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, 2021.
Consolidated Financial
Summary
|
Three Months Ended |
|
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
(in thousands of U.S. Dollars, except per unit
data) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL COMPARISON |
|
|
|
Voyage revenues |
146,577 |
148,769 |
148,935 |
Income from vessel operations |
57,644 |
64,736 |
69,597 |
Equity income |
39,238 |
28,940 |
24,346 |
Net income attributable to the
partners and preferred unitholders |
66,974 |
53,288 |
40,275 |
Limited partners’ interest in
net income per common unit |
0.68 |
0.53 |
0.38 |
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
Total adjusted EBITDA(1) |
177,980 |
183,512 |
186,902 |
Distributable cash flow (DCF)(1) |
74,677 |
78,979 |
79,168 |
Adjusted net income
attributable to the partners and preferred unitholders(1) |
54,704 |
57,017 |
58,933 |
Limited partners’ interest in adjusted net income per common
unit |
0.54 |
0.57 |
0.59 |
(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 2021 Compared to Second
Quarter of 2021
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders for the
three months ended September 30, 2021, compared to the three
months ended June 30, 2021, were impacted primarily by an increase
in general and administrative expenses related to the Transaction
with Stonepeak, an increase in scheduled off-hire days relating to
vessel upgrades and dry dockings during the third quarter of 2021,
and the redeployment of an LNG carrier in August 2021 at a lower
rate. These decreases were partially offset by lower vessel
operating expenses during the third quarter of 2021 due primarily
to the timing of maintenance activities.
GAAP net income attributable to the partners and
preferred unitholders for the three months ended September 30,
2021 was also positively impacted by foreign currency exchange
gains and unrealized gains on non-designated derivative instruments
in the third quarter of 2021 compared to foreign currency exchange
losses and unrealized losses on non-designated derivative
instruments in the second quarter of 2021.
Third Quarter of 2021 Compared to Third
Quarter of 2020
GAAP net income and non-GAAP adjusted net income
attributable to the partners and preferred unitholders for the
three months ended September 30, 2021, compared to the same quarter
of the prior year, were impacted primarily by an increase in
general and administrative expenses related to the Transaction with
Stonepeak, an increase in scheduled off-hire days relating to
vessel upgrades and dry dockings during the third quarter of 2021,
and the redeployment of two LNG carriers at lower rates in March
2021 and August 2021, respectively.
GAAP net income attributable to the partners and
preferred unitholders was positively impacted by the reversal of
certain unrealized credit loss provisions and foreign currency
exchange gains in the third quarter of 2021 compared to an increase
in unrealized credit loss provisions and foreign currency exchange
losses in the third quarter of 2020.
CEO Commentary
“While we were once again well-served by our
strong contract coverage, Teekay LNG's third quarter results were,
as expected, negatively impacted by a heavier-than-normal drydock
schedule, partially offset by lower operating expenses and stronger
results in our multi-gas carrier fleet,” commented Mark Kremin,
President and Chief Executive Officer of Teekay Gas Group Ltd.
Mr. Kremin continued, “In early-October, we
announced that Teekay LNG had entered into a merger agreement with
an affiliate of Stonepeak whereby the affiliate has agreed to
acquire 100 percent of Teekay LNG's common units. We believe that
the transaction will enable common unitholders to realize an
attractive valuation and immediate liquidity on closing of the
transaction. In addition, under Stonepeak's ownership, we expect
Teekay LNG will have greater access to competitively priced capital
for both fleet renewal and potential future growth, which has not
been available to Teekay LNG through the public capital markets for
many years."
(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).
Summary of Recent Events
Stonepeak Transaction
On October 4, 2021, the Partnership and an
affiliate of Stonepeak, a leading alternative investment firm
specializing in infrastructure and real assets, entered into an
agreement and plan of merger (the Merger Agreement), whereby the
Partnership will become a wholly-owned subsidiary of such
affiliate. Under the Merger Agreement and a separate agreement
between such affiliate and Teekay Corporation (Teekay), it will
acquire (a) all the issued and outstanding common units of Teekay
LNG, including approximately 36.0 million common units owned by
Teekay, and (b) 100 percent of Teekay’s ownership in the General
Partner, which includes an economic ownership interest equivalent
to approximately 1.6 million Teekay LNG common units, in each case
for $17.00 per common unit or common unit equivalent in cash
(collectively, the Transaction). The $17.00 per unit acquisition
price represents a premium of 8.3 percent to the closing price of
Teekay LNG’s common units on October 1, 2021, and premiums of 12.3
percent and 17.5 percent to the volume-weighted average prices of
Teekay LNG’s common units over the prior 60 and 180 trading days,
respectively. In addition, common unitholders of record on November
5, 2021 will receive the third quarter common unit distribution of
$0.2875 per unit on November 12, 2021.
The Transaction remains subject to approval by
the holders of a majority of Teekay LNG's outstanding common units
and the satisfaction or waiver of other customary closing
conditions. The Transaction is expected to close on or soon after
December 31, 2021, and the Merger Agreement provides it will not
close prior to such date. Teekay, which currently owns
approximately 41 percent of Teekay LNG’s outstanding common units,
has entered into a voting and support agreement with the Stonepeak
affiliate by which Teekay has agreed, among other things and
subject to certain conditions, to vote all its Teekay LNG common
units in favor of the merger.
As part of the Transaction, Teekay has also
agreed to transfer to Teekay LNG, following restructuring of such
companies, the ownership of the management services companies that
currently deliver the operations for Teekay LNG and certain of its
joint ventures under existing management services contracts.
Following this transfer, Teekay's remaining subsidiaries will
continue to provide existing services to Teekay, its subsidiaries
and other third parties.
