Highlights
- GAAP net loss attributable to the partners and preferred unitholders of $33.0 million and GAAP net loss per common unit of $0.50 in the first quarter of 2020.
- Adjusted net income(1) attributable to the partners and preferred unitholders of $52.2 million and adjusted net income per common unit of $0.58 in the first quarter of 2020 (excluding a $45 million non-cash vessel write-down and other items listed in Appendix A to this release).
- Total adjusted EBITDA(1) of $188.4 million in the first quarter of 2020, representing another quarterly record-high and up nearly 20 percent from the same quarter of the prior year.
- With recent charter of the 52 percent-owned Marib Spirit, the Partnership's LNG fleet is now 100 percent chartered on fixed-rate contracts for the remainder of 2020; and 94 percent charter coverage for 2021.
- Fixed-rate charters performing as expected; reaffirming 2020 adjusted net income guidance.
- Continuing to execute on capital allocation plan of balance sheet delevering while concurrently increasing returns to investors, including a 32 percent increase in quarterly cash distributions paid in May 2020 to common unitholders.
- Eliminated all of the incentive distribution rights held by the Partnership's general partner in exchange for 10.75 million newly-issued common units in May 2020.
HAMILTON, Bermuda, May 21, 2020 (GLOBE NEWSWIRE) -- Teekay GP L.L.C., the general partner (the General Partner) of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership’s results for the quarter ended March 31, 2020.
Consolidated Financial Summary
| Three Months Ended | |||||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||
| (in thousands of U.S. Dollars, except per unit data) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| GAAP FINANCIAL COMPARISON | |||||||||||||
| Voyage revenues | 139,887 | 148,797 | 149,744 | ||||||||||
| Income from vessel operations | 21,738 | 83,604 | 69,361 | ||||||||||
| Equity income | 373 | 30,207 | 5,578 | ||||||||||
| Net (loss) income attributable to the partners and preferred unitholders | (32,994 | ) | 67,370 | 21,617 | |||||||||
| Limited partners’ interest in net (loss) income per common unit | (0.50 | ) | 0.77 | 0.19 | |||||||||
| NON-GAAP FINANCIAL COMPARISON | |||||||||||||
| Total adjusted revenues(1) | 244,268 | 246,577 | 216,999 | ||||||||||
| Total adjusted EBITDA(1) | 188,388 | 184,168 | 158,214 | ||||||||||
| Distributable cash flow (DCF)(1) | 74,877 | 71,350 | 54,214 | ||||||||||
| Adjusted net income attributable to the partners and preferred unitholders(1) | 52,236 | 50,342 | 33,365 | ||||||||||
| Limited partners’ interest in adjusted net income per common unit | 0.58 | 0.56 | 0.34 | ||||||||||
(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).
First Quarter of 2020 Compared to First Quarter of 2019
GAAP net (loss) income and non-GAAP adjusted net income attributable to the partners and preferred unitholders were positively impacted for the three months ended March 31, 2020, compared to the same quarter of the prior year, by: earnings from the six liquefied natural gas (LNG) carrier newbuildings which delivered into the Partnership’s consolidated fleet and equity-accounted joint ventures between January and December 2019; commencement of terminal use payments in January 2020 to the Partnership's 30 percent-owned joint venture with National Oil & Gas Authority, Gulf Investment Corporation and Samsung C&T (the Bahrain LNG Joint Venture); higher earnings from the Partnership’s 52 percent-owned joint venture with Marubeni Corporation (the MALT Joint Venture) as a result of the charter contracts that were secured at higher rates for the Arwa Spirit and Marib Spirit in June and July 2019, respectively; and higher earnings from the Partnership’s 50 percent-owned joint venture with Exmar NV (the Exmar LPG Joint Venture) as a result of securing higher LPG charter rates. These increases were partially offset by: a reduction in earnings upon the sales of the WilForce and WilPride LNG carriers in January 2020, the Toledo Spirit in January 2019 and the Alexander Spirit in October 2019; and lower earnings from the Magellan Spirit upon its redeployment in May 2019, which is currently chartered-in from the MALT Joint Venture.
In addition, GAAP net (loss) income attributable to the partners and preferred unitholders was negatively impacted for the three months ended March 31, 2020, compared to the same quarter of the prior year, by write-downs of $45 million recorded on six multi-gas carriers in the first quarter of 2020; unrealized credit loss provisions upon the adoption of the new accounting standard ASC 326 on January 1, 2020; and higher unrealized losses on non-designated derivative instruments.
CEO Commentary
“Teekay LNG continues to record strong operating results with the completion of our growth program and our assets operating as expected, earning reliable cash flows for the Partnership,” commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. “While the unprecedented recent global events are clearly a major area of focus for us, our long-term contract cover has ensured that they have had a minimal impact on Teekay LNG’s operations and cash flows so far in 2020, and we expect this to continue. We are very proud of how our dedicated seafarers and on-shore colleagues have responded to COVID-19, implementing new standards which focus on the health and well-being of everyone involved in our organization, especially our colleagues at sea, while maintaining consistently safe and efficient vessel operation for our customers."
Mr. Kremin continued, “I’m pleased that we took proactive steps this quarter to strengthen our commercial position with three new fixed-term LNG charters and to increase our financial flexibility with the refinancing of our unsecured revolver at the same size and pricing despite the volatility in our markets. Our LNG fleet is now 100 percent fixed on ‘take-or-pay’ charters with high-quality customers and with over $370 million in total liquidity as of March 31, 2020, we believe we are well-positioned to meet our upcoming debt maturities without the need to access the public capital markets until later next year, while maintaining a strong financial foundation. Given the long-term stability of our business model, we are today reaffirming our fiscal 2020 financial guidance which projects an increase in adjusted net income of approximately 48 percent(1) over 2019.”
