UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES EXCHANGE ACT OF 1934

DATED: August 3, 2018

Commission File No. 001-33811

NAVIOS MARITIME PARTNERS L.P.

7 Avenue de Grande Bretagne, Office 11B2

Monte Carlo, MC 98000 Monaco

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F    ☒            Form 40-F  ☐

Yes  ☐            No  ☒

Yes  ☐            No  ☒

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐            No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

NAVIOS MARITIME PARTNERS L.P.

FORM 6-K

TABLE OF CONTENTS

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This Report on Form 6-K is hereby incorporated by reference into the Navios Maritime Partners L.P. Registration Statement on Form F-3, File No. 333-215529.

Operating and Financial Review and Prospects

The following is a discussion of the financial condition and results of operations for the three and six month periods ended June 30, 2018 and 2017 of Navios Maritime Partners L.P. (referred to herein as “we”, “us”, “Company” or “Navios Partners”). All of the financial statements have been stated 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 Partners’ 2017 Annual Report filed on Form 20-F with the U.S. Securities and Exchange Commission (the “SEC”) on April 4, 2018.

This Report 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 expectations including Navios Partners’ future distributions and its ability to sustain the revised distribution, opportunities to reinvest cash accretively in a fleet renewal program or otherwise 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. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Navios Partners at the time this filing was made. Although 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, uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles, our continued ability to enter into long-term time charters, our ability to maximize the use of our vessels, expected demand in the dry cargo shipping sector in general and the demand for our Panamax, Capesize, Ultra-Handymax and Containerships in particular, fluctuations in charter rates for dry cargo carriers and containerhips, the aging of our fleet and resultant increases in operation and dry docking costs, the loss of any customer or charter or vessel, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, increases in costs and expenses, 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 our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, potential liability from litigation and our vessel operations, including discharge of pollutants, general domestic and international political conditions, 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 Navios Partners’ filings with the SEC, including its annual and interim reports filed on Form 20-F and Form 6-K. 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. Navios Partners makes no prediction or statement about the performance of its common units.

Recent Developments

Drybulk Fleet

In July 2018, Navios Partners agreed to acquire the Navios Sphera, a 2016-built Panamax vessel of 84,872 dwt and the Navios Mars, a 2016-built Capesize vessel of 181,259 dwt from its affiliate, Navios Maritime Holdings Inc. for a purchase price of $79.0 million. These vessels are time chartered out on index-linked charters until January 2021 and February 2019, respectively.

The acquisition of the vessels is expected to be partially financed with a $44.0 million new term loan facility and the balance with available cash. The loan facility has an amortization profile of five years, matures in July 2023 and bears interest at LIBOR plus 290 bps per annum.

The transaction was approved by the Conflicts Committee of the Board of Directors of Navios Partners.

On June 7, 2018, Navios Partners took delivery of the Navios Altair I, a 2006-built Panamax vessel of 74,475 dwt, acquired from an unrelated third party for a purchase price of $11.0 million.

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On May 21, 2018, Navios Partners took delivery of the Navios Symmetry, a 2006-built Panamax vessel of 74,381 dwt, acquired from an unrelated third party, for a purchase price of $11.0 million.

On May 9, 2018, Navios Partners took delivery of the Navios Apollon I, a 2005-built Panamax vessel of 87,052 dwt, acquired from an unrelated third party, for a purchase price of approximately $13.0 million.

Sale of YM Unity and YM Utmost

On July 2, 2018, Navios Partners sold to its affiliate, Navios Maritime Containers Inc. (“Navios Containers”) the YM Unity and the YM Utmost, two 2006-built containerships of 8,204 TEU each, for a sale price of $67.0 million. The loss on sale of the vessels amounted to $37.9 million and was recognized in the second quarter of 2018. Navios Partners used a portion of the sale proceeds to repay $20.2 million of its outstanding debt. As a result of the sales, the YM Unity and the YM Utmost were released from security of the Term Loan B Facility. In exchange, four drybulk vessels and $4.0 million in cash substituted the two vessels as collateral to the Term Loan B Facility.

Sale of Containerships

On June 11, 2018, Navios Partners agreed to sell the Hyundai Hongkong, a 2006-built, 6,800 TEU containership to its affiliate, Navios Containers, for a sale price of approximately $36.0 million. The vessel is expected to be delivered to Navios Containers in the third quarter of 2018.

Navios Partners also granted options to Navios Containers to acquire four additional 2006-built, 6,800 TEU containerships (the Hyundai Singapore, the Hyundai Busan, the Hyundai Shanghai and the Hyundai Tokyo) for a purchase price of $36.0 million per vessel. Each of the four vessels are sister ships to the Hyundai Hongkong and have the same time charter employment in place.

All of the acquisitions are subject to certain conditions, and there can be no assurances that these acquisitions will occur in whole or in part.

The transaction was approved by the Conflicts Committee of the Board of Directors of Navios Partners.

Cash Distribution

The Board of Directors of Navios Partners declared a cash distribution for the second quarter of 2018 of $0.02 per unit. The cash distribution is payable on August 10, 2018 to all unitholders of record as of August 7, 2018.

Overview

Navios Partners is an international owner and operator of dry cargo vessels, formed on August 7, 2007 under the laws of the Republic of the Marshall Islands by Navios Maritime Holdings Inc. (“Navios Holdings”), a vertically integrated seaborne shipping and logistics company with over 60 years of operating history in the dry cargo shipping industry. Navios GP L.L.C. (the “General Partner”), a wholly owned subsidiary of Navios Holdings, was also formed on that date to act as the general partner of Navios Partners and received a 2.0% general partner interest in Navios Partners.

As of August 2, 2018, there were outstanding 167,589,764 common units and 3,420,203 general partnership units. Navios Holdings currently owns a 20.2% interest in Navios Partners, which includes the 2.0% general partner interest.

Fleet

Navios Partners’ fleet consists of 18 Panamax vessels, 14 Capesize vessels, three Ultra-Handymax vessels and five Containerships, including the Navios Sphera and the Navios Mars, which are expected to be delivered within the third quarter of 2018, one Panamax charter-in vessel, which is expected to be delivered within the second half of 2019, and excluding the YM Unity and the YM Utmost, which were sold on July 2, 2018.

In general, the vessels in our fleet are chartered-out under time charters, which range in length up to ten years at inception. From time to time, we operate vessels in the spot market until the vessels have been chartered under longer-term charters.

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The following table provides summary information about our fleet as of August 2, 2018:

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Our Charters

We generate revenues by charging our customers for the use of our vessels to transport their dry cargos. In general, the vessels in our fleet are chartered-out under time charters, which range in length up to ten years at inception. From time to time, we operate vessels in the spot market until the vessels have been chartered under longer-term charters.

For the six month period ended June 30, 2018, our customers representing 10% or more of total revenues were Hyundai Merchant Marine Co., Ltd. (“HMM”) and Yang Ming Marine Transport Corporation (“Yang Ming”) which accounted for approximately 25.3% and 11.3%, respectively, of total revenues. For the year ended December 31, 2017, our customers representing 10% or more of total revenues were HMM and Yang Ming, which accounted for 26.8% and 12.0%, respectively, of total revenues. We believe that the combination of the long-term nature of our charters (which provide for the receipt of a fixed fee for the life of the charter) and our management agreement with the Manager, (which provides for a fixed management fee until December 31, 2019), provides us with a strong base of stable cash flows.

Our revenues are driven primarily by the number of vessels in the fleet, the number of days during which such vessels operate and the amount of daily charter hire rates that the vessels earn under charters, which, in turn, are affected by a number of factors, including:

Time charters are available for varying periods, ranging from a single trip (spot charter) to long-term which may be many years. In general, a long-term time charter assures the vessel owner of a consistent stream of revenue. Operating the vessel in the spot market affords the owner greater spot market opportunity, which may result in high rates when vessels are in high demand or low rates when vessel availability exceeds demand. We intend to operate our vessels in the long-term charter market. Vessel charter rates are affected by world economics, international events, weather conditions, strikes, governmental policies, supply and demand and many other factors that might be beyond our control. Please read “Risk Factors” in our 2017 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

We could lose a customer or the benefits of a charter if:

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Under some of our time charters, either party may terminate the charter contract in the event of war in specified countries or in locations that would significantly disrupt the free trade of the vessel. Some of the time charters covering our vessels require us to return to the charterer, upon the loss of the vessel, all advances paid by the charterer but not earned by us.

Trends and Factors Affecting Our Future Results of Operations

We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Please read “Risk Factors” in our 2017 Annual Report on Form 20-F for a discussion of certain risks inherent in our business.

