Financial Report

Results of Operations

Three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015

During the three-month periods ended June 30, 2016 and 2015, we had an average of 54.0 and 55.0 vessels, respectively, in our fleet. In the three-month periods ended June 30, 2016 and 2015, our fleet ownership days totaled 4,914 and 5,005 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 June 30,
(Expressed in millions of U.S. dollars, except percentages)	2015			2016			Change			Percentage Change


Voyage revenue	$	123.2		$	119.5		$	(3.7	)		(3.0	%)
Voyage expenses		(0.4	)		(0.5	)		0.1			25.0	%
Voyage expenses – related parties		(0.9	)		(0.9	)		-			-
Vessels' operating expenses		(30.2	)		(25.5	)		(4.7	)		(15.6	%)
General and administrative expenses		(1.4	)		(1.6	)		0.2			14.3	%
Management fees – related parties		(4.9	)		(4.8	)		(0.1	)		(2.0	%)
General and administrative expenses – non-cash component		(2.7	)		(1.4	)		(1.3	)		(48.1	%)
Amortization of dry-docking and special survey costs		(1.8	)		(2.0	)		0.2			11.1	%
Depreciation		(25.3	)		(25.3	)		-			-
Amortization of prepaid lease rentals		(1.2	)		(1.2	)		-			-
Foreign exchange gains/ (losses)		(0.1	)		(0.1	)		-			-
Interest income		0.3			0.4			0.1			33.3	%
Interest and finance costs		(19.3	)		(17.8	)		(1.5	)		(7.8	%)
Equity gain / (loss) on investments		0.1			(0.2	)		(0.3	)		(300.0	%)
Gain / (Loss) on derivative instruments		8.9			(1.6	)		(10.5	)		(118.0	%)
Net Income	$	44.3		$	37.0


(Expressed in millions of U.S. dollars, except percentages)	Three-month period ended June 30,					Change			Percentage Change
	2015		2016			Change			Percentage Change

Voyage revenue	$	123.2	$	119.5		$	(3.7	)		(3.0	%)
Accrued charter revenue		0.8		(1.6	)		(2.4	)		(300.0	%)
Voyage revenue adjusted on a cash basis	$	124.0	$	117.9		$	(6.1	)		(4.9	%)


Vessels operational data	Three-month period ended June 30,							Percentage Change
Vessels operational data	2015		2016		Change			Percentage Change

Average number of vessels		55.0		54.0		(1.0	)		(1.8	%)
Ownership days		5,005		4,914		(91	)		(1.8	%)
Number of vessels under dry-docking		1		3		2

Voyage Revenue

Voyage revenue decreased by 3.0%, or $3.7 million, to $119.5 million during the three-month period ended June 30, 2016, from $123.2 million during the three-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average number of vessels and the decreased revenue days of our fleet, during the three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015.

Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 4.9%, or $6.1 million, to $117.9 million during the three-month period ended June 30, 2016, from $124.0 million during the three-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average number of vessels and the decreased revenue days of our fleet, during the three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015.

Voyage Expenses

Voyage expenses were $0.5 million and $0.4 million, during the three-month periods ended June 30, 2016 and 2015, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties in the amount of $0.9 million during the three-month periods ended June 30, 2016 and 2015, represent fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping Company S.A. ("Costamare Shipping") and by Costamare Shipping Services Ltd. ("Costamare Services") pursuant to the Framework Agreement between Costamare Shipping and us dated November 2, 2015 (the "Framework Agreement"), the Services Agreement between Costamare Services and our vessel-owning subsidiaries dated November 2, 2015 (the "Services Agreement") and the individual ship-management agreements pertaining to each vessel.

Vessels' Operating Expenses

Vessels' operating expenses, which also include the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 15.6%, or $4.7 million, to $25.5 million during the three-month period ended June 30, 2016, from $30.2 million during the three-month period ended June 30, 2015.

General and Administrative Expenses

General and administrative expenses increased by 14.3%, or $0.2 million, to $1.6 million during the three-month period ended June 30, 2016, from $1.4 million during the three-month period ended June 30, 2015. General and administrative expenses for the three-month periods ended June 30, 2016 and 2015, included $0.63 million which is part of the annual fee that Costamare Services receives based on the Services Agreement, effected on November 2, 2015. Prior to November 2, 2015, this annual fee was charged by Costamare Shipping pursuant to the Amended and Restated Group Management Agreement (the "Group Management Agreement"), which was effective from January 1, 2015 until November 2, 2015.

Management Fees – related parties

Management fees paid to our managers were decreased by 2.0% or $0.1 million to $4.8 million during the three-month period ended June 30, 2016 from $4.9 million during the three-month periods ended June 30, 2015. The decrease was attributable to the decreased average number of vessels during the three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015.

General and Administrative expenses – non-cash component

General and administrative expenses – non-cash component for the three-month period ended June 30, 2016 amounted to $1.4 million, representing the value of the shares issued to Costamare Services on June 30, 2016, pursuant to the Services Agreement. For the three-month period ended June 30, 2015, the non-cash component of general and administrative expenses was $2.7 million, representing the value of shares issued to Costamare Shipping on June 30, 2015, pursuant to the Group Management Agreement. The decrease was attributable to the decrease in the fair value of the shares issued on June 30, 2016 compared to the shares issued on June 30, 2015.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $2.0 million for the three-month period ended June 30, 2016 and $1.8 million for the three-month period ended June 30, 2015. During the three-month period ended June 30, 2016, three vessels underwent and completed their special surveys. During the three-month period ended June 30, 2015, one vessel underwent and completed its special survey.

