Dynagas LNG Partners LP (NYSE:DLNG) (“Dynagas Partners” or the
“Partnership”), an owner and operator of liquefied natural gas
(“LNG”) carriers, today announced its results for the three months
ended March 31, 2018.
Highlights:
- Net income of $4.8 million for the three months ended March 31,
2018;
- Earnings per common unit of $0.09 for the three months ended
March 31, 2018;
- Adjusted Net Income(1) of $7.2 million for the three months
ended March 31, 2018;
- Adjusted Earnings per common unit(1) (2) of $0.16 for the three
months ended March 31, 2018;
- Distributable Cash Flow(1) of $11.3 million during the three
months ended March 31, 2018;
- Adjusted EBITDA(1) of $26.6 million for the three months ended
March 31, 2018;
- Reported cash of $61.4 million and available liquidity of $91.4
million as of March 31, 2018;
- Quarterly cash distribution of $0.25 per common unit in respect
of the first quarter of 2018 and $0.5625 per preferred unit in
respect of the most recent period.
(1)
Adjusted Net Income, Adjusted Earnings per common unit,
Distributable Cash Flow and Adjusted EBITDA are not recognized
measures under U.S. GAAP. Please refer to the definitions and
reconciliation of these measures to the most directly comparable
financial measures calculated and presented in accordance with U.S.
GAAP in Appendix B. |
(2) Adjusted Earnings
per common unit presentation excludes the Series A Preferred Units
interest on the Partnership’s net income for the periods
presented. |
Recent Developments:
Optional Vessels purchase option
deadline extension: On March 30, 2018, the Partnership
agreed with its Sponsor to further extend the deadline for
exercising the purchase options relating to both the Clean
Ocean and the Clean Planet previously granted to the
Partnership under the Omnibus Agreement from March 31, 2018 to
December 31, 2018.
Reduction in and payment of quarterly
common unit cash distribution: On April 18, 2018, the
Partnership announced that, following a strategic review of its
financial profile and distribution policy, its Board of Directors
approved a reduction in the quarterly cash distribution on the
Partnership’s common units to $0.25 per common unit from $0.4225
per common unit, or from $1.69 per common unit to $1.00 per common
unit on an annualized basis. The cash distribution, at the reduced
level, became effective upon the payment of the common units
distribution with regards to the first quarter of 2018 which was
paid on May 3, 2018, to all common unitholders of record as of
April 26, 2018. The revised distribution level is expected to
align the Partnership’s cash distributions with its capacity to
generate cash flow in the long term, to strengthen its balance
sheet and to improve its distribution coverage ratio (which is its
distributable cash flow available for distribution in proportion to
actual cash distributed).
Series A Preferred Units Cash
Distribution: On April 24, 2018, the Partnership’s Board
of Directors also announced a cash distribution of $0.5625 per unit
of its Series A Preferred Units (NYSE:DLNG PR A) for the period
from February 12, 2018 to May 11, 2018, which was paid on May 14,
2018 to all unitholders of record as of May 5, 2018.
CEO Commentary:
Tony Lauritzen, Chief Executive Officer of the
Partnership, commented:
“We are pleased to report our earnings for the three months
ended March 31, 2018.
“Our reported earnings for the first quarter of 2018 were, as
expected, below those of the first quarter of 2017 and were
impacted by the following: (i) the temporary employment of the
Clean Energy on the spot market until July 2018, when the vessel
will commence a time charter with Gazprom for a term of
approximately eight years, and (ii) the longer term nature of our
contracts following our decision to reduce the charter hire rate on
two vessels, the Yenisei River and the Lena River, with effect from
November 2016, in exchange for securing the long-term charter with
Gazprom, mentioned above, for the employment of the Clean Energy.
These transactions contributed to an increase in our contracted
backlog, thereby enhancing our revenue visibility.
“On April 18, 2018, we announced a plan to reduce the quarterly
distribution on the Partnership's common units to $0.25 per common
unit from $0.4225 per common unit, or from $1.69 per common unit to
$1.00 per common unit on an annualized basis. The reduction took
effect on May 3, 2018, upon the payment of the common unit
distribution with respect to the first quarter of 2018 to common
unitholders of record as of the close of business on April 26,
2018.
