Operator: Thank you for joining us for Navios Maritime Partners Second Quarter 2018 Earnings Conference Call. With us today from the company are Chairman and CEO, Angeliki Frangou; Chief Financial Officer, Stratos Desypris; and Executive Vice President of Business Development, George Achniotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the Investors section of Navios Partners' website at www.navios-mlp.com. You'll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call can also be found there.

Now I'll review the Safe Harbor statement. This conference call could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners' management and are subject to numerous material risks and uncertainties, which could cause actual results to differ from forward-looking statements. Such risks are more fully discussed in Navios Partners' filings with the Securities and Exchange Commission, including the company's most recent 20-F.

The information discussed on this call should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in the call. The agenda for today's call is as follows; first, Mr. Frangou will offer opening remarks; next, Mr. Desypris will give an overview of Navios Partners financial results; then, Mr.

Achniotis will provide an operational update and industry overview and wrapping, we'll open the call to questions. Now I turn the call over to Navios Partners Chairman and CEO, Angeliki Frangou. Angeliki?

Angeliki Frangou: Thank you, Laura, and good morning to all of you who joined us on today's call. I am pleased with the results for the second quarter of 2018, for which Navios Partners had $34.7 mill adjusted EBITDA and $9.2 mill of adjusted net income. We declared a quarterly distribution of $2 cent per unit for the second quarter, representing a current yield of approximately 4%.

We used excess cash flow and new equity to renew and expend our dry bulk fleet. As you can see from slide 4, NMM owns 35 dry bulk vessels. We also leveraged historic weakness in the container sector by establishing Navios Containers, a growth vehicle with 26 containerships. Having taken advantage of this opportunity we restored distribution to unitholders in the 1st Quarter of this year, and I am pleased with this trajectory, although there is plenty of hard work ahead of us. Slide 5 provide some of Navios Partners highlights.

NMM has no significant near-term debt maturities, and has significant expected free cash flow generation. Our credit ratios are strong with 30.9% in net debt to capitalization proforma for the recent sale of the two containerships. Slide 6 highlights NMM's long term strategy. NMM renewed and expanded its drybulk fleet. Since 2016, NMM has added on a net basis 11 dry bulk vessels increasing dry bulk fleet capacity by 52 % on a deadweight tons basis, and reducing the average vessel’s age by 15 %.

We are also focused on deleveraging. We used sales proceeds of container ships to repay $20.2 million in bank debt. NMM’s net debt to book capitalization ratio is reduced by 25.4% since 4th Quarter of 2016. We will work to continue to bring this down. Today NMM owns 36% of Navios Containers, which filed an F1 with SEC to facilitate a U.S.

public listing. In the past we invested a total of $65 million of equity in Navios Containers. We recently sold two container ships to Navios Containers for $67 million and subsequantly agreed to sell NMM 5 remaining containerships to Navios Containers for $180 million, subject to various conditions. When these sales are completed, Navios Partners will have the dry bulk business and Navios Containers will have the container business, simplifying our structure. Slide 7 highlights our deleveraging efforts to intend to delever through inter related cash flow and cash proceeds from container ships sales.

In July we prepaid $20.2 million of debt with the sales proceeds of two container ships. Proforma Navios Partners net debt to book capitalization decreased to 30.9%. This is a 25.4% reduction since Q4 of 2016, and a 16% reduction since Q4 of 2017. And we intend to prepay an additional $180 mill of debt from the sales proceeds of the 5 remaining container ships. Should this sale materialize, as presently contemplated, our net debt ratio will further decrease materially.

Slide 8 details the recent acquisition of two dry bulk vessels from NM for an aggregate purchase price of $79 million. The vessels include one 2016 built Japanese Capesize vessel for $49 million and one 2016 built Japanese Kamsarmax vessel for $30 million. Both vessels will be on an index charter. The acquisition will be financed with a $44 million bank loan and cash. The loan comes with favorable terms.

