Teekay LNG Partners Reports Fourth Quarter 2018 and Annual 2018 Results

|GlobeNewswire|About: TGP, TK

Highlights

  • GAAP net income attributable to the partners and preferred unitholders of $6.6 million, GAAP net income per common unit of $0.00 and income from vessel operations of $65.2 million in the fourth quarter of 2018; and $28.4 million, $0.03 per common unit and $147.8 million, respectively, for fiscal 2018.

  • Adjusted net income attributable to the partners and preferred unitholders(1) of $32.6 million and adjusted net income per common unit(1) of $0.32 in the fourth quarter of 2018 (excluding items listed in Appendix A to this release); and $87.7 million and $0.76 per common unit, respectively, for fiscal 2018.

  • Generated total cash flow from vessel operations(1) (CFVO) of $150.1 million in the fourth quarter of 2018 and $515.3 million for fiscal 2018.

  • Since late-December 2018, repurchased over 1.1 million common units at an average price of $11.38 per unit for a total cost of approximately $13 million.

  • Completed the financing of the Yamal Spirit LNG carrier newbuilding, which delivered and commenced its 15-year charter on January 31, 2019.

  • Estimated fiscal 2019 guidance(2) for adjusted net income per common unit(1) of approximately $1.85 to $2.20(2) and total CFVO(1) of $635 million to $660 million.

HAMILTON, Bermuda, Feb. 21, 2019 (GLOBE NEWSWIRE) -- Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (TGP) (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership’s results for the quarter and year ended December 31, 2018.

Consolidated Financial Summary

  Three Months Ended Year Ended
(in thousands of U.S. Dollars except
per unit data)
December 31,
2018
September 30,
2018
December 31,
2017
December 31,
2018
December 31,
2017
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
GAAP FINANCIAL COMPARISON          
Voyage revenues 149,805   123,336   126,307   510,762   432,676  
Income from vessel operations 65,164   46,998   62,378   147,809   148,649  
Equity income 949   14,679   2,992   53,546   9,789  
Net income attributable to the partners
and preferred unitholders
6,579   25,950   39,877   28,369   33,965  
Limited partners’ interest in net income
per common unit
0.00   0.24   0.42   0.03   0.25  
NON-GAAP FINANCIAL COMPARISON          
Adjusted net income attributable to the
partners and preferred unitholders (1)
32,636   19,474   33,972   87,703   93,850  
Limited partners’ interest in adjusted
net income per common unit
0.32   0.16   0.35   0.76   0.98  
Total cash flow from vessel operations
(CFVO) (1)
150,099   132,593   126,833   515,292   449,550  
Distributable cash flow (DCF) (1) 51,211   41,214   52,054   158,882   176,128  


(1)     These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under United States generally accepted accounting principles (GAAP).
(2)     All estimates are as of the date hereof, are approximations and based on current information (including the number of outstanding common units). Actual results may differ materially from these estimates, and the Partnership expressly disclaims any obligation to release publicly any updates or revisions to any such estimates, including to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such estimates are based.
       

Fourth Quarter of 2018 Compared to Fourth Quarter of 2017

GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders for the three months ended December 31, 2018, compared to the same quarter in the prior year, were positively impacted by an increase in earnings due to the deliveries of 12 liquefied natural gas (LNG) carrier newbuildings in the Partnership’s consolidated fleet and equity-accounted joint ventures between October 2017 and December 2018, and higher earnings from the Magellan Spirit, which was chartered-in from the Partnership’s 52 percent-owned joint venture with Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture) commencing in September 2018. These increases were partially offset by a decrease in earnings in 2018 on seven multi-gas carriers following the termination of their previous charter contracts, the sale of three conventional crude oil tankers during 2018, an increase in off-hire days during 2018 for certain of the Partnership’s vessels due to repairs, and an increase in general and administrative expenses, a portion of which is non-recurring.

In addition, GAAP net income attributable to the partners and preferred unitholders was negatively impacted in the three months ended December 31, 2018, compared to the same quarter of the prior year, by various items, including unrealized losses on non-designated and designated derivative instruments and unrealized foreign currency exchange losses.

CEO Commentary

“Once again this quarter, our cash flows and adjusted earnings were up significantly over the prior quarter as the Partnership’s LNG segment grew and certain existing vessels commenced new contracts at firm rates,” commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. “This segment continued its expansion in early-2019 with the delivery of two additional newbuilding LNG carriers, including the Yamal Spirit, which delivered on January 31, 2019, soon after finalizing its dedicated financing facility.” Mr. Kremin continued, “With this latest financing facility now in place, we have completed all of the necessary financings to take delivery of our entire newbuilding orderbook which, at its peak, amounted to approximately $3 billion."

“We expect our LNG segment results to be significantly higher in 2019 primarily due to the delivery of 15 newbuilding LNG carriers during 2018 and throughout 2019 as well as the start-up of the Bahrain LNG regasification terminal in 2019. Collectively, the cash flow associated with these deliveries will allow the Partnership to execute on its balanced capital allocation strategy which will see the Partnership meaningfully delever its balance sheet over the next few years while simultaneously return significant cash flow to unitholders in the form of common unit repurchases and common unit distributions, which will increase by 36 percent commencing this upcoming quarter.” Mr. Kremin continued, “Today, we announced fiscal 2019 financial guidance that would represent increases in adjusted net income per common unit and total CFVO ranging from 143 percent to 190 percent and 23 percent to 28 percent, respectively, compared to our fiscal 2018 results.”

2019 Guidance

Today, the Partnership is providing the below supplementary information relating to the outlook for the Partnership’s estimated fiscal 2019 results which are expected to be significantly higher than fiscal 2018 primarily due to newbuilding deliveries and higher charter rates earned from the vessels trading on short-term contracts:

(in millions of U.S. Dollars except per unit data and percentages) Fiscal 2018 Fiscal 2019E (2) Percentage Increase
over 2018
Adjusted net income attributable to the partners and preferred
unitholders (1)
87.7 170 to 200 94% to 128%
Limited partners' interest in adjusted net income per common unit (1) $0.76 $1.85 to $2.20 143% to 190%
CFVO from consolidated vessels (1) 333.6 420 to 440 26% to 32%
Total CFVO (including share of equity-accounted JVs) (1) 515.3 635 to 660 23% to 28%


(1)     These are non-GAAP financial measures. Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.
(2)     All estimates are as of the date hereof, are approximations, are based on current information (including the number of outstanding common units). Actual results may differ materially from these estimates, and the Partnership expressly disclaims any obligation to release publicly any updates or revisions to any such estimates, including to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such estimates are based.
       

