PIRAEUS, GREECE -- (Marketwire) -- 01/24/13 -- Navios Maritime Partners L.P. ("Navios Partners") (NYSE: NMM), an owner and operator of dry cargo vessels, today reported its financial results for the fourth quarter and year ended December 31, 2012.
Ms. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated: "I am pleased with the fourth quarter results of 2012. Net income increased by 114% and EBITDA by almost 59%. We recently announced a quarterly distribution of $0.4425 per unit, providing an annual distribution of $1.77 and a current yield of about 12%."
Ms. Frangou continued: "2012 was another difficult year in shipping, as the industry was buffeted by macro headwinds and global uncertainty. As a result, the Baltic Dry Index recorded a 20-year low. However, 2013 began with a number of favorable resolutions globally, including the ECB's strength of action, the US legislative action, a proactive Japanese administration and the new, pro-growth, Chinese regime. Looking forward, there is a new optimism building, which should lend support to a recovery in the shipping industry. Navios Partners is uniquely positioned to take advantage of this recovery."
RECENT DEVELOPMENTS
Cash Distribution
The Board of Directors of Navios Partners declared a cash distribution for the fourth quarter of 2012 of $0.4425 per unit. The cash distribution is payable on February 14, 2013 to unitholders of record on February 8, 2013.
Loan Prepayment
In December 2012, Navios Partners used $24.6 million from the lump sum cash payment, received from the credit default insurer, to repay debt of $10.8 million due in 2013, $4.9 million due in 2014 and $8.9 million due in 2015 and beyond. This had an effect of reducing the cash breakeven for 2013 by $1,409 per day.
Credit Default Insurance
In November 2012, Navios Partners agreed to restructure its credit default insurance.
In connection with this restructuring, Navios Partners received:
- $24.6 million lump sum cash payment of which $9.8 million was attributable to defaulted charters. The remaining $14.8 million was not attributable to any charter and represented excess cash compensation;
- $175.9 million of revenue covered under the restructured credit default insurance policy for a maximum cash payment of $120.0 million; and
- $76.7 million revenue covered under its sponsor, Navios Maritime Holdings Inc. ("Navios Holdings"), supplemental credit default insurance with a maximum cash payment of $20 million.
Long-Term and Insured Cash Flow
Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of 3.1 years, providing a stable base of revenue and distributable cash flow. Navios Partners has currently contracted out 87.6% of its available days for 2013, 48.3% for 2014 and 40.3% for 2015, generating revenues of approximately $173.9 million, $113.8 million and $97.1 million, respectively. The average contractual daily charter-out rate for the fleet is $25,897, $30,766 and $31,452 for 2013, 2014 and 2015, respectively. The average daily charter-in rate for the active long-term charter-in vessels is $13,513 for 2013.
FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Partners has compiled consolidated statements of income for the three months and the years ended December 31, 2012 and 2011. The quarterly 2012 and 2011 information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners' results.
Three Month Three Month
Period Ended Period Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
(in $'000 except 2012 2011 2012 2011
per unit data) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue $ 52,786 $ 50,464 $ 205,435 $ 186,953
Net income $ 40,137* $ 18,661 $ 95,898* $ 65,335
EBITDA $ 61,251* $ 38,588 $ 177,443* $ 137,790
Earnings per
Common unit
(basic and
diluted) $ 0.65 $ 0.35 $ 1.61 $ 1.33
Operating
Surplus $ 54,150 $ 31,332 $ 148,879 $ 115,870
Maintenance and
Replacement
Capital
expenditures $ (4,942) $ (4,828) $ (18,869) $ (18,569)
* Positively affected by $22.5 million accounting effect from the restructuring of credit default insurance.
Three month periods ended December 31, 2012 and 2011
Time charter revenues for the three month period ended December 31, 2012 increased by $2.3 million or 4.6% to $52.8 million, as compared to $50.5 million for the same period in 2011. The increase was mainly attributable to the acquisition of the Navios Buena Ventura on June 15, 2012, the acquisition of the Navios Soleil on July 24, 2012 and the acquisition of the Navios Helios on July 27, 2012. As a result of these vessel acquisitions, available days of the fleet increased to 1,914 days for the three month period ended December 31, 2012, as compared to 1,647 days for the three month period ended December 31, 2011. The time charter equivalent ("TCE") decreased to $27,297 for the three month period ended December 31, 2012, from $30,646 for the three month period ended December 31, 2011.
