Teekay LNG Partners Reports Third Quarter Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwire) -- 11/10/11 -- Teekay LNG Partners L.P. (NYSE: TGP) -
Highlights
Teekay GP LLC, 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 September 30, 2011. During the third quarter of 2011, the Partnership generated distributable cash flow(1) of $43.7 million, compared to $36.7 million in the same quarter of the previous year. The increase primarily reflects the incremental distributable cash flow resulting from the November 2010 acquisition of a 50 percent interest in two LNG carriers, the June 2011 acquisition of one Multigas carrier, the August 2011 acquisition of a 33 percent interest in one LNG carrier, the September 2011 acquisition of one LPG carrier, and fewer off-hire days relating to scheduled drydockings, partially offset by the sale of the Dania Spirit LPG carrier in November 2010.
On October 18, 2011, the Partnership declared a cash distribution of $0.63 per unit for the quarter ended September 30, 2011. The cash distribution is payable on November 14, 2011 to all unitholders of record on November 2, 2011.
The Maersk LNG Transaction
In October 2011, the Partnership announced that its joint venture with Marubeni Corporation (Marubeni) (the Teekay LNG Marubeni Joint Venture) agreed to acquire ownership interests in eight LNG carriers (the Maersk LNG Carriers) from Denmark-based global conglomerate, A.P. Moller-Maersk A/S, for an aggregate purchase price of approximately $1.402 billion. The Teekay LNG Marubeni Joint Venture, in which Teekay LNG and Marubeni have 52 and 48 percent economic interest, respectively, but share control, will acquire 100 percent interests in six LNG carriers and 26 percent interests in two LNG carriers. Five of the eight Maersk LNG Carriers to be acquired are currently operating under long-term, fixed-rate time-charter contracts, with an average remaining firm contract period of approximately 17 years, plus extension options. The other three vessels are currently operating under short-term, fixed-rate time-charters, one of which includes an extension option which if exercised would extend its charter by 18 years. In addition, the owner of the remaining interests in the two LNG carriers in which the Teekay LNG Marubeni Joint Venture will acquire 26 percent interests will have the right to require the Joint Venture to acquire up to all of such remaining interests. Since control of the Teekay LNG Marubeni Joint Venture will be shared jointly between Teekay LNG and Marubeni, the Partnership expects to account for the Teekay LNG Marubeni Joint Venture using the equity method. The transaction is expected to close by early 2012.
In early November 2011, the Partnership completed a public offering of 5.5 million common units (excluding the underwriters' overallotment option), for net proceeds of approximately $179.5 million, a portion of which is intended to be used to finance the Partnership's $146 million pro rata equity contribution for the Maersk LNG carriers.
"We believe the acquisition of the Maersk LNG fleet, through our joint venture with Marubeni, combined with the recent delivery of several newbuilding vessels, will result in significant distributable cash flow growth for the Partnership," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "Since the end of August, we have taken delivery of the first three of the four Angola LNG carriers, in which the Partnership owns a 33 percent interest, as well as the final two Skaugen LPG carriers. All of these vessels are now operating under long-term fixed-rate charters. In addition, given the strength of the current LNG shipping market, the Maersk LNG Carriers that are currently employed on short-term charters should provide potential upside to the Partnership to the extent these contracts are renewed at higher rates. As a result of these accretive fleet additions, management intends to recommend to the Teekay GP LLC Board of Directors an increase to the quarterly distribution of $0.045 per common unit, or 7 percent, subject to the completion of the Maersk LNG fleet acquisition. This increase would commence with the first quarter 2012 distribution to be paid in May 2012, which would be timed to match the expected completion of the Maersk LNG transaction."
Mr. Evensen added, "Our $180 million follow-on equity offering, which closed earlier this week, will more than cover the Partnership's pro rata equity contribution of approximately $146 million for the Maersk LNG transaction. With the additional proceeds adding to our existing liquidity, the Partnership remains financially well positioned with approximately $460 million of total liquidity on a pro forma basis, after giving effect to the Maersk LNG transaction and the acquisition of the third Angola LNG carrier and second Skaugen Multigas carrier in October 2011."
