Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P.
(Teekay LNG or the Partnership) (NYSE: TGP), today reported the
Partnership’s results for the quarter ended March 31, 2019.
Consolidated Financial Summary
| |
|
| |
Three Months Ended |
| |
March 31, 2019 |
December 31, 2018 |
March 31, 2018 |
| (in thousands of U.S.
Dollars, except per unit data) |
(unaudited) |
(unaudited) |
(unaudited) |
| GAAP FINANCIAL COMPARISON |
|
|
|
| Voyage revenues |
149,744 |
|
149,805 |
|
115,306 |
|
| Income from vessel
operations |
69,361 |
|
65,164 |
|
25,142 |
|
| Equity income |
5,578 |
|
949 |
|
26,724 |
|
| Net income (loss) attributable
to the partners and preferred unitholders |
21,617 |
|
6,579 |
|
(6,894 |
) |
| Limited partners’ interest in
net income (loss) per common unit |
0.19 |
|
0.00 |
|
(0.16 |
) |
| NON-GAAP FINANCIAL
COMPARISON |
|
|
|
| Adjusted net income
attributable to the partners and preferred unitholders(1) |
33,365 |
|
32,636 |
|
22,058 |
|
| Limited partners’ interest in
adjusted net income per common unit |
0.34 |
|
0.32 |
|
0.19 |
|
| Total Adjusted EBITDA(1) |
158,214 |
|
150,099 |
|
117,595 |
|
|
Distributable cash flow (DCF)(1) |
54,214 |
|
51,211 |
|
35,341 |
|
In the first quarter of 2019, the Partnership
made certain changes to its non-GAAP financial measures to more
closely align with internal management reporting and annual
reporting filed with the U.S. Securities and Exchange Commission
(SEC) under Form 20-F. Cash Flow from Vessel Operations (CFVO) from
Consolidated Vessels and Total CFVO are replaced with Consolidated
Adjusted EBITDA and Total Adjusted EBITDA, respectively, and CFVO
from Equity-Accounted Vessels is replaced with Adjusted EBITDA from
Equity-Accounted Vessels. Please refer to "Definitions and Non-GAAP
Financial Measures" in this release for definitions of these
non-GAAP financial measures and information about the changes
made.
(1) These are non-GAAP financial measures.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used in
this release to the most directly comparable financial measures
under United States generally accepted accounting principles
(GAAP).
First Quarter of 2019 Compared to First Quarter of 2018
GAAP net income (loss) and non-GAAP adjusted net
income attributable to the partners and preferred unitholders for
the three months ended March 31, 2019, compared to the
same quarter in the prior year, were positively impacted by:
earnings from the 10 liquefied natural gas (LNG) carrier
newbuildings delivered into the Partnership’s consolidated fleet
and equity-accounted joint ventures between February 2018 and
January 2019; higher earnings from the Torben Spirit due to a
higher charter rate on a new three-year charter contract which
commenced in December 2018; higher earnings from the Magellan
Spirit, which is currently chartered-in from the Partnership’s 52
percent-owned joint venture with Marubeni Corporation (the Teekay
LNG-Marubeni Joint Venture) and has been employed and chartered-out
since October 2018 to March 2019; and higher earnings from the
Partnership's seven multi-gas carriers. These increases in earnings
were partially offset by lower earnings from the Partnership's
conventional tanker fleet for the three months ended March 31, 2019
due to the sales of four conventional tankers between February 2018
and January 2019.
In addition, GAAP net income (loss) attributable
to the partners and preferred unitholders was positively impacted
in the three months ended March 31, 2019, compared to the same
quarter of the prior year, by various items, including a decrease
in write-down of vessels, partially offset by increases in
unrealized losses on non-designated derivative instruments.
CEO Commentary
“During the first quarter, the Partnership
continued to report significant cash flow growth mainly driven by
recent newbuild deliveries and the contract start-up of various LNG
carriers at higher rates,” commented Mark Kremin, Teekay Gas Group
Ltd.’s President and Chief Executive Officer. “Looking ahead, we
expect contract start-up of four additional LNG carrier
newbuildings and the Bahrain LNG terminal in the second half of
2019, which we anticipate will continue to drive further growth in
total adjusted EBITDA throughout the rest of 2019 and into
2020.”
Mr. Kremin added, “Despite the near-term
weakness in the spot LNG carrier market since the start of the
year, we have recently been able to take advantage of the improving
medium-term fundamentals by securing multiple attractive charters
on our LNG carriers for periods ranging from one to three years.
This has allowed us to lock-in charters at attractive rates and
maximize utilization, thereby further enhancing our earnings
stability and improving our cash flows.”
Mr. Kremin continued, “We remain committed to
our balanced capital allocation plan, which returns additional
capital to unitholders, including the recent 36 percent cash
distribution increase, while also creating equity value
through continued delevering of our balance sheet. The new
charters that we recently secured are expected to enable Teekay LNG
to delever faster and with better visibility, which provides us
with greater flexibility to allocate excess capital in the
future.”
Summary of Recent Events
Re-chartering Activities
In April 2019, the Partnership secured a
three-year, fixed-rate charter contract for the Magellan Spirit LNG
carrier, which is expected to commence at the end of May 2019, and
concurrently extended the charter-in contract of the Magellan
Spirit from the Teekay LNG-Marubeni Joint Venture to cover the same
three-year period.
In May 2019, the Partnership extended its
fixed-rate charter contract of the Polar Spirit LNG carrier for
three additional years at a charter rate in excess of the previous
fixed rate. The charter extension commenced on May 7, 2019.
In addition, in May 2019, the Partnership
secured one-year, fixed-rate charter contracts on the Arwa Spirit
and Marib Spirit LNG carriers, which are expected to commence
mid-June and early-July 2019, respectively, both of which are owned
by the Teekay LNG-Marubeni Joint Venture.
Commercial Management Agreement for Multi-Gas
Vessels
In February 2019, the Partnership entered into a
commercial management agreement with Lauritzen Kosan A/S (Manager),
a third-party commercial manager, pursuant to which the Manager
will commercially manage the Partnership's seven multi-gas vessels.
In May 2019, the Partnership completed the transition of the
commercial management of all seven multi-gas vessels to the
Manager.
Operating Results
The following table highlights certain financial
information for Teekay LNG’s three segments: the Liquefied Natural
Gas Segment, the Liquefied Petroleum Gas Segment and the
Conventional Tanker Segment (please refer to the “Teekay LNG’s
Fleet” section of this release below and Appendices D and E for
further details).
|
|
|
|
|
Three Months Ended |
| |
March 31, 2019 |
March 31, 2018 |
| (in thousands of U.S.