The 14 years amortization profile, 5 year terms have an interest at LIBOR plus 2.90%. The two vessels acquisition will provide a significant financial benefit. At current rate, and as currently financed, the vessels are expected to generate $10.7 million of EBITDA, and $5.2 million of free cash flow annually, equating to 14.7% free cash flow yield, a 20 year average rates, and as currently financed, the vessels are expected to generate $17.2 million of EBITDA, and $11.7 million of free cash flow annually, equating to a 33.3% free cash flow yield. Free cash flow is expected to increase by 126% if charter rates move to long term averages. Slide 9 details are around the fleet renewal and expansion program.

Since the beginning of 2017 we invested about $270 million and added 13 younger vessels to our fleet with an average age of 6.9 years. We also sold two vessels, with an average age of 20.4 years. This S&P activities resulted in a 52% increase in our fleet capacity, and a 15% decrease in the fleet average age. Please turn to slide 10, which provides further color to NMM’s potential container ship dropdown to Navios Container that I touched upon earlier, We agreed to sell our remaining five container ships to Navios Container for $180 million. Proceeds from this sales will allow NMM to further delever its balance sheet.

The transaction was approved by the Conflicts Committee of Navios Partners. Slide 11 shows a significant cash flow potential. For 2018 contract revenues fully cover total expenses. Therefore NMM’s fleet is expected to generate free cash flow potential through 4012 open and index days at current rates and capital structure NMM’s fleet would generate about $73 million of free cash flow and if the rate recover to the 20 year averages, NMM’s fleet will generate about $101 million in free cash flow. Certain reflects a 41% potential upside in free cash flow.

Slide 12 shows us the liquidity. As of June 30th 2018, we had a total cash of $41 million, and a total debt of $494.5 million. Proforma for the completed sale of the two container ships to Navios Container, and the related $20.2 million in bank debt, our cash balance is $87.6 million, and our bank debt is $474.3 million. Our proforma net debt to book capitalization is 30.9%, a 13.5% reduction compared to levels prior to the vessels sales. Moreover, we have not much debt due until 2020 and have built up additional fire power for future growth, At this point, I would like to turn the call over to Stratos Desypris, Navios Partners CFO, who will take you through the results of the second quarter of 2018.

Stratos Desypris: Thank you, Angeliki, and good morning, all. I will briefly review our unaudited financial results for the first quarter and first half of 2018 ended June 30, 2018. The financial information is included in the press release and is summarized in the slide presentation on the company's website. Moving to the financial results, as shown on Slide 13. During the second quarter and first half of 2018 our results were affected by the 115 days of operation of Navios Container which was consolidated in our accounts.

During that period, Navios Container reported $3.1 million of revenue and $2.3 million of EBITDA. In order for the comparison to be more meaningful, the below discussion focus only on Navios Partners results. Revenue for the 2nd quarter 2018 increased by 24% to $58.2 million, compared to $46.9 million for the 2nd quarter 2017. The increase was mainly due to the 520 additional days of the enlarged dry bulk fleet. Adjusted EBITDA for the 2nd quarter 2018 increased to $34.7 million, compared to $30.3 million for the 2nd quarter of 2017, primarily due to the increase in revenues, and the 1.6 million increase in equities and net earnings of our affiliate companies.

This increase was mitigated mainly by a $2.6 million in management fees, due to the increase in fleet. Adjusted net income for the 2nd Quarter of 2018 amounted to $9.2 million - $5.2 million higher than the corresponding quarter of last year. Operating surplus for the 2nd quarter of 2018 amounted to $19.8 million. Replacement and maintenance capital reserve was $6.4 million. And fleet utilization for the 2nd quarter of 2018 was almost 99%.

Moving to the six months operation, the time charter revenue for the six months increased by 24.5% to $111.2 million, compared to $89.3 million in the first half of 2017. The increase was mainly due to the 913 additional days reflected the increased dry bulk fleet. Adjusted EBITDA for the first half of 2018 amounted to $66.2 million, compared to $56.2 million in the same period of last year. By and large due to the increased revenue. Adjusted net income amounted to $15.2 million for the first half of 2018, compared to $4.8 million in the same period of 2017.

