SOURCE: Navios Maritime Partners L.P.

Navios Maritime Partners L.P.

October 27, 2014 07:46 ET

Navios Maritime Partners L.P. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2014

MONACO--(Marketwired - Oct 27, 2014) -  Navios Maritime Partners L.P. ("Navios Partners") (NYSE: NMM)

  • Net Income: $13.0 million in Q3; $61.4 million for the nine months
  • EBITDA: $37.5 million in Q3; $160.7 million for the nine months
  • Operating Surplus: $25.0 million in Q3; $123.8 million for the nine months
  • Delivery of 8,200 TEU container vessel
    • Chartered out for over four years at $34,266, net per day
  • Dividend of $0.4425 per common unit

Navios Maritime Partners L.P. ("Navios Partners") (NYSE: NMM), an international owner and operator of drybulk and container vessels, today reported its financial results for the third quarter and nine months ended September 30, 2014.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated, "I am pleased with the results for the third quarter -- we recorded net income of $13.0 million and EBITDA of $37.5 million. We also recently announced our quarterly distribution of $0.44 and a quarter cent, representing an annual distribution of $1.77 per unit and a current yield of about 10.5%.

Ms. Frangou continued, "We used the prolonged market weakness to strengthen our company. We improved our balance sheet, worked with our sponsor to increase operating efficiency, grew our dry bulk fleet and entered the container industry, where we acquired container vessels with an average charter length of about eight years generating approximately $60.0 million of annual EBITDA. As a result, we are positioned to prosper in the current market and will enjoy the advantages of a more robust market."

RECENT DEVELOPMENTS

Cash distribution
The Board of Directors of Navios Partners declared a cash distribution for the third quarter of 2014 of $0.4425 per unit. The cash distribution is payable on November 10, 2014 to unitholders of record on November 7, 2014. 

Delivery of two container vessels
On August 29, 2014, Navios Partners acquired from an unrelated third party the YM Utmost, a 2006 South Korean-built Container vessel of 8,204 TEU, for a cash acquisition cost of $59.0 million. The vessel is chartered out for a minimum four years, at $34,266 net per day.

The YM Unity, a 2006 South Korean-built Container vessel of 8,204 TEU is expected to be delivered by October 31, 2014. The vessel will be chartered out for a minimum four years, at $34,266 net per day.

Credit facilities
On September 22, 2014, Navios Partners entered into a new credit facility of up to $56.0 million with ABN AMRO Bank N.V to finance a portion of the purchase price payable in connection with the acquisition of the two container vessels. The facility bears interest at LIBOR plus 300 bps per annum and has an amortization profile of 10.2 years.

Long-Term and Insured Cash Flow
Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of 3.1 years, providing a stable base of revenue and distributable cash flow. Navios Partners has currently contracted out 99.2% of its available days for 2014, 61.3% for 2015 and 42.0% for 2016, expecting to generate revenues of approximately $227.1 million, $186.8 million and $148.2 million, respectively. The average expected daily charter-out rate for the fleet is $20,604, $26,097 and $30,125 for 2014, 2015 and 2016, respectively. The average daily charter-in rate for the charter-in vessels is $13,619 for 2014.

Following the termination of the credit default insurance through its third party insurer, Navios Partners continues to have insurance on certain long-term charter-out contracts of drybulk vessels for credit default occurring until the end of 2016, through an agreement with Navios Maritime Holdings Inc. up to a maximum cash payment of $20.0 million.

FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Partners has compiled consolidated statements of income for the three and nine month periods ended September 30, 2014 and 2013. The quarterly 2014 and 2013 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 Partners' results.

                         
    Three Month     Three Month     Nine Month     Nine Month  
    Period ended September 30,     Period ended September 30,     Period ended September 30,     Period ended September 30,  
(in $'000 except per   2014     2013     2014     2013  
unit data)   (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Revenue   $ 55,290     $ 46,578     $ 167,966     $ 146,013  
Net income   $ 13,042     $ 13,123     $ 61,388 (1)(2)   $ 48,880 (3)(4)
EBITDA   $ 37,472     $ 35,642     $ 160,675 (1)   $ 117,742 (3)
Earnings per Common unit (basic and diluted)   $ 0.16     $ 0.19     $ 0.77 (1)(2)   $ 0.72 (3)(4)
Operating Surplus   $ 25,003     $ 28,187     $ 123,770     $ 99,410  
Maintenance and Replacement Capital expenditure reserve   $ (5,978 )   $ (3,516 )   $ (17,794 )   $ (10,450 )
                                 
