Highlights
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 and year ended
December 31, 2018.
Consolidated Financial Summary
| |
Three Months Ended |
Year Ended |
| (in
thousands of U.S. Dollars exceptper unit data) |
December 31,2018 |
September 30,2018 |
December 31,2017 |
December 31,2018 |
December 31,2017 |
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
| Voyage revenues |
149,805 |
|
123,336 |
|
126,307 |
|
510,762 |
|
432,676 |
|
| Income from vessel
operations |
65,164 |
|
46,998 |
|
62,378 |
|
147,809 |
|
148,649 |
|
| Equity income |
949 |
|
14,679 |
|
2,992 |
|
53,546 |
|
9,789 |
|
| Net income attributable
to the partnersand preferred unitholders |
6,579 |
|
25,950 |
|
39,877 |
|
28,369 |
|
33,965 |
|
| Limited partners’
interest in net incomeper common unit |
0.00 |
|
0.24 |
|
0.42 |
|
0.03 |
|
0.25 |
|
| NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
| Adjusted net income
attributable to thepartners and preferred unitholders (1) |
32,636 |
|
19,474 |
|
33,972 |
|
87,703 |
|
93,850 |
|
| Limited partners’
interest in adjustednet income per common unit |
0.32 |
|
0.16 |
|
0.35 |
|
0.76 |
|
0.98 |
|
| Total cash flow from
vessel operations(CFVO) (1) |
150,099 |
|
132,593 |
|
126,833 |
|
515,292 |
|
449,550 |
|
|
Distributable cash flow (DCF) (1) |
51,211 |
|
41,214 |
|
52,054 |
|
158,882 |
|
176,128 |
|
| (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). |
| (2) |
|
|
All
estimates are as of the date hereof, are approximations and based
on current information (including the number of outstanding common
units). Actual results may differ materially from these estimates,
and the Partnership expressly disclaims any obligation to release
publicly any updates or revisions to any such estimates, including
to reflect any change in the Partnership’s expectations with
respect thereto or any change in events, conditions or
circumstances on which any such estimates are based. |
| |
|
|
|
Fourth Quarter of 2018 Compared to
Fourth Quarter of 2017
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders for the
three months ended December 31, 2018, compared to the same
quarter in the prior year, were positively impacted by an increase
in earnings due to the deliveries of 12 liquefied natural gas (LNG)
carrier newbuildings in the Partnership’s consolidated fleet and
equity-accounted joint ventures between October 2017 and December
2018, and higher earnings from the Magellan Spirit, which was
chartered-in from the Partnership’s 52 percent-owned joint venture
with Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture)
commencing in September 2018. These increases were partially offset
by a decrease in earnings in 2018 on seven multi-gas carriers
following the termination of their previous charter contracts, the
sale of three conventional crude oil tankers during 2018, an
increase in off-hire days during 2018 for certain of the
Partnership’s vessels due to repairs, and an increase in general
and administrative expenses, a portion of which is
non-recurring.
In addition, GAAP net income attributable to the
partners and preferred unitholders was negatively impacted in the
three months ended December 31, 2018, compared to the same quarter
of the prior year, by various items, including unrealized losses on
non-designated and designated derivative instruments and unrealized
foreign currency exchange losses.
CEO Commentary
“Once again this quarter, our cash flows and
adjusted earnings were up significantly over the prior quarter as
the Partnership’s LNG segment grew and certain existing vessels
commenced new contracts at firm rates,” commented Mark Kremin,
President and Chief Executive Officer of Teekay Gas Group Ltd.
“This segment continued its expansion in early-2019 with the
delivery of two additional newbuilding LNG carriers, including the
Yamal Spirit, which delivered on January 31, 2019, soon after
finalizing its dedicated financing facility.” Mr. Kremin continued,
“With this latest financing facility now in place, we have
completed all of the necessary financings to take delivery of our
entire newbuilding orderbook which, at its peak, amounted to
approximately $3 billion."
“We expect our LNG segment results to be
significantly higher in 2019 primarily due to the delivery of 15
newbuilding LNG carriers during 2018 and throughout 2019 as well as
the start-up of the Bahrain LNG regasification terminal in 2019.
Collectively, the cash flow associated with these deliveries will
allow the Partnership to execute on its balanced capital allocation
strategy which will see the Partnership meaningfully delever its
balance sheet over the next few years while simultaneously return
significant cash flow to unitholders in the form of common unit
repurchases and common unit distributions, which will increase by
36 percent commencing this upcoming quarter.” Mr. Kremin continued,
“Today, we announced fiscal 2019 financial guidance that would
represent increases in adjusted net income per common unit and
total CFVO ranging from 143 percent to 190 percent and 23 percent
to 28 percent, respectively, compared to our fiscal 2018
results.”
2019 Guidance
Today, the Partnership is providing the below
supplementary information relating to the outlook for the
Partnership’s estimated fiscal 2019 results which are expected to
be significantly higher than fiscal 2018 primarily due to
newbuilding deliveries and higher charter rates earned from the
vessels trading on short-term contracts:
| (in millions of
U.S. Dollars except per unit data and percentages) |
Fiscal 2018 |
Fiscal 2019E (2) |
Percentage Increaseover 2018 |
| Adjusted net income
attributable to the partners and preferredunitholders (1) |
87.7 |
170 to
200 |
94% to
128% |
| Limited partners'
interest in adjusted net income per common unit (1) |
$0.76 |
$1.85
to $2.20 |
143%
to 190% |
| CFVO from consolidated
vessels (1) |
333.6 |
420 to
440 |
26% to
32% |
| Total CFVO (including
share of equity-accounted JVs) (1) |
515.3 |
635 to
660 |
23% to
28% |
| (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 GAAP. |
| (2) |
|
|
All
estimates are as of the date hereof, are approximations, are based
on current information (including the number of outstanding common
units). Actual results may differ materially from these estimates,
and the Partnership expressly disclaims any obligation to release
publicly any updates or revisions to any such estimates, including
to reflect any change in the Partnership’s expectations with
respect thereto or any change in events, conditions or
circumstances on which any such estimates are based. |
| |
|
|
|
Summary of Recent Events
Torben Spirit Charter
The Torben Spirit LNG Carrier commenced its
minimum three-year charter on January 1, 2019 at a charter rate in
excess of $100,000 per day for the duration of the contract.
LNG Carrier Newbuilding
Deliveries
In December 2018, the Partnership took delivery
of one M-Type, Electronically Controlled, Gas Injection (MEGI) LNG
carrier newbuilding, the Sean Spirit, which immediately commenced
its seven-year charter contract with BP Gas Marketing Limited.
In January 2019, the Partnership’s 20
percent-owned joint venture with China LNG Shipping (Holdings)
Limited (China LNG), CETS Investment Management (HK) Co. Ltd. (an
affiliate of China National Offshore Oil Corporation (CNOOC)) and
BW LNG Investments Pte. Ltd. (the Pan Union Joint Venture), took
delivery of one LNG carrier newbuilding, the Pan Africa, which
immediately commenced its 20-year charter contract with Royal Dutch
Shell (Shell).
In January 2019, the Partnership took delivery
of one MEGI LNG carrier newbuilding, the Yamal Spirit, which
immediately commenced its 15-year charter with Yamal Trade Pte Ltd.
