Teekay GP L.L.C., the general partner (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, 2020.
Consolidated Financial Summary
|
Three Months Ended |
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
(in thousands of U.S.
Dollars, except per unit data) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL COMPARISON |
|
|
|
Voyage revenues |
148,935 |
148,205 |
149,655 |
Income from vessel
operations |
69,597 |
69,589 |
71,611 |
Equity income |
24,346 |
32,155 |
21,296 |
Net income attributable to the
partners and preferred unitholders |
40,275 |
44,934 |
47,368 |
Limited partners’ interest in
net income per common unit |
0.38 |
0.46 |
0.51 |
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
Total adjusted
revenues(1) |
249,540 |
254,001 |
234,633 |
Total adjusted EBITDA(1) |
186,902 |
192,340 |
180,216 |
Distributable cash flow
(DCF)(1) |
79,168 |
83,170 |
70,925 |
Adjusted net income
attributable to the partners and preferred unitholders(1) |
58,933 |
62,643 |
50,514 |
Limited
partners’ interest in adjusted net income per common unit |
0.59 |
0.67 |
0.55 |
(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). |
Third Quarter of 2020 Compared to Second Quarter
of 2020
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders were lower
for the three months ended September 30, 2020, compared to the
three months ended June 30, 2020, primarily due to more scheduled
drydockings and higher planned repairs and maintenance expenses
during the third quarter of 2020, as well as lower earnings from
the redeployment of three, 52 percent-owned liquefied natural gas
(LNG) carriers at lower charter rates, one of which was rechartered
at a higher rate in October 2020. These decreases were partially
offset by lower net interest expense and a decrease in general and
administrative expenses.
In addition, GAAP net income was negatively
impacted by unrealized credit loss provisions related to the
adoption of the new accounting standard (ASC 326) at the beginning
of 2020 as a result of a decline in the estimated charter-free
values of certain types of LNG carriers. This decrease to GAAP net
income was partially offset by unrealized gains on non-designated
derivative instruments in the third quarter of 2020, compared to
unrealized losses in the second quarter of 2020, and a decrease in
unrealized foreign currency exchange losses.
Third Quarter of 2020 Compared to Third Quarter
of 2019
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders were
positively impacted for the three months ended September 30,
2020, compared to the same quarter of the prior year, primarily due
to: additional earnings from the delivery of three 50 percent-owned
LNG carrier newbuildings in late-2019 and the commencement of
terminal use payments to the Partnership’s 30 percent-owned Bahrain
LNG Terminal; fewer off-hire days and lower net interest expense;
partially offset by lower earnings as a result of the sale of
non-core vessels and lower charter rates earned by three 52
percent-owned LNG carriers.
In addition, GAAP net income was negatively
impacted by increases in unrealized credit loss provisions related
to the adoption of the new accounting standard (ASC 326) at the
beginning of 2020 as a result of a decline in the estimated
charter-free values of certain types of LNG carriers; partially
offset by unrealized gains on non-designated derivative instruments
in the Partnership's equity-accounted joint ventures in the third
quarter of 2020 compared to losses in the third quarter of
2019.
CEO Commentary
“We generated strong earnings and cash flow
again this quarter, despite a higher than usual number of scheduled
drydockings,” commented Mark Kremin, President and Chief Executive
Officer of Teekay Gas Group Ltd. “We expect our earnings and cash
flows to increase in the fourth quarter of 2020 and we continue to
be on track to meeting the 2020 financial guidance we provided
earlier this year.”
“I’m also pleased to report that we are
delivering on a number of our strategic priorities,” continued Mr.
Kremin. “During the third quarter of 2020, Teekay LNG reduced its
total net debt(2) by nearly $95 million, or 8 percent on an
annualized basis, and reduced total net interest expense(2) by over
$6 million, or nearly 9 percent, compared with the second quarter
of 2020. Importantly, we expect this trend of debt reduction and
declining interest expense to continue while simultaneously paying
an annual distribution of $1.00 per common unit, which is
well-covered by our stable earnings and cash flows. In addition,
during the recent market surge in demand for LNG carriers, we
locked-in the 52 percent-owned Marib Spirit on a new fixed-rate
contract to early-2022 at an improved rate. We approach the end of
the year with the confidence that we have already secured
fixed-rate contracts for our LNG fleet covering 96 percent of 2021,
providing the Partnership with high fleet utilization and stable
cash flows.”
Mr. Kremin concluded, “I want to thank our
seafarers and onshore colleagues for their continued dedication to
providing safe and uninterrupted service to our customers during
this COVID-19 pandemic. I am pleased to report that, with the
reopening of many jurisdictions during the summer months, we were
able to successfully transition nearly all of our crew members
across the fleet.”
(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) |
Includes
Teekay LNG’s proportionate share of net debt and net interest
expense in its equity-accounted joint ventures. Total net interest
expense includes realized losses on non-designated derivative
instruments at the joint venture level of $3.1 million and $2.3
million for the three months ended September 30, 2020 and June 30,
2020, respectively. |
Summary of Recent Events
Chartering Activities
In October 2020, the charterer of the 52
percent-owned Marib Spirit exercised its options to extend the
current charter by 14 months at a higher charter rate, extending
the vessel's charter coverage to early-2022.
Financing Activities
In August 2020, Teekay LNG issued the equivalent
of $112 million of unsecured, 5-year notes in the Norwegian Bond
market at an all-in fixed coupon rate of 5.74 percent. The net
proceeds from the bond issuance were used to repay drawings on the
Partnership's revolving credit facilities and as a result, the new
bond issuance did not increase the Partnership's financial
leverage.
Operating Results
The following table highlights certain financial
information for Teekay LNG’s segments: the Liquefied Natural Gas
Segment, the Liquefied Petroleum Gas Segment and until the sale of
our last conventional tanker in October 2019, 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, 2020 |
September 30, 2019 |
(in thousands of U.S.
