Highlights
- GAAP net income attributable to the partners and preferred unitholders of $40.3 million and GAAP net income per common unit of $0.38 in the third quarter of 2020.
- Adjusted net income(1) attributable to the partners and preferred unitholders of $58.9 million and adjusted net income per common unit of $0.59 in the third quarter of 2020 (excluding other items listed in Appendix A to this release), down slightly from the previous quarter due to a higher than normal number of drydocks.
- Total adjusted EBITDA(1) of $186.9 million in the third quarter of 2020.
- In October 2020, extended charter contract to early-2022 for 52 percent-owned LNG carrier, the Marib Spirit.
- The Partnership's LNG fleet now 100% fixed for 2020 and 96% fixed for 2021.
- Fixed-rate charters continue to perform as expected; reaffirming 2020 financial guidance.
HAMILTON, Bermuda, Nov. 12, 2020 (GLOBE NEWSWIRE) -- Teekay GP L.L.C., the general partner (the General Partner) of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership’s results for the quarter ended September 30, 2020.
Consolidated Financial Summary
| Three Months Ended | |||
| September 30, 2020 | June 30, 2020 | September 30, 2019 | |
| (in thousands of U.S. Dollars, except per unit data) | (unaudited) | (unaudited) | (unaudited) |
| GAAP FINANCIAL COMPARISON | |||
| Voyage revenues | 148,935 | 148,205 | 149,655 |
| Income from vessel operations | 69,597 | 69,589 | 71,611 |
| Equity income | 24,346 | 32,155 | 21,296 |
| Net income attributable to the partners and preferred unitholders | 40,275 | 44,934 | 47,368 |
| Limited partners’ interest in net income per common unit | 0.38 | 0.46 | 0.51 |
| NON-GAAP FINANCIAL COMPARISON | |||
| Total adjusted revenues(1) | 249,540 | 254,001 | 234,633 |
| Total adjusted EBITDA(1) | 186,902 | 192,340 | 180,216 |
| Distributable cash flow (DCF)(1) | 79,168 | 83,170 | 70,925 |
| Adjusted net income attributable to the partners and preferred unitholders(1) | 58,933 | 62,643 | 50,514 |
| Limited partners’ interest in adjusted net income per common unit | 0.59 | 0.67 | 0.55 |
| (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). |
Third Quarter of 2020 Compared to Second Quarter of 2020
GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders were lower for the three months ended September 30, 2020, compared to the three months ended June 30, 2020, primarily due to more scheduled drydockings and higher planned repairs and maintenance expenses during the third quarter of 2020, as well as lower earnings from the redeployment of three, 52 percent-owned liquefied natural gas (LNG) carriers at lower charter rates, one of which was rechartered at a higher rate in October 2020. These decreases were partially offset by lower net interest expense and a decrease in general and administrative expenses.
In addition, GAAP net income was negatively impacted by unrealized credit loss provisions related to the adoption of the new accounting standard (ASC 326) at the beginning of 2020 as a result of a decline in the estimated charter-free values of certain types of LNG carriers. This decrease to GAAP net income was partially offset by unrealized gains on non-designated derivative instruments in the third quarter of 2020, compared to unrealized losses in the second quarter of 2020, and a decrease in unrealized foreign currency exchange losses.
Third Quarter of 2020 Compared to Third 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 September 30, 2020, compared to the same quarter of the prior year, primarily due to: additional earnings from the delivery of three 50 percent-owned LNG carrier newbuildings in late-2019 and the commencement of terminal use payments to the Partnership’s 30 percent-owned Bahrain LNG Terminal; fewer off-hire days and lower net interest expense; partially offset by lower earnings as a result of the sale of non-core vessels and lower charter rates earned by three 52 percent-owned LNG carriers.
In addition, GAAP net income was negatively impacted by increases in unrealized credit loss provisions related to the adoption of the new accounting standard (ASC 326) at the beginning of 2020 as a result of a decline in the estimated charter-free values of certain types of LNG carriers; partially offset by unrealized gains on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the third quarter of 2020 compared to losses in the third quarter of 2019.
CEO Commentary
“We generated strong earnings and cash flow again this quarter, despite a higher than usual number of scheduled drydockings,” commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. “We expect our earnings and cash flows to increase in the fourth quarter of 2020 and we continue to be on track to meeting the 2020 financial guidance we provided earlier this year.”
“I’m also pleased to report that we are delivering on a number of our strategic priorities,” continued Mr. Kremin. “During the third quarter of 2020, Teekay LNG reduced its total net debt(2) by nearly $95 million, or 8 percent on an annualized basis, and reduced total net interest expense(2) by over $6 million, or nearly 9 percent, compared with the second quarter of 2020. Importantly, we expect this trend of debt reduction and declining interest expense to continue while simultaneously paying an annual distribution of $1.00 per common unit, which is well-covered by our stable earnings and cash flows. In addition, during the recent market surge in demand for LNG carriers, we locked-in the 52 percent-owned Marib Spirit on a new fixed-rate contract to early-2022 at an improved rate. We approach the end of the year with the confidence that we have already secured fixed-rate contracts for our LNG fleet covering 96 percent of 2021, providing the Partnership with high fleet utilization and stable cash flows.”