Results of Operations

Overview

The financial condition and the results of operations presented for the six month periods ended June 30, 2018 and 2017 of Navios Partners presented discussed below include the following entities:

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The accompanying interim condensed consolidated financial statements of Navios Partners are unaudited, but, in the opinion of management, contain all adjustments necessary to present a fair statement of results, in all material respects, of Navios Partners’ condensed consolidated financial position as of June 30, 2018 and the condensed consolidated results of operations for the three and six month periods ended June 30, 2018 and 2017. The footnotes are condensed as permitted by the requirements for interim financial statements and, accordingly, do not include information and disclosures required under U.S. GAAP for complete financial statements. All such adjustments are deemed to be of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in Navios Partners’ Annual Report on Form 20-F for the year ended December 31, 2017.

Fleet Employment Profile

The following table reflects certain key indicators of Navios Partners’ core fleet performance for the three and six month periods ended June 30, 2018 and 2017 (including 115 operating days of Navios Containers for the period from April 28, 2017 to June 30, 2017).

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FINANCIAL HIGHLIGHTS

As of August 29, 2017, Navios Containers was no longer consolidated and commenced being accounted for under the equity method of accounting. As Navios Containers had operations during the three and six month periods ended June 30, 2017, the table below includes the impact of Navios Containers in the consolidated financial results and selected financial data for such periods.

The following table presents consolidated revenue and expense information for the three and six month periods ended June 30, 2018 and 2017.

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Period over Period Comparisons

For the Three Month Period ended June 30, 2018 compared to the Three Month Period ended June 30, 2017

Time charter and voyage revenues: Time charter and voyage revenues for Navios Partners for the three month period ended June 30, 2018 increased by $11.3 million, or 24.0%, to $58.2 million, as compared to $46.9 million for the same period in 2017. The increase in time charter and voyage revenues was mainly attributable to: (i) the increase in revenue following the acquisition of seven vessels in 2017 and three vessels in 2018; and (ii) the increase in available days of the fleet to 3,366 days for the three month period ended June 30, 2018, as compared to 2,844 days for the three month period ended June 30, 2017, mainly due to the increased fleet. That increase was partially mitigated by the decrease in revenue due to the sales of the Navios Apollon and the Navios Gemini S in 2017.

Time charter and voyage revenues from Navios Containers for the period from April 28, 2017 (date of inception) to June 30, 2017 amounted to $3.1 million. Available days of the fleet were 115 days for the period from April 28, 2017 (date of inception) to June 30, 2017 and TCE for the period amounted to $26,968.

Time charter and voyage expenses: Time charter and voyage expenses for the three month period ended June 30, 2018 amounted to $2.8 million, as compared to $0 for the three month period ended June 30, 2017. The increase was mainly attributable to a: (i) $1.6 million increase in bunkers expenses; (ii) $0.6 million increase in loading and discharging port expenses related to the freight voyage in 2018; and (iii) $0.6 million increase in brokers’ commissions due to the increased fleet and other voyage expenses.

Direct vessel expenses: Direct vessel expenses, comprising of the amortization of dry dock and special survey costs of certain vessels in our fleet amounted to $1.5 million for the three month period ended June 30, 2018, as compared to $1.6 million for the three month period ended June 30, 2017.

Management fees: Management fees for the three month period ended June 30, 2018, increased by $1.9 million, or 12.4%, to $17.4 million, as compared to $15.5 million for the same period in 2017. The increase was mainly attributable to a: (i) $3.4 million increase in management fees paid to the Manager due to the increased number of owned vessels in Navios Partners’ fleet; and (ii) $0.1 million increase in management fees due to the increase in daily rate pursuant to the amended management agreement in November 2017. The increase was partially mitigated by a: (i) $0.5 million decrease in management fees due to the sale of two vessels in 2017; (ii) $0.7 million of management fees of Navios Containers for the period from April 28, 2017 (date of inception) to June 30, 2017; and (iii) $0.4 million of management fees for the five Containerships from Rickmers Trust for the period from May 25, 2017 to June 8, 2017.

General and administrative expenses: General and administrative expenses increased by $0.6 million to $5.5 million for the three month period ended June 30, 2018, as compared to $4.9 million for the three month period ended June 30, 2017. The increase was mainly due to a: (i) $0.1 million increase related to equity compensation expense; (ii) $0.2 million net increase in legal and professional fees, as well as audit fees and other administrative expenses; and (iii) $0.4 million increase in administrative fees paid to the Manager mainly due to the increased number of vessels in Navios Partners’ fleet. The increase was partially mitigated by a $0.1 million general and administrative expenses of Navios Containers included for the period from April 28, 2017 (date of inception) to June 30, 2017.

Depreciation and amortization: Depreciation and amortization amounted to $14.4 million for the three month period ended June 30, 2018, as compared to $18.7 million for the three month period ended June 30, 2017. The decrease of $4.3 million was mainly attributable to: (i) a $2.2 million decrease in amortization of the Navios Aurora II favorable lease intangible which was fully amortized during the fourth quarter of 2017; (ii) a $1.3 million amortization expense of Navios Containers intangibles for the period from April 28, 2017 (date of inception) to June 30, 2017; (iii) an $0.8 million amortization expense of the intangibles for the five MOL Containerships for the period from May 25, 2017 to June 8, 2017; (iv) an $0.8 million decrease in depreciation expense due to the committed sale of the YM Unity and the YM Utmost in July 2018; (v) a $0.6 million decrease in depreciation expense of one of our vessels as a result of the impairment test performed in the fourth quarter of the fiscal year 2017; and (vi) a $0.4 million decrease in depreciation expense due to the sale of the Navios Gemini S in December 2017. The above decrease was partially mitigated by a $1.7 million increase in depreciation expense due to the delivery of seven vessels in 2017 and three vessels in 2018.

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Depreciation of vessels is calculated using an estimated useful life of 25 and 30 years for drybulk and containerships, respectively, from the date the vessel was originally delivered from the shipyard. Intangible assets are amortized over the contract periods, which range from one to ten years, at inception.

Vessel impairment losses: An impairment loss of $37.9 million was recorded in relation to the YM Unity and the YM Utmost, which were held for sale as of June 30, 2018. There was no impairment loss for the corresponding interim period of the previous year. Navios Partners performed step one of the impairment assessment for the vessels as of December 31, 2017. The undiscounted projected net operating cash flows exceeded the carrying value together with the carrying value of deferred drydock and special survey costs related to these vessels.

Interest expense and finance cost, net: Interest expense and finance cost, net for the three month period ended June 30, 2018 increased by $2.6 million or 32.5% to $10.8 million, as compared to $8.1 million for the three month period ended June 30, 2017. The increase was mainly due to the increase of the weighted average interest rate for the three month period ended June 30, 2018 to 6.87% from 5.87% for the same period in 2017. Navios Partners’ average loan balance amounted to $506.7 million for the three month period ended June 30, 2018 as compared to $445.5 million for the same period of 2017.

Interest income: Interest income increased by $0.2 million to $1.0 million for the three month period ended June 30, 2018, as compared to $0.8 million for the three month period ended June 30, 2017.

Other income: Other income for the three month period ended June 30, 2018 amounted to $0.1 million, as compared to $2.9 million for the three month period ended June 30, 2017. The decrease was mainly attributable to a $3.0 million decrease in relation to the claims submitted under the Navios Holdings Guarantee agreement. The above decrease was partially mitigated by a $0.2 million increase in other miscellaneous income.

Other expense: Other expense for the three month period ended June 30, 2018 amounted to $0.3 million as compared to $0.5 million for the three month period ended June 30, 2017.

Equity in net earnings of affiliated companies: Equity net earnings of affiliated companies amounted to $1.6 million for the three month period ended June 30, 2018. The amount of $1.6 million mainly consisted of the income related to the investment in Navios Containers.

Net (loss)/ income: Net loss for the three month period ended June 30, 2018 amounted to $(29.5) million as compared to $4.4 million income for the three month period ended June 30, 2017. The decrease in net income of $34.0 million was due to the factors discussed above.

Net income attributable to the noncontrolling interest: Net income attributable to the noncontrolling interest amounted to $0.4 million for the three month period ended June 30, 2017.

Operating surplus: Navios Partners generated Operating Surplus for the three month period ended June 30, 2018 of $19.8 million, as compared to $22.4 million for the three month period ended June 30, 2017. 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 (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA, Operating Surplus and Available Cash for Distribution” contained herein).

Seasonality: Since Navios Partners’ vessels generally operate under period time charters ranging up to ten years, the results of operations are not generally subject to the effect of seasonable variations in demand.

For the Six Month Period ended June 30, 2018 compared to the Six Month Period ended June 30, 2017

Time charter and voyage revenues: Time charter and voyage revenues for Navios Partners for the six month period ended June 30, 2018 increased by $21.9 million, or 24.5%, to $111.2 million, as compared to $89.3 million for the same period in 2017. The increase in time charter and voyage revenues was mainly attributable to: (i) the increase in revenue following the acquisition of the seven vessels in 2017 and the three vessels in 2018; and (ii) the increase in TCE to $16,295 per day for the six month period ended June 30, 2018, from $15,593 per day for the six month period ended June 30, 2017 due to the increase in the freight market. That increase was partially mitigated by the decrease in revenue due to the sales of the MSC Cristina, the Navios Apollon and the Navios Gemini S in 2017. The available days of the fleet increased to 6,552 days for the six month period ended June 30, 2018, as compared to 5,639 days for the six month period ended June 30, 2017, mainly due to the increased fleet.

