HAMILTON, BERMUDA--(Marketwired - May 18, 2017) -
Highlights
- Reported GAAP net income attributable to the partners and preferred unitholders of $29.1 million and adjusted net income
attributable to the partners and preferred unitholders(1) of $21.1 million in the first quarter of 2017.
- Generated distributable cash flow(1) of $43.2 million, or $0.54 per common unit, in the first quarter of
2017.
- Completed or nearing completion of approximately $640 million of new long-term financings for the Partnership's growth
projects to fund two MEGI LNG carrier newbuildings and two 50 percent-owned ARC7 Ice-Class LNG carrier newbuildings for the
Yamal LNG project.
- Took delivery of the Partnership's third MEGI LNG carrier newbuilding, the Torben Spirit, which commenced its
charter contract in March 2017.
- Exmar LPG Joint Venture acquired attractively priced mid-size LPG carrier newbuilding, which is scheduled to deliver in
mid-2018.
Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership)
(NYSE:TGP), today reported the Partnership's results for the quarter ended March 31, 2017.
|
Three Months Ended |
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL COMPARISON |
|
|
|
Voyage revenues |
101,180 |
|
100,774 |
|
95,771 |
|
Income from vessel operations |
46,078 |
|
38,010 |
|
16,983 |
|
Equity income |
5,887 |
|
9,728 |
|
9,498 |
|
Net income (loss) attributable to the partners and preferred unitholders |
29,057 |
|
84,411 |
|
(37,138 |
) |
NON-GAAP FINANCIAL COMPARISON |
|
|
|
Total cash flow from vessel operations (CFVO) (1) |
109,211 |
|
114,534 |
|
114,429 |
|
Distributable cash flow (DCF) (1) |
43,227 |
|
50,199 |
|
54,404 |
|
Adjusted net income attributable to the partners and preferred unitholders(1) |
21,093 |
|
28,958 |
|
34,151 |
|
(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).
CEO Commentary
"During the first quarter, the Partnership's results were in-line with our expectations," commented Mark Kremin, President and
CEO of Teekay Gas Group Ltd. "This included a one-month contribution from the delivery of our third MEGI LNG carrier newbuilding,
the Torben Spirit, named after Teekay's late-founder, J. Torben Karlshoej, which commenced its charter contract in
early-March 2017."
"Since reporting earnings in February 2017, we continued to execute on our portfolio of committed growth projects and
opportunistically acquired a mid-size LPG carrier newbuilding through our 50 percent-owned Exmar LPG joint venture," Mr. Kremin
continued. "In addition, we have now completed or are nearing completion of financing for all the Partnership's committed growth
projects delivering through mid-2018 with the recent progress on approximately $640 million in new long-term financings. We
expect to secure the remainder of the required long-term financings for the Partnership's committed growth projects within the
second half of 2017."
Summary of Recent Events
Debt Financing Update
In April and May 2017, the Partnership completed approximately $355 million in new long-term financings for its committed
growth projects, including: (i) a $175 million sale-leaseback transaction for one of the Partnership's MEGI LNG carrier
newbuildings scheduled to deliver in 2017, and (ii) a $180 million sale-leaseback transaction for one of the Partnership's MEGI
LNG carrier newbuildings scheduled to deliver in 2018. Furthermore, the Partnership is nearing completion on a $285(1)
million sale-leaseback transaction for two of the Partnership's 50 percent-owned ARC7 Ice-Class LNG carrier newbuildings for the
Yamal LNG project, which are scheduled to deliver in 2018.
In March 2017, the Partnership's 52 percent-owned joint venture with Marubeni Corporation (MALT LNG Joint Venture)
completed a refinancing of four LNG carriers with a new $335 million debt facility.
MALT LNG Joint Venture Secures 18-month Firm Charter Plus One-Year Option
In May 2017, the MALT LNG Joint Venture signed an 18-month charter contract (plus one-year extension option) with a major
Japanese utility company, commencing in the fourth quarter of 2018. This charter contract will be serviced by one of the MALT LNG
Joint Venture's existing vessels currently trading in the short-term market.
Exmar LPG Joint Venture Acquires Mid-Size Gas Carrier Newbuilding
In April 2017, the Partnership's 50/50 joint venture with Exmar (Exmar LPG Joint Venture) agreed to acquire an
existing mid-size LPG carrier newbuilding, which is scheduled to deliver in mid-2018. The acquisition is consistent with the
Exmar LPG Joint Venture's strategy of fleet renewal to preserve its market share and contract of affreightment (CoA)
franchise with its customers in both the Ammonia and LPG trade. The installment payments on the vessel are expected to be
financed by the Exmar LPG Joint Venture's existing liquidity and the joint venture expects to secure long-term financing prior to
delivery.
Charter Contracts with Skaugen
On April 20, 2017, in lieu of receiving cash on a portion of the charter hire on six LPG carriers on charter with I.M. Skaugen
SE (Skaugen), the Partnership took over Skaugen's 35 percent ownership interest in a 2003-built LPG carrier, the
Norgas Sonoma. As part of this transaction, the Partnership also acquired the remaining 65 percent ownership in this
vessel from the other shareholders for a total purchase price of approximately $13 million (including Skaugen's 35 percent
ownership interest that was transferred to the Partnership). The vessel is currently trading in the Norgas pool. Giving pro forma
effect for this transaction, Skaugen owed the Partnership approximately $8.3 million in outstanding charter hire and accrued
interest thereon as of March 31, 2017.