Dollars) |
(unaudited) |
(unaudited) |
|
LiquefiedNaturalGasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
LiquefiedNaturalGasSegment |
LiquefiedPetroleumGasSegment |
ConventionalTankerSegment |
Total |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Voyage revenues |
138,953 |
|
9,982 |
|
— |
148,935 |
|
137,212 |
|
10,846 |
|
1,597 |
|
149,655 |
|
Income (loss) from vessel
operations |
70,313 |
|
(716 |
) |
— |
69,597 |
|
73,236 |
|
(1,124 |
) |
(501 |
) |
71,611 |
|
Equity income |
22,674 |
|
1,672 |
|
— |
24,346 |
|
20,262 |
|
1,034 |
|
— |
|
21,296 |
|
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
|
|
|
Consolidated adjusted
EBITDA(i) |
104,473 |
|
1,227 |
|
— |
105,700 |
|
109,556 |
|
867 |
|
292 |
|
110,715 |
|
Adjusted EBITDA from
equity-accounted vessels(i) |
71,683 |
|
9,519 |
|
— |
81,202 |
|
59,646 |
|
9,855 |
|
— |
|
69,501 |
|
Total
adjusted EBITDA(i) |
176,156 |
|
10,746 |
|
— |
186,902 |
|
169,202 |
|
10,722 |
|
292 |
|
180,216 |
|
(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(1) for the liquefied natural gas segment for the
three months ended September 30, 2020, compared to the same
quarter of the prior year, decreased primarily due to a reduction
in earnings upon the sales of the WilForce and WilPride LNG
carriers in January 2020; and an increase in vessel operating
expenses due to timing of repairs and maintenance for certain of
the Partnership's LNG carriers during the third quarter of 2020.
These decreases were partially offset by fewer off-hire days in the
third quarter of 2020 relating to scheduled dry dockings for
certain of the Partnership's LNG carriers.
Equity income and adjusted EBITDA from
equity-accounted vessels(1) for the liquefied natural gas segment
for the three months ended September 30, 2020, compared to the
same quarter of the prior year, increased primarily due to the
deliveries of three ARC7 LNG carrier newbuildings between August
and December 2019 to the Yamal LNG Joint Venture and commencement
of terminal use payments in January 2020 to the Bahrain LNG Joint
Venture. These increases were partially offset by lower earnings
from the MALT Joint Venture as a result of lower charter rates
earned upon redeployment of the Arwa Spirit and Marib Spirit during
the second quarter of 2020 and the Methane Spirit in July 2020, and
the recognition of drydock hire revenue for the Meridian Spirit in
the third quarter of 2019. In addition, GAAP equity income was
negatively impacted by increases in unrealized credit loss
provisions in the third quarter of 2020 related to the adoption of
the new accounting standard (ASC 326) at the beginning of 2020 as a
result of a decline in the estimated charter-free values of certain
types of LNG carriers; partially offset by unrealized gains on
non-designated derivative instruments in the Partnership's
equity-accounted joint ventures in the third quarter of 2020
compared to losses in the third quarter of 2019.
Liquefied Petroleum Gas Segment
Loss from vessel operations, consolidated
adjusted EBITDA(1) and equity income and adjusted EBITDA from
equity-accounted vessels(1) for the liquefied petroleum gas (LPG)
segment for the three months ended September 30, 2020 were
comparable to the same quarter of the prior year.
Conventional Tanker Segment
There were no results from vessel operations for
the conventional tanker segment for the three months ended
September 30, 2020, as the last of the Partnership's
conventional tanker, the Alexander Spirit, was sold in October of
2019.
(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. |
Teekay LNG's Fleet
The following table summarizes the Partnership’s
fleet as of November 1, 2020. In addition, the Partnership owns a
30 percent interest in an LNG regasification terminal in
Bahrain.
|
Number of Vessels |
|
Owned and In-Chartered Vessels(i) |
LNG Carrier
Fleet |
47(ii) |
LPG/Multi-gas Carrier
Fleet |
30(iii) |
Total |
77 |
(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
interests in these vessels range from 50 percent to 100
percent. |
Liquidity
As of September 30, 2020, the Partnership
had total liquidity of $430.8 million (comprised of $201.0 million
in cash and cash equivalents and $229.8 million in undrawn credit
facilities) compared to $306.3 million as of June 30, 2020.
Conference Call
The Partnership plans to host a conference call
on Thursday, November 12, 2020 at 1:00 p.m. (ET) to discuss the
results for the third quarter of 2020. All unitholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing 1 (800) 367-2403 or 1 (647) 490-5367, if outside
North America, and quoting conference ID code 6710573.
- 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 Third Quarter of 2020 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 and LPG services primarily under long-term, fee-based charter
contracts through its interests in 47 LNG carriers, 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 an LNG
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 Relations enquiries 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, Total Adjusted Revenues 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.
Non-GAAP Financial Measures
Total Adjusted Revenues represents the
Partnership's voyage revenues from its consolidated vessels, as
shown in the Partnership's Consolidated Statements of Income, and
its proportionate ownership percentage of the voyage revenues from
its equity-accounted joint ventures, as shown in Appendix E of this
release, less the Partnership's proportionate share of voyage
revenues earned directly from its equity-accounted joint ventures.
Please refer to Appendix C and E of this release for a
reconciliation of this non-GAAP financial measure to voyage
revenues and equity income, the most directly comparable GAAP
measures reflected in the Partnership’s consolidated financial
statements. The Partnership's equity-accounted joint ventures are
generally required to distribute all available cash to their
owners. However, the timing and amount of dividends from each of
the Partnership's equity-accounted joint ventures may not
necessarily coincide with the operating cash flow generated from
each respective equity-accounted joint venture. The timing and
amount of dividends distributed by the Partnership's
equity-accounted joint ventures are affected by the timing and
amounts of debt repayments in the joint ventures, capital
requirements of the joint ventures, as well as any cash reserves
maintained in the joint ventures for operations, capital
expenditures and/or as required under financing agreements.
