P5Y0.010.016.608% plus 3-month U.S. LIBOR6.0% plus 3-month NIBORThe 2018 Bonds bear interest at a rate equal to the 3-month NIBOR plus 6.0% per annum, calculated on a 360-day year basis and mature on November 2, 2023.6.608% plus 3-month U.S. LIBORP3YP3YP10Yfalse2020Q2Navigator Holdings Ltd.0001581804--12-310.010.0100P7YIncludes amounts relating to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 15 (Variable Interest Entities).Total non-current liabilities presented as amounts due to related parties includes $3,000 of share capital relating to the lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 15 (Variable Interest Entities).On July 30, 2020, the Company made a capital contribution of $7.5 million, reducing the anticipated remaining contributions from $14.2 million to $6.7 million, to be contributed in 2021 for our portion of the capital cost for the construction of the Marine Export Terminal.On August 4, 2020 the Terminal Facility was amended to allow the Company an early true-up of $34.0 million, enabling those funds to be immediately drawn for general corporate purposes due to previous capital contributions for the Marine Export Terminal being paid from the Company’s own resources. In addition, on September 17, 2020, the Company has entered into an agreement to refinance one of its vessel loans to borrow approximately an additional $30.0 million for general corporate purposes.The Company has refinanced its 2017 Bonds that were scheduled to mature in February 2021, with new 2020 Bonds. They are therefore presented as a non-current liability in the balance sheet. The new bonds will mature in September 2025 and have a fixed coupon of 8.00% per annum. The existing 2017 Bonds were redeemed in full in September 2020. See “Liquidity and Capital Resources—2017 Senior Unsecured Bonds” and “—2020 Senior Unsecured Bonds.”The Company occupies office space in London with a lease that commenced in January 2017 for a period of 10 years with a mutual break option in January 2022, which is the fifth anniversary from the lease commencement date. This break option is recognized in the table above but has not been included as part of the right-of-use asset and lease liability associated with the lease. Please read Note 17 (Operating Lease Liabilities) to our unaudited condensed consolidated financial statements. The gross rent per year is approximately $1.1 million. The Company entered into a lease for office space in New York that now expires on May 31, 2022. The annual gross rent under this lease is approximately $0.4 million, subject to certain adjustments.The lease term for our representative office in Gdynia, Poland is for a period of five years commencing from January 2017. The gross rent per year is approximately $60,000.The weighted average remaining contractual lease term for the above three office leases on June 30, 2020 was 1.67 years. The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 15 (Variable Interest Entities) to our unaudited condensed consolidated financial statements. 0001581804 2019-01-01 2019-06-30 0001581804 2020-01-01 2020-06-30 0001581804 2019-04-01 2019-06-30 0001581804 2020-04-01 2020-06-30 0001581804 2020-06-30 0001581804 2019-12-31 0001581804 2019-01-01 2019-12-31 0001581804 2019-03-01 2019-03-20 0001581804 2018-01-01 2018-12-31 0001581804 2019-10-01 2019-10-21 0001581804 2020-06-30 2020-06-30 0001581804 2018-12-31 0001581804 2019-03-31 0001581804 2020-03-31 0001581804 2019-06-30 0001581804 nvgs:SeniorSecuredBondsMember 2019-12-31 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2019-12-31 0001581804 nvgs:TimeCharterAgreementsMember 2019-12-31 0001581804 us-gaap:CollateralizedLoanObligationsMember 2019-12-31 0001581804 nvgs:TwoThousandEighteenBondsMember 2019-12-31 0001581804 nvgs:TwoThousandSeventeenBondsMember 2019-12-31 0001581804 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001581804 us-gaap:RestrictedStockMember 2019-12-31 0001581804 nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-12-31 0001581804 nvgs:VesselsInOperationMember 2019-12-31 0001581804 us-gaap:AccountingStandardsUpdate201409Member 2019-12-31 0001581804 us-gaap:AccountingStandardsUpdate201409Member nvgs:CargoCommencesMember 2019-12-31 0001581804 nvgs:CargoCommencesMember 2019-12-31 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2019-12-31 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember nvgs:OceanYieldAroraLtdMember 2019-12-31 0001581804 nvgs:NavigatorAuroraFacilityMember nvgs:OcyAuroraLimitedMember 2019-12-31 0001581804 nvgs:VesselMember nvgs:VesselsMember 2019-12-31 0001581804 nvgs:VesselsMember nvgs:DrydockingMember 2019-12-31 0001581804 nvgs:VesselsMember 2019-12-31 0001581804 nvgs:EthyleneMarineExportTerminalMember 2019-12-31 0001581804 us-gaap:CrossCurrencyInterestRateContractMember 2019-12-31 0001581804 nvgs:OceanYieldMaltaLimitedMember 2019-12-31 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-06-30 0001581804 country:NO nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-06-30 0001581804 country:PL 2020-06-30 0001581804 nvgs:LondonMember 2020-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember 2020-06-30 0001581804 nvgs:SeniorSecuredBondsMember 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2020-06-30 0001581804 nvgs:TimeCharterAgreementsMember 2020-06-30 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember country:NO nvgs:NorwegianInterbankOfferedRateNiborMember 2020-06-30 0001581804 stpr:NY 2020-06-30 0001581804 us-gaap:CollateralizedLoanObligationsMember 2020-06-30 0001581804 nvgs:TwoThousandEighteenBondsMember 2020-06-30 0001581804 nvgs:TwoThousandSeventeenBondsMember 2020-06-30 0001581804 us-gaap:FairValueInputsLevel2Member 2020-06-30 0001581804 srt:MinimumMember nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember srt:MinimumMember 2020-06-30 0001581804 us-gaap:RestrictedStockMember 2020-06-30 0001581804 nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-06-30 0001581804 nvgs:SecuredTermLoanFacilitiesAndRevolvingCreditFacilityMember 2020-06-30 0001581804 nvgs:VesselsInOperationMember 2020-06-30 0001581804 nvgs:NavigatorAuroraFacilityMember 2020-06-30 0001581804 nvgs:OfficeLeasesMember 2020-06-30 0001581804 nvgs:OfficeSpaceMember 2020-06-30 0001581804 us-gaap:AccountingStandardsUpdate201409Member 2020-06-30 0001581804 us-gaap:AccountingStandardsUpdate201409Member nvgs:CargoCommencesMember 2020-06-30 0001581804 nvgs:NotLaterThanOneYearMemberMember 2020-06-30 0001581804 nvgs:MoreThanOneYearButNotLaterThanTwoYearsMemberMember 2020-06-30 0001581804 nvgs:MoreThanTwoYearsButNotLaterThanThreeYearsMemberMember 2020-06-30 0001581804 nvgs:MoreThanThreeYearsButNotLaterThanFourYearsMemberMember 2020-06-30 0001581804 nvgs:MoreThanFourYearsButNotLaterThanFiveYearsMemberMember 2020-06-30 0001581804 nvgs:LaterThanFiveYearsMemberMember 2020-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember nvgs:IngCapitalLlcAndSgAmericaSecuritiesMember nvgs:TerminalFacilityMember 2020-06-30 0001581804 nvgs:CargoCommencesMember 2020-06-30 0001581804 nvgs:IngCapitalLlcAndSgAmericaSecuritiesMember nvgs:TerminalFacilityMember 2020-06-30 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-06-30 0001581804 nvgs:TwoThousandSeventeenAmendmentMember nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2020-06-30 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember nvgs:OceanYieldAroraLtdMember 2020-06-30 0001581804 nvgs:OcyAuroraLimitedMember nvgs:NavigatorAuroraFacilityMember 2020-06-30 0001581804 us-gaap:InterestRateSwapMember 2020-06-30 0001581804 nvgs:VesselMember nvgs:VesselsMember 2020-06-30 0001581804 nvgs:VesselsMember nvgs:DrydockingMember 2020-06-30 0001581804 nvgs:VesselsMember 2020-06-30 0001581804 us-gaap:CrossCurrencyInterestRateContractMember 2020-06-30 0001581804 nvgs:LunaPoolAgencyLimitedMember 2020-06-30 0001581804 nvgs:OceanYieldMaltaLimitedMember 2020-06-30 0001581804 nvgs:LunaPoolMember 2020-06-30 0001581804 nvgs:TwoThousandTwentySeniorUnsecuredBondsMember 2020-06-30 0001581804 us-gaap:NondesignatedMember 2020-04-01 2020-06-30 0001581804 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001581804 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001581804 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001581804 nvgs:LunaPoolCollaborativeArrangementMember 2020-04-01 2020-06-30 0001581804 nvgs:TimeChartersMember 2020-04-01 2020-06-30 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-04-01 2020-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember 2020-04-01 2020-06-30 0001581804 nvgs:LunaPoolMember nvgs:LunaPoolAgencyLimitedMember 2020-04-01 2020-06-30 0001581804 nvgs:LunaPoolAgencyLimitedMember nvgs:VoyageChartersMember 2020-04-01 2020-06-30 0001581804 us-gaap:AccountingStandardsUpdate201613Member 2020-04-01 2020-06-30 0001581804 nvgs:VoyageChartersMember nvgs:LunaPoolAgencyLimitedMember 2020-04-01 2020-06-30 0001581804 nvgs:VoyageChartersMember 2020-04-01 2020-06-30 0001581804 us-gaap:NondesignatedMember 2019-04-01 2019-06-30 0001581804 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001581804 nvgs:LunaPoolCollaborativeArrangementMember 2019-04-01 2019-06-30 0001581804 nvgs:TimeChartersMember 2019-04-01 2019-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember 2019-04-01 2019-06-30 0001581804 nvgs:VoyageChartersMember nvgs:LunaPoolAgencyLimitedMember 2019-04-01 2019-06-30 0001581804 nvgs:VoyageChartersMember 2019-04-01 2019-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2020-01-01 2020-06-30 0001581804 nvgs:SeniorSecuredBondsMember 2020-01-01 2020-06-30 0001581804 nvgs:LondonMember 2020-01-01 2020-06-30 0001581804 nvgs:OfficersAndEmployeesMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-01-01 2020-06-30 0001581804 nvgs:NonEmployeeDirectorMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-01-01 2020-06-30 0001581804 stpr:NY 2020-01-01 2020-06-30 0001581804 country:NO nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-01-01 2020-06-30 0001581804 country:NO nvgs:TwoThousandEighteenSeniorSecuredBondsMember nvgs:NorwegianInterbankOfferedRateNiborMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember nvgs:TwoThousandSeventeenAmendmentMember 2020-01-01 2020-06-30 0001581804 us-gaap:CommonStockMember nvgs:PeriodNineMember 2020-01-01 2020-06-30 0001581804 nvgs:PeriodNineMember 2020-01-01 2020-06-30 0001581804 nvgs:VesselsMember 2020-01-01 2020-06-30 0001581804 nvgs:VesselMember nvgs:VesselsMember 2020-01-01 2020-06-30 0001581804 