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Executives

Nicolas Bornozis – IR, Capital Link Inc.

Angeliki Frangou – Chairman and CEO

Efstratios Desypris – CFO

George Achniotis – EVP, Business Development

Analysts

John Chappell – JP Morgan

Natasha Boyden – Cantor Fitzgerald

Michael Webber – Wells Fargo

Urs Dür – Lazard Capital

Seth Glickenhaus – Glickenhaus & Company

Navios Maritime Holdings, Inc. (NM) Q3 2010 Earnings Call Transcript October 27, 2010 8:30 AM ET

Operator

Thank you for standing by, ladies and gentlemen. And welcome to Navios Maritime Partners conference call on their third quarter and nine months 2010 financial results. We have with us Ms. Angeliki Frangou, Chairman and CEO; Mr. Efstratios Desypris, Chief Financial Officer; and, Mr. George Achniotis, Executive Vice President for Business Development of the company.

At this time, all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today on Wednesday, October the 27th for year 2010. We now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Advisor to Navios Maritime Partners. Please go ahead, sir.

Nicolas Bornozis

Thank you, and good morning to all of our participants. This is Nicolas Bornozis of Capital Link, Investor Relations Advisor to Navios Maritime Partners LP.

The company released financial results for the third quarter and nine-month period ended September 30, 2010. The press release has been distributed publicly and is also available on the company's Web site under the Investor Relations section at www.navios-mlp.com. On the Web site, in the same section and also under Events, you can access and download the slides used in today's conference call and webcast, and you can also access the webcast itself. You're also welcome to call us at 212-661-7566 or email us at naviospartners@capitallink.com and we will send you the press release and the slides.

Today, in addition to the conference call, there is also a live audio and slides webcast, which can be accessed, as I mentioned, through the company's Web site at www.navios-mlp.com. The webcast will also be available as an archive after the conference call. Please note that the slides are user-controlled. So by clicking on the proper button, you can move to the next or to the previous slide on your own.

Before we proceed with the presentation, I have to take you through the forward-looking statement disclaimer as displayed on slide number two of the presentation. Please note that statements in this presentation and webcast, which are not statements of historical fact, are forward-looking statements. These forward-looking statements are based on information available to and the expectations and assumptions being reasonable to the company at the time this presentation was made. Although the company believes that the assumptions underlying such statements are reasonable, we 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's required to do so under the Securities laws. The company makes no prediction or statement about the performance of its common units. A full description of the forward-looking statement disclaimer can be found in the press release and also on slide number two of the presentation. And please be kind enough to take a minute and read through it.

Now, I will turn over the floor to Ms. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Maritime Partners. Please go ahead, Angeliki. Thank you.

Angeliki Frangou

Thank you, Nicolas, and good morning to all of you who's joining us on today's call. I am very pleased with our operating results for the third quarter of 2010. During the quarter, we increased our operating surplus by almost 81%, EBITDA by about 73%, and net income by about 51%.

Our consistent performance has enabled us access to the capital markets. Consequently, we have enjoyed the ability to grow our fleet and profitability. As you can see on slide three, a couple of weeks ago, Navios Partners made approximately $115 million through the sale of a partnership unit. We aim to use these funds to increase cash flow while also engaging our average remaining charter period of 4.3 years and lowering our average fleet age of 6 years.

As an MLP, our focus is growing cash flow by acquiring quality vessels and franchising these vessels and ensuring the charter. Our goal is a creation of doable distribution for our investors. We can also do this by entering into charters with appropriate durations dependent upon our assessment of the market type.

We are pleased to announce that we have chartered out the Navios Libra for two years at an attractive net day rate of $18,525 per day. With this charter, we have eliminated fleet re-chartering risks until the second half of 2012.

As you can see on slide four, since Navios Maritime's IPO in the late 2007, we have increased distribution by more than 20% and our fleet by over 112%. We have been able to do this because of our multiple avenues of growth. We think that we can continue to enjoy the benefit of the Navios Group's global deal flow as we exist to grow our company.

At this point, I would like to turn the call over to Mr. Efstratios Desypris, Navios' partner and Chief Financial Officer, who will take you through the results of the quarter. Efstratios?

Efstratios Desypris

Thank you, Angeliki, and good morning, all. I will briefly review our unaudited financial results for the third quarter and nine months ended September 30, 2010.

