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 ended March 31, 2018.
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Three Months Ended |
|
March 31, 2018 |
December 31,2017 |
March 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL
COMPARISON |
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Voyage revenues |
115,306 |
|
126,307 |
|
101,180 |
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Income from vessel
operations |
25,142 |
|
62,378 |
|
46,078 |
|
Equity income |
26,724 |
|
2,992 |
|
5,887 |
|
Net (loss) income
attributable to the partners and preferred unitholders |
(6,894 |
) |
39,877 |
|
29,057 |
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NON-GAAP FINANCIAL
COMPARISON |
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Total cash flow from
vessel operations (CFVO) (1) |
117,595 |
|
126,833 |
|
109,211 |
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Distributable cash flow
(DCF) (1) |
35,341 |
|
52,054 |
|
43,227 |
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Adjusted
net income attributable to the partners and preferred unitholders
(1) |
22,058 |
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33,972 |
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21,093 |
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(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). |
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GAAP net (loss) income was impacted for the
three months ended March 31, 2018, compared to the same quarter of
the prior year, by various items, including: a provision relating
to a potential tax indemnification guarantee liability, the
write-down of three conventional tankers in the first quarter of
2018, and restructuring charges incurred in association with the
sale of a conventional tanker in the first quarter of 2018, which
were partially offset by an increase in unrealized gains on
derivative instruments.
In addition, GAAP net (loss) income and non-GAAP
adjusted net income were positively impacted by the deliveries of
seven liquefied natural gas (LNG) and three liquefied petroleum gas
(LPG) carrier newbuildings between February 2017 and February 2018
and the commencement of short-term charter contracts for certain of
the vessels in the Partnership’s 52 percent-owned joint venture
with Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture).
These increases were partially offset by the sale of a conventional
tanker and an LPG carrier in the first quarter of 2018, lower rates
earned in 2018 on two conventional tankers upon the expiration of
their fixed-rate charter contracts in 2017, and lower rates earned
in 2018 on six LPG carriers upon the termination of their previous
charter contracts.
CEO Commentary
“The results for the first quarter of 2018
included certain non-recurring items relating to a tax
indemnification guarantee liability and lower utilization on some
of our LPG carriers as they are transitioning into our Teekay
Multigas Pool,” commented Mark Kremin, President and Chief
Executive Officer of Teekay Gas Group Ltd. “Despite these items, we
continue to generate stable cash flows and I am pleased to report
that since releasing our earnings in mid-February, we have made
significant progress on various initiatives across the
organization.”
“We have continued to take delivery of vessels
on schedule as part of the world’s largest LNG carrier newbuilding
orderbook. In addition, we recently completed another 2018
refinancing and are making significant progress on the remaining
refinancings, which are on track to be completed within the third
quarter of 2018. Finally, the Partnership successfully re-chartered
the Arctic Spirit and Polar Spirit LNG carriers for four years and
one year, respectively, upon their redeliveries from Teekay
Corporation in May and March of this year. These new charter
contracts, which will service the fast-growing LNG import market in
China, will add further stability to Teekay LNG’s market-leading
portfolio of forward fixed-rate revenues. Looking ahead, we are
excited by the strong LNG demand fundamentals and our position as
one of the world’s largest LNG transportation companies.”
Mr. Kremin continued, “Over the past seven
months, we have taken delivery of only seven vessels out of our
total LNG newbuilding program of 18 LNG carriers and a
regasification terminal and therefore, a significant portion of the
incremental $310 million of annual cash flow from vessel operations
we expect to generate from this program when fully delivered, has
not yet been reflected in our financial results. As the remaining
newbuildings deliver through early-2020, which are all contracted
on long-term charters, we expect further cash flow growth and
natural delevering of our balance sheet.”
Summary of Recent Events
LNG and LPG Mid-sized Carrier Newbuilding
Deliveries
In January 2018, the Partnership’s 50
percent-owned joint venture with China LNG Shipping (Holdings)
Limited (China LNG) (the Yamal LNG Joint Venture) took delivery of
its first ARC7 LNG carrier newbuilding, the Eduard Toll, which
immediately commenced its 28-year charter contract with the Yamal
LNG project.
In January 2018, the Partnership’s 30
percent-owned joint venture with China LNG and CETS (an affiliate
of China National Offshore Oil Corporation (CNOOC)) took delivery
of one LNG carrier newbuilding, the Pan Americas, which immediately
commenced its 20-year charter contract with Royal Dutch Shell
(Shell).
In February and May 2018, the Partnership took
delivery of two M-Type, Electronically Controlled, Gas Injection
(MEGI) LNG carrier newbuildings, the Magdala and Myrina, both of
which immediately commenced their respective charter contracts with
Shell ranging between six and eight years in duration, plus
extension options.
In March 2018, the Partnership’s 50
percent-owned joint venture with Exmar NV (the Exmar LPG Joint
Venture) took delivery of its seventh LPG carrier newbuilding, the
Kapellen, which is currently trading in the spot market.
Re-chartering Activities
In March 2018, upon the scheduled redelivery
from Teekay Corporation, the Partnership re-chartered the Polar
Spirit to an Asian-based energy company for a period of
approximately three months and then subsequently secured forward
employment beginning in July 2018 for nine months with a subsidiary
of Petroliam Nasional Berhad (Petronas). In addition, the
Partnership secured a four-year charter contract for the Arctic
Spirit, also with a subsidiary of Petronas, which commenced
immediately upon redelivery from Teekay Corporation in May
2018.
In May 2018, the Partnership agreed to a
six-month charter extension of the Torben Spirit MEGI LNG carrier
to a major energy company out to December 2018.
