Costamare Q4 & Year End Report

Wednesday, February 23, 2011
Costamare Inc. (NYSE: CMRE), an international owner of containerships, reported unaudited financial results for the fourth quarter and for the year ended December 31, 2010. 
 
Highlights
Voyage revenues of $85.7 million and $353.2 million for the three months and the year ended December 31, 2010, respectively.
Adjusted EBITDA of $56.2 million and $223.6 million for the three months and the year ended December 31, 2010, respectively.
Net income of $11.8 million or $0.21 per share and $81.2 million or $1.65 per share for the three months and the year ended December 31, 2010, respectively.
Adjusted Net Income of $18.0 million or $0.33 per share and $73.8 million or $1.50 per share for the three months and the year ended December 31, 2010, respectively.
Finalized the financing arrangements for the three newbuilding contracts which were identified in the Initial Public Offering prospectus in November 2010. The containerships, each with a capacity of approximately 9,000 TEU, will be constructed by Shanghai Jiangnan Changxing Heavy Industry Co., Ltd. for a contract price of $95.1 million per vessel and are scheduled to be delivered between November 2013 and January 2014. We have entered into time charter agreements with MSC for the employment of each vessel immediately upon delivery, for a duration of ten years at a daily charter rate of $43,000.
Contracted with Sungdong Shipbuilding & Marine Engineering Co., Ltd. for the construction and purchase of two newbuild containerships, each of approximately 9,000 TEU capacity. The two newbuildings are expected to be delivered by the end of 2012. We have entered into time charter agreements with MSC for the employment of each vessel immediately upon delivery, for duration of ten years. Both the contract price and the daily charter rate are similar to those agreed regarding the three 9,000 TEU vessels contracted with China Shipbuilding Trading Company Limited and Shanghai Jiangnan Changxing Heavy Industry Co., Ltd. and chartered to MSC for a period of 10 years. We expect to finance the acquisition with cash on hand and a new credit facility, without using any currently available credit lines.
Agreed to purchase the container vessels Oranje, of 2,020 TEU capacity, built in 1991 and Zagora of 1,162 TEU capacity, built in 1995, for a purchase price of $7.5 million and $8.3 million, respectively. The two second-hand vessels were delivered to us in January 2011 and were acquired using existing cash.
Agreed to purchase the container vessel Forever Prosperity, of 1,504 TEU capacity, built in 1996 at a purchase price of $9.5 million. The second-hand vessel will be acquired using existing cash.
Agreed to purchase three container vessels, with an approximate capacity of 2,020 TEU per vessel, two of them built in 1991 and one of them built in 1992, for an aggregate purchase price of $30.0 million. All three secondhand vessels will be acquired using existing cash. Concurrently agreed to sell the container vessels MSC Namibia, of 1,654 TEU capacity and built in 1977, MSC Sudan, of 1,630 TEU capacity and built in 1976 and MSC Sierra, of 1,630 TEU capacity and built in 1977, for an aggregate sale price of approximately $21.0 million. The three acquired vessels are expected to be delivered before the end of March 2011 and will substitute the MSC Namibia, MSC Sudan and MSC Sierra in their respective charter party agreements.
In November 2010 we took delivery of two 3,351 TEU containerships, the Karmen and the Rena, that we agreed to purchase in September 2010. Both containerships were acquired using existing cash.
In January 2011 we declared a dividend for the fourth quarter ended December 31, 2010, of $0.25 per share which was paid on February 4, 2011 to stockholders of record at the close of trading of the Company's common stock on the New York Stock Exchange (the "NYSE") on January 28, 2011. This was the first cash dividend we have declared since our Initial Public Offering on November 4, 2010.
 
 
Mr. Gregory Zikos, CFO of Costamare Inc., commented:
 
During the last months we have been successfully implementing our fleet renewal and expansion strategy. 
 
We have finalized and signed new ship building contracts for a total of five 9,000 TEU ships, all of which have been chartered for a period of 10 years at accretive rates; these vessels are expected to contribute contracted revenues in excess of $ 760 million. At the same time we bought in total 10 second hand vessels at attractive prices, 3 of which are expected to substitute 14 to 15 years older vessels for a minimal incremental cost of $ 3 million per ship. 
 
