Navios Maritime : Consolidated Financial Statements - Form 6-K

The information contained in this Report on Form 6-K (this "Report") is incorporated by reference into the Registration Statements on Form S-8, File No. 333-147186, 333-202141 and 333-222002, and the related prospectuses.

Operating and Financial Review and Prospects

The following is a discussion of the financial condition and results of operations of Navios Maritime Holdings Inc. ("Navios Holdings" or the "Company")for the three- and six-month periods ended June 30, 2023 and 2022. Navios Holdings' financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("U.S. GAAP"). You should read this section together with the consolidated financial statements and the accompanying notes included in Navios Holdings' Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") and the unaudited interim condensed consolidated financial statements and the accompanying notes included elsewhere in this Report.

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements herein other than statements of historical fact, including statements regarding business and industry prospects or future results of operations or financial position, should be considered forward-looking. These forward-looking statements are based on Navios Holdings' current expectations and observations. Factors that could cause actual results to differ materially include, but are not limited to risks, relating to: global and regional economic and political conditions; changes in production or demand for the transportation or storage of grain and mineral commodities and petroleum products; the planned development of the Port Murtinho Terminal and Nueva Palmira Free Zone port terminal facilities by Navios South American Logistics Inc. ("Navios Logistics"), a consolidated subsidiary of the Company; the ability and willingness of charterers to fulfill their obligations to the affiliates in which we are invested; prevailing charter rates; drydocking and repairs; changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, wars, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of global pandemics; the aging of our affiliates' fleets and resultant increases in operating costs; loss by an affiliate of any customer or charter or vessel; the financial condition of our affiliates' customers; changes in the availability and costs of funding due to conditions in the bank markets, capital markets and other factors; increases in costs and expenses related to the operation of vessels of our affiliates, 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 the ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by charterers; competitive factors in the markets in which we and our affiliates operate; our affiliates' ability to make distributions and dividends to us; the value of our subsidiaries and affiliates, and risks associated with operations outside the United States.

Other factors that could cause our actual results to differ from our current expectations and observations include, but are not limited to, those discussed under Part I, Item 3D - Risk Factors in Navios Holdings' Annual Report on Form 20-F for the year ended December 31, 2022. We caution readers of this Report not to place undue reliance on the forward-looking statements, which reflect our view only as of the date of this document. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. We do not undertake any obligation to publicly update or revise any forward-looking statement to reflect changes in assumptions, the occurrence of unanticipated events, changes in future operating results over time, or otherwise.

Overview

General

Navios Holdings owns (i) a controlling equity stake in Navios Logistics, one of the largest infrastructure and logistics companies in the Hidrovia region of South America; and (ii) an interest in Navios Maritime Partners L.P. ("Navios Partners") (NYSE:NMM), an international shipping company, listed on the New York Stock Exchange, that owns and operates dry cargo and tanker vessels.

Navios Logistics

Navios Logistics, a consolidated subsidiary of the Company, was incorporated under the laws of the Republic of the Marshall Islands on December 17, 2007. Navios Logistics believes it is one of the largest infrastructure and logistics companies in the Hidrovia region river system, the main navigable river system in the region, and on the cabotage trades along the southeastern coast of South America. Navios Logistics operates with three reportable segments: the Port Terminal Business, the Cabotage Business and the Barge Business.

Port Terminal Business

Navios Logistics owns three port storage and transfer facilities: a grain port terminal (the "Grain Port Terminal"), which supports agricultural and forest-related exports; an iron ore port terminal (the "Iron Ore Port Terminal"), which supports mineral-related exports; and a liquid port terminal (the "Liquid Port Terminal"), which provides tank storage for refined petroleum products. The Grain Port Terminal and the Iron Port Terminal are located in Nueva Palmira, Uruguay, and the Liquid Port Terminal is located in San Antonio, Paraguay. Since October 2022, Navios Logistics has been providing bunkering services using floating storage capacity in the port of Nueva Palmira. The Navios Logistics port facilities in Nueva Palmira have a total static grain-storage capacity of 460,000 metric tons, and a mineral-ore-stockpile capacity of 1,246,000 tons following the completion of a new stockpile area in the second quarter of 2023. The Liquid Port Terminal has a total static storage capacity of 65,660 cubic meters. The Grain Port Terminal, together with the Iron Ore Terminal, may be collectively referred to in this report as our "Dry Port Terminals."

Cabotage Business

Navios Logistics owns and operates ocean-going vessels to support the transportation needs of its customers in the South American coastal-trade business. Its fleet consists of five ocean-going product tanker vessels and one river and estuary tanker vessel. Navios Logistics contracts its vessels either on a time charter basis or on a contract of affreightment ("CoA") basis.

Barge Business

Navios Logistics services the Argentine, Bolivian, Brazilian, Paraguayan and Uruguayan river transportation markets through its fleet of 301 vessels in its Barge Business, including 30 pushboats and 271 barges. Navios Logistics operates different types of pushboats and wet and dry barges for delivering a wide range of dry and liquid products between ports in the Parana, Paraguay and Uruguay River systems in South America (the Hidrovia or the "waterway"). Navios Logistics typically contracts its vessels either on a time charter basis or on a CoA basis. Navios Logistics provides transportation for dry cargo (cereals, cotton pellets, soybeans, wheat, limestone (clinker), mineral iron, and rolling stones), liquid cargo (hydrocarbons such as crude oil, gas oil, naphtha, fuel oil and vegetable oils) and liquefied cargo (liquefied petroleum gas or "LPG").

As of June 30, 2023 and December 31, 2022, Navios Holdings owned 63.8% of Navios Logistics' stock.

Navios Partners - Affiliate Company (Not Consolidated under Navios Holdings)

Navios Partnersis an international owner and operator of dry cargo and tanker vessels and is engaged in the seaborne transportation services of a wide range of liquid and dry cargo commodities. Types of commodities Navios Partners transports include crude oil, refined petroleum, chemicals, iron ore, coal, grain, fertilizer and containers. Navios Partners charters its vessels under short-, medium-, and longer-term charters.

As of both June 30, 2023 and December 31, 2022, Navios Holdings had a 10.3% ownership interest in Navios Partners. Incentive distribution rights are held by a consolidated subsidiary of Navios Holdings.

Fleet

Following the completion of the Transaction (as defined herein), the current core fleet of the Company consists of the Navios Logistics fleet.

Navios Logistics' Fleet

The following is the current core fleet of Navios Logistics as presented in Navios Logistics' Current Report on Form 6-K for the period ended June 30, 2023, filed with SEC on September 7, 2023:

Factors Affecting Navios Holdings' Results of Operations

Navios Holdings believes the principal factors that will affect its future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping and logistics industry generally and that affect conditions in countries and markets in which its affiliates engage in business. Please see "Item 3. Key Information - D. Risk Factors" included in Navios Holdings' Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC for a discussion of certain risks inherent in their businesses.

