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Navios Maritime Partners L.P. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2009
Marketwire
Oct 27, 2009
PIRAEUS, GREECE -- (Marketwire) -- 10/28/09 -- Navios Maritime Partners L.P. ("Navios Partners") (NYSE: NMM), an owner and operator of dry cargo vessels, reported its financial results for the third quarter and nine month period ended September 30, 2009.
Ms. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated: "Our conservative business policy enabled Navios Partners to weather the recent market volatility and permitted us to access the capital markets, in a traditional manner, twice in the last 6 months. As a result, we have solidified our balance sheet and acquired two vessels. With the addition of the most recent vessel, we are pleased to announce an increase in our cash distribution of 1.3% by declaring a $0.405 per unit cash distribution for the third quarter of 2009."
Ms. Frangou continued, "We believe that Navios Partners is well positioned for the future as it has a conservative balance sheet and long-term employment with quality charter parties which are insured by AA+ rated EU governmental agency."
Throughout this press release, EBITDA for the nine months ended September 30, 2009 and 2008 represents net income before interest, depreciation and amortization and before non-cash consideration for the release of the obligation to acquire the Navios Bonavis.
Recent Developments
Increase in Cash Distributions
The Board of Directors of Navios Partners declared a cash distribution for the third quarter of 2009 of $0.405 per unit. This represents an increase of 1.3% from $0.40 per unit in the second quarter of 2009. The distribution is payable on November 12, 2009 to all holders of record as of November 9, 2009.
Completion of Offering of 3,160,400 Common Units
On September 23, 2009, Navios Partners completed its public offering of 2,800,000 common units at $12.21 per unit and raised gross proceeds of $34.2 million to fund its fleet expansion and/or for general partnership purposes. The net proceeds of the offering, including discount and excluding offering costs of $0.3 million, were $32.5 million. Pursuant to the offering, Navios Partners issued 57,143 additional general partnership units to its general partner in exchange for $0.7 million of net proceeds (the "September Offering").
On October 15, 2009, Navios Partners completed the exercise of the overallotment option previously granted to their underwriters in connection with the September Offering and purchased 360,400 additional common units at the public offering price less the underwriting discount. Navios Partners raised gross proceeds of $4.4 million and net proceeds of approximately $4.2 million. Navios Partners issued 7,355 additional general partnership units to its general partner. The net proceeds from the issuance of the general partnership units were $0.1 million.
As a result of the above transactions, Navios Partners raised a gross amount of $39.4 million and a net amount of $37.2 million.
Acquisition of Navios Apollon
Navios Partners has agreed to purchase from Navios Maritime Holdings Inc. ("Navios Holdings") (NYSE: NM) the vessel Navios Apollon, a 52,073 dwt Ultra-Handymax vessel built in 2000, for a purchase price of $32.0 million. The vessel is expected to be delivered before November 2009. The acquisition was funded with the net proceeds from the September Offering.
Navios Apollon has been chartered out at a net rate of $23,700 per day for a remaining period of three years expiring in November 2012. The annualized EBITDA is expected to be approximately $6.7 million.
Following the acquisition of Navios Apollon, Navios Partners' operational fleet has eleven drybulk vessels, consisting of one Capesize, nine Panamax vessels and one Ultra-Handymax vessel. The fleet has a total capacity of 905,826 dwt and an average age of approximately 6.8 years.
Shipmanagement Agreement
Navios Partners fixed the rate for ship management services of its owned fleet for an additional period of two years under the existing agreement with Navios Shipmanagement Inc., a subsidiary of Navios Holdings. The new management fees are (a) $4,500 daily rate per Ultra-Handymax vessel, (b) $4,400 daily rate per Panamax vessel and (c) $5,500 daily rate per Capesize vessel for the two-year period ending November 16, 2011.
Long Term and Insured Cash Flow
Navios Partners has entered into long-term time charters-out for all eleven vessels with a remaining average term of 4.1 years, providing a stable base of revenue and distributable cash flow. Navios Partners has currently contracted out 100% for 2009 and 2010, 82% for 2011 and 76% for 2012 generating revenues of $91.7 million, $104.7 million, $89.6 million and $84.5 million, respectively. The average contractual daily charter-out rate for the fleet is $25,850, $26,102, $27,283 and $27,610 for 2009, 2010, 2011 and 2012, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2009 and 2010 is $12,636 and $12,205 respectively.
