Teekay LNG Partners Reports Third Quarter Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 11/07/13 -- Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP) -
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 September 30, 2013. During the third quarter of 2013, the Partnership generated distributable cash flow(1) of $64.6 million, compared to $57.8 million in the same quarter of the previous year. The increase in distributable cash flow was primarily due to the Partnership's acquisition of a 50 percent interest in Exmar LPG BVBA, a liquefied petroleum gas (LPG) carrier joint venture with Exmar, in February 2013 and its acquisition and charter-back of a liquefied natural gas (LNG) carrier from Awilco LNG ASA (Awilco) in September 2013. The increase was partially offset by lower charter rates on two of the Partnership's conventional tankers as a result of renegotiated rates effective October 2012 for a period of two years.
On October 11, 2013, the Partnership declared a cash distribution of $0.675 per unit for the quarter ended September 30, 2013. The cash distribution is payable on November 8, 2013 to all unitholders of record on October 23, 2013.
"With the Partnership's recent accretive transactions with Awilco, we are pleased to announce today that management intends to recommend to the Board of Directors an increase to the Partnership's quarterly distribution by 2.5 percent, commencing with the fourth quarter distribution payable in February 2014," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "The two Awilco acquisition-leaseback transactions combined with the two, five-year time- charters with Cheniere Marketing L.L.C. secured in June 2013, increase the Partnership's estimated forward fixed-rate revenues to approximately $6.9 billion while further diversifying our fixed-rate contract portfolio."
Mr. Evensen continued, "Looking ahead, the Partnership has a number of visible growth projects, including the four LNG carrier newbuildings scheduled to be delivered in 2016 and the 12 LPG newbuildings scheduled to be delivered between 2014 and 2018 in our 50 percent joint venture with Exmar NV, including two vessel options that were exercised last week. In addition, the Partnership is currently involved in several LNG shipping and floating regasification project tenders with expected start-up dates in early-2016 through 2017."
Recent Transactions
Acquisition and Bareboat Charter-Back of Two LNG Carrier Newbuildings
In August 2013, Teekay LNG agreed to acquire a 155,900 cubic meter (cbm) LNG carrier newbuilding from Awilco. The vessel was delivered to the Partnership in mid-September 2013, at which time Awilco bareboat-chartered the vessel on a five- year fixed-rate charter contract (plus a one-year extension option) with a fixed-price purchase obligation at the end of the initial term (and option period). The vessel purchase price was $205 million less a $50 million upfront prepayment of charter hire by Awilco, which is in addition to the daily bareboat charter rate.
In September 2013, Teekay LNG agreed to acquire a second 155,900 cbm LNG carrier newbuilding from Awilco on similar terms as the first vessel. This second vessel is currently under construction by Daewoo Shipbuilding & Marine Engineering Co., Ltd., (DSME) of South Korea and the Partnership expects to take delivery in late-November 2013. Upon delivery of the second vessel to the Partnership, Awilco will bareboat-charter the vessel on a four-year fixed-rate charter contract (plus a one-year extension option) with a fixed-price purchase obligation at the end of the initial term (and option period). As with the first Awilco vessel, the second vessel's purchase price is $205 million less a $50 million upfront prepayment of charter hire by Awilco, which is in addition to the daily bareboat charter rate.
Exercised Options for Additional Newbuilding LNG/LPG Carriers
In July 2013, Teekay LNG exercised a portion of its existing options with DSME for two additional 173,400 cbm LNG carrier newbuildings. These newbuilding vessels will be equipped with the M-type, Electronically Controlled, Gas Injection (MEGI) twin engines, which are expected to be significantly more fuel-efficient and have lower emission levels than other engines currently being utilized in LNG shipping. The Partnership intends to secure long-term contract employment for both vessels prior to their deliveries in 2016. In connection with the exercise of these two newbuilding options, the Partnership secured additional options with DSME for up to five additional LNG carrier newbuildings.