(1) Positively affected by the accounting effect of the $47.6 million insurance settlement.
(2) Negatively affected by the $22.0 million non-cash write-off of intangible asset relating to the Navios Pollux.
(3) Positively affected by the $13.3 million hire payment received in advance in relation to the Navios Melodia.
(4) Negatively affected by the non-cash write-off of $3.2 million for the nine month period ended September 30, 2013, relating to a favorable contract. Also includes the write-off of deferred finance fees of $2.4 million for the nine month period ended September 30, 2013.
 

Three month periods ended September 30, 2014 and 2013
Time charter and voyage revenues for the three month period ended September 30, 2014 increased by $8.7 million or 18.7% to $55.3 million, as compared to $46.6 million for the same period in 2013. The increase was mainly attributable to the acquisition of the Navios Joy on September 11, 2013, the Navios Harmony on October 11, 2013, the five container vessels in December 2013, the Navios La Paix and the Navios Sun in January 2014 and the YM Utmost in August 2014. As a result of the vessel acquisitions, available days of the fleet increased to 2,709 days for the three month period ended September 30, 2014, as compared to 1,952 days for the three month period ended September 30, 2013. The above increase in time charter and voyage revenues was partially mitigated by the decrease in time charter equivalent ("TCE") to $20,009 for the three month period ended September 30, 2014, from $23,202 for the three month period ended September 30, 2013.

EBITDA increased by $1.8 million to $37.5 million for the three month period ended September 30, 2014, as compared to $35.6 million for the same period in 2013. The increase in EBITDA was due to an $8.7 million increase in revenue, a $0.2 million decrease in time charter and voyage expenses and a $0.3 million decrease in other expense. The above increase was partially mitigated by a $3.8 million increase in management fees due to the increased number of vessels, a $0.4 million increase in general and administrative expenses and a $3.1 million decrease in other income.

The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended September 30, 2014 and 2013 was $6.0 million and $3.5 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated an Operating Surplus for the three month period ended September 30, 2014 of $25.0 million, as compared to $28.2 million for the three month period ended September 30, 2013. 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 months ended September 30, 2014 amounted to $13.0 million compared to $13.1 million for the three months ended September 30, 2013. The decrease in net income by $0.1 million was due to a $2.7 million increase in interest expense and finance cost and a $0.2 million increase in direct vessel expenses partially offset by a $1.8 million increase in EBITDA, a $0.9 million decrease in depreciation and amortization expense and a $0.1 million increase in interest income.

Nine month periods ended September 30, 2014 and 2013

Time charter and voyage revenues for the nine month period ended September 30, 2014 increased by $22.0 million or 15.0% to $168.0 million, as compared to $146.0 million for the same period in 2013. The increase was mainly attributable to the acquisition of the Navios Joy on September 11, 2013, the Navios Harmony on October 11, 2013, the five container vessels in December 2013, the Navios La Paix and the Navios Sun in January 2014 and the YM Utmost in August 2014. As a result of the vessel acquisitions, available days of the fleet increased to 8,072 days for the nine month period ended September 30, 2014, as compared to 5,736 days for the nine month period ended September 30, 2013. The above increase in time charter and voyage revenues was partially mitigated by the decrease in TCE to $20,277 for the nine month period ended September 30, 2014, from $24,903 for the nine month period ended September 30, 2013.

EBITDA increased by $42.9 million to $160.7 million for the nine month period ended September 30, 2014, as compared to $117.7 million for the same period in 2013. The increase in EBITDA was due to a $22.0 million increase in revenue and a $34.6 million increase in other income. The above increase was partially mitigated by an $11.0 million increase in management fees due to the increased number of vessels, a $1.1 million increase in time charter and voyage expenses, a $1.3 million increase in general and administrative expenses and a $0.2 million increase in other expense.

The reserve for estimated maintenance and replacement capital expenditures for the nine month periods ended September 30, 2014 and 2013 was $17.8 million and $10.4 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated an Operating Surplus for the nine month period ended September 30, 2014 of $123.8 million, as compared to $99.4 million for the nine month period ended September 30, 2013. 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 nine months ended September 30, 2014 amounted to $61.4 million compared to $48.9 million for the nine months ended September 30, 2013. The increase in net income by $12.5 million was due to a $42.9 million increase in EBITDA and a $0.2 million increase in interest income, partially offset by a $10.5 million increase in interest expense and finance cost, a $19.7 million increase in depreciation and amortization expense and a $0.4 million increase in direct vessels expenses.