EBITDA increased by $22.7 million to $61.3 million for the three month period ended December 31, 2012, as compared to $38.6 million for the same period of 2011. The increase in EBITDA was mainly due to: (i) a $2.3 million increase in revenue following the acquisition of the Navios Buena Ventura on June 15, 2012, the acquisition of the Navios Soleil on July 24, 2012 and the acquisition of the Navios Helios on July 27, 2012; (ii) a $0.8 million decrease in time charter expenses; and (iii) a $22.0 million increase in other income from the credit default insurance settlement. The above increase was partially offset by a $2.0 million increase in management fees, a $0.3 million increase in general and administrative expenses and a $0.1 million increase in other expenses.
The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended December 31, 2012 and 2011 was $4.9 million and $4.8 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 December 31, 2012 of $54.2 million, as compared to $31.3 million for the three month period ended December 31, 2011. 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 months ended December 31, 2012 amounted to $40.1 million compared to $18.7 million for the three months ended December 31, 2011. The increase in net income of $21.4 million was due to a $22.7 million increase in EBITDA and a $0.3 million decrease in interest expense and finance cost, net. The increase was partially offset by a $1.5 million increase in depreciation and amortization expense due to the acquisition of the Navios Buena Ventura, and the favorable lease terms recognized in relation to this acquisition, as well as the acquisitions of the Navios Soleil and the Navios Helios.
Years ended December 31, 2012 and 2011
Time charter revenues for the year ended December 31, 2012 increased by $18.4 million or 9.8% to $205.4 million, as compared to $187.0 million for the same period in 2011. The increase was mainly attributable to the acquisitions of the Navios Luz and the Navios Orbiter on May 19, 2011, the acquisition of the Navios Buena Ventura on June 15, 2012, the acquisition of the Navios Soleil on July 24, 2012 and the acquisition of the Navios Helios on July 27, 2012. As a result of these vessel acquisitions, available days of the fleet increased to 7,002 days for the year ended December 31, 2012, as compared to 6,251 days the year ended December 31, 2011. TCE decreased to $28,907 for the year ended December 31, 2012, from $29,909 for the year ended December 31, 2011.
EBITDA increased by $39.6 million to $177.4 million for the year ended December 31, 2012, as compared to $137.8 million for the same period of 2011. The increase in EBITDA was mainly due to: (i) a $18.4 million increase in revenue following the acquisitions of the five vessels at various times through July 2012 the Navios Luz, the Navios Orbiter, the Navios Buena Ventura, the Navios Soleil and the Navios Helios; (ii) a $4.0 million non-cash charge for the write-off of intangible assets associated with the Navios Apollon charter-out contract incurred in the year ended December 31, 2011; (iii) a $0.6 million decrease in time charter expenses; (iv) a $22.3 million increase in other income mainly from the credit default insurance settlement; and (v) a $0.3 million decrease in other expense. The above increase was partially offset by a $5.4 million increase in management fees and a $0.6 million increase in general and administrative expenses.
The reserve for estimated maintenance and replacement capital expenditures for the year ended December 31, 2012 and 2011 was $18.9 million and $18.6 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).
Navios Partners generated an Operating Surplus for the year ended December 31, 2012 of $148.9 million, as compared to $115.9 million for the year ended December 31, 2011. 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 year ended December 31, 2012 amounted to $95.9 million compared to $65.3 million for the year ended December 31, 2011. The increase in net income of $30.6 million was due to a $39.6 million increase in EBITDA partially offset by: (i) a $7.6 million increase in depreciation and amortization expense due to the acquisitions of the Navios Orbiter, the Navios Luz, the Buena Ventura and the favorable lease terms recognized in relation to these acquisitions and the acquisitions of the Navios Soleil and the Navios Helios; (ii) a $0.9 million increase in interest expense and finance cost, net; and (iii) a $0.5 million decrease in interest income.
Fleet Employment Profile
The following table reflects certain key indicators of Navios Partners' core fleet performance for the three months and the year ended December 31, 2012 and 2011.
Three Month Three Month
Period Ended Period Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2012 2011 2012 2011
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Available Days
(1) 1,914 1,647 7,002 6,251
Operating Days
(2) 1,912 1,633 6,984 5,950
Fleet
Utilization (3) 99.9% 99.2% 99.8% 95.2%
Time Charter
Equivalent (per
day) (4) $ 27,297 $ 30,646 $ 28,907 $ 29,909
Vessels
operating at
period end 21 18 21 18
(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 scheduled 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 and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydockings or special surveys.
