Capital Product Partners L.P.(CPLP) - 2023 Q4 - Annual Report

Financial Position - As of December 31, 2023, total cash and cash equivalents were $204.1 million, with restricted cash amounting to $11.7 million [416]. - Total partners' capital increased to $1,174.9 million, up $536.5 million from $638.4 million as of December 31, 2022, driven by net income of $47.2 million and proceeds from a Rights Offering of $498.7 million [423]. - Total borrowings increased to $1,787.8 million as of December 31, 2023, up from $1,299.2 million in 2022 [438]. - The Partnership issued €150.0 million of senior unsecured bonds with a 2.65% coupon, maturing in October 2026, and €100.0 million with a 4.40% coupon, maturing in July 2029 [456][457]. - The Partnership maintained compliance with all financial debt covenants as of December 31, 2023 [464]. - The Partnership's financing arrangements include customary ship finance covenants and require maintaining a minimum free consolidated liquidity of at least $0.5 million per collateralized vessel [467]. Cash Flow and Operating Activities - Net cash provided by operating activities rose to $189.4 million in 2023, compared to $172.6 million in 2022, reflecting an increase of $16.8 million [432]. - Net cash used in investing activities surged to $447.1 million in 2023, primarily due to vessel acquisitions, compared to $14.1 million in 2022 [434]. Vessel Acquisitions and Financing - The company entered into an Umbrella Agreement to acquire 11 newbuild LNG/C vessels for a total price of $3,130.0 million [425]. - A deposit of $174.4 million was paid for the initial vessels, with a remaining balance of $1,287.0 million due upon delivery [426]. - The company expects to pay an additional $808.8 million for remaining vessels, with expected delivery between Q3 2026 and Q1 2027 [427]. - The 2023 CMBFL - LNG/C AMI sale and leaseback transaction amounts to $196.3 million, aimed at financing the acquisition of shares in the LNG/C Amore Mio I [442]. - The Partnership entered into a sale and lease back agreement for up to $108.0 million to finance the acquisition of the M/V Itajai Express, with the full amount drawn on January 6, 2023, and a duration of eight years [446]. - The sale and lease back agreements for the vessels M/V Athos and M/V Aristomenis were valued at $38.5 million each, with a five-year lease duration and a purchase option at $22.5 million [447]. - A total of $155.4 million was drawn for the sale and lease back of three vessels with ICBCFL, with $96.2 million repaid upon the sale of two vessels and the remaining $38.3 million to be repaid in March 2024 [448]. - The 2021 CMBFL Panamax sale and lease back agreement involved three vessels at $10.0 million each, with a total repayment of $23.4 million completed in March 2023 [449]. - The 2021 BoComm Facility included assumed indebtedness of $148.9 million and $155.4 million for two LNG carriers, with a purchase obligation of $84.7 million at maturity [451]. - The 2021 CMBFL LNG/C sale and lease back involved debts of $146.3 million and $149.6 million, with purchase options at $90.7 million and $91.4 million respectively [452]. - As of December 31, 2023, the required annual payments for financing arrangements total $1,787.8 million, with significant payments due in 2028 and thereafter [458]. Vessel Valuation and Impairment Analysis - The total carrying value of vessels as of December 31, 2023, is $2,491.9 million, an increase from $1,757.9 million in 2022 [475]. - The company performed undiscounted cash flow tests for impairment analysis, indicating that projected net operating cash flows exceed carrying values significantly [476]. - The sensitivity analysis shows that LNG carriers would incur impairment with a 70.1% decline from historical averages, while Cape vessels would incur impairment with a 32.3% decline [478]. - The carrying values of certain vessels exceed their basic charter-free market value by $5.1 million and $5.6 million for 2023 and 2022, respectively [475]. - The company considers various factors for impairment analysis, including charter revenues, operating expenses, and dry-docking expenditures [476]. - The historical performance of the fleet is a key factor in determining assumptions for future cash flows [477]. - The company believes that the undiscounted cash flows support the vessels' carrying amounts as of December 31, 2023, and 2022 [478]. Future Projections - Future minimum charter hire receipts for 2024 are projected at $403.3 million, totaling $1,561.8 million through 2028 [419]. - The company anticipates that charter rates may remain depressed, potentially affecting revenue and profitability [476]. - The company estimates a utilization rate of 99.4% based on historical performance for its fleet [476].