(Expressed in thousands of U.S. dollars)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 1: DESCRIPTION OF BUSINESS
Navios
Maritime Holdings Inc. (Navios Holdings or the Company) (NYSE:NM) is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities, including iron
ore, coal and grain.
Navios Logistics
Navios South American Logistics Inc. (Navios Logistics), a consolidated subsidiary of the Company, is one of the largest
logistics companies in the Hidrovia region of South America, focusing on the Hidrovia river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics is focused on
providing its customers integrated transportation, storage and related services through its port facilities, its large, versatile fleet of dry and liquid cargo barges and its product tankers. Navios Logistics serves the needs of a number of growing
South American industries, including mineral and grain commodity providers as well as users of refined petroleum products. As of December 31, 2016, Navios Holdings owns 63.8% of Navios Logistics.
Navios Partners
Navios Maritime Partners
L.P. (Navios Partners) (NYSE:NMM) is an international owner and operator of dry cargo vessels and is engaged in seaborne transportation services of a wide range of dry cargo commodities including iron ore, coal, grain, fertilizer and
also containers, chartering its vessels under medium to long-term charters.
As of December 31, 2016, Navios Holdings owned a 20.0%
interest in Navios Partners, including a 2.0% general partner interest.
Navios Acquisition
Navios Maritime Acquisition Corporation (Navios Acquisition) (NYSE: NNA), an affiliate of the Company, is an owner and operator of
tanker vessels focusing in the transportation of petroleum products (clean and dirty) and bulk liquid chemicals.
As of December 31,
2016, Navios Holdings ownership of the outstanding voting stock of Navios Acquisition was 43.4% and its economic interest was 46.1%.
Navios
Midstream
Navios Maritime Midstream Partners L.P. (Navios Midstream) (NYSE: NAP) is a publicly traded master limited
partnership which owns and operates crude oil tankers under long-term employment contracts.
As of December 31, 2016, Navios Holdings
owned no direct equity interest in Navios Midstream.
Navios Europe I
On October 9, 2013, Navios Holdings, Navios Acquisition and Navios Partners established Navios Europe Inc. (Navios Europe I)
and had economic interest of 47.5%, 47.5% and 5.0%, respectively. Navios Europe I is engaged in the marine transportation industry through the ownership of five tanker and five container vessels. Effective November 2014, Navios Holdings, Navios
Acquisition and Navios Partners have voting interest of 50%, 50% and 0%, respectively.
Navios Europe II
On February 18, 2015, Navios Holdings, Navios Acquisition and Navios Partners established Navios Europe (II) Inc. (Navios
Europe II) and had economic interests of 47.5%, 47.5% and 5.0%, respectively and voting interests of 50%, 50% and 0%, respectively. Navios Europe II is engaged in the marine transportation industry through the ownership of seven dry bulkers
and seven container vessels.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(a)
|
Basis of presentation:
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
|
F-8
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(b)
|
Principles of consolidation:
The accompanying consolidated financial statements include the accounts of Navios Holdings, a Marshall Islands corporation, and both its majority and wholly-owned subsidiaries.
All significant intercompany balances and transactions have been eliminated in the consolidated statements.
|
The Company also
consolidates entities that are determined to be variable interest entities (VIE) as defined in the accounting guidance, if the Company determines that it is the primary beneficiary. A VIE is defined as a legal entity where either
(i) equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entitys residual risks and rewards, or (ii) the equity interest holders
have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (iii) the voting rights of some investors are not proportional to their obligations to absorb
the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entitys activities either involve or are conducted on behalf of an investor that has
disproportionately few voting rights.
Based on internal forecasts and projections that take into account reasonably possible changes in
our trading performance, management believes that the Company has adequate financial resources to continue in operation and meet its financial commitments, including but not limited to capital expenditures and debt service obligations, for a period
of at least twelve months from the date of issuance of these consolidated financial statements. Accordingly, the Company continues to adopt the going concern basis in preparing its financial statements.
Subsidiaries:
Subsidiaries are those entities in which the Company has an interest of more than one half of the voting rights or
otherwise has power to govern the financial and operating policies of the entity. The acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets
given up, shares issued or liabilities undertaken at the date of acquisition. The excess of the cost of acquisition over the fair value of the net assets acquired and liabilities assumed is recorded as goodwill. All subsidiaries included in the
consolidated financial statements are 100% owned, except for Navios Logistics, which is 63.8% owned by Navios Holdings and Navios Asia LLC (Navios Asia) and its wholly-owned subsidiaries, which were 51.0% owned by Navios Holdings, until
May 2014, when Navios Holdings became the sole shareholder.
Investments in Affiliates:
Affiliates are entities over which
the Company generally has between 20% and 50% of the voting rights, or over which the Company has significant influence, but it does not exercise control. Investments in these entities are accounted for under the equity method of accounting. Under
this method, the Company records an investment in the stock of an affiliate at cost, and adjusts the carrying amount for its share of the earnings or losses of the affiliate subsequent to the date of investment and reports the recognized earnings or
losses in income. Dividends received from an affiliate reduce the carrying amount of the investment. The Company recognizes gains and losses in earnings for the issuance of shares by its affiliates, provided that the issuance of shares qualifies as
a sale of shares. When the Companys share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the
affiliate.
Affiliates included in the financial statements accounted for under the equity method
In the consolidated financial statements of Navios Holdings, the following entities are included as affiliates and are accounted for under the
equity method for such periods: (i) Navios Partners and its subsidiaries (ownership interest as of December 31, 2016 was 20.0%, which includes a 2.0% general partner interest); (ii) Navios Acquisition and its subsidiaries (economic
interest as of December 31, 2016 was 46.1%); (iii) Acropolis Chartering and Shipping Inc. (Acropolis) (economic interest as of December 31, 2016 was 35.0%), (iv) Navios Europe I and its subsidiaries (economic interest as of
December 31, 2016 was 47.5%); and (v) Navios Europe II and its subsidiaries (economic interest as of December 31, 2016 was 47.5%).
F-9
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Subsidiaries Included in the Consolidation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
|
Company Name
|
|
Nature
|
|
Ownership
Interest
|
|
|
Country of
Incorporation
|
|
2016
|
|
2015
|
|
2014
|
Navios Maritime Holdings Inc.
|
|
Holding Company
|
|
|
|
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Corporation
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios International Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navimax Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Handybulk Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Hestia Shipping Ltd.
|
|
Operating Company
|
|
|
100
|
%
|
|
Malta
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Anemos Maritime Holdings Inc.
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Shipmanagement Inc.
|
|
Management Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
NAV Holdings Limited
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Malta
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Kleimar N.V.
|
|
Operating Company/
Vessel Owning Company/
Management Company
|
|
|
100
|
%
|
|
Belgium
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Kleimar Ltd.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Bulkinvest S.A.
|
|
Operating Company
|
|
|
100
|
%
|
|
Luxembourg
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Primavera Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Ginger Services Co.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Aquis Marine Corp.
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Tankers Management Inc.
|
|
Management Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Astra Maritime Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Achilles Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Apollon Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Herakles Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Hios Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Ionian Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Kypros Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Meridian Shipping Enterprises Inc.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Mercator Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Arc Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Horizon Shipping Enterprises Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Magellan Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Aegean Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Star Maritime Enterprises Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Corsair Shipping Ltd.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Rowboat Marine Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Beaufiks Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Nostos Shipmanagement Corp.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Portorosa Marine Corp.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Shikhar Ventures S.A.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Liberia
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Sizzling Ventures Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Liberia
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Rheia Associates Co.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Taharqa Spirit Corp.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Rumer Holding Ltd.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Pharos Navigation S.A.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Pueblo Holdings Ltd.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Quena Shipmanagement Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Aramis Navigation Inc.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
White Narcissus Marine S.A.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Panama
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios GP L.L.C.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Red Rose Shipping Corp.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
F-10
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
|
Company Name
|
|
Nature
|
|
Ownership
Interest
|
|
|
Country of
Incorporation
|
|
2016
|
|
2015
|
|
2014
|
Highbird Management Inc.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Ducale Marine Inc.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Vector Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Faith Marine Ltd.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Liberia
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Maritime Finance (US) Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Delaware
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Maritime Finance II (US) Inc.
|
|
Operating Company
|
|
|
100
|
%
|
|
Delaware
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Tulsi Shipmanagement Co.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Cinthara Shipping Ltd.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Rawlin Services Company
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Mauve International S.A.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Serenity Shipping Enterprises Inc.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Mandora Shipping Ltd
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Solange Shipping Ltd.
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Diesis Ship Management Ltd.
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Holdings Europe Finance Inc.
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
Navios Asia LLC
|
|
Sub-Holding
Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
5/19 - 12/31
|
Iris Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
5/19 - 12/31
|
Jasmine Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
5/19 - 12/31
|
Emery Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
6/4 - 12/31
|
Lavender Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
1/1 - 12/31
|
|
11/24 - 12/31
|
Esmeralda Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/12 - 12/31
|
|
|
|
|
Triangle Shipping Corporation
|
|
Vessel Owning Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/12 - 12/31
|
|
|
|
|
Roselite Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
10/9 - 12/31
|
|
|
Smaltite Shipping Corporation
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
1/1 - 12/31
|
|
10/9 - 12/31
|
|
|
Motiva Trading Ltd
|
|
Operating Company
|
|
|
100
|
%
|
|
Marshall Is.
|
|
11/2 - 12/31
|
|
|
|
|
(c)
|
Use of Estimates:
The preparation of consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an
on-going
basis,
management evaluates the estimates and judgments, including those related to uncompleted voyages, future drydock dates, the assessment of other-than-temporary impairment related to the carrying value of investments in affiliates, the selection of
useful lives for tangible assets, expected future cash flows from long-lived assets to support impairment tests, impairment test for goodwill, provisions necessary for accounts receivables and demurrages, provisions for legal disputes, pension
benefits, contingencies and guarantees. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions and/or conditions.
|
(d)
|
Cash and Cash Equivalents:
Cash and cash equivalents consist of cash on hand, deposits held on call with banks, and other short-term liquid investments with original maturities of three months or less.
|
(e)
|
Restricted Cash:
As of December 31, 2016 and 2015, restricted cash included $1,896 and $1,890, respectively, which related to amounts held in a retention account in order to service debt and interest
payments, and $0 and $11,000, respectively, which related to additional security, as required by certain of Navios Holdings credit facilities. Also included in restricted cash as of December 31, 2016 and 2015 are amounts held as security
in the form of letters of guarantee or letters of credit totaling $590 for both reporting periods. As of December 31, 2016, restricted cash also included $2,900 which related to amounts held in a Navios Logistics retention as part of the
Vale International S.A. (Vale) arbitration in New York. See also Note 13.
|
(f)
|
Insurance Claims:
Insurance claims at each balance sheet date consist of claims submitted and/or claims in the process of compilation or submission (claims pending). They are recorded on an accrual basis
and represent the claimable expenses, net of applicable deductibles, incurred through December 31 of each reporting period, which are probable to be recovered from insurance companies. Any remaining costs to complete the claims are included in
accrued liabilities. The classification of insurance claims into current and
non-current
assets is based on managements expectations as to their collection dates.
|
(g)
|
Inventories:
Inventories, which are comprised of lubricants, bunkers (when applicable) and stock provisions on board of the vessels, as well as petroleum products held by Navios Logistics, are valued at
cost as determined on the
first-in,
first-out
basis.
|
F-11
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(h)
|
Vessels, Port Terminals, Tanker Vessels, Barges, Pushboats and Other Fixed Assets, net:
Vessels, port terminals, tanker vessels, barges, pushboats and other fixed assets acquired as parts of business
combinations are recorded at fair value on the date of acquisition, and if acquired as an asset acquisition, are recorded at cost (including transaction costs). Vessels constructed by the company would be stated at historical cost, which consists of
the contract price, capitalized interest and any material expenses incurred upon acquisition (improvements and delivery expenses). Subsequent expenditures for major improvements and upgrades are capitalized, provided they appreciably extend the
life, increase the earnings capability or improve the efficiency or safety of the vessels. The cost and related accumulated depreciation of assets retired or sold are removed from the accounts at the time of sale or retirement and any gain or loss
is included in the accompanying consolidated statements of comprehensive (loss)/income.
|
Expenditures for routine maintenance
and repairs are expensed as incurred.
Depreciation is computed using the straight line method over the useful life of the vessels, port
terminals, tanker vessels, barges, push boats and other fixed assets, after considering the estimated residual value.
Annual depreciation
rates used, which approximate the useful life of the assets are:
|
|
|
Vessels
|
|
25 years
|
Port terminals
|
|
5 to 40 years
|
Tanker vessels, barges and push boats
|
|
15 to 45 years
|
Furniture, fixtures and equipment
|
|
3 to 10 years
|
Computer equipment and software
|
|
5 years
|
Leasehold improvements
|
|
shorter of lease term or 6 years
|
Management estimates the residual values of the Companys dry bulk vessels based on a scrap value cost of
steel times the weight of the ship noted in lightweight tons (LWT). Residual values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revisions of residual values affect the
depreciable amount of the vessels and the depreciation expense in the period of the revision and future periods. Management estimates the residual values of the Companys vessels based on a scrap rate of $340 per LWT after considering current
market trends for scrap rates and
ten-year
average historical scrap rates of the residual values of the Companys vessels.
Management estimates the useful life of its vessels to be 25 years from the vessels original construction. However, when regulations
place limitations on the ability of a vessel to trade on a worldwide basis, its useful life is
re-estimated
to end at the date such regulations become effective. An increase in the useful life of a vessel or
in its residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of a vessel or in its residual value would have the effect of increasing the annual
depreciation charge.
(i)
|
Deposits for Vessels, Port Terminals and Other Fixed Assets:
This represents amounts paid by the Company in accordance with the terms of the purchase agreements for the construction of vessels, port
terminals and other long-lived fixed assets. Deposits for vessels, port terminals and other fixed assets also include
pre-delivery
expenses.
Pre-delivery
expenses
represent any direct costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Interest costs incurred during the construction (until the asset is substantially complete
and ready for its intended use) are capitalized. Capitalized interest for the years ended December 31, 2016, 2015 and 2014 amounted to $5,843, $5,154 and $2,334, respectively.
|
(j)
|
Assets Held for Sale:
It is the Companys policy to dispose of vessels and other fixed assets when suitable opportunities occur and not necessarily to keep them until the end of their useful life. The
Company classifies assets and disposal groups as being held for sale when the following criteria are met: management has committed to a plan to sell the asset (disposal group); the asset (disposal group) is available for immediate sale in its
present condition; an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset (disposal
group) is expected to qualify for recognition as a completed sale within one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete
the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long-lived assets or disposal groups classified as held for sale are measured at the lower of their carrying amount or fair
value less cost to sell. These assets are not depreciated once they meet the criteria to be held for sale. No assets were classified as held for sale in any of the periods presented.
|
F-12
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(k)
|
Impairment of Long Lived Assets:
Vessels, other fixed assets and other long-lived assets held and used by Navios Holdings are reviewed periodically for potential impairment whenever events or changes in
circumstances indicate that the carrying amount of a particular asset may not be fully recoverable. Navios Holdings management evaluates the carrying amounts and periods over which long-lived assets are depreciated to determine if events or
changes in circumstances have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, certain indicators of potential impairment are reviewed, such as
undiscounted projected operating cash flows, vessel sales and purchases, business plans and overall market conditions.
|
Undiscounted projected net operating cash flows are determined for each asset group and compared to the carrying value of the vessel, the
unamortized portion of deferred drydock and special survey costs related to the vessel and the related carrying value of the intangible assets with respect to the time charter agreement attached to that vessel or the carrying value of deposits for
newbuildings. Within the shipping industry, vessels are customarily bought and sold with a charter attached. The value of the charter may be favorable or unfavorable when comparing the charter rate to then-current market rates. The loss recognized
either on impairment (or on disposition) will reflect the excess of carrying value over fair value (selling price) for the vessel asset group.
During the fourth quarter of fiscal year 2016, management concluded that events occurred and circumstances had changed, which indicated that
potential impairment of Navios Holdings long-lived assets might exist. These indicators included continued deterioration in the spot market, and the related impact of the current dry bulk sector has on managements expectation for future
revenues. As a result, an impairment assessment of long-lived assets (step one) was performed.
The Company determined undiscounted
projected net operating cash flows for each vessel and compared it to the vessels carrying value together with the carrying value of deferred drydock and special survey costs related to the vessel and the carrying value of the related
intangible assets, if applicable. The significant factors and assumptions used in the undiscounted projected net operating cash flow analysis included: determining the projected net operating cash flows by considering the charter revenues from
existing time charters for the fixed fleet days (the Companys remaining charter agreement rates) and an estimated daily time charter equivalent for the unfixed days (based on a combination of
one-year
average historical time charter rates and
10-year
average historical
one-year
time charter rates, adjusted for outliers) over the remaining economic life of each vessel,
net of brokerage and address commissions excluding days of scheduled
off-hires,
running cost based on current year actuals, assuming an annual increase of 0.8% after 2017 and a utilization rate of 99.2% based
on the fleets historical performance.
The assessment concluded that step two of the impairment analysis was not required and no
impairment of vessels and the related intangible assets existed as of December 31, 2016, as the undiscounted projected net operating cash flows exceeded the carrying value.
In the event that impairment would occur, the fair value of the related asset would be determined and an impairment charge would be recorded to
operations calculated by comparing the assets carrying value to its fair value. Fair value is typically estimated primarily through the use of third-party valuations performed on an individual vessel basis.
Although management believes the underlying assumptions supporting this assessment are reasonable, if the charter rate trends and the length of
the market downturn vary significantly from our forecasts, Navios Holdings may be exposed to material impairment charges in the future.
No
impairment loss was recognized for any of the periods presented.
(l)
|
Deferred Drydock and Special Survey Costs:
The Companys vessels, barges and push boats are subject to regularly scheduled drydocking and special surveys which are carried out every 30 and 60 months,
respectively, for ocean-going vessels, and every 84 months for push boats and barges, to coincide with the renewal of the related certificates issued by the classification societies, unless a further extension is obtained in rare cases and under
certain conditions. The costs of drydocking and special surveys are deferred and amortized over the above periods or to the next drydocking or special survey date if such date has been determined. Unamortized drydocking or special survey costs of
vessels, barges and push boats sold are
written-off
to income in the year the vessel, barge or push boat is sold.
|
Costs capitalized as part of the drydocking or special survey consist principally of the actual costs incurred at the yard, and expenses
relating to spare parts, paints, lubricants and services incurred solely during the drydocking or special survey period. For each of the years ended December 31, 2016, 2015 and 2014, the amortization of deferred drydock and special survey costs
was $13,768, $13,340, and $12,263, respectively.
(m)
|
Deferred Financing Costs:
Deferred financing costs include fees, commissions and legal expenses associated with obtaining or modifying loan facilities. Deferred financing costs are presented as a deduction
from the corresponding liability. These costs are amortized over the life of the related debt using the effective interest rate method, and are included in interest expense. Amortization and
write-off
of
deferred financing costs for each of the years ended December 31, 2016, 2015 and 2014 were $5,653, $4,524 and $4,061, respectively. See also Note 17.
|
F-13
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(n)
|
Goodwill and Other Intangibles
|
(i) Goodwill:
Goodwill is tested
for impairment at the reporting unit level at least annually.
The Company evaluates impairment of goodwill using a
two-step
process. First, the aggregate fair value of the reporting unit is compared to its carrying amount, including goodwill (step one). The Company determines the fair value of the reporting unit based on a
combination of the income approach (i.e. discounted cash flows) and market approach (i.e. comparative market multiples) and believes that the combination of these two approaches is the best indicator of fair value for its individual reporting units.
If the fair value of a reporting unit exceeds the carrying amount, no impairment exists. If the carrying amount of the reporting unit exceeds the fair value, then the Company must perform the second step (step two) to determine the implied fair
value of the reporting units goodwill and compare it with its carrying amount. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit to all the assets and liabilities of that reporting unit, as if
the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price. If the carrying amount of the goodwill exceeds the implied fair value, then goodwill impairment is recognized by writing
the goodwill down to its implied fair value.
As of December 31, 2016, the Company performed its impairments test for its reporting
units within: the Dry Bulk Vessel Operations and the Logistics Business. During the fourth quarter 2016, the overall shipping market continued to experience significant deteriorating market conditions, especially in the dry bulk sector with sharp
declines in freight rates, charter rates and vessel values. Additionally, the Companys market capitalization continued to deteriorate to levels well below the carrying value of its total net assets.
As of December 31, 2016, the Company performed step one of the impairment test for the Dry Bulk Vessel Operations reporting unit, which is
allocated goodwill of $56,240. Step one impairment test revealed that the fair value of the Dry Bulk Vessel Operations reporting unit exceeded the carrying amount of its net assets. Accordingly, no step two analysis was required.
The fair value of the Dry Bulk Vessel Operations reporting unit was estimated using a combination of income and market approaches. For the
income approach, the expected present value of future cash flows used judgments and assumptions that management believes were appropriate in the circumstances. The significant factors and assumptions the Company used in its discounted cash flow
analysis included: EBITDA, the discount rate used to calculate the present value of future cash flows and future capital expenditures. EBITDA assumptions included revenue assumptions, general and administrative expense growth assumptions, and direct
vessel expense growth assumptions. The future cash flows were determined by considering the charter revenues from existing time charters for the fixed fleet days (the Companys remaining charter agreement rates) and an estimated daily time
charter equivalent for the
non-fixed
days (based on a combination of
one-year
average historical time charter rates and the
10-year
average historical
one-year
time charter rates adjusted for outliers), which the Company believes is an objective approach for forecasting charter rates over an
extended time period for long-lived assets. In addition, a weighted average cost of capital (WACC) was used to discount future estimated cash flows to their present values. The WACC was based on externally observable data considering
market participants and the Companys cost of equity and debt, optimal capital structure and risk factors specific to the Company. The market approach estimated the fair value of the Companys business based on comparable
publicly-traded companies in its industry. In assessing the fair value, the Company utilized the results of the valuations and considered the range of fair values determined under all methods which indicated that the fair value exceeded the carrying
value of net assets.
As of December 31, 2016, the Company performed step one of the impairment test for the Logistics Business, which
is allocated goodwill of $104,096. Step one of the impairment test used the income method and revealed that the fair value exceeded the carrying amount of its net assets. Accordingly, no step two analysis was required. The future cash flows from the
Logistics Business were determined principally by combining revenues from existing contracts and estimated revenues based on the historical performance of the segment, including utilization rates and actual storage capacity. The Logistics Business
has not been affected by the same deteriorating industry and market conditions as experienced in the Dry Bulk Vessel Operations reporting unit. In addition, the cash flows of the long-lived assets in the Logistics Business reporting unit have not
experienced a significant decline.
No impairment loss was recognized for any of the periods presented.
(ii)
Intangibles Other Than Goodwill:
Navios Holdings intangible assets and liabilities consist of favorable
lease terms, unfavorable lease terms, customer relationships, trade name and port terminal operating rights. The fair value of the trade name was determined based on the relief from royalty method which values the trade name based on the
estimated amount that a company would have to pay in an arms length transaction to use that trade name. The asset is being amortized under the straight line method over 32 years. Navios Logistics trade name is being amortized
under the straight line method over 10 years.
The fair value of customer relationships of Navios Logistics was determined based on
the excess earnings method, which relies upon the future cash flow generating ability of the asset. The asset is amortized under the straight line method.
Other intangibles that are being amortized, such as customer relationships and port terminal operating rights, would be considered impaired if
their carrying value could not be recovered from the future undiscounted cash flows associated with the asset.
F-14
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
When intangible assets or liabilities associated with the acquisition of a vessel are
identified, they are recorded at fair value. Fair value is determined by reference to market data and the discounted amount of expected future cash flows. Where charter rates are higher than market charter rates, an asset is recorded, being the
difference between the acquired charter rate and the market charter rate for an equivalent vessel. Where charter rates are less than market charter rates, a liability is recorded, being the difference between the assumed charter rate and the market
charter rate for an equivalent vessel. The determination of the fair value of acquired assets and assumed liabilities requires the Company to make significant assumptions and estimates of many variables including market charter rates, expected
future charter rates, the level of utilization of the Companys vessels and the Companys weighted average cost of capital. The use of different assumptions could result in a material change in the fair value of these items, which could
have a material impact on the Companys financial position and results of operations.
The amortizable value of favorable and
unfavorable leases is amortized over the remaining life of the lease term and the amortization expense is included in the consolidated statements of comprehensive (loss)/income in the Depreciation and amortization line item.
The amortizable value of favorable leases would be considered impaired if its fair market value could not be recovered from the future
undiscounted cash flows associated with the asset. Vessel purchase options that have not been exercised, which are included in favorable lease terms, are not amortized and would be considered impaired if the carrying value of an option, when added
to the option price of the vessel, exceeded the fair value of the vessel. No impairment loss was recognized for any the periods presented.
Vessel purchase options that are included in favorable leases are not amortized and when the purchase option is exercised, the asset is
capitalized as part of the cost of the vessel and depreciated over the remaining useful life of the vessel and if not exercised, the intangible asset is written off. Vessel purchase options that are included in unfavorable lease terms are not
amortized and when the purchase option is exercised by the charterer and the underlying vessel is sold, it will be recorded as part of gain/loss on sale of the assets. If the option is not exercised at the expiration date it is
written-off
in the consolidated statements of comprehensive (loss)/income.
The weighted average
amortization periods for intangibles are:
|
|
|
|
|
Intangible assets/liabilities
|
|
Years
|
|
Trade name
|
|
|
21
|
|
Favorable lease terms
|
|
|
12
|
|
Port terminal operating rights
|
|
|
20-45
|
|
Customer relationships
|
|
|
20
|
|
See also Note 7.
(o)
|
Foreign Currency Translation:
The Companys functional and reporting currency is the U.S. dollar. The Company engages in worldwide commerce with a variety of entities. Although its operations may
expose it to certain levels of foreign currency risk, its transactions are predominantly U.S. dollar denominated. The Companys subsidiaries in Uruguay, Argentina, Brazil and Paraguay transact a nominal amount of their operations in Uruguayan
pesos, Argentinean pesos, Brazilian reales and Paraguayan guaranies, whereas the Companys wholly-owned vessel subsidiaries and the vessel management subsidiaries transact a nominal amount of their operations in Euros; however, all of the
subsidiaries primary cash flows are U.S. dollar denominated. The financial statements of the foreign operations are translated using the exchange rate at the balance sheet date except for property and equipment and equity, which are translated
at historical rates. Transactions in currencies other than the functional currency are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction
denominated in a foreign currency is consummated and the date on which it is either settled or translated, are recognized in the statements of comprehensive (loss)/income. The foreign currency gains/(losses) recognized under the caption Other
income in the consolidated statements of comprehensive (loss)/income for each of the years ended December 31, 2016, 2015 and 2014, were $1,600, $1,646 and $1,945, respectively.
|
(p)
|
Provisions:
The Company, in the ordinary course of business, is subject to various claims, suits and complaints. Management, in consultation with internal and external advisers, will provide for a
contingent loss in the financial statements if the contingency had occurred at the date of the financial statements and the likelihood of loss was probable and the amount can be reasonably estimated. If the Company has determined that the reasonable
estimate of the loss is a range and there is no best estimate within the range, the Company will provide for the lower amount within the range. See also Note 13.
|
The Company participates in Protection and Indemnity (P&I) insurance plans provided by mutual insurance associations known as P&I
clubs. Under the terms of these plans, participants may be required to pay additional premiums (supplementary calls) to fund operating deficits incurred by the clubs (back calls). Obligations for back calls are accrued annually based on
information provided by the P&I clubs.
Provisions for estimated losses on vessels under time charter are provided for in the period in
which such losses are determined. As of December 31, 2016 and 2015, the balance for provision for voyages was $3,129 and $2,157, respectively.
