UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
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 April, 2016
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 ¨
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): ¨
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 ¨ No x
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
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 April 26, 2016.
Attached as Exhibit II is a press release of Capital Product Partners LP, dated April 26, 2016.
Attached as Exhibit III is a press release of Capital Product Partners LP, dated April 22, 2016.
Attached as Exhibit IV is Capital Product Partners LP’s First Quarter 2016 Earnings Presentation, dated April 26, 2016.
Exhibit I is hereby incorporated by reference into the registrant’s Registration Statements on Form F-3 (File Nos. 333-210394 and 333-189603).
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. | ||||
| Dated: April 27, 2016 | By: | Capital GP L.L.C., its general partner | ||
| /s/ Jerry Kalogiratos | ||||
| Name: Jerry Kalogiratos | ||||
| Title: Chief Executive Officer and | ||||
| Chief Financial Officer of Capital GP L.L.C. | ||||
Exhibit I
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES FIRST QUARTER 2016 FINANCIAL RESULTS, QUARTERLY DISTRIBUTIONS ON COMMON AND CLASS B UNITS AND NEW COMMON UNIT DISTRIBUTION GUIDANCE OF $0.30 PER YEAR
ATHENS, GREECE — (Marketwired) – 4/26/16 — Capital Product Partners L.P. (the “Partnership” or “CPLP”) (NASDAQ: CPLP), an international diversified shipping partnership, today released its financial results for the first quarter ended March 31, 2016 and announced distributions on the Partnership’s common and Class B units.
Management Commentary
“The board of directors (the “Board”) today announced the creation of a capital reserve, a related reduction in available cash distributable on common units and the resetting of the common unit distribution level to a new sustainable path. Accordingly, our Board has fixed our common unit distribution for the first quarter of 2016 at $0.075 per common unit and issued a new annual distribution guidance of $0.30 per common unit, with the expectation to maintain that annual distribution level through 2018.
“Over the last few quarters, the Partnership has experienced a significant deterioration in the trading price of its common units and, as a result, a sharp increase in its cost of capital. This deterioration has occurred against the backdrop of a severe equity and debt market pricing dislocation for a number of publicly traded master limited partnerships. In practice, this means that our ability to access capital markets is currently severely restricted. In addition, following a prolonged downturn in the container and dry cargo shipping markets, Hyundai Merchant Marine Ltd (“HMM”), one of our largest charterers in terms of revenues, has engaged in a restructuring process, which, even if completed successfully, could potentially result in a substantial loss of revenues for the Partnership.
“In the context of high capital costs and a potential decrease in revenues, one of our credit facilities has started amortizing in the first quarter of 2016, while our three other credit facilities will start amortizing in the fourth quarter of 2017. As a result, we are due to repay approximately $175.7 million of debt during the period between the first quarter of 2016 and the end of 2018.
“In the past, we successfully managed to extend the non-amortizing periods and maturities of our credit facilities, which is not practicable today in a cost effective manner. In light of these circumstances, the Board of the Partnership has decided to reserve approximately $14.6 million on a quarterly basis to fully provide for the debt repayments coming due in the next three years, up until the end of 2018.
“We expect that these actions and our new annual distribution level will allow us to maintain a strong balance sheet. We also expect the new distribution level to be sustainable, even if the attempted restructuring of HMM is unsuccessful and we are forced to re-deploy the five vessels under charter with HMM in the currently weak container market.
“Based on our contracted cash flow in the coming years, we expect the new distribution level to provide a healthy common unit distribution coverage ratio after giving effect to the new reserves, even allowing for the adverse events mentioned above.
“We intend to revisit our annual distribution guidance from time to time, including if the Partnership’s access to the capital markets improves, if we are successful in refinancing our debt obligations in the coming years under favorable terms or if we are able to pursue accretive transactions by expanding our asset base and increasing the long term distributable cash flow of the Partnership.”
First Quarter 2016 Financial Results
The Partnership’s net income for the quarter ended March 31, 2016 was $12.1 million. After taking into account the preferred interest in net income attributable to the unit holders of the 12,983,333 Class B Convertible Preferred Units outstanding as of March 31, 2016 (the “Class B Units” and the “Class B Unitholders”), and the general partner’s interest in the Partnership’s net income, the result for the quarter ended March 31, 2016 was $0.08 net income per common unit, compared to $0.10 net income per common unit during the previous quarter ended December 31, 2015 and $0.09 net income per common unit during the first quarter of 2015.
Operating surplus, prior to Class B Units distributions for the quarter ended March 31, 2016, was $32.8 million, which is $2.4 million lower than the $35.2 million in the fourth quarter of 2015 and $2.9 million higher than the $29.9 million in the first quarter of 2015. The Board has decided to put aside $14.6 million in capital reserves for the quarter, a level that we expect to maintain for the foreseeable future. The operating surplus adjusted for the capital reserves and the payment of distributions to the Class B Unitholders before other cash reserves was $15.4 million for the quarter ended March 31, 2016. 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 refer to “Appendix A” at the end of the press release for a reconciliation of this non-GAAP measure with net income.