The total value of our deals exceeds $ 570 million. As of October 2010, before going public, we had 41 ships in the water with a total capacity of 211,882 TEUs. Today, we have 45 ships in the water, with 6 more vessels expected to be delivered, and an order book of five 9,000 TEUs ships, totaling 275,728 TEUs. 
 
Regarding chartering, we are in a market that has been rising as we expected; although charterers want to fix for longer periods, for second hand vessels we are reluctant to commit to more than 6 months employment, and we are trying to postpone chartering to the last possible moment. We expect however to finalize our chartering arrangements over the next month. 
 
Looking into 2011 we will continue our focus on growing our fleet through attractive acquisitions that create real shareholder value. Our cash at hand of $ 208 million by year end, together with undrawn credit lines of $ 194 million and a total of 19 ships which as of today are free of debt, place us at a unique position to grow. 
 
Finally, in line with our dividend policy, we have declared and paid a dividend of $0.25 per share for the fourth quarter 2010. This was the first cash dividend the Company paid since our initial public offering on November 4, 2010. 
 
With a track record of uninterrupted profitability, and 35 years' experience in shipping, including 25 years in containers, we are confident about our short and long-term potential and we remain excited about the many opportunities that we believe lie ahead for our Company. 
 
Results of Operations
 
Three-month period ended December 31, 2010 compared to the three-month period ended December 31, 2009 
 
During the three-month periods ended December 31, 2010 and 2009, we had an average of 42.0 and 44.4 vessels, respectively, in our fleet. In the three-month period ended December 31, 2010, we accepted delivery of the vessels Karmen and Rena with an aggregate TEU capacity of 6,702. In the three-month period ended December 31, 2009 we sold the vessel Liguria with TEU capacity of 956. In the three-month period ended December 31, 2010 and 2009 our fleet operating days totaled 3,864 and 4,085 days, respectively. Operating 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. 
Voyage Revenue
 
Voyage revenue decreased by 9.7%, or $9.2 million, to $85.7 million during the three-month period ended December 31, 2010, from $94.9 million during the three-month period ended December 31, 2009. The decrease was primarily attributable to the decrease in operating days of our fleet during the period. The decrease in operating days was a result of a lower average number of vessels in our fleet during the three-month period ended December 31, 2010 compared to the corresponding period in 2009. The decrease was also attributable to the time charter period extension for eight of our vessels for a four-year period commencing in 2014 at rates on average lower than the existing charter rates. 
 
Voyage Expenses
 
Voyage expenses increased by 25.0%, or $0.1 million, to $0.5 million during the three-month period ended December 31, 2010, from $0.4 million during the three-month period ended December 31, 2009. The increase was primarily attributable to the off-hire expenses of the container vessels Karmen and Rena which were delivered to us by their sellers in November 2010. Upon her delivery the vessel Karmen underwent a dry-docking and commenced her time charter in late December 2010. 
 
Voyage Expenses - related parties
 
Voyage expenses - related parties in the amount of $0.4 million represent management fees charged to us by Costamare Shipping Company S.A. as provided under our management agreement. Voyage Expenses - related parties represent a 0.75% charge on our voyage revenues for the period from November 4, 2010 (Initial Public Offering completion) up to December 31, 2010. 
 
Vessels' Operating Expenses
 
Vessels' operating expenses, which also include the realized gain (loss) under derivative contracts entered into related to foreign currency exposure, decreased by 1.9%, or $0.5 million, to $26.1 million during the three-month period ended December 31, 2010, from $26.6 million during the three-month period ended December 31, 2009. Vessels' operating expenses, excluding the effect of the realized gain (loss) under these derivative contracts, decreased by 8.2%, or $2.3 million, to $25.8 million during the three-month period ended December 31, 2010, from $28.1 million during the three-month period ended December 31, 2009. The decrease was also partly attributable to the decreased fleet operating days during the three-month period ended December 31, 2010 compared to the three-month period ended December 31, 2009. 
 
