Golar LNG Partners: Preliminary Fourth Quarter and Financial Year 2012 Results

Golar LNG Partners: Preliminary Fourth Quarter and Financial Year 2012 Results 
HAMILTON, BERMUDA -- (Marketwire) -- 02/28/13 --   
Highlights 
-    Golar  LNG Partners reports  net income attributable  to unit
holders of $27.3  million and operating income  of $46.0 million for 
the fourth quarter of 2012 
-        Generated  distributable cash flow  of $22.4 million  for
the fourth quarter of 2012 
-     Distribution increased to $0.50 per unit for the fourth
quarter of 2012 
-        Completed   second   follow-on  offering  raising  net
proceeds  of approximately $180 million 
-        Completion of  acquisition of interests in  the companies
that lease and operate the LNG carrier Golar Grand 
-       Issued and  listed NOK  1,300 million bonds  in the
Norwegian market (approximately  $227 million)  and  repaid  $222
million  vendor loan from Golar
LNG Limited in respect of the Golar
Freeze acquisition 
-       The $155 million vendor loan from Golar LNG Limited in
respect of the Nusantara  Regas Satu ("NR Satu") acquisition is
repaid following the successful
completion of the NR Satu refinancing 
Subsequent events 
-          Increase  in  distribution  announced  following the
completion of acquisition  of  interest  in  the  company  that  owns
 and  operates  the LNG
carrier Golar Maria 
-       Completed third follow-on equity  offering raising total
net proceeds of approximately $130 million 
Financial Results Overview 
Golar LNG Partners LP ("Golar Partners" or the "Partnership") reports
net income
attributable  to unit  holders of  $27.3 million  and
operating  income of $46.0
million  for the fourth  quarter of 2012
("the  fourth quarter"), as compared to net income attributable to
unit holders of $25.2 million and operating profit of $35.5 million
for the fourth quarter of 2011(1). 
(1)Following  the acquisition  of the  Golar Grand  and NR  Satu from
Golar, the comparative  results for the fourth quarter  and year
ended 2011 assume that the Golar  Grand and  NR Satu  were wholly 
owned by  the Partnership for the entire
period that the vessels have
been under the common control of Golar. 
As  required by US GAAP,
following the acquisition of the LNG carrier, the Golar
Grand  from
Golar  LNG Limited  ("Golar" or  "Golar LNG"),  the results for the
fourth  quarter and year ended December 31, 2012 and comparative
numbers for the fourth  quarter and year ended December 31, 2011
assume that the Golar Grand was wholly  owned by the Partnership for
the  entire period that the vessel has been
under  the  common 
control  of  Golar.  These  results  therefore  include
the
historical carved out results of the Golar Grand. 
There  was a significant improvement in operating results for the
fourth quarter
of  2012 compared to the same period in  2011 due
largely to the contribution of the  NR Satu.  This is  because the 
NR Satu  was on  hire throughout the fourth
quarter  of 2012 but was
undergoing its conversion  to an FSRU during the fourth
quarter  of
2011 and, therefore,  not generating revenues.  The Golar Spirit was
offhire  from  December  11, 2012, as  planned,  when  the  vessel
commenced its transit  to  its  first  drydock  as  an  FSRU.
Operating results for the fourth
quarter  have therefore been
negatively impacted  by this offhire time for Golar
Spirit  and the
related fuel costs.   All other vessels operated well throughout
the
quarter with 100 per cent utilization. 
Total  offhire time for
Golar Spirit drydock is now expected to be approximately
eleven 
weeks. This is not however, expected  to be indicative of future
drydock
offhire  time. The  Golar Mazo  is planned  to drydock  at
the  beginning of the second quarter of 2013 but no offhire time is
expected due to the time allowance
for  drydocking provided  by the 
charter. The  Methane Princess  is expected to drydock  towards the 
end of  the second  quarter of 2013 and approximately 3-4
weeks
offhire time is expected. 
Towards  the end of  the first quarter 
of 2013 the Golar  Winter is expected to commence  its drydock and
agreed modification  work. Golar Winter is expected to be  offhire
for a total of approximately six weeks commencing March/April
2013.
Following  the completion of the agreed modification work to
Golar Winter, Golar
Partners  will receive  approximately $24 
million in  additional revenue evenly
over  the remaining term of the
contract  (eleven years) commencing in the third
quarter of 2013.
This is before the effect of rate escalation as provided for in the
time charter. 
Net interest expenses increased to $10.7 million for
the fourth quarter of 2012
compared to $6.8 million for the same
period in 2011. This is principally due to additional  interest cost
associated with the  vendor loan from Golar in respect
of  the NR
Satu. During the fourth  quarter, the Partnership entered into a
$155
million  term loan  facility and  a $20  million revolving  loan
facility with a group  of banks and repaid the vendor loan in respect
of the NR Satu in December
2012. 
Other  financial items loss  for the fourth  quarter of 2012 of  $0.5
million is consistent with the loss of $0.5 million for the fourth
quarter of 2011. 
