TEEKAY LNG PARTNERS L.P. 4th Floor, Belvedere Building, 69 Pitts Bay Road Hamilton, HM 08, Bermuda |
| Generated distributable cash flow of $33.5 million in the fourth quarter of 2009, up from
$29.6 million in the fourth quarter of 2008 |
|
| Declared and paid cash distribution of $0.57 per unit for the fourth quarter of 2009 |
|
| Entered into a new $122.0 million credit facility in late-October 2009 secured by five
newbuilding LPG/Multigas carriers |
|
| Took delivery of the second Skaugen LPG carrier in November 2009 |
|
| Agreed to acquire from Teekay Corporation two Suezmax tankers and one Handymax Product
tanker operating under long-term fixed-rate contracts |
(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
GAAP financial measure. |
1
Number of Vessels | ||||||||||||
Delivered | Committed | |||||||||||
Vessels | Vessels | Total | ||||||||||
LNG Carrier Fleet(1) |
15 | | 15 | |||||||||
LPG/Multigas Carrier Fleet |
3 | 3 | (2) | 6 | ||||||||
Conventional Tanker Fleet |
8 | 3 | (3) | 11 | ||||||||
Total |
26 | 6 | 32 | |||||||||
(1) | Excludes Teekays 33 percent interest in the four Angola LNG
newbuildings, as described below. |
|
(2) | Represents the three Skaugen LPG/Multigas carriers currently under
construction, as described below. |
|
(3) | Represents the three conventional tankers the Partnership agreed to
acquire from Teekay on March 2, 2010. |
2
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||
Liquefied | Suezmax | Liquefied | Suezmax | |||||||||||||||||||||
Gas | Tanker | Gas | Tanker | |||||||||||||||||||||
(in thousands of U.S. dollars) | Segment | Segment | Total | Segment | Segment | Total | ||||||||||||||||||
Net voyage revenues(1)(2)(3) |
66,250 | 18,880 | 85,130 | 54,415 | 32,997 | 87,412 | ||||||||||||||||||
Vessel operating expenses |
12,826 | 8,011 | 20,837 | 13,648 | 6,766 | 20,414 | ||||||||||||||||||
Depreciation and amortization |
15,083 | 4,927 | 20,010 | 15,140 | 4,973 | 20,113 | ||||||||||||||||||
Cash flow from vessel
operations(4) |
52,852 | 7,540 | 60,392 | 39,058 | 15,153 | 54,211 |
(1) | 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 a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping companies. Please see the
Partnerships web site at www.teekaylng.com for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP financial measure. |
|
(2) | Commencing in 2009 and applied retroactively, the gains and losses related to derivative
instruments that are not designated as hedges for accounting purposes have been reclassified
to a separate line item in the statements of income (loss) and are no longer included in the
amounts above. |
|
(3) | Net voyage revenues for the three months ended December 31, 2008 excludes a realized loss of
$8.6 million related to the Toledo Spirit time charter derivative contract. |
|
(4) | Cash flow from vessel operations represents income from vessel operations before
depreciation and amortization expense, excluding the cash flow from vessel operations
relating to the Partnerships Variable Interest Entities and Dropdown Predecessors and
adjusting for direct financing leases on a cash flow basis and the realized loss on the
Toledo Spirit derivative contract. Cash flow from vessel operations is a non-GAAP financial
measure used by certain investors to measure the financial performance of shipping companies.
