also as a means of maintaining relationships, obtaining market information and continuing a market presence in this market segment. Navios has adopted a strategy of entering into COAs to carry freight into known loading areas, such as the US Gulf and the Gulf of St. Lawrence, where subsequent spot or voyage charters can be obtained.

Navios may enter into FFAs as economic hedges relating to identifiable ship and/or cargo positions and as economic hedges of transactions that Navios expects to carry out in the normal course of its shipping business. By using FFAs, Navios manages the financial risk associated with fluctuating market conditions. The effectiveness of a hedging relationship is assessed at its inception and then throughout the period of its designation as a hedge. If an FFA qualifies for hedge accounting, any gain or loss on the FFA is first recognized when measuring the profit or loss of the related transaction. For FFAs that qualify for hedge accounting the changes in fair values of the effective portion representing unrealized gains or losses are recorded in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting ($3.5 million and $4.0 million loss for the three and nine month periods ended September 30, 2006, respectively) are recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ will be reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassification to earnings will extend until December 31, 2007, depending on the period or periods during which the hedged forecasted transactions will affect earnings and commenced in the third quarter of 2006. The amount of losses included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ as of September 30, 2006, which is expected to be reclassified to earnings during the next twelve months is estimated to be $10.9 million. For the three and nine month periods ended September 30, 2006, the gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ that had been reclassified to earnings amounted to $1.0 million. At December 31, 2005, none of the open FFAs qualified for hedge accounting and, accordingly, all unrealized gains or losses were recorded in the statement of operations.

FFAs cover periods generally ranging from one month to one year and are based on time charter rates or freight rates on specific quoted routes. FFAs are executed either over-the-counter, between two parties, or either through NOS ASA, a Norwegian clearing house, or the London clearing house (‘‘LCH’’). FFAs are settled in cash monthly based on publicly quoted indices. NOS ASA and LCH requires both base and margin collaterals. Certain portions of these collateral funds may be restricted at any given time, as determined by NOS ASA and LCH. On September 30, 2006 and December 31, 2005, Navios restricted cash with NOS ASA was $7.0 million and $1.0 million, respectively and with LCH was $5.8 million and $0.0 million, respectively.

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

Statement of Operations Breakdown by Segment

Navios reports financial information and evaluates its operations by charter revenues and not by vessel type, length of ship employment, customers or type of charter. Navios does not have discrete financial information to evaluate the operating results for each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, Navios reviews operating results solely by revenue per day and operating results of the owned and chartered-in fleet and, thus, the Company has determined that it has two reportable segments, Vessel Operations and Port Terminal. The reportable segments reflect the internal organization of Navios and strategic businesses that offer different products and services. The Vessel Operations business consists of transportation and handling of bulk cargoes through ownership, operation, and trading of vessels, contracts of affreightment and FFAs. The Port Terminal business consists of operating a port and transfer station terminal. Navios measures segment performance based on net income. For further segment

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information, please see the footnotes to the September 30, 2006 unaudited consolidated financial statements and the Navios’ 2005 annual report filed on Form 20-F with the Securities Exchange Commission (‘‘SEC’’).

Recent Accounting Pronouncements

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, ‘‘Considering the Effect of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements’’ (‘‘SAB No. 108’’). SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of materiality assessment. SAB No. 108 establishes a dual approach that requires quantification of financial statements errors based on both the roll-over method and the iron curtain method regarding the effects of each of the Company’s balance sheets and statement of operations and the related financial statement disclosures. SAB No. 108 permits existing public companies to record the cumulative effect of initially applying this approach in the first year ending after November 15, 2006, by recording the necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustments recorded to the opening balance of retained earnings. The Company does not expect the adoption of SAB No. 108 to have an effect on its financial statements.

In September 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 158 (SFAS 158) ‘‘Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106 and 132(R)’’. SFAS 158 improves financial reporting by requiring an employer to recognize the overfunded and underfunded status of a defined benefit retirement plan (other than multiemployer plan) as an asset or liability in its statement of financial position and recognize changes in the funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statements of financial position, with limited exceptions. The adoption of this Accounting Standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company for the fiscal year ending on December 31, 2006.

In September 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 157 (SFAS 157) ‘‘Fair Value Measurement’’. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. SFAS 157 is effective for for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier applications is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The provisions of SFAS 157 should be applied prospectively as of the beginning of the fiscal year in which it is initially applied except for certain cases where it should be applied retrospectively. The adoption of this Accounting Standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company for the fiscal year beginning on January 1, 2008.

In March 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 156 (SFAS 156) ‘‘Accounting for Servicing of Financial Assets – an amendment of FASB Statements No. 140’’. SFAS 156 amends SFAS 140 requiring that all separately recognized servicing assets and servicing liabilities be measured at fair value, if practicable. SFAS 156 also permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities. SFAS 156 is effective for the first fiscal year that begins after September 15, 2006. The adoption of this Accounting Standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company for the fiscal year beginning on January 1, 2007.

Critical Accounting Policies

The Navios’ consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or US GAAP. The preparation of these

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

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. Navios describes below what it believes is its additional most critical accounting policies that involve a high degree of judgment and the methods of their application not yet discussed in its 2005 annual report. For a description of all of Navios' significant accounting policies, see Note 2 to the Consolidated Financial Statements included in Navios’ 2005 annual report filed on Form 20-F with the Securities Exchange Commission.

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

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

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

Pursuant to SFAS 133, the Company records its derivative financial instruments and hedges as economic hedges except for those qualifying for hedge accounting. Gains or losses of instruments qualifying for hedge accounting are reflected under ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in stockholders’ equity while those instruments that do not meet the criteria for hedge accounting are reflected in the statement of operations. For FFAs that qualify for hedge accounting the changes in fair values of the effective portion representing unrealized gains or losses are recorded in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting ($3.5 million and $4.0 million loss for the three and nine month periods ended September 30, 2006, respectively) are recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ will be reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassification to earnings will extend until December 31, 2007, depending on the period or periods during which the hedged forecasted transactions will affect earnings and commenced in the third quarter of 2006. The amount of losses included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ as of September 30, 2006, which is expected to be reclassified to earnings during the next twelve months is estimated to be $10.9 million. For the three and nine month periods ended September 30, 2006, $1.0 million of gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ had been reclassified to earnings. At December 31, 2005, none of the FFAs, foreign exchange contracts or interest rate swaps qualified for hedge accounting and, accordingly, all unrealized gains or losses were recorded in the statement of operations.

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For the Three Month Period ended September 30, 2006 compared to the combined Three Month Period ended September 30, 2005

The following table presents consolidated revenue and expense information for the three month period ended September 30, 2006 and combined revenue and expense information for the three month period ended September 30, 2005. This information was derived from the unaudited consolidated revenue and expense accounts of Navios for the third quarter of 2006 (successor), the period from August 26, 2005 to September 30, 2005 (successor, as such period is restated in the Report on Form 6-K, dated March 22, 2006, to provide for a non-cash adjustment that related to purchase price allocations) and the period from July 1, 2005 to August 25, 2005 (predecessor). The combined revenue and expense information for the third quarter of 2005 is being presented solely to assist comparisons across the three month financial periods. The successor period in the 2005 combined statement of operations includes the effects of the fair value purchase accounting adjustments.

The successor and predecessor periods in the combined revenue and expense accounts are not comparable as the successor period revenue and expense accounts include increases in certain charges. The principal increases relate to amortization of intangible assets and increased depreciation, all of which arise as a result of recognizing an increase in the fair value of the assets and liabilities acquired in connection with the acquisition of Navios, and increased interest charges arising as a consequence of additional indebtedness to finance the acquisition.

The combined information is a Non-US GAAP financial measure and should not be used in isolation or substitution of the Predecessor and Successor results.

			Successor						Combined						Successor						Predecessor
			Three Months ended September 30, 2006						Three Months ended September 30, 2005						August 26, 2005 To September 30, 2005 (as restated)						July 1, 2005 to August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)
Revenue				$	51,397					$	51,758					$	20,454					$	31,304
Gain on Forward Freight Agreements					16,036						2,770						(898	)					3,668
Time charter, voyage and port terminal expenses					(21,803	)					(26,052	)					(10,179	)					(15,873	)
Direct vessel expenses					(5,630	)					(2,154	)					(858	)					(1,296	)
General and administrative expenses					(3,870	)					(4,082	)					(866	)					(3,216	)
Depreciation and amortization					(9,119	)					(4,737	)					(3,847	)					(890	)
Interest income					1,485						731						242						489
Interest expense and finance cost, net					(10,648	)					(3,857	)					(3,170	)					(687	)
Other income					(891	)					949						368						581
Other expense					(303	)					(499	)					(337	)					(162	)
Income before equity in net earnings of affiliate companies					16,654						14,827						909						13,918
Equity in net Earnings of Affiliated Companies					230						276						128						148
Net income				$	16,884					$	15,103					$	1,037					$	14,066

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Set forth below are selected historical and statistical data for Navios for the combined company (2005) and as successor (2006), that the Company believes may be useful in better understanding the Company's financial position and results of operations.

			Three month period ended September 30,
			2006						2005
FLEET DATA
Available days(*)					2,633						2,075
Operating days					2,631						2,073
Fleet utilization					99.9	%					99.9	%
AVERAGE DAILY RESULTS
Time Charter Equivalents (including FFAs)				$	21,643					$	21,947
Time Charter Equivalents (excluding FFAs)				$	15,932					$	20,613

(*)	Navios has currently fixed out (i.e. arranged charters for) 100.0%, 73.3% and 37.0% of its 2006, 2007 and 2008 available days, respectively.

During the three month period ended September 30, 2006, there were 558 more available days as compared to the same period of 2005. This was due to the increase in the number of owned vessels resulting in 906 additional days. This increase, however, was mitigated by the redelivery of chartered-in vessels following the expiration of their charters, reducing the available days by 348 days. Navios can increase or decrease its fleet's size by chartering-in vessels for long or short-term periods (less than one year). Fleet size and the corresponding ‘‘available days’’ will be decreased if charters are not renewed or replaced.

The average Time Charter Equivalent (TCE) rate excluding FFAs for the three month period ended September 30, 2006 was $15,932 per day, $4,681 per day lower than the rate achieved in the same period of 2005. This was primarily due to the decline in the freight market resulting in lower charter-out daily rates in the third quarter of 2006 than those achieved in the third quarter of 2005.

Revenue:    Revenue slightly decreased to $51.4 million for the three month period ended September 30, 2006 as compared to the $51.8 million for the same period of 2005. Navios earns revenue from both owned and chartered-in vessels, contracts of affreightment and the port terminal operations. Revenues from vessel operations decreased by approximately $0.9 million or 1.8% to $48.2 million for the three month period ended September 30, 2006 from $49.1 million for the same period of 2005. This decrease is mainly attributable to lower rates prevailing in the market at the time when the vessels were fixed under charter-out contracts in 2006 as compared to the rates prevailing in 2005, which was mitigated by the increase in available days as discussed above.

Revenue from the port terminal was approximately $3.2 million in the third quarter of 2006 as compared to $2.7 million during the same period in 2005. This increase was due to the port terminal throughput volume increase by approximately 16.9% to 777,000 tons for the three month period ended September 30, 2006 from 664,600 tons for the same period in 2005.

Gains and Losses on FFAs:    Income from FFAs increased by $13.2 million to a gain of $16.0 million during the three month period ended September 30, 2006 as compared to $2.8 million gain for the same period in 2005. The changes in fair values of the effective portion of FFAs qualifying for hedge accounting, representing unrealized losses at September 30, 2006, of $6.5 million, were recorded in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the remaining FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting of $4.0 million loss, were recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss) are reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transactions affect earnings. On this basis approximately $1.0 million have been reclassified to earnings during the three month period ended September 30, 2006. The FFAs market

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has experienced significant volatility in the past few years and, accordingly, recognition of the changes in the fair value of FFAs has, and can, cause significant volatility in earnings. The extent of the impact on earnings is dependent on two factors: market conditions and Navios' net position in the market. Market conditions were volatile in both periods. As an indicator of volatility, selected Baltic Exchange Panamax time charter average rates are shown below.

			Baltic Exchange’s Panamax Time Charter Average Index
August 3, 2005			$10,162(a)
September 22, 2005			$23,766(b)
July 13, 2006			$21,585(c)
September 18, 2006			$34,572(d)

(a)	Low for Q3-2005

(b)	High for Q3-2005

(c)	Low for Q3-2006

(d)	High for Q3-2006

Time Charter, Voyage and Port Terminal Expense:    Time charter and voyage expenses decreased by $4.3 million or 16.5% to $21.8 million for the three month period ended September 30, 2006 as compared to $26.1 million for same period in 2005. This was primarily due to the redelivery of higher cost chartered-in vessels and the exercise of purchase options that resulted in the expansion of the owned fleet which, was mitigated by the increase in the average charter-in daily rate from $9,169 per day in the third quarter of 2005 to $9,421 per day for the same period of 2006.

Direct Vessel Expenses:    Direct vessel expenses for operation of the owned fleet increased by $3.5 million to $5.6 million for the three month period ended September 30, 2006 as compared to $2.1 million for the same period in 2005. Direct vessel expenses include crew costs, provisions, deck and engine stores, lubricating oils, insurance premiums and maintenance and repairs. The increase resulted primarily from additional costs related to normal usage due to the increase of the owned fleet by ten vessels during the period since Navios’ acquisition.

General and Administrative Expenses:    General and administrative expenses decreased by $0.2 million to $3.9 million or 4.9% for the three month period ended September 30, 2006 as compared to $4.1 million for the same period of 2005. However, excluding the transaction costs of approximately $1.8 million incurred in connection with the sale of Navios during the third quarter of 2005, general and administrative expenses show an increase of 72% in the third quarter of 2006 as compared to the same period of 2005. The increase is mainly attributable to (a) increase in payroll and related costs, (b) increase in professional, legal, and audit fees and traveling due to the additional costs incurred by Navios as a public company, (c) increased office expenses as a result of the Company’s move to the new offices and other expenses related to being a public company.