Mr. Kremin concluded, “I want to thank our seafarers and onshore colleagues for their continued dedication to providing safe and uninterrupted service to our customers during this COVID-19 pandemic. I am pleased to report that, with the reopening of many jurisdictions during the summer months, we were able to successfully transition nearly all of our crew members across the fleet.”
| (1) | These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under United States generally accepted accounting principles (GAAP). |
| (2) | Includes Teekay LNG’s proportionate share of net debt and net interest expense in its equity-accounted joint ventures. Total net interest expense includes realized losses on non-designated derivative instruments at the joint venture level of $3.1 million and $2.3 million for the three months ended September 30, 2020 and June 30, 2020, respectively. |
Summary of Recent Events
Chartering Activities
In October 2020, the charterer of the 52 percent-owned 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.
Financing Activities
In August 2020, Teekay LNG issued the equivalent of $112 million of unsecured, 5-year notes in the Norwegian Bond market at an all-in fixed coupon rate of 5.74 percent. The net proceeds from the bond issuance were used to repay drawings on the Partnership's revolving credit facilities and as a result, the new bond issuance did not increase the Partnership's financial leverage.
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 | |||||||||||||||
| September 30, 2020 | September 30, 2019 | ||||||||||||||
| (in thousands of U.S. Dollars) | (unaudited) | (unaudited) | |||||||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | ||||||||
| GAAP FINANCIAL COMPARISON | |||||||||||||||
| Voyage revenues | 138,953 | 9,982 | — | 148,935 | 137,212 | 10,846 | 1,597 | 149,655 | |||||||
| Income (loss) from vessel operations | 70,313 | (716 | ) | — | 69,597 | 73,236 | (1,124 | ) | (501 | ) | 71,611 | ||||
| Equity income | 22,674 | 1,672 | — | 24,346 | 20,262 | 1,034 | — | 21,296 | |||||||
| NON-GAAP FINANCIAL COMPARISON | |||||||||||||||
| Consolidated adjusted EBITDA(i) | 104,473 | 1,227 | — | 105,700 | 109,556 | 867 | 292 | 110,715 | |||||||
| Adjusted EBITDA from equity-accounted vessels(i) | 71,683 | 9,519 | — | 81,202 | 59,646 | 9,855 | — | 69,501 | |||||||
| Total adjusted EBITDA(i) | 176,156 | 10,746 | — | 186,902 | 169,202 | 10,722 | 292 | 180,216 | |||||||
| (i) | These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP. |
Liquefied Natural Gas Segment
Income from vessel operations and consolidated adjusted EBITDA(1) for the liquefied natural gas segment for the three months ended September 30, 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 in January 2020; and an increase in vessel operating expenses due to timing of repairs and maintenance for certain of the Partnership's LNG carriers during the third quarter of 2020. These decreases were partially offset by fewer off-hire days in the third quarter of 2020 relating to scheduled dry dockings for certain of the Partnership's LNG carriers.
Equity income and adjusted EBITDA from equity-accounted vessels(1) for the liquefied natural gas segment for the three months ended September 30, 2020, compared to the same quarter of the prior year, increased primarily due to the deliveries of three ARC7 LNG carrier newbuildings between August and December 2019 to the Yamal LNG Joint Venture and commencement of terminal use payments in January 2020 to the Bahrain LNG Joint Venture. These increases were partially offset by lower earnings from the MALT Joint Venture as a result of lower charter rates earned upon redeployment of the Arwa Spirit and Marib Spirit during the second quarter of 2020 and the Methane Spirit in July 2020, and the recognition of drydock hire revenue for the Meridian Spirit in the third quarter of 2019. In addition, GAAP equity income was negatively impacted by increases in unrealized credit loss provisions in the third quarter of 2020 related to the adoption of the new accounting standard (ASC 326) at the beginning of 2020 as a result of a decline in the estimated charter-free values of certain types of LNG carriers; partially offset by unrealized gains on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the third quarter of 2020 compared to losses in the third quarter of 2019.
Liquefied Petroleum Gas Segment
Loss from vessel operations, consolidated adjusted EBITDA(1) and equity income and adjusted EBITDA from equity-accounted vessels(1) for the liquefied petroleum gas (LPG) segment for the three months ended September 30, 2020 were comparable to the same quarter of the prior year.
Conventional Tanker Segment
There were no results from vessel operations for the conventional tanker segment for the three months ended September 30, 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 November 1, 2020. 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 September 30, 2020, the Partnership had total liquidity of $430.8 million (comprised of $201.0 million in cash and cash equivalents and $229.8 million in undrawn credit facilities) compared to $306.3 million as of June 30, 2020.
Conference Call
The Partnership plans to host a conference call on Thursday, November 12, 2020 at 1:00 p.m. (ET) to discuss the results for the third quarter of 2020. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
- By dialing 1 (800) 367-2403 or 1 (647) 490-5367, if outside North America, and quoting conference ID code 6710573.
- 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 Third Quarter of 2020 Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG and LPG services primarily under long-term, fee-based charter contracts through its interests in 47 LNG carriers, 23 mid-size LPG carriers, and seven multi-gas carriers. The Partnership's ownership interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in an LNG regasification terminal. Teekay LNG Partners is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.
