form6k.htm
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of January, 2011
COMMISSION FILE NUMBER 001-33373
____________________
 
CAPITAL PRODUCT PARTNERS L.P.
 
(Translation of registrant’s name into English)
____________________
 
3 IASSONOS STREET
PIRAEUS, 18537 GREECE
(address of principal executive offices)
____________________
 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F  x                      Form 40-F  o
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Yes           o           No           x
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 
Yes           o           No           x
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes           o           No           x
 
If “yes” is marked, indicate below this file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
 
 
 
 
 


 
 
 
 
 

 
 
 
 
Item 1 – Information Contained in this Form 6-K Report
 
Attached as Exhibit I is a press release of Capital Product Partners L.P., dated January 31, 2011.
 
This report on Form 6-K is hereby incorporated by reference into the registrant’s registration statement, registration number 333-153274, dated October 1, 2008.
 
 
 
 
 
 
 

 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
CAPITAL PRODUCT PARTNERS, L.P.,
 
 
 
By:
Capital GP L.L.C., its general partner
 
 
   
  /s/  Ioannis E. Lazaridis 
 
   
Name:       Ioannis E. Lazaridis
 
   
Title:         Chief Executive Officer and
  Chief Financial Officer of Capital GP L.L.C.
 

Dated: January 31, 2011
 
 
 
 
 
 
 
 
 

 
 
 
Exhibit I
 
 
 
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES FOURTH QUARTER 2010 FINANCIAL RESULTS
 
ATHENS, Greece, January 31, 2011 -- Capital Product Partners L.P. (the “Partnership”) (Nasdaq: CPLP), an international owner of modern double-hull tankers, today released its financial results for the fourth quarter ended December 31, 2010.
 
The Partnership’s net income for the quarter ended December 31, 2010 was $2.4 million, or $0.06 per limited partnership unit, which is $0.04 lower than the $0.10 per unit from the previous quarter ended September 30, 2010, and $0.15 lower than the $0.21 per unit from the fourth quarter of 2009.
 
Operating surplus for the quarter ended December 31, 2010 was $9.0 million, which is $0.5 million lower than the $9.5 million from the third quarter of 2010 and $1.2 million lower than the $10.2 million from the fourth quarter of 2009. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. (Please see Appendix A for a reconciliation of this non-GAAP measure to net income.)
 
Revenues for the fourth quarter of 2010 were $29.0 million, compared to $32.5 million in the fourth quarter of 2009. The Partnership’s revenues reflect the lower charter rates at which it re-chartered a number of its vessels whose original charters, which were fixed during 2006 to 2008, expired during the previous quarters.
 
Total operating expenses for the fourth quarter of 2010 were $18.5 million, including $7.9 million in fees for the commercial and technical management of the fleet paid to a subsidiary of our Sponsor, Capital Maritime & Trading Corp, $8.1 million in depreciation and $1.3 million in general and administrative expenses, of which $0.6 million was a non-cash charge related to the Omnibus Incentive Compensation Plan, compared to $18.1 million total operating expenses for the fourth quarter of 2009.
 
Net interest expense and finance cost for the fourth quarter of 2010 amounted to $8.1 million compared to $8.2 million for the fourth quarter of 2009.
 
As of December 31, 2010 the Partnership’s long-term debt remained unchanged, compared to December 31, 2009 at $474.0 million, and Partners’ capital stood at $239.8 million.
 
Market Commentary
 
Overall, average product tanker spot earnings for the fourth quarter continued to improve, when compared to the fourth quarter of 2009, as the world economy recovery boosted demand for oil products.
 
Longer period charter rates remained robust, relative to the product tanker spot market, reflecting owners’ and charterers’ positive expectations for product tanker demand going forward. The product tanker orderbook experienced substantial delays and cancellations, which is expected to continue into 2011. As a result, the current product tanker orderbook is considered amongst the most attractive in the shipping industry.
 
The Suezmax market remained soft compared to the same quarter last year, as tonnage availability in most trading areas absorbed the increased demand.
 
