REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on which Registered | ||
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☒ |
International Financial Reporting Standards as Issued by the International Accounting Standards Board ☐ |
Other ☐ |
1 |
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Item 1. |
1 |
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Item 2. |
1 |
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Item 3. |
1 |
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A. |
1 |
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B. |
4 |
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C. |
4 |
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D. |
4 |
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Item 4. |
31 |
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A. |
31 |
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B. |
32 |
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C. |
59 |
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D. |
59 |
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Item 4A. |
60 |
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Item 5. |
60 |
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A. |
60 |
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B. |
73 |
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C. |
84 |
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D. |
84 |
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E. |
85 |
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F. |
85 |
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G. |
86 |
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86 |
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Item 6. |
92 |
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A. |
92 |
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B. |
95 |
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C. |
98 |
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D. |
99 |
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E. |
99 |
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Item 7. |
99 |
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A. |
99 |
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B. |
100 |
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C. |
101 |
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Item 8. |
101 |
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A. |
101 |
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B. |
101 |
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Item 9. |
102 |
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A. |
102 |
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B. |
102 |
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C. |
102 |
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Item 10. |
102 |
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A. |
102 |
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B. |
102 |
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C. |
102 |
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D. |
104 |
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E. |
104 |
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F. |
110 |
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G. |
110 |
H. |
110 |
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I. |
110 |
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Item 11. |
110 |
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Item 12. |
111 |
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112 |
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Item 13. |
112 |
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Item 14. |
112 |
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Item 15. |
112 |
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Item 16A. |
113 |
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B. |
113 |
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C. |
113 |
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D. |
114 |
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E. |
114 |
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F. |
114 |
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G. |
114 |
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H. |
115 |
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116 |
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Item 17. |
116 |
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Item 18. |
116 |
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Item 19. |
116 |
• |
future operating or financial results; |
• |
pending acquisitions, business strategy and expected capital spending; |
• |
operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs; |
• |
fluctuations in currencies and interest rates; |
• |
general market conditions and shipping market trends, including charter rates and factors affecting supply and demand; |
• |
our ability to continue to comply with all our debt covenants; |
• |
our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities; |
• |
estimated future capital expenditures needed to preserve our capital base; |
• |
our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels; |
• |
our continued ability to enter into long-term, fixed-rate time charters with our customers; |
• |
the availability and cost of low sulfur fuel oil compliant with the International Maritime Organization (“IMO”) sulfur emission limit reductions, generally referred to as “IMO 2020,” which took effect January 1, 2020; |
• |
our vessels engaging in ship to ship transfers of liquidified petroleum gas (“LPG”) or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge. Three of our vessels were named in a March 2019 U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) Advisory to the Maritime Petroleum Shipping Community as ships that had engaged in such ship to ship transfers of cargoes that may have ultimately been destined for Syria; |
• |
global epidemics or other health crises such as the recent outbreak of coronavirus COVID-19 (“Coronavirus”); |
• |
changes in governmental rules and regulations or actions taken by regulatory authorities; |
• |
potential liability from future litigation; |
• |
our expectations relating to the payment of dividends; |
• |
our expectation regarding providing in-house technical management for certain vessels in our fleet and our success in providing such in-house technical management; |
• |
our expectations regarding the completion of construction and financing of the ethylene export marine terminal at Morgan’s Point, Texas (the “Marine Export Terminal”) and the financial success of the Marine Export Terminal and our related 50/50 joint venture with Enterprise Products Partners L.P (the “Export Terminal Joint Venture”); and |
• |
other factors discussed in “Item 3—Key Information—Risk Factors” of this annual report. |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
A. |
Selected Financial Data |
Navigator Holdings |
||||||||||||||||||||
Year Ended December 31, |
||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||
(in thousands, except per share data, fleet data and average daily results) |
||||||||||||||||||||
Income Statement Data: |
||||||||||||||||||||
Operating Revenue |
$ | 315,223 |
$ | 294,112 |
$ | 298,595 |
$ | 310,046 |
$ | 301,385 |
||||||||||
Operating expenses: |
||||||||||||||||||||
Brokerage commissions |
6,995 |
5,812 |
5,368 |
5,142 |
4,938 |
|||||||||||||||
Voyage expenses |
33,687 |
42,201 |
55,542 |
61,634 |
55,310 |
|||||||||||||||
Vessel operating expenses |
78,842 |
90,854 |
100,968 |
106,719 |
111,475 |
|||||||||||||||
Depreciation and amortization |
53,453 |
62,280 |
73,588 |
76,140 |
76,173 |
|||||||||||||||
General and administrative costs |
13,564 |
14,504 |
15,947 |
18,931 |
20,878 |
|||||||||||||||
Profit on sale of vessel |
(550 |
) | — |
— |
— |
— |
||||||||||||||
Vessel write down following collision |
10,500 |
— |
— |
— |
— |
|||||||||||||||
Insurance recoverable from vessel repairs |
(9,892 |
) | 504 |
— |
— |
— |
||||||||||||||
Total operating expenses |
186,599 |
216,155 |
251,413 |
268,566 |
268,774 |
|||||||||||||||
Operating income |
$ | 128,624 |
$ | 77,957 |
$ | 47,182 |
$ | 41,480 |
$ | 32,611 |
||||||||||
Foreign currency exchange gain on senior secured bonds |
— |
— |
— |
2,360 |
969 |
|||||||||||||||
Unrealized loss on non-designated derivative instruments |
— |
— |
— |
(5,154 |
) | (615 |
) | |||||||||||||
Net interest expense |
(29,730 |
) | (32,142 |
) | (41,475 |
) | (44,054 |
) | (48,094 |
) | ||||||||||
Income/(loss) before income taxes |
$ | 98,894 |
$ | 45,815 |
$ | 5,707 |
$ | (5,368 |
) | $ | (15,129 |
) | ||||||||
Income taxes |
(800 |
) | (1,177 |
) | (397 |
) | (333 |
) | (352 |
) | ||||||||||
Share of result of equity accounted joint venture |
— |
— |
— |
(38 |
) | (1,126 |
) | |||||||||||||
Net income/(loss) |
$ | 98,094 |
$ | 44,638 |
$ | 5,310 |
$ | (5,739 |
) | $ | (16,607 |
) | ||||||||
Net income attributable to non-controlling interest |
— |
— |
— |
— |
(99 |
) | ||||||||||||||
Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. |
$ | 98,094 |
$ | 44,638 |
$ | 5,310 |
$ | (5,739 |
) | $ | (16,706 |
) | ||||||||
Earnings per share |
||||||||||||||||||||
Basic |
$ | 1.77 |
$ | 0.81 |
$ | 0.10 |
$ | (0.10 |
) | $ | (0.30 |
) | ||||||||
Diluted |
$ | 1.76 |
$ | 0.80 |
$ | 0.10 |
$ | (0.10 |
) | $ | (0.30 |
) | ||||||||
Weighted average number of shares outstanding: |
||||||||||||||||||||
Basic |
55,360,004 |
55,418,626 |
55,508,974 |
55,629,023 |
55,792,711 |
|||||||||||||||
Diluted |
55,706,104 |
55,794,481 |
55,881,454 |
55,629,023 |
55,792,711 |
Navigator Holdings |
||||||||||||||||||||
Year Ended December 31, |
||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||
(in thousands, except per share data, fleet data and average daily results) |
||||||||||||||||||||
Balance Sheet Data (at end of period): |
||||||||||||||||||||
Cash, cash equivalents and restricted cash |
$ | 87,779 |
$ | 57,272 |
$ | 62,109 |
$ | 71,515 |
$ | 66,130 |
||||||||||
Total assets |
1,560,505 |
1,724,843 |
1,853,887 |
1,832,751 |
1,874,253 |
|||||||||||||||
Total liabilities |
650,414 |
768,363 |
890,674 |
877,641 |
934,351 |
|||||||||||||||
Total stockholders’ equity |
910,091 |
956,480 |
963,213 |
955,110 |
939,803 |
|||||||||||||||
Cash Flows Data: |
||||||||||||||||||||
Net cash provided by operating activities |
$ | 149,554 |
$ | 86,748 |
$ | 75,921 |
$ | 77,517 |
$ | 49,700 |
||||||||||
Net cash used in investing activities |
(205,856 |
) | (238,153 |
) | (183,025 |
) | (42,327 |
) | (90,409 |
) | ||||||||||
Net cash provided by / used in financing activities |
81,555 |
120,898 |
111,941 |
(25,784 |
) | 35,324 |
||||||||||||||
Fleet Data: |
||||||||||||||||||||
Weighted average number of vessels (2) |
27.8 |
31.3 |
36.2 |
38.0 |
38.0 |
|||||||||||||||
Ownership days (3) |
10,135 |
11,463 |
13,228 |
13,870 |
13,870 |
|||||||||||||||
Available days (4) |
9,865 |
11,255 |
13,195 |
13,767 |
13,608 |
|||||||||||||||
Operating days (5) |
9,298 |
9,888 |
11,564 |
12,247 |
11,813 |
|||||||||||||||
Fleet utilization (6) |
94.3 |
% | 87.9 |
% | 87.6 |
% | 89.0 |
% | 86.8 |
% | ||||||||||
Average Daily Results: |
||||||||||||||||||||
Time charter equivalent rate (7) |
