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Navios Maritime Partners L.P. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2019

  • Revenue:
    • $63.5 million for Q3 2019
    • $158.1 million for the nine months 2019
  • Net cash from operating activities:
    • $32.7 million for Q3 2019
    • $47.1 million for the nine months 2019
  • Adjusted EBITDA:
    • $41.3 million for Q3 2019
    • $86.3 million for the nine months 2019
  • Completion of Term Loan B refinancing
    • $350.8 million commercial banks/sale and leaseback financing
    • $67.7 million cash from balance sheet
  • Diversified debt maturity profile through 2030
    • No debt maturities until Q3 2021
  • Returning capital to Unitholders
    • $3.4 million cash distribution for Q3 ($0.30 per unit)

MONACO, Oct. 31, 2019 (GLOBE NEWSWIRE) -- Navios Maritime Partners L.P. (“Navios Partners”) (NMM), an international owner and operator of dry cargo vessels, today reported its financial results for the third quarter and nine months ended September 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated, “I am pleased with the strong financial results for the third quarter of 2019. Navios Partners reported $41.3 million in EBITDA, $16.9 million in Net Income and $1.67 in Earnings per Unit. Navios Partners also declared a quarterly distribution of $0.30 cents per unit, representing a current yield of approximately 6%.”

Angeliki Frangou continued, “Following the refinancing of its Term Loan B, Navios Partners has a strong balance sheet and is competitively positioned in a healthy charter market. Navios Partners earned a TCE rate of $18,778 per day for the third quarter, and virtually all of our 37 vessels are on the water generating revenue.”

Cash Distribution

The Board of Directors of Navios Partners declared a cash distribution for the third quarter of 2019 of $0.30 per unit. The cash distribution is payable on November 14, 2019 to all unitholders of record as of November 7, 2019.

Term Loan B Refinancing

In October 2019, Navios Partners fully repaid its Term Loan B due in September 2020. The outstanding balance of the Term Loan B at December 31, 2018 was $418.5 million. Navios Partners funded the refinancing as follows:

  1. $301.3 million financing from commercial banks, with an average (a) amortization profile of 7.1 years and (b) annual interest of LIBOR plus 290 bps;

  2. $49.5 million financing through sale and leaseback transactions. The sale and leaseback transactions have an average (a) duration of 9.4 years and (b) implied interest rate of 6.4%. There are no financial covenants or loan-to-value requirements in the sale and leaseback transactions; and

  3. $67.7 million from cash on the balance sheet.

As a result of the refinancing, Navios Partners has diversified and extended the maturities of its debt through 2030. Furthermore, there are no debt maturities until the third quarter of 2021.

Amendment of the Management Agreement and the Administrative Services Agreement

In August 2019, Navios Partners extended the duration of its existing management agreement (the “Management Agreement”) with Navios Ship Management Inc. (the “Manager”) until January 1, 2025. In addition management fees are fixed for two years commencing from January 1, 2020 at: (a) $4,450 per day per Panamax Vessel; (b) $4,350 per day per Ultra-Handymax Vessel; (c) $5,410 per day per Capesize Vessel; and (d) $6,900 per day per 6,800 TEU Containership. The agreement also provides for a technical and commercial management fee of $50 per day per vessel and an annual increase of 3% after January 1, 2022 unless agreed otherwise. Drydocking expenses are reimbursed at cost for all vessels.

In August 2019, Navios Partners extended the duration of its existing administrative services agreement with the Manager until January 1, 2025, which provide for allocable G&A costs.

Long-Term Cash Flow

Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of approximately 2.0 years. Navios Partners has currently contracted out 96.6% of its available days for 2019, 49.1% for 2020 and 37.9% for 2021, including index-linked charters, expecting to generate revenues (excluding index-linked charters) of approximately $183.7 million, $86.3 million and $81.9 million, respectively. The average contracted daily charter-out rate for the fleet is $15,171, $26,220 and $28,031 for 2019, 2020 and 2021, respectively.