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Total revenues for the first quarter of 2016 reached $58.0 million compared to $48.9 million during the first quarter of 2015, corresponding to an increase of 19%. The increase is mainly a result of the increased size of the Partnership’s fleet.
Total expenses for the first quarter of 2016 were $40.0 million compared to $33.1 million in the first quarter of 2015. Total vessel operating expenses during the first quarter of 2016 amounted to $19.3 million compared to $15.8 million during the first quarter of 2015, corresponding to an increase of 22%. The increase reflects primarily the increase of our fleet’s size. Total expenses for the first quarter of 2016 also include vessel depreciation and amortization of $17.5 million compared to $14.4 million in the first quarter of 2015 corresponding to an increase of 22%, also as a result of our increased fleet size. General and administrative expenses for the first quarter of 2016 amounted to $1.3 million, compared to $1.8 million in the first quarter of 2015.
Total other expense, net for the first quarter of 2016 amounted to $5.9 million, compared to $3.6 million for the first quarter of 2015. The increase is principally due to the higher interest costs we incurred in the first quarter of 2016 and the gain from exchange differences we recognized during the first quarter of 2015.
As of March 31, 2016, total partners’ capital amounted to $918.0 million corresponding to a decrease of $19.8 million from the total partners’ capital as of December 31, 2015, which amounted to $937.8 million. The decrease primarily reflects distributions declared and paid during the first quarter of 2016, partially offset by net income for the period.
As of March 31, 2016, the Partnership’s total debt increased by $30.8 million to $602.4 million, compared to total debt of $571.6 million as of December 31, 2015. The increase was due to the $35.0 million drawdown under our senior secured credit facility with ING Bank to fund the acquisition of the M/V ‘CMA CGM Magdalena’, which was delivered on February 26, 2016, partially offset by $4.2 million of scheduled loan principal payments during the first quarter of 2016 under the same credit facility.
Fleet Developments
On February 3, 2016, the Partnership announced that it has secured new time charter employments for the M/V ‘Agamemnon’ (108,892 dwt / 8,266 TEU, container carrier built 2007, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea) and the M/V ‘Archimidis’ (108,892 dwt / 8,266 TEU, container carrier built 2006, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea). Both vessels have been chartered to Pacific International Lines (‘PIL’) for 12 months (+/- 30 days). The charter of the M/V ‘Archimidis’ commenced on April 17, 2016 and that of M/V ‘Agamemnon’ is expected to commence in early May 2016. The charterer has the option to extend both charters for an additional 12 months (+/- 60 days) at an increased rate.
3
On February 26, 2016, the Partnership took delivery of the M/V ‘CMA CGM Magdalena’ (115,639 dwt / 9,288 TEU, Eco-Flex, Wide Beam Containership built 2016, Daewoo-Mangalia Heavy Industries S.A.), the last of five vessels that we had agreed to acquire from our sponsor, Capital Maritime & Trading Corp. (‘Capital Maritime’). The M/V ‘CMA CGM Magdalena’ commenced its time charter to CMA-CGM S.A. for five years (-30/+90 days) at a gross daily rate of $39,250.
Following the delivery of the M/V ‘CMA CGM Magdalena’, the Partnership’s charter coverage for 2016 and 2017 stands at 92% and 73%, respectively.
Market Commentary
Product & Crude Tanker Markets
The product tanker market experienced weaker spot charter rates in the first quarter of 2016 compared to the previous quarter. The relatively warm weather for this time of the year, along with high product inventories has had a negative impact on product tanker demand in the first three months of 2016. In addition, the spring refinery maintenance peak has shifted to February-March from the more usual April-May period, which resulted in lower chartering volumes and exerted downward pressure on product tanker spot earnings. As a result, the transatlantic trade saw weaker spot rates towards the end of the quarter, while rates from the U.S. Gulf for ships sailing to Latin America remained at relatively strong levels on the back of firm demand and higher exports from the region continued into the first quarter of 2016.
In the time charter market, Medium Range (“MR”) rates remained close to the historical average, but were on average weaker, when compared to the previous quarter, as a result of the softer spot rate environment.
On the supply side, there was minimal activity in terms of new orders for product tankers. Analysts expect that net fleet growth for product tankers for 2016 will be in the region of 5.1%, while overall demand for product tankers for the year is estimated to grow at 3.7%, as the refinery capacity expansion, predominantly in the Eastern hemisphere- continues to generate increased ton mile demand.
4
The Suezmax crude tanker market remained strong in the first quarter of 2016. However, rates retreated from the seasonably high rates experienced during the previous quarter. The market was driven lower by softer demand resulting from refinery maintenance and relatively warmer weather conditions. On the other hand, Chinese demand for crude imports was solid, with imports rising to new record levels, partially offsetting weaker demand in other regions.
