SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

NAVIOS MARITIME HOLDINGS INC.

(Address of Principal Executive Offices)

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

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes o No þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes o No þ

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

Yes o No þ

 

 

          The information contained in this Report is hereby incorporated by reference into the Navios Registration Statements on Form F-3, File Nos. 333-136936, 333-129382 and 333-165754 and on Form S-8, File No. 333-147186.

Operating and Financial Review and Prospects

          The following is a discussion of the financial condition and results of operations of Navios Maritime Holdings Inc. (“Navios Holdings” or the “Company”) for the three and nine month periods ended September 30, 2010 and 2009. All of these financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). You should read this section together with the consolidated financial statements and the accompanying notes included in Navios Holdings’ 2009 annual report filed on Form 20-F with the Securities and Exchange Commission.

          This report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. These forward looking statements are based on Navios Holdings’ current expectations and observations. Included among the factors that, in management’s view, could cause actual results to differ materially from the forward-looking statements contained in this report are changes in any of the following: (i) charter demand and/or charter rates, (ii) production or demand for the types of drybulk products that are transported by Navios Holdings’ vessels, (iii) operating costs including but not limited to changes in crew salaries, insurance, provisions, repairs, maintenance and overhead expenses, or (iv) changes in interest rates.

Recent Developments

Navios Maritime Holdings Inc.

Vessel Sales

          On November 15, 2010, Navios Holdings sold the Navios Melodia, a 2010 South Korean-built Capesize vessel of 179,132 deadweight ton (“dwt”), and the Navios Fulvia, a 2010 South Korean-built Capesize vessel of 179,263 dwt, to Navios Maritime Partners L.P. (“Navios Partners”) for a total of $177.0 million, payable in the form of $162.0 million in cash and 788,370 common units in Navios Partners.

Purchase of Convertible Senior Promissory Note

          On November 3, 2010, Navios Holdings agreed to purchase the 2% convertible senior promissory note that was previously issued at par value of $33.5 million for an aggregate price of $29.1 million, representing a 13% discount. The closing of the purchase and sale of the convertible senior promissory note took place on November 16, 2010.

New Borrowings

          In September 2010, Navios Holdings entered into a facility agreement with Emporiki Bank of Greece S.A. of up to $40.0 million in order to partially finance the construction of one Capesize bulk carrier. The loan is repayable in 20 semi-annual installments of $1.5 million each, with a final balloon payment of $10.0 million on the last payment date. It bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the amount drawn was $21.0 million.

          In August 2010, Navios Holdings entered into a facility agreement with DNB NOR BANK ASA of up to $40.0 million in order to partially finance the construction of one Capesize bulk carrier. The loan is repayable three months following the delivery of the Capesize vessel in 24 quarterly installments of $0.7 million each, with a final balloon payment of $24.5 million on the last payment date. It bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the amount drawn was $14.0 million.

Vessel Acquisitions

          On November 17, 2010, the Navios Luz, a new, 179,144 dwt Capesize vessel, was delivered from a South Korean shipyard to Navios Holdings’ owned fleet. The vessel is chartered-out for 10 years at a net rate of $29,356 per day with 50/50 profit sharing.

          On October 29, 2010, the Navios Buena Ventura, a 179,132 dwt new build Capesize vessel, was delivered from a South Korean shipyard to Navios Holdings’ owned fleet. The vessel is chartered-out for 10 years at a net rate of $29,356 per day with 50/50 profit sharing. The vessel’s purchase price was approximately $79.5 million, part of which was financed through $39.0 million kept in a pledged account, through the issuance of $2,500 shares of preferred stock that have a nominal value of $25.0 million, and the remaining was paid in cash.

          On October 1, 2010, the Navios Fulvia, a 2010-built, 179,263 dwt Capesize vessel, was delivered to Navios Holdings from a South Korean shipyard. The vessel’s acquisition price was approximately $67.6 million, of which $21.6 million was paid in cash, $37.0 million was financed through funds kept in a pledged account and the remaining was funded through the issuance of 1,870 shares of preferred stock that have a nominal value of $18.7 million and a fair value of $9.1 million. This vessel was sold to Navios Partners on November 15, 2010 for total consideration of $98.2 million.

          On September 20, 2010, the Navios Melodia, a 2010-built, 179,132 dwt Capesize vessel, was delivered to Navios Holdings from a South Korean shipyard. The vessel’s acquisition price was approximately $69.0 million, of which $19.6 million was paid in cash, $37.0 million financed through funds kept in a pledged account and the remaining was funded through the issuance of 2,500 shares of preferred stock that have a nominal value of $25.0 million and a fair value of $12.4 million. This vessel was sold to Navios Partners on November 15, 2010 for total consideration of $78.8 million.

Dividend Policy

          On November 12, 2010, the Board of Directors declared a quarterly cash dividend for the third quarter of 2010 of $0.06 per share of common stock. This dividend is payable on January 5, 2011 to stockholders of record on December 16, 2010. The declaration and payment of any further dividend remains subject to the discretion of the Board, and will depend on, among other things, Navios Holdings’ cash requirements as measured by market opportunities, debt obligations and restrictions under its credit agreements.

Changes in Capital Structure

          Issuance of Common Stock: During the nine months ended September 30, 2010, 15,652 restricted shares of common stock were issued to Navios Holdings’ employees following the vesting of restricted stock units. In addition, on February 26, 2010 and on May 31, 2010, 2,250 shares of restricted common stock, respectively, were forfeited. On June 2, 2010, on July 1, 2010 and on September 9, 2010, 86,328, 15,000 and 29,249 shares, respectively, were issued upon the exercise of the outstanding stock options. The options were exercised for cash at an exercise price of $3.18 per share.

          Issuance of Preferred Stock: Navios Holdings issued 1,780 shares of preferred stock at $10,000 nominal value per share to partially finance the acquisition of the Navios Antares on January 20, 2010. On January 27, 2010, Navios Holdings issued an additional 300 shares of preferred stock at $10,000 nominal value per share to partially finance the acquisition of one newbuild Capesize vessel. On July 31, 2010 and August 31, 2010, Navios Holdings issued 2,500 and 1,870 shares, respectively, of preferred stock at $10,000 nominal value per share to partially finance the acquisition of the Navios Melodia and the Navios Fulvia, respectively.

          Following the issuances and cancellations of the shares, described above, Navios Holdings had, as of September 30, 2010, 101,017,178 shares of common stock and 14,651 shares of preferred stock outstanding.

          Share Repurchase Program: On November 14, 2008, the Board of Directors approved a share repurchase program authorizing the purchase of up to $25.0 million of Navios Holdings’ common stock pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The program does not require any minimum purchase or any specific number or amount of shares and may be suspended or reinstated at any time in Navios Holdings’ discretion and without notice. During the nine month period ended September 30, 2010, no shares were repurchased under this program. Since the initiation of the program and through September 30, 2010, 907,480 shares have been repurchased for a total consideration of $1.7 million.

Navios Maritime Partners L.P.

          On November 12, 2010, Navios Holdings received an amount of $5.6 million as a dividend distribution from its affiliate Navios Partners.

          On October 14, 2010, Navios Partners completed its public offering of 5,500,000 common units at $17.65 per unit and raised gross proceeds of approximately $97.1 million to fund its fleet expansion. Pursuant to this offering, Navios Partners issued 112,245 additional general partnership units to its general partner. The net proceeds from the issuance of the general partnership units were $2.0 million. On the same date, Navios Partners completed the exercise of the overallotment option, previously granted to the underwriters in connection with the offering of 5,500,000 common units, and issued 825,000 additional common units at the public offering price less the underwriting discount. As a result of the exercise of the overallotment option, Navios Partners raised additional gross proceeds of $14.5 million and net proceeds of approximately $13.9 million. Navios Partners issued 16,837 additional general partnership units to its general partner. The net proceeds from the issuance of the additional general partnership units were $0.3 million. Following this offering Navios Holdings’ interest in Navios Partners decreased to 27.5% (which includes a 2% general partner interest).

Navios South American Logistics Inc.

          On September 16, 2010, Navios South America Logistics Inc. (“Navios Logistics”) entered into a three-year charter-in agreement for 15 tank barges, of which 13 tank barges have already been delivered. The 13 delivered tank barges have a total capacity of 23,784 cubic meters.

          In September 2010, Navios Logistics acquired an additional piece of land located in the southern part of the Nueva Palmira Free Zone as part of a project to develop a new transshipment facility for mineral ores and liquid bulks.

Navios Maritime Acquisition Corporation

Public Offering

          On November 16, 2010, Navios Maritime Acquisition Corporation (“Navios Acquisition”) priced an offering of 6,500,000 shares of common stock at $5.50 per share in a public offering. Navios Acquisition granted the underwriters a 30-day option to purchase an additional 975,000 shares of common stock to cover over-allotments, if any. Navios Acquisition expects to use the net proceeds from the public offering for general corporate purposes.

$400.0 million 8 5/8% First Priority Ship Mortgage Notes Due 2017

          On October 21, 2010, Navios Acquisition completed the sale of $400.0 million of 8 5/8% First Priority Ship Mortgage notes due 2017 (the “Ship Mortgage Notes”). The Ship Mortgage Notes are secured by first priority ship mortgages on six very large crude carrier vessels (“VLCC”) aggregating approximately 1.8 million dwt owned by certain subsidiary guarantors. The Ship Mortgage Notes are guaranteed by each of Navios Acquisition’s direct and indirect subsidiaries.

          The net proceeds of the offering totalling $386.5 million were used (a) to repay borrowings under certain of Navios Acquisition’s existing credit facilities, (b) to partially repay $27.6 million of the $40.0 million Navios Holdings credit facility, and (c) for working capital purposes.

Delivery of the Chemical Tanker Vessel Nave Cosmos

          On October 27, 2010, Navios Acquisition took delivery of the chemical tanker Nave Cosmos of 25,130 metric tons from a South Korean shipyard into its owned fleet. The vessel is chartered out for three months with an option for three additional months at a net daily charter rate of $10,238 for the first three months and $12,188 for the optional months.

Acquisition of two new build LR1 product tankers

          On October 26, 2010, Navios Acquisition entered into agreements to acquire two 75,000 dwt LR1 product tankers scheduled for delivery in the fourth quarter of 2011 from a South Korean shipyard. The nominal acquisition price of $87.0 million will be financed with (a) issuance of $5.4 million mandatorily convertible preferred stock, (b) a new credit facility of $52.2 million and (c) $29.4 million cash on hand.

Issuance of Preferred Stock

          During the nine months ended September 30, 2010, Navios Acquisition issued 3,000 shares of preferred stock at $10,000 nominal value per share as compensation for consulting services that can be converted into shares of common stock. All above-mentioned issued shares of preferred stock were recorded at fair market value on issuance. During the nine months ended September 30, 2010, Navios Acqusisition recorded an expense of $5.6 million representing the fair value of the shares on that date with equal increase in its Additional Paid in Capital.

Warrant Tender Program

          On September 2, 2010, Navios Acquisition announced the successful completion of its warrant program (the “Warrant Program”). Under the Warrant Program, holders of publicly traded warrants (“Public Warrants”) had the opportunity to exercise the Public Warrants on enhanced terms through August 27, 2010.

          Under the Warrant Program, 19,262,006 Public Warrants (76.13% of the Public Warrants then-outstanding) were exercised, of which 19,246,056 Public Warrants were exercised cashlessly and 15,950 Public Warrants were exercised by payment of the $5.65 cash exercise price. As a result of the successful completion of the Warrant Program, Navios Holdings and Angeliki Frangou exercised 13,835,000 of the privately issued warrants (the “Private Warrants”). In addition, the remaining outstanding 90,000 Private Warrants have also been exercised, 75,000 of which were exercised on a cashless basis. Following these transactions (a) $0.09 million of gross cash proceeds were raised from the exercise of the Public Warrants, (b) $78.3 million of gross cash proceeds were raised from the exercise of the Private Warrants, and (c) 18,412,053 new shares of common stock were issued.

Acquisition of VLCC Tanker Vessels

          On September 10, 2010, Navios Acquisition consummated the acquisition (the “VLCC Acquisition”) of a fleet of seven VLCC tankers for an aggregate purchase price of $587.0 million, adjusted for net working capital acquired of $20.1 million. The purchase price was financed as follows: (a) $410.5 million of bank debt, incurred at closing, consisting of six credit facilities with a consortium of banks; (b) $134.3 million of cash paid at closing; (c) $11.0 million through the issuance of 1,894,918 Navios Acquisition shares of common stock (based on the closing trading price averaged over the 15 trading days immediately prior to closing) of which 1,378,122 shares of common stock were deposited to a one-year escrow to provide for indemnity or other claims; and (d) $51.4 million due to a shipyard in 2011 for the new build scheduled for delivery in June 2011.

          The cash portion of the purchase price paid at closing was financed with: (i) $32.2 million of cash from the balance sheet of the acquired entities; (ii) $40.0 million in short-term financing from Navios Holdings, with a margin of LIBOR plus 300 bps and a term of 18 months, maturing on April 1, 2012; and (iii) existing cash resources of Navios Acquisition.

          As of September 30, 2010, Navios Acquisition had outstanding 41,910,572 shares of common stock and 6,037,994 Public Warrants. No other warrants are outstanding, as all Private Warrants have been exercised. Following the above transactions, as of September 30, 2010, Navios Holdings owned 26,007,551 shares, or 62.1%, of the outstanding common stock of Navios Acquisition.

Overview

General

          Navios Holdings is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities, including iron ore, coal and grain. We technically and commercially manage our owned fleet, Navios Acquisition’s fleet and Navios Partners’ fleet, and commercially manage our chartered-in fleet. Navios Holdings has in-house ship management expertise that allows it to oversee every step of technical management of the owned fleet, Navios Acquisition’s fleet and Navios Partners’ fleet including the shipping operations throughout the life of the vessels and the superintendence of maintenance, repairs and drydocking.

          On August 25, 2005, pursuant to a Stock Purchase Agreement dated February 28, 2005, as amended, by and among International Shipping Enterprises, Inc., Navios Holdings and all the shareholders of Navios Holdings, ISE acquired Navios Holdings through the purchase of all of the outstanding shares of common stock of Navios Holdings. As a result of this acquisition, Navios Holdings became a wholly owned subsidiary of ISE. In addition, on August 25, 2005, simultaneously with the acquisition of Navios Holdings, ISE effected a reincorporation from the State of Delaware to the Republic of the Marshall Islands through a downstream merger with and into its newly acquired wholly owned subsidiary, whose name was and continues to be Navios Maritime Holdings Inc.

          On February 2, 2007, Navios Holdings acquired all of the outstanding share capital of Kleimar for a cash consideration of $165.6 million (excluding direct acquisition costs), subject to certain adjustments. Kleimar is a Belgian maritime transportation company established in 1993, an owner and operator of Capesize and Panamax vessels used in the transportation of dry cargoes and has an extensive contract of affreightment (“COA”) business.

          On August 7, 2007, Navios Holdings formed Navios Partners under the laws of Marshall Islands. Its General Partner, a wholly owned subsidiary of Navios Holdings, was also formed on that date to act as the general partner of Navios Partners and received a 2% general partner interest in Navios Partners.

          On January 1, 2008, pursuant to a share purchase agreement, Navios Holdings contributed (a) $112.2 million in cash and (b) the authorized capital stock of its wholly owned subsidiary Corporacion Navios Sociedad Anonima (“CNSA”) in exchange for the issuance and delivery of 12,765 shares of Navios Logistics, representing 63.8% (67.2% excluding 1,007 shares of contingent consideration) of its outstanding stock. Navios Logistics acquired all ownership interests in Horamar in exchange for (a) $112.2 million in cash, of which $5.0 million was placed in escrow payable upon the attainment of certain EBITDA targets during specified periods through December 2008 (the “EBITDA Adjustment”) and (b) the issuance of 7,235 shares of Navios Logistics representing 36.2% (32.8% excluding 1,007 shares of contingent consideration) of Navios Logistics outstanding stock, of which 1,007 shares were placed in escrow pending attainment of certain EBITDA targets.

          In November 2008, $2.5 million in cash and 503 shares were released from escrow when Horamar achieved the interim EBITDA target. On June 17, 2010, $2.5 million in cash and the 504 shares remaining in escrow were released from escrow upon the achievement of the EBITDA target thresholds. Following the release of the remaining shares held in escrow, Navios Holdings currently owns 63.8% of Navios Logistics.

          On July 1, 2008, Navios Holdings completed the initial public offering (“IPO”) of units in its subsidiary, Navios Acquisition, a blank check company. In this offering, Navios Acquisition sold 25,300,000 units for an aggregate purchase price of $253.0 million. Simultaneously with the completion of the IPO, Navios Holdings purchased private placement warrants of Navios Acquisition for an aggregate purchase price of $7.6 million. Prior to the IPO, Navios Holdings had purchased 8,625,000 sponsor units for a total consideration of $25,000, of which an aggregate of 290,000 units were transferred to Navios Holdings’ officers and directors and an aggregate of 2,300,000 sponsor units were returned to Navios Acquisition and cancelled upon receipt. Each unit consists of one share of Navios Acquisition’s common stock and one warrant.

          On April 8, 2010, pursuant to the terms and conditions of the Acquisition Agreement by and between Navios Acquisition and Navios Holdings, Navios Acquisition agreed to acquire 13 vessels (11 product tankers and two chemical tankers) plus options to purchase two additional product tankers, for an aggregate purchase price of $457.7 million.

          On May 25, 2010, after its special meeting of stockholders, Navios Acquisition announced the approval of (a) the acquisition of 13 vessels (11 product tankers and two chemical tankers) for an aggregate purchase price of $457.7 million pursuant to the terms and conditions of the Acquisition Agreement by and between Navios Acquisition and Navios Holdings and (b) certain amendments to Navios Acquisition’s amended and restated articles of incorporation.

          Following the consummation of the transactions described in the Acquisition Agreement, Navios Holdings was released from all debt and equity commitments for the above vessels and Navios Acquisition reimbursed Navios Holdings for equity payments made prior to the stockholders’ meeting under the purchase contracts for the vessels, plus all associated payments previously made by Navios Holdings amounting to $76.5 million.

          On May 28, 2010, certain shareholders of Navios Acquisition redeemed their shares upon de-“SPAC”-ing, and Navios Holding’s ownership of Navios Acquisition increased to 57.3%. At that point, Navios Holdings concluded that the increase in its ownership interest resulted in obtaining control over Navios Acquisition and, consequently, concluded that a business combination had occurred and consolidated Navios Acquisition from that date onwards.

          On September 2, 2010, Navios Acquisition announced the successful completion of its Warrant Program. Under the Warrant Program, holders of Public Warrants had the opportunity to exercise the Public Warrants on enhanced terms through August 27, 2010. Under the Warrant Program, 19,262,006 Public Warrants (76.13% of the Public Warrants then-outstanding) were exercised, of which 19,246,056 Public Warrants were exercised cashlessly and 15,950 Public Warrants were exercised by payment of the $5.65 cash exercise price. As a result of the successful completion of the Warrant Program, Navios Holdings and Angeliki Frangou exercised 13,835,000 Private Warrants. In addition, the remaining 90,000 Private Warrants have also been exercised, 75,000 of which were exercised on a cashless basis. Following these transactions (a) $0.09 million of gross cash proceeds were raised from the exercise of the Public Warrants, (b) $78.3 million of gross cash proceeds were raised from the exercise of the Public Warrants and Private Warrants, and (c) 18,412,053 new shares of common stock were issued. Following the above transactions, as of September 30, 2010, Navios Holdings owned 26,007,551 shares or 62.1% of the outstanding common stock of Navios Acquisition.

Fleet

          The current “core fleet” refers to drybulk vessel operations (excluding Navios Logistics and Navios Acquisition), including the newbuildings to be delivered and the employment profile of the vessels. The current “core fleet” consists of 57 vessels totaling 6.0 million dwt. The employment profile of the fleet as of November 18, 2010 is reflected in the tables below. The 40 vessels in current operation aggregate approximately 4.1 million dwt and have an average age of 4.8 years. Navios Holdings has currently fixed 99.2%, 72.8%, 57.4% and 42.8% of its 2010, 2011, 2012 and 2013 available days, respectively, of its fleet (excluding vessels, which are utilized to fulfill voyage charter or COAs), representing contracted fees (net of commissions), based on contracted charter rates from its current charter agreement of $296.7 million, $274.6 million, $241.3 million and $195.4 million, respectively. Although these fees are based on contractual charter rates, any contract is subject to performance by the counterparties and us. Additionally, the level of these fees would decrease depending on the vessels’ off-hire days to perform periodic maintenance. The average contractual daily charter-out rate for the core fleet (excluding vessels, which are utilized to fulfill voyage charter or COAs) is $26,261, $29,508, $31,513 and $32,822 for 2010, 2011, 2012 and 2013, respectively. The average daily charter-in rate for the active long-term charter-in vessels (excluding vessels, which are utilized to fulfill voyage charter or COAs) for 2010 is $10,107.