Summary of Recent Events

Torben Spirit Charter

The Torben Spirit LNG Carrier commenced its minimum three-year charter on January 1, 2019 at a charter rate in excess of $100,000 per day for the duration of the contract.

LNG Carrier Newbuilding Deliveries

In December 2018, the Partnership took delivery of one M-Type, Electronically Controlled, Gas Injection (MEGI) LNG carrier newbuilding, the Sean Spirit, which immediately commenced its seven-year charter contract with BP Gas Marketing Limited.

In January 2019, the Partnership’s 20 percent-owned joint venture with China LNG Shipping (Holdings) Limited (China LNG), CETS Investment Management (HK) Co. Ltd. (an affiliate of China National Offshore Oil Corporation (CNOOC)) and BW LNG Investments Pte. Ltd. (the Pan Union Joint Venture), took delivery of one LNG carrier newbuilding, the Pan Africa, which immediately commenced its 20-year charter contract with Royal Dutch Shell (Shell).

In January 2019, the Partnership took delivery of one MEGI LNG carrier newbuilding, the Yamal Spirit, which immediately commenced its 15-year charter with Yamal Trade Pte Ltd. Concurrent with the delivery, the Partnership entered into a $159 million, 15-year sale-leaseback financing arrangement with a lessor, which added approximately $30 million of liquidity to Teekay LNG.

Crude Oil Tanker Dispositions

In January 2019, the Todelo Spirit, a Suezmax tanker that was chartered-in by the Partnership under a capital lease from the charterer, was sold to a third party. Upon the sale of the vessel, the Partnership's charter contract for this vessel was terminated and the remaining capital lease obligation was extinguished. During 2018, the Partnership completed similar transactions for three other Suezmax tankers, the Teide Spirit in February 2018, the African Spirit in October 2018, and the European Spirit in November 2018.
Operating Results

The following table highlights certain financial information for Teekay LNG’s three segments: the Liquefied Natural Gas Segment, the Liquefied Petroleum Gas Segment and the Conventional Tanker Segment (please refer to the “Teekay LNG’s Fleet” section of this release below and Appendices C through E for further details). During 2018, the Partnership’s Teekay Multi-Gas Pool, including its seven directly-owned multi-gas carriers, commenced operations. As part of this initiative, the Partnership completed an internal reorganization and revised its internal reporting, as these changes resulted in management viewing the gas fleet and its components separately. Consequently, it was determined that there had been a change in reportable segments whereby the Partnership’s LPG and multi-gas carriers are reported in a separate segment apart from its LNG carriers. All segment information for comparative periods has been retroactively adjusted to conform with the change in segment presentation adopted in 2018.

  Three Months Ended
  December 31, 2018 December 31, 2017
(in thousands of U.S. Dollars) (unaudited) (unaudited)
  Liquefied
Natural
Gas Segment
Liquefied
Petroleum
Gas Segment
Conventional
Tanker
Segment
Total Liquefied
Natural
Gas
Segment
Liquefied
Petroleum
Gas
Segment
Conventional
Tanker
Segment
Total
GAAP FINANCIAL COMPARISON                
Voyage revenues 135,777   7,253   6,775   149,805   100,066   14,539   11,702   126,307  
Income (loss) from vessel operations 68,924   (5,367 ) 1,607   65,164   51,576   8,819   1,983   62,378  
Equity income (loss) 4,252   (3,303 )   949   9,090   (6,098 )   2,992  
NON-GAAP FINANCIAL COMPARISON                
CFVO from consolidated vessels(i) 99,981   (2,781 ) 2,099   99,299   75,731   10,936   4,122   90,789  
CFVO from equity-accounted vessels(i) 43,893   6,907     50,800   29,201   6,843     36,044  
 Total CFVO(i) 143,874   4,126   2,099   150,099   104,932   17,779   4,122   126,833  
  1. These are non-GAAP financial measures.  Please refer to “Definitions and Non-GAAP Financial Measures” and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under GAAP.

Liquefied Natural Gas Segment

Income from vessel operations and CFVO from consolidated vessels for the liquefied natural gas segment for the three months ended December 31, 2018, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of seven LNG carrier newbuildings (the Macoma, Murex, Magdala, Myrina, Megara, Bahrain Spirit and Sean Spirit) between October 2017 and December 2018; and earnings from the Magellan Spirit chartered-in from the Teekay LNG-Marubeni Joint Venture commencing in September 2018. These increases were partially offset by an increase in off-hire days during 2018 for certain of the Partnership’s LNG carriers due to repairs; and an increase in general and administrative expenses attributable to this segment.

Equity income and CFVO from equity-accounted vessels for the liquified natural gas segment for the three months ended December 31, 2018, compared to the same quarter of the prior year, were positively impacted by: deliveries of two ARC7 LNG carrier newbuildings between January 2018 and September 2018 in the Partnership's 50-percent owned Yamal LNG Joint Venture, the deliveries of three LNG carriers between October 2017 and July 2018 in the Partnership’s Pan Union Joint Venture, with the Partnership's ownership interest in these vessels ranging from 20 to 30 percent, and higher fleet utilization in the Teekay LNG-Marubeni Joint Venture during the three months ended December 31, 2018 as certain of the joint venture’s vessels commenced short-term charter contracts at higher rates compared to the previous period. In addition, GAAP equity income was negatively impacted by unrealized losses on non-designated and designated derivative instruments in the Partnership's equity-accounted investments.

Liquefied Petroleum Gas Segment

Loss from vessel operations and CFVO from consolidated vessels for the liquefied petroleum gas segment for the three months ended December 31, 2018, compared to the same quarter of the prior year, were negatively impacted by lower earnings on seven of the Partnership's multi-gas carriers following the Partnership's termination of their charter contracts in the fourth quarter of 2017 due to non-payment by the charterer, which includes recognition of prepaid lease payments of $10.7 million in the fourth quarter of 2017 received from the previous charterer in prior periods.

GAAP equity loss for the liquified petroleum gas segment for the three months ended December 31, 2018, compared to the same quarter of the prior year, was positively impacted by vessel write-downs in the Exmar LPG Joint Venture during the three months ended December 31, 2017, partially offset by unrealized losses on non-designated derivative instruments in the Partnership's equity-accounted investments. CFVO from equity-accounted vessels for the liquefied petroleum gas segment for the three months ended December 31, 2018, was comparable to the same quarter of the prior year.

