Hoegh LNG Partners LP Reports Preliminary Financial Results for the Quarter Ended June 30, 2018
HAMILTON, Bermuda, Aug. 23, 2018 /PRNewswire/ -- Höegh LNG Partners LP (NYSE: HMLP) (the "Partnership") today reported its financial results for the quarter ended June 30, 2018.
Highlights
-- Reported total time charter revenues of $35.5 million for the second
quarter of 2018 compared to $35.0 million of time charter revenues for
the second quarter of 2017
-- Generated operating income of $28.9 million and net income of $19.9
million for the second quarter of 2018 compared to operating income of
$23.1 million and net income of $12.2 million for the second quarter of
2017; operating income and net income were impacted by unrealized gains
on derivative instruments on the Partnership's share of equity in
earnings of joint ventures for the second quarter of 2018 and 2017
-- Excluding the impact of the unrealized gains on derivative instruments
for the second quarter of 2018 and 2017 impacting the equity in earnings
of joint ventures, operating income for the three months ended June 30,
2018 would have been $25.9 million, an increase of $2.0 million from
$23.9 million for the three months ended June 30, 2017
-- Generated Segment EBITDA (1) of $36.9 million for the second quarter of
2018 compared to $29.6 million for the second quarter of 2017
-- On August 14, 2018, paid a $0.44 per unit distribution on the common and
subordinated units with respect to the second quarter of 2018,
equivalent to $1.76 per unit on an annualized basis
-- On August 15, 2018, paid a $0.546875 per unit distribution on the Series
A preferred units for the period commencing on May 15, 2018 to August
14, 2018, equivalent to $2.1875 per unit on an annual basis
Richard Tyrrell, Chief Executive Officer and Chief Financial Officer stated: "Höegh LNG Partners' assets all performed according to contract and at 100% availability in the second quarter, generating the highest quarterly Segment EBITDA and distributable cash flow achieved to date.
Our balance sheet strength puts the Partnership in a strong position to fund future growth following a period to rebuild the dropdown pipeline. Although competitive, FSRU tendering activity is high and the long-term, contracted nature of FSRU cash flows is attractive to the Partnership.
As new LNG volumes enter the market, customers are benefiting from the diverse sources of supply, attractive economics, the environmental benefits of gas and substantially reduced barriers to entry. Projects are developing accordingly and, with FSRUs being the fastest and most cost effective way to bring LNG to new markets, the Höegh LNG group is in a leading position to provide such critical energy infrastructure."
(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 $0.9 million for the three months ended June 30, 2018 and 2017, respectively, (ii) amortization in revenues for above market contracts of $0.9 million and $0.9 million for the three months ended June 30, 2018 and 2017, 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) non-cash revenue: tax paid directly by charterer of $(0.2) million and $(0.4) million for the three months ended June 30, 2018 and 2017, respectively, or (v) equity in earnings of JVs: amortization for deferred revenue of $(0.6) million and $(0.6) million for the three months ended June 30, 2018 and 2017, respectively.
Financial Results Overview
Effective January 1, 2018, the Partnership adopted the new accounting standard, Revenue from Contracts with Customers, which did not change the timing or amount of revenue recognized for the Partnership.
The Partnership reported net income of $19.9 million for the three months ended June 30, 2018, an increase of $7.7 million from net income of $12.2 million for the three months ended June 30, 2017. The net income for both periods was significantly impacted by unrealized gains on derivative instruments mainly on the Partnership's share of equity in earnings of joint ventures.
Excluding all of the unrealized gains on derivative instruments, net income for the three months ended June 30, 2018 would have been $16.4 million, an increase of $3.6 million from $12.8 million for the three months ended June 30, 2017. Excluding the unrealized gains on derivative instruments, the increase for the three months ended June 30, 2018 was primarily due to lower total financial expense, net, the one-off receipt of insurance proceeds related to prior periods expenses and lower total operating expenses for the three months ended June 30, 2018 compared with the three months ended June 30, 2017. The reduction in interest expense was due to the quarterly repayments of principal on the loan facilities financing the vessels and the repayment of the sellers' credit note, issued in connection with the acquisition of Höegh Gallant, between periods. The positive impact on interest expense of the repayment of the seller's credit note was partially offset by the increased outstanding balance on the revolving credit facility.
