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
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE
OF REPORT: JANUARY 30, 2009
COMMISSION
FILE NUMBER 001-33373
____________________
CAPITAL
PRODUCT PARTNERS L.P.
(Translation
of registrant’s name into English)
____________________
3
IASSONOS STREET
PIRAEUS,
18537 GREECE
(address
of principal executive offices)
____________________
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 x Form
40-F o
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):
Yes o No x
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):
Yes o No x
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If “yes”
is marked, indicate below this file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Item
1 – Information Contained in this Form 6-K Report
Attached
as Exhibit I is a press release of Capital Product Partners L.P., dated January
30, 2009.
This
report on Form 6-K is hereby incorporated by reference into the registrant's
registration statement, registration number 333-153274, dated October 1,
2008.
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.
|
CAPITAL
PRODUCT PARTNERS
L.P.,
|
||
|
By:
|
Capital
GP L.L.C., its general partner
|
|
|
/s/ Ioannis
E. Lazaridis
|
||
|
Name: Ioannis
E. Lazaridis
|
||
|
Title: Chief
Executive Officer and
Chief
Financial Officer of Capital GP L.L.C.
|
||
Dated: January
30, 2009
Exhibit
I
Athens, Greece - January 30,
2009 – Capital Product Partners L.P. (the “Partnership”), (Nasdaq: CPLP),
an international owner of modern double-hull tankers, today released its
financial results for the fourth quarter ended December 31, 2008.
The
Partnership's net income for the quarter ended December 31, 2008 was $14.3
million, or $0.54 per limited partnership unit, which is slightly lower than the
$0.56 per unit from the previous quarter ended September 30, 2008, and higher
than the $0.38 per unit from the fourth quarter of 2007. The increased operating
days and substantial profit sharing revenue compared to a year ago drove these
results.
Operating
surplus for the quarter ended December 31, 2008 was $17.4 million, below the
record high $18.7 million from the third quarter of 2008 and higher than the
$10.7 million from the fourth quarter of 2007. Operating surplus is a non-GAAP
financial measure used by certain investors to measure the financial performance
of the Partnership and other master limited partnerships. (Please see Appendix A
for a reconciliation of this non-GAAP measure to net income.)
Revenues
for the fourth quarter of 2008 were $36.2 million, consisting of $30.1 million
fixed revenue from time and bareboat charter agreements and $6.1 million in
profit sharing revenues compared to 29.0 million of revenues in the fourth
quarter of 2007. The high level of profit sharing revenue is a result of the
high utilization rates of the Partnership’s product tanker fleet, the settlement
of our profit sharing agreements with a number of our charterers as well as of
the resilience of the Suezmax market during the quarter.
Total
operating expenses for the fourth quarter of 2008 were $15.3 million, including
$7.5 million in fees for the commercial and technical management of the fleet
paid to a subsidiary of Capital Maritime & Trading Corp. (Capital Maritime),
the Partnership's sponsor, $6.8 million in depreciation and $0.7 million in
general and administrative expenses compared to 13.7 million for the fourth
quarter of 2007. Net interest expense and finance cost for the quarter totaled
$6.7 million compared to $5.0 million for the fourth quarter of 2007. The
increase in net interest expense is due to the increased debt of the Partnership
compared to a year ago.
Ioannis
Lazaridis, Chief Executive Officer and Chief Financial Officer of Capital
Product Partners' general partner, said "Our strong fourth quarter results are
underpinned by our business model of owning a high quality modern fleet
chartered with quality counterparties. Our profit sharing arrangements and the
high utilization rates achieved by our charterers continued to benefit the
Partnership with higher than anticipated profit sharing revenues.”
The clean
spot product tanker and crude markets remained historically at high levels
during the fourth quarter although a decline from the record peaks of previous
quarters was noticeable. The softer undertones observed in the spot market for
product tankers during the fourth quarter of 2008 was due to waning demand and
longer tonnage lists. The Suezmax spot market rates demonstrated significant
resilience on the back of a largely balanced tonnage list and demand for well
approved tonnage.
