HAMILTON, BERMUDA — (Marketwire) — 08/09/12 — 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), today reported the Partnership–s results for the quarter ended June 30, 2012. During the second quarter of 2012, the Partnership generated distributable cash flow(1) of $56.8 million, compared to $37.6 million in the same quarter of the previous year. The increase primarily reflects the incremental distributable cash flow resulting from the following acquisitions: Multigas carriers delivered in June and October 2011; a 33 percent interest in four liquefied natural gas (LNG) carriers delivered between August 2011 and January 2012; one liquefied petroleum gas (LPG) carrier delivered in September 2011; and a 52 percent interest in six LNG carriers completed in February 2012.
On July 13, 2012, the Partnership declared a cash distribution of $0.675 per unit for the quarter ended June 30, 2012. The cash distribution will be paid on August 10, 2012 to all unitholders of record on July 25, 2012.
“The Partnership–s distributable cash flow experienced a healthy increase during the second quarter, primarily as a result of the full quarter contribution from the six Maersk LNG carriers acquired in the first quarter of 2012 through our joint venture with Marubeni,” commented Peter Evensen, Chief Executive Officer of Teekay GP L.L.C. “Since closing the acquisition at the end of February, the integration of these vessels into our fleet is now substantially complete.”
“The LNG shipping market continues to exhibit strong fundamentals which enabled the Partnership to recently secure a new three-year time-charter for the Magellan Spirit at a rate which is approximately 20 percent higher than under its existing charter,” Mr. Evensen continued. “The new contract will commence in September 2013 when the Magellan Spirit–s current time-charter expires. In addition, the Partnership has been actively assessing opportunities to make additional accretive investments in new LNG-related projects and existing LNG assets with long-term contracts. With approximately $400 million of available liquidity, the Partnership is well-positioned for further acquisitions.”
Teekay LNG–s Fleet
The following table summarizes the Partnership–s fleet as of August 1, 2012:
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $40.5 million for the quarter ended June 30, 2012, compared to $23.6 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 $2.8 million and $26.7 million for the three months ended June 30, 2012 and 2011, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income (loss) attributable to the partners, on a GAAP basis, of $37.7 million and ($3.1) million for the three months ended June 30, 2012 and 2011, respectively.
For the six months ended June 30, 2012, the Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $76.1 million, compared to $49.4 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 $13.7 million and $27.6 million for the six months ended June 30, 2012 and 2011, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $62.4 million and $21.9 million for the six months ended June 30, 2012 and 2011, 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 (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 footnotes 1 and 2 to the Summary Consolidated Statements of Income (Loss) 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 above and Appendix C for further details).
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership–s Liquefied Gas segment, excluding equity-accounted vessels, increased to $54.3 million in the second quarter of 2012 from $50.2 million in the same quarter of the prior year. This increase was primarily due to higher voyage revenues as a result of the Multigas and LPG carrier acquisitions previously discussed in this release and lower operating expenses.
Cash flow from vessel operations from the Partnership–s equity-accounted vessels in the Liquefied Gas segment increased to $38.0 million in the second quarter of 2012 from $14.5 million in the same quarter of the prior year. This increase was primarily due to the Teekay LNG-Marubeni joint venture–s acquisition of six LNG carriers from A.P. Moller Maersk A/P (the MALT LNG Carriers) in February 2012 and the acquisition of a 33 percent interest in the four Angola LNG Carriers from Teekay Corporation between August 2011 and January 2012.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership–s Conventional Tanker segment increased to $16.7 million for the second quarter of 2012 from $12.9 million for the same quarter of the prior year. This increase was primarily due to 72 off-hire days in the second quarter of 2011 related to scheduled dry dockings compared to no off-hire days during the second quarter of 2012, and lower operating expenses.
Liquidity
As of June 30, 2012, the Partnership had total liquidity of $402.9 million (comprised of $114.9 million in cash and cash equivalents and $288.0 million in undrawn credit facilities), compared to total liquidity of $318.1 million as of March 31, 2012. The increase in the Partnership–s liquidity balance is primarily due to the NOK 700 million ($125.0 million) Norwegian bond offering that was completed in May 2012.
Conference Call
The Partnership plans to host a conference call on Friday, August 10, 2012 at 11:00 a.m. (ET) to discuss the results for the second quarter of 2012. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
A supporting Second Quarter 2012 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, August 17, 2012. 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 7420375.
About Teekay LNG Partners L.P.
Teekay LNG Partners is the world–s third largest independent owner and operator of LNG vessels, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts with major energy and utility companies through its interests in 27 LNG carriers (including one LNG regasification unit), five LPG/Multigas carriers and 11 conventional tankers. The Partnership–s ownership 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”.
(1) Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please see Appendix B for a reconciliation of this non-GAAP measure to the most directly comparable financial measure under United States generally accepted accounting principles (GAAP).
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 (loss) 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 (loss).
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 Partnership–s financial position, including available liquidity; the Partnership–s new time-charter contract for the Magellan Spirit commencing in September 2013; and the Partnership–s ability to secure additional accretive growth opportunities. 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: availability of LNG shipping, floating storage, regasification and other growth opportunities; changes in production of LNG or LPG, either generally or in particular regions; development of LNG and LPG projects; 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; 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 for the fiscal year ended December 31, 2011. 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. – Investor Relations Enquiries
Kent Alekson
+1 (604) 609-6442