Teekay LNG Partners Reports Fourth Quarter and Annual Results
HAMILTON, BERMUDA--(Marketwired - Feb 20, 2014) - Teekay GP
L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay
LNG or the Partnership) (NYSE:TGP) -
Highlights
- Generated distributable cash flow of $63.4 million in the
fourth quarter of 2013, an increase of 18 percent from the fourth
quarter of 2012.
- Declared fourth quarter 2013 cash distribution of $0.6918 per
unit, an increase of 2.5 percent from the previous quarter.
- In November 2013, acquired and bareboat chartered-back a second
LNG carrier newbuilding with Awilco LNG.
- In November 2013, exercised an option for one additional MEGI
LNG carrier newbuilding to be delivered in 2017.
- Total liquidity of approximately $332 million as at December
31, 2013.
Teekay GP L.L.C., the general partner of Teekay LNG Partners
L.P. (Teekay LNG or the Partnership) (NYSE:TGP),
today reported the Partnership's results for the quarter ended
December 31, 2013. During the fourth quarter of 2013, the
Partnership generated distributable cash flow(1) of $63.4 million,
compared to $53.6 million in the same quarter of the previous year.
The increase in distributable cash flow was primarily due to the
Partnership's acquisition of a 50 percent interest in Exmar LPG
BVBA, a liquefied petroleum gas (LPG) carrier joint
venture with Exmar N.V. (Exmar), in February 2013 and its
acquisition and charter-back of two liquefied natural gas
(LNG) carriers from Awilco LNG ASA (Awilco) in
September and November 2013. The increase was partially offset by
reduced cash flow following the sale of the Tenerife
Spirit conventional tanker in December 2013.
On January 15, 2014, the Partnership declared a cash
distribution of $0.6918 per unit for the quarter ended December 31,
2013, an increase of $0.0168 per unit, or 2.5 percent, from the
previous quarter. The cash distribution was paid on February 14,
2014 to all unitholders of record on January 31, 2014.
"Teekay LNG continued on its course of steady growth in 2013
with the accretive acquisition-charterback transactions with Awilco
LNG, which enabled us to increase the Partnership's fourth quarter
distribution by 2.5 percent to $0.6918 per unit," commented Peter
Evensen, Chief Executive Officer of Teekay GP LLC. "Looking ahead,
in addition to the two MEGI LNG carrier newbuildings chartered to
Cheniere starting in 2016, we expect the Partnership's three
currently unchartered MEGI LNG carrier newbuildings delivering in
2017 will be well-positioned to take advantage of the anticipated
strong LNG shipping fundamentals relating to the expected start-up
of several new LNG liquefaction projects beginning in 2016," Mr.
Evensen continued. "In addition to securing employment for these
three unchartered newbuildings, the Partnership is also engaged in
LNG shipping and floating regasification project tender
opportunities with expected start-up dates in the same
timeframe."
Mr. Evensen added, "With 100 percent of Teekay LNG's
on-the-water LNG carrier fleet operating under fixed-rate contracts
with an average remaining duration of 12 years, the Partnership is
largely insulated from the recent declines in spot LNG shipping
rates. Over the next three years, only two of Teekay LNG's LNG
carriers, both of which are 52-percent owned, are scheduled to
roll-off their existing contracts, limiting the Partnership's
exposure to any short-term rate volatility through 2016."
(1) |
Distributable cash flow is a non-GAAP financial measure used by
certain investors to measure the financial performance of the
Partnership and other master limited partnerships. Please see
Appendix B for a reconciliation of this non-GAAP measure
to the most directly comparable financial measure under United
States generally accepted accounting principles
(GAAP). |
Recent
Transactions
Exercised Option for an Additional LNG Carrier Newbuilding
In November 2013, Teekay LNG exercised an option with Daewoo
Shipbuilding & Marine Engineering Co., Ltd. (DSME) of
South Korea for one additional 173,400 cubic meter (cbm)
LNG carrier newbuilding. This vessel will be equipped with the
M-type, Electronically Controlled, Gas Injection (MEGI)
twin engines, which are expected to be significantly more
fuel-efficient and have lower emission levels than other engines
currently being utilized in LNG shipping. The Partnership intends
to secure long-term charter contract employment for the vessel
prior to its delivery in 2017. In connection with exercising the
option in November 2013, the Partnership was also able to delay the
delivery dates for the two 173,400 cbm LNG carrier newbuildings
ordered in July 2013 from 2016 to 2017 to better coincide with the
expected timing of new LNG shipping projects. Currently, the
Partnership has options with DSME for up to three additional LNG
carrier newbuildings.
Acquisition and Bareboat Charter-Back of Second LNG Carrier
Newbuilding
In September 2013, Teekay LNG agreed to acquire a second 155,900
cbm LNG carrier newbuilding from Awilco on similar terms as the
first vessel. The second vessel was delivered to the Partnership in
late-November 2013 and bareboat-chartered to Awilco on a four-year
fixed-rate charter contract (plus a one-year extension option) with
a fixed-price purchase obligation at the end of the initial term
(and option period). Similar to the first Awilco vessel, the second
vessel's purchase price was $205 million less a $50 million upfront
prepayment of charter hire by Awilco, which is in addition to the
daily bareboat charter rate.
Exmar LPG Joint Venture Secured Long-term Contracts
In late January 2014, Exmar LPG BVBA, the Partnership's LPG
joint venture with Exmar NV, was awarded two five-year fixed-rate
time-charter contracts, up to a maximum of 10 years, with Statoil
ASA. The contracts are expected to be serviced by two LPG carrier
newbuildings currently under construction at Hanjin Heavy
Industries and Construction Co., Ltd., which are scheduled for
delivery in 2016.
Also in late January 2014, Exmar LPG BVBA was awarded two
10-year fixed-rate time-charter contracts with Potash Corporation.
The contracts will be serviced by two of Exmar LPG BVBA's existing
on-the-water LPG carriers.
Financial
Summary
The Partnership reported adjusted net income attributable to the
partners(1) (as detailed in Appendix A to this release) of
$46.2 million for the quarter ended December 31, 2013, compared to
$38.5 million for the same period of the prior year. Adjusted net
income attributable to the partners excludes a number of specific
items that had the net effect of increasing net income by $1.3
million and decreasing net income by $10.3 million for the three
months ended December 31, 2013 and 2012, respectively, as detailed
in Appendix A. Including these items, the
Partnership reported net income attributable to the partners, on a
GAAP basis, of $47.5 million and $28.2 million for the three months
ended December 31, 2013 and 2012, respectively. Adjusted net income
attributable to the partners for the three months ended December
31, 2013 increased from the same period in the prior year, mainly
due to the acquisitions of the two LNG carriers from Awilco and the
acquisition of the Partnership's 50 percent interest in Exmar LPG
BVBA in February 2013.