$ | 30,280 |
$ | 25,476 |
$ | 21,018 |
$ | 20,284 |
$ | 20,831 |
||||||||||
Daily vessel operating expenses (8) |
$ | 7,779 |
$ | 7,925 |
$ | 7,635 |
$ | 7,694 |
$ | 8,037 |
||||||||||
Other Data: |
||||||||||||||||||||
EBITDA (1) |
$ | 182,077 |
$ | 140,237 |
$ | 120,770 |
$ | 114,788 |
$ | 108,012 |
||||||||||
Adjusted EBITDA (1) |
$ | 182,077 |
$ | 140,237 |
$ | 120,770 |
$ | 117,582 |
$ | 107,658 |
(1) | EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP (non-GAAP financial measures). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to consolidated net income, cash generated from operations or any other measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. |
• | EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | EBITDA and Adjusted EBITDA do not recognize the interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
• | EBITDA and Adjusted EBITDA ignore changes in, or cash requirements for, our working capital needs; and |
• | other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. |
Navigator Holdings |
||||||||||||||||||||
Year Ended December 31, |
||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Net income/(loss) |
$ | 98,094 |
$ | 44,638 |
$ | 5,310 |
$ | (5,739 |
) | $ | (16,607 |
) | ||||||||
Net interest expense |
29,730 |
32,142 |
41,475 |
44,054 |
48,094 |
|||||||||||||||
Income taxes |
800 |
1,177 |
397 |
333 |
352 |
|||||||||||||||
Depreciation and amortization |
53,453 |
62,280 |
73,588 |
76,140 |
76,173 |
|||||||||||||||
EBITDA |
$ | 182,077 |
$ | 140,237 |
$ | 120,770 |
$ | 114,788 |
$ | 108,012 |
||||||||||
Foreign currency exchange gain on senior secured bonds |
— |
— |
— |
(2,360 |
) | (969 |
) | |||||||||||||
Unrealized loss on non-designated derivative instruments |
— |
— |
— |
5,154 |
615 |
|||||||||||||||
Adjusted EBITDA |
$ | 182,077 |
$ | 140,237 |
$ | 120,770 |
$ | 117,582 |
$ | 107,658 |
||||||||||
(2) | We calculate the weighted average number of vessels during a period by dividing the number of total ownership days during that period by the number of calendar days during that period. |
(3) | We define ownership days as the aggregate number of days in a period that each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and the potential amount of revenue that we record during a period. |
(4) | We define available days as ownership days less aggregate off-hire days associated with scheduled maintenance, which includes drydockings, vessel upgrades or special or intermediate surveys. We use available days to measure the aggregate number of days in a period that our vessels should be capable of generating revenues. |
(5) | We define operating days as available days less the aggregate number of days that our vessels are off-hire for any reason other than scheduled maintenance. We use operating days to measure the aggregate number of days in a period that our vessels are providing services to our customers. |
(6) | We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. We use fleet utilization to measure our ability to efficiently find suitable employment for our vessels. |
(7) | Time charter equivalent, (“TCE”), is calculated by dividing total operating revenues, less any voyage expenses, by the number of operating days for the relevant period. TCE is not calculated in accordance with U.S. GAAP. TCE rate is a shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment (“COAs”)) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. |
Year Ended December 31, |
||||||||||||||||||||
2015 |
2016 |
2017 |
2018 |
2019 |
||||||||||||||||
(in thousands, except operating days and average daily time charter equivalent rate) |
||||||||||||||||||||
Fleet Data: |
||||||||||||||||||||
Operating revenue |
$ | 315,223 |
$ | 294,112 |
$ | 298,595 |
$ | 310,046 |
$ | 301,385 |
||||||||||
Voyage expenses |
33,687 |
42,201 |
55,542 |
61,634 |
55,310 |
|||||||||||||||
Operating revenue less Voyage expenses |
281,536 |
251,911 |
243,053 |
248,412 |
246,075 |
|||||||||||||||
Operating days |
9,298 |
9,888 |
11,564 |
12,247 |
11,813 |
|||||||||||||||
Average daily time charter equivalent rate |
$ | 30,280 |
$ | 25,476 |
$ | 21,018 |
$ | 20,284 |
$ | 20,831 |
(8) | Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant time period. |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | changes in the supply of vessel capacity for the seaborne transportation of liquefied gases, which is influenced by the following factors: |
• | the number of newbuilding deliveries and the ability of shipyards to deliver newbuildings by contracted delivery dates and capacity levels of shipyards; |
• | the scrapping rate of older vessels; |
• | the number of vessels that are out of service, as a result of vessel casualties, repairs and drydockings; and |
• | changes in liquefied gas carrier prices. |
• | changes in the level of demand for seaborne transportation of liquefied gases, which is influenced by the following factors: |
• | the level of production of liquefied gases in net export regions; |
• | the level of demand for liquefied gases in net import regions such as Asia, Europe, Latin America and India; |
• | the level of internal demand for petrochemicals to supply integrated petrochemical facilities in net export regions; |
• | a reduction in global demand for petrochemicals due to ecological or environmental concerns about the use of plastics; |
• | a reduction in global or general industrial activity specifically in the plastics and chemical industry; |
• | changes in the cost of petroleum and natural gas from which liquefied gases are derived; |
• | prevailing global and regional economic conditions; |
• | political changes and armed conflicts in the regions traveled by our vessels and the regions where the cargoes we carry are produced or consumed that interrupt production, trade routes or consumption of liquefied gases and associated products; |
• | developments in international trade; |
• | the distances between exporting and importing regions over which liquefied gases are to be transported by sea; |
• | infrastructure to support seaborne liquefied gases, including pipelines, railways and terminals; |
• | the availability of alternative transportation means, including pipelines; |
• | changes in seaborne and other transportation patterns; and |
• | changes in environmental and other regulations that may limit the production or consumption of liquefied gases or the useful lives of vessels. |
• | increases in the demand for industrial and residential natural gas in areas linked by pipelines to producing areas, or the conversion of existing non-gas pipelines to natural gas pipelines in those markets; |
• | increases in demand for chemical feedstocks in net exporting regions, leading to less liquefied gases for export; |
• | decreases in the consumption of petrochemical gases; |
• | decreases in the consumption of LPG due to increases in its price relative to other energy sources or other factors making consumption of liquefied gas less attractive; |
• | the availability of competing, alternative energy sources, transportation fuels or propulsion systems; |
• | decreases in demand for liquefied gases resulting from changes in feedstock capabilities of petrochemical plants in net importing regions; |
• | changes in the relative values of hydrocarbon and liquefied gases; |
• | a reduction in global industrial activity, especially in the plastics and petrochemical industries, particularly in regions with high demand growth for liquefied gas, such as Asia; |
• | adverse global or regional economic or political conditions, particularly in liquefied gas exporting or importing regions, which could reduce liquefied gas shipping or energy consumption; |
• | changes in governmental regulations, such as the elimination of economic incentives or initiatives designed to encourage the use of liquefied gases over other fuel sources; or |
• | decreases in the capacity of petrochemical plants and crude oil refineries worldwide or the failure of anticipated new capacity to come online. |
• | the location and required repositioning of the vessel; |
• | the cost of labor and materials; |
• | the types of vessels in our fleet; |
• | the age of our fleet; |
• | governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; |
• | competitive standards; and |
• | high demand for drydock usage. |
• | fail to realize anticipated benefits of acquisitions, such as new customer relationships, cost savings or increased cash flow; |
• | not be able to obtain charters at favorable rates or at all; |
• | be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet; |
• | fail to integrate investments of complementary assets or vessels in capacity ranges outside our current operations in a profitable manner; |
• | not have adequate operating and financial systems in place as we implement our expansion plan; |
• | decrease our liquidity through the use of a significant portion of available cash or borrowing capacity to finance acquisitions; |
• | significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions; or |
• | incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired. |
• | delays in obtaining regulatory approvals, licenses or permits from different governmental or regulatory authorities, including environmental permits; |
• | unexpected cost increases or shortages in the equipment, materials or labor required for the venture, which could cause the venture to become economically unfeasible; and |
• | unforeseen engineering, design or environmental problems. |
• | our ability to have the throughput to the Marine Export Terminal fully committed; |
• | any inability of the Marine Export Terminal to operate due to operational issues; and |
• | existing customers not renewing their contracts. |
• | damage or destruction of vessel due to natural disasters; |
• | damage or destruction of vessel due to marine disasters such as a collision; |
• | the loss of a vessel due to piracy and terrorism; |
• | cargo and property losses or damage as a result of the foregoing or less drastic causes such as human error, mechanical failure, grounding, fire, explosions and bad weather; |
• | environmental accidents as a result of the foregoing; |
• | risks to the onboard vessel management personnel as a result of the foregoing; and |
• | business interruptions and delivery delays caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions. |
• | crew changes have been cancelled and/or delayed until it is safe and feasible to do so. This is due to port authorities denying disembarkation, and a lack of international air transport or denial of re-entry by crew members’ home countries, which may have closed their borders; |
• | we have sought alternative shipyards which has resulted in delays to repairs, scheduled maintenance and dry docking of our vessels, as a result of a lack availability by shipyards from a shortage in labor or due to other business disruptions caused by COVID-19; |
• | delays or cancellations in vessel inspections and related certifications by class societies, customers or government agencies; |
• | we have had to implement and adhere to additional strict onboard procedures to avoid potential human-to-human transmission of COVID-19 to crew members as a result of vessel visits by port authority members, pilots, inspectors and suppliers. |