Preferred unitholders' interest in net income was $3.0 million for the three months ended June 30, 2018 due the issuance of Series A preferred units on October 5, 2017 and subsequently as part of our at-the-market ("ATM") program. Limited partners' interest in net income, which includes the Partnership's 100% interest in Höegh LNG Colombia Holding Ltd., the owner of the entities that own and operate the Höegh Grace (the "Höegh Grace entities") for the three months ended June 30, 2018, was $16.9 million. Limited partners' interest in net income for the three months ended June 30, 2017, which included the Partnership's 51% interest in the Höegh Grace entities, was $9.4 million for the three months ended June 30, 2017. Non-controlling interest in net income was $2.8 million for the three months ended June 30, 2017 for the 49% interest in the Höegh Grace entities not owned by the Partnership. On December 1, 2017, the Partnership acquired the remaining 49% ownership interest in the Höegh Grace entities and, as of that date, there was no longer a non-controlling interest in the Höegh Grace entities.
The PGN FSRU Lampung, the Höegh Gallant and the Höegh Grace were on-hire for the entire second quarter of 2018. During the three months ended June 30, 2017, the Höegh Gallant incurred 8 days of off-hire for scheduled maintenance and several days of reduced hire.
Equity in earnings of joint ventures was $5.1 million for the three months ended June 30, 2018, an increase of $3.5 million from equity in earnings of joint ventures of $1.6 million for the three months ended June 30, 2017. The joint ventures own the Neptune and the GDF Suez Cape Ann. Unrealized gains on derivative instruments in the joint ventures significantly impacted the equity in earnings of joint ventures for the three months ended June 30, 2018 and 2017. 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. Excluding the unrealized gains for the three months ended June 30, 2018 and 2017, the equity in earnings would have been $2.1 million for the three months ended June 30, 2018, a decrease of $0.2 million compared to equity in earnings of $2.3 million for the three months ended June 30, 2017. Excluding the unrealized gains, the decrease was mainly due to increased costs incurred in relation to a new project for the charterer related to the GDF Suez Cape Ann and higher maintenance expenses.
Operating income for the three months ended June 30, 2018 was $28.9 million, an increase of $5.8 million from $23.1 million for the three months ended June 30, 2017. Excluding the impact of the unrealized gain on derivative instruments for the three months ended June 30, 2018 and 2017 impacting the equity in earnings of joint ventures, operating income for the three months ended June 30, 2018 would have been $25.9 million, an increase of $2.0 million from $23.9 million for the three months ended June 30, 2017.
Segment EBITDA(1) was $36.9 million for the three months ended June 30, 2018, an increase of $7.3 million from $29.6 million for the three months ended June 30, 2017 mainly due to no longer having a non-controlling interest in Segment EBITDA because of the acquisition of the remaining 49% interest in the Höegh Grace entities, which closed on December 1, 2017, the one-off receipt of insurance proceeds of $1.1 million related to prior periods expenses and the impact of no off-hire for the Höegh Gallant in the second quarter of 2018.
Financing and Liquidity
As of June 30, 2018, the Partnership had cash and cash equivalents of $21.0 million and an undrawn portion of the $85 million revolving credit facility of $39.7 million. Current restricted cash for operating obligations of the PGN FSRU Lampung was $6.0 million, and long-term restricted cash required under the Lampung facility was $13.4 million as of June 30, 2018. During the second quarter of 2018, 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.
The Partnership's book value and outstanding principal of total long-term debt was $503.2 million and $508.3 million, respectively, as of June 30, 2018, including long-term debt financing of the FSRUs and $45.3 million on the revolving credit facility due to owners and affiliates. As of June 30, 2018, the Partnership's total current liabilities exceeded total current assets by $13.7 million. This is partly a result of the current portion of long-term debt of $45.5 million being classified current while the restricted cash of $13.4 million associated with the Lampung facility is classified as long-term. 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. In addition, liquidity can also be supplemented, from time to time, by net proceeds of the ATM program, depending on the market conditions. Further, the Partnership is working to refinance the Gallant/ Grace facility well in advance of its first maturity in November 2019.
