6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2021

Commission File Number: 001-34934

COSTAMARE INC.
(Translation of registrant’s name into English)

7 rue du Gabian, MC 98000 Monaco
 (Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F     ☒          Form 40-F     ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

INCORPORATION BY REFERENCE

Exhibit 99.1 to this Report on Form 6-K shall be incorporated by reference into our registration statements on Form F-3, as filed with the U.S. Securities and Exchange Commission  on July 6, 2016 (File No. 333-212415) and March 15, 2021 (File No. 333-254266) to the extent not superseded by information subsequently filed or furnished (to the extent we expressly state that we incorporate such furnished information by reference) by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

EXHIBIT INDEX

99.1	Unaudited interim condensed consolidated financial statements of Costamare Inc. for the six-month period ended June 30, 2021, and the accompanying notes.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
99.2	First Amended and Restated Restrictive Covenant Agreement, dated July 1, 2021
99.3	Amended and Restated Services Agreement, dated June 28, 2021
99.4	Amended and Restated Framework Agreement, dated June 28, 2021

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  August 10, 2021

COSTAMARE INC.
By:	/s/ Gregory G. Zikos
Name:	Gregory G. Zikos
Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

COSTAMARE INC.

Condensed Consolidated Balance Sheets             

As of December 31, 2020 and June 30, 2021

(Expressed in thousands of U.S. dollars)

	December 31, 2020			June 30, 2021
ASSETS				(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents (Note 1)	$	143,922		$	279,055
Restricted cash (Note 1)		4,998			6,980
Accounts receivable, net		8,249			7,063
Inventories (Note 6)		10,455			13,909
Due from related parties (Note 3)		1,623			535
Fair value of derivatives (Notes 19 and 20)		460			-
Insurance claims receivable		883			804
Time charter assumed (Note 13)		191			198
Investment in equity securities (Note 5)		-			54,895
Prepayments and other assets		8,853			6,610
Vessels held for sale (Note 7)		12,416			61,389
Total current assets		192,050			431,438
FIXED ASSETS, NET:
Right-of-use assets (Note 12)		199,098			195,233
Vessels and advances, net (Note 7)		2,450,510			3,169,135
Total fixed assets, net		2,649,608			3,364,368
OTHER NON-CURRENT ASSETS:
Equity method investments (Notes 2 and 10)		78,227			27,154
Accounts receivable, net, non-current (Note 3)		3,896			3,326
Deferred charges, net (Note 8)		27,682			34,761
Restricted cash, non-current (Note 1)		42,976			62,896
Time charter assumed, non-current (Note 13)		839			767
Fair value of derivatives, non-current (Notes 19 and 20)		-			70
Debt securities, held to maturity (Net of allowance for credit losses of $569 as of December 31, 2020) (Note 5)		6,813			-
Other non-current assets (Note 5)		8,425			3,418
Total assets	$	3,010,516		$	3,928,198
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net of deferred financing costs (Note 11)	$	147,137		$	210,610
Accounts payable		7,582			14,360
Due to related parties (Note 3)		432			1,768
Finance lease liabilities, net (Note 12)		16,495			16,584
Accrued liabilities		17,621			20,142
Unearned revenue (Note 13)		11,893			11,824
Fair value of derivatives (Notes 19 and 20)		3,440			8,686
Other current liabilities (Note 3 and Note 10)		2,374			56,818
Total current liabilities		206,974			340,792
NON-CURRENT LIABILITIES:
Long-term debt, net of current portion and deferred financing costs (Note 11)		1,305,076			1,968,401
Finance lease liabilities, net of current portion (Note 12)		116,366			108,063
Fair value of derivatives, non-current portion (Notes 19 and 20)		3,653			3,483
Unearned revenue, net of current portion (Note 13)		29,627			31,774
Total non-current liabilities		1,454,722			2,111,721
COMMITMENTS AND CONTINGENCIES (Note 14)		-			-
STOCKHOLDERS’ EQUITY:
Preferred stock (Note 15)		-			-
Common stock (Note 15)		12			12
Additional paid-in capital (Note 15)		1,366,486			1,375,559
Retained earnings / (Accumulated deficit)		(9,721	)		109,019
Accumulated other comprehensive loss (Notes 19 and 21)		(7,957	)		(8,905	)
Total stockholders’ equity		1,348,820			1,475,685
Total liabilities and stockholders’ equity	$	3,010,516		$	3,928,198

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

1

COSTAMARE INC.

Unaudited Condensed Consolidated Statements of Operations 

For the six-month periods ended June 30, 2020 and 2021

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

	For the six-month period ended June 30,
	2020			2021
REVENUES:
Voyage revenue	$	233,273		$	293,495
EXPENSES:
Voyage expenses		(4,071	)		(3,071	)
Voyage expenses-related parties (Note 3)		(3,062	)		(4,301	)
Vessels’ operating expenses		(54,758	)		(69,600	)
General and administrative expenses		(1,751	)		(2,459	)
General and administrative expenses – related parties (Note 3)		(3,515	)		(4,457	)
Management fees-related parties (Note 3)		(10,521	)		(11,786	)
Amortization of dry-docking and special survey costs (Note 8)		(4,537	)		(4,847	)
Depreciation (Notes 7, 12 and 21)		(55,737	)		(58,726	)
Gain on sale of vessels, net (Note 7)		10			1,406
Loss on vessels held for sale (Note 7)		(79,197	)		-
Vessels’ impairment loss (Notes 7 and 8)		(31,577	)		-
Foreign exchange gains / (losses), net		(207	)		146
Operating income / (loss)		(15,650	)		135,800
OTHER INCOME / (EXPENSES):
Interest income		1,087			1,489
Interest and finance costs (Note 17)		(35,367	)		(36,548	)
Income from equity method investments (Note 10)		8,241			4,951
Fair value measurement of equity securities (Note 5)		-			51,094
Other, net		308			2,983
Loss on derivative instruments, net (Note 19)		(2,066	)		(1,012	)
Total other income / (expenses), net		(27,797	)		22,957
Net Income / (Loss)	$	(43,447	)	$	158,757
Earnings allocated to Preferred Stock (Note 16)		(15,461	)		(15,448	)
Gain on retirement of Preferred Stock (Note 16)		619			-
Net income / (Loss) available to Common Stockholders		(58,289	)		143,309
Earnings / (losses) per common share, basic and diluted (Note 16)	$	(0.49	)	$	1.17
Weighted average number of shares, basic and diluted (Note 16)		119,927,560			122,615,427

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

2

COSTAMARE INC.