In addition, in July and October 2013, Exmar LPG BVBA, the Partnership's 50/50 LPG joint venture with Belgium-based Exmar NV, exercised its options to order four additional Midsize Gas Carrier (MGC) newbuildings, which will be constructed by Hanjin Heavy Industries and Construction Co., Ltd. and scheduled for delivery in 2017 and 2018.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $48.2 million for the quarter ended September 30, 2013, compared to $41.7 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of decreasing net income by $18.6 million and $8.6 million for the three months ended September 30, 2013 and 2012, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $29.6 million and $33.1 million for the three months ended September 30, 2013 and 2012, respectively.
For the nine months ended September 30, 2013, the Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $128.7 million, compared to $117.8 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of increasing net income by $25.0 million and decreasing net income by $22.3 million for the nine months ended September 30, 2013 and 2012, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $153.7 million and $95.5 million for the nine months ended September 30, 2013 and 2012, respectively.
For accounting purposes, the Partnership is required to recognize the changes in the fair value of its derivative instruments on its consolidated statements of income and comprehensive income. 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 and comprehensive income as detailed in notes 3, 4 and 5 to the Summary Consolidated Statements of Income and Comprehensive Income included in this release.
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 F for further details).
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership's Liquefied Gas segment, excluding equity accounted vessels, increased to $58.8 million in the third quarter of 2013 from $55.7 million in the same quarter of the prior year. The increase is primarily as a result of the acquisition of the first LNG carrier from Awilco in September 2013 and revenues relating to certain operating and drydocking expense recoveries.
Cash flow from vessel operations from the Partnership's equity accounted vessels in the Liquefied Gas segment increased to $51.9 million in the third quarter of 2013 from $40.6 million in the same quarter of the prior year. This increase was primarily due to the acquisition of a 50 percent interest in the Exmar LPG BVBA joint venture in February 2013.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment decreased to $14.5 million in the third quarter of 2013 from $15.4 million in the same quarter of the prior year, primarily as a result of amendments to two of the Partnership's Suezmax tanker charter contracts which temporarily reduced the daily hire rate for each of these vessels by $12,000 between October 2012 and September 2014. During this period, however, if Suezmax spot tanker rates exceed the amended rates, the charterer will pay the Partnership the excess amount up to a maximum amount equal to the original daily charter rate.
Teekay LNG's Fleet
The following table summarizes the Partnership's fleet as of November 1, 2013:
Liquidity and Continuous Offering Program Update
In May 2013, the Partnership implemented a continuous offering program (COP) under which the Partnership may issue new common units, representing limited partner interests, at market prices up to a maximum aggregate amount of $100 million. Through September 30, 2013, the Partnership sold an aggregate of 124,071 common units under the COP, generating proceeds of approximately $4.9 million (including the Teekay LNG general partner's 2 percent proportionate capital contribution and net of offering costs). The Partnership did not sell any units under the COP during the third quarter of 2013.
As of September 30, 2013, the Partnership had total liquidity of $256.4 million (comprised of $118.1 million in cash and cash equivalents and $138.3 million in undrawn credit facilities). Giving effect to the approximately $145 million common unit public offering completed in early October 2013, the Partnership's liquidity at September 30, 2013 would have been approximately $400 million.
In September 2013, the Partnership issued in the Norwegian bond market NOK 900 million in senior unsecured bonds that mature in September 2018. The aggregate principal amount of the bonds is equivalent to approximately USD 150 million and all interest and principal payments were swapped into USD at a fixed rate of 6.43 percent. The proceeds from the bond issuance have been used for general partnership purposes. The Partnership is applying to list the bonds on the Oslo Stock Exchange.
Conference Call
The Partnership plans to host a conference call on Friday, November 8, 2013 at 11:00 a.m. (ET) to discuss the results for the third quarter of 2013. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
A supporting Third Quarter 2013 Earnings Presentation will also be available at in advance of the conference call start time.
The conference call will be recorded and made available until Friday, November 15, 2013. 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 3500990.
About Teekay LNG Partners L.P.
Teekay LNG Partners is the world's second largest independent owner and operator of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 33 LNG carriers (including one LNG regasification unit and five newbuildings), 33 LPG/Multigas carriers (including five chartered-in LPG carriers and 12 newbuildings) and 11 conventional tankers. The Partnership's interests in these vessels range from 33 to 100 percent. 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 units trade on the New York Stock Exchange under the symbol "TGP".