Operating surplus for the six months ended June 30th 2018 was $37.2 million. On slide 14, I will briefly discuss some key balance sheet data. At the end of the 2nd quarter, cash and cash equivalents was $41 million, and net debt to book capitalization was $35.7%. Long term debt, including the current portion, net of the fees and discounts, decreased by $0.9 million, and amounted to $494.5 million, reflecting the payments of approximately $16.7 million and the additional $14.3 million financing for the acquisition of two dry bulk vessels delivered during the quarter. Shortly after the close of 2nd quarter, we completed the sale of two containerships to Navios Container for $67 million and then paid $20.2 million of debt.

Proforma for this transaction cash amounted to $87.6 million. Also proforma net debt to book capitalization reduced to 30.9%, representing approximately 16% decrease compared to last year. Moving to slide 15, we declared distribution for the 2nd quarter 2018 of two cents per unit, equivalent to eight cent per unit on an annualized basis. Our current annual distribution provide for an effective yield of approximately 4% based on yesterday’s closing price. And the record date for distribution is August 7th, and the payment date is August 10, 2018.

Total distribution for the quarter amount to $3.4 million. Our common unit coverage for the quarter is 5.9 times. Slide 16 shows the details of our fleet. We have a large modern diverse fleet, with a total capacity of 4.5 million deadweight. And an average age of 9.8 years.

Our fleet consist of 40 vessels, 14 Capesize, 18 Panamax, 3 Ulta Handymax and 5 Container ships. Moving to slide 17, as Angeliki mentioned earlier, we have been active in expanding our dry bulk fleet. From the beginning of 2017 up to today, we have grown our dry bulk fleet by 11 vessels. We did this, whilst selling two other vessels, purchasing 12 liner vessels, and entering into one long term bareboat charter. As a result, we have expanded the capacity of our fleet by 52%, and we have reduced the average age of the drybulk fleet by 15%.

The table below details the vessels we acquired. In slide 18, you can see the list of our fleet with the contracted rates, and the expiration dates. Our charters have an average remaining contract duration of approximately 2 years. Currently we have contracted approximately 88.88% of our available days for 2018, and 35.6% for 2019, including days contracted on index linked charters. The expiration dates extend to 2028.

As showed in slide 19, we are an efficient low cost operator. We benefit from our sponsors economic of scale. We recently extended our management agreements until December 31st 2022, and fixed our operating costs until December 31st of 2019. There is no additional charge for commissions, or commissions on technical management, nor any fees for S&P and financing transactions. In slide 20, you can see the details of Navios Containers.

This entity listed on Oslo on Over the Counter market in June 2017, and has raised a total of $180 million of equity. It has acquired 26 container ships, with a further visible growth pipeline. Currently Navios Partners have a 36% ownership invested in Navios Containers, plus 6.8% balance. I now pass the call to George Achniotis, Executive Vice President of Business Development to discuss the industry section.

George Achniotis: Thank you, Stratos.

Please turn to slide 22. The IMF forecast world economic growth at 3.9% for both 2018 and 2019. Emerging and developing Asian markets, which drive dry bulk demand, are expected to grow at 6.5% in 2018 and 2019. When the pipe of synchronized global economic growth, dry bulk trade grew by 4% in 2017, and is forecasted to rise by 2.7% in 2018, slightly higher than the expected 20.5% net fleet growth. The current trade tensions, particularly between the U.S.A.

and China is not expected to have a significant effect on the dry bulk trade. On the contrary, this may initially have a positive impact on the tons miles, as commodities find new routes to the end users. We have already seen this in the shipments of grain from the U.S.A. to South America. The average Bulk Dry Index over the first half of 2018 recorded about 25% increase over first half of 2017.

The dry bulk market still has substantial upside. Charter rates are still about 40% below the 20 years average. Turn to slide 23. World wide seaborne iron ore trade increased about 5% in the first half 2018. Chinese steel production rose by 6.6%.

Chinese steel exports continue to decrease on the part of increased domestic demand, which has been stimulated by large infrastructure projects, and a recovery in the housing market. The [indiscernible] and road project is a corner stone of China’s economical plan for the next five years. It supports steel and power demand, inside and outside China. Substituting Chinese expensive low quality iron ore, with lower price and higher quality iron ore imports are continuing. Up to the end of May, domestic production was down by 36%, whilst import was up slightly by 0.6%.

