Thank you for joining us for Navios Maritime Partners First Quarter 2016 Earnings Conference Call. With us today from the Company are Chairman and CEO, Ms. Angeliki Frangou; Chief Financial Officer, Mr. Efstratios Desypris; and Executive Vice President of Business Development, Mr. George Achniotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the Investor section of Navios Maritime 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 will also be found there. Now, I'll read 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 fact. 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 materially from the 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 in this conference call should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Frangou will offer opening remarks; next Mr. Desypris will give his overview of Navios Partners' financial results; then Mr. Achniotis will provide an operational update and an industry overview; lastly, we'll open the call to take questions. Now, I'll turn the call over to Navios Partners Chairman and CEO, Ms. Angeliki Frangou. Angeliki?

Thank you, Laura, and good morning to all of you joining us on today's call. For the first quarter of 2016, we earned $28.1 million of EBITDA and positive net income. While the MLP space experienced significant volatility during the first quarter of 2016, it appears to have brought on improved investor sentiment. Recessionary fears appear to have eased while commodity prices have fallen often substantially. Slide 4 provides a 30-year view of the BDI. We have experienced the most difficult market that has ever existed in shipping highlighted by the low in the first quarter of 290 points on the BDI. This BDI was 43% lower than the all-time low established only a year ago. While the extended period of weakness in the drybulk industry is unprecedented, the BDI has recovered by 105% and is currently at 594 points subjecting that the nuclear [indiscernible]. This rate is coming into balance. Scrapping forecast reached 54.6 million deadweight tons or 7% of the drybulk fleet easily surpassing the prior record of 6.4% set in 1986. Moreover, there were new orders for only 18 million deadweight tons in 2015 and 12.3 million deadweight tons in 2016 here today. Cancelations or slippage on new building deliveries averaged around 40% over the past four years and this year it is almost 55%. As an example this particular combination of scrapping and slippage in new building orders, industry sources anticipate flat to negative net fleet growth in the drybulk industry in 2016 and 2017. Slide 5 outlines additional developments. Since the beginning of 2016 we delevered our balance sheet to strengthen the Term Loan B metrics by approximately $73.5 million. That included $25 million cash payments and approximately $48.5 million contribution to the collateral by transferring the Yang Ming Unity, a 2006 built 8,204 TEU…

Thank you, Angeliki, and good morning all. I will briefly review Navios' financial results for the quarter ended March 31, 2016. The financial information is included in the press release and summarized in the slide presentation on the Company's website. Moving to the financial results as shown on slide 9. Revenue for Q1 2016 decreased by 19.6% to $45.6 million compared to $56.8 million for Q1 of 2015. As Angeliki discussed earlier, in Q1 of 2016 the drybulk industry experienced the lowest level in history bottoming at 45% below the previous 30-year low. Time charter rates during the quarter reflected the depressed market as it decreased by 22% to $15,524 per day compared to $19,854 per day for Q1 2015. EBITDA for the quarter decreased by 26% to $28.1 million primarily because of the decrease in revenues discussed as well as $1.3 million increase in management fees mainly due to our larger own fleet. This was mitigated by the decrease in time charter and voyage expenses by $1.6 million due to the delivery of the two charter vessels last year. Net income for the quarter amounted $0.2 million. Operating surplus for the quarter amounted $18.3 million. And the replacement and maintenance CapEx reserve was $3 million. Fleet utilization for the quarter was almost 100%. Turning to slide 10, I will briefly discuss some key balance sheet data as of March 31, 2016. Cash and cash equivalents was $35.8 million. We do not have any immediate maturities or committed growth CapEx. Long-term debt including the current portion decreased by $20.9 million. Net debt to book capitalization decreased to 41.3% at the end of the quarter. As Angeliki mentioned earlier, in 2016 we delevered our balance sheet and strengthened the Term Loan B metrics by approx. $73.5 million, of which $25 million…

Thank you, Efstratios. Please turn to slide 16 and the drybulk market fundamentals. Growth in world GDP generally coincides with growing raw material demand for steel and energy production, particularly as emerging markets urbanize and industrialize. According to the IMF, the rate of world GDP growth declined from 3.4% in 2014 to 3.1% in 2015. GDP growth is expected to increase to 3.2% in 2016 and 3.5% in 2017. Emerging and developing markets are expected to grow by 4.1% in 2016 and 4.6% in 2017. Between 2014 and 2015, drybulk trade remained flat with 2016 forecast to show a small increase in trade of about 1% to 2%. Turning to slide 17, Chinese iron ore imports have increased by 12% CAGR between 2007 and 2015. Low cost Australian and Brazilian iron ore continues to displace more expensive lower quality domestic Chinese ore. In 2015 Chinese domestic iron ore production declined by over 8%. Steel production was slightly negative, but seaborne iron ore imports increased by 3%. The year-to-date imports into China are up about 7% while domestic iron ore production continues to decline by about 7%. Steel production in China dipped in January and February, but rebounded in March as demand picked up for the peak domestic construction season. Steel exports from China continued at the high level seen in 2015 and they are up about 8% year-to-date. Please turn to slide 18. Additional efficient coal-fired power stations continue to be built in emerging markets as coal is needed for baseload power generation in many developing countries. Environmental concerns, structurally cheap natural gas and domestic coal mining industries have created headwinds for the demand for additional seaborne thermal coal. As a result, global coal imports are forecast to slow by 1% in 2016. Chinese imports reduced in 2015 and continued…