After the completion of the Transaction, the
common units of the Partnership will be delisted from the New York
Stock Exchange. The Series A and B preferred units of the
Partnership will continue to trade on the New York Stock Exchange
following the completion of the Transaction.
Results of Norwegian Bondholder Meeting
On October 27, 2021, the Partnership held a
bondholder meeting to approve certain amendments required to
complete the Transaction. At the meeting, the Partnership received
approval for the required amendments to the bonds maturing in 2023
and 2025, respectively. The Partnership and the bond trustee will
amend the terms of the bonds accordingly.
Operating Results
The following table highlights certain financial
information for Teekay LNG’s segments: the Liquefied Natural Gas
Segment and the Liquefied Petroleum Gas 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, 2021 |
September 30, 2020 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
|
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Total |
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Total |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
Voyage revenues |
133,754 |
12,823 |
|
146,577 |
138,953 |
9,982 |
|
148,935 |
Income (loss) from vessel operations |
58,000 |
(356 |
) |
57,644 |
70,313 |
(716 |
) |
69,597 |
Equity income |
35,241 |
3,997 |
|
39,238 |
22,674 |
1,672 |
|
24,346 |
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
Consolidated adjusted EBITDA(i) |
93,108 |
1,352 |
|
94,460 |
104,473 |
1,227 |
|
105,700 |
Adjusted EBITDA from equity-accounted vessels(i) |
72,928 |
10,592 |
|
83,520 |
71,683 |
9,519 |
|
81,202 |
Total adjusted EBITDA(i) |
166,036 |
11,944 |
|
177,980 |
176,156 |
10,746 |
|
186,902 |
(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 LNG segment for the three months ended
September 30, 2021, compared to the same quarter of the prior
year, decreased primarily due to an increase in scheduled off-hire
days relating to vessel upgrades and dry dockings during the third
quarter of 2021, and the redeployment of two LNG carriers at lower
charter rates in March 2021 and August 2021, respectively.
Equity income from equity-accounted vessels(1)
for the LNG segment for the three months ended September 30,
2021, compared to the same quarter of the prior year, increased
primarily due to lower interest expense due to lower debt balances
and lower operational claims in certain of the Partnership's joint
ventures during the third quarter of 2021. Equity income was also
positively impacted by the reversal of certain unrealized credit
loss provisions in the third quarter of 2021 compared to an
increase in unrealized credit loss provisions in the third quarter
of 2020
Liquefied Petroleum Gas
Segment
Loss from vessel operations decreased and
consolidated adjusted EBITDA(1) increased for the LPG segment for
the three months ended September 30, 2021, compared to the
same quarter of the prior year, primarily due to higher spot
multi-gas rates earned during the third quarter of 2021.
Equity income and adjusted EBITDA from
equity-accounted vessels(1) for the LPG segment for the three
months ended September 30, 2021, compared to the same quarter
of the prior year, increased primarily due to higher spot LPG rates
earned and fewer scheduled dry dockings of LPG carriers in the
Partnership's 50 percent-owned LPG joint venture with Exmar NV (the
Exmar LPG Joint Venture) during the third quarter of 2021. Equity
income was also positively impacted by gains on the sale of two LPG
carriers in the Exmar LPG Joint Venture during the third quarter of
2021.
(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, 2021. 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 |
28(iii) |
Total |
75 |
(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, 2021, the Partnership
had total liquidity of $335.0 million (comprised of $109.6 million
in cash and cash equivalents and $225.4 million in undrawn credit
facilities) compared to $381.9 million as of June 30, 2021.
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, 21 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 Hamilton
Tel: +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.
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 unrealized credit loss provisions or reversals, unrealized
gains or losses on non-designated derivative instruments,
write-downs of vessels, gains or losses on sales of vessels,
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 (2) 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, realized losses on interest
rate swap termination, unrealized credit loss provisions and
reversals, distributions relating to preferred units, adjustments
for direct financing and sales-type leases to a cash basis,
unrealized foreign currency exchange gains or losses, write-downs
of vessels, gains or losses on sales of vessels, 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 Month ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
2021 |
2021 |
2020 |
2021 |
2020 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Voyage revenues |
146,577 |
|
148,769 |
|
148,935 |
|
448,148 |
|
437,027 |
|
|
|
|
|
|
|
Voyage expenses |
(7,221 |
) |
(6,360 |
) |
(3,950 |
) |
(20,764 |
) |
(11,596 |
) |
Vessel operating expenses |
(30,426 |
) |
(32,536 |
) |
(30,642 |
) |
(93,051 |
) |
(85,153 |
) |
Time-charter hire expenses |
(5,665 |
) |
(5,867 |
) |
(5,980 |
) |
(17,382 |
) |
(17,270 |
) |
Depreciation and amortization |
(33,002 |
) |
(32,349 |
) |
(32,601 |
) |
(97,253 |
) |
(96,869 |
) |
