Second Quarter 2013 Earnings Presentation July 25, 2013navios-mlp.irwebpage.com/NMM_Q2_2013_Partners_Earnings... · 2016. 3. 7. · 5-10 years Portfolio of Industry Leading Charterers

Statements in this presentation which are not statements of historical fact are “forward-looking statements” (as such term is defined in Section 21E

of the Securities Exchange Act of 1934, as amended). These forward-looking statements are based on the information available to, and the

expectations and assumptions deemed reasonable by, the Company at the time this presentation was made. Although the Company believes that

the assumptions underlying such statements are reasonable, it can give no assurance that they will be attained. The Company undertakes no

obligation to update any forward-looking statements, whether as a result of new information or future events, unless it is required to do so under the

securities laws. The Company makes no prediction or statement about the performance of its common units. For the selected financial data

presented herein, Navios Partners compiled consolidated statement of operations for the three and six month periods ended June 30, 2013 and June

30, 2012.

.

Second Quarter 2013 Earnings Presentation

July 25, 2013

100% Membership Interest

2.0% General Partner Interest

Incentive Distribution Rights

76.6% Limited Partner Interest 21.4% Limited Partner Interest

25 Dry Bulk Vessels

8 Capesize, 14 Panamax and 3 Ultra Handymax Dry Bulk Carriers

100% Membership Interest

Navios GP L.L.C.

(General Partner)

Navios Maritime Partners L.P.

NYSE: NMM

Common Unitholders Navios Maritime Holdings Inc.

NYSE: NM

Navios Partners Ownership Structure

2

Recent Developments Management efforts secured distributions for 2013 and 2014

3

$17.5 million annual cash savings from Term Loan B − $250 million Term Loan B financing provides significant annual cash saving compared to a commercial bank loan

− Term Loan B provides innovative financing for sector and diversification to existing lending sources

− Favorable Terms: Margin: L+425 bp, Term 5 Years, Amortization 1%

− Ability to prepay the facility at par after the second year

− Higher advance rate as compared to existing bank loans (70% versus 50%)

− Less restrictive covenants than bank facility with relaxed loan to value (“LTV”) maintenance requirements of 80%

− Covenants allow NMM to maintain current dividend distributions

Accretive acquisition of four vessels - $8,601 daily cash breakeven per day per vessel − Previously announced acquisitions funded with $74.8 mm of proceeds from Term Loan B

− Higher advance rate (70% versus 50%) as compared to existing bank loans reduced daily cash break even

− $0.06 accretive to common units*

Reduced debt amortization in the next four years

No debt maturities before 2017 and no unfunded capex

Low leverage: ~ 18.1% net debt to book capitalization

Significant cash balance ($161.4 million of total cash)

Negotiated $13.3 million of advance payment of charter hire for Navios Melodia

− As part of the new suspension agreement, NMM will receive $13.3 million covering hire until April 1, 2016 of which $10.0

million has already been received

* Assumed rates: $12,000 net per day for Panamax and Ultra Handymax vessels and $15,000 for Capesize vessels

Liquidity

Total cash 161.4

Debt 345.0

Shareholders' equity 665.8

Capitalization 1,010.9

Net Debt / Capitalization 18.1%

June 30, 2013

(in millions US$)

Cash (*) 63.2

Amounts in escrow for acquisition

of vessels 98.2

Total cash 161.4

Debt Maturity

(US

$ m

)

(*) Includes restricted cash of $0.8 million. 4

Multiple Avenues of Distribution Growth

Since IPO: 26.4% Distribution increase

325% Operational fleet capacity increase

• Exercised purchase option for

Navios Fantastiks in Q2 2008

and Navios Sagittarius in Q1

2010

• Purchase options on Navios

Prosperity and Navios

Aldebaran

5

Exercising Purchase

Options

Opportunities in the

Dry Bulk S&P Market

Through Navios

Group Vessels

• Vessel values have fallen

significantly from 2008 highs

• Six vessels acquired in the

open market

• Highly fragmented industry

• Distressed opportunities

expected to arise

• Right to purchase Capesize

and Panamax vessels on 3+

year charters

• Eleven vessels dropped down

since IPO

• Navios Group has grown to a

controlled fleet of 123 vessels

of which 83 are dry bulk

vessels

July 2013

2,659,512 DWT

November 2007 IPO

626,100 DWT +325%(1)

