U.S. Markets closed

Teekay LNG Partners Reports Third Quarter 2019 Results

Highlights

  • GAAP net income attributable to the partners and preferred unitholders of $47.4 million and GAAP net income per common unit of $0.51.
  • Adjusted net income(1) attributable to the partners and preferred unitholders of $50.5 million and adjusted net income per common unit of $0.55 (excluding items listed in Appendix A to this release).
  • Total Adjusted EBITDA(1) of $180.2 million.
  • Took delivery of fourth and fifth, 50 percent-owned ARC7 LNG carrier newbuildings in August 2019 and early-November 2019, respectively; final ARC7 newbuilding expected to deliver in late-November 2019.
  • Bahrain LNG Regasification terminal expected to commence operations before year-end.
  • Fiscal 2019 earnings guidance range revised upwards by 10 percent(2) and today introducing 2020 guidance with earnings per unit projected to increase by over 55 percent(2) from 2019 guidance.
  • Expect distributions to increase by 32 percent, to $1.00 per common unit per annum, commencing with the first quarter of 2020 distribution, a second consecutive year of distribution growth in excess of 30 percent.

HAMILTON, Bermuda, Nov. 13, 2019 (GLOBE NEWSWIRE) -- Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (TGP), today reported the Partnership’s results for the quarter ended September 30, 2019.

Consolidated Financial Summary

  Three Months Ended
  September 30, 2019 June 30, 2019 September 30, 2018
(in thousands of U.S. Dollars, except per unit data) (unaudited) (unaudited) (unaudited)
GAAP FINANCIAL COMPARISON      
Voyage revenues 149,655   153,060   123,336  
Income from vessel operations 71,611   74,677   46,998  
Equity income 21,296   1,738   14,679  
Net income attributable to the partners and preferred unitholders 47,368   16,435   25,950  
Limited partners’ interest in net income per common unit 0.51   0.12   0.24  
NON-GAAP FINANCIAL COMPARISON      
Adjusted net income attributable to the partners and preferred unitholders(1) 50,514   34,435   19,474  
Limited partners’ interest in adjusted net income per common unit 0.55   0.35   0.16  
Total Adjusted EBITDA(1) 180,216   162,069   132,593  
Distributable cash flow (DCF)(1) 70,925   56,330   41,214  

(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)  Based on midpoint of 2020 and 2019 guidance ranges.

Third Quarter of 2019 Compared to Third Quarter of 2018

GAAP net income and non-GAAP adjusted net income attributable to the partners and preferred unitholders for the three months ended September 30, 2019, compared to the same quarter in the prior year, were positively impacted by: earnings from the nine liquefied natural gas (LNG) carrier newbuildings which delivered into the Partnership’s consolidated fleet and equity-accounted joint ventures between July 2018 and August 2019; higher earnings from the Torben Spirit upon redeployment at a higher charter rate that commenced in December 2018; higher earnings from the Magellan Spirit, which was chartered-in from the Partnership’s 52 percent-owned joint venture with Marubeni Corporation (the MALT Joint Venture) commencing in September 2018; higher earnings in the MALT Joint Venture from the commencements of the Arwa Spirit and Marib Spirit one-year charter contracts at higher rates in June and July 2019, respectively, and recognition of drydock hire revenue for the Meridian Spirit; and higher earnings from the Partnership's seven multi-gas carriers. These increases were partially offset by lower earnings due to more off-hire days for scheduled dry dockings and repairs during the third quarter of 2019 for certain of the Partnership's LNG carriers compared to the same quarter of the prior year.

In addition, GAAP net income attributable to the partners and preferred unitholders was negatively impacted in the three months ended September 30, 2019, compared to the same quarter of the prior year, by various items, including  unrealized losses on non-designated derivative instruments in the third quarter of 2019 compared to gains on non-designated derivative instruments in the third quarter of 2018, partially offset by a decrease in the write-down of vessels.

CEO Commentary

“During the third quarter of 2019, Teekay LNG recorded its highest ever quarterly results with adjusted earnings per common unit up almost 3.5x from the same period of the previous year,” commented Mark Kremin, President and Chief Executive Officer of Teekay Gas Group Ltd. “We expect Teekay LNG’s results will continue to increase, as reflected in our increased and tightened 2019 guidance range and a new, higher 2020 guidance range issued today. Based on this foundation of earnings growth expected in 2020, we intend to increase our distributions by 32 percent to $1.00 per common unit per annum, starting with our first quarter of 2020 distribution payable in May 2020.”  Mr. Kremin continued, "I am also pleased to report that with the recent sale of our last conventional tanker, Teekay LNG is now 100 percent focused on our core business of transporting LNG and LPG."

“We are currently in the process of completing the last of our recent phase of growth projects,” commented Mr. Kremin. “We have made good progress and anticipate the start-up of the Bahrain regasification terminal before the end of the year. In August and early-November 2019, we delivered our fourth and fifth ARC7 ice-breaking LNG carriers for the Yamal LNG project, which immediately commenced their respective long-term charter contracts. We expect the sixth ARC7 to deliver and commence its long-term charter contract with Yamal in late-November 2019, which will mark the successful completion of the $3.5 billion growth program we commenced in 2013. With nearly all of our current growth projects delivered and generating cash flows under long-term contracts, we are moving from a phase of project execution to a period of significant cash flow generation, which we believe will enable the Partnership to allocate capital towards balance sheet delevering and returning capital to unitholders.”

