Capital Product Partners L.P. (NASDAQ:CPLP) Q4 2022 Earnings Conference Call February 3, 2023 9:00 AM ET Company Participants Gerasimos Kalogiratos - Chief Executive Officer Conference Call Participants Omar Nokta - Jefferies Research Services, LLC Liam Burke - B. Riley Securities Operator Thank you for standing by, and welcome to the Capital Product Partners’ Fourth Quarter 2022 Financial Results Conference Call. We have with us Mr. Jerry Kalogiratos, Chief Executive Officer of the company. At this time, a ...

▪ Container shipping markets softened during the second half of the year and into Q4-22 from previous exceptional levels, with rates returning towards more normalized levels ▪ The pace of decline has been faster than expected, with both trade volumes faltering and port congestion easing, against a backdrop of eroding consumer and business confidence and increasing capacity availability Containership Supply & Demand Growth Trends 1997-2023 Source: Clarksons LNG Dropdown Opportunities Right of First Offer: | ...

Capital Product Partners L.P. (NASDAQ:CPLP) Q3 2022 Results Conference Call November 9, 2022 9:00 AM ET Company Participants Gerasimos Kalogiratos - Chief Executive Officer Conference Call Participants Omar Nokta - Jefferies Liam Burke - B. Riley Operator Thank you for standing by, and welcome to the Capital Product PartnersÂ' Third Quarter 2022 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-onl ...

Exhibit I CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES THIRD QUARTER 2022 FINANCIAL RESULTS ATHENS, Greece, November 9, 2022 (GLOBE NEWSWIRE) — Capital Product Partners L.P. (the "Partnership", "CPLP" or "we" / "us") (NASDAQ: CPLP), an international owner of ocean-going vessels, today released its financial results for the third quarter ended September 30, 2022. Highlights | --- | --- | --- | --- | --- | --- | |-------------------------------------|-------|--------------------|---------|------------------------- ...

Second Quarter 2022 Earnings Presentation July 29, 2022 Capital Product Partners L.P. www.capitalpplp.com Important Notice O This presentation contains forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward-looking statements include all statements that express forecasts, expectations, plans, outlook, objectives an ...

Financial Performance - Total revenues for the three-month period ended March 31, 2022, amounted to $73.4 million, a 92.5% increase from $38.1 million in the same period of 2021[13] - Operating income for the three-month period ended March 31, 2022, was $33.2 million, compared to $14.0 million for the same period in 2021, reflecting a 137.5% increase[11] - Partnership's net income for the three-month period ended March 31, 2022, was $25.1 million, up from $10.9 million in the same period of 2021, representing a 130.5% increase[11] - Net income for the three-month period ended March 31, 2022, was $25,149,000, compared to $10,879,000 for the same period in 2021, indicating an increase of 131.5%[49] - The partnership's net income per common unit for the three-month period ended March 31, 2022, was $1.26, compared to $0.57 for the same period in 2021[49] Revenue Sources - Time charters contributed $69,087 thousand to revenues for the three-month period ended March 31, 2022, compared to $35,609 thousand for the same period in 2021, reflecting an increase of 94.0%[59] - Voyage charters generated $4,269 thousand in revenues for the three-month period ended March 31, 2022, up from $2,534 thousand in the same period of 2021, marking an increase of 68.4%[59] - Management fees under management agreements for the three-month period ended March 31, 2022, amounted to $2,259 thousand, compared to $1,282 thousand for the same period in 2021, an increase of 76.2%[64] Expenses and Liabilities - Total voyage expenses increased to $3.6 million for the three-month period ended March 31, 2022, from $2.2 million in the same period of 2021, marking a 63.6% increase[15] - Total vessel operating expenses amounted to $16.7 million for the three-month period ended March 31, 2022, compared to $9.2 million in the same period of 2021, reflecting