(1) This is a non-GAAP financial measure. Please see Teekay LNG’s Q1-20 earnings release for definitions and reconciliations to the comparable GAAP measures. Assumes mid-point of guidance range of $230-$270 million of adjusted net income for 2020.
Summary of Recent Events
In May 2020, Teekay Corporation and the Partnership eliminated all of the Partnership's incentive distribution rights held by the General Partner in exchange for 10.75 million newly-issued common units. Following the completion of this transaction on May 11, 2020, Teekay Corporation now beneficially owns approximately 36 million of the Partnership's common units and remains the sole owner of the General Partner, which together represents an economic interest of approximately 42 percent in the Partnership.
In May 2020, the MALT Joint Venture chartered the Marib Spirit to an international trading company for a period of six months, which is expected to commence in mid-June 2020.
In April 2020, the MALT Joint Venture secured new charters for the Arwa Spirit and the Methane Spirit for periods of 12 and eight months, respectively. The new charters are expected to commence upon completion and in direct continuation of their existing charters in May and July 2020, respectively.
In March 2020, the Partnership successfully refinanced its existing $225 million unsecured revolving credit facility, which was scheduled to mature in November 2020, with a new two-year facility of the same amount and pricing consistent with the previous facility of LIBOR + 140 bps.
In December 2018, the board of directors of Teekay LNG's general partner approved a $100 million common unit repurchase program. Since that time, the Partnership has repurchased a total of 3.63 million common units, or approximately 4.6 percent of the outstanding common units immediately prior to commencement of the program, for a total cost of $44.2 million, representing an average repurchase price of $12.16 per unit.
Operating Results
The following table highlights certain financial information for Teekay LNG’s segments: the Liquefied Natural Gas Segment, the Liquefied Petroleum Gas Segment and until the sale of our last conventional tanker in October 2019, 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 | ||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
| (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 | 132,570 | 7,317 | — | 139,887 | 137,822 | 9,160 | 2,762 | 149,744 | ||||||||||||||||||||||||||||||||||||
| Income (loss) from vessel operations | 67,182 | (45,444 | ) | — | 21,738 | 72,789 | (2,346 | ) | (1,082 | ) | 69,361 | |||||||||||||||||||||||||||||||||
| Equity income (loss) | 182 | 191 | — | 373 | 7,493 | (1,915 | ) | — | 5,578 | |||||||||||||||||||||||||||||||||||
| NON-GAAP FINANCIAL COMPARISON | ||||||||||||||||||||||||||||||||||||||||||||
| Consolidated adjusted EBITDA(i) | 101,543 | 1,603 | — | 103,146 | 107,693 | (425 | ) | (563 | ) | 106,705 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA from equity-accounted vessels(i) | 75,970 | 9,272 | — | 85,242 | 43,986 | 7,523 | — | 51,509 | ||||||||||||||||||||||||||||||||||||
| Total adjusted EBITDA(i) | 177,513 | 10,875 | — | 188,388 | 151,679 | 7,098 | (563 | ) | 158,214 | |||||||||||||||||||||||||||||||||||
(i) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.
Liquefied Natural Gas Segment
Income from vessel operations and consolidated adjusted EBITDA(1) for the liquefied natural gas segment for the three months ended March 31, 2020, compared to the same quarter of the prior year, were negatively impacted primarily by: a reduction in earnings upon the sales of the WilForce and WilPride LNG carriers in January 2020; and lower earnings from the Magellan Spirit upon its redeployment in May 2019 at a lower charter rate. These decreases were partially offset by the delivery of the Yamal Spirit in January 2019.
Equity income and adjusted EBITDA from equity-accounted vessels(1) for the liquefied natural gas segment for the three months ended March 31, 2020, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of four ARC7 LNG carrier newbuildings between June and December 2019 to the Partnership’s 50 percent-owned joint venture with China LNG Shipping (Holdings) Limited (Yamal LNG Joint Venture); commencement of terminal use payments in January 2020 to the Partnership's 30 percent-owned Bahrain LNG Joint Venture; and higher earnings from the Partnership’s 52 percent-owned MALT Joint Venture as a result of the one-year charter contracts that were secured at higher rates for the Arwa Spirit and Marib Spirit in June and July 2019, respectively. In addition, GAAP equity income was negatively impacted by higher unrealized losses on non-designated derivative instruments in the first quarter of 2020 compared to the first quarter of 2019, and unrealized credit loss provisions recorded in the Partnership's equity-accounted joint ventures upon adoption of the new accounting standard (ASC 326) on January 1, 2020.
Liquefied Petroleum Gas Segment
Loss from vessel operations for the liquefied petroleum gas segment for the three months ended March 31, 2020, compared to the same quarter of the prior year, was negatively impacted by the write-downs of six multi-gas carriers primarily due to the lower near-term outlook for these types of vessels as a result of the current economic environment as well as receiving notification that the Partnership's commercial management arrangement with a third-party commercial manager will dissolve in September 2020. This decrease was partially offset by the improved results from the Partnership's seven multi-gas carriers as a result of fewer off-hire days for scheduled dry dockings and repairs during the first quarter of 2020.
Equity income (loss) and adjusted EBITDA from equity-accounted vessels(1) for the liquefied petroleum gas segment for the three months ended March 31, 2020, compared to the same quarter of the prior year, were positively impacted by higher LPG charter rates earned and fewer off-hire days in the Partnership’s 50 percent-owned Exmar LPG Joint Venture.