(1) Based on Teekay LNG's proportionate ownership interests in the projects.
Charter Contracts with Awilco LNG
In April 2017, the Partnership commenced charter extension and deferral negotiations with Awilco LNG regarding two modern LNG
vessels chartered to Awilco LNG, which include purchase obligations for Awilco LNG to acquire the vessels in November 2017 and
September 2018. These negotiations are expected to conclude in the second quarter of 2017.
Operating Results
The following table highlights certain financial information for Teekay LNG's two segments: the Liquefied Gas Segment and the
Conventional Tanker Segment (please refer to the "Teekay LNG's Fleet" section of this release below and Appendices C
through E for further details).
|
Three Months Ended |
|
March 31, 2017 |
March 31, 2016 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
|
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
Voyage revenues |
88,947 |
|
12,233 |
|
101,180 |
|
78,585 |
|
17,186 |
|
95,771 |
|
Income (loss) from vessel operations |
43,336 |
|
2,742 |
|
46,078 |
|
40,189 |
|
(23,206 |
) |
16,983 |
|
Equity income |
5,887 |
|
- |
|
5,887 |
|
9,498 |
|
- |
|
9,498 |
|
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
CFVO from consolidated vessels(i) |
71,783 |
|
5,379 |
|
77,162 |
|
63,132 |
|
10,548 |
|
73,680 |
|
|
CFVO from equity-accounted vessels(i) |
32,049 |
|
- |
|
32,049 |
|
40,749 |
|
- |
|
40,749 |
|
|
Total CFVO(i) |
103,832 |
|
5,379 |
|
109,211 |
|
103,881 |
|
10,548 |
|
114,429 |
|
- 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 Gas Segment
Income from vessel operations and cash flow from vessel operations from consolidated vessels increased for the three months
ended March 31, 2017 compared to the same quarter of the prior year primarily due to the deliveries of the Creole Spirit
and Oak Spirit MEGI LNG carrier newbuildings, which commenced their five-year charter contracts with Cheniere Energy in
late-February 2016 and early-August 2016, respectively; the delivery of the Torben Spirit MEGI LNG carrier newbuilding,
which commenced its 10-month plus one-year option charter contract with a major energy company in early-March 2017; and
additional revenue recognized in the first quarter of 2017 relating to the accelerated dry docking of two LNG carriers, the costs
of which are reimbursed by the charterer. These increases were partially offset by lower revenues from the Partnership's six LPG
carriers on charter to Skaugen as a portion of the first quarter revenue was not recognized as a result of a temporary deferral
agreement and the scheduled dry docking of an LNG carrier in the first quarter of 2017.
Equity income and cash flow from vessel operations from equity-accounted vessels decreased for the three months ended March
31, 2017 compared to the same quarter of the prior year primarily due to lower redeployment rates for certain LPG carriers and
the sale of an older LPG carrier (net of the additions of three LPG carrier newbuildings which delivered between February to
November 2016) in the Exmar LPG Joint Venture; a further deferral of a portion of the charter payments for the Marib Spirit and
Arwa Spirit, effective August 2016; and lower spot rates earned on the redeployment of the Magellan Spirit and Methane Spirit
after their short-term charter contracts ended in June and July 2016, respectively, in the Partnership's 52 percent-owned MALT
LNG Joint Venture. Equity income was also impacted by unrealized gains on non-designated derivative instruments during the three
months ended March 31, 2017, compared to unrealized losses in the same period of the prior year.
Conventional Tanker Segment
Income from vessel operations for the three months ended March 31, 2017 compared to the same quarter of the prior year
increased primarily due to the loss on the sales of the Bermuda Spirit and Hamilton Spirit recorded in the
first quarter of 2016, partially offset by lower revenues in the three months ended March 31, 2017 due to the sale of the
Asian Spirit in March 2017 and the sales of the Bermuda Spirit and Hamilton Spirit in 2016. Cash flow
from vessel operations also decreased due to these vessel sales.
Teekay LNG's Fleet
The following table summarizes the Partnership's fleet as of May 1, 2017:
|
Number of Vessels |
|
Owned and In-Chartered Vessels (i) |
Newbuildings |
Total |
LNG Carrier Fleet |
32(ii) |
18(ii) |
50 |
LPG/Multigas Carrier Fleet |
26(iii) |
4(iv) |
30 |
Conventional Tanker Fleet |
5 |
- |
5 |
Total |
63 |
22 |
85 |
|
|
i. |
Owned vessels includes vessels accounted for under capital 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 99 percent. |
iv. |
The Partnership's interest in these vessels is 50 percent. |
Liquidity
As of March 31, 2017, the Partnership had total liquidity of $395.0 million (comprised of $181.2 million in cash and cash
equivalents and $213.8 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, May 18, 2017 at 11:00 a.m. (ET) to discuss the results for the
first quarter of 2017. All unitholders and interested parties are invited to listen to the live conference call by choosing from
the following options:
• |
By dialing (866) 564-7439 or (416) 640-5942, if outside North America, and quoting conference ID code
9327780. |
• |
By accessing the webcast, which will be available on Teekay LNG's website at http://www.teekay.com/ (the archive will remain on the web site for a period of one year).
|
An accompanying First Quarter Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and
crude oil marine transportation services primarily under long-term, fee-based charter contracts through its interests in 50 LNG
carriers (including 18 newbuildings), 30 LPG/Multigas carriers (including four newbuildings) and five conventional tankers. The
Partnership's interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in
a regasification facility, which is currently under construction. Teekay LNG Partners L.P. is a publicly-traded master limited
partnership (MLP) formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG
and LPG shipping sectors.