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 unrealized credit loss provisions, unrealized gains or
losses on non-designated derivative instruments, foreign currency
exchange gains or losses, adjustments for direct financing and
sales-type 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 (3) 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 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, unrealized credit loss
provisions, distributions relating to equity financing of
newbuilding installments, distributions relating to preferred
units, adjustments for direct financing and sales-type 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, |
2020 |
2020 |
2019 |
2020 |
2019 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Voyage revenues |
148,935 |
|
|
148,205 |
|
|
149,655 |
|
|
437,027 |
|
|
452,459 |
|
|
|
|
|
|
|
|
Voyage expenses |
(3,950 |
) |
|
(5,329 |
) |
|
(4,961 |
) |
|
(11,596 |
) |
|
(16,759 |
) |
|
Vessel operating expenses |
(30,642 |
) |
|
(28,407 |
) |
|
(27,321 |
) |
|
(85,153 |
) |
|
(80,879 |
) |
|
Time-charter hire expense |
(5,980 |
) |
|
(5,368 |
) |
|
(5,336 |
) |
|
(17,270 |
) |
|
(14,007 |
) |
|
Depreciation and
amortization |
(32,601 |
) |
|
(31,629 |
) |
|
(34,248 |
) |
|
(96,869 |
) |
|
(103,712 |
) |
|
General and administrative
expenses |
(6,165 |
) |
|
(7,883 |
) |
|
(5,393 |
) |
|
(20,215 |
) |
|
(17,692 |
) |
|
Write-down of vessels(1) |
— |
|
|
— |
|
|
(785 |
) |
|
(45,000 |
) |
|
(785 |
) |
|
Restructuring charges(2) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,976 |
) |
|
Income from vessel
operations |
69,597 |
|
|
69,589 |
|
|
71,611 |
|
|
160,924 |
|
|
215,649 |
|
|
|
|
|
|
|
|
Equity income(3) |
24,346 |
|
|
32,155 |
|
|
21,296 |
|
|
56,874 |
|
|
28,612 |
|
|
Interest expense |
(30,528 |
) |
|
(35,143 |
) |
|
(40,574 |
) |
|
(102,375 |
) |
|
(123,809 |
) |
|
Interest
income |
1,406 |
|
|
1,697 |
|
|
1,025 |
|
|
5,473 |
|
|
3,063 |
|
|
Realized and unrealized loss
on non-designated derivative instruments(4) |
(1,327 |
) |
|
(8,516 |
) |
|
(3,270 |
) |
|
(30,314 |
) |
|
(17,713 |
) |
|
Foreign currency exchange
(loss) gain(5) |
(7,853 |
) |
|
(11,624 |
) |
|
2,879 |
|
|
(14,738 |
) |
|
(5,095 |
) |
|
Other
expense(6) |
(14,149 |
) |
|
(679 |
) |
|
(1,828 |
) |
|
(15,189 |
) |
|
(2,064 |
) |
|
Net income before income tax
expense (recovery) |
41,492 |
|
|
47,479 |
|
|
51,139 |
|
|
60,655 |
|
|
98,643 |
|
|
Income
tax expense (recovery) |
(1,420 |
) |
|
1,804 |
|
|
(788 |
) |
|
(2,128 |
) |
|
(5,115 |
) |
|
Net income |
40,072 |
|
|
49,283 |
|
|
50,351 |
|
|
58,527 |
|
|
93,528 |
|
|
|
|
|
|
|
|
Non-controlling interest in
net (loss) income |
(203 |
) |
|
4,349 |
|
|
2,983 |
|
|
6,312 |
|
|
8,108 |
|
|
Preferred unitholders'
interest in net income |
6,425 |
|
|
6,425 |
|
|
6,426 |
|
|
19,275 |
|
|
19,276 |
|
|
General partner's interest in
net income |
595 |
|
|
713 |
|
|
820 |
|
|
519 |
|
|
1,324 |
|
|
Limited partners’ interest in
net income |
33,255 |
|
|
37,796 |
|
|
40,122 |
|
|
32,421 |
|
|
64,820 |
|
|
Limited partners'
interest in net income per common unit: |
|
|
|
|
|
• Basic |
0.38 |
|
|
0.46 |
|
|
0.51 |
0.40 |
|
|
0.83 |
|
|
• Diluted |
0.38 |
|
|
0.46 |
|
|
0.51 |
0.39 |
|
|
0.83 |
|
|
Weighted-average number of
common units outstanding: |
|
|
|
|
|
• Basic |
86,951,234 |
|
|
82,197,665 |
|
|
78,012,514 |
|
|
82,010,753 |
|
|
78,402,239 |
|
|
• Diluted |
87,041,046 |
|
|
82,262,235 |
|
|
78,106,770 |
|
|
82,109,826 |
|
|
78,488,331 |
|
|
Total
number of common units outstanding at end of period |
86,951,234 |
|
|
86,927,558 |
|
|
77,509,411 |
|
|
86,951,234 |
|
|
77,509,411 |
|
|
(1) |
In the first quarter of 2020, the Partnership wrote-down six
wholly-owned multi-gas carriers to their estimated fair values. The
total impairment charge of $45.0 million related to the six
multi-gas carriers is included in write-down of vessels for the
nine months ended September 30, 2020. 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, which
was sold in October 2019. |
|
|
(2) |
In
January 2019, the Toledo Spirit conventional tanker was sold and as
a result of this sale, the Partnership recorded restructuring
charges of $3.0 million for the nine months ended September 30,
2019. |
|
|
(3) |
The
Partnership’s proportionate share of items within equity income as
identified in Appendix A of this release are 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, |
|
2020 |
2020 |
2019 |
2020 |
2019 |
Equity income |
24,346 |
32,155 |
21,296 |
56,874 |
28,612 |
Proportionate share of
unrealized (gain) loss on non-designated interest rate
swaps |
(2,680) |
3,806 |
5,150 |
23,330 |
14,612 |
Proportionate share of
unrealized credit loss provisions(a) |
7,099 |
(423) |
— |
15,656 |
— |
Proportionate share of other items |
1,167 |
362 |
(77) |
990 |
1,392 |
Equity
income adjusted for items in Appendix A |
29,932 |
35,900 |
26,369 |
96,850 |
44,616 |
(a) Related to
adoption of new accounting standard ASC 326 effective January 1,
2020.