In the third quarter and nine months of 2010, we continued to demonstrate significant increase in our operating numbers, reflecting the growth of our fleet from our accretive vessel draw-downs from Navios Holdings. The financial information was included in the press release and summarized in the slide presentation on the company Web site.

As shown on slide five, time charter revenue of the three months of operations ended September 30, 2010 increased by almost 61% to $38.1 million as compared to $23.7 million on the same period of 2009. The increase in revenue is attributable to the increase in total vessel operating days from 920 days in Q3 of 2009 to 1,270 days for the same of period of 2010 due to the addition of core vessels in our fleet.

EBITDA increased by $12.2 million, up 72.6% to $29 million on the third quarter of 2010 as compared to $16.8 million for the same period of 2009. This increase was primarily attributable to the $14.4 million increase in revenues I discussed about and a $0.7 million decrease in time charter and voyage expenses, mainly as a result of the exercise of the purchase option of Navios Sagittarius. These increases were partially offset by a $2.5 million increase in management fees and a $0.4 million increase in G&A expenses due to the increase in the number of vessels.

Net income for the third quarter of 2010 increased by $5.5 million or 50.9% to $16.3 million as compared to $10.8 million of the same period in 2009. The increase in net income is mostly attributable to the increase in vessel operating days and a $0.1 million decrease in direct vessel expenses, which overall favorable variance of $12.3 million was adversely affected by a $6.8 million increase in depreciation and amortization expense. Please keep in mind that the favorable lease component of our acquired vessel is amortized over the remaining duration of the charter-out contract is generally significantly less than the remaining useful life of the vessel.

Operating surplus for the quarter ended September 30, 2010 was $23.7 million, which is $10.6 million higher than the corresponding quarter in 2009. Operating surplus is a non-GAAP financial measure. It is used to assist in evaluating partnership's ability to make quarterly cash distributions.

Capital and replacement reserve for the second quarter of 2010 amounted to $3.8 million, compared to $2 million of the same quarter of last year. During the third quarter of 2010, Navios Partners operated 14 vessels, an increase of four vessels as compared to the same quarter of last year.

Moving on to the nine months of operations, in slide six, time charter and voyage revenues for the nine months of 2010 was $100.7 million as compared to $67 million of the same period of 2009. The increase in revenue by more than 50% was mainly due to the increase in total vessel operating days of 2,570 days in the first nine months of 2009 to 3,498 days in 2010. The increased days resulted from the acquisition of Navios Hyperion, Navios Aurora II, and Navios Pollux in 2010 as well as the acquisition of Navios Sagittarius and Navios Apollon in 2009, which were fully operational in 2010.

EBITDA increased by $28.2 million or 60.4% to $74.9 million for the nine months of 2010 as compared to $46.7 million of the same period of 2009. 2009 EBITDA excludes the non-cash compensation expense of $6.1 million incurred in the second quarter. The increase is mainly attributable to the $33.7 million increase in revenues discussed above and a $1.3 million decrease in time charter and voyage expenses mainly as a result of the exercise of the purchase option of Navios Sagittarius. These increases were partially offset by a $6.2 million increase in management fees due to the increase in the number of vessels and a $0.6 million increase in general and administrative expenses.

Net income for the nine months of 2010 was $42.1 million, compared to $23.3 million for the same period of 2009. The increase in net income is mostly attributable to the increase in vessel operating days as well as $6.1 million non-cash compensation expense incurred in the nine months of 2009, a $1.9 million decrease in net interest expense, and a $0.3 million decrease in direct vessel expenses. This overall favorable variance of $46.5 million was adversely affected by a $17.7 million increase in depreciation and amortization expense.

Operating surplus for the nine months of 2010 was $75.9 million, representing the $40.8 million increase, compared to 2009. Our fleet consistently performed well. Vessel usage and utilization of the nine months of 2010 was 99.7%.

Turning to slide seven, I will briefly discuss some key balance sheet data of September 30, 2010 as compared to December 31st, 2009. Cash and cash equivalents, including restricted cash, amounted to $45.9 million at September 30, 2010, compared to $91.2 million at December 31st, 2009. 2009 cash and cash equivalents include $56.8 million net proceeds of the equity offering completed in November of 2009. Total assets grew by 53.4% to $670.2 million as of September 30, 2010, primarily due to the acquisition of new vessels.