Unaudited Condensed Consolidated Statements of Comprehensive Income / (Loss)

For the six-month periods ended June 30, 2020 and 2021

(Expressed in thousands of U.S. dollars)

	For the six-month period ended June 30,
	2020			2021
Net income / (loss) for the period	$	(43,447	)	$	158,757
Other comprehensive income:
Unrealized gain / (loss) on cash flow hedges, net (Notes 19 and 21)		(8,114	)		17
Effective portion of changes in fair value of cash flow hedges (Note 19 and 21)		-			(996	)
Amounts reclassified from Net settlements on interest rate swaps qualifying for hedge accounting to Depreciation (Note 21)		31			31
Other comprehensive loss for the period	$	(8,083	)	$	(948	)
Total comprehensive income / (loss) for the period	$	(51,530	)	$	157,809

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

3

COSTAMARE INC.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity              

For the six-month periods ended June 30, 2020 and 2021

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

	Preferred Stock (Series E)					Preferred Stock (Series D)					Preferred Stock (Series C)					Preferred Stock (Series B)					Common Stock
	# of shares			Par value		# of shares			Par value		# of shares			Par value		# of shares			Par value		# of shares		Par value		Additional Paid-in Capital			Accumulated Other Comprehensive Income / (Loss)			Retained Earnings/ (Accumulated Deficit)			Total
BALANCE, January 1, 2020		4,600,000		$	-		4,000,000		$	-		4,000,000		$	-		2,000,000		$	-		119,132,696	$	12	$	1,351,352		$	(1,214	)	$	60,578		$	1,410,728
- Net loss		-			-		-			-		-			-		-			-		-		-		-			-			(43,447	)		(43,447	)
- Adoption of new accounting policy (Note 5)		-			-		-			-		-			-		-			-		-		-		-			-			(543	)		(543	)
- Issuance of common stock (Notes 3 and 15)		-			-		-			-		-			-		-			-		1,568,644		-		9,591			-			-			9,591
-Retirement of Preferred Stock (Note 15)		(25,900	)		-		(13,458	)		-		(26,865	)		-		(29,351	)		-		-		-		(2,303	)		-			619			(1,684	)
- Dividends - Common stock (Note 15)		-			-		-			-		-			-		-			-		-		-		-			-			(23,905	)		(23,905	)
- Dividends - Preferred stock (Note 15)		-			-		-			-		-			-		-			-		-		-		-			-			(15,591	)		(15,591	)
- Other comprehensive loss		-			-		-			-		-			-		-			-		-		-		-			(8,083	)		-			(8,083	)
BALANCE, June 30, 2020		4,574,100		$	-		3,986,542		$	-		3,973,135		$	-		1,970,649		$	-		120,719,340	$	12	$	1,358,640		$	(9,297	)	$	(22,289	)	$	1,327,066
BALANCE, January 1, 2021		4,574,100		$	-		3,986,542		$	-		3,973,135		$	-		1,970,649		$	-		122,160,638	$	12	$	1,366,486		$	(7,957	)	$	(9,721	)	$	1,348,820
- Net income		-			-		-			-		-			-		-			-		-		-		-			-			158,757			158,757
- Issuance of common stock (Notes 3 and 15)		-			-		-			-		-			-		-			-		937,523		-		8,987			-			-			8,987
- Dividends - Common stock (Note 15)		-			-		-			-		-			-		-			-		-		-		-			-			(24,483	)		(24,483	)
- Dividends - Preferred stock (Note 15)		-			-		-			-		-			-		-			-		-		-		-			-			(15,534	)		(15,534	)
-Gain from common control transaction (Note 3)		-			-		-			-		-			-		-			-		-		-		86			-			-			86
- Other comprehensive loss		-			-		-			-		-			-		-			-		-		-		-			(948	)		-			(948	)
BALANCE, June 30, 2021		4,574,100		$	-		3,986,542		$	-		3,973,135		$	-		1,970,649		$	-		123,098,161	$	12	$	1,375,559		$	(8,905	)	$	109,019		$	1,475,685

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

4

COSTAMARE INC.

Unaudited Condensed Consolidated Statements of Cash Flows         

For the six-month periods ended June 30, 2020 and 2021

(Expressed in thousands of U.S. dollars)

	For the six-month period ended June 30,
	2020			2021
Cash Flows From Operating Activities:
Net income / (loss):	$	(43,447	)	$	158,757
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:
Depreciation		55,737			58,726
Credit loss provision		-			(324	)
Amortization of debt discount		(453	)		(1,280	)
Amortization and write-off of financing costs		1,944			2,498
Amortization of deferred dry-docking and special survey costs		4,537			4,847
Amortization of assumed time charter		95			(345	)
Fair value measurement of equity securities		-			(51,094	)
Equity based payments		1,508			3,207
Loss on derivative instruments, net		2,066			1,012
Gain on sale of vessels, net		(10	)		(1,406	)
Loss on vessels held for sale		79,197			-
Vessels impairment loss		31,577			-
Income from equity method investments		(8,241	)		(4,951	)
Changes in operating assets and liabilities:
Accounts receivable		209			2,837
Due from related parties		5,248			3,014
Inventories		(823	)		(2,461	)
Insurance claims receivable		(863	)		(709	)
Prepayments and other		(2,948	)		3,452
Accounts payable		(1,207	)		5,134
Due to related parties		(134	)		1,335
Accrued liabilities		7,717			5,240
Unearned revenue		(384	)		(1,307	)
Other current liabilities		453			(681	)
Dividend from equity method investees		9,689			-
Dry-dockings		(10,023	)		(12,456	)
Accrued charter revenue		7,721			2,146
Net Cash provided by Operating Activities		139,165			175,191
Cash Flows From Investing Activities:
Return of capital from equity method investments		31,873			-
Debt securities capital redemption		-			8,183
Proceeds from the settlement of insurance claims		1,478			808
Cash acquired through asset acquisition		-			43,684
Vessel acquisition and advances/Additions to vessel cost		(39,750	)		(350,893	)
Proceeds from the sale of vessels, net		7,957			16,759
Net Cash provided by / (used in) Investing Activities		1,558			(281,459	)
Cash Flows From Financing Activities:
Proceeds from long-term debt and finance leases		240,000			765,395
Repayment of long-term debt and finance leases		(340,483	)		(455,966	)
Payment of financing costs		(1,916	)		(11,890	)
Retirement of preferred stock		(1,684	)		-
Dividends paid		(31,414	)		(34,236	)
Net Cash provided by / (used in) Financing Activities		(135,497	)		263,303
Net increase in cash, cash equivalents and restricted cash		5,226			157,035
Cash, cash equivalents and restricted cash at beginning of the period		195,871			191,896
Cash, cash equivalents and restricted cash at end of the period	$	201,097		$	348,931
Supplemental Cash Information:
Cash paid during the period for interest, net of capitalized interest	$	33,316		$	32,293
Non-Cash Investing and Financing Activities:
Dividend reinvested in common stock of the Company	$	8,083		$	5,781

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.      