Revising 2019 Guidance Higher and Introducing 2020 Guidance

Today, the Partnership is providing the below supplementary information relating to the outlook for the Partnership’s estimated fiscal 2019 results, which have been revised higher, and is introducing estimated fiscal 2020 results, the majority of which are expected to be significantly higher than estimated fiscal 2019 results 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) Revised Fiscal
2019E(2)
Percentage
Increase over
Previous 2019
Guidance(3)
Fiscal 2020E(2) Percentage
Increase /
(Decrease) from
Revised 2019
Guidance(3)
Adjusted net income attributable to the partners and preferred unitholders(1) 165 to 175 10% 230 to 270 47%
Limited partners' interest in adjusted net income per common unit(1) $1.75 to $1.85 11% $2.60 to $3.10 58%
Consolidated Adjusted EBITDA(1) 435 to 445 2% 410 to 430 (5)%
Total Adjusted EBITDA(1) 685 to 695 2% 750 to 780 11%

(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. Each of these non-GAAP financial measures excludes approximately $31 million of previously deferred revenue the Partnership expects to receive upon the sale of the WilForce and WilPride LNG carriers in late-2019 or early-2020.

(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.

(3)  Based on midpoint of 2020 and 2019 guidance ranges.

Summary of Recent Events

In December 2018, the Board of Teekay LNG's general partner approved a $100 million unit repurchase program. Since that time, the Partnership has repurchased a total of 2.26 million common units, or approximately 2.8 percent of the outstanding common units immediately prior to commencement of the program, for a total cost of $28.9 million, representing an average repurchase price of $12.78 per unit.  Since early-August 2019, Teekay LNG repurchased 816,672 units at an average price of $14.33 per unit, for a total cost of $11.7 million.

In August and November 2019, the Partnership took delivery of the fourth and fifth 50 percent-owned ARC7 LNG carrier newbuildings, respectively, the Vladimir Voronin and Georgiy Ushakov, which immediately commenced their 26-year charter contracts servicing the Yamal LNG project.

On September 25, 2019, the United States Government, by an Executive Order of the Department of the Treasury’s Office of Foreign Assets Control (OFAC), imposed sanctions on COSCO Shipping Tanker (Dalian) Co., Ltd. (COSCO Dalian). At the time, COSCO Dalian owned 50 percent of China LNG Shipping (Holdings) Limited (CLNG). CLNG was not listed on the OFAC Order as Specially Designated National or involved in any sanctioned activity, but by virtue of being 50 percent-owned by COSCO Dalian at the time, CLNG was designated as a “Blocked Person” under OFAC's deeming rules. CLNG, in turn, owns a 50 percent interest in Teekay LNG’s Yamal LNG joint venture (the Yamal LNG Joint Venture), which owns five on-the-water ARC7 LNG carriers and one ARC7 LNG carrier newbuilding. As a result of CLNG’s 50 percent interest, the Yamal LNG Joint Venture at the time also qualified as a “Blocked Person" under OFAC's deeming rules.

On October 21, 2019, the COSCO group completed an ownership restructuring on arms-length terms pursuant to which its 50 percent interest in CLNG was transferred from COSCO Dalian to a non-sanctioned COSCO entity, which automatically resulted in CLNG and the Yamal LNG Joint Venture no longer being classified as a “Blocked Person” under OFAC's deeming rules. Teekay LNG does not expect any material impact to the Partnership from these resolved issues.

On October 16, 2019, the Partnership sold its last remaining conventional tanker, the Alexander Spirit, for net proceeds of $11.5 million.

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 D and E for further details).

  Three Months Ended
  September 30, 2019 September 30, 2018
(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 137,212   10,846   1,597   149,655   111,909   6,279   5,148   123,336  
Income (loss) from vessel operations 73,236   (1,124 ) (501 ) 71,611   56,813   (5,232 ) (4,583 ) 46,998  
Equity income (loss) 20,262   1,034     21,296   15,953   (1,274 )   14,679  
NON-GAAP FINANCIAL COMPARISON                
Consolidated Adjusted EBITDA(i) 109,556   867   292   110,715   87,889   (3,265 ) 128   84,752  
Adjusted EBITDA from equity-accounted vessels(i) 59,646   9,855     69,501   40,381   7,460     47,841  
Total Adjusted EBITDA(i) 169,202   10,722   292   180,216   128,270   4,195   128   132,593  

(i) 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 Consolidated Adjusted EBITDA for the liquefied natural gas segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of four wholly-owned LNG carrier newbuildings (the Megara, Bahrain Spirit, Sean Spirit and Yamal Spirit) between July 2018 and January 2019; higher earnings from the Magellan Spirit, which was chartered-in from the Partnership’s 52 percent-owned MALT Joint Venture commencing in September 2018; and higher earnings from the Torben Spirit upon redeployment in December 2018 at a higher charter rate. These increases were partially offset by an increase in off-hire days in the third quarter of 2019 for the Madrid Spirit due to a scheduled dry docking and repairs.