Fleet Employment Profile

The following table reflects certain key indicators of Navios Partners' core fleet performance for the three and nine month periods ended September 30, 2014 and 2013.

                   
    Three Month
 Period ended
September 30,
 2014
 (unaudited)
  Three Month
 Period ended
September 30,
2013
 (unaudited)
  Nine Month
 Period ended
September 30,
2014
 (unaudited)
  Nine Month
 Period ended
September 30,
2013
 (unaudited)
 
Available Days(1)     2,709     1,952     8,072     5,736  
Operating Days(2)     2,702     1,950     8,061     5,729  
Fleet Utilization(3)     99.8 %   99.9 %   99.9 %   99.9 %
Time Charter Equivalent (per day)(4)   $ 20,009   $ 23,202   $ 20,277   $ 24,903  
Vessels operating at period end     31     22     31     22  
                           
(1)   Available days for the fleet represent total calendar days the vessels were in Navios Partners' 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 Partners' 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)   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 Partners' management will host a conference call today, Monday, October 27, 2014 to discuss the results for the third quarter ended September 30, 2014.

Conference Call details:

Call Date/Time: Monday, October 27, 2014 at 08:30 am ET
Call Title: Navios Partners Q3 2014 Financial Results Conference Call
US Dial In: +1.866.394.0817
International Dial In: +1.706.679.9759
Conference ID: 2327 7538

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: 2327 7538

Slides and audio webcast:
There will also be a live webcast of the conference call, through the Navios Partners website (www.navios-mlp.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 Partners' website under the "Investors" section by 8:00 am ET on the day of the call.

About Navios Maritime Partners L.P.

Navios Partners (NYSE: NMM) is a publicly traded master limited partnership which owns and operates dry cargo vessels. For more information, please visit our website at www.navios-mlp.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 Navios Partners' 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. Although the Navios Partners 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 Partners. 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 changes in the demand for dry bulk vessels, competitive factors in the market in which Navios Partners operates; risks associated with operations outside the United States; and other factors listed from time to time in the Navios Partners' filings with the Securities and Exchange Commission. Navios Partners 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 Partners' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

 
EXHIBIT 1
 
 
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEET
(Expressed in thousands of U.S. Dollars except unit data)
         
    September 30,
 2014
 (Unaudited)
  December 31,
 2013
ASSETS            
Current assets            
Cash and cash equivalents   $ 140,214   $ 35,346
Restricted cash     1,175     1,177
Accounts receivable, net     8,325     16,298
Prepaid expenses and other current assets     332     1,663
Total current assets     150,046     54,484
             
             
Vessels, net     1,093,494     1,026,153
Deposits for vessels acquisitions     5,905     7,271
Deferred financing costs, net     7,831     8,463
Deferred dry dock and special survey costs, net and other long term assets     6,123     94
Investment in affiliates     505     500
Loans receivable from affiliates     618     280
Intangible assets     78,710     119,405
Restricted cash     --     33,429
Total non-current assets     1,193,186     1,195,595
             
Total assets   $ 1,343,232   $ 1,250,079
             
             
LIABILITIES AND PARTNERS' CAPITAL            
Current liabilities            
Accounts payable   $ 2,537   $ 3,171
Accrued expenses     2,941     3,876
Deferred voyage revenue     3,207     2,997
Current portion of long-term debt     12,926     5,358
Amounts due to related parties     6,136     204
Total current liabilities     27,747     15,606
             
             
Long-term debt, net of current portion and discount     544,379     527,966
Total non-current liabilities     544,379     527,966
             
             
Total liabilities     572,126     543,572
             
             
Commitments and contingencies     --     --
Partners' capital:            
Common Unitholders (77,359,163 and 71,034,163 units issued and outstanding at September 30, 2014 and December 31, 2013, respectively)     765,643     702,478
General Partner (1,578,763 and 1,449,681 units issued and outstanding at September 30, 2014 and December 31, 2013, respectively)     5,463     4,029
Total partners' capital     771,106     706,507
             
             
Total liabilities and partners' capital   $ 1,343,232   $ 1,250,079
             
             
 