Teekay LNG Partners' common and preferred units trade on the New York Stock Exchange under the symbol "TGP" and "TGP PR A",
respectively.
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S.
Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow from Vessel Operations, Adjusted
Net Income, and Distributable Cash Flow, are intended to provide additional information and should not be considered a substitute
for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings, and
may not be comparable to similar measures presented by other companies. The Partnership believes that certain investors use this
information to evaluate the Partnership's financial performance, as does management.
Cash Flow from Vessel Operations
Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and
amortization expense, amortization of in-process revenue contracts, vessel write-downs, losses on the sale of vessels and
adjustments for direct financing leases to a cash basis, but includes realized gains or losses on a derivative charter contract.
CFVO from Consolidated Vessels represents CFVO from vessels that are consolidated on the Partnership's financial
statements. CFVO from Equity-Accounted Vessels represents the Partnership's proportionate share of CFVO from its
equity-accounted vessels. The Partnership does not control its equity-accounted vessels and as a result, the Partnership does not
have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the
equity-accounted investments or distributed to the Partnership and other shareholders. In addition, the Partnership does not
control the timing of such distributions to the Partnership and other shareholders. Consequently, readers are cautioned when
using total CFVO as a liquidity measure as the amount contributed from CFVO from Equity-Accounted Vessels may not be
available to the Company in the periods such CFVO is generated by the equity-accounted vessels. CFVO is a non-GAAP financial
measure used by certain investors to measure the operational financial performance of companies. Please refer to Appendices
D and E of this release for reconciliations of these non-GAAP financial measures to the most directly comparable
GAAP measures reflected in the Partnership's consolidated financial statements.
Adjusted Net Income
Adjusted net income excludes from net income items of income or loss 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. Please refer to Appendix A of this release for a
reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure reflected in the Partnership's
consolidated financial statements.
Distributable Cash Flow
Distributable cash flow (DCF) represents 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, ineffectiveness for derivative instruments designated as hedges for accounting purposes,
distributions relating to equity financing of newbuilding installments, adjustments for direct financing leases to a cash basis
and foreign exchange related items, including the Partnership's proportionate share of such items in equity-accounted for
investments. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the
operating capacity of, or the revenue generated by, the Partnership's capital assets. Distributable cash flow is a quantitative
standard used in the publicly-traded partnership investment community to assist in evaluating financial performance. Please refer
to Appendix B of this release for a reconciliation of this non-GAAP financial measure to the most directly comparable
GAAP measure reflected in the Partnership's consolidated financial statements.
Teekay LNG Partners L.P.
Consolidated Statements of Income (Loss)
(in thousands of U.S. Dollars, except units outstanding)
|
Three Months Ended |
|
March 31, |
December 31, |
March 31, |
2017 |
2016 |
2016 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Voyage revenues |
101,180 |
|
100,774 |
|
95,771 |
|
|
|
|
|
Voyage expenses |
(1,437 |
) |
(302 |
) |
(457 |
) |
Vessel operating expenses |
(23,388 |
) |
(22,270 |
) |
(21,853 |
) |
Depreciation and amortization |
(26,120 |
) |
(25,021 |
) |
(23,611 |
) |
General and administrative expenses |
(4,157 |
) |
(3,634 |
) |
(5,428 |
) |
Write-down and loss on sale of vessels(1) |
- |
|
(11,537 |
) |
(27,439 |
) |
Income from vessel operations |
46,078 |
|
38,010 |
|
16,983 |
|
|
|
|
|
Equity income(2) |
5,887 |
|
9,728 |
|
9,498 |
|
Interest expense |
(16,988 |
) |
(15,934 |
) |
(13,997 |
) |
Interest income |
854 |
|
783 |
|
602 |
|
Realized and unrealized gain (loss) on non-designated derivative instruments(3) |
1,187 |
|
43,245 |
|
(38,089 |
) |
Foreign currency exchange (loss) gain(4) |
(3,568 |
) |
15,474 |
|
(10,118 |
) |
Other income |
391 |
|
314 |
|
419 |
|
Net income (loss) before tax expense |
33,841 |
|
91,620 |
|
(34,702 |
) |
Income tax expense |
(157 |
) |
(251 |
) |
(261 |
) |
Net income (loss) |
33,684 |
|
91,369 |
|
(34,963 |
) |
|
|
|
|
Non-controlling interest in net income (loss) |
4,627 |
|
6,958 |
|
2,175 |
|
Preferred unitholders' interest in net income (loss) |
2,812 |
|
2,719 |
|
- |
|
General Partner's interest in net income (loss) |
525 |
|
1,634 |
|
(743 |
) |
Limited partners' interest in net income (loss) |
25,720 |
|
80,058 |
|
(36,395 |
) |
Weighted-average number of common units outstanding: |
|
|
|
• Basic |
79,590,153 |
|
79,571,820 |
|
79,557,872 |
|
• Diluted |
79,690,391 |
|
79,705,854 |
|
79,557,872 |
|
Total number of common units outstanding at end of period |
79,626,819 |
|
79,571,820 |
|
79,571,820 |
|
|
|
|
|
|
|
|
(1) |
Write-down and loss on sale of vessels for the three months ended December 31, 2016 relates to the
write-down of the Asian Spirit Suezmax tanker which was sold and delivered to its new owner in March 2017.