Conventional Tanker Segment
There were no results from vessel operations for the conventional tanker segment for the three months ended March 31, 2020, as the last of the Partnership's conventional tankers, the Toledo Spirit and Alexander Spirit, were sold in January and October of 2019, respectively.
(1) These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.
Teekay LNG's Fleet
The following table summarizes the Partnership’s fleet as of May 1, 2020. The Partnership also owns a 30 percent interest in a regasification terminal in Bahrain.
| Number of Vessels | |
| Owned and In-Chartered Vessels(i) | |
| LNG Carrier Fleet | 47(ii) |
| LPG/Multi-gas Carrier Fleet | 30(iii) |
| Total | 77 |
- 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 interests in these vessels range from 50 percent to 100 percent.
Liquidity
As of March 31, 2020, the Partnership had total liquidity of $372.7 million (comprised of $312.7 million in cash and cash equivalents and $60.0 million in undrawn credit facilities), up from $326.4 million of total liquidity as of December 31, 2019.
Conference Call
The Partnership plans to host a conference call on Thursday, May 21, 2020 at 1:00 p.m. (ET) to discuss the results for the first quarter of 2020. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
- By dialing 1 (800) 458-4148 or 1 (647) 484-0477, if outside North America, and quoting conference ID code 8587512.
- 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 First Quarter of 2020 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 and LPG services primarily under long-term, fee-based charter contracts through its interests in 47 LNG carriers, 23 mid-size LPG carriers, and seven multi-gas carriers. The Partnership's ownership interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in an LNG regasification terminal. Teekay LNG Partners is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.
Teekay LNG Partners’ common units and preferred units trade on the New York Stock Exchange under the symbols “TGP”, “TGP PR A” and “TGP PR B”, respectively.
For Investor Relations
enquiries contact:
Ryan Hamilton
Tel: +1 (604) 609-2963
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, Total Adjusted Revenues and Adjusted EBITDA, are intended to provide additional information and should not be considered substitutes for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and may not be comparable to similar measures presented by other companies. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.
Non-GAAP Financial Measures
Total Adjusted Revenues represents the Partnership's voyage revenues from its consolidated vessels, as shown in the Partnership's Consolidated Statements of (Loss) Income, and its proportionate ownership percentage of the voyage revenues from its equity-accounted joint ventures, as shown in Appendix E of this release, less the Partnership's proportionate share of voyage revenues earned directly from its equity-accounted joint ventures. Please refer to Appendix C and E of this release for a reconciliation of this non-GAAP financial measure to voyage revenues and equity income, the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements. The Partnership's equity-accounted joint ventures are generally required to distribute all available cash to their owners. However, the timing and amount of dividends from each of the Partnership's equity-accounted joint ventures may not necessarily coincide with the operating cash flow generated from each respective equity-accounted joint venture. The timing and amount of dividends distributed by the Partnership's equity-accounted joint ventures are affected by the timing and amounts of debt repayments in the joint ventures, capital requirements of the joint ventures, as well as any cash reserves maintained in the joint ventures for operations, capital expenditures and/or as required under financing agreements.
Adjusted EBITDA represents net (loss) income before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel write-downs, unrealized credit loss adjustments, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, adjustments for direct financing and sales-type leases to a cash basis, and certain other income or expenses. Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA represents Adjusted EBITDA from vessels that are consolidated on the Partnership's financial statements. Adjusted EBITDA from Equity-Accounted Vessels represents the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted vessels. The Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the entity in which the Partnership holds the equity-accounted investments or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of any such distributions to the Partnership and other owners. Adjusted EBITDA is a non-GAAP financial measure used by certain investors and management to measure the operational performance of companies. Please refer to Appendices C and E of this release for reconciliations of Adjusted EBITDA to net (loss) income and equity income, respectively, which are the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements.
Adjusted Net (Loss) Income Attributable to the Partners and Preferred Unitholders excludes items of income or loss from GAAP net (loss) 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 (loss) income, and refer to footnote (3) of the Consolidated Statements of (Loss) Income for a reconciliation of adjusted equity income to equity income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.
Distributable Cash Flow (DCF) represents GAAP net (loss) 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, unrealized credit loss adjustments, distributions relating to equity financing of newbuilding installments, distributions relating to preferred units, adjustments for direct financing and sales-type 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 (loss) income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements.
Teekay LNG Partners L.P.
