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,. 2012 and September 30, 2011.
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
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 Q2 2008 and Navios Sagittarius in Q1 2010 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 2012 2,259,103 DWT (1) Includes owned and chartered-in tonnage 3
Q3 & Nine Mos Ended Sept 30, 2012 Earnings Highlights (in $ million) Except active vessels and available days Q3 2012 Q3 2011 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 55.5 48.0 15.6% 152.6 136.5 11.8% EBITDA 43.0 36.0 19.4% 116.2 99.2 17.1% Net Income 22.1 16.6 33.1% 55.8 46.7 19.5% EPU 0.36 0.35 2.9% 0.95 0.98 (3.1%) Operating Surplus 35.6 29.3 21.5% 94.7 84.5 12.1% Replacement Capex Reserve 4.9 4.8 2.1% 13.9 13.7 1.5% Active Vessels 21 18 16.7% 21 18 16.7% Available Days 1,882 1,656 13.7% 5,088 4,604 10.5% 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
Balance Sheet Selected Balance Sheet Data (in $ million) September 30, 2012 December 31, 2011 Cash & cash equivalents (1) 51.7 56.5 Other current assets 9.0 7 Vessels, net 730.4 667.2 Total Assets 964.7 909.9 Deferred revenue, current 8.5 10.9 Other current liabilities 24.2 9.1 Long term debt, current portion 27.4 36.7 Long term debt 298.4 289.4 Total partners capital 606.1 559.6 Total liabilities & partners capital 964.7 909.9 Net Debt / Asset Value (charter attached) (2) 35.1% 35.1% Accumulated Replacement Capex Reserve 66.1 52.1 (1) Includes restricted cash (2) Considers Clarksons charter attached values of owned vessels and chartered-in vessels (less the exercise values) as of September 2012 5
Q3 2012 Cash Distribution Cash Distribution of $0.4425 per unit for Q3 2012 ($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-1099 6
Significant Growth: Distribution & Operating Metrics Dividend Distribution Trend Q3 2012 $0.4425 Q2 2012 $0.4425 Q1 2012 $0.44 Q4 2011 $0.44 Q3 2011 $0.44 Q2 2011 $0.44 Q1 2011 $0.43 Q4 2010 $0.43 Q3 2010 $0.42 Q2 2010 $0.42 Q1 2010 $0.415 Q4 2009 $0.41 Q3 2009 $0.405 Q2 2009 $0.40 Q1 2009 $0.40 Q4 2008 $0.40 Q3 2008 $0.385 Q2 2008 $0.35 Q1 2008 $0.35 Current Annualized Yield: 11.6% Current Annual Distribution Run Rate = $1.77 (As of October 22, 2012) 50 45 40 35 30 25 20 15 10 5 0 Significant Growth in Key Operating Metrics EBITDA Operating Surplus Net Income 7
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
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 2020 5.9 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 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (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
GDP Growth Driven by Emerging Economies 12.0 10.0 8.0 6.0 4.0 2.0 - (2.0) 5.3 5.6 3.3 3.6 1.3 1.5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: IMF October 2012 Emerging and developing economies World Advanced Economies IMF Latest Revisions of GDP Growth (%) October 2012 July 2012 World GDP 2012 3.3 3.5 2013 3.6 3.9 Advanced Economies GDP 2012 1.3 1.4 2013 1.5 1.9 Emerging markets GDP 2012 5.3 5.6 2013 5.6 5.9 10
Trade (Million Tons) Forecast World Dry Bulk Trade 1980-2012 Upside: 4,000 3,500 China admitted to the WTO 5.0% India 3,000 Berlin wall falls 2,500 2.8% 2,000 1,500 1.1% 1,000 500 0 1980 1985 1990 1995 2000 2005 2010 Source: Drewry Shipping Consultants Ltd. 11
The Southern Trade Routes: How China / India Can Keep Growing Without the OECD OECD Trade Expansion 1950+ 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
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 2050 9 8 7 6 5 67% 4 3 51% 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