F-15
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(q)
|
Segment Reporting:
Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance. Based on the Companys methods of internal reporting and management structure, the Company currently has two reportable segments: the Dry Bulk Vessel Operations segment and the
Logistics Business segment.
|
(r)
|
Revenue and Expense Recognition:
|
Revenue Recognition:
Revenue is recorded
when services are rendered, the Company has a signed charter agreement or other evidence of an arrangement, the price is fixed or determinable, and collection is reasonably assured. The Company generates revenue from transportation of cargo, time
charter of vessels, port terminal operations, bareboat charters, contracts of affreightment/voyage contracts, demurrages and contracts covering dry or liquid port terminal operations.
Voyage revenues for the transportation of cargo are recognized ratably over the estimated relative transit time of each voyage. A voyage is
deemed to commence when a vessel is available for loading and is deemed to end upon the completion of the discharge of the current cargo. Estimated losses on voyages are provided for in full at the time such losses become evident. Under a voyage
charter, the Company agrees to provide a vessel for the transportation of specific goods between specific ports in return for payment of an agreed upon freight rate per ton of cargo.
Revenues are recorded net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed
percentage of the agreed upon charter rate. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer,
these commissions are presented as a reduction of revenue.
Revenue from time chartering and bareboat chartering is earned and recognized
on a daily basis as the service is delivered. Revenue from contracts of affreightment (COA)/voyage contracts relating to our barges is recognized based upon the percentage of voyage completion. A voyage is deemed to commence upon the
departure of the barge after discharge under the previous voyage and is deemed to end upon the completion of discharge under the current voyage. The percentage of voyage completion is based on the days traveled as of the balance sheet date divided
by the total days expected for the voyage. The position of the barge at the balance sheet date is determined by the days traveled as of the balance sheet date over the total voyage of the pushboat having the barge in tow. Revenue arising from
contracts that provide our customers with continuous access to convoy capacity is recognized ratably over the period of the contracts.
Demurrage income represents payments made by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in
the voyage charter and is recognized as it is earned.
Revenues arising from contracts that provide our customers with continuous access to
convoy capacity are recognized ratably over the period of the contracts.
Profit-sharing revenues are calculated at an agreed percentage of
the excess of the charterers average daily income (calculated on a quarterly or half-yearly basis) over an agreed amount and accounted for on an accrual basis based on provisional amounts and for those contracts that provisional accruals
cannot be made due to the nature of the profit sharing elements, these are accounted for on the actual cash settlement.
Revenues from time
chartering of vessels are accounted for as operating leases and are thus recognized on a straight line basis as the average revenue over the rental periods of such charter agreements as service is performed, except for loss generating time charters,
in which case the loss is recognized in the period when such loss is determined. A time charter involves placing a vessel at the charterers disposal for a period of time during which the charterer uses the vessel in return for the payment of a
specified daily hire rate. Short period charters for less than three months are referred to as spot-charters. Charters extending three months to a year are generally referred to as medium-term charters. All other charters are considered long-term.
Under time charters, operating costs such as for crews, maintenance and insurance are typically paid by the owner of the vessel.
For
vessels operating in pooling arrangements, the Company earns a portion of total revenues generated by the pool, net of expenses incurred by the pool. The amount allocated to each pool participant vessel, including the Companys vessels, is
determined in accordance with an agreed-upon formula, which is determined by margins awarded to each vessel in the pool based on the vessels age, design and other performance characteristics. Revenue under pooling arrangements is accounted for
on the accrual basis and is recognized when an agreement with the pool exists, price is fixed, service is provided and the collectability is reasonably assured. Revenue for vessels operating in pooling arrangements amounted to $15,115, $1,825 and
$0, for the years ended December 31, 2016, 2015 and 2014, respectively. The allocation of such net revenue may be subject to future adjustments by the pool, however, such changes are not expected to be material.
Revenues from port terminal operations consist of an agreed flat fee per ton and cover the services performed to unload barges (or trucks),
transfer the product into silos for temporary storage and then loading the ocean-going vessels. Revenues are recognized upon completion of loading the ocean-going vessels. Additionally, fees are charged for vessel dockage and for storage time in
excess of contractually specified terms. Dockage revenues are recognized ratably up to completion of loading. Storage fees are assessed and recognized when the product remains in the silo storage beyond the contractually agreed time allowed. Storage
fee revenue is recognized ratably over the storage period and ends when the product is loaded onto the ocean-going vessel.
F-16
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Revenues from liquid port terminal operations consist mainly of sales of petroleum products
in the Paraguayan market. Additionally, revenues consist of an agreed flat fee per cubic meter to cover the services performed to unload barges, transfer the products into the tanks for temporary storage and then loading the trucks. Revenues are
recognized upon completion of loading the trucks. Additionally, fees are charged for storage time in excess of contractually specified terms. Storage fee revenue is recognized ratably over the storage period and ends when the product is loaded onto
the trucks.
Recovery of lost revenue under credit default insurance for charterers is accounted for as gain contingency and is recognized
when all contingencies are resolved. The amount of recovery of lost revenue is recorded within the caption Revenue and any amount recovered in excess of the lost revenue is recorded within the caption Other income.
Expenses related to our revenue-generating contracts are recognized as incurred.
Administrative fee revenue from affiliates:
Administrative fee revenue from affiliates consists of fees earned on the provision of
administrative services pursuant to administrative services agreements with our affiliates (Refer to Note 15). Administrative services include: bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical
services, banking and financial services, advisory services, client and investor relations and other general and administrative services. These revenues are recognized as the services are provided to affiliates.
The general and administrative expenses incurred on behalf of affiliates are determined based on a combination of actual expenses incurred on
behalf of the affiliates as well as a reasonable allocation of expenses that are not affiliate specific but incurred on behalf of all affiliates.
Forward Freight Agreements (FFAs):
Realized gains or losses from FFAs are recognized monthly concurrent with cash
settlements. In addition, FFAs are
marked-to-market
quarterly to determine the fair values which generate unrealized gains or losses. Trading of FFAs could
lead to material fluctuations in the Companys reported results from operations on a period to period basis.
Deferred Income and
Cash Received In Advance:
Deferred voyage revenue primarily relates to cash received from charterers prior to it being earned. These amounts are recognized as revenue over the voyage or charter period.
Time Charter, Voyage and Logistics Business Expenses:
Time charter, voyage and logistics business expenses comprise all expenses related
to each particular voyage, including time charter hire paid and voyage freight paid, bunkers, port charges, canal tolls, cargo handling, agency fees and brokerage commissions. Also included in time charter, voyage and logistics business expenses are
charterers liability insurances, provision for losses on time charters and voyages in progress at
year-end,
direct port terminal expenses and other miscellaneous expenses.
Direct Vessel Expenses:
Direct vessel expenses consist of all expenses relating to the operation of vessels, including crewing, repairs
and maintenance, insurance, stores and lubricants and miscellaneous expenses such as communications and amortization of drydocking and special survey costs net of related party management fees.
Prepaid Voyage Costs:
Prepaid voyage costs relate to cash paid in advance for expenses associated with voyages. These amounts are
recognized as expenses over the voyage or charter period.
Pension and Retirement Obligations-Crew:
The
Companys ship-owning subsidiaries employ the crew on board under short-term contracts (usually up to nine months) and, accordingly, they are not liable for any pension or post-retirement benefits.
Provision for Employees Severance and Retirement Compensation:
The employees in the Companys office in Greece are protected
by Greek labor law. According to the law, the Company is required to pay retirement indemnities to employees upon dismissal or upon leaving with an entitlement to a full security retirement pension. The amount of compensation is based on the number
of years of service and the amount of remuneration at the date of dismissal or retirement up to a maximum of two years salary. If the employees remain in the employment of the Company until normal retirement age, they are entitled to
retirement compensation which is equal to 40% of the compensation amount that would be payable if they were dismissed at that time. The number of employees that will remain with the Company until retirement age is not known. The Company considers
this plan equivalent to a lump sum defined benefit pension plan and accounts for it under relevant guidance on employers accounting for pensions. The Company is required to annually value the statutory terminations indemnities liability.
Management obtains a valuation from independent actuaries to assist in the calculation of the benefits. The Company provides, in full, for the employees termination indemnities liability. This liability amounted to $1,127 and $952 at
December 31, 2016 and 2015, respectively.
U.S.
Retirement Savings Plan:
The Company sponsors a 401(k) retirement savings plan, which is categorized as a defined contribution plan. The plan is available to full time employees who meet the plans eligibility requirements. The plan permits
employees to make contributions up to 15% of their annual salary with the Company matching up to the first 6%. The Company makes monthly contributions (matching contributions) to the plan based on amounts contributed by employees. Subsequent to
making the matching contributions, the Company has no further obligations. The Company may make an additional discretionary contribution annually if such a contribution is authorized by the Board of Directors. The plan is administered by an
independent professional firm that specializes in providing such services. See also Note 12.
F-17
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Other Post-Retirement Obligations:
The Company has a legacy pension arrangement for
certain Bahamian, Uruguayan and former Navios Corporation employees. The entitlement to these benefits is only to these former employees. The expected costs of these benefits are accrued each year, using an accounting methodology similar to that for
defined benefit pension plans. These obligations are valued annually by independent actuaries.
Stock-Based Compensation:
In
December 2016, the Company authorized the grant of restricted share units and share appreciation rights. In December 2015 and 2014, the Company authorized the issuance of shares of restricted common stock, restricted stock units and stock options in
accordance with the Companys stock option plan for its employees, officers and directors. These awards of restricted share units, share appreciation rights, restricted common stock, restricted stock units and stock options are based on service
conditions only and vest over three years. In December 2014 and 2013, the Company also authorized the issuance of shares of restricted common stock, restricted stock units and stock options for its employees, officers and directors that vest upon
achievement of certain internal performance criteria including certain targets on operational performance and cost efficiency. See also Note 12.
The fair value of share appreciation rights and stock option grants is determined with reference to option pricing model and principally
adjusted Black-Scholes models. The fair value of restricted share units, restricted stock and restricted stock units is determined by reference to the quoted stock price on the date of grant. Compensation expense, net of estimated forfeitures, is
recognized based on a graded expense model over the vesting period. Compensation expense for the awards that vest upon achievement of the performance criteria is recognized when it is probable that the performance criteria will be met and are being
accounted for as equity.
(t)
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Financial Instruments:
Financial instruments carried on the balance sheet include cash and cash equivalents, restricted cash, trade receivables and payables, other receivables and other liabilities,
long-term debt, capital leases and
available-for-sale
securities. The particular recognition methods applicable to each class of financial instrument are disclosed in
the applicable significant policy description of each item, or included below as applicable.
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Financial Risk
Management:
The Companys activities expose it to a variety of financial risks including fluctuations in future freight rates, time charter hire rates, fuel prices and credit and interest rates risk. Risk management is carried out under
policies approved by executive management. Guidelines are established for overall risk management, as well as specific areas of operations.
Credit Risk:
The Company closely monitors its credit exposure to customers and counterparties for credit risk. The Company has policies
in place to ensure that it trades with customers and counterparties with an appropriate credit history.
Interest Rate Risk:
Any
differential to be paid or received on an interest rate swap agreement is recognized as a component of gain/loss on derivatives over the period of the agreement. Gains and losses on early termination of interest rate swaps are reflected in the
consolidated statements of comprehensive (loss)/income. The effective portion of changes in the fair value of interest rate swap agreements that are designated and qualify as cash flow hedges are recognized in equity.
Liquidity Risk:
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Company monitors cash balances appropriately to meet working capital needs.
Foreign Exchange Risk:
Foreign currency transactions are translated into the measurement currency at rates prevailing on the dates of
the relevant transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated
statements of comprehensive (loss)/income.
Accounting for Derivative Financial Instruments and Hedging Activities:
The Company may
enter into dry bulk shipping FFAs as economic hedges relating to identifiable ship and/or cargo positions and as economic hedges of transactions the Company expects to carry out in the normal course of its shipping business. By utilizing certain
derivative instruments, including dry bulk shipping FFAs, the Company manages the financial risk associated with fluctuating market conditions. In entering into these contracts, the Company has assumed the risks that might arise from the possible
inability of counterparties to perform in accordance with the terms of their contracts.
The Company may trade dry bulk shipping FFAs which
are cleared through LCH, the London clearing house. LCH calls for both base and margin collateral, which are funded by Navios Holdings, and which in turn substantially eliminate counterparty risk. Certain portions of these collateral funds may be
restricted at any given time as determined by LCH.
At the end of each calendar quarter, the fair value of dry bulk shipping FFAs traded
over-the-counter
are determined from an index published in London, United Kingdom and the fair value of those FFAs traded with LCH is determined from the LCH valuations.
The Company records all of its derivative financial instruments and hedges as economic hedges.
F-18
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The Company classifies cash flows related to derivative financial instruments within cash
provided by operating activities in the consolidated statements of cash flows.
(u)
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(Loss)/Earnings Per Share:
Basic (losses)/earnings per share are computed by dividing net (loss)/income attributable to Navios Holdings common stockholders by the weighted average number of shares of
common stock outstanding during the periods presented. Net (loss)/income attributable to Navios Holdings common stockholders is calculated by adding to (if a discount) or deducting from (if a premium) net (loss)/ income attributable to Navios
Holdings common stockholders the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred stock, including the unamortized issuance costs of the preferred stock, and the amount of any
undeclared dividend cancelled. Diluted earnings per share reflect the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted. Dilution has been computed by the treasury stock method
whereby all of the Companys dilutive securities (stock options and warrants) are assumed to be exercised and the proceeds are used to repurchase common shares at the weighted average market price of the Companys common stock during the
relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation. Restricted share units,
restricted stock and restricted stock units (vested and unvested) are included in the calculation of the diluted earnings per share, based on the weighted average number of restricted share units, restricted stock and restricted stock units assumed
to be outstanding during the period. Convertible shares are included in the calculation of the diluted earnings per share, based on the weighted average number of convertible shares assumed to be outstanding during the period. See also Note 19.
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(v)
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Income Taxes:
The Company is a Marshall Islands Corporation. Pursuant to various treaties and the United States Internal Revenue Code, the Company believes that substantially all its operations are exempt
from income taxes in the Marshall Islands and the United States of America. The tax expense reflected in the Companys consolidated financial statements for the years ended December 31, 2016, 2015 and 2014 was mainly attributable to its
subsidiaries in South America, which are subject to the Argentinean and Paraguayan income tax regimes.
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The asset and
liability method is used to account for future income taxes. Under this method, future income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying
amounts and the tax bases of assets and liabilities. Future income tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on
future income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A deferred tax asset is recognized for temporary differences that will result in deductible amounts in future
years. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.
(w)
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Dividends:
Dividends are recorded in the Companys financial statements in the period in which they are declared. Navios Holdings paid $0, $19,325 and $25,228 to its common stockholders during the
years ended December 31, 2016, 2015 and 2014, respectively, and $3,681, $16,025 and $7,502 to its preferred stockholders during the years ended December 31, 2016, 2015 and 2014, respectively. In November 2015, Navios Holdings announced
that the Board of Directors decided to suspend the dividend to its common stockholders. In February 2016, Navios Holdings announced the suspension of payment of quarterly dividends on its preferred stock, including the Series G and Series H.
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(x)
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Guarantees:
A liability for the fair value of an obligation undertaken in issuing the guarantee is recognized. The recognition of fair value is not required for certain guarantees such as the parents
guarantee of a subsidiarys debt to a third party or guarantees on product warranties. For those guarantees excluded from the above guidance requiring the fair value recognition provision of the liability, financial statement disclosures of
their terms are made.
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On November 15, 2012, the Company agreed to provide Navios Partners with guarantees against
counterparty default on certain existing charters (see also Notes 15 and 23).
(y)
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Leases:
Vessel leases where Navios Holdings is regarded as the lessor are classified as either finance leases or operating leases based on an assessment of the terms of the lease.
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For charters classified as finance leases the minimum lease payments are recorded as the gross investment in the lease. The difference between
the gross investment in the lease and the sum of the present values of the two components of the gross investment is recorded as unearned income which is amortized to income over the lease term as finance lease interest income to produce a constant
periodic rate of return on the net investment in the lease.
For charters classified as operating leases where Navios Holdings is regarded
as the lessor, refer to Note 2(r).
For charters classified as operating leases where Navios Holdings is regarded as the lessee, the
expense is recognized on a straight line basis over the rental periods of such charter agreements. The expense is included under the line item Time charter, voyage and logistics business expenses.
F-19
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(z)
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Treasury Stock:
Treasury stock is accounted for using the cost method. Excess of the purchase price of the treasury stock acquired, plus direct acquisition costs over its par value is recorded in
additional
paid-in
capital.
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(aa)
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Trade Accounts Receivable:
The amount shown as accounts receivable, trade, at each balance sheet date, includes receivables from charterers for hire, freight and demurrage billings and FFA counterparties,
net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts.
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(ab)
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Convertible Preferred Stock:
The Companys 2% Mandatorily Convertible Preferred Stock (Preferred Stock) is recorded at fair market value on the date of issuance. The fair market value is
determined using a binomial valuation model. The model which is used takes into account the credit spread of the Company, the volatility of its stock, as well as the price of its stock at the issuance date. Each preferred share has a par value of
$0.0001. Each holder of Preferred Stock is entitled to receive an annual dividend equal to 2.0% on the nominal value of the Preferred Stock, payable quarterly, until such time as the Preferred Stock converts into common stock. Five years after the
issuance date, 30.0% of the then-outstanding shares of Preferred Stock shall automatically convert into shares of common stock at a conversion price equal to $10.00 per share of common stock with the remaining balance of the then-outstanding shares
of Preferred Stock being converted into shares of common stock under the same terms 10 years after their issuance date. At any time following the third anniversary from their issuance date, if the closing price of the common stock has been at least
$20.00 per share, for 10 consecutive business days, the remaining balance of the then-outstanding preferred shares shall automatically convert at a conversion price equal to $14.00 per share of common stock. The holders of Preferred Stock are
entitled, at their option, at any time following their issuance date and prior to their final conversion date, to convert all or any such then-outstanding preferred shares into common stock at a conversion price equal to $14.00 per common stock. See
also Note 16.
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(ac)
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Cumulative Redeemable Perpetual Preferred Stock:
The Companys 2,000,000 American Depositary Shares, Series G Cumulative Redeemable Perpetual Preferred Stock (the Series G) and the
4,800,000 American Depositary Shares, Series H Cumulative Redeemable Perpetual Preferred Stock (the Series H) are recorded at fair market value on issuance. Each of the shares represents 1/100th of a share of the Series G, with a
liquidation preference of $2,500.00 per share ($25.00 per American Depositary Share). Dividends are payable quarterly in arrears on the Series G at a rate of 8.75% per annum and on the Series H at a rate of 8.625% per annum of the stated liquidation
preference. At any time on or after January 28, 2019, the Series G may be redeemed at the Companys option and at any time on or after July 8, 2019, the Series H may be redeemed at the Companys option (and the American
Depositary Shares can be caused to be redeemed), in whole or in part, out of amounts legally available therefore, at a redemption price of $2,500.00 per share (equivalent to $25.00 per American Depositary Share) plus an amount equal to all
accumulated and unpaid dividends thereon to the date of redemption, whether or not declared. The Company has accounted for these shares as equity. See also Note 16.
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(ad)
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Investment in
Available-for-Sale
Securities:
The Company classifies its existing marketable equity securities as
available-for-sale.
These securities are carried at fair value, with unrealized gains and losses excluded from earnings and reported directly in stockholders equity as a
component of other comprehensive (loss)/income unless an unrealized loss is considered other-than-temporary, in which case it is transferred to the consolidated statements of comprehensive (loss)/income. Management evaluates securities
for other-than-temporary impairment (OTTI) on a quarterly basis. Consideration is given to (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term
prospects of the investee, and (iii) the intent and ability of the Company to retain its investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value.
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Investment in Equity Securities:
Navios Holdings evaluates its investments in Navios Acquisition, Navios Partners, Navios Europe
I and Navios Europe II for OTTI on a quarterly basis. Consideration is given to (i) the length of time and the extent to which the fair value has been less than the carrying value, (ii) the financial condition and near-term prospects of
Navios Partners, Navios Acquisition, Navios Europe I and Navios Europe II, and (iii) the intent and ability of the Company to retain its investment in Navios Acquisition, Navios Partners, Navios Europe I and Navios Europe II, for a period of
time sufficient to allow for any anticipated recovery in fair value.
(ae)
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Financial Instruments and Fair Value:
Guidance on Fair Value Measurements provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).
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A financial instruments level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair
value measurement. In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to guidance on Fair Value Measurements.
F-20
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
(af)
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Recent Accounting Pronouncements:
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In March 2017, the Financial Accounting
Standards Board (FASB) issued ASU
2017-07,
CompensationRetirement Benefits (Topic 715). This update improves the presentation of net periodic pension cost and net periodic
postretirement benefit cost and includes amendments to the Overview and Background Sections of the FASB Accounting Standards Codification. The amendments in this update apply to all employers that offer to their employees defined benefit pension
plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017, including
interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is currently
assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements.
In February 2017, FASB
issued ASU
2017-05,
Other IncomeGains and Losses from the Derecognition of Nonfinancial Assets (Subtopic
610-20).
This update clarifies the scope of
Subtopic
610-20
Other IncomeGains and Losses from the Derecognition of Nonfinancial Assets and provides guidance for partial sales of nonfinancial assets. Subtopic
610-20,
which was issued in May 2014 as a part of ASU
2014-09,
Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and
losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in ASU
2017-05
are effective at the same time as the amendments in ASU
2014-09.
Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period.
Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently assessing the impact that
adopting this new accounting guidance will have on its consolidated financial statements.
In January 2017, FASB issued ASU
2017-04,
Intangibles-Goodwill and Other (Topic 350). This update addresses concern expressed about the cost and complexity of the goodwill impairment test and simplifies how an entity is required to test
goodwill for impairment by eliminating Step 2 from the goodwill impairment test. The amendments in this ASU are required for public business entities and other entities that have goodwill reported in their financial statements and have not elected
the private company alternative for the subsequent measurement of goodwill. The amendments are effective for public business entities that are SEC filers for fiscal years beginning after December 15, 2019. Early adoption is permitted for all
entities. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements.
In January 2017, FASB issued ASU
2017-03,
Accounting Changes and Error Corrections (Topic 250)
and Investments-Equity Method and Joint Ventures (Topic 323). The ASU amends the Codification for SEC staff announcements made at recent Emerging Issues Task Force (EITF) meetings. The SEC guidance that specifically relates to our consolidated
financial statement was from the September 2016 meeting, where the SEC staff expressed their expectations about the extent of disclosures registrants should make about the effects of the new FASB guidance as well as any amendments issued prior to
adoption, on revenue (ASU
2014-09),
leases (ASU
2016-02)
and credit losses on financial instruments (ASU
2016-13)
in accordance
with SAB Topic 11.M. Registrants are required to disclose the effect that recently issued accounting standards will have on their financial statements when adopted in a future period. In cases where a registrant cannot reasonably estimate the impact
of the adoption, then additional qualitative disclosures should be considered. The ASU incorporates these SEC staff views into ASC 250 and adds references to that guidance in the transition paragraphs of each of the three new standards. The adoption
of this ASU did not have a material effect on the Companys consolidated financial statements.
In January 2017, FASB issued ASU
2017-01,
Business Combinations to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition
(or disposals) of assets or businesses. Under current implementation guidance the existence of an integrated set of acquired activities (inputs and processes that generate outputs) constitutes an acquisition of business. This ASU provides a screen
to determine when a set of assets and activities does not constitute a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a
group of similar identifiable assets, the set is not a business. This update is effective for public entities with reporting periods beginning after December 15, 2017, including interim periods within those years. The amendments of this ASU
should be applied prospectively on or after the effective date. Early adoption is permitted, including adoption in an interim period 1) for transactions for which the acquisition date occurs before the issuance date or effective date of the ASU,
only when the transaction has not been reported in financial statements that have been issued or made available for issuance and 2) for transactions in which a subsidiary is deconsolidated or a group of assets is derecognized at a time before the
issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company is currently assessing the impact that adopting this new
accounting guidance will have on its consolidated financial statements.
In December 2016, FASB issued ASU
2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this ASU affect narrow aspects of the guidance issued in ASU
2014-09,
which is not yet effective, and are of a similar nature to the items typically addressed in the Technical Corrections and Improvements project. The
F-21
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update
2014-09).
ASU
2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update
2014-09
by one year, as noted below.
In November 2016, FASB issued ASU
2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash. This update addresses the classification and presentation of changes in restricted cash on the statement of cash flows under Topic
230, Statement of Cash Flows. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company
is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements.
In August
2016, FASB issued ASU
2016-15,
Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of
reducing the existing diversity in practice. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for all
entities. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnotes disclosures.
In March 2016, FASB issued ASU
2016-09,
CompensationStock Compensation (Topic 718),
which simplifies several aspects of accounting for share-based compensation including the tax consequences, classification of awards as equity or liabilities, forfeitures and classification on the statement of cash flows. ASU
2016-09
is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted. The adoption of this new standard is not expected to
have a material impact on the Companys results of operations, financial position or cash flows.
In February 2016, FASB issued ASU
2016-02,
Leases (Topic 842). ASU
2016-02
will apply to both capital (or finance) leases and operating leases. According to ASU
2016-02,
lessees will be required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016 02 is
effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will
have on its consolidated financial statements and footnotes disclosures.
In January 2016, FASB issued ASU
2016-01,
Financial InstrumentsOverall (Subtopic
825-10)
- Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in
this ASU require an entity (i) to measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net
income; (ii) to perform a qualitative assessment to identify impairment in equity investments without readily determinable fair values; (iii) to present separately in other comprehensive income the fair value of a liability resulting from
a change in the instrument-specific credit risk; and (iv) to present separately financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet.
The amendments also eliminate the requirement, for public business entities, to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet and clarify
that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to
available-for-sale
securities in combination with the entitys
other deferred tax assets. For public business entities, ASU
2016-01
is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of
this new standard is not expected to have a material impact on the Companys results of operations, financial position or cash flows.
In November 2015, FASB issued ASU
2015-17,
Income Taxes (Topic 740) - Balance Sheet
Classification of Deferred Taxes, which requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a
tax-paying
component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. For public business entities, the amendments in this ASU are effective for fiscal years
beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of this new standard is not expected to have a material impact on the Companys results of operations, financial position or cash flows.
In July 2015, FASB issued ASU
2015-11,
Inventory (Topic 330) - Simplifying the Measurement
of Inventory, which requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments in this ASU
require an entity to measure inventory within the scope of this ASU at the lower of cost and net realizable value. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2016,
including interim periods within those fiscal years. The amendments in this ASU should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this new standard is not
expected to have a material impact on the Companys results of operations, financial position or cash flows.
In August 2014, FASB
issued ASU
2014-15,
Presentation of Financial Statements-Going Concern (Subtopic
205-40):
Disclosure of Uncertainties about an Entitys Ability to Continue as
a Going Concern. This standard requires management to assess an
F-22
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
entitys ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. Before this new standard, no accounting guidance existed for management
on when and how to assess or disclose going concern uncertainties. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early
application is permitted. The adoption of the new standard did not have a material impact on the Companys results of operations, financial position or cash flows.
In May 2014, FASB issued ASU
2014-09,
Revenue from Contracts with Customers, clarifying the
method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations in a contract, the transaction price and allocate the price to
specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of
revenue and cash flow arising from contracts. The new accounting guidance was originally effective for interim and annual periods beginning after December 15, 2016. In August 2015, the FASB issued ASU
2015-14
which deferred the effective date of ASU
2014-09
for all entities by one year. The standard will be effective for public entities for annual reporting periods
beginning after December 15, 2017 and interim periods therein. The Company is currently reviewing the effect of ASU
No. 2014-09
on its revenue recognition.
