Teekay LNG Partners Reports Fourth Quarter and Annual 2015 Results
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HAMILTON, BERMUDA -- (Marketwired) -- 02/18/16 -- Highlights
-- Generated distributable cash flow of $61.5 million, or $0.77 per common
unit, in the fourth quarter of 2015 and $254.6 million, or $2.89 per
common unit during 2015.
-- Generated total cash flow from vessel operations of $121.1 million and
$474.0 million in the fourth quarter and fiscal year 2015, respectively,
compared to $125.0 million and $490.4 million from the same periods of
the prior year.
-- Declared fourth quarter 2015 cash distribution of $0.14 per common unit.
-- In February 2016, the Exmar LPG joint venture took delivery of the sixth
of its 12 LPG carrier newbuildings, which will commence a five-year
charter with Statoil.
-- In December 2015, through a new joint venture, entered into an agreement
to develop an LNG regasification terminal in Bahrain under a 20-year
contract for start-up in mid-2018; Teekay LNG secured a 20-year charter
to provide the project with a floating storage unit, and is modifying
one of its previously unchartered MEGI LNG carrier newbuilidings for
this purpose.
-- Total liquidity of approximately $233 million as at December 31, 2015.
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 December 31, 2015. During the fourth quarter of 2015, the Partnership generated distributable cash flow(1) of $61.5 million, compared to $69.0 million the same period of the prior year. The decrease in distributable cash flow was primarily due to the termination of the charter contract for the Partnership's 52 percent-owned Magellan Spirit liquefied natural gas (LNG) carrier in March 2015 (which termination the Partnership's joint venture with Marubeni Corporation is currently disputing), the scheduled expiration of the charter contract for the Partnership's 52 percent-owned Methane Spirit LNG carrier in March 2015, and lower capitalized distributions relating to equity financing of newbuildings as a result of the temporary reduction in cash distributions on the Partnership's common units. These decreases were partially offset by the lower interest expense resulting from the December 2014 termination of capital leases for, and the subsequent refinancing of, three 70 percent-owned LNG carriers, higher cash flows from the Partnership's Exmar LPG BVBA joint venture and higher revenues from the Teide Spirit Suezmax tanker.
On January 20, 2016, the Partnership declared a cash distribution of $0.14 per common unit for the quarter ended December 31, 2015. The cash distribution was paid on February 12, 2016 to all common unitholders of record on February 5, 2016.
(1) Distributable cash flow is a non-GAAP financial measure used by
certain investors to measure the financial performance of the
Partnership and other master limited partnerships. Please see Appendix
B for a reconciliation of this non-GAAP measure to the most directly
comparable financial measure under United States generally accepted
accounting principles (GAAP).
CEO Commentary
"The Partnership generated strong cash flows in the fourth quarter and fiscal 2015, highlighting the stability of our business," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "The cash flows in the fourth quarter were enhanced by higher profit share revenues from the Teide Spirit conventional tanker and the commencement of short-term charters relating to the Magellan Spirit and Methane Spirit LNG carriers during the quarter."
Mr. Evensen added "Teekay LNG continues to operate with high fleet utilization generating stable cash flows, supported by a large and well-diversified portfolio of fee-based contracts with high quality counterparties."
"The decision in December to temporarily reduce Teekay LNG's distributions was a difficult decision and was caused by the inability to access competitively priced capital in the current negative capital market environment and was not caused by a shortfall in the cash flows of our operations," Mr. Evensen continued. "We believe the reduction is in the best interests of long-term unitholders as the reallocation of a significant portion of our internally generated cash flows to fund our profitable growth projects that will deliver over the next several years will result in higher available distributable cash flow per unit."
"In December 2015, we announced a significant milestone - the Partnership's first LNG regasification project which includes an attractive 20-year charter for one of the Partnership's existing MEGI LNG carrier newbuildings, increasing the Partnership's total forward fee-based revenues to $12.1 billion with a weighted average remaining contract duration of 12 years," Mr. Evensen continued. "Our new joint venture, comprised of strategic and financial sponsors, will develop an LNG regasification terminal under a 20-year contract for the Government of the Kingdom of Bahrain for start-up in mid-2018."
Mr. Evensen added "Looking ahead to 2016, we remain focused on executing on the Partnership's portfolio of profitable growth projects, ensuring they remain on time and on budget and securing long-term financing for these projects. Our first two MEGI LNG carrier newbuildings, which will be financed with a recently secured $360 million long-term lease facility, are scheduled to commence their respective fee-based contracts with Cheniere Energy in March and the third quarter of 2016, lifting LNG cargos from Cheniere's Sabine Pass LNG export facility. Including these vessels and our other profitable growth projects that deliver in 2016 through 2020, the Partnership is well-positioned to continue growing its cash flows in the future."
Business Outlook for 2016 and 2017
The Partnership plans to host a conference call on Thursday, February 18, at 11:00 a.m. (ET) to discuss the results contained in this news release as well as its business outlook, which includes additional forecasted cash flows for 2016 and 2017. A copy of the Fourth Quarter 2015 Earnings and Business Outlook Presentation, which will be discussed during this conference call, is available at http://media3.marketwire.com/docs/1043362p.pdf.
