Form 6-K GasLog Partners LP For: Jan 28

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January 28, 2016 6:56 AM EST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES

EXCHANGE ACT OF 1934

 

For the month of January 2016

 

Commission File Number 001-36433

 

GasLog Partners LP

(Translation of registrant’s name into English)

 

Gildo Pastor Center

7 Rue du Gabian

MC 98000, Monaco

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  þ     Form 40-F  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
   
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
 

The press release issued by GasLog Partners LP on January 28, 2016 relating to its results for the three-month period ended December 31, 2015 is attached hereto as Exhibit 99.1.

 

EXHIBIT LIST

 

Exhibit   Description
     
99.1   Press Release dated January 28, 2016
2

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: January 28, 2016  
   
  GASLOG PARTNERS LP
   
    by /s/ Andrew Orekar  
      Name: Andrew Orekar  
      Title: Chief Executive Officer  
3

Exhibit 99.1

 

Press Release

 

GasLog Partners LP Reports Financial Results for the Three-Month Period Ended December 31, 2015 and Declares Cash Distribution

 

Monaco, January 28, 2016, GasLog Partners LP (“GasLog Partners” or the “Partnership”) (NYSE: GLOP), an international owner and operator of liquefied natural gas (“LNG”) carriers, today reported its financial results for the three-month period ended December 31, 2015.

 

Partnership Performance(1) Highlights  

 

·Highest-ever quarterly performance for Revenues, Profit, EBITDA, Adjusted EBITDA and Distributable cash flow.
·Declared cash distribution of $0.478 per unit for the fourth quarter of 2015, 10% higher than the fourth quarter of 2014 and unchanged from the third quarter of 2015.
·Reduced total debt by $30.63 million during the fourth quarter of 2015 using cash balances and excess cash flow.
·EBITDA and Adjusted EBITDA of $38.34 million, 58% and 59% higher, respectively, than the fourth quarter of 2014.
·Distributable cash flow of $22.55 million, 73% higher than the fourth quarter of 2014.
·Distribution coverage ratio of 1.43x(2).

 

(1) “Partnership Performance” represents the results attributable to GasLog Partners which are non-GAAP financial measures. See Note 1 to the Partnership Performance Results table below.

(2) Distribution coverage ratio represents the ratio of distributable cash flow over the cash distribution declared.

 

CEO Statement

 

Mr. Andrew Orekar, Chief Executive Officer, commented: “I am delighted by GasLog Partners’ highest-ever quarterly financial results for Revenues(1), Adjusted EBITDA(1) and Distributable cash flow(1), among other metrics. This performance highlights the limited impact of lower commodity prices on the Partnership’s stable cash flows, which are generated from multi-year charters with fixed-fee revenues.

 

For the fourth quarter, GasLog Partners has declared a cash distribution of $0.478 per unit, which is unchanged from the third quarter of 2015 and represents an 18% compound annual growth rate since the Partnership’s initial public offering (“IPO”). This distribution does not come at the expense of coverage; in fact, our coverage ratio of 1.43x for the fourth quarter of 2015 is our strongest quarterly distribution coverage since GasLog Partners’ IPO.

 

The Partnership's fleet of eight LNG carriers is fully financed and generating distributable cash flow well in excess of our distribution. In the fourth quarter, we have reduced debt using our excess cash flow, as doing so is accretive to GasLog Partners' distributable cash flow on a per unit basis. Our total debt repayment for the quarter was $30.63 million, including $15.0 million of borrowings under our revolving facility with GasLog Ltd. (“GasLog”) that represents our highest cost debt and can be redrawn at any time. As a reminder, GasLog Partners does not have any future capital commitments for vessel newbuildings or other commercial projects.

 

We are pleased with the strong performance of GasLog Partners and the continued stability of the Partnership’s cash flows and distributions.”

 

(1) Represent the results attributable to GasLog Partners which are non-GAAP financial measures. See Note 1 to the Partnership Performance Results table below.