Teekay Nakilat Capital Lease
The Partnership owns a 70 percent interest in
Teekay Nakilat Corporation (the Teekay Nakilat Joint Venture),
which wholly owns a subsidiary which was the lessee under three
separate 30-year capital lease arrangements for three LNG carriers
(the RasGas II LNG Carriers). Under the terms of these leases, the
lessor claimed tax depreciation on the capital expenditures
incurred to acquire these vessels and paid the lessee an upfront
benefit in the amount of $60.9 million at the lease inception. As
is typical in these leasing arrangements, tax and change of law
risks were assumed by the lessee, in this case the Teekay Nakilat
Joint Venture. Lease payments under the lease arrangements were
based on certain tax and financial assumptions at the commencement
of the leases in 2006 and subsequently adjusted to maintain the
lessor's agreed after-tax margin. On December 22, 2014, the
Teekay Nakilat Joint Venture terminated the leases of the RasGas II
LNG Carriers; however, it remained obligated to the lessor for
changes in tax treatment.
The UK taxing authority (HMRC) has challenged
the use by third parties of similar lease structures in the UK
courts. One of those challenges was eventually decided in favor of
HMRC, with the lessor and lessee choosing not to appeal further.
This case concluded that capital allowances are not available to
lessors. On the basis of this conclusion, HMRC is now asking
lessees on other leases, including the Teekay Nakilat Joint
Venture, to accept that capital allowances are not available to
their lessors. Under the terms of the lease, the lessor is entitled
to make a determination that additional rentals are due, even where
a court has not made a determination on whether capital allowances
are available or where discussions are otherwise ongoing with HMRC
on the matter (such that additional rental paid may be rebated in
due course if the final tax position is not as determined by the
lessor). On May 10, 2018, the lessor made a determination that
additional rentals are due under the leases. As a result,
during the three months ended March 31, 2018, the Teekay Nakilat
Joint Venture has recognized an additional tax indemnification
guarantee liability of $53.0 million for a total liability of $65.6
million (46.9 million GBP) as at March 31, 2018. The Teekay Nakilat
Joint Venture is in discussions with HMRC in relation to the
correct tax treatment to be applied to the leases and with the
lessor regarding the timing and amount of this potential liability
for additional rentals.
Debt Financing Update
In May 2018, the Partnership refinanced an
outstanding debt facility of $58 million maturing in 2018 and
secured by five mid-sized LPG carriers, with a new $90 million
long-term debt facility maturing in 2024 and secured by seven
mid-sized LPG carriers.
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 E for further details).
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Three Months Ended |
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March 31, 2018 |
March 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
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LiquefiedGasSegment |
ConventionalTankerSegment |
Total |
LiquefiedGasSegment |
ConventionalTankerSegment |
Total |
GAAP FINANCIAL
COMPARISON |
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Voyage revenues |
105,049 |
|
10,257 |
|
115,306 |
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88,947 |
|
12,233 |
|
101,180 |
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Income (loss) from
vessel operations |
44,545 |
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(19,403 |
) |
25,142 |
|
43,336 |
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2,742 |
|
46,078 |
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Equity income |
26,724 |
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— |
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26,724 |
|
5,887 |
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— |
|
5,887 |
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NON-GAAP FINANCIAL
COMPARISON |
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CFVO from
consolidated vessels(i) |
73,498 |
|
1,506 |
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75,004 |
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71,783 |
|
5,379 |
|
77,162 |
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CFVO from
equity-accounted vessels(i) |
42,591 |
|
— |
|
42,591 |
|
32,049 |
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— |
|
32,049 |
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Total CFVO(i) |
116,089 |
|
1,506 |
|
117,595 |
|
103,832 |
|
5,379 |
|
109,211 |
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(i) |
These are non-GAAP financial measures. Please refer to
“Definitions and Non-GAAP Financial Measures” and the Appendices to
this release for definitions of these terms and reconciliations of
these non-GAAP financial measures as used in this release to the
most directly comparable financial measures under GAAP. |
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Liquefied Gas Segment
Income from vessel operations and CFVO from
consolidated vessels for the three months ended March 31,
2018, compared to the same quarter of the prior year, increased
primarily due to the deliveries of four LNG carrier newbuildings,
the Torben Spirit, Macoma, Murex and Magdala between February 2017
and February 2018. This increase was partially offset by lower
rates earned by six of the Partnership's LPG carriers following the
Partnership's termination of their charter contracts due to
non-payment by the charterer.
Equity income and CFVO from equity-accounted
vessels increased for the three months ended March 31, 2018,
compared to the same quarter of the prior year, primarily due to
higher fleet utilization in the Teekay LNG-Marubeni Joint Venture
since certain of the joint venture’s vessels commenced short-term
charter contracts; the delivery of the Eduard Toll ARC 7 LNG
carrier in January 2018 to the Yamal LNG Joint Venture; the
deliveries of the Pan Asia and Pan Americas LNG carriers in October
2017 and January 2018, respectively, in the Partnership’s
30-percent owned joint venture with China LNG and CETS; and the
deliveries of three LPG carriers in the Exmar LPG Joint Venture.
These increases were partially offset by the sale of the
Courcheville LPG carrier in January 2018; lower rates earned in the
Exmar LPG Joint Venture; and the sale of the S/S Excelsior LNG
carrier in the Partnership’s 50-percent owned joint venture with
Exmar NV (the Excelsior Joint Venture) in January 2018. Equity
income was also positively impacted by an increase in net
unrealized gains on designated and non-designated derivative
instruments in our equity-accounted vessels and a gain recorded on
the Partnership’s sale in January 2018 of its 50-percent owned
investment in the Excelsior Joint Venture.
Conventional Tanker Segment
(Loss) income from vessel operations and CFVO
from consolidated vessels for the three months ended March 31,
2018, compared to the same quarter of the prior year, were impacted
primarily by the sale of the Teide Spirit in February 2018 and
associated restructuring charges as a result of the sale; and lower
rates earned in 2018 on the African Spirit and European Spirit upon
the expiration of their fixed-rate charter contracts in 2017. Loss
from vessel operations for the three months ended March 31, 2018
was also impacted by write-downs of the Alexander Spirit, African
Spirit and European Spirit conventional tankers to their current
estimated fair values.