Teekay LNG Partners’ common units and preferred units trade on the New York Stock Exchange under the symbols “TGP”, “TGP PR A” and “TGP PR B”, respectively.
For Investor Relations enquiries contact:
Ryan Hamilton
Tel: +1 (604) 609-2963
Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the SEC. These non-GAAP financial measures which include Adjusted Net Income Attributable to the Partners and Preferred Unitholders, Distributable Cash Flow, Total Adjusted Revenues and Adjusted EBITDA, are intended to provide additional information and should not be considered substitutes for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and may not be comparable to similar measures presented by other companies. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.
Non-GAAP Financial Measures
Total Adjusted Revenues represents the Partnership's voyage revenues from its consolidated vessels, as shown in the Partnership's Consolidated Statements of Income, and its proportionate ownership percentage of the voyage revenues from its equity-accounted joint ventures, as shown in Appendix E of this release, less the Partnership's proportionate share of voyage revenues earned directly from its equity-accounted joint ventures. Please refer to Appendix C and E of this release for a reconciliation of this non-GAAP financial measure to voyage revenues and equity income, the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements. The Partnership's equity-accounted joint ventures are generally required to distribute all available cash to their owners. However, the timing and amount of dividends from each of the Partnership's equity-accounted joint ventures may not necessarily coincide with the operating cash flow generated from each respective equity-accounted joint venture. The timing and amount of dividends distributed by the Partnership's equity-accounted joint ventures are affected by the timing and amounts of debt repayments in the joint ventures, capital requirements of the joint ventures, as well as any cash reserves maintained in the joint ventures for operations, capital expenditures and/or as required under financing agreements.
Adjusted EBITDA represents net 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, 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, 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 | Nine Months Ended | ||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Voyage revenues | 148,935 | 148,205 | 149,655 | 437,027 | 452,459 | ||||||||||
| Voyage expenses | (3,950 | ) | (5,329 | ) | (4,961 | ) | (11,596 | ) | (16,759 | ) | |||||
| Vessel operating expenses | (30,642 | ) | (28,407 | ) | (27,321 | ) | (85,153 | ) | (80,879 | ) | |||||
| Time-charter hire expense | (5,980 | ) | (5,368 | ) | (5,336 | ) | (17,270 | ) | (14,007 | ) | |||||
| Depreciation and amortization | (32,601 | ) | (31,629 | ) | (34,248 | ) | (96,869 | ) | (103,712 | ) | |||||
| General and administrative expenses | (6,165 | ) | (7,883 | ) | (5,393 | ) | (20,215 | ) | (17,692 | ) | |||||
| Write-down of vessels(1) | — | — | (785 | ) | (45,000 | ) | (785 | ) | |||||||
| Restructuring charges(2) | — | — | — | — | (2,976 | ) | |||||||||
| Income from vessel operations | 69,597 | 69,589 | 71,611 | 160,924 | 215,649 | ||||||||||
| Equity income(3) | 24,346 | 32,155 | 21,296 | 56,874 | 28,612 | ||||||||||
| Interest expense | (30,528 | ) | (35,143 | ) | (40,574 | ) | (102,375 | ) | (123,809 | ) | |||||
| Interest income | 1,406 | 1,697 | 1,025 | 5,473 | 3,063 | ||||||||||
| Realized and unrealized loss on non-designated derivative instruments(4) | (1,327 | ) | (8,516 | ) | (3,270 | ) | (30,314 | ) | (17,713 | ) | |||||
| Foreign currency exchange (loss) gain(5) | (7,853 | ) | (11,624 | ) | 2,879 | (14,738 | ) | (5,095 | ) | ||||||
| Other expense(6) | (14,149 | ) | (679 | ) | (1,828 | ) | (15,189 | ) | (2,064 | ) | |||||
| Net income before income tax expense (recovery) | 41,492 | 47,479 | 51,139 | 60,655 | 98,643 | ||||||||||
| Income tax expense (recovery) | (1,420 | ) | 1,804 | (788 | ) | (2,128 | ) | (5,115 | ) | ||||||
| Net income | 40,072 | 49,283 | 50,351 | 58,527 | 93,528 | ||||||||||
| Non-controlling interest in net (loss) income | (203 | ) | 4,349 | 2,983 | 6,312 | 8,108 | |||||||||
| Preferred unitholders' interest in net income | 6,425 | 6,425 | 6,426 | 19,275 | 19,276 | ||||||||||
| General partner's interest in net income | 595 | 713 | 820 | 519 | 1,324 | ||||||||||
| Limited partners’ interest in net income | 33,255 | 37,796 | 40,122 | 32,421 | 64,820 | ||||||||||
| Limited partners' interest in net income per common unit: | |||||||||||||||
| • Basic | 0.38 | 0.46 | 0.51 | 0.40 | 0.83 | ||||||||||
| • Diluted | 0.38 | 0.46 | 0.51 | 0.39 | 0.83 | ||||||||||
| Weighted-average number of common units outstanding: | |||||||||||||||
