ATHENS, Greece, Jan. 29, 2024 (GLOBE NEWSWIRE) -- Capital Product Partners L.P. (NASDAQ: CPLP) today announced that before the NASDAQ market opens on February 2, 2024, CPLP will release financial results for the fourth quarter ended December 31, 2023. On the same day, Friday, February 2, 2024, CPLP will host an interactive conference call at 10:00 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 fo ...

ATHENS, Greece, Jan. 25, 2024 (GLOBE NEWSWIRE) -- Capital Product Partners L.P. (NASDAQ:CPLP) today announced that its board of directors has declared a cash distribution of $0.15 per common unit for the fourth quarter of 2023 ended December 31, 2023. The fourth quarter common unit cash distribution will be paid on February 13, 2024 to common unit holders of record on February 6, 2024. About Capital Product Partners L.P. Capital Product Partners L.P. (NASDAQ:CPLP), a Marshall Islands limited partnership, is ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $95.5 million, up from $71.9 million in Q3 2022, primarily due to revenue from four new vessels and increased daily rates for LNG carriers [5] - Net income for Q3 2023 was $17 million, compared to $11.5 million in Q3 2022, with net income per common unit rising to $0.84 from $0.57 [12][36] - Total expenses increased to $51 million in Q3 2023 from $40.4 million in Q3 2022, with vessel operating expenses rising to $22.3 million from $17 million [35] - Interest expense and finance costs rose to $27.8 million in Q3 2023 from $14.9 million in Q3 2022, attributed to increased indebtedness and higher interest rates [6] Business Line Data and Key Metrics Changes - The partnership's current fleet charter coverage for 2023 and 2024 stands at 100%, with a remaining charter duration of 6.5 years and a contracted revenue backlog exceeding $1.7 billion [12] - Total contracted revenues for the LNG fleet increased by 127% to $2.5 billion, providing strong cash flow visibility [29] Market Data and Key Metrics Changes - The global LNG market capacity is expected to increase by 70% by 2030, with production capacity projected to exceed 750 million tons annually [45] - The LNG fleet on the water consists of 736 vessels, with an order book of around 300 vessels, indicating a tight supply situation [46] Company Strategy and Development Direction - The company plans to change its name to Capital New Energy Carriers L.P. and transition from an MLP model to a corporate structure, focusing primarily on LNG shipping and energy transition [8][16] - A $500 million rights issue is planned to fund the acquisition of 11 new LNG carriers, with the aim of becoming one of the largest U.S. listed operators of two-stroke LNG carriers [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the LNG market's growth, driven by geopolitical factors and increasing demand for flexible natural gas supply [22] - The company anticipates a significant cash flow generation potential post-transaction, despite a higher unit count after the rights issue [32] Other Important Information - Total debt increased to $1.6 billion, up from $1.3 billion at year-end 2022, primarily due to financing new vessel acquisitions [37] - The company has committed to opportunistically divest from its container vessels while maintaining rights of first refusal on ammonia and CO2 carriers [39] Q&A Session Summary Question: How did the company arrive at the asset valuations? - The valuations were negotiated by independent directors and based on third-party charter attached appraisals and cash flow multiples [68] Question: What is the company's strategy for locking in cash flow visibility for new vessels? - The company is in discussions with charters and aims to capitalize on favorable market conditions for LNG carriers [62] Question: How does the company plan to manage leverage and the sale of container vessels? - The company will approach the market opportunistically for divesting container vessels, with a current net LTV of around 50% [81][83] Question: What are the anticipated hurdles in converting from an MLP to a corporate structure? - Management does not foresee significant hurdles, with discussions ongoing to negotiate terms for corporate governance [94] Question: What is the current liquidity situation in the term charter market for LNG vessels? - The liquidity in the term charter market has slowed compared to the previous year, but the company expects increased activity as older vessels are phased out [98]