(4) |
The realized losses on non-designated derivative instruments relate
to the amounts the Partnership actually paid 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 |
Nine Months Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2020 |
2020 |
2019 |
2020 |
2019 |
Realized losses
relating to: |
|
|
|
|
|
Interest rate swap
agreements |
(4,947) |
(3,662) |
(2,621) |
(11,520) |
(7,398) |
Foreign currency forward
contracts |
— |
— |
— |
(241) |
— |
|
(4,947) |
(3,662) |
(2,621) |
(11,761) |
(7,398) |
Unrealized gains
(losses) relating to: |
|
|
|
|
|
Interest rate swap
agreements |
3,620 |
(4,854) |
(215) |
(18,755) |
(9,740) |
Foreign currency forward
contracts |
— |
— |
(434) |
202 |
(535) |
Toledo
Spirit time-charter derivative |
— |
— |
— |
— |
(40) |
|
3,620 |
(4,854) |
(649) |
(18,553) |
(10,315) |
Total realized and unrealized losses on non-designated derivative
instruments |
(1,327) |
(8,516) |
(3,270) |
(30,314) |
(17,713) |
(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 Income. |
|
|
|
Foreign
currency exchange (loss) gain includes realized (losses) gains
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 gains (losses) relating to the
change in fair value of such derivative instruments and unrealized
gain (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, |
|
2020 |
2020 |
2019 |
2020 |
2019 |
Realized losses on
cross-currency swaps |
(1,669) |
(1,430) |
(1,431) |
(4,916) |
(3,952) |
Realized losses on
cross-currency swaps maturity |
— |
(33,844) |
— |
(33,844) |
— |
Realized gains on repurchase
of NOK bonds |
— |
33,844 |
— |
33,844 |
— |
Unrealized gains (losses) on
cross currency swaps |
1,490 |
45,881 |
(23,759) |
(2,169) |
(25,818) |
Unrealized (losses) gains on revaluation of NOK bonds |
(1,836) |
(53,794) |
22,167 |
(1,657) |
17,687 |
(6) |
Includes unrealized credit loss provisions of $14.4 million and
$14.6 million for the three and nine months ended September 30,
2020, respectively, related to the Partnership's adoption of ASC
326 effective January 1, 2020. |
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, |
|
|
2020 |
|
2020 |
|
2019 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
ASSETS |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash and cash equivalents |
201,036 |
|
226,328 |
|
160,221 |
|
Restricted cash – current |
11,224 |
|
11,544 |
|
53,689 |
|
Accounts receivable |
6,753 |
|
9,694 |
|
13,460 |
|
Prepaid expenses |
9,706 |
|
10,891 |
|
6,796 |
|
Current portion of derivative
assets |
— |
|
— |
|
355 |
|
Current portion of net
investments in direct financing and sales-type leases, net |
13,762 |
|
14,014 |
|
273,986 |
|
Advances to affiliates |
1,953 |
|
3,025 |
|
5,143 |
|
Other
current assets |
237 |
|
237 |
|
238 |
|
Total current assets |
244,671 |
|
275,733 |
|
513,888 |
|
|
|
|
|
Restricted cash –
long-term |
42,577 |
|
54,603 |
|
39,381 |
|
|
|
|
|
Vessels and
equipment |
|
|
|
At cost, less accumulated
depreciation |
1,244,123 |
|
1,256,434 |
|
1,335,397 |
|
Vessels related to finance
leases, at cost, less accumulated depreciation |
1,664,059 |
|
1,675,168 |
|
1,691,945 |
|
Operating lease right-of-use
asset |
24,179 |
|
27,568 |
|
34,157 |
|
Total vessels and equipment |
2,932,361 |
|
2,959,170 |
|
3,061,499 |
|
Investments in and advances,
net to equity-accounted joint ventures |
1,092,724 |
|
1,082,346 |
|
1,155,316 |
|
Net investments in direct
financing and sales-type leases, net |
508,561 |
|
525,812 |
|
544,823 |
|
Other assets |
20,025 |
|
17,633 |
|
14,738 |
|
Derivative assets |
— |
|
— |
|
1,834 |
|
Intangible assets – net |
36,724 |
|
38,938 |
|
43,366 |
|
Goodwill |
34,841 |
|
34,841 |
|
34,841 |
|
Total assets |
4,912,484 |
|
4,989,076 |
|
5,409,686 |
|
LIABILITIES AND EQUITY |
|
|
|
Current |
|
|
|
Accounts payable |
2,319 |
|
4,270 |
|
5,094 |
|
Accrued liabilities |
84,975 |
|
79,832 |
|
76,752 |
|
Unearned revenue |
32,685 |
|
30,185 |
|
28,759 |
|
Current portion of long-term debt |
291,720 |
|
295,282 |
|
393,065 |
|
Current obligations related to finance leases |
71,441 |
|
70,955 |
|
69,982 |
|
Current portion of operating lease liabilities |
13,841 |
|
13,681 |
|
13,407 |
|
Current portion of derivative liabilities |
35,616 |
|
34,997 |
|
38,458 |
|
Advances from affiliates |
13,970 |
|
18,271 |
|
7,003 |
|
Total current liabilities |
546,567 |
|
547,473 |
|
632,520 |
|
Long-term debt |
1,201,909 |
|
1,263,202 |
|
1,438,331 |
|
Long-term obligations related to finance leases |
1,287,044 |
|
1,305,056 |
|
1,340,922 |
|
Long-term operating lease liabilities |
10,338 |
|
13,887 |
|
20,750 |
|
Derivative liabilities |
81,991 |
|
88,336 |
|
51,006 |
|
Other long-term liabilities |
53,088 |
|
52,635 |
|
49,182 |
|
Total liabilities |
3,180,937 |
|
3,270,589 |
|
3,532,711 |
|
Equity |
|
|
|
Limited partners – common units |
1,459,599 |
|
1,447,690 |
|
1,543,598 |
|
Limited partners – preferred units |
