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 September 30,
2019.
Consolidated Financial Summary
|
Three Months Ended |
|
September 30, 2019 |
June 30, 2019 |
September 30, 2018 |
(in thousands of U.S. Dollars, except per unit
data) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL COMPARISON |
|
|
|
Voyage revenues |
149,655 |
|
153,060 |
|
123,336 |
|
Income from vessel
operations |
71,611 |
|
74,677 |
|
46,998 |
|
Equity income |
21,296 |
|
1,738 |
|
14,679 |
|
Net income attributable to the
partners and preferred unitholders |
47,368 |
|
16,435 |
|
25,950 |
|
Limited partners’ interest in
net income per common unit |
0.51 |
|
0.12 |
|
0.24 |
|
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
Adjusted net income
attributable to the partners and preferred unitholders(1) |
50,514 |
|
34,435 |
|
19,474 |
|
Limited partners’ interest in
adjusted net income per common unit |
0.55 |
|
0.35 |
|
0.16 |
|
Total Adjusted EBITDA(1) |
180,216 |
|
162,069 |
|
132,593 |
|
Distributable cash flow (DCF)(1) |
70,925 |
|
56,330 |
|
41,214 |
|
(1) These are non-GAAP financial measures.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used in
this release to the most directly comparable financial measures
under United States generally accepted accounting principles
(GAAP).
(2) Based on midpoint of 2020 and 2019
guidance ranges.
Third Quarter of 2019 Compared to Third Quarter
of 2018
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders for the
three months ended September 30, 2019, compared to the same
quarter in the prior year, were positively impacted by: earnings
from the nine liquefied natural gas (LNG) carrier newbuildings
which delivered into the Partnership’s consolidated fleet and
equity-accounted joint ventures between July 2018 and August 2019;
higher earnings from the Torben Spirit upon redeployment at a
higher charter rate that commenced in December 2018; higher
earnings from the Magellan Spirit, which was chartered-in from the
Partnership’s 52 percent-owned joint venture with Marubeni
Corporation (the MALT Joint Venture) commencing in September 2018;
higher earnings in the MALT Joint Venture from the commencements of
the Arwa Spirit and Marib Spirit one-year charter contracts at
higher rates in June and July 2019, respectively, and recognition
of drydock hire revenue for the Meridian Spirit; and higher
earnings from the Partnership's seven multi-gas carriers. These
increases were partially offset by lower earnings due to more
off-hire days for scheduled dry dockings and repairs during the
third quarter of 2019 for certain of the Partnership's LNG carriers
compared to the same quarter of the prior year.
In addition, GAAP net income attributable to the
partners and preferred unitholders was negatively impacted in the
three months ended September 30, 2019, compared to the same
quarter of the prior year, by various items, including
unrealized losses on non-designated derivative instruments in the
third quarter of 2019 compared to gains on non-designated
derivative instruments in the third quarter of 2018, partially
offset by a decrease in the write-down of vessels.
CEO Commentary
“During the third quarter of 2019, Teekay LNG
recorded its highest ever quarterly results with adjusted earnings
per common unit up almost 3.5x from the same period of the previous
year,” commented Mark Kremin, President and Chief Executive Officer
of Teekay Gas Group Ltd. “We expect Teekay LNG’s results will
continue to increase, as reflected in our increased and tightened
2019 guidance range and a new, higher 2020 guidance range issued
today. Based on this foundation of earnings growth expected in
2020, we intend to increase our distributions by 32 percent to
$1.00 per common unit per annum, starting with our first quarter of
2020 distribution payable in May 2020.” Mr. Kremin continued,
"I am also pleased to report that with the recent sale of our last
conventional tanker, Teekay LNG is now 100 percent focused on our
core business of transporting LNG and LPG."
“We are currently in the process of completing
the last of our recent phase of growth projects,” commented Mr.
Kremin. “We have made good progress and anticipate the start-up of
the Bahrain regasification terminal before the end of the year. In
August and early-November 2019, we delivered our fourth and fifth
ARC7 ice-breaking LNG carriers for the Yamal LNG project, which
immediately commenced their respective long-term charter contracts.
We expect the sixth ARC7 to deliver and commence its long-term
charter contract with Yamal in late-November 2019, which will mark
the successful completion of the $3.5 billion growth program we
commenced in 2013. With nearly all of our current growth projects
delivered and generating cash flows under long-term contracts, we
are moving from a phase of project execution to a period of
significant cash flow generation, which we believe will enable the
Partnership to allocate capital towards balance sheet delevering
and returning capital to unitholders.”
Revising 2019 Guidance Higher and Introducing
2020 Guidance
Today, the Partnership is providing the below
supplementary information relating to the outlook for the
Partnership’s estimated fiscal 2019 results, which have been
revised higher, and is introducing estimated fiscal 2020 results,
the majority of which are expected to be significantly higher than
estimated fiscal 2019 results primarily due to newbuilding
deliveries and higher charter rates earned from the vessels trading
on short-term contracts:
(in millions of U.S. Dollars except per unit data and
percentages) |
Revised Fiscal 2019E(2) |
Percentage Increase over Previous 2019
Guidance(3) |
Fiscal 2020E(2) |
Percentage Increase / (Decrease) from Revised 2019
Guidance(3) |
Adjusted net income
attributable to the partners and preferred unitholders(1) |
165 to 175 |
10% |
230 to 270 |
47% |
Limited partners' interest in
adjusted net income per common unit(1) |
$1.75 to $1.85 |
11% |
$2.60 to $3.10 |
58% |
Consolidated Adjusted
EBITDA(1) |
435 to 445 |
2% |
410 to 430 |
(5)% |
Total Adjusted EBITDA(1) |
685 to 695 |
2% |
750 to 780 |
11% |
(1) These are non-GAAP financial measures.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used in
this release to the most directly comparable financial measures
under GAAP. Each of these non-GAAP financial measures excludes
approximately $31 million of previously deferred revenue the
Partnership expects to receive upon the sale of the WilForce and
WilPride LNG carriers in late-2019 or early-2020.
(2) All estimates are as of the date
hereof, are approximations, are based on current information
(including the number of outstanding common units). Actual results
may differ materially from these estimates, and the Partnership
expressly disclaims any obligation to release publicly any updates
or revisions to any such estimates, including to reflect any change
in the Partnership’s expectations with respect thereto or any
change in events, conditions or circumstances on which any such
estimates are based.
(3) Based on midpoint of 2020 and 2019
guidance ranges.
Summary of Recent Events
In December 2018, the Board of Teekay LNG's
general partner approved a $100 million unit repurchase program.
Since that time, the Partnership has repurchased a total of 2.26
million common units, or approximately 2.8 percent of the
outstanding common units immediately prior to commencement of the
program, for a total cost of $28.9 million, representing an average
repurchase price of $12.78 per unit. Since early-August 2019,
Teekay LNG repurchased 816,672 units at an average price of $14.33
per unit, for a total cost of $11.7 million.
In August and November 2019, the Partnership
took delivery of the fourth and fifth 50 percent-owned ARC7 LNG
carrier newbuildings, respectively, the Vladimir Voronin and
Georgiy Ushakov, which immediately commenced their 26-year charter
contracts servicing the Yamal LNG project.