Acquisition Details - Capital Product Partners L.P. (CPLP) will acquire certain vessels from Capital Maritime, involving 100% equity interests in Omega Gas Carriers Corp. and other subsidiaries[7]. - CPLP will acquire vessels with an aggregate acquisition price of $220 million, financed through an unsecured seller's credit from Capital Maritime[32]. - The total closing amount for the transactions is projected to be $500 million, which will be financed through a rights offering[61]. - CPLP has entered into agreements for the acquisition of 100% equity interests in CM Subsidiaries that own the vessels, with specific contractual delivery dates outlined[75]. - The acquisition of the remaining vessels is part of a broader strategy to expand CPLP's fleet and market presence[75]. - The Buyer will pay a total Purchase Price of $277,000,000 for the Shares, with a 10% deposit of $27,700,000 already paid and the remaining $249,300,000 due on the Closing Date[167]. - The Closing Date for the sale and transfer of the Shares is set for any date on or prior to January 26, 2025[143]. Rights Offering - CPLP plans to conduct a Rights Offering to finance part of the acquisition, with Capital Maritime agreeing to purchase 100% of any unexercised Common Units at the Rights Offering Price[8]. - The Rights Offering is subject to certain conditions precedent that need to be fulfilled before launch[29]. - CPLP will file a prospectus supplement with the SEC to register the offer and sale of common units related to the rights offering[72]. - The rights offering is set to close on November 24, 2023, for unitholders to participate[59]. - CPLP will commence a Rights Offering on November 27, 2023, with a price per Common Unit set at the greater of $14.25 or 95% of the volume weighted average price, capped at $14.50[104]. - The Rights Offering will remain open for at least 16 days, allowing investors to subscribe for Common Units[115]. - All proceeds from the Rights Offering will be applied toward payment of the Closing Amount[116]. - Capital Maritime will purchase any unexercised Common Units at the Rights Offering Price under the Standby Purchase Agreement[111]. Corporate Governance and Compliance - The agreement includes provisions for corporate governance and fairness opinions to protect the interests of CPLP's common unitholders[9]. - The Conflicts Committee received a fairness opinion from Evercore Group regarding the acquisition prices, confirming they are in the best interest of CPLP and its unitholders[33]. - The financial statements of the Vessel Owning Subsidiary will be accessible for auditing purposes to ensure compliance with applicable securities laws[125]. - The execution of the agreement does not violate any laws or require additional consents from governmental authorities[193]. - The Seller represents that the vessels will be seaworthy and compliant with maritime laws and regulations[124]. - The Vessel Owning Subsidiary is duly incorporated and in good standing under the laws of the Republic of the Marshall Islands, with full corporate power to conduct its business[172]. - There are no existing orders, judgments, or decrees requiring the Vessel Owning Subsidiary to take any action regarding its business or assets[173]. - The Vessel Owning Subsidiary has fulfilled all material obligations under its Contracts prior to the date of the agreement[175]. - The Seller has provided true and correct copies of the organizational documents of the Vessel Owning Subsidiary as of the date of the Agreement[149]. Strategic Initiatives - CPLP intends to explore the disposition of its container ships and will abstain from acquiring additional container ships following the Closing Date[9]. - CPLP's strategy includes leveraging new energy employment opportunities as part of its growth initiatives[76]. - Capital Maritime has granted CPLP rights of first refusal for LNG/C opportunities and new energy vessel opportunities[76]. Name Change - The Board of CPLP has approved a name change and is considering converting CPLP from a Marshall Islands master limited partnership to a corporation[9]. - The Name Change for CPLP to "Capital New Energy Carriers L.P." is expected to be publicly announced by December 31, 2023[158].

Despite the seasonal softening of spot and term rates from the highs of the fourth quarter of 2022, demand for LNG/Cs remains strong. As of July 2023, the 174k cbm 1-year Time Charter rate stands at $140,000/day. Overall, analysts expect the term market to tighten as we approach the winter period, particularly for modern vessels, in view of increased commodity demand. 5 Conference Call Details There will also be a live, and then archived, webcast of the conference call and accompanying slides, available thr ...