Navios Partners' charter-out contracts have been fully insured by an AA+ rated European Union governmental agency.
FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Partners has compiled consolidated statements of operations for the three and nine month periods ended September 30, 2009 and September 30, 2008. The quarterly 2009 and 2008 information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA and Operating Surplus are non-US GAAP financial measures and should not be used in isolation or substitution for Navios Partners' results.
Three Month Three Month Nine Month Nine Month
Period ended Period ended Period ended Period ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Revenues $ 23,717 $ 21,272 $ 67,028 $ 53,531
EBITDA (1) $ 16,774 $ 14,581 $ 46,691 $ 35,903
Net income $ 10,789 $ 8,948 $ 23,340 $ 19,949
Earnings per Common
unit (basic and
diluted) 0.44 0.41 1.08 1.16
Operating Surplus $ 13,124 $ 9,614 $ 35,106 $ 22,679
Capital expenditure
reserve $ 1,957 $ 2,742 $ 5,872 $ 7,152
(1) EBITDA for the nine month period ended September 30, 2009 represents
net income before interest, depreciation and amortization and before
non-cash consideration for the release of the obligation to acquire the
Navios Bonavis.
Three month period ended September 30, 2009
Time charter and voyage revenues for the three month period ended September 30, 2009 increased by $2.4 million or 11.3% to $23.7 million as compared to $21.3 million for the same period in 2008. The increase was mainly attributable to the acquisition of the rights to the Navios Sagittarius on June 10, 2009.
EBITDA increased by $2.2 million to $16.8 million for the three month period ended September 30, 2009 as compared to $14.6 million for the same period of 2008. This $2.2 million increase in EBITDA was primarily due to: (a) a $2.4 million increase in revenue following the delivery of Navios Sagittarius in Navios Partners' chartered-in fleet in June 2009; and (b) a $0.7 million decrease in general and administrative expenses. The above favorable variance of $3.1 million was mitigated by a $0.9 million increase in time charter and voyage expenses due to the delivery of Navios Sagittarius in Navios Partners' chartered-in fleet in June 2009.
The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended September 30, 2009 and 2008 was $2.0 million and $2.7 million, respectively. Expansion capital expenditures for the three month periods ended September 30, 2009 and 2008 was $0 and $35.0 million, respectively.
Navios Partners generated an operating surplus for the three month period ended September 30, 2009 of $13.1 million in comparison to $9.6 million for the three month period ended September 30, 2008. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of Navios Partners and other master limited partnerships (please see Reconciliation of Non-GAAP Financial Measures on Exhibit 3).
Net income for three months ended September 30, 2009 amounted to $10.8 million compared to $8.9 million for the three months ended September 30, 2008. The increase in net income by $1.9 million was due to: (a) a $2.2 million increase in EBITDA; and (b) a $0.6 million decrease in interest expense. This increase was mitigated by $0.9 million increase in depreciation and amortization expense.
Nine month period ended September 30, 2009
Time charter and voyage revenues for the nine month periods ended September 30, 2009 increased by $13.5 million or 25.2% to $67.0 million as compared to $53.5 million for the same period in 2008. The increase was mainly attributable to the delivery of the Navios Aldebaran on March 17, 2008, the acquisition of the Navios Hope on July 1, 2008, both of which were fully operating during the nine month period ended September 30, 2009 and the acquisition of the rights to the Navios Sagittarius on June 10, 2009.
EBITDA increased by $10.8 million to $46.7 million for the nine month period ended September 30, 2009 as compared to $35.9 million for the same period of 2008. This $10.8 million increase in EBITDA was primarily due to a $13.5 million increase in revenue as a result of the increased number of vessels in Navios Partners' fleet, which was mitigated by: (a) a $1.3 million increase in time charter and voyage expenses as a result of the increased number of vessels in Navios Partners' chartered-in fleet; (b) a $1.3 million increase in management fees, due to the increase in the number of vessels; and (c) a $0.1 million increase in general and administrative expenses due to the increase in the number of owned and chartered-in vessels during the nine month period ended September 30, 2009, compared to the respective period in 2008.