 
 
 

 
 
 
Fleet Developments
 
The M/T Amore Mio II (2001 Daewoo, 159,924 dwt) was fixed at a net daily charter rate of $25,000 to Capital Maritime for 12 months (+/- 30 days). The charter commenced on January 9, 2011 and the earliest expected redelivery under the charter is December 2011.
 
Following the rechartering of the M/T Amore Mio II, 69% of the fleet total days for 2011 are secured under period charter coverage.
 
Quarterly Cash Distribution
 
On January 21, 2011, the Board of Directors of the Partnership declared a cash distribution of $0.2325 per unit for the fourth quarter of 2010, in line with management’s annual guidance. The fourth quarter 2010 distribution will be paid on February 15, 2011 to unit holders of record on February 4, 2011.
 
The total distributions of $1.0925 paid during 2010 qualify fully as return of capital for our U.S. based unitholders, according to our advisors.
 
Management Commentary
 
Mr. Ioannis Lazaridis, Chief Executive and Chief Financial Officer of the Partnership’s General Partner commented: “We are pleased to see that 2010 marked an improvement for product tanker earnings, compared to the historical lows experienced in 2009. The continued delays and cancellations observed in product tanker deliveries, combined with the recovery in demand for oil products, bode well for the prospects of the product tanker market. In addition, we are particularly pleased that we have chartered the M/T Amore Mio II to Capital Maritime, our Sponsor, for approximately one year.”
 
Mr. Lazaridis continued: “We will continue to closely monitor key industry factors, including changes in oil product demand, oil refinery utilization rates, the availability of shipping finance, as well as further delays and cancellations that could reduce the number of new tanker vessel deliveries, in order to assess a further market recovery for 2011 and beyond. We will continue to monitor market developments and explore further accretive acquisitions, and as a result we will revisit our annual distribution guidance.”
 
Conference Call and Webcast
 
Today, January 31st 2011, at 10:00 a.m. Eastern Standard Time (U.S.), the Partnership will host an interactive conference call.
 
Conference Call details:
 
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or + (44) 1452 542 301 (Standard International Dial-in). Please quote “Capital Product Partners.”
 
A replay of the conference call will be available until February 6, 2011. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number is (+44) 1452 550 000 and the access code required for the replay is: 69648481#.
 
 
 
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Slides and audio webcast:
 
The slide presentation accompanying the conference call will be available on the Partnership’s website at www.capitalpplp.com. An audio webcast of the call will also be accessible on the website. The relevant links will be found in the Investor Relations section of the website.
 
 
Forward-Looking Statements:
 
The statements in this press release that are not historical facts, including our expectations regarding developments in the markets, our expected charter coverage ratio for 2011 and expectations regarding our quarterly distribution 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.
 
About Capital Product Partners L.P.
 
Capital Product Partners L.P. (Nasdaq:CPLP), a Marshall Islands master limited partnership, is an international owner of modern double-hull tankers. The Partnership owns 21 vessels, including 18 modern MR tankers, two small product tankers and one suezmax crude oil tanker. Most of its vessels are under medium- to long-term charters to BP Shipping Limited, Overseas Shipholding Group, Petrobras, Arrendadora Ocean Mexicana, S.A. de C.V. and Capital Maritime & Trading Corp.
 
For more information about the Partnership, please visit our website: www.capitalpplp.com.
CPLP-F
Contact Details:
 
Capital GP L.L.C.
Investor Relations / Media
Ioannis Lazaridis, CEO and CFO
Matthew Abenante
+30 (210) 4584 950
Capital Link, Inc. (New York)
E-mail:  i.lazaridis@capitalpplp.com
Tel. +1-212-661-7566
 
E-mail: cplp@capitallink.com
Capital Maritime & Trading Corp.
Jerry Kalogiratos
+30 (210) 4584 950
j.kalogiratos@capitalpplp.com
 
 
 
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Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Income (Note 1)
(In thousands of United States Dollars, except number of units and earnings per unit)
 
   
For the three-month period ended December 31,
   
For the years ended December 31,
 
   
2010
   
2009
   
2010
   
2009
 
                         
Revenues
  $ 24,859     $ 32,512     $ 113,562     $ 134,519  
Revenues – related party
    4,146       -       11,030       -  
Total Revenues
    29,005       32,512       124,592       134,519  
                                 