Financial Data and Key Metrics Changes - Net income for Q2 2023 was $7.4 million, down from $20.4 million in Q2 2022, with net income per common unit at $0.36 compared to $1 in the previous year [23][27] - Total revenue increased to $88.5 million in Q2 2023 from $74 million in Q2 2022, primarily due to contributions from new vessels [45] - Total expenses rose to $58.6 million in Q2 2023 from $40.9 million in Q2 2022, with a significant increase in interest expense to $25.5 million from $11.7 million due to higher average indebtedness and interest rates [46][47] Business Line Data and Key Metrics Changes - The partnership's charter coverage for 2023 and 2024 stands at 96%, with a remaining charter duration of approximately 6.7 years and a contracted revenue backlog exceeding $1.8 billion [24][53][32] - The delivery of the Buenaventura Express and the new LNG Carrier Asterix I contributed to increased daily rates for LNG carriers, partially offset by the sale of two older container vessels [25][43] Market Data and Key Metrics Changes - The LNG market remains strong, with one-year time charter rates for LNG carriers at $140,000 per day, although there was a seasonal downward pressure on gas prices and spot charter rates in Q2 2023 [33][34] - The container market experienced a softening in the first half of 2023, with the Clarkson's charter index at 103 points, down 76% from its peak in April 2022, but still significantly higher than the 2010-2019 average [65] Company Strategy and Development Direction - The company aims to allocate about 20-25% of free cash flow to unitholders through distributions and unit buybacks, while focusing the remainder on growth opportunities, particularly in the LNG sector [3][14] - The company is strategically positioned to control a fleet of up to 18 latest-generation LNG carriers, enhancing investor visibility and liquidity [36] Management's Comments on Operating Environment and Future Outlook - Management noted the importance of the current interest rate environment and its impact on future distribution policies, maintaining a cautious approach until more visibility is gained [3][4] - The company anticipates a multiyear up-cycle in LNG demand, supported by increasing commodity supply and energy security considerations [70] Other Important Information - The partnership repurchased 156,560 common units at an average cost of $13.30 per unit during Q2 2023 [44] - A noncash impairment charge of $8 million was recorded due to the sale of the Cape Agamemnon, which is expected to be delivered to new owners in Q4 2023 [26][52] Q&A Session Summary Question: What is the company's strategy regarding LNG dropdowns and capital allocation? - Management indicated that growth through dropdowns is a priority, and they will balance this with debt repayment and returning capital to shareholders [14][15] Question: How does the company view the current LNG charter market? - Management noted that while the spot market has softened, the long-term charter market remains firm, with increasing rates for longer-term contracts [74] Question: What are the expectations for future growth and fleet modernization? - Management emphasized the need for strategic thinking regarding fleet modernization and potential monetization of assets to unlock value [72][61]

Exhibit I CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS | | | | Three-month periods ended March 31, | | | | --- | --- | --- | --- | --- | --- | | | 2023 | | 2022 | | Increase/(Decrease) | | Revenues | $81.0 million | | $73.4 million | | 10% | | Expenses | $45.1 million | | $40.2 million | | 12% | | Net Income | $10.0 million | | $25.1 million | | (60%) | | Net Income per common unit | $ | 0.49 | $ | 1.26 | (61%) | | 1 Average number of vessels | | 21.4 | | 21.0 | 2% | • Operat ...

Capital Product Partners L.P. (NASDAQ:CPLP) Q1 2023 Results Conference Call May 5, 2023 10:00 AM ET Company Participants Jerry Kalogiratos - CEO Conference Call Participants Omar Nokta - Jefferies Ben Nolan - Stifel Liam Burke - B. Riley Securities Operator Thank you for standing by, and welcome to the Capital Product Partners' First Quarter 2023 Financial Results Conference Call. We have with us Mr. Jerry Kalogiratos, Chief Executive Officer of the company. At this time, all participants are in a listen-on ...

