Highlights
- GAAP net income attributable to the partners and preferred unitholders of $35.1 million and GAAP net income per common unit of $0.32 in the fourth quarter of 2020; and $87.4 million and $0.73 per common unit, respectively, for fiscal 2020.
- Adjusted net income(1) attributable to the partners and preferred unitholders of $60.0 million and adjusted net income per common unit of $0.61 in the fourth quarter of 2020 (excluding other items listed in Appendix A to this release), and a record high $233.8 million and $2.45 per common unit, respectively, for fiscal 2020.
- Total adjusted EBITDA(1) of $190.2 million in the fourth quarter of 2020; and $757.9 million for fiscal 2020.
- In early-December 2020, secured a fixed-rate charter for the 52 percent-owned Methane Spirit to early-2023. The Partnership's LNG fleet is 97 percent fixed for 2021, and is currently 89 percent fixed for 2022.
- Teekay LNG expects to increase its common unit distributions by 15 percent to $1.15 per common unit, on an annualized basis, commencing with the first quarter's distribution to be paid in May 2021.
HAMILTON, Bermuda, Feb. 25, 2021 (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 and year ended December 31, 2020.
Consolidated Financial Summary
| Three Months Ended | Year Ended | ||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |
| (in thousands of U.S. Dollars, except per unit data) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
| GAAP FINANCIAL COMPARISON | |||||
| Voyage revenues | 154,076 | 148,935 | 148,797 | 591,103 | 601,256 |
| Income from vessel operations | 65,169 | 69,597 | 83,604 | 226,093 | 299,253 |
| Equity income | 15,359 | 24,346 | 30,207 | 72,233 | 58,819 |
| Net income attributable to the partners and preferred unitholders | 35,142 | 40,275 | 67,370 | 87,357 | 152,790 |
| Limited partners’ interest in net income per common unit | 0.32 | 0.38 | 0.77 | 0.73 | 1.59 |
| NON-GAAP FINANCIAL COMPARISON | |||||
| Total adjusted EBITDA(1) | 190,228 | 186,902 | 184,168 | 757,858 | 684,667 |
| Distributable cash flow (DCF)(1) | 85,033 | 79,168 | 71,350 | 322,248 | 252,819 |
| Adjusted net income attributable to the partners and preferred unitholders(1) | 59,978 | 58,933 | 50,342 | 233,790 | 168,656 |
| Limited partners’ interest in adjusted net income per common unit | 0.61 | 0.59 | 0.56 | 2.45 | 1.79 |
| (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). |
Fourth Quarter of 2020 Compared to Third Quarter of 2020
GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders were positively impacted for the three months ended December 31, 2020, compared to the three months ended September 30, 2020, primarily due to fewer scheduled dry dockings in the fourth quarter of 2020.
GAAP net income attributable to the partners and preferred unitholders was also negatively impacted by write-downs recorded in the fourth quarter of 2020 of four wholly-owned multi-gas carriers by $6.0 million and four, 50 percent-owned liquefied petroleum gas (LPG) carriers by $17.0 million. These decreases to GAAP net income were partially offset by lower unrealized credit loss provisions recorded in the fourth quarter of 2020 compared to the third quarter of 2020.
Fourth Quarter of 2020 Compared to Fourth Quarter of 2019
GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders were positively impacted for the three months ended December 31, 2020, compared to the same quarter of the prior year, primarily due to: the delivery of liquefied natural gas (LNG) carrier newbuildings, commencement of terminal use payments for the Partnership's 30 percent-owned Bahrain LNG Terminal, higher LPG rates, and lower net interest expense. These increases were partially offset by more scheduled dry dockings during the fourth quarter of 2020 and lower charter rates earned by certain of the Partnership's LNG carriers and in addition, the increases in non-GAAP adjusted net income attributable to the partners and preferred unitholders were partially offset by the sales of two LNG carriers in January 2020.
GAAP net income attributable to the partners and preferred unitholders was also negatively impacted by write-downs recorded in the fourth quarter of 2020 of four wholly-owned multi-gas carriers and four, 50 percent-owned LPG carriers; a gain recognized in the fourth quarter of 2019 upon derecognition of two LNG carriers and reclassification as sales-type leases; and lower unrealized gains on non-designated derivative instruments in the fourth quarter of 2020 compared to the fourth quarter of 2019.
CEO Commentary
“For both the fourth quarter and fiscal year 2020, we generated strong earnings and cash flows resulting in the highest ever recorded annual adjusted results for Teekay LNG,” commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. “During a year which saw extreme volatility in gas prices, LNG shipping rates and equity markets, our strategy of chartering substantially all of our LNG fleet on long-term contracts helped us to achieve consistently strong results throughout the year and to maintain certainty and forward visibility amid the unprecedented uncertainty and volatility that impacted many others in the broader energy space in 2020.” Mr. Kremin continued, “In 2020, we increased our total adjusted EBITDA(i) and adjusted net income(i) by 11 percent and 39 percent, respectively, over our 2019 fiscal results, while simultaneously reducing our proportionate net debt(ii) by nearly $560 million(iii), or over 10 percent.”
“I’m also pleased to announce our plan to increase our common unit distributions by 15 percent, to $1.15 per common unit per annum, commencing with the first quarter’s distribution to be paid in May 2021. This represents our third consecutive year of double-digit increases to our distributions, which is supported by not only a record level of adjusted earnings, but also an industry-leading revenue backlog of long-term contracts to a diversified portfolio of strong counterparties. As a result, Teekay LNG's distributions are well-covered, which enables the Partnership to provide an attractive distribution to existing and new investors while also build equity value and financial flexibility through continued balance sheet delevering.”
| (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. | |
| (ii) | Including Teekay LNG's proportionate share of net debt in its equity-accounted joint ventures. | |
| (iii) | Including $260 million of proceeds received from the sale of two LNG carriers in January 2020. |
Summary of Recent Events
Chartering Activities
In October 2020, the charterer of the 52 percent-owned LNG carrier Marib Spirit exercised its options to extend the current charter by 14 months at a higher charter rate, extending the vessel's charter coverage to early-2022.