Period
rates across all tanker segments softened as a result of more owners and certain
operators seeking period cover, therefore increasing supply of tonnage available
for period employment, in face of the economic uncertainty and shipping market
developments.
As of
December 31, 2008, the Partnership's long-term debt remained unchanged compared
to the third quarter of 2008 at $474.0 million and partners’ equity declined to
$172.2 million. Current undrawn debt facilities amount to $246.0
million.
On
January 30, 2009, the Board of Directors of the Partnership declared a
non-recurring exceptional cash distribution for the fourth quarter of 2008 of
$1.05 per unit. The previous cash distribution paid for the third quarter of
2008 was $0.41 per unit.
The Board
of Directors stated that this extraordinary distribution is an exceptional
non-recurring event and that it does not anticipate that dividends will continue
at this level in future periods. Based on current expectations and
subject to actual results, which may be substantially different, and to approval
of the Board of Directors, the Partnership anticipates that starting with the
first quarter of 2009 distributions will return to levels more consistent with
prior periods. This exceptional distribution will be funded from operating
surplus and through a decrease in existing reserves and results from higher than
anticipated profit sharing revenues, changes in financial markets and shipping
markets which reduce alternative uses for the Partnership’s reserves and a
determination of the reserves required for the conduct of the Partnership’s
business in current market conditions and for future distributions.
Mr.
Lazaridis stated: “We are pleased that we can return the Partnership’s profit
sharing revenues to our unitholders. The Partnership intends to maintain its
stated quarterly distribution policy following this exceptional distribution.
The high levels of profit sharing revenues over the last few quarters are in
excess of the amounts required to sustain the current distribution policy and to
be retained as reserves for the proper conduct of the Partnership’s business. In
addition, the Partnership does not anticipate making any accretive acquisitions
in the near future in the current equity and financial and shipping
markets.”
The
payment of this exceptional distribution of $1.05 per unit for the fourth
quarter of 2008 will bring annual distributions to unitholders to $2.27 per
unit, which under the terms of our partnership agreement will result in the
early termination of the subordination period and the conversion of the
subordinated units currently held by Capital Maritime into common units.
Following termination of the subordinated period Capital Maritime will own
44.6%, of the common units and will be able to vote its common units in matters
that require common unit approval, including for example amendment of the
partnership agreement which requires a majority (or in some cases a higher
percentage) of common unit holders to approve, among other things, changing the
cash distribution policy of the Partnership, amending the definition of
available cash and operating surplus, dissolving the Partnership or entering
into a merger or other transaction. The end of the subordination period is
expected to increase the Partnership’s flexibility to react to future market
developments.
2
The
payment of the exceptional distribution will, in accordance with the terms of
the partnership agreement, also result in a distribution of $12.5 million with
respect to incentive distribution rights held by Capital GP L.L.C, the
Partnership’s general partner. Following discussions with the
Board of Directors the general partner has agreed to defer receipt of a portion
of the distribution payment and will receive the $12.5 million of incentive
payments in four equal quarterly installments, with the first installment being
paid this quarter. Payment of each deferred quarterly installment is
subject to the Partnership distributing at least the minimum quarterly
distribution and any arrearages in minimum quarterly distribution payments for
the relevant quarter. These payments will be made from the operating
surplus.
The
exceptional cash distribution will be paid on February 13, 2009, to unit holders
of record on February 10, 2009.
Mr.
Lazaridis concluded: “We continue to face a severe deterioration in the banking
and credit world as well as a major global economic slowdown, whose duration is
very difficult to forecast and which will continue to significantly impact world
trade and vessel values. At the same time vessels’ cost environment continues to
be inflationary. In spite of this background we achieved solid
results. We enjoy a solid balance sheet, we have zero capital commitments to
purchase or build any vessels and our revolving credit facilities are
non-amortizing until June 2012 for the $370 million facility and until March
2013 for the $350 million facility. The strength of our counterparties and the
quality of our vessels combined with almost full charter coverage for 2009 give
us comfort that we are adequately placed to face the market and maintain our
distribution policy following the payment of this exceptional
distribution.”
