HAMILTON, Bermuda, Aug. 24, 2017 /PRNewswire/ -- Höegh LNG
Partners LP (NYSE: HMLP) (the "Partnership") today reported its
financial results for the quarter ended June
30, 2017.
Highlights
- Reported total time charter revenues of $35.0 million for the second quarter of 2017
compared to $22.8 million of time
charter revenues for the second quarter of 2016
- Generated operating income of $23.1
million, net income of $12.2
million and partners' interest in net income of $9.4 million for the second quarter of 2017
compared to operating income of $11.3
million, net income of $4.1
million and partners' interest in net income of $4.1 million for the second quarter of 2016;
operating income, net income and partners' interest in net income
were impacted by unrealized gains and losses on derivative
instruments mainly on the Partnership's share of equity in earnings
(losses) of joint ventures in the second quarter of 2017 and
2016
- Excluding the impact of the unrealized losses on derivatives
for the three months ended June 30,
2017 and 2016 affecting the equity in earnings (losses) of
joint ventures, operating income for the three months ended
June 30, 2017 would have been
$23.9 million, an increase of
$8.4 million from $15.5 million for the three months ended
June 30, 2016
- Generated Segment EBITDA1 of $29.6 million for the second quarter of 2017
compared to $24.3 million for the
second quarter of 2016
- On August 14, 2017, paid a
$0.43 per unit distribution with
respect to the second quarter of 2017, equivalent to $1.72 per unit on an annualized basis
- On August 24, 2017, the
Partnership announced its subsidiary had entered into a term-sheet
to acquire an additional 23.5% interest in each of the joint
ventures owning the FSRUs Neptune and GDF Suez Cape
Ann and 23.5% of the related outstanding shareholder
loans.
Richard Tyrrell, Chief Executive
Officer and Chief Financial Officer stated: "In the second
quarter, our strong operational performance enabled us to generate
positive financial results while we carried out the planned
maintenance on the Höegh Gallant. Our long-term, fixed rate
contracts continued to deliver strong cash flows and to support the
Partnership's distribution to our unitholders.
Additionally, I am delighted to announce the entry into a
term-sheet with MOL for the acquisition of a further 23.5% of the
joint venture companies that own the FSRUs Neptune and GDF Suez
Cape Ann. The FSRUs have a minimum of 12 and 13 years remaining on
their contracts, respectively. As with the recently announced
strategic alliance between Höegh LNG and Qatar's Nakilat, the Partnership's proposed
transaction with MOL demonstrates the ability of the Partnership
and Höegh LNG to pursue diverse, value-generating FSRU
opportunities to supplement our robust core pipeline."
Financial Results Overview
As of January 1, 2017, the
Partnership began consolidating Höegh LNG Colombia Holding Ltd.,
the owner of the entities that own and operate the Höegh
Grace (the "Höegh Grace entities") as a result of the
acquisition of a 51% interest in the Höegh Grace entities.
The revenues, expenses and net income in the consolidated income
statement include 100% of the results of the Höegh Grace
entities. This is reduced by the non-controlling interest in net
income to arrive at the partners' interest in net income which
reflects the Partnership's 51% interest in the net income of the
Höegh Grace entities. Similarly, all of the assets and
liabilities on the consolidated balance sheet include 100% of the
Höegh Grace entities' assets and liabilities. Total equity
is split between partners' capital (which includes the
Partnership's 51% interest in the net assets of the Höegh
Grace entities) and the non-controlling interest. Management
monitors the results of operations of the Höegh Grace
entities based on the Partnership's 51% interest in the Segment
EBITDA of such entities and, therefore, subtracts the
non-controlling interest in Segment EBITDA to present Segment
EBITDA.
1 Segment EBITDA is a non-GAAP financial measure used
by investors to measure financial and operating performance. Please
see Appendix A for a reconciliation of Segment EBITDA to net
income, the most directly comparable GAAP financial measure.
Segment EBITDA does not include adjustments for (i) principal
payment of direct financing lease of $0.9
million and $0.8 million for
the three months ended June 30, 2017
and 2016, respectively, (ii) amortization in revenues for above
market contracts of $0.9 million and
$0.6 million for the three months
ended June 30, 2017 and 2016,
respectively, (iii) non-controlling interest: amortization in
revenues for above market contracts of $0.2
million for the three months ended June 30, 2017, (iv) equity in earnings of JVs:
amortization for deferred revenue of $(0.6)
million and $(0.5) million for
the three months ended June 30, 2017
and 2016, respectively, (v) non-cash revenue: tax paid directly by
charterer of $(0.4) million for the
three months ended June 30, 2017, or
(vi) non-controlling interest: non-cash revenue of $0.2 million for the three months ended
June 30, 2017.
The Partnership reported net income for the three months ended
June 30, 2017 of $12.2 million, an increase of $8.1 million from net income of $4.1 million for the three months ended
June 30, 2016. The net income for
both periods was impacted by unrealized gains and losses on
derivative instruments mainly on the Partnership's share of equity
in earnings (losses) of joint ventures.
Excluding all of the unrealized gains and losses on derivative
instruments, partners' interest in net income for the three months
ended June 30, 2017 would have been
$10.0 million, an increase of
$2.1 million from $7.9 million for the three months ended
June 30, 2016. The increase for the
three months ended June 30, 2017 was
primarily due to the inclusion of the results of the Höegh
Grace consolidated on January 1,
2017.
The partners' interest in net income, which includes the
Partnership's 51% interest in the Höegh Grace entities, was
$9.4 million for the three months
ended June 30, 2017, an increase of
$5.3 million from net income of
$4.1 million for the three months
ended June 30, 2016. Non-controlling
interest in net income of $2.8
million was attributable to non-controlling interest for the
49% interest in the Höegh Grace entities not owned by the
Partnership.
The PGN FSRU Lampung and the Höegh Grace were
on-hire for the entire second quarter of 2017. The Höegh
Gallant had 8 days off-hire due to scheduled maintenance in the
second quarter of 2017 compared with 15 days off-hire for scheduled
maintenance in the first quarter of 2016.
Equity in earnings of joint ventures was $1.6 million for the three months ended
June 30, 2017, an increase of
$3.5 million from equity in losses of
$1.9 million for the three months
ended June 30, 2016. The joint
ventures own the Neptune and the GDF Suez Cape Ann.
The increased earnings were mainly due to an unrealized loss of
$0.8 million on derivative
instruments in the Partnership's share of the joint ventures for
the three months ended June 30, 2017,
compared to an unrealized loss on derivative instruments of
$4.2 million for three months ended
June 30, 2016. The joint ventures do
not apply hedge accounting for interest rate swaps and all changes
in fair value are included in equity in earnings (losses) of joint
ventures. For the three months ended June
30, 2017, the Partnership's share of operating income in the
joint ventures was $5.8 million
compared to $6.1 million for the
three months ended June 30, 2016. The
reduction was due in part to lower revenue as a result of lower
recovery of cost incurred related to the operations of the
Neptune in Turkey.
Operating income for the three months ended June 30, 2017 was $23.1
million, an increase of $11.8
million from operating income of $11.3 million for the three months ended
June 30, 2016. Excluding the impact
of the unrealized losses on derivative instruments on the equity in
earnings (losses) of joint ventures, operating income for the three
months ended June 30, 2017 would have
been $23.9 million, an increase of
$8.4 million from $15.5 million for the three months ended
June 30, 2016. The increase for the
three months ended June 30, 2017 was
primarily due to the inclusion of the results of the Höegh
Grace as a result of the acquisition in January 2017.
Segment EBITDA2 was $29.6
million for the three months ended June 30, 2017, an increase of $5.3 million from $24.3
million for the three months ended June 30, 2016.
Financing and Liquidity
As of June 30, 2017, the
Partnership had cash and cash equivalents of $15.5 million and an undrawn portion of the
$85 million revolving credit facility
of $64.7 million. Current restricted
cash for operating obligations of the PGN FSRU Lampung was
$11.9 million and long-term
restricted cash required under the Lampung facility was
$14.1 million as of June 30, 2017. During the second quarter of 2017,
the Partnership made quarterly repayments of $4.8 million on the Lampung facility,
$3.3 million on the Gallant facility
and $3.3 million on the Grace
facility.