Concurrent with the delivery, the Partnership entered into a $159
million, 15-year sale-leaseback financing arrangement with a
lessor, which added approximately $30 million of liquidity to
Teekay LNG.
Crude Oil Tanker
Dispositions
In January 2019, the Todelo Spirit, a Suezmax
tanker that was chartered-in by the Partnership under a capital
lease from the charterer, was sold to a third party. Upon the sale
of the vessel, the Partnership's charter contract for this vessel
was terminated and the remaining capital lease obligation was
extinguished. During 2018, the Partnership completed similar
transactions for three other Suezmax tankers, the Teide Spirit in
February 2018, the African Spirit in October 2018, and the European
Spirit in November 2018.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 C through E for
further details). During 2018, the Partnership’s Teekay Multi-Gas
Pool, including its seven directly-owned multi-gas carriers,
commenced operations. As part of this initiative, the Partnership
completed an internal reorganization and revised its internal
reporting, as these changes resulted in management viewing the gas
fleet and its components separately. Consequently, it was
determined that there had been a change in reportable segments
whereby the Partnership’s LPG and multi-gas carriers are reported
in a separate segment apart from its LNG carriers. All segment
information for comparative periods has been retroactively adjusted
to conform with the change in segment presentation adopted in
2018.
|
|
Three Months Ended |
| |
December 31, 2018 |
December 31, 2017 |
| (in thousands
of U.S. Dollars) |
(unaudited) |
(unaudited) |
| |
LiquefiedNaturalGas Segment |
LiquefiedPetroleumGas Segment |
ConventionalTankerSegment |
Total |
LiquefiedNaturalGasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
| GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
|
|
|
| Voyage revenues |
135,777 |
|
7,253 |
|
6,775 |
|
149,805 |
|
100,066 |
|
14,539 |
|
11,702 |
|
126,307 |
|
| Income (loss) from
vessel operations |
68,924 |
|
(5,367 |
) |
1,607 |
|
65,164 |
|
51,576 |
|
8,819 |
|
1,983 |
|
62,378 |
|
| Equity income
(loss) |
4,252 |
|
(3,303 |
) |
— |
|
949 |
|
9,090 |
|
(6,098 |
) |
— |
|
2,992 |
|
| NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
|
|
|
| CFVO from consolidated
vessels(i) |
99,981 |
|
(2,781 |
) |
2,099 |
|
99,299 |
|
75,731 |
|
10,936 |
|
4,122 |
|
90,789 |
|
| CFVO from
equity-accounted vessels(i) |
43,893 |
|
6,907 |
|
— |
|
50,800 |
|
29,201 |
|
6,843 |
|
— |
|
36,044 |
|
|
Total CFVO(i) |
143,874 |
|
4,126 |
|
2,099 |
|
150,099 |
|
104,932 |
|
17,779 |
|
4,122 |
|
126,833 |
|
- 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 CFVO from
consolidated vessels for the liquefied natural gas segment for the
three months ended December 31, 2018, compared to the same quarter
of the prior year, were positively impacted primarily by: the
deliveries of seven LNG carrier newbuildings (the Macoma, Murex,
Magdala, Myrina, Megara, Bahrain Spirit and Sean Spirit) between
October 2017 and December 2018; and earnings from the Magellan
Spirit chartered-in from the Teekay LNG-Marubeni Joint Venture
commencing in September 2018. These increases were partially offset
by an increase in off-hire days during 2018 for certain of the
Partnership’s LNG carriers due to repairs; and an increase in
general and administrative expenses attributable to this
segment.
Equity income and CFVO from equity-accounted
vessels for the liquified natural gas segment for the three months
ended December 31, 2018, compared to the same quarter of the prior
year, were positively impacted by: deliveries of two ARC7 LNG
carrier newbuildings between January 2018 and September 2018 in the
Partnership's 50-percent owned Yamal LNG Joint Venture, the
deliveries of three LNG carriers between October 2017 and July 2018
in the Partnership’s Pan Union Joint Venture, with the
Partnership's ownership interest in these vessels ranging from 20
to 30 percent, and higher fleet utilization in the Teekay
LNG-Marubeni Joint Venture during the three months ended December
31, 2018 as certain of the joint venture’s vessels commenced
short-term charter contracts at higher rates compared to the
previous period. In addition, GAAP equity income was negatively
impacted by unrealized losses on non-designated and designated
derivative instruments in the Partnership's equity-accounted
investments.
Liquefied Petroleum Gas Segment
Loss from vessel operations and CFVO from
consolidated vessels for the liquefied petroleum gas segment for
the three months ended December 31, 2018, compared to the same
quarter of the prior year, were negatively impacted by lower
earnings on seven of the Partnership's multi-gas carriers following
the Partnership's termination of their charter contracts in the
fourth quarter of 2017 due to non-payment by the charterer, which
includes recognition of prepaid lease payments of $10.7 million in
the fourth quarter of 2017 received from the previous charterer in
prior periods.
GAAP equity loss for the liquified petroleum gas
segment for the three months ended December 31, 2018, compared to
the same quarter of the prior year, was positively impacted by
vessel write-downs in the Exmar LPG Joint Venture during the three
months ended December 31, 2017, partially offset by unrealized
losses on non-designated derivative instruments in the
Partnership's equity-accounted investments. CFVO from
equity-accounted vessels for the liquefied petroleum gas segment
for the three months ended December 31, 2018, was comparable to the
same quarter of the prior year.
Conventional Tanker Segment
Income from vessel operations and CFVO from
consolidated vessels for the conventional tanker segment for the
three months ended December 31, 2018, compared to the same quarter
of the prior year, were negatively impacted by the sales of the
Teide Spirit, African Spirit and European Spirit conventional
tankers during 2018.
Teekay LNG's
Fleet
The following table summarizes the Partnership’s
fleet as of February 1, 2019. The Partnership also has a 30 percent
interest in the Bahrain regasification terminal which is under
construction and is expected to commence operations in the summer
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 |
- Includes vessels accounted for as vessels related to capital
leases under which the Partnership is the lessee.
- The Partnership’s ownership interests in these vessels and
newbuildings range from 20 percent to 100 percent.
- The Partnership’s ownership interests in these newbuildings is
50 percent.
- The Partnership’s ownership interests in these vessels range
from 50 percent to 99 percent.
Liquidity
As of December 31, 2018, the Partnership
had total liquidity of $324.6 million (comprised of $149.0 million
in cash and cash equivalents and $175.6 million in undrawn credit
facilities).
Conference Call
The Partnership plans to host a conference call
on Thursday, February 21, 2019 at 11:00 a.m. (ET) to discuss the
results for the fourth quarter and year-ended December 31, 2018.
All unitholders and interested parties are invited to listen to the
live conference call by choosing from the following options:
- By dialing (800) 263-0877 or (647) 794-1827, if outside North
America, and quoting conference ID code 3163252.
- 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 Fourth Quarter and Fiscal Year
2018 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), 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 U.S. Securities and Exchange Commission. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Adjusted Net Income Attributable to the Partners and Preferred
Unitholders, and Distributable Cash Flow, 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 therefore 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.