On September 25, 2019, the United States
Government, by an Executive Order of the Department of the
Treasury’s Office of Foreign Assets Control (OFAC), imposed
sanctions on COSCO Shipping Tanker (Dalian) Co., Ltd. (COSCO
Dalian). At the time, COSCO Dalian owned 50 percent of China LNG
Shipping (Holdings) Limited (CLNG). CLNG was not listed on the OFAC
Order as Specially Designated National or involved in any
sanctioned activity, but by virtue of being 50 percent-owned by
COSCO Dalian at the time, CLNG was designated as a “Blocked Person”
under OFAC's deeming rules. CLNG, in turn, owns a 50 percent
interest in Teekay LNG’s Yamal LNG joint venture (the Yamal LNG
Joint Venture), which owns five on-the-water ARC7 LNG carriers and
one ARC7 LNG carrier newbuilding. As a result of CLNG’s 50 percent
interest, the Yamal LNG Joint Venture at the time also qualified as
a “Blocked Person" under OFAC's deeming rules.
On October 21, 2019, the COSCO group completed
an ownership restructuring on arms-length terms pursuant to which
its 50 percent interest in CLNG was transferred from COSCO Dalian
to a non-sanctioned COSCO entity, which automatically resulted in
CLNG and the Yamal LNG Joint Venture no longer being classified as
a “Blocked Person” under OFAC's deeming rules. Teekay LNG does not
expect any material impact to the Partnership from these resolved
issues.
On October 16, 2019, the Partnership sold its
last remaining conventional tanker, the Alexander Spirit, for net
proceeds of $11.5 million.
Operating Results
The following table highlights certain financial
information for Teekay LNG’s three segments: the Liquefied Natural
Gas Segment, the Liquefied Petroleum Gas Segment and the
Conventional Tanker Segment (please refer to the “Teekay LNG’s
Fleet” section of this release below and Appendices D and E for
further details).
|
Three Months Ended |
|
September 30, 2019 |
September 30, 2018 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
|
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Voyage revenues |
137,212 |
|
10,846 |
|
1,597 |
|
149,655 |
|
111,909 |
|
6,279 |
|
5,148 |
|
123,336 |
|
Income (loss) from vessel
operations |
73,236 |
|
(1,124 |
) |
(501 |
) |
71,611 |
|
56,813 |
|
(5,232 |
) |
(4,583 |
) |
46,998 |
|
Equity income (loss) |
20,262 |
|
1,034 |
|
— |
|
21,296 |
|
15,953 |
|
(1,274 |
) |
— |
|
14,679 |
|
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
|
|
|
Consolidated Adjusted
EBITDA(i) |
109,556 |
|
867 |
|
292 |
|
110,715 |
|
87,889 |
|
(3,265 |
) |
128 |
|
84,752 |
|
Adjusted EBITDA from
equity-accounted vessels(i) |
59,646 |
|
9,855 |
|
— |
|
69,501 |
|
40,381 |
|
7,460 |
|
— |
|
47,841 |
|
Total
Adjusted EBITDA(i) |
169,202 |
|
10,722 |
|
292 |
|
180,216 |
|
128,270 |
|
4,195 |
|
128 |
|
132,593 |
|
(i) These are non-GAAP financial measures.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used in
this release to the most directly comparable financial measures
under GAAP.
Liquefied Natural Gas Segment
Income from vessel operations and Consolidated
Adjusted EBITDA for the liquefied natural gas segment for the three
months ended September 30, 2019, compared to the same quarter
of the prior year, were positively impacted primarily by: the
deliveries of four wholly-owned LNG carrier newbuildings (the
Megara, Bahrain Spirit, Sean Spirit and Yamal Spirit) between July
2018 and January 2019; higher earnings from the Magellan Spirit,
which was chartered-in from the Partnership’s 52 percent-owned MALT
Joint Venture commencing in September 2018; and higher earnings
from the Torben Spirit upon redeployment in December 2018 at a
higher charter rate. These increases were partially offset by an
increase in off-hire days in the third quarter of 2019 for the
Madrid Spirit due to a scheduled dry docking and repairs.
Equity income and Adjusted EBITDA from
equity-accounted vessels for the liquefied natural gas segment for
the three months ended September 30, 2019, compared to the
same quarter of the prior year, were positively impacted primarily
by: the deliveries of three ARC7 LNG carrier newbuildings between
September 2018 and August 2019 to the Partnership’s 50
percent-owned Yamal LNG Joint Venture; the deliveries of two LNG
carrier newbuildings between July 2018 and January 2019 to the
Partnership's 20 percent-owned joint venture with CLNG, CETS
Investment Management (HK) Co. Limited and BW LNG Investments Pte.
Ltd. (the Pan Union Joint Venture); and higher earnings in the MALT
Joint Venture from the commencements of the Arwa Spirit and Marib
Spirit one-year charter contracts at higher rates in June and July
2019, respectively, and recognition of drydock hire revenue for the
Meridian Spirit. These increases were partially offset by the
commencement of the time-charter in contract for the Bahrain Spirit
floating storage unit (FSU) in September 2018 in the Bahrain LNG
Joint Venture ahead of the commencement of operations of the LNG
receiving and regasification terminal in Bahrain. In addition, GAAP
equity income was negatively impacted by unrealized losses on
non-designated derivative instruments in the Partnership's
equity-accounted joint ventures in the third quarter of 2019
compared to gains on designated and non-designated derivative
instruments in the third quarter of 2018.
Liquefied Petroleum Gas Segment
Loss from vessel operations and Consolidated
Adjusted EBITDA for the liquefied petroleum gas segment for the
three months ended September 30, 2019, compared to the same
quarter of the prior year, were positively impacted by higher
earnings from the Partnership's seven multi-gas carriers, which
earned higher spot revenues during the third quarter of 2019.
Equity income (loss) and Adjusted EBITDA from
equity-accounted vessels for the liquefied petroleum gas segment
for the three months ended September 30, 2019, compared to the
same quarter of the prior year, were positively impacted by higher
charter rates earned and fewer off-hire days; partially offset by
more scheduled dry dockings in the Partnership’s 50/50 joint
venture with Exmar NV (the Exmar LPG Joint Venture).
Conventional Tanker Segment
Consolidated Adjusted EBITDA for the
conventional tanker segment for the three months ended
September 30, 2019, compared to the same quarter of the prior
year, remained comparable. Loss from vessel operations for the
conventional tanker segment for the three months ended
September 30, 2019, compared to the same quarter of the prior
year, was positively impacted by lower write-downs related to the
Alexander Spirit, European Spirit and African Spirit.
Teekay LNG's Fleet
The following table summarizes the Partnership’s
fleet as of November 1, 2019. The Partnership also owns a 30
percent interest in a regasification terminal under construction in
Bahrain.
|
Number of Vessels |
|
Owned and In-CharteredVessels(i) |
Newbuildings |
Total |
LNG Carrier
Fleet |
47(ii) |
2(iii) |
49 |
LPG/Multi-gas Carrier
Fleet |
30(iv) |
— |
30 |
Total |
77 |
2 |
79 |
(i) Includes vessels leased by the Partnership
from third parties and accounted for as finance leases. (ii) The
Partnership’s ownership interests in these vessels range from 20
percent to 100 percent.(iii) The Partnership’s ownership interest
in these newbuildings is 50 percent.(iv) The Partnership’s
ownership interests in these vessels range from 50 percent to 99
percent.
Liquidity
As of September 30, 2019, the Partnership
had total liquidity of $329.1 million (comprised of $142.9 million
in cash and cash equivalents and $186.2 million in undrawn credit
facilities).
Liquidity is expected to increase by
approximately $100 million upon the acquisition by Awilco LNG of
two of the Partnership's LNG carriers, the WillForce and WillPride,
which are subject to purchase obligations that are due by the end
of February 2020.