General and administrative expenses |
(12,619 |
) |
(6,921 |
) |
(6,165 |
) |
(26,707 |
) |
(20,215 |
) |
Write-down of vessels(1) |
— |
|
— |
|
— |
|
— |
|
(45,000 |
) |
Income from vessel operations |
57,644 |
|
64,736 |
|
69,597 |
|
192,991 |
|
160,924 |
|
|
|
|
|
|
|
Equity income(2) |
39,238 |
|
28,940 |
|
24,346 |
|
105,694 |
|
56,874 |
|
Interest expense |
(29,513 |
) |
(30,084 |
) |
(30,528 |
) |
(89,249 |
) |
(102,375 |
) |
Interest income |
1,315 |
|
1,302 |
|
1,406 |
|
4,623 |
|
5,473 |
|
Realized and unrealized gain
(loss) on non-designated derivative instruments(3) |
101 |
|
(2,870 |
) |
(1,327 |
) |
3,849 |
|
(30,314 |
) |
Foreign currency exchange gain (loss)(4) |
2,767 |
|
(2,843 |
) |
(7,853 |
) |
6,884 |
|
(14,738 |
) |
Other income (expense)(5) |
1,000 |
|
(1,088 |
) |
(14,149 |
) |
(3,857 |
) |
(15,189 |
) |
Net income before income tax expense |
72,552 |
|
58,093 |
|
41,492 |
|
220,935 |
|
60,655 |
|
Income tax expense |
(2,226 |
) |
(1,815 |
) |
(1,420 |
) |
(3,264 |
) |
(2,128 |
) |
Net income |
70,326 |
|
56,278 |
|
40,072 |
|
217,671 |
|
58,527 |
|
|
|
|
|
|
|
Non-controlling interest in net income (loss) |
3,352 |
|
2,990 |
|
(203 |
) |
9,818 |
|
6,312 |
|
Preferred unitholders' interest in net income |
6,425 |
|
6,425 |
|
6,425 |
|
19,275 |
|
19,275 |
|
General partner's interest in net income |
1,062 |
|
823 |
|
595 |
|
3,311 |
|
519 |
|
Limited partners’ interest in net income |
59,487 |
|
46,040 |
|
33,255 |
|
185,267 |
|
32,421 |
|
Limited partners'
interest in net income per common unit: |
|
|
|
|
|
• Basic |
0.68 |
|
0.53 |
|
0.38 |
|
2.13 |
|
0.40 |
|
• Diluted |
0.68 |
|
0.53 |
|
0.38 |
|
2.12 |
|
0.39 |
|
Weighted-average
number of common units outstanding: |
|
|
|
|
|
• Basic(6) |
87,120,897 |
|
86,970,999 |
|
86,951,234 |
|
87,081,753 |
|
82,010,753 |
|
• Diluted |
87,232,991 |
|
87,133,146 |
|
87,041,046 |
|
87,218,410 |
|
82,109,826 |
|
Total
number of common units outstanding at end of period |
87,010,420 |
|
86,984,843 |
|
86,951,234 |
|
87,010,420 |
|
86,951,234 |
|
(1) In 2020, the Partnership wrote-down six
wholly-owned multi-gas carriers (the Pan Spirit, Unikum Spirit,
Vision Spirit, Camilla Spirit, Sonoma Spirit and Cathinka Spirit)
to their estimated fair values. The total impairment charge of
$45.0 million related to these six multi-gas carriers is included
in write-down of vessels for the nine months ended September 30,
2020.
(2) 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 Month Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2021 |
2021 |
2020 |
2021 |
2020 |
Equity income |
39,238 |
|
28,940 |
24,346 |
|
105,694 |
|
56,874 |
Proportionate share of unrealized (gain) loss on non-designated
interest rate swaps |
(3,823 |
) |
2,310 |
(2,680 |
) |
(16,923 |
) |
23,330 |
Proportionate share of unrealized credit loss (reversals)
provisions |
(1,650 |
) |
635 |
7,099 |
|
5,662 |
|
15,656 |
Proportionate share of gain of sale of vessels |
(636 |
) |
— |
— |
|
(636 |
) |
— |
Other items |
(144 |
) |
182 |
1,167 |
|
(282 |
) |
990 |
Equity income adjusted for items in Appendix A |
32,985 |
|
32,067 |
29,932 |
|
93,515 |
|
96,850 |
(3) 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 Month Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2021 |
2021 |
2020 |
2021 |
2020 |
Realized losses relating to: |
|
|
|
|
|
Interest rate swap agreements |
(3,919 |
) |
(3,925 |
) |
(4,947 |
) |
(12,317 |
) |
(11,520 |
) |
Interest rate swap agreements termination(i) |
— |
|
— |
|
— |
|
(18,012 |
) |
— |
|
Foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
(241 |
) |
|
(3,919 |
) |
(3,925 |
) |
(4,947 |
) |
(30,329 |
) |
(11,761 |
) |
Unrealized gains (losses) relating to: |
|
|
|
|
|
Interest rate swap agreements |
4,020 |
|
1,055 |
|
3,620 |
|
34,178 |
|
(18,755 |
) |
Foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
202 |
|
|
4,020 |
|
1,055 |
|
3,620 |
|
34,178 |
|
(18,553 |
) |
Total realized and unrealized gains (losses) on non-designated
derivative instruments |
101 |
|
(2,870 |
) |
(1,327 |
) |
3,849 |
|
(30,314 |
) |
(i) The termination of an interest rate swap
agreement during the nine months ended September 30, 2021 was
in connection with a debt refinancing completed in February 2021 at
a lower all-in interest rate.
(4) 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 gains (losses) relating to the amounts the Partnership
paid to settle the Partnership’s Norwegian Krone (NOK) denominated
unsecured bonds and the associated non-designated cross currency
swaps that were entered into as economic hedges in relation to the
NOK denominated 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 Month Ended |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
2021 |
2021 |
2020 |
2021 |
2020 |
Realized losses on cross-currency swaps |
(1,595 |
) |
(1,293 |
) |
(1,669 |
) |
(4,233 |
) |
(4,916 |
) |
Realized losses on cross-currency swaps maturity |
— |
|
— |
|
— |
|
— |
|
(33,844 |
) |
Realized gains on repurchase of NOK bonds |
— |
|
— |
|
— |
|
— |
|
33,844 |
|
Unrealized (losses) gains on cross currency swaps |
(3,952 |
) |
(2,262 |
) |
1,490 |
|
(1,085 |
) |
(2,169 |
) |
Unrealized gains (losses) on revaluation of NOK bonds |
5,856 |
|
2,217 |
|
(1,836 |
) |
6,884 |
|
(1,657 |
) |
(5) Includes unrealized credit loss reversals
(provisions) of $1.3 million, ($0.7 million) and ($14.4 million)
for the three months ended September 30, 2021, June 30, 2021 and
September 30, 2020, respectively, and ($3.1 million) and ($14.6
million) for the nine months ended September 30, 2021 and September
30, 2020, respectively.