| • Basic | 86,951,234 | 82,197,665 | 78,012,514 | 82,010,753 | 78,402,239 | ||||||||||
| • Diluted | 87,041,046 | 82,262,235 | 78,106,770 | 82,109,826 | 78,488,331 | ||||||||||
| Total number of common units outstanding at end of period | 86,951,234 | 86,927,558 | 77,509,411 | 86,951,234 | 77,509,411 | ||||||||||
| (1) | In the first quarter of 2020, the Partnership wrote-down six wholly-owned multi-gas carriers to their estimated fair values. The total impairment charge of $45.0 million related to the six multi-gas carriers is included in write-down of vessels for the nine months ended September 30, 2020. In September 2019, the Partnership recorded a write-down of $0.8 million for the three and nine months ended September 30, 2019 on the Alexander Spirit, which was sold in October 2019. |
| (2) | In January 2019, the Toledo Spirit conventional tanker was sold and as a result of this sale, the Partnership recorded restructuring charges of $3.0 million for the nine months ended September 30, 2019. |
| (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 | Nine Months Ended | ||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |
| 2020 | 2020 | 2019 | 2020 | 2019 | |
| Equity income | 24,346 | 32,155 | 21,296 | 56,874 | 28,612 |
| Proportionate share of unrealized (gain) loss on non-designated interest rate swaps | (2,680) | 3,806 | 5,150 | 23,330 | 14,612 |
| Proportionate share of unrealized credit loss provisions(a) | 7,099 | (423) | — | 15,656 | — |
| Proportionate share of other items | 1,167 | 362 | (77) | 990 | 1,392 |
| Equity income adjusted for items in Appendix A | 29,932 | 35,900 | 26,369 | 96,850 | 44,616 |
(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 | Nine Months Ended | ||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |
| 2020 | 2020 | 2019 | 2020 | 2019 | |
| Realized losses relating to: | |||||
| Interest rate swap agreements | (4,947) | (3,662) | (2,621) | (11,520) | (7,398) |
| Foreign currency forward contracts | — | — | — | (241) | — |
| (4,947) | (3,662) | (2,621) | (11,761) | (7,398) | |
| Unrealized gains (losses) relating to: | |||||
| Interest rate swap agreements | 3,620 | (4,854) | (215) | (18,755) | (9,740) |
| Foreign currency forward contracts | — | — | (434) | 202 | (535) |
| Toledo Spirit time-charter derivative | — | — | — | — | (40) |
| 3,620 | (4,854) | (649) | (18,553) | (10,315) | |
| Total realized and unrealized losses on non-designated derivative instruments | (1,327) | (8,516) | (3,270) | (30,314) | (17,713) |
| (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) gain includes realized (losses) gains relating to the amounts the Partnership paid to settle the Partnership’s non-designated cross currency swaps that were entered into as economic hedges in relation to the Partnership’s Norwegian Krone (NOK) denominated unsecured bonds. Foreign currency exchange gain (loss) also includes unrealized 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 | Nine Months Ended | ||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |
| 2020 | 2020 | 2019 | 2020 | 2019 | |
| Realized losses on cross-currency swaps | (1,669) | (1,430) | (1,431) | (4,916) | (3,952) |
| Realized losses on cross-currency swaps maturity | — | (33,844) | — | (33,844) | — |
| Realized gains on repurchase of NOK bonds | — | 33,844 | — | 33,844 | — |
| Unrealized gains (losses) on cross currency swaps | 1,490 | 45,881 | (23,759) | (2,169) | (25,818) |
| Unrealized (losses) gains on revaluation of NOK bonds | (1,836) | (53,794) | 22,167 | (1,657) | 17,687 |
| (6) | Includes unrealized credit loss provisions of $14.4 million and $14.6 million for the three and nine months ended September 30, 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 September 30, | As at June 30, | As at December 31, | ||||
| 2020 | 2020 | 2019 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| ASSETS | ||||||
| Current | ||||||
| Cash and cash equivalents | 201,036 | 226,328 | 160,221 | |||
| Restricted cash – current | 11,224 | 11,544 | 53,689 | |||
| Accounts receivable | 6,753 | 9,694 | 13,460 | |||
| Prepaid expenses | 9,706 | 10,891 | 6,796 | |||
| Current portion of derivative assets | — | — | 355 | |||
| Current portion of net investments in direct financing and sales-type leases, net | 13,762 | 14,014 | 273,986 | |||
| Advances to affiliates | 1,953 | 3,025 | 5,143 | |||
| Other current assets | 237 | 237 | 238 | |||
| Total current assets | 244,671 | 275,733 | 513,888 | |||
| Restricted cash – long-term | 42,577 | 54,603 | 39,381 | |||
| Vessels and equipment | ||||||
| At cost, less accumulated depreciation | 1,244,123 | 1,256,434 | 1,335,397 | |||
| Vessels related to finance leases, at cost, less accumulated depreciation | 1,664,059 | 1,675,168 | 1,691,945 | |||
| Operating lease right-of-use asset | 24,179 | 27,568 | 34,157 | |||