Equity income and Adjusted EBITDA from equity-accounted vessels for the liquefied natural gas segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, were positively impacted primarily by: the deliveries of three ARC7 LNG carrier newbuildings between September 2018 and August 2019 to the Partnership’s 50 percent-owned Yamal LNG Joint Venture; the deliveries of two LNG carrier newbuildings between July 2018 and January 2019 to the Partnership's 20 percent-owned joint venture with CLNG, CETS Investment Management (HK) Co. Limited and BW LNG Investments Pte. Ltd. (the Pan Union Joint Venture); and higher earnings in the MALT Joint Venture from the commencements of the Arwa Spirit and Marib Spirit one-year charter contracts at higher rates in June and July 2019, respectively, and recognition of drydock hire revenue for the Meridian Spirit. These increases were partially offset by the commencement of the time-charter in contract for the Bahrain Spirit floating storage unit (FSU) in September 2018 in the Bahrain LNG Joint Venture ahead of the commencement of operations of the LNG receiving and regasification terminal in Bahrain. In addition, GAAP equity income was negatively impacted by unrealized losses on non-designated derivative instruments in the Partnership's equity-accounted joint ventures in the third quarter of 2019 compared to gains on designated and non-designated derivative instruments in the third quarter of 2018.

Liquefied Petroleum Gas Segment

Loss from vessel operations and Consolidated Adjusted EBITDA for the liquefied petroleum gas segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, were positively impacted by higher earnings from the Partnership's seven multi-gas carriers, which earned higher spot revenues during the third quarter of 2019.

Equity income (loss) and Adjusted EBITDA from equity-accounted vessels for the liquefied petroleum gas segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, were positively impacted by higher charter rates earned and fewer off-hire days; partially offset by more scheduled dry dockings in the Partnership’s 50/50 joint venture with Exmar NV (the Exmar LPG Joint Venture).

Conventional Tanker Segment

Consolidated Adjusted EBITDA for the conventional tanker segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, remained comparable. Loss from vessel operations for the conventional tanker segment for the three months ended September 30, 2019, compared to the same quarter of the prior year, was positively impacted by lower write-downs related to the Alexander Spirit, European Spirit and African Spirit.

Teekay LNG's Fleet

The following table summarizes the Partnership’s fleet as of November 1, 2019. The Partnership also owns a 30 percent interest in a regasification terminal under construction in Bahrain.

  Number of Vessels
  Owned and In-Chartered
Vessels
(i)
Newbuildings Total
LNG Carrier Fleet 47(ii) 2(iii) 49
LPG/Multi-gas Carrier Fleet 30(iv) 30
Total 77 2 79

(i) Includes vessels leased by the Partnership from third parties and accounted for as finance leases.
(ii) The Partnership’s ownership interests in these vessels range from 20 percent to 100 percent.
(iii) The Partnership’s ownership interest in these newbuildings is 50 percent.
(iv) The Partnership’s ownership interests in these vessels range from 50 percent to 99 percent.

Liquidity

As of September 30, 2019, the Partnership had total liquidity of $329.1 million (comprised of $142.9 million in cash and cash equivalents and $186.2 million in undrawn credit facilities).

Liquidity is expected to increase by approximately $100 million upon the acquisition by Awilco LNG of two of the Partnership's LNG carriers, the WillForce and WillPride, which are subject to purchase obligations that are due by the end of February 2020.

Investor and Analyst Meeting

Teekay Corporation (Teekay), Teekay LNG and Teekay Tankers plan to host an investor and analyst meeting on Thursday, November 14, 2019 at 8:30 a.m. (ET) with presentations from the Senior Leadership of Teekay, Teekay LNG and Teekay Tankers. A live webcast of the presentations will be available to the public in advance of the event on Teekay’s website, www.teekay.com. Please allow extra time prior to the presentation to visit the site and download the necessary software required to listen to the internet broadcast. A recording of the webcast will be archived on the same website following the live presentations.

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 and LPG services primarily under long-term, fee-based charter contracts through its interests in 49 LNG carriers (including one newbuilding), 23 mid-size LPG carriers, and seven multi-gas carriers. 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. 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 SEC. These non-GAAP financial measures which include Adjusted Net Income Attributable to the Partners and Preferred Unitholders, Distributable Cash Flow and Adjusted EBITDA, are intended to provide additional information and should not be considered substitutes for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings across companies, and 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.

In 2018 and prior periods, the Partnership reported Cash Flow from Vessel Operations (CFVO), as a non-GAAP measure. In the first quarter of 2019, the Partnership made certain changes to its non-GAAP financial measures to more closely align with internal management reporting, annual reporting with the SEC under Form 20-F and metrics used by certain investors. CFVO from Consolidated Vessels and Total CFVO were replaced with Consolidated Adjusted EBITDA and Total Adjusted EBITDA, respectively, for current and comparative periods.

Non-GAAP Financial Measures

Adjusted EBITDA represents net income before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel write-downs, gains or losses on sale of vessels and equity-accounted investments, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, amortization of in-process contracts, adjustments for direct financing leases to a cash basis, and certain other income or expenses. Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA represents Adjusted EBITDA from vessels that are consolidated on the Partnership's financial statements. Adjusted EBITDA from Equity-Accounted Vessels represents the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted vessels. The Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted vessels is retained within the entity in which the Partnership holds the equity-accounted investments or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of any such distributions to the Partnership and other owners. Adjusted EBITDA is a non-GAAP financial measure used by certain investors and management to measure the operational performance of companies. Please refer to Appendices C and E of this release for reconciliations of Adjusted EBITDA to net income and equity income, respectively, which are the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements.