 

Financial Summary

 

   Partnership Performance Results(1) 
   For the three months ended   For the year ended 
                         
(All amounts expressed in
thousands of U.S. dollars)		  December 31,
2014		   December 31,
2015		   % change   December 31,
 2014		   December 31,
2015		   % change 
Revenues  33,302   51,953   56%  65,931   168,927   156%
Profit   1,146    20,299    1,671%   14,544    65,040    347%
Adjusted Profit   11,252    20,304    80%   23,842    65,096    173%
EBITDA   24,288    38,339    58%   48,297    122,786    154%
Adjusted EBITDA   24,191    38,344    59%   48,156    122,842    155%
Distributable cash flow   13,028    22,546    73%   27,118    72,310    167%
Cash distributions declared   10,717    15,712    47%   24,086    56,187    133%

 

(1)“Partnership Performance Results” represent the results attributable to GasLog Partners. Such results are non-GAAP measures and exclude amounts related to vessels currently owned by the Partnership for the periods prior to their respective transfer to GasLog Partners from GasLog, as the Partnership is not entitled to the cash or results generated in the periods prior to such transfers. Such results are
 

included in the GasLog Partners’ results in accordance with International Financial Reporting Standards (“IFRS”) because the transfer of the vessel owning entities by GasLog to the Partnership represented a reorganization of entities under common control. GasLog Partners believes that these non-GAAP financial measures provide meaningful supplemental information to both management and investors regarding the financial and operating performance of the Partnership because such presentation is consistent with the calculation of the quarterly distribution and the earnings per unit, which similarly excludes the results of vessels prior to their transfer to the Partnership. These non-GAAP financial measures should not be viewed in isolation or as substitutes to the equivalent GAAP measures presented in accordance with IFRS, but should be used in conjunction with the most directly comparable IFRS Common Control Reported Results. For definitions and reconciliations of these measurements to the most directly comparable financial measures presented in accordance with IFRS, please refer to Exhibits II and III at the end of this press release.

 

The year-on-year increases in the Partnership Performance Results in the fourth quarter are attributable to the additional vessel operating days in our fleet resulting from the acquisitions of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally on July 1, 2015 from GasLog.

 

   IFRS Common Control Reported Results(1) 
   For the three months ended   For the year ended 
                         
(All amounts expressed in
thousands of U.S. dollars)		  December 31,
 2014		   December 31,
 2015		   % change   December 31,
 2014		   December 31,
2015		   % change 
Revenues  51,449   51,953   1%  158,170   199,689   26%
Profit   8,069    20,299    152%   43,646    72,044    65%
Adjusted Profit(2)   18,072    20,304    12%   58,268    72,094    24%
EBITDA(2)   38,181    38,339    0%   119,008    143,473    21%
Adjusted EBITDA(2)   37,982    38,344    1%   118,875    143,523    21%

 

(1)“IFRS Common Control Reported Results” represent the results of GasLog Partners in accordance with IFRS. Such results include amounts related to vessels currently owned by the Partnership for the periods prior to their respective transfer to GasLog Partners from GasLog, as the transfer of such vessels was accounted for as a reorganization of entities under common control for IFRS accounting purposes. The unaudited condensed combined and consolidated financial statements of the Partnership accompanying this press release are prepared under IFRS on this basis.
(2)Adjusted Profit, EBITDA and Adjusted EBITDA are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures presented in accordance with IFRS, please refer to Exhibit III at the end of this press release.

 

The year-on-year IFRS Common Control Reported Results for the fourth quarter do not present material fluctuations, with the exception of profit which has significantly increased. The increase in profit derives mainly from the adverse impact on our fourth quarter 2014 results of the $4.81 million loss on interest rate swaps and the $5.76 million of write-off of unamortized loan fees in connection with debt refinancing.

 

Cash Distribution

 

On January 27, 2016, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.478 per unit for the quarter ended December 31, 2015. The cash distribution is payable on February 12, 2016, to all unitholders of record as of February 8, 2016.

 

Liquidity and Financing

 

As of December 31, 2015, we had $60.40 million of cash and cash equivalents.

 

As of December 31, 2015, we had an aggregate of $748.0 million of indebtedness outstanding under our credit facilities, including $15.0 million outstanding under the Partnership’s revolving credit facility with GasLog. An amount of $328.0 million of outstanding debt is repayable within one year.

 

As of December 31, 2015, our current assets totaled $70.36 million while current liabilities totaled $353.09 million, resulting in a negative working capital position of $282.73 million. Current liabilities include $328.0 million of loans due within one year, $305.50 million of which we are currently discussing to refinance, with the balance of $22.50 million representing scheduled amortization of other indebtedness. We have entered into an underwritten agreement with certain financial institutions to refinance our current debt and syndication is progressing. We expect to execute definitive documentation well in advance of the maturity of all associated existing indebtedness.

 

Other than the refinancing requirements noted above, and taking into account generally expected market conditions, we anticipate that cash flow generated from operations will be sufficient to fund our operations, including our working capital requirements, and to make the required principal and interest payments on our indebtedness during the next 12 months.