Expenses:
                               
Voyage expenses
    1,170       810       7,009       3,993  
Vessel operating expenses - related party
    7,940       8,420       30,261       30,830  
Vessel operating expenses
    -       499       1,034       2,204  
General and administrative expenses
    1,270       632       3,506       2,876  
Vessel depreciation
    8,116       7,697       31,464       30,685  
Operating income
    10,509       14,454       51,318       63,931  
Other income (expense), net:
                               
Interest expense and finance cost
    (8,331 )     (8,462 )     (33,259 )     (32,675 )
Interest and other income
    212       270       860       1,460  
Total other (expense), net
    (8,119 )     (8,192 )     (32,399 )     (31,215 )
Net income
    2,390       6,262       18,919       32,716  
Less:
                               
Net income attributable to CMTC operations
    -       (986 )     (983 )     (3,491 )
Partnership’s net income
  $ 2,390     $ 5,276     $ 17,936     $ 29,225  
General Partner’s interest in Partnership’s net income
  $   48     $   106     $ 359     $ 584  
Limited Partners’ interest in Partnership’s net income
  $   2,342     $   5,170     $ 17,577     $ 28,641  
Net income per unit:
                               
● Common units (basic and diluted)
    0.06       0.21       0.54       1.15  
● Subordinated units (basic and diluted)
    -       -       -       1.17  
● Total units (basic and diluted)
    0.06       0.21       0.54       1.15  
Weighted-average units outstanding:
                               
● Common units (basic and diluted)
    37,150,983       24,817,151       32,437,314       23,755,663  
● Subordinated units (basic and diluted)
    -       -       -       1,061,488  
● Total units (basic and diluted)
    37,150,983       24,817,151       32,437,314       24,817,151  
 
 
 
 
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Capital Product Partners L.P.
Unaudited Condensed Consolidated Balance Sheets (Note 1)
(In thousands of United States Dollars)
 
   
December 31, 2010
   
December 31, 2009
 
Assets
           
Current assets
           
Cash and cash equivalents
  $ 32,471     $ 3,552  
Short-term investments
    -       30,390  
Trade accounts receivable
    2,305       1,217  
Due from related party
    2       13,365  
Inventory
    83       466  
Prepayments and other assets
    278       584  
Total current assets
    35,139       49,574  
Fixed assets
               
Vessels, net
    707,339       703,707  
Total fixed assets
    707,339       703,707  
Other non-current assets
               
Deferred charges, net
    2,462       3,147  
Above market acquired bare-boat charter
    8,062       -  
Restricted cash
    5,250       4,500  
Total non-current assets
    723,113       711,354  
Total assets
  $ 758,252     $ 760,928  
                 
Liabilities and stockholders’ equity / partners’ capital
               
Current liabilities
               
Current portion of long-term debt
  $ -     $ -  
Current portion of related party long-term debt
    -       4,412  
Trade accounts payable
    526       778  
Due to related parties
    4,544       4,939  
Accrued liabilities
    898       2,470  
Deferred revenue
    3,207       3,456  
Total current liabilities
    9,175       16,055  
Long-term liabilities
               
Long-term debt
    474,000       474,000  
Long-term related party debt
    -       43,528  
Deferred revenue
    2,812       2,062  
Derivative instruments
    32,505       36,931  
Total long-term liabilities
    509,317       556,521  
Total liabilities
    518,492       572,576  
Commitments and contingencies
               
Stockholders’ equity
    -       31,224  
Partners’ capital
    239,760       157,128  
Total liabilities and stockholders’ equity / partners’ capital
  $ 758,252     $ 760,928  
 
 
 
 
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Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Cash Flows (Note 1)
(In thousands of United States Dollars)
 
   
For the year ended December 31,
 
   
2010
   
2009
 
Cash flows from operating activities:
           
Net income
  $ 18,919     $ 32,716  
Adjustments to reconcile net income to net cash  provided by operating activities:
               
Vessel depreciation
    31,464       30,685  
Amortization of deferred charges
    552       456  
Amortization of  above market acquired bare-boat charter
    938       -  
Equity compensation expense
    782       -  
Changes in operating assets and liabilities:
               
