Third Quarter 2012 Earnings Presentation October 23, 2012

Transcription

1 Third Quarter 2012 Earnings Presentation October 23, 2012 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 nine month periods ended September 30, and September 30, 2011.

2 Navios Partners Ownership Structure 100% Membership Interest Navios Maritime Holdings Inc. NYSE: NM Common Unitholders Navios GP L.L.C. (General Partner) 23.2% Limited Partner Interest 74.8% Limited Partner Interest 2.0% General Partner Interest Incentive Distribution Rights Navios Maritime Partners L.P. NYSE: NMM 100% Membership Interest 21 Dry Bulk Vessels 7 Capesize, 12 Panamax and 2 Ultra Handymax Dry Bulk Carriers 2

3 Multiple Avenues of Distribution Growth Since IPO: 26.4% Distribution increase 261% Operational fleet capacity increase Through Navios Group Vessels Right to purchase Capesize and Panamax vessels on 3+ year charters Dropdown candidates are known vessels and charterers along with credit risk insurance Navios Group has grown to a controlled fleet of 72 dry bulk and 29 tanker vessels Exercising Purchase Options Exercised purchase option for Navios Fantastiks in Q and Navios Sagittarius in Q Purchase options on Navios Prosperity (2012) and Navios Aldebaran (2013) Opportunities in the Dry Bulk S&P Market Vessel values have fallen significantly from 2008 highs Sale and purchases of dry bulk vessels Highly fragmented industry Distressed opportunities expected to arise November 2007 IPO 626,100 DWT +261% (1) October ,259,103 DWT (1) Includes owned and chartered-in tonnage 3

4 Q3 & Nine Mos Ended Sept 30, 2012 Earnings Highlights (in $ million) Except active vessels and available days Q Q Earnings Highlights Y-O-Y Variance Nine Months Ended Sept 30, 2012 Nine Months Ended Sept 30, 2011 Y-O-Y Variance Time charter revenue % % EBITDA % % Net Income % % EPU % (3.1%) Operating Surplus % % Replacement Capex Reserve % % Active Vessels % % Available Days 1,882 1, % 5,088 4, % 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. 4

5 Balance Sheet Selected Balance Sheet Data (in $ million) September 30, 2012 December 31, 2011 Cash & cash equivalents (1) Other current assets Vessels, net Total Assets Deferred revenue, current Other current liabilities Long term debt, current portion Long term debt Total partners capital Total liabilities & partners capital Net Debt / Asset Value (charter attached) (2) 35.1% 35.1% Accumulated Replacement Capex Reserve (1) Includes restricted cash (2) Considers Clarksons charter attached values of owned vessels and chartered-in vessels (less the exercise values) as of September

6 Q Cash Distribution Cash Distribution of $ per unit for Q ($1.77 annualized) Record Date: November 8, 2012 Payment Date: November 13, 2012 Operating Surplus: Total Unit Coverage: 1.29x $35.6 million Distribution: $26.6 million to Common Units $1.0 million to GP Units $27.6 million Tax Efficient Status Distributions reported on Form

7 Significant Growth: Distribution & Operating Metrics Dividend Distribution Trend Q $ Q $ Q $0.44 Q $0.44 Q $0.44 Q $0.44 Q $0.43 Q $0.43 Q $0.42 Q $0.42 Q $0.415 Q $0.41 Q $0.405 Q $0.40 Q $0.40 Q $0.40 Q $0.385 Q $0.35 Q $0.35 Current Annualized Yield: 11.6% Current Annual Distribution Run Rate = $1.77 (As of October 22, 2012) Significant Growth in Key Operating Metrics EBITDA Operating Surplus Net Income 7

8 Portfolio of Industry Leading Charterers Remaining Charter Duration Average Charter Duration: approx. 3.3 years Revenues by Charterer 1-3 years 3-6 years 6-10 years 30% 70% (1) 70% of contracted revenue secured by charters running longer than 3 years Diversified customer base with strong creditworthy counterparties (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, provided that during an interim suspension period the sub-charterer of Navios Melodia pays us directly. 8