 

Depending on market conditions, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. We expect over time to economically hedge a material proportion of our exposure to interest rate fluctuations by entering into new interest rate swap contracts. As of December 31, 2015, the Partnership had no interest rate swaps.

2

LNG Market Update and Outlook

 

In 2016, we expect projects coming onstream that will have approximately 40 million tonnes of new liquefaction capacity in both Australia and the US. In Australia, Australia Pacific Train 1 (4.5 million tonnes per annum (“mtpa”)) and Gladstone LNG (7.7 mtpa) have shipped their first cargoes in recent weeks and are expected to ramp up production through 2016. Other Australian projects due to start up in 2016 include Gorgon (15.6 mtpa), Australia Pacific Train 2 (4.5 mtpa), Prelude (3.6 mtpa) and Wheatstone (8.9 mtpa). The infrastructure for these projects has now largely been built and the majority of the volumes for these projects have already been sold.

 

Sabine Pass, one of five US projects under construction, is expected to export its first cargo later in the first quarter of 2016. When construction is completed, Sabine Pass will have a total export capacity of 22.5 mtpa and will be the first US project to export LNG into the global market. The US becoming an exporter of LNG is a welcome development for the LNG shipping sector as it creates new suppliers, new customers and new trade routes. The majority of US volumes have already been contracted with most expected to go into the Asian and European markets. This development will be positive for tonne mile demand as the US Gulf Coast to Asia voyage is approximately 9,000 nautical miles through the Panama Canal (which is not yet open to large LNG carriers). The same voyage around Cape Horn is approximately 13,000 nautical miles. From the US Gulf Coast to northwest Europe, the distance is approximately 5,000 nautical miles. In 2014 and 2015, the average global LNG voyage was approximately 4,000 nautical miles, and thus any voyage in excess of this distance will increase the global average distance and the need for LNG carriers.

 

Angola LNG (5.2 mtpa), which has been shut down for over a year for refurbishment and enhancements, is also due to restart in early 2016. Certain vessels that were chartered to Angola LNG have been operating in the spot market while the plant has been closed, and are expected to be put back into service for the project in 2016.

 

With the expected projects coming onstream, we are seeing encouraging levels of tendering activity for vessels to transport increased LNG volumes. We continue to see a future shortfall of vessels that will be required for the Australian and US projects that have taken final investment decision and are currently under construction.

 

Conference Call

 

GasLog Partners will host a conference call to discuss its results for the fourth quarter of 2015 at 8:30 a.m. EDT (13:30 p.m. GMT) on Thursday, January 28, 2016. Andrew Orekar, Chief Executive Officer, and Simon Crowe, Chief Financial Officer, will review the Partnership’s operational and financial performance for the period. Management’s presentation will be followed by a Q&A session.

 

The dial-in numbers for the conference call are as follows:

+1 855 537 5839 (USA)

+44 (0) 20 3107 0289 (United Kingdom)

+33 (0) 1 70 80 71 53 (France)

Passcode: 11928088

 

A live webcast of the conference call will also be available on the investor relations page of the Partnership’s website at:

http://www.gaslogmlp.com/investor-relations

 

For those unable to participate in the conference call, a replay will also be available from 2:00 p.m. ET (7:00 p.m. GMT) on Thursday, January 28, 2016 until 11:59 p.m. EDT (4:59 a.m. GMT) on Thursday, February 4, 2016.

 

The replay dial-in numbers are as follows:

+1 855 859 2056 (USA)

+44 (0) 20 3107 0235 (United Kingdom)

+33 (0)1 70 80 71 79 (France)

Replay passcode: 11928088

 

About GasLog Partners

 

GasLog Partners is a growth-oriented master limited partnership focused on owning, operating and acquiring LNG carriers under long-term charters. GasLog Partners’ fleet consists of eight LNG carriers with an average carrying capacity of 148,750 cbm, each of which has a multi-year time charter. GasLog Partners’ executive offices are located at Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. Visit the GasLog Partners website at http://www.gaslogmlp.com.

