HAMILTON, Bermuda, Nov. 17,
2022 /PRNewswire/ -- Höegh LNG Partners LP
(NYSE: HMLP-PA) (the "Partnership") today reported its financial
results for the quarter ended September 30, 2022.
Highlights
- Reported for the third quarter of 2022 total time charter
revenues of $36.9 million (Q3 2021:
$35.6 million).
- Generated for the third quarter of 2022 operating income of
$18.2 million (Q3 2021: $27.1 million), net income of $16.6 million (Q3 2021: $17.4 million) and limited partners' interest in
net income of $12.7 million (Q3 2021:
$13.5 million).
- Reported equity in earnings of joint ventures for the third
quarter of 2022 of $2.5 million (Q3
2021: $6.1 million) which includes
two 50% owned FSRUs, the Neptune and the Cape Ann.
During the third quarter of 2022, the Neptune completed a
class renewal which impacted the equity in earnings due to certain
expenses incurred which were not reimbursed by the charterer and
due to the yard stay exceeding the contractual allowance which
resulted in reduced charter hire for the off-hire period.
- On September 23, 2022 (the
"Effective Time"), Höegh LNG Holdings Ltd. ("Höegh LNG") completed
its acquisition of the Partnership's publicly held common units
pursuant to the Agreement and Plan of Merger dated as of
May 25, 2022 (the "Merger
Agreement"). Under the Merger Agreement Höegh LNG acquired, for
cash, all of the outstanding publicly held common units of the
Partnership, at a price of $9.25 per
common unit for a total purchase price of approximately
$167.6 million. Pursuant to the
Merger Agreement, the Partnership's incentive distribution rights
were cancelled.
- Following the Effective Time, Höegh LNG owns 100% of the common
units in the Partnership, and the common units have been delisted
from the New York Stock Exchange ("NYSE"). The Partnership's Series
A cumulative redeemable preferred units ("Series A preferred
units") remain outstanding.
- On November 15, 2022, paid a cash
distribution of $0.546875 per 8.75%
Series A preferred unit, for the period commencing on August 16, 2022 to November 14, 2022.
Financial Results Overview
The Partnership has mitigated the risk of an outbreak of
COVID‑19 on board its vessels by extending time between crew
rotations on the vessels and developing mitigating actions for crew
rotations. The Partnership has fulfilled its obligations under its
time charter contracts, and except for 22 days of off-hire incurred
for the planned maintenance and class renewal for the
Neptune, did not experience any off-hire for its FSRUs for
the three months ended September 30, 2022.
Total time charter revenues for the three months ended
September 30, 2022 were $36.9
million (Q3 2021: $35.6
million). The increase in total time charter revenues is
mainly due to increased time charter revenue for the Höegh
Gallant commencing new charter under the contract with
subsidiaries of New Fortress Energy Inc ("NFE") in late 2021
partially offset by a decrease in time charter revenues for the
PGN FSRU Lampung and the Höegh Grace.
Total operating expenses for the three months ended
September 30, 2022 were $21.2
million (Q3 2021: $14.5
million). The increase is principally due to higher vessel
operating expenses and administrative expenses for the three months
ended September 30, 2022, compared with the three months
ended September 30, 2021. The increase in vessel
operating expenses is mainly related to higher operating costs for
the Höegh Gallant incurred in the three months ended
September 30, 2022. The increase in
administrative expenses is mainly related to external financial
advisory fees, insurance premiums and legal fees incurred in
relation to the Merger Agreement with Höegh LNG and legal fees
incurred in relation to the dispute with the charterer of the
PGN FSRU Lampung.
Equity in earnings of joint ventures for the three months ended
September 30, 2022 was $2.5
million (Q3 2021: $6.1
million). The joint ventures own the Neptune and the
Cape Ann. Unrealized gains on derivative instruments in the
Partnership's joint ventures impacted the equity in earnings of
joint ventures for the three months ended
September 30, 2021. The joint ventures have previously
not applied hedge accounting for interest rate swaps, and all
changes in fair value have been included in equity in earnings
(losses) of joint ventures. After the refinancing of the Neptune
debt facility on November 30, 2021,
hedge accounting is applied for the Neptune. After the
refinancing of the Cape Ann debt facility on June 1, 2022, hedge accounting is also applied
for the Cape Ann.