PART I [Key Information](index=7&type=section&id=Item%203.%20Key%20Information) The Partnership faces principal risks across its industry, operations, financing, regulations, and partnership structure [Risks Related to Our Industry](index=8&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Related%20to%20Our%20Industry) Performance is subject to cyclical shipping markets, vessel oversupply, global economic conditions, and inflationary pressures - The LNG, container, and drybulk shipping industries are **cyclical and volatile**, with recent market fluctuations across all segments[454](index=454&type=chunk) - An **oversupply of vessel capacity** is a significant risk, with large orderbooks for LNG (~50%) and container (~29.1%) vessels as of late 2022[470](index=470&type=chunk) - Shipping demand is influenced by **global economic conditions**, trade policies, and geopolitical events like the Russia-Ukraine conflict[470](index=470&type=chunk)[487](index=487&type=chunk) - **Worldwide inflationary pressures** have increased operating costs and could potentially reduce demand for shipping services[456](index=456&type=chunk)[485](index=485&type=chunk) - **Vessel values are historically volatile**, and declines could lead to impairment charges or breach of loan covenants[457](index=457&type=chunk)[471](index=471&type=chunk) [Risks Related to Our Business and Operations](index=14&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Related%20to%20Our%20Business%20and%20Operations) Operational success depends on managing charterer concentration, reliance on managers, and fleet maintenance risks - The company derives a significant portion of its revenues from a limited number of charterers, with **BP (28%), HMM (18%), Cheniere (17%), and Hapag-Lloyd (16%)** as main sources in 2022[490](index=490&type=chunk) - The business depends significantly on its **Managers and General Partner** for essential services and day-to-day management[492](index=492&type=chunk)[479](index=479&type=chunk) - **Scrubber retrofitting** for three vessels in 2023 will require 40-75 off-hire days per vessel and incur significant costs[494](index=494&type=chunk) - The fleet's **DWT weighted average age was 6.7 years** as of March 2023, and an aging fleet may lead to higher costs and lower desirability[495](index=495&type=chunk) - Since 2011, the board has **not deducted cash reserves for replacement capital expenditures**, increasing reliance on external financing[504](index=504&type=chunk) [Risks Related to Financing Activities](index=22&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Related%20to%20Financing%20Activities) Significant debt of $1.3 billion exposes the company to restrictive covenants and rising interest rate risks - As of December 31, 2022, **total debt was $1,299.2 million**, restricting financial flexibility and cash distributions[507](index=507&type=chunk) - Financing arrangements contain **restrictive covenants**, including minimum liquidity and maximum leverage ratios[508](index=508&type=chunk)[529](index=529&type=chunk) - A significant portion of debt (**$889.8 million**) is floating rate, making the company vulnerable to rising interest rates[511](index=511&type=chunk)[558](index=558&type=chunk) - The **phase-out of LIBOR** introduces uncertainty, as $784.8 million of debt was based on LIBOR as of year-end 2022[2](index=2&type=chunk)[512](index=512&type=chunk) [Regulatory Risks](index=27&type=section&id=D.%20Risk%20Factors%20-%20Regulatory%20Risks) Operations are subject to extensive regulations, including economic sanctions and stringent environmental laws - The company is exposed to risks from **economic sanctions and embargoes**, particularly those related to Russia[3](index=3&type=chunk)[4](index=4&type=chunk)[513](index=513&type=chunk) - **Stringent environmental laws** (e.g., IMO 2020, EU ETS) require substantial compliance costs and may limit operations[5](index=5&type=chunk)[515](index=515&type=chunk)[6](index=6&type=chunk) - Vessels must **maintain class certification** through regular surveys to remain insured and employable[7](index=7&type=chunk)[516](index=516&type=chunk) - The business is **vulnerable to cyber-attacks**, which could disrupt operations and lead to material adverse impacts[10](index=10&type=chunk)[540](index=540&type=chunk) [Risks Inherent in an Investment in