Navios Maritime Acquisition Corporation Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2016


  • Net income
    • $12.2 million for Q2 2016; $0.08 per share
    • $36.0 million for the six months 2016; $0.23 per share
  • Profit sharing
    • $1.3 million for Q2 2016
    • $7.4 million for the six months 2016
  • Quarterly dividend of $0.05 per share; 12.7% current annualized yield

MONACO, Aug. 18, 2016 (GLOBE NEWSWIRE) -- Navios Maritime Acquisition Corporation (“Navios Acquisition”) (NYSE:NNA), an owner and operator of tanker vessels, reported its financial results today for the second quarter and the six month period ended June 30, 2016. 

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “Navios Acquisition reported net income of $12.2 million or $0.08 per share for the second quarter of 2016 and $36.0 million or $0.23 per share for the first half of 2016. This included $1.3 million of profit sharing in the second quarter of 2016 of a total of $7.4 million in the first half of 2016.  We declared a dividend of $0.05 per share for the quarter, resulting in a dividend yield of about 13% on an annualized basis.” 

Angeliki Frangou continued, “NNA has 38 vessels with an average age of 5.4 years, all of which are generating cash flow. Our fleet is 98.2% fixed for 2016 and 56.6% fixed for 2017, and our operating costs are fixed through mid-2018, at rates that are about 11% below industry average through our operating agreements with Navios Holdings.” 

HIGHLIGHTS — RECENT DEVELOPMENTS 

Dividend of $0.05 per share of common stock

On August 10, 2016, the Board of Directors of Navios Acquisition declared a quarterly cash dividend for the second quarter of 2016 of $0.05 per share of common stock. The dividend is payable on September 21, 2016 to stockholders of record as of September 14, 2016 and provides a current annualized yield of 12.7%.

Profit sharing

During the second quarter of 2016, Navios Acquisition benefited from the healthy spot market and earned $1.3 million under its profit sharing arrangements. Profit sharing recognized for the six months ended June 30, 2016 was $7.4 million.

Time Charter Coverage

Navios Acquisition currently owns 38 vessels, of which eight are VLCCs, 26 are product tankers and four are chemical tankers which include the two vessels, the Nave Constellation, a 2013-built chemical tanker of 45,281 dwt, and the Nave Universe, a 2013-built chemical tanker of 45,513 dwt, that Navios Acquisition has agreed to sell following the completion of their chartering commitments, expected during the second half of 2016. 

As of August 18, 2016, Navios Acquisition had contracted 98.2% and 56.6% of its available days on a charter-out basis for 2016 and 2017, respectively, expecting to generate revenues of approximately $256.9 million and $118.7 million, respectively. The average contractual daily charter-out rate for the fleet is expected to be $20,679 and $21,020 for 2016 and 2017, respectively.   

FINANCIAL HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Acquisition has compiled its consolidated statement of income for the three months and six months ended June 30, 2016 and 2015. The quarterly information for 2016 and 2015 was derived from the unaudited condensed consolidated financial statements for the respective periods.  

               
(Expressed in thousands of U.S. dollars)  Three
Month
Period
ended
June 30, 
2016
(unaudited)
  Three
Month
Period
ended
June 30, 
2015
(unaudited)
   Six Month
Period
ended
June 30, 
2016
(unaudited)
  Six Month
Period
ended
June 30,
2015
(unaudited)
 
Revenue  $74,495  $80,408   $154,914  $159,019 
Net cash provided by operating activities  $24,176  $20,034   $50,237  $54,144 
EBITDA  $45,186  $60,398   $102,954  $113,606 
Adjusted EBITDA(1)  $45,450  $55,289   $101,200  $109,153 
Net income  $12,184  $26,362   $35,954  $46,396 
Adjusted net income (1)  $12,448  $22,029   $34,414  $42,719 
Earnings per share (basic)  $0.08  $0.17   $0.23  $0.29 
Adjusted earnings per share (basic) (1)  $0.08  $0.14   $0.22  $0.27 
                   

(1) Adjusted EBITDA, Adjusted net income and Adjusted earnings per share (basic) for the three month period ended June 30, 2016 in this document exclude non-cash stock-based compensation of $0.3 million.  

