Teekay LNG Partners Reports Third Quarter Results

Teekay LNG Partners Reports Third Quarter Results 
HAMILTON, BERMUDA -- (Marketwire) -- 11/08/12 -- Teekay LNG Partners
L.P. (NYSE:TGP) -  
Highlights 


 
--  Generated distributable cash flow of $57.8 million in the third quarter
    of 2012, an increase of 32 percent from the third quarter of 2011. 
    
--  Declared third quarter 2012 cash distribution of $0.675 per unit. 
    
--  Total liquidity of approximately $559 million as at September 30, 2012,
    including $182.2 million of net proceeds from the follow-on equity
    offering completed September 2012. 
    
--  Significant increase in the number of LNG project tenders; Teekay LNG is
    actively bidding on several projects. 

 
Teekay GP LLC, the general partner of Teekay LNG Partners L.P.
(Teekay LNG or the Partnership) (NYSE:TGP), today reported the
Partnership's results for the quarter ended September 30, 2012.
During the third quarter of 2012, the Partnership generated
distributable cash flow(1) of $57.8 million, compared to $43.7
million in the same quarter of the previous year. The increase
primarily reflects the incremental distributable cash flow resulting
from the following acquisitions: one Multigas carrier delivered in
October 2011; a 33 percent interest in four liquefied natural gas
(LNG) carriers delivered between August 2011 and January 2012; one
liquefied petroleum gas (LPG) carrier delivered in September 2011;
and a 52 percent interest in six LNG carriers acquired in February
2012. 
On October 12, 2012, the Partnership declared a cash distribution of
$0.675 per unit for the quarter ended September 30, 2012. The cash
distribution will be paid on November 9, 2012 to all unitholders of
record on October 24, 2012. 
"Shipping requirements to support new liquefaction projects scheduled
to come on-line starting in 2015 are expected to create significant
new demand for the global LNG shipping fleet," commented Peter
Evensen, Chief Executive Officer of Teekay GP L.L.C. "Against this
backdrop, the Partnership is currently actively bidding on several
LNG and floating storage and regasification projects with start-up
dates in the 2015 through 2017 timeframe. Including approximately
$180 million of net proceeds from the Partnership's September 2012
follow-on equity offering, Teekay LNG is well-positioned for
investment in one or more quality growth opportunities." 


 
(1)   Distributable cash flow is a non-GAAP financial measure used by       
      certain investors to measure the financial performance of the         
      Partnership and other master limited partnerships. Please see Appendix
      B for a reconciliation of this non-GAAP measure to the most directly  
      comparable financial measure under United States generally accepted   
      accounting principles (GAAP).                                         

 
Teekay LNG's Fleet 
The following table summarizes the Partnership's fleet as of November
1, 2012:  


 
----------------------------------------------------------------------------
                                                          Number of Vessels 
                                      ------------------------------------- 
LNG Carrier Fleet                                                     27 (i)
LPG/Multigas Carrier Fleet                                            5 (ii)
Conventional Tanker Fleet                                                11 
----------------------------------------------------------------------------
Total                                                                    43 
----------------------------------------------------------------------------
                                                                            
(i)   The Partnership's ownership interests in these vessels ranges from 33 
      percent to 100 percent.                                               
(ii)  The Partnership has a 99 percent ownership interest in these vessels. 

 
Financial Summary 
The Partnership reported adjusted net income attributable to the
partners(1) (as detailed in Appendix A to this release) of $41.7
million for the quarter ended September 30, 2012, compared to $29.7
million for the same period of the prior year. Adjusted net income
attributable to the partners excludes a number of specific items that
had the net effect of decreasing net income by $8.6 million and $2.0
million for the three months ended September 30, 2012 and 2011,
respectively, as detailed in Appendix A. Including these items, the
Partnership reported net income attributable to the partners, on a
GAAP basis, of $33.1 million and $27.6 million for the three months
ended September 30, 2012 and 2011, respectively.  
For the nine months ended September 30, 2012, the Partnership
reported adjusted net income attributable to the partners(1) (as
detailed in Appendix A to this release) of $117.8 million, compared
to $79.1 million for the same period of the prior year. Adjusted net
income attributable to the partners excludes a number of specific
items that had the net effect of decreasing net income by $22.3
million and $29.6 million for the nine months ended September 30,
2012 and 2011, respectively, as detailed in Appendix A. Including
these items, the Partnership reported net income attributable to the
partners, on a GAAP basis, of $95.5 million and $49.5 million for the
nine months ended September 30, 2012 and 2011, respectively. 
For accounting purposes, the Partnership is required to recognize the
changes in the fair value of its derivative instruments on its
consolidated statements of income. This method of accounting does not
affect the Partnership's cash flows or the calculation of
distributable cash flow, but results in the recognition of unrealized
gains or losses on the consolidated statements of income as detailed
in footnotes 1 and 2 to the Summary Consolidated Statements of Income
included in this release.  