Excluding the unrealized gains on derivative instruments for the
three months ended September 30, 2022 and 2021, the
equity in earnings of joint ventures for the three months
ended September 30, 2022 would have
been $2.5 million (Q3 2021:
$3.8 million). Excluding the
unrealized gains on derivative instruments for the three months
ended September 30, 2022 and 2021, the decrease was
mainly due to certain non-reimbursable operating expenses incurred
in connection with the planned maintenance and class renewal of the
Neptune for the three months ended September 30, 2022, and reduced time charter
revenues due to 22 days of off-hire incurred for the planned
maintenance and class renewal for the Neptune.
The decrease was partly offset by lower financial
expenses during 2022 due to refinancing of the two joint ventures'
debt facilities in the fourth quarter of 2021 and second quarter of
2022.
The Partnership's share of its joint ventures' operating income
for the three months ended September 30, 2022 was
$4.2 million (Q3 2021: $6.4 million).
Segment EBITDA1 for the three months ended
September 30, 2022 was $27.5 million (Q3 2021: $35.1 million).
Operating income for the three months ended
September 30, 2022 was $18.2
million (Q3 2021: $27.1
million).
Excluding the impact of the unrealized gains on derivatives
impacting the equity in earnings of joint ventures, operating
income for the three months ended September 30, 2022
would have been $18.2 million (Q3
2021: $24.9 million). The decrease is
primarily due to higher operating expenses, administrative expenses
and lower equity in earnings of joint ventures mainly due to the
planned maintenance and class renewal for the Neptune
partially offset by higher time charter revenues.
Total financial expense, net for the three months ended
September 30, 2022 was $5.8 million, (Q3 2021: $7.0 million).
Interest expense consists of the interest incurred, amortization
and gain (loss) on cash flow hedges, commitment fees and
amortization of debt issuance costs for the period. The decrease of
$0.6 million in interest expense in
the third quarter of 2022 compared to the third quarter of 2021 was
principally due to incurred commitment fees and higher bank fees in
the third quarter of 2021 related to refinancing activities on the
PGN FSRU Lampung debt facility (the "Lampung facility").
The Partnership reported net income is $16.6 million for the three months ended
September 30, 2022 (Q3 2021:
$17.4 million).
Net income was impacted by unrealized gains on derivative
instruments for the third quarter of 2021, mainly included in 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
September 30, 2022 would have been $16.7 million (Q3 2021: $15.1 million). Excluding the impact of the
unrealized gains on derivatives, the increase is primarily due to a
decrease in uncertain tax liabilities and refund of additional
taxes paid and expensed in 2021 in connection with a tax audit for
the PGN FSRU Lampung for the tax year 2019. The Partnership
has disputed the result of the tax audit, and during the third
quarter of 2022, the Central
Jakarta regional tax office changed its position, resulting
in a refund of some of the additional taxes paid for 2019, and a
reassessment by the Partnership of the uncertain tax liability.
Preferred unitholders' interest in net income for the
three months ended September 30,
2022 and 2021 was $3.9
million. Limited partners' interest in net income for the
three months ended September 30,
2022 was $12.7 million (Q3
2021: $13.4 million).
Excluding all of the unrealized gains on derivative instruments,
limited partners' interest in net income for the three months ended
September 30, 2022 would have been $12.9 million (Q3 2021: $11.1 million).