In December 2020, the Partnership's 52 percent-owned joint venture with Marubeni Corporation (the MALT Joint Venture) secured a two-year, fixed-rate charter contract, with a one-year option, for the Methane Spirit which is expected to commence after its current charter contract ends in March 2021.
Financing Activities
In December 2020, the Partnership's 50 percent-owned joint venture with Exmar NV (the Exmar LPG Joint Venture) successfully refinanced its $254 million revolving credit facility and term loan by entering into a new revolving credit facility in the amount of $310 million maturing in December 2023.
On February 8, 2021, the Partnership's 70 percent-owned joint venture with PT Berlian Laju Tanker (the Tangguh Joint Venture), refinanced its $191.5 million term loan which was scheduled to mature in 2021, by entering into a new $191.5 million term loan maturing in February 2026.
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 | ||||||||||||||
| December 31, 2020 | December 31, 2019 | |||||||||||||
| (in thousands of U.S. Dollars) | (unaudited) | (unaudited) | ||||||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Total | Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | ||||||||
| GAAP FINANCIAL COMPARISON | ||||||||||||||
| Voyage revenues | 143,071 | 11,005 | 154,076 | 138,436 | 10,347 | 14 | 148,797 | |||||||
| Income (loss) from vessel operations | 73,142 | (7,973 | ) | 65,169 | 85,522 | (1,801 | ) | (117 | ) | 83,604 | ||||
| Equity income (loss) | 28,593 | (13,234 | ) | 15,359 | 28,468 | 1,739 | — | 30,207 | ||||||
| NON-GAAP FINANCIAL COMPARISON | ||||||||||||||
| Consolidated adjusted EBITDA(i) | 107,427 | 203 | 107,630 | 112,547 | 188 | (117 | ) | 112,618 | ||||||
| Adjusted EBITDA from equity-accounted vessels(i) | 70,958 | 11,640 | 82,598 | 61,454 | 10,096 | — | 71,550 | |||||||
| Total adjusted EBITDA(i) | 178,385 | 11,843 | 190,228 | 174,001 | 10,284 | (117 | ) | 184,168 | ||||||
| (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 for the LNG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, decreased primarily due to a $14.3 million gain on the derecognition of the WilForce and WilPride LNG carriers as they were reclassified as sales-type leases prior to their sale in January 2020. Consolidated adjusted EBITDA(1) for the LNG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, decreased primarily due to a reduction in earnings upon the sales of the WilForce and WilPride LNG carriers.
Equity income and adjusted EBITDA from equity-accounted vessels(1) for the LNG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, increased primarily due to the deliveries of two ARC7 LNG carrier newbuildings in November and December 2019 to the Partnership's 50 percent-owned joint venture with China LNG (the Yamal LNG Joint Venture) and commencement of terminal use payments in January 2020 to the Partnership's 30 percent-owned joint venture in Bahrain (the Bahrain LNG Joint Venture). These increases were partially offset by lower earnings from the Partnership's 52 percent-owned MALT Joint Venture as a result of lower charter rates earned upon redeployment of the Arwa Spirit, Marib Spirit and Methane Spirit between May and July 2020. In addition, GAAP equity income was negatively impacted by increases in unrealized credit loss provisions in the fourth quarter of 2020 related to the adoption of the new accounting standards on credit losses (Accounting Standards Codification 326: Financial Instruments - Credit Losses (ASC 326)) at the beginning of 2020 and lower unrealized gains on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the fourth quarter of 2020 compared to fourth quarter of 2019.
Liquefied Petroleum Gas Segment
Loss from vessel operations for the LPG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, was negatively impacted by write-downs recorded in the fourth quarter of 2020 on four multi-gas carriers by $6.0 million.
Consolidated adjusted EBITDA(1) for the LPG segment for the three months ended December 31, 2020 was comparable to the same quarter of the prior year.
Equity (loss) income and adjusted EBITDA from equity-accounted vessels(1) for the LPG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, were positively impacted from higher charter rates earned in the Partnership's 50 percent-owned Exmar LPG Joint Venture. In addition, equity (loss) income for the LPG segment for the three months ended December 31, 2020, compared to the same quarter of the prior year, was negatively impacted by the write-downs of four LPG carriers in the Partnership’s 50 percent-owned Exmar LPG Joint Venture by $17.0 million.
Conventional Tanker Segment
There were no results from vessel operations for the conventional tanker segment for the three months ended December 31, 2020, as the last of the Partnership's conventional tanker, the Alexander Spirit, was sold in October of 2019.
| (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 February 1, 2021. In addition, the Partnership owns a 30 percent interest in an LNG 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 |
| (i) | Includes vessels leased by the Partnership from third parties and accounted for as finance leases. | |
| (ii) | The Partnership’s ownership interests in these vessels range from 20 percent to 100 percent. | |
| (iii) | The Partnership’s ownership interests in these vessels range from 50 percent to 100 percent. |
Liquidity
As of December 31, 2020, the Partnership had total liquidity of $461.6 million (comprised of $206.8 million in cash and cash equivalents and $254.8 million in undrawn credit facilities) compared to $430.8 million as of September 30, 2020.
Conference Call
The Partnership plans to host a conference call on Thursday, February 25, 2021 at 1:00 p.m. (ET) to discuss the results for the fourth quarter and year ended 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) 437-2398 or 1 (647) 792-1240, if outside North America, and quoting conference ID code 5369396.