Adjusted EBITDA, Adjusted net income and Adjusted earnings per share (basic) for the six month period ended June 30, 2016 in this document exclude gain on sale of vessel of $2.3 million and non-cash stock-based compensation of $0.5 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.2 million write-off of deferred finance cost.  

Adjusted EBITDA, Adjusted net income and Adjusted earnings (basic) for the three month period ended June 30, 2015 in this document exclude stock-based compensation of $0.7 million and gain on sale of vessels of $5.8 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.8 million write off of deferred finance cost and debt prepayment expenses.

Adjusted EBITDA, Adjusted net income and Adjusted earnings (basic) for the six month period ended June 30, 2015 in this document exclude stock-based compensation of $1.3 million and gain on sale of vessels of $5.8 million. Net income and Earnings per share (basic) have been further adjusted to exclude $0.8 million write off of deferred finance cost and debt prepayment expenses.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be used in isolation or substitution for Navios Acquisition’s results (see Exhibit II for reconciliation of EBITDA and Adjusted EBITDA). 

Three month periods ended June 30, 2016 and 2015   

Revenue for the three month period ended June 30, 2016 decreased by $5.9 million or 7.4% to $74.5 million, as compared to $80.4 million for the same period of 2015. The decrease was mainly attributable to: (i) the decrease in profit sharing by $7.2 million to $1.3 million recognized in the three month period ended June 30, 2016, as compared to $8.6 million for the same period in 2015; and (ii) the decrease in revenue by $6.9 million due to the sale of two VLCCs in June 2015 and one MR2 tanker vessel in January 2016. The decrease was partially mitigated by the increase in revenue following the deliveries of two vessels from April 2015 until June 30, 2016. Available days of the fleet decreased to 3,437 days for the three month period ended June 30, 2016, as compared to 3,523 days for the three month period ended June 30, 2015. The TCE Rate decreased to $21,380 for the three month period ended June 30, 2016, from $22,541 for the three month period ended June 30, 2015.

EBITDA for the three month period ended June 30, 2016 decreased by $15.2 million to $45.2 million from $60.4 million in the same period of 2015. The decrease in EBITDA was mainly due to: (i) a $5.9 million decrease in revenue; (ii) $5.8 million of gain from sale of vessels recognized in the three month period ended June 30, 2015; (iii) a $2.1 million increase in general and administrative expenses; (iv) a $0.8 million increase in other expense, net; and (v) $0.7 million increase in direct vessel expenses (excluding amortization of dry dock and special survey costs), partially mitigated by a $0.1 million increase in equity in net earnings of affiliated companies. 

Net income for the three month period ended June 30, 2016, decreased by approximately $14.2 million to $12.2 million compared to $26.4 million, for the same period in 2015. The decrease was due to: (i) a decrease of $15.2 million in EBITDA; and (ii) an increase of $0.3 million in amortization of dry docking and special survey costs included in direct vessel expenses. The decrease was partially mitigated by: (a) an increase of $0.6 million in interest income; (b) a decrease of $0.6 million in depreciation and amortization; and (c) a decrease of $0.2 million in interest expense and finance cost.

Six month periods ended June 30, 2016 and 2015

Revenue for the six month period ended June 30, 2016 decreased by $4.1 million or 2.6% to $154.9 million, as compared to $159.0 million for the same period of 2015. The decrease was mainly attributable to: (i) the decrease in profit sharing by $8.8 million to $7.4 million recognized in the six month period ended June 30, 2016, as compared to $16.2 million for the same period in 2015; and (ii) the decrease in revenue by $14.7 million due to the sale of two VLCCs in June 2015 and one MR2 tanker vessel in January 2016. The decrease was partially mitigated by the increase in revenue following deliveries of four vessels during the period from January 2015 until June 30, 2016. Available days of the fleet decreased to 6,914 days for the six month period ended June 30, 2016, as compared to 6,961 days for the six month period ended June 30, 2015. The TCE Rate slightly decreased to $22,055 for the six month period ended June 30, 2016, from $22,531 for the six month period ended June 30, 2015.