| Total vessels and equipment | 2,932,361 | 2,959,170 | 3,061,499 | |||
| Investments in and advances, net to equity-accounted joint ventures | 1,092,724 | 1,082,346 | 1,155,316 | |||
| Net investments in direct financing and sales-type leases, net | 508,561 | 525,812 | 544,823 | |||
| Other assets | 20,025 | 17,633 | 14,738 | |||
| Derivative assets | — | — | 1,834 | |||
| Intangible assets – net | 36,724 | 38,938 | 43,366 | |||
| Goodwill | 34,841 | 34,841 | 34,841 | |||
| Total assets | 4,912,484 | 4,989,076 | 5,409,686 | |||
| LIABILITIES AND EQUITY | ||||||
| Current | ||||||
| Accounts payable | 2,319 | 4,270 | 5,094 | |||
| Accrued liabilities | 84,975 | 79,832 | 76,752 | |||
| Unearned revenue | 32,685 | 30,185 | 28,759 | |||
| Current portion of long-term debt | 291,720 | 295,282 | 393,065 | |||
| Current obligations related to finance leases | 71,441 | 70,955 | 69,982 | |||
| Current portion of operating lease liabilities | 13,841 | 13,681 | 13,407 | |||
| Current portion of derivative liabilities | 35,616 | 34,997 | 38,458 | |||
| Advances from affiliates | 13,970 | 18,271 | 7,003 | |||
| Total current liabilities | 546,567 | 547,473 | 632,520 | |||
| Long-term debt | 1,201,909 | 1,263,202 | 1,438,331 | |||
| Long-term obligations related to finance leases | 1,287,044 | 1,305,056 | 1,340,922 | |||
| Long-term operating lease liabilities | 10,338 | 13,887 | 20,750 | |||
| Derivative liabilities | 81,991 | 88,336 | 51,006 | |||
| Other long-term liabilities | 53,088 | 52,635 | 49,182 | |||
| Total liabilities | 3,180,937 | 3,270,589 | 3,532,711 | |||
| Equity | ||||||
| Limited partners – common units | 1,459,599 | 1,447,690 | 1,543,598 | |||
| Limited partners – preferred units | 285,159 | 285,159 | 285,159 | |||
| General partner | 46,081 | 45,868 | 50,241 | |||
| Accumulated other comprehensive loss | (111,967 | ) | (116,313 | ) | (57,312 | ) |
| Partners' equity | 1,678,872 | 1,662,404 | 1,821,686 | |||
| Non-controlling interest | 52,675 | 56,083 | 55,289 | |||
| Total equity | 1,731,547 | 1,718,487 | 1,876,975 | |||
| Total liabilities and total equity | 4,912,484 | 4,989,076 | 5,409,686 | |||
Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
| Nine Months Ended | ||||
| September 30, | September 30, | |||
| 2020 | 2019 | |||
| (unaudited) | (unaudited) | |||
| Cash and cash equivalents provided by (used for) | ||||
| OPERATING ACTIVITIES | ||||
| Net income | 58,527 | 93,528 | ||
| Non-cash and non-operating items: | ||||
| Unrealized loss on non-designated derivative instruments | 18,553 | 10,315 | ||
| Depreciation and amortization | 96,869 | 103,712 | ||
| Write-down of vessels | 45,000 | 785 | ||
| Unrealized foreign currency exchange loss (gain) including the effect of settlement of cross currency swaps upon maturity | 10,697 | (1,213 | ) | |
| Equity income, net of distributions received $32,297 (2019 – $25,374) | (24,577 | ) | (3,238 | ) |
| Amortization of deferred financing issuance costs included in interest expense | 4,401 | 6,722 | ||
| Change in unrealized credit loss provisions included in other expense | 14,557 | — | ||
| Other non-cash items | 3,595 | 6,173 | ||
| Change in non-cash operating assets and liabilities: | ||||
| Receipts from direct financing and sales-type leases | 270,973 | 9,242 | ||
| Expenditures for dry docking | (1,984 | ) | (8,836 | ) |
| Other non-cash operating assets and liabilities | 15,960 | (15,227 | ) | |
| Net operating cash flow | 512,571 | 201,963 | ||
| FINANCING ACTIVITIES | ||||
| Proceeds from issuance of long-term debt | 561,127 | 158,924 | ||
| Scheduled repayments of long-term debt and settlement of related swaps | (220,875 | ) | (95,730 | ) |
| Prepayments of long-term debt | (687,061 | ) | (183,787 | ) |
| Financing issuance costs | (5,111 | ) | (989 | ) |
| Proceeds from financing related to sales and leaseback of vessels | — | 317,806 | ||
| Scheduled repayments of obligations related to finance leases | (52,419 | ) | (54,484 | ) |
| Extinguishment of obligations related to finance leases | — | (111,617 | ) | |
| Repurchase of common units | (15,635 | ) | (25,729 | ) |
| Cash distributions paid | (75,845 | ) | (60,926 | ) |
| Dividends paid to non-controlling interests | (3,390 | ) | (90 | ) |
| Acquisition of non-controlling interest in certain of the Partnership's subsidiaries | (2,219 | ) | — | |
| Net financing cash flow | (501,428 | ) | (56,622 | ) |
| INVESTING ACTIVITIES | ||||
| Expenditures for vessels and equipment | (9,597 | ) | (91,503 | ) |
| Capital contributions and advances to equity-accounted joint ventures | — | (42,171 | ) | |
| Net investing cash flow | (9,597 | ) | (133,674 | ) |
| Increase in cash, cash equivalents and restricted cash | 1,546 | 11,667 | ||
| Cash, cash equivalents and restricted cash, beginning of the period | 253,291 | 222,864 | ||