Our forecast rise by 2.8% in 2018. Vale recently reiterated that they expect to meet the 2018 production target of about 390 million tons, which will result in a sizeable rise in exports volumes for Q3 and Q4 of 2018. Increased activity in the spot market is pushing the Cape time charter index to $25,000 per day. The Chinese continue to favour high quality iron ore, as they navigate new environmental restrictions. Please turn to slide 24.

The Chinese government continues to rationalize the coal production, closing down small inefficient mines, encouraging consolidation of larger mining groups. It is expected that the restructuring of the Chinese coal industry will continue to keep the domestic coal prices high, and encourage import as inefficient polluting mines are closed. Chinese electric production continues to increase. It is up about 8% this year to date. Through May of 2018 Chinese coal import was up about 14%.

U.S. coal export has increased over 30% so far year to date, driven by Asian demand, increasing tons miles. Moving to slide 25. In spite of a significantly better market this year, the non-delivery rate remains about 30%, which has been the average over the past few years. Forecasts are for a low 2.5% net fleet growth in 2018.

Based on the current low booking of shipyard availability low fleet growth is expected to continue for the next few years. New IMO regulations for ballast water treatment systems and fuel regulations are expected to result in higher scrapping going forward. Turn to slide 26. Net fleet growth so far this year, is a low 1.7%. The number of actual vessels delivered in 2018 is running about 45% less than 2017.

The current dry bulk order book before non-deliveries is about 10% of the total fleet. And vessels over 20 years of age are about 7.2%. The supply and demand remain positive, supporting a healthy recovery. This completes my presentation. I would now like to turn the call over to Angeliki for the final comments.

Angeliki Frangou: Thank you, George. And this opens the call to questions.

Operator: [Operator Instructions] Your first question comes from the line of Randy Givens from Jefferies

Randy Givens: Hey, good morning, and a congratulation on a good quarter here. A few questions. 15 of your vessels have charter expirations in the back half of this year, what is your strategy for spot versus time charter to replace those in the quarters ahead?

Angeliki Frangou: That’s a good question, and something that we are looking at all the time.

To be honest, you have seen that we have already have fixed about four of our vessels until 2020. We have managed to do index to go way beyond 2019, and in the late part of 2020. That gives us, and we managed to do that with the ability to close to low sulphur, so and we have done that on index. Now on the way we are looking on the vessels that are coming up, in case you can have for Capesize a period charter in the low $20,000 in an area we are working carefully. And we will do a combination of you know 18 months – 24 months fixed, and a part of our fleet will also be index, because we are very, and we look that the market it still has quite significant strength.

Randy Givens: Okay. And then looking at the balance sheet, and kind of usage of cash, obviously with your low leverage, minimal debt in works, free cash going forward, and received the potential five container ship sales, I guess a $180 million, what is the expected use of cash in the coming quarters looking at possible purchases, increases of distribution, additional acquisitions, I know you just announced two here, so kind of going forward, what is your strategy?

Angeliki Frangou: You know, we care much about the leveraging. In that sense, with the potential sales of the vessels, we will be able to get chartered adjusted evaluations. As we don’t get any benefit in our [indiscernible] from the capital market. We take that cash up front and delever.

And as you can see, we have quite a significant cash generation. We are generating the kind of $70 million of cash so that with a modest level gives us the ability to grow. So, two levels. We have one of the lowest leverage ratios at 30.9% debt to capitalization. And grow carefully on a low level.

When we take away all the container ships, and looking only at dry bulk.

Randy Givens: Right. Let me rephrase that. Is there a certain net debt to capitalization that you are looking for, to get down to, before possibly distribution increases?

Angeliki Frangou: You know the distribution we already have established, and you will see the dividend we started last quarter. I think that other events that we will be looking at if we manage to do some period charters fixed, so that we create this cash flow, so we are in an early part of a recovery, and there is two things we are looking.

Period charter that we take care of our fleet, and also taking care of the maturity of the debt in 2020, so that that goes further out. With these two things, than we will look to return capital, either through distribution or buybacks.

Randy Givens: Okay. That’s fair. Now, last question from me.

What is your strategy for IMO 2020 compliance? Any thoughts on installing scrubbers on some of your Capesize vessels in the coming quarters?