Depreciation and Amortization:    Depreciation and amortization are not directly comparable for the consolidated three month period ended September 30, 2006 and the combined three month period ended September 30, 2005. As part of the acquisition of Navios by ISE on August 25, 2005, the dry bulk fleet and port terminal facilities were recorded at their fair market values. The adjusted fixed assets values are being depreciated over the remaining economic useful lives of the individual assets. Amortization for the period from August 26, 2005 onward also includes amortization of the intangible assets recorded on August 25, 2005 as a result of the acquisition of Navios by ISE, with the exception of vessel purchase options and goodwill which are not amortized. For the three month period ended September 30, 2006 the increase in depreciation is attributable to the acquisition of ten vessels which had a $3.4 million effect, with the remaining being the effect of the accounting treatment discussed above. See further discussion of Navios' amortization policy under Liquidity and Capital Resources.

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Net Interest Expense and Income:    Interest expense from August 26, 2005 onward increased when compared to periods prior to this date due to the new debt incurred on August 25, 2005 and restructured on December 21, 2005. A substantial portion of the new debt was used to finance the acquisition of Navios by ISE and the acquisition of an additional ten vessels. As a result, interest expense for the three month period ended September 30, 2006 is not directly comparable to the same period of 2005. Interest income increased by $0.8 million to $1.5 million for the three month period ended September 30, 2006 as compared to $0.7 million for the same period of 2005. Although the average cash balances decreased from $132.7 million in the third quarter of 2005 to $129.3 million in the same period of 2006, interest was increased as a result of the higher weighted average interest rate which increased to 5.2% in the third quarter of 2006 from 3.3% in the same period of 2005.

Other Income: Other income decreased by $1.8 million to a loss of $0.9 million for the three month period ended September 30, 2006. This decrease is mainly due to unfavorable marked to market losses realized on the interest rate swaps as the interest rates decreased on both the short and long term.

Net Other Expense:  Other expense decreased by $0.2 million to $0.3 million for the three month period ended September 30, 2006. This change is mainly due to less realized foreign exchange losses from the settlement of payables raised in currencies other than US dollars during the period.

For the Nine Month Period ended September 30, 2006 compared to the combined Nine Month Period ended September 30, 2005

The following table presents consolidated revenue and expense information for the nine month periods ended September 30, 2006 and the combined revenue and expense information for the nine month period ended September 30, 2005. This information was derived from the unaudited consolidated revenue and expense accounts of Navios for the nine month period ended September 30, 2006 (successor), the period from August 26, 2005 to September 30, 2005 (successor, as such period is restated in the Report on Form 6-K, dated March 22, 2006, to provide for a non-cash adjustment that related to purchase price allocations) and for the period from January 1, 2005 to August 25, 2005 (predecessor). The combined revenue and expense information is being presented solely to assist comparisons across the nine month financial periods. The successor period for 2005 in the combined statement of operations includes the effects of the fair value purchase accounting adjustments.

The successor and predecessor periods in the combined revenue and expense accounts are not comparable as the successor period revenue and expense accounts include increases in certain charges. The principal increases relate to amortization of intangible assets and increased depreciation, all of which arise as a result of recognizing an increase in the fair value of the assets and liabilities acquired in connection with the acquisition of from Navios, and increased interest charges arising as a consequence of additional indebtedness to finance the acquisition.

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The combined information is a Non-US GAAP financial measure and should not be used in isolation or substitution of the Predecessor and Successor results.

			Successor						Combined						Successor						Predecessor
			Nine Months ended September 30, 2006						Nine Months ended September 30, 2005						August 26, 2005 To September 30, 2005 (as restated)						January 1, 2005 to August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)
Revenue				$	153,428					$	179,084					$	20,454					$	158,630
Gain on Forward Freight Agreements					19,363						1,971						(898	)					2,869
Time charter, voyage and port terminal expenses					(65,193	)					(101,985	)					(10,179	)					(91,806	)
Direct vessel expenses					(14,841	)					(6,508	)					(858	)					(5,650	)
General and administrative expenses					(11,507	)					(10,830	)					(866	)					(9,964	)
Depreciation and amortization					(28,263	)					(7,719	)					(3,847	)					(3,872	)
Interest income					2,613						1,592						242						1,350
Interest expense and finance cost, net					(30,641	)					(4,847	)					(3,170	)					(1,677	)
Other income					1,749						1,794						368						1,426
Other expense					(445	)					(1,094	)					(337	)					(757	)
Income before equity in net earnings of affiliate companies					26,263						51,458						909						50,549
Equity in net Earnings of Affiliated Companies					527						916						128						788
Net income				$	26,790					$	52,374					$	1,037					$	51,337

Set forth below are selected historical and statistical data for Navios for the combined company (2005) and as successor (2006), that the Company believes may be useful in better understanding the Company's financial position and results of operations.

			Nine month period ended September 30,
			2006						2005
FLEET DATA
Available days(*)					7,616						6,886
Operating days					7,603						6,856
Fleet utilization					99.8	%					99.6	%
AVERAGE DAILY RESULTS
Time Charter Equivalents (including FFAs)				$	19,198					$	23,389
Time Charter Equivalents (excluding FFAs)				$	16,656					$	23,103

(*)	Navios has currently fixed out (i.e. arranged charters for) 100%, 73.3% and 37% of its 2006, 2007 and 2008 available days, respectively.

During the nine month period ended September 30, 2006, there were 730 more available days as compared to the same period of 2005. This was due to the increase in the number of owned vessels resulting in 2,390 additional days. This increase, however, was mitigated by the redelivery of chartered-in vessels during 2005 and the first nine months of 2006, following the expiration of their charters, reducing the available days by 1,660 days. Navios can increase or decrease its fleet's size by chartering-in vessels for long or short-term periods (less than one year). Fleet size and the corresponding ‘‘available days’’ will be decreased if charters are not renewed or replaced.

The average Time Charter Equivalent (TCE) rate excluding FFAs for the nine month period ended September 30, 2006 was $16,656 per day or $6,447 per day lower than the rate achieved in the

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same period of 2005. This was primarily due to the decline in the freight market resulting in lower charter-out daily rates in the first nine months of 2006 than those achieved in the same period of 2005.

Revenue:    Revenue decreased to $153.4 million for the nine month period ended September 30, 2006 as compared to the $179.1 million for the same period of 2005. Navios earns revenue from both owned and chartered-in vessels, contracts of affreightment and the port terminal operations. Revenues from vessel operations decreased by approximately $25.8 million or 15.0% to $146.4 million for the nine month period ended September 30, 2006 from $172.2 million for the same period of 2005. This decrease is mainly attributable to the decline in the market resulting in lower charter-out daily hire rates in the first nine months of 2006 as compared to the same period of 2005, which was partially mitigated by the increase in available days as discussed above.

Revenues from the port terminal increased by $0.1 million to $7.0 million for the nine month period ended September 30, 2006 as compared to $6.9 million in the same period of 2005. Port terminal throughput volume for the nine month period ended September 30, 2006 increased to 1.8 million tons as compared to 1.7 million tons during the same period in 2005.

Gains and Losses on FFAs:    Income from FFAs increased by $17.4 million to a gain of $19.4 million during the nine month period ended September 30, 2006 as compared to $2.0 million gain for the same period in 2005. Navios records the change in the fair value of derivatives at each balance sheet date. The changes in fair values of the effective portion of FFAs qualifying for hedge accounting, representing unrealized gains or losses at September 30, 2006, of $14.4 million, were recorded in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the remaining FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting of $4.0 million loss, were recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss) are reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transactions affect earnings. On this basis approximately $1.0 million have been reclassified to earnings during the nine month period ended September 30, 2006. The FFAs market has experienced significant volatility in the past few years and, accordingly, recognition of the changes in the fair value of FFAs has, and can, cause significant volatility in earnings. The extent of the impact on earnings is dependent on two factors: market conditions and Navios' net position in the market. Market conditions were volatile in both periods. As an indicator of volatility, selected Baltic Exchange Panamax time charter average rates are shown below.

			Baltic Exchange’s Panamax Time Charter Average Index
January 4, 2005				$	34,227
February 8, 2005				$	32,505
March 14, 2005				$	40,842	(b)
March 31, 2005				$	37,991
April 14, 2005				$	37,412
June 30, 2005				$	18,103
August 3, 2005				$	10,162	(a)
September 22, 2005				$	23,766
January 26, 2006				$	13,267	(c)
March 14, 2006				$	19,626
March 31, 2006				$	17,839
May 2, 2006				$	16,337
June 30, 2006				$	24,117
July 13, 2006				$	21,585
September 18, 2006				$	34,572	(d)

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(a)	Low for nine months-2005

(b)	High for nine months-2005

(c)	Low for nine months-2006

(d)	High for nine months-2006

Time Charter, Voyage and Port Terminal Expense:    Time charter and voyage expenses decreased by $36.8 million or 36.1% to $65.2 million for the nine month period ended September 30, 2006 as compared to $102.0 million for the same period in 2005. This was primarily due to (a) the decline in the market which positively affected the charter – in daily hire rate cost from $12,511 per day for the nine month period ended September 30, 2005 to $9,407 per day for the same period of 2006 (b) the redelivery of higher cost chartered-in vessels and the exercise of purchase options that resulted in the expansion of the owned fleet and (c) the reduction of port expenses and fuel consumption cost due to more vessels employed under time charters in the nine months of 2006, whereby these costs were borne by the charterers, as compared to the same period of 2005.

Direct Vessel Expenses:    Direct vessel expenses for operation of the owned fleet increased by $8.3 million to $14.8 million or 127.7% for the nine month period ended September 30, 2006 as compared to $6.5 million for the same period in 2005. Direct vessel expenses include crew costs, provisions, deck and engine stores, lubricating oils, insurance premiums and maintenance and repairs. The increase resulted primarily from additional costs related to normal usage and to the increase of the owned fleet by ten vessels during the period since Navios’ acquisition in August 2005.

General and Administrative Expenses:    General and administrative expenses increased by $0.7 million or 6.5% to $11.5 million for the nine month period ended September 30, 2006 as compared to $10.8 million for the same period in 2005. However, excluding the transaction costs of approximately $3.6 million incurred in connection with the sale of Navios during the first nine months of 2005, general and administrative expenses show an increase of 59.7% in the first nine months of 2006 as compared to the same period of 2005. The increase is mainly attributable to (a) increase in payroll and related costs, (b) increase in professional, legal, and audit fees and traveling due to the additional costs incurred by Navios as a public company and (c) increased office expenses as a result of the Company’s move to the new offices and other expenses related to being a public company.

Depreciation and Amortization:    Depreciation and amortization are not directly comparable for the consolidated nine month period ended September 30, 2006 and the combined nine month period ended September 30, 2005. As part of the acquisition of Navios by ISE on August 25, 2005, the dry bulk fleet and port terminal facilities were recorded at their fair market values. The adjusted fixed assets values are being depreciated over the remaining economic useful lives of the individual assets. Amortization for the period from August 26, 2005 onward also includes amortization of the intangible assets recorded on August 25, 2005 as a result of the acquisition of Navios by ISE, with the exception of vessel purchase options and goodwill which are not amortized. For the nine month period ended September 30, 2006 the increase in depreciation is attributable to the acquisition of ten vessels having a $9.0 million effect, with the remaining being the effect of the accounting treatment discussed above. See the further discussion of Navios' amortization policy under ‘‘Liquidity and Capital Resources.’’

Net Interest Expense and Income:    Interest expense from August 26, 2005 onward increased as compared to periods prior to this date due to the new debt incurred on August 25, 2005 as restructured on December 21, 2005. A substantial portion of the new debt was used to finance the acquisition of Navios by ISE and the acquisition of additional vessels. As a result, interest expense for the nine month period ended September 30, 2006 is not directly comparable to the same combined period of 2005. Interest income increased by $1.0 million to $2.6 million for the nine month period ended September 30, 2006, as compared to $1.6 million for the same period of 2005. Although the average cash balances decreased from $93.5 million in the first nine months of 2005 to $76.4 million in the same period of 2006 interest was increased as a result of the higher weighted average interest rate which increased to 4.9% in the first nine months of 2006 from 2.9% for the same period in 2005.

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Other Income:    Other income decreased by $0.1 million to $1.8 million for the nine month period ended September 30, 2006. This decrease is mainly due to less favorable marked to market gains realized on the interest rate swaps as compared to previous period as the interest rates decreased on both the short and long term.

Net Other Expense:     Other expense decreased by $0.8 million to $0.4 million for the nine month period ended September 30, 2006. This change is mainly due to less realized foreign exchange losses from the settlement of payables raised in other currencies than US dollars during the period.

Liquidity and Capital Resources

Navios has historically financed its capital requirements with cash flows from operations, equity contributions from stockholders and bank term loans. Main uses of funds have been capital expenditures for the acquisition of vessels, new construction and upgrades at the port terminal, expenditures incurred in connection with ensuring that the owned vessels comply with international and regulatory standards, repayments of bank loans and payments of dividends. Subsequent to its acquisition, Navios anticipates that internally generated cash flows and borrowings under the secured credit facility, which was assumed in the acquisition / reincorporation, will be sufficient to fund the operations of the fleet and the port terminal, including working capital requirements. See ‘‘Exercise of Vessel Purchase Options’’, ‘‘Working Capital Position’’ and ‘‘Long Term Debt Obligations and Credit Arrangements’’ for further discussion of Navios' working capital position. The successor periods include the effect of fair value purchase accounting adjustments and as a result, are not directly comparable to the predecessor period. The principle increases relate to amortization of intangible assets and increased depreciation, all of which arise as a result of recognizing an increase in the fair value of the assets and liabilities acquired from Navios, and increased interest charges arising as a consequence of additional indebtedness to finance the acquisition.