- 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 Fourth Quarter and Fiscal Year 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 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
Adjusted EBITDA represents net 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 unrealized credit loss provisions, unrealized gains or losses on non-designated derivative instruments, write-down and gains or losses on sales of vessels, foreign currency 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 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 (3) of the Consolidated Statements of 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 income adjusted for depreciation and amortization expense, deferred income tax and other non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from non-designated derivative instruments, unrealized credit loss provisions, 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, write-downs of vessels, gains or losses on sales of vessels, 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
(in thousands of U.S. Dollars, except unit and per unit data)
| Three Months Ended | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
| Voyage revenues | 154,076 | 148,935 | 148,797 | 591,103 | 601,256 | |||||
| Voyage expenses | (5,798 | ) | (3,950 | ) | (4,628 | ) | (17,394 | ) | (21,387 | ) |
| Vessel operating expenses | (31,243 | ) | (30,642 | ) | (30,706 | ) | (116,396 | ) | (111,585 | ) |
| Time-charter hire expenses | (6,294 | ) | (5,980 | ) | (5,987 | ) | (23,564 | ) | (19,994 | ) |
| Depreciation and amortization | (32,883 | ) | (32,601 | ) | (33,053 | ) | (129,752 | ) | (136,765 | ) |
| General and administrative expenses | (6,689 | ) | (6,165 | ) | (4,829 | ) | (26,904 | ) | (22,521 | ) |
| Write-down and gain on sales of vessels(1) | (6,000 | ) | — | 14,349 | (51,000 | ) | 13,564 | |||
| Restructuring charges(2) | — | — | (339 | ) | — | (3,315 | ) | |||
| Income from vessel operations | 65,169 | 69,597 | 83,604 | 226,093 | 299,253 | |||||
| Equity income(3) | 15,359 | 24,346 | 30,207 | 72,233 | 58,819 | |||||
| Interest expense | (30,431 | ) | (30,528 | ) | (40,712 | ) | (132,806 | ) | (164,521 | ) |
| Interest income | 1,411 | 1,406 | 922 | 6,884 | 3,985 | |||||
| Realized and unrealized (loss) gain on non-designated derivative instruments(4) | (3,020 | ) | (1,327 | ) | 4,352 | (33,334 | ) | (13,361 | ) | |
| Foreign currency exchange loss(5) | (6,618 | ) | (7,853 | ) | (4,545 | ) | (21,356 | ) | (9,640 | ) |
| Other expense(6) | (1,721 | ) | (14,149 | ) | (1,767 | ) | (16,910 | ) | (2,454 | ) |
| Net income before income tax expense | 40,149 | 41,492 | 72,061 | 100,804 | 172,081 | |||||
| Income tax expense | (1,364 | ) | (1,420 | ) | (985 | ) | (3,492 | ) | (7,477 | ) |
| Net income | 38,785 | 40,072 | 71,076 | 97,312 | 164,604 | |||||
| Non-controlling interest in net income (loss) | 3,643 | (203 | ) | 3,706 | 9,955 | 11,814 | ||||
| Preferred unitholders' interest in net income | 6,427 | 6,425 | 6,426 | 25,702 | 25,702 | |||||
| General partner's interest in net income | 504 | 595 | 1,218 | 1,023 | 2,542 | |||||
| Limited partners’ interest in net income | 28,211 | 33,255 | 59,726 | 60,632 | 124,546 | |||||
| Limited partners' interest in net income per common unit: | ||||||||||
| • Basic | 0.32 | 0.38 | 0.77 | 0.73 | 1.59 | |||||
| • Diluted | 0.32 | 0.38 | 0.77 | 0.73 | 1.59 | |||||
| Weighted-average number of common units outstanding: | ||||||||||
| • Basic | 86,951,234 | 86,951,234 | 77,509,379 | 83,313,097 | 78,177,189 | |||||
| • Diluted | 87,077,496 | 87,041,046 | 77,615,829 | 83,419,004 | 78,268,412 | |||||
| Total number of common units outstanding at end of period | 86,951,234 | 86,951,234 | 77,509,339 | 86,951,234 | 77,509,339 | |||||
| (1) | During the three months and year ended December 31, 2020, the Partnership wrote-down its seven wholly-owned multi-gas carriers to their estimated fair values. The total impairment charges of $6.0 million and $51.0 million were included in write-down of vessels and gain on sales of vessels for the three months and year ended December 31, 2020, respectively. In December 2019, the Partnership recognized a gain of $14.3 million for the three months and year ended December 31, 2019 on derecognition of two LNG carriers on charter to Awilco LNG ASA as they were reclassified as sales-type leases. For the year ended December 31, 2019, the Partnership recorded a write-down of $0.8 million on the Alexander Spirit conventional tanker, which was sold in October 2019. | |
| (2) | In January 2019, the Toledo Spirit conventional tanker was sold and as a result of the sale, the Partnership recorded restructuring charges relating to seafarer severance costs of $0.3 million and $3.3 million for the three months and year ended December 31, 2019, respectively. | |
| (3) | The Partnership’s proportionate share of items within equity income as identified in Appendix A of this release are 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 | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| Equity income | 15,359 | 24,346 | 30,207 | 72,233 | 58,819 | |||||
| Proportionate share of unrealized (gain) loss on non-designated interest rate swaps | (4,214 | ) | (2,680 | ) | (6,271 | ) | 19,116 | 8,341 | ||
| Proportionate share of write-down of vessels | 17,000 | — | — | 17,000 | — | |||||
| Proportionate share of unrealized credit loss provisions(a) | 2,989 | 7,099 | — | 18,645 | — | |||||
| Proportionate share of other items | (669 | ) | 1,167 | 1,436 | 321 | 2,828 | ||||
| Equity income adjusted for items in Appendix A | 30,465 | 29,932 | 25,372 | 127,315 | 69,988 | |||||
| (a) | Related to adoption of new accounting standard ASC 326 effective January 1, 2020. | ||
