NAVIOS MARITIME PARTNERS L.P.
UNAUDITED CONDENSED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. Dollars except unit and per unit data)
For the nine month periods ended September 30, 2019 and 2018, the Company recorded an amount of $9,113
and $9,051, respectively, of deferred revenue amortization in the condensed Consolidated Statements of Operations under the caption Time charter and voyage revenues.
As of September 30, 2019, the outstanding balances of the current and non-current portion of deferred revenue in
relation to HMM amounted to $3,901 and $3,596, respectively. As of December 31, 2018, the outstanding balances of the current and non-current portion of deferred revenue in relation to HMM amounted to
$12,101 and $4,366, respectively.
During August 2016, the Company sold all the shares for net proceeds on sale of $20,842 resulting in a loss on sale of
$19,435.
On January 12, 2017, the Company sold the vessel the MSC Cristina (see Note 4 Vessels, net) for a gross sale price of $126,000 and
received a cash payment of $107,250 and a note receivable of $18,750 accruing interest at 6% per annum payable in 16 quarterly instalments. As of September 30, 2019, the outstanding balances of the current and non-current note receivable amounted to $4,687 and $1,172, respectively. For each of the nine month periods ended September 30, 2019 and 2018, the Company recorded interest income of $345 and $558,
respectively, including accrued interest income of $48 and $86, respectively, under the caption Interest income in the condensed Consolidated Statements of Operations.
NOTE 14 INVESTMENT IN AFFILIATES
Navios
Europe I: On October 9, 2013, Navios Holdings, Navios Acquisition and Navios Partners established Navios Europe I and have economic interests of 47.5%, 47.5% and 5.0%, respectively and effective from November 2014, voting interests of 50%,
50% and 0%, respectively. 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 $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 have made available to Navios Europe I revolving loans of up to $24,100 to fund
working capital requirements (collectively, the Navios Revolving Loans I). In December 2018, the availability under the Revolving Loans I was increased by $30,000.
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 and repayments of the Navios Revolving Loans I) according to a defined waterfall calculation. Navios Partners evaluated its investment in Navios Europe I under ASC 810 and concluded that Navios Europe I is a variable interest entity
(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 Partners 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.
As of September 30, 2019 and December 31, 2018, the estimated maximum potential loss by Navios Partners in Navios Europe I would have been $15,705
and $11,705, respectively, excluding accrued interest, which represents the Companys carrying value of the investment of $500 as of September 30, 2019 (December 31, 2018: $500) plus the Companys balance of the Navios Revolving Loans
I of $15,205 as of September 30, 2019 (December 31, 2018: $11,205), excluding accrued interest, and does not include the undrawn portion of the Navios Revolving Loans I.
As of September 30, 2019, the Navios Partners portion of the Navios Revolving Loan I outstanding was $15,205. No investment income was recognized
for the nine month periods ended September 30, 2019 and 2018.
On November 22, 2019, an agreement was reached to liquidate Navios Europe I (see also
Note 18 Subsequent Events).
Navios Europe II: On February 18, 2015, Navios Holdings, Navios Acquisition and Navios Partners
established Navios Europe II and have economic interests of 47.5%, 47.5% and 5.0%, respectively and voting interests of 50%, 50% and 0%, respectively. From June 8, 2015 through December 31, 2015, Navios Europe II acquired fourteen vessels
for aggregate consideration consisting of: (i) cash consideration of $145,550 (which was funded with the proceeds of a $131,550 senior loan facilities net of loan discount amounting to $3,375 (the Senior Loans II) and loans
aggregating $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) with a face amount of $182,150 and fair value of $99,147, at the acquisition date. In addition to the Navios Term Loans II, Navios Holdings, Navios Acquisition and Navios Partners
have also made 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 funds available under the Navios Revolving
Loans II was increased by $14,000.
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