Time charter and voyage revenues from Navios Containers for the period from April 28, 2017 (date of inception) to June 30, 2017 amounted to $3.1 million. Available days of the fleet were 115 days for the period from April 28, 2017 (date of inception) to June 30, 2017 and TCE for the period amounted to $26,968.

Time charter and voyage expenses: Time charter and voyage expenses for the six month period ended June 30, 2018 increased by $3.1 million to $4.5 million, as compared to $1.4 million for the six month period ended June 30, 2017. The increase was mainly attributable to a: (i) $1.3 million increase in bunkers expenses; (ii) $1.1 million increase in loading and discharging port expenses related to the freight voyage in 2018; and (iii) $0.7 million increase in brokers’ commissions due to the increased fleet and other voyage expenses.

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Direct vessel expenses: Direct vessel expenses, comprising of the amortization of dry dock and special survey costs of certain vessels in our fleet, amounted to $3.2 million for the six month period ended June 30, 2018, as compared to $3.3 million for the six month period ended June 30, 2017.

Management fees: Management fees for the six month period ended June 30, 2018, increased by $4.3 million or 14.3% to $34.1 million, as compared to $29.8 million for the same period in 2017. The increase was mainly attributable to a: (i) $6.4 million increase in management fees paid to the Manager due to the increased number of owned vessels in Navios Partners’ fleet; and (ii) $0.3 million increase in management fees due to the increase in daily rate pursuant to the amended management agreement in November 2017. The increase was partially mitigated by a: (i) $1.3 million decrease in management fees due to the sale of three vessels in 2017; (ii) $0.7 million of management fees of Navios Containers for the period from April 28, 2017 (date of inception) to June 30, 2017; and (iii) $0.4 million of management fees for the five Containerships from Rickmers Trust for the period from May 25, 2017 to June 8, 2017.

General and administrative expenses: General and administrative expenses increased by $1.0 million or 12.0% to $9.0 million for the six month period ended June 30, 2018, as compared to $8.1 million for the six month period ended June 30, 2017. The increase was mainly due to a: (i) $0.3 million increase in equity compensation expense; (ii) $0.1 million net increase in legal and professional fees, as well as audit fees and other administrative expenses; and (iii) $0.7 million increase in administrative fees paid to the Manager mainly due to the increased number of vessels in Navios Partners’ fleet. The increase was partially mitigated by a $0.1 million general and administrative expenses of Navios Containers included for the period from April 28, 2017 (date of inception) to June 30, 2017.

Depreciation and amortization: Depreciation and amortization amounted to $29.3 million for the six month period ended June 30, 2018, as compared to $35.5 million for the six month period ended June 30, 2017. The decrease of $6.2 million was mainly attributable to: (i) a $4.3 million decrease in amortization of the Navios Aurora II favorable lease intangible which was fully amortized during the fourth quarter of 2017; (ii) a $1.3 million amortization expense of Navios Containers intangibles for the period from April 28, 2017 (date of inception) to June 30, 2017; (iii) an $0.8 million amortization expense of the intangibles for the five MOL Containerships for the period from May 25, 2017 to June 8, 2017; (iv) an $0.8 million decrease in depreciation expense due to the committed sale of the YM Unity and the YM Utmost in July 2018; (v) a $1.1 million decrease in depreciation expense due to the sale of two vessels in 2017; and (vi) a $1.2 million decrease in depreciation expense of one of our vessels as a result of the impairment test performed in the fourth quarter of the fiscal year 2017. The above decrease was partially mitigated by a $3.3 million increase in depreciation expense due to the delivery of seven vessels in 2017 and three vessels in 2018. Depreciation of vessels is calculated using an estimated useful life of 25 and 30 years for drybulk and containerships, respectively, from the date the vessel was originally delivered from the shipyard. Intangible assets are amortized over the contract periods, which range from one to ten years.

Vessel impairment losses: An impairment loss of $37.9 million was recorded in relation to the YM Unity and the YM Utmost, which were held for sale as of June 30, 2018. There was no impairment loss for the corresponding interim period of the previous year. Navios Partners performed step one of the impairment assessment for the vessels as of December 31, 2017. The undiscounted projected net operating cash flows exceeded the carrying value together with the carrying value of deferred drydock and special survey costs related to these vessels.

Interest expense and finance cost, net: Interest expense and finance cost, net for the six month period ended June 30, 2018 increased by $2.1 million or 11.6% to $20.6 million, as compared to $18.5 million for the six month period ended June 30, 2017. The increase was mainly due to a: (i) $4.7 million increase in interest expense related to Navios Partners’ credit facilities, mainly due to the increase of the weighted average interest rate for the six month period ended June 30, 2018 to 6.63% from 5.61% for the same period in 2017; and (ii) $0.2 million write-off of the deferred finance fees following the repayment of the DVB Credit Facility on July 2, 2018. The above increase was partially mitigated by a: (i) $2.2 million net decrease in the amortization of the deferred finance fees mainly due to the write-off of the deferred finance fees and discount following the refinancing of the Term Loan B Facility on March 14, 2017; and (ii) $0.5 million write-off of the deferred finance fees following the repayment of the April 2015 Credit Facility on January 12, 2017. Navios Partners’ average loan balance amounted to $507.9 million for the six month period ended June 30, 2018 as compared to $438.5 million for the same period of 2017.

Interest income: Interest income increased by $0.6 million to $1.9 million for the six month period ended June 30, 2018, as compared to $1.3 million for the six month period ended June 30, 2017.

Other income: Other income for the six month period ended June 30, 2018 amounted to $0.7 million as compared to $6.1 million for the six month period ended June 30, 2017. The decrease was mainly attributable to a $5.9 million decrease in relation to the claims submitted under the Navios Holdings Guarantee agreement. The above decrease was partially mitigated by a $0.5 million increase in other miscellaneous income.

Other expense: Other expense for the six month period ended June 30, 2018 amounted to $2.1 million as compared to $4.4 million for the six month period ended June 30, 2017. The decrease of $2.4 million was mainly attributable to a: (i) $1.5 million allowance for doubtful accounts; and (ii) $1.3 million loss related to the disposal of the MSC Cristina, both recognized in the first quarter of 2017. The above decrease was partially mitigated by a $0.4 million in other miscellaneous expenses.

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Equity in net earnings of affiliated companies: Equity net earnings of affiliated companies amounted to $2.7 million for the six month period ended June 30, 2018. The amount of $2.7 million mainly consisted of the income related to the investment in Navios Containers.

Net (loss): Net loss for the six month period ended June 30, 2018 amounted to $(24.1) million as compared to $(1.2) million for the six month period ended June 30, 2017. The increase in net loss of $22.8 million was due to the factors discussed above.

Net income attributable to the noncontrolling interest: Net income attributable to the noncontrolling interest amounted to $0.4 million for the six month period ended June 30, 2017.

Operating surplus: Navios Partners generated Operating Surplus for the six month period ended June 30, 2018 of $37.2 million, as compared to $39.9 million for the six month period ended June 30, 2017. 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 (See “Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA, Operating Surplus and Available Cash for Distribution” contained herein).

Seasonality: Since Navios Partners’ vessels generally operate under period time charters ranging up to ten years, the results of operations are not generally subject to the effect of seasonable variations in demand.

Liquidity and Capital Resources

In addition to distributions on our units, our primary short-term liquidity needs are to fund general working capital requirements, cash reserve requirements including those under our credit facilities and debt service, while our long-term liquidity needs primarily relate to expansion and investment capital expenditures and other maintenance capital expenditures and debt repayment. Expansion capital expenditures are primarily for the purchase or construction of vessels to the extent the expenditures increase the operating capacity of or revenue generated by our fleet, while maintenance capital expenditures primarily consist of drydocking expenditures and expenditures to replace vessels in order to maintain the operating capacity of or revenue generated by our fleet. Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital expenditures. We anticipate that our primary sources of funds for our short-term liquidity needs will be cash flows from our equity offerings, operations, proceeds from asset sales, long-term bank borrowings and other debt raisings. As of June 30, 2018, Navios Partners’ current assets totaled $137.9 million, while current liabilities totaled $71.8 million, resulting in a positive working capital position of $66.2 million. Generally, our long-term sources of funds derive from cash from operations, long-term bank borrowings and other debt or equity financings to fund acquisitions and expansion and investment capital expenditures, including opportunities we may pursue under the Omnibus Agreement. We cannot assure you that we will be able to secure adequate financing or to obtain additional funds on favorable terms, to meet our liquidity needs.