nvgs:VesselsMember nvgs:DrydockingMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember us-gaap:DebtInstrumentRedemptionPeriodTwoMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember us-gaap:DebtInstrumentRedemptionPeriodThreeMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember us-gaap:DebtInstrumentRedemptionPeriodFourMember 2020-01-01 2020-06-30 0001581804 us-gaap:NondesignatedMember 2020-01-01 2020-06-30 0001581804 us-gaap:CommonStockMember 2020-01-01 2020-06-30 0001581804 us-gaap:RetainedEarningsMember 2020-01-01 2020-06-30 0001581804 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-06-30 0001581804 srt:MinimumMember nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2020-01-01 2020-06-30 0001581804 us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001581804 nvgs:OtherMember 2020-01-01 2020-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-06-30 0001581804 srt:MaximumMember nvgs:SeniorSecuredBondsMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember srt:MinimumMember 2020-01-01 2020-06-30 0001581804 nvgs:OfficersAndEmployeesMember 2020-01-01 2020-06-30 0001581804 nvgs:LunaPoolCollaborativeArrangementMember 2020-01-01 2020-06-30 0001581804 nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-01-01 2020-06-30 0001581804 nvgs:TerminalFacilityMember 2020-01-01 2020-06-30 0001581804 nvgs:TimeChartersMember 2020-01-01 2020-06-30 0001581804 nvgs:TerminalFacilityMember nvgs:IngCapitalLlcAndSgAmericaSecuritiesMember nvgs:EthyleneMarineExportTerminalMember 2020-01-01 2020-06-30 0001581804 nvgs:TerminalFacilityMember nvgs:IngCapitalLlcAndSgAmericaSecuritiesMember nvgs:EthyleneMarineExportTerminalMember nvgs:MaturityOfDebtTimeTwoMember 2020-01-01 2020-06-30 0001581804 nvgs:TerminalFacilityMember nvgs:IngCapitalLlcAndSgAmericaSecuritiesMember nvgs:EthyleneMarineExportTerminalMember nvgs:MaturityOfDebtTimeOneMember 2020-01-01 2020-06-30 0001581804 nvgs:LongTermIncentivePlanTwoThousandThirteenMember nvgs:EmployeeMember 2020-01-01 2020-06-30 0001581804 nvgs:SecuredBondsMember 2020-01-01 2020-06-30 0001581804 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-01-01 2020-06-30 0001581804 nvgs:PtNavigatorKhatulistiwaMember us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-01-01 2020-06-30 0001581804 srt:ConsolidatedEntityExcludingVariableInterestEntitiesVIEMember 2020-01-01 2020-06-30 0001581804 nvgs:LunaPoolAgencyLimitedMember nvgs:LunaPoolMember 2020-01-01 2020-06-30 0001581804 nvgs:LunaPoolAgencyLimitedMember 2020-01-01 2020-06-30 0001581804 nvgs:OceanYieldMaltaLimitedMember 2020-01-01 2020-06-30 0001581804 nvgs:OceanYieldMaltaLimitedMember us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-06-30 0001581804 nvgs:OceanYieldMaltaLimitedMember us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001581804 nvgs:LunaPoolAgencyLimitedMember 2020-01-01 2020-06-30 0001581804 nvgs:GeneralAndAdministrativeCostsMember 2020-01-01 2020-06-30 0001581804 us-gaap:InterestExpenseMember 2020-01-01 2020-06-30 0001581804 nvgs:TwoThousandTwentySeniorUnsecuredBondsMember 2020-01-01 2020-06-30 0001581804 nvgs:VoyageChartersMember nvgs:LunaPoolAgencyLimitedMember 2020-01-01 2020-06-30 0001581804 nvgs:VoyageChartersMember 2020-01-01 2020-06-30 0001581804 us-gaap:CommonStockMember nvgs:PeriodEightMember 2019-01-01 2019-06-30 0001581804 nvgs:PeriodEightMember 2019-01-01 2019-06-30 0001581804 us-gaap:NondesignatedMember 2019-01-01 2019-06-30 0001581804 us-gaap:RetainedEarningsMember 2019-01-01 2019-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001581804 nvgs:OtherMember 2019-01-01 2019-06-30 0001581804 nvgs:SeniorSecuredBondsMember 2019-01-01 2019-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-06-30 0001581804 nvgs:LunaPoolCollaborativeArrangementMember 2019-01-01 2019-06-30 0001581804 nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-01-01 2019-06-30 0001581804 nvgs:SecuredTermLoanMember 2019-01-01 2019-06-30 0001581804 nvgs:TerminalFacilityMember 2019-01-01 2019-06-30 0001581804 nvgs:TimeChartersMember 2019-01-01 2019-06-30 0001581804 nvgs:SecuredBondsMember 2019-01-01 2019-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember 2019-01-01 2019-06-30 0001581804 nvgs:OceanYieldMaltaLimitedMember 2019-01-01 2019-06-30 0001581804 nvgs:VoyageChartersMember nvgs:LunaPoolAgencyLimitedMember 2019-01-01 2019-06-30 0001581804 nvgs:VoyageChartersMember 2019-01-01 2019-06-30 0001581804 nvgs:OfficersAndEmployeesMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-01-01 2019-12-31 0001581804 nvgs:NonEmployeeDirectorMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-01-01 2019-12-31 0001581804 srt:ChiefExecutiveOfficerMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-01-01 2019-12-31 0001581804 us-gaap:RestrictedStockMember 2019-01-01 2019-12-31 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2018-11-02 2018-11-02 0001581804 nvgs:NordeaBankAbpMember nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2018-11-02 2018-11-02 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember us-gaap:DebtInstrumentRedemptionPeriodFiveMember 2018-11-02 2018-11-02 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember nvgs:DebtInstrumentRedemptionPeriodSixMember 2018-11-02 2018-11-02 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember nvgs:DebtInstrumentRedemptionPeriodSevenMember 2018-11-02 2018-11-02 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2018-11-02 0001581804 nvgs:NordeaBankAbpMember nvgs:TwoThousandEighteenSeniorSecuredBondsMember 2018-11-02 0001581804 nvgs:TwoThousandEighteenSeniorSecuredBondsMember nvgs:NordeaBankAbpMember 2018-12-31 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2017-02-10 0001581804 nvgs:TwoThousandTwelveSeniorUnsecuredBondsMember 2017-02-10 0001581804 nvgs:NonEmployeeDirectorMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-03-19 2020-03-19 0001581804 nvgs:OfficersAndEmployeesMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-03-19 2020-03-19 0001581804 nvgs:ChairmanMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-03-19 2020-03-19 0001581804 nvgs:NonEmployeeDirectorMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-08-14 2019-08-14 0001581804 srt:MinimumMember 2015-03-17 2015-03-17 0001581804 srt:MaximumMember 2015-03-17 2015-03-17 0001581804 nvgs:EmployeeMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-01-05 2019-01-05 0001581804 nvgs:EthyleneMarineExportTerminalMember 2020-06-30 2020-06-30 0001581804 nvgs:EthyleneMarineExportTerminalMember us-gaap:SubsequentEventMember 2020-07-01 2020-07-31 0001581804 nvgs:SeniorSecuredTermFacilitiesAndRevolvingFacilitiesAmendmentMember us-gaap:SubsequentEventMember 2020-08-04 0001581804 us-gaap:SubsequentEventMember 2020-08-04 0001581804 nvgs:EthyleneMarineExportTerminalMember us-gaap:SubsequentEventMember 2020-07-30 2020-07-30 0001581804 us-gaap:SubsequentEventMember nvgs:NewSeniorTwoThousandAndTwentyUnsecuredBondsMember 2020-09-10 0001581804 us-gaap:SubsequentEventMember nvgs:TwoThousandSeventeenBondsMember 2020-09-10 0001581804 us-gaap:SubsequentEventMember nvgs:NewSeniorTwoThousandAndTwentyUnsecuredBondsMember 2020-09-10 2020-09-10 0001581804 nvgs:EmployeeMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2020-04-30 2020-04-30 0001581804 nvgs:ChairmanMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-03-20 2019-03-20 0001581804 nvgs:OfficersAndEmployeesMember nvgs:LongTermIncentivePlanTwoThousandThirteenMember 2019-03-20 2019-03-20 0001581804 nvgs:TwoThousandSeventeenSeniorUnsecuredBondsMember 2017-02-10 2017-02-10 0001581804 nvgs:EthyleneMarineExportTerminalMember 2020-07-30 0001581804 nvgs:EthyleneMarineExportTerminalMember us-gaap:SubsequentEventMember 2020-07-30 0001581804 us-gaap:SubsequentEventMember 2020-07-30 0001581804 nvgs:OcyAuroraLimitedMember nvgs:NavigatorAuroraFacilityMember 2019-10-31 0001581804 nvgs:OcyAuroraLimitedMember nvgs:NavigatorAuroraFacilityMember 2019-10-01 2019-10-31 0001581804 nvgs:RevolvingCreditFacilityAmendedMember us-gaap:SubsequentEventMember nvgs:PurposeOfCreditFacilityMember 2020-09-17 2020-09-17 0001581804 nvgs:RevolvingCreditFacilityAmendedMember us-gaap:SubsequentEventMember nvgs:GeneralCorporatePurposeMember 2020-09-17 2020-09-17 0001581804 nvgs:RevolvingCreditFacilityAmendedMember us-gaap:SubsequentEventMember 2020-09-17 2020-09-17 0001581804 nvgs:RevolvingCreditFacilityAmendedMember us-gaap:SubsequentEventMember 2020-09-17 0001581804 us-gaap:SubsequentEventMember us-gaap:InterestRateSwapMember 2020-10-15 0001581804 us-gaap:SubsequentEventMember us-gaap:InterestRateSwapMember 2020-10-15 2020-10-15 0001581804 us-gaap:CommonStockMember 2020-03-31 0001581804 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001581804 us-gaap:RetainedEarningsMember 2020-03-31 0001581804 us-gaap:NoncontrollingInterestMember 2020-03-31 0001581804 us-gaap:CommonStockMember 2020-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001581804 us-gaap:RetainedEarningsMember 2020-06-30 0001581804 us-gaap:NoncontrollingInterestMember 2020-06-30 0001581804 us-gaap:CommonStockMember 2019-03-31 0001581804 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001581804 us-gaap:RetainedEarningsMember 2019-03-31 0001581804 us-gaap:CommonStockMember 2019-06-30 0001581804 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001581804 us-gaap:RetainedEarningsMember 2019-06-30 0001581804 us-gaap:CommonStockMember 2019-12-31 0001581804 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001581804 us-gaap:RetainedEarningsMember 2019-12-31 0001581804 us-gaap:NoncontrollingInterestMember 2019-12-31 0001581804 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2019-12-31 0001581804 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember srt:RestatementAdjustmentMember 2019-12-31 0001581804 us-gaap:CommonStockMember 2018-12-31 0001581804 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001581804 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001581804 us-gaap:RetainedEarningsMember 2018-12-31 0001581804 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2018-12-31 0001581804 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember srt:RestatementAdjustmentMember 2018-12-31 iso4217:USD iso4217:NOK xbrli:shares utr:Year xbrli:pure iso4217:USD xbrli:shares nvgs:Vessels
Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
Form
6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE
13a-16
OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2020
Commission File Number
001-36202
 