 
(1)   Adjusted net income attributable to the partners is a non-GAAP        
      financial measure.Please refer to Appendix A to this release for a    
      reconciliation of this non-GAAP measure to the most directly          
      comparable financial measure under GAAP and information about specific
      items affecting net income which are typically excluded by securities 
      analysts in their published estimates of the Partnership's financial  
      results.                                                              

 
Operating Results 
The following table highlights certain financial information for
Teekay LNG's two segments: the Liquefied Gas segment and the
Conventional Tanker segment (please refer to the "Teekay LNG's Fleet"
section of this release above and Appendix C for further details).  


 
----------------------------------------------------------------------------
                         Three Months Ended          Three Months Ended     
                         September 30, 2012          September 30, 2011     
                             (unaudited)                 (unaudited)        
                    --------------------------------------------------------
                                 Conven-                     Conven-        
                     Liquefied    tional         Liquefied    tional
(in thousands of           Gas    Tanker               Gas    Tanker        
 U.S. Dollars)         Segment   Segment   Total   Segment   Segment   Total
----------------------------------------------------------------------------
Net voyage                                                                  
 revenues(i)            69,630    28,233  97,863    68,921    28,028  96,949
Vessel operating                                                            
 expenses               11,477    10,515  21,992    11,803    10,563  22,366
Depreciation and                                                            
 amortization           17,158     7,412  24,570    15,689     7,343  23,032
----------------------------------------------------------------------------
CFVO from                                                                   
 consolidated                                                               
 vessels(ii)            55,733    15,445  71,178    56,019    14,383  70,402
CFVO from equity                                                            
 accounted                                                                  
 vessels(ii)(iii)       40,550         -  40,550    15,202         -  15,202
Total CFVO(ii)          96,283    15,445 111,728    71,221    14,383  85,604
----------------------------------------------------------------------------
                                                                            
(i)   Net voyage revenues represents voyage revenues less voyage expenses,  
      which comprise all expenses relating to certain voyages, including    
      bunker fuel expenses, port fees, canal tolls and brokerage            
      commissions. Net voyage revenues is a non-GAAP financial measure used 
      by certain investors to measure the financial performance of shipping 
      companies. Please see the Partnership's website at                    
      http://www.teekaylng.com/ for a reconciliation of this non-GAAP       
      measure as used in this release to the most directly comparable GAAP  
      financial measure.                                                    
(ii)  Cash flow from vessel operations (CFVO) represents income from vessel 
      operations before (a) depreciation and amortization expense, (b)      
      amortization of in-process revenue contracts and (c) adjusting for    
      direct financing leases to a cash basis. CFVO is included because     
      certain investors use this data to measure a company's financial      
      performance. CFVO is not required by GAAP and should not be considered
      as an alternative to net income, equity income or any other indicator 
      of the Partnership's performance required by GAAP. Please see the     
      Partnership's website at http://www.teekaylng.com/ for a              
      reconciliation of this non-GAAP measure as used in this release to the
      most directly comparable GAAP financial measure.                      
(iii) The Partnership's equity accounted investments for the three months   
      ended September 30, 2012 and 2011 include the Partnership's 40 percent
      interest in Teekay Nakilat (III) Corporation, which owns four LNG     
      carriers; the Partnership's 50 percent interest in the Excalibur and  
      Excelsior Joint Ventures, which owns one LNG carrier and one          
      regasification unit; and the Partnership's 33 percent interest in one 
      LNG carrier that was delivered in August 2011 servicing the Angola LNG
      Project. The Partnership's equity accounted investment for the three  
      months ended September 30, 2012 also includes the Partnership's 33    
      percent interest in three other LNG carriers that were delivered in   
      late 2011 through early 2012 servicing the Angola LNG Project; and the
      Partnership's 52 percent interest in MALT LNG Holdings ApS, the joint 
      venture between the Partnership and Maurbeni Corporation, which       
      acquired six LNG carriers on February 28, 2012.                       