As of June 30, 2018, the Partnership did not have material commitments for capital or other expenditures for its current business. For the joint ventures, the charterer plans to use the GDF Suez Cape Ann for a project expected to commence in second half of 2018. The vessel will be drydocked and fitted with certain modifications prior to the project start which will be compensated by the charterer. The joint ventures also have a probable liability for exceeding historical minimum performance standards for a boil-off claim under the time charters. The Partnership's 50% share of the accrual was approximately $11.9 million as of June 30, 2018. The joint ventures will continue to monitor this issue and adjust accruals, as might be required, based upon additional information and further developments. It is estimated that the Partnership's 50% share of the excess boil-off claim could range from zero or negligible amounts to approximately $29 million. To the extent that the excess boil-off claims result in a settlement, the Partnership would be indemnified by Höegh LNG for its share of the cash impact of any settlement. However, other concessions or capital improvements, if any, would not be expected to be indemnified. In addition, the joint ventures expect to incur costs for certain capital improvements and maintenance that will not be reimbursed by the charterer or Hoegh LNG for which the Partnership's 50% share is approximately $1.7 million and $1.2 million for the years ended December 31, 2018 and 2019, respectively. Pending resolution of the boil-off claims, the joint ventures have suspended payment on their shareholder loans.
As of June 30, 2018, the Partnership had outstanding interest rate swap agreements for a total notional amount of $395.7 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% for the Lampung facility. The Partnership receives interest based on three month US dollar LIBOR and pays a fixed rate of approximately 1.9% for the Gallant facility. The Partnership receives interest based on three month US dollar LIBOR and pays a fixed rate of approximately 2.3% for the Grace facility. The carrying values of the derivative instruments was a net asset of $1.9 million as of June 30, 2018. 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, 2018 was $0.5 million, an increase of $0.3 million from $0.2 million for the three months ended June 30, 2017. Gain on derivative instruments for the three months ended June 30, 2018 and 2017 related to the interest rate swaps for the Lampung, Gallant and Grace facilities. The increase is mainly due to a lower loss on the ineffective portion of the cash flow hedges for the three months ended June 30, 2018 compared with the three months ended June 30, 2017.
On January 26, 2018, the Partnership entered into a sales agreement with B. Riley FBR Inc. (the "Agent"). Under the terms of the sales agreement, the Partnership may offer and sell up to $120 million aggregate offering amount of "at-the-market" common and Series A preferred units, from time to time, through the Agent. During the three months ended June 30, 2018, the Partnership had sold Series A preferred units and common units, and received total net proceeds, after sales commissions, of $12.4 million.
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.
On May 15, 2018, the Partnership paid a quarterly cash distribution of $15.0 million, or $0.44 per common and subordinated unit, with respect to the first quarter of 2018.
On May 15, 2018, the Partnership paid a cash distribution of $2.8 million, or $0.546875 per Series A preferred unit, for the period commencing on February 15, 2018 to May 14, 2018.
On August 14, 2018, the Partnership paid a quarterly cash distribution of $15.0 million, or $0.44 per common and subordinated unit, with respect to the second quarter of 2018.
On August 15, 2018, the Partnership paid a cash distribution of $3.2 million, or $0.546875 per Series A preferred unit, for the period commencing on May 15, 2018 to August 14, 2018.
On August 21, 2018, the Partnership repaid $6.0 million on the revolving credit facility from the net proceeds of the ATM program.
Outlook
The Höegh Gallant operates under a long-term time charter which started in April 2015 with an expiration date in April 2020 with Hoegh LNG Egypt LLC ("EgyptCo"), a subsidiary of Höegh LNG Holdings Ltd. ("Höegh LNG"),. EgyptCo has a charter with the government-owned Egyptian Natural Gas Holding Company ("EGAS"). The charter between EgyptCo and EGAS allows for early termination only with the mutual consent of both parties. In the first quarter of 2018, EGAS initiated a meeting with EgyptCo to seek mutually agreed terms for an early termination of the charter. Such an agreement would require consent of EgyptCo. Pursuant to an option agreement, the Partnership has the right to cause Höegh LNG to charter the Höegh Gallant from the expiration or termination of the EgyptCo charter until July 2025, at a rate equal to 90% of the rate payable pursuant to the current charter with EgyptCo, plus any incremental taxes or operating expenses as a result of the new charter. Höegh LNG's ability to make payments to us with respect to an exercise of the option by us may be affected by events beyond our and its control, including opportunities to obtain new employment for the vessel, prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, Höegh LNG's ability to meet its obligations to us may be impaired. If Höegh LNG is unable to meet its obligations to us for the option, our financial condition, results of operations and ability to make cash distributions to our unitholders could be materially adversely affected.