(6) Includes common units related to
non-forfeitable unit-based compensation.
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, |
|
2021 |
2021 |
2020 |
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
Current |
|
|
|
Cash and cash equivalents |
109,596 |
|
144,206 |
|
206,762 |
|
Restricted cash – current |
8,840 |
|
8,610 |
|
8,358 |
|
Accounts receivable |
16,135 |
|
12,230 |
|
7,631 |
|
Prepaid expenses |
13,056 |
|
11,948 |
|
9,259 |
|
Current portion of derivative assets |
465 |
|
258 |
|
— |
|
Current portion of net investments in direct financing leases,
net |
14,632 |
|
14,285 |
|
13,969 |
|
Current portion of advances to equity-accounted joint ventures
leases, net |
8,162 |
|
8,160 |
|
10,991 |
|
Advances to affiliates |
14,664 |
|
6,940 |
|
4,924 |
|
Other current assets |
5,972 |
|
3,071 |
|
237 |
|
Total current assets |
191,522 |
|
209,708 |
|
262,131 |
|
|
|
|
|
Restricted cash – long-term |
37,191 |
|
37,384 |
|
42,823 |
|
Vessels and equipment |
|
|
|
At cost, less accumulated depreciation |
1,194,238 |
|
1,197,551 |
|
1,220,355 |
|
Vessels related to finance leases, at cost, less accumulated
depreciation |
1,642,436 |
|
1,644,654 |
|
1,654,814 |
|
Operating lease right-of-use assets |
10,338 |
|
13,887 |
|
20,750 |
|
Total vessels and equipment |
2,847,012 |
|
2,856,092 |
|
2,895,919 |
|
Investments in and advances to equity-accounted joint ventures,
net |
1,154,202 |
|
1,117,271 |
|
1,056,792 |
|
Net investments in direct financing leases, net |
484,507 |
|
487,276 |
|
500,101 |
|
Other assets |
31,564 |
|
26,386 |
|
22,382 |
|
Derivative assets |
5,253 |
|
6,925 |
|
4,505 |
|
Intangible assets, net |
27,868 |
|
30,082 |
|
34,510 |
|
Goodwill |
34,841 |
|
34,841 |
|
34,841 |
|
Total assets |
4,813,960 |
|
4,805,965 |
|
4,854,004 |
|
LIABILITIES AND EQUITY |
|
|
|
Current |
|
|
|
Accounts payable |
9,170 |
|
3,721 |
|
4,883 |
|
Accrued liabilities |
66,414 |
|
64,113 |
|
81,706 |
|
Unearned revenue |
19,488 |
|
17,800 |
|
30,254 |
|
Current portion of long-term debt |
350,372 |
|
355,081 |
|
250,508 |
|
Current obligations related to finance leases |
73,437 |
|
72,925 |
|
71,932 |
|
Current portion of operating lease liabilities |
10,338 |
|
13,887 |
|
14,003 |
|
Current portion of derivative liabilities |
27,023 |
|
26,375 |
|
56,925 |
|
Advances from affiliates |
13,802 |
|
8,086 |
|
11,047 |
|
Total current liabilities |
570,044 |
|
561,988 |
|
521,258 |
|
Long-term debt |
1,035,320 |
|
1,062,298 |
|
1,221,705 |
|
Long-term obligations related to finance leases |
1,213,607 |
|
1,232,130 |
|
1,268,990 |
|
Long-term operating lease liabilities |
— |
|
— |
|
6,747 |
|
Other long-term liabilities |
57,585 |
|
56,104 |
|
56,063 |
|
Derivative liabilities |
25,910 |
|
29,131 |
|
32,971 |
|
Total liabilities |
2,902,466 |
|
2,941,651 |
|
3,107,734 |
|
Equity |
|
|
|
Limited partners – common units |
1,580,034 |
|
1,545,448 |
|
1,465,408 |
|
Limited partners – preferred units |
285,159 |
|
285,159 |
|
285,159 |
|
General partner |
48,230 |
|
47,613 |
|
46,182 |
|
Accumulated other comprehensive loss |
(63,706 |
) |
(72,272 |
) |
(103,836 |
) |
Partners' equity |
1,849,717 |
|
1,805,948 |
|
1,692,913 |
|
Non-controlling interest |
61,777 |
|
58,366 |
|
53,357 |
|
Total equity |
1,911,494 |
|
1,864,314 |
|
1,746,270 |
|
Total liabilities and total equity |
4,813,960 |
|
4,805,965 |
|
4,854,004 |
|
Teekay LNG Partners
L.P.Consolidated Statements of Cash
Flows(in thousands of U.S. Dollars)
|
Nine Months Ended |
|
September 30, |
September 30, |
|
2021 |
2020 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents and restricted cash provided by (used
for) |
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
Net income |
217,671 |
|
58,527 |
|
Non-cash and non-operating items: |
|
|
Unrealized (gain) loss on non-designated derivative
instruments |
(34,178 |
) |
18,553 |
|
Depreciation and amortization |
97,253 |
|
96,869 |
|
Write-down of vessels |
— |
|
45,000 |
|
Unrealized foreign currency exchange (gain) loss including the
effect of the settlement of cross currency swaps |
(13,125 |
) |
10,697 |
|
Equity income, net of distributions received $39,089 (2020 –
$32,297) |
(66,605 |
) |
(24,577 |
) |
Amortization of deferred financing issuance costs included in
interest expense |
4,134 |
|
4,401 |
|
Change in unrealized credit loss provisions included in other
expense |
3,117 |
|
14,557 |
|
Other non-cash items |
3,823 |
|
3,595 |
|
Change in operating assets and liabilities: |
|
|
Receipts from direct financing and sales-type leases |
