- Revenue: $19.8 million in Q1
- Net cash from operating activities: $22.2 million in Q1
- Adjusted EBITDA: $13.7 million in Q1
- Operating Surplus: $7.8 million in Q1
- Fleet Renewal
• 11% reduction in average age of the fleet - Quarterly Cash Distribution of $0.125 per unit
MONACO, May 03, 2018 (GLOBE NEWSWIRE) -- Navios Maritime Midstream Partners L.P. (“Navios Midstream”) (NYSE:NAP), an owner and operator of tanker vessels, reported its financial results today for the first quarter of 2018.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Midstream, stated, “We are pleased to report the results for the first quarter of 2018, in which we had $13.7 million of adjusted EBITDA and reported $2.9 million of adjusted net income. We also announced a distribution of $0.125 per unit, representing an annualized yield of about 11%.
Angeliki Frangou continued, “Our new distribution policy allows us to redeploy cash flow to renew our fleet at a time when assets are attractively priced, without having to rely on the equity capital markets and while also maintaining a healthy balance sheet. In the first quarter of 2018, we reduced the average age of our fleet by 11%, while maintaining conservative leverage, with debt to book capitalization of 42.3% at the end of the quarter. We also have no significant debt maturities until 2020 or any committed growth capex.”
RECENT DEVELOPMENTS
Fleet Renewal and Backstop
Navios Midstream acquired the Nave Galactic a 2009-built VLCC, from Navios Maritime Acquisition Corporation ("Navios Acquisition") for $44.5 million. Navios Midstream sold the Shinyo Kannika to an unrelated party for $17.0 million.
The acquisition of the Nave Galactic, a nine-year old vessel, and the sale of the Shinyo Kannika, a 17-year old vessel, reduced the average age of the fleet by 11%. Navios Midstream will continue to refresh its fleet, thereby seeking to revitalize its cash flow generating ability.
Navios Acquisition’s charter rate backstop has been extended to the Nave Galactic. This charter rate backstop was previously for the Shinyo Kannika and under the backstop, Navios Acquisition will pay Navios Midstream any shortfall between (a) $38,025 per day and (b) the average charter rate for each calendar year through February 2019.
The Nave Galactic substituted for the Shinyo Kannika under the Term Loan B.
Cash Distribution
The Board of Directors of Navios Midstream declared a cash distribution for the first quarter of 2018 of $0.125 per unit. The cash distribution is payable on May 11, 2018 to unitholders of record as of May 9, 2018.
Navios Midstream’s ability to make distributions to its unitholders depends on the performance of its subsidiaries and their ability to distribute funds to it. The ability of Navios Midstream’s subsidiaries to make distributions to it may be restricted by, among other things, the provisions of existing and future indebtedness, market conditions, applicable partnership and limited liability company laws and other laws and regulations.
Time charter coverage
Navios Midstream has entered into charter-out agreements for its vessels, with a remaining average term of 3.1 years, which are expected to provide a stable base of revenue and distributable cash flow. Navios Midstream has currently contracted out 100.0% of its available days for 2018 and 40.8% for 2019 expecting to generate revenues, including the backstop commitment provided by Navios Maritime Acquisition Corporation, of approximately $84.8 million and $40.8 million for 2018 and 2019, respectively. The average expected daily charter-out rate for the fleet is $39,443 and $45,613 for 2018 and 2019, respectively.
FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Midstream has compiled condensed consolidated statements of operations for the three month periods ended March 31, 2018 and 2017. The quarterly 2018 and 2017 information was derived from the unaudited condensed consolidated financial statements for the respective periods.
| (in $‘000 except per unit data) | Three Month Period Ended March 31, 2018 (unaudited) | Three Month Period Ended March 31, 2017 (unaudited) | |||||||
| Revenue | $ | 19,779 | $ | 21,100 | |||||
| EBITDA | $ | (18,779 | ) | $ | 14,700 | ||||
| Adjusted EBITDA | $ | 13,665 | (1) | $ | 14,700 | ||||
| Net (loss)/ income | $ | (29,568 | ) | $ | 4,502 | ||||
| Adjusted net (loss)/ income | $ | 2,876 | (1) | $ | 4,502 | ||||
| Earnings per Common unit (basic and diluted) | $ | (1.38 | ) | $ | 0.22 | ||||
| Adjusted (losses)/ earnings per Common unit (basic and diluted) | 0.13 | 0.22 | |||||||
| Operating Surplus | $ | 7,789 | $ | 9,469 | |||||
| Maintenance and Replacement Capital expenditure reserve | $ | (2,835 | ) | $ | (2,461 | ) | |||
(1) Adjusted EBITDA, Adjusted net (loss)/income and Adjusted (losses)/earnings per unit (basic and diluted) for the three month period ended March 31, 2018 in this document exclude loss on sale of vessel of $32.4 million.