• | quality or engineering problems; |
• | changes in governmental regulations or maritime self-regulatory organization standards; |
• | work stoppages or other labor disturbances at the shipyard; |
• | bankruptcy or other financial crisis of the shipbuilder; |
• | a backlog of orders at the shipyard; |
• | hostilities or political or economic disturbances in the locations where the vessels are being built; |
• | weather interference or catastrophic event, such as a major earthquake or fire; |
• | our requests for changes to the original vessel specifications; |
• | shortages of, or delays in the receipt of necessary construction materials, such as steel; |
• | our inability to obtain sufficient finance for the purchase of the vessels or to make timely payments; or |
• | our inability to obtain requisite permits or approvals. |
• | the shipowner’s industry relationships, experience and reputation for customer service, quality operations and safety; |
• | the quality, experience and technical capability of the crew; |
• | the age, type, capability and versatility of our vessels; |
• | the shipowner’s construction management experience, including the ability to obtain on-time delivery of new vessels according to customer specifications; |
• | the shipowner’s willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and |
• | the competitiveness of the bid in terms of the vessel’s overall economics. |
• | marine disasters; |
• | bad weather or climate change; |
• | business interruption caused by mechanical failures; |
• | grounding, capsizing, fire, explosions and collisions; |
• | war, terrorism, piracy, cyber-attack; and |
• | human error. |
• | death or injury to persons, loss of property or damage to the environment and natural resources; |
• | delays in the delivery of cargo; |
• | loss of revenues; |
• | higher than anticipated expenses, or liabilities or costs to recover any spilled cargo and to restore the ecosystem where the spill occurred; |
• | governmental fines, penalties or restrictions on conducting business; |
• | higher insurance rates; and |
• | damage to our reputation and customer relationships generally. |
• | pay dividends out of operating revenues generated by the vessels securing indebtedness under the facility, redeem any shares or make any other payment to our equity holders, if there is a default under any secured term loan facility, revolving credit facility or secured term loan and revolving credit facility; |
• | incur additional indebtedness, including through the issuance of guarantees; |
• | create liens on our assets; |
• | sell our vessels; |
• | merge or consolidate with, or transfer all or substantially all our assets to, another person; |
• | change the flag, class or management of our vessels; and |
• | enter into a new line of business. |
• | our shareholders’ proportionate ownership interest in us will decrease; |
• | the relative voting strength of each previously outstanding share may be diminished; and |
• | the market price of the common stock may decline. |
Item 4. |
Information on the Company |
A. |
History and Development of the Company |
B. |
Business Overview |
• | All crew changes have been cancelled until it is safe and feasible to do so and this will be continually reviewed as the situation develops; |
• | Arrangements to accept delivery of additional spare parts and critical supplies are made where possible in supply chains; |
• | Non-critical boardings are restricted, current visits are limited to vettings inspectors, pilots and port officials, where allowed, and procedures have been implemented on board to limit the risk of human-to-human transmission from visiting personnel; |
• | Global offices were closed in advance of government-mandated lockdown dates to minimize the opportunity for human-to-human transmission, IT systems and network capacity have proven to be robust, and no interruption to business support functions and no implications to financial reporting systems or internal controls over financial reporting have been identified. |
• | Delivering a safe and sustainable future. |
• | Maintain a customer-driven chartering strategy. |
• | Capitalize on the increasing demand for seaborne transportation of ethane and ethylene. |
• | Become a leading participant in the seaborne transportation of the increasing U.S. petrochemicals production. |
• | Assist in the development of global petrochemical infrastructure projects. |
• | Maintain reputation for operational excellence. |
• | Taking business and asset efficiencies to the next level. |
• | Create a strong in-house technical management function. in-house, enabling us to sustain and improve the first-rate quality of our vessels’ capabilities. We now provide in-house technical management for 17 of our 38 vessels, as we continue to refine and improve our systems, whilst understanding the importance of complying with health, safety and environmental regulations and well as operating to the highest standards transporting cargoes safely, efficiently and securely around the globe. |
• | Maintain a strong balance sheet with manageable debt levels. |
Operating Vessel |
Year Built |
Vessel Size (CBM) |
Employment Status |
Charter Expiration Date | ||||||||
Ethylene/ethane capable semi-refrigerated |
||||||||||||
Navigator Orion (formerly known as Navigator Mars) |
2000 |
22,085 |
Spot market |
— | ||||||||
Navigator Neptune |
2000 |
22,085 |
Time charter |
October 2020 | ||||||||
Navigator Pluto |
2000 |
22,085 |
Time charter |
July 2020 | ||||||||
Navigator Saturn |
2000 |
22,085 |
Spot market |
— | ||||||||
Navigator Venus |
2000 |
22,085 |
Time charter |
November 2020 | ||||||||
Navigator Atlas |
2014 |
21,000 |
Spot market |
— | ||||||||
Navigator Europa |
2014 |
21,000 |
Contract of affreightment |
May 2020 | ||||||||
Navigator Oberon |
2014 |
21,000 |
Spot market |
— | ||||||||
Navigator Triton |
2015 |
21,000 |
Spot market |
— | ||||||||
Navigator Umbrio |
2015 |
21,000 |
Spot market |
— | ||||||||
Navigator Aurora |
2016 |
37,300 |
Time charter |
December 2026 | ||||||||
Navigator Eclipse |
2016 |
37,300 |
Spot market |
— | ||||||||
Navigator Nova |
2017 |
37,300 |
Time charter |
June 2020 | ||||||||
Navigator Prominence |
2017 |
37,300 |
Time charter |
October 2020 | ||||||||
Semi-refrigerated |
||||||||||||
Navigator Magellan |
1998 |
20,700 |
Time charter |
May 2020 | ||||||||
Navigator Aries |
2008 |
20,750 |
Time charter |
July 2020 | ||||||||
Navigator Capricorn |
2008 |
20,750 |
Time charter |
May 2020 | ||||||||
Navigator Gemini |
2009 |
20,750 |
Spot market |
— | ||||||||
Navigator Pegasus |
2009 |
22,200 |
Spot market |
— | ||||||||
Navigator Phoenix |
2009 |
22,200 |
Spot market |
— | ||||||||
Navigator Scorpio |
2009 |
20,750 |
Spot market |
— | ||||||||
Navigator Taurus |
2009 |
20,750 |
Spot market |
— | ||||||||
Navigator Virgo |
2009 |
20,750 |
Spot market |
— | ||||||||
Navigator Leo |
2011 |
20,600 |
Time charter |
December 2023 | ||||||||
Navigator Libra |
2012 |
20,600 |
Time charter |
December 2023 | ||||||||
Navigator Centauri |
2015 |
21,000 |
Spot market |
— | ||||||||
Navigator Ceres |
2015 |
21,000 |
Spot market |
— | ||||||||
Navigator Ceto |
2016 |
21,000 |
Spot market |
— | ||||||||
Navigator Copernico |
2016 |
21,000 |
Spot market |
— | ||||||||
Navigator Luga |
2017 |
22,000 |
Time charter |
February 2022 | ||||||||
Navigator Yauza |
2017 |
22,000 |
Time charter |
April 2022 | ||||||||
Fully-refrigerated |
||||||||||||
Navigator Glory |
2010 |
22,500 |
Time charter |
June 2021 | ||||||||
Navigator Grace |
2010 |
22,500 |
Time charter |
May 2020 | ||||||||
Navigator Galaxy |
2011 |
22,500 |
Time charter |
May 2020 | ||||||||
Navigator Genesis |
2011 |
22,500 |
Time charter |
June 2020 | ||||||||
Navigator Global |
2011 |
22,500 |
Time charter |
November 2020 | ||||||||
Navigator Gusto |
2011 |
22,500 |
Time charter |
December 2020 | ||||||||
Navigator Jorf |
2017 |
38,000 |
Time charter |
August 2027 |
• | Major Oil and Gas Companies, |
• | Chemical Companies, |
• | Energy Trading Companies, |
• | technical breakdowns; drydocking for repairs, maintenance or inspections; equipment breakdowns; or delays due to accidents, strikes, certain vessel detentions or operational issues; or |
• | our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew. |
• | provide competent personnel to operate and supervise the maintenance and general efficiency of our vessels; |
• | arrange and supervise the maintenance, drydockings, repairs, alterations and upkeep of our vessels to the standards required by us and in accordance with all requirements and recommendations of our vessels’ classification society, flag state and applicable national and international regulations; |
• | ensure that our vessels comply with the law of their flag state; |
• | arrange the supply of necessary stores, spares and lubricating oil for our vessels; |
• | appoint such surveyors and technical consultants as they may consider from time to time necessary; |
• | operate the vessels in accordance with the ISM Code and The International Security Code for Ports and Ships (“ISPS Code”); |
• | develop, implement and maintain a safety management system in accordance with the ISM Code; |
• | arrange the sampling and testing of bunkers; |
• | install planned maintenance system software on-board our vessels; |
• | provide emergency response services and support to our vessels in case of an incident or accident; and |
• | operate our vessels in accordance with the agreed budgets. |
• | they do not receive amounts payable by us under the agreement within the time period specified for payment thereof, or if the vessels are repossessed by any vessel mortgagees; or |
• | after notice to us of the default and a reasonable amount of time to remedy, we fail to: |
• | comply with our obligation to indemnify them for any expenses attributable to us or defend them (and their related companies) against any third-party claims based on a breach or alleged breach of an obligation of ours to a third-party; or |
• | cease the employment of our vessels in the transportation of contraband, blockage running, or in an unlawful trade, or on a voyage that in their reasonable opinion is unduly hazardous or improper. |
• | select and supply a suitably qualified crew for each vessel in our fleet; |
• | pay all crew wages and salaries; |
• | ensure that the applicable requirements of the laws of our vessels’ flag states are satisfied in respect of the rank, qualification and certification of the crew; |
• | pay the costs of obtaining all documentation necessary for the crew’s employment, such as vaccination certificates, passports, visas and licenses; and |
• | pay all costs and expenses of transportation of the crews to and from the vessels while traveling. |
• | natural resource damages and related assessment costs; |
• | real and personal property damages; |
• | net loss of taxes, royalties, rents, profits or earnings capacity; |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and |
• | loss of subsistence use of natural resources. |
• | on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; |