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.
Höegh LNG has two operating FSRUs, the Höegh Giant (HHI Hull No. 2552), which was delivered from the shipyard on April 27, 2017 and the Höegh Esperanza (HHI Hull No. 2865), which was delivered from the shipyard on April 5, 2018. The Höegh Giant is operating on a three-year contract that commenced on February 7, 2018 with Gas Natural SGD, SA ("Gas Natural Fenosa"). The Höegh Esperanza is operating on a three-year contract that commenced on June 7, 2018 with CNOOC Gas & Power Trading and Marketing Ltd. (CNNOC) which has an option for a one-year extension. Höegh LNG has two additional FSRUs on order.
Pursuant to the terms of the omnibus agreement, the Partnership will have the right to purchase the Höegh Giant, the Höegh Esperanza, 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 under a contract of five years or more, subject to reaching an agreement with Höegh LNG regarding the purchase price. Höegh LNG had an agreement, subject to environmental approval, for an FSRU with Penco LNG. As a result of further delays in environmental approvals, Höegh LNG announced that it had decided to let the contract lapse.
There can be no assurance that the Partnership will acquire any vessels from Höegh LNG or of the terms upon which any such acquisition may be made.
Presentation of Second Quarter 2018 Results
A presentation will be held today, Thursday, August 23, 2018, at 8:30 A.M. (EDT) to discuss financial results for the second quarter of 2018. 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/942/27138
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 30, 2018.
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: 10123421
Financial Results on Form 6-K
The Partnership has filed a Form 6-K with the SEC with detailed information on the Partnership's results of operations for the three and six months ended June 30, 2018, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited condensed interim consolidated 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:
-- market trends for FSRUs and LNG carriers, including hire rates and
factors affecting supply and demand;
-- the Partnership's distribution policy and ability to make cash
distributions on the Partnership's units or any increases in the
quarterly distributions on the Partnership's common units;
-- restrictions in the Partnership's debt agreements and pursuant to local
laws on the Partnership's joint ventures' and subsidiaries' ability to
make distributions;
-- the Partnership's ability to settle or resolve the boil-off claim for
the joint ventures, including the estimated amount thereof;
-- the ability of Höegh LNG to satisfy its indemnification obligations to
the Partnership, including in relation to the boil-off claim;
-- the Partnership's ability to purchase additional vessels from Höegh LNG
in the future;
-- the Partnership's ability to integrate and realize the anticipated
benefits from acquisitions;
-- the Partnership's anticipated growth strategies; including the
acquisition of vessels;
-- the Partnership's anticipated receipt of dividends and repayment of
indebtedness from subsidiaries and joint ventures;
-- 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 comply with financing agreements and the
expected effect of restrictions and covenants in such agreements;
-- the financial condition liquidity and creditworthiness of the
Partnership's existing or future customers and their ability to satisfy
their obligations under the Partnership's contracts;
-- the Partnership's ability to replace existing borrowings, including the
Gallant/Grace facility, 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 the Partnership's customers;
-- the Partnership's ability to perform under the Partnership's contracts
and maintain long-term relationships with its customers;
-- the Partnership's ability to leverage Höegh LNG's relationships and
reputation in the shipping industry;
-- the Partnership's continued ability to enter into long-term, fixed-rate
charters and the hire rate thereof;
-- the operating performance of the Partnership's vessels and any related
claims by Total S.A. or other customers;
-- the Partnership's ability to maximize the use of its vessels, including
the redeployment or disposition of vessels no longer under long-term
charters;
-- the Partnership's ability to compete successfully for future chartering
and newbuilding opportunities;
-- timely acceptance of the Partnership's vessels by their 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 ability of Höegh LNG to meet its financial obligations to the