EARNINGS 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, 2019 and 2018. The quarterly information was derived from the unaudited condensed consolidated financial statements for the respective periods. Adjusted EBITDA, Adjusted Earnings per Common Unit, Adjusted Net Income and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners’ results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

         
  Three Month Three Month Nine Month Nine Month
  Period Ended Period Ended Period Ended Period Ended
  September 30,
2019
September 30,
2018
September 30,
2019
September 30,
2018
(in $‘000 except per unit data) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue $ 63,548   $ 62,571   $ 158,111   $ 173,819    
Net Income/ (Loss) $ 16,859   $ 10,457   $ 813   $ (13,598 )  
Adjusted Net Income $ 18,273 (1) $ 16,342 (2) $ 14,694 (4) $ 31,591   (5)
Net cash provided by operating activities $ 32,669   $ 19,394   $ 47,095   $ 50,648    
EBITDA $ 41,309   $ 36,096   $ 75,321   $ 63,182    
Adjusted EBITDA $ 41,309   $ 41,981 (2) $ 86,304 (3)  $ 108,162   (6)
Earnings/ (Loss) per Common Unit (basic and diluted) $ 1.54   $ 0.93   $ 0.07   $ (1.18 )  
Adjusted Earnings per Common Unit (basic and diluted) $ 1.67 (1) $ 1.46 (2) $ 1.33 (4) $ 2.85   (5)
Operating Surplus $ 25,726   $ 25,791   $ 37,635   $ 63,034    
Maintenance and Replacement Capital Expenditure Reserve $ 7,153   $ 7,399   $ 21,887   $ 19,818    


(1) Adjusted Net Income and Adjusted Earnings per Common Unit for the three month period ended September 30, 2019 have been adjusted to exclude a $1.4 million write-off of deferred finance fees and discount related to prepayments of the Term Loan B Facility in the third quarter of 2019.
   
(2) Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Common Unit for the three month period ended September 30, 2018 have been adjusted to exclude a $5.3 million impairment loss related to the sale of one of our vessels and a $0.6 million equity compensation expense.
   
(3) Adjusted EBITDA for the nine month period ended September 30, 2019 has been adjusted to exclude a $7.3 million impairment loss related to the sale of one of our vessels and a $3.6 million revision of the estimated guarantee claim receivable.
   
(4) Adjusted Net Income and Adjusted Earnings per Common Unit for the nine month period ended September 30, 2019 have been adjusted to exclude a $7.3 million impairment loss related to the sale of one of our vessels, a $3.6 million revision of the estimated guarantee claim receivable and a $2.9 million write-off of deferred finance fees and discount related to prepayments of the Term Loan B Facility.
   
(5) Adjusted Net Income and Adjusted Earnings per Common Unit for the nine month period ended September 30, 2018 have been adjusted to exclude a $43.1 million impairment loss related to the sale of three of our vessels, a $1.9 million equity compensation expense and a $0.2 million write-off of deferred finance fees related to $20.2 million debt repayment in the third quarter of 2018.
   
(6) Adjusted EBITDA for the nine month period ended September 30, 2018 has been adjusted to exclude a $43.1 million impairment loss related to the sale of three of our vessels and a $1.9 million equity compensation expense.
   

Three month periods ended September 30, 2019 and 2018

Time charter and voyage revenues for the three month period ended September 30, 2019 increased by $1.0 million, or 1.6%, to $63.5 million, as compared to $62.6 million for the same period in 2018. The increase in time charter and voyage revenues was mainly attributable to the increase in the time charter equivalent rate, or TCE rate, to $18,778 per day for the three month period ended September 30, 2019, from $17,606 per day for the three month period ended September 30, 2018 and the delivery of the Navios Libra in July 2019. That increase was partially mitigated by the decrease in revenue due to the sale of the Navios Felicity and the Navios Libra II in December 2018 and the Navios Galaxy I in April 2019. The available days of the fleet decreased to 3,240 days for the three month period ended September 30, 2019, as compared to 3,428 days for the three month period ended September 30, 2018, mainly due to the decrease of the size of the fleet.