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 Partners does maintain cash deposits and equivalents in excess of government provided insurance limits. Navios Partners also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.

Navios Partners’ cash forecast indicates that it will generate sufficient cash during the next twelve months from August 2, 2018, to make the required principal and interest payments on its indebtedness, provide for the normal working capital requirements of the business and remain in a positive working capital position through twelve months from August 2, 2018.

Credit Facilities

As of June 30, 2018, the total borrowings, net of deferred finance fees and discount under the Navios Partners’ credit facilities, were $494.5 million.

Term Loan B Facility: In June 2013, Navios Partners completed the issuance of the $250.0 million Term Loan B Facility. On October 31, 2013 and November 1, 2013, Navios Partners completed the issuance of a $189.5 million add-on to its existing Term Loan B Facility.

On March 14, 2017, Navios Partners completed the issuance of a new $405.0 million Term Loan B Facility. The new Term Loan B Facility bears an interest rate of LIBOR plus 500 bps, it is set to mature on September 14, 2020 and is repayable in equal quarterly installments of 1.25% of the initial principal amount of the Term Loan B Facility. Navios Partners used the net proceeds of the new Term Loan B Facility to: (i) refinance its prior Term Loan B Facility; and (ii) pay fees and expenses related to the new Term Loan B Facility. Following the refinancing of the Term Loan B Facility, an amount of $1.9 million and $1.3 million, was written-off from the deferred finance fees and discount, respectively. On August 10, 2017, Navios Partners completed the issuance of a $53.0 million add-on to its existing Term Loan B Facility. The add-on to the new Term Loan B Facility bore the same terms as the Term Loan B Facility. Navios Partners used the net proceeds to partially finance the acquisition of three vessels.

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The Term Loan B Facility is secured by first priority mortgages covering certain vessels owned by subsidiaries of Navios Partners, in addition to other collateral, and guaranteed by each subsidiary of Navios Partners.

The Term Loan B Facility requires maintenance of a loan to value ratio of 0.8 to 1.0, and other restrictive covenants customary for facilities of this type (subject to negotiated exceptions and baskets), including restrictions on indebtedness, liens, acquisitions and investments, restricted payments and dispositions. The Term Loan B Facility also provides for customary events of default, prepayment and cure provisions.

As of June 30, 2018, the outstanding balance of the Term Loan B Facility was $421.3 million, net of discount of $8.7 million, and is repayable in eight quarterly installments of $5.7 million with a final payment of $384.1 million on the last repayment date. The final maturity date is September 14, 2020.

BNP Credit Facility: On June 26, 2017, Navios Partners entered into a new credit facility with BNP PARIBAS (the “BNP Credit Facility”) of up to $32.0 million (divided into two tranches) in order to finance a portion of the purchase price of the Navios Ace and the Navios Sol. On June 28, 2017, the first tranche of BNP Credit Facility of $17.0 million was drawn. On July 18, 2017, the second tranche of BNP Credit Facility of $15.0 million was drawn. As of June 30, 2018, the outstanding balance of the first and second tranche of the BNP Credit Facility was $29.2 million in total, of which the first tranche is repayable in 12 equal consecutive quarterly installments of $0.4 million each, with a final balloon payment of $10.8 million to be repaid on the last repayment date and the second tranche is repayable in 13 equal consecutive installments of $0.4 million each, with a final balloon payment of $8.3 million to be repaid on the last repayment date. The facility matures with respect to the first and second tranches in the second and third quarter of 2021, respectively, and bears interest at LIBOR plus 300 bps per annum.

DVB Credit Facility: On June 28, 2017, Navios Partners entered into a new credit facility with DVB Bank S.E. (the “DVB Credit Facility”) of up to $39.0 million (divided into four tranches) in order to refinance the Commerzbank/DVB Credit Facility dated July 2012 and an additional amount of $7.0 million to partially finance the acquisition of the Navios Prosperity I. The facility matures in the third and second quarter of 2020 and bears interest at LIBOR plus 310 bps per annum. The amounts of $7.0 million and $32.0 million were drawn on June 30, 2017 and November 3, 2017, respectively. As of June 30, 2018, the outstanding balance of the four tranches of the DVB Credit Facility was $34.7 million in total, of which the three of the four tranches are repayable in ten quarterly installments of between approximately $1.1 million and $1.5 million each, with a final balloon payment of $16.5 million to be repaid on the last repayment date and the fourth tranche is repayable in one quarterly installment of $0.33 million and seven equal consecutive installments of $0.25 million, with a final balloon of $3.6 million to be repaid on the last repayment date. On July 2, 2018, Navios Partners repaid the outstanding balance of the three tranches in the amount of $20.2 million, which was classified under the caption “Current portion of long-term debt, net” in the consolidated balance sheet as of June 30, 2018. Following this repayment, an amount of $0.2 million was written-off from the deferred finance fees as of June 30, 2018.

Nordea/Skandinaviska Enskilda/NIBC Credit Facility: On March 26, 2018, Navios Partners entered into a new credit facility with Nordea Bank AB, Skandinaviska Enskilda Banken AB and NIBC Bank N.V. (the “March 2018 Credit Facility”) of up to $14.3 million (divided into two tranches) in order to finance a portion of the purchase of the Navios Altair I and the Navios Symmetry. On May 18, 2018, the first tranche of the March 2018 Credit Facility of $7.15 million was drawn. On June 1, 2018 the second tranche of the March 2018 Credit Facility of $7.15 million was drawn. As of June 30, 2018, the outstanding balance of the March 2018 Credit Facility was $14.3 million and is repayable in 20 equal consecutive installments of $0.6 million, with a final balloon payment of $2.4 million to be repaid on the last repayment date. The facility matures in the second quarter of 2023 and bears interest at LIBOR plus 300 bps per annum.

ABN AMRO Credit Facility: On June 23, 2016, Navios Partners entered into a new credit facility with ABN AMRO Bank N.V. (the “June 2016 Credit Facility”) of up to $30.0 million to be used for general corporate purposes of the Borrower. The June 2016 Credit Facility bore interest at LIBOR plus 400 bps per annum. The final maturity date was January 30, 2017. On January 12, 2017, Navios Partners fully repaid the June 2016 Credit Facility. As of June 30, 2018, there was no outstanding amount under this facility.

HSH Credit Facility: On April 16, 2015, Navios Partners, through certain of its wholly-owned subsidiaries, entered into a term loan facility agreement of up to $164.0 million (divided into two tranches) with HSH Nordbank AG (the “April 2015 Credit Facility”), in order to finance a portion of the purchase price payable in connection with the acquisition of the MSC Cristina and one more super-post-panamax 13,100 TEU container vessel. On September 30, 2015, the second tranche of April 2015 Credit Facility of $83.0 million was cancelled. The final maturity date was April 20, 2022. On January 12, 2017, Navios Partners fully repaid the April 2015 Credit Facility. Following the repayment, an amount of $0.5 million was written-off from the deferred finance fees. As of June 30, 2018, there was no outstanding amount under this facility.

Amounts drawn under the credit facilities are secured by first preferred mortgages on certain Navios Partners’ vessels and other collateral and are guaranteed by the respective vessel-owning subsidiaries. The credit facilities contain a number of restrictive covenants that prohibit or limit Navios Partners from, among other things: incurring or guaranteeing indebtedness; entering into affiliate transactions; charging, pledging or encumbering the vessels; changing the flag, class, management or ownership of Navios Partners’ vessels; changing the commercial and technical management of Navios Partners’ vessels; selling or changing the beneficial ownership or control of Navios Partners’ vessels; not maintaining Navios Holdings’ (or its affiliates) ownership in Navios Partners of at least 15.0%; and subordinating the obligations under the credit facilities to any general and administrative costs relating to the vessels, including the fixed daily fee payable under the management agreement.

The credit facilities require compliance with a number of financial covenants, including: (i) maintain a required security amount ranging over 120% to 140%; (ii) minimum free consolidated liquidity in an amount equal to at least $0.7 million per owned vessel; (iii) maintain a ratio of EBITDA to interest expense of at least 2.00:1.00; (iv) maintain a ratio of total liabilities or total debt to total assets (as defined in our credit facilities) ranging of less than 0.75; and (v) maintain a minimum net worth to $135.0 million.

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It is an event of default under the credit facilities if such covenants are not complied with in accordance with the terms and subject to the prepayments or cure provisions of the facilities.

As of June 30, 2018, Navios Partners was in compliance with the financial covenants and/or the prepayments and/or the cure provisions, as applicable, in each of its credit facilities.

The following table presents cash flow information derived from the unaudited condensed consolidated statements of cash flows of Navios Partners for the six month periods ended June 30, 2018 and 2017.

Cash provided by operating activities for the six month period ended June 30, 2018 as compared to the cash provided by operating activities for the six month period ended June 30, 2017

Net cash provided by operating activities increased by $21.2 million to $31.3 million inflow for the six month period ended June 30, 2018, as compared to $10.1 million inflow for the same period in 2017.