EBITDA, Adjusted EBITDA, Adjusted net (loss)/ income and Adjusted (Losses)/earnings per Common unit (basic and diluted) are non-GAAP financial measure and should not be used in isolation or substitution for Navios Midstream’s results (see Exhibit II for reconciliation of EBITDA and Adjusted EBITDA).
Three month periods ended March 31, 2018 and 2017
Revenue for the three month period ended March 31, 2018 decreased by $1.3 million to $19.8 million, as compared to $21.1 million for the same period in 2017. The decrease was attributable to less available days from 540 for the three month period ended March 31, 2017 to 500 days for the three month period ended March 31, 2018, that mainly resulted from the: (i) sale of the Shinyo Kannika; and (ii) drydock of one of our vessels. Time Charter Equivalent (“TCE”) was $39,139 for the three month period ended March 31, 2018 and $38,547 for the three month period ended March 31, 2017.
EBITDA was affected by a $32.4 million book loss on the sale of Shinyo Kannika. Excluding this item, adjusted EBITDA was $13.7 million compared to $14.7 million for the same period in 2017. The decrease in Adjusted EBITDA was due to a: (a) $1.3 million decrease in revenue; and (b) $0.1 million increase in general and administrative expenses; partially mitigated by a: (i) $0.2 million decrease in other expense; (ii) $0.1 million decrease in time charter expenses; and (iii) $0.1 million decrease in management fees.
Net loss for the three month period ended March 31, 2018 amounted to $29.6 million as a result of the above mentioned $32.4 million loss on sale of vessel. Excluding this item Adjusted Net Income was $2.9 million compared to $4.5 million for the same period in 2017. The decrease of approximately $1.4 million was mainly attributable to a: (a) $1.0 million decrease in Adjusted EBITDA; (b) $0.4 million increase in direct vessel expenses; and (c) $0.3 million increase in interest expenses and finance cost; partially mitigated by a $0.1 million decrease in depreciation and amortization.
The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended March 31, 2018 and 2017 was $2.8 million and $2.5 million, respectively (please see “Disclosure of Non-GAAP Financial Measures-4. Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities” in Exhibit 3).
Navios Midstream generated an Operating Surplus for the three month period ended March 31, 2018 of $7.8 million. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see “Disclosure of Non-GAAP Financial Measures-4. Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities” in Exhibit 3).
Fleet Employment Profile
The following table reflects certain key indicators of Navios Midstream’s core fleet performance for the three month periods ended March 31, 2018 and 2017.
| Three Month Period Ended March 31, 2018 (unaudited) | Three Month Period Ended March 31, 2017 (unaudited) | |||||||
| FLEET DATA | ||||||||
| Available days(1) | 500 | 540 | ||||||
| Operating days(2) | 492 | 537 | ||||||
| Fleet utilization(3) | 98.6 | % | 99.5 | % | ||||
| Vessels operating at period end | 6 | 6 | ||||||
| AVERAGE DAILY RESULTS | ||||||||
| Time Charter Equivalent per day(4) | $ | 39,139 | $ | 38,547 | ||||
| (1) | Available days for the fleet represent total calendar days the vessels were in Navios Midstream’s possession for the relevant period after subtracting off-hire days associated with scheduled repairs, drydock or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues. | |
| (2) | Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues. | |
| (3) | Fleet utilization is the percentage of time that Navios Midstream’s vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydock or special surveys. | |
| (4) | TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet. | |
Conference Call Details:
Navios Midstream’s management will host a conference call today, Thursday, May 3, 2018 to discuss the results for the first quarter of 2018.
Conference Call details:
Call Date/Time: Thursday, May 3, 2018 at 8:30 am ET
Call Title: Navios Midstream Q1 2018 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 888 7399
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 888 7399
Slides and Audio Webcast:
There will also be a live webcast of the conference call, through Navios Midstream’s website (www.navios-midstream.com) under “Investors”. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A supplemental slide presentation will be available on Navios Midstream’s website under the “Investors” section by 8:00 am ET on the day of the call.