Write-down and loss on sale of vessels for the three months ended March 31, 2016 relates to Centrofin Management Inc.
(Centrofin) exercising its purchase options, under the 12-year charter contracts, to acquire the Bermuda
Spirit and Hamilton Spirit Suezmax tankers. |
(2) |
The Partnership's proportionate share of items within equity income as identified in Appendix A of
this release is detailed in the table below. By excluding these items from equity income, the Partnership believes the
resulting adjusted equity income is a normalized amount that can be used to evaluate the financial performance of the
Partnership's equity-accounted investments. Adjusted equity income is a non-GAAP financial measure. |
|
|
|
Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2017 |
2016 |
2016 |
Equity income |
5,887 |
|
9,728 |
|
9,498 |
Proportionate share of unrealized (gain) loss on non-designated derivative instruments |
(1,784 |
) |
(8,078 |
) |
3,901 |
Proportionate share of ineffective portion of hedge-accounted interest rate swaps |
(543 |
) |
(364 |
) |
160 |
Proportionate share of write-down of vessel |
- |
|
4,861 |
|
- |
Proportionate share of other items |
30 |
|
1,162 |
|
77 |
Equity income adjusted for items in Appendix A |
3,590 |
|
7,309 |
|
13,636 |
|
|
|
|
|
|
(3) |
The realized gains (losses) on non-designated derivative instruments relate to the amounts the Partnership
actually paid or received to settle non-designated derivative instruments and the unrealized gains (losses) on
non-designated derivative instruments relate to the change in fair value of such non-designated derivative instruments, as
detailed in the table below: |
|
|
|
Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2017 |
2016 |
2016 |
Realized (losses) gains relating to: |
|
|
|
Interest rate swap agreements |
(4,675 |
) |
(6,190 |
) |
(6,643 |
) |
Interest rate swaption agreements |
395 |
|
- |
|
- |
|
Toledo Spirit time-charter derivative contract |
15 |
|
(1,274 |
) |
630 |
|
|
(4,265 |
) |
(7,464 |
) |
(6,013 |
) |
|
|
|
|
Unrealized gains (losses) relating to: |
|
|
|
Interest rate swap agreements |
4,302 |
|
34,068 |
|
(20,657 |
) |
Interest rate swaption agreements |
30 |
|
16,601 |
|
(11,669 |
) |
Toledo Spirit time-charter derivative contract |
1,120 |
|
40 |
|
250 |
|
|
5,452 |
|
50,709 |
|
(32,076 |
) |
|
|
|
|
Total realized and unrealized gains (losses) on non-designated derivative instruments |
1,187 |
|
43,245 |
|
(38,089 |
) |
|
|
(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 (Loss). |
|
|
|
Foreign currency exchange (loss) gain includes realized losses relating to the amounts the Partnership paid
to settle or terminate the Partnership's non-designated cross-currency swaps that were entered into as economic hedges in
relation to the Partnership's Norwegian Kroner (NOK) denominated unsecured bonds and realized gains on bond
repurchases. Foreign currency exchange (loss) gain also includes unrealized gains (losses) relating to the change in fair
value of such derivative instruments, partially offset by unrealized (losses) gains on the revaluation of the NOK bonds as
detailed in the table below: |
|
|
|
Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2017 |
2016 |
2016 |
Realized losses on cross-currency swaps |
(3,537 |
) |
(2,160 |
) |
(2,291 |
) |
Realized losses on cross-currency swaps termination |
- |
|
(17,711 |
) |
- |
|
Realized gains on repurchase of NOK bonds |
- |
|
16,782 |
|
- |
|
Unrealized gains (losses) on cross-currency swaps |
2,699 |
|
(6,053 |
) |
21,312 |
|
Unrealized (losses) gains on revaluation of NOK bonds |
(606 |
) |
12,644 |
|
(20,430 |
) |
Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
|
As at March 31, |
December 31, |
|
2017 |
2016 |
|
(unaudited) |
(unaudited) |
ASSETS |
|
|
Current |
|
|
Cash and cash equivalents |
181,201 |
|
126,146 |
|
Restricted cash - current |
9,155 |
|
10,145 |
|
Accounts receivable |
24,270 |
|
25,224 |
|
Prepaid expenses |
3,889 |
|
3,724 |
|
Vessel held for sale |
- |
|
20,580 |
|
Current portion of derivative assets |
1,630 |
|
531 |
|
Current portion of net investments in direct financing leases |
149,291 |
|
150,342 |
|
Advances to affiliates |
11,354 |
|
9,739 |
|
Total current assets |
380,790 |
|
346,431 |
|
|
|
|
Restricted cash - long-term |
97,746 |
|
106,882 |
|
|
|
|
Vessels and equipment |
|
|
At cost, less accumulated depreciation |
1,363,980 |
|
1,374,128 |
|