Depreciation

Depreciation expense was $25.3 million during the three-month periods ended June 30, 2016 and 2015.

Amortization of Prepaid Lease Rentals

Amortization of prepaid lease rentals was $1.2 million during the three-month periods ended June 30, 2016 and 2015.

Foreign Exchange Gains/ (Losses)

Foreign exchange losses were $0.1 million during the three-month periods ended June 30, 2016 and 2015.

Interest Income

Interest income amounted to $0.4 million and $0.3 million for the three-month periods ended June 30, 2016 and 2015, respectively.

Interest and Finance Costs

Interest and finance costs decreased by 7.8%, or $1.5 million, to $17.8 million during the three-month period ended June 30, 2016, from $19.3 million during the three-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average loan balance during the three month period ended June 30, 2016 compared to the three month period ended June 30, 2015.

Equity Gain / (Loss) on Investments

The equity loss on investments of $0.2 million for the three-month period ended June 30, 2016, represents our share of the net losses of nineteen jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015 (the "Framework Deed"), between the Company and a wholly-owned subsidiary, on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, "York") and is mainly attributable to the pre-delivery expenses charged to nine vessels that are currently under construction. We hold a range of 25% to 49% of the capital stock of these companies.

Gain / (Loss) on Derivative Instruments

The fair value of our 18 interest rate derivative instruments which were outstanding as of June 30, 2016 equates to the amount that would be paid by us or to us should those instruments be terminated. As of June 30, 2016, the fair value of these 18 interest rate derivative instruments in aggregate amounted to a liability of $54.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in "Other Comprehensive Income" ("OCI") while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the three-month period ended June 30, 2016, a net gain of $2.1 million has been included in OCI and a net loss of $1.0 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 June 30, 2016.

Cash Flows

Three-month periods ended June 30, 2016 and 2015


Condensed cash flows	Three-month period ended June 30,
(Expressed in millions of U.S. dollars)	2015			2016
Net Cash Provided by Operating Activities	$	65.3		$	62.4
Net Cash Used in Investing Activities	$	(5.7	)	$	(7.2	)
Net Cash Provided by / (Used in) Financing Activities	$	16.1		$	(36.6	)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended June 30, 2016, decreased by $2.9 million to $62.4 million for the three-month period ended June 30, 2016, compared to $65.3 million for the three-month period ended June 30, 2015. The decrease was mainly attributable to the decreased cash from operations of $6.1 million, 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 $2.6 million and increased special survey costs of $2.8 million, partly offset by decreased payments for interest (including swap payments) during the period of $1.4 million in the three-month period ended June 30, 2016 compared to the three-month period ended June 30, 2015.

Net Cash Used in Investing Activities

Net cash used in investing activities was $7.2 million in the three-month period ended June 30, 2016, which mainly consisted of $4.2 million for an advance payment for the construction of one newbuild vessel, ordered pursuant to the Framework Deed and $1.6 million in payments for upgrades to one of our vessels.

Net cash used in investing activities was $5.7 million in the three-month period ended June 30, 2015, which mainly consisted of $4.3 million for an advance payment for the construction of one newbuild vessel, ordered pursuant to the Framework Deed.

Net Cash Provided by / (Used in) Financing Activities

Net cash used in financing activities was $36.6 million in the three-month period ended June 30, 2016, which mainly consisted of (a) $44.8 million of indebtedness that we repaid, (b) $3.6 million we repaid relating to our sale and leaseback agreements (c) $39.0 million that we drew down from one of our credit facilities (d) $21.9 million we paid for dividends to holders of our common stock for the first quarter of 2016 and (e) $1.0 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") and $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock ("Series D Preferred Stock"), for the period from January 15, 2016 to April 14, 2016.

Net cash provided by financing activities was $16.1 million in the three-month period ended June 30, 2015, which mainly consisted of (a) $48.7 million of indebtedness that we repaid, (b) $3.3 million we repaid relating to our sale and leaseback agreements (c) $21.7 million we paid for dividends to holders of our common stock for the first quarter of 2015, (d) $1.0 million we paid for dividends to holders of our Series B Preferred Stock and $2.1 million we paid for dividends to holders of our Series C Preferred Stock, in both cases for the period from January 15, 2015 to April 14, 2015 and (e) $96.6 million net proceeds we received in May 2015 from our public offering of 4.0 million shares of our Series D Preferred Stock, net of underwriting discounts and expenses incurred in the offering.

Results of Operations

Six-month period ended June 30, 2016, compared to the six-month period ended June 30, 2015

During the six-month periods ended June 30, 2016 and 2015, we had an average of 54.0 and 55.0 vessels, respectively in our fleet. In the six-month periods ended June 30, 2016 and 2015, our fleet ownership days totaled 9,828 and 9,955 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.