Period rates for Suezmaxes decreased compared to the previous quarter primarily due to the lower rates experienced in the spot market.
On the supply side, the Suezmax orderbook represented, at the end of the first quarter of 2016, approximately 23.0% of the current fleet. However, contracting activity decreased year to date with only four new vessel orders being placed. Suezmax tanker demand is projected to continue growing in 2016 on the back of further growth in crude shipments from the Caribbean, West Africa and the Middle East to China and India. Overall, crude Suezmax deadweight demand is projected to expand by 3.0% in 2016, whereas the fleet is forecasted to expand by 4.6%.
Post-panamax Container Market
After experiencing very low charter activity towards the end of the previous year, post-panamax container vessels saw increased fixing activity from the first quarter of 2016 onwards. However, the buildup of idle container vessels from the previous quarter and particularly in the post-panamax segment meant that owners did not manage to profit from the increased activity, as charter rates remained at historically low levels.
Analysts’ expectations for demand growth in 2016 have been revised to 4.1%, while the supply of vessels is expected to increase by 3.9%.
The orderbook compared to the current container fleet stands at 18%, which is the lowest since 2003. At the same time, the container market is experiencing high demolition activity with 105,510 TEU removed from the fleet in the first quarter of 2016 with an average age of 19.7 years. In addition, the ordering of container vessels has almost come to a complete standstill for larger container vessels, while newbuilding slippage is rising.
5
Quarterly Common and Class B Unit Cash Distribution
On April 26, 2016, the Board of the Partnership declared a cash distribution of $0.075 per common unit for the first quarter of 2016 payable on May 13, 2016 to common unit holders of record on May 6, 2016.
In addition, on April 26, 2016, the Board of the Partnership declared a cash distribution of $0.21375 per Class B Unit for the first quarter of 2016, in line with the Partnership’s Second Amended and Restated Partnership Agreement, as amended. The first quarter of 2016 Class B Unit cash distribution will be paid on May 10, 2016 to Class B Unitholders of record on May 3, 2016.
Conference Call and Webcast
Today, April 26, 2016, the Partnership will host an interactive conference call at 09:00 am Eastern Time to discuss the financial results.
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (U.S. Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote “Capital Product Partners.”
A replay of the conference call will be available until May 3, 2016 by dialing 1 866 247 4222 (U.S. Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 69648481#
Slides and Audio Webcast
There will also be a simultaneous live webcast over the Internet, through the Capital Product Partners website, www.capitalpplp.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
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 tanker, container and drybulk vessels. The Partnership currently owns 35 vessels, including twenty modern MR (Medium Range) product tankers, four Suezmax crude oil tankers, ten post panamax container vessels and one Capesize bulk carrier. All of its vessels are under period
6
charters to BP Shipping Limited, Cargill International S.A., CMA-CGM S.A., Cosco Bulk Carrier Co. Ltd., CSSA S.A. (Total S.A.), Flota Petrolera Ecuatoriana (“Flopec”), Hyundai Merchant Marine Co. Ltd., Overseas Shipholding Group Inc., Petróleo Brasileiro S.A. (‘Petrobras’), Pacific International Lines (‘PIL’), Repsol Trading S.A., Shell International Trading & Shipping Company Ltd., Stena Bulk A.B., and Capital Maritime.
For more information about the Partnership, please visit our website: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, cash generation, our ability to repay external debt, future earnings, our expectations regarding employment of our vessels, redelivery dates and charter rates, fleet growth, as well as market and charter rate expectations, charterers’ performance, and our expectations or objectives regarding future distribution amounts, our ability to pursue growth opportunities and grow our distributions and annual distribution guidance, are 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 units.
CPLP-F
Contact Details:
Capital GP L.L.C.
Jerry Kalogiratos
CEO and CFO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Investor Relations / Media
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source: Capital Product Partners L.P.