NAVIOS MARITIME PARTNERS L.P.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Expressed in thousands of U.S. Dollars except unit and per unit amounts)
                   
    Three Month
 Period ended
September 30,
 2014
 (unaudited)
  Three Month
 Period ended
September 30,
 2013
 (unaudited)
  Nine Month
 Period ended
September 30,
2014
 (unaudited)
  Nine Month
 Period ended
September 30,
2013
 (unaudited)
 
Time charter and voyage revenues   $ 55,290   $ 46,578   $ 167,966   $ 146,013  
Time charter and voyage expenses     (3,607 )   (3,787 )   (11,690 )   (10,557 )
Direct vessel expenses     (227 )   --     (373 )   --  
Management fees     (12,611 )   (8,788 )   (36,855 )   (25,865 )
General and administrative expenses     (1,778 )   (1,395 )   (5,751 )   (4,452 )
Depreciation and amortization     (17,267 )   (18,206 )   (77,954 )   (58,232 )
Interest expense and finance cost, net     (7,046 )   (4,320 )   (21,160 )   (10,652 )
Interest income     110     7     200     22  
Other income     178     3,319     48,090     13,446  
Other expense     --     (285 )   (1,085 )   (843 )
Net income   $ 13,042   $ 13,123   $ 61,388   $ 48,880  
                           
                           

Earnings per unit:

                 
    Three Month
 Period ended
September 30, 2014
 (unaudited)
  Three Month
 Period ended
September 30, 2013
 (unaudited)
  Nine Month
 Period ended
September 30,
 2014
 (unaudited)
  Nine Month
 Period ended
September 30,
 2013
 (unaudited)
Net income   $ 13,042   $ 13,123   $ 61,388   $ 48,880
Earnings per unit:                        
Common unit (basic and diluted)   $ 0.16   $ 0.19   $ 0.77   $ 0.72
                         
                         
 
NAVIOS MARITIME PARTNERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
             
    Nine Month
 Period Ended
September 30,
 2014
 (unaudited)
    Nine Month
 Period Ended
September 30,
 2013
 (unaudited)
 
OPERATING ACTIVITIES                
Net income   $ 61,388     $ 48,880  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     77,954       58,232  
Amortization and write-off of deferred financing cost     2,270       3,349  
Amortization of deferred dry dock and special survey costs     373       --  
Changes in operating assets and liabilities:                
Net decrease/(increase) in restricted cash     2       (2 )
Decrease/(increase) in accounts receivable     7,973       (7,755 )
Decrease in prepaid expenses and other current assets     1,331       334  
Decrease in other long term assets     1       98  
Payments for dry dock and special survey costs     (6,406 )     --  
(Decrease)/increase in accounts payable     (634 )     2,836  
Decrease in accrued expenses     (935 )     (477 )
Increase/(decrease) in deferred voyage revenue     210       (7,383 )
Increase/(decrease) in amounts due to related parties     5,027       (6,206 )
Net cash provided by operating activities     148,554       91,906  
                 
INVESTING ACTIVITIES:                
Acquisition of vessels     (96,425 )     (47,455 )
Deposits for acquisition of vessels     (5,905 )     (8,954 )
Loans receivable from affiliates     (338 )     --  
Increase in restricted cash     --       (51,178 )
Release of restricted cash for vessel acquisitions     33,429       --  
Net cash used in investing activities     (69,239 )     (107,587 )
                 
FINANCING ACTIVITIES:                
Cash distributions paid     (103,521 )     (89,808 )
Proceeds from issuance of general partner units     2,233       3,167  
Proceeds from issuance of common units, net of offering costs     104,499       148,037  
Proceeds from long term debt, net of discount     28,000       245,000  
Net decrease in restricted cash     --       28,514  
Repayment of long-term debt and payment of principal     (4,780 )     (200,314 )
Debt issuance costs     (878 )     (5,223 )
Net cash provided by financing activities     25,553       129,373  
Increase in cash and cash equivalents     104,868       113,692  
Cash and cash equivalents, beginning of period     35,346       32,132  
Cash and cash equivalents, end of period   $ 140,214     $ 145,824  
                 