Chartering Arrangements

Navios Logistics continually monitors developments in the shipping industry and makes decisions based on an individual vessel and segment basis, as well as on its view of overall market conditions, in order to implement its business strategy. In its Barge Business, Navios Logistics typically operates under a mix of time charters and CoAs (some of which have minimum guaranteed volumes) and spot contracts. In the Cabotage Business, Navios Logistics typically operates under time charters with terms in excess of one year. Some of its charters provide fixed pricing, minimum volume requirements, and adjustment formulas for labor cost and fuel price.

Contract Rates

The shipping and logistics industry has been highly volatile. In order to maximize the utilization of Navios Logistics fleet and storage capacity, Navios Logistics must be able to renew the contracts that employ its fleet and ports upon the expiration or termination of current contracts. This ability depends mainly upon economic conditions in the economic sectors in which the vessels, barges and pushboats operate, changes in the supply and demand for vessels, barges and pushboats, and changes in the supply and demand for the transshipment and storage of commodities.

Seasonality

Certain of Navios Logistics' businesses have seasonality aspects, and seasonality affects the results of its operations and revenues, particularly in the first and last quarters of each year. The high season for the Dry Port Terminals' Uruguayan operations occurs from April to September and is linked to the South American harvest and the arrival of barges down the river. The high season for the Barge Business is between February and July as a result of the South American harvest and higher river levels. During the South American late spring and summer, mainly from November to January, when the low water level in the northern Hidrovia waterway could adversely affect operations of the Barge Business and the volumes it transports. To the extent water levels are insufficient to accommodate the draft of a heavily laden vessel, a vessel may be only partially loaded, generating lower revenue under agreements where revenue is based on volume of cargo loaded. If water levels on a waterway are too low, vessels could be prevented entirely from loading and navigating. In addition, low water levels create difficult navigation conditions, causing voyages to last longer resulting in increased voyage expenses. Such circumstances reduce the effective available carrying capacity of the vessel for the year. The Liquid Port Terminal and the Cabotage Business are not significantly affected by seasonality as their operations are primarily linked to refined petroleum products, and thus not significantly affected by water levels.

Period over Period Comparisons

For the Three-Month Period Ended June 30, 2023 Compared to the Three-Month Period Ended June 30, 2022

Revenue: Revenue from continuing operations was $81.9 million for the three-month period ended June 30, 2023, as compared to $69.2 million for the same period in 2022. The increase was mainly attributable to (i) a $7.3 million increase in revenue from the Barge Business, mainly attributable to time charter-out contracts that were in place for iron ore transportation; and (ii) $6.7 million attributable to the sale of fuel products in connection with the bunkering services in the port of Nueva Palmira. The overall increase was partially mitigated by (i) a $1.1 million decrease in revenue from the Port Terminal Business, mainly attributable to the Grain Port Terminal as a result of lower grain throughput from a decline in Uruguayan exports, partially mitigated by higher tariffs and volumes transshipped at the Iron Ore Port Terminal; and (ii) a $0.1 million decrease in revenue from the Cabotage Business.

Direct Vessel Expenses: Direct vessel expenses from continuing operations increased overall by $3.4 million, or 18.5%, to $22.0 million for the three-month period ended June 30, 2023, as compared to $18.6 million for the three-month period ended June 30, 2022. The increase was mainly due to (i) a $2.7 million increase in direct vessel expenses of the Barge Business due to increased payroll and repairs and maintenance; and (ii) a $0.7 million increase in direct vessel expenses of the Cabotage Business.

General and Administrative Expenses: General and administrative expenses from continuing operations increased by $2.2 million to $7.0 million for the three-month period ended June 30, 2023, as compared to $4.8 million for the three-month period ended June 30, 2022. The increase was mainly attributable to (i) a $1.2 million increase in general and administrative expenses related to Navios Logistics, due to an increase in professional fees, salaries and travel expenses; and (ii) a $1.0 million increase in general and administrative expenses related to Navios Holdings for continuing operations. For each of the three-month periods ended June 30, 2023 and 2022, general and administrative expenses related to Navios Holdings for continuing operations,under the Administrative Services Agreement (as defined herein), amounted to $0.1 million.

Interest Expense and Finance Cost, Net: Interest expense and finance cost, net increased by $0.2 million, or 1.5%, to $16.3 million for the three-month period ended June 30, 2023, as compared to $16.1 million for the same period in 2022. This increase was mainly due to a $0.6 million increase in interest expense and finance cost, net, from Navios Holdings' continuing operations, mainly due the 4% PIK interest on the Convertible Debenture (as defined herein). The overall decrease wasmitigated by a $0.4 million decrease in interest expenses and finance cost, net of the Logistics Business.

Impairment loss/loss on sale of vessel: Impairment loss/loss on sale of vessel from continuing operations incurred in the three-month period ended June 30, 2023 was $1.7 million as compared to nil for the same period in 2022, due to the sale of He Man H. Please refer to Note 4 "Vessels, Port Terminal and other fixed assets, net" included elsewhere in this Report.

Other (Expense)/Income, Net: Other expense, net from continuing operations increased by $2.8 million, to $0.2 million for the three-month period ended June 30, 2023, as compared to $2.6 million other income, net for the same period in 2022. This increase was mainly due to a $3.2 million increase in other expense, net of the Logistics Business mainly due to(i) a $3.3 million increase in other expense in the Barge Business; (ii) a $0.4 million increase in other expense in the Port Terminal Business; and (iii) a $0.4 million decrease in other expense, net in the Cabotage Business. The overall increase wasmitigated by a $0.4 million increase in other income, net from Navios Holdings' continuing operations.

Equity in Net Earnings of Affiliate Companies: Equity in net earnings of affiliate companies increased by $2.0 million, to$15.2 million for the three-month period ended June 30, 2023, as compared to $13.2 million for the same period in 2022, mainly due to increase in equity method income from Navios Partners.

Income Tax Expense: Income tax expense increased by $0.8 million to $1.1 million expense for the three-month period ended June 30, 2023, as compared to $0.4 million for the same period in 2022. The total change in income tax was attributable to Navios Logistics due to a $0.9 million increase in income tax expense of the Cabotage Business partially mitigated by a $0.1 million decrease in income tax expense of the Barge Business.

Net income from discontinued operations: Net income from discontinued operations was $28.9 million for the three-month period ended June 30, 2022.

