COSTAMARE Inc. 2011 ANNUAL REPORT Company History Costamare successfully completes follow-on equity 2012 offering in March 2012, issuing 7.5 million shares (NYSE:CMRE). Costamare continues to expand its fleet 2011 opportunistically, taking delivery of ten secondhand vessels and contracting 10 newbuildings since the IPO. Costamare successfully completes initial public 2010 offering in November 2010, issuing 13.3 million shares. Costamare takes delivery of some of the largest 2006 containerships in the world (9500 TEU) and commences long term relationship with China's COSCO. Costamare establishes Shanghai Costamare, one of the first foreign shipmanagement companies in 2005 China. Mr. Konstantinos V. Konstantakopoulos assumes 1998 management of Costamare. Costamare disposes of remaining bulk carriers and 1992 becomes a dedicated containership owner/operator. Costamare becomes the first Greek company to enter into the containership market with its purchase of its 1980's first five containerships. After 20 years of sailing experience on merchant ships, Captain Vasileios Konstantakopoulos establishes 1974 Costamare and acquires the first 2,000 ton general cargo ship. COSTAMARECOSTAMARE Inc. Inc. One of the world's leading owners and providers of containerships In 2011, we continued to execute on our growth plans by investing in “vessels at opportune times, and since our IPO,2010 we have invested in excess of $1 billion in newbuilding and secondhandANNUAL ships. Debt funding for our capital commitments has been arranged inREPORT order to minimize financing risk. We have“ been selective and returns-oriented in our investments and seek to avoid excessive market risk resulting from growth at unjustified prices. Konstantinos V. Konstantakopoulos Chairman and Chief Executive Officer 2 Letter from the CEO Letter from the CEO Fellow Shareholders, Although 2011 was the first full year of operations of Costamare Inc. as a public entity, it was our 31st year in our 37- year history as a focused and dedicated containership owner. This expansive track record in the industry has enabled us to grow the company in a sustainable way while consistently generating excess returns on our equity. Containership demand grew strongly at the start of 2011 on the back of improved global economic and financial conditions. This positive development resulted in further increases in asset prices and time charter rates. In this positive environment, vessel deliveries were accelerated and newbuilding orders were substantially increased, especially by liner companies. However, in the second half of the year, the unfolding European debt crisis, political gridlock in a Korean shipyard for the construction We have finalized financing arrangements the United States of America and continued of ten newbuilding containerships. All of for all of our capital expenditure incurred monetary tightening in the emerging the newbuildings were fixed by first-class since our initial public offering at what world resulted in falling containership charterers for an average period of 7.5 we believe to be favorable terms in the transportation demand. As vessel supply years. current financial environment and have continued to grow disproportionally to further enhanced our access to financing demand, time charter rates and asset prices The chartering of our ten newbuildings by developing new banking relationships in fell precipitously. marked a major milestone as it has Europe, Asia and the USA. In addition, we enhanced our highly-valued relationships accessed the public equity markets for the During 2011, management's priorities with both Evergreen and MSC, as they were first time since our initial public offering in were to enhance Costamare's competitive the first newbuilding orders fixed on long- 2010 by completing a successful follow-on position in the industry and maintain its term time charters with these two major equity offering in March 2012, raising over strong balance sheet. liner companies. $100 million of new capital. We achieved solid financial results, We substantially reduced our re-chartering Going forward, our goal remains to grow highlighted by net income of $87.6 million risk for 2012 by capitalizing on the strong our earnings capacity by employing our for the twelve months ended December 31, demand for vessels during the first half of equity profitably so we can reward our 2011, up 7.8% from 2010. We continued to the year, and extended the charters of most shareholders over the long term. Thank you pay a dividend each quarter, and on October of our older vessels on a spot and forward for your interest and support. 2011, our board of directors approved an basis at attractive rates and duration. 