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Name | Symbol | Market | Type |
---|---|---|---|
Teekay Lng Partners LP | NYSE:TGP | NYSE | Trust |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.98 | 0 | 01:00:00 |
|
|
|
|
PART I: FINANCIAL INFORMATION
|
PAGE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Voyage revenues
(note 9a)
|
100,658
|
|
|
98,415
|
|
|
295,670
|
|
|
294,349
|
|
Voyage expenses
|
(355
|
)
|
|
(240
|
)
|
|
(1,354
|
)
|
|
(931
|
)
|
Vessel operating expenses
(note 9a)
|
(22,055
|
)
|
|
(24,319
|
)
|
|
(66,320
|
)
|
|
(70,055
|
)
|
Depreciation and amortization
|
(24,041
|
)
|
|
(22,473
|
)
|
|
(70,521
|
)
|
|
(69,251
|
)
|
General and administrative expenses
(notes 9a and 13)
|
(3,573
|
)
|
|
(5,676
|
)
|
|
(14,865
|
)
|
|
(19,452
|
)
|
Restructuring charges
(note 14)
|
—
|
|
|
(3,510
|
)
|
|
—
|
|
|
(3,510
|
)
|
Loss on sale of vessels
(note 5b)
|
—
|
|
|
—
|
|
|
(27,439
|
)
|
|
—
|
|
Income from vessel operations
|
50,634
|
|
|
42,197
|
|
|
115,171
|
|
|
131,150
|
|
Equity income
(note 11c)
|
13,514
|
|
|
13,523
|
|
|
52,579
|
|
|
60,583
|
|
Interest expense
(notes 7 and 10)
|
(15,644
|
)
|
|
(11,175
|
)
|
|
(42,910
|
)
|
|
(32,432
|
)
|
Interest income
|
653
|
|
|
617
|
|
|
1,800
|
|
|
1,962
|
|
Realized and unrealized gain (loss) on non-designated
derivative instruments (note 10) |
5,004
|
|
|
(26,835
|
)
|
|
(50,406
|
)
|
|
(29,979
|
)
|
Foreign currency exchange gain (loss)
(notes 7 and 10)
|
504
|
|
|
(8,153
|
)
|
|
(10,139
|
)
|
|
8,231
|
|
Other income
|
397
|
|
|
393
|
|
|
1,223
|
|
|
1,171
|
|
Net income before income tax expense
|
55,062
|
|
|
10,567
|
|
|
67,318
|
|
|
140,686
|
|
Income tax expense
(note 8)
|
(209
|
)
|
|
(258
|
)
|
|
(722
|
)
|
|
(291
|
)
|
Net income
|
54,853
|
|
|
10,309
|
|
|
66,596
|
|
|
140,395
|
|
Non-controlling interest in net income
|
4,746
|
|
|
2,811
|
|
|
10,556
|
|
|
11,736
|
|
General Partner’s interest in net income
|
1,002
|
|
|
7,622
|
|
|
1,121
|
|
|
24,832
|
|
Limited partners’ interest in net income
|
49,105
|
|
|
(124
|
)
|
|
54,919
|
|
|
103,827
|
|
Limited partners’ interest in net income per common unit:
(note 12)
|
|
|
|
|
|
|
|
||||
• Basic
|
0.62
|
|
|
0.00
|
|
|
0.69
|
|
|
1.32
|
|
• Diluted
|
0.62
|
|
|
0.00
|
|
|
0.69
|
|
|
1.32
|
|
Weighted-average number of common units outstanding:
|
|
|
|
|
|
|
|
||||
• Basic
|
79,571,820
|
|
|
78,941,689
|
|
|
79,567,188
|
|
|
78,679,813
|
|
• Diluted
|
79,697,417
|
|
|
79,009,078
|
|
|
79,659,822
|
|
|
78,741,533
|
|
Cash distributions declared per common unit
|
0.14
|
|
|
0.70
|
|
|
0.42
|
|
|
2.10
|
|
Related party transactions
(note 9)
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Net income
|
54,853
|
|
|
10,309
|
|
|
66,596
|
|
|
140,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) before reclassifications
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on qualifying cash flow hedging instruments,
net of tax
(note 10)
|
2,517
|
|
|
(4,829
|
)
|
|
(15,689
|
)
|
|
(5,474
|
)
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
To equity income:
|
|
|
|
|
|
|
|
|
|
|
|
Realized loss on qualifying cash flow hedging instruments
|
868
|
|
|
585
|
|
|
2,591
|
|
|
1,538
|
|
Other comprehensive income (loss)
|
3,385
|
|
|
(4,244
|
)
|
|
(13,098
|
)
|
|
(3,936
|
)
|
Comprehensive income
|
58,238
|
|
|
6,065
|
|
|
53,498
|
|
|
136,459
|
|
Non-controlling interest in comprehensive income
|
4,999
|
|
|
2,811
|
|
|
7,954
|
|
|
11,736
|
|
General and limited partners' interest in comprehensive income
|
53,239
|
|
|
3,254
|
|
|
45,544
|
|
|
124,723
|
|
|
As at September 30, 2016
|
|
As at December 31, 2015
|
||
|
$
|
|
$
|
||
ASSETS
|
|
|
|
||
Current
|
|
|
|
||
Cash and cash equivalents
|
268,395
|
|
|
102,481
|
|
Restricted cash – current
(notes 7 and 10)
|
5,296
|
|
|
6,600
|
|
Accounts receivable, including non-trade of $11,915 (2015 – $7,058)
|
16,175
|
|
|
22,081
|
|
Prepaid expenses
|
4,501
|
|
|
4,469
|
|
Current portion of derivative assets
(note 10)
|
21
|
|
|
—
|
|
Current portion of net investments in direct financing leases
(note 5)
|
18,788
|
|
|
20,606
|
|
Advances to affiliates
(note 9b)
|
15,568
|
|
|
13,026
|
|
Total current assets
|
328,744
|
|
|
169,263
|
|
|
|
|
|
||
Restricted cash – long-term
(notes 7, 10 and 11b)
|
94,931
|
|
|
104,919
|
|
|
|
|
|
||
Vessels and equipment
|
|
|
|
||
At cost, less accumulated depreciation of $678,728 (2015 – $666,710)
|
1,417,825
|
|
|
1,595,077
|
|
Vessels under capital leases, at cost, less accumulated depreciation
of $64,971 (2015 – $56,316) (note 5) |
488,245
|
|
|
88,215
|
|
Advances on newbuilding contracts
(note 9d)
|
314,766
|
|
|
424,868
|
|
Total vessels and equipment
|
2,220,836
|
|
|
2,108,160
|
|
Investments in and advances to equity accounted joint ventures
(notes 6
and 9a)
|
935,246
|
|
|
883,731
|
|
Net investments in direct financing leases
(note 5)
|
629,608
|
|
|
646,052
|
|
Other assets
|
6,954
|
|
|
20,811
|
|
Derivative assets
(note 10)
|
2,397
|
|
|
5,623
|
|
Intangible assets – net
|
72,148
|
|
|
78,790
|
|
Goodwill – liquefied gas segment
|
35,631
|
|
|
35,631
|
|
Total assets
|
4,326,495
|
|
|
4,052,980
|
|
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
|
||
Current
|
|
|
|
||
Accounts payable
|
2,934
|
|
|
2,770
|
|
Accrued liabilities
(note 10)
|
31,431
|
|
|
37,456
|
|
Unearned revenue
|
16,613
|
|
|
19,608
|
|
Current portion of long-term debt
(note 7)
|
168,927
|
|
|
197,197
|
|
Current obligations under capital lease
(note 5)
|
67,669
|
|
|
4,546
|
|
Current portion of in-process contracts
|
15,384
|
|
|
12,173
|
|
Current portion of derivative liabilities
(note 10)
|
87,381
|
|
|
52,083
|
|
Advances from affiliates
(notes 9b and 10)
|
13,053
|
|
|
22,987
|
|
Total current liabilities
|
403,392
|
|
|
348,820
|
|
Long-term debt
(note 7)
|
1,797,270
|
|
|
1,802,012
|
|
Long-term obligations under capital lease
(note 5)
|
329,287
|
|
|
54,581
|
|
Long-term unearned revenue
|
10,657
|
|
|
30,333
|
|
Other long-term liabilities
(note 5)
|
62,166
|
|
|
71,152
|
|
In-process contracts
|
10,903
|
|
|
20,065
|
|
Derivative liabilities
(note 10)
|
149,871
|
|
|
182,338
|
|
Total liabilities
|
2,763,546
|
|
|
2,509,301
|
|
Commitments and contingencies
(notes 5, 7, 10, and 11)
|
|
|
|
||
|
|
|
|
||
Equity
|
|
|
|
||
Limited Partners
|
1,494,846
|
|
|
1,472,327
|
|
General Partner
|
49,246
|
|
|
48,786
|
|
Accumulated other comprehensive loss