Dollars) |
(unaudited) |
(unaudited) |
| |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
| GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
| Voyage revenues |
137,822 |
|
9,160 |
|
2,762 |
|
149,744 |
|
101,426 |
|
3,623 |
|
10,257 |
|
115,306 |
|
| Income (loss) from vessel
operations |
72,789 |
|
(2,346 |
) |
(1,082 |
) |
69,361 |
|
50,209 |
|
(5,664 |
) |
(19,403 |
) |
25,142 |
|
| Equity income (loss) |
7,493 |
|
(1,915 |
) |
— |
|
5,578 |
|
27,404 |
|
(680 |
) |
— |
|
26,724 |
|
| NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
|
|
|
| Consolidated Adjusted
EBITDA(i) |
107,693 |
|
(425 |
) |
(563 |
) |
106,705 |
|
77,420 |
|
(3,922 |
) |
1,506 |
|
75,004 |
|
| Adjusted EBITDA from
equity-accounted vessels(i) |
43,986 |
|
7,523 |
|
— |
|
51,509 |
|
36,351 |
|
6,240 |
|
— |
|
42,591 |
|
| Total
Adjusted EBITDA(i) |
151,679 |
|
7,098 |
|
(563 |
) |
158,214 |
|
113,771 |
|
2,318 |
|
1,506 |
|
117,595 |
|
(i) These are non-GAAP financial measures. Please refer to
“Definitions and Non-GAAP Financial Measures” and the Appendices to
this release for definitions of these terms and reconciliations of
these non-GAAP financial measures as used in this release to the
most directly comparable financial measures under GAAP.
Liquefied Natural Gas Segment
Income from vessel operations and Consolidated
Adjusted EBITDA for the liquefied natural gas segment for the three
months ended March 31, 2019, compared to the same quarter of the
prior year, were positively impacted primarily by: the deliveries
of six wholly-owned LNG carrier newbuildings (the Magdala, Myrina,
Megara, Bahrain Spirit, Sean Spirit and Yamal Spirit) between
February 2018 and January 2019; higher earnings from the Torben
Spirit due to an increased charter rate from a new three-year
charter contract which commenced in December 2018; and earnings
from the Magellan Spirit which has been employed on a charter-out
basis since October 2018 to March 2019. These increases were
partially offset by an increase in off-hire days in the first
quarter of 2019 for certain of the Partnership’s LNG carriers due
to repairs and a scheduled dry docking.
Equity income and Adjusted EBITDA from
equity-accounted vessels for the liquefied natural gas segment for
the three months ended March 31, 2019, compared to the same quarter
of the prior year, were positively impacted primarily by: the
deliveries of three LNG carrier newbuildings between January 2018
and January 2019 in the Partnership's joint venture with China LNG
Shipping (Holdings) Limited, CETS Investment Management (HK) Co.
Ltd. and BW Investments Pte. Ltd. (the Pan Union Joint Venture),
with the Partnership’s ownership interest in these vessels ranging
from 20 to 30 percent; and the delivery of the second ARC7 LNG
carrier newbuilding in September 2018 in the Partnership’s 50
percent-owned Yamal LNG Joint Venture. These increases were
partially offset by the sale of the S/S Excelsior in the
Partnership’s 50 percent-owned joint venture with Exmar NV (the
Excelsior Joint Venture) in January 2018. In addition, GAAP equity
income was negatively impacted by unrealized losses of $3.9 million
on non-designated derivative instruments in the Partnership’s
equity-accounted investments in the first quarter of 2019 compared
to gains on designated and non-designated derivative instruments of
$10.5 million in the first quarter of 2018, and due to a gain of
$5.6 million recognized on the sale of the Partnership's 50 percent
investment in the Excelsior Joint Venture during the first quarter
of 2018.
Liquefied Petroleum Gas Segment
Loss from vessel operations and Consolidated
Adjusted EBITDA for the liquefied petroleum gas segment for the
three months ended March 31, 2019, compared to the same quarter of
the prior year, were positively impacted by higher earnings from
the Partnership's seven multi-gas carriers which earned higher spot
revenues during the first quarter of 2019. In addition, GAAP equity
loss for the liquefied petroleum gas segment for the three months
ended March 31, 2019 was negatively impacted by unrealized losses
of $0.5 million compared to unrealized gains of $1.0 million during
the same quarter of the prior year on non-designated derivative
instruments in the Partnership's equity-accounted investment.
Conventional Tanker Segment
Loss from vessel operations and Consolidated
Adjusted EBITDA for the conventional tanker segment for the three
months ended March 31, 2019, compared to the same quarter of the
prior year, were negatively impacted by the sales of the Teide
Spirit, European Spirit, African Spirit and Toledo Spirit between
February 2018 and January 2019. In addition, loss from vessel
operations was positively impacted compared to the same quarter of
the prior year due to write-downs of $18.7 million for the
Alexander Spirit, European Spirit and African Spirit conventional
tankers to their estimated fair values recorded during the first
quarter of 2018.
Teekay LNG's Fleet
The following table summarizes the Partnership’s
fleet as of May 1, 2019. The Partnership also owns a 30 percent
interest in a regasification terminal in Bahrain which is under
construction and is expected to commence operations in the third
quarter of 2019.
| |
|
| |
Number of Vessels |
| |
Owned and In-Chartered Vessels(i) |
Newbuildings |
Total |
| LNG Carrier
Fleet |
45(ii) |
4(iii) |
49 |
| LPG/Multi-gas Carrier
Fleet |
29(iv) |
— |
29 |
| Conventional Tanker
Fleet |
1 |
— |
1 |
|
Total |
75 |
4 |
79 |
(i) Includes vessels accounted for as vessels related to finance
leases under which the Partnership is the lessee.
(ii) The Partnership’s ownership interests in these vessels
range from 20 percent to 100 percent.
(iii) The Partnership’s ownership interest in these newbuildings
is 50 percent.
(iv) The Partnership’s ownership interests in these vessels
range from 50 percent to 99 percent.
Liquidity
As of March 31, 2019, the Partnership had
total liquidity of $322.1 million (comprised of $122.6 million in
cash and cash equivalents and $199.5 million in undrawn credit
facilities).
Conference Call
The Partnership plans to host a conference call
on Thursday, May 23, 2019 at 11:00 a.m. (ET) to discuss the results
for the first quarter of 2019. All unitholders and interested
parties are invited to listen to the live conference call by
choosing from the following options:
- By dialing (800) 667-5617 or (647) 490-5367, if outside North
America, and quoting conference ID code 7672177.
- By accessing the webcast, which will be available on Teekay
LNG’s website at www.teekay.com (the archive will remain on
the website for a period of one year).
An accompanying First Quarter 2019 Earnings
Presentation will also be available at www.teekay.com in
advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners is one of the world's
largest independent owners and operators of LNG carriers, providing
LNG, LPG and crude oil marine transportation services primarily
under long-term, fee-based charter contracts through its interests
in 49 LNG carriers (including four newbuildings) and 22 mid-size
LPG carriers, seven multi-gas carriers and one conventional tanker.
The Partnership's ownership interests in these vessels range from
20 to 100 percent. In addition, the Partnership owns a 30 percent
interest in a regasification terminal, which is currently under
construction. Teekay LNG Partners is a publicly-traded master
limited partnership formed by Teekay Corporation (NYSE: TK) as part
of its strategy to expand its operations in the LNG and LPG
shipping sectors.
Teekay LNG Partners’ common units and preferred
units trade on the New York Stock Exchange under the symbols “TGP”,
“TGP PR A” and “TGP PR B”, respectively.
For Investor Relationsenquiries
contact:
Ryan HamiltonTel: +1 (604) 609-2963Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the SEC. These non-GAAP financial measures which include Adjusted
Net Income Attributable to the Partners and Preferred Unitholders,
Distributable Cash Flow and, commencing in the first quarter of
2019, Adjusted EBITDA, are intended to provide additional
information and should not be considered a substitute for measures
of performance prepared in accordance with GAAP. In addition,
these measures do not have standardized meanings across companies,
and may not be comparable to similar measures presented by other
companies. These non-GAAP measures are used by management, and the
Partnership believes that these supplementary metrics assist
investors and other users of its financial reports in comparing
financial and operating performance of the Partnership across
reporting periods and with other companies.