Angeliki Frangou: This is one thing that, you know, we have seen. First of all, I would say that the current market is very strong, we are looking at spot rates of over $26,000. Stopping a vessel today, I think is a mistake, because you generate a very strong cash flow. And if you take the cost of fuel no matter what will increase in 2020 definitely we have accelerated cargo movements in 2019. So we look at presently keep our vessels trading, because it is a good environment, now if in 2020 we see that there is a material benefit to put scrubbers on bigger vessels, as you know the technology is improving, and you can always get scrubbers at usually declining prices.

In shipping, the longer you wait, the lower price you usually get. One thing I would like to mention and can be seen in our fixtures, we have presently done with one major charters, the four vessels we have fixed will be on charter in 2020, without effecting the index fixtures that we have. I think it’s an interesting event that shows that charterers are willing to fix longer, and it does not really affect the performance of the vessel.

Randy Givens: Sure, Alright. Thank you for the time.

Operator: [Operator Instructions] The next question comes from the line of Chris Wetherbee of Citi

Unidentified Analyst: Hi, this is [indiscernible] for Chris Wetherbee. Thank you for taking my question. I just want to ask a little bit about how trade tensions and discussions around tariffs have potentially led to any uncertainty as you engage in the discussion with your charterers for your dry bulk fleet and how those potential tariffs might impact Chinese seaborne iron ore import.

Angeliki Frangou: I think this is an interesting question, and we also look very carefully at what’s happening around the world, but the reality is in the physical market, and it has not really affected it. Capesizes is at a twelve months high market.

You have sentiment affected, we saw a little bit of volatility but overall physical market has not been affected. Sentiment around the capital market is more affected, and this is something we have to watch how it develops. What form it will take. Generally, commodities have changed some directions. Soyabeans will be imported from other areas.

Commodities that are needed, will be taken from different places. So it may become more inefficient trade. It may actually create a net benefit, because of the inefficiencies of trade. I mean, we have a recent example of, we seen that even grains from United States are being transported to Argentina. Over a million tons, so it will create different inefficiencies.

Unidentified Analyst: Got it. Thank you for the color there. I just want to follow up on that. There is kind of a thesis out there that the increase in commodity prices is due to customers placing higher orders, more of a typical seasonality for orders, ahead of the tariffs, is that likely, and how that may have impacted rates, and may impact rates going forward

Angeliki Frangou: I am not, I mean the realities of commodities. I think it is just inefficiencies in the market.

If you take this in a very macro level, the world [indiscernible] the level of tariffs. We are not there. The physical market is good, and it is more about the inefficiencies of the commodities around the world.

Unidentified Analyst: Thank you for taking my questions.

Operator: [Operator Instructions] Your next question comes from the line of Hillary Kakanando of Wells Fargo

Hillary Kakanando: Thanks for taking my questions.

You mentioned that taking care of the maturity of the 2020 debt as something you are looking into before perhaps increasing the distribution or buying back stocks. So, when will start to look at refinancing your debt, and also, eh what is the realistic time line? And also you mentioned that there were four drybulk vessels that were included in the collateral, could you discuss which one?

Angeliki Frangou: Let me go to the first question. From this quarter we can actually finance the term loan at part, so this is part of the strategy. So in the next three quarters, at the beginning of next year, this is going to be, we will take as much as possible of this out. Now, on the collateral Stratos will give you

Stratos Desypris: As part of the sales of the container vessels, we prepaid $20 million of our bank facility.

So we listed three of the vessels out of the debt facility. It was Navios Fantastiks, Navios Sagittarius and Navios Prosperity, and together with one unencumbered vessel that we have, which was Navios Appolon I they were all moved to the collateral package.

Hillary Kakanando: Okay. Great. Thank you, And then you also mentioned simplifying the corporate structure by NMM, you know purely focusing on dry bulk, and Navios Container focusing on containers, so down the road, do you perhaps see NMM being rolled up in to the parent company as well, to simplifying the structure even further?

Angeliki Frangou: I think this is very simple structure.

The company has now – eh focus on dry bulk, with a separate container strategy. We don’t have, I mean maybe there will be dropdowns, as it is in a regular business, there is no other [indiscernible]

Hillary Kakanando: Okay. Alright. Thank you.