• | on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; |
• | the development of vessel security plans; |
• | ship identification number to be permanently marked on a vessel’s hull; |
• | a continuous synopsis record kept on-board showing a vessel’s history including, the name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and |
• | compliance with flag state security certification requirements. |
• | we are organized in a jurisdiction outside the United States that grants an equivalent exemption from tax to corporations organized in the United States with respect to the types of U.S. Source International Transportation Income that we earn, or an “Equivalent Exemption”; |
• | we satisfy the Publicly Traded Test (as described below); and |
• | we meet certain substantiation, reporting and other requirements (or the Substantiation Requirement). |
• | individual residents of jurisdictions that grant an Equivalent Exemption; |
• | non-U.S. corporations organized in jurisdictions that grant an Equivalent Exemption and that meet the Publicly Traded Test; and |
• | certain other qualified persons described in the Section 883 Regulations. |
C. |
Organizational Structure |
D. |
Property, Plant and Equipment |
Item 4A. |
Unresolved Staff Comments |
Item 5. |
Operating and Financial Review and Prospects |
A. |
Operating Results |
• | All crew changes have been cancelled until it is safe and feasible to do so and this will be continually reviewed as the situation develops; |
• | Arrangements to accept delivery of additional spare parts and critical supplies are made where possible in supply chains; |
• | Non-critical boardings are restricted, current visits are limited to vettings inspectors, pilots and port officials, where allowed, and procedures have been implemented on board to limit the risk of human-to-human transmission from visiting personnel; |
• | Global offices were closed in advance of government-mandated lockdown dates to minimize the opportunity for human-to-human transmission, IT systems and network capacity have proven to be robust, and no interruption to business support functions and no implications to financial reporting systems or internal controls over financial reporting have been identified. |
• | charges related to the depreciation of the historical cost of our fleet (or the revalued amount), less the estimated residual value of our vessels, calculated on a straight-line basis over their useful life, which is estimated to be 30 years; and |
• | charges related to the amortization of capitalized drydocking expenditures relating to our fleet over the period between drydockings. |
• | Historical fleet size . |
• | Investment in Export Terminal Joint Venture on-site and, once completed, will have the capacity to export approximately one million tons of ethylene per year and provide the capability to load ethylene at rates of 1,000 tons per hour. The project is supported by four contracts of five to seven years with customers. The results from the Export Terminal Joint Venture are shown as “Share of results of equity accounted joint venture” on the income statement. |
• | We will have different financing arrangements. re-finance four of our vessels as well as entering into a credit agreement, the proceeds of which will be used solely for the payment of project costs relating to our Marine Export Terminal. In November 2018, we issued senior secured bonds. These bonds were issued to partially finance our portion of the capital contributions for the construction of the Marine Export Terminal and will incur interest expense from the date of issue. Please read “—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities,” “2017 Senior Unsecured Bonds,” “2018 Senior Secured Bonds” and “Terminal facility”. |
• | Our results are affected by fluctuations in the fair value of our derivative instruments. |
• | Changes in Accounting Standards. |
• | Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . |
• | ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). 2014-09. Consequently, the comparable amounts for the years ended December 31, 2017 have not been adjusted. |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
Percentage Change |
||||||||||
(in thousands, except percentages) |
||||||||||||
Operating revenue |
$ | 310,046 |
$ | 301,385 |
(2.8 |
%) | ||||||
Operating expenses: |
||||||||||||
Brokerage Commissions |
5,142 |
4,938 |
(4.0 |
%) | ||||||||
Voyage expenses |
61,634 |
55,310 |
(10.3 |
%) | ||||||||
Vessel operating expenses |
106,719 |
111,475 |
4.5 |
% | ||||||||
Depreciation and amortization |
76,140 |
76,173 |
0.0 |
% | ||||||||
General and administrative costs |
18,931 |
20,878 |
10.3 |
% | ||||||||
Total operating expenses |
$ | 268,566 |
$ | 268,774 |
0.1 |
% | ||||||
Operating income |
$ | 41,480 |
$ | 32,611 |
(21.4 |
%) | ||||||
Foreign currency exchange gain on senior secured bonds |
2,360 |
969 |
(58.9 |
%) | ||||||||
Unrealized loss on non-designated derivative instruments |
(5,154 |
) | (615 |
) | (88.1 |
%) | ||||||
Interest expense |
(44,908 |
) | (48,611 |
) | 8.2 |
% | ||||||
Write off of deferred financing costs |
— |
(403 |
) | — |
||||||||
Interest income |
854 |
920 |
7.7 |
% | ||||||||
Loss before income taxes and share of result of equity accounted joint venture |
$ | (5,368 |
) | $ | (15,129 |
) | 181.8 |
% | ||||
Income taxes |
(333 |
) | (352 |
) | 5.7 |
% | ||||||
Share of result of equity accounted joint venture |
(38 |
) | (1,126 |
) | 2863.2 |
% | ||||||
Net loss |
$ | (5,739 |
) | $ | (16,607 |
) | 189.4 |
% | ||||
Net income attributable to non-controlling interest |
— |
(99 |
) | — |
||||||||
Net loss attributable to stockholders of Navigator Holdings Ltd. |
$ | (5,739 |
) | $ | (16,706 |
) | 191.1 |
% | ||||
• | a decrease in operating revenue of approximately $6.1 million attributable to a decrease in fleet utilization from 89.0% for the year ended December 31, 2018 to 86.8% for the year ended December 31, 2019, primarily due to the weak LPG and petrochemical markets; |
• | a decrease in operating revenue of approximately $6.3 million primarily attributable to a decrease in pass through voyage costs, as the number and duration of voyage charters during the year ended December 31, 2019 decreased, compared to the year ended December 31, 2018; |
• | a decrease in operating revenue of approximately $2.9 million attributable to a decrease in vessel available days of 159 days or 1.2% for the year ended December 31, 2019 due to an increase in the number and duration of vessel drydocks when the vessels are unavailable for charter, compared to the year ended December 31, 2018; and |
• | an increase in operating revenue of approximately $6.6 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately $633,584 per vessel per calendar month ($20,831 per day) for the year ended December 31, 2019, compared to an average of approximately $616,965 per vessel per calendar month ($20,284 per day) for the year ended December 31, 2018. |
Fleet Data: |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
||||||
Weighted average number of vessels |
38.0 |
38.0 |
||||||
Ownership days |
13,870 |
13,870 |
||||||
Available days |
13,767 |
13,608 |
||||||
Operating days |
12,247 |
11,813 |
||||||
Fleet utilization |
89.0 |
% | 86.8 |
% | ||||
Average daily time charter equivalent rate (*) |
$ | 20,284 |
$ | 20,831 |
* |
Non-GAAP Financial Measure -Time charter equivalent: period-to-period changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. |
Fleet Data: |
Year Ended December 31, 2018 |
Year Ended December 31, 2019 |
||||||
Operating revenue |
310,046 |
301,385 |
||||||
Voyage expenses |
61,634 |
55,310 |
||||||
Operating revenue less Voyage expenses |
248,412 |
246,075 |
||||||
Operating days |
12,247 |
11,813 |
||||||
Average daily time charter equivalent rate |
$ | 20,284 |
$ | 20,831 |
Year Ended December 31, 2017 |
Year Ended December 31, 2018 |
Percentage Change |
||||||||||
(in thousands, except percentages) |
||||||||||||
Operating revenue |
$ | 298,595 |
$ | 310,046 |
3.8 |
% | ||||||
Operating expenses: |
||||||||||||
Brokerage Commissions |
5,368 |
5,142 |
(4.2 |
%) | ||||||||
Voyage expenses |
55,542 |
61,634 |
11.0 |
% | ||||||||
Vessel operating expenses |
100,968 |
106,719 |
5.7 |
% | ||||||||
Depreciation and amortization |
73,588 |
76,140 |
3.5 |
% | ||||||||
General and administrative costs |
15,947 |
18,931 |
18.7 |
% | ||||||||
Total operating expenses |
$ | 251,413 |
$ | 268,566 |
6.8 |
% | ||||||
Operating income |
$ | 47,182 |
$ | 41,480 |
(12.1 |
%) | ||||||
Foreign currency exchange gain on senior secured bonds |
— |
2,360 |
— |
|||||||||
Unrealized loss on non-designated derivative instruments |
— |
(5,154 |
) | — |
||||||||
Interest expense |
(37,691 |
) | (44,908 |
) | 19.2 |
% | ||||||
Write off of deferred financing costs |
(786 |
) | — |
— |
||||||||
Write off of call premium and redemption charges on 9.00% unsecured bond |
(3,517 |
) | — |
— |
||||||||
Interest income |
519 |
854 |
64.5 |
% | ||||||||
Income/(loss) before income taxes and share of result of equity accounted joint venture |
$ | 5,707 |
$ | (5,368 |
) | (194.7 |
%) | |||||
Income taxes |
(397 |
) | (333 |
) | (16.1 |
%) | ||||||
Share of result of equity accounted joint venture |
— |
(38 |
) | — |
||||||||
Net income/(loss) |
$ | 5,310 |
$ | (5,739 |
) | (208.1 |
%) | |||||
• | an increase in operating revenue of approximately $10.5 million attributable to an increase in the weighted average number of vessels from 36.2 for the year ended December 31, 2017, to 38.0 for the year ended December 31, 2018, and a corresponding increase in vessel ownership days by 642 days, or 4.9%, for the year ended December 31, 2018, as compared to the year ended December 31, 2017; |
• | a decrease in operating revenue of approximately $8.8 million attributable to a reduction in average monthly time charter equivalent rates, which decreased to an average of approximately $616,965 per vessel per calendar month ($20,284 per day) for the year ended December 31, 2018, compared to an average of approximately $639,318 per vessel per calendar month ($21,018 per day) for the year ended December 31, 2017, This was primarily as a result of a weak LPG market which accounted for a decrease of $9.9 million, offset by the adoption of ASU 2014-09, the new accounting standard that requires revenue for voyage charters to be recognized between load port and discharge port only, rather than the previous method of recognizing revenue between the prior discharge port to the following discharge port, accounting for an increase of $1.1 million; |
• | an increase in operating revenue of approximately $3.7 million attributable to an increase in fleet utilization from 87.6% for the year ended December 31, 2017 to 89.0% for the year ended December 31, 2018, primarily due to a lower number of idle days as a percentage of available days, for the year ended December 31, 2018 compared to the year ended December 31, 2017 and |
• | an increase in operating revenue of approximately $6.0 million primarily attributable to an increase in pass through voyage costs, compensated by increased operating revenue, as the number and duration of voyage charters during the year ended December 31, 2018 increased, compared to the year ended December 31, 2017. |
