Pipeline, MLP and E&P, Services and Utility Conference December 6, 2011

Transcription

1 Pipeline, MLP and E&P, Services and Utility Conference December 6, 2011 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, 2011 and September 30,

2 Seasoned Management Team Angeliki Frangou Chairman & CEO George Achniotis EVP, Business Development Stratos Desypris CFO Fred Gordon SVP, Corporate Affairs Michael McClure EVP, Corporate Affairs 19 years experience in the shipping industry Chairman and CEO of Navios Group Previously founded two private shipping companies Board Member since inception CFO of Navios Maritime Holdings since April 2007 PwC partner in charge of shipping practice in Greece UK Chartered Accountant 19 years experience in the accounting profession Joined Navios in 2006 Chief Financial Controller for Navios Maritime Holdings SVP of Strategic Planning for Navios South American Logistics 9 years experience in the accounting profession Joined Navios in 2006 Over 33 years of experience working for shipping and project development companies in business development, strategic planning, finance, chartering and technical capacities. Worked for drybulk, tanker, gas, container and reefer ship owners and operators Previously CFO since IPO Served as SVP Corporate Affairs since April 2007 and before that CFO from October 2005 to April 2007 of Navios Maritime Holdings Served as Vice President of Navios Research and Risk Management and Manager of Financial Analysis Joined Navios in 1978 Other Key Management & Board Members John Karakadas Director Michael Sarris Director Shunji Sasada Director Serafeim Kriempardis Director Robert Pierot Director Board member since 2007 Chairman and CEO of Singular Logic Deputy CEO of Marfin Investment Group Served on the BoD of IRF and Greek Information Technology Holdings Board member since 2010 Served as Minister of Finance for Cyprus from 2005 to 2008 Prior role at World Bank where responsible for supervision and design of country strategies for areas of Africa, Latin America and East Asia 28 years experience COO Navios Corp 16 years experience with Mitsui O.S.K. Lines Ltd, including 6 years with Trinity Bulk carriers (Norway) and Mitsui O.S.K. Bulk Shipping (London) Joined Navios in 1997 Board member since December 2009 Served as Head of Shipping of Piraeus Bank Served as Head of Shipping of Emporiki Bank Board member since 2007 Director and Principal of Jacq. Pierot Jr. & Sons Inc. 31 years of ship brokering experience 2

3 Company Highlights Long Term Charter Coverage Average charter duration is approx 4.0 years Staggered charter-out expirations minimize charter renewal risk Strong Counterparties Strong creditworthy counterparties (Mitsui, Cosco, Rio Tinto, STX Panocean, etc.) Insured Revenue Stream Charter-out contracts insured by AA rated EU Governmental Agency Steady Increase in Distribution Per Unit 26% increase in distributions in 4.0 years 6.62% average distribution growth Operating Expense Visibility Fixed operating expenses until December 2013 Young, Growing Fleet More than tripled fleet capacity since November 2007 IPO Fleet age of 5.4 years (1) vs. industry fleet age of 12.3 years (2) (1) Navios Maritime Partners fleet age weighted by DWT (2) Source: Drewry s as of end September

4 Navios Partners Ownership Structure 100% Membership Interest Navios Maritime Holdings Inc. NYSE: NM Common Unitholders Navios GP L.L.C. (General Partner) 2.0% General Partner Interest Incentive Distribution Rights 25.1% Limited Partner Interest Navios Maritime Partners L.P. NYSE: NMM 72.9% Limited Partner Interest 100% Membership Interest 18 Dry Bulk Vessels 6 Capesize, 11 Panamax and 1 Ultra Handymax Dry Bulk Carriers Average age of Fleet (1) : 5.4 years Average age of Dry Bulk Industry Fleet (2) : 12.3 years (1) Navios Partners fleet age weighted by DWT (2) Source: Drewry Shpping Consultants, September

