Highlights
- GAAP net income attributable to the partners and preferred unitholders of $16.4 million and GAAP net income per common unit of $0.12.
- Adjusted net income(1) attributable to the partners and preferred unitholders of $34.4 million and adjusted net income per common unit of $0.35 (excluding items listed in Appendix A to this release).
- Total Adjusted EBITDA(1) of $162.1 million.
- Took delivery of the third, 50 percent-owned ARC7 LNG carrier newbuilding, which immediately commenced its 27-year charter contract servicing the Yamal LNG project, and expect the fourth vessel to deliver mid-August 2019.
- 2019 results expected to be within earnings and Adjusted EBITDA(1) guidance ranges.
HAMILTON, Bermuda, Aug. 01, 2019 (GLOBE NEWSWIRE) -- 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 June 30, 2019.
Consolidated Financial Summary
| Three Months Ended | ||||||
| June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||
| (in thousands of U.S. Dollars, except per unit data) | (unaudited) | (unaudited) | (unaudited) | |||
| GAAP FINANCIAL COMPARISON | ||||||
| Voyage revenues | 153,060 | 149,744 | 122,315 | |||
| Income from vessel operations | 74,677 | 69,361 | 10,505 | |||
| Equity income | 1,738 | 5,578 | 11,194 | |||
| Net income attributable to the partners and preferred unitholders | 16,435 | 21,617 | 2,734 | |||
| Limited partners’ interest in net income (loss) per common unit | 0.12 | 0.19 | (0.05 | ) | ||
| NON-GAAP FINANCIAL COMPARISON | ||||||
| Adjusted net income attributable to the partners and preferred unitholders(1) | 34,435 | 33,365 | 13,535 | |||
| Limited partners’ interest in adjusted net income per common unit | 0.35 | 0.34 | 0.09 | |||
| Total Adjusted EBITDA(1) | 162,069 | 158,214 | 115,005 | |||
| Distributable cash flow (DCF)(1) | 56,330 | 54,214 | 31,116 | |||
(1) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under United States generally accepted accounting principles (GAAP).
(2) The Partnership’s Total (Proportionate Consolidated) Adjusted EBITDA guidance range for 2019 has increased by approximately $30 million, to $665-690 million, to include the non-controlling interest portion of Adjusted EBITDA relating to the Tangguh and RasGas2 joint ventures, which is consistent with the calculation method as described in this Earnings Release under Definitions of Non-GAAP Financial Measures. The 2019 Consolidated Adjusted EBITDA and Total Adjusted EBITDA guidance metrics provided by the Partnership have been normalized to exclude any Awilco deferred revenue.
Second Quarter of 2019 Compared to Second Quarter of 2018
GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders for the three months ended June 30, 2019, compared to the same quarter in the prior year, were positively impacted by: earnings from the nine liquefied natural gas (LNG) carrier newbuildings delivered into the Partnership’s consolidated fleet and equity-accounted joint ventures between May 2018 and June 2019; higher earnings from the Torben Spirit upon redeployment at a higher charter rate that commenced in December 2018; lower vessel operating expenses due to timing of expenditures; lower general and administrative expenses due primarily to lower corporate costs; and higher earnings from the Partnership's seven multi-gas carriers. These increases in earnings were partially offset by lower earnings from the Partnership's conventional tanker fleet for the three months ended June 30, 2019 due to the sales of three conventional tankers between October 2018 and January 2019.
In addition, GAAP net income attributable to the partners and preferred unitholders was positively impacted in the three months ended June 30, 2019, compared to the same quarter of the prior year, by various items, including a decrease in the write-down of vessels, partially offset by increases in unrealized losses on non-designated derivative instruments.
CEO Commentary
“Our financial results improved again this quarter compared to both the previous quarter and the same quarter last year due to recent newbuilding deliveries and higher charter rates on certain LNG carriers, partially offset by an increase in drydocks and waiting time prior to the commencement of recently secured LNG charters at higher rates,” commented Mark Kremin, Teekay Gas Group Ltd.’s President and Chief Executive Officer. “Looking ahead, we expect our financial results for the second half of this year to continue to improve now that each of these new charters have commenced, leading to higher utilization and higher revenues, coupled with fewer drydocks and the expected delivery of another three 50 percent-owned Yamal ARC7 LNG newbuildings and the start-up of the Bahrain LNG regasification terminal.”
Mr. Kremin continued, “I am also pleased to report that our smaller LPG segment generated stronger Adjusted EBITDA this quarter compared to both last quarter and the same quarter of the prior year, now that all of our wholly-owned multi-gas carriers have transitioned into the Lauritzen-Kosan Pool. We are encouraged to see that charter rates for larger LPG carriers have been strengthening recently, which may translate into higher charter rates for our mid-size LPG carriers.”
“As our fixed-rate cash flows increase as newbuild vessels deliver, the Partnership’s delevering trend, which began over a year ago, continued again this quarter and at the same time, we have been returning capital to unitholders with the recent 36 percent increase in distributions and opportunistic common unit repurchases,” commented Mr. Kremin. “We remain committed to our balanced capital allocation plan, which we believe will create value to our long-term unitholders.”
Summary of Recent Events
In June 2019, the Partnership took delivery of the third, 50 percent-owned ARC7 LNG carrier newbuilding, the Nikolay Yevgenov, which immediately commenced its 27-year charter contract servicing the Yamal LNG project.
The three-year charter contract for the Magellan Spirit, the three-year charter contract extension for the Polar Spirit and the one-year charter contracts for the Arwa Spirit and Marib Spirit, both of which are owned by the Partnership's 52 percent-owned Teekay LNG-Marubeni Joint Venture, commenced at higher charter rates between May 2019 and July 2019.
In December 2018, the Board of Teekay LNG's general partner approved a $100 million unit repurchase program. Since that time, the Partnership has repurchased a total of 1.43 million common units, or approximately 2 percent of the outstanding common units immediately prior to commencement of the program, for a total cost of $16.9 million, representing an average repurchase price of $11.86 per unit.