(1) Includes owned and chartered-in tonnage

Q2 & H1 Ended June 30, 2013 Earnings Highlights

6

Earnings Highlights

(in $ million) except active vessels and available days

Three

months

ended June

30, 2013

Three

months

ended June

30, 2012

Y-O-Y

Variance

Six

months

ended June

30, 2013

Six

months

ended June

30, 2012

Y-O-Y

Variance

Time charter revenue 49.2 49.1 0.1% 99.4 97.1 2.4%

EBITDA 45.0 36.4 23.8% 82.1 73.2 12.2%

Net Income 19.5* 16.7 17.0% 35.8* 33.6 6.4%

EPU 0.29* 0.29 - 0.53* 0.59 (10.2%)

Operating Surplus 40.0 29.5 35.6% 71.2 59.1 20.5%

Replacement Capex Reserve 3.5 4.5 (23.4%) 6.9 9.0 (22.5%)

Active Vessels 21 19 10.5% 21 19 10.5%

Available Days 1,894 1,630 16.2% 3,784 3,206 18.0%

EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes. EBITDA is presented because Navios Partners believes that

EBITDA is a 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 pay dividends. EBITDA is a “non-GAAP financial measure” 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. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not

be comparable to that used by other companies due to differences in methods of calculation.

Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense and estimated maintenance and replacement 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. 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 US GAAP and should not be considered as an alternative to net income or any other

indicator of Navios Partners’ performance required by US GAAP.

(*) Negatively affected by the non-cash write-off of $3.2 million for both the three and six month periods relating to a favorable contract. Also includes the write off of deferred finance fees

of $2.0 million and $2.4 million for the three and six month periods ended June 30, 2013, respectively.

Balance Sheet

7

Selected Balance Sheet Data (in $ million)

June 30, 2013 December 31, 2012

Cash & cash equivalents (1) 161.4 61.7

Other current assets 23.1 8.4

Vessels, net 703.8 721.4

Total Assets 1,034.7 955.0

Deferred revenue, current 2.7 9.1

Other current liabilities 21.1 27.4

Long term debt, current portion 2.5 23.7

Long term debt 342.6 276.0

Total partners’ capital 665.8 618.7

Total liabilities & partners’ capital 1,034.7 955.0

Net Debt / Asset Value (charter attached) (2) 26.3% 32.4%

Net Debt / Book Capitalization 18.1% 25.9%

Accumulated Replacement Capex Reserve 77.9 71.0

(1) Includes restricted cash of $0.8 million and amounts held in escrow of $98.2 million

(2) Considers Clarksons’ charter attached values of owned vessels and chartered-in vessels (less the exercise values) as ofJune 2013

Q2 2013 Cash Distribution

8

Operating Surplus: $40.0 million

Common Unit Coverage: 1.38x

Distribution: $29.9 million

• $28.9 million to Common Units

• $1.0 million to GP Units

Cash Distribution of $0.4425 per unit for Q2 2013 ($1.77 annualized)

Yield (as of July 24, 2013): 11.8%

Record Date: August 8, 2013

Payment Date: August 13, 2013

Tax Efficient Status – Distributions reported on Form-1099

Committed to minimum distribution of $1.77 per unit for 2013

CONFIDENTIAL – DO NOT DISTRIBUTE

22.6%

5.6%

71.8%

1-3 years

3-5 years

5-10 years

Portfolio of Industry Leading Charterers

Average Charter Duration: approx. 2.7 years

77% of contracted revenue secured by

charters running longer than 3 years

Diversified customer base with

strong creditworthy counterparties

Revenues by Charterer Remaining Charter Duration

(1)

Constellation Energy Group,

7.8%

Rio Tinto, 5.7%

Cosco, 11.9%

Samsun Logix, 16.4%

Korea Line (1), 16.4%

Hanjin, 26.5%

Other, 11.9%

(1) In January 2011, Korea Line Corporation (“KLC”) filed for receivership. The charter was affirmed and will be performed by KLC on its original

terms following an interim suspension period during which NMM trades the vessel directly

9


(6) Profit sharing 50% on actual results above the base rates

(7) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Avg

(8) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize TC Average

(9) In January 2011, Korea Line Corporation (“KLC”) filed for receivership. The charter was affirmed

and will be performed by KLC on its original terms following an interim suspension period during

which Navios Partners trades the vessel directly


(1) Daily charter-out rate net of commissions or net insurance or settlement proceeds, where

applicable

(2) Navios Partners fleet age weighted by DWT

(3) Source: Drewry Shipping Consultants, June 2013

(4) Profit sharing : The owners will receive 100% of the first $2,500 in profits above the base rat e and

thereafter all profits will be split 50% to each party

(5) Profit sharing: The owners will receive 100% of the first $1,500 in profits above the base rate and

thereafter all profits will be split 50% to each party.