Partnership, including its indemnity, guarantee and option obligations;
-- the Partnership's incremental general and administrative expenses as a
publicly traded limited partnership and the Partnership's fees and
expenses payable under the Partnership's ship management agreements, the
technical information and services agreement and the administrative
services agreements;
-- the anticipated taxation of the Partnership, its subsidiaries and
affiliates 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 the Partnership's common units and Series A preferred
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 we file with the SEC, including the Partnership's Annual
Report on Form 20-F for the year ended December 31, 2017 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,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
REVENUES
Time charter revenues $35,510 35,024 70,395 $70,101
Other revenue 1,100 - 1,100 -
----- --- ----- ---
Total revenues 36,610 35,024 71,495 70,101
------ ------ ------ ------
OPERATING EXPENSES
Vessel operating expenses (5,462) (5,628) (11,215) (11,805)
Construction contract expenses - (151) - (151)
Administrative expenses (2,101) (2,465) (4,888) (5,222)
Depreciation and amortization (5,268) (5,263) (10,536) (10,526)
------ ------ ------- -------
Total operating expenses (12,831) (13,507) (26,639) (27,704)
------- ------- ------- -------
Equity in earnings (losses) of joint ventures 5,111 1,551 14,481 6,360
----- ----- ------ -----
Operating income (loss) 28,890 23,068 59,337 48,757
------ ------ ------ ------
FINANCIAL INCOME (EXPENSE), NET
Interest income 174 113 361 243
Interest expense (6,918) (7,752) (13,782) (15,488)
Gain (loss) on derivative instruments 544 247 1,175 910
Other items, net (880) (1,422) (1,486) (2,224)
---- ------ ------ ------
Total financial income (expense), net (7,080) (8,814) (13,732) (16,559)
------ ------ ------- -------
Income (loss) before tax 21,810 14,254 45,605 32,198
------ ------ ------ ------
Income tax expense (1,866) (2,042) (3,975) (3,797)
------ ------ ------ ------
Net income (loss) $19,944 12,212 41,630 $28,401
======= ====== ====== =======
Non-controlling interest in net income - 2,812 - 5,556
Preferred unitholders' interest in net income 3,003 - 5,663 -
----- --- ----- ---
Limited partners' interest in net income (loss) $16,941 9,400 35,967 $22,845
======= ===== ====== =======
Earnings per unit
Common unit public (basic and diluted) $0.50 $0.28 $1.07 $0.68
Common unit Höegh LNG (basic and diluted) $0.53 $0.30 $1.11 $0.71
Subordinated unit (basic and diluted) $0.53 $0.30 $1.11 $0.71
HÖEGH LNG PARTNERS LP
UNAUDITED CONDENSED INTERIM CONSOLIDATED
BALANCE SHEETS
(in thousands of U.S. dollars)
As of
-----
June 30, December 31,
2018 2017
---- ----
ASSETS
Current assets
Cash and cash equivalents $20,980 $22,679
Restricted cash 5,958 6,962
Trade receivables 4,425 7,563
Amounts due from affiliates 4,235 4,286
Inventory 649 668
Current portion of net
investment in direct
financing lease 3,986 3,806
Derivative instruments 973 -
Prepaid expenses and other
receivables 2,131 462
----- ---
Total current assets 43,337 46,426
------ ------
Long-term assets
Restricted cash 13,404 13,640
Vessels, net of accumulated
depreciation 668,648 679,041
Other equipment 561 604
Intangibles and goodwill 22,570 24,370
Advances to joint ventures 3,397 3,263
Net investment in direct
financing lease 280,976 282,820
Long-term deferred tax
asset 139 204
Derivative instruments 1,217 228
Other long-term assets 5,838 8,363
----- -----
Total long-term assets 996,750 1,012,533
------- ---------
Total assets $1,040,087 $1,058,959
========== ==========
HÖEGH LNG PARTNERS LP
UNAUDITED CONDENSED INTERIM CONSOLIDATED
BALANCE SHEETS
(in thousands of U.S. dollars)
As of
-----
June 30, December 31,
2018 2017
---- ----
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt $45,458 $45,458
Trade payables 622 381
Amounts due to owners and
affiliates 559 1,417
Value added and withholding tax
liability 1,013 1,511
Derivative instruments 331 2,015
Accrued liabilities and other
payables 9,037 13,042
----- ------
Total current liabilities 57,020 63,824
------ ------
Long-term liabilities
Accumulated losses of joint
ventures 6,265 20,746
Long-term debt 412,479 434,845
Revolving credit facility due to
owners and affiliates 45,292 51,832
Long-term tax liability 786 -
Long-term deferred tax liability 7,403 5,158
Other long-term liabilities 2,673 5,793
----- -----
Total long-term liabilities 474,898 520,476