|
(12,547
|
)
|
|
(2,051
|
)
|
Partners' equity
|
1,531,545
|
|
|
1,519,062
|
|
Non-controlling interest
|
31,404
|
|
|
24,617
|
|
Total equity
|
1,562,949
|
|
|
1,543,679
|
|
Total liabilities and total equity
|
4,326,495
|
|
|
4,052,980
|
|
|
Nine Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2015
|
||
|
$
|
|
$
|
||
Cash and cash equivalents provided by (used for)
|
|
|
|
||
|
|
|
|
||
OPERATING ACTIVITIES
|
|
|
|
||
Net income
|
66,596
|
|
|
140,395
|
|
Non-cash items:
|
|
|
|
||
Unrealized loss on non-designated derivative instruments
(note 10)
|
31,276
|
|
|
7,879
|
|
Depreciation and amortization
|
70,521
|
|
|
69,251
|
|
Loss on sale of vessels
|
27,439
|
|
|
—
|
|
Unrealized foreign currency exchange gain (loss) and other
(notes 7 and 10)
|
(4,476
|
)
|
|
(10,837
|
)
|
Equity income, net of dividends received of $32,851 (2015 – $89,041)
|
(19,728
|
)
|
|
28,458
|
|
Ineffective portion on qualifying cash flow hedging instruments included in interest expense
|
1,044
|
|
|
—
|
|
Change in operating assets and liabilities
|
(15,177
|
)
|
|
(26,766
|
)
|
Expenditures for dry docking
|
(6,574
|
)
|
|
(4,182
|
)
|
Net operating cash flow
|
150,921
|
|
|
204,198
|
|
|
|
|
|
||
FINANCING ACTIVITIES
|
|
|
|
||
Proceeds from issuance of long-term debt
|
259,922
|
|
|
314,412
|
|
Debt issuance costs
|
(562
|
)
|
|
(1,796
|
)
|
Scheduled repayments of long-term debt
|
(141,505
|
)
|
|
(88,562
|
)
|
Prepayments of long-term debt
|
(195,789
|
)
|
|
(90,000
|
)
|
Scheduled repayments of capital lease obligations
|
(17,477
|
)
|
|
(3,305
|
)
|
Decrease (increase) in restricted cash
|
13,086
|
|
|
(24,616
|
)
|
Proceeds from equity offerings, net of offering costs
|
—
|
|
|
34,548
|
|
Cash distributions paid
|
(34,099
|
)
|
|
(191,094
|
)
|
Dividends paid to non-controlling interest
|
(1,167
|
)
|
|
(1,612
|
)
|
Net financing cash flow
|
(117,591
|
)
|
|
(52,025
|
)
|
|
|
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||
Capital contributions to equity accounted joint ventures
|
(32,994
|
)
|
|
(25,719
|
)
|
Loan repayments from equity accounted joint ventures
|
—
|
|
|
23,744
|
|
Receipts from direct financing leases
|
18,262
|
|
|
10,877
|
|
Proceeds from sale of vessels
|
94,311
|
|
|
—
|
|
Proceeds from sale-leaseback of vessels
|
355,306
|
|
|
—
|
|
Expenditures for vessels and equipment
|
(302,301
|
)
|
|
(166,541
|
)
|
Net investing cash flow
|
132,584
|
|
|
(157,639
|
)
|
Increase (decrease) in cash and cash equivalents
|
165,914
|
|
|
(5,466
|
)
|
Cash and cash equivalents, beginning of the period
|
102,481
|
|
|
159,639
|
|
Cash and cash equivalents, end of the period
|
268,395
|
|
|
154,173
|
|
|
TOTAL EQUITY
|
||||||||||||||||
|
Partners’ Equity
|
|
|
|
|
||||||||||||
|
Limited
Partners
|
|
General
Partner
|
|
Accumulated Other Comprehensive
Loss
|
|
Non- controlling Interest
|
|
Total
|
||||||||
|
Number of
Common Units
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Balance as at December 31, 2015
|
79,551
|
|
|
1,472,327
|
|
|
48,786
|
|
|
(2,051
|
)
|
|
24,617
|
|
|
1,543,679
|
|
Net income
|
—
|
|
|
54,919
|
|
|
1,121
|
|
|
—
|
|
|
10,556
|
|
|
66,596
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,496
|
)
|
|
(2,602
|
)
|
|
(13,098
|
)
|
Cash distributions
|
—
|
|
|
(33,417
|
)
|
|
(682
|
)
|
|
—
|
|
|
—
|
|
|
(34,099
|
)
|
Dividends paid to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,167
|
)
|
|
(1,167
|
)
|
Equity based compensation,
net of tax of $210 (note 13) |
21
|
|
|
1,017
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
1,038
|
|
Balance as at September 30, 2016
|
79,572
|
|
|
1,494,846
|
|
|
49,246
|
|
|
(12,547
|
)
|
|
31,404
|
|
|
1,562,949
|
|
1.
|
Basis of Presentation
|
3.
|
Financial Instruments
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||
|
Fair
Value
Hierarchy
Level
|
|
Carrying
Amount
Asset
(Liability)
$
|
|
Fair
Value
Asset
(Liability)
$
|
|
Carrying
Amount
Asset
(Liability)
$
|
|
Fair
Value
Asset
(Liability)
$
|
||||
Recurring:
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents and restricted cash
|
Level 1
|
|
368,622
|
|
|
368,622
|
|
|
214,000
|
|
|
214,000
|
|
Derivative instruments
(note 10)
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements
|
Level 2
|
|
(129,148
|
)
|
|
(129,148
|
)
|
|
(104,137
|
)
|
|
(104,137
|
)
|
Interest rate swaption agreements – assets
|
Level 2
|
|
1,398
|
|
|
1,398
|
|
|
5,623
|
|
|
5,623
|
|
Interest rate swaption agreements – liabilities
|
Level 2
|
|
(18,946
|
)
|
|
(18,946
|
)
|
|
(6,406
|
)
|
|
(6,406
|
)
|
Cross-currency swap agreements
|
Level 2
|
|
(93,607
|
)
|
|
(93,607
|
)
|
|
(128,782
|
)
|
|
(128,782
|
)
|
Other derivative
(note 9c)
|
Level 3
|
|
810
|
|
|
810
|
|
|
(6,296
|
)
|
|
(6,296
|
)
|
Other:
|
|
|
|
|
|
|
|
|
|
||||
Advances to equity accounted joint ventures
(note 6)
|
(i)
|
|
185,280
|
|
|
(i)
|
|
|
159,870
|
|
|
(i)
|
|
Long-term receivable included in accounts receivable and other assets
(ii)
|
Level 3
|
|
12,259
|
|
|
12,244
|
|
|
16,453
|
|
|
16,427
|
|
Long-term debt – public
(note 7)
|
Level 1
|
|
(323,904
|
)
|
|
(318,503
|
)
|
|
(291,247
|
)
|
|
(288,333
|
)
|
Long-term debt – non-public
(note 7)
|
Level 2
|
|
(1,642,293
|
)
|
|
(1,589,801
|
)
|
|
(1,707,962
|
)
|
|
(1,677,139
|
)
|
(i)
|
The advances to equity accounted joint ventures together with the Partnership’s equity investments in the joint ventures form the net aggregate carrying value of the Partnership’s interests in the joint ventures in these consolidated financial statements. The fair values of the individual components of such aggregate interests are not determinable.
|
(ii)
|
As described in Note 3 to the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year-ended
December 31, 2015
, the estimated fair value of the non-interest bearing receivable from BG International Limited (or
BG
) is based on the remaining future fixed payments as well as an estimated discount rate. The estimated fair value of this receivable as of
September 30, 2016
was
$12.2 million
(
December 31, 2015
–
$16.4 million
) using a discount rate of
8.0%
. As there is no market rate for the equivalent of an unsecured non-interest bearing receivable from BG, the discount rate is based on unsecured debt instruments of similar maturity held, adjusted for a liquidity premium. A higher or lower discount rate would result in a lower or higher fair value asset.