an 81.5% increase[17] - Interest expense for the three-month periods ended March 31, 2022, and 2021 amounted to $9,733 and $2,931, respectively, indicating a significant increase of approximately 231%[76] - Total liabilities as of March 31, 2022, were $1,333,769,000, a decrease from $1,359,706,000 as of December 31, 2021[48] Cash Flow and Liquidity - Net cash provided by operating activities was $48.4 million for the three-month period ended March 31, 2022, compared to $25.2 million for the same period in 2021, reflecting an increase of $23.2 million[30] - Total cash and cash equivalents as of March 31, 2022, amounted to $49.6 million, including restricted cash of $10.6 million, which represents the minimum liquidity requirement under financing arrangements[23] - The Partnership believes that its working capital will be sufficient to meet existing liquidity needs for at least the next 12 months[28] Fleet and Asset Management - The average number of vessels in the fleet increased by 38% or 5.8 vessels, contributing significantly to revenue growth[12] - The partnership owned a fleet of 21 high specification vessels as of March 31, 2022, including 11 Neo-Panamax container carriers and six LNG carriers[55] - The net book value of vessels as of March 31, 2022, was $1,764,366 thousand, down from $1,781,858 thousand at the beginning of the year, reflecting a depreciation of $17,532 thousand during the period[65] Acquisitions and Future Plans - The company agreed to acquire one LNG/C vessel and three eco container vessels for a total consideration of $597.5 million, with deliveries scheduled between January and May 2023[5] - The Partnership expects to continue to evaluate opportunities to acquire vessels and businesses, subject to obtaining required financing and access to financial markets[26] Distributions and Capital - The company declared a cash distribution of $0.15 per common unit for the first quarter of 2022, paid on May 12, 2022[7] - The total partners' capital increased to $546.4 million as of March 31, 2022, up by $20.9 million from $525.5 million as of December 31, 2021, driven by net income and amortization associated with the equity incentive plan[27] - Distributions per common unit declared increased to $0.15 for the period ended January 24, 2022, compared to $0.10 for the period ended January 21, 2021, reflecting a 50% increase[92]

[First Quarter 2022 Financial Results](index=1&type=section&id=First%20Quarter%202022%20Financial%20Results) [Highlights](index=1&type=section&id=Highlights) Capital Product Partners L.P. reported strong Q1 2022 results with significant revenue and net income growth, driven by fleet expansion, and announced a common unit distribution and unit repurchases Q1 2022 Financial Highlights (vs. Q1 2021) | Metric | Q1 2022 | Q1 2021 | Increase | | :--- | :--- | :--- | :--- | | Revenues ($ million) | $73.4 | $38.1 | 93% | | Expenses ($ million) | $40.2 | $24.2 | 66% | | Net Income ($ million) | $25.1 | $10.9 | 130% | | Net Income per common unit ($) | $1.26 | $0.57 | 121% | | Average number of vessels | 21.0 | 15.2 | 38% | - Announced a common unit distribution of **$0.15** for the first quarter of 2022[3](index=3&type=chunk) - Operating Surplus for Q1 2022 was **$44.6 million**, with **$13.5 million** remaining after the quarterly allocation to the capital reserve[4](index=4&type=chunk) - Repurchased **89,345 common units** at an average cost of **$15.67 per unit** during the quarter[4](index=4&type=chunk) [Overview of First Quarter 2022 Results](index=2&type=section&id=Overview%20of%20First%20Quarter%202022%20Results) Q1 2022 net income significantly increased due to a 93% revenue rise from fleet expansion, particularly LNG carrier acquisitions, while total expenses also grew due to increased operating costs and depreciation - Net income per common unit for Q1 2022 was **$1.26**, more than double the **$0.57** reported in Q1 2021[6](index=6&type=chunk) - The **38% net increase** in the average number of vessels was the primary driver of revenue growth, with the acquisition of six LNG carriers in H2 2021 alone contributed **$37.6 million** to total