2 Segment EBITDA is a non-GAAP financial measure used
by investors to measure financial and operating performance. Please
see Appendix A for a reconciliation of Segment EBITDA to net
income, the most directly comparable GAAP financial measure.
Segment EBITDA does not include adjustments for (i) principal
payment of direct financing lease of $0.9
million and $0.8 million for
the three months ended June 30, 2017
and 2016, respectively, (ii) amortization in revenues for above
market contracts of $0.9 million and
$0.6 million for the three months
ended June 30, 2017 and 2016,
respectively, (iii) non-controlling interest: amortization in
revenues for above market contracts of $0.2
million for the three months ended June 30, 2017, (iv) equity in earnings of JVs:
amortization for deferred revenue of $(0.6)
million and $(0.5) million for
the three months ended June 30, 2017
and 2016, respectively, (v) non-cash revenue: tax paid directly by
charterer of $(0.4) million for the
three months ended June 30, 2017, or
(vi) non-controlling interest: non-cash revenue of $0.2 million for the three months ended
June 30, 2017.
The Partnership's book value and outstanding principal of total
long-term debt including the was $557.3
million and $563.1 million,
respectively, as of June 30, 2017,
including long-term debt financing our FSRUs, and the revolving
credit facility and seller's credit note due to owners and
affiliates. The long-term debt financing our FSRUs is repayable in
quarterly installments of $11.4
million. This includes 100% of the long-term debt of the
Höegh Grace entities which are consolidated. As of
June 30, 2017, the Partnership's
total current liabilities exceeded total current assets by
$22.5 million. This is partly a
result of mark-to-market valuations of its interest rate swaps
(derivative instruments) of $3.8
million and the current portion of long-term debt of
$45.5 million being classified
current while the restricted cash of $14.1
million associated with the Lampung facility is classified
as long-term. The Partnership does not plan to terminate the
interest rate swaps before their maturity and, as a result, the
Partnership will not realize these liabilities. Further, the
current portion of long-term debt reflects principal payments for
the next twelve months which will be funded, for the most part, by
future cash flows from operations. The Partnership does not intend
to maintain a cash balance to fund the next twelve months' net
liabilities. The Partnership believes its current resources,
including the undrawn balance under the revolving credit facility,
are sufficient to meet the Partnership's working capital
requirements for its current business for the next twelve
months.
As of June 30, 2017, the
Partnership had outstanding interest rate swap agreements for a
total notional amount of $434.8
million to hedge against the interest rate risks of its
long-term debt under the Lampung, Gallant and Grace facilities. The
Partnership applies hedge accounting for derivative instruments
related to those facilities. The Partnership receives interest
based on three month US dollar LIBOR and pays a fixed rate of 2.8%,
1.9% and 2.3% for the Lampung, Gallant and Grace facilities,
respectively. The carrying value of the liability for derivative
instruments was $8.7 million as of
June 30, 2017. The effective portion
of the changes in fair value of the interest rate swaps are
recorded in other comprehensive income. Gain on derivative
instruments for the three months ended June
30, 2017 was $0.2 million, a
decrease of $0.1 million from
$0.3 million for the three months
ended June 30, 2016. Gain on
derivative instruments for the three months ended June 30, 2017 related to the interest rate swaps
for the Lampung, Gallant and Grace facilities, while the gain for
the three months ended June 30, 2016
related to the interest rate swaps for the Lampung and Gallant
facilities.
The Partnership's share of the joint ventures is accounted for
using the equity method. As a result, the Partnership's share of
the joint ventures' cash, restricted cash, outstanding debt,
interest rate swaps and other balance sheet items are reflected net
on the line "accumulated losses in joint ventures" on the
consolidated balance sheet and are not included in the balance
sheet figures disclosed above.
In August 2017, the Partnership
drew $4.0 million on the revolving
credit facility.
On August 14, 2017, the
Partnership paid a cash distribution of $0.43 per unit with respect to the second quarter
of 2017, equivalent to $1.72 per unit
on an annualized basis. The total amount of the distribution was
$14.4 million.
The Partnership filed claims for $0.2
million in the third quarter of 2017 for indemnification of
the additional warranty cost for the Mooring for the three months
ended June 30, 2017. In the third
quarter of 2017, the Partnership was paid $1.1 million for warranty costs incurred as of
June 30, 2017 based on claims filed
for the second quarter of 2017 and earlier periods.
As discussed in the Outlook section below, the Partnership
announced on August 24, 2017 its
subsidiary had entered into a term-sheet to acquire an additional
23.5% interest in each of the joint ventures owning the
Neptune and the GDF Suez Cape Ann and 23.5% of the
related outstanding shareholder loans. The Partnership expects that
it will finance the acquisition through raising equity, incurring
debt or a combination of the two.
Outlook
In the fourth quarter of 2017, the Höegh Gallant has 7 days of
scheduled maintenance and will be offhire.
The Partnership's wholly owned subsidiary, Höegh LNG Partners
Operating LLC, has entered into a term-sheet to acquire from
Mitsui O.S.K. Lines, Ltd. ("MOL")
23.5% of the shares of each of SRV Joint Gas Ltd. and SRV Joint Gas
Two Ltd. (the "joint ventures") as well as 23.5% of the outstanding
related shareholder loans from MOL aggregating $1.5 million (the "Acquisition"). Closing of the
Acquisition is subject to the execution of a definitive purchase
agreement as well as certain other documentation and final board
approvals. The Partnership expects the Acquisition to close by
September 30, 2017. The purchase
price of the Acquisition is $27.3
million including the 23.5% of outstanding shareholder loans
from MOL. The Partnership currently owns 50% of each joint venture.
Following the transaction, MOL will continue to hold 25% of each
joint venture. The Partnership has completed a preliminary
assessment of the accounting to be applied that following the
transaction. Based on this assessment, it expects to continue to
account for the joint ventures using the equity method.
Pursuant to the contribution, purchase and sale agreement the
Partnership entered into with Höegh LNG with respect to the
acquisition of 51% of the ownership interests in the Höegh
Grace entities, the Partnership has a right of first offer to
purchase the remaining 49% interest.
Pursuant to the omnibus agreement that the Partnership entered
into with Höegh LNG at the time of the initial public offering,
Höegh LNG is obligated to offer to the Partnership any floating
storage and regasification unit ("FSRU") or LNG carrier operating
under a charter of five or more years.
The Partnership has, or may in the future have, the opportunity
to acquire the FSRUs listed below:
- On May 26, 2015, Höegh LNG signed
a contract with Penco LNG to provide an FSRU to service the
Penco-Lirquén LNG import terminal to be located in Concepción Bay,
Chile. The contract is for a
period of 20 years and is subject to Penco LNG's completing
financing and obtaining necessary environmental approvals. In
February 2017, Penco LNG informed
Höegh LNG that the environmental approval had been temporarily
halted by the legal system in Chile which is expected to delay permitting
and completion of the infrastructure and the commencement of the
FSRU contract.
- On December 1, 2016, Höegh LNG
signed an FSRU contract with Quantum Power Ghana Gas Limited
("Quantum Power") for the Tema LNG import terminal located close to
Accra in Ghana ("Tema LNG Project"). The contract is
for a period of 20 years with a five year extension option for the
charterer. The contract is subject to Quantum Power obtaining final
governmental approval, financing and both parties' board approval.
A positive award of the final government approval will lead to a
final investment decision for the infrastructure construction. The
infrastructure construction for the project is also required to be
completed prior to the delivery of the FSRU. Höegh LNG is expected
to service the contract with the Höegh Giant (HHI Hull
No. 2552) which was delivered from the shipyard on April 27, 2017.
- On December 15, 2016, Höegh LNG
signed an FSRU contract with Global Energy Infrastructure Limited
("GEI") for GEI's LNG import project in Port Qasim near
Karachi, Pakistan. Time charter is
for a period of 20 years with two five year extension options. GEI
has a long-term LNG supply agreement with Qatargas and a consortium
agreement that also includes Qatar Petroleum, ExxonMobil,
Mitsubishi, Total and Höegh LNG, who will provide the
infrastructure for the project subject to the final investment
decision. The contract is subject to certain conditions and both
parties' board approval. The anticipated start of the FSRU contract
is in the second half of 2018.
