- Quarterly Cash Distribution of $0.4225 per unit; $1.69 per unit annualized
- Net Income: $5.9 million in Q2; $13.4 million for the six months
- EBITDA: $16.4 million in Q2; $34.1 million for the six months
- Operating Surplus: $10.0 million in Q2; $21.3 million for the six months
- Profit share: $2.6 million of profit sharing in Q2; $4.3 million for the six months
MONACO, July 28, 2016 (GLOBE NEWSWIRE) -- Navios Maritime Midstream Partners L.P. ("Navios Midstream") NAP, an owner and operator of tanker vessels, reported its financial results today for the second quarter and the six month period ended June 30, 2016.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Midstream stated, "We are pleased to report $16.4 million of EBITDA and $5.9 million of net income for the second quarter of 2016, representing increases of 17.5% and 9.2%, respectively, over the prior comparable period. We recently announced a distribution of $0.4225 per unit, representing an annual distribution of $1.69 per unit and a current yield of approximately 13%. Our total unit coverage was 1.14x for the quarter."
Angeliki Frangou continued, "While the broader MLP market has appreciated about 11% this year, the market is well below the 2014 highs. Our financial strength allows us to maintain our dividend while waiting for the MLP market to recover further - we have conservative leverage and low operating costs. In addition, we have fixed virtually all available days for the next 30 months through 2018."
RECENT DEVELOPMENTS
Cash Distribution
The Board of Directors of Navios Midstream declared a cash distribution for the second quarter of 2016 of $0.4225 per unit. The cash distribution is payable on August 12, 2016 to unitholders of record as of August 10, 2016.
Profit Share
During the second quarter of 2016, Navios Midstream benefited from the healthy VLCC spot market and recognized $2.6 million under its profit sharing arrangements. Profit share recognized for the six months ended June 30, 2016, was $4.3 million.
Long – Term Cash Flow
Navios Midstream has entered into long-term charter-out agreements for its vessels, with a remaining average term of 4.8 years, which are expected to provide a stable base of revenue and distributable cash flow. Navios Midstream has currently contracted out 100% of its available days for 2016 and 2017 and 99.4% days for 2018, including the backstop commitment provided by Navios Maritime Acquisition Corporation ("Navios Acquisition"), expecting to generate revenues of approximately $93.8 million, $86.6 million and $86.2 million, respectively. The average expected daily charter-out rate for the fleet is $42,707, $39,559 and $39,587 for 2016, 2017 and 2018, respectively.
FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Midstream has compiled condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2015. The quarterly and six month period 2016 and 2015 information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA and Operating Surplus are non-GAAP financial measures and should not be used in isolation or substitution for Navios Midstream's results.
| (in $‘000 except per unit data) | Three Month Period ended June 30, 2016 (unaudited) | Three Month Period ended June 30, 2015 (unaudited) | Six Month Period ended June 30, 2016 (unaudited) | Six Month Period ended June 30, 2015 (unaudited) | ||||||||||||
| Revenue | $ | 22,695 | $ | 18,350 | $ | 46,844 | $ | 35,053 | ||||||||
| Net income | 5,889 | 5,394 | 13,384 | 11,706 | ||||||||||||
| EBITDA | 16,434 | 13,987 | 34,122 | 26,600 | ||||||||||||
| Earnings per common unit (basic and diluted) | 0.28 | 0.26 | 0.65 | 0.59 | ||||||||||||
| Operating Surplus | 10,000 | 10,299 | 21,271 | 19,723 | ||||||||||||
| Maintenance and replacement capital expenditure reserve | (3,580 | ) | (2,354 | ) | (7,160 | ) | (4,502 | ) | ||||||||
Three month periods ended June 30, 2016 and 2015
Revenue for the three month period ended June 30, 2016 increased by $4.3 million to $22.7 million, as compared to $18.4 million for the same period in 2015. The increase was due to the acquisition of the Nave Celeste and the C. Dream in June 2015 and an increase of $1.2 million in profit sharing recognized in relation to certain charters for the three month period ended June 30, 2016, as compared to the same period of 2015. Time Charter Equivalent ("TCE") was $45,783 for the three month period ended June 30, 2016 and $46,545 for the three month period ended June 30, 2015. The decrease in TCE was due to the lower average charter rate of the two VLCCs acquired in June 2015, compared to the existing fleet.
EBITDA increased by approximately $2.4 million to $16.4 million for the three month period ended June 30, 2016, as compared to $14.0 million for the same period in 2015. The increase in EBITDA was mainly due to a $4.3 million increase in revenue. The above increase was partially mitigated by a: (a) $1.5 million increase in management fees due to the two VLCCs acquired in June 2015; (b) $0.2 million increase in general and administrative expenses; and (c) $0.1 million increase in time charter expenses.