About Navios Maritime Midstream Partners L.P.
Navios Maritime Midstream Partners L.P. is a publicly traded master limited partnership which owns and operates crude oil tankers under long-term employment contracts. For more information, please visit our website at www.navios-midstream.com.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and expectations, including with respect to Navios Midstream’s future dividends and Navios Midstream's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Navios Midstream at the time these statements were made. Although Navios Midstream believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Midstream. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us, tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand, the aging of our vessels and resultant increases in operation and drydocking costs, the loss of any customer or charter or vessel, our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all, increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, potential liability from litigation and our vessel operations, including discharge of pollutants, general domestic and international political conditions, competitive factors in the market in which Navios Midstream operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Midstream’s filings with the U.S. Securities and Exchange Commission including its Form 20-Fs and Form 6-Ks. Navios Midstream expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Midstream’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Midstream makes no prediction or statement about the performance of its common units.
Investor Relations Contact
Navios Maritime Midstream Partners L.P.
+1 (212) 906 8647
Investors@navios-midstream.com
| EXHIBIT 1 | ||||||||||||
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in thousands of U.S. Dollars) | ||||||||||||
| March 31, 2018 (unaudited) | December 31, 2017 | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 21,470 | $ | 27,086 | ||||||||
| Restricted cash | — | 10,000 | ||||||||||
| Accounts receivable, net | 2,758 | 2,357 | ||||||||||
| Prepaid expenses and other current assets | 3,172 | 3,022 | ||||||||||
| Due from related parties, current | 5,821 | 20,086 | ||||||||||
| Total current assets | 33,221 | 62,551 | ||||||||||
| Vessels, net | 350,184 | 356,220 | ||||||||||
| Intangible assets | 21,615 | 22,318 | ||||||||||
| Deferred dry dock and special survey costs, net | 11,838 | 12,893 | ||||||||||
| Due from related parties, non-current | 2,565 | 2,565 | ||||||||||
| Total non-current assets | 386,202 | 393,996 | ||||||||||
| Total assets | $ | 419,423 | $ | 456,547 | ||||||||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||
| Current liabilities | ||||||||||||
| Due to related parties, current | 974 | — | ||||||||||
| Accounts payable | $ | 2,831 | $ | 1,999 | ||||||||
| Accrued expenses | 1,256 | 572 | ||||||||||
| Deferred revenue | 887 | 1,731 | ||||||||||
| Current portion of long-term debt, net of deferred finance costs and discount | 679 | 675 | ||||||||||
| Total current liabilities | 6,627 | 4,977 | ||||||||||
| Long-term debt, net of deferred finance costs and discount | 195,664 | 195,839 | ||||||||||
| Total non-current liabilities | 195,664 | 195,839 | ||||||||||
| Total liabilities | $ | 202,291 | $ | 200,816 | ||||||||
| Commitments and contingencies | — | — | ||||||||||
| Total Partners’ capital | ||||||||||||
| Common Unitholders (19,354,498 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | 190,790 | 225,742 | ||||||||||
| Subordinated Series A Unitholders (1,592,920 units issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | 22,116 | 24,992 | ||||||||||
| General Partner (427,499 units issued and outstanding at March 31, 2018 and at December 31, 2017, respectively) | 4,226 | 4,997 | ||||||||||
| Partners’ capital | 217,132 | 255,731 | ||||||||||
| Total liabilities and Partners’ capital | $ | 419,423 | $ | 456,547 | ||||||||
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in thousands of U.S. Dollars, except per unit amounts) | |||||||||||||
| Three Month Period ended March 31, 2018 (unaudited) | Three Month Period ended March 31, 2017 (unaudited) | ||||||||||||
| Revenue (includes related party revenue of $4,769 and $1,155 for the three months ended March 31, 2018 and 2017, respectively) | $ | 19,779 | $ | 21,100 | |||||||||