Conventional Tanker Segment

Income from vessel operations and CFVO from consolidated vessels for the conventional tanker segment for the three months ended December 31, 2018, compared to the same quarter of the prior year, were negatively impacted by the sales of the Teide Spirit, African Spirit and European Spirit conventional tankers during 2018.

Teekay LNG's Fleet

The following table summarizes the Partnership’s fleet as of February 1, 2019. The Partnership also has a 30 percent interest in the Bahrain regasification terminal which is under construction and is expected to commence operations in the summer of 2019.

  Number of Vessels
  Owned and In-
Chartered Vessels(i)
Newbuildings Total
LNG Carrier Fleet 45(ii) 4(iii) 49
LPG/Multi-gas Carrier Fleet 29(iV) 29
Conventional Tanker Fleet 1 1
Total 75 4 79
  1. Includes vessels accounted for as vessels related to capital leases under which the Partnership is the lessee.
  2. The Partnership’s ownership interests in these vessels and newbuildings range from 20 percent to 100 percent.
  3. The Partnership’s ownership interests in these newbuildings is 50 percent.
  4. The Partnership’s ownership interests in these vessels range from 50 percent to 99 percent.

Liquidity

As of December 31, 2018, the Partnership had total liquidity of $324.6 million (comprised of $149.0 million in cash and cash equivalents and $175.6 million in undrawn credit facilities).

Conference Call

The Partnership plans to host a conference call on Thursday, February 21, 2019 at 11:00 a.m. (ET) to discuss the results for the fourth quarter and year-ended December 31, 2018. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

  • By dialing (800) 263-0877 or (647) 794-1827, if outside North America, and quoting conference ID code 3163252.
  • By accessing the webcast, which will be available on Teekay LNG’s website at www.teekay.com (the archive will remain on the website for a period of one year).

An accompanying Fourth Quarter and Fiscal Year 2018 Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.

About Teekay LNG Partners L.P.

Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fee-based charter contracts through its interests in 49 LNG carriers (including four newbuildings), 22 mid-size LPG carriers, seven multi-gas carriers, and one conventional tanker. The Partnership's ownership interests in these vessels range from 20 to 100 percent. In addition, the Partnership owns a 30 percent interest in a regasification terminal, which is currently under construction. Teekay LNG Partners is a publicly-traded master limited partnership formed by Teekay Corporation (TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.

Teekay LNG Partners’ common units and preferred units trade on the New York Stock Exchange under the symbols “TGP”, “TGP PR A” and “TGP PR B”, respectively.

For Investor Relations
enquiries contact:

Ryan Hamilton
Tel: +1 (604) 609-2963
Website: www.teekay.com

Definitions and Non-GAAP Financial Measures

This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S. Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow from Vessel Operations, Adjusted Net Income Attributable to the Partners and Preferred Unitholders, and Distributable Cash Flow, are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and therefore may not be comparable to similar measures presented by other companies. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.

Non-GAAP Financial Measures

Cash Flow from Vessel Operations (CFVO) represents income (loss) from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, goodwill write-downs, gain and losses on the sales of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on a derivative charter contract. CFVO from Consolidated Vessels represents CFVO from vessels that are consolidated on the Partnership’s financial statements. CFVO from Equity-Accounted Vessels represents the Partnership’s proportionate share of CFVO from its equity-accounted vessels. The Partnership does not control its equity-accounted vessels and as a result, the Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the entities in which the Partnership holds the equity-accounted investments or distributed to the Partnership and other owners from equity-accounted investments. In addition, the Partnership does not control the timing of such distributions to the Partnership and other owners. Consequently, readers are cautioned when using total CFVO as a liquidity measure as the amount contributed from CFVO from Equity-Accounted Vessels may not be available to the Partnership in the periods such CFVO is generated by its equity-accounted vessels. CFVO is a non-GAAP financial measure used by certain investors and management to measure the operational financial performance of companies. Please refer to Appendices D and E of this release for reconciliations of these non-GAAP financial measures to income (loss) from vessel operations and income from vessel operations of equity-accounted vessels, respectively, the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements included in this release.

Adjusted Net Income Attributable to the Partners and Preferred Unitholders excludes items of income or loss from GAAP net income that are typically excluded by securities analysts in their published estimates of the Partnership’s financial results. The Partnership believes that certain investors use this information to evaluate the Partnership’s financial performance, as does management. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to net income, and refer to footnote (4) of the Consolidated Statements of Income for a reconciliation of adjusted equity income to equity income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements included in this release.

Distributable Cash Flow (DCF) represents GAAP net income adjusted for write-down of vessels, depreciation and amortization expense, deferred income tax and other non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from non-designated derivative instruments, ineffectiveness for derivative instruments designated as hedges for accounting purposes, distributions relating to equity financing of newbuilding installments, distributions relating to preferred units, adjustments for direct financing leases to a cash basis and foreign exchange related items, including the Partnership’s proportionate share of such items in equity-accounted for investments. 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. DCF is a quantitative standard used in the publicly-traded partnership investment community and by management to assist in evaluating financial performance. Please refer to Appendix B of this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP measure reflected in the Partnership’s consolidated financial statements included in this release.


Teekay LNG Partners L.P.
Consolidated Statements of Income
(in thousands of U.S. Dollars, except unit and per unit data)

  Three Months Ended Year End
  December 31, September 30, December 31, December 31, December 31,
2018 2018 2017 2018 2017
  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Voyage revenues 149,805   123,336   126,307   510,762   432,676  
           
Voyage expenses (6,529 ) (7,956 ) (4,303 ) (28,237 ) (8,202 )
Vessel operating expenses(1) (30,454 ) (25,993 ) (27,676 ) (117,658 ) (101,539 )
Time-charter hire expense (5,980 ) (1,690 )   (7,670 )  
Depreciation and amortization (33,079 ) (32,238 ) (27,651 ) (124,378 ) (105,545 )
General and administrative expenses(1) (7,809 ) (5,811 ) (4,299 ) (28,512 ) (18,141 )
Write-down of goodwill and vessels(2) (790 ) (2,201 )   (54,653 ) (50,600 )
Restructuring charges(3)   (449 )   (1,845 )  
Income from vessel operations 65,164   46,998   62,378   147,809   148,649  
           