The reserve for estimated maintenance and replacement for capital expenditures for the three month period ended June 30, 2016 and 2015 was $3.6 million and $2.4 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).
Navios Midstream generated an Operating Surplus for the three month period ended June 30, 2016 of $10.0 million. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership's ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).
Net income for the three month period ended June 30, 2016 was $5.9 million compared to a $5.4 million for the three month period ended June 30, 2015. The increase in net income of $0.5 million was due to a: (a) $2.4 million increase in EBITDA; and (b) $0.1 million increase in interest income; partially mitigated by a: (i) $1.3 million increase in depreciation and amortization; and (ii) $0.7 million increase in direct vessel expenses.
Earnings per common unit for the three month period ended June 30, 2016 was $0.28.
Six month periods ended June 30, 2016 and 2015
Revenue for the six month period ended June 30, 2016 increased by approximately $11.8 million to $46.8 million, as compared to $35.1 million for the same period in 2015. The increase was due to the acquisition of the Nave Celeste and the C. Dream in June 2015 and an increase of $1.9 million in profit sharing recognized in relation to certain charters for the six month period ended June 30, 2016, as compared to the same period of 2015. Time Charter Equivalent ("TCE") was $44,565 for the six month period ended June 30, 2016 and $46,234 for the six month period ended June 30, 2015. The decrease in TCE was due to the lower average charter rate of the two VLCCs acquired in June 2015, compared to the existing fleet.
EBITDA increased by approximately $7.5 million to $34.1 million for the six month period ended June 30, 2016, as compared to $26.6 million for the same period in 2015. The increase in EBITDA was mainly due to an $11.8 million increase in revenue. The above increase was partially mitigated by a: (a) $3.2 million increase in management fees due to the two VLCCs acquired in June 2015; (b) $0.5 million increase in general and administrative expenses; (c) approximately $0.4 million increase in time charter expenses; and (d) $0.1 million increase in other (expense)/ income, net.
The reserve for estimated maintenance and replacement capital expenditures for the six month period ended June 30, 2016 and 2015 was $7.2 million and $4.5 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).
Navios Midstream generated an Operating Surplus for the six month period ended June 30, 2016 of $21.3 million. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership's ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).
Net income for the six month period ended June 30, 2016 was $13.4 million compared to $11.7 million for the six month period ended June 30, 2015. The increase of $1.7 million in net income was due to a: (a) $7.5 million increase in EBITDA; and (b) $0.1 million increase in interest income; partially mitigated by a: (i) $2.1 million increase in interest expenses and finance cost; (ii) $2.8 million increase in depreciation and amortization; and (iii) $1.0 million increase in direct vessel expenses.
Earnings per common unit for the six month period ended June 30, 2016 was $0.65.
Fleet Employment Profile
The following table reflects certain key indicators of Navios Midstream's core fleet performance for the three and six month periods ended June 30, 2016 and 2015.
| Three Month Period ended June 30, 2016 (unaudited) | Three Month Period ended June 30, 2015 (unaudited) | Six Month Period ended June 30, 2016 (unaudited) | Six Month Period ended June 30, 2015 (unaudited) | ||||||||||||
| FLEET DATA | |||||||||||||||
| Available days(1) | 488 | 390 | 1,034 | 750 | |||||||||||
| Operating days(2) | 485 | 390 | 1,030 | 750 | |||||||||||
| Fleet utilization(3) | 99.4 | % | 100.0 | % | 99.6 | % | 100.0 | % | |||||||
| Vessels operating at period end | 6 | 6 | 6 | 6 | |||||||||||
| AVERAGE DAILY RESULTS | |||||||||||||||
| Time Charter Equivalent per day(4) | $ | 45,783 | 46,545 | $ | 44,565 | 46,234 | |||||||||
| (1 | ) | Available days for the fleet represent total calendar days the vessels were in Navios Midstream's possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues. |
| (2 | ) | Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues. |
| (3 | ) | Fleet utilization is the percentage of time that Navios Midstream's vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydockings or special surveys. |
| (4 | ) | Time Charter Equivalent ("TCE") rates: TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet. |
Conference Call details:
Navios Midstream's management will host a conference call today, Thursday, July 28, 2016 to discuss the results for the second quarter and six months ended June 30, 2016.