Non-GAAP Financial Measures
Cash Flow from Vessel Operations (CFVO)
represents income (loss) from vessel operations before depreciation
and amortization expense, amortization of in-process revenue
contracts, vessel write-downs, goodwill write-downs, gain and
losses on the sales of vessels and adjustments for direct financing
leases to a cash basis, but includes realized gains or losses on a
derivative charter contract. CFVO from Consolidated Vessels
represents CFVO from vessels that are consolidated on the
Partnership’s financial statements. CFVO from Equity-Accounted
Vessels represents the Partnership’s proportionate share of CFVO
from its equity-accounted vessels. The Partnership does not control
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
entities in which the Partnership holds the equity-accounted
investments or distributed to the Partnership and other owners from
equity-accounted investments. In addition, the Partnership does not
control the timing of such distributions to the Partnership and
other owners. Consequently, readers are cautioned when using total
CFVO as a liquidity measure as the amount contributed from CFVO
from Equity-Accounted Vessels may not be available to the
Partnership in the periods such CFVO is generated by its
equity-accounted vessels. CFVO is a non-GAAP financial measure used
by certain investors and management to measure the operational
financial performance of companies. Please refer to Appendices D
and E of this release for reconciliations of these non-GAAP
financial measures to income (loss) from vessel operations and
income from vessel operations of equity-accounted vessels,
respectively, the most directly comparable GAAP measures reflected
in the Partnership’s consolidated financial statements included in
this release.
Adjusted Net Income Attributable to the Partners
and Preferred Unitholders excludes items of income or loss from
GAAP net income 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,
and refer to footnote (4) of the Consolidated Statements of Income
for a reconciliation of adjusted equity income to equity income,
the most directly comparable GAAP measure reflected in the
Partnership’s consolidated financial statements included in this
release.
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 and foreign
exchange related items, including the Partnership’s proportionate
share of such items in 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, the most directly comparable GAAP measure
reflected in the Partnership’s consolidated financial statements
included in this release.
Teekay LNG Partners L.P.Consolidated
Statements of Income(in thousands of U.S. Dollars, except
unit and per unit data)
|
|
Three Months Ended |
Year End |
| |
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
| 2018 |
2018 |
2017 |
2018 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Voyage
revenues |
149,805 |
|
123,336 |
|
126,307 |
|
510,762 |
|
432,676 |
|
| |
|
|
|
|
|
| Voyage expenses |
(6,529 |
) |
(7,956 |
) |
(4,303 |
) |
(28,237 |
) |
(8,202 |
) |
| Vessel operating
expenses(1) |
(30,454 |
) |
(25,993 |
) |
(27,676 |
) |
(117,658 |
) |
(101,539 |
) |
| Time-charter hire
expense |
(5,980 |
) |
(1,690 |
) |
— |
|
(7,670 |
) |
— |
|
| Depreciation and
amortization |
(33,079 |
) |
(32,238 |
) |
(27,651 |
) |
(124,378 |
) |
(105,545 |
) |
| General and
administrative expenses(1) |
(7,809 |
) |
(5,811 |
) |
(4,299 |
) |
(28,512 |
) |
(18,141 |
) |
| Write-down of goodwill
and vessels(2) |
(790 |
) |
(2,201 |
) |
— |
|
(54,653 |
) |
(50,600 |
) |
| Restructuring
charges(3) |
— |
|
(449 |
) |
— |
|
(1,845 |
) |
— |
|
|
Income from vessel operations |
65,164 |
|
46,998 |
|
62,378 |
|
147,809 |
|
148,649 |
|
| |
|
|
|
|
|
| Equity income(4) |
949 |
|
14,679 |
|
2,992 |
|
53,546 |
|
9,789 |
|
| Interest expense |
(39,551 |
) |
(35,875 |
) |
(23,333 |
) |
(128,303 |
) |
(80,937 |
) |
| Interest income |
964 |
|
980 |
|
880 |
|
3,760 |
|
2,915 |
|
| Realized and unrealized
(loss) gain on non- designated derivative instruments(5) |
(11,540 |
) |
2,515 |
|
3,066 |
|
3,278 |
|
(5,309 |
) |
| Foreign currency
exchange (loss) gain(6) |
(7,244 |
) |
1,445 |
|
(2,436 |
) |
1,371 |
|
(26,933 |
) |
| Other income
(expense)(7) |
545 |
|
314 |
|
424 |
|
(51,373 |
) |
1,561 |
|
|
Net income (loss) before tax expense |
9,287 |
|
31,056 |
|
43,971 |
|
30,088 |
|
49,735 |
|
| Income tax (expense)
recovery |
(42 |
) |
(1,549 |
) |
319 |
|
(3,213 |
) |
(824 |
) |
|
Net income |
9,245 |
|
29,507 |
|
44,290 |
|
26,875 |
|
48,911 |
|
| |
|
|
|
|
|
| Non-controlling
interest in net income (loss) |
2,666 |
|
3,557 |
|
4,413 |
|
(1,494 |
) |
14,946 |
|
| Preferred unitholders'
interest in net income |
6,425 |
|
6,425 |
|
5,541 |
|
25,701 |
|
13,979 |
|
| General partner's
interest in net income |
2 |
|
391 |
|
687 |
|
53 |
|
400 |
|
| Limited partners’
interest in net income |
152 |
|
19,134 |
|
33,649 |
|
2,615 |
|
19,586 |
|
| Limited partners'
interest in net income per common unit: |
|
|
|
|
|
| • Basic |
0.00 |
|
0.24 |
|
0.42 |
|
0.03 |
|
0.25 |
|
| • Diluted |
0.00 |
|
0.24 |
|
0.42 |
|
0.03 |
|
0.25 |
|
| Weighted-average number
of common units outstanding: |
|
|
|
|
|
| • Basic |
79,676,541 |
|
79,687,499 |
|
79,626,819 |
|
79,672,435 |
|
79,617,778 |
|
| • Diluted |
79,843,339 |
|
79,859,471 |
|
79,839,231 |
|
79,842,328 |
|
79,791,041 |
|
| Total
number of common units outstanding at end of period |
79,360,719 |
|
79,687,499 |
|
79,626,819 |
|
79,360,719 |
|
79,626,819 |
|
| (1) |
|
|
The
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) increasing vessel operating expenses by
($1.6) million, $0.7 million and ($1.6) million for the three
months ended September 30, 2018, December 31, 2017 and year ended
December 31, 2017, respectively, and an offsetting effect for
general and administrative expenses in each respective period.