_____________________________
|
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 Information
The Partnership has two operating segments. The segment profit
measure is Segment EBITDA, which is defined as earnings before
interest, taxes, depreciation, amortization, impairment, and other
financial items (gain (loss) on debt extinguishment, gain (loss) on
derivative instruments and other items, net). The two segments are
"Majority held FSRUs" and "Joint venture FSRUs." In addition,
unallocated corporate costs, interest income from advances to joint
ventures, and interest expense related to the outstanding balances
on the $85 million revolving credit
facility and the $385 million
facility are included in "Other". For additional information on the
segments, including a reconciliation of Segment EBITDA to operating
income and net income for each segment, refer to the description
and the tables included in "Unaudited Segment Information for the
Quarters Ended September 30, 2022 and
2021" below.
Segment EBITDA for Majority held FSRUs for the three months
ended September 30, 2022 was $26.9
million (Q3 2021: $28.3
million). The decrease is mainly due to increased vessel
operating expenses and administrative expenses partly offset by
increased revenue from time charters.
Segment EBITDA for the Joint venture FSRUs for the three months
ended September 30, 2022 was $6.6
million (Q3 2021: $8.9
million). The decrease is mainly due to increased vessel
operating expenses and reduced time charter revenues due to 22 days
of off-hire due to the class renewal on the Neptune that was
completed during the third quarter of 2022.
Other, Segment EBITDA consists of administrative expenses.
Administrative expenses for the three months ended
September 30, 2022 were $6.0
million (Q3 2021: $2.1
million).
Financing and Liquidity
As of September 30, 2022, the Partnership had cash and
cash equivalents of $45.3 million.
Current restricted cash for operating obligations of the PGN
FSRU Lampung was $9.3 million,
and long-term restricted cash required under the long-term debt
facility for the Lampung facility was $11.0
million as of September 30, 2022. As of
November 17, 2022, the Partnership
has fully drawn on the $63 million
revolving credit tranche of the $385
million facility and has an undrawn balance of $60.5 million on the $85
million revolving credit facility from Höegh LNG. As of
September 30, 2022, the outstanding
balance of $24.5 million on the
$85 million revolving credit facility
from Höegh LNG is classified as a current liability. Further
drawdowns on the $85 million
revolving credit facility may be subject to Höegh LNG's consent
because of the notice of arbitration received from the charterer of
the PGN FSRU Lampung, as described below.
As of September 30, 2022, the Partnership has no
material commitments for capital expenditures.
During the third quarter of 2022, the Partnership made quarterly
repayments of $5.4 million on the
Lampung facility and $6.4 million on
the $385 million facility. The
repayment $5.4 million on the Lampung
facility includes ordinary installments of $4.5 million and additional installments of
$0.9 million due to the cash sweep
mechanism in the Lampung facility. Until the pending arbitration
with the charterer of PGN FSRU Lampung has been terminated,
cancelled or favorably resolved, no shareholder loans may be
serviced and no dividends may be paid to the Partnership by the
subsidiary borrowing under the Lampung facility, PT Hoegh LNG
Lampung ("PT HLNG"). Furthermore, each quarter, 50% of the PGN
FSRU Lampung's generated cash flow after debt service must be
applied to pre-pay outstanding loan amounts under the Lampung
facility, applied pro rata across the commercial and export credit
tranches. The remaining 50% will be retained by PT HLNG and pledged
in favour of the lenders until the pending arbitration with the
charterer of the PGN FSRU Lampung has been terminated,
cancelled or favorably resolved. As a consequence, no cash flow
from the PGN FSRU Lampung will be available for the
Partnership until the pending arbitration has been terminated,
cancelled or favorably resolved. This limitation does not prohibit
the Partnership from paying distributions to preferred and common
unitholders.
The Partnership's book value and outstanding principal of total
long-term debt were $349.6 million
and $353.9 million respectively, as
of September 30, 2022, including the Lampung facility,
the $385 million facility and the
$85 million revolving credit
facility.
As of September 30, 2022, the Partnership's total
current liabilities exceeded total current assets by $11.0 million. This is partly a result of the
current portion of long-term debt of $43.7
million being classified as current while restricted cash of
$11.0 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. Additionally, because the $85
million revolving credit facility from Höegh LNG matures on
January 1, 2023, the outstanding
balance thereunder of $24.5 million
is classified as a current liability.