Long term debt increased to $271.5 million at September 30, 2010, compared to $195 million at December 31st, 2009. Navios Partners amended its existing credit facility by adding three new provinces and borrowed an additional amount of $76.5 million, net of $12.5 million prepaid in January 2010 to finalize the acquisition of vessels. The facility is subject to a margin ranging from 1.45% to 1.80%. Net debt to book capitalization on a charter adjusted basis had remained at 35.5% as of December – as of September 30, 2010. As of September 30, Navios Partners was in compliance with the financial covenants of its credit facility.

As shown in slide eight, our Board of Directors approved a cash distribution of the third quarter of 2010 of $0.42 per common unit. This represents a 20% increase over our minimum quarterly distribution. The record date for the third quarter of 2010 distribution is November 10, and that the payment date is November 12, 2010. It must be noted that Navios Partners has consistently paid out quarterly dividend distributions since its inception in November of 2007.

The total distribution amounts to $21 million, of which $17.2 million will be to the common units and $3.8 million to the GP and subordinated units. We are pleased with the distribution coverage. Common unit coverage is 2.56 times. And total unit coverage is 2.10 times. For US tax purpose, Navios Partners reports the cumulative annual distributions to common unit holders on Form 10-99.

On slide nine, the favorable quarterly pattern of EBITDA operating surplus and net income are shown over the 11 quarters from June 1, 2008 through the Q3 of 2010. The consecutive higher results primarily reflect the significant profitable growth by the company from increases in the number of operating vessels through operating dropdowns. This consistent growth is demonstrated in the (inaudible) dividend distribution to our unit holders. Navios Partners has increased this dividend distribution in 6 out of the 11 quarters of its operations. Our current annual distribution of $8.68 per common unit provides for a 9% effective yield based on yesterday's closing price. Our distribution has been growing at a compound annual growth rate of $7.6%.

Slide 10 demonstrates our strong relationship with key participants in our industry. We have built a portfolio of quality charter counterparties, which provides vessel improvement with an average remaining contract life of 4.3 years with a (inaudible) numbers. One of the attributes we seek in our charter counterparties is strong credit quality. In addition, we have ensured our charter-out contracts will (inaudible) insurance. Our objective is to continue to grow a visible, secure, and stable long term base of revenues and a stable level cash flows on our unit holders.

As shown in slide 11, our fleet consists of 14 vessels, 3 Capesize, 10 Panamax, and 1 Ultra-Handymax vessel. The fleet provides a carrying capacity of 1.3 million dead weight tons. Navios Partners' fleet is giant relative to the global dry bulk fleet with an average age of six years as compared to the industry average of approximately 14 years.

Navios Partners has currently contracted 100% of its available days on a charter-out basis for 2010 and 2011, and 94% for 2012. By design, the expiration date was staggered and the total duration extends into the second half of 2012 at the earliest and November 2019 at the latest. It is our objective to continue to grow Navios Partners' fleet on an accretive basis and increase cash available for distributions.

I'll now pass the call to George Achniotis, our Executive Vice President of Business Development, to discuss the industry section. George?

George Achniotis

Thank you, Efstratios, and good morning to all. Please turn to slide 12. While you're reading this paper, it tends to carry your view of the world's economies. As you can see on the left, while rich economies' growth parameters are still below their pre-crisis peaks, the emerging economies have exceeded those peaks by 10% and are still expanding their exports and imports.

On the right, you can see that growth in China and the developing economies contribute a higher percentage to total of world growth than the advanced economies. The IMF expects that these macro trends will continue through the foreseeable future where the emerging economies will contribute more to the world's growth. The hyped up demand growth is being driven by their need to consume greater amounts of raw materials and other commodities to ensure the rapid growth of these developing economies as they recognize and expanded the industrial basis.

Turning now to slide 13, in the 80s, the world trade in dry bulk commodities grew by an average of 1.1% per year as measured in the number of tons alone. In the 90s, trade growth more than doubled averaging 2.8% a year. Since China joined the WTO in 2001, trade in dry bulk commodities expanded by 4.7% a year, including some growth in 2010 estimated by analysts to be 7% to 9%. While the primary engine of that growth continues to be China, India and the other emerging countries add strongly to that growth.