For the year ended December 31, 2013, the Partnership reported
adjusted net income attributable to the partners(1) (as detailed in
Appendix A to this release) of $175.0 million, compared to
$156.3 million for the prior year. Adjusted net income attributable
to the partners excludes a number of specific items that had the
net effect of increasing net income by $26.2 million and decreasing
net income by $32.6 million for the year ended December 31, 2013
and 2012, respectively, as detailed in Appendix A.
Including these items, the Partnership reported net income
attributable to the partners, on a GAAP basis, of $201.2 million
and $123.7 million for the year ended December 31, 2013 and 2012,
respectively. Adjusted net income attributable to the partners for
the year ended December 31, 2013 increased from the same period in
the prior year, mainly due to the acquisitions of the two LNG
carriers from Awilco, the acquisition of the Partnership's 50
percent interest in Exmar LPG BVBA in February 2013 and the
acquisition of the Partnership's 52 percent interest in six LNG
carriers from A.P. Moller-Maersk A/S in February 2012.
For accounting purposes, the Partnership is required to
recognize the changes in the fair value of its outstanding
derivative instruments that are not designated as hedges for
accounting purposes in net income. This method of accounting does
not affect the Partnership's cash flows or the calculation of
distributable cash flow, but results in the recognition of
unrealized gains or losses on the consolidated statements of income
as detailed in notes 5, 6 and 7 to the Summary Consolidated
Statements of Income and Comprehensive Income included in this
release.
(1) |
Adjusted net income attributable to the partners is a non-GAAP
financial measure. Please refer to Appendix A to this
release for a reconciliation of this non-GAAP measure to the most
directly comparable financial measure under GAAP and information
about specific items affecting net income which are typically
excluded by securities analysts in their published estimates of the
Partnership's financial results. |
Operating
Results
The following table highlights certain financial information for
Teekay LNG's two segments: the Liquefied Gas segment and the
Conventional Tanker segment (please refer to the "Teekay LNG's
Fleet" section of this release below and Appendices C
through F for further details).
|
Three Months
Ended December 31, 2013 (unaudited) |
Three Months
Ended December 31, 2012 (unaudited) |
(in thousands of U.S. Dollars) |
Liquefied Gas Segment |
Conven-tional Tanker Segment |
Total |
Liquefied Gas Segment |
Conven-tional Tanker Segment |
Total |
Net voyage revenues(i) |
77,166 |
26,823 |
103,989 |
70,545 |
27,364 |
97,909 |
Vessel operating expenses |
14,106 |
11,058 |
25,164 |
13,846 |
11,924 |
25,770 |
Depreciation and amortization |
17,916 |
6,229 |
24,145 |
17,359 |
8,868 |
26,227 |
CFVO from consolidated vessels(ii) |
63,246 |
10,964 |
74,210 |
54,285 |
13,069 |
67,354 |
CFVO from equity accounted vessels(iii) |
52,626 |
- |
52,626 |
38,498 |
- |
38,498 |
Total CFVO(ii) |
115,872 |
10,964 |
126,836 |
92,783 |
13,069 |
105,852 |
|
|
(i) |
Net
voyage revenues represents voyage revenues less voyage expenses,
which comprise all expenses relating to certain voyages, including
bunker fuel expenses, port fees, canal tolls and brokerage
commissions. Net voyage revenues is a non-GAAP financial measure
used by certain investors to measure the financial performance of
shipping companies. Please see Appendix C for a
reconciliation of this non-GAAP measure as used in this release to
the most directly comparable GAAP financial measure. |
(ii) |
Cash
flow from vessel operations (CFVO) from consolidated
vessels represents income from vessel operations before (a)
depreciation and amortization expense, (b) amortization of
in-process revenue contracts, (c) loan loss recovery, (d) write
down of vessels, and includes (e) adjustments for direct financing
leases and on two Suezmax tankers to a cash basis. CFVO is included
because certain investors use this data to measure a company's
financial performance. CFVO is not required by GAAP and should not
be considered as an alternative to net income, equity income or any
other indicator of the Partnership's performance required by GAAP.
Please see Appendix E for a reconciliation of CFVO from
consolidated vessels (a non-GAAP measure) as used in this release
to the most directly comparable GAAP financial measure. |
(iii) |
The
Partnership's equity accounted investments for the three months
ended December 31, 2013 and 2012 include the Partnership's 40
percent interest in Teekay Nakilat (III) Corporation, which owns
four LNG carriers; the Partnership's 50 percent interest in the
Excalibur and Excelsior joint ventures with Exmar, which own one
LNG carrier and one regasification unit, respectively; the
Partnership's 33 percent interest in four LNG carriers servicing
the Angola LNG Project; and the Partnership's 52 percent interest
in Malt LNG Netherlands Holdings B.V., the joint venture between
the Partnership and Marubeni Corporation, which owns six LNG
carriers (Malt LNG Carriers). The Partnership's equity
accounted investments for the three months ended December 31, 2013
also includes the Partnership's 50 percent interest in Exmar LPG
BVBA, the joint venture between the Partnership and Exmar, acquired
in February 2013, which currently owns and charters-in 28 vessels
in the LPG carrier segment, including 12 newbuildings. Please see
Appendix F for a description and reconciliation of CFVO
from equity accounted vessels (a non-GAAP measure) as used in this
release to the most directly comparable GAAP financial
measure. |
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership's
Liquefied Gas segment, excluding equity accounted vessels,
increased to $63.2 million in the fourth quarter of 2013 from $54.3
million in the same quarter of the prior year. The increase is
primarily the result of the acquisition of the two LNG carriers
from Awilco in September and November 2013.
Cash flow from vessel operations from the Partnership's equity
accounted vessels in the Liquefied Gas segment increased to $52.6
million in the fourth quarter of 2013 from $38.5 million in the
same quarter of the prior year. This increase was primarily due to
the acquisition of a 50 percent interest in the Exmar LPG BVBA
joint venture in February 2013 and an increase in the revenue
relating to one of the Malt LNG Carriers, which commenced a new
three-year charter contract at a higher rate during the third
quarter of 2013.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's
Conventional Tanker segment decreased to $11.0 million in the
fourth quarter of 2013 from $13.1 million in the same quarter of
the prior year, primarily due to the sale of the Tenerife
Spirit in mid-December 2013 and the scheduled dry docking of
two Suezmax tankers which resulted in 48 days of off-hire in the
fourth quarter of 2013. This decrease was partially offset by an
increase in the tanker rates for two of the Partnership's Suezmax
tankers in the fourth quarter of 2013.