EBITDA for the six month period ended June 30, 2016 decreased by $10.7 million to $103.0 million from $113.6 million in the same period of 2015. The decrease in EBITDA was mainly due to: (i) a $4.1 million decrease in revenue; (ii) the decrease in the gain on sale of vessels by $3.5 million; (iii) a $2.4 million increase in general and administrative expenses; (iv) a $1.0 million increase in other expense, net; (v) a $0.3 million increase in time charter expenses; (vi) a $0.2 million increase in management fees; and (vii) $0.7 million increase in direct vessel expenses (excluding amortization of dry dock and special survey costs), partially mitigated by a $1.5 million increase in equity in net earnings of affiliated companies.

Net income for the six month period ended June 30, 2016 decreased by $10.4 million to $36.0 million from $46.4 million for the same period of 2015. The decrease was due to: (i) a decrease of $10.7 million in EBITDA; (ii) an increase of $0.7 million in interest expense and finance cost; and (iii) an increase of $0.6 million in amortization of dry docking and special survey costs included in direct vessel expenses. The decrease was partially mitigated by: (a) an increase of $1.0 million in interest income; and (b) a decrease of $0.6 million in depreciation and amortization.

Fleet Employment Profile

The following table reflects certain key indicators of the performance of Navios Acquisition and its core fleet for the three and six months ended June 30, 2016 and 2015.

                 
  Three month period ended
June 30,
  Six month period ended
June 30,
 
  2016
(unaudited)
  2015
(unaudited)
  2016
(unaudited)
  2015
(unaudited)
 
FLEET DATA                
Available days(1)  3,437   3,523   6,914   6,961 
Operating days(2)  3,428   3,511   6,899   6,936 
Fleet utilization(3)  99.8  99.7  99.8  99.7
Vessels operating at period end  38   37   38   37 
AVERAGE DAILY RESULTS                
Time Charter Equivalent (“TCE”) Rate per day(4) $21,380  $22,541  $22,055  $22,531 
                 

(1) Available days: Available days for the fleet represent the total calendar days the vessels were in Navios Acquisition’s possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
                               
(2) Operating days: Operating days are 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: Fleet utilization is the percentage of time that Navios Acquisition’s vessels were available for generating revenue, 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 a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off hire for reasons other than scheduled repairs, dry dockings or special surveys.                               

(4) TCE Rate: Time Charter Equivalent Rate is 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 of various types of charter contracts for the number of available days of the fleet.

Conference Call, Webcast and Presentation Details:
As previously announced, Navios Acquisition will host a conference call today, Thursday, August 18, 2016 at 8:30 am ET, at which time Navios Acquisition's senior management will provide highlights and commentary on earnings results for the second quarter and the six month period ended June 30, 2016.

US Dial In: +1.877.480.3873

International Dial In: +1.404.665.9927

Conference ID: 2750 1665

The conference call replay will be available shortly 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: 2750 1665

The call will be simultaneously Webcast. The Webcast will be available on the Navios Acquisition website, www.navios-acquisition.com, under the "Investors" section. The Webcast will be archived and available at the same Web address for two weeks following the call.

A supplemental slide presentation will be available by 8:00 am ET on the day of the call.

About Navios Acquisition
Navios Acquisition (NYSE:NNA) is an owner and operator of tanker vessels focusing on the transportation of petroleum products (clean and dirty) and bulk liquid chemicals. 

For more information about Navios Acquisition, please visit our website: www.navios-acquisition.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 Acquisition’s future dividends, 2016 cash flow generation and Navios Acquisition’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 Acquisition at the time these statements were made. Although Navios Acquisition 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 which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Acquisition. 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 dry docking 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 Acquisition operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Acquisition's filings with the Securities and Exchange Commission, including its Form 20Fs and Form 6Ks. Navios Acquisition 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 Acquisition’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Acquisition makes no prediction or statement about the performance of its common stock.