|
|
|
Nine Months Ended September 30,
|
||||
|
|
2016
|
|
2015
|
||
|
|
$
|
|
$
|
||
Fair value at beginning of period
|
|
(6,296
|
)
|
|
(2,137
|
)
|
Realized and unrealized gains (losses) included in earnings
|
|
4,550
|
|
|
(3,624
|
)
|
Settlement payments
|
|
2,556
|
|
|
1,207
|
|
Fair value at end of period
|
|
810
|
|
|
(4,554
|
)
|
4.
|
Segment Reporting
|
|
|
Three Months Ended September 30,
|
||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||
|
|
Liquefied Gas
Segment
$
|
|
Conventional
Tanker
Segment
$
|
|
Total
$
|
|
Liquefied Gas
Segment $
|
|
Conventional
Tanker
Segment
$
|
|
Total
$
|
||||||
Voyage revenues
|
|
87,260
|
|
|
13,398
|
|
|
100,658
|
|
|
75,142
|
|
|
23,273
|
|
|
98,415
|
|
Voyage expenses
|
|
(175
|
)
|
|
(180
|
)
|
|
(355
|
)
|
|
—
|
|
|
(240
|
)
|
|
(240
|
)
|
Vessel operating expenses
|
|
(16,751
|
)
|
|
(5,304
|
)
|
|
(22,055
|
)
|
|
(16,260
|
)
|
|
(8,059
|
)
|
|
(24,319
|
)
|
Depreciation and amortization
|
|
(19,317
|
)
|
|
(4,724
|
)
|
|
(24,041
|
)
|
|
(17,268
|
)
|
|
(5,205
|
)
|
|
(22,473
|
)
|
General and administrative expenses
(i)
|
|
(3,008
|
)
|
|
(565
|
)
|
|
(3,573
|
)
|
|
(3,916
|
)
|
|
(1,760
|
)
|
|
(5,676
|
)
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,510
|
)
|
|
(3,510
|
)
|
Income from vessel operations
|
|
48,009
|
|
|
2,625
|
|
|
50,634
|
|
|
37,698
|
|
|
4,499
|
|
|
42,197
|
|
Equity income
|
|
13,514
|
|
|
—
|
|
|
13,514
|
|
|
13,523
|
|
|
—
|
|
|
13,523
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||
|
|
Liquefied Gas
Segment
$
|
|
Conventional
Tanker
Segment
$
|
|
Total
$
|
|
Liquefied Gas
Segment
$
|
|
Conventional
Tanker
Segment
$
|
|
Total
$
|
||||||
Voyage revenues
|
|
250,342
|
|
|
45,328
|
|
|
295,670
|
|
|
228,542
|
|
|
65,807
|
|
|
294,349
|
|
Voyage expenses
|
|
(418
|
)
|
|
(936
|
)
|
|
(1,354
|
)
|
|
—
|
|
|
(931
|
)
|
|
(931
|
)
|
Vessel operating expenses
|
|
(48,717
|
)
|
|
(17,603
|
)
|
|
(66,320
|
)
|
|
(46,693
|
)
|
|
(23,362
|
)
|
|
(70,055
|
)
|
Depreciation and amortization
|
|
(58,476
|
)
|
|
(12,045
|
)
|
|
(70,521
|
)
|
|
(53,578
|
)
|
|
(15,673
|
)
|
|
(69,251
|
)
|
General and administrative expenses
(i)
|
|
(12,049
|
)
|
|
(2,816
|
)
|
|
(14,865
|
)
|
|
(14,755
|
)
|
|
(4,697
|
)
|
|
(19,452
|
)
|
Loss on sale of vessels
|
|
—
|
|
|
(27,439
|
)
|
|
(27,439
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,510
|
)
|
|
(3,510
|
)
|
Income (loss) from vessel operations
|
|
130,682
|
|
|
(15,511
|
)
|
|
115,171
|
|
|
113,516
|
|
|
17,634
|
|
|
131,150
|
|
Equity income
|
|
52,579
|
|
|
—
|
|
|
52,579
|
|
|
60,583
|
|
|
—
|
|
|
60,583
|
|
(i)
|
Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||
|
|
$
|
|
$
|
||
Total assets of the liquefied gas segment
|
|
3,813,347
|
|
|
3,550,396
|
|
Total assets of the conventional tanker segment
|
|
208,509
|
|
|
360,527
|
|
Unallocated:
|
|
|
|
|
||
Cash and cash equivalents
|
|
268,395
|
|
|
102,481
|
|
Accounts receivable and prepaid expenses
|
|
20,676
|
|
|
26,550
|
|
Advances to affiliates
|
|
15,568
|
|
|
13,026
|
|
Consolidated total assets
|
|
4,326,495
|
|
|
4,052,980
|
|
5.
|
Vessel Charters
|
|
Remainder of 2016
|
2017
|
2018
|
2019
|
2020
|
|||||
Vessel Charters
(i)
|
$
|
$
|
$
|
$
|
$
|
|||||
Charters-in – capital leases
(ii)
|
9,485
|
|
61,019
|
|
57,361
|
|
30,065
|
|
30,147
|
|
|
|
|
|
|
|
|||||
Charters-out – operating leases
(iii)
|
109,164
|
|
337,105
|
|
372,902
|
|
404,480
|
|
393,827
|
|
Charters-out – direct financing leases
(iv)
|
19,435
|
|
218,386
|
|
187,977
|
|
53,341
|
|
53,487
|
|
|
128,599
|
|
555,491
|
|
560,879
|
|
457,821
|
|
447,314
|
|
(i)
|
The Partnership owns
69%
of Teekay BLT Corporation (or
Teekay Tangguh Joint Venture
) and the Teekay Tangguh Joint Venture is a party to operating leases whereby it is leasing the
Tangguh Hiri
and
Tangguh Sago
liquefied natural gas (or
LNG
) carriers (or the
Tangguh LNG Carriers
) to a third party, which is in turn leasing the vessels back to the joint venture. The table does not include the Partnership’s minimum charter hire payments to be paid and received under these leases, which are described in more detail in Note 5 to the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended
December 31, 2015
. Under the terms of the leasing arrangement for the Tangguh LNG Carriers, whereby the Teekay Tangguh Joint Venture is the lessee, the lessors claim tax depreciation on its lease of these vessels. As is typical in these types of leasing arrangements, tax and change of law risks are assumed by the lessee. Lease payments under the lease arrangements are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lessor is entitled to increase the lease payments to maintain its agreed after-tax margin.
|
(ii)
|
As at
September 30, 2016
, the Partnership was a party, as lessee, to capital leases on
two
Suezmax tankers, the
Teide Spirit
and
Toledo Spirit
. Under these capital leases, the owner has the option to require the Partnership to purchase the
two
vessels. The charterer, who is also the owner, also has the option to cancel the charter contracts. The amounts in the table assume the owner will not exercise its options to require the Partnership to purchase either of the vessels from the owner, but rather it assumes the owner will cancel the charter contracts when the cancellation right is first exercisable, which is the thirteenth anniversary of each respective contract in
2017
and
2018
.
|
(iii)
|
Minimum scheduled future operating lease revenues do not include revenue generated from new contracts entered into after
September 30, 2016
, revenue from unexercised option periods of contracts that existed on
September 30, 2016
, revenues from vessels in the Partnership's equity accounted investments, or variable or contingent revenues. Therefore, the minimum scheduled future operating lease revenues should not be construed to reflect total charter hire revenues that may be recognized for any of the years.
|
(iv)
|
As described in Note 5 to the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended
December 31, 2015
, the Tangguh LNG Carriers’ time-charter contracts and the
two
bareboat charter contracts to Awilco LNG ASA are accounted for as direct financing leases.
|
|
September 30, 2016
|
December 31, 2015
|
||
|
$
|
$
|
||
U.S. Dollar-denominated Revolving Credit Facilities due from 2016 to 2018
|
390,583
|
|
329,222
|
|
U.S. Dollar-denominated Term Loans due from 2018 to 2026
|
1,023,153
|
|
1,150,436
|
|
Norwegian Kroner-denominated Bonds due from 2017 to 2020
|
325,627
|
|
294,016
|
|
Euro-denominated Term Loans due from 2018 to 2023
|
238,652
|
|
241,798
|
|
Total principal
|
1,978,015
|
|
2,015,472
|
|
Unamortized discount and debt issuance costs
|
(11,818
|
)
|
(16,263
|
)
|
Total debt
|
1,966,197
|
|
1,999,209
|
|
Less current portion
|
(168,927
|
)
|
(197,197
|
)
|
Long-term debt
|
1,797,270
|
|
1,802,012
|
|
8.