Fleet Data: |
Year Ended December 31, 2017 |
Year Ended December 31, 2018 |
||||||
Weighted average number of vessels |
36.2 |
38.0 |
||||||
Ownership days |
13,228 |
13,870 |
||||||
Available days |
13,195 |
13,767 |
||||||
Operating days |
11,564 |
12,247 |
||||||
Fleet utilization |
87.6 |
% | 89.0 |
% | ||||
Average daily time charter equivalent rate (*) |
$ | 21,018 |
$ | 20,284 |
* |
Non-GAAP Financial Measure -Time charter equivalent: period-to-period changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. |
Fleet Data: |
Year Ended December 31, 2017 |
Year Ended December 31, 2018 |
||||||
Operating revenue |
298,595 |
310,046 |
||||||
Voyage expenses |
55,542 |
61,634 |
||||||
Operating revenue less Voyage expenses |
243,053 |
248,412 |
||||||
Operating days |
11,564 |
12,247 |
||||||
Average daily time charter equivalent rate |
$ | 21,018 |
$ | 20,284 |
B. |
Liquidity and Capital Resources |
• | refinancing one or more secured credit facilities |
• | raising debt against the Company’s four unsecured vessels of up to $60 million; |
• | seeking the agreement of its lenders to defer one or more quarterly loan amortization payments of approximately $17 million per quarter; |
• | seeking an extension to the maturity of the bond; |
• | seeking to raise the capital required by a sale and leaseback of up to seven of the Company’s vessels which the Company estimates could yield up to $138 million of additional funding after repaying existing debt facilities which are secured on the Company’s vessels; or |
• | raising alternative debt through a combination of the options set out above under the increasing liquidity discussion. |
Year Ended December 31, |
||||||||||||
2017 |
2018 |
2019 |
||||||||||
(in thousands) |
||||||||||||
Net cash provided by operating activities |
$ | 75,921 |
$ | 77,517 |
$ | 49,700 |
||||||
Net cash used in investing activities |
(183,025 |
) | (42,327 |
) | (90,409 |
) | ||||||
Net cash provided by / (used in) financing activities |
111,941 |
(25,784 |
) | 35,324 |
||||||||
Net increase / (decrease) in cash, cash equivalents and restricted cash |
4,837 |
9,406 |
(5,385 |
) |
Facility agreement date |
Original Facility amount |
Principal Amount outstanding |
Amounts available for drawdown at December 31, 2019 |
Interest rate |
Loan Maturity date |
|||||||||||||||
(in millions) |
||||||||||||||||||||
March 2019 |
$ | 75.0 |
— |
36.0 |
* | US LIBOR + 250 to 300 BPS |
December 2025** |
* | Initial borrowing under the Terminal Facility may only occur after the Marine Terminal Borrower has made equity contributions required under the Terminal Facility to the Export Terminal Joint Venture, which together with available borrowings under the Terminal Facility, will fund its entire portion of the capital cost for the construction of the Marine Export Terminal. |
** | The Terminal Facility is comprised of an initial construction loan, followed by a term loan with a final maturity occurring on the earlier of (i) five years from completion of the Marine Export Terminal and (ii) December 31, 2025. |
Facility agreement date |
Original facility amount |
Principal amount outstanding |
Interest rate |
Loan maturity date |
||||||||||||
January 2015* |
278.1 |
111.3 |
US Libor + 270 BPS |
March 2022—April 2023 |
||||||||||||
December 2015 |
290.0 |
186.8 |
US Libor + 210 BPS |
December 2022 |
||||||||||||
October 2016 |
220.0 |
130.9 |
US Libor + 260 BPS |
November 2023 |
||||||||||||
June 2017 |
160.8 |
119.6 |
US Libor + 230 BPS |
June 2023 |
||||||||||||
March 2019 |
107.0 |
100.1 |
US Libor + 240 BPS |
March 2025 |
||||||||||||
October 2019** |
69.1 |
68.2 |
US Libor + 185 BPS |
October 2026 |
||||||||||||
Total |
$ | 1,125.0 |
$ | 716.9 |
* | The January 2015 facility tranches mature over a range of dates, from March 2022 to April 2023. |
** | The October 2019 loan facility relates to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9 (Variable Interest Entities) to our consolidated financial statements). |
• | the borrowers have liquidity (including undrawn available lines of credit with a maturity exceeding 12 months) of no less than (i) $25.0 or $35.0 million, or (ii) 5% of Net Debt or total debt, as applicable, whichever is greater; |
• | the ratio of EBITDA to Interest Expense (each as defined in the applicable secured term loan facility and revolving credit facility or as amended), on a trailing four quarter basis, is no less than 2.00 to 1.00, until September 30, 2020 and no less than 2.50 to 1.00 or 3.00 to 1.00 thereafter; and |
• | the borrower must maintain a minimum ratio of shareholder equity to total assets of 30%; |
• | we and our subsidiaries maintain a minimum liquidity of no less than $25.0 million; |
• | we and our subsidiaries maintain an Interest Coverage Ratio (as defined in the 2017 Bond Agreement) of not less than 2.0 to 1.0; and |
• | we and our subsidiaries maintain an Equity Ratio (as defined in the amended 2017 Bond Agreement) of at least 30%. |
• | we and our subsidiaries maintain a minimum liquidity of no less than $25.0 million; and |
• | we and our subsidiaries maintain an Equity Ratio of at least 30%. |
C. |
Research and Development Patents and Licenses etc. |
D. |
Trend Information |
E. |
Off-Balance Sheet Arrangements |
F. |
Tabular Disclosure of Contractual Obligations |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
|||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||||||
Marine Export Terminal capital contributions |
17,100 |
7,400 |
— |
— |
— |
— |
— |
24,500 |
||||||||||||||||||||||||
Secured term loan facilities and revolving credit facilities |
66,534 |
66,534 |
259,053 |
193,078 |
9,150 |
54,387 |
— |
648,736 |
||||||||||||||||||||||||
2017 Bonds |
— |
100,000 |
— |
— |
— |
— |
— |
100,000 |
||||||||||||||||||||||||
2018 Bonds |
— |
— |
— |
71,697 |
— |
— |
— |
71,697 |
||||||||||||||||||||||||
Office operating leases** |
1,534 |
1,534 |
249 |
— |
— |
— |
— |
3,317 |
||||||||||||||||||||||||
Navigator Aurora Facility* |
— |
— |
— |
— |
— |
— |
68,206 |
68,206 |
||||||||||||||||||||||||
Total contractual obligations |
$ | 85,168 |
$ | 175,468 |
$ | 259,302 |
$ | 264,775 |
$ | 9,150 |
$ | 54,387 |
$ | 68,206 |
$ | 916,456 |
||||||||||||||||
* | The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9 (Variable Interest Entities) to our consolidated financial statements. |
** | The Company occupies office space in London with a lease that commenced in January 2017 for a period of 10 years with a mutual break option in January 2022, which is the fifth anniversary from the lease commencement date. This break option is recognized in the table above but has not been included as part of the right-of-use asset and lease liability associated with the lease. Please read Note 21 (Operating Lease Liabilities) to our consolidated financial statements. |
G. |
Safe Harbor |
• | refinancing one or more secured credit facilities |
• | raising debt against the Company’s four unsecured vessels of up to $60 million; |
• | seeking the agreement of its lenders to defer one or more quarterly loan amortization payments of approximately $17 million per quarter; |
• | seeking an extension to the maturity of the bond; |
• | seeking to raise the capital required by a sale and leaseback of up to seven of the Company’s vessels which the Company estimates could yield up to $138 million of additional funding after repaying existing debt facilities which are secured on the Company’s vessels; or |
• | raising alternative debt through a combination of the options set out above under the increasing liquidity discussion. |
Operating Vessel |
December 31, 2019 Carrying Value |
|||
(in millions) |
||||
Navigator Aries |
$ | 40.1 |
||
Navigator Atlas |
44.9 |
|||
Navigator Aurora |
73.7 |
|||
Navigator Capricorn |
35.7 |
|||
Navigator Centauri |
40.7 |
|||
Navigator Ceres |
40.8 |
|||
Navigator Ceto |
40.8 |
|||
Navigator Copernico |
41.2 |
|||
Navigator Eclipse |
74.3 |
|||
Navigator Europa |
44.5 |
|||
Navigator Galaxy |
35.6 |
|||
Navigator Gemini |
42.2 |
|||
Navigator Genesis |
35.7 |
|||
Navigator Global |
35.5 |
|||
Navigator Glory |
34.0 |
|||
Navigator Gusto |
36.1 |
|||
Navigator Grace |
33.4 |
|||
Navigator Jorf |
49.0 |
|||
Navigator Leo |
41.2 |
|||
Navigator Libra |
41.5 |
|||
Navigator Luga |
49.7 |
|||
Navigator Magellan |
18.1 |
|||
Navigator Mars |
28.4 |
|||
Navigator Neptune |
28.7 |
|||
Navigator Nova |
75.4 |
|||
Navigator Oberon |
44.6 |
|||
Navigator Pegasus |
38.7 |
|||
Navigator Phoenix |
39.6 |
|||
Navigator Pluto |
29.0 |
|||
Navigator Prominence |
79.5 |
|||
Navigator Saturn |
28.6 |
|||
Navigator Scorpio |
38.3 |
|||
Navigator Taurus |
43.1 |
|||
Navigator Triton |
44.6 |
|||
Navigator Umbrio |
45.1 |
|||
Navigator Venus |
28.6 |
|||
Navigator Virgo |
38.8 |
|||
Navigator Yauza |
49.8 |
Item 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Name |
Age |
Position | ||||
David J. Butters |
79 |
Chairman of the Board | ||||
Dr. Henry Deans |
52 |
Director and Chief Executive Officer | ||||
Dr. Heiko Fischer |
52 |
Director | ||||
David Kenwright |
72 |
Director | ||||
Hal Malone |
45 |
Director | ||||
Alexander Oetker |
44 |
Director | ||||
Florian Weidinger |
38 |
Director |
Name |
Age |
Position | ||||
David J. Butters |
79 |
Executive Chairman | ||||
Dr. Henry Deans |
52 |
Chief Executive Officer | ||||
Niall Nolan |
56 |
Chief Financial Officer | ||||
Oeyvind Lindeman |
40 |
Chief Commercial Officer | ||||
Paul Flaherty |
55 |
Director of Fleet & Technical Operations | ||||
Demetris Makaritis |
36 |
Director of Commercial Operations |
B. |
Compensation |
C. |
Board Practices |
D. |
Employees |
E. |
Share Ownership |
Item 7. |
Major Shareholders and Related Party Transactions |
A. |
Major Shareholders |
• | each person known by us to be a beneficial owner of more than 5.0% of our common stock; |
• | each of our directors; |
• | each of our named executive officers; and |
• | all directors and executive officers as a group. |
Common Stock Beneficially Owned |
||||||||
Name of Beneficial Owner |
Shares (1) |
Percent |
||||||
WLR Group (2) |
21,863,874 |
39.2 |
% | |||||
David J. Butters (3) |
2,195,430 |
3.9 |
% | |||||
Dr. Henry Deans |
5,000 |
* |
||||||
Dr. Heiko Fischer (4) |
58,771 |
* |
||||||
David Kenwright |
40,171 |
* |
||||||
Hal Malone (5) |
— |
* |
||||||
Alexander Oetker |
5,425 |
* |
||||||
Florian Weidinger |
36,671 |
* |
||||||
Paul Flaherty |
19,159 |
* |
||||||
Oeyvind Lindeman |
17,915 |
* |
||||||
Demetris Makaritis |
12,949 |
* |
||||||
Niall Nolan |
129,984 |
* |
||||||
All executive officers and directors as a group (11 persons) |
2,521,475 |
4.5 |
% |
* | Less than 1%. |
(1) | Unless otherwise indicated, all shares of common stock are owned directly by the named holder and such holder has sole power to vote and dispose of such shares. Unless otherwise noted, the address for each beneficial owner named above is: 650 Madison Avenue, 25 th Floor, New York, New York 10022. |