revenue in Q1 2022[7](index=7&type=chunk) - Total expenses increased to **$40.2 million** from **$24.2 million** in Q1 2021, with vessel operating expenses rising to **$16.7 million** and depreciation increasing to **$18.4 million**, both due to the larger fleet[8](index=8&type=chunk) - Interest expense and finance costs rose to **$10.3 million** from **$3.4 million** year-over-year, reflecting the increase in total outstanding indebtedness to finance fleet growth[9](index=9&type=chunk) [Capitalization and Financial Position](index=3&type=section&id=Capitalization%20and%20Financial%20Position) As of March 31, 2022, the Partnership maintained a solid financial position with $49.6 million in cash, increased partners' capital, and reduced total debt through scheduled payments Key Balance Sheet Items (as of March 31, 2022) | Item | Amount ($ million) | | :--- | :--- | | Total Cash | $49.6 | | Restricted Cash | $10.6 | | Total Partners' Capital | $546.4 | | Total Debt (gross) | $1,291.4 | - Total partners' capital increased by **$20.9 million** from December 31, 2021, primarily due to Q1 net income, offset by distributions and unit repurchases[11](index=11&type=chunk) - Total debt decreased by **$26.0 million** from year-end 2021, mainly due to scheduled principal payments of **$22.5 million**[12](index=12&type=chunk) [Operating Surplus](index=3&type=section&id=Operating%20Surplus) The Operating Surplus for Q1 2022 reached $44.6 million, showing an increase from prior periods, with $13.5 million remaining after capital reserve allocation Operating Surplus Trend | Period | Operating Surplus ($ million) | | :--- | :--- | | Q1 2022 | $44.6 | | Q4 2021 | $37.9 | | Q1 2021 | $24.5 | [Corporate Developments and Outlook](index=3&type=section&id=Corporate%20Developments%20and%20Outlook) [Management Commentary](index=4&type=section&id=Management%20Commentary) The CEO highlighted improved profitability from timely LNG market diversification and affirmed commitment to capital returns and accretive acquisitions in LNG and container sectors - The diversification into the LNG market was described as "very timely," with rising LNG charter market fundamentals and vessel values, partly due to the Russo-Ukraine war's impact on energy markets[18](index=18&type=chunk) - The company plans to continue returning capital via its **$0.15 quarterly distribution** and unit buyback program, while also seeking acquisitions to grow distributable cash flow[19](index=19&type=chunk) [Capital Allocation](index=4&type=section&id=Capital%20Allocation) The Partnership continues its capital return strategy through a consistent quarterly cash distribution and an active unit repurchase program - The Board of Directors declared a cash distribution of **$0.15 per common unit** for Q1 2022[22](index=22&type=chunk) - Under its **$30.0 million unit repurchase program**, the Partnership bought back **89,345 common units** in Q1 2022 at an average price of **$15.67 per unit**[20](index=20&type=chunk) [External Factors and Risks](index=3&type=section&id=External%20Factors%20and%20Risks) The Partnership monitors COVID-19 and the Russo-Ukrainian War, with minimal direct COVID-19 impact and the war creating uncertainty but potentially benefiting the LNG carrier market long-term - The estimated incremental operating and voyage costs associated with COVID-19 were approximately **$0.2 million** in Q1 2022[14](index=14&type=chunk) - The Russo-Ukrainian conflict could disrupt supply chains and cause global economic instability, but it is also expected to benefit the LNG/C market as Europe reduces its reliance on Russian gas[17](index=17&type=chunk) [Market Commentary Update](index=5&type=section&id=Market%20Commentary%20Update) [Container Market](index=5&type=section&id=Container%20Market) The containership market remained exceptionally strong in early 2022 with high charter rates, though trade growth is expected to moderate, while the vessel orderbook has expanded - Clarkson's time charter rate index reached a record **434 points** by late March 2022, a **279% year-over-year increase**[23](index=23&type=chunk) - Container trade growth is