Staggered Charter Expirations (1)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Melodia

Luz

Buena Ventura

Aurora II

Pollux

Sagittarius

Galaxy I

Fulvia

Libra II

Hope

Felicity

Hyperion

Orbiter

Fantastiks

Alegria

Apollon

Gemini S

Soleil

Helios

Prosperity

Aldebaran

$24,225 Feb 2014

$12,000 Sep 2015

$10,000 July 2014

$11,000 Nov 2013

$12,000 Nov 2013

$16,984 (7) Feb 2014

$13,500 Feb 2014

$37,953 Apr 2014

$21,937 Feb 2018

$26,125 Nov 2018

$40,888 Apr 2019

$29,356 (8) Nov 2020

$7,838 Dec 2013

$50,588 Sept 2015

$29,356 (10) Sep 2022 (9)

$38,052 Apr 2014

$41,325 Nov 2019

$14,678 Mar 2014

(5)

$29,356 (8) Oct 2020

$8,906 Dec 2013

(6)

(6)

Average Age of Navios Partners’ Fleet (2): 6.7 years

Average Age of Dry Bulk Industry Fleet (3): 9.5 years

2013 Charter Coverage 95.6%

$12,000 May 2014 (5)

(4)

10


GDP Growth Driven by Emerging Economies

Source: IMF July 2013

5.1 5.0 5.4

3.2 3.1 3.8

1.2 1.22.1

(6.0)

(4.0)

(2.0)

-

2.0

4.0

6.0

8.0

10.0

Emerging and developing economies World Advanced economies

IMF Latest Revisions of GDP Growth (%) July 2013 April 2013

World GDP 2013 ▼ 3.1 ▼ 3.3

2014 ▼ 3.8 ▼ 4.0

Advanced economies GDP 2013 1.2 ▼ 1.2

2014 ▼ 2.1 2.2

Emerging markets GDP 2013 ▼ 5.0 ▼ 5.3

2014 ▼ 5.4 ▼ 5.7

11

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1980 1985 1990 1995 2000 2005 2010

Tra

de

(M

illio

n T

ons)

Upside:

India

Source: Drewry Shipping Consultants Ltd.

World Dry Bulk Trade 1980 - 2013

2.8%

5.5%

China admitted

to the WTO

Berlin wall falls

1.1%

Fo

rec

as

t

12

Worldwide urbanization and rising incomes

Global urban populations are expected to increase substantially by 2050 along with

incomes per capita leading to increased metal demand.

Source: Rio Tinto and UN

Growth in incomes and urban populations support increased metal demand

which will increase seaborne movements of raw materials.

42%

51%

67%

0

1

2

3

4

5

6

7

8

9

10

Bil

lio

ns

World urbanization will continue to grow: 6.3B urban residents by 2050

Urban Rural

13

Global iron ore – key developments

Source: Clarksons Capital Markets, Macquarie, China NBS, TSI, SSY, Bloomberg 2013

Available Incremental Global Iron Ore

Due 2013 to 2018

205.4

454.1

635.9

871.9

• Iron ore future prices currently showing a decline over the next two years to

$102/ton in 2015

• Low iron ore prices mean Chinese domestic ore will become uncompetitive,

resulting in substitution of higher quality imports for low quality Chinese

domestic ores.