| Time charter expenses | (228 | ) | (285 | ) | |||||||||
| Direct vessel expenses | (1,197 | ) | (780 | ) | |||||||||
| Management fees (entirely through related party transactions) | (5,064 | ) | (5,130 | ) | |||||||||
| General and administrative expenses | (806 | ) | (724 | ) | |||||||||
| Depreciation and amortization | (6,168 | ) | (6,293 | ) | |||||||||
| Interest expenses and finance cost | (3,438 | ) | (3,131 | ) | |||||||||
| Loss on sale of asset | (32,444 | ) | — | ||||||||||
| Interest income | 14 | 6 | |||||||||||
| Other expense, net | (16 | ) | (261 | ) | |||||||||
| Net (loss)/ income | $ | (29,568 | ) | $ | 4,502 | ||||||||
| (Loss)/ Earnings attributable to: | |||||||||||||
| Common unit holders | $ | (26,775 | ) | $ | 2,108 | ||||||||
| Subordinated Series A unit holders | $ | (2,203 | ) | $ | 336 | ||||||||
| Subordinated unit holders | $ | — | $ | 1,971 | |||||||||
| General Partner | $ | (590 | ) | $ | 87 | ||||||||
| (Loss)/ Earnings per unit (basic and diluted) | |||||||||||||
| Common unitholders: | $ | (1.38 | ) | $ | 0.22 | ||||||||
| Subordinated Series A unitholders: | $ | (1.38 | ) | $ | 0.21 | ||||||||
| Subordinated unitholders: | $ | — | $ | 0.19 | |||||||||
| General Partner: | $ | (1.38 | ) | $ | 0.21 | ||||||||
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of U.S. Dollars) | ||||||||||||
| Three Month Period ended March 31, 2018 (unaudited) | Three Month Period ended March 31, 2017 (unaudited) | |||||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net (loss)/ income | $ | (29,568 | ) | $ | 4,502 | |||||||
| Adjustments to reconcile net (loss)/ income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 6,168 | 6,293 | ||||||||||
| Amortization of deferred finance fees | 340 | 344 | ||||||||||
| Amortization of dry dock and special survey costs | 1,197 | 780 | ||||||||||
| Loss on Sale of Asset | 32,444 | — | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Increase in prepaid expenses and other current assets | (679 | ) | (2,189 | ) | ||||||||
| Increase in accounts receivable | (401 | ) | (1,540 | ) | ||||||||
| Increase in accounts payable | 665 | 234 | ||||||||||
| Increase/ (decrease) in accrued expenses | 684 | (10 | ) | |||||||||
| Payments for Drydocking | (1,997 | ) | — | |||||||||
| Decrease/ (increase) in due from/ to related parties | 14,239 | (6,504 | ) | |||||||||
| Decrease in deferred revenue | (844 | ) | (763 | ) | ||||||||
| Net cash provided by operating activities | $ | 22,248 | $ | 1,147 | ||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Acquisition of vessels | (44,526 | ) | — | |||||||||
| Net proceeds from sale of assets | 16,206 | — | ||||||||||
| Net cash used in investing activities | $ | (28,320 | ) | $ | — | |||||||
| FINANCING ACTIVITIES | ||||||||||||
| Loan repayment | (513 | ) | (513 | ) | ||||||||
| Dividend paid | (9,031 | ) | (9,019 | ) | ||||||||
| Proceeds from issuance of general partner units | — | 79 | ||||||||||
| Proceeds from issuance of common units | — | 3,777 | ||||||||||
| Net cash (used in) financing activities | $ | (9,544 | ) | $ | (5,676 | ) | ||||||
| Net decrease in cash, cash equivalents and restricted cash | (15,616 | ) | (4,529 | ) | ||||||||
| Cash, cash equivalents and restricted cash, beginning of period | $ | 37,086 | $ | 52,791 | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 21,470 | $ | 48,262 | ||||||||
| Supplemental disclosures of cash flow information | ||||||||||||
| Cash interest paid | $ | 3,064 | $ | 2,777 | ||||||||
EXHIBIT 2
| Owned Vessels as of March 31, 2018 | Type | Built | Capacity (DWT) | ||||||
| Shinyo Kieran | VLCC | 2011 | 297,066 | ||||||
| Shinyo Saowalak | VLCC | 2010 | 298,000 | ||||||
| Nave Galactic | VLCC | 2009 | 297,168 | ||||||
| Nave Celeste | VLCC | 2003 | 298,717 | ||||||
| Shinyo Ocean | VLCC | 2001 | 281,395 | ||||||
| C. Dream | VLCC | 2000 | 298,570 | ||||||
| Option Vessels(1) | Type | Built | Capacity (DWT) | Expiration Date | |||||||
| Nave Buena Suerte | VLCC | 2011 | 297,491 | November 18, 2018 | |||||||
| Nave Neutrino | VLCC | 2003 | 298,287 | November 18, 2018 | |||||||
| Nave Electron | VLCC | 2002 | 305,178 | November 18, 2018 | |||||||
(1) Navios Midstream has options, to acquire up to three VLCCs at fair market value from Navios Maritime Acquisition Corporation until November 18, 2018.