Capital
Product Partners will host a conference call to discuss its results today at
10:00 a.m. Eastern Time. The public is invited to listen to the conference call
by dialing +1-888-935-4575 (U.S. and Canada), or +1-718-354-1385
(international); reference number 9243078. Participants should dial in 10
minutes prior to the start of the call. The slide presentation accompanying the
conference call will be available on the Partnership's website at www.capitalpplp.com.
An audio webcast of the conference call will also be accessible through the
website. The relevant links will be found in the Investor Relations section of
the website.
About
Capital Product Partners L.P.
Capital
Product Partners L.P. (Nasdaq:CPLP), a Marshall Islands master limited
partnership, is an international owner of modern double-hull tankers. Capital
Product Partners L.P. owns 18 modern vessels, including 15 MR tankers, two small
product tankers and one Suezmax crude oil tanker. All 18 vessels are under
medium to long-term charters to BP Shipping Limited, Morgan Stanley Capital
Group Inc., Overseas Shipholding Group, Shell International Trading &
Shipping Company Ltd., and Trafigura Beheer B.V.
For more
information about the Partnership, please visit our website: www.capitalpplp.com
Forward
Looking Statement:
The
statements in this press release that are not historical facts, including
expected duration and expiration dates of our charters and potential future
growth, expected future distribution levels, ability to react to market
conditions, effects of the termination of the subordination and requirements for
amendments to its partnership agreement, may be forward-looking statements (as
such term is defined in Section 21E of the Securities Exchange Act of 1934, as
amended). These forward-looking statements involve risks and uncertainties that
could cause the stated or forecasted results to be materially different from
those anticipated. Unless required by law, we expressly disclaim any obligation
to update or revise any of these forward-looking statements, whether because of
future events, new information, a change in our views or expectations, to
conform them to actual results or otherwise. We assume no responsibility for the
accuracy and completeness of the forward-looking statements. We make no
prediction or statement about the performance of our common units.
CPLP-F
3
Capital
Product Partners L.P.
Unaudited
Condensed Consolidated and Combined Statements of Income
(Notes
1-4)
(In
thousands of United States dollars, except number of units and earnings per
unit)
|
For
the three month period
ended
December 31,
|
For
the years
ended
December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues
|
36,222 | 28,981 | 131,514 | 86,545 | ||||||||||||
|
Expenses:
|
||||||||||||||||
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Voyage
expenses
|
246 | 1,125 | 1,072 | 3,553 | ||||||||||||
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Vessel
operating expenses - related party
|
7,489 | 5,264 | 25,552 | 12,688 | ||||||||||||
|
Vessel
operating expenses
|
- | 1,264 | 3,560 | 6,287 | ||||||||||||
|
General
and administrative expenses
|
744 | 600 | 2,817 | 1,477 | ||||||||||||
|
Depreciation
and amortization
|
6,823 | 5,461 | 25,031 | 15,363 | ||||||||||||
|
Operating
income
|
20,920 | 15,267 | 73,482 | 47,177 | ||||||||||||
|
Other
income (expense), net:
|
||||||||||||||||
|
Interest
expense and finance cost
|
(7,154 | ) | (5,259 | ) | (25,448 | ) | (13,121 | ) | ||||||||
|
Loss
on interest rate agreements
|
- | - | - | (3,763 | ) | |||||||||||
|
Interest
income
|
498 | 291 | 1,283 | 711 | ||||||||||||
|
Foreign
currency gain/(loss), net
|
(4 | ) | (12 | ) | (54 | ) | (45 | ) | ||||||||
|
Total