- On July 18, 2017, Höegh LNG
signed a memorandum of understanding with Qatar Gas Transport
Company Ltd., known as Nakilat, with the aim of jointly developing
new FSRU projects, where the LNG is sourced from Qatar. The structure is expected to be joint
ventures to own and operate FSRUs for the joint projects.
Höegh LNG has three FSRUs on order. Pursuant to the terms of the
omnibus agreement, the Partnership will have the right to purchase
HHI Hull No. 2865, and HHI Hull No. 2909 and SHI
Hull No.2220 (under a shipbuilding contract with Samsung
Heavy Industries ("SHI")) following acceptance by the respective
charterer of the related FSRU, subject to reaching an agreement
with Höegh LNG regarding the purchase price.
There can be no assurance that the Partnership will purchase any
of these additional FSRUs.
Depending on the ultimate timing of the start of projects,
allocations of the hulls to projects is subject to change.
Finally, although the Partnership's option to purchase Höegh
LNG's interests in the FSRU Independence pursuant to the
omnibus agreement has expired, the Partnership expects that Höegh
LNG would offer the opportunity to purchase such interests in the
event it receives the consent of the charterer of the
Independence, AB Klapipedòs Nafta ("ABKN"). On December 5, 2014, the Independence began
operating under its time charter with ABKN. The Partnership and
Höegh LNG continue to pursue, but have not received ABKN's consent
to the acquisition of the Independence by the Partnership.
The Independence is located in the port of Klaipeda and
provides Lithuania with the
ability to diversify its gas supply by giving it access to the
world market for LNG. The Independence is moored adjacent to
a purpose-built jetty connected to a pipeline connecting to the
existing grid in Lithuania.
There can be no assurance that the Partnership will acquire the
23.5% interest in the joint ventures that own the Neptune
and the GDF Suez Cape Ann from MOL. There can be no
assurance that the Partnership will acquire the remaining 49%
interest in the Höegh Grace entities or any vessels from
Höegh LNG or of the terms upon which any such acquisition may be
made.
Presentation of Second Quarter 2017 Results
A presentation will be held today, Thursday, August 24, 2017, at 8:30 A.M.
(EDT) to discuss financial results
for the second quarter of 2017. The results and presentation
material will be available for download at
http://www.hoeghlngpartners.com.
The presentation will be immediately followed by a Q&A
session. Participants will be able to join this presentation using
the following details:
a. Webcast
https://www.webcaster4.com/Webcast/Page/942/22367
b. Teleconference
International
call:
|
+1-412-542-4123
|
US Toll Free
call:
|
+1-855-239-1375
|
Canada Toll Free
call:
|
+1-855-669-9657
|
Participants should ask to be joined into the Höegh LNG Partners
LP call.
There will be a Q&A session after the presentation.
Information on how to ask questions will be given at the beginning
of the Q&A session.
For those unable to participate in the conference call, a replay
will be available from one hour after the end of the conference
call until August 31, 2017.
The replay dial-in numbers are as follows:
International
call:
|
+1-412-317-0088
|
US Toll Free
call:
|
+1-877-344-7529
|
Canada Toll Free
call:
|
+1-855-669-9658
|
Replay
passcode:
|
10111676
|
Financial Results on Form 6-K
The Partnership has filed a Form 6-K with detailed information
on the Partnership's results of operations for the three months
ended June 30, 2017 with the SEC that
contains "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and unaudited condensed
interim consolidated and combined financial statements. The Form
6-K can be viewed on the SEC's website: http://www.sec.gov and
at HMLP's website: http://www.hoeghlngpartners.com
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements
concerning future events and the Partnership's operations,
performance and financial condition. Forward-looking statements
include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or
achievements, and may contain the words "believe," "anticipate,"
"expect," "estimate," "project," "future," "will be," "will
continue," "will likely result," "plan," "intend" or words or
phrases of similar meanings. These statements involve known and
unknown risks and are based upon a number of assumptions and
estimates that are inherently subject to significant uncertainties
and contingencies, many of which are beyond the Partnership's
control. Actual results may differ materially from those expressed
or implied by such forward-looking statements. Important factors
that could cause actual results to differ materially include, but
are not limited to:
- FSRU and LNG carrier market trends, including hire rates and
factors affecting supply and demand;
- the Partnership's anticipated growth strategies;
- the Partnership's anticipated receipt of dividends and
repayment of indebtedness from joint ventures;
- the effects of volatility in global prices for crude oil and
natural gas;
- the effect of the worldwide economic environment;
- turmoil in the global financial markets;
- fluctuations in currencies and interest rates;
- general market conditions, including fluctuations in hire rates
and vessel values;
- changes in the Partnership's operating expenses, including
drydocking and insurance costs;
- the Partnership's ability to make or increase cash
distributions on its units and the amount of any such
distributions;
- the Partnership's ability to comply with financing agreements
and the expected effect of restrictions and covenants in such
agreements;
- the future financial condition of the Partnership's existing or
future customers;
- the Partnership's ability to make additional borrowings and to
access public equity and debt capital markets;
- planned capital expenditures and availability of capital
resources to fund capital expenditures;
- the exercise of purchase options by customers;
- the Partnership's ability to maintain long-term relationships
with customers;
- the Partnership's ability to leverage Höegh LNG's relationships
and reputation in the shipping industry;
- the Partnership's ability to consummate the acquisition of the
23.5% interest in the joint ventures that own the Neptune
and the GDF Suez Cape Ann from MOL which depends on, but is
not limited to, the execution of a definitive purchase agreement
and other definitive documentation and receipt of board approvals
for the Acquisition; the timing of the Acquisition and the
satisfaction of the conditions to closing thereof; the
Partnership's ability to finance the acquisition;
- the Partnership's ability to purchase the 49% interest in the
Höegh Grace entities or additional vessels from Höegh LNG in
the future;
- the Partnership's ability to integrate and realize the
anticipated benefits from the acquisition of the 51% interest in
the Höegh Grace entities;
- the Partnership's continued ability to enter into long-term,
fixed-rate charters;
- the operating performance of the Partnership's vessels and any
related claims by charterers;
- the Partnership's ability to maximize the use of its vessels,
including the redeployment or disposition of vessels no longer
under long-term charters;
- expected pursuit of strategic opportunities, including the
acquisition of vessels;
- the Partnership's ability to compete successfully for future
chartering and newbuilding opportunities;
- timely acceptance of the Partnership's vessels by its
charterers;
- termination dates and extensions of charters;
- the cost of, and the Partnership's ability to comply with,
governmental regulations and maritime self-regulatory organization
standards, as well as standard regulations imposed by its
charterers applicable to its business;
- demand in the FSRU sector or the LNG shipping sector in general
and the demand for the Partnership's vessels in particular;
- availability of skilled labor, vessel crews and
management;
- the Partnership's incremental general and administrative
expenses as a publicly traded limited partnership and its fees and
expenses payable under its ship management agreements, the
technical information and services agreement and the administrative
services agreements;
- the anticipated taxation of the Partnership and distributions
to its unitholders;
- estimated future maintenance and replacement capital
expenditures;
- the Partnership's ability to retain key employees;
- customers' increasing emphasis on environmental and safety
concerns;
- potential liability from any pending or future litigation;
- potential disruption of shipping routes due to accidents,
political events, piracy or acts by terrorists;
- future sales of common units in the public market;
- the Partnership's business strategy and other plans and
objectives for future operations;
- the Partnership's ability to successfully remediate any
material weaknesses in its internal control over financial
reporting and its disclosure controls and procedures; and
- other factors listed from time to time in the reports and other
documents that the Partnership files with the SEC, including the
Partnership's Annual Report on Form 20-F for the year ended
December 31, 2016 and subsequent
quarterly reports on Form 6-K.
All forward-looking statements included in this press release
are made only as of the date of this press release. New factors
emerge from time to time, and it is not possible for the
Partnership to predict all of these factors. Further, the
Partnership cannot assess the impact of each such factor on its
business or the extent to which any factor, or combination of
factors, may cause actual results to be materially different from
those contained in any forward-looking statement. The Partnership
does not intend to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in its expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is
based.
