Dynagas LNG Partners LP (NYSE: “DLNG”) (“Dynagas Partners” or the
“Partnership”), an owner and operator of liquefied natural gas
(“LNG”) carriers, today announced its results for the three months
and year ended December 31, 2020.
Fourth Quarter Highlights:
- Net income and
earnings per common unit of $10.6 million and $0.22,
respectively;
- Adjusted Net
Income(1) of $10.7 million and Adjusted Earnings per common unit of
$0.22;
- Adjusted
EBITDA(1) of $24.4 million;
- 100% fleet
utilization; and
- Declared and
paid cash distribution of $0.5625 per unit on its Series A
Preferred Units (NYSE: “DLNG PR A”) for the period from August 12,
2020 to November 11, 2020 and $0.546875 per unit on the Series B
Preferred Units (NYSE: “DLNG PR B”) for the period from August 22,
2020 to November 21, 2020.
Subsequent Events:
- Declared a
quarterly cash distribution of $0.5625 on the Partnership’s Series
A Preferred Units for the period from November 12, 2020 to February
11, 2021, which was paid on February 12, 2021;
- Declared a
quarterly cash distribution of $0.546875 on the Partnership’s
Series B Preferred Units for the period from November 22, 2020 to
February 21, 2021, which was paid on February 22, 2021; and
- Sold $0.83
million of common units at an average price per unit of $2.9758
pursuant to the A&R Sales Agreement (as defined below), which
has $29.2 million of remaining availability for future
repurchases.
- In March 2021,
the Partnership entered into a new master management agreement (the
“Master”) with Dynagas Ltd. (the “Manager”), which includes a new
standard set of terms for technical and commercial management
services (“Standard Management Terms”) for the Partnership’s six
vessels effective as from January 1, 2021. This agreement amends,
restates and supersedes the previous technical and commercial
management agreements and reduces the technical management fees
payable from $3,167 per day per vessel to $2,750 per day per vessel
commencing on January 1, 2021.
(1) Adjusted Net Income, Adjusted Earnings per
common unit, and Adjusted EBITDA are not recognized measures under
U.S. GAAP. Please refer to Appendix B of this press release for the
definitions and reconciliation of these measures to the most
directly comparable financial measures calculated and presented in
accordance with U.S. GAAP and other related information.
CEO Commentary:
We are pleased to report the results for the
three months and full year ended December 31, 2020.
All six LNG carriers in our fleet are operating
under their respective long-term charters with international gas
producers with an average remaining contract term of 7.5 years. Our
estimated contracted revenue backlog is approximately $1.1 billion.
Absent any unforeseen events or unscheduled dry dockings the
earliest contracted re-delivery date for any of our six LNG
carriers is in the third quarter of 2021 (the Arctic Aurora), with
the next carrier (the Clean Energy) becoming available for
re-chartering in the first quarter of 2026. The current short term
market for LNG shipping is challenging, however, we believe this
market will improve going into the second half of the year driven
by seasonal demand.
For the fourth quarter of 2020, we reported Net
Income of $10.6 million, earnings per common unit of $0.22, and
Adjusted EBITDA of $24.4 million. This improved performance is
attributable to an increase in voyage revenues and a decrease in
interest and finance costs compared to the corresponding period in
2019, coupled with stable vessel operating expenses during this
period.
Despite the ongoing operational challenges, the
industry is facing as a result of the COVID-19 outbreak, we are
pleased to report 100% utilization for our fleet for the fourth
quarter of 2020. The ongoing impact of the COVID-19 outbreak has
been operationally manageable due to our manager’s COVID-19
response plan which has been implemented with the support of our
seafarers, charterers, and employees, for which we are
grateful.
Subsequent to the quarter, we entered into an
amended and restated agreement with our manager under which the
technical management fee was reduced by 13%, which is equivalent to
USD 417 per vessel per day effective from January 1, 2021.
Going forward, we intend to continue our
strategy of using our cash flow generation to deleverage our
balance sheet and reinforce our liquidity so as to build equity
value over time. This, we believe, will enhance our ability to
pursue future growth initiatives.