Conference Call details:
Call Date/Time: Thursday, July 28, 2016 at 08:30 am ET
Call Title: Navios Midstream Q2 2016 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 2661 4048
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 2661 4048
Slides and audio webcast:
There will also be a live webcast of the conference call, through the Navios Midstream's website (www.navios-midstream.com) under "Investors". Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A supplemental slide presentation will be available on the Navios Midstream's website under the "Investors" section by 8:00 am ET on the day of the call.
About Navios Maritime Midstream Partners L.P.
Navios Maritime Midstream Partners L.P. is a publicly traded master limited partnership which owns and operates crude oil tankers under long-term employment contracts. For more information, please visit our website at www.navios-midstream.com.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and expectations, including with respect to Navios Midstream's future dividends and Navios Midstream's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "may", "expects", "intends", "plans", "believes", "anticipates", "hopes", "estimates", and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Navios Midstream at the time these statements were made. Although Navios Midstream believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Midstream. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us, tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand, the aging of our vessels and resultant increases in operation and drydocking costs, the loss of any customer or charter or vessel, our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all, increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, potential liability from litigation and our vessel operations, including discharge of pollutants, general domestic and international political conditions, competitive factors in the market in which Navios Midstream operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Midstream's filings with the Securities and Exchange Commission including its Form 20-Fs and Form 6-Ks. Navios Midstream expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Midstream's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Midstream makes no prediction or statement about the performance of its common units.
Investor Relations Contacts
Navios Maritime Midstream Partners L.P.
+1 (212) 906 8647
Investors@navios-midstream.com
EXHIBIT 1
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Expressed in thousands of U.S. Dollars) | ||||||||
| June 30, 2016 | December 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 38,219 | $ | 37,834 | ||||
| Accounts receivable, net | 6,904 | 5,110 | ||||||
| Prepaid expenses and other current assets | 117 | 112 | ||||||
| Due from related parties | 7,042 | 2,804 | ||||||
| Total current assets | 52,282 | 45,860 | ||||||
| Vessels, net | 389,556 | 400,192 | ||||||
| Intangible assets | 26,807 | 28,450 | ||||||
| Deferred dry dock and special survey costs, net | 9,609 | 6,066 | ||||||
| Total non-current assets | 425,972 | 434,708 | ||||||
| Total assets | $ | 478,254 | $ | 480,568 | ||||
| LIABILITIES AND PARTNERS' CAPITAL | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 2,089 | $ | 412 | ||||
| Accrued expenses | 559 | 654 | ||||||
| Due to related parties | 403 | 438 | ||||||
| Deferred revenue | 2,494 | 1,931 | ||||||
| Current portion of long-term debt, net of deferred finance costs and discount | 654 | 643 | ||||||
| Total current liabilities | 6,199 | 4,078 | ||||||
| Long-term debt, net of deferred finance costs and discount | 196,841 | 197,176 | ||||||
| Total non-current liabilities | 196,841 | 197,176 | ||||||
| Total liabilities | $ | 203,040 | $ | 201,254 | ||||
| Commitments and contingencies | — | — | ||||||
| Total Partners' capital | ||||||||
| Common Unitholders (9,342,692 units issued and outstanding at June 30, 2016 and December 31, 2015) | 124,466 | 126,317 | ||||||
| Subordinated Series A Unitholders (1,592,920 units issued and outstanding at June 30, 2016 and December 31, 2015) | 27,063 | 27,379 | ||||||
| Subordinated Unitholders (9,342,692 units issued and outstanding at June 30, 2016 and December 31, 2015) | 118,303 | 120,154 | ||||||
| General Partner (413,843 units issued and outstanding at June 30, 2016 and at December 31, 2015) | 5,382 | 5,464 | ||||||
| Partners' capital | 275,214 | 279,314 | ||||||