Investor and Analyst Meeting
Teekay Corporation (Teekay), Teekay LNG and
Teekay Tankers plan to host an investor and analyst meeting on
Thursday, November 14, 2019 at 8:30 a.m. (ET) with presentations
from the Senior Leadership of Teekay, Teekay LNG and Teekay
Tankers. A live webcast of the presentations will be available
to the public in advance of the event on Teekay’s
website, www.teekay.com. Please allow extra time prior to
the presentation to visit the site and download the necessary
software required to listen to the internet broadcast. A
recording of the webcast will be archived on the same
website following the live presentations.
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 and LPG services primarily under long-term, fee-based charter
contracts through its interests in 49 LNG carriers (including one
newbuilding), 23 mid-size LPG carriers, and seven multi-gas
carriers. The Partnership's ownership interests in these vessels
range from 20 to 100 percent. In addition, the Partnership owns a
30 percent interest in a regasification terminal. Teekay LNG
Partners is a publicly-traded master limited partnership formed by
Teekay Corporation (NYSE: TK) as part of its strategy to expand its
operations in the LNG and LPG shipping sectors.
Teekay LNG Partners’ common units and preferred
units trade on the New York Stock Exchange under the symbols “TGP”,
“TGP PR A” and “TGP PR B”, respectively.
For Investor Relationsenquiries
contact:
Ryan HamiltonTel: +1 (604) 609-2963Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the SEC. These non-GAAP financial measures which include Adjusted
Net Income Attributable to the Partners and Preferred Unitholders,
Distributable Cash Flow and Adjusted EBITDA, are intended to
provide additional information and should not be considered
substitutes for measures of performance prepared in accordance with
GAAP. In addition, these measures do not have standardized meanings
across companies, and may not be comparable to similar measures
presented by other companies. These non-GAAP measures are used by
management, and the Partnership believes that these supplementary
metrics assist investors and other users of its financial reports
in comparing financial and operating performance of the Partnership
across reporting periods and with other companies.
In 2018 and prior periods, the Partnership
reported Cash Flow from Vessel Operations (CFVO), as a non-GAAP
measure. In the first quarter of 2019, the Partnership made certain
changes to its non-GAAP financial measures to more closely align
with internal management reporting, annual reporting with the SEC
under Form 20-F and metrics used by certain investors. CFVO from
Consolidated Vessels and Total CFVO were replaced with Consolidated
Adjusted EBITDA and Total Adjusted EBITDA, respectively, for
current and comparative periods.
Non-GAAP Financial Measures
Adjusted EBITDA represents net income before
interest, taxes, and depreciation and amortization and is adjusted
to exclude certain items whose timing or amount cannot be
reasonably estimated in advance or that are not considered
representative of core operating performance. Such adjustments
include vessel write-downs, gains or losses on sale of vessels and
equity-accounted investments, unrealized gains or losses on
derivative instruments, foreign exchange gains or losses,
amortization of in-process contracts, adjustments for direct
financing leases to a cash basis, and certain other income or
expenses. Adjusted EBITDA also excludes realized gains or losses on
interest rate swaps as management, in assessing the Partnership's
performance, views these gains or losses as an element of interest
expense and realized gains or losses on derivative instruments
resulting from amendments or terminations of the underlying
instruments. Consolidated Adjusted EBITDA represents Adjusted
EBITDA from vessels that are consolidated on the Partnership's
financial statements. Adjusted EBITDA from Equity-Accounted Vessels
represents the Partnership's proportionate share of Adjusted EBITDA
from its equity-accounted vessels. The Partnership does not have
the unilateral ability to determine whether the cash generated by
its equity-accounted vessels is retained within the entity in which
the Partnership holds the equity-accounted investments or
distributed to the Partnership and other owners. In addition, the
Partnership does not control the timing of any such distributions
to the Partnership and other owners. Adjusted EBITDA is a non-GAAP
financial measure used by certain investors and management to
measure the operational performance of companies. Please refer to
Appendices C and E of this release for reconciliations of Adjusted
EBITDA to net income and equity income, respectively, which are the
most directly comparable GAAP measures reflected in the
Partnership’s consolidated financial statements.
Adjusted Net Income Attributable to the Partners
and Preferred Unitholders excludes items of income or loss from
GAAP net income that are typically excluded by securities analysts
in their published estimates of the Partnership’s financial
results. The Partnership believes that certain investors use this
information to evaluate the Partnership’s financial performance, as
does management. Please refer to Appendix A of this release for a
reconciliation of this non-GAAP financial measure to net income,
and refer to footnote (4) of the Consolidated Statements of Income
for a reconciliation of adjusted equity income to equity income,
the most directly comparable GAAP measure reflected in the
Partnership’s consolidated financial statements.
Distributable Cash Flow (DCF) represents GAAP
net income adjusted for write-down of vessels, depreciation and
amortization expense, deferred income tax and other non-cash items,
estimated maintenance capital expenditures, unrealized gains and
losses from non-designated derivative instruments, distributions
relating to equity financing of newbuilding installments,
distributions relating to preferred units, adjustments for direct
financing leases to a cash basis, unrealized foreign currency
exchange gains or losses and the Partnership’s proportionate share
of such items in its equity-accounted for investments. Maintenance
capital expenditures represent those capital expenditures required
to maintain over the long-term the operating capacity of, or the
revenue generated by, the Partnership’s capital assets. DCF is a
quantitative standard used in the publicly-traded partnership
investment community and by management to assist in evaluating
financial performance. Please refer to Appendix B of this release
for a reconciliation of this non-GAAP financial measure to net
income, the most directly comparable GAAP measure reflected in the
Partnership’s consolidated financial statements.