3

Forward-Looking Statements

 

All statements in this press release that are not statements of historical fact are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Partnership expects, projects, believes or anticipates will or may occur in the future, particularly in relation to the Partnership’s operations, cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies and business prospects and changes and trends in the Partnership’s business and the markets in which it operates. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Partnership’s expectations and projections. Accordingly, you should not unduly rely on any forward-looking statements. Factors that might cause future results and outcomes to differ include:

 

·LNG shipping market conditions and trends, including spot and long-term charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping and technological advancements;
·our ability to enter into time charters with new and existing customers;
·changes in the ownership of our charterers;
·our customers’ performance of their obligations under our time charters;
·changing economic conditions and the differing pace of economic recovery in different regions of the world;
·our future financial condition, liquidity and cash available for dividends and distributions;
·our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, the ability of our lenders to meet their funding obligations, and our ability to meet the restrictive covenants and other obligations under our credit facilities;
·our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG carriers to purchase, as well as our ability to consummate any such acquisitions;
·our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships;
·number of off-hire days, drydocking requirements and insurance costs;
·our anticipated general and administrative expenses;
·fluctuations in currencies and interest rates;
·our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments;
·environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities;
·requirements imposed by classification societies;
·risks inherent in ship operation, including the discharge of pollutants;
·availability of skilled labor, ship crews and management;
·potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;
·potential liability from future litigation; and
·other risks and uncertainties described in the Partnership’s Annual Report on Form 20-F filed with the SEC on February 17, 2015 and in the Prospectus Supplement filed with the SEC on June 22, 2015. Copies of the Annual Report, as well as subsequent filings, are available online at http://www.sec.gov.

 

The Partnership does not undertake to update any forward-looking statements as a result of new information or future events or developments except as may be required by law.

 

Contacts:

Simon Crowe

Chief Financial Officer

Phone: +44-203-388-3108

 

Jamie Buckland

Head of Investor Relations

Phone: +44-203-388-3116

Email: [email protected]

 

Samaan Aziz

Investor Relations Manager

Phone: +1 212 223 0643

Email: [email protected]

4

EXHIBIT I – Unaudited Fourth Quarter Financial Information: IFRS Common Control Reported Results

 

Unaudited condensed combined and consolidated statements of financial position

As of December 31, 2014 and December 31, 2015

(All amounts expressed in U.S. Dollars)

 

   December 31, 2014   December 31, 2015 
Assets          
Non-current assets          
Other non-current assets   2,063,026    2,076,766 
Vessels   1,311,857,369    1,274,733,866 
Total non-current assets   1,313,920,395    1,276,810,632 
Current assets          
Trade and other receivables   1,404,423    5,098,123 
Due from related parties   925,398    2,885,676 
Inventories   1,822,818    1,633,572 
Prepayments and other current assets   1,148,951    339,813 
Short-term investments   21,700,000    — 
Cash and cash equivalents   47,241,742    60,402,105 
Total current assets   74,243,332    70,359,289 
Total assets   1,388,163,727    1,347,169,921 
Owners’/partners’ equity and liabilities          
Owners’/partners’ equity          
Owners’ capital   146,163,067    — 
Common unitholders (14,322,358 units issued and outstanding as of December 31, 2014 and 21,822,358 units issued and outstanding as of December 31, 2015)   324,967,226    507,432,951 
Subordinated unitholders (9,822,358 units issued and outstanding as of December 31, 2014 and December 31, 2015)   77,087,950    59,785,646 
General partner (492,750 units issued and outstanding as of December 31, 2014 and 645,811 units issued and outstanding as of December 31, 2015)   6,085,438    8,841,527 
Incentive distribution rights   —    2,116,965 
Total owners’/partners’ equity   554,303,681    578,177,089 
Current liabilities          
Trade accounts payable   3,300,909    2,398,370 
Due to related parties   10,333,093    137,267 
Other payables and accruals   23,635,954    24,784,352 
Borrowings – current portion   20,999,800    325,767,736 
Total current liabilities   58,269,756    353,087,725 
Non-current liabilities          
Borrowings – non-current portion   775,537,142    415,722,907 
Other non-current liabilities   53,148    182,200 
Total non-current liabilities   775,590,290    415,905,107 
Total owners’/partners’ equity and liabilities   1,388,163,727    1,347,169,921 

5

Unaudited condensed combined and consolidated statements of profit or loss

For the three-month periods and the years ended December 31, 2014 and December 31, 2015

(All amounts expressed in U.S. Dollars)

 