Turning now to slide 14, in 2009, China turned into a net importer of coal. China has determined that its internal metallurgical coal is too expensive to develop and have developed inside it by increasing costs and sites (inaudible) closer to the coast. Analysts forecast very large increases in mett coal imports from 34 million tons in 2009 to a range of 50 million to 60 million tons in 2012, with a large portion of this additional demand being met by coals from the Atlantic, which dramatically increases ton miles.

In addition, thermal coal will remain a large import, with forecast of yearly imports ranging from 100 million to 150 million tons a year, with only minimal exports of about 50 million tons per year. China is expected to be a significant net importer of thermal and metallurgical coal for years to come. As China exports less coal, other Pacific Rim countries source from further afield locations increasing ton-mile requirements.

Turning to slide 15, crude steel production in China through September was 474 million tons, up 13% year-on-year. Note that there were no imports which were on par with last year's totals, while domestic annual raw production was up about 26%. This reflected an intent to production of domestic low quality, high cost capacity that have been idled in 2009 when imported iron ore prices were low.

China still imported 461 million tons of iron ore through September to keep pace with heightened production and demand driven by transnational development, housing, cars, and durable goods. This amount represents more than the total imported for all of 2008 and includes this year's government slowdowns and rationalization of the steel industry and power reductions in the fall.

Based on analyst estimates, it looks as if Chinese iron ore imports for the year will be about the same as last year's as there will be significant liftings in the next couple of weeks to move iron ore from Australia and Brazil to China in the Far East. Some of these (inaudible) replace Indian iron ore shipments as India restricts more of its iron ore for its own production. Also note that increased iron ore imports into Japan, South Korea, and the EU provided the growth in seaborne iron ore gains in (inaudible).

Turning now to slide 16, dry bulk vessel demand is not only driven by the quantity of natural resources, but also by the difference that these power coals are transported. Changing trading patterns affect both sizes of vessels. As an example, Australia and India have been the main suppliers of Chinese iron ore imports into the last few years. Since then, India's steel production increased and is proportional also to China's decline forcing China to import ore from outside the Pacific Rim. Indian iron ore exports in September dropped 47% year-on-year to 3 million tons due to increased Indian steel production and iron ore export perhaps [ph] imported by Indian states. It has not only increased simple demand, but it also increased the ton miles traveled to transport the ore and is a key driver to change the size of demand.

As an example, Vale of Brazil sold a record 140 million tons of ore to China in 2009, compared to 91 million tons in 2008. Vale is currently increasing its mining capacity and expects to produce about 300 million tons of iron ore in 2010 and about 450 million tons by 2014. These significant new volumes are just in time – early for the Vale's growing markets.

Indian coal imports, shown on the right-hand chart, have increased dramatically at a 23% compounded annual growth rate since 2006. According to the Central Electricity Authority of India, this demand will continue to substantially grow as the majority of planned new power generators will be coal higher. India now imports more coal per year then the UK, France, and Germany combined. Forecasts are (inaudible) at 60% growth in India in thermal coal imports. One analyst projects growth from 46 million tons in 2009 to over 75 million tons in 2012. The Indian mett coal imports will (inaudible) continue on 2012 from 21 million tons in 2009.

Turning now to slide 17, the collapse in the trade market in the fourth quarter of 2008 has resulted in a dramatic drop in scrapping levels last year when a record 10 million deadweight tons was recorded. With the subsequent favorable market conditions, the pace of scrapping has declined this year reaching 4.2 million tons year-to-date or about 1% of the fleet. This is equivalent to about 5 million tons on an annualized basis.

However, a significant percentage of the dry bulk fleet is reaching the end of its economic useful life. Fourteen percent of the fleet is older than 25 years of age, and 23% of the fleet is over 20 years old, providing about 120 million deadweight tons of scrapping potential.

Moving to slide 18, through September 2010, new building deliveries were 55.8 million deadweight tons against an expected 90 million deadweight tons, a difference of 40%. At this pace, 2010 total deliveries are projected to be about 75 million deadweight tons out of the 125 million originally predicted by the orderbook. We believe that this demonstrates that non-deliveries will continue to be a substantial part of the dry bulk orderbook going forward.