NOTE 3: CASH AND CASH EQUIVALENTS
Cash
and cash equivalents consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Cash on hand and at banks
|
|
$
|
126,584
|
|
|
$
|
85,570
|
|
Short-term deposits and highly liquid funds
|
|
|
9,408
|
|
|
|
77,842
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
135,992
|
|
|
$
|
163,412
|
|
|
|
|
|
|
|
|
|
|
Short-term deposits and highly liquid funds relate to amounts held in banks for general financing purposes and
represent deposits with an original maturity of less than three months.
Cash deposits and cash equivalents in excess of amounts covered
by government-provided insurance are exposed to loss in the event of
non-performance
by financial institutions. Navios Holdings does maintain cash deposits and equivalents in excess of government provided
insurance limits. Navios Holdings reduces exposure to credit risk by dealing with a diversified group of major financial institutions.
NOTE 4:
ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Accounts receivable
|
|
$
|
85,266
|
|
|
$
|
83,091
|
|
Less: provision for doubtful receivables
|
|
|
(19,437
|
)
|
|
|
(18,278
|
)
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
$
|
65,829
|
|
|
$
|
64,813
|
|
|
|
|
|
|
|
|
|
|
Changes to the provisions for doubtful accounts are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful receivables
|
|
Balance at
Beginning of
Period
|
|
|
Charges to
Costs and
Expenses
|
|
|
Amount
Utilized
|
|
|
Balance at
End of
Period
|
|
Year ended December 31, 2014
|
|
$
|
(26,457
|
)
|
|
$
|
(792
|
)
|
|
$
|
8,785
|
|
|
$
|
(18,464
|
)
|
Year ended December 31, 2015
|
|
$
|
(18,464
|
)
|
|
$
|
(59
|
)
|
|
$
|
245
|
|
|
$
|
(18,278
|
)
|
Year ended December 31, 2016
|
|
$
|
(18,278
|
)
|
|
$
|
(1,304
|
)
|
|
$
|
145
|
|
|
$
|
(19,437
|
)
|
Concentration of credit risk with respect to accounts receivable is limited due to the Companys large
number of customers, who are internationally dispersed and have a variety of end markets in which they sell. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the
Companys trade receivables. For the year ended December 31, 2016, two customers accounted for 14.7% and 13.1%, respectively, of the Companys revenue. For the year ended December 31, 2015, one customer accounted for 15.1% of the
Companys revenue and for the year ended December 31, 2014, one customer accounted for 11.9% of the Companys revenue.
F-23
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 5: PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Prepaid voyage and operating costs
|
|
$
|
8,352
|
|
|
$
|
8,700
|
|
Claims receivable
|
|
|
9,822
|
|
|
|
11,078
|
|
Prepaid other taxes
|
|
|
4,279
|
|
|
|
3,664
|
|
Advances for working capital purposes
|
|
|
4,486
|
|
|
|
|
|
Other
|
|
|
1,957
|
|
|
|
700
|
|
|
|
|
|
|
|
|
|
|
Total prepaid expenses and other current assets
|
|
$
|
28,896
|
|
|
$
|
24,142
|
|
|
|
|
|
|
|
|
|
|
Claims receivable mainly represents claims against vessels insurance underwriters in respect of damages
arising from accidents or other insured risks, as well as claims under charter contracts including
off-hires.
While it is anticipated that claims receivable will be recovered within one year, such claims may
not all be recovered within one year due to the attendant process of settlement. Nonetheless, amounts are classified as current as they represent amounts currently due to the Company. All amounts are shown net of applicable deductibles.
NOTE 6: VESSELS, PORT TERMINALS AND OTHER FIXED ASSETS, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels
|
|
Cost
|
|
|
Accumulated
Depreciation
|
|
|
Net Book
Value
|
|
Balance December 31, 2013
|
|
$
|
1,717,599
|
|
|
$
|
(308,461
|
)
|
|
$
|
1,409,138
|
|
Additions
|
|
|
123,541
|
|
|
|
(68,333
|
)
|
|
|
55,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
|
|
1,841,140
|
|
|
|
(376,794
|
)
|
|
|
1,464,346
|
|
Additions
|
|
|
|
|
|
|
(70,894
|
)
|
|
|
(70,894
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
|
|
1,841,140
|
|
|
|
(447,688
|
)
|
|
|
1,393,452
|
|
Additions
|
|
|
60,115
|
|
|
|
(73,847
|
)
|
|
|
(13,732
|
)
|
Transfers
|
|
|
29,695
|
|
|
|
|
|
|
|
29,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016
|
|
$
|
1,930,950
|
|
|
$
|
(521,535
|
)
|
|
$
|
1,409,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port Terminals (Navios Logistics)
|
|
Cost
|
|
|
Accumulated
Depreciation
|
|
|
Net Book
Value
|
|
Balance December 31, 2013
|
|
$
|
103,030
|
|
|
$
|
(17,082
|
)
|
|
$
|
85,948
|
|
Additions
|
|
|
3,369
|
|
|
|
(3,385
|
)
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
|
|
106,399
|
|
|
|
(20,467
|
)
|
|
|
85,932
|
|
Additions
|
|
|
2,287
|
|
|
|
(3,431
|
)
|
|
|
(1,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
|
|
108,686
|
|
|
|
(23,898
|
)
|
|
|
84,788
|
|
Additions
|
|
|
2,051
|
|
|
|
(3,493
|
)
|
|
|
(1,442
|
)
|
Transfers
|
|
|
(1,513
|
)
|
|
|
|
|
|
|
(1,513
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016
|
|
$
|
109,224
|
|
|
$
|
(27,391
|
)
|
|
$
|
81,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tanker vessels, barges and push boats (Navios Logistics)
|
|
Cost
|
|
|
Accumulated
Depreciation
|
|
|
Net Book
Value
|
|
Balance December 31, 2013
|
|
$
|
368,626
|
|
|
$
|
(93,782
|
)
|
|
$
|
274,844
|
|
Additions
|
|
|
96,387
|
|
|
|
(17,355
|
)
|
|
|
79,032
|
|
Write-off
|
|
|
(47
|
)
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
|
|
464,966
|
|
|
|
(111,137
|
)
|
|
|
353,829
|
|
Additions
|
|
|
6,188
|
|
|
|
(20,007
|
)
|
|
|
(13,819
|
)
|
Restructure of capital lease
|
|
|
(210
|
)
|
|
|
|
|
|
|
(210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
|
|
470,944
|
|
|
|
(131,144
|
)
|
|
|
339,800
|
|
Additions
|
|
|
738
|
|
|
|
(18,894
|
)
|
|
|
(18,156
|
)
|
Transfers
|
|
|
3,696
|
|
|
|
|
|
|
|
3,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016
|
|
$
|
475,378
|
|
|
$
|
(150,038
|
)
|
|
$
|
325,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-24
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other fixed assets
|
|
Cost
|
|
|
Accumulated
Depreciation
|
|
|
Net Book
Value
|
|
Balance December 31, 2013
|
|
$
|
12,700
|
|
|
$
|
(5,173
|
)
|
|
$
|
7,527
|
|
Additions
|
|
|
887
|
|
|
|
(1,378
|
)
|
|
|
(491
|
)
|
Write-off
|
|
|
(161
|
)
|
|
|
161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
|
|
13,426
|
|
|
|
(6,390
|
)
|
|
|
7,036
|
|
Additions
|
|
|
443
|
|
|
|
(1,558
|
)
|
|
|
(1,115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
|
|
13,869
|
|
|
|
(7,948
|
)
|
|
|
5,921
|
|
Additions
|
|
|
2,250
|
|
|
|
(1,475
|
)
|
|
|
775
|
|
Transfers
|
|
|
(2,183
|
)
|
|
|
|
|
|
|
(2,183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016
|
|
$
|
13,936
|
|
|
$
|
(9,423
|
)
|
|
$
|
4,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Cost
|
|
|
Accumulated
Depreciation
|
|
|
Net Book
Value
|
|
Balance December 31, 2013
|
|
$
|
2,201,955
|
|
|
$
|
(424,498
|
)
|
|
$
|
1,777,457
|
|
Additions
|
|
|
224,184
|
|
|
|
(90,451
|
)
|
|
|
133,733
|
|
Write-off
|
|
|
(208
|
)
|
|
|
161
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
|
|
2,425,931
|
|
|
|
(514,788
|
)
|
|
|
1,911,143
|
|
Additions
|
|
|
8,918
|
|
|
|
(95,890
|
)
|
|
|
(86,972
|
)
|
Restructure of capital lease
|
|
|
(210
|
)
|
|
|
|
|
|
|
(210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
|
|
2,434,639
|
|
|
|
(610,678
|
)
|
|
|
1,823,961
|
|
Additions
|
|
|
65,154
|
|
|
|
(97,709
|
)
|
|
|
(32,555
|
)
|
Transfers
|
|
|
29,695
|
|
|
|
|
|
|
|
29,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2016
|
|
$
|
2,529,488
|
|
|
$
|
(708,387
|
)
|
|
$
|
1,821,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits for Vessels and Port Terminals Acquisitions
On January 26, 2014, Navios Holdings entered into agreements to purchase two bulk carrier vessels, one 84,872 deadweight tons
(dwt) Panamax vessel, Navios Sphera, and one 181,259 dwt Capesize vessel, Navios Mars, to be built in Japan. The vessels acquisition prices were $31,800 and $52,000, respectively, and were delivered in January 2016. As of
December 31, 2015, Navios Holdings had paid deposits for both vessels totaling $29,695, which as of March 31, 2016, had been transferred to vessels cost.
On February 11, 2014, Navios Logistics entered into an agreement, as amended on June 3, 2016, for the construction of three new
pushboats with a purchase price of $7,344 for each pushboat. As of December 31, 2016 and December 31, 2015, Navios Logistics had paid $16,156 and $14,770, respectively, for the construction of the new pushboats which are expected to be
delivered in the third quarter of 2017.
As of December 31, 2016 and December 31, 2015, Navios Logistics had paid $120,735 and
$29,484, respectively, for the expansion of its dry port in Uruguay, which is currently an asset under construction. Capitalized interest included in deposits for vessels, port terminals and other fixed assets amounted to $8,796 and $2,954, as of
December 31, 2016 and December 31, 2015, respectively.
Vessel Acquisitions
On January 12, 2016, Navios Holdings took delivery of the Navios Sphera, a 2016-Japanese built 84,872 dwt Panamax vessel, and Navios Mars,
a 2016-Japanese built 181,259 dwt Capesize vessel, for an acquisition cost of $34,352 and $55,458, respectively, of which $49,910 was paid from available cash and $39,900 was financed through a loan. As of March 31, 2016, deposits of $29,695,
relating to the acquisition of Navios Sphera and Navios Mars, had been transferred to vessels cost.
On January 27, 2014,
Navios Asia took delivery of the N Bonanza, a 2006-built 76,596 dwt Panamax vessel for a purchase price
of $17,634, of which $2,900 was paid from the Companys cash, $3,484 from the noncontrolling shareholders cash and $11,250 was
financed through a loan.
On June 4, 2014, Navios Holdings took delivery of the Navios Gem, a 2014-built 181,336 dwt Capesize vessel
for a purchase price of $54,368, of which $24,368 was paid in cash and $30,000 was financed through a loan.
On November 24, 2014,
Navios Holdings took delivery of the Navios Ray, a 2012-built 179,515 dwt Capesize vessel for a purchase price of $51,539, of which $20,539 was paid in cash and $31,000 was financed through a loan.
F-25
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Navios Logistics
On June 30, 2015, Navios Logistics entered into an agreement for the restructuring of its capital leases for the Ferni H and the San San
H, by extending their duration until January 2020 and April 2020, respectively, and amending the purchase price obligation to $5,325 and $5,150, respectively, payable at the end of the extended period. As of December 31, 2016, the obligations
for these vessels were accounted for as capital leases and the lease payments during the years ended December 31, 2016 and 2015 for both vessels were $3,032 and $1,501, respectively.
NOTE 7: INTANGIBLE ASSETS/LIABILITIES OTHER THAN GOODWILL
Net Book Value of Intangible Assets/Liabilities other than Goodwill as at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
Cost
|
|
|
Accumulated
Amortization
|
|
|
Additions / Write
off
|
|
|
Net Book Value
December 31,
2016
|
|
Trade name
|
|
$
|
100,420
|
|
|
$
|
(41,303
|
)
|
|
$
|
|
|
|
$
|
59,117
|
|
Port terminal operating rights
|
|
|
53,152
|
|
|
|
(10,162
|
)
|
|
|
|
|
|
|
42,990
|
|
Customer relationships
|
|
|
35,490
|
|
|
|
(15,971
|
)
|
|
|
|
|
|
|
19,519
|
|
Favorable lease terms(*)
|
|
|
82,485
|
|
|
|
(6,359
|
)
|
|
|
(70,937
|
)
|
|
|
5,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangible assets
|
|
|
271,547
|
|
|
|
(73,795
|
)
|
|
|
(70,937
|
)
|
|
|
126,815
|
|
Unfavorable lease terms(**)
|
|
|
(24,721
|
)
|
|
|
|
|
|
|
24,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
246,826
|
|
|
$
|
(73,795
|
)
|
|
$
|
(46,216
|
)
|
|
$
|
126,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value of Intangible Assets/Liabilities other than Goodwill as at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
Cost
|
|
|
Accumulated
Amortization
|
|
|
Additions / Write off
|
|
|
Net Book Value
December 31,
2015
|
|
Trade name
|
|
$
|
100,420
|
|
|
$
|
(37,401
|
)
|
|
$
|
|
|
|
$
|
63,019
|
|
Port terminal operating rights
|
|
|
53,152
|
|
|
|
(9,456
|
)
|
|
|
|
|
|
|
43,696
|
|
Customer relationships
|
|
|
35,490
|
|
|
|
(14,196
|
)
|
|
|
|
|
|
|
21,294
|
|
Favorable lease terms(*)
|
|
|
158,179
|
|
|
|
(60,037
|
)
|
|
|
(75,694
|
)
|
|
|
22,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangible assets
|
|
|
347,241
|
|
|
|
(121,090
|
)
|
|
|
(75,694
|
)
|
|
|
150,457
|
|
Unfavorable lease terms(**)
|
|
|
(56,419
|
)
|
|
|
17,195
|
|
|
|
31,698
|
|
|
|
(7,526
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
290,822
|
|
|
$
|
(103,895
|
)
|
|
$
|
(43,996
|
)
|
|
$
|
142,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
As of December 31, 2016 and 2015, intangible assets associated with the favorable lease terms included an amount of $1,180 and $10,575, respectively related to purchase options for the vessels (see also Note 2(n)).
During the year ended December 31, 2016, acquisition costs of $70,937 and accumulated amortization of $57,930 of favorable lease terms were written off resulting in a loss of $13,007. This
write-off
resulted from the early redelivery of one vessel. During the year ended December 31, 2015, acquisition costs $75,694, of fully amortized favorable lease terms were written off, as a result of early redeliveries of vessels.
|
(**)
|
As of December 31, 2016 and 2015, the intangible liability associated with the unfavorable lease terms included an amount of $0 and $(467), respectively, related to purchase options held by third parties (see also
Note 2(n)). During the year ended December 31, 2016, acquisition costs of $24,721 and accumulated amortization of $17,406 of unfavorable lease terms were written off resulting in an income of $7,315. This
write-off
resulted from the early redelivery of one vessel. During the year ended December 31, 2015, $31,698 of acquisition cost of unfavorable lease terms were written off. During the year ended
December 31, 2015, acquisition cost and accumulated amortization of $64,609, of fully amortized unfavorable lease terms were written off. These write-offs resulted from early redelivery of vessels. As of December 31, 2016 and 2015, no
purchase options held by third parties have been exercised.
|
On December 15, 2014, Navios Logistics
acquired two companies for a total consideration of $17,000, of which $10,200 was paid in 2014 and $6,800 was paid in 2015. These companies, as free zone direct users, hold the right to occupy approximately 53 acres of undeveloped riverfront land
located in the Nueva Palmira free zone in Uruguay, adjacent to Navios Logistics existing port.
F-26
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
Expense and
Write Offs
Year Ended
December 31,
2016
|
|
|
Amortization
Expense and
Write Offs
Year Ended
December 31,
2015
|
|
|
Amortization
Expense and
Write Offs
Year Ended
December 31,
2014
|
|
Trade name
|
|
$
|
3,902
|
|
|
$
|
3,811
|
|
|
$
|
3,853
|
|
Port terminal operating rights
|
|
|
706
|
|
|
|
1,006
|
|
|
|
1,006
|
|
Customer relationships
|
|
|
1,775
|
|
|
|
1,775
|
|
|
|
1,774
|
|
Favorable lease terms
|
|
|
17,260
|
|
|
|
32,444
|
|
|
|
12,539
|
|
Unfavorable lease terms
|
|
|
(7,526
|
)
|
|
|
(14,615
|
)
|
|
|
(4,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
16,117
|
|
|
$
|
24,420
|
|
|
$
|
14,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The remaining aggregate amortization of acquired intangibles as of December 31, 2016 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Within one
year
|
|
|
Year Two
|
|
|
Year Three
|
|
|
Year Four
|
|
|
Year Five
|
|
|
Thereafter
|
|
|
Total
|
|
Trade name
|
|
$
|
3,853
|
|
|
$
|
2,811
|
|
|
$
|
2,811
|
|
|
$
|
2,818
|
|
|
$
|
2,811
|
|
|
$
|
44,013
|
|
|
$
|
59,117
|
|
Favorable lease terms
|
|
|
641
|
|
|
|
641
|
|
|
|
641
|
|
|
|
641
|
|
|
|
641
|
|
|
|
804
|
|
|
|
4,009
|
|
Port terminal operating rights
|
|
|
895
|
|
|
|
990
|
|
|
|
990
|
|
|
|
990
|
|
|
|
990
|
|
|
|
38,135
|
|
|
|
42,990
|
|
Customer relationships
|
|
|
1,775
|
|
|
|
1,775
|
|
|
|
1,775
|
|
|
|
1,775
|
|
|
|
1,775
|
|
|
|
10,644
|
|
|
|
19,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total amortization
|
|
$
|
7,164
|
|
|
$
|
6,217
|
|
|
$
|
6,217
|
|
|
$
|
6,224
|
|
|
$
|
6,217
|
|
|
$
|
93,596
|
|
|
$
|
125,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 8: INVESTMENTS IN AFFILIATES
Navios Partners
On August 7, 2007,
Navios Holdings formed Navios Partners under the laws of Marshall Islands. Navios GP L.L.C. (the General Partner), a wholly owned subsidiary of Navios Holdings, was also formed on that date to act as the general partner of Navios
Partners and received a 2.0% general partner interest.
In February 2014, Navios Partners completed a public offering of 6,325,000 common
units. Navios Holdings paid $2,233 in order to retain its 2.0% general partner interest. The Company determined, under the equity method, that the issuance of shares qualified as sales of shares by the investee. As a result, a gain of $11,230 was
recognized in Equity in net earnings of affiliated companies for the year ended December 31, 2014.
In February 2015,
Navios Partners completed a public offering of 4,600,000 common units, raising gross proceeds of $60,214. In addition, Navios Partners completed a private placement of 1,120,547 common units and 22,868 general partner units to Navios Holdings
raising additional gross proceeds of $14,967.
As of December 31, 2016, Navios Holdings held a total of 15,344,310 common units and
1,700,493 general partners units, representing a 20.0% interest in Navios Partners, including the 2.0% general partner interest, and the entire investment in Navios Partners is accounted for under the equity method.
As of December 31, 2016 and 2015, the pre-OTTI unamortized difference between the carrying amount of the investment in Navios Partners
and the amount of the Companys underlying equity in net assets of Navios Partners was $29,529 and $32,300, respectively. The Company will need to recompute this difference which is amortized through Equity in net earnings of affiliated
companies over the remaining life of Navios Partners tangible and intangible assets.
Total equity method income and amortization of
deferred gain of $5,979, $15,462 and $36,959 were recognized in Equity in net earnings of affiliated companies for the years ended December 31, 2016, 2015 and 2014, respectively.
As of December 31, 2016 and 2015, the carrying amount of the investment in Navios Partners was $24,033 and $115,432, respectively. During
the year ended December 31, 2016, the Company recognized an OTTI loss of $83,596 relating to its investment in Navios Partners and the amount was included in Equity/(loss) in net earnings of affiliated companies.
Dividends received during the year ended December 31, 2016, 2015 and 2014 were $0, $27,993 and $30,043, respectively.
As of December 31, 2016, the market value of the investment in Navios Partners was $24,033.
F-27
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Acropolis
Navios Holdings has a 50% interest in Acropolis, a brokerage firm for freight and shipping charters. Although Navios Holdings owns 50% of
Acropolis stock, Navios Holdings agreed with the other shareholder that the earnings and amounts declared by way of dividends will be allocated 35% to the Company with the balance to the other shareholder. As of December 31, 2016 and
2015, the carrying amount of the investment was $105 and $175, respectively. Dividends received for each of the years ended December 31, 2016, 2015 and 2014 were $85, $454 and $271, respectively.
Navios Acquisition
In February 2014,
Navios Acquisition completed a public offering of 14,950,000 shares of its common stock. In October 2014, 699,994 Navios Acquisitions restricted stock awards vested. The Company determined, under the equity method, that the issuance of shares
and the vesting of restricted stock awards qualified as a sale of shares by the investee. As a result, an income of $4,675 was recognized in Equity in net earnings of affiliated companies for the year ended December 31, 2014.
As of December 31, 2016, Navios Holdings had a 43.4% voting and a 46.1% economic interest in Navios Acquisition.
As of December 31, 2016 and 2015, the pre-OTTI unamortized difference between the carrying amount of the investment in Navios Acquisition
and the amount of the Companys underlying equity in net assets of Navios Acquisition was $(2,588) and $1,480, respectively. The Company will need to recompute this difference which is amortized through Equity in net earnings of
affiliated companies over the remaining life of Navios Acquisition tangible and intangible assets.
Total equity method income of
$29,801, $43,299 and $19,513 were recognized in Equity in net earnings of affiliated companies for the years ended December 31, 2016, 2015 and 2014, respectively.
As of December 31, 2016 and 2015, the carrying amount of the investment in Navios Acquisition was $124,062 and $253,286, respectively.
During the year ended December 31, 2016, the Company recognized an OTTI loss of $144,430 relating to its investment in Navios Acquisition and the amount was included in Equity /(loss) in net earnings of affiliated companies.
Dividends received for each of the years ended December 31, 2016, 2015 and 2014 were $14,595, $18,244 and $14,595, respectively.
As of December 31, 2016, the market value of the investment in Navios Acquisition was $124,062.
Navios Europe I
On December 18,
2013, Navios Europe I acquired ten vessels for aggregate consideration consisting of (i) cash (which was funded with the proceeds of senior loan facilities (the Senior Loans I) and loans aggregating to $10,000 from Navios Holdings,
Navios Acquisition and Navios Partners (in each case, in proportion to their economic interests in Navios Europe I) (collectively, the Navios Term Loans I) and (ii) the assumption of a junior participating loan facility (the
Junior Loan I). In addition to the Navios Term Loans I, Navios Holdings, Navios Acquisition and Navios Partners will also make available to Navios Europe I revolving loans up to $24,100 to fund working capital requirements (collectively,
the Navios Revolving Loans I).
On an ongoing basis, Navios Europe I is required to distribute cash flows (after payment of
operating expenses and amounts due pursuant to the terms of the Senior Loans I) according to a defined waterfall calculation.
The Navios
Term Loans I will be repaid from the future sale of vessels owned by Navios Europe I and is deemed to be the initial investment by Navios Holdings. Navios Holdings evaluated its investment in Navios Europe I under ASC 810 and concluded that Navios
Europe I is a VIE and that they are not the party most closely associated with Navios Europe I and, accordingly, is not the primary beneficiary of Navios Europe I.
Navios Holdings further evaluated its investment in the common stock of Navios Europe I under ASC 323 and concluded that it has the ability to
exercise significant influence over the operating and financial policies of Navios Europe I and, therefore, its investment in Navios Europe I is accounted for under the equity method.
The initial investment in Navios Europe I of $4,750 at the inception included the Companys share of the basis difference between the
fair value and the underlying book value of the assets of Navios Europe I, which amounted to $6,763. This difference is amortized through Equity in net earnings of affiliated companies over the remaining life of Navios Europe I. As of
December 31, 2016 and December 31, 2015, the unamortized basis difference of Navios Europe I was $4,710, and $5,386, respectively.
As of December 31, 2016 and 2015, the estimated maximum potential loss by Navios Holdings in Navios Europe I would have been $18,268 and
$15,763, respectively, which represents the Companys carrying value of its investment of $8,198 and $6,895, respectively, including accrued interest, plus the Companys balance of the Navios Revolving Loans I of $10,070 and $8,868,
respectively, including accrued interest, and does not include the undrawn portion of the Navios Revolving Loans I.
F-28
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Income of $1,303, $1,293 and $831 was recognized in Equity in net earnings of
affiliated companies for the years ended December 31, 2016, 2015 and 2014, respectively.
As of December 31, 2016 and
2015, the carrying amount of the investment in Navios Europe I was $5,967 and $5,497, respectively. See also Note 25 for the transfer of Navios Holdings participation in Navios Revolving Loans I and Navios Term Loans I to Navios Partners.
Navios Europe II
On February 18,
2015, Navios Holdings, Navios Acquisition and Navios Partners established Navios Europe II. From June 8, 2015 through December 31, 2015, Navios Europe II acquired 14 vessels for aggregate consideration consisting of: (i) cash (which
was funded with the proceeds of a senior loan facility (the Senior Loans II) and loans aggregating to $14,000 from Navios Holdings, Navios Acquisition and Navios Partners (in each case, in proportion to their economic interests in Navios
Europe II) (collectively, the Navios Term Loans II) and (ii) the assumption of a junior participating loan facility (the Junior Loan II). In addition to the Navios Term Loans II, Navios Holdings, Navios Acquisition and
Navios Partners will also make available to Navios Europe II revolving loans up to $43,500 to fund working capital requirements (collectively, the Navios Revolving Loans II). In March 2017, the amount of the Navios Revolving Loans II
increased by $14,000.
On an ongoing basis, Navios Europe II is required to distribute cash flows (after payment of operating expenses,
amounts due pursuant to the terms of the Senior Loans II) according to a defined waterfall calculation.
The Navios Term Loans II will be
repaid from the future sale of vessels owned by Navios Europe II and is deemed to be the initial investment by Navios Holdings. Navios Holdings evaluated its investment in Navios Europe II under ASC 810 and concluded that Navios Europe II is a VIE
and that they are not the party most closely associated with Navios Europe II and, accordingly, is not the primary beneficiary of Navios Europe II.
Navios Holdings further evaluated its investment in the common stock of Navios Europe II under ASC 323 and concluded that it has the ability
to exercise significant influence over the operating and financial policies of Navios Europe II and, therefore, its investment in Navios Europe II is accounted for under the equity method.
The initial investment in Navios Europe II recorded under the equity method of $6,650, at the inception included the Companys share of
the basis difference between the fair value and the underlying book value of the assets of Navios Europe II, which amounted to $9,419. This difference is amortized through Equity in net earnings of affiliated companies over the remaining
life of Navios Europe II. As of December 31, 2016, the unamortized basis difference of Navios Europe II was $7,953.
As of
December 31, 2016 and 2015, the estimated maximum potential loss by Navios Holdings in Navios Europe II would have been $22,287 and $15,858, respectively, which represents the Companys carrying value of its investment of $7,944 and
$7,958, respectively, plus the Companys balance of the Navios Revolving Loans II of $14,343 and $7,900, respectively, including accrued interest, and does not include the undrawn portion of the Navios Revolving Loans II.
