Capital Product Partners L.P. Announces Strong Second Quarter Financial Results

ATHENS, Greece, July 31, 2008 (PRIME NEWSWIRE) -- Capital Product Partners L.P. (Nasdaq:CPLP), an international owner of modern double-hull tankers, today released its financial results for the second quarter ended June 30, 2008.

Net income for the quarter was $12.6 million. The reported results reflect the consolidation of M/T Aristofanis, which was acquired on April 30, 2008 for the full quarter, as the transaction was between two entities under common control.

If M/T Aristofanis had not been consolidated for the period it was not owned by the Partnership, net income would have been $12.9 million. This translates to earnings of $0.50 per limited partnership unit, which is 43% higher than the $0.35 in the first quarter of 2008 and 2.3 times higher than the $0.22 per unit in the second quarter of 2007. Both increases were driven by the higher number of vessels in our fleet and growth in profit sharing revenues.

The Partnership generated an operating surplus for the quarter of $15.7 million, up 54% both from the first quarter of 2008 as well as the second quarter of 2007. 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.)

Gross revenues for the second quarter were $32.0 million, of which $4.5 million were profit sharing revenues, reflecting buoyant spot rates in both the MR product tanker market and the Suezmax crude oil tanker market. Total operating expenses were $13.7 million, including $6.3 million in fees for the commercial and technical management of the fleet paid to a subsidiary of Capital Maritime & Trading Corp. (Capital Maritime), the Partnership's sponsor, $5.9 million in depreciation expense, and $0.7 million in general and administrative expenses. Net interest expense and finance cost for the quarter was $5.7 million.

Ioannis Lazaridis, Chief Executive Officer and Chief Financial Officer of Capital Product Partners' general partner, said, "We are very pleased with the strong second quarter results, driven by our ongoing fleet expansion as well as our profit sharing strategy which enabled us to take advantage of the rising spot markets in the second quarter. In addition, we continue to benefit from our 5-year fixed-rate management agreement with a subsidiary of Capital Maritime."

The clean product market improved significantly in the second quarter compared to the first quarter supported by a very strong transatlantic market, which was followed by a substantial re-bound in the Eastern market. The market benefited from the exports of diesel from the U.S. as demand in Europe increased, as well as from seasonal increase in U.S. gasoline imports. Further, time charter activity in the product tanker sector regained momentum, while asset prices continued to rise. Spot earnings for Suezmax tankers averaged close to a 10-year record high for the quarter on the back of a tight demand and supply balance of tonnage.

The Partnership's long-term debt as of June 30, 2008 was $428 million and partners' equity was $198 million. The balance sheet remains strong, with a modest debt level relative to the market value of the vessels. On June 17, 2008 the Partnership took delivery of its 17th product tanker, M/T Aristotelis II. Following the $48 million acquisition, wholly funded by debt, the Partnership's remaining undrawn capacity under its credit facilities stands at approximately $292 million. The Partnership also intends to fund with debt the contracted acquisition of M/T Aris II, scheduled for delivery in August 2008.

The Board of Directors of the Partnership has declared a cash distribution for the second quarter of $0.41 per unit, an increase from the previous cash distribution of $0.40 per unit, and 9 percent higher than the Partnership's minimum quarterly distribution. The cash distribution will be paid on August 15, 2008, to unit holders of record on August 6, 2008.

Capital Maritime currently owns a large number of modern tankers of different sizes. The Partnership has a right of first refusal on six MR product tankers from Capital Maritime if medium- to long-term charters are arranged for them.

Mr. Lazaridis concluded, "So far this year, Capital Product Partners has made excellent strategic progress. In 2008, we have taken delivery of two newbuilding MR tankers contracted prior to our offering and have completed the acquisition of two additional tankers from our sponsor, Capital Maritime, that are expected to add approximately $0.08 per unit to our annual operating surplus. In addition, we secured earlier in 2008 a new $350 million 5-year non-amortizing credit facility, which will enable us to continue to fund accretive transactions over the coming years. With our modern, high-quality fleet and unique relationship with our sponsor, Capital Product Partners is well-positioned to capitalize on the tanker industry's long-term growth dynamics and to deliver continued steady growth in cash distributions to our unit holders."