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF INCOME (in thousands of U.S. dollars,
except per unit amounts)
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter
revenues
|
|
$
|
35,024
|
|
|
|
22,785
|
|
|
|
70,101
|
|
|
$
|
44,454
|
|
Total
revenues
|
|
|
35,024
|
|
|
|
22,785
|
|
|
|
70,101
|
|
|
|
44,454
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
|
|
(5,628)
|
|
|
|
(4,252)
|
|
|
|
(11,805)
|
|
|
|
(8,034)
|
|
Construction contract
expenses
|
|
|
(151)
|
|
|
|
(315)
|
|
|
|
(151)
|
|
|
|
(315)
|
|
Administrative
expenses
|
|
|
(2,465)
|
|
|
|
(2,395)
|
|
|
|
(5,222)
|
|
|
|
(4,700)
|
|
Depreciation and
amortization
|
|
|
(5,263)
|
|
|
|
(2,636)
|
|
|
|
(10,526)
|
|
|
|
(5,265)
|
|
Total operating
expenses
|
|
|
(13,507)
|
|
|
|
(9,598)
|
|
|
|
(27,704)
|
|
|
|
(18,314)
|
|
Equity in earnings
(losses) of joint ventures
|
|
|
1,551
|
|
|
|
(1,866)
|
|
|
|
6,360
|
|
|
|
(8,575)
|
|
Operating income
(loss)
|
|
|
23,068
|
|
|
|
11,321
|
|
|
|
48,757
|
|
|
|
17,565
|
|
FINANCIAL INCOME
(EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
113
|
|
|
|
232
|
|
|
|
243
|
|
|
|
505
|
|
Interest
expense
|
|
|
(7,752)
|
|
|
|
(6,354)
|
|
|
|
(15,488)
|
|
|
|
(12,760)
|
|
Gain (loss) on
derivative instruments
|
|
|
247
|
|
|
|
326
|
|
|
|
910
|
|
|
|
662
|
|
Other items,
net
|
|
|
(1,422)
|
|
|
|
(962)
|
|
|
|
(2,224)
|
|
|
|
(2,001)
|
|
Total financial
income (expense), net
|
|
|
(8,814)
|
|
|
|
(6,758)
|
|
|
|
(16,559)
|
|
|
|
(13,594)
|
|
Income (loss)
before tax
|
|
|
14,254
|
|
|
|
4,563
|
|
|
|
32,198
|
|
|
|
3,971
|
|
Income tax
expense
|
|
|
(2,042)
|
|
|
|
(501)
|
|
|
|
(3,797)
|
|
|
|
(949)
|
|
Net income
(loss)
|
|
$
|
12,212
|
|
|
|
4,062
|
|
|
|
28,401
|
|
|
$
|
3,022
|
|
Non-controlling
interest in net income
|
|
|
2,812
|
|
|
|
—
|
|
|
|
5,556
|
|
|
|
—
|
|
Partners' interest in
net income (loss)
|
|
$
|
9,400
|
|
|
|
4,062
|
|
|
|
22,845
|
|
|
$
|
3,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
unit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common unit public
(basic and diluted)
|
|
$
|
0.28
|
|
|
$
|
0.15
|
|
|
$
|
0.68
|
|
|
$
|
0.11
|
|
Common unit Höegh LNG
(basic and diluted)
|
|
$
|
0.30
|
|
|
$
|
0.16
|
|
|
$
|
0.71
|
|
|
$
|
0.12
|
|
Subordinated unit
(basic and diluted)
|
|
$
|
0.30
|
|
|
$
|
0.16
|
|
|
$
|
0.71
|
|
|
$
|
0.12
|
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED INTERIM CONSOLIDATED
BALANCE SHEETS (in thousands of U.S.
dollars)
|
|
|
|
|
|
As
of
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
15,452
|
|
|
$
|
18,915
|
|
Restricted
cash
|
|
|
11,918
|
|
|
|
8,055
|
|
Trade
receivables
|
|
|
6,719
|
|
|
|
2,088
|
|
Amounts due from
affiliates
|
|
|
4,169
|
|
|
|
4,237
|
|
Advances to joint
ventures
|
|
|
4,623
|
|
|
|
6,275
|
|
Inventory
|
|
|
666
|
|
|
|
697
|
|
Current portion of
net investment in direct financing lease
|
|
|
3,642
|
|
|
|
3,485
|
|
Prepaid expenses and
other receivables
|
|
|
840
|
|
|
|
609
|
|
Total current
assets
|
|
|
48,029
|
|
|
|
44,361
|
|
Long-term
assets
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
14,076
|
|
|
|
14,154
|
|
Cash designated for
acquisition
|
|
|
—
|
|
|
|
91,768
|
|
Vessels, net of
accumulated depreciation
|
|
|
689,241
|
|
|
|
342,591
|
|
Other
equipment
|
|
|
597
|
|
|
|
592
|
|
Intangibles and
goodwill
|
|
|
26,200
|
|
|
|
16,241
|
|
Advances to joint
ventures
|
|
|
—
|
|
|
|
943
|
|
Net investment in
direct financing lease
|
|
|
284,765
|
|
|
|
286,626
|
|
Long-term deferred
tax asset
|
|
|
72
|
|
|
|
791
|
|
Other long-term
assets
|
|
|
10,633
|
|
|
|
12,400
|
|
Total long-term
assets
|
|
|
1,025,584
|
|
|
|
766,106
|
|
Total
assets
|
|
$
|
1,073,613
|
|
|
$
|
810,467
|
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands of U.S.
dollars)
|
|
|
|
|
|
As
of
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
45,458
|
|
|
$
|
32,208
|
|
Trade
payables
|
|
|
283
|
|
|
|
972
|
|
Amounts due to owners
and affiliates
|
|
|
615
|
|
|
|
1,374
|
|
Value added and
withholding tax liability
|
|
|
1,082
|
|
|
|
796
|
|
Derivative
instruments
|
|
|
3,825
|
|
|
|
3,534
|
|
Accrued liabilities
and other payables
|
|
|
19,289
|
|
|
|
18,932
|
|
Total current
liabilities
|
|
|
70,552
|
|
|
|
57,816
|
|
Long-term
liabilities
|
|
|
|
|
|
|
|
|
Accumulated losses of
joint ventures
|
|
|
19,526
|
|
|
|
25,886
|
|
Long-term
debt
|
|
|
457,169
|
|
|
|
300,440
|
|
Revolving credit and
seller's credit due to owners and affiliates
|
|
|
54,705
|
|
|
|
43,005
|
|
Derivative
instruments
|
|
|
4,842
|
|
|
|
3,511
|
|
Long-term tax
liability
|
|
|
2,452
|
|
|
|
2,228
|
|
Long-term deferred
tax liability
|
|
|
2,766
|
|
|
|
1,556
|
|
Other long-term
liabilities
|
|
|
10,485
|
|
|
|
11,235
|
|
Total long-term
liabilities
|
|
|
551,945
|
|
|
|
387,861
|
|
Total
liabilities
|
|
|
622,497
|
|
|
|
445,677
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Common units
public
|
|
|
318,439
|
|
|
|
321,091
|
|
Common units Höegh
LNG
|
|
|
6,689
|
|
|
|
6,849
|
|
Subordinated
units
|
|
|
41,591
|
|
|
|
42,586
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(5,785)
|
|
|
|
(5,736)
|
|
Total partners'
capital
|
|
|
360,934
|
|
|
|
364,790
|
|
Non-controlling
interest
|
|
|
90,182
|
|
|
|
—
|
|
Total
equity
|
|
|
451,116
|
|
|
|
364,790
|
|
Total liabilities
and equity
|
|
$
|
1,073,613
|
|
|
$
|
810,467
|
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (in thousands of U.S.