In prior periods, the Partnership reported Cash
Flow from Vessel Operations (CFVO), as a non-GAAP measure. In the
first quarter of 2019, the Partnership made certain changes to its
non-GAAP financial measures to more closely align with internal
management reporting, annual reporting with the SEC under Form 20-F
and metrics used by certain investors. CFVO from Consolidated
Vessels and Total CFVO are replaced with Consolidated Adjusted
EBITDA and Total Adjusted EBITDA, respectively, for current and
comparative periods.
Non-GAAP Financial Measures
Adjusted EBITDA represents net income (loss)
before interest, taxes, and depreciation and amortization and is
adjusted to exclude certain items whose timing or amount cannot be
reasonably estimated in advance or that are not considered
representative of core operating performance. Such adjustments
include vessel write-downs, gains or losses on sale of vessels and
equity-accounted investments, unrealized gains or losses on
derivative instruments, foreign exchange gains or losses,
amortization of in-process contracts, adjustments for direct
financing leases to a cash basis, and certain other income or
expenses. Adjusted EBITDA also excludes realized gains or losses on
interest rate swaps as management, in assessing the Partnership's
performance, views these gains or losses as an element of interest
expense and realized gains or losses on derivative instruments
resulting from amendments or terminations of the underlying
instruments. Consolidated Adjusted EBITDA represents Adjusted
EBITDA from vessels that are consolidated on the Partnership's
financial statements. Adjusted EBITDA from Equity-Accounted Vessels
represents the Partnership's proportionate share of Adjusted EBITDA
from its equity-accounted vessels, and as a result, the Partnership
does not have the unilateral ability to determine whether the cash
generated by its equity-accounted vessels is retained within the
entity in which the Partnership holds the equity-accounted
investments or distributed to the Partnership and other owners. In
addition, the Partnership does not control the timing of any such
distributions to the Partnership and other owners. Adjusted EBITDA
is a non-GAAP financial measure used by certain investors and
management to measure the operational performance of companies.
Please refer to Appendices C and E of this release for
reconciliations of Adjusted EBITDA to net income (loss) and equity
income, respectively, which are the most directly comparable GAAP
measures reflected in the Partnership’s consolidated financial
statements.
Adjusted Net Income Attributable to the Partners
and Preferred Unitholders excludes items of income or loss from
GAAP net income (loss) that are typically excluded by securities
analysts in their published estimates of the Partnership’s
financial results. The Partnership believes that certain investors
use this information to evaluate the Partnership’s financial
performance, as does management. Please refer to Appendix A of this
release for a reconciliation of this non-GAAP financial measure to
net income (loss), and refer to footnote (4) of the Consolidated
Statements of Income (Loss) for a reconciliation of adjusted equity
income to equity income, the most directly comparable GAAP measure
reflected in the Partnership’s consolidated financial
statements.
Distributable Cash Flow (DCF) represents GAAP
net income adjusted for write-down of vessels, depreciation and
amortization expense, deferred income tax and other non-cash items,
estimated maintenance capital expenditures, unrealized gains and
losses from non-designated derivative instruments, ineffectiveness
for derivative instruments designated as hedges for accounting
purposes, distributions relating to equity financing of newbuilding
installments, distributions relating to preferred units,
adjustments for direct financing leases to a cash basis, unrealized
foreign currency exchange gains or losses, additional tax
indemnification guarantee liability net of portion previously
recognized in DCF and the Partnership’s proportionate share of such
items in its equity-accounted for investments. Maintenance capital
expenditures represent those capital expenditures required to
maintain over the long-term the operating capacity of, or the
revenue generated by, the Partnership’s capital assets. DCF is a
quantitative standard used in the publicly-traded partnership
investment community and by management to assist in evaluating
financial performance. Please refer to Appendix B of this release
for a reconciliation of this non-GAAP financial measure to net
income (loss), the most directly comparable GAAP measure reflected
in the Partnership’s consolidated financial statements.
Teekay LNG Partners L.P.Consolidated Statements of Income
(Loss)(in thousands of U.S. Dollars, except unit and per unit
data)
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Voyage
revenues |
149,744 |
|
149,805 |
|
115,306 |
|
| |
|
|
|
| Voyage expenses |
(5,775 |
) |
(6,529 |
) |
(5,801 |
) |
| Vessel operating
expenses(1) |
(26,101 |
) |
(30,454 |
) |
(27,967 |
) |
| Time-charter hire expense |
(5,591 |
) |
(5,980 |
) |
— |
|
| Depreciation and
amortization |
(34,126 |
) |
(33,079 |
) |
(29,267 |
) |
| General and administrative
expenses(1) |
(6,632 |
) |
(7,809 |
) |
(7,071 |
) |
| Write-down of goodwill and
vessels(2) |
— |
|
(790 |
) |
(18,662 |
) |
| Restructuring charges(3) |
(2,158 |
) |
— |
|
(1,396 |
) |
|
Income from vessel operations |
69,361 |
|
65,164 |
|
25,142 |
|
| |
|
|
|
| Equity income(4) |
5,578 |
|
949 |
|
26,724 |
|
| Interest expense |
(42,217 |
) |
(39,551 |
) |
(24,706 |
) |
| Interest income |
1,078 |
|
964 |
|
914 |
|
| Realized and unrealized (loss)
gain on non-designated derivative instruments(5) |
(6,617 |
) |
(11,540 |
) |
8,001 |
|
| Foreign currency exchange
loss(6) |
(731 |
) |
(7,244 |
) |
(1,273 |
) |
| Other income (expense)(7) |
251 |
|
545 |
|
(52,582 |
) |
|
Net income (loss) before tax expense |
26,703 |
|
9,287 |
|
(17,780 |
) |
| Income tax expense |
(2,578 |
) |
(42 |
) |
(779 |
) |
|
Net income (loss) |
24,125 |
|
9,245 |
|
(18,559 |
) |
| |
|
|
|
| Non-controlling interest in
net income (loss) |
2,508 |
|
2,666 |
|
(11,665 |
) |
| Preferred unitholders'
interest in net income (loss) |
6,425 |
|
6,425 |
|
6,425 |
|
| General partner's interest in
net income (loss) |
304 |
|
2 |
|
(272 |
) |
| Limited partners’ interest in
net income (loss) |
14,888 |
|
152 |
|
(13,047 |
) |
| Limited partners' interest in
net income (loss) per common unit: |
|
|
|
| • Basic |
0.19 |
|
0.00 |
|
(0.16 |
) |
| • Diluted |
0.19 |
|
0.00 |
|
(0.16 |
) |
| Weighted-average number of
common units outstanding: |
|
|
|
| • Basic |
78,598,678 |
|
79,676,541 |
|
79,637,607 |
|
| • Diluted |
78,680,661 |
|
79,843,339 |
|
79,637,607 |
|
| Total
number of common units outstanding at end of period |
78,626,403 |
|
79,360,719 |
|
79,687,499 |
|
(1) The three months ended March 31, 2018 comparative figures
for vessel operating expenses and general and administrative
expenses have been reclassified to conform to the presentation
adopted in the current period relating to the classification of
certain related party transactions which had the effect of
decreasing vessel operating expenses by $0.5 million for the three
months ended March 31, 2018 and an offsetting effect for general
and administrative expenses in the same period. There is no impact
on income from vessel operations or net loss as a result of this
reclassification.