Owned Vessels

														Charter-out				Profit				Expiration
Vessels (8)		Type				Built				DWT				Rate (1)				Share				Date (2)
Navios Ionian		Ultra Handymax					2000				52,067				11,970			No					04/07/2011
Navios Celestial		Ultra Handymax					2009				58,063				17,550			No					01/24/2012
Navios Vector		Ultra Handymax					2002				50,296				9,975			No					12/17/2010
Navios Horizon		Ultra Handymax					2001				50,346				36,100			No					08/31/2011
Navios Herakles		Ultra Handymax					2001				52,061				21,850			No					04/28/2011
Navios Achilles		Ultra Handymax					2001				52,063				26,864			70%/$39,800(exp.11/17/2011)					11/17/2013
															13,609			70%/$14,250(starting11/17/2011)					12/17/2013
Navios Meridian		Ultra Handymax					2002				50,316				23,700			No					10/08/2012
Navios Mercator		Ultra Handymax					2002				53,553				22,800				60%/$24,000				08/01/2011
															31,350				60%/$33,000				01/12/2014
															31,350				60%/$15,000				02/20/2015
Navios Arc		Ultra Handymax					2003				53,514				10,450			No					02/26/2011
Navios Hios		Ultra Handymax					2003				55,180				14,063			No					12/13/2010
Navios Kypros		Ultra Handymax					2003				55,222				34,024			No					01/28/2011
															20,778				50%/$19,000				01/28/2014
Navios Ulysses		Ultra Handymax					2007				55,728				31,281			No					10/12/2013
Navios Vega		Ultra Handymax					2009				58,792				12,350			No					02/18/2011
Navios Magellan		Panamax					2000				74,333				22,800			No					03/26/2012
Navios Star		Panamax					2002				76,662				19,000			No					12/05/2010
Navios Asteriks		Panamax					2005				76,801												—
Navios Orbiter		Panamax					2004				76,602				38,052			No					04/01/2014
Navios Bonavis		Capesize					2009				180,022				47,400			No					06/29/2014
Navios Happiness		Capesize					2009				180,022				55,100			No					07/23/2014
Navios Lumen		Capesize					2009				180,661				37,500	(5)		Yes					12/10/2011
															39,830	(5)		Yes					12/10/2013
															39,330	(5)		Yes					12/09/2017
Navios Stellar		Capesize					2009				169,001				35,874	(6)		No					12/22/2016
Navios Phoenix		Capesize					2009				180,242				36,575			No					12/20/2010
Navios Antares		Capesize					2010				169,059				36,100	(7)		Yes					01/19/2015
															45,125	(7)		Yes					01/19/2018
Navios Buena Ventura		Capesize					2010				179,132				29,356				50%/38,500				10/29/2020
Navios Luz		Capesize					2010				179,144				29,356				50%/38,500				11/17/2020

Long-term Chartered-in Vessels

														Purchase				Charter-out				Expiration
Vessels		Type				Built				DWT				Option (3)				Rate (1)				Date (2)
Navios Astra (9)		Ultra Handymax					2006				53,468			Yes					14,012				12/05/2010
Navios Primavera		Ultra Handymax					2007				53,464			Yes					22,138				05/28/2011
Navios Armonia		Ultra Handymax					2008				55,100			No					23,700				06/07/2013
Navios Orion		Panamax					2005				76,602			No					49,400				12/14/2012
Navios Titan		Panamax					2005				82,936			No					17,500				11/22/2010
														No					19,000				11/23/2012
Navios Altair		Panamax					2006				83,001			No					19,238				11/23/2011
Navios Esperanza		Panamax					2007				75,200			No					14,513				02/19/2013
Torm Antwerp		Panamax					2008				75,250			No									—
Golden Heiwa		Panamax					2007				76,662			No									—
Beaufiks		Capesize					2004				180,181			Yes									—
Rubena N		Capesize					2006				203,233			No									—
SC Lotta (Phoenix Grace)		Capesize					2009				170,500			No									—
Formosabulk Brave		Capesize					2001				170,000			No									—
Phoenix Beauty		Capesize					2010				169,150			No									—
King Ore		Capesize					2010				176,800			No									—

Vessels to be Delivered

Long-term Chartered-in

Delivery

Purchase

Vessels

Type

Date

Option

DWT

Navios Serenity

Handysize

05/2011

Yes

(4)

34,718

Navios TBN

Handysize

09/2012

Yes

(4)

34,718

Navios TBN

Capesize

09/2011

Yes

181,000

Kleimar TBN

Capesize

07/2012

Yes

180,000

Navios TBN

Capesize

12/2013

Yes

180,000

Navios TBN

Ultra Handymax

12/2011

Yes

61,000

Navios TBN

Ultra Handymax

10/2013

Yes

61,000

Navios TBN

Ultra Handymax

05/2013

Yes

61,000

Navios TBN

Panamax

01/2013

Yes

82,100

Navios TBN

Panamax

09/2011

Yes

80,000

Navios TBN

Panamax

07/2013

Yes

(4)

80,500

Navios TBN

Panamax

09/2013

Yes

(4)

80,500

Navios TBN

Panamax

11/2013

Yes

(4)

80,500

Owned Vessels

Charter-

Delivery

Out

Profit

Expiration

Vessels

Type

Date

DWT

Rate (1)

Share

Date (2)

Navios Etoile

Capesize

11/2010

180,000

29,356

50/50 in excess of $38,500

11/2020

Navios Azimuth

Capesize

03/2011

180,000

27,431

No

03/2023

Navios Bonheur

Capesize

12/2010

180,000

29,356

50/50 in excess of $37,500

12/2022

Navios Altamira

Capesize

02/2011

180,000

24,674

No

02/2021

Charter Policy and Industry Outlook

          Navios Holdings’ policy has been to take a portfolio approach to managing operating risks. This policy led Navios Holdings to time charter-out many of the vessels that it is presently operating (i.e. vessels owned by Navios Holdings or which it has taken into its fleet under charters having a duration of more than 12 months) during 2008, 2009 and 2010 for various periods ranging between one to 12 years to various shipping industry counterparties, considered by Navios Holdings to have appropriate credit profiles. By doing this, Navios Holdings aimed to lock in, subject to credit and operating risks, favorable forward cash flows which it believes will cushion it against unfavorable market conditions. In addition, Navios Holdings trades additional vessels taken in on shorter term charters of less than 12 months duration as well as voyage charter or COAs and forward freight agreements (“FFAs”).

          In 2008 and so far through 2010, this policy had the effect of generating Time Charter Equivalents (“TCE”) that, while high by the average historical levels of the drybulk freight market over the last 30 years, were below those which could have been earned had the Navios Holdings’ fleet been operated purely on short-term and/or spot employment. In 2009, this chartering policy has had the effect of generating TCE which were higher than spot employment.

          The average daily charter-in vessel cost for the Navios Holdings long-term charter-in fleet (excluding vessels, which are utilized to serve voyage charter or COAs) was $10,121 per day for the nine month period ended September 30, 2010. The average long-term charter-in hire rate per vessel was included in the amount of long-term hire included elsewhere in this document and was computed by (a) multiplying the (i) daily charter-in rate for each vessel by (ii) number of days the vessel is in operation for the year and (b) dividing such product by the total number of vessel days for the year. These rates exclude gains and losses from FFAs. Furthermore, Navios Holdings has the ability to increase its owned fleet through purchase options at favorable prices relative to the current market exercisable in the future.

          Navios Holdings believes that a decrease in global commodity demand from its current level, and the delivery of drybulk carrier new buildings into the world fleet, would have an adverse impact on future revenue and profitability. However, the operating cost advantage of Navios Holdings’ owned vessels and long-term chartered fleet, which is chartered-in at favorable rates, will continue to help mitigate the impact of the current decline in freight rates. A reduced freight rate environment may also have an adverse impact on the value of Navios Holdings’ owned fleet and any purchase options that are in the money. In reaction to a decline in freight rates, available ship financing has also been negatively impacted.

Navios Logistics Operations

          Navios Holdings currently owns 63.8% of Navios Logistics. Navios Logistics owns and operates vessels, barges and push boats located mainly in Argentina, the largest bulk transfer and storage port facility in Uruguay, and an upriver liquid port facility located in Paraguay. Operating results for Navios Logistics are highly correlated to South American (i) grain production and export, in particular Argentinean, Brazilian, Paraguayan, Uruguayan and Bolivian production and export, (ii) iron ore production and export, mainly from Brazil, and (iii) sales (and logistic services) of petroleum products in the Paraguayan market. Navios Holdings believes that the continuing development of these businesses will foster throughput growth and therefore increase revenues at Navios Logistics. Should this development be delayed, grain harvests or upriver loading drafts to be reduced, or the market experience an overall decrease in the demand for grain or iron ore, the operations in Navios Logistics would be adversely affected.

          Navios Logistics, an end-to-end logistics business which leverages Navios Holdings’ transshipment facility in Uruguay with an upriver port facility in Paraguay and dry and wet barge capacity, represents the successful completion of an effort Navios Holdings commenced in June 2006, when Navios Holdings announced its intention to develop a South American logistics business. Navios Holdings intends to continue growing its South American logistics business by opportunistically acquiring assets complementary to its port terminal and storage facilities.

          Navios Logistics operates different types of tanker vessels, push boats and wet and dry barges for the delivery of a large range of products meeting the needs of the market between Buenos Aires, Argentina, and all the ports of the Paraná, Paraguay and Uruguay River System in South America, commonly known as the “Hidrovia” (meaning “waterway”). The Hidrovia passes through five countries, (Argentina, Bolivia, Brazil, Paraguay and Uruguay) along its over 2,000 miles as well as maritime facilities of the South American coastline. Navios Logistics also owns and operates an up-river port terminal and tank storage facility for petroleum products, oil and gas in the region San Antonio, Paraguay as well as the largest bulk transfer and storage port terminal in Uruguay located in an international tax-free trade zone in the port of Nueva Palmira. (See “Navios South American Logistics Inc.” under “Statement of Operations Breakdown by Segment”).

Factors Affecting Navios Holdings’ Results of Operations

          We believe the principal factors that will affect our future results of operations are the economic, regulatory, political and governmental conditions that affect the shipping industry generally and that affect conditions in countries and markets in which our vessels engage in business. Please read “Risk Factors” included in Navios Holdings’ 2009 annual report on Form 20-F filed with the Securities and Exchange Commission for a discussion of certain risks inherent in our business.

          Navios Holdings actively manages the risk in its operations by: (i) operating the vessels in its fleet in accordance with all applicable international standards of safety and technical ship management; (ii) enhancing vessel utilization and profitability through an appropriate mix of long-term charters complemented by spot charters (time charters for short term employment) and voyage charter or COAs; (iii) monitoring the financial impact of corporate exposure from both physical and FFAs transactions; (iv) monitoring market and counterparty credit risk limits; (v) adhering to risk management and operation policies and procedures; and (vi) requiring counterparty credit approvals.

          Navios Holdings believes that the important measures for analyzing trends in its results of operations consist of the following:

	•		Market Exposure: Navios Holdings manages the size and composition of its fleet, by chartering and owning vessels, to adjust to anticipated changes in market rates. Navios Holdings aims at achieving an appropriate balance between owned vessels and long and short term chartered-in vessels and controls approximately 6.0 million dwt in drybulk tonnage. Navios Holdings’ options to extend the duration of vessels it has under long-term time charter (durations of over 12 months) and its purchase options on chartered vessel permits Navios Holdings to adjust the cost and the fleet size to correspond to market conditions.
	•		Available days: Available days is the total number of days a vessel is controlled by a company less the aggregate number of days that the vessel is off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
	•		Operating days: Operating days is the number of available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including lack of demand or unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
	•		Fleet utilization: Fleet utilization is obtained by dividing the number of operating days during a period by the number of available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
	•		TCE rates: TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of

			available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts, while charter hire rates for vessels on time charters generally are expressed in such amounts.
	•		Equivalent vessels: Equivalent vessels data is the available days of the fleet divided by the number of the calendar days in the respective period.

Voyage and Time Charter

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

	•		the duration of the charters;
	•		the level of spot market rates at the time of charters;
	•		decisions relating to vessel acquisitions and disposals;
	•		the amount of time spent positioning vessels;
	•		the amount of time that vessels spend in drydock undergoing repairs and upgrades;
	•		the age, condition and specifications of the vessels; and
	•		the aggregate level of supply and demand in the drybulk shipping industry.

          Time charters are available for varying periods, ranging from a single trip (spot charter) to long-term which may be many years. In general, a long-term time charter assures the vessel owner of a consistent stream of revenue. Operating the vessel in the spot market affords the owner greater spot market opportunity, which may result in high rates when vessels are in high demand or low rates when vessel availability exceeds demand. Vessel charter rates are affected by world economics, international events, weather conditions, strikes, governmental policies, supply and demand, and many other factors that might be beyond the control of management.

          Consistent with industry practice, Navios Holdings uses TCE rates, which consist of revenue from vessels operating on time charters and voyage revenue less voyage expenses from vessels operating on voyage charters in the spot market, as a method of analyzing fluctuations between financial periods and as a method of equating revenue generated from a voyage charter to time charter revenue.

          TCE revenue also serves as industry standard for measuring revenue and comparing results between geographical regions and among competitors.

          The cost to maintain and operate a vessel increases with the age of the vessel. Older vessels are less fuel efficient, cost more to insure and require upgrades from time to time to comply with new regulations. The average age of Navios Holdings’ owned fleet is 5.4 years. But as such fleet ages, or if Navios Holdings expands its fleet by acquiring previously owned and older vessels, the cost per vessel would be expected to rise and, assuming all else, including rates, remains constant, vessel profitability would be expected to decrease.

Spot Charters, Contracts of Affreightment (COAs), and Forward Freight Agreements (FFAs)

          Navios Holdings enhances vessel utilization and profitability through a mix of voyage charters, short term charter-out contracts, COAs and strategic backhaul cargo contracts, as follows:

	•		The operation of voyage charters or spot charter-out fixtures for the carriage of a single cargo between load and discharge port;
	•		The use of voyage charter or COAs, under which Navios Holdings contracts to carry a given quantity of cargo between certain load and discharge ports within a stipulated time frame; and
	•		The use of FFAs both as economic hedges in reducing market risk on specific vessels, freight commitments or the overall fleet and in order to increase or reduce the size of its exposure to the drybulk shipping market.

          In addition, Navios Holdings, through selecting voyage charter or COAs on what would normally be backhaul or ballast legs, attempts to enhance vessel utilization and profitability. The cargoes are used to position vessels at or near major loading areas (such as the Gulf of Mexico) where spot cargoes can readily be obtained. This enables ballast time to be reduced as a percentage of the round voyage. This strategy is referred to as triangulation.

          Navios Holdings enters into voyage charter or COAs with major industrial end users of bulk products, primarily in the steel, energy and grain sectors. These contracts are entered into not only with a view to making profit but also as a means of maintaining relationships, obtaining market information and continuing a market presence in this market segment. Navios Holdings has adopted a strategy of entering into voyage charter or COAs to carry freight into known loading areas, such as the Gulf of Mexico and the Gulf of St. Lawrence, where subsequent spot or voyage charters can be obtained.

          Navios Holdings enters into drybulk shipping FFAs as economic hedges relating to identifiable ship and or cargo positions and as economic hedges of transactions the Company expects to carry out in the normal course of its shipping business. By utilizing certain

derivative instruments, including drybulk shipping FFAs, the Company manages the financial risk associated with fluctuating market conditions. In entering into these contracts, the Company has assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts.

          As of September 30, 2010 and December 31, 2009, none of Navios Holdings’ FFAs qualified for hedge accounting treatment. Drybulk FFAs traded by Navios Holdings that do not qualify for hedge accounting are shown at fair value through the statement of operations.

          FFAs cover periods generally ranging from one month to one year and are based on time charter rates or freight rates on specific quoted routes. FFAs are executed either over-the-counter, between two parties, or through NOS ASA, a Norwegian clearing house, and LCH the London clearing house. FFAs are settled in cash monthly based on publicly quoted indices.

          NOS ASA and LCH call for both base and margin collaterals, which are funded by Navios Holdings, and which in turn substantially eliminates counterparty risk. Certain portions of these collateral funds may be restricted at any given time as determined by NOS ASA and LCH.

          At the end of each calendar quarter, the fair value of drybulk shipping FFAs traded over-the-counter are determined from an index published in London, United Kingdom and the fair value of those FFAs traded with NOS ASA and LCH are determined from the NOS ASA and LCH valuations accordingly. Navios Holdings has implemented specific procedures designed to respond to credit risk associated with over-the-counter trades, including the establishment of a list of approved counterparties and a credit committee which meets regularly.

Statement of Operations Breakdown by Segment

          Navios Holdings reports financial information and evaluates its operations by charter revenues and not by vessel type, length of ship employment, customers or type of charter. Navios Holdings does not use discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management does not identify expenses, profitability or other financial information for these charters. As a result, Navios Holdings reviews operating results solely by revenue per day and operating results of the owned and chartered-in fleet and, thus, the Company has determined that it has three reportable segments, Drybulk Vessel Operations, Tanker Vessel Operations (Navios Acquisition) and Logistics Business. The reportable segments reflect the internal organization of Navios Holdings and strategic businesses that offer different products and services. The Drybulk Vessel Operations business consists of transportation and handling of bulk cargoes through ownership, operation, and trading of vessels, freight and FFAs. The Tanker Vessel Operations business consists of transportation and handling of liquid cargoes through ownership, operation, and trading of tanker vessels. The Logistics Business consists of operating ports and transfer station terminals, handling of vessels, barges and push boats as well as upriver transport facilities in the Hidrovia region. Navios Holdings measures segment performance based on net income.

          For a more detailed discussion about Navios Logistics Segment, refer to the section “Navios South American Logistics Inc.” further below.

Period over Period Comparisons of Navios Holdings

          For the Three Month Period ended September 30, 2010 compared to the Three Month Period ended September 30, 2009

          The following table presents consolidated revenue and expense information for the three month periods ended September 30, 2010 and 2009. This information was derived from the unaudited consolidated revenue and expense accounts of Navios Holdings for the respective periods.

		Three Month				Three Month
		Period ended				Period ended
		September 30,				September 30,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Revenue		$	170,177			$	160,570
Time charter, voyage and logistic business expenses			(83,944	)			(95,355	)
Direct vessel expenses			(11,660	)			(7,994	)
General and administrative expenses			(20,005	)			(9,969	)
Depreciation and amortization			(23,864	)			(19,915	)
Interest income/expense and finance cost, net			(22,487	)			(13,775	)
(Loss)/gain on derivatives			(37	)			2,167
Other expense, net			(3,799	)			(2,517	)
Income before equity in net earnings of affiliate companies			4,381				13,212
Equity in net earnings of affiliated companies			9,661				9,458
Income before taxes			14,042				22,670
Income taxes			(244	)			433
Net income			13,798				23,103
Less: Net (income)/loss attributable to the noncontrolling interest			842				(1,785	)
Net income attributable to Navios Holdings common stockholders		$	14,640			$	21,318

          Set forth below are selected historical and statistical data for Navios Holdings (excluding Navios Acquisition) for each of the three month periods ended September 30, 2010 and 2009 that the Company believes may be useful in better understanding the Company’s financial position and results of operations.

		Three month period ended
		September 30,
		2010				2009
		(unaudited)				(unaudited)
FLEET DATA
Available days			4,032				3,949
Operating days			4,024				3,933
Fleet utilization			99.8	%			99.6	%
Equivalent vessels			44				43
AVERAGE DAILY RESULTS
Time Charter Equivalents		$	24,598			$	24,061

          During the three month period ended September 30, 2010, there were 83 more available days as compared to the same period of 2009 due to an increase of 312 available days following the delivery of newbuilding vessels at various times since the third quarter of 2009, partially offset by a decrease of 229 days in short-term and long-term chartered in fleet available days. Navios Holdings can increase or decrease its fleet’s size by chartering-in vessels for long or short-term periods (less than one year).

          The average TCE rate for the three month period ended September 30, 2010 was $24,598 per day, $537 per day higher than the rate achieved in the same period of 2009. This was primarily due to higher charter-out daily rates in the third quarter of 2010 for the owned vessels than those achieved in the third quarter of 2009.

          Revenue: Revenue from drybulk vessel operations for the three months ended September 30, 2010 was $106.8 million as compared to $121.2 million for the same period during 2009. The decrease was mainly attributable to the decrease of 229 days in short-term and long-term chartered in fleet available days and (b) the decrease in the freight market resulting in lower charter out daily rates for the short and long term chartered in fleet. This decrease was partially offset by (a) a slight increase in TCE per day of 2.2% to $24,598 per day in the third quarter of 2010 from $24,061 per day in the same period of 2009 and (b) an increase in the available days of the fleet of 2.1% to 4,032 days in the third quarter of 2010 from 3,949 days in the same period of 2009. The increase of 83 available days was due to an increase of 312 available ownership days as a result of the delivery of newbuilding owned vessels since the third quarter of 2009. This increase was offset by a decrease in short-term and long-term fleet available days of 229 days in total, as mentioned above.

          Revenue from the logistics business was approximately $55.3 million for the three months ended September 30, 2010 as compared to $39.3 million during the same period of 2009. This increase was mainly attributable to (a) the acquisition of the Sara H in February 2010, (b) the increased operations of Navios Logistics’ liquid port and (c) the increase in volumes in the dry port terminal business and to the additional storage capacity of Navios Logistics’ dry port in Uruguay following the construction of its new silo.

          Revenue from tanker vessel operations for the three month period ended September 30, 2010 was $8.1 million. Following the delivery of the product tanker Ariadne Jacob on July 2, 2010 and the Colin Jacob on June 29, 2010, and the VLCC Acquisition on September 10, 2010, Navios Acquisition had 308 available days at a TCE rate of $26,129. There were no operations during the corresponding period in 2009.