The following table presents consolidated cash flow information for the nine month period ended September 30, 2006 and combined cash flow information for the nine month period ended September 30, 2005. The information for the successor and predecessor periods was derived from the unaudited consolidated statements of cash flows of Navios for the nine month period ended September 30, 2006 (successor), the period August 26, 2005 to September 30, 2005 (successor) and the period January 1, 2005 to August 25, 2005 (predecessor). The combined cash flow information is being presented solely to assist comparisons across the nine month financial periods.

			Successor						Combined						Successor						Predecessor
			Nine Month Period ended September 30, 2006						Nine Month Period ended September 30, 2005						August 26, 2005 to September 30, 2005						January 1, 2005 to August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)
			(Expressed in thousands of US Dollars – except per share data)
Net Cash provided by (used in) operating activities					43,997						71,403						(542	)					71,945
Net Cash (used in) provided by investing activities					(91,783	)					96,126						100,390						(4,264	)
Net Cash provided by (used in) financing activities					106,185						(80,998	)					(30,492	)					(50,506	)
Increase in cash and cash equivalents					58,399						86,531						69,356						17,175
Cash and cash equivalents, beginning of the period					37,737						46,758						63,933						46,758
Cash and cash equivalents, end of period					96,136						133,289						133,289						63,933

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Cash provided by operating activities for the nine month period ended September 30, 2006 as compared to the combined nine month period ended September 30, 2005:

Net cash provided by operating activities decreased by $27.4 million to $44.0 million for the nine month period ended September 30, 2006 as compared to $71.4 million for the same period of 2005. The decrease resulted primarily from lower net income in the nine month period ended September 30, 2006 and other factors as discussed below. In determining net cash provided by operating activities, net income is adjusted for the effects of certain non-cash items including depreciation and amortization and unrealized gains and losses on derivatives. Depreciation and amortization, which include the depreciation of the owned dry bulk fleet and port terminal facilities, is not directly comparable for the predecessor and successor companies. As part of the acquisition of Navios by ISE, the dry bulk fleet, the assets at Navios’ port terminal and intangible assets were written up to fair market value on August 25, 2005. These new values are being depreciated over the remaining economic useful lives of the individual vessels and assets.

The fair value of open FFA trades at September 30, 2006 was lower than in the same period of 2005 and amounted to $6.4 million and $14.5 respectively, reflecting the mark to market values at the end of the respective periods (See rate tables on pages 11 and 14). Unrealized losses from FFAs for the nine month periods ended September 30, 2006 and 2005 amounted to $0.8 million and $32.6 million respectively and reflected the change in net fair value on open FFA contracts between the periods. The $0.8 million loss at September 30, 2006, represents $14.4 million loss on FFAs qualifying for hedge accounting treatment which has been reflected in ‘‘Other Comprehensive Income/(Loss)’’ under stockholders’ equity, which offsets the $13.6 million unrealized gain on FFAs not qualifying for hedge accounting treatment charged to period results.

The liability for derivative accounts, increased during the nine month period ended September 30, 2006 by $13.2 million due to the movement in the unrealized component of the NOS ASA and LCH portfolios, changing from $0.3 million gain to a $13.4 million gain, and the receipts on interest rate swaps of $0.1 million. In the same period of 2005, the derivative liability decreased by $3.9 million due to the NOS ASA portfolio changing from $1.9 million gain to a $0.9 million loss and payment on interest rate swaps of $1.1 million.

Restricted cash increased by $11.0 million from $4.1 million at December 31, 2005 to $15.1 million at September 30, 2006. The primary reasons for this increase were the additional deposits made to NOS ASA and LCH with respect to FFAs trading of $6.0 million and $5.8 million, respectively offset by the decrease in the retention account held with HSH Nordbank in connection with the restructured credit facility by $0.8 million. During the corresponding period in 2005 restricted cash increased by $0.7 million from $3.5 million at December 31, 2004 to $4.2 million at September 30, 2005. The primary reason for this increase was the reduction in the deposits made to NOS ASA by $1.5 million and the increase in deposits made in connection with collateral requirements of $2.2 million.

Accounts receivable net increased by $11.8 million from $13.7 million at December 31, 2005 to $25.5 at September 30, 2006. The primary reason for this increase was a change in the amount receivable from FFA trading partners which increased by $11.5 million from $10.5 million at the end of December 31, 2005 to $22.0 million at September 30, 2006. During the corresponding combined period in 2005 accounts receivable net decreased by $2.0 million. This decrease is primarily due to the decrease in accounts receivable from FFA trading partners which decreased by $3.3 million from $12.7 million at December 31, 2004 to $9.4 million at September 30, 2005 and the general increase in trade receivables of $1.3 million.

Prepaid expenses and other current assets increased by $1.5 million from $6.4 million at December 31, 2005 to $7.9 million at September 30, 2006. The main reason for the increase in prepaid expenses was the increase in inventories and supplies onboard the vessels of $2.0 million, the prepaid FFA option premiums of $1.9 and the increase in other prepaid balances of $0.5 million which were mitigated by the decrease in prepaid voyage expenses of $2.9 million. During the corresponding

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combined period in 2005 prepaid expenses decreased by $5.5 million. This decrease was mainly attributable to the decrease in prepaid voyage expenses by $5.1 million and the increase in other prepaid balances of $0.4 million.

Accounts payable increased by $16.9 million from $13.9 million at December 31, 2005 to $30.8 million at September 30, 2006. The primary reason for the increase was the change in the amount due to FFA trading partners, which increased by $16.5 million during the nine month period ended September 30, 2006. During the corresponding combined period of 2005 accounts payable decreased by $6.4 million. The main reason for the decrease was the decrease in the amounts due to FFA trading partners by approximately an equal amount.

Accrued expenses slightly decreased by $0.1 million to $11.2 million at September 30, 2006 as compared to $11.3 million at December 31, 2005. However, excluding the deferred FFA option premiums of $1.5 million that did not exist in 2005, accrued liabilities decreased by $1.6 million. There are various reasons for this decrease mainly involving the following: (a) the accrual of audit and other consultancy fees as a result of Navios transitioning from a private company status to a public company in 2005 decreased by $3.2 million as of September 30, 2006 and (b) the restructuring of the debt as of December 21, 2005 resulted in financing fees being accrued in the amount of $2.6 million at December 31, 2005 and decreased by $2.1 million to $0.5 million at September 30, 2006. This decrease was mitigated by the increase in payroll cost of $2.0 million and the increase in vessel direct costs by $1.8 million. During the corresponding period in 2005 accrued expenses increased by $1.3 million. The increase was mainly attributable to a $1.4 million accrual raised for the payment in accordance with an employment agreement as a result of the change in control of the Company and a $1.1 million accrual for establishing a restructuring reserve. This increase was partially offset by the decrease in the accrual due to the cash settlement of a litigation regarding the SD Victory of $0.7 million and the reduction in the accrual for loss making voyages by $1.3 million.

Deferred voyage revenue primarily reflects freight and charter-out amounts collected on voyages that have not been completed. Deferred freight decreased by $1.5 million due to the fact that there was one voyage at December 31, 2005 amounting to $1.6 million compared to one voyage at September 30, 2006 amounting to $0.1 million. During the same period the deferred hire on chartered-out vessels decreased by $1.3 million because there were 58 fewer deferred days amounting to 187 at September 30, 2006 as compared to 245 deferred days at December 31, 2005. During the corresponding period in 2005 deferred voyage revenue decreased by $5.7 million from $15.1 million at December 31, 2004 to $9.4 million at September 30, 2005, primary due to the decrease in the number of freight voyages.

Cash (used in) provided by investing activities for the nine month period ended September 30, 2006 as compared to the combined nine month period ended September 30, 2005:

Cash used in investing activities was $91.8 million for the nine month period ended September 30, 2006, as opposed to $96.1 million of cash provided by investing activities for the same period in 2005.

In 2006 Navios paid $88.6 million for the acquisition of one vessel and three purchase option vessels. No vessels were acquired in the same period of 2005.

In 2006 the Company made $1.9 million deposit in connection with the exercised option for the acquisition of vessel Navios Star with expected delivery in December 2006. In 2005 the Company had made $1.8 million deposit in connection with the acquisition of the first of the option vessels, which was delivered on November 30, 2005.

Purchase of property and equipment of $1.3 million for the nine month period ended September 30, 2006 and $4.3 million for the same period in 2005 represents, in most part, the amounts paid by Navios in accordance with the terms of the purchase agreement for the construction of the new horizontal silo with ancillary equipment during 2005.

In 2005 investing activities include $102.3 of cash received from the downstream merger.

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Cash provided by (used in) financing activities for the nine month period ended September 30, 2006 as compared to the combined nine month period ended September 30, 2005:

Cash provided from financing activities was $106.2 million for the nine month period ended September 30, 2006, while for the same period of 2005 $81.0 million had been used in financing activities

Cash provided by financing activities was the result of $97.7 million proceeds from the restructured credit agreement signed on December 21, 2005, which were utilized to partially finance the acquisition of one vessel and three option vessels, and the proceeds from the exercise of warrants resulting in issuance of common stock of $65.4 million. This was offset by $56.9 million of cash used in financing activities which consisted of $45.7 million of installments paid in connection with the credit facility and $11.2 million of dividends paid.

Cash used in financing activities was $81.0 million for the nine month period ended September 30, 2005. An amount of $72.4 million relates to installments paid in connection with the credit facilities as of that time and $8.6 million to the repayment of a loan due to stockholders.

EBITDA:    EBITDA represents net income before interest, taxes, depreciation and amortization. Navios uses EBITDA because Navios believes that EBITDA is a basis upon which liquidity can be assessed and because Navios believes that EBITDA presents useful information to investors regarding Navios' ability to service and/or incur indebtedness. Navios also uses EBITDA (i) in its credit agreement to measure compliance with covenants such as interest coverage and debt incurrence; (ii) by prospective and current lessors as well as potential lenders to evaluate potential transactions; and (iii) to evaluate and price potential acquisition candidates.

EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of Navios' results as reported under US GAAP. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs, and (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA should not be considered as a principal indicator of Navios' performance.

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EBITDA Reconciliation to Cash from Operations:

(in thousands of US Dollars)

			Successor						Combined						Successor						Predecessor
			Three Months Ended September 30, 2006						Three Months Ended September 30, 2005						August 26, 2005 To September 30, 2005						July 1, 2005 To August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)
Net cash provided by (used in) operating activities				$	21,491					$	21,756						(542	)				$	22,298
Net increase (decrease) in operating assets					2,741						(8,530	)					6,281						(14,811	)
Net (increase) decrease in operating liabilities					(6,755	)					14,302						7,638						6,664
Net interest cost					9,163						3,126						2,928						198
Deferred finance charges					(561	)					(557	)					(159	)					(398	)
Provision for losses on accounts receivable					(64	)					(7	)					(7	)					—
Unrealized gain (loss) on FFA derivatives, FECs and interest rate swaps					7,927						(6,936	)					(8,517	)					1,581
Earnings in affiliates, net of dividends received					230						(214	)					128						(342	)
Payments for drydock and special survey costs					876						14						14						—
EBITDA				$	35,048					$	22,954						7,764					$	15,190

			Successor						Combined						Successor						Predecessor
			Nine Months Ended September 30, 2006						Nine Months Ended September 30, 2005						August 26, 2005 To September 30, 2005						January 1, 2005 To August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)
Net cash provided by (used in) operating activities				$	43,997					$	71,403						(542	)				$	71,945
Net increase (decrease) in operating assets					24,757						(8,244	)					6,281						(14,525	)
Net (increase) decrease in operating liabilities					(27,032	)					29,045						7,638						21,407
Net interest cost (income)					28,028						3,255						2,928						327
Deferred finance charges					(1,789	)					(584	)					(159	)					(425	)
Provision for losses on accounts receivable					(61	)					873						(7	)					880
Unrealized gain (loss) on FFA derivatives, FECs and interest rate swaps					13,869						(32,245	)					(8,517	)					(23,728	)
Earnings in affiliates, net of dividends received					(56	)					(57	)					128						(185	)
Payments for drydock and special survey costs					2,481						14						14						—
EBITDA				$	84,194					$	63,460						7,764					$	55,696

EBITDA increased by $12.0 million to $35.0 million for the three month period ended September 30, 2006 as compared to $23.0 million for the combined period of 2005.The increase is mainly attributable to (a) a gain in FFAs trading of $16.0 million in the third quarter of 2006 versus a gain of $2.8 million in the same period in 2005, (b) the reduction in time charter and voyage expenses from $26.1 million in the third quarter of 2005 to $21.8 million in the same period of 2006 due to the redelivery of higher cost chartered-in vessels and the exercise of purchase options and (c) the reduction in general and administrative expenses from $4.1 million in the third quarter of 2005 to

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$3.9 million in the same period of 2006. The above overall favorable variance of $17.7 million was mitigated by (a) the decrease in revenues by $0.8 million (excluding the amortization of backlogs of $0.4 million), (b) the increase in direct vessel expenses by $3.2 million (excluding the amortization of deferred dry dock and special survey costs of $0.3 million) due to the expansion of the owned fleet from six vessels in the third quarter of 2005 to 16 vessels in the same period of 2006 and (c) the increase in other expenses, net by $1.7 million mainly due to the losses from swaps mark to market valuation.

EBITDA increased by $20.7 million to $84.2 million for the nine month period ended September 30, 2006 as compared to $63.4 million for the same period of 2005. The increase is mainly attributable to (a) a gain in FFAs trading of $19.4 million in the nine month period ended September 30, 2006 versus a gain of $2.0 million in the same period in 2005, (b) a reduction in time charter and voyage expenses from $102.0 million in the nine month period ended September 30, 2005 to $65.2 million in the same period of 2006 due to the redelivery of higher cost chartered-in vessels and the exercise of purchase options that resulted in expansion of the owned fleet and (c) an increase of $0.2 million in other income, net. The above overall favorable variance of $54.4 million was mitigated by (a) the decline in revenues by $25.5 million (excluding the amortization of backlogs of $0.2 million), (b) the increase in direct vessel expenses by $7.5 million (excluding the amortization of deferred dry dock and special survey costs of $0.8 million) due to the expansion of the fleet from 6 vessels in the first nine months of 2005 to 16 vessels in the same period of 2006 and (c) the increase in general and administrative expenses by $0.7 million reflecting the effect of the Company being public.