(2) Included in the write-down of goodwill and vessels for the
three months ended December 31, 2018 is an impairment charge of
$0.8 million relating to the Partnership's goodwill attributable to
its LPG segment. The Partnership recorded an aggregate write-down
of $5.7 million for the African Spirit and European Spirit Suezmax
tankers for the three months ended March 31, 2018 as the estimated
fair values of these vessels had decreased at the time. In
addition, the Partnership recorded a write-down of $13.0 million
for the three months ended March 31, 2018 relating to the Alexander
Spirit conventional tanker as a result of changes in the
Partnership's expectations of the vessel's future opportunities
after its current contract ends in 2019.
(3) In January 2019 and February 2018, the Toledo Spirit and
Teide Spirit, respectively, were sold and as a result of these
sales, the Partnership recorded restructuring charges of $2.2
million and $1.4 million for the three months ended March 31, 2019
and March 31, 2018, respectively, relating to seafarer severance
costs.
(4) The Partnership’s proportionate share of items within equity
income as identified in Appendix A of this release is detailed in
the table below. By excluding these items from equity income, the
Partnership believes the resulting adjusted equity income is a
normalized amount that can be used to better evaluate the financial
performance of the Partnership’s equity-accounted investments.
Adjusted equity income is a non-GAAP financial measure.
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
| |
2019 |
2018 |
2018 |
| Equity income |
5,578 |
|
949 |
|
26,724 |
|
| Proportionate share of
unrealized loss (gain) on non-designated interest rate swaps |
4,360 |
|
4,736 |
|
(8,221 |
) |
| Proportionate share of
ineffective portion of hedge-accounted interest rate swaps |
— |
|
4,831 |
|
(3,259 |
) |
| Proportionate share of loss on
sale of vessel |
— |
|
— |
|
257 |
|
| Gain on sale of
equity-accounted investment |
— |
|
— |
|
(5,563 |
) |
|
Proportionate share of other items |
345 |
|
181 |
|
128 |
|
| Equity
income adjusted for items in Appendix A |
10,283 |
|
10,697 |
|
10,066 |
|
(5) The realized (losses) gains on non-designated derivative
instruments relate to the amounts the Partnership actually paid or
received to settle non-designated derivative instruments and the
unrealized (losses) gains on non-designated derivative instruments
relate to the change in fair value of such non-designated
derivative instruments, as detailed in the table below:
| |
|
| |
Three Months Ended |
| |
March 31, |
December 31, |
March 31, |
| |
2019 |
2018 |
2018 |
| Realized losses
relating to: |
|
|
|
| Interest rate swap
agreements |
(2,385 |
) |
(2,804 |
) |
(4,478 |
) |
| Toledo Spirit time-charter
derivative contract |
— |
|
(668 |
) |
309 |
|
|
|
(2,385 |
) |
(3,472 |
) |
(4,169 |
) |
| Unrealized (losses)
gains relating to: |
|
|
|
| Interest rate swap
agreements |
(4,192 |
) |
(7,637 |
) |
11,898 |
|
| Interest rate swaption
agreements |
— |
|
— |
|
2 |
|
| Toledo Spirit time-charter
derivative contract |
(40 |
) |
(431 |
) |
270 |
|
|
|
(4,232 |
) |
(8,068 |
) |
12,170 |
|
| Total
realized and unrealized (losses) gains on non-designated derivative
instruments |
(6,617 |
) |
(11,540 |
) |
8,001 |
|
(6) For accounting purposes, the Partnership is required to
revalue all foreign currency-denominated monetary assets and
liabilities based on the prevailing exchange rates at the end of
each reporting period. This revaluation does not affect the
Partnership’s cash flows or the calculation of distributable cash
flow, but results in the recognition of unrealized foreign currency
translation gains or losses in the Consolidated Statements of
Income (Loss).
Foreign currency exchange loss includes realized losses relating
to the amounts the Partnership paid to settle the Partnership’s
non-designated cross currency swaps that were entered into as
economic hedges in relation to the Partnership’s Norwegian Kroner
(NOK) denominated unsecured bonds. Foreign currency exchange loss
also includes unrealized (losses) gains relating to the change in
fair value of such derivative instruments, partially offset by
unrealized (losses) gains on the revaluation of the NOK bonds as
detailed in the table below:
| |
|
| |
Three Months Ended |
| |
March 31, |
December 31, |
March 31, |
| |
2019 |
2018 |
2018 |
| Realized losses on cross
currency swaps |
(1,434 |
) |
(1,607 |
) |
(1,384 |
) |
| Unrealized (losses) gains on
cross currency swaps |
(1,920 |
) |
(28,494 |
) |
22,334 |
|
|
Unrealized (losses) gains on revaluation of NOK bonds |
(579 |
) |
21,066 |
|
(17,487 |
) |
(7) Following the termination of the capital lease arrangements
for the three LNG carriers in Teekay Nakilat Corporation (the
Teekay Nakilat Joint Venture), the lessor made a determination that
additional rentals were due under the leases following a challenge
by the UK taxing authority. As a result, during the three months
ended March 31, 2018, the Teekay Nakilat Joint Venture recognized
tax indemnification guarantee liability of $53.0 million for a
total liability of $65.6 million (46.9 million GBP) as at March 31,
2018. During the second and third quarters of 2018, the Teekay
Nakilat Joint Venture paid this liability by releasing a $7.0
million cash deposit it had made with the lessor and making a $56.0
million cash payment for the balance, which was based on the
GBP/USD foreign currency exchange rates at the time the payments
were made.