“This decision by our Board of Directors to reduce the level of
the Partnership’s quarterly common unit distribution was necessary
to align the Partnership’s distribution level with its capacity to
generate cash flow in the long term. Despite the material increase
in the Partnership’s estimated revenue contract backlog over the
last two years, we have experienced a decrease in operating cash
flow and a weakened distribution coverage ratio (which is our
distributable cash flow available for distribution in proportion to
actual cash distributed) following our shift to longer term
charters for the employment of our LNG carriers, which provide us
with greater cash flow visibility albeit at lower charter rates
that provide attractive returns of capital. As the Partnership’s
shorter duration time charter contracts at peak charter rates have
expired or are approaching expiration, we have capitalized on our
Manager’s operational track record and the versatility of the ice
class designated LNG carriers in our Fleet to secure long term
employment contracts. As of the date of this report, our estimated
average remaining contract term is 10.2 years and our estimated
contracted revenue backlog is approximately $1.5 billion, which
highlights our ability to secure long-term contracts during periods
when the LNG shipping market has been highly competitive.
“On May 3, 2018, we paid quarterly cash distribution of $0.25
per common unit with respect to the first quarter of 2018. Since
our initial public offering in November 2013, we have paid total
cash distributions of $7.04 per common unit. In addition, on May
14, 2018, we paid a cash distribution of $0.5625 per unit on our
Series A Preferred Units for the period from February 12, 2018 to
May 11, 2018.
“With our Fleet 85% contracted through 2018, 92% contracted
through 2019 and 100% contracted through 2020, and with an
estimated Fleet-wide average remaining contract duration of 10.2
years, we believe we have significant cash flow
visibility.
“Our intent is to seek additional contract coverage,
particularly in 2018, to manage our operating expenses and to
continue the safe operation of our Fleet.
“We look forward to working towards meeting our goals, which we
believe will continue to benefit our unitholders.”
Financial Results Overview:
|
Three Months Ended March
31, |
(U.S. dollars
in thousands, except per unit data) |
|
2018(unaudited) |
|
|
2017(unaudited) |
Voyage Revenues |
$ |
33,904 |
|
$ |
39,092 |
Net Income |
$ |
4,840 |
|
$ |
12,912 |
Adjusted Net Income
(1) |
$ |
7,232 |
|
$ |
14,905 |
Operating Income |
$ |
16,806 |
|
$ |
21,893 |
Adjusted EBITDA(1) |
$ |
26,590 |
|
$ |
31,271 |
Earnings per common
unit |
$ |
0.09 |
|
$ |
0.32 |
Adjusted Earnings per
common unit (1) |
$ |
0.16 |
|
$ |
0.37 |
Distributable Cash
Flow(1) |
$ |
11,286 |
|
$ |
18,634 |
|
|
|
|
|
|
(1)
Adjusted Net Income, Adjusted EBITDA, Adjusted Earnings per common
unit and Distributable Cash Flow are not recognized measures under
U.S. GAAP. Please refer to the definitions and reconciliation of
these measures to the most directly comparable financial measures
calculated and presented in accordance with U.S. GAAP in Appendix
B. |
Three Months Ended March 31, 2018 and
2017 Financial Results
Net Income for the three months ended March 31,
2018 was $4.8 million as compared to Net Income of $12.9 million in
the corresponding period of 2017, which represents a decrease of
$8.1 million, or 62.5%. Adjusted Net Income for the three months
ended March 31, 2018 was $7.2 million as compared to Adjusted Net
Income of $14.9 million in the corresponding period of 2017, which
represents a decrease of $7.7 million, or 51.5%. The decrease
in both the Net Income and the Adjusted Net Income was mainly
attributable to (i) the lower revenues earned for the Clean Energy
which has been employed under a short-term charter during the first
quarter of 2018, in comparison to the corresponding quarter of 2017
during which the vessel operated under a multiyear charter at a
significantly higher charter rate and, (ii) the increased interest
costs for servicing the Partnership’s secured debt, which was
refinanced in May 2017.
Adjusted EBITDA for the three months ended March
31, 2018 was $26.6 million as compared to Adjusted EBITDA of $31.3
million for the corresponding period of 2017, which represents a
decrease of $4.7 million, or 15.0%, and was mainly due to lower
revenues earned in the period for the Clean Energy, as discussed
above.
The Partnership's Distributable Cash Flow for
the three-month period ended March 31, 2018 was $11.3 million as
compared to $18.6 million in the corresponding period of 2017,
which represents a decrease of $7.3 million, or 39.4%, and was due
to the factors outlined above.
For the three-month period ended March 31, 2018,
the Partnership reported Earnings per common unit and Adjusted
Earnings per common unit, basic and diluted, of $0.09 and $0.16,
respectively, after taking into account the Series A Preferred
Units interest on the Partnership’s net income. Earnings per common
unit and Adjusted Earnings per common unit, basic and diluted are
calculated on the basis of a weighted average number of 35,490,000
units outstanding during the period, in the case of Adjusted
Earnings per common unit after reflecting the impact of the
non-cash items presented in Appendix B.
Please refer to the definitions and
reconciliation of these measures to the most directly comparable
financial measures calculated and presented in accordance with U.S.