------- -------
Total liabilities 531,918 584,300
------- -------
EQUITY
8.75% Series A Preferred Units 132,532 113,404
Common units public 323,989 317,149
Common units Höegh LNG 6,945 6,513
Subordinated units 43,044 40,341
Accumulated other comprehensive
income (loss) 1,659 (2,748)
----- ------
Total partners' capital 508,169 474,659
------- -------
Total equity 508,169 474,659
------- -------
Total liabilities and equity $1,040,087 $1,058,959
========== ==========
HÖEGH LNG PARTNERS LP
UNAUDITED CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Three months ended
June 30,
--------
2018 2017
---- ----
OPERATING ACTIVITIES
Net income (loss) $19,944 $12,212
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization 5,268 5,263
Equity in losses (earnings) of joint ventures (5,111) (1,551)
Changes in accrued interest income on advances to joint ventures (63) 1,398
Amortization of deferred debt issuance cost and fair value of debt assumed 176 210
Amortization in revenue for above market contract 905 906
Changes in accrued interest expense (982) 93
Net currency exchange losses (gains) 201 787
Unrealized loss (gain) on derivative instruments (544) (247)
Non-cash revenue: tax paid directly by charterer (214) (432)
Non-cash income tax expense: tax paid directly by charterer 214 432
Deferred tax expense and provision for tax uncertainty 1,426 924
Issuance of units for Board of Directors' fees 160 189
Other adjustments 114 151
Changes in working capital:
Trade receivables 2,089 182
Inventory 9 17
Prepaid expenses and other receivables (492) 690
Trade payables (218) (625)
Amounts due to owners and affiliates (2,222) (2,437)
Value added and withholding tax liability 961 652
Accrued liabilities and other payables (974) (558)
---- ----
Net cash provided by (used in) operating activities 20,647 18,256
------ ------
INVESTING ACTIVITIES
Expenditure for purchase of Höegh Grace entities - (407)
Expenditure for vessel and other equipment - (8)
Receipts from repayment of principal on direct financing lease 943 861
--- ---
Net cash provided by (used in) investing activities $943 $446
---- ----
HÖEGH LNG PARTNERS LP
UNAUDITED CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Three months ended
June 30,
--------
2018 2017
---- ----
FINANCING ACTIVITIES
Proceeds from loans and promissory notes due to owners and affiliates $ - $10,100
Repayment of long-term debt (11,364) (11,364)
Repayment of amounts due to owners and affiliates (11,500) -
Repayment of customer loan for funding of value added liability on import (1,194) -
Net proceeds from issuance of common units 104 -
Net proceeds from issuance of 8.75% Series A Preferred Units 11,681 -
Cash distributions to limited partners and preferred unitholders (17,737) (14,438)
Cash distributions to non-controlling interest - (3,920)
Proceeds from indemnifications received from Höegh LNG - 605
--- ---
Net cash provided by (used in) financing activities (30,010) (19,017)
------- -------
Increase (decrease) in cash, cash equivalents and restricted cash (8,420) (315)
Effect of exchange rate changes on cash and cash equivalents (54) -
Cash, cash equivalents and restricted cash, beginning of period 48,816 41,761
------ ------
Cash, cash equivalents and restricted cash, end of period $40,342 $41,446
======= =======
HÖEGH LNG PARTNERS LP
UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED JUNE 30, 2018 AND 2017
(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, 2018 and 2017, Majority held FSRUs includes the direct financing lease related to the PGN FSRU Lampung and the operating leases related to the Höegh Gallant and the Höegh Grace.
For the three months ended June 30, 2018 and 2017, 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 consolidated 100% of the revenues, expenses, assets and liabilities of the Höegh Grace entities and the interest not owned by the Partnership was reflected as non-controlling interest in net income and non-controlling interest in total equity under US GAAP. Management monitored the results of operations of the Höegh Grace entities based on the Partnership's 51% interest in Segment EBITDA of such entities and, therefore, subtracted 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. On December 1, 2017, the Partnership acquired the remaining 49% ownership interest in the Höegh Grace entities and, as of that date, there was no longer a non-controlling interest in the Höegh Grace entities. The following tables include the results for the segments for the three months ended June 30, 2018 and 2017.