(4) Time Charters Equivalents ("TCE") rates are 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 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 today, Thursday, January 24, 2013 to discuss the results for the fourth quarter and year ended December 31, 2012.
Conference Call details:
Call Date/Time: Thursday, January 24, 2013 at 08:30 am ET
Call Title: Navios Partners Q4 & FY 2012 Financial Results Conference Call
US Dial In: +1.866.394.0817
International Dial In: +1.706.679.9759
Conference ID: 8954 0899
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: 8954 0899
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 Partners (NYSE: 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 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. 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 drybulk 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 SHEET
(Expressed in thousands of U.S. Dollars except unit data)
December 31, December 31,
2012 2011
-------------- -------------
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 32,132 $ 48,078
Restricted cash 29,529 8,468
Accounts receivable, net 7,778 4,835
Prepaid expenses and other current assets 594 2,177
-------------- -------------
Total current assets 70,033 63,558
-------------- -------------
Vessels, net 721,391 667,213
Deferred financing costs, net 2,767 2,466
Other long term assets 282 106
Intangible assets 160,479 176,581
-------------- -------------
Total non-current assets 884,919 846,366
-------------- -------------
Total assets $ 954,952 $ 909,924
============== =============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable $ 2,090 $ 2,022
Accrued expenses 3,599 2,986
Deferred voyage revenue 9,112 10,920
Current portion of long-term debt 23,727 36,700
Amounts due to related parties 21,748 4,077
-------------- -------------
Total current liabilities 60,276 56,705
-------------- -------------
Long-term debt 275,982 289,350
Deferred voyage revenue -- 4,230
-------------- -------------
Total non-current liabilities 275,982 293,580
-------------- -------------
Total liabilities 336,258 350,285
-------------- -------------
Commitments and contingencies -- --
Partners' capital:
Common Unitholders (60,109,163 and 46,887,320
units issued and outstanding at December 31,
2012 and December 31, 2011, respectively) 612,222 729,550
Subordinated Unitholders (0 and 7,621,843
units issued and outstanding at December 31,
2012 and December 31, 2011, respectively) -- (177,969)
General Partner (1,226,721 and 1,132,843 units
issued and outstanding at December 31, 2012
and December 31, 2011, respectively) 6,472 1,976
Subordinated Series A Unitholders (0 and
1,000,000 units issued and outstanding at
December 31, 2012 and December 31, 2011,
respectively) -- 6,082
-------------- -------------
Total partners' capital 618,694 559,639
-------------- -------------
Total liabilities and partners' capital $ 954,952 $ 909,924
============== =============
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
Period Period
Ended Ended Year Ended Year Ended
December December December December
31, 2012 31, 2011 31, 2012 31, 2011
($ '000) ($ '000) ($ '000) ($ '000)
(unaudited) (unaudited) (unaudited)
Time charter revenues $ 52,786 $ 50,464 $ 205,435 $ 186,953
Time charter expenses (3,027) (3,801) (12,937) (13,473)
Direct vessel expenses -- (13) (25) (61)
Management fees (8,680) (6,736) (31,689) (26,343)
General and
administrative expenses (1,681) (1,387) (5,555) (4,965)
Depreciation and
amortization (18,648) (17,150) (71,622) (63,971)
Write-off of intangible
asset -- -- -- (3,979)
Interest expense and
finance cost, net (2,516) (2,830) (10,127) (9,244)
Interest income 50 66 229 821
Other income 22,196 235 22,598 272
Other expense (343) (187) (409) (675)
----------- ----------- ----------- -----------
Net income $ 40,137 $ 18,661 $ 95,898 $ 65,335
----------- ----------- ----------- -----------
Earnings per unit:
Three Month Three Month
Period Ended Period Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2012 2011 2012 2011
(unaudited) (unaudited) (unaudited)
------------ ------------ ------------ ------------
Net income $ 40,137 $ 18,661 $ 95,898 $ 65,335
Earnings attributable
to:
Common unit holders 38,920 16,411 93,566 60,506
Subordinated unit
holders -- 1,877 -- 3,522
General partner unit
holders 1,217 373 2,332 1,307
Subordinated Series A
unit holders -- -- -- --