dollars)
|
|
|
|
Three months
ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
12,212
|
|
|
$
|
4,062
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5,263
|
|
|
|
2,636
|
|
Equity in losses
(earnings) of joint ventures
|
|
|
(1,551)
|
|
|
|
1,866
|
|
Changes in accrued
interest income on advances to joint ventures
|
|
|
1,398
|
|
|
|
(138)
|
|
Amortization of
deferred debt issuance cost and fair value of debt
assumed
|
|
|
210
|
|
|
|
520
|
|
Amortization in
revenue for above market contract
|
|
|
906
|
|
|
|
598
|
|
Changes in accrued
interest expense
|
|
|
93
|
|
|
|
(273)
|
|
Net currency exchange
losses (gains)
|
|
|
787
|
|
|
|
23
|
|
Unrealized loss (gain)
on derivative instruments
|
|
|
(247)
|
|
|
|
(327)
|
|
Non-cash revenue: tax
paid directly by charterer
|
|
|
(432)
|
|
|
|
—
|
|
Non-cash income tax
expense: tax paid directly by charterer
|
|
|
432
|
|
|
|
—
|
|
Deferred tax expense
and uncertain tax position
|
|
|
924
|
|
|
|
470
|
|
Issuance of units for
Board of Directors' fees
|
|
|
189
|
|
|
|
189
|
|
Other
adjustments
|
|
|
150
|
|
|
|
38
|
|
Changes in working
capital:
|
|
|
—
|
|
|
|
—
|
|
Restricted
cash
|
|
|
(3,078)
|
|
|
|
(453)
|
|
Trade
receivables
|
|
|
182
|
|
|
|
(22)
|
|
Inventory
|
|
|
17
|
|
|
|
16
|
|
Prepaid expenses and
other receivables
|
|
|
690
|
|
|
|
284
|
|
Trade
payables
|
|
|
(625)
|
|
|
|
(395)
|
|
Amounts due to owners
and affiliates
|
|
|
(2,437)
|
|
|
|
(3,393)
|
|
Value added and
withholding tax liability
|
|
|
652
|
|
|
|
1595
|
|
Accrued liabilities
and other payables
|
|
|
(558)
|
|
|
|
197
|
|
Net cash provided
by (used in) operating activities
|
|
|
15,178
|
|
|
|
7,493
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Expenditure for
purchase of Höegh Grace entities
|
|
|
(407)
|
|
|
|
—
|
|
Cash acquired in the
purchase of the Höegh Grace entities
|
|
|
—
|
|
|
|
—
|
|
Decrease in
restricted cash designated for purchase of the Höegh Grace
entities
|
|
|
—
|
|
|
|
—
|
|
Expenditure for
vessel and other equipment
|
|
|
(8)
|
|
|
|
(317)
|
|
Receipts from
repayment of principal on advances to joint ventures
|
|
|
—
|
|
|
|
2,316
|
|
Receipts from
repayment of principal on direct financing lease
|
|
|
861
|
|
|
|
789
|
|
Net cash provided
by (used in) investing activities
|
|
$
|
446
|
|
|
$
|
2,788
|
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (in thousands of U.S.
dollars)
|
|
|
|
Three months
ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from loans
and promissory notes due to owners and affiliates
|
|
$
|
10,100
|
|
|
$
|
—
|
|
Repayment of
long-term debt
|
|
|
(11,364)
|
|
|
|
(8,053)
|
|
Repayment of customer
loan for funding of value added liability on import
|
|
|
—
|
|
|
|
—
|
|
Payment of debt
issuance cost
|
|
|
—
|
|
|
|
5
|
|
Cash distributions to
unitholders
|
|
|
(14,438)
|
|
|
|
(10,967)
|
|
Cash distributions to
non-controlling interest
|
|
|
(3,920)
|
|
|
|
—
|
|
Proceeds from
indemnifications received from Höegh LNG
|
|
|
605
|
|
|
|
292
|
|
(Increase) decrease
in restricted cash
|
|
|
78
|
|
|
|
157
|
|
Net cash provided
by (used in) financing activities
|
|
|
(18,939)
|
|
|
|
(18,566)
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(3,315)
|
|
|
|
(8,285)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
18,767
|
|
|
|
26,291
|
|
Cash and cash
equivalents, end of period
|
|
$
|
15,452
|
|
|
$
|
18,006
|
|
HÖEGH LNG PARTNERS LP
UNAUDITED
SEGMENT INFORMATION FOR THE QUARTER ENDED JUNE 30, 2017 AND 2016
(in thousands of U.S. dollars)
Segment information
There are two operating segments. The segment profit measure is
Segment EBITDA, which is defined as earnings before interest,
taxes, depreciation, amortization and other financial items (gains
and losses on derivative instruments and other items, net) less the
non-controlling interest in Segment EBITDA. Segment EBITDA is
reconciled to operating income and net income in the segment
presentation below. The two segments are "Majority held FSRUs" and
"Joint venture FSRUs." In addition, unallocated corporate costs
that are considered to benefit the entire organization, interest
income from advances to joint ventures and interest expense related
to the seller's credit note and the outstanding balance on the
$85 million revolving credit facility
are included in "Other."
For the three months ended June 30,
2017, Majority held FSRUs includes the direct financing
lease related to the PGN FSRU Lampung, the operating leases
related to the Höegh Gallant and the Höegh Grace. For
the three months ended June 30, 2016,
Majority held FSRUs includes only the direct financing lease
related to the PGN FSRU Lampung and the operating lease
related to the Höegh Gallant.
As of June 30, 2017 and 2016,
Joint Venture FSRUs include two 50% owned FSRUs, the Neptune
and the GDF Suez Cape Ann, that operate under long term time
charters with one charterer.
The accounting policies applied to the segments are the same as
those applied in the financial statements, except that i) Joint
venture FSRUs are presented under the proportional consolidation
method for the segment note to the Partnership's financial
statements and in the tables below, and under equity accounting for
the consolidated financial statements and ii) non-controlling
interest in Segment EBITDA is subtracted in the segment note and
the tables below to reflect the Partnership's interest in Segment
EBITDA as the Partnership's segment profit measure, Segment EBITDA.
Under the proportional consolidation method, 50% of the Joint
venture FSRUs' revenues, expenses and assets are reflected in the
segment note. Management monitors the results of operations of
joint ventures under the proportional consolidation method and not
the equity method of accounting. On January
1, 2017, the Partnership began consolidating its acquired
51% interest in the Höegh Grace entities. Since the
Partnership obtained control of the Höegh Grace entities, it
consolidates 100% of
the revenues, expenses, assets and liabilities of the Höegh
Grace entities and the interest not owned by the Partnership is
reflected as non-controlling interest in net income and
non-controlling interest in total equity under US GAAP. Management
monitors the results of operations of the Höegh Grace
entities based on the Partnership's 51% interest in Segment EBITDA
of such entities and, therefore, subtracts the non-controlling
interest in Segment EBITDA to present Segment EBITDA. The
adjustment to non-controlling interest in Segment EBITDA is
reversed to reconcile to operating income and net income in the
segment presentation below. The following tables include the
results for the segments for the three months ended June 30, 2017 and 2016.
HÖEGH LNG PARTNERS
LP UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED
JUNE 30, 2017 (in thousands of U.S.
