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Transactions with Related Parties | 6 Months Ended
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Jun. 30, 2018
Transactions with Related Parties [Abstract] |
Transactions with Related Parties |
3. | Transactions with related parties |
The Partnership and its subsidiaries have related-party transactions including vessel acquisitions (Note 4) with Capital Maritime & Trading Corp. (“CMTC”) which is a related party unit holder. The Partnership and its subsidiaries have also related party transactions with Capital Ship Management Corp. (the “Manager” or “CSM”) arising from certain terms of the following three different types of management agreements.
| 1. | Fixed fee management agreement: At the time of the completion of its initial public offering (“IPO”), the Partnership entered into an agreement with its Manager, according to which the Manager provides the Partnership with certain commercial and technical management services for a fixed daily fee per managed vessel which covers the commercial and technical management services, the respective vessels’ operating costs such as crewing, repairs and maintenance, insurance, stores, spares, and lubricants as well as the cost of the first special survey or next scheduled dry-docking, of each vessel. In addition to the fixed daily fees payable under the management agreement, the Manager is entitled to supplementary compensation for additional fees and costs (as defined in the agreement) of any direct and indirect additional expenses it reasonably incurs in providing these services, which may vary from time to time. For the six-month period ended June 30, 2018 and 2017 management fees under the fixed fee management agreement amounted to $116 and $278, respectively. The Partnership also pays a fixed daily fee per bareboat chartered vessel in its fleet, mainly to cover compliance and commercial costs, which include those costs incurred by the Manager to remain in compliance with the oil majors’ requirements, including vetting requirements;
| 2. | Floating fee management agreement: On June 9, 2011, the Partnership entered into a management agreement with its Manager based on actual expenses with an initial term of five years. Under the terms of this agreement the Partnership compensates its Manager for expenses and liabilities incurred on the Partnership’s behalf while providing the agreed services, including, but not limited to, crew, repairs and maintenance, insurance, stores, spares, lubricants and other operating costs. Costs and expenses associated with a managed vessel’s next scheduled dry docking are borne by the Partnership and not by the Manager. The Partnership also pays its Manager a daily technical management fee per managed vessel that is revised annually based on the United States Consumer Price Index. For the six-month period ended June 30, 2018 and 2017 management fees under the floating fee management agreement amounted to $5,512 and $4,893, respectively; and
| 3. | Crude management agreement: On September 30, 2011, the Partnership completed the acquisition of Crude Carriers Corp. and its subsidiaries (“Crude”). Three of the five crude tanker vessels that the Partnership acquired at the time of the completion of the merger with Crude, continue to be managed under a management agreement entered into in March 2010 with the Manager, whose initial term expires on December 31, 2020. Under the terms of this agreement, the Partnership compensates the Manager for all expenses and liabilities incurred on the Partnership’s behalf while providing the agreed services, including, but not limited to, crew, repairs and maintenance, insurance, stores, spares, lubricants and other operating and administrative costs. For the six-month period ended June 30, 2018 and 2017 management fees under the crude management agreement amounted to $526 and $514, respectively. The Partnership also pays its Manager a daily technical management fee per managed vessel that is revised annually based on the United States Consumer Price Index;