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.

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, distributions relating to equity financing of newbuilding installments, distributions relating to preferred units, adjustments for direct financing leases to a cash basis, unrealized foreign currency exchange gains or losses and the Partnership’s proportionate share of such items in its 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.


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

  Three Months Ended Nine Months Ended
  September 30, June 30, September 30, September 30, September 30,
2019 2019 2018 2019 2018
  (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Voyage revenues 149,655   153,060   123,336   452,459   360,957  
           
Voyage expenses (4,961 ) (6,023 ) (7,956 ) (16,759 ) (21,708 )
Vessel operating expenses(1) (27,321 ) (27,457 ) (26,021 ) (80,879 ) (87,207 )
Time-charter hire expense (5,336 ) (3,080 ) (1,690 ) (14,007 ) (1,690 )
Depreciation and amortization (34,248 ) (35,338 ) (32,238 ) (103,712 ) (91,299 )
General and administrative expenses(1) (5,393 ) (5,667 ) (5,783 ) (17,692 ) (20,700 )
Write-down of vessels(2) (785 )   (2,201 ) (785 ) (53,863 )
Restructuring charges(3)   (818 ) (449 ) (2,976 ) (1,845 )
Income from vessel operations 71,611   74,677   46,998   215,649   82,645  
           
Equity income(4) 21,296   1,738   14,679   28,612   52,597  
Interest expense (40,574 ) (41,018 ) (35,875 ) (123,809 ) (88,752 )
Interest income 1,025   960   980   3,063   2,796  
Realized and unrealized (loss) gain on non-designated derivative instruments(5) (3,270 ) (7,826 ) 2,515   (17,713 ) 14,818  
Foreign currency exchange gain (loss)(6) 2,879   (7,243 ) 1,445   (5,095 ) 8,615  
Other (expense) income(7) (1,174 ) 236   314   (687 ) (51,918 )
Net income before income tax expense 51,793   21,524   31,056   100,020   20,801  
Income tax expense (1,442 ) (2,472 ) (1,549 ) (6,492 ) (3,171 )
Net income 50,351   19,052   29,507   93,528   17,630  
           
Non-controlling interest in net income 2,983   2,617   3,557   8,108   (4,160 )
Preferred unitholders' interest in net income 6,426   6,425   6,425   19,276   19,276  
General partner's interest in net income 820   200   391   1,324   51  
Limited partners’ interest in net income 40,122   9,810   19,134   64,820   2,463  
Limited partners' interest in net income per common unit:          
• Basic 0.51   0.12 0.24   0.83   0.03  
• Diluted 0.51   0.12 0.24   0.83   0.03  
Weighted-average number of common units outstanding:          
• Basic 78,012,514   78,603,636   79,687,499   78,402,239   79,671,051  
• Diluted 78,106,770   78,685,537   79,859,471   78,488,331   79,832,978  
Total number of common units outstanding at end of period 77,509,411   78,441,316   79,687,499   77,509,411   79,687,499  

(1) The comparative figures for vessel operating expenses and general and administrative expenses for the three and nine months ended September 30, 2018 have been reclassified to conform to the presentation adopted in the current period relating to the classification of certain related party transactions. The reclassification had the effect of decreasing vessel operating expenses and increasing general and administrative expenses by $1.6 million and $2.9 million, respectively, for the three and nine months ended September 30, 2018. There is no impact on income from vessel operations or net income as a result of this reclassification. 

(2) In September 2019, the Partnership recorded a write-down of $0.8 million for the three and nine months ended September 30, 2019 on the Alexander Spirit, compared to a write-down of $13.0 million for the same vessel during the nine months ended September 30, 2018 to its then estimated fair value. In June 2018, the Partnership wrote-down four of its wholly-owned multi-gas carriers (the Napa Spirit, Pan Spirit, Camilla Spirit and Cathinka Spirit) and recorded an impairment charge of $33.0 million for the nine months ended September 30, 2018. In addition, for the three and nine months ended September 30, 2018, the Partnership recorded aggregate write-downs of $2.2 million and $7.9 million, respectively, on the European Spirit and African Spirit conventional tankers.

(3) In January 2019 and February 2018, the Toledo Spirit and Teide Spirit, respectively, were sold and as a result of these sales, the Partnership recorded restructuring charges of $0.8 million for the three months ended June 30, 2019, $0.5 million for the three months ended September 30, 2018, and $3.0 million and $1.8 million for the nine months ended September 30, 2019 and 2018, respectively, relating to seafarer severance costs. 