11,108 |
|
270,973 |
|
Expenditures for dry docking |
(10,818 |
) |
(1,984 |
) |
Other operating assets and liabilities |
(74,683 |
) |
15,960 |
|
Net operating cash flow |
137,697 |
|
512,571 |
|
FINANCING ACTIVITIES |
|
|
|
|
|
Proceeds from issuance of long-term debt |
237,691 |
|
561,127 |
|
Scheduled repayments of long-term debt and settlement of related
swaps |
(174,415 |
) |
(220,875 |
) |
Prepayments of long-term debt |
(136,543 |
) |
(687,061 |
) |
Financing issuance costs |
(2,631 |
) |
(5,111 |
) |
Scheduled repayments of obligations related to finance leases |
(53,878 |
) |
(52,419 |
) |
Repurchase of common units |
— |
|
(15,635 |
) |
Cash distributions paid |
(92,306 |
) |
(75,845 |
) |
Dividends paid to non-controlling interests |
(2,923 |
) |
(3,390 |
) |
Acquisition of non-controlling interest in certain of the
Partnership's subsidiaries |
— |
|
(2,219 |
) |
Net financing cash flow |
(225,005 |
) |
(501,428 |
) |
INVESTING ACTIVITIES |
|
|
Expenditures for vessels and equipment |
(25,338 |
) |
(9,597 |
) |
Proceeds from repayments of advances to equity-accounted joint
ventures |
10,330 |
|
— |
|
Net investing cash flow |
(15,008 |
) |
(9,597 |
) |
(Decrease) increase in cash, cash equivalents and
restricted cash |
(102,316 |
) |
1,546 |
|
Cash, cash equivalents and restricted cash, beginning of the
period |
257,943 |
|
253,291 |
|
Cash, cash equivalents and restricted cash, end of the
period |
155,627 |
|
254,837 |
|
Supplemental cash flow information |
|
|
The accompanying notes are an integral part of the consolidated
financial statements. |
|
|
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, |
2021 |
2021 |
2020 |
(unaudited) |
(unaudited) |
(unaudited) |
Net income – GAAP basis |
70,326 |
|
56,278 |
|
40,072 |
|
Less:
net (income) loss attributable to non-controlling interests |
(3,352 |
) |
(2,990 |
) |
203 |
|
Net income attributable to the partners and preferred
unitholders |
66,974 |
|
53,288 |
|
40,275 |
|
Add (subtract) specific items affecting net income: |
|
|
|
Foreign currency exchange (gains) losses(1) |
(4,362 |
) |
1,550 |
|
6,184 |
|
Unrealized credit loss (reversals) provisions, unrealized (gains)
and losses on non-designated derivative instruments and other
items from equity-accounted investees(2) |
(6,253 |
) |
3,127 |
|
5,586 |
|
Unrealized (gains) on non-designated derivative instruments and
realized loss from interest rate swap termination(3) |
(4,020 |
) |
(1,055 |
) |
(3,620 |
) |
Unrealized credit loss provisions and other items(4) |
1,909 |
|
383 |
|
14,397 |
|
Non-controlling interests’ share of items above(5) |
456 |
|
(276 |
) |
(3,889 |
) |
Total adjustments |
(12,270 |
) |
3,729 |
|
18,658 |
|
Adjusted net income attributable to the partners and
preferred unitholders |
54,704 |
|
57,017 |
|
58,933 |
|
|
|
|
|
Preferred unitholders' interest in adjusted net income |
6,425 |
|
6,425 |
|
6,425 |
|
General partner's interest in adjusted net income |
847 |
|
889 |
|
923 |
|
Limited partners’ interest in adjusted net income |
47,432 |
|
49,703 |
|
51,585 |
|
Limited partners’ interest in
adjusted net income per common unit, basic |
0.54 |
|
0.57 |
|
0.59 |
|
Weighted-average number of
common units outstanding, basic |
87,120,897 |
|
86,970,999 |
|
86,951,234 |
|
(1) Foreign currency exchange (gains) losses
primarily relate to the Partnership’s revaluation of all foreign
currency-denominated monetary assets and liabilities based on the
prevailing exchange rate at the end of each reporting period and
unrealized losses (gains) 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 4 to the Consolidated Statements of Income included
in this release for further details.
(2) Reflects the proportionate share of
unrealized credit loss (reversals) provisions and unrealized
(gains) and 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 2 to the Consolidated Statements of Income
included in this release for further details.
(3) Reflects the unrealized gains due to changes
in the mark-to-market value of the Partnership's derivative
instruments that are not designated as hedges for accounting
purposes and realized losses related to interest rate swap
agreement termination. See Note 3 to the Consolidated Statements of
Income included in this release for further details.
(4) Includes adjustments for unrealized credit
loss provisions, adjustments relating to changes in deferred tax
balances and, for the three months ended September 30, 2021,
certain costs related to the Transaction with Stonepeak.