Summary of Recent Events
Secured 20-year contracts to develop an LNG regasification project in Bahrain
In December 2015, a joint venture consisting of Teekay LNG, Samsung C&T (Samsung) and Gulf Investment Corporation (GIC) finalized a 20-year contract with the Government of the Kingdom of Bahrain to develop an LNG receiving and regasification terminal in Bahrain for start-up in mid-2018. The project will include a floating storage unit (FSU), an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility and an onshore nitrogen production facility. The project is expected to have a capacity of 800 million standard cubic feet per day and will be owned and operated through a new joint venture owned by National Oil & Gas Authority (30%), Teekay LNG (30%), Samsung (20%) and GIC (20%). Teekay LNG will provide the project with the FSU, modifying one of its previously unchartered MEGI LNG carrier newbuildings, under a 20-year charter contract to the joint venture. The project, not including the FSU to be time chartered from Teekay LNG and excluding project management and development, financing and other costs, is expected to cost the joint venture approximately $655 million, which is expected to be funded through a combination of equity capital and project finance through a consortium of regional and international banks.
Delivery Update on the First Two MEGI LNG Carrier Newbuildings for Cheniere Energy
During the fourth quarter, Teekay LNG's first MEGI LNG carrier newbuilding completed sea trials with the second vessel scheduled to commence sea trials late in the first quarter of 2016. These vessels will commence their respective five-year fee-based contracts with Cheniere Energy late in the first quarter and third quarter of 2016 and are expected to earn annual cash flow from vessel operations(i) and distributable cash flow(ii) of approximately $50 million and $30 million, respectively. In early-February 2016, Teekay LNG secured a 10-year, $360 million long-term lease facility, which will be used to finance both vessels.
Temporary charter payment deferral on two 52 percent-owned LNG carriers
Teekay LNG owns two 52 percent-owned LNG carriers, the Marib Spirit and Arwa Spirit, through its joint venture with Marubeni Corporation that are currently on long-term charters expiring in 2029 to the Yemen LNG project (YLNG), a consortium led by Total SA. Due to the political situation in Yemen, YLNG decided to temporarily close down the LNG plant in 2015. As a result of a possible extended plant closing, the Partnership's joint venture agreed to a temporary deferral of a significant portion of the charter payments for the two LNG carriers during 2016. Upon future resumption of the LNG plant in Yemen, it is expected that YLNG will repay the deferred amounts in full over a period of time to be agreed upon.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $39.5 million for the quarter ended December 31, 2015, compared to $45.6 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of increasing net income attributable to partners by $32.7 million and decreasing net income by $12.6 million for the three months ended December 31, 2015 and 2014, respectively, primarily relating to unrealized gains and losses on derivative instruments and foreign currency exchange gains, as detailed in Appendix A to this release. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $72.2 million and $33.0 million for the three months ended December 31, 2015 and 2014, respectively. Net voyage revenues(2) increased to $103.4 million in the fourth quarter of 2015, compared to $99.0 million in the same period of the prior year.
For the year ended December 31, 2015, the Partnership reported adjusted net income attributable to the partners(1) of $160.0 million compared to $176.7 million for the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of increasing net income attributable to partners by $40.8 million and $28.8 million for the year ended December 31, 2015 and 2014, respectively, primarily relating to unrealized gains and losses on derivative instruments and foreign currency exchange gains, as detailed in Appendix A to this release. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $200.9 million and $205.4 million for the years ended December 31, 2015 and 2014, respectively. Net voyage revenues(2) increased to $396.9 million for the year ended December 31, 2015, compared to $399.6 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three months and year ended December 31, 2015 decreased from the same periods in the prior year primarily due to the Magellan Spirit LNG carrier's disputed charter contract termination during the first quarter of 2015 and the scheduled expiration of the charter contract for the Methane Spirit LNG carrier in mid-March 2015. These decreases were partially offset by the lower interest expense resulting from the December 2014 termination of capital leases for, and the subsequent refinancing of, three 70 percent-owned LNG carriers, the acquisition of Norgas Napa in November 2014, higher liquefied petroleum gas (LPG) spot rates earned in 2015 and replacement of certain older LPG carriers with newbuilding deliveries during 2015 in the Partnership's Exmar LPG BVBA joint venture and higher revenues from the Teide Spirit Suezmax tanker due to a stronger spot tanker market in 2015.
For accounting purposes, the Partnership is required to recognize the changes in the fair value of its outstanding derivative instruments that are not designated as hedges for accounting purposes in net income. This method of accounting does not affect the Partnership's cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized gains or losses on derivative instruments on the consolidated statements of income as detailed in notes 2, 3 and 4 to the Consolidated Statements of Income and Comprehensive Income included in this release.
(1) Adjusted net income attributable to the partners is a non-GAAP
financial measure. Please refer to Appendix A to this release for a
reconciliation of this non-GAAP measure to the most directly
comparable financial measure under GAAP and information about specific
items affecting net income which are typically excluded by securities
analysts in their published estimates of the Partnership's financial
results.
(2) Net voyage revenues is a non-GAAP financial measure used by certain
investors to measure the performance of shipping companies. Please
refer to Appendix C included in this release for a reconciliation of
this non-GAAP measure to the most directly comparable measure under
GAAP.
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 F for further details).
----------------------------------------------------------------------------
Three Months Ended
December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
(in thousands of U.S. Dollars) Segment Tanker Segment Total
----------------------------------------------------------------------------
Net voyage revenues(i) 76,717 26,710 103,427
Vessel operating expenses (16,651) (7,395) (24,046)
Depreciation and amortization (17,745) (5,257) (23,002)
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CFVO from consolidated
vessels(ii) 59,473 14,841 74,314
CFVO from equity accounted
vessels(iii) 46,748 - 46,748
Total CFVO(ii)(iii) 106,221 14,841 121,062
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Three Months Ended
December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
(in thousands of U.S. Dollars) Segment Tanker Segment Total
----------------------------------------------------------------------------
Net voyage revenues(i) 78,173 20,793 98,966
Vessel operating expenses (15,368) (8,326) (23,694)
Depreciation and amortization (17,973) (5,205) (23,178)
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CFVO from consolidated
vessels(ii) 62,723 11,326 74,049
CFVO from equity accounted
vessels(iii) 50,947 - 50,947
Total CFVO(ii)(iii) 113,670 11,326 124,996
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(i) Net voyage revenues represents voyage revenues less voyage expenses,
which comprise all expenses relating to certain voyages, including
bunker fuel expenses, port fees, cargo loading and unloading expenses,
canal tolls, agency fees and commissions. Net voyage revenues is a
non-GAAP financial measure used by certain investors to measure the
financial performance of shipping companies. Please see Appendix C for
a reconciliation of this non-GAAP measure as used in this release to
the most directly comparable GAAP financial measure.