| Total liabilities and Partners' capital | $ | 478,254 | $ | 480,568 | ||||
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| (Expressed in thousands of U.S. Dollars, except per unit amounts) | |||||||||||||||||
| Three Month Period ended June 30, 2016 (unaudited) | Three Month Period ended June 30, 2015 (unaudited) | Six Month Period ended June 30, 2016 (unaudited) | Six Month Period ended June 30, 2015 (unaudited) | ||||||||||||||
| Revenue | $ | 22,695 | $ | 18,350 | $ | 46,844 | $ | 35,053 | |||||||||
| Time charter expenses | (338 | ) | (197 | ) | (749 | ) | (377 | ) | |||||||||
| Direct vessel expenses | (952 | ) | (289 | ) | (1,588 | ) | (578 | ) | |||||||||
| Management fees (entirely through related party transactions) | (5,187 | ) | (3,705 | ) | (10,374 | ) | (7,125 | ) | |||||||||
| General and administrative expenses | (724 | ) | (482 | ) | (1,550 | ) | (1,017 | ) | |||||||||
| Depreciation and amortization | (6,378 | ) | (5,076 | ) | (12,779 | ) | (9,953 | ) | |||||||||
| Interest income | 69 | — | 69 | — | |||||||||||||
| Interest expenses and finance cost | (3,284 | ) | (3,228 | ) | (6,440 | ) | (4,363 | ) | |||||||||
| Other (expense)/ income, net | (12 | ) | 21 | (49 | ) | 66 | |||||||||||
| Net income | $ | 5,889 | $ | 5,394 | $ | 13,384 | $ | 11,706 | |||||||||
| Earnings per unit (basic and diluted) | |||||||||||||||||
| Common unitholders: | $ | 0.28 | 0.26 | $ | 0.65 | 0.59 | |||||||||||
| Subordinated Series A unitholders: | $ | 0.28 | 1.82 | $ | 0.65 | 3.63 | |||||||||||
| Subordinated unitholders: | $ | 0.28 | 0.26 | $ | 0.65 | 0.59 | |||||||||||
| NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Expressed in thousands of U.S. Dollars) | ||||||||
| Six Month Period Ended June 30, 2016 (unaudited) | Six Month Period Ended June 30, 2015 (unaudited) | |||||||
| Operating Activities | ||||||||
| Net income | $ | 13,384 | $ | 11,706 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 12,779 | 9,953 | ||||||
| Amortization of deferred finance fees and bond premium | 701 | 1,964 | ||||||
| Amortization of dry dock and special survey costs | 1,588 | 578 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase)/ decrease in prepaid expenses and other current assets | (5 | ) | 129 | |||||
| Payment for Drydocking | (5,131 | ) | (99 | ) | ||||
| Increase in accounts receivable | (1,794 | ) | (2,965 | ) | ||||
| Increase in accounts payable | 1,677 | 220 | ||||||
| Decrease in accrued expenses | (95 | ) | (135 | ) | ||||
| Decrease in due to/ from related parties | (4,273 | ) | (4,190 | ) | ||||
| Increase in deferred revenue | 563 | 556 | ||||||
| Net cash provided by operating activities | $ | 19,394 | $ | 17,717 | ||||
| Investing Activities | ||||||||
| Acquisition of vessels | (500 | ) | (72,252 | ) | ||||
| Net cash used in investing activities | $ | (500 | ) | $ | (72,252 | ) | ||
| Financing Activities | ||||||||
| Proceeds from Long term debt, net of deferred finance costs and discount | — | 198,081 | ||||||
| Loan repayment | (1,025 | ) | (126,000 | ) | ||||
| IPO expenses | — | (2,922 | ) | |||||
| Dividend paid | (17,484 | ) | (11,627 | ) | ||||
| Proceeds from issuance of general partner units | — | 551 | ||||||
| Net cash (used in)/ provided by financing activities | $ | (18,509 | ) | $ | 58,083 | |||
| Net increase in cash and cash equivalents | 385 | 3,548 | ||||||
| Cash and cash equivalents, beginning of year | $ | 37,834 | $ | 30,877 | ||||
| Cash and cash equivalents, end of year | $ | 38,219 | $ | 34,425 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash interest paid | $ | 5,760 | $ | 2,375 | ||||
| Non-cash financing activities | ||||||||
| Accrued IPO expenses | $ | — | $ | 430 | ||||
EXHIBIT 2
| Owned Vessels | Type | Built | Capacity (DWT) | ||||||
| Shinyo Kieran | VLCC | 2011 | 297,066 | ||||||
| Shinyo Saowalak | VLCC | 2010 | 298,000 | ||||||
| Nave Celeste | VLCC | 2003 | 298,717 | ||||||
| Shinyo Kannika | VLCC | 2001 | 287,175 | ||||||
| Shinyo Ocean | VLCC | 2001 | 281,395 | ||||||
| C. Dream | VLCC | 2000 | 298,570 | ||||||
| Option Vessels(1) | Type | Built | Capacity (DWT) | ||||||
| Nave Buena Suerte | VLCC | 2011 | 297,491 | ||||||
| Nave Quasar | VLCC | 2010 | 297,376 | ||||||
| Nave Galactic | VLCC | 2009 | 297,168 | ||||||
| Nave Neutrino | VLCC | 2003 | 298,287 | ||||||
| Nave Electron | VLCC | 2002 | 305,178 | ||||||
(1) Navios Midstream has options, exercisable through November 18, 2016, to acquire up to five VLCCs at fair market value from Navios Maritime Acquisition Corporation.