EBITDA for the three month period ended September 30, 2018 was negatively affected by the accounting effect of a: (i) $5.3 million impairment loss on the sale of the Navios Felicity; and (ii) $0.6 million equity compensation expense. Excluding these items, Adjusted EBITDA decreased by $0.7 million to $41.3 million for the three month period ended September 30, 2019, as compared to $42.0 million for the same period in 2018. The decrease in Adjusted EBITDA was primarily due to a: (i) $0.5 million increase in time charter and voyage expenses; (ii) $1.0 million increase in general and administrative expenses; (iii) $0.6 million decrease in equity in net earnings of affiliated companies and (iv) $0.1 million decrease in other income. The above decrease was partially mitigated by a: (i) $1.0 million increase in revenue; and (ii) $0.5 million decrease in management fees.

The reserves for estimated maintenance and replacement capital expenditures for the three month periods ended September 30, 2019 and 2018 were $7.2 million and $7.4 million, respectively (please see “Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).

Navios Partners generated an operating surplus for the three month period ended September 30, 2019 of $25.7 million, as compared to $25.8 million for the three month period ended September 30, 2018. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see “Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).

Net Income for the three month period ended September 30, 2019 was negatively affected by the accounting effect of a: (i) $1.4 million write-off of deferred finance fees and discount related to prepayments of the Term Loan B Facility in the third quarter of 2019. Net Income of Navios Partners for the three month period ended September 30, 2018 was negatively affected by the accounting effect of a: (i) $5.3 million impairment loss on the sale of the Navios Felicity; and (ii) $0.6 million equity compensation expense. Excluding these items, Adjusted Net Income for the three month period ended September 30, 2019 amounted to $18.3 million compared to $16.3 million income for the three month period ended September 30, 2018. The increase in Adjusted Net Income of $1.9 million was due to a: (i) $1.4 million decrease in depreciation and amortization expense; (ii) $0.7 million increase in interest income and (iii) a $0.7 million decrease in interest expense and finance cost, net. The above increase was partially mitigated by a: (i) 0.7 million decrease in Adjusted EBITDA; and (ii) $0.2 million increase in direct vessel expenses.

Nine month periods ended September 30, 2019 and 2018

Time charter and voyage revenues for the nine month period ended September 30, 2019 decreased by $15.7 million, or 9.0%, to $158.1 million, as compared to $173.8 million for the same period in 2018. The decrease in time charter and voyage revenues was mainly attributable to: (i) the decrease in revenue due to the sales of the YM Unity and the YM Utmost in July 2018, the Navios Felicity and the Navios Libra II in December 2018 and the Navios Galaxy I in April 2019; and (ii) the decrease in the TCE rate, to $15,369 per day for the nine month period ended September 30, 2019, from $16,745 per day for the nine month period ended September 30, 2018. That decrease was partially mitigated by the increase in revenue following the acquisition of the Navios Mars and the Navios Sphera in August 2018, the Navios Apollon I, the Navios Prosperity I and the Navios Libertas in June 2018 and the delivery of the Navios Libra in July 2019. The available days of the fleet decreased to 9,720 days for the nine month period ended September 30, 2019, as compared to 9,980 days for the nine month period ended September 30, 2018.