Financial Results Overview:
|
Three Months Ended |
|
Year Ended |
|
|
December |
|
|
December |
|
|
|
December |
|
|
December |
|
|
|
31, 2020 |
|
|
31, 2019 |
|
|
|
31, 2020 |
|
|
31, 2019 |
|
(U.S. dollars in
thousands, except per unit data) |
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(unaudited) |
|
|
(audited) |
|
Voyage revenues |
$ |
34,435 |
|
$ |
34,317 |
|
|
$ |
137,165 |
|
$ |
130,901 |
|
Net Income |
$ |
10,643 |
|
$ |
5,529 |
|
|
$ |
34,052 |
|
$ |
3,613 |
|
Adjusted Net Income (1) |
$ |
10,656 |
|
$ |
5,637 |
|
|
$ |
37,817 |
|
$ |
10,914 |
|
Operating income |
$ |
16,246 |
|
$ |
15,953 |
|
|
$ |
64,264 |
|
$ |
59,916 |
|
Adjusted EBITDA(1) |
$ |
24,360 |
|
$ |
23,991 |
|
|
$ |
96,451 |
|
$ |
90,357 |
|
Earnings/ (Loss) per common
unit |
$ |
0.22 |
|
$ |
0.07 |
|
|
$ |
0.63 |
|
$ |
(0.22 |
) |
Adjusted Earnings/ (Loss) per
common unit (1) |
$ |
0.22 |
|
$ |
0.08 |
|
|
$ |
0.74 |
|
$ |
(0.02 |
) |
(1) Adjusted Net Income, Adjusted EBITDA, and
Adjusted Earnings/(Loss) per common unit are not recognized
measures under U.S. GAAP. Please refer to Appendix B of this press
release for the definitions and reconciliation of these measures to
the most directly comparable financial measures calculated and
presented in accordance with U.S. GAAP.
Three Months Ended December 31, 2020 and
2019 Financial Results
Net Income for the three months ended December
31, 2020 was $10.6 million as compared to a Net Income of $5.5
million in the corresponding period of 2019, which represents an
increase of $5.1 million, or 92.7%. This increase was mainly
attributable to a decrease in interest and finance costs in the
three months ended December 31, 2020, as further analyzed
below.
Adjusted Net Income for the three months ended
December 31, 2020 was $10.7 million compared to $5.6 million in the
corresponding period of 2019, representing a net increase of $5.1
million or 91.1%.
Voyage revenues for the three-month periods
ended December 31, 2020 and 2019 were $34.4 million and $34.3
million, respectively.
The Partnership reported average daily hire
gross of commissions(1) of approximately $62,700 per day per vessel
in the three-month period ended December 31, 2020, compared to
approximately $62,200 per day per vessel in the corresponding
period of 2019. During both three-month periods ended December 31,
2020 and December 31, 2019, the Partnership’s vessels operated at
100% utilization.
Vessel operating expenses were $7.1 million,
which corresponds to a daily rate per vessel of $12,940 in the
three-month period ended December 31, 2020, as compared to $7.1
million, or a daily rate per vessel of $12,799 in the corresponding
period of 2019.
Adjusted EBITDA for the three months ended
December 31, 2020 was $24.4 million, as compared to $24.0 million
for the corresponding period of 2019, which corresponds to an
increase of $0.4 million, or 1.7%.
Interest and finance costs, net, were $5.7
million in the three months ended December 31, 2020 as compared to
$10.4 million in the corresponding period of 2019, which represents
a decrease of $4.7 million, or 45.2%. The decrease in interest and
finance costs is mainly due to the lower weighted average interest
rate and the reduction in the average interest bearing debt.
For the three months ended December 31, 2020,
the Partnership reported basic and diluted both Earnings per common
unit and Adjusted Earnings per common unit of $0.22, after taking
into account the distributions relating to the Series A Preferred
Units and the Series B Preferred Units on the Partnership’s Net
income/Adjusted Net Income. Earnings per common unit and Adjusted
Earnings per common unit, basic and diluted, are calculated on the
basis of a weighted average number of 35,612,580 common units
outstanding during the period and in the case of Adjusted Earnings
per common unit after reflecting the impact of the non-cash items
presented in Appendix B of this press release.
Adjusted Net Income, Adjusted EBITDA and
Adjusted Earnings/ (Loss) per common unit are not recognized
measures under U.S. GAAP. Please refer to Appendix B of this press
release for the definitions and reconciliation of these measures to
the most directly comparable financial measures calculated and
presented in accordance with U.S. GAAP.
Amounts relating to variations in
period–on–period comparisons shown in this section are derived from
the condensed financials presented below.
(1) Average daily hire gross of commissions
represents voyage revenue excluding the non-cash time charter
deferred revenue amortization, divided by the Available Days in the
Partnership’s fleet as described in Appendix B.
Liquidity/ Financing/ Cash Flow
Coverage
During the three months ended December 31, 2020,
the Partnership generated net cash from operating activities of
$14.2 million as compared to $13.5 million in the corresponding
period of 2019, which represents an increase of $0.7 million, or
5.2%.