   For the three months ended   For the years ended 
   December 31,
2014		   December 31,
2015		   December 31,
2014		   December 31,
2015		 
Revenues   51,449,010    51,953,449    158,169,691    199,688,989 
Vessel operating costs   (10,552,551)   (10,307,862)   (30,752,272)   (42,788,341)
Voyage expenses and commissions   (633,519)   (642,259)   (2,027,382)   (2,441,658)
Depreciation   (11,383,866)   (11,155,470)   (33,931,177)   (44,252,782)
General and administrative expenses   (2,081,698)   (2,664,176)   (6,382,130)   (10,986,012)
Profit from operations   26,797,376    27,183,682    85,076,730    99,220,196 
Financial costs   (13,938,152)   (6,886,128)   (33,393,318)   (27,201,945)
Financial income   15,091    1,577    40,593    25,575 
Loss on interest rate swaps   (4,805,218)   —    (8,078,240)   — 
Total other expenses, net   (18,728,279)   (6,884,551)   (41,430,965)   (27,176,370)
Profit for the period   8,069,097    20,299,131    43,645,765    72,043,826 
Less:                    
Profit attributable to GasLog’s operations   (6,922,992)   —    (29,101,636)   (7,003,443)
Profit attributable to Partnership’s operations(1)   1,146,105    20,299,131    14,544,129    65,040,383 
Partnership’s profit attributable to:                    
Common units   1,123,183    12,803,742    8,713,197    43,197,759 
Subordinated units   —    5,763,032    5,540,049    18,135,024 
General partner units   22,922    405,983    290,883    1,300,808 
Incentive distribution rights   —    1,326,374    —    2,406,792 
                     
Earnings per unit for the period, basic and diluted:                    
Common unit   0.08    0.59    0.75    2.38 
Subordinated unit   —    0.59    0.56    1.85 
General partner unit   0.05    0.63    0.66    2.28 
                     
(1)Referred to elsewhere in this earnings release as Partnership Performance Results.
6

Unaudited condensed combined and consolidated statements of cash flows

For the years ended December 31, 2014 and December 31, 2015

(All amounts expressed in U.S. Dollars)

 

   For the years ended 
   December 31,
2014		   December 31,
2015		 
Cash flows from operating activities:          
Profit for the year   43,645,765    72,043,826 
Adjustments for:          
Depreciation   33,931,177    44,252,782 
Financial costs   33,393,318    27,201,945 
Financial income   (40,593)   (25,575)
Unrealized loss on interest rate swaps held for trading   265,822    — 
Recycled loss of cash flow hedges reclassified to profit or loss   5,471,275    — 
Share-based compensation   —    205,196 
    116,666,764    143,678,174 
Movements in working capital   18,123,191    (7,209,797)
Cash provided by operations   134,789,955    136,468,377 
Interest paid   (25,191,501)   (23,238,237)
Net cash provided by operating activities   109,598,454    113,230,140 
Cash flows from investing activities:          
Payments for vessels’ additions   (787,600,977)   (7,141,672)
Financial income received   35,317    34,167 
Purchase of short-term investments   (35,694,481)   (4,000,000)
Maturity of short-term investments   15,494,481    25,700,000 
Net cash (used in)/provided by investing activities   (807,765,660)   14,592,495 
Cash flows from financing activities:          
Borrowings drawdowns   1,022,500,000    — 
Borrowings repayments   (611,895,191)   (57,500,000)
Payment of loan issuance costs   (13,334,047)   (922,080)
Proceeds from public offerings and issuance of general partner units, net of underwriting discounts and commissions   325,933,897    176,533,158 
Cash distribution to GasLog in exchange for contribution of net assets   (183,897,158)   (172,626,653)
Payment of offering costs   (3,964,438)   (1,104,297)
Distributions paid   (13,369,251)   (51,192,400)
Dividend due to GasLog before vessels’ drop-down   (9,800,000)   (7,850,000)
Decrease of amounts due to shareholders   (13,728,649)   — 
Capital contributions received   232,560,000    — 
Net cash provided by/(used in) financing activities   731,005,163    (114,662,272)
Increase in cash and cash equivalents   32,837,957    13,160,363 
Cash and cash equivalents, beginning of the year   14,403,785    47,241,742 
Cash and cash equivalents, end of the year   47,241,742    60,402,105 
7

EXHIBIT II

 

Non-GAAP Financial Measures:

 

Comparison of IFRS Common Control Reported Results in our Financial Statements and Partnership Performance Results:

 

Our IFRS Common Control Reported Results presented below are derived from the unaudited condensed combined and consolidated financial statements of the Partnership. Prior to the closing of our IPO, we did not own any vessels. The presentation in our financial statements assumes that our business was operated as a separate entity prior to its inception. The transfer of the three initial vessels from GasLog to the Partnership at the time of the IPO, the transfer of the two vessels from GasLog to the Partnership in September 2014 and the transfer of an additional three vessels from GasLog to the Partnership in July 2015 was each accounted for as a reorganization of entities under common control under IFRS. The unaudited condensed combined and consolidated financial statements include the accounts of the Partnership and its subsidiaries assuming that they are consolidated from the date of their incorporation by GasLog as they were under the common control of GasLog.