Consolidated Statements of (Loss) Income
(in thousands of U.S. Dollars, except unit and per unit data)
| Three Months Ended | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2020 | 2019 | 2019 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Voyage revenues | 139,887 | 148,797 | 149,744 | ||||||||||
| Voyage expenses | (2,317 | ) | (4,628 | ) | (5,775 | ) | |||||||
| Vessel operating expenses | (26,104 | ) | (30,706 | ) | (26,101 | ) | |||||||
| Time-charter hire expense | (5,922 | ) | (5,987 | ) | (5,591 | ) | |||||||
| Depreciation and amortization | (32,639 | ) | (33,053 | ) | (34,126 | ) | |||||||
| General and administrative expenses | (6,167 | ) | (4,829 | ) | (6,632 | ) | |||||||
| Write-down and gain on sales of vessels(1) | (45,000 | ) | 14,349 | — | |||||||||
| Restructuring charges(2) | — | (339 | ) | (2,158 | ) | ||||||||
| Income from vessel operations | 21,738 | 83,604 | 69,361 | ||||||||||
| Equity income(3) | 373 | 30,207 | 5,578 | ||||||||||
| Interest expense | (36,704 | ) | (40,712 | ) | (42,217 | ) | |||||||
| Interest income | 2,370 | 922 | 1,078 | ||||||||||
| Realized and unrealized (loss) gain on non-designated derivative instruments(4) | (20,471 | ) | 4,352 | (6,617 | ) | ||||||||
| Foreign currency exchange gain (loss)(5) | 4,739 | (4,545 | ) | (731 | ) | ||||||||
| Other (expense) income | (361 | ) | (1,767 | ) | 251 | ||||||||
| Net (loss) income before income tax expense | (28,316 | ) | 72,061 | 26,703 | |||||||||
| Income tax expense | (2,512 | ) | (985 | ) | (2,578 | ) | |||||||
| Net (loss) income | (30,828 | ) | 71,076 | 24,125 | |||||||||
| Non-controlling interest in net income | 2,166 | 3,706 | 2,508 | ||||||||||
| Preferred unitholders' interest in net income | 6,425 | 6,426 | 6,425 | ||||||||||
| General partner's interest in net (loss) income | (789 | ) | 1,218 | 304 | |||||||||
| Limited partners’ interest in net (loss) income | (38,630 | ) | 59,726 | 14,888 | |||||||||
| Limited partners' interest in net (loss) income per common unit: | |||||||||||||
| • Basic | (0.50 | ) | 0.77 | 0.19 | |||||||||
| • Diluted | (0.50 | ) | 0.77 | 0.19 | |||||||||
| Weighted-average number of common units outstanding: | |||||||||||||
| • Basic | 77,071,647 | 77,509,379 | 78,598,678 | ||||||||||
| • Diluted | 77,071,647 | 77,615,829 | 78,680,661 | ||||||||||
| Total number of common units outstanding at end of period | 76,171,639 | 77,509,339 | 78,626,403 | ||||||||||
(1) For the three months ended March 31, 2020, the Partnership wrote-down six wholly-owned multi-gas carriers (the Pan Spirit, Unikum Spirit, Vision Spirit, Camilla Spirit, Sonoma Spirit and Cathinka Spirit) to their estimated fair values. The total impairment charge of $45.0 million related to these six multi-gas carriers is included in write-down and gain on sales of vessels for the three months ended March 31, 2020. In December 2019, the Partnership recognized a gain of $14.3 million for the three months ended December 31, 2019 on derecognition of two LNG carriers on charter to Awilco LNG ASA (or Awilco) as they were reclassified as sales-type leases upon Awilco obtaining credit approval for a financing facility that provided the funds necessary for Awilco to fulfill its vessel repurchase obligations to the Partnership in January 2020.
(2) For the three months ended December 31, 2019, the Partnership incurred restructuring charges of $0.3 million from subsidiaries of Teekay Corporation attributable to employees that previously supported the Partnership. In January 2019, the Toledo Spirit was sold and as a result of the sale, the Partnership recorded a restructuring charge of $2.2 million for the three months ended March 31, 2019, relating to seafarer severance costs.
(3) 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 | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2020 | 2019 | 2019 | |||||||||||
| Equity income | 373 | 30,207 | 5,578 | ||||||||||
| Proportionate share of unrealized loss (gain) on non-designated interest rate swaps | 22,204 | (6,271 | ) | 4,360 | |||||||||
| Proportionate share of unrealized credit loss provision(a) | 8,980 | — | — | ||||||||||
| Proportionate share of other items | (539 | ) | 1,436 | 345 | |||||||||
| Equity income adjusted for items in Appendix A | 31,018 | 25,372 | 10,283 | ||||||||||
(a) Adoption of new accounting standard ASC 326 on January 1, 2020.
(4) The realized losses on non-designated derivative instruments relate to the amounts the Partnership actually paid or received to settle non-designated derivative instruments and the unrealized (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 | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2020 | 2019 | 2019 | |||||||||||
| Realized losses relating to: | |||||||||||||
| Interest rate swap agreements | (2,911 | ) | (2,683 | ) | (2,385 | ) | |||||||
| Foreign currency forward contracts | (241 | ) | (147 | ) | — | ||||||||
| (3,152 | ) | (2,830 | ) | (2,385 | ) | ||||||||
| Unrealized (losses) gains relating to: | |||||||||||||
| Interest rate swap agreements | (17,521 | ) | 6,849 | (4,192 | ) | ||||||||
| Foreign currency forward contracts | 202 | 333 | — | ||||||||||
| Toledo Spirit time-charter derivative contract | — | — | (40 | ) | |||||||||
| (17,319 | ) | 7,182 | (4,232 | ) | |||||||||
| Total realized and unrealized (losses) gains on non-designated derivative instruments | (20,471 | ) | 4,352 | (6,617 | ) | ||||||||
(5) 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 (Loss) Income.