As of December 31, 2020, the Partnership
reported total cash of $75.0 million (including $50.0 million of
restricted cash). The Partnership’s outstanding indebtedness as of
December 31, 2020 under the $675.0 Million Credit Facility amounted
to $615.0 million, gross of unamortized deferred loan fees and
including $48.0 million, which is repayable within one year.
On July 2, 2020, the Partnership entered into a
sales agreement (the “Original Agreement”) with Virtu Americas LLC,
as sales agent, for the offer and sale, from time to time, of up to
an aggregate of $30.0 million of our common units representing
limited partnership interests under an “at-the-market” offering
program. In August 2020, the Partnership entered into an amended
and restated ATM Sales Agreement (the “A&R Sales Agreement”),
for the offer and sale of common units representing limited
partnership interests, having an aggregate offering price of up to
$30.0 million (the “Current ATM Program”). Upon entry into the
A&R Sales Agreement, the Partnership terminated its prior
at-the-market program established in July of 2020 pursuant to the
Original Agreement (the “Prior ATM Program”). At the time of such
termination, $0.4 million of the Partnership’s common units out of
an aggregate of $30.0 million of its common units were sold
pursuant to the Prior ATM Program.
As of December 31, 2020, the Partnership had
unused availability of $30.0 million under its interest free $30.0
million revolving credit facility with its Sponsor, or the $30.0
Million Revolving Credit Facility and is available to the
Partnership at any time until November 2023.
Vessel Employment
As of March 16, 2021, the Partnership had
estimated contracted time charter coverage(1) for 90% of its fleet
estimated Available Days (as defined in Appendix B) for the
remainder of 2021 and 83% of its fleet estimated Available Days for
2022.
As of the same date, the Partnership’s
contracted revenue backlog estimate (2) (3) was $1.10 billion, with
an average remaining contract term of 7.5 years.
Recent Developments
As of the date of this report, we have sold
$0.83 million of common units at an average price per unit of
$2.9758 pursuant to Current ATM Program, which following such sales
has $29.2 million of remaining availability.
(1) Time charter coverage for the Partnership’s
fleet is calculated by dividing the fleet contracted days on the
basis of the earliest estimated delivery and redelivery dates
prescribed in the Partnership’s current time charter contracts, net
of scheduled class survey repairs by the number of expected
Available Days during that period.
(2) The Partnership calculates its estimated
contracted revenue backlog by multiplying the contractual daily
hire rate by the expected number of days committed under the
contracts (assuming earliest delivery and redelivery and excluding
options to extend), assuming full utilization. The actual amount of
revenues earned and the actual periods during which revenues are
earned may differ from the amounts and periods disclosed due to,
for example, dry-docking and/or special survey downtime,
maintenance projects, off-hire downtime and other factors that
result in lower revenues than the Partnership’s average contract
backlog per day.
(3) $0.16 billion of the revenue backlog
estimate relates to the estimated portion of the hire contained in
certain time charter contracts with Yamal which represents the
operating expenses of the respective vessels and is subject to
yearly adjustments on the basis of the actual operating costs
incurred within each year. The actual amount of revenues earned in
respect of such variable hire rate may therefore differ from the
amounts included in the revenue backlog estimate due to the yearly
variations in the respective vessels’ operating costs.
Conference Call and Webcast:
As announced, the Partnership’s management team
will host a conference call on March 17, 2021 at 10:00 a.m. Eastern
Time to discuss the Partnership’s financial results.
Conference Call details:
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1 (877) 553-9962 (US
Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44
(0) 2071 928592 (Standard International Dial In). Please quote
"Dynagas."
A telephonic replay of the conference call will
be available until March 23, 2021, by dialing 1(866) 331-1332 (US
Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44
(0) 3333 009785, (Standard International Dial In) and the access
code required for the replay is: 59711562#.
Audio Webcast - Slides
Presentation:
There will be a live and then archived audio
webcast of the conference call, via the internet through the
Dynagas LNG Partners website www.dynagaspartners.com. Participants
to the live webcast should register on the website approximately 10
minutes prior to the start of the webcast.
The slide presentation on the fourth quarter
ended December 31, 2020 financial results will be available in PDF
format 10 minutes prior to the conference call and webcast,
accessible on the company's website www.dynagaspartners.com on
the webcast page. Participants to the webcast can download the PDF
presentation. None of the information contained in or that forms a
part of the Partnership’s conference calls, website or audio
webcasts is part of this release.