(ii) Cash flow from vessel operations (CFVO) from consolidated vessels
represents income from vessel operations before (a) depreciation and
amortization expense, (b) amortization of in-process contracts
included in voyage revenues, and includes (c) adjustments for direct
financing leases to a cash basis, realized gains or losses on the
Toledo Spirit derivative contract and the revenue for two Suezmax
tankers recognized on a cash basis. CFVO is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. CFVO is not required by GAAP and should not be
considered as an alternative to net income, equity income or any other
indicator of the Partnership's performance required by GAAP. Please
see Appendix E for a reconciliation of CFVO from consolidated vessels
(a non-GAAP measure) as used in this release to the most directly
comparable GAAP financial measure.
(iii) The Partnership's equity accounted investments for the three months
ended December 31, 2015 and 2014 include the Partnership's
proportionate share of its equity accounted vessels' CFVO. Please see
Appendix F for a description and reconciliation of CFVO from equity
accounted vessels (a non-GAAP measure) as used in this release to the
most directly comparable GAAP financial measure.
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership's Liquefied Gas segment, excluding equity accounted vessels, was $59.5 million in the fourth quarter of 2015, compared to $62.7 million in the same quarter of the prior year. The decrease was primarily due to the depreciation of the Euro against the U.S. Dollar compared to the same quarter of the prior year, and 20 off-hire days relating to a scheduled drydocking for the Polar Spirit in the fourth quarter of 2015. These decreases were partially offset by the acquisition of the Norgas Napa in November 2014.
Cash flow from vessel operations from the Partnership's equity accounted vessels in the Liquefied Gas segment was $46.7 million in the fourth quarter of 2015 compared to $50.9 million in the same quarter of the prior year. The decrease was primarily due to the disputed termination of the charter contract for the Magellan Spirit in March 2015 and the scheduled expiration of the charter contract for the Methane Spirit in mid-March 2015 which were replaced with short-term charter contracts at significantly lower rates. Both the Magellan Spirit and Methane Spirit are owned through the Partnership's 52 percent interest in the joint venture with Marubeni Corporation. The decrease was partially offset by increased cash flows from the Partnership's 50 percent interest in Exmar LPG BVBA, as a result of higher LPG spot rates and the addition to the joint venture of four LPG carrier newbuildings that delivered during 2014 and early 2015, net of the sale of five older LPG carriers during 2014 and late 2015.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment increased to $14.8 million in the fourth quarter of 2015, compared to $11.3 million in the same quarter of the prior year. The increase was primarily related to $3.8 million profit share recognized in the fourth quarter of 2015 for the Teide Spirit as a result of stronger spot tanker market in 2015 compared to 2014.
Teekay LNG's Fleet
The following table summarizes the Partnership's fleet as of February 17, 2016:
----------------------------------------------------------------------------
Number of Vessels
----------------------------------------------------------------------------
Owned In-Chartered
Vessels Vessels Newbuildings Total
----------------------------------------------------------------------------
LNG Carrier Fleet 29 (i) - 21 (i) 50
LPG/Multigas Carrier Fleet 21 (ii) 2(iii) 6 (iii) 29
Conventional Tanker Fleet 8 - - 8
----------------------------------------------------------------------------
Total 58 2 27 87
----------------------------------------------------------------------------
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(i) The Partnership's ownership interests in these vessels range from 20
percent to 100 percent.
(ii) The Partnership's ownership interests in these vessels range from 50
percent to 99 percent.
(iii) The Partnership's interest in these vessels is 50 percent.
Liquidity
As of December 31, 2015, the Partnership had total liquidity of $232.5 million (comprised of $102.5 million in cash and cash equivalents and $130.0 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, February 18, at 11:00 a.m. (ET) to discuss the results for the fourth quarter and fiscal year of 2015 as well as its business outlook. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
-- By dialing (800) 505-9568 or (416) 204-9271, if outside North America,
and quoting conference ID code 446034.
-- By accessing the webcast, which will be available on Teekay LNG's
website at www.teekaylng.com (the archive will remain on the web site
for a period of 30 days).
A supporting Fourth Quarter and Fiscal year 2015 Earnings and Business Outlook Presentation will also be available at www.teekaylng.com in advance of the conference call start time.
The conference call will be recorded and made available until Thursday, March 3, 2016. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 446034.
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, fixed-rate charter contracts through its interests in 50 LNG carriers (including one LNG regasification unit and 21 newbuildings), 29 LPG/Multigas carriers (including two in-chartered LPG carriers and six newbuildings) and eight conventional tankers. The Partnership's interests in these vessels range from 20 to 100 percent. 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 units trade on the New York Stock Exchange under the symbol "TGP".
Teekay LNG Partners L.P.