(5) 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, |
2021 |
2021 |
2020 |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Net income |
70,326 |
|
56,278 |
|
40,072 |
|
Add: |
|
|
|
Partnership’s share of equity-accounted joint ventures' DCF net of
estimated maintenance capital expenditures(1) |
41,782 |
|
40,356 |
|
38,065 |
|
Depreciation and amortization |
33,002 |
|
32,349 |
|
32,601 |
|
Direct financing and sales-type lease payments received in excess
of revenue recognized and other adjustments |
3,814 |
|
3,694 |
|
3,502 |
|
Deferred income tax and other non-cash items |
1,103 |
|
652 |
|
(709 |
) |
Subtract: |
|
|
|
Unrealized credit loss (reversals) provisions |
(1,300 |
) |
744 |
|
14,397 |
|
Unrealized gains on non-designated derivative instruments |
(4,020 |
) |
(1,055 |
) |
(3,620 |
) |
Foreign currency exchange (gain) loss |
(4,362 |
) |
1,550 |
|
6,184 |
|
Distributions relating to preferred units |
(6,425 |
) |
(6,425 |
) |
(6,425 |
) |
Estimated maintenance capital expenditures |
(14,667 |
) |
(14,511 |
) |
(14,683 |
) |
Equity income |
(39,238 |
) |
(28,940 |
) |
(24,346 |
) |
Distributable Cash Flow before non-controlling
interest |
80,015 |
|
84,692 |
|
85,038 |
|
Non-controlling
interests’ share of DCF before estimated maintenance capital
expenditures |
(5,338 |
) |
(5,713 |
) |
(5,870 |
) |
Distributable Cash Flow |
74,677 |
|
78,979 |
|
79,168 |
|
Amount of cash
distributions attributable to the General Partner |
(447 |
) |
(447 |
) |
(389 |
) |
Limited partners' Distributable Cash Flow |
74,230 |
|
78,532 |
|
78,779 |
|
Weighted-average
number of common units outstanding, basic |
87,120,897 |
|
86,970,999 |
|
86,951,234 |
|
Distributable Cash Flow per limited partner common
unit |
0.85 |
|
0.90 |
|
0.91 |
|
(1) The Partnership’s share of estimated
maintenance capital expenditures relating to its equity-accounted
joint ventures were $15.1 million, $15.2 million and $15.4 million
for the three months ended September 30, 2021, June 30, 2021 and
September 30, 2020, 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, |
June 30, |
September 30, |
2021 |
2021 |
2020 |
(unaudited) |
(unaudited) |
(unaudited) |
Net income |
70,326 |
|
56,278 |
|
40,072 |
|
Depreciation and amortization |
33,002 |
|
32,349 |
|
32,601 |
|
Interest expense, net of interest income |
28,198 |
|
28,782 |
|
29,122 |
|
Income tax expense |
2,226 |
|
1,815 |
|
1,420 |
|
EBITDA |
133,752 |
|
119,224 |
|
103,215 |
|
|
|
|
|
Add (subtract) specific income statement items affecting
EBITDA: |
|
|
|
Foreign currency exchange (gain) loss |
(2,767 |
) |
2,843 |
|
7,853 |
|
Other (income) expense |
(1,000 |
) |
1,088 |
|
14,149 |
|
Equity income |
(39,238 |
) |
(28,940 |
) |
(24,346 |
) |
Realized and unrealized (gain) loss on non-designated derivative
instruments |
(101 |
) |
2,870 |
|
1,327 |
|
Direct financing lease payments received in excess of revenue
recognized and other adjustments |
3,814 |
|
3,694 |
|
3,502 |
|
Consolidated adjusted EBITDA |
94,460 |
|
100,779 |
|
105,700 |
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
83,520 |
|
82,733 |
|
81,202 |
|
Total adjusted EBITDA |
177,980 |
|
183,512 |
|
186,902 |
|
|
|
|
|
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, 2021 |
|
(unaudited) |
|
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas Segment |
Total |
Voyage revenues |
133,754 |
|
12,823 |
|
146,577 |
|
Voyage expenses |
(1,778 |
) |
(5,443 |
) |
(7,221 |
) |
Vessel operating expenses |
(25,326 |
) |
(5,100 |
) |
(30,426 |
) |
Time-charter hire expenses |
(5,665 |
) |
— |
|
(5,665 |
) |
Depreciation and amortization |
(31,294 |
) |
(1,708 |
) |
(33,002 |
) |
General and administrative expenses |
(11,691 |
) |
(928 |
) |
(12,619 |
) |
Income (loss) from vessel operations |
58,000 |
|
(356 |
) |
57,644 |
|
Depreciation and amortization |
31,294 |
|
1,708 |
|
33,002 |
|
Direct financing lease
payments received in excess of revenue recognized and other
adjustments |
3,814 |
|
— |
|
3,814 |
|
Consolidated adjusted EBITDA |
93,108 |
|
1,352 |
|
94,460 |
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
|
(unaudited) |
|
Liquefied Natural Gas Segment |
Liquefied Petroleum Gas 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 financing lease
payments received in excess of revenue recognized and
other adjustments |
3,502 |
|
— |
|
3,502 |
|
Consolidated adjusted EBITDA |
104,473 |
|
1,227 |
|
105,700 |
|
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, 2021 |
September 30, 2020 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Voyage revenues |
249,353 |
|
107,741 |
|
246,488 |
|
106,626 |
|
Voyage expenses |
(832 |
) |
(247 |
) |
(2,815 |
) |
(1,367 |
) |
Vessel operating expenses, time-charter hire expenses and general
and administrative expenses |
(77,765 |
) |
(33,643 |
) |
(74,398 |
) |
(32,778 |
) |
Depreciation and amortization |
(26,002 |
) |
(12,973 |
) |
(26,485 |
) |
(13,328 |
) |
Gain on sale of vessels |
1,272 |
|
636 |
|
— |
|
— |
|
Income from vessel operations of equity-accounted vessels |