Teekay LNG Partners L.P.Consolidated Balance Sheets(in thousands
of U.S. Dollars)
|
|
As at March 31, 2019 |
As at December 31, 2018 |
| |
(unaudited) |
(unaudited) |
| ASSETS |
|
|
| Current |
|
|
| Cash and cash equivalents |
122,589 |
|
149,014 |
|
| Restricted cash – current |
45,329 |
|
38,329 |
|
| Accounts receivable |
23,962 |
|
20,795 |
|
| Prepaid expenses |
10,937 |
|
8,076 |
|
| Current portion of derivative
assets |
433 |
|
835 |
|
| Current portion of net
investments in direct financing leases |
12,939 |
|
12,635 |
|
| Current portion of advances to
equity-accounted joint ventures |
79,363 |
|
79,108 |
|
| Advances to affiliates |
10,146 |
|
8,229 |
|
| Other current assets |
1,812 |
|
2,306 |
|
|
Total current assets |
307,510 |
|
319,327 |
|
| |
|
|
| Restricted cash –
long-term |
32,686 |
|
35,521 |
|
| Vessels and
equipment |
|
|
| At cost, less accumulated
depreciation |
1,645,351 |
|
1,657,338 |
|
| Operating lease right-of-use
asset(1) |
19,602 |
|
— |
|
| Vessels related to finance
leases, at cost, less accumulated depreciation |
1,758,028 |
|
1,585,243 |
|
| Advances on newbuilding
contracts |
— |
|
86,942 |
|
|
Total vessels and equipment |
3,422,981 |
|
3,329,523 |
|
| Investment in and advances to
equity-accounted joint ventures |
1,017,088 |
|
1,037,025 |
|
| Net investments in direct
financing leases |
558,857 |
|
562,528 |
|
| Derivative assets |
362 |
|
2,362 |
|
| Other assets |
11,508 |
|
11,432 |
|
| Intangible assets – net |
50,008 |
|
52,222 |
|
| Goodwill |
34,841 |
|
34,841 |
|
|
Total assets |
5,435,841 |
|
5,384,781 |
|
| |
|
|
| LIABILITIES AND
EQUITY |
|
|
| Current |
|
|
| Accounts payable |
6,542 |
|
3,830 |
|
| Accrued liabilities |
73,730 |
|
74,753 |
|
| Unearned revenue |
24,102 |
|
30,108 |
|
| Current portion of long-term
debt |
136,272 |
|
135,901 |
|
| Current obligations related to
finance leases |
65,090 |
|
81,219 |
|
| Current portion of operating
lease liabilities(1) |
12,863 |
|
— |
|
| Current portion of derivative
liabilities |
12,060 |
|
11,604 |
|
| Advances from affiliates |
14,475 |
|
14,731 |
|
|
Total current liabilities |
345,134 |
|
352,146 |
|
| Long-term debt |
1,770,812 |
|
1,833,875 |
|
| Long-term obligations related
to finance leases |
1,350,897 |
|
1,217,337 |
|
| Long-term operating lease
liabilities(1) |
6,739 |
|
— |
|
| Other long-term
liabilities |
45,966 |
|
43,788 |
|
| Derivative liabilities |
61,164 |
|
55,038 |
|
|
Total liabilities |
3,580,712 |
|
3,502,184 |
|
| Equity |
|
|
| Limited partners – common
units |
1,493,278 |
|
1,496,107 |
|
| Limited partners – preferred
units |
285,159 |
|
285,159 |
|
| General partner |
49,215 |
|
49,271 |
|
|
Accumulated other comprehensive (loss) income |
(23,504 |
) |
2,717 |
|
| Partners' equity |
1,804,148 |
|
1,833,254 |
|
|
Non-controlling interest |
50,981 |
|
49,343 |
|
| Total
equity |
1,855,129 |
|
1,882,597 |
|
|
Total liabilities and total equity |
5,435,841 |
|
5,384,781 |
|
(1) Upon adoption of the new leasing accounting standard on
January 1, 2019, the Partnership’s chartered-in contract for the
Magellan Spirit previously accounted for as an operating lease is
now treated as an operating lease right-of-use asset and an
operating lease liability. This resulted in an increase in the
Partnership’s assets and liabilities by $19.6 million at March 31,
2019. This adoption related to the Magellan Spirit chartered-in
contract had no impact on the Partnership’s Consolidated Statements
of Income (Loss).
Teekay LNG Partners L.P.Consolidated Statements of Cash Flows(in
thousands of U.S. Dollars)
| |
Three Month Ended |
| |
March 31, |
March 31, |
|
|
2019 |
2018 |
|
|
(unaudited) |
(unaudited) |
| Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
| Net income
(loss) |
24,125 |
|
(18,559 |
) |
| Non-cash and non-operating
items: |
|
|
|
Unrealized loss (gain) on non-designated derivative
instruments |
4,232 |
|
(12,170 |
) |
|
Depreciation and amortization |
34,126 |
|
29,267 |
|
|
Write-down of vessels |
— |
|
18,662 |
|
|
Unrealized foreign currency exchange (gain) loss |
(1,767 |
) |
584 |
|
|
Equity income, net of dividends received of $7,008 (2018 –
$nil) |
1,430 |
|
(26,724 |
) |
|
Other non-cash items |
9,954 |
|
(4,245 |
) |
| Change in non-cash operating
assets and liabilities |
(17,596 |
) |
55,355 |
|
| Receipts from direct financing
leases |
3,025 |
|
— |
|
| Expenditures for dry
docking |
(4,279 |
) |
(3,162 |
) |
|
Net operating cash flow |
53,250 |
|
39,008 |
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance of
long-term debt |
108,551 |
|
115,515 |
|
| Scheduled repayments of
long-term debt |
(29,476 |
) |
(25,794 |
) |
| Prepayments of long-term
debt |
(140,787 |
) |
(147,675 |
) |
| Financing issuance costs |
(903 |
) |
(2,775 |
) |
| Proceeds from financing
related to sales and leaseback of vessels |
158,680 |
|
126,273 |
|
| Scheduled repayments of
obligations related to finance leases |
(17,664 |
) |
(13,506 |
) |
| Repurchase of common
units |
(9,497 |
) |
— |
|
| Cash distributions paid |
(17,646 |
) |
(16,917 |
) |
|
Dividends paid to non-controlling interest |
(20 |
) |
— |
|
|
Net financing cash flow |
51,238 |
|
35,121 |
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for vessels and
equipment |
(123,884 |
) |
(166,610 |
) |
| Capital contributions and
advances to equity-accounted joint ventures |
(2,864 |
) |
(20,464 |
) |
| Proceeds from sale of
equity-accounted joint venture |
— |
|
54,438 |
|
| Receipts from direct financing
leases |
— |
|
2,367 |
|
|
Net investing cash flow |
(126,748 |
) |
(130,269 |
) |
| |
|
|
| Decrease in cash, cash
equivalents and restricted cash |
(22,260 |
) |
(56,140 |
) |
| Cash,
cash equivalents and restricted cash, beginning of the period |
222,864 |
|
339,435 |
|
|
Cash, cash equivalents and restricted cash, end of the
period |
200,604 |
|
283,295 |
|
Teekay LNG Partners L.P.Appendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Income(in thousands of U.S.
Dollars)
|
|
Three Months Ended |
|
March 31, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
| Net income (loss) – GAAP
basis |
24,125 |
|
(18,559 |
) |
| Less: Net (income) loss
attributable to non-controlling interests |
(2,508 |
) |
11,665 |
|
|
Net income attributable to the partners and preferred
unitholders |
21,617 |
|
(6,894 |
) |
| Add (subtract) specific items
affecting net income: |
|
|
|
Write-down of vessels(1) |
— |
|
18,662 |
|
|
Restructuring charges(2) |
2,158 |
|
1,396 |
|
|
Unrealized foreign currency exchange gains(3) |
(876 |
) |
(211 |
) |
|
Unrealized losses (gains) on non-designated and designated
derivative instruments and other items from equity-accounted
investees(4) |
4,705 |
|
(16,658 |
) |
|
Unrealized losses (gains) on non-designated derivative
instruments(5) |
4,232 |
|
(12,170 |
) |
|
Other items(6) |
1,998 |
|
52,534 |
|
|
Non-controlling interests’ share of items above(7) |
(469 |
) |
(14,601 |
) |
|
Total adjustments |
11,748 |
|
28,952 |
|
|
Adjusted net income attributable to the partners and
preferred unitholders |
33,365 |
|
22,058 |
|
|
|
|
|
| Preferred unitholders'
interest in adjusted net income |
6,425 |
|
6,425 |
|
| General partner's interest in
adjusted net income |
539 |
|
313 |
|
| Limited partners’ interest in
adjusted net income |
26,401 |
|
15,320 |
|
| Limited partners’ interest in
adjusted net income per common unit, basic |
0.34 |
|
0.19 |
|
| Weighted-average number of
common units outstanding, basic |
78,598,678 |
|
79,637,607 |
|
(1) See Note 2 to the Consolidated Statements of Income (Loss)
included in this release for further details.