| (4) | The realized losses on non-designated derivative instruments relate to the amounts the Partnership actually paid to settle non-designated derivative instruments and the unrealized gains (losses) on non-designated derivative instruments relate to the change in fair value of such non-designated derivative instruments, as detailed in the table below: |
| Three Months Ended | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| Realized losses relating to: | ||||||||||
| Interest rate swap agreements | (5,106 | ) | (4,947 | ) | (2,683 | ) | (16,626 | ) | (10,081 | ) |
| Foreign currency forward contracts | — | — | (147 | ) | (241 | ) | (147 | ) | ||
| (5,106 | ) | (4,947 | ) | (2,830 | ) | (16,867 | ) | (10,228 | ) | |
| Unrealized gains (losses) relating to: | ||||||||||
| Interest rate swap agreements | 2,086 | 3,620 | 6,849 | (16,669 | ) | (2,891 | ) | |||
| Foreign currency forward contracts | — | — | 333 | 202 | (202 | ) | ||||
| Toledo Spirit time-charter derivative | — | — | — | — | (40 | ) | ||||
| 2,086 | 3,620 | 7,182 | (16,467 | ) | (3,133 | ) | ||||
| Total realized and unrealized (losses) gains on non-designated derivative instruments | (3,020 | ) | (1,327 | ) | 4,352 | (33,334 | ) | (13,361 | ) | |
| (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 Income. | |
| Foreign currency exchange loss includes realized (losses) gains relating to the amounts the Partnership paid to settle the Partnership’s Norwegian Krone (NOK) denominated unsecured bonds and the associated non-designated cross currency swaps that were entered into as economic hedges in relation to the NOK denominated bonds. Foreign currency exchange loss also includes unrealized gains (losses) relating to the change in fair value of such derivative instruments and unrealized gain (losses) on the revaluation of the NOK bonds as detailed in the table below: |
| Three Months Ended | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| Realized losses on cross-currency swaps | (1,672 | ) | (1,669 | ) | (1,019 | ) | (6,588 | ) | (5,061 | ) |
| Realized losses on cross-currency swaps maturity | — | — | — | (33,844 | ) | — | ||||
| Realized gains on repurchase of NOK bonds | — | — | — | 33,844 | — | |||||
| Unrealized gains (losses) on cross currency swaps | 29,001 | 1,490 | 12,579 | 26,832 | (13,239 | ) | ||||
| Unrealized (losses) gains on revaluation of NOK bonds | (28,694 | ) | (1,836 | ) | (11,877 | ) | (30,351 | ) | 5,810 | |
| (6) | Includes unrealized credit loss provisions of $1.5 million, $14.4 million and $16.1 million for the three months ended December 31, 2020, three months ended September 30, 2020 and for the year ended December 31, 2020, respectively, related to the Partnership's adoption of ASC 326 effective January 1, 2020. |
Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
| As at December 31, | As at September 30, | As at December 31, | ||||
| 2020 | 2020 | 2019 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 206,762 | 201,036 | 160,221 | |||
| Restricted cash – current | 8,358 | 11,224 | 53,689 | |||
| Accounts receivable | 7,631 | 6,753 | 13,460 | |||
| Prepaid expenses | 9,259 | 9,706 | 6,796 | |||
| Current portion of derivative assets | — | — | 355 | |||
| Current portion of net investments in direct financing and sales-type leases, net | 13,969 | 13,762 | 273,986 | |||
| Current portion of advances to equity-accounted joint ventures, net | 10,991 | — | — | |||
| Advances to affiliates | 4,924 | 1,953 | 5,143 | |||
| Other current assets | 237 | 237 | 238 | |||
| Total current assets | 262,131 | 244,671 | 513,888 | |||
| Restricted cash – long-term | 42,823 | 42,577 | 39,381 | |||
| Vessels and equipment | ||||||
| At cost, less accumulated depreciation | 1,220,355 | 1,244,123 | 1,335,397 | |||
| Vessels related to finance leases, at cost, less accumulated depreciation | 1,654,814 | 1,664,059 | 1,691,945 | |||
| Operating lease right-of-use asset | 20,750 | 24,179 | 34,157 | |||
| Total vessels and equipment | 2,895,919 | 2,932,361 | 3,061,499 | |||
| Investments in and advances to equity-accounted joint ventures, net | 1,056,792 | 1,092,724 | 1,155,316 | |||
| Net investments in direct financing and sales-type leases, net | 500,101 | 508,561 | 544,823 | |||
| Other assets | 22,382 | 20,025 | 14,738 | |||
| Derivative assets | 4,505 | — | 1,834 | |||
| Intangible assets – net | 34,510 | 36,724 | 43,366 | |||
| Goodwill | 34,841 | 34,841 | 34,841 | |||
| Total assets | 4,854,004 | 4,912,484 | 5,409,686 | |||
| LIABILITIES AND EQUITY | ||||||
| Current | ||||||
| Accounts payable | 4,883 | 2,319 | 5,094 | |||
| Accrued liabilities | 81,706 | 84,975 | 76,752 | |||
| Unearned revenue | 30,254 | 32,685 | 28,759 | |||
| Current portion of long-term debt | 250,508 | 291,720 | 393,065 | |||
| Current obligations related to finance leases | 71,932 | 71,441 | 69,982 | |||
| Current portion of operating lease liabilities | 14,003 | 13,841 | 13,407 | |||
| Current portion of derivative liabilities | 56,925 | 35,616 | 38,458 | |||
| Advances from affiliates | 11,047 | 13,970 | 7,003 | |||
| Total current liabilities | 521,258 | 546,567 | 632,520 | |||
| Long-term debt | 1,221,705 | 1,201,909 | 1,438,331 | |||
| Long-term obligations related to finance leases | 1,268,990 | 1,287,044 | 1,340,922 | |||
| Long-term operating lease liabilities | 6,747 | 10,338 | 20,750 | |||
| Other long-term liabilities | 56,063 | 81,991 | 51,006 | |||
| Derivative liabilities | 32,971 | 53,088 | 49,182 | |||
| Total liabilities | 3,107,734 | 3,180,937 | 3,532,711 | |||
| Equity | ||||||
| Limited partners – common units | 1,465,408 | 1,459,599 | 1,543,598 | |||