Even though some yards may have increased capacity, especially the Chinese, it should be noted that the 2010 and 2011 expected deliveries reflect orders probably contracted at prices significantly above the current market making them uneconomical today. In addition, the used traditional bank financing will continue to adversely impact the market, severely curtailing handing to private ship owners in favor of publicly recorded shipping companies. Despite price cleavage in 2010, expected deliveries will likely establish a record year for new buildings.

Please turn to slide 19, during the quarter and currently, dry bulk demand remains strong resulting in arising markets despite the increase in new vessel deliveries. Demand continues to be robust from China, and overall demand will be increasingly supplemented by the growing demand from India, other emerging markets, and in terms of growth in OECD imports. There are substantial mining and port infrastructure expansion plants being built around the world that will add significant cargo volumes in meeting the world's growing demands.

With this demand and supply dynamics, we believe that DBDI will continue to trade at more than its levels at around 2,000 to 4,000 range as outlined in this slide. The 2,000 level represents the average of DBDI from its inception to today. And the 4,000 level is the average of DBDI from the time that China joined the WTO until now. Navios Partners continues to operate its vessels on long term paying charters, ensure credits worth to counterparties, and thus, it does not have (inaudible) order exposure to the spot market trading environment.

This concludes my presentation. I would now like to turn the call back to Angeliki for her final remarks. Angeliki?

[Audio Gap 00:20:56 to 00:26:40]

Operator

Angeliki, would you like to do any closing remarks before we go to questions?

Angeliki Frangou

I think, somehow (inaudible). I just want to thank George for that presentation. And then, we'd like to open the call to questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question today comes from John Chappell from JP Morgan. Please ask your question.

John Chappell – JP Morgan

Thank you. Good afternoon. Angeliki, there hasn't been a lot of sale and purchase activity in the dry bulk market over the last couple of months. I think there's a lot of uncertainty as to where the market's headed. I'm just wondering about the timing of your potential use of proceeds and the money you just raised in October. Are you in a wait-and-see mode to see what 2011 may bring or do you think there may be a sooner implementation of those funds?

Angeliki Frangou

First of all, good morning, Jonathan. I think we are very consistent. We usually put the money to work very quickly. So I think we will have the possibility to do that. Let's not forget that Navios Partners has a strong sponsor in the Navios Holdings. And the model of Navios Partners requires that we have a very credible and durable distribution.

So with the increased amount that we raised in this offering, we are looking on a larger transaction most probably with two drivers extending, the duration of the charter duration of our contract and reducing the age profile. That will give us the opportunity to reward our shareholders in Navios Partners with a creative – and also to have a very credible distribution and increased distribution. I do not believe that we will have a problem in achieving these two targets.

John Chappell – JP Morgan

Okay. And as you look across the spectrum of potential acquisition opportunities, especially as you mentioned this may be a larger transaction, do you think you may make an entrance into the third-party market? Or are dropdowns from Navios Holdings still the primary issue right now?

Angeliki Frangou

We are totally opened to both. And we are open to any third-party transaction. The thing that we need to be always careful on that is to find transactions that are also providers, the counterparty security that we can get. Because the vision showing Navios Partners is a vessel that is charter free is almost useless because you cannot really create in a creative deal with the distributions we have on Navios Partners. So we are very open.

I think there will be opportunities at the later stage. And we are very open to every side of the equation. The thing is that you find have to find cash flows associated with that, from credible counterparties that that AA+ insured. These are the two elements that we'll have to look at.

John Chappell – JP Morgan

Okay. And from your conversation with banks, is 60% financing still possible for acquisitions?

Angeliki Frangou

Yes. I mean, Navios Group can access that easily.

John Chappell – JP Morgan

And then finally, you had the Pollux in the fleet for the full quarter for the first time in the third quarter. I'm just curious about the decision to not bump the distribution even by $0.005 given the recent track record. Once you had a shift for the full quarter, you bumped the distribution.

Angeliki Frangou

I want to be very frank. We increased the distributions on the – when we did the acquisition, if you remember previously. We did adjust on the recent raising that we did. All our investors that participated in that, and we thank them for that, will be getting their distribution, even though that money has not been put in work. We are very consistent on the distribution.