projected to slow from **6.3% in 2021** to **3.0% in 2022** and **2.6% in 2023**[24](index=24&type=chunk) [LNG Carrier Charter Market](index=5&type=section&id=LNG%20Carrier%20Charter%20Market) The LNG charter market is experiencing a fundamental shift due to increased European LNG imports, leading to strong demand for period charters, rising newbuild prices, and a significant orderbook - The Russo-Ukraine war has caused a greater share of US LNG cargoes to be directed to Europe, altering traditional trade dynamics[25](index=25&type=chunk) - The price for a newbuild LNG carrier has surpassed **$225.0 million**, with limited construction slots available before 2025[26](index=26&type=chunk) - Analysts assess the one-year time charter rate for a modern 2-stroke LNG carrier at over **$140,000 per day**, with period rates continuing to climb[26](index=26&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The income statement for the three months ended March 31, 2022, shows total revenues of $73.4 million and a net income of $25.1 million, a substantial improvement from the prior year Q1 2022 Income Statement Highlights (in thousands USD) | Line Item | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Revenues | 73,356 | 38,143 | | Vessel operating expenses | 16,702 | 9,217 | | Vessel depreciation and amortization | 18,371 | 11,080 | | Operating income | 33,170 | 13,956 | | Total other expense, net | (8,021) | (3,077) | | **Partnership's net income** | **25,149** | **10,879** | | Net income per common unit | $1.26 | $0.57 | [Unaudited Condensed Consolidated Balance Sheets](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2022, reflects total assets of $1.880 billion, total liabilities of $1.334 billion, and total partners' capital of $546.4 million Balance Sheet Highlights (in thousands USD) | Line Item | March 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | 38,954 | 20,373 | | Vessels, net | 1,764,366 | 1,781,858 | | **Total assets** | **1,880,154** | **1,885,170** | | Current portion of long-term debt, net | 97,962 | 97,879 | | Long-term debt, net | 1,185,559 | 1,211,095 | | **Total liabilities** | **1,333,769** | **1,359,706** | | **Total partners' capital** | **546,385** | **525,464** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2022, the Partnership generated $48.4 million in net cash from operating activities, resulting in a net increase in cash of $18.6 million after investing and financing activities Q1 2022 Cash Flow Highlights (in thousands USD) | Cash Flow Category | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | 48,375 | 25,158 | | Net cash used in investing activities | (2,844) | (35,988) | | Net cash (used in) / provided by financing activities | (26,952) | 17,078 | | **Net increase in cash** | **18,579** | **6,248** | | Cash at end of period | 49,566 | 60,584 | [Appendix A – Reconciliation of Non-GAAP Financial Measure](index=11&type=section&id=Appendix%20A%20%E2%80%93%20Reconciliation%20of%20Non-GAAP%20Financial%20Measure) [Reconciliation of Operating Surplus](index=11&type=section&id=Reconciliation%20of%20Operating%20Surplus) This section reconciles the non-GAAP 'Operating Surplus' to 'Net Income', showing a Q1 2022 Operating Surplus of $44.6 million before capital reserve allocations Reconciliation of Net Income to Operating Surplus (in thousands USD) | Line Item | Q1 2022 | Q4 2021 | Q1 2021 | | :--- | :--- | :--- | :--- | | Partnership's net income | 25,149 | 40,021 | 10,879 | | Adjustments (Depreciation, etc.) | 16,310 | 16,485 | 11,954 | | Adjustments (Charters, etc.) | 3,118 | 2,808 | 1,651 | | **Operating Surplus prior to capital reserve** | **44,577** | **37,886** | **24,484** | | Capital reserve | (31,064) | (31,019) | (10,128) | | **Operating Surplus after capital reserve** | **13,513** | **6,867** | **14,356** |

First Quarter 2022 Earnings Presentation May 6, 2022 Capital Product Partners L.P. www.capitalpplp.com Important Notice O This presentation contains forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward-looking statements include all statements that express forecasts, expectations, plans, outlook, objectives and p ...