Teekay LNG Partners L.P.Consolidated Statements of Income(in
thousands of U.S. Dollars, except unit and per unit data)
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
2019 |
2019 |
2018 |
2019 |
2018 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Voyage revenues |
149,655 |
|
153,060 |
|
123,336 |
|
452,459 |
|
360,957 |
|
|
|
|
|
|
|
Voyage expenses |
(4,961 |
) |
(6,023 |
) |
(7,956 |
) |
(16,759 |
) |
(21,708 |
) |
Vessel operating
expenses(1) |
(27,321 |
) |
(27,457 |
) |
(26,021 |
) |
(80,879 |
) |
(87,207 |
) |
Time-charter hire expense |
(5,336 |
) |
(3,080 |
) |
(1,690 |
) |
(14,007 |
) |
(1,690 |
) |
Depreciation and
amortization |
(34,248 |
) |
(35,338 |
) |
(32,238 |
) |
(103,712 |
) |
(91,299 |
) |
General and administrative
expenses(1) |
(5,393 |
) |
(5,667 |
) |
(5,783 |
) |
(17,692 |
) |
(20,700 |
) |
Write-down of vessels(2) |
(785 |
) |
— |
|
(2,201 |
) |
(785 |
) |
(53,863 |
) |
Restructuring charges(3) |
— |
|
(818 |
) |
(449 |
) |
(2,976 |
) |
(1,845 |
) |
Income from vessel operations |
71,611 |
|
74,677 |
|
46,998 |
|
215,649 |
|
82,645 |
|
|
|
|
|
|
|
Equity income(4) |
21,296 |
|
1,738 |
|
14,679 |
|
28,612 |
|
52,597 |
|
Interest expense |
(40,574 |
) |
(41,018 |
) |
(35,875 |
) |
(123,809 |
) |
(88,752 |
) |
Interest income |
1,025 |
|
960 |
|
980 |
|
3,063 |
|
2,796 |
|
Realized and unrealized (loss)
gain on non-designated derivative instruments(5) |
(3,270 |
) |
(7,826 |
) |
2,515 |
|
(17,713 |
) |
14,818 |
|
Foreign currency exchange gain
(loss)(6) |
2,879 |
|
(7,243 |
) |
1,445 |
|
(5,095 |
) |
8,615 |
|
Other (expense) income(7) |
(1,174 |
) |
236 |
|
314 |
|
(687 |
) |
(51,918 |
) |
Net income before income tax expense |
51,793 |
|
21,524 |
|
31,056 |
|
100,020 |
|
20,801 |
|
Income tax expense |
(1,442 |
) |
(2,472 |
) |
(1,549 |
) |
(6,492 |
) |
(3,171 |
) |
Net income |
50,351 |
|
19,052 |
|
29,507 |
|
93,528 |
|
17,630 |
|
|
|
|
|
|
|
Non-controlling interest in
net income |
2,983 |
|
2,617 |
|
3,557 |
|
8,108 |
|
(4,160 |
) |
Preferred unitholders'
interest in net income |
6,426 |
|
6,425 |
|
6,425 |
|
19,276 |
|
19,276 |
|
General partner's interest in
net income |
820 |
|
200 |
|
391 |
|
1,324 |
|
51 |
|
Limited partners’ interest in
net income |
40,122 |
|
9,810 |
|
19,134 |
|
64,820 |
|
2,463 |
|
Limited partners' interest in
net income per common unit: |
|
|
|
|
|
• Basic |
0.51 |
|
0.12 |
0.24 |
|
0.83 |
|
0.03 |
|
• Diluted |
0.51 |
|
0.12 |
0.24 |
|
0.83 |
|
0.03 |
|
Weighted-average number of
common units outstanding: |
|
|
|
|
|
• Basic |
78,012,514 |
|
78,603,636 |
|
79,687,499 |
|
78,402,239 |
|
79,671,051 |
|
• Diluted |
78,106,770 |
|
78,685,537 |
|
79,859,471 |
|
78,488,331 |
|
79,832,978 |
|
Total
number of common units outstanding at end of period |
77,509,411 |
|
78,441,316 |
|
79,687,499 |
|
77,509,411 |
|
79,687,499 |
|
(1) The comparative figures for vessel operating
expenses and general and administrative expenses for the three and
nine months ended September 30, 2018 have been reclassified to
conform to the presentation adopted in the current period relating
to the classification of certain related party transactions. The
reclassification had the effect of decreasing vessel operating
expenses and increasing general and administrative expenses by $1.6
million and $2.9 million, respectively, for the three and nine
months ended September 30, 2018. There is no impact on income
from vessel operations or net income as a result of this
reclassification.
(2) In September 2019, the Partnership recorded
a write-down of $0.8 million for the three and nine months ended
September 30, 2019 on the Alexander Spirit, compared to a
write-down of $13.0 million for the same vessel during the nine
months ended September 30, 2018 to its then estimated fair value.
In June 2018, the Partnership wrote-down four of its wholly-owned
multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and
Cathinka Spirit) and recorded an impairment charge of $33.0 million
for the nine months ended September 30, 2018. In addition, for
the three and nine months ended September 30, 2018, the
Partnership recorded aggregate write-downs of $2.2 million and $7.9
million, respectively, on the European Spirit and African Spirit
conventional tankers.
(3) In January 2019 and February 2018, the
Toledo Spirit and Teide Spirit, respectively, were sold and as a
result of these sales, the Partnership recorded restructuring
charges of $0.8 million for the three months ended June 30,
2019, $0.5 million for the three months ended September 30, 2018,
and $3.0 million and $1.8 million for the nine months ended
September 30, 2019 and 2018, respectively, relating to
seafarer severance costs.
(4) The Partnership’s proportionate share of
items within equity income as identified in Appendix A of this
release is detailed in the table below. By excluding these items
from equity income, the Partnership believes the resulting adjusted
equity income is a normalized amount that can be used to better
evaluate the financial performance of the Partnership’s
equity-accounted investments. Adjusted equity income is a non-GAAP
financial measure.
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2019 |
2019 |
2018 |
2019 |
2018 |
Equity income |
21,296 |
|
1,738 |
|
14,679 |
|
28,612 |
|
52,597 |
|
Proportionate share of
unrealized loss (gain) on non-designated interest rate swaps |
5,150 |
|
5,102 |
|
(2,614 |
) |
14,612 |
|
(13,812 |
) |
Proportionate share of
ineffective portion of hedge-accounted interest rate swaps |
— |
|
— |
|
(105 |
) |
— |
|
(5,173 |
) |
Gain on sale of
equity-accounted investment |
— |
|
— |
|
— |
|
— |
|
(5,563 |
) |
Proportionate share of other items |
(77 |
) |
1,124 |
|
(185 |
) |
1,392 |
|
72 |
|
Equity
income adjusted for items in Appendix A |
26,369 |
|
7,964 |
|
11,775 |
|
44,616 |
|
28,121 |
|
(5) The realized (losses) gains on
non-designated derivative instruments relate to the amounts the
Partnership actually paid or received to settle non-designated
derivative instruments and the unrealized (losses) gains on
non-designated derivative instruments relate to the change in fair
value of such non-designated derivative instruments, as detailed in
the table below:
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2019 |
2019 |
2018 |
2019 |
2018 |
Realized (losses)
gains relating to: |
|
|
|
|
|
Interest rate swap agreements |
(2,621 |
) |
(2,392 |
) |
(3,062 |
) |
(7,398 |
) |
(11,850 |
) |
Interest rate swap agreements
termination |
— |
|
— |
|
(13,681 |
) |
— |
|
(13,681 |
) |
Toledo Spirit time-charter
derivative contract |
— |
|
— |
|
1,689 |
|
— |
|
2,148 |
|
|
(2,621 |
) |
(2,392 |
) |
(15,054 |
) |
(7,398 |
) |
(23,383 |
) |
Unrealized (losses)
gains relating to: |
|
|
|
|
|
Interest rate swap
agreements |
(215 |
) |
(5,333 |
) |
19,278 |
|
(9,740 |
) |
38,698 |
|
Foreign currency forward
contracts |
(434 |
) |
(101 |
) |
— |
|
(535 |
) |
— |
|
Interest rate swaption
agreements |
— |
|
— |
|
— |
|
— |
|
2 |
|
Toledo Spirit time-charter
derivative contract |
— |
|
— |
|
(1,709 |
) |
(40 |
) |
(499 |
) |
|
(649 |
) |
(5,434 |
) |
17,569 |
|
(10,315 |
) |
38,201 |
|
Total realized and unrealized (losses) gains on non-designated
derivative instruments |
(3,270 |
) |
(7,826 |
) |
2,515 |
|
(17,713 |
) |
14,818 |
|
(6) For accounting purposes, the Partnership is
required to revalue all foreign currency-denominated monetary
assets and liabilities based on the prevailing exchange rates at
the end of each reporting period. This revaluation does not affect
the Partnership’s cash flows or the calculation of distributable
cash flow, but results in the recognition of unrealized foreign
currency translation gains or losses in the Consolidated Statements
of Income.
Foreign currency exchange gain (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 Krone (NOK) denominated unsecured bonds.