| Limited partners – preferred units | 285,159 | 285,159 | 285,159 | |||
| General partner | 46,182 | 46,081 | 50,241 | |||
| Accumulated other comprehensive loss | (103,836 | ) | (111,967 | ) | (57,312 | ) |
| Partners' equity | 1,692,913 | 1,678,872 | 1,821,686 | |||
| Non-controlling interest | 53,357 | 52,675 | 55,289 | |||
| Total equity | 1,746,270 | 1,731,547 | 1,876,975 | |||
| Total liabilities and total equity | 4,854,004 | 4,912,484 | 5,409,686 | |||
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
| Year Ended | ||||
| December 31, | December 31, | |||
| 2020 | 2019 | |||
| (unaudited) | (unaudited) | |||
| Cash and cash equivalents provided by (used for) | ||||
| OPERATING ACTIVITIES | ||||
| Net income | 97,312 | 164,604 | ||
| Non-cash and non-operating items: | ||||
| Unrealized loss on non-designated derivative instruments | 16,467 | 3,133 | ||
| Depreciation and amortization | 129,752 | 136,765 | ||
| Write-down and (gain) on sales of vessels | 51,000 | (13,564 | ) | |
| Unrealized foreign currency exchange loss including the effect of settlement upon maturity of cross currency swaps | 16,194 | 2,805 | ||
| Equity income, net of distributions received $71,758 (2019 – $40,303) | (475 | ) | (18,516 | ) |
| Amortization of deferred financing issuance costs included in interest expense | 5,788 | 8,135 | ||
| Change in unrealized credit loss provisions included in other expense | 16,075 | — | ||
| Other non-cash items | 7,161 | 7,634 | ||
| Change in non-cash operating assets and liabilities: | ||||
| Receipts from direct financing and sales-type leases | 274,562 | 17,073 | ||
| Expenditures for dry docking | (5,259 | ) | (12,358 | ) |
| Other non-cash operating assets and liabilities | 4,928 | 3,218 | ||
| Net operating cash flow | 613,505 | 298,929 | ||
| FINANCING ACTIVITIES | ||||
| Proceeds from issuance of long-term debt | 604,050 | 186,566 | ||
| Scheduled repayments of long-term debt and settlement of related swaps | (256,085 | ) | (132,627 | ) |
| Prepayments of long-term debt | (752,061 | ) | (188,787 | ) |
| Financing issuance costs | (5,111 | ) | (1,149 | ) |
| Proceeds from financing related to sales and leaseback of vessels | — | 317,806 | ||
| Scheduled repayments of obligations related to finance leases | (69,982 | ) | (71,726 | ) |
| Extinguishment of obligations related to finance leases | — | (111,617 | ) | |
| Repurchase of common units | (15,635 | ) | (25,728 | ) |
| Cash distributions paid | (104,397 | ) | (82,379 | ) |
| Dividends paid to non-controlling interests | (5,940 | ) | (90 | ) |
| Acquisition of non-controlling interest in certain of the Partnership's subsidiaries | (2,219 | ) | — | |
| Net financing cash flow | (607,380 | ) | (109,731 | ) |
| INVESTING ACTIVITIES | ||||
| Expenditures for vessels and equipment, net of warranty settlement | (10,482 | ) | (97,895 | ) |
| Capital contributions and advances to equity-accounted joint ventures | (991 | ) | (72,391 | ) |
| Proceeds from repayments of advances to equity-accounted joint ventures | 10,000 | — | ||
| Proceeds from sales of vessels | — | 11,515 | ||
| Net investing cash flow | (1,473 | ) | (158,771 | ) |
| Increase in cash, cash equivalents and restricted cash | 4,652 | 30,427 | ||
| Cash, cash equivalents and restricted cash, beginning of the year | 253,291 | 222,864 | ||
| Cash, cash equivalents and restricted cash, end of the year | 257,943 | 253,291 | ||
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 | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | |||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
| Net income – GAAP basis | 38,785 | 40,072 | 71,076 | 97,312 | 164,604 | |||||
| Less: net (income) loss attributable to non-controlling interests | (3,643 | ) | 203 | (3,706 | ) | (9,955 | ) | (11,814 | ) | |
| Net income attributable to the partners and preferred unitholders | 35,142 | 40,275 | 67,370 | 87,357 | 152,790 | |||||
| Add (subtract) specific items affecting net income: | ||||||||||
| Write-down and (gain) on sales of vessels(1) | 6,000 | — | (14,349 | ) | 51,000 | (13,564 | ) | |||
| Restructuring charges(2) | — | — | 339 | — | 3,315 | |||||
| Foreign currency exchange losses(3) | 4,944 | 6,184 | 3,436 | 14,766 | 4,021 | |||||
| Unrealized credit loss provisions, unrealized gains and losses on non-designated derivative instruments and other items from equity-accounted investees(4) | 15,106 | 5,586 | (4,835 | ) | 55,082 | 11,169 | ||||
| Unrealized (gains) losses on non-designated derivative instruments(5) | (2,086 | ) | (3,620 | ) | (7,182 | ) | 16,467 | 3,133 | ||
| Unrealized credit loss provisions and other items(6) | 174 | 14,397 | 5,046 | 12,852 | 8,461 | |||||
| Non-controlling interests’ share of items above(7) | 698 | (3,889 | ) | 517 | (3,734 | ) | (669 | ) | ||
| Total adjustments | 24,836 | 18,658 | (17,028 | ) | 146,433 | 15,866 | ||||
| Adjusted net income attributable to the partners and preferred unitholders | 59,978 | 58,933 | 50,342 | 233,790 | 168,656 | |||||
| Preferred unitholders' interest in adjusted net income | 6,427 | 6,425 | 6,426 | 25,702 | 25,702 | |||||
| General partner's interest in adjusted net income | 941 | 923 | 878 | 3,824 | 2,859 | |||||
| Limited partners’ interest in adjusted net income | 52,610 | 51,585 | 43,038 | 204,264 | 140,095 | |||||
| Limited partners’ interest in adjusted net income per common unit, basic | 0.61 | 0.59 | 0.56 | 2.45 | 1.79 | |||||
| Weighted-average number of common units outstanding, basic | 86,951,234 | 86,951,234 | 77,509,379 | 83,313,097 | 78,177,189 | |||||
| (1) | See Note 1 to the Consolidated Statements of Income included in this release for further details. | |