The current liabilities are expected to 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 cash flows
from operations, including distributions to it from Höegh LNG
Cyprus Limited, and Höegh LNG FSRU IV Ltd as payment of
intercompany interest and/or intercompany debt or dividends and
payments under the Suspension and Make-Whole Agreements (as defined
below), will be sufficient to meet its debt amortization and
working capital needs and maintain cash reserves against
fluctuations in operating cash flows and pay distributions to its
unitholders at its current level of distributions, for the next
twelve months assuming continuing compliance with covenants under
its credit facilities and assuming that the Partnership's vessels
remain fully operational and that revenues are generated as per
existing contractual terms.
As of September 30, 2022, the Partnership had
outstanding interest rate swap agreements for a total notional
amount of $247.5 million to hedge
against the floating interest rate risks of its long-term debt
under the Lampung facility and the $385
million facility. The Partnership applies hedge accounting
for derivative instruments related to these 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 the three-month US dollar
LIBOR and pays a fixed rate ranging from 2.650% to 2.941% for the
$385 million facility.
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 lines "accumulated earnings in joint ventures" and
"accumulated losses in joint ventures" on the consolidated balance
sheet and are not included in the balance sheet figures disclosed
below.
In August 2022, the Partnership
paid a cash distribution of $0.3
million, or $0.01 per common
unit, with respect to the second quarter of 2022.
In August 2022, the Partnership
paid a cash distribution of $3.9
million, or $0.546875 per
Series A preferred unit, for the period commencing on
May 16, 2022 to August 14, 2022.
On November 15, 2022, the
Partnership paid a cash distribution of $3.9
million, or $0.546875 per
Series A preferred unit, for the period commencing on
August 15, 2022 to November 14, 2022.
Outlook
The Partnership believes its primary risk and exposure related
to uncertainty of cash flows from its long-term time charter
contracts is due to the credit risk and counterparty risk
associated with the individual charterers. Payments are due under
time charter contracts regardless of the demand for the charterer's
gas output or the utilization of the FSRU. It is therefore possible
that charterers may not make payments for time charter services in
times of reduced demand. While there is a pending arbitration as
further discussed below, as of November 17,
2022, the Partnership has not experienced any reduced or
non-payments for obligations under the Partnership's time charter
contracts. In addition, the Partnership has not provided
concessions or made changes to the terms of payment for its
customers.
Höegh LNG has entered into the Suspension and Make-Whole
Agreements and provided the Partnership the $85 million revolving credit facility. However,
in July 2021, the Partnership received notice from Höegh LNG
that the revolving credit line of $85
million will not be extended when it matures on
January 1, 2023, and that Höegh LNG will have very limited
capacity to extend any additional advances to the Partnership
beyond what is currently drawn under such facility. Also, further
drawdowns on the $85 million
revolving credit facility may be subject to Höegh LNG's consent
because of the NOA (as defined below) received from the charterer
of PGN FSRU Lampung. With these changes, the Partnership's
liquidity and financial flexibility has been reduced. If Höegh LNG
is unable to meet its obligations to us under the Suspension and
Make-Whole Agreements or meet funding requests or indemnification
obligations, our financial condition, results of operations and
ability to make cash distributions to unitholders could be
materially adversely affected.
Höegh LNG's ability to make payments to the Partnership under
the Suspension and Make-Whole Agreements and any funding requests
under the $85 million revolving
credit facility and any claims for indemnification may be affected
by events beyond the control of Höegh LNG or the Partnership,
including prevailing economic, financial and industry conditions.
If market or other economic conditions deteriorate, Höegh LNG's
ability to meet its obligations to the Partnership may be
impaired.
If financial institutions providing the Partnership's interest
rate swaps are unable to meet their obligations, the Partnership
could experience a higher interest expense or be unable to obtain
funding. Furthermore, if the Partnership's charterers or lenders
are unable to meet their obligations under their respective
contracts or if the Partnership is unable to fulfill its
obligations under time charters, its financial condition, results
of operations and ability to make cash distributions to unitholders
could be materially adversely affected.