Weighted average units
outstanding (basic and
diluted)
Common unit holders 60,109,163 46,887,320 58,008,617 45,409,807
Subordinated unit
holders -- 7,621,843 -- 7,621,843
General partner unit
holders 1,226,721 1,132,843 1,193,889 1,102,689
Subordinated Series A
unit holders -- 1,000,000 -- 1,000,000
Earnings per unit-
overall (basic and
diluted):
Common unit holders $ 0.65 $ 0.35 $ 1.61 $ 1.33
Subordinated unit
holders $ -- $ 0.25 $ -- $ 0.46
General partner unit
holders $ 0.99 $ 0.33 $ 1.95 $ 1.19
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2012 2011 2010
------------- ------------- -------------
(unaudited)
OPERATING ACTIVITIES
Net income $ 95,898 $ 65,335 $ 60,511
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 71,622 63,971 41,174
Write-off of intangible asset -- 3,979 --
Amortization and write-off of
deferred financing cost 787 530 415
Amortization of deferred dry
dock costs 25 61 92
Changes in operating assets and
liabilities:
Increase in restricted cash (3) (2) (2)
Increase in accounts receivable (2,943) (3,899) (334)
Decrease/(increase) in prepaid
expenses and other current
assets 1,583 396 (1,797)
(Increase)/decrease in other
long term assets (202) 75 (154)
Increase in accounts payable 68 946 558
Increase in accrued expenses 613 1,045 97
Decrease in deferred voyage
revenue (6,038) (6,417) (5,211)
Increase in amounts due to
related parties 17,671 1,444 669
------------- ------------- -------------
Net cash provided by operating
activities 179,081 127,464 96,018
------------- ------------- -------------
INVESTING ACTIVITIES:
Acquisition of vessels (88,505) (76,220) (291,591)
Acquisition of intangibles (21,193) (43,780) (156,166)
------------- ------------- -------------
Net cash used in investing
activities (109,698) (120,000) (447,757)
------------- ------------- -------------
FINANCING ACTIVITIES:
Cash distributions paid (106,878) (95,499) (72,316)
Net proceeds from issuance of
general partner units 1,472 2,052 6,150
Proceeds from issuance of
common units, net of offering
costs 68,563 86,288 253,871
Proceeds from long term debt 44,000 35,000 139,000
(Increase)/decrease in
restricted cash (21,058) (7,642) 12,500
Repayment of long-term debt and
payment of principal (70,340) (30,450) (12,500)
Debt issuance costs (1,088) (413) (1,566)
------------- ------------- -------------
Net cash (used in)/provided by
financing activities (85,329) (10,664) 325,139
------------- ------------- -------------
Decrease in cash and cash
equivalents (15,946) (3,200) (26,600)
============= ============= =============
Cash and cash equivalents,
beginning of period 48,078 51,278 77,878
------------- ------------- -------------
Cash and cash equivalents, end
of period $ 32,132 $ 48,078 $ 51,278
------------- ------------- -------------
EXHIBIT 2
Charter Charter-
Capacity Expiration Out Rate
Owned Vessels Type Built (DWT) Date (1)
---------------- ------------- ----- -------- -------------- -------------
Ultra-
Navios Apollon Handymax 2000 52,073 February 2013 $ 12,500(2)
February 2014 $ 13,500(2)
Ultra-
Navios Soleil Handymax 2009 57,337 December 2013 $ 8,906
Navios Gemini S Panamax 1994 68,636 February 2014 $ 24,225
Navios Libra II Panamax 1995 70,136 September 2015 $ 12,000(2)
Navios Felicity Panamax 1997 73,867 June 2013 $ 26,169
Navios Galaxy I Panamax 2001 74,195 February 2018 $ 21,937
Navios Helios Panamax 2005 77,075 September 2013 $ 9,738
Navios Hyperion Panamax 2004 75,707 April 2014 $ 37,953
Navios Alegria Panamax 2004 76,466 February 2014 $ 16,984(3)
Navios Orbiter Panamax 2004 76,602 April 2014 $ 38,052
Navios Hope Panamax 2005 75,397 August 2013 $ 17,562
Navios
Sagittarius Panamax 2006 75,756 November 2018 $ 26,125
Navios
Fantastiks Capesize 2005 180,265 March 2014 $ 14,678(4)
Navios Aurora II Capesize 2009 169,031 November 2019 $ 41,325
Navios Pollux Capesize 2009 180,727 July 2019 $ 42,250
Navios Fulvia Capesize 2010 179,263 September 2015 $ 50,588
Navios
Melodia(5) Capesize 2010 179,132 September 2022 $ 29,356(6)
Navios Luz Capesize 2010 179,144 November 2020 $ 29,356(7)
Navios Buena
Ventura Capesize 2010 179,259 October 2020 $ 29,356(7)
Long-term Chartered-in Vessels
Navios
Prosperity (8) Panamax 2007 82,535 June 2013 $ 12,000(10)
Navios Aldebaran
(9) Panamax 2008 76,500 March 2013 $ 28,391
(1) Net time charter-out rate per day (net of commissions).These rates do
not include insurance proceeds received upfront in December 2012.
