2022.

Income from Equity Method Investments

Income from equity method investments for the three-month periods ended December 31, 2023 and 2022 was $0.1 million and $0.7 million, respectively, representing our share of the gain in jointly owned companies set up pursuant to the Framework Deed. During the three-month period ended December 31, 2023 we acquired the 51% equity interest of York Capital of the 2001-built, 1,550 TEU capacity containership Arkadia and as a result we obtained 100% of the equity interest in the vessel. As of December 31, 2023 and 2022 two and five companies, respectively, were jointly owned pursuant to the Framework Deed out of which nil and four companies, respectively, owned container vessels.

Gain on Derivative Instruments, net

As of December 31, 2023, we hold derivative financial instruments that qualify for hedge accounting and derivative financial instruments that do not qualify for hedge accounting. The change in the fair value of each derivative instrument that qualifies for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”). The change in the fair value of each derivative instrument that does not qualify for hedge accounting is recorded in the consolidated statements of income.

As of December 31, 2023, the fair value of these instruments, in aggregate, amounted to a net asset of $47.7 million. During the three-month period ended December 31, 2023, a net loss of $23.3 million has been included in OCI and a net gain of $24.5 million has been included in Gain on Derivative Instruments, net.

Cash Flows
Three-month periods ended December 31, 2023 and 2022

Condensed cash flows
 
Three-month period ended December 31,

(Expressed in millions of U.S. dollars)
 
 
2022
 
 
 
2023
 

Net Cash Provided by Operating Activities
 
$
124.4
 
 
$
152.9
 

Net Cash Provided by / (Used in) Investing Activities
 
$
81.9
 
 
$
(33.3
)

Net Cash Used in Financing Activities
 
$
(110.6
)
 
$
(101.0
)


Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended December 31, 2023, increased by $28.5 million to $152.9 million, from $124.4 million for the three-month period ended December 31, 2022. The increase is mainly attributable to the favorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis), to the decreased payments for interest (including interest derivatives net receipts) during the three-month period ended December 31, 2023 compared to the three-month period ended December 31, 2022 and to the decreased dry-docking and special survey costs during the three-month period ended December 31, 2023 compared to the three-month period ended December 31, 2022; partly offset by the decreased net cash from operations during the three-month period ended December 31, 2023 compared to the three-month period ended December 31, 2022.

Net Cash Provided by / (Used in) Investing Activities

Net cash used in investing activities was $33.3 million in the three-month period ended December 31, 2023, which mainly consisted of (i) an advance payment for the acquisition of the secondhand dry bulk vessel Iron Miracle (tbr. Miracle), (ii) payments for upgrades for certain of our container and dry bulk vessels, (iii) payments for net investments into which NML entered and (iv) payments for the purchase of short-term investments in US Treasury Bills; partly offset by the proceeds we received from the sale of one container vessel and three dry bulk vessels.

Net cash provided by investing activities was $81.9 million in the three-month period ended December 31, 2022, which mainly consisted of proceeds we received from (i) the sale of three container vessels and (ii) the maturity of part of our short-term investments in US Treasury Bills; partly off-set by payments for the purchase of short-term investments in US Treasury Bills and payments for upgrades for certain of our container and dry bulk vessels.

Net Cash Used in Financing Activities

Net cash used in financing activities was $101.0 million in the three-month period ended December 31, 2023, which mainly consisted of (a) $88.0 million net payments relating to our debt financing agreements and finance lease liability agreement (including proceeds of $12 million we received from one debt financing agreement), (b) $9.3 million we paid for dividends to holders of our common stock for the third quarter of 2023 and (c) $0.9 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock”) and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (“Series E Preferred Stock”) for the period from July 15, 2023 to October 14, 2023.

Net cash used in financing activities was $110.6 million in the three-month period ended December 31, 2022, which mainly consisted of (a) $95.3 million net payments relating to our debt financing agreements (including proceeds of $197.9 million we received from three of our debt financing agreements), (b) $10.0 million we paid for dividends to holders of our common stock for the third quarter of 2022 and (c) $0.9 million we paid for dividends to holders of our Series B Preferred Stock, $2.1 million we paid for dividends to holders of our Series C Preferred Stock, $2.2 million we paid for dividends to holders of our Series D Preferred Stock and $2.5 million we paid for dividends to holders of our Series E Preferred Stock for the period from July 15, 2022 to October 14, 2022.
Results of Operations

Year ended December 31, 2023 compared to the year ended December 31, 2022

During the year ended December 31, 2023 and 2022, we had an average of 111.4 and 116.7 vessels, respectively, in our owned fleet. In addition, during the year ended December 31, 2023, through CBI we chartered-in an average of 43.1 third-party dry bulk vessels. As of February 6, 2024, CBI has chartered-in 51 dry bulk vessels on period charters.

During the year ended December 31, 2023, we (i) sold our 49% equity interest in the company owning the 2018-built, 3,800 TEU capacity containership, Polar Argentina to York Capital, (ii) acquired the 51% equity interest of York Capital of the 2018-built, 3,800 TEU capacity containership Polar Brasil and as a result we obtained 100% of the equity interest in the vessel and (iii) we acquired the 51% equity interest of York Capital of the 2001-built, 1,550 TEU capacity containership Arkadia and as a result we obtained 100% of the equity interest in the vessel.

In addition, during the year ended December 31, 2023, we acquired the secondhand dry bulk vessels Enna, Dorado and Arya with an aggregate DWT of 417,241 and we sold the container vessels Maersk Kalamata, Sealand Washington and Oakland with an aggregate TEU capacity of 18,182 and the dry bulk vessels Miner, Taibo, Comity, Peace, Pride and Cetus with an aggregate DWT of 248,655.

During the year ended December 31, 2022, we acquired (i) the secondhand container vessel Dyros with a TEU capacity of 4,578 and (ii) the secondhand dry bulk vessels Oracle, Libra and Norma with an aggregate DWT of 172,717. Furthermore, in the year ended December 31, 2022, we sold the container vessels Messini, Sealand Michigan, Sealand Illinois and York with an aggregate TEU capacity of 22,402, and the dry bulk vessel Thunder, with DWT of 57,334.

Up to December 31, 2023, we have invested in NML the amount of $119.6 million. NML is included in our consolidated financial statements.

In the years ended December 31, 2023 and 2022, our fleet ownership days totaled 40,652 and 42,595 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

Consolidated Financial Results and Vessels’ Operational Data(1)