Foreign currency exchange gain (loss) also includes unrealized
(losses) gains relating to the change in fair value of such
derivative instruments and unrealized gains (losses) on the
revaluation of the NOK bonds as detailed in the table below:
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2019 |
2019 |
2018 |
2019 |
2018 |
Realized losses on cross-currency swaps |
(1,431 |
) |
(1,087 |
) |
(1,744 |
) |
(3,952 |
) |
(4,926 |
) |
Realized losses on
cross-currency swaps termination |
— |
|
— |
|
(42,271 |
) |
— |
|
(42,271 |
) |
Realized gains on repurchase
of NOK bonds |
— |
|
— |
|
42,271 |
|
— |
|
42,271 |
|
Unrealized (losses) gains on
cross currency swaps |
(23,759 |
) |
(139 |
) |
43,966 |
|
(25,818 |
) |
49,734 |
|
Unrealized gains (losses) on revaluation of NOK bonds |
22,167 |
|
(3,901 |
) |
(41,549 |
) |
17,687 |
|
(44,184 |
) |
(7) Other (expense) income for the three and
nine months ended September 30, 2019 included $1.4 million loss
recognized relating to the Torben Spirit sale-leaseback refinancing
completed in September 2019. In addition, other (expense) income
for the nine months ended September 30, 2019 included a $53.0
million expense for the recognition of an additional tax
indemnification guarantee liability recorded within the
consolidated Teekay Nakilat Corporation (the RasGas II Joint
Venture), which was settled in 2018.
Teekay LNG Partners L.P.Consolidated Balance Sheets(in thousands
of U.S. Dollars)
|
As at September 30, |
As at June 30, |
As at December 31, |
|
2019 |
2019 |
2018 |
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
Current |
|
|
|
Cash and cash equivalents |
142,860 |
|
124,880 |
|
149,014 |
|
Restricted cash – current |
58,109 |
|
48,869 |
|
38,329 |
|
Accounts receivable |
14,649 |
|
25,439 |
|
20,795 |
|
Prepaid expenses |
9,383 |
|
8,087 |
|
8,076 |
|
Current portion of derivative
assets |
464 |
|
— |
|
835 |
|
Current portion of net
investments in direct financing leases |
13,365 |
|
13,082 |
|
12,635 |
|
Current portion of advances to
equity-accounted joint ventures |
79,108 |
|
79,108 |
|
79,108 |
|
Advances to affiliates |
17,471 |
|
22,831 |
|
8,229 |
|
Vessel held for sale |
11,515 |
|
12,300 |
|
— |
|
Other current assets |
238 |
|
238 |
|
2,306 |
|
Total current assets |
347,162 |
|
334,834 |
|
319,327 |
|
|
|
|
|
Restricted cash –
long-term |
33,562 |
|
31,439 |
|
35,521 |
|
|
|
|
|
Vessels and
equipment |
|
|
|
At cost, less accumulated
depreciation |
1,604,581 |
|
1,616,029 |
|
1,657,338 |
|
Operating lease right-of-use
asset |
37,431 |
|
40,666 |
|
— |
|
Vessels related to finance
leases, at cost, less accumulated depreciation |
1,698,545 |
|
1,704,908 |
|
1,585,243 |
|
Advances on newbuilding
contracts |
— |
|
— |
|
86,942 |
|
Total vessels and equipment |
3,340,557 |
|
3,361,603 |
|
3,329,523 |
|
Investments in and advances to
equity-accounted joint ventures |
1,017,994 |
|
994,880 |
|
1,037,025 |
|
Net investments in direct
financing leases |
548,072 |
|
551,603 |
|
562,528 |
|
Other assets |
11,960 |
|
12,204 |
|
11,432 |
|
Derivative assets |
301 |
|
— |
|
2,362 |
|
Intangible assets – net |
45,580 |
|
47,794 |
|
52,222 |
|
Goodwill |
34,841 |
|
34,841 |
|
34,841 |
|
Total assets |
5,380,029 |
|
5,369,198 |
|
5,384,781 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current |
|
|
|
Accounts payable |
2,426 |
|
1,169 |
|
3,830 |
|
Accrued liabilities |
78,701 |
|
72,241 |
|
74,753 |
|
Unearned revenue |
25,732 |
|
24,573 |
|
30,108 |
|
Current portion of long-term
debt |
390,569 |
|
402,513 |
|
135,901 |
|
Current obligations related to
finance leases |
69,661 |
|
65,525 |
|
81,219 |
|
Current portion of operating
lease liabilities |
13,252 |
|
13,098 |
|
— |
|
Current portion of derivative
liabilities |
37,523 |
|
27,805 |
|
11,604 |
|
Advances from affiliates |
8,861 |
|
15,655 |
|
14,731 |
|
Total current liabilities |
626,725 |
|
622,579 |
|
352,146 |
|
Long-term debt |
1,437,282 |
|
1,465,155 |
|
1,833,875 |
|
Long-term obligations related
to finance leases |
1,358,485 |
|
1,334,271 |
|
1,217,337 |
|
Long-term operating lease
liabilities |
24,179 |
|
27,568 |
|
— |
|
Other long-term
liabilities |
46,180 |
|
46,171 |
|
43,788 |
|
Derivative liabilities |
72,466 |
|
54,767 |
|
55,038 |
|
Total liabilities |
3,565,317 |
|
3,550,511 |
|
3,502,184 |
|
Equity |
|
|
|
Limited partners – common
units |
1,497,544 |
|
1,485,516 |
|
1,496,107 |
|
Limited partners – preferred
units |
285,159 |
|
285,159 |
|
285,159 |
|
General partner |
49,303 |
|
49,056 |
|
49,271 |
|
Accumulated other comprehensive (loss) income |
(71,757 |
) |
(53,232 |
) |
2,717 |
|
Partners' equity |
1,760,249 |
|
1,766,499 |
|
1,833,254 |
|
Non-controlling interest |
54,463 |
|
52,188 |
|
49,343 |
|
Total
equity |
1,814,712 |
|
1,818,687 |
|
1,882,597 |
|
Total liabilities and total equity |
5,380,029 |
|
5,369,198 |
|
5,384,781 |
|
Teekay LNG Partners L.P.Consolidated Statements of Cash Flows(in
thousands of U.S. Dollars)
|
Nine Months Ended |
|
September 30, |
September 30, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net income |
93,528 |
|
17,630 |
|
Non-cash items: |
|
|
Unrealized loss (gain) on non-designated derivative
instruments |
10,315 |
|
(38,201 |
) |
Depreciation and amortization |
103,712 |
|
91,299 |
|
Write-down of vessels |
785 |
|
53,863 |
|
Unrealized foreign currency exchange gain including the
effect of the termination of cross currency swaps |
(1,213 |
) |
(12,313 |
) |
Equity income, net of dividends received of $25,374 (2018 -
$11,583) |
(3,238 |
) |
(41,014 |
) |
Ineffective portion on qualifying cash flow hedging
instruments included in interest expense |
— |
|
(740 |
) |
Amortization of deferred financing issuance costs included
in interest expense |
6,722 |
|
4,620 |
|
Other non-cash items |
6,173 |
|
(9,881 |
) |
Change in non-cash operating
assets and liabilities |
(15,227 |
) |
3,422 |
|
Receipts from direct financing
leases |
9,242 |
|
— |
|
Expenditures for dry
docking |
(8,836 |
) |
(10,458 |
) |
Net operating cash flow |
201,963 |
|
58,227 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance of
long-term debt |
158,924 |
|
685,547 |
|
Scheduled repayments of
long-term debt |
(95,730 |
) |
(173,488 |
) |
Prepayments of long-term
debt |
(183,787 |
) |
(440,820 |
) |
Financing issuance costs |
(989 |
) |
(8,534 |
) |
Proceeds from financing
related to sales and leaseback of vessels |
317,806 |
|
370,050 |
|
Scheduled repayments of
obligations related to finance leases |
(54,484 |
) |
(45,281 |
) |
Prepayment of obligations
related to finance leases |
(111,617 |
) |
— |
|
Repurchase of common
units |
(25,729 |
) |
— |
|
Cash distributions paid |
(60,926 |
) |
(52,535 |
) |
Dividends paid to non-controlling interest |
(90 |
) |
(1,290 |
) |
Net financing cash flow |
(56,622 |
) |
333,649 |
|
INVESTING
ACTIVITIES |
|
|
Expenditures for vessels and
equipment |
(91,503 |
) |
(559,172 |
) |
Capital contributions and
advances to equity-accounted joint ventures |
(42,171 |
) |
(33,496 |
) |
Return of capital and
repayment of advances from equity-accounted joint ventures |
— |
|
5,000 |
|
Proceeds from sale of
equity-accounted joint venture |
— |
|
54,438 |
|
Receipts from direct financing
leases |
— |
|
8,361 |
|
Net investing cash flow |
(133,674 |
) |
(524,869 |
) |
|
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash |
11,667 |
|
(132,993 |
) |
Cash,
cash equivalents and restricted cash, beginning of the period |
222,864 |
|
339,435 |
|
Cash, cash equivalents and restricted cash, end of the
period |
234,531 |
|
206,442 |
|
Teekay LNG Partners L.P.Appendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Income(in thousands of U.S.