146,026 |
|
61,514 |
|
142,790 |
|
59,153 |
|
Net interest expense |
(60,610 |
) |
(24,471 |
) |
(61,584 |
) |
(25,133 |
) |
Income tax expense |
(920 |
) |
(360 |
) |
(449 |
) |
(235 |
) |
Other items including realized and unrealized gain (loss) on
derivative instruments and unrealized credit loss reversals
(provisions) |
6,741 |
|
2,555 |
|
(26,623 |
) |
(9,439 |
) |
Net income / equity income of equity-accounted vessels |
91,237 |
|
39,238 |
|
54,134 |
|
24,346 |
|
Net income / equity income of equity-accounted LNG vessels |
83,091 |
|
35,241 |
|
50,627 |
|
22,674 |
|
Net income / equity income of equity-accounted LPG vessels |
8,146 |
|
3,997 |
|
3,507 |
|
1,672 |
|
|
|
|
|
|
Net income / equity income of equity-accounted vessels |
91,237 |
|
39,238 |
|
54,134 |
|
24,346 |
|
Depreciation and amortization |
26,002 |
|
12,973 |
|
26,485 |
|
13,328 |
|
Net interest expense |
60,610 |
|
24,471 |
|
61,584 |
|
25,133 |
|
Income tax expense |
920 |
|
360 |
|
449 |
|
235 |
|
EBITDA from equity-accounted vessels |
178,769 |
|
77,042 |
|
142,652 |
|
63,042 |
|
|
|
|
|
|
Add (subtract) specific income statement items affecting
EBITDA: |
|
|
|
|
Other items including realized and unrealized (gain) loss on
derivative instruments and unrealized credit loss (reversals)
provisions |
(6,741 |
) |
(2,555 |
) |
26,623 |
|
9,439 |
|
Gain on sale of vessels |
(1,272 |
) |
(636 |
) |
— |
|
— |
|
Direct financing and sales-type lease payments received in excess
of revenue recognized |
29,218 |
|
10,625 |
|
26,752 |
|
9,677 |
|
Amortization of in-process contracts |
(1,758 |
) |
(956 |
) |
(1,759 |
) |
(956 |
) |
Adjusted EBITDA from equity-accounted vessels |
198,216 |
|
83,520 |
|
194,268 |
|
81,202 |
|
Adjusted EBITDA from equity-accounted LNG vessels |
177,033 |
|
72,928 |
|
175,231 |
|
71,683 |
|
Adjusted EBITDA from equity-accounted LPG vessels |
21,183 |
|
10,592 |
|
19,037 |
|
9,519 |
|
(1) The Partnership's equity-accounted vessels
for the three months ended September 30, 2021 and 2020
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 the Exmar LPG Joint Venture, which owns and
in-charters 21 LPG carriers as at September 30, 2021, compared to
23 owned and in-chartered LPG carriers as at September 30, 2020;
the Partnership’s ownership interests ranging from 20 to 30 percent
in four LNG carriers 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; and the
Partnership's 30 percent ownership interest in the Bahrain LNG
Joint Venture, which owns an LNG receiving and regasification
terminal 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, 2021 |
As at December 31, 2020 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Cash and restricted cash, current and non-current |
662,675 |
|
283,200 |
|
549,454 |
|
225,049 |
|
Other current assets |
71,737 |
|
28,864 |
|
67,580 |
|
25,415 |
|
Property, plant and equipment,
including owned vessels, vessels related to finance leases and
operating lease right-of-use assets |
1,889,600 |
|
962,995 |
|
1,961,820 |
|
1,000,386 |
|
Net investments in sales-type and direct financing leases, current
and non-current |
5,285,026 |
|
2,039,742 |
|
5,384,652 |
|
2,077,707 |
|
Derivative assets |
11,469 |
|
5,740 |
|
— |
|
— |
|
Other non-current assets |
95,737 |
|
54,413 |
|
87,248 |
|
51,812 |
|
Total assets |
8,016,244 |
|
3,374,954 |
|
8,050,754 |
|
3,380,369 |
|
|
|
|
|
|
Current portion of long-term
debt and obligations related to finance leases and operating
leases |
323,604 |
|
138,589 |
|
306,185 |
|
129,538 |
|
Current portion of derivative liabilities |
65,921 |
|
25,649 |
|
68,966 |
|
27,988 |
|
Other current liabilities |
188,049 |
|
81,328 |
|
164,266 |
|
65,311 |
|
Long-term debt and obligations related to finance leases and
operating leases |
4,597,374 |
|
1,858,713 |
|
4,789,260 |
|
1,938,748 |
|
Shareholders' loans, current and non-current |
335,864 |
|
115,102 |
|
341,113 |
|
121,778 |
|
Derivative liabilities |
166,011 |
|
68,027 |
|
280,480 |
|
112,922 |
|
Other long-term liabilities |
81,479 |
|
35,984 |
|
70,743 |
|
33,353 |
|
Equity |
2,257,942 |
|
1,051,562 |
|
2,029,741 |
|
950,731 |
|
Total liabilities and equity |
8,016,244 |
|
3,374,954 |
|
8,050,754 |
|
3,380,369 |
|
|
|
|
|
|
Investments in equity-accounted joint ventures |
|
1,051,562 |
|
|
950,731 |
|
Advances to equity-accounted joint ventures |
|
115,102 |
|
|
121,778 |
|
Unrealized credit loss provisions |
|
(4,300 |
) |
|
(4,726 |
) |
Investments in and advances, net to equity-accounted joint
ventures, current and non-current |
|
1,162,364 |
|
|
1,067,783 |
|
(1) The Partnership's equity-accounted vessels
as at September 30, 2021 and December 31, 2020 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 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 the Exmar LPG Joint Venture, which owns and
in-charters 21 LPG carriers as at September 30, 2021, compared to
23 owned and in-chartered LPG carriers as at December 31, 2020; 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.