| Cash, cash equivalents and restricted cash, end of the period | 254,837 | 234,531 | ||
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 | |||||||||
| September 30, | June 30, | September 30, | |||||||
| 2020 | 2020 | 2019 | |||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||
| Net income – GAAP basis | 40,072 | 49,283 | 50,351 | ||||||
| Less: net loss (income) attributable to non-controlling interests | 203 | (4,349 | ) | (2,983 | ) | ||||
| Net income attributable to the partners and preferred unitholders | 40,275 | 44,934 | 47,368 | ||||||
| Add (subtract) specific items affecting net income: | |||||||||
| Write-down of vessels(1) | — | — | 785 | ||||||
| Foreign currency exchange losses (gains)(2) | 6,184 | 10,194 | (4,607 | ) | |||||
| Unrealized credit loss provisions, unrealized gains and losses on non-designated derivative instruments and other items from equity-accounted investees(3) | 5,586 | 3,745 | 5,073 | ||||||
| Unrealized (gains) losses on non-designated derivative instruments(4) | (3,620 | ) | 4,854 | 649 | |||||
| Unrealized credit loss provisions and other items(5) | 14,397 | (1,619 | ) | 1,417 | |||||
| Non-controlling interests’ share of items above(6) | (3,889 | ) | 535 | (171 | ) | ||||
| Total adjustments | 18,658 | 17,709 | 3,146 | ||||||
| Adjusted net income attributable to the partners and preferred unitholders | 58,933 | 62,643 | 50,514 | ||||||
| Preferred unitholders' interest in adjusted net income | 6,425 | 6,425 | 6,426 | ||||||
| General partner's interest in adjusted net income | 923 | 1,044 | 882 | ||||||
| Limited partners’ interest in adjusted net income | 51,585 | 55,174 | 43,206 | ||||||
| Limited partners’ interest in adjusted net income per common unit, basic | 0.59 | 0.67 | 0.55 | ||||||
| Weighted-average number of common units outstanding, basic | 86,951,234 | 82,197,665 | 78,012,514 | ||||||
| (1) | See Note 1 to the Consolidated Statements of Income included in this release for further details. |
| (2) | Foreign currency exchange losses (gains) primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized losses 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. |
| (3) | Reflects the proportionate share of 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. |
| (4) | Reflects the unrealized 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. |
| (5) | For the three months ended September 30, 2020, includes unrealized credit loss provisions of $14.4 million related to the Partnership's adoption of ASC 326 effective January 1, 2020. |
| (6) | 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 | |||||||
| September 30, | June 30, | September 30, | |||||
| 2020 | 2020 | 2019 | |||||
| (unaudited) | (unaudited) | (unaudited) | |||||
| Net income | 40,072 | 49,283 | 50,351 | ||||
| Add: | |||||||
| Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1) | 38,065 | 42,725 | 34,319 | ||||
| Depreciation and amortization | 32,601 | 31,629 | 34,248 | ||||
| Unrealized credit loss provisions | 14,397 | 260 | — | ||||
| Foreign currency exchange loss (gain) | 6,184 | 10,194 | (4,607 | ) | |||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,502 | 3,392 | 4,071 | ||||
| Write-down of vessels | — | — | 785 | ||||
| Distributions relating to equity financing of newbuildings | — | — | 1,012 | ||||
| Subtract: | |||||||
| Deferred income tax and other non-cash items | (709 | ) | 271 | 801 | |||
| Unrealized (gain) loss on non-designated derivative instruments | (3,620 | ) | 4,854 | 649 | |||
| Distributions relating to preferred units | (6,425 | ) | (6,425 | ) | (6,426 | ) | |
| Estimated maintenance capital expenditures | (14,683 | ) | (14,513 | ) | (17,562 | ) | |
| Equity income | (24,346 | ) | (32,155 | ) | (21,296 | ) | |
| Distributable Cash Flow before non-controlling interest | 85,038 | 89,515 | 76,345 | ||||
| Non-controlling interests’ share of DCF before estimated maintenance capital expenditures | (5,870 | ) | (6,345 | ) | (5,420 | ) | |
| Distributable Cash Flow | 79,168 | 83,170 | 70,925 | ||||
| Amount of cash distributions attributable to the General Partner | (389 | ) | (411 | ) | (301 | ) | |
| Limited partners' Distributable Cash Flow | 78,779 | 82,759 | 70,624 | ||||
| Weighted-average number of common units outstanding, basic | 86,951,234 | 82,197,665 | 78,012,514 | ||||
| Distributable Cash Flow per limited partner common unit | 0.91 | 1.01 | 0.91 | ||||
| (1) | The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $15.4 million, $15.2 million and $11.8 million for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively. |
Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted Revenues and Total Adjusted EBITDA
(in thousands of U.S. Dollars)
| Three Months Ended | ||||||
| September 30, | June 30, | September 30, | ||||