 
Liquefied Gas Segment 
Cash flow from vessel operations from the Partnership's Liquefied Gas
segment, excluding equity-accounted vessels, was virtually unchanged
at $55.7 million in the third quarter of 2012 compared to $56.0
million in the same quarter of the prior year. 
Cash flow from vessel operations from the Partnership's
equity-accounted vessels in the Liquefied Gas segment increased
significantly to $40.6 million in the third quarter of 2012 from
$15.2 million in the same quarter of the prior year. This increase
was primarily due to the Teekay LNG-Marubeni joint venture's
acquisition of six LNG carriers from A.P. Moller Maersk A/P (the MALT
LNG Carriers) in February 2012 and the acquisition of a 33 percent
interest in the four Angola LNG Carriers from Teekay Corporation
between August 2011 and January 2012.  
Conventional Tanker Segment 
Cash flow from vessel operations from the Partnership's Conventional
Tanker segment increased to $15.4 million in the third quarter of
2012 from $14.4 million in the same quarter of the prior year,
primarily as a result of lower general and administrative expenses in
the Conventional Tanker segment. 
Liquidity 
As of September 30, 2012, the Partnership had total liquidity of
$558.9 million (comprised of $91.9 million in cash and cash
equivalents and $467.0 million in undrawn credit facilities),
compared to total liquidity of $402.9 million as of June 30, 2012.
The increase in the Partnership's liquidity balance is primarily due
to the $182.2 million of net proceeds from the follow-on equity
offering completed September 2012. 
Conference Call 
The Partnership plans to host a conference call on Friday, November
9, 2012 at 11:00 a.m. (ET) to discuss the results for the third
quarter of 2012. All unitholders and interested parties are invited
to listen to the live conference call by choosing from the following
options: 


 
--  By dialing (866) 322-2356 or (416) 640-3405, if outside North America,
    and quoting conference ID code 7467466. 
    
--  By accessing the webcast, which will be available on Teekay LNG's
    website at www.teekaylng.com (the archive will remain on the web site
    for a period of 30 days). 

 
A supporting Third Quarter 2012 Earnings Presentation will also be
available at www.teekaylng.com in advance of the conference call
start time.  
The conference call will be recorded and made available until Friday,
November 16, 2012. This recording can be accessed following the live
call by dialing (888) 203-1112 or (647) 436-0148, if outside North
America, and entering access code 7467466.  
About Teekay LNG Partners L.P. 
Teekay LNG Partners is the world's third largest independent owner
and operator of LNG vessels, providing LNG, LPG and crude oil marine
transportation services primarily under long-term, fixed-rate charter
contracts with major energy and utility companies through its
interests in 27 LNG carriers (including one LNG regasification unit),
five LPG/Multigas carriers and 11 conventional tankers. The
Partnership's ownership interests in these vessels range from 33 to
100 percent. Teekay LNG Partners L.P. is a publicly-traded master
limited partnership (MLP) formed by Teekay Corporation (NYSE: TK) as
part of its strategy to expand its operations in the LNG and LPG
shipping sectors. 
Teekay LNG Partners' common units trade on the New York Stock
Exchange under the symbol "TGP". 


 
TEEKAY LNG PARTNERS L.P.                                                    
SUMMARY CONSOLIDATED STATEMENTS OF INCOME                                   
(in thousands of U.S. Dollars, except units outstanding)                    
                                                                            