Operating Results
The following table highlights certain financial information for Teekay LNG’s three segments: the Liquefied Natural Gas Segment, the Liquefied Petroleum Gas Segment and the Conventional Tanker Segment (please refer to the “Teekay LNG’s Fleet” section of this release below and Appendices D and E for further details).
| Three Months Ended | ||||||||||||||||
| June 30, 2019 | June 30, 2018 | |||||||||||||||
| (in thousands of U.S. Dollars) | (unaudited) | (unaudited) | ||||||||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||||||
| GAAP FINANCIAL COMPARISON | ||||||||||||||||
| Voyage revenues | 141,833 | 8,858 | 2,369 | 153,060 | 105,405 | 6,767 | 10,143 | 122,315 | ||||||||
| Income (loss) from vessel operations | 73,933 | 311 | 433 | 74,677 | 50,631 | (41,186 | ) | 1,060 | 10,505 | |||||||
| Equity income (loss) | 3,377 | (1,639 | ) | — | 1,738 | 12,619 | (1,425 | ) | — | 11,194 | ||||||
| NON-GAAP FINANCIAL COMPARISON | ||||||||||||||||
| Consolidated Adjusted EBITDA(i) | 111,109 | 2,341 | 602 | 114,052 | 78,299 | (5,943 | ) | 2,235 | 74,591 | |||||||
| Adjusted EBITDA from equity-accounted vessels(i) | 40,095 | 7,922 | — | 48,017 | 34,179 | 6,235 | — | 40,414 | ||||||||
| Total Adjusted EBITDA(i) | 151,204 | 10,263 | 602 | 162,069 | 112,478 | 292 | 2,235 | 115,005 | ||||||||
- These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.
Liquefied Natural Gas Segment
Income from vessel operations and Consolidated Adjusted EBITDA for the liquefied natural gas segment for the three months ended June 30, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of five wholly-owned LNG carrier newbuildings (the Myrina, Megara, Bahrain Spirit, Sean Spirit and Yamal Spirit) between May 2018 and January 2019; and higher earnings from the Torben Spirit upon redeployment in December 2018 at a higher charter rate. These increases were partially offset by an increase in off-hire days in the second quarter of 2019 for certain of the Partnership’s LNG carriers due to repairs and a scheduled dry docking.
Equity income and Adjusted EBITDA from equity-accounted vessels for the liquefied natural gas segment for the three months ended June 30, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of two LNG carrier newbuildings between July 2018 and January 2019 to the Partnership's 20 percent-owned joint venture with China LNG Shipping (Holdings) Limited, CETS Investment Management (HK) Co. Limited and BW LNG Investments Pte. Ltd. (the Pan Union Joint Venture), and the deliveries of two ARC7 LNG carrier newbuildings between September 2018 and June 2019 to the Partnership’s 50 percent-owned Joint Venture with China LNG Shipping (Holdings) Limited (the Yamal LNG Joint Venture); partially offset by the commencement of the Partnership's 21-year time-charter contract for the Bahrain Spirit in September 2018 in the Partnership's 30 percent-owned joint venture with the Natural Oil and Gas Authority, Gulf Investment Corporation G.S.C. and Samsung C&T (the Bahrain LNG Joint Venture) ahead of the commencement of operations of the LNG regasification terminal in Bahrain; and scheduled dry dockings and planned maintenance on certain vessels in the Partnership's 52 percent-owned joint venture with Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture). In addition, GAAP equity income was negatively impacted by unrealized losses on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the second quarter of 2019 compared to gains on designated and non-designated derivative instruments in the second quarter of 2018.
Liquefied Petroleum Gas Segment
Income (loss) from vessel operations and Consolidated Adjusted EBITDA for the liquefied petroleum gas segment for the three months ended June 30, 2019, compared to the same quarter of the prior year, were positively impacted by: higher earnings from the Partnership's seven multi-gas carriers, which earned higher spot revenues during the second quarter of 2019; and lower vessel operating expenses due to timing of expenditures. In addition, income (loss) from vessel operations for the three months ended June 30, 2018, included a $33 million impairment charge relating to four multi-gas carriers.
Equity income and Adjusted EBITDA from equity-accounted vessels for the liquefied petroleum gas segment for the three months ended June 30, 2019, compared to the same quarter of the prior year, were positively impacted by fewer off-hire days for scheduled dry dockings and repairs in the Partnership’s 50/50 joint venture with Exmar NV (the Exmar LPG Joint Venture). In addition, GAAP equity income was negatively impacted by unrealized losses on non-designated derivative instruments in the Exmar LPG Joint Venture for the three months ended June 30, 2019, compared to unrealized gains in the same quarter of the prior year.
Conventional Tanker Segment
Income from vessel operations and Consolidated Adjusted EBITDA for the conventional tanker segment for the three months ended June 30, 2019, compared to the same quarter of the prior year, were negatively impacted by the sales of the European Spirit, African Spirit and Toledo Spirit between October 2018 and January 2019.
Teekay LNG's Fleet
The following table summarizes the Partnership’s fleet as of July 31, 2019. The Partnership also owns a 30 percent interest in a regasification terminal in Bahrain which is under construction and is expected to commence operations in the second half of 2019.
| Number of Vessels | |||
| Owned and In-Chartered Vessels(i) | Newbuildings | Total | |
| LNG Carrier Fleet | 46(ii) | 3(iii) | 49 |
| LPG/Multi-gas Carrier Fleet | 29(iv) | — | 29 |
| Conventional Tanker Fleet | 1(V) | — | 1 |
| Total | 76 | 3 | 79 |
- Includes vessels leased by the Partnership from third parties and accounted for as finance leases.
- The Partnership’s ownership interests in these vessels range from 20 percent to 100 percent.
- The Partnership’s ownership interest in these newbuildings is 50 percent.
- The Partnership’s ownership interests in these vessels range from 50 percent to 99 percent.
- The Partnership is currently marketing its Handymax product tanker for sale and it has been recorded as "Vessel Held For Sale" in the Partnership's Consolidated Balance Sheets.