5

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

1. Basis of Presentation and General Information:

The accompanying consolidated financial statements include the accounts of Costamare Inc. (“Costamare”) and its wholly-owned subsidiaries (collectively, the “Company”). Costamare is organized under the laws of the Republic of the Marshall Islands.

On November 4, 2010, Costamare completed its initial public offering (“Initial Public Offering”) in the United States under the United States Securities Act of 1933, as amended (the “Securities Act”). During the six-month period ended June 30, 2021, the Company issued 299,200 shares to Costamare Shipping Services Ltd. (“Costamare Services”) (Note 3). On July 6, 2016, the Company implemented a dividend reinvestment plan (the “Plan”) (Note 15). As of June 30, 2021, under the Plan, the Company has issued to its common stockholders 16,025,546 shares, in aggregate. As of June 30, 2021, the aggregate issued share capital was 123,098,161 common shares. At June 30, 2021, members of the Konstantakopoulos Family owned, directly or indirectly, approximately 56.1% of the outstanding common shares, in the aggregate.

As of June 30, 2021, the Company owned and/or operated a fleet of 74 container vessels with a total carrying capacity of approximately 554,979 twenty-foot equivalent units (“TEU”) and three dry-bulk vessels with a total carrying capacity of approximately 172,022 of dead-weight tonnage (“DWT”), through wholly-owned subsidiaries. As of December 31, 2020, the Company owned and/or operated a fleet of 61 container vessels with a total carrying capacity of approximately 435,612 TEU. The Company provides worldwide marine transportation services by chartering its container vessels to some of the world’s leading liner operators under long-, medium- and short-term time charters and since June 14, 2021 (Note 3(d)) expanded its activities into the dry bulk sector. As of June 30, 2021 the Company had agreed to purchase, 29 dry bulk vessels out of which three vessels with a carrying capacity of approximately 172,022 DWT were delivered to the Company  and subsequently chartered to international operators (Note 3(d) and 7).

At June 30, 2021, Costamare had 133 wholly-owned subsidiaries incorporated in the Republic of Liberia, 12 incorporated in the Republic of the Marshall Islands and one incorporated in the Republic of Cyprus.

Revenues for the six-month periods ended June 30, 2020 and 2021, derived from significant charterers individually accounting for 10% or more of revenues (in percentages of total revenues) were as follows:

	2020			2021
A		21	%		18	%
B		22	%		21	%
C		12	%		14	%
D		35	%		15	%
E		7	%		13	%
Total		97	%		81	%

The reconciliation of the cash, cash equivalents and restricted cash at end of six-month periods ended June 30, 2020 and 2021 is presented in the table below:

	2020		2021
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents		155,668		279,055
Restricted cash – current portion		6,592		6,980
Restricted cash – non-current portion		38,837		62,896
Total cash, cash equivalents and restricted cash	$	201,097	$	348,931

6

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by U.S. GAAP for annual financial statements. These statements and the accompanying notes should be read in conjunction with the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on March 1, 2021.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. Operating results for the six-month period ended June 30, 2021, are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2021.

The outbreak of the COVID-19 virus has had a negative effect on the global economy and, during the first half of 2020, adversely impacted the international container shipping industry. From the onset of the outbreak through most of the second quarter of 2020, time charter rates for container vessels had a sizable drop. However, since June 2020, time charter rates across all sizes of container vessels have improved significantly due to the increased demand for containerized goods coupled with inefficiencies in the global supply chain caused by the pandemic. The Company will continue to monitor the development of the COVID-19 pandemic and its potential direct or indirect negative effects on the containership and dry bulk markets and will provide further updates on the situation if market circumstances warrant it.

The Company will continue monitoring the situation and will evaluate any future estimates and assumptions that require increased judgment when needed.

2. Significant Accounting Policies and Recent Accounting Pronouncements:

A discussion of the Company’s significant accounting policies can be found in Note 2 of the Company’s Consolidated Financial Statements included in the Annual Report on Form 20-F for the year ended December 31, 2020. There have been no material changes to these policies in the six-month period ended June 30, 2021, except for as discussed below:

Significant accounting policies:

(i) Vessels, Net: Vessels are stated at cost, which consists of the contract price and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site supervision costs incurred during the construction periods). Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred.

The cost of each of the Company’s vessels is depreciated from the date of acquisition on a straight-line basis over the vessel’s remaining estimated economic useful life, after considering the estimated residual value, which is equal to the product of vessels’ lightweight tonnage and estimated scrap rate.

Management estimates the useful life of the Company’s container and dry bulk vessels to be 30 and 25 years, respectively, from the date of initial delivery from the shipyard and the estimated scrap rate used to calculate the vessels’ (both container and dry bulk vessels) salvage value is $0.300 per lightweight ton. Secondhand container and dry bulk vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

If the estimated economic lives assigned to the Company’s vessels prove to be too long because of unforeseen events such as an extended period of weak markets, the broad imposition of age restrictions by the Company’s customers’, new regulations, or other future events, the remaining estimated useful life of any affected vessel is adjusted accordingly.

(ii) Impairment of Long-lived Assets: The Company reviews its vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel might not be recoverable. The Company considers information, such as vessel sales and purchases, business plans and overall market conditions in order to determine if an impairment might exist.

If the Company determines that an impairment indicator is present, or if circumstances indicate that an impairment may exist, the Company then performs an analysis to determine whether an impairment loss should be recognized. The Company proceeds to Step 1 of the impairment analysis whereby it computes estimates of the future undiscounted net operating cash flows for each vessel based on assumptions regarding time charter rates, vessels’ operating expenses, vessels’ capital expenditures, vessels’ residual value, fleet utilization and the estimated remaining useful life of each vessel.

Container vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (based on the most recent ten year historical average rates after eliminating outliers and without adjustment for any growth rate) over the remaining estimated life of the vessel, assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of 2.5% over a five-year period, based on management’s estimates taking into consideration the Company’s historical data, (ii) planned dry-docking and special survey expenditures and (iii) management fees expenditures. Charter rates for container shipping vessels are cyclical and subject to significant volatility based on factors beyond Company’s control. Therefore, the Company considers the most recent ten-year historical average, after eliminating outliers, to be a reasonable estimation of expected future charter rates over the remaining useful life of the Company’s vessels. The Company defines outliers as index values provided by an independent, third-party maritime research services provider. Given the spread of rates between peaks and troughs over the decade, the Company believes the most recent ten-year historical average rates, after eliminating outliers, provide a fair estimate in determining a rate for long-term forecasts. The salvage value used in the impairment test is estimated at $0.300 per light weight ton in accordance with the container vessels’ depreciation policy.