There is no impact on income from vessel operations or net income
as a result of these reclassifications. |
| |
|
|
|
| (2) |
|
|
The
African Spirit and European Spirit conventional tankers were
classified as vessels held for sale upon the expiration of their
time-charter contracts in 2017. The Partnership recorded aggregate
write-downs of $2.2 million and $7.9 million for the three months
ended September 30, 2018, and year ended December 31, 2018,
respectively, on these two conventional tankers as the estimated
fair values of these vessels had decreased. In June 2018, the
carrying values for four of the Partnership's seven wholly-owned
multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and
Cathinka Spirit) were written down to their estimated fair values,
using appraised values, as a result of the Partnership's evaluation
of alternative strategies for these assets, combined with the then
current charter rate environment and the outlook for charter rates
for these vessels. The total impairment charge of $33.0 million
related to these four multi-gas carriers is included in write-down
of goodwill and vessels for the year ended December 31, 2018. In
addition, the Partnership recorded a write-down of $13.0 million
for the year ended December 31, 2018 relating to the Alexander
Spirit conventional tanker to its estimated fair value, using an
appraised value. This was a result of changes in the Partnership's
expectations of the vessel's future opportunities after its current
contract ends in 2019. The write-down of vessels of $50.6 million
for the year ended December 31, 2017, relates to the combined
write-downs of the African Spirit and European Spirit of $25.1
million for the year ended December 31, 2017, upon the Partnership
marketing the vessels for sale in 2017; and the aggregate
write-downs of the Teide Spirit and Toledo Spirit conventional
tankers of $25.5 million for the year ended December 31, 2017 upon
the charterer notifying the Partnership of its intention to sell
the Teide Spirit in 2017 (sold February 2018) and the Partnership's
expectation that the charterer would sell the Toledo Spirit in 2018
(sold January 2019).Included in write-down of goodwill and vessels
for the three months and year ended December 31, 2018 is an
impairment change of $0.8 million relating to the Partnership's
goodwill attributable to its LPG segment. |
| |
|
|
|
| (3) |
|
|
In
February 2018, the Teide Spirit conventional tanker was sold and as
a result of this sale, the Partnership recorded restructuring
charges of $0.4 million and $1.8 million relating to seafarer
severance costs for the three months ended September 30, 2018 and
year ended December 31, 2018, respectively. |
| |
|
|
|
| (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 |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
| Equity income |
949 |
|
14,679 |
|
2,992 |
|
53,546 |
|
9,789 |
|
| Proportionate share of
unrealized loss (gain) on non-designated interest rate
swaps |
4,736 |
|
(2,614 |
) |
(4,404 |
) |
(9,076 |
) |
(7,491 |
) |
| Proportionate share of
ineffective portion of hedge-accounted interest rate
swaps |
4,831 |
|
(105 |
) |
566 |
|
(342 |
) |
5,100 |
|
| Proportionate share of
write-down and loss on sale of vessels |
— |
|
— |
|
5,500 |
|
257 |
|
5,500 |
|
| Gain on sale of
equity-accounted investment |
— |
|
— |
|
— |
|
(5,563 |
) |
— |
|
|
Proportionate share of other items |
181 |
|
(185 |
) |
191 |
|
(4 |
) |
651 |
|
| Equity
income adjusted for items in Appendix A |
10,697 |
|
11,775 |
|
4,845 |
|
38,818 |
|
13,549 |
|
| (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 |
Year Ended |
| |
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
| |
2018 |
2018 |
2017 |
2018 |
2017 |
| Realized
(losses) gains relating to: |
|
|
|
|
|
| Interest rate swap
agreements |
(2,804 |
) |
(3,062 |
) |
(5,012 |
) |
(14,654 |
) |
(18,825 |
) |
| Interest rate swap and
swaption agreements termination |
— |
|
(13,681 |
) |
— |
|
(13,681 |
) |
(610 |
) |
| Toledo Spirit
time-charter derivative contract |
(668 |
) |
1,689 |
|
152 |
|
1,480 |
|
678 |
|
|
|
(3,472 |
) |
(15,054 |
) |
(4,860 |
) |
(26,855 |
) |
(18,757 |
) |
| Unrealized
(losses) gains relating to: |
|
|
|
|
|
| Interest rate swap
agreements |
(7,637 |
) |
19,278 |
|
8,182 |
|
31,061 |
|
12,393 |
|
| Interest rate swaption
agreements |
— |
|
— |
|
518 |
|
2 |
|
945 |
|
| Toledo Spirit
time-charter derivative contract |
(431 |
) |
(1,709 |
) |
(774 |
) |
(930 |
) |
110 |
|
|
|
(8,068 |
) |
17,569 |
|
7,926 |
|
30,133 |
|
13,448 |
|
| Total
realized and unrealized (losses) gains on non-designated
derivative instruments |
(11,540 |
) |
2,515 |
|
3,066 |
|
3,278 |
|
(5,309 |
) |
| (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.Foreign currency
exchange (loss) gain 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 gain
(loss) also includes unrealized 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 |
Year Ended |
| |
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
| |
2018 |
2018 |
2017 |
2018 |
2017 |
| Realized losses on
cross-currency swaps |
(1,607 |
) |
(1,744 |
) |
(2,125 |
) |
(6,533 |
) |
(9,344 |
) |
| Realized losses on
cross-currency swaps termination |
— |
|
(42,271 |
) |
— |
|
(42,271 |
) |
(25,733 |
) |
| Realized gains on
repurchase of NOK bonds |
— |
|
42,271 |
|
— |
|
42,271 |
|
25,733 |
|
| Unrealized (losses)
gains on cross-currency swaps |
(28,494 |
) |
43,966 |
|
(9,081 |
) |
21,240 |
|
49,047 |
|
|
Unrealized gains (losses) on revaluation of NOK bonds |
21,066 |
|
(41,549 |
) |
7,760 |
|
(23,118 |
) |
(47,076 |
) |
| (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, for the year ended
December 31, 2018, the Teekay Nakilat Joint Venture recognized an
additional liability of $53.0 million, which was included as part
of other income (expense) in the Consolidated Statements of Income,
and 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 December 31, |
September 30, |
As at December 31, |
|
|
2018 |
2018 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
|
|
Current |
|
|
|
| Cash and cash
equivalents |
149,014 |
|
139,854 |
|
244,241 |
|
| Restricted cash –
current |
38,329 |
|