Consolidated Statements of Income and Comprehensive Income
(in thousands of U.S. Dollars, except units outstanding)
----------------------------------------------------------------------------
Three Months Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
2015 2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Voyage revenues 103,642 98,415 99,339 397,991 402,928
Voyage expenses (215) (240) (373) (1,146) (3,321)
Vessel
operating
expenses (24,046) (24,319) (23,694) (94,101) (95,808)
Depreciation
and
amortization (23,002) (22,473) (23,178) (92,253) (94,127)
General and
administrative
expenses (5,666) (5,676) (5,619) (25,118) (23,860)
Restructuring
charges(1) (491) (3,510) 242 (4,001) (1,989)
----------------------------------------------------------------------------
Income from
vessel
operations 50,222 42,197 46,717 181,372 183,823
Equity
income(2) 23,588 13,523 23,471 84,171 115,478
Interest
expense (10,827) (11,175) (15,768) (43,259) (60,414)
Interest income 539 617 302 2,501 3,052
Realized and
unrealized
gain (loss) on
derivative
instruments(3) 9,957 (26,835) (23,114) (20,022) (44,682)
Foreign
currency
exchange gain
(loss) (4) 5,712 (8,153) 5,769 13,943 28,401
Other income 355 393 200 1,526 836
----------------------------------------------------------------------------
Net income
before tax
expense 79,546 10,567 37,577 220,232 226,494
Income tax
expense (2,431) (258) (6,427) (2,722) (7,567)
----------------------------------------------------------------------------
Net income 77,115 10,309 31,150 217,510 218,927
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other
comprehensive
income (loss)
:
Unrealized gain
(loss) on
qualifying
cash flow
hedging
instruments in
equity
accounted
joint ventures
net of amounts
reclassified
to equity
income, net of
tax 3,288 (4,244) (801) (648) (1,534)
----------------------------------------------------------------------------
Comprehensive
income 80,403 6,065 30,349 216,862 217,393
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-controlling
interest in
net income 4,891 2,811 (1,806) 16,627 13,489
General
Partner's
interest in
net income 1,444 7,622 8,035 26,276 31,187
Limited
partners'
interest in
net income 70,780 (124) 24,921 174,607 174,251
Weighted-
average number
of common
units
outstanding:
- Basic 79,528,595 78,941,689 77,470,251 78,896,767 75,664,435
- Diluted 79,596,288 79,009,078 77,514,907 78,961,102 75,702,886
Total number of
common units
outstanding at
end of period 79,551,012 79,513,914 78,353,354 79,551,012 78,353,354
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(1) Restructuring charges primarily relate to seafarer severance payments
upon the charterer's request to change the crew nationality from an
Australian crew to an international crew on the Alexander Spirit for the
three months ended December 31, 2015 and September 30, 2015 and for the
year ended December 31, 2015 and upon the sale of the Huelva Spirit
conventional tanker in August 2014 for the three months and year ended
December 31, 2014. The restructuring charge relating to the Alexander
Spirit was reimbursed by the charterer, which is included in voyage
revenues.
(2) Equity income includes unrealized gains/losses on non-designated
derivative instruments, any ineffectiveness for derivative instruments
designated as hedges for accounting purposes and gains or losses on
sales of vessels as detailed in the table below:
----------------------------------------------------------------------------
Three Months Ended Year Ended
December September December 31, December December
31, 30, 2014 31, 31,
2015 2015 2015 2014
----------------------------------------------------------------------------
Equity income 23,588 13,523 23,471 84,171 115,478
Proportionate
share of
unrealized
(gain) loss on
non-designated
derivative
instruments (6,798) 2,809 1,257 (10,945) (1,563)
Proportionate
share of
ineffective
portion of
hedge accounted
interest rate
swaps (357) 1,122 - 765 -
Proportionate
share of losses
(gains) on
sales of
vessels 1,228 - - 1,228 (16,923)
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Equity income
excluding
unrealized
gains/losses on
designated and
non-designated
derivative
instruments and
losses (gains)
on sale of
vessels 17,661 17,454 24,728 75,219 96,992
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(3) The realized (losses) gains on derivative instruments relate to the
amounts the Partnership actually paid to settle derivative instruments
and the unrealized gains (losses) on derivative instruments relate to
the change in fair value of such derivative instruments as detailed in
the table below:
----------------------------------------------------------------------------
Three Months Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
2015 2015 2014 2015 2014
----------------------------------------------------------------------------
Realized (losses)
gains relating to:
Interest rate swap
agreements (7,112) (7,232) (10,050) (28,968) (39,406)
Interest rate swap
agreements
termination - - (2,319) - (2,319)
Toledo Spirit time-
charter derivative
contract (3,185) 326 (637) (3,429) (861)
----------------------------------------------------------------------------
(10,297) (6,906) (13,006) (32,397) (42,586)
----------------------------------------------------------------------------
Unrealized gains
(losses) relating
to:
Interest rate swap
agreements 13,933 (12,232) (8,308) 14,768 4,204
Interest rate
swaption agreements 4,551 (5,927) - (783) -
Toledo Spirit time-
charter derivative
contract 1,770 (1,770) (1,800) (1,610) (6,300)
----------------------------------------------------------------------------
20,254 (19,929) (10,108) 12,375 (2,096)
----------------------------------------------------------------------------
Total realized and
unrealized gains
(losses) on
derivative
instruments 9,957 (26,835) (23,114) (20,022) (44,682)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(4) For accounting purposes, the Partnership is required to revalue all
foreign currency-denominated monetary assets and liabilities based on
the prevailing exchange rate 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 and Comprehensive Income.