(Loss)/income of $(14) and $1,308 was recognized in Equity in net earnings of affiliated companies for the years ended
December 31, 2016 and 2015, respectively.
As of December 31, 2016, the carrying amount of the investment in Navios Europe II
was $5,894.
Summarized financial information of the affiliated companies is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
December 31, 2015
|
|
Balance Sheet
|
|
Navios
Partners
|
|
|
Navios
Acquisition
|
|
|
Acropolis
|
|
|
Navios
Europe I
|
|
|
Navios
Europe II
|
|
|
Navios
Partners
|
|
|
Navios
Acquisition
|
|
|
Acropolis
|
|
|
Navios
Europe I
|
|
|
Navios
Europe II
|
|
Cash and cash equivalents, including restricted cash
|
|
$
|
25,088
|
|
|
$
|
56,658
|
|
|
$
|
720
|
|
|
$
|
10,785
|
|
|
$
|
16,916
|
|
|
$
|
34,539
|
|
|
$
|
61,645
|
|
|
$
|
668
|
|
|
$
|
11,839
|
|
|
$
|
17,366
|
|
Current assets
|
|
|
56,349
|
|
|
|
107,282
|
|
|
|
986
|
|
|
|
15,980
|
|
|
|
19,487
|
|
|
|
39,835
|
|
|
|
97,349
|
|
|
|
1,117
|
|
|
|
14,782
|
|
|
|
22,539
|
|
Non-current
assets
|
|
|
1,212,231
|
|
|
|
1,596,337
|
|
|
|
84
|
|
|
|
169,925
|
|
|
|
232,363
|
|
|
|
1,310,456
|
|
|
|
1,676,742
|
|
|
|
73
|
|
|
|
179,023
|
|
|
|
245,154
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
98,950
|
|
|
|
79,421
|
|
|
|
413
|
|
|
|
18,490
|
|
|
|
24,126
|
|
|
|
41,528
|
|
|
|
82,798
|
|
|
|
447
|
|
|
|
15,377
|
|
|
|
16,897
|
|
Long-term debt including current portion, net
|
|
|
523,776
|
|
|
|
1,095,938
|
|
|
|
|
|
|
|
86,060
|
|
|
|
119,234
|
|
|
|
598,078
|
|
|
|
1,197,583
|
|
|
|
|
|
|
|
96,580
|
|
|
|
129,185
|
|
Non-current
liabilities
|
|
|
489,421
|
|
|
|
1,048,767
|
|
|
|
|
|
|
|
155,387
|
|
|
|
184,530
|
|
|
|
576,548
|
|
|
|
1,143,922
|
|
|
|
|
|
|
|
182,537
|
|
|
|
173,543
|
|
F-29
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2016
|
|
|
Year ended December 31, 2015
|
|
|
Year ended December 31, 2014
|
|
Income
Statement
|
|
Navios
Partners
|
|
|
Navios
Acquisition
|
|
|
Acropolis
|
|
|
Navios
Europe I
|
|
|
Navios
Europe II
|
|
|
Navios
Partners
|
|
|
Navios
Acquisition
|
|
|
Acropolis
|
|
|
Navios
Europe I
|
|
|
Navios
Europe II
|
|
|
Navios
Partners
|
|
|
Navios
Acquisition
|
|
|
Acropolis
|
|
|
Navios
Europe I
|
|
Revenue
|
|
$
|
190,524
|
|
|
$
|
290,245
|
|
|
$
|
1,068
|
|
|
$
|
40,589
|
|
|
$
|
30,893
|
|
|
$
|
223,676
|
|
|
$
|
313,396
|
|
|
$
|
1,760
|
|
|
$
|
41,437
|
|
|
$
|
20,767
|
|
|
$
|
227,356
|
|
|
$
|
264,877
|
|
|
$
|
2,825
|
|
|
$
|
35,119
|
|
Net income/ (loss) before
non-cash
change in fair value of
Junior Loan I and Junior Loan II
|
|
$
|
(52,549
|
)
|
|
$
|
59,715
|
|
|
$
|
157
|
|
|
$
|
(2,174
|
)
|
|
$
|
(25,062
|
)
|
|
$
|
41,805
|
|
|
$
|
84,796
|
|
|
$
|
244
|
|
|
$
|
(1,347
|
)
|
|
$
|
1,673
|
|
|
$
|
74,853
|
|
|
$
|
11,371
|
|
|
|
1,298
|
|
|
|
(5,061
|
)
|
Net income/(loss)
|
|
$
|
(52,549
|
)
|
|
$
|
59,715
|
|
|
$
|
157
|
|
|
$
|
16,137
|
|
|
$
|
(34,059
|
)
|
|
$
|
41,805
|
|
|
$
|
84,796
|
|
|
$
|
244
|
|
|
$
|
(1,118
|
)
|
|
$
|
77,252
|
|
|
$
|
74,853
|
|
|
$
|
11,371
|
|
|
|
1,298
|
|
|
|
(1,896
|
)
|
NOTE 9: ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities as of December 31, 2016 and 2015 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Payroll
|
|
$
|
14,730
|
|
|
$
|
11,021
|
|
Accrued interest
|
|
|
36,273
|
|
|
|
37,628
|
|
Accrued voyage expenses
|
|
|
2,217
|
|
|
|
3,311
|
|
Accrued running costs
|
|
|
21,394
|
|
|
|
22,705
|
|
Provision for losses on voyages in progress
|
|
|
3,129
|
|
|
|
2,157
|
|
Audit fees and related services
|
|
|
266
|
|
|
|
519
|
|
Accrued taxes
|
|
|
5,092
|
|
|
|
4,162
|
|
Professional fees
|
|
|
1,707
|
|
|
|
518
|
|
Dividends
|
|
|
|
|
|
|
3,081
|
|
Navios Partners Guarantee (Note 15)
|
|
|
|
|
|
|
8,752
|
|
Other accrued expenses
|
|
|
6,941
|
|
|
|
9,241
|
|
|
|
|
|
|
|
|
|
|
Total accrued expenses
|
|
$
|
91,749
|
|
|
$
|
103,095
|
|
|
|
|
|
|
|
|
|
|
F-30
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 10: BORROWINGS
Borrowings as of December 31, 2016 and 2015 consisted of the following:
|
|
|
|
|
|
|
|
|
Navios Holdings borrowings
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Commerzbank A.G. ($240,000)
|
|
$
|
19,857
|
|
|
$
|
40,476
|
|
Loan Facility Credit Agricole ($40,000)
|
|
|
18,880
|
|
|
|
21,291
|
|
Loan Facility Credit Agricole ($23,000)
|
|
|
14,755
|
|
|
|
16,117
|
|
Loan Facility Credit Agricole ($23,000)
|
|
|
15,150
|
|
|
|
16,550
|
|
Loan Facility DVB Bank SE ($72,000)
|
|
|
54,540
|
|
|
|
58,939
|
|
Loan Facility DVB Bank SE ($41,000)
|
|
|
37,293
|
|
|
|
|
|
Loan Facility Credit Agricole ($22,500)
|
|
|
16,313
|
|
|
|
18,563
|
|
Loan Facility DVB Bank SE ($40,000)
|
|
|
28,000
|
|
|
|
32,000
|
|
Loan Facility Alpha Bank ($31,000)
|
|
|
27,400
|
|
|
|
29,200
|
|
Loan Facility Alpha Bank ($16,125)
|
|
|
16,125
|
|
|
|
|
|
Navios Acquisition Loan
|
|
|
51,240
|
|
|
|
|
|
2019 Notes
|
|
|
291,094
|
|
|
|
350,000
|
|
2022 Notes
|
|
|
650,000
|
|
|
|
650,000
|
|
|
|
|
|
|
|
|
|
|
Total Navios Holdings borrowings
|
|
$
|
1,240,647
|
|
|
$
|
1,233,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navios Logistics borrowings
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
2022 Logistics Senior Notes
|
|
$
|
375,000
|
|
|
$
|
375,000
|
|
Navios Logistics Notes Payable
|
|
|
34,447
|
|
|
|
|
|
Navios Logistics BBVA Loan Facility
|
|
|
25,000
|
|
|
|
|
|
Other long-term loans
|
|
|
321
|
|
|
|
390
|
|
|
|
|
|
|
|
|
|
|
Total Navios Logistics borrowings
|
|
$
|
434,768
|
|
|
$
|
375,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Total borrowings
|
|
$
|
1,675,415
|
|
|
$
|
1,608,526
|
|
Less: current portion, net
|
|
|
(29,827
|
)
|
|
|
(16,944
|
)
|
Less: deferred finance costs, net
|
|
|
(24,320
|
)
|
|
|
(27,218
|
)
|
|
|
|
|
|
|
|
|
|
Total long-term borrowings
|
|
$
|
1,621,268
|
|
|
$
|
1,564,364
|
|
|
|
|
|
|
|
|
|
|
Navios Holdings loans
Senior Notes
On January 28, 2011,
the Company and its wholly owned subsidiary, Navios Maritime Finance II (US) Inc. (together with the Company, the 2019
Co-Issuers)
completed the sale of $350,000 of 8.125% Senior Notes due 2019
(the 2019
Notes). During July, August and October 2016, the Company repurchased $58,906 of its 2019 Notes for a cash consideration of $30,671 resulting in a gain on bond extinguishment of $27,670, net of deferred fees
written-off.
The 2019 Notes are fully and unconditionally guaranteed, jointly and
severally and
on an unsecured senior basis, by all of the Companys subsidiaries, other than Navios Maritime Finance II (US) Inc.,
Navios Maritime Finance (US) Inc., Navios Logistics and its subsidiaries and
Navios GP L.L.C. The subsidiary
guarantees are full and unconditional, except
that the indenture provides for an individual subsidiarys guarantee to be automatically released in certain customary circumstances,
such as when a subsidiary is sold or
all of the assets of the subsidiary are sold, the capital stock is sold, when the subsidiary is
designated as an unrestricted subsidiary for purposes of the indenture, upon liquidation or dissolution of the subsidiary or upon
legal
or covenant defeasance or satisfaction and discharge of the 2019 Notes. The 2019
Co-Issuers
have the option to redeem the 2019 Notes
in whole or in part, at a fixed price of 104.063% of
the
principal amount, which price declines ratably until it reaches par in February 2017, plus accrued and unpaid interest, if any. In addition, upon the occurrence of certain change of control events, the holders of the 2019 Notes will have
the right to require the 2019
Co-Issuers
to repurchase some or all of the 2019 Notes at 101% of their face amount, plus accrued and unpaid interest to the repurchase date.
The 2019 Notes contain covenants which, among other things, limit the incurrence of additional indebtedness, issuance of certain preferred
stock, the payment of dividends, redemption or repurchase of capital stock or making restricted payments and
F-31
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
investments, creation of certain liens, transfer or sale of assets, entering in transactions with affiliates, merging or consolidating or selling all or substantially all of the 2019
Co-Issuers
properties and assets and creation or designation of restricted subsidiaries. The 2019
Co-Issuers
were in compliance with the covenants as of
December 31, 2016.
Ship Mortgage Notes
On November 29, 2013, Navios Holdings completed the sale of $650,000 of its 7.375% First Priority Ship Mortgage Notes due 2022 (the
2022 Notes). The net proceeds of the offering of the 2022 Notes have been used: (i) to repay, in full, $488,000 of first priority ship mortgage notes due on November 1, 2017, issued by the Company and its wholly-owned
subsidiary, Navios Maritime Finance (US) Inc. in November 2009 and July 2012; and (ii) to repay in full indebtedness relating to six vessels added as collateral under the 2022 Notes. The remainder has been used for general corporate purposes.
The 2022 Notes are senior obligations of Navios Holdings and Navios Maritime Finance II (US) Inc. (the 2022
Co-
Issuers) and are secured by first priority ship mortgages on 23 dry bulk vessels owned by certain subsidiary guarantors and certain other associated property and contract rights. The 2022 Notes are
unregistered and fully and unconditionally guaranteed, jointly and severally by all of the Companys direct and indirect subsidiaries that guarantee the 2019 Notes and Navios Maritime Finance II (US) Inc. The guarantees of the Companys
subsidiaries that own mortgaged vessels are senior secured guarantees and the guarantees of the Companys subsidiaries that do not own mortgaged vessels are senior unsecured guarantees. In addition, the 2022
Co-Issuers
have the option to redeem the 2022 Notes in whole or in part, at any time on or after January 15, 2017, at a fixed price of 105.531%, which price declines ratably until it reaches par in 2020.
Furthermore, upon occurrence of certain change of control events, the holders of the 2022 Notes may require the 2022
Co-Issuers
to repurchase some or all of the notes at 101% of their face amount. The 2022 Notes contain covenants, which among other things, limit the incurrence of additional indebtedness, issuance of certain
preferred stock, the payment of dividends, redemption or repurchase of capital stock or making restricted payments and investments, creation of certain liens, transfer or sale of assets, entering into certain transactions with affiliates, merging or
consolidating or selling all or substantially all of the 2022
Co-Issuers
properties and assets and creation or designation of restricted subsidiaries. The 2022
Co-Issuers
were in compliance with the covenants as of December 31, 2016.
Secured credit facilities
Credit Agricole (formerly Emporiki) Facilities:
In December 2012, the Emporiki Bank of Greeces facilities were
transferred to Credit Agricole Corporate and Investment Bank.
In September 2010, Navios Holdings entered into a facility agreement with
Emporiki Bank of Greece for an amount of up to $40,000 in order to partially finance the construction of Navios Azimuth. As of December 31, 2016, the outstanding amount under the loan facility was repayable in 9 semi-annual equal installments
of $1,206 with a final balloon payment of $8,030 on the last payment date. The loan bears interest at a rate of LIBOR plus 275 basis points. The loan facility requires compliance with certain financial covenants. In December 2015, Navios Azimuth was
added as collateral to the Navios Asia facility. As of December 31, 2016, the outstanding amount under this facility was $18,880.
In
August 2011, Navios Holdings entered into a facility agreement with Emporiki Bank of Greece for an amount of up to $23,000 in order to partially finance the construction of one newbuilding bulk carrier. As of December 31, 2016, the facility is
repayable in 11 semi-annual equal installments of $681, with a final balloon payment of $7,264 on the last payment date. The loan bears interest at a rate of LIBOR plus 275 basis points. The loan facility requires compliance with certain covenants.
As of December 31, 2016, the outstanding amount under this facility was $14,755.
In December 2011, Navios Holdings entered into a
facility agreement with Emporiki Bank of Greece for an amount of up to $23,000 in order to partially finance the construction of one newbuilding bulk carrier. As of December 31, 2016, the outstanding amount under the loan facility was repayable
in 11 semi-annual equal installments of $700 after the drawdown date, with a final balloon payment of $7,450 on the last payment date. The loan bears interest at a rate of LIBOR plus 325 basis points. The loan facility requires compliance with
certain covenants. As of December 31, 2016, the outstanding amount under this facility was $15,150.
On December 20, 2013,
Navios Asia entered into a facility with Credit Agricole Corporate and Investment Bank for an amount of up to $22,500 in two equal tranches, in order to finance the acquisition of the N Amalthia, which was delivered in October 2013, and the N
Bonanza, which was delivered in January 2014. The two tranches bear interest at a rate of LIBOR plus 300 basis points. The two
F-32
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
tranches are repayable in four and five equal semi-annual installments of $563, respectively, with a final balloon payment of $5,625 on the last repayment date for each tranche respectively. The
loan facility requires compliance with certain financial covenants. As of December 31, 2016, the outstanding amount of the loan was $16,313.
Commerzbank Facility:
In June 2009, Navios Holdings entered into a facility agreement for an amount of up to $240,000 (divided into
four tranches of $60,000) with Commerzbank AG in order to partially finance the acquisition of a Capesize vessel and the construction of three Capesize vessels. Following the delivery of two Capesize vessels, Navios Holdings cancelled two of the
four tranches and in October 2010 fully repaid their outstanding loan balances of $53,600 and $54,500, respectively. During October 2016, the Company fully prepaid the third tranche of the facility, which had an outstanding balance of $15,319, using
$13,802 of cash, thus achieving a $1,517 benefit to nominal value. As of December 31, 2016, the fourth tranche of the facility is repayable in 16 quarterly installments of $835, with a final balloon payment of $6,495 on the last payment date.
The loan bears interest at a rate based on a margin of 225 basis points. The loan facility requires compliance with certain covenants. As of December 31, 2016, the outstanding amount was $19,857.
DVB Bank SE Facilities:
On March 23, 2012, Navios Holdings entered into a facility agreement with a syndicate of banks led by DVB
Bank SE for an amount of up to $42,000 in two tranches: (i) the first tranche is for an amount of up to $26,000 in order to finance the acquisition of Navios Serenity; and (ii) the second tranche is for an amount of up to $16,000 to
refinance the Navios Astra loan facility with Cyprus Popular Bank Public Co. Ltd. The two tranches bear interest at a rate of LIBOR plus 285 and 360 basis points, respectively. On June 27, 2014, Navios Holdings refinanced the existing facility,
entering into a new tranche for an amount of $30,000 in order to finance the acquisition of the Navios Gem, which was delivered in June 2014. The new tranche bears interest at a rate of LIBOR plus 275 basis points. As of December 31, 2016, the
first tranche is repayable in 13 quarterly installments of $362, with a final balloon payment of $14,400 on the last repayment date, the second tranche is repayable in 14 quarterly installments of $269, with a final balloon payment of $6,354 on the
last repayment date and the third tranche is repayable in 14 quarterly installments of $469, with a final balloon payment of $18,750 on the last repayment date. The loan facility requires compliance with certain financial covenants. As of
December 31, 2016, the total outstanding amount was $54,540.
In September 2013, Navios Holdings entered into a facility agreement
with DVB Bank SE for an amount of up to $40,000 in order to finance the acquisition of four Panamax vessels, delivered in August and September 2013. The facility bears interest at a rate of LIBOR plus 325 basis points. As of December 31, 2016,
the facility is repayable in 8 quarterly installments of $1,000, with a final balloon payment of $20,000 payable on the last repayment date. The loan facility requires compliance with certain financial covenants. In December 2015, Navios Sphera and
Navios Mars were added as collateral to this facility. As of December 31, 2016, the outstanding amount was $28,000.
In January 2016,
Navios Holdings entered into a facility agreement with DVB Bank SE for an amount of up to $41,000 to be drawn in two tranches, to finance the acquisition of Navios Mars and Navios Sphera. The facility bears interest at a rate of LIBOR plus 255 basis
points. The total amount drawn under the facility was $39,900. The first tranche is repayable in five quarterly installments of $492 each, followed by 16 quarterly installments of $369 each, and a final balloon payment of $14,760 on the last payment
day. The second tranche is repayable in five quarterly installments of approximately $377 each, followed by 16 installments of $220 each, and a final balloon payment of $8,764 on the last payment day. The loan facility also requires compliance with
certain covenants. As of December 31, 2016, the outstanding amount was $37,293.
Alpha Bank A.E.:
On November 6, 2014,
Navios Holdings entered into a facility agreement with Alpha Bank A.E. for an amount of up to $31,000 in order to finance part of the acquisition of a Capesize vessel. The loan bears interest at a rate of LIBOR plus 300 basis points. As of
December 31, 2016, the facility is repayable in 24 quarterly installments of $450, with a final balloon payment of $16,600 on the last repayment date. The loan facility requires compliance with certain financial covenants. As of
December 31, 2016, the outstanding amount was $27,400.
On November 3, 2016, Navios Holdings entered into a facility agreement
with Alpha Bank A.E. for an amount of up to $16,125 in order to refinance one Capesize vessel. The facility bears interest at a rate of LIBOR plus 300 basis points. The facility is repayable in four quarterly installments of $250, followed by 16
quarterly installments of $275 each, with a final balloon payment of $10,725 payable on the last repayment date. The first instalment will be due 15 months from the loan drawdown date. The loan facility requires compliance with certain financial
covenants. As of December 31, 2016, the outstanding amount was $16,125.
The facilities are secured by first priority mortgages on
certain of Navios Holdings vessels and other collateral.
The credit facilities contain a number of restrictive covenants that limit
Navios Holdings and/or certain of its subsidiaries from, among other things: incurring or guaranteeing indebtedness; entering into affiliate transactions; charging, pledging or encumbering the vessels securing such facilities; changing the flag,
class, management or ownership of certain Navios Holdings vessels; changing the commercial and technical management of certain Navios Holdings vessels; selling or changing the ownership of certain Navios Holdings vessels; and
subordinating the obligations under the credit facilities to any general and administrative costs relating to the vessels. The credit facilities also require the vessels to comply with the ISM Code and ISPS Code and to maintain valid safety
F-33
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
management certificates and documents of compliance at all times. Additionally, the credit facilities require compliance with the covenants contained in the indentures governing the 2019 Notes
and the 2022 Notes. Among other events, it will be an event of default under the credit facilities if the financial covenants are not complied with or if Angeliki Frangou and her affiliates, together, own less than 20% of the outstanding share
capital of Navios Holdings.
The majority of the Companys senior secured credit facilities require compliance with maintenance
covenants, including
(i) value-to-loan
ratio covenants, based on either charter-adjusted valuations, or charter-free valuations, ranging from over 110% to 130%,
(ii) minimum liquidity up to a maximum of $40,000, and (iii) net total debt divided by total assets, as defined in each senior secured credit facility, ranging from a maximum of 75% to 80%. Certain covenants in our senior secured credit
facilities have been waived for a specific period of time up ranging from a minimum of two quarters to a maximum of three quarters (from the current balance sheet date) and/or amended to include
(i) value-to-loan
ratio covenants, based on either charter-adjusted valuations, or charter-free valuations, ranging from over 90% to 130%, and (ii) net total debt divided by total assets, as defined
in each senior secured credit facility, ranging from a maximum of 80% to 90%.
As of December 31, 2016, the Company was in compliance
with all of the covenants under each of its credit facilities.
Navios Acquisition Loan
On September 19, 2016, Navios Holdings entered into a secured credit facility of up to $70,000 with Navios Acquisition. Please see also
Note 15.
Navios Logistics loans
2019
Logistics Senior Notes
On April 12, 2011, Navios Logistics and its wholly-owned subsidiary Navios Logistics Finance (US) Inc.
(Logistics Finance and, together, the Logistics
Co-Issuers)
issued $200,000 in aggregate principal amount of senior notes due on April 15, 2019 at a fixed rate of 9.25% (the
Existing 2019 Logistics Senior Notes). On March 12, 2013, the Logistics
Co-Issuers
issued $90,000 in aggregate principal amount of 9.25% Logistics Senior Notes due 2019 (the Additional
2019 Logistics Senior Notes, and together with the Existing 2019 Logistics Senior Notes, the 2019 Logistics Senior Notes) at a premium, with a price of 103.750%.
On May 5, 2014, the Logistics
Co-Issuers
completed a cash tender offer (the Tender
Offer) and related solicitation of consents for certain proposed amendments to the indenture governing the 2019 Logistics Senior Notes, for any and all of their outstanding 2019 Logistics Senior Notes. After the purchase by the Logistics
Co-Issuers
of all of the 2019 Logistics Senior Notes validly tendered and not validly withdrawn prior to the consent payment deadline, the Logistics
Co-Issuers
redeemed for
cash all the 2019 Logistics Senior Notes that remained outstanding after the completion of the Tender Offer, plus accrued and unpaid interest to, but not including, the redemption date. The effect of this transaction was the recognition of a $27,281
loss in the consolidated statement of comprehensive (loss)/ income under Loss on bond and debt extinguishment, consisting of a $7,881 loss relating to the accelerated amortization of the unamortized deferred finance costs, a $3,095 gain
relating to the accelerated amortization of unamortized Additional 2019 Logistics Senior Notes premium and a $22,495 loss relating to tender premium fees and expenses.
2022 Logistics Senior Notes
On
April 22, 2014, the Logistics
Co-Issuers
completed the sale of $375,000 in aggregate principal amount of senior notes due on May 1, 2022 at a fixed rate of 7.25% (the 2022 Logistics Senior
Notes). The net proceeds from the sale of 2022 Logistics Senior Notes were partially used to redeem any and all of 2019 Logistics Senior Notes and pay related transaction fees and expenses. The 2022 Logistics Senior Notes are unregistered and
fully and unconditionally guaranteed, jointly and severally, by all of Navios Logistics direct and indirect subsidiaries except for Horamar do Brasil Navegação Ltda (Horamar do Brasil), Naviera Alto Parana S.A.
(Naviera Alto Parana), and Terra Norte Group S.A. (Terra Norte), which are deemed to be immaterial, and Logistics Finance, which is the
co-issuer
of the 2022 Logistics Senior Notes. The
subsidiary guarantees are full and unconditional, except that the indenture provides for an individual subsidiarys guarantee to be automatically released in certain customary circumstances, such as in connection with a sale or
other disposition of all or substantially all of the assets of the subsidiary, in connection with the sale of a majority of the capital stock of the subsidiary, if the subsidiary is designated as an unrestricted subsidiary in accordance
with the indenture, upon liquidation or dissolution of the subsidiary or upon legal or covenant defeasance or satisfaction and discharge of the 2022 Logistics Senior Notes.
The Logistics
Co-Issuers
have the option to redeem the 2022 Logistics Senior Notes in whole or in
part, at their option, at any time (i) before May 1, 2017, at a redemption price equal to 100% of the principal amount plus the applicable make-whole premium plus
F-34
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
accrued and unpaid interest, if any, to the redemption date and (ii) on or after May 1, 2017, at a fixed price of 105.438%, which price declines ratably until it reaches par in 2020. At
any time before May 1, 2017, the Logistics
Co-Issuers
may redeem up to 35% of the aggregate principal amount of the 2022 Logistics Senior Notes with the net proceeds of an equity offering at 107.250% of
the principal amount of the 2022 Logistics Senior Notes, plus accrued and unpaid interest, if any, to the redemption date so long as at least 65% of the originally issued aggregate principal amount of the 2022 Logistics Senior Notes remains
outstanding after such redemption. In addition, upon the occurrence of certain change of control events, the holders of the 2022 Logistics Senior Notes will have the right to require the Logistics
Co-Issuers
to repurchase some or all of the 2022 Logistics Senior Notes at 101% of their face amount, plus accrued and unpaid interest to the repurchase date.
The indenture governing the 2022 Logistics Senior Notes contains covenants which, among other things, limit the incurrence of additional
indebtedness, issuance of certain preferred stock, the payment of dividends in excess of 6% per annum of the net proceeds received by or contributed to Navios Logistics in or from any public offering, redemption or repurchase of capital stock or
making restricted payments and investments, creation of certain liens, transfer or sale of assets, entering into transactions with affiliates, merging or consolidating or selling all or substantially all of Navios Logistics properties and assets and
creation or designation of restricted subsidiaries.
The indenture governing the 2022 Logistics Senior Notes include customary events of
default, including failure to pay principal and interest on the 2022 Logistics Senior Notes, a failure to comply with covenants, a failure by Navios Logistics or any significant subsidiary or any group of restricted subsidiaries that, taken
together, would constitute a significant subsidiary to pay material judgments or indebtedness and bankruptcy and insolvency events with respect to us or any significant subsidiary or any group of restricted subsidiaries that, taken together, would
constitute a significant subsidiary.
As of December 31, 2016, all subsidiaries, including Logistics Finance, Horamar do Brasil,
Naviera Alto Parana and Terra Norte are 100% owned. Logistics Finance, Horamar do Brasil, Naviera Alto Parana and Terra Norte do not have any independent assets or operations.