Dollars)
|
Three Months Ended |
September 30, |
2019 |
2018 |
(unaudited) |
(unaudited) |
Net income – GAAP basis |
50,351 |
|
29,507 |
|
Less: Net income attributable
to non-controlling interests |
(2,983 |
) |
(3,557 |
) |
Net income attributable to the partners and preferred
unitholders |
47,368 |
|
25,950 |
|
Add (subtract) specific items
affecting net income: |
|
|
Write-down of vessels(1) |
785 |
|
2,201 |
|
Restructuring charges(2) |
— |
|
449 |
|
Unrealized foreign currency exchange gains(3) |
(4,607 |
) |
(3,019 |
) |
Unrealized losses (gains) on non-designated and designated
derivative instruments and other items from equity-accounted
investees(4) |
5,073 |
|
(2,904 |
) |
Unrealized losses (gains) on non-designated derivative
instruments(5) |
649 |
|
(17,569 |
) |
Realized loss on interest rate swap termination |
— |
|
13,681 |
|
Other items |
1,417 |
|
396 |
|
Non-controlling interests’ share of items above(6) |
(171 |
) |
289 |
|
Total adjustments |
3,146 |
|
(6,476 |
) |
Adjusted net income attributable to the partners and
preferred unitholders |
50,514 |
|
19,474 |
|
|
|
|
Preferred unitholders'
interest in adjusted net income |
6,426 |
|
6,425 |
|
General partner's interest in
adjusted net income |
882 |
|
261 |
|
Limited partners’ interest in
adjusted net income |
43,206 |
|
12,788 |
|
Limited partners’ interest in
adjusted net income per common unit, basic |
0.55 |
|
0.16 |
|
Weighted-average number of
common units outstanding, basic |
78,012,514 |
|
79,687,499 |
|
(1) See Note 2 to the Consolidated Statements of
Income included in this release for further details.
(2) See Note 3 to the Consolidated Statements of
Income included in this release for further details.
(3) Unrealized foreign currency exchange gains
primarily relate to the Partnership’s revaluation of all foreign
currency-denominated monetary assets and liabilities based on the
prevailing exchange rate at the end of each reporting period and
unrealized (gains) losses on the cross currency swaps economically
hedging the Partnership’s NOK bonds. This amount excludes the
realized losses relating to the cross currency swaps for the NOK
bonds. See Note 6 to the Consolidated Statements of Income included
in this release for further details.
(4) Reflects the unrealized losses (gains) due
to changes in the mark-to-market value of derivative instruments
that are not designated as hedges for accounting purposes. See Note
4 to the Consolidated Statements of Income included in this release
for further details.
(5) Reflects the unrealized losses (gains) due
to changes in the mark-to-market value of derivative instruments
that are not designated as hedges for accounting purposes. See Note
5 to the Consolidated Statements of Income included in this release
for further details.
(6) Items affecting net income include items
from the Partnership’s consolidated non-wholly-owned subsidiaries.
The specific items affecting net income are analyzed to determine
whether any of the amounts originated from a consolidated
non-wholly-owned subsidiary. Each amount that originates from a
consolidated non-wholly-owned subsidiary is multiplied by the
non-controlling interests’ percentage share in this subsidiary to
arrive at the non-controlling interests’ share of the amount. The
amount identified as “non-controlling interests’ share of items
above” in the table above is the cumulative amount of the
non-controlling interests’ proportionate share of the other
specific items affecting net income listed in the table.
Teekay LNG Partners L.P.Appendix B - Reconciliation of Non-GAAP
Financial MeasuresDistributable Cash Flow (DCF)(in thousands of
U.S. Dollars, except units outstanding and per unit data)
|
Three Months Ended |
September 30, |
2019 |
2018 |
(unaudited) |
(unaudited) |
|
|
|
|
Net income: |
50,351 |
|
29,507 |
|
Add: |
|
|
Depreciation and amortization |
34,248 |
|
32,238 |
|
Partnership’s share of equity-accounted joint ventures' DCF net of
estimated maintenance capital expenditures(1) |
34,319 |
|
19,599 |
|
Direct finance lease payments received in excess of revenue
recognized and other adjustments |
4,071 |
|
2,823 |
|
Distributions relating to equity financing of newbuildings |
1,012 |
|
2,340 |
|
Deferred income tax and other non-cash items |
801 |
|
3,011 |
|
Write-down of vessels |
785 |
|
2,201 |
|
Unrealized losses (gains) on non-designated derivative
instruments |
649 |
|
(17,569 |
) |
Realized loss on interest rate swap termination |
— |
|
13,681 |
|
Less: |
|
|
Unrealized foreign currency exchange gains |
(4,607 |
) |
(3,019 |
) |
Distributions relating to preferred units |
(6,426 |
) |
(6,425 |
) |
Estimated maintenance capital expenditures |
(17,562 |
) |
(16,140 |
) |
Equity income |
(21,296 |
) |
(14,679 |
) |
Distributable Cash Flow before non-controlling
interest |
76,345 |
|
47,568 |
|
Non-controlling interests’ share of DCF before estimated
maintenance capital expenditures |
(5,420 |
) |
(6,354 |
) |
Distributable Cash Flow |
70,925 |
|
41,214 |
|
Amount
of cash distributions attributable to the General Partner |
(301 |
) |
(228 |
) |
Limited
partners' Distributable Cash Flow |
70,624 |
|
40,986 |
|
Weighted-average number of common units outstanding, basic |
78,012,514 |
|
79,687,499 |
|
Distributable Cash Flow per limited partner common
unit |
0.91 |
|
0.51 |
|
(1) The estimated maintenance capital
expenditures relating to the Partnership’s share of
equity-accounted joint ventures were $11.8 million and $9.6 million
for the three months ended September 30, 2019 and 2018,
respectively.
Teekay LNG Partners L.P.Appendix C - Reconciliation of Non-GAAP
Financial MeasuresTotal Adjusted EBITDA(in thousands of U.S.