As previously reported, by letter dated July 13, 2021, the charterer under the lease and
maintenance agreement for the PGN FSRU Lampung ("LOM")
raised certain issues with PT Hoegh LNG Lampung in relation to the
operations of the PGN FSRU Lampung and the LOM and by
further letter dated July 27, 2021,
stated that it would commence arbitration against PT Hoegh LNG
Lampung. On August 2, 2021, the
charterer served a notice of arbitration ("NOA") to declare the LOM
null and void, and/or to terminate the LOM, and/or seek damages. On
June 13, 2022, the charterer filed a
statement of claim with a request for a primary relief and three
alternative reliefs. The charterer's claim of restitution if the
LOM is declared null and void is $416
million, increasing to $472
million by June 2023 plus
interest and costs. In September
2022, PT Hoegh LNG Lampung filed its Statement of
Defense.
PT Hoegh LNG Lampung has previously served a reply refuting the
claims as baseless and without legal merit and has also served a
counterclaim against the charterer for multiple breaches of the LOM
and a claim against the parent company of the charterer for the
fulfilment of the charterer's obligations under the LOM as stated
in a guarantee provided by the parent company, with a claim for
damages. On June 13, 2022, PT Hoegh
LNG Lampung filed its statement of claim.
PT Hoegh LNG Lampung will take all necessary steps and will
vigorously contest the charterer's claims in the legal process.
No assurance can be given at this time as to the outcome of the
dispute with the charterer of the PGN FSRU Lampung.
Notwithstanding the NOA, both parties have continued to perform
their respective obligations under the LOM. In the event that the
outcome of such dispute is unfavorable to the Partnership, it could
have a material adverse impact on its business, results of
operations, financial condition and ability to pay distributions to
unitholders.
On March 20, 2022, the Partnership
commenced FSRU operations under agreements with subsidiaries of New
Fortress Energy Inc. ("New Fortress") to charter the Höegh
Gallant for a period of ten years (the "NFE Charter"). The
charter rate under the NFE Charter is lower than under the prior
charter for the Höegh Gallant (the "Suspended Gallant
Charter"). The Partnership has entered into an agreement to suspend
the Suspended Gallant Charter, with effect from the commencement of
the NFE Charter, and a make-whole agreement (together, the
"Suspension and Make-Whole Agreements"), pursuant to which Höegh
LNG's subsidiary will compensate the Partnership monthly for the
difference between the charter rate earned under the NFE Charter
and the charter rate earned under the Suspended Gallant Charter
with the addition of a modest increase until July 31, 2025, the original expiration date of
the Suspended Gallant Charter. Afterwards, the Partnership will
continue to receive the charter rate agreed with New Fortress for
the remaining term of the NFE Charter. In addition, pursuant to the
Suspension and Make-Whole Agreements, certain capital expenditures
incurred to ready and relocate the Höegh Gallant for
performance under the NFE Charter will be shared 50/50 between
Höegh LNG and the Partnership, subject to a maximum obligation of
the Partnership. As of November 17,
2022, Höegh LNG has paid an aggregate of $2.6 million to the Partnership pursuant to the
Suspension and Make-Whole Agreements related to such capital
expenditures.
The outbreak of COVID‑19 has negatively affected economic
conditions in many parts of the world which may impact the
Partnership's operations and the operations of its customers and
suppliers. Although the Partnership's operations have not been
materially affected by the COVID-19 outbreak to date, the ultimate
length and severity of the COVID‑19 outbreak and its potential
impact on the Partnership's operations and financial condition is
uncertain at this time. Furthermore, should there be an outbreak of
COVID‑19 on board one of the Partnership's FSRUs or an inability to
replace critical supplies or replacement parts due to disruptions
to third-party suppliers, adequate crewing or supplies may not be
available to fulfill the Partnership's obligations under its time
charter contracts. This could result in off-hire or warranty
payments under performance guarantees which would reduce revenues
for the impacted period. To date, the Partnership has extended the
time between crew rotations on the vessels and developed other
mitigating actions to reduce the risk of a COVID-19 outbreak. As a
result, the Partnership expects that it will incur somewhat higher
crewing expenses. To date, the Partnership has not had material
service interruptions on the Partnership's vessels. Management and
administrative staffs have largely transitioned to working remotely
from home to address the specific COVID‑19 situation in the
applicable geographic location. The Partnership has supported
staffs by supplying needed internet boosters and office equipment
to facilitate an effective work environment.