| (2) | See Note 2 to the Consolidated Statements of Income included in this release for further details. | |
| (3) | Foreign currency exchange losses primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized 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 5 to the Consolidated Statements of Income included in this release for further details. | |
| (4) | Reflects the proportionate share of write-down of vessels, unrealized credit loss provisions and unrealized gains or 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 Income included in this release for further details. | |
| (5) | Reflects the unrealized (gains) losses due to changes in the mark-to-market value of the Partnership's derivative instruments that are not designated as hedges for accounting purposes. See Note 4 to the Consolidated Statements of Income included in this release for further details. | |
| (6) | For the three months ended December 31, 2020, three months ended September 30, 2020 and for the year ended December 31, 2020, includes unrealized credit loss provisions of $1.5 million, $14.4 million and $16.1 million, respectively, related to the Partnership's adoption of ASC 326 effective January 1, 2020. | |
| (7) | 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 | Year Ended | ||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
| Net income | 38,785 | 40,072 | 71,076 | 97,312 | 164,604 | ||||||
| Add: | |||||||||||
| Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1) | 38,511 | 38,065 | 32,514 | 158,843 | 101,637 | ||||||
| Depreciation and amortization | 32,883 | 32,601 | 33,053 | 129,752 | 136,765 | ||||||
| Write-down and (gain) on sales of vessels | 6,000 | — | (14,349 | ) | 51,000 | (13,564 | ) | ||||
| Foreign currency exchange loss | 4,944 | 6,184 | 3,436 | 14,766 | 4,021 | ||||||
| Deferred income tax and other non-cash items | 3,723 | (709 | ) | 992 | 4,383 | 5,674 | |||||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,578 | 3,502 | 10,310 | 14,241 | 21,636 | ||||||
| Unrealized credit loss provisions | 1,518 | 14,397 | — | 16,075 | — | ||||||
| Distributions relating to equity financing of newbuildings | — | — | 886 | — | 4,190 | ||||||
| Subtract: | |||||||||||
| Unrealized (gains) losses on non-designated derivative instruments | (2,086 | ) | (3,620 | ) | (7,182 | ) | 16,467 | 3,133 | |||
| Distributions relating to preferred units | (6,427 | ) | (6,425 | ) | (6,426 | ) | (25,702 | ) | (25,702 | ) | |
| Estimated maintenance capital expenditures | (14,683 | ) | (14,683 | ) | (17,411 | ) | (58,536 | ) | (69,404 | ) | |
| Equity income | (15,359 | ) | (24,346 | ) | (30,207 | ) | (72,233 | ) | (58,819 | ) | |
| Distributable Cash Flow before non-controlling interest | 91,387 | 85,038 | 76,692 | 346,368 | 274,171 | ||||||
| Non-controlling interests’ share of DCF before estimated maintenance capital expenditures | (6,354 | ) | (5,870 | ) | (5,342 | ) | (24,120 | ) | (21,352 | ) | |
| Distributable Cash Flow | 85,033 | 79,168 | 71,350 | 322,248 | 252,819 | ||||||
| Amount of cash distributions attributable to the General Partner | (389 | ) | (389 | ) | (301 | ) | (1,578 | ) | (1,211 | ) | |
| Limited partners' Distributable Cash Flow | 84,644 | 78,779 | 71,049 | 320,670 | 251,608 | ||||||
| Weighted-average number of common units outstanding, basic | 86,951,234 | 86,951,234 | 77,509,379 | 83,313,097 | 78,177,189 | ||||||
| Distributable Cash Flow per limited partner common unit | 0.97 | 0.91 | 0.92 | 3.85 | 3.22 | ||||||
| (1) | The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $15.4 million, $15.4 million and $13.4 million for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively, and $61.2 million and $47.0 million for the years ended December 31, 2020 and 2019, 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 | Year Ended | |||||||||
| December 31, | September 30, | December 31, | December 31, | |||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||
| Net income | 38,785 | 40,072 | 71,076 | 97,312 | 164,604 | |||||
| Depreciation and amortization | 32,883 | 32,601 | 33,053 | 129,752 | 136,765 | |||||
| Interest expense, net of interest income | 29,020 | 29,122 | 39,790 | 125,922 | 160,536 | |||||
| Income tax expense | 1,364 | 1,420 | 985 | 3,492 | 7,477 | |||||
| EBITDA | 102,052 | 103,215 | 144,904 | 356,478 | 469,382 | |||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||||
| Foreign currency exchange loss | 6,618 | 7,853 | 4,545 | 21,356 | 9,640 | |||||
| Other expense | 1,721 | 14,149 | 1,767 | 16,910 | 2,454 | |||||
| Equity income | (15,359 | ) | (24,346 | ) | (30,207 | ) | (72,233 | ) | (58,819 | ) |
| Realized and unrealized loss (gain) on non-designated derivative instruments | 3,020 | 1,327 | (4,352 | ) | 33,334 | 13,361 | ||||
| Write-down and (gain) on sales of vessels | 6,000 | — | (14,349 | ) | 51,000 | (13,564 | ) | |||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,578 | 3,502 | 10,310 | 14,241 | 21,636 | |||||
| Consolidated adjusted EBITDA | 107,630 | 105,700 | 112,618 | 421,086 | 444,090 | |||||
| Adjusted EBITDA from equity-accounted vessels (See Appendix E) | 82,598 | 81,202 | 71,550 | 336,772 | 240,577 | |||||
| Total adjusted EBITDA | 190,228 | 186,902 | 184,168 | 757,858 | 684,667 | |||||
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 December 31, 2020 | Year Ended December 31, 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | Total | ||||||
| Voyage revenues | 143,071 | 11,005 | — | 154,076 | 591,103 | |||||
| Voyage expenses | (747 | ) | (5,051 | ) | — | (5,798 | ) | (17,394 | ) | |
| Vessel operating expenses | (26,010 | ) | (5,233 | ) | — | (31,243 | ) | (116,396 | ) | |
| Time-charter hire expenses | (6,294 | ) | — | — | (6,294 | ) | (23,564 | ) | ||