Liquidity
As of June 30, 2019, the Partnership had total liquidity of $337.4 million (comprised of $124.9 million in cash and cash equivalents and $212.5 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, August 1, 2019 at 11:00 a.m. (ET) to discuss the results for the second quarter of 2019. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
- By dialing (877) 260-1479 or (647) 490-5367, if outside North America, and quoting conference ID code 5554354.
- By accessing the webcast, which will be available on Teekay LNG’s website at www.teekay.com (the archive will remain on the website for a period of one year).
An accompanying Second Quarter 2019 Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fee-based charter contracts through its interests in 49 LNG carriers (including three newbuildings), 22 mid-size LPG carriers, seven multi-gas carriers and one conventional tanker. The Partnership's ownership interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in a regasification terminal, which is currently under construction. Teekay LNG Partners is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.
Teekay LNG Partners’ common units and preferred units trade on the New York Stock Exchange under the symbols “TGP”, “TGP PR A” and “TGP PR B”, respectively.
For Investor Relations enquiries contact:
Ryan Hamilton
Tel: +1 (604) 609-2963
Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the SEC. These non-GAAP financial measures which include Adjusted Net Income Attributable to the Partners and Preferred Unitholders, Distributable Cash Flow and Adjusted EBITDA, are intended to provide additional information and should not be considered substitutes for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and may not be comparable to similar measures presented by other companies. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.
In 2018 and prior periods, the Partnership reported Cash Flow from Vessel Operations (CFVO), as a non-GAAP measure. In the first quarter of 2019, the Partnership made certain changes to its non-GAAP financial measures to more closely align with internal management reporting, annual reporting with the SEC under Form 20-F and metrics used by certain investors. CFVO from Consolidated Vessels and Total CFVO were replaced with Consolidated Adjusted EBITDA and Total Adjusted EBITDA, respectively, for current and comparative periods.
Non-GAAP Financial Measures
Adjusted EBITDA represents net income (loss) before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel write-downs, gains or losses on sale of vessels and equity-accounted investments, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, amortization of in-process contracts, adjustments for direct financing leases to a cash basis, and certain other income or expenses. Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA represents Adjusted EBITDA from vessels that are consolidated on the Partnership's financial statements. Adjusted EBITDA from Equity-Accounted Vessels represents the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted vessels. The Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the entity in which the Partnership holds the equity-accounted investments or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of any such distributions to the Partnership and other owners. Adjusted EBITDA is a non-GAAP financial measure used by certain investors and management to measure the operational performance of companies. Please refer to Appendices C and E of this release for reconciliations of Adjusted EBITDA to net income and equity income, respectively, which are the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements.
Adjusted Net Income Attributable to the Partners and Preferred Unitholders excludes items of income or loss from GAAP net income that are typically excluded by securities analysts in their published estimates of the Partnership’s financial results. The Partnership believes that certain investors use this information to evaluate the Partnership’s financial performance, as does management. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to net income, and refer to footnote (4) of the Consolidated Statements of Income (Loss) for a reconciliation of adjusted equity income to equity income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.
Distributable Cash Flow (DCF) represents GAAP net income adjusted for write-down of vessels, depreciation and amortization expense, deferred income tax and other non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from non-designated derivative instruments, distributions relating to equity financing of newbuilding installments, distributions relating to preferred units, adjustments for direct financing leases to a cash basis, unrealized foreign currency exchange gains or losses and the Partnership’s proportionate share of such items in its equity-accounted for investments. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, the Partnership’s capital assets. DCF is a quantitative standard used in the publicly-traded partnership investment community and by management to assist in evaluating financial performance. Please refer to Appendix B of this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.
Teekay LNG Partners L.P.
Consolidated Statements of Income (Loss)
(in thousands of U.S. Dollars, except unit and per unit data)
| Three Months Ended | Six Month Ended | |||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
| Voyage revenues | 153,060 | 149,744 | 122,315 | 302,804 | 237,621 | |||||
| Voyage expenses | (6,023 | ) | (5,775 | ) | (7,951 | ) | (11,798 | ) | (13,752 | ) |
| Vessel operating expenses(1) | (27,457 | ) | (26,101 | ) | (33,219 | ) | (53,558 | ) | (61,186 | ) |
| Time-charter hire expense | (3,080 | ) | (5,591 | ) | — | (8,671 | ) | — | ||
| Depreciation and amortization | (35,338 | ) | (34,126 | ) | (29,794 | ) | (69,464 | ) | (59,061 | ) |
| General and administrative expenses(1) | (5,667 | ) | (6,632 | ) | (7,846 | ) | (12,299 | ) | (14,917 | ) |
| Write-down of vessels(2) | — | — | (33,000 | ) | — | (51,662 | ) | |||
| Restructuring charges(3) | (818 | ) | (2,158 | ) | — | (2,976 | ) | (1,396 | ) | |
| Income from vessel operations | 74,677 | 69,361 | 10,505 | 144,038 | 35,647 | |||||
| Equity income(4) | 1,738 | 5,578 | 11,194 | 7,316 | 37,918 | |||||
| Interest expense | (41,018 | ) | (42,217 | ) | (28,171 | ) | (83,235 | ) | (52,877 | ) |
| Interest income | 960 | 1,078 | 902 | 2,038 | 1,816 | |||||
| Realized and unrealized (loss) gain on non-designated derivative instruments(5) | (7,826 | ) | (6,617 | ) | 4,302 | (14,443 | ) | 12,303 | ||
| Foreign currency exchange (loss) gain(6) | (7,243 | ) | (731 | ) | 8,443 | (7,974 | ) | 7,170 | ||
| Other income (expense)(7) | 236 | 251 | 350 | 487 | (52,232 | ) | ||||
| Net income (loss) before tax expense | 21,524 | 26,703 | 7,525 | 48,227 | (10,255 | ) | ||||
| Income tax expense | (2,472 | ) | (2,578 | ) | (843 | ) | (5,050 | ) | (1,622 | ) |
| Net income (loss) | 19,052 | 24,125 | 6,682 | 43,177 | (11,877 | ) | ||||
| Non-controlling interest in net income (loss) | 2,617 | 2,508 | 3,948 | 5,125 | (7,717 | ) | ||||
| Preferred unitholders' interest in net income (loss) | 6,425 | 6,425 | 6,426 | 12,850 | 12,851 | |||||
| General partner's interest in net income (loss) | 200 | 304 | (68 | ) | 504 | (340 | ) | |||
| Limited partners’ interest in net income (loss) | 9,810 | 14,888 | (3,624 | ) | 24,698 | (16,671 | ) | |||
| Limited partners' interest in net income (loss) per common unit: | ||||||||||
| • Basic | 0.12 | 0.19 | (0.05 | ) | 0.31 | (0.21 | ) | |||
| • Diluted | 0.12 | 0.19 | (0.05 | ) | 0.31 | (0.21 | ) | |||
| Weighted-average number of common units outstanding: | ||||||||||
| • Basic | 78,603,636 | 78,598,678 | 79,687,499 | 78,600,342 | 79,667,384 | |||||
| • Diluted | 78,685,537 | 78,680,661 | 79,687,499 | 78,682,263 | 79,667,384 | |||||
| Total number of common units outstanding at end of period | 78,441,316 | 78,626,403 | 79,687,499 | 78,441,316 | 79,687,499 | |||||
(1) The comparative figures for vessel operating expenses and general and administrative expenses for the three and six months ended June 30, 2018 have been reclassified to conform to the presentation adopted in the current period relating to the classification of certain related party transactions. The reclassification had the effect of decreasing vessel operating expenses and increasing general and administrative expenses by $0.8 million and $1.3 million, respectively, for the three and six months ended June 30, 2018. There is no impact on income from vessel operations or net income (loss) as a result of this reclassification.