(2) See Note 3 to the Consolidated Statements of Income (Loss)
included in this release for further details.
(3) Unrealized foreign currency exchange gains primarily relate
to the Partnership’s revaluation of all foreign
currency-denominated monetary assets and liabilities based on the
prevailing exchange rate at the end of each reporting period and
unrealized losses (gains) on the cross currency swaps economically
hedging the Partnership’s NOK bonds. This amount excludes the
realized losses relating to the cross currency swaps for the NOK
bonds. See Note 6 to the Consolidated Statements of Income (Loss)
included in this release for further details.
(4) Reflects the unrealized losses (gains) due to changes in the
mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes. In addition, for the
three months ended March 31, 2018, it includes the gain on sale by
the Partnership of its 50 percent investment in the Excelsior Joint
Venture, which owned one regasification unit; any ineffectiveness
for derivative instruments designated as hedges for accounting
purposes; and loss on sale of vessel within the Partnership’s
equity-accounted investments. See Note 4 to the Consolidated
Statements of Income (Loss) included in this release for further
details.
(5) Reflects the unrealized losses (gains) due to changes in the
mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes. See Note 5 to the
Consolidated Statements of Income (Loss) included in this release
for further details.
(6) Included in other items for the three months ended March 31,
2019 is loan extinguishment costs related to the Partnership's
refinancing of one of its debt facilities. Included in other
items for the three months ended March 31, 2018 is the additional
tax indemnification guarantee liability, as described in Note 7 to
the Consolidated Statements of Income (Loss) included in this
release for further details.
(7) Items affecting net income (loss) include items from the
Partnership’s consolidated non-wholly-owned subsidiaries. The
specific items affecting net income (loss) are analyzed to
determine whether any of the amounts originated from a consolidated
non-wholly-owned subsidiary. Each amount that originates from a
consolidated non-wholly-owned subsidiary is multiplied by the
non-controlling interests’ percentage share in this subsidiary to
arrive at the non-controlling interests’ share of the amount. The
amount identified as “non-controlling interests’ share of items
listed above” in the table above is the cumulative amount of the
non-controlling interests’ proportionate share of the other
specific items affecting net income (loss) listed in the table.
Teekay LNG Partners L.P.Appendix B - Reconciliation of Non-GAAP
Financial MeasuresDistributable Cash Flow (DCF)(in thousands of
U.S. Dollars, except units outstanding and per unit data)
|
|
Three Months Ended |
|
March 31, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
| |
|
|
|
| Net income
(loss): |
24,125 |
|
(18,559 |
) |
| Add: |
|
|
|
Depreciation and amortization |
34,126 |
|
29,267 |
|
|
Partnership’s share of equity-accounted joint ventures' DCF net of
estimated maintenance capital expenditures(1) |
18,748 |
|
18,726 |
|
|
Deferred income tax and other non-cash items |
3,765 |
|
(834 |
) |
|
Unrealized loss (gain) on non-designated derivative
instruments |
4,232 |
|
(12,170 |
) |
|
Direct finance lease payments received in excess of revenue
recognized and other adjustments |
3,218 |
|
2,887 |
|
|
Distributions relating to equity financing of newbuildings |
1,193 |
|
2,421 |
|
|
Additional tax indemnification guarantee liability |
— |
|
53,000 |
|
|
Write-down of vessels |
— |
|
18,662 |
|
| Less: |
|
|
|
Ineffective portion on qualifying cash flow hedging instruments
included in interest expense |
— |
|
(740 |
) |
|
Portion of additional tax indemnification guarantee liability
previously recognized in DCF |
— |
|
(3,849 |
) |
|
Unrealized foreign currency exchange gain |
(876 |
) |
(211 |
) |
|
Equity income |
(5,578 |
) |
(26,724 |
) |
|
Distributions relating to preferred units |
(6,425 |
) |
(6,425 |
) |
|
Estimated maintenance capital expenditures |
(17,034 |
) |
(14,907 |
) |
|
Distributable Cash Flow before non-controlling
interest |
59,494 |
|
40,544 |
|
|
Non-controlling interests’ share of DCF before estimated
maintenance capital expenditures |
(5,280 |
) |
(5,203 |
) |
|
Distributable Cash Flow |
54,214 |
|
35,341 |
|
| Amount
of cash distributions attributable to the general partner |
(305 |
) |
(228 |
) |
| Limited
partners' Distributable Cash Flow |
53,909 |
|
35,113 |
|
|
Weighted-average number of common units outstanding |
78,598,678 |
|
79,637,607 |
|
|
Distributable Cash Flow per limited partner common
unit |
0.69 |
|
0.44 |
|
(1) The estimated maintenance capital expenditures relating to
the Partnership’s share of equity-accounted joint ventures were
$11.0 million and $8.2 million for the three months ended March 31,
2019 and 2018, respectively.
Teekay LNG Partners L.P.Appendix C - Reconciliation of Non-GAAP
Financial MeasuresTotal Adjusted EBITDA(in thousands of U.S.