Teekay LNG's
Fleet
The following table summarizes the Partnership's fleet as of
February 1, 2014:
|
Number of Vessels |
|
Owned Vessels |
In-Chartered Vessels |
Newbuildings |
Total |
LNG Carrier Fleet |
29 (i) |
- |
5 |
34 |
LPG/Multigas Carrier Fleet |
16 (ii) |
5
(iii) |
12 (iii) |
33 |
Conventional Tanker Fleet |
10 |
- |
- |
10 |
Total |
55 |
5 |
17 |
77 |
(i) |
The
Partnership's ownership interests in these vessels range from 33
percent to 100 percent. |
(ii) |
The
Partnership's ownership interests in these vessels range from 50
percent to 99 percent. |
(iii) |
The
Partnership's interest in these vessels is 50 percent. |
Liquidity and
Continuous Offering Program Update
In May 2013, the Partnership implemented a continuous offering
program (COP) under which the Partnership may issue new
common units, representing limited partner interests, at market
prices up to a maximum aggregate amount of $100 million. Through to
December 31, 2013, the Partnership had sold an aggregate of 124,071
common units under the COP, generating net proceeds of
approximately $4.9 million (including the Teekay LNG general
partner's 2 percent proportionate capital contribution and net of
offering costs). The Partnership did not sell any units under the
COP during the fourth quarter of 2013.
As of December 31, 2013, the Partnership had total liquidity of
$332.2 million (comprised of $139.5 million in cash and cash
equivalents and $192.7 million in undrawn credit facilities).
Conference
Call
The Partnership plans to host a conference call on Friday,
February 21, 2014 at 11:00 a.m. (ET) to discuss the results for the
fourth quarter and fiscal year of 2013. All unitholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (866) 322-2356 or (416) 640-3405, if outside North
America, and quoting conference ID code 2916125.
- By accessing the webcast, which will be available on Teekay
LNG's website at www.teekaylng.com (the archive will remain on the
web site for a period of 30 days).
A supporting Fourth Quarter and Fiscal Year 2013 Earnings
Presentation will also be available at www.teekaylng.com in advance
of the conference call start time.
The conference call will be recorded and made available until
Friday, February 28, 2014. This recording can be accessed following
the live call by dialing (888) 203-1112 or (647) 436-0148, if
outside North America, and entering access code 2916125.
About Teekay LNG
Partners L.P.
Teekay LNG Partners is the world's second largest independent
owner and operator of LNG carriers, providing LNG, LPG and crude
oil marine transportation services primarily under long-term,
fixed-rate charter contracts through its interests in 34 LNG
carriers (including one LNG regasification unit and five
newbuildings), 33 LPG/Multigas carriers (including five
chartered-in LPG carriers and 12 newbuildings) and 10 conventional
tankers. The Partnership's interests in these vessels range from 33
to 100 percent. Teekay LNG Partners L.P. is a publicly-traded
master limited partnership (MLP) 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 trade on the New York Stock
Exchange under the symbol "TGP".
|
TEEKAY LNG PARTNERS L.P. |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(in thousands of U.S. Dollars, except units outstanding) |
|
|
|
Three Months
Ended |
|
Year
Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
2013 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
VOYAGE REVENUES |
|
104,858 |
|
100,692 |
|
98,236 |
|
399,276 |
|
392,900 |
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
869 |
|
373 |
|
327 |
|
2,857 |
|
1,772 |
Vessel operating expenses(1) |
|
25,164 |
|
24,655 |
|
25,770 |
|
99,949 |
|
94,536 |
Depreciation and amortization |
|
24,145 |
|
24,440 |
|
26,227 |
|
97,884 |
|
100,474 |
General and administrative (1) |
|
5,438 |
|
4,793 |
|
5,223 |
|
20,444 |
|
18,960 |
Loan loss (recovery) provision(2) |
|
(3,804) |
|
3,804 |
|
- |
|
- |
|
- |
Restructuring charge(3) |
|
1,786 |
|
- |
|
- |
|
1,786 |
|
- |
Write down of vessels(4) |
|
- |
|
- |
|
29,367 |
|
- |
|
29,367 |
Total operating expenses |
|
53,598 |
|
58,065 |
|
86,914 |
|
222,920 |
|
245,109 |
Income from vessel operations |
|
51,260 |
|
42,627 |
|
11,322 |
|
176,356 |
|
147,791 |
OTHER ITEMS |
|
|
|
|
|
|
|
|
|
|
Equity income(5) |
|
28,602 |
|
28,831 |
|
29,634 |
|
123,282 |
|
78,866 |
Interest expense |
|
(15,775) |
|
(13,548) |
|
(13,265) |
|
(55,703) |
|
(54,211) |
Interest income |
|
1,019 |
|
656 |
|
771 |
|
2,972 |
|
3,502 |
Realized and unrealized (loss) gain on derivative
instruments(6) |
|
(5,238) |
|
(11,143) |
|
14,373 |
|
(14,000) |
|
(29,620) |
Foreign exchange loss(7) |
|
(5,188) |
|
(16,068) |
|
(6,255) |
|
(15,832) |
|
(8,244) |
Other income - net |
|
214 |
|
306 |
|
615 |
|
1,396 |
|
1,683 |
|
|
3,634 |
|
(10,966) |
|
25,873 |
|
42,115 |
|
(8,024) |
Net income before tax expense |
|
54,894 |
|
31,661 |
|
37,195 |
|
218,471 |
|
139,767 |
Income tax expense |
|
(2,722) |
|
(791) |
|
(75) |
|
(5,156) |
|
(625) |
Net income |
|
52,172 |
|
30,870 |
|
37,120 |
|
213,315 |
|
139,142 |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
Unrealized net gain (loss) on qualifying cash flow hedging
instruments in equity accounted joint ventures |
|
1,680 |
|
(1,549) |
|
- |
|
131 |
|
- |
Other comprehensive income (loss): |
|
1,680 |
|
(1,549) |
|
- |
|
131 |
|
- |
Comprehensive income |
|
53,852 |
|
29,321 |
|
37,120 |
|
213,446 |
|
139,142 |
Non-controlling interest in net income |
|
4,644 |
|
1,262 |
|
8,895 |
|
12,073 |
|
15,437 |
General Partner's interest in net income |
|
7,338 |
|
5,784 |
|
5,440 |
|
25,365 |
|
21,303 |
Limited partners' interest in net income |
|
40,190 |
|
23,824 |
|
22,785 |
|
175,877 |
|
102,402 |
Weighted-average number of common units outstanding: |
|
|
|
|
|
|
|
|
|
|
•
Basic |
|
73,971,294 |
|
70,451,950 |
|
69,683,763 |
|
70,965,496 |
|
66,328,496 |
•
Diluted |
|
73,995,463 |
|
70,474,732 |
|
69,683,763 |
|
70,996,869 |
|
66,328,496 |
Total number of units outstanding at end of period |
|
74,196,294 |
|
70,746,294 |
|
69,683,763 |
|
74,196,294 |
|
69,683,763 |
|
|
(1) |
To
more closely align the Partnership's Statement of Income and
Comprehensive Income presentation to many of its peers, the cost of
ship management services of $2.0 million and $7.8 million for the
three months and year ended December 31, 2013, respectively, and
$2.0 million for the three months ended September 30, 2013, have
been included as vessel operating expenses. Prior to 2013, the
Partnership included these amounts in general and administrative
expenses. All such costs incurred in comparative periods have been
reclassified from general and administrative expenses to vessel
operating expenses to conform to the presentation adopted in the
current period. The amounts reclassified were $2.1 million and $8.2
million for the three months and year ended December 31, 2012,
respectively. |
(2) |
In
early-2012, Teekay BLT Corporation (Teekay Tangguh Joint
Venture), in which the Partnership has a 69 percent ownership
interest, advanced amounts to P.T. Berlian Laju Tanker, the parent
company of the non-controlling shareholder of the Teekay Tangguh
Joint Venture, as an advance of dividends. In July 2012, P.T.