| 2020 | 2020 | 2019 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| Voyage revenues | 148,935 | 148,205 | 149,655 | |||
| Partnership's proportionate share of voyage revenues from its equity-accounted joint ventures (See Appendix E) | 106,626 | 111,365 | 90,479 | |||
| Less the Partnership’s proportionate share of voyage revenues earned directly from its equity-accounted joint ventures | (6,021 | ) | (5,569 | ) | (5,501 | ) |
| Total adjusted revenues | 249,540 | 254,001 | 234,633 | |||
| Three Months Ended | ||||||
| September 30, | June 30, | September 30, | ||||
| 2020 | 2020 | 2019 | ||||
| (unaudited) | (unaudited) | (unaudited) | ||||
| Net income | 40,072 | 49,283 | 50,351 | |||
| Depreciation and amortization | 32,601 | 31,629 | 34,248 | |||
| Interest expense, net of interest income | 29,122 | 33,446 | 39,549 | |||
| Income tax expense (recovery) | 1,420 | (1,804 | ) | 788 | ||
| EBITDA | 103,215 | 112,554 | 124,936 | |||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||
| Foreign currency exchange loss (gain) | 7,853 | 11,624 | (2,879 | ) | ||
| Other expense | 14,149 | 679 | 1,828 | |||
| Equity income | (24,346 | ) | (32,155 | ) | (21,296 | ) |
| Realized and unrealized loss on non-designated derivative instruments | 1,327 | 8,516 | 3,270 | |||
| Write-down of vessels | — | — | 785 | |||
| Direct finance and sale-type lease payments received in excess of revenue recognized and other adjustments | 3,502 | 3,392 | 4,071 | |||
| Consolidated adjusted EBITDA | 105,700 | 104,610 | 110,715 | |||
| Adjusted EBITDA from equity-accounted vessels (See Appendix E) | 81,202 | 87,730 | 69,501 | |||
| Total adjusted EBITDA | 186,902 | 192,340 | 180,216 | |||
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 September 30, 2020 | ||||||||
| (unaudited) | ||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||
| Voyage revenues | 138,953 | 9,982 | — | 148,935 | ||||
| Voyage expenses | (427 | ) | (3,523 | ) | — | (3,950 | ) | |
| Vessel operating expenses | (25,871 | ) | (4,771 | ) | — | (30,642 | ) | |
| Time-charter hire expenses | (5,980 | ) | — | — | (5,980 | ) | ||
| Depreciation and amortization | (30,658 | ) | (1,943 | ) | — | (32,601 | ) | |
| General and administrative expenses | (5,704 | ) | (461 | ) | — | (6,165 | ) | |
| Income (loss) from vessel operations | 70,313 | (716 | ) | — | 69,597 | |||
| Depreciation and amortization | 30,658 | 1,943 | — | 32,601 | ||||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 3,502 | — | — | 3,502 | ||||
| Consolidated adjusted EBITDA | 104,473 | 1,227 | — | 105,700 | ||||
| Three Months Ended September 30, 2019 | ||||||||
| (unaudited) | ||||||||
| Liquefied Natural Gas Segment | Liquefied Petroleum Gas Segment | Conventional Tanker Segment | Total | |||||
| Voyage revenues | 137,212 | 10,846 | 1,597 | 149,655 | ||||
| Voyage recoveries (expenses) | 286 | (4,778 | ) | (469 | ) | (4,961 | ) | |
| Vessel operating expenses | (21,890 | ) | (4,804 | ) | (627 | ) | (27,321 | ) |
| Time-charter hire expenses | (5,336 | ) | — | — | (5,336 | ) | ||
| Depreciation and amortization | (32,249 | ) | (1,991 | ) | (8 | ) | (34,248 | ) |
| General and administrative expenses | (4,787 | ) | (397 | ) | (209 | ) | (5,393 | ) |
| Write-down of vessels | — | — | (785 | ) | (785 | ) | ||
| Income (loss) from vessel operations | 73,236 | (1,124 | ) | (501 | ) | 71,611 | ||
| Depreciation and amortization | 32,249 | 1,991 | 8 | 34,248 | ||||
| Write-down of vessels | — | — | 785 | 785 | ||||
| Direct finance and sales-type lease payments received in excess of revenue recognized and other adjustments | 4,071 | — | — | 4,071 | ||||
| Consolidated adjusted EBITDA | 109,556 | 867 | 292 | 110,715 | ||||
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 | ||||||||
| September 30, 2020 | September 30, 2019 | |||||||
| (unaudited) | (unaudited) | |||||||
| At | Partnership's | At | Partnership's | |||||
| 100% | Portion(1) | 100% | Portion(1) | |||||
| Voyage revenues | 246,488 | 106,626 | 205,727 | 90,479 | ||||
| Voyage expenses | (2,815 | ) | (1,367 | ) | (1,858 | ) | (928 | ) |
| Vessel operating expenses, time-charter hire expenses and general and administrative expenses | (74,398 | ) | (32,778 | ) | (57,786 | ) | (25,564 | ) |
| Depreciation and amortization | (26,485 | ) | (13,328 | ) | (28,891 | ) | (13,962 | ) |
| Income from vessel operations of equity-accounted vessels | 142,790 | 59,153 | 117,192 | 50,025 | ||||
| Net interest expense | (61,584 | ) | (25,133 | ) | (56,628 | ) | (23,221 | ) |
| Income tax expense | (449 | ) | (235 | ) | (32 | ) | (16 | ) |
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provisions(2) | (26,623 | ) | (9,439 | ) | (18,270 | ) | (5,492 | ) |
| Net income / equity income of equity-accounted vessels | 54,134 | 24,346 | 42,262 | 21,296 | ||||