Teekay LNG's Fleet
The following table summarizes the Partnership's fleet as of November 1, 2011:
In September and October 2011, Teekay LNG took delivery of the final of three newbuilding LPG carriers and final of two newbuilding Multigas carriers, respectively, for a combined cost of approximately $88 million. Upon their respective deliveries, the vessels commenced 15-year fixed-rate charters to I.M. Skaugen ASA.
In addition, between late-August and late-October 2011, Teekay LNG acquired from Teekay Corporation, its 33 percent interest in the first three Angola newbuilding LNG carriers.
The remaining fourth Angola LNG carrier is expected to deliver in January 2012. The vessels are chartered for a period of 20 years at fixed-rates, with inflation adjustments, to the Angola LNG Project, which is being developed by subsidiaries of Chevron, Sonangol, BP, Total and ENI.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $29.7 million for the quarter ended September 30, 2011, compared to $23.9 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items which had the net effect of decreasing net income by $2.0 million and $63.9 million for the three months ended September 30, 2011 and 2010, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income (loss) attributable to the partners, on a GAAP basis, of $27.6 million and ($40.0) million for the three months ended September 30, 2011 and 2010, respectively.
During the nine months ended September 30, 2011, the Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $79.1 million, compared to $69.6 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items which had the net effect of decreasing net income by $29.6 million and $58.4 million for the nine months ended September 30, 2011 and 2010, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $49.5 million and $11.3 million for the nine months ended September 30, 2011 and 2010, respectively.
For accounting purposes, the Partnership is required to recognize the changes in the fair value of its derivative instruments on the consolidated statements of income (loss). This method of accounting does not affect the Partnership's cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized gains or losses on the consolidated statements of income (loss) as detailed in footnote 2 of the Summary Consolidated Statements of Income (Loss).
The Partnership's financial statements for prior periods include historical results of vessels acquired by the Partnership from Teekay, referred to herein as the Dropdown Predecessor, for the period when these vessels were owned and operated by Teekay.
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 above and Appendix C for further details).
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership's Liquefied Gas segment increased to $56.0 million in the third quarter of 2011 from $53.7 million in the same quarter of the prior year. This increase is primarily due the acquisition of a newbuilding Multigas carrier in mid-June 2011 and a newbuilding LPG carrier in mid-September 2011, partially offset by the sale of the Dania Spirit LPG carrier in November 2010.
Cash flow from vessel operations, as reported in the above table, does not include the Partnership's share of cash flow from vessel operations of $15.2 million for the three months ended September 30, 2011 from the Partnership's three equity-accounted joint ventures, RasGas 3, Exmar and Angola. The RasGas 3 Joint Venture is the Partnership's 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers. The Exmar Joint Venture is the Partnership's 50 percent ownership interest in the joint ventures with Exmar NV which, collectively, own two LNG carriers. The Angola Joint Venture is the Partnership's 33 percent ownership interest in three LNG carriers that delivered during August, September, and October 2011, respectively, with a fourth carrier scheduled to deliver in January 2012.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment increased to $14.4 million in the third quarter of 2011 from $12.9 million in the same quarter of the prior year. This increase is primarily due to a decrease in off-hire days relating to scheduled drydockings in the third quarter of 2011 compared to the same period in the prior year.
Liquidity
As of September 30, 2011, the Partnership had total liquidity of $477.7 million (comprised of $101.5 million in cash and cash equivalents and $376.2 million in undrawn credit facilities), compared to total liquidity of $551.1 million as of June 30, 2011. Total liquidity decreased primarily as a result of the Partnership's acquisition of the final Skaugen LPG carrier in September 2011 and the acquisition of 33 percent ownership interests in the two Angola LNG carriers that delivered during the third quarter of 2011.