other income (expense), net
|
(6,660 | ) | (4,980 | ) | (24,219 | ) | (16,218 | ) | ||||||||
|
Net
income
|
14,260 | 10,287 | 49,263 | 30,959 | ||||||||||||
|
Less:
|
||||||||||||||||
|
Net
(income) / loss attributable to predecessor operations
|
- | (1,604 | ) | 1,504 | (9,388 | ) | ||||||||||
|
Partnership’s
net income
|
14,260 | 8,683 | 50,767 | 21,571 | ||||||||||||
|
General
Partner’s interest in Partnership’s net income
|
$ | 943 | $ | 174 | $ | 2,473 | $ | 431 | ||||||||
|
Limited
Partners’ interest in Partnership’s net income
|
13,317 | 8,509 | 48,294 | 21,140 | ||||||||||||
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Net
income per:
|
||||||||||||||||
|
·
Common units (basic and diluted)
|
0.54 | 0.38 | 2.00 | 1.11 | ||||||||||||
|
·
Subordinated units (basic and diluted)
|
0.54 | 0.38 | 2.00 | 0.70 | ||||||||||||
|
·
Total units (basic and diluted)
|
0.54 | 0.38 | 2.00 | 0.95 | ||||||||||||
|
Weighted-average
units outstanding:
|
||||||||||||||||
|
·
Common units (basic and diluted)
|
16,011,629 | 13,512,500 | 15,379,212 | 13,512,500 | ||||||||||||
|
·
Subordinated unit s(basic and diluted)
|
8,805,522 | 8,805,522 | 8,805,522 | 8,805,522 | ||||||||||||
|
·
Total units (basic and diluted)
|
24,817,151 | 22,318,022 | 24,184,734 | 22,318,022 | ||||||||||||
4
Capital
Product Partners L.P.
Unaudited
Condensed Consolidated and Combined Balance Sheets
(Notes
1-4)
(In
thousands of United States dollars, except number of shares)
|
December
31, 2008
|
December
31, 2007
|
|||||||
|
Assets
|
||||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 43,149 | $ | 19,919 | ||||
|
Short
term investment
|
1,080 | - | ||||||
|
Trade
accounts receivable
|
6,420 | 2,600 | ||||||
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Due
from related parties
|
- | 4,262 | ||||||
|
Prepayments
and other assets
|
571 | 410 | ||||||
|
Inventories
|
- | 320 | ||||||
|
Total
current assets
|
51,220 | 27,511 | ||||||
|
Fixed
assets
|
||||||||
|
Vessels,
net
|
641,607 | 525,199 | ||||||
|
Total
fixed assets
|
641,607 | 525,199 | ||||||
|
Other
non-current assets
|
||||||||
|
Deferred
charges, net
|
2,827 | 1,031 | ||||||
|
Restricted
cash
|
4,500 | 3,250 | ||||||
|
Total
non-current assets
|
648,934 | 529,480 | ||||||
|
Total
assets
|
700,154 | $ | 556,991 | |||||
|
Liabilities
and Partners’ / Stockholders' Equity
|
||||||||
|
Current
liabilities
|
||||||||
|
Current
portion of long-term debt
|
$ | - | $ | 768 | ||||
|
Current
portion of related party long-term debt
|
- | 5,933 | ||||||
|
Trade
accounts payable
|
143 | 1,271 | ||||||
|
Due
to related parties
|
584 | 65 | ||||||
|
Accrued
liabilities
|
785 | 763 | ||||||
|
Deferred
revenue
|
3,485 | 3,473 | ||||||
|
Total
current liabilities
|
4,997 | 12,273 | ||||||
|
Long-term
liabilities
|
||||||||
|
Long-term
debt
|
474,000 | 281,812 | ||||||
|
Long-term
related party debt
|
- | 62,984 | ||||||
|
Deferred
revenue
|
1,568 | 690 | ||||||
|
Derivative
instruments
|
47,414 | 14,051 | ||||||
|
Total
long-term liabilities
|
522,982 | 359,537 | ||||||
|
Total
liabilities
|
527,979 | 371,810 | ||||||
|
Stockholders’
Equity
|
||||||||
|
Common
stock
|
- | - | ||||||
|
Additional
paid in capital - Predecessor
|
- | 18,060 | ||||||
|
Retained
earnings - Predecessor
|
- | 5,182 | ||||||
|
Partners’
Equity
|
||||||||
|
General
Partner interest
|
5,773 | 3,444 | ||||||
|
Limited
Partners
|
||||||||
|
- Common
|
127,259 | 102,130 | ||||||
|
- Subordinated
|
82,794 | 66,653 | ||||||
|
Accumulated
other comprehensive loss
|
(43,651 | ) | (10,288 | ) | ||||
|
Total
partners’ / stockholders’ equity
|
172,175 | 185,181 | ||||||
|
Total
liabilities and partners’ / stockholders’ equity
|
700,154 | $ | 556,991 | |||||
5
Capital
Product Partners L.P.
