NAVIOS MARITIME HOLDINGS INC.
UNAUDITED CONDENSED NOTES TO THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of U.S. dollars except share data)
As of June 30, 2020 and December 31, 2019, the carrying amount of the investment in
Navios Partners was $31,520 and $35,116, respectively.
Total equity method (loss)/income and amortization of deferred gain of $(1,127)
and $902 were recognized in Equity in net earnings/(losses) of affiliated companies for the three month periods ended June 30, 2020 and 2019, respectively, and total equity method (loss)/income and amortization of deferred gain of
$(2,354) and $3,153 were recognized in Equity in net earnings/(losses) of affiliated companies for the six month periods ended June 30, 2020 and 2019, respectively.
Dividends received during each of the three month periods ended June 30, 2020 and 2019 were $621 and $690 and for each of the six month
periods ended June 30, 2020 and 2019, were $1,242 and $1,380, respectively.
As of June 30, 2020, the market value of the
investment in Navios Partners was $20,102.
Navios Acquisition
In February 2018, the Board of Directors of Navios Acquisition authorized a stock repurchase program for up to $25,000 of Navios
Acquisitions common stock, for two years. Stock repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. Up to the expiration of the stock repurchase
program in February 2020, Navios Acquisition had repurchased 735,251 shares since the program was initiated.
As of June 30, 2020 and
December 31, 2019, the unamortized difference between the carrying amount of the investment in Navios Acquisition and the amount of the Companys underlying equity in net assets of Navios Acquisition was $73,605 and $79,477, respectively
and is amortized through Equity in net earnings/(losses) of affiliated companies over the remaining life of Navios Acquisition tangible and intangible assets.
As of June 30, 2020 and December 31, 2019, the carrying amount of the investment in Navios Acquisition was $29,182 and $19,894,
respectively.
During the three month period ended June 30, 2019, the Company recognized an OTTI loss of $13,543 relating to its
investment in Navios Acquisition and the amount was included in Equity in net earnings/(losses) of affiliated companies.
Total equity method income/(loss) of $10,650 and $(4,728), excluding OTTI loss, were recognized in Equity in net earnings/(losses) of
affiliated companies for the three month periods ended June 30, 2020 and 2019, respectively.
Total equity method income/(loss)
of $12,207 and $(3,262), excluding OTTI loss, were recognized in Equity in net earnings/(losses) of affiliated companies for the six month periods ended June 30, 2020 and 2019, respectively.
Dividends received for each of the three month periods ended June 30, 2020 and 2019 were $1,460 and $2,766, respectively, and for each of
the six month periods ended June 30, 2020 and 2019 were $2,919 and $2,919, respectively.
As of June 30, 2020, the market value
of the investment in Navios Acquisition was $19,801.
Navios Europe I
On December 18, 2013, Navios Europe I acquired ten vessels for aggregate consideration consisting of (i) cash (which was funded with
the proceeds of senior loan facilities (the Senior Loans I) and loans aggregating to $10,000 from Navios Holdings, Navios Acquisition and Navios Partners (in each case, in proportion to their economic interests in Navios Europe I)
(collectively, the Navios Term Loans I) and (ii) the assumption of a junior participating loan facility (the Junior Loan I). In addition to the Navios Term Loans I, Navios Holdings, Navios Acquisition and Navios Partners
would also make available to Navios Europe I revolving loans up to $24,100 to fund working capital requirements (collectively, the Navios Revolving Loans I). In December 2018, the amount of the Navios Revolving Loans I increased by
$30,000.
On an ongoing basis, Navios Europe I was required to distribute cash flows (after payment of operating expenses and amounts due
pursuant to the terms of the Senior Loans I) according to a defined waterfall calculation.
Navios Holdings had evaluated its investment
in Navios Europe I under ASC 810 and concluded that Navios Europe I was a VIE and that it was not the party most closely associated with Navios Europe I and, accordingly, was not the primary beneficiary of Navios Europe I.
Navios Holdings had further evaluated its investment in the common stock of Navios Europe I under ASC 323 and had concluded that it had the
ability to exercise significant influence over the operating and financial policies of Navios Europe I and, therefore, its investment in Navios Europe I had been accounted for under the equity method.
The initial amount provided for in Navios Europe I of $4,750 at the inception included the Companys share of the basis difference
between the fair value and the underlying book value of the assets of Navios Europe I, which amounted to $6,763. This difference had been amortized through Equity in net earnings/(losses) of affiliated companies over the remaining life
of Navios Europe I.
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