GAAP in Appendix B.
Voyage revenues were $33.9 million for the
three-month period ended March 31, 2018 as compared to $39.1
million for the same period of 2017, which represents a decrease of
$5.2 million, or 13.3%. This decrease was predominantly
driven by the lower revenues earned on the Clean Energy which has
been trading in the short-term market since the third quarter of
2017, in comparison to the corresponding quarter of 2017 during
which the vessel was fully utilized at significantly higher charter
rate. In July 2018, the Clean Energy will be delivered to Gazprom
to commence a charter with a term of approximately eight years.
Vessel operating expenses were $6.3 million,
which corresponds to a daily rate of $11,741 for the three-month
period ended March 31, 2018, as compared to $6.7 million, or a
daily rate of $12,352 for the corresponding period of 2017. This
decrease is primarily associated with crewing and technical
efficiencies achieved during the first quarter of 2018 as compared
to the corresponding period of 2017.
Interest and finance costs were $12.0 million in
the first quarter of 2018 as compared to $8.9 million in the first
quarter of 2017, which represents an increase of $3.2 million, or
35.5%. As discussed above, this increase is commensurate with the
increase in the weighted average interest for the first quarter of
2018 mainly as a result of the increased costs associated with the
$480.0 million institutional senior secured term loan B facility
due in 2023 (the “Term Loan B”) which the Partnership entered into
on May 18, 2017.
The Partnership reported average daily hire
gross of commissions(1) of approximately $66,300 per day per
vessel in the three months ended March 31, 2018, compared to
approximately $76,700 per day per vessel in the same period of
2017. During the three-month period ended March 31, 2018, the
Partnership’s vessels operated at 100% utilization compared to 99%
utilization in the same period of 2017.
(1)
Average daily hire gross of commissions represents voyage revenue
without taking into consideration the non-cash time charter
amortization expense and amortization of prepaid charter revenue,
divided by the Available Days in the Partnership’s fleet as
described in Appendix B. |
Amounts relating to variations in period–on–period comparisons
shown in this section are derived from the condensed financials
presented below.
Liquidity/ Financing/ Cash Flow
Coverage
As of March 31, 2018, the Partnership reported
free cash of $61.4 million. Total indebtedness outstanding as of
March 31, 2018 was $726.4 million (gross of unamortized deferred
loan fees), which, apart from amounts outstanding under the Term
Loan B, also includes the Partnership’s $250.0 million senior
unsecured notes due October 2019. As of March 31, 2018, $4.8
million of the Partnership’s outstanding indebtedness was repayable
within one year.
The Partnership’s liquidity profile is further
enhanced by the $30.0 million of borrowing capacity under the
Partnership’s revolving credit facility with its Sponsor, which is
available to the Partnership at any time until November 2018 and
remains available in its entirety as of the date of this
release.
As of March 31, 2018, the Partnership reported
working capital surplus of $44.2 million (Q4 2017: $47.5
million).
During the three months ended March 31, 2018,
the Partnership generated net cash from operating activities of
$11.9 million as compared to $18.2 million in the same period of
2017, which represents a decrease of $6.3 million, or 34.7%. This
decrease was attributable to the decrease in period net income due
to the factors discussed above.
Vessel Employment
As of May 16, 2018, the Partnership had
estimated contracted time charter coverage(2) for 85% of its fleet
estimated Available Days (as defined in Appendix B) for the
remaining 2018, 92% of its fleet estimated Available Days for 2019
and 100% of its fleet estimated Available Days for 2020.
As of the same date, the Partnership’s
contracted revenue backlog estimate(3) was approximately $1.46
billion, with an average remaining contract term of 10.2 years.
(2) Time
charter coverage for the Partnership’s fleet is calculated by
dividing the fleet contracted days on the basis of the earliest
estimated delivery and redelivery dates prescribed in the
Partnership’s current time charter contracts net of scheduled class
survey repairs by the number of expected Available days during that
period. |
(3) The Partnership
calculates its contracted revenue backlog by multiplying the
contractual daily hire rate by the expected number of days
committed under the contracts (assuming earliest delivery and
redelivery and excluding options to extend), assuming full
utilization. The actual amount of revenues earned and the actual
periods during which revenues are earned may differ from the
amounts and periods disclosed due to, for example, dry-docking
and/or special survey downtime, maintenance projects, off-hire
downtime and other factors that result in lower revenues than the
Partnership’s average contract backlog per day. Certain time
charter contracts that the Partnership recently entered into with
Yamal Trade Pte. are subject to the satisfaction of important
conditions, which, if not satisfied, or waived by the charterer,
may result in their cancellation or amendment before or after the
charter term commences and in such case the Partnership may not
receive the contracted revenues thereunder. |
Conference Call and Webcast: May 17, 2018
As announced, the Partnership’s management team
will host a conference call on Thursday, May 17, 2018 at 10:00 a.m.