Dollars)
| |
Three Months Ended |
|
March 31, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
| Net income
(loss) |
24,125 |
|
(18,559 |
) |
|
Depreciation and amortization |
34,126 |
|
29,267 |
|
|
Interest expense, net of interest income |
41,139 |
|
23,792 |
|
|
Income tax expense |
2,578 |
|
779 |
|
| EBITDA |
101,968 |
|
35,279 |
|
|
|
|
|
| Add (subtract) specific income
statement items affecting EBITDA: |
|
|
|
Foreign currency exchange loss |
731 |
|
1,273 |
|
|
Other (income) expense - net |
(251 |
) |
52,582 |
|
|
Equity income |
(5,578 |
) |
(26,724 |
) |
|
Realized and unrealized loss (gain) on derivative instruments |
6,617 |
|
(8,001 |
) |
|
Write-down of vessels |
— |
|
18,662 |
|
|
Direct finance lease payments received in excess of revenue
recognized and other adjustments |
3,218 |
|
2,887 |
|
|
Amortization of in-process contracts included in voyage
revenues |
— |
|
(1,263 |
) |
|
Realized gain on Toledo Spirit derivative contract |
— |
|
309 |
|
| Consolidated adjusted
EBITDA |
106,705 |
|
75,004 |
|
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
51,509 |
|
42,591 |
|
|
Total Adjusted EBITDA |
158,214 |
|
117,595 |
|
Teekay LNG Partners L.P.Appendix D - Reconciliation of Non-GAAP
Financial MeasuresConsolidated Adjusted EBITDA by Segment(in
thousands of U.S. Dollars)
|
|
Three Months Ended March 31, 2019 |
|
|
(unaudited) |
| |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
| Voyage revenues |
137,822 |
|
9,160 |
|
2,762 |
|
149,744 |
|
| Voyage (expenses)
recoveries |
(1,238 |
) |
(4,670 |
) |
133 |
|
(5,775 |
) |
| Vessel operating expenses |
(20,555 |
) |
(4,352 |
) |
(1,194 |
) |
(26,101 |
) |
| Time-charter hire expense |
(5,591 |
) |
— |
|
— |
|
(5,591 |
) |
| Depreciation and
amortization |
(31,686 |
) |
(1,921 |
) |
(519 |
) |
(34,126 |
) |
| General and administrative
expenses |
(5,963 |
) |
(563 |
) |
(106 |
) |
(6,632 |
) |
|
Restructuring charges |
— |
|
— |
|
(2,158 |
) |
(2,158 |
) |
| Income
(loss) from vessel operations |
72,789 |
|
(2,346 |
) |
(1,082 |
) |
69,361 |
|
| Depreciation and
amortization |
31,686 |
|
1,921 |
|
519 |
|
34,126 |
|
| Direct finance lease payments
received in excess of revenue recognized and other adjustments |
3,218 |
|
— |
|
— |
|
3,218 |
|
|
Consolidated Adjusted EBITDA |
107,693 |
|
(425 |
) |
(563 |
) |
106,705 |
|
| |
|
|
|
|
|
|
Three Months Ended March 31, 2018 |
|
|
(unaudited) |
| |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
| Voyage revenues |
101,426 |
|
3,623 |
|
10,257 |
|
115,306 |
|
| Voyage expenses |
(421 |
) |
(2,387 |
) |
(2,993 |
) |
(5,801 |
) |
| Vessel operating expenses |
(20,163 |
) |
(4,025 |
) |
(3,779 |
) |
(27,967 |
) |
| Depreciation and
amortization |
(25,479 |
) |
(1,742 |
) |
(2,046 |
) |
(29,267 |
) |
| General and administrative
expenses |
(5,154 |
) |
(1,133 |
) |
(784 |
) |
(7,071 |
) |
| Write-down of vessels |
— |
|
— |
|
(18,662 |
) |
(18,662 |
) |
|
Restructuring charges |
— |
|
— |
|
(1,396 |
) |
(1,396 |
) |
| Income
(loss) from vessel operations |
50,209 |
|
(5,664 |
) |
(19,403 |
) |
25,142 |
|
| Depreciation and
amortization |
25,479 |
|
1,742 |
|
2,046 |
|
29,267 |
|
| Write-down of vessels |
— |
|
— |
|
18,662 |
|
18,662 |
|
| Amortization of in-process
contracts included in voyage revenues |
(1,155 |
) |
— |
|
(108 |
) |
(1,263 |
) |
| Direct finance lease payments
received in excess of revenue recognized and other adjustments |
2,887 |
|
— |
|
— |
|
2,887 |
|
|
Realized gain on Toledo Spirit derivative contract |
— |
|
— |
|
309 |
|
309 |
|
|
Consolidated Adjusted EBITDA |
77,420 |
|
(3,922 |
) |
1,506 |
|
75,004 |
|
Teekay LNG Partners L.P.Appendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA from Equity-Accounted Vessels
| |
Three Months Ended |
| |
March 31, 2019 |
March 31, 2018 |
|
|
(unaudited) |
(unaudited) |
|
|
At |
Partnership's |
At |
Partnership's |
|
100% |
|
Portion(1) |
100% |
|
Portion(1) |
| Voyage revenues |
170,251 |
|
72,731 |
|
140,052 |
|
61,964 |
|
| Voyage expenses |
(2,880 |
) |
(1,447 |
) |
(2,561 |
) |
(1,283 |
) |
| Vessel operating expenses,
time-charter hire expense and general and administrative
expenses |
(54,387 |
) |
(23,972 |
) |
(47,642 |
) |
(21,622 |
) |
| Depreciation and
amortization |
(28,640 |
) |
(13,785 |
) |
(25,438 |
) |
(12,728 |
) |
| Loss on
sale of vessel |
— |
|
— |
|
(514 |
) |
(257 |
) |
| Income from vessel operations
of equity-accounted vessels |
84,344 |
|
33,527 |
|
63,897 |
|
26,074 |
|
| Net interest expense |
(53,146 |
) |
(21,278 |
) |
(33,403 |
) |
(14,644 |
) |
| Income tax expense |
(2,781 |
) |
(1,051 |
) |
(26 |
) |
(13 |
) |
| Other items including realized
and unrealized (loss) gain on derivative instruments |
(16,906 |
) |
(5,620 |
) |
31,759 |
|
9,744 |
|
| Gain on
sale of equity-accounted investment(2) |
— |
|
— |
|
— |
|
5,563 |
|
| Net income / equity income of
equity-accounted vessels |
11,511 |
|
5,578 |
|
62,227 |
|
26,724 |
|
|
Net income / equity income of equity-accounted LNG vessels |
15,183 |
|
7,493 |
|
63,431 |
|
27,404 |
|
| Net
loss / equity loss of equity-accounted LPG vessels |
(3,672 |
) |
(1,915 |
) |
(1,204 |
) |
(680 |
) |
| |
|
|
|
|
| Net income / equity income of
equity-accounted vessels |
11,511 |
|
5,578 |
|
62,227 |
|
26,724 |
|
|
Depreciation and amortization |
28,640 |
|
13,785 |
|
25,438 |
|
12,728 |
|
|
Net interest expense |
53,146 |
|
21,278 |
|
33,403 |
|
14,644 |
|
|
Income tax expense |
2,781 |
|
1,051 |
|
26 |
|
13 |
|
| EBITDA from equity-accounted
vessels |
96,078 |
|
41,692 |
|
121,094 |
|
54,109 |
|
| |
|
|
|
|
| Add (subtract) specific income
statement items affecting EBITDA: |
|
|
|
|
|
Other items including realized and unrealized loss (gain) on
derivative instruments |
16,906 |
|
5,620 |
|
(31,759 |
) |
(9,744 |
) |
|
Loss on sale of vessel |
— |
|
— |
|
514 |
|
257 |
|
|
Direct finance lease payments received in excess of revenue
recognized |
14,689 |
|
5,133 |
|
12,519 |
|
4,488 |
|
|
Amortization of in-process contracts |
(1,722 |
) |
(936 |
) |
(1,816 |
) |
(956 |
) |
|
Gain on sale of equity-accounted investment(2) |
— |
|
— |
|
— |
|
(5,563 |
) |
|
Adjusted EBITDA from equity-accounted vessels |
125,951 |
|
51,509 |
|
100,552 |
|
42,591 |
|
| Adjusted EBITDA from
equity-accounted LNG vessels |
110,902 |
|
43,986 |
|
88,072 |
|
36,351 |
|
|
Adjusted EBITDA from equity-accounted LPG vessels |
15,049 |
|
7,523 |
|
12,480 |
|
6,240 |
|
(1) The Partnership's equity-accounted vessels for the three
months ended March 31, 2019 and 2018 include: the
Partnership’s 40 percent ownership interest in Teekay Nakilat (III)
Corporation, which owns four LNG carriers; the Partnership’s 49
percent ownership interest in the Partnership’s joint venture with
Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier;
the Partnership's 50 percent ownership interest up to January 2018
in the Excelsior Joint Venture, which owns one regasification unit;
the Partnership’s 33 percent ownership interest in four LNG
carriers servicing the Angola LNG project; the Partnership’s 52
percent ownership interest in the Teekay LNG-Marubeni Joint
Venture, which owns six LNG carriers; the Partnership’s 50 percent
ownership interest in Exmar LPG BVBA, which owns and in-charters 22
LPG carriers as at March 31, 2019, compared to 22 owned and
in-chartered LPG carriers, including two LPG carrier newbuildings,
as at March 31, 2018; the Partnership’s ownership interest
ranging from 20 to 30 percent in four LNG carriers as at
March 31, 2019 for Shell, compared to two LNG carriers and two
LNG carrier newbuildings as at March 31, 2018; the
Partnership’s 50 percent ownership interest in two ARC7 LNG
carriers and four ARC7 LNG carrier newbuildings in the Yamal LNG
Joint Venture as at March 31, 2019, compared to one ARC7 LNG
carrier and five ARC7 LNG carrier newbuildings as at March 31,
2018; and the Partnership's 30 percent ownership interest in the
Bahrain LNG Joint Venture, which owns an LNG receiving and
regasification terminal under construction in Bahrain.