The Manager has the right to terminate the Crude management agreement and, under certain circumstances, could receive substantial sums in connection with such termination. In March 2018 this termination fee was adjusted to $10,347 from $10,124. All the above three agreements constitute the “Management Agreements” and the related management fees are included in “Vessel operating expenses – related party” in the accompanying unaudited condensed consolidated statements of comprehensive income. On April 4, 2007, the Partnership entered into an administrative services agreement with the Manager, pursuant to which the Manager has agreed to provide certain administrative management services to the Partnership such as accounting, auditing, legal, insurance, IT, clerical, and other administrative services. Also the Partnership reimburses the Manager and its general partner, Capital GP L.L.C. (the “CGP”) for reasonable costs and expenses incurred in connection with the provision of these services after the Manager submits to the Partnership an invoice for such costs and expenses, together with any supporting detail that may be reasonably required. These expenses are included in general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. In January 2016, the Partnership amended the executive services agreement with CGP according to which CGP also provides certain executive officers services for the management of the Partnership’s business as well as investor relation and corporate support services to the Partnership. For the six-month periods ended June 30, 2018 and 2017 such fees amounted to $844, for each period, and are included in “General and administrative expenses” in the accompanying unaudited condensed consolidated statements of comprehensive income. Balances and transactions with related parties consisted of the following:
Consolidated Balance Sheets |  | As of June 3 0, 201 8 |  |  | As of December 31, 201 7 |  |
Liabilities: |  |  |  |  |  |  |  |  |
CSM – payments on behalf of the Partnership (a) |  |  | 13,704 |  |  |  | 13,218 |  |
Management fee payable to CSM (b) |  |  | - |  |  |  | 1,016 |  |
Due to related parties |  | $ | 13,704 |  |  | $ | 14,234 |  |
Deferred revenue – current (e) |  |  | 1,240 |  |  |  | 2,829 |  |
Total liabilities |  | $ | 14,944 |  |  | $ | 17,063 |  |
Consolidated Statements of Comprehensive Income |  | For the six-month periods ended June 30,
| 2018 |  |  | 2017
Revenues (c) |  | $ | 12,709 |  |  | $ | 22,167
Vessel operating expenses |  |  | 6,154 |  |  |  | 5,685
General and administrative expenses (d) |  |  | 963 |  |  |  | 1,000
(a) | Manager - Payments on Behalf of the Partnership: This line item represents the amount outstanding for payments for operating and voyage expenses made by the Manager on behalf of the Partnership and its subsidiaries.
(b) | Management fee payable to CSM: This line item represents the management fee payable to CSM as a result of the Management Agreements the Partnership entered into with the Manager.
| (c) Revenues: The following table includes information regarding the charter agreements that were in place between the Partnership and CMTC during the six-month periods ended June 30, 2018 and 2017:
Vessel Name |  | Time Charter (TC) in years |  | Commencement of Charter |  | Termination or earliest expected redelivery |  | Gross (Net) Daily Hire Rate
M/T Arionas |  | 1.0 |  | 01/2017 |  | 05/2018 |  | $11.0 ($10.9)
M/T Amore Mio II |  | 0.9 |  | 08/2016 |  | 09/2017 |  | $21.0 ($20.7)
M/T Aristotelis |  | 1.0 |  | 01/2017 |  | 03/2018 |  | $13.8 ($13.6)
M/T Ayrton II |  | 2.0 |  | 02/2016 |  | 03/2018 |  | $18.0 ($17.8)
M/T Miltiadis M II |  | 0.9 |  | 08/2016 |  | 08/2017 |  | $25.0 ($24.7)
M/T Miltiadis M II |  | 0.8 to 1.0 |  | 10/2017 |  | 08/2018 |  | $18.0 ($18.0)
M/T Amadeus |  | 2.0 |  | 06/2015 |  | 08/2017 |  | $17.0 ($16.8)
M/T Atlantas II |  | 1.0 |  | 10/2016 |  | 12/2017 |  | $13.0 ($12.8)
M/T Atlantas II |  | 0.4 to 0.7 |  | 01/2018 |  | 07/2018 |  | $11.0 ($10.9)
M/T Amoureux |  | 1.0 |  | 04/2017 |  | 04/2018 |  | $22.0 ($22.0)
M/T Aktoras |  | 0.8 to 1.0 |  | 09/2017 |  | 01/2018 |  | $11.0 ($10.9)
M/T Aiolos |  | 0.8 to 1.0 |  | 09/2017 |  | 07/2018 |  | $11.0 ($10.9)
M/T Amor |  | 0.2 |  | 09/2017 |  | 01/2018 |  | $14.0 ($13.8)
(d) | General and administrative expenses: This line item mainly includes fees relating to internal audit, investor relations and consultancy fees.
(e) | Deferred Revenue: As of June 30, 2018 and December 31, 2017 the Partnership had received cash in advance for revenue earned in a subsequent period from CMTC.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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