Eastern Time to discuss the Partnership’s financial results.
Conference Call details:
Participants should dial into the call 10
minutes before the scheduled time using the following numbers: 1
(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or
(+44) (0) 1452 542 301 (Standard International Dial In). Please
quote "Dynagas."
A telephonic replay of the conference call will
be available until Thursday, May 24th, 2018. The United States
replay number is 1 (866) 247-4222; from the UK 0(800) 953-1533; the
standard international replay number is (+44) (0) 1452 550 000 and
the access code required for the replay is: 59711562#.
Audio Webcast - Slides
Presentation:
There will be a live and then archived audio
webcast of the conference call, via the internet through the
Dynagas LNG Partners website www.dynagaspartners.com. Participants
to the live webcast should register on the website approximately 10
minutes prior to the start of the webcast.
The slide presentation on the first quarter
ended March 31, 2018 financial results will be available in PDF
format 10 minutes prior to the conference call and webcast,
accessible on the company's website www.dynagaspartners.com on the
webcast page. Participants to the webcast can download the PDF
presentation.
About Dynagas LNG Partners
LP
Dynagas LNG Partners LP (NYSE:DLNG) is a
growth-oriented partnership formed by Dynagas Holding Ltd., its
sponsor, to own and operate liquefied natural gas (“LNG”) carriers
employed on multi-year charters. The Partnership’s current fleet
consists of six LNG carriers, with an aggregate carrying capacity
of approximately 914,000 cubic meters.
Visit the Partnership’s website at
www.dynagaspartners.com Contact
Information:Dynagas LNG Partners LP 23, Rue Basse, 98000
Monaco Attention: Michael Gregos Tel. +377 99996445 Email:
management@dynagaspartners.com
Investor Relations / Financial Media: Nicolas
Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536
New York, NY 10169 Tel. (212) 661-7566 E-mail:
dynagas@capitallink.com
Forward-Looking Statement
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Partnership desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “may,” “should,” “expect,” “expected,” “pending,”
“will” and similar expressions identify forward-looking
statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, examination by the Partnership’s management of
historical operating trends, data contained in its records and
other data available from third parties. Although the Partnership
believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond the Partnership’s control, the
Partnership cannot assure you that it will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in the Partnership’s view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies
and currencies, general market conditions, including fluctuations
in charter rates and vessel values,
changes in demand for Liquefied
Natural Gas (LNG) shipping capacity, changes in
the Partnership’s operating expenses, including bunker prices,
drydocking and insurance costs, the market for the Partnership’s
vessels, availability of financing and refinancing, changes in
governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation,
general domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events,
vessel breakdowns and instances of off-hires, the amount of cash
available for distribution, and other factors. Please see the
Partnership’s filings with the Securities and Exchange Commission
for a more complete discussion
of these and other risks and
uncertainties. The information set forth herein speaks
only as of the date hereof, and the Partnership disclaims any
intention or obligation to update any forward-looking statements as
a result of developments occurring after the date of this
communication.
APPENDIX A
DYNAGAS LNG PARTNERS
LPUnaudited Condensed Consolidated Statements of
Income
|
|
Three Months EndedMarch 31, |
(In thousands of U.S.
dollars except units and per unit data) |
|
2018 |
|
|
|
2017 |
|
REVENUES |
|
|
|
|
|
Voyage revenues |
$ |
33,904 |
|
|
$ |
39,092 |
|
EXPENSES |
|
|
|
|
|
Voyage expenses
(including related party) |
|
(621 |
) |
|
|
(872 |
) |
Vessel operating
expenses |
|
(6,340 |
) |
|
|
(6,670 |
) |
Dry-docking and special
survey costs |
|
(467 |
) |
|
|
(220 |
) |
General and
administrative expenses (including related party) |
|
(629 |
) |
|
|
(442 |
) |
Management fees
-related party |
|
(1,565 |
) |
|
|
(1,519 |
) |
Depreciation |
|
(7,476 |
) |
|
|
(7,476 |
) |
Operating
income |
|
16,806 |
|
|
|
21,893 |
|
Interest and finance
costs, net |
|
(11,882 |
) |
|
|
(8,890 |
) |
Other, net |
|
(84 |
) |
|
|
(91 |
) |
|
|
|
|
|
|
Net
income |
$ |
4,840 |
|
|
$ |
12,912 |
|
Earnings per
unit, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
Common unit (basic and
diluted) |
$ |
0.09 |
|
|
$ |
0.32 |
|
Weighted
average number of units outstanding, basic and
diluted: |
|
|
|
|
|
Common units |
|
35,490,000 |
|
|
|
31,660,500 |
|
|
|
|
|
|
|
|
|
DYNAGAS LNG PARTNERS LP
Consolidated Condensed Balance Sheets
(unaudited)(Expressed in thousands of U.S.