The  Partnership's Distributable Cash Flow(2) for the fourth quarter
of 2012 was $22.4  million as compared to $25.2 million  in the third
quarter of 2012. These
amounts  are after adjustments to remove
dropdown vessels results prior to their
actual  acquisition date. 
The reduction  is due  to offhire  time and fuel cost
related  to the
Golar Spirit drydocking in  the fourth quarter as well as
higher
average  operating costs in  the fourth quarter.  This is
offset  in part by the contribution of the Golar Grand from November
8, 2012. 
On January 23, 2013, Golar Partners declared an increased
distribution for the
fourth quarter of $0.50 per unit. This
represented a 5.3% increase from the third quarter of 2012 and
reflected the full accretive value of the acquisition
of the Golar
Grand. The dividend was paid on February 14, 2013. 
(2)Distributable cash flow is a non-GAAP financial measure used by
investors to measure the performance of master limited partnerships.
Please see Appendix A
for a reconciliation to the most directly
comparable GAAP financial measure. 
Follow-on Equity Offerings 
In November 2012, the Partnership completed its second follow-on
equity offering
selling   a  total  of  4,300,000 common  units, 
representing  limited partner
interests,  at a price of $30.50 per
common unit. In addition, Golar GP LLC, the Partnership's  general
partner,  contributed approximately  $3.6 million to the Partnership 
to maintain its  2.0% general partner interest  in the
Partnership.
Simultaneously,  the Partnership also  closed a private 
placement of 1,524,590
common  units to Golar at  a price of $30.50 
per common unit. The Partnership's
total combined net proceeds
amounted to approximately $180 million. 
Subsequent  to the quarter
end, in  February 2013, the Partnership completed its third follow-on
offering selling a total of 3,900,000 common units,
representing
limited  partner interests,  at a  price of  29.74 per
common unit. In addition,
Golar  GP LLC, the Partnership's general
partner, contributed approximately $2.6
million  to the Partnership
to maintain its 2.0% general partner interest in the Partnership. 
Simultaneously, the Partnership also closed a private placement of
416,947 common  units  to  Golar  at  a  pri
ce  of  $29.74  per
common unit. The Partnership's  total  combined  net  proceeds 
amounted  to  approximately $130
million. 
Acquisitions LNG carrier Golar Grand 
In  November 2012, the Partnership completed the acquisition of
interests in the companies  that lease  and operate  the LNG  carrier
Golar  Grand for a purchase
price  of  $265  million.  In  connection
 with the acquisition, the Partnership
assumed  a  $90  million 
finance  lease  liability  (net of restricted cash) in respect  of
the Golar Grand with the  balance of the purchase price funded
using
the  proceeds of its second  follow-on equity offering. The 
Golar Grand is on a three  year  charter  to  Methane  Services 
Limited  ("MSL"),  a  wholly owned
subsidiary  of BG Group.  MSL have
an  option to extend  the charter term for an additional  three 
years.  The  Partnership  have  also  entered  into an
Option
Agreement  pursuant to which the Partnership has the right to
cause Golar LNG to charter the vessel from March 2015 until October
2017, in the event MSL does not exercise  the option to extend.  The 
Partnership estimates that the Golar Grand
acquisition  will  give 
rise  to  annual  revenues  between $42 million and $44 million  and
annual net  cash from operations  (before the deduction of
interest
costs)  between $36 million and $38 million  during the term
of its charter with
Methane Services Limited. 
LNG carrier Golar
Maria 
In February 2013, the Partnership completed its acquisition of
interests in the company  that owns and operates the LNG carrier, the
Golar Maria, from Golar LNG for  a purchase  price of  $215 million. 
The Golar  Maria was  delivered to its current  charterer, LNG 
Shipping S.p.A.  ("LNG Shipping"),  a subsidiary of Eni S.p.A in
November 2012 under a charter with an initial term expiring in
December
2017. The acquisition  is  expected  to  generate  annual 
revenues between $28 million  and  $29  million  and  annual  net 
cash  from  operations (before the deduction of interest costs)
between $22 million and $24 million during the term
of its charter
with LNG Shipping. 
The Partnership financed the acquisition of the
Golar Maria by assuming the debt
on  the vessel amounting to
approximately $89 million and the remainder from the net proceeds of
its equity offering that completed in February 2013. 
Financing and
Liquidity 
Bond issuance for NOK 1,300 million 
In  September 2012, the Partnership successfully completed the
issuance of a NOK 1,300 million bond  in the Norwegian bond market
with maturity expected to be on October  12, 2017. The aggregate net
principal amount of the bonds is equivalent
to  approximately USD 
227 million and  has been  swapped to  US dollars, with a fixed
interest rate of 6.485%. Golar Partners listed the bonds on the Oslo
Stock
Exchange in December 2012. 
Subsequent  to the issuance of the  bonds, in October 2012, the
Partnership used
some  of the net proceeds to repay the  vendor loan
from Golar of $222.3 million
in respect of the Golar Freeze
acquisition. 