5 Ready Access to Capital Markets Navios incorporated as a subsidiary of US Steel Corporation Aug 2005: ISE/Navios merger effective Apr 2008: Dropdown of Navios Hope (Aurora) May 2009: $36.1mm equity offering Sep 2009: $38.6mm equity offering Nov 2009: $59.6mm equity offering Jan 2010: Exercise Purchase Option of Navios Sagittarius; Dropdown of Navios Hyperion May 2010: Dropdown of Navios Pollux Nov 2010: Dropdown of Navios Melodia & Navios Fulvia Apr 2011: $90.5mm equity offering Nov 2007: NYSE Listing Navios Maritime Partners LP (NMM) May 2008: Exercise Purchase Option of Navios Fantastiks Jun 2009: Dropdown of Navios Sagittarius Oct 2009: Dropdown of Navios Apollon Feb 2010: $62.4mm equity offering May 2010: $92.3 mm equity offering Mar 2010: Dropdown of Navios Aurora II Oct 2010: $111.6 mm equity offering May 2011: Dropdown of Navios Orbiter & Navios Luz Benefits from our operating history $500 million (approx) raised in equity offerings Multiple avenues of growth Significant distribution growth since IPO 26.0% increase Benefitting from Strong Sponsor (dropdown of vessels, controlled operational costs) 5

6 Multiple Avenues of Distribution Growth Since IPO: 26% Distribution Increase 211% Operational Fleet Capacity increase Growth Through Navios Holdings Controlled 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 26 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 Sale and purchases of dry bulk vessels Highly fragmented industry November 2007 IPO 626,100 DWT +211% (1) December ,945,432 DWT (1) Includes owned and chartered-in tonnage 6

7 Benefits from a Strong Sponsor Large Diversified Young Fleet 56 vessels, 43 in operation Healthy newbuilding program of fully funded owned-vessel plus chartered-in fleet with purchase options Average age: 5.0 years Navios Group controls 100 vessels (1) AA+ credit default insurance on all vessels acquired from Sponsor Benefit from Seasoned Technical and Commercial Management Team Technical and Commercial operating agreement provides OPEX of approximately 30% less than industry average (2) due to economies of scale Strong Long-Term customer relationships Leverage brand name with industry players, shipyards and banks Omnibus Agreement NMM Option on acquisition of owned Panamax and Capesize vessels chartered out for 3+ years Management & Administrative Services Agreements with Navios Holdings fixes operating expenses Management and Administrative Services Agreements extended for additional 5 years until December 2017 Management Agreement fixes fees for additional two years through December % increase for a 2-year period ending December 2013 at: $4,650 per Ultra-Handymax vessel per day $4,550 per Panamax vessel per day $5,650 per Capesize vessel per day This agreement enhances the visibility of our cost base (1) Navios Group is composed of Navios Holdings (NM), Navios Partners (NMM) and Navios Acquisition (NNA). Excludes Navios Logistics fleet (2) Source: Drewry Shipping Consultants July

8 Successful Dropdown History Since Inception, Sponsor has dropped down 10 vessels generating aggregate annual EBITDA of approximately $107.0 million (1) Vessels Type Built DWT Navios Apollon Ultra-Handymax ,073 Navios Hyperion Panamax ,707 Navios Orbiter Panamax ,602 Navios Hope Panamax ,397 Navios Sagittarius Panamax ,756 Navios Aurora II Capesize ,031 Navios Pollux Capesize ,727 Navios Fulvia Capesize ,263 Navios Melodia Capesize ,132 Navios Luz Capesize ,144 (1) Assumes 360 revenue days, 365 opex days and $0.2 million of general and administrative expenses per vessel 8

9 Financial Highlights 9

10 Q3 & Nine Months Ended September 30, 2011 Earnings Highlights (in $ million) except active vessels and available days Three months ended September 30, 2011 Earnings Highlights Three months ended September 30, 2010 Y-O-Y Variance Nine months ended September 30, 2011 Nine months ended September 30, 2010 Y-O-Y Variance Time charter and voyage revenue % % Net Income % % Adjusted Net Income (1) % % EBITDA (2) % % Adjusted EBITDA (1) % % Operating Surplus % % Replacement Capex Reserve % % Active Vessels % % Available Days 1,656 1, % 4,604 3, % (1) Adjusted Net Income and Adjusted EBITDA for the nine month period ended September 30, 2011, exclude the $4.0 million non-cash charge for writing-off the intangible asset associated with the Navios Apollon charter out contract. (2) EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes, if any, unless otherwise stated. EBITDA is included because it is used by certain investors to measure a company's financial performance. 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. EBITDA is presented to provide additional information with respect to the Company's ability to satisfy its obligations including debt service, capital expenditures, working capital requirements and determination of dividends. 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. 10

11 Balance Sheet Selected Balance Sheet Data (in $ million) September 30, 2011 December 31, 2010 Cash & cash equivalents (1) $58.0 $52.1 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% 32.3% 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 30,