Berlian Laju Tanker entered into a court-supervised restructuring
in Indonesia in order to restructure its debts. In September 2013,
the Teekay Tangguh Joint Venture recorded a $3.8 million loan loss
provision relating to the advances to P.T. Berlian Laju Tanker, as
it was probable, at that time, that the carrying value of the loan
was impaired. However, during the fourth quarter of 2013, as P.T.
Berlian Laju Tanker had sufficiently restructured its business, the
Teekay Tangguh Joint Venture reassessed the probability of
collectability of this advance and reversed the loan loss provision
previously recorded in September 2013. On February 1, 2014, the
Teekay Tangguh Joint Venture declared dividends of $69.5 million of
which $14.4 million was used to offset the total advances to its
non-controlling shareholder and P.T. Berlian Laju Tanker. |
(3) |
Restructuring charge primarily relates to seafarer severance
payments upon sale of two conventional tankers under capital
lease. |
(4) |
The
carrying value of three of the Partnership's conventional Suezmax
tankers (the Tenerife Spirit, Algeciras Spirit and Huelva
Spirit) was written down during the three months and year
ended December 31, 2012 due to the expected termination of their
time-charter contracts in 2013 and 2014. The estimated fair value
was based on a discounted cash flow approach and such estimates of
cash flows were based on existing time-charter contracts, lease
obligations and budgeted operating costs. |
(5) |
Equity income includes unrealized gains on derivative instruments
and any ineffectiveness for any derivative instruments designated
as hedges for accounting purposes as detailed in the table
below: |
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2013 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
Equity income |
|
28,602 |
|
28,831 |
|
29,634 |
|
123,282 |
|
78,866 |
Proportionate share of unrealized gains on derivative
instruments |
|
(5,798) |
|
(1,900) |
|
(9,599) |
|
(26,432) |
|
(5,548) |
Proportionate share of ineffective portion of hedge accounted
interest rate swap |
|
514 |
|
- |
|
- |
|
514 |
|
- |
Equity income excluding unrealized gains on derivative instruments
and ineffective portion of hedge accounted interest rate swap |
|
23,318 |
|
26,931 |
|
20,035 |
|
97,364 |
|
73,318 |
|
|
(6) |
The
realized losses relate to the amounts the Partnership actually paid
to settle derivative instruments and the unrealized (losses) gains
relate to the change in fair value of such derivative instruments
as detailed in the table below: |
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
2013 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
Realized (losses) gains relating to: |
|
|
|
|
|
|
|
|
|
|
Interest rate swaps |
|
(9,535) |
|
(9,532) |
|
(9,614) |
|
(38,089) |
|
(37,427) |
Toledo Spirit time-charter derivative contract |
|
641 |
|
903 |
|
945 |
|
1,521 |
|
907 |
|
|
(8,894) |
|
(8,629) |
|
(8,669) |
|
(36,568) |
|
(36,520) |
Unrealized gains (losses) relating to: |
|
|
|
|
|
|
|
|
|
|
Interest rate swaps |
|
2,556 |
|
(2,314) |
|
21,442 |
|
18,868 |
|
5,200 |
Toledo Spirit time-charter derivative contract |
|
1,100 |
|
(200) |
|
1,600 |
|
3,700 |
|
1,700 |
|
|
3,656 |
|
(2,514) |
|
23,042 |
|
22,568 |
|
6,900 |
Total realized and unrealized (losses) gains on derivative
instruments |
|
(5,238) |
|
(11,143) |
|
14,373 |
|
(14,000) |
|
(29,620) |
|
|
(7) |
For
accounting purposes, the Partnership is required to revalue all
foreign currency-denominated monetary assets and liabilities based
on the prevailing exchange rate 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 and comprehensive
income. |
|
|
|
Foreign exchange loss includes realized (losses) gains relating to
the amounts the Partnership received (paid) to settle the
Partnership's non-designated cross currency swap that was entered
into as an economic hedge in relation to the Partnership's
Norwegian Kroner (NOK)-denominated unsecured bonds. The
Partnership issued NOK 700 million and NOK 900 million of unsecured
bonds in May 2012 and September 2013 that mature in 2017 and 2018,
respectively. Foreign exchange loss also includes unrealized
(losses) gains relating to the change in fair value of such
derivative instruments, partially offset by unrealized gains
(losses) 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, |
2013 |
|
2013 |
|
2012 |
|
2013 |
|
2012 |
Realized (losses) gains on cross-currency swaps |
|
(216) |
|
(113) |
|
102 |
|
(338) |
|
257 |
Unrealized (losses) gains on cross-currency swaps |
|
(2,832) |
|
(3,650) |
|
4,516 |
|
(15,404) |
|
(2,677) |
Unrealized gains (losses) on revaluation of NOK bonds |
|
2,512 |
|
(723) |
|
(3,523) |
|
12,257 |
|
(791) |
|
TEEKAY LNG PARTNERS L.P. |
CONSOLIDATED BALANCE SHEETS |
(in thousands of U.S. Dollars) |
|
|
|
As at December 31,
2013 |
|
As at September 30,
2013 |
|
As at December 31,
2012 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
ASSETS |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash and cash equivalents |
|
139,481 |
|
118,131 |
|
113,577 |
Restricted cash - current |
|
- |
|
2,996 |
|
34,160 |
Accounts receivable |
|
19,844 |
|
19,869 |
|
13,408 |
Prepaid expenses |
|
5,756 |
|
7,720 |
|
5,836 |
Current portion of derivative assets |
|
18,444 |
|
18,449 |
|
17,212 |
Current portion of net investments in direct financing leases |
|
16,441 |
|
11,747 |
|
6,656 |
Current portion of advances to joint venture partner |
|
14,364 |
|
- |
|
- |
Advances to affiliates |
|
6,634 |
|
3,798 |
|
13,864 |
Total current assets |
|
220,964 |
|
182,710 |
|
204,713 |
Restricted cash - long-term |
|
497,298 |
|
496,351 |
|
494,429 |