Foreign currency exchange gain (loss) includes realized losses relating to the amounts the Partnership paid to settle the Partnership's non-designated cross-currency swaps that were entered into as economic hedges in relation to the Partnership's Norwegian Kroner (NOK) denominated unsecured bonds. The Partnership issued NOK 700 million, NOK 900 million, and NOK 1,000 million of unsecured bonds between May 2012 and May 2015. Foreign currency exchange gain (loss) also includes unrealized losses relating to the change in fair value of such derivative instruments, partially offset by unrealized gains on the revaluation of the NOK bonds as detailed in the table below:
----------------------------------------------------------------------------
Three Months Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
2015 2015 2014 2015 2014
----------------------------------------------------------------------------
Realized losses on
cross-currency swaps (2,472) (2,279) (1,124) (7,640) (2,222)
Unrealized losses on
cross-currency swaps (7,934) (31,039) (37,976) (57,759) (51,762)
Unrealized gains on
revaluation of NOK
bonds 11,310 25,750 34,277 54,691 48,827
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Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
----------------------------------------------------------------------------
As at December As at As at December
31, September 30, 31,
2015 2015 2014
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 102,481 154,173 159,639
Restricted cash - current 6,600 9,699 3,000
Accounts receivable 22,081 10,197 11,265
Prepaid expenses 4,469 5,866 3,975
Current portion of net
investments in direct
financing leases 20,606 20,178 15,837
Advances to affiliates 13,026 13,404 11,942
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Total current assets 169,263 213,517 205,658
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Restricted cash - long-term 104,919 60,497 42,997
Vessels and equipment
At cost, less accumulated
depreciation 1,595,077 1,606,482 1,659,807
Vessels under capital leases,
at cost, less accumulated
depreciation 88,215 89,799 91,776
Advances on newbuilding
contracts 424,868 401,054 237,647
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Total vessels and equipment 2,108,160 2,097,335 1,989,230
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Investment in and advances to
equity accounted joint
ventures 883,731 864,013 891,478
Net investments in direct
financing leases 646,052 651,440 666,658
Other assets 20,811 23,263 27,536
Derivative assets 5,623 2,646 441
Intangible assets - net 78,790 81,004 87,646
Goodwill - liquefied gas
segment 35,631 35,631 35,631
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Total assets 4,052,980 4,029,346 3,947,275
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LIABILITIES AND EQUITY
Current
Accounts payable 2,770 1,707 643
Accrued liabilities 37,456 31,351 39,037
Unearned revenue 19,608 28,708 16,565
Current portion of long-term
debt 193,902 166,807 153,753
Current obligations under
capital lease 4,546 60,245 4,422
Current portion of in-process
contracts 12,173 10,849 4,736
Current portion of derivative
liabilities 52,083 54,319 57,678
Advances from affiliates 22,987 20,351 43,205
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Total current liabilities 345,525 374,337 320,039
----------------------------------------------------------------------------
Long-term debt 1,805,307 1,811,693 1,753,228
Long-term obligations under
capital lease 54,581 - 59,128
Long-term unearned revenue 30,333 31,699 33,938
Other long-term liabilities 71,152 72,418 74,734
In-process contracts 20,065 22,943 32,660
Derivative liabilities 182,338 189,446 126,177
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Total liabilities 2,509,301 2,502,536 2,399,904
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Equity
Limited partners 1,472,327 1,456,322 1,482,647
General Partner 48,786 56,084 56,508
Accumulated other comprehensive
loss (2,051) (5,339) (1,403)
----------------------------------------------------------------------------
Partners' equity 1,519,062 1,507,067 1,537,752
Non-controlling interest (1) 24,617 19,743 9,619
----------------------------------------------------------------------------
Total equity 1,543,679 1,526,810 1,547,371
----------------------------------------------------------------------------
Total liabilities and total
equity 4,052,980 4,029,346 3,947,275
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Non-controlling interest includes: a 30 percent equity interest in the
RasGas II joint venture (which owns three LNG carriers); a 31 percent
equity interest in Teekay BLT Corporation (a joint venture which owns
two LNG carriers); and a one percent equity interest in several of the
Partnership's ship-owning subsidiaries or joint ventures, which in each
case represents the ownership interest not owned by the Partnership.
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
----------------------------------------------------------------------------
Year Ended
December 31, December 31,
2015 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
Cash and cash equivalents provided by (used
for)
OPERATING ACTIVITIES
Net income 217,510 218,927
Non-cash items:
Unrealized (gain) loss on derivative
instruments (12,375) 2,096
Depreciation and amortization 92,253 94,127
Unrealized foreign currency exchange gain (22,876) (34,079)
Equity income, net of dividends received of
$97,146 (2014 - $11,005) 12,975 (104,473)
Amortization of deferred debt issuance costs
and other (3,214) 9,148
Change in operating assets and liabilities (34,187) 18,822
Expenditures for dry docking (10,357) (13,471)
----------------------------------------------------------------------------
Net operating cash flow 239,729 191,097
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 391,574 944,123
Scheduled repayments of long-term debt (126,557) (100,804)
Prepayments of long-term debt (90,000) (608,501)
Debt issuance costs (2,856) (6,431)
Scheduled repayments and prepayments of
capital lease obligations (4,423) (479,115)
Proceeds from equity offerings, net of
offering costs 35,374 182,139
(Increase) decrease in restricted cash (30,321) 448,914
Cash distributions paid (255,519) (240,525)
Novation of derivative liabilities - 2,985
Dividends paid to non-controlling interest (1,629) (42,716)
----------------------------------------------------------------------------
Net financing cash flow (84,357) 100,069
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Investments in and additional capital
contributions to equity accounted joint
ventures (25,852) (100,200)
Loan repayments from equity accounted joint
ventures 23,744 631
Receipts from direct financing leases 15,837 17,200
Expenditures for vessels and equipment (191,969) (188,855)
Increase in restricted cash (34,290) -
Other - 216
----------------------------------------------------------------------------
Net investing cash flow (212,530) (271,008)
----------------------------------------------------------------------------
(Decrease) increase in cash and cash
equivalents (57,158) 20,158
Cash and cash equivalents, beginning of the
year 159,639 139,481
----------------------------------------------------------------------------
Cash and cash equivalents, end of the year 102,481 159,639
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay LNG Partners L.P.
