Teekay LNG Partners Reports First Quarter 2017 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 05/18/17 -- Highlights
Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership's results for the quarter ended March 31, 2017.
(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).
CEO Commentary
"During the first quarter, the Partnership's results were in-line with our expectations," commented Mark Kremin, President and CEO of Teekay Gas Group Ltd. "This included a one-month contribution from the delivery of our third MEGI LNG carrier newbuilding, the Torben Spirit, named after Teekay's late-founder, J. Torben Karlshoej, which commenced its charter contract in early-March 2017."
"Since reporting earnings in February 2017, we continued to execute on our portfolio of committed growth projects and opportunistically acquired a mid-size LPG carrier newbuilding through our 50 percent-owned Exmar LPG joint venture," Mr. Kremin continued. "In addition, we have now completed or are nearing completion of financing for all the Partnership's committed growth projects delivering through mid-2018 with the recent progress on approximately $640 million in new long-term financings. We expect to secure the remainder of the required long-term financings for the Partnership's committed growth projects within the second half of 2017."
Summary of Recent Events
Debt Financing Update
In April and May 2017, the Partnership completed approximately $355 million in new long-term financings for its committed growth projects, including: (i) a $175 million sale-leaseback transaction for one of the Partnership's MEGI LNG carrier newbuildings scheduled to deliver in 2017, and (ii) a $180 million sale-leaseback transaction for one of the Partnership's MEGI LNG carrier newbuildings scheduled to deliver in 2018. Furthermore, the Partnership is nearing completion on a $285(1) million sale-leaseback transaction for two of the Partnership's 50 percent-owned ARC7 Ice-Class LNG carrier newbuildings for the Yamal LNG project, which are scheduled to deliver in 2018.
In March 2017, the Partnership's 52 percent-owned joint venture with Marubeni Corporation (MALT LNG Joint Venture) completed a refinancing of four LNG carriers with a new $335 million debt facility.
MALT LNG Joint Venture Secures 18-month Firm Charter Plus One-Year Option
In May 2017, the MALT LNG Joint Venture signed an 18-month charter contract (plus one-year extension option) with a major Japanese utility company, commencing in the fourth quarter of 2018. This charter contract will be serviced by one of the MALT LNG Joint Venture's existing vessels currently trading in the short-term market.
Exmar LPG Joint Venture Acquires Mid-Size Gas Carrier Newbuilding
In April 2017, the Partnership's 50/50 joint venture with Exmar (Exmar LPG Joint Venture) agreed to acquire an existing mid-size LPG carrier newbuilding, which is scheduled to deliver in mid-2018. The acquisition is consistent with the Exmar LPG Joint Venture's strategy of fleet renewal to preserve its market share and contract of affreightment (CoA) franchise with its customers in both the Ammonia and LPG trade. The installment payments on the vessel are expected to be financed by the Exmar LPG Joint Venture's existing liquidity and the joint venture expects to secure long-term financing prior to delivery.
Charter Contracts with Skaugen
On April 20, 2017, in lieu of receiving cash on a portion of the charter hire on six LPG carriers on charter with I.M. Skaugen SE (Skaugen), the Partnership took over Skaugen's 35 percent ownership interest in a 2003-built LPG carrier, the Norgas Sonoma. As part of this transaction, the Partnership also acquired the remaining 65 percent ownership in this vessel from the other shareholders for a total purchase price of approximately $13 million (including Skaugen's 35 percent ownership interest that was transferred to the Partnership). The vessel is currently trading in the Norgas pool. Giving pro forma effect for this transaction, Skaugen owed the Partnership approximately $8.3 million in outstanding charter hire and accrued interest thereon as of March 31, 2017.
(1) Based on Teekay LNG's proportionate ownership interests in the projects.
Charter Contracts with Awilco LNG
In April 2017, the Partnership commenced charter extension and deferral negotiations with Awilco LNG regarding two modern LNG vessels chartered to Awilco LNG, which include purchase obligations for Awilco LNG to acquire the vessels in November 2017 and September 2018. These negotiations are expected to conclude in the second quarter of 2017.
Operating Results
The following table highlights certain financial information for Teekay LNG's two segments: the Liquefied Gas Segment and the Conventional Tanker Segment (please refer to the "Teekay LNG's Fleet" section of this release below and Appendices C through E for further details).
Liquefied Gas Segment
Income from vessel operations and cash flow from vessel operations from consolidated vessels increased for the three months ended March 31, 2017 compared to the same quarter of the prior year primarily due to the deliveries of the Creole Spirit and Oak Spirit MEGI LNG carrier newbuildings, which commenced their five-year charter contracts with Cheniere Energy in late-February 2016 and early-August 2016, respectively; the delivery of the Torben Spirit MEGI LNG carrier newbuilding, which commenced its 10-month plus one-year option charter contract with a major energy company in early-March 2017; and additional revenue recognized in the first quarter of 2017 relating to the accelerated dry docking of two LNG carriers, the costs of which are reimbursed by the charterer. These increases were partially offset by lower revenues from the Partnership's six LPG carriers on charter to Skaugen as a portion of the first quarter revenue was not recognized as a result of a temporary deferral agreement and the scheduled dry docking of an LNG carrier in the first quarter of 2017.