7

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

Dry bulk vessels: The future undiscounted net operating cash flows are determined as the sum of (x) (i) the charter revenues from existing time charters for the fixed fleet days and (ii) an estimated daily time charter rate for the unfixed days (using the most recent 10 year average of historical 1 year time charter rates available for each type of dry bulk vessel over the remaining estimated life of each vessel, net of commissions), assuming an estimated fleet utilization rate, less (y) (i) expected outflows for vessels’ operating expenses assuming an expected increase in expenses of 2.5% over a five-year period, based on management’s estimates, (ii) planned dry-docking and special survey expenditures and (iii) management fees expenditures. Charter rates for dry bulk vessels are cyclical and subject to significant volatility based on factors beyond Company’s control. Therefore, the Company considers the most recent ten-year average of historical 1 year time charter rates available for each type of dry bulk vessel, to be a reasonable estimation of expected future charter rates over the remaining useful life of its dry bulk vessels. The Company believes the most recent ten-year average of historical 1 year time charter rates available for each type of dry bulk vessel provide a fair estimate in determining a rate for long-term forecasts. The salvage value used in the impairment test is estimated at $0.300 per light weight ton in accordance with the dry bulk vessels’ depreciation policy.

The assumptions used to develop estimates of future undiscounted net operating cash flows are based on historical trends as well as future expectations. If those future undiscounted net operating cash flows are greater than a vessel’s carrying value, there are no impairment indications for such vessel. If those future undiscounted net operating cash flows are less than a vessel’s carrying value, the Company proceeds to Step 2 of the impairment analysis for such vessel.

In Step 2 of the impairment analysis, the Company determines the fair value of the vessels that failed Step 1 of the impairment analysis, based on management estimates and assumptions, making use of available market data and taking into consideration third party valuations. Therefore, the Company has categorized the fair value of the vessels as Level 2 in the fair value hierarchy. The difference between the carrying value of the vessels that failed Step 1 of the impairment analysis and their fair value as calculated in Step 2 of the impairment analysis is recognized in the Company’s accounts as an impairment loss.

The review of the carrying amounts in connection with the estimated recoverable amount of the Company’s vessels as of December 31, 2020 and June 30, 2021 resulted in an impairment loss of $31,577 and nil, respectively.

(iii) Segment reporting: The Company determined that currently it operates under two reportable segments: (1) a container vessels segment, as a provider of worldwide marine transportation services by chartering its container vessels, and (2) a dry bulk vessels segment, as a provider of dry bulk commodities transportation services by chartering its dry bulk vessels. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company's consolidated financial statements.

(iv) Accounting for transactions under common control: A common control transaction is any transfer of net assets or exchange of equity interests between entities or businesses that are under common control by an ultimate parent or controlling shareholder before and after the transaction. Common control transactions may have characteristics that are similar to business combinations but do not meet the requirements to be accounted for as business combinations because, from the perspective of the ultimate parent or controlling shareholder, there has not been a change in control over the acquiree. Due to the fact common control transactions do not result in a change of control at the ultimate parent or controlling shareholder level, the Company does not account for that at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred.

8

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

New Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference the London Inter-bank offered Rate (“LIBOR”) or another reference rate expected to be terminated because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update apply to all entities that elect to apply the optional guidance in Topic 848. ASU 2020-04 and ASU 2021-01 can be adopted as of March 12, 2020 through December 31, 2022. As of June 30, 2021, the Company has not yet elected any optional expedients provided in the standard. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period. The Company is in the process of assessing the impact of the standard adoption on the consolidated financial statements.

3. Transactions with Related Parties:

(a) Costamare Shipping Company S.A. (“Costamare Shipping”) and Costamare Shipping Services Ltd. (“Costamare Services”): Costamare Shipping is a ship management company wholly owned by Mr. Konstantinos Konstantakopoulos, the Company’s Chairman and Chief Executive Officer. Costamare Shipping provides the Company, pursuant to a Framework Agreement dated November 2, 2015 as amended and restated on January 17, 2020 and as further amended and restated on June 28, 2021 (the “Framework Agreement”), with general administrative and certain commercial services as well as technical, crewing, provisioning, bunkering, sale and purchase, chartering, accounting, insurance and administrative services in respect of the Company’s containerships in exchange for a daily fee for each containership. The Company amended and restated the Framework Agreement in 2020 to allow Costamare Shipping to retain certain relevant payouts from insurance providers and in 2021 to allow Costamare Shipping to provide services in relation to other types of vessels (including dry bulk vessels), in addition to container vessels. Costamare Services, a company controlled by the Company’s Chairman and Chief Executive Officer and members of his family, provides, pursuant to a Services Agreement dated November 2, 2015 as amended and restated on June 28, 2021 (the “Services Agreement”), the Company’s vessel-owning subsidiaries with crewing, commercial and administrative services. Effective July 1, 2019, the Services Agreement has been amended to increase the fees paid by each vessel-owning subsidiary of the Company to 1.10% from 0.60% of the charter hire and other income earned by each vessel-owning subsidiary. Costamare Shipping and Costamare Services are not part of the consolidated group of the Company.

On November 27, 2015, the Company amended and restated the Registration Rights Agreement entered into in connection with the Company’s Initial Public Offering, to extend registration rights to Costamare Shipping and Costamare Services each of which have received or may receive shares of its common stock as fee compensation.

Pursuant to the Framework Agreement and the Services Agreement, Costamare Shipping and Costamare Services received (i) for each vessel a daily fee of $0.956 ($0.478 for any vessel subject to a bareboat charter) prorated for the calendar days the Company owned each vessel and for the three-month period following the date of the sale of a vessel, (ii) a flat fee of $787.4 for the supervision of the construction of any newbuild vessel contracted by the Company, (iii) a fee 1.25% on all gross freight, demurrage, charter hire, ballast bonus or other income earned with respect to each vessel in the Company’s fleet and (iv) a quarterly fee of $625 plus the value of 149,600 shares which Costamare Services may elect to receive in kind (Note 1). Fees under (i) and (ii) may be annually adjusted upwards to reflect any strengthening of the Euro against the U.S. dollar and/or material unforeseen cost increases.

The Company is able to terminate the Framework Agreement and/or the Services Agreement, subject to a termination fee, by providing written notice to Costamare Shipping or Costamare Services, as applicable, at least 12 months before the end of the subsequent one-year term. The termination fee is equal to (a) the number of full years remaining prior to December 31, 2025, times (b) the aggregate fees due and payable to Costamare Shipping or Costamare Services, as applicable, during the 12-month period ending on the date of termination (without taking into account any reduction in fees under the Framework Agreement to reflect that certain obligations have been delegated to a sub-manager or a sub-provider, as applicable); provided that the termination fee will always be at least two times the aggregate fees over the 12-month period described above.