Long Term Debt Obligations and Credit Arrangements:

The principal payments of the credit facility outstanding balance as of September 30, 2006 for the next 5 calendar years and thereafter are as follows:

Year			Amounts in million of U.S. Dollars
2006					15.3
2007					61.3
2008					61.3
2009					59.4
2010					59.4
2011 and thereafter					288.7

Navios has taken preliminary steps with a view towards consummating a debt refinancing in late 2006 or early 2007. There can be no assurance that any such debt refinancing will be consummated.

Contractual Obligations:

			September 30, 2006 Payment due by period ($ in millions)
			Total						1-3 years						3-5 years						More than 5 years
Long term debt – as restructured(i)(ii)					545.4						137.9						118.8						288.7
Operating Lease Obligations (Time Charters)(ii)					278.0						123.8						61.6						92.6
Rent Obligations(iii)					7.7						2.5						1.8						3.4

(i)	The amount identified represents principal due as of September 30, 2006 and does not include interest costs associated with it, which are based on LIBOR or applicable interest rate swap rates, plus the costs of complying with any applicable regulatory requirements and a margin ranging from 1.5% to 2.75% per annum.

(ii)	As further discussed in the following paragraph under ‘‘Exercise of Vessel Purchase Options’’, Navios gave notice of its intention to purchase six vessels. The effect of the exercise of the options is reflected in the reduction of operating lease obligations as of September 30, 2006.

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(iii)

At the time of the August 25, 2005 acquisition, ISE's senior management anticipated implementing a strategic post-acquisition plan for the relocation of Navios offices in the United States from South Norwalk, Connecticut to New York City and of its existing offices in Piraeus, Greece to larger offices in Piraeus to house Navios' headquarters. Management has commissioned an internal task force to implement this plan. On January 2, 2006 the Company relocated its headquarters to new premises in Piraeus, Greece leased by Navios’ subsidiaries. The effect of this relocation is reflected in the increase of rent obligations as of September 30, 2006. The relocation plan of Navios offices from South Norwalk to New York City has not yet been implemented.

Exercise of Vessel Purchase Options:

Vessel Name			Vessel Type			Built						DWT
Exercised options:
Navios Meridian (acquired)			Ultra-Handymax					2002						50,316
Navios Mercator (acquired)			Ultra-Handymax					2002						53,553
Navios Galaxy I (acquired)			Panamax					2001						74,195
Navios Magellan (acquired)			Panamax					2000						74,333
Navios Horizon (acquired)			Ultra-Handymax					2001						50,346
Navios Arc (acquired)			Ultra-Handymax					2003						53,514
Navios Star (notice given)			Panamax					2002						76,662

On August 25, 2005 Navios had options to purchase 13 vessels of its long term chartered-in fleet, including those to be delivered, of which six have been exercised. During November 2005, Navios signed two more charter-in contracts with options to purchase these vessels and in the third quarter of 2006 Navios contracted a new long term chartered-in purchase option vessel to be delivered, bringing the total to 16. More specifically, during September, October and November, 2005, Navios gave notice, to the owners of four Ultra-Handymax vessels and two Panamax vessels, of its intention to exercise the options to purchase the vessels at the option exercise price of approximately $20 million each. As of December 31, 2005, Navios had executed all exercisable purchase options comprising four Ultra Handymax vessels and two Panamax vessels. Two of the option vessels, the Navios Meridian and Navios Mercator, were delivered to the Company on November 30, 2005 and December 30, 2005. The third option vessel, the Navios Arc, was delivered on February 10, 2006, the fourth vessel, the Navios Galaxy I, was delivered on March 23, 2006, the fifth vessel, the Navios Magellan, was delivered on March 24, 2006 and the sixth vessel, the Navios Horizon, was delivered on April 10, 2006. The total acquisition cost of these six additional vessels was approximately $115 million. Navios also believes that the market value of the six vessels is approximately $250 million. Navios also believes that the charter revenue, net of expenses, for these vessels will be sufficient to meet the principal and interest obligations on this new debt and, therefore, Navios' net cash flow will not be negatively impacted. However, the current portion of this new debt will cause current liabilities to further exceed current assets. On August 2, 2006, Navios exercised its option on Navios Star and in September 2006 expressed its intention to exercise its option to acquire the Navios Hyperion with expected deliveries in December 2006 and March 2007, respectively. Accordingly, the Company has options to acquire four of the remaining nine chartered-in vessels currently in operation and four of the six long term chartered-in vessels on order.

The acquisition cost of vessels Navios Star and Navios Hyperion of approximately $20.0 million and $21.0 million, respectively, will fully be financed by external financing.

Working Capital Position

On September 30, 2006 and December 31, 2005, Navios' current assets totaled $251.3 and $114.5 million respectively, while current liabilities totaled $222.4 and $133.6 million respectively, resulting in a positive working capital position of $28.9 at September 30, 2006 and negative working capital position of $19.1 million at December 31, 2005. The working capital at September 30, 2006, includes

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the net proceeds from the exercise of the warrants discussed above under ‘‘Recent Developments’’, a portion of which will be utilized to partially finance the South American logistics business. Excluding these proceeds, the working capital position at September 30, 2006 was a negative of $35.4 million. Navios believes that it will generate sufficient cash during 2006 and 2007 to make the required principal and interest payments on current and future indebtedness as a result of the acquisition of option vessels, provide for the normal working capital requirements of the business and remain in a positive cash position during 2006 and 2007.

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

Dividend Policy

Subject to the approval of the lenders under the existing credit facility, Navios' Directors may from time to time consider the payment of dividends. Navios declared a quarterly cash dividend of $0.0666 per common share or an aggregate amount of approximately $3.0 million in respect of the fourth quarter of 2005, paid on March 13, 2006, to stockholders of record as of February 27, 2006, a dividend of approximately $4.1 million for the first quarter of 2006, paid on July 5, 2006, to stockholders on record as of June 15, 2006 and a dividend of approximately $4.1 million for the second quarter of 2006, paid on September 27, 2006. On October 30, 2006, the Board of Directors resolved that a dividend for the third quarter of 2006 of $0.0666 per common share will be paid on December 18, 2006 to stockholders of records as of December 6, 2006.

Concentration of Credit Risk

For the nine month period ended September 30, 2006 there were no customers who accounted for more than 10% of Navios’ revenue.

Off-Balance Sheet Arrangements

Charter hire payments to third parties for chartered-in vessels are treated as operating leases for accounting purposes. Navios is also committed to making rental payments under operating leases for its office premises. As of both September 30, 2006 and December 31, 2005, Navios was contingently liable for letters of guarantee and letters of credit amounting to $0.5 million issued by various banks in favor of various organizations. These letters of guarantee and letters of credit are collateralized by cash deposits which are included as a component of restricted cash. At September 30, 2006, there were no amounts due under the existing guarantees as compared to $2.3 million at December 31, 2005. Under the existing guarantees, Navios irrevocably and unconditionally guarantees its subsidiaries obligations under the dry bulk shipping FFAs. The guarantees remain in effect for a period of 6 months following the last trade date, which was June 21, 2006.

Related Party Transactions

Vessel acquisitions:    On December 19, 2005 Navios signed an agreement to purchase four Panamax vessels from Maritime Enterprises Management S.A., a company affiliated with the family of Angeliki Frangou the Company’s Chairman and Chief Executive Officer. The three vessels were delivered in 2005 while the fourth, the Navios Gemini S built in 1994, was delivered on January 5, 2006. The total acquisition cost for the four vessels including backlogs was USD$119.8 million and was funded (i) with $13.0 million of Navios’ available cash; (ii) with $80.3 million from bank financing; and (iii) from the net proceeds from the issuance of 5,500,854 shares of Navios authorized common stock. These shares are subject to a one-year lock-up from date of issuance and were issued at 19.9% premium to Navios’ closing price on December 21, 2005. Navios believes the terms of the purchase agreements for these vessels were the same as could have been expected in an arm’s length transaction.

Purchase of services:    The Company utilizes Acropolis Chartering and Shipping Inc. (‘‘Acropolis’’) as a broker. Commissions paid to Acropolis for the three month period ended

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September 30, 2006, the period from August 26, 2005 to September 30, 2006 and the period from July 1, 2005 to August 25, 2005 were $94,000, $0 and $150,000, respectively. Commissions paid to Acropolis for the nine month period ended September 30, 2006, the period from August 26, 2005 to September 30, 2006 and the period from January 1, 2005 to August 25, 2005 were $187,000, $0 and $455,000, respectively. The Company owns fifty percent of the common stock of Acropolis. During the three month periods ended September 30, 2006, the period from August 26, 2005 to September 30, 2006 and the period from July 1, 2005 to August 25, 2005 Navios received dividends of $0, $0 and $490,000 respectively. During the nine month periods ended September 30, 2006, the period from August 26, 2005 to September 30, 2006 and the period from January 1, 2005 to August 25, 2005 Navios received dividends of $296,000, $0 and $972,000 respectively. An amount of $64,000 and $90,000 representing commissions due to Acropolis is included in accounts payable as at September 30, 2006 and December 31, 2005 respectively.

On January 2, 2006, Navios Corporation and Navios Shipmanagement Inc., two wholly owned subsidiaries of Navios, entered into two lease agreements with Goldland Ktimatiki – Ikodomiki – Touristiki and Xenodohiaki Anonimos Eteria, a Greek corporation which is partially owned by relatives of Angeliki Frangou, our Chairman and Chief Executive Officer. The lease agreements provide for the leasing of two facilities located in Piraeus, Greece, of approximately 2,034.3 square meters and will house the operations of the Company’s subsidiaries. The total annual lease payments are EUR 420,000 (approximately $500,000) and the lease agreements expire in 2017. The Company believes the terms and provisions of the lease agreements were similar to those that would have been agreed with a non-related third party. The lease payments are subject to annual adjustments starting form the third year which are based on the inflation rate prevailing in Greece as reported by the Greek State at the end of each year.

Exercise of warrants:    As of June 6, 2006, Navios issued 15,978,280 shares of common stock upon exercise 15,978,280 of its 65,550,000 outstanding warrants. Ms. Angeliki Frangou, Navios chairman and principal stockholder, participated in this transaction and paid approximately $27.3 million to the Company to exercise all of her 6,666,280 warrants.

Quantitative and Qualitative Disclosure About Market Risks:    Navios is exposed to certain risks related to interest rate, foreign currency and charter rate risks. To manage these risks, Navios uses interest rate swaps (for interest rate risk), forward exchange contracts (for foreign currency risk) and FFAs (for charter rate risk).

Interest Rate Risk:

Debt Instruments – As of September 30, 2006 and December 31, 2005, Navios had a total of $545.4 million and $493.4 million, respectively, in long term indebtedness. The debt is dollar denominated and bears interest at a floating rate. A new senior secured credit facility with HSH Nordbank AG, established by ISE to provide a portion of the funds necessary to acquire Navios, was assumed by Navios in the acquisition / reincorporation. $514.4 million was borrowed under this facility on August 25, 2005. The loan was restructured on December 21, 2005, by a new credit facility with HSH Nordbank AG up to $649 million. Of this amount $435 million was fully utilized to refinance the balance of the previous facility, while $204 million from the remaining balance of $214 million was utilized for the acquisition of 10 vessels. Following the acquisition of the 10 vessels, the loan is considered fully drawn. The interest rate under the facility, depending on the tranche being borrowed, is LIBOR or the applicable interest rate swap rate, plus the costs of complying with any applicable regulatory requirements and a margin ranging from 1.5% to 2.75% per annum. Amounts drawn under the facility are secured by the assets of Navios and its subsidiaries. The fair market value of Navios floating rate debt was, and continues to be, its face value. Because the interest on the debt is at a floating rate, changes in interest rates would have no effect on the value of the debt. A change in the LIBOR rate of 100 basis points would change interest expense by $5.3 million and $0.66 million per year as of September 30, 2006 and December 31, 2005, respectively.

Interest Rate Swaps – Navios has entered into interest rate swap contracts to hedge its exposure to variability in its floating rate long term debt. Under the terms of the interest rate swaps Navios and

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the banks agreed to exchange, at specified intervals, the difference between a paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amounts and maturities. The interest rate swaps allow Navios to convert long-term borrowings issued at floating rates into equivalent fixed rates.

At September 30, 2006, Navios had two remaining swaps with the Royal Bank of Scotland and one swap with Alpha Bank with a total notional principal amount of $33.6 million. The swaps were entered into at various points in 2001 and expire in 2006 and 2010 in the respective amounts of $13.0 million and $20.9 million. Navios estimates that it would have to pay $0.5 million and $1.5 million to terminate these agreements as of September 30, 2006 and December 31, 2005 respectively. As a result of the swap, Navios' net exposure is based on total floating rate debt less the notional principal of floating to fixed interest rate swaps. A 100 basis points change in interest rates would increase or decrease interest expense by $1.3 million per year and by $0.9 million per year as of September 30, 2006 and December 31, 2005, respectively so long as the relevant LIBOR does not exceed the caps described below. The swaps are set by reference to the difference between the 3 month LIBOR (which is the base rate under Navios' long term borrowings) and the yield on the US ten year treasury bond. The swaps effectively fix interest rates at 5.54% to 5.65%. However, each of the foregoing swaps is subject to a cap of 7.75%; to the extend that the relevant LIBOR exceeds the cap, Navios would remain exposed.

On December 21, 2005 and in connection with the secured credit facility, Navios entered into an ISDA Agreement with HSH Nordbank AG, providing for (a) interest rate swaps according to which the company exchanges LIBOR with a fixed rate of 4.74% (this contract applies for the period from March 2006 to March 2007 on notional amounts starting at $171 million and de-escalated down to $ 100.5 million following the loan repayment schedule), and (b) interest rate collar with a cap of 5.00% and a floor of 4.45% (this contract applies for the period from March 2007 to June 2008 on notional amounts starting at $82 million and de-escalated down to $13.25 million following the loan repayment schedule).