 
EXHIBIT 2
 
             
Owned Vessels   Type   Built   Capacity 
(DWT)
Navios Apollon   Ultra-Handymax   2000   52,073
Navios Soleil   Ultra-Handymax   2009   57,337
Navios La Paix   Ultra-Handymax   2014   61,485
Navios Gemini S   Panamax   1994   68,636
Navios Libra II   Panamax   1995   70,136
Navios Felicity   Panamax   1997   73,867
Navios Galaxy I   Panamax   2001   74,195
Navios Hyperion   Panamax   2004   75,707
Navios Alegria   Panamax   2004   76,466
Navios Orbiter   Panamax   2004   76,602
Navios Helios   Panamax   2005   77,075
Navios Hope   Panamax   2005   75,397
Navios Sun   Panamax   2005   76,619
Navios Sagittarius   Panamax   2006   75,756
Navios Harmony   Panamax   2006   82,790
Navios Fantastiks   Capesize   2005   180,265
Navios Aurora II   Capesize   2009   169,031
Navios Pollux   Capesize   2009   180,727
Navios Fulvia   Capesize   2010   179,263
Navios Melodia   Capesize   2010   179,132
Navios Luz   Capesize   2010   179,144
Navios Buena Ventura   Capesize   2010   179,259
Navios Joy   Capesize   2013   181,389
Chartered-in Vessels            
Navios Prosperity   Panamax   2007   82,535
Navios Aldebaran   Panamax   2008   76,500
             
             
             
Container Vessels   Type   Built   Capacity
TEU
Hyundai Hongkong   Container   2006   6,800
Hyundai Singapore   Container   2006   6,800
Hyundai Tokyo   Container   2006   6,800
Hyundai Shanghai   Container   2006   6,800
Hyundai Busan   Container   2006   6,800
YM Utmost   Container   2006   8,204
             
             
             
Container Vessels to be Delivered   Type   Built   Capacity
TEU
YM Unity   Container   2006   8,204
             
             
 
EXHIBIT 3
 

Disclosure of Non-GAAP Financial Measures

1. EBITDA

EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes.

EBITDA is presented because Navios Partners believes that EBITDA is a basis upon which liquidity can be assessed and present useful information to investors regarding Navios Partners' ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. EBITDA is a "non-GAAP financial measure" 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.

While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used 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 Partners' 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 Partners' business (including reserve for maintenance and replacement capital expenditures);

    • comply with applicable law, any of Navios Partners' 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
September 30,
 2014
 ($ '000)
 (unaudited)
  Three Month
 Period ended
September 30,
2013
 ($ '000)
 (unaudited)
  Nine Month
 Period ended
September 30,
2014
 ($ '000)
 (unaudited)
  Nine Month
 Period ended
September 30,
2013
 ($ '000)
 (unaudited)
Net cash provided by operating activities   $32,157   $40,760   $148,554   $91,906
Net decrease /(increase) in operating assets   916   (7,337)   (2,901)   7,325
Net (decrease) / increase in operating liabilities   (1,772)   (1,533)   (3,668)   11,230
Net interest cost   6,936   4,313   20,960   10,630
Amortization and write-off of deferred financing costs   (765)   (561)   (2,270)   (3,349)
EBITDA(1)   $37,472   $35,642   $160,675   $117,742
Cash interest income   77   9   140   25
Cash interest paid   (6,568)   (3,948)   (19,251)   (7,907)
Maintenance and replacement capital expenditures   (5,978)   (3,516)   (17,794)   (10,450)
Operating Surplus   $25,003   $28,187   $123,770   $99,410
Cash distribution paid relating to the first half   --   --   (70,948)   (59,872)
Cash reserves   10,471   4,386   (17,348)   (6,965)
Available cash for distribution   $35,474   $32,573   $35,474   $32,573
                 
                 

(1)

                         
    Three Month
 Period ended
September 30,
 2014
 ($ '000)
 (unaudited)
    Three Month
 Period ended
September 30,
 2013
 ($ '000)
 (unaudited)
    Nine Month
 Period ended
September 30,
2014
 ($ '000)
 (unaudited)
    Nine Month
 Period ended
September 30,
2013
 ($ '000)
 (unaudited)
 
Net cash provided by operating activities   $ 32,157     $ 40,760     $ 148,554     $ 91,906  
Net cash used in investing activities   $ (65,511 )   $ (6,047 )   $ (69,239 )   $ (107,587 )
Net cash (used in)/provided by financing activities   $ (9,948 )   $ 48,762     $ 25,553     $ 129,373  
                                 
                                 

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