About
Dynagas
LNG
Partners
LP
Dynagas LNG Partners LP. (NYSE: DLNG) is a
master limited partnership which owns and operates liquefied
natural gas (LNG) carriers employed on multi-year charters. The
Partnership’s current fleet consists of six LNG carriers, with
aggregate carrying capacity of approximately 914,000 cubic
meters.
Visit the Partnership’s website at
www.dynagaspartners.com
Contact Information:Dynagas LNG
Partners LP Attention: Michael Gregos Tel. +30 210 8917960 Email:
management@dynagaspartners.com
Investor Relations / Financial Media: Nicolas
Bornozis Markella KaraCapital Link, Inc. 230 Park Avenue, Suite
1536 New York, NY 10169 Tel. (212) 661-7566 E-mail:
dynagas@capitallink.com
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Partnership desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “project”, “will”, “may,” “should,” “expect,”
“expected,” “pending” and similar expressions identify
forward-looking statements. These forward-looking are not intended
to give any assurance as to future results and should not be relied
upon.
The forward-looking statements in this press
release are based upon various assumptions and estimates, many of
which are based, in turn, upon further assumptions, including
without limitation, examination by the Partnership’s management of
historical operating trends, data contained in its records and
other data available from third parties. Although the Partnership
believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond the Partnership’s control, the
Partnership cannot assure you that it will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in the Partnership’s view, could cause
actual results to differ materially from those discussed, expressed
or implied, in the forward-looking statements include, but are not
limited to, the strength of world economies and currency
fluctuations, general market conditions, including fluctuations in
charter rates, ownership days, and vessel values, changes in supply
and demand for Liquefied Natural Gas (LNG) shipping capacity,
changes in the Partnership’s operating expenses, including bunker
prices, drydocking and insurance costs, the market for the
Partnership’s vessels, availability of financing and refinancing,
changes in governmental laws, rules and regulations or actions
taken by regulatory authorities, economic, regulatory, political
and governmental conditions that affect the shipping and the LNG
industry, potential liability from pending or future litigation and
potential costs due to environmental damage and vessel collisions,
general domestic and international political conditions, potential
disruption of shipping routes due to accidents, political events,
public health threats, pandemics, international hostilities and
instability, piracy, acts by terrorist or events, including “trade
wars”, vessel breakdowns, instances of off-hires, the length and
severity of the COVID-19 outbreak, the impact of public health
threats and outbreaks of other highly communicable diseases, the
impact of the expected discontinuance of LIBOR after 2021 on
interest rates of our debt that reference LIBOR, the amount of cash
available for distribution, and other factors. Please see the
Partnership’s filings with the Securities and Exchange Commission
for a more complete discussion of these and other risks and
uncertainties. The information set forth herein speaks only as of
the date hereof, and the Partnership disclaims any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this communication.
APPENDIX A
DYNAGAS LNG PARTNERS
LPCondensed Consolidated Statements of
Income
(In thousands of U.S. dollars
except units and per unit data) |
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
2020(unaudited) |
|
2019(unaudited) |
|
2020(unaudited) |
|
2019(audited) |
REVENUES |
|
|
|
|
|
|
|
|
Voyage revenues |
$ |
34,435 |
|
$ |
34,317 |
|
$ |
137,165 |
|
$ |
130,901 |
|
EXPENSES |
|
|
|
|
|
|
|
|
Voyage expenses (including
related party) |
|
(689 |
) |
|
(775 |
) |
|
(2,994 |
) |
|
(2,709 |
) |
Vessel operating expenses |
|
(7,143 |
) |
|
(7,065 |
) |
|
(28,830 |
) |
|
(28,351 |
) |
General and administrative
expenses (including related party) |
|
(667 |
) |
|
(885 |
) |
|
(2,528 |
) |
|
(2,708 |
) |
Management fees -related
party |
|
(1,697 |
) |
|
(1,647 |
) |
|
(6,752 |
) |
|
(6,537 |
) |
Depreciation |
|
(7,993 |
) |
|
(7,992 |
) |
|
(31,797 |
) |
|
(30,680 |
) |
Operating
income |
|
16,246 |
|
|
15,953 |
|
|
64,264 |
|
|
59,916 |
|
Interest and finance costs,
net |
|
(5,711 |
) |
|
(10,362 |
) |
|
(26,837 |
) |
|
(56,260 |
) |
Gain/(Loss) on derivative
instruments |
|
209 |
|
|
- |
|
|
(3,148 |
) |
|
- |
|
Other, net |
|
(101 |
) |
|
(62 |
) |
|
(227 |
) |
|
(43 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
10,643 |
|
$ |
5,529 |
|
$ |
34,052 |
|
$ |
3,613 |
|
Earnings/ (loss) per
common unit (basic and diluted) |
$ |
0.22 |
|
$ |
0.07 |
|
$ |
0.63 |
|
$ |
(0.22 |
) |
Weighted average
number of units outstanding, basic and diluted: |
|
|
|
|
|
|
|
|
Common
units |
|
35,612,580 |
|
|
35,490,000 |
|
|
35,546,823 |
|
|
35,490,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DYNAGAS LNG PARTNERS LP
Consolidated Condensed Balance
Sheets(Expressed in thousands of U.S.