Teekay LNG's Fleet
The following table summarizes the Partnership’s
fleet as of May 17, 2018, excluding the Partnership’s 30 percent
interest in a regasification facility currently under
construction:
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Number of Vessels |
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Owned and In-Chartered Vessels(i) |
Newbuildings |
Total |
LNG Carrier
Fleet |
38(ii) |
11(iii) |
49 |
LPG/Multigas
Carrier Fleet |
27(iv) |
2(v) |
29 |
Conventional
Tanker Fleet |
4(vi) |
— |
4 |
Total |
69 |
13 |
82 |
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(i) |
Owned vessels includes vessels accounted for as vessels related to
capital leases. |
(ii) |
The
Partnership’s ownership interests in these vessels range from 30
percent to 100 percent. |
(iii) |
The
Partnership's ownership interests in these newbuildings, range from
20 percent to 100 percent. |
(iv) |
The
Partnership’s ownership interests in these vessels range from 50
percent to 99 percent. |
(v) |
The
Partnership’s ownership interests in these newbuildings is 50
percent. |
(vi) |
Two
of the Partnership's conventional tankers are classified as held
for sale. |
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Liquidity
As of March 31, 2018, the Partnership had
total liquidity of $463.5 million (comprised of $197.0 million in
cash and cash equivalents and $266.5 million in undrawn credit
facilities).
Conference Call
The Partnership plans to host a conference call
on Thursday, May 17, 2018 at 11:00 a.m. (ET) to discuss the results
for the first quarter of 2018. All unitholders and interested
parties are invited to listen to the live conference call by
choosing from the following options:
- By dialing (800) 289-0438 or (647) 484-0478, if outside North
America, and quoting conference ID code 7883830.
- By accessing the webcast, which will be available on Teekay
LNG’s website at www.teekay.com (the archive will remain on the
website for a period of one year).
An accompanying First Quarter 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 11 newbuildings), 29 LPG/Multigas
carriers (including two newbuildings) and four conventional
tankers. The Partnership's interests in these vessels range from 20
to 100 percent. In addition, the Partnership owns a 30 percent
interest in a regasification facility, 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) 609-2963
Website: 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, 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. The Partnership believes
that certain investors use this information to evaluate the
Partnership’s financial performance, as does management.
Non-GAAP Financial Measures
Cash Flow from Vessel Operations (CFVO)
represents income from vessel operations before depreciation and
amortization expense, amortization of in-process revenue contracts,
vessel write-downs, 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. 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 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.
Adjusted Net Income excludes items of income or
loss from GAAP net (loss) 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 (loss) income, and refer to
footnote (3) of the Consolidated Statements of (Loss) 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.
Distributable Cash Flow (DCF) represents GAAP
net income adjusted for an additional tax indemnification guarantee
liability, 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.
|
Teekay LNG Partners L.P. |
Consolidated Statements of (Loss) Income |
(in thousands of U.S. Dollars, except units outstanding) |
|
|
Three Months Ended |
|
March 31, |
December 31 |
March 31, |
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Voyage
revenues |
115,306 |
|
126,307 |
|
101,180 |
|
|
|
|
|
Voyage expenses |
(5,801 |
) |
(4,303 |
) |
(1,437 |
) |
Vessel operating
expenses |
(28,467 |
) |
(27,026 |
) |
(23,388 |
) |
Depreciation and
amortization |
(29,267 |
) |
(27,651 |
) |
(26,120 |
) |
General and
administrative expenses |
(6,571 |
) |
(4,949 |
) |
(4,157 |
) |
Write-down of
vessels(1) |
(18,662 |
) |
— |
|
— |
|
Restructuring
charges(2) |
(1,396 |
) |
— |
|
— |
|
Income from vessel operations |
25,142 |
|
62,378 |
|
46,078 |
|
|
|
|
|
Equity income(3) |
26,724 |
|
2,992 |
|
5,887 |
|
Interest expense |
(24,706 |
) |
(23,333 |
) |
(16,988 |
) |
Interest income |
914 |
|
880 |
|
854 |
|
Realized and unrealized
gain on non-designated derivative instruments(4) |
8,001 |
|
3,066 |
|
1,187 |
|
Foreign currency
exchange loss(5) |
(1,273 |
) |
(2,436 |
) |
(3,568 |
) |
Other (expense)
income(6) |
(52,582 |
) |
424 |
|
391 |
|
Net (loss) income before tax expense |
(17,780 |
) |
43,971 |
|
33,841 |
|
Income tax (expense)
recovery |
(779 |
) |
319 |
|
(157 |
) |
Net (loss) income |
(18,559 |
) |
44,290 |
|
33,684 |
|
|
|
|
|
Non-controlling
interest in net (loss) income |
(11,665 |
) |
4,413 |
|
4,627 |
|
Preferred unitholders’
interest in net (loss) income |
6,425 |
|
5,541 |
|
2,812 |
|
General Partner’s
interest in net (loss) income |
(272 |
) |
687 |
|
525 |
|
Limited partners’
interest in net (loss) income |
(13,047 |
) |
33,649 |
|
25,720 |
|
Weighted-average number
of common units outstanding: |
|
|
|
• Basic |
79,637,607 |
|
79,626,819 |
|
79,590,153 |
|
• Diluted |
79,637,607 |
|
79,839,231 |
|
79,690,391 |
|
Total
number of common units outstanding at end of period |
79,687,499 |
|
79,626,819 |
|
79,626,819 |
|
|
|
|
|
|
|
|
(1) |
The
African Spirit and European Spirit were classified as vessels held
for sale upon the expiration of their time-charter contracts in
2017. The Partnership recorded an aggregate write-down of $5.7
million for the three months ended March 31, 2018 on these two
conventional tankers since the estimated fair values of these
vessels have decreased. In addition, the Partnership recorded a
write-down of $13.0 million relating to the Alexander Spirit
conventional tanker to its estimated fair value, using an appraised
value. This was as a result of changes in the Partnership's
expectations of the vessel's future opportunities once its current
contract ends in 2019. |
(2) |
In
February 2018, the Teide Spirit, was sold and as a result of this
sale, the Partnership recorded restructuring charges of $1.4
million relating to seafarer severance costs. |
(3) |
The
Partnership’s proportionate share of items within equity income as
identified in Appendix A of this release is detailed in the table
below. By excluding these items from equity income, the Partnership
believes the resulting adjusted equity income is a normalized
amount that can be used to better evaluate the financial
performance of the Partnership’s equity-accounted investments.