7
Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Comprehensive Income
(In thousands of United States Dollars, except for number of units and earnings per unit)
| For the three month periods ended March 31, |
||||||||
| 2016 | 2015 | |||||||
| Revenues |
47,329 | 30,130 | ||||||
| Revenues – related party |
10,718 | 18,755 | ||||||
|
|
|
|
|
|||||
| Total Revenues |
58,047 | 48,885 | ||||||
|
|
|
|
|
|||||
| Expenses: |
||||||||
| Voyage expenses |
1,852 | 1,044 | ||||||
| Voyage expenses - related party |
101 | 89 | ||||||
| Vessel operating expenses |
16,719 | 12,812 | ||||||
| Vessel operating expenses - related party |
2,616 | 2,955 | ||||||
| General and administrative expenses |
1,265 | 1,837 | ||||||
| Vessel depreciation and amortization |
17,453 | 14,374 | ||||||
|
|
|
|
|
|||||
| Operating income |
18,041 | 15,774 | ||||||
|
|
|
|
|
|||||
| Other income / (expense), net: |
||||||||
| Interest expense and finance cost |
(6,097 | ) | (4,696 | ) | ||||
| Interest and other income |
158 | 1,073 | ||||||
|
|
|
|
|
|||||
| Total other expense, net |
(5,939 | ) | (3,623 | ) | ||||
|
|
|
|
|
|||||
| Net income |
12,102 | 12,151 | ||||||
|
|
|
|
|
|||||
| Preferred unit holders’ interest in Partnership’s net income |
2,775 | 2,810 | ||||||
| General Partner’s interest in Partnership’s net income |
185 | 185 | ||||||
| Common unit holders’ interest in Partnership’s net income |
9,142 | 9,156 | ||||||
| Net income per: |
||||||||
| • Common unit basic and diluted |
0.08 | 0.09 | ||||||
| Weighted-average units outstanding: |
||||||||
| • Common units basic and diluted |
119,559,456 | 104,308,293 | ||||||
| Comprehensive income: |
||||||||
| Partnership’s net income |
12,102 | 12,151 | ||||||
|
|
|
|
|
|||||
| Comprehensive and other comprehensive income: |
12,102 | 12,151 | ||||||
|
|
|
|
|
|||||
8
Capital Product Partners L.P.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars, except for number of units and earnings per unit)
| As of March 31, 2016 |
As of December 31, 2015 |
|||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
40,271 | 90,190 | ||||||
| Trade accounts receivable, net |
3,401 | 2,680 | ||||||
| Prepayments and other assets |
2,766 | 2,547 | ||||||
| Inventories |
4,655 | 4,407 | ||||||
|
|
|
|
|
|||||
| Total current assets |
51,093 | 99,824 | ||||||
|
|
|
|
|
|||||
| Fixed assets |
||||||||
| Advances for vessels under construction – related party |
— | 18,172 | ||||||
| Vessels, net |
1,387,213 | 1,315,485 | ||||||
|
|
|
|
|
|||||
| Total fixed assets |
1,387,213 | 1,333,657 | ||||||
|
|
|
|
|
|||||
| Other non-current assets |
||||||||
| Above market acquired charters |
100,249 | 100,518 | ||||||
| Deferred charges, net |
3,461 | 3,482 | ||||||
| Restricted cash |
17,500 | 17,000 | ||||||
| Prepayments and other assets |
2,058 | 1,394 | ||||||
|
|
|
|
|
|||||
| Total non-current assets |
1,510,481 | 1,456,051 | ||||||
|
|
|
|
|
|||||
| Total assets |
1,561,574 | 1,555,875 | ||||||
|
|
|
|
|
|||||
| Liabilities and Partners’ Capital |
||||||||
| Current liabilities |
||||||||
| Current portion of long-term debt, net |
15,910 | 11,922 | ||||||
| Trade accounts payable |
9,607 | 8,431 | ||||||
| Due to related parties |
19,310 | 22,154 | ||||||
| Accrued liabilities |
6,452 | 7,872 | ||||||
| Deferred revenue |
8,631 | 10,867 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
59,910 | 61,246 | ||||||
|
|
|
|
|
|||||
| Long-term liabilities |
||||||||
| Long-term debt, net |
582,932 | 555,888 | ||||||
| Deferred revenue |
696 | 921 | ||||||
|
|
|
|
|
|||||
| Total long-term liabilities |
583,628 | 556,809 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
643,538 | 618,055 | ||||||
|
|
|
|
|
|||||
| Commitments and contingencies |
||||||||
| Partners’ capital |
918,036 | 937,820 | ||||||
|
|
|
|
|
|||||
| Total liabilities and partners’ capital |
1,561,574 | 1,555,875 | ||||||
|
|
|
|
|
|||||
9
Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
| For the three month periods ended March 31, |
||||||||
| 2016 | 2015 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income |
12,102 | 12,151 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Vessel depreciation and amortization |
17,453 | 14,374 | ||||||
| Amortization of deferred charges |
544 | 155 | ||||||
| Amortization of above market acquired charters |
3,475 | 3,794 | ||||||
| Equity compensation expense |
267 | — | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Trade accounts receivable |
(721 | ) | 811 | |||||
| Prepayments and other assets |
(883 | ) | (160 | ) | ||||
| Inventories |
(248 | ) | (409 | ) | ||||
| Trade accounts payable |
382 | 1,820 | ||||||
| Due from related parties |
— | (432 | ) | |||||
| Due to related parties |
(2,844 | ) | (4,822 | ) | ||||
| Accrued liabilities |
(1,466 | ) | (91 | ) | ||||
| Deferred revenue |
(2,461 | ) | (2,284 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