Dollars—except for unit data)
|
|
March 31, 2018 |
|
|
December 31, 2017 |
ASSETS |
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
Cash and cash
equivalents |
$ |
61,401 |
|
$ |
67,464 |
Due from related
party |
|
1,635 |
|
|
883 |
Other current
assets |
|
3,092 |
|
|
2,057 |
Total current
assets |
|
66,128 |
|
|
70,404 |
|
|
|
|
|
|
FIXED ASSETS,
NET: |
|
|
|
|
|
Vessels, net |
|
970,230 |
|
|
977,298 |
Total fixed
assets, net |
|
970,230 |
|
|
977,298 |
OTHER NON
CURRENT ASSETS: |
|
|
|
|
|
Due from related
party |
|
1,350 |
|
|
1,350 |
Above market acquired
time charters |
|
3,480 |
|
|
5,267 |
Total
assets |
$ |
1,041,188 |
|
$ |
1,054,319 |
|
|
|
|
|
|
LIABILITIES AND
PARTNERS’ EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Current portion of
long-term debt, net of deferred financing costs |
$ |
2,663 |
|
$ |
2,655 |
Trade payables |
|
6,767 |
|
|
4,497 |
Due to related
party |
|
241 |
|
|
72 |
Accrued
liabilities |
|
3,820 |
|
|
4,051 |
Unearned revenue |
|
8,408 |
|
|
11,623 |
Total current
liabilities |
|
21,899 |
|
|
22,898 |
Deferred revenue |
|
1,543 |
|
|
1,405 |
Long-term debt, net of
current portion and deferred financing costs |
|
711,302 |
|
|
711,698 |
Total
non-current liabilities |
|
712,845 |
|
|
713,103 |
|
|
|
|
|
|
PARTNERS’
EQUITY |
|
|
|
|
|
General partner
(35,526 units issued and outstanding as at March 31, 2018 and
December 31, 2017) |
|
18 |
|
|
47 |
Common unitholders
(35,490,000 units issued and outstanding as at March 31, 2018 and
December 31, 2017) |
|
233,210 |
|
|
245,055 |
Series A Preferred
unitholders: (3,000,000 units issued and outstanding as at March
31, 2018 and December 31, 2017) |
|
73,216 |
|
|
73,216 |
Total partners’
equity |
|
306,444 |
|
|
318,318 |
|
|
|
|
|
|
Total
liabilities and partners’ equity |
$ |
1,041,188 |
|
$ |
1,054,319 |
|
DYNAGAS LNG PARTNERS LP
Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2018 |
|
|
2017 |
Cash flows from
Operating Activities: |
|
|
|
|
|
Net income: |
$ |
4,840 |
|
|
$ |
12,912 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation |
|
7,476 |
|
|
|
7,476 |
|
Amortization of
deferred financing fees |
|
811 |
|
|
|
486 |
|
Amortization of fair
value of acquired time charter |
|
1,787 |
|
|
|
1,787 |
|
Deferred revenue |
|
138 |
|
|
|
(14 |
) |
Changes in
operating assets and liabilities: |
|
|
|
|
|
Trade receivables |
|
42 |
|
|
|
24 |
|
Prepayments and other
assets |
|
(49 |
) |
|
|
(174 |
) |
Inventories |
|
(1,028 |
) |
|
|
46 |
|
Due from/ to related
parties |
|
(583 |
) |
|
|
369 |
|
Trade payables |
|
1,863 |
|
|
|
1,075 |
|
Accrued
liabilities |
|
(229 |
) |
|
|
(238 |
) |
Unearned revenue |
|
(3,215 |
) |
|
|
(5,589 |
) |
|
|
|
|
|
|
Net cash from
Operating Activities |
|
11,853 |
|
|
|
18,160 |
|
|
|
|
|
|
|
Cash flows from
Investing Activities |
|
|
|
|
|
Vessel Acquisitions and
other additions to vessels’ cost |
|
— |
|
|
|
— |
|
Net cash used
in Investing Activities |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
Cash flows from
Financing Activities: |
|
|
|
|
|
Payment of debt
securities registration and other filing costs |
|
(2 |
) |
|
|
— |
|
Distributions declared
and paid |
|
(16,714 |
) |
|
|
(16,715 |
) |
Repayment of long-term
debt |
|
(1,200 |
) |
|
|
(8,125 |
) |
Net cash used
in Financing Activities |
|
(17,916 |
) |
|
|
(24,840 |
) |
|
|
|
|
|
|
Net decrease in
cash and cash equivalents |
|
(6,063 |
) |
|
|
(6,680 |
) |
Cash and cash
equivalents at beginning of the period |
|
67,464 |
|
|
|
57,595 |
|
Cash and cash
equivalents at end of the period |
$ |
61,401 |
|
|
$ |
50,915 |
|
|
Supplemental Information
ARCTIC LNG CARRIERS Ltd. and its operating
subsidiaries
The following table sets forth summary financial
information of Arctic LNG Carriers Ltd., the Partnership’s wholly
owned subsidiary and borrower under the Term Loan B facility and
each of its vessel owning subsidiaries which is a subsidiary
guarantor of the Term Loan B (collectively “Arctic LNG Carriers”)
as at and for the periods presented, which are derived from the
unaudited interim financial statements of Arctic LNG Carriers and
are presented in connection with certain reporting requirements
governing the Term Loan B.