EBITDA for the nine month period ended September 30, 2019 was negatively affected by the accounting effect of a: (i) $7.3 million impairment loss on the sale of the Navios Galaxy I; and (ii) $3.6 million revision of the estimated guarantee claim receivable. EBITDA for the nine month period ended September 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; (ii) $5.3 million impairment loss on the sale of the Navios Felicity; and (iii) $1.9 million equity compensation expense. Excluding these items, Adjusted EBITDA decreased by $21.8 million to $86.3 million for the nine month period ended September 30, 2019, as compared to $108.2 million for the same period in 2018. The decrease in Adjusted EBITDA was primarily due to a: (i) $15.7 million decrease in revenue; (ii) $2.0 million increase in time charter and voyage expenses; (iii) $3.8 million increase in general and administrative expenses; (iv) $3.1 million decrease in equity in net earnings of affiliated companies; and (v) $0.2 million decrease in other income. The above decrease was partially mitigated by a: (i) $1.5 million decrease in management fees; and (ii) $1.4 million decrease in other expenses.

The reserves for estimated maintenance and replacement capital expenditures for the nine month periods ended September 30, 2019 and 2018 were $21.9 million and $19.8 million, respectively (please see “Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).

Navios Partners generated an operating surplus for the nine month period ended September 30, 2019 of $37.6 million, as compared to $63.0 million for the nine month period ended September 30, 2018. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see “Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).

Net Income for the nine month period ended September 30, 2019 was negatively affected by the accounting effect of a: (i) $7.3 million impairment loss on the sale of the Navios Galaxy I; (ii) $3.6 million revision of the estimated guarantee claim receivable; and (iii) $2.9 million write-off of deferred finance fees and discount related to prepayments of the Term Loan B Facility in the nine month period ended September 30, 2019. Net loss for the nine month period ended September 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; (ii) $5.3 million impairment loss on the sale of the Navios Felicity; (iii) $1.9 million equity compensation expense; and (iv) $0.2 million write-off of deferred finance fees. Excluding these items, Adjusted Net Income / Loss for the nine month period ended September 30, 2019 amounted to $14.7 million compared to $31.6 million for the nine month period ended September 30, 2018. The decrease in Adjusted Net Income of $16.9 million was due to a: (i) $21.8 million decrease in adjusted EBITDA; (ii) $1.1 million increase in interest expense and finance cost, net and (iii) $0.1 million increase in direct vessel expenses. The above decrease was partially mitigated by a: (i) $3.9 million decrease in depreciation and amortization expense; and (ii) $2.3 million increase in interest income.

Fleet Employment Profile

The following table reflects certain key indicators of Navios Partners’ core fleet performance for the three and nine month periods ended September 30, 2019 and 2018.

               
  Three Month
 Period Ended
 September 30, 2019
 (unaudited)
  Three Month
 Period Ended
 September 30, 2018
 (unaudited)
  Nine Month
 Period Ended
 September 30, 2019
 (unaudited)
  Nine Month
 Period Ended
 September 30, 2018
 (unaudited)
Available Days(1)   3,240     3,428     9,720     9,980
Operating Days(2)   3,189     3,389     9,586     9,875
Fleet Utilization(3)   98.4%     98.9%     98.6%     98.9%
Time Charter Equivalent Combined (per day) (4) $ 18,778   $ 17,606   $ 15,369   $ 16,745
Time Charter Equivalent Drybulk (per day) (4) $ 16,817   $ 15,559   $ 12,880   $ 13,658
Time Charter Equivalent Containerships (per day) (4) $ 30,631   $ 30,687   $ 30,605   $ 31,458
Vessels operating at period end   37     39     37     39
                       


(1) Available days for the fleet represent total calendar days the vessels were in Navios Partners’ possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys and ballast days relating to voyages. 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 are 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 Navios Partners’ 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 and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, dry dockings or special surveys.
   
(4) TCE rate: Time Charter Equivalent rate per day is defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate per day is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet.
   

Conference Call Details:

Navios Partners' management will host a conference call on Thursday, October 31, 2019 to discuss the results for the third quarter and nine month period ended September 30, 2019.