An analysis of the amounts recorded in respect of discontinued operations in the three-month period ended June 30, 2022 is presented as follows:

Net Income Attributable to the Noncontrolling Interest: Net income attributable to the noncontrolling interest decreased by $0.8 million to $1.5 million for the three-month period ended June 30, 2023, as compared to $2.3 million for the same period in 2022. This decrease was mainly due to a decrease in net income of the Logistics Business for the three-month period ended June 30, 2023, as compared to the same period in 2022.

For the Six-Month Period Ended June 30, 2023 Compared to the Six-Month Period Ended June 30, 2022

Revenue: Revenue from continuing operations was $147.3 million for the six-month period ended June 30, 2023, as compared to $128.3 million for the same period in 2022. The increase was mainly attributable to (i) a $10.3 million increasein revenue from the Barge Business, mainly attributable to time charter-out contracts that were in place for iron ore transportation; (ii) a $7.9 increase in revenue million attributable to the sale of fuel products in connection with the bunkering services in the port of Nueva Palmira; (iii) a $0.7 million increase in revenue from the Port Terminal Business due to higher tariffs and volumes transshipped at the Iron Ore Port Terminal partially mitigated by the lower grain throughput in the Grain Port Terminal related to a decline in Uruguayan exports; and (iv) a $0.1 million increase in revenue from the Cabotage Business.

Time Charter, Voyage and Logistics Business Expenses: Time charter, voyage and logistics business expenses from continuing operations increased by $6.6 million, or 20.0%, to $39.8 million for the six-month period ended June 30, 2023, as compared to $33.1 million for the six-month period ended June 30, 2022. The increase was mainly due to (i) a $7.1 million increase in cost of products sold, mainly attributable to an increase in fuel products sold in connection with the bunkering services in the port of Nueva Palmira; and (ii) a $3.6 million increase in port terminal expenses of the Port Terminal Business, mainly due to higher volumes transshipped in the Iron Ore Port Terminal. The overall increase was partially mitigated by (i) a $3.7 million decrease in in time charter and voyage expenses of the Barge Business, due to decreased bunker consumption and other voyage expenses resulting from the time charter-out contracts in place for iron ore transportation during the current period; and (ii) a $0.4 million decrease in time charter and voyage expenses of the Cabotage Business.

Direct Vessel Expenses: Direct vessel expenses from continuing operations increased by $4.3 million, or 12.1%, to $39.8 million for the six-month period ended June 30, 2023, as compared to $35.5 million for the same period in 2022. The increase was mainly attributable to (i) a $3.5 million increase in direct vessel expenses of the Barge Business due to increased payroll and repairs and maintenance; and (ii) a $0.8 million increase in direct vessel expenses of the Cabotage Business.

General and Administrative Expenses: General and administrative expenses from continuing operations increased by $3.5 million to $12.4 million for the six-month period ended June 30, 2023, as compared to $8.8 million for the six-month period ended June 30, 2022. The increase was mainly attributable to (i) a $2.4 million increase in general and administrative expenses related to Navios Logistics, due to an increase in professional fees, salaries and travel expenses; and (ii) a $1.1 million increase in general and administrative expenses related to Navios Holdings for continuing operations. For each of the six-month periods ended June 30, 2023 and 2022, general and administrative expenses, related to Navios Holdings for continuing operations, under the Administrative Services Agreement (as defined herein), amounted to $0.3 million.

Depreciation and Amortization: For the six-month period ended June 30, 2023, depreciation and amortization expense decreased by $0.4 million, or 2.6%, to $15.7 million, as compared to $16.1 million for the same period in 2022.

Interest Expense and Finance Cost, Net: Interest expense and finance cost, net from continuing operations increased by $1.0 million, or 3.0%, to $32.8 million for the six-month period ended June 30, 2023, as compared to $31.8 million in the same period in 2022. This increase was mainly due to a $1.2 million increase in interest expense and finance cost, net, from Navios Holdings' continuing operations, mainly due the 4% PIK interest on the Convertible Debenture (as defined herein). The overall decrease wasmitigated by a $0.3 million decrease in interest expenses and finance cost, net of the Logistics Business.

Impairment loss/loss on sale of vessel: Impairment loss/loss on sale of vessel from continuing operations incurred in the six-month period ended June 30, 2023 was $1.7 million as compared to nil for the same period in 2022, due to the sale of He Man H. Please refer to Note 4 "Vessels, Port Terminal and other fixed assets, net" included elsewhere in this Report.

Other Expense/(Income), Net: Other expense, net from continuing operations increased by $4.4 million, to $3.2 million for the six-month period ended June 30, 2023, as compared to $1.2 million other income, net for the same period in 2022. This increase was mainly due to a $4.2 million increase in other expense, net of the logistics business mainly due to(i) a $3.5 million increase in other expense in the Barge Business; (ii) a $0.5 million increase in other expense in the Port Terminal Business, mainly due to an increase in provision for losses on accounts receivable; and (iii) a $0.2 million increase in other expense, net in the Cabotage Business;.

Non-operating other finance cost: In respect of the NSM Loans (as defined herein), Navios Holdings paid a $24.0 million upfront fee in the form of a Convertible Debenture issued in January 2022. For information on the Convertible Debenture, see Note 9 "Transactions with Related Parties" to the unaudited interim condensed consolidated financial statements included elsewhere in this Report.

Equity in Net Earnings of Affiliate Companies: Equity in net earnings of affiliate companies increased by $8.3 million to $31.3 million for the six-month period ended June 30, 2023, as compared to $23.0 million for the same period in 2022 due to an increase in equity method income from Navios Partners.

Income Tax Expense: Income tax expense increased by $1.1 million to $1.4 million for the six-month period ended June 30, 2023, as compared to a $0.3 million for the same period in 2022. The increase was mainly due to (i) a $0.8 million increase in income tax expense of the Cabotage Business; and (ii) a $0.3 million increase in income tax expense of the Barge Business.

Net income from discontinued operations: Net income from discontinued operations was $39.4 million for the six-month period ended June 30, 2022.

An analysis of the amounts recorded in respect of discontinued operations in the six-month period ended June 30, 2022 is presented as follows:

Net Income Attributable to the Noncontrolling Interest: Net income attributable to the noncontrolling interest decreased by $0.2 million to $1.9 million for the six-month period ended June 30, 2023, as compared to $2.2 million for the same period in 2022. This decrease was mainly due to a decrease in net income of the Logistics Business for the six-month period ended June 30, 2023, as compared to the same period in 2022.