 
NAVIGATOR HOLDINGS LTD.
(Translation of registrant’s name into English)
 
 
c/o NGT Services (UK) Ltd
10 Bressenden Place
London, SW1E 5DH
United Kingdom
(Address of principal executive office)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or
Form 40-F.
Form 20-F  ☒                
Form 40-F   ☐
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  ☐    No  ☒
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  ☐    No  ☒
 
 
 

Table of Contents
NAVIGATOR HOLDINGS LTD.
REPORT ON FORM
6-K
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020
INDEX
 
    
PAGE
 
     3  
     20  
     21  
Unaudited Condensed Consolidated Financial Statements
  
    
F-1
 
    
F-2
 
    
F-3
 
    
F-4
 
    
F-5
 
    
F-6
 
  
  
 
2

Table of Contents
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise requires, all references in this report to “Navigator Holdings,” “our,” “we,” “us” and the “Company” refer to Navigator Holdings Ltd., a Marshall Islands corporation. All references in this report to our wholly-owned subsidiary “Navigator Gas L.L.C.” refer to Navigator Gas L.L.C., a Marshall Islands limited liability company. As used in this report, unless the context indicates or otherwise requires, references to “our fleet” or “our vessels” refers to the 38 vessels we owned and operated as of June 30, 2020.
This section should be read in conjunction with the interim financial statements and notes thereto presented elsewhere in this report, as well as the audited historical consolidated financial statements and notes thereto of Navigator Holdings Ltd. included in our Annual Report on Form
20-F,
filed with the United States Securities and Exchange Commission, or the SEC, on May 11, 2020 (as amended by the Form
20-F/A
filed with the SEC on May 22, 2020, the “2019 Annual Report”). Among other things, those financial statements include more detailed information regarding the basis of presentation for the following information. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, and are presented in U.S. Dollars unless otherwise indicated.
Overview
We are the owner and operator of the world’s largest fleet of handysize liquefied gas carriers. We provide international and regional seaborne transportation services of petrochemical gases, liquified petroleum gas, or “LPG”, and ammonia for energy companies, industrial users and commodity traders. These gases are transported in liquefied form, by applying cooling and/or pressure, to reduce volume by up to 900 times depending on the cargo, making their transportation more efficient and economical. Vessels in our fleet are capable of loading, discharging and carrying cargoes across a range of temperatures from ambient to minus 104° Celsius and pressures from 1 bar to 6.4 bar.
We employ our vessels through a combination of time charters, voyage charters and contracts of affreightment (“COAs”). Our owned fleet consists of 38 vessels; 33 of these are semi- or fully-refrigerated handysize liquefied gas carriers; four are midsize 37,300 cubic meters, or “cbm”, ethylene/ethane capable semi-refrigerated liquefied gas carriers and one is a 38,000 cbm fully refrigerated liquefied gas carrier. In addition, since April 2020, we collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. to form and manage the Luna Pool, which includes nine of the Company’s ethylene capable handysize vessels and five ethylene capable handysize vessels from Pacific Gas Pte. Ltd. We define handysize liquefied gas carriers as those liquefied gas carriers with capabilities between 15,000 and 24,999 cbm.
Our handysize liquefied gas carriers typically transport LPG on short- or medium-haul routes that may be uneconomical for smaller vessels and can call at ports that are unable to support larger vessels due to limited onshore capacity, absence of fully-refrigerated loading infrastructure and/or vessel size restrictions. These handysize liquefied gas carriers are amongst the largest semi-refrigerated vessels in the world, which also makes them capable of transporting petrochemicals on long routes, typically intercontinental. Our midsize ethylene/ethane-capable semi-refrigerated gas carriers enable long-haul transportation of ethylene/ethane that may be uneconomical for smaller vessels.
We have also entered into a 50/50 joint venture (the “Export Terminal Joint Venture”) to construct and operate an ethylene export marine terminal at Morgan’s Point, Texas (the “Marine Export Terminal”). Our joint venture partner is the sole managing member of the Export Terminal Joint Venture and it is also the operator of the Marine Export Terminal. The Marine Export Terminal began commercial operations with the export of commissioning cargoes in December 2019 and commenced under long term take or pay contracts as of the beginning of June. Refrigerated storage for 30,000 tons of ethylene is also being constructed
on-site.
It will provide the capability to load ethylene at rates of 1,000 tons per hour and is expected to be completed in late 2020. Once completed, it is expected that the Marine Export terminal will have the capacity to export approximately one million tons of ethylene annually. Our share of the capital cost for the construction of the Marine Export Terminal is expected to be $147.2 million, of which we had contributed $133.0 million to the Export Terminal Joint Venture as of June 30, 2020. An additional $7.5 million capital contribution was made on July 30, 2020. We expect to contribute the remaining contributions during early 2021.
 
3

Table of Contents
Our Fleet
The following table sets forth our vessels as of October 15, 2020:
 
Operating Vessel
  
Year
Built
    
Vessel Size
(cbm)
    
Employment
Status
  
Current
Cargo
    
Charter
Expiration Date
 
Ethylene/ethane capable semi-refrigerated
              
Navigator Orion*
     2000        22,085      Contract of affreightment      Ethylene         
Navigator Neptune*
     2000        22,085      Time charter      Ethane        October 2020  
Navigator Pluto
     2000        22,085      Time charter      LPG        January 2021  
Navigator Saturn*
     2000        22,085      Spot market              
Navigator Venus*
     2000        22,085      Time charter      Ethane        November 2020  
Navigator Atlas*
     2014        21,000     
Contract of affreightment
     Ethylene         
Navigator Europa*
     2014        21,000      Contract of affreightment      Ethylene         
Navigator Oberon*
     2014        21,000      Contract of affreightment      Ethylene         
Navigator Triton*
     2015        21,000      Spot market      Ethylene         
Navigator Umbrio*
     2015        21,000      Contract of affreightment      Ethylene         
Navigator Aurora
     2016        37,300      Time charter      Ethane        December 2026  
Navigator Eclipse
     2016        37,300      Time charter      Ethane        December 2020  
Navigator Nova
     2017        37,300      Time charter      Ethane        September 2023  
Navigator Prominence
     2017        37,300      Time charter      Ethane        December 2021  
Semi-refrigerated
              
Navigator Magellan
     1998        20,700      Time Charter      LPG        October 2020  
Navigator Aries
     2008        20,750      Time charter      LPG        October 2020  
Navigator Capricorn
     2008        20,750      Spot market      Propylene         
Navigator Gemini
     2009        20,750     
Time charter
     LPG        November 2020  
Navigator Pegasus
     2009        22,200      Spot market      Propylene         
Navigator Phoenix
     2009        22,200      Spot market      Butadiene         
Navigator Scorpio
     2009        20,750      Spot market      LPG         
Navigator Taurus
     2009        20,750      Spot market      LPG         
Navigator Virgo
     2009        20,750      Spot market      LPG         
Navigator Leo
     2011        20,600      Time charter      LPG        December 2023  
Navigator Libra
     2012        20,600      Time charter      LPG        December 2023  
Navigator Centauri
     2015        21,000      Spot market      LPG         
Navigator Ceres
     2015        21,000      Time charter      Propylene        November 2020  
Navigator Ceto
     2016        21,000      Spot market      Butadiene         
Navigator Copernico
     2016        21,000      Spot market      Butadiene         
Navigator Luga
     2017        22,000      Time charter      LPG        February 2022  
Navigator Yauza
     2017        22,000      Time charter      LPG        April 2022  
Fully-refrigerated
              
Navigator Glory
     2010        22,500      Time charter      Ammonia        June 2021  
Navigator Grace
     2010        22,500      Spot market              
Navigator Galaxy
     2011        22,500      Spot market      LPG         
Navigator Genesis
     2011        22,500      Time charter      LPG        July 2021  
Navigator Global
     2011        22,500      Time charter      LPG        November 2020  
Navigator Gusto
     2011        22,500      Time charter      LPG        December 2020  
Navigator Jorf
     2017        38,000      Time charter      Ammonia        August 2027  
 
*
denotes our nine owned vessels that operate within the Luna Pool
 
4

Table of Contents
Recent Developments
Ethylene Marine Export Terminal
The ethylene Marine Export Terminal is fully functional and the 30,000 ton storage tank, which will increase the terminal’s throughput capacity, is scheduled to be completed and in service by the end of this year. During the second quarter the terminal achieved a throughput in excess of 80,000 tons during the month of June. The committed offtake agreements, which have minimum terms of five years, account for approximately 95% of the one million ton annual nameplate throughput capacity.
The Company contributed $7.5 million to the Export Terminal Joint Venture during the second quarter of 2020 with an initial draw down on the Company’s Terminal Facility. In addition, since June 30, 2020 the Company has contributed a further $7.5 million to the Export Terminal Joint Venture, also drawn from the Terminal Facility. To date the Company has contributed $140.5 million of our expected share of the approximate $147.2 million capital cost of the Marine Export Terminal. The remaining contributions are scheduled to be contributed during 2021.
Second Quarter 2020 Trends
Toward the end of the first quarter of 2020, ethylene shipping slowed as Asian demand was materially impacted by
COVID-19
lockdowns and a general slowdown in the global economy. This trend continued into the second quarter. However, as Asian economies restarted during the latter half of the second quarter, so too did the demand for ethylene. An upsurge in U.S. ethylene export capacity from our Marine Export Terminal, drove an uptake in cargo liftings from the second half of May onwards, positively impacting handysize ethylene tonnage. June cargoes alone from the two export terminals in the U.S. totaled around 100,000 tons. July and August also kept pace as the ethylene price arbitrage remained open with charter rates and vessel utilization across the ethylene shipping fleet having improved markedly in the latter part of the second quarter.
Propylene has seen a busy second quarter. Asian pricing improved, increasing pricing arbitrage with the result that approximately 75,000 tons was fixed from the U.S. Gulf area on the spot market. Navigator’s vessels lifted approximately half of these tons. The Middle East also contributed export tons, with three handysize cargoes employed on the spot market, two of which were on Navigator vessels. European petrochemical producers continued to use naphtha as feedstock throughout this period which resulted in excess butadiene availability, due to low regional demand. These volumes were exported to Asia on handysize semi-refrigerated vessels adding
ton-miles
to the segment.
LPG freight rates were volatile during the quarter with the Very Large Gas Carrier 12 month time charter index falling by 36% from $1.1 million per calendar month (“pcm”) at the beginning of April to $720,000 pcm at the end of June and the Baltic spot index likewise dropping by 44% during this period. The handysize vessel 12 month charter assessment in comparison declined only 5% from $650,000 pcm to $620,000 pcm showing its resilience to volatility and maintaining a stable profile due to the vessels’ flexibility in trading in LPG, petrochemicals and ammonia markets.
The Luna Pool commenced operations in April and had 13 out of the 14 designated handysize ethylene vessels operating in the pool by the end of June. The remaining vessel has since been delivered into the pool. The market participants have welcomed additional ethylene vessels to our service offering. It enables us to improve our flexibility and better meet our customers’ needs especially during the
ramp-up
of the Marine Export Terminal when ship availability and logistical scheduling added value to the stakeholders.
In summary, the quarter started slow due to the negative impacts of
COVID-19
on the world economy but trading is gradually recovering as various government restrictions ease and consumption improves, bringing monthly utilization levels from mid 80% at the end of the first quarter to approximately 90% during the second quarter, in part due to the increased activity through the Marine Export Terminal.
COVID-19
The impact of
COVID-19
continues to affect global economic conditions that effect our business, financial condition and the results of our operations. The ultimate severity of
COVID-19
is uncertain and its future effects depend on the spread of the outbreak, the reactions of various national governments and the duration of the effects of the virus. Therefore, a full estimate of the likely impact cannot be made with certainty at this time.
Crew changes continue to be a challenge, consistent with most shipowners, although an increasing number of crew changes have successfully occurred during the quarter, with over 500 crew relieved, but still leaving approximately 50 with overdue leave. Drydocking vessels have resumed in various dockyards around the world and the Company has undertaken three drydocks during the second quarter, with a further eight being scheduled for the second half of the year.
 
5

Table of Contents
Financing
To increase liquidity, on August 4, 2020, the Company amended the Terminal Facility to allow an early
true-up
of $34.0 million, enabling those funds to be immediately drawn for general corporate purposes due to previous capital contributions for the Marine Export Terminal being paid from the Company’s own resources.
In addition, on September 17, 2020, the Company has entered into an agreement to new $210 million revolving credit facility to refinance one of its vessel loans, the effect of which will enable the Company to borrow an additional approximate $30 million for general corporate purposes.
The Company has refinanced its existing $100 million senior unsecured bonds that were scheduled to mature in February 2021, with new $100 million senior unsecured bonds. The new bonds will mature in September 2025 and have a fixed coupon of 8.00% per annum. The existing bonds were redeemed in full on September 15, 2020. See “Liquidity and Capital Resources—2017 Senior Unsecured Bonds” and “—2020 Senior Unsecured Bonds.”
 
6

Table of Contents
Results of Operations for the Three Months Ended June 30, 2019 Compared to the Three Months Ended June 30, 2020
The following table compares our operating results for the three months ended June 30, 2019 and 2020:
 
    
Three Months
Ended June 30,
2019
    
Three Months
Ended June 30,

2020
    
Percentage
Change
 
     (in thousands, except percentages)  
Operating revenue
   $ 73,586      $ 79,869        8.5
Operating revenue – Luna Pool collaborative arrangements
     —          2,596         
  
 
 
    
 
 
    
Total Operating Revenue
   $ 73,586      $ 82,465        12.1
Operating expenses:
        
Brokerage commissions
     1,233        1,305        5.8
Voyage expenses
     16,437        14,728        (10.4 %) 
Voyage expenses – Luna Pool collaborative arrangements
            3,043         
Vessel operating expenses
     27,448        26,493        (3.5 %) 
Depreciation and amortization
     18,913        19,151        1.3
General and administrative costs
     5,195        4,509        (13.2 %) 
Other Income
     —          (117      —    
  
 
 
    
 
 
    
Total operating expenses
   $ 69,226      $ 69,112        (0.2 %) 
  
 
 
    
 
 
    
Operating income
   $ 4,360      $ 13,353        206.3
Foreign currency exchange loss on senior secured bonds
     (768      (4,852      531.8
Unrealized gain on
non-designated
derivative instruments
     861      6,354        638.0
Interest expense
     (12,209      (11,128      (8.9 %) 
Interest income
     205        96        (53.2 %) 
  
 
 
    
 
 
    
(Loss) / income before taxes and share of result of equity accounted joint ventures
   $ (7,551    $ 3,823        —    
Income taxes
     (81      (168      107.4
Share of result of equity accounted joint ventures
     (101      (164      62.4
  
 
 
    
 
 
    
Net (loss) / income
   $  (7,733)      $ 3,491        —    
Net income attributable to
non-controlling
interest
            (483      —    
  
 
 
    
 
 
    
Net (loss) / income attributable to stockholders of Navigator Holdings Ltd.
   $ (7,733    $ 3,008        —    
  
 
 
    
 
 
    
Operating Revenue
. Operating revenue increased by $6.3 million or 8.5% to $79.9 million for the three months ended June 30, 2020, from $73.6 million for the three months ended June 30, 2019. This increase was principally due to:
 
   
an increase in operating revenue of approximately $4.8 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately $657,085 per vessel per calendar month ($21,606 per day) for the three months ended June 30, 2020, compared to an average of approximately $606,572 per vessel per calendar month ($19,940 per day) for the three months ended June 30, 2019.
 
   
an increase in operating revenue of approximately $2.3 million attributable to an increase in fleet utilization which rose to 88.3% for the three months ended June 30, 2020 from 85.2% for the three months ended June 30, 2019;
 
   
an increase in operating revenue of approximately $0.9 million attributable to an increase in vessel available days of 52 days or 1.5% for the three months ended June 30, 2020 compared to the three months to June 30, 2019, primarily due to a reduction in the number of dry dockings undertaken during the three months ended June 30, 2020 compared to the three months ended June 30, 2019 as a result of local lockdowns caused by
COVID-19;
and
 
   
a decrease in operating revenue of approximately $1.7 million primarily attributable to a decrease in pass through voyage costs, due to less bunker and canal transit costs for the three months ended June 30, 2020 compared to the three months ended June 30, 2019.
 