(2) Profit sharing 50% on the actual results above the period rates.
(3) Profit sharing 50% above $16,984/ day based on Baltic Exchange Panamax
TC Average.
(4) Amount represents daily rate of mitigation proceeds following the
default of the original charterer.
(5) In January 2011, Korea Line Corporation ("KLC") filed for receivership.
The charter was affirmed and will be performed by KLC on its original
terms, provided that during an interim suspension period the sub-
charterer pays Navios Partners directly.
(6) Profit sharing 50% above $37,500/ day based on Baltic Exchange Capesize
TC Average.
(7) Profit sharing 50% above $38,500/ day based on Baltic Exchange Capesize
TC Average.
(8) The Navios Prosperity is chartered-in for seven years until June 2014
and we 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 each year by 145 million Yen.
(9) The Navios Aldebaran is chartered-in for seven years until March 2015
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 each year by 150 million Yen.
(10) 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.
EXHIBIT 3
Disclosure of Non-GAAP Financial Measures
1. EBITDA and Adjusted EBITDA
EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes.
Adjusted EBITDA represents EBITDA plus the non-cash charge for the write-off of the intangible asset associated with the Navios Apollon charter-out contract.
EBITDA and Adjusted EBITDA are presented because Navios Partners believes that EBITDA is a basis upon which liquidity can be assessed and present 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 and Adjusted EBITDA are "non-GAAP financial measures" 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 and Adjusted EBITDA are frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA and Adjusted EBITDA used here may not be comparable to that used 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 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 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 Three Month
Period Period
ended ended Year Ended Year Ended
December December December December
31, 2012 31, 2011 31, 2012 31, 2011
($ '000) ($ '000) ($ '000) ($ '000)
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net Cash from Operating
Activities $ 63,624 $ 31,331 $ 179,081 $ 127,464
Net (decrease)/increase
in operating assets (623) (1,005) 1,565 3,430
Net (increase)/decrease
in operating
liabilities (3,849) 5,634 (12,314) 2,982
Net interest cost 2,466 2,764 9,898 8,423
Write-off of intangible
asset -- -- -- (3,979)
Deferred finance charges (367) (136) (787) (530)
----------- ----------- ----------- -----------
EBITDA(1) $ 61,251 $ 38,588 $ 177,443 $ 137,790
Write-off of intangible
asset -- -- -- 3,979
----------- ----------- ----------- -----------
Adjusted EBITDA $ 61,251 $ 38,588 $ 177,443 $ 141,769
Cash interest income 66 107 262 801
Cash interest paid (2,225) (2,535) (9,957) (8,131)
Maintenance and
replacement capital
expenditures (4,942) (4,828) (18,869) (18,569)
----------- ----------- ----------- -----------
Operating Surplus $ 54,150 $ 31,332 $ 148,879 $ 115,870
Cash distribution paid
relating to the first
three quarters of the
year -- -- (82,050) (73,597)
Cash reserves (26,587) (6,503) (39,266) (17,444)
----------- ----------- ----------- -----------
Available cash for
distribution $ 27,563 $ 24,829 $ 27,563 $ 24,829
(1)
Three Month Three Month
Period Period
ended ended Year Ended Year Ended
December December December December
31, 2012 31, 2011 31, 2012 31, 2011
($ '000) ($ '000) ($ '000) ($ '000)
(unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Net cash provided by
operating activities $ 63,624 $ 31,331 $ 179,081 $ 127,464
Net cash used in
investing activities $ -- $ -- (109,698) $ (120,000)
Net cash used in
financing activities $ (55,157) $ (32,754) (85,329) $ (10,664)
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