Vessels and equipment |
|
|
|
|
|
|
At
cost, less accumulated depreciation |
|
1,253,763 |
|
1,260,588 |
|
1,286,957 |
Vessels under capital leases, at cost, less accumulated
depreciation |
|
571,692 |
|
607,026 |
|
624,059 |
Advances on newbuilding contracts |
|
97,207 |
|
77,854 |
|
38,624 |
Total vessels and equipment |
|
1,922,662 |
|
1,945,468 |
|
1,949,640 |
Investment in and advances to equity accounted joint ventures |
|
671,789 |
|
649,851 |
|
409,735 |
Net investments in direct financing leases |
|
683,254 |
|
538,964 |
|
396,730 |
Advances to joint venture partner |
|
- |
|
10,200 |
|
14,004 |
Other assets |
|
28,284 |
|
29,964 |
|
25,233 |
Derivative assets |
|
62,867 |
|
80,439 |
|
145,347 |
Intangible assets - net |
|
96,845 |
|
99,769 |
|
109,984 |
Goodwill - liquefied gas segment |
|
35,631 |
|
35,631 |
|
35,631 |
Total assets |
|
4,219,594 |
|
4,069,347 |
|
3,785,446 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable |
|
1,741 |
|
2,260 |
|
2,178 |
Accrued liabilities |
|
45,796 |
|
37,013 |
|
38,134 |
Unearned revenue |
|
15,455 |
|
10,146 |
|
19,417 |
Current portion of long-term debt |
|
97,114 |
|
88,096 |
|
86,489 |
Current obligations under capital lease |
|
31,668 |
|
157,649 |
|
70,272 |
Current portion of derivative liabilities |
|
76,980 |
|
72,024 |
|
48,046 |
Advances from affiliates |
|
19,270 |
|
16,870 |
|
12,083 |
Total current liabilities |
|
288,024 |
|
384,058 |
|
276,619 |
Long-term debt |
|
1,680,393 |
|
1,645,302 |
|
1,326,864 |
Long-term obligations under capital lease |
|
566,661 |
|
472,621 |
|
567,302 |
Long-term unearned revenue |
|
36,689 |
|
36,521 |
|
38,570 |
Other long-term liabilities |
|
73,140 |
|
73,589 |
|
73,568 |
Derivative liabilities |
|
130,903 |
|
154,261 |
|
248,249 |
Total liabilities |
|
2,775,810 |
|
2,766,352 |
|
2,531,172 |
Equity |
|
|
|
|
|
|
Limited partners |
|
1,338,133 |
|
1,206,043 |
|
1,165,634 |
General Partner |
|
52,526 |
|
48,502 |
|
47,346 |
Accumulated other comprehensive income (loss) |
|
131 |
|
(1,549) |
|
- |
Partners' equity |
|
1,390,790 |
|
1,252,996 |
|
1,212,980 |
Non-controlling interest (1) |
|
52,994 |
|
49,999 |
|
41,294 |
Total equity |
|
1,443,784 |
|
1,302,995 |
|
1,254,274 |
Total liabilities and total equity |
|
4,219,594 |
|
4,069,347 |
|
3,785,446 |
|
|
(1) |
Non-controlling interest includes a 30 percent equity interest in
the RasGas II project (which owns three LNG carriers), a 31 percent
equity interest in the Tangguh Project (which owns two LNG
carriers), a 1 percent equity interest in two LNG carriers
(Arctic Spirit and Polar Spirit), a 1 percent
equity interest in the Excalibur joint venture (which owns one LNG
carrier), a 1 percent equity interest in the five LPG/Multigas
carriers that are chartered out to I.M. Skaugen ASA, and a 1
percent equity interest in two LNG carriers chartered out to
Awilco, which in each case represents the ownership interest not
owned by the Partnership. |
|
TEEKAY LNG PARTNERS L.P. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands of U.S. Dollars) |
|
|
Year Ended December 31, 2013 $ |
Year Ended December 31, 2012 $ |
Cash and cash equivalents provided by (used for) |
|
|
OPERATING ACTIVITIES |
|
|
Net income |
213,315 |
139,142 |
Non-cash items: |
|
|
|
Unrealized (gain) loss on derivative instruments |
(22,568) |
(6,900) |
|
Depreciation and amortization |
97,884 |
100,474 |
|
Write down of vessels |
- |
29,367 |
|
Unrealized foreign currency exchange gain |
16,019 |
8,923 |
|
Equity income, net of dividends received of $13,738 (2012 -
$14,700) |
(109,544) |
(64,166) |
|
Amortization of deferred debt issuance costs and other |
5,551 |
(27) |
Change in operating assets and liabilities |
10,078 |
(7,307) |
Expenditures for dry docking |
(27,203) |
(7,493) |
Net operating cash flow |
183,532 |
192,013 |
FINANCING ACTIVITIES |
|
|
Proceeds from issuance of long-term debt |
719,300 |
500,335 |
Debt issuance costs |
(3,362) |
(2,065) |
Scheduled repayments of long-term debt |
(86,609) |
(84,666) |
Prepayments of long-term debt |
(270,000) |
(324,274) |
Scheduled repayments of capital lease obligations |
(10,315) |
(10,161) |
Proceeds from equity offerings, net of offering
costs |
190,520 |
182,316 |
Advances to joint venture partners and equity accounted
joint ventures |
(16,822) |
(3,600) |
Decrease (increase) in restricted cash |
27,761 |
(31,217) |
Cash distributions paid |
(215,416) |
(195,909) |
Other |
(373) |
(385) |
Net financing cash flow |
334,684 |
30,374 |
INVESTING ACTIVITIES |
|
|
Purchase of equity accounted investments |
(135,790) |
(170,067) |
Receipts from direct financing leases |
11,641 |
6,155 |
Expenditures for vessels and equipment |
(368,163) |
(39,894) |
Other |
- |
1,369 |
Net investing cash flow |
(492,312) |
(202,437) |
Increase in cash and cash equivalents |
25,904 |
19,950 |
Cash and cash equivalents, beginning of the year |
113,577 |
93,627 |
Cash and cash equivalents, end of the year |
139,481 |
113,577 |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
A - SPECIFIC ITEMS AFFECTING NET INCOME |
(in thousands of U.S. Dollars) |
|
Set forth below is a reconciliation of the Partnership's
unaudited adjusted net income attributable to the partners, a
non-GAAP financial measure, to net income attributable to the
partners as determined in accordance with GAAP. The Partnership
believes that, in addition to conventional measures prepared in
accordance with GAAP, certain investors use this information to
evaluate the Partnership's financial performance. The items below
are also typically excluded by securities analysts in their
published estimates of the Partnership's financial results.