Us](index=31&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Inherent%20in%20an%20Investment%20in%20Us) Investment risks include discretionary distributions, conflicts of interest, and limited unitholder rights - The board of directors determines the cash distribution policy and can change it at any time, with **no guarantee of payment**[14](index=14&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) - The Marinakis family holds a **30.2% beneficial interest**, creating significant influence and potential conflicts of interest[17](index=17&type=chunk)[570](index=570&type=chunk)[370](index=370&type=chunk) - The partnership agreement **limits the fiduciary duties** of the General Partner and directors to unitholders[19](index=19&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Unitholder voting rights are limited, with a **4.9% cap** for any person or group owning more than 5% of units[52](index=52&type=chunk)[555](index=555&type=chunk) - The General Partner has a **call right to acquire all outstanding units** if its ownership exceeds 90% of a class[28](index=28&type=chunk)[610](index=610&type=chunk) [Tax Risks](index=38&type=section&id=D.%20Risk%20Factors%20-%20Tax%20Risks) Unitholders face potential adverse tax consequences from PFIC classification and other U.S. tax rules - There is a risk of classification as a **"passive foreign investment company" (PFIC)**, which would have adverse U.S. tax consequences[104](index=104&type=chunk)[105](index=105&type=chunk)[145](index=145&type=chunk) - The Partnership may be subject to a **4% U.S. federal income tax** on U.S. source income if it fails to qualify for the Section 883 exemption[106](index=106&type=chunk)[107](index=107&type=chunk) - Unitholders may be **subject to income tax in non-U.S. countries**, such as Greece, if the Partnership is deemed to conduct business there[108](index=108&type=chunk)[109](index=109&type=chunk) [Information on the Partnership](index=39&type=section&id=Item%204.%20Information%20on%20the%20Partnership) The Partnership focuses on fleet expansion and long-term charters with a modern fleet of 22 vessels [History and Development of the Partnership](index=39&type=section&id=A.%20History%20and%20Development%20of%20the%20Partnership) The Partnership executed significant fleet expansion and financing activities from 2021 through early 2023 - In 2022-2023, CPLP **acquired one LNG carrier and two container vessels** from Capital Maritime, with a third pending[114](index=114&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - In July 2022, the Partnership **sold two container vessels for $130.0 million**[81](index=81&type=chunk) - In 2021, the Partnership **acquired six LNG carriers and three container vessels**, significantly expanding into the LNG sector[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk) - A new **$30.0 million unit repurchase program** was approved in January 2023 for a two-year period[113](index=113&type=chunk) Financing Activities (2021-2023) | Date | Activity | Amount | Purpose | | :--- | :--- | :--- | :--- | | Feb 2023 | Sale & Leaseback (CMBFL) | $184.0M | Finance LNG/C Asterix I acquisition | | Dec 2022 | Japanese Sale & Lease Back | $108.0M | Finance M/V Itajai Express acquisition | | Oct 2022 | Credit Facility (HCOB) | $105.0M | Finance M/V Manzanillo Express acquisition | | Jul 2022 | Bonds (Athens Stock Exchange) | €100.0M | General corporate purposes | | Oct 2021 | Bonds (Athens Stock Exchange) | €150.0M | General corporate purposes | [Business Overview](index=42&type=section&id=B.%20Business%20Overview) The business strategy centers on accretive fleet growth and securing medium- to long-term charters - The Partnership's primary strategies are to **expand the fleet through accretive acquisitions** and maintain long-term fixed charters[74](index=74&type=chunk)[600](index=600&type=chunk) Fleet Composition as of March 31, 2023 | Vessel Type | Count | DWT (millions) | Capacity | Avg. Age (DWT weighted) | | :--- | :--- | :--- | :--- | :--- | | Neo-Panamax Container | 11 | 1.1 | 90,889 TEU | 7.8 years | | Panamax Container | 3 | 0.2 | 15,267 TEU | 14.9 years | | Capesize Bulk Carrier | 1 | 0.2 | N/A | 12.7 years | | LNG Carrier | 7 | 0.6 | 1.2M CBM | 1.6 years | | **Total** | **22** | **2.1** | | **~7.2 years** | - Key customers include major industry players such as **BP, Cheniere, Engie, HMM, CMA CGM, and Hapag-Lloyd**[72](index=72&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - The fleet is managed by **Capital-Executive and Capital Gas** under floating fee management agreements[73](index=73&type=chunk)[79](index=79&type=chunk)[102](index=102&type=chunk) - Operations are extensively regulated by **international, national, and regional bodies** covering environment, safety, and security[172](index=172&type=chunk)[535](index=535&type=chunk) [Organizational Structure](index=52&type=section&id=C.