Vessels under capital leases, at cost, less accumulated depreciation |
680,430 |
|
484,253 |
|
Advances on newbuilding contracts |
361,179 |
|
357,602 |
|
Total vessels and equipment |
2,405,589 |
|
2,215,983 |
|
Investment in and advances to equity-accounted joint ventures |
1,077,355 |
|
1,037,726 |
|
Net investments in direct financing leases |
488,561 |
|
492,666 |
|
Other assets |
4,375 |
|
5,529 |
|
Derivative assets |
2,258 |
|
4,692 |
|
Intangible assets - net |
67,720 |
|
69,934 |
|
Goodwill - liquefied gas segment |
35,631 |
|
35,631 |
|
Total assets |
4,560,025 |
|
4,315,474 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
Current |
|
|
Accounts payable |
5,364 |
|
5,562 |
|
Accrued liabilities |
36,504 |
|
35,881 |
|
Unearned revenue |
20,808 |
|
16,998 |
|
Current portion of long-term debt |
187,111 |
|
188,511 |
|
Current obligations under capital lease |
81,780 |
|
40,353 |
|
Current portion of in-process contracts |
10,262 |
|
15,833 |
|
Current portion of derivative liabilities |
57,453 |
|
56,800 |
|
Advances from affiliates |
23,690 |
|
15,492 |
|
Total current liabilities |
422,972 |
|
375,430 |
|
Long-term debt |
1,626,968 |
|
1,602,715 |
|
Long-term obligations under capital lease |
518,399 |
|
352,486 |
|
Long-term unearned revenue |
10,007 |
|
10,332 |
|
Other long-term liabilities |
60,646 |
|
60,573 |
|
In-process contracts |
6,521 |
|
8,233 |
|
Derivative liabilities |
118,187 |
|
128,293 |
|
Total liabilities |
2,763,700 |
|
2,538,062 |
|
|
|
|
Equity |
|
|
Limited partners - common units |
1,578,503 |
|
1,563,852 |
|
Limited partners - preferred units |
123,519 |
|
123,426 |
|
General partner |
50,952 |
|
50,653 |
|
Accumulated other comprehensive income |
486 |
|
575 |
|
Partners' equity |
1,753,460 |
|
1,738,506 |
|
Non-controlling interest |
42,865 |
|
38,906 |
|
Total equity |
1,796,325 |
|
1,777,412 |
|
Total liabilities and total equity |
4,560,025 |
|
4,315,474 |
|
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
|
Three Months Ended |
|
March 31, |
March 31, |
|
2017 |
2016 |
|
(unaudited) |
(unaudited) |
Cash and cash equivalents provided by (used for) |
|
|
OPERATING ACTIVITIES |
|
|
Net income (loss) |
33,684 |
|
(34,963 |
) |
Non-cash items: |
|
|
|
Unrealized (gain) loss on non-designated derivative instruments |
(5,452 |
) |
32,076 |
|
|
Depreciation and amortization |
26,120 |
|
23,611 |
|
|
Loss on sale of vessels |
- |
|
27,439 |
|
|
Unrealized foreign currency exchange loss and other |
727 |
|
9,366 |
|
|
Equity income |
(5,887 |
) |
(9,498 |
) |
|
Ineffective portion on qualifying cash flow hedging instruments included in interest expense |
- |
|
1,398 |
|
Change in operating assets and liabilities |
12,496 |
|
(11,589 |
) |
Expenditures for dry docking |
(5,668 |
) |
(155 |
) |
Net operating cash flow |
56,020 |
|
37,685 |
|
|
|
|
FINANCING ACTIVITIES |
|
|
Proceeds from issuance of long-term debt |
61,424 |
|
3,364 |
|
Debt issuance costs |
(585 |
) |
- |
|
Scheduled repayments of long-term debt |
(25,290 |
) |
(29,792 |
) |
Prepayments of long-term debt |
(18,704 |
) |
(20,000 |
) |
Scheduled repayments of capital lease obligations |
(13,485 |
) |
(6,681 |
) |
Decrease in restricted cash |
9,384 |
|
6,591 |
|
Cash distributions paid |
(14,086 |
) |
(11,364 |
) |
Dividends paid to non-controlling interest |
(658 |
) |
(23 |
) |
Other |
(571 |
) |
- |
|
Net financing cash flow |
(2,571 |
) |
(57,905 |
) |
|
|
|
INVESTING ACTIVITIES |
|
|
Capital contributions to equity-accounted joint ventures |
(77,786 |
) |
(4,029 |
) |
Return of capital from equity-accounted joint ventures |
40,320 |
|
- |
|
Receipts from direct financing leases |
5,156 |
|
7,836 |
|
Proceeds from sale of vessel |
20,580 |
|
- |
|
Proceeds from sale-leaseback of vessels |
220,825 |
|
179,434 |
|
Expenditures for vessels and equipment |
(207,489 |
) |
(151,357 |
) |
Net investing cash flow |
1,606 |
|
31,884 |
|
|
|
|
Increase in cash and cash equivalents |
55,055 |
|
11,664 |
|
Cash and cash equivalents, beginning of the period |
126,146 |
|
102,481 |
|
Cash and cash equivalents, end of the period |
181,201 |
|
114,145 |
|
Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)
|
Three Months Ended |
March 31, |
2017 |
2016 |
(unaudited) |
(unaudited) |
Net income (loss) - GAAP basis |
33,684 |
|
(34,963 |
) |
Less: Net income attributable to non-controlling interests |
(4,627 |
) |
(2,175 |
) |
Net income (loss) attributable to the partners and preferred unitholders |