|
|
March 31, |
|
|
December 31, |
(expressed in thousands
of United states dollars) |
|
2018 |
|
|
2017 |
Balance sheet
data: |
|
|
|
|
|
Total assets |
$ |
998,755 |
|
$ |
1,010,034 |
Total cash |
|
21,304 |
|
|
24,596 |
Total debt, net of
deferred loan fees |
$ |
465,735 |
|
$ |
466,402 |
|
|
Three months ended March 31, |
(expressed in thousands
of United states dollars) |
|
2018 |
Income
statement and other operational data: |
|
|
Net income |
$ |
9,521 |
Revenues |
|
33,904 |
Adjusted EBITDA |
$ |
27,218 |
Arctic LNG Carriers reconciliation of net income to
Adjusted EBITDA
|
|
Three months ended March 31, |
(In thousands of
U.S. dollars) |
|
2018 |
Net income |
$ |
9,521 |
Net interest and
finance costs (1) |
|
7,829 |
Depreciation |
|
7,476 |
Class survey costs |
|
467 |
Amortization of fair
value of acquired time charter |
|
1,787 |
Charter hire
amortization |
|
138 |
Adjusted
EBITDA |
$ |
27,218 |
|
(1)
Includes interest and finance costs (inclusive of amortization of
deferred financing costs), net of interest income, if any. |
|
APPENDIX B
Fleet statistics
|
|
Three Months Ended March 31, |
(expressed in United
states dollars except for operational data) |
|
2018 |
|
2017 |
Number of vessels at
the end of period |
|
6.0 |
|
|
6.0 |
|
Average number of
vessels in the period (1) |
|
6.0 |
|
|
6.0 |
|
Calendar Days (2) |
|
540.0 |
|
|
540.0 |
|
Available Days (3) |
|
540.0 |
|
|
540.0 |
|
Revenue earning days
(4) |
|
540.0 |
|
|
532.3 |
|
Time Charter Equivalent
(5) |
$ |
61,635 |
|
$ |
70,778 |
|
Fleet Utilization
(4) |
|
100 |
% |
|
99 |
% |
Vessel daily operating
expenses (6) |
$ |
11,741 |
|
$ |
12,352 |
|
|
(1) Represents the number of vessels that constituted the
Partnership’s fleet for the relevant period, as measured by the sum
of the number of days each vessel was a part of its fleet during
the period divided by the number of Calendar Days (defined below)
in the period. |
(2) Calendar Days are the total days the Partnership possessed
the vessels in its fleet for the relevant period. |
(3) Available Days are the total number of Calendar Days the
Partnership’s vessels were in its possession during a period, less
the total number of scheduled off-hire days during the period
associated with major repairs, or dry-dockings. |
(4) The Partnership calculates fleet utilization by dividing
the number of its Revenue earning days, which are the total number
of Available Days of the Partnership’s vessels net of unscheduled
off-hire days, during a period, by the number of Available Days
during that period. The shipping industry uses fleet utilization to
measure a company’s efficiency in finding employment for its
vessels and minimizing the amount of days that its vessels are
off-hire for reasons such as unscheduled repairs but excluding
scheduled off-hires for vessel upgrades, dry-dockings or special or
intermediate surveys. |
(5) Time charter equivalent rate, or TCE rate, is a measure of
the average daily revenue performance of a vessel. For time
charters, this is calculated by dividing total voyage revenues,
less any voyage expenses, by the number of Available Days during
that period. Under a time charter, the charterer pays substantially
all vessel voyage related expenses. However, the Partnership may
incur voyage related expenses when positioning or repositioning
vessels before or after the period of a time charter, during
periods of commercial waiting time or while off-hire during
dry-docking or due to other unforeseen circumstances. The TCE rate
is not a measure of financial performance under U.S. GAAP (non-GAAP
measure), and should not be considered as an alternative to voyage
revenues, the most directly comparable GAAP measure, or any other
measure of financial performance presented in accordance with U.S.