7

Table of Contents
The following table presents selected operating data for the three months ended June 30, 2019 and 2020, which we believe are useful in understanding the basis for movement in our operating revenue.
 
    
Three Months
Ended
June 30, 2019
   
Three Months
Ended
June 30, 2020
 
Fleet Data:
    
Weighted average number of owned vessels
     38.0       38.0  
Ownership days
     3,458       3,458  
Available days
     3,362       3,414  
Operating days
     2,866       3,015  
Fleet utilization
     85.2     88.3
Average daily time charter equivalent rate (*)
   $  19,940     $  21,606  
 
*
Non-GAAP
Financial Measure—Time charter equivalent:
Time charter equivalent (“TCE”) rate is a measure of the average daily revenue performance of a vessel. TCE is not calculated in accordance with U.S. GAAP. For all charters, we calculate TCE by dividing total operating revenues, less any voyage expenses, by the number of operating days for the relevant period. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate is a shipping industry performance measure used primarily to compare
period-to-period
changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies.
Reconciliation of Operating Revenue to TCE rate
The following table represents a reconciliation of operating revenue to TCE rate. Operating revenue is the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.
 
    
Three Months
Ended
June 30, 2019
    
Three Months
Ended
June 30, 2020
 
    
(in
 thousands,
 except
 operating
 days

and average
 daily
 time
 charter
 equivalent
 rate)
 
Fleet Data:
     
Operating revenue
   $  73,586      $  79,869  
Voyage expenses
     16,437        14,728  
  
 
 
    
 
 
 
Operating revenue less Voyage expenses
     57,149        65,141  
  
 
 
    
 
 
 
Operating days
     2,866        3,015  
Average daily time charter equivalent rate
   $ 19,940      $ 21,606  
Operating Revenue – Luna Pool collaborative arrangements
. Pool earnings are aggregated and then allocated (after deducting pool overheads and managers fees) to the Pool Participants in accordance with the Pooling Agreement. Operating revenue—Luna Pool collaborative arrangements was $2.6 million for the three months ended June 30, 2020, which represents our share of pool net revenues generated by the other participant’s vessels in the pool. The Luna Pool, which comprises nine of the Company’s ethylene vessels and five ethylene vessels from Pacific Gas Pte. Ltd., focuses on the transportation of ethylene and ethane to meet the growing demands of our customers. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no Operating Revenue—Luna Pool collaborative arrangements for the three months ended June 30, 2019.
Brokerage Commissions
. Brokerage commissions, which typically vary between 1.25% and 2.5% of operating revenue, increased by 5.8%, to $1.3 million for the three months ended June 30, 2020, from $1.2 million for the three months ended June 30, 2019, primarily as a result of an increase in the time charter element of operating revenue on which brokerage commissions are based.
Voyage Expenses.
 Voyage expenses decreased by 10.4% to $14.7 million for the three months ended June 30, 2020, from $16.4 million for the three months ended June 30, 2019. This was primarily due to a decrease in oil prices following the onset of the
COVID-19
pandemic and consequently a reduction in the price of bunkers used by our vessels. The number of voyage charter days increased by approximately 6.0% during the three months ended June 30, 2020 as compared to the three months ended June 30, 2019 but the reduction in bunker prices more than offset the increased voyage charter costs that would be attributable to this rise. These decreased voyage costs are pass through costs, corresponding to a decrease in operating revenue of the same amount.
 
8

Table of Contents
Voyage Expenses – Luna Pool collaborative arrangements
. Voyage expenses—Luna Pool collaborative arrangements was $3.0 million for the three months ended June 30, 2020, which represents the other participant’s share of pool net revenues generated by our vessels in the pool. The net effect after deducting operating revenue – Luna Pool collaborative arrangements was that our vessels contributed $0.4 million to other the participant in the Luna Pool. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no Voyage Expenses—Luna Pool collaborative arrangements for the three months ended June 30, 2019.
Vessel Operating Expenses
. Vessel operating expenses decreased by 3.5% to $26.5 million for the three months ended June 30, 2020, from $27.4 million for the three months ended June 30, 2019. Average daily vessel operating expenses decreased by $276 per vessel per day, or 3.5%, to $7,662 per vessel per day for the three months ended June 30, 2020, compared to $7,938 per vessel per day for the three months ended June 30, 2019. This was primarily due to a general underspend in vessel operating expenses across the fleet as costs were tightly controlled, as well as some costs being deferred to subsequent quarters as a result of
COVID-19,
during the three months ended June 30, 2020 compared to the three months ended June 30, 2019.
Depreciation and Amortization
. Depreciation and amortization expense increased by 1.3% to $19.2 million for the three months ended June 30, 2020, from $18.9 million for the three months ended June 30, 2019. Depreciation and amortization expense included amortization of capitalized drydocking costs of $2.0 million and $1.8 million for the three months ended June 30, 2020 and 2019 respectively.
General and Administrative Costs
. General and administrative costs decreased by $0.7 million or 13.2% to $4.5 million for the three months ended June 30, 2020, from $5.2 million for the three months ended June 30, 2019. The decrease in general and administrative costs was primarily due to a gain on the revaluation of an Indonesian Rupiah bank account as of June 30, 2020 regaining $1.0 million since March 31, 2020 following a strengthening of the Indonesian Rupiah relative to the U.S. dollar.
Other Income
. Other income was $0.1 million for the three months ended June 30, 2020 and consists of management fees for commercial and administrative activities performed by the Company for the Luna Pool. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no other income for the quarter ended June 30, 2019.
Non-operating
Results
Foreign Currency Exchange Loss on Senior Secured Bonds
. Exchange gains and losses relate to
non-cash
movements on our 600 million Norwegian Kroner 2018 Bonds which are translated to U.S. Dollar at the prevailing exchange rate as of June 30, 2020. The foreign currency exchange loss of $4.9 million for the three months ended June 30, 2020 was as a result of the Norwegian Kroner strengthening against the U.S. dollar, being NOK 9.7 to USD 1.0 as of June 30, 2020 compared to NOK 10.5 to USD 1.0 as of March 31, 2020.
Unrealized Gain on
Non-designated
Derivative Instruments
. The unrealized gain on
non-designated
derivative instruments of $6.4 million for the three months ended June 30, 2020 relates to the fair value movement in our cross-currency interest rate swap and is primarily due to the strengthening of the Norwegian Kroner against the U.S. dollar. The unrealized gain on this swap for the three months ended June 30, 2019 was $0.8 million.
Interest Expense
. Interest expense decreased by $1.1 million, or 8.9%, to $11.1 million for the three months ended June 30, 2020, from $12.2 million for the three months ended June 30, 2019. This is primarily as a result of a reduction in
3-month
US LIBOR interest rates.
Income Taxes
. Income taxes related to taxes on our subsidiaries incorporated in the United Kingdom, Poland and Singapore and our consolidated variable interest entity (“VIE”), incorporated in Malta. For the three months ended June 30, 2020, we had a tax charge of $168,000 compared to taxes of $81,000 for the three months ended June 30, 2019.
Share of result of equity accounted joint ventures
. The share of result of the Company’s 50% ownership in the Export Terminal Joint Venture was a loss of $0.2 million for the three months ended June 30, 2020, primarily as a result of initial low volumes through the Marine Export Terminal earlier in the quarter, prior to the commencement of the throughput agreements.
Non-Controlling
Interest.
We have entered into a sale and leaseback arrangement with a wholly-owned special purpose vehicle (“lessor SPV”) of a financial institution. While we do not hold any equity investments in this lessor SPV, we have determined that we are the primary beneficiary of this entity and accordingly, we are required to consolidate this VIE into our financial results. Thus, the income attributable to the financial institution of $0.5 million is presented as the
non-controlling
interest in our financial results.
 
9

Table of Contents
Results of Operations for the Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2020
The following table compares our operating results for the six months ended June 30, 2019 and 2020:
 
    
Six Months

Ended June 30,
2019
    
Six Months
Ended June 30,

2020
    
Percentage
Change
 
     (in thousands, except percentages)  
Operating revenue
   $ 149,689      $ 161,126        7.6
Operating revenue – Luna Pool collaborative arrangements
            2,596         
  
 
 
    
 
 
    
Total operating revenue
   $ 149,689      $ 163,722        9.4
Operating expenses:
        
Brokerage commissions
     2,542        2,560        0.7
Voyage expenses
     29,794        32,272        8.3
Voyage expenses – Luna Pool collaborative arrangements
            3,043         
Vessel operating expenses
     56,922        53,899        (5.3 %) 
Depreciation and amortization
     37,861        38,361        1.3
General and administrative costs
     9,997        11,017        10.2
Other Income
            (117       
  
 
 
    
 
 
    
Total operating expenses
   $  137,116      $  141,035        2.9
  
 
 
    
 
 
    
Operating income
   $ 12,573      $ 22,687        80.4
Foreign currency exchange (loss)/gain on senior secured bonds
     (952      6,565        n/a  
Unrealized gain/(loss) on
non-designated
derivative instruments
     1,645      (7,607      n/a  
Interest expense
     (24,362      (22,668      (7.0 %) 
Interest income
     420        315        (25.0 %) 
  
 
 
    
 
 
    
(Loss)/ income before taxes and share of result of equity accounted joint ventures
   $ (10,676    $ (708      (93.4 %) 
Income taxes
     (174      (336      93.1
Share of result of equity accounted joint ventures
     (140      (3,205       
  
 
 
    
 
 
    
Net loss
   $ (10,990    $ (4,249      (61.3 %) 
Net income attributable to
non-controlling
interest
            (905       
  
 
 
    
 
 
    
Net loss attributable to stockholders of Navigator Holdings Ltd.
   $ (10,990    $ (5,154      (53.1 %) 
  
 
 
    
 
 
    
Operating Revenue
. Operating revenue, net of address commission, increased by $11.4 million or 7.6% to $161.1 million for the six months ended June 30, 2020, from $149.7 million for the six months ended June 30, 2019. This increase was principally due to:
 
   
an increase in operating revenue of approximately $5.3 million attributable to an increase in fleet utilization which rose to 88.7% for the six months ended June 30, 2020 from 85.0% for the six months ended June 30, 2019;
 
   
an increase in operating revenue of approximately $2.1 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately $645,670 per vessel per calendar month ($21,228 per day) for the six months ended June 30, 2020, compared to an average of approximately $634,622 per vessel per calendar month ($20,864 per day) for the six months ended June 30, 2019.
 
   
an increase in operating revenue of approximately $1.5 million attributable to an increase in vessel available days of 85 days or 1.3% for the six months ended June 30, 2020, due to an increase in the number of ownership days for the leap year and a reduction in the number of dry dockings undertaken during the six months ended June 30, 2020 compared to the six months ended June 30, 2019 as a result of local lockdowns caused by
COVID-19;
and
 
   
an increase in operating revenue of approximately $2.5 million primarily attributable to an increase in pass through voyage costs, due to additional bunker and canal transit costs for the six months ended June 30, 2020 compared to the six months ended June 30, 2019.
 