          Time Charter, Voyage and Logistics Business Expenses: Time charter, voyage and logistic business expenses decreased by $11.5 million or 12.1% to $83.9 million for the three month period ended September 30, 2010, as compared to $95.4 million for same period in 2009. This was primarily due to a decrease in the short-term fleet activity, which was partially offset by an increase of $14.6 million in logistics business expenses.

          Time charter and voyage expenses from tanker vessel operations for the three month period ended September 30, 2010 were $0.1 million and $0 during the corresponding period in 2009, since the company was under development stage. These expenses were mainly related to broker fees and various voyage expenses.

          Direct Vessel Expenses: Direct vessel expenses for operation of the owned fleet increased by $3.7 million or 46.3% to $11.7 million for the three month period ended September 30, 2010, as compared to $8.0 million for the same period in 2009. Direct vessel expenses include crew costs, provisions, deck and engine stores, lubricating oils, insurance premiums and costs for maintenance and repairs. The increase resulted primarily from the increase of the owned vessels until the third quarter of 2010 compared to the same period in 2009 and the increase in crew costs, spares and lubricating oils.

          Direct vessel expenses from tanker vessel operations for the three months ended September 30, 2010 were $2.5 million and $0 for the corresponding period in 2009, since Navios Acquisition was under development stage. Direct vessel expenses consist of all expenses

relating to the operation of vessels, including crewing, repairs and maintenance, insurance, stores and lubricants and miscellaneous expenses such as communications and amortization of drydock and special survey costs. Beginning on May 28, 2010, such services are provided to Navios Acquisition by Navios Holdings through a management agreement dated May 28, 2010.

          General and Administrative Expenses: General and administrative expenses of Navios Holdings are composed of the following:

		Three month period				Three month period
		ended				ended
		September 30, 2010				September 30, 2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Payroll and related costs(1)		$	3,823			$	3,274
Professional, legal and audit fees(1)			1,041				1,045
Navios Acquisition			8,428				—
Navios Logistics			3,502				2,053
Other(1)			615				922
Sub-total			17,409				7,294
Credit risk insurance			2,596				2,675
General and administrative expenses		$	20,005			$	9,969

          The increase in general and administrative expenses by $10.0 million to $20.0 million or 100% for the three month period ended September 30, 2010, as compared to $10.0 million for the same period of 2009, was mainly attributable to (a) $0.5 million increase in payroll and related costs, (b) $1.4 million increase in general and administrative expenses relating to the logistics business mainly attributable to an increase in salaries, professional fees and other administrative costs and (c) $8.4 million increase from Navios Acquisition general and administrative expenses mainly due to expenses incurred relating to the VLCC acquisition amounting to $8.0 million, out of which $2.4 million relate to various audit, legal and consulting fees and $5.6 million relate to the valuation of 3,000 shares of preferred stock issued to an independent third party holder as consultancy and advisory fees. The overall increase of $10.3 million was partially offset by a $0.3 million decrease in other general and administrative expenses.

          Depreciation and Amortization: For the three month period ended September 30, 2010, depreciation and amortization increased by $4.0 million compared to the same period in 2009. The increase was primarily due to (a) a $3.5 million increase in depreciation of vessels due to the increase of the owned fleet, (b) a $0.1 million increase in depreciation and amortization from the logistics business mainly due to the acquisition of the Makenita H at the end of the second quarter of 2009 and the Sarah H in February 2010, (c) a $2.4 million increase in depreciation and amortization from tanker vessel operations, of which $2.2 million was related to vessel depreciation, and $0.2 million was related to net amortization of intangible assets and liabilities associated with the acquisition of the VLCC vessels. This overall increase was offset by a $2.0 million decrease in amortization of favorable and unfavorable leases.

          Interest Income/Expense and Finance Cost, Net: Interest income/expense and finance cost for the three month period ended September 30, 2010 increased to $22.5 million, as compared to $13.8 million in the same period of 2009. This increase of $8.7 million is due to (a) the issuance of $400.0 million first priority ship mortgage notes in November 2009 and (b) an increase of $1.1 million in interest expense and finance cost of Navios Acquisition related to certain secured credit facilities obtained to partially finance the acquisition of its fleet. The overall increase of $8.7 million in interest expense and finance cost was partially offset by (a) a decrease in average LIBOR rate to 0.4% for the three month period ended September 30, 2010 as compared to 1.17% for the same period in 2009, (b) a decrease in average outstanding loan balance from $693.5 million in the third quarter of 2009 to $381.3 million in the same period of 2010 (excluding the drawdown relating to facilities for the construction of the Capesize vessels), (c) a decrease of $0.4 million in interest expense and finance cost of Navios Logistics mainly attributable to decrease in rates, and (d) an increase of interest income by $0.7 million to $1.2 million for the three month period ended September 30, 2010, as compared to $0.5 million for the same period of 2009. The increase of $0.7 million also includes interest income from Navios Acquisition and Navios Logistics below $0.1 million. The overall interest income increase was mainly attributable to increased income from time deposits due to higher rates achieved.

          (Loss)/Gain on Derivatives: Gain on derivatives decreased by $2.2 million to a loss below $0.1 million during the three month period ended September 30, 2010, as compared to $2.2 million gain for the same period in 2009. There is no income from derivatives relating to the logistics business and tanker vessel operations. Navios Holdings records the change in the fair value of derivatives at each balance sheet date. The FFAs market has experienced significant volatility in the past few years and, accordingly, recognition of the changes in the fair value of FFAs has, and can, cause significant volatility in earnings. The extent of the impact on earnings is dependent on two factors: market conditions and Navios Holdings’ net position in the market. Market conditions were volatile in both periods. As an indicator of

volatility, selected Baltic Exchange Panamax time charter average rates are shown below.

		Baltic
		Exchange’s
		Panamax Time
		Charter
		Average Index
July 12, 2010		$	15,648	(a)
September 9, 2010		$	27,329	(b)
September 30, 2010		$	19,784	(*)
July 24, 2009		$	28,209	(c)
August 26, 2009		$	16,738	(d)
September 30, 2009		$	18,267	(*)

          Other Expense, net: Other expense, net increased by $1.3 million to $3.8 million for the three month period ended September 30, 2010, from $2.5 million for the same period in 2009. This increase was mainly due to an increase of $2.0 million in net other expense of Navios Logistics mainly due to an increase in taxes, other than income taxes. This increase in other expense was partially offset mainly by a $0.7 million decrease in miscellaneous voyage expenses. Out of the total amount of the $1.3 million increase in net other expense, the amount generated by Navios Acquisition is below $0.1 million.

          Equity in Net Earnings of Affiliated Companies: Equity in net earnings of affiliated companies increased by $0.2 million to $9.7 million for the three month period ended September 30, 2010, from $9.5 million for the same period in 2009. This increase was mainly due to the additional deferred gain recognized in the statements of income during the three month period September 30, 2010 under “Equity in net earnings of affiliated companies” following Navios Partners’ public equity offerings during the last quarter of 2009 and during 2010. The deferred gain recognized in equity in earnings in connection with the public offerings of Navios Partners’ common units relates to gains that initially arose from the sale of vessels by the Company to Navios Partners, the Company recognizes the gain immediately in earnings only to the extent of the interest in Navios Partners owned by third parties and defers recognition of the gain to the extent of its own ownership interest in Navios Partners (the “deferred gain”) (see also “Related Party Transactions”). Subsequently, the deferred gain is amortized to income over the remaining useful life of the vessel. The recognition of the deferred gain is accelerated in the event that (i) the vessel is subsequently sold or otherwise disposed of by Navios Partners or (ii) the Company’s ownership interest in Navios Partners is reduced.

          Income Taxes: Income taxes decreased by $0.7 million to $0.3 million loss for the three month period ended September 30, 2010, as compared to $0.4 million income for the same period in 2009. The main reason was the $0.7 million increase in income tax expenses relating to Navios Logistics. Navios Logistics income taxes consist of income taxes calculated for certain subsidiaries of Navios Logistics, which are subject to corporate income tax.

          Net (Income)/Loss Attributable to the Noncontrolling Interest: Net (income)/loss attributable to the noncontrolling interest decreased by $2.6 million to $0.8 million loss for the three month period ended September 30, 2010, as compared to $1.8 million income for the same period in 2009. This decrease in net income was attributable to $0.1 million decrease in the noncontrolling interest of Navios Logistics and a $2.5 million decrease in the noncontrolling interest of Navios Acquisition.

          For the Nine Month Period ended September 30, 2010 compared to the Nine Month Period ended September 30, 2009

          The following table presents consolidated revenue and expense information for the nine month periods ended September 30, 2010 and 2009. This information was derived from the unaudited consolidated revenue and expense accounts of Navios Holdings for the respective periods.

		Nine Month				Nine Month
		Period ended				Period ended
		September 30,				September 30,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Revenue		$	489,991			$	449,946
Time charter, voyage and logistic business expenses			(254,885	)			(270,037	)
Direct vessel expenses			(30,603	)			(23,079	)
General and administrative expenses			(43,549	)			(30,961	)
Depreciation and amortization			(71,171	)			(51,832	)
Interest income/expense and finance cost, net			(64,878	)			(42,877	)
Gain on derivatives			4,005				2,786
Gain on sale of assets			26,134				16,790
Gain on change in control			17,742				—
Other expense, net			(10,603	)			(13,509	)
Income before equity in net earnings of affiliate companies			62,183				37,227
Equity in net earnings of affiliated companies			29,417				19,957
Income before taxes			91,600				57,184
Income taxes			657				2,027
Net income			92,257				59,211
Less: Net (income)/loss attributable to the noncontrolling interest			193				(3,763	)
Net income attributable to Navios Holdings common stockholders		$	92,450			$	55,448

     Set forth below are selected historical and statistical data for Navios Holdings for each of the nine month periods ended September 30, 2010 and 2009 that the Company believes may be useful in better understanding the Company’s financial position and results of operations.

		Nine month period ended
		September 30,
		2010				2009
		(unaudited)				(unaudited)
FLEET DATA
Available days			12,140				11,550
Operating days			12,106				11,516
Fleet utilization			99.7	%			99.7	%
Equivalent vessels			44				43
AVERAGE DAILY RESULTS
Time Charter Equivalents		$	25,298			$	26,353

     During the nine month period ended September 30, 2010, there were 590 more available days as compared to the same period of 2009 due to an increase of 1,557 available ownership days following the delivery of newbuilding owned vessels at various times in 2009 and 2010. This increase was offset by a decrease in long term and short term chartered in fleet available days by 733 and 234 days, respectively. Navios Holdings can increase or decrease its fleet’s size by chartering-in vessels for long or short-term periods (less than one year).

     The average TCE rate for the nine month period ended September 30, 2010 was $25,298 per day, $1,055 per day lower than the rate achieved in the same period of 2009. This was primarily due to the decrease in the freight market resulting in lower charter-out daily rates in the nine month period of 2010 than those achieved in the same period of 2009.

     Revenue: Revenue from drybulk vessel operations for the nine months ended September 30, 2010 was $338.7 million as compared to $346.1 million for the same period during 2009. The decrease in revenue was mainly attributable to the decrease in TCE per day of 4.0% to $25,298 in the first nine months of 2010 from $26,353 per day in the same period of 2009. The increase of 590 available days was mainly attributable to an increase of 1,557 available ownership days following the delivery of newbuilding

owned vessels since the third quarter of 2009. This increase of 590 available days was offset by a decrease in short-term and long-term fleet available days of 234 days and 733 days, respectively. The decrease in revenue was partially offset by an increase in available days of the fleet of 5.1% to 12,410 days in the first nine months of 2010 from 11,550 days in the same period of 2009.

     Revenue from the logistics business was approximately $143.1 million for the nine months ended September 30, 2010 as compared to $103.8 million during the same period of 2009. This increase was mainly attributable to (a) the acquisition of the Makenita H in June 2009, which was fully operational during the nine month period of 2010, (b) the acquisition of the Sara H in February 2010, (c) the increased operations of Navios Logistics’ liquid port and (d) the increased storage capacity of Navios Logistics’ dry port in Uruguay following the construction of its new silo.

     Revenue from tanker vessel operations for the nine month period ended September 30, 2010 was $8.1 million. Following the VLCC Acquisition and the acquisitions of the Colin Jacob in June 2010 and the Ariadne Jacob in July 2010, Navios Acquisition had 309 available days at a TCE of $26,084 for the nine month period ended September 30, 2010. There was no revenue in the corresponding period of 2009.

     Time Charter, Voyage and Logistics Business Expenses: Time charter, voyage and logistic business expenses decreased by $15.1 million or 5.6% to $254.9 million for the nine month period ended September 30, 2010, as compared to $270.0 million for the same period in 2009. This decrease was primarily due to the decrease in the short-term chartered in fleet activity (which also negatively affected the available days of the fleet, discussed above) which was partially offset by an increase of $35.1 million in logistic business expenses.

     Time charter and voyage expenses from tanker vessel operations for the nine months ended September 30, 2010 were $0.1 million and $0 for the corresponding period in 2009, since Navios Acquisition was under development stage. Time charter expenses are mainly related to broker fees.

     Direct Vessel Expenses: Direct vessel expenses for operation of the owned fleet increased by $7.5 million to $30.6 million or 32.5% for the nine month period ended September 30, 2010, as compared to $23.1 million for the same period in 2009. Direct vessel expenses include crew costs, provisions, deck and engine stores, lubricating oils, insurance premiums and costs for maintenance and repairs. The increase resulted primarily from the additional owned vessels through the first nine months of 2010 compared to the same period in 2009 and the increase in crew costs, spares and lubricating oils.

     Direct vessel expenses from tanker vessel operations for the nine months ended September 30, 2010 were $2.5 million and $0 for the corresponding period in 2009, since Navios Acquisition was under development stage. Direct vessel expenses consisted of all expenses relating to the operation of vessels, including crewing, repairs and maintenance, insurance, stores and lubricants and miscellaneous expenses such as communications and amortization of drydock and special survey costs. Beginning on May 28, 2010, such services are provided to Navios Acquisition by Navios Holdings through a management agreement dated May 28, 2010.

     General and Administrative Expenses: General and administrative expenses of Navios Holdings are composed of the following:

		Nine month period				Nine month period
		ended				ended
		September 30,				September 30,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Payroll and related costs(1)		$	11,908			$	10,556
Professional, legal and audit fees(1)			3,488				3,885
Navios Acquisition			8,514				—
Navios Logistics			9,308				6,207
Other(1)			2,110				2,321
Sub-total			35,328				22,969
Credit risk insurance(1)			8,221				7,992
General and administrative expenses		$	43,549			$	30,961

     The increase by $12.5 million to $43.5 million or 40.3% for the nine month period ended September 30, 2010, as compared to $31.0 million for the same period of 2009, was mainly attributable to (a) a $1.4 million increase in payroll and other related costs, (b) a $3.1 million increase in general and administrative expenses relating to the logistics business mainly attributable to an increase in salaries, professional fees and other administrative costs, (c) $8.5 million in general and administrative expenses attributable to Navios Acquisition mainly due to certain expenses incurred relating to the VLCC Acquisition amounting to $8.0 million out of which $2.4 million relate to various audit, legal and consulting fees and $5.6 million relate to the valuation of 3,000 shares of preferred stock issued to an independent third party holder consultancy and advisory fees. The increase was also attributable to a $0.2 million increase in credit risk insurance. The overall increase of $13.2 million was offset by (a) a $0.4 million decrease in professional, legal and audit fees and (b) a $0.3 million decrease in other general and administrative expenses.

     Depreciation and Amortization: For the nine month period ended September 30, 2010, depreciation and amortization increased by

$19.4 million compared to the same period in 2009 primarily due to (a) a $18.1 million increase in depreciation of vessels due to the increase in the owned fleet in comparison to the same period of 2009, (b) a $0.8 million increase in depreciation and amortization from the logistics business mainly due to the acquisition of the Makenita H at the end of the second quarter of 2009 and the Sarah H in February 2010, (c) the additional depreciation of the new silo constructed at the dry port and (d) $2.4 million increase from Navios Acquisition mainly due to the amortization of intangible assets and liabilities associated with the VLCC Acquisition. This increase was partially offset by $1.9 million decrease in amortization of favorable and unfavorable leases.

     Interest Income/Expense and Finance Cost, Net: Interest income/expense and finance cost, net for the nine month period ended September 30, 2010 increased to $64.9 million, as compared to $42.9 million in the same period of 2009. This increase of $22.0 million was mainly due to (a) an increase in interest expense and finance cost following the issuance of $400.0 million first priority ship mortgage notes in November 2009, (b) an increase in average outstanding loan balance from $205.0 million in the first nine months of 2009 to $391.2 million in the same period of 2010 (excluding the drawdown relating to facilities for the construction of the Capesize vessels) and (c) an increase of $1.8 million in interest expense and finance cost of Navios Acquisition mainly due to interest expense, commitment fees and amortization of finance fees related to certain secured credit facilities obtained to partially finance the acquisition of its fleet. The increase in Navios Logistics’ interest expense and finance cost for the nine month period ended September 30, 2010 was below $0.1 million. This increase in interest expense and finance cost, net was partially offset by (a) a decrease in average LIBOR rate to 0.4% for the nine month period ended September 30, 2010 as compared to 1.72% for the same period in 2009 and (b) an increase of interest income by $1.7 million to $2.9 million for the nine month period ended September 30, 2010, as compared to $1.2 million for the same period of 2009. The increase of $1.7 million also includes interest income from Navios Logistics of $0.2 million. Interest income from Navios Acquisition was below $0.1 million. The overall interest income increase was mainly attributable to increased income from time deposits due to higher rates achieved.

     Gains on Derivatives: Income from derivatives increased by $1.2 million to $4.0 million during the nine month period ended September 30, 2010, as compared to $2.8 million for the same period in 2009. Navios Holdings records the change in the fair value of derivatives at each balance sheet date. The FFAs market has experienced significant volatility in the past few years and, accordingly, recognition of the changes in the fair value of FFAs has, and can, cause significant volatility in earnings. The extent of the impact on earnings is dependent on two factors: market conditions and Navios Holdings’ net position in the market. Market conditions were volatile in both periods. As an indicator of volatility, selected Baltic Exchange Panamax time charter average rates are shown below.

		Baltic
		Exchange’s
		Panamax Time
		Charter
		Average Index
July 12, 2010		$	15,648	(a)
May 20, 2010		$	37,099	(b)
September 30, 2010		$	19,784	(*)
January 19, 2009		$	3,917	(c)
July 24, 2009		$	28,209	(d)
September 30, 2009		$	18,267	(*)

     Gain on Sale of Assets: The gain on sale of assets for the nine month period ended September 30, 2010 was $26.1 million from (a) a gain of $23.8 million from the sale of the Navios Hyperion, on January 8, 2010 to Navios Partners (b) a gain of $0.6 million from the sale of the Navios Aurora II and (c) a gain of $1.7 million from the sale of the Navios Pollux to Navios Partners and May 21, 2010. During the same period in 2009, a gain of $16.8 million resulted from the sale of the Navios Sagittarius to Navios Partners on June 10, 2009.

     Gain on Change in Control: The gain on change in control for the nine month period ended September 30, 2010 of $17.7 million in connection with Navios Acquisition. Upon obtaining control of Navios Acquisition, the investment in common shares and the investment in warrants were remeasured to fair value resulting in a gain of $17.7 million.

     Other Expense, net: Other expense, net decreased by $2.9 million to $10.6 million for the nine month period ended September 30, 2010, from $13.5 million other expense for the same period in 2009. This decrease was mainly due to (a) a $13.8 million unrealized mark-to-market losses on common units of Navios Partners accounted for as available-for-sale investments written-down to their market value at the nine month period ended September 30, 2009, which was below the prevailing market value, (b) a $0.7 million decrease in miscellaneous voyage expenses and (c) a $2.2 million increase in miscellaneous income. This decrease in other expense, net was partially offset by (a) a decrease in other income by $6.1 million due to the non-cash compensation income relating to the relief of Navios Partners from its obligation to purchase the Navios Bonavis recognized in the nine month period ended September 30, 2009, (b) an increase of $3.7 million in provision for losses on accounts receivable, and (c) an increase of $4.0 million in other expenses of Navios Logistics mainly due to increase in provision for bad debts and in taxes other than income taxes.

     Equity in Net Earnings of Affiliated Companies: Equity in net earnings of affiliated companies increased by $9.4 million to $29.4 million for the nine month period ended September 30, 2010, from $20.0 million equity in earnings for the same period in 2009. This increase was mainly due to the additional deferred gain recognized in the statements of income during the nine month period ended September 30, 2010 under “Equity in net earnings of affiliated companies” following Navios Partners’ public equity offerings during the last quarter of 2009 and during 2010. The deferred gain recognized in equity in earnings in connection with the public offerings of Navios Partners’ common units relates to gains that initially arose from the sale of vessels by the Company to Navios Partners, the Company recognizes the gain immediately in earnings only to the extent of the interest in Navios Partners owned by third parties and defers recognition of the gain to the extent of its own ownership interest in Navios Partners (the “deferred gain”) (see also “Related Party Transactions” section). Subsequently, the deferred gain is amortized to income over the remaining useful life of the vessel. The recognition of the deferred gain is accelerated in the event that (i) the vessel is subsequently sold or otherwise disposed of by Navios Partners or (ii) the Company’s ownership interest in Navios Partners is reduced.