Equity income(4) 949   14,679   2,992   53,546   9,789  
Interest expense (39,551 ) (35,875 ) (23,333 ) (128,303 ) (80,937 )
Interest income 964   980   880   3,760   2,915  
Realized and unrealized (loss) gain on non-
  designated derivative instruments(5)
(11,540 ) 2,515   3,066   3,278   (5,309 )
Foreign currency exchange (loss) gain(6) (7,244 ) 1,445   (2,436 ) 1,371   (26,933 )
Other income (expense)(7) 545   314   424   (51,373 ) 1,561  
Net income (loss) before tax expense 9,287   31,056   43,971   30,088   49,735  
Income tax (expense) recovery (42 ) (1,549 ) 319   (3,213 ) (824 )
Net income 9,245   29,507   44,290   26,875   48,911  
           
Non-controlling interest in net income (loss) 2,666   3,557   4,413   (1,494 ) 14,946  
Preferred unitholders' interest in net income 6,425   6,425   5,541   25,701   13,979  
General partner's interest in net income 2   391   687   53   400  
Limited partners’ interest in net income 152   19,134   33,649   2,615   19,586  
Limited partners' interest in net income per
  common unit:
         
• Basic 0.00   0.24   0.42   0.03   0.25  
• Diluted 0.00   0.24   0.42   0.03   0.25  
Weighted-average number of common units
  outstanding:
         
• Basic 79,676,541   79,687,499   79,626,819   79,672,435   79,617,778  
• Diluted 79,843,339   79,859,471   79,839,231   79,842,328   79,791,041  
Total number of common units outstanding at
  end of period
79,360,719   79,687,499   79,626,819   79,360,719   79,626,819  


(1)     The comparative figures for vessel operating expenses and general and administrative expenses have been reclassified to conform to the presentation adopted in the current period relating to the classification of certain related party transactions which had the effect of (decreasing) increasing vessel operating expenses by ($1.6) million, $0.7 million and ($1.6) million for the three months ended September 30, 2018, December 31, 2017 and year ended December 31, 2017, respectively, and an offsetting effect for general and administrative expenses in each respective period. There is no impact on income from vessel operations or net income as a result of these reclassifications.
       
(2)     The African Spirit and European Spirit conventional tankers were classified as vessels held for sale upon the expiration of their time-charter contracts in 2017. The Partnership recorded aggregate write-downs of $2.2 million and $7.9 million for the three months ended September 30, 2018, and year ended December 31, 2018, respectively, on these two conventional tankers as the estimated fair values of these vessels had decreased. In June 2018, the carrying values for four of the Partnership's seven wholly-owned multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and Cathinka Spirit) were written down to their estimated fair values, using appraised values, as a result of the Partnership's evaluation of alternative strategies for these assets, combined with the then current charter rate environment and the outlook for charter rates for these vessels. The total impairment charge of $33.0 million related to these four multi-gas carriers is included in write-down of goodwill and vessels for the year ended December 31, 2018. In addition, the Partnership recorded a write-down of $13.0 million for the year ended December 31, 2018 relating to the Alexander Spirit conventional tanker to its estimated fair value, using an appraised value. This was a result of changes in the Partnership's expectations of the vessel's future opportunities after its current contract ends in 2019. The write-down of vessels of $50.6 million for the year ended December 31, 2017, relates to the combined write-downs of the African Spirit and European Spirit of $25.1 million for the year ended December 31, 2017, upon the Partnership marketing the vessels for sale in 2017; and the aggregate write-downs of the Teide Spirit and Toledo Spirit conventional tankers of $25.5 million for the year ended December 31, 2017 upon the charterer notifying the Partnership of its intention to sell the Teide Spirit in 2017 (sold February 2018) and the Partnership's expectation that the charterer would sell the Toledo Spirit in 2018 (sold January 2019).

Included in write-down of goodwill and vessels for the three months and year ended December 31, 2018 is an impairment change of $0.8 million relating to the Partnership's goodwill attributable to its LPG segment.
       
(3)     In February 2018, the Teide Spirit conventional tanker was sold and as a result of this sale, the Partnership recorded restructuring charges of $0.4 million and $1.8 million relating to seafarer severance costs for the three months ended September 30, 2018 and year ended December 31, 2018, respectively.
       
(4)     The Partnership’s proportionate share of items within equity income as identified in Appendix A of this release is detailed in the table below. By excluding these items from equity income, the Partnership believes the resulting adjusted equity income is a normalized amount that can be used to better evaluate the financial performance of the Partnership’s equity-accounted investments. Adjusted equity income is a non-GAAP financial measure.
       


  Three Months Ended Year Ended
  December 31, September 30, December 31, December 31, December 31,
  2018 2018 2017 2018 2017
Equity income 949   14,679   2,992   53,546   9,789  
Proportionate share of unrealized loss (gain)
  on non-designated interest rate swaps
4,736   (2,614 ) (4,404 ) (9,076 ) (7,491 )
Proportionate share of ineffective portion of
  hedge-accounted interest rate swaps
4,831   (105 ) 566   (342 ) 5,100  
Proportionate share of write-down and loss
  on sale of vessels
    5,500   257   5,500  
Gain on sale of equity-accounted investment       (5,563 )  
Proportionate share of other items 181   (185 ) 191   (4 ) 651  
Equity income adjusted for items in Appendix A 10,697   11,775   4,845   38,818   13,549  


(5)     The realized (losses) gains on non-designated derivative instruments relate to the amounts the Partnership actually paid or received to settle non-designated derivative instruments and the unrealized (losses) gains on non-designated derivative instruments relate to the change in fair value of such non-designated derivative instruments, as detailed in the table below:
       

   

  Three Months Ended Year Ended
  December 31, September 30, December 31, December 31, December 31,
  2018 2018 2017 2018 2017
Realized (losses) gains relating to:          
Interest rate swap agreements (2,804 ) (3,062 ) (5,012 ) (14,654 ) (18,825 )
Interest rate swap and swaption agreements
  termination
  (13,681 )   (13,681 ) (610 )
Toledo Spirit time-charter derivative contract (668 ) 1,689   152   1,480   678  
  (3,472 ) (15,054 ) (4,860 ) (26,855 ) (18,757 )
Unrealized (losses) gains relating to:          
Interest rate swap agreements (7,637 ) 19,278   8,182   31,061   12,393  
Interest rate swaption agreements     518   2   945  
Toledo Spirit time-charter derivative contract (431 ) (1,709 ) (774 ) (930 ) 110  
  (8,068 ) 17,569   7,926   30,133   13,448  
Total realized and unrealized (losses) gains
  on non-designated derivative instruments
(11,540 ) 2,515   3,066   3,278   (5,309 )


(6)     For accounting purposes, the Partnership is required to revalue all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rates at the end of each reporting period. This revaluation does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized foreign currency translation gains or losses in the Consolidated Statements of Income.