In February 2022, the Russian
attack on Ukraine started. It may
lead to further regional and international conflicts or armed
action. It is possible that such conflict could disrupt supply
chains and cause instability in the global economy. Additionally,
the ongoing conflict could result in the imposition of further
economic sanctions by the United
States and the European Union against Russia. While much uncertainty remains
regarding the global impact of the invasion, it is possible that
such tensions could adversely affect the Partnership's business,
financial condition, results of operation and cash flows.
Furthermore, it is possible that third parties with whom the
Partnership has charter contracts may be impacted by events in
Russia and Ukraine, which could adversely affect its
operations. The invasion has among other things, led to a
significantly increased attention to security of energy supply in
Europe. Several European countries
are looking to reduce their reliance on pipeline gas from
Russia, and are planning to
increase the import capacity for LNG through the application of
FSRUs and/or landbased import facilities in combination with
increased use of renewable energy sources in the energy mix. Over
time, this could accelerate the energy transition to renewable
energy.
On April 1, 2022, the
Partnership's Colombian subsidiary received a notification from the
Tax Administration of Cartagena assessing a penalty of
approximately $1.8 million for
failure to file the 2016 to 2018 Municipal Industry and Commerce
Tax ("ICT") returns. ICT is imposed on gross receipts on customer
invoices and is similar to a sales tax. The municipal tax
authorities have alleged that the customer invoices are for
industrial activities performed within the municipal jurisdiction.
However, all of the Colombian subsidiary's activities take place
offshore which is outside of the Municipality's borders. According
to Colombian law, municipalities do not have jurisdiction over
maritime waters or low-tide areas. Management intends to deny the
allegations and file an appeal to vigorously defend the Colombian
subsidiary's position. Accruals for loss contingencies are recorded
when it is probable that a liability has been incurred and the
amount of loss can be reasonably estimated. Management, with advice
of its outside legal advisors, has assessed the status of this
matter and has concluded that an adverse judgment after concluding
an appeals process is not probable. As a result, no provision has
been made in the consolidated financial statements. Management
estimates the range of possible loss for 2016-2021, including
accrued interest, to be approximately $1.3
million to $2.9 million as of
September 30, 2022, plus additional
accrued interest thereon until final disposition of the ICT
allegation. In May 2022, the
Partnership and its Colombian subsidiary filed a response to the
Tax Administration of Cartagena disputing the claim. This was
confirmed registered on May 27, 2022,
by the Tax Administration of Cartagena.