(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 Nine Months Ended
  September 30, June 30, September 30, September 30, September 30,
  2019 2019 2018 2019 2018
Equity income 21,296   1,738   14,679   28,612   52,597  
Proportionate share of unrealized loss (gain) on non-designated interest rate swaps 5,150   5,102   (2,614 ) 14,612   (13,812 )
Proportionate share of ineffective portion of hedge-accounted interest rate swaps     (105 )   (5,173 )
Gain on sale of equity-accounted investment         (5,563 )
Proportionate share of other items (77 ) 1,124   (185 ) 1,392   72  
Equity income adjusted for items in Appendix A 26,369   7,964   11,775   44,616   28,121  

(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 Nine Months Ended
  September 30, June 30, September 30, September 30, September 30,
  2019 2019 2018 2019 2018
Realized (losses) gains relating to:          
Interest rate swap agreements (2,621 ) (2,392 ) (3,062 ) (7,398 ) (11,850 )
Interest rate swap agreements termination     (13,681 )   (13,681 )
Toledo Spirit time-charter derivative contract     1,689     2,148  
  (2,621 ) (2,392 ) (15,054 ) (7,398 ) (23,383 )
Unrealized (losses) gains relating to:          
Interest rate swap agreements (215 ) (5,333 ) 19,278   (9,740 ) 38,698  
Foreign currency forward contracts (434 ) (101 )   (535 )  
Interest rate swaption agreements         2  
Toledo Spirit time-charter derivative contract     (1,709 ) (40 ) (499 )
  (649 ) (5,434 ) 17,569   (10,315 ) 38,201  
Total realized and unrealized (losses) gains on non-designated derivative instruments (3,270 ) (7,826 ) 2,515   (17,713 ) 14,818  

(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  gain (loss) 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 Krone (NOK) denominated unsecured bonds. Foreign currency exchange gain (loss) also includes unrealized (losses) gains relating to the change in fair value of such derivative instruments and unrealized gains (losses) on the revaluation of the NOK bonds as detailed in the table below:

  Three Months Ended Nine Months Ended
  September 30, June 30, September 30, September 30, September 30,
  2019 2019 2018 2019 2018
Realized losses on cross-currency swaps (1,431 ) (1,087 ) (1,744 ) (3,952 ) (4,926 )
Realized losses on cross-currency swaps termination     (42,271 )   (42,271 )
Realized gains on repurchase of NOK bonds     42,271     42,271  
Unrealized (losses) gains on cross currency swaps (23,759 ) (139 ) 43,966   (25,818 ) 49,734  
Unrealized gains (losses) on revaluation of NOK bonds 22,167   (3,901 ) (41,549 ) 17,687   (44,184 )

(7) Other (expense) income for the three and nine months ended September 30, 2019 included $1.4 million loss recognized relating to the Torben Spirit sale-leaseback refinancing completed in September 2019. In addition, other (expense) income for the nine months ended September 30, 2019 included a $53.0 million expense for the recognition of an additional tax indemnification guarantee liability recorded within the consolidated Teekay Nakilat Corporation (the RasGas II Joint Venture), which was settled in 2018.


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

  As at September 30, As at June 30, As at December 31,
  2019 2019 2018
  (unaudited) (unaudited) (unaudited)
ASSETS      
Current      
Cash and cash equivalents 142,860   124,880   149,014  
Restricted cash – current 58,109   48,869   38,329  
Accounts receivable 14,649   25,439   20,795  
Prepaid expenses 9,383   8,087   8,076  
Current portion of derivative assets 464     835  
Current portion of net investments in direct financing leases 13,365   13,082   12,635  
Current portion of advances to equity-accounted joint ventures 79,108   79,108   79,108  
Advances to affiliates 17,471   22,831   8,229  
Vessel held for sale 11,515   12,300    
Other current assets 238   238   2,306  
Total current assets 347,162   334,834   319,327  
       
Restricted cash – long-term 33,562   31,439   35,521  
       
Vessels and equipment      
At cost, less accumulated depreciation 1,604,581   1,616,029   1,657,338  
Operating lease right-of-use asset 37,431   40,666    
Vessels related to finance leases, at cost, less accumulated depreciation 1,698,545   1,704,908   1,585,243  
Advances on newbuilding contracts     86,942  
Total vessels and equipment 3,340,557   3,361,603   3,329,523  
Investments in and advances to equity-accounted joint ventures 1,017,994   994,880   1,037,025  
Net investments in direct financing leases 548,072   551,603   562,528  
Other assets 11,960   12,204   11,432  
Derivative assets 301     2,362  
Intangible assets – net 45,580   47,794   52,222  
Goodwill 34,841   34,841   34,841  
Total assets 5,380,029   5,369,198   5,384,781  
       
       
LIABILITIES AND EQUITY      
Current      
Accounts payable 2,426   1,169   3,830  
Accrued liabilities 78,701   72,241   74,753  
Unearned revenue 25,732   24,573   30,108  
Current portion of long-term debt 390,569   402,513   135,901  
Current obligations related to finance leases 69,661   65,525   81,219  
Current portion of operating lease liabilities 13,252   13,098    
Current portion of derivative liabilities 37,523   27,805   11,604  
Advances from affiliates 8,861   15,655   14,731  
Total current liabilities 626,725   622,579   352,146  
Long-term debt 1,437,282   1,465,155   1,833,875  
Long-term obligations related to finance leases 1,358,485   1,334,271   1,217,337  
Long-term operating lease liabilities 24,179   27,568    
Other long-term liabilities 46,180   46,171   43,788  
Derivative liabilities 72,466   54,767   55,038  
Total liabilities 3,565,317   3,550,511   3,502,184  
Equity      
Limited partners – common units 1,497,544   1,485,516   1,496,107  
Limited partners – preferred units 285,159   285,159   285,159  
General partner 49,303   49,056   49,271  
Accumulated other comprehensive (loss) income (71,757 ) (53,232 ) 2,717  
Partners' equity 1,760,249   1,766,499   1,833,254  
Non-controlling interest 54,463   52,188   49,343  
Total equity 1,814,712   1,818,687   1,882,597  
Total liabilities and total equity 5,380,029   5,369,198   5,384,781  