12 Q Cash Distribution Cash Distribution of $0.44 per unit for Q ($1.76 annualized) Record Date: November 8, 2011 Payment Date: November 11, 2011 Operating Surplus: $29.4 million Total Unit Coverage: 1.18x Common Unit Coverage: 1.43x Distribution: $24.8 million $20.6 million to Common Units $4.2 million to GP & Subordinated Units Tax Efficient Status Distributions reported on Form

13 Significant Growth: Distribution & Operating Metrics Dividend Distribution Trend 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*: 11.4% Current Annual Distribution Run Rate* = $1.76 *As of December 2, Significant Growth in Key Operating Metrics EBITDA Operating Surplus Net Income 13

14 Fleet Profile 14

15 Portfolio of Industry Leading Charterers AA Rated EU Governmental Agency insurance on charters-out Remaining Charter Duration Average Charter Duration: 4.0 years Revenues by Charterer 1-3 years 3-6 years 6-10 years Norden 0,.2% Vitol Group, 1.3% Hanjin, 10.2% * MOSK, 8.4% Constellation Energy Group, 7.5% 29% Korea Line, 12.6% Rio Tinto, 5.7% 62% 9% Arcelor Mittal, 1.9% STX Pan Ocean, 13.2% Sanko, 4.2% Augustea, 2.7% Daiichi, 1.3% Cosco, 17.3% Samsun Logix, 13.4% 71% of contracted revenue secured by charters running longer than 3 years Diversified customer base with strong creditworthy counterparties * 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 will pay us directly 15

16 Staggered Charter Expirations (1) Apollon Prosperity Libra II Aldebaran Felicity Hope Alegria Gemini S Fantastiks Orbiter Hyperion Fulvia Galaxy I Sagittarius Pollux Aurora II Luz Melodia (7) (5) $13,775 Mar 2012 $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 $38,052 Apr 2014 $37,953 Apr 2014 Average Age of Navios Partners Fleet (2) : Average Age of Dry Bulk Industry Fleet (3) : $50,588 Sept 2015 $21,937 Feb 2018 $26,125 Nov 2018 $42,250 Jul 2019 $41,325 Nov 2019 $29,356 Nov 2020 $29,356 (6) Sep (1) Per day, net of commission (2) Navios Partners fleet age weighted by DWT (3) Source: Drewry Shpping Consultants, September 2011 (4) 50/50 profit sharing above $16,984 per day based on Panamax TC Avg (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 will pay us directly (6) 50/50 profit sharing above $37,500 per day based on BCI TC Avg (7) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize TC Average years 12.3 years

17 Industry 17

18 GDP Growth Driven by Emerging Economies Emerging and developing economies World Advanced Economies Changing world economic growth expectations: Emerging economies growing at 6.4%, 4 times greater than the Advanced Economies and will lead world growth going forward Source: IMF 18

19 The Southern Trade Routes: How China / India Can Keep Growing Without the OECD OECD Trade Expansion United States Europe Africa India Massive expansion in South: South Trade, as expanding economies such as China and India invest overseas to secure raw material supply China Japan South America Southern Silk Route S.E. Asia Australia Movements of Oil, Iron Ore, Coal, Grain etc. from emerging nations in return for investment/infrastructure, Oil/Steel products from China and India Source: Galbraiths, Oct 2011 and HSBC Southern Silk Road By Stephen King 19

20 Chinese Urbanization & Steel Production 100% 90% 80% 71% 70% 60% 50% 40% 30% 17% 20% 10% 18.2% 25% Urban Population % 82% 46% 29.7% Projections 73% 54.2% 0% China Urban % India Urban % US Urban % 90% Cumulative MTPA Iron Ore Projected Additional Production (Cumulative MTPA) 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% % Oct 2011 YTD 1,069 23% % % Sources: UN FAO Aquastat, UN Dept of Economic & Social Affairs, National Bureau of Statistics of China/Mysteel, UNCTAD 20

21 Indian Urbanization Leads to Increasing Industrial Production 250 Indian Coal Imports Monthly Steel Production (Indexed Jan 2004 = 100) CAGR = = 25% Index /04 06/04 10/04 02/05 06/05 10/05 02/06 06/06 10/06 02/07 06/07 10/07 02/08 06/08 10/08 02/09 06/09 10/09 02/10 06/10 10/10 02/11 06/11 China India Japan South Korea Urban Population 1991 to 2030 and Percent Urban (increase of about 11.5 million people/year) E 2012F 2014F Population (millions) % 28% 30% 40% Sources: Clarksons, Credit Suisse, World Steel Association, McKinsey Global Institute