29,057 |
|
(37,138 |
) |
Add (subtract) specific items affecting net income: |
|
|
|
Unrealized foreign currency exchange (gains) losses(1) |
(52 |
) |
7,740 |
|
|
Unrealized (gains) losses on non-designated derivative instruments(2) |
(5,452 |
) |
32,076 |
|
|
Interest rate swaption agreements termination |
(395 |
) |
- |
|
|
Ineffective portion on qualifying cash flow hedging instruments included in interest expense |
- |
|
1,398 |
|
|
Unrealized (gains) losses on non-designated and designated derivative instruments and other items from
equity-accounted investees(3) |
(2,297 |
) |
4,138 |
|
|
Loss on sale of vessels(4) |
- |
|
27,439 |
|
|
Non-controlling interests' share of items above(5) |
232 |
|
(1,502 |
) |
Total adjustments |
(7,964 |
) |
71,289 |
|
Adjusted net income attributable to the partners and preferred
unitholders |
21,093 |
|
34,151 |
|
|
|
(1) |
Unrealized foreign 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 (gains) losses on the cross-currency swaps economically hedging the Partnership's NOK bonds. This
amount excludes the realized losses relating to the cross-currency swaps for the NOK bonds. See Note 4 to the Consolidated
Statements of Income (Loss) included in this release for further details. |
|
|
(2) |
Reflects the unrealized (gains) losses due to changes in the mark-to-market value of derivative instruments
that are not designated as hedges for accounting purposes. See Note 3 to the Consolidated Statements of Income (Loss)
included in this release for further details. |
|
|
(3) |
Reflects the unrealized (gains) losses due to changes in the mark-to-market value of derivative instruments
that are not designated as hedges for accounting purposes and any ineffectiveness for derivative instruments designated as
hedges for accounting purposes within the Partnership's equity-accounted investments. See Note 2 to the Consolidated
Statements of Income (Loss) included in this release for further details. |
|
|
(4) |
See Note 1 to the Consolidated Statements of Income (Loss) included in this release for further
details. |
|
|
(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 listed above" in the table above is the
cumulative amount of the non-controlling interests' proportionate share of the other specific items affecting net income
(loss) listed in the table. |
Teekay LNG Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Distributable Cash Flow (DCF)
(in thousands of U.S. Dollars, except units outstanding and per unit data)
|
Three Months Ended |
March 31, |
2017 |
2016 |
(unaudited) |
(unaudited) |
|
|
|
Net income (loss): |
33,684 |
|
(34,963 |
) |
Add: |
|
|
|
Depreciation and amortization |
26,120 |
|
23,611 |
|
|
Loss on sale of vessels |
- |
|
27,439 |
|
|
Partnership's share of equity-accounted joint ventures' DCF net of estimated maintenance capital
expenditures(1) |
11,660 |
|
20,573 |
|
|
Direct finance lease payments received in excess of revenue recognized |
5,227 |
|
4,866 |
|
|
Distributions relating to equity financing of newbuildings |
1,707 |
|
- |
|
|
|
|
Less: |
|
|
|
Equity income |
(5,887 |
) |
(9,498 |
) |
|
Estimated maintenance capital expenditures |
(12,628 |
) |
(11,976 |
) |
|
Unrealized (gain) loss on non-designated derivative instruments |
(5,452 |
) |
32,076 |
|
|
Unrealized foreign currency exchange (gain) loss |
(52 |
) |
7,740 |
|
|
Ineffective portion on qualifying cash flow hedging instruments included in interest expense |
- |
|
1,398 |
|
|
Distributions relating to preferred units |
(2,812 |
) |
- |
|
|
Deferred income tax and other non-cash items |
(1,670 |
) |
(1,372 |
) |
Distributable Cash Flow before Non-controlling interest |
49,897 |
|
59,894 |
|
Non-controlling interests' share of DCF before estimated maintenance capital expenditures |
(6,670 |
) |
(5,490 |
) |
Distributable Cash Flow |
43,227 |
|
54,404 |
|
Amount of cash distributions attributable to the General Partner |
(228 |
) |
(227 |
) |
Limited partners' Distributable Cash Flow |
42,999 |
|
54,177 |
|
Weighted-average number of common units outstanding |
79,590,153 |
|
79,557,872 |
|
Distributable Cash Flow per limited partner common unit |
0.54 |
|
0.68 |
|
|
|
|
|
|
(1) |
The estimated maintenance capital expenditures relating to the Partnership's share of equity-accounted
joint ventures were $7.7 million and $7.4 million for the three months ended March 31, 2017 and 2016, respectively. |
Teekay LNG Partners L.P.