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

  Nine Months Ended
  September 30, September 30,
  2019 2018
  (unaudited) (unaudited)
Cash, cash equivalents and restricted cash provided by (used for)    
OPERATING ACTIVITIES    
Net income 93,528   17,630  
Non-cash items:    
  Unrealized loss (gain) on non-designated derivative instruments 10,315   (38,201 )
  Depreciation and amortization 103,712   91,299  
  Write-down of vessels 785   53,863  
  Unrealized foreign currency exchange gain including the effect of the termination of cross currency swaps (1,213 ) (12,313 )
  Equity income, net of dividends received of $25,374 (2018 - $11,583) (3,238 ) (41,014 )
  Ineffective portion on qualifying cash flow hedging instruments included in interest expense   (740 )
  Amortization of deferred financing issuance costs included in interest expense 6,722   4,620  
  Other non-cash items 6,173   (9,881 )
Change in non-cash operating assets and liabilities (15,227 ) 3,422  
Receipts from direct financing leases 9,242    
Expenditures for dry docking (8,836 ) (10,458 )
Net operating cash flow 201,963   58,227  
FINANCING ACTIVITIES    
Proceeds from issuance of long-term debt 158,924   685,547  
Scheduled repayments of long-term debt (95,730 ) (173,488 )
Prepayments of long-term debt (183,787 ) (440,820 )
Financing issuance costs (989 ) (8,534 )
Proceeds from financing related to sales and leaseback of vessels 317,806   370,050  
Scheduled repayments of obligations related to finance leases (54,484 ) (45,281 )
Prepayment of obligations related to finance leases (111,617 )  
Repurchase of common units (25,729 )  
Cash distributions paid (60,926 ) (52,535 )
Dividends paid to non-controlling interest (90 ) (1,290 )
Net financing cash flow (56,622 ) 333,649  
INVESTING ACTIVITIES    
Expenditures for vessels and equipment (91,503 ) (559,172 )
Capital contributions and advances to equity-accounted joint ventures (42,171 ) (33,496 )
Return of capital and repayment of advances from equity-accounted joint ventures   5,000  
Proceeds from sale of equity-accounted joint venture   54,438  
Receipts from direct financing leases   8,361  
Net investing cash flow (133,674 ) (524,869 )
     
Increase (decrease) in cash, cash equivalents and restricted cash 11,667   (132,993 )
Cash, cash equivalents and restricted cash, beginning of the period 222,864   339,435  
Cash, cash equivalents and restricted cash, end of the period 234,531   206,442  


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
September 30,
2019 2018
(unaudited) (unaudited)
Net income – GAAP basis 50,351   29,507  
Less: Net income attributable to non-controlling interests (2,983 ) (3,557 )
Net income attributable to the partners and preferred unitholders 47,368   25,950  
Add (subtract) specific items affecting net income:    
Write-down of vessels(1) 785   2,201  
Restructuring charges(2)   449  
Unrealized foreign currency exchange gains(3) (4,607 ) (3,019 )
Unrealized losses (gains) on non-designated and designated derivative instruments and other items from equity-accounted investees(4) 5,073   (2,904 )
Unrealized losses (gains) on non-designated derivative instruments(5) 649   (17,569 )
Realized loss on interest rate swap termination   13,681  
Other items 1,417   396  
Non-controlling interests’ share of items above(6) (171 ) 289  
Total adjustments 3,146   (6,476 )
Adjusted net income attributable to the partners and preferred unitholders 50,514   19,474  
     
Preferred unitholders' interest in adjusted net income 6,426   6,425  
General partner's interest in adjusted net income 882   261  
Limited partners’ interest in adjusted net income 43,206   12,788  
Limited partners’ interest in adjusted net income per common unit, basic 0.55   0.16  
Weighted-average number of common units outstanding, basic 78,012,514   79,687,499  

(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 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. 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) 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 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
September 30,
2019 2018
(unaudited) (unaudited)
       
Net income: 50,351   29,507  
Add:    
Depreciation and amortization 34,248   32,238  
Partnership’s share of equity-accounted joint ventures' DCF net of estimated maintenance capital expenditures(1) 34,319   19,599  
Direct finance lease payments received in excess of revenue recognized and other adjustments 4,071   2,823  
Distributions relating to equity financing of newbuildings 1,012   2,340  
Deferred income tax and other non-cash items 801   3,011  
Write-down of vessels 785   2,201  
Unrealized losses (gains) on non-designated derivative instruments 649   (17,569 )
Realized loss on interest rate swap termination   13,681  
Less:    
Unrealized foreign currency exchange gains (4,607 ) (3,019 )
Distributions relating to preferred units (6,426 ) (6,425 )
Estimated maintenance capital expenditures (17,562 ) (16,140 )
Equity income (21,296 ) (14,679 )
Distributable Cash Flow before non-controlling interest 76,345   47,568  
Non-controlling interests’ share of DCF before estimated maintenance capital expenditures (5,420 ) (6,354 )
Distributable Cash Flow 70,925   41,214  
Amount of cash distributions attributable to the General Partner (301 ) (228 )
Limited partners' Distributable Cash Flow 70,624   40,986  
Weighted-average number of common units outstanding, basic 78,012,514   79,687,499  
Distributable Cash Flow per limited partner common unit 0.91   0.51  

(1) The estimated maintenance capital expenditures relating to the Partnership’s share of equity-accounted joint ventures were $11.8 million and $9.6 million for the three months ended September 30, 2019 and 2018, respectively.