|
Income Tax
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Current
|
|
(209
|
)
|
|
(258
|
)
|
|
(722
|
)
|
|
(517
|
)
|
Deferred
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226
|
|
Income tax expense
|
|
(209
|
)
|
|
(258
|
)
|
|
(722
|
)
|
|
(291
|
)
|
9.
|
Related Party Transactions
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||
|
|
$
|
|
$
|
|
$
|
|
$
|
||||
Revenues
(i)
|
|
9,429
|
|
|
7,727
|
|
|
28,075
|
|
|
27,735
|
|
Vessel operating expenses
|
|
(5,107
|
)
|
|
(4,714
|
)
|
|
(15,023
|
)
|
|
(14,337
|
)
|
General and administrative expenses
(ii)
|
|
(3,437
|
)
|
|
(3,658
|
)
|
|
(8,666
|
)
|
|
(11,326
|
)
|
General and administrative expenses
deferred and capitalized (iii) |
|
(116
|
)
|
|
—
|
|
|
(442
|
)
|
|
—
|
|
10.
|
Derivative Instruments and Hedging Activities
|
|
|
|
|
Floating Rate Receivable
|
|
|
|
|
|
|
||||||
Principal
Amount
NOK
|
|
Principal
Amount
$
|
|
Reference Rate
|
|
Margin
|
|
Fixed Rate
Payable
|
|
Fair Value /
Carrying
Amount of
(Liability)
$
|
|
Weighted-
Average
Remaining
Term (Years)
|
||||
700,000
|
|
|
125,000
|
|
NIBOR
|
|
5.25
|
%
|
|
6.88
|
%
|
|
(39,059
|
)
|
|
0.6
|
900,000
|
|
|
150,000
|
|
NIBOR
|
|
4.35
|
%
|
|
6.43
|
%
|
|
(41,722
|
)
|
|
1.9
|
1,000,000
|
|
|
134,000
|
|
NIBOR
|
|
3.70
|
%
|
|
5.92
|
%
|
|
(12,826
|
)
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
(93,607
|
)
|
|
|
|
|
Interest
Rate
Index
|
|
Principal
Amount
$
|
|
Fair
Value /
Carrying
Amount of
(Liability)
$
|
|
Weighted-
Average
Remaining
Term
(years)
|
|
Fixed
Interest
Rate
(%) (i) |
||
LIBOR-Based Debt:
|
|
|
|
|
|
|
|
|
|
|
||
U.S. Dollar-denominated interest rate swaps
|
|
LIBOR
|
|
90,000
|
|
|
(7,151
|
)
|
|
1.9
|
|
4.9
|
U.S. Dollar-denominated interest rate swaps
|
|
LIBOR
|
|
100,000
|
|
|
(2,356
|
)
|
|
0.3
|
|
5.3
|
U.S. Dollar-denominated interest rate swaps
(ii)
|
|
LIBOR
|
|
156,250
|
|
|
(34,865
|
)
|
|
12.3
|
|
5.2
|
U.S. Dollar-denominated interest rate swaps
(ii)
|
|
LIBOR
|
|
53,557
|
|
|
(2,079
|
)
|
|
4.8
|
|
2.8
|
U.S. Dollar-denominated interest rate swaps
(iii)
|
|
LIBOR
|
|
320,000
|
|
|
(30,358
|
)
|
|
1.3
|
|
3.4
|
U.S. Dollar-denominated interest rate swaps
(iv)
|
|
LIBOR
|
|
110,500
|
|
|
(1,708
|
)
|
|
2.3
|
|
1.7
|
U.S. Dollar-denominated interest rate swaps
(v)
|
|
LIBOR
|
|
197,629
|
|
|
(9,718
|
)
|
|
9.2
|
|
2.3
|
EURIBOR-Based Debt:
|
|
|
|
|
|
|
||||||
Euro-denominated interest rate swaps
(vi)
|
|
EURIBOR
|
|
238,652
|
|
|
(40,913
|
)
|
|
4.2
|
|
3.1
|
|
|
|
|
|
|
(129,148
|
)
|
|
|
|
|
(i)
|
Excludes the margins the Partnership pays on its floating-rate term loans, which, at
September 30, 2016
, ranged from
0.30%
to
2.80%
.
|
(ii)
|
Principal amount reduces semi-annually.
|
(iii)
|
These interest rate swaps are being used to economically hedge expected interest payments on future debt that is planned to be outstanding from
2017
to
2024
. These interest rate swaps are subject to mandatory early termination in
2017
and
2018
whereby the swaps will be settled based on their fair value at that time.
|
(iv)
|
Principal amount reduces quarterly.
|
(v)
|
Principal amount reduces quarterly commencing December 2017.
|
(vi)
|
Principal amount reduces monthly to
70.1 million
Euros (
$78.8 million
) by the maturity dates of the swap agreements.
|
|
|
Interest
Rate
Index
|
|
Principal
Amount
$
|
|
Start Date
|
|
Carrying
Amount of
Assets
(Liability) $
|
|
Remaining
Term
(Years)
|
|
Fixed
Interest
Rate
(%)
|
|
Interest rate swaption - Call Option
|
|
LIBOR
|
|
155,000
(i)
|
|
April 28, 2017
|
|
21
|
|
|
7.5
|
|
3.3
|
Interest rate swaption - Put Option
|
|
LIBOR
|
|
155,000
(i)
|
|
April 28, 2017
|
|
(7,268
|
)
|
|
7.5
|
|
2.2
|
Interest rate swaption - Call Option
|
|
LIBOR
|
|
160,000
(ii)
|
|
January 31, 2018
|
|
458
|
|
|
8.0
|
|
3.1
|
Interest rate swaption - Put Option
|
|
LIBOR
|
|
160,000
(ii)
|
|
January 31, 2018
|
|
(6,291
|
)
|
|
8.0
|
|
2.0
|
Interest rate swaption - Call Option
|
|
LIBOR
|
|
160,000
(iii)
|
|
July 16, 2018
|
|
919
|
|
|
8.0
|
|
2.9
|
Interest rate swaption - Put Option
|
|
LIBOR
|
|
160,000
(iii)
|
|
July 16, 2018
|
|
(5,387
|
)
|
|
8.0
|
|
1.8
|
(i)
|
Amortizing every three months from
$155.0 million
in April 2017 to
$85.4 million
in October 2024.
|
(ii)
|
Amortizing every three months from
$160.0 million
in January 2018 to
$82.5 million
in January 2026.
|
(iii)
|
Amortizing every three months from
$160.0 million
in July 2018 to
$82.5 million
in July 2026.