Liquidity and Capital Resources

Navios Holdings has historically financed its capital requirements with cash flows from operations, issuances of debt securities and borrowings under bank credit facilities. Main uses of funds have been refinancing of outstanding debt, capital expenditures for the acquisition of new assets, new construction and upgrades at the port terminals and expenditures incurred in connection with ensuring that the owned assets comply with international and regulatory standards. We may from time to time, subject to restrictions under our debt and equity instruments, including limitations on dividends and repurchases under the terms of our preferred stock, depending upon market conditions and financing needs, use available funds to refinance or repurchase our debt or equity in privately negotiated or open market transactions, by tender offer or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms our management deems appropriate (which may be below par) and subject to our cash requirements for other purposes, compliance with the covenants under our debt agreements, and other factors that our management deems relevant. In addition, Navios Logistics regularly reviews options for refinancing its outstanding indebtedness and opportunities for acquisition of businesses and additional assets, development of new facilities and infrastructure, joint ventures, and other corporate transactions that may be material to it. Generally, sources of funds may be from cash flows from operations, long-term borrowings, other debt or equity financings, proceeds from asset sales, and proceeds from dispositions of our stakes in our investments. We cannot provide any assurance that we will be able to secure adequate financing or obtain additional funds on favorable terms to meet our liquidity needs.

See "Working Capital Position" and "Long-Term Debt Obligations and Credit Arrangements" included elsewhere in this Report for further discussion of our working capital position.

The following table presents cash flow information derived from the unaudited interim condensed consolidated statements of cash flows of Navios Holdings for the six-month periods ended June 30, 2023 and 2022.

Cash provided by operating activities for the six-month period ended June 30, 2023 and 2022:

Net cash provided by operating activities decreased by $58.3 million to $27.7 million for the six-month period ended June 30, 2032, as compared to $86.1 million for the same period in 2022.

The net cash inflow resulting from the change in operating assets and liabilities of $2.7 million for the six-month period ended June 30, 2023 resulted from: (i) a $7.1 million decrease in accounts receivable, net; (ii) a $2.4 million increase in interest expense relating to the issuance of the Convertible Debenture, as described elsewhere in this Report; (iii) a $0.2 million decrease in inventories; (iv) a $0.3 million increase in accounts payable; (v) a $0.1 million increase in operating lease liabilities; and (vi) a $0.1 million increase in amounts due to affiliate companies. These were partially mitigated by (i) $4.3 million in payments for drydock and special survey costs; (ii) a $1.8 million increase in prepaid expenses and other assets; (iii) a $0.9 million decrease in deferred revenues; and (iv) a $0.4 million decrease in accrued expenses.

The net cash inflow resulting from the change in operating assets and liabilities of $3.4 million for the six-month period ended June 30, 2022 resulted from: (i) a $24.1 million increase in due to affiliate companies; (ii) a $23.6 million increase in interest expense relating to the issuance of the Convertible Debenture, as described elsewhere in this Report; and (iii) a $0.1 million increase in deferred revenue. These were partially mitigated by (i) a $17.6 million decrease in accrued expenses; (ii) $6.9 million in payments for drydock and special survey costs; (iii) a $6.2 million increase in accounts receivable, net; (iv) a $6.1 million decrease in accounts payable; (v) a $5.0 million decrease in operating lease liabilities; (vi) a $1.5 million increase in prepaid expenses and other assets; (vii) a $0.9 million decrease in accrued interest payable to affiliate companies; (viii) a $0.1 million increase in inventories; and (ix) a $0.1 million decrease in other long term liabilities.

Cash used in investing activities for the six-month period ended June 30, 2023 and 2022:

Cash used in investing activities was $13.6 million for the six-month period ended June 30, 2023, as compared to $6.3 million for the same period in 2022.

Cash used in investing activities for the six-month period ended June 30, 2023 was the result of: (i) $8.5 million in payments made by Navios Logistics for the acquisition of fixed assets; (ii) $3.3 million in payments made by Navios Logistics for expansion works in the Iron Ore Port Terminal; (iii) $1.2 million in payments made by Navios Logistics for the acquisition of Vimalcor; (iv) $0.9 million in payments made by Navios Logistics for the development of a new liquid terminal in Nueva Palmira; and (v) less than $0.1 million in payments made by Navios Logistics for the development of port operations in Port Murtinho, Brazil. This was partially mitigated by (i) $0.1 million of proceeds made by Navios Logistics related to the disposal of vessels.

Cash used in investing activities for the six-month period ended June 30, 2022 was the result of: (i) $2.7 million in payments made by Navios Logistics for the acquisition of fixed assets; (ii) $2.0 million in deposit payments for the acquisition of the Navios Sky made by Navios Holdings; (iii) $1.6 million in made by Navios Holdings for additions to vessels; and (iv)$0.1 million in payments for the development of Navios Logistics' port operations in the Port Murtinho region of Brazil.

Cash used in financing activities for the six-month period ended June 30, 2023, as compared to cash used in financing activities for the six-month period ended June 30, 2022:

Cash used in financing activities was $24.0 million for the six-month period ended June 30, 2023, as compared to $162.7 million for the same period in 2022.

Cash used in financing activities for the six-months ended June 30, 2023 was the result of (i) $14.0 million in payments made in connection with the Company's outstanding indebtedness; and (ii) $10.0 million payments in relation to the promissory note to Grimaud.

Adjusted EBITDA: EBITDA represents net income attributable to Navios Holdings' common stockholders before interest and finance costs, depreciation and amortization and income taxes. Adjusted EBITDA represents EBITDA before stock-based compensation. Adjusted EBITDA is presented because it is used by certain investors to measure a company's operating performance and is reconciled to net income/(loss), the most comparable U.S. GAAP performance measure. Adjusted EBITDA is calculated as follows: net income/(loss) plus adding back, when applicable and as the case may be, the effect of: (i) depreciation and amortization; (ii) amortization of deferred drydock and special survey costs; (iii) stock-based compensation; (iv) interest expense and finance cost, net; and (v) income tax benefit/(expense). Navios Holdings believes that Adjusted EBITDA is a basis upon which performance can be assessed and represents useful information to investors regarding their ability to incur indebtedness and meet working capital requirements. Navios Holdings also believes that Adjusted EBITDA is used (i) by prospective lessors as well as 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.

Adjusted EBITDA has limitations as an analytical tool, and therefore, should not be considered in isolation or as a substitute for the analysis of Navios Holdings' results as reported under U.S. GAAP. Some of these limitations are: (i) Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; (ii) Adjusted EBITDA does not reflect the amounts necessary to service interest or principal payments on our debt and other financing arrangements; and (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. Adjusted EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, Adjusted EBITDA should not be considered as a principal indicator of Navios Holdings' performance. Furthermore, our calculation of Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

Adjusted EBITDA Reconciliation to Net Income

Adjusted EBITDA from continuing operations for the three-month period ended June 30, 2023 increased by $0.7 million to $42.3 million, as compared to $41.6 million for the same period in 2022. The increase in Adjusted EBITDA was primarily due to: (i) a $12.7 million increase in revenue; (ii) a $2.1 million increase in equity in net earnings from affiliate companies; and (iii) a $0.8 million decrease in net income attributable to noncontrolling interest. This overall increase was partially mitigated by: (i) a $5.2 million increase in time charter, voyage and logistics business expenses; (ii) a $3.0 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); (iii) a $2.8 million increase in other expenses, net; (iv) a $2.2 million increase in general and administrative expenses (excluding stock-based compensation expenses); and (v) a $1.7 million decrease in impairment losses.