Unaudited
Condensed Consolidated and Combined Statements of Cash Flows
(Notes
1-4)
(In
thousands of United States dollars)
|
For
the years
ended
December 31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 49,263 | $ | 30,959 | ||||
|
Adjustments to reconcile net
income to net cash provided by operating
activities:
|
||||||||
|
Vessel
depreciation and amortization
|
25,031 | 15,271 | ||||||
|
Amortization
of deferred charges
|
393 | 214 | ||||||
|
Loss
on interest rate swap agreement
|
- | 3,763 | ||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Trade
accounts receivable
|
(4,857 | ) | (3,841 | ) | ||||
|
Insurance
claims
|
- | 5 | ||||||
|
Due
from related parties
|
(235 | ) | (4,842 | ) | ||||
|
Prepayments
and other assets
|
(514 | ) | (547 | ) | ||||
|
Inventories
|
177 | (344 | ) | |||||
|
Trade
accounts payable
|
736 | 1,787 | ||||||
|
Due
to related parties
|
1,713 | 3,653 | ||||||
|
Accrued
liabilities
|
440 | (695 | ) | |||||
|
Deferred
revenue
|
890 | 8,552 | ||||||
|
Dry
docking expenses paid
|
(251 | ) | (921 | ) | ||||
|
Net
cash provided by operating activities
|
72,786 | 53,014 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Vessel
acquisitions
|
(200,939 | ) | (331,797 | ) | ||||
|
Increase
of restricted cash
|
(1,250 | ) | (3,250 | ) | ||||
|
Purchase
of short term investment
|
(1,080 | ) | - | |||||
|
Net
cash used in investing activities
|
(203,269 | ) | (335,047 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from issuance of long-term debt
|
199,500 | 305,050 | ||||||
|
Due
to related party
|
60,543 | 109,711 | ||||||
|
Payments
of long-term debt
|
(8,080 | ) | (16,716 | ) | ||||
|
Payments
of related party debt/financing
|
(52,463 | ) | (2,376 | ) | ||||
|
Loan
issuance costs
|
(1,891 | ) | (1,092 | ) | ||||
|
Payment
of offering expenses
|
(249 | ) | - | |||||
|
Excess
of purchase price over book value of vessels acquired from entity under
common control (Note 4)
|
(3,755 | ) | (80,866 | ) | ||||
|
Dividends
paid
|
(39,890 | ) | (42,026 | ) | ||||
|
Cash
balance that was distributed to the previous owner
|
(2 | ) | (2,251 | ) | ||||
|
Capital
contributions
|
- | 31,279 | ||||||
|
Net
cash provided by financing activities
|
153,713 | 300,713 | ||||||
|
Net
increase in cash and cash equivalents
|
23,230 | 18,680 | ||||||
|
Cash
and cash equivalents at beginning of period
|
19,919 | 1,239 | ||||||
|
Cash
and cash equivalents at end of period
|
43,149 | $ | 19,919 | |||||
|
Supplemental
Cash Flow information
|
||||||||
|
Cash
paid for interest
|
$ | 18,163 | $ | 14,640 | ||||
|
Units
issued to acquire vessel owning company of M/T Amore Mio
II.