36,429 |
|
22,326 |
|
| Accounts
receivable |
20,795 |
|
25,732 |
|
24,054 |
|
| Prepaid expenses |
8,076 |
|
9,277 |
|
6,539 |
|
| Vessels held for
sale |
— |
|
28,482 |
|
33,671 |
|
| Current portion of
derivative assets |
835 |
|
1,453 |
|
1,078 |
|
| Current portion of net
investments in direct financing leases |
12,635 |
|
12,273 |
|
9,884 |
|
| Current portion of
advances to equity-accounted joint ventures |
79,108 |
|
— |
|
— |
|
| Advances to
affiliates |
8,229 |
|
5,163 |
|
7,300 |
|
| Other current
assets |
2,306 |
|
4,400 |
|
— |
|
|
Total current assets |
319,327 |
|
263,063 |
|
349,093 |
|
| |
|
|
|
| Restricted cash –
long-term |
35,521 |
|
30,159 |
|
72,868 |
|
| Vessels and
equipment |
|
|
|
| At cost, less
accumulated depreciation |
1,657,338 |
|
1,463,438 |
|
1,416,381 |
|
| Vessels related to
capital leases, at cost, less accumulated depreciation |
1,585,243 |
|
1,597,418 |
|
1,044,838 |
|
| Advances
on newbuilding contracts |
86,942 |
|
172,248 |
|
444,493 |
|
|
Total vessels and equipment |
3,329,523 |
|
3,233,104 |
|
2,905,712 |
|
| Investment in and
advances to equity-accounted joint ventures |
1,037,025 |
|
1,118,361 |
|
1,094,596 |
|
| Net investments in
direct financing leases |
562,528 |
|
565,423 |
|
486,106 |
|
| Derivative assets |
2,362 |
|
19,164 |
|
8,043 |
|
| Other assets |
11,432 |
|
9,148 |
|
6,172 |
|
| Intangible assets –
net |
52,222 |
|
54,436 |
|
61,078 |
|
| Goodwill |
34,841 |
|
35,631 |
|
35,631 |
|
|
Total assets |
5,384,781 |
|
5,328,489 |
|
5,019,299 |
|
| LIABILITIES AND
EQUITY |
|
|
|
|
Current |
|
|
|
| Accounts payable |
3,830 |
|
4,158 |
|
3,509 |
|
| Accrued
liabilities |
74,753 |
|
67,977 |
|
45,757 |
|
| Unearned revenue |
30,108 |
|
23,080 |
|
25,873 |
|
| Current portion of
long-term debt |
135,901 |
|
155,261 |
|
552,404 |
|
| Current obligations
related to capital leases |
81,219 |
|
81,149 |
|
106,946 |
|
| In-process
contracts |
— |
|
1,803 |
|
7,946 |
|
| Current portion of
derivative liabilities |
11,604 |
|
12,224 |
|
79,139 |
|
| Advances from
affiliates |
14,731 |
|
20,061 |
|
12,140 |
|
|
Total current liabilities |
352,146 |
|
365,713 |
|
833,714 |
|
| Long-term debt |
1,833,875 |
|
1,744,961 |
|
1,245,588 |
|
| Long-term obligations
related to capital leases |
1,217,337 |
|
1,231,839 |
|
904,603 |
|
| Other long-term
liabilities |
43,788 |
|
41,930 |
|
58,174 |
|
| Derivative
liabilities |
55,038 |
|
30,877 |
|
45,797 |
|
|
Total liabilities |
3,502,184 |
|
3,415,320 |
|
3,087,876 |
|
|
Equity |
|
|
|
| Limited partners –
common units |
1,496,107 |
|
1,510,650 |
|
1,539,248 |
|
| Limited partners –
preferred units |
285,159 |
|
285,159 |
|
285,159 |
|
| General partner |
49,271 |
|
49,570 |
|
50,152 |
|
| Accumulated other
comprehensive income |
2,717 |
|
18,158 |
|
4,479 |
|
|
Partners' equity |
1,833,254 |
|
1,863,537 |
|
1,879,038 |
|
|
Non-controlling interest |
49,343 |
|
49,632 |
|
52,385 |
|
| Total
equity |
1,882,597 |
|
1,913,169 |
|
1,931,423 |
|
|
Total liabilities and total equity |
5,384,781 |
|
5,328,489 |
|
5,019,299 |
|
Teekay LNG Partners L.P.Consolidated
Statements of Cash Flows(in thousands of U.S. Dollars)
| |
Year Ended |
|
|
December 31, |
December 31, |
|
|
2018 |
2017 |
|
|
(unaudited) |
(unaudited) |
| Cash, cash equivalents
and restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
| Net
income |
26,875 |
|
48,911 |
|
| Non-cash and
non-operating items: |
|
|
|
Unrealized gain on non-designated derivative instruments |
(30,133 |
) |
(13,448 |
) |
|
Depreciation and amortization |
124,378 |
|
105,545 |
|
|
Write-down of goodwill and vessels |
54,653 |
|
50,600 |
|
|
Unrealized foreign currency exchange (gain) loss including the
effect of the termination of cross-currency swaps |
(7,525 |
) |
23,153 |
|
|
Equity income, net of dividends received of $14,421 (2017 -
$42,692) |
(39,125 |
) |
32,903 |
|
|
Ineffective portion on qualifying cash flow hedging instruments
included in interest expense |
(740 |
) |
740 |
|
|
Other non-cash items |
(1,035 |
) |
(5,616 |
) |
| Change in operating
assets and liabilities |
19,218 |
|
(2,396 |
) |
| Expenditures for dry
docking |
(15,368 |
) |
(21,642 |
) |
|
Net operating cash flow |
131,198 |
|
218,750 |
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance
of long-term debt |
1,135,304 |
|
362,527 |
|
| Scheduled repayments of
long-term debt and settlement of related swaps |
(506,437 |
) |
(194,237 |
) |
| Prepayments of
long-term debt |
(465,122 |
) |
(236,474 |
) |
| Debt issuance
costs |
(11,932 |
) |
(8,361 |
) |
| Proceeds from financing
related to sales and leaseback of vessels |
370,050 |
|
656,935 |
|
| Scheduled repayments of
obligations related to capital leases |
(59,722 |
) |
(42,000 |
) |
| Proceeds from equity
offerings, net of offering costs |
— |
|
164,411 |
|
| Repurchase of common
units |
(3,786 |
) |
— |
|
| Decrease in restricted
cash |
(70,345 |
) |
(56,650 |
) |
| Dividends paid to
non-controlling interest |
(2,925 |
) |
(1,595 |
) |
| Other
non-cash items |
— |
|
(605 |
) |
|
Net financing cash flow |
385,085 |
|
643,951 |
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for
vessels and equipment |
(686,148 |
) |
(708,608 |
) |
| Capital contributions
and advances to equity-accounted joint ventures |
(40,544 |
) |
(183,874 |
) |
| Return of capital and
repayment of advances from equity-accounted joint ventures |
— |
|
92,320 |
|
| Proceeds from sale of
equity-accounted joint venture |
54,438 |
|
— |
|
| Receipts from direct
financing leases |
10,882 |
|
13,143 |
|
| Proceeds from sales of
vessels |
28,518 |
|
20,580 |
|
|
Net investing cash flow |
(632,854 |
) |
(766,439 |
) |
| (Decrease) increase in
cash, cash equivalents and restricted cash |
(116,571 |
) |
96,262 |
|
| Cash, cash equivalents
and restricted cash, beginning of the year |
339,435 |
|
243,173 |
|
|
Cash, cash equivalents and restricted cash, end of the
year |
222,864 |
|
339,435 |
|
Teekay LNG Partners L.P.Appendix A -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted Net Income(in thousands
of U.S. Dollars)
| |
Three Months Ended |
Year Ended |
| December 31, |
December 31, |
| 2018 |
2017 |
2018 |
2017 |