22 Scrapping Dynamics Aging Fleet + Restricted Credit + High Scrap Price = Accelerated Scrapping (1) 2011 scrapping 3.94% of fleet DWT (21.1 million DWT) through 12/2 - Projected 4.28% of fleet for 2011 (22.9 million DWT) 2010 scrapping 1.3% of fleet DWT (5.8 million DWT) 2009 scrapping 2.4% of fleet DWT (10.0 million DWT) Average scrapping from % of fleet DWT/ year 2009 total dry bulk fleet million DWT - Non delivery 40% 2010 total dry bulk fleet million DWT - Non delivery 38% Non deliveries 31% October 2011 preliminary Net fleet growth from end 2008 end 2009 = 9.8% Net fleet growth from end 2009 end 2010 = 16.5% 20+ Years 25+ Years Dry Bulk Industry Age Profile (2) 30.0% 20.0% 10.0% 0.0% (% DWT) 6.3% 11.1% Total Dry Bulk Fleet (1) Source: Clarksons (2) Source: SSY Dry Bulk Forecaster, November % (104m dwt) Year Bulk Carrier Demolition (1) Total Demolition (m dwt) Demolition as % of Fleet % % % % % % % % % % % % % Through 12/2/ % 22

23 Dry Bulk Orderbook Actual & Non-Deliveries 2011 October 2011: 102.5M DWT projected; 71.2M actual DWT delivered (31% non-delivery by DWT-preliminary) 845 actual deliveries, 1,264 newbuilds projected (33% non-delivery by # of vessels) M 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 Before non-delivery Before non-delivery Source: Clarksons As of January 2010 As of Dec 31, 2010 As of Dec 31,

24 Baltic Exchange Dry Index* BDI 2002 to date BDI October 2008 to date * As of 12/2/

25 Conservative Business Posture Long Term Charter Coverage Average charter duration is approx 4.0 years Staggered charter-out expirations minimize charter renewal risk Strong Counterparties Strong creditworthy counterparties (Mitsui, Cosco, Rio Tinto, STX Panocean, etc.) Insured Revenue Stream Charter-out contracts insured by AA rated EU Governmental Agency Steady Increase in Distribution Per Unit 26% increase in distributions in 4.0 years 6.62% average distribution growth Operating Expense Visibility Fixed operating expenses until December 2013 Young, Growing Fleet More than tripled fleet capacity since November 2007 IPO Fleet age of 5.4 years (1) vs. industry fleet age of 12.3 years (2) (1) Navios Maritime Partners fleet age weighted by DWT (2) Source: Drewry s as of end September

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27 Appendix: Navios Partners Fleet Owned Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Dropdown Navios Apollon (3) Ultra-Handymax ,073 13,775 03/07/2012 Yes Navios Gemini S Panamax ,636 24,225 02/08/2014 Navios Libra II Panamax ,136 18,525 11/15/2012 Navios Felicity Panamax ,867 26,169 06/09/2013 Navios Galaxy I Panamax ,195 21,937 02/03/2018 Navios Hyperion Panamax ,707 37,953 04/01/2014 Yes Navios Alegria Panamax ,466 16,984 (4) 02/25/2014 Navios Orbiter Panamax ,602 38,052 04/01/2014 Yes Navios Hope Panamax ,397 17,562 08/16/2013 Yes Navios Sagittarius Panamax ,756 26,125 11/19/2018 Yes Navios Fantastiks Capesize ,265 36,290 02/26/2014 Navios Aurora II Capesize ,031 41,325 11/24/2019 Yes Navios Pollux Capesize ,727 42,250 07/24/2019 Yes Navios Fulvia Capesize ,263 50,588 09/30/2015 Yes Navios Melodia (6) Capesize ,132 29,356 (5) 09/19/2022 Yes Navios Luz Capesize ,144 29,356 (7) 11/16/2020 Yes Total 16 Vessels 1,786,397 Long-Term Chartered-In Vessels Vessels Type Built DWT Charter Rate ($) (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 1,945,432 DWT (1) Daily charter-out rate net of commissions (2) Assumed midpoint of redelivery by charterers (3) The vessel completed repairs and was delivered to charterers in September 2011 (4) Profit sharing 50% above $16,984/day based on Baltic Panamax TC Avg (5) Profit sharing 50% above $37,500/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 will pay us directly. (7) Profit sharing 50% above $38,500/day based on Baltic Exchange Capesize TC Average 27