In addition, there are no significant restrictions on (i) the ability of the parent company, any issuer (or
co-issuer)
or any guarantor subsidiaries of the 2022 Logistics Senior Notes to obtain funds by dividend or loan from any of their subsidiaries or (ii) the ability of any subsidiaries to transfer funds to the
issuer (or
co-issuer)
or any guarantor subsidiaries.
The Logistics
Co-Issuers
were in compliance with the covenants as of December 31, 2016.
Navios Logistics Notes Payable
In connection with the purchase of mechanical equipment for the expansion of its dry port terminal, Corporacion Navios S.A.
(CNSA) entered into an unsecured export financing line of credit for a total amount of $41,964, including all related fixed financing costs of $5,949, available in multiple drawings upon the completion of certain milestones
(Drawdown Events). CNSA incurs the obligation for the respective amount drawn by signing promissory notes (Navios Logistics Notes Payable). Each drawdown is repayable in 16 consecutive semi-annual installments, starting six
months after the completion of each Drawdown Event. Together with each Note Payable, CNSA shall pay interest equal to
six-month
LIBOR. The unsecured export financing line is fully and unconditionally
guaranteed by Navios Logistics. As of December 31, 2016, the remaining available amount was $826.
Navios Logistics BBVA Loan Facility
On December 15, 2016, Navios Logistics entered into a facility with Banco Bilbao Vizcayan Argentaria Uruguay S.A. (BBVA) for
an amount of $25,000, for general corporate purposes. The loan bears interest at a rate of LIBOR (180 days) plus 325 basis points. The loan is repayable in twenty quarterly installments, starting on June 19, 2017, and secured by assignments of
certain receivables. As of December 31, 2016, the outstanding amount of the loan was $25,000.
Other indebtedness
In connection with the acquisition of Hidronave S.A. on October 29, 2009, Navios Logistics assumed a $817 loan facility that was entered
into by Hidronave S.A. in 2001, in order to finance the construction of the pushboat Nazira. As of December 31, 2016, the outstanding loan balance was $321 ($390 as of December 31, 2015). The loan facility bears interest at a fixed rate of
600 basis points. The loan is repayable in monthly installments of $6 each and the final repayment must occur prior to August 10, 2021.
During the year ended December 31, 2016, the Company paid $40,737, of which $21,635 related to scheduled repayment installments for the
year 2016, $13,802 related to the refinancing of one of its secured credit facilities and $5,300 related to the balloon payments originally due in 2019 and 2020.
The annual weighted average interest rates of the Companys total borrowings were 6.87%, 6.98% and 7.18% for the year ended
December 31, 2016, 2015 and 2014, respectively.
F-35
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The maturity table below reflects the principal payments for the next five years and
thereafter of all borrowings of Navios Holdings (including Navios Logistics) outstanding as of December 31, 2016, based on the repayment schedules of the respective loan facilities and the outstanding amount due under the debt securities.
|
|
|
|
|
Year
|
|
|
|
2017
(1)
|
|
$
|
30,790
|
|
2018
|
|
|
109,552
|
|
2019
|
|
|
324,765
|
|
2020
|
|
|
72,103
|
|
2021
|
|
|
29,021
|
|
2022 and thereafter
|
|
|
1,109,184
|
|
|
|
|
|
|
Total
|
|
$
|
1,675,415
|
|
|
|
|
|
|
(1)
|
In February 2017, we agreed with one of our financing banks on the deferral of principal payments amounting to $3,711, originally due in 2017, to be paid in 2018.
|
NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair
value of financial instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash and cash equivalents:
The carrying amounts reported in the consolidated balance sheets for interest bearing deposits and
money market funds approximate their fair value because of the short maturity of these investments.
Restricted cash:
The
carrying amounts reported in the consolidated balance sheets for interest bearing deposits approximate their fair value because of the short maturity of these investments.
Borrowings:
The book value has been adjusted to reflect the net presentation of deferred financing costs. The outstanding
balance of the floating rate loans continues to approximate their fair value, excluding the effect of any deferred finance costs. The 2019 Notes, the 2022 Notes, the 2022 Logistics Senior Notes, the Navios Acquisition Loan and one Navios
Logistics loan are fixed rate borrowings and their fair value was determined based on quoted market prices.
Capital
leases:
The capital leases are fixed rate obligations and their carrying amounts approximate their fair value.
Loan
receivable from affiliate companies:
The carrying amount of the fixed rate loan approximates its fair value.
Loan payable
to affiliate company:
The carrying amount of the fixed rate loan approximates its fair value.
Long-term receivable from
affiliate company:
The carrying amount of the floating rate receivable approximates its fair value.
Long-term payable to
affiliate company:
The carrying amount of the long-term payable approximates its fair value.
Investments in
available-for-sale
securities:
The carrying amount of the investments in
available-for-sale
securities reported in the consolidated balance sheets represents unrealized gains and losses on these securities, which are reflected directly in
equity unless an unrealized loss is considered other-than-temporary, in which case it is transferred to the consolidated statements of comprehensive income/(loss). During the third quarter of 2016, the Company sold all its
available-for-sale
securities.
Long-term payables to
affiliate companies:
The carrying amount of other long-term payables to affiliate companies approximates their fair value.
F-36
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The estimated fair values of the Companys financial instruments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
December 31, 2015
|
|
|
|
Book Value
|
|
|
Fair Value
|
|
|
Book Value
|
|
|
Fair Value
|
|
Cash and cash equivalents
|
|
$
|
135,992
|
|
|
$
|
135,992
|
|
|
$
|
163,412
|
|
|
$
|
163,412
|
|
Restricted cash
|
|
$
|
5,386
|
|
|
$
|
5,386
|
|
|
$
|
13,480
|
|
|
$
|
13,480
|
|
Investments in
available-for-sale-securities
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,173
|
|
|
$
|
5,173
|
|
Loan receivable from affiliate company
|
|
$
|
23,008
|
|
|
$
|
23,008
|
|
|
$
|
16,474
|
|
|
$
|
16,474
|
|
Long-term receivable from affiliate companies
|
|
$
|
11,105
|
|
|
$
|
11,105
|
|
|
$
|
|
|
|
$
|
|
|
Capital lease obligations, including current portion
|
|
$
|
(17,617
|
)
|
|
$
|
(17,617
|
)
|
|
$
|
(20,649
|
)
|
|
$
|
(20,649
|
)
|
Senior and ship mortgage notes, net
|
|
$
|
(1,296,537
|
)
|
|
$
|
(974,170
|
)
|
|
$
|
(1,350,941
|
)
|
|
$
|
(735,002
|
)
|
Long-term debt, including current portion
|
|
$
|
(304,682
|
)
|
|
$
|
(308,080
|
)
|
|
$
|
(230,367
|
)
|
|
$
|
(233,526
|
)
|
Loan payable to affiliate company
|
|
$
|
(49,876
|
)
|
|
$
|
(51,240
|
)
|
|
$
|
|
|
|
$
|
|
|
Long-term payable to affiliate companies
|
|
$
|
(6,399
|
)
|
|
$
|
(6,399
|
)
|
|
$
|
|
|
|
$
|
|
|
The following table set forth our assets that are measured at fair value on a recurring basis categorized by
fair value hierarchy level. As required by the fair value guidance, assets are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no assets and/or liabilities measured at
fair value on a recurring basis as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of December 31, 2015
|
|
Assets
|
|
Total
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level I)
|
|
|
Significant Other
Observable
Inputs
(Level II)
|
|
|
Significant
Unobservable
Inputs
(Level III)
|
|
Investments in
available-for-sale
securities
|
|
$
|
5,173
|
|
|
$
|
5,173
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,173
|
|
|
$
|
5,173
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys assets measured at fair value on a non-recurring basis were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements as of December 31, 2016
|
|
|
|
Total
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level I)
|
|
|
Significant Other
Observable
Inputs
(Level II)
|
|
|
Significant
Unobservable
Inputs
(Level III)
|
|
Investments in affiliates
|
|
$
|
148,095
|
|
|
$
|
148,095
|
|
|
$
|
|
|
|
$
|
|
|
The Company recorded an OTTI loss of $228,026 on its investments in Navios Partners and Navios Acquisition
during the year ended December 31, 2016, thus reducing their total carrying value to $148,095 as at December 31, 2016.
Fair Value Measurements
The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon
the fair value hierarchy, are as follows:
Level I: Inputs are unadjusted, quoted prices for identical assets or liabilities in active
markets that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
Level II: Inputs
other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III: Inputs that are unobservable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2016
|
|
|
|
Total
|
|
|
(Level I)
|
|
|
(Level II)
|
|
|
(Level III)
|
|
Cash and cash equivalents
|
|
$
|
135,992
|
|
|
$
|
135,992
|
|
|
$
|
|
|
|
$
|
|
|
Restricted cash
|
|
$
|
5,386
|
|
|
$
|
5,386
|
|
|
$
|
|
|
|
$
|
|
|
Loan receivable from affiliate
company
(2)
|
|
$
|
23,008
|
|
|
$
|
|
|
|
$
|
23,008
|
|
|
$
|
|
|
Long-term receivable from affiliate
companies
(2)
|
|
$
|
11,105
|
|
|
$
|
|
|
|
$
|
11,105
|
|
|
$
|
|
|
Capital lease obligations, including current
portion
(1)
|
|
$
|
(17,617
|
)
|
|
$
|
|
|
|
$
|
(17,617
|
)
|
|
$
|
|
|
Senior and ship mortgage notes
|
|
$
|
(974,170
|
)
|
|
$
|
(974,170
|
)
|
|
$
|
|
|
|
$
|
|
|
Long-term debt, including current
portion
(1)
|
|
$
|
(308,080
|
)
|
|
$
|
|
|
|
$
|
(308,080
|
)
|
|
$
|
|
|
Loan payable to affiliate company
(2)
|
|
$
|
(51,240
|
)
|
|
$
|
|
|
|
$
|
(51,240
|
)
|
|
$
|
|
|
Long-term payable to affiliate
companies
(2)
|
|
$
|
(6,399
|
)
|
|
$
|
|
|
|
$
|
(6,399
|
)
|
|
$
|
|
|
F-37
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2015
|
|
|
|
Total
|
|
|
(Level I)
|
|
|
(Level II)
|
|
|
(Level III)
|
|
Cash and cash equivalents
|
|
$
|
163,412
|
|
|
$
|
163,412
|
|
|
$
|
|
|
|
$
|
|
|
Restricted cash
|
|
$
|
13,480
|
|
|
$
|
13,480
|
|
|
$
|
|
|
|
$
|
|
|
Loan receivable from affiliate
companies
(2)
|
|
$
|
16,474
|
|
|
$
|
|
|
|
$
|
16,474
|
|
|
$
|
|
|
Senior and ship mortgage notes
|
|
$
|
(735,002
|
)
|
|
$
|
(735,002
|
)
|
|
$
|
|
|
|
$
|
|
|
Capital lease obligations, including current
portion
(1)
|
|
$
|
(20,649
|
)
|
|
$
|
|
|
|
$
|
(20,649
|
)
|
|
$
|
|
|
Long-term debt, including current
portion
(1)
|
|
$
|
(233,526
|
)
|
|
$
|
|
|
|
$
|
(233,526
|
)
|
|
$
|
|
|
(1)
|
The fair value of the Companys long-term debt/ Capital lease obligations is estimated based on currently available debt with similar contract terms, interest rates and remaining maturities, published quoted market
prices as well as taking into account the Companys creditworthiness.
|
(2)
|
The fair value of the Companys loan receivable from/ payable to affiliate companies and long-term receivable from/payable to affiliate companies is estimated based on currently available debt with similar contract
terms, interest rate and remaining maturities as well as taking into account the counterpartys creditworthiness.
|
NOTE 12: EMPLOYEE
BENEFIT PLANS
Retirement Saving Plan
The Company sponsors an employee saving plan covering all of its employees in the United States. The Companys contributions to the
employee saving plan during the years ended December 31, 2016, 2015 and 2014, were approximately $69, $96 and $101, respectively, which included a discretionary contribution of $0, $14, and $17, respectively.
Defined Benefit Pension Plan
The Company
sponsors a legacy unfunded defined benefit pension plan that covers certain Bahamian and Uruguayan nationals and former Navios Corporation employees. The liability related to the plan is recognized based on actuarial valuations. The current portion
of the liability is included in accrued expenses and the
non-current
portion of the liability is included in other long-term liabilities. There are no pension plan assets.
The Greek office employees are protected by the Greek Labor Law. According to the law, the Company is required to pay retirement indemnities
to employees on dismissal, or on leaving with an entitlement to a full security retirement pension. Please refer to Note 2(s).
Stock Plan
The Company has awarded restricted share units, shares of restricted common stock and restricted stock units to its employees, officers and
directors. The restriction lapses in two or three equal tranches, over the requisite service periods, of one, two and three years from the grant date. The Company has also awarded share appreciation rights and stock options to its officers and
directors only, based on service conditions, which vest in three equal tranches over the requisite service periods of one, two and three years from the grant date. Each option expires seven years after its grant date. Please refer to Note 2(s).
On December 11, 2013, the Company awarded shares of restricted stock and restricted stock units to its employees, officers and directors
and stock options to its officers and directors, which vested all at once upon achievement of the internal performance criteria. As of December 31, 2014, the Company determined that it was probable that the performance criteria of these awards
would be met and recognized a compensation expense of $3,753.
On December 15, 2014, the Company awarded shares of restricted stock
and restricted stock units to its employees, officers and directors and stock options to its officers and directors, which vest all at once upon achievement of the internal performance criteria. As of December 31, 2015, the Company determined
that it was probable that the performance criteria of these awards would be met and recognized a compensation expense of $2,615.
During
the years ended December 31, 2016 and 2015, the Company did not award any restricted stock, restricted stock units or stock options, which vest upon achievement of certain performance conditions.
F-38
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The fair value of all share appreciation rights awards and stock option awards has been
calculated based on the modified Black-Scholes method. A description of the significant assumptions used to estimate the fair value of the stock option awards is set out below:
|
|
|
Expected term:
The Company began granting stock options in October 2007. The first stock option exercise was in 2010 and the number of options exercised during each of the years ended December 31, 2014
(143,189), 2013 (153,556), 2012 (29,251), 2011 (130,578) and 2010 (130,577) was small in relation to the total number of options granted. No stock options were exercised during the year ended December 31, 2016 and 2015. Therefore, due
to limited historical share option exercise experience to provide for a reasonable basis upon which to estimate expected term, the Company opted to apply the simplified method.
|
The simplified method used includes taking the average of the weighted average time to vesting and the contractual
term of the share appreciation rights and option awards. The service conditions share appreciation rights and option awards vest over three years at 33.3%, 33.3% and 33.4% respectively, resulting in a weighted average time to vest of approximately
2 years. The contractual term of the award is 7 years. Utilizing the simplified approach formula, the derived expected term estimate for the Companys service conditions share appreciation rights and option award is 4.5 years.
|
|
|
Expected volatility:
The historical volatility of Navios Holdings shares was used in order to estimate the volatility of the share appreciation rights and stock option awards. The final expected volatility
estimate, which equals the historical estimate, for the service conditions option awards was 84.71%, 55.17% and 47.06% for 2016, 2015 and 2014, respectively, and for the performance conditions option awards was 58.78% and 41.48% for 2014 and 2013,
respectively.
|
|
|
|
Expected dividends:
The expected dividend is based on the current dividend, our historical pattern of dividend changes and the market price of our stock.
|
|
|
|
Risk-free rate:
Navios Holdings has selected to employ the risk-free
yield-to-maturity
rate to match the expected term estimated
under the simplified method. For the service conditions share appreciation rights and option awards, the 4.5 year
yield-to-maturity
rate as of the grant
date is 1.81%, 1.46% and 1.44% for 2016, 2015 and 2014, respectively. For the performance conditions option awards, the one year
yield-to-maturity
rate as of the grant
date is 0.22% and 0.13% for 2014 and 2013, respectively.
|
The fair value of restricted share unit, restricted stock and
restricted stock unit grants excludes dividends to which holders of restricted share units, restricted stock and restricted stock units are not entitled. The expected dividend assumption used in the valuation of restricted share unit, restricted
stock and restricted stock units grant is $0 for 2016 and 2015 and $0.06 per quarter for 2014.
The weighted average grant date fair value
of share appreciation rights and restricted common stock options granted during the year ended December 31, 2016 was $0.78 and $1.20, respectively.
The weighted average grant date fair value of stock options and restricted stock granted during the year ended December 31, 2015 was
$0.55 and $1.20, respectively.
The weighted average grant date fair value of stock options, restricted stock and restricted stock units
granted during the year ended December 31, 2014 was $1.14, $3.64 and $3.64, respectively.
The effect of compensation expense arising
from the stock-based arrangements described above amounted to $3,446, $5,591 and $7,719 for the years ended December 31, 2016, 2015 and 2014, respectively and it was reflected in general and administrative expenses on the consolidated
statements of comprehensive (loss)/income. The recognized compensation expense for the year is presented as an adjustment to reconcile net income to net cash provided by operating activities on the consolidated statements of cash flows.
F-39
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The summary of stock-based awards is summarized as follows (in thousands except share and per
share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Weighted
average
exercise
price
|
|
|
Weighted
average
remaining
term
|
|
|
Aggregate
fair value
|
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2013
|
|
|
5,139,030
|
|
|
|
5.50
|
|
|
|
4.81
|
|
|
|
9,209
|
|
Vested at December 31, 2013
|
|
|
911,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2013
|
|
|
753,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(143,189
|
)
|
|
|
|
|
|
|
|
|
|
|
(273
|
)
|
Forfeited or expired
|
|
|
(314,250
|
)
|
|
|
|
|
|
|
|
|
|
|
(1,610
|
)
|
Granted
|
|
|
1,123,003
|
|
|
|
3.64
|
|
|
|
|
|
|
|
1,084
|
|
Outstanding as of December 31, 2014
|
|
|
5,804,594
|
|
|
|
4.57
|
|
|
|
4.64
|
|
|
|
8,410
|
|
Vested at December 31, 2014
|
|
|
1,643,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2014
|
|
|
1,500,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
(159,828
|
)
|
|
|
|
|
|
|
|
|
|
|
(193
|
)
|
Granted
|
|
|
1,000,000
|
|
|
|
1.2
|
|
|
|
|
|
|
|
552
|
|
Outstanding as of December 31, 2015
|
|
|
6,644,766
|
|
|
|
4,09
|
|
|
|
4.23
|
|
|
|
8,769
|
|
Vested at December 31, 2015
|
|
|
730,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2015
|
|
|
730,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
|
(348,520
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
2,500,000
|
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2016
|
|
|
8,796,246
|
|
|
|
3.20
|
|
|
|
4.41
|
|
|
|
9,804
|
|
Restricted stock and restricted stock units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non Vested as of December 31, 2013
|
|
|
1,883,983
|
|
|
|
|
|
|
|
1.40
|
|
|
|
11,220
|
|
Granted
|
|
|
1,175,353
|
|
|
|
|
|
|
|
|
|
|
|
4,278
|
|
Vested
|
|
|
(1,058,903
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,580
|
)
|
Forfeited or expired
|
|
|
(3,089
|
)
|
|
|
|
|
|
|
|
|
|
|
(19
|
)
|
Non Vested as of December 31, 2014
|
|
|
1,997,344
|
|
|
|
|
|
|
|
2.00
|
|
|
|
10,899
|
|
Granted
|
|
|
2,540,000
|
|
|
|
|
|
|
|
|
|
|
|
3,048
|
|
Vested
|
|
|
(812,847
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,746
|
)
|
Forfeited or expired
|
|
|
(3,538
|
)
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
Non Vested as of December 31, 2015
|
|
|
3,720,959
|
|
|
|
|
|
|
|
2.45
|
|
|
|
8,186
|
|
Granted
|
|
|
2,540,000
|
|
|
|
|
|
|
|
|
|
|
|
3,048
|
|
Vested
|
|
|
(1,755,017
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,122
|
)
|
Forfeited or expired
|
|
|
(3,408
|
)
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
Non Vested as of December 31, 2016
|
|
|
4,502,534
|
|
|
$
|
|
|
|
|
2.55
|
|
|
$
|
6,100
|
|
The estimated compensation cost relating to service conditions of
non-vested
(i) share appreciation rights and stock options and (ii) restricted share units, restricted stock and restricted stock unit awards, not yet recognized was $2,156 and $4,705, respectively,
as of December 31, 2016 and is expected to be recognized over the weighted average period of 3.10 years.
NOTE 13: COMMITMENTS AND CONTINGENCIES
As of December 31, 2016, the Company was contingently liable for letters of guarantee and letters of credit amounting to $590
(December 31, 2015: $590) issued by various banks in favor of various organizations and the total amount was collateralized by cash deposits, which were included as a component of restricted cash.
Navios Logistics has issued a guarantee and indemnity letter that guarantees the performance by Petrolera San Antonio S.A. (a consolidated
subsidiary) of all its obligations to Vitol S.A. up to $12,000. This guarantee expires on March 1, 2018.
The Company is involved in
various disputes and arbitration proceedings arising in the ordinary course of business. Provisions have been recognized in the financial statements for all such proceedings where the Company believes that a liability may be probable, and for which
the amounts can be reasonably estimated, based upon facts known on the date the financial statements were prepared. Although the Company cannot predict with certainty the ultimate resolutions of these matters, in the opinion of management, the
ultimate disposition of these matters is not expected to have a material adverse effect on the Companys financial position, results of operations or liquidity.
F-40
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
As of December 31, 2016, Navios Logistics had obligations related to the acquisition of
three new pushboats and the expansion of its dry port facility of $10,933 and $8,734, respectively, until the third quarter of 2017.
Navios Logistics had a dispute with Vale regarding the termination date of a COA contract, which was under arbitration proceedings in New
York. Navios Logistics has received full security for its claim to date. As of December 31, 2016, related to this arbitration, Navios Logistics issued a letter of credit amounting to $2,900 and the total amount was collateralized by a cash
deposit, which was presented as restricted cash in the accompanying balance sheets. For details on the New York arbitration ruling in favor of Navios Logistics, please see Note 25.
On March 30, 2016, Navios Logistics received written notice from Vale stating that Vale will not be performing the service contract
entered into between CNSA and Vale on September 27, 2013, relating to the iron ore port facility currently under construction in Nueva Palmira, Uruguay. Navios Logistics initiated arbitration proceedings in London on June 10, 2016 pursuant
to the dispute resolution provisions of the service contract. On December 20, 2016, a London arbitration tribunal ruled that the Vale port contract remains in full force and effect. If Vale were to further repudiate or renounce the contract,
Navios Logistics may elect to terminate the contract and then would be entitled to damages calculated by reference to guaranteed volumes and agreed tariffs for the remaining period of the contract.
On April 1, 2016, Navios Holdings was named as a defendant in a putative shareholder derivative lawsuit brought by two alleged shareholders of
Navios Acquisition purportedly on behalf of nominal defendant, Navios Acquisition, in the United States District Court for the Southern District of New York, captioned Metropolitan Capital Advisors International Ltd., et al. v. Navios
Maritime Holdings, Inc. et al., No. 1:16-cv-02437. The lawsuit challenged the March 9, 2016 loan agreement between Navios Holdings and Navios Acquisition pursuant to which Navios Acquisition agreed to provide a $50,000 credit facility (the
Revolver) to Navios Holdings.
On April 14, 2016, Navios Holdings and Navios Acquisition announced that the Revolver had been
cancelled, and that no borrowings had been made under the Revolver. In June 2016, the parties reached an agreement resolving the plaintiffs application for attorneys fees and expenses which was approved by an order of the Court. The
litigation was dismissed upon notice of the order being provided to Navios Acquisitions shareholders via the inclusion of the order as an attachment to a Navios Acquisition Form 6-K and the payment of $775 by Navios Acquisition in satisfaction
of the plaintiffs request for attorneys fees and expenses. A copy of the order was provided as an exhibit to Navios Acquisitions Form 6-K filed with the Securities and Exchange Commission on June 9, 2016.
The Company, in the normal course of business, entered into contracts to time
charter-in
vessels for
various periods through 2026.
NOTE 14: LEASES
Chartered-in
vessels, barges, pushboats and office space:
As of December 31, 2016, the Companys future minimum commitments, net of commissions under
chartered-in
vessels, barges, pushboats and office space were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charter-in
vessels
in operation
|
|
|
Charter-in
vessels
to be delivered
|
|
|
Office space
|
|
2017
|
|
$
|
110,645
|
|
|
$
|
13,783
|
|
|
$
|
2,687
|
|
2018
|
|
|
104,091
|
|
|
|
13,988
|
|
|
|
1,921
|
|
2019
|
|
|
85,001
|
|
|
|
9,892
|
|
|
|
1,189
|
|
2020
|
|
|
73,663
|
|
|
|
9,919
|
|
|
|
508
|
|
2021
|
|
|
51,924
|
|
|
|
9,892
|
|
|
|
184
|
|
2022 and thereafter
|
|
|
92,488
|
|
|
|
29,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
517,812
|
|
|
$
|
86,512
|
|
|
$
|
6,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charter hire expense for Navios Holdings
chartered-in
vessels amounted
to $84,114, $134,364 and $111,386, for each of the years ended December 31, 2016, 2015 and 2014, respectively. Charter hire expense for logistics business
chartered-in
vessels amounted to $1,521, $1,307
and $2,468, for each of the years ended December 31, 2016, 2015 and 2014, respectively.
Rent expense for office space amounted to
$2,748, $2,508, and $2,804 for each of the years ended December 31, 2016, 2015 and 2014, respectively. The Company leases office space at 825 3rd Avenue, New York, New York, pursuant to a lease that expires in April 2019. The Company also
leases office space at 85 Akti Miaouli, Piraeus, Greece, pursuant to lease agreements that expire in 2017 and 2019. The Company also leases office space in Monaco pursuant to a lease that expires in June 2018. The Company also leases office space in
Antwerp, Belgium pursuant to a lease that expires in 2019.
Navios Logistics subsidiaries lease various premises in Argentina and
Paraguay that expire on various dates through 2021. The above table incorporates the lease commitments on all offices as disclosed above.
F-41
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Chartered-out
vessels, barges and pushboats:
The future minimum revenue, net of commissions, (i) for dry bulk vessels, expected to be earned on
non-cancelable
time charters and (ii) for the Companys logistics business, expected to be earned on
non-cancelable
time charters, COAs with minimum
guaranteed volumes and contracts with minimum guaranteed throughput in Navios Logistics ports, are as follows:
|
|
|
|
|
|
|
|
|
|
|
Dry bulk
vessels
|
|
|
Logistics
business
|
|
2017
|
|
$
|
30,093
|
|
|
$
|
112,803
|
|
2018
|
|
|
805
|
|
|
|
76,883
|
|
2019
|
|
|
|
|
|
|
76,641
|
|
2020
|
|
|
|
|
|
|
64,191
|
|
2021
|
|
|
|
|
|
|
52,569
|
|
2022 and thereafter
|
|
|
|
|
|
|
684,511
|
|
|
|
|
|
|
|
|
|
|
Total minimum revenue, net of commissions
|
|
$
|
30,898
|
|
|
$
|
1,067,598
|
|
|
|
|
|
|
|
|
|
|
Revenues from time charters are not generally received when a vessel is
off-hire,
which includes time required for scheduled maintenance of the vessel.
The future
minimum revenue of Navios Logistics, as presented in the table above, expected to be earned on
non-cancelable
contracts with minimum guaranteed throughput after the successful completion of the expansion of
Navios Logistics dry port facility is $44,200 per annum, based on current contract rates, for a period of 20 years.
Navios
Logistics future minimum revenue, as presented in the table above, expected to be earned on
non-cancelable
contracts under time charter after the successful completion of the construction of a river and
estuary tanker, is $41,640 for a period of five years, based on current contract rates.