25,600 | 24,907 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Vessel acquisitions and improvements |
(73,578 | ) | (30,245 | ) | ||||
| Increase in restricted cash |
(500 | ) | (500 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(74,078 | ) | (30,745 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of long-term debt |
35,000 | 16,750 | ||||||
| Deferred charges paid |
(69 | ) | — | |||||
| Payments of long-term debt |
(4,219 | ) | (1,350 | ) | ||||
| Dividends paid |
(32,153 | ) | (27,733 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(1,441 | ) | (12,333 | ) | ||||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
(49,919 | ) | (18,171 | ) | ||||
|
|
|
|
|
|||||
| Cash and cash equivalents at beginning of period |
90,190 | 164,199 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
40,271 | 146,028 | ||||||
|
|
|
|
|
|||||
| Supplemental cash flow information |
||||||||
| Cash paid for interest |
6,562 | 4,074 | ||||||
| Non-Cash Investing Activities |
||||||||
| Capital expenditures included in liabilities |
169 | — | ||||||
| Deferred charges included in liabilities |
2,358 | 956 | ||||||
10
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 and deferred revenue. 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 a non-GAAP financial measure 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 table below reconciles Operating Surplus to net income for the following periods:
| Reconciliation of Non-GAAP Financial Measure – Operating Surplus |
For the three month period ended March 31, 2016 |
For the three month period ended March 31, 2015 |
For the three month period ended December 31, 2015 |
|||||||||
| Net income |
$ | 12,102 | $ | 12,151 | $ | 15,356 | ||||||
|
|
|
|
|
|
|
|||||||
| Adjustments to reconcile net income to operating surplus prior to class B preferred units distribution |
||||||||||||
| Depreciation and amortization |
18,265 | 14,586 | 17,376 | |||||||||
| Deferred revenue |
2,404 | 3,126 | 2,429 | |||||||||
|
|
|
|
|
|
|
|||||||
| OPERATING SURPLUS PRIOR TO CAPITAL RESERVE AND CLASS B PREFERRED UNITS DISTRIBUTION |
32,771 | 29,863 | 35,161 | |||||||||
|
|
|
|
|
|
|
|||||||
| Capital reserve |
(14,644 | ) | — | — | ||||||||
|
|
|
|
|
|
|
|||||||
| OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION |
18,127 | 29,863 | 35,161 | |||||||||
|
|
|
|
|
|
|
|||||||
| Class B preferred units distribution |
(2,775 | ) | (2,801 | )1 | (2,853 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| ADJUSTED OPERATING SURPLUS |
15,352 | 27,062 | 32,308 | |||||||||
|
|
|
|
|
|
|
|||||||
| Increase/(decrease) in other cash reserves |
6,138 | 1,547 | (3,008 | ) | ||||||||
|
|
|
|
|
|
|
|||||||
| AVAILABLE CASH |
$ | 9,214 | $ | 28,609 | 1 | $ | 29,300 | |||||
|
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|
|
|
|
|
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| 1 | Includes distributions to the Partnership’s unit holders as of April 30, 2015. |
11
Exhibit II
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES CASH DISTRIBUTION
ATHENS, GREECE – 4/26/16 — Capital Product Partners L.P. (NASDAQ: CPLP) today announced that its board of directors has declared a cash distribution of $0.075 per common unit for the first quarter of 2016 ended March 31, 2016.
The first quarter common unit cash distribution will be paid on May 13, 2016, to unit holders of record on May 6, 2016.
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 tanker, container and drybulk vessels. The Partnership currently owns 35 vessels, including twenty modern MR (Medium Range) product tankers, four Suezmax crude oil tankers, ten post panamax container vessels and one Capesize bulk carrier. All of its vessels are under period charters to BP Shipping Limited, Cargill International S.A., CMA-CGM S.A., Cosco Bulk Carrier Co. Ltd., CSSA S.A. (Total S.A.), Flota Petrolera Ecuatoriana (“Flopec”), Hyundai Merchant Marine Co. Ltd., Overseas Shipholding Group Inc., Pacific International Lines (‘PIL’), Petróleo Brasileiro S.A. (‘Petrobras’), Repsol Trading S.A., Shell International Trading & Shipping Company Ltd., Stena Bulk A.B., and Capital Maritime.
For more information about the Partnership, please visit our website: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts 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
Contact Details:
Capital GP L.L.C.
Jerry Kalogiratos
CEO and CFO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Investor Relations / Media
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source: Capital Product Partners L.P.
Exhibit III
Capital Product Partners L.P. Schedules First Quarter 2016 Earnings Release, Conference Call and Webcast
ATHENS, GREECE — (Marketwired) – 04/22/16 — Capital Product Partners L.P. (the “Partnership”) (NASDAQ: CPLP), an international diversified shipping partnership, announced today that before the NASDAQ market opens on Tuesday, April 26, 2016, the Partnership will release financial results for the first quarter ended March 31, 2016.