Dollars)
|
Three Months Ended |
September 30, |
2019 |
2018 |
(unaudited) |
(unaudited) |
Net income |
50,351 |
|
29,507 |
|
Depreciation and amortization |
34,248 |
|
32,238 |
|
Interest expense, net of interest income |
39,549 |
|
34,895 |
|
Income tax expense |
1,442 |
|
1,549 |
|
EBITDA |
125,590 |
|
98,189 |
|
|
|
|
Add (subtract) specific income
statement items affecting EBITDA: |
|
|
Foreign currency exchange gain |
(2,879 |
) |
(1,445 |
) |
Other expense (income) – net |
1,174 |
|
(314 |
) |
Equity income |
(21,296 |
) |
(14,679 |
) |
Realized and unrealized loss (gain) on derivative instruments |
3,270 |
|
(2,515 |
) |
Write-down of vessels |
785 |
|
2,201 |
|
Direct finance lease payments received in excess of revenue
recognized and other adjustments |
4,071 |
|
2,823 |
|
Amortization of in-process contracts included in voyage
revenues |
— |
|
(1,197 |
) |
Realized gain on Toledo Spirit derivative contract |
— |
|
1,689 |
|
Consolidated adjusted
EBITDA |
110,715 |
|
84,752 |
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
69,501 |
|
47,841 |
|
Total Adjusted EBITDA |
180,216 |
|
132,593 |
|
Teekay LNG Partners L.P.Appendix D - Reconciliation of Non-GAAP
Financial MeasuresConsolidated Adjusted EBITDA by Segment(in
thousands of U.S. Dollars)
|
Three Months Ended September 30, 2019 |
|
(unaudited) |
|
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
Voyage revenues |
137,212 |
|
10,846 |
|
1,597 |
|
149,655 |
|
Voyage recoveries
(expenses) |
286 |
|
(4,778 |
) |
(469 |
) |
(4,961 |
) |
Vessel operating expenses |
(21,890 |
) |
(4,804 |
) |
(627 |
) |
(27,321 |
) |
Time-charter hire expense |
(5,336 |
) |
— |
|
— |
|
(5,336 |
) |
Depreciation and
amortization |
(32,249 |
) |
(1,991 |
) |
(8 |
) |
(34,248 |
) |
General and administrative
expenses |
(4,787 |
) |
(397 |
) |
(209 |
) |
(5,393 |
) |
Write-down of vessels |
— |
|
— |
|
(785 |
) |
(785 |
) |
Income (loss) from vessel operations |
73,236 |
|
(1,124 |
) |
(501 |
) |
71,611 |
|
Depreciation and
amortization |
32,249 |
|
1,991 |
|
8 |
|
34,248 |
|
Write-down of vessels |
— |
|
— |
|
785 |
|
785 |
|
Direct finance lease payments
received in excess of revenue recognized and other adjustments |
4,071 |
|
— |
|
— |
|
4,071 |
|
Consolidated Adjusted EBITDA |
109,556 |
|
867 |
|
292 |
|
110,715 |
|
|
|
|
|
|
|
Three Months Ended September 30, 2018 |
|
(unaudited) |
|
LiquefiedNatural Gas Segment |
Liquefied Petroleum Gas Segment |
Conventional Tanker Segment |
Total |
Voyage revenues |
111,909 |
|
6,279 |
|
5,148 |
|
123,336 |
|
Voyage expenses |
(734 |
) |
(4,997 |
) |
(2,225 |
) |
(7,956 |
) |
Vessel operating expenses |
(17,912 |
) |
(4,393 |
) |
(3,716 |
) |
(26,021 |
) |
Time-charter hire expense |
(1,690 |
) |
— |
|
— |
|
(1,690 |
) |
Depreciation and
amortization |
(29,342 |
) |
(1,967 |
) |
(929 |
) |
(32,238 |
) |
General and administrative
expenses |
(5,418 |
) |
(154 |
) |
(211 |
) |
(5,783 |
) |
Write-down of vessels |
— |
|
— |
|
(2,201 |
) |
(2,201 |
) |
Restructuring charges |
— |
|
— |
|
(449 |
) |
(449 |
) |
Income
(loss) from vessel operations |
56,813 |
|
(5,232 |
) |
(4,583 |
) |
46,998 |
|
Depreciation and
amortization |
29,342 |
|
1,967 |
|
929 |
|
32,238 |
|
Write-down of vessels |
— |
|
— |
|
2,201 |
|
2,201 |
|
Amortization of in-process
contracts included in voyage revenues |
(1,089 |
) |
— |
|
(108 |
) |
(1,197 |
) |
Direct finance lease payments
received in excess of revenue recognized and other adjustments |
2,823 |
|
— |
|
— |
|
2,823 |
|
Realized gain on Toledo Spirit
derivative contract |
— |
|
— |
|
1,689 |
|
1,689 |
|
Consolidated Adjusted EBITDA |
87,889 |
|
(3,265 |
) |
128 |
|
84,752 |
|
Teekay LNG Partners L.P.Appendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA from Equity-Accounted Vessels(in
thousands of U.S. Dollars)
|
Three Months Ended |
|
September 30, 2019 |
September 30, 2018 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
|
Portion(1) |
100% |
|
Portion(1) |
Voyage revenues |
205,727 |
|
90,479 |
|
159,337 |
|
68,693 |
|
Voyage expenses |
(1,858 |
) |
(928 |
) |
(3,143 |
) |
(1,572 |
) |
Vessel operating expenses,
time-charter hire expense and general and administrative
expenses |
(57,786 |
) |
(25,564 |
) |
(50,914 |
) |
(22,626 |
) |
Depreciation and
amortization |
(28,891 |
) |
(13,962 |
) |
(25,839 |
) |
(12,860 |
) |
Income from vessel operations of equity-accounted vessels |
117,192 |
|
50,025 |
|
79,441 |
|
31,635 |
|
Net interest expense |
(56,628 |
) |
(23,221 |
) |
(42,993 |
) |
(18,023 |
) |
Income tax expense |
(32 |
) |
(16 |
) |
(174 |
) |
(78 |
) |
Other items including realized
and unrealized (losses) gains on derivative instruments |
(18,270 |
) |
(5,492 |
) |
4,122 |
|
1,145 |
|
Net income / equity income of equity-accounted vessels |
42,262 |
|
21,296 |
|
40,396 |
|
14,679 |
|
Net income / equity income of equity-accounted LNG vessels |
40,032 |
|
20,262 |
|
42,782 |
|
15,953 |
|
Net
income (loss) / equity income (loss) of equity-accounted LPG
vessels |
2,230 |
|
1,034 |
|
(2,386 |
) |
(1,274 |
) |
|
|
|
|
|
Net income / equity income of
equity-accounted vessels |
42,262 |
|
21,296 |
|
40,396 |
|
14,679 |
|
Depreciation and amortization |
28,891 |
|
13,962 |
|
25,839 |
|
12,860 |
|
Net interest expense |
56,628 |
|
23,221 |
|
42,993 |
|
18,023 |
|
Income tax expense |
32 |
|
16 |
|
174 |
|
78 |
|
EBITDA from equity-accounted
vessels |
127,813 |
|
58,495 |
|
109,402 |
|
45,640 |
|
|
|
|
|
|
Add (subtract) specific income
statement items affecting EBITDA: |
|
|
|
|
Other items including realized and unrealized losses (gains) on
derivative instruments |
18,270 |
|
5,492 |
|
(4,122 |
) |
(1,145 |
) |
Direct finance lease payments received in excess of revenue
recognized |
17,701 |
|
6,470 |
|
11,711 |
|
4,310 |
|
Amortization of in-process contracts |
(1,758 |
) |
(956 |
) |
(1,800 |
) |
(964 |
) |
Adjusted EBITDA from equity-accounted vessels |
162,026 |
|
69,501 |
|
115,191 |
|
47,841 |
|
Adjusted EBITDA from
equity-accounted LNG vessels |
142,311 |
|
59,646 |
|
100,270 |
|
40,381 |
|
Adjusted EBITDA from equity-accounted LPG vessels |
19,715 |
|
9,855 |
|
14,921 |
|
7,460 |
|
(1) The Partnership's equity-accounted vessels
for the three months ended September 30, 2019 and 2018
include: the Partnership’s 40 percent ownership interest in Teekay
Nakilat (III) Corporation, which owns four LNG carriers; the
Partnership’s 49 percent ownership interest in the Partnership’s
joint venture with Exmar NV (the Excalibur Joint Venture), which
owns one LNG carrier; the Partnership’s 33 percent ownership
interest in four LNG carriers servicing the Angola LNG project; the
Partnership’s 52 percent ownership interest in the Malt Joint
Venture, which owns six LNG carriers; the Partnership’s 50 percent
ownership interest in Exmar LPG BVBA, which owns and in-charters 22
LPG carriers; the Partnership’s ownership interest ranging from 20
to 30 percent in four LNG carriers as at September 30, 2019
for Shell, compared to three LNG carriers and one LNG carrier
newbuilding as at September 30, 2018; the Partnership’s 50
percent ownership interest in four ARC7 LNG carriers and two ARC7
LNG carrier newbuildings in the Yamal LNG Joint Venture as at
September 30, 2019, compared to two ARC7 LNG carriers and four
ARC7 LNG carrier newbuildings as at September 30, 2018; and
the Partnership's 30 percent ownership interest in the Bahrain LNG
Joint Venture, which owns an LNG receiving and regasification
terminal under construction in Bahrain.