|
|
|
Current portion of derivative assets $
|
|
Derivative
assets $
|
|
Accrued
liabilities/
Advances from
affiliates $
|
|
Current
portion of
derivative
liabilities $
|
|
Derivative
liabilities $
|
|||||
As at September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
(3,686
|
)
|
|
(36,096
|
)
|
|
(89,366
|
)
|
Interest rate swaption agreements
|
|
21
|
|
|
1,377
|
|
|
—
|
|
|
(7,268
|
)
|
|
(11,678
|
)
|
Cross-currency swap agreements
|
|
—
|
|
|
—
|
|
|
(963
|
)
|
|
(43,817
|
)
|
|
(48,827
|
)
|
Toledo Spirit time-charter derivative
|
|
—
|
|
|
1,020
|
|
|
(10
|
)
|
|
(200
|
)
|
|
—
|
|
|
|
21
|
|
|
2,397
|
|
|
(4,659
|
)
|
|
(87,381
|
)
|
|
(149,871
|
)
|
As at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap agreements
|
|
—
|
|
|
—
|
|
|
(6,833
|
)
|
|
(41,028
|
)
|
|
(56,276
|
)
|
Interest rate swaption agreements
|
|
—
|
|
|
5,623
|
|
|
—
|
|
|
—
|
|
|
(6,406
|
)
|
Cross-currency swap agreements
|
|
—
|
|
|
—
|
|
|
(1,181
|
)
|
|
(9,755
|
)
|
|
(117,846
|
)
|
Toledo Spirit time-charter derivative
|
|
—
|
|
|
—
|
|
|
(3,186
|
)
|
|
(1,300
|
)
|
|
(1,810
|
)
|
|
|
—
|
|
|
5,623
|
|
|
(11,200
|
)
|
|
(52,083
|
)
|
|
(182,338
|
)
|
|
|
Three Months Ended September 30,
|
||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||
|
|
Realized
gains (losses) |
|
Unrealized
gains (losses) |
|
Total
|
|
Realized
gains (losses) |
|
Unrealized
gains (losses) |
|
Total
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Interest rate swap agreements
|
|
(6,494
|
)
|
|
8,436
|
|
|
1,942
|
|
|
(7,232
|
)
|
|
(12,232
|
)
|
|
(19,464
|
)
|
Interest rate swaption agreements
|
|
—
|
|
|
1,992
|
|
|
1,992
|
|
|
—
|
|
|
(5,927
|
)
|
|
(5,927
|
)
|
Toledo Spirit time-charter derivative
|
|
(10
|
)
|
|
1,080
|
|
|
1,070
|
|
|
326
|
|
|
(1,770
|
)
|
|
(1,444
|
)
|
|
|
(6,504
|
)
|
|
11,508
|
|
|
5,004
|
|
|
(6,906
|
)
|
|
(19,929
|
)
|
|
(26,835
|
)
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||
|
|
Realized
gains (losses) |
|
Unrealized
gains (losses) |
|
Total
|
|
Realized
gains (losses) |
|
Unrealized
gains (losses) |
|
Total
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Interest rate swap agreements
|
|
(19,750
|
)
|
|
(18,441
|
)
|
|
(38,191
|
)
|
|
(21,856
|
)
|
|
835
|
|
|
(21,021
|
)
|
Interest rate swaption agreements
|
|
—
|
|
|
(16,765
|
)
|
|
(16,765
|
)
|
|
—
|
|
|
(5,334
|
)
|
|
(5,334
|
)
|
Toledo Spirit time-charter derivative
|
|
620
|
|
|
3,930
|
|
|
4,550
|
|
|
(244
|
)
|
|
(3,380
|
)
|
|
(3,624
|
)
|
|
|
(19,130
|
)
|
|
(31,276
|
)
|
|
(50,406
|
)
|
|
(22,100
|
)
|
|
(7,879
|
)
|
|
(29,979
|
)
|
Three Months Ended September 30, 2016
|
|
|
Three Months Ended September 30, 2015
|
||||||||||
Effective Portion Recognized in AOCI
(i)
$
|
|
Effective Portion Reclassified from AOCI
(ii)
$
|
Ineffective Portion
(iii)
$
|
|
|
Effective Portion Recognized in AOCI
(i)
$
|
|
Effective Portion Reclassified from AOCI
(ii)
$
|
Ineffective Portion
(iii)
$
|
||||
842
|
|
—
|
(130
|
)
|
Interest expense
|
|
—
|
|
|
—
|
|
—
|
|
842
|
|
—
|
(130
|
)
|
|
|
—
|
|
|
—
|
|
—
|
|
Nine Months Ended September 30, 2016
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||
Effective Portion Recognized in AOCI
(i)
$
|
|
Effective Portion Reclassified from AOCI
(ii)
$
|
Ineffective Portion
(iii)
$
|
|
|
Effective Portion Recognized in AOCI
(i)
$
|
|
Effective Portion Reclassified from AOCI
(ii)
$
|
Ineffective Portion
(iii)
$
|
||||
(8,673)
|
|
—
|
(1,044
|
)
|
Interest expense
|
|
—
|
|
|
—
|
|
—
|
|
(8,673)
|
|
—
|
(1,044
|
)
|
|
|
—
|
|
|
—
|
|
—
|
|
(i)
|
Effective portion of designated and qualifying cash flow hedges recognized in other comprehensive income (loss).
|
(ii)
|
Effective portion of designated and qualifying cash flow hedges recorded in accumulated other comprehensive loss (or
AOCI
) during the term of the hedging relationship and reclassified to earnings.
|
(iii)
|
Ineffective portion of designated and qualifying cash flow hedges.
|
11.
|
Commitments and Contingencies
|
(i)
|
As at
September 30, 2016
, the Partnership had
nine
LNG carrier newbuildings on order which are scheduled for delivery between 2017 and 2019. These commitment amounts are described in more detail in Note 14 of the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year-ended
December 31, 2015
.
|
(ii)
|
The commitment amounts relating to the Partnership’s share of costs for newbuilding and other construction contracts in the Partnership’s equity accounted joint ventures are based on the Partnership’s ownership percentage in each respective joint venture as of
September 30, 2016
. These commitments are described in more detail in Note 14 of the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year-ended
December 31, 2015
. As of
September 30, 2016
, based on the Partnership's ownership percentage in each respective joint venture, the Partnership's equity accounted joint ventures has secured
$269 million
of financing related to
$236 million
of LNG and LPG carrier newbuilding commitments included in the table above.
|
12.
|
Total Capital and Net Income Per Unit
|
13.
|
Unit-Based Compensation
|
14.
|
Restructuring Charges
|
(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
|
Three Months Ended September 30,
|
% Change
|
||||
2016
|
2015
|
|||||
Voyage revenues
|
87,260
|
|
75,142
|
|
16.1
|
|
Voyage expenses
|
(175
|
)
|
—
|
|
100.0
|
|
Net voyage revenues
|
87,085
|
|
75,142
|
|
15.9
|
|
Vessel operating expenses
|
(16,751
|
)
|
(16,260
|
)
|
3.0
|
|
Depreciation and amortization
|
(19,317
|
)
|
(17,268
|
)
|
11.9
|
|
General and administrative expenses
(1)
|
(3,008
|
)
|
(3,916
|
)
|
(23.2
|
)
|
Income from vessel operations
|
48,009
|
|
37,698
|
|
27.4
|
|
Operating Data:
|
|
|
|
|||
Revenue Days (A)
|
1,893
|
|
1,721
|
|
10.0
|
|
Calendar-Ship-Days (B)
|
1,916
|
|
1,748
|
|
9.6
|
|
Utilization (A)/(B)
|
98.8
|
%
|
98.5
|
%
|
|
(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
|
Nine Months Ended September 30,
|
% Change
|
||||
2016
|
2015
|
|||||
Voyage revenues
|
250,342
|
|
228,542
|
|
9.5
|
|
Voyage expenses
|
(418
|
)
|
—
|
|
100.0
|
|
Net voyage revenues
|
249,924
|
|
228,542
|
|
9.4
|
|
Vessel operating expenses
|
(48,717
|
)
|
(46,693
|
)
|
4.3
|
|
Depreciation and amortization
|
(58,476
|
)
|
(53,578
|
)
|
9.1
|
|
General and administrative expenses
(1)
|
(12,049
|
)
|
(14,755
|
)
|
(18.3
|
)
|
Income from vessel operations
|
130,682
|
|
113,516
|
|
15.1
|
|
Operating Data:
|
|
|
|
|||
Revenue Days (A)
|
5,466
|
|
5,160
|
|
5.9
|
|
Calendar-Ship-Days (B)
|
5,508
|
|
5,187
|
|
6.2
|
|
Utilization (A)/(B)
|
99.2
|
%
|
99.5
|
%
|
|
(1)
|
Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of resources).
|
•
|
increases of $7.7 million and $18.0 million for the
three and nine
months ended
September 30, 2016
, respectively, as a result of the
Creole Spirit
charter contract commencing on February 29, 2016;
|
•
|
an increase of $5.2 million for the
three and nine
months ended
September 30, 2016
as a result of the
Oak Spirit
charter contract commencing on August 1, 2016; and
|
•
|
an increase of $1.3 million for the
three and nine
months ended
September 30, 2016
due to the
Polar Spirit
being off-hire for 27 days in the third quarter of 2015 for a scheduled dry docking.
|
•
|
increases of $1.2 million and $2.7 million for the
three and nine
months ended
September 30, 2016
, respectively, due to the delivery of the
Creole Spirit
on February 18, 2016;
|
•
|
decreases of $1.0 million and $2.3 million for the
three and nine
months ended
September 30, 2016
, respectively, due to the charterer, Teekay Corporation, not being able to find employment for the
Arctic Spirit
and
Polar Spirit
for a portion of 2016, which permitted us to operate the vessels with a reduced average number of crew on board and reduce the amount of repair and maintenance activities performed.