Financial Data and Key Metrics Changes - The partnership's net income for Q1 2022 was $25.1 million, a 130% increase from $10.9 million in Q1 2021 [6][12] - Revenues for the quarter were $73.4 million, up from $38.1 million in the same period last year, primarily due to a 38% increase in the average number of vessels in the fleet [9] - Total expenses for Q1 2022 were $40.2 million, compared to $24.2 million in Q1 2021, with vessel operating expenses rising to $16.7 million from $9.2 million [10][11] Business Line Data and Key Metrics Changes - The six LNG carriers acquired in late 2021 generated $37.6 million in revenue during the quarter, accounting for over 50% of total revenue [15] - The partnership's operating surplus for Q1 was $44.6 million, with an adjusted operating surplus of $13.5 million after capital reserve allocation [7][12] Market Data and Key Metrics Changes - European LNG imports are expected to increase by 25% by the end of 2022, with Europe significantly increasing its share of total US LNG volumes [18][20] - The LNG shipping demand fundamentals remain robust, with global LNG trade projected to grow by 6.6% in 2022 [19] - The container ship charter market reached new highs, with charter rates for certain vessels hitting approximately $95,000 per day [23] Company Strategy and Development Direction - The company is focusing on dropdown opportunities, particularly targeting vessels with long-term charters to ensure cash flow visibility [32][35] - The partnership aims to balance growth in its asset base with returning capital to unit holders through distributions and buybacks [35][47] Management's Comments on Operating Environment and Future Outlook - Management noted that the LNG market fundamentals are improving due to geopolitical factors, particularly the shift away from Russian gas [20] - The company anticipates that the container market will remain positive in the short to medium term despite potential economic slowdowns [30] Other Important Information - The partnership's total debt decreased by $26 million to $1.9 billion, reflecting scheduled principal payments and currency translation effects [13][14] - The company has a cash balance of around $50 million and expects to generate approximately $88 million in annualized free cash flow [40][41] Q&A Session Summary Question: How does the company plan on funding the equity portion of dropdown opportunities? - Management indicated that strong free cash flow, refinancing options, and potential external capital sources would be utilized to fund dropdowns [37][39][42] Question: Is the priority for free cash related to growth opportunities? - Management confirmed that as dropdowns are completed, capital returns to unit holders will also increase, balancing growth and returns [46][48] Question: What is the status of the Cape Agamemnon's special survey and CapEx requirements? - The next special survey is due in 2025, with some incremental CapEx anticipated, but not material [49][50] Question: What is the outlook on interest rates and their impact on acquisitions? - Management noted that while interest rates are rising, transactions must remain accretive to cash flow, and they are mindful of the cost of capital [56][58] Question: Is there a change in the ability to forward fix charters? - Management acknowledged a wait-and-see mode in the charter market, but still sees opportunities for unique vessels like the AKADIMOS [60][62]

Part I [Key Information](index=8&type=section&id=Item%203%2E%20Key%20Information) The Partnership faces significant risks across industry, operations, financing, regulations, and its limited partnership structure [Risk Factors](index=8&type=section&id=D%2E%20Risk%20Factors) Risks include market volatility, charterer dependency, high debt, complex regulations, partnership structure, and adverse tax implications - The company identifies the **cyclical and volatile nature** of the ocean-going LNG, container, and drybulk shipping industries as a primary risk, with charter rates and vessel values subject to significant fluctuation[45](index=45&type=chunk)[52](index=52&type=chunk) - A key operational risk is the dependency on a limited number of charterers; for the year ended December 31, 2021, **HMM and Hapag-Lloyd accounted for 29% and 24% of total revenues**, respectively[123](index=123&type=chunk)[124](index=124&type=chunk) - The company has **significant indebtedness, totaling $1,317.4 million** as of December 31, 2021, which could restrict operational flexibility and impact cash distributions[203](index=203&type=chunk) - Financing arrangements contain restrictive covenants, including a **maximum leverage ratio of 0.75** and a **minimum security coverage ratio between 110% and 125%**[209](index=209&type=chunk) - There is a risk that U.S. tax authorities could classify the company as a **Passive Foreign Investment Company (PFIC)**, leading to adverse tax consequences for U.S. unitholders[320](index=320&type=chunk)[321](index=321&type=chunk) [Information on the Partnership](index=51&type=section&id=Item%204%2E%20Information%20on%20the%20Partnership) The Partnership's strategic fleet expansion into LNG carriers, business model, and regulatory environment are detailed [History and Development of the Partnership](index=51&type=section&id=A%2E%20History%20and%20Development%20of%20the%20Partnership) Key 2021 activities included acquiring six LNG carriers, issuing bonds, and initiating a unit repurchase program - In 2021, CPLP acquired six 174,000 CBM latest generation X-DF LNG carriers from a related party for approximately **$1.22 billion**[330](index=330&type=chunk)[331](index=331&type=chunk) - The company issued **€150.0 million of senior unsecured bonds** on the Athens Stock Exchange in October 2021 to partially finance the LNG carrier acquisitions[335](index=335&type=chunk) - In February 2021, the Partnership acquired three 5,100 TEU Panamax container vessels for a total of **$40.5 million**[333](index=333&type=chunk) - The Partnership sold two container vessels in 2021 for a total of **$195.0 million**[332](index=332&type=chunk) - A unit repurchase program of up to **$30.0 million** was approved in January 2021, with **$4.5 million** in units repurchased during the year[342](index=342&type=chunk) [Business Overview](index=54&type=section&id=B%2E%20Business%20Overview) The Partnership operates a modern fleet of 21 vessels under medium- to long-term charters for revenue stability Fleet Composition as of March 31, 2022 | Vessel Type | Number of Vessels | Total DWT (million) | Total Capacity | Average Age (years) | | :--- | :--- | :--- | :--- | :--- | | Neo-Panamax Container | 11 | 1.0 | 80,797 TEU | 10.5 | | Panamax Container | 3 | 0.2 | 15,267 TEU | 13.9 | | Capesize Bulk Carrier | 1 | 0.2 | N/A | 11.7 | | LNG Carrier | 6 | 0.5 | 1.0 million CBM | 0.9 | - The company's business strategy focuses on **medium- to long-term fixed charters** and accretive fleet expansion through its relationship with sponsor Capital Maritime[357](index=357&type=chunk)[358](index=358&type=chunk) - All container and LNG carrier vessels are chartered under medium- to long-term charters with a remaining revenue-weighted duration of approximately **3.1 years and 3.2 years**, respectively[354](index=354&type=chunk)[355](index=355&type=chunk) - Operations are subject to extensive environmental regulations, including **IMO 2020, ballast water management rules, and upcoming EEXI and CII regulations**, which may require significant capital expenditure[232](index=232&type=chunk)[454](index=454&type=chunk) [Operating and Financial Review and Prospects](index=71&type=section&id=Item%205%2E%20Operating%20and%20Financial%20Review%20and%20Prospects) Financial performance analysis shows significant 2021 revenue and net income growth driven by fleet expansion [Operating Results](index=71&type=section&id=A%2E%20Operating%20Results) Operating results for 2021 reflect a 31% revenue increase and a surge in net income due to fleet growth and vessel sales Consolidated Income Statement Data (in thousands USD) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Revenues** | **$184,665** | **$140,865** | | Total operating expenses | $66,605 | $93,622 | | *Gain on sale of vessels* | *($46,812)* | *—* | | **Operating income** | **$118,060** | **$47,243** | | Interest expense and finance cost | ($20,129) | ($16,741) | | **Partnership's net income** | **$98,178** | **$30,367** | - The **$43.8 million increase in total revenues** in 2021 was primarily due to a net increase in the average number of vessels, higher charter rates, and fewer off-hire days[487](index=487&type=chunk) - Net income for 2021 was significantly boosted by a **$46.8 million gain** from the sale of two vessels[484](index=484&type=chunk)[498](index=498&type=chunk) - Total vessel operating expenses increased by **$8.4 million to $47.1 million** in 2021, reflecting the larger fleet and higher costs of new LNG carriers[493](index=493&type=chunk) [Liquidity and Capital Resources](index=77&type=section&id=B%2E%20Liquidity%20and%20Capital%20Resources) Liquidity is supported by operating cash flow, though total debt increased significantly to fund vessel acquisitions Cash Flow Summary (in millions USD) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $111.2 | $80.7 | | Net Cash Used in Investing Activities | ($175.1) | ($185.2) | | Net Cash Provided by Financing Activities | $40.6 | $95.4 | - **Total debt increased substantially to $1,317.4 million** as of Dec 31, 2021, from $379.7 million in 2020, primarily to finance vessel acquisitions[521](index=521&type=chunk) - Net cash used in investing activities was **$175.1 million**, reflecting $365.7 