Adjusted EBITDA from continuing operations for the six-month period ended June 30, 2023 increased by $7.9 million to $82.8 million, as compared to $74.9 million for the same period in 2022. The increase in Adjusted EBITDA was primarily due to: (i) a $19.0 million increase in revenue; (ii) a $8.3 million increase in equity in net earnings from affiliate companies; and (iii) a $0.2 million decrease in net income attributable to noncontrolling interest. This overall increase was partially mitigated by: (i) a $6.6 million increase in time charter, voyage and logistics business expenses; (ii) a $4.4 million increase in other expenses, net; (iii) a $3.6 million increase in general and administrative expenses (excluding stock-based compensation expenses); (iv) a $3.4 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); and (v) a $1.7 million decrease in impairment losses.

Long-Term Debt Obligations and Credit Arrangements

Navios Holdings' long-term debt obligations and credit arrangements are presented under the captions "Current portion of long-term debt, net", "Current portion of senior and ship mortgage notes, net", "Senior and ship mortgage notes, net", "Long-term debt, net of current portion" and "Convertible debenture payable to affiliate companies", under current and non-current liabilities in the consolidated statement of financial position, included elsewhere in this Report. As of June 30, 2023 and December 31, 2022, total borrowings, net amounted to $633.2 million and $651.2 million, respectively. The current portion of long-term borrowings, net amounted to $32.0 million at June 30, 2023 and $23.5 million at December 31, 2022. Please refer to our Annual Report on Form 20-F for the year ended December 31, 2022 for a full description of borrowings.

Working Capital Position and Bond Maturity

Based oninternal forecasts and projections that take into account potential changes in the Company's trading performance and other assets, management believes that the Company has adequate financial resources to continue in operation and meet its financial commitments, including but not limited to capital expenditures and debt service obligations, for a period of at least twelve months from the date of issuance of the unaudited interim condensed consolidated financial statements. Although internal forecasts and projections are driven by market data and are subject to future volatility along with other factors outside the control of the Company, with the existence of alternative liquidity sources and management's ability to utilize them if needed, management concludes that the Company has the ability to continue as a going concern as of the date of the issuance of the unaudited interim condensed consolidated financial statement.

Capital Expenditures

Navios Logistics

For a full description of Navios Logistics' capital expenditures, please see Note 4 "Vessels, port terminals and other fixed assets, net" to our unaudited condensed consolidated financial statements included elsewhere in this Report.

Dividend Policy

In November 2015, Navios Holdings announced that the Board of Directors decided to suspend the quarterly dividend to its common stockholders. In February 2016, Navios Holdings announced the suspension of payment of quarterly dividends on its preferred stock, including the Series G ADSs and Series H ADSs. The reinstatement, declaration and payment of any further dividend remains subject to the discretion of the Board of Directors and will depend on, among other things, market conditions, Navios Holdings' cash requirements after taking into account market opportunities, restrictions under its equity instruments, credit agreements, indentures and other debt obligations and such other factors as the Board of Directors may deem advisable.

No dividends were declared or paid during the three-month periods ended June 30, 2023 and 2022.

Concentration of Credit Risk

Accounts receivable, net

Concentration of credit risk with respect to accounts receivables is limited due to Navios Holdings' large number of customers, who are internationally dispersed and have a variety of end markets in which they operate. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in Navios Holdings' trade receivables. For the six-month period ended June 30, 2023, Vale International S.A. ("Vale") and Y.P.F. S.A. ("YPF"), each, accounted for more than 10.0% of the Company's revenue. For the six-month period ended June 30, 2022, Vale and YPF, each, accounted for more than10.0% of the Company's revenue.

In July 2022, Vale announced the closing of the sale of its iron ore, manganese ore and logistics assets in the midwestern system to J&F Mineracao Ltda., an entity controlled by J&F Investimentos S.A. The Vale port contract entered into between Corporacion Navios S.A., a company controlled by Navios Logistics, and Vale, dated September 27, 2013, remains in full force and effect.

Cash deposits with financial institutions

Cash deposits in excess of amounts covered by government-provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Holdings maintains cash deposits in excess of government-provided insurance limits. Navios Holdings also reduces exposure to credit risk by dealing with a diversified group of major financial institutions.

Effects of Inflation

Navios Holdings does not consider inflation to be a significant risk to the cost of doing business in the foreseeable future. The Company considered various factors in assessing the impact of Argentina's highly inflationary economy on Navios Logistics, including sales, financing arrangements, working capital, employee salaries, and taxes. The functional currency of the Company's Argentinian subsidiary is the U.S. dollar and the day-to-day operations of the Company's Argentinian subsidiary are dependent on the economic environment of the Company's U.S. dollar currency. As a result, the Company concluded that the highly inflationary economic environment in Argentina would not have a material impact on Navios Logistics' financial statements and as such, determined not to issue a restatement.

Related Party Transactions

Please see Note 9 "Transactions with Related Parties" to our unaudited interim condensed consolidated financial statements, included elsewhere in this Report for a full description of related party transactions.

Quantitative and Qualitative Disclosures about Market Risks

Navios Holdings is exposed to certain risks related to interest rate, foreign currency and fuel price inflation rates.

Interest Rate Risk

Debt Instruments - On June 30, 2023 and December 31, 2022, Navios Holdings had a total of $675.2 million and $686.8 million, respectively, of long-term indebtedness. All of the Company's debt is U.S. dollar-denominated. The 2024 Notes, the Convertible Debenture, the 2025 Logistics Senior Notes and four of Navios Logistics' loans bear interest at a fixed rate; the remaining balance of the Company's long- term indebtedness bears interest at a floating rate.

Changes in interest rates for our floating-rate loan facilities would affect their interest rate and related interest expense. As of June 30, 2023, the outstanding amount of the Company's floating rate loan facilities was $10.8 million. A change of 100 basis points in the LIBOR or SOFR rate would change interest expense for the six-month period ended June 30, 2023 by $0.1 million.

The interest rate on the 2024 Notes, the Convertible Debenture, the 2025 Logistics Senior Notes and four of Navios Logistics' loans are fixed and, therefore, changes in interest rates affect their fair value, which as of June 30, 2023 was $664.4 million, but do not affect their related interest expense.