Foreign currency exchange gain (loss) includes realized losses relating to the amounts the Partnership paid to settle the Partnership’s non-designated cross currency swaps that were entered into as economic hedges in relation to the Partnership’s Norwegian Krone (NOK) denominated unsecured bonds. Foreign currency exchange gain (loss) also includes unrealized (losses) gains relating to the change in fair value of such derivative instruments and unrealized gains (losses) on the revaluation of the NOK bonds as detailed in the table below:
| Three Months Ended | |||||||||||||
| March 31, | December 31, | March 31, | |||||||||||
| 2020 | 2019 | 2019 | |||||||||||
| Realized losses on cross-currency swaps | (1,817 | ) | (1,109 | ) | (1,434 | ) | |||||||
| Unrealized (losses) gains on cross currency swaps | (49,540 | ) | 12,579 | (1,920 | ) | ||||||||
| Unrealized gains (losses) on revaluation of NOK bonds | 53,973 | (11,877 | ) | (579 | ) | ||||||||
Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
| As at March 31, | As at December 31, | |||||
| 2020 | 2019 | |||||
| (unaudited) | (unaudited) | |||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 312,710 | 160,221 | ||||
| Restricted cash – current | 37,032 | 53,689 | ||||
| Accounts receivable | 10,592 | 13,460 | ||||
| Prepaid expenses | 7,780 | 6,796 | ||||
| Current portion of derivative assets | — | 355 | ||||
| Current portion of net investments in direct financing and sale-type leases | 13,740 | 273,986 | ||||
| Advances to affiliates | 5,474 | 5,143 | ||||
| Other current assets | 237 | 238 | ||||
| Total current assets | 387,565 | 513,888 | ||||
| Restricted cash – long-term | 76,496 | 39,381 | ||||
| Vessels and equipment | ||||||
| At cost, less accumulated depreciation | 1,272,433 | 1,335,397 | ||||
| Vessels related to finance leases, at cost, less accumulated depreciation | 1,686,634 | 1,691,945 | ||||
| Operating lease right-of-use asset | 30,882 | 34,157 | ||||
| Total vessels and equipment | 2,989,949 | 3,061,499 | ||||
| Investments in and advances to equity-accounted joint ventures | 1,065,389 | 1,155,316 | ||||
| Net investments in direct financing and sales-type leases | 529,943 | 544,823 | ||||
| Other assets | 16,169 | 14,738 | ||||
| Derivative assets | — | 1,834 | ||||
| Intangible assets – net | 41,152 | 43,366 | ||||
| Goodwill | 34,841 | 34,841 | ||||
| Total assets | 5,141,504 | 5,409,686 | ||||
| LIABILITIES AND EQUITY | ||||||
| Current | ||||||
| Accounts payable | 1,633 | 5,094 | ||||
| Accrued liabilities | 76,796 | 76,752 | ||||
| Unearned revenue | 25,832 | 28,759 | ||||
| Current portion of long-term debt | 328,384 | 393,065 | ||||
| Current obligations related to finance leases | 70,455 | 69,982 | ||||
| Current portion of operating lease liabilities | 13,524 | 13,407 | ||||
| Current portion of derivative liabilities | 66,852 | 38,458 | ||||
| Advances from affiliates | 8,372 | 7,003 | ||||
| Total current liabilities | 591,848 | 632,520 | ||||
| Long-term debt | 1,356,766 | 1,438,331 | ||||
| Long-term obligations related to finance leases | 1,323,069 | 1,340,922 | ||||
| Long-term operating lease liabilities | 17,357 | 20,750 | ||||
| Derivative liabilities | 96,453 | 51,006 | ||||
| Other long-term liabilities | 53,460 | 49,182 | ||||
| Total liabilities | 3,438,953 | 3,532,711 | ||||
| Equity | ||||||
| Limited partners – common units | 1,425,960 | 1,543,598 | ||||
| Limited partners – preferred units | 285,159 | 285,159 | ||||
| General partner | 47,839 | 50,241 | ||||
| Accumulated other comprehensive loss | (108,457 | ) | (57,312 | ) | ||
| Partners' equity | 1,650,501 | 1,821,686 | ||||
| Non-controlling interest | 52,050 | 55,289 | ||||
| Total equity | 1,702,551 | 1,876,975 | ||||
| Total liabilities and total equity | 5,141,504 | 5,409,686 | ||||
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| Cash, cash equivalents and restricted cash provided by (used for) | ||||||||
| OPERATING ACTIVITIES | ||||||||
| Net (loss) income | (30,828 | ) | 24,125 | |||||
| Non-cash and non-operating items: | ||||||||
| Unrealized loss on non-designated derivative instruments | 17,319 | 4,232 | ||||||
| Depreciation and amortization | 32,639 | 34,126 | ||||||
| Write-down of vessels | 45,000 | — | ||||||
| Unrealized foreign currency exchange gain | (6,931 | ) | (1,767 | ) | ||||
| Equity income, net of dividends received $6,500 (2019 – $7,008) | 6,127 | 1,430 | ||||||
| Amortization of deferred financing issuance costs included in interest expense | 1,534 | 3,731 | ||||||
| Other non-cash items | 1,487 | 6,223 | ||||||
| Change in non-cash operating assets and liabilities | (495 | ) | (17,596 | ) | ||||
| Receipts from direct financing and sales-type leases | 264,072 | 3,025 | ||||||
| Expenditures for dry docking | (1,191 | ) | (4,279 | ) | ||||
| Net operating cash flow | 328,733 | 53,250 | ||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of long-term debt | 384,149 | 108,551 | ||||||
| Scheduled repayments of long-term debt | (27,785 | ) | (29,476 | ) | ||||
| Prepayments of long-term debt | (445,047 | ) | (140,787 | ) | ||||
| Financing issuance costs | (2,601 | ) | (903 | ) | ||||
| Proceeds from financing related to sales and leaseback of vessels | — | 158,680 | ||||||
| Scheduled repayments of obligations related to finance leases | (17,380 | ) | (17,664 | ) | ||||
| Repurchase of common units | (15,635 | ) | (9,497 | ) | ||||