	Six-month period ended June 30,
(Expressed in millions of U.S. dollars, except percentages)	2015			2016			Change			Percentage Change


Voyage revenue	$	244.1		$	239.8		$	(4.3	)		(1.8	%)
Voyage expenses		(1.0	)		(1.0	)		-			-
Voyage expenses – related parties		(1.8	)		(1.8	)		-			-
Vessels' operating expenses		(59.8	)		(52.5	)		(7.3	)		(12.2	%)
General and administrative expenses		(2.7	)		(2.9	)		0.2			7.4	%
Management fees – related parties		(9.7	)		(9.6	)		(0.1	)		(1.0	%)
General and administrative expenses – non-cash component		(5.4	)		(2.7	)		(2.7	)		(50.0	%)
Amortization of dry-docking and special survey costs		(3.6	)		(3.9	)		0.3			8.3	%
Depreciation		(50.4	)		(50.6	)		0.2			0.4	%
Amortization of prepaid lease rentals		(2.5	)		(2.5	)		-			-
Foreign exchange gains / (losses)		0.2			(0.2	)		(0.4	)		(200.0	%)
Interest income		0.7			0.7			-			-
Interest and finance costs		(41.9	)		(36.7	)		(5.2	)		(12.4	%)
Equity loss on investments		-			(0.4	)		0.4			100.0	%
Other		0.3			0.6			0.3			100.0	%
Gain / (Loss) on derivative instruments		4.1			(4.3	)		(8.4	)		(204.9	%)
Net Income	$	70.6		$	72.0


(Expressed in millions of U.S. dollars, except percentages)	Six-month period ended June 30,					Change			Percentage Change
	2015		2016			Change			Percentage Change

Voyage revenue	$	244.1	$	239.8		$	(4.3	)		(1.8	%)
Accrued charter revenue		1.4		(2.1	)		(3.5	)		(250.0	%)
Voyage revenue adjusted on a cash basis	$	245.5	$	237.7		$	(7.8	)		(3.2	%)


Vessels operational data	Six-month period ended June 30,							Percentage Change
Vessels operational data	2015		2016		Change			Percentage Change

Average number of vessels		55.0		54.0		(1.0	)		(1.8	%)
Ownership days		9,955		9,828		(127	)		(1.3	%)
Number of vessels under dry-docking		3		6		3

Voyage Revenue

Voyage revenue decreased by 1.8%, or $4.3 million, to $239.8 million during the six-month period ended June 30, 2016, from $244.1 million during the six-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average number of vessels and decreased revenue days of our fleet during the six-month period ended June 30, 2016 compared to the six-month period ended June 30, 2015, partly offset by revenue earned due to increased calendar days by one day during the six-month period ended June 30, 2016 (182 calendar days) compared to the six-month period ended June 30, 2015 (181 calendar days).

Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), decreased by 3.2%, or $7.8 million, to $237.7 million during the six-month period ended June 30, 2016, from $245.5 million during the six-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average number of vessels and decreased revenue days of our fleet during the six-month period ended June 30, 2016 compared to the six-month period ended June 30, 2015, partly offset by revenue earned due to increased calendar days by one day during the six-month period ended June 30, 2016 (182 calendar days) compared to the six-month period ended June 30, 2015 (181 calendar days).

Voyage Expenses

Voyage expenses were $1.0 million during the six-month periods ended June 30, 2016 and 2015. Voyage expenses mainly include (i) off-hire expenses of our vessels, mainly related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties in the amount of $1.8 million during the six-month periods ended June 30, 2016 and 2015, represent fees of 0.75% in the aggregate on voyage revenues charged to us by Costamare Shipping and Costamare Services, as provided under the Framework Agreement and Services Agreement, respectively.

Vessels' Operating Expenses

Vessels' operating expenses, which also includes the realized gain / (loss) under derivative contracts entered into in relation to foreign currency exposure, decreased by 12.2% or $7.3 million to $52.5 million during the six-month period ended June 30, 2016, from $59.8 million during the six-month period ended June 30, 2015.

General and Administrative Expenses

General and administrative expenses increased by 7.4% or $0.2 million, to $2.9 million during the six-month period ended June 30, 2016, from $2.7 million during the six-month period ended June 30, 2015. General and administrative expenses for the six-month periods ended June 30, 2016 and 2015 included $1.3 million which is part of the annual fee that Costamare Services receives based on the Services Agreement. Prior to November 2, 2015, this annual fee was charged by Costamare Shipping pursuant to the Group Management Agreement, which was effective from January 1, 2015 until November 2, 2015.

Management Fees – related parties

Management fees paid to our managers decreased by 1.0%, or $0.1 million, to $9.6 million during the six-month period ended June 30, 2016, from $9.7 million during the six-month period ended June 30, 2015. The decrease was attributable to the decreased average number of vessels during the six-month period ended June 30, 2016 compared to the six-month period ended June 30, 2015.

General and Administrative expenses – non-cash component

General and administrative expenses – non-cash component for the six-month period ended June 30, 2016 amounted to $2.7 million, representing the value of the shares issued to Costamare Services on March 31, 2016 and June 30, 2016, pursuant to the Services Agreement effected on November 2, 2015. For the six-month period ended June 30, 2015, the non-cash component of general and administrative expenses was $5.4 million, representing the value of shares issued to Costamare Shipping on March 31, 2015 and June 30, 2015, respectively, pursuant to the Group Management Agreement.

Amortization of Dry-docking and Special Survey Costs

Amortization of deferred dry-docking and special survey costs was $3.9 million for the six-month period ended June 30, 2016 and $3.6 million for the six-month period ended June 30, 2015. During the six-month period ended June 30, 2016, six vessels underwent and completed their special survey. During the six-month period ended June 30, 2015, three vessels underwent and completed their special survey.

Depreciation

Depreciation expense increased by 0.4%, or $0.2 million, to $50.6 million during the six-month period ended June 30, 2016, from $50.4 million during the six-month period ended June 30, 2015.

Amortization of Prepaid Lease Rentals

Amortization of the prepaid lease rentals was $2.5 million during the six-month periods ended June 30, 2016 and 2015.