dollars)
|
|
|
|
|
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
Joint
venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
|
FSRUs
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
held
|
|
|
(proportional
|
|
|
|
|
|
Segment
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands of
U.S. dollars)
|
|
FSRUs
|
|
|
consolidation)
|
|
|
Other
|
|
|
reporting
|
|
|
Eliminations
|
|
|
|
reporting
|
|
Time charter
revenues
|
|
$
|
35,024
|
|
|
|
10,225
|
|
|
|
—
|
|
|
|
45,249
|
|
|
|
(10,225)
|
|
(1)
|
|
$
|
35,024
|
|
Total
revenues
|
|
|
35,024
|
|
|
|
10,225
|
|
|
|
—
|
|
|
|
45,249
|
|
|
|
|
|
|
|
|
35,024
|
|
Operating
expenses
|
|
|
(6,693)
|
|
|
|
(1,984)
|
|
|
|
(1,400)
|
|
|
|
(10,077)
|
|
|
|
1,984
|
|
(1)
|
|
|
(8,093)
|
|
Construction contract
expenses
|
|
|
(151)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(151)
|
|
|
|
|
|
|
|
|
(151)
|
|
Equity in earnings
(losses) of joint ventures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,551
|
|
(1)
|
|
|
1,551
|
|
Less: Non-controlling
interest in Segment EBITDA
|
|
|
(5,423)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,423)
|
|
|
|
5,423
|
|
(2)
|
|
|
—
|
|
Segment
EBITDA
|
|
|
22,757
|
|
|
|
8,241
|
|
|
|
(1,400)
|
|
|
|
29,598
|
|
|
|
|
|
|
|
|
|
|
Add: Non-controlling
interest in Segment EBITDA
|
|
|
5,423
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,423
|
|
|
|
(5,423)
|
|
(2)
|
|
|
—
|
|
Depreciation and
amortization
|
|
|
(5,263)
|
|
|
|
(2,476)
|
|
|
|
—
|
|
|
|
(7,739)
|
|
|
|
2,476
|
|
(1)
|
|
|
(5,263)
|
|
Operating income
(loss)
|
|
|
22,917
|
|
|
|
5,765
|
|
|
|
(1,400)
|
|
|
|
27,282
|
|
|
|
|
|
|
|
|
23,068
|
|
Gain (loss) on
derivative instruments
|
|
|
247
|
|
|
|
(785)
|
|
|
|
—
|
|
|
|
(538)
|
|
|
|
785
|
|
(1)
|
|
|
247
|
|
Other financial
income (expense), net
|
|
|
(8,028)
|
|
|
|
(3,429)
|
|
|
|
(1,033)
|
|
|
|
(12,490)
|
|
|
|
3,429
|
|
(1)
|
|
|
(9,061)
|
|
Income (loss)
before tax
|
|
|
15,136
|
|
|
|
1,551
|
|
|
|
(2,433)
|
|
|
|
14,254
|
|
|
|
—
|
|
|
|
|
14,254
|
|
Income tax
expense
|
|
|
(2,042)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,042)
|
|
|
|
—
|
|
|
|
|
(2,042)
|
|
Net income
(loss)
|
|
$
|
13,094
|
|
|
|
1,551
|
|
|
|
(2,433)
|
|
|
|
12,212
|
|
|
|
—
|
|
|
|
$
|
12,212
|
|
Non-controlling
interest in net income
|
|
|
2,812
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,812
|
|
|
|
|
|
|
|
|
2,812
|
|
Partners' interest in
net income (loss)
|
|
$
|
10,282
|
|
|
|
1,551
|
|
|
|
(2,433)
|
|
|
|
9,400
|
|
|
|
—
|
|
|
|
$
|
9,400
|
|
|
(1)
|
Eliminations reverse
each of the income statement line items of the proportional amounts
for Joint venture FSRUs and record the Partnership's share of the
Joint venture FSRUs net income (loss) to Equity in earnings (loss)
of joint ventures.
|
|
|
|
|
(2)
|
Eliminations reverse
the adjustment to Non-controlling interest in Segment EBITDA
included for Segment EBITDA and the adjustment to reverse the
Non-controlling interest in Segment EBITDA to reconcile to
operating income and net income.
|
HÖEGH LNG PARTNERS
LP UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED
JUNE 30, 2016 (in thousands of U.S.
dollars)
|
|
|
|
|
|
Three months ended
June 30, 2016
|
|
|
|
|
|
|
Joint
venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
|
FSRUs
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
held
|
|
|
(proportional
|
|
|
|
|
|
Segment
|
|
|
|
|
|
Consolidated
|
|
(in thousands of
U.S. dollars)
|
|
FSRUs
|
|
|
consolidation)
|
|
|
Other
|
|
|
reporting
|
|
|
Eliminations
(1)
|
|
|
reporting
|
|
Time charter
revenues
|
|
$
|
22,785
|
|
|
|
10,379
|
|
|
|
—
|
|
|
|
33,164
|
|
|
|
(10,379)
|
|
|
$
|
22,785
|
|
Total
revenues
|
|
|
22,785
|
|
|
|
10,379
|
|
|
|
—
|
|
|
|
33,164
|
|
|
|
|
|
|
|
33,164
|
|
Operating
expenses
|
|
|
(5,123)
|
|
|
|
(1,908)
|
|
|
|
(1,524)
|
|
|
|
(8,555)
|
|
|
|
1,908
|
|
|
|
(6,647)
|
|
Construction contract
expenses
|
|
|
(315)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(315)
|
|
|
|
|
|
|
|
(315)
|
|
Equity in earnings
(losses) of joint ventures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,866)
|
|
|
|
(1,866)
|
|
Segment
EBITDA
|
|
|
17,347
|
|
|
|
8,471
|
|
|
|
(1,524)
|
|
|
|
24,294
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
(2,636)
|
|
|
|
(2,376)
|
|
|
|
—
|
|
|
|
(5,012)
|
|
|
|
2,376
|
|
|
|
(2,636)
|
|
Operating income
(loss)
|
|
|
14,711
|
|
|
|
6,095
|
|
|
|
(1,524)
|
|
|
|
19,282
|
|
|
|
|
|
|
|
19,282
|
|
Gain (loss) on
derivative instruments
|
|
|
326
|
|
|
|
(4,174)
|
|
|
|
—
|
|
|
|
(3,848)
|
|
|
|
4,174
|
|
|
|
326
|
|
Other financial
income (expense), net
|
|
|
(6,048)
|
|
|
|
(3,787)
|
|
|
|
(1,036)
|
|
|
|
(10,871)
|
|
|
|
3,787
|
|
|
|
(7,084)
|
|
Income (loss)
before tax
|
|
|
8,989
|
|
|
|
(1,866)
|
|
|
|
(2,560)
|
|
|
|
4,563
|
|
|
|
—
|
|
|
|
4,563
|
|
Income tax
expense
|
|
|
(500)
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
(501)
|
|
|
|
—
|
|
|
|
(501)
|
|
Net income
(loss)
|
|
$
|
8,489
|
|
|
|
(1,866)
|
|
|
|
(2,561)
|
|
|
|
4,062
|
|
|
|
—
|
|
|
$
|
4,062
|
|
|
(1)
|
Eliminations reverse
each of the income statement line items of the proportional
consolidation amounts for Joint venture FSRUs and record the
Partnership's share of the Joint venture FSRUs' net income (loss)
to Equity in earnings (loss) of joint ventures.
|
HÖEGH LNG PARTNERS
LP UNAUDITED SCHEDULE OF FINANCIAL INCOME AND
EXPENSE (in thousands of U.S. dollars)
|
|
The following table
includes the financial income (expense), net for the three months
ended June 30, 2017 and 2016.