Appendix C - Supplemental Segment Information
(in thousands of U.S. Dollars)
|
Three Months Ended March 31, 2017 |
|
(unaudited) |
|
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
Voyage revenues |
88,947 |
|
12,233 |
|
101,180 |
|
Voyage expenses |
(346 |
) |
(1,091 |
) |
(1,437 |
) |
Vessel operating expenses |
(18,665 |
) |
(4,723 |
) |
(23,388 |
) |
Depreciation and amortization |
(23,220 |
) |
(2,900 |
) |
(26,120 |
) |
General and administrative expenses |
(3,380 |
) |
(777 |
) |
(4,157 |
) |
Income from vessel operations |
43,336 |
|
2,742 |
|
46,078 |
|
|
|
|
|
|
Three Months Ended March 31, 2016 |
|
(unaudited) |
|
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
Voyage revenues |
78,585 |
|
17,186 |
|
95,771 |
|
Voyage expenses |
(117 |
) |
(340 |
) |
(457 |
) |
Vessel operating expenses |
(15,232 |
) |
(6,621 |
) |
(21,853 |
) |
Depreciation and amortization |
(18,685 |
) |
(4,926 |
) |
(23,611 |
) |
General and administrative expenses |
(4,362 |
) |
(1,066 |
) |
(5,428 |
) |
Loss on sale of vessels |
- |
|
(27,439 |
) |
(27,439 |
) |
Income (loss) from vessel operations |
40,189 |
|
(23,206 |
) |
16,983 |
|
Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Consolidated Vessels
(in thousands of U.S. Dollars)
|
Three Months Ended March 31, 2017 |
|
(unaudited) |
|
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
Income from vessel operations (See Appendix C) |
43,336 |
|
2,742 |
|
46,078 |
|
Depreciation and amortization |
23,220 |
|
2,900 |
|
26,120 |
|
Amortization of in-process contracts included in voyage revenues |
- |
|
(278 |
) |
(278 |
) |
Direct finance lease payments received in excess of revenue recognized |
5,227 |
|
- |
|
5,227 |
|
Realized gain on Toledo Spirit derivative contract |
- |
|
15 |
|
15 |
|
Cash flow from vessel operations from consolidated vessels |
71,783 |
|
5,379 |
|
77,162 |
|
|
|
|
|
|
Three Months Ended March 31, 2016 |
|
(unaudited) |
|
Liquefied Gas Segment |
Conventional Tanker Segment |
Total |
Income (loss) from vessel operations (See Appendix C) |
40,189 |
|
(23,206 |
) |
16,983 |
|
Depreciation and amortization |
18,685 |
|
4,926 |
|
23,611 |
|
Loss on sale of vessels |
- |
|
27,439 |
|
27,439 |
|
Amortization of in-process contracts included in voyage revenues |
(608 |
) |
(278 |
) |
(886 |
) |
Direct finance lease payments received in excess of revenue recognized |
4,866 |
|
- |
|
4,866 |
|
Realized gain on Toledo Spirit derivative contract |
- |
|
630 |
|
630 |
|
Cash flow adjustment for two Suezmax tankers(1) |
- |
|
1,037 |
|
1,037 |
|
Cash flow from vessel operations from consolidated vessels |
63,132 |
|
10,548 |
|
73,680 |
|
|
|
(1) |
The Partnership's charter contracts for two of its former Suezmax tankers, the Bermuda Spirit and
Hamilton Spirit, were amended in 2012, which had the effect of reducing the daily charter rates by $12,000 per day
for a duration of 24 months ended September 30, 2014. The cash effect of the change in hire rates was not fully reflected
in the Partnership's statements of income (loss) as the change in the lease payments was being recognized on a
straight-line basis over the term of the lease. In addition, the charterer of these two Suezmax tankers exercised its
purchase options on these two vessels as permitted under the charter contracts and the vessels were redelivered during the
second quarter of 2016. |
Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Equity-Accounted Vessels
(in thousands of U.S. Dollars)
|
Three Months Ended |
|
March 31, 2017 |
March 31, 2016 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Voyage revenues |
115,043 |
|
51,255 |
|
133,957 |
|
60,793 |
|
Voyage expenses |
(5,343 |
) |
(2,734 |
) |
(4,757 |
) |
(2,380 |
) |
Vessel operating expenses |
(40,580 |
) |
(18,788 |
) |
(41,581 |
) |
(19,367 |
) |
Depreciation and amortization |
(25,828 |
) |
(12,909 |
) |
(24,609 |
) |
(12,311 |
) |
Income from vessel operations of equity-accounted vessels |
43,292 |
|
16,824 |
|
63,010 |
|
26,735 |
|
Other items, including interest expense and realized and unrealized gain (loss) on derivative
instruments |
(23,850 |
) |
(10,937 |
) |
(42,242 |
) |
(17,237 |
) |
Net income / equity income of equity-accounted vessels |
19,442 |
|
5,887 |
|
20,768 |
|
9,498 |
|
|
|
|
|
|
Income from vessel operations of equity-accounted vessels |
43,292 |
|
16,824 |
|
63,010 |
|
26,735 |
|
Depreciation and amortization |
25,828 |
|
12,909 |
|
24,609 |
|
12,311 |
|
Direct finance lease payments received in excess of revenue recognized |
9,426 |
|
3,421 |
|
8,786 |
|
3,186 |
|
Amortization of in-process revenue contracts |
(2,144 |
) |
(1,105 |
) |
(2,899 |
) |
(1,483 |
) |
|
|
|
|
|
Cash flow from vessel operations from equity-accounted vessels |
76,402 |
|
32,049 |
|
93,506 |
|
40,749 |
|
|
|
(1) |
The Partnership's equity-accounted vessels for the three months ended March 31, 2017 and 2016 include: the
Partnership's 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the
Partnership's ownership interests of 49 percent and 50 percent, respectively, in the Excalibur and Excelsior joint
ventures, which own one LNG carrier and one regasification unit, respectively; the Partnership's 33 percent ownership
interest in four LNG carriers servicing the Angola LNG project; the Partnership's 52 percent ownership interest in Malt LNG
Netherlands Holding B.V., the joint venture between the Partnership and Marubeni Corporation, which owns six LNG carriers;
the Partnership's 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 vessels, including three
newbuildings, as at March 31, 2017, compared to 23 vessels owned and in-chartered, including six newbuildings, as at March