On the same day, Tuesday, April 26, 2016, the Partnership will host an interactive conference call at 9:00am Eastern Time to discuss the financial results.
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (U.S. Toll Free Dial In), 0800 953 0329 (UK Toll Free Dial In) or +44 (0)1452 542 301 (Standard International Dial In). Please quote “Capital Product Partners.”
A replay of the conference call will be available until May 3, 2016 by dialing 1 866 247 4222 (U.S. Toll Free Dial In), 0800 953 1533 (UK Toll Free Dial In) or +44 (0)1452 550 000 (Standard International Dial In). Access Code: 69648481#
Slides and Audio Webcast
There will also be a simultaneous live webcast over the Internet, through the Capital Product Partners website, www.capitalpplp.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
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 tanker, container and drybulk vessels. The Partnership currently owns 35 vessels, including twenty modern MR (Medium Range) product tankers, four Suezmax crude oil tankers, ten Post Panamax container vessels and one Capesize bulk carrier. All of its vessels are under period charters to BP Shipping Limited, Cargill International S.A., CMA-CGM S.A., Cosco Bulk Carrier Co. Ltd., CSSA S.A. (Total S.A.), Flota Petrolera Ecuatoriana (“Flopec”), Hyundai Merchant Marine Co. Ltd., Overseas Shipholding Group Inc., Pacific International Lines (Pte) Ltd, Singapore, Petróleo Brasileiro S.A. (‘Petrobras’), Repsol Trading S.A., Shell International Trading & Shipping Company Ltd., Stena Bulk A.B., and Capital Maritime.
For more information about the Partnership, please visit our website: www.capitalpplp.com
Forward-Looking Statements
The statements in this press release that are not historical facts 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
Contact Details:
Capital GP L.L.C.
Jerry Kalogiratos
CEO and CFO
+30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Investor Relations / Media
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source: Capital Product Partners L.P.
| Exhibit IV
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First Quarter 2016 Earnings Presentation April 26, 2016 Capital Product Partners L.P. www.capitalpplp.com capital product partners l.p. cplp nasdaq listed
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CAPITAL PRODUCT PARTNERS L.P. Forward Looking Statements This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect CPLP’s management’s current assumptions and expectations with respect to expected future events and performance. The statements in this presentation that are not historical facts, including, among other things, cash generation, our ability to repay external debt, future earnings, our expectations regarding employment of our vessels, redelivery dates and charter rates, fleet growth, as well as market and charter rate expectations, charterer’s performance, and our expectations or objectives regarding future distribution amounts, our ability to pursue growth opportunities and grow our distributions and annual distribution guidance, 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 actual results to be materially different from those expressed or implied in the forward-looking statements. Factors that could cause actual results to be materially different include those set forth in the “Risk Factors” section of our annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. 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 units. For more information about the Partnership, please visit our website: www.capitalpplp.com 1
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CAPITAL PRODUCT PARTNERS L.P. First Quarter 2016 Highlights Cash distribution for 1Q2016 of $0.075 per common unit and $0.21375 per class B unit. 1.7x common unit distribution coverage after setting aside $14.6 million as a new capital reserve. Net income for 1Q2016: $12.1 million. Hyundai Merchant Marine Ltd (‘HMM’) engaged in restructuring process that may, among other things, result in a reduction of the charter hire rate for the 5 vessels currently employed with HMM. Drydocking of the M/T ‘Anemos I’ and M/T ‘Alkiviadis’. Successful delivery of the M/V ‘CMA CGM Magdalena’ with 5-year charter to CMA-CGM in February 2016. Fixed the M/V ‘Agamemnon’ and M/V ‘Archimidis’ for 12+12 months. Average remaining charter duration 6.2 years with 92% charter coverage for 2016 and 73% charter coverage for 2017 (including HMM charters). 2
