First Quarter 2012 Earnings Presentation April 26, 2012

Transcription

1 First Quarter 2012 Earnings Presentation April 26, 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 month periods ended March 31, 2012 and March 31,

2 Navios Partners Ownership Structure 100% Membership Interest Navios Maritime Holdings Inc. NYSE: NM Common Unitholders Navios GP L.L.C. (General Partner) 25.1% Limited Partner Interest 72.9% Limited Partner Interest 2.0% General Partner Interest Incentive Distribution Rights Navios Maritime Partners L.P. NYSE: NMM 100% Membership Interest 18 Dry Bulk Vessels 6 Capesize, 11 Panamax and 1 Ultra Handymax Dry Bulk Carriers 2

3 Multiple Avenues of Distribution Growth Since IPO: 26% Distribution increase 211% Operational fleet capacity increase Through Navios Group Vessels Right to purchase Capesize and Panamax vessels on 3+ year charters Dropdown candidates feature known vessels and charterers along with credit risk insurance Navios Group has grown to a controlled fleet of 74 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 +211% (1) March ,945,432 DWT (1) Includes owned and chartered-in tonnage 3

4 First Quarter March 31, 2012 Earnings Highlights (in $ million) except active vessels and available days Earnings Highlights Three months ended March 31, 2012 Three months ended March 31, 2011 Y-O-Y Variance Time charter revenue % EBITDA (2) % Net Income % EPU (1) (9.1%) Operating Surplus (3) % Replacement Capex Reserve % Active Vessels % Available Days 1,576 1, % (1) EPU for the three month period ended March 31, 2011 assumes conversion of subordinated units as of January 1, (2) 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. (3) 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 as an alternative to net income or any other indicator of Navios Partners performance required by accounting principles generally accepted in the United States. 4

5 Balance Sheet Selected Balance Sheet Data (in $ million) March 31, 2012 December 31, 2011 Cash & cash equivalents (1) Other current assets 4 7 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) 35.5% 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 March

6 Q Cash Distribution Cash Distribution of $0.44 per unit for Q ($1.76 annualized) Record Date: May 10, 2012 Payment Date: May 14, 2012 Operating Surplus: Total Unit Coverage: 1.19x $29.6 million Distribution: $24.0 million to Common Units $0.8 million to GP Units $24.8 million Tax Efficient Status Distributions reported on Form

7 Significant Distribution Growth Dividend Distribution Trend 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: 11.2% Current Annual Distribution Run Rate = $1.76 (As of April 25, 2012) 7

8 Portfolio of Industry Leading Charterers Remaining Charter Duration Average Charter Duration: approx. 3.6 years Revenues by Charterer 23% 1-3 years 3-6 years 6-10 years 69% 8% (1) 77% 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) Prosperity Libra II Aldebaran Felicity Hope Alegria Gemini S Fantastiks Apollon Orbiter Hyperion Fulvia Galaxy I Sagittarius Pollux Aurora II Luz Melodia (6) $24,000 Jul 2012 $18,525 Nov 2012 $28,391 Mar 2013 $26,169 Jun 2013 $17,562 Aug 2013 $16,984 (4) Feb 2014 $24,225 Feb 2014 $32,279 $36,290 Feb 2014 $13,775 $12,500 $13,500 Feb 2014 $38,052 Apr 2014 $37,953 Apr 2014 $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 $41,325 Nov 2019 (5) $29,356 Nov 2020 $29,356 (7) Sep (1) Per day, net of commission (2) Navios Partners fleet age weighted by DWT (3) Source: Drewry Shpping Consultants, March 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 years 11.3 years Insured by AA rated Insurance Company in the EU

10 GDP Growth Driven by Emerging Economies (2.0) Emerging and developing economies World Advanced Economies Rising world economic growth expectations: In its April quarterly review, IMF raised the forecasts for 2012 emerging market growth by 0.2% to 5.7%. World growth forecast increased by 0.2% to 3.5%. Advanced economies growth forecast also increased by 0.2% to 1.4%. Emerging economies growth increases to 6.0% in World growth for 2013 will rise to 4.1%. Advanced economies growth is forecasted to increase to 2.0% in Source: IMF April

11 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 Movements of Oil, Iron Ore, Coal, Grain etc. from emerging nations in return for investment/infrastructure, Oil/Steel products from China and India

12 Emerging Global Middle Class Global Middle Class* (GMC) has increased by 700 million people from 1980 to The GMC is expected to increase by over 3 billion in the next 20 years (2010 to 2030). Asia Pacific will lead the GMC over the next twenty years, accounting for 85% of the growth, while more advanced economies will remain roughly constant. Global Middle Class Shifts Eastward Global Middle Class Demographic millions % millions % millions % North America % % 322 7% Europe % % % Central and South America % 251 8% 313 6% Asia Pacific % 1,740 54% 3,228 66% Sub-Saharan Africa 32 2% 57 2% 107 2% Middle East and North Africa 105 6% 165 5% 234 5% World 1, % 3, % 4, % Growth in the Emerging Middle Class should support world trade and increase seaborne movements of raw materials and finished goods. *Daily per capita spending $10 to $100 in ppp terms Source: Teck Resources and OECD 12