Always, the moment we do an acquisition, we raise. And depending on the size of the distribution – on the size of the acquisition, we can – we are not shy to reward the investors. So if we do a larger transaction, well of course, the next is reward the shareholders. The issue that we did not have – the money was not put to work, even though these investors that participated will also be rewarded on this quarter.

John Chappell – JP Morgan

Very helpful. Thanks, Angeliki.

Angeliki Frangou

Thank you.

Operator

Your next question comes from Natasha Boyden from Cantor Fitzgerald. Please ask your question.

Natasha Boyden – Cantor Fitzgerald

Thank you, operator. Good morning, everybody.

Angeliki Frangou

Good morning.

George Achniotis

Good morning.

Natasha Boyden – Cantor Fitzgerald

I just want to talk in terms of charters, particularly in terms of Panamax. What kind of charters are you seeing right now? Are charters looking for terms greater than a year or is it mostly for shorter time periods?

Angeliki Frangou

To be honest, it's not so much period time, Natasha, to be frank. And maybe that is a combination of two parties that maybe owners don't like to have longer time charters at lower age. But generally, the period market is not as strong as other times.

In the Navios Partners, we did two transactions with very good counterparties. The Algeria, we have reported it. Now there's Libra, which is $18,500 for two years with retail [ph] group, which now has all our vessels (inaudible) 2012. And we have increased our average duration to almost 4.5 years.

Natasha Boyden – Cantor Fitzgerald

Okay. Great and maybe just following on from John's question back to the acquisitions. You said that you would be willing to look at both third-party as well as drop-down from NM. I guess my question is, how many more vessels in NM would you be willing to drop down to NMM? Do you have a set number or is it on an as is basis whatever makes sense at the time?

Angeliki Frangou

I think this is a decision for the Board. You can all see we are very transparent on the vessels Navios Holdings have and the duration they're chartered. This is mostly a decision of the independent board members on the two companies. And this is something that will only be a matter of being agreed on both boards. I don't think any – everyone has a judiciary obligation to their own Board. And we'll find the deal that makes more sense.

Natasha Boyden – Cantor Fitzgerald

Okay. Great. And I just have one more general question. We have seen a resurgence actually in new build orders over the last six months. And I'm wondering in your opinion, is this just shipyards looking to replace lost lots or do you think this represents an actual increase in the order book?

Angeliki Frangou

We just came back – I just came back with a team from the Far East. I was, last week, there. I can see that the orders that you show was a lot of those on the – during the second quarter, we saw a lot of enthusiasm, and sometimes it maybe a combination of things. A lot of the vessels are not new vessels. It's really orders that existed in the books. And they have changed.

What happened is that you show vessel changing from dry, when the dry dropped, to wet because the wet was still good. And then, we have seen (inaudible) we've again seen orders to dry. That doesn't mean – I'm not especially – that it's all fresh orders. There are some fresh orders that was very good demand. But the majority is really recycling the same order book in different ways and forms.

I'm still very – I'm questioning the number of vessels that will actually arrive because you still see that they're struggling in the market, and especially in the new building area, very – you can find very few bonds doing pre-delivery finance. I think almost a very small – I think almost one, maybe a couple of bonds that will do pre-delivery finance. And post delivery is still limited.

So this is your limitation right now. So for new vessels, we are – you're going to be looking on companies that have raised their balance sheet to come in. Because most probably, we will have to finance it themselves the pre-delivery period, except this was an order from previously, and it's re-circling the same thing. So I still believe that the situation on new building is very uncertain on their numbers.

Natasha Boyden – Cantor Fitzgerald

Okay. Great. That was very helpful. Thank you very much.

Angeliki Frangou

Thank you.

Operator

Your next question's taken from Michael Webber from Wells Fargo. Please ask your question.

Michael Webber – Wells Fargo

Hi. Good morning, guys. How are you?

Angeliki Frangou

Good morning.

Michael Webber – Wells Fargo

When I think about your firepower here after the equity raise and I think about your fleet, you certainly have enough room to go out and make more than one acquisition, and you guys have recently done something in the Ultra-Handymax space. Did you think that's an area where you'd like to grow, over the next couple of years, just increase your long-term exposure? Or do you think you're going to be more heavily weighted towards the Panamax and the Capes?