                         Three Months Ended            Nine Months Ended    
                  September               September   September   September
                        30,    June 30,         30,         30,         30, 
                       2012        2012        2011        2012        2011 
                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
VOYAGE REVENUES      98,723      96,354      97,256     294,293     282,722 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
OPERATING                                                                   
 EXPENSES                                                                   
Voyage expenses         860         242         307       1,445       1,362 
Vessel operating                                                            
 expenses            21,992      20,104      22,366      62,627      66,561 
Depreciation and                                                            
 amortization        24,570      24,673      23,032      73,876      67,552 
General and                                                                 
 administrative       6,254       6,506       5,804      19,876      18,665 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                     53,676      51,525      51,509     157,824     154,140 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from                                                                 
 vessel                                                                     
 operations          45,047      44,829      45,747     136,469     128,582 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
OTHER ITEMS                                                                 
Equity income(1)     21,098      11,086         891      49,232      12,395 
Interest expense    (14,414)    (13,734)    (12,129)    (40,946)    (36,019)
Interest income         850         949       1,576       2,731       4,852 
Realized and                                                                
 unrealized loss                                                            
 on derivative                                                              
 instruments(2)      (9,945)    (18,145)    (37,690)    (43,993)    (54,250)
Foreign exchange                                                            
 (loss) gain(3)      (6,248)     13,927      29,480      (1,989)       (412)
Other (expense)                                                             
 income - net          (305)        348         309         518        (916)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income           36,083      39,260      28,184     102,022      54,232 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income attributable to:                                                
  Non-controlling                                                          
   interest           3,022       1,572         535       6,542       4,731 
  Partners           33,061      37,688      27,649      95,480      49,501 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Limited partners' units outstanding:                                   
Weighted-average number of                                           
 common and total units                                                
 outstanding -                                                              
 basic and                                                                  
 diluted         65,882,450  64,857,900  59,357,900  65,201,910  57,887,847 
Total number of                                                             
 units outstanding at                                                 
 end of period   69,683,763  64,857,900  59,357,900  69,683,763  59,357,900 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)   Equity income includes unrealized gains (losses) on derivative        
      instruments as detailed in the table below.                           
                                                                            
                                                                            
                                Three Months Ended       Nine Months Ended  
                          --------------------------------------------------
                          September  June 30, September September September 
                           30, 2012      2012  30, 2011  30, 2012  30, 2011 
                          --------------------------------------------------
Equity income                21,098    11,086       891    49,232    12,395 
Proportionate share of                                                      
 unrealized losses on                                                       
 derivative instruments                                                     
 included in equity income     (870)   (8,242)   (5,513)   (4,051)   (6,113)
                          --------------------------------------------------
Equity income excluding                                                     
 unrealized losses                                                          
 onderivative instruments    21,968    19,328     6,404    53,283    18,508 
                          --------------------------------------------------
                                                                            
(2)   The realized losses relate to the amounts the Partnership actually    
      paid to settle derivative instruments and the unrealized (losses)     
      gains relate to the change in fair value of such derivative           
      instruments as detailed in the table below.                           
                                                                            
                                                                            
                                Three Months Ended       Nine Months Ended  
                          --------------------------------------------------
                          September  June 30, September September September 
                           30, 2012      2012  30, 2011  30, 2012  30, 2011 
                          --------------------------------------------------
Realized (losses) relating to:                                              
Interest rate swaps          (9,450)   (9,284)  (10,022)  (27,813)  (30,305)
Toledo Spirit time-charter                                                  
 derivative contract              -        (6)        -       (38)      (53)
                          --------------------------------------------------
                             (9,450)   (9,290)  (10,022)  (27,851)  (30,358)
                          --------------------------------------------------
                                                                            
Unrealized (losses) gains                                                   
 relating to:                                                               
Interest rate swaps            (295)   (8,855)  (29,268)  (16,242)  (25,892)
Toledo Spirit time-charter                                                  
 derivative contract           (200)        -     1,600       100     2,000 
                          --------------------------------------------------
                               (495)   (8,855)  (27,668)  (16,142)  (23,892)
                          --------------------------------------------------
Total realized and                                                          
 unrealized losses                                                          
 derivative instruments      (9,945)  (18,145)  (37,690)  (43,993)  (54,250)
                          --------------------------------------------------
                                                                            
(3)   For accounting purposes, the Partnership is required to revalue all   
      foreign currency-denominated monetary assets and liabilities based on 
      the prevailing exchange rate 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 exchange (loss) gain includes realized gains relating to the
      amounts the Partnership received to settle the Partnership's non-
      designated cross currency swap that was entered into as an economic
      hedge in relation to the Partnership's Norwegian Kroner (NOK)-
      denominated unsecured bonds. The Partnership issued NOK 700 million 
      unsecured bonds in May 2012 maturing in 2017. Foreign exchange (loss)
      gain also includes unrealized gains (losses) relating to the change
      in fair value of such derivative instruments, partially offset by
      unrealized gains (losses) on the revaluation of the NOK bonds as
      detailed in the table below:
 
                                 Three Months Ended       Nine Months Ended 
                           -------------------------------------------------
                           September  June 30, September September September
                            30, 2012      2012  30, 2011  30, 2012  30, 2011
                           -------------------------------------------------
                                                                            