Please see the Partnerships web site at www.teekaylng.com for a reconciliation of
this non-GAAP measure as used in this release to the most directly comparable GAAP financial
measure. |
3
4
5
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
VOYAGE REVENUES |
85,549 | 79,783 | 88,993 | 321,129 | 314,404 | |||||||||||||||
OPERATING EXPENSES |
||||||||||||||||||||
Voyage expenses |
419 | 743 | 1,581 | 1,902 | 3,253 | |||||||||||||||
Vessel operating expenses |
20,837 | 19,126 | 20,414 | 76,882 | 77,113 | |||||||||||||||
Depreciation and amortization |
20,010 | 18,901 | 20,113 | 78,397 | 76,880 | |||||||||||||||
General and administrative |
5,599 | 4,952 | 5,834 | 18,162 | 20,201 | |||||||||||||||
Restructuring charge(1) |
197 | 393 | | 3,250 | | |||||||||||||||
Goodwill impairment |
| | | | 3,648 | |||||||||||||||
47,062 | 44,115 | 47,942 | 178,593 | 181,095 | ||||||||||||||||
Income from vessel operations |
38,487 | 35,668 | 41,051 | 142,536 | 133,309 | |||||||||||||||
OTHER ITEMS |
||||||||||||||||||||
Interest expense |
(12,651 | ) | (13,396 | ) | (37,090 | ) | (59,281 | ) | (138,317 | ) | ||||||||||
Interest income |
3,015 | 3,375 | 18,647 | 13,873 | 64,325 | |||||||||||||||
Realized and unrealized gain (loss) on derivative instruments(2) |
526 | (33,882 | ) | (73,946 | ) | (40,950 | ) | (99,954 | ) | |||||||||||
Foreign exchange gain (loss) (3) |
8,675 | (17,559 | ) | 3,597 | (10,835 | ) | 18,244 | |||||||||||||
Equity income (loss) (4) |
5,591 | (2,499 | ) | 1,549 | 17,098 | 136 | ||||||||||||||
Other (expense) income net |
(541 | ) | 61 | (166 | ) | (302 | ) | 1,045 | ||||||||||||
Net income (loss) |
43,102 | (28,232 | ) | (46,358 | ) | 62,139 | (21,212 | ) | ||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||
Non-controlling interest(5) |
3,512 | 1,818 | (30,463 | ) | 26,212 | (40,698 | ) | |||||||||||||
Dropdown Predecessor |
| | | | 894 | |||||||||||||||
Partners |
39,590 | (30,050 | ) | (15,895 | ) | 35,927 | 18,592 | |||||||||||||
Limited partners units outstanding: |
||||||||||||||||||||
Weighted-average
number of common units outstanding Basic and diluted |
42,801,009 | 41,021,963 | 33,338,320 | 40,912,100 | 29,698,031 | |||||||||||||||
Weighted-average
number of subordinated units outstanding Basic and diluted |
7,367,286 | 7,367,286 | 11,050,929 | 8,760,006 | 12,459,973 | |||||||||||||||
Weighted-average
number of total units outstanding Basic and diluted |
50,168,295 | 48,389,249 | 44,389,249 | 49,672,106 | 42,158,004 | |||||||||||||||
(1) | The total cost incurred in connection with the Partnerships restructuring plans to move
certain ship management functions from the Partnerships office in Spain to a subsidiary of Teekay
and to change seafarers is $3.3 million for the year ended December 31, 2009, of which $0.2 million
and $0.4 million was incurred for the three months ended December 31, 2009 and September 30, 2009,
respectively. |
|
(2) | Commencing in 2009 and applied retroactively, the realized and unrealized gains and losses
related to derivative instruments that are not designated as hedges for accounting purposes have
been reclassified to a separate line item in the statements of income (loss). The realized gains
(losses) relate to the amounts the Partnership actually paid to settle such derivative instruments
and the unrealized gains (losses) relate to the change in fair value of such derivative instruments
as detailed in the table below. |
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Realized losses relating to: |
||||||||||||||||||||
Interest rate swaps |
(11,094 | ) | (10,491 | ) | (2,011 | ) | (36,222 | ) | (6,788 | ) | ||||||||||
Toledo Spirit time-charter derivative contract |
(940 | ) | | (8,620 | ) | (940 | ) | (8,620 | ) | |||||||||||
(12,034 | ) | (10,491 | ) | (10,631 | ) | (37,162 | ) | (15,408 | ) | |||||||||||
Unrealized gains (losses) relating to: |
||||||||||||||||||||
Interest rate swaps |
11,960 | (24,491 | ) | (72,590 | ) | (11,143 | ) | (82,543 | ) | |||||||||||
Toledo Spirit time-charter derivative contract |