 

Our Partnership Performance Results presented below are non-GAAP measures and exclude amounts related to GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. (the owners of the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney) for the period prior to the closing of the IPO, GAS-sixteen Ltd. and GAS-seventeen Ltd. (the owners of the Methane Rita Andrea and the Methane Jane Elizabeth, respectively) for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. (the owners of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively) for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s unaudited condensed combined and consolidated financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control under IFRS, (i) GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. were not owned by the Partnership prior to the closing of the IPO, (ii) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership in September 2014 and (iii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership is not entitled to the cash or results generated in the period prior to such transfers.

 

The Partnership Performance Results are non-GAAP financial measures. GasLog Partners believes that these financial measures provide meaningful supplemental information to both management and investors regarding the financial and operating performance of the Partnership because such presentation is consistent with the calculation of the quarterly distribution and the earnings per unit, which similarly exclude the results of vessels prior to their transfer to the Partnership. These non-GAAP financial measures should not be viewed in isolation or as substitutes to the equivalent GAAP measures presented in accordance with IFRS, but should be used in conjunction with the most directly comparable IFRS Common Control Reported Results.

 

   For the three months ended December 31, 2014   For the year ended December 31, 2014 
(All amounts expressed in
U.S. dollars)		  Results
attributable to
GasLog		   Partnership
Performance
Results		   IFRS Common
Control
Reported
Results		   Results
attributable to
GasLog		   Partnership
Performance
Results		   IFRS Common
Control
Reported
Results		 
Revenues   18,147,000    33,302,010    51,449,010    92,238,784    65,930,907    158,169,691 
Vessel operating costs   (3,861,680)   (6,690,871)   (10,552,551)   (18,525,794)   (12,226,478)   (30,752,272)
Voyage expenses and commissions   (219,970)   (413,549)   (633,519)   (1,210,151)   (817,231)   (2,027,382)
Depreciation   (4,272,095)   (7,111,771)   (11,383,866)   (20,579,705)   (13,351,472)   (33,931,177)
General and administrative expenses   (171,948)   (1,909,750)   (2,081,698)   (1,791,433)   (4,590,697)   (6,382,130)
Profit from operations   9,621,307    17,176,069    26,797,376    50,131,701    34,945,029    85,076,730 
Financial costs   (2,702,315)   (11,235,837)   (13,938,152)   (18,187,894)   (15,205,424)   (33,393,318)
Financial income   4,000    11,091    15,091    17,695    22,898    40,593 
Loss on interest rate swaps   —    (4,805,218)   (4,805,218)   (2,859,866)   (5,218,374)   (8,078,240)
Total other expenses, net   (2,698,315)   (16,029,964)   (18,728,279)   (21,030,065)   (20,400,900)   (41,430,965)
Profit for the period   6,922,992    1,146,105    8,069,097    29,101,636    14,544,129    43,645,765 
         
   For the three months ended December 31, 2015   For the year ended December 31, 2015 
All amounts expressed in
U.S. dollars)		  Results
attributable to
GasLog		   Partnership
Performance
Results		   IFRS Common
Control
Reported
Results		   Results
attributable to
GasLog		   Partnership
Performance
Results		   IFRS Common
Control
Reported
Results		 
Revenues   —    51,953,449    51,953,449    30,762,151    168,926,838    199,688,989 
Vessel operating costs   —    (10,307,862)   (10,307,862)   (9,132,132)   (33,656,209)   (42,788,341)
Voyage expenses and commissions   —    (642,259)   (642,259)   (339,842)   (2,101,816)   (2,441,658)
Depreciation   —    (11,155,470)   (11,155,470)   (8,271,776)   (35,981,006)   (44,252,782)
General and administrative expenses   —    (2,664,176)   (2,664,176)   (602,963)   (10,383,049)   (10,986,012)
Profit from operations   —    27,183,682    27,183,682    12,415,438    86,804,758    99,220,196 
Financial costs   —    (6,886,128)   (6,886,128)   (5,413,406)   (21,788,539)   (27,201,945)
Financial income   —    1,577    1,577    1,411    24,164    25,575 
Total other expenses, net   —    (6,884,551)   (6,884,551)   (5,411,995)   (21,764,375)   (27,176,370)
Profit for the period   —    20,299,131    20,299,131    7,003,443    65,040,383    72,043,826 
8