|
$ | 37,739 | - | |||||
|
Units
issued to acquire vessel owning company of M/T
Aristofanis.
|
$ | 10,066 | - | |||||
|
Change
in payable offering expenses
|
$ | 49 | - | |||||
6
Notes
(1) The unaudited condensed
consolidated and combined statements of income and cash flows for the year ended
December 31, 2008 include the results of operations of M/T Amore Mio II and M/T
Aristofanis which were acquired from an entity under common control on March 27,
2008, and April 30, 2008, respectively, as though the transfers had occurred at
the beginning of the earliest period presented. The unaudited condensed
consolidated and combined statements of income and cash flows for the year ended
December 31, 2007 include the results of operations of M/T Attikos, M/T Amore
Mio II and M/T Aristofanis which were acquired from an entity under common
control on September 24, 2007, March 27, 2008 and April 30, 2008 respectively as
though the transfer had occurred at the beginning of the earliest period
presented. The unaudited condensed consolidated and combined balance sheet as of
December 31, 2007 has been retroactively adjusted to include M/T Amore Mio II
and M/T Aristofanis assets, liabilities and owners equity.
(2) On January 29, 2008, June
17, 2008 and August 20, 2008 the Partnership acquired from Capital Maritime the
shares of the vessel owning company of M/T Alexandros II, M/T Aristotelis II,
and M/T Aris II for a total purchase price of $48,000 each. The vessels have
been recorded in the Partnership's financial statements at the amount of
$46,954, $46,706 and $46,585, respectively, which were reflected in Capital
Maritime's consolidated financial statements, which differ from the acquisition
price by $1,046, $1,294 and $1,415, respectively. The amount of the purchase
price in excess of Capital Maritime's basis of the assets of $3,755 was
recognized as a reduction of partners' equity and is presented as a financing
activity in the statement of cash flows. M/T Alexandros II, M/T Aristotelis II,
and M/T Aris II were delivered to Capital Maritime from the shipyard on January
29, 2008, June 17, 2008, and August 20, 2008 respectively and on the same date
the Partnership acquired the shares of the respective vessel owning companies.
These vessel owning companies did not have an operating history, as such, there
is no information to retroactively adjust that should be considered. Accordingly
the M/T Alexandros II, the M/T Aristotelis II and the M/T Aris II were
transferred to the Partnership at historical cost at the dates of transfer to
the Partnership. All assets, liabilities and equity other than the relevant
vessels, related charter agreements and related permits, which the vessel owning
companies of the M/T Alexandros II, the M/T Aristotelis and the M/T Aris II had
at the time of the transfer, were retained by Capital Maritime.
(3) On March 27, 2008 and
April 30, 2008 the Partnership acquired from Capital Maritime the shares of the
vessel owning companies of M/T Amore Mio II and M/T Aristofanis for a total
consideration of $85,739 and $21,566 respectively. The acquisition of the shares
of the vessel owning company of M/T Amore Mio II was funded by $2,000 from
available cash, $46,000 through a drawn down from the new credit facility of
$350,000, and the remaining amount through the issuance of 2,048,823 common
units to Capital Maritime at a price of $18.42 per unit which represents the
closing price of the Partnership’s units on March 26, 2008 as quoted on Nasdaq
Stock Exchange. The acquisition of the shares of the vessel owning company of
M/T Aristofanis was funded by $11,500 through a drawn down from the new credit
facility of $350,000, and the remaining amount through the issuance of 501,308
common units to Capital Maritime at a price of $20.08 per unit which represents
the closing price of the Partnership’s units on April 29, 2008 as quoted on
Nasdaq Stock Exchange. M/T Amore Mio II and M/T Aristofanis have been recorded
in the Partnership's financial statements at the amount of $85,146 and $10,831
respectively, reflecting their historical cost in Capital Maritime's
consolidated financial statements, and differ from the acquisition price by $593
and $10,735 respectively. The amounts of the purchase price in excess of Capital
Maritime's basis of the M/T Amore Mio II and M/T Aristofanis of $593 and $10,735
respectively were recognized as a reduction of partners' equity. As required by
the provision of Statement of Financial Accounting Standards No. 141, "Business
Combinations" ("SFAS No. 141"), the Partnership accounted for the acquisition of
the vessel owning companies of M/T Amore Mio II and M/T Aristofanis as a
transfer of net assets between entities under common control at Capital
Maritime's carrying amounts (historical cost) of the net assets contributed. In
addition, transfers of net assets between entities under common control are
accounted for as if the transfer occurred at the beginning of the earliest
period presented, and prior years financial statements are retroactively
adjusted to furnish comparative information similar to the pooling-of-interest
method of accounting.