Foreign currency exchange (loss) gain includes realized losses relating to the amounts the Partnership paid to settle the Partnership’s non-designated cross-currency swaps that were entered into as economic hedges in relation to the Partnership’s Norwegian Kroner (NOK) denominated unsecured bonds. Foreign currency exchange gain (loss) also includes unrealized gains relating to the change in fair value of such derivative instruments, partially offset by unrealized (losses) gains on the revaluation of the NOK bonds as detailed in the table below:
       


  Three Months Ended Year Ended
  December 31, September 30, December 31, December 31, December 31,
  2018 2018 2017 2018 2017
Realized losses on cross-currency swaps (1,607 ) (1,744 ) (2,125 ) (6,533 ) (9,344 )
Realized losses on cross-currency swaps termination   (42,271 )   (42,271 ) (25,733 )
Realized gains on repurchase of NOK bonds   42,271     42,271   25,733  
Unrealized (losses) gains on cross-currency swaps (28,494 ) 43,966   (9,081 ) 21,240   49,047  
Unrealized gains (losses) on revaluation of NOK bonds 21,066   (41,549 ) 7,760   (23,118 ) (47,076 )


(7)     Following the termination of the capital lease arrangements for the three LNG carriers in Teekay Nakilat Corporation (the Teekay Nakilat Joint Venture), the lessor made a determination that additional rentals were due under the leases following a challenge by the UK taxing authority. As a result, for the year ended December 31, 2018, the Teekay Nakilat Joint Venture recognized an additional liability of $53.0 million, which was included as part of other income (expense) in the Consolidated Statements of Income, and paid this liability by releasing a $7.0 million cash deposit it had made with the lessor and making a $56.0 million cash payment for the balance, which was based on the GBP/USD foreign currency exchange rates at the time the payments were made.
       


Teekay LNG Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)

  As at December 31, September 30, As at December 31,
  2018 2018 2017
  (unaudited) (unaudited) (unaudited)
ASSETS      
Current      
Cash and cash equivalents 149,014   139,854   244,241  
Restricted cash – current 38,329   36,429   22,326  
Accounts receivable 20,795   25,732   24,054  
Prepaid expenses 8,076   9,277   6,539  
Vessels held for sale   28,482   33,671  
Current portion of derivative assets 835   1,453   1,078  
Current portion of net investments in direct financing leases 12,635   12,273   9,884  
Current portion of advances to equity-accounted joint ventures 79,108      
Advances to affiliates 8,229   5,163   7,300  
Other current assets 2,306   4,400    
Total current assets 319,327   263,063   349,093  
       
Restricted cash – long-term 35,521   30,159   72,868  
Vessels and equipment      
At cost, less accumulated depreciation 1,657,338   1,463,438   1,416,381  
Vessels related to capital leases, at cost, less accumulated
  depreciation
1,585,243   1,597,418   1,044,838  
Advances on newbuilding contracts 86,942   172,248   444,493  
Total vessels and equipment 3,329,523   3,233,104   2,905,712  
Investment in and advances to equity-accounted joint ventures 1,037,025   1,118,361   1,094,596  
Net investments in direct financing leases 562,528   565,423   486,106  
Derivative assets 2,362   19,164   8,043  
Other assets 11,432   9,148   6,172  
Intangible assets – net 52,222   54,436   61,078  
Goodwill 34,841   35,631   35,631  
Total assets 5,384,781   5,328,489   5,019,299  
LIABILITIES AND EQUITY      
Current      
Accounts payable 3,830   4,158   3,509  
Accrued liabilities 74,753   67,977   45,757  
Unearned revenue 30,108   23,080   25,873  
Current portion of long-term debt 135,901   155,261   552,404  
Current obligations related to capital leases 81,219   81,149   106,946  
In-process contracts   1,803   7,946  
Current portion of derivative liabilities 11,604   12,224   79,139  
Advances from affiliates 14,731   20,061   12,140  
Total current liabilities 352,146   365,713   833,714  
Long-term debt 1,833,875   1,744,961   1,245,588  
Long-term obligations related to capital leases 1,217,337   1,231,839   904,603  
Other long-term liabilities 43,788   41,930   58,174  
Derivative liabilities 55,038   30,877   45,797  
Total liabilities 3,502,184   3,415,320   3,087,876  
Equity      
Limited partners – common units 1,496,107   1,510,650   1,539,248  
Limited partners – preferred units 285,159   285,159   285,159  
General partner 49,271   49,570   50,152  
Accumulated other comprehensive income 2,717   18,158   4,479  
Partners' equity 1,833,254   1,863,537   1,879,038  
Non-controlling interest 49,343   49,632   52,385  
Total equity 1,882,597   1,913,169   1,931,423  
Total liabilities and total equity 5,384,781   5,328,489   5,019,299  


Teekay LNG Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)

  Year Ended
  December 31, December 31,
  2018 2017
  (unaudited) (unaudited)
Cash, cash equivalents and restricted cash provided by (used for)    
OPERATING ACTIVITIES    
Net income 26,875   48,911  
Non-cash and non-operating items:    
  Unrealized gain on non-designated derivative instruments (30,133 ) (13,448 )
  Depreciation and amortization 124,378   105,545  
  Write-down of goodwill and vessels 54,653   50,600  
  Unrealized foreign currency exchange (gain) loss including the effect of the termination of cross-
currency swaps
(7,525 ) 23,153  
  Equity income, net of dividends received of $14,421 (2017 - $42,692) (39,125 ) 32,903  
  Ineffective portion on qualifying cash flow hedging instruments included in interest expense (740 ) 740  
  Other non-cash items (1,035 ) (5,616 )
Change in operating assets and liabilities 19,218   (2,396 )
Expenditures for dry docking (15,368 ) (21,642 )
Net operating cash flow 131,198   218,750  
FINANCING ACTIVITIES    
Proceeds from issuance of long-term debt 1,135,304   362,527  
Scheduled repayments of long-term debt and settlement of related swaps (506,437 ) (194,237 )
Prepayments of long-term debt (465,122 ) (236,474 )
Debt issuance costs (11,932 ) (8,361 )
Proceeds from financing related to sales and leaseback of vessels 370,050   656,935  
Scheduled repayments of obligations related to capital leases (59,722 ) (42,000 )
Proceeds from equity offerings, net of offering costs   164,411  
Repurchase of common units (3,786 )  
Decrease in restricted cash (70,345 ) (56,650 )
Dividends paid to non-controlling interest (2,925 ) (1,595 )
Other non-cash items   (605 )
Net financing cash flow 385,085   643,951  
INVESTING ACTIVITIES    
Expenditures for vessels and equipment (686,148 ) (708,608 )
Capital contributions and advances to equity-accounted joint ventures (40,544 ) (183,874 )
Return of capital and repayment of advances from equity-accounted joint ventures   92,320  
Proceeds from sale of equity-accounted joint venture 54,438    
Receipts from direct financing leases 10,882   13,143  
Proceeds from sales of vessels 28,518   20,580  
Net investing cash flow (632,854 ) (766,439 )
(Decrease) increase in cash, cash equivalents and restricted cash (116,571 ) 96,262  
Cash, cash equivalents and restricted cash, beginning of the year 339,435   243,173  
Cash, cash equivalents and restricted cash, end of the year 222,864   339,435  