For a detailed discussion of Navios Holdings' debt instruments refer to the section "Long-Term Debt Obligations and Credit Arrangements" to the unaudited interim condensed consolidated financial statements included elsewhere in this Report.

Foreign Currency Risk

Our operating results, which are reported in U.S. dollars, may be affected by fluctuations in the exchange rate between the U.S. dollar and other South American currencies. We use the U.S. dollar as our functional and reporting currency. Therefore, revenue and expense accounts are translated into U.S. dollars at the exchange rate in effect at the date of each transaction.

Although Navios Holdings' revenues are U.S. dollar-based, 51.4% of our expenses from continuing operations related to the Navios Logistics segment are in Uruguayan pesos, Argentinean pesos, Paraguayan guaranies and Brazilian reals. Navios Holdings monitors its Argentine peso, Uruguayan peso, Paraguayan guarani and Brazilian real exposure against long-term currency forecasts and enters into foreign currency contracts from time to time when considered appropriate.

Inflation and Fuel Price Increases

The impact of inflation on prices in the South American countries in which Navios Logistics operates and the effects of the current war in Ukraine may not be fully neutralized by equivalent adjustments in the rate of exchange between the local currencies and the U.S. dollar. Specifically, for its Barge and Cabotage Businesses, Navios Logistics negotiated, and will continue to negotiate, fuel price adjustment clauses; however, in some cases, prices that Navios Logistics pays for fuel are temporarily not aligned with the adjustments that Navios Logistics obtains under itsfreight contracts.

Critical Accounting Policies

Navios Holdings' unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires Navios Holdings to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management. Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. All significant accounting policies are as described in the Company's Annual Report on Form 20-F for the year ended December 31, 2022.

During the second quarter of 2023, the Company changed its accounting policy on foreign exchange differences recognized in the unaudited condensed consolidated statements of comprehensive income. Following this change, foreign exchange gains and losses are presented in the same line item as the underlying transaction. Total impact for the six-month periods ended June 30, 2023 and 2022 was $1.8 million and $0.2 million respectively. The impact of the amounts reclassified to each underlying item was not material for all prior periods presented.

Asset Acquisitions: When the Company enters into an acquisition transaction, it determines whether the acquisition transaction is a purchase of an asset or a business based on the facts and circumstances of the transaction. In accordance with Topic 805, Business Combinations, the Company first evaluates whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets (Step 1). If that threshold is met, the set of assets and activities is not a business. If the threshold is not met, the Company evaluates whether the set meets the definition of a business (Step 2). To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition date fair values. For asset acquisitions, the net assets acquired should be measured following a cost accumulation and allocation model under which the cost of the acquisition is allocated on a relative fair value basis to the qualifying assets acquired. In May 2023, Navios Logistics completed the acquisition of the stock of Vimalcor S.A. ("Vimalcor") for a purchase price of $1.6 million. The main asset acquired is the right of use of a plot of land in the port of Montevideo (refer to Note 5 and Note 14).

Investments in Equity Securities

Recent Accounting Pronouncements

The Company's recent accounting pronouncements are included in the accompanying notes to the unaudited interim condensed consolidated financial statements included elsewhere in this Report.

NAVIOS MARITIME HOLDINGS INC.

See unaudited condensed notes to condensed consolidated financial statements

See unaudited condensed notes to condensed consolidated financial statements

See unaudited condensed notes to condensed consolidated financial statements

See unaudited condensed notes to condensed consolidated financial statements

NOTE 1: DESCRIPTION OF BUSINESS

Navios Maritime Holdings Inc. ("Navios Holdings" or the "Company") (NYSE: NM) owns (i) a controlling equity stake in Navios South American Logistics Inc. ("Navios Logistics"), one of the largest infrastructure and logistics company in the Hidrovia region of South America; and (ii) an interest in Navios Maritime Partners L.P. ("Navios Partners") (NYSE:NMM), an international shipping company, listed on the New York Stock Exchange, that owns and operates dry cargo and tanker vessels.

In September 2022, Navios Holdings completed the sale of its 36-vessel dry bulk fleet for consideration consisting of cash and the assumption of bank debt and finance leases related to the vessels, and subject to a working capital adjustment at closing (the "Transaction"), to Navios Partners. The former dry bulk vessel operations were historically a separate reportable segment of the Company. Subsequent to the closing of the Transaction, the results of the dry bulk vessel operations are reported as discontinued operations for all periods presented. For further information see Note 15 "Discontinued operations" in the interim condensed consolidated financial statements. Upon the closing of the Transaction, the Company has onereportable segment.

Navios Logistics

Navios Logistics, a consolidated subsidiary of the Company, was incorporated under the laws of the Republic of the Marshall Islands on December 17, 2007. Navios Logistics believes it is one of the largest infrastructure and logistics companies in the Hidrovia region river system, the main navigable river system in the region, and on the cabotage trades along the southeastern coast of South America. Navios Logistics operates with three reportable segments: the Port Terminal Business, the Cabotage Business and the Barge Business.

Navios Partners

Navios Partners is an international owner and operator of dry cargo and tanker vessels and is engaged in the seaborne transportation services of a wide range of liquid and dry cargo commodities. Types of commodities Navios Partners transports include crude oil, refined petroleum, chemicals, iron ore, coal, grain, fertilizer and containers. Navios Partners charters its vessels under short-, medium-, and longer-term charters.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of presentation:The accompanying interim condensed consolidated financial statements are unaudited, but, in the opinion of management, reflect all adjustments for a fair statement of Navios Holdings' consolidated balance sheets, statements of comprehensive income, statements of cash flows and statements of changes in equity for the periods presented. The results of operations for the interim periods are not necessarily indicative of results for the full year. The footnotes are condensed as permitted by the requirements for interim financial statements and accordingly, do not include information and disclosures required under United States generally accepted accounting principles ("U.S. GAAP") for complete financial statements. All such adjustments are deemed to be of a normal recurring nature. These interim financial statements should be read in conjunction with the Company's consolidated financial statements and notes included in Navios Holdings' Annual Report for the year ended December 31, 2022 filed on Form 20-F with the Securities and Exchange Commission ("SEC").

Based on internal forecasts and projections that take into account potential changes in the Company's trading performance and other assets, management believes that the Company has adequate financial resources to continue in operation and meet its financial commitments, including but not limited to capital expenditures and debt service obligations, for a period of at least twelve months from the date of issuance of the interim condensed consolidated financial statements. Although internal forecasts and projections are driven by market data and are subject to future volatility along with other factors outside the control of the Company, with the existence of alternative liquidity sources and management's ability to utilize them if needed, management concludes that the Company has the ability to continue as a going concern as of the date of the issuance of the interim condensed consolidated financial statements.