(2) | Represents 13,058,516 shares of common stock held directly by WLR Recovery Fund IV DSS AIV, L.P., 4,422,528 shares of common stock held directly by WLR Recovery Fund V DSS AIV, L.P., 4,288,484 shares of common stock held directly by WLR Select Co-Investment, L.P., 52,727 shares of common stock held directly by WLR IV Parallel ESC, L.P. and 41,619 shares of common stock held directly by WLR V Parallel ESC, L.P. (collectively, the “WLR Investors”). Invesco Private Capital, Inc. is the managing member of Invesco WLR IV Associates LLC, which in turn is the general partner of WLR IV Parallel ESC, L.P. Invesco Private Capital, Inc. is also the managing member of Invesco WLR V Associates LLC, which in turn is the general partner of WLR V Parallel ESC, L.P. WLR Select Associates DSS GP, Ltd. is the general partner of WLR Select Associates DSS, L.P. WL Ross & Co. LLC, is the managing member of WLR Select Associates LLC, which in turn is the general partner of WLR Select Co-Investment, L.P. WLR Recovery Associates IV DSS AIV GP, Ltd. is the general partner of WLR Recovery Associates IV DSS AIV, L.P., which in turn is the general partner of WLR Recovery Fund IV DSS AIV, L.P. WLR Recovery Associates V DSS AIV GP, Ltd. is the general partner of WLR Recovery Associates V DSS AIV, L.P., which in turn is the general partner of WLR Recovery Fund V DSS AIV, L.P. The address of each of the entities and persons identified in this note is c/o WL Ross & Co. LLC, 1166 Avenue of the Americas, New York, NY 10036. |
(3) | Includes 150,000 shares of common stock that are owned by the spouse of Mr. Butters, for which he disclaims beneficial ownership. |
(4) | Represents shares of common stock held directly by Dr. Fischer. Dr. Fischer is a Board designee of WL Ross & Co. LLC. Dr. Fischer disclaims beneficial ownership over the shares held or controlled by the WLR Group. |
(5) | Represents shares of common stock held directly by Mr. Malone. Mr. Malone is a Board designee of WL Ross & Co. LLC. Mr. Malone disclaims beneficial ownership over the shares held or controlled by the WLR Group. |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
Item 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
Item 9. |
The Offer and Listing |
A. |
Offer and Listing Details |
B. |
Plan of distribution |
C. |
Markets |
Item 10. |
Additional Information |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
(1) | Investor Rights Agreement, dated November 5, 2013, among Navigator Holdings Ltd., WL Ross & Co. LLC and certain of its affiliates named therein. See “Item 7—Major Shareholders and Related Party Transactions—Related Party Transactions—Investor Rights Agreement”. |
(2) | Joint Venture Agreement, dated August 4, 2010, among PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited and PT Navigator Khatulistiwa. On August 4, 2010, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited and PT Navigator Khatulistiwa, an Indonesian limited liability company, or “PTNK,” entered into a Joint Venture Agreement, or the “JV Agreement.” Our operations in Indonesia are subject, among other things, to the Indonesian Shipping Act. That law generally provides that in order for certain vessels involved in Indonesian cabotage to obtain the requested licenses, the owners must either be wholly Indonesian owned or have a majority Indonesian shareholding. Navigator Pluto Navigator Aries |
(3) | Supplemental Deed, dated February 13, 2014, among PT Navigator Khatulistiwa, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited, Falcon Funding Ptd. Ltd. and Navigator Gas L.L.C. On February 13, 2014, PTNK, PT Persona Sentra Utama, PT Mahameru Kencana Abadi, Navigator Gas Invest Limited, Falcon Funding Pte. Ltd and Navigator Gas L.L.C. entered into a Supplemental Deed under which the JV Agreement was amended to include Navigator Global Navigator Pluto Navigator Aries |
(4) | $278.1 million Facility Agreement, by and among Navigator Atlas L.L.C, Navigator Europa L.L.C., Navigator Oberon L.L.C., Navigator Triton L.L.C., Navigator Umbrio L.L.C., Navigator Centauri L.L.C., Navigator Ceres L.L.C., Navigator Ceto L.L.C. and Navigator Copernico L.L.C, Navigator Holdings Ltd. and Navigator Gas L.L.C., Credit Agricole Corporate and Investment Bank, HSH Nordbank Ag and NIBC Bank N.V. as the arrangers and Credit Agricole as agent, and a group of financial institutions as lenders, dated as of January 27, 2015. See Item 5 “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—January 2015 Secured Term Loan Facility.” |
(5) | $290.0 million Facility Agreement, by and among Navigator Gas L.L.C., Nordea Bank AB, ABN Amro Bank N.V., Danmarks Skibskredit A/S, National Australia Bank Limited, ING Bank N.V. and Credit Agricole Corporate and Investment Bank as the arrangers and Nordea Bank AB and ABN Amro Bank N.V as agent and a group of financial institutions as lenders, dated as of December 21, 2015. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—December 2015 Revolving Credit Facility.” |
(6) | Bond Agreement between Navigator Holdings Ltd. and Nordic Trustee AS on behalf of the Bondholders in the bond issue of 7.75% Navigator Holdings Ltd. Senior Unsecured Callable Bonds dated February 10, 2017. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2017 Senior Unsecured Bonds.” |
(7) | Amendment to the Bond Agreement, dated September 30, 2019 by and among Navigator Holdings Ltd. and the Nordic Trustee, relating to Bond agreement between Navigator Holdings Ltd. and Nordic Trustee AS on behalf of the Bondholders in the bond issue of 7.75% Navigator Holdings Ltd. Senior Unsecured Callable Bonds dated February 10, 2017. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2017 Senior Unsecured Bonds.” |
(8) | $220.0 million Secured Facility Agreement, dated October 28, 2016, by and among Navigator Gas L.L.C. as borrower, Navigator Holdings Ltd., as guarantor, and the lenders named therein. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—October 2016 Secured Term Loan Facility.” |
(9) | $160.8 million Secured Facility Agreement dated June 30, 2017, by and among Navigator Gas L.L.C. as borrower, Navigator Holdings Ltd., as guarantor, and the lenders named therein. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—June 2017 Secured Term Loan Facility.” |
(10) | Bond Terms between Navigator Holdings Ltd., as issuer, and Nordic Trustee AS, as bond trustee and security agent, in the bond issue of NIBOR+6.0% Navigator Holdings Ltd. Senior Secured Callable NOK Bonds dated November 1, 2018. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—2018 Senior Secured Bonds.” |
(11) | $107.0 million Secured Facility Agreement, dated March 25, 2019, by and among Navigator Atlas L.L.C., Navigator Europa L.L.C., Navigator Oberon L.L.C. and Navigator Triton L.L.C. as borrowers, Navigator Gas L.L.C. and Navigator Holdings Ltd. as guarantors, Credit Agricole Corporate and Investment Bank, ING Bank, a branch of ING—DIBA AG and Skandinaviska Enskilda Banken AB (Publ), as arrangers and Credit Agricole Corporate and Investment Bank, as agent. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities and Facility Limits—March 2019 Secured Term Loan Facility.” |
(12) | $75.0 million Credit Agreement dated March 29, 2019, between Navigator Ethylene Terminals L.L.C. as borrower, and ING Capital L.L.C. and SG Americas Securities L.L.C. as arrangers. See “Item 5—Operating and Financial Review and Prospects—Liquidity and Capital Resources—Terminal Facility.” |
D. |
Exchange Controls |
E. |
Taxation |
• | an individual U.S. citizen or resident (as determined for U.S. federal income tax purposes); |
• | a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) organized under the laws of the United States or its political subdivisions; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes. |
• | at least 75.0% of our gross income (including the gross income of our vessel-owning subsidiaries) for such taxable year consists of passive income (e.g., dividends, interest, capital gains from the sale or exchange of investment property and rents derived other than in the active conduct of a rental business), or |
• | at least 50.0% of the average value of the assets held by us (including the assets of our vessel-owning subsidiaries) during such taxable year produce, or are held for the production of, passive income. |
• | the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock; |
• | the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income; and |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayers for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such year. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that he has failed to report all interest or corporate distributions required to be reported on his U.S. federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
F. |
Dividends and Paying Agents |
G. |
Statements by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
Item 11. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 12. |
Description of Securities Other than Equity Securities |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16G. |
Corporate Governance |
Item 16H. |
Mine Safety Disclosure |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
F- 7 |
||||
F- 8 |
||||
F- 9 |
||||
F- 10 |
||||
F- 11 |
||||
F- 12 |
Item 19. |
Exhibits |
Exhibit Number |
Description | |||
1.1 |
||||
1.2 |
||||
2.1 |
||||
2.2 |
||||
2.3 |
||||
2.5 |
||||
2.6 |
A description of the rights of each class of securities that is registered under Section 12 of the Exchange Act as of December 31, 2019. | |||
4.1 |
Exhibit Number |
Description | |||
4.2 |
||||
4.3 |
||||
4.4 |
||||
4.5 |
||||
4.6 |
||||
4.7 |
||||
4.8 |
||||
4.9 |
||||
4.10 |
Exhibit Number |
Description | |||
4.11 |
||||
4.12 |
||||
8.1* |
||||
12.1* |
||||
12.2* |
||||
13.1* |
||||
13.2* |
||||
15.1* |
||||
15.2* |
||||
101. INS* |
XBRL Instance Document | |||
101. SCH* |
XBRL Taxonomy Extension Schema | |||
101. CAL* |
XBRL Taxonomy Extension Schema Calculation Linkbase | |||
101. DEF* |
XBRL Taxonomy Extension Schema Definition Linkbase | |||
101. LAB* |
XBRL Taxonomy Extension Schema Label Linkbase | |||
101. PRE* |
XBRL Taxonomy Extension Schema Presentation Linkbase |
* | Filed herewith. |
NAVIGATOR HOLDINGS LTD. | ||||||
Date: May 8, 2020 |
By: |
/s/ Niall Nolan | ||||
Name: |
Niall Nolan | |||||
Title: |
Chief Financial Officer (Principal Financial Officer) |
NAVIGATOR HOLDINGS LTD. |
||||
AUDITED CONSOLIDATED FINANCIAL STATEMENTS |
||||
F-2, F- 4 |
||||
F- 6 |
||||
F- 7 |
||||
F- 8 |
||||
F- 9 |
||||
F- 10 |
||||
F- 11 |
||||
F- 12 |
• | a lack of sufficient effective controls over prospective financial information used in the Company’s going concern assessment; |
• | a lack of sufficient accounting and financial reporting personnel with requisite knowledge and experience in the application of U.S. GAAP and SEC financial reporting requirements; and |
• | manage access and manage change for IT systems at one of the Company’s third party technical managers. |
December 31, 2018 |
December 31, 2019 |
|||||||
(in thousands, except share data) |
||||||||
Assets |
||||||||
Current assets |
||||||||
Cash, cash equivalents and restricted cash |
$ |
|
$ |
|
||||
Accounts receivable, net |
|
|
||||||
Accrued income |
|
|
||||||
Prepaid expenses and other current assets |
|
|
||||||
Bunkers and lubricant oils |
|
|
||||||