     Income Taxes: Income taxes decreased by $1.4 million to $0.6 million for the nine month period ended September 30, 2010, as compared to $2.0 million for the same period in 2009. The main reason was the $1.4 million decrease in income taxes relating to Navios Logistics. Navios Logistics’ income taxes consist of income taxes calculated for certain subsidiaries of Navios Logistics, which are subject to corporate income tax.

     Net (Income)/Loss Attributable to the Noncontrolling Interest: Net (income)/loss attributable to the noncontrolling interest decreased by $4.0 million for the nine month period ended September 30, 2010, to $0.2 million income from $3.8 million loss for the same period in 2009. This decrease was attributable to (a) a $2.6 million decrease in the noncontrolling interest relating to Navios Acquisition and (b) a $1.4 million increase in noncontrolling interest relating to Navios Logistics.

NAVIOS SOUTH AMERICAN LOGISTICS INC.

          The following is a discussion of the financial condition and results of operations for the three and nine month periods ended September 30, 2010 and 2009 of Navios Logistics. These financial statements have been prepared in accordance with U.S. GAAP.

Recent Developments

          In September 2010, Navios Logistics acquired an additional piece of land located in the southern part of the Nueva Palmira Free Zone as part of a project to develop a new transshipment facility for mineral ores and liquid bulks.

          On September 16, 2010, Navios Logistics entered into a three-year charter-in agreement for 15 tank barges, of which 13 tank barges have already been delivered. The 13 delivered tank barges have a total capacity of 23,784 cubic meters.

Financial Highlights

          The following table presents consolidated revenue and expense information for each of the three and nine month periods ended September 30, 2010 and 2009.

		Three Month				Three Month				Nine Month				Nine Month
		Period ended				Period ended				Period ended				Period ended
		September 30, 2010				September 30, 2009				September 30, 2010				September 30, 2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenue		$	55,302			$	39,339			$	143,143			$	103,781
Time charter, voyage and logistics business expenses			(38,389	)			(23,775	)			(101,529	)			(66,407	)
General and administrative expenses			(3,500	)			(2,053	)			(9,308	)			(6,207	)
Depreciation and amortization			(5,530	)			(5,451	)			(16,872	)			(16,078	)
Interest income/expense and finance cost, net			(1,113	)			(1,558	)			(3,153	)			(3,310	)
Other expense, net			(4,016	)			(2,038	)			(8,669	)			(4,694	)
Income before taxes		$	2,754			$	4,464			$	3,612			$	7,085
Income taxes			(168	)			517				876				2,242
Net income			2,586				4,981				4,488				9,327
Less: Net income attributable to the noncontrolling interest			(1,129	)			(99	)			(1,163	)			(829	)
Net income attributable to Navios Holdings common stockholders		$	1,457			$	4,882			$	3,325			$	8,498

The following table presents consolidated balance sheets of Navios Logistics as of September 30, 2010 and December 31, 2009.

		September 30,				December 31,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	32,742			$	26,927
Restricted cash			461				1,674
Accounts receivable, net			20,003				15,578
Prepaid expenses and other current assets			11,886				13,598
Total current assets			65,092				57,777
Non-current assets
Vessels, port terminal and other fixed assets, net			315,312				265,850
Deferred financing costs, net			1,128				870
Deferred dry-dock and special survey costs, net			2,153				1,673
Other long-term assets			6,165				9,436
Intangible assets other than goodwill			69,422				77,185
Goodwill			105,048				91,681
Total non-current assets			499,228				446,695
Total assets		$	564,320			$	504,472
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	17,896			$	17,953
Accrued expenses			10,911				7,520
Due to affiliate companies			154				94
Capital lease obligations			1,243				—
Current portion of long-term debt			3,621				5,829
Total current liabilities			33,825				31,396
Non-current liabilities
Long-term debt, net of current portion			111,135				114,564
Capital lease obligations, net of current portion			31,330				—
Deferred tax liability			21,067				22,778
Long-term liabilities			22,537				6,199
Total non-current liabilities			186,069				143,541
Total liabilities			219,894				174,937
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock — $1 par value: 50,000 authorized shares; 20,000 shares issued and outstanding at September 30, 2010 and December 31, 2009			20				20
Additional paid-in capital			292,669				284,761
Retained earnings			15,067				8,779
Total Navios Logistics stockholders’ equity			307,756				293,560
Noncontrolling interest			36,670				35,975
Total equity			344,426				329,535
Total liabilities and equity		$	564,320			$	504,472

Period-over-Period Comparisons of Navios Logistics

     For the Three Month Period ended September 30, 2010 compared to Three Month Period ended September 30, 2009

          Revenue: For the three month period ended September 30, 2010, Navios Logistics’ revenue increased by $16.0 million or 40.7% to $55.3 million as compared to $39.3 million for the same period during 2009. Revenue from dry port terminal business increased by $0.1 million or 1.7% to $6.1 million for the three month period ended September 30, 2010, as compared to $6.0 million for the same period during 2009. The increase was mainly attributable to an increase in volumes in the dry port terminal business and to additional storage capacity due to the new silo constructed at its dry port facilities in Uruguay. The new silo had been fully operational since August 2009. Revenue from the logistics business increased by $15.9 million or 47.7% to $49.2 million for the three months period ended September 30, 2010, as compared to $33.3 million for the same period during 2009. This increase was mainly attributable to (a) the acquisition of the Sara H on February 2010, and (b) the increase in product sales at Navios Logistics’ liquid port.

          Time Charter, Voyage and Logistics Business Expenses: Time charter, voyage and logistics business expenses for the three months period ended September 30, 2010, increased by $14.6 million or 61.3% to $38.4 million as compared to $23.8 million for the same period during 2009. Dry port terminal business expenses for the three months period ended September 30, 2010 increased by $0.3 million or 21.4% to $1.7 million, as compared to $1.4 million for the same period during 2009. This increase was mainly attributable to an increase in Navios Logistics’ activities and to the additional cost of operations of the new silo constructed at Navios Logistics’ port facilities in Uruguay. Time charter and voyage expenses of logistics business increased by $14.3 million or 63.8% to $36.7 million for the three month period ended September 30, 2010, as compared to $22.4 million for the same period in 2009. The increase was mainly attributable to an increase in costs of products sold in Petrosan and to an increase in other operating costs, mainly fuels and lubricants, payroll and related costs, repairs and maintenance expenses.

          General and Administrative Expenses: General and administrative expenses increased by $1.4 million or 66.7% to $3.5 million for the three month period ended September 30, 2010, as compared to $2.1 million for the same period during 2009. General and administrative expenses relating to dry port terminal business were $0.2 million for both three month periods ended September 30, 2010 and 2009. General and administrative expenses relating to logistics business increased by $1.4 million or 73.7% to $3.3 million for the three month period ended September 30, 2010, as compared to $1.9 million for the same period during 2009. The increase was mainly attributable to an increase in salaries, professional fees and other administrative costs.

          Depreciation and Amortization: Depreciation and amortization expense was $5.5 million in both periods ended September 30, 2010 and 2009. Depreciation of tangible and amortization of intangible assets for the three month period ended September 30, 2010, amounted to $4.4 million and $1.1 million, respectively.

          Interest Income/Expense and Finance Costs, Net: Interest expense and finance costs, net decreased by $0.5 million or 31.3% to $1.1 million for the three month period ended September 30, 2010, as compared to $1.6 million for the same period of 2009. Net Interest expense amounted to $0.9 million and the remaining $0.2 million relate to various finance costs. The main reason was the decrease in the interest rates, partially offset by an increase in the outstanding loan balances used to finance the vessel acquisitions.

          Other Expense, Net: Other expense, net increased by $2.0 million or 100% to $4.0 million for the three month period ended September 30, 2010, as compared to $2.0 million for the same period of 2009. This increase was mainly attributable to an increase in taxes other than income taxes.

          Income Taxes: Income taxes decreased by $0.7 million or 140.0% for the three month period ended September 30, 2010 to a net tax expense of $0.2 million as compared to a net tax income of $0.5 million for the same period in 2009. Income taxes consist of income taxes calculated for certain subsidiaries of Navios Logistics, which are subject to corporate income tax.

For the Nine Month Period ended September 30, 2010 compared to Nine Month Period ended September 30, 2009

     Revenue: For the nine month period ended September 30, 2010, Navios Logistics’ revenue increased by $39.3 million or 37.9% to $143.1 million as compared to $103.8 million for the same period during 2009. Revenue from dry port terminal business increased by $2.7 million or 19.4% to $16.6 million for the nine month period ended September 30, 2010, as compared to $13.9 million for the same period during 2009. The increase was mainly attributable to an increase in volumes in the dry port terminal business and to additional storage capacity due to the new silo constructed at its dry port facilities in Uruguay. The new silo had been fully operational since August 2009. Revenue from the Logistics Business increased by $36.6 million or 40.7% to $126.5 million for the nine month period ended September 30, 2010, as compared to $89.9 million for the same period during 2009. This increase was mainly attributable to (a) the acquisition of the Makenita H and Sara H, in June 2009 and February 2010, respectively, and (b) the increase in product sales at Navios Logistics’ liquid port. The vessels Jiujiang and Stavroula, which were delivered in June and July 2010, respectively, were not operating during the three month period ended September 30, 2010. Both vessels are currently trading in the Argentinean cabotage business, in the Hidrovia region, under spot contracts.

     Time Charter, Voyage and Logistics Business Expenses: Time charter, voyage and logistics business expenses for the nine month period ended September 30, 2010, increased by $35.1 million or 52.9% to $101.5 million as compared to $66.4 million for the same period during 2009. Dry port terminal business expenses for the nine month period ended September 30, 2010 increased by $1.4 million or 38.9% to $5.0 million, as compared to $3.6 million for the same period during 2009. This increase was mainly attributable to an increase in Navios Logistics’ activities and to the additional cost of operations of the new silo constructed at Navios Logistics port facilities in Uruguay. Time charter and voyage expenses of logistics business increased by $33.7 million or 53.7% to $96.5 million for the nine months period ended September 30, 2010, as compared to $62.8 million for the same period in 2009. The increase was mainly attributable to an increase in costs of products sold in Petrosan and to an increase in other operating costs, mainly fuels and lubricants, payroll and related costs and repairs and maintenance expenses.

     General and Administrative Expenses: General and administrative expenses increased by $3.1 million or 50.0% to $9.3 million for the nine month period ended September 30, 2010, as compared to $6.2 million for the same period during 2009. General and administrative expenses relating to dry port terminal business were $0.7 million for both nine month periods ended September 30, 2010 and 2009. General and administrative expenses relating to logistics business increased by $3.1 million or 56.4% to $8.6 million for the nine month period ended September 30, 2010, as compared to $5.5 million for the same period during 2009. The increase was mainly attributable to an increase in salaries, professional fees and other administrative costs.

     Depreciation and Amortization: Depreciation and amortization expense increased by $0.8 million or 5.0% to $16.9 million for the nine month period ended September 30, 2010, as compared to $16.1 million for the same period of 2009. Depreciation of tangible and amortization of intangible assets for the nine month period ended September 30, 2010, amounted to $13.5 million and $3.4 million, respectively. This increase was mainly attributable to the acquisition of the Makenita H and the Sara H in June 2009 and February 2010, respectively, and to additional depreciation from the new silo constructed at the dry port.

     Interest Income/Expense and Finance Costs, Net: Interest expense and finance costs, net decreased by $0.1 million or 3.0% to $3.2 million for the nine month period ended September 30, 2010, as compared to $3.3 million for the same period of 2009. Interest expense amounted to $2.7 million and the remaining $0.5 million relate to various finance costs. The main reason was the decrease in the interest rates and an increase in the interest income provided by the financial investments, partially offset by an increase in the outstanding loans used to finance the vessel acquisitions.

     Other Expense, Net: Other expense, net increased by $4.0 million or 85.1% to $8.7 million for the nine month period ended September 30, 2010, as compared to $4.7 million for the same period of 2009. This increase was mainly attributable to an increase in taxes other than income taxes.

     Income Taxes: Income taxes, net decreased by $1.3 million or 59.1% for the nine month period ended September 30, 2010 to $0.9 million as compared to $2.2 million for the same period in 2009. Income taxes consist of income taxes calculated for certain subsidiaries of Navios Logistics, which are subject to corporate income tax.

     EBITDA: EBITDA represents net income before interest, taxes, depreciation and amortization, and non-controlling interest. Navios Logistics uses EBITDA because Navios Logistics believes that EBITDA is a basis upon which operational performance can be assessed and because Navios Logistics believes that EBITDA presents useful information to investors regarding Navios Logistics’ ability to service and/or incur indebtedness. Navios Logistics also uses EBITDA: (i) by prospective and current lessors as well as potential lenders to evaluate potential transactions; and (ii) to evaluate and price potential acquisition candidates.

EBITDA Reconciliation to Net Income

		Three Month Period Ended
		September 30, 2010				September 30, 2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Net income		$	2,586			$	4,981
Noncontrolling interest			(1,129	)			(99	)
Depreciation and amortization			5,530				5,451
Amortization of deferred drydock costs			114				74
Interest income/expense and financing costs, net			1,113				1,558
Income taxes			168				(517	)
EBITDA		$	8,382			$	11,448
		Nine Month Period Ended
		September 30, 2010				September 30, 2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Net income		$	4,488			$	9,327
Noncontrolling interest			(1,163	)		$	(829	)
Depreciation and amortization			16,872				16,078
Amortization of deferred drydock costs			283				194
Interest income/expense and financing costs, net			3,153				3,310
Income taxes			(876	)			(2,242	)
EBITDA		$	22,757			$	25,838

          EBITDA decreased by $3.0 million to $8.4 million for the three month period ended September 30, 2010, as compared to $11.4 million for the same period of 2009. This decrease was mainly due to (a) a $14.6 million increase in time charter, voyage expenses and port terminal expenses, (b) the increase in other expense by $2.0 million, (c) the increase in general and administrative expenses by $1.4 million, and (d) the increase in noncontrolling interest by $1.0 million. This decrease was offset by a $16.0 million increase in revenue.

          EBITDA decreased by $3.0 million to $22.8 million for the nine month period ended September 30, 2010, as compared to $25.8 million for the same period of 2009. This decrease was mainly due to (a) a $35.1 million increase in time charter, voyage expenses and port terminal expenses, (b) a $3.7 million increase in other expense, (c) a $3.1 million increase in general and administrative expenses, and (d) a $0.4 million increase in noncontrolling interest. This decrease was offset by a $39.3 million increase in revenue.

Balance sheet highlights of Navios Logistics

     On June 2, 2009, Navios Logistics took delivery of a product tanker vessel named the Makenita H. The purchase price of the vessel (including direct costs) amounted to approximately $25.2 million.

     In February 2010, HS South Inc., one of our majority owned subsidiaries, took delivery of the Sara H, a 9,000 dwt, double-hulled product oil tanker vessel, which is chartered-out for three years, beginning April 2010. The purchase price of the vessel (including direct costs) amounted to approximately $18.0 million. The vessel has been financed through a long-term loan under similar terms to those relating to the Makenita H and the Estefania H.

     In June 2010, Navios Logistics agreed to enter into long-term bareboat agreements for two new product tankers, the Stavroula and the Jiujiang, each with a capacity of 16,871 dwt. The Jiujiang and the Stavroula were delivered in June and July 2010, respectively. Both tankers are accounted as finance leases with a value of $17.9 million for Jiujiang and $17.1 million for Stavroula.

Liquidity and Capital Resources

     Navios Holdings has historically financed its capital requirements with cash flows from operations, equity and debt contributions from stockholders and bank loans. Main uses of funds have been capital expenditures for the acquisition of new vessels, new construction and upgrades at the port terminal, expenditures incurred in connection with ensuring that the owned vessels comply with international and regulatory standards, repayments of bank loans and payments of dividends. Navios Holdings anticipates that cash on hand, internally generated cash flows and borrowings under the existing credit facilities will be sufficient to fund the operations of the fleet and the logistics business, including working capital requirements. However, see “Exercise of Vessel Purchase Options”, “Working Capital Position” and “Long Term Debt Obligations and Credit Arrangements” for further discussion of Navios Holdings’ working capital position.

     In November 2008, the Board of Directors approved a share repurchase program of up to $25.0 million of Navios Holdings’ common stock pursuant to a program adopted under Rule 10b5-1 under the Exchange Act. The program does not require any minimum purchase or any specific number or amount of shares and may be suspended or reinstated at any time in Navios Holdings’ discretion and without notice. Repurchases are subject to restrictions under the terms of Navios Holdings’ credit facilities and senior notes. During the nine month period ended September 30, 2009, 331,900 shares were repurchased under this program for a total consideration of $0.7 million. Since the initiation of the program, 907,480 shares have been repurchased for a total consideration of $1.7 million. There were no shares repurchased during the nine month period ended September 30, 2010.

     The following table presents cash flow information derived from the unaudited consolidated statements of cash flows of Navios Holdings for the nine month periods ended September 30, 2010 and 2009.

		Nine Month Period				Nine Month Period
		Ended September 30,				Ended September 30,
		2010				2009
		(Expressed in thousands of U.S. dollars)
		(unaudited)				(unaudited)
Net cash provided by operating activities		$	124,882			$	144,992
Net cash used in investing activities			(304,389	)			(552,638	)
Net cash provided by financing activities			138,774				512,876
(Decrease)/increase in cash and cash equivalents			(40,733	)			105,230
Cash and cash equivalents, beginning of the period			173,933				133,624
Cash and cash equivalents, end of period		$	133,200			$	238,854

     Cash provided by operating activities for the nine month period ended September 30, 2010 as compared to the cash provided for the nine month period ended September 30, 2009:

     Net cash provided by operating activities decreased by $20.1 million to $124.9 million for the nine month period ended September 30, 2010, as compared to $145.0 million for the same period of 2009. In determining net cash provided by operating activities, net income is adjusted for the effects of certain non-cash items including depreciation and amortization and unrealized gains and losses on derivatives.

     The cumulative effect of the adjustments to reconcile net income to net cash provided by operating activities was a $52.7 million increase for the nine month period ended September 30, 2010, which consisted mainly of the following adjustments: $71.2 million of depreciation and amortization; $2.3 million of amortization of deferred dry-dock expenses; $5.2 million of amortization of deferred finance fees; $6.7 million provision for losses on accounts receivable; $15.0 million of unrealized losses on FFAs; and $7.4 million relating to share-based compensation. These adjustments were partially offset by $6.0 million of unrealized gain on Navios Acquisition Private Placement Warrants, $3.7 million movement in earnings in affiliates net of dividends received, $17.7 million gain on fair value investment of Navios Acquisition, $0.9 million of unrealized gain on interest rate swaps, $26.1 million from the sales of the Navios Hyperion, the Navios Aurora II and the Navios Pollux to Navios Partners and a $0.7 million in income taxes.

     The negative change in operating assets and liabilities of $20.1 million for the nine month period ended September 30, 2010 resulted from a $6.9 million increase in accounts receivable, a $5.7 million increase in restricted cash, a $0.9 million increase in due from affiliates, a $2.4 million increase of interest payments, a $8.6 million relating to payments for drydock and special survey costs, a $21.0 million decrease in accounts payable and a $10.6 million decrease in other long term liabilities. The negative change in operating assets and liabilities for the nine month period ended September 30, 2010 was offset by a $5.8 million increase in derivative accounts, a $4.1 million increase in deferred income, a $23.9 million increase in sundry liabilities and accruals and a $2.0 million decrease in prepaid expenses and other assets.

     The cumulative effect of the adjustments to reconcile net income to net cash provided by operating activities was a $46.5 million increase for the nine month period ended September 30, 2009 which consisted mainly of the following adjustments: $51.8 million of depreciation and amortization; $1.8 million of amortization of deferred dry-dock expenses; $3.2 million of amortization of deferred finance fees; $1.4 million provision for losses on accounts receivable; $5.5 million of unrealized losses on FFAs; $13.8 million unrealized mark-to-market losses on common units of Navios Partners, accounted for as available-for-sale investments; and $1.6 million relating to share-based compensation. These adjustments were partially offset by $6.8 million of unrealized gain on Navios Acquisition Warrants; $16.8 million gain on sale of the rights to the Navios Sagittarius to Navios Partners; $6.1 million of non-cash compensation income relating to the relief of Navios Partners from its obligation to purchase the Navios Bonavis; a $2.0 million movement in income taxes; $0.2 million of unrealized gain on interest rate swaps and $0.7 million movement in earnings in affiliates net of dividends received.

     A positive change in cash flow from operations of $39.3 million for the nine month period ended September 30, 2009 resulted from a $3.5 million decrease in accounts receivable; a $54.2 million increase in derivative accounts; a $8.4 million decrease in restricted cash and a $7.2 million increase in accrued expenses. This positive change was partially offset by; a $3.5 million increase in amounts due from affiliates; a $15.2 million decrease in accounts payable; a $1.6 million decrease in deferred income; $3.3 million relating to payments for dry-dock and special survey costs; a $0.4 million increase in prepaid expenses and other assets; and a $10.0 million increase in other long-term liabilities.

     Cash used in investing activities for the nine month period ended September 30, 2010 as compared to the nine month period ended September 30, 2009:

     Cash used in investing activities decreased by $248.2 million to $304.4 million for the nine month period ended September 30, 2010, from $552.6 million for the same period in 2009.