NOTE 15: TRANSACTIONS WITH RELATED PARTIES
Office rent:
The Company has entered into lease agreements with Goldland Ktimatiki-Ikodomiki-Touristiki Xenodohiaki Anonimos Eteria and
Emerald Ktimatiki-Ikodomiki Touristiki Xenodohiaki Anonimos Eteria, both of which are Greek corporations that are currently majority-owned by Angeliki Frangou, Navios Holdings Chairman and Chief Executive Officer. The lease agreements provide
for the leasing of facilities located in Piraeus, Greece to house the operations of most of the Companys subsidiaries. The total annual lease payments are in aggregate 943 (approximately $1,044) and the lease agreements expire in 2017
and 2019. These payments are subject to annual adjustments, which are based on the inflation rate prevailing in Greece as reported by the Greek State at the end of each year.
Purchase of services:
The Company utilizes its affiliate company, Acropolis, as a broker. Commissions charged from Acropolis for each
of the years ended December 31, 2016, 2015 and 2014 were $0, $6 and $2, respectively. Included in the trade accounts payable at December 31, 2016 and 2015 was an amount due to Acropolis of $76 and $76, respectively.
Vessels charter hire:
From 2012, Navios Holdings has entered into
charter-in
contracts for
certain of Navios Partners vessels, all of which have been redelivered by April 2016.
In May 2012 and 2013, the Company entered
into two charters with Navios Partners for the Navios Aldebaran and the Navios Prosperity. On February 11, 2015, the Company and Navios Partners entered into a novation agreement whereby the rights to the time charter contract of the Navios
Aldebaran and the Navios Prosperity were transferred to Navios Holdings on February 28 and March 5, 2015, respectively.
In 2012
and 2013, the Company entered into various charters with Navios Partners for the Navios Apollon, Navios Libra, Navios Felicity and Navios Hope. In April 2015, these charters were further extended for approximately one year at a net daily rate of
$12.5, $12.0, $12.0, $10.0 plus 50/50 profit sharing based on actual earnings at the end of the period.
In 2015, the Company entered into
various charters with Navios Partners for the Navios Gemini, Navios Hyperion, Navios Soleil, Navios Harmony, Navios Orbiter, Navios Fantastiks, Navios Alegria, Navios Pollux and Navios Sun. The terms of these charters were approximately nine to
twelve months, at a net daily rate of $7.6, $12.0, $12.0, $12.0, $12.0, $12.5, $12.0, $11.4 and $12.0, respectively plus 50/50 profit sharing based on actual earnings at the end of the period.
In November 2016 the Company entered into a charter with a Navios Partners for the Navios Fulvia, a 2010-built Capesize vessel. The term of
this charter was approximately three months from November 2016, at a net daily rate of $11.5.
Total charter hire expense for all vessels
for the years ended December 31, 2016, 2015 and 2014 was $1,711, $39,727 and $28,162, respectively, and was included in the consolidated statements of comprehensive (loss)/income under Time charter, voyage and logistics business
expenses.
F-42
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Management fees:
Navios Holdings provides commercial and technical management services
to Navios Partners vessels for a daily fixed fee. This daily fee covers all of the vessels operating expenses, including the cost of drydock and special surveys. In each of October 2013, August 2014, and February 2015, the Company
amended its existing management agreement with Navios Partners to fix the fees for ship management services of its owned fleet at: (i) $4.0 daily rate per Ultra-Handymax vessel; (ii) $4.1 daily rate per Panamax vessel; (iii) $5.1 daily rate per
Capesize vessel; (iv) $6.5 daily rate per container vessel of TEU 6,800; (v) $7.2 daily rate per container vessel of more than TEU 8,000; and (vi) $8.5 daily rate per very large container vessel of more than TEU 13,000 through December 31,
2015. In February 2016, the Company further amended its existing management agreement to fix the fees for ship management services of its owned fleet at: (i) $4.1 daily rate per Ultra-Handymax vessel; (ii) $4.2 daily rate per Panamax vessel; (iii)
$5.25 daily rate per Capesize vessel; (iv) $6.7 daily rate per container vessel of TEU 6,800; (v) $7.4 daily rate per container vessel of more than TEU 8,000; and (vi) $8.75 daily rate per very large container vessel of more than TEU 13,000 through
December 31, 2017. Drydocking expenses under this agreement will be reimbursed by Navios Partners at cost at occurrence. Total management fees for the years ended December 31, 2016, 2015 and 2014 amounted to $59,209, $56,504 and $50,359,
respectively, and are presented net under the caption Direct vessel expenses.
Effective August 31, 2016, Navios Partners
could, upon request to Navios Holdings, partially or fully defer the reimbursement of dry docking and other extraordinary fees and expenses under the management agreement to a later date, but not later than January 5, 2018, and if reimbursed on
a later date, such amounts would bear interest at a rate of 1% per annum over LIBOR. Total amounts due from Navios Partners as of December 31, 2016 amounted to $11,105 (December 31, 2015: $0) and is presented under the caption Long-term
receivable from affiliate company.
Navios Holdings provides commercial and technical management services to Navios
Acquisitions vessels for a daily fee that was fixed until May 2014, of $6.0 per owned MR2 product tanker and chemical tanker vessel, $7.0 per owned LR1 product tanker vessel and $10.0 per owned VLCC vessel. This daily fee covers all of the
vessels operating expenses, other than certain fees and costs. Actual operating costs and expenses will be determined in a manner consistent with how the initial fixed fees were determined. Drydocking expenses until May 2014 were fixed under
this agreement for up to $300 per LR1 and MR2 product tanker vessel and will be reimbursed at cost for VLCC vessels. In May 2014, Navios Holdings extended the duration of its existing management agreement with Navios Acquisition until May 2020
and fixed the fees for ship management services of Navios Acquisition owned fleet for two additional years through May 2016 at the same rates for product tanker and chemical tanker vessels, and reduced the daily rate to $9.5 per VLCC
vessel. In May 2016, Navios Holdings amended its agreement with Navios Acquisition to fix the fees for ship management services of Navios Acquisition owned fleet at a daily fee of (i) $6.35 per MR2 product tanker and chemical tanker vessel;
(ii) $7.15 per LR1 product tanker vessel; and (iii) $9.5 per VLCC through May 2018. Drydocking expenses under this agreement will be reimbursed at cost at occurrence for all vessels.
Total management fees for the years ended December 31, 2016, 2015 and 2014 amounted to $97,866, $95,336 and $95,827, respectively, and
are presented net under the caption Direct vessel expenses.
Pursuant to a management agreement dated December 13, 2013,
Navios Holdings provides commercial and technical management services to Navios Europe Is tanker and container vessels. The term of this agreement is for a period of six years. Management fees under this agreement will be reimbursed at cost at
occurrence. Total management fees for the years ended December 31, 2016, 2015 and 2014 amounted to $20,855, $20,383 and $20,098, respectively, and are presented net under the caption Direct vessel expenses.
Pursuant to a management agreement dated November 18, 2014, as further amended in October 2016, Navios Holdings provides commercial and
technical management services to Navios Midstreams vessels for a daily fixed fee of $9.5 per owned VLCC vessel, effective through December 31, 2018. Drydocking expenses under this agreement will be reimbursed at cost at occurrence for all
vessels. The term of this agreement is for a period of five years. Total management fees for the years ended December 31, 2016, 2015 and 2014 amounted to $20,862, $17,613 and $1,672, respectively, and are presented net under the caption
Direct vessel expenses.
Pursuant to a management agreement dated June 5, 2015, Navios Holdings provides commercial and
technical management services to Navios Europe IIs dry bulker and container vessels. The term of this agreement is for a period of six years. Management fees under this agreement will be reimbursed at cost at occurrence. Total management fees
for the year ended December 31, 2016 and 2015 amounted to $23,527 and $9,581, respectively, and are presented net under the caption Direct vessel expenses.
Navios Partners Guarantee:
In November 2012 (as amended in March 2014), the Company entered into an agreement with Navios Partners (the
Navios Partners Guarantee) to provide Navios Partners with guarantees against counterparty default on certain existing charters, which had previously been covered by the charter insurance for the same vessels, same periods and same
amounts. The Navios Partners Guarantee provides for a maximum possible payout of $20,000 by the Company to Navios Partners. Premiums that are calculated on the same basis as the restructured charter insurance are included in the management fee that
is paid by Navios Partners to Navios Holdings pursuant to the management agreement. As of December 31, 2016, Navios Partners has submitted one claim under this agreement to the Company. As at December 31, 2016, the fair value of the claim
was estimated at $19,739 and included in Other long-term liabilities and deferred income in the consolidated balance sheet. During the year ended December 31, 2015, the Company initially recognized this claim as Other
expense in the consolidated statement of comprehensive (loss)/ income.
F-43
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
General and administrative expenses incurred on behalf of affiliates/Administrative fee
revenue from affiliates:
Navios Holdings provides administrative services to Navios Partners. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Navios Holdings extended
the duration of its existing administrative services agreement with Navios Partners until December 31, 2017, pursuant to its existing terms. Total general and administrative fees for the years ended December 31, 2016, 2015 and 2014
amounted to $7,751, $6,205 and $6,090, respectively.
Navios Holdings provides administrative services to Navios Acquisition.
Navios Holdings extended the duration of its existing administrative services agreement with Navios Acquisition until May 2020 pursuant to its existing terms. Navios Holdings is reimbursed for reasonable costs and expenses incurred in
connection with the provision of these services. Total general and administrative fees for the years ended December 31, 2016, 2015 and 2014 amounted to $9,427, $7,608 and $7,314, respectively.
Navios Holdings provides administrative services to Navios Logistics. In April 2016, Navios Holdings extended the duration of its
existing administrative services agreement with Navios Logistics until December 2021 pursuant to its existing terms. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total
general and administrative fees for the years ended December 31, 2016, 2015 and 2014 amounted to $1,000, $760 and $760, respectively. The general and administrative fees have been eliminated upon consolidation.
Pursuant to an administrative services agreement dated December 13, 2013, Navios Holdings provides administrative services to Navios
Europe Is tanker and container vessels. The term of this agreement is for a period of six years. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total general and
administrative fees for the years ended December 31, 2016, 2015 and 2014 amounted to $1,300, $800 and $800, respectively.
Pursuant
to an administrative services agreement dated November 18, 2014, Navios Holdings provides administrative services to Navios Midstream. The term of this agreement is for a period of five years. Navios Holdings is reimbursed for reasonable costs
and expenses incurred in connection with the provision of these services. Total general and administrative fees for the years ended December 31, 2016, 2015 and 2014 amounted to $1,500, $1,014 and $96, respectively.
Pursuant to an administrative services agreement dated June 5, 2015, Navios Holdings provides administrative services to Navios Europe
IIs dry bulk and container vessels. The term of this agreement is for a period of six years. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total general and
administrative fees charged for the year ended December 31, 2016 and 2015, amounted to $1,820 and $550, respectively.
Balance due
from/to affiliates (excluding Navios Europe I and Navios Europe II):
Balance due from affiliates as of December 31, 2016 amounted to
$0 (December 31, 2015: $8,887).
Balance due to affiliates as of December 31, 2016 amounted to $32,847 (December 31, 2015: $17,791) and the Long-term payable to affiliate
companies amounted to $6,399 (December 31, 2015: $0).
The balances mainly consisted of management fees, administrative fees, drydocking
and other expenses and amounts payable.
Omnibus agreements:
Navios Holdings has entered into an omnibus agreement with Navios
Partners (the Partners Omnibus
Agreement) in connection with the closing of Navios Partners IPO governing, among other things, when Navios Holdings and
Navios Partners may compete against each other as well as rights
of first offer on certain dry bulk carriers. Pursuant to the Partners
Omnibus Agreement, Navios Partners generally agreed not to acquire or own Panamax or Capesize dry bulk carriers under time
charters of three or more years without
the consent of an independent committee of Navios Partners. In addition, Navios Holdings has
agreed to offer to Navios Partners the opportunity to purchase vessels from Navios Holdings when such vessels are fixed under time
charters of
three or more years.
Navios Holdings entered into an omnibus agreement with Navios Acquisition and Navios Partners (the Acquisition
Omnibus Agreement) in connection with the closing of Navios Acquisitions initial vessel acquisition, pursuant to which, among other things, Navios Holdings and Navios Partners agreed not to acquire,
charter-in
or own liquid shipment vessels, except for container vessels and vessels that are primarily employed in operations in South America, without the consent of an independent committee of Navios
Acquisition. In addition, Navios Acquisition, under the Acquisition Omnibus Agreement, agreed to cause its subsidiaries not to acquire, own, operate or charter dry bulk carriers subject to specific exceptions. Under the Acquisition Omnibus
Agreement, Navios Acquisition and its subsidiaries granted to Navios Holdings and Navios Partners, a right of first offer on any proposed sale, transfer or other disposition of any of its dry bulk carriers and related charters owned or acquired by
Navios Acquisition. Likewise, Navios Holdings and Navios Partners agreed to grant a similar right of first offer to Navios Acquisition for any liquid shipment vessels it might own. These rights of first offer will not apply to a (i) sale,
transfer or other disposition of vessels between any affiliated subsidiaries, or pursuant to the terms of any charter or other agreement with a counterparty, or (ii) merger with or into, or sale of substantially all of the assets to, an
unaffiliated third party.
F-44
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
Navios Holdings entered into an omnibus agreement with Navios Midstream, Navios Acquisition
and Navios Partners in connection with the Navios Midstream IPO, pursuant to which Navios Acquisition, Navios Holdings, Navios Partners and their controlled affiliates generally have agreed not to acquire or own any VLCCs, crude oil tankers, refined
petroleum product tankers, LPG tankers or chemical tankers under time charters of five or more years without the consent of Navios Midstream. The omnibus agreement contains significant exceptions that will allow Navios Acquisition, Navios Holdings,
Navios Partners or any of their controlled affiliates to compete with Navios Midstream under specified circumstances.
Midstream
General Partner Option Agreement:
Navios Holdings entered into an option agreement, with Navios Acquisition under which Navios Acquisition, which owns and controls Navios Maritime Midstream Partners GP LLC (Midstream General
Partner), granted Navios Holdings the option to acquire a minimum of 25% of the outstanding membership interests in Midstream General Partner and the incentive distribution rights in Navios Midstream representing the right to receive an
increasing percentage of the quarterly distributions when certain conditions are met. The option shall expire on November 18, 2024. The purchase price for the acquisition for all or part of the option interest shall be an amount equal to its
fair market value. As of December 31, 2016, Navios Holdings had not exercised any part of that option.
Sale of Vessels and Sale
of Rights to Navios Partners:
Upon the sale of vessels to Navios Partners, Navios Holdings recognizes the gain immediately in earnings only to the extent of the interest in Navios Partners owned by third parties and defers recognition of the
gain to the extent of its own ownership interest in Navios Partners (the deferred gain). Subsequently, the deferred gain is amortized to income over the remaining useful life of the vessel. The recognition of the deferred gain is
accelerated in the event that (i) the vessel is subsequently sold or otherwise disposed of by Navios Partners or (ii) the Companys ownership interest in Navios Partners is reduced. In connection with the public offerings of common
units by Navios Partners, a pro rata portion of the deferred gain is released to income upon dilution of the Companys ownership interest in Navios Partners. As of December 31, 2016 and 2015, the unamortized deferred gain for all vessels
and rights sold totaled $11,846 and $13,680, respectively. For the years ended December 31, 2016, 2015 and 2014, Navios Holdings recognized $1,833, $2,621 and $5,278 of the deferred gain, respectively, in Equity in net earnings of
affiliated companies.
Participation in offerings of affiliates:
Refer to Note 8 for Navios Holdings participation in
Navios Acquisitions and Navios Partners offerings. On February 4, 2015, Navios Holdings entered into a share purchase agreement with Navios Partners pursuant to which Navios Holdings made an investment in Navios Partners by
purchasing common units, and general partnership interests, in order to maintain its 20.0% partnership interest in Navios Partners following its equity offering in February 2015. In connection with this agreement, Navios Holdings entered into a
registration rights agreement with Navios Partners pursuant to which Navios Partners provided Navios Holdings with certain rights relating to the registration of the common units. Navios Holdings has entered into additional share purchase agreements
on December 30, 2016, March 3, 2017, and March 23, 2017, for the purchase up to a total of 1,271,766 general partnership interests. See also Note 25.
The Navios Acquisition Credit Facilities:
On September 19, 2016, Navios Holdings entered into a secured credit facility of up to
$70,000 with Navios Acquisition. This credit facility is secured by all of the Companys interest in Navios Acquisition and 78.5% of the Companys interest in Navios Logistics, representing a majority of the shares outstanding of
Navios Logistics. This facility was provided for an arrangement fee of $700, is available for up to five drawings and has a fixed interest rate of 8.75%, compounded semi-annually to be paid upon maturity on November 15, 2018. As of
December 31, 2016, the outstanding balance was $49,876 which consists of $50,000 drawn amount plus the accrued interest of $1,240, net of unamortized balance of deferred fees of $1,364.
On November 11, 2014, Navios Acquisition entered into a short-term credit facility with Navios Holdings pursuant to which Navios
Acquisition could borrow up to $200,000 for general corporate purposes. The facility provided for an arrangement fee of $4,000, and bore fixed interest of 600 bps. All amounts drawn under this facility were fully repaid by the maturity date of
December 29, 2014.
In 2010, Navios Acquisition entered into a $40,000 credit facility with Navios Holdings, which matured in
December 2015. The facility was available for multiple drawings up to a limit of $40,000 and had a margin of LIBOR plus 300 basis points. The final maturity date was January 2, 2017. As of December 31, 2016 and 2015, there was no
outstanding amount under this facility.
The Navios Partners Credit Facility:
In May 2015, Navios Partners entered into a credit
facility with Navios Holdings of up to $60,000. The Navios Partners Credit Facility bears an interest of LIBOR plus 300 bps. The final maturity date was January 2, 2017. As of December 31, 2016 and 2015, there was no outstanding amount
under this facility. In April 2016, Navios Partners has drawn $21,000 from the Navios Partners Credit Facility, which was fully repaid during April 2016.
Balance due from Navios Europe I:
Balance due from Navios Europe I as of December 31, 2016 amounted to $2,376 (December 31, 2015:
$1,609) which included the net current amount receivable of $145 (December 31, 2015: $211) mainly consisting of management fees, accrued interest income earned under the Navios Revolving Loans I (as defined in Note 8) and other expenses and the
non-current
amount of
$2,231 (December 31, 2015: $1,398) related to the accrued interest income earned under the Navios Term Loans I (as defined in Note 8).
F-45
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The Navios Revolving Loans I and the Navios Term Loans I earn interest and an annual
preferred return, respectively, at 1,270 basis points per annum, on a quarterly compounding basis and are repaid from free cash flow (as defined in the loan agreement) to the fullest extent possible at the end of each quarter. There are no covenant
requirements or stated maturity dates.
As of December 31, 2016 and 2015, the outstanding amount relating to Navios Holdings
portion under the Navios Revolving Loans I was $7,125, under the caption Loan receivable from affiliate companies. As of December 31, 2016, the amount undrawn under the Revolving Loans I was $9,100, of which Navios Holdings is
committed to fund $4,323. See also Note 25 for the transfer of Navios Holdings participation in Navios Revolving Loans I and Navios Term Loans I to Navios Partners.
Balance due from Navios Europe II:
Balance due from Navios Europe II as of December 31, 2016, amounted to $10,453 (December 31,
2015: $4,196), which included the current amount of $8,402 (December 31, 2015: $3,571), mainly consisting of management fees and accrued interest income earned under the Navios Revolving Loans II (as defined in Note 8) and other expenses and the
non-current
amount of $2,051 (December 31, 2015: $625) related to the accrued interest income earned under the Navios Term Loans II (as defined in Note 8).
The Navios Revolving Loans II and the Navios Term Loans II earn interest and an annual preferred return, respectively, at 1,800 basis points
per annum, on a quarterly compounding basis and are repaid from free cash flow (as defined in the loan agreement) to the fullest extent possible at the end of each quarter. There are no covenant requirements or stated maturity dates.
As of December 31, 2016, the outstanding amount relating to Navios Holdings portion under the Navios Revolving Loans II was $11,602
(December 31, 2015: $7,327), under the caption Loan receivable from affiliate companies. As of December 31, 2016, the amount undrawn from the Navios Revolving Loans II was $19,075, of which Navios Holdings is committed to fund
$9,061. In March 2017, the amount undrawn from the Navios Revolving Loans II increased by $14,000.
NOTE 16: PREFERRED AND COMMON STOCK
Issuances to Employees and Exercise of Options
During 2016 and 2015, pursuant to the stock plan approved by the Board of Directors, no options were exercised.
On December 11, 2015, pursuant to the stock plan approved by the Board of Directors, Navios Holdings granted to its employees 2,540,000
shares of restricted common stock and 1,000,000 stock options.
During 2014, pursuant to the stock plan approved by the Board of
Directors, 15,000, 30,303, 19,626, 55,860 and 22,400 shares were issued following the exercise of options for cash at an exercise price of $3.18, $3.81, $5.87, $5.15 and $3.44 per share, respectively, for a total of $643.
On December 15, 2014, pursuant to the stock plan approved by the Board of Directors, Navios Holdings granted to its employees 1,151,052
shares of restricted common stock, 24,301 restricted stock units and 1,123,003 stock options.
Vested, Surrendered and Forfeited
During 2016, 24,970 restricted stock units, issued to the Companys employees in 2014 and 2013, vested.
During 2015, 16,960 restricted stock units, issued to the Companys employees in 2013 and 2012, vested.
During 2014, 41,748 restricted stock units, issued to the Companys employees in 2013, 2012 and 2011, vested.
During the year ended December 31, 2016 and 2015, 2,908 and 9,319 restricted shares of common stock, respectively, were forfeited upon
termination of employment.
Issuance of Cumulative Perpetual Preferred Stock
On January 28, 2014, the Company completed the sale of the Series G raising net proceeds of $47,846 (after deducting underwriting
discounts and offering expenses). See also Note 2(ac).
F-46
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
On July 8, 2014, the Company completed the sale of the Series H raising net proceeds of
$115,756 (after deducting underwriting discounts and offering expenses). See also Note 2(ac).
Series G and Series H ADS Exchange Offer
On November 8, 2016, the Company announced the completion of the offer to exchange cash and/or newly issued shares of common stock for any
and all outstanding of its Series G and Series H. A total number of 5,449 Series G and 18,982 Series H were validly tendered in the exchange offer, representing an aggregate book value of $61,078. The Company paid an aggregate of $9,323 in cash,
which includes tender offer expenses, and issued a total of 7,589,176 shares of common stock, with a fair value of $7,893 at the date of the issuance.
Conversion of Preferred Stock
During the
year ended December 31, 2016, there were no conversions of preferred stock.
In February 2016, Navios Holdings announced the
suspension of payment of quarterly dividends on its preferred stock, including the Series G and Series H. Total undeclared preferred dividends as of December 31, 2016 were $10,245 (net of cancelled dividends of $5,063, following the completion
of the offer to exchange cash and/or newly issued shares of common stock for any and all outstanding of its Series G and Series H).
During the year ended December 31, 2015, 1,134 shares of convertible preferred stock were automatically converted into 1,134,000 shares
of common stock. The shares of convertible preferred stock were converted pursuant to their original terms.
Navios Holdings had
outstanding as of December 31, 2016 and 2015, 117,131,407 and 110,468,753 shares of common stock, respectively, and preferred stock 49,504 (14,551 Series G, 29,018 Series H and 5,935 shares of convertible preferred stock) and 73,935 (20,000
Series G, 48,000 Series H and 5,935 shares of convertible preferred stock), respectively.
Acquisition of Treasury Stock
In November 2015, the Board of Directors approved a share repurchase program for up to $25,000 of the Navios Holdings common stock. Share
repurchases were made pursuant to a program adopted under Rule
10b5-1
under the Securities Exchange Act. Repurchases were subject to restrictions under the terms of the Companys credit facilities and
indenture. The program did not require any minimum purchase or any specific number or amount of shares and may be suspended or reinstated at any time in the Companys discretion and without notice. In particular, Navios Holdings, pursuant to
the terms of its Series G and Series H, may not redeem, repurchase or otherwise acquire its common stock or preferred shares, including the Series G and Series H (other than through an offer made to all holders of Series G and Series H) unless full
cumulative dividends on Series G and Series H, when payable, have been paid.
As of December 31, 2016 and 2015, 948,584 and 199,324
shares, respectively, were repurchased under this program, for a total consideration of $818 and $252, respectively. In total, up until February 2016, 1,147,908 common stock were repurchased under this program, for $1,070. Since that time, this
program has been suspended by the Company.
NOTE 17: INTEREST EXPENSE AND FINANCE COST
Interest expense and finance cost consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
Ended
December 31,
2016
|
|
|
For the Year
Ended
December 31,
2015
|
|
|
For the Year
Ended
December 31,
2014
|
|
Interest expense
|
|
$
|
107,787
|
|
|
$
|
108,488
|
|
|
$
|
109,550
|
|
Amortization and
write-off
of deferred financing
costs
|
|
|
5,653
|
|
|
|
4,524
|
|
|
|
4,061
|
|
Other
|
|
|
199
|
|
|
|
139
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and finance cost
|
|
$
|
113,639
|
|
|
$
|
113,151
|
|
|
$
|
113,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 18: SEGMENT INFORMATION
The Company currently has two reportable segments from which it derives its revenues: Dry bulk Vessel Operations and Logistics Business. The
reportable segments reflect the internal organization of the Company and are strategic businesses that offer different products and services. The Dry bulk Vessel Operations consists of the transportation and handling of bulk cargoes through the
ownership, operation, and trading of vessels, freight and FFAs. The Logistics Business consists of operating ports and transfer station terminals, handling of vessels, barges and push boats as well as upriver transport facilities in the Hidrovia
region.