          
         EXHIBIT I
NAVIOS MARITIME ACQUISITION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars except share data)
         
          
    June 30,
2016
(unaudited)
  December 31,
2015
(unaudited)
ASSETS         
Current assets         
Cash and cash equivalents   $69,536  $54,805
Restricted cash    6,904   6,840
Accounts receivable, net    15,939   14,202
Due from related parties, short-term    21,661   17,837
Prepaid expenses and other current assets    2,261   3,665
Total current assets    116,301   97,349
          
Vessels, net    1,335,363   1,441,635
Vessels held for sale    62,072   
Goodwill    1,579   1,579
Other long-term assets    5,850   1,920
Deferred dry dock and special survey costs, net    10,186   10,326
Investment in affiliates    201,711   204,808
Due from related parties, long-term    28,257   16,474
Total non-current assets    1,645,018   1,676,742
Total assets   $1,761,319  $1,774,091
          
LIABILITIES AND STOCKHOLDERS’ EQUITY         
Current liabilities         
Accounts payable   $2,366  $2,753
Accrued expenses    13,211   9,802
Deferred revenue    6,516   7,600
Current portion of long-term debt, net of deferred finance cost    74,864   62,643
          
Total current liabilities    96,957   82,798
Long-term debt, net of current portion, premium and net of deferred finance cost    1,089,901   1,134,940
Deferred gain on sale of assets    8,459   8,982
Total non-current liabilities    1,098,360   1,143,922
Total liabilities   $1,195,317  $1,226,720
          
Commitments and contingencies       
Puttable common stock 450,000 and 650,000 shares issued and outstanding with $4,500 and $6,500 redemption amount as of June 30, 2016 and December 31, 2015, respectively    4,500   6,500
Stockholders’ equity         
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 1,000 series C shares and 4,000 series A and C shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively       
Common stock, $0.0001 par value; 250,000,000 shares authorized; 150,782,990 and 149,782,990 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively    15   15
Additional paid-in capital    541,384   540,856
Retained earnings    20,103   
Total stockholders’ equity    561,502   540,871
Total liabilities and stockholders’ equity   $1,761,319  $1,774,091


                     
NAVIOS MARITIME ACQUISITION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of U.S. dollars- except share and per share data)
                     
    For the Three  For the
Three
  For the Six  For the Six 
    Months  Months  Months  Months 
    Ended  Ended  Ended  Ended 
    June 30, 2016  June 30, 2015  June 30, 2016  June 30, 2015 
    (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Revenue   $74,495  $80,408    $154,914  $159,019 
Time charter and voyage expenses    (1,017)  (996)    (2,438)  (2,186)
Direct vessel expenses    (1,405)  (348)    (2,049)  (697)
Management fees    (24,318)  (24,293)    (48,504)  (48,335)
General and administrative expenses    (5,981)  (3,903)    (9,510)  (7,068)

Depreciation and amortization
    (14,294)  (14,880)    (29,177)  (29,771)
Gain on sale of vessels       5,771     2,282   5,771 
Interest income    880   302     1,534   573 
Interest expense and finance cost    (18,913)  (19,110)    (38,038)  (37,315)
Equity in net earnings of affiliated companies    3,731   3,651     8,622   7,089 
Other expense, net    (994)  (240)    (1,682)  (684)

Net income
   $  12,184  $26,362    $35,954  $  46,396 
                     
Dividend on Series B preferred shares       (27)       (54)
Dividend on Series D preferred shares       (61)       (199)
Dividend declared on restricted shares    (35)  (70)    (70)  (140)
Undistributed income attributable to Series C participating preferred shares    (591)  (1,271)    (1,752)  (2,233)
Net income attributable to common shareholders, basic   $  11,558  $24,933    $34,132  $  43,770 
Dividend on Series B preferred shares       27        54 
Dividend on Series D preferred shares       61        199 
Dividend declared on restricted shares    35   70     70   140 
Net income attributable to common shareholders, diluted   $  11,593  $25,091    $34,202  $  44,163 
Net income per share, basic   $0.08  $0.17    $0.23  $0.29 
                     