On July 25, 2008 the Partnership held its first Annual General Meeting at which Robert P. Curt was re-elected as a Class I Director until the 2011 Annual Meeting of Limited Partners. No other action was taken at the meeting.

Capital Product Partners will host a conference call to discuss its results today at 10:00 a.m. Eastern Time. The public is invited to listen to the conference call by dialing +1 718-354-1388 (U.S. and Canada), or +1 888-935-4577 (international); reference number 9262240. Participants should dial in 10 minutes prior to the start of the call. The slide presentation accompanying the conference call will be available on the Partnership's website at http://www.capitalpplp.com. An audio webcast of the conference call will also be accessible on the website. The relevant links will be found in the Investor Relations section of the website.

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. Capital Product Partners L.P. owns 17 vessels, including 14 modern MR tankers, two small product tankers and one Suezmax crude oil tanker and intends to purchase one additional product tanker from Capital Maritime & Trading Corp. in August. All 18 vessels are under medium to long-term charters to BP Shipping Limited, Morgan Stanley Capital Group Inc., Overseas Shipholding Group, Shell International Trading & Shipping Company Ltd., and Trafigura Beheer B.V.

Forward Looking Statement:

The statements in this press release that are not historical facts, including statements regarding expected delivery of vessels and funding of newbuildings and the estimated accretion of the dropdowns, 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.

CPLP-F



 Capital Product Partners L.P.
 Unaudited Condensed Consolidated and Predecessor Combined Statements
  of Income
 (Notes 1-4)
 (In thousands of United States dollars, except number of units and
  earnings per unit)
 ---------------------------------------------------------------------

                               For the                  For the
                          three month period        six month period
                             ended June 30,          ended June 30,
                           2008        2007        2008        2007
 ---------------------------------------------------------------------

 ---------------------------------------------------------------------
 Revenues                   32,036      18,500      59,257      33,460
 ---------------------------------------------------------------------

 Expenses:
 Voyage expenses               273         278         563         472
 Vessel operating
  expenses - related
  party                      6,259       2,936      11,590       3,566
 Vessel operating
  expenses                     540       1,050       3,560       3,833
 General and
  administrative expenses      721         428       1,401         428
 Depreciation                5,922       3,092      11,684       5,503
 ---------------------------------------------------------------------
 Operating income           18,321      10,716      30,459      19,658
 ---------------------------------------------------------------------
 Other income /
  (expense), net:
 Interest expense and
  finance cost              (5,933)     (1,464)    (11,515)     (4,512)
 Loss on interest rate
  agreements                    --      (3,763)         --      (3,763)
 Interest income               203         141         466         162
 Foreign currency gain/
  (loss), net                    1         (14)        (57)        (18)
 ---------------------------------------------------------------------
 Total other (expense),
  net                       (5,729)     (5,100)    (11,106)     (8,131)
 ---------------------------------------------------------------------
 Net income                 12,592       5,616      19,353      11,527
 ---------------------------------------------------------------------
 Less:
 Net (income)/loss
  attributable to
  predecessor operations
 Initial vessels net
  income                        --        (182)         --      (5,328)
 M/T Attikos net income         --         (73)         --        (479)
 M/T Amore Mio II net
  income                        --          --      (1,525)         --
 M/T Aristofanis net
  (income)/loss                293        (424)      3,029        (783)
 ---------------------------------------------------------------------
 Partnership's net
  income                $   12,885  $    4,937  $   20,857  $    4,937
 =====================================================================
 General Partner's
  interest in
  Partnership's net
  income                $      631  $       99  $      434  $       99
 Limited Partners'
  interest in
  Partnership's net
  income                    12,254       4,838      20,423       4,838
 Net income per:
   - Common units
      (basic and
      diluted)          $     0.50  $     0.36  $     0.87  $     0.36
   - Subordinated
      units (basic
      and diluted)            0.50          --        0.87          --
   - Total units
      (basic and
      diluted)                0.50        0.22        0.87        0.22
 ---------------------------------------------------------------------
 Weighted-average units
  outstanding:
   - Common units
      (basic and
      diluted)          15,855,067  13,512,500  14,739,845  13,512,500
   - Subordinated
      units (basic
      and diluted)       8,805,522   8,805,522   8,805,522   8,805,522
   - Total units
      (basic and
      diluted)          24,660,589  22,318,022  23,545,367  22,318,022