General and Administrative Expenses
 
General and administrative expenses decreased by 60.0%, or $0.6 million, to $0.4 million during the three-month period ended December 31, 2010, from $1.0 million during the three-month period ended December 31, 2009. The decrease in the three-month period ended December 31, 2010 was mainly attributable to the decreased legal and advisory expenses charged to us compared to the three-month period ended December 31, 2009. In the three-month period ended December 31, 2009, Shanghai Costamare Ship Management Co. Ltd. charged us the amount of $0.5 million for market analysis and research services. There was not such charge for the three-month period ended December 31, 2010. 
 
Management Fees - related parties
 
Management fees paid to our managers increased by 6.9%, or $0.2 million, to $3.1 million during the three-month period ended December 31, 2010, from $2.9 million during the three-month period ended December 31, 2009. The increase was attributable to the new daily management fee we paid to our managers subsequent to the completion of our Initial Public Offering on November 4, 2010, offset by the decrease in fleet operating days for the three-month period ended December 31, 2010, compared to the three-month period ended December 31, 2009. 
 
Amortization of Dry-docking and Special Survey Costs 
 
Amortization of deferred dry-docking and special survey costs increased by 15.0% or $0.3 million, to $2.3 million during the three-month period ended December 31, 2010, from $2.0 million during the three-month period ended December 31, 2009. The increase was mainly attributable to the amortization expense charged for four of our vessels that underwent their initial dry-docking in the year ended December 31, 2010, partially offset by the amortization expense not charged following the sale of the vessels MSC Germany, MSC Mexico and MSC Sicily during the nine-month period ended September 30, 2010 and the write-off of their unamortized dry-docking balance which was included in the sale result. During the three-month period ended December 31, 2010 and 2009, three vessels and one vessel, respectively, underwent their special surveys. 
 
Depreciation 
 
Depreciation expense increased by 2.2%, or $0.4 million, to $18.3 million during the three-month period ended December 31, 2010, from $17.9 million during the three-month period ended December 31, 2009. The increase was primarily attributable to the depreciation expense charged for the vessel MSC Navarino that was delivered to us by the shipyard in May 2010 and to the vessels Karmen and Rena that were delivered to us in November 2010. MSC Liguria, which was sold in the three-month period ended December 31, 2009 was fully depreciated as of the date it was sold. 
 
Charter agreement early termination fee 
 
The Charter agreement early termination fee of $9.5 million represents a one-time payment made to the charterer of MSC Navarino (renamed to Hyundai Navarino in January 2011) in December 2010, compensating the charterer MSC for the early termination of the charter party agreement of MSC Navarino. The vessel was redelivered to us by the charterer on January 28, 2011 and on January 30, 2011 she was delivered to charterers HMM for a daily charter rate of $44,000, compared to a daily charter rate of $22,000 under the MSC charter party agreement. 
 
Gain on Sale of Vessels 
 
In the three-month period ended December 31, 2009, we recorded a gain of $0.3 million from the sale of vessel MSC Liguria. During the three-month period ended December 31, 2010 no vessels were sold. 
 
Foreign Exchange Gains / (Losses) 
 
Foreign exchange losses were $0.3 million during the three-month period ended December 31, 2010, compared to losses of $0.1 million during the three-month period ended December 31, 2009, representing a change of $0.2 million resulting from unfavorable currency exchange rate movements between the U.S. dollar and the Euro. 
 
Interest Income 
 
During the three-month period ended December 31, 2010 interest income increased by 50.0%, or $0.1 million, to $0.3 million, from $0.2 million during the three-month period ended December 31, 2009. The change in interest income was mainly due to the increased average cash balance held by us during the three-month period ended December 31, 2010 compared to the three-month period ended December 31, 2009.
 
Interest and Finance Costs 
 
Interest and finance costs decreased by 12.7%, or $2.6 million, to $17.8 million during the three-month period ended December 31, 2010, from $20.4 million during the three-month period ended December 31, 2009. Interest expense decreased to $5.0 million during the three-month period ended December 31, 2010, from $8.1 million during the three-month period ended December 31, 2009 due to decreased average loan balances outstanding. The costs relating to our interest rate swap agreements increased to $12.1 million during the three-month period ended December 31, 2010, from $9.8 million during the three-month period ended December 31, 2009, due to the increased difference between market rates and fixed rates. 
 