Foreign Exchange Gains/ (Losses)

Foreign exchange losses were $0.2 million during the six-month period ended June 30, 2016. Foreign exchange gains were $0.2 million during the six-month period ended June 30, 2015.

Interest Income

Interest income amounted to $0.7 million for the six-month periods ended June 30, 2016 and 2015.

Interest and Finance Costs

Interest and finance costs decreased by 12.4%, or $5.2 million, to $36.7 million during the six-month period ended June 30, 2016, from $41.9 million during the six-month period ended June 30, 2015. The decrease was mainly attributable to the decreased average loan balance during the six-month period ended June 30, 2016 compared to the six-month period ended June 30, 2015.

Equity Loss on Investments

The equity loss on investments of $0.4 million for the six-month period ended June 30, 2016 represents our share of the net losses of nineteen jointly owned companies pursuant to the Framework Deed and is mainly attributable to the pre-delivery expenses charged to nine vessels that are currently under construction. We hold a range of 25% to 49% of the capital stock of these companies.

Gain / (Loss) on Derivative Instruments

The fair value of our 18 interest rate derivative instruments which were outstanding as of June 30, 2016 equates to the amount that would be paid by us or to us should those instruments be terminated. As of June 30, 2016, the fair value of these 18 interest rate derivative instruments in aggregate amounted to a liability of $54.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in OCI while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the six-month period ended June 30, 2016, a net loss of $3.0 million has been included in OCI and a net loss of $4.1 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 six-month period ended June 30, 2016.

Cash Flows

Six-month periods ended June 30, 2016 and 2015


Condensed cash flows	Six-month period ended June 30,
(Expressed in millions of U.S. dollars)	2015			2016
Net Cash Provided by Operating Activities	$	120.2		$	119.8
Net Cash Used in Investing Activities	$	(19.1	)	$	(14.2	)
Net Cash Used in Financing Activities	$	(54.3	)	$	(105.9	)

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities decreased by $0.4 million to $119.8 million for the six-month period ended June 30, 2016, compared to $120.2 million for the six-month period ended June 30, 2015. The decrease was mainly attributable to decreased cash from operations of $7.7 million and increased special survey costs of $3.2 million, partly offset by decreased payments for interest (including swap payments) of $3.8 million during the six-month period ended June 30, 2016 compared to the six-month period ended June 30, 2015.

Net Cash Used in Investing Activities

Net cash used in investing activities was $14.2 million in the six-month period ended June 30, 2016, which mainly consisted of (i) $11.0 million (net of $2.7 million we received as dividend distributions) in advance payments for the construction of two newbuild vessels, the acquisition of a secondhand vessel and working capital injection in certain entities pursuant to the Framework Deed and (ii) $1.6 million in payments for upgrades to one of our vessels.

Net cash used in investing activities was $19.1 million in the six-month period ended June 30, 2015, which mainly consisted of $17.3 million in advance payments for the construction of three newbuild vessels, ordered pursuant to the Framework Deed.

Net Cash Used in Financing Activities

Net cash used in financing activities was $105.9 million in the six-month period ended June 30, 2016, which mainly consisted of (a) $92.6 million of indebtedness that we repaid, (b) $7.1 million we repaid relating to our sale and leaseback agreements, (c) $39 million that we drew down from one of our credit facilities, (d) $43.8 million we paid for dividends to holders of our common stock for the fourth quarter of 2015 and first quarter of 2016 and (e) $1.9 million we paid for dividends to holders of our Series B Preferred Stock, $4.2 million we paid for dividends to holders of our Series C Preferred Stock and $4.4 million we paid for dividends to holders of our Series D Preferred Stock, for each of the periods from October 15, 2015 to January 14, 2016 and January 15, 2016 to April 14, 2016.

Net cash used in financing activities was $54.3 million in the six-month period ended June 30, 2015, which mainly consisted of (a) $98.7 million of indebtedness that we repaid, (b) $6.6 million we repaid relating to our sale and leaseback agreements, (c) $42.7 million we paid for dividends to holders of our common stock for the fourth quarter of 2014 and first quarter of 2015, (d) $1.9 million we paid for dividends to holders of our Series B Preferred Stock and $4.3 million we paid for dividends to holders of our Series C Preferred Stock, in both cases for each of the periods from October 15, 2014 to January 14, 2015 and January 15, 2015 to April 14, 2015 and (e) $96.6 million net proceeds we received from our public offering in May 2015 of 4.0 million shares of our Series D Preferred Stock, net of underwriting discounts and expenses incurred in the offering.

Change in the manner of presentation of certain items

Effective January 1, 2016, we changed the way we present in the statements of income the interest accrued and realized on non-hedging derivative instruments and have reclassified such from the Interest and Finance costs line item to Gain / (Loss) on derivative instruments, on the 2016 consolidated statements of income and their comparatives.

Liquidity and Capital Expenditures

Cash and cash equivalents

As of June 30, 2016, we had a total cash liquidity of $152.6 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of July 27, 2016, the following vessels were free of debt.

Unencumbered Vessels in the water

(refer to fleet list for full charter details)

Vessel Name	Year Built	TEU Capacity
NCP0152^(*)	2017	11,010
VENETIKO^(**)	2003	5,928
ITEA^(**)	1998	3,842
LAKONIA^(**)	2004	2,586
ELAFONISSOS^(*)	1999	2,526
AREOPOLIS^(**)	2000	2,474
MONEMVASIA^(*)	1998	2,472
MESSINI	1997	2,458
NEAPOLIS	2000	1,645
ARKADIA^(*)	2001	1,550

(*) Vessels ordered or acquired pursuant to the Framework Deed

(**) Vessels to serve as additional security in the Costamare facility

Capital commitments

As of July 27 2016, we had outstanding equity commitments relating to our ten contracted newbuilds aggregating approximately $15.8 million payable until the vessels are delivered. The amount represents our interest in the relevant jointly-owned entities under the Framework Deed and excludes approximately $43.5 million relating to our interest in the delivery installments of the last three 11,000TEU vessels on order.