Adjusted net income attributable to the partners is intended to
provide additional information and should not be considered a
substitute for measures of performance prepared in accordance with
GAAP.
|
|
|
Three Months
Ended December 31 |
|
Year Ended
December 31 |
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Net income - GAAP basis |
|
52,172 |
|
37,120 |
|
213,315 |
|
139,142 |
Less: |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest |
|
(4,644) |
|
(8,895) |
|
(12,073) |
|
(15,437) |
Net income attributable to the partners |
|
47,528 |
|
28,225 |
|
201,242 |
|
123,705 |
Add (subtract) specific items affecting net
income: |
|
|
|
|
|
|
|
|
|
Unrealized foreign currency exchange losses(1) |
|
4,866 |
|
6,300 |
|
15,674 |
|
8,213 |
|
Unrealized gains from derivative instruments(2) |
|
(3,656) |
|
(23,042) |
|
(22,568) |
|
(6,900) |
|
Unrealized gains from derivative instruments and other items from
equity accounted investees(3) |
|
(5,284) |
|
(8,849) |
|
(25,918) |
|
(3,721) |
|
Loan loss recovery(4) |
|
(3,804) |
|
- |
|
- |
|
- |
|
Restructuring charge(5) |
|
1,786 |
|
- |
|
1,786 |
|
- |
|
Income tax expense(6) |
|
3,050 |
|
- |
|
3,050 |
|
- |
|
Write down of vessels(7) |
|
- |
|
29,367 |
|
- |
|
29,367 |
|
Non-controlling interests' share of items above(8) |
|
1,738 |
|
6,497 |
|
1,689 |
|
5,650 |
Total adjustments |
|
(1,304) |
|
10,273 |
|
(26,287) |
|
32,609 |
Adjusted net income attributable to the partners |
|
46,224 |
|
38,498 |
|
174,955 |
|
156,314 |
|
|
|
|
|
|
|
|
|
(1) |
Unrealized foreign exchange losses 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 loss on the
cross-currency swap economically hedging the Partnership's NOK bond
and exclude the realized gains relating to the cross currency swap
for the NOK bonds. |
(2) |
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. |
(3) |
Reflects the unrealized (gains) losses 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 any derivative instruments designated as hedges
for accounting purposes within the Partnership's equity-accounted
investments. In addition, it also reflects $1.1 million of
acquisition-related costs during the year ended December 31, 2012
relating to the acquisition of the Malt LNG Carriers in February
2012 and a $0.8 million provision during the three months and year
ended December 31, 2012 relating to a prior year customer claim
from the Excalibur and Excelsior joint ventures. |
(4) |
In
early-2012, Teekay BLT Corporation, in which the Partnership has a
69 percent ownership interest, advanced amounts to P.T. Berlian
Laju Tanker, the parent company of the non-controlling shareholder
of the Teekay Tangguh Joint Venture, as an advance of dividends. In
July 2012, P.T. Berlian Laju Tanker entered into a court-supervised
restructuring in Indonesia in order to restructure its debts. In
September 2013, the Teekay Tangguh Joint Venture recorded a $3.8
million loan loss provision relating to the advances to P.T.
Berlian Laju Tanker, as it was probable, at that time, that the
carrying value of the loan was impaired. However, during the fourth
quarter of 2013, as P.T. Berlian Laju Tanker had sufficiently
restructured its business, the Teekay Tangguh Joint Venture
reassessed the probability of collectability of this advance and
reversed the loan loss provision previously recorded in September
2013. On February 1, 2014, the Teekay Tangguh Joint Venture
declared dividends of $69.5 million of which $14.4 million was used
to offset the total advances to its non-controlling shareholder and
P.T. Berlian Laju Tanker. |
(5) |
Restructuring charge primarily relates to seafarer severance
payments upon sale of two conventional tankers under capital
lease. |
(6) |
Reflects an annual adjustment to the Partnership's valuation
allowance for its deferred tax assets. |
(7) |
The
carrying value of three of the Partnership's conventional Suezmax
tankers (the Tenerife Spirit, Algeciras Spirit and
Huelva Spirit) was written down during the three months
and year ended December 31, 2012 due to the expected termination of
their time-charter contracts in 2013 and 2014. The estimated fair
value was based on a discounted cash flow approach and such
estimates of cash flows were based on existing time-charter
contracts, lease obligations and budgeted operating costs. |
(8) |
Items
affecting net income include items from the Partnership's
wholly-owned subsidiaries, its consolidated non-wholly-owned
subsidiaries and its proportionate share of items from equity
accounted for investments. 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
items listed in the table. |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
DISTRIBUTABLE CASH FLOW (DCF) |
(in thousands of U.S. Dollars) |
|
Description of Non-GAAP Financial Measure - Distributable Cash
Flow (DCF)
Distributable cash flow represents net income adjusted for
depreciation and amortization expense, non-cash items, estimated
maintenance capital expenditures, unrealized gains and losses from
derivatives, distributions relating to equity financing of
newbuilding installments, loan loss recovery, equity income, write
down of vessels, adjustments for direct financing leases to a cash
basis, deferred income taxes and foreign exchange related items.
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. Distributable cash flow is a quantitative standard used in
the publicly-traded partnership investment community to assist in
evaluating a partnership's ability to make quarterly cash
distributions. Distributable cash flow is not required by GAAP and
should not be considered as an alternative to net income or any
other indicator of the Partnership's performance required by GAAP.
The table below reconciles distributable cash flow to net
income.
|
|
Three Months Ended
December 31, 2013 (unaudited) |
|
Three Months Ended
December 31, 2012 (unaudited) |
|
|
|
|
|
Net income: |
|
52,172 |
|
37,120 |
Add: |
|
|
|
|
|
Depreciation and amortization |
|
24,145 |
|
26,227 |
|
Partnership's share of equity accounted joint ventures' DCF |
|
|
|
|
|
before estimated maintenance and capital expenditures |
|
37,944 |
|
27,748 |
|
Write down of vessels |
|
- |
|
29,367 |
|
Unrealized foreign exchange loss |
|
4,866 |
|
6,300 |
|
Distributions relating to equity financing of newbuildings |
|
1,261 |
|
- |
|
Direct finance lease payments received in excess of revenue
recognized |
|
3,950 |
|
1,475 |
|
Deferred income tax |
|
3,050 |
|
504 |
Less: |
|
|
|
|
|
Loan loss recovery |
|
(3,804) |
|
- |
|
Unrealized loss on derivatives and other non-cash items |
|
(6,689) |
|
(27,346) |
|
Estimated maintenance capital expenditures |
|
(20,282) |
|
(14,345) |
|
Equity income |
|
(28,602) |
|
(29,634) |
Distributable Cash Flow before Non-controlling
interest |
|
68,011 |
|
57,416 |
Non-controlling interests' share of DCF before
estimated maintenance capital expenditures |
|
(4,625) |
|
(3,817) |
Distributable Cash Flow |
|
63,386 |
|
53,599 |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
NET
VOYAGE REVENUES |
(in thousands of U.S. Dollars) |
|
Description of Non-GAAP Financial Measure - Net Voyage
Revenues
Net voyage revenues represents voyage revenues less voyage
expenses, which comprise all expenses relating to certain voyages,
including bunker fuel expenses, port fees, canal tolls and
brokerage commissions. Net voyage revenues is included because
certain investors use this data to measure the financial
performance of shipping companies. Net voyage revenues is not
required by GAAP and should not be considered as an alternative to
voyage revenues or any other indicator of the Partnership's
performance required by GAAP.