Adjusted equity income is a non-GAAP financial measure. |
|
|
|
Three Months Ended |
|
March 31, |
December 31 |
March 31, |
|
2018 |
2017 |
2017 |
Equity income |
26,724 |
|
2,992 |
|
5,887 |
|
Proportionate share of
unrealized gain on non-designated derivative instruments |
(8,221 |
) |
(4,404 |
) |
(1,784 |
) |
Proportionate share of
ineffective portion of hedge-accounted interest rate swaps |
(3,259 |
) |
566 |
|
(543 |
) |
Proportionate share of
write-down and loss on sale of vessel |
257 |
|
5,500 |
|
— |
|
Gain on sale of
equity-accounted investment |
(5,563 |
) |
— |
|
— |
|
Proportionate share of other items |
128 |
|
191 |
|
30 |
|
Equity
income adjusted for items in Appendix A |
10,066 |
|
4,845 |
|
3,590 |
|
|
|
|
|
|
|
|
(4) |
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
gains (losses) on non-designated derivative instruments relate to
the change in fair value of such non-designated derivative
instruments, as detailed in the table below: |
|
|
|
Three Months Ended |
|
March 31, |
December 31 |
March 31, |
|
2018 |
2017 |
2017 |
Realized
(losses) gains relating to: |
|
|
|
Interest rate swap
agreements |
(4,478 |
) |
(5,012 |
) |
(4,675 |
) |
Interest rate swaption
agreements termination |
— |
|
— |
|
395 |
|
Toledo Spirit
time-charter derivative contract |
309 |
|
152 |
|
15 |
|
|
(4,169 |
) |
(4,860 |
) |
(4,265 |
) |
Unrealized
gains (losses) relating to: |
|
|
|
Interest rate swap
agreements |
11,898 |
|
8,182 |
|
4,302 |
|
Interest rate swaption
agreements |
2 |
|
518 |
|
30 |
|
Toledo Spirit
time-charter derivative contract |
270 |
|
(774 |
) |
1,120 |
|
|
12,170 |
|
7,926 |
|
5,452 |
|
Total
realized and unrealized gains on non-designated derivative
instruments |
8,001 |
|
3,066 |
|
1,187 |
|
|
|
|
|
|
|
|
(5) |
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 (Loss) Income.Foreign
currency exchange loss includes realized losses relating to the
amounts the Partnership paid to settle the Partnership’s
non-designated cross-currency swaps that were entered into as
economic hedges in relation to the Partnership’s Norwegian Kroner
(NOK) denominated unsecured bonds. Foreign currency exchange loss
also includes unrealized gains (losses) 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 |
|
March 31, |
December 31 |
March 31, |
|
2018 |
2017 |
2017 |
Realized losses on
cross-currency swaps |
(1,384 |
) |
(2,125 |
) |
(3,537 |
) |
Unrealized gains
(losses) on cross-currency swaps |
22,334 |
|
(9,081 |
) |
2,699 |
|
Unrealized (losses) gains on revaluation of NOK bonds |
(17,487 |
) |
7,760 |
|
(606 |
) |
|
|
|
|
|
|
|
(6) |
The
Partnership owns a 70 percent interest in the Teekay Nakilat Joint
Venture, which wholly owns a subsidiary which was the lessee under
three separate 30-year capital lease arrangements with a third
party for the RasGas II LNG Carriers. Under the terms of these
leases, the lessor claimed tax depreciation on the capital
expenditures it incurred to acquire these vessels and paid the
lessee an upfront benefit in the amount of $60.9 million at the
lease inception. As is typical in these leasing arrangements, tax
and change of law risks were assumed by the lessee, in this case
the Teekay Nakilat Joint Venture. Lease payments under the lease
arrangements were based on certain tax and financial assumptions at
the commencement of the leases in 2006 and subsequently adjusted to
maintain the lessor's agreed after-tax margin. On December 22,
2014, the Teekay Nakilat Joint Venture terminated the leases of the
RasGas II LNG Carriers; however, it remained obligated to the
lessor for changes in tax treatment.HMRC has been challenging the
use by third parties of similar lease structures in the UK courts.