Conference Call details:

On Thursday, July 28, 2016, at 8:30 a.m. ET, 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: 1-866-524-3160 (from the US), 0808 238 9064 (from the UK) or +1-412-317-6760 (from outside the US). Please quote "Costamare".

A replay of the conference call will be available until August 28, 2016. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088, and the access code required for the replay is: 10090298.

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 42 years of history in the international shipping industry and a fleet of 72 containerships, with a total capacity of approximately 467,000 TEU, including 10 newbuild containerships to be delivered. Eighteen of our containerships, including 10 newbuilds on order, have been acquired pursuant to the Framework Agreement with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company's common stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock trade on the New York Stock Exchange under the symbols "CMRE", "CMRE PR B", "CMRE PR C" and "CMRE PR D", respectively.

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".

Company Contacts:

Gregory Zikos - Chief Financial Officer
Konstantinos Tsakalidis - Business Development

Costamare Inc., Monaco
Tel: (+377) 93 25 09 40

Email: ir@costamare.com

Fleet List

The tables below provide additional information, as of July 27, 2016, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.

	Vessel Name	Charterer	Year Built	Capacity (TEU)	Time Charter Term⁽¹⁾	Current Daily Charter Rate (U.S. dollars)	Expiration of Charter⁽¹⁾	Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars)⁽²⁾
1	TRITON^()(**)	Evergreen	2016	14,424	10 years		March 2026
2	TITAN^()(**)	Evergreen	2016	14,424	10 years		April 2026
3	COSCO GUANGZHOU	COSCO	2006	9,469	12 years	36,400	December 2017	36,400
4	COSCO NINGBO	COSCO	2006	9,469	12 years	36,400	January 2018	36,400
5	COSCO YANTIAN	COSCO	2006	9,469	12 years	36,400	February 2018	36,400
6	COSCO BEIJING	COSCO	2006	9,469	12 years	36,400	April 2018	36,400
7	COSCO HELLAS	COSCO	2006	9,469	12 years	37,519	May 2018	37,519
8	MSC AZOV^(**)	MSC	2014	9,403	10 years	43,000	November 2023	43,000
9	MSC AJACCIO^(**)	MSC	2014	9,403	10 years	43,000	February 2024	43,000
10	MSC AMALFI^(**)	MSC	2014	9,403	10 years	43,000	March 2024	43,000
11	MSC ATHENS	MSC	2013	8,827	10 years	42,000	January 2023	42,000
12	MSC ATHOS	MSC	2013	8,827	10 years	42,000	February 2023	42,000
13	VALOR	Evergreen	2013	8,827	7.0 years⁽ⁱ⁾	41,700	April 2020⁽ⁱ⁾	41,700
14	VALUE	Evergreen	2013	8,827	7.0 years⁽ⁱ⁾	41,700	April 2020⁽ⁱ⁾	41,700
15	VALIANT	Evergreen	2013	8,827	7.0 years⁽ⁱ⁾	41,700	June 2020⁽ⁱ⁾	41,700
16	VALENCE	Evergreen	2013	8,827	7.0 years⁽ⁱ⁾	41,700	July 2020⁽ⁱ⁾	41,700
17	VANTAGE	Evergreen	2013	8,827	7.0 years⁽ⁱ⁾	41,700	September 2020⁽ⁱ⁾	41,700
18	NAVARINO	PIL	2010	8,531	1.0 year	10,500	November 2016⁽ⁱⁱ⁾	10,500
19	MAERSK KAWASAKI⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk	1997	7,403	10 years	37,000	December 2017	37,000
20	MAERSK KURE⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk	1996	7,403	10 years	37,000	December 2017	37,000
21	MAERSK KOKURA⁽ⁱⁱⁱ⁾	A.P. Moller-Maersk	1997	7,403	10 years	37,000	February 2018	37,000
22	MSC METHONI	MSC	2003	6,724	10 years	29,000	September 2021	29,000
23	SEALAND NEW YORK	A.P. Moller-Maersk	2000	6,648	11 years	26,100	March 2018	26,100
24	MAERSK KOBE	A.P. Moller-Maersk	2000	6,648	11 years	26,100	May 2018	26,100
25	SEALAND WASHINGTON	A.P. Moller-Maersk	2000	6,648	11 years	26,100	June 2018	26,100
26	SEALAND MICHIGAN	A.P. Moller-Maersk	2000	6,648	11 years	26,100	August 2018	26,100
27	SEALAND ILLINOIS	A.P. Moller-Maersk	2000	6,648	11 years	26,100	October 2018	26,100
28	MSC KOLKATA	A.P. Moller-Maersk	2003	6,644	11 years	26,100	November 2019	26,100
29	MSC KINGSTON	A.P. Moller-Maersk	2003	6,644	11 years	26,100	February 2020	26,100
30	MSC KALAMATA	A.P. Moller-Maersk	2003	6,644	11 years	26,100	April 2020	26,100
31	VENETIKO		2003	5,928
32	ENSENADA EXPRESS^(*)		2001	5,576
33	MSC ROMANOS	MSC	2003	5,050	5.3 years	28,000	November 2016	28,000
34	ZIM NEW YORK	ZIM	2002	4,992	14 years	14,534	September 2017⁽⁴⁾
35	ZIM SHANGHAI	ZIM	2002	4,992	14 years	14,534	September 2017⁽⁴⁾
36	ZIM PIRAEUS	ZIM	2004	4,992	10 years	12,500⁽⁵⁾	December 2016	5,532
37	OAKLAND EXPRESS	Hapag Lloyd	2000	4,890	8.0 years	30,500⁽⁶⁾	November 2016	28,051