8% increase in the dividend. We continued to successfully execute our strategy of growing our current and Sincerely, future revenue and earnings capacity in COSTAMARE Inc. a sustainable manner. During the year, Konstantinos V. Konstantakopoulos One of the world's leading owners and providers of containerships we took delivery of ten secondhand Chairman & CEO containerships. In addition, we entered agreements with a Chinese shipyard and 2010 ANNUAL REPORT Corporate Profile 3 Corporate Profile Costamare Inc. is one of the world's leading owners and providers of containerships for charter. Costamare Inc. has Year End Average Number of 37 years of history in the international shipping industry TEUS Vessels Vessels & TEUs in the water and a fleet of 56 containerships, with a total capacity of (000s) approximately 326,000 twenty foot equivalent units (TEU) 60 227 232 250 219 211 including 10 newbuild containerships on order. 195 50 200 Our strategy is to time-charter our containerships to a 177 145 geographically diverse, financially strong and loyal group of 40 leading liner companies. Our containerships operate primarily 150 under multi-year time charters and therefore are not subject 30 to the effect of seasonal variations in demand. 100 Our goal is to continuously create shareholder value by 20 prudently growing our fleet. We follow a portfolio approach 50 on our charters in order to ensure that we meet our debt 10 obligations and maintain our dividend payments, without 39.8 43.6 46.2 52.8 47.3 42.4 47.8 limiting potential upside. 0 0 2005 2006 2007 2008 2009 2010 2011 Our common shares are listed on the New York Stock Exchange Average Number of Vessels Average TEU Capacity (thousands) under the symbol "CMRE". Fleet Profile Vessels including Newbuildings (as of April 27, 2012) Vessel Class Capacity (TEU) Fleet ULCS 10000+ 0 VLCS 8500-10000 15 Post Panamax 5100- 8500 13 Panamax 3500- 5100 14 Sub Panamax 2000- 3500 11 Feeder up to 2000 3 Total 56 4 Investment Highlights Investment Highlights • Large, established company with a substantial fleet in the water Consistent Quarterly Dividend Costamare is one of the top five non-KG containership in US Dollars, Dividend Distribution ► 1 owners 0.30 ► 46 vessels in the water • Strong track record of value creation throughout business $0.27 $0.27 cycles Consistently generated return on equity of over 25% ► on average over the last five years $0.25 $0.25 $0.25 Maintained profitability over the years, even during 0.25 ► the 2008-09 crisis 8% • Maintained ability to pay an attractive dividend with the potential for future growth • Strong, visible & growing cash flows Total of USD $3.1 billion of Contracted Revenues ► 0.20 with a remaining time charter average (weighted by Fourth First Second Third Fourth TEU) duration of 5.7 years Quarter 2010 Quarter 2011 Quarter 2011 Quarter 2011 Quarter 2011 ► Expect to take delivery of two new vessels in 2012, Contracted Revenues as of Dec.31, 2011 seven new vessels in 2013 & one new vessel in 2014 Approximately 90% of loan portfolio is fully hedged 500 ► 440 431 from floating interests rates to fixed interest rates 417 393 Smooth amortization schedule for outstanding ► 400 362 370 indebtedness • High quality customers 300 ► Current long-term relationships with five of the top six global carriers, including several relationships of over 20 years 200 174 • Strong Balance Sheet 122 94 85 ► Low leverage combined with a smooth amortization 100 71 schedule minimizes re-financing risk 41 • Management team that led the company safely through the 0 challenges of the recent global financial crisis in 2008-09, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 including avoiding any bank covenant breaches or defaults Client Relations Top 20 Global Carriers APM-Maersk * Mediterranean Shg Co * CMA CGM Group COSCO Container L. * Hapag-Lloyd * Evergreen Line * APL CSCL Hanjin Shipping MOL NYK Line Hamburg Süd Group OOCL K Line Yang Ming Marine Transport Corp. Zim * Hyundai M.M. CSAV Group PIL (Pacific Int. Line) UASC 0 500 1,000 1,500 2,000 2,500 3,000 * Current Charterers Owned Chartered Source Alphaliner, April, 2012 1 Kommanditgesellschaft, or KG, is a form of German limited liability partnership. Fleet Profile 5 Fleet Profile (as of April 27, 2012) Year Capacity Year Capacity Vessel Name Charterer Vessel Name Charterer Built (TEU) Built (TEU) COSCO GUANGZHOU COSCO 2006 9,469 HALIFAX EXPRESS Hapag Lloyd 2000 4,890 COSCO NINGBO COSCO 2006 9,469 SINGAPORE EXPRESS Hapag Lloyd 2000 4,890 COSCO YANTIAN COSCO 2006 9,469 MSC MANDRAKI MSC 1988 4,828 COSCO BEIJING COSCO 2006 9,469 MSC MYKONOS MSC 1988 4,828 COSCO HELLAS COSCO 2006 9,469 MSC ULSAN MSC 2002 4,132 HYUNDAI NAVARINO HMM 2010 8,531 MSC ANTWERP MSC 1993 3,883 MAERSK KAWASAKI A.P. Moller-Maersk 1997 7,403 MSC WASHINGTON MSC 1984 3,876 MAERSK KURE A.P. Moller-Maersk 1996 7,403 MSC KYOTO MSC 1981 3,876 MAERSK KOKURA A.P. Moller-Maersk 1997 7,403 MSC AUSTRIA MSC 1984 3,584 MSC METHONI MSC 2003 6,724 KARMEN Sea Consortium 1991 3,351 SEALAND NEW YORK A.P. Moller-Maersk 2000 6,648 MARINA PO Hainan 1992 3,351 MAERSK KOBE A.P.