| Cash distributions paid | (21,438 | ) | (17,646 | ) | ||||
| Acquisition of non-controlling interest in certain of the Partnership's subsidiaries | (2,219 | ) | — | |||||
| Dividends paid to non-controlling interest | — | (20 | ) | |||||
| Net financing cash flow | (147,956 | ) | 51,238 | |||||
| INVESTING ACTIVITIES | ||||||||
| Expenditures for vessels and equipment | (7,830 | ) | (123,884 | ) | ||||
| Capital contributions and advances to equity-accounted joint ventures | — | (2,864 | ) | |||||
| Net investing cash flow | (7,830 | ) | (126,748 | ) | ||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 172,947 | (22,260 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of the period | 253,291 | 222,864 | ||||||
| Cash, cash equivalents and restricted cash, end of the period | 426,238 | 200,604 | ||||||
Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net (loss) income – GAAP basis | (30,828 | ) | 24,125 | |||||
| Less: net income attributable to non-controlling interests | (2,166 | ) | (2,508 | ) | ||||
| Net (loss) income attributable to the partners and preferred unitholders | (32,994 | ) | 21,617 | |||||
| Add (subtract) specific items affecting net income: | ||||||||
| Write-down of vessels(1) | 45,000 | — | ||||||
| Restructuring charges(2) | — | 2,158 | ||||||
| Foreign currency exchange gain(3) | (6,556 | ) | (876 | ) | ||||
| Unrealized losses on non-designated derivative instruments and other items from equity-accounted investees(4) | 30,645 | 4,705 | ||||||
| Unrealized losses on non-designated derivative instruments(5) | 17,319 | 4,232 | ||||||
| Other items | (100 | ) | 1,998 | |||||
| Non-controlling interests’ share of items above(6) | (1,078 | ) | (469 | ) | ||||
| Total adjustments | 85,230 | 11,748 | ||||||
| Adjusted net income attributable to the partners and preferred unitholders | 52,236 | 33,365 | ||||||
| Preferred unitholders' interest in adjusted net income | 6,425 | 6,425 | ||||||
| General partner's interest in adjusted net income | 916 | 539 | ||||||
| Limited partners’ interest in adjusted net income | 44,895 | 26,401 | ||||||
| Limited partners’ interest in adjusted net income per common unit, basic | 0.58 | 0.34 | ||||||
| Weighted-average number of common units outstanding, basic | 77,071,647 | 78,598,678 | ||||||
- See Note 1 to the Consolidated Statements of (Loss) Income included in this release for further details.
- See Note 2 to the Consolidated Statements of (Loss) Income included in this release for further details.
- Foreign currency exchange gains primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized losses on the cross currency swaps economically hedging the Partnership’s NOK bonds. This amount excludes the realized losses relating to the cross currency swaps for the NOK bonds. See Note 5 to the Consolidated Statements of (Loss) Income included in this release for further details.
- Reflects the proportionate share of unrealized credit loss provision and unrealized losses due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes in the Partnership's equity-accounted investees. See Note 3 to the Consolidated Statements of (Loss) Income included in this release for further details.
- Reflects the unrealized losses due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes. See Note 4 to the Consolidated Statements of (Loss) Income included in this release for further details.
- Items affecting net (loss) income include items from the Partnership’s consolidated non-wholly-owned subsidiaries. The specific items affecting net (loss) 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 (loss) 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 | ||||||||||
| March 31, | ||||||||||
| 2020 | 2019 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Net (loss) income | (30,828 | ) | 24,125 | |||||||
| Add: | ||||||||||
| Write-down of vessels | 45,000 | — | ||||||||
| Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1) | 39,542 | 18,748 | ||||||||
| Depreciation and amortization | 32,639 | 34,126 | ||||||||
| Unrealized loss on non-designated derivative instruments | 17,319 | 4,232 | ||||||||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,769 | 3,218 | ||||||||
| Distributions relating to equity financing of newbuildings | — | 1,193 | ||||||||
| Deferred income tax and other non-cash items | 998 | 3,765 | ||||||||
| Subtract: | ||||||||||
| Equity income | (373 | ) | (5,578 | ) | ||||||
| Distributions relating to preferred units | (6,425 | ) | (6,425 | ) | ||||||
| Foreign currency exchange gain | (6,556 | ) | (876 | ) | ||||||
| Estimated maintenance capital expenditures | (14,657 | ) | (17,034 | ) | ||||||
| Distributable Cash Flow before non-controlling interest | 80,428 | 59,494 | ||||||||
| Non-controlling interests’ share of DCF before estimated maintenance capital expenditures | (5,551 | ) | (5,280 | ) | ||||||
| Distributable Cash Flow | 74,877 | 54,214 | ||||||||
| Amount of cash distributions attributable to the General Partner | (389 | ) | (305 | ) | ||||||
| Limited partners' Distributable Cash Flow | 74,488 | 53,909 | ||||||||
| Weighted-average number of common units outstanding, basic | 77,071,647 | 78,598,678 | ||||||||
| Distributable Cash Flow per limited partner common unit | 0.97 | 0.69 | ||||||||
(1) The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $15.2 million and $11.0 million for the three months ended March 31, 2020 and 2019, respectively.
Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted Revenues and Total Adjusted EBITDA
(in thousands of U.S. Dollars)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| Voyage revenues | 139,887 | 149,744 | ||||||
| Partnership's proportionate share of voyage revenues from its equity-accounted joint ventures (See Appendix E) | 110,136 | 72,731 | ||||||
| Less the Partnership’s proportionate share of voyage revenues earned directly from its equity-accounted joint ventures | (5,755 | ) | (5,476 | ) | ||||
| Total adjusted revenues | 244,268 | 216,999 | ||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net (loss) income | (30,828 | ) | 24,125 | |||||
| Depreciation and amortization | 32,639 | 34,126 | ||||||
| Interest expense, net of interest income | 34,334 | 41,139 | ||||||
| Income tax expense | 2,512 | 2,578 | ||||||
| EBITDA | 38,657 | 101,968 | ||||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||
| Foreign currency exchange (gain) loss | (4,739 | ) | 731 | |||||
| Other expense (income) – net | 361 | (251 | ) | |||||
| Equity income | (373 | ) | (5,578 | ) | ||||
| Realized and unrealized loss on derivative instruments | 20,471 | 6,617 | ||||||
| Write-down of vessels | 45,000 | — | ||||||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,769 | 3,218 | ||||||
| Consolidated adjusted EBITDA | 103,146 | 106,705 | ||||||
| Adjusted EBITDA from equity-accounted vessels (See Appendix E) | 85,242 | 51,509 | ||||||
| Total adjusted EBITDA | 188,388 | 158,214 | ||||||
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 March 31, 2020 | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||||||||||||
| Voyage revenues | 132,570 | 7,317 | — | 139,887 | ||||||||||||||
| Voyage expenses | (1,029 | ) | (1,288 | ) | — | (2,317 | ) | |||||||||||
| Vessel operating expenses | (22,092 | ) | (4,012 | ) | — | (26,104 | ) | |||||||||||
| Time-charter hire expense | (5,922 | ) | — | — | (5,922 | ) | ||||||||||||
| Depreciation and amortization | (30,592 | ) | (2,047 | ) | — | (32,639 | ) | |||||||||||
| General and administrative expenses | (5,753 | ) | (414 | ) | — | (6,167 | ) | |||||||||||
| Write-down of vessels | — | (45,000 | ) | — | (45,000 | ) | ||||||||||||
| Income (loss) from vessel operations | 67,182 | (45,444 | ) | — | 21,738 | |||||||||||||
| Depreciation and amortization | 30,592 | 2,047 | — | 32,639 | ||||||||||||||
| Write-down of vessels | — | 45,000 | — | 45,000 | ||||||||||||||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 3,769 | — | — | 3,769 | ||||||||||||||
| Consolidated adjusted EBITDA | 101,543 | 1,603 | — | 103,146 | ||||||||||||||
| Three Months Ended March 31, 2019 | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||||||||||||
| Voyage revenues | 137,822 | 9,160 | 2,762 | 149,744 | ||||||||||||||
| Voyage (expenses) recoveries | (1,238 | ) | (4,670 | ) | 133 | (5,775 | ) | |||||||||||
| Vessel operating expenses | (20,555 | ) | (4,352 | ) | (1,194 | ) | (26,101 | ) | ||||||||||
| Time-charter hire expense | (5,591 | ) | — | — | (5,591 | ) | ||||||||||||
| Depreciation and amortization | (31,686 | ) | (1,921 | ) | (519 | ) | (34,126 | ) | ||||||||||
| General and administrative expenses | (5,963 | ) | (563 | ) | (106 | ) | (6,632 | ) | ||||||||||
| Restructuring charges | — | — | (2,158 | ) | (2,158 | ) | ||||||||||||
| Income (loss) from vessel operations | 72,789 | (2,346 | ) | (1,082 | ) | 69,361 | ||||||||||||
| Depreciation and amortization | 31,686 | 1,921 | 519 | 34,126 | ||||||||||||||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 3,218 | — | — | 3,218 | ||||||||||||||
| Consolidated adjusted EBITDA | 107,693 | (425 | ) | (563 | ) | 106,705 | ||||||||||||
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 | ||||||||||||||||||||||
| March 31, 2020 | March 31, 2019 | |||||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||||
| At | Partnership's | At | Partnership's | |||||||||||||||||||
| 100% | Portion(1) | 100% | Portion(1) | |||||||||||||||||||
| Voyage revenues | 254,652 | 110,136 | 170,251 | 72,731 | ||||||||||||||||||
| Voyage expenses | (2,815 | ) | (1,354 | ) | (2,880 | ) | (1,447 | ) | ||||||||||||||
| Vessel operating expenses, time-charter hire expenses and general and administrative expenses | (70,876 | ) | (31,629 | ) | (54,387 | ) | (23,972 | ) | ||||||||||||||
| Depreciation and amortization | (25,613 | ) | (12,965 | ) | (28,640 | ) | (13,785 | ) | ||||||||||||||
| Income from vessel operations of equity-accounted vessels | 155,348 | 64,188 | 84,344 | 33,527 | ||||||||||||||||||
| Net interest expense | (76,058 | ) | (30,493 | ) | (53,146 | ) | (21,278 | ) | ||||||||||||||
| Income tax expense | (598 | ) | (299 | ) | (2,781 | ) | (1,051 | ) | ||||||||||||||
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provision(2) | (102,927 | ) | (33,023 | ) | (16,906 | ) | (5,620 | ) | ||||||||||||||
| Net (loss) income / equity income of equity-accounted vessels | (24,235 | ) | 373 | 11,511 | 5,578 | |||||||||||||||||
| Net (loss) income / equity income of equity-accounted LNG vessels | (24,777 | ) | 182 | 15,183 | 7,493 | |||||||||||||||||
| Net income (loss) / equity income (loss) of equity-accounted LPG vessels | 542 | 191 | (3,672 | ) | (1,915 | ) | ||||||||||||||||
| Net (loss) income / equity income of equity-accounted vessels | (24,235 | ) | 373 | 11,511 | 5,578 | |||||||||||||||||
| Depreciation and amortization | 25,613 | 12,965 | 28,640 | 13,785 | ||||||||||||||||||
| Net interest expense | 76,058 | 30,493 | 53,146 | 21,278 | ||||||||||||||||||
| Income tax expense | 598 | 299 | 2,781 | 1,051 | ||||||||||||||||||
| EBITDA from equity-accounted vessels | 78,034 | 44,130 | 96,078 | 41,692 | ||||||||||||||||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||||||||||||||||
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provision(2) | 102,927 | 33,023 | 16,906 | 5,620 | ||||||||||||||||||
| Direct finance and sale-type lease payments received in excess of revenue recognized | 24,976 | 9,024 | 14,689 | 5,133 | ||||||||||||||||||
| Amortization of in-process contracts | (1,718 | ) | (935 | ) | (1,722 | ) | (936 | ) | ||||||||||||||
| Adjusted EBITDA from equity-accounted vessels | 204,219 | 85,242 | 125,951 | 51,509 | ||||||||||||||||||
| Adjusted EBITDA from equity-accounted LNG vessels | 185,672 | 75,970 | 110,902 | 43,986 | ||||||||||||||||||
| Adjusted EBITDA from equity-accounted LPG vessels | 18,547 | 9,272 | 15,049 | 7,523 | ||||||||||||||||||
- The Partnership's equity-accounted vessels for the three months ended March 31, 2020 and 2019 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 percent ownership interest in the Partnership’s joint venture with Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers as at March 31, 2020, compared to 22 owned and in-chartered LPG carriers as at March 31, 2019; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at March 31, 2020 chartered to Shell (the Pan Union Joint Venture); the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture as at March 31, 2020, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at March 31, 2019; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain.