Realized gains on cross-                                                    
 currency swaps                  107        48         -       155         -
Unrealized gains (losses)                                                   
 on cross-currency swaps       3,077   (10,270)        -    (7,193)        -
Unrealized (losses) gains                                                   
 on revaluation of NOK                                                      
 bonds                        (4,828)    7,560         -     2,732         -
                                                                            
                                                                            
TEEKAY LNG PARTNERS L.P.                                                    
SUMMARY CONSOLIDATED BALANCE SHEETS                                         
(in thousands of U.S. Dollars)                                              
                                                                            
                                         As at          As at          As at
                                 September 30,       June 30,   December 31,
                               ---------------------------------------------
                                          2012           2012           2011
                               ---------------------------------------------
                                   (unaudited)    (unaudited)    (unaudited)
                               ---------------------------------------------
ASSETS                                                                      
Cash and cash equivalents               91,931        114,916         93,627
Restricted cash - current               31,361              -              -
Other current assets                    19,327         15,783         18,837
Advances to affiliates                   3,338         24,362         11,922
Restricted cash - long-term            496,309        526,705        495,634
Vessels and equipment                1,960,756      1,980,370      2,021,125
Net investments in direct                                                   
 financing leases                      404,981        406,549        409,541
Derivative assets                      167,638        162,472        155,259
Investments in and advances to                                              
 equity accounted joint                                                     
 ventures                              388,722        374,320        191,448
Other assets                            37,668         39,387         34,760
Intangible assets                      107,568        109,851        114,416
Goodwill                                35,631         35,631         35,631
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total Assets                         3,745,230      3,790,346      3,582,200
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY                                                      
Accounts payable, accrued                                                   
 liabilities andunearned                                                    
 revenue                                46,019         53,131         60,030
Current portion of long-term                                                
 debt and capital leases               253,791        255,748        131,925
Advances from affiliates and                                                
 joint venture partners                 11,072         27,288         17,400
Long-term debt and capital                                                  
 leases                              1,730,220      1,920,250      1,830,353
Derivative liabilities                 328,930        326,347        293,218
Other long-term liabilities            105,147        106,231        109,565
Equity                                                                      
Non-controlling interest(1)             32,434         29,712         26,242
Partners' equity                     1,237,617      1,071,639      1,113,467
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total Liabilities and Total                                                 
 Equity                              3,745,230      3,790,346      3,582,200
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1)   Non-controlling interest includes a 30 percent equity interest in the 
      RasGas II project (which owns three LNG carriers), a 31 percent equity
      interest in the Tangguh Project (which owns two LNG carriers), a 1    
      percent equity interest in the two Kenai LNG carriers, a 1 percent    
      equity interest in the Excalibur joint venture (which owns one LNG    
      carrier), and a 1 percent equity interest in the five LPG/Multigas    
      carriers, which in each case the Partnership does not own.            
                                                                            
                                                                            
TEEKAY LNG PARTNERS L.P.                                                    
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS                               
(in thousands of U.S. Dollars)                                              
                                                                            
                                                          Nine Months Ended 
                                                              September 30, 
                                                  --------------------------
                                                          2012         2011 
                                                  --------------------------
Cash and cash equivalents provided by (used for)   (unaudited)  (unaudited) 
                                                  --------------------------
OPERATING ACTIVITIES                                                        
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net operating cash flow                                134,401      134,172 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
FINANCING ACTIVITIES                                                        
Proceeds from issuance of long-term debt               419,221      219,401 
Debt issuance costs                                     (2,025)           - 
Scheduled repayments of long-term debt                 (60,647)     (54,563)
Prepayments of long-term debt                         (324,274)    (173,000)
Scheduled repayments of capital lease obligations                           
 and other long-term liabilities                        (7,590)      (7,502)
Proceeds from equity offering, net of offering                              
 costs                                                 182,214      161,655 
Advances to and from affiliates                              -        1,596 
Increase in restricted cash                            (30,845)      (3,381)
Cash distributions paid                               (142,939)    (118,809)
Purchase of Skaugen Multigas Subsidiary                      -      (55,313)
Proceeds on sale of 1% interest in Skaugen LPG                              
 Carriers and Skaugen Multigas Subsidiaries                  -        1,220 
Advances to joint venture partners                      (3,600)           - 
Other                                                     (350)        (260)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net financing cash flow                                 29,165      (28,956)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INVESTING ACTIVITIES                                                        
Purchase of equity investment in MALT LNG Carriers    (150,999)           - 
Purchase of equity investment in Angola LNG                                 
 Carriers                                              (19,068)     (38,447)
Receipts from direct financing leases                    4,561        4,536 
Expenditures for vessels and equipment                  (1,125)     (50,861)
Repayments from joint venture                              830            - 
Other                                                      539            - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net investing cash flow                               (165,262)     (84,772)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents        (1,696)      20,444 
Cash and cash equivalents, beginning of the period      93,627       81,055 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents, end of the period            91,931      101,499 
----------------------------------------------------------------------------
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TEEKAY LNG PARTNERS L.P.                                                    
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME                            
(in thousands of U.S. Dollars)                                              