     Cash used in investing activities was the result of (a) the deposits for acquisitions of Capesize vessels under construction amounting to $314.6 million and $35.4 million for deposits for acquisitions of tanker vessels under construction, (b) $47.7 million movement in Navios Holdings’ cash which is kept in a pledged account and may be released to the Company subject to nominations of substitute vessels agreed to by the bank, (c) the amounts paid for the acquisition of the Navios Vector and the Navios Melodia amounted to $30.5 million and $12.0 million, respectively, including any additional expenses incurred from the vessels’ purchase and $78.6 million paid relating to the acquisition of the Colin Jacob and the Ariadne Jacob that were delivered on June 29, 2010 and July 2, 2010, respectively, (d) the purchase by Navios Holdings of 6,337,551 shares of Navios Acquisition common stock for $63.2 million in open market purchases, (e) $102.0 million paid net of cash assumed for the VLCC Acquisition and (f) the purchase of other fixed assets amounting to $9.8 million mainly relating to Navios Logistics. The above was offset by (a) proceeds of $63.0 million, $90.0 million, and $110.0 million from the sale of the Navios Hyperion, the Navios Aurora II, and the Navios Pollux, respectively, to Navios Partners and $18.3 million from the sale of the Vanessa, (b) net proceeds of $40.8 million from transfer of assets and liabilities of Navios Holdings to Navios Acquisition in exchange of a cash consideration, which was released from Navios Acquisitions’ trust account, (c) $0.2 million received in connection with the capital lease receivable, (d) $66.3 million, which represent the assumed cash of Navios Acquisition as of the de-“SPAC”-ing and (e) $0.8 million movement in Navios Acquisition that relates to release of cash from trust account used to pay deposits for its vessels under construction.

     Cash used in investing activities was $552.6 million for the nine month period ended September 30, 2009 and was the result of: (a) the payment of $25.6 million and $31.6 million cash portion for the acquisition of the Navios Vega in February 2009 and the Navios Celestial in September 2009, respectively, and $261.7 million cash portion for the acquisition of three Capesize vessels; (b) the deposits for acquisitions of Capesize vessels under construction amounting to $239.8 million; and (c) the purchase of other fixed assets amounting to $28.9 million mainly relating to the construction of the new silo of Navios Logistics and the acquisition of the tanker vessel Makenita H. The above was offset by $0.4 million received in connection with the capital lease receivable and by $34.6 million consideration received for the sale of the rights of the Navios Sagittarius to Navios Partners.

     Cash provided by financing activities for the nine month period ended September 30, 2010 as compared to the nine month period ended September 30, 2009:

     Cash provided by financing activities decreased by $374.1 million to $138.8 million for the nine month period ended September 30, 2010, compared to $512.9 million for the same period of 2009.

     Cash provided by financing activities for the nine month period ended September 30, 2010 was the result of: (a) $249.1 million of Navios Holdings’ loan proceeds (net of relating finance fees of $1.8 million) in connection with the drawdown of (i) $9.3 million from the loan facility with Marfin Egnatia Bank, (ii) $14.8 million drawdown from Emporiki Bank of Greece S.A. (“Emporiki Bank of Greece”) to finance the purchase of the Navios Antares, (iii) $36.9 million drawdown from Commerzbank for the construction of two Capesize vessels, (iv) $21.6 million drawdown from the loan facility with revolver facility with HSH Nordbank and Commerzbank A.G., (v) $21.0 million drawdown from Emporiki Bank of Greece for financing the construction of one Capesize bulk carrier, (vi) $14.0 million drawdown from DNB NOR BANK ASA to partially finance the construction of one Capesize bulk carrier, (vii) $0.3 million loan proceeds relating to the logistics business , (viii) $133.0 million assumed loans of Navios Acquisition as of the de-“SPAC”-ing; (b) $75.0 million from proceeds, net of fees, from the warrant exercise program for Navios Acquisition; (c) $128.0 million of Navios Acquisition loan proceeds (net of relating finance fees of $7.5 million for all new loans signed for tanker vessels), and (d) $0.4 million proceeds from issuance of common shares. The decrease of cash provided by financing activities was offset by (a) $20.1 million of dividends paid in the nine months ended September 30, 2010, (b) $146.8 million of installments paid in connection with the Navios Holdings’ outstanding indebtedness, of which $3.5 million is related with installments of Navios Logistics, (c) $65.9 million of installments paid in connection with Navios Acquisition’s outstanding indebtedness, of which $65.0 million is associated with facilities assumed the VLCC Acquisition and $0.9 million with Navios Acquisition’s existing credit facilities, (d) $77.0 million cash paid by Navios Holdings relating to the Warrant Program, (e) $0.5 million of contributions to noncontrolling shareholders relating to the logistics business and (f) $3.4 million increase in restricted cash required under the amendment in one of its facility agreements.

     Cash provided by financing activities was $512.9 million for the nine month period ended September 30, 2009 and was the result of $555.1 million of loan proceeds (net of relating finance fees of $6.8 million) in connection with a $36.0 million drawdown from the loan facility with DNB NOR BANK ASA for the construction of one Capesize vessel, $93.0 million drawdown from the loan facilities of Emporiki Bank of Greece for the construction of four Capesize vessels, a $60.0 million drawdown from Commerzbank for the acquisition of the Navios Bonavis, $98.4 million million drawdown from Commerzbank for the construction of three Capesize vessels, $120.0 million drawdown from Dekabank for the acquisition of two Capesize vessels, $20.0 million drawdown of the unsecured bond for the acquisition of Navios Pollux, $110.0 million drawdown from the Marfin Egnatia Bank loan facility and $24.5 million drawdown for the construction of Makenita H. The cash provided by financing activities was offset by: (a) the acquisition of treasury stock amounting to $0.7 million; (b) the $12.0 million capital installments paid in connection with Navios Holdings’ outstanding indebtedness; (c) the $8.4 million increase in restricted cash required under the amendment in one of its facility agreements; and (d) $21.1 million of dividends paid in the nine months ended September 30, 2009 in connection with the third quarter and fourth quarter of 2008 and the first quarter of 2009.

     Adjusted EBITDA: EBITDA represents net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA in this document represents EBITDA before stock based compensation. Navios Holdings believes that Adjusted EBITDA is a basis upon which liquidity can be assessed and presents useful information to investors regarding Navios Holdings’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Holdings also uses Adjusted EBITDA: (i) by prospective and current lessors as well as potential lenders to evaluate potential transactions; and (ii) to evaluate and price potential acquisition candidates.

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

     Because of these limitations, Adjusted EBITDA should not be considered as a principal indicator of Navios Holdings’ performance.

Adjusted EBITDA Reconciliation to Cash from Operations

		Three Months Ended
		September 30,				Sepetmber 30,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Net cash provided by operating activities		$	73,519			$	31,276
Net increase/(decrease) in operating assets			(4,996	)			18,643
Net increase in operating liabilities			(19,338	)			(14,710	)
Net interest cost			22,486				13,775
Deferred finance charges			(2,134	)			(1,087	)
Provision for losses on accounts receivable			(1,242	)			(334	)
Unrealized (loss)/gain on FFA derivatives, warrants and interest rate swaps			(4,549	)			5,303
Earnings in affiliates and joint ventures, net of dividends received			2,090				3,214
Earnings in affiliates, net of dividends received			1,827				1,451
Payments for dry-dock and special survey			842				(1,785	)
Noncontrolling interest			(5,619	)			—
Adjusted EBITDA		$	62,886			$	55,746

		Nine Months Ended
		September 30,				September 30,
		2010				2009
(Expressed in thousands of U.S. dollars)		(unaudited)				(unaudited)
Net cash provided by operating activities		$	124,882			$	144,992
Net increase/(decrease) in operating assets			13,619				(8,001	)
Net increase in operating liabilities			(2,100	)			(34,549	)
Net interest cost			64,877				42,877
Deferred finance charges			(5,244	)			(3,215	)
Provision for losses on accounts receivable			(6,680	)			(1,375	)
Unrealized (loss)/gain on FFA derivatives, warrants and interest rate swaps			(8,146	)			1,483
Gain on change in control			17,742				—
Earnings in affiliates and joint ventures, net of dividends received			3,715				692
Payments for dry-dock and special survey			8,556				3,282
Noncontrolling interest			193				(3,763	)
Non-cash compensation received			—				6,082
Unrealized losses on available for sale securities			—				(13,778	)
Gain on sale of assets			26,134				16,790
Transaction expenses			(5,619	)			—
Adjusted EBITDA		$	231,929			$	151,517

     Adjusted EBITDA for the three months ended September 30, 2010 and 2009 was $62.9 million and $55.7 million, respectively. The $7.2 million increase in Adjusted EBITDA was primarily due to (a) an increase in revenue of $9.6 million to $170.2 million in the third quarter of 2010 from $160.6 million in the same period of 2009, (b) a decrease in time charter, voyage and logistic business expenses of $11.5 million from $95.4 million in the third quarter of 2009 to $83.9 million in the same period of 2010, (c) a decrease of $2.6 million in noncontrolling interest expense from $1.8 million loss in the third quarter of 2009 to $0.8 million income for the same period in 2010 and (d) an increase in equity in net earnings from affiliated companies by $0.2 million. The overall variance of $23.9 million was partially offset by (a) an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) of $3.2 million to $10.6 million in the third quarter of 2010 from $7.4 million in the same period of 2009, (b) an increase in general and administrative expenses of $10.0 million (excluding share based compensation expenses) to $19.4 million in the third quarter of 2010 from $9.4 million in the same period of 2009, (c) a decrease of $2.2 million in gains from derivatives and (d) an increase of $1.3 million in other expense, net.

     Adjusted EBITDA for the nine months ended September 30, 2010 and 2009 was $231.9 million and $151.5 million, respectively. The $80.4 million increase in Adjusted EBITDA was primarily due to (a) an increase in revenue of $40.1 million to $490.0 million in the first nine months of 2010 from $449.9 million in the same period of 2009, (b) a decrease in time charter, voyage and logistic business expenses of $15.1 million to $254.9 million for the nine months ended September 30, 2010 from $270.0 million in the same period of 2009, (c) an increase in gains from derivatives of $1.2 million to $4.0 million in the first nine months of 2010 from $2.8 million in the same period of 2009, (d) a decrease in net other expense by $2.9 million to $10.6 million in the nine months of 2010 from $13.5 million in the same period of 2009, (e) gain on fair value of investment of Navios Acquisition by $17.7 million, (f) an increase in gain on sale of assets by $9.3 million to $26.1 million in the first nine months of 2010 from $16.8 million in the same period of 2009, (g) a decrease in noncontrolling interest expense of $4.0 million to $0.2 million income in the first nine months of 2010 from $3.8 million loss in the same period of 2009 and (h) an increase in equity in net earnings from affiliated companies of $9.5 million to $29.4 million in the first nine months of 2010 from $20.0 million in the same period of 2009. The overall variance of $99.7 million was partially offset by (a) an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) of $7.0 million to $28.3 million in the first nine months of 2010 from $21.3 million in the same period of 2009 and (b) an increase in general and administrative expenses of $12.3 million (excluding share based compensation expenses) to $41.7 million in the first nine months of 2010 from $29.4 million in the same period of 2009.

Long-term Debt Obligations and Credit Arrangements

     Senior Notes: In December 2006, the Company issued $300.0 million senior notes at a 9.5% fixed rate due on December 15, 2014. The senior notes are fully and unconditionally guaranteed, jointly and severally and on an unsecured senior basis, by all of Company’s subsidiaries, other than a subsidiary of Kleimar, Navios Logistics and its subsidiaries and the general partner of Navios Partners. In addition, the Company has the option to redeem the notes in whole or in part, at any time (1) before December 15, 2010, at a redemption price equal to

100% of the principal amount plus a make whole price which is based on a formula calculated using a discount rate of treasury bonds plus 50 bps, and (2) on or after December 15, 2010, at a fixed price of 104.75%, which price declines ratably until it reaches par in 2012. Furthermore, upon occurrence of certain change of control events, the holders of the notes may require the Company to repurchase some or all of the notes at 101% of their face amount. Under a registration rights agreement the Company and the guarantors filed a registration statement no later than June 25, 2007 which became effective on July 5, 2007, enabling the holders of notes to exchange the privately placed notes with publicly registered notes with identical terms. The senior notes contain covenants which, among other things, limit the incurrence of additional indebtedness, issuance of certain preferred stock, the payment of dividends, redemption or repurchase of capital stock or making restricted payments and investments, creation of certain liens, transfer or sale of assets, entering in transactions with affiliates, merging or consolidating or selling all or substantially all of Company’s properties and assets and creation or designation of restricted subsidiaries. Pursuant to the covenant regarding asset sales, the Company has to repay the senior notes at par plus interest with the proceeds of certain asset sales if the proceeds from such asset sales are not reinvested in the business within a specified period or used to pay secured debt.

     Ship Mortgage Notes: In November 2009, the Company issued $400.0 million first priority ship mortgage notes due on November 1, 2017 at an 8.875% fixed rate. The ship mortgage notes are senior obligations of Navios Holdings and are secured by first priority ship mortgages on 15 vessels owned by certain subsidiary guarantors and other related collateral securities. The ship mortgage notes are fully and unconditionally guaranteed, jointly and severally by all of our direct and indirect subsidiaries that guarantee the 9.5% senior notes. The guarantees of our subsidiaries that own mortgage vessels are senior secured guarantees and the guarantees of our subsidiaries that do not own mortgage vessels are senior unsecured guarantees. Concurrently with the issuance of the ship mortgage notes, Navios Holdings has deposited $105.0 million from the proceeds of the issuance into an escrow account. In December 2009, this amount was released to partially finance the acquisition of two designated Capesize vessels. At any time before November 1, 2012, Navios Holdings may redeem up to 35% of the aggregate principal amount of the ship mortgage notes with the net proceeds of a public equity offering at 108.875% of the principal amount of the ship mortgage notes, plus accrued and unpaid interest, if any, so long as at least 65% of the originally issued aggregate principal amount of the ship mortgage notes remains outstanding after such redemption. In addition, the Company has the option to redeem the ship mortgage notes in whole or in part, at any time (1) before November 1, 2013, at a redemption price equal to 100% of the principal amount plus a make whole price which is based on a formula calculated using a discount rate of treasury bonds plus 50 bps, and (2) on or after November 1, 2013, at a fixed price of 104.438%, which price declines ratably until it reaches par in 2015. Furthermore, upon occurrence of certain change of control events, the holders of the ship mortgage notes may require the Company to repurchase some or all of the notes at 101% of their face amount. Pursuant to the terms of a registration rights agreement, as a result of satisfying certain conditions, the Company and the guarantors are not obligated to file a registration statement that would have enabled the holders of ship mortgage notes to exchange the privately placed notes with publicly registered notes with identical terms. The ship mortgage notes contain covenants which, among other things, limit the incurrence of additional indebtedness, issuance of certain preferred stock, the payment of dividends, redemption or repurchase of capital stock or making restricted payments and investments, creation of certain liens, transfer or sale of assets, entering into certain transactions with affiliates, merging or consolidating or selling all or substantially all of Company’s properties and assets and creation or designation of restricted subsidiaries.

Loan Facilities:

     The majority of our senior secured credit facilities include maintenance covenants, including loan-to-value ratio covenants, based on either charter-adjusted valuations, or charter-free valuations. As of September 30, 2010, we were in compliance with all of the covenants under each of our senior secured credit facilities.

     HSH/Commerzbank Facility: In February 2007, Navios Holdings entered into a secured loan facility with HSH Nordbank and Commerzbank AG maturing on October 31, 2014. The facility composed of a $280.0 million term loan facility and a $120.0 million reducing revolving facility. In April 2008, the Company entered into an agreement for the amendment of the facility due to a prepayment of $10.0 million. After such amendment the term loan facility was repayable in 19 quarterly payments of $2.6 million, seven quarterly payments of $5.7 million and a balloon payment of $166.4 million. In March 2009, Navios Holdings further amended its facility agreement, effective as of November 15, 2008, as follows: (a) to reduce the Security Value Maintenance ratio (“SVM”) (ratio of the charter-free valuations of the mortgaged vessels over the outstanding loan amount) from 125% to 100%; (b) to obligate Navios Holdings to accumulate cash reserves into a pledged account with the agent bank of $14.0 million ($5.0 million in March 2009 and $1.1 million on each loan repayment date during 2009 and 2010, starting from January 2009); and (c) to set the margin at 200 bps. The amendment was effective until January 31, 2010.

     Following the sale of the Navios Apollon on October 29, 2009, Navios Holdings prepaid $13.5 million of the loan facility and permanently reduced its revolving credit facility by $4.8 million.

     Following the issuance of the ship mortgage notes in November 2009, the mortgages and security interests on ten vessels previously secured by the loan and the revolving facility were fully released in connection with the partial prepayment of the facility with approximately $197.6 million, of which $195.0 million was funded from the issuance of the ship mortgage notes and the remaining $2.6 million from the Company’s cash. The Company permanently reduced the revolving facility by an amount of $26.7 million and the term loan facility by $80.1 million. In April 2010, Navios Holdings further amended its facility agreement with HSH/Commerzbank as follows: (a) release of certain pledge deposits amounting to $117.5 million and acceptance additional securities of substitute vessels; and (b) to set a margin ranging from 115 bps to 175 bps depending on the specified security value. In April, 2010, the available amount of $21.6 million under the revolving facility was drawn and an amount of $117.5 million was kept in a pledged account. As of September 30, 2010, restricted cash of $18.0 million for financing the Navios Vector acquisition. The amount of $74.0 million for financing the Navios Melodia and Navios Fulvia acquisition ($37.0 million for each vessel) was drawn from the pledged account and a prepayment of $25.6 million was made on October 1, 2010. As a result, no outstanding amount was kept in the pledged account.

     The term-loan facility requires compliance with financial covenants, including specified SVM contained to total debt percentage and minimum liquidity. It is an event of default under the credit facility if such covenants are not complied with or if Angeliki Frangou, the Company’s Chairman and Chief Executive Officer, beneficially owns less than 20% of the issued stock.

     The revolving credit facility is available for future acquisitions and general corporate and working capital purposes.

     As of September 30, 2010, the outstanding amount under the revolving facility was $38.5 million and the outstanding amount under the term facility was $142.0 million.

     Emporiki Facility: In December 2007, Navios Holdings entered into a facility agreement with Emporiki Bank of Greece of up to $154.0 million in order to partially finance the construction of two Capesize bulk carriers. In July 2009, following an amendment of the above mentioned agreement, the amount of the facility has been changed to up to $130.0 million.

     On March 18, 2010, following the sale of Navios Aurora II to Navios Partners, Navios Holdings repaid $64.4 million. Following the delivery of the Navios Antares on January 2010, an additional amount of $14.8 million was drawn and the outstanding amount of the facility $64.4 million. The amended facility is repayable, in 10 semi-annual installments of $3.0 million and 10 semi-annual installments of $2.0 million with a final balloon payment of $14.9 million on the last payment date. The interest rate of the amended facility is based on a margin of 175 bps. The loan facility requires compliance with the covenants contained in the senior notes. As of September 30, 2010, the outstanding amount under this facility was $61.4 million.

     In September 2010, Navios Holdings entered into another facility agreement with Emporiki Bank of Greece of up to $40.0 million in order to partially finance the construction of one Capesize bulk carrier. The loan is repayable in 20 semi-annual installments of $1.5 million each, with a final balloon payment of $10.0 million on the last payment date. It bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the amount drawn was $21.0 million.

     DNB Facility: In June 2008, Navios Holdings entered into a facility agreement with DNB NOR BANK ASA of up to $133.0 million in order to partially finance the construction of two Capesize bulk carriers. In June 2009, following an amendment of the above-mentioned agreement, one of the two tranches amounting to $66.5 million was cancelled following the cancellation of construction of one of the two Capesize bulk carriers. As of September 30, 2010, the total available amount of $66.5 million was drawn. The amended facility is repayable six months following the delivery of the Capesize vessel in 11 semi-annual installments of $2.9 million, with a final payment of $34.6 million on the last payment date. The interest rate of the amended facility is based on a margin of 225 bps as defined in the new agreement. As of September 30, 2010, the outstanding amount under this facility was $63.6 million.

     In August 2010, Navios Holdings entered into a facility agreement with DNB NOR BANK ASA of up to $40.0 million in order to partially finance the construction of one Capesize bulk carrier. The loan is repayable three months following the delivery of the Capesize vessel in 24 quarterly installments of $0.6 million each, with a final balloon payment of $24.5 million on the last payment date. It bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the amount drawn was $14.0 million.

     Marfin Revolving Facility: In December 2008, Navios Holdings entered into a $90.0 million revolving credit facility with Marfin Egnatia Bank for general corporate purposes. The facility was repayable in one installment in December 2010 and bears            interest based on a margin of 275 bps. The facility contained customary covenants and required compliance with certain of the covenants contained in the indenture governing the existing senior notes. Following the issuance of the ship mortgage notes in November 2009, the ship mortgage previously secured by this revolving facility was fully released in connection with the partial repayment of the facility with approximately $83.4 million and the remaining balance amount of $6.6 million was fully repaid in December 2009.