In 2013, Costamare Shipping entered into a co-operation agreement (the “Co-operation Agreement”) with third-party ship managers V.Ships Greece Ltd. (“V.Ships Greece”), pursuant to which the two companies established a ship management cell (the “Cell”) under V.Ships Greece. The Cell offered technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial and insurance services to certain of the Company’s container vessels, pursuant to separate management agreements entered into between V.Ships Greece and the ship-owning company of the respective container vessel, for a daily management fee. The Cell also offered ship management services to third-party owners. Effective April 1, 2019, the Company terminated its agreement with Costamare Shipping, whereby Costamare Shipping passed to the Company the net profit, if any, it received pursuant to the Co-operation Agreement as a refund or reduction of the management fees payable by the Company to Costamare Shipping under the Framework Agreement. Following the termination of the Co-operation Agreement on October 16, 2020, V.Ships Greece continues to provide the same management services to the Company’s vessels (as well as to vessels acquired under the Framework Deed and to third party vessels). As at June 30, 2021, V.Ships Greece provided services to 41 Costamare vessels, of which 15 were subcontracted for certain management services to V.Ships (Shanghai) Limited.

9

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

Management fees charged by Costamare Shipping in the six-month periods ended June 30, 2020 and 2021, amounted to $10,521 and $11,786, respectively, and are included in Management fees-related parties in the accompanying consolidated statements of operations. In addition, Costamare Shipping and Costamare Services charged (i) $3,694 for the six-month period ended June 30, 2021 ($2,881 for the six-month period ended June 30, 2020), representing a fee of 1.25% on all gross revenues, as provided in the Framework Agreement and the Services Agreement, as applicable, which is included in Voyage expenses-related parties in the accompanying consolidated statements of operations, (ii) $1,250, which is included in General and administrative expenses – related parties in the accompanying consolidated statements of operations for the six-month period ended June 30, 2021 ($1,250 for the six-month period ended June 30, 2020)  and (iii) $3,207, representing the fair value of 299,200 shares, which is included in General and administrative expenses - related parties in the accompanying consolidated statements of operations for the six-month period ended June 30, 2021 ($1,508 for the six-month period ended June 30, 2020). Furthermore, in accordance with the management agreements with V.Ships Greece and the other third-party managers, V.Ships Greece and the other third-party managers have been provided with the amount of $75 and $50 per vessel as working capital security. As at December 31, 2020, such amount was $3,075 in aggregate, of which $3,000 is included in Accounts receivable, net, non-current and $75 in Accounts receivable, net in the accompanying 2020 consolidated balance sheet and as of June 30, 2021, it was $3,700 in aggregate, of which $3,325 is included in Accounts receivable, net, non-current and $375 in Accounts receivable, net in the accompanying 2021 consolidated balance sheet.

During the six-month periods ended June 30, 2020 and 2021, Costamare Shipping charged in aggregate to the companies established pursuant to the Framework Deed (Notes 9 and 10) the amounts of $1,797 and $1,508, respectively, for services provided in accordance with the respective management agreements.

The balance due from Costamare Shipping at December 31, 2020, amounted to $1,623 and is included in Due from related parties in the accompanying 2020 consolidated balance sheet. The balance due to Costamare Shipping at June 30, 2021, amounted to $1,768 and is included in Due to related parties in the accompanying 2021 consolidated balance sheet. The balance due to Costamare Services at December 31, 2020, amounted to $432 and is reflected as Due to related parties in the accompanying consolidated balance sheets. The balance due from Costamare Services at June 30, 2021, amounted to $535 and is reflected as Due from related parties in the accompanying consolidated balance sheets.

(b) Shanghai Costamare Ship Management Co., Ltd. (“Shanghai Costamare”): Shanghai Costamare was initially owned (indirectly) 70% by the Company’s Chairman and Chief Executive Officer and 30% (indirectly) by Shanghai Costamare’s General Manager. Shanghai Costamare is a company incorporated in the People’s Republic of China. Shanghai Costamare is not part of the consolidated group of the Company. The technical, crewing, provisioning, bunkering, sale and purchase and accounting services, as well as certain commercial services of certain of the Company’s vessels, have been subcontracted from Costamare Shipping to Shanghai Costamare. On October 16, 2020, it was agreed that Shanghai Costamare would terminate operations and the owners of the 16 Company’s containerships that were managed by Shanghai Costamare on that date entered into ship managements agreements with V.Ships Greece, which subcontracted certain management services to V.Ships (Shanghai) Limited. The actual transfer of the management of 15 vessels was completed on December 31, 2020. On January 8, 2021, the management of the remaining vessel was fully taken over by V.Ships (Shanghai) Limited. There was no balance due from/to Shanghai Costamare at both December 31, 2020 and June 30, 2021.

(c) Blue Net Chartering GmbH & Co. KG (“BNC”) and Blue Net Asia Pte., Ltd. (“BNA”): On January 1, 2018, Costamare Shipping appointed, on behalf of the vessels it manages, BNC, a company 50% (indirectly) owned by the Company’s Chairman and Chief Executive Officer, to provide charter brokerage services to all container vessels under its management (including container vessels owned by the Company). BNC provides exclusive charter brokerage services to containership owners. Under the charter brokerage services agreement as amended, each container vessel-owning subsidiary paid a fee of €9,413 for the year ended December 31, 2020, in respect of its vessel, prorated for the calendar days of ownership (including as disponent owner under a bareboat charter agreement), provided that in respect of container vessels chartered on January 1, 2018, which remain chartered under the same charter party agreement in effect on January 1, 2018, the fee was €1,281 for the year ended December 31, 2020. On March 29, 2021, four of the Company’s container vessels agreed to pay a daily brokerage commission of $0.165 per day to BNC in connection with charters arranged by it. During the six-month periods ended June 30, 2020 and 2021, BNC charged the ship-owning companies $181 and $241, respectively, which are included in Voyage expenses—related parties in the accompanying consolidated statements of operations. BNC also provides chartering services to a revenue sharing pool (until 31 August 2021), which includes one of the Company’s container vessels. In addition, on March 31, 2020, Costamare Shipping agreed, on behalf of five of the container vessels it manages, to pay to BNA, a company 50% (indirectly) owned by the Company’s Chairman and Chief Executive Officer, a commission of 1.25% of the gross daily hire earned from the charters arranged by BNA for these five Company container vessels. During the six-month periods ended June 30, 2020 and 2021, BNA charged the ship-owning companies nil and $366, which are included in Voyage expenses – related parties in the accompanying consolidated statements of operations.