Following Russia's invasion of Ukraine in February 2022 the United States, the European Union, the United Kingdom and other countries have announced sanctions against Russia, and may impose wider sanctions and take other actions in the future. To date, no apparent consequences have been identified on the Company's business. Notwithstanding the foregoing, it is possible that these tensions might eventually have an adverse impact on our business, financial condition, results of operations and cash flows.

Change in accounting policy:

(b) Principles of consolidation: The accompanying interim condensed consolidated financial statements include the accounts of Navios Holdings, a Marshall Islands corporation, and its majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidated statements.

Affiliate companies included in the financial statements accounted for under the equity method: In the interim condensed consolidated financial statements of Navios Holdings, Navios Partners and its subsidiaries are included as affiliate companies and are accounted for under the equity method for such periods.

(d) Revenue Recognition:

Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers control of the promised goods or services to its customers. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Voyage revenues for the transportation of cargo are recognized ratably over the estimated relative transit time of each voyage. A voyage is deemed to commence when a vessel arrives at the loading port, as applicable under the contract, and is deemed to end upon the completion of the discharge of the current cargo. Under a voyage charter, a vessel is provided for the transportation of specific goods between specific ports in return for payment of an agreed upon freight per ton of cargo.

Revenues are recorded net of address commissions. Address commissions represent a discount provided directly to the charterers based on a fixed percentage of the agreed upon charter rate. Since address commissions represent a discount (sales incentive) on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer, these commissions are presented as a reduction of revenue.

Revenue from contracts of affreightment ("COA")/voyage contracts relating to our barges are recognized ratably over the estimated relative transit time of each voyage. A voyage is deemed to commence upon the barge's arrival at the loading port, as applicable under the contract, and is deemed to end upon the completion of discharge under the current voyage. The percentage of transit time is based on the number of days traveled as of the balance sheet date divided by the number of total days expected for the voyage. The position of the barge at the balance sheet date is determined by the days traveled as of the balance sheet date over the total voyage of the pushboat having the barge in tow. Revenue arising from contracts that provide our customers with continuous access to convoy capacity is recognized ratably over the period of the contracts.

Demurrage income represents payments made by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter and is recognized as it is earned.

The Company recognizes revenue ratably from the vessel's/barge's arrival at the loading port, as set forth in the applicable contract, to when the charterer's cargo is discharged as well as defer costs that meet the definition of "costs to fulfill a contract" and relate directly to the contract.

Revenues from time-chartering and bareboat chartering of vessels and barges are accounted for as operating leases and are thus recognized on a straight-line basis as the average revenue over the rental periods of such charter agreements as service is performed. However, for loss generating time charters, the loss is recognized in the period during which the loss is generated. A time-charter involves placing a vessel or barge at the charterer's disposal for a period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Charters for periods of less than three months are referred to as spot-charters. Charters for periods of three months to a year are generally referred to as medium-term charters. All other charters are considered long-term. For time-charters, the owner of the vessel typically pays the vessel's operating costs, such as crews, maintenance and insurance.

Revenues from dry port terminal operations consist of an agreed flat fee per ton and cover the services performed in connection with unloading cargo from barges (or trucks), transferring the cargo into silos or the stockpiles for temporary storage, and loading the ocean-going vessels. Revenues are recognized upon completion of loading the ocean-going vessels. Revenue arising from contracts that provide our customers with continuous access to port terminal storage and transshipment capacity is recognized ratably over the period of the contracts. Additionally, fees are charged for vessel dockage and for storage time in excess of contractually specified terms. Dockage revenues are recognized ratably up to completion of loading as the performance obligation is met evenly over the loading period. Storage fees are assessed and recognized at the point when the product remains in the silo storage beyond the contractually agreed upon term. Storage fee revenue is recognized ratably over the storage period and ends when the product is loaded onto the ocean-going vessel.

Revenues from liquid port terminal operations consist mainly of sales of petroleum products in the Paraguayan market and revenues from liquid port operations. Revenues from liquid port terminal operations consist of an agreed flat fee per cubic meter or a fixed rate over a specific period to cover the services performed to unload barges, transfer the products into the tanks for temporary storage and then loading the trucks. Revenues that consist of an agreed flat fee per cubic meter are recognized upon completion of loading the trucks. Revenues from liquid port terminal operations that consist of a fixed rate over a specific period are recognized ratably over the storage period as the performance obligation is met evenly over time, ending when the product is loaded onto the trucks.

Expenses related to our revenue-generating contracts are recognized as incurred.

The following tables reflect the revenue earned per category for the three- and six-month periods ended June 30, 2023 and 2022:

Deferred Income and Cash Received In Advance: Deferred voyage revenue primarily relates to cash received from charterers prior to it being earned.

These amounts are recognized as revenue over the voyage or charter period.

(e) Recent Accounting Pronouncements:

Adoption of new accounting pronouncements:

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-4, "Reference Rate Reform (Topic 848)" ("ASU 2020-4"), which provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain contracts to replace LIBOR with a new reference rate. The guidance, if adopted, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. In addition, in January 2021, the FASB issued ASU No. 2021-01 with respect to the Reference Rate Reform (Topic 848). The amendments in this Update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU 2020-4 was effective for the Company beginning on March 12, 2020 and the Company will apply the amendments prospectively through December 31, 2024. There was no material impact to the Company's interim condensed consolidated financial statements as of June 30, 2023.

NOTE 3: CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents and restricted cash consisted of the following:

Short-term deposits and highly liquid funds relate to amounts held in banks for general financing purposes and represent deposits with an original maturity of less than three months and are included in the condensed consolidated balance sheets under the caption "Cash and cash equivalents".

Cash deposits and cash equivalents in excess of amounts covered by government-provided insurance are exposed to loss in the event of non-performance by financial institutions. Navios Holdings does maintain cash deposits and equivalents in excess of government provided insurance limits. Navios Holdings reduces exposure to credit risk by dealing with a diversified group of major financial institutions.

NOTE 4: VESSELS, PORT TERMINALS AND OTHER FIXED ASSETS, NET

Navios Logistics

Impairment loss

NOTE 5: INTANGIBLE ASSETS OTHER THAN GOODWILL

The remaining aggregate amortization of acquired intangibles as of June 30, 2023 will be as follows:

NOTE 6: BORROWINGS

Borrowings, as of June 30, 2023 and December 31, 2022, consisted of the following:

Navios Holdings Debt

2024 Notes

The 2024 Notes are general senior unsecured obligations of Navios Holdings. The 2024 Notes are not guaranteed by any of Navios Holdings' subsidiaries.