 Capital Product Partners L.P.
 Unaudited Condensed Consolidated and Predecessor Combined Balance
  Sheets
 (Notes 1-4)
 (In thousands of United States dollars, except number of units)
 ---------------------------------------------------------------------

                                                 June 30,    Dec. 31,
                                                   2008        2007
 ---------------------------------------------------------------------
 Assets
 Current assets
 Cash and cash equivalents                       $  2,658    $ 19,919
 Short term investment (Note 4)                    21,250          --
 Trade accounts receivable                          3,052       2,600
 Due from related parties                              --       4,262
 Prepayments and other assets                         255         410
 Inventories                                           --         320
 Derivative instruments                             1,320          --
 ---------------------------------------------------------------------
 Total current assets                              28,535      27,511
 ---------------------------------------------------------------------
 Fixed assets
 Vessels, net                                     608,369     525,199
 ---------------------------------------------------------------------
 Total fixed assets                               608,369     525,199
 ---------------------------------------------------------------------
 Other non-current assets
 Deferred finance charges, net                      2,650       1,031
 Restricted investment /cash                        4,250       3,250
 ---------------------------------------------------------------------
 Total non-current assets                         615,269     529,480
 ---------------------------------------------------------------------
 Total assets                                    $643,804    $556,991
 ---------------------------------------------------------------------

 Liabilities and Partners' / Stockholders' Equity
 Current liabilities
 Current portion of long-term debt               $     --    $    768
 Current portion of related party long-term debt       --       5,933
 Trade accounts payable                               112       1,271
 Due to related parties                               178          65
 Accrued liabilities                                  770         763
 Deferred revenue                                     632       3,473
 ---------------------------------------------------------------------
 Total current liabilities                          1,692      12,273
 ---------------------------------------------------------------------
 Long-term liabilities
 Long-term debt                                   428,000     281,812
 Long-term related party debt                          --      62,984
 Deferred revenue                                     933         690
 Derivative instruments                            15,223      14,051
 ---------------------------------------------------------------------
 Total long-term liabilities                      444,156     359,537
 ---------------------------------------------------------------------
 Total liabilities                                445,848     371,810
 ---------------------------------------------------------------------
 Commitments and contingencies                         --          --
 Stockholders' Equity
 Common stock                                          --          --
 Additional paid in capital - Predecessor              --      18,060
 Retained earnings - Predecessor                       --       5,182
 Partners' Equity
 General Partner interest                           4,162       3,444
 Limited Partners
   - Common                                       124,809     102,130
   - Subordinated                                  79,125      66,653
 Accumulated other comprehensive loss             (10,140)    (10,288)
 ---------------------------------------------------------------------
 Total partners' / stockholders' equity           197,956     185,181
 ---------------------------------------------------------------------
 Total liabilities and partners' /
  stockholders' equity                           $643,804    $556,991
 ---------------------------------------------------------------------


 Capital Product Partners L.P.
 Unaudited Condensed Consolidated and Predecessor Combined Statements
  of Cash Flows
 (Notes 1-4)
 (In thousands of United States dollars)
 ---------------------------------------------------------------------