Teekay LNG Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted EBITDA
(in thousands of U.S. Dollars)

  Three Months Ended
September 30,
2019 2018
(unaudited) (unaudited)
Net income 50,351   29,507  
Depreciation and amortization 34,248   32,238  
Interest expense, net of interest income 39,549   34,895  
Income tax expense 1,442   1,549  
EBITDA 125,590   98,189  
     
Add (subtract) specific income statement items affecting EBITDA:    
Foreign currency exchange gain (2,879 ) (1,445 )
Other expense (income) – net 1,174   (314 )
Equity income (21,296 ) (14,679 )
Realized and unrealized loss (gain) on derivative instruments 3,270   (2,515 )
Write-down of vessels 785   2,201  
Direct finance lease payments received in excess of revenue recognized and other adjustments 4,071   2,823  
Amortization of in-process contracts included in voyage revenues   (1,197 )
Realized gain on Toledo Spirit derivative contract   1,689  
Consolidated adjusted EBITDA 110,715   84,752  
Adjusted EBITDA from equity-accounted vessels (See Appendix E) 69,501   47,841  
Total Adjusted EBITDA 180,216   132,593  


Teekay LNG Partners L.P.
Appendix D - Reconciliation of Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment
(in thousands of U.S. Dollars)

  Three Months Ended September 30, 2019
  (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum Gas
Segment
Conventional
Tanker
Segment
Total
Voyage revenues 137,212   10,846   1,597   149,655  
Voyage recoveries (expenses) 286   (4,778 ) (469 ) (4,961 )
Vessel operating expenses (21,890 ) (4,804 ) (627 ) (27,321 )
Time-charter hire expense (5,336 )     (5,336 )
Depreciation and amortization (32,249 ) (1,991 ) (8 ) (34,248 )
General and administrative expenses (4,787 ) (397 ) (209 ) (5,393 )
Write-down of vessels     (785 ) (785 )
Income (loss) from vessel operations 73,236   (1,124 ) (501 ) 71,611  
Depreciation and amortization 32,249   1,991   8   34,248  
Write-down of vessels     785   785  
Direct finance lease payments received in excess of revenue recognized and other adjustments 4,071       4,071  
Consolidated Adjusted EBITDA 109,556   867   292   110,715  
         
  Three Months Ended September 30, 2018
  (unaudited)
  Liquefied
Natural Gas
Segment
Liquefied
Petroleum Gas
Segment
Conventional
Tanker
Segment
Total
Voyage revenues 111,909   6,279   5,148   123,336  
Voyage expenses (734 ) (4,997 ) (2,225 ) (7,956 )
Vessel operating expenses (17,912 ) (4,393 ) (3,716 ) (26,021 )
Time-charter hire expense (1,690 )     (1,690 )
Depreciation and amortization (29,342 ) (1,967 ) (929 ) (32,238 )
General and administrative expenses (5,418 ) (154 ) (211 ) (5,783 )
Write-down of vessels     (2,201 ) (2,201 )
Restructuring charges     (449 ) (449 )
Income (loss) from vessel operations 56,813   (5,232 ) (4,583 ) 46,998  
Depreciation and amortization 29,342   1,967   929   32,238  
Write-down of vessels     2,201   2,201  
Amortization of in-process contracts included in voyage revenues (1,089 )   (108 ) (1,197 )
Direct finance lease payments received in excess of revenue recognized and other adjustments 2,823       2,823  
Realized gain on Toledo Spirit derivative contract     1,689   1,689  
Consolidated Adjusted EBITDA 87,889   (3,265 ) 128   84,752  


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

  Three Months Ended
  September 30, 2019 September 30, 2018
  (unaudited) (unaudited)
  At Partnership's At Partnership's
100%   Portion(1) 100%   Portion(1)
Voyage revenues 205,727   90,479   159,337   68,693  
Voyage expenses (1,858 ) (928 ) (3,143 ) (1,572 )
Vessel operating expenses, time-charter hire expense and general and administrative expenses (57,786 ) (25,564 ) (50,914 ) (22,626 )
Depreciation and amortization (28,891 ) (13,962 ) (25,839 ) (12,860 )
Income from vessel operations of equity-accounted vessels 117,192   50,025   79,441   31,635  
Net interest expense (56,628 ) (23,221 ) (42,993 ) (18,023 )
Income tax expense (32 ) (16 ) (174 ) (78 )
Other items including realized and unrealized (losses) gains on derivative instruments (18,270 ) (5,492 ) 4,122   1,145  
Net income  / equity income of equity-accounted vessels 42,262   21,296   40,396   14,679  
Net income / equity income of equity-accounted LNG vessels 40,032   20,262   42,782   15,953  
Net income (loss) / equity income (loss) of equity-accounted LPG vessels 2,230   1,034   (2,386 ) (1,274 )
         