%20Organizational%20Structure) The Partnership is a Marshall Islands limited partnership with 29 wholly-owned vessel-owning subsidiaries - CPLP is a Marshall Islands limited partnership with **29 wholly-owned subsidiaries** in the Marshall Islands, Liberia, and Cyprus[213](index=213&type=chunk) - **22 of the significant subsidiaries** are vessel-owning or leasing entities[213](index=213&type=chunk)[236](index=236&type=chunk) [Property, Plants and Equipment](index=52&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) The Partnership's material property consists almost exclusively of its fleet of vessels securing its debt - The company's **primary material property consists of its vessels**, with no other significant physical properties owned[237](index=237&type=chunk) - **All vessels serve as security** for the company's financing arrangements[237](index=237&type=chunk) [Operating and Financial Review and Prospects](index=52&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Financial performance improved in 2022 due to fleet expansion, though debt and interest costs also rose [Operating Results](index=52&type=section&id=A.%20Operating%20Results) Revenues and net income grew significantly in 2022, driven by fleet expansion and higher charter rates Financial Performance (Year Ended Dec 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Total Revenues** | $299.1M | $184.7M | | **Operating Income** | $182.7M | $118.1M | | **Interest Expense** | ($55.4M) | ($20.1M) | | **Net Income** | $125.4M | $98.2M | - The **$114.4 million increase in revenue** was primarily due to the net addition of 3.4 vessels on average, especially higher-earning LNG carriers[251](index=251&type=chunk)[269](index=269&type=chunk) - **Total voyage expenses increased by $5.5 million** to $16.2 million in 2022 due to the larger fleet and more voyage charters[254](index=254&type=chunk) - **Vessel operating expenses rose by $20.4 million** to $67.5 million in 2022, reflecting the increased number of vessels[272](index=272&type=chunk) - **Interest expense and finance costs increased by $35.3 million** due to higher average debt and a rise in the average interest rate to 4.1%[259](index=259&type=chunk)[274](index=274&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Liquidity relies on cash from operations and external financing to service debt and fund growth - Primary sources of funds are **cash from operations, bank borrowings, and sale-leaseback arrangements**[277](index=277&type=chunk)[302](index=302&type=chunk) Key Liquidity and Capital Figures (as of Dec 31, 2022) | Metric | Value | | :--- | :--- | | Total Cash & Cash Equivalents | $154.8 million | | Total Debt | $1,299.2 million | | Total Partners' Capital | $638.4 million | Cash Flow Summary (Year Ended Dec 31) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $172.6M | $111.2M | | Net Cash Used in Investing Activities | ($14.1M) | ($175.1M) | | Net Cash (Used in)/Provided by Financing Activities | ($35.1M) | $40.6M | - Financing arrangements contain covenants requiring a **minimum liquidity of $0.5M per vessel** and a **maximum leverage ratio of 0.75**[508](index=508&type=chunk)[338](index=338&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=E.%20Critical%20Accounting%20Estimates) Vessel impairment testing is the most critical estimate, highly sensitive to future charter rate assumptions - The most critical accounting estimate is the **impairment of vessels**, recognized if carrying value exceeds future net cash flows[343](index=343&type=chunk)[856](index=856&type=chunk) - The impairment analysis relies on key assumptions including **10-year historical average charter rates** and a **99.5% utilization rate**[325](index=325&type=chunk)[66](index=66&type=chunk)[327](index=327&type=chunk) - As of December 31, 2022, the **carrying value of certain vessels exceeded their market value by $5.9 million**, but passed the cash flow test[589](index=589&type=chunk)[324](index=324&type=chunk) - The