Vessel Name

Charterer

Year Built

Capacity (TEU)

Time Charter Term⁽¹⁾

Current Daily Charter Rate (U.S. dollars)

Expiration of Charter⁽¹⁾

Average Daily Charter Rate Until Earliest Expiry of Charter (U.S. dollars)⁽²⁾

38	HALIFAX EXPRESS	Hapag Lloyd	2000	4,890	8.0 years	30,500⁽⁷⁾	November 2016	28,754
39	SINGAPORE EXPRESS	Hapag Lloyd	2000	4,890	8.0 years	6,300	November 2016	6,300
40	MSC MANDRAKI	MSC	1988	4,828	7.8 years	20,000	August 2017	20,000
41	MSC MYKONOS	MSC	1988	4,828	8.2 years	20,000	September 2017	20,000
42	MSC ULSAN	MSC	2002	4,132	5.3 years	16,500	March 2017	16,500
43	MSC KORONI	MSC	1998	3,842	9.5 years	13,500⁽⁸⁾	September 2018	13,500
44	ITEA	ACL	1998	3,842	0.2 years	6,250	September 2016	6,250
45	KARMEN	Evergreen	1991	3,351	1.9 years	6,500	July 2016	6,500
46	MARINA	Evergreen	1992	3,351	0.8 years	6,000	August 2016	6,000
47	LAKONIA	Evergreen	2004	2,586	2.0 years	8,600	February 2017	8,600
48	ELAFONISOS^(*)		1999	2,526
49	AREOPOLIS	Evergreen	2000	2,474	0.5 years	5,950	August 2016	5,950
50	MONEMVASIA^(*)(iv)	A.P. Moller-Maersk	1998	2,472	0.8 years	8,750	November 2016	8,750
51	MESSINI	Evergreen	1997	2,458	3.3 years	6,000	August 2016	6,000
52	MSC REUNION	MSC	1992	2,024	9.0 years	11,200⁽⁹⁾	July 2017	7,174
53	MSC NAMIBIA II	MSC	1991	2,023	9.8 years	11,200⁽¹⁰⁾	July 2017	6,878
54	MSC SIERRA II	MSC	1991	2,023	8.7 years	6,800	June 2017	6,800
55	MSC PYLOS	MSC	1991	2,020	6.0 years	6,300	January 2017	6,300
56	PADMA^(*)	Yang Ming	1998	1,645	1.2 years	7,250	August 2016	7,250
57	NEAPOLIS	Evergreen	2000	1,645	0.5 years	6,900	January 2017	6,900
58	ARKADIA^(*)	Evergreen	2001	1,550	2.0 years	10,600	August 2017	10,600
59	PROSPER	Evergreen	1996	1,504	0.3 years	6,600	August 2017	6,600
60	ZAGORA	MSC	1995	1,162	5.8 years	6,300	June 2017	6,300
61	PETALIDI^(*)	CMA CGM	1994	1,162	2.0 years	7,600	August 2016	7,600
62	STADT LUEBECK	CMA CGM	2001	1,078	2.7 years	8,000⁽¹¹⁾	August 2016	8,000

Newbuilds

	Vessel Name	Shipyard	Capacity (TEU)	Charterer	Expected Delivery⁽³⁾
1	NCP0113^(*)	Hanjin Subic Bay	11,010		Q3 2016
2	NCP0114^(*)	Hanjin Subic Bay	11,010		Q3 2016
3	NCP0115^(*)	Hanjin Subic Bay	11,010		Q4 2016
4	NCP0116^(*)	Hanjin Subic Bay	11,010		Q4 2016
5	NCP0152^(*)	Hanjin Subic Bay	11,010		Q1 2017
6	S2123^{() (**)}	Samsung Heavy	14,424	Evergreen	Q3 2016
7	S2124^{() (**)}	Samsung Heavy	14,424	Evergreen	Q4 2016
8	S2125^{() (**)}	Samsung Heavy	14,424	Evergreen	Q4 2016
9	YZJ1206^{() (**)}	Jiangsu New Yangzi	3,800	Hamburg Süd	Q1 2018
10	YZJ1207^{() (**)}	Jiangsu New Yangzi	3,800	Hamburg Süd	Q2 2018

(1)	Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.

(2)	This average rate is calculated based on contracted charter rates for the days remaining between July 27, 2016 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)	Based on latest shipyard production schedule, subject to change.

(4)

The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under the 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of Zim's equity and approximately $8.2 million in interest bearing notes maturing in 2023. In July the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for one year pursuant to its option to extend the charter of two of the three vessels chartered to Zim for successive one year periods at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for the first year has been determined at $14,534 per day. The Company exercised its option for a second year of extension.

(5)	This charter rate changes on August 1, 2016 to $5,350 per day until the earliest redelivery date.

(6)	This charter rate changes on September 8, 2016 to $6,300 per day until the earliest redelivery date.