10

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

(d) Longshaw Maritime Investments S.A. (“Longshaw”): On June 14, 2021, the Company entered into a Shares Purchase Agreement (‘’SPA’’) with Longshaw, a related party entity controlled by the Company’s Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, for the acquisition of all of its equity interest in 16 companies, which had acquired or had agreed to acquire dry bulk vessels. The aggregate purchase price, which is payable by the Company as at June 30, 2021, for the acquisition of these 16 companies was $54,491, which is included in Other current liabilities in the 2021 consolidated balance sheet, in exchange for the net assets of the acquired companies amounted to $54,578. Three of the dry bulk vessels that were part of the acquisition, Builder, Pegasus and Adventure (with an aggregate DWT of 172,022), were delivered to the Company during the six-month period ended June 30, 2021. The acquisition has been accounted as a transaction between companies under common control and the excess of the carrying value of the net assets acquired above the purchase price agreed amounting to $86 was recorded as a capital contribution within additional paid in capital.

(e) Other related parties' transactions: On November 3, 2010, the Company and the Company's Chairman and Chief Executive Officer, Mr. Konstantinos Konstantakopoulos, entered into a Restrictive Covenant Agreement (the "Original RCA"), pursuant to which the activities of Mr. Konstantakopoulos with respect to the container vessel sector, because of his capacity as a director or officer of the Company, were restricted. In July 2021, the Original RCA was amended and restated, and Mr. Konstantakopoulos agreed to similarly restrict his activities in the dry bulk sector.

4. Segmental Financial Information

Since June 14, 2021 (Note 3(d)), the Company has two reportable segments from which it derives its revenues: (1) container vessels segment and (2) dry bulk vessels segment. The reportable segments reflect the internal organization of the Company and are strategic businesses that offer different services. The container vessel business segment consists of transportation of containerized products through ownership and trading of container vessels. The dry bulk business segment consists of transportation of dry bulk cargoes through ownership and trading of dry bulk vessels.

The tables below present information about the Company's reportable segments as of June 30, 2021, and for the six-month period then ended. The Company measures segment performance based on net income. Items included in the segment net income are allocated to the extent that the items are directly or indirectly attributable to the segments. Items are allocated by indirect calculation and the allocation keys are defined on the basis of each segment’s drawing on key resources. The Other segment includes items that due to their nature are not allocated to any of the Company’s reportable segments. As of June 30, 2021 and for the six-month period then ended, Other segment includes equity securities investment fair value measurement related balance and income as well as equity method investments’ balances and income. Summarized financial information concerning each of the Company's reportable segments is as follows:

For the six-month period ended June 30, 2021
	Container vessels segment		Dry bulk vessels segment		Other		Total
Voyage revenue	$	292,625	$	870	$	-	$	293,495
Net Income	$	102,316	$	396	$	56,045	$	158,757
Total Assets	$	3,742,928	$	103,221	$	82,049	$	3,928,198

11

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

5. Current Assets: Investments in Equity securities / Non-current Assets: Debt Securities, Held to Maturity, and Other Non-Current Assets

In 2014, Zim Integrated Services (“Zim”) agreed with its creditors, including vessel and container lenders, ship-owners, shipyards, unsecured lenders and bond holders, to restructure its debt. Based on this agreement, the Company received Zim shares representing approximately 1.2% of the outstanding Zim shares immediately after the restructuring and $8,229 aggregate principal amount of unsecured interest-bearing Zim notes maturing in 2023 consisting of $1,452 of 3.0% Series 1 Notes due 2023 amortizing subject to available cash flows in accordance with a corporate mechanism and $6,777 of 5.0% Series 2 Notes due 2023 non-amortizing (of the 5% interest, 3% is payable quarterly in cash and 2% interest is accrued quarterly with deferred cash payment on maturity) in exchange for amounts owed by Zim to the Company under their charter agreements. The Company calculated the fair value of the instruments received from Zim based on the agreement discussed above, available information on Zim and other similar contracts with similar terms, maturities and interest rates, and recorded at fair value of $676 in relation to the Series 1 Notes, $3,567 in relation to the Series 2 Notes and $7,802 in relation to its equity participation in Zim. The difference between the aggregate fair value of the debt and equity securities received from Zim and the then net carrying value of the amounts due from Zim of $2,888 was written-off in 2014.

The Company accounts on a quarterly basis, for the unwinding of the interest on the Series 1 and Series 2 Notes, until the book value of the instruments equals their face value on maturity. During the six-month period ended June 30, 2021, the Company recorded $458 in relation to their unwinding ($453 for the six-month period ended June 30, 2020), which is included in “Interest income” in the consolidated statements of operations. The Company had classified such debt securities under Debt securities, held to maturity.

During the year ended December 31, 2016, the Company received $46 capital redemption of the Series 1 Notes.

In March 2021, the Company received $394 capital redemption of the Series 1 Notes. Furthermore, in June 2021, the Company received $7,789 capital redemption on the Series 1 and 2 Notes, in aggregate, and the outstanding balance at the date of the capital redemption of $6,774, net of accumulated provision for Credit losses of $569 calculated as of December 31, 2020, following the provisions of “ASC 326 Financial Instruments — Credit Losses” , was fully settled. As a result of the full redemption of the Series 1 and Series 2 Notes, the Company recorded a gain of $1,015 (including the established provision for Credit losses as of December 31, 2020, of $569), which is included in Other, net, in the accompanying 2021 statement of operations.

The Series 1 and Series 2 Notes were carried at amortized cost in the accompanying 2020 consolidated balance sheet (Note 20(c)). These financial instruments were not measured at fair value on a recurring basis.

On January 28, 2021, Zim completed its initial public offering in the United States under the United States Securities Act of 1933, as amended. Since then, the Company classifies the equity securities of Zim that it owned at Fair Value through Net Income as the Company did not have the ability to exercise significant influence on matters at Zim, and there is readily available fair value for these securities. The Company records the subsequent changes in fair value in the consolidated statements of operations based on the closing price of Zim ordinary shares on the New York Stock Exchange (NYSE) on each reporting date (Level 1 inputs of the fair value hierarchy). No dividends have been received from Zim since July 16, 2014. As of June 30, 2021, the Company owned 1,221,800 ordinary shares of Zim with a fair value of $54,895 based on the closing price of Zim ordinary shares on the NYSE on that date, separately reflected in Investments in equity securities under current assets in 2021 consolidated balance sheet. For the six-months period ended June 30, 2021, the fair value measurement of investment in equity securities of $51,094 is separately reflected in the 2021 consolidated statement of operations. As of December 31, 2020, these shares were carried at cost less impairment in the amount of $3,802, which was included in Other non-current assets in the 2020 consolidated balance sheet.

6. Inventories:

Inventories in the accompanying consolidated balance sheets relate to bunkers, lubricants and spare parts on board the vessels.