Appendix A - Specific Items Affecting Net Income
(in thousands of U.S. Dollars)
Set forth below is a reconciliation of the Partnership's unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net income attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership's financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Net income - GAAP basis 77,115 31,150 217,510 218,927
Less:
Net income attributable to
non-controlling interests (4,891) 1,806 (16,627) (13,489)
----------------------------------------------------------------------------
Net income attributable to
the partners 72,224 32,956 200,883 205,438
----------------------------------------------------------------------------
Add (subtract) specific
items affecting net income:
Unrealized foreign
currency exchange
gains(1) (9,236) (7,066) (21,263) (31,048)
Unrealized (gains) losses
from derivative
instruments(2) (20,254) 10,108 (12,375) 2,096
Unrealized (gains) losses
from non-designated and
designated derivative
instruments and other
items from equity
accounted investees(3) (5,927) 1,257 (8,952) (18,486)
RasGas II lease
termination costs(4) - 4,303 - 4,303
Interest rate swaps
cancelation costs(5) - 2,319 - 2,319
Restructuring (recovery)
charges(6) - (242) - 1,989
Income tax expense(7) 1,450 6,356 1,450 6,356
Amended charter contract
in equity accounted
investee(8) - - (2,626) -
Non-controlling interests'
share of items above(9) 1,280 (4,397) 2,924 3,716
----------------------------------------------------------------------------
Total adjustments (32,687) 12,638 (40,842) (28,755)
----------------------------------------------------------------------------
Adjusted net income
attributable to the
partners 39,537 45,594 160,041 176,683
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Unrealized foreign exchange gains primarily relate to the Partnership's
revaluation of all foreign currency-denominated monetary assets and
liabilities based on the prevailing exchange rate at the end of each
reporting period and unrealized (gains) losses on the cross-currency
swaps economically hedging the Partnership's NOK bonds and excludes the
realized gains (losses) relating to the cross currency swaps for the NOK
bonds.
(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 and Comprehensive Income 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. Also reflects the
Partnership's proportionate share of net loss of $1.2 million for the
three months and year ended December 31, 2015 and net gain of $16.9
million for the year ended December 31, 2014 on the sales of vessels
from the Exmar LPG BVBA joint venture. See note 2 to the Consolidated
Statements of Income and Comprehensive Income included in this release
for further details.
(4) Amounts for the three months and year ended December 31, 2014 relate to
(a) advisory fees incurred in relation to the termination of the capital
lease in the Teekay Nakilat joint venture and (b) the write-off of the
remaining deferred debt issuance costs associated with the original
long-term debt facility that was refinanced in December 2014.
(5) Interest rate swaps cancelation costs relate to the settlement costs
associated with terminating the interest rate swaps in the Teekay
Nakilat joint venture related to restricted cash, capital lease, and
debt upon termination of its capital lease obligations and related
refinancing in 2014.
(6) The restructuring charges for the three months and year ended December
31, 2015 relating to the Alexander Spirit were fully recovered from the
charterer; because the recovery was included as voyage revenues, there
is no impact on the Partnership's net income. The restructuring
(recovery) charges for the three months and year ended December 31,
2014, relate to seafarer severance payments upon the sale of the Huelva
Spirit conventional tanker in August 2014.
(7) Reflects the additional tax expense in relation to the termination of
the capital lease in the Teekay Nakilat joint venture for the three
months and years ended December 31, 2015 and 2014, respectively.
(8) Reflects the impact related to years prior to 2015 resulting from
amended charter contracts associated with the Partnership's 33 percent
interest in four LNG carriers servicing the Angola LNG project. Charter
contracts were amended in June 2015 to a cost pass-through basis
retroactive to 2011, resulting in a cumulative adjustment from 2011
which increased equity income for the year ended December 31, 2015.
(9) 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 items 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)
Distributable cash flow represents net income adjusted for depreciation and amortization expense, non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from derivatives, distributions relating to equity financing of newbuilding installments, equity income, adjustments for direct financing leases to a cash basis, and foreign exchange related items. 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 a partnership's ability to make quarterly cash distributions. Distributable cash flow is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net income.
----------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
Net income: 77,115 31,150 217,510 218,927
Add:
Depreciation and
amortization 23,002 23,178 92,253 94,127
Partnership's share of
equity accounted joint
ventures' DCF net of
estimated maintenance
capital expenditures(1) 25,060 30,683 101,053 117,712
Direct finance lease
payments received in
excess of revenue
recognized 4,729 4,560 18,425 17,168
Distributions relating to
equity financing of
newbuildings - 3,869 12,528 10,609
Deferred income tax and
other non-cash items 2,052 12,065 (775) 4,105
Less:
Unrealized (gain) loss on
derivatives (20,254) 10,108 (12,375) 2,096
Unrealized foreign
currency exchange gain (9,236) (7,066) (21,263) (31,048)
Estimated maintenance
capital expenditures (11,907) (12,021) (47,254) (46,916)
Equity income (23,588) (23,471) (84,171) (115,478)
----------------------------------------------------------------------------
Distributable Cash Flow
before Non-controlling
interest 66,973 73,055 275,931 271,302
Non-controlling interests'
share of DCF before
estimated maintenance
capital expenditures (5,432) (4,015) (21,323) (16,451)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Distributable Cash Flow 61,541 69,040 254,608 254,851
Amount attributable to the
General Partner (227) (8,650) (26,324) (31,984)
----------------------------------------------------------------------------
Limited partners'
Distributable Cash Flow 61,314 60,390 228,284 222,867
Weighted-average number of
common units outstanding 79,528,595 77,470,251 78,896,767 75,664,435
----------------------------------------------------------------------------
Distributable Cash Flow per
limited partner unit 0.77 0.78 2.89 2.95
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The estimated maintenance capital expenditures relating to the
Partnership's share of equity accounted joint ventures were $7.5 million
and $6.8 million for the three months ended December 31, 2015 and 2014,
respectively, and $29.0 million and $28.7 million for the year ended
December 31, 2015 and 2014, respectively.
Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Net Voyage Revenues
(in thousands of U.S. Dollars)
Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net voyage revenues is a non-GAAP measure used by certain investors to measure the financial performance of shipping companies. Net voyage revenues is not required by GAAP and should not be considered as an alternative to voyage revenues or any other indicator of the Partnership's performance required by GAAP.
----------------------------------------------------------------------------
Three Months Ended December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
Segment Tanker Segment Total
----------------------------------------------------------------------------
Voyage revenues 76,514 27,128 103,642
Voyage expense recoveries
(expenses) 203 (418) (215)
----------------------------------------------------------------------------
Net voyage revenues 76,717 26,710 103,427
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
Segment Tanker Segment Total
----------------------------------------------------------------------------
Voyage revenues 78,173 21,166 99,339
Voyage expenses - (373) (373)
----------------------------------------------------------------------------
Net voyage revenues 78,173 20,793 98,966
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
Segment Tanker Segment Total
----------------------------------------------------------------------------
Voyage revenues 305,056 92,935 397,991
Voyage expense recoveries
(expenses) 203 (1,349) (1,146)
----------------------------------------------------------------------------
Net voyage revenues 305,259 91,586 396,845
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Liquefied Gas Conventional
Segment Tanker Segment Total
----------------------------------------------------------------------------
Voyage revenues 307,426 95,502 402,928
Voyage expenses (1,768) (1,553) (3,321)
----------------------------------------------------------------------------
Net voyage revenues 305,658 93,949 399,607
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay LNG Partners L.P.
Appendix D - Supplemental Segment Information
(in thousands of U.S. Dollars)
----------------------------------------------------------------------------
Three Months Ended December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Conventional
Liquefied Gas Tanker
Segment Segment Total
----------------------------------------------------------------------------
Net voyage revenues (See
Appendix C) 76,717 26,710 103,427
Vessel operating expenses (16,651) (7,395) (24,046)
Depreciation and amortization (17,745) (5,257) (23,002)
General and administrative
expenses (4,637) (1,029) (5,666)
Restructuring charges - (491) (491)
----------------------------------------------------------------------------
Income from vessel operations 37,684 12,538 50,222
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Conventional
Liquefied Gas Tanker
Segment Segment Total
----------------------------------------------------------------------------
Net voyage revenues (See
Appendix C) 78,173 20,793 98,966
Vessel operating expenses (15,368) (8,326) (23,694)
Depreciation and amortization (17,973) (5,205) (23,178)
General and administrative
expenses (4,642) (977) (5,619)
Restructuring recovery - 242 242
----------------------------------------------------------------------------
Income from vessel operations 40,190 6,527 46,717
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Consolidated Vessels
(in thousands of U.S. Dollars)
Cash flow from vessel operations from consolidated vessels represents income from vessel operations before (a) depreciation and amortization expense, (b) amortization of in-process contracts included in voyage revenues, and includes (c) adjustments for direct financing leases to a cash basis, realized gains or losses on the Toledo Spirit derivative contract, and the revenue for two Suezmax tankers recognized a cash basis. The Partnership's direct financing leases for the periods indicated relate to the Partnership's 69 percent interest in two LNG carriers, the Tangguh Sago and Tangguh Hiri, and the two LNG carriers acquired from Awilco LNG ASA. The Partnership's cash flow from vessel operations from consolidated vessels does not include the Partnership's cash flow from vessel operations from its equity accounted joint ventures. Cash flow from vessel operations is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's consolidated vessels. Cash flow from vessel operations from consolidated vessels is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by GAAP.
----------------------------------------------------------------------------
Year Ended
December 31,
Three Months Ended December 31, 2015 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
Conventional
Liquefied Tanker
Gas Segment Segment Total Total
----------------------------------------------------------------------------
Income from vessel
operations (See
Appendix D) 37,684 12,538 50,222 181,372
Depreciation and
amortization 17,745 5,257 23,002 92,253
Amortization of in-
process contracts
included in voyage
revenues (685) (278) (963) (2,772)
Direct finance lease
payments received in
excess of revenue
recognized 4,729 - 4,729 18,425
Realized loss on Toledo
Spirit derivative
contract - (3,185) (3,185) (3,429)
Cash flow adjustment for
two Suezmax tankers(1) - 509 509 2,008
----------------------------------------------------------------------------
Cash flow from vessel
operations from
consolidated vessels 59,473 14,841 74,314 287,857
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended
December 31,
Three Months Ended December 31, 2014 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
Conventional
Liquefied Tanker
Gas Segment Segment Total Total
----------------------------------------------------------------------------
Income from vessel
operations (See
Appendix D) 40,190 6,527 46,717 183,823
Depreciation and
amortization 17,973 5,205 23,178 94,127
Amortization of in-
process contracts
included in voyage
revenues - (278) (278) (1,112)
Direct finance lease
payments received in
excess of revenue
recognized 4,560 - 4,560 17,168
Realized loss on Toledo
Spirit derivative
contract - (637) (637) (861)
Cash flow adjustment for
two Suezmax tankers(1) - 509 509 (4,557)
----------------------------------------------------------------------------
Cash flow from vessel
operations from
consolidated vessels 62,723 11,326 74,049 288,588
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Partnership's charter contracts for two of its 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 ending September 30, 2014. The cash impact of the
change in hire rates is not fully reflected in the Partnership's
statements of income and comprehensive income as the change in the lease
payments is being recognized on a straight-line basis over the term of
the lease.