| Depreciation and amortization | (30,707 | ) | (2,176 | ) | — | (32,883 | ) | (129,752 | ) | |
| General and administrative expenses | (6,171 | ) | (518 | ) | — | (6,689 | ) | (26,904 | ) | |
| Write-down of vessels | — | (6,000 | ) | — | (6,000 | ) | (51,000 | ) | ||
| Income (loss) from vessel operations | 73,142 | (7,973 | ) | — | 65,169 | 226,093 | ||||
| Depreciation and amortization | 30,707 | 2,176 | — | 32,883 | 129,752 | |||||
| Write-down of vessels | — | 6,000 | — | 6,000 | 51,000 | |||||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 3,578 | — | — | 3,578 | 14,241 | |||||
| Consolidated adjusted EBITDA | 107,427 | 203 | — | 107,630 | 421,086 | |||||
| Three Months Ended December 31, 2019 | Year Ended December 31, 2019 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | Total | ||||||
| Voyage revenues | 138,436 | 10,347 | 14 | 148,797 | 601,256 | |||||
| Voyage (expenses) recoveries | (57 | ) | (4,573 | ) | 2 | (4,628 | ) | (21,387 | ) | |
| Vessel operating expenses | (25,363 | ) | (5,102 | ) | (241 | ) | (30,706 | ) | (111,585 | ) |
| Time-charter hire expenses | (5,987 | ) | — | — | (5,987 | ) | (19,994 | ) | ||
| Depreciation and amortization | (31,064 | ) | (1,989 | ) | — | (33,053 | ) | (136,765 | ) | |
| General and administrative (expenses) recoveries | (4,392 | ) | (484 | ) | 47 | (4,829 | ) | (22,521 | ) | |
| Gain on sales and write-down of vessels | 14,349 | — | — | 14,349 | 13,564 | |||||
| Restructuring (charges) recoveries | (400 | ) | — | 61 | (339 | ) | (3,315 | ) | ||
| Income (loss) from vessel operations | 85,522 | (1,801 | ) | (117 | ) | 83,604 | 299,253 | |||
| Depreciation and amortization | 31,064 | 1,989 | — | 33,053 | 136,765 | |||||
| Gain on sales and write-down of vessels | (14,349 | ) | — | — | (14,349 | ) | (13,564 | ) | ||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 10,310 | — | — | 10,310 | 21,636 | |||||
| Consolidated adjusted EBITDA | 112,547 | 188 | (117 | ) | 112,618 | 444,090 | ||||
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 | ||||||||
| December 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| At | Partnership's | At | Partnership's | |||||
| 100% | Portion(1) | 100% | Portion(1) | |||||
| Voyage revenues | 247,876 | 107,172 | 218,416 | 97,617 | ||||
| Voyage expenses | (3,886 | ) | (1,809 | ) | (1,567 | ) | (788 | ) |
| Vessel operating expenses, time-charter hire expenses and general and administrative expenses | (72,680 | ) | (31,726 | ) | (71,018 | ) | (31,535 | ) |
| Depreciation and amortization | (23,748 | ) | (12,339 | ) | (28,528 | ) | (13,852 | ) |
| Write-down of vessels | (34,000 | ) | (17,000 | ) | — | — | ||
| Income from vessel operations of equity-accounted vessels | 113,562 | 44,298 | 117,303 | 51,442 | ||||
| Net interest expense | (66,314 | ) | (26,832 | ) | (61,932 | ) | (25,641 | ) |
| Income tax expense | (2,863 | ) | (1,080 | ) | (200 | ) | (107 | ) |
| Other items including realized and unrealized (losses) gains on derivative instruments and unrealized credit loss provisions(2) | (4,485 | ) | (1,027 | ) | 12,743 | 4,513 | ||
| Net income / equity income of equity-accounted vessels | 39,900 | 15,359 | 67,914 | 30,207 | ||||
| Net income / equity income of equity-accounted LNG vessels | 65,903 | 28,593 | 64,274 | 28,468 | ||||
| Net (loss) income / equity (loss) income of equity-accounted LPG vessels | (26,003 | ) | (13,234 | ) | 3,640 | 1,739 | ||
| Net income / equity income of equity-accounted vessels | 39,900 | 15,359 | 67,914 | 30,207 | ||||
| Depreciation and amortization | 23,748 | 12,339 | 28,528 | 13,852 | ||||
| Net interest expense | 66,314 | 26,832 | 61,932 | 25,641 | ||||
| Income tax expense | 2,863 | 1,080 | 200 | 107 | ||||
| EBITDA from equity-accounted vessels | 132,825 | 55,610 | 158,574 | 69,807 | ||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||
| Other items including realized and unrealized losses (gains) on derivative instruments and unrealized credit loss provisions(2) | 4,485 | 1,027 | (12,743 | ) | (4,513 | ) | ||
| Write-down of vessels | 34,000 | 17,000 | — | — | ||||
| Direct finance and sale-type lease payments received in excess of revenue recognized | 27,387 | 9,917 | 19,286 | 7,212 | ||||
| Amortization of in-process contracts | (1,759 | ) | (956 | ) | (1,758 | ) | (956 | ) |
| Adjusted EBITDA from equity-accounted vessels | 196,938 | 82,598 | 163,359 | 71,550 | ||||
| Adjusted EBITDA from equity-accounted LNG vessels | 173,657 | 70,958 | 143,164 | 61,454 | ||||
| Adjusted EBITDA from equity-accounted LPG vessels | 23,281 | 11,640 | 20,195 | 10,096 | ||||
| (1) | The Partnership's equity-accounted vessels for the three months ended December 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; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers 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; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain. | |
| (2) | Unrealized credit loss provisions relate to the Partnership's adoption of ASC 326 effective January 1, 2020. |
| Year Ended | ||||||||
| December 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| At | Partnership's | At | Partnership's | |||||
| 100% | Portion(1) | 100% | Portion(1) | |||||
| Voyage revenues | 1,007,442 | 435,299 | 767,026 | 334,218 | ||||
| Voyage expenses | (10,876 | ) | (5,168 | ) | (10,807 | ) | (5,359 | ) |
| Vessel operating expenses, time-charter hire expenses and general and administrative expenses | (290,270 | ) | (127,684 | ) | (247,070 | ) | (109,063 | ) |
| Depreciation and amortization | (100,969 | ) | (51,162 | ) | (114,610 | ) | (55,340 | ) |
| Write-down of vessels | (34,000 | ) | (17,000 | ) | — | — | ||