Thank you, George. This completes our formal presentation and we'll open the call to questions.

[Operator Instructions] Your first question comes from the line of Michael Webber of Wells Fargo.

Hey, good morning. How are you?

Good morning.

Just a couple of questions quickly around the Term Loan B and some of the credits that you went through and then a couple of questions on charters. But first around the collateral that's been added to the Term Loan B. Just in general maybe within just broader compliance, how much wiggle room do you guys have right now within the updated covenant around the term loan and how often is that math revisited from a compliance perspective?

Every quarter we test it as it is required. We added $73.5 million on collateral and cash prepayments and that brings the total in compliance maintenance as it is required. You have to also realize that Q1 was beyond even the 30-year low. So I think from that point on, we believe that values will be expanding the same way as earnings have doubled. I'm not saying that you see that that was the low point of the cycle.

So, there's no grades associated with it. So let's say if it's tight enough, I guess would there be another cash payment next quarter and/or more collateral push if any to bump it up? If I can get a sense of whether this is going to be something you have to revisit in the next couple quarters as well?

I think asset values are going to be expanding. I think the low part of the cycle was Q1 and basically February which followed also the earnings. I think from that point on, you can see also from transactions there is a strong recovery in values.

Okay. Just around the Hanjin and the HMM charters, there's a 30% figure that's tossed around in the media. And without getting into too much detail around it, I'm just curious when you guys are looking at kind of internal budgeting or when you kind of lay out the credit metrics you laid out a figure 7%. What are you guys looking at in terms of are you guys going to model in kind of ongoing cash flows from those assets when you guys model out your compliance on a long-term basis?

Listen, we have particularly put on page 5 the contracted revenue. On HMM is $55 million contracted annual revenue, at 10% is about $5.5 million circa, and on Hanjin is about $2 million. So, that gives you an indication of the margins. You're going to be talking an annualized basis of about $7 million on a 10% plus rate. But one thing I'd like to say is that in essence Korean Development Bank and Korean state has taken a decision to take through a period of court restructuring in both companies. HMM is ahead and Hanjin is following after that. You always have to realize whatever you read in the press is what is asked is obviously some additional views and there's also ways that may receive [indiscernible]. The actual cash asset we believe that is not going to be material. The other reason that I'd like to remind you is that the Company has on an annualized basis with all our contracted revenue for nine months we have about $74 million. On a full year you should think that is about $100 million free cash generation.

Okay. And you're right we see the [indiscernible] on associated debt in terms of what that haircut could look like. Maybe if we try to model this in today forms some kind of some sort of expectation around it. We've seen scenarios in the past where we've seen tribal projects get renegotiated, there are a couple that stick out my mind. I think there were some COSCO assets a few years ago and then there's some smaller traders that have had to renegotiate. Is there anything different around this process relative to those in terms of using that kind of outcome as a comp for what you guys are negotiating here with HMM and Hanjin? Anything else that you need to…

You touch a very interesting point and what I think is really worth noticing. There are pure drybulk companies that we have seen them going actually to Chapter 11 in this kind of situations and there is the kind of COSCO which has a container arm within HMM and Hanjin, which makes a difference. You have seen that container companies have usually done volunteered court restructurings. We've seen it with ZIM, we have seen it in part with Friends entities, we have seen it along the way. On a purely drybulk company, the most usual thing is to go to a court restructuring, which is totally different than out of court which means is a voluntary.

Just one more and this is more housekeeping. I noticed on slide 14 that you have the fixed pricing for the management agreement through December 31 of 2017. Is that a new agreement or is that the old agreement? I think it was [indiscernible] the dollars that switched to kind of a passthrough?