EXHIBIT III

 

Non-GAAP Financial Measures:

 

EBITDA, Adjusted EBITDA and Adjusted Profit

 

EBITDA is defined as earnings before interest income and expense, gain/loss on interest rate swaps, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange gains/losses. Adjusted Profit represents earnings before non-cash gain/loss on interest rate swaps that includes (if any) (a) unrealized gain/loss on interest rate swaps held for trading, (b) loss at inception, (c) recycled loss of cash flow hedges reclassified to profit or loss and (d) ineffective portion of cash flow hedges, foreign exchange gains/losses and write-off of unamortized loan fees, if any. EBITDA, Adjusted EBITDA and Adjusted Profit, which are non-GAAP financial measures, are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Partnership believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Partnership believes that including EBITDA, Adjusted EBITDA and Adjusted Profit assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing whether to continue to hold our common units. This increased comparability is achieved by excluding the potentially disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, gains/losses on interest rate swaps, taxes, depreciation and amortization; in the case of Adjusted EBITDA, foreign exchange gains/losses; and in the case of Adjusted Profit, non-cash gain/loss on interest rate swaps, foreign exchange gains/losses and write-off of unamortized loan fees, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods.

 

EBITDA, Adjusted EBITDA and Adjusted Profit have limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to profit, profit from operations, earnings per unit or any other measure of financial performance presented in accordance with IFRS. Some of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) changes in, or cash requirements for our working capital needs and (iii) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. They are not adjusted for all non-cash income or expense items that are reflected in our statement of cash flows and other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

 

EBITDA, Adjusted EBITDA and Adjusted Profit are presented on the basis of IFRS Common Control Reported Results and Partnership Performance Results. Partnership Performance Results are non-GAAP measures. The difference between IFRS Common Control Reported Results and Partnership Performance Results are results attributable to GasLog.

 

Certain numerical figures included in this press release have been rounded. Discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding.

 

Reconciliation of EBITDA and Adjusted EBITDA to Profit:

(Amounts expressed in U.S. Dollars)

 

   For the three months ended 
   IFRS Common Control Reported
Results		   Partnership Performance
Results		 
   December 31,
2014		   December 31,
2015		   December 31,
2014(1)		   December 31,
2015(2)		 
Profit for the period   8,069,097    20,299,131    1,146,105    20,299,131 
Depreciation   11,383,866    11,155,470    7,111,771    11,155,470 
Financial costs   13,938,152    6,886,128    11,235,837    6,886,128 
Financial income   (15,091)   (1,577)   (11,091)   (1,577)
Loss on interest rate swaps   4,805,218    —    4,805,218    — 
EBITDA   38,181,242    38,339,152    24,287,840    38,339,152 
Foreign exchange (gains)/losses, net(3)   (199,732)   5,173    (96,749)   5,173 
Adjusted EBITDA   37,981,510    38,344,325    24,191,091    38,344,325 
9
   For the year ended 
   IFRS Common Control Reported
Results		   Partnership Performance
Results		 
   December 31,
2014		   December 31,
2015		   December 31,
2014(1)		   December 31,
2015(4)		 
Profit for the year   43,645,765    72,043,826    14,544,129    65,040,383 
Depreciation   33,931,177    44,252,782    13,351,472    35,981,006 
Financial costs   33,393,318    27,201,945    15,205,424    21,788,539 
Financial income   (40,593)   (25,575)   (22,898)   (24,164)
Loss on interest rate swaps   8,078,240    —    5,218,374      
EBITDA   119,007,907    143,472,978    48,296,501    122,785,764 
Foreign exchange (gains)/losses, net(3)   (133,352)   50,033    (140,712)   56,064 
Adjusted EBITDA   118,874,555    143,523,011    48,155,789    122,841,828 

 

Reconciliation of Adjusted Profit to Profit

(Amounts expressed in U.S. Dollars)

 

   For the three months ended 
   IFRS Common Control Reported
Results		   Partnership Performance
Results		 
   December 31,
2014		   December 31,
2015		   December 31,
2014(1)		   December 31,
2015(2)		 
Profit for the period   8,069,097    20,299,131    1,146,105    20,299,131 
Foreign exchange (gains)/losses, net(3)   (199,732)   5,173    (96,749)   5,173 
Non-cash loss on interest rate swaps(3)   4,446,362    —    4,446,362    — 
Write-off of unamortized loan fees(3)   5,756,738    —    5,756,738    — 
Adjusted Profit   18,072,465    20,304,304    11,252,456    20,304,304 