| Income from vessel operations of equity-accounted vessels | 571,327 | 234,285 | 394,539 | 164,456 | ||||
| Net interest expense | (277,038 | ) | (111,809 | ) | (224,635 | ) | (91,394 | ) |
| Income tax expense | (3,685 | ) | (1,504 | ) | (3,683 | ) | (1,420 | ) |
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provisions(2) | (151,821 | ) | (48,739 | ) | (41,197 | ) | (12,823 | ) |
| Net income / equity income of equity-accounted vessels | 138,783 | 72,233 | 125,024 | 58,819 | ||||
| Net income / equity income of equity-accounted LNG vessels | 151,858 | 79,244 | 125,944 | 59,600 | ||||
| Net loss / equity loss of equity-accounted LPG vessels | (13,075 | ) | (7,011 | ) | (920 | ) | (781 | ) |
| Net income / equity income of equity-accounted vessels | 138,783 | 72,233 | 125,024 | 58,819 | ||||
| Depreciation and amortization | 100,969 | 51,162 | 114,610 | 55,340 | ||||
| Net interest expense | 277,038 | 111,809 | 224,635 | 91,394 | ||||
| Income tax expense | 3,685 | 1,504 | 3,683 | 1,420 | ||||
| EBITDA from equity-accounted vessels | 520,475 | 236,708 | 467,952 | 206,973 | ||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provisions(2) | 151,821 | 48,739 | 41,197 | 12,823 | ||||
| Write-down of vessels | 34,000 | 17,000 | — | — | ||||
| Direct finance and sale-type lease payments received in excess of revenue recognized | 105,496 | 38,117 | 67,807 | 24,574 | ||||
| Amortization of in-process contracts | (6,974 | ) | (3,792 | ) | (6,974 | ) | (3,793 | ) |
| Adjusted EBITDA from equity-accounted vessels | 804,818 | 336,772 | 569,982 | 240,577 | ||||
| Adjusted EBITDA from equity-accounted LNG vessels | 720,137 | 294,435 | 499,176 | 205,181 | ||||
| Adjusted EBITDA from equity-accounted LPG vessels | 84,681 | 42,337 | 70,806 | 35,396 | ||||
| (1) | The Partnership's equity-accounted vessels for the year ended December 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; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers 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; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain. | |
| (2) | Unrealized credit loss provisions relate to the Partnership's adoption of ASC 326 effective 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 December 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 | 549,454 | 225,049 | 509,065 | 210,736 | ||||
| Other current assets | 67,580 | 25,415 | 62,566 | 27,719 | ||||
| Property, plant and equipment, including owned vessels, vessels related to finance leases and operating lease right-of-use assets | 1,961,820 | 1,000,386 | 3,112,349 | 1,375,570 | ||||
| Net investments in sales-type and direct financing leases, current and non-current | 5,384,652 | 2,077,707 | 4,589,139 | 1,856,709 | ||||
| Other non-current assets | 87,248 | 51,812 | 50,967 | 41,015 | ||||
| Total assets | 8,050,754 | 3,380,369 | 8,324,086 | 3,511,749 | ||||
| Current portion of long-term debt and obligations related to finance leases and operating leases | 306,185 | 129,538 | 315,247 | 136,573 | ||||
| Current portion of derivative liabilities | 68,966 | 27,988 | 34,618 | 13,658 | ||||
| Other current liabilities | 164,266 | 65,311 | 153,816 | 66,224 | ||||
| Long-term debt and obligations related to finance leases and operating leases | 4,789,260 | 1,938,748 | 5,026,123 | 2,041,595 | ||||
| Shareholders' loans, current and non-current | 341,113 | 121,778 | 346,969 | 126,546 | ||||
| Derivative liabilities | 280,480 | 112,922 | 162,640 | 66,060 | ||||
| Other long-term liabilities | 70,743 | 33,353 | 64,196 | 32,323 | ||||
| Equity | 2,029,741 | 950,731 | 2,220,477 | 1,028,770 | ||||
| Total liabilities and equity | 8,050,754 | 3,380,369 | 8,324,086 | 3,511,749 | ||||
| Investments in equity-accounted joint ventures | 950,731 | 1,028,770 | ||||||
| Advances to equity-accounted joint ventures | 121,778 | 126,546 | ||||||
| Unrealized credit loss provisions(2) | (4,726 | ) | — | |||||
| Investments in and advances, net to equity-accounted joint ventures, current and non-current | 1,067,783 | 1,155,316 | ||||||
| (1) | The Partnership's equity-accounted vessels as at December 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 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. | |
| (2) | The unrealized credit loss provisions relate to the Partnership's adoption of ASC 326 effective 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 market volatility and related global events on the Partnership's operations and cash flows; fixed charter coverage for the Partnership's LNG fleet for 2021 and 2022; the expected increase in the Partnership’s common unit distribution commencing in the first quarter of 2021 (and the coverage of such increased distribution payments); the continued creditworthiness of the Partnership’s contractual counterparties; the ability of the Partnership to realize and receive the full benefits from its contractual backlog of revenue under its long-term charter contracts; continued receipt of terminal use payments in respect of the Bahrain LNG regasification terminal; the expected increase in the Partnership's equity value and financial flexibility resulting from the Partnership’s continued delevering of its balance sheet; and the expected cash flows from, and the continued performance of, the Partnership's and its joint ventures' charter contracts.
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 (both scheduled and unscheduled); delays in the Partnership’s ability to successfully and timely complete dry dockings; 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; potential lack of cash flow to continue paying distributions on the Partnership’s common units and other securities; 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.