285,159 |
|
285,159 |
|
285,159 |
|
General partner |
46,081 |
|
45,868 |
|
50,241 |
|
Accumulated other comprehensive loss |
(111,967 |
) |
(116,313 |
) |
(57,312 |
) |
Partners' equity |
1,678,872 |
|
1,662,404 |
|
1,821,686 |
|
Non-controlling interest |
52,675 |
|
56,083 |
|
55,289 |
|
Total equity |
1,731,547 |
|
1,718,487 |
|
1,876,975 |
|
Total liabilities and total equity |
4,912,484 |
|
4,989,076 |
|
5,409,686 |
|
Teekay LNG Partners L.P.Consolidated Statements of Cash Flows(in
thousands of U.S. Dollars)
|
Nine Months Ended |
|
September 30, |
September 30, |
|
2020 |
2019 |
|
(unaudited) |
(unaudited) |
Cash and cash equivalents
provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net income |
58,527 |
|
93,528 |
|
Non-cash and non-operating
items: |
|
|
Unrealized loss on non-designated derivative instruments |
18,553 |
|
10,315 |
|
Depreciation and amortization |
96,869 |
|
103,712 |
|
Write-down of vessels |
45,000 |
|
785 |
|
Unrealized foreign currency exchange loss (gain) including the
effect of settlement of cross currency swaps upon maturity |
10,697 |
|
(1,213 |
) |
Equity income, net of distributions received $32,297 (2019 –
$25,374) |
(24,577 |
) |
(3,238 |
) |
Amortization of deferred financing issuance costs included in
interest expense |
4,401 |
|
6,722 |
|
Change in unrealized credit loss provisions included in other
expense |
14,557 |
|
— |
|
Other non-cash items |
3,595 |
|
6,173 |
|
Change in non-cash operating
assets and liabilities: |
|
|
Receipts from direct financing and sales-type leases |
270,973 |
|
9,242 |
|
Expenditures for dry docking |
(1,984 |
) |
(8,836 |
) |
Other non-cash operating assets and liabilities |
15,960 |
|
(15,227 |
) |
Net operating cash flow |
512,571 |
|
201,963 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance of
long-term debt |
561,127 |
|
158,924 |
|
Scheduled repayments of
long-term debt and settlement of related swaps |
(220,875 |
) |
(95,730 |
) |
Prepayments of long-term
debt |
(687,061 |
) |
(183,787 |
) |
Financing issuance costs |
(5,111 |
) |
(989 |
) |
Proceeds from financing
related to sales and leaseback of vessels |
— |
|
317,806 |
|
Scheduled repayments of
obligations related to finance leases |
(52,419 |
) |
(54,484 |
) |
Extinguishment of obligations
related to finance leases |
— |
|
(111,617 |
) |
Repurchase of common
units |
(15,635 |
) |
(25,729 |
) |
Cash distributions paid |
(75,845 |
) |
(60,926 |
) |
Dividends paid to
non-controlling interests |
(3,390 |
) |
(90 |
) |
Acquisition of non-controlling
interest in certain of the Partnership's subsidiaries |
(2,219 |
) |
— |
|
Net financing cash flow |
(501,428 |
) |
(56,622 |
) |
INVESTING
ACTIVITIES |
|
|
Expenditures for vessels and
equipment |
(9,597 |
) |
(91,503 |
) |
Capital contributions and
advances to equity-accounted joint ventures |
— |
|
(42,171 |
) |
Net investing cash flow |
(9,597 |
) |
(133,674 |
) |
Increase in cash, cash
equivalents and restricted cash |
1,546 |
|
11,667 |
|
Cash,
cash equivalents and restricted cash, beginning of the period |
253,291 |
|
222,864 |
|
Cash, cash equivalents and restricted cash, end of the
period |
254,837 |
|
234,531 |
|
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, |
June 30, |
September 30, |
2020 |
2020 |
2019 |
(unaudited) |
(unaudited) |
(unaudited) |
Net income – GAAP basis |
40,072 |
|
|
49,283 |
|
|
50,351 |
|
|
Less:
net loss (income) attributable to non-controlling interests |
203 |
|
|
(4,349 |
) |
|
(2,983 |
) |
|
Net income attributable to the partners and preferred
unitholders |
40,275 |
|
|
44,934 |
|
|
47,368 |
|
|
Add (subtract) specific items
affecting net income: |
|
|
|
Write-down of vessels(1) |
— |
|
|
— |
|
|
785 |
|
|
Foreign currency exchange losses (gains)(2) |
6,184 |
|
|
10,194 |
|
|
(4,607 |
) |
|
Unrealized credit loss provisions, unrealized gains and losses on
non-designated derivative instruments and other items from
equity-accounted investees(3) |
5,586 |
|
|
3,745 |
|
|
5,073 |
|
|
Unrealized (gains) losses on non-designated derivative
instruments(4) |
(3,620 |
) |
|
4,854 |
|
|
649 |
|
|
Unrealized credit loss provisions and other items(5) |
14,397 |
|
|
(1,619 |
) |
|
1,417 |
|
|
Non-controlling interests’ share of items above(6) |
(3,889 |
) |
|
535 |
|
|
(171 |
) |
|
Total
adjustments |
18,658 |
|
|
17,709 |
|
|
3,146 |
|
|
Adjusted net income attributable to the partners and
preferred unitholders |
58,933 |
|
|
62,643 |
|
|
50,514 |
|
|
|
|
|
|
Preferred unitholders'
interest in adjusted net income |
6,425 |
|
|
6,425 |
|
|
6,426 |
|
|
General partner's interest in
adjusted net income |
923 |
|
|
1,044 |
|
|
882 |
|
|
Limited partners’ interest in
adjusted net income |
51,585 |
|
|
55,174 |
|
|
43,206 |
|
|
Limited partners’ interest in
adjusted net income per common unit, basic |
0.59 |
|
|
0.67 |
|
|
0.55 |
|
|
Weighted-average number of
common units outstanding, basic |