Gain (Loss) on Derivative Instruments 
 
The fair value of our 11 derivative instruments which were outstanding as of December 31, 2010 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2010, the fair value of these 11 interest rate swaps in aggregate amounted to a liability of $107.9 million. Ten of the 11 interest rate derivative instruments that were outstanding as at December 31, 2010, qualified for hedge accounting and the effective portion in the change of their fair value is recorded in "Other comprehensive loss" in stockholders' equity. For the three-month period ended December 31, 2010, a gain of $25.6 million has been included in "Other comprehensive loss" in stockholders' equity and a gain of $4.9 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 swaps during the three-month period ended December 31, 2010.
 
Net cash flows provided by operating activities for the three-month period ended December 31, 2010 decreased by $4.5 million to $39.0 million, compared to $43.5 million for the three-month period ended December 31, 2009. The decrease was primarily attributable to (a) increased payments for dry-dockings of $1.2 million in the three-month period ended December 31, 2010 compared to the three-month period ended December 31, 2009, (b) a one-time payment of $9.5 million in December 2010 to the charterers of MSC Navarino for the early redelivery of the vessel; partly offset by the decreased payments for interest (including swap payments) of $3.1 million in the three-month period ended December 31, 2010 compared to the three-month period ended December 31, 2009 
 
Net Cash Used in Investing Activities 
 
Net cash used in investing activities was $26.3 million in the three-month period ended December 31, 2010, which consists of (a) $22.5 million in payments for the acquisition of two vessels and (b) $3.8 million advance payments for the acquisition of four vessels. 
 
Net cash used in investing activities was $22.7 million in the three-month period ended December 31, 2009, which consists of (a) $1.8 million we received from the sale of one vessel and (b) $24.5 million in payments to the shipyard for the construction cost of MSC Navarino. 
 
Net Cash Provided by (Used in) Financing Activities 
 
Net cash provided by financing activities was $116.2 million in the three-month period ended December 31, 2010, which mainly consists of (a) $30.4 million of indebtedness that we repaid, (b) $148.8 million net proceeds we received from our Initial Public Offering in November 2010, net of underwriting commissions and (c) $1.6 million in payments for costs related to our Initial Public Offering. 
 
Net cash used in financing activities was $25.7 million in the three-month period ended December 31, 2009, which mainly consists of (a) $55.2 million of indebtedness that we repaid and (b) $30.0 million of proceeds drawn under our loan facility. 
 
Results of Operations
 
Year ended December 31, 2010 compared to the year ended December 31, 2009 During the year ended December 31, 2010, we had an average of 42.4 vessels in our fleet, compared to an average of 47.3 vessels in our fleet during 2009. In 2010 we acquired the newbuild vessel MSC Navarino and the second-hand vessels Karmen and Rena with an aggregate TEU capacity of 15,233, and we sold four vessels with an aggregate TEU capacity of 10,766. In 2009, we acquired the vessels Gifted and Genius with an aggregate TEU capacity of 5,844, and we sold 10 vessels with an aggregate TEU capacity of 18,333. In 2010 our fleet operating days totaled 15,488 days. In 2009 our fleet operating days totaled 17,279 days. Operating 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. 
 
Voyage revenue decreased by 11.7%, or $46.7 million, to $353.2 million during the year ended December 31, 2010, from $399.9 million during the year ended December 31, 2009. The decrease was primarily attributable to the decrease in operating days of our fleet during the year; resulting from the lower average number of vessels in our fleet during the year ended December 31, 2010 compared to the year ended December 31, 2009. The decrease was also attributable to the time charter period extension for eight of our vessels for a four-year period commencing the earliest from 2014 at rates on average lower than the existing charter rates. 
 