HÖEGH LNG PARTNERS LP
UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED JUNE 30, 2018
(in thousands of U.S. dollars)
Three months ended June 30, 2018
--------------------------------
Joint venture
Majority FSRUs Total
held (proportional Segment Elimin- Consolidated
(in thousands of U.S. dollars) FSRUs consolidation) Other reporting ations reporting
----------------------------- ----- ------------- ----- --------- ------ ---------
Time charter revenues $35,510 10,576 - 46,086 (10,576) (1) $35,510
Other revenue 1,100 (3) - - 1,100 (1) 1,100
----- --- --- ----- -----
Total revenues 36,610 10,576 - 47,186 36,610
------ ------ --- ------ ------
Operating expenses (6,383) (2,709) (1,180) (10,272) 2,709 (1) (7,563)
Equity in earnings (losses) of joint - - - - 5,111 (1) 5,111
ventures
Segment EBITDA 30,227 7,867 (1,180) 36,914
------ ----- ------ ------
Depreciation and amortization (5,268) (2,399) - (7,667) 2,399 (1) (5,268)
------ ------ --- ------ ------
Operating income (loss) 24,959 5,468 (1,180) 29,247 28,890
------ ----- ------ ------ ------
Gain (loss) on derivative 544 2,967 - 3,511 (2,967) (1) 544
instruments
Other financial income (expense), (6,839) (3,324) (785) (10,948) 3,324 (1) (7,624)
net
Income (loss) before tax 18,664 5,111 (1,965) 21,810 - 21,810
------ ----- ------ ------ --- ------
Income tax benefit (expense) (1,845) - (21) (1,866) - (1,866)
------ --- --- ------ --- ------
Net income (loss) $16,819 5,111 (1,986) 19,944 - $19,944
======= ===== ====== ====== === =======
Preferred unitholders' interest in net - - - - 3,003 (2) 3,003
income
Limited partners' interest in net $16,819 5,111 (1,986) 19,944 (3,003) (2) $16,941
income (loss)
(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) Allocates the preferred
unitholders' interest in net
income to the preferred
unitholders.
(3) Other revenue consists of
insurance proceeds received,
subsequent to June 30, 2018, for
claims related to repairs under
the Mooring warranty. The
Partnership was indemnified by
Höegh LNG for the cost of the
repairs, subject to repayment to
the extent recovered from
insurance proceeds. The amount
is expected to be refunded to
Höegh LNG during the third
quarter of 2018.
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 Elimin- Consolidated
(in thousands of U.S. dollars) FSRUs consolidation) Other reporting ations 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 - - - - 1,551 (1) 1,551
ventures
Less: Non-controlling interest in (5,423) - - (5,423) 5,423 (2) -
Segment EBITDA
Segment EBITDA 22,757 8,241 (1,400) 29,598
------ ----- ------ ------
Add: Non-controlling interest in 5,423 - - 5,423 (5,423) (2) -
Segment EBITDA
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
----- --- --- ----- -----
Limited partners' interest in net income $10,282 1,551 (2,433) 9,400 - $9,400
(loss)
(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 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, 2018 and 2017.