Conference Call
The Partnership plans to host a conference call on November 11, 2011 at 11:00 a.m. (ET) to discuss the results for the third quarter of 2011. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
A supporting Third Quarter 2011 Earnings Presentation will also be available at in advance of the conference call start time.
The conference call will be recorded and available until Friday, November 18, 2011. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 1403031.
About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. 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 provides LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts with major energy and utility companies through its fleet of 21 LNG carriers (including one LNG regasification unit), five LPG/Multigas carriers and 11 conventional tankers. The Partnership's interest in these vessels ranges from 33 to 100 percent. One of the 21 LNG carriers is a newbuilding scheduled for delivery in 2012. In addition, through a joint venture with Marubeni Corporation, the Partnership has agreed to acquire ownership interests in eight LNG carriers and expects this transaction to close by early 2012.
Teekay LNG Partners' common units trade on the New York Stock Exchange under the symbol "TGP".
Set forth below is a reconciliation of the Partnership's unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net income (loss) attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership's financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
Description of Non-GAAP Financial Measure - Distributable Cash Flow (DCF)
Distributable cash flow represents net income adjusted for depreciation and amortization expense, non-cash items, estimated maintenance capital expenditures, gains and losses on vessel sales, unrealized gains and losses from derivatives, income from variable interest entity, deferred income taxes, and foreign exchange related items. 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 a partnership's ability to make quarterly cash distributions. Distributable cash flow is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net income.
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 Partnership's future growth opportunities; the timing and certainty of completion of the Teekay LNG Marubeni Joint Venture's pending acquisition of the ownership interests in eight LNG carriers from A.P. Moller-Maersk A/S, including the aggregate purchase price to be paid by the Teekay LNG Marubeni Joint Venture for the ownership interests, the debt financing associated with the Maersk LNG transaction, the expected increase in the Partnership's distributable cash flow, the potential upside relating to the charter renewals of the Maersk LNG Carriers currently operating under short-term contracts, and the timing of when the transaction is expected to close; the expected increase to the Partnership's distributable cash flow resulting from the recent delivery of the Angola LNG carriers and the Skaugen Multigas/LPG carriers; the timing of the delivery of the fourth Angola LNG carrier; the Partnership's financial position, including available liquidity; the accretive nature of proposed and recent transactions and the potential increase to the Partnership's quarterly cash distribution per common unit commencing for the first quarter of 2012; and the ability of the Partnership to pursue additional projects and acquisitions.
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; development of LNG and LPG projects; the inability of the Teekay LNG Marubeni Joint Venture to renew or replace the charter contracts; failure to satisfy the closing conditions for the acquisition of the Maersk LNG Carriers, including obtaining approvals from the charterers and relevant regulatory authorities; the potential election by owners of remaining interests in two of the LNG carriers, in which the Teekay LNG Marubeni Joint Venture is acquiring 26 percent interest, to exercise their rights to require the Teekay LNG Marubeni Joint Venture to acquire up to all of such remaining interests, or exercise their rights to acquire from A.P. Moller-Maersk the remaining 26 percent interest they do not currently own; less than anticipated revenues or higher than anticipated costs or capital requirements; changes in trading patterns 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 and inability of the Partnership to renew or replace long-term contracts; shipyard production delays which would change the expected timing and cost of the remaining newbuilding vessel delivery; the Partnership's ability to raise financing to purchase additional vessels or to pursue other projects; changes to the amount or proportion of revenues, expenses, or debt service costs denominated in foreign currencies; and other factors discussed in Teekay LNG Partners' filings from time to time with the SEC, including its Report on Form 20-F/A for the fiscal year ended December 31, 2010. 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:
Teekay LNG Partners L.P.
Kent Alekson
Investor Relations Enquiries
+1 (604) 609-6442
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Datum: 10.11.2011 - 14:12 Uhr
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