86,951,234 |
|
|
82,197,665 |
|
|
78,012,514 |
|
|
(1) |
See Note 1 to
the Consolidated Statements of Income included in this release for
further details. |
(2) |
Foreign
currency exchange losses (gains) primarily relate to the
Partnership’s revaluation of all foreign currency-denominated
monetary assets and liabilities based on the prevailing exchange
rate at the end of each reporting period and unrealized 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 Income included in this release for
further details. |
(3) |
Reflects
the proportionate share of unrealized credit loss provisions and
unrealized gains or losses due to changes in the mark-to-market
value of derivative instruments that are not designated as hedges
for accounting purposes in the Partnership's equity-accounted
investees. See Note 3 to the Consolidated Statements of Income
included in this release for further details. |
(4) |
Reflects
the unrealized losses due to changes in the mark-to-market value of
the Partnership's 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) |
For the
three months ended September 30, 2020, includes unrealized credit
loss provisions of $14.4 million related to the Partnership's
adoption of ASC 326 effective January 1, 2020. |
(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 Measures Distributable Cash Flow (DCF)(in thousands of
U.S. Dollars, except units outstanding and per unit data)
|
Three Months Ended |
September 30, |
June 30, |
September 30, |
2020 |
2020 |
2019 |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Net income |
40,072 |
|
49,283 |
|
50,351 |
|
Add: |
|
|
|
Partnership’s share of equity-accounted joint ventures' DCF net of
estimated maintenance capital expenditures(1) |
38,065 |
|
42,725 |
|
34,319 |
|
Depreciation and amortization |
32,601 |
|
31,629 |
|
34,248 |
|
Unrealized credit loss provisions |
14,397 |
|
260 |
|
— |
|
Foreign currency exchange loss (gain) |
6,184 |
|
10,194 |
|
(4,607 |
) |
Direct finance and sale-type lease payments received in excess of
revenue recognized and other adjustments |
3,502 |
|
3,392 |
|
4,071 |
|
Write-down of vessels |
— |
|
— |
|
785 |
|
Distributions relating to equity financing of newbuildings |
— |
|
— |
|
1,012 |
|
Subtract: |
|
|
|
Deferred income tax and other non-cash items |
(709 |
) |
271 |
|
801 |
|
Unrealized (gain) loss on non-designated derivative
instruments |
(3,620 |
) |
4,854 |
|
649 |
|
Distributions relating to preferred units |
(6,425 |
) |
(6,425 |
) |
(6,426 |
) |
Estimated maintenance capital expenditures |
(14,683 |
) |
(14,513 |
) |
(17,562 |
) |
Equity income |
(24,346 |
) |
(32,155 |
) |
(21,296 |
) |
Distributable Cash Flow before non-controlling
interest |
85,038 |
|
89,515 |
|
76,345 |
|
Non-controlling
interests’ share of DCF before estimated maintenance capital
expenditures |
(5,870 |
) |
(6,345 |
) |
(5,420 |
) |
Distributable Cash Flow |
79,168 |
|
83,170 |
|
70,925 |
|
Amount of cash
distributions attributable to the General Partner |
(389 |
) |
(411 |
) |
(301 |
) |
Limited partners' Distributable Cash Flow |
78,779 |
|
82,759 |
|
70,624 |
|
Weighted-average
number of common units outstanding, basic |
86,951,234 |
|
82,197,665 |
|
78,012,514 |
|
Distributable Cash Flow per limited partner common
unit |
0.91 |
|
1.01 |
|
0.91 |
|
(1) |
The estimated maintenance capital expenditures relating to the
Partnership’s share of equity-accounted joint ventures were $15.4
million, $15.2 million and $11.8 million for the three months
ended September 30, 2020, June 30, 2020 and September 30,
2019, respectively. |
Teekay LNG Partners L.P.Appendix C - Reconciliation of Non-GAAP
Financial MeasuresTotal Adjusted Revenues and Total Adjusted
EBITDA(in thousands of U.S. Dollars)
|
Three Months Ended |
September 30, |
June 30, |
September 30, |
2020 |
2020 |
2019 |
(unaudited) |
(unaudited) |
(unaudited) |
Voyage revenues |
148,935 |
|
148,205 |
|
149,655 |
|
Partnership's proportionate
share of voyage revenues from its equity-accounted joint ventures
(See Appendix E) |
106,626 |
|
111,365 |
|
90,479 |
|
Less
the Partnership’s proportionate share of voyage revenues earned
directly from its equity-accounted joint ventures |
(6,021 |
) |
(5,569 |
) |
(5,501 |
) |
Total adjusted revenues |
249,540 |
|
254,001 |
|
234,633 |
|
|
Three Months Ended |
September 30, |
June 30, |
September 30, |
2020 |
2020 |
2019 |
(unaudited) |
(unaudited) |
(unaudited) |
Net income |
40,072 |
|
49,283 |
|
50,351 |
|
Depreciation and amortization |
32,601 |
|
31,629 |
|
34,248 |
|
Interest expense, net of interest income |
29,122 |
|
33,446 |
|
39,549 |
|
Income tax expense (recovery) |
1,420 |
|
(1,804 |
) |
788 |
|
EBITDA |
103,215 |
|
112,554 |
|
124,936 |
|
|
|
|
|
Add (subtract) specific income
statement items affecting EBITDA: |
|
|
|
Foreign currency exchange loss (gain) |
7,853 |
|
11,624 |
|
(2,879 |
) |
Other expense |