10

Table of Contents
The following table presents selected operating data for the six months ended June 30, 2019 and 2020, which we believe are useful in understanding the basis for movement in our operating revenue.
 
    
Six Months
Ended
June 30, 2019
   
Six Months
Ended
June 30, 2020
 
Fleet Data:
    
Weighted average number of owned vessels
     38.0       38.0  
Ownership days
     6,878       6,916  
Available days
     6,761       6,846  
Operating days
     5,746       6,070  
Fleet utilization
     85.0     88.7
Average daily time charter equivalent rate (*)
   $  20,864     $  21,228  
 
*
Non-GAAP
Financial Measure—Time charter equivalent:
Time charter equivalent (“TCE”) rate is a measure of the average daily revenue performance of a vessel. TCE is not calculated in accordance with U.S. GAAP. For all charters, we calculate TCE by dividing total operating revenues, less any voyage expenses, by the number of operating days for the relevant period. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate is a shipping industry performance measure used primarily to compare
period-to-period
changes in a company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies.
Reconciliation of Operating Revenue to TCE rate
The following table represents a reconciliation of operating revenue to TCE rate. Operating revenue is the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.
 
    
Six Months
Ended
June 30, 2019
    
Six Months
Ended
June 30, 2020
 
    
(in
 thousands,
 except
 operating
 days

and average
 daily
 time
 charter
 equivalent
 rate)
 
Fleet Data:
     
Operating revenue
   $  149,689      $  161,126  
Voyage expenses
     29,794        32,272  
  
 
 
    
 
 
 
Operating revenue less Voyage expenses
     119,895        128,854  
  
 
 
    
 
 
 
Operating days
     5,746        6,070  
Average daily time charter equivalent rate
   $ 20,864      $ 21,228  
Operating Revenue – Luna Pool collaborative arrangements
. Pool earnings are aggregated and then allocated (after deducting pool overheads and managers fees) to the Pool Participants in accordance with the Pooling Agreement. Operating revenue—Luna Pool collaborative arrangements was $2.6 million for the six months ended June 30, 2020, which represents our share of pool net revenues generated by the other participant’s vessels in the pool. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no Operating Revenue – Luna Pool collaborative arrangements for the six months ended June 30, 2019.
Brokerage Commissions
. Brokerage commissions, which typically vary between 1.25% and 2.5% of operating revenue, increased by 0.7%, to $2.6 million for the six months ended June 30, 2020, from $2.5 million for the six months ended June 30, 2019. The increase was primarily due to an increase in time charter operating revenue for the six months ended June 30, 2020, compared to the six months ended June 30, 2019, offset by a decrease in voyage charter revenue over the same period. Time charter hire attracts a lower percentage commission than that of voyage charters.
 
11

Table of Contents
Voyage Expenses.
 Voyage expenses increased by 8.3% to $32.3 million for the six months ended June 30, 2020, from $29.8 million for the six months ended June 30, 2019. This was primarily due to the cost of low sulfur fuel in accordance with new International Maritime Organization regulations which came into force from January 1, 2020 requiring vessels to use fuel with a range of no more than 0.1% to 0.5% sulfur emissions depending on their area of trading and an increase in canal transits performed by our vessels during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019. Bunker prices have reduced during the six months ended June 30, 2020 due to the drop in the oil price as a result of the
COVID-19
pandemic but there is still an effect from the higher prices seen in the three months ended March 31, 2020 on bunker costs within voyage expenses.    These increased voyage costs are pass through costs, corresponding to an increase in operating revenue of the same amount.
Voyage Expenses – Luna Pool collaborative arrangements
. Voyage expenses from Luna Pool collaborative arrangements was $3.0 million for the six months ended June 30, 2020, which represents the other participant’s share of pool net revenues generated by our vessels in the pool. The net effect after deducting Operating revenue – Luna Pool collaborative arrangements was that our vessels contributed $0.4 million to other participants in the Luna Pool. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no Voyage Expenses – Luna Pool collaborative arrangements for the six months ended June 30, 2019.
Vessel Operating Expenses
. Vessel operating expenses decreased by 5.3% to $53.9 million for the six months ended June 30, 2020, from $56.9 million for the six months ended June 30, 2019. Average daily vessel operating expenses decreased by $483 per vessel per day, or 5.8%, to $7,793 per vessel per day for the six months ended June 30, 2020, compared to $8,276 per vessel per day for the six months ended June 30, 2019. This was primarily due to a general underspend in vessel operating expenses across the fleet during the six months ended June 30, 2020 compared to the six months ended June 30, 2019 as well as unexpected costs incurred for repairs and maintenance for the six months ended June 30, 2019 which have not reoccurred for the six months ended June 30, 2020.
Depreciation and Amortization
. Depreciation and amortization expense increased by 1.3% to $38.4 million for the six months ended June 30, 2020, from $37.9 million for the six months ended June 30, 2019. Depreciation and amortization expense included amortization of capitalized drydocking costs of $4.1 million and $3.7 million for the six months ended June 30, 2020 and 2019 respectively.
General and Administrative Costs
. General and administrative costs increased by $1.0 million or 10.2% to $11.0 million for the six months ended June 30, 2020, from $10.0 million for the six months ended June 30, 2019. This increase in general and administrative costs was primarily due to additional insurance costs of $0.4 million for the now operational Marine Export Terminal and the write off of previously capitalized costs of $0.5 million relating to the same Marine Export Terminal.
Other Income
. Other income was $0.1 million for the six months ended June 30, 2020 and consists of management fees for commercial and administrative activities performed by the Company for the Luna Pool. The Luna Pool became operational during the quarter ended June 30, 2020 and consequently there was no other income for the six months ended June 30, 2019.
Non-operating
Results
Foreign Currency Exchange (Loss)/Gain on Senior Secured Bonds
. Exchange gains and losses relate to
non-cash
movements on our 600 million Norwegian Kroner 2018 Bonds which are translated to U.S. Dollars at the prevailing exchange rate as of June 30, 2020. The foreign currency exchange gain of $6.6 million for the six months ended June 30, 2020 was as a result of the Norwegian Kroner weakening against the U.S. dollar, being NOK 9.7 to USD 1.0 as of June 30, 2020 compared to NOK 8.8 to USD 1.0 as of December 31, 2019.
Unrealized Gain/(Loss) on
Non-designated
Derivative Instruments
. The unrealized loss on
non-designated
derivative instruments of $7.6 million for the six months ended June 30, 2020 relates to the fair value movement in our cross-currency interest rate swap and is primarily due to the weakening of the Norwegian Kroner against the U.S. dollar. The unrealized gain on this swap for the six months ended June 30, 2019 was $1.6 million.
Interest Expense
. Interest expense decreased by $1.7 million, or 7.0%, to $22.7 million for the six months ended June 30, 2020, from $24.4 million for the six months ended June 30, 2019. This is primarily as a result of a reduction in
3-month
US LIBOR interest rates, $1.0 million of which was offset by a lower amount of interest capitalization on the Marine Export Terminal for the six months ended June 30, 2020 compared to the six months ended June 30, 2019.
Income Taxes
. Income taxes related to taxes on our subsidiaries incorporated in the United Kingdom, Poland and Singapore and our consolidated variable interest entity (“VIE”), incorporated in Malta. For the six months ended June 30, 2020, we had a tax charge of $336,000 compared to taxes of $174,000 for the six months ended June 30, 2019.
Share of result of equity accounted joint ventures
. The share of result of the Company’s 50% ownership in the Export Terminal Joint Venture was a loss of $3.2 million for the six months ended June 30, 2020 compared to a loss of $0.1 million for the six months ended June 30, 2019, primarily as a result of initial losses following the terminal becoming operational in December 2019. However volumes of product through the Marine Export Terminal have increased during the second quarter of 2020.
 
12

Table of Contents
Non-Controlling
Interest.
We have entered into a sale and leaseback arrangement with a wholly-owned special purpose vehicle (“lessor SPV”) of a financial institution. While we do not hold any equity investments in this lessor SPV, we have determined that we are the primary beneficiary of this entity and accordingly, we are required to consolidate this VIE into our financial results. Thus, the income attributable to the financial institution of $0.9 million is presented as the
non-controlling
interest in our financial results.
Liquidity and Capital Resources
Liquidity and Cash Needs
Our primary sources of funds are cash and cash equivalents, cash from operations, undrawn bank borrowings and proceeds from bond issuances. As of June 30, 2020, we had cash, cash equivalents and restricted cash of $61.3 million. Our secured term loan facilities and revolving credit facilities require that the borrowers have liquidity (including undrawn available lines of credit with a maturity exceeding 12 months) of no less than (i) $25.0 million or $35.0 million, or (ii) 5% of Net Debt or total debt as applicable, whichever is greater, which was $43.1 million, as of June 30, 2020.
Amounts included in restricted cash represent those required to be set aside as collateral by a contractual agreement with a banking institution for the liability on the cross-currency interest rate swap agreement at the reporting date. Please read Note 9 (Derivative Instruments Accounted for at Fair Value) and Note 14 (Cash, Cash Equivalents and Restricted Cash) to the unaudited condensed consolidated financial statements. If the Norwegian Kroner weakens relative to the U.S. Dollar beyond a certain threshold, we are required to place cash collateral with our swap providers, which will be released over the life of the swap or on maturity. In the event the weakness of the Norwegian Kroner relative to the U.S. Dollar is significant, the cash collateral requirements could adversely affect our liquidity and financial position. As of June 30, 2020, the collateral amount held with the swap provider was $8.2 million (December 31, 2019, $1.3 million).
Our primary uses of funds are capital contributions for the investment in the Export Terminal Joint Venture, drydocking expenditures, voyage expenses, vessel operating expenses, general and administrative costs, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, financing expenses and repayment of bonds and bank loans. In addition to operating expenses, our medium-term and long-term liquidity needs relate to debt repayments, potential future newbuildings or acquisitions and the development of the Marine Export Terminal in our Export Terminal Joint Venture. We are required to maintain certain minimum liquidity amounts in order to comply with our various debt instruments. Please see “—Secured Term Loan Facilities and Revolving Credit Facilities”, “—2017 Senior Unsecured Bonds”, “—2018 Senior Secured Bonds” and “—2020 Senior Unsecured Bonds” below.
On August 4, 2020, we amended the Terminal Facility, enabling the immediate drawdown of $34.0 million for general corporate purposes rather than waiting for a
true-up
on practical completion of the Marine Export Terminal later in 2020. It is expected the Company will draw down the $34.0 million in October 2020. In addition, on September 17, 2020, the Company has entered into a new $210 million revolving credit facility to refinance one of its vessel loan facilities which will enable the Company to borrow approximately an additional $30 million for general corporate purposes. We provide cash collateral as security against unrealized losses on our cross-currency interest rate swap and since June 30, 2020 the strengthening of the NOK against the U.S. dollar has resulted in the requisite cash collateral reducing to $5.6 million as of October 15, 2020, releasing $2.6 million from the $8.2 million held at June 30, 2020. As of June 30, 2020, we had contributed to the Export Terminal Joint Venture $133.0 million of our expected share of the approximate $147.2 million capital cost for the construction of the Marine Export Terminal. Since June 30, 2020 the Company has contributed an additional $7.5 million to the Export Terminal Joint Venture by drawing down on the Terminal Facility. We expect to contribute the remaining capital contributions during early 2021.
On September 10, 2020, the Company issued new senior unsecured $100 million 2020 Bonds for the purpose of refinancing its existing senior unsecured $100 million 2017 Bonds, which were scheduled to mature in February 2021. The 2020 Bonds will mature in September 2025 and have a fixed coupon of 8.00% per annum. The 2017 Bonds were redeemed in full on September 15, 2020.
A discussion of the Company’s going concern as of the date of issuance of the consolidated financial statements for the year ended December 31, 2019 can be found in the Company’s consolidated financial statements included in our 2019 Annual Report. As the Company has increased its liquidity headroom by enabling the immediate drawdown of $34.0 million for general corporate purposes from the Terminal Facility and the availability of an additional $30 million from the refinancing of one of its vessel loan facilities; as well as having refinanced its $100 million unsecured bonds which were scheduled to mature in February 2021, management believes that there is no longer substantial doubt that the Company will be able to pay its obligations as they fall due.
Capital Expenditures
Liquefied gas transportation is a capital-intensive business, requiring significant investment to maintain an efficient fleet and to stay in regulatory compliance.
 