600 | 1,100 | 9,275 | 7,355 | (2,003 | ) | ||||||||||||||
12,560 | (23,391 | ) | (63,315 | ) | (3,788 | ) | (84,546 | ) | ||||||||||||
Total realized and unrealized gains (losses) on derivative instruments |
526 | (33,882 | ) | (73,946 | ) | (40,950 | ) | (99,954 | ) | |||||||||||
(3) | The Partnerships Euro-denominated revenues currently approximate its Euro-denominated
expenses and debt service costs. As a result, the Partnership currently is not exposed
materially to foreign currency fluctuations. However, for accounting purposes, the
Partnership is required to revalue all foreign currency-denominated monetary assets and
liabilities based on the prevailing exchange rate at the end of each reporting period. This
revaluation does not affect the Partnerships cash flows or the calculation of distributable
cash flow, but results in the recognition of unrealized foreign currency translation gains or
losses in the statements of income (loss). |
|
(4) | Equity income (loss) includes unrealized gains (losses) on derivative instruments of $3.9
million, $(4.0) million and nil for the three months ended December 31, 2009, September 30,
2009 and December 31, 2008, respectively and $10.9 million and nil for the year ended December
31, 2009 and December 31, 2008, respectively. |
|
(5) | Commencing in 2009 and applied retroactively, net income (loss) is shown before
non-controlling interest. |
6
As at December 31, | As at September 30, | As at December 31, | ||||||||||
2009 | 2009 | 2008 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
ASSETS |
||||||||||||
Cash and cash equivalents |
102,570 | 90,485 | 117,641 | |||||||||
Restricted cash current |
32,427 | 35,574 | 28,384 | |||||||||
Other current assets |
14,602 | 17,234 | 18,388 | |||||||||
Advances to affiliates |
20,715 | 11,926 | 9,583 | |||||||||
Restricted cash long-term |
579,093 | 614,943 | 614,565 | |||||||||
Vessels and equipment |
1,817,350 | 1,793,551 | 2,007,321 | |||||||||
Advances on newbuilding contracts |
57,430 | 56,421 | 200,557 | |||||||||
Net investments in direct financing leases |
416,541 | 419,249 | | |||||||||
Derivative assets |
32,131 | 71,976 | 167,326 | |||||||||
Investment in and advances to joint venture |
82,778 | 77,024 | 64,382 | |||||||||
Other assets |
23,915 | 23,395 | 27,266 | |||||||||
Intangible assets |
132,675 | 134,958 | 141,805 | |||||||||
Goodwill |
35,631 | 35,631 | 35,631 | |||||||||
Total Assets |
3,347,858 | 3,382,367 | 3,432,849 | |||||||||
LIABILITIES AND EQUITY |
||||||||||||
Accounts payable, accrued liabilities and unearned revenue |
52,210 | 54,785 | 44,614 | |||||||||
Current portion of long-term debt and capital leases |
107,697 | 111,297 | 184,971 | |||||||||
Current portion of long-term debt related to vessels to be
delivered to the Partnership(2) |
| | 39,446 | |||||||||
Advances from affiliates and joint venture partners |
112,398 | 100,623 | 74,300 | |||||||||
Long-term debt and capital leases |
2,025,645 | 2,120,088 | 1,699,231 | |||||||||
Long-term debt related to vessels to be delivered to the
Partnership(2) |
| | 276,304 | |||||||||
Derivative liabilities |
134,006 | 183,246 | 260,602 | |||||||||
Other long-term liabilities |
56,373 | 55,097 | 44,668 | |||||||||
Equity |
||||||||||||
Non-controlling interest(3) |
12,322 | 6,510 | 2,862 | |||||||||
Partners equity |
847,207 | 750,721 | 805,851 | |||||||||
Total Liabilities and Total Equity |
3,347,858 | 3,382,367 | 3,432,849 | |||||||||
(1) | Although the acquisition of the Tangguh LNG carriers did not occur until August 2009, due to
the Partnerships agreement to acquire Teekay Corporations 70 percent interest in the Tangguh
LNG Project, it was required to consolidate the Tangguh vessels prior to the actual
acquisition date under U.S. generally accepted accounting principles. Due to the
Partnerships acquisition of a 40 percent interest in the four RasGas 3 LNG carriers on May 6,
2008, it is required to equity account for its investment in the RasGas 3 joint venture under
U.S. generally accepted accounting principles. |
|