Insurance Receivable |
|
|
||||||
Total current assets |
|
|
||||||
Non-current assets |
||||||||
Vessels, net |
|
|
||||||
Property, plant and equipment, net |
|
|
||||||
Investment in equity accounted joint venture |
|
|
||||||
Right-of-use asset for operating leases |
— |
|
||||||
Total non-current assets |
|
|
||||||
Total assets |
$ |
|
$ |
|
||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities |
||||||||
Current portion of secured term loan facilities, net of deferred financing costs |
$ |
|
$ |
|
||||
Current portion of operating lease liabilities |
— |
|
||||||
Accounts payable |
|
|
||||||
Accrued expenses and other liabilities |
|
|
||||||
Accrued interest |
|
|
||||||
Deferred income |
|
|
||||||
Amounts due to related parties |
— |
|
||||||
Total current liabilities |
|
|
||||||
Non-current Liabilities |
||||||||
Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs |
|
|
||||||
Senior secured bond, net of deferred financing costs |
|
|
||||||
Senior unsecured bond, net of deferred financing costs |
|
|
||||||
Derivative liabilities |
|
|
||||||
Operating lease liabilities, net of current portion |
— |
|
||||||
Amounts due to related parties |
— |
|
||||||
Total non-current liabilities |
|
|
||||||
Total Liabilities |
|
|
||||||
Commitments and contingencies (see note 15) |
||||||||
Stockholders’ equity |
||||||||
Common stock—$ par value per share; shares authorized; shares issued and outstanding, (2018: |
|
|
||||||
Additional paid-in capital |
|
|
||||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Retained earnings |
|
|
||||||
Total Navigator Holdings Ltd. stockholders’ equity |
|
|
||||||
Non-controlling interest |
— |
|
||||||
Total equity |
|
|
||||||
Total liabilities and equity |
$ |
|
$ |
|
Year ended December 31, 2017 |
Year ended December 31, 2018 |
Year ended December 31, 2019 |
||||||||||
(in thousands, except per share data) |
||||||||||||
Revenues |
||||||||||||
Operating revenue |
$ | |
$ | |
$ | |
||||||
|
|
|
||||||||||
Expenses |
||||||||||||
Brokerage commissions |
|
|
|
|||||||||
Voyage expenses |
|
|
|
|||||||||
Vessel operating expenses |
|
|
|
|||||||||
Depreciation and amortization |
|
|
|
|||||||||
General and administrative costs |
|
|
|
|||||||||
Total operating expenses |
|
|
|
|||||||||
Operating income |
|
|
|
|||||||||
Other income/(expense) |
||||||||||||
Foreign currency exchange gain on senior secured bonds |
— |
|
|
|||||||||
Unrealized loss on non-designated derivative instruments |
— |
( |
) | ( |
) | |||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Write off of deferred financing costs |
( |
) | — |
( |
) | |||||||
Write off of call premium and redemption charges of |
( |
) | — |
— |
||||||||
Interest income |
|
|
|
|||||||||
Income/(loss) before income taxes and share of result of equity accounted joint venture |
|
( |
) | ( |
) | |||||||
Income taxes |
( |
) | ( |
) | ( |
) | ||||||
Share of result of equity accounted joint venture |
— |
( |
) | ( |
) | |||||||
Net income/(loss) |
|
( |
) | ( |
) | |||||||
Net income attributable to non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Earnings/(loss) per share attributable to stockholders of Navigator Holdings Ltd.: |
||||||||||||
Basic: |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Diluted: |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Weighted average number of shares outstanding: |
||||||||||||
Basic: |
|
|
|
|||||||||
Diluted: |
|
|
|
|||||||||
Year ended December 31, 2017 (in thousands) |
Year ended December 31, 2018 (in thousands) |
Year ended December 31, 2019 (in thousands) |
||||||||||
Net income /(loss) |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Other comprehensive income / (loss): |
||||||||||||
Foreign currency translation gain / (loss) |
|
( |
) | |
||||||||
Total comprehensive income / ( loss) |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Other comprehensive income / (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders of Navigator Holdings Ltd: |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Non-controlling interests: |
|
|
— |
|
|
|
— |
|
|
|
|
|
Total comprehensive income / ( loss) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
Common stock |
||||||||||||||||||||||||||||
Number of shares (Note 13) |
Amount 0.01 par value (Note 13) |
Additional Paid-in Capital(Note 13) |
Accumulated Other Comprehensive Income (Loss) |
Retained Earnings |
Non-controlling interest |
Total |
||||||||||||||||||||||
January 1, 2017 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
— |
$ |
|
||||||||||||||
Restricted shares issued March 23, 2017 |
|
|
— |
— |
— |
— |
|
|||||||||||||||||||||
Net income |
— |
— |
— |
— |
|
— |
|
|||||||||||||||||||||
Foreign currency translation |
— |
— |
— |
|
— |
— |
|
|||||||||||||||||||||
Share-based compensation plan |
— |
— |
|
— |
— |
— |
|
|||||||||||||||||||||
December 31, 2017 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
— |
$ |
|
||||||||||||||
Adjustment to equity for the adoption of the new revenue standard |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Forfeited shares-2013 long-term equity incentive plan |
( |
) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||
Restricted shares issued March 20, 2018 |
|
|
— |
— |
— |
— |
|
|||||||||||||||||||||
Net income |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Foreign currency translation |
— |
— |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||||
Share-based compensation plan |
— |
— |
|
— |
— |
— |
|
|||||||||||||||||||||
December 31, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
— |
$ |
|
||||||||||||||
Adjustment to equity for the adoption of the new lease standard |
— |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||||
Restricted shares issued March 20, 2019 |
|
|
— |
— |
— |
— |
|
|||||||||||||||||||||
Restricted shares cancelled August 14, 2019 |
( |
) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||
Net income |
— |
— |
— |
— |
( |
) |
|
( |
) | |||||||||||||||||||
Foreign currency translation |
— |
— |
— |
|
— |
— |
|
|||||||||||||||||||||
Share-based compensation plan |
— |
— |
|
— |
— |
— |
|
|||||||||||||||||||||
December 31, 2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
|
||||||||||||||
Year ended December 31, 2017 (in thousands) |
Year ended December 31, 2018 (in thousands) |
Year ended December 31, 2019 (in thousands) |
||||||||||
Cash flows from operating activities |
||||||||||||
Net income/(loss) |
$ |
|
$ |
( |
) |
$ |
( |
) | ||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities |
||||||||||||
Unrealized loss on non-designated derivative instruments |
— |
|
|
|||||||||
Depreciation and amortization |
|
|
|
|||||||||
Payment of drydocking costs |
( |
) |
( |
) |
( |
) | ||||||
Amortization of share-based compensation |
|
|
|
|||||||||
Amortization of deferred financing costs |
|
|
|
|||||||||
Share of result of equity accounted joint venture |
— |
|
|
|||||||||
Call option premium on redemption of % unsecured bond |
|
— |
— |
|||||||||
Prior year expenses recovered from insurance claim |
( |
) |
— |
— |
||||||||
Insurance claim receivable |
( |
) |
( |
) |
( |
) | ||||||
Unrealized foreign exchange gain on senior secured bonds |
— |
( |
) |
( |
) | |||||||
Other unrealized foreign exchange gain/(loss) |
|
( |
) |
|
||||||||
Changes in operating assets and liabilities |
||||||||||||
Accounts receivable |
( |
) |
( |
) |
( |
) | ||||||
Bunkers and lubricant oils |
( |
) |
( |
) |
( |
) | ||||||
Accrued income, prepaid expenses and other current assets |
( |
) |
|
( |
) | |||||||
Accounts payable, accrued interest, accrued expenses and other liabilities |
|
|
|
|||||||||
Net cash provided by operating activities |
|
|
|
|||||||||
Cash flows from investing activities |
||||||||||||
Additions to vessels and equipment |
( |
) |
( |
) |
( |
) | ||||||
Investment in equity accounted joint venture |
— |
( |
) |
( |
) | |||||||
Payment for vessels under construction |
( |
) |
— |
— |
||||||||
Purchase of other property, plant and equipment |
( |
) |
( |
) |
( |
) | ||||||
Receipt of shipyard penalty payments |
|
— |
— |
|||||||||
Placement of short term investment |
( |
) |
— |
— |
||||||||
Release of short term investment |
|
— |
— |
|||||||||
Insurance recoveries |
|
|
|
|||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
Cash flows from financing activities |
||||||||||||
Proceeds from secured term loan facilities and revolving credit facilities |
|
|
|
|||||||||
Proceeds from refinancing of vessel to related parties |
— |
— |
|
|||||||||
Issuance of senior secured bonds |
— |
|
— |
|||||||||
Issuance of % senior unsecured bonds |
|
— |
— |
|||||||||
Repayment of % senior unsecured bonds |
( |
) |
— |
— |
||||||||
Issuance cost of senior secured bonds |
— |
( |
) |
( |
) | |||||||
Issuance costs of unsecured bond amendment |
— |
— |
( |
) | ||||||||
Issuance cost of % senior unsecured bonds |
( |
) |
— |
— |
||||||||
Issuance cost of refinancing of vessel |
— |
— |
( |
) | ||||||||
Direct financing cost of secured term loan and revolving credit facilities |
( |
) |
( |
) |
( |
) | ||||||
Direct financing cost of terminal credit facility |
— |
— |
( |
) | ||||||||
Repayment of secured term loan facilities and revolving credit facilities |
( |
) |
( |
) |
( |
) | ||||||
Repayment of refinancing of vessel to related parties |
— |
— |
( |
) | ||||||||
Net cash provided by/(used in) financing activities |
|
( |
) |
|
||||||||
Net increase/(decrease) in cash, cash equivalents and restricted cash |
|
|
( |
) | ||||||||
Cash, cash equivalents and restricted cash at beginning of year |
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at end of year |
$ |
|
$ |
|
$ |
|
||||||
Supplemental Information |
||||||||||||
Total interest paid during the year, net of amounts capitalized |
$ |
|
$ |
|
$ |
|
||||||
Total tax paid during the year |
$ |
|
$ |
|
$ |
|
||||||
• |
refinancing one or more secured credit facilities million ; |
• |
raising debt against the Company’s four unsecured vessels of up to $ million ; |
• |
seeking the agreement of its lenders to defer one or more quarterly loan amortization payments of approximately $ million per quarter; |
• |
seeking an extension to the maturity of the bond; |
• |
seeking to raise the capital required by a sale and leaseback of up to seven of the Company’s vessels which the Company estimates could yield up to $ |
• |
raising alternative debt through a combination of the options set out above under the increasing liquidity discussion. |
Year ended December 31, (in thousands) |
||||||||
2018 |
2019 |
|||||||
Operating revenue: |
||||||||
Time charters |
$ | |
$ | |
||||
Voyage charters (*) |
|
|
||||||
Total operating revenue |
$ | |
$ | |
* |
Voyage Charter revenues: |
(in thousands) |
||||
2020: |
$ |
|
||
2021: |
$ |
|
||
2022: |
$ |
|
||
2023: |
$ |
|
||
2024: |
$ |
|
||
2025 onwards: |
$ |
|
December 31, 2018 |
December 31, 2019 |
|||||||||||
Fair Value Hierarchy Level |
Fair Value Hierarchy Level |
Fair Value Asset (Liability) |
Fair Value Asset (Liability) |
|||||||||
(in thousands) |
||||||||||||
Cross-currency interest rate swap agreement |
Level 2 |
( |
) | ( |
) |
December 31, 2018 |
December 31, 2019 |
|||||||||||||||||||
Fair Value Hierarchy Level |