One of those challenges was eventually decided in favor of HMRC,
with the lessor and lessee choosing not to appeal further. This
case concluded that capital allowances are not available to the
lessor. On the basis of this conclusion, HMRC is now asking
lessees on other leases, including the Teekay Nakilat Joint
Venture, to accept that capital allowances are not available to
their lessors. Under the terms of the Teekay Nakilat Joint Venture
lease, the lessor is entitled to make a determination that
additional rentals are due, even where a court has not made a
determination on whether capital allowances are available or where
discussions are otherwise ongoing with HMRC on the matter (such
that additional rentals paid may be rebated in due course if the
final tax position is not as determined by the lessor). On May 10,
2018, the lessor made a determination that additional rentals are
due under the leases. As a result, during the three months ended
March 31, 2018, the Teekay Nakilat Joint Venture recognized an
additional tax indemnification guarantee liability of $53.0 million
for a total liability of $65.6 million (46.9 million GBP) as at
March 31, 2018. The Teekay Nakilat Joint Venture is in discussions
with HMRC in relation to the correct tax treatment to be applied to
the leases and with the lessor regarding the timing and amount of
this potential liability for additional rentals. |
|
Teekay LNG Partners L.P. |
Consolidated Balance Sheets |
(in thousands of U.S. Dollars) |
|
|
|
|
As at March 31, |
As at December 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
ASSETS |
|
|
Current |
|
|
Cash and cash
equivalents |
197,007 |
|
244,241 |
|
Restricted cash –
current |
19,256 |
|
22,326 |
|
Accounts
receivable |
22,561 |
|
24,054 |
|
Prepaid expenses |
6,209 |
|
6,539 |
|
Vessels held for
sale |
28,000 |
|
33,671 |
|
Current portion of
derivative assets |
1,919 |
|
1,078 |
|
Current portion of net
investments in direct financing leases |
10,676 |
|
9,884 |
|
Advances to
affiliates |
5,621 |
|
7,300 |
|
Other current
assets |
3,972 |
|
— |
|
Total current assets |
295,221 |
|
349,093 |
|
|
|
|
Restricted cash –
long-term |
67,032 |
|
72,868 |
|
|
|
|
Vessels and
equipment |
|
|
At cost, less
accumulated depreciation |
1,388,434 |
|
1,416,381 |
|
Vessels related to
capital leases, at cost, less accumulated depreciation |
1,213,748 |
|
1,044,838 |
|
Advances
on newbuilding contracts |
407,211 |
|
444,493 |
|
Total vessels and equipment |
3,009,393 |
|
2,905,712 |
|
Investment in and
advances to equity-accounted joint ventures |
1,087,877 |
|
1,094,596 |
|
Net investments in
direct financing leases |
482,946 |
|
486,106 |
|
Derivative assets |
18,459 |
|
6,172 |
|
Intangible assets –
net |
58,864 |
|
61,078 |
|
Goodwill – liquefied
gas segment |
35,631 |
|
35,631 |
|
Other
assets |
8,165 |
|
8,043 |
|
Total assets |
5,063,588 |
|
5,019,299 |
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
Current |
|
|
Accounts payable |
1,995 |
|
3,509 |
|
Accrued
liabilities |
119,404 |
|
45,757 |
|
Unearned revenue |
19,770 |
|
25,873 |
|
Current portion of
long-term debt |
524,166 |
|
552,404 |
|
Current obligations
related to capital leases |
82,652 |
|
106,946 |
|
In-process
contracts |
6,163 |
|
7,946 |
|
Current portion of
derivative liabilities |
62,586 |
|
79,139 |
|
Advances from
affiliates |
11,984 |
|
12,140 |
|
Total current liabilities |
828,720 |
|
833,714 |
|
Long-term debt |
1,235,722 |
|
1,245,588 |
|
Long-term obligations
related to capital leases |
1,018,416 |
|
904,603 |
|
Other long-term
liabilities |
43,669 |
|
58,174 |
|
Derivative
liabilities |
36,678 |
|
45,797 |
|
Total liabilities |
3,163,205 |
|
3,087,876 |
|
|
|
|
Equity |
|
|
Limited partners –
common units |
1,517,132 |
|
1,539,248 |
|
Limited partners –
preferred units |
285,159 |
|
285,159 |
|
General partner |
49,696 |
|
50,152 |
|
Accumulated other
comprehensive income |
5,870 |
|
4,479 |
|
Partners' equity |
1,857,857 |
|
1,879,038 |
|
Non-controlling interest |
42,526 |
|
52,385 |
|
Total
equity |
1,900,383 |
|
1,931,423 |
|
Total liabilities and total equity |
5,063,588 |
|
5,019,299 |
|
|
|
|
|
|
|
Teekay LNG
Partners L.P. |
Consolidated Statements of Cash Flows |
(in
thousands of U.S. Dollars) |
|
|
Three Months Ended |
|
March 31, |
March 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents
and restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net (loss)
income |
(18,559 |
) |
33,684 |
|
Non-cash items: |
|
|
Unrealized gain on non-designated derivative instruments |
(12,170 |
) |
(5,452 |
) |
Depreciation and amortization |
29,267 |
|
26,120 |
|
Write-down of vessels |
18,662 |
|
— |
|
Unrealized foreign currency exchange (gain) loss and other |
(3,661 |
) |
975 |
|
Equity
income |
(26,724 |
) |
(5,887 |
) |
Non-cash
item included in other (expense) income |
53,000 |
|
— |
|
Change in operating
assets and liabilities |
2,355 |
|
11,506 |
|
Expenditures for dry
docking |
(3,162 |
) |
(5,668 |
) |
Net operating cash flow |
39,008 |
|
55,278 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance
of long-term debt |
115,515 |
|
61,424 |
|
Scheduled repayments of
long-term debt |
(25,794 |
) |
(25,290 |
) |
Prepayments of
long-term debt |
(147,675 |
) |
(18,704 |
) |
Financing issuance
costs |
(2,775 |
) |
(585 |
) |
Proceeds from financing
related to sales and leaseback of vessels |
126,273 |
|
220,825 |
|
Scheduled repayments of
obligations related capital leases |
(13,506 |
) |
(13,485 |
) |
Cash distributions
paid |
(16,917 |
) |
(14,086 |
) |
Dividends paid to
non-controlling interest |
— |
|
(658 |
) |
Other |
— |
|
(571 |
) |
Net financing cash flow |
35,121 |
|
208,870 |
|
INVESTING
ACTIVITIES |
|