Voyage Expenses
 
Voyage expenses decreased by 32.3%, or $1.0 million, to $2.1 million during the year ended December 31, 2010 from $3.1 million during the year ended December 31, 2009. The decrease was primarily attributable to the decrease in operating days of our fleet for the year ended December 31, 2010, resulting from the lower average number of vessels in our fleet during the year ended December 31, 2010 compared to the year ended December 31, 2009. The decrease was also attributable to decreased commissions charged by third parties as well as to lower fuel consumption during off-hire days. 
 
Voyage Expenses - related parties
 
Voyage expenses - related parties in the amount of $0.4 million represent management fees charged to us by Costamare Shipping Company S.A. as provided under our management agreement. Voyage Expenses - related parties represent a 0.75% charge on our voyage revenues for the period from November 4, 2010 (Initial Public Offering completion) up to December 31, 2010. 
 
Vessels' Operating Expenses
 
Vessels' operating expenses, which also include the realized gain (loss) under our forward transactions we entered into to hedge our Euro/USD exposure, decreased by 10.3%, or $11.8 million, to $102.8 million during the year ended December 31, 2010, from $114.6 million during the year ended December 31, 2009. Vessels' operating expenses, excluding the effect of the realized gain (loss) under our forward transactions, decreased by 15.5%, or $18.5 million, to $101.0 million during the year ended December 31, 2010, from $119.5 million during the year ended December 31, 2009. The decrease was mainly attributable to the decreased fleet operating days during the year ended December 31, 2010 compared to the year ended December 31, 2009. 
 
General and Administrative Expenses
 
General and administrative expenses decreased by 29.4%, or $0.5 million, to $1.2 million during the year ended December 31, 2010, from $1.7 million during the year ended December 31, 2009. The decrease in the year ended December 31, 2010 was mainly attributable to the decrease in legal, accounting and advisory fees charged to us. In the year ended December 31, 2009, Shanghai Costamare Ship Management Co. Ltd. charged us the amount of $0.5 million for market analysis and research services. There was not such charge for the year ended December 31, 2010. 
 
Management Fees - related parties
 
Management fees paid to our managers decreased by 7.4%, or $0.9 million, to $11.3 million during the year ended December 31, 2010, from $12.2 million during the year ended December 31, 2009. The decrease was attributable to the decrease in operating days of our fleet for the year ended December 31, 2010, resulting from the lower average number of vessels in our fleet in the year ended December 31, 2010 compared to the year ended December 31, 2009; partly offset by the new daily management fee we pay to our managers upon the completion of our Initial Public Offering on November 4, 2010. 
 
Amortization of Dry-docking and Special Survey Costs 
 
Amortization of deferred dry-docking and special survey costs increased by 6.3%, or $0.5 million, to $8.5 million during the year ended December 31, 2010, from $8.0 million during the year ended December 31, 2009. During the year ended December 31, 2009 and 2010, six vessels and 12 vessels, respectively, underwent their special survey. The increase is attributable to the amortization expense charged for 12 vessels that were dry-docked during the year ended December 31, 2010, partly offset by the amortization expense not charged relating to the vessels sold during the year as their unamortized dry-docking balance at the date they were sold, was written-off and was included in the sale result. 
 
Depreciation 
 
Depreciation expense decreased by 0.3%, or $0.2 million, to $70.9 million during the year ended December 31, 2010, from $71.1 million during the year ended December 31, 2009. The decrease was attributable to the sale of 10 vessels and four vessels during the years ended December 31, 2009 and December 31, 2010, respectively, partly offset by the depreciation expense charged for two vessels and three vessels acquired during the years ended December 31, 2009 and December 31, 2010, respectively. Seven out of 10 vessels and three out of four vessels sold in 2009 and 2010, respectively, were fully depreciated as of the dates they were sold. 
 
Gain on Sale of Vessels
 
In the year ended December 31, 2010, we recorded a gain of $9.6 million from the sale of four vessels, while in the year ended December 31, 2009, we recorded a net gain of $2.9 million from the sale of ten vessels. 
 
Charter agreement early termination fee
 
The Charter agreement early termination fee of $9.5 million represents a one-time payment made to the charterer of MSC Navarino (renamed to Hyundai Navarino in January 2011) in December 2010, compensating the charterer MSC for the early termination of the charter party agreement of MSC Navarino. The vessel was redelivered to us by the charterer on January 28, 2011 and on January 30, 2011 she was delivered to charterers HMM for a daily charter rate of $44,000, compared to a daily charter rate of $22,000 under MSC charter party agreement. 
 