Teekay LNG Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of U.S. Dollars)

  Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
(unaudited) (unaudited) (unaudited) (unaudited)
Net income – GAAP basis 9,245   44,290   26,875   48,911  
Less: Net (income) loss attributable to non-
controlling interests
(2,666 ) (4,413 ) 1,494   (14,946 )
Net income attributable to the partners and
preferred unitholders
6,579   39,877   28,369   33,965  
Add (subtract) specific items affecting net income:        
Write-down of goodwill and vessels(1) 790     54,653   50,600  
Restructuring charges(2)     1,845    
Unrealized foreign currency exchange losses
  (gains)(3)
5,604   58   (8,717 ) 17,493  
Unrealized losses (gains) on non-designated and
  designated derivative instruments and other
  items from equity–accounted investees(4)
9,748   1,853   (14,728 ) 3,760  
Unrealized losses (gains) on non-designated
  derivative instruments(5)
8,068   (7,926 ) (30,133 ) (13,448 )
Realized loss on interest rate swap termination     13,681    
Other items(6) 2,447   (941 ) 56,431   424  
Non-controlling interests’ share of items above(7) (600 ) 1,051   (13,698 ) 1,056  
Total adjustments 26,057   (5,905 ) 59,334   59,885  
Adjusted net income attributable to the partners
and preferred unitholders
32,636   33,972   87,703   93,850  
         
Preferred unitholders' interest in adjusted net income 6,425   5,541   25,701   13,979  
General partner's interest in adjusted net income 524   569   1,240   1,597  
Limited partners’ interest in adjusted net income 25,687   27,862   60,762   78,274  
Limited partners’ interest in adjusted net income per
common unit, basic
0.32   0.35   0.76   0.98  
Weighted-average number of common units
outstanding, basic
79,676,541   79,626,819   79,672,435   79,617,778  


(1)     See Note 2 to the Consolidated Statements of Income included in this release for further details.
       
(2)     See Note 3 to the Consolidated Statements of Income included in this release for further details.
       
(3)     Unrealized foreign currency exchange losses (gains) primarily relate to the Partnership’s revaluation of all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized (gains) losses on the cross-currency swaps economically hedging the Partnership’s NOK bonds. This amount excludes the realized losses relating to the cross-currency swaps for the NOK bonds. See Note 6 to the Consolidated Statements of Income included in this release for further details.
       
(4)     Reflects the unrealized losses (gains) due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes and any ineffectiveness for derivative instruments designated as hedges for accounting purposes within the Partnership’s equity-accounted investments. See Note 4 to the Consolidated Statements of Income included in this release for further details.
       
(5)     Reflects the unrealized losses (gains) due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes. See Note 5 to the Consolidated Statements of Income included in this release for further details.
       
(6)     Included in other items for the year ended December 31, 2018 is the additional tax indemnification guarantee liability of $53 million, as described in Note 7 to the Consolidated Statements of Income included in this release.
       
(7)     Items affecting net income include items from the Partnership’s consolidated non-wholly-owned subsidiaries. The specific items affecting net income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “non-controlling interests’ share of items listed above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of the other specific items affecting net income listed in the table.
       


Teekay LNG Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Distributable Cash Flow (DCF)
(in thousands of U.S. Dollars, except units outstanding and per unit data)

  Three Months Ended Year Ended
December 31, December 31,
2018 2017 2018 2017
(unaudited) (unaudited) (unaudited) (unaudited)
           
Net income: 9,245   44,290   26,875   48,911  
Add:        
Depreciation and amortization 33,079   27,651   124,378   105,545  
Partnership’s share of equity–accounted joint
  ventures' DCF net of estimated maintenance
  capital expenditures(1)
19,282   13,719   72,546   48,616  
Unrealized loss (gain) on non-designated derivative
  instruments
8,068   (7,926 ) (30,133 ) (13,448 )
Unrealized foreign currency exchange loss (gain) 5,604   58   (8,717 ) 17,493  
Direct finance lease payments received in excess of
  revenue recognized and other adjustments
2,475   2,142   11,082   14,326  
Distributions relating to equity financing of
  newbuildings
1,962   3,844   9,012   8,676  
Write-down of goodwill and vessels 790     54,653   50,600  
Deferred income tax and other non-cash items 363   (4,061 ) 2,561   (6,463 )
Additional tax indemnification guarantee liability     53,000    
Realized loss on interest rate swap termination     13,681    
Less:        
Equity income (949 ) (2,992 ) (53,546 ) (9,789 )
Distributions relating to preferred units (6,425 ) (5,541 ) (25,701 ) (13,979 )
Estimated maintenance capital expenditures (16,794 ) (14,265 ) (64,186 ) (53,315 )
Ineffective portion on qualifying cash flow hedging
  instruments included in interest expense
  (15 ) (740 ) 740  
Portion of additional tax indemnification guarantee
  liability previously recognized in DCF
    (3,849 )  
Distributable Cash Flow before Non-controlling interest 56,700   56,904   180,916   197,913  
Non-controlling interests’ share of DCF before
  estimated maintenance capital expenditures
(5,489 ) (4,850 ) (22,034 ) (21,785 )
Distributable Cash Flow 51,211   52,054   158,882   176,128  
Amount of cash distributions attributable to the general
partner
(227 ) (226 ) (911 ) (909 )
Limited partners' Distributable Cash Flow 50,984   51,828   157,971   175,219  
Weighted-average number of common units
outstanding
79,676,541   79,626,819   79,672,435   79,617,778  
Distributable Cash Flow per limited partner
common unit
0.64   0.65   1.98   2.20  


(1)     The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $10.3 million and $8.4 million for the three months ended December 31, 2018 and 2017, and $36.4 million and $32.5 million for the years ended for December 31, 2018 and 2017, respectively.
       