Equity income for the three and nine months ended September 30, 2013 also includes the Partnership's share of its joint venture Exmar LPG BVBA which is based on preliminary purchase price allocations and may be revised.
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 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, unrealized gains and losses from derivatives, 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.
Description of Non-GAAP Financial Measure - Net Voyage Revenues
Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net voyage revenues is included because certain investors use this data to measure the financial performance of shipping companies. Net voyage revenues is not required by GAAP and should not be considered as an alternative to voyage revenues or any other indicator of the Partnership's performance required by GAAP.
Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Consolidated Vessels
Cash flow from vessel operations from consolidated vessels represents income from vessel operations before (a) depreciation and amortization expense, (b) amortization of in-process revenue contracts included in voyage revenues, (c) loan loss provision, and includes (d) adjustments for direct financing leases and two Suezmax tankers to a cash basis. The Partnership's only direct financing leases for the periods indicated relate to the Partnership's 69 percent interest in two L NG carriers, the Tangguh Sago and Tangguh Hiri, and the LNG carrier acquired from Awilco in September 2013. The Partnership's cash flow from vessel operations from consolidated vessels does not include the Partnership's cash flow from vessel operations from its equity accounted joint ventures. Cash flow from vessel operations is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's consolidated vessels. Cash flow from vessel operations from consolidated vessels 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.
Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Equity Accounted Vessels
Cash flow from vessel operations from equity accounted vessels represents income from vessel operations before (a) depreciation and amortization expense, (b) amortization of in-process revenue contracts, and includes (c) adjustments for direct financing leases to a cash basis. Cash flow from vessel operations from equity accounted vessels is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's equity accounted joint ventures. Cash flow from vessel operations from equity accounted vessels is not required by GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership's performance required by GAAP.
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: future growth opportunities, including the Partnership's ability to successfully bid for new LNG shipping and floating regasification projects and resulting growth in the Partnership's distributable cash flow; the Partnership's ability to secure charter contract employment and long-term financing for the two currently unchartered LNG carrier newbuilding vessels ordered in July 2013; expected fuel-efficiency and emission levels associated with the MEGI engines to be installed in the Partnership's four LNG newbuildings to be built by DSME; the expected delivery dates for the Partnership's newbuilding vessels, including the four LNG newbuildings to be built by DSME and 12 LPG carrier newbuildings ordered through the Exmar LPG joint venture; the timing and acquisition price of the Partnership's acquisition- charter back of a second LNG carrier newbuilding from Awilco and the impact of this transaction on the Partnership's future distributable cash flows; the total amount of the Partnership's forward fixed-rate revenues, including the contribution from the two Awilco LNG newbuilding acquisition-charter back transactions and the two five-year time-charters with Cheniere Marketing L.L.C.; and the amount, timing and certainty of future increases to the Partnership's co mmon unit distributions, including that resulting from management's intention to recommend a 2.5 percent cash distribution increase commencing with the fourth quarter distribution payable in February 2014.
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: shipyard construction delays; availability of suitable LNG shipping, LPG shipping, floating storage and regasification and other growth project opportunities; 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; competitive dynamics in bidding for potential LNG or LPG projects; the Partnership's ability to secure new contracts through bidding on project tenders; 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, including the potential impact on the Partnership's future distributable cash flow and forward fixed-rate revenues; the inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels or attain fixed-rate long- term contracts for newbuilding vessels; failure of the Board of Directors of the Partnership's general partner to approve future distribution increases, including the 2.5 percent increase management intends to recommend for the fourth quarter 2013 distribution, payable in February 2014; the Partnership's ability to raise financing for its existing newbuildings or to purchase additional vessels or to pursue other projects; completion of the second acquisition-charter back transaction with Awilco; actual performance of the MEGI engines; results of the two Awilco and other recent transactions; 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, 2012. 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:
Kent Alekson
+1 (604) 609-6442
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Datum: 07.11.2013 - 07:30 Uhr
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