Net loss increased by $22.8 million to a net loss of $(24.1) million for the six month period ended June 30, 2018, from a net loss of $(1.2) million for the six month period ended June 30, 2017. In determining net cash provided by operating activities for the six month ended June 30, 2018, net loss was adjusted for the effects of certain non-cash items, including $29.3 million depreciation and amortization, $37.9 million impairment loss in relation to the committed sale of the YM Unity and the YM Utmost held for sale, $6.2 million non-cash accrued interest income and amortization of deferred revenue, $0.1 million non-cash accrued interest income from receivable from affiliates, $3.6 million amortization and write-off of deferred finance costs and discount, $3.2 million amortization of deferred dry dock and special survey costs, $2.7 million equity in net earnings of affiliated companies and $1.2 million equity compensation expense. For the six month period ended June 30, 2017, net loss was adjusted for the effects of certain non-cash items, including $35.5 million depreciation and amortization, $6.2 million amortization and write-off of deferred financing cost and discount, $6.2 million non-cash accrued interest income and amortization of deferred revenue, $3.3 million amortization of deferred drydock and special survey costs, $1.5 million allowance for doubtful accounts, $1.3 million loss related to the disposal of the MSC Cristina, $0.9 million equity compensation expense, $0.1 million equity in net earnings of affiliated companies and $0.1 million non-cash accrued interest income from receivable from affiliates.

Accounts receivable decreased by $3.1 million, from $14.1 million at December 31, 2017, to $11.1 million at June 30, 2018 due to the decrease in amounts due from charterers.

Accounts payable amounted to $3.7 million as of June 30, 2018 and December 31, 2017, respectively.

Accrued expenses decreased by $1.7 million, from $8.8 million at December 31, 2017 to $7.1 million at June 30, 2018. The decrease was mainly attributable to a decrease in accrued legal and professional fees by $2.6 million, partially mitigated by an increase in accrued voyage expenses by $0.8 million and an increase in accrued loan interest by $0.1 million.

Deferred revenue primarily related to cash received from charterers prior to it being earned. Deferred revenue, net of commissions increased by $0.8 million from $3.0 million at December 31, 2017, to $3.8 million at June 30, 2018.

Amounts due from related parties consisted of management fees and drydocking expenses prepaid to Navios Holdings in accordance with the Management and Administrative Service agreements and the Navios Holdings Guarantee of up to $20.0 million. Amounts due from related parties increased by $10.3 million from $45.4 million at December 31, 2017, to $55.7 million at June 30, 2018.

Payments for dry dock and special survey costs incurred for certain vessels of the fleet in the six month period ended June 30, 2018 and December 31, 2017 were $1.0 million and $3.3 million, respectively.

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Cash used in investing activities for the six month period ended June 30, 2018 as compared to the cash used in investing activities for the six month period ended June 30, 2017

Net cash used in investing activities increased by $36.6 million to $48.4 million outflow for the six month period ended June 30, 2018, as compared to $11.8 million outflow for the same period in 2017.

Cash used in investing activities of $48.4 million for the six month period ended June 30, 2018 was mainly due to: (i) a $36.3 million paid for the acquisition of the Navios Apollon I, the Navios Symmetry and the Navios Altair I delivered within the second quarter of 2018; and (ii) a $14.5 million investment in Navios Containers on March 13, 2018. The above decrease was partially mitigated by a $2.3 million of proceeds from the note receivable related to the sale of the MSC Cristina.

Cash used in investing activities of $11.8 million for the six month period ended June 30, 2017 was mainly due to: (i) $109.7 million proceeds from the sale of the MSC Cristina and the Navios Apollon; (ii) a $8.6 million loan granted to Navios Europe (II) Inc. (“Navios Europe II”); (iii) a $0.3 million loan granted to Navios Europe Inc. (“Navios Europe I”); (iv) a $4.1 million payment for the transfer to Navios Partners the rights of Navios Holdings on the Navios Europe I Term Loans and Revolving Loans; (v) $2.3 million proceeds from the note receivable related to the sale of the MSC Cristina; (vi ) $9.9 million deposits for the acquisition of three vessels; and (vii) $101.1 million paid for the acquisition of the Navios Ace, the Navios Prosperity I and the five Containerships from Rickmers Trust.

Cash provided by financing activities for the six month period ended June 30, 2018 as compared to cash provided by financing activities for the six month period ended June 30, 2017

Net cash provided by financing activities decreased by $34.4 million to $28.2 million inflow for the six month period ended June 30, 2018, as compared to $62.6 million inflow for the same period in 2017.

Cash provided by financing activities of $28.2 million for the six month period ended June 30, 2018 was due to: (i) $34.2 million of proceeds from the issuance of 18,422,000 common units and 375,959 additional general partner units, net of offering costs, related to the public offering in February 21, 2018; and (ii) $14.3 million of proceeds from the March 2018 Credit Facility. This overall increase was partially offset by: (i) loan repayments of $16.7 million; (ii) a payment of a total cash distribution of $3.4 million; and (iii) a payment of $0.2 million of deferred finance fees relating to the March 2018 Credit Facility.

Cash used in financing activities of $62.6 million for the six month period ended June 30, 2017 was due to: (i) loan repayments of $497.1 million; (ii) a payment of $7.2 million of deferred finance fees relating to the refinancing of the Term Loan B Facility and the new Credit Facilities; and (iii) $0.1 million issuance cost relating to the transfer of Navios Europe I Loans. This overall decrease was partially offset by: (i) proceeds of $449.4 million from the Term Loan B Facility, net of discount and the new Credit Facilities; (ii) $98.2 million of proceeds from the issuance of 47,795,000 common units and 975,408 additional general partner units, net of offering costs, related to the public offering in March, 2017; (iii) $2.6 million of proceeds from the issuance of 1,200,442 common units and 24,498 additional general partner units related to the Continuous Offering Program Sales Agreement; (iv) $0.5 million issuance cost for the issuance of 266,876 additional general partner units relating to the transfer of Navios Europe I Loans; and (v) $17.3 million of proceeds from noncontrolling interest.

Reconciliation of EBITDA and Adjusted EBITDA to Net Cash from Operating Activities, EBITDA, Operating Surplus and Available Cash for Distribution

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EBITDA and Adjusted EBITDA

EBITDA represents net (loss)/ income attributable to Navios Partners’ unitholders before interest and finance costs, before depreciation and amortization (including intangible accelerated amortization) and income taxes. Adjusted EBITDA represents EBITDA before equity compensation expense, loss on sale of vessel, impairment losses and allowance for doubtful accounts, reactivation costs and gain on change in control. Navios Partners uses Adjusted EBITDA as a liquidity measure and reconcile EBITDA and Adjusted EBITDA to net cash provided by/(used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA in this document is calculated as follows: net cash provided by/(used in) operating activities adding back, when applicable and as the case may be, the effect of (i) net (increase)/decrease in operating assets, (ii) net (decrease)/increase in operating liabilities, (iii) net interest cost, (iv) amortization and write-off of deferred finance charges and other related expenses, (v) allowance for doubtful accounts, (vi) equity in net earnings of affiliated companies, (vii) payments for dry dock and special survey costs, (viii) gain/(loss) on sale of assets/subsidiaries, (ix) impairment charges, (x) non-cash accrued interest income and amortization of deferred revenue, (xi) gain/(loss) on debt repayments, (xii) equity compensation expense, (xiii) gain on change in control; (xiv) noncontrolling interest; and (xv) non-cash accrued interest income from receivable from affiliates. Navios Partners believes that EBITDA and Adjusted EBITDA are each the basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Partners’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and make cash distributions. Navios Partners also believes that EBITDA and Adjusted EBITDA are used: (i) by 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.

EBITDA and Adjusted EBITDA have limitations as an analytical tool, and should not be considered in isolation or as a substitute for the analysis of Navios Partners’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of Navios Partners’ performance. Furthermore, our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

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EBITDA of Navios Partners for the three month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; and (ii) $0.6 million equity compensation expense. EBITDA of Navios Partners for the three month period ended June 30, 2017 was negatively affected by the accounting effect of a $0.5 million equity compensation expense. Excluding these items, Adjusted EBITDA increased by $4.4 million to $34.7 million for the three month period ended June 30, 2018, as compared to $30.3 million for the same period in 2017. The increase in Adjusted EBITDA was primarily due to: (i) an $11.3 million increase in revenue; (ii) a $0.3 million decrease in other expenses; and (iii) a $1.6 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $2.8 million increase in time charter and voyage expenses; (ii) $2.6 million increase in management fees due to the increased fleet; (iii) $0.6 million increase in general and administrative expenses; and (iv) $2.8 million decrease in other income.

EBITDA of Navios Containers was $2.3 million for the period from April 28, 2017 (date of inception) to June 30, 2017.