million for vessel acquisitions offset by $193.0 million from vessel sales[518](index=518&type=chunk) - Financing arrangements require compliance with financial covenants, including a **maximum leverage ratio of 0.75**[540](index=540&type=chunk) [Critical Accounting Estimates](index=83&type=section&id=E%2E%20Critical%20Accounting%20Estimates) Vessel impairment is the primary critical accounting estimate, with no impairment recorded despite some market value deficits - The primary critical accounting estimate is the **impairment of vessels**, reviewed whenever events indicate the carrying amount may not be recoverable[552](index=552&type=chunk)[919](index=919&type=chunk) - As of December 31, 2021, the aggregate carrying value of certain vessels exceeded their market value by approximately **$3.3 million**, an improvement from a **$57.0 million deficit** in 2020[553](index=553&type=chunk) - Despite the market value deficit, **no impairment charge was required** for 2021 or 2020, as undiscounted projected cash flows exceeded carrying values[556](index=556&type=chunk)[563](index=563&type=chunk) - The impairment analysis is highly sensitive to future time charter rates; an impairment would be triggered if rates declined by **25.2%** from their ten-year historical average[562](index=562&type=chunk) [Directors, Senior Management and Employees](index=86&type=section&id=Item%206%2E%20Directors%2C%20Senior%20Management%20and%20Employees) The Partnership is managed by its General Partner and an independent-majority Board, with no direct employees - The Partnership is managed by its General Partner, Capital GP L.L.C., under the oversight of a **seven-member Board of Directors**[565](index=565&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk) - The key executive officers of the General Partner are **Gerasimos (Jerry) Kalogiratos (CEO)**, Nikolaos Kalapotharakos (CFO), and Spyridon Leousis (CCO)[571](index=571&type=chunk)[573](index=573&type=chunk) - The Partnership has **no direct employees** and relies on the officers of its General Partner and employees of its Managers for operations[600](index=600&type=chunk) - For 2021, directors received **$0.5 million in cash compensation**, and the General Partner was reimbursed **$1.88 million** for executive services[589](index=589&type=chunk)[590](index=590&type=chunk) - The Board has an **Audit Committee, a Conflicts Committee, and a Compensation Committee**, all comprised solely of independent directors[595](index=595&type=chunk) [Major Unitholders and Related-Party Transactions](index=93&type=section&id=Item%207%2E%20Major%20Unitholders%20and%20Related-Party%20Transactions) The Marinakis family is the largest unitholder, and numerous transactions occur with related entities like Capital Maritime Major Unitholders (as of early 2022) | Beneficial Owner | Common Units Owned | Percentage of Total | | :--- | :--- | :--- | | Capital Maritime (Marinakis family) | 3,887,694 | 20.2% | | Capital Gas Corp. (Marinakis family) | 1,153,846 | 6.0% | | Donald Smith & Co., Inc. | 1,442,246 | 7.5% | - In 2021, the Partnership acquired six LNG carriers and three container vessels from **related parties Capital Maritime and CGC Operating Corp**[622](index=622&type=chunk)[626](index=626&type=chunk) - The Partnership has management agreements with **related parties Capital-Executive and Capital Gas** for commercial and technical management of its fleet[617](index=617&type=chunk)[627](index=627&type=chunk)[628](index=628&type=chunk) - **Significant potential for conflicts of interest** exists due to the overlapping management and ownership structure with the General Partner and Capital Maritime[636](index=636&type=chunk)[639](index=639&type=chunk) [Financial Information](index=103&type=section&id=Item%208%2E%20Financial%20Information) The cash distribution policy is based on 'available cash' and includes a tiered incentive structure for the General Partner - The Partnership's policy is to distribute all of its **'available cash'** quarterly, less reserves established by the board[682](index=682&type=chunk)[683](index=683&type=chunk) - Distributions are characterized as from **'operating surplus'** first; excess distributions are a return of capital from **'capital surplus'**[697](index=697&type=chunk)[708](index=708&type=chunk)[709](index=709&type=chunk) - The Partnership has a tiered **incentive distribution rights (IDR) structure**, where the General Partner receives an increasing percentage of cash flow (up to 35%) above certain thresholds[713](index=713&type=chunk)[714](index=714&type=chunk) - In 2019, a subsidiary reached a settlement with the U.S. DOJ for oil record book violations, paying a **$500,000 fine**[681](index=681&type=chunk) [Additional Information](index=113&type=section&id=Item%2010%2E%20Additional%20Information) The Partnership is a Marshall Islands entity taxed as a U.S. corporation, facing potential PFIC classification risk - The Partnership is organized in the Republic of the Marshall Islands and is **not subject to Marshall Islands income tax**[744](index=744&type=chunk) - For U.S. federal income tax purposes, the Partnership has elected to be **treated as a corporation**[751](index=751&type=chunk) - The Partnership believes it qualifies for the **Section 883 Exemption**, which exempts its U.S.