 
Set forth below is a reconciliation of the Partnership's unaudited
adjusted net income attributable to the partners, a non-GAAP
financial measure, to net income attributable to the partners as
determined in accordance with GAAP. The Partnership believes that, in
addition to conventional measures prepared in accordance with GAAP,
certain investors use this information to evaluate the Partnership's
financial performance. The items below are also typically excluded by
securities analysts in their published estimates of the Partnership's
financial results. Adjusted net income attributable to the partners
is intended to provide additional information and should not be
considered a substitute for measures of performance prepared in
accordance with GAAP. 


 
----------------------------------------------------------------------------
                                 Three Months Ended       Nine Months Ended 
                              September   September   September   September 
                                    30,         30,         30,         30, 
                                   2012        2011        2012        2011 
                            (unaudited) (unaudited) (unaudited) (unaudited) 
----------------------------------------------------------------------------
Net income - GAAP basis          36,083      28,184     102,022      54,232 
Less:                                                                       
  Net income attributable to                                                
   non-controlling interest      (3,022)       (535)     (6,542)     (4,731)
----------------------------------------------------------------------------
Net income attributable to                                                  
 the partners                    33,061      27,649      95,480      49,501 
Add (subtract) specific                                                     
 items affecting net income:                                                
  Unrealized foreign                                                        
   exchange loss (gain)(1)        6,124     (29,480)      1,913         412 
  Unrealized losses from                                                    
   derivative instruments(2)        495      27,668      16,142      23,892 
  Unrealized losses from                                                    
   derivative instruments                                                   
   and other items from                                                     
   equity accounted                                                         
   investees(3)                   1,139       5,513       5,128       6,113 
  Other items(4)                      -           -           -         949 
  Non-controlling interests'                                                
   share of items above             865      (1,693)       (847)     (1,763)
----------------------------------------------------------------------------
Total adjustments                 8,623       2,008      22,336      29,603 
----------------------------------------------------------------------------
Adjusted net income                                                         
 attributable to the                                                        
 partners                        41,684      29,657     117,816      79,104 
----------------------------------------------------------------------------
                                                                            
(1)   Foreign exchange losses 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 gain (loss) on the cross-currency swap
      economically hedging the Partnership's NOK bonds and exclude the      
      realized gains relating to the cross currency swap for the NOK bonds. 
(2)   Reflects the unrealized gain or loss due to changes in the mark-to-   
      market value of interest rate derivative instruments that are not     
      designated as hedges for accounting purposes.                         
(3)   Reflects the unrealized gain or loss due to changes in the mark-to-   
      market value of derivative instruments that are not designated as     
      hedges for accounting purposes within the Partnership's equity-       
      accounted investments and $0.3 million and $1.1 million of            
      acquisition-related costs during the three and nine months ended      
      September 30, 2012, respectively, relating to the acquisition of the  
      six MALT LNG Carriers.                                                
(4)   Amount for the nine months ended September 30, 2011 relates to a one- 
      time management fee associated with the portion of stock-based        
      compensation grants to Teekay Corporation's former President and Chief
      Executive Officer that had not yet vested prior to the date of his    
      retirement on March 31, 2011.                                         
                                                                            
                                                                            
TEEKAY LNG PARTNERS L.P.                                                    
APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE                   
(in thousands of U.S. Dollars)                                              

 
Description of Non-GAAP Financial Measure - Distributable Cash Flow
(DCF) 
Distributable cash flow represents net income adjusted for
depreciation and amortization expense, non-cash items, estimated
maintenance capital expenditures, unrealized gains and losses from
derivatives, deferred income taxes and foreign exchange related
items. 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. Distributable cash flow is a quantitative standard used in
the publicly-traded partnership investment community to assist in
evaluating a partnership's ability to make quarterly cash
distributions. Distributable cash flow is not required by GAAP and
should not be considered as an alternative to net income or any other
indicator of the Partnership's performance required by GAAP. The
table below reconciles distributable cash flow to net income. 