In July 2006, and in connection with the secured credit facility with HSH Nordbank AG, Navios entered into a second ISDA (International Swap Dealer Association, Inc.) agreement with HSH Nordbank AG, whereby it exchanges LIBOR with a fixed rate of 5.52%. This contract applies for the period from December 31, 2007 to September 30, 2009, for a notional amount of $79.3 million at redemptions in accordance with the repayment schedule of the secured facility as above. The ISDA Agreement is bound by the same securities as the secured credit facility discussed in the preceding paragraph.

Foreign Currency Risk:    

Foreign Currency – Certain of the Company expenses are paid in foreign currencies and a one percent change in the exchange rates of the various currencies at September 30, 2006 and December 31, 2005, would increase or decrease net income per year by $0.1 million.

FFAs Derivative Risk:

Forward Freight Agreements (FFAs) – Navios enters into FFAs as economic hedges relating to identifiable ship and/or cargo positions and as economic hedges of transactions that Navios expects to carry out in the normal course of its shipping business. By using FFAs, Navios manages the financial risk associated with fluctuating market conditions. The effectiveness of a hedging relationship is assessed at its inception and then throughout the period of its designation as a hedge. If an FFA qualifies for hedge accounting, any gain or loss on the FFA, as accumulated in ‘‘Accumulated Other Comprehensive Income/(Loss)’’, is first recognized when measuring the profit or loss of the related transaction. For FFAs that qualify for hedge accounting, the changes in fair values of the effective portion representing unrealized gains or losses are recorded in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting ($3.5 million and $4.0 million for the three and nine month periods ended

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September 30, 2006, respectively), are recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ will be reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassification to earnings will extend until December 31, 2007, depending on the period or periods during which the hedged forecasted transactions will affect earnings and commenced in the third quarter of 2006. The amount of losses included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ as of September 30, 2006, which is expected to be reclassified to earnings during the next twelve months is estimated to be $10.9 million. For the three and nine month periods ended September 30, 2006, $1.0 million of gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ had been reclassified to earnings. At December 31, 2005, none of the open FFAs qualified for hedge accounting and, accordingly, all unrealized gains or losses were recorded in the statement of operations.

Navios is exposed to market risk in relation to its FFAs and could suffer substantial losses from these activities in the event expectations are incorrect. Navios trades FFAs with an objective of both economically hedging the risk on the fleet, specific vessels or freight commitments and taking advantage of short term fluctuations in market prices. For positions Navios deems to be open, a 10% change in underlying freight market indices would increase or decrease net income per year by $0.1 million and $2.8 million as of September 30, 2006 and December 31, 2005 respectively.

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Index

			Page
NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2006 (UNAUDITED) AND DECEMBER 31, 2005 (AUDITED)					F-2
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2006 (SUCCESSOR) AND FOR THE PERIODS FROM AUGUST 26, 2005 TO SEPTEMBER 30, 2005 (SUCCESSOR, AS RESTATED), FROM JULY 1, 2005 TO AUGUST 25, 2005 (PREDECESSOR) AND FROM JANUARY 1, 2005 TO AUGUST 25, 2005 (PREDECESSOR)					F-3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2006 (SUCCESSOR) AND THE PERIOD FROM AUGUST 26, 2005 TO SEPTEMBER 30, 2005 (SUCCESSOR, AS RESTATED) AND JANUARY 1, 2005 TO AUGUST 25, 2005 (PREDECESSOR)					F-4
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2006 (SUCCESSOR) AND FOR THE PERIODS FROM AUGUST 26, 2005 TO SEPTEMBER 30, 2005 (SUCCESSOR, AS RESTATED) AND JANUARY 1, 2005 TO AUGUST 25, 2005 (PREDECESSOR)					F-5
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)					F-6

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NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of US Dollars – except per share data)

			Notes						September 30, 2006						December 31, 2005
									(unaudited)
ASSETS
Current Assets
Cash and cash equivalents					4,9					$	96,136					$	37,737
Restricted cash					9						15,119						4,086
Accounts receivable, net of allowance for doubtful accounts of $472 as at September 30, 2006 and $411 as at December 31, 2005											25,524						13,703
Short term derivative asset					9						101,345						45,556
Short term backlog asset					7						5,246						7,019
Prepaid expenses and other current assets											7,888						6,438
Total current assets											251,258						114,539
Deposit on exercise of vessels purchase options											1,949						8,322
Vessels, port terminal and other fixed assets, net					6						482,795						365,997
Long term derivative assets					9						2,143						28
Deferred financing costs, net											9,888						11,677
Deferred dry dock and special survey costs, net											3,948						2,448
Other long term assets											392						—
Investments in affiliates											602						657
Long term backlog asset					7						3,820						7,744
Trade name					7						86,910						89,014
Port terminal operating rights					7						30,149						30,728
Favorable lease terms and purchase options					7						77,850						117,440
Goodwill											40,789						40,789
Total non-current assets											741,235						674,844
Total Assets										$	992,493					$	789,383
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable										$	30,837					$	13,886
Accrued expenses											11,184						11,253
Deferred voyage revenue											3,605						6,143
Short term derivative liability					9						107,506						39,992
Short term backlog liability					7						7,990						8,109
Current portion of long term debt					8						61,318						54,221
Total current liabilities											222,440						133,604
Long term debt, net of current portion					8						484,060						439,179
Long term liabilities											1,742						2,297
Long term derivative liability					9						3,766						598
Long term backlog liability					7						—						5,947
Total non-current liabilities											489,568						448,021
Total liabilities											712,008						581,625
Commitments and Contingencies					12						—						—
Stockholders’ Equity
Preferred stock – $0.0001 par value, authorized 1,000,000 shares. None issued											—						—
Common stock – $0.0001 par value, authorized 120,000,000 shares, issued and outstanding 62,088,127 and 44,239,319 as of September 30, 2006 and December 31, 2005, respectively					11						6						4
Additional paid-in capital					11						276,178						205,593
Accumulated other comprehensive income/(loss)					9						(13,404	)					—
Retained earnings											17,705						2,161
Total stockholders’ equity											280,485						207,758
Total Liabilities and Stockholders’ Equity										$	992,493					$	789,383

See unaudited condensed notes to consolidated financial statements

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NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of US Dollars – except per share data)

			Successor						Successor						Predecessor
			Three Month Period ended September 30, 2006						August 26, 2005 To September 30, 2005 As restated(*)						July 1, 2005 To August 25, 2005
			(unaudited)						(unaudited)						(unaudited)
Revenue				$	51,397					$	20,454					$	31,304
Gain (loss) on Forward Freight Agreements					16,036						(898	)					3,668
Time charter, voyage and port terminal expenses					(21,803	)					(10,179	)					(15,873	)
Direct vessel expenses					(5,630	)					(858	)					(1,296	)
General and administrative expenses					(3,870	)					(866	)					(3,216	)
Depreciation and amortization					(9,119	)					(3,847	)					(890	)
Interest income					1,485						242						489
Interest expense and finance cost, net					(10,648	)					(3,170	)					(687	)
Other income					(891	)					368						581
Other expense					(303	)					(337	)					(162	)
Income before equity in net earnings of affiliate companies					16,654						909						13,918
Equity in net Earnings of Affiliated Companies					230						128						148
Net income				$	16,884					$	1,037					$	14,066
Earnings per share, basic				$	0.27					$	0.03					$	16.08
Weighted average number of shares, basic					62,088,127						39,900,000						874,584
Earnings per share, diluted				$	0.27					$	0.02					$	16.08
Weighted average number of shares, diluted					62,088,127						50,180,185						874,584

			Successor						Successor						Predecessor
			Nine Month Period ended September 30, 2006						August 26, 2005 To September 30, 2005 As restated(*)						January 1, 2005 To August 25, 2005
			(unaudited)						(unaudited)						(unaudited)
Revenue				$	153,428					$	20,454					$	158,630
Gain (loss) on Forward Freight Agreements					19,363						(898	)					2,869
Time charter, voyage and port terminal expenses					(65,193	)					(10,179	)					(91,806	)
Direct vessel expenses					(14,841	)					(858	)					(5,650	)
General and administrative expenses					(11,507	)					(866	)					(9,964	)
Depreciation and amortization					(28,263	)					(3,847	)					(3,872	)
Interest income					2,613						242						1,350
Interest expense and finance cost, net					(30,641	)					(3,170	)					(1,677	)
Other income					1,749						368						1,426
Other expense					(445	)					(337	)					(757	)
Income before equity in net earnings of affiliate companies					26,263						909						50,549
Equity in net Earnings of Affiliated Companies					527						128						788
Net income				$	26,790					$	1,037					$	51,337
Earnings per share, basic				$	0.51					$	0.03					$	58.70
Weighted average number of shares, basic					52,470,143						39,900,000						874,584
Earnings per share, diluted				$	0.51					$	0.02					$	58.70
Weighted average number of shares, diluted					52,470,143						50,180,185						874,584

(*)	Note 16

See unaudited condensed notes to consolidated financial statements.

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NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of US Dollars)

			Successor						Successor						Predecessor
			Nine Month Period ended September 30, 2006						August 26, 2005 To September 30, 2005						January 1. 2005 To August 25, 2005
			(unaudited)						(unaudited)						(unaudited)
OPERATING ACTIVITIES
Net Income – as restated				$	26,790					$	1,037	(*)				$	51,337
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization – as restated					28,263						3,847	(*)					3,872
Amortization of deferred financing cost					1,789						159						425
Amortization of deferred dry dock costs					981						32						160
Amortization of backlog					132						(80	)					—
Provision for losses on accounts receivable					61						7						(880	)
Unrealized (gain)/loss on FFA derivatives					(12,010	)					8,775						23,793
Unrealized (gain)/loss on foreign exchange contracts					—						(120	)					338
Unrealized gain on options					(1,575	)					—						—
Unrealized gain on interest rate swaps					(284	)					(138	)					(403	)
Earnings in affiliates, net of dividends received					56						(128	)					185
Changes in operating assets and liabilities:
(Increase) decrease in restricted cash					(11,033	)					360						(1,005	)
(Increase) decrease in accounts receivable					(11,882	)					(8,267	)					11,768
(Increase) decrease in prepaid expenses and other current assets					(1,450	)					1,626						3,762
Increase in other long term assets					(392	)					—						—
Increase (decrease) in accounts payable					16,951						(6,709	)					(10,172	)
Decrease in accrued expenses					(69	)					(896	)					(1,229	)
Decrease in deferred voyage revenue					(2,537	)					(658	)					(5,032	)
Decrease in long term liability					(555	)					(28	)					(451	)
Increase (decrease) in derivative liability					13,242						653						(4,523	)
Payments for drydock and special survey costs					(2,481	)					(14	)					—
Net cash provided by (used in) operating activities					43,997						(542	)					71,945
INVESTING ACTIVITIES:
Deposit on exercise of vessel purchase option					(1,949	)					(1,869	)					—
Acquisition of vessels					(88,561	)					—						—
Purchase of property and equipment					(1,273	)					—						(4,264	)
Cash received from downstream merger					—						102,259						—
Net cash (used in) provided by investing activities					(91,783	)					100,390						(4,264	)
FINANCING ACTIVITIES:
Proceeds from long term loan					97,659						—						—
Repayment of long term debt					(45,681	)					(21,870	)					(50,506	)
Repayment of stockholder loans					—						(8,622	)					—
Dividends paid					(11,246	)					—						—
Issuance of common stock					65,453						—						—
Net cash provided by (used in) by financing activities					106,185						(30,492	)					(50,506	)
Increase in cash and cash equivalents					58,399						69,356						17,175
Cash and cash equivalents, beginning of period					37,737						63,933						46,758
Cash and cash equivalent, end of period				$	96,136					$	133,289					$	63,933
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest				$	28,739					$	847					$	2,358

(*)	Note 16

Non-cash investing and financing activities

•	See Notes 6 and 11 for issuance of shares in connection with the acquisition of vessels

See unaudited condensed notes to consolidated financial statements.

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NAVIOS MARITIME HOLDINGS INC.
CONSOLIDATED STATEMENTS STOCKHOLDERS’ EQUITY
(Expressed in thousands of US Dollars – except per share data)

			Number of Common Shares						Common Stock						Additional Paid-in Capital						Legal Reserve (Restricted)						Retained Earnings						Accumulated Other Comprehensive Income/(Loss)						Total Stockholders’ Equity
Balance December 31, 2004 (Predecessor)					874,584					$	87					$	60,570					$	289					$	113,845					$	—					$	174,791
Net income – January 1, 2005 to August 25, 2005					—						—						—						—						51,337						—						51,337
Movement in legal reserve					—						—						—						163						(163	)					—						—
Balance August 25, 2005 (Predecessor)					874,584						87						60,570						452						165,019						—						226,128
Elimination of historical stockholders’ equity					(874,584	)					(87	)					(60,570	)					(452	)					(165,019	)					—						(226,128	)
Push down of purchase accounting					—						—						607,967						—						—						—						607,967
Downstream merger					39,900,000						4						(423,719	)					—						—						—						(423,715	)
Issuance of common stock in connection with the acquisition of vessels (Note 6)					4,339,319						—						21,345						—						—						—						21,345
Net income August 26, 2005 to December 31, 2005					—						—						—						—						2,161						—						2,161
Balance December 31, 2005 (Successor)					44,239,319						4						205,593						—						2,161						—						207,758
Net income					—						—						—						—						26,790						—						26,790
Other comprehensive income/ (loss):
– Change in fair value of financial instruments					—						—						—						—						—						(14,397	)					(14,397	)
– Reclassification to earnings																																			993						993
Comprehensive income/ (loss)																																									13,386
Issuance of common stock in connection with the acquisition of vessels (Note 6)					1,161,535						—						5,134						—						—						—						5,134
Issuance of common stock in (Note 11)					16,687,273						2						65,451						—						—						—						65,453
Dividends declared and paid					—						—						—						—						(11,246	)					—						(11,246	)
Balance September 30, 2006 (unaudited)					62,088,127					$	6					$	276,178					$	—					$	17,705					$	(13,404	)				$	280,485

See unaudited condensed notes to consolidated financial statements.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

NOTE 1 — DESCRIPTION OF BUSINESS

On December 11, 2002, the shareholders of Anemos Maritime Holdings Inc. (‘‘Anemos’’) and Navios Corporation (‘‘Navios’’) each contributed their respective interests for shares of a newly created entity named Nautilus Maritime Holdings, Inc. (‘‘Nautilus’’), a Marshall Islands corporation. For accounting purposes, Anemos was considered the acquirer. During 2003, Nautilus changed its name to Navios Maritime Holdings Inc.