(2) In June 2018, the Partnership wrote-down four of its wholly-owned multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and Cathinka Spirit) and recorded an impairment charge of $33.0 million for the three and six months ended June 30, 2018 in the Partnership's Consolidated Statements of Income (Loss). In addition, for the six months ended June 30, 2018, the Partnership recorded an aggregate write-down of $5.7 million on the African Spirit and European Spirit conventional tankers and recorded a write-down of $13.0 million relating to the Alexander Spirit conventional tanker.
(3) In January 2019 and February 2018, the Toledo Spirit and Teide Spirit, respectively, were sold and as a result of these sales, the Partnership recorded restructuring charges of $0.8 million for the three months ended June 30, 2019, $2.2 million for the three months ended March 31, 2019, and $3.0 million and $1.4 million for the six months ended June 30, 2019 and 2018, respectively, relating to seafarer severance costs.
(4) The Partnership’s proportionate share of items within equity income as identified in Appendix A of this release is detailed in the table below. By excluding these items from equity income, the Partnership believes the resulting adjusted equity income is a normalized amount that can be used to better evaluate the financial performance of the Partnership’s equity-accounted investments. Adjusted equity income is a non-GAAP financial measure.
| Three Months Ended | Six Month Ended | |||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||
| Equity income | 1,738 | 5,578 | 11,194 | 7,316 | 37,918 | |||||
| Proportionate share of unrealized loss (gain) on non-designated interest rate swaps | 5,102 | 4,360 | (2,977 | ) | 9,462 | (11,198 | ) | |||
| Proportionate share of ineffective portion of hedge-accounted interest rate swaps | — | — | (1,809 | ) | — | (5,068 | ) | |||
| Gain on sale of equity-accounted investment | — | — | — | — | (5,563 | ) | ||||
| Proportionate share of other items | 1,124 | 345 | (128 | ) | 1,469 | 257 | ||||
| Equity income adjusted for items in Appendix A | 7,964 | 10,283 | 6,280 | 18,247 | 16,346 | |||||
(5) The realized (losses) gains on non-designated derivative instruments relate to the amounts the Partnership actually paid or received to settle non-designated derivative instruments and the unrealized (losses) gains on non-designated derivative instruments relate to the change in fair value of such non-designated derivative instruments, as detailed in the table below:
| Three Months Ended | Six Month Ended | |||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||
| Realized (losses) gains relating to: | ||||||||||
| Interest rate swap agreements | (2,392 | ) | (2,385 | ) | (4,310 | ) | (4,777 | ) | (8,788 | ) |
| Toledo Spirit time-charter derivative contract | — | — | 150 | — | 459 | |||||
| (2,392 | ) | (2,385 | ) | (4,160 | ) | (4,777 | ) | (8,329 | ) | |
| Unrealized (losses) gains relating to: | ||||||||||
| Interest rate swap agreements | (5,333 | ) | (4,192 | ) | 7,522 | (9,525 | ) | 19,420 | ||
| Foreign currency forward contracts | (101 | ) | — | — | (101 | ) | — | |||
| Interest rate swaption agreements | — | — | — | — | 2 | |||||
| Toledo Spirit time-charter derivative contract | — | (40 | ) | 940 | (40 | ) | 1,210 | |||
| (5,434 | ) | (4,232 | ) | 8,462 | (9,666 | ) | 20,632 | |||
| Total realized and unrealized (losses) gains on non-designated derivative instruments | (7,826 | ) | (6,617 | ) | 4,302 | (14,443 | ) | 12,303 | ||
(6) For accounting purposes, the Partnership is required to revalue all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rates at the end of each reporting period. This revaluation does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized foreign currency translation gains or losses in the Consolidated Statements of Income (Loss).
Foreign currency exchange (loss) gain includes realized losses relating to the amounts the Partnership paid to settle 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. Foreign currency exchange (loss) gain also includes unrealized (losses) gains relating to the change in fair value of such derivative instruments and unrealized (losses) gains on the revaluation of the NOK bonds as detailed in the table below:
| Three Months Ended | Six Month Ended | |||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||
| Realized losses on cross-currency swaps | (1,087 | ) | (1,434 | ) | (1,798 | ) | (2,521 | ) | (3,182 | ) |
| Unrealized (losses) gains on cross currency swaps | (139 | ) | (1,920 | ) | (16,566 | ) | (2,059 | ) | 5,768 | |
| Unrealized (losses) gains on revaluation of NOK bonds | (3,901 | ) | (579 | ) | 14,852 | (4,480 | ) | (2,635 | ) | |
(7) Following the termination of the capital lease arrangements for the three LNG carriers in Teekay Nakilat Corporation (the Teekay Nakilat Joint Venture), the lessor made a determination in 2018 that additional rentals were due under the leases following a challenge by the UK taxing authority. As a result, during the six months ended June 30, 2018, the Teekay Nakilat Joint Venture recognized an additional liability of $53.0 million which was included as part of other income (expense) in the Consolidated Statements of Income (Loss), and subsequently settled this liability by releasing a $7.0 million cash deposit it had made with the lessor and making a $56.0 million cash payment for the balance, which was based on the GBP/USD foreign currency exchange rates at the time the payments were made.
Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
| As at June 30, | As at March 31, | As at December 31, | ||||
| 2019 | 2019 | 2018 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 124,880 | 122,589 | 149,014 | |||
| Restricted cash – current | 48,869 | 45,329 | 38,329 | |||
| Accounts receivable | 25,439 | 23,962 | 20,795 | |||
| Prepaid expenses | 8,087 | 10,937 | 8,076 | |||
| Vessel held for sale | 12,300 | — | — | |||
| Current portion of derivative assets | — | 433 | 835 | |||
| Current portion of net investments in direct financing leases | 13,082 | 12,939 | 12,635 | |||
| Current portion of advances to equity-accounted joint ventures | 79,108 | 79,363 | 79,108 | |||
| Advances to affiliates | 22,831 | 10,146 | 8,229 | |||
| Other current assets | 238 | 1,812 | 2,306 | |||
| Total current assets | 334,834 | 307,510 | 319,327 | |||
| Restricted cash – long-term | 31,439 | 32,686 | 35,521 | |||
| Vessels and equipment | ||||||
| At cost, less accumulated depreciation | 1,616,029 | 1,645,351 | 1,657,338 | |||
| Operating lease right-of-use asset | 40,666 | 19,602 | — | |||
| Vessels related to finance leases, at cost, less accumulated depreciation | 1,704,908 | 1,758,028 | 1,585,243 | |||
| Advances on newbuilding contracts | — | — | 86,942 | |||
| Total vessels and equipment | 3,361,603 | 3,422,981 | 3,329,523 | |||
| Investments in and advances to equity-accounted joint ventures | 994,880 | 1,017,088 | 1,037,025 | |||
| Net investments in direct financing leases | 551,603 | 558,857 | 562,528 | |||
| Derivative assets | — | 362 | 2,362 | |||
| Other assets | 12,204 | 11,508 | 11,432 | |||
| Intangible assets – net | 47,794 | 50,008 | 52,222 | |||
| Goodwill | 34,841 | 34,841 | 34,841 | |||
| Total assets | 5,369,198 | 5,435,841 | 5,384,781 | |||
| LIABILITIES AND EQUITY | ||||||
| Current | ||||||
| Accounts payable | 1,169 | 6,542 | 3,830 | |||
| Accrued liabilities | 72,241 | 73,730 | 74,753 | |||
| Unearned revenue | 24,573 | 24,102 | 30,108 | |||
| Current portion of long-term debt | 402,513 | 136,272 | 135,901 | |||
| Current obligations related to finance leases | 65,525 | 65,090 | 81,219 | |||
| Current portion of operating lease liabilities | 13,098 | 12,863 | — | |||
| Current portion of derivative liabilities | 27,805 | 12,060 | 11,604 | |||
| Advances from affiliates | 15,655 | 14,475 | 14,731 | |||
| Total current liabilities | 622,579 | 345,134 | 352,146 | |||
| Long-term debt | 1,465,155 | 1,770,812 | 1,833,875 | |||
| Long-term obligations related to finance leases | 1,334,271 | 1,350,897 | 1,217,337 | |||
| Long-term operating lease liabilities | 27,568 | 6,739 | — | |||
| Other long-term liabilities | 46,171 | 45,966 | 43,788 | |||
| Derivative liabilities | 54,767 | 61,164 | 55,038 | |||
| Total liabilities | 3,550,511 | 3,580,712 | 3,502,184 | |||
| Equity | ||||||
| Limited partners – common units | 1,485,516 | 1,493,278 | 1,496,107 | |||
| Limited partners – preferred units | 285,159 | 285,159 | 285,159 | |||
| General partner | 49,056 | 49,215 | 49,271 | |||
| Accumulated other comprehensive (loss) income | (53,232 | ) | (23,504 | ) | 2,717 | |
| Partners' equity | 1,766,499 | 1,804,148 | 1,833,254 | |||
| Non-controlling interest | 52,188 | 50,981 | 49,343 | |||
| Total equity | 1,818,687 | 1,855,129 | 1,882,597 | |||
| Total liabilities and total equity | 5,369,198 | 5,435,841 | 5,384,781 | |||
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
| Six Month Ended | ||||
| June 30, | June 30, | |||
| 2019 | 2018 | |||
| (unaudited) | (unaudited) | |||
| Cash, cash equivalents and restricted cash provided by (used for) | ||||
| OPERATING ACTIVITIES | ||||
| Net income (loss) | 43,177 | (11,877 | ) | |
| Non-cash items: | ||||
| Unrealized loss (gain) on non-designated derivative instruments | 9,666 | (20,632 | ) | |
| Depreciation and amortization | 69,464 | 59,061 | ||
| Write-down of vessels | — | 51,662 | ||
| Unrealized foreign currency exchange loss (gain) | 4,727 | (11,703 | ) | |
| Equity income, net of dividends received of $7,008 (2018 – $11,583) | 9,958 | (26,335 | ) | |
| Other non-cash items | 8,998 | (8,464 | ) | |
| Change in non-cash operating assets and liabilities | (28,827 | ) | 56,299 | |
| Receipts from direct financing leases | 6,050 | — | ||
| Expenditures for dry docking | (6,335 | ) | (4,423 | ) |
| Net operating cash flow | 116,878 | 83,588 | ||
| FINANCING ACTIVITIES | ||||
| Proceeds from issuance of long-term debt | 126,263 | 248,392 | ||
| Scheduled repayments of long-term debt | (66,310 | ) | (105,099 | ) |
| Prepayments of long-term debt | (168,787 | ) | (205,765 | ) |
| Financing issuance costs | (989 | ) | (4,971 | ) |
| Proceeds from financing related to sales and leaseback of vessels | 158,680 | 243,812 | ||
| Scheduled repayments of obligations related to finance leases | (33,855 | ) | (25,316 | ) |
| Repurchase of common units | (12,056 | ) | — | |
| Cash distributions paid | (39,315 | ) | (34,727 | ) |
| Dividends paid to non-controlling interest | (55 | ) | (157 | ) |
| Net financing cash flow | (36,424 | ) | 116,169 | |
| INVESTING ACTIVITIES | ||||
| Expenditures for vessels and equipment | (82,575 | ) | (311,308 | ) |
| Capital contributions and advances to equity-accounted joint ventures | (15,555 | ) | (27,071 | ) |
| Proceeds from sale of equity-accounted joint venture | — | 54,438 | ||