9 Staggered Charter Expirations (1) Soleil Aldebaran Prosperity Felicity Hope Helios Alegria Gemini S Fantastiks Apollon Orbiter Hyperion Libra II Fulvia Galaxy I Sagittarius Pollux Aurora II Buena Ventura Luz (9) (10) (10) $9,025 Nov 2012 $28,391 Mar 2013 $12,000 June 2013 $26,169 Jun 2013 $17,562 Aug 2013 $9,738 Sept 2013 $16,984 (4) Feb 2014 $24,225 Feb 2014 $34,476 (8) Feb 2014 $12,500 $13,500 Feb 2014 $38,052 Apr 2014 $37,953 Apr 2014 $12,000 Sep 2015 $50,588 Sept 2015 $21,937 Feb 2018 Average Age of Navios Partners Fleet (2) : Average Age of Dry Bulk Industry Fleet (3) : $26,125 Nov 2018 $42,250 Jul 2019 $29,356 (5) Nov years 10.4 years Insured by AA rated Insurance Company in the EU $41,325 Nov 2019 $29,356 (5) Oct 2020 Melodia (6) $29,356 (7) Sep (1) Per day, net of commission (2) Navios Partners fleet age weighted by DWT (3) Source: Drewry Shpping Consultants, October 2012 (4) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Avg (5) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize 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, provided that during an interim suspension period the sub-charterer of Navios Melodia pays us directly (7) Profit sharing 50% above $37,500/day based on Baltic Exchange Capesize TC Average 9 (8) Amount represents daily rate of insurance proceeds following the default of the original charterer. The vessel has been rechartered to third parties. (9) 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. (10) Profit sharing 50% on actual results above the base rates

10 GDP Growth Driven by Emerging Economies (2.0) Source: IMF October 2012 Emerging and developing economies World Advanced Economies IMF Latest Revisions of GDP Growth (%) October 2012 July 2012 World GDP Advanced Economies GDP Emerging markets GDP

11 Trade (Million Tons) Forecast World Dry Bulk Trade Upside: 4,000 3,500 China admitted to the WTO 5.0% India 3,000 Berlin wall falls 2, % 2,000 1, % 1, Source: Drewry Shipping Consultants Ltd. 11

12 The Southern Trade Routes: How China / India Can Keep Growing Without the OECD OECD Trade Expansion Europe Massive expansion in South: South Trade, as expanding economies such as China and India invest overseas to secure raw material supply United States Africa India China Japan South America Southern Silk Route S.E. Asia Australia Source: Galbraiths, Oct 2011 and HSBC Southern Silk Road June 2011 Movements of Oil, Iron Ore, Coal, Grain etc. from emerging nations in return for investment/infrastructure, Oil/Steel products from China and India 12

13 Billions 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. 10 World urbanization will continue to grow: 6.3B urban residents by % % 2 42% 1 0 Urban Rural Growth in incomes and urban populations support increased metal demand which will increase seaborne movements of raw materials. Source: Rio Tinto and UN 13

14 Billions MT/yr Chinese Urbanization & Steel Production China's urbanization will continue to grow 49% 77% Change in Iron Ore Supply change from 2011 levels 2012e 2013f 2014f 2015f 2016f % Australia Brazil China (Domestic supply 62% equiv) Urban Rural Iron Ore Steel Production Million tons Domestic Production Imports YoY% 326 YoY% 421 YoY% % % % % % 500 2% % % % ,065 22% 619-2% % ,315 24% % 683 9% 2012 Sept YTD 960 2% 552 9% 535 1% Sources: UN, World Steel Association, World Bank, National Bureau of Statistics of China/Mysteel, Credit Suisse 14

15 Billions GW-Hrs Indian Urbanization Leads to Increasing Industrial Production Indian Coal Imports CAGR = 25% CAGR = 25% Indian Electricity Generation F 2014F Electricity production - percent coal fired: 68% August Critical Coal Stock Power Plants (9/30/12): 34 out of India's urbanization will continue to grow 51% 30% 25% Sources: Clarksons, Citibank, World Steel Association, McKinsey Global Institute, mjunction, Central Electricity Authority, Office of the Economic Advisor to the Government of India 15 Urban Rural

16 Scrapping Dynamics Aging Fleet + Restricted Credit + High Scrap Price = Accelerated Scrapping (1) 2009 scrapping 2.4% of fleet DWT (10.0 million DWT) 2010 scrapping 1.3% of fleet DWT (5.8 million DWT) 2011 scrapping 4.2% of fleet DWT (22.3 million DWT) 2012 scrapping 4.5% of fleet DWT (27.6 million DWT) through 10/ Projected scrapping 5.6% or 34.5 million DWT 2009 total dry bulk fleet million DWT - Non delivery 40% 2010 total dry bulk fleet million DWT - Non delivery 38% 2011 total dry bulk fleet million DWT - Non delivery 30% 2012 total dry bulk fleet million DWT - Non delivery 28% Net fleet growth for 2009 = 9.8% Net fleet growth for 2010 = 16.5% Net fleet growth for 2011 = 14.4% Net fleet growth 10/1/2012 = 8.9% Dry Bulk Industry Age Profile (2) (% DWT) 20.0% Year Bulk Carrier Demolition (1) Total Demolition (m dwt) Demolition as % of Fleet % % % % % % % % % % % % 20+ Years 25+ Years 10.0% 0.0% 5.5% 7.5% Total Dry Bulk Fleet (1) Source: Clarksons (2) Source: SSY Dry Bulk Forecaster, October % (86.8m dwt) % % Through 10/19/ % 2012 Projected %