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," "future," "project," "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:
- the effects of outbreaks of pandemic or contagious diseases,
including the length and severity of the recent worldwide outbreak
of COVID‑19, including its impact on the Partnership's business
liquidity, cash flows and operations as well as operations of our
customers, suppliers and lenders;
- market conditions and trends for floating storage and
regasification units ("FSRUs") and liquefied natural gas ("LNG")
carriers, including hire rates, vessel valuations, technological
advancements, market preferences and factors affecting supply and
demand of LNG, LNG carriers, and FSRUs;
- the Partnership's distribution policy and ability to make cash
distributions on its preferred 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 ability of Höegh LNG to meet its financial obligations to
the Partnership pursuant to the Suspension and Make-Whole
Agreements, the Suspended Gallant Charter, any funding requests
under the $85 million revolving
credit facility and its guarantee and indemnification
obligations;
- the Partnership's ability to compete successfully for future
chartering opportunities;
- demand in the FSRU sector or the LNG shipping sector, including
demand for the Partnership's 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, on-water class surveys, insurance costs and bunker
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, 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 its 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 TotalEnergies SE, PGN LNG 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 results of the arbitration with the charterer of PGN
FSRU Lampung;
- timely acceptance of the Partnership's vessels by their
charterers;
- termination dates and extensions of charters;
- the impact of the Russian invasion of Ukraine;
- the Partnership's ability to successfully remediate the
material weakness in its internal control over financial reporting
and disclosure controls and procedures;
- 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;
- economic substance laws and regulations adopted or considered
by various jurisdictions of formation or incorporation of the
Partnership and certain of its subsidiaries;
- availability and cost of skilled labor, vessel crews and
management, including possible disruptions, including but not
limited to the supply chain of spare parts and service engineers,
caused by the COVID‑19 outbreak;
- the number of offhire days and drydocking requirements,
including the Partnership's ability to complete scheduled
drydocking on time and within budget;
- the Partnership's general and administrative expenses as a
publicly traded limited partnership and fees and expenses payable
under the Partnership's ship management agreements, the technical
information and services agreement and the administrative services
agreement;
- the anticipated taxation of the Partnership, its subsidiaries
and affiliates and distributions to unitholders;
- estimated future maintenance and replacement capital
expenditures;
- the Partnership's ability to hire or retain key employees;
- customers' increasing emphasis on environmental and safety
concerns;
- potential liability from any pending or future litigation;
- risks inherent in the operation of the Partnership's vessels
including potential disruption due to accidents, political events,
piracy or acts by terrorists;
- future sales of the Partnership's securities in the public
market;
- interruption or failure of the Partnership's information
technology and communication systems;
- the Partnership's business strategy and other plans and
objectives for future operations; and
- other factors listed from time to time in the reports and other
documents that the Partnership files with the SEC, including the
Partnership's Annual Report on Form 20‑F for the year ended
December 31, 2021 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 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
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter
revenues
|
|
$
|
36,947
|
|
$
|
35,596
|
|
$
|
109,198
|
|
$
|
105,068
|