12

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

7. Vessels and advances, net:

The amounts in the accompanying consolidated balance sheets are as follows:

	Vessel Cost			Accumulated Depreciation			Net Book Value
Balance, January 1, 2021	$	3,525,967		$	(1,075,457	)	$	2,450,510
Depreciation		-			(54,982	)		(54,982	)
Vessel acquisitions, advances and other vessels’ costs		837,399			-			837,399
Vessel sales, transfers and other movements		(135,427	)		71,635			(63,792	)
Balance, June 30, 2021	$	4,227,939		$	(1,058,804	)	$	3,169,135

During the six-month period ended June 30, 2021, the Company (i) acquired the secondhand container vessels Aries, Argus, Glen Canyon, Androusa, Norfolk, Porto Cheli, Porto Kagio and Porto Germeno with an aggregate TEU capacity of 45,331, (ii) took delivery of the newbuild container vessels YM Target and YM Tiptop with an aggregate TEU capacity of 25,380 and (iii) took delivery of three secondhand dry bulk vessels, that were part of the SPA (Note3(d)), the Builder, Pegasus and Adventure, with an aggregate DWT of 172,022.

Furthermore, during the six-month period ended June 30, 2021, the Company purchased from York (Notes 9 and 10) the equity interest held by York (in the range from 51% to 75%) in the companies owning the containerships Cape Akritas, Cape Tainaro, Cape Artemisio, Cape Kortia and Cape Sounio, with an aggregate capacity of 55,050 TEU, at an aggregate net consideration price of $88,854 after subtracting term loans of $302,193 (Note 11) assumed at the time of the acquisition. As a result, the Company acquired the controlling interest and became the sole shareholder of the vessel owning companies of the five mentioned container vessels (Note 10). Any favorable or unfavorable lease terms associated with these vessels were recorded as an intangible asset or liability (“Time charter assumed”) at the time of the acquisition. The aggregate Time charter assumed, net, at the time of the acquisitions was a liability of $589, current and non-current portion (Note 13). Management accounted for this acquisition as an asset acquisition under ASC 805 “Business Combinations”.

During the six-month period ended June 30, 2021, the Company agreed to acquire (i) the 2009-built, 4,578 TEU secondhand container vessel COSCO Fukuyama (tbr Gialova) and the 2008-built, 4,578 TEU secondhand container vessel CO Kobe (tbr Dyros), which are expected to be delivered by the end of 2021 and (ii) 13 secondhand dry bulk vessels  (Interlink Verity, Interlink Parity (tbr Parity), Serene Sussanah (tbr Serena), Dawn, Bernis, Konstantinos M. (tbr Konstantinos), Bulk Titan (tbr Titan), Jia Tai (tbr Taibo), N Discovery (tbr Discovery), Viet Thuan 56-01 (tbr Thunder), Imperial Rose (tbr Rose), Lara (tbr Clara), Interlink Equity (tbr Equity)) with an aggregate capacity of 619,718 DWT (Note 14(b) and Note 22(e)) which are expected to be delivered to the Company during the third and the fourth quarters of 2021.

During the six-month period ended June 30, 2021, the Company sold the container vessels Halifax Express, which was held for sale at December 31, 2020 and Prosper, which was held for sale at March 31, 2021 and recognized a net gain of $1,406, which is separately reflected in Gain on sale of vessels, net in the accompanying 2021 consolidated statement of operations.

On March 24, 2021, the Company decided to make arrangements to sell the container vessel Venetiko, and on June 10, 2021, the container vessels ZIM Shanghai and ZIM New York, respectively (Note 22(f)). At these dates, the Company concluded that all the criteria required by the relevant accounting standard, ASC 360-10-45-9, for the classification of the three vessels as “held for sale” were met. As of June 30, 2021, the amount of $61,389 (including $530 transferred from Deferred charges, net), separately reflected in Vessels held for sale in the 2021 consolidated balance sheet, represents the carrying value of those vessels at the time that held for sale criteria were met on the basis that as of that date their fair value less cost to sell exceeded their carrying amount. Their fair value was based on the vessel’s estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy).

During the six-month period ended June 30, 2020, the Company acquired the 2009-built container vessel, 4,258 TEU Virgo (ex. JPO Virgo).

During the six-month period ended June 30, 2020, the Company sold the container vessel Neapolis and recognized a gain of $10, which is separately reflected in Gain on sale of vessels, net in the accompanying 2020 consolidated statement of operations. During the six-month period ended June 30, 2020, the Company recorded an impairment loss in relation to five of its container vessels in the amount of $31,577 (including $693 transferred from Deferred charges, net). The fair values of the five container vessels were determined through Level 2 inputs of the fair value hierarchy (Note 20).

13

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

As of June 30, 2020, the fair market value of the container vessels Zagora, Kokura, Kawasaki and Singapore Express based on their estimated sale price, net of commissions (Level 2 inputs of the fair value hierarchy) was $27,038 in the aggregate. The difference between the estimated fair value less cost to sell the vessel and the vessel’s carrying value, amounting to $79,197 (including $33 transferred from Deferred charges, net), was recorded in the six-month period ended June 30, 2020, and is separately reflected as Loss on vessels held for sale in the accompanying 2020 statement of operations.

Fifty-eight of the Company’s vessels, with a total carrying value of $2,090,221 as of June 30, 2021, have been provided as collateral to secure the long-term debt discussed in Note 11. This excludes the four vessels under the sale and leaseback transactions described in Note 12, the five newbuild vessels YM Triumph, YM Truth, YM Totality, YM Target and YM Tiptop (Note 11.B), the five vessels acquired in 2018 under the Share Purchase Agreement (Notes 10 and 11B) with York and five unencumbered vessels.

8. Deferred Charges, net:

Deferred charges, net include the unamortized dry-docking and special survey costs. The amounts in the accompanying consolidated balance sheets are as follows:

Balance, January 1, 2021	$	27,682
Additions		12,456
Amortization		(4,847	)
Write-off and other movements (Note 7)		(530	)
Balance, June 30, 2021	$	34,761

During the six-month period ended June 30, 2021, eight vessels underwent and completed their special survey and one vessel was in the process of completing its special survey. During the six-month period ended June 30, 2020, seven vessels underwent and completed their special surveys. The amortization of the dry-docking and special survey costs is separately reflected in the accompanying consolidated statements of operations.

9. Costamare Ventures Inc.:

On May 18, 2015, the Company, along with its wholly-owned subsidiary, Costamare Ventures Inc. (“Costamare Ventures”), amended and restated the Framework Deed, which was further amended on June 12, 2018 (the “Framework Deed”) with York Capital Management Global Advisors LLC and its affiliate Sparrow Holdings, L.P. (collectively, “York”) to invest jointly in the acquisition and construction of container vessels. Under the Framework Deed, the decisions regarding vessel acquisitions are made jointly by Costamare Ventures and York and the Company reserves the right to acquire any vessels that York decides not to pursue. The commitment period ended on May 15, 2020 and the termination of the Framework Deed will occur on May 15, 2024, or upon the occurrence of certain extraordinary events as described therein.