Teekay LNG Partners L.P.
Appendix F - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Equity Accounted Vessels
(in thousands of U.S. Dollars)
Cash flow from vessel operations from equity accounted vessels represents the Partnership's proportionate share of income from vessel operations from equity accounted vessels before (a) depreciation and amortization expense, (b) amortization of in-process revenue contracts, (c) loss on sale of vessel and includes (d) adjustments for direct financing leases to a cash basis. Cash flow from vessel operations from equity accounted vessels is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's equity accounted joint ventures. Cash flow from vessel operations from equity accounted vessels is not required by GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership's performance required by GAAP.
----------------------------------------------------------------------------
Three Months Ended
December 31, 2015 December 31, 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
At Partnership's At Partnership's
100% Portion(1) 100% Portion(1)
----------------------------------------------------------------------------
Net voyage revenues 141,333 64,733 150,719 69,840
Vessel operating
expenses (42,084) (19,497) (42,294) (19,719)
Depreciation and
amortization (25,979) (13,008) (23,260) (11,798)
Loss on sale of vessel (2,455) (1,228) - -
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 70,815 31,000 85,165 38,323
Other items, including
interest expense and
realized and
unrealized gain
(loss) on derivative
instruments (13,677) (7,415) (37,153) (14,852)
----------------------------------------------------------------------------
Net income / equity
income of equity
accounted vessels 57,138 23,585 48,012 23,471
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel
operations 70,815 31,000 85,165 38,323
Depreciation and
amortization 25,979 13,008 23,260 11,798
Loss on sale of vessel 2,455 1,228 - -
Direct finance lease
payments received in
excess of revenue
recognized 8,631 3,135 7,937 2,884
Amortization of in-
process revenue
contracts (3,176) (1,623) (4,047) (2,058)
----------------------------------------------------------------------------
Cash flow from vessel
operations from
equity accounted
vessels 104,704 46,748 112,315 50,947
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended
December 31, 2015 December 31, 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
At Partnership's At Partnership's
100% Portion(1) 100% Portion(1)
----------------------------------------------------------------------------
Net voyage revenues 565,163 257,224 604,113 279,825
Vessel operating expenses (164,206) (76,344) (173,069) (80,822)
Depreciation and
amortization (96,585) (48,702) (90,483) (45,881)
(Loss) gain on sales of
vessels (2,455) (1,228) 33,846 16,923
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 301,917 130,950 374,407 170,045
Other items, including
interest expense and
realized and unrealized
gain (loss) on derivative
instruments (105,243) (46,782) (131,600) (54,567)
----------------------------------------------------------------------------
Net income / equity income
of equity accounted
vessels 196,674 84,168 242,807 115,478
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel
operations 301,917 130,950 374,407 170,045
Depreciation and
amortization 96,585 48,702 90,483 45,881
Loss (gain) on sales of
vessels 2,455 1,228 (33,846) (16,923)
Direct finance lease
payments received in
excess of revenue
recognized 34,062 12,381 30,616 11,102
Amortization of in-process
revenue contracts (14,030) (7,153) (16,321) (8,295)
----------------------------------------------------------------------------
Cash flow from vessel
operations from equity
accounted vessels 420,989 186,108 445,339 201,810
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Partnership's equity accounted vessels for the three months and
years ended December 31, 2015 and 2014 include: the Partnership's 40
percent interest in Teekay Nakilat (III) Corporation, which owns four
LNG carriers; the Partnership's 50 percent interest in the Excalibur and
Excelsior joint ventures, which owns one LNG carrier and one
regasification unit, respectively; the Partnership's 33 percent interest
in four LNG carriers servicing the Angola LNG project; the Partnership's
52 percent 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 interest in Exmar LPG BVBA,
which owns and in-charters 23 vessels, including six newbuildings, as at
December 31, 2015, and 24 vessels, including nine newbuildings, as at
December 31, 2014; the Partnership's 30 percent interest in two LNG
carrier newbuildings and 20 percent interest in two LNG carrier
newbuildings for BG Group acquired in June 2014; and the Partnership's
50 percent interest in six LNG carrier newbuildings in the joint venture
between the Partnership and China LNG Shipping (Holdings) Limited
established in July 2014.
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 Partnership's expected fixed future revenues and weighted average remaining contract length; the Partnership's use of internally generated cash flows to contribute to the funding of growth projects; the impact of cash distribution reductions on the Partnership's financial position; the potential for future cash distribution changes; the timing of newbuilding vessel deliveries and project start-up and the commencement of related contracts; the outcome of the Partnership's dispute over the Magellan Spirit charter contract termination; the profitability of future growth projects and their impact on the Partnership's future available distributable cash flow per unit; the stability and growth of the Partnership's future cash flows; the total capacity, cost and financing for the Bahrain project; and the charter payment deferral on the Partnership's two 52 percent owned LNG carriers on charter to the Yemen LNG project.
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; costs relating to projects; 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; factors affecting the outcome of the Partnership's dispute over the Magellan Spirit; the Partnership's and the Partnership's joint ventures' ability to raise financing for its existing newbuildings and projects or to purchase additional vessels or to pursue other projects; factors affecting the resumption of the LNG plant in Yemen; the inability of the Partnership to collect the deferred charter payments from the Yemen LNG project; 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, 2014 and Form 6-K for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. 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.
Contacts: For Investor Relations enquiries contact: Ryan Hamilton Tel: +1 (604) 609-6442 Website: www.teekay.com
Source: Teekay LNG Partners L.P.
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