(2) | As at December 31, 2008, the current portion of long-term debt related to vessels to be
delivered to the Partnership includes the debt associated with the Tangguh LNG Carriers, which
the Partnership had not yet acquired from Teekay Corporation as of this date. |
|
(3) | As at December 31, 2009, non-controlling interest includes the 30 percent portion of Teekay
Nakilat (RasGasII Project) which the Partnership does not own and 31 percent of the equity
interest in the Tangguh project. Prior to August 2009, the non-controlling interest related
to the Tangguh project was 100 percent as the Partnership had not yet acquired the interest in
the Tangguh project and was consolidating the Tangguh project as described in Note (1) above. |
7
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
(unaudited) | (unaudited) | |||||||
Cash and cash equivalents provided by (used for) |
||||||||
OPERATING ACTIVITIES |
||||||||
Net operating cash flow |
188,711 | 149,570 | ||||||
FINANCING ACTIVITIES |
||||||||
Proceeds from issuance of long-term debt |
220,050 | 936,988 | ||||||
Debt issuance costs |
(1,281 | ) | (2,233 | ) | ||||
Scheduled repayments of long-term debt |
(77,706 | ) | (73,613 | ) | ||||
Prepayments of long-term debt |
(185,900 | ) | (321,000 | ) | ||||
Scheduled repayments of capital lease obligations and other long-term liabilities |
(37,437 | ) | (33,176 | ) | ||||
Proceeds from follow-on offering net of offering costs |
162,559 | 202,519 | ||||||
Advances to and from affiliates |
23,425 | 17,147 | ||||||
Advances from joint venture partners |
| 621 | ||||||
Decrease in restricted cash |
1,595 | 28,340 | ||||||
Cash distributions paid |
(114,539 | ) | (97,420 | ) | ||||
Excess of purchase price over the contributed basis of Teekay Nakilat (III)
Holdings Corporation |
| (28,192 | ) | |||||
Excess of purchase price over the contributed basis of Teekay Tangguh Borrower
LLC |
(33,442 | ) | | |||||
Distribution to Teekay Corporation for the purchase of Kenai LNG Carriers |
| (230,000 | ) | |||||
Proceeds on sale of 1% interest in Kenai LNG Carriers |
2,300 | | ||||||
Equity contribution from Teekay Corporation |
| 3,281 | ||||||
Net financing cash flow |
(40,376 | ) | 403,262 | |||||
INVESTING ACTIVITIES |
||||||||
Advances to joint venture |
(2,856 | ) | (278,723 | ) | ||||
Repayments from joint venture |
| 28,310 | ||||||
Return on capital from Teekay BLT Corporation to joint venture partners |
| (28,000 | ) | |||||
Receipt of Spanish re-investment tax credit |
| 5,431 | ||||||
Purchase of Teekay Nakilat (III) Holdings Corporation |
| (82,007 | ) | |||||
Purchase of Teekay Tangguh Borrower LLC |
(35,646 | ) | | |||||
Receipts from direct financing leases |
9,326 | | ||||||
Expenditures for vessels and equipment |
(134,230 | ) | (172,093 | ) | ||||
Net investing cash flow |
(163,406 | ) | (527,082 | ) | ||||
(Decrease) increase in cash and cash equivalents |
(15,071 | ) | 25,750 | |||||
Cash and cash equivalents, beginning of the year |
117,641 | 91,891 | ||||||
Cash and cash equivalents, end of the year |
102,570 | 117,641 | ||||||
8
Three Months Ended | Year Ended | |||||||
December 31, 2009 | December 31, 2009 | |||||||
(unaudited) | (unaudited) | |||||||
Net income (loss) GAAP basis |
43,102 | 62,139 | ||||||
Less: |
||||||||
Net (income) loss attributable to non-controlling interest |
(3,512 | ) | (26,212 | ) | ||||
Net income (loss) attributable to the partners |
39,590 | 35,927 | ||||||
Add (subtract) specific items affecting net income (loss): |
||||||||
Foreign currency exchange (gain) loss(1) |
(8,675 | ) | 10,835 | |||||
Unrealized (gains) losses from derivative instruments(2) |
(12,560 | ) | 3,788 | |||||
Unrealized gains from derivative instruments from
equity accounted investees(2) |
(3,853 | ) | (10,936 | ) | ||||
Restructuring charge(3) |
197 | 3,250 | ||||||
Non-controlling interests share of items above |
2,119 | 24,039 | ||||||
Total adjustments |
(22,772 | ) | 30,976 | |||||
Adjusted net income attributable to the partners |
16,818 | 66,903 | ||||||
Three Months Ended | Year Ended | |||||||