14,149 |
|
679 |
|
1,828 |
|
Equity income |
(24,346 |
) |
(32,155 |
) |
(21,296 |
) |
Realized and unrealized loss on non-designated derivative
instruments |
1,327 |
|
8,516 |
|
3,270 |
|
Write-down of vessels |
— |
|
— |
|
785 |
|
Direct finance and sale-type lease payments received in excess of
revenue recognized and other adjustments |
3,502 |
|
3,392 |
|
4,071 |
|
Consolidated adjusted EBITDA |
105,700 |
|
104,610 |
|
110,715 |
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
81,202 |
|
87,730 |
|
69,501 |
|
Total adjusted EBITDA |
186,902 |
|
192,340 |
|
180,216 |
|
|
|
|
|
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, 2020 |
|
(unaudited) |
|
LiquefiedNatural GasSegment |
LiquefiedPetroleum GasSegment |
ConventionalTanker Segment |
Total |
Voyage revenues |
138,953 |
|
9,982 |
|
— |
|
148,935 |
|
Voyage expenses |
(427 |
) |
(3,523 |
) |
— |
|
(3,950 |
) |
Vessel operating expenses |
(25,871 |
) |
(4,771 |
) |
— |
|
(30,642 |
) |
Time-charter hire
expenses |
(5,980 |
) |
— |
|
— |
|
(5,980 |
) |
Depreciation and
amortization |
(30,658 |
) |
(1,943 |
) |
— |
|
(32,601 |
) |
General and administrative
expenses |
(5,704 |
) |
(461 |
) |
— |
|
(6,165 |
) |
Income (loss) from vessel operations |
70,313 |
|
(716 |
) |
— |
|
69,597 |
|
Depreciation and
amortization |
30,658 |
|
1,943 |
|
— |
|
32,601 |
|
Direct finance and sales-type
lease payments received in excess of revenue recognized and other
adjustments |
3,502 |
|
— |
|
— |
|
3,502 |
|
Consolidated adjusted EBITDA |
104,473 |
|
1,227 |
|
— |
|
105,700 |
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
(unaudited) |
|
LiquefiedNatural GasSegment |
LiquefiedPetroleum GasSegment |
ConventionalTanker 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
expenses |
(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 and sales-type
lease payments received in excess of revenue
recognized and other adjustments |
4,071 |
|
— |
|
— |
|
4,071 |
|
Consolidated adjusted EBITDA |
109,556 |
|
867 |
|
292 |
|
110,715 |
|
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, 2020 |
September 30, 2019 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Voyage revenues |
246,488 |
|
106,626 |
|
205,727 |
|
90,479 |
|
Voyage expenses |
(2,815 |
) |
(1,367 |
) |
(1,858 |
) |
(928 |
) |
Vessel operating expenses,
time-charter hire expenses and general and administrative
expenses |
(74,398 |
) |
(32,778 |
) |
(57,786 |
) |
(25,564 |
) |
Depreciation and
amortization |
(26,485 |
) |
(13,328 |
) |
(28,891 |
) |
(13,962 |
) |
Income from vessel operations of equity-accounted vessels |
142,790 |
|
59,153 |
|
117,192 |
|
50,025 |
|
Net interest expense |
(61,584 |
) |
(25,133 |
) |
(56,628 |
) |
(23,221 |
) |
Income tax expense |
(449 |
) |
(235 |
) |
(32 |
) |
(16 |
) |
Other items including realized
and unrealized losses on derivative instruments and unrealized
credit loss provisions(2) |
(26,623 |
) |
(9,439 |
) |
(18,270 |
) |
(5,492 |
) |
Net income / equity income of equity-accounted vessels |
54,134 |
|
24,346 |
|
42,262 |
|
21,296 |
|
Net income / equity income of
equity-accounted LNG vessels |
50,627 |
|
22,674 |
|
40,032 |
|
20,262 |
|
Net
income / equity income of equity-accounted LPG vessels |
3,507 |
|
1,672 |
|
2,230 |
|
1,034 |
|
|
|
|
|
|
Net income / equity income of
equity-accounted vessels |
54,134 |
|
24,346 |
|
42,262 |
|
21,296 |
|
Depreciation and amortization |
26,485 |
|
13,328 |
|
28,891 |
|
13,962 |
|
Net interest expense |
61,584 |
|
25,133 |
|
56,628 |
|
23,221 |
|
Income tax expense |
449 |
|
235 |
|
32 |
|
16 |
|
EBITDA from equity-accounted
vessels |
142,652 |
|
63,042 |
|
127,813 |
|
58,495 |
|
|
|
|
|
|
Add (subtract) specific income
statement items affecting EBITDA: |
|
|
|
|
Other items including realized and unrealized losses on derivative
instruments and unrealized credit loss provisions(2) |
26,623 |
|
9,439 |
|
18,270 |
|
5,492 |
|
Direct finance and sale-type lease payments received in excess of
revenue recognized |
26,752 |
|
9,677 |
|
17,701 |
|
6,470 |
|
Amortization of in-process contracts |
(1,759 |
) |
(956 |
) |
(1,758 |
) |
(956 |
) |
Adjusted EBITDA from equity-accounted vessels |
194,268 |
|
81,202 |
|
162,026 |
|
69,501 |
|
Adjusted EBITDA from
equity-accounted LNG vessels |
175,231 |
|
71,683 |
|
142,311 |
|
59,646 |
|
Adjusted EBITDA from equity-accounted LPG vessels |
19,037 |
|
9,519 |
|
19,715 |
|
9,855 |
|
(1) |
The Partnership's equity-accounted vessels for the three months
ended September 30, 2020 and 2019 include: the Partnership’s
40 percent ownership interest in Teekay Nakilat (III) Corporation,
which owns four LNG carriers; the Partnership’s 50 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 23 LPG carriers as at
September 30, 2020, compared to 22 owned and in-chartered LPG
carriers as at September 30, 2019; the Partnership’s ownership
interest ranging from 20 to 30 percent in four LNG carriers as at