• Increased steel production in China will also cause increased iron ore imports

14

Million tons

Iron Ore Steel Production

Domestic Production Imports

2006 580 YoY% 326 YoY% 421 YoY%

2007 707 22% 384 18% 488 16%

2008 785 11% 444 16% 500 2%

2009 873 11% 630 42% 567 13%

2010 1,065 22% 619 -2% 626 10%

2011 1,315 24% 687 11% 683 9%

2012 1,329 1% 745 9% 717 5%

2013 through June 644 8% 385 5% 389 9%

Sources: World Steel Association,

National Bureau of Statistics of China/Mysteel, SSY

Chinese Urbanization & Steel Production

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013f 2014f

Millio

n T

on

s p

er

Year

China Seaborne Coal Imports

20% CAGR 2009 to 2012

Mill

ion

To

ns

Days

0

5

10

15

20

25

30

35

40

45

0

20

40

60

80

100

120

Jan

Ap

r

Ju

l

Oct

Jan

Ap

r

Ju

ly

Oct

Jan

Ap

r

Ju

l

Oct

Jan

Ap

r

Ju

l

Oct

Jan

Ap

r

Ju

l

Oct

Jan

Ap

r

2008 2009 2010 2011 2012 2013

Stockpiles Days of Inventory Avg Days of Inventory

15

Aging Fleet + Restricted Credit + High Scrap Price =

Accelerated Scrapping(1)

• 2009 scrapping ≈ 2.4% of fleet DWT (10.0 million DWT)





- Projected 2013 scrapping: 25.7 million DWT or 3.8%

• 2009 total dry bulk fleet ≈ 458.6 million DWT - Non delivery ≈ 40%




• Net fleet growth for 2009 = 9.8%




5.3%

5.6%

0%

10%

Total Dry Bulk Fleet

Dry Bulk Industry Age Profile(2)

(% DWT)

20+ Years

25+ Years

(1) Source: Clarksons

(2) Source: SSY Dry Bulk Forecaster, July 2013

Scrapping Dynamics

10.9%

(75.7 m dwt)

Bulk Carrier Demolition(1)

Year Total Demolition

(m dwt)

Demolition as %

of Fleet

1998 12.2 4.60%

1999 9.1 3.40%

2000 4.5 1.60%

2001 8.1 2.80%

2002 6.0 2.00%

2003 4.1 1.40%

2004 0.3 0.10%

2005 0.9 0.30%

2006 1.8 0.50%

2007 0.4 0.10%

2008 5.0 1.20%

2009 10.0 2.37%

2010 5.8 1.26%

2011 22.3 4.17%

2012 33.6 5.46%

2013 Through

7/19/13

14.1 2.07%

2013 Projected 25.7 3.78%

16

95.9 97.8

138.9

101.2

50.5

30.9

0

20

40

60

80

100

120

140

As of Jan 1, 2012 As of Jan 1, 2013

Source: Clarksons

2013 • June YTD: 62.8 million DWT projected; 35.1 million actual DWT delivered (44% non-delivery by DWT-preliminary)

• 428 actual deliveries, 784 newbuilds projected (45% non-delivery by # of vessels -preliminary)

2012 • 138.9 million DWT projected; 98.2 million actual DWT delivered (29% non-delivery by DWT)

• 1,192 actual deliveries, 1,665 newbuilds projected (28% non-delivery by # of vessels)


• 1,147 actual deliveries, 1,691 newbuilds projected (32% non-delivery by # of vessels)


• 957 actual deliveries, 1,528 newbuilds projected (38% non-delivery by # of vessels)

2009

• 71.3 million DWT projected, 43.1 million actual DWT delivered (40% non-delivery by DWT)

• 546 actual deliveries, 962 newbuilds projected (43% non-delivery by # of vessels)

Orderbook by year of delivery

Mill

ion D

WT

2011 2012 2013 2012 2013 2014

Before

non-delivery

Actual

non-

delivery

41.4mdwt

Dry Bulk Orderbook

Before

non-delivery

Actual non-

delivery

41.1mdwt • 2013 projected deliveries is

currently 101.2 million DWT as

of January 2013 (before non-

deliveries)

• Annualized deliveries for 2013

are about 57 million DWT

based on the current non-

delivery percent

17

-1.5% -0.8%

1.6% 1.2% 1.4% 1.7%

-0.3%

3.4%

-6%

-5.2%

-8.3%

-5.7%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E

Dry Bulk Demand Growth (%) – Net Fleet Growth (%)

1.2%

-1.0%

Seaborne Dry Bulk Supply/Demand Balance

Source: SSY , Baltic Exchange, 2013 Projections: SSY,Howe Robinson, MSi,,Clarksons

2013

Projection

Range

0%

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Baltic Dry Index

18

Baltic Exchange Dry Index* 2002 – 2013

BDI October 2008 to date

BDI 2002 to date

* As of 07/23/2013 19


20

Long Term Charter Coverage

Operating Expense Visibility • Fixed operating costs until December 2013

Young, Growing Fleet

• More than quadrupled fleet capacity since

November 2007 IPO

• Fleet age of 6.7 years (1) vs. industry fleet age

of approx. 9.5 years (2)

Steady Increase in

Distribution Per Unit • 26.4% increase in distributions since inception

(1) Navios Maritime Partners fleet age weighted by DWT

(2) Source: Drewry’s as of June 2013

Strong Counterparties

• Strong creditworthy counterparties (Mitsui,

Cosco, Rio Tinto, Cargill, Constellation etc.)