Fair Value Hierarchy Level |
Carrying Amount Asset (Liability) |
Fair Value Asset (Liability) |
Carrying Amount Asset (Liability) |
Fair Value Asset (Liability) |
|||||||||||||||
(in thousands) |
||||||||||||||||||||
2018 Bonds (note 11) |
Level 2 |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
2017 Bonds (note 12) |
Level 2 |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Secured term loan facilities and revolving credit facilities (note 10) |
Level 2 |
( |
) | ( |
) | ( |
) | ( |
) |
Vessel (in thousands) |
Drydocking (in thousands) |
Total (in thousands) |
||||||||||
Cost |
||||||||||||
December 31, 2017 |
||||||||||||
Additions |
||||||||||||
Write-offs of fully amortized assets |
— |
( |
) | ( |
) | |||||||
December 31, 2018 |
||||||||||||
Additions |
||||||||||||
Write-offs of fully amortized assets |
— |
( |
) | ( |
) | |||||||
December 31, 2019 |
||||||||||||
Accumulated Depreciation |
||||||||||||
December 31, 2017 |
||||||||||||
Charge for the period |
||||||||||||
Write-offs of fully amortized assets |
— |
( |
) | ( |
) | |||||||
December 31, 2018 |
||||||||||||
Charge for the period |
||||||||||||
Write-offs of fully amortized assets |
— |
( |
) | ( |
) | |||||||
December 31, 2019 |
||||||||||||
Net Book Value |
||||||||||||
December 31, 2017 |
$ | $ | $ | |||||||||
December 31, 2018 |
$ | $ | $ | |||||||||
December 31, 2019 |
$ | $ | $ | |||||||||
2018 |
2019 |
|||||||
(in thousands) |
||||||||
Investment in equity accounted joint venture at January 1 |
$ | — |
$ | |||||
Equity contributions to joint venture entity |
||||||||
Share of results |
( |
) | ( |
) | ||||
Capitalized interest and deferred financing costs |
||||||||
Associated costs |
||||||||
Total investment in equity accounted joint venture at December 31 |
$ | $ | ||||||
Corporation Name |
Percentage Ownership as of December 31, |
Country of Incorporation |
Subsidiary of Limited Liability Company |
|||||||||||||
2018 |
2019 |
|||||||||||||||
- Navigator Gas US L.L.C. |
|
% |
|
% |
|
|
||||||||||
- Navigator Gas L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Aries L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Atlas L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Aurora L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Centauri L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Ceres L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Ceto L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Copernico L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Capricorn L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Eclipse L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Europa L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Galaxy L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Gemini L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Genesis L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Glory L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Grace L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Gusto L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Jorf L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Leo L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Libra L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Luga L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Magellan L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Mars L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Neptune L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Nova L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Oberon L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Pegasus L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Phoenix L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Prominence L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Saturn L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Scorpio L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Taurus L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Triton L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Umbrio L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Venus L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Virgo L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Yauza L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ NGT Services (UK) Ltd |
|
% |
|
% |
|
|
||||||||||
~ NGT Services (Poland) Sp. z.o.o. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Gas Ship Management Ltd. |
|
% |
|
% |
|
|
||||||||||
~ Falcon Funding PTE Ltd |
|
% |
|
% |
|
|
||||||||||
~ Navigator Gas Invest Ltd |
|
% |
|
% |
|
|
||||||||||
- PT Navigator Khatulistiwa |
|
% |
|
% |
|
|
||||||||||
~ Navigator Terminals L.L.C. |
|
% |
|
% |
|
|
||||||||||
~ Navigator Terminal Invest Ltd |
|
% |
|
% |
|
|
||||||||||
- Navigator Ethylene Terminals L.L.C. |
|
% |
|
% |
|
|
||||||||||
- Enterprise Navigator Ethylene Terminal L.L.C. |
|
% |
|
% |
|
|
December 31, 2019 |
||||
(in thousands) |
||||
Assets |
||||
Cash, cash equivalents and restricted cash |
$ |
|
||
Liabilities |
||||
Amounts due to related parties, current |
$ |
( |
) | |
Amounts due to related parties, non current |
( |
) | ||
$ |
( |
) | ||
December 31, 2018 (in thousands) |
December 31, 2019 (in thousands) |
|||||||
Due within one year |
$ | $ | ||||||
Due in two years |
||||||||
Due in three years |
||||||||
Due in four years |
||||||||
Due in five years |
||||||||
Due in more than five years * |
— |
|||||||
Total secured term loan facilities and revolving credit facility |
$ | $ | ||||||
Less: current portion |
||||||||
Secured term loan facilities and revolving credit facility, non-current portion |
$ | $ | ||||||
* | Includes amounts relating to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9 (Variable Interest Entities) to our consolidated financial statements. |
December 31, 2018 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Current Liability |
||||||||
Current portion of secured term loan facilities |
$ | $ | ||||||
Less: current portion of deferred financing costs |
( |
) | ( |
) | ||||
Current portion of secured term loan facilities, net of deferred financing costs |
$ | $ | ||||||
Non-Current Liability |
||||||||
Secured term loan facilities and revolving credit facilities net of current portion * |
$ | $ | ||||||
Less: non-current portion of deferred financing costs* |
( |
) | ( |
) | ||||
Non-current secured term loan facilities and revolving credit facilities,net of current portion and non-current deferred financing costs* |
$ | $ | ||||||
* | Includes amounts relating to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity (Please read Note 9 (Variable Interest Entities) to our consolidated financial statements. |
December 31, 2018 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Senior Secured Bond |
||||||||
Total Bond |
$ | $ | ||||||
Less deferred financing costs |
( |
) | ( |
) | ||||
Total Bond, net of deferred financing costs |
$ | $ | ||||||
December 31, 2018 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Senior Unsecured Bond |
||||||||
Total Bond |
$ | $ | ||||||
Less deferred financing costs |
( |
) | ( |
) | ||||
Total Bond, net of deferred financing costs |
$ | $ | ||||||
December 31, 2017 |
December 31, 2018 |
December 31, 2019 |
||||||||||
Basic and diluted income/(loss) available to common stockholders (in thousands) |
( |
) | ( |
) | ||||||||
Basic weighted average number of shares |
||||||||||||
Effect of dilutive potential share options*: |
— |
— |
||||||||||
Diluted weighted average number of shares |
* |
Due to a loss for the year s ended December 31, 2019 and , 2018 |
Number of non-vested restricted shares |
Weighted average grant date fair value |
Weighted average remaining contractual term |
||||||||||
Balance as of January 1, 2018 |
|
$ | |
|
||||||||
Granted |
|
|
||||||||||
Vested |
( |
) | |
|||||||||
Forfeited |
( |
) | |
|||||||||
Balance as of December 31, 2018 |
|
$ | |
|
||||||||
Granted |
|
|
||||||||||
Cancelled |
( |
) | |
|||||||||
Vested |
( |
) | |
|||||||||
Balance as of December 31, 2019 |
|
$ | |
|
||||||||
Options |
Number of options outstanding |
Weighted average exercise price per share |
Aggregate intrinsic value |
|||||||||
Balance as of January 1, 2018 |
|
$ |
|
— |
||||||||
Forfeited during the year |
( |
) |
|
— |
||||||||
Balance as of December 31, 2018 |
|
|
$ |
— |
||||||||
Granted during the period |
|
|
— |
|||||||||
Balance as of December 31, 2019 |
|
|
$ |
— |
||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
|||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||||||
Marine Export Terminal capital contributions |
|
|
— |
— |
— |
— |
— |
|
||||||||||||||||||||||||
Secured term loan facilities and revolving credit facilities |
|
|
|
|
|
|
— |
|
||||||||||||||||||||||||
2017 Bonds |
— |
|
— |
— |
— |
— |
— |
|
||||||||||||||||||||||||
2018 Bonds |
— |
— |
— |
|
— |
— |
— |
|
||||||||||||||||||||||||
Office operating leases ** |
|
|
|
— |
— |
— |
— |
|
||||||||||||||||||||||||
Navigator Aurora Facility* |
— |
— |
— |
— |
— |
— |
|
|
||||||||||||||||||||||||
Total contractual obligations |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
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* |
The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 9 (Variable Interest Entities) to our consolidated financial statements. |
** |
The Company occupies office space in London with a lease that commenced in January 2017 for a period of right-of-use asset and lease liability associated with the lease. Please read Note 21 (Operating Lease Liabilities) to our consolidated financial statements. The gross rent per year is approximately $ |
|
2017 (in thousands) |
2018 (in thousands) |
2019 (in thousands) |
|||||||||
Net Income/(loss) |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Tax expense at statutory rate |
$ | |
$ | |
$ | |
||||||
Total statutory tax charge |
$ | |
$ | |
$ | |
||||||
Tax charge in UK subsidiaries |
$ | |
$ | |
$ | |
||||||
Tax credit in Polish subsidiary |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Tax charge in Singapore subsidiary |
$ | |
$ | |
$ | |
||||||
Tax charge in Maltese VIE (note 9) |
|
$ |
|
|
$ |
|
|
$ |
| |||
Total Tax charge |
$ | |
$ | |
$ | |
||||||
19. |
Cash, Cash Equivalents and Restricted Cash |
December 31, 2018 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Cash, Cash Equivalents and Restricted Cash |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Cash and cash equivalents held by the lessor VIE (note 9) |
— |
|||||||
Restricted cash |
||||||||
Total cash, cash equivalents and restricted cash |
$ | $ | ||||||
December 31, 2019 |
||||
(in thousands) |
||||
Income (expenses) |
||||
General and administrative expenses |
$ |
( |
) | |
Interest expense |
( |
) | ||
Total |
$ |
( |
) | |
Receivables (payables) |
||||
Accrued Interest |
$ |
( |
) | |
Navigator Aurora Facility, net of deferred financing costs |
( |
) | ||
Total |
$ |
( |
) | |
(in thousands) |
||||
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 and thereafter |
||||
Total undiscounted operating lease commitments |
$ |
|||
Less: Discount adjustment |
( |
) | ||
Total operating lease liabilities |
$ |
|||
Less: current portion |
( |
) | ||
Operating lease liabilities, non-current portion |
$ |
|||