EBITDA of Navios Partners for the six month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; and (ii) $1.2 million equity compensation expense. EBITDA of Navios Partners for the six month period ended June 30, 2017 was negatively affected by the accounting effect of a: (i) $1.5 million allowance for doubtful accounts; (ii) $1.3 million loss related to the sale of the MSC Cristina and; (iii) $0.9 million equity compensation expense. Excluding these items, Adjusted EBITDA increased by $10.0 million to $66.2 million for the six month period ended June 30, 2018, as compared to $56.2 million for the same period in 2017. The increase in Adjusted EBITDA was primarily due to a: (i) $21.9 million increase in revenue; and (ii) $2.7 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $3.1 million increase in time charter and voyage expenses; (ii) $5.0 million increase in management fees due to the increased fleet; (iii) $0.8 million increase in general and administrative expenses; (iv) $5.3 million decrease in other income; and (v) $0.4 million increase in other expenses.

EBITDA of Navios Containers was $2.3 million for the period from April 28, 2017 (date of inception) to June 30, 2017.

Operating Surplus

Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense, non-cash interest income, equity compensation expense, estimated maintenance and replacement capital expenditures and one-off items. 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.

Available Cash

Available Cash generally means, for each fiscal quarter, all cash on hand at the end of the quarter:

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 U.S. GAAP and should not be considered as an alternative to net income or any other indicator of Navios Partners’ performance required by U.S. GAAP.

Borrowings

Navios Partners’ long-term third party borrowings are presented under the caption “Long-term debt, net” and “Current portion of long-term debt, net”. As of June 30, 2018 and December 31, 2017, total debt, net amounted to $494.5 million and $493.5 million, respectively. The current portion of long-term debt, net amounted to $45.0 million and $26.6 million at each of June 30, 2018 and December 31, 2017, respectively.

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Capital Expenditures

Navios Partners finances its capital expenditures with cash flow from operations, equity raisings, long-term bank borrowings and other debt raisings. Capital expenditures for each of the six month periods ended June 30, 2018 and 2017 amounted to $36.3 million and $11.8 million, respectively. The reserves for estimated maintenance and replacement capital expenditures for the three and six month periods ended June 30, 2018 were $6.4 million and $12.4 million, respectively. The reserves for estimated maintenance and replacement capital expenditures for the three and six month periods ended June 30, 2017 were $3.5 million and $6.7 million, respectively.

Maintenance for our vessels and expenses related to drydocking expenses are reimbursed at cost by Navios Partners to our Manager under the amended management agreement. In October 2011, Navios Partners extended the duration of its existing Management Agreement with the Manager until December 31, 2017. In each of October 2013, August 2014, February 2015 and February 2016, Navios Partners amended its existing Management Agreement with the Manager to fix the fees for ship management services of its owned fleet, excluding drydocking expenses, which are reimbursed at cost by Navios Partners at: (a) $4,100 daily rate per Ultra-Handymax vessel; (b) $4,200 daily rate per Panamax vessel; (c) $5,250 daily rate per Capesize vessel; (d) $6,700 daily rate per Containership of TEU 6,800; (e) $7,400 daily rate per Containership of more than TEU 8,000; and (f) $8,750 daily rate per very large Containership of more than TEU 13,000 through December 31, 2017. In November 2017, Navios Partners extended the duration of its existing Management Agreement with the Manager until December 31, 2022 and the fixed rate for ship management services of its owned fleet through December 31, 2019, effective from January 1, 2018. The management fees, excluding drydocking expenses will be: (a) $4,225 daily rate per Ultra-Handymax vessel; (b) $4,325 daily rate per Panamax vessel; (c) $5,250 daily rate per Capesize vessel; (d) $6,700 daily rate per Containership of TEU 6,800; (e) $7,400 daily rate per Containership of more than TEU 8,000; and (f) $8,750 daily rate per very large Containers vessel of more than TEU 13,000.

Maintenance and Replacement Capital Expenditures Reserve

We estimate that our annual replacement reserve for the year ending December 31, 2018 will be approximately $25.3 million, for replacing our vessels at the end of their useful lives.

The amount for estimated replacement capital expenditures attributable to future vessel replacement was based on the following assumptions: (i) current market price to purchase a five year old vessel of similar size and specifications; (ii) a 25-year useful life for drybulk vessels and a 30-year useful life for containerships; and (iii) a relative net investment rate.

The amount for estimated maintenance capital expenditures attributable to future vessel drydocking and special survey was based on certain assumptions including the remaining useful life of the owned vessels of our fleet, market costs of drydocking and special survey and a relative net investment rate.

Our Board of Directors, with the approval of the Conflicts Committee, may determine that one or more of our assumptions should be revised, which could cause our Board of Directors to increase or decrease the amount of estimated maintenance and replacement capital expenditures. The actual cost of replacing the vessels in our fleet will depend on a number of factors, including prevailing market conditions, charter hire rates and the availability and cost of financing at the time of replacement. We may elect to finance some or all of our maintenance and replacement capital expenditures through the issuance of additional common units, which could be dilutive to existing unitholders.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations and Contingencies

The following table summarizes our long-term contractual obligations as of June 30, 2018.

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Navios Holdings, Navios Maritime Acquisition Corporation (“Navios Acquisition”) and Navios Partners have made available to Navios Europe I revolving loans up to $24.1 million to fund working capital requirements (collectively, the “Navios Revolving Loans I”). As of June 30, 2018, there was no amount undrawn under the Navios Revolving Loans I (see Note 13 — Transactions with related parties and affiliates).

Navios Holdings, Navios Acquisition and Navios Partners have made available to Navios Europe II revolving loans up to $43.5 million to fund working capital requirements (collectively, the “Navios Revolving Loans II”). In March 2017, the availability under the Navios Revolving Loans II was increased by $14.0 million. As of June 30, 2018, the amounts undrawn from the Navios Revolving Loans II were $15.0 million, of which Navios Partners may be required to fund an amount ranging from $0 to $15.0 million (see Note 13 — Transactions with related parties and affiliates).

Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy

There is no guarantee that unitholders will receive quarterly distributions from us and beginning with the quarter ending December 31, 2015, our Board of Directors elected to suspend distributions on our common units in order to preserve cash and improve our liquidity. In March 2018, the Company’s Board of Directors announced a new distribution policy under which it intends to pay quarterly cash distribution in the amount of $0.02 per unit, or $0.08 annually. The Company announced the first quarterly distribution of $0.02 per unit for the first quarter of 2018, which was paid on May 14, 2018 to unitholders of record as of May 10, 2018. On July 25, 2018, the Company announced the quarterly distribution of $0.02 per unit for the second quarter of 2018. The cash distribution is payable on August 10, 2018 to all unitholders of record as of August 7, 2018.

Our distribution policy is subject to certain restrictions and may be changed at any time, including:

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Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute funds to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, the provisions of existing and future indebtedness, applicable partnership and limited liability company laws and other laws and regulations.

Quarterly Distribution

There is no guarantee that we will pay the quarterly distribution on the common units in any quarter. The amount of distributions paid under our policy and the decision to make any distribution is determined by our Board of Directors, taking into consideration the terms of our partnership agreement. We are prohibited from making any distributions to unitholders if it would cause an event of default, or an event of default exists, under our existing credit facilities.

Quarterly distributions were paid by the Company through September 2015. For the quarter ended December 31, 2015, the Company’s Board of Directors determined to suspend payment of the Company’s quarterly distributions in order to preserve cash and improve our liquidity. In March 2018, the Company’s Board of Directors announced a new distribution policy under which it intends to pay quarterly cash distribution in the amount of $0.02 per unit, or $0.08 annually. The Company announced the first quarterly distribution of $0.02 per unit for the first quarter of 2018, which was paid on May 14, 2018 to unitholders of record as of May 10, 2018. On July 25, 2018, the Company announced the quarterly distribution of $0.02 per unit for the second quarter of 2018. The cash distribution is payable on August 10, 2018 to all unitholders of record as of August 7, 2018.

Incentive Distribution Rights

The following description of our incentive distribution rights reflects such rights in the event the distributions are reinstated and the indicated levels are achieved, of which there can be no assurance. Incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of available cash from Operating Surplus after the minimum quarterly distribution and the target distribution levels have been achieved. Our general partner currently holds the incentive distribution rights, but may transfer these rights separately from its general partner interest, subject to restrictions in the partnership agreement.

The following table illustrates the percentage allocations of the additional available cash from Operating Surplus among the unitholders and our general partner up to the various target distribution levels. The amounts set forth under “Marginal Percentage Interest in Distributions” are the percentage interests of the unitholders and our general partner in any available cash from Operating Surplus we distribute up to and including the corresponding amount in the column “Total Quarterly Distribution Target Amount,” until available cash from Operating Surplus we distribute reaches the next target distribution level, if any. The percentage interests shown for the unitholders and our general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution. The percentage interests shown for our general partner assume that our general partner maintains its 2.0% general partner interest and assume our general partner has not transferred the incentive distribution rights.