GAAP. However, TCE rate is a standard shipping industry performance
measure used primarily to compare period-to-period changes in a
company’s performance and assists the Partnership’s management in
making decisions regarding the deployment and use of the
Partnership’s vessels and in evaluating their financial
performance. The Partnership’s calculation of TCE rates may not be
comparable to that reported by other companies. The following table
reflects the calculation of the Partnership’s TCE rates for the
three months and ended March 31, 2018 and 2017 (amounts in
thousands of U.S. dollars, except for TCE rates, which are
expressed in U.S. dollars, and Available Days): |
|
|
Three Months Ended March
31, |
|
|
2018 |
|
2017 |
(In thousands of U.S.
dollars, except for Available Days and TCE rate) |
|
|
|
|
Voyage revenues |
$ |
33,904 |
|
$ |
39,092 |
|
Voyage expenses
(7) |
|
(621 |
) |
|
(872 |
) |
Time Charter
equivalent revenues |
$ |
33,283 |
|
$ |
38,220 |
|
Available Days (3) |
|
540 |
|
|
540 |
|
Time charter
equivalent (TCE) rate |
$ |
61,635 |
|
$ |
70,778 |
|
|
(6) Daily vessel operating expenses, which include crew costs,
provisions, deck and engine stores, lubricating oil, insurance,
spares and repairs and flag taxes, are calculated by dividing
vessel operating expenses by fleet Calendar Days for the relevant
time period. |
(7) Voyage expenses include commissions of 1.25% paid to
Dynagas Ltd., the Partnership’s Manager, and third party ship
brokers, when defined in the charter parties, bunkers, port
expenses and other minor voyage expenses. |
|
Reconciliation of U.S. GAAP Financial
Information to Non-GAAP Financial Information
Reconciliation of Net Income to Adjusted
EBITDA
|
|
Three Months Ended March 31, |
(In thousands of
U.S. dollars) |
|
2018 |
|
2017 |
Net income |
$ |
4,840 |
|
$ |
12,912 |
|
Net interest and
finance costs (1) |
|
11,882 |
|
|
8,890 |
|
Depreciation |
|
7,476 |
|
|
7,476 |
|
Class survey costs |
|
467 |
|
|
220 |
|
Amortization of fair
value of acquired time charter |
|
1,787 |
|
|
1,787 |
|
Charter hire
amortization |
|
138 |
|
|
(14 |
) |
Adjusted
EBITDA |
$ |
26,590 |
|
$ |
31,271 |
|
|
(1)
Includes interest and finance costs and interest income, if
any |
|
The Partnership defines Adjusted EBITDA as
earnings before interest and finance costs, net of interest income
(if any), gains/losses on derivative financial instruments (if
any), taxes (when incurred), depreciation and amortization (when
incurred), class survey costs and significant non-recurring items
(if any). Adjusted EBITDA is used as a supplemental financial
measure by management and external users of financial statements,
such as investors, to assess the Partnership’s operating
performance.
The Partnership believes that Adjusted EBITDA
assists its management and investors by providing useful
information that increases the ability to compare the Partnership’s
operating performance from period to period and against that of
other companies in its industry that provide Adjusted EBITDA
information. This increased comparability is achieved by excluding
the potentially disparate effects between periods or companies of
interest, other financial items, depreciation and amortization and
taxes, which items are affected by various and possibly changing
financing methods, capital structure and historical cost basis and
which items may significantly affect net income between periods.
The Partnership believes that including Adjusted EBITDA as a
measure of operating performance benefits investors in (a)
selecting between investing in the Partnership and other investment
alternatives and (b) monitoring the Partnership’s ongoing financial
and operational strength in assessing whether to continue to hold
common units.
Adjusted EBITDA is not a measure of financial
performance under U.S. GAAP, does not represent and should not be
considered as an alternative to net income, operating income, cash
flow from operating activities or any other measure of financial
performance presented in accordance with U.S. GAAP. Adjusted EBITDA
excludes some, but not all, items that affect net income and these
measures may vary among other companies. Therefore, Adjusted EBITDA
as presented above may not be comparable to similarly titled
measures of other companies.