Angeliki Frangou

We don't look at it as – the way we look at it is not as – purely size, but mostly as cash flows. What we like to do is extend the duration of the contracts. We have two major targets, reduce the age profile of our fleet, which is a great competitive advantage; secondly, to prolong the durations of charters. And taking these two targets, we will be focusing on assets that look on this profile; and of course, to be a creative dealer.

Michael Webber – Wells Fargo

Right. I guess what I'm getting at is do you think past the initial charter, and these things all have useful lives of 25 years, is there an asset class that you would like to focus your long-term exposure towards or is it more just across the dry bulk spectrum as a whole?

Angeliki Frangou

Across the board.

Michael Webber – Wells Fargo

Okay. Fair enough. My next question is more general, but – and John touched on this briefly with the distribution staying relatively flat. You guys have been pretty aggressive in growing your fleet. And there certainly have been some distribution upside. But that growth rate has really trailed the fleet growth. How do you think about growing that distribution going forward? And certainly, you guys are being conservative and that plays out in your coverage ratios. Are you waiting for something? Is there something that would get you guys I guess more apt to go out and make a larger distribution increase? Or is it just basically a conservative nature?

Angeliki Frangou

We have articulated and we will make it far more clear in the subsequent times. Whenever we will have acquisitions, we always increase. We did not do it in a – missed I think one raising. We can three or four raisings to a year. We have not – we are not shy to do that. And whenever we will do it, we will increase the distribution. If we do a larger acquisition, we will reward the investors accordingly.

Michael Webber – Wells Fargo

Right, right. I guess what I'm getting at is that distribution coverage ratio keeps inching up, which is great from a security standpoint. But it certainly looks like there's a lot of distribution upside. Is there a certain point at which you think you could increase the distributions at I guess a higher run rate instead of $0.005 000055 to maybe moving to $0.01 or to $0.02? Or is that something you are going to hold firm on that inching up strategy?

Angeliki Frangou

It depends on the assets we add.

Michael Webber – Wells Fargo

Okay. All right, good. Thanks a lot for your time with us.

Angeliki Frangou

Thank you.

Operator

Your next question comes from Urs Dür from Lazard Capital. Please ask your question.

Urs Dür – Lazard Capital

Good afternoon, guys.

Angeliki Frangou

Good afternoon.

Urs Dür – Lazard Capital

Everything has been asked for me. Can you just tell us what your cash balance is today post the issuance? I mean we can guess it, but can you tell us what it is?

Efstratios Desypris

You know that the equity raising was in the region of $410 million approximately. So it's right, that one current cash balance of $45 million you guessed that we have now.

Urs Dür – Lazard Capital

All right. That's what I got. That's all I have. Thanks.

Efstratios Desypris

Thank you.

Angeliki Frangou

Thank you.

Operator

Your next question comes from Seth Glickenhaus from Glickenhaus & Company. Please ask your question.

Seth Glickenhaus – Glickenhaus & Company

I want to congratulate your team on a very good result on the continuation of your policies. The only question I have is, did NM holders buy any of the new issue that the Partners put out or did they allow their position – their holdings to diminish in percentage?

Angeliki Frangou

On the last issuance – first of all, good morning.

Seth Glickenhaus – Glickenhaus & Company

Good morning.

Angeliki Frangou

And I want to say on the last issuance, this was for other investors. But of course, one of the issues will be, very aware in the past, is that we – Navios Holdings likes its investments in Navios Partners. And we are very keen on our ownership there. We believe it's a very good investment.

On the current raising, it was – we had great success as Navios Partners. We have a lot of institutional following. And you saw that from the success of rebounding our sale price so quickly. And Navios Holdings could not participate very well as we have to do a larger one. But Navios Holdings is always a supporter of Navios Partners. And we see, in the present, that this is of a strategic importance as an investment.

Seth Glickenhaus – Glickenhaus & Company

Thank you. That gives me the answer.

Angeliki Frangou

Thank you.

Seth Glickenhaus – Glickenhaus & Company

Good luck to you all.

Angeliki Frangou

Thank you.

Efstratios Desypris

Thank you.

Operator

I'll now pass the floor back to Mrs. Frangou for any closing comments.

Angeliki Frangou

And with that, we conclude the third quarter presentation for Navios Partners. Thank you.

Operator

Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may now disconnect.

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