Call Date/Time: Thursday, October 31, 2019 at 8:30 am ET
Call Title: Navios Partners Q3 2019 Financial Results Conference Call
US Dial In: +1.866.394.0817
International Dial In: +1.706.679.9759
Conference ID: 917 7436

The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:

US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 917 7436

Slides and audio webcast:

There will also be a live webcast of the conference call, through the Navios Partners 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 Partners’ website under the "Investors" section by 8:00 am ET on the day of the call.

About Navios Maritime Partners L.P.

Navios Maritime Partners L.P. (NMM) is a publicly traded master limited partnership which owns and operates 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 including Navios Partners’ expected cash flow generation, future contracted revenues, future distributions and its ability to have a dividend going forward, opportunities to reinvest cash accretively in a fleet renewal program or otherwise, potential capital gains, its ability to take advantage of dislocation in the market and Navios Partners’ growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements.

These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Partners at the time these statements were made. Although 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 risks and are based upon a number of assumptions and estimates that 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, risks relating to: uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles, our continued ability to enter into long-term time charters, our ability to maximize the use of our vessels, expected demand in the dry cargo shipping sector in general and the demand for our Panamax, Capesize, Ultra-Handymax and Containerships in particular, fluctuations in charter rates for dry cargo carriers and container vessels, the aging of our fleet and resultant increases in operations costs, the loss of any customer or charter or vessel, the financial condition of our customers, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, increases in costs and expenses, including but not limited to: crew, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions, 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 Navios Partners’ filings with the Securities and Exchange Commission, including its Form 20-Fs and Form 6-Ks. 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. Navios Partners makes no prediction or statement about the performance of its common units.

Contacts

Navios Maritime Partners L.P.
+1 (212) 906 8645
Investors@navios-mlp.com

Nicolas Bornozis
Capital Link, Inc.
+1 (212) 661 7566
naviospartners@capitallink.com

EXHIBIT 1

NAVIOS MARITIME PARTNERS L.P. 
SELECTED BALANCE SHEET DATA
(Expressed in thousands of U.S. Dollars except unit data)

       
  September 30,
2019
(unaudited)
  December 31,
2018

(unaudited)
ASSETS      
Cash and cash equivalents, including restricted cash $ 25,995   $ 61,455
Vessels, net 1,002,551   1,043,250
Other assets (including current and non-current) 223,411   205,096
Intangible assets 3,457   4,332
Total assets $ 1,255,414   $ 1,314,133
LIABILITIES AND PARTNERS’ CAPITAL      
Other current liabilities $ 18,697   $ 25,529
Current portion of long-term borrowings, net 64,746   26,804
Long-term borrowings, net of current portion 390,519   480,681
Other non-current liabilities 17,026   4,366
Total partners’ capital 764,426   776,753
Total liabilities and partners’ capital $ 1,255,414   $ 1,314,133
       

NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of U.S. Dollars except unit and per unit data)

               
  Three Month
Period Ended
September 30, 2019
(unaudited)
  Three Month
Period Ended
September 30, 2018
(unaudited)
  Nine Month
Period Ended
September 30, 2019
(unaudited)
  Nine Month
Period Ended
September 30, 2018
(unaudited)
Time charter and voyage revenues $ 63,548     $ 62,571     $ 158,111     $ 173,819  
Time charter and voyage expenses (2,708 )   (2,217 )   (8,721 )   (6,705 )
Direct vessel expenses (1,710 )   (1,516 )   (4,823 )   (4,685 )
Management fees (16,695 )   (17,220 )   (49,801 )   (51,292 )
General and administrative expenses (3,897 )   (3,490 )   (14,425 )   (12,534 )
Depreciation and amortization (13,171 )   (14,543 )   (39,903 )   (43,815 )
Vessel impairment losses     (5,258 )   (7,345 )   (43,118 )
Interest expense and finance cost, net (11,432 )   (10,739 )   (35,192 )   (31,386 )
Interest income 1,858     1,159     5,392     3,106  
Other income 105     160     696     880  
Other expense (403 )   (398 )   (4,725 )   (2,470 )
Equity in net earnings of affiliated companies 1,364     1,948     1,549     4,602  
Net income/ (loss) $ 16,859     $ 10,457     $ 813     $ (13,598 )
                       