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CAPITAL PRODUCT PARTNERS L.P. New Distribution Guidance New annual distribution guidance of $0.30 per common unit. We expect to maintain this annual Revised Distribution Guidance distribution level through 2018. Establishing quarterly reserves of $14.6 million, to fully provide for debt repayments between 2016-2018 amounting to $175.7 million: (in $millions) Debt amortization (full year) Credit Facility 2016 2017 2018 2019 Thereafter HSH (2007 credit facility)—13.0 51.9 121.1—HSH (2008 credit facility)—9.2 36.9 135.5—Credit Agricole ( 2011 credit facility)—1.0 13.0 — ING (2013 credit facility) 16.9(1) 16.9 16.9 16.9 157.4 Total 16.9 40.1 118.7 273.5 157.4 $175.7 million New distribution level expected to be sustainable even if the attempted HMM restructuring is unsuccessful. Potential for upward revision of distribution guidance if: Access to capital markets improves Refinance our debt obligations under favorable terms Complete accretive transactions, expanding our asset base and increasing the long-term distributable cash flow of the Partnership (1) $4.2 million paid on March 30, 2016 3
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CAPITAL PRODUCT PARTNERS L.P. Operating Surplus For Calculation Of Unit Distribution ($ In Thousands) For the Three-Month For the Three-Month Period Ended Period Ended March 31, 2016 December 31, 2015 Net income $12,102 $15,356 Adjustments to net income Depreciation and amortization 18,265 17,376 Deferred revenue 2,404 2,429 OPERATING SURPLUS PRIOR TO $32,771 $35,161 CAPITAL RESERVE AND CLASS B PREFERRED UNITS DISTRIBUTION Capital reserve(14,644)—OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS 18,127 35,161 DISTRIBUTION Class B preferred units distribution (2,775) (2,853) ADJUSTED OPERATING SURPLUS 15,352 32,308 Increase on cash reserves (6,138) (3,008) AVAILABLE CASH $9,214 $29,300 Common Unit Coverage: 1.7x 4
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Statements Of Comprehensive Income CAPITAL PRODUCT PARTNERS L.P. ($ In Thousands) For the Three- Month Period For the Three- Month Period Ended Ended March 31, 2016 March 31, 2015 Revenues $47,329 $30,130 Revenues – related party 10,718 18,755 Total Revenues 58,047 48,885 Expenses: Voyage expenses 1,852 1,044 Voyage expenses – related party 101 89 Vessel operating expenses 16,719 12,812 Vessel operating expenses – related party 2,616 2,955 General and administrative expenses 1,265 1,837 Depreciation & amortization 17,453 14,374 Operating income 18,041 15,774 Other income (expense), net Interest expense and finance cost(6,097)(4,696) Other income 158 1,073 Total other expense, net(5,939)(3,623) Partnership’s net income $12,102 $12,151 5
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Strong Balance Sheet CAPITAL PRODUCT PARTNERS L.P. ($ In Thousands) As Of As Of March 31, 2016 December 31, 2015 Assets Total Current Assets 51,093 99,824 Total Fixed Assets 1,387,213 1,333,657 Other Non-Current Assets 123,268 122,394 Total Assets $1,561,574 $1,555,875 Liabilities and Partners’ Capital Total Current Liabilities $59,910 $61,246 Total Long-Term Liabilities 583,628 556,809 Total Partners’ Capital 918,036 937,820 Total Liabilities and Partners’ Capital $1,561,574 $1,555,875 Low Leverage: Net Debt/Capitalization: 35.7% 6
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New Vessels Deliveries & New Charter Employment CAPITAL PRODUCT PARTNERS L.P. Earliest Charter Name DWT Built Gross Rate (Per Day) Charterer Expiry M/V Agamemnon 108,892 2007—April 2017 M/V Archimidis 108,892 2006—March 2017 M/V CMA CGM 115,639 2016 $39,250 January 2021 Magdalena Secured employment for the M/V ‘Agamemnon’ and M/V ‘Archimidis’ for 12 months with Pacific International Lines. The charterer has the option to extend the contract for an additional year at an increased rate. Took delivery of the M/V ‘CMA CGM Magdalena’ on February 26, 2016. The vessel commenced its time charter to CMA CGM S.A. for five years (-30/+90 days) at a gross daily rate of $39,250. Increased customer diversification: 5 vessels out of fleet of 35 currently fixed to our sponsor, Capital Maritime, compared to 12 vessels out of fleet of 31 as of 1Q2015. 7
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CAPITAL PRODUCT PARTNERS L.P. Strong Charter Coverage At Attractive Rates Charter Profile Expiry Of Current Charters Rates Commentary Vessel Type Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Gross Rate ? Solid Product & Crude Crude tanker Miltiadis M II $ 35,000 Tanker Period Market: Crude tanker Amore Mio II $ 33,750 Product tanker Alkiviadis $ 15,125 Three-year MR and Product tanker Agisilaos $ 14,500 Product tanker Aktoras $7,2501 Suezmax Time Charter Product tanker Aristotelis $ 19,000(TC) rates currently Crude tanker Amoureux $ 29,000 Containership Archimidis—estimated at ca. $16,250 Product tanker Atlantas $7,2501 Containership Agamemnon—per day and $27,500 per Product tanker Active $ 17,700 day, respectively. Product tanker Amadeus $ 17,000 Product tanker Alexandros II $6,2501 Product tanker Aiolos $7,0001 Product tanker Ayrton II $ 18,000 CPLP Positioned To Crude tanker Aias $ 26,500 Capitalize On Improving Product tanker Assos $ 15,400 Product Tanker Rates: Product tanker