- Unrealized credit losses were recorded for the three months ended March 31, 2020 upon the adoption of the new accounting standard ASC 326 on January 1, 2020.
Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)
| As at March 31, 2020 | As at December 31, 2019 | |||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||
| At | Partnership's | At | Partnership's | |||||||||||||||
| 100% | Portion(1) | 100% | Portion(1) | |||||||||||||||
| Cash and restricted cash, current and non-current | 578,101 | 241,122 | 509,065 | 210,736 | ||||||||||||||
| Other current assets | 69,416 | 28,938 | 62,566 | 27,719 | ||||||||||||||
| Property, plant and equipment, including owned vessels, vessels related to finance leases and operating lease right-of-use assets | 2,044,990 | 1,044,317 | 3,112,349 | 1,375,570 | ||||||||||||||
| Net investments in sales-type and direct financing leases, current and non-current | 5,484,835 | 2,116,196 | 4,589,139 | 1,856,709 | ||||||||||||||
| Other non-current assets | 67,372 | 44,542 | 50,967 | 41,015 | ||||||||||||||
| Total assets | 8,244,714 | 3,475,115 | 8,324,086 | 3,511,749 | ||||||||||||||
| Current portion of long-term debt and obligations related to finance leases and operating leases | 317,747 | 136,396 | 315,247 | 136,573 | ||||||||||||||
| Current portion of derivative liabilities | 49,708 | 19,563 | 34,618 | 13,658 | ||||||||||||||
| Other current liabilities | 166,387 | 71,309 | 153,816 | 66,224 | ||||||||||||||
| Long-term debt and obligations related to finance leases and operating leases | 4,970,226 | 2,018,174 | 5,026,123 | 2,041,595 | ||||||||||||||
| Shareholders' loans, current and non-current | 346,969 | 127,312 | 346,969 | 126,546 | ||||||||||||||
| Derivative liabilities | 315,023 | 127,703 | 162,640 | 66,060 | ||||||||||||||
| Other long-term liabilities | 66,653 | 32,867 | 64,196 | 32,323 | ||||||||||||||
| Equity | 2,012,001 | 941,791 | 2,220,477 | 1,028,770 | ||||||||||||||
| Total liabilities and equity | 8,244,714 | 3,475,115 | 8,324,086 | 3,511,749 | ||||||||||||||
| Investments in equity-accounted joint ventures | 941,791 | 1,028,770 | ||||||||||||||||
| Advances to equity-accounted joint ventures | 127,312 | 126,546 | ||||||||||||||||
| Credit loss provision(2) | (3,714 | ) | — | |||||||||||||||
| Investments in and advances to equity-accounted joint ventures | 1,065,389 | 1,155,316 | ||||||||||||||||
- The Partnership's equity-accounted vessels as at March 31, 2020 and December 31, 2019 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 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 MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers; the Partnership’s ownership interest ranging from 20 percent to 30 percent in four LNG carriers as at March 31, 2020 chartered to Shell in the Pan Union Joint Venture; the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain.
- Unrealized credit losses were recorded as at March 31, 2020 upon the adoption of the new accounting standard ASC 326 on January 1, 2020.
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 impact of COVID-19 and related global events on the Partnership's operations and cash flows; the Partnership’s ability to achieve previously disclosed adjusted net income guidance figures for the year-ending December 31, 2020; expectations on future allocation of capital towards balance sheet deleveraging and returning capital to unitholders; the ability to continue to pay increased distributions on its common units; expected charter commencement dates; and the Partnership's positioning to meet its upcoming debt maturities. 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: 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, including as a result of off-hire days or dry-docking requirements; general market conditions and trends, including spot, multi-month and multi-year charter rates; inability of customers of the Partnership or any of its joint ventures to make future payments under contracts; potential further delays to the formal commencement of commercial operations of the Bahrain Regasification Terminal; the inability of the Partnership to renew or replace long-term contracts on existing vessels; potential lack of cash flow to reduce balance sheet leverage or of excess capital available to allocate towards returning capital to unitholders; 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, 2019. 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.