Earnings per unit:                      
                       
  Three Month
Period Ended
September 30, 2019
(unaudited)

  Three Month
Period Ended
September 30, 2018
(unaudited)

  Nine Month
Period Ended
September 30, 2019
(unaudited)

  Nine Month
Period Ended
September 30, 2018
(unaudited)
Earnings/ (loss) per unit:                      
Common unit (basic and diluted) $ 1.54     $ 0.93     $ 0.07     $ (1.18 )
                               

NAVIOS MARITIME PARTNERS L.P.
Other Financial Information
(Expressed in thousands of U.S. Dollars except unit data)

           
  Nine month
Period Ended
September 30, 2019
(unaudited)
  Nine month
Period Ended
September 30, 2018
(unaudited)
Net cash provided by operating activities 47,095     $ 50,648  
Net cash used in investing activities (6,884 )   (62,451 )
Net cash (used in)/ provided by financing activities (75,671 )   40,192  
(Decrease)/ increase in cash, cash equivalents and restricted cash (35,460 )   $ 28,389  
           

EXHIBIT 2

             
Owned Drybulk Vessels   Type   Built   Capacity
(DWT)
Navios Soleil   Ultra-Handymax   2009   57,337
Navios La Paix   Ultra-Handymax   2014   61,485
Navios Christine B   Ultra-Handymax   2009   58,058
Navios Hyperion   Panamax   2004   75,707
Navios Alegria   Panamax   2004   76,466
Navios Orbiter   Panamax   2004   76,602
Navios Helios   Panamax   2005   77,075
Navios Hope   Panamax   2005   75,397
Navios Sun   Panamax   2005   76,619
Navios Sagittarius   Panamax   2006   75,756
Navios Harmony   Panamax   2006   82,790
Navios Prosperity I   Panamax   2007   75,527
Navios Libertas   Panamax   2007   75,511
Navios Symmetry   Panamax   2006   74,381
Navios Apollon I   Panamax   2005   87,052
Navios Altair I   Panamax   2006   74,475
Navios Sphera   Panamax   2016   84,872
Navios Fantastiks   Capesize   2005   180,265
Navios Aurora II   Capesize   2009   169,031
Navios Pollux   Capesize   2009   180,727
Navios Fulvia   Capesize   2010   179,263
Navios Melodia   Capesize   2010   179,132
Navios Luz   Capesize   2010   179,144
Navios Buena Ventura   Capesize   2010   179,259
Navios Joy   Capesize   2013   181,389
Navios Beaufiks   Capesize   2004   180,310
Navios Ace   Capesize   2011   179,016
Navios Sol   Capesize   2009   180,274
Navios Symphony   Capesize   2010   178,132
Navios Aster   Capesize   2010   179,314
Navios Mars   Capesize   2016   181,259
             


Chartered-in vessel   Type   Built   Capacity
(DWT)
  Purchase Option
Navios Libra   Panamax   2019   82,011   Yes


Owned Containerships   Type   Built   Capacity
(TEU)
Hyundai Hongkong   Containership   2006   6,800
Hyundai Singapore   Containership   2006   6,800
Hyundai Tokyo   Containership   2006   6,800
Hyundai Shanghai   Containership   2006   6,800
Hyundai Busan   Containership   2006   6,800
             