EXHIBIT 3
Disclosure of Non-GAAP Financial Measures
1. EBITDA
EBITDA is a non-U.S. GAAP financial measure and should not be used in isolation or as substitution for Navios Midstream’s results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
EBITDA represents net (loss)/income before interest and finance costs, before depreciation and amortization and before income taxes. Adjusted EBITDA in this document represents EBITDA excluding loss on sale of vessel, as described under “Financial Highlights”. Adjusted net (loss)/ income and Adjusted (losses)/ earnings per unit (basic and diluted) represent Net (loss)/ income and (losses)/ earnings per unit (basic and diluted), excluding certain item as described under “Financial Highlights”. We use Adjusted EBITDA as liquidity measure and reconcile EBITDA and Adjusted EBITDA to net cash provided by/ (used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by/(used in) operating activities adding back, when applicable and as the case may be, the effect of: (i) net increase/(decrease) in operating assets; (ii) net (increase)/decrease in operating liabilities; (iii) net interest cost; (iv) amortization of deferred finance costs and other related expenses; and (v) gain/ loss on sale of assets. Navios Midstream believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and present useful information to investors regarding Navios Midstream’s ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Midstream also believes that EBITDA and Adjusted EBITDA are used: (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Midstream’s results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Midstream’s performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.
2. Operating Surplus
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 Midstream’s 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 a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with U.S. GAAP or as a measure of profitability or liquidity.
3. Available Cash
Available Cash generally means for each fiscal quarter, all cash on hand at the end of the quarter:
- less the amount of cash reserves established by the Board of Directors to:
- provide for the proper conduct of Navios Midstream’s business (including reserve for maintenance and replacement capital expenditures);
- comply with applicable law, any of Navios Midstream’s debt instruments, or other agreements; or
- provide funds for distributions to the unitholders and to the general partner for any one or more of the next four quarters;
- plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under any revolving credit or similar agreement used solely for working capital purposes or to pay distributions to partners.
Available Cash 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. Available cash is not required by accounting principles generally accepted in the United States 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 U.S. GAAP or as a measure of profitability or liquidity.
4. Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities
| Three Month Period ended March 31, 2018 ($’000) (unaudited) | Three Month Period ended March 31, 2017 ($’000) (unaudited) | ||||||||
| Net cash provided by operating activities | $ | 22,248 | $ | 1,147 | |||||
| Net (decrease)/ increase in operating assets | (11,162 | ) | 3,729 | ||||||
| Net (decrease)/ increase in operating liabilities | (505 | ) | 7,043 | ||||||
| Net interest cost | 3,424 | 3,125 | |||||||
| Amortization of deferred finance cost and bond premium | (340 | ) | (344 | ) | |||||
| Loss on sale of vessel | (32,444 | ) | — | ||||||
| EBITDA | $ | (18,779 | ) | $ | 14,700 | ||||
| Loss on sale of vessel | 32,444 | — | |||||||
| Adjusted EBITDA | 13,665 | — | |||||||
| Cash interest paid | $ | (3,064 | ) | $ | (2,777 | ) | |||
| Cash interest income | 23 | 7 | |||||||
| Maintenance and replacement capital expenditures | $ | (2,835 | ) | $ | (2,461 | ) | |||
| Operating Surplus | $ | 7,789 | $ | 9,469 | |||||
| Cash reserves | $ | (5,117 | ) | $ | (447 | ) | |||
| Available cash for distribution | $ | 2,672 | $ | 9,022 | |||||
| Three Month Period ended March 31, 2018 ($’000) (unaudited) | Three Month Period ended March 31, 2017 ($’000) (unaudited) | |||||||||
| Net cash provided by operating activities | $ | 22,248 | $ | 1,147 | ||||||
| Net cash used in investing activities | $ | (28,320 | ) | $ | — | |||||
| Net cash used in financing activities | $ | (9,544 | ) | $ | (5,676 | ) | ||||