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Net income – GAAP
basis |
9,245 |
|
44,290 |
|
26,875 |
|
48,911 |
|
| Less: Net (income) loss
attributable to non-controlling interests |
(2,666 |
) |
(4,413 |
) |
1,494 |
|
(14,946 |
) |
|
Net income attributable to the partners andpreferred
unitholders |
6,579 |
|
39,877 |
|
28,369 |
|
33,965 |
|
| Add (subtract) specific
items affecting net income: |
|
|
|
|
|
Write-down of goodwill and vessels(1) |
790 |
|
— |
|
54,653 |
|
50,600 |
|
|
Restructuring charges(2) |
— |
|
— |
|
1,845 |
|
— |
|
|
Unrealized foreign currency exchange losses (gains)(3) |
5,604 |
|
58 |
|
(8,717 |
) |
17,493 |
|
|
Unrealized losses (gains) on non-designated and designated
derivative instruments and other items from equity–accounted
investees(4) |
9,748 |
|
1,853 |
|
(14,728 |
) |
3,760 |
|
|
Unrealized losses (gains) on non-designated derivative
instruments(5) |
8,068 |
|
(7,926 |
) |
(30,133 |
) |
(13,448 |
) |
| Realized
loss on interest rate swap termination |
— |
|
— |
|
13,681 |
|
— |
|
| Other
items(6) |
2,447 |
|
(941 |
) |
56,431 |
|
424 |
|
|
Non-controlling interests’ share of items above(7) |
(600 |
) |
1,051 |
|
(13,698 |
) |
1,056 |
|
|
Total adjustments |
26,057 |
|
(5,905 |
) |
59,334 |
|
59,885 |
|
|
Adjusted net income attributable to the partnersand
preferred unitholders |
32,636 |
|
33,972 |
|
87,703 |
|
93,850 |
|
|
|
|
|
|
|
| Preferred unitholders'
interest in adjusted net income |
6,425 |
|
5,541 |
|
25,701 |
|
13,979 |
|
| General partner's
interest in adjusted net income |
524 |
|
569 |
|
1,240 |
|
1,597 |
|
| Limited partners’
interest in adjusted net income |
25,687 |
|
27,862 |
|
60,762 |
|
78,274 |
|
| Limited partners’
interest in adjusted net income percommon unit, basic |
0.32 |
|
0.35 |
|
0.76 |
|
0.98 |
|
| Weighted-average number
of common unitsoutstanding, basic |
79,676,541 |
|
79,626,819 |
|
79,672,435 |
|
79,617,778 |
|
| (1) |
|
|
See Note 2 to the
Consolidated Statements of Income included in this release for
further details. |
| |
|
|
|
| (2) |
|
|
See Note 3 to the
Consolidated Statements of Income included in this release for
further details. |
| |
|
|
|
| (3) |
|
|
Unrealized foreign currency exchange losses (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 (gains) losses 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 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 and any ineffectiveness for derivative
instruments designated as hedges for accounting purposes within the
Partnership’s equity-accounted investments. See Note 4 to the
Consolidated Statements of Income 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 included in this release for further details. |
| |
|
|
|
| (6) |
|
|
Included
in other items for the year ended December 31, 2018 is the
additional tax indemnification guarantee liability of $53 million,
as described in Note 7 to the Consolidated Statements of Income
included in this release. |
| |
|
|
|
| (7) |
|
|
Items
affecting net income include items from the Partnership’s
consolidated non-wholly-owned subsidiaries. The specific items
affecting net income 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 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 |
Year Ended |
| December 31, |
December 31, |
| 2018 |
2017 |
2018 |
2017 |
| (unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
|
|
|
| Net
income: |
9,245 |
|
44,290 |
|
26,875 |
|
48,911 |
|
| Add: |
|
|
|
|
| Depreciation and amortization |
33,079 |
|
27,651 |
|
124,378 |
|
105,545 |
|
| Partnership’s share of equity–accounted joint ventures'
DCF net of estimated maintenance capital expenditures(1) |
19,282 |
|
13,719 |
|
72,546 |
|
48,616 |
|
| Unrealized loss (gain) on non-designated derivative
instruments |
8,068 |
|
(7,926 |
) |
(30,133 |
) |
(13,448 |
) |
| Unrealized foreign currency exchange loss (gain) |
5,604 |
|
58 |
|
(8,717 |
) |
17,493 |
|
| Direct finance lease payments received in excess of
revenue recognized and other adjustments |
2,475 |
|
2,142 |
|
11,082 |
|
14,326 |
|
| Distributions relating to equity financing of
newbuildings |
1,962 |
|
3,844 |
|
9,012 |
|
8,676 |
|
| Write-down of goodwill and vessels |
790 |
|
— |
|
54,653 |
|
50,600 |
|
| Deferred income tax and other non-cash items |
363 |
|
(4,061 |
) |
2,561 |
|
(6,463 |
) |
| Additional tax indemnification guarantee liability |
— |
|
— |
|
53,000 |
|
— |
|
| Realized loss on interest rate swap termination |
— |
|
— |
|
13,681 |
|
— |
|
| Less: |
|
|
|
|
| Equity income |
(949 |
) |
(2,992 |
) |
(53,546 |
) |
(9,789 |
) |
| Distributions relating to preferred units |
(6,425 |
) |
(5,541 |
) |
(25,701 |
) |
(13,979 |
) |
| Estimated maintenance capital expenditures |
(16,794 |
) |
(14,265 |
) |
(64,186 |
) |
(53,315 |
) |
| Ineffective portion on qualifying cash flow hedging
instruments included in interest expense |
— |
|
(15 |
) |
(740 |
) |
740 |
|
| Portion of additional tax indemnification
guarantee liability previously recognized in DCF |
— |
|
— |
|
(3,849 |
) |
— |
|
|
Distributable Cash Flow before Non-controlling interest |
56,700 |
|
56,904 |
|
180,916 |
|
197,913 |
|
| Non-controlling interests’ share of DCF before
estimated maintenance capital expenditures |
(5,489 |
) |
(4,850 |
) |
(22,034 |
) |
(21,785 |
) |
|
Distributable Cash Flow |
51,211 |
|
52,054 |
|
158,882 |
|
176,128 |
|
| Amount of cash distributions attributable to the
generalpartner |
(227 |
) |
(226 |
) |
(911 |
) |
(909 |
) |
|
Limited partners' Distributable Cash Flow |
50,984 |
|
51,828 |
|
157,971 |
|
175,219 |
|
| Weighted-average number of common unitsoutstanding |
79,676,541 |
|
79,626,819 |
|
79,672,435 |
|
79,617,778 |
|
| Distributable Cash Flow per limited
partnercommon unit |
0.64 |
|
0.65 |
|
1.98 |
|
2.20 |
|
| (1) |
|
|
The
estimated maintenance capital expenditures relating to the
Partnership’s share of equity-accounted joint ventures were $10.3
million and $8.4 million for the three months ended December 31,
2018 and 2017, and $36.4 million and $32.5 million for the years
ended for December 31, 2018 and 2017, respectively. |
| |
|
|
|
Teekay LNG Partners L.P.Appendix C -
Supplemental Segment Information(in thousands of U.S.