 
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                                                  Three Months Three Months 
                                                         Ended        Ended 
                                                     September    September 
                                                      30, 2012     30, 2011 
                                                   (unaudited)  (unaudited) 
----------------------------------------------------------------------------
Net income:                                             36,083       28,184 
Add:                                                                        
  Depreciation and amortization                         24,570       23,032 
  Partnership's share of equity accounted joint                             
   ventures' DCF before estimated maintenance                               
   capital expenditures                                 29,597        9,658 
  Unrealized loss on derivatives and other non-                             
   cash items                                              685       28,891 
Less:                                                                       
  Estimated maintenance capital expenditures           (14,345)     (11,471)
  Unrealized foreign exchange loss (gain)                6,124      (29,480)
  Equity income                                        (21,098)        (891)
  Non-cash tax expense (recovery)                          224         (454)
----------------------------------------------------------------------------
Distributable Cash Flow before Non-controlling                              
 interest                                               61,840       47,469 
Non-controlling interests' share of DCF before                              
 estimated maintenance capital expenditures             (3,991)      (3,793)
----------------------------------------------------------------------------
Distributable Cash Flow                                 57,849       43,676 
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TEEKAY LNG PARTNERS L.P.                                                    
APPENDIX C - SUPPLEMENTAL SEGMENT INFORMATION                               
(in thousands of U.S. Dollars)                                              
                                                                            
                                   Three Months Ended September 30, 2012    
                               ---------------------------------------------
                                                (unaudited)                 
                                                 Conventional               
                                 Liquefied Gas         Tanker               
                                       Segment        Segment          Total
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Net voyage revenues(1)                  69,630         28,233         97,863
Vessel operating expenses               11,477         10,515         21,992
Depreciation and amortization           17,158          7,412         24,570
General and administrative               3,981          2,273          6,254
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Income from vessel operations           37,014          8,033         45,047
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                                   Three Months Ended September 30, 2011    
                               ---------------------------------------------
                                                (unaudited)                 
                                                 Conventional               
                                 Liquefied Gas         Tanker               
                                       Segment        Segment          Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage revenues(1)                  68,921         28,028         96,949
Vessel operating expenses               11,803         10,563         22,366
Depreciation and amortization           15,689          7,343         23,032
General and administrative               2,722          3,082          5,804
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations           38,707          7,040         45,747
----------------------------------------------------------------------------
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(1)   Net voyage revenues represents voyage revenues less voyage expenses,  
      which comprise all expenses relating to certain voyages, including    
      bunker fuel expenses, port fees, canal tolls and brokerage            
      commissions. Net voyage revenues is a non-GAAP financial measure used 
      by certain investors to measure the financial performance of shipping 
      companies. Please see the Partnership's website at                    
      http://www.teekaylng.com/ for a reconciliation of this non-GAAP       
      measure as used in this release to the most directly comparable GAAP  
      financial measure.                                                    

 
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 regarding: future growth
opportunities, including current bidding activity by the Partnership
on potential LNG and floating storage and regasification projects and
anticipated start-up timing of those projects; LNG shipping market
fundamentals, including the balance of supply and demand of LNG
shipping capacity and LNG shipping charter rates; the stability of
the Partnership's cash flows; the Partnership's financial position,
including available liquidity; and the Partnership's ability to
secure additional accretive growth opportunities. 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: availability of LNG shipping, floating storage,
regasification and other growth project opportunities; 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; the Partnership's ability to
secure new contracts through bidding on project tenders and/or
acquire existing on-the-water assets; 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 Teekay LNG fleet and inability
of the Partnership to renew or replace long-term contracts; the
Partnership's ability to raise financing to purchase additional
vessels or to pursue other projects; changes to the amount or
proportion of revenues, expenses, or debt service costs denominated
in foreign currencies; competitive dynamics in bidding for potential
LNG or LPG projects; 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, 2011. 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. 
Contacts:
Teekay LNG Partners L.P.
Kent Alekson
Investor Relations Enquiries
+1 (604) 609-6442
www.teekaylng.com
 
 
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