                                                       For the
                                                   six month period
                                                    ended June 30,
                                                   2008        2007
 Cash flows from operating activities:
 Net income                                      $ 19,353    $ 11,527
 Adjustments to reconcile net income to net
  cash provided by operating activities:
 Vessel depreciation                               11,684       5,503
 Amortization of deferred charges                     249          34
 Loss on interest rate swap agreement                  --       3,763
 Changes in operating assets and liabilities:
 Trade accounts receivable                         (1,489)     (2,994)
 Insurance claims                                      --           4
 Due from related parties                            (235)     (4,785)
 Prepayments and other assets                        (198)       (288)
 Inventories                                          177        (128)
 Trade accounts payable                               754         786
 Due to related parties                             1,307      (1,374)
 Accrued liabilities                                  425        (972)
 Deferred revenue                                  (2,598)      4,733
 Dry docking expenses paid                           (251)        (15)
 ---------------------------------------------------------------------
 Net cash provided by operating activities         29,178      15,794
 ---------------------------------------------------------------------
 Cash flows from investing activities:
 Vessel acquisitions                             (154,354)   (115,065)
 Increase of restricted investment / cash          (1,000)     (2,250)
 Purchase of short term investment (Note 4)       (21,250)         --
 ---------------------------------------------------------------------
 Net cash used in investing activities           (176,604)   (117,315)
 ---------------------------------------------------------------------
 Cash flows from financing activities:
 Proceeds from issuance of long-term debt         153,500     116,551
 Due to related party                              60,543      39,311
 Payments of long-term debt                        (8,080)     (9,333)
 Payments of related party debt/financing         (52,463)       (893)
 Loan issuance costs                               (1,868)     (1,020)
 Excess of purchase price over book value of
  vessels acquired from entity under common
  control                                          (2,340)    (18,489)
 Dividends paid                                   (19,125)    (25,000)
 Cash balance that was distributed to the
  previous owner                                       (2)     (2,251)
 Capital contributions by predecessor                  --      13,679
 ---------------------------------------------------------------------
 Net cash provided by financing activities        130,165     112,555
 ---------------------------------------------------------------------

 Net increase/(decrease) in cash and cash
  equivalents                                     (17,261)     11,034
 Cash and cash equivalents at beginning of period  19,919       1,239
 ---------------------------------------------------------------------
 Cash and cash equivalents at end of period      $  2,658    $ 12,273
 ---------------------------------------------------------------------

 Supplemental Cash Flow information
 Cash paid for interest                          $  8,437    $  5,933
 Units issued to acquire vessel owning company
  of M/T Amore Mio II                            $ 37,739
 Units issued to acquire vessel owning company
  of M/T Aristofanis                             $ 10,066

Notes

(1) The unaudited condensed consolidated and predecessor combined statements of income and cash flows for the six month period ended June 30, 2008 include the results of operations of M/T Amore Mio II and M/T Aristofanis which were acquired from an entity under common control on March 27, 2008, and April 30, 2008, respectively, as though the transfers had occurred at the beginning of the earliest period presented. The unaudited condensed consolidated and predecessor combined statements of income and cash flows for the six month period ended June 30, 2007 include the results of operations of M/T Attikos and M/T Aristofanis which were acquired from an entity under common control on September 24, 2007 and April 30, 2008 respectively as though the transfer had occurred at the beginning of the earliest period presented. The unaudited condensed consolidated and predecessor combined balance sheet as of December 31, 2007 has been retroactively adjusted to include M/T Amore Mio II and M/T Aristofanis assets, liabilities and owners equity.

(2) On January 29, 2008 and June 17, 2008 the Partnership acquired from Capital Maritime the shares of the vessel owning company of M/T Alexandros II, and M/T Aristotelis II for a total purchase price of $48,000 each. The vessels have been recorded in the Partnership's financial statements at the amount of $46,954 and $46,706, respectively, which were reflected in Capital Maritime's consolidated financial statements, which differ from the acquisition price by $1,046 and $1,294, respectively. The amount of the purchase price in excess of Capital Maritime's basis of the assets of $2,340 was recognized as a reduction of partners' equity and is presented as a financing activity in the statement of cash flows. M/T Alexandros II and M/T Aristotelis II were delivered to Capital Maritime from the shipyard on January 29, 2008 and June 17, 2008 respectively and on the same date the Partnership acquired the shares of these two vessel owning companies. Both vessel owning companies did not have an operating history, as such, there is no information to retroactively adjust that should be considered. Accordingly the M/T Alexandros II and the M/T Aristotelis II were transferred to the Partnership at historical cost at the dates of transfer to the Partnership. All assets, liabilities and equity other than the relevant vessels, related charter agreements and related permits, which the shipowning companies of the M/T Alexandros II and the M/T Aristotelis had at the time of the transfer, were retained by Capital Maritime.