Teekay LNG Partners L.P.
Appendix C - Supplemental Segment Information
(in thousands of U.S. Dollars)

  Three Months Ended December 31, 2018
  (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum
Gas
Segment
Conventional
Tanker
Segment
Total
Voyage revenues 135,777   7,253   6,775   149,805  
Voyage expenses (1,099 ) (4,574 ) (856 ) (6,529 )
Vessel operating expenses (22,859 ) (4,863 ) (2,732 ) (30,454 )
Time-charter hire expense (5,980 )     (5,980 )
Depreciation and amortization (30,121 ) (1,796 ) (1,162 ) (33,079 )
General and administrative expenses (6,794 ) (597 ) (418 ) (7,809 )
Write-down of goodwill   (790 )   (790 )
Income (loss) from vessel operations 68,924   (5,367 ) 1,607   65,164  
         
  Three Months Ended December 31, 2017
  (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum
Gas
Segment
Conventional
Tanker
Segment
Total
Voyage revenues 100,066   14,539   11,702   126,307  
Voyage expenses (138 ) (1,218 ) (2,947 ) (4,303 )
Vessel operating expenses (21,459 ) (1,908 ) (4,309 ) (27,676 )
Depreciation and amortization (23,269 ) (2,117 ) (2,265 ) (27,651 )
General and administrative expenses (3,624 ) (477 ) (198 ) (4,299 )
Income from vessel operations 51,576   8,819   1,983   62,378  


Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Consolidated Vessels
(in thousands of U.S. Dollars)

  Three Months Ended December 31, 2018 Year Ended
December 31,
2018
  (unaudited) (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum
Gas
Segment
Conventional
Tanker
Segment
Total Total
Income (loss) from vessel operations (See Appendix C) 68,924   (5,367 ) 1,607   65,164   147,809  
Depreciation and amortization 30,121   1,796   1,162   33,079   124,378  
Write-down of goodwill and vessels   790     790   54,653  
Amortization of in-process contracts included in voyage
  revenues
(1,539 )   (2 ) (1,541 ) (5,756 )
Direct finance lease payments received in excess of
  revenue recognized and other adjustments
2,475       2,475   11,082  
Realized (loss) gain on Toledo Spirit derivative contract     (668 ) (668 ) 1,480  
Cash flow from vessel operations from consolidated vessels 99,981   (2,781 ) 2,099   99,299   333,646  
           
  Three Months Ended December 31, 2017 Year Ended
December 31,
2017
  (unaudited) (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum
Gas
Segment
Conventional
Tanker
Segment
Total Total
Income from vessel operations (See Appendix C) 51,576   8,819   1,983   62,378   148,649  
Depreciation and amortization 23,269   2,117   2,265   27,651   105,545  
Write-down of vessels         50,600  
Amortization of in-process contracts included in voyage
  revenues
(1,256 )   (278 ) (1,534 ) (3,785 )
Direct finance lease payments received in excess of
  revenue recognized and other adjustments
2,142       2,142   14,326  
Realized gain on Toledo Spirit derivative contract     152   152   678  
Cash flow from vessel operations from consolidated vessels 75,731   10,936   4,122   90,789   316,013  


Teekay LNG Partners L.P.
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations from Equity-Accounted Vessels
(in thousands of U.S. Dollars)

  Three Months Ended
  December 31, 2018 December 31, 2017
  (unaudited) (unaudited)
  At Partnership's At Partnership's
100% Portion(1) 100% Portion(1)
Voyage revenues 176,177   75,886   129,526   57,493  
Voyage expenses (3,885 ) (1,962 ) (3,653 ) (1,862 )
Vessel operating expenses, time-charter hire expense and general and
  administrative expenses
(61,634 ) (27,291 ) (48,617 ) (22,372 )
Depreciation and amortization (30,471 ) (14,643 ) (27,950 ) (13,984 )
Write-down and loss on sales of vessels     (11,000 ) (5,500 )
Income from vessel operations of equity-accounted vessels 80,187   31,990   38,306   13,775  
Other items, including interest expense, realized and
  unrealized gain (loss) on derivative instruments
(76,794 ) (31,041 ) (23,690 ) (10,783 )
Net income / equity income of equity-accounted vessels 3,393   949   14,616   2,992  
Net income / equity income of equity-accounted LNG vessels 9,837   4,252   26,657   9,090  
Net loss / equity loss of equity-accounted LPG vessels (6,444 ) (3,303 ) (12,041 ) (6,098 )
         
Income from vessel operations of equity-accounted vessels 80,187   31,990   38,306   13,775  
Depreciation and amortization 30,471   14,643   27,950   13,984  
Write-down and loss on sales of vessels     11,000   5,500  
Direct finance lease payments received in excess of
revenue recognized and other adjustments
14,525   5,132   10,621   3,802  
Amortization of in-process contracts (1,804 ) (965 ) (1,950 ) (1,017 )
Cash flow from vessel operations from equity-accounted
  vessels
123,379   50,800   85,927   36,044  
Cash flow from vessel operations from equity-accounted LNG
  vessels
109,564   43,893   72,241   29,201  
Cash flow from vessel operations from equity-accounted LPG
  vessels
13,815   6,907   13,686   6,843  


  Year Ended
  December 31, 2018 December 31, 2017
  (unaudited) (unaudited)
  At Partnership's At Partnership's
100% Portion(1) 100% Portion(1)
Voyage revenues 612,857   266,388   478,908   213,574  
Voyage expenses (12,058 ) (6,071 ) (16,689 ) (8,534 )
Vessel operating expenses and general and
  administrative expenses
(208,686 ) (93,277 ) (175,898 ) (81,416 )
Depreciation and amortization (107,116 ) (52,883 ) (109,135 ) (54,453 )
Write-down and loss on sales of vessels (514 ) (257 ) (11,000 ) (5,500 )
Income from vessel operations of equity-accounted vessels 284,483   113,900   166,186   63,671  
Other items, including interest expense and
  realized and unrealized gain (loss) on
  derivative instruments
(147,230 ) (65,917 ) (124,342 ) (53,882 )
Gain on sale of equity-accounted investment   5,563      
Net income / equity income of equity-
  accounted vessels
137,253   53,546   41,844   9,789  
Net income / equity income of equity-accounted
  LNG vessels
149,981   60,228   56,980   17,652  
Net loss / equity loss of equity-
  accounted LPG vessels
(12,728 ) (6,682 ) (15,136 ) (7,863 )
         