The reserve for estimated maintenance and replacement capital expenditures for the nine month periods ended September 30, 2009 and 2008 was $5.9 million and $7.2 million, respectively. Expansion capital expenditures for the nine month periods ended September 30, 2009 and 2008 was $34.6 million and $69.2 million, respectively.
Navios Partners generated an operating surplus for the nine month period ended September 30, 2009 of $35.1 million in comparison to $22.7 million for the nine month period ended September 30, 2008. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of Navios Partners and other master limited partnerships (please see Reconciliation of Non-GAAP Financial Measures on Exhibit 3).
Net income for the nine months ended September 30, 2009 amounted to $23.3 million compared to $19.9 million for the nine months ended September 30, 2008. The increase in net income by $3.4 million was due to (a) a $10.8 million increase in EBITDA; and (b) a $1.1 million decrease in interest expense. This increase was mitigated by (a) a $2.4 million increase in depreciation and amortization expense; and (b) a $6.1 million non-cash compensation expense.
Fleet Employment Profile
The following table reflects certain key indicators indicative of the performance of Navios Partners and its core fleet performance for the three and nine month periods ended September 30, 2009.
Three Month Three Month Nine Month Nine Month
Period ended Period ended Period ended Period ended
September September September 30, September 30,
30, 2009 30, 2008 2009 2008
------------- ------------- ------------- -------------
Available Days
(1) 920 828 2,570 2,191
Operating Days
(2) 920 818 2,569 2,174
Fleet
Utilization
(3) 100% 98.7% 99.9% 99.2%
Time Charter
Equivalent
(per day) $ 25,779 $ 25,691 $ 26,081 $ 24,437
Vessels
operating at
period end 10 9 10 9
(1) Available days for the fleet represent total calendar days the vessels
were in our possession for the relevant period after subtracting
off-hire days associated with major repairs, drydockings or special
surveys. The shipping industry uses available days to measure the
number of days in a relevant period during which a vessel is capable of
generating revenues.
(2) Operating days is the number of available days in the relevant period
less the aggregate number of days that the vessels are off-hire due to
any reason, including unforeseen circumstances. The shipping industry
uses operating days to measure the aggregate number of days in a
relevant period during which vessels actually generate revenues.
(3) Fleet utilization is the percentage of time that our vessels were
available for revenue generating available days, and is determined by
dividing the number of operating days during a relevant period by the
number of available days during that period. The shipping industry uses
fleet utilization to measure efficiency in finding employment for
vessels.
Conference Call details:
Navios Partners' management will host a conference call to discuss the results on Thursday, October 29, 2009, at 8:00 am EDT.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers:
US Toll Free Dial In: +1866 819 7111 UK Toll Free Dial In: +0800 953 0329 International Dial In: +44 (0) 1452 542 301 Please quote "NAVIOS MLP."
A telephonic replay of the conference call will be available until November 5, 2009 by dialing the following numbers:
US Toll Free Dial In: +1866 247 4222 UK Toll Free Dial In: +0800 953 1533 International Dial In: +44 1452 550 000 Access Code: 33433537#
Slides and audio webcast:
There will also be a live webcast of the conference call, through the NAVIOS MARITIME PARTNERS L.P. website (www.navios-mlp.com) under "Investors." Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A supplemental slide presentation will be available on the Navios Maritime Partners L.P. website at www.navios-mlp.com under the "Investors" section at 7:15 am EDT on the day of the call.
About Navios Maritime Partners L.P.