Equity income and cash flow from vessel operations from equity-accounted vessels decreased for the three months ended March 31, 2017 compared to the same quarter of the prior year primarily due to lower redeployment rates for certain LPG carriers and the sale of an older LPG carrier (net of the additions of three LPG carrier newbuildings which delivered between February to November 2016) in the Exmar LPG Joint Venture; a further deferral of a portion of the charter payments for the Marib Spirit and Arwa Spirit, effective August 2016; and lower spot rates earned on the redeployment of the Magellan Spirit and Methane Spirit after their short-term charter contracts ended in June and July 2016, respectively, in the Partnership's 52 percent-owned MALT LNG Joint Venture. Equity income was also impacted by unrealized gains on non-designated derivative instruments during the three months ended March 31, 2017, compared to unrealized losses in the same period of the prior year.
Conventional Tanker Segment
Income from vessel operations for the three months ended March 31, 2017 compared to the same quarter of the prior year increased primarily due to the loss on the sales of the Bermuda Spirit and Hamilton Spirit recorded in the first quarter of 2016, partially offset by lower revenues in the three months ended March 31, 2017 due to the sale of the Asian Spirit in March 2017 and the sales of the Bermuda Spirit and Hamilton Spirit in 2016. Cash flow from vessel operations also decreased due to these vessel sales.
Teekay LNG's Fleet
The following table summarizes the Partnership's fleet as of May 1, 2017:
Liquidity
As of March 31, 2017, the Partnership had total liquidity of $395.0 million (comprised of $181.2 million in cash and cash equivalents and $213.8 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, May 18, 2017 at 11:00 a.m. (ET) to discuss the results for the first quarter of 2017. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
An accompanying First Quarter Earnings Presentation will also be available at in advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fee-based charter contracts through its interests in 50 LNG carriers (including 18 newbuildings), 30 LPG/Multigas carriers (including four newbuildings) and five conventional tankers. The Partnership's interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in a regasification facility, which is currently under construction. Teekay LNG Partners L.P. is a publicly-traded master limited partnership (MLP) formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.
Teekay LNG Partners' common and preferred units trade on the New York Stock Exchange under the symbol "TGP" and "TGP PR A", respectively.
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 U.S. Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow from Vessel Operations, Adjusted Net Income, and Distributable Cash Flow, are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings, and may not be comparable to similar measures presented by other companies. The Partnership believes that certain investors use this information to evaluate the Partnership's financial performance, as does management.
Cash Flow from Vessel Operations
Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on a derivative charter contract. CFVO from Consolidated Vessels represents CFVO from vessels that are consolidated on the Partnership's financial statements. CFVO from Equity-Accounted Vessels represents the Partnership's proportionate share of CFVO from its equity-accounted vessels. The Partnership does not control its equity-accounted vessels and as a result, the Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the equity-accounted investments or distributed to the Partnership and other shareholders. In addition, the Partnership does not control the timing of such distributions to the Partnership and other shareholders. Consequently, readers are cautioned when using total CFVO as a liquidity measure as the amount contributed from CFVO from Equity-Accounted Vessels may not be available to the Company in the periods such CFVO is generated by the equity-accounted vessels. CFVO is a non-GAAP financial measure used by certain investors to measure the operational financial performance of companies. Please refer to Appendices D and E of this release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures reflected in the Partnership's consolidated financial statements.
Adjusted Net Income
Adjusted net income excludes from net income items of income or loss 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. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure reflected in the Partnership's consolidated financial statements.
Distributable Cash Flow
Distributable cash flow (DCF) represents 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, ineffectiveness for derivative instruments designated as hedges for accounting purposes, distributions relating to equity financing of newbuilding installments, adjustments for direct financing leases to a cash basis and foreign exchange related items, including the Partnership's proportionate share of such items in 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. Distributable cash flow is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating financial performance. Please refer to Appendix B of this release for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure reflected in the Partnership's consolidated financial statements.
Teekay LNG Partners L.P.
Consolidated Statements of Income (Loss)
(in thousands of U.S. Dollars, except units outstanding)
Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)
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)
Teekay LNG Partners L.P.
Appendix C - Supplemental Segment Information
(in thousands of U.S. Dollars)
Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Consolidated Vessels
(in thousands of U.S. Dollars)
Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Equity-Accounted Vessels
(in thousands of U.S. Dollars)
Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)
Forward Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the timing and cost of newbuilding vessel deliveries and the commencement of related contracts; the financing for Exmar LPG Joint Venture's mid-size LPG carrier newbuilding acquisition; the commencement of the charter contract for one of the MALT LNG Joint Venture vessels; the timing, amount and certainty of securing financing for the Partnership's committed growth projects, including the expected completion of the sale-leaseback financing transaction for two of the Partnership's 50 percent-owned ARC7 Ice-Class LNG carrier newbuildings for the Yamal LNG project; and the outcome of discussions with Awilco LNG. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: potential shipyard and project construction delays, newbuilding specification changes or cost overruns; changes in production of LNG or LPG, either generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification projects significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing vessels in the Teekay LNG fleet; the inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels; the Partnership's and the Partnership's joint ventures' ability to secure financing for its existing newbuildings and projects; the inability of the Partnership to negotiate acceptable terms with Awilco LNG; 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, 2016. The Partnership expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
Contacts:
For Investor Relations Enquiries:
Ryan Hamilton
+1 (604) 844-6654
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Datum: 18.05.2017 - 04:51 Uhr
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