Related Party Transactions

Management fees: Pursuant to the amended Management Agreement, in each of October 2013, August 2014, February 2015 and February 2016, the Manager, a wholly owned subsidiary of Navios Holdings, provides commercial and technical management services to Navios Partners’ vessels for a daily fee of: (a) $4,100 daily rate per Ultra-Handymax vessel; (b) $4,200 daily rate per Panamax vessel; (c) $5,250 daily rate per Capesize vessel; (d) $6,700 daily rate per Containership of TEU 6,800; (e) $7,400 daily rate per Containership of more than TEU 8,000; and (f) $8,750 daily rate per very large Containership of more than TEU 13,000 through December 31, 2017. On November 14, 2017, Navios Partners agreed to extend the duration of its existing Management Agreement with the Manager until December 31, 2022 and to fix the rate for shipmanagement services of its owned fleet through December 31, 2019, effective from January 1, 2018. The new management fees, excluding drydocking expenses which are reimbursed at cost by Navios Partners, are: (a) $4,225 daily rate per Ultra-Handymax vessel; (b) $4,325 daily rate per Panamax vessel; (c) $5,250 daily rate per Capesize vessel; (d) $6,700 daily rate per Containership of TEU 6,800; (e) $7,400 daily rate per Containership of more than TEU 8,000 and (f) $8,750 daily rate per very large Containership of more than TEU 13,000. Drydocking expenses under this agreement are reimbursed by Navios Partners at cost at occurrence. Effective August 31, 2016, Navios Partners could, upon request to Navios Holdings, partially or fully defer the reimbursement of dry docking and other extraordinary fees and expenses under the Management Agreement to a later date, but not later than January 5, 2018, and if reimbursed on a later date, such amounts would bear interest at a rate of 1% per annum over LIBOR.

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Total management fees for the three and six month periods ended June 30, 2018 amounted to $17.4 million and $34.1 million, respectively. Total management fees for the three and six month periods ended June 30, 2017 amounted to $15.5 million and $29.8 million, respectively.

General and administrative expenses: Pursuant to the Administrative Services Agreement, the Manager also provides administrative services to Navios Partners, which include bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical services, banking and financial services, advisory services, client and investor relations and other. The Manager is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Navios Partners extended the duration of its existing Administrative Services Agreement with the Manager, until December 31, 2022.

Total general and administrative expenses charged by Navios Holdings for the three and six month periods ended June 30, 2018 amounted to $2.3 million and $4.6 million, respectively. Total general and administrative expenses charged by Navios Holdings for the three and six month periods ended June 30, 2017 amounted to $2.0 million and $3.9 million, respectively.

Balance due from related parties (excluding Navios Europe I and Navios Europe II): Balance due from related parties as of June 30, 2018 and December 31, 2017 amounted to $52.3 million and $43.1 million, respectively, of which the current receivable was $8.3 million and the long-term receivable was $44.0 million. The balance mainly consisted of management fees, drydocking expenses prepaid to Navios Holdings in accordance with the Management Agreement and the Navios Holdings Guarantee of up to $20.0 million, of which the fair value was estimated at $19.4 million as of June 30, 2018.

Vessel Chartering: In November 2016, Navios Partners entered into a charter with a subsidiary of Navios Holdings for the Navios Fulvia, a 2010-built Capesize vessel. The term of this charter was approximately three months that commenced in November 2016, at a net daily rate of $11,500. The vessel was redelivered as of February 2017.

Total loss of Navios Partners from the subsidiaries of Navios Holdings for the three and six month periods ended June 30, 2018 amounted to $0. Total revenue of Navios Partners from the subsidiaries of Navios Holdings for the three and six month periods ended June 30, 2017 amounted to $0.03 million and $0.6 million, respectively.

Vessel acquisitions: In July 2018, Navios Partners agreed to acquire the Navios Sphera, a 2016-built Panamax vessel of 84,872 dwt and the Navios Mars, a 2016-built Capesize vessel of 181,259 dwt from its affiliate, Navios Maritime Holdings Inc. for a purchase price of $79.0 million. These vessels are time chartered out on index-linked charters until January 2021 and February 2019, respectively.

Share Purchase Agreements: On February 4, 2015, Navios Partners entered into a share purchase agreement with Navios Holdings pursuant to which Navios Holdings made an investment in Navios Partners by purchasing common units, and general partnership interests.

Registration Rights Agreement: On February 4, 2015, in connection with the share purchase agreement as discussed above, Navios Partners entered into a registration rights agreement with Navios Holdings pursuant to which Navios Partners provided Navios Holdings with certain rights relating to the registration of the common units.

Balance due from Navios Europe I: Navios Holdings, Navios Acquisition and Navios Partners have made available to Navios Europe I revolving loans up to $24.1 million to fund working capital requirements (collectively, the “Navios Revolving Loans I”) (see Note 15 — Investment in Affiliates). The Navios Revolving Loans I and the Navios Term Loans I earn interest and an annual preferred return, respectively, at 12.7% per annum, on a quarterly compounding basis and are repaid from free cash flow (as defined in the loan agreement) to the fullest extent possible at the end of each quarter.

As of June 30, 2018, Navios Partners’ portion of the outstanding amount relating to portion of the investment in Navios Europe I (5.0% of the $10.0 million) was $0.5 million, under the caption “Investment in affiliates” and the outstanding amount relating to the Navios Revolving Loans I capital was $1.2 million (December 31, 2017: $1.2 million), under the caption “Loans receivable from affiliates”. The accrued interest income earned under the Navios Revolving Loans I was $0.6 million (December 31, 2017: $0.5 million) under the caption “Balance due from related parties” and the accrued interest income earned under the Navios Term Loans I was $0.4 million (December 31, 2017: $0.3 million) under the caption “Loans receivable from affiliates”. As of June 30, 2018, there was no amount undrawn under the Navios Revolving Loans I.

Balance due from Navios Europe II: Navios Holdings, Navios Acquisition and Navios Partners have made available to Navios Europe II revolving loans up to $43.5 million to fund working capital requirements (collectively, the “Navios Revolving Loans II”). In March 2017, the availability under the Navios Revolving Loans II was increased by $14.0 million (see Note 15 — Investment in Affiliates). The Navios Revolving Loans II and the Navios Term Loans II each earn interest and an annual preferred return at 18% per annum, on a quarterly compounding basis and are repaid from free cash flow (as defined in the loan agreement) to the fullest extent possible at the end of each quarter.

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As of June 30, 2018, Navios Partners’ portion of the outstanding amount relating to portion of the investment in Navios Europe II (5.0% of the $14.0 million) was $0.7 million, under the caption “Investment in affiliates” and the outstanding amount relating to the Navios Revolving Loans II capital was $9.8 million (December 31, 2017: $9.8 million), under the caption “Loans receivable from affiliates”. The accrued interest income earned under the Navios Revolving Loans II was $2.9 million (December 31, 2017: $1.8 million) under the caption “Balance due from related parties” and the accrued interest income earned under the Navios Term Loans II was $0.5 million (December 31, 2017: $0.4 million) under the caption “Loans receivable from affiliates”. As of June 30, 2018, the amount undrawn under the Navios Revolving Loans II was $15.0 million, of which Navios Partners may be required to fund an amount ranging from $0 to $15.0 million.

Note receivable from affiliates: On March 17, 2017, Navios Holdings transferred to Navios Partners its rights to the fixed 12.7% interest on the Navios Europe I Navios Term Loans I and Navios Revolving Loans I (including the respective accrued receivable interest) in the amount of $33.5 million, which included a cash consideration of $4.1 million and 13,076,923 newly issued common units of Navios Partners. At the date of this transaction, the Company recognized a receivable at the fair value of its newly issued common units totaling to $29.4 million based on the closing price of $2.25 per unit as of March 16, 2017 given as consideration (see Note 9 — Issuance of Units). The receivable relating to the consideration settled with the issuance of 13,076,923 Navios Partners’ common units in the amount of $29.4 million has been classified contra equity within the consolidated Statements of Changes in Partners’ Capital as “Note receivable”. The receivable from Navios Holdings is payable on maturity in December 2023 and Navios Partners will receive approximately $50.9 million. Interest will accrue through maturity and will be recognized within “Interest income” for the receivable relating to the cash consideration of $4.1 million. As of June 30, 2018, the long-term note receivable from Navios Holdings amounted to $4.4 million (including the non-cash interest income of $0.3 million), presented under the caption “Note receivable from affiliates”. Navios Partners may require Navios Holdings, under certain conditions, to repurchase the loans after the third anniversary of the date of the transaction based on the then outstanding balance of the loans.