December 31, 2008 | December 31, 2008 | |||||||
(unaudited) | (unaudited) | |||||||
Net income (loss) GAAP basis |
(46,358 | ) | (21,212 | ) | ||||
Less: |
||||||||
Net (income) loss attributable to Dropdown Predecessor interest |
| (894 | ) | |||||
Net (income) loss attributable to non-controlling interest |
30,463 | 40,698 | ||||||
Net income (loss) attributable to the partners |
(15,895 | ) | 18,592 | |||||
Add (subtract) specific items affecting net income (loss): |
||||||||
Foreign currency exchange gain(1) |
(3,597 | ) | (18,244 | ) | ||||
Unrealized (gains) losses from derivative instruments(2) |
63,315 | 84,546 | ||||||
Goodwill impairment |
| 3,648 | ||||||
Non-controlling interests share of items above |
(29,008 | ) | (39,912 | ) | ||||
Total adjustments |
30,710 | 30,038 | ||||||
Adjusted net income attributable to the partners |
14,815 | 48,630 | ||||||
(1) | Foreign currency exchange gains primarily relate to the revaluation of the Partnerships debt
and restricted cash denominated in Euros. |
|
(2) | Reflects the unrealized gain or loss due to changes in the mark-to-market value of
derivative instruments that are not designated as hedges for accounting purposes. |
|
(3) | Restructuring charges were incurred in connection with the Partnerships restructuring plans
to move certain ship management functions from the Partnerships office in Spain to a
subsidiary of Teekay Corporation and to change nationality of some of the seafarers. |
9
Three Months Ended | ||||
December 31, 2009 | ||||
(unaudited) | ||||
Net income |
43,102 | |||
Add: |
||||
Depreciation and amortization |
20,010 | |||
Partnerships share of RasGas 3 DCF before estimated
maintenance capital expenditures |
4,692 | |||
Income tax expense |
1,137 | |||
Less: |
||||
Estimated maintenance capital expenditures |
(9,594 | ) | ||
Equity income of RasGas 3 joint venture |
(5,591 | ) | ||
Unrealized foreign exchange gain |
(8,675 | ) | ||
Unrealized gain from derivatives and other non-cash items |
(8,046 | ) | ||
Distributable Cash Flow before Non-controlling interest |
37,035 | |||
Non-controlling interests share of DCF before estimated maintenance capital expenditures |
(3,540 | ) | ||
Distributable Cash Flow |
33,495 | |||
10
Three Months Ended December 31, 2009 | ||||||||||||
(unaudited) | ||||||||||||
Liquefied Gas | Suezmax Tanker | |||||||||||
Segment | Segment | Total | ||||||||||
Net voyage revenues(1)(2) |
66,250 | 18,880 | 85,130 | |||||||||
Vessel operating expenses |
12,826 | 8,011 | 20,837 | |||||||||
Depreciation and amortization |
15,083 | 4,927 | 20,010 | |||||||||
General and administrative |
3,383 | 2,216 | 5,599 | |||||||||
Restructuring charge |
24 | 173 | 197 | |||||||||
Income from vessel operations |
34,934 | 3,553 | 38,487 | |||||||||
Three Months Ended December 31, 2008 | ||||||||||||
(unaudited) | ||||||||||||
Liquefied | Suezmax Tanker | |||||||||||
Gas Segment | Segment | Total | ||||||||||
Net voyage revenues(1)(2) |
54,415 | 32,997 | 87,412 | |||||||||
Vessel operating expenses |
13,648 | 6,766 | 20,414 | |||||||||
Depreciation and amortization |
15,140 | 4,973 | 20,113 | |||||||||
General and administrative |
3,376 | 2,458 | 5,834 | |||||||||
Income from vessel operations |
22,251 | 18,800 | 41,051 | |||||||||
(1) | 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 a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping companies. Please see the
Partnerships web site at www.teekaylng.com for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP financial measure. |
|
(2) | Commencing in 2009 and applied retroactively, the gains and losses related to derivative
instruments that are not designated as hedges for accounting purposes have been reclassified
to a separate line item in the statements of income (loss) and are no longer included in the
amounts above. |
11
12
TEEKAY LNG PARTNERS L.P. |
||||
By: | Teekay GP L.L.C., its General Partner | |||
Date: March 5, 2010 | By: | /s/ Peter Evensen | ||
Peter Evensen | ||||
Chief Executive Officer and Chief Financial Officer (Principal Financial and Accounting Officer) |