| Net income / equity income of equity-accounted LNG vessels | 50,627 | 22,674 | 40,032 | 20,262 | ||||
| Net income / equity income of equity-accounted LPG vessels | 3,507 | 1,672 | 2,230 | 1,034 | ||||
| Net income / equity income of equity-accounted vessels | 54,134 | 24,346 | 42,262 | 21,296 | ||||
| Depreciation and amortization | 26,485 | 13,328 | 28,891 | 13,962 | ||||
| Net interest expense | 61,584 | 25,133 | 56,628 | 23,221 | ||||
| Income tax expense | 449 | 235 | 32 | 16 | ||||
| EBITDA from equity-accounted vessels | 142,652 | 63,042 | 127,813 | 58,495 | ||||
| Add (subtract) specific income statement items affecting EBITDA: | ||||||||
| Other items including realized and unrealized losses on derivative instruments and unrealized credit loss provisions(2) | 26,623 | 9,439 | 18,270 | 5,492 | ||||
| Direct finance and sale-type lease payments received in excess of revenue recognized | 26,752 | 9,677 | 17,701 | 6,470 | ||||
| Amortization of in-process contracts | (1,759 | ) | (956 | ) | (1,758 | ) | (956 | ) |
| Adjusted EBITDA from equity-accounted vessels | 194,268 | 81,202 | 162,026 | 69,501 | ||||
| Adjusted EBITDA from equity-accounted LNG vessels | 175,231 | 71,683 | 142,311 | 59,646 | ||||
| Adjusted EBITDA from equity-accounted LPG vessels | 19,037 | 9,519 | 19,715 | 9,855 | ||||
| (1) | The Partnership's equity-accounted vessels for the three months ended September 30, 2020 and 2019 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 50 percent ownership interest in the Partnership’s joint venture with Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the MALT Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 23 LPG carriers as at September 30, 2020, compared to 22 owned and in-chartered LPG carriers as at September 30, 2019; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at September 30, 2020 chartered to Shell (the Pan Union Joint Venture); the Partnership’s 50 percent ownership interest in six ARC7 LNG carriers in the Yamal LNG Joint Venture as at September 30, 2020, compared to four ARC7 LNG carriers and two ARC7 LNG carrier newbuildings as at September 30, 2019; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal in Bahrain. |
| (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 September 30, 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 | 598,177 | 250,977 | 509,065 | 210,736 | |||
| Other current assets | 68,446 | 26,702 | 62,566 | 27,719 | |||
| Property, plant and equipment, including owned vessels, vessels related to finance leases and operating lease right-of-use assets | 2,004,583 | 1,023,826 | 3,112,349 | 1,375,570 | |||
| Net investments in sales-type and direct financing leases, current and non-current | 5,420,362 | 2,091,072 | 4,589,139 | 1,856,709 | |||
| Other non-current assets | 77,002 | 48,001 | 50,967 | 41,015 | |||
| Total assets | 8,168,570 | 3,440,578 | 8,324,086 | 3,511,749 | |||
| Current portion of long-term debt and obligations related to finance leases and operating leases | 540,300 | 244,754 | 315,247 | 136,573 | |||
| Current portion of derivative liabilities | 65,440 | 25,622 | 34,618 | 13,658 | |||
| Other current liabilities | 172,226 | 70,813 | 153,816 | 66,224 | |||
| Long-term debt and obligations related to finance leases and operating leases | 4,606,936 | 1,844,580 | 5,026,123 | 2,041,595 | |||
| Shareholders' loans, current and non-current | 346,969 | 129,550 | 346,969 | 126,546 | |||
| Derivative liabilities | 311,665 | 126,461 | 162,640 | 66,060 | |||
| Other long-term liabilities | 62,650 | 30,950 | 64,196 | 32,323 | |||
| Equity | 2,062,384 | 967,848 | 2,220,477 | 1,028,770 | |||
| Total liabilities and equity | 8,168,570 | 3,440,578 | 8,324,086 | 3,511,749 | |||
| Investments in equity-accounted joint ventures | 967,848 | 1,028,770 | |||||
| Advances to equity-accounted joint ventures | 129,550 | 126,546 | |||||
| Unrealized credit loss provisions(2) | (4,674 | ) | — | ||||
| Investments in and advances, net to equity-accounted joint ventures | 1,092,724 | 1,155,316 | |||||
| (1) | The Partnership's equity-accounted vessels as at September 30, 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 COVID-19 and related global events on the Partnership's operations and cash flows; expected increase in the Partnership’s earnings and cash flows commencing in the fourth quarter of 2020; the Partnership’s ability to achieve previously disclosed financial guidance for 2020; fixed charter coverage for the Partnership's LNG fleet for the remainder of 2020 and 2021; the Partnership's operational performance and cost competitiveness; expected reductions in the Partnership’s interest costs as it continues to reduce its debt levels; 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; 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; 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.