(7)	This charter rate changes on October 25, 2016 to $6,300 per day until the earliest redelivery date.

(8)

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.

(9)	This charter rate changes on August 27, 2016 to $6,800 per day until the earliest redelivery date.

(10)	This charter rate changes on August 2, 2016 to $6,800 per day until the earliest redelivery date.

(11)	The charter rate will be $8,000 per day provided that the vessel trades within the Red Sea once every 20 days, while it will change to $7,400 for non-Red Sea trading. As of July 27, 2016, the vessel was earning $8,000 per day.

(i)	Assumes exercise of owner's unilateral options to extend the charter of these vessels for two one year periods at the same charter rate. The charterer also has corresponding options to unilaterally extend the charter for the same periods at the same charter rate.

(ii)	The charterer has a unilateral option to extend the charter of the vessel for a period of 12 months.

(iii)

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.

(iv)	We have entered into a five year charter agreement with Maersk upon the expiry of the current charter agreement, at a rate of $9,250 daily.

(*)	Denotes vessels acquired pursuant to the Framework Deed with York. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.

(**) Denotes vessels subject to a sale and leaseback transaction

(***) Denotes vessels acquired pursuant to the Framework Deed which are subject to sale and leaseback transactions.

COSTAMARE INC.

Consolidated Statements of Income

	Six-months ended June 30,						Three-months ended June 30,
(Expressed in thousands of U.S. dollars, except share and per share amounts)	2015			2016			2015			2016


REVENUES:
Voyage revenue	$	244,069		$	239,799		$	123,219		$	119,525

EXPENSES:
Voyage expenses		(1,028	)		(1,040	)		(392	)		(468	)
Voyage expenses – related parties		(1,829	)		(1,798	)		(924	)		(896	)
Vessels' operating expenses		(59,780	)		(52,459	)		(30,229	)		(25,468	)
General and administrative expenses		(2,682	)		(2,868	)		(1,367	)		(1,642	)
Management fees - related parties		(9,690	)		(9,570	)		(4,872	)		(4,785	)
General and administrative expenses – non-cash component		(5,383	)		(2,746	)		(2,749	)		(1,402	)
Amortization of dry-docking and special survey costs		(3,583	)		(3,940	)		(1,758	)		(2,006	)
Depreciation		(50,411	)		(50,569	)		(25,345	)		(25,288	)
Amortization of prepaid lease rentals		(2,470	)		(2,477	)		(1,242	)		(1,239	)
Foreign exchange gains / (losses)		230			(229	)		(60	)		(105	)
Operating income	$	107,443		$	112,103		$	54,281		$	56,226

OTHER INCOME / (EXPENSES):
Interest income	$	732		$	737		$	294		$	376
Interest and finance costs		(41,870	)		(36,676	)		(19,363	)		(17,770	)
Equity gain / (loss) on investments		(47	)		(405	)		148			(198	)
Other		305			538			27			40
Gain /(Loss) on derivative instruments		4,050			(4,259	)		8,942			(1,632	)
Total other income / (expenses)	$	(36,830	)	$	(40,065	)	$	(9,952	)	$	(19,184	)
Net Income	$	70,613		$	72,038		$	44,329		$	37,042
Earnings allocated to Preferred Stock		(7,313	)		(10,473	)		(4,303	)		(5,266	)
Net Income available to common stockholders	$	63,300		$	61,565		$	40,026		$	31,776


Earnings per common share, basic and diluted	$	0.85		$	0.82		$	0.53		$	0.42
Weighted average number of shares, basic and diluted		74,876,866			75,474,844			74,951,244			75,549,644

COSTAMARE INC.

Consolidated Balance Sheets

	As of December 31,			As of June 30,
(Expressed in thousands of U.S. dollars)	2015			2016
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	100,105		$	99,739
Restricted cash		14,007			6,138
Accounts receivable		1,111			2,200
Inventories		10,578			10,774
Due from related parties		6,012			3,747
Fair value of derivatives		352			194
Insurance claims receivable		3,906			5,946
Prepaid lease rentals		4,982			4,975
Accrued charter revenue		457			456
Prepayments and other		3,546			4,187
Total current assets	$	145,056		$	138,356
FIXED ASSETS, NET:
Capital leased assets	$	242,966		$	239,196
Vessels, net		2,004,650			1,960,465
Total fixed assets, net	$	2,247,616		$	2,199,661
NON-CURRENT ASSETS:
Investment in affiliates	$	117,931		$	129,241
Prepaid lease rentals, non-current		35,829			33,359
Deferred charges, net		22,809			24,737
Accounts receivable, non-current		1,425			1,425
Restricted cash		48,708			46,741
Accrued charter revenue		569			391
Other non-current assets		12,612			12,762
Total assets	$	2,632,555		$	2,586,673
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (*)	$	183,828		$	188,116
Accounts payable		4,047			5,285
Due to related parties		371			232
Capital lease obligations (*)		14,307			14,790
Accrued liabilities		15,225			16,111
Unearned revenue		18,356			15,618
Fair value of derivatives		32,462			36,174
Other current liabilities		1,712			1,641
Total current liabilities	$	270,308		$	277,967
NON-CURRENT LIABILITIES
Long-term debt, net of current portion (*)	$	1,134,764		$	1,076,936
Capital lease obligations, net of current portion (*)		217,810			210,315
Fair value of derivatives, net of current portion		19,655			18,070
Unearned revenue, net of current portion		26,508			22,405
Total non-current liabilities	$	1,398,737		$	1,327,726
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock	$	-		$	-
Common stock		8			8
Additional paid-in capital		963,904			966,651
Retained earnings		44,247			61,980
Accumulated other comprehensive loss		(44,649	)		(47,659	)
Total stockholders' equity	$	963,510		$	980,980
Total liabilities and stockholders' equity	$	2,632,555		$	2,586,673