|
|
Three Months
Ended December 31, 2013 |
|
|
(unaudited) |
|
|
|
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Voyage revenues |
|
77,166 |
|
27,692 |
|
104,858 |
Voyage expenses |
|
- |
|
869 |
|
869 |
Net voyage revenues |
|
77,166 |
|
26,823 |
|
103,989 |
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2012 |
|
|
(unaudited) |
|
|
|
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Voyage revenues |
|
70,489 |
|
27,747 |
|
98,236 |
Voyage (recoveries) expenses |
|
(56) |
|
383 |
|
327 |
Net voyage revenues |
|
70,545 |
|
27,364 |
|
97,909 |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
D - SUPPLEMENTAL SEGMENT INFORMATION |
(in thousands of U.S. Dollars) |
|
|
|
Three Months Ended December 31, 2013 |
|
|
(unaudited) |
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Net voyage revenues (See Appendix C) |
|
77,166 |
|
26,823 |
|
103,989 |
Vessel operating expenses |
|
14,106 |
|
11,058 |
|
25,164 |
Depreciation and amortization |
|
17,916 |
|
6,229 |
|
24,145 |
General and administrative |
|
3,764 |
|
1,674 |
|
5,438 |
Loan loss recovery |
|
(3,804) |
|
- |
|
(3,804) |
Restructuring charge |
|
- |
|
1,786 |
|
1,786 |
Income from vessel operations |
|
45,184 |
|
6,076 |
|
51,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012 |
|
|
(unaudited) |
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Net voyage revenues (See Appendix C) |
|
70,545 |
|
27,364 |
|
97,909 |
Vessel operating expenses |
|
13,846 |
|
11,924 |
|
25,770 |
Depreciation and amortization |
|
17,359 |
|
8,868 |
|
26,227 |
General and administrative |
|
3,889 |
|
1,334 |
|
5,223 |
Write down of vessels |
|
- |
|
29,367 |
|
29,367 |
Income from vessel operations |
|
35,451 |
|
(24,129) |
|
11,322 |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
CASH FLOW
FROM VESSEL OPERATIONS |
FROM
CONSOLIDATED VESSELS |
(in thousands of U.S. Dollars) |
|
Description of Non-GAAP Financial Measure - Cash Flow from
Vessel Operations from Consolidated Vessels
Cash flow from vessel operations from consolidated vessels
represents income from vessel operations before (a) depreciation
and amortization expense, (b) amortization of in-process revenue
contracts included in voyage revenues, (c) loan loss recovery, (d)
write down of vessels and includes (e) adjustments for direct
financing leases and two Suezmax tankers to a cash basis. The
Partnership's direct financing leases for the periods indicated
relates to the Partnership's 69 percent interest in two LNG
carriers, the Tangguh Sago and Tangguh Hiri, and
the two LNG carriers acquired from Awilco in September and November
2013. The Partnership's cash flow from vessel operations from
consolidated vessels does not include the Partnership's cash flow
from vessel operations from its equity accounted joint ventures.
Cash flow from vessel operations is included because certain
investors use cash flow from vessel operations to measure a
company's financial performance, and to highlight this measure for
the Partnership's consolidated vessels. Cash flow from vessel
operations from consolidated vessels is not required by GAAP and
should not be considered as an alternative to net income or any
other indicator of the Partnership's performance required by
GAAP.
|
|
Three Months
Ended December 31, 2013 |
|
|
(unaudited) |
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Income from vessel operations (See Appendix D) |
|
45,184 |
|
6,076 |
|
51,260 |
Depreciation and amortization |
|
17,916 |
|
6,229 |
|
24,145 |
Amortization of in-process revenue contracts included in voyage
revenues |
|
- |
|
(278) |
|
(278) |
Direct finance lease payments received in excess of revenue
recognized |
|
3,950 |
|
- |
|
3,950 |
Loan loss recovery(1) |
|
(3,804) |
|
- |
|
(3,804) |
Realized gain on Toledo Spirit derivative contract |
|
- |
|
641 |
|
641 |
Cash flow adjustment for two Suezmax tankers(2) |
|
- |
|
(1,704) |
|
(1,704) |
Cash flow from vessel operations from consolidated vessels |
|
63,246 |
|
10,964 |
|
74,210 |
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2012 |
|
|
(unaudited) |
|
|
Liquefied Gas Segment |
|
Conventional Tanker Segment |
|
Total |
Income from vessel operations (See Appendix D) |
|
35,451 |
|
(24,129) |
|
11,322 |
Depreciation and amortization |
|
17,359 |
|
8,868 |
|
26,227 |
Write down of vessels |
|
- |
|
29,367 |
|
29,367 |
Amortization of in-process revenue contracts included in voyage
revenues |
|
- |
|
(278) |
|
(278) |
Direct finance lease payments received in excess of revenue
recognized |
|
1,475 |
|
- |
|
1,475 |
Realized gain on Toledo Spirit derivative contract |
|
- |
|
945 |
|
945 |
Cash flow adjustment for two Suezmax tankers(2) |
|
- |
|
(1,704) |
|
(1,704) |
Cash flow from vessel operations from consolidated vessels |
|
54,285 |
|
13,069 |
|
67,354 |
|
|
(1) |
In
early-2012, Teekay BLT Corporation, in which the Partnership has a
69 percent ownership interest, advanced amounts to P.T. Berlian
Laju Tanker, the parent company of the non-controlling shareholder
of the Teekay Tangguh Joint Venture, as an advance of dividends. In
July 2012, P.T. Berlian Laju Tanker entered into a court-supervised
restructuring in Indonesia in order to restructure its debts. In
September 2013, the Teekay Tangguh Joint Venture recorded a $3.8
million loan loss provision relating to the advances to P.T.