Trade accounts receivable
    (2,717 )     5,381  
Due from related parties
    6       (1,795 )
Prepayments and other assets
    230       (2 )
Inventory
    237       (264 )
Trade accounts payable
    118       507  
Due to related parties
    (570 )     4,460  
Accrued liabilities
    (409 )     271  
Deferred revenue
    501       147  
Net cash provided by operating activities
    50,051       72,562  
Cash flows from investing activities:
               
Vessel acquisitions
    (99,842 )     (26,460 )
Acquisition of above market bare-boat charter
    (9,000 )     -  
Purchase of short-term investments
    (81,729 )     (111,850 )
Maturity of short-term investments
    112,119       82,540  
Increase in restricted cash
    (750 )     -  
Net cash (used in) investing activities
    (79,202 )     (55,770 )
Cash flows from financing activities:
               
Proceeds from issuance of Partnership units
    105,273       -  
Expenses paid for issuance of Partnership units
    (1,533 )     -  
Proceeds from related party debt
    -       26,400  
Payments of related party debt/financing
    (1,556 )     (52,171 )
Loan issuance costs
    -       (725 )
Excess of purchase price over book value of vessels acquired from entity under common control
    (10,449 )     -  
Distributions paid
    (33,665 )     (70,463 )
Capital contributions by CMTC
    -       40,570  
Net cash provided by / (used in)  financing activities
    58,070       (56,389 )
                 
Net increase / (decrease) in cash and cash equivalents
    28,919       (39,597 )
Cash and cash equivalents at beginning of period
    3,552       43,149  
Cash and cash equivalents at end of period
  $ 32,471     $ 3,552  
                 
Supplemental cash flow information
               
Cash paid for interest
  $ 31,860     $ 31,548  
Non-cash activities
               
Net book value of vessels transferred-in, M/T Agamemnon II and M/T Ayrton II less cash paid.
    -     $ 68,054  
Net book value of vessels transferred-out, M/T Assos and M/T Atrotos
    -     $ (70,496 )
Reduction in deferred offering expenses
  $ 107       -  
Change in payable offering expenses
  $ 31       -  
Capitalized vessel costs included in liabilities
  $ 175     $ 870  
Net liabilities assumed by CMTC upon vessel contribution to the Partnership
  $ 31,844     $   31,073  
 
Notes
 
(1) The unaudited condensed consolidated statements of income for the three-month and years ended December 31, 2010 and 2009 and the unaudited condensed consolidated statements of cash flows for the years ended December 31, 2010 and 2009 include the results of operations of M/T Alkiviadis and M/T Atrotos which were acquired from Capital Maritime, an entity under common control (at the time of the acquisition), on June 30, 2010 and March 1, 2010, respectively, as though the transfer had occurred at the beginning of the earliest period presented. The unaudited condensed consolidated balance sheet as of December 31, 2009 includes the balance sheets of the vessel-owning companies of M/T Atrotos and M/T Alkiviadis.
 
 
 
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Appendix A – Reconciliation of Non-GAAP Financial Measure
(In thousands of U.S. dollars)
 
Description of Non-GAAP Financial Measure – Operating Surplus
 
Operating Surplus represents net income adjusted for non cash items such as depreciation and amortization expense, unearned revenue and unrealized gain and losses. Replacement capital expenditures represent those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, the Partnership’s capital assets. Operating Surplus is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any other indicator of the Partnership’s performance required by accounting principles generally accepted in the United States. The tables below reconcile Operating Surplus to net income for the three-month period ended December 31, 2010.
 
 
Reconciliation of Non-GAAP Financial Measure –
Operating Surplus
 
For the three-month
period ended
December 31, 2010
 
       
Net income
  $ 2,390  
         
Adjustments to reconcile net income to net cash provided by operating activities
       
Depreciation and amortization
    8,838  
Deferred revenue
    801  
NET CASH PROVIDED BY OPERATING ACTIVITIES
    12,029  
         
Replacement Capital Expenditures
    (2,985 )
         
OPERATING SURPLUS
    9,044  
Recommended reserves
    (41 )
AVAILABLE CASH
  $ 9,003  
 
 
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