Teekay LNG Partners L.P. Appendix F - Summarized Financial
Information of Equity-Accounted Joint Ventures(in thousands of U.S.
Dollars)
|
As at September 30, 2019 |
As at December 31, 2018 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
|
Portion(1) |
100% |
|
Portion(1) |
Cash and restricted cash, current and non-current |
503,438 |
|
210,985 |
|
388,820 |
|
164,247 |
|
Other current assets |
61,721 |
|
27,099 |
|
91,264 |
|
33,354 |
|
Vessels and equipment,
including vessels related to finance leases and operating lease
right-of-use assets |
2,307,530 |
|
1,133,961 |
|
2,327,971 |
|
1,141,364 |
|
Advances on newbuilding
contracts |
1,088,690 |
|
390,599 |
|
1,321,284 |
|
494,486 |
|
Net investments in sales-type
and direct financing leases, current and non-current |
3,938,387 |
|
1,526,559 |
|
3,089,375 |
|
1,163,980 |
|
Other
non-current assets |
51,537 |
|
40,599 |
|
61,285 |
|
41,667 |
|
Total
assets |
7,951,303 |
|
3,329,802 |
|
7,279,999 |
|
3,039,098 |
|
|
|
|
|
|
Current portion of long-term
debt and obligations related to finance leases and operating
leases |
291,321 |
|
125,860 |
|
284,150 |
|
125,984 |
|
Current portion of derivative
liabilities |
29,038 |
|
10,942 |
|
12,695 |
|
4,420 |
|
Other current liabilities |
151,207 |
|
65,755 |
|
127,266 |
|
53,874 |
|
Long-term debt and obligations
related to finance leases and operating leases |
4,753,816 |
|
1,909,508 |
|
4,202,745 |
|
1,680,986 |
|
Shareholders' loans, current
and non-current |
368,089 |
|
131,497 |
|
367,475 |
|
131,386 |
|
Derivative liabilities |
213,858 |
|
87,470 |
|
61,814 |
|
23,149 |
|
Other long-term
liabilities |
65,838 |
|
33,165 |
|
67,793 |
|
34,552 |
|
Equity |
2,078,136 |
|
965,605 |
|
2,156,061 |
|
984,747 |
|
Total liabilities and equity |
7,951,303 |
|
3,329,802 |
|
7,279,999 |
|
3,039,098 |
|
|
|
|
|
|
Investments in
equity-accounted joint ventures |
|
965,605 |
|
|
984,747 |
|
Advances to equity-accounted
joint ventures |
|
131,497 |
|
|
131,386 |
|
Investments in and advances to equity-accounted joint ventures,
current and non-current portions |
|
1,097,102 |
|
|
1,116,133 |
|
(1) The Partnership's equity-accounted vessels
as at September 30, 2019 and December 31, 2018 include: the
Partnership’s 40 percent ownership interest in Teekay Nakilat (III)
Corporation, which owns four LNG carriers; the Partnership’s 49
percent ownership interests in the Excalibur Joint Venture, which
owns one LNG carrier; the Partnership’s 33 percent ownership
interest in four LNG carriers servicing the Angola LNG project; the
Partnership’s 52 percent ownership interest in the Malt Joint
Venture, which owns six LNG carriers; the Partnership’s 50 percent
ownership interest in Exmar LPG BVBA, which owns and in-charters 22
LPG carriers; the Partnership’s ownership interest ranging from 20
percent to 30 percent in four LNG carriers as at September 30,
2019 for Shell, compared to three LNG carriers and one LNG carrier
newbuilding as at December 31, 2018; the Partnership’s 50 percent
ownership interest in four ARC7 LNG carriers and two ARC7 LNG
carrier newbuildings in the Yamal LNG Joint Venture as at
September 30, 2019, compared to two ARC7 LNG carriers and four
ARC7 LNG carrier newbuildings as at December 31, 2018; and the
Partnership's 30 percent ownership interest in the Bahrain LNG
Joint Venture, which owns an LNG receiving and regasification
terminal under construction in Bahrain.
Forward-Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect
to certain future events and performance, including statements,
among other things, regarding: the timing of newbuilding vessel
deliveries and completion of the Bahrain regasification terminal;
the effects of future newbuilding deliveries and the completion of
the Bahrain regasification terminal on the Partnership's Total
Adjusted EBITDA and earnings; expectations regarding the
Partnership's 2019 and 2020 financial results; anticipated higher
utilization and revenues, and fewer drydocks; expectations on
capital allocation towards balance sheet delevering and future
returns of capital to unitholders; and the ability to pay increased
distributions on common units in 2020 and beyond. The following
factors are among those that could cause actual results to differ
materially from the forward-looking statements, which involve risks
and uncertainties, and that should be considered in evaluating any
such statement: potential shipyard and project construction delays,
newbuilding specification changes or cost overruns; deliveries of
vessels under charter contracts and the commencement thereof;
changes in production of LNG or LPG, either generally or in
particular regions; changes in trading patterns or timing of
start-up of new LNG liquefaction and regasification projects
significantly affecting overall vessel tonnage requirements;
changes in applicable industry laws and regulations and the timing
of implementation of new laws and regulations; the potential for
early termination of long-term contracts of existing vessels in the
Partnership's fleet; higher than expected costs and expenses;
general market conditions and trends, including spot, multi-month
and multi-year charter rates; inability of charterers to make
future charter payments; the inability of the Partnership to renew
or replace long-term contracts on existing vessels; the
Partnership’s or the Partnership’s joint ventures’ ability to
secure or draw on financings for its vessels; potential lack of
cash flow to reduce balance sheet leverage or of excess capital
available to allocate towards returning capital to unitholders; and
other factors discussed in Teekay LNG Partners’ filings from time
to time with the SEC, including its Report on Form 20-F for the
fiscal year ended December 31, 2018. The Partnership expressly
disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Partnership’s expectations with respect
thereto or any change in events, conditions or circumstances on
which any such statement is based.
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