On August 25, 2005, pursuant to a Stock Purchase Agreement dated February 28, 2005, as amended, by and among International Shipping Enterprises, Inc. (‘‘ISE’’), Navios Maritime Holdings Inc. (‘‘Navios’’ or the ‘‘Company’’) and all the shareholders of Navios, ISE acquired Navios through the purchase of all of the outstanding shares of common stock. As a result of this acquisition, Navios became a wholly-owned subsidiary of ISE. In addition, on August 25, 2005, simultaneously with the acquisition of Navios, ISE effected a reincorporation from the State of Delaware to the Republic of the Marshall Islands through a downstream merger with and into its newly acquired wholly-owned subsidiary, whose name was and continued to be Navios Maritime Holdings Inc. (Note 3).

The purpose of the business combination was to create a leading international maritime enterprise focused on the: (i) transportation and handling of bulk cargoes through the ownership, operation and trading of vessels, (ii) forward freight agreements ‘‘FFAs’’ and (iii) ownership and operation of port and transfer station terminals. The Company operates a fleet of owned Ultra Handymax and Panamax vessels and a fleet of time chartered Panamax and Ultra Handymax vessels that are employed to provide worldwide transportation of bulk commodities. The Company actively engages in assessing risk associated with fluctuating future freight rates, fuel prices and foreign exchange and, where appropriate, will actively hedge identified economic risk with appropriate derivative instruments. Such economic hedges do not always qualify for accounting hedge treatment, and, as such, the usage of such derivatives could lead to material fluctuations in the Company's reported results from operations on a period-to-period basis.

The Company also operates a port and transfer facility located in Nueva Palmira, Uruguay. The facility consists of docks, conveyors and silo storage capacity totaling 270,440 tons.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)

Basis of presentation:    The accompanying interim consolidated financial statements are unaudited, but, in the opinion of management, reflect all adjustments for a fair presentation of Navios Maritime Holdings Inc. (‘‘Navios’’ or the ‘‘Company’’) consolidated financial position, and cash flows for the periods presented. Adjustments consist of normal, recurring entries. The results of operations for the interim periods are not necessarily indicative of results for the full year. The footnotes are condensed as permitted by the requirements for interim financial statements and accordingly, do not include information and disclosures required under United States Generally Accepted Accounting Principles (GAAP) for complete financial statements. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements and notes included in Navios’ annual report filed on Form 20-F with the Securities Exchange Commission.

The consolidated statements of cash flows for all period presented have been reclassified to reflect drydock and special survey costs as operating activities instead of investing activities to conform to the presentation adopted by the Company starting January 1, 2006.

(b)	Principles of consolidation:    The accompanying interim consolidated financial statements include the accounts of Navios Maritime Holdings Inc., a Marshall Islands corporation, and its majority owned subsidiaries (the ‘‘Company’’ or ‘‘Navios’’). All significant inter-company balances and transactions have been eliminated in the consolidated statements.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

Companies included in the consolidation:

Company Name			Nature / Vessel Name			Country of Incorporation
Navios Maritime Holdings Inc.			Holding Company			Marshall Is.
Navios Corporation			Sub-Holding Company			Marshall Is.
Navios International Inc.			Operating Company			Marshall Is.
Navimax Corporation			Operating Company			Marshall Is.
Navios Handybulk Inc.			Operating Company			Marshall Is.
Corporation Navios SA			Operating Company			Uruguay
Hestia Shipping Ltd.			Operating Company			Malta
Anemos Maritime Holdings			Sub-Holding Company			Marshall Is.
Navios Shipmanagement Inc.			Management Company			Marshall Is.
Achilles Shipping Corporation			Navios Achilles			Marshall Is.
Apollon Shipping Corporation			Navios Apollon			Marshall Is.
Herakles Shipping Corporation			Navios Herakles			Marshall Is.
Hios Shipping Corporation			Navios Hios			Marshall Is.
Ionian Shipping Corporation			Navios Ionian			Marshall Is.
Kypros Shipping Corporation			Navios Kypros			Marshall Is.
Meridian Shipping Enterprises Inc.			Navios Meridian			Marshall Is.
Mercator Shipping Corporation			Navios Mercator			Marshall Is.
Libra Shipping Enterprises Corp.			Navios Libra II			Marshall Is.
Alegria Shipping Corporation			Navios Alegria			Marshall Is.
Felicity Shipping Corporation			Navios Felicity			Marshall Is.
Gemini Shipping Corporation			Navios Gemini S			Marshall Is.
Arc Shipping Corporation			Navios Arc			Marshall Is.
Galaxy Shipping Corporation			Navios Galaxy I			Marshall Is.
Horizon Shipping Enterprises Corporation			Navios Horizon			Marshall Is.
Magellan Shipping Corporation			Navios Magellan			Marshall Is.
Star Maritime Enterprises Corporation			Navios Star			Marshall Is.
Acropolis Chartering & Trading Inc.(i)			Brokerage Company			Liberia

(i)	The company is 50% owned by Navios and is accounted for on the equity basis.

(c)

Recent Accounting Pronouncements:    In September 2006, the SEC issued Staff Accounting Bulletin No. 108, ‘‘Considering the Effect of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements’’ (‘‘SAB No. 108’’). SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of materiality assessment. SAB No. 108 establishes a dual approach that requires quantification of financial statements errors based on both the roll-over method and the iron curtain method regarding the effects of each of the Company’s balance sheets and statement of operations and the related financial statement disclosures. SAB No. 108 permits existing public companies to record the cumulative effect of initially applying this approach in the first year ending after November 15, 2006, by recording the necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustments recorded to the opening balance of retained earnings. The Company does not expect the adoption of SAB No. 108 to have an effect on its financial statements.

In September 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 158 (SFAS 158) ‘‘Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106 and 132(R)’’. SFAS 158 improves financial reporting by requiring an employer to recognize the

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

overfunded and underfunded status of a defined benefit retirement plan (other than multiemployer plan) as an asset or liability in its statement of financial position and recognize changes in the funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statements of financial position, with limited exceptions. The adoption of this standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company as of the end of the fiscal year ending on December 31, 2006.

In September 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 157 (SFAS 157) ‘‘Fair Value Measurement’’. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier applications is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The provisions of SFAS 157 should be applied prospectively as of the beginning of the fiscal year in which it is initially applied except for certain cases where it should be applied retrospectively. The adoption of this Accounting Standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company for the fiscal year beginning on January 1, 2008.

In March 2006, the Financial Accounting Standard Board issued Statement of Financial Accounting Standards No. 156 (SFAS 156) ‘‘Accounting for Servicing of Financial Assets — an amendment of FASB Statements No. 140’’. SFAS 156 amends SFAS 140 requiring that all separately recognized servicing assets and servicing liabilities be measured at fair value, if practicable. SFAS 156 also permits, but does not require, the subsequent measurement of servicing and servicing liabilities. SFAS 156 is effective for the first fiscal year that begins after September 15, 2006. The adoption of this Accounting Standard is not expected to have a material effect on the consolidated financial statements. This statement will be effective for the Company for the fiscal year beginning on January 1, 2007.

NOTE 3:    ACQUISITION/ REINCORPORATION

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

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

The following table presents the unaudited pro forma results as if the acquisition, downstream merger and related financing had occurred at the beginning of the nine month period ended September 30, 2005 (in thousands, except for numbers of and amounts per share):

			Nine month period ended September 30, 2005
			(unaudited)
Gross revenues				$	179,084
Net income				$	23,698
Basic earnings per share				$	0.59
Diluted earnings per share				$	0.57
Average shares outstanding during the period presented					39,900,000
Warrants assumed to be outstanding					65,550,000
Proceeds to Company on exercise of warrants				$	327,750,000
Assumed market price for repurchase of incremental shares				$	5.12
Number of shares assumed to be repurchased					64,032,463
Incremental shares on exercise of warrants					1,467,537
Total number of shares assumed to be outstanding for dilution purposes					41,367,537

The unaudited pro forma results are for comparative purposes only and do not purport to be indicative of the results that would have actually been obtained if the acquisition/reincorporation, had occurred at the beginning of the periods presented.

NOTE 4:    CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of the following:

			September 30, 2006						December 31, 2005
Cash on hand and at banks				$	28,627					$	22,089
Short-term investments (Note 5)					64,346						—
Short-term deposits and highly liquid funds					3,163						15,648
Total cash and cash equivalents				$	96,136					$	37,737

NOTE 5:    SHORT TERM INVESTMENTS

The Company invested $64,570 in debt securities (commercial papers) with a face value of $64,632, with original maturities of three months or less. These securities are bought and held principally for the purpose of selling them in the near term and, therefore, have been classified as trading securities and are included in ‘‘Cash and cash equivalents’’ in the accompanying consolidated balance sheet.

At September 30, 2006, the fair value of these debt securities was $64,346. The unrealized holding gain on trading securities at September 30, 2006, was $10 and has been included in other income in the consolidated statement of operations.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

NOTE 6:    VESSELS, PORT TERMINAL AND OTHER FIXED ASSETS

Vessels			Cost						Accumulated Depreciation						Net Book Value
Balance December 31, 2005				$	342,271					$	(3,188	)				$	339,083
Additions					131,818						(15,423	)					116,395
Balance September 30, 2006				$	474,089					$	(18,611	)				$	455,478

Port Terminal			Cost						Accumulated Depreciation						Net Book Value
Balance December 31, 2005				$	26,994					$	(295	)				$	26,699
Additions					99						(639	)					(540	)
Balance September 30, 2006				$	27,093					$	(934	)				$	26,159

Other fixed assets			Cost						Accumulated Depreciation						Net Book Value
Balance December 31, 2005				$	810					$	(595	)				$	215
Additions					1,082						(139	)					943
Balance September 30, 2006				$	1,892					$	(734	)				$	1,158

Total			Cost						Accumulated Depreciation						Net Book Value
Balance December 31, 2005				$	370,075					$	(4,078	)				$	365,997
Additions					132,999						(16,201	)					116,798
Balance September 30, 2006				$	503,074						(20,279	)				$	482,795

During December 2005 and January 2006, the Company acquired four vessels for a total consideration of approximately $119.8 million ($24.8 million relates to vessel acquired in 2006) from companies affiliated with the Company’s CEO. The purchase price was paid with $80.3 million ($15.2 million relates to vessel acquired in 2006) drawn from the Company’s credit facility, $13.0 million ($4.5 million related to vessel acquired in 2006) from available cash and issuance of 5,500,854 shares of Company’s common stock. The stock issued in this transaction was valued at $4.96 per share for the first two vessels, $4.82 per share for the third vessel and $4.42 per share for the fourth vessel, for a total value of $25.5 million (Note 11). The values per share are based on quoted market prices at the respective delivery dates of the vessels.

Per SFAS 95, when some transactions are part cash and part non-cash, only the cash portion shall be reported in the statement of cash flows. The non cash component related to the issuance of common stock was $5.1 million for the nine month period ended September 30, 2006.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

NOTE 7:    INTANGIBLE ASSETS OTHER THAN GOODWILL

Intangible assets as of September 30, 2006 and December 31, 2005 consist of the following:

Successor:			Balance						Accumulated Amortization						Net Book Value September 30, 2006						Balance						Accumulated Amortization						Net Book Value December 31, 2005
Trade name				$	90,000					$	(3,090	)				$	86,910					$	90,000					$	(986	)				$	89,014
Port terminal operating rights					31,000						(851	)					30,149						31,000						(272	)					30,728
Favorable lease terms					87,884						(10,034	)					77,850						125,167						(7,727	)					117,440
Backlog assets					17,330						(8,264	)					9,066						16,830						(2,067	)					14,763
Backlog liabilities					(16,200	)					8,210						(7,990	)					(16,200	)					2,144						(14,056	)
Total				$	210,014					$	(14,029	)				$	195,985					$	246,797					$	(8,908	)				$	237,889

For the nine month period ended September 30, 2006 and the period from August 26, 2005 to December 31, 2005, the net amount of $30.3 million and $13.5 million, respectively, of favorable lease terms related to leases with purchase options that had been transferred to fixed assets and capitalized as part of the cost of the purchased vessels upon delivery of the vessel.

NOTE 8:    BORROWINGS

On July 12, 2005, a new senior secured credit facility, with HSH Nordbank AG, was established by ISE to provide a portion of the funds necessary to acquire Navios and provide working capital for the Successor Company. This facility was assumed by the Company, and was fully drawn on August 25, 2005. Of the $514.4 million borrowed under this facility, $412.0 million was used in connection with the acquisition/reincorporation. On December 21, 2005, the Company restructured the terms of its credit facility with HSH Nordbank AG under which it increased the borrowing amount up to $649 million. Of the $649 million, $435million was related to the outstanding balance of the credit facility described above and up to $214 million was set aside to finance the acquisition of ten vessels. As of September 30, 2006, the Company had acquired the above ten vessels by utilizing $204 million of the above mentioned $214 million facility. The maximum allowable amounts drawn down for each vessel have been in accordance with the criteria set by the Bank. The drawings are complete and the remaining balance of the facility is not available for use by the Company.