(*) Amounts net of deferred financing costs

Financial Summary


	Six-month period ended June 30,					Three-month period ended June 30,
(Expressed in thousands of U.S. dollars, except share and per share data):	2015		2016			2015		2016


Voyage revenue	$	244,069	$	239,799		$	123,219	$	119,525
Accrued charter revenue (1)	$	1,386	$	(2,067	)	$	759	$	(1,615	)
Voyage revenue adjusted on a cash basis (2)	$	245,455	$	237,732		$	123,978	$	117,910

Adjusted EBITDA (3)	$	173,328	$	169,223		$	87,293	$	83,949

Adjusted Net Income available to common stockholders (3)	$	63,010	$	63,959		$	34,381	$	31,891
Weighted Average number of shares		74,876,866		75,474,844			74,951,244		75,549,644
Adjusted Earnings per share (3)	$	0.84	$	0.85		$	0.46	$	0.42

EBITDA (3)	$	168,215	$	164,963		$	91,743	$	82,969
Net Income	$	70,613	$	72,038		$	44,329	$	37,042
Net Income available to common stockholders	$	63,300	$	61,565		$	40,026	$	31,776
Weighted Average number of shares		74,876,866		75,474,844			74,951,244		75,549,644
Earnings per share	$	0.85	$	0.82		$	0.53	$	0.42

(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.

(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 ("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 available to common stockholders, 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 available to common stockholders to EBITDA and adjusted EBITDA below.

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 six-month periods ended June 30, 2016 and 2015. 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, (iii) Adjusted Earnings per share, (iv) EBITDA and (v) Adjusted EBITDA.

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


	Six-month period ended June 30,						Three-month period ended June 30,
(Expressed in thousands of U.S. dollars, except share and per share data)	2015			2016			2015			2016

Net Income	$	70,613		$	72,038		$	44,329		$	37,042
Earnings allocated to Preferred Stock		(7,313	)		(10,473	)		(4,303	)		(5,266	)
Net Income available to common stockholders		63,300			61,565			40,026			31,776
Accrued charter revenue		1,386			(2,067	)		759			(1,615	)
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments		440			-			60			-
General and administrative expenses – non-cash component		5,383			2,746			2,749			1,402
Amortization of prepaid lease rentals		2,470			2,477			1,242			1,239
Realized Loss / (Gain) on Euro/USD forward contracts (1)		1,954			(678	)		924			(439	)
Gain on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1)		(11,923	)		(84	)		(11,379	)		(472	)
Adjusted Net income available to common stockholders	$	63,010		$	63,959		$	34,381		$	31,891
Adjusted Earnings per Share	$	0.84		$	0.85		$	0.46		$	0.42
Weighted average number of shares		74,876,866			75,474,844			74,951,244			75,549,644

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent net income after earnings allocated to preferred stock, but before non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized loss / (gain) on Euro/USD forward contracts, unrealized loss from a swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, General and administrative expenses – non-cash component, amortization of prepaid lease rentals and non-cash changes in fair value of derivatives. "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 are reflected as deductions to adjusted net income. Charges negatively impacting net income are reflected as increases to adjusted net income.

Reconciliation of Net Income to EBITDA and Adjusted EBITDA


	Six-month period ended June 30,						Three-month period ended June 30,
(Expressed in thousands of U.S. dollars)	2015			2016			2015			2016


Net Income	$	70,613		$	72,038		$	44,329		$	37,042
Interest and finance costs		41,870			36,676			19,363			17,770
Interest income		(732	)		(737	)		(294	)		(376	)
Depreciation		50,411			50,569			25,345			25,288
Amortization of prepaid lease rentals		2,470			2,477			1,242			1,239
Amortization of dry-docking and special survey costs		3,583			3,940			1,758			2,006
EBITDA		168,215			164,963			91,743			82,969
Accrued charter revenue		1,386			(2,067	)		759			(1,615	)
Unrealized loss from swap option agreement held by a jointly owned company with York included in equity loss on investments		440			-			60			-
General and administrative expenses – non-cash component		5,383			2,746			2,749			1,402
Realized Loss / (Gain) on Euro/USD forward contracts (1)		1,954			(678	)		924			(439	)
(Gain)/Loss on derivative instruments, including interest accrued and realized on non-hedging derivative instruments (1)		(4,050	)		4,259			(8,942	)		1,632
Adjusted EBITDA	$	173,328		$	169,223		$	87,293		$	83,949

EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease rentals, depreciation and amortization of deferred dry-docking and special survey costs. Adjusted EBITDA represents net income before interest and finance costs, interest income, amortization of prepaid lease rentals, depreciation, amortization of deferred dry-docking and special survey costs, non-cash "Accrued charter revenue" recorded under charters with escalating charter rates, realized loss / (gain) on Euro/USD forward contracts, unrealized loss from swap option agreement held by a jointly owned company with York, which is included in equity loss on investments, General and administrative expenses – non-cash component and non-cash changes in fair value of derivatives. "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. 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.

(1) Items to consider for comparability include gains and charges. Gains positively impacting net income are reflected as deductions to adjusted EBITDA. Charges negatively impacting net income are reflected as increases to adjusted EBITDA.