F-47
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
The Company measures segment performance based on net income/ (loss) attributable to Navios
Holdings common stockholders. Inter-segment sales and transfers are not significant and have been eliminated and are not included in the following tables. Summarized financial information concerning each of the Companys reportable segments is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dry Bulk Vessel
Operations
for the
Year Ended
December 31,
2016
|
|
|
Logistics Business
for the
Year Ended
December 31,
2016
|
|
|
Total
for the
Year Ended
December 31,
2016
|
|
Revenue
|
|
$
|
199,446
|
|
|
$
|
220,336
|
|
|
$
|
419,782
|
|
Administrative fee revenue from affiliates
|
|
|
21,799
|
|
|
|
|
|
|
|
21,799
|
|
Interest income
|
|
|
4,132
|
|
|
|
815
|
|
|
|
4,947
|
|
Interest expense and finance cost
|
|
|
(89,399
|
)
|
|
|
(24,240
|
)
|
|
|
(113,639
|
)
|
Depreciation and amortization
|
|
|
(87,197
|
)
|
|
|
(26,628
|
)
|
|
|
(113,825
|
)
|
Equity/ (Loss) in net earnings of affiliated companies
|
|
|
(202,779
|
)
|
|
|
|
|
|
|
(202,779
|
)
|
Net (loss)/ income attributable to Navios Holdings common stockholders
|
|
|
(310,306
|
)
|
|
|
6,483
|
|
|
|
(303,823
|
)
|
Total assets
|
|
|
2,083,526
|
|
|
|
669,369
|
|
|
|
2,752,895
|
|
Goodwill
|
|
|
56,240
|
|
|
|
104,096
|
|
|
|
160,336
|
|
Capital expenditures
|
|
|
(60,420
|
)
|
|
|
(91,173
|
)
|
|
|
(151,593
|
)
|
Investment in affiliates
|
|
|
160,071
|
|
|
|
|
|
|
|
160,071
|
|
Cash and cash equivalents
|
|
|
70,810
|
|
|
|
65,182
|
|
|
|
135,992
|
|
Restricted cash
|
|
|
2,486
|
|
|
|
2,900
|
|
|
|
5,386
|
|
Long-term debt, net (including current and noncurrent portion)
|
|
$
|
1,223,146
|
|
|
$
|
427,949
|
|
|
$
|
1,651,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dry Bulk Vessel
Operations
for the
Year Ended
December 31,
2015
|
|
|
Logistics Business
for the
Year Ended
December 31,
2015
|
|
|
Total
for the
Year Ended
December 31,
2015
|
|
Revenue
|
|
$
|
229,772
|
|
|
$
|
251,048
|
|
|
$
|
480,820
|
|
Administrative fee revenue from affiliates
|
|
|
16,177
|
|
|
|
|
|
|
|
16,177
|
|
Interest income
|
|
|
1,801
|
|
|
|
569
|
|
|
|
2,370
|
|
Interest expense and finance cost
|
|
|
(86,069
|
)
|
|
|
(27,082
|
)
|
|
|
(113,151
|
)
|
Depreciation and amortization
|
|
|
(92,341
|
)
|
|
|
(27,969
|
)
|
|
|
(120,310
|
)
|
Equity in net earnings of affiliated companies
|
|
|
61,484
|
|
|
|
|
|
|
|
61,484
|
|
Net (loss)/ income attributable to Navios Holdings common stockholders
|
|
|
(148,306
|
)
|
|
|
14,194
|
|
|
|
(134,112
|
)
|
Total assets
|
|
|
2,359,299
|
|
|
|
599,514
|
|
|
|
2,958,813
|
|
Goodwill
|
|
|
56,240
|
|
|
|
104,096
|
|
|
|
160,336
|
|
Capital expenditures
|
|
|
(7,882
|
)
|
|
|
(27,039
|
)
|
|
|
(34,921
|
)
|
Investment in affiliates
|
|
|
381,746
|
|
|
|
|
|
|
|
381,746
|
|
Cash and cash equivalents
|
|
|
81,905
|
|
|
|
81,507
|
|
|
|
163,412
|
|
Restricted cash
|
|
|
13,480
|
|
|
|
|
|
|
|
13,480
|
|
Long-term debt, net (including current and noncurrent portion)
|
|
$
|
1,213,740
|
|
|
$
|
367,568
|
|
|
$
|
1,581,308
|
|
F-48
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dry Bulk Vessel
Operations
for the
Year Ended
December 31,
2014
|
|
|
Logistics Business
for the
Year Ended
December 31,
2014
|
|
|
Total
for the
Year Ended
December 31,
2014
|
|
Revenue
|
|
$
|
300,242
|
|
|
$
|
268,774
|
|
|
$
|
569,016
|
|
Administrative fee revenue from affiliates
|
|
|
14,300
|
|
|
|
|
|
|
|
14,300
|
|
Interest income
|
|
|
5,224
|
|
|
|
291
|
|
|
|
5,515
|
|
Interest expense and finance cost
|
|
|
(85,823
|
)
|
|
|
(27,837
|
)
|
|
|
(113,660
|
)
|
Depreciation and amortization
|
|
|
(79,603
|
)
|
|
|
(25,087
|
)
|
|
|
(104,690
|
)
|
Equity in net earnings of affiliated companies
|
|
|
57,751
|
|
|
|
|
|
|
|
57,751
|
|
Net loss attributable to Navios Holdings common stockholders
|
|
|
(45,541
|
)
|
|
|
(10,662
|
)
|
|
|
(56,203
|
)
|
Total assets
|
|
|
2,525,103
|
|
|
|
602,594
|
|
|
|
3,127,697
|
|
Goodwill
|
|
|
56,240
|
|
|
|
104,096
|
|
|
|
160,336
|
|
Capital expenditures
|
|
|
(145,840
|
)
|
|
|
(91,658
|
)
|
|
|
(237,498
|
)
|
Investment in affiliates
|
|
|
344,453
|
|
|
|
|
|
|
|
344,453
|
|
Cash and cash equivalents
|
|
|
175,625
|
|
|
|
71,931
|
|
|
|
247,556
|
|
Restricted cash
|
|
|
2,564
|
|
|
|
|
|
|
|
2,564
|
|
Long-term debt, net (including current and noncurrent portion)
|
|
$
|
1,246,181
|
|
|
$
|
366,709
|
|
|
$
|
1,612,890
|
|
The following table sets out the Companys revenue by geographic region. Dry bulk Vessel Operations
(excluding administrative fee revenue from affiliates) and Logistics Business revenue are allocated on the basis of the geographic region in which the customer is located. Dry bulk vessels operate worldwide. Logistics business operates different
types of tanker vessels, pushboats, and wet and dry barges for delivering a wide range of products between ports in the Paraná, Paraguay and Uruguay River systems in South America (commonly known as the Hidrovia or the
waterway).
Revenues from specific geographic regions which contribute over 10% of revenue are disclosed separately.
Revenue by Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
2016
|
|
|
Year ended
December 31,
2015
|
|
|
Year ended
December 31,
2014
|
|
North America
|
|
$
|
6,218
|
|
|
$
|
22,317
|
|
|
$
|
30,299
|
|
Europe
|
|
|
109,267
|
|
|
|
109,347
|
|
|
|
173,100
|
|
Asia
|
|
|
73,073
|
|
|
|
87,658
|
|
|
|
84,766
|
|
South America
|
|
|
220,336
|
|
|
|
253,746
|
|
|
|
275,327
|
|
Other
|
|
|
10,888
|
|
|
|
7,752
|
|
|
|
5,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
419,782
|
|
|
$
|
480,820
|
|
|
$
|
569,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels operate on a worldwide basis and are not restricted to specific locations. Accordingly, it is not possible to allocate
the assets of these operations to specific countries. The total net book value of long-lived assets for dry bulk vessels amounted to $1,409,415 and $1,423,147 at December 31, 2016 and 2015, respectively. For Logistics Business, all long-lived
assets are located in South America. The total net book value of long-lived assets for the Logistics Business amounted to $544,065 and $468,842 at December 31, 2016 and 2015, respectively.
NOTE 19: LOSS PER COMMON SHARE
Loss per
share is calculated by dividing net loss attributable to Navios Holdings common stockholders by the weighted average number of shares of Navios Holdings outstanding during the periods presented. Net (loss)/income attributable to Navios Holdings
common stockholders is calculated by adding to (if a discount) or deducting from (if a premium) net (loss)/ income attributable to Navios Holdings common stockholders the difference between the fair value of the consideration paid upon redemption
and the carrying value of the preferred stock, including the unamortized issuance costs of the preferred stock, and the amount of any undeclared dividend cancelled.
F-49
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
For the year ended December 31, 2016, 3,411,270 potential common shares and 5,935,000
potential shares of convertible preferred stock have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) and are therefore excluded from the calculation of diluted net loss per share.
For the year ended December 31, 2015, 1,698,569 potential common shares and 6,522,556 potential shares of convertible preferred stock
have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) and are therefore excluded from the calculation of diluted net loss per share.
For the year ended December 31, 2014, 3,437,148 potential common shares and 7,950,425 potential shares of convertible preferred stock
have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) and are therefore excluded from the calculation of diluted net loss per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31,
2016
|
|
|
Year ended
December 31,
2015
|
|
|
Year ended
December 31,
2014
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Navios Holdings common stockholders
|
|
$
|
(303,823
|
)
|
|
$
|
(134,112
|
)
|
|
$
|
(56,203
|
)
|
Declared and undeclared dividend on preferred stock and on unvested restricted shares
|
|
|
(15,909
|
)
|
|
|
(16,202
|
)
|
|
|
(10,773
|
)
|
Tender Offer Redemption of preferred stock Series G and H including $5,063 of undeclared
preferred dividend cancelled
|
|
|
46,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss available to Navios Holdings common stockholders, basic and diluted
|
|
$
|
(273,105
|
)
|
|
$
|
(150,314
|
)
|
|
$
|
(66,976
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic and diluted net loss per share attributable to Navios Holdings stockholders
adjusted weighted shares
|
|
|
107,366,783
|
|
|
|
105,896,235
|
|
|
|
103,476,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share attributable to Navios Holdings stockholders
|
|
$
|
(2.54
|
)
|
|
$
|
(1.42
|
)
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 20: INCOME TAXES
Marshall Islands, Liberia, Panama and Malta do not impose a tax on international shipping income. Under the laws of Marshall Islands, Malta,
Liberia and Panama, the countries of incorporation of the Company and its subsidiaries and the vessels registration, the companies are subject to registration and tonnage taxes which have been included in direct vessel expenses in the
accompanying consolidated statements of comprehensive (loss)/income.
Certain of the Companys subsidiaries have registered branch
offices in Greece under Greek Law 27/75 (former law 89/67). These companies are allowed to conduct the specific business activities provided in their license and the provisions of the above legislation. Same law (27/75) provides that these companies
are exempted in Greece from any tax, duty, levy, contribution or deduction in respect of income obtained from the operation of ships as long as duties are paid by the owner of the vessel.
The same exemption from any tax, duty, levy, contribution or deduction applies to shareholders or other type of owners in ship-owning
companies for income they receive from distribution of net profits or dividends, whether received directly or from holding companies, regardless of the number of holding companies between ship-owning company and the final shareholder.
In accordance with the currently applicable Greek law, foreign flagged vessels that are managed by Greek or foreign ship management companies
having established an office in Greece under law 27/75 are subject to duties towards the Greek state which are calculated on the basis of the relevant vessels tonnage. The payment of said duties exhausts the tax liability of the foreign ship
owning company against any tax, duty, charge or contribution payable on income from the exploitation of the foreign flagged vessel. In case that tonnage tax and/or similar taxes/duties are paid to the vessels flag state, these are deducted
from the amount of the duty to be paid in Greece.
F-50
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
In Belgium, profit from ocean shipping is taxable based on the tonnage of the
sea-going
vessels from which the profit is obtained (tonnage tax).
Pursuant to
Section 883 of the Internal Revenue Code of the United States (the Code), U.S. source income from the international operation of ships is generally exempt from U.S. federal income tax if the company that is treated for U.S. federal
income tax purposes as earning such income meets certain requirements set forth in Section 883 of the Code and the U.S. Treasury regulations thereunder. Among other things, in order to qualify for this exemption, each relevant company must be
incorporated in a country outside the United States which grants an equivalent exemption from income taxes to U.S. corporations. In addition, either (i) the stock of each relevant company must be treated under Section 883 of
the Code and the U.S. Treasury regulations thereunder as primarily traded and regularly traded on an established securities market in the United States or in another country that grants an equivalent
exemption or (ii) more than 50% of the value of the stock of each relevant company must be owned, directly or indirectly, by (a) individuals who are residents in countries that grant an equivalent exemption, (b) foreign
corporations organized in countries that grant an equivalent exemption and that meet the test described in (i) and/or (c) certain other shareholders described in Section 883 of the Code and the U.S. Treasury regulations
thereunder. The management of the Company believes that the Company and each of its relevant subsidiaries qualifies for the tax exemption under Section 883 of the Code, provided that the Companys common stock continues to be listed on the
NYSE and represents more than 50% of the total combined voting power of all classes of the Companys stock entitled to vote and of the total value of the Companys stock, and less than 50% of the Companys common stock is owned,
actually or constructively under specified stock attribution rules, on more than half the number of days in the relevant year by persons who each own 5% or more of the vote and value of the Companys common stock, but no assurance can be given
that the Company will satisfy these requirements or qualify for this exemption.
The tax (expense)/ benefit reflected in the
Companys consolidated financial statements for the years ended December 31, 2016, 2015 and 2014 is mainly attributable to Navios Holdings subsidiaries in South America, which are subject to the Argentinean, Brazilian and Paraguayan
income tax regime.
CNSA is located in a tax free zone and is not liable to income tax. Navios Logistics operations in Uruguay are
exempted from income taxes.
Income tax liabilities of the Argentinean companies for the current and prior periods are measured at the
amount expected to be paid to the taxation authorities, using a tax rate of 35% on the taxable net income. Tax rates and tax laws used to assess the income tax liability are those that are effective on the close of the fiscal period. Additionally,
at the end of the fiscal year, local companies in Argentina have to calculate an assets tax, the Minimum Presumed Income Tax). This tax is supplementary to income tax and is calculated by applying the effective tax rate of 1% over the gross value of
the corporate assets (based on tax law criteria). The subsidiaries tax liabilities will be the higher of income tax or Minimum Presumed Income Tax. However, if the Minimum Presumed Income Tax exceeds income tax during any fiscal year, such
excess may be computed as a prepayment of any income tax excess over the Minimum Presumed Income Tax that may arise in the next ten fiscal years.
Under the tax laws of Argentina, the subsidiaries of the Company in that country are subject to taxes levied on gross revenues. Rates differ
depending on the jurisdiction where revenues are earned for tax purposes. Average rates were approximately 5.0% for the year ended December 31, 2016 (5.0% for both 2015 and 2014).
There are two possible options to determine the income tax liability of Paraguayan companies. Under the first option income tax liabilities
for the current and prior periods are measured at the amount expected to be paid to the taxation authorities, by applying the tax rate of 10% on the fiscal profit and loss. 50% of revenues derived from international freights are considered
Paraguayan sourced (and therefore taxed) if carried between Paraguay and Argentina, Bolivia, Brazil or Uruguay. Alternatively, only 30% of revenues derived from international freights are considered Paraguayan sourced. Companies whose operations are
considered international freights can choose to pay income taxes on their revenues at an effective tax rate of 1% on such revenues, without considering any other kind of adjustments. Fiscal losses, if any, are neither deducted nor carried forward.
The corporate income tax rate in Brazil and Paraguay is 34% and 10%, respectively, for the year ended December 31, 2016.
The Companys deferred taxes as of December 31, 2016 and 2015, relate primarily to deferred tax liabilities on acquired intangible
assets recognized in connection with Navios Logistics.
As of January 1, 2007, the Company adopted the provisions of FASB for
Accounting for Uncertainty in Income Taxes. This guidance requires application of a more likely than not threshold to the recognition and derecognition of uncertain tax positions. This guidance permits the Company to recognize the amount of tax
benefit that has a greater that 50% likelihood of being ultimately realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the
quarter of such change. Kleimars open tax years are 2013 and onwards. Argentinean companies have open tax years ranging from 2009 and onwards and Paraguayan and Brazilian companies have open tax years ranging from 2010 and onwards. In relation
to these open tax years, the Company believes that there are no material uncertain tax positions.
F-51
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 21: NONCONTROLLING INTEREST
Navios Asia
On May 14, 2013, Navios
Holdings formed Navios Asia. As of December 31, 2013, Navios Asia was owned 51.0% by Diesis Shipmanagement Ltd., a wholly owned subsidiary of Navios Holdings. During the year ended December 31, 2014, the Company recorded income of $182 in
the statement of comprehensive (loss)/income within the caption Net loss/(income) attributable to the noncontrolling interest. The noncontrolling shareholders contribution for the acquisition of the N Bonanza in January 2014 was
$3,484. In May 2014, Navios Holdings became the sole shareholder of Navios Asia by acquiring the remaining 49.0% for a total cash consideration of $10,889.
NOTE 22: INVESTMENTS IN
AVAILABLE-FOR-SALE
SECURITIES
During the year ended December 31, 2013, the Company received shares of Korea Line Corporation (KLC), and during the year
ended December 31, 2015, the Company received shares of Pan Ocean Co.Ltd (STX) as partial compensation for the claims filed under the Korean court for all unpaid amounts in respect of the employment of the Companys vessels.
The shares were valued at fair value upon the day of issuance. During the third quarter of 2016, the Company sold all its 354,093 KLC and STX securities it held for a total consideration of $5,303. As of December 31, 2016 and 2015, the Company
retained a total of 0, and 344,649 KLC and STX shares, respectively.
The shares received from KLC and STX were accounted for under the
guidance for
available-for-sale
securities (the AFS Securities). The Company has no other types of
available-for-sale
securities.
As of December 31, 2016 and 2015, the carrying amount of the
available-for-sale
securities related to KLC and STX was $0 and $5,173, respectively. The unrealized holding losses related to these AFS Securities included in
Accumulated other comprehensive loss were $0 and $445 as of December 31, 2016 and 2015, respectively. During each of the years ended December 31, 2016, 2015 and 2014, the Company considered the decline in fair value of the KLC
shares as other-than-temporary and therefore, recognized a loss out of accumulated other comprehensive income /(loss) of $345, $1,783 and $11,553, respectively. The respective losses were included within the caption Other
expense in the accompanying consolidated statement of comprehensive (loss)/ income.
NOTE 23: OTHER INCOME OTHER EXPENSE
As of March 25, 2014, the Company terminated the amended credit default insurance policy, it had in place with a credit default insurer.
In connection with the termination, Navios Holdings received compensation of $4,044. From the total compensation, $3,551 was recorded immediately in the statement of other comprehensive (loss)/income within the caption Other income and
the remaining amount within the caption Revenue, representing reimbursements for insurance claims submitted for the period prior to the date of the termination of the credit default insurance policy. The Company has no future requirement
to repay any of the lump sum cash payment back to the insurance company or provide any further services.
In May 2014, Navios Holdings
received cash compensation of $7,203 from the sale of a defaulted counterparty claim to an unrelated third party. Navios Holdings has no continuing obligation to provide any further services to the counterparty and has therefore recognized the
entire compensation received immediately in the statement of comprehensive (loss)/income within the caption of Other income.
See also Note 15, for details on the claim submitted under Navios Partners Guarantee.
During the years ended December 31, 2016, 2015 and 2014, taxes other-than-income taxes of Navios Logistics amounted to $9,740, $11,976,
and $9,275, respectively, and were included in the statements of comprehensive (loss)/income within the caption Other expense.
In March 2016, the Company agreed with a charterer for the early redelivery of one of its vessels in exchange for $13,000 in cash and
settlement of outstanding claims payable to the charterer amounting to $1,871. The total amount of $14,871 was included in the statement of comprehensive loss within the caption Other income.
F-52
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 24: OTHER FINANCIAL INFORMATION
The Companys 2019 Notes are fully and unconditionally guaranteed on a joint and several basis by all of the Companys subsidiaries
with the exception of Navios Maritime Finance II (US) Inc., Navios Maritime Finance (US) Inc., Navios Logistics and its subsidiaries and Navios GP L.L.C. The subsidiary guarantees are full and unconditional, except that the indenture
provides for an individual subsidiarys guarantee to be automatically released in certain customary circumstances, such as when a subsidiary is sold or all of the assets of the subsidiary are sold, the capital stock is sold, when the subsidiary
is designated as an unrestricted subsidiary for purposes of the indenture, upon liquidation or dissolution of the subsidiary or upon legal or covenant defeasance or satisfaction and discharge of the 2019 Notes. All subsidiaries, except
for the
non-guarantor
Navios Logistics and its subsidiaries, are 100% owned.
These condensed
consolidated statements of Navios Holdings, the guarantor subsidiaries and the
non-guarantor
subsidiaries have been prepared in accordance on an equity basis as permitted by U.S. GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Statement of comprehensive (loss)/income for the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
199,446
|
|
|
$
|
220,336
|
|
|
$
|
|
|
|
$
|
419,782
|
|
Administrative fee revenue from affiliates
|
|
|
|
|
|
|
21,799
|
|
|
|
|
|
|
|
|
|
|
|
21,799
|
|
Time charter, voyage and logistics business expenses
|
|
|
|
|
|
|
(115,483
|
)
|
|
|
(59,589
|
)
|
|
|
|
|
|
|
(175,072
|
)
|
Direct vessel expenses
|
|
|
|
|
|
|
(51,396
|
)
|
|
|
(76,000
|
)
|
|
|
|
|
|
|
(127,396
|
)
|
General and administrative expenses incurred on behalf of affiliates
|
|
|
|
|
|
|
(21,799
|
)
|
|
|
|
|
|
|
|
|
|
|
(21,799
|
)
|
General and administrative expenses
|
|
|
(5,715
|
)
|
|
|
(5,286
|
)
|
|
|
(14,294
|
)
|
|
|
|
|
|
|
(25,295
|
)
|
Depreciation and amortization
|
|
|
(2,860
|
)
|
|
|
(84,337
|
)
|
|
|
(26,628
|
)
|
|
|
|
|
|
|
(113,825
|
)
|
Interest expense and finance cost, net
|
|
|
(71,262
|
)
|
|
|
(14,005
|
)
|
|
|
(23,425
|
)
|
|
|
|
|
|
|
(108,692
|
)
|
Gain on bond and debt extinguishment
|
|
|
27,670
|
|
|
|
1,517
|
|
|
|
|
|
|
|
|
|
|
|
29,187
|
|
Other income/(expense), net
|
|
|
75
|
|
|
|
14,392
|
|
|
|
(9,261
|
)
|
|
|
|
|
|
|
5,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in net earnings of affiliated companies
|
|
|
(52,092
|
)
|
|
|
(55,152
|
)
|
|
|
11,139
|
|
|
|
|
|
|
|
(96,105
|
)
|
Loss from subsidiaries
|
|
|
(46,867
|
)
|
|
|
6,483
|
|
|
|
|
|
|
|
40,384
|
|
|
|
|
|
Equity/(loss) in net earnings of affiliated companies
|
|
|
(204,864
|
)
|
|
|
3,138
|
|
|
|
(1,053
|
)
|
|
|
|
|
|
|
(202,779
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes
|
|
|
(303,823
|
)
|
|
|
(45,531
|
)
|
|
|
10,086
|
|
|
|
40,384
|
|
|
|
(298,884
|
)
|
Income tax benefit/ (expense)
|
|
|
|
|
|
|
(283
|
)
|
|
|
(982
|
)
|
|
|
|
|
|
|
(1,265
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(303,823
|
)
|
|
|
(45,814
|
)
|
|
|
9,104
|
|
|
|
40,384
|
|
|
|
(300,149
|
)
|
Less: Net income attributable to the noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(3,674
|
)
|
|
|
|
|
|
|
(3,674
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Navios Holdings common stockholders
|
|
$
|
(303,823
|
)
|
|
$
|
(45,814
|
)
|
|
$
|
5,430
|
|
|
$
|
40,384
|
|
|
$
|
(303,823
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding loss on investments in
available-for-sale
securities
|
|
$
|
100
|
|
|
$
|
100
|
|
|
$
|
|
|
|
$
|
(100
|
)
|
|
$
|
100
|
|
Reclassification to earnings
|
|
|
345
|
|
|
|
345
|
|
|
|
|
|
|
|
(345
|
)
|
|
|
345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income
|
|
$
|
445
|
|
|
$
|
445
|
|
|
$
|
|
|
|
$
|
(445
|
)
|
|
$
|
445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
$
|
(303,378
|
)
|
|
$
|
(45,369
|
)
|
|
$
|
9,104
|
|
|
$
|
39,939
|
|
|
$
|
(299,704
|
)
|
Comprehensive (income)/loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(3,674
|
)
|
|
|
|
|
|
|
(3,674
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss attributable to Navios Holdings common stockholders
|
|
$
|
(303,378
|
)
|
|
$
|
(45,369
|
)
|
|
$
|
5,430
|
|
|
$
|
39,939
|
|
|
$
|
(303,378
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-53
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Statement of comprehensive (loss)/income for the year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
229,772
|
|
|
$
|
251,048
|
|
|
$
|
|
|
|
$
|
480,820
|
|