Foreign Exchange Gains / (Losses)
 
Foreign exchange losses were $0.3million during the year ended December 31, 2010, compared to losses of $0.5 million during the year ended December 31, 2009, representing a change of $0.2 million resulting from favorable currency exchange movements between the U.S. dollar and the Euro. 
 
Interest Income
 
In the year ended December 31, 2010 interest income decreased by 42.3%, or $1.1 million, to $1.5 million, from $2.6 million during the year ended December 31, 2009. The change in interest income was mainly due to the decreased average cash balance held by us during the year ended December 31, 2010 compared to the year ended December 31, 2009. 
 
Interest and Finance Costs 
 
Interest and finance costs decreased by 17.2%, or $14.9 million, to $71.9 million during the year ended December 31, 2010, from $86.8 million during the year ended December 31, 2009. The decrease was mainly attributable to lower average debt balance during the year ended December 31, 2010, compared to year ended December 31, 2009. The interest expense decreased to $19.5 million during the year ended December 31, 2010, from $47.5 million during the year ended December 31, 2009, due to decreased base rates. The costs relating to our interest rate swap agreements increased to $51.8 million during the year ended December 31, 2010, from $34.6 million during the year ended December 31, 2009, due to the increased difference between market rates and fixed rates. 
 
Other
 
Other decreased to $0.3 million during the year ended December 31, 2010, from $3.9 million during the year ended December 31, 2009. The decrease was primarily attributable to the decreased income resulting from our vessels' hull and machinery as well as guarantee claims recoveries. 
 
Gain (Loss) on Derivative Instruments 
 
The fair value of our 11 derivative instruments which were outstanding as of December 31, 2010 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2010, the fair value of these 11 interest rate swaps in aggregate amounted to a liability of $107.9 million. Ten of the 11 interest rate derivative instruments that were outstanding as at December 31, 2010 qualified for hedge accounting and the effective portion in the change of their fair value is recorded in "Other comprehensive loss" in stockholders' equity. For the year ended December 31, 2010, a loss of $21.9 million has been included in "Other comprehensive loss" in stockholders' equity and a loss of $4.9 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 swaps during the year ended December 31, 2010. 
Cash Flows 
 
Net Cash Provided by Operating Activities 
 
Net cash flows provided by operating activities for the year ended December 31, 2010 decreased $33.9 million to $128.0 million, compared to $161.9 million for the year ended December 31, 2009. The decrease was primarily attributable to (a) decreased cash from operations of $38.0 million resulting from the decreased average number of vessels in 2010 compared to 2009 and to the increased "Accrued charter revenue" which results from the time difference between the revenue recognition and the cash collection, (b) unfavorable change in working capital position, excluding the current portion of long term debt and the accrued charter revenue, of $7.8 million, (c) increased payments for dry-dockings of $6.7 million and (d) a one-time payment of $9.5 million in December 2010 to the charterers of MSC Navarino for the early redelivery of the vessel, partly offset by reduced payments for interest (including swap payments) of $16.9 million in the year ended December 31, 2010, compared to the year ended December 31, 2009. 
 
Net Cash Provided by (Used in) Investing Activities 
 
Net cash used in investing activities was $23.9 million in the year ended December 31, 2010, which consists of (a) $28.3 million in payments to the shipyard for the construction cost of MSC Navarino, (b) $22.5 million in payments for the acquisition of two vessels, (c) $3.8 million advance payments for the acquisition of four vessels, (d) $22.7 million we received from the sale of four vessels and (e) $8.0 million we received from the sale of government securities. 
 
Net cash provided by investing activities was $12.8 million in the year ended December 31, 2009, which consists of (a) $8.9 million in payments for the acquisition of the vessels Genius and Gifted, (b) $47.9 million in payments for the construction cost of MSC Navarino, (c) $21.4 million we received from the sale of government securities and (d) $48.2 million we received from the sale of 10 vessels. 
 