Weighted average number of shares, basic    150,084,084   150,580,595     149,668,699   150,455,682 
                     
Net income per share, diluted   $0.08  $0.16    $0.23  $0.29 
                     
Weighted average number of shares, diluted    150,784,089   154,197,621     150,836,836   154,340,946 
                     


           
NAVIOS MARITIME ACQUISITION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. dollars)
           
    For the Six Months
Ended June 30, 2016
(unaudited)
  For the Six Months
Ended June 30, 2015
(unaudited)
 
Operating Activities          
Net income   $35,954  $46,396 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization    29,177   29,771 
Amortization and write-off of deferred finance cost and bond premium    1,864   1,993 
Amortization of deferred dry dock and special survey costs    1,319   697 
Stock based compensation    528   1,318 
Gain on sale of vessels    (2,282)  (5,771)
Equity in net earnings of affiliated companies, net of dividends received    (833)  (1,159)
Changes in operating assets and liabilities:          
Decrease in prepaid expenses and other current assets    1,404   1,388 
Increase in accounts receivable    (1,737)  (3,143)
Increase in due from related parties short-term    (3,824)  (2,860)
Increase in restricted cash    (64)  (50)
(Increase)/ decrease in other long term assets    (3,930)  210 
(Decrease)/ increase in accounts payable    (387)  726 
Increase in accrued expenses    3,409   638 
Payments for dry dock and special survey costs    (2,324)   
Increase in due from related parties long-term    (6,430)   
Decrease in due to related parties       (17,462)
(Decrease)/ increase in deferred revenue    (1,607)  1,452 

Net cash provided by operating activities
   $  50,237  $54,144 
           
Investing Activities          
Acquisition of vessels       (29,397)
Dividends received from affiliates    2,853   757 
Net proceeds from sale of vessels    18,449   71,224 
Investment in affiliates       (4,826)
Loans receivable from affiliates    (4,275)  (3,289)
 

Net cash provided by investing activities
   $  17,027  $  34,469 
           
Financing Activities          
Loan proceeds, net of deferred finance cost       25,954 
Loan repayments    (34,682)  (64,198)
Dividend paid    (15,851)  (16,170)
Payment to related party       (11,265)
Decrease in restricted cash       (130)
Redemption of convertible shares and puttable common stock    (2,000)  (3,500)
 
Net cash used in financing activities
   $  (52,533) $  (69,309)
           
Net increase in cash and cash equivalents    14,731   19,304 
Cash and cash equivalents, beginning of year    54,805   54,493 
 
Cash and cash equivalents, end of period
   $  69,536  $73,797 
           


           EXHIBIT II
            
Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities
             
  Three Month  Three Month  Six Month  Six Month 
PeriodPeriodPeriodPeriod
EndedEndedEndedEnded
June 30,June 30,June 30,June 30,
2016201520162015
(unaudited)(unaudited)(unaudited)(unaudited)
Expressed in thousands of U.S. dollars                
Net cash provided by operating activities $24,176  $20,034  $50,237  $54,144 
Net (decrease)/ increase in operating assets  (5,054)  (677)  16,905   4,455 
Net decrease/ (increase) in operating liabilities  8,774   20,666   (1,415)  14,646 
Net interest cost  18,033   18,808   36,504   36,742 
Amortization of deferred finance cost  (822)  (1,263)  (1,864)  (1,993)
Earnings in affiliates, net of dividends received  343   (2,279)  833   1,159 
Stock based compensation  (264)  (662)  (528)  (1,318)
Gain on sale of vessels     5,771   2,282   5,771 
EBITDA  45,186   60,398   102,954   113,606 
Stock based compensation  264   662   528   1,318 
Gain on sale of vessels     (5,771)  (2,282)  (5,771)
Adjusted EBITDA $45,450  $55,289  $101,200  $109,153 
                 
                 
  Three Month  Three Month  Six Month  Six Month 
PeriodPeriodPeriodPeriod
EndedEndedEndedEnded
June 30,June 30,June 30,June 30,
2016201520162015
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Net cash provided by operating activities $24,176  $20,034  $50,237  $54,144 
Net cash provided by investing activities $1,935  $61,902  $17,027  $34,469 
Net cash used in financing activities $(21,216) $(65,742) $(52,533) $(69,309)
                 

Disclosure of Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA 

EBITDA for the three and six months ended June 30, 2016 in this document represents net income plus interest and finance costs plus depreciation and amortization and income taxes less interest income.