-source international transportation income from U.S. federal income tax[756](index=756&type=chunk)[757](index=757&type=chunk) - There is a risk the Partnership could be classified as a **Passive Foreign Investment Company (PFIC)**, which would result in a disadvantageous U.S. tax regime for its U.S. unitholders[321](index=321&type=chunk)[777](index=777&type=chunk)[779](index=779&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=123&type=section&id=Item%2011%2E%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Market risk exposure includes interest rates on floating-rate debt, foreign exchange, and inflation - The Partnership is exposed to interest rate risk from floating-rate financing; a **100-basis-point increase in LIBOR** would have increased 2021 interest expense by an estimated **$4.6 million**[808](index=808&type=chunk)[809](index=809&type=chunk) - Foreign exchange risk related to the **€150.0 million bonds** has been managed through cross-currency swap agreements[805](index=805&type=chunk) - The company faces **credit risk concentration** from its charterers and from placing cash deposits with a limited number of financial institutions[810](index=810&type=chunk) - **Inflation** is expected to become a more significant factor, leading to increased operating, voyage, and financing costs[811](index=811&type=chunk) Part II [Controls and Procedures](index=125&type=section&id=Item%2015%2E%20Controls%20and%20Procedures) Management and the independent auditor concluded that disclosure controls and internal controls were effective as of year-end 2021 - Management concluded that the Partnership's **disclosure controls and procedures were effective** as of December 31, 2021[820](index=820&type=chunk)[821](index=821&type=chunk) - Management assessed the internal control over financial reporting and concluded it was **effective as of December 31, 2021**, based on the COSO framework[822](index=822&type=chunk)[825](index=825&type=chunk) - The independent auditor, Deloitte, issued an **unqualified attestation report** on the effectiveness of the Partnership's internal control over financial reporting[827](index=827&type=chunk)[828](index=828&type=chunk) [Other Information](index=127&type=section&id=Item%2016%2E%20Other%20Information) Governance details include the audit committee financial expert, accountant fees, and a unit repurchase program - The Board of Directors has determined that director **Abel Rasterhoff qualifies as an "audit committee financial expert"**[835](index=835&type=chunk) - The Partnership has adopted a **Code of Business Conduct and Ethics** that applies to all directors, officers, and employees[838](index=838&type=chunk) Principal Accountant Fees (in thousands USD) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $276.2 | $267.6 | | Audit-Related Fees | $119.4 | — | | Tax Fees | $17.2 | $10.8 | | **Total** | **$412.8** | **$278.4** | - Under a unit repurchase program, the Partnership repurchased **382,250 common units for a total cost of $4.5 million** during 2021[848](index=848&type=chunk)[851](index=851&type=chunk) Part III [Financial Statements](index=131&type=section&id=Item%2018%2E%20Financial%20Statements) Audited financial statements show significant asset growth and increased net income for the year ended December 31, 2021 Consolidated Balance Sheet Highlights (in thousands USD) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,373 | $47,336 | | Vessels, net | $1,781,858 | $712,197 | | **Total Assets** | **$1,885,170** | **$822,198** | | Current portion of long-term debt, net | $97,879 | $35,810 | | Long-term debt, net | $1,211,095 | $338,514 | | **Total Liabilities** | **$1,359,706** | **$400,120** | | **Total Partners' Capital** | **$525,464** | **$422,078** | Consolidated Statement of Comprehensive Income Highlights (in thousands USD) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Revenues | $184,665 | $140,865 | $108,374 | | Operating income | $118,060 | $47,243 | $40,132 | | **Net income from continuing operations** | **$98,178** | **$30,367** | **$24,421** | Consolidated Statement of Cash Flows Highlights (in thousands USD) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $111,164 | $80,682 | $45,277 | | Net cash used in investing activities | ($175,065) | ($185,247) | ($6,519) | | Net cash provided by / (used in) financing activities | $40,552 | $95,437 | ($179,142) |