|
Capital contributions
to equity-accounted joint ventures |
(20,464 |
) |
(77,786 |
) |
Return of capital from
equity-accounted joint ventures |
— |
|
40,320 |
|
Proceeds from sale of
equity-accounted joint venture |
54,438 |
|
— |
|
Receipts from direct
financing leases |
2,367 |
|
5,156 |
|
Proceeds from sale of
vessels |
— |
|
20,580 |
|
Expenditures for
vessels and equipment |
(166,610 |
) |
(207,489 |
) |
Net investing cash flow |
(130,269 |
) |
(219,219 |
) |
|
|
|
(Decrease) increase in
cash, cash equivalents and restricted cash |
(56,140 |
) |
44,929 |
|
Cash,
cash equivalents and restricted cash, beginning of the period |
339,435 |
|
243,173 |
|
Cash, cash equivalents and restricted cash, end of the
period |
283,295 |
|
288,102 |
|
|
|
|
|
|
|
Teekay LNG Partners L.P. |
Appendix A - Reconciliation of Non-GAAP Financial Measures |
Adjusted Net Income |
(in thousands of U.S. Dollars) |
|
|
Three Months Ended |
|
March 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
Net (loss) income –
GAAP basis |
(18,559 |
) |
33,684 |
|
Less: Net loss (income)
attributable to non-controlling interests |
11,665 |
|
(4,627 |
) |
Net (loss) income attributable to the partners and
preferred unitholders |
(6,894 |
) |
29,057 |
|
Add (subtract) specific
items affecting net income: |
|
|
Write-down of vessels(1) |
18,662 |
|
— |
|
Restructuring charges(2) |
1,396 |
|
— |
|
Unrealized foreign currency exchange gains(3) |
(211 |
) |
(52 |
) |
Unrealized gains on non-designated and designated derivative
instruments and other items |
|
|
|
|
from
equity–accounted investees(4) |
(16,658 |
) |
(2,297 |
) |
Unrealized gains on non-designated derivative instruments(5) |
(12,170 |
) |
(5,452 |
) |
Interest
rate swaption agreements termination |
— |
|
(395 |
) |
Ineffective portion on qualifying cash flow hedging instruments
included in interest expense |
(740 |
) |
— |
|
Other
items(6) |
53,274 |
|
— |
|
Non-controlling interests’ share of items above(7) |
(14,601 |
) |
232 |
|
Total adjustments |
28,952 |
|
(7,964 |
) |
Adjusted net income attributable to the partners and
preferred unitholders |
22,058 |
|
21,093 |
|
|
|
|
|
|
(1) |
See
Note 1 to the Consolidated Statements of (Loss) Income included in
this release for further details. |
(2) |
See
Note 2 to the Consolidated Statements of (Loss) Income included in
this release for further details. |
(3) |
Unrealized foreign currency exchange gains primarily relate to the
Partnership’s revaluation of all foreign currency-denominated
monetary assets and liabilities based on the prevailing exchange
rate at the end of each reporting period and unrealized (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 5
to the Consolidated Statements of (Loss) Income included in this
release for further details. |
(4) |
Reflects the gain on sale by the Partnership of its investment in
the Excelsior Joint Venture (which owns one regasification unit),
unrealized gains due to changes in the mark-to-market value of
derivative instruments that are not designated as hedges for
accounting purposes, any ineffectiveness for derivative instruments
designated as hedges for accounting purposes, and write-down and
loss on sale of vessel within the Partnership’s equity-accounted
investments. See Note 3 to the Consolidated Statements of (Loss)
Income included in this release for further details. |
(5) |
Reflects the unrealized gains due to changes in the mark-to-market
value of derivative instruments that are not designated as hedges
for accounting purposes. See Note 4 to the Consolidated Statements
of (Loss) Income included in this release for further details. |
(6) |
Included in other items is the additional tax indemnification
guarantee liability, as described in Note 6 to the Consolidated
Statements of (Loss) Income included in this release, and deferred
income tax expense. |
(7) |
Items affecting net (loss) income include items from the
Partnership’s consolidated non-wholly-owned subsidiaries. The
specific items affecting net (loss) 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 (loss) income 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, except units outstanding and per
unit data) |
|
|
Three Months Ended |
|
March 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
|
|
|
Net (loss) income: |
(18,559 |
) |
33,684 |
|
Add: |
|
|
Additional tax indemnification guarantee liability(1) |
53,000 |
|
— |
|
Depreciation and amortization |
29,267 |
|
26,120 |
|
Partnership’s share of equity–accounted joint ventures' DCF net of
estimated |
|
|
|
|
maintenance capital expenditures(2) |
18,726 |
|
11,660 |
|
Write-down of vessels |
18,662 |
|
— |
|
Direct
finance lease payments received in excess of revenue recognized and
other |
|
|
|
|
adjustments |
2,887 |
|
5,227 |
|
Distributions relating to equity financing of new buildings |
2,421 |
|
1,707 |
|
|
|
|
Less: |
|
|
Unrealized foreign currency exchange loss (gain) |
(211 |
) |
(52 |
) |
Ineffective portion on qualifying cash flow hedging instruments
included in interest |
|
|
|
|
expense |
(740 |
) |
— |
|
Other
non-cash items |
(834 |
) |
(1,670 |
) |
Portion
of additional tax indemnification guarantee liability previously
recognized in |
|
|
|
|
DCF(1) |
(3,849 |
) |
— |
|
Distributions relating to preferred units |
(6,425 |
) |
(2,812 |
) |
Unrealized gain on non-designated derivative instruments |
(12,170 |
) |
(5,452 |
) |
Estimated
maintenance capital expenditures |
(14,907 |
) |
(12,628 |
) |
Equity
income |
(26,724 |
) |
(5,887 |
) |
Distributable Cash Flow before Non-controlling
interest |
40,544 |
|
49,897 |
|
Non-controlling
interests’ share of DCF before estimated maintenance capital
expenditures |
(5,203 |
) |
(6,670 |