September 30, 2020 chartered to Shell (the Pan Union Joint
Venture); the Partnership’s 50 percent ownership interest in six
ARC7 LNG carriers in the Yamal LNG Joint Venture as at
September 30, 2020, compared to four ARC7 LNG carriers and two
ARC7 LNG carrier newbuildings as at September 30, 2019; and
the Partnership's 30 percent ownership interest in the Bahrain LNG
Joint Venture, which owns an LNG receiving and regasification
terminal in Bahrain. |
|
|
(2) |
Unrealized credit loss provisions relate to the Partnership's
adoption of ASC 326 effective January 1, 2020. |
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, 2020 |
As at December 31, 2019 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Cash and restricted cash, current and non-current |
598,177 |
|
250,977 |
|
509,065 |
|
210,736 |
Other current assets |
68,446 |
|
26,702 |
|
62,566 |
|
27,719 |
Property, plant and equipment,
including owned vessels, vessels related to finance leases and
operating lease right-of-use assets |
2,004,583 |
|
1,023,826 |
|
3,112,349 |
|
1,375,570 |
Net investments in sales-type
and direct financing leases, current and non-current |
5,420,362 |
|
2,091,072 |
|
4,589,139 |
|
1,856,709 |
Other
non-current assets |
77,002 |
|
48,001 |
|
50,967 |
|
41,015 |
Total
assets |
8,168,570 |
|
3,440,578 |
|
8,324,086 |
|
3,511,749 |
|
|
|
|
|
Current portion of long-term
debt and obligations related to finance leases and operating
leases |
540,300 |
|
244,754 |
|
315,247 |
|
136,573 |
Current portion of derivative
liabilities |
65,440 |
|
25,622 |
|
34,618 |
|
13,658 |
Other current liabilities |
172,226 |
|
70,813 |
|
153,816 |
|
66,224 |
Long-term debt and obligations
related to finance leases and operating leases |
4,606,936 |
|
1,844,580 |
|
5,026,123 |
|
2,041,595 |
Shareholders' loans, current
and non-current |
346,969 |
|
129,550 |
|
346,969 |
|
126,546 |
Derivative liabilities |
311,665 |
|
126,461 |
|
162,640 |
|
66,060 |
Other long-term
liabilities |
62,650 |
|
30,950 |
|
64,196 |
|
32,323 |
Equity |
2,062,384 |
|
967,848 |
|
2,220,477 |
|
1,028,770 |
Total
liabilities and equity |
8,168,570 |
|
3,440,578 |
|
8,324,086 |
|
3,511,749 |
|
|
|
|
|
Investments in
equity-accounted joint ventures |
|
967,848 |
|
|
1,028,770 |
Advances to equity-accounted
joint ventures |
|
129,550 |
|
|
126,546 |
Unrealized credit loss provisions(2) |
|
(4,674 |
) |
|
— |
Investments in and advances, net to equity-accounted joint
ventures |
|
1,092,724 |
|
|
1,155,316 |
(1) |
The Partnership's equity-accounted vessels as at September 30,
2020 and December 31, 2019 include: the Partnership’s 40 percent
ownership interest in Teekay Nakilat (III) Corporation, which owns
four LNG carriers; the Partnership’s 50 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 23 LPG carriers; the
Partnership’s ownership interest ranging from 20 percent to 30
percent in four LNG carriers chartered to Shell in the Pan Union
Joint Venture; the Partnership’s 50 percent ownership interest in
six ARC7 LNG carriers in the Yamal LNG Joint Venture; and the
Partnership's 30 percent ownership interest in the Bahrain LNG
Joint Venture, which owns an LNG receiving and regasification
terminal in Bahrain. |
|
|
(2) |
The unrealized credit loss provisions relate to the
Partnership's adoption of ASC 326 effective January 1, 2020. |
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 impact of COVID-19 and related
global events on the Partnership's operations and cash flows;
expected increase in the Partnership’s earnings and cash flows
commencing in the fourth quarter of 2020; the Partnership’s ability
to achieve previously disclosed financial guidance for 2020; fixed
charter coverage for the Partnership's LNG fleet for the remainder
of 2020 and 2021; the Partnership's operational performance and
cost competitiveness; expected reductions in the Partnership’s
interest costs as it continues to reduce its debt levels; and the
continued performance of the Partnership's and its joint ventures'
charter contracts. 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: 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,
including as a result of off-hire days or dry-docking requirements;
delays in the Partnership’s ability to successfully and timely
complete dry dockings; general market conditions and trends,
including spot, multi-month and multi-year charter rates; inability
of customers of the Partnership or any of its joint ventures to
make future payments under contracts; potential further delays to
the formal commencement of commercial operations of the Bahrain
Regasification Terminal; the inability of the Partnership to renew
or replace long-term contracts on existing 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, 2019. 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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