Dollars—except for unit data)
|
|
December 31,2020(unaudited) |
|
December 31,2019(audited) |
ASSETS: |
|
|
|
|
Cash and cash equivalents and restricted cash (current and
non-current) |
$ |
74,979 |
|
$ |
66,206 |
|
Due from related party
(current and non-current) |
|
1,350 |
|
|
1,350 |
|
Other current assets |
|
2,141 |
|
|
1,966 |
|
Vessels, net |
|
884,900 |
|
|
916,697 |
|
Other non-current assets |
|
2,467 |
|
|
2,968 |
|
Total
assets |
$ |
965,837 |
|
$ |
989,187 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Total long-term debt, net of
deferred financing costs |
$ |
607,681 |
|
$ |
653,154 |
|
Total other current
liabilities |
|
14,092 |
|
|
16,951 |
|
Derivative financial
instrument (current and non-current) |
|
2,666 |
|
|
— |
|
Due to related party (current
and non-current) |
|
1,706 |
|
|
2,202 |
|
Total other non-current
liabilities |
|
3,199 |
|
|
3,173 |
|
Total
liabilities |
$ |
629,344 |
|
$ |
675,480 |
|
|
|
|
|
|
PARTNERS’
EQUITY |
|
|
|
|
General partner (35,526 units
issued and outstanding as at December 31, 2020 and December 31,
2019) |
|
(5 |
) |
|
(28 |
) |
Common unitholders 35,612,580
units issued and outstanding as at December 31, 2020 and 35,490,000
units issued and outstanding as at December 31, 2019) |
|
209,784 |
|
|
187,021 |
|
Series A Preferred
unitholders: (3,000,000 units issued and outstanding as at December
31, 2020 and December 31, 2019) |
|
73,216 |
|
|
73,216 |
|
Series B Preferred
unitholders: (2,200,000 units issued and outstanding as at December
31, 2020 and December 31, 2019) |
|
53,498 |
|
|
53,498 |
|
Total partners’
equity |
$ |
336,493 |
|
$ |
313,707 |
|
|
|
|
|
|
Total liabilities and
partners’ equity |
$ |
965,837 |
|
$ |
989,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DYNAGAS LNG PARTNERS LP
Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. Dollars)
|
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Cash flows from
Operating Activities: |
|
|
|
|
|
|
|
|
Net income: |
$ |
10,643 |
|
$ |
5,529 |
|
$ |
34,052 |
|
$ |
3,613 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
7,993 |
|
|
7,992 |
|
|
31,797 |
|
|
30,680 |
|
Amortization and write-off of
deferred financing fees |
|
613 |
|
|
769 |
|
|
2,526 |
|
|
10,696 |
|
Deferred revenue
amortization |
|
167 |
|
|
53 |
|
|
400 |
|
|
(377 |
) |
Amortization of deferred
charges |
|
55 |
|
|
55 |
|
|
217 |
|
|
181 |
|
Loss/(Gain) on derivative
financial instrument |
|
(209 |
) |
|
— |
|
|
3,148 |
|
|
— |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Trade accounts receivable |
|
(19 |
) |
|
(143 |
) |
|
(241 |
) |
|
(95 |
) |
Prepayments and other
assets |
|
441 |
|
|
85 |
|
|
156 |
|
|
(413 |
) |
Inventories |
|
(42 |
) |
|
81 |
|
|
(90 |
) |
|
502 |
|
Due from/ to related
parties |
|
(41 |
) |
|
3,256 |
|
|
(496 |
) |
|
2,982 |
|
Deferred charges |
|
(17 |
) |
|
(1 |
) |
|
(90 |
) |
|
(1,000 |
) |
Trade accounts payable |
|
(45 |
) |
|
348 |
|
|
(1,033 |
) |
|
(101 |
) |
Accrued liabilities |
|
129 |
|
|
(2,738 |
) |
|
7 |
|
|
(2,565 |
) |
Unearned revenue |
|
(5,488 |
) |
|
(1,814 |
) |
|
(1,750 |
) |
|
(926 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by
Operating Activities |
|
14,180 |
|
|
13,472 |
|
|
68,603 |
|
|
43,177 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
Investing Activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Cash flows from
Financing Activities: |
|
|
|
|
|
|
|
|
Issuance of common units, net
of issuance costs |
|
21 |
|
|
— |
|
|
297 |
|
|
— |
|
Payment of securities
registration and other filing costs |
|
(73 |
) |
|
— |
|
|
(90 |
) |
|
(139 |
) |
Distributions declared and
paid |
|
(2,891 |
) |
|
(2,890 |
) |
|
(11,563 |
) |
|
(16,391 |
) |
Proceeds from long-term
debt |
|
— |
|
|
— |
|
|
— |
|
|
675,000 |
|
Repayment of long-term
debt |
|
(12,000 |
) |
|
(262,000 |