) |
Distributable Cash Flow |
35,341 |
|
43,227 |
|
Amount of cash distributions attributable to the General
Partner |
(228 |
) |
(228 |
) |
Limited partners'
Distributable Cash Flow |
35,113 |
|
42,999 |
|
Weighted-average number
of common units outstanding |
79,687,499 |
|
79,590,153 |
|
Distributable Cash Flow per limited partner common
unit |
0.44 |
|
0.54 |
|
|
|
|
|
|
(1) |
See
Note 6 to the Consolidated Statements of (Loss) Income included in
this release for further details. The additional tax
indemnification guarantee liability relates to an up-front benefit
on the RasGas II LNG Carriers leasing arrangements that the Teekay
Nakilat Joint Venture initially received which is now expected to
be repaid to the lessor. From a DCF perspective, the Partnership's
application of its 70 percent share of the benefit related to the
RasGas II LNG Carriers leasing arrangements had the effect of
increasing DCF by a total of $3.8 million from the delivery of
these vessels up to March 31, 2018 on a cumulative basis. This was
a result of the Partnership adjusting its estimated maintenance
capital expenditures on the RasGas II LNG Carriers for the up-front
benefit it received and amortizing this benefit over the life of
the vessels. |
(2) |
The
estimated maintenance capital expenditures relating to the
Partnership’s share of equity-accounted joint ventures were $8.2
million and $7.7 million for the three months ended March 31, 2018
and 2017, respectively. |
|
Teekay LNG Partners L.P. |
Appendix C - Supplemental Segment Information |
(in thousands of U.S. Dollars) |
|
|
Three Months Ended March 31,
2018 |
|
(unaudited) |
|
Liquefied GasSegment |
ConventionalTanker Segment |
Total |
Voyage revenues |
105,049 |
|
10,257 |
|
115,306 |
|
Voyage expenses |
(2,808 |
) |
(2,993 |
) |
(5,801 |
) |
Vessel operating
expenses |
(24,688 |
) |
(3,779 |
) |
(28,467 |
) |
Depreciation and
amortization |
(27,221 |
) |
(2,046 |
) |
(29,267 |
) |
General and
administrative expenses |
(5,787 |
) |
(784 |
) |
(6,571 |
) |
Write-down of
vessels |
— |
|
(18,662 |
) |
(18,662 |
) |
Restructuring charges |
— |
|
(1,396 |
) |
(1,396 |
) |
Income
(loss) from vessel operations |
44,545 |
|
(19,403 |
) |
25,142 |
|
|
|
|
|
|
Three Months Ended March 31,
2017 |
|
(unaudited) |
|
Liquefied GasSegment |
ConventionalTanker Segment |
Total |
Voyage revenues |
88,947 |
|
12,233 |
|
101,180 |
|
Voyage expenses |
(346 |
) |
(1,091 |
) |
(1,437 |
) |
Vessel operating
expenses |
(18,665 |
) |
(4,723 |
) |
(23,388 |
) |
Depreciation and
amortization |
(23,220 |
) |
(2,900 |
) |
(26,120 |
) |
General and
administrative expenses |
(3,380 |
) |
(777 |
) |
(4,157 |
) |
Income from vessel operations |
43,336 |
|
2,742 |
|
46,078 |
|
|
|
|
|
|
|
|
|
Teekay LNG Partners L.P. |
Appendix D - Reconciliation of Non-GAAP Financial
Measures |
Cash Flow from Vessel Operations from Consolidated
Vessels |
(in thousands of U.S. Dollars) |
|
|
Three Months Ended March 31,
2018 |
|
(unaudited) |
|
Liquefied GasSegment |
ConventionalTanker Segment |
Total |
Income (loss) from
vessel operations (See Appendix C) |
44,545 |
|
(19,403 |
) |
25,142 |
|
Depreciation and
amortization |
27,221 |
|
2,046 |
|
29,267 |
|
Write-down of
vessels |
— |
|
18,662 |
|
18,662 |
|
Amortization of
in-process contracts included in voyage revenues |
(1,155 |
) |
(108 |
) |
(1,263 |
) |
Direct finance lease
payments received in excess of revenue recognized and |
|
|
|
|
|
|
other
adjustments |
2,887 |
|
— |
|
2,887 |
|
Realized gain on Toledo
Spirit derivative contract |
— |
|
309 |
|
309 |
|
Cash flow from vessel operations from consolidated vessels |
73,498 |
|
1,506 |
|
75,004 |
|
|
|
|
|
|
Three Months Ended March 31,
2017 |
|
(unaudited) |
|
Liquefied GasSegment |
ConventionalTanker Segment |
Total |
Income from vessel
operations (See Appendix C) |
43,336 |
|
2,742 |
|
46,078 |
|
Depreciation and
amortization |
23,220 |
|
2,900 |
|
26,120 |
|
Amortization of
in-process contracts included in voyage revenues |
— |
|
(278 |
) |
(278 |
) |
Direct finance lease
payments received in excess of revenue recognized |
5,227 |
|
— |
|
5,227 |
|
Realized gain on Toledo
Spirit derivative contract |
— |
|
15 |
|
15 |
|
Cash flow from vessel operations from consolidated vessels |
71,783 |
|
5,379 |
|
77,162 |
|
|
|
|
|
|
|
|
|
Teekay LNG
Partners L.P. |
Appendix E
- Reconciliation of Non-GAAP Financial Measures |
Cash Flow
from Vessel Operations from Equity-Accounted Vessels |
(in
thousands of U.S. Dollars) |
|
|
Three Months Ended |
|
March 31, 2018 |
March 31, 2017 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
|
100% |
Portion(1) |
100% |
Portion(1) |
Voyage revenues |
140,052 |
|
61,964 |
|
115,043 |
|
51,255 |
|
Voyage expenses |
(2,561 |
) |
(1,283 |
) |
(5,343 |
) |
(2,734 |
) |
Vessel operating
expenses and general and administrative |
|
|
|
|
|
|
|
|
expenses |
(47,642 |
) |
(21,622 |
) |
(40,580 |
) |
(18,788 |
) |
Depreciation and
amortization |
(25,438 |
) |
(12,728 |
) |
(25,828 |
) |
(12,909 |
) |
Loss on
sale of vessel |
(514 |
) |
(257 |
) |
— |
|
— |
|
Income from vessel
operations of equity-accounted vessels |
63,897 |
|
26,074 |
|
43,292 |
|
16,824 |
|
Other items, including
interest expense, realized and |
|
|
|
|
|
|
|
|
unrealized gain (loss) on derivative instruments |
(1,670 |
) |
(4,913 |
) |
(23,850 |
) |
(10,937 |
) |
Gain on
sale of equity-accounted investment (2) |
— |
|
5,563 |
|
— |
|
— |
|
Net
income / equity income of equity-accounted vessels |
62,227 |
|
26,724 |
|
19,442 |
|
5,887 |
|
|
|
|
|
|
Income from vessel
operations of equity-accounted vessels |
63,897 |
|
26,074 |
|
43,292 |
|
16,824 |
|
Depreciation and
amortization |
25,438 |
|
12,728 |
|
25,828 |