| Receipts from direct financing leases | — | 5,242 | ||
| Net investing cash flow | (98,130 | ) | (278,699 | ) |
| Decrease in cash, cash equivalents and restricted cash | (17,676 | ) | (78,942 | ) |
| Cash, cash equivalents and restricted cash, beginning of the period | 222,864 | 339,435 | ||
| Cash, cash equivalents and restricted cash, end of the period | 205,188 | 260,493 | ||
Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)
| Three Months Ended | |||||
| June 30, | |||||
| 2019 | 2018 | ||||
| (unaudited) | (unaudited) | ||||
| Net income – GAAP basis | 19,052 | 6,682 | |||
| Less: Net income attributable to non-controlling interests | (2,617 | ) | (3,948 | ) | |
| Net income attributable to the partners and preferred unitholders | 16,435 | 2,734 | |||
| Add (subtract) specific items affecting net income: | |||||
| Write-down of vessels(1) | — | 33,000 | |||
| Restructuring charges(2) | 818 | — | |||
| Unrealized foreign currency exchange losses (gains)(3) | 6,068 | (11,091 | ) | ||
| Unrealized losses (gains) on non-designated and designated derivative instruments and other items from equity-accounted investees(4) | 6,226 | (4,914 | ) | ||
| Unrealized losses (gains) on non-designated derivative instruments(5) | 5,434 | (8,462 | ) | ||
| Other items | — | 1,054 | |||
| Non-controlling interests’ share of items above(6) | (546 | ) | 1,214 | ||
| Total adjustments | 18,000 | 10,801 | |||
| Adjusted net income attributable to the partners and preferred unitholders | 34,435 | 13,535 | |||
| Preferred unitholders' interest in adjusted net income | 6,425 | 6,426 | |||
| General partner's interest in adjusted net income | 560 | 142 | |||
| Limited partners’ interest in adjusted net income | 27,450 | 6,967 | |||
| Limited partners’ interest in adjusted net income per common unit, basic | 0.35 | 0.09 | |||
| Weighted-average number of common units outstanding, basic | 78,603,636 | 79,687,499 | |||
- See Note 2 to the Consolidated Statements of Income (Loss) included in this release for further details.
- See Note 3 to the Consolidated Statements of Income (Loss) included in this release for further details.
- Unrealized foreign currency exchange losses (gains) primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized losses (gains) on the cross currency swaps economically hedging the Partnership’s NOK bonds. This amount excludes the realized losses relating to the cross currency swaps for the NOK bonds. See Note 6 to the Consolidated Statements of Income (Loss) included in this release for further details.
- Reflects the unrealized losses (gains) due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes. In addition, for the three months ended June 30, 2018, it includes any ineffectiveness for derivative instruments designated as hedges for accounting purposes. See Note 4 to the Consolidated Statements of Income (Loss) included in this release for further details.
- Reflects the unrealized losses (gains) due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes. See Note 5 to the Consolidated Statements of Income (Loss) included in this release for further details.
- Items affecting net income include items from the Partnership’s consolidated non-wholly-owned subsidiaries. The specific items affecting net income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “non-controlling interests’ share of items above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of the other specific items affecting net income listed in the table.
Teekay LNG Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Distributable Cash Flow (DCF)
(in thousands of U.S. Dollars, except units outstanding and per unit data)
| Three Months Ended | ||||||
| June 30, | ||||||
| 2019 | 2018 | |||||
| (unaudited) | (unaudited) | |||||
| Net income: | 19,052 | 6,682 | ||||
| Add: | ||||||
| Depreciation and amortization | 35,338 | 29,794 | ||||
| Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1) | 16,056 | 14,939 | ||||
| Unrealized foreign currency exchange losses (gains) | 6,068 | (11,091 | ) | |||
| Unrealized losses (gains) on non-designated derivative instruments | 5,434 | (8,462 | ) | |||
| Direct finance lease payments received in excess of revenue recognized and other adjustments | 4,037 | 2,897 | ||||
| Distributions relating to equity financing of newbuildings | 1,099 | 2,289 | ||||
| Write-down of vessels | — | 33,000 | ||||
| Deferred income tax and other non-cash items | 116 | 21 | ||||
| Less: | ||||||
| Equity income | (1,738 | ) | (11,194 | ) | ||
| Distributions relating to preferred units | (6,425 | ) | (6,426 | ) | ||
| Estimated maintenance capital expenditures | (17,397 | ) | (16,345 | ) | ||
| Distributable Cash Flow before non-controlling interest | 61,640 | 36,104 | ||||
| Non-controlling interests’ share of DCF before estimated maintenance capital expenditures | (5,310 | ) | (4,988 | ) | ||
| Distributable Cash Flow | 56,330 | 31,116 | ||||
| Amount of cash distributions attributable to the General Partner | (304 | ) | (228 | ) | ||
| Limited partners' Distributable Cash Flow | 56,026 | 30,888 | ||||
| Weighted-average number of common units outstanding, basic | 78,603,636 | 79,687,499 | ||||
| Distributable Cash Flow per limited partner common unit | 0.71 | 0.39 | ||||
- The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $10.8 million and $8.3 million for the three months ended June 30, 2019 and 2018, respectively.
Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted EBITDA
(in thousands of U.S. Dollars)
| Three Months Ended | ||||
| June 30, | ||||
| 2019 | 2018 | |||
| (unaudited) | (unaudited) | |||
| Net income | 19,052 | 6,682 | ||
| Depreciation and amortization | 35,338 | 29,794 | ||
| Interest expense, net of interest income | 40,058 | 27,269 | ||
| Income tax expense | 2,472 | 843 | ||
| EBITDA | 96,920 | 64,588 | ||
| Add (subtract) specific income statement items affecting EBITDA: | ||||
| Foreign currency exchange loss (gain) | 7,243 | (8,443 | ) | |
| Other income – net | (236 | ) | (350 | ) |
| Equity income | (1,738 | ) | (11,194 | ) |
| Realized and unrealized loss (gain) on derivative instruments | 7,826 | (4,302 | ) | |
| Write-down of vessels | — | 33,000 | ||
| Direct finance lease payments received in excess of revenue recognized and other adjustments | 4,037 | 2,897 | ||
| Amortization of in-process contracts included in voyage revenues | — | (1,755 | ) | |
| Realized gain on Toledo Spirit derivative contract | — | 150 | ||
| Consolidated adjusted EBITDA | 114,052 | 74,591 | ||
| Adjusted EBITDA from equity-accounted vessels (See Appendix E) | 48,017 | 40,414 | ||
| Total Adjusted EBITDA | 162,069 | 115,005 | ||
Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment
(in thousands of U.S. Dollars)
| Three Months Ended June 30, 2019 | ||||||||
| (unaudited) | ||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||
| Voyage revenues | 141,833 | 8,858 | 2,369 | 153,060 | ||||
| Voyage (expenses) recoveries | (3,484 | ) | (2,542 | ) | 3 | (6,023 | ) | |
| Vessel operating expenses | (23,146 | ) | (3,630 | ) | (681 | ) | (27,457 | ) |
| Time-charter hire expense | (3,080 | ) | — | — | (3,080 | ) | ||
| Depreciation and amortization | (33,139 | ) | (2,030 | ) | (169 | ) | (35,338 | ) |
| General and administrative expenses | (5,051 | ) | (345 | ) | (271 | ) | (5,667 | ) |
| Restructuring charges | — | — | (818 | ) | (818 | ) | ||
| Income from vessel operations | 73,933 | 311 | 433 | 74,677 | ||||
| Depreciation and amortization | 33,139 | 2,030 | 169 | 35,338 | ||||
| Direct finance lease payments received in excess of revenue recognized and other adjustments | 4,037 | — | — | 4,037 | ||||
| Consolidated Adjusted EBITDA | 111,109 | 2,341 | 602 | 114,052 | ||||
| Three Months Ended June 30, 2018 | ||||||||
| (unaudited) | ||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||
| Voyage revenues | 105,405 | 6,767 | 10,143 | 122,315 | ||||
| Voyage expenses | (496 | ) | (3,949 | ) | (3,506 | ) | (7,951 | ) |
| Vessel operating expenses | (22,021 | ) | (7,651 | ) | (3,547 | ) | (33,219 | ) |
| Depreciation and amortization | (26,418 | ) | (2,243 | ) | (1,133 | ) | (29,794 | ) |
| General and administrative expenses | (5,839 | ) | (1,110 | ) | (897 | ) | (7,846 | ) |
| Write-down of vessels | — | (33,000 | ) | — | (33,000 | ) | ||
| Income (loss) from vessel operations | 50,631 | (41,186 | ) | 1,060 | 10,505 | |||
| Depreciation and amortization | 26,418 | 2,243 | 1,133 | 29,794 | ||||
| Write-down of vessels | — | 33,000 | — | 33,000 | ||||
| Amortization of in-process contracts included in voyage revenues | (1,647 | ) | — | (108 | ) | (1,755 | ) | |
| Direct finance lease payments received in excess of revenue recognized and other adjustments | 2,897 | — | — | 2,897 | ||||
| Realized gain on Toledo Spirit derivative contract | — | — | 150 | 150 | ||||
| Consolidated Adjusted EBITDA | 78,299 | (5,943 | ) | 2,235 | 74,591 | |||
Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA from Equity-Accounted Vessels
(in thousands of U.S. Dollars)
| Three Months Ended | ||||||||||
| June 30, 2019 | June 30, 2018 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| At | Partnership's | At | Partnership's | |||||||
| 100% | Portion(1) | 100% | Portion(1) | |||||||
| Voyage revenues | 172,632 | 73,391 | 137,291 | 59,845 | ||||||
| Voyage expenses | (4,502 | ) | (2,196 | ) | (2,469 | ) | (1,254 | ) | ||
| Vessel operating expenses, time-charter hire expenses and general and administrative expenses | (63,879 | ) | (27,992 | ) | (48,496 | ) | (21,738 | ) | ||
| Depreciation and amortization | (28,551 | ) | (13,741 | ) | (25,368 | ) | (12,652 | ) | ||
| Income from vessel operations of equity-accounted vessels | 75,700 | 29,462 | 60,958 | 24,201 | ||||||
| Net interest expense | (52,929 | ) | (21,254 | ) | (38,170 | ) | (16,276 | ) | ||
| Income tax expense | (670 | ) | (246 | ) | (46 | ) | (24 | ) | ||
| Other items including realized and unrealized (loss) gain on derivative instruments | (18,764 | ) | (6,224 | ) | 8,495 | 3,293 | ||||
| Net income / equity income of equity-accounted vessels | 3,337 | 1,738 | 31,237 | 11,194 | ||||||
| Net income / equity income of equity-accounted LNG vessels | 6,455 | 3,377 | 33,931 | 12,619 | ||||||
| Net loss / equity loss of equity-accounted LPG vessels | (3,118 | ) | (1,639 | ) | (2,694 | ) | (1,425 | ) | ||
| Net income / equity income of equity-accounted vessels | 3,337 | 1,738 | 31,237 | 11,194 | ||||||
| Depreciation and amortization | 28,551 | 13,741 | 25,368 | 12,652 | ||||||
| Net interest expense | 52,929 | 21,254 | 38,170 | 16,276 | ||||||
| Income tax expense | 670 | 246 | 46 | 24 | ||||||
| EBITDA from equity-accounted vessels | 85,487 | 36,979 | 94,821 | 40,146 | ||||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||||
| Other items including realized and unrealized loss (gain) on derivative instruments | 18,764 | 6,224 | (8,495 | ) | (3,293 | ) | ||||
| Direct finance lease payments received in excess of revenue recognized | 16,131 | 5,759 | 12,574 | 4,523 | ||||||
| Amortization of in-process contracts | (1,736 | ) | (945 | ) | (1,822 | ) | (962 | ) | ||
| Adjusted EBITDA from equity-accounted vessels | 118,646 | 48,017 | 97,078 | 40,414 | ||||||
| Adjusted EBITDA from equity-accounted LNG vessels | 102,799 | 40,095 | 84,607 | 34,179 | ||||||