(4) Short term investment
consists of cash time deposit with original maturity of six months.
7
Capital
Product Partners L.P.
Appendix
A – Reconciliation of Non-GAAP Financial Measure
(In
thousands of U.S. dollars)
Description
of Non-GAAP Financial Measure – Operating Surplus
Operating
Surplus represents net income adjusted for non cash items such as depreciation
and amortization expense, unearned revenue and unrealized gain and losses.
Replacement capital expenditures represent those capital expenditures required
to maintain over the long term the operating capacity of, or the revenue
generated by, the Partnership's capital assets. Operating Surplus is a
quantitative standard used in the publicly-traded partnership investment
community to assist in evaluating a partnership's ability to make quarterly cash
distributions. Operating Surplus is not required by accounting principles
generally accepted in the United States and should not be considered as an
alternative to net income or any other indicator of the Partnership's
performance required by accounting principles generally accepted in the United
States. The tables below reconcile Operating Surplus to net income for the three
and twelve month period ended December 31, 2008.
|
Reconciliation
of Non-GAAP Financial Measure –
Operating
Surplus
|
For
the three month period ended December 31, 2008
|
|||||||
|
Net
income
|
$ | 14,260 | ||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
|
Depreciation
and amortization
|
6,906 | |||||||
|
Deferred
revenue
|
6 | 6,912 | ||||||
|
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
21,172 | |||||||
|
Replacement
Capital Expenditures
|
(3,814 | ) | ||||||
|
OPERATING
SURPLUS
|
17,358 | |||||||
|
Reduction
on recommended reserves from previous periods
|
21,956 | |||||||
|
AVAILABLE
CASH
|
39,314 | (*) | ||||||
* The
amount of available cash for the three month period ended December 31, 2008
includes $12,470 to be distributed on Incentive Distribution Rights of the
Partnership’s general partner in connection with the Partnership's fourth
quarter distribution.
8
Capital
Product Partners L.P.
Appendix
A – Reconciliation of Non-GAAP Financial Measure - Continued
(In
thousands of U.S. dollars)
Description
of Non-GAAP Financial Measure – Operating Surplus - Continued
|
Reconciliation
of Non-GAAP Financial Measure –
Operating
Surplus
|
For
the twelve month period ended December 31, 2008
|
|||||||
|
Net
income
|
$ | 49,263 | ||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
|
Depreciation
and amortization
|
25,424 | |||||||
|
Deferred
revenue
|
602 | |||||||
|
Amore
Mio II and Aristofanis net income in 2008 prior to their contribution to
the Partnership
|
1,504 | |||||||
|
Amore
Mio II and Aristofanis depreciation and amortization in 2008 prior to
their contribution to the Partnership
|
(1,329 | ) | 26,201 | |||||
|
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
75,464 | |||||||
|
Replacement
Capital Expenditures
|
(13,572 | ) | ||||||
|
OPERATING
SURPLUS
|
61,892 | |||||||
|
Reduction
on recommended reserves from previous periods
|
8,317 | |||||||
|
AVAILABLE
CASH
|
70,209 | (*) | ||||||
* The
amount of available cash for the twelve month period ended December 31, 2008
includes $12,470 to be distributed on Incentive Distribution Rights of the
Partnership’s general partner in connection with the Partnership's fourth
quarter distribution.
9