13 Chinese Urbanization & Steel Production 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 71% 17% 18% Urban Population % 25% 82% 51% 30% 0% China Urban % India Urban % US Urban % 90% 73% 54% Cumulative MTPA Iron Ore Projected Additional Production (Cumulative MTPA) 2011P Certain/probable iron ore projects Million tons Domestic Production Iron Ore Imports Steel Production YoY% 326 YoY% 421 YoY% % % % % % 500 2% % % % ,065 22% 619-2% % ,315 24% % 683 9% 2012 Mar YTD 256 7% 187 6% % Sources: UN FAO Aquastat, National Bureau of Statistics of China/Mysteel, UNCTAD, CIA Factbook, Financial Times, SSY 13

14 Indian Urbanization Leads to Increasing Industrial Production Indian Electricity Generation Indian Coal Imports CAGR = 24% CAGR = 25% GW-Hrs Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr F 2014F 700 Urban Population 1991 to 2030 and Percent Urban (increase of about 11.5 million people/year) Coal Imports MT YoY% Electricity Production GWhrs YoY% % 795 5% % 865 9% 2012 Mar YTD 28 P -6% 222 4% Electricity production - percent coal fired: 77% Feb Critical Coal Stock Power Plants (3/20/12): 37 out of 95 Population (millions) % 28% 30% 40% Sources: Clarksons, Credit Suisse, World Steel Association, McKinsey Global Institute, mjunction, Central Electricity Authority, Office of the Economic Advisor to the Government of India

15 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 4.1% of fleet DWT (22.3 million DWT) 2012 scrapping 1.7% of fleet DWT (10.2 million DWT) through 4/ Projected scrapping 5.5% or 33.7 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% Net fleet growth for 2009 = 9.8% Net fleet growth for 2010 = 16.5% Net fleet growth for 2011 = 14.4% 20+ Years 25+ Years Dry Bulk Industry Age Profile (2) (% DWT) 30.0% 20.0% 10.0% 0.0% 6.5% 10.0% Total Dry Bulk Fleet (1) Source: Clarksons (2) Source: SSY Dry Bulk Forecaster, April % (104m dwt) 15 Bulk Carrier Demolition (1) Year Total Demolition (m dwt) Demolition as % of Fleet % % % % % % % % % % % % % % Through 4/20/ % 2012 Projected %

16 Dry Bulk Orderbook Actual & Non-Deliveries March 2012: 51.9 M DWT projected; 26.1 M actual DWT delivered (50% non-delivery by DWT-preliminary) 306 actual deliveries, 627 newbuilds projected (51% non-delivery by # of vessels -preliminary) December 2011: M DWT projected; 95.9M actual DWT delivered (30% non-delivery by DWT-preliminary) 1,147 actual deliveries, 1,691 newbuilds projected (32% non-delivery by # of vessels) 125.6M 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) M 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) Million DWT 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 16

17 Baltic Exchange Dry Index* BDI 2002 to date BDI October 2008 to date * As of 4/25/

18 Conservative Business Posture Long Term Charter Coverage Average charter duration is approx 3.6 years Staggered charter-out expirations minimize charter renewal risk Strong Counterparties Strong creditworthy counterparties (Mitsui, Cosco, Rio Tinto, STX Panocean, etc.) Insured Revenue Insured by AA rated Insurance Company in the EU Steady Increase in Distribution Per Unit 26% increase in distributions since inception 5.9% average distribution growth 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 March

19

20 Appendix: Navios Partners Fleet Owned Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Dropdown Navios Apollon Ultra-Handymax ,073 12,500 13,500 02/16/ /16/2014 Navios Gemini S Panamax ,636 24,225 02/08/2014 Navios Libra II Panamax ,136 18,525 11/15/2012 Navios Felicity Panamax ,867 26,169 06/09/2013 Navios Galaxy I Panamax ,195 21,937 02/03/2018 Navios Hyperion Panamax ,707 37,953 04/01/2014 Yes Navios Alegria Panamax ,466 16,984 (3) 02/25/2014 Navios Orbiter Panamax ,602 38,052 04/01/2014 Yes Navios Hope Panamax ,397 17,562 08/16/2013 Yes Navios Sagittarius Panamax ,756 26,125 11/19/2018 Yes Navios Fantastiks Capesize ,265 36,290 02/26/2014 Navios Aurora II Capesize ,031 41,325 11/24/2019 Yes Navios Pollux Capesize ,727 42,250 07/24/2019 Yes Navios Fulvia Capesize ,263 50,588 09/30/2015 Yes Navios Melodia (5) Capesize ,132 29,356 (4) 09/19/2022 Yes Navios Luz Capesize ,144 29,356 (6) 11/16/2020 Yes Total 16 Vessels 1,786,397 Yes Long-Term Chartered-In Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Purchase Option Dropdown Navios Prosperity Panamax ,535 24,000 07/4/2012 Yes Navios Aldebaran Panamax ,500 28,391 03/16/2013 Yes Total 2 Vessels 159,035 Total Fleet 18 Vessels (1) Daily charter-out rate net of commissions (2) Assumed midpoint of redelivery by charterers (3) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Avg (4) Profit sharing 50% above $37,500/day based on Baltic Exchange Capesize TC Average 20 1,945,432 DWT (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 of Navios Melodia pays directly. (6) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize TC Average