Net Cash Provided by (Used in) Financing Activities 
 
Net cash provided by financing activities was $43.4 million in the year ended December 31, 2010, which mainly consists of (a) $93.9 million of indebtedness that we repaid, (b) $10.0 million in dividends we paid to our shareholders and (c) $145.5 million net proceeds we received from our Initial Public Offering in November 2010. 
 
Net cash used in financing activities was $252.7 million in the year ended December 31, 2009, which mainly consists of (a) $30.0 million of proceeds drawn under our loan facility, (b) $124.4 million of indebtedness that we repaid and (c) $161.2 million in dividends we paid to our shareholders. 
 
Liquidity and Capital Expenditures 
 
Cash and cash equivalents 
 
As of December 31, 2010 Costamare had a total cash liquidity of $207.8 million, consisting of cash, cash equivalents, restricted cash and investments. 
 
Undrawn Credit Lines 
 
As of December 31, 2010 Costamare had a total of undrawn credit lines of $194.2 million. 
 
Debt-free vessels 
 
Capital commitments 
 
As of February 16, 2011 the Company's total commitments for own funds, assuming the finalization of the currently negotiated loan agreement in relation to the construction of two 9,000 TEU vessels to be built by Sungdong Shipbuilding & Marine Engineering Co., Ltd., amount to a total of approximately $ 140.9 million. This amount includes all equity capital commitments in relation to our new building contracts and our second hand vessel acquisitions. 
 
4. OW Bunker Reports Record Year for 2010
OW Bunker, a supplier and trader of marine fuel, announced that 2010 was a record year for the company with volume up 15% and pre-tax profits on unaudited accounts increasing from $32 million in 2009 to $48 million in 2010. The company said that this has been achieved through the controlled development of global operations; adjusting to the changing dynamics of the market and global economy and focusing on regions of growth and opportunity, as well as widespread customer retention and
new client acquisition by providing quality products and services that meet demand.
 
The strong performance highlights the validity of OW Bunkerʼs business model, which is underpinned by a clear distinction between the physical and trading divisions of the company to ensure that there is a real focus on core competencies. It also shows, amid continued challenging market conditions, the financial strength of the company and its ability to manage risk, retain tight control of both commercial and  financial exposure, and effectively manage credit lines and insurance on receivables, as well as fluctuations in the oil markets. This has created a strong platform for continued and sustainable growth over the past five years.
 
Commenting on the results, Morten Skou, Chief Financial Officer, OW Bunker, said:
“These latest results clearly highlight the strength of our business model, which has proven to
provide stability and sustainable growth in a volatile market and global economy. OW Bunker has maintained focus on regions of growth including South America and the BRIC (Brazil, Russia, India and China) countries. In 2010 it launched physical operations in both Panama and Uruguay, which combined with Chile provides complete coverage to the west coast of South America. While the physical market remains tough, the company has maintained a flexible strategy, reacting to market conditions and responding to customer demand on a region-by-region basis.”
 
Other successes include the continuing development of its Cargo Trading division within Northern Europe. While asset-backed trading is not a traditional model within the bunkering industry, it has strengthened the companyʼs offering to customers and provided further stability amidst volatile markets and a turbulent global economy. While the global economy tentatively recovers, OW Bunker is confident of continued success in 2011 as it looks to capitalise on the work of the past few years that has been spent
streamlining the companyʼs operations, and calibrating the business so that it can focus on markets and regions of growth and opportunity. The company is also committed to helping its customers meet environmental regulations and manage the transition from heavy to clean fuel, both from a technical and supply perspective, and adapting to the changing dynamic of the shipping industry. This includes  continuing to improve levels of professionalism, striving to set new benchmarks for customer service and utilising the latest technology and systems to improve the bunkering process, such as the adoption of mass flow meters on vessels.
 
“The time that we have spent investing in our infrastructure and global operations in order to enable the business to capitalise on areas of growth has been validated. While we expect 2011 to be another precarious year for the global economy and shipping industry as it continues to recover, we remain confident that we have the financial strength, the right strategy, and the right people to meet our ambitious growth targets.”
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