     Dekabank Facility: In February 2009 (amended in May 2009), Navios Holdings entered into a facility of up to $120.0 million with Dekabank Deutsche Girozentrale to finance the acquisition of two Capesize vessels. The loan is repayable upon delivery of the Capesize vessels in 20 semi-annual installments and bears an interest rate based on a margin of 190 bps. The loan facility requires compliance with the covenants contained in the senior notes. The loan also requires compliance with certain financial covenants. As of December 31, 2009, both Capesize vessels, the Navios Happiness and the Navios Pollux had been delivered and the full amount was drawn. As of September 30, 2010, $91.0 million was outstanding under this facility. Following the sale of the Navios Pollux to Navios Partners in May 2010, an amount of $39.0 million was kept in a pledged account pending the delivery of a substitute vessel as collateral to this facility. The amount of $39.0 million kept in the pledged account was released to finance the delivery of the Capesize vessel Navios Buena Ventura that was delivered to Navios Holdings on October 29, 2010.

     Convertible Debt: In February 2009, Navios Holdings issued a $33.5 million convertible debt at a fixed rate of 2% exercisable at a price of $11.00 per share, exercisable until February 2012, in order to partially finance the acquisition of the Navios Vega. Interest is payable semi-annually. Unless previously converted, the amount is payable in February 2012. The Company has the option to redeem the debt in whole or in part in multiples of a thousand dollars, at any time after February 2010 at a redemption price equal to 100% of the principal amount to be redeemed. The convertible debt was recorded at fair market value on issuance at a discounted face value of 94.5%. The fair market value was determined using a binomial stock price tree model that considered both the debt and conversion features. The model used takes into account the credit spread of the Company, the volatility of its stock, as well as the price of its stock at the issuance date.

     Marfin Facility: In March 2009, Navios Holdings entered into a loan facility with Marfin Egnatia Bank of up to $110.0 million to be used to finance the pre-delivery installments for the construction of newbuilding and for general corporate purposes. Originally, $57.2 million

of the facility was repayable upon delivery of two Capesize vessels during 2009 and the remaining amounts due in one installment in February 2011. Following the refinancing of this facility in October 2009, as a result of which one subsidiary that is a guarantor of the ship mortgage notes issued in November 2009 was replaced as borrower with another, the facility was extended to October 2011. It bears interest at a rate based on a margin of 275 bps. As of September 30, 2010, the outstanding amount under this facility was $30.0 million, which was fully prepaid on October 1, 2010.

     Commerzbank Facility: In June 2009, Navios Holdings entered into a new facility agreement of up to $240.0 million (divided into four tranches of $60.0 million) with Commerzbank AG in order to partially finance the acquisition of a Capesize vessel and the construction of three Capesize vessels. The principal amount for the three Capesize vessels under construction is available for partial drawdown according to the terms of the payment of the shipbuilding contracts. Each tranche of the facility is repayable starting three months after the delivery of each Capesize vessel in 40 quarterly installments of $0.9 million with a final payment of $24.7 million on the last payment date. It bears interest at a rate based on a margin of 225 bps. As of September 30, 2010, the outstanding amount was $208.3 million. The loan facility requires compliance with the covenants contained in the senior notes. The loan also requires compliance with certain financial covenants. Following the delivery of two Capesize vessels, Navios Melodia and Navios Buena Ventura, on September 20, 2010 and October 29,2010, respectively, Navios Holdings fully repaid in October 2010 their outstanding loan balances of $53.6 million and $54.5 million, respectively.

     Unsecured Bond: In July 2009, Navios Holdings issued a $20.0 million unsecured bond due in July 2012 as a partial payment for the acquisition price of a Capesize vessel. Interest will accrue on the principal amount of the unsecured bond at the rate of 6% per annum. All accrued interest (which will not be compounded) will be first due and payable in July 2012, which is the maturity date. The unsecured bond may be prepaid by Navios Holdings at any time without prepayment penalty.

     Emporiki Facility: In August 2009, Navios Holdings entered into a loan agreement with Emporiki Bank of Greece of up to $75.0 million (divided into two tranches of $37.5 million) to partially finance the acquisition costs of two Capesize vessels. Each tranche of the facility is repayable in 20 semi-annual installments of $1.4 million with a final payment of $10.0 million on the last payment date. The repayment of each tranche starts six months after the delivery date of the respective Capesize vessel. It bears interest at a rate of LIBOR plus 175 bps. As of September 30, 2010, $61.7 million was drawn under this facility. The loan facility requires compliance with certain covenants contained in the senior notes. After the delivery of the vessels the loan also requires compliance with certain financial covenants.

     DVB Facility: On August 4, 2005, Kleimar entered into a $21.0 million loan facility with DVB Bank for the purchase of a vessel. The loan was assumed upon acquisition of Kleimar and is repayable in 20 quarterly installments of $0.3 million each with a final balloon payment of $15.4 million in August 2010. The loan is secured by a mortgage on a vessel together with assignment of earnings and insurances. As of September 30, 2010, the outstanding amount under this facility had been fully repaid.

Navios Acquisition loans:

     Ship Mortgage Notes: In October 2010, Navios Acquisition issued $400.0 million first priority ship mortgage notes (the “Ship Mortgage Notes”) due on November 1, 2017 at an 8.625% fixed rate. The Ship Mortgage Notes are senior obligations of Navios Acquisition guaranteed by each of Navios Acquisition’s direct and indirect subsidiaries and are secured by first priority ship mortgages on six VLCC vessels owned by certain subsidiary guarantors and certain other associated property and contract rights. The guarantees of Navios Acquisition’s subsidiaries that own mortgaged vessels are senior secured guarantees and the guarantees of Navios Acquisition’s subsidiaries that do not own mortgaged vessels are senior unsecured guarantees. Navios Acquisition may redeem the Ship Mortgage Notes in whole or in part, as its option, at any time (1) before November 1, 2013 at a redemption price equal to 100% of the principal amount plus a make whole price which is based on a formula calculated using a discount rate of treasury bonds plus 50 bps (2) on or after November 1, 2013, at a fixed price of 104.313%, which price declines ratably until it reaches par. In addition, any time before November 1, 2013, Navios Acquisition may redeem up to 35% of the aggregate principal amount of the Ship Mortgage Notes with the net proceeds of an equity offering at 108.625% of the principal amount of the notes, plus accrued and unpaid interest, if any, so long as at least 65% of the originally issued aggregate principal amount of the Ship Mortgage Notes remains outstanding after such redemption. Furthermore, upon occurrence of certain change of control events, the holders of the Ship Mortgage Notes may require Navios Acquisition to repurchase some or all of the Ship Mortgage Notes at 101% of their face amount, plus accrued and unpaid interest to the repurchase date. Under a registration rights agreement, Navios Acquisition and the guarantors have agreed to file a registration statement no later than five business days following the first year anniversary of the issuance of the Ship Mortgage Notes enabling the holders of the Ship Mortgage Notes to exchange the privately placed Ship Mortgage Notes with publicly registered notes with identical terms. The Ship Mortgage Notes contain covenants which, among other things, limit the incurrence of additional indebtedness, issuance of certain preferred stock, the payment of dividends, redemption or repurchase of capital stock or making restricted payments and investments, creation of certain liens, transfer or sale of assets, entering into certain transactions with affiliates, merging or consolidating or selling all or substantially all of Navios Acquisition’s properties and assets and creation or designation of restricted subsidiaries.

     Following the issuance of the Ship Mortgage Notes in October 2010 and net proceeds raised of $386.5 million, the security on six VLCC vessels previously secured by the loan facilities, were fully released in connection with the full prepayment of the facilities with approximately $343.8 million.

     Deutsche Schiffsbank AG, Alpha Bank A.E., and Credit Agricole Corporate and Investment Bank: As a result of the asset acquisition that qualified as an initial business combination, Navios Acquisition assumed a loan agreement dated April 7, 2010, with Deutsche Schiffsbank AG, Alpha Bank A.E. and Credit

Agricole Corporate and Investment Bank of up to $150.0 million (divided in six equal tranches of $25.0 million each) to partially finance the construction of two chemical tankers and four product tankers. Each tranche of the facility is repayable in 12 semi-annual installments of $0.8 million each with a final balloon payment of $16.8 miilion million to be repaid on the last repayment date. The repayment of each tranche starts six months after the delivery date of the respective vessel which that tranche finances. It bears interest at a rate of LIBOR plus 250 bps. As of September 30, 2010, $100.3 million was drawn under this facility. The loan also requires compliance with certain financial covenants.

     Fortis Bank and DVB Bank S.E.: As a result of the initial business combination, Navios Acquisition assumed a loan agreement dated April 8, 2010, of up to $75.0 million (divided in three equal tranches of $25.0 million each) for the purpose of part-financing the purchase price of three product tankers. Each of the tranche is repayable in 12 semi-annual installments of $0.8 million each with a final balloon payment of $16.8 million to be repaid on the last repayment date. The repayment date of each tranche starts six months after the delivery date of the respective vessel which that tranche finances. It bears interest at a rate of LIBOR plus 250 bps. As of September 30, 2010, $36.2 million was drawn under this facility. The loan also requires compliance with certain financial covenants.

     DVB Facility: On May 28, 2010, Navios Acquisition entered into a loan agreement with DVB Bank S.E. and Fortis Bank (Nederland) N.V. of up to $52.0 million (divided into two tranches of $26,000 each) to partially finance the acquisition costs of two product tanker vessels. Each tranche of the facility is repayable in 24 quarterly installments of $0.5 million each with a final balloon payment of $15.2 million to be repaid on the last repayment date. The repayment of each tranche starts three months after the delivery date of the respective vessel. It bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the outstanding amount under this facility was $51.1 million. The loan also requires compliance with certain financial covenants.

     Marfin Egnatia Bank. In September 2010, Navios Acquisition (through four subsidiaries which we expect will guarantee the notes offered hereby) entered into an $80.0 million revolving credit facility with Marfin Egnatia Bank to partially finance the acquisition and construction of vessels. The loans are secured by assignments of construction contracts and guarantees and ship mortgages on certain of the product and chemical vessels and the Shinyo Kieran, as well as security interests in related assets. The loan matures on September 7, 2012 (with available one-year extensions) and bears interest at a rate of LIBOR plus 275 bps. As of September 30, 2010, the outstanding amount under this facility was $80.0 million.

The VLCC Acquisition Credit Facilities

     On September 10, 2010, Navios Acquisition consummated the VLCC Acquisition. In connection with the acquisition of the VLCC vessels, Navios Acquisition entered into, assumed and supplemented the VLCC Acquisition credit facilities described below. The VLCC Acquisition credit facilities were fully repaid and terminated with the proceeds of the Ship Mortgage Notes on October 21, 2010.

     On December 12, 2006, a loan of $82.9 million was obtained from HSH Nordbank AG. The loan is secured by the Shinyo Navigator together with security interests in related assets. The balance of the loan assumed at closing was $56.1 million and is repayable in one installment of $2.2 million, one installment of $1.9 million, 12 installments of $2.0 million, eight installments of $1.5 million and four installments of 2.0 million after the prepayment of $8.0 million on September 13, 2010. Payments are to be made quarterly until the 10th anniversary of the date three months from the drawdown date. The facility was amended on September 9, 2010, in connection with the closing of the VLCC Acquisition, and is guaranteed by Navios Acquisition. The amended terms include (a) a new margin of 2.75%, (b) a financial covenant package similar to Navios Acquisition’s other facility agreements, (c) the prepayment of $8.0 million held in a cash collateral account and (d) a minimum value clause at 115% starting on June 30, 2011 and 120% starting on December 31, 2011. A 1% fee on the outstanding balance of the facility as of September 10, 2010 was paid at closing. As of September 30, 2010, the outstanding amount under this facility was $46.0 million and was repaid through the issuance of the Ship Mortgage Notes.

     On September 5, 2007, a syndicated loan of $65.0 million was obtained from DVB Group MerchantBank (Asia) Ltd, BNP Paribas, Credit Suisse and Deutsche Schiffsbank AG. The loan is secured by the C. Dream together with security interests in related assets. The balance of the loan assumed at closing was $54.7 million paid and is repayable in one installment of $0.90 million, four installments of $0.95, four installments of $1.0 million, four installments of $1.08 million, four installments of $1.15 million four installments of $1.2 million, seven installments of $1.25 million and a balloon payment of $23.55 million payable together with the last installment. Payments are to be made quarterly until the 10th anniversary of the date three months from the drawdown date. The facility was amended on September 9, 2010, in connection with the closing of the VLCC Acquisition, and is guaranteed by Navios Acquisition. The amended terms include (a) a new margin of 2.75%, (b) a financial covenant package similar to Navios Acquisition’s other facility agreements and (c) a minimum value clause at 115% until December 31, 2011 and thereafter at 130%. A 1% fee on the outstanding balance of the facility as of September 10, 2010 was paid at closing. As of September 30, 2010, the outstanding amount under this facility was $54.7 million and was repaid through the issuance of the Ship Mortgage Notes.

     On January 4, 2007, a syndicated loan of $86.8 million was obtained from DVB Group MerchantBank (Asia) Ltd, Credit Suisse and Deutsche Schiffsbank AG. The loan was secured by the Shinyo Ocean together with security interests in related assets. The balance of the loan assumed on September 10, 2010 was $58.9 million and was repayable in three installments of $1.6 million, eight installments of $1.7 million, four installments of $1.8 million, four installments of $2.0 million, four installments of $2.1 million, three installments of $2.2 million and a balloon payment of $10.4 million payable together with the last installment. Payments were to be made quarterly until the 10th anniversary of the date three months from the drawdown date. The facility was amended on September 9, 2010, in connection with the

closing of the VLCC Acquisition, and was guaranteed by Navios Acquisition. The amended terms included (a) a new margin of 2.75%, (b) a financial covenant package similar to Navios Acquisition’s other facility agreements and (c) a minimum value clause at 115% until December 31, 2011 and thereafter at 130%. A 1% fee on the outstanding balance of the facility as of September 10, 2010 was paid at closing. The outstanding amount under this facility,as of September 30, 2010, was $58.9 million and following the issuance of the Ship Mortgage Notes in October 2010, Navios Acquisition fully repaid this facility.

     On January 4, 2007, a syndicated loan of $86.8 million was obtained from DVB Group Merchant Bank (Asia) Ltd, Credit Suisse and Deutsche Schiffsbank AG. The loan was secured by the Shinyo Kannika together with security interests in related assets. The balance of the loan assumed on September 10, 2010 was $58.8 million and was payable in two installments of $1.6 million, four installments of $1.6 million, four installments of $1.7 million, four installments of $1.9 million, four installments of $2.0 million, four installments of $2.1 million, three installments of $2.2 million and a balloon payment of $12.1 million together with the last installment. Forty quarterly payments were to be made commencing on February 15, 2007. The facility was amended on September 9, 2010, in connection with the closing of the VLCC Acquisition, and was guaranteed by Navios Acquisition. The amended terms included (a) a new margin of 2.75%, (b) financial covenant package similar to Navios Acquisition’s other facility agreements and (c) a minimum value clause at 115% until December 31, 2011 and thereafter at 130%. A 1% fee on the outstanding balance of the facility as of September 10, 2010, was paid at closing. As of September 30, 2010, the outstanding amount under this facility was $58.8 million. Following the issuance of the Ship Mortgage Notes in October 2010, Navios Acquisition fully repaid this facility.

     On May 16, 2007, a syndicated loan in the amount of $62.0 million was obtained from DVB Group Merchant Bank (Asia) Ltd, Credit Suisse and Deutsche Schiffsbank AG. The loan was secured by the Shinyo Splendor together with security interests in related assets. The balance of the credit facility on September 10, 2010 was $38.8 million and was repayable in three installments of $1.9 million, four installments of $2.1 million, four installments of $2.2 million and three installments of $2.4 million together with a balloon payment of $8.9 million. Payments were to be made for 28 quarters from the date three months from the drawdown date. The facility was amended on September 9, 2010, in connection with the closing of the VLCC Acqusiition and was guaranteed by Navios Acquisition. The amended terms included (a) a new margin of 2.75% applicable for tranche A and margin of 4% applicable for tranche B, (b) a financial covenant package similar to Navios Acquisition’s other facility agreements and (c) minimum value clause at 115% until December 31, 2011 on a charter attached basis and thereafter at 130% on a charter free basis. A 1% fee on the outstanding balance of the facility as of September 10, 2010, was paid at closing. As of September 30, 2010, the outstanding amount under this facility was $38.8 million and following the issuance of the Ship Mortgage Notes in October 2010, Navios Acquisition fully repaid this facility.

     On March 26, 2010, a loan facility of $90.0 million was obtained from China Merchant Bank Co., Ltd. to finance the construction of Shinyo Saowalak. The balance of the loan facility as September 10, 2010 was $90.0 million. The loan was secured by the Shinyo Saowalak together with security interests in related assets and was repayable by 12 installments of $1.8 million, 12 installments of $2.0 million and 16 installments of $2.8 million. The first repayment is to be made on September 20, 2010 with the last installment paid on the date falling 117 months after September 21, 2010. The facility was amended on September 9, 2010, in connection with the closing of the VLCC Acquisition, and was guaranteed by Navios Acquisition. The amended terms included a financial covenant package similar to Navios Acquisition’s other facility agreements. The outstanding amount under this facility, as of September 30, 2010, was $88.3 million and following the issuance of the Ship Mortgage Notes in October 2010, Navios Acquisition fully repaid this facility.

Navios Logistics loans:

     On March 31, 2008, Nauticler S.A. entered into a $70.0 million loan facility for the purpose of providing Nauticler S.A. with investment capital to be used in connection with one or more investment projects. The loan was initially repayable in one installment by March 2011 and was bearing interest at LIBOR plus a margin of 175 bps. In March 2009, Navios Logistics transferred its loan facility of $70.0 million to Marfin Popular Bank Public Co. Ltd. The loan provided for an additional one year extension and an increase in margin to 275 bps. On March 23, 2010, the loan was extended for one additional year, providing an increase in margin to 300 bps. The loan is repayable in one payment in March 2012. As of September 30, 2010, the amount outstanding under this facility was $70.0 million.

     In connection with the acquisition of Horamar, Navios Logistics assumed a $9.5 million loan facility that was entered into by HS Shipping Ltd. Inc. in 2006, in order to finance the building of a 8,974 dwt double-hulled tanker (the Malva H). Since the vessel’s delivery, the interest rate has been LIBOR plus 150 bps. The loan is repaid in installments that shall not be less than 90% of the amount of the last hire payment due to be paid to HS Shipping Ltd. Inc. The repayment date shall not extend beyond December 31, 2011. The loan can be pre-paid before such date, with two days written notice. Borrowings under the loan are subject to certain financial covenants and restrictions on dividend payments and other related items. As of September 30, 2010, the amount outstanding under this facility was $6.8 million.

     In connection with the acquisition of Horamar, Navios Logistics assumed a $2.3 million loan facility that was entered into by Thalassa Energy S.A. in October 2007, in order to finance the purchase of two self-propelled barges (Formosa and San Lorenzo). The loan bears interest at LIBOR plus 150 bps. The loan will be repaid by five equal installments of $0.5 million, two of which were made in November 2008 and June 2009, a third was made in January 2010 a fourth was made in August 2010 and the remaining will be repaid in March 2011. Borrowings under the loan are subject to certain financial covenants and restrictions on dividend payments and other related items. The loan is secured by a first priority mortgage over the two self-propelled barges (Formosa and San Lorenzo). As of September 30, 2010, the amount outstanding under this facility was $0.5 million.

     On September 4, 2009, HS Navigation Inc. entered into a loan facility for an amount of up to $18.7 million that bears interest at LIBOR

plus 225 bps in order to finance the acquisition cost of the Estefania H. The loan will be repaid by installments that shall not be less than 90% of the amount of the last hire payment due to be paid to HS Navigation Inc. The repayment date shall not extend beyond May 15, 2016. As of September 30, 2010, the amount outstanding under this facility was $15.2 million. Borrowings under the loan are subject to certain financial covenants and restrictions on dividend payments and other related items.

     On December 15, 2009, HS Tankers Inc. entered into a loan facility in order to finance the acquisition cost of the Makenita H for an amount of $24.0 million which bears interest at LIBOR plus 225 bps. The loan will be repaid by installments. The amount of each installment (a) shall not be less than 90% of the amount of the last hire payment due to be paid to HS Tankers Inc. prior to the repayment date and (b) $0.3 million, inclusive of any interest accrued in relation to the loan at that time. The repayment date shall not extend beyond March 24, 2016. As of September 30, 2010, the amount outstanding under this facility was $21.5 million. Borrowings under the loan are subject to certain financial covenants and restrictions on dividend payments and other related items.

     In connection with the acquisition of Hidronave S.A. in October 29, 2009, Navios Logistics assumed a $0.8 million loan facility that was entered into by Hidronave S.A. in 2001, in order to finance the building of a pushboat (the Nazira). As of September 30, 2010, the outstanding loan balance was $0.8 million. The loan facility bears interest at a fixed rate of 600 bps. The loan is repaid by installments of $6,000 each and the final repayment date can not extend beyond August 10, 2021. Borrowings under the loan are subject to certain financial covenants and restrictions on dividend payments and other related items.

Navios Logistics capital lease obligations:

     In June 2010, Navios Logistics agreed to enter into a long-term bareboat agreement for two new product tankers the Jiujiang and Stavroula, with a capacity of 16,871 dwt each. The Jiujiang and the Stavroula were delivered in June and July 2010, respectively. Navios Logistics has the obligation to purchase these vessels immediately upon the expiration of their charter period. Both tankers have been recognized as capital leases with a value of $17.0 million for Jiujiang and $17.1 million for Stavroula. As of September 30, 2010, the amount outstanding under this lease obligation was $32.6 million.