On termination and on the occurrence of certain extraordinary events, Costamare Ventures may elect to divide the vessels owned by all such vessel-owning entities between itself and York to reflect their cumulative participation in all such entities. Costamare Shipping provides ship management and administrative services to the vessels acquired under the Framework Deed, with the right to subcontract to V.Ships Greece.

As at June 30, 2021, the Company holds 49% of the capital stock of six jointly-owned companies formed pursuant to the Framework Deed with York (Note 10). The Company accounts for the entities formed under the Framework Deed as equity investments.

14

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

10. Equity Method Investments:

The companies accounted for as equity method investments, all of which are incorporated in the Marshall Islands, are as follows:

Entity	Vessel	Participation % June 30, 2021	Date Established /Acquired
Steadman Maritime Co.	Ensenada	49%	July 1, 2013
Marchant Maritime Co. (*)	-	-	July 8, 2013
Horton Maritime Co. (*)	-	-	June 26, 2013
Smales Maritime Co.	-	49%	June 6, 2013
Geyer Maritime Co.	Arkadia	49%	May 18, 2015
Goodway Maritime Co.	Monemvasia	49%	September 22, 2015
Platt Maritime Co.	Polar Argentina	49%	May 18, 2015
Sykes Maritime Co.	Polar Brasil	49%	May 18, 2015

^(*) Dissolved on June 21, 2021

During the year ended December 31, 2020, the Company received, in the form of a special dividend, $3,700, in aggregate from Steadman Maritime Co., Geyer Maritime Co., Smales Maritime Co. and Goodway Maritime Co.

During the year ended December 31, 2020, the Company received in the form of a special dividend, $44,185 in aggregate, from Kemp Maritime Co., Hyde Maritime Co., Ainsley Maritime Co., Ambrose Maritime Co. and Skerrett Maritime Co.

During the year ended December 31, 2020, the Company received the amount of $1,764 in aggregate, in the form of a special dividend, from Platt Maritime Co. and Sykes Maritime Co.

On November 12, 2018, Costamare entered into a share purchase agreement (the “Share Purchase Agreement”) to acquire the ownership interest held by York in five jointly-owned companies, namely Benedict Maritime Co., Bertrand Maritime Co., Beardmore Maritime Co., Schofield Maritime Co. and Fairbank Maritime Co., which had been formed pursuant to the Framework Deed. In connection with this agreement, the Company registered for resale by York up to 7.6 million shares of its common stock. Costamare could elect at any time within six months from February 8, 2019, the effective date of the registration statement on Form F-3/A filed with the SEC on December 19, 2018, to pay a portion of the consideration under the Share Purchase Agreement in Costamare common stock. At the date of the acquisition, the aggregate net value of assets and liabilities transferred to the Company (excluding cash and cash equivalents, the value of the fixed assets and the financing arrangements) was an excess amount of $5,171. Management accounted for this acquisition as an asset acquisition under ASC 805 “Business Combinations”; thus the 40% investment previously held by the Company was carried over at cost, whereas the cost consideration over proportionate cost of the net asset values acquired was proportionally allocated on a relative fair value basis to the net identifiable assets acquired (that is to the vessels (Note 7) and related time charters (Note 13)) other than non-qualifying assets.

On July 17, 2019, the Company elected to pay part of the previously agreed deferred price for the acquisition of the 60% equity interest of York in five 2016-built, 14,000 TEU containerships with newly issued shares of the Company’s common stock. On July 25, 2019, 2,883,015 shares of common stock were issued in order to pay an amount of $15,130, representing part of the deferred price. The remaining deferred price due to York was fully paid in cash on May 12, 2020, in accordance with the terms of the Share Purchase Agreement.

On March 22, 2021, March 24, 2021 and March 29, 2021, the Company entered into three share purchase agreements to acquire the ownership interest (in the range of 51% to 75%) held by York in five jointly-owned companies, namely Ainsley Maritime Co. and Ambrose Maritime Co., Hyde Maritime Co. and Skerrett Maritime Co. and Kemp Maritime Co., respectively, which had been formed pursuant to the Framework Deed. At the date of the acquisition, the aggregate net value of assets and liabilities transferred to the Company amounted to $141,040. Management accounted for this acquisition as an asset acquisition under ASC 805 “Business Combinations” whereas the cost consideration over proportionate cost of the net asset values acquired was proportionally allocated on a relative fair value basis to the net identifiable assets acquired (that is to the vessels (Note 7) and related time charters (Note 13).

15

COSTAMARE INC.

Notes to Unaudited Condensed Consolidated Financial Statements  

June 30, 2020 and 2021

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

For the six-month periods ended June 30, 2020 and 2021, the Company recorded net income of $8,241 and $4,951, respectively, from equity method investments, which are separately reflected as Income from equity method investments in the accompanying consolidated statements of operations.

The summarized combined financial information of the companies accounted for as equity method investment is as follows:

	December 31, 2020		June 30, 2021
Current assets	$	46,006	$	28,293
Non-current assets		516,171		94,220
Total assets	$	562,177	$	122,513
Current liabilities	$	30,148	$	6,399
Non-current liabilities		346,994		60,699
Total liabilities	$	377,142	$	67,098

	Six-month period ended June 30,
	2020		2021
Voyage revenue	$	49,065	$	29,457
Net income	$	19,897	$	11,480

11. Long-Term Debt:

The amounts shown in the accompanying consolidated balance sheets consist of the following:

Borrower(s)				December 31, 2020		June 30, 2021
A.	Term Loans:
		1.	Montes Shipping Co. and Kelsen Shipping Co.		-		-
		2.	Uriza Shipping S.A.		-		-
		3.	Costis Maritime Corporation, Christos Maritime Corporation and Capetanissa Maritime Corporation		-		-
		4.	Rena Maritime Corporation, Finch Shipping Co. and Joyner Carriers S.A.		-		-
		5.	Nerida Shipping Co.		11,775		10,875
		6.	Costamare Inc.		-		-
		7.	Singleton Shipping Co. and Tatum Shipping Co.		40,800		39,200
		8.	Reddick Shipping Co. and Verandi Shipping Co.		15,240		-
		9.	Costamare. Inc.		34,188		32,188
		10.	Bastian Shipping Co. and Cadence Shipping Co.		113,200		105,600
		11.	Adele Shipping Co.		60,500		57,500
		12.	Costamare Inc.		135,550		129,770
		13.	Quentin Shipping Co. and Sander Shipping Co.		80,943		76,921
		14.	Costamare Inc.		27,666		26,110
		15.	Capetanissa Maritime Corporation et al.		65,500		61,000
		16.	Caravokyra Maritime Corporation et al.		64,800		59,600
		17.	Achilleas Maritime Corporation et al.		58,396		-
		18.	Kelsen Shipping Co.		8,100