|
12,909 |
|
Loss on sale of
vessel |
514 |
|
257 |
|
— |
|
— |
|
Direct finance lease
payments received in excess of |
|
|
|
|
|
|
|
|
revenue
recognized |
12,519 |
|
4,488 |
|
9,426 |
|
3,421 |
|
Amortization of in-process revenue contracts |
(1,816 |
) |
(956 |
) |
(2,144 |
) |
(1,105 |
) |
Cash flow
from vessel operations from equity-accounted vessels |
100,552 |
|
42,591 |
|
76,402 |
|
32,049 |
|
|
|
|
|
|
|
|
|
|
(1) |
The
Partnership's equity-accounted vessels for the three months ended
March 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 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
vessels, including two newbuildings, as at March 31, 2018,
compared to three newbuildings, as at March 31, 2017; the
Partnership’s 30 percent ownership interest in two LNG carriers as
at March 31, 2018, compared to two LNG carrier newbuildings as
at March 31, 2017, and the Partnership's 20 percent ownership
interest in two LNG carrier newbuildings for Shell; the
Partnership’s 50 percent ownership interest in one ARC7 LNG carrier
and five ARC7 LNG carrier newbuildings in the joint venture between
the Partnership and China LNG Shipping (Holdings) Limited as at
March 31, 2018, compared to six ARC7 LNG carrier newbuildings
as at March 31, 2017; and the Partnership's 30 percent
ownership interest in Bahrain LNG W.L.L., which owns an LNG
receiving and regasification terminal under construction in
Bahrain. |
(2) |
On
January 31, 2018, the Partnership sold its 50% ownership interest
in the Excelsior Joint Venture, which resulted in gain of $5.6
million for the three months ended March 31, 2018. |
|
Teekay LNG
Partners L.P. |
Appendix F
- Summarized Financial Information of Equity-Accounted Joint
Ventures |
(in
thousands of U.S. Dollars) |
|
|
|
|
As at March 31, 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 |
347,037 |
|
150,364 |
|
295,148 |
|
128,004 |
|
Current portion of
derivative assets |
2,602 |
|
1,272 |
|
1,594 |
|
785 |
|
Other current
assets |
44,839 |
|
20,000 |
|
53,068 |
|
22,661 |
|
Vessels and equipment,
including vessels related to capitalleases |
2,072,741 |
|
1,056,977 |
|
2,202,418 |
|
1,133,804 |
|
Advances on newbuilding
contracts |
1,113,993 |
|
405,982 |
|
1,211,210 |
|
450,523 |
|
Net investments in
direct financing leases, current and non-current |
2,565,413 |
|
964,899 |
|
2,013,759 |
|
722,408 |
|
Derivative assets |
16,206 |
|
6,731 |
|
4,602 |
|
2,259 |
|
Other
non-current assets |
61,482 |
|
42,995 |
|
86,167 |
|
54,060 |
|
Total
assets |
6,224,313 |
|
2,649,220 |
|
5,867,966 |
|
2,514,504 |
|
|
|
|
|
|
Current portion of
long-term debt and obligations related tocapital leases |
168,143 |
|
74,442 |
|
162,915 |
|
73,975 |
|
Current portion of
derivative liabilities |
17,699 |
|
5,873 |
|
21,973 |
|
7,217 |
|
Other current
liabilities |
109,311 |
|
46,289 |
|
98,657 |
|
43,193 |
|
Long-term debt and
obligations related to capital leases |
3,379,032 |
|
1,378,528 |
|
3,023,713 |
|
1,231,433 |
|
Shareholders' loans,
current and non-current |
368,475 |
|
131,449 |
|
368,937 |
|
131,685 |
|
Derivative
liabilities |
56,992 |
|
20,027 |
|
73,454 |
|
24,235 |
|
Other long-term
liabilities |
70,021 |
|
36,184 |
|
77,297 |
|
39,855 |
|
Equity |
2,054,640 |
|
956,428 |
|
2,041,020 |
|
962,911 |
|
Total
liabilities and equity |
6,224,313 |
|
2,649,220 |
|
5,867,966 |
|
2,514,504 |
|
|
|
|
|
|
Investments in
equity-accounted joint ventures |
|
956,428 |
|
|
962,911 |
|
Advances
to equity-accounted joint ventures |
|
131,449 |
|
|
131,685 |
|
Investments in and advances to equity-accounted joint ventures |
|
1,087,877 |
|
|
1,094,596 |
|
|
|
|
|
|
|
|
(1) |
The
Partnership's equity-accounted vessels as at March 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 interests
in 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 as
at December 31, 2017; 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 vessels, including two newbuildings,
as at March 31, 2018, compared to 23 vessels owned and
in-chartered including three newbuildings, as at December 31,
2017; the Partnership’s 30 percent ownership interest in two LNG
carriers as at March 31, 2018, compared to two LNG carrier
newbuildings as at December 31, 2017, and the Partnership's 20
percent ownership interest in two LNG carrier newbuildings for
Shell; the Partnership’s 50 percent ownership interest in one ARC7
LNG carrier and five ARC7 LNG carrier newbuildings in the joint
venture between the Partnership and China LNG Shipping (Holdings)
Limited as at March 31, 2018, compared to six ARC7 LNG carrier
newbuildings as at December 31, 2017; and the Partnership's 30
percent ownership interest in Bahrain LNG W.L.L., 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
regarding: the effects of recent and future newbuilding deliveries
on the Partnership’s future cash flows and balance sheet leverage;
the timing of newbuilding vessel deliveries and the commencement of
related contracts; and potential tax indemnification liabilities
relating to the Teekay Nakilat Joint Venture. 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
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; the inability of charterers to make future
charter payments; the inability of the Partnership to renew or
replace long-term contracts on existing vessels; the Partnership’s
or the Partnership’s joint ventures’ ability to secure or draw on
financings for its vessels; the effects on the Teekay Nakilat Joint
Venture of HMRC's decision on tax indemnification liabilities and
determinations of the lessor under the RasGas II LNG Carriers'
leases; 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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