NOTE 9:    DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Interest rate risk

The Company entered into interest rate swap contracts as economic hedges to its exposure to variability in its floating rate long term debt. Under the terms of the interest rate swaps, the Company and the bank agreed to exchange at specified intervals, the difference between paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amounts and maturities. Interest rate swaps allow the Company to convert long-term borrowings issued at floating rates into equivalent fixed rates. Even though the interest rate swaps were entered into for economic hedging purposes, the derivatives described below do not qualify for accounting purposes as cash flow hedges, under FASB Statement No. 133, Accounting for derivative instruments and hedging activities. Consequently, the Company recognizes the change in fair value of these derivatives in the statement of operations.

The unrealized losses on interest rate swaps for the three month period ended September 30, 2006 was $1,308 and for the 36 days ended September 30, 2005 and the one month and 25 days ended August 25, 2005 the unrealized gain was $138 and $292, respectively. The unrealized

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

gains on interest rate swaps for the nine month period ended September 30, 2006 was $284 and for the 36 days ended September 30, 2005 and for the seven months and 25 days ended August 25, 2005, the unrealized gain was $138 and $403, respectively. As of September 30, 2006 and December 31, 2005, the outstanding net liability was $704 and $915, respectively.

The swap agreements have been entered into by subsidiaries. The Royal Bank of Scotland swap agreements have been collateralized by a cash deposit of $1.8 million. The Alpha Bank swap agreement has been guaranteed by the Company. The HSH Nordbank swap agreements are bound by the same securities as the secured credit facility.

Foreign Currency Risk

The Company has not entered into any new Foreign Exchange Currency contracts (FEC) since March 28, 2005. During the period January 1, 2005 to March 28, 2005, the Company purchased €3,000 at an average rate of 1.30 with a sales value of $3,923. These contracts all matured and settled as of December 31, 2005.

The net (loss) gain from FECs recognized in the consolidated statement of operations amounted to $0 for the three and nine months ended September 30, 2006, and $(64) for the 36 days ended September 30, 2005 and $63 for the one month and 25 days ended August 25, 2005 and $(462) for the seven months and 25 days ended August 25, 2005; The unrealized gain (loss) from FECs amounted to $0 for the three and nine month periods ended September 30, 2006 and $120 for the period August 26 to September 30, 2005, $63 for the period July 1 to August 25, 2005 and $(338) for the period January 1 to August 25, 2005.

Forward Freight Agreements (FFAs) and options on FFAs

The Company actively trades in the FFAs market with both an objective to utilize them as economic hedging instruments that are highly effective in reducing the risk on specific vessel(s), freight commitments, or the overall fleet or operations, and to take advantage of short term fluctuations in the market prices. FFAs trading generally have not qualified as hedges for accounting purposes, except as discussed below, and as such, the trading of FFAs could lead to material fluctuations in the Company’s reported results from operations on a period to period basis.

Dry bulk shipping FFAs generally have the following characteristics: they cover periods from one month to one year; they can be based on time charter rates or freight rates on specific quoted routes; they are executed between two parties and give rise to a certain degree of credit risk depending on the counterparties involved; they are settled monthly based on publicly quoted indices.

For FFAs that qualify for hedge accounting the changes in fair values of the effective portion representing unrealized gains or losses are recorded under ‘‘Accumulated Other Comprehensive Income/(Loss)’’ in the stockholders’ equity while the unrealized gains or losses of the FFAs not qualifying for hedge accounting together with the ineffective portion of those qualifying for hedge accounting ($3.5 million and $4.0 million loss for the three and nine month periods ended September 30, 2006, respectively), are recorded in the statement of operations under ‘‘Gain/(Loss) on Forward Freight Agreements’’. The gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ will be reclassified to earnings under ‘‘Revenue’’ in the statement of operations in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassification to earnings commenced in the third quarter of 2006 and will extend until December 31, 2007, depending on the period or periods during which the hedged forecasted transactions will affect earnings. The amount of losses included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ as of September 30, 2006, which is expected to be reclassified to earnings during the next twelve months is estimated to be $10.9 million. For the three and nine month periods ended September 30, 2006, $1.0 million gains/(losses) included in ‘‘Accumulated Other Comprehensive Income/(Loss)’’ had been reclassified to earnings.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

The net gains from FFAs for the three month period ended September 30, 2006 amounted to $16,036 and the net (loss) gain from FFAs for the 36 days ended September 30, 2005 and for the one month and 25 days ended August 25, 2005 amounted to $(898) and $3,668, respectively The net gain for the nine month period ended September 30, 2006 amounted to $19,363 and the net (loss) gain for the 36 days ended September 30, 2005 and the 25 days and seven months ended August 25, 2005 amounted to $(898) and $2,869, respectively.

During the three month period ended September 30, 2006, the 36 days ended September 30, 2005 and the one month and 25 days ended August 25, 2005 the changes in the unrealized gains (loss) on FFAs amounted to $9,131, $(8,775) and $(1,226) respectively. During the nine month period ended September 30, 2006, the 36 days ended September 30, 2005 and the seven months and 25 days ended August 25, 2005, the changes in the net unrealized gains (losses) on FFAs (including option on FFAs) amounted to $13,585, $(8,775) and $(23,793), respectively.

The open dry bulk shipping FFAs at net contracted (strike) rate after consideration of the fair value settlement rates is summarized as follows:

Forward Freight Agreements (FFAs) including options on FFAs			September 30, 2006						December 31, 2005
Short term FFA derivative asset				$	114,844					$	45,818
Long term FFA derivative asset					2,143						—
Short term FFA derivative liability					(107,772	)					(39,578	)
Long term FFA derivative liability					(2,796	)					—
Net fair value on FFA contracts				$	6,419					$	6,240
NOS FFAs portion of fair value transferred to NOS derivative account (*)				$	(12,402	)				$	(331	)
LCH portion of fair value transferred to LCH derivative account (**)					(1,097	)					—

The open interest rate swaps, after consideration of their fair value, are summarized as follows:

Interest Rate Swaps			September 30, 2006						December 31, 2005
Short term interest rate swap asset				$	—					$	69
Long term interest rate swap asset					—						28
Short term interest rate swap liability					266						(414	)
Long term interest rate swap liability					(970	)					(598	)
Net fair value of interest rate swap contract				$	(704	)				$	(915	)

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

Reconciliation of balances

Total of balances related to derivatives and financial instruments:

			September 30, 2006						December 31, 2005
FFAs				$	6,419					$	6,240
NOS FFAs portion of fair value transferred to NOS derivative account(*)					(12,402	)					(331	)
NOS FFAs portion of fair value transferred to LCH derivative account(**)					(1,097	)					—
Interest rate swaps					(704	)					(915	)
Total				$	(7,784	)				$	4,994

Balance Sheet Values

			September 30, 2006						December 31, 2005
Total short term derivative asset				$	101,345					$	45,556
Total long term derivative asset					2,143						28
Total short term derivative liability					(107,506	)					(39,992	)
Total long term derivative liability					(3,766	)					(598	)
Total				$	(7,784	)				$	4,994

(*)	NOS: The Norwegian Futures and Options Clearing House (NOS Clearing ASA).

(**)	LCH: The London Clearing House

NOTE 10:    EMPLOYEE BENEFIT PLANS

Retirement Saving Plan

The Company sponsors an employee saving plan covering all of its employees in the United States. The Company’s contributions to the employee saving plan were approximately $32.2, $13.9 and $21.6 during the three month period ended September 30, 2006, the 36 days ended September 30, 2005 and the one month and 25 days ended August 25, 2005, respectively, and approximately $91.8, $14.6 and $95.9 during the nine month period ended September 30, 2006, the 36 days ended September 30, 2005 and the seven months and 25 days ended August 25, 2005, respectively, which did not include any discretionary contributions.

Post-employment medical and life insurance benefits

The Company effective May 31, 2006, terminated its post retirement medical and life insurance benefit programs for the five U.S. retirees that were eligible to these benefits prior to the program elimination in December 2001. The Company paid $502 to terminate these programs. As a result of this termination and the release of the respective accrued liabilities the Company realized a gain of $295 in the nine month periods ended September 30, 2006. The unfunded liability related to post-retirement medical and life insurance is recognized based on actuarial valuations. The current portion of the liability ($0: September 30, 2006, $47: December 31, 2005) is included in accrued expenses and the non-current portion of the liability ($0: September 30, 2006, $770: December 31, 2005) is included in other long term liabilities.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

The Company uses December 31 as the measurement date of its plans.

Components of net periodic benefit cost for the three months ended September 30, 2006, the 36 days ended September 30, 2005 and the one month and 25 days ended August 25 2005 are as follows:

			Pension Benefits																		Other Benefits
			Successor September 30, 2006						Successor September 30, 2005						Predecessor August 25, 2005						Successor September 30, 2006						Successor September 30, 2005						Predecessor August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)						(unaudited)						(unaudited)
Service cost				$	5					$	1					$	1					$	11					$	—					$	—
Interest cost					4						1						4						—						4						7
Plan participants’ contributions					—						—						—						—						—						—
Amendments					—						—						—						—						—						—
Amortization of prior service cost					—						—						—						—						—						—
Actuarial (gain) loss					—						—						10						—						—						8
Benefit obligation at end of the period				$	9					$	2					$	15					$	11					$	4					$	15

Components of net periodic benefit cost for the nine months ended September 30, 2006, the 36 days ended September 30, 2005 and the seven months and 25 days ended August 25 2005 are as follows:

			Pension Benefits																		Other Benefits
			Successor September 30, 2006						Successor September 30, 2005						Predecessor August 25, 2005						Successor September 30, 2006						Successor September 30, 2005						Predecessor August 25, 2005
			(unaudited)						(unaudited)						(unaudited)						(unaudited)						(unaudited)						(unaudited)
Service cost				$	15					$	1					$	4					$	—					$	—					$	—
Interest cost					12						1						13						33						4						28
Plan participants’ contributions					—						—						—						—						—						—
Amendments					—						—						—						—						—						—
Amortization of prior service cost					—						—						—						—						—						—
Actuarial (gain) loss					—						—						10						—						—						8
Benefit obligation at end of the period				$	27					$	2					$	27					$	33					$	4					$	36

All of the Company’s plans are unfunded.

NOTE 11:    COMMON STOCK

In order to raise capital for its expansion plans in South America, Navios induced certain warrant holders (Qualified Institutional Buyers and Institutional Accredited Investors ‘‘QIBAIs’’) to early exercise their warrants by lowering the exercise price from $5.00 to $4.10 per share, provided that the warrants must be exercised immediately upon execution of the new warrant exercise agreement. This reduced exercise price transaction was only offered privately to QIBAIs which were among the top fifteen warrant holders and had no direct relationship with Navios, with the exception of Ms. Angeliki Frangou, Navios’ Chairman and CEO, who exercised all of her 6,666,280 warrants in

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

order to demonstrate her commitment to the transaction and proposed capital expansion program. Total warrants affected by this inducement program were 15,978,280 out of 65,550,000 outstanding warrants which were exercised on June 6, 2006, resulting in total proceeds of approximately $65.5 million and issuance of 15,978,280 unregistered common shares. The reduction of the warrant exercise price from $5.00 to $4.10 per share did not have any accounting consequence since the fair value of the modified warrant was less than the fair value of the original warrant immediately prior to the modification.

On August 10, 2006, Navios issued 708,993 additional shares to its financial advisors for services rendered in connection with the capital raised from the re-pricing of warrants. These services were valued using the market value of the aforementioned shares as of the date the transaction was completed, without any subsequent measurement being necessary.

Pursuant to a registration rights agreement, Navios filed a Form F-3/A with the Securities and Exchange Commission on September 8, 2006 (No. 333-136936), registering the resale of the common stock related to the exercise of the warrants and the common stock issued to its financial advisors (with the exception of Ms. Angeliki Frangou’s shares which will remain unregistered) and had such registration statement declared effective on September 13, 2006.

Giving effect to this the warrant exercise transaction stated above, the additional 708,993 shares issued to the Company’s financial advisors and the 1,161,535 shares issued in connection with the acquisition of vessel Navios Gemini S (see note 6), Navios had 62,088,127 shares outstanding and 49,571,720 warrants outstanding as of September 30, 2006 (44,239,319 shares outstanding and 65,550,000 warrants outstanding as of December 31, 2005).

NOTE 12:    COMMITMENTS AND CONTINGENCIES:

The Company as of September 30, 2006 and December 31, 2005 was contingently liable for letters of guarantee and letters of credit amounting to $528 and $500 respectively, issued by various banks in favor of various organizations. These are collateralized by cash deposits, which are included as a component of restricted cash.

As of September 30, 2006 there were no amounts due under the existing guarantees to third parties as opposed to $2.3 million at December 31, 2005, due to third parties where the Company irrevocably and unconditionally guarantees subsidiaries obligations under dry bulk shipping FFAs. The guarantees remain in effect for a period of six months following the last trade date, which was June 21, 2006.

The Company is involved in various disputes and arbitration proceedings arising in the ordinary course of business. Provisions have been recognized in the financial statements for all such proceedings where the Company believes that a liability may be probable, and for which the amounts are reasonably estimable, based upon facts known at the date the financial statements were prepared. In the opinion of management, the ultimate disposition of these matters is immaterial and will not adversely affect the Company's financial position, results of operations or liquidity.

The Company, in the normal course of business, entered into contracts to time charter-in vessels for various periods through February 2014.

F-16

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Table of Contents

NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

NOTE 13:    TRANSACTIONS WITH RELATED PARTIES

Vessel acquisitions:    On December 19, 2005 Navios signed agreements to purchase four Panamax vessels from Maritime Enterprises Management S.A., a company affiliated with the Company’s CEO and the Manager of the selling owning companies of the vessels below. On December 22, 2005 Navios took delivery of the first two vessels the Libra II built in 1995 and the Navios Alegria built in 2004, owned by Sealand Access S.A. and Victory Confidence S.A., respectively. The third vessel, the Navios Felicity built in 1997 and owned by Mercury Marine S.A., was delivered on December 27, 2005 and the fourth vessel, the Navios Gemini S built in 1994 and owned by Shipcare Dominion S.A., was delivered on January 5, 2006. The total acquisition cost for the four new vessels including backlogs was $119.8 million (cost related to the three vessels delivered during 2005 was $95.0 million) and was funded with (a) $13.0 million ($8.5 million related to vessels delivered in 2005) of Navios’ available cash; (b) $80.3 million ($65.1 million related to vessels delivered in 2005) from bank financing and (c) through the issuance of 5,500,854 shares (4,339,319 shares relates to vessels delivered in 2005) of Navios authorized capital at $4.96 per share for Navios Alegria (1,840,923 shares) and Libra II (1,227,282 shares), $4.82 per share for Navios Felicity (1,271,114 shares) and $4.42 per share for Navios Gemini S. (1,161,535 shares). Navios believes that the terms and provisions of the purchase agreements of these vessels were the same as those that would have been available with a non-related third party.