|
|
|
|
Three months
ended
|
|
|
|
June
30,
|
|
(in thousands of
U.S. dollars)
|
|
2017
|
|
|
2016
|
|
Interest
income
|
|
$
|
113
|
|
|
$
|
232
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(7,301)
|
|
|
|
(5,533)
|
|
Commitment
fees
|
|
|
(241)
|
|
|
|
(301)
|
|
Amortization of debt
issuance cost and fair value of debt assumed
|
|
|
(210)
|
|
|
|
(520)
|
|
Total interest
expense
|
|
|
(7,752)
|
|
|
|
(6,354)
|
|
Gain (loss) on
derivative instruments
|
|
|
247
|
|
|
|
326
|
|
Other items,
net:
|
|
|
|
|
|
|
|
|
Unrealized foreign
exchange gain (loss)
|
|
|
(804)
|
|
|
|
(18)
|
|
Realized foreign
exchange gain (loss)
|
|
|
(7)
|
|
|
|
(10)
|
|
Bank charges, fees
and other
|
|
|
(29)
|
|
|
|
(11)
|
|
Withholding tax on
interest expense and other
|
|
|
(582)
|
|
|
|
(923)
|
|
Total other items,
net
|
|
|
(1,422)
|
|
|
|
(962)
|
|
Total financial
income (expense), net
|
|
$
|
(8,814)
|
|
|
$
|
(6,758)
|
|
Appendix A: Segment EBITDA
Non-GAAP Financial Measure
Segment EBITDA. EBITDA is defined as earnings before
interest, depreciation and amortization and taxes. Segment EBITDA
is defined as earnings before interest, depreciation and
amortization, taxes and other financial items less non-controlling
interest in Segment EBITDA. Other financial items consist of gains
and losses on derivative instruments and other items, net
(including foreign exchange gains and losses and withholding tax on
interest expenses). Segment EBITDA is used as a supplemental
financial measure by management and external users of financial
statements, such as the Partnership's lenders, to assess its
financial and operating performance. The Partnership believes that
Segment EBITDA assists its management and investors by increasing
the comparability of its performance from period to period and
against the performance of other companies in the industry that
provide Segment 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 Segment EBITDA as a financial and operating
measure benefits investors in (a) selecting between investing in it
and other investment alternatives and (b) monitoring its ongoing
financial and operational strength in assessing whether to continue
to hold common units. Segment EBITDA is a non-GAAP financial
measure and should not be considered as an alternative to net
income, operating income or any other measure of financial
performance presented in accordance with U.S. GAAP. Segment EBITDA
excludes some, but not all, items that affect net income, and these
measures may vary among other companies. Therefore, Segment EBITDA
as presented below may not be comparable to similarly titled
measures of other companies. The following tables reconcile Segment
EBITDA for each of the segments and the Partnership as a whole to
net income (loss), the comparable U.S. GAAP financial measure, for
the periods presented:
|
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
Joint
venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
|
FSRUs
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
held
|
|
|
(proportional
|
|
|
|
|
|
Segment
|
|
|
|
|
|
|
Consolidated
|
|
(in thousands of
U.S. dollars)
|
|
FSRUs
|
|
|
consolidation)
|
|
|
Other
|
|
|
reporting
|
|
|
Eliminations(1)
|
|
|
|
reporting
|
|
Reconciliation to
net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
13,094
|
|
|
|
1,551
|
|
|
|
(2,433)
|
|
|
|
12,212
|
|
|
|
|
|
|
|
$
|
12,212
|
(3)
|
Interest
income
|
|
|
—
|
|
|
|
(13)
|
|
|
|
(113)
|
|
|
|
(126)
|
|
|
|
13
|
|
(4)
|
|
|
(113)
|
|
Interest
expense
|
|
|
6,615
|
|
|
|
3,442
|
|
|
|
1,137
|
|
|
|
11,194
|
|
|
|
(3,442)
|
|
(4)
|
|
|
7,752
|
|
Depreciation and
amortization
|
|
|
5,263
|
|
|
|
2,476
|
|
|
|
—
|
|
|
|
7,739
|
|
|
|
(2,476)
|
|
(5)
|
|
|
5,263
|
|
Other financial items
(2)
|
|
|
1,166
|
|
|
|
785
|
|
|
|
9
|
|
|
|
1,960
|
|
|
|
(785)
|
|
(6)
|
|
|
1,175
|
|
Income tax (benefit)
expense
|
|
|
2,042
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,042
|
|
|
|
|
|
|
|
|
2,042
|
|
Equity in earnings
of JVs:
Interest (income) expense, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,429
|
|
(4)
|
|
|
3,429
|
|
Equity in earnings
of JVs:
Depreciation and amortization
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,476
|
|
(5)
|
|
|
2,476
|
|
Equity in earnings
of JVs:
Other financial items (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
785
|
|
(6)
|
|
|
785
|
|
Non-controlling
interest in
Segment EBITDA
|
|
|
(5,423)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,423)
|
|
|
|
|
|
|
|
|
(5,423)
|
|
Segment
EBITDA
|
|
$
|
22,757
|
|
|
|
8,241
|
|
|
|
(1,400)
|
|
|
|
29,598
|
|
|
|
|
|
|
|
$
|
29,598
|
|
|
(1)
|
Eliminations reverse
each of the income statement reconciling line items of the
proportional amounts for Joint venture FSRUs that are reflected in
the consolidated net income for the Partnership's share of the
Joint venture FSRUs' net income (loss) on the Equity in earnings
(loss) of joint ventures line item in the consolidated income
statement. Separate adjustments from the consolidated net income to
Segment EBITDA for the Partnership's share of the Joint venture
FSRUs are included in the reconciliation lines starting with
"Equity in earnings of JVs."
|
|
|
|
|
(2)
|
Other financial items
consist of gains and losses on derivative instruments and other
items, net including foreign exchange gains or losses and
withholding tax on interest expense.
|
|
|
|
|
(3)
|
There is no
adjustment between net income for Total Segment reporting and the
Consolidated reporting because the net income under the
proportional consolidation and equity method of accounting is the
same.
|
|
|
|
|
(4)
|
Interest income and
interest expense for the Joint venture FSRUs is eliminated from the
Total Segment reporting to agree to the interest income and
interest expense in the Consolidated reporting and reflected as a
separate adjustment to the equity accounting on the line Equity
in earnings of JVs: Interest (income) expense for the
Consolidated reporting.
|
|
|
|
|
(5)
|
Depreciation and
amortization for the Joint venture FSRUs is eliminated from the
Total Segment reporting to agree to the depreciation and
amortization in the Consolidated reporting and reflected as a
separate adjustment to the equity accounting on the line Equity
in earnings of JVs: Depreciation and amortization for the
Consolidated reporting.
|
|
|
|
|
(6)
|
Other financial items
for the Joint venture FSRUs is eliminated from the Segment
reporting to agree to the Other financial items in the Consolidated
reporting and reflected as a separate adjustment to the equity
accounting on the line Equity in earnings of JVs: Other
financial items for the Consolidated reporting.
|
|
|
Three months ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint
venture
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
|
FSRUs
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
(in thousands of
U.S. dollars)
|
|
held
FSRUs
|
|
|
(proportional
consolidation)
|
|
|
Other
|
|
|
Segment
reporting
|
|
|
Eliminations(1)
|
|
|
|
Consolidated
reporting
|
|
Reconciliation to
net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
8,489
|
|
|
|
(1,866)
|
|
|
|
(2,561)
|
|
|
|
4,062
|
|
|
|
|
|
|
|
$
|
4,062
|
(3)
|
Interest
income
|
|
|
—
|
|
|
|
—
|
|
|
|
(232)
|
|
|
|
(232)
|
|
|
|
—
|
|
(4)
|
|
|
(232)
|
|
Interest
expense
|
|
|
5,102
|
|
|
|
3,787
|
|
|
|
1,252
|
|
|
|
10,141
|
|
|
|
(3,787)
|
|
(4)
|
|
|
6,354
|
|
Depreciation and
amortization
|
|
|
2,636
|
|
|
|
2,376
|
|
|
|
—
|
|
|
|
5,012
|
|
|
|
(2,376)
|
|
(5)
|
|
|
2,636
|
|
Other financial
items(2)
|
|
|
620
|
|
|
|
4,174
|
|
|
|
16
|
|
|
|
4,810
|
|
|
|
(4,174)
|
|
(6)
|
|
|
636
|
|
Income tax (benefit)
expense
|
|
|
500
|
|
|
|
—
|
|
|
|
1
|
|
|
|
501
|
|
|
|
|
|
|
|
|
501
|
|
Equity in earnings
of JVs:
Interest (income) expense, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,787
|
|
(4)
|
|
|
3,787
|
|
Equity in earnings
of JVs:
Depreciation and amortization
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,376
|
|
(5)
|
|
|
2,376
|
|
Equity in earnings
of JVs:
Other financial items(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,174
|
|
(6)
|
|
|
4,174
|
|
Segment
EBITDA
|
|
$
|
17,347
|
|
|
|
8,471
|
|
|
|
(1,524)
|
|
|
|
24,294
|
|
|
|
|
|
|
|
$
|
24,294
|
|
|
(1)
|
Eliminations reverse
each of the income statement reconciling line items of the
proportional amounts for Joint venture FSRUs that are reflected in
the consolidated net income for the Partnership's share of the
Joint venture FSRUs' net income (loss) on the Equity in earnings
(loss) of joint ventures line item in the consolidated income
statement. Separate adjustments from the consolidated net income to
Segment EBITDA for the Partnership's share of the Joint venture
FSRUs are included in the reconciliation lines starting with
"Equity in earnings of JVs."
|
|
|
|
|
(2)
|
Other financial items
consist of gains and losses on derivative instruments and other
items, net including foreign exchange gains or losses and
withholding tax on interest expense.
|
|
|
|
|
(3)
|
There is no
adjustment between net income for Total Segment reporting and the
Consolidated reporting because the net income under the
proportional consolidation and equity method of accounting is the
same.