impairment test is **highly sensitive to charter rates**; a 32.3% decline would be needed to trigger an impairment on the Cape vessel[327](index=327&type=chunk)[347](index=347&type=chunk) [Directors, Senior Management and Employees](index=63&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) The Partnership is managed by its General Partner under the oversight of a seven-member Board of Directors - The Partnership is managed by its General Partner, with oversight from a **seven-member Board of Directors**, five of whom are elected[378](index=378&type=chunk)[26](index=26&type=chunk) Key Management Personnel | Name | Position | | :--- | :--- | | Keith Forman | Director and Chairman of the Board | | Gerasimos (Jerry) Kalogiratos | Director and CEO of our General Partner | | Nikolaos Kalapotharakos | CFO of our General Partner | | Spyridon Leousis | CCO of our General Partner | - The Board has an independent **Audit Committee, Conflicts Committee, and Compensation Committee**[43](index=43&type=chunk)[361](index=361&type=chunk) - For 2022, directors received **aggregate cash compensation of $0.6 million**, and the General Partner was paid $2.05 million for services[389](index=389&type=chunk)[94](index=94&type=chunk) - Under the Omnibus Incentive Compensation Plan, **743,800 unvested units were awarded** in March 2022[366](index=366&type=chunk)[367](index=367&type=chunk) [Major Unitholders and Related-Party Transactions](index=67&type=section&id=Item%207.%20Major%20Unitholders%20and%20Related-Party%20Transactions) The Marinakis family holds a 30.2% beneficial interest, leading to numerous related-party transactions - As of April 17, 2023, the Marinakis family may be deemed to beneficially own a **30.2% interest in the Partnership**[370](index=370&type=chunk) - Significant related-party transactions in 2022-2023 included the **acquisition of three vessels from Capital Maritime**[411](index=411&type=chunk)[412](index=412&type=chunk)[402](index=402&type=chunk) - In 2021, the Partnership **acquired nine vessels from related parties**, involving cash, debt, and the issuance of 1,153,846 common units[413](index=413&type=chunk)[414](index=414&type=chunk)[415](index=415&type=chunk) - The Partnership has **floating rate management agreements** with Capital-Executive and Capital Gas, both affiliated with the Marinakis family[403](index=403&type=chunk)[404](index=404&type=chunk) - **Conflicts of interest exist** due to the relationships, and the partnership agreement modifies fiduciary duties to permit these transactions[1018](index=1018&type=chunk)[1035](index=1035&type=chunk) [Financial Information](index=75&type=section&id=Item%208.%20Financial%20Information) The Partnership aims to distribute all available cash quarterly, subject to board discretion and IDR tiers - The Partnership's policy is to distribute all **'available cash' quarterly**, after expenses and reserves set by the board[1076](index=1076&type=chunk)[957](index=957&type=chunk) - Distributions are characterized as from **'operating surplus' first**, then 'capital surplus'[1081](index=1081&type=chunk)[648](index=648&type=chunk) - The General Partner holds **Incentive Distribution Rights (IDRs)**, entitling it to an increasing share of cash distributions[644](index=644&type=chunk)[1106](index=1106&type=chunk) Incentive Distribution Rights (IDR) Tiers | Distribution Level | Total Quarterly Distribution per Unit | Unitholders' Share | General Partner's Share | | :--- | :--- | :--- | :--- | | Minimum Quarterly | Up to $1.6275 | 98% | 2% | | First Target | Up to $1.75* | 98% | 2% | | Second Target | Above $1.75 up to $1.8725 | 85% | 15% | | Third Target | Above $1.8725 up to $2.0475 | 75% | 25% | | Thereafter | Above $2.0475 | 65% | 35% | - The board of directors has **broad discretion in establishing reserves**, which affects the amount of available cash for distribution[958](index=958&type=chunk)[1053](index=1053&type=chunk) [Additional Information](index=81&type=section&id=Item%2010.%20Additional%20Information) This section covers governance, material contracts, and key tax considerations for the Marshall Islands entity [Taxation](index=82&type=section&id=E.