EXHIBIT 3

Disclosure of Non-GAAP Financial Measures

1. EBITDA and Adjusted EBITDA

EBITDA represents net income/ (loss) attributable to Navios Partners’ unitholders before interest and finance costs, before depreciation and amortization (including intangible accelerated amortization) and income taxes. Adjusted EBITDA represents EBITDA before vessel impairment losses and revision of the estimated guarantee claim receivable. Navios Partners uses Adjusted EBITDA as a liquidity measure and reconcile EBITDA and Adjusted EBITDA to net cash provided by operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by operating activities adding back, when applicable and as the case may be, the effect of: (i) net (increase)/ decrease in operating assets; (ii) net (decrease)/ increase in operating liabilities; (iii) net interest cost; (iv) amortization and write-off of deferred financing cost; (v) equity in net earnings of affiliated companies; (vi) impairment charges; (vii) non-cash accrued interest income and amortization of deferred revenue; (viii) equity compensation expense and; (ix) non-cash accrued interest income from receivable from affiliates. Navios Partners believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Partners’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Partners also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

Adjusted EBITDA represents EBITDA excluding certain items, as described under “Earnings Highlights.”

EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Partners’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do 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. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Partners’ performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

2. Operating Surplus

Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense, estimated maintenance and replacement capital expenditures and one-off items. 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.

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 a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

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 Navios Partners’ 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 a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.

4. Reconciliation of Non-GAAP Financial Measures

               
  Three Month
Period Ended
September 30, 2019
($ ‘000)
(unaudited)
  Three Month
Period Ended
September 30, 2018
($ ‘000)
(unaudited)
  Nine Month
Period Ended
September 30, 2019
($ ‘000)
(unaudited)
 

 
Nine Month
Period Ended
September 30, 2018
($ ‘000)
(unaudited)
Net cash provided by operating activities $ 32,669     $ 19,394     $ 47,095     $ 50,648  
Net (increase)/ decrease in operating assets   (2,058 )     9,178       3,844       18,981  
Net (decrease)/ increase in operating liabilities   (174 )     349       (354 )     1,410  
Net interest cost   9,574       9,580       29,800       28,280  
Amortization and write-off of deferred financing cost   (2,625 )     (1,694 )     (7,258 )     (5,325 )
Amortization of operating lease right-of-use asset   (158 )           (158 )      
Non cash accrued interest income and amortization of deferred revenue   3,168       3,156       9,471       9,364  
Equity compensation expense   (524 )     (627 )     (1,537 )     (1,862 )
Vessels impairment loss         (5,258 )     (7,345 )     (43,118 )
Non cash accrued interest income from receivable from affiliates   73       70        214       202  
Equity in earnings of affiliates, net of dividends received   1,364       1,948       1,549       4,602  
EBITDA(1) $ 41,309     $ 36,096     $ 75,321     $ 63,182  
Revision of estimated guarantee claim receivable               3,638        
Equity compensation expense         627             1,862  
Vessels impairment loss         5,258       7,345       43,118  
Adjusted EBITDA $ 41,309     $ 41,981     $ 86,304     $ 108,162  
Cash interest income   127       215       499       546  
Cash interest paid   (8,557 )     (9,006 )     (27,281 )     (25,856 )
Maintenance and replacement capital expenditures   (7,153 )     (7,399 )     (21,887 )     (19,818 )
Operating Surplus $ 25,726     $ 25,791     $ 37,635     $ 63,034  
Cash distribution paid relating to the first half               (6,728 )     (6,840 )
Cash reserves     (22,362 )     (22,371 )     (27,543 )     (52,774 )
Available cash for distribution $ 3,364     $ 3,420     $ 3,364     $ 3,420  
                               

(1)

                               
  Three Month
Period Ended
September 30, 2019
(Unaudited)
  Three Month
Period Ended
September 30, 2018
(Unaudited)
  Nine Month
Period Ended
September 30, 2019
(Unaudited)
  Nine Month
Period Ended
September 30, 2018
(Unaudited)
Net cash provided by operating activities $ 32,669     $ 19,394     $ 47,095     $ 50,648  
Net cash used in investing activities $ (5,248 )   $ (14,050 )   $ (6,884 )   $ (62,451 )
Net cash (used in)/ provided by financing activities $ (36,646 )   $ 11,999     $ (75,671 )   $ 40,192