		Navios Holdings
		(including Navios Logistics)				Navios Acquisition				Total
		September 30,				September 30,				September 30,
		2010				2010				2010
		(Amounts in				(Amounts in				(Amounts in
Long-Term Debt Obligations:		millions of				millions of				millions of
Year		U.S. dollars)				U.S. dollars)				U.S. dollars)
September 30, 2011			160.0				42.8				202.8
September 30, 2012			178.6				124.5				303.1
September 30, 2013			53.1				47.3				100.4
September 30, 2014			58.5				52.8				111.3
September 30, 2015			425.9				39.9				465.8
September 30, 2016 and thereafter			723.6				305.7				1,029.3
Total		$	1,599.7			$	613.0			$	2,212.7

Contractual Obligations:

		September 30, 2010
		Payment due by period
		(Amounts in millions of U.S. dollars)
						Less than												More than
Contractual Obligations		Total				1 year				1-3 years				3-5 years				5 years
Long-term debt (1)(2)(6)		$	1,599.7			$	160.0			$	231.7			$	484.4			$	723.6
Long-term debt Navios Acquisition(7)(8)			613.0				42.8				171.8				92.7				305.7
Operating Lease Obligations (Time Charters)			995.0				87.5				198.9				201.2				507.4
Operating lease obligations push boats and barges			15.0				6.3				8.7				—				—
Capital lease obligations			32.6				1.3				31.3				—				—
Vessel deposits(3)			122.6				122.6				—				—				—
Tanker deposits (4)			227.9				54.6				173.3				—				—
Rent Obligations(5)		$	14.3			$	1.7			$	3.3			$	3.4			$	5.9

Working Capital Position

     On September 30, 2010, Navios Holdings’ current assets totaled $429.4 million, while current liabilities totaled $361.0 million, resulting in a positive working capital position of $68.4 million. Navios Holdings’ cash forecast indicates that it will generate sufficient cash during the remainder of 2010 and 2011 to make the required principal and interest payments on its indebtedness, provide for the normal working capital requirements of the business and remain in a positive cash position during 2010 and 2011.

     While projections indicate that existing cash balances and operating cash flows will be sufficient to service the existing indebtedness, Navios Holdings continues to review its cash flows with a view toward increasing working capital.

Capital Expenditures

     The Company took delivery during 2009 and the first nine months of 2010 of 11 Capesize vessels (the Navios Bonavis, the Navios Happiness, the Navios Pollux, the Navios Aurora II, the Navios Lumen, the Navios Phoenix, the Navios Stellar, the Navios Celestial, the Navios Antares, the Navios Vector and the Navios Melodia). Navios Holdings has another six Capesize vessels on order, which are scheduled for delivery until March 2011. Out of six Capesize vessels, the Navios Fulvia and the Navios Buena Ventura were delivered on October 1, 2010 and on October 29, 2010, respectively. The remaining capital obligations at September 30, 2010 amounted to approximately $122.6 million.

     On May 25, 2010, after its special meeting of stockholders, Navios Acquisition announced the approval of (a) the acquisition of 13 vessels (11 product tankers and two chemical tankers) for an aggregate purchase price of $457.7 million, pursuant to the terms and conditions of the Acquisition Agreement by and between Navios Acquisition and Navios Holdings, and (b) certain amendments to Navios Acquisition’s amended and restated articles of incorporation. The delivery of the acquired vessels is expected at various times through the end of 2012.

     On June 29, 2010 and July 2, 2010, Navios Acquisition took delivery of the Colin Jacob and Ariadne Jacob, respectively, two LR1 product tankers, as part of the acquisition of the 13 vessels, for $43.7 million and $43.5 million, respectively. On September 10, 2010, Navios Acquisition consummated the VLCC Acquisition for an aggregate purchase price of $587.0 million. The seven VLCC tankers have an average age of 8.8 years and average remaining charter-out term of 8.7 years with an aggregate charter rate of $40,400 net per day. Five of seven charters also have a profit sharing agreement.

     Total consideration of the remaining vessels to be delivered as of September 30, 2010, was approximately $227.9 million. As of September 30, 2010, Navios Acquisition had paid $264.2 million in installments, which has been included in the financial statements in “Deposits for vessel acquisitions.”

Dividend Policy

     Currently, Navios Holdings intends to retain most of its available earnings generated by operations for the development and growth of

its business. In addition, the terms and provisions of the Company’s current secured credit facilities and the indenture governing its senior notes limit its ability to pay dividends in excess of certain amounts or if certain covenants are not met. However, subject to the terms of its credit facilities, the Board of Directors may from time to time consider the payment of dividends and on November 12, 2010, the Board of Directors declared a quarterly cash dividend with respect to the third quarter of 2010 of $0.06 per share of common stock payable on January 5, 2011 to stockholders on record as of December 16, 2010. The declaration and payment of any dividend remains subject to the discretion of the Board, and will depend on, among other things, Navios Holdings’ cash requirements as measured by market opportunities, debt obligations, restrictions by credit agreements and market conditions.

Concentration of Credit Risk

     Concentrations of credit risk with respect to accounts receivables are limited due to Navios Holdings’ large number of customers, who are internationally dispersed and have a variety of end markets in which they sell. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in Navios Holdings’ trade receivables. For the nine month period ended September 30, 2010, one customer accounted for 10.3% of the Company’s revenue and for the year ended December 31, 2009, one customer accounted for 13.2% of the Company’s revenue.

Off-Balance Sheet Arrangements

     Charter hire payments to third parties for chartered-in vessels are treated as operating leases for accounting purposes. Navios Holdings is also committed to making rental payments under operating leases for its office premises. With the exception of payments made during the nine months ended September 30, 2010, future minimum rental payments under Navios Holdings’ non-cancelable operating leases are analyzed in the contractual obligations above. As of September 30, 2010, Navios Holdings was contingently liable for letters of guarantee and letters of credit amounting to $0.8 million issued by various banks in favor of various organizations of which $0.8 million are collateralized by cash deposits which are included as a component of restricted cash. Navios Holdings issued no guarantees to third parties at September 30, 2010 and 2009.

     As of September 30, 2010, the Company’s subsidiaries in South America were contingently liable for various claims and penalties towards the local tax authorities amounting to $5.4 million. The respective provision for such contingencies is included in “Other long-term liabilities”. According to the acquisition agreement, if such cases materialize against the Company, the amounts involved will be reimbursed by the previous shareholders, and, as such, the Company has recognized a respective receivable (included in “Other long-term assets”) against such liability. The contingencies are expected to be resolved in the next five years. In the opinion of management, the ultimate disposition of these matters and will not adversely affect the Company’s financial position, results of operations or liquidity. In August 2009, Navios Logistics issued a performance guarantee of up to $4.0 million plus interest and costs in favor of a customer of its subsidiary, Petrolera San Antonio S.A., covering sales of gas oil contracted between the parties.

Related Party Transactions

     Office rent: On January 2, 2006, Navios Corporation and Navios ShipManagement Inc., two wholly owned subsidiaries of Navios Holdings, entered into two lease agreements with Goldland Ktimatiki-Ikodomiki-Touristiki and Xenodohiaki Anonimos Eteria, a Greek corporation which is partially owned by relatives of Angeliki Frangou, Navios Holdings’ Chairman and Chief Executive Officer. The lease agreements provide for the leasing of two facilities located in Piraeus, Greece, of approximately 2,034.3 square meters and houses the operations of most of the Company’s subsidiaries. The total annual lease payments are €0.5 million (approximately $0.6 million) and the lease agreements expire in 2017. These payments are subject to annual adjustments starting from the third year, which are based on the inflation rate prevailing in Greece as reported by the Greek State at the end of each year.

     On October 31, 2007, Navios ShipManagement Inc., a wholly owned subsidiary of Navios Holdings, entered into a lease agreement with Emerald Ktimatiki-Ikodomiki-Touristiki and Xenodohiaki Anonimos Eteria, a Greek corporation that is partially owned by relatives of Angeliki Frangou, Navios Holdings’ Chairman and Chief Executive Officer. The lease agreement provides for the leasing of one facility in Piraeus, Greece, of approximately 1,367.5 square meters and houses part of the operations of the Company. The total annual lease payments are €0.4 million (approximately $0.6 million) and the lease agreement expires in 2019. These payments are subject to annual adjustments starting from the third year, which are based on the inflation rate prevailing in Greece as reported by the Greek State at the end of each year.

     Purchase of services: The Company utilizes Acropolis Chartering and Shipping Inc. (“Acropolis”) as a broker. Commissions paid to Acropolis for each of each of the three month periods ended September 30, 2010 and 2009 were $0.04 million and $0.1 million, respectively, and for the nine months periods ended September 30, 2010 and 2009, were $0.1 million and $0.3 million, respectively. The Company owns fifty percent of the common stock of Acropolis. During the nine month period ended September 30, 2010 and 2009, the Company received dividends of $0.6 million and $0.9 million, respectively. Included in the trade accounts payable at September 30, 2010 and December 31, 2009 was an amount of $0.2 million and $0.1 million, respectively, which was due to Acropolis.

     Management fees: Pursuant to a management agreement dated November 16, 2007, Navios Holdings provides commercial and technical management services to Navios Partners’ vessels for a daily fee of $4,000 per owned Panamax vessel and $5,000 per owned Capesize vessel. This daily fee covers all of the vessels’ operating expenses, including the cost of drydock and special surveys. The daily rates are fixed for a period of two years whereas the initial term of the agreement is five years commencing from November 16, 2007. Total management fees for the three month periods ended September 30, 2010 and 2009 amounted to $5.2 million and $2.7 million, respectively, and for the nine month periods ended September 30, 2010 and 2009, $14.1 million and $7.9 million, respectively. In October 2009, the fixed

fee period was extended for two years and the daily fees were amended to $4,500 per owned Ultra Handymax vessel, $4,400 per owned Panamax vessel and $5,500 per owned Capesize vessel.

     Pursuant to a management agreement dated May 28, 2010, as amended on September 12, 2010, Navios Holdings provides for five years from the closing of Navios Acquisition’s initial vessel acquisition, commercial and technical management services to Navios Acquisition’s vessels for a daily fee of $6,000 per owned MR2 product tanker and chemical tanker vessel and $7,000 per owned LR1 product tanker vessel for the first two years with the fixed daily fees adjusted for the remainder of the term based on then-current market fees. This daily fee covers all of the vessels’ operating expenses, other than certain extraordinary fees and costs. During the remaining three years of the term of the Management Agreement, Navios Acquisition expects that it will reimburse Navios Holdings for all of the actual operating costs and expenses it incurs in connection with the management of its fleet. Actual operating costs and expenses will be determined in a manner consistent with how the initial $6,000 and $7,000 fixed fees were determined. Drydocking expenses will be fixed under this agreement for up to $300,000 per vessel. Total management fees for the three month periods ended September 30, 2010 and 2009 amounted to $2.5 million and $0, respectively, and for the nine month periods ended September 30, 2010 and 2009, $2.5 million and $0, respectively.

     General & administrative expenses: Pursuant to the administrative services agreement dated November 16, 2007, Navios Holdings provides administrative services to Navios Partners which include: bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical services, banking and financial services, advisory services, client and investor relations and other. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total general and administrative fees charged for the three month periods ended September 30, 2010 and 2009 amounted to $0.7 million and $0.3 million, respectively, and for the nine month periods ended September 30, 2010 and 2009, $2.0 million and $1.3 million, respectively.

     On May 28, 2010, Navios Acquisition entered into an administrative services agreement, expiring May 28, 2015, with Navios Holdings, pursuant to which Navios Holdings provides office space and certain administrative management services to Navios Acquisition which include: bookkeeping, audit and accounting services, legal and insurance services, administrative and clerical services, banking and financial services, advisory services, client and investor relations and other. Navios Holdings is reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total general and administrative fees charged for the three month periods ended September 30, 2010 and 2009 amounted to $0.1 million and $0, respectively, and for the nine month periods ended September 30, 2010 and 2009, $0.1 million and $0, respectively.

     Balance due from affiliate: Due from affiliate as of September 30, 2010 amounts to $2.9 million (2009: $5.2 million) which included the current amounts of $2.9 million due from Navios Partners (2009: $5.1 million). The balance in the prior year mainly consisted of management fees, administrative fees and other expenses.

     Omnibus agreements: Navios Holdings entered into an omnibus agreement with Navios Partners (the “Partners Omnibus Agreement”) in connection with the closing of Navios Partners’ IPO governing, among other things, when Navios Holdings and Navios Partners may compete against each other as well as rights of first offer on certain drybulk carriers. Pursuant to the Partners Omnibus Agreement, Navios Partners generally agreed not to acquire or own Panamax or Capesize drybulk carriers under time charters of three or more years without the consent of an independent committee of Navios Partners. In addition, Navios Holdings agreed to offer to Navios Partners the opportunity to purchase vessels from Navios Holdings when such vessels are fixed under time charters of three or more years. The Partners Omnibus Agreement was amended in June 2009 to release Navios Holdings for two years from restrictions on acquiring Capesize and Panamax vessels from third parties.

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

     Sale of Navios Apollon: On October 29, 2009, Navios Holdings sold the Navios Apollon to Navios Partners. The sale price of $32.0 million was received entirely in cash. The book value assigned to the vessel was $25.1 million, resulting in gain from her sale of $6.9 million, of which, $4.0 million had been recognized at the time of sale in the statements of income under “Gain on sale of assets” and the remaining $2.9 million representing profit of Navios Holdings’ 41.8% interest in Navios Partners has been deferred under “Long-term liabilities and deferred income” and is being amortized over the remaining life of the vessel or until it is sold. Following Navios Partners’ public equity offering of 4,000,000 common units in November 2009, 3,500,000 common units in February 2010, and 4,500,000 common units in May 2010, and the completion of the exercise of the overallotment option previously granted to the underwriters, Navios Holdings’ interest in Navios Partners decreased to 37%, then to 33.2% and finally to 31.3%, recognizing an additional $0.3 million, $0.2 million and $0.1 million, respectively, of the deferred gain which has been recognized in the statements of income under “Equity in net earnings of affiliated companies”. As of September 30, 2010, the unamortized portion of the gain was $1.0 million.

     Sale of rights of Navios Sagittarius: On June 10, 2009, Navios Holdings sold to Navios Partners the rights to the Navios Sagittarius, a

2006 Japanese-built Panamax vessel with a capacity of 75,756 dwt, for a cash consideration of $34.6 million. The book value assigned to the vessel was $4.3 million, resulting in a gain from her sale of $30.3 million, of which $16.8 million had been recognized at the time of sale in the statements of income under “Gain on sale of assets” and the remaining $13.5 million representing profit of Navios Holdings’ 44.6% interest in Navios Partners has been deferred under “Long-term liabilities and deferred income” and is being recognized to income based on the remaining term of the vessel’s contract rights or until the vessel’s rights are sold. Following Navios Partners’ public equity offering of 2,800,000 common units in September 2009, Navios Holdings’ interest in Navios Partners decreased to 42.3% and to 41.8% in October 2009 after the exercise of the overallotment option and $0.7 million of the deferred gain has been recognized in the statements of income of 2009 under “Equity in net earnings of affiliated companies”. In November 2009, following Navios Partners’ public equity offering of 4,000,000 common units, Navios Holdings’ interest in Navios Partners decreased to 37.0% and $1.5 million of the deferred gain has been also recognized in the statements of income of 2009 under “Equity in net earnings of affiliated companies”. Following Navios Partners’ public equity offering of 3,500,000 common units in February 2010 and 4,500,000 common units in May 2010, and the completion of the exercise of the overallotment option previously granted to the underwriters, Navios Holdings’ interest in Navios Partners decreased to 33.2%, and then to 31.3%, recognizing an additional $1.1 million and $0.5 million, respectively, of the deferred gain which has been recognized in the statements of income under “Equity in net earnings of affiliated companies”. As of September 30, 2010, the unamortized portion of the gain was $8.1 million.

     Navios Bonavis: On June 9, 2009, Navios Holdings relieved Navios Partners from its obligation to purchase the Capesize vessel Navios Bonavis for $130.0 million and with the delivery of the Navios Bonavis to Navios Holdings, Navios Partners was granted a 12-month option to purchase the vessel for $125.0 million. In return, Navios Partners issued to Navios Holdings 1,000,000 subordinated Series A units. Navios Holdings recognized in its results a non-cash compensation income amounting to $6.1 million. The 1,000,000 subordinated Series A units are included in “Investments in affiliates”.

     Sale of Navios Hope: On July 1, 2008, the Navios Hope was sold to Navios Partners in accordance with the terms of the Partners Omnibus Agreement. The sale price consisted of $35.0 million in cash and $44.9 million in common units (3,131,415 common units) of Navios Partners. The investment in the 3,131,415 common units is classified as “Investments in available for sale securities”. The gain from the sale of the Navios Hope was $51.5 million of which $24.9 million was recognized at the time of sale in the statements of income under “Gain on sale of assets”. The remaining $26.6 million which represents profit to the extent of Navios Holdings’ ownership interest in Navios Partners had been deferred under “Long-term liabilities and deferred income” and amortized over the remaining life of the vessel or until it is sold. Following Navios Partners’ public equity offerings of (a) 3,500,000 common units in May 2009; (b) 2,800,000 common units in September 2009 and the completion of the exercise of the overallotment option previously granted to the underwriters in connection with this offering in October 2009; and (c) 4,000,000 common units in November 2009, Navios Holdings’ interest in Navios Partners decreased to 44.6% in May 2009, to 42.3% in September 2009, to 41.8% in October 2009 after the exercise of the overallotment option and further to 37.0% in November 2009. As a result of this decrease, $3.5 million, $1.1 million and $2.6 million, respectively, of the deferred gain has been recognized in the statements of income of 2009 under “Equity in net earnings of affiliated companies”. Following Navios Partners’ public equity offering of 3,500,000 common units in February 2010 and 4,500,000 common units in May 2010, and the completion of the exercise of the overallotment option previously granted to the underwriters, Navios Holdings’ interest in Navios Partners decreased to 33.2%, and then to 31.3%, recognizing an additional $1.8 million and $0.9 million, respectively, of the deferred gain in the statements of income under “Equity in net earnings of affiliated companies”. As of September 30, 2010, the unamortized portion of the gain was $13.6 million.

     Sale of Navios Hyperion: On January 8, 2010, Navios Holdings sold the Navios Hyperion, a 2004-built Panamax vessel to Navios Partners for $63.0 million in cash. The book value assigned to the vessel was $25.2 million, resulting in gain from her sale of $37.8 million, of which, $23.8 million had been recognized at the time of sale in the statements of income under “Gain on sale of assets” and the remaining $14.0 million representing profit of Navios Holdings’ 37.0% interest in Navios Partners has been deferred under “Long-term liabilities and deferred income” and is being amortized over its remaining useful life or until it is sold. Following Navios Partners’ public equity offering of 3,500,000 common units in February 2010 and 4,500,000 common units in May 2010, and the completion of the exercise of the overallotment option previously granted to the underwriters, Navios Holdings’ interest in Navios Partners decreased to 33.2%, and then to 31.3%, recognizing an additional $1.4 million and $0.7 million, respectively, of the deferred gain has been recognized in the statements of income under “Equity in net earnings of affiliated companies”. As of September 30, 2010, the unamortized portion of the gain was $9.8 million.

     Sale of Navios Aurora II: On March 18, 2010, Navios Holdings sold the Navios Aurora II, a 2009 South Korean-built Capesize vessel with a capacity of 169,031 dwt to Navios Partners for $110.0 million. Out of $110.0 million purchase price, $90.0 million is paid in cash and the remaining amount was paid through the receipt of 1,174,219 common units of Navios Partners. The book value assigned to the vessel was $109,508, resulting in gain from her sale of $0.8 million, of which $0.5 million had been recognized at the time of sale in the statements of income under “Gain on sale of assets” and the remaining $0.3 million representing profit of Navios Holdings’ 33.2% interest in Navios Partners has been deferred under “Long-term liabilities and deferred income” and is being amortized over its remaining useful life or until it is sold. As of September 30, 2010, the deferred gain had been fully amortized.

     Sale of Navios Pollux: On May 21, 2010, Navios Holdings sold the Navios Pollux, a 2009 South Korean-built Capesize vessel with a capacity of 180,727 dwt to Navios Partners for $110.0 million. The book value assigned to the vessel was $107.5 million, resulting in gain from her sale of $2.5 million, of which $1.8 million had been recognized at the time of sale in the statements of income under “Gain on sale of assets” and the remaining $0.8 million representing profit of Navios Holdings’ 31.3% interest in Navios Partners has been deferred under “Long-term liabilities and deferred income” and is being amortized over its remaining useful life or until it is sold. As of September 30, 2010, the unamortized portion of the gain was below $0.1 million.

     Purchase of shares in Navios Acquisition: Navios Holdings has purchased 6,337,551 shares of Navios Acquisition common stock for $63.2 million in open market purchases. As of May 28, 2010, following these purchases, Navios Holdings owned 12,372,551 shares, or 57.3%, of the outstanding common stock of Navios Acquisition. At that date, Navios Holdings acquired control over Navios Acquisition, which was consolidated in the financial statements of Navios Holdings from that date. As a result of gaining control, Navios Holdings recognized the effect of $17.7 million, which represents the fair value of the 12,372,551 shares ownership in Navios Acquisition in the statements of income under “Other income/expense, net”.