Net income / equity income of equity-accounted vessels 42,262   21,296   40,396   14,679  
Depreciation and amortization 28,891   13,962   25,839   12,860  
Net interest expense 56,628   23,221   42,993   18,023  
Income tax expense 32   16   174   78  
EBITDA from equity-accounted vessels 127,813   58,495   109,402   45,640  
         
Add (subtract) specific income statement items affecting EBITDA:        
Other items including realized and unrealized losses (gains) on derivative instruments 18,270   5,492   (4,122 ) (1,145 )
Direct finance lease payments received in excess of revenue recognized 17,701   6,470   11,711   4,310  
Amortization of in-process contracts (1,758 ) (956 ) (1,800 ) (964 )
Adjusted EBITDA from equity-accounted vessels 162,026   69,501   115,191   47,841  
Adjusted EBITDA from equity-accounted LNG vessels 142,311   59,646   100,270   40,381  
Adjusted EBITDA from equity-accounted LPG vessels 19,715   9,855   14,921   7,460  

(1) The Partnership's equity-accounted vessels for the three months ended September 30, 2019 and 2018 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 33 percent ownership interest in four LNG carriers servicing the Angola LNG project; the Partnership’s 52 percent ownership interest in the Malt 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; the Partnership’s ownership interest ranging from 20 to 30 percent in four LNG carriers as at September 30, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at September 30, 2018; the Partnership’s 50 percent ownership interest in four ARC7 LNG carriers and two ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at September 30, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at September 30, 2018; 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 September 30, 2019 As at December 31, 2018
  (unaudited) (unaudited)
  At Partnership's At Partnership's
100%   Portion(1) 100%   Portion(1)
Cash and restricted cash, current and non-current 503,438   210,985   388,820   164,247  
Other current assets 61,721   27,099   91,264   33,354  
Vessels and equipment, including vessels related to finance leases and operating lease right-of-use assets 2,307,530   1,133,961   2,327,971   1,141,364  
Advances on newbuilding contracts 1,088,690   390,599   1,321,284   494,486  
Net investments in sales-type and direct financing leases, current and non-current 3,938,387   1,526,559   3,089,375   1,163,980  
Other non-current assets 51,537   40,599   61,285   41,667  
Total assets 7,951,303   3,329,802   7,279,999   3,039,098  
         
Current portion of long-term debt and obligations related to finance leases and operating leases 291,321   125,860   284,150   125,984  
Current portion of derivative liabilities 29,038   10,942   12,695   4,420  
Other current liabilities 151,207   65,755   127,266   53,874  
Long-term debt and obligations related to finance leases and operating leases 4,753,816   1,909,508   4,202,745   1,680,986  
Shareholders' loans, current and non-current 368,089   131,497   367,475   131,386  
Derivative liabilities 213,858   87,470   61,814   23,149  
Other long-term liabilities 65,838   33,165   67,793   34,552  
Equity 2,078,136   965,605   2,156,061   984,747  
Total liabilities and equity 7,951,303   3,329,802   7,279,999   3,039,098  
         
Investments in equity-accounted joint ventures   965,605     984,747  
Advances to equity-accounted joint ventures   131,497     131,386  
Investments in and advances to equity-accounted joint ventures, current and non-current portions   1,097,102     1,116,133  

(1) The Partnership's equity-accounted vessels as at September 30, 2019 and December 31, 2018 include: the Partnership’s 40 percent ownership interest in Teekay Nakilat (III) Corporation, which owns four LNG carriers; the Partnership’s 49 percent ownership interests in the Excalibur Joint Venture, which owns one LNG carrier; 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 Malt 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; the Partnership’s ownership interest ranging from 20 percent to 30 percent in four LNG carriers as at September 30, 2019 for Shell, compared to three LNG carriers and one LNG carrier newbuilding as at December 31, 2018; the Partnership’s 50 percent ownership interest in four ARC7 LNG carriers and two ARC7 LNG carrier newbuildings in the Yamal LNG Joint Venture as at September 30, 2019, compared to two ARC7 LNG carriers and four ARC7 LNG carrier newbuildings as at December 31, 2018; 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: the timing of newbuilding vessel deliveries and completion of the Bahrain regasification terminal; the effects of future newbuilding deliveries and the completion of the Bahrain regasification terminal on the Partnership's Total Adjusted EBITDA and earnings; expectations regarding the Partnership's 2019 and 2020 financial results; anticipated higher utilization and revenues, and fewer drydocks; expectations on capital allocation towards balance sheet delevering and future returns of capital to unitholders; and the ability to pay increased distributions on common units in 2020 and beyond. 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; deliveries of vessels under charter contracts and the commencement thereof; 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 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; general market conditions and trends, including spot, multi-month and multi-year charter rates; inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels; the Partnership’s or the Partnership’s joint ventures’ ability to secure or draw on financings for its vessels; potential lack of cash flow to reduce balance sheet leverage or of excess capital available to allocate towards returning capital to unitholders; 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, 2018. 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.