13

Table of Contents
We currently have no newbuildings on order. However, we may acquire additional vessels as part of our growth strategy, place newbuilding orders, or we may invest further in terminal infrastructures, such as expanding our existing Marine Export Terminal or other import or export terminals.
Cash Flows
The following table summarizes our cash, cash equivalents and restricted cash provided by (used in) operating, financing and investing activities for the six months ended June 30, 2019 and 2020:
 
    
Six Months Ended
June 30, 2019
    
Six Months Ended
June 30, 2020
 
    
(in thousands)
 
Net cash provided by operating activities
   $ 16,737      $ 32,736  
Net cash used in investing activities
     (52,948      (7,892
Net cash provided by/(used in) financing activities
     11,981        (29,722
  
 
 
    
 
 
 
Net decrease in cash, cash equivalents and restricted cash
     (24,230      (4,878
Operating Cash Flows
. Net cash provided by operating activities for the six months ended June 30, 2020 increased to $32.7 million, from $16.7 million for the six months ended June 30, 2019, an increase of $16.0 million. This increase was primarily due to reduced losses and changes in working capital movements for the six months ended June 30, 2020, compared to the six months ended June 30, 2020, 2019.
Net cash flow from operating activities depends upon charter rates attainable, fleet utilization, fluctuations in working capital balances, repairs and maintenance activity, amount and duration of drydocks, changes in interest rates and foreign currency rates.
We are required to drydock each vessel once every five years until it reaches 15 years of age, after which we are required to drydock the applicable vessel every two and
one-half
to three years. Drydocking each vessel takes approximately
20-30
days. Drydocking days generally include approximately
5-10
days of travel time to and from the drydocking shipyard and approximately
15-20
days of actual drydocking time. Three of our vessels were drydocked during the six months ended June 30, 2020, with eight further vessels originally scheduled for drydocking during the remainder of 2020. However, drydockings for some of our vessels may be delayed to 2021 due to the dockyard constraints as a result of
COVID-19.
We spend significant amounts of funds for scheduled drydocking (including the cost of classification society surveys) of each of our vessels. As our vessels age and our fleet expands, our drydocking expenses will increase. We estimate the current cost of the five-year drydocking of one of our vessels is approximately $1.0 million, the
ten-year
drydocking cost is approximately $1.3 million, and the 15 year and 17 year drydocking costs are approximately $1.5 million each. Ongoing costs for compliance with environmental regulations are primarily included as part of our drydocking, such as the requirement to install ballast water treatment plants, and classification society surveys with a balance included as a component of our operating expenses.
Investing Cash Flows
. Net cash used in investing activities of $7.9 million for the six months ended June 30, 2020 primarily consisted of an increase of $7.5 million in our investment in the Marine Export Terminal Joint Venture and our investment of $1.0 million in ballast water treatment systems which are being retrofitted on our vessels during drydock to comply with the requirements of the Ballast Water Management Convention, offset by insurance recoveries of $0.6 million.
Net cash used in investing activities of $52.9 million for the six months ended June 30, 2019 primarily consisted of our investment in our Export Terminal Joint Venture of $51.5 million
Financing Cash Flows
. Net cash used in financing activities of $29.7 million for the six months ended June 30, 2020, relates to regular quarterly repayments on our secured term loan facilities of $33.3 million and an extemporaneous repayment of $3.7 million on the Navigator Aurora Facility held within our consolidated lessor VIE, offset by a drawdown of $7.5 million on the Terminal Facility in April 2020.
Net cash provided by financing activities of $12.0 million for the six months ended June 30, relates to the drawing down of $107.0 million on the March 2019 Secured Term Loan and $20.0 million from the October 2016 secured term loan and revolving credit facility, partially offset by a repayment of the January 2015 secured term loan of $75.6 million, $35.1 million relating to regular quarterly loan repayments and issuance costs for each of the March 2019 Secured Term Loan, Terminal Facility and 2018 Bonds totaling $4.3 million.
 
14

Table of Contents
Terminal Facility
General
. On March 29, 2019, Navigator Ethylene Terminals LLC (“Marine Terminal Borrower”), our wholly-owned subsidiary, entered into a Credit Agreement (the “Terminal Facility”) with ING Capital LLC and SG Americas Securities, LLC for a maximum principal amount of $75.0 million, to be used first for the payment of project costs relating to our Marine Export Terminal, as summarized in the table below. On August 4, 2020, the Terminal Facility was amended to enable the immediate drawdown of $34.0 million for general corporate purposes. For additional information regarding the Terminal Facility, please read “Item 5—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Terminal Facility” in our 2019 Annual Report.
The table below summarizes the Terminal Facility as of June 30, 2020:
 
Facility agreement date
  
Original
Facility
amount
    
Principal
Amount
outstanding
    
Undrawn
Amount
at
June 30,
2020
    
Interest rate
    
Loan
Maturity date
 
    
(in millions)
               
March 2019
   $  75.0        7.5        61.5        US LIBOR + 250 to 300 BPS        December 2025  
As of June 30, 2020, based on the committed throughput agreements for the Marine Export Terminal, a total of $69.0 million was available under the Terminal Facility, $7.5 million of which was drawn as of June 30, 2020, a further $7.5 million was drawn on July 30, 2020, $34.0 million is available for immediate drawdown for generate corporate purposes and $20.0 million is available for future capital contributions or/and subject to the satisfaction of certain conditions.
Financial Covenants.
Under the Terminal Facility, the Marine Terminal Borrower must maintain a minimum debt service coverage ratio (as defined in the Terminal Facility) for the prior four calendar fiscal quarters (or shorter period of time if data for the prior four fiscal quarters is not available) of no less than 1.10 to 1.00 from the beginning of the second full fiscal quarter of the term loan, expected to be June 2021.
Restrictive Covenants
.
Following completion of the Marine Export Terminal, the Marine Terminal Borrower can only pay dividends if the Marine Terminal Borrower satisfies certain customary conditions to paying a dividend, including maintaining a debt service coverage ratio for the immediately preceding four consecutive fiscal quarters and the projected immediately succeeding four consecutive fiscal quarters of not less than 1.20 to 1.00 and no default or event of default has occurred or is continuing. The Terminal Facility also limits the Marine Terminal Borrower from, among other things, incurring indebtedness or entering into mergers and divestitures. The Terminal Facility also contains general covenants that will require the Marine Terminal Borrower to vote its interest in the Marine Terminal Joint Venture to cause the Marine Terminal Joint Venture to maintain adequate insurance coverage, complete the Marine Export Terminal and maintain its property (but only to the extent the Marine Terminal Borrower has the power under the organizational documents of the Marine Terminal Joint Venture to so cause such actions).
Secured Term Loan Facilities and Revolving Credit Facilities
General
. Navigator Gas L.L.C., our wholly-owned subsidiary, and certain of our vessel-owning subsidiaries have entered into various secured term loan facilities and revolving credit facilities as summarized in the table below. For additional information regarding our secured term loan facilities and revolving credit facilities, please read “Item 5—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities” in our 2019 Annual Report.
The table below summarizes our secured term loan and revolving credit facilities as of June 30, 2020:
 
Facility agreement date
  
Original
Facility
amount
    
Principal
Amount
outstanding
    
Interest rate
    
Loan
Maturity date
 
    
(in millions)
               
January 2015*
     278.1        105.6        US LIBOR + 270 BPS       
March 2022-April 2023
 
December 2015
     290.0        180.2        US LIBOR + 210 BPS        December 2022  
October 2016
     220.0        122.8        US LIBOR + 260 BPS        November 2023  
June 2017
     160.8        111.3        US LIBOR + 230 BPS        June 2023  
March 2019
     107.0        95.6        US LIBOR + 240 BPS        March 2025  
October 2019**
     69.1        64.5        US LIBOR + 185 BPS        October 2026  
  
 
 
    
 
 
       
Total
   $  1,125.0      $  680.0        
 
15

Table of Contents
*
The January 2015 facility tranches mature over a range of dates, from March 2022 to April 2023.
**
The October 2019 loan facility relates to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. (Please read Note 15 (Variable Interest Entities) to our unaudited condensed consolidated financial statements).
Financial Covenants
.
The secured term loan facilities and revolving credit facilities contain financial covenants requiring the borrowers, among other things, to ensure that:
 
   
the borrowers have liquidity (including undrawn available lines of credit with a maturity exceeding 12 months) of no less than (i) $25.0 million or $35.0 million, or (ii) 5% of Net Debt or total debt, as applicable, whichever is greater;
 
   
the ratio of EBITDA to Interest Expense (each as defined in the applicable secured term loan facility and revolving credit facility or as amended), on a trailing four quarter basis, is no less than 2.00 to 1.00, until September 30, 2020 and no less than 2.50 to 1.00 or 3.00 to 1.00 thereafter; and
 
   
the borrower must maintain a minimum ratio of shareholder equity to total assets of 30%;
Restrictive Covenants
.
The secured facilities provide that the borrowers may not declare or pay dividends to shareholders out of operating revenues generated by the vessels securing the indebtedness until December 31, 2020 or, thereafter, if an event of default has occurred or is continuing. The secured term loan facilities and revolving credit facilities also limit the borrowers from, among other things, incurring indebtedness or entering into mergers and divestitures. The secured facilities also contain general covenants that will require the borrowers to maintain adequate insurance coverage and to maintain their vessels. In addition, the secured term loan facilities include customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and
non-compliance
with security documents.
The borrowers are also required to deliver semi-annual compliance certificates, which include valuations of the vessels securing the applicable facility from an independent ship broker. Upon delivery of the valuation, if the market value of the collateral vessels is less than 125% to 135% of the outstanding indebtedness under the applicable facilities, the borrowers must either provide additional collateral or repay any amount in excess of 125% to 135% of the market value of the collateral vessels, as applicable. This covenant is measured semi-annually on June 30 and December 31. As of June 30, 2020, we had an aggregate excess of $407.8 million, between 24% and 47% above the levels required by these covenants, in addition to four additional vessels that are unsecured.
Other than as stated, our compliance with the financial covenants listed above is measured as of the end of each fiscal quarter. As of June 30, 2020, we were in compliance with all covenants under the secured term loan facilities and revolving credit facilities.
2017 Senior Unsecured Bonds
General
. On February 10, 2017, we issued senior unsecured bonds in an aggregate principal amount of $100.0 million with Nordic Trustee AS as the bond trustee (the “2017 Bonds”). The net proceeds of the issuance of the 2017 Bonds, together with cash on hand, were used to redeem in full previously issued bonds. The 2017 Bonds were governed by Norwegian law and listed on the Nordic ABM which is operated and organized by Oslo Børs ASA. Please read Note 8 (Senior Unsecured Bond) to the unaudited condensed consolidated financial statements.
Maturity.
The 2017 Bonds were due to mature in full on February 10, 2021 and would become repayable on that date. However in September 2020 the Company redeemed the 2017 Bonds in full at between 100% and 100.5% of par, using proceeds from the 2020 Bonds (as defined below).
Interest
. Interest on the 2017 Bonds was payable at a fixed rate of 7.75% per annum, calculated on a
360-day
year basis. Interest was payable semi-annually on August 10 and February 10 of each year. Interest was paid up to the redemption date of the 2017 Bonds.
Presentation
. The aggregate principal amount of $100.0 million of these bonds is presented in the balance sheet as
non-current
liabilities at June 30, 2020, notwithstanding they were redeemed in September 2020, as the new 2020 bonds were raised specifically to refinance the current liability.
 