Office rent:    On January 2, 2006, Navios Corporation and Navios Shipmanagement Inc., two wholly owned subsidiaries of Navios, entered into two lease agreements with Goldland Ktimatiki — Ikodomiki — Touristiki and Xenodohiaki Anonimos Eteria, a Greek corporation which is partially owned by relatives of Angeliki Frangou, Navios’ Chairman and Chief Executive Officer. The lease agreements provide for the leasing of two facilities located in Piraeus, Greece, of approximately 2,034.3 square meters and houses the operations of most of the Company’s subsidiaries. The total annual lease payments are EUR 420 (approximately $500) and the lease agreements expire in 2017. The Company believes the terms and provisions of the lease agreements were the same as those that would have been agreed with a non-related third party. The lease payments are subject to annual adjustments starting from the third year which are based on the inflation rate prevailing in Greece as reported by the Greek State at the end of each year.

Purchase of services:    The Company utilizes Acropolis Chartering and Shipping Inc. (‘‘Acropolis’’) as a broker. Commissions paid to Acropolis for the three month period ended September 30, 2006, the 36 days ended September 30, 2005 and the one month and 25 days ended August 25, 2005 were $94, $0 and $150, respectively and for the nine month period ended September 30, 2006, the 36 days ended September 30, 2005 and the seven months and 25 days ended August 25, 2005, were $187, $0 and $455, respectively. The Company owns fifty percent of the common stock of Acropolis. During the three month period ended September 30, 2006, the 36 days ended September 30, 2005 and the one month and 25 days ended August 25, 2005, the Company received dividends of $0, $0 and $490, respectively and for the nine month period ended September 30, 2006, the 36 days ended September 30, 2005 and the seven months and 25 days ended August 25, 2005, the Company received dividends of $296, $0 and $972, respectively.

Loans from stockholders:    Prior to acquisition of the Company on August 25, 2005, an initial stockholder of International Shipping Enterprises, Inc. (the ‘‘ISE’’), who became an officer and principal stockholder of the Company, advanced a total of $8.6 million to ISE in the form of non-interest bearing loans. These funds were used to pay costs related to the acquisition and were repaid by the Company following completion of the August 25, 2005 transaction.

Balances due to related parties:    Included in the trade accounts payable at September 30, 2006 and December 31, 2005 is an amount of $64 and $90, which is due to Acropolis Chartering and Shipping Inc.

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Table of Contents

NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

Exercise of warrants:    On June 6, 2006, Navios issued 15,978,280 shares of common stock upon exercise 15,978,280 of its 65,550,000 outstanding warrants. Ms. Angeliki Frangou, Navios chairman and principal stockholder, participated in this transaction and paid approximately $27.3 million to the Company to exercise all of her 6,666,280 warrants (Note 11).

NOTE 14:    SEGMENT INFORMATION

The Company has two reportable segments from which it derives its revenues: Vessel Operations and Port Terminal. The reportable segments reflect the internal organization of the Company and are strategic businesses that offer different products and services. The Vessel Operations business consists of transportation and handling of bulk cargoes through ownership, operation, and trading of vessels, freight, and forward freight agreements. The Port Terminal business consists of operating a port and transfer station terminal.

The Company measures segment performance based on net income. Inter-segment sales and transfers are not significant and have been eliminated and are not included in the following tables. Summarized financial information concerning each of the Company’s reportable segments is as follows:

			Vessel Operations						Port Terminal						Total
			Successor Three Month Period ended September 30, 2006						Successor Three Month Period ended September 30, 2006						Successor Three Month Period ended September 30, 2006
Revenue				$	48,234					$	3,163					$	51,397
Gain (loss) on forward freight agreements					16,036						—						16,036
Interest income					1,483						2						1,485
Interest expense and finance cost					(10,648	)					—						(10,648	)
Depreciation and amortization					(8,711	)					(408	)					(9,119	)
Equity in net income of affiliated companies					230						—						230
Net income					15,095						1,789						16,884
Total assets					918,971						73,522						992,493
Capital expenditures					876						53						929
Investments in affiliates				$	601					$	—					$	601

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

			Vessel Operations												Port Terminal												Total
			Successor August 26, 2005 to September 30, 2005						Predecessor July 1, 2005 To August 25, 2005						Successor August 26, 2005 to September 30, 2005						Predecessor July 1, 2005 To August 25, 2005						Successor August 26, 2005 to September 30, 2005						Predecessor July 1, 2005 To August 25, 2005
Revenue				$	19,543					$	29,519					$	911					$	1,785					$	20,454					$	31,304
Gain (loss) on forward freight agreements					(898	)					3,668						—						—						(898	)					3,668
Interest income					242						488						—						1						242						489
Interest expense and finance cost					(3,170	)					(687	)					—						—						(3,170	)					(687	)
Depreciation and amortization (As restated, Note 16)					(3,705	)					(779	)					(142	)					(111	)					(3,847	)					(890	)
Equity in net income of affiliated companies					128						148						—						—						128						148
Net income (As restated, Note 16)					583						13,068						454						998						1,037						14,066
Total assets					669,907						256,867						73,245						28,088						743,152						284,955
Capital expenditures					1,883	(*)					479						—						944						1,883						1,423
Investments in affiliates				$	500					$	372					$	—					$	—					$	500					$	372

			Vessel Operations						Port Terminal						Total
			Successor Nine Month Period ended September 30, 2006						Successor Nine Month Period ended September 30, 2006						Successor Nine Month Period ended September 30, 2006
Revenue				$	146,384					$	7,044					$	153,428
Gain (loss) on forward freight agreements					19,363						—						19,363
Interest income					2,609						4						2,613
Interest expense and finance cost					(30,641	)					—						(30,641	)
Depreciation and amortization					(27,044	)					(1,219	)					(28,263	)
Equity in net income of affiliated companies					527						—						527
Net income					23,910						2,880						26,790
Total assets					918,971						73,522						992,493
Capital expenditures					137,368	(**)					99						137,467
Investments in affiliates				$	602					$	—					$	602

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

			Vessel Operations												Port Terminal												Total
			Successor August 26, 2005 to September 30, 2005						Predecessor January 1, 2005 To August 25, 2005						Successor August 26, 2005 to September 30, 2005						Predecessor January 1, 2005 To August 25, 2005						Successor August 26, 2005 to September 30, 2005						Predecessor January 1, 2005 To August 25, 2005
Revenue				$	19,543					$	152,668					$	911					$	5,962					$	20,454					$	158,630
Gain (loss) on forward freight agreements					(898	)					2,869						—						—						(898	)					2,869
Interest income					242						1,349						—						1						242						1,350
Interest expense and finance cost					(3,170	)					(1,677	)					—						—						(3,170	)					(1,677	)
Depreciation and amortization (As restated, Note 16)					(3,705	)					(3,391	)					(142	)					(481	)					(3,847	)					(3,872	)
Equity in net income of affiliated companies					128						788						—						—						128						788
Net income (As restated, Note 16)					583						48,517						454						2,820						1,037						51,337
Total assets					669,907						256,867						73,245						28,088						743,152						284,955
Capital expenditures					1,883	(*)					777						—						3,487						1,883						4,264
Investments in affiliates				$	500					$	372					$	—					$	—					$	500					$	372

(*)	Includes $5.7 million transferred from vessel purchase options in connection with the acquisition of one option vessel and $1.6 million transferred from the 10% deposit paid when Navios exercised its options to purchase the chartered in vessels.

(**)

Includes $5.1 million non-cash consideration in the form of common stock issued in connection with the purchase of one vessel, $30.3 million transferred from vessel purchase options in connection with the acquisition of four option vessels, $0.5 million transferred from vessels’ backlog in connection with the purchase of one vessel and $8.3 million transferred from the 10% deposits paid when Navios exercised its options to purchase the chartered-in vessels.

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Table of Contents

NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

NOTE 15:    EARNINGS PER COMMON SHARE

The downstream merger of ISE with and into Navios (Note 3) resulted in the cancellation of the existing Navios common shares to reflect those issued by ISE. All earnings per share calculations for periods prior to the August 25, 2005 acquisition and merger (Navios predecessor) are based on the average number of Navios shares outstanding during the respective periods.

Earning per share for periods subsequent to the acquisition and merger are calculated by dividing net income by the average number of shares of Navios successor outstanding during the period. The 49,571,720 and 58,760,694 weighted average warrants outstanding for the three and nine month periods ended September 30, 2006 respectively, have been excluded from the calculation of diluted earnings per share since the effect of their assumed conversion would have been anti-dilutive.

			Successor						Successor						Predecessor
			Three Month Period ended September 30, 2006						August 26, 2005 To September 30, 2005						July 1, 2005 To August 25, 2005
Numerator:
Net income – as restated				$	16,884					$	1,037(	*)				$	14,066
Denominator:
Denominator for basic earning per share – weighted average shares					62,088,127						39,900,000						874,584
Dilutive potential common shares
Warrants outstanding – weighted average					49,571,720						65,550,000						—
Proceeds on exercises of warrants				$	247,858,600					$	327,750,000						—
Assumed number of shares to be repurchased					53,257,112						55,269,815						—
(Anti)-dilutive effect of securities – warrants					(3,685,392	)					10,280,185						—
Denominator for diluted earnings per share – adjusted weighted shares and assumed conversions					62,088,127						50,180,185						874,584
Basic earnings per share – as restated				$	0.27					$	0.03(	*)				$	16.08
Diluted earnings per share – as restated				$	0.27					$	0.02(	*)				$	16.08

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

			Successor						Successor						Predecessor
			Nine Month Period ended September 30, 2006						August 26, 2005 To September 30, 2005						January 1, 2005 To August 25, 2005
Numerator:
Net income – as restated				$	26,790					$	1,037	(*)				$	51,337
Denominator:
Denominator for basic earning per share – weighted average shares					52,470,143						39,900,000						874,584
Dilutive potential common shares
Warrants outstanding – weighted average					58,760,694						65,550,000						—
Proceeds on exercises of warrants				$	293,803,470					$	327,750,000						—
Assumed number of shares to be repurchased					63,538,813						55,269,815						—
(Anti)-dilutive effect of securities – warrants					(4,778,119	)					10,280,185						—
Denominator for diluted earnings per share – adjusted weighted shares and assumed conversions					52,470,143						50,180,185						874,584
Basic earnings per share – as restated				$	0.51					$	0.03	(*)				$	58.7
Diluted earnings per share – as restated				$	0.51					$	0.02	(*)				$	58.7

(*)	Note 16

NOTE 16:    RESTATEMENT OF THIRD QUARTER 2005 BALANCES

In connection with the acquisition of Navios by International Shipping Enterprises, Inc. and the subsequent downstream merger that occurred on August 25, 2005, the Company allocated a portion of the purchase price to the fair value of favorable lease contracts associated with its vessels. Some of these lease contracts include purchase options whereby the Company can acquire the vessel for a fixed price before the end of the lease term. The option value of the intangible asset associated with the purchase option for the vessels is not amortized and when the purchase options are exercised, it will be capitalized upon delivery of the vessel as part of the cost of the vessel and will be depreciated over the remaining useful life of the vessel.

The Company’s policy is to recognize lease expense on a straight-line basis over the lease term. The Company’s calculation of lease expense for the successor period from August 26, 2005 to September 30, 2005 was inconsistent with this policy. The Company has corrected lease expense for this period to be consistent with this policy.

That resulted in non-cash adjustments that had no effect on the Company’s cash flow from operations or cash position or financial position. They also did not have an effect on the Predecessor periods since the adjustments relate to post-acquisition amortization periods.

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NAVIOS MARITIME HOLDINGS INC.
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in thousands of US Dollars – except per share data)

These adjustments had the following impact on the Company third quarter 2005 (Successor) financial statements:

	•	Increased amortization expense for the Successor period August 26, 2005 to September 30, 2005 by $1.66 million.

	•	Reduced the intangible asset associated with the favorable leases at September 30, 2005 by $1.66 million.

	•	Reduced net income for the Successor period August 26, 2005 to September 30, 2005 by $1.66 million.

The following items in the Consolidated Statement of Operations were restated as follows:

CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands of U.S. Dollars)

			SUCCESSOR
			August 26, 2005 to September 30, 2005 (Previously Reported in F-1A)						August 26, 2005 to September 30, 2005 (Restated)
Depreciation and amortization					($2,187	)				$	(3,847	)
Income before equity in net earnings of affiliated companies				$	2,569					$	909
Net income				$	2,697					$	1,037
Net income per share
Basic				$	0.07					$	0.03
Diluted				$	0.05					$	0.02

NOTE 17:    SUBSEQUENT EVENTS

	(a)	On October 30, 2006, the Board of Directors resolved that a dividend of $0.0666 per common share will be paid on December 15, 2006 to stockholders of records as of December 6, 2006.

	(b)	On October 30, 2006, Navios concluded an agreement with a third party to sublease approximately 2,000 square feet of its office premises in South Norwalk, Connecticut. The sublease will terminate at the same date of the termination of the prime lease (May 2011).

	(c)	On November 8, 2006, Navios took delivery of Navios Sagittarius under its long term chartered-in fleet. Navios Sagittarius is a 2006 built, 75,500 DWT Panamax.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

NAVIOS MARITIME HOLDINGS INC.

By: /s/ Angeliki Frangou                     Angeliki Frangou Chief Executive Officer Date: November 10, 2006

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