HAMILTON, BERMUDA — (Marketwire) — 11/08/12 — 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) (NYSE: TGP), today reported the Partnership–s results for the quarter ended September 30, 2012. During the third quarter of 2012, the Partnership generated distributable cash flow(1) of $57.8 million, compared to $43.7 million in the same quarter of the previous year. The increase primarily reflects the incremental distributable cash flow resulting from the following acquisitions: one Multigas carrier delivered in 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 acquired in February 2012.
On October 12, 2012, the Partnership declared a cash distribution of $0.675 per unit for the quarter ended September 30, 2012. The cash distribution will be paid on November 9, 2012 to all unitholders of record on October 24, 2012.
“Shipping requirements to support new liquefaction projects scheduled to come on-line starting in 2015 are expected to create significant new demand for the global LNG shipping fleet,” commented Peter Evensen, Chief Executive Officer of Teekay GP L.L.C. “Against this backdrop, the Partnership is currently actively bidding on several LNG and floating storage and regasification projects with start-up dates in the 2015 through 2017 timeframe. Including approximately $180 million of net proceeds from the Partnership–s September 2012 follow-on equity offering, Teekay LNG is well-positioned for investment in one or more quality growth opportunities.”
Teekay LNG–s Fleet
The following table summarizes the Partnership–s fleet as of November 1, 2012:
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $41.7 million for the quarter ended September 30, 2012, compared to $29.7 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 $8.6 million and $2.0 million for the three months ended September 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 $33.1 million and $27.6 million for the three months ended September 30, 2012 and 2011, respectively.
For the nine months ended September 30, 2012, the Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $117.8 million, compared to $79.1 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 $22.3 million and $29.6 million for the nine months ended September 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 $95.5 million and $49.5 million for the nine months ended September 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. 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 as detailed in footnotes 1 and 2 to the Summary Consolidated Statements of 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 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, was virtually unchanged at $55.7 million in the third quarter of 2012 compared to $56.0 million in the same quarter of the prior year.
Cash flow from vessel operations from the Partnership–s equity-accounted vessels in the Liquefied Gas segment increased significantly to $40.6 million in the third quarter of 2012 from $15.2 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 $15.4 million in the third quarter of 2012 from $14.4 million in the same quarter of the prior year, primarily as a result of lower general and administrative expenses in the Conventional Tanker segment.
Liquidity
As of September 30, 2012, the Partnership had total liquidity of $558.9 million (comprised of $91.9 million in cash and cash equivalents and $467.0 million in undrawn credit facilities), compared to total liquidity of $402.9 million as of June 30, 2012. The increase in the Partnership–s liquidity balance is primarily due to the $182.2 million of net proceeds from the follow-on equity offering completed September 2012.
Conference Call
The Partnership plans to host a conference call on Friday, November 9, 2012 at 11:00 a.m. (ET) to discuss the results for the third 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 Third 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, November 16, 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 7467466.
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”.
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.
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 current bidding activity by the Partnership on potential LNG and floating storage and regasification projects and anticipated start-up timing of those projects; LNG shipping market fundamentals, including the balance of supply and demand of LNG shipping capacity and LNG shipping charter rates; the stability of the Partnership–s cash flows; the Partnership–s financial position, including available liquidity; 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 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; the Partnership–s ability to secure new contracts through bidding on project tenders and/or acquire existing on-the-water assets; 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; competitive dynamics in bidding for potential LNG or LPG projects; 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.
Kent Alekson
Investor Relations Enquiries
+1 (604) 609-6442