Billions MT/yr Chinese Urbanization & Steel Production 1.6 1.4 1.2 1 0.8 0.6 0.4 China's urbanization will continue to grow 49% 77% 400 300 200 100 0-100 Change in Iron Ore Supply change from 2011 levels 2012e 2013f 2014f 2015f 2016f 0.2 0 26% -200-300 Australia Brazil China (Domestic supply 62% equiv) Urban Rural Iron Ore Steel Production Million tons 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 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
Billions GW-Hrs Indian Urbanization Leads to Increasing Industrial Production 300 250 Indian Coal Imports 2006 2011 CAGR = 25% 2006-2011 CAGR = 25% 90 80 70 60 Indian Electricity Generation 200 50 40 150 100 50 0 2006 2008 2010 2012F 2014F Electricity production - percent coal fired: 68% August Critical Coal Stock Power Plants (9/30/12): 34 out of 89 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 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
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 10/19 2012 Projected scrapping 5.6% or 34.5 million DWT 2009 total dry bulk fleet 458.3 million DWT - Non delivery 40% 2010 total dry bulk fleet 536.2 million DWT - Non delivery 38% 2011 total dry bulk fleet 615.5 million DWT - Non delivery 30% 2012 total dry bulk fleet 670.3 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 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% 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 2012 13.0% (86.8m dwt) 16 2010 5.8 1.26% 2011 22.3 4.17% Through 10/19/2012 27.6 4.48% 2012 Projected 34.5 5.60%
Million DWT Dry Bulk Orderbook 2012 2011 2010 September 2012: 111.4 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) 137.3 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) 125.6 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) 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) 140 120 100 80 60 40 20 0 Orderbook by year of delivery Actual nondelivery 28.2 dwt 43.1 125.6 Actual nondelivery 47.7 dwt 77.9 Before non-delivery 137.3 138.9 2009 2010 2010 2011 2012 2011 2012 2013 101.1 Actual nondelivery 41.4 dwt As of Jan 1, 2010 As of Jan 1, 2011 As of Jan 1, 2012 95.9 Before non-delivery 50.5 Source: Clarksons 17
Baltic Exchange Dry Index* 2002 2012 BDI 2002 to date BDI October 2008 to date * As of 10/22/2012 18
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. 10.4 years (2) (1) Navios Maritime Partners fleet age weighted by DWT (2) Source: Drewry s as of October 2012 19
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Appendix: Navios Partners Fleet Owned Vessels Vessels Type Built DWT Charter Rate ($) (1) Expiration Date (2) Dropdown 02/16/2013 Navios Apollon Ultra-Handymax 2000 52,073 12,500 (3) 13,500 (3) 02/16/2014 Navios Soleil Ultra-Handymax 2009 57,337 9,025 11/12/2012 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 26,169 06/09/2013 Navios Galaxy I Panamax 2001 74,195 21,937 02/03/2018 Navios Helios Panamax 2005 77,075 9,738 09/27/2013 Navios Hyperion Panamax 2004 75,707 37,953 04/01/2014 Yes Navios Alegria Panamax 2004 76,466 16,984 (4) 02/25/2014 Navios Orbiter Panamax 2004 76,602 38,052 04/01/2014 Yes Navios Hope Panamax 2005 75,397 17,562 08/16/2013 Yes Navios Sagittarius Panamax 2006 75,756 26,125 11/19/2018 Yes Navios Fantastiks Capesize 2005 180,265 34,476 (5) 02/26/2014 Navios Aurora II Capesize 2009 169,031 41,325 11/24/2019 Yes Navios Pollux Capesize 2009 180,727 42,250 07/24/2019 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 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 2007 82,535 12,000 (9) 06/01/2013 Yes Navios Aldebaran Panamax 2008 76,500 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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