Three months ended
June 30,
--------
(in thousands of U.S. dollars) 2018 2017
----------------------------- ---- ----
Interest income $174 $113
---- ----
Interest expense:
Interest expense (6,742) (7,301)
Commitment fees - (241)
Amortization of debt issuance cost and fair value of debt assumed (176) (210)
---- ----
Total interest expense (6,918) (7,752)
------ ------
Gain (loss) on derivative instruments 544 247
--- ---
Other items, net:
Unrealized foreign exchange gain (loss) (212) (804)
Realized foreign exchange gain (loss) 14 (7)
Bank charges, fees and other (37) (29)
Withholding tax on interest expense and other (645) (582)
---- ----
Total other items, net (880) (1,422)
---- ------
Total financial income (expense), net $(7,080) $(8,814)
======= =======
Appendix A: Segment EBITDA
Non-GAAP Financial Measures
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 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, 2018
--------------------------------
Joint venture
Majority FSRUs Total
held (proportional Segment Elimin- Consolidated
(in thousands of U.S. dollars) FSRUs consolidation) Other reporting ations(1) reporting
----------------------------- ----- ------------- ----- --------- -------- ---------
Reconciliation to net income (loss)
Net income (loss) $16,819 5,111 (1,986) 19,944 $19,944 (3)
Interest income (76) (59) (98) (233) 59 (4) (174)
Interest expense 6,075 3,383 843 10,301 (3,383) (4) 6,918
Depreciation and amortization 5,268 2,399 - 7,667 (2,399) (5) 5,268
Other financial items (2) 296 (2,967) 40 (2,631) 2,967 (6) 336
Income tax (benefit) expense 1,845 - 21 1,866 1,866
Equity in earnings of JVs: - - - - 3,324 (4) 3,324
Interest (income) expense, net
Equity in earnings of JVs: - - - - 2,399 (5) 2,399
Depreciation and amortization
Equity in earnings of JVs: - - - - (2,967) (6) (2,967)
Other financial items (2)
Segment EBITDA $30,227 7,867 (1,180) 36,914 $36,914
======= ===== ====== ====== =======
Three months ended June 30, 2017
--------------------------------
Joint venture
Majority FSRUs Total
held (proportional Segment Elimin- Consolidated
(in thousands of U.S. dollars) FSRUs consolidation) Other reporting ations(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: - - - - 3,429 (4) 3,429
Interest (income) expense, net
Equity in earnings of JVs: - - - - 2,476 (5) 2,476
Depreciation and amortization
Equity in earnings of JVs: - - - - 785 (6) 785
Other financial items(2)
Non-controlling interest in segment (5,423) (5,423) (5,423)
EBITDA
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.
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-cash revenue: tax paid directly by charterer, 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, and other adjustments such as indemnification paid or to be paid by Höegh LNG for the non-cash boil-off accrual, non-budgeted expenses, losses and estimated maintenance indemnified by, or refunded to, Höegh LNG, distributions on the Series A preferred units 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 limited partners. 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 measure for liquidity.
Three months ended
(in thousands of U.S. dollars) June 30, 2018
----------------------------- -------------
Segment EBITDA $36,914
-------
Cash collection/Principal payment on direct financing lease 943
Amortization in revenues for above market contracts 905
Non-cash revenue: Tax paid directly by charterer (214)
Equity in earnings of JVs: Amortization of deferred revenue (573)
Interest income (1) 233
Interest expense (1) (10,301)
Amortization of debt issuance cost (1) and fair value of debt assumed 219
Other items, net (1) (880)
Unrealized foreign exchange losses (gains) 212
Current income tax expense, net of uncertain tax position (439)
Non-cash income tax: Tax paid directly by charterer 214
Other adjustments:
Insurance proceeds to be refunded to Höegh LNG for previous indemnifications (1,100)
Distributions relating to Series A preferred units (3,003)
Estimated maintenance and replacement capital expenditures (5,175)
------
Distributable cash flow $17,955
=======
(1) The Partnership's interest in the
joint ventures' interest income,
interest expense and
amortization of debt issuance
cost is $59, $3,383 and $43,
respectively
(2) Represents distributions payable
on the Series A preferred units
related to the three months
ended June 30, 2018
Reconciliation of distributable cash flows to net cash provided by (used in) operating activities
Three months ended
(in thousands of U.S. dollars) June 30, 2018
----------------------------- -------------
Distributable cash flow $17,955
-------
Estimated maintenance and replacement capital expenditures 5,175
Indemnification paid by Höegh LNG after quarter end for non-budgeted expenses & losses 1,100
Distributions relating to Series A preferred units 3,003
Equity in earnings of JVs: Amortization of deferred revenue 573
Equity in earnings of JVs: Amortization of debt issuance cost (43)
Equity in earnings of JVs: Depreciation and amortization (2,399)
Equity in earnings of JVs: Gain (loss) on derivative instruments 2,967
Equity in losses (earnings) of joint ventures (5,111)
Cash collection/Principal payment on direct financing lease (943)
Changes in accrued interest expense and interest income (1,045)
Other adjustments 262
Changes in working capital (847)
----
Net cash provided by (used in) operating activities $20,647
=======
Media contact:
Richard Tyrrell
Chief Executive Officer and Chief Financial Officer
+44 7919 058830
www.hoeghlngpartners.com
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SOURCE Hoegh LNG Partners LP