Adjusted EBITDA for the three and six months ended June 30, 2016 in this document represents, net income plus interest expense and finance cost, plus depreciation and amortization less interest income, unless otherwise stated and excludes certain items as described under “Financial Highlights.”

EBITDA and Adjusted EBITDA represent net income before interest and finance cost, before depreciation and amortization, income taxes, gain on sale of vessel and stock-based compensation. We use EBITDA and Adjusted EBITDA as liquidity measures and reconcile Adjusted EBITDA to net cash provided by/ (used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA and Adjusted EBITDA in this document are 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 cost and other related expenses; (v) provision for losses on accounts receivable; (vi) equity in net earnings of affiliated companies, net of dividends received; (vii) payments for dry dock and special survey costs; (viii) gain/(loss) on sale of assets/subsidiaries; and (ix) impairment charges. Navios Acquisition believes that EBITDA and Adjusted EBITDA are the basis upon which liquidity can be assessed and present useful information to investors regarding Navios Acquisition’s ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Acquisition 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 analytical tools, and should not be considered in isolation or as a substitute for the analysis of Navios Acquisition’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 Acquisition’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.

      
     EXHIBIT III
VesselsTypeYear Built/Delivery  DWT
Date  
Owned Vessels      
Nave Constellation(1)Chemical Tanker2013   45,281
Nave Universe(1)Chemical Tanker2013   45,513
Nave PolarisChemical Tanker2011   25,145
Nave CosmosChemical Tanker2010   25,130
Nave Velocity MR2 Product Tanker2015  49,999
Nave Sextans MR2 Product Tanker2015  49,999
Nave PyxisMR2 Product Tanker2014  49,998
Nave LuminosityMR2 Product Tanker2014  49,999
Nave JupiterMR2 Product Tanker2014   49,999
BougainvilleMR2 Product Tanker2013   50,626
Nave AlderaminMR2 Product Tanker2013   49,998
Nave BellatrixMR2 Product Tanker2013   49,999
Nave CapellaMR2 Product Tanker2013   49,995
Nave OrionMR2 Product Tanker2013   49,999
Nave TitanMR2 Product Tanker2013   49,999
Nave AquilaMR2 Product Tanker2012   49,991
Nave AtriaMR2 Product Tanker2012   49,992
Nave OrbitMR2 Product Tanker2009   50,470
Nave EquatorMR2 Product Tanker2009   50,542
Nave EquinoxMR2 Product Tanker2007   50,922
Nave PulsarMR2 Product Tanker2007   50,922
Nave DoradoMR2 Product Tanker2005   47,999
Nave AtroposLR1 Product Tanker2013   74,695
Nave RigelLR1 Product Tanker2013   74,673
Nave CassiopeiaLR1 Product Tanker2012   74,711
Nave CetusLR1 Product Tanker2012   74,581
Nave EstellaLR1 Product Tanker2012   75,000
Nave AndromedaLR1 Product Tanker2011   75,000
Nave AriadneLR1 Product Tanker2007   74,671
Nave CieloLR1 Product Tanker2007   74,671
Nave Buena SuerteVLCC2011   297,491
Nave QuasarVLCC2010   297,376
Nave SynergyVLCC2010  299,973
Nave GalacticVLCC2009   297,168
Nave SphericalVLCC2009   297,188
Nave PhotonVLCC2008   297,395
Nave NeutrinoVLCC2003   298,287
Nave ElectronVLCC2002   305,178

(1) Vessel is expected to be sold in the second half of 2016, following the completion of its chartering commitments.


            

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