16

Table of Contents
2020 Senior Unsecured Bonds
General
. On September 10, 2020, we issued senior unsecured bonds in an aggregate principal amount of $100.0 million with Nordic Trustee AS as the bond trustee (the “2020 Bonds”). The net proceeds of the issuance of the 2020 Bonds were used to redeem in full all of our outstanding 2017 Bonds. The 2020 Bonds are governed by Norwegian law and listed on the Nordic ABM which is operated and organized by Oslo Børs ASA.
Interest
. Interest on the 2020 Bonds is payable at a fixed rate of 8.0% per annum, calculated on a
360-day
year basis. Interest is payable semi-annually on March 10 and September 10 of each year.
Optional Redemption
. We may redeem the 2020 Bonds, in whole or in part at any time. Any 2020 Bonds redeemed; up until September 9, 2023 will be priced at the aggregate of the net present value of 103.2% of par and interest payable up to September 9, 2023; from September 10, 2023 up until September 9, 2024, are redeemable at 103.2% of par, from September 10, 2024 up until March 9, 2025, are redeemable at 101.6% of par, and from March 10 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest.
Maturity.
The 2020 Bonds mature in full on September 10, 2025 and become repayable on that date.
Additionally, upon the occurrence of a “Change of Control Event” (as defined in the bond agreement for the 2020 Bonds, (the “2020 Bond Agreement”)), the holders of 2020 Bonds have an option to require us to repay such holders’ outstanding principal amount of 2020 Bonds at 101% of par, plus accrued interest.
Financial Covenants
. The 2020 Bond Agreement contains financial covenants requiring us, among other things, to ensure that:
 
   
we and our subsidiaries maintain a minimum liquidity of no less than $35.0 million; and
 
   
we and our subsidiaries maintain an Equity Ratio (as defined in the 2020 Bond Agreement) of at least 30%.
Our compliance with the covenants listed above is measured as of the end of each fiscal quarter with effect from September 10, 2020.
Restrictive Covenants
. The 2020 Bonds provide that we may declare or pay dividends to shareholders provided the Company maintains a minimum liquidity of $60.0 million unless an event of default has occurred and is continuing. The 2020 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2020 Bond Agreement includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution.
2018 Senior Secured Bonds
General
. On November 2, 2018, we issued senior secured bonds in an aggregate principal amount of 600 million Norwegian Kroner (“NOK”) (approximately $71.7 million) with Nordic Trustee AS, as bond trustee and security agent (the “2018 Bonds”). The net proceeds are being used to partially finance our portion of the capital cost for the construction of the Marine Export Terminal. The 2018 Bonds are governed by Norwegian law and are listed on the Nordic ABM which is operated and organized by Oslo Børs ASA. Please read Note 7 (Senior Secured Bond) to the unaudited condensed consolidated financial statements.
Security
. The 2018 Bonds are secured by four of the Company’s ethylene capable vessels.
Interest
. Interest on the 2018 Bonds is payable quarterly at a rate equal to the
3-month
NIBOR plus 6.0% per annum, calculated on a
360-day
year basis. We have entered into a cross-currency interest rate swap agreement whereby interest is payable at a rate equal to the
3-month
LIBOR plus 6.608% throughout the life of the bond. Please read Note 9 (Derivative Instruments Accounted for at Fair Value) to the unaudited condensed consolidated financial statements.
Maturity.
The 2018 Bonds will mature in full on November 2, 2023.
Optional Redemption
. We may redeem the 2018 Bonds, in whole or in part, at any time beginning on or after November 2, 2021. Any 2018 Bonds redeemed from November 2, 2021 until November 1, 2022, are redeemable at 102.4% of par, from November 2, 2022 until May 1, 2023, are redeemable at 101.5% of par, and from May 2, 2023 to the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest.
Additionally, upon the occurrence of a “Change of Control Event” (as defined in the bond agreement governing the 2018 Bonds (the “2018 Bond Agreement”)), the holders of 2018 Bonds have an option to require us to repay such holders’ outstanding principal amount of 2018 Bonds at 101% of par, plus accrued interest.
 
17

Table of Contents
Financial Covenants
. The 2018 Bond Agreement contains financial covenants requiring us, among other things, to ensure that:
 
   
we and our subsidiaries maintain a minimum liquidity of no less than $25.0 million; and
 
   
we and our subsidiaries maintain an Equity Ratio of at least 30%.
Our compliance with the covenants listed above is measured as of the end of each fiscal quarter. As of June 30, 2020, we were in compliance with all covenants under the 2018 Bonds.
Restrictive Covenants.
The 2018 Bond Agreement provides that we may declare dividends from January 1, 2020, payable at the earliest from January 1, 2021, so long as such dividends do not exceed 50% of our cumulative consolidated net profits after taxes since January 1, 2020. The 2018 Bond Agreement also limits us and our subsidiaries from, among other things, entering into mergers and divestitures, engaging in transactions with affiliates or incurring any additional liens which would have a material adverse effect. In addition, the 2018 Bond Agreement includes a put option exercisable following a change in control and customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, false representation and warranty, a cross-default to other indebtedness, the occurrence of a material adverse effect, or our insolvency or dissolution.
Lessor VIE Debt
In October 2019, we entered into a sale and leaseback transaction to refinance one of our vessels,
Navigator Aurora
¸ with a lessor, OCY Aurora Ltd, a special purpose vehicle (“SPV”) and wholly owned
subsidiary of Ocean Yield Malta Limited. The SPV was determined to be a variable interest entity
(“VIE”). We are deemed to be the primary beneficiary of the VIE, and as such consolidate the SPV into our results. The loan described below under “—Navigator Aurora Facility” relates to
the VIE. Although we have no control over the funding arrangements of this entity, we are required to
consolidate this loan facility into our financial results. Please read Note 15 (Variable Interest Entities) to our unaudited
consolidated financial statements for further information.
Upon the occurrence of a “Change of Control Event” (as defined in the sale and leaseback agreement), the lessor has an option to require us to repurchase
Navigator Aurora
at 103% of the outstanding lease amount, plus costs and expenses directly attributable to the termination of the lessor’s financing arrangements, such as break costs for swap arrangements.
Navigator Aurora Facility
In October 2019, the SPV, which owns the vessel
Navigator Aurora
, entered into an unsecured financing agreement for $69.1 million, the “Navigator Aurora Facility”. The Navigator Aurora Facility is a seven year unsecured loan provided by Ocean Yield Malta Limited, the parent of OCY Aurora Ltd., The Navigator Aurora Facility is subordinated to a further bank loan where OCY Aurora Ltd is the guarantor and
Navigator Aurora
is pledged as security. The Navigator Aurora Facility bears interest at three month U.S. LIBOR plus a margin of 185 basis points and is repayable by the SPV with a balloon payment on maturity. During the six months ended June 30, 2020 extemporaneous repayments of $3.7 million were made and as of June 30, 2020, there was $64.5 million in borrowings outstanding under the Navigator Aurora Facility (December 31, 2019, $68.2 million.)
Tabular Disclosure of Contractual Obligations
The contractual obligations schedule set forth below summarizes our contractual obligations as of June 30, 2020:
 
    
Remainder
of
2020
    
2021
    
2022
    
2023
    
2024
    
Thereafter
    
Total
 
           
(in thousands)
 
Marine Export Terminal capital contributions
1
   $ 7,500      $ 6,700      $ —      $ —      $ —      $ —      $ 14,200  
Secured term loan facilities and revolving credit facilities
2
     33,267        74,034        259,053        193,078        9,150        54,387        622,969  
2017 Bonds
3
     —          100,000        —          —          —          —          100,000  
2018 Bonds
     —          —          —          71,697        —          —          71,697  
Office operating leases
4
     730        1,459        242        —          —          —          2,431  
Navigator Aurora Facility
5
     —          —          —          —          —          64,483        64,483  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total contractual obligations
   $  41,497      $  182,193      $  259,295      $  264,775      $  9,150      $  118,870      $  875,780  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
18

Table of Contents
1
 
On July 30, 2020, the Company made a capital contribution of $7.5 million, reducing the anticipated remaining contributions from $14.2 million to $6.7 million, expected to be contributed in 2021 for our portion of the capital cost for the construction of the Marine Export Terminal.
2
 
On August 4, 2020, the Terminal Facility was amended to allow the Company an early
true-up
of $34.0 million, enabling those funds to be immediately drawn for general corporate purposes due to previous capital contributions for the Marine Export Terminal being paid from the Company’s own resources. In addition, on September 17, 2020, the Company entered into a new $210.0 million revolving credit facility to refinance one of its vessel loans enabling the Company to borrow approximately an additional $30 million for general corporate purposes.
3
 
The Company refinanced its 2017 Bonds that were scheduled to mature in February 2021, with the new 2020 Bonds. They are therefore presented as a
non-current
liability in the balance sheet. The new bonds will mature in September 2025 and have a fixed coupon of 8.00% per annum. The 2017 Bonds were redeemed in full in September 2020. See “Liquidity and Capital Resources—2017 Senior Unsecured Bonds” and “—2020 Senior Unsecured Bonds.”
4
 
The Company occupies office space in London with a lease that commenced in January 2017 for a period of 10 years with a mutual break option in January 2022, which is the fifth anniversary from the lease commencement date. This break option is recognized in the table above but has not been included as part of the
right-of-use
asset and lease liability associated with the lease. Please read Note 17 (Operating Lease Liabilities) to our unaudited condensed consolidated financial statements.
5
 
The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 15 (Variable Interest Entities) to our unaudited condensed consolidated financial statements.
As part of our growth strategy, we will continue to consider strategic opportunities, including the acquisition of additional vessels. We may choose to pursue such opportunities through internal growth or joint ventures or business acquisitions. We intend to finance any future acquisitions through various sources of capital, including credit facilities, debt borrowings, sale and leaseback of vessels and the issuance of additional shares of common stock.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of our material accounting policies, please read Note 2 (Summary of Significant Accounting Policies) to our audited historical consolidated financial statements included in our 2019 Annual Report.
 
19

Table of Contents
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates and foreign currency fluctuations, as well as inflation. We use interest rate swaps to manage interest rate risks but do not use these financial instruments for trading or speculative purposes.
Interest Rate Risk
The Company and certain of our vessel-owning subsidiaries are parties to secured term loan and revolving credit facilities that bear interest at an interest rate of US LIBOR plus 185 to 270 basis points. A variation in LIBOR of 100 basis points would result in a variation of $6.9 million in annual interest paid on our indebtedness outstanding at June 30, 2020, under the secured term loan and revolving credit facilities.
Foreign Currency Exchange Rate Risk
Our primary economic environment is the international shipping market. This market utilizes the U.S. Dollar as its functional currency. Consequently, virtually all of our revenues are in U.S. Dollars. Our expenses, however, are in the currency invoiced by each supplier and we remit funds in the various currencies invoiced. We incur some vessel operating expenses and general and administrative costs in foreign currencies, primarily the Euro, Pound Sterling and Polish Zloty; and there is a risk that currency fluctuations could have an adverse effect on the value of our cash flows. We believe that any adverse effect on these costs would not be material and we have not entered into any derivative contracts to mitigate our exposure to foreign currency exchange rate risk.
We have entered into a cross currency interest rate swap to mitigate the risk of currency movements for interest payments during the five-year tenor of the 2018 Bonds and for the principal repayment at maturity in November 2023. Please read Note 9 (Derivative Instruments Accounted for at Fair Value) to the unaudited condensed consolidated financial statements. However, if the Norwegian Kroner weakens relative to the U.S. Dollar beyond a certain threshold, we are required to place cash collateral with our swap providers for the liability on the cross-currency interest rate swap at the reporting date. At June 30, 2020 we had placed $8.2 million as cash collateral. In the event the weakening of the Norwegian Kroner relative to the U.S. Dollar is significant, the cash collateral requirements could adversely affect our liquidity and financial position.
Inflation
Certain of our operating expenses, including crewing, insurance and drydocking costs, are subject to fluctuations as a result of market forces. Increases in bunker costs could have a material effect on our future operations if the number and duration of our voyage charters or COAs increases. In the case of the 38 vessels owned as of June 30, 2020, 16 were employed on time charter and as such it is the charterers who pay for the bunkers on those vessels. If our vessels are employed under voyage charters or COAs, freight rates are generally sensitive to the price of bunkers. However, a sharp rise in bunker prices may have a temporary negative effect on our results since freight rates generally adjust only after prices settle at a higher level.
Credit Risk
We may be exposed to credit risks in relation to vessel employment and at times may have multiple vessels employed by one charterer. We consider and evaluate concentration of credit risk continuously and perform ongoing evaluations of these charterers for credit risk. At June 30, 2020, no more than six of our vessels were employed by the same charterer.
We invest our surplus funds with reputable financial institutions, with original maturities of no more than three months, in order to provide the Company with flexibility to meet all requirements for working capital and for capital investments.
 