 

   For the year ended 
   IFRS Common Control Reported
Results		   Partnership Performance
Results		 
   December 31,
2014		   December 31,
2015		   December 31,
2014(1)		   December 31,
2015(4)		 
Profit for the year   43,645,765    72,043,826    14,544,129    65,040,383 
Foreign exchange (gains)/losses, net(3)   (133,352)   50,033    (140,712)   56,064 
Non-cash loss on interest rate swaps(3)   5,737,097    —    3,682,199    — 
Write-off of unamortized loan fees(3)   9,018,651    —    5,756,738    — 
Adjusted Profit   58,268,161    72,093,859    23,842,354    65,096,447 

 

Distributable Cash Flow

 

Distributable cash flow with respect to any quarter means Adjusted EBITDA, as defined above for the Partnership Performance Results, after considering cash interest expense for the period, including realized loss on interest rate swaps (if any) and excluding amortization of loan fees, estimated drydocking and replacement capital reserves established by the Partnership. Estimated drydocking and replacement capital reserves represent capital expenditures required to renew and maintain over the long-term the operating capacity of, or the revenue generated by our capital assets. Distributable cash flow is a quantitative standard used by investors in publicly-traded partnerships to assess their ability to make quarterly cash distributions. Our calculation of Distributable cash flow may not be comparable to that reported by other companies. Distributable cash flow is a non-GAAP financial measure and should not be considered as an alternative to profit or any other indicator of the Partnership’s performance calculated in accordance with GAAP. The table below reconciles Distributable cash flow to Profit for the period attributable to the Partnership.

10

Reconciliation of Distributable Cash Flow to Profit:

 

(Amounts expressed in U.S. Dollars)

 

   For the three months ended   For the year ended 
   December 31, 2014(1)   December 31, 2015(2)   December 31, 2014(1)   December 31, 2015(4) 
Partnership’s profit for the period   1,146,105    20,299,131    14,544,129    65,040,383 
Depreciation   7,111,771    11,155,470    13,351,472    35,981,006 
Financial costs   11,235,837    6,886,128    15,205,424    21,788,539 
Financial income   (11,091)   (1,577)   (22,898)   (24,164)
Loss on interest rate swaps   4,805,218    —    5,218,374    — 
EBITDA   24,287,840    38,339,152    48,296,501    122,785,764 
Foreign exchange (gains)/losses, net   (96,749)   5,173    (140,712)   56,064 
Adjusted EBITDA   24,191,091    38,344,325    48,155,789    122,841,828 
Cash interest expense excluding amortization of loan fees   (5,323,785)   (6,113,938)   (9,912,293)   (19,484,260)
Drydocking capital reserve   (1,499,068)   (2,669,872)   (2,620,882)   (8,337,880)
Replacement capital reserve   (4,340,466)   (7,014,530)   (8,504,564)   (22,709,992)
Distributable cash flow   13,027,772    22,545,985    27,118,050    72,309,696 
Other reserves(5)   (2,310,547)   (6,834,320)   (3,031,574)   (16,122,857)
Cash distribution declared   10,717,225    15,711,665    24,086,476    56,186,839 

 

(1) Excludes amounts related to GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. (the owners of the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney) for the period prior to the closing of the IPO, GAS-sixteen Ltd. and GAS-seventeen Ltd. (the owners of the Methane Rita Andrea and the Methane Jane Elizabeth, respectively) for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. (the owners of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively) for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s unaudited condensed combined and consolidated financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control under IFRS, (i) GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. were not owned by the Partnership prior to the closing of the IPO, (ii) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership in September 2014 and (iii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers.

 

(2) Amounts reflected in the Partnership’s unaudited condensed combined and consolidated financial statements for the three months ended December 31, 2015 are fully attributable to the Partnership.

 

(3) The difference between IFRS Common Control Reported Results and Partnership Performance Results are results attributable to GasLog.

 

(4) Excludes amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. (the owners of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively) for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s unaudited condensed combined and consolidated financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control under IFRS, GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers.

 

(5) Refers to reserves (other than the drydocking and replacement capital reserves) for the proper conduct of the business of the Partnership and its subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership and its subsidiaries).

11

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