Others: Navios Partners has entered into an omnibus agreement with Navios Holdings (the “Partners Omnibus Agreement”) in connection with the closing of Navios Partners’ IPO governing, among other things, when Navios Holdings and Navios Partners may compete against each other as well as rights of first offer on certain drybulk carriers. Pursuant to the Partners Omnibus Agreement, Navios Partners generally agreed not to acquire or own Panamax or Capesize drybulk carriers under time charters of three or more years without the consent of an independent committee of Navios Partners. In addition, Navios Holdings has agreed to offer to Navios Partners the opportunity to purchase vessels from Navios Holdings when such vessels are fixed under time charters of three or more years.

Navios Partners entered into an omnibus agreement with Navios Acquisition and Navios Holdings (the “Acquisition Omnibus Agreement”) in connection with the closing of Navios Acquisition’s initial vessel acquisition, pursuant to which, among other things, Navios Holdings and Navios Partners agreed not to acquire, charter-in or own liquid shipment vessels, except for containerships and vessels that are primarily employed in operations in South America, without the consent of an independent committee of Navios Acquisition. In addition, Navios Acquisition, under the Acquisition Omnibus Agreement, agreed to cause its subsidiaries not to acquire, own, operate or charter drybulk carriers subject to specific exceptions. Under the Acquisition Omnibus Agreement, Navios Acquisition and its subsidiaries granted to Navios Holdings and Navios Partners, a right of first offer on any proposed sale, transfer or other disposition of any of its drybulk carriers and related charters owned or acquired by Navios Acquisition. Likewise, Navios Holdings and Navios Partners agreed to grant a similar right of first offer to Navios Acquisition for any liquid shipment vessels it might own. These rights of first offer will not apply to a (i) sale, transfer or other disposition of vessels between any affiliated subsidiaries, or pursuant to the terms of any charter or other agreement with a counterparty, or (ii) merger with or into, or sale of substantially all of the assets to, an unaffiliated third party.

In connection with the Navios Maritime Midstream Partners L.P. (“Navios Midstream”) initial public offering and effective November 18, 2014, Navios Partners entered into an omnibus agreement with Navios Midstream, Navios Acquisition and Navios Holdings pursuant to which Navios Acquisition, Navios Holdings and Navios Partners have agreed not to acquire or own any VLCCs, crude oil tankers, refined petroleum product tankers, LPG tankers or chemical tankers under time charters of five or more years and also providing rights of first offer on certain tanker vessels.

In connection with the Navios Containers private placement and listing on the Norwegian over-the-counter market effective June 8, 2017, Navios Partners entered into an omnibus agreement with Navios Containers, Navios Holdings, Navios Acquisition and Navios Midstream (the “Navios Containers Omnibus Agreement”), pursuant to which Navios Partners, Navios Holdings, Navios Acquisition and Navios Midstream have granted to Navios Containers a right of first refusal over any containerships to be sold or acquired in the future. The omnibus agreement contains significant exceptions that will allow Navios Partners, Navios Holdings, Navios Acquisition and Navios Midstream to compete with Navios Containers under specified circumstances.

On November 15, 2012 (as amended in March 2014), Navios Holdings and Navios Partners entered into an agreement (the “Navios Holdings Guarantee”) by which Navios Holdings will provide supplemental credit default insurance with a maximum cash payment of $20.0 million. The final settlement of the amount due will take place at anytime but in no case later than December 31, 2019, in accordance with a letter of agreement effective as of December 29, 2017. During each of the three and six month periods ended June 30, 2018, the Company did not submit any claims to Navios Holdings for charterers’ default under this agreement. During each of the three and six month periods ended June 30, 2017, the Company submitted claims to Navios Holdings for charterers’ default under this agreement for a total amount in each period of $2.3 million and $4.5 million, respectively, net of applicable deductions, of which $2.4 million and $4.8 million, respectively, was recorded as “Other income”. As of June 30, 2018, the Company recognized the fair value of the claim amounted to $19.4 million, including accrued interest and discount unwinding of $0.1 million and $0.2 million for the three and six month periods ended June 30, 2018, respectively, presented under the caption “Amounts due from related parties-long term” in the balance sheet.

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As of June 30, 2018, Navios Holdings held an 18.2% common unit interest in Navios Partners, represented by 31,053,233 common units and it also held a general partner interest of 2.0%.

Quantitative and Qualitative Disclosures about Market Risks

Foreign Exchange Risk

Our functional and reporting currency is the U.S. dollar. We engage in worldwide commerce with a variety of entities. Although our operations may expose us to certain levels of foreign currency risk, our transactions are predominantly U.S. dollar denominated. Transactions in currencies other than U.S. dollars are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated, are recognized.

Interest Rate Risk

Borrowings under our credit facilities bear interest at rate based on a premium over U.S. $ LIBOR. Therefore, we are exposed to the risk that our interest expense may increase if interest rates rise. For the six month period ended June 30, 2018, we paid interest on our outstanding debt at a weighted average interest rate of 6.63%. A 1% increase in LIBOR would have increased our interest expense for the six month period ended June 30, 2018 by $2.6 million. For the six month period ended June 30, 2017, we paid interest on our outstanding debt at a weighted average interest rate of 5.61%. A 1% increase in LIBOR would have increased our interest expense for the six month period ended June 30, 2017 by $2.2 million.

Concentration of Credit Risk

Financial instruments, which potentially subject us to significant concentrations of credit risk, consist principally of trade accounts receivable. We closely monitor our exposure to customers for credit risk. We have policies in place to ensure that we trade with customers with an appropriate credit history.

For the six month period ended June 30, 2018, our customers representing 10% or more of total revenues were HMM and Yang Ming which accounted for approximately 25.3% and 11.3%, respectively, of total revenues. For the year ended December 31, 2017, Navios Partners’ customers representing 10% or more of total revenues were HMM and Yang Ming which accounted for approximately 26.8% and 12.0%, respectively, of total revenues. No other customers accounted for 10% or more of total revenue for any of the years presented.

Following the termination of the credit default insurance through its third party insurer, Navios Partners entered into an agreement (the “Navios Holdings Guarantee”) by which Navios Holdings will provide supplemental credit default insurance with a maximum cash payment of $20.0 million. The final settlement of the amount due will take place at anytime but in no case later than December 31, 2019, in accordance with a letter of agreement effective as of December 29, 2017. During each of the three and six month periods ended June 30, 2018, the Company did not submit any claims to Navios Holdings for charterers’ default under this agreement. During each of the three and six month periods ended June 30, 2017, the Company submitted claims to Navios Holdings for charterers’ default under this agreement for a total amount in each period of $2.3 million and $4.5 million, respectively, net of applicable deductions, of which $2.4 million and $4.8 million, respectively, was recorded as “Other income”. As of June 30, 2018, the Company recognized the fair value of the claim amounted to $19.4 million, including accrued interest and discount unwinding of $0.1 million and $0.2 million for the three and six month periods ended June 30, 2018, respectively, presented under the caption “Amounts due from related parties-long term” in the balance sheet.

If we lose a charter, we may be unable to re-deploy the related vessel on terms as favorable to us due to the long-term nature of most charters and the cyclical nature of the industry or we may be forced to charter the vessel on the spot market at then market rates which may be less favorable than the charter that has been terminated. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not receive any revenues from that vessel, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition. If we lose a vessel, any replacement or newbuilding would not generate revenues during its construction acquisition period, and we may be unable to charter any replacement vessel on terms as favorable to us as those of the terminated charter.

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Even if we successfully charter our vessels in the future, our charterers may go bankrupt or fail to perform their obligations under the charter agreements, they may delay payments or suspend payments altogether, they may terminate the charter agreements prior to the agreed-upon expiration date or they may attempt to renegotiate the terms of the charters. The permanent loss of a customer, time charter or vessel, or a decline in payments under our charters, could have a material adverse effect on our business, results of operations and financial condition and our ability to make cash distributions in the event we are unable to replace such customer, time charter or vessel. For further details, please read “Risk Factors” in our 2017 Annual Report on Form 20-F.

Inflation

Inflation has had a minimal impact on vessel operating expenses, drydocking expenses and general and administrative expenses. Our management does not consider inflation to be a significant risk to direct expenses in the current and foreseeable economic environment.

Recent Accounting Pronouncements

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

Critical Accounting Policies

Our financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates in the application of our accounting policies based on the best assumptions, judgments and opinions of management. Following is a discussion of the accounting policies that involve a higher degree of judgment and the methods of their application that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. Other than as described below, all significant accounting policies are as described in Note 2 to the Notes to the consolidated financial statements included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2017 filed with the SEC on April  4, 2018.

Exhibit List

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Index

NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of U.S. Dollars except unit data)

See unaudited condensed notes to the condensed consolidated financial statements

F-2

NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in thousands of U.S. Dollars except unit and per unit data)

Earnings per unit (see note 16):

See unaudited condensed notes to the condensed consolidated financial statements

F-3

NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of U.S. Dollars)

See unaudited condensed notes to the condensed consolidated financial statements

F-4

F-5

NAVIOS MARITIME PARTNERS L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Expressed in thousands of U.S. Dollars except unit data)