Navios Maritime Partners L.P. (NYSE: NMM), a publicly traded master limited partnership formed by Navios Maritime Holdings Inc. (NYSE: NM) is an owner and operator of dry cargo vessels. For more information, please visit our website at www.navios-mlp.com
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios Partners' growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. Although the Navios Partners believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Partners. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Partners' filings with the Securities and Exchange Commission. Navios Partners expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Partners' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
EXHIBIT 1
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars except unit data)
September 30, December 31,
2009 2008
------------- -------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 53,387 $ 28,374
Restricted cash 10,821 -
Accounts receivable, net 233 313
Prepaid expenses and other current assets 263 371
------------- -------------
Total current assets 64,704 29,058
------------- -------------
Vessels, net 280,011 291,340
Deferred financing costs, net 1,924 1,915
Deferred dry dock and special survey costs,
net 229 594
Intangible assets other than goodwill 33,459 -
------------- -------------
Total non-current assets 315,623 293,849
------------- -------------
Total assets $ 380,327 $ 322,907
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable $ 644 $ 594
Accrued expenses 2,318 1,662
Deferred voyage revenue 8,158 2,606
Amounts due to related parties 5,119 1,539
Current portion of long-term debt - 40,000
------------- -------------
Total current liabilities 16,239 46,401
------------- -------------
Long-term debt 195,000 195,000
Unfavorable lease terms 3,161 4,659
Deferred voyage revenue 19,444 -
------------- -------------
Total non-current liabilities 217,605 199,659
------------- -------------
Total liabilities 233,844 246,060
------------- -------------
Commitments and contingencies - -
Partners' Capital:
Common Unitholders (13,631,415 and
19,931,415 units issued and outstanding at
December 31, 2008 and September 30, 2009,
respectively) 308,690 243,639
Subordinated Unitholders (7,621,843 units
issued and outstanding at December 31,
2008 and September 30, 2009) (163,177) (160,092)
General Partner (433,740 and 582,720 units
issued and outstanding at December 31,
2008 and September 30, 2009, respectively) (5,112) (6,700)
Subordinated Series A Unitholders (0 and
1,000,000 units issued and outstanding at
December 31, 2008 and September 30, 2009,
respectively) 6,082 -
------------- -------------
Total partners' capital 146,483 76,847
------------- -------------
Total liabilities and partners' capital $ 380,327 $ 322,907
============= =============
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of U.S. Dollars except unit and per unit amounts)
Three Month Three Month Nine Month Nine Month
Period ended Period ended Period ended Period ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Time charter
and voyage
revenues $ 23,717 $ 21,272 $ 67,028 $ 53,531
Time charter
and voyage
expenses (3,729) (2,797) (10,088) (8,801)
Direct vessel
expenses (117) (144) (365) (433)
Management fees (2,668) (2,668) (7,917) (6,607)
General and
administrative
expenses (542) (1,217) (2,341) (2,220)
Depreciation
and
amortization (4,195) (3,277) (10,973) (8,588)
Interest
expense and
finance cost,
net (1,698) (2,287) (6,045) (7,099)
Interest income 25 75 114 166
Compensation
expense - - (6,082) -
Other income 79 - 92 23
Other expense (83) (9) (83) (23)
------------- ------------- ------------- -------------
Net income $ 10,789 $ 8,948 $ 23,340 19,949
============= ============= ============= =============
Earnings per unit:
Three Month Three Month Nine Month Nine Month
Period ended Period ended Period ended Period ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Net income $ 10,789 $ 8,948 $ 23,340 $ 19,949
Earnings per unit
(see note 12):
Common unit (basic
and diluted) $ 0.44 $ 0.41 $ 1.08 $ 1.16
Subordinated unit
(basic and
diluted) $ 0.38 $ 0.41 $ 0.80 $ 0.81
General partner
unit (basic and
diluted) $ 0.42 $ 0.48 $ 1.05 $ 1.09
Subordinated Series
A unit (basic and
diluted) $ - $ - $ - $ -
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
Nine Month Nine Month
period Ended period Ended
September 30, September 30,
2009 2008
------------- -------------
(unaudited) (unaudited)
OPERATING ACTIVITIES
Net income $ 23,340 $ 19,949
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation and amortization 10,973 8,588
Amortization and write-off of deferred
financing cost 190 161
Amortization of deferred dry dock costs 365 433
Compensation expense 6,082 -