Operator: [Operator Instructions] Your next question comes from the line of Espen Landmark of Fearnley

Espen Landmark: Yeah, Hi Angeliki and Stratos, Following up on the last question.

What kind of alternative would you consider you know for the NMM in terms of the listing, or taking part of the NMCI offering, or having some of the proceeds from the HMM vessels that are paid in in shares?

Angeliki Frangou: I mean Navios Container has an F1 public filing, I cannot comment on the whole process. There is a press release and there is an F1 and that is already public.

Espen Landmark: Okay, fair enough. And then you know the acquisition of the Kamsarmax and Cape from the parent, I guess relation wise, it looks fine, in line with last done levels, but I would still question why you decide to acquire vessels from the parent company instead of a third party. Can you explain the decision behind that? If you intend to acquire more of the NM vessels in the future?

Angeliki Frangou: It is just like a third party.

The vessels we acquired, the Capesize is an Imabari Eco type vessel, a top of the line, I can say it has a premium to any other vessels, and they are known performers, very good vessels, a premium to major charterers. And the Kamsarmax is actually a bigger than a Kamsarmax, it’s an 84,000 tonner, quite a significant better vessel than can be found. It is very much treasured by the grain houses. So, no vessels, top performing Imabari vessels, I will not consider as a better acquisition in the market, even those that can be done are not as good. And if you see the actual returns, you are talking about 15% yield on today’s rates.

So it’s a transaction.

Espen Landmark: Right, so you wouldn’t overrule acquiring more vessels from NM in the future?

Angeliki Frangou: When a dropdown can be done, if it is attractive, I will not exclude, but it is subject to economic rational and both of the Conflict Committees for approving the transaction.

Espen Landmark: Okay, and finally, I mean for ballast water treatment related costs for 46 vessels and 33 dry bulk, how much shall we factor in for 18 and 19 for capex?

Angeliki Frangou: As you know that we are for this year we have no vessels, our vessels are [indiscernible] until 2022, technological expenses are going down, as well as cost of installation are going down. Therefore, the installation of ballast water, is that to our benefit. We are working on the most appropriate one.

Espen Landmark: Okay, thank you very much.

Operator: [Operator Instructions] Your next question comes from the line of Amit Mehrotra of Deutsche Bank

Chris Snyder: Hey, good morning this is Chris Snyder in for Amit. So the first question is around potential cash flow from divesting from container ships fleet. So, first on the sales to Navios Container, you say that the sales are at the option of Navios Container, can you tell me about the potential timing of the sale, and the likelihood that NMCI will exercise these options?

Angeliki Frangou: I will refer you to the public disclosures. We have already given that, and the rest you can find in the public disclosures.

Chris Snyder: Okay. Are the sales contingent on the potential IPO going through, or could they go forward without that?

Angeliki Frangou: There is a lot of conditions, I would suggest you go through the public disclosures.

Chris Snyder: Okay. Fair enough. I guess this kind of thinking about the proceeds from the container ships in general –should we assume that any proceeds that you do receive, that you will continue to reinvest in younger dry bulk tonnage?

Angeliki Frangou: Yes, I mean, if you see what we have done over the last year and a half, we added thirteen vessels, sold two, and we have increased our deadweight capacity with larger vessels about over 50%, in pure only dry bulk, and decreasing the age of the fleet from the industry average, and this is something we will continue with in the remaining of the year, and next year.

Chris Snyder: Okay, I just want to follow up on the S&P market, it seems that its, there been a bit up in the prices for modern tonnage over the last couple of months, and given you guys, with the additional fire power, with the improving cash flows, debt maturities not until 2020, any potential proceeds from the container ship fleet, can you maybe talk about the depth and availability of modern tonnage in the S&P market?

Angeliki Frangou: There is availability. It depend on what is your target. We targeted larger vessels. And also what we target is vessels that are good performers with a concentration on Capesize and post Panamax.

Chris Snyder: Okay.

That does it for me. Thank you for the time, guys.

Operator: There are no questions at this time. I will turn the call back to Ms. Frangou for any additional or closing remarks.

Angeliki Frangou: Thank you. This completes our Q2 results.

Operator: Thank you for participating in today's conference call. You may now disconnect your lines at this time.