(2) On January 31, 2018, the Partnership sold its 50 percent
ownership interest in the Excelsior Joint Venture, which resulted
in gain of $5.6 million for the three months ended March 31,
2018.
Teekay LNG Partners L.P.Appendix F - Summarized Financial
Information of Equity-Accounted Joint Ventures(in thousands of U.S.
Dollars)
| |
As at March 31, 2019 |
As at December 31, 2018 |
| |
(unaudited) |
(unaudited) |
| |
At |
Partnership's |
At |
Partnership's |
|
100% |
|
Portion(1) |
100% |
|
Portion(1) |
| Cash and restricted cash,
current and non-current |
419,715 |
|
169,223 |
|
388,820 |
|
164,247 |
|
| Current portion of derivative
assets |
3,216 |
|
1,488 |
|
4,840 |
|
2,225 |
|
| Other current assets |
68,508 |
|
30,928 |
|
86,424 |
|
31,129 |
|
| Vessels and equipment,
including vessels related to finance leases and operating lease
right-of-use assets |
2,372,143 |
|
1,164,036 |
|
2,327,971 |
|
1,141,364 |
|
| Advances on newbuilding
contracts |
1,287,701 |
|
504,827 |
|
1,321,284 |
|
494,486 |
|
| Net investments in sales-type
and direct financing leases, current and non-current |
3,310,651 |
|
1,203,917 |
|
3,089,375 |
|
1,163,980 |
|
| Derivative assets |
1,727 |
|
864 |
|
10,660 |
|
3,977 |
|
| Other
non-current assets |
46,661 |
|
38,137 |
|
50,625 |
|
37,690 |
|
| Total
assets |
7,510,322 |
|
3,113,420 |
|
7,279,999 |
|
3,039,098 |
|
| |
|
|
|
|
| Current portion of long-term
debt and obligations related to finance leases and operating
leases |
257,207 |
|
111,052 |
|
284,150 |
|
125,984 |
|
| Current portion of derivative
liabilities |
14,351 |
|
5,008 |
|
12,695 |
|
4,420 |
|
| Other current liabilities |
122,102 |
|
53,525 |
|
127,266 |
|
53,874 |
|
| Long-term debt and obligations
related to finance leases and operating leases |
4,471,572 |
|
1,770,888 |
|
4,202,745 |
|
1,680,986 |
|
| Shareholders' loans, current
and non-current |
367,680 |
|
131,629 |
|
367,475 |
|
131,386 |
|
| Derivative liabilities |
107,829 |
|
42,439 |
|
61,814 |
|
23,149 |
|
| Other long-term
liabilities |
67,220 |
|
34,057 |
|
67,793 |
|
34,552 |
|
| Equity |
2,102,361 |
|
964,822 |
|
2,156,061 |
|
984,747 |
|
|
Total liabilities and equity |
7,510,322 |
|
3,113,420 |
|
7,279,999 |
|
3,039,098 |
|
| |
|
|
|
|
| Investments in
equity-accounted joint ventures |
|
964,822 |
|
|
984,747 |
|
| Advances to equity-accounted
joint ventures |
|
131,629 |
|
|
131,386 |
|
|
Investments in and advances to equity-accounted joint ventures,
current and non-current portions |
|
1,096,451 |
|
|
1,116,133 |
|
(1) The Partnership's equity-accounted vessels as at
March 31, 2019 and December 31, 2018 include: the
Partnership’s 40 percent ownership interest in Teekay Nakilat (III)
Corporation, which owns four LNG carriers; the Partnership’s 49
percent ownership interests in the Excalibur Joint Venture, which
owns one LNG carrier; the Partnership’s 33 percent ownership
interest in four LNG carriers servicing the Angola LNG project; the
Partnership’s 52 percent ownership interest in the Teekay
LNG-Marubeni Joint Venture, which owns six LNG carriers; the
Partnership’s 50 percent ownership interest in Exmar LPG BVBA,
which owns and in-charters 22 LPG carriers; the Partnership’s
ownership interest ranging from 20 percent to 30 percent in four
LNG carriers as at March 31, 2019 for Shell, compared to three
LNG carriers and one LNG carrier newbuilding as at
December 31, 2018; the Partnership’s 50 percent ownership
interest in two ARC7 LNG carriers and four ARC7 LNG carrier
newbuildings in the Yamal LNG Joint Venture as at March 31,
2019; and the Partnership's 30 percent ownership interest in the
Bahrain LNG Joint Venture, which owns an LNG receiving and
regasification terminal under construction in Bahrain.
Forward-Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect
to certain future events and performance, including statements,
among other things, regarding: the timing of newbuilding vessel
deliveries (including expected early deliveries, where applicable)
and completion of the Bahrain regasification facility, and the
commencement of related contracts; the effects of future
newbuilding deliveries, recent new charters and the completion of
the Bahrain facility on the Partnership's Total Adjusted EBITDA,
earnings and financial leverage; expectations on the Partnership's
2019 financial results; the strength of the LNG and LPG carrier
market; the expected commencement date of the charter contracts for
the Magellan Spirit, Arwa Spirit and Marib Spirit LNG carriers; the
Partnership’s capital allocation plan and its ability to create
equity value and allocate excess capital in the future; and Teekay
LNG’s ability to benefit from future LNG fundamentals. The
following factors are among those that could cause actual results
to differ materially from the forward-looking statements, which
involve risks and uncertainties, and that should be considered in
evaluating any such statement: potential shipyard and project
construction delays, newbuilding specification changes or cost
overruns; deliveries of vessels under charter contracts and the
commencement thereof; changes in production of LNG or LPG, either
generally or in particular regions; changes in trading patterns or
timing of start-up of new LNG liquefaction and regasification
projects significantly affecting overall vessel tonnage
requirements; changes in applicable industry laws and regulations
and the timing of implementation of new laws and regulations; the
potential for early termination of long-term contracts of existing
vessels in the Partnership's fleet; higher than expected costs and
expenses; general market conditions and trends, including spot,
multi-month and multi-year charter rates; inability of charterers
to make future charter payments; the inability of the Partnership
to renew or replace long-term contracts on existing vessels; the
Partnership’s or the Partnership’s joint ventures’ ability to
secure or draw on financings for its vessels; potential lack of
cash flow to reduce balance sheet leverage or of excess capital
available to allocate; and other factors discussed in Teekay LNG
Partners’ filings from time to time with the SEC, including its
Report on Form 20-F for the fiscal year ended December 31, 2018.
The Partnership expressly disclaims any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Partnership’s
expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is
based.
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