| Adjusted EBITDA from equity-accounted LPG vessels | 15,847 | 7,922 | 12,471 | 6,235 | ||||||
- The Partnership's equity-accounted vessels for the three months ended June 30, 2019 and 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 49 percent ownership interest in the Partnership’s joint venture with Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the Teekay LNG-Marubeni Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 LPG carriers as at June 30, 2019, compared to 22 owned and in-chartered LPG carriers, including one LPG carrier newbuilding, as at June 30, 2018; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at June 30, 2019 for Shell, compared to two LNG carriers and two LNG carrier newbuildings as at June 30, 2018; the Partnership’s 50 percent ownership interest in three ARC7 LNG carriers and three ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at June 30, 2019, compared to one ARC7 LNG carrier and five ARC7 LNG carrier newbuildings as at June 30, 2018; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal under construction in Bahrain.
Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)
| As at June 30, 2019 | As at December 31, 2018 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| At | Partnership's | At | Partnership's | |||||||
| 100% | Portion(1) | 100% | Portion(1) | |||||||
| Cash and restricted cash, current and non-current | 408,564 | 165,669 | 388,820 | 164,247 | ||||||
| Current portion of derivative assets | 860 | 430 | 4,840 | 2,225 | ||||||
| Other current assets | 67,171 | 30,491 | 86,424 | 31,129 | ||||||
| Vessels and equipment, including vessels related to finance leases and operating lease right-of-use assets | 2,331,799 | 1,145,557 | 2,327,971 | 1,141,364 | ||||||
| Advances on newbuilding contracts | 1,194,337 | 449,792 | 1,321,284 | 494,486 | ||||||
| Net investments in sales-type and direct financing leases, current and non-current | 3,625,687 | 1,365,655 | 3,089,375 | 1,163,980 | ||||||
| Derivative assets | 327 | 164 | 10,660 | 3,977 | ||||||
| Other non-current assets | 49,019 | 39,427 | 50,625 | 37,690 | ||||||
| Total assets | 7,677,764 | 3,197,185 | 7,279,999 | 3,039,098 | ||||||
| Current portion of long-term debt and obligations related to finance leases and operating leases | 274,034 | 120,346 | 284,150 | 125,984 | ||||||
| Current portion of derivative liabilities | 26,085 | 10,081 | 12,695 | 4,420 | ||||||
| Other current liabilities | 144,767 | 63,972 | 127,266 | 53,874 | ||||||
| Long-term debt and obligations related to finance leases and operating leases | 4,592,339 | 1,828,466 | 4,202,745 | 1,680,986 | ||||||
| Shareholders' loans, current and non-current | 367,884 | 131,374 | 367,475 | 131,386 | ||||||
| Derivative liabilities | 166,103 | 66,893 | 61,814 | 23,149 | ||||||
| Other long-term liabilities | 66,375 | 33,439 | 67,793 | 34,552 | ||||||
| Equity | 2,040,177 | 942,614 | 2,156,061 | 984,747 | ||||||
| Total liabilities and equity | 7,677,764 | 3,197,185 | 7,279,999 | 3,039,098 | ||||||
| Investments in equity-accounted joint ventures | 942,614 | 984,747 | ||||||||
| Advances to equity-accounted joint ventures | 131,374 | 131,386 | ||||||||
| Investments in and advances to equity-accounted joint ventures, current and non-current portions | 1,073,988 | 1,116,133 | ||||||||
- The Partnership's equity-accounted vessels as at June 30, 2019 and December 31, 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 49 percent ownership interests in the Excalibur Joint Venture, which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the Teekay LNG-Marubeni Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 LPG carriers; the Partnership’s ownership interest ranging from 20 percent to 30 percent in four LNG carriers as at June 30, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at December 31, 2018; the Partnership’s 50 percent ownership interest in three ARC7 LNG carriers and three ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at June 30, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at December 31, 2018; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal under construction in Bahrain.
Forward-Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements, among other things, regarding: the timing of newbuilding vessel deliveries and completion of the Bahrain regasification facility; the effects of future newbuilding deliveries and the completion of the Bahrain facility on the Partnership's Total Adjusted EBITDA, earnings and financial leverage; expectations regarding the Partnership's 2019 financial results; anticipated higher utilization and revenues, and fewer drydocks; the possibility of higher charter rates for mid-size LPG vessels; expected delevering and opportunistic common unit repurchases; the strength of the LNG and LPG carrier market; the Partnership’s capital allocation plan and its ability to create equity value; and Teekay LNG’s ability to benefit from future LNG and LPG market fundamentals. 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; deliveries of vessels under charter contracts and the commencement thereof; changes in production of LNG or LPG, either generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification projects significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing vessels in the Partnership's fleet; higher than expected costs and expenses; general market conditions and trends, including spot, multi-month and multi-year charter rates; inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels; the Partnership’s or the Partnership’s joint ventures’ ability to secure or draw on financings for its vessels; potential lack of cash flow to reduce balance sheet leverage or of excess capital available to allocate; 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, 2018. 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.