We extended the renewed fixed two-year period at the 3% increase and now it is actually fixed for the next two years. One of the things we clarified on page 6, you can see that on the fixed and I think that is something that we like to have it very transparent. The fixed fee, which is a lot of times compared to OpEx, includes also commercial management. And we have no additional technical management fees or commercial charges because we fix the vessel the usual 1%, 1.25% or any other fee. And then on the administrative services you can do a lot of G&A and in that aspect again, the G&A is one of the lowest in the public shipping companies. There is no sales and purchase fee, there is no loan financing transaction, or any fee whatsoever enhancing the value. So, we wanted to become very transparent so that people do understand that what sometimes they thought as OpEx in the case of Navios includes everything.

There's a lot of color on page 6, but just to be clear. The fixed through December 2017, was that date in place as of Q4 or was that extended this quarter?

This got extended in January.

Okay, perfect. All right. Thank you very much for the time, guys. I appreciate it.

Thank you.

Your next question comes from the line of Noah Parquette of JPMorgan.

Thanks. I just had a follow-up question on the Term Loan B and what you did there. Like you mentioned, I think we're all comfortable that asset values seem to have sort of bottomed, but you value the charters in terms of the collateral. Is what you did this quarter in anticipation of any sort of restructuring on the charters that you're discussing or would that be kind of an additional event that we're doing?

This is purely LTV maintenance and everything is charter free. So, in essence the Term Loan B lenders get the benefit of the charters. In essence everything is charter free. The entire balance sheet of the Company and all our loan-to-value compliance in all our loans is without the charters. There is over $0.5 million on charter arrangements that exist on the different [indiscernible]. That is not part of the LTV, that is on top.

Okay. That's all I have. Thanks.

Your next question comes from the line of Chris Wetherbee of Citi.

Good morning. This is Prashant in for Chris.

Good morning.

Good morning. My first question just following up on Michael's question about the HMM and Hanjin. In the restructuring process I understand that it's still in process right now, but just sort of seeing what's been restructured so far maybe with other companies, how should we be thinking about the duration being contracted versus the cash upfront component? Is there any sort of color we can think of in terms of structuring, in terms of modeling out cash flows or is it too early to tell?

I think it's too early. At the worst case scenario what you hear in the Bloomberg and et cetera is at 30%. That will have a 10% effect is $7 million. But I think this is too premature to actually model something.

Okay. And then turning to the drybulk side, rates have come up as you noted from 1Q and the scrapping level is sustaining. So, I guess sort of a two-part question. One, as you look to fix the remaining days for the year, are you seeing rates that are climbing above the 6,000 maybe towards 7,000 mark on the Capes and the Panamaxes? And then two, last year we saw high scrapping levels and then they went away in the summer time. What gives you confidence that you will have greater sort of sustained elevated scrapping level this year?

Actually 600 or slightly below 600 is a very low level on the BDI. We are looking at rates that cover the OpEx, but they hardly cover financing costs and et cetera so this is not sustainable long-term level. We have seen that we have negative fleet growth on Capes from the full 2015 accumulative till this year. And in Panamaxes we are going to be turning negative not only for the year, but cumulative for the two years on Panamaxes this quarter. So with this in the background and knowing that we are not going be in a huge recessionary situation where the world has stabilized in a low level, we see that there is going to be this level or better. So, we don't see a deterioration from here.

Okay. Thanks very much. I'll turn it over.

Your next question comes from the line of Amit Mehrotra of Deutsche Bank.

Thank you very much. Good afternoon everybody. Sorry I hopped on very late as I was on another earnings call, but couple of quick questions. On the $75 million of operating cash flow that you guys expect to generate this year, you mentioned acquiring assets. I apologize if this is asked already, but just any more color on. Did you have actually deals in the pipeline, timing because that's obviously a significant amount of cash, but given the weakness in the industry I wasn't really sure how that's going to be deployed from a timing standpoint?

Actually we are watching the market, I think we wanted to see stabilization and we will be viewing the market in the second half how it develops.

And then one other one on the containership assets vis-a-vis HMM. Have you spoken to the other owners to maybe have somewhat of a consolidated front in negotiations? I realize rates are different by owners, but not sure if you had any discussions there. And then also can you update us on your exposure to Yang Ming which I think has a slightly better balance sheet than the other two, but obviously still has some potential concerns given what's going on over there, if you could just update us there? Thanks.

Yang Ming is an investment that is owned by the Japanese government and in essence there is no question, there is not even any consideration that the Company has any problem. We have not heard, we have not seen, there is not any consideration. It is owned by the Japanese government. And as for the Hyundai and Hanjin, I think we gave a lot of color and the rest is really we are part of a negotiating process that you have to wait to see the outcome. We feel comfortable on the situation.

Okay. Alright, that's all I had. Thanks very much, guys.

Thank you.

Ladies and gentlemen, we have reached the allotted time for questions and answers. I'll now return the call to Ms. Angeliki Frangou for any additional or closing remarks.

Thank you. This completes our first quarter results.