Changes in operating assets and liabilities:
(Increase)/decrease in restricted cash (821) 797
Decrease in accounts receivable 80 83
Decrease/(increase) in prepaid expenses and
other current assets 108 (32)
Increase/(decrease) in accounts payable 50 (66)
Increase in accrued expenses 656 143
Increase in deferred voyage revenue 24,996 1,852
Increase/(decrease) in amounts due to related
parties 3,580 (1,637)
------------- -------------
Net cash provided by operating activities 69,599 30,271
------------- -------------
INVESTING ACTIVITIES:
Acquisition of vessels - (69,505)
Acquisition of contracts (34,600) -
------------- -------------
Net cash used in investing activities (34,600) (69,505)
------------- -------------
FINANCING ACTIVITIES:
Cash distribution paid (27,461) (16,203)
Proceeds from issuance of general partner
units 1,642 918
Proceeds from issuance of common units 66,033 -
Proceeds from long term debt - 70,000
Increase in restricted cash (10,000) -
Repayment of long-term debt and payment of
principal (40,000) -
Debt issuance costs (200) (326)
------------- -------------
Net cash (used in)/provided by financing
activities (9,986) 54,389
------------- -------------
Increase in cash and cash equivalents 25,013 15,155
------------- -------------
Cash and cash equivalents, beginning of
period 28,374 10,095
------------- -------------
Cash and cash equivalents, end of period $ 53,387 $ 25,250
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid for interest $ 6,020 $ 6,856
Issuance of common units to Navios Holdings
related to the acquisition of Navios Aurora
I in July 2008 $ - $ 44,937
============= =============
Non-cash operating activities
Issuance of units in connection with the non-cash compensation expense (1)
EXHIBIT 2
Original
Charter Original
Expiration Charter Out
Date/ New Rate/ New
Charter Charter Out
Capacity Expiration Rate per day
Owned Vessels Type Built (DWT) Date(1) (2)
Navios Gemini S Panamax 1994 68,636 February 2014 $ 24,225
Navios Libra II Panamax 1995 70,136 December 2010 $ 23,513
Navios Felicity Panamax 1997 73,867 June 2013 $ 26,169
Navios Galaxy I Panamax 2001 74,195 February 2018 $ 21,937
Navios Alegria Panamax 2004 76,466 December 2010 $ 23,750
Navios
Fantastiks Capesize 2005 180,265 March 2011 $ 32,279
February 2014 $ 36,290
Navios Hope (3) Panamax 2005 75,397 May 2010 $ 10,643
September 2013 $ 16,841
Navios Apollon Ultra Handymax 2000 52,073 November 2012 $ 23,700
Long-term Chartered-in Vessels
Navios Prosperity (4) Panamax 2007 82,535 July 2012 $ 24,000
Navios Aldebaran (5) Panamax 2008 76,500 March 2013 $ 28,391
Navios Sagittarius (6) Panamax 2006 75,756 November 2018 $ 26,125
(1) Represents the initial expiration date of the time charter and, if applicable, the new time charter expiration date for the vessels with new time charters.
(2) Net time charter-out rate per day (net of commissions). Represents the charter-out rate during the time charter period prior to the time charter expiration date and, if applicable, the charter-out rate under the new time charter.
(3) Navios Partners received a lump sum charter payment of approximately $29.6 million for Navios Hope in the first quarter of 2009. This charter payment was net of expenses and represents an acceleration of a significant portion of the $56.2 million nominal charter amount. Navios Partners will receive the entire amount of the original charter through the lump sum payment and the new charter payments for the remainder of the term of the original charter (ending in 2013). The rate for the period from April, 1 2009 to August 2013 is as presented in the table above. On February 9, 2009, Navios Aurora I was renamed to the Navios Hope.
(4) Navios Prosperity is chartered-in for seven years starting from June 19, 2008 and we will have options to extend for two one-year periods. We have the option to purchase the vessel after June 2012 at a purchase price that is initially 3.8 billion Yen declining pro rata by 145 million Yen per calendar year.
(5) Navios Aldebaran was delivered on March 17, 2008. Navios Aldebaran is chartered-in for seven years and we have options to extend for two one-year periods. We have the option to purchase the vessel after March 2013 at a purchase price that is initially 3.6 billion Yen declining pro rata by 150 million Yen per calendar year.
(6) On June 10, 2009 Navios Partners purchased from Navios Maritime Holdings Inc. the rights to the Navios Sagittarius, a 2006 Japanese-built Panamax vessel with a capacity of 75,756 dwt, for a $34.6 million in cash. The Navios Sagittarius is a chartered-in-vessel, and Navios Partners has an option to purchase the vessel, beginning December 2009, at a purchase price that is initially 2.5 billion Japanese Yen declining each year by 120.0 million Japanese Yen.