EXHIBIT 3
Disclosure of Non-GAAP Financial Measures
1. EBITDA
EBITDA represents net income before interest and finance costs, before depreciation and amortization and income taxes. We use EBITDA as a liquidity measure and reconcile EBITDA to net cash provided by/(used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by/(used in) operating activities adding back, when applicable and as the case may be, the effect of (i) net increase/(decrease) in operating assets, (ii) net (increase)/decrease in operating liabilities, (iii) net interest cost, (iv) amortization of deferred finance charges and other related expenses, (v) provision for losses on accounts receivable, (vi) equity in affiliates, net of dividends received, (vii) payments for drydock and special survey costs, (viii) gain/(loss) on sale of assets/subsidiaries, and (ix) impairment charges. Navios Midstream believes that EBITDA is the basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Midstream's ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Midstream also believes that EBITDA is used (i) by potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Midstream's results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA does not reflect any cash requirements for such capital expenditures. As a result of these limitations, EBITDA should not be considered as a principal indicator of Navios Midstream's performance. Furthermore, our calculation of EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.
2. Operating Surplus
Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense and estimated maintenance and replacement capital expenditures. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Midstream's capital assets.
Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
3. Available Cash
Available Cash generally means for each fiscal quarter, all cash on hand at the end of the quarter:
- less the amount of cash reserves established by the Board of Directors to:
- provide for the proper conduct of Navios Midstream's business (including reserve for maintenance and replacement capital expenditures);
- comply with applicable law, any of Navios Midstream's debt instruments, or other agreements; or
- provide funds for distributions to the unitholders and to the general partner for any one or more of the next four quarters;
- plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under any revolving credit or similar agreement used solely for working capital purposes or to pay distributions to partners.
Available Cash is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Available cash is not required by accounting principles generally accepted in the United States and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity.
4. Reconciliation of Non-GAAP Financial Measures
| Three Month Period ended June 30, 2016 ($ ‘000) (unaudited) | Three Month Period ended June 30, 2015 ($ ‘000) (unaudited) | Six Month Period ended June 30, 2016 ($ ‘000) (unaudited) | Six Month Period ended June 30, 2015 ($ ‘000) (unaudited) | ||||||||||||||
| Net cash provided by operating activities | $ | 9,464 | $ | 8,011 | $ | 19,394 | $ | 17,717 | |||||||||
| Net increase in operating assets | 6,586 | 1,935 | 6,930 | 2,935 | |||||||||||||
| Net (increase)/ decrease in operating liabilities | (2,481 | ) | 2,654 | 2,128 | 3,549 | ||||||||||||
| Net interest cost | 3,215 | 3,228 | 6,371 | 4,363 | |||||||||||||
| Amortization of deferred finance cost and bond premium | (350 | ) | (1,841 | ) | (701 | ) | (1,964 | ) | |||||||||
| EBITDA | $ | 16,434 | $ | 13,987 | $ | 34,122 | $ | 26,600 | |||||||||
| Cash interest paid | $ | (2,923 | ) | $ | (1,334 | ) | $ | (5,760 | ) | $ | (2,375 | ) | |||||
| Cash interest income | 69 | — | 69 | — | |||||||||||||
| Maintenance and replacement capital expenditures | $ | (3,580 | ) | $ | (2,354 | ) | $ | (7,160 | ) | $ | (4,502 | ) | |||||
| Operating Surplus | $ | 10,000 | $ | 10,299 | $ | 21,271 | $ | 19,723 | |||||||||
| Cash distribution paid relating to the first six months | — | — | (8,742 | ) | (7,865 | ) | |||||||||||
| Cash reserves | $ | (1,258 | ) | $ | (1,763 | ) | $ | (3,787 | ) | $ | (3,322 | ) | |||||
| Available cash for distribution | $ | 8,742 | $ | 8,536 | $ | 8,742 | $ | 8,536 | |||||||||
| Three Month Period ended June 30, 2016 ($ ‘000) (unaudited) | Three Month Period ended June 30, 2015 ($ ‘000) (unaudited) | Six Month Period ended June 30, 2016 ($ ‘000) (unaudited) | Six Month Period ended June 30, 2015 ($ ‘000) (unaudited) | |||||||||||||
| Net cash provided by operating activities | $ | 9,464 | $ | 8,011 | $ | 19,394 | $ | 17,717 | ||||||||
| Net cash used in investing activities | $ | — | $ | (72,252 | ) | $ | (500 | ) | $ | (72,252 | ) | |||||
| Net cash (used in)/ provided by financing activities | $ | (9,254 | ) | $ | 65,935 | $ | (18,509 | ) | $ | 58,083 | ||||||
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