Forward-Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the U.S. Securities Act of
1933, as amended, and Section 21E of the U.S. Securities Exchange
Act of 1934, as amended. All statements included in this report,
other than statements of historical fact, are forward-looking
statements. Statements about the expected timing, completion and
effects of the proposed Merger (as defined below) and related
transactions and all other statements in this report, other than
historical facts, constitute forward-looking statements. When used
in this report, the words “expect,” “believe,” “anticipate,”
“plan,” “intend,” “estimate,” “may,” “will” or similar words are
intended to identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements and any such forward-looking statements are qualified in
their entirety by reference to the following cautionary statements.
All forward-looking statements speak only as of the date hereof and
are based on current expectations and involve a number of
assumptions, risks and uncertainties that could cause actual
results to differ materially from such forward-looking statements.
The proposed acquisition by merger of the Partnership by an
affiliate of Stonepeak (the Merger) and other Transactions may not
be completed on the terms described herein or other acceptable
terms or at all because of a number of factors, including, among
others: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger
Agreement or any other document relating to the Transaction (the
Transaction Documents), (2) the failure to obtain the common
unitholder approval of the Merger or the failure to satisfy other
closing conditions in the Merger Agreement or any other Transaction
Document, (3) the potential for regulatory authorities to require
divestitures, operational remedies or other concessions in order to
obtain their approval of the proposed Merger, (4) risks related to
disruption of management’s attention from the Partnership’s ongoing
business operations due to the proposed Merger, (5) the effect of
the announcement of the proposed Merger on (i) the ability of the
Partnership or Teekay to retain and hire key personnel and maintain
relationships with the Partnership’s customers, suppliers or (ii)
the Partnership’s operating results and business generally, (6) the
proposed Merger may involve unexpected costs, liabilities or
delays, (7) the Partnership’s business may suffer as a result of
the uncertainty surrounding the proposed Merger, including the
timing of the consummation thereof, (8) the outcome of any legal
proceeding relating to the proposed Merger, (9) the Partnership may
be adversely affected by other economic, business or competitive
factors, including, among others, those related to the COVID-19
pandemic, and (10) other risks to consummation of the proposed
Merger, including the risk that it will not be consummated within
the expected time period or at all, which may adversely affect the
Partnership’s and/or Teekay’s business and the price of their
common units or common shares. In addition, if the Merger is
completed, the Partnership may not realize expected benefits for
its customers, employees, joint venture partners or capital
providers and Teekay may not realize expected benefits to it or its
business.
Actual results may differ materially from those
indicated by such forward-looking statements. In addition, the
forward-looking statements represent the Partnership’s and Teekay’s
respective views as of the date on which such statements were made.
It is anticipated that subsequent events and developments may cause
these views to change. However, although the Partnership or Teekay
may elect to update these forward-looking statements at some point
in the future, each specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as
representing views as of any date subsequent to the date hereof.
Additional factors that may affect the business or financial
results of the Partnership or Teekay are described in the risk
factors included in its filings with the SEC, including the
Partnership’s and Teekay’s respective Annual Reports on Form 20-F
for the year ended December 31, 2020, as updated by subsequent
filings with or submissions to the SEC. Each of the Partnership and
Teekay expressly disclaims a duty to provide updates to
forward-looking statements, whether as a result of new information,
future events or other occurrences, except as required by
applicable law.
Additional Information and Where to Find
It
This communication relates to the proposed
Merger involving the Partnership. In connection with the proposed
Merger, the Partnership has furnished a proxy statement and may
file or furnish other relevant materials with the U.S. Securities
and Exchange Commission (SEC). The proxy statement and a form of
proxy have also been mailed or otherwise furnished to the
Partnership’s common unitholders. BEFORE MAKING ANY VOTING
DECISION, TEEKAY LNG’S COMMON UNITHOLDERS ARE URGED TO READ THE
PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY
OTHER DOCUMENTS TO BE FILED WITH OR FURNISHED TO THE SEC IN
CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN
THE PROXY STATEMENT, IF ANY, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE
PROPOSED MERGER. This communication is not a substitute for the
proxy statement or any other document that the Partnership may file
with or furnish to the SEC. Investors and unitholders will be able
to obtain the documents (when available) free of charge at the
SEC’s website, http://www.sec.gov, and the Partnership’s website,
www.teekay.com. In addition, the documents (when available) may be
obtained free of charge by directing a request by e-mail or
telephone to: investor.relations@teekay.com and
+1-604-609-2963.
Participants in the
Solicitation
The Partnership, Teekay and certain of their
respective directors, executive officers of applicable
subsidiaries, certain other members of management and employees of
the Partnership and Teekay or such subsidiaries and agents retained
by the Partnership may be deemed to be participants in the
solicitation of proxies from common unitholders of the Partnership
in favor of the proposed Merger. Information about directors and
executive officers of the Partnership or applicable affiliates and
their beneficial ownership of the Partnership’s common units is set
forth in the Partnership’s Annual Report on Form 20-F for the year
ended December 31, 2020, as filed with the SEC on April 1, 2021.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials when they become
available.
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