Income from vessel operations of equity-
  accounted vessels
284,483   113,900   166,186   63,671  
Depreciation and amortization 107,116   52,883   109,135   54,453  
Write-down and loss on sales of vessels 514   257   11,000   5,500  
Direct finance lease payments received in
  excess of revenue recognized
51,329   18,453   39,368   14,220  
Amortization of in-process contracts (7,242 ) (3,847 ) (8,327 ) (4,307 )
Cash flow from vessel operations from
  equity-accounted vessels
436,200   181,646   317,362   133,537  
Cash flow from vessel operations from
  equity-accounted LNG vessels
382,514   154,803   263,998   106,854  
Cash flow from vessel operations from
  equity-accounted LPG vessels
53,686   26,843   53,364   26,683  


(1)     The Partnership's equity-accounted vessels for the three months and year ended December 31, 2018 and 2017 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 49 percent ownership interest in the Partnership’s joint venture with Exmar NV (the Excalibur Joint Venture), which owns one LNG carrier; the Partnership's 50 percent ownership interest up to January 2018 in the Excelsior Joint Venture, which owns one regasification unit; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the Teekay LNG-Marubeni Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 LPG carriers as at December 31, 2018, compared to 23 owned and in-chartered LPG carriers, including three LPG carrier newbuildings, as at December 31, 2017; the Partnership’s ownership interest ranging from 20 to 30 percent in three LNG carriers and one LNG carrier newbuilding as at December 31, 2018 for Shell, compared to one LNG carrier and three LNG carrier newbuildings as at December 31, 2017; the Partnership’s 50 percent ownership interest in two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at December 31, 2018, compared to six ARC7 LNG carrier newbuildings as at December 31, 2017; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal under construction in Bahrain.
       

Teekay LNG Partners L.P.
Appendix F - Summarized Financial Information of Equity-Accounted Joint Ventures
(in thousands of U.S. Dollars)

  As at December 31, 2018 As at December 31, 2017
  (unaudited) (unaudited)
  At Partnership's At Partnership's
100% Portion(1) 100% Portion(1)
Cash and restricted cash, current and non-current 386,320   162,947   295,148   128,004  
Current portion of derivative assets 4,840   2,225   1,594   785  
Other current assets 88,924   32,429   53,068   22,661  
Vessels and equipment, including vessels related to capital
leases and right of use assets
2,327,971   1,141,364   2,202,418   1,133,804  
Advances on newbuilding contracts 1,321,284   494,486   1,211,210   450,523  
Net investments in direct financing leases, current and non-
current
3,089,375   1,163,980   2,013,759   722,408  
Derivative assets 10,660   3,977   4,602   2,259  
Other non-current assets 50,625   37,690   86,167   54,060  
Total assets 7,279,999   3,039,098   5,867,966   2,514,504  
         
Current portion of long-term debt and obligations related to
  capital leases
547,094   205,093   162,915   73,975  
Current portion of derivative liabilities 12,695   4,420   21,973   7,217  
Other current liabilities 127,266   53,874   98,657   43,193  
Long-term debt and obligations related to capital leases 3,939,801   1,601,877   3,023,713   1,231,433  
Shareholders' loans, current and non-current 367,475   131,386   368,937   131,685  
Derivative liabilities 61,814   23,149   73,454   24,235  
Other long-term liabilities 67,793   34,552   77,297   39,855  
Equity 2,156,061   984,747   2,041,020   962,911  
Total liabilities and equity 7,279,999   3,039,098   5,867,966   2,514,504  
         
Investments in equity-accounted joint ventures   984,747     962,911  
Advances to equity-accounted joint ventures   131,386     131,685  
Investments in and advances to equity-accounted joint
ventures, current and non-current portions
  1,116,133     1,094,596  


(1)     The Partnership's equity-accounted vessels as at ended December 31, 2018 and December 31, 2017 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 49 percent ownership interest in the the Excalibur Joint Venture, which owns one LNG carrier; the Partnership's 50 percent ownership interest up to January 2018 in the Excelsior Joint Venture, which owns one regasification unit; the Partnership’s 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the Teekay LNG-Marubeni Joint Venture, which owns six LNG carriers; the Partnership’s 50 percent ownership interest in Exmar LPG BVBA, which owns and in-charters 22 LPG carriers as at December 31, 2018, compared to 23 owned and in-chartered LPG carriers, including three LPG carrier newbuildings, as at December 31, 2017; the Partnership’s ownership interest ranging from 20 to 30 percent in three LNG carriers and one LNG carrier newbuilding as at December 31, 2018 for Shell, compared to one LNG carrier and three LNG carrier newbuildings as at December 31, 2017; the Partnership’s 50 percent ownership interest in two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at December 31, 2018, compared to six ARC7 LNG carrier newbuildings as at December 31, 2017; and the Partnership's 30 percent ownership interest in the Bahrain LNG Joint Venture, which owns an LNG receiving and regasification terminal under construction in Bahrain.
       

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, among other things, regarding: estimated guidance for 2019 for the non-GAAP measures of adjusted net income attributable to partners and preferred unitholders, limited partners' interest in adjusted net income per common unit, cash flow from vessels operations from consolidated vessels and total cash flow from vessel operations; the expected timing of newbuilding vessel deliveries and completion of the Bahrain regasification facility, and the commencement of related contracts; the effects of future newbuilding deliveries and commencement of operations at the regasification facility on the Partnership’s 2019 operating results; future delevering of the Partnership’s balance sheet; further potential repurchases under the Partnership’s common unit repurchase program; and the timing and amount of increases to quarterly distributions on the Partnership’s common units. 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: potential shipyard and project construction delays; newbuilding specification changes or cost overruns; 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; changes in the size of the global LNG or LPG fleets; 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 Partnership's fleet; higher than expected costs and expenses; changes in the number of the Partnership’s outstanding common units; actual levels of quarterly distributions approved by the general partner’s Board of Directors; the inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels, including new charters at higher rates; allocations of cash to repay indebtedness or to repurchase common units; the trading price of the Partnership’s common units; the Partnership’s or the Partnership’s joint ventures’ ability to secure or draw on financings for its vessels; 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, 2017. 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.

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Source: Teekay LNG Partners L.P. 2019 GlobeNewswire, Inc.