|
(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
|
Three Months Ended September 30,
|
% Change
|
||||
2016
|
2015
|
|||||
Voyage revenues
|
13,398
|
|
23,273
|
|
(42.4
|
)
|
Voyage expenses
|
(180
|
)
|
(240
|
)
|
(25.0
|
)
|
Net voyage revenues
|
13,218
|
|
23,033
|
|
(42.6
|
)
|
Vessel operating expenses
|
(5,304
|
)
|
(8,059
|
)
|
(34.2
|
)
|
Depreciation and amortization
|
(4,724
|
)
|
(5,205
|
)
|
(9.2
|
)
|
General and administrative expenses
(1)
|
(565
|
)
|
(1,760
|
)
|
(67.9
|
)
|
Restructuring charges
|
—
|
|
(3,510
|
)
|
(100.0
|
)
|
Income from vessel operations
|
2,625
|
|
4,499
|
|
(41.7
|
)
|
Operating Data:
|
|
|
|
|||
Revenue Days (A)
|
552
|
|
702
|
|
(21.4
|
)
|
Calendar-Ship-Days (B)
|
552
|
|
736
|
|
(25.0
|
)
|
Utilization (A)/(B)
|
100.0
|
%
|
95.4
|
%
|
|
(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
|
Nine Months Ended September 30,
|
% Change
|
||||
2016
|
2015
|
|||||
Voyage revenues
|
45,328
|
|
65,807
|
|
(31.1
|
)
|
Voyage expenses
|
(936
|
)
|
(931
|
)
|
0.5
|
|
Net voyage revenues
|
44,392
|
|
64,876
|
|
(31.6
|
)
|
Vessel operating expenses
|
(17,603
|
)
|
(23,362
|
)
|
(24.7
|
)
|
Depreciation and amortization
|
(12,045
|
)
|
(15,673
|
)
|
(23.1
|
)
|
General and administrative expenses
(1)
|
(2,816
|
)
|
(4,697
|
)
|
(40.0
|
)
|
Loss on sale of vessels
|
(27,439
|
)
|
—
|
|
100.0
|
|
Restructuring charges
|
—
|
|
(3,510
|
)
|
(100.0
|
)
|
(Loss) income from vessel operations
|
(15,511
|
)
|
17,634
|
|
(188.0
|
)
|
Operating Data:
|
|
|
|
|||
Revenue Days (A)
|
1,887
|
|
2,148
|
|
(12.2
|
)
|
Calendar-Ship-Days (B)
|
1,887
|
|
2,184
|
|
(13.6
|
)
|
Utilization (A)/(B)
|
100.0
|
%
|
98.4
|
%
|
|
(1)
|
Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).
|
•
|
decreases of $5.3 million and $9.0 million for the
three and nine
months ended
September 30, 2016
, respectively, due to the sales of the
Bermuda Spirit
and
Hamilton Spirit
in April 2016 and May 2016, respectively;
|
•
|
a decrease of $3.5 million for the
three and nine
months ended
September 30, 2016
due to our recovery during the corresponding periods of 2015 of crew restructuring charges in that amount from the charterer of the
Alexander Spirit
, who had requested we change the crew nationality on board the vessel (however, because we had a corresponding increase in our restructuring charges, this increase in revenue did not affect our cash flow or net income);
|
•
|
decreases of $0.8 million and $3.5 million for the
three and nine
months ended
September 30, 2016
, respectively, in pass-through vessel operating expenses due to the change in crew nationality on board the
Alexander Spirit
in September 2015 (however, we had corresponding decreases in vessel operating expenses); and
|
•
|
decreases of $1.0 million and $3.1 million for the
three and nine
months ended
September 30, 2016
, respectively, relating to the
European Spirit
,
African Spirit
and
Asian Spirit
upon the charterer exercising its one-year options in September 2015, November 2015 and January 2016, respectively, at lower charter rates than the original charter rates.
|
•
|
decreases of $1.2 million and $3.8 million for the
three and nine
months ended
September 30, 2016
, respectively, in crew wages due to the change in crew nationality on board the
Alexander Spirit
in September 2015; and
|
•
|
decreases of $1.5 million and $2.2 million for the
three and nine
months ended
September 30, 2016
, respectively, due to the sales of the
Bermuda Spirit
and
Hamilton Spirit
in April 2016 and May 2016, respectively.
|
(in thousands of U.S. Dollars)
|
Three Months Ended
|
|||||||||||||
|
Angola
LNG
Carriers
|
Exmar
LNG
Carriers
|
Exmar
LPG
Carriers
|
MALT
LNG
Carriers
|
RasGas 3
LNG
Carriers
|
Other
|
Total
Equity
Income
|
|||||||
Three months ended September 30, 2016
|
7,007
|
|
2,536
|
|
2,978
|
|
(4,232
|
)
|
5,424
|
|
(199
|
)
|
13,514
|
|
Three months ended September 30, 2015
|
(2,709
|
)
|
2,222
|
|
9,325
|
|
(840
|
)
|
5,561
|
|
(36
|
)
|
13,523
|
|
Difference
|
9,716
|
|
314
|
|
(6,347
|
)
|
(3,392
|
)
|
(137
|
)
|
(163
|
)
|
(9
|
)
|
(in thousands of U.S. Dollars)
|
Nine Months Ended
|
|||||||||||||
|
Angola
LNG
Carriers
|
Exmar
LNG
Carriers
|
Exmar
LPG
Carriers
|
MALT
LNG
Carriers
|
RasGas 3
LNG
Carriers
|
Other
|
Total
Equity
Income
|
|||||||
Nine months ended September 30, 2016
|
5,241
|
|
6,718
|
|
14,796
|
|
9,912
|
|
16,329
|
|
(417
|
)
|
52,579
|
|
Nine months ended September 30, 2015
|
9,389
|
|
6,506
|
|
25,863
|
|
3,057
|
|
15,944
|
|
(176
|
)
|
60,583
|
|
Difference
|
(4,148
|
)
|
212
|
|
(11,067
|
)
|
6,855
|
|
385
|
|
(241
|
)
|
(8,004
|
)
|
•
|
increases of $2.3 million and $5.7 million for the
three and nine
months ended
September 30, 2016
, respectively, relating to interest incurred on the capital lease obligation for the
Creole Spirit
commencing upon its delivery in February 2016;
|
•
|
an increase of $1.8 million for the
three and nine
months ended
September 30, 2016
relating to interest incurred on the capital lease obligation for the
Oak Spirit
commencing upon its delivery in July 2016;
|
•
|
increases of $0.2 million and $1.9 million for the
three and nine
months ended
September 30, 2016
, respectively, due to an increase in LIBOR on our floating-rate debt, net of debt repayments during 2016 and 2015; and
|
•
|
increases of $0.1 million and $1.0 million for the
three and nine
months ended
September 30, 2016
, respectively, relating to the ineffective portion of unrealized losses recognized for hedge-accounted swaps entered in January 2016.