) |
|
(48,000 |
) |
|
(734,800 |
) |
Payment of derivative
instruments |
|
(304 |
) |
|
— |
|
|
(474 |
) |
|
— |
|
Payment of deferred finance
fees |
|
— |
|
|
— |
|
|
— |
|
|
(10,558 |
) |
Net cash used in
Financing Activities |
|
(15,247 |
) |
|
(264,890 |
) |
|
(59,830 |
) |
|
(86,888 |
) |
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents and restricted
cash |
|
(1,067 |
) |
|
(251,418 |
) |
|
8,773 |
|
|
(43,711 |
) |
Cash and cash equivalents and
restricted cash at beginning of the period |
|
76,046 |
|
|
317,624 |
|
|
66,206 |
|
|
109,917 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
74,979 |
|
$ |
66,206 |
|
$ |
74,979 |
|
$ |
66,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX B
Fleet statistics
|
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(expressed in United states
dollars except for operational data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Number of vessels at the end of period |
|
6 |
|
|
6 |
|
|
6 |
|
|
6 |
|
Average number of vessels in
the period (1) |
|
6 |
|
|
6 |
|
|
6 |
|
|
6 |
|
Calendar Days (2) |
|
552.0 |
|
|
552.0 |
|
|
2,196.0 |
|
|
2,190.0 |
|
Available Days (3) |
|
552.0 |
|
|
552.0 |
|
|
2,196.0 |
|
|
2,190.0 |
|
Revenue earning days (4) |
|
552.0 |
|
|
552.0 |
|
|
2,190.7 |
|
|
2,156.3 |
|
Time Charter Equivalent
(5) |
$ |
61,134 |
|
$ |
60,764 |
|
$ |
61,098 |
|
$ |
58,535 |
|
Fleet Utilization (4) |
|
100 |
% |
|
100 |
% |
|
99.8 |
% |
|
98.5 |
% |
Vessel daily operating
expenses (6) |
$ |
12,940 |
|
$ |
12,799 |
|
$ |
13,128 |
|
$ |
12,946 |
|
(1) |
Represents the number of vessels that constituted the Partnership’s
fleet for the relevant period, as measured by the sum of the number
of days that each vessel was a part of the Partnership’s fleet
during the period divided by the number of Calendar Days (defined
below) in the period. |
(2) |
“Calendar Days” are the total days that the Partnership possessed
the vessels in its fleet for the relevant period. |
(3) |
“Available Days” are the total number of Calendar Days that the
Partnership’s vessels were in its possession during a period, less
the total number of scheduled off-hire days during the period
associated with major repairs, or dry-dockings. |
(4) |
The Partnership calculates fleet utilization by dividing the number
of its Revenue earning days, which are the total number of
Available Days of the Partnership’s vessels net of unscheduled
off-hire days (which do not include positioning/ repositioning days
for which compensation has been received) during a period by the
number of Available Days. The shipping industry uses fleet
utilization to measure a company’s efficiency in finding employment
for its vessels and minimizing the amount of days that its vessels
are off-hire for reasons such as unscheduled repairs but excluding
scheduled off-hires for vessel upgrades, dry-dockings or special or
intermediate surveys. |
(5) |
Time charter equivalent rate (“TCE rate”), is a measure of the
average daily revenue performance of a vessel. For time charters,
this is calculated by dividing total voyage revenues, less any
voyage expenses, by the number of Available Days during that
period. Under a time charter, the charterer pays substantially all
vessel voyage related expenses. However, the Partnership may incur
voyage related expenses when positioning or repositioning vessels
before or after the period of a time charter, during periods of
commercial waiting time or while off-hire during dry-docking or due
to other unforeseen circumstances. The TCE rate is not a measure of
financial performance under U.S. GAAP (non-GAAP measure), and
should not be considered as an alternative to voyage revenues, the
most directly comparable GAAP measure, or any other measure of
financial performance presented in accordance with U.S. GAAP.