Dollars)
|
|
Three Months Ended December 31,
2018 |
|
|
(unaudited) |
|
|
LiquefiedNatural GasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
| Voyage revenues |
135,777 |
|
7,253 |
|
6,775 |
|
149,805 |
|
| Voyage expenses |
(1,099 |
) |
(4,574 |
) |
(856 |
) |
(6,529 |
) |
| Vessel operating
expenses |
(22,859 |
) |
(4,863 |
) |
(2,732 |
) |
(30,454 |
) |
| Time-charter hire
expense |
(5,980 |
) |
— |
|
— |
|
(5,980 |
) |
| Depreciation and
amortization |
(30,121 |
) |
(1,796 |
) |
(1,162 |
) |
(33,079 |
) |
| General and
administrative expenses |
(6,794 |
) |
(597 |
) |
(418 |
) |
(7,809 |
) |
|
Write-down of goodwill |
— |
|
(790 |
) |
— |
|
(790 |
) |
| Income
(loss) from vessel operations |
68,924 |
|
(5,367 |
) |
1,607 |
|
65,164 |
|
| |
|
|
|
|
|
|
Three Months Ended December 31,
2017 |
|
|
(unaudited) |
|
|
LiquefiedNatural GasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
| Voyage revenues |
100,066 |
|
14,539 |
|
11,702 |
|
126,307 |
|
| Voyage expenses |
(138 |
) |
(1,218 |
) |
(2,947 |
) |
(4,303 |
) |
| Vessel operating
expenses |
(21,459 |
) |
(1,908 |
) |
(4,309 |
) |
(27,676 |
) |
| Depreciation and
amortization |
(23,269 |
) |
(2,117 |
) |
(2,265 |
) |
(27,651 |
) |
| General and
administrative expenses |
(3,624 |
) |
(477 |
) |
(198 |
) |
(4,299 |
) |
|
Income from vessel operations |
51,576 |
|
8,819 |
|
1,983 |
|
62,378 |
|
Teekay LNG Partners L.P.Appendix D -
Reconciliation of Non-GAAP Financial MeasuresCash
Flow from Vessel Operations from Consolidated Vessels(in
thousands of U.S. Dollars)
|
|
Three Months Ended December 31,
2018 |
Year EndedDecember 31,2018 |
|
|
(unaudited) |
(unaudited) |
|
|
LiquefiedNatural GasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
Total |
| Income (loss) from
vessel operations (See Appendix C) |
68,924 |
|
(5,367 |
) |
1,607 |
|
65,164 |
|
147,809 |
|
| Depreciation and
amortization |
30,121 |
|
1,796 |
|
1,162 |
|
33,079 |
|
124,378 |
|
| Write-down of goodwill
and vessels |
— |
|
790 |
|
— |
|
790 |
|
54,653 |
|
| Amortization of
in-process contracts included in voyage revenues |
(1,539 |
) |
— |
|
(2 |
) |
(1,541 |
) |
(5,756 |
) |
| Direct finance lease
payments received in excess of revenue recognized and other
adjustments |
2,475 |
|
— |
|
— |
|
2,475 |
|
11,082 |
|
| Realized
(loss) gain on Toledo Spirit derivative contract |
— |
|
— |
|
(668 |
) |
(668 |
) |
1,480 |
|
| Cash flow
from vessel operations from consolidated vessels |
99,981 |
|
(2,781 |
) |
2,099 |
|
99,299 |
|
333,646 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2017 |
Year EndedDecember 31,2017 |
|
|
(unaudited) |
(unaudited) |
|
|
LiquefiedNatural GasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
Total |
| Income from vessel
operations (See Appendix C) |
51,576 |
|
8,819 |
|
1,983 |
|
62,378 |
|
148,649 |
|
| Depreciation and
amortization |
23,269 |
|
2,117 |
|
2,265 |
|
27,651 |
|
105,545 |
|
| Write-down of
vessels |
— |
|
— |
|
— |
|
— |
|
50,600 |
|
| Amortization of
in-process contracts included in voyage revenues |
(1,256 |
) |
— |
|
(278 |
) |
(1,534 |
) |
(3,785 |
) |
| Direct finance lease
payments received in excess of revenue recognized and other
adjustments |
2,142 |
|
— |
|
— |
|
2,142 |
|
14,326 |
|
| Realized
gain on Toledo Spirit derivative contract |
— |
|
— |
|
152 |
|
152 |
|
678 |
|
| Cash flow
from vessel operations from consolidated vessels |
75,731 |
|
10,936 |
|
4,122 |
|
90,789 |
|
316,013 |
|
Teekay LNG Partners L.P.Appendix E -
Reconciliation of Non-GAAP Financial MeasuresCash
Flow from Vessel Operations from Equity-Accounted
Vessels(in thousands of U.S. Dollars)
| |
Three Months Ended |
| |
December 31, 2018 |
December 31, 2017 |
|
|
(unaudited) |
(unaudited) |
| |
At |
Partnership's |
At |
Partnership's |
| 100% |
Portion(1) |
100% |
Portion(1) |
| Voyage revenues |
176,177 |
|
75,886 |
|
129,526 |
|
57,493 |
|
| Voyage expenses |
(3,885 |
) |
(1,962 |
) |
(3,653 |
) |
(1,862 |
) |
| Vessel operating
expenses, time-charter hire expense and general and
administrative expenses |
(61,634 |
) |
(27,291 |
) |
(48,617 |
) |
(22,372 |
) |
| Depreciation and
amortization |
(30,471 |
) |
(14,643 |
) |
(27,950 |
) |
(13,984 |
) |
|
Write-down and loss on sales of vessels |
— |
|
— |
|
(11,000 |
) |
(5,500 |
) |
| Income from vessel
operations of equity-accounted vessels |
80,187 |
|
31,990 |
|
38,306 |
|
13,775 |
|
| Other items, including
interest expense, realized and unrealized gain (loss) on
derivative instruments |
(76,794 |
) |
(31,041 |
) |
(23,690 |
) |
(10,783 |
) |
|
Net income / equity income of equity-accounted vessels |
3,393 |
|
949 |
|
14,616 |
|
2,992 |
|
| Net income / equity
income of equity-accounted LNG vessels |
9,837 |
|
4,252 |
|
26,657 |
|
9,090 |
|
| Net loss
/ equity loss of equity-accounted LPG vessels |
(6,444 |
) |
(3,303 |
) |
(12,041 |
) |
(6,098 |
) |
| |
|
|
|
|
| Income from vessel
operations of equity-accounted vessels |
80,187 |
|
31,990 |
|
38,306 |
|
13,775 |
|
| Depreciation and
amortization |
30,471 |
|
14,643 |
|
27,950 |
|
13,984 |
|
| Write-down and loss on
sales of vessels |
— |
|
— |
|
11,000 |
|
5,500 |
|
| Direct finance lease
payments received in excess ofrevenue recognized and other
adjustments |
14,525 |
|
5,132 |
|
10,621 |
|
3,802 |
|
|
Amortization of in-process contracts |
(1,804 |
) |
(965 |
) |
(1,950 |
) |
(1,017 |
) |
| Cash flow
from vessel operations from equity-accounted vessels |
123,379 |
|
50,800 |
|
85,927 |
|
36,044 |
|
| Cash flow from vessel
operations from equity-accounted LNG vessels |
109,564 |
|
43,893 |
|
72,241 |
|
29,201 |
|
| Cash flow
from vessel operations from equity-accounted LPG vessels |
13,815 |
|
6,907 |
|
13,686 |
|
6,843 |
|
| |
Year Ended |
| |
December 31, 2018 |
December 31, 2017 |
| |
(unaudited) |
(unaudited) |
| |
At |
Partnership's |
At |
Partnership's |
| 100% |
Portion(1) |
100% |
Portion(1) |
| Voyage revenues |
612,857 |
|
266,388 |
|
478,908 |
|
213,574 |
|
| Voyage expenses |
(12,058 |
) |
(6,071 |
) |
(16,689 |
) |
(8,534 |
) |
| Vessel operating
expenses and general and administrative expenses |
(208,686 |
) |
(93,277 |
) |
(175,898 |
) |
(81,416 |
) |
| Depreciation and
amortization |
(107,116 |
) |
(52,883 |
) |
(109,135 |
) |
(54,453 |
) |
|
Write-down and loss on sales of vessels |
(514 |
) |
(257 |
) |
(11,000 |
) |
(5,500 |
) |
| Income from vessel
operations of equity-accounted vessels |
284,483 |
|
113,900 |
|
166,186 |
|
63,671 |
|
| Other items, including
interest expense and realized and unrealized gain (loss)
on derivative instruments |
(147,230 |
) |
(65,917 |
) |
(124,342 |
) |
(53,882 |
) |
| Gain on
sale of equity-accounted investment |
— |
|
5,563 |
|
— |
|
— |
|
| Net
income / equity income of equity- accounted vessels |