|
(in thousands of U.S. Dollars)
|
Three Months Ended September 30,
|
|||||||||||
|
2016
|
2015
|
||||||||||
|
Realized
gains (losses) |
Unrealized
gains (losses) |
Total
|
Realized
gains (losses) |
Unrealized
gains (losses) |
Total
|
||||||
Interest rate swap agreements
|
(6,494
|
)
|
8,436
|
|
1,942
|
|
(7,232
|
)
|
(12,232
|
)
|
(19,464
|
)
|
Interest rate swaption agreements
|
—
|
|
1,992
|
|
1,992
|
|
—
|
|
(5,927
|
)
|
(5,927
|
)
|
Toledo Spirit time-charter derivative
|
(10
|
)
|
1,080
|
|
1,070
|
|
326
|
|
(1,770
|
)
|
(1,444
|
)
|
|
(6,504
|
)
|
11,508
|
|
5,004
|
|
(6,906
|
)
|
(19,929
|
)
|
(26,835
|
)
|
(in thousands of U.S. Dollars)
|
Nine Months Ended September 30,
|
|||||||||||
|
2016
|
2015
|
||||||||||
|
Realized
gains (losses) |
Unrealized
gains (losses) |
Total
|
Realized
gains (losses) |
Unrealized
gains (losses) |
Total
|
||||||
Interest rate swap agreements
|
(19,750
|
)
|
(18,441
|
)
|
(38,191
|
)
|
(21,856
|
)
|
835
|
|
(21,021
|
)
|
Interest rate swaption agreements
|
—
|
|
(16,765
|
)
|
(16,765
|
)
|
—
|
|
(5,334
|
)
|
(5,334
|
)
|
Toledo Spirit time-charter derivative
|
620
|
|
3,930
|
|
4,550
|
|
(244
|
)
|
(3,380
|
)
|
(3,624
|
)
|
|
(19,130
|
)
|
(31,276
|
)
|
(50,406
|
)
|
(22,100
|
)
|
(7,879
|
)
|
(29,979
|
)
|
(in thousands of U.S. Dollars)
|
Nine Months Ended September 30,
|
|||
|
2016
|
2015
|
||
Net cash flow from operating activities
|
150,921
|
|
204,198
|
|
Net cash flow used for financing activities
|
(117,591
|
)
|
(52,025
|
)
|
Net cash flow from (used for) investing activities
|
132,584
|
|
(157,639
|
)
|
|
|
Total
|
|
Remainder of 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
Beyond 2020
|
|||||||
|
|
(in millions of U.S. Dollars)
|
||||||||||||||||||
U.S. Dollar-Denominated Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scheduled repayments
|
|
500.3
|
|
|
21.1
|
|
|
102.0
|
|
|
98.6
|
|
|
54.9
|
|
|
52.7
|
|
171.0
|
|
Repayments at maturity
(2)
|
|
913.4
|
|
|
—
|
|
|
150.0
|
|
|
436.9
|
|
|
31.5
|
|
|
—
|
|
295.0
|
|
Commitments under capital leases
(3)
|
|
545.8
|
|
|
9.5
|
|
|
61.0
|
|
|
57.4
|
|
|
30.1
|
|
|
30.1
|
|
357.7
|
|
Commitments under operating leases
(4)
|
|
301.5
|
|
|
6.0
|
|
|
24.1
|
|
|
24.1
|
|
|
24.1
|
|
|
24.1
|
|
199.1
|
|
Newbuilding installments/shipbuilding supervision
(5)
|
|
3,044.6
|
|
|
158.4
|
|
|
1,054.6
|
|
|
1,072.8
|
|
|
558.9
|
|
|
199.9
|
|
—
|
|
Total U.S. Dollar-Denominated obligations
|
|
5,305.6
|
|
|
195.0
|
|
|
1,391.7
|
|
|
1,689.8
|
|
|
699.5
|
|
|
306.8
|
|
1,022.8
|
|
Euro-Denominated Obligations
(6)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
(7)
|
|
238.7
|
|
|
4.0
|
|
|
16.6
|
|
|
133.3
|
|
|
9.5
|
|
|
10.3
|
|
65.0
|
|
Total Euro-Denominated obligations
|
|
238.7
|
|
|
4.0
|
|
|
16.6
|
|
|
133.3
|
|
|
9.5
|
|
|
10.3
|
|
65.0
|
|
Norwegian Kroner-Denominated Obligations
(6)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Long-term debt
(8)
|
|
325.6
|
|
|
—
|
|
|
51.2
|
|
|
112.7
|
|
|
—
|
|
|
125.2
|
|
36.5
|
|
Total Norwegian Kroner-Denominated obligations
|
|
325.6
|
|
|
—
|
|
|
51.2
|
|
|
112.7
|
|
|
—
|
|
|
125.2
|
|
36.5
|
|
Totals
|
|
5,869.9
|
|
|
199.0
|
|
|
1,459.5
|
|
|
1,935.8
|
|
|
709.0
|
|
|
442.3
|
|
1,124.3
|
|
(1)
|
Excludes expected interest payments of
$9.8 million
(remainder of
2016
),
$28.9 million
(
2017
),
$20.1 million
(
2018
),
$12.7 million
(
2019
),
$11.6 million
(
2020
) and
$38.0 million
(beyond
2020
). Expected interest payments reflect the refinancing completed in November 2016 of one of our revolving credit facilities and are based on the existing interest rates (fixed-rate loans) and LIBOR at
September 30, 2016
, plus margins on debt that has been drawn that
|
(2)
|
The repayment amounts reflect the November 2016 refinancing of one of our revolving credit facilities maturing in 2016 with a new $170.0 million revolving credit facility maturing in November 2017.
|
(3)
|
Includes, in addition to lease payments, amounts we may be or are required to pay to purchase the leased vessels at the end of their respective lease terms. For two of our four capital lease obligations, the lessor has the option to sell two Suezmax tankers under capital lease to us at any time during the remaining lease terms; however, in this table we have assumed the lessor will not exercise its right to sell the two Suezmax tankers to us until after the lease term expire, which is during the years
2017
to
2018
. The purchase price for any Suezmax tanker we are required to purchase would be based on the unamortized portion of the vessel construction financing costs for the vessels, which are included in the table above. We expect to satisfy any such purchase price by assuming the existing vessel financing, although we may be required to obtain separate debt or equity financing to complete any purchases if the lenders do not consent to our assuming the financing obligations. Please read “Item 1 - Financial Statements: Note 5 - Vessel Charters”.
|
(4)
|
We have corresponding leases whereby we are the lessor and expect to receive approximately
$265.6 million
under these leases from the remainder of
2016
to 2029.
|
(5)
|
As of
September 30, 2016
, we have agreements for the construction of nine wholly-owned LNG carrier newbuildings, of which the estimated remaining costs for these newbuildings totaled
$1,537.4 million
, including estimated interest and construction supervision fees.
|
(6)
|
Euro-denominated and NOK-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of
September 30, 2016
.
|
(7)
|
Excludes expected interest payments of
$0.7 million
(remainder of
2016
),
$2.7 million
(
2017
),
$1.4 million
(
2018
),
$0.2 million
(
2019
),
$0.2 million
(
2020
) and
$0.4 million
(beyond
2020
). Expected interest payments are based on EURIBOR at
September 30, 2016
, plus margins that range up to 2.25%, as well as the prevailing U.S. Dollar/Euro exchange rate as of
September 30, 2016
. The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge of certain of our variable-rate debt.
|
(8)
|
The repayment amounts reflect the October 2016 refinancing of a portion of our NOK-denominated bonds maturing in May 2017, with the issuance of a new NOK 900 million ($110 million) of senior unsecured bonds that mature in October 2021 and excludes expected interest payments of
$4.4 million
(remainder of
2016
),
$15.5 million
(
2017
),
$12.4 million
(
2018
),
$8.3 million
(
2019
),
$5.3 million
(
2020
), and
$1.2 million
(beyond
2020
). Expected interest payments are based on NIBOR at
September 30, 2016
, plus margins that range up to 5.25%, as well as the prevailing U.S. Dollar/NOK exchange rate as of
September 30, 2016
. The expected interest payments do not reflect the effect of the related cross-currency swaps that we have used as an economic hedge of our foreign exchange and interest rate exposure associated with our NOK-denominated long-term debt.
|
•
|
our distribution policy and our ability to make cash distributions on our units or any increases in quarterly distributions, the temporary nature of our current reduced distribution level and the impact of cash distribution reductions on our financial position;
|
•
|
the stability and growth of our business and future cash flows;
|
•
|
our future financial condition and results of operations and our future revenues, expenses and capital expenditures, and our expected financial flexibility to pursue capital expenditures, acquisitions and other expansion opportunities;
|
•
|
our liquidity needs, anticipated funds for liquidity needs and the sufficiency of cash flows;
|
•
|
our expected sources of funds for liquidity and working capital needs, our ability to enter into new bank financings and to refinance existing indebtedness and our expected uses of the proceeds from financing transactions;
|
•
|
growth prospects and future trends of the markets in which we operate;
|
•
|
LNG, LPG and tanker market fundamentals, including the balance of supply and demand in the LNG, LPG and tanker markets and spot LNG, LPG and tanker charter rates;
|
•
|
our ability to conduct and operate our business and the business of our subsidiaries in a manner that minimizes taxes imposed upon us and our subsidiaries;
|
•
|
the expected lifespan of our vessels, including our expectations as to any impairment of our vessels;
|
•
|
our expectations and estimates regarding future charter business, including with respect to minimum charter hire payments, revenues and our vessels’ ability to perform to specifications and maintain their hire rates in the future;
|
•
|
our expectations on our customers’ ability to pay for our services, specifically for our six LPG carriers on charter to Skaugen;
|
•
|
our ability to maximize the use of our vessels, including the redeployment or disposition of vessels no longer under long-term charter;
|
•
|
the future resumption of a LNG plant in Yemen operated by YLNG and expected repayment of deferred hire amounts on our two 52% owned vessels, the
Marib Spirit
and
Arwa Spirit
, on charter to YLNG;
|
•
|
expected purchases and deliveries of newbuilding vessels, and the newbuildings’ commencement of service under charter contracts;
|
•
|
expected financing, deliveries, and charter contract commencement dates with respect to the LPG carrier newbuildings in Exmar LPG BVBA;
|
•
|
expected financing for the Yamal LNG Joint Venture;
|
•
|
our expectations regarding the financing, schedule and performance of the Bahrain LNG Joint Venture, and our expectations regarding the supply, modification and charter of the FSU vessel for the project;
|
•
|
expected funding of our proportionate share of the remaining shipyard installment payments for the BG Joint Venture;
|
•
|
the cost of supervision and crew training in relation to the BG Joint Venture, and our expected recovery of a portion of those costs;
|
•
|
the expected technical and operational capabilities of newbuildings, including the benefits of the MEGI twin engines in certain LNG carrier newbuildings;
|
•
|
our ability to maintain long-term relationships with major LNG and LPG importers and exporters and major crude oil companies;
|
•
|
our ability to leverage to our advantage Teekay Corporation’s relationships and reputation in the shipping industry;
|
•
|
our continued ability to enter into long-term, fixed-rate time-charters with our LNG and LPG customers;
|
•
|
obtaining LNG and LPG projects that we or Teekay Corporation bid on;
|
•
|
the expected timing, amount and method of financing for our newbuilding vessels and the possible purchase of two of our leased Suezmax tankers, the
Teide Spirit
and the
Toledo Spirit
;
|
•
|
our expectations regarding whether the UK taxing authority can successfully challenge the tax benefits available under certain of our former and current leasing arrangements, and the potential financial exposure to us if such a challenge is successful;
|
•
|
our hedging activities relating to foreign exchange, interest rate and spot market risks, and the effects of fluctuations in foreign exchange, interest rate and spot market rates on our business and results of operations;
|
•
|
the potential impact of new accounting guidance;
|
•
|
our expectations regarding the possibility of goodwill impairment;
|
•
|
anticipated taxation of our partnership and its subsidiaries; and
|
•
|
our business strategy and other plans and objectives for future operations.