%20Taxation) The Partnership is a tax-exempt Marshall Islands entity that has elected to be taxed as a U.S. corporation - The Partnership and its subsidiaries are **not subject to income or capital gains tax in the Marshall Islands**[655](index=655&type=chunk)[680](index=680&type=chunk) - For U.S. federal income tax purposes, the Partnership has **elected to be taxed as a corporation**[683](index=683&type=chunk) - The Partnership believes it qualifies for the **Section 883 Exemption**, exempting its U.S. source shipping income from U.S. tax[686](index=686&type=chunk)[687](index=687&type=chunk)[688](index=688&type=chunk) - The Partnership believes it is **not a Passive Foreign Investment Company (PFIC)**, treating charter income as non-passive services income[699](index=699&type=chunk)[718](index=718&type=chunk) - Distributions to U.S. Holders are generally treated as dividends and may be **'qualified dividend income'** taxed at preferential rates[669](index=669&type=chunk)[696](index=696&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=87&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Partnership is primarily exposed to foreign exchange, interest rate, inflation, and credit risks - The company manages foreign currency risk on its Euro-denominated bonds by using **cross-currency swap agreements**[739](index=739&type=chunk) - The Partnership is exposed to **interest rate risk** from its floating-rate debt; a 1% rate increase would have raised 2022 interest expense by $9.3 million[741](index=741&type=chunk)[905](index=905&type=chunk) - **Inflationary pressures** have increased operating, voyage, and administrative costs, with management fees also subject to CPI adjustment[762](index=762&type=chunk) - **Credit risk is concentrated** with cash held at a few financial institutions and revenues derived from a few key charterers[741](index=741&type=chunk)[953](index=953&type=chunk) [Controls and Procedures](index=89&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management and an independent auditor concluded that disclosure and internal controls were effective as of year-end 2022 - Management concluded that as of December 31, 2022, the Partnership's **disclosure controls and procedures were effective**[745](index=745&type=chunk) - Management assessed internal control over financial reporting based on the 2013 COSO framework and **concluded that it was effective**[767](index=767&type=chunk) - The independent auditor, Deloitte, issued an **unqualified attestation report** on the effectiveness of internal controls[768](index=768&type=chunk)[795](index=795&type=chunk) - **No material changes** in internal control over financial reporting occurred during the year[935](index=935&type=chunk) PART III [Financial Statements](index=94&type=section&id=Item%2017%20%26%2018.%20Financial%20Statements) This section contains the Partnership's audited consolidated financial statements for 2020, 2021, and 2022 [Notes to the Consolidated Financial Statements](index=104&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail vessel transactions, $1.3 billion in debt, and significant related-party dealings - In 2022, the Partnership acquired one vessel and sold two others, recognizing a **gain on sale of $47.3 million**[747](index=747&type=chunk)[788](index=788&type=chunk) - In 2021, the Partnership acquired nine vessels and sold two, recognizing a **gain on sale of $46.8 million**[875](index=875&type=chunk)[747](index=747&type=chunk) Long-Term Debt Composition (as of Dec 31, 2022) | Debt Type | Amount (in millions) | | :--- | :--- | | Credit Facilities | $215.8 | | Sale and Lease Back Agreements | $814.8 | | Unsecured Bonds | $266.6 | | Seller's Credit | $6.0 | | **Total Debt** | **$1,303.2** | - Debt arrangements contain financial covenants, including a **minimum EBITDA to net interest expense ratio of 2:1**[673](index=673&type=chunk) - The Partnership has **significant related-party transactions** for vessel acquisitions and management services[863](index=863&type=chunk)[864](index=864&type=chunk)[867](index=867&type=chunk)

CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES FOURTH QUARTER 2022 FINANCIAL RESULTS Highlights • Operating Surplus 2 and Operating Surplus after the quarterly allocation to the capital reserve for the fourth quarter of 2022 were $37.3 million and $6.3 million, respectively. • Announced common unit distribution of $0.15 for the fourth quarter of 2022. • In October 2022 and January 2023 respectively, the Partnership took delivery of the M/V Manzanillo Express and the M/V Itajai Express. Upon delivery both commenced ...