Aristotelis II $6,2501 Product tanker Avax $ 15,400 CPLP has staggered the Product tanker Axios $ 15,400 charters of many of its Product tanker Aris II $6,2501 Product tanker Atrotos $ 17,750 product and crude tankers Product tanker Arionas $ 19,000 Product tanker Apostolos $ 17,750 in order to take advantage Product tanker Anemos I $ 17,750 of the improving Product tanker Akeraios $ 17,750 Containership CMA CGM Amazon $ 39,250 fundamentals of the Dry Bulk Cape Agamemnon $ 42,200 Containership CMA CGM Uruguay $ 39,250 product and crude tanker Containership CMA CGM Magdalena $ 39,250 industries and reduce time Containership Hyundai Prestige $ 29,350 Containership Hyundai Premium $ 29,350 concentration risk. Containership Hyundai Paramount $ 29,350 Containership Hyundai Privilege $ 29,350 Containership Hyundai Platinum $ 29,350 Revenue Weighted Average Remaining Charter Duration: 6.2 Years 1 Bareboat. 8
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CAPITAL PRODUCT PARTNERS L.P. Container Market Overview Soft sentiment in the container market with charter rates at historically low levels. Increased volumes on Europe – North America trade and higher imports into India Sub Continent/Middle East supported rates at low levels. Idle fleet increased to 8.1% in March, the highest level in six years. Improving supply fundamentals: Container orderbook at 18.0%—the lowest since 2003. Contracting activity has come to a standstill. Increased demolition at 105,510 TEU in 1Q2016 vs. 194,180 TEU in FY2015. Slippage at 14.3% (FY 2015). Overall container vessel demand is forecasted to grow by 4.1% in 2016, exceeding forecasted supply growth of 3.9%. Containership Timecharter Rates $000/day 60 1700 teu grd 1-Yr TC 4400 teu gls 1 Yr TC 6600 teu gls 3-Yr TC 9000 teu gls 3-Yr TC 50 40 30 20 10 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 — — — — — — — Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Containership Supply & Demand Growth Trends 1997-2017 % growth Supply 15% 10% 5% 0% -5% -10% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016f 2017f Source: Clarksons 9
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Product Tanker Market Overview CAPITAL PRODUCT PARTNERS L.P. Weaker spot charter rates in 1Q2016 vs. 4Q2015. Softer product tanker demand due to: Refinery maintenance and lower refinery margins. Limited arbitrage opportunities. Warm weather and high product inventories negatively affecting imports. Increased U.S. product exports and firm Latin America demand supported rates. Active period market, but rates weaker as a result of the softer spot market. Favorable demand and supply dynamics expected to support period rates and activity going forward: Product tanker dwt demand projected to grow by 3.7% in 2016. Limited new contracting activity with only 3 MRs ordered in 1Q2016. Orderbook (2016-2018) for MR tankers at 12.9% of total fleet. Slippage amounting to 32% (FY 2015). Source: Clarksons $/Day 1 & 3 Year MR2 Time Charter Rates vs. CPLP MR2 Average T/C Rate $21,000 1 Yr T/C MR2 Rate 3 Yr T/C MR2 Rate $20,000 CPLP MR2 Average T/C Rate $19,000 $18,000 $17,000 $16,000 $15,000 $14,000 $13,000 $12,000 MR Tankers Orderbook 700 50% Orderbook% of Fleet 45% 600 40% 500 35% Vessels 400 30% of 25% 300 20% Number 200 15% 10% 100 5% 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 T/C Rates 10-Year Average 1-Year T/C $ 17,611 MR Rate 3-Year T/C $ 17,207 MR Rate
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Suezmax Tanker Market Overview CAPITAL PRODUCT PARTNERS L.P. Softer Suezmax market in 1Q2016 on the back of weaker demand. Chartering volumes negatively affected by refinery maintenance and warmer weather conditions. Solid Chinese demand partially offsetting pressure on rates: China’s crude oil imports hit a new record of 8.0 mb/d in February. Lower demand for period business due to weaker spot rates. World oil demand growth estimated at 1.2 mb/d in 2016, according to the IEA. Suezmax dwt demand projected to expand by 3.0% in 2016. US seaborne crude imports to increase 5% in 2016, as shale oil production falls. Suezmax tanker orderbook through 2018 representing 23.0% of current fleet. Limited new ordering: 4 Suezmax new orders in 1Q2016 vs 19 in 1Q2015. High slippage at 38% (FY 2015). Source: Clarksons, IEA $/Day 1 & 3 Year Suezmax T/C Rates vs. CPLP Suezmax Average $44,000 T/C Rate 1 Year Suezmax T/C Rate $39,000 3 Year Suezmax T/C Rate CPLP Average Suezmax T/C Rate $34,000 $29,000 $24,000 $19,000 $14,000 Suezmax Tankers Orderbook 180 50% Orderbook 160 45% % of Fleet 140 40% 120 35% 30% Vessels 100 of 25% 80 20% Number 60 15% 40 10% 20 5% 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Suezmax T/C Rates – 10 Year Average 1-Year Rate $ 30,376 3-Year Rate $ 29,262 11
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Capital Product Partners L.P. CAPITAL PRODUCT PARTNERS L.P. 12