|
|
|
Expected Maturity Date
|
|
|
|
|
|||||||||||||||||||||
|
|
Remainder of 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Liability
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
There-after
|
|
|
|
|
|||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Total
|
|
Rate
(1)
|
|||||||||||||||
|
|
(in millions of U.S. Dollars, except percentages)
|
|||||||||||||||||||||||||
Long-Term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Variable Rate ($U.S.)
(2)
|
|
21.1
|
|
|
252.0
|
|
|
535.5
|
|
|
86.4
|
|
|
52.7
|
|
|
466.0
|
|
|
1,413.7
|
|
|
(1,361.8
|
)
|
|
2.2
|
%
|
Variable Rate (Euro)
(3)(4)
|
|
4.0
|
|
|
16.6
|
|
|
133.3
|
|
|
9.5
|
|
|
10.3
|
|
|
65.0
|
|
|
238.7
|
|
|
(228.0
|
)
|
|
1.2
|
%
|
Variable Rate (NOK)
(4)(5)
|
|
—
|
|
|
51.2
|
|
|
112.7
|
|
|
—
|
|
|
125.2
|
|
|
36.5
|
|
|
325.6
|
|
|
(318.5
|
)
|
|
5.4
|
%
|
Capital Lease Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed-Rate ($U.S.)
(6)
|
|
4.1
|
|
|
40.3
|
|
|
39.1
|
|
|
13.5
|
|
|
14.3
|
|
|
285.7
|
|
|
397.0
|
|
|
(397.0
|
)
|
|
5.5
|
%
|
Average Interest Rate
(7)
|
|
5.5
|
%
|
|
4.9
|
%
|
|
6.1
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
|
|
|
||
Interest Rate Swaps
: (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Contract Amount ($U.S.)
(9)
|
|
2.1
|
|
|
324.5
|
|
|
232.9
|
|
|
155.8
|
|
|
35.3
|
|
|
277.3
|
|
|
1,027.9
|
|
|
(88.2
|
)
|
|
3.5
|
%
|
Average Fixed Pay Rate
(2)
|
|
1.6
|
%
|
|
4.1
|
%
|
|
3.6
|
%
|
|
2.7
|
%
|
|
3.5
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
|
|
|
|
||
Contract Amount (Euro)
(4)(10)
|
|
4.0
|
|
|
16.7
|
|
|
133.3
|
|
|
9.5
|
|
|
10.2
|
|
|
65.0
|
|
|
238.7
|
|
|
(40.9
|
)
|
|
3.1
|
%
|
Average Fixed Pay Rate
(3)
|
|
3.1
|
%
|
|
3.1
|
%
|
|
2.6
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
3.9
|
%
|
|
3.1
|
%
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Rate refers to the weighted-average effective interest rate for our long-term debt and capital lease obligations, including the margin we pay on our floating-rate debt and the average fixed pay rate for our interest rate swap agreements. The average interest rate for our capital lease obligations is the weighted-average interest rate implicit in our lease obligations at the inception of the leases. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our floating-rate term loans, which as of
September 30, 2016
ranged from 0.30% to 2.80%. Please read “Item 1 – Financial Statements: Note 7 – Long-Term Debt”.
|
(2)
|
Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The repayment amounts reflect the refinancing completed in November 2016 of one of our revolving credit facility scheduled to mature in 2016 with a new $170.0 million revolving credit facility maturing in November 2017.
|
(3)
|
Interest payments on Euro-denominated debt and interest rate swaps are based on EURIBOR.
|
(4)
|
Euro-denominated and NOK-denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of
September 30, 2016
.
|
(5)
|
Interest payments on our NOK-denominated debt and on our cross-currency swaps are based on NIBOR. Our NOK 700 million, NOK 900 million, and NOK 1,000 million bonds have been economically hedged with cross-currency swaps, to swap all interest and principal payments into U.S. Dollars, with the respective interest payments fixed at a rate of 6.88%, 6.43%, and 5.92%, respectively, and the transfer of principal locked in at $125.0 million, $150.0 million, and $134.0 million, respectively, upon maturity. The repayment amounts reflect the October 2016 refinancing of a portion of our NOK-denominated bonds maturing in May 2017, with the issuance of a new NOK 900 million ($110 million) of senior unsecured bonds that mature in October 2021. Please see below in the foreign currency fluctuation section and read “Item 1 – Financial Statements: Note 10 – Derivative Instruments and Hedging Activities”.
|
(6)
|
The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable.
|
(7)
|
The average interest rate is the weighted-average interest rate implicit in the capital lease obligations at the inception of the leases. Interest rate adjustments on these leases have corresponding adjustments in charter receipts under the terms of the charter contracts to which these leases relate.
|
(8)
|
Interest rate swaps does not reflect our swaption agreements, whereby we have a one-time option to enter into an interest rate swap at a fixed rate with a third party, and the third party has a one-time option to require us to enter into an interest rate swap at a fixed rate. If we or the third party exercises its option, there will be cash settlements for the fair value of the interest rate swap in lieu of taking delivery of the actual interest rate swap. The net fair value of the interest rate swaption agreements as at
September 30, 2016
was a liability of
$17.5 million
. Please read “Item 1 - Financial Statements: Note 10 - Derivative Instruments and Hedging Activities”.
|
(9)
|
The average variable receive rate for our U.S. Dollar-denominated interest rate swaps is set at 3-month or 6-month LIBOR.
|
(10)
|
The average variable receive rate for our Euro-denominated interest rate swaps is set at 1-month EURIBOR.
|
•
|
REGISTRATION STATEMENT ON FORM S-8 (NO.333-124647) FILED WITH THE SEC ON MAY 5, 2005
|
•
|
REGISTRATION STATEMENT ON FORM F-3 (NO.333-170838) FILED WITH THE SEC ON NOVEMBER 24, 2010
|
•
|
REGISTRATION STATEMENT ON FORM F-3 (NO.333-190783) FILED WITH THE SEC ON AUGUST 22, 2013
|
•
|
REGISTRATION STATEMENT ON FORM F-3ASR (NO.333-197479) FILED WITH THE SEC ON JULY 17, 2014
|
•
|
REGISTRATION STATEMENT ON FORM F-3 (NO.333-197651) FILED WITH THE SEC ON JULY 25, 2014
|
|
|
|
|
TEEKAY LNG PARTNERS L.P.
|
|
|
|
|
|
||
|
|
|
|
By:
|
Teekay GP L.L.C., its General Partner
|
|
|
|
|
||
Date: November 28, 2016
|
|
|
|
By:
|
/s/ Peter Evensen
|
|
|
|
|
Peter Evensen
|
|
|
|
|
|
Chief Executive Officer and Chief Financial Officer
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
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