NMM

Business Context and Reporting Period

Company: Navios Maritime Partners L.P.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Nine months ended September 30, 2009 (unaudited)
Date of Filing: October 29, 2009

Navios Partners is an international owner and operator of dry bulk vessels. As of September 30, 2009, the fleet consisted of nine owned vessels (eight Panamax, one Capesize) and three chartered-in vessels. The company operates under long-term time charters, providing stable cash flows. Navios Holdings owns approximately 41.8% of the partnership.

Key Financial Metrics

Weighted Average Interest Rate: 3.75% for the nine months ended September 30, 2009 (down from 4.51% in 2008).

Material Changes vs. Prior Period

• Revenue Growth: Revenues increased by $13.5 million (25.2%) primarily due to the full-year operation of vessels acquired in 2008 (Navios Aldebaran, Navios Hope) and the acquisition of rights to the Navios Sagittarius in June 2009.
• Profitability: Net income increased by $3.4 million (17.0%). This was driven by higher revenues and lower interest expenses, partially offset by a $6.1 million non-cash compensation expense related to the issuance of subordinated Series A units.
• Debt Reduction: Outstanding debt decreased by $40 million due to a repayment made in February 2009 under an amended credit facility.
• Operating Cash Flow: Net cash provided by operating activities more than doubled to $69.6 million, driven by higher net income and a significant increase in deferred voyage revenue ($25.0 million increase) resulting from a lump-sum charter payment received for the Navios Hope.

Guidance, Outlook, and Recent Developments

Recent Equity Raises:

• May 2009: Raised ~$36.1 million gross to acquire rights to the Navios Sagittarius.
• September 2009: Raised ~$34.2 million gross (plus $4.4 million from overallotment in October) to fund fleet expansion.

Vessel Acquisitions:

• Navios Sagittarius: Acquired rights in June 2009 for $34.6 million; chartered-in with a purchase option.
• Navios Apollon: Agreed to purchase in October 2009 for $32.0 million; delivered October 29, 2009. Financed by recent equity proceeds.

Management Agreement: Fixed management fees for two additional years (through November 2011) at $4,500/day (Ultra-Handymax), $4,400/day (Panamax), and $5,500/day (Capesize).

Distributions:

• Authorized quarterly distribution for Q3 2009: $0.405 per unit (payable November 12, 2009).
• Total cash distributions paid in the first nine months of 2009: $27.5 million.

Risks and Contingencies:

• Credit Facility Covenants: The company is in compliance with financial covenants. The facility requires maintaining minimum cash reserves (reaching $12.5 million by December 31, 2009).
• Market Risks: Exposure to interest rate fluctuations (LIBOR-based) and foreign exchange rates (though transactions are predominantly USD).
• Concentration: Top four charterers accounted for ~76.4% of revenues for the nine months ended September 30, 2009.

Investor Verification Checklist

• Deferred Revenue Amortization: Verify the impact of the $30.4 million lump-sum payment for the Navios Hope on future revenue recognition and cash flow stability.
• Debt Covenants: Confirm continued compliance with the amended credit facility covenants, specifically the Value Maintenance Covenant (VMC) and minimum net worth requirements.
• Equity Dilution: Assess the impact of recent equity offerings (May and September 2009) and the issuance of 1 million subordinated Series A units on per-unit earnings and distribution rights.
• Charter Concentration: Monitor the creditworthiness of major counterparties (Mitsui O.S.K. Lines, Cargill, Sanko, Daiichi Chuo) which represent the majority of revenue.
• Capital Expenditures: Review the utilization of the $37.2 million net proceeds from recent offerings for the acquisition of the Navios Apollon and future fleet expansion.