EXHIBIT 3
Disclosure of Non-GAAP Financial Measures
1. EBITDA
EBITDA generally represents net income before interest, depreciation and amortization. Navios Partners uses EBITDA because it believes that EBITDA is a basis upon which liquidity can be assessed and EBITDA presents useful information to investors regarding Navios Partners' ability to service and/or incur indebtedness. Navios Partners also uses EBITDA: (i) in its credit agreement to measure compliance with covenants such as interest coverage and debt incurrence; (ii) by prospective and current lessors as well as potential lenders to evaluate potential transactions; and (iii) to evaluate and price potential acquisition candidates.
EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of Navios Partners' results as reported under US GAAP. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect any cash requirements for such capital expenditures. As a result of these limitations, EBITDA should not be considered as a principal indicator of Navios Partners' performance.
2. Operating Surplus
Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense and estimated maintenance and replacement capital expenditures and expansion capital expenditures. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of or the revenue generated by Navios Partners' capital assets. Expansion capital expenditures are those capital expenditures that increase the operating capacity of or the revenue generated by Navios Partners' capital assets.
Operating surplus is a quantitative measure 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 Navios Partners' performance required by accounting principles generally accepted in the United States.
3. Available Cash
Available Cash generally means, for each fiscal quarter, all cash on hand at the end of the quarter:
-- less the amount of cash reserves established by the board of directors
to:
- provide for the proper conduct of our business (including reserve
for maintenance and replacement capital expenditures);
- comply with applicable law, any of Navios Partners' debt
instruments, or other agreements; or
- provide funds for distributions to the unitholders and to the
general partner for any one or more of the next four quarters;
-- plus all cash on hand on the date of determination of available cash
for the quarter resulting from working capital borrowings made after
the end of the quarter. Working capital borrowings are generally
borrowings that are made under any revolving credit or similar
agreement used solely for working capital purposes or to pay
distributions to partners.
Available Cash is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Available cash 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 Navios Partners' performance required by accounting principles generally accepted in the United States.
4. Reconciliation of Non-GAAP Financial Measures
(unaudited) (unaudited) (unaudited) (unaudited)
Three Month Three Month Nine Month Nine Month
Period ended Period ended Period ended Period ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
($ '000) ($ '000) ($ '000) ($ '000)
------------- ------------- ------------- -------------
Net Cash from
Operating
Activities $ 12,635 $ 16,370 $ 69,599 $ 30,271
Net
increase/
(decrease) in
operating
assets (177) (1,110) 633 (848)
Net increase in
operating
liabilities 2,706 (2,831) (29,282) (292)
Net interest
cost 1,673 2,212 5,931 6,933
Deferred
finance
charges (63) (60) (190) (161)
------------- ------------- ------------- -------------
EBITDA(1) 16,774 14,581 46,691 35,903
Cash interest
income 25 75 114 166
Cash interest
paid (1,718) (2,073) (6,020) (6,856)
Expansion
capital
expenditures - (35,000) (34,600) (69,155)
Equity Issuance 32,882 - 67,675 -
Borrowings to
fund expansion
capital
expenditures - 34,773 - 69,773
Expansion
capital
expenditures
reserve (32,882) - (32,882) -
Maintenance and
replacement
capital
expenditures (1,957) (2,742) (5,872) (7,152)
------------- ------------- ------------- -------------
Operating
Surplus 13,124 9,614 35,106 22,679
Cash
distribution
paid relating
to the first
half of 2009 - - (18,787) (12,966)
Recommended
reserves
accumulated as
of beginning
of January 1 2,126 18 2,126 18
Reserves
accumulated
during the
first half
distributed in
the third
quarter 3,195 99 - -
Recommended
reserves held
as of quarter
end (6,890) (1,382) (6,890) (1,382)
------------- ------------- ------------- -------------
Available cash
for
distribution $ 11,555 $ 8,349 $ 11,555 $ 8,349
============= ============= ============= =============
(1) EBITDA for the nine month period ended September 30, 2009 represents
net income before interest, depreciation and amortization and before
non-cash consideration for the release of the obligation to acquire the
Navios Bonavis.
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