17 Million DWT Dry Bulk Orderbook September 2012: million DWT projected; 81.3 million actual DWT delivered (27% non-delivery by DWT-preliminary) 978 actual deliveries, 1,350 newbuilds projected (28% non-delivery by # of vessels -preliminary) million DWT projected; 95.9 million actual DWT delivered (30% non-delivery by DWT) 1,147 actual deliveries, 1,691 newbuilds projected (32% non-delivery by # of vessels) million DWT projected; 77.9 million actual DWT delivered (38% non-delivery by DWT) 957 actual deliveries, 1,528 newbuilds projected (38% non-delivery by # of vessels) 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 Actual nondelivery 28.2 dwt Actual nondelivery 47.7 dwt 77.9 Before non-delivery Actual nondelivery 41.4 dwt As of Jan 1, 2010 As of Jan 1, 2011 As of Jan 1, Before non-delivery 50.5 Source: Clarksons 17

18 Baltic Exchange Dry Index* BDI 2002 to date BDI October 2008 to date * As of 10/22/

19 Company Highlights Long Term Charter Coverage Average charter duration is approx 3.3 years Staggered charter-out expirations minimize charter renewal risk Strong Counterparties Strong creditworthy counterparties including Mitsui, Cosco, Rio Tinto, etc. Insured Revenue Stream Insured by AA rated Insurance Company in the EU Steady Increase in Distribution Per Unit 26.4% increase in distributions since inception Operating Expense Visibility Fixed operating costs until December 2013 Young, Growing Fleet More than tripled fleet capacity since November 2007 IPO Fleet age of 5.9 years (1) vs. industry fleet age of approx years (2) (1) Navios Maritime Partners fleet age weighted by DWT (2) Source: Drewry s as of October

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21 Appendix: Navios Partners Fleet Owned Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Dropdown 02/16/2013 Navios Apollon Ultra-Handymax ,073 12,500 (3) 13,500 (3) 02/16/2014 Navios Soleil Ultra-Handymax ,337 9,025 11/12/2012 Navios Gemini S Panamax ,636 24,225 02/08/2014 Navios Libra II Panamax ,136 12,000 (3) 09/17/2015 Navios Felicity Panamax ,867 26,169 06/09/2013 Navios Galaxy I Panamax ,195 21,937 02/03/2018 Navios Helios Panamax ,075 9,738 09/27/2013 Navios Hyperion Panamax ,707 37,953 04/01/2014 Yes Navios Alegria Panamax ,466 16,984 (4) 02/25/2014 Navios Orbiter Panamax ,602 38,052 04/01/2014 Yes Navios Hope Panamax ,397 17,562 08/16/2013 Yes Navios Sagittarius Panamax ,756 26,125 11/19/2018 Yes Navios Fantastiks Capesize ,265 34,476 (5) 02/26/2014 Navios Aurora II Capesize ,031 41,325 11/24/2019 Yes Navios Pollux Capesize ,727 42,250 07/24/2019 Yes Navios Fulvia Capesize ,263 50,588 09/30/2015 Yes Navios Melodia (6) Capesize ,132 29,356 (7) 09/19/2022 Yes Navios Luz Capesize ,144 29,356 (8) 11/16/2020 Yes Navios Buena Ventura Capesize ,259 29,356 (8) 10/28/2020 Yes Total 19 Vessels 2,100,068 Long-Term Chartered-In Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Purchase Option Dropdown Navios Prosperity Panamax ,535 12,000 (9) 06/01/2013 Yes Navios Aldebaran Panamax ,500 28,391 03/16/2013 Yes Total 2 Vessels 159,035 Total Fleet 21 Vessels 2,259,103 DWT (1) Daily charter-out rate net of commissions (2) Assumed midpoint of redelivery by charterers (3) Profit sharing 50% on actual results above the base rates (4) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Average (5) Amount represents daily rate of insurance proceeds following the default of the original charterer. The vessel has been rechartered to third parties. 21 (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, provided that during an interim suspension period the sub-charterer pays us directly. (7) Profit sharing 50% above $37,500/day based on Baltic Exchange Capesize TC Average (8) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize TC Average (9) 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. Yes

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