However, the TCE rate is a standard shipping industry performance
measure used primarily to compare period-to-period changes in a
company’s performance and to assist the Partnership’s management in
making decisions regarding the deployment and use of the
Partnership’s vessels and in evaluating their financial
performance. The Partnership’s calculation of TCE rates may not be
comparable to that reported by other companies. The following table
reflects the calculation of the Partnership’s TCE rates for the
three months and year ended December 31, 2020 and 2019 (amounts in
thousands of U.S. dollars, except for TCE rates, which are
expressed in U.S. dollars, and Available Days): |
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
(In thousands of U.S. dollars,
except for Available Days and TCE rate) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Voyage revenues |
$ |
34,435 |
|
$ |
34,317 |
|
$ |
137,165 |
|
$ |
130,901 |
|
Voyage Expenses * |
|
(689 |
) |
|
(775 |
) |
|
(2,994 |
) |
|
(2,709 |
) |
Time Charter
equivalent revenues |
$ |
33,746 |
|
$ |
33,542 |
|
$ |
134,171 |
|
$ |
128,192 |
|
Available Days |
|
552.0 |
|
|
552.0 |
|
|
2,196.0 |
|
|
2,190.0 |
|
Time charter
equivalent (TCE) rate |
$ |
61,134 |
|
$ |
60,764 |
|
$ |
61,098 |
|
$ |
58,535 |
|
*Voyage expenses include commissions of 1.25% paid to Dynagas Ltd.,
the Partnership’s Manager, and third party ship brokers, when
defined in the charter parties, bunkers, port expenses and other
minor voyage expenses. |
|
|
(6) |
Daily vessel operating expenses, which include crew costs,
provisions, deck and engine stores, lubricating oil, insurance,
spares and repairs and flag taxes, are calculated by dividing
vessel operating expenses by fleet Calendar Days for the relevant
time period. |
|
|
Reconciliation of U.S. GAAP Financial
Information to Non-GAAP Financial Information
Reconciliation of Net Income to Adjusted
EBITDA
|
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(In thousands of U.S.
dollars) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
Net income |
$ |
10,643 |
|
|
$ |
5,529 |
|
|
$ |
34,052 |
|
|
$ |
3,613 |
|
Net interest and finance costs
(1) |
|
5,711 |
|
|
|
10,362 |
|
|
|
26,837 |
|
|
|
56,260 |
|
Depreciation |
|
7,993 |
|
|
|
7,992 |
|
|
|
31,797 |
|
|
|
30,680 |
|
Loss/(gain) on derivative
financial instrument |
|
(209 |
) |
|
|
— |
|
|
|
3,148 |
|
|
|
— |
|
Amortization of deferred
revenue |
|
167 |
|
|
|
53 |
|
|
|
400 |
|
|
|
(377 |
) |
Amortization of deferred
charges |
|
55 |
|
|
|
55 |
|
|
|
217 |
|
|
|
181 |
|
Adjusted
EBITDA |
$ |
24,360 |
|
|
$ |
23,991 |
|
|
$ |
96,451 |
|
|
$ |
90,357 |
|
(1) Includes interest and finance costs and interest income, if
any.
The Partnership defines Adjusted EBITDA as
earnings before interest and finance costs, net of interest income
(if any), gains/losses on derivative financial instruments, taxes
(when incurred), depreciation and amortization (when incurred),
class survey costs and significant non-recurring items (if any).
Adjusted EBITDA is used as a supplemental financial measure by
management and external users of financial statements, such as
investors, to assess the Partnership’s operating performance.
The Partnership believes that Adjusted EBITDA
assists its management and investors by providing useful
information that increases the ability to compare the Partnership’s
operating performance from period to period and against that of
other companies in its industry that provide Adjusted EBITDA
information. This increased comparability is achieved by excluding
the potentially disparate effects between periods or against
companies of interest, other financial items, depreciation and
amortization and taxes, which items are affected by various and
possible changes in financing methods, capital structure and
historical cost basis and which items may significantly affect net
income between periods. The Partnership believes that including
Adjusted EBITDA as a measure of operating performance benefits
investors in (a) selecting between investing in the Partnership and
other investment alternatives and (b) monitoring the Partnership’s
ongoing financial and operational strength.