Administrative fee revenue from affiliates
|
|
|
|
|
|
|
16,177
|
|
|
|
|
|
|
|
|
|
|
|
16,177
|
|
Time charter, voyage and logistics business expenses
|
|
|
|
|
|
|
(177,507
|
)
|
|
|
(70,375
|
)
|
|
|
|
|
|
|
(247,882
|
)
|
Direct vessel expenses
|
|
|
|
|
|
|
(46,142
|
)
|
|
|
(82,026
|
)
|
|
|
|
|
|
|
(128,168
|
)
|
General and administrative expenses incurred on behalf of affiliates
|
|
|
|
|
|
|
(16,177
|
)
|
|
|
|
|
|
|
|
|
|
|
(16,177
|
)
|
General and administrative expenses
|
|
|
(7,435
|
)
|
|
|
(12,740
|
)
|
|
|
(14,008
|
)
|
|
|
|
|
|
|
(34,183
|
)
|
Depreciation and amortization
|
|
|
(2,769
|
)
|
|
|
(89,572
|
)
|
|
|
(27,969
|
)
|
|
|
|
|
|
|
(120,310
|
)
|
Interest expense and finance cost, net
|
|
|
(72,924
|
)
|
|
|
(11,344
|
)
|
|
|
(26,513
|
)
|
|
|
|
|
|
|
(110,781
|
)
|
Other expense, net
|
|
|
(60
|
)
|
|
|
(18,671
|
)
|
|
|
(11,470
|
)
|
|
|
|
|
|
|
(30,201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in net earnings of affiliated companies
|
|
|
(83,188
|
)
|
|
|
(126,204
|
)
|
|
|
18,687
|
|
|
|
|
|
|
|
(190,705
|
)
|
Loss from subsidiaries
|
|
|
(105,102
|
)
|
|
|
14,194
|
|
|
|
|
|
|
|
90,908
|
|
|
|
|
|
Equity in net earnings of affiliated companies
|
|
|
54,178
|
|
|
|
5,326
|
|
|
|
1,980
|
|
|
|
|
|
|
|
61,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes
|
|
|
(134,112
|
)
|
|
|
(106,684
|
)
|
|
|
20,667
|
|
|
|
90,908
|
|
|
|
(129,221
|
)
|
Income tax benefit/ (expense)
|
|
|
|
|
|
|
(397
|
)
|
|
|
3,551
|
|
|
|
|
|
|
|
3,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(134,112
|
)
|
|
|
(107,081
|
)
|
|
|
24,218
|
|
|
|
90,908
|
|
|
|
(126,067
|
)
|
Less: Net income attributable to the noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(8,045
|
)
|
|
|
|
|
|
|
(8,045
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Navios Holdings common stockholders
|
|
$
|
(134,112
|
)
|
|
$
|
(107,081
|
)
|
|
$
|
16,173
|
|
|
$
|
90,908
|
|
|
$
|
(134,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding loss on investments in
available-for-sale
securities
|
|
$
|
(1,649
|
)
|
|
$
|
(1,649
|
)
|
|
$
|
|
|
|
$
|
1,649
|
|
|
$
|
(1,649
|
)
|
Reclassification to earnings
|
|
|
1,782
|
|
|
|
1,782
|
|
|
|
|
|
|
|
(1,782
|
)
|
|
|
1,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income
|
|
$
|
133
|
|
|
$
|
133
|
|
|
$
|
|
|
|
$
|
(133
|
)
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
$
|
(133,979
|
)
|
|
$
|
(106,948
|
)
|
|
$
|
24,218
|
|
|
$
|
90,775
|
|
|
$
|
(125,934
|
)
|
Comprehensive (income)/loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(8,045
|
)
|
|
|
|
|
|
|
(8,045
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss attributable to Navios Holdings common stockholders
|
|
$
|
(133,979
|
)
|
|
$
|
(106,948
|
)
|
|
$
|
16,173
|
|
|
$
|
90,775
|
|
|
$
|
(133,979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-54
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Statement of comprehensive (loss)/income for the year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
|
|
|
$
|
300,242
|
|
|
$
|
268,774
|
|
|
$
|
|
|
|
$
|
569,016
|
|
Administrative fee revenue from affiliates
|
|
|
|
|
|
|
14,300
|
|
|
|
|
|
|
|
|
|
|
|
14,300
|
|
Time charter, voyage and logistics business expenses
|
|
|
|
|
|
|
(157,640
|
)
|
|
|
(105,664
|
)
|
|
|
|
|
|
|
(263,304
|
)
|
Direct vessel expenses
|
|
|
|
|
|
|
(52,039
|
)
|
|
|
(78,025
|
)
|
|
|
|
|
|
|
(130,064
|
)
|
General and administrative expenses incurred on behalf of affiliates
|
|
|
|
|
|
|
(14,300
|
)
|
|
|
|
|
|
|
|
|
|
|
(14,300
|
)
|
General and administrative expenses
|
|
|
(10,343
|
)
|
|
|
(20,483
|
)
|
|
|
(14,764
|
)
|
|
|
|
|
|
|
(45,590
|
)
|
Depreciation and amortization
|
|
|
(2,811
|
)
|
|
|
(76,792
|
)
|
|
|
(25,087
|
)
|
|
|
|
|
|
|
(104,690
|
)
|
Interest expense and finance cost, net
|
|
|
(73,272
|
)
|
|
|
(7,327
|
)
|
|
|
(27,546
|
)
|
|
|
|
|
|
|
(108,145
|
)
|
Loss on bond extinguishment
|
|
|
|
|
|
|
|
|
|
|
(27,281
|
)
|
|
|
|
|
|
|
(27,281
|
)
|
Other income/(expense), net
|
|
|
72
|
|
|
|
(2,357
|
)
|
|
|
(7,388
|
)
|
|
|
|
|
|
|
(9,673
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before equity in net earnings of affiliated companies
|
|
|
(86,354
|
)
|
|
|
(16,396
|
)
|
|
|
(16,981
|
)
|
|
|
|
|
|
|
(119,731
|
)
|
Loss from subsidiaries
|
|
|
(17,418
|
)
|
|
|
(10,662
|
)
|
|
|
|
|
|
|
28,080
|
|
|
|
|
|
Equity in net earnings of affiliated companies
|
|
|
47,569
|
|
|
|
6,555
|
|
|
|
3,627
|
|
|
|
|
|
|
|
57,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes
|
|
|
(56,203
|
)
|
|
|
(20,503
|
)
|
|
|
(13,354
|
)
|
|
|
28,080
|
|
|
|
(61,980
|
)
|
Income tax (expense)/benefit
|
|
|
|
|
|
|
(360
|
)
|
|
|
276
|
|
|
|
|
|
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(56,203
|
)
|
|
|
(20,863
|
)
|
|
|
(13,078
|
)
|
|
|
28,080
|
|
|
|
(62,064
|
)
|
Less: Net (income)/loss attributable to the noncontrolling interest
|
|
|
|
|
|
|
(182
|
)
|
|
|
6,043
|
|
|
|
|
|
|
|
5,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Navios Holdings common stockholders
|
|
$
|
(56,203
|
)
|
|
$
|
(21,045
|
)
|
|
$
|
(7,035
|
)
|
|
$
|
28,080
|
|
|
$
|
(56,203
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding loss on investments in
available-for-sale
securities
|
|
$
|
(959
|
)
|
|
$
|
(959
|
)
|
|
$
|
|
|
|
$
|
959
|
|
|
$
|
(959
|
)
|
Reclassification to earnings
|
|
|
11,553
|
|
|
|
11,553
|
|
|
|
|
|
|
|
(11,553
|
)
|
|
|
11,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income
|
|
$
|
10,594
|
|
|
$
|
10,594
|
|
|
$
|
|
|
|
$
|
(10,594
|
)
|
|
$
|
10,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
$
|
(45,609
|
)
|
|
$
|
(10,269
|
)
|
|
$
|
(13,078
|
)
|
|
$
|
17,486
|
|
|
$
|
(51,470
|
)
|
Comprehensive (income)/loss attributable to noncontrolling interest
|
|
|
|
|
|
|
(182
|
)
|
|
|
6,043
|
|
|
|
|
|
|
|
5,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss attributable to Navios Holdings common stockholders
|
|
$
|
(45,609
|
)
|
|
$
|
(10,451
|
)
|
|
$
|
(7,035
|
)
|
|
$
|
17,486
|
|
|
$
|
(45,609
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-55
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of December 31, 2016
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,875
|
|
|
$
|
54,935
|
|
|
$
|
65,182
|
|
|
$
|
|
|
|
$
|
135,992
|
|
Restricted cash
|
|
|
|
|
|
|
2,486
|
|
|
|
2,900
|
|
|
|
|
|
|
|
5,386
|
|
Accounts receivable, net
|
|
|
|
|
|
|
32,916
|
|
|
|
32,913
|
|
|
|
|
|
|
|
65,829
|
|
Intercompany receivables
|
|
|
|
|
|
|
|
|
|
|
74,218
|
|
|
|
(74,218
|
)
|
|
|
|
|
Due from affiliate companies
|
|
|
2,362
|
|
|
|
6,186
|
|
|
|
|
|
|
|
|
|
|
|
8,548
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
|
39,778
|
|
|
|
17,607
|
|
|
|
|
|
|
|
57,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
18,237
|
|
|
|
136,301
|
|
|
|
192,820
|
|
|
|
(74,218
|
)
|
|
|
273,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits for vessels, port terminals and other fixed assets
|
|
|
|
|
|
|
|
|
|
|
136,891
|
|
|
|
|
|
|
|
136,891
|
|
Vessels, port terminals and other fixed assets, net
|
|
|
|
|
|
|
1,411,612
|
|
|
|
409,489
|
|
|
|
|
|
|
|
1,821,101
|
|
Investments in subsidiaries
|
|
|
1,641,863
|
|
|
|
292,209
|
|
|
|
|
|
|
|
(1,934,072
|
)
|
|
|
|
|
Investments in affiliates
|
|
|
137,218
|
|
|
|
11,978
|
|
|
|
10,875
|
|
|
|
|
|
|
|
160,071
|
|
Loan receivable from affiliate companies
|
|
|
|
|
|
|
23,008
|
|
|
|
|
|
|
|
|
|
|
|
23,008
|
|
Other long-term receivable from affiliate companies
|
|
|
|
|
|
|
11,105
|
|
|
|
|
|
|
|
|
|
|
|
11,105
|
|
Other long-term assets
|
|
|
|
|
|
|
17,877
|
|
|
|
22,551
|
|
|
|
|
|
|
|
40,428
|
|
Goodwill and other intangibles
|
|
|
83,933
|
|
|
|
35,571
|
|
|
|
167,647
|
|
|
|
|
|
|
|
287,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
assets
|
|
|
1,863,014
|
|
|
|
1,803,360
|
|
|
|
747,453
|
|
|
|
(1,934,072
|
)
|
|
|
2,479,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,881,251
|
|
|
$
|
1,939,661
|
|
|
$
|
940,273
|
|
|
$
|
(2,008,290
|
)
|
|
$
|
2,752,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
892
|
|
|
$
|
54,731
|
|
|
$
|
29,915
|
|
|
$
|
|
|
|
$
|
85,538
|
|
Accrued expenses and other liabilities
|
|
|
32,025
|
|
|
|
43,823
|
|
|
|
15,901
|
|
|
|
|
|
|
|
91,749
|
|
Deferred income and cash received in advance
|
|
|
|
|
|
|
4,666
|
|
|
|
4,517
|
|
|
|
|
|
|
|
9,183
|
|
Intercompany payables
|
|
|
191,814
|
|
|
|
(117,596
|
)
|
|
|
|
|
|
|
(74,218
|
)
|
|
|
|
|
Due to affiliate companies
|
|
|
|
|
|
|
32,847
|
|
|
|
|
|
|
|
|
|
|
|
32,847
|
|
Current portion of capital lease obligations
|
|
|
|
|
|
|
|
|
|
|
2,639
|
|
|
|
|
|
|
|
2,639
|
|
Current portion of long-term debt
|
|
|
|
|
|
|
23,476
|
|
|
|
6,351
|
|
|
|
|
|
|
|
29,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
224,731
|
|
|
|
41,947
|
|
|
|
59,323
|
|
|
|
(74,218
|
)
|
|
|
251,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
|
928,357
|
|
|
|
221,437
|
|
|
|
421,598
|
|
|
|
|
|
|
|
1,571,392
|
|
Capital lease obligations, net of current portion
|
|
|
|
|
|
|
|
|
|
|
14,978
|
|
|
|
|
|
|
|
14,978
|
|
Long-term payable to affiliate company
|
|
|
|
|
|
|
6,399
|
|
|
|
|
|
|
|
|
|
|
|
6,399
|
|
Loan payable to affiliate company
|
|
|
49,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,876
|
|
Other long-term liabilities and deferred income
|
|
|
|
|
|
|
41,857
|
|
|
|
1,531
|
|
|
|
|
|
|
|
43,388
|
|
Deferred tax liability
|
|
|
|
|
|
|
|
|
|
|
11,526
|
|
|
|
|
|
|
|
11,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
liabilities
|
|
|
978,233
|
|
|
|
269,693
|
|
|
|
449,633
|
|
|
|
|
|
|
|
1,697,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,202,964
|
|
|
|
311,640
|
|
|
|
508,956
|
|
|
|
(74,218
|
)
|
|
|
1,949,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
125,266
|
|
|
|
|
|
|
|
125,266
|
|
Total Navios Holdings stockholders equity
|
|
|
678,287
|
|
|
|
1,628,021
|
|
|
|
306,051
|
|
|
|
(1,934,072
|
)
|
|
|
678,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
1,881,251
|
|
|
$
|
1,939,661
|
|
|
$
|
940,273
|
|
|
$
|
(2,008,290
|
)
|
|
$
|
2,752,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-56
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of December 31, 2015
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
34,152
|
|
|
$
|
47,753
|
|
|
$
|
81,507
|
|
|
$
|
|
|
|
$
|
163,412
|
|
Restricted cash
|
|
|
|
|
|
|
13,480
|
|
|
|
|
|
|
|
|
|
|
|
13,480
|
|
Accounts receivable, net
|
|
|
|
|
|
|
38,716
|
|
|
|
26,097
|
|
|
|
|
|
|
|
64,813
|
|
Intercompany receivables
|
|
|
10,360
|
|
|
|
38,108
|
|
|
|
74,573
|
|
|
|
(123,041
|
)
|
|
|
|
|
Due from affiliate companies
|
|
|
4,833
|
|
|
|
7,836
|
|
|
|
|
|
|
|
|
|
|
|
12,669
|
|
Prepaid expenses and other current assets
|
|
|
3
|
|
|
|
36,580
|
|
|
|
12,002
|
|
|
|
|
|
|
|
48,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
49,348
|
|
|
|
182,473
|
|
|
|
194,179
|
|
|
|
(123,041
|
)
|
|
|
302,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits for vessels, port terminals and other fixed assets
|
|
|
|
|
|
|
29,695
|
|
|
|
44,254
|
|
|
|
|
|
|
|
73,949
|
|
Vessels, port terminals and other fixed assets, net
|
|
|
|
|
|
|
1,396,101
|
|
|
|
427,860
|
|
|
|
|
|
|
|
1,823,961
|
|
Investments in subsidiaries
|
|
|
1,636,433
|
|
|
|
285,726
|
|
|
|
|
|
|
|
(1,922,159
|
)
|
|
|
|
|
Investments in
available-for-sale
securities
|
|
|
|
|
|
|
5,173
|
|
|
|
|
|
|
|
|
|
|
|
5,173
|
|
Investments in affiliates
|
|
|
356,797
|
|
|
|
13,028
|
|
|
|
11,921
|
|
|
|
|
|
|
|
381,746
|
|
Loan receivable from affiliate companies
|
|
|
|
|
|
|
16,474
|
|
|
|
|
|
|
|
|
|
|
|
16,474
|
|
Other long-term assets
|
|
|
|
|
|
|
21,325
|
|
|
|
22,433
|
|
|
|
|
|
|
|
43,758
|
|
Goodwill and other intangibles
|
|
|
86,793
|
|
|
|
52,829
|
|
|
|
171,171
|
|
|
|
|
|
|
|
310,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
assets
|
|
|
2,080,023
|
|
|
|
1,820,351
|
|
|
|
677,639
|
|
|
|
(1,922,159
|
)
|
|
|
2,655,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,129,371
|
|
|
$
|
2,002,824
|
|
|
$
|
871,818
|
|
|
$
|
(2,045,200
|
)
|
|
$
|
2,958,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
363
|
|
|
$
|
45,913
|
|
|
$
|
26,329
|
|
|
$
|
|
|
|
$
|
72,605
|
|
Accrued expenses and other liabilities
|
|
|
33,244
|
|
|
|
54,451
|
|
|
|
15,400
|
|
|
|
|
|
|
|
103,095
|
|
Deferred income and cash received in advance
|
|
|
|
|
|
|
6,267
|
|
|
|
7,225
|
|
|
|
|
|
|
|
13,492
|
|
Intercompany payables
|
|
|
123,041
|
|
|
|
|
|
|
|
|
|
|
|
(123,041
|
)
|
|
|
|
|
Due to affiliate companies
|
|
|
|
|
|
|
17,791
|
|
|
|
|
|
|
|
|
|
|
|
17,791
|
|
Current portion of capital lease obligations
|
|
|
|
|
|
|
|
|
|
|
2,929
|
|
|
|
|
|
|
|
2,929
|
|
Current portion of long-term debt
|
|
|
|
|
|
|
16,875
|
|
|
|
69
|
|
|
|
|
|
|
|
16,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
156,648
|
|
|
|
141,297
|
|
|
|
51,952
|
|
|
|
(123,041
|
)
|
|
|
226,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current portion
|
|
|
983,763
|
|
|
|
213,102
|
|
|
|
367,499
|
|
|
|
|
|
|
|
1,564,364
|
|
Capital lease obligations, net of current portion
|
|
|
|
|
|
|
|
|
|
|
17,720
|
|
|
|
|
|
|
|
17,720
|
|
Unfavorable lease terms
|
|
|
|
|
|
|
7,526
|
|
|
|
|
|
|
|
|
|
|
|
7,526
|
|
Other long-term liabilities and deferred income
|
|
|
|
|
|
|
19,360
|
|
|
|
1,518
|
|
|
|
|
|
|
|
20,878
|
|
Deferred tax liability
|
|
|
|
|
|
|
|
|
|
|
10,917
|
|
|
|
|
|
|
|
10,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
liabilities
|
|
|
983,763
|
|
|
|
239,988
|
|
|
|
397,654
|
|
|
|
|
|
|
|
1,621,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,140,411
|
|
|
|
381,285
|
|
|
|
449,606
|
|
|
|
(123,041
|
)
|
|
|
1,848,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
121,592
|
|
|
|
|
|
|
|
121,592
|
|
Total Navios Holdings stockholders equity
|
|
|
988,960
|
|
|
|
1,621,539
|
|
|
|
300,620
|
|
|
|
(1,922,159
|
)
|
|
|
988,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
2,129,371
|
|
|
$
|
2,002,824
|
|
|
$
|
871,818
|
|
|
$
|
(2,045,200
|
)
|
|
$
|
2,958,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-57
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow statement for the year ended December 31, 2016
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Net cash (used in)/provided by operating activities
|
|
$
|
(60,889
|
)
|
|
$
|
78,830
|
|
|
$
|
18,979
|
|
|
$
|
|
|
|
$
|
36,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of investments in affiliates
|
|
|
|
|
|
|
(4,275
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,275
|
)
|
Loan to affiliate company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in long-term receivable from affiliate companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from affiliate companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of vessels
|
|
|
|
|
|
|
(60,115
|
)
|
|
|
|
|
|
|
|
|
|
|
(60,115
|
)
|
Deposits for vessels, port terminals and other fixed assets
|
|
|
|
|
|
|
|
|
|
|
(86,911
|
)
|
|
|
|
|
|
|
(86,911
|
)
|
Purchase of property, equipment and other fixed assets
|
|
|
|
|
|
|
(305
|
)
|
|
|
(4,262
|
)
|
|
|
|
|
|
|
(4,567
|
)
|
Disposal of
available-for-sale
securities
|
|
|
|
|
|
|
5,303
|
|
|
|
|
|
|
|
|
|
|
|
5,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by/(used in) in investing activities
|
|
|
|
|
|
|
(59,392
|
)
|
|
|
(91,173
|
)
|
|
|
|
|
|
|
(150,565
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer (to)/from other group subsidiaries
|
|
|
38,667
|
|
|
|
(38,667
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of preferred stock
|
|
|
(9,323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,323
|
)
|
Repurchase of senior notes
|
|
|
(30,671
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,671
|
)
|
Repayment of long-term debt and payment of principal
|
|
|
|
|
|
|
(39,332
|
)
|
|
|
(1,405
|
)
|
|
|
|
|
|
|
(40,737
|
)
|
Proceeds from long-term loans, net of deferred finance fees
|
|
|
|
|
|
|
54,743
|
|
|
|
60,306
|
|
|
|
|
|
|
|
115,049
|
|
Proceeds from loan payable to affiliate company, net of deferred finance fees
|
|
|
48,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,438
|
|
Acquisition of treasury stock
|
|
|
(818
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(818
|
)
|
Dividends paid
|
|
|
(3,681
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,681
|
)
|
Decrease in restricted cash
|
|
|
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
|
11,000
|
|
Payments of obligations under capital leases
|
|
|
|
|
|
|
|
|
|
|
(3,032
|
)
|
|
|
|
|
|
|
(3,032
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
42,612
|
|
|
|
(12,256
|
)
|
|
|
55,869
|
|
|
|
|
|
|
|
86,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
(18,277
|
)
|
|
|
7,182
|
|
|
|
(16,325
|
)
|
|
|
|
|
|
|
(27,420
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
34,152
|
|
|
|
47,753
|
|
|
|
81,507
|
|
|
|
|
|
|
|
163,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
15,875
|
|
|
$
|
54,935
|
|
|
$
|
65,182
|
|
|
$
|
|
|
|
$
|
135,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-58
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow statement for the year ended December 31, 2015
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Net cash (used in)/provided by operating activities
|
|
$
|
(49,544
|
)
|
|
$
|
48,038
|
|
|
$
|
44,984
|
|
|
$
|
|
|
|
$
|
43,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of investments in affiliates
|
|
|
(14,668
|
)
|
|
|
(6,650
|
)
|
|
|
(1,528
|
)
|
|
|
|
|
|
|
(22,846
|
)
|
Loan to affiliate company
|
|
|
|
|
|
|
(7,327
|
)
|
|
|
|
|
|
|
|
|
|
|
(7,327
|
)
|
Decrease in long-term receivable from affiliate companies
|
|
|
|
|
|
|
10,351
|
|
|
|
|
|
|
|
|
|
|
|
10,351
|
|
Dividends from affiliate companies
|
|
|
18,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,244
|
|
Deposits for vessels, port terminals and other fixed assets
|
|
|
|
|
|
|
(7,555
|
)
|
|
|
(19,158
|
)
|
|
|
|
|
|
|
(26,713
|
)
|
Purchase of property, equipment and other fixed assets
|
|
|
|
|
|
|
(327
|
)
|
|
|
(7,881
|
)
|
|
|
|
|
|
|
(8,208
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by/(used in) in investing activities
|
|
|
3,576
|
|
|
|
(11,508
|
)
|
|
|
(28,567
|
)
|
|
|
|
|
|
|
(36,499
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer (to)/from other group subsidiaries
|
|
|
17,183
|
|
|
|
(18,711
|
)
|
|
|
1,528
|
|
|
|
|
|
|
|
|
|
Debt issuance costs
|
|
|
|
|
|
|
(50
|
)
|
|
|
|
|
|
|
|
|
|
|
(50
|
)
|
Repayment of long-term debt and payment of principal
|
|
|
|
|
|
|
(35,987
|
)
|
|
|
(69
|
)
|
|
|
|
|
|
|
(36,056
|
)
|
Acquisition of treasury stock
|
|
|
(252
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(252
|
)
|
Dividends paid
|
|
|
(35,350
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35,350
|
)
|
Increase in restricted cash
|
|
|
|
|
|
|
(11,114
|
)
|
|
|
|
|
|
|
|
|
|
|
(11,114
|
)
|
Payment for acquisition of intangible asset
|
|
|
|
|
|
|
|
|
|
|
(6,800
|
)
|
|
|
|
|
|
|
(6,800
|
)
|
Payments of obligations under capital leases
|
|
|
|
|
|
|
|
|
|
|
(1,501
|
)
|
|
|
|
|
|
|
(1,501
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(18,419
|
)
|
|
|
(65,862
|
)
|
|
|
(6,842
|
)
|
|
|
|
|
|
|
(91,123
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
(64,387
|
)
|
|
|
(29,332
|
)
|
|
|
9,575
|
|
|
|
|
|
|
|
(84,144
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
98,539
|
|
|
|
77,085
|
|
|
|
71,932
|
|
|
|
|
|
|
|
247,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
34,152
|
|
|
$
|
47,753
|
|
|
$
|
81,507
|
|
|
$
|
|
|
|
$
|
163,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-59
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow statement for the year ended December 31, 2014
|
|
Navios
Maritime
Holdings Inc.
Issuer
|
|
|
Guarantor
Subsidiaries
|
|
|
Non
Guarantor
Subsidiaries
|
|
|
Eliminations
|
|
|
Total
|
|
Net cash (used in)/provided by operating activities
|
|
$
|
(9,357
|
)
|
|
$
|
52,664
|
|
|
$
|
13,016
|
|
|
$
|
|
|
|
$
|
56,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of investments in affiliates
|
|
|
|
|
|
|
|
|
|
|
(2,233
|
)
|
|
|
|
|
|
|
(2,233
|
)
|
Loan to affiliate company
|
|
|
|
|
|
|
(4,465
|
)
|
|
|
|
|
|
|
|
|
|
|
(4,465
|
)
|
Increase in long-term receivable from affiliate companies
|
|
|
|
|
|
|
(5,087
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,087
|
)
|
Dividends from affiliate companies
|
|
|
14,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,595
|
|
Deposits for vessels, port terminals and other fixed assets
|
|
|
|
|
|
|
(22,112
|
)
|
|
|
(23,225
|
)
|
|
|
|
|
|
|
(45,337
|
)
|
Acquisition of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(10,200
|
)
|
|
|
|
|
|
|
(10,200
|
)
|
Acquisition of vessels
|
|
|
|
|
|
|
(123,541
|
)
|
|
|
|
|
|
|
|
|
|
|
(123,541
|
)
|
Purchase of property, equipment and other fixed assets
|
|
|
(15
|
)
|
|
|
(172
|
)
|
|
|
(68,433
|
)
|
|
|
|
|
|
|
(68,620
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by/(used in) in investing activities
|
|
|
14,580
|
|
|
|
(155,377
|
)
|
|
|
(104,091
|
)
|
|
|
|
|
|
|
(244,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer (to)/from other group subsidiaries
|
|
|
(71,968
|
)
|
|
|
69,731
|
|
|
|
2,237
|
|
|
|
|
|
|
|
|
|
Issuance of common stock
|
|
|
643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
643
|
|
Net proceeds from issuance of preferred stock
|
|
|
163,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,602
|
|
Proceeds from long-term loans, net of debt issuance costs
|
|
|
|
|
|
|
71,027
|
|
|
|
|
|
|
|
|
|
|
|
71,027
|
|
Proceeds from issuance of senior notes, net of debt issuance costs
|
|
|
|
|
|
|
|
|
|
|
365,668
|
|
|
|
|
|
|
|
365,668
|
|
Repayment of long-term debt and payment of principal
|
|
|
|
|
|
|
(20,692
|
)
|
|
|
(69
|
)
|
|
|
|
|
|
|
(20,761
|
)
|
Repayment of senior notes
|
|
|
|
|
|
|
|
|
|
|
(290,000
|
)
|
|
|
|
|
|
|
(290,000
|
)
|
Contribution from noncontrolling shareholders
|
|
|
|
|
|
|
3,484
|
|
|
|
|
|
|
|
|
|
|
|
3,484
|
|
Dividends paid
|
|
|
(32,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32,730
|
)
|
Increase in restricted cash
|
|
|
|
|
|
|
(355
|
)
|
|
|
|
|
|
|
|
|
|
|
(355
|
)
|
Acquisition of noncontrolling interest
|
|
|
|
|
|
|
(10,889
|
)
|
|
|
|
|
|
|
|
|
|
|
(10,889
|
)
|
Payments of obligations under capital leases
|
|
|
|
|
|
|
|
|
|
|
(1,399
|
)
|
|
|
|
|
|
|
(1,399
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
59,547
|
|
|
|
112,306
|
|
|
|
76,437
|
|
|
|
|
|
|
|
248,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
64,770
|
|
|
|
9,593
|
|
|
|
(14,638
|
)
|
|
|
|
|
|
|
59,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
33,769
|
|
|
|
67,492
|
|
|
|
86,570
|
|
|
|
|
|
|
|
187,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
98,539
|
|
|
$
|
77,085
|
|
|
$
|
71,932
|
|
|
$
|
|
|
|
$
|
247,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-60
NAVIOS MARITIME HOLDINGS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
NOTE 25: SUBSEQUENT EVENTS
|
a)
|
On February 10, 2017, a New York arbitration tribunal ruled in favor of Navios Logistics on a dispute with Vale. Vale has been ordered to pay Navios Logistics $21,500, compensating for all unpaid invoices, late
payment of invoices, and legal fees incurred. The full amount had been received in March 2017.
|
|
b)
|
On February 21, 2017, Navios Holdings agreed to transfer to Navios Partners its participation in Navios Revolving Loans I and Navios Term Loans I, both relating to Navios Europe I, for a consideration of $4,050 in
cash and 13,076,923 newly issued common units of Navios Partners. Concurrently, Navios Holdings acquired 266,876 common units in Navios Partners in order to maintain its 2% general partner interest for a cash consideration of $468. The transaction
closed on March 17, 2017.
|
|
c)
|
In February 2017, two self-propelled barges of Navios Logistics fleet, Formosa and San Lorenzo, were sold for a total of $1,109 to be paid in cash. Sale price will be received in installments through 2023.
|
|
d)
|
On March 16, 2017, Navios Holdings agreed to sell to an unrelated third party the Navios Ionian, a 2000 built Japanese dry bulk vessel of 52,067 dwt, for a total net sale price of $5,280 to be paid in cash, with
delivery expected in August 2017. As of March 31, 2017, the impairment loss due to the sale is expected to be approximately $9,098.
|
|
e)
|
On March 20, 2017, Navios Partners announced that it has closed an offering of 47,795,000 common units at $2.10 per common unit, raising approximately $100,000 of gross proceeds. Navios Holdings acquired 975,408
common units in Navios Partners in order to maintain its 2% general partner interest for a cash consideration of $2,048.
|
|
f)
|
On March 21, 2017, Navios Holdings announced that it commenced an offer to exchange newly issued shares of the Companys common stock for any and all outstanding American Depositary Shares, each representing
1/100th of a share of either Series G or Series H. For every Series G surrendered, the Company offered 8.25 shares of common stock, with a value of $14.61 (as of March 20, 2017) and for Series H surrendered, the Company offered 8.11 shares of
common stock, with a value of $14.36 (as of March 20, 2017). On April 19, 2017, Navios Holdings announced the completion of the exchange offer. A total of 766 Series G and Series H were validly tendered, representing an aggregate nominal value
of approximately $1,914. Navios Holdings issued a total of 625,815 shares of common stock.
|
|
g)
|
Navios Logistics has signed a shipbuilding contract for the construction of a river and estuary tanker for a total consideration of 12,400 ($13,061). Pursuant to this acquisition, Navios Logistics has secured a
credit from the shipbuilder to finance of up to 50% of the purchase price, with a maximum of 6,200 ($6,532), to be repaid in 24 equal installments after delivery of the vessel, plus 6.75% interest per annum. The vessel is expected to be
delivered in the first quarter of 2018.
|
F-61