Reconciliation of Net Income to Adjusted Net Income
available to common unitholders and Adjusted Earnings per common
unit
|
|
Three Months Ended March 31, |
(In thousands of
U.S. dollars except for units and per unit data) |
|
2018 |
|
|
2017 |
Net income |
$ |
4,840 |
|
|
$ |
12,912 |
|
Charter hire
amortization |
|
138 |
|
|
|
(14 |
) |
Amortization of fair
value of acquired time charter |
|
1,787 |
|
|
|
1,787 |
|
Class survey costs |
|
467 |
|
|
|
220 |
|
Adjusted Net
Income |
$ |
7,232 |
|
|
$ |
14,905 |
|
Less: Adjusted Net
Income attributable to subordinated, preferred unitholders and
general partner |
|
(1,693 |
) |
|
|
(3,141 |
) |
Common
unitholders’ interest in Adjusted Net Income |
$ |
5,539 |
|
|
$ |
11,764 |
|
Weighted average number
of common units outstanding, basic and diluted: |
|
35,490,000 |
|
|
|
31,660,500 |
|
Adjusted
Earnings per common unit, basic and diluted |
$ |
0.16 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
Adjusted Net Income represents net income before
non-recurring expenses (if any), charter hire amortization related
to time charters with escalating time charter rates and
amortization of fair value of acquired time charters, all of which
are significant non-cash items. Adjusted Net Income available to
common unitholders represents the common unitholders interest in
Adjusted Net Income for each period presented. Adjusted Earnings
per common unit represents Adjusted Net Income attributable to
common unitholders divided by the weighted average common units
outstanding during each period presented.
Adjusted Net Income, Adjusted Net Income per
common unit and Adjusted Earnings per common unit, basic and
diluted, are not recognized measures under U.S. GAAP and should not
be regarded as substitutes for net income and earnings per unit,
basic and diluted. The Partnership’s definition of Adjusted Net
Income, Adjusted Net Income per common unit and Adjusted Earnings
per common unit, basic and diluted, may not be the same at that
reported by other companies in the shipping industry or other
industries. The Partnership believes that the presentation of
Adjusted Net Income and Adjusted Earnings per unit available to
common unitholders are useful to investors because they facilitate
the comparability and the evaluation of companies in the
Partnership’s industry. In addition, the Partnership believes that
Adjusted Net Income is useful in evaluating its operating
performance compared to that of other companies in the
Partnership’s industry because the calculation of Adjusted Net
Income generally eliminates the accounting effects of items which
may vary for different companies for reasons unrelated to overall
operating performance. The Partnership’s presentation of Adjusted
Net Income available to common unitholders and Adjusted Earnings
per common unit should not be construed as an inference that its
future results will be unaffected by unusual or non-recurring
items.
Distributable Cash Flow Reconciliation
|
|
Three Months EndedMarch
31, |
(In thousands of
U.S. dollars) |
|
2018 |
|
2017 |
Net
income |
$ |
4,840 |
|
$ |
12,912 |
|
Depreciation |
|
7,476 |
|
|
7,476 |
|
Amortization of
deferred finance fees |
|
811 |
|
|
486 |
|
Net interest and
finance costs, excluding amortization(1) |
|
11,071 |
|
|
8,404 |
|
Class survey costs |
|
467 |
|
|
220 |
|
Amortization of fair
value of acquired time charters |
|
1,787 |
|
|
1, 787 |
|
Charter hire
amortization |
|
138 |
|
|
(14 |
) |
Adjusted
EBITDA |
$ |
26,590 |
|
$ |
31,271 |
|
Less: Net interest and
finance costs, excluding amortization(1) |
|
(11,071 |
) |
|
(8,404 |
) |
Maintenance capital expenditure reserves |
|
(1,038 |
) |
|
(1,038 |
) |
Replacement capital expenditure reserves |
|
(3,195 |
) |
|
(3,195 |
) |
Distributable
Cash Flow |
$ |
11,286 |
|
$ |
18,634 |
|
|
(1)
Includes interest and finance costs and interest income, if
any. |
|
Distributable Cash Flow with respect to any period presented
means Adjusted EBITDA after considering period interest and finance
costs and estimated maintenance and replacement capital
expenditures. Estimated maintenance and replacement capital
expenditures, including estimated expenditures for drydocking,
represent capital expenditures required to maintain over the
long-term the operating capacity of, or the revenue generated by
the Partnership’s capital assets. Distributable Cash Flow is a
quantitative standard used by investors in publicly-traded
partnerships to assist in evaluating a partnership’s ability to
make quarterly cash distributions. The Partnership’s calculation of
the Distributable Cash Flow may not be comparable to that reported
by other companies. Distributable Cash Flow is a non-GAAP financial
measure and should not be considered as an alternative to net
income or any other indicator of the Partnership’s performance
calculated in accordance with GAAP.
Dynagas LNG Partners (NYSE:DLNG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Dynagas LNG Partners (NYSE:DLNG)
Historical Stock Chart
From Apr 2023 to Apr 2024