The indenture governing the 2024 Notes does not contain restrictive covenants but does include customary events of default.

Convertible Debenture

Navios Logistics Debt

2025 Logistics Senior Notes

The 2025 Notes are senior secured obligations of the Co-Issuers and rank equal in right of payment to all of their existing and future senior indebtedness and senior in right of payment to all of their future subordinated indebtedness. The 2025 Notes are fully and unconditionally guaranteed, jointly and severally, by all of the Company's direct and indirect subsidiaries, other than Logistics Finance. The 2025 Notes are currently secured by: (i) first priority ship mortgages on three tanker vessels servicing the Company's Cabotage Business (the (1) Elena H, (2) Makenita H and (3) Sara H). owned by certain subsidiary guarantors (such guarantors, the "Mortgaged Vessel Guarantors") and related assignments of earnings and insurance, together with a first priority lien on the capital stock of each Mortgaged Vessel Guarantor; and (ii) an assignment by way of security of the Vale port contract (collectively, the "Collateral").The tanker vessel He Man H was released from the 2025 Logistics Senior Notes and the proceeds of $3,732 were deposited in an escrow account and constitute cash collateral held for the benefit of the 2025 Logistics Senior Notes. The indenture governing the 2025 Notes contains restrictive covenants that limit, among other things, the ability of the Co-Issuers and their restricted subsidiaries to incur additional indebtedness, pay dividends and make distributions on common and preferred stock, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants. The indenture governing the 2025 Notes also contains customary events of default.

The Logistics Co-Issuers were in compliance with the covenants as of June 30, 2023.

Navios Logistics Other Long-term Loans and Notes Payable

Navios Logistics currently pays interest on its notes payable at a rate equal to six-month LIBOR, which will convert to SOFR plus Credit Adjusted Spread (the "CAS"), effective July 1, 2023.The facilities are repayable in installments and have maturities ranging from November 2024 to March 2026. For additional information on the long-term loans to Navios Logistics, see the maturity table below.

The maturity table below reflects the principal payments for the next five years and thereafter of all borrowings of Navios Holdings (including Navios Logistics) outstanding as of June 30, 2023, based on the repayment schedules of the respective loan facilities and the outstanding amount due under the debt securities.

NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents: The carrying amounts reported in the consolidated balance sheets for interest bearing deposits and money market funds approximate their fair value because of the short maturity of these investments.

Restricted cash: The carrying amounts reported in the consolidated balance sheets for interest bearing deposits approximate their fair value because of the short maturity of these investments.

Convertible Debenture: The carrying amount of the Convertible Debenture approximates its fair value.

The estimated fair values of the Company's financial instruments are as follows:

As required by the fair value guidance, assets are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement.

As of June 30, 2023, and December 31, 2022, there were no assets measured at fair value on a recurring basis.

As of June 30, 2023, the Company's assets measured at fair value on a non-recurring basis are:

As of December 31, 2022, there were no assets measured at fair value on a non-recurring basis.

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:

Level I: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

Level II: Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.

Level III: Inputs that are unobservable.

NOTE 8: COMMITMENTS AND CONTINGENCIES

On July 22, 2016, Navios Logistics guaranteed the compliance of certain obligations related to two consolidated subsidiaries under their respective direct user agreements with the Free Zone of Nueva Palmira, for the amounts of $847and $519, respectively.

The Company is involved in a number of legal proceedings and has various unresolved claims pending arising in the ordinary course of business. Based on currently available information and the opinion of legal counsel, management believes that the final outcome will not have a significant effect on the Company's operating results or financial position and that no additional provisions over and above provisions already reflected in the interim condensed consolidated financial statements are required.

NOTE 9: TRANSACTIONS WITH RELATED PARTIES

As of June 30, 2023, the balance consisted mainly of payments to the Manager in accordance with the Administrative Services Agreement.

In the third quarter of 2022, the outstanding balance under NSM Loan I was fully repaid using cash received from the Transaction. Such repayment was mandatory as per the terms of the loan agreement.

In the third quarter of 2022, the outstanding balance under NSM Loan II was fully repaid using cash received from the Transaction. Such repayment was mandatory as per the terms of the loan agreement.

Navios Logistics' Shareholders Agreement: On November 19, 2019, Navios Holdings entered into a shareholder agreement with Peers Business Inc. granting certain protections to minority shareholders in certain events.

Navios Logistics has entered into an agreement with NSM with effect as of October 1, 2023, for the leasing of its global office spaces. The agreement has a term of five yearswith fees of $35.6per month for the first year of the contract increasing thereafter 5% per annum for years two to four and 3% for year five. The Conflicts Committee of Navios Logistics has approved the transaction.

NOTE 10: PREFERRED AND COMMON STOCK

Series I Preferred Stock

Series G and Series H American Depositary Shares Exchange Offer

On December 21, 2018, Navios Holdings announced that it commenced an offer to exchange cash and/or newly issued 2024 Notes for approximately 66 2/3% of each of the outstanding Series G American Depositary Shares ("Series G ADSs") and Series H American Depositary Shares ("Series H ADSs").

Vested, Surrendered and Forfeited

During the three- and six-month periods ended June 30, 2023, nilrestricted shares of common stock were forfeited and nilrestricted stock units issued to the Company's officers and directors vested.

Issuance of Cumulative Perpetual Preferred Stock

NOTE 11: OTHER INCOME/(EXPENSE), NET

NOTE 12: EARNINGS/(LOSS) PER COMMON SHARE

Basic earnings/(loss) per share is calculated by dividing net income attributable to Navios Holdings common stockholders by the weighted average number of shares of Navios Holdings outstanding (excluding restricted shares) during the periods presented. Diluted income per common share is calculated by applying the treasury stock method. All unvested restricted stock units that have a dilutive effect are included in the calculation. The basic and diluted earnings per share for the period are presented for each category of participating common shares under the two-class method. The as converted number of common shares under the Convertible Debenture are deemed participating securities. Earnings are only allocated to participating securities in a period of net income (including income from continued and discontinued operations).

Net income attributable to Navios Holdings common stockholders is calculated by adding to (if a discount) or deducting from (if a premium) net income/(loss) attributable to Navios Holdings common stockholders the difference between the fair value of the consideration paid upon redemption and the carrying value of the preferred stock, including the unamortized issuance costs of the preferred stock, and the amount of any undeclared dividend cancelled.

NOTE 13: INVESTMENT IN AFFILIATE COMPANY

Navios Partners

Following the results of the significance tests performed by the Company, it was concluded that Navios Partners met the significance threshold requiring summarized financial information.

Summarized financial information of the affiliate company is presented below:

NOTE 14: LEASES

Operating Leases

Time charter out contracts