Adjusted EBITDA is not intended to and does not
purport to represent cash flows for the period, nor is it presented
as an alternative to operating income. Further, Adjusted EBITDA is
not a measure of financial performance under U.S. GAAP and does not
represent and should not be considered as an alternative to net
income, operating income, cash flow from operating activities or
any other measure of financial performance presented in accordance
with U.S. GAAP. Adjusted EBITDA excludes some, but not all, items
that affect net income and these measures may vary among other
companies. Therefore, Adjusted EBITDA, as presented above, may not
be comparable to similarly titled measures of other businesses
because they may be defined differently by those other businesses.
It should not be considered in isolation or as a substitute for a
measure of performance prepared in accordance with GAAP. Any
Non-GAAP measures should be viewed as supplemental to, and should
not be considered as alternatives to, GAAP measures including, but
not limited to net earnings (loss), operating profit (loss), cash
flow from operating, investing and financing activities, or any
other measure of financial performance or liquidity presented in
accordance with GAAP.
Reconciliation of Net Income to Adjusted Net Income
available to common unitholders and Adjusted Earnings per common
unit
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(In thousands of U.S. dollars
except for units and per unit data) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
Net Income |
$ |
10,643 |
|
|
$ |
5,529 |
|
|
$ |
34,052 |
|
|
$ |
3,613 |
|
Non-cash expense from
accelerated amortization of deferred loan fees |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,497 |
|
Amortization of deferred
revenue |
|
167 |
|
|
|
53 |
|
|
|
400 |
|
|
|
(377 |
) |
Amortization of deferred
charges |
|
55 |
|
|
|
55 |
|
|
|
217 |
|
|
|
181 |
|
Loss/(gain) on derivative
financial instrument |
|
(209 |
) |
|
|
— |
|
|
|
3,148 |
|
|
|
— |
|
Adjusted Net
Income |
$ |
10,656 |
|
|
$ |
5,637 |
|
|
$ |
37,817 |
|
|
$ |
10,914 |
|
Less: Adjusted Net Income
attributable to preferred unitholders and general partner |
|
(2,899 |
) |
|
|
(2,893 |
) |
|
|
(11,589 |
) |
|
|
(11,562 |
) |
Common unitholders’
interest in Adjusted Net Income/(Loss) |
$ |
7,757 |
|
|
$ |
2,744 |
|
|
$ |
26,228 |
|
|
$ |
(648 |
) |
Weighted average number of
common units outstanding, basic and diluted: |
|
35,612,580 |
|
|
|
35,490,000 |
|
|
|
35,546,823 |
|
|
|
35,490,000 |
|
Adjusted
Earnings/(Loss) per common unit, basic and diluted |
$ |
0.22 |
|
|
$ |
0.08 |
|
|
$ |
0.74 |
|
|
$ |
(0.02 |
) |
Adjusted Net Income represents net income before
non-recurring expenses (if any), charter hire amortization related
to time charters with escalating time charter rates, amortization
of fair value of acquired time charters and changes in the fair
value of derivative financial instruments. Adjusted Net Income
available to common unitholders represents the common unitholders
interest in Adjusted Net Income for each period presented. Adjusted
Earnings per common unit represents Adjusted Net Income
attributable to common unitholders divided by the weighted average
common units outstanding during each period presented.
Adjusted Net Income, Adjusted Net Income per
common unit and Adjusted Earnings per common unit, basic and
diluted, are not recognized measures under U.S. GAAP and should not
be regarded as substitutes for net income and earnings per unit,
basic and diluted. The Partnership’s definitions of Adjusted Net
Income, Adjusted Net Income per common unit and Adjusted Earnings
per common unit, basic and diluted, may not be the same at those
reported by other companies in the shipping industry or other
industries. The Partnership believes that the presentation of
Adjusted Net Income and Adjusted Earnings per unit available to
common unitholders are useful to investors because these measures
facilitate the comparability and the evaluation of companies in the
Partnership’s industry. In addition, the Partnership believes that
Adjusted Net Income is useful in evaluating its operating
performance compared to that of other companies in the
Partnership’s industry because the calculation of Adjusted Net
Income generally eliminates the accounting effects of items which
may vary for different companies for reasons unrelated to overall
operating performance. The Partnership’s presentation of Adjusted
Net Income available to common unitholders and Adjusted Earnings
per common unit does not imply, and should not be construed as an
inference, that its future results will be unaffected by unusual or
non-recurring items and should not be considered in isolation or as
a substitute for a measure of performance prepared in accordance
with GAAP.
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