Berlian Laju Tanker, as it was probable, at that time, that the
carrying value of the loan was impaired. However, during the fourth
quarter of 2013, as P.T. Berlian Laju Tanker had sufficiently
restructured its business, the Teekay Tangguh Joint Venture
reassessed the probability of collectability of this advance and
reversed the loan loss provision previously recorded in September
2013. On February 1, 2014, the Teekay Tangguh Joint Venture
declared dividends of $69.5 million of which $14.4 million was used
to offset the total advances to its non-controlling shareholder and
P.T. Berlian Laju Tanker. |
(2) |
The
Partnership's charter contracts for two of its Suezmax tankers, the
Bermuda Spirit and Hamilton Spirit, were amended
in 2012, which had the effect of reducing the daily charter rates
by $12,000 per day for a duration of 24 months commencing October
1, 2012. However, during this period, if Suezmax spot tanker rates
exceed the amended rates, the charterer will pay the Partnership
the excess amount up to a maximum of the original daily charter
rate. The cash impact of the change in hire rates is not fully
reflected in the Partnership's statements of income and
comprehensive income as the change in the lease payments is being
recognized on a straight-line basis over the term of the
lease. |
|
TEEKAY LNG PARTNERS L.P. |
APPENDIX
F - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
CASH FLOW
FROM VESSEL OPERATIONS FROM EQUITY ACCOUNTED VESSELS |
(in thousands of U.S. Dollars) |
|
Description of Non-GAAP Financial Measure - Cash Flow from
Vessel Operations from Equity Accounted Vessels
Cash flow from vessel operations from equity accounted vessels
represents income from vessel operations before (a) depreciation
and amortization expense, (b) amortization of in-process revenue
contracts, and includes (c) adjustments for direct financing leases
to a cash basis. Cash flow from vessel operations from equity
accounted vessels is included because certain investors use cash
flow from vessel operations to measure a company's financial
performance, and to highlight this measure for the Partnership's
equity accounted joint ventures. Cash flow from vessel operations
from equity-accounted vessels is not required by GAAP and should
not be considered as an alternative to equity income or any other
indicator of the Partnership's performance required by GAAP.
|
|
Three Months
Ended December 31, 2013 |
|
Three Months
Ended December 31, 2012 |
|
|
(unaudited) |
|
(unaudited) |
|
|
At 100% |
|
Partnership's Portion(1) |
|
At 100% |
|
Partnership's Portion(1) |
Voyage revenues |
|
171,275 |
|
79,803 |
|
113,881 |
|
51,265 |
Vessel and other operating expenses |
|
57,219 |
|
27,050 |
|
24,607 |
|
11,159 |
Depreciation and amortization |
|
28,004 |
|
14,140 |
|
16,653 |
|
8,583 |
Income from vessel operations of equity accounted vessels |
|
86,052 |
|
38,613 |
|
72,621 |
|
31,523 |
Interest expense − net |
|
(22,638) |
|
(10,609) |
|
(15,482) |
|
(6,797) |
Realized and unrealized gain (loss) on derivative instruments |
|
1,969 |
|
614 |
|
13,435 |
|
4,431 |
Other (expense) income − net |
|
(477) |
|
(16) |
|
286 |
|
477 |
Other items |
|
(21,146) |
|
(10,011) |
|
(1,761) |
|
(1,889) |
|
|
|
|
|
|
|
|
|
Net income / equity income of equity accounted vessels |
|
64,906 |
|
28,602 |
|
70,860 |
|
29,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from vessel operations |
|
86,052 |
|
38,613 |
|
72,621 |
|
31,523 |
Depreciation and amortization |
|
28,004 |
|
14,140 |
|
16,653 |
|
8,583 |
Direct finance lease payments received in excess of revenue
recognized |
|
7,472 |
|
2,711 |
|
7,466 |
|
2,731 |
Amortization of in-process revenue contracts |
|
(5,606) |
|
(2,838) |
|
(8,350) |
|
(4,339) |
Cash flow from vessel operations from equity accounted vessels |
|
115,922 |
|
52,626 |
|
88,390 |
|
38,498 |
|
|
(1) |
The
Partnership's equity accounted investments for the three months
ended December 31, 2013 and 2012 include the Partnership's 40
percent interest in Teekay Nakilat (III) Corporation, which owns
four LNG carriers; the Partnership's 50 percent interest in the
Excalibur and Excelsior joint ventures, which owns one LNG carrier
and one regasification unit, respectively; the Partnership's 33
percent interest in four LNG carriers servicing the Angola LNG
Project; and the Partnership's 52 percent interest in Malt LNG
Netherlands Holdings B.V., the joint venture between the
Partnership and Marubeni Corporation, which owns six LNG carriers.
The Partnership's equity accounted investments for the three months
ended December 31, 2013 also includes the Partnership's 50 percent
interest in Exmar LPG BVBA, the joint venture between the
Partnership and Exmar, commencing in February 2013, which owns and
charters-in 28 vessels in the LPG carrier segment, including 12
newbuildings. |
|
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 regarding:
future growth opportunities, including the Partnership's ability to
successfully bid for new LNG shipping and floating regasification
projects; the Partnership's ability to secure charter contract
employment and long-term financing for the three currently
unchartered MEGI LNG carrier newbuilding vessels ordered in July
and November 2013; expected fuel-efficiency and emission levels
associated with the MEGI engines to be installed in the
Partnership's five LNG newbuildings to be built by DSME; the
expected delivery dates for the Partnership's newbuilding vessels
and, if applicable, commencing their time charter contracts; the
average remaining contract length on the Partnership's LNG fleet;
the Partnership's exposure to spot and short-term LNG shipping
rates; and LNG shipping market fundamentals, including the
short-term demand for LNG carrier capacity, future growth in global
LNG supply, and the balance of supply and demand of shipping
capacity and shipping charter rates in the sector.
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: shipyard construction
delays or cost overruns; availability of suitable LNG shipping, LPG
shipping, floating storage and regasification and other growth
project opportunities; 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; competitive dynamics in bidding for potential LNG,
LPG or floating regasification projects; the Partnership's ability
to secure new contracts through bidding on project tenders; the
Partnership's ability to secure charter contracts for the three
currently unchartered MEGI LNG carrier newbuildings; 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
Teekay LNG fleet; the inability of charterers to make future
charter payments; the inability of the Partnership to renew or
replace long-term contracts on existing vessels or attain
fixed-rate long-term contracts for newbuilding vessels; the
Partnership's ability to raise financing for its existing
newbuildings or to purchase additional vessels or to pursue other
projects; actual performance of the MEGI engines; 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, 2012. 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.
For Investor Relations enquiries contact:Teekay LNG Partners
L.P.Ryan Hamilton+1 (604) 609-6442www.teekaylng.com
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