|
|
|
|
|
(4)
|
Interest income and
interest expense for the Joint venture FSRUs is eliminated from the
Total Segment reporting to agree to the interest income and
interest expense in the Consolidated reporting and reflected as a
separate adjustment to the equity accounting on the line Equity
in earnings of JVs: Interest (income) expense for the
Consolidated reporting.
|
|
|
|
|
(5)
|
Depreciation and
amortization for the Joint venture FSRUs is eliminated from the
Total Segment reporting to agree to the depreciation and
amortization in the Consolidated reporting and reflected as a
separate adjustment to the equity accounting on the line Equity
in earnings of JVs: Depreciation and amortization for the
Consolidated reporting.
|
|
|
|
|
(6)
|
Other financial items
for the Joint venture FSRUs is eliminated from the Segment
reporting to agree to the Other financial items in the Consolidated
reporting and reflected as a separate adjustment to the equity
accounting on the line Equity in earnings of JVs: Other
financial items for the Consolidated reporting.
|
Appendix B: Distributable Cash Flow
Distributable cash flow represents Segment EBITDA adjusted for
cash collections on principal payments on the direct financing
lease, amortization in revenues for above market contracts less
non-controlling interest in amortization in revenues for above
market contracts, non-cash revenue: tax paid directly by charterer
less non-controlling interest: non-cash revenue, amortization of
deferred revenues for the joint ventures, interest income,
interest expense less amortization of debt issuance cost and fair
value of debt assumed, other items (net), unrealized foreign
exchange losses (gains), current income tax expense, net of
uncertain tax position less non-cash income tax: tax paid directly
by charterer, non-controlling interest in finance and tax items and
other adjustments including indemnification paid by Höegh LNG for
non-budgeted expenses and losses and estimated maintenance and
replacement capital expenditures. Cash collections on the direct
financing lease investment with respect to the PGN FSRU
Lampung consist of the difference between the payments under
time charter and the revenues recognized as a financing lease
(representing the payment of the principal recorded as a
receivable). Amortization in revenues for above market contracts
consist of the non-cash amortization of the intangible for the
above market time charter contract related to the acquisitions of
the Höegh Gallant and Höegh Grace. Amortization of
deferred revenues for the joint ventures accounted for under the
equity method consist of non-cash amortization to revenues of
charterer payments for modifications and drydocking to the vessels.
Non-cash revenue: tax paid directly by charterer and non-cash
income tax: tax paid directly by charterer consists of certain
taxes paid by the charterer directly to the Colombian tax
authorities on behalf of the Partnership's subsidiaries which is
recorded as a component of time charter revenues and current income
tax expenses. 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 presented starting with Segment
EBITDA taken from the total segment reporting using the
proportional consolidation method for the Partnership's 50%
interests in the joint ventures as shown in Appendix A. Therefore,
the adjustments to Segment EBITDA include the Partnership's share
of the joint venture's adjustments. The Partnership believes
distributable cash flow is an important liquidity measure used by
management and investors in publicly traded partnerships to compare
cash generating performance of the Partnership' cash generating
assets from period to period by adjusting for cash and non-cash
items that could potentially have a disparate effect between
periods, and to compare the cash generating performance for
specific periods to the cash distributions (if any) that are
expected to be paid to unitholders. The Partnership also believes
distributable cash flow benefits investors in comparing its cash
generating performance to other companies that account for time
charters as operating leases rather than financial leases, or that
do not have non-cash amortization of intangibles or deferred
revenue. Distributable cash flow is a non-GAAP liquidity measure
and should not be considered as an alternative to net cash provided
by operating activities, or any other measure of the Partnership's
liquidity or cash flows calculated in accordance with GAAP.
Distributable cash flow excludes some, but not all, items that
affect net cash provided by operating activities and the measures
may vary among companies. For example, distributable cash flow does
not reflect changes in working capital balances. Distributable cash
flow also includes some items that do not affect net cash provided
by operating activities. Therefore, distributable cash flow may not
be comparable to similarly titled measures of other companies.
Distributable cash flow is not the same measure as available cash
or operating surplus, both of which are defined by the
Partnership's partnership agreement. The first table below
reconciles distributable cash flow to Segment EBITDA, which is
reconciled to net income, the most directly comparable GAAP measure
for Segment EBITDA, in Appendix A. Refer to Appendix A for the
definition of Segment EBITDA. The second table below reconciles
distributable cash flow to net cash provided by operating
activities, the most directly comparable GAAP measures for
liquidity.
|
|
Three months
ended
|
|
(in thousands of
U.S. dollars)
|
|
June 30,
2017
|
|
Segment
EBITDA
|
|
$
|
29,598
|
|
Cash
collection/Principal payment on direct financing lease
|
|
|
861
|
|
Amortization in
revenues for above market contracts
|
|
|
906
|
|
Non-controlling
interest: amortization of above market contract
|
|
|
(151)
|
|
Non-cash revenue: tax
paid directly by charterer
|
|
|
(432)
|
|
Non-controlling
interest: Non-cash revenue
|
|
|
212
|
|
Equity in earnings
of JVs: Amortization of deferred revenue
|
|
|
(563)
|
|
Interest income
(1)
|
|
|
126
|
|
Interest expense
(1)
|
|
|
(11,194)
|
|
Amortization of debt
issuance cost (1) and fair value of debt assumed
|
|
|
254
|
|
Other items, net
(1)
|
|
|
(1,421)
|
|
Unrealized foreign
exchange losses (gains)
|
|
|
803
|
|
Current income tax
expense, net of uncertain tax position
|
|
|
(1,127)
|
|
Non-cash income tax:
tax paid directly by charter
|
|
|
432
|
|
Non-controlling
interest: finance and tax items
|
|
|
1,305
|
|
Other
adjustments:
|
|
|
|
|
Indemnification paid
by Höegh LNG after quarter end for non-budgeted expenses &
losses
|
|
|
151
|
|
Estimated maintenance
and replacement capital expenditures
|
|
|
(4,520)
|
|
Distributable cash
flow
|
|
$
|
15,240
|
|
|
(1)
|
The Partnership's
interest in the joint ventures' interest income, interest expense
and amortization of debt issuance cost is $13, $3,441 and $45
respectively.
|
|
|
Three months
ended
|
|
(in thousands of
U.S. dollars)
|
|
June 30,
2017
|
|
Distributable cash
flow
|
|
$
|
15,240
|
|
Indemnification paid
by Höegh LNG after quarter end for non-budgeted expenses &
losses
|
|
|
(151)
|
|
Estimated maintenance
and replacement capital expenditures
|
|
|
4,520
|
|
Non-controlling
interest in Segment EBITDA
|
|
|
5,423
|
|
Non-controlling
interest: amortization of above market contract
|
|
|
151
|
|
Non-controlling
interest: finance and tax items
|
|
|
(1,305)
|
|
Non-controlling
interest: non-cash revenue
|
|
|
(212)
|
|
Equity in earnings
of JVs: Amortization of deferred revenue
|
|
|
563
|
|
Equity in earnings
of JVs: Amortization of debt issuance cost
|
|
|
(45)
|
|
Equity in earnings
of JVs: Depreciation and amortization
|
|
|
(2,476)
|
|
Equity in earnings
of JVs: Gain (loss) on derivative instruments
|
|
|
(785)
|
|
Equity in losses
(earnings) of joint ventures
|
|
|
(1,551)
|
|
Cash
collection/Principal payment on direct financing lease
|
|
|
(861)
|
|
Changes in accrued
interest expense and interest income on advances to joint
ventures
|
|
|
1,491
|
|
Other
adjustments
|
|
|
333
|
|
Changes in working
capital
|
|
|
(5,157)
|
|
Net cash provided
by (used in) operating activities
|
|
$
|
15,178
|
|
Media contact:
Richard Tyrrell
Chief Executive Officer and Chief Financial Officer
+44 7919 058830
www.hoeghlngpartners.com
View original
content:http://www.prnewswire.com/news-releases/hoegh-lng-partners-lp-reports-financial-results-for-the-quarter-ended-june-30-2017-300508823.html
SOURCE Hoegh LNG Partners LP