137,253 |
|
53,546 |
|
41,844 |
|
9,789 |
|
| Net income / equity
income of equity-accounted LNG vessels |
149,981 |
|
60,228 |
|
56,980 |
|
17,652 |
|
| Net loss
/ equity loss of equity- accounted LPG vessels |
(12,728 |
) |
(6,682 |
) |
(15,136 |
) |
(7,863 |
) |
| |
|
|
|
|
| Income from vessel
operations of equity- accounted vessels |
284,483 |
|
113,900 |
|
166,186 |
|
63,671 |
|
| Depreciation and
amortization |
107,116 |
|
52,883 |
|
109,135 |
|
54,453 |
|
| Write-down and loss on
sales of vessels |
514 |
|
257 |
|
11,000 |
|
5,500 |
|
| Direct finance lease
payments received in excess of revenue recognized |
51,329 |
|
18,453 |
|
39,368 |
|
14,220 |
|
|
Amortization of in-process contracts |
(7,242 |
) |
(3,847 |
) |
(8,327 |
) |
(4,307 |
) |
| Cash flow
from vessel operations from equity-accounted vessels |
436,200 |
|
181,646 |
|
317,362 |
|
133,537 |
|
| Cash flow from vessel
operations from equity-accounted LNG vessels |
382,514 |
|
154,803 |
|
263,998 |
|
106,854 |
|
| Cash flow
from vessel operations from equity-accounted LPG vessels |
53,686 |
|
26,843 |
|
53,364 |
|
26,683 |
|
| (1) |
|
|
The
Partnership's equity-accounted vessels for the three months and
year ended December 31, 2018 and 2017 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 December 31, 2018, compared to 23 owned and
in-chartered LPG carriers, including three LPG carrier
newbuildings, as at December 31, 2017; the Partnership’s
ownership interest ranging from 20 to 30 percent in three LNG
carriers and one LNG carrier newbuilding as at December 31,
2018 for Shell, compared to one LNG carrier and three LNG carrier
newbuildings as at December 31, 2017; 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
December 31, 2018, compared to six ARC7 LNG carrier
newbuildings as at December 31, 2017; 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. |
| |
|
|
|
Teekay LNG Partners L.P.Appendix F -
Summarized Financial Information of Equity-Accounted Joint
Ventures(in thousands of U.S. Dollars)
| |
As at December 31, 2018 |
As at December 31, 2017 |
| |
(unaudited) |
(unaudited) |
| |
At |
Partnership's |
At |
Partnership's |
| 100% |
Portion(1) |
100% |
Portion(1) |
| Cash and restricted
cash, current and non-current |
386,320 |
|
162,947 |
|
295,148 |
|
128,004 |
|
| Current portion of
derivative assets |
4,840 |
|
2,225 |
|
1,594 |
|
785 |
|
| Other current
assets |
88,924 |
|
32,429 |
|
53,068 |
|
22,661 |
|
| Vessels and equipment,
including vessels related to capitalleases and right of use
assets |
2,327,971 |
|
1,141,364 |
|
2,202,418 |
|
1,133,804 |
|
| Advances on newbuilding
contracts |
1,321,284 |
|
494,486 |
|
1,211,210 |
|
450,523 |
|
| Net investments in
direct financing leases, current and non-current |
3,089,375 |
|
1,163,980 |
|
2,013,759 |
|
722,408 |
|
| Derivative assets |
10,660 |
|
3,977 |
|
4,602 |
|
2,259 |
|
| Other
non-current assets |
50,625 |
|
37,690 |
|
86,167 |
|
54,060 |
|
| Total
assets |
7,279,999 |
|
3,039,098 |
|
5,867,966 |
|
2,514,504 |
|
| |
|
|
|
|
| Current portion of
long-term debt and obligations related to capital leases |
547,094 |
|
205,093 |
|
162,915 |
|
73,975 |
|
| Current portion of
derivative liabilities |
12,695 |
|
4,420 |
|
21,973 |
|
7,217 |
|
| Other current
liabilities |
127,266 |
|
53,874 |
|
98,657 |
|
43,193 |
|
| Long-term debt and
obligations related to capital leases |
3,939,801 |
|
1,601,877 |
|
3,023,713 |
|
1,231,433 |
|
| Shareholders' loans,
current and non-current |
367,475 |
|
131,386 |
|
368,937 |
|
131,685 |
|
| Derivative
liabilities |
61,814 |
|
23,149 |
|
73,454 |
|
24,235 |
|
| Other long-term
liabilities |
67,793 |
|
34,552 |
|
77,297 |
|
39,855 |
|
|
Equity |
2,156,061 |
|
984,747 |
|
2,041,020 |
|
962,911 |
|
| Total
liabilities and equity |
7,279,999 |
|
3,039,098 |
|
5,867,966 |
|
2,514,504 |
|
| |
|
|
|
|
| Investments in
equity-accounted joint ventures |
|
984,747 |
|
|
962,911 |
|
| Advances
to equity-accounted joint ventures |
|
131,386 |
|
|
131,685 |
|
|
Investments in and advances to equity-accounted jointventures,
current and non-current portions |
|
1,116,133 |
|
|
1,094,596 |
|
| (1) |
|
|
The
Partnership's equity-accounted vessels as at ended
December 31, 2018 and December 31, 2017 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 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 December 31,
2018, compared to 23 owned and in-chartered LPG carriers, including
three LPG carrier newbuildings, as at December 31, 2017; the
Partnership’s ownership interest ranging from 20 to 30 percent in
three LNG carriers and one LNG carrier newbuilding as at
December 31, 2018 for Shell, compared to one LNG carrier and
three LNG carrier newbuildings as at December 31, 2017; 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 December 31, 2018, compared to six ARC7
LNG carrier newbuildings as at December 31, 2017; 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: estimated guidance for 2019 for the
non-GAAP measures of adjusted net income attributable to partners
and preferred unitholders, limited partners' interest in adjusted
net income per common unit, cash flow from vessels operations from
consolidated vessels and total cash flow from vessel operations;
the expected timing of newbuilding vessel deliveries and completion
of the Bahrain regasification facility, and the commencement of
related contracts; the effects of future newbuilding deliveries and
commencement of operations at the regasification facility on the
Partnership’s 2019 operating results; future delevering of the
Partnership’s balance sheet; further potential repurchases under
the Partnership’s common unit repurchase program; and the timing
and amount of increases to quarterly distributions on the
Partnership’s common units. 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; 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 the size of the global LNG or LPG
fleets; 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;
changes in the number of the Partnership’s outstanding common
units; actual levels of quarterly distributions approved by the
general partner’s Board of Directors; the inability of charterers
to make future charter payments; the inability of the Partnership
to renew or replace long-term contracts on existing vessels,
including new charters at higher rates; allocations of cash to
repay indebtedness or to repurchase common units; the trading price
of the Partnership’s common units; the Partnership’s or the
Partnership’s joint ventures’ ability to secure or draw on
financings for its vessels; 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, 2017.
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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