20

Table of Contents
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Report on Form
6-K
for the quarter ended June 30, 2020 contains certain forward-looking statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this report. In some cases, you can identify the forward-looking statements by the use of words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue,” “scheduled,” or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this report. These risks and uncertainties include but are not limited to:
 
   
global epidemics or other health crises such as the recent outbreak of coronavirus
COVID-19,
including its impact on our business;
 
   
future operating or financial results;
 
   
pending acquisitions, business strategy and expected capital spending;
 
   
operating expenses, availability of crew, number of
off-hire
days, drydocking requirements and insurance costs;
 
   
fluctuations in currencies and interest rates;
 
   
general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;
 
   
our ability to continue to comply with all our debt covenants;
 
   
our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;
 
   
estimated future capital expenditures needed to preserve our capital base;
 
   
our expectations about the availability of vessels to purchase, the time that it may take to construct new vessels, or the useful lives of our vessels;
 
   
our continued ability to enter into long-term, fixed-rate time charters with our customers;
 
   
the availability and cost of low sulfur fuel oil compliant with the International Maritime Organization sulfur emission limit reductions, generally referred to as “IMO 2020,” which took effect January 1, 2020;
 
   
our vessels engaging in ship to ship transfers of LPG or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge;
 
   
changes in governmental rules and regulations or actions taken by regulatory authorities;
 
   
potential liability from future litigation;
 
   
our expectations relating to the payment of dividends;
 
   
our ability to successfully remediate material weaknesses in our internal control over financial reporting and our disclosure controls and procedures;
 
   
our expectation regarding providing
in-house
technical management for certain vessels in our fleet and our success in providing such
in-house
technical management;
 
   
our expectations regarding the completion of construction and financing of the Marine Export Terminal and the financial success of the Marine Export Terminal and our related Export Terminal Joint Venture; and
 
   
other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.
All forward-looking statements included in this Report on Form
6-K
are made only as of the date of this report. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.
 
21

Table of Contents
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Balance Sheets
(Unaudited)
 
     December 31, 2019     June 30, 2020  
     (in thousands, except share data)  
Assets
    
Current assets
    
Cash, cash equivalents and restricted cash
   $ 66,130     $ 61,252  
Accounts receivable, net of allowance for credit losses of $228 (December 31, 2019: nil)
     23,462       21,945  
Accrued income
     6,280       9,725  
Prepaid expenses and other current assets
     17,670       20,719  
Bunkers and lubricant oils
     9,645       9,155  
Insurance Receivable
     2,939       2,950  
  
 
 
   
 
 
 
Total current assets
     126,126       125,746  
Non-current
assets
    
Vessels, net
     1,609,527       1,574,908  
Property, plant and equipment, net
     1,159       886  
Investment in equity accounted joint ventures
     130,660       135,310  
Right-of-use
asset for operating leases
     6,781       6,249  
Prepaid expenses and other
non-current
assets
     —         3,702  
  
 
 
   
 
 
 
Total
non-current
assets
     1,748,127       1,721,055  
  
 
 
   
 
 
 
Total assets
   $  1,874,253     $  1,846,801  
  
 
 
   
 
 
 
Liabilities and stockholders’ equity
    
Current liabilities
    
Current portion of secured term loan facilities, net of deferred financing costs
   $ 64,703     $ 72,107  
Current portion of operating lease liabilities
     1,178       1,157  
Accounts payable
     10,472       10,994  
Accrued expenses and other liabilities
     14,124       15,515  
Accrued interest
     4,424       4,087  
Deferred income
     14,154       16,212  
Amounts due to related parties
     451       1,137  
  
 
 
   
 
 
 
Total current liabilities
     109,506       121,209  
  
 
 
   
 
 
 
Non-current
liabilities
    
Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs
     578,676       546,254  
Senior secured bond, net of deferred financing costs
     67,503       60,936  
Senior unsecured bond, net of deferred financing costs
     98,513       99,394  
Derivative liabilities
     5,769       13,377  
Operating lease liabilities, net of current portion
     6,329       5,353  
Amounts due to related parties
     68,055       64,328  
  
 
 
   
 
 
 
Total
non-current
liabilities
     824,845       789,642  
  
 
 
   
 
 
 
Total Liabilities
     934,351       910,851  
Commitments and contingencies (see note 13)
    
Stockholders’ equity
    
Common stock—$.01 par value per share; 400,000,000 shares authorized; 55,905,294 shares issued and outstanding, (December 31, 2019: 55,826,644)
     558       559  
Additional
paid-in
capital
     592,010       592,548  
Accumulated other comprehensive loss
     (331     (422
Retained earnings
     347,566       342,261  
  
 
 
   
 
 
 
Total Navigator Holdings Ltd. stockholders’ equity
     939,803       934,946  
Non-controlling
interest
     99       1,004  
  
 
 
   
 
 
 
Total equity
     939,902       935,950  
  
 
 
   
 
 
 
Total liabilities and stockholders’ equity
   $ 1,874,253     $ 1,846,801  
  
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements
 
F-1

Table of Contents
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Statements of Operations
(Unaudited)
 
    
Three months ended
June 30,
   
Six months ended
June 30,
 
     2019     2020     2019     2020  
     (in thousands except share and per share data)  
Revenues
        
Operating revenue
   $ 73,586     $ 79,869     $ 149,689     $ 161,126  
Operating revenue- Luna Pool collaborative arrangement
     —         2,596       —         2,596  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating revenues
     73,586     82,465       149,689     163,722  
  
 
 
   
 
 
   
 
 
   
 
 
 
Expenses
        
Brokerage commissions
     1,233       1,305       2,542       2,560  
Voyage expenses
     16,437       14,728       29,794       32,272  
Voyage expenses – Luna Pool collaborative arrangement
     —         3,043       —         3,043  
Vessel operating expenses
     27,448       26,493       56,922       53,899  
Depreciation and amortization
     18,913       19,151       37,861       38,361  
General and administrative costs
     5,195       4,509       9,997       11,017  
Other Income
     —         (117     —         (117
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
     69,226       69,112       137,116       141,035  
  
 
 
   
 
 
   
 
 
   
 
 
 
Operating income
     4,360       13,353       12,573       22,687  
Other income / (expense)
        
Foreign currency exchange (loss) /gain on senior secured bonds
     (768     (4,852     (952     6,565  
Unrealized gain / (loss) on
non-designated
derivative instruments
     861       6,354       1,645       (7,607
Interest expense
     (12,209     (11,128     (24,362     (22,668
Interest income
     205       96       420       315  
  
 
 
   
 
 
   
 
 
   
 
 
 
(Loss) / income before income taxes and share of result of equity accounted joint ventures
     (7,551     3,823       (10,676     (708
Income taxes
     (81     (168     (174     (336
Share of result of equity accounted joint ventures
     (101     (164     (140     (3,205
  
 
 
   
 
 
   
 
 
   
 
 
 
Net (loss) / income
     (7,733     3,491       (10,990     (4,249
Net income attributable to
non-controlling
interest
     —         (483     —         (905
  
 
 
   
 
 
   
 
 
   
 
 
 
Net (loss) / income attributable to stockholders of Navigator Holdings Ltd.
   $ (7,733   $ 3,008     $ (10,990   $ (5,154
  
 
 
   
 
 
   
 
 
   
 
 
 
(Loss) / earnings per share attributable to stockholders of Navigator Holdings Ltd.:
        
Basic and diluted:
   $ (0.14   $ 0.05     $ (0.20   $ (0.09
Weighted average number of shares outstanding:
        
Basic:
     55,832,069       55,905,600       55,756,897       55,871,893  
Diluted:
     55,832,069       56,253,778       55,756,897       55,871,893  
  
 
 
   
 
 
   
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements
 
F-2

Table of Contents
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 
    
Three months
ended
June 30,
   
Six months
ended
June, 30
 
     2019     2020     2019     2020  
     (in thousands)  
Net (loss)/ income
   $ (7,733   $  3,491     $ (10,990   $ (4,249
Other Comprehensive Income / (loss):
          
Foreign currency translation loss
     18       (11     (30     (91
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Comprehensive (loss)/ income:
   $ (7,715   $ 3,480     $ (11,020   $ (4,340
Total Comprehensive Income / (loss) attributable to:
          
Stockholders of Navigator Holdings Ltd.:
   $ (7,715   $ 2,997     $ (11,020   $ (5,245
Non-controlling
interest
     —         483       —         905  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total Comprehensive Income / (loss):
   $ (7,715   $ 3,480     $ (11,020   $ (4,340
  
 
 
   
 
 
   
 
 
   
 
 
 
See accompanying notes to condensed consolidated financial statements
 
F-3

Table of Contents
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
For the six months ended June 30, 2019:
 
            (In thousands, except share data)  
     Common stock                                   
     Number of
shares
(Note 11)
     Amount 0.01
par value
(Note 11)
     Additional
Paid-in Capital

(Note 12)
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
   
Non-Controlling

Interest
     Total  
Balance as of December 31, 2018
     55,657,631      $  557      $  590,508      $ (363   $ 364,408     $  —        $  955,110  
Adjustment to equity for the adoption of the new leasing standard
     —          —          —          —         (136     —          (136
Restricted shares issued March 20, 2019
     174,438        1        —          —         —         —          1  
Net loss
     —          —          —          —         (10,990     —          (10,990
Foreign currency translation
     —          —          —          (30     —         —          (30
Share-based compensation plan
     —          —          746        —         —         —          746  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
Balance as of June 30, 2019
     55,832,069      $ 558      $ 591,254      $ (393   $  353,282     $ —        $ 944,701  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
For the three months ended June 30, 2019:
 
            (In thousands, except share data)  
     Common stock                                   
     Number of
shares
(Note 11)
     Amount 0.01
par value
(Note 11)
     Additional
Paid-in Capital

(Note 12)
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
   
Non-Controlling

Interest
     Total  
Balance as of March 31, 2019
     55,832,069      $  558      $  590,853      $ (411   $  361,015     $  —        $  952,015  
Net loss
     —          —          —          —         (7,733     —          (7,733
Foreign currency translation
     —          —          —          18       —         —          18  
Share-based compensation plan
     —          —          401        —         —         —          401  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
Balance as of June 30, 2019
     55,832,069      $ 558      $ 591,254      $ (393   $ 353,282     $ —        $ 944,701  
  
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
For the six months ended June 30, 2020:
 
           (In thousands, except share data)  
     Common stock                                   
     Number of
shares
(Note 11)
    Amount 0.01
par value
(Note 11)
     Additional
Paid-in Capital

(Note 12)
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
   
Non-Controlling

Interest
     Total  
Balance as of December 31, 2019
     55,826,644     $ 558      $ 592,010      $ (331   $ 347,566     $ 99      $ 939,902  
Adjustment to equity for the adoption of the new credit losses standard
     —         —          —          —         (151     —          (151
Restricted shares issued March 19, 2020
     80,794       1        —          —         —         —          1  
Restricted shares cancelled April 14, 2020
     (2,144     —          —          —         —         —          —    
Net (loss)/ income
     —         —          —          —         (5,154     905        (4,249
Foreign currency translation
     —         —          —          (91     —         —          (91
Share-based compensation plan
     —         —          538        —         —         —          538  
  
 
 
   
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
Balance as of June 30, 2020
     55,905,294     $  559      $  592,548      $ (422   $  342,261     $  1,004      $  935,950  
  
 
 
   
 
 
    
 
 
    
 
 
   
 
 
   
 
 
    
 
 
 
For the three months ended June 30, 2020:
 
           (In thousands, except share data)  
     Common stock                                    
     Number of
shares
(Note 11)
    Amount 0.01
par value
(Note 11)
     Additional
Paid-in Capital

(Note 12)
     Accumulated
Other
Comprehensive
Income (Loss)
    Retained
Earnings
    
Non-Controlling

Interest
     Total  
Balance as of March 31, 2020
     55,907,438     $ 559      $ 592,361      $ (411   $ 339,253      $ 521      $ 932,283  
Restricted shares cancelled April 14, 2020
     (2,144     —          —          —         —          —          —    
Net income
     —         —          —          —         3,008        483        3,491  
Foreign currency translation
     —         —          —          (11     —          —          (11
Share-based compensation plan
     —         —          187        —         —          —          187