31, 2016; the Partnership's 30 percent ownership interest in two LNG carrier newbuildings and 20 percent ownership interest
in two LNG carrier newbuildings for Shell; the Partnership's 50 percent ownership interest in six ARC7 Ice-Class LNG
carrier newbuildings in the joint venture between the Partnership and China LNG Shipping (Holdings) Limited; and the
Partnership's 30 percent ownership interest in Bahrain LNG W.L.L., which owns an LNG receiving and regasification terminal
under construction in Bahrain. |
Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)
|
As at March 31, 2017 |
As at December 31, 2016 |
|
(unaudited) |
(unaudited) |
|
At |
Partnership's |
At |
Partnership's |
100% |
Portion(1) |
100% |
Portion(1) |
Cash and restricted cash, current and non-current |
353,549 |
|
151,493 |
|
400,090 |
|
167,813 |
|
Other current assets |
49,051 |
|
22,517 |
|
72,437 |
|
33,817 |
|
Vessels and equipment |
2,213,241 |
|
1,139,927 |
|
2,174,467 |
|
1,121,293 |
|
Advances on newbuilding contracts |
878,670 |
|
326,567 |
|
824,534 |
|
303,162 |
|
Net investments in direct financing leases, current and non-current |
1,807,554 |
|
662,381 |
|
1,816,365 |
|
665,599 |
|
Other non-current assets |
75,385 |
|
46,631 |
|
73,814 |
|
44,177 |
|
Total assets |
5,377,450 |
|
2,349,516 |
|
5,361,707 |
|
2,335,861 |
|
|
|
|
|
|
Current portion of long-term debt and obligations under capital lease |
144,832 |
|
66,285 |
|
209,814 |
|
99,994 |
|
Current portion of derivative liabilities |
25,926 |
|
8,902 |
|
27,388 |
|
9,622 |
|
Other current liabilities |
81,525 |
|
35,934 |
|
76,480 |
|
32,068 |
|
Long-term debt and obligations under capital lease |
2,604,774 |
|
1,094,465 |
|
2,677,447 |
|
1,087,425 |
|
Shareholders' loans, current and non-current |
707,584 |
|
303,260 |
|
545,028 |
|
272,514 |
|
Derivative liabilities |
78,533 |
|
26,080 |
|
82,738 |
|
27,526 |
|
Other long-term liabilities |
78,236 |
|
40,495 |
|
80,170 |
|
41,500 |
|
Equity |
1,656,040 |
|
774,095 |
|
1,662,642 |
|
765,212 |
|
Total liabilities and equity |
5,377,450 |
|
2,349,516 |
|
5,361,707 |
|
2,335,861 |
|
|
|
|
|
|
Investments in equity-accounted joint ventures |
|
774,095 |
|
|
765,212 |
|
Advances to equity-accounted joint ventures |
|
303,260 |
|
|
272,514 |
|
Investments in and advances to equity-accounted joint ventures |
|
1,077,355 |
|
|
1,037,726 |
|
|
|
(1) |
The Partnership's equity-accounted joint ventures as at March 31, 2017 and December 31, 2016 include: the
Partnership's 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the
Partnership's ownership interests of 49 percent and 50 percent, respectively, in the Excalibur and Excelsior joint
ventures, which own one LNG carrier and one regasification unit, respectively; the Partnership's 33 percent ownership
interest in four LNG carriers servicing the Angola LNG project; the Partnership's 52 percent ownership interest in Malt LNG
Netherlands Holding B.V., the joint venture between the Partnership and Marubeni Corporation, which owns six LNG carriers;
the Partnership's 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 vessels, including three
newbuildings, as at March 31, 2017, compared to 23 vessels owned and in-chartered, including four newbuildings, as at
December 31, 2016; the Partnership's 30 percent ownership interest in two LNG carrier newbuildings and 20 percent ownership
interest in two LNG carrier newbuildings for Shell; the Partnership's 50 percent ownership interest in six ARC7 Ice-Class
LNG carrier newbuildings in the joint venture between the Partnership and China LNG Shipping (Holdings) Limited; and the
Partnership's 30 percent ownership interest in Bahrain LNG W.L.L., which owns an LNG receiving and regasification terminal
under construction in Bahrain. |
Forward Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as
amended) which reflect management's current views with respect to certain future events and performance, including statements
regarding: the timing and cost of newbuilding vessel deliveries and the commencement of related contracts; the financing for
Exmar LPG Joint Venture's mid-size LPG carrier newbuilding acquisition; the commencement of the charter contract for one of the
MALT LNG Joint Venture vessels; the timing, amount and certainty of securing financing for the Partnership's committed growth
projects, including the expected completion of the sale-leaseback financing transaction for two of the Partnership's 50
percent-owned ARC7 Ice-Class LNG carrier newbuildings for the Yamal LNG project; and the outcome of discussions with Awilco LNG.
The following factors are among those that could cause actual results to differ materially from the forward-looking statements,
which involve risks and uncertainties, and that should be considered in evaluating any such statement: potential shipyard and
project construction delays, newbuilding specification changes or cost overruns; changes in production of LNG or LPG, either
generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification
projects significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the
timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing
vessels in the Teekay LNG fleet; the inability of charterers to make future charter payments; the inability of the Partnership to
renew or replace long-term contracts on existing vessels; the Partnership's and the Partnership's joint ventures' ability to
secure financing for its existing newbuildings and projects; the inability of the Partnership to negotiate acceptable terms with
Awilco LNG; 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, 2016. 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.