Insured Revenue Stream

Long-term contracts insured by:

• AA rated Insurance Company in the EU

• Sponsor, Navios Maritime Holdings Inc.

• Average charter duration is ~ 2.7 years

• Staggered charter-out expirations minimize

renewal risk

Company Highlights

www.navios-mlp.com

Appendix: Navios Partners Fleet Owned Vessels

Vessels Type Built DWT Charter Rate ($)(1) Expiration Date(2) Dropdown

Navios Apollon Ultra-Handymax 2000 52,073 13,500 (3) 02/16/2014 Yes

Navios Soleil Ultra-Handymax 2009 57,337 8,906 12/23/2013

Navios La Paix Ultra-Handymax 2014 61,000 Expected Delivery Q1 2014

Navios Gemini S Panamax 1994 68,636 24,225 02/08/2014

Navios Libra II Panamax 1995 70,136 12,000 (3) 09/17/2015

Navios Felicity Panamax 1997 73,867 12,000 (4) 05/08/2014

Navios Galaxy I Panamax 2001 74,195 21,937 02/03/2018

Navios Helios Panamax 2005 77,075 7,838 12/18/2013

Navios Hyperion Panamax 2004 75,707 37,953 04/01/2014 Yes

Navios Alegria Panamax 2004 76,466 16,984 (5) 02/25/2014

Navios Orbiter Panamax 2004 76,602 38,052 04/01/2014 Yes

Navios Hope Panamax 2005 75,397 10,000 07/10/2014 Yes

Navios Sagittarius Panamax 2006 75,756 26,125 11/19/2018 Yes

Navios Harmony Panamax 2006 82,790 Expected Delivery Q4 2013

Navios Sun Panamax 2005 76,619 Expected Delivery Q4 2013

Navios Fantastiks Capesize 2005 180,265 14,678 03/31/2014

Navios Aurora II Capesize 2009 169,031 41,325 11/24/2019 Yes

Navios Pollux Capesize 2009 180,727 40,888 04/24/2019 Yes

Navios Fulvia Capesize 2010 179,263 50,588 09/30/2015 Yes

Navios Melodia (6) Capesize 2010 179,132 29,356 (7) 09/19/2022 Yes

Navios Luz Capesize 2010 179,144 29,356 (8) 11/16/2020 Yes

Navios Buena Ventura Capesize 2010 179,259 29,356 (8) 10/28/2020 Yes

Navios Joy Capesize 2013 180,000 Expected Delivery Q4 2013

Total – 23 Vessels 2,500,477

Chartered-In Vessels

Vessels Type Built DWT Charter Rate ($)(1) Expiration Date(2) Purchase Option Dropdown

Navios Prosperity Panamax 2007 82,535 12,000 (4) 11/29/2013 Yes

Navios Aldebaran Panamax 2008 76,500 11,000 (9) 11/26/2013 Yes

Total – 2 Vessels 159,035

Total Fleet – 25 Vessels 2,659,512 DWT

(1)Daily charter-out rate net of commissions or net insurance or settlement proceeds, where applicable

(2) Assumed midpoint of redelivery by charterers

(3) Profit sharing 50% on actual results above the base rates

(4) Profit sharing: The owners will receive 100% of the first $1,500 in profits above the base rate and

thereafter all profits will be split 50% to each party.

(5) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Average

(6) In January 2011, Korea Line Corporation (“KLC”) filed for receivership. The charter was

affirmed and will be performed by KLC on its original terms following an interim suspension

period during which Navios Partners trades the vessel directly.



(9) Profit sharing: The owners will receive 100% of the first $2,500 in profits above the base rate

and thereafter all profits will be split 50% to each party. 22

www.navios-mlp.com

Documents

Second Quarter 2013 Earnings Presentation July 25, 2013navios-mlp.irwebpage.com/NMM_Q2_2013_Partners_Earnings... · 2016. 3. 7. · 5-10 years Portfolio of Industry Leading Charterers