     Navios Acquisition Warrant Program: On September 2, 2010, Navios Acquisition announced the successful completion of its Warrant Program. Under the Warrant Program, holders of Public Warrants had the opportunity to exercise the Public Warrants on enhanced terms through August 27, 2010. Navios Holdings exercised in cash 13,635,000 Private Warrants and paid $77.0 million. Navios Holdings currently holds no other Navios Acquisition warrants.

     Acquisition of Eleven Product Tanker and Two Chemical Tanker Vessels: On April 8, 2010, pursuant to the terms and conditions of the Acquisition Agreement between Navios Acquisition and Navios Holdings, Navios Acquisition agreed to acquire 13 vessels (11 product tankers and two chemical tankers) plus options to purchase two additional product tankers, for an aggregate purchase price of $457.7 million (see “Overview” section).

     Quantitative and Qualitative Disclosures about Market Risks

     Navios Holdings is exposed to certain risks related to interest rate, foreign currency and charter rate risks. To manage these risks, Navios Holdings uses interest rate swaps (for interest rate risk) and FFAs (for charter rate risk).

Interest Rate Risk:

     Debt Instruments — On September 30, 2010 and December 31, 2009, Navios Holdings had a total of $2,212.7 million and $1,630.9 million, respectively, in long-term indebtedness. The debt is dollar denominated and bears interest at a floating rate, except for the senior notes, the ship mortgage notes, convertible debt, unsecured bond and certain Navios Logistics’ loans discussed in “Liquidity and Capital Resources” that bears interest at fixed rate.

     For a detailed discussion on Navios Holdings’ debt instruments refer to section “Long-term Debt Obligations and Credit Arrangements” included elsewhere in this document.

     The interest on the loan facilities is at a floating rate and, therefore changes in interest rates would have effect on their value. The interest rate on the senior notes and the ship mortgage notes is fixed and, therefore, changes in interest rates do not affect their carrying value which was $736.0 million as of September 30, 2010. Amounts drawn under the facilities and the ship mortgage notes are secured by the assets of Navios Holdings and its subsidiaries. A change in the LIBOR rate of 100 basis points would change interest expense (excluding Navios Acquisition) for 2010 by $3.9 million.

     Interest Rate Swaps — Navios Holdings has entered into interest rate swap contracts to hedge its exposure to variability in its floating rate long-term debt. Under the terms of the interest rate swaps Navios Holdings and the banks agreed to exchange, at specified intervals, the difference between a paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amounts and maturities. The interest rate swaps allow Navios Holdings to convert long-term borrowings issued at floating rates into equivalent fixed rates.

     At September 30, 2010, Navios Holdings had one swap outstanding with the Royal Bank of Scotland with a total notional principal amount of $10.9 million. The swap was entered into 2001 and matured in October 2010. Navios Holdings estimates that it would have to pay $0.2 million to terminate this agreement as of September 30, 2010. As a result of the swap, Navios Holdings’ net exposure is based on total floating rate debt less the notional principal of floating to fixed interest rate swaps. A 100 basis points change in interest rates would have increased or decreased interest expense by $0 as of September 30, 2010, so long as the relevant LIBOR did not exceed the caps described below. The swap is set by reference to the difference between the three month LIBOR (which is the base rate under Navios Holdings’ long-term borrowings) and the yield on the U.S. ten year treasury bond. The swap effectively fixes interest rates at 5.55%. However, the foregoing swap is subject to a cap of 7.5%; to the extent the relevant LIBOR exceeds the cap, Navios Holdings would remain exposed.

Foreign Currency Risk

     Foreign Currency: In general, the shipping industry is a U.S.dollar dominated industry. Revenue is set mainly in U.S. dollars, and approximately 77.8% of Navios Holdings’ expenses are also incurred in U.S. dollars. Certain of our expenses are paid in foreign currencies and a one percent change in the exchange rates of the various currencies at September 30, 2010 would increase or decrease net income by approximately $0.7 million.

FFAs Derivative Risk:

     Forward Freight Agreements (FFAs) — Navios Holdings enters into FFAs as economic hedges relating to identifiable ship and/or cargo positions and as economic hedges of transactions that Navios Holdings expects to carry out in the normal course of its shipping business. By using FFAs, Navios Holdings manages the financial risk associated with fluctuating market conditions. The effectiveness of a hedging relationship is assessed at its inception and then throughout the period of its designation as a hedge. If an FFA qualifies for hedge accounting, any gain or loss on the FFA, as accumulated in “Accumulated Other Comprehensive Income/(Loss),” is first recognized when measuring the profit or loss of related transaction. For FFAs that qualify for hedge accounting, the changes in fair values of the effective portion representing unrealized gains or losses are recorded in “Accumulated Other Comprehensive Income/(Loss)” in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting are recorded in the statement of income under “Gain/(Loss) on Forward Freight Agreements.” The

gains/(losses) included in “Accumulated Other Comprehensive Income/(Loss)” will be reclassified to earnings under “Revenue” in the statement of income in the same period or periods during which the hedged forecasted transaction affects earnings The reclassification to earnings commenced in the third quarter of 2006 and extended until December 31, 2008, depending on the period or periods during which the hedged forecasted transactions affected earnings. For the three and nine month periods ended September 30, 2010 and for the year ended December 31, 2009, no losses/gain for both periods were included in “Accumulated Other Comprehensive Income/ (Loss)”, and none were reclassified to earnings.

     At September 30, 2010 and December 31, 2009, none of the “mark to market” positions of the open drybulk FFA contract, qualified for hedge accounting treatment. Drybulk FFAs traded by the Company that do not qualify for hedge accounting are shown at fair value through the statement of operations.

     Navios Holdings is exposed to market risk in relation to its FFAs and could suffer substantial losses from these activities in the event expectations are incorrect. Navios Holdings trades FFAs with an objective of both economically hedging the risk on the fleet, specific vessels or freight commitments and taking advantage of short term fluctuations in market prices. As there were only two positions deemed to be open as of September 30, 2010, a ten percent change in underlying freight market indices would only have an effect below $0.1 million on net income per year.

Critical Accounting Policies

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

     Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. Navios Holdings has described below what it believes are its most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of all of Navios Holdings’ significant accounting policies, see Note 2 to the Consolidated Financial Statements, included in Navios Holdings’ 2009 annual report on Form 20-F file with the Securities and Exchange Commission.

     Use of estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, management evaluates the estimates and judgments, including those related to uncompleted voyages, future drydock dates, the carrying value of investments in affiliates, the selection of useful lives for tangible assets, expected future cash flows from long-lived assets to support impairment tests, provisions necessary for accounts receivables, provisions for legal disputes, pension benefits, and contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions and/or conditions.

     Accounting for derivative financial instruments and hedge activities: The Company enters into drybulk shipping FFAs as economic hedges relating to identifiable ship and or cargo positions and as economic hedges of transactions the Company expects to carry out in the normal course of its shipping business. By utilizing certain derivative instruments, including drybulk shipping FFAs, the Company manages the financial risk associated with fluctuating market conditions. In entering into these contracts, the Company has assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts.

     The Company also trades drybulk shipping FFAs which are cleared through NOS ASA, a Norwegian clearing house and LCH the London clearing house. NOS ASA and LCH call for both base and margin collaterals, which are funded by Navios Holdings, and which in turn substantially eliminate counterparty risk. Certain portions of these collateral funds may be restricted at any given time as determined by NOS ASA and LCH.

     At the end of each calendar quarter, the fair value of drybulk shipping FFAs traded over-the-counter are determined from an index published in London, United Kingdom and the fair value of those FFAs traded with NOS ASA and LCH are determined from the NOS ASA and LCH valuations accordingly.

     Pursuant to the accounting for derivative financial instruments, the Company records all of its derivative financial instruments and hedges as economic hedges except for those qualifying for hedge accounting. Gains or losses of instruments qualifying for hedge accounting as cash flow hedges are reflected under “Accumulated Other Comprehensive Income/(Loss)” in stockholders’ equity, while those instruments that do not meet the criteria for hedge accounting are reflected in the statement of operations. For FFAs that qualify for hedge accounting the changes in fair values of the effective portion representing unrealized gain or losses are recorded under “Accumulated Other Comprehensive Income/(Loss)” in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting, are recorded in the statement of operations under “Gain/(Loss) on Derivatives”. The gains/(losses) included in “Accumulated Other Comprehensive Income/(Loss)” are being reclassified to earnings under “Revenue” in the statement of operations in the same period or periods during which the hedged forecasted transaction affects earnings. The

reclassification to earnings commenced in the third quarter of 2006 and extended until December 31, 2008, depending on the period or periods during which the hedged forecasted transactions affected earnings. All of the amount included in “Accumulated Other Comprehensive Income/(Loss)” had been reclassified to earnings as of December 31, 2008. For the three and nine month periods ended September 30, 2010, no losses/gain for both periods were included in “Accumulated Other Comprehensive Income/ (Loss)”, and nothing were reclassified to earnings.

     The Company classifies cash flows related to derivative financial instruments within cash provided by operating activities in the consolidated statement of cash flows.

     Stock-based compensation: On October 18, 2007 and December 16, 2008, the Compensation Committee of the Board of Directors authorized the issuance of shares of restricted stock, restricted stock units and stock options in accordance with the Company’s stock option plan for its employees, officers and directors. The Company awarded shares of restricted stock and restricted stock units to its employees, officers and directors and stock options to its officers and directors, based on service conditions only, which vest over two years and three years, respectively. On December 17, 2009, the Company authorized the issuance of shares of restricted stock, restricted stock units and stock options in accordance with the Company’s stock option plan for its employees, officers and directors. Restricted stock and restricted stock units awarded on December 17, 2009 to its employees, officers and directors, vest over three years.

     The fair value of stock option grants is determined with reference to option pricing models, principally Black-Scholes models. The fair value of restricted stock and restricted stock units grants is determined by reference to the quoted stock price on the date of grant. Compensation expense, net of estimated forfeitures, is recognized based on a graded expense model over the vesting period.

     Impairment of long-lived assets: Vessels, other fixed assets and other long lived assets held and used by Navios Holdings are reviewed periodically for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a particular asset may not be fully recoverable. In accordance with the guidance titled “Impairment of Long Lived Assets”, Navios Holdings’ management evaluates the carrying amounts and periods over which long-lived assets are depreciated to determine if events or changes in circumstances have occurred that would require modification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, certain indicators of potential impairment, are reviewed such as undiscounted projected operating cash flows, vessel sales and purchases, business plans and overall market conditions. Undiscounted projected net operating cash flows are determined for each vessel and compared to the vessel carrying value. In the event that impairment occurred, the fair value of the related asset is determined and a charge is recorded to operations calculated by comparing the asset’s carrying value to the estimated fair value. Fair value is estimated primarily through the use of third-party valuations performed on an individual vessel basis.

     Although management believes the underlying indicators supporting this assessment are reasonable, if charter rate trends and the length of the current market downturn, vary significantly from our forecasts, management may be required to perform impairment analysis in the future that could expose Navios Holdings to material impairment charges in the future.

     No impairment loss was recognized for any of the periods presented.

     Vessels, Port Terminal, Tanker Vessels, Barges, Push boats and Other Fixed Assets, net: Vessels, port terminal, tanker vessels, barges, push boats and other fixed assets acquired as parts of a business combination would be recorded at fair value on the date of acquisition. Vessels acquired as asset acquisitions would be stated at historical cost, which consists of the contract price, any material expenses incurred upon acquisition (improvements and delivery expenses). Subsequent expenditures for major improvements and upgrading are capitalized, provided they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. The cost and related accumulated depreciation of assets retired or sold are removed from the accounts at the time of sale or retirement and any gain or loss is included in the accompanying consolidated statements of operations.

     Expenditures for routine maintenance and repairs are expensed as incurred.

     Depreciation is computed using the straight line method over the useful life of the vessels, after considering the estimated residual value. Management estimates the useful life of the Company’s vessels to be 25 years from the vessel’s original construction. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, its useful life is re-estimated to end at the date such regulations become effective.

     Deferred Drydock and Special Survey Costs: The Company’s vessels, barges and push boats are subject to regularly scheduled drydocking and special surveys which are carried out every 30, 60, and 84 months for vessels and barges and push boats, respectively, to coincide with the renewal of the related certificates issued by the Classification Societies, unless a further extension is obtained in rare cases and under certain conditions. The costs of drydocking and special surveys is deferred and amortized over the above periods or to the next drydocking or special survey date if such has been determined. Unamortized drydocking or special survey costs of vessels, barges and push boats sold are written off to income in the year the vessel, barge or push boat is sold. This cost is determined by reference to the estimated economic benefits to be derived until the next drydocking or special survey.

     Goodwill and Other Intangibles: As required by the accounting for goodwill and other intangible assets, goodwill acquired in a business combination initiated after June 30, 2001 is not to be amortized. Similarly, intangible assets with indefinite lives are not amortized. The Company accounts for intangible assets associated with a favorable operating lease containing an in-the-money purchase option as one intangible asset, a portion of which is amortized and a portion of which in not amortized. The amortizable portion relates to the favorable portion of the operating lease and the non-amortizable portion relates to the purchase option that in-the-money at the date of the business combination. The amortizable portion is amortized over the original lease term. If the purchase option is exercised early, the favorable lease

intangible asset will not be fully amortized as of the date the option is exercised. This unamortized amount is included as an adjustment to the carrying value of the vessel along with the carrying value of the option and the option exercise.

     The guidance requires that goodwill be tested for impairment at least annually and written down with a charge to operations if the carrying amount exceeds the estimated implied fair value. The Company evaluates impairment of goodwill using a two-step process. First, the aggregate fair value of the reporting unit is compared to its carrying amount, including goodwill. The Company determines the fair value based on a combination of discounted cash flow analysis and an industry market multiple.

     If the fair value exceeds the carrying amount, no impairment exists. If the carrying amount of the reporting unit exceeds the fair value, then the Company must perform the second step in order to determine the implied fair value of the reporting unit’s goodwill and compare it with its carrying amount. The implied fair value is determined by allocating the fair value of the reporting unit to all the assets and liabilities of that unit, as if the unit had been acquired in a business combination and the fair value of the unit was the purchase price. If the carrying amount of the goodwill exceeds the implied fair value, then goodwill impairment is recognized by writing the goodwill down to the implied fair value.

     No impairment loss was recognized for any of the periods presented.

     The fair value of the trade name was determined based on the “relief from royalty” method which values the trade name based on the estimated amount that a company would have to pay in an arms length transaction in order to use that trade name. The asset is being amortized under the straight line method over 32 years. The fair value of customer relationships was determined based on the “excess earnings” method, which relies upon the future cash flow generating ability of the asset. The asset is amortized under the straight line method over 20 years. Other intangibles that are being amortized, such as the amortizable portion of favorable leases, port terminal operating rights, backlog assets and liabilities, would be considered impaired if their carrying value could not be recovered from the future undiscounted cash flows associated with the asset. Vessel purchase options, which are included in favorable lease terms, are not amortized and would be considered impaired if the carrying value of an option, when added to the option price of the vessel, exceeded the fair value of the vessel.

     Investment in available for sale securities: The Company classifies its existing marketable equity securities as available-for-sale in accordance with guidance on Accounting for Certain Investments in Debt and Equity Securities. These securities are carried at fair value, with unrealized gains and losses excluded from earnings and reported directly in stockholders’ equity as a component of other comprehensive income (loss) unless an unrealized loss is considered “other-than-temporary,” in which case it is transferred to the statement of income.

     Management evaluates securities for other than temporary impairment (“OTTI”) on a quarterly basis. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the investee, and (3) the intent and ability of the Company to retain its investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value.

     For the nine month period ended September 30, 2010 and for the year ended December 31, 2009, the Company’s unrealized holding gains on available-for-sale securities were $28.5 million and $15.2 million, respectively.

Recent Accounting Pronouncements

Fair Value Disclosures

     In January 2010, the Financial Accounting Standards Board (“FASB”) issued amended standards requiring additional fair value disclosures. The amended standards require disclosures of transfers in and out of Levels 1 and 2 of the fair value hierarchy, as well as requiring gross basis disclosures for purchases, sales, issuances and settlements within the Level 3 reconciliation. Additionally, the update clarifies the requirement to determine the level of disaggregation for fair value measurement disclosures and to disclose valuation techniques and inputs used for both recurring and nonrecurring fair value measurements in either Level 2 or Level 3. Navios Holdings adopted the new guidance in the first quarter of fiscal year 2010, except for the disclosures related to purchases, sales, issuance and settlements, which will be effective for Navios Holdings beginning in the first quarter of fiscal year 2011. The adoption of the new standards did not have and is not expected to have a significant impact on Navios Holdings’ consolidated financial statements.

Measuring Liabilities at Fair Value

     In August 2009, the FASB released new guidance concerning measuring liabilities at fair value. The new guidance provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using certain valuation techniques. Additionally, it clarifies that a reporting entity is not required to adjust the fair value of a liability for the existence of a restriction that prevents the transfer of the liability. This new guidance is effective for the first reporting period after its issuance, however earlier application is permitted. The application of this new guidance did not have a significant impact on Navios Holdings’ consolidated financial statements.

Determining the Primary Beneficiary of a Variable Interest Entity

     In June 2009, the FASB issued new guidance concerning the determination of the primary beneficiary of a variable interest entity (“VIE”). This new guidance amends current U.S. GAAP by: requiring ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE; amending the quantitative approach previously required for determining the primary beneficiary of the VIE; modifying the guidance used to determine whether an equity is a VIE; adding an additional reconsideration event (e.g. troubled debt restructurings) for

determining whether an entity is a VIE; and requiring enhanced disclosures regarding an entity’s involvement with a VIE.

     This new guidance was effective for Navios Holdings beginning in its first quarter of fiscal year 2010 and its adoption did not have any significant effect on its financial position, results of operations, or cash flows. Navios Holdings will continue to consider the impacts of this new guidance on an on-going basis.

Transfers of Financial Assets

     In June 2009, the FASB issued new guidance concerning the transfer of financial assets. This guidance amends the criteria for a transfer of a financial asset to be accounted for as a sale, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, changes the initial measurement of a transferor’s interest in transferred financial assets, eliminates the qualifying special-purpose entity concept and provides for new disclosures. This new guidance was effective for Navios Holdings for transfers of financial assets beginning in its first quarter of fiscal year 2010 and its adoption did not have any significant effect on its financial position, results of operations, or cash flows.

Subsequent Events

     In February 2010, the FASB issued amended guidance on subsequent events. Securities and Exchange Commission filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and Navios Holdings adopted these new requirements in the first quarter of fiscal 2010.

NAVIOS MARITIME HOLDINGS INC.

Index

		Page
CONDENSED CONSOLIDATED BALANCE SHEETS AS AT SEPTEMBER 30, 2010 (UNAUDITED) AND DECEMBER 31, 2009		F-2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009		F-4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009		F-5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009		F-6
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		F-7

NAVIOS MARITIME HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars)

						September 30,				December 31,
		Note				2010				2009
						(unaudited)
ASSETS
Current assets
Cash and cash equivalents			4			$	133,200			$	173,933
Restricted cash							171,156				107,158
Accounts receivable, net							79,557				78,504
Short-term derivative asset			8				10,245				38,382
Due from affiliate companies							2,854				1,973
Prepaid expenses and other current assets							32,400				27,730
Total current assets							429,412				427,680
Deposits for vessel acquisitions			5				610,017				344,515
Vessels, port terminal and other fixed assets, net			5				2,065,864				1,577,741
Long-term derivative assets			8				36				8,181
Restricted cash							27,498				—
Other long-term assets							55,374				69,222
Investments in affiliates			14				16,566				13,042
Investments in available for sale securities							79,999				46,314
Intangible assets other than goodwill			6				334,801				300,571
Goodwill			3				176,424				147,916
Total non-current assets							3,366,579				2,507,502
Total assets						$	3,795,991			$	2,935,182
LIABILITIES AND EQUITY
Current liabilities
Accounts payable						$	41,259			$	61,990
Dividends payable							6,061				6,052
Accrued expenses							86,802				48,030
Deferred income and cash received in advance			11				20,442				9,529
Short-term derivative liability			8				2,374				10,675
Capital lease obligations							1,243				—
Current portion of long-term debt			7				202,773				59,804
Total current liabilities							360,954				196,080
Senior and ship mortgage notes, net of discount			7				693,594				693,049
Long-term debt, net of current portion			7				1,309,105				869,853
Capital lease obligations, net of current portion							31,330				—
Unfavorable lease terms			6				59,031				59,203
Long-term liabilities and deferred income			11				53,070				33,470
Deferred tax liability							21,067				22,777
Total non-current liabilities							2,167,197				1,678,352
Total liabilities							2,528,151				1,874,432
Commitments and contingencies			10				—				—
Stockholders’ equity
Preferred stock — $0.0001 par value, authorized 1,000,000 shares, 14,651 and 8,201 issued and outstanding as of September 30, 2010 and December 31, 2009, respectively							—				—
Common stock — $0.0001 par value, authorized 250,000,000 shares, issued and outstanding 101,017,178 and 100,874,199 as of September 30, 2010 and December 31, 2009, respectively			9				10				10
Additional paid-in capital			9				545,558				533,729