NR Satu Debt Financing 
In  December 2012, PT Golar  Indonesia, the company  that owns and
operates the FSRU,  NR Satu, entered into a 7 year  secured loan
facility. The total facility
is  $175  million  and  is  split  into 
two  tranches, a $155 million term loan
facility  and a $20 million
revolving facility. The facility is with a syndicate
of  banks and
bears interest at LIBOR plus  a margin. The facility has a
balloon
payment of $52.5 million payable after 7 years. 
Immediately  after the closing of the NR Satu facility, the
Partnership used the proceeds  to repay the vendor loan from Golar  of
$155 million in respect of the NR Satu acquisition. The $20 million
revolving tranche remains undrawn. 
In  February 2013, the
Partnership  entered into interest  rate swaps to fix the LIBOR 
interest rate on a principal amount  of $122.5 million in connection
with
the NR Satu financing at an average rate of 1.27%. 
Liquidity
Position 
As  of December 31, 2012 the Partnership had cash and cash
equivalents of $66.3
million  and undrawn revolving credit facilities
 of $40 million. Total debt and capital  lease  obligations  net  of 
restricted  cash  was $930.4 million as of December 31, 2012. 
Based  on the above  debt amount and  annualized(3) fourth quarter
2012 adjusted
EBITDA(4 )Golar Partners has a debt to adjusted EBITDA
multiple of 3.9 times. 
As  of December 31, 2012, Golar Partners had interest rate swaps
with a notional
outstanding  value  of  $759.6  million  (including 
swaps of notional amount of $227.2   million  in  connection  with 
the  Partnership's  bonds) representing
approximately  81.6% of 
total  debt  and  capital  lease  obligations, net  of restricted 
cash. As noted above, subsequent to the quarter end, the
Partnership
swapped  an  additional  notional  amount  of  $122.5
million. The average fixed
interest  rate of swaps  related to bank 
debt and capital  lease obligations is approximately  2.5%. Average 
bank  margins  paid  on  outstanding  bank debt in addition  to  the 
interest  rate  are  approximately  1.84%. The all in rate of
interest payable on the Partnerships bonds is 6.485%. 
(3)Annualized means the figure for the quarter multiplied by 4. 
(4)Adjusted EBITDA: Earnings before interest, other financial items,
taxes, non-controlling interest, depreciation and amortization.
Adjusted EBITDA is a
non-GAAP financial measure used by investors to
measure our performance.  Please see Appendix A for a reconciliation
to the most directly comparable GAAP financial
measure. 
Outlook 
Since  Golar Partners IPO  in April 2011 quarterly  distributions
have increased
from  the minimum quarterly  distribution of $0.385 
per unit to  $0.475 as paid
prior to December 31, 2012. This
represents an increase of 23.4%. As a result of the  Golar Grand 
acquisition, Golar  Partners' has  further increased
quarterly
distributions   from   $0.475  per  unit  to  $0.50  per 
unit.  This increased
distribution,  representing a 5.3% increase,
was declared for the fourth quarter
of 2012 and paid in February
2013. 
Following  the  acquisition  of  the  Golar  Maria  the
Partnership's management
intends  to recommend  to the  Board an 
increase in the Partnership's quarterly
cash  distribution of between
$0.0125 and  $0.0175 (or an annualized increase of between $0.05 and
$0.07), which would become effective for the distribution
with
respect to the quarter ending March 31, 2013. If approved this
would result in a quarterly  distribution  level  of  between 
$0.5125 and $0.5175 representing an increase  of between 2.5% and
3.5% over the  $0.50 distribution paid in February
2013. 
The Board is pleased with the acquisition of the Golar Maria,
particularly as it is  further demonstration  of the  strong incentive
 of both the Partnership and Golar  to pursue further  drop-down
transactions. It  also maintains the pace of strong distribution
growth that the Partnership is highly focused on. 
First  quarter 
2013 operating  results  will  be  positively  impacted  by
the
acquisition  of the  Golar Maria  but will  also reflect  offhire
related to the Golar Spirit drydock and the likely commencement of the
Golar Winter drydock and modification  work.  The  rate  increase  in
 connection  with  the Golar Winter
modification work will commence
in the third quarter of 2013. 
Golar  has a  fleet of  eleven
newbuild  LNG carriers,  four of which deliver in 2013 and  two 
FSRU's,  one  of  which  delivers  in  2013. With  strong
market
fundamentals  and this fleet of potential drop-down vessels
that Golar owns, the Board  remains optimistic that Golar Partners 
can continue its high growth rate
and continue to increase
distributions over the long-term. 
February 28, 2013 
Golar LNG Partners L.P. 
Hamilton, Bermuda. 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Golar LNG Partners L.P. via Thomson Reuters ONE 
[HUG#1682086] 
Quest
ions should be directed to:
C/o Golar Management Ltd
+44 207 063 7900
Brian Tienzo or Graham Robjohns