(3) On March 27, 2008 and April 30, 2008 the Partnership acquired from Capital Maritime the shares of the vessel owning companies of M/T Amore Mio II and M/T Aristofanis for a total consideration of $85,739 and $21,566 respectively. The acquisition of the shares of the vessel owning company of M/T Amore Mio II was funded by $2,000 from available cash, $46,000 through a drawn down from the new credit facility of $350,000, and the remaining amount through the issuance of 2,048,823 common units to Capital Maritime at a price of $18,42 per unit which represents the closing price of the Partnership's units on March 26, 2008 as quoted on Nasdaq Stock Exchange. The acquisition of the shares of the vessel owning company of M/T Aristofanis was funded by $11,500 through a drawn down from the new credit facility of $350,000, and the remaining amount through the issuance of 501,308 common units to Capital Maritime at a price of $20.08 per unit which represents the closing price of the Partnership's units on April 29, 2008 as quoted on Nasdaq Stock Exchange. M/T Amore Mio II and M/T Aristofanis have been recorded in the Partnership's financial statements at the amount of $85,146 and $10,831 respectively, reflecting their historical cost in Capital Maritime's consolidated financial statements, and differ from the acquisition price by $593 and $10,735 respectively. The amounts of the purchase price in excess of Capital Maritime's basis of the M/T Amore Mio II and M/T Aristofanis of $593 and $10,735 respectively were recognized as a reduction of partners' equity. As required by the provision of Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS No. 141"), the Partnership accounted for the acquisition of the vessel owning companies of M/T Amore Mio II and M/T Aristofanis as a transfer of net assets between entities under common control at Capital Maritime's carrying amounts (historical cost) of the net assets contributed. In addition, transfers of net assets between entities under common control are accounted for as if the transfer occurred at the beginning of the earliest period presented, and prior years financial statements are retroactively adjusted to furnish comparative information similar to the pooling-of-interest method of accounting.

(4) Short term investment consists of cash time deposit with original maturity of six months.



 Capital Product Partners L.P.
 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 table below reconciles Operating Surplus to net income.



 Reconciliation of Non-GAAP Financial Measure -
  Operating Surplus                                    For the
                                                  three month period
                                                  ended June 30, 2008


 Net income                                                  $ 12,592

 Adjustments to reconcile net income to net
  cash provided by operating activities

 Depreciation and amortization                      6,030
 Deferred revenue                                     217
 M/T Aristofanis net income from April 1, 2008
  to April 29, 2008                                   293
 M/T Aristofanis depreciation and amortization
  from April 1, 2008 to April 29, 2008                (53)      6,487
 ---------------------------------------------------------------------
 NET CASH PROVIDED BY OPERATING ACTIVITIES                     19,079
 ---------------------------------------------------------------------

 Replacement Capital Expenditures                              (3,411)
 ---------------------------------------------------------------------
 OPERATING SURPLUS                                             15,668
 ---------------------------------------------------------------------

 Recommended reserves                                          (5,285)
 ---------------------------------------------------------------------
 AVAILABLE CASH                                                10,383
 ---------------------------------------------------------------------
CONTACT:  Capital GP L.L.C.
          Ioannis Lazaridis, Chief Executive Officer and 
           Chief Financial Officer
          +30 (210) 4584 950
          i.lazaridis@capitalpplp.com 

          Capital Maritime & Trading Corp.
          Merete Serck-Hanssen, SVP Finance 
          +1 (203) 918-0703
          m.serckhanssen@capitalmaritime.com
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