Total revenues
|
|
|
36,947
|
|
|
35,596
|
|
|
109,198
|
|
|
105,068
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating
expenses
|
|
|
(7,673)
|
|
|
(5,927)
|
|
|
(21,430)
|
|
|
(18,213)
|
Administrative
expenses
|
|
|
(8,392)
|
|
|
(3,491)
|
|
|
(19,021)
|
|
|
(9,005)
|
Depreciation and
amortization
|
|
|
(5,131)
|
|
|
(5,096)
|
|
|
(15,376)
|
|
|
(15,318)
|
Total operating expenses
|
|
|
(21,196)
|
|
|
(14,514)
|
|
|
(55,827)
|
|
|
(42,536)
|
Equity in earnings
(losses) of joint ventures
|
|
|
2,451
|
|
|
6,056
|
|
|
15,605
|
|
|
20,397
|
Operating income (loss)
|
|
|
18,202
|
|
|
27,138
|
|
|
68,976
|
|
|
82,929
|
FINANCIAL INCOME (EXPENSE), NET
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
426
|
|
|
166
|
|
|
815
|
|
|
397
|
Interest
expense
|
|
|
(5,532)
|
|
|
(6,146)
|
|
|
(16,039)
|
|
|
(21,440)
|
Other items,
net
|
|
|
(679)
|
|
|
(982)
|
|
|
(1,883)
|
|
|
(2,293)
|
Total financial income
(expense), net
|
|
|
(5,785)
|
|
|
(6,962)
|
|
|
(17,107)
|
|
|
(23,336)
|
Income (loss) before tax
|
|
|
12,417
|
|
|
20,176
|
|
|
51,869
|
|
|
59,593
|
Income tax
expense
|
|
|
4,201
|
|
|
(2,817)
|
|
|
(2,034)
|
|
|
(15,757)
|
Net income (loss)
|
|
$
|
16,618
|
|
$
|
17,359
|
|
$
|
49,835
|
|
$
|
43,836
|
Preferred unitholders'
interest in net income
|
|
|
3,877
|
|
|
3,877
|
|
|
11,631
|
|
|
11,631
|
Limited partners'
interest in net income (loss)
|
|
$
|
12,741
|
|
$
|
13,482
|
|
$
|
38,204
|
|
$
|
32,205
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED INTERIM
CONSOLIDATED BALANCE SHEETS (in thousands of
U.S. dollars)
|
|
|
|
As of
|
|
|
September 30,
|
|
December 31,
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
45,265
|
|
$
|
42,519
|
Restricted
cash
|
|
|
9,324
|
|
|
8,410
|
Trade
receivables
|
|
|
7,088
|
|
|
3,653
|
Amounts due from
affiliates
|
|
|
3,282
|
|
|
7,500
|
Current portion of net
investment in financing lease
|
|
|
5,795
|
|
|
5,426
|
Derivative
instruments
|
|
|
3,075
|
|
|
—
|
Prepaid expenses and
other receivables
|
|
|
4,828
|
|
|
3,772
|
Total current assets
|
|
|
78,657
|
|
|
71,280
|
Long-term assets
|
|
|
|
|
|
|
Restricted
cash
|
|
|
10,991
|
|
|
10,991
|
Accumulated earnings of
joint ventures
|
|
|
61,678
|
|
|
35,708
|
Advances to joint
ventures
|
|
|
10,411
|
|
|
7,511
|
Vessels, net of
accumulated depreciation
|
|
|
586,928
|
|
|
602,289
|
Other
equipment
|
|
|
37
|
|
|
100
|
Intangibles and
goodwill
|
|
|
9,241
|
|
|
11,301
|
Net investment in
financing lease
|
|
|
259,468
|
|
|
263,862
|
Long-term derivative
instruments
|
|
|
5,439
|
|
|
—
|
Long-term deferred tax
asset
|
|
|
151
|
|
|
144
|
Other long-term
assets
|
|
|
821
|
|
|
822
|
Total long-term assets
|
|
|
945,165
|
|
|
932,728
|
Total assets
|
|
$
|
1,023,822
|
|
$
|
1,004,008
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED
INTERIM CONSOLIDATED BALANCE SHEETS (in
thousands of U.S. dollars)
|
|
|
|
As of
|
|
|
September 30,
|
|
December 31,
|
|
|
2022
|
|
2021
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
43,747
|
|
$
|
46,385
|
Revolving credit
facility due to owners and affiliates
|
|
|
24,545
|
|
|
—
|
Trade
payables
|
|
|
635
|
|
|
3,890
|
Amounts due to owners
and affiliates
|
|
|
1,592
|
|
|
3,655
|
Value added and
withholding tax liability
|
|
|
694
|
|
|
935
|
Derivative
instruments
|
|
|
—
|
|
|
5,239
|
Accrued liabilities and
other payables
|
|
|
18,490
|
|
|
16,105
|
Total current liabilities
|
|
|
89,703
|
|
|
76,209
|
Long-term liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
|
305,902
|
|
|
339,687
|
Revolving credit
facility due to owners and affiliates
|
|
|
—
|
|
|
24,942
|
Derivative
instruments
|
|
|
—
|
|
|
7,631
|
Long-term tax
liability
|
|
|
3,382
|
|
|
6,391
|
Long-term deferred tax
liability
|
|
|
21,780
|
|
|
18,462
|
Other long-term
liabilities
|
|
|
141
|
|
|
166
|
Total long-term liabilities
|
|
|
331,205
|
|
|
397,279
|
Total liabilities
|
|
|
420,908
|
|
|
473,488
|
EQUITY
|
|
|
|
|
|
|
8.75% Series A
preferred units
|
|
|
176,078
|
|
|
176,078
|
Common units
public
|
|
|
—
|
|
|
317,515
|
Common units Höegh
LNG
|
|
|
410,373
|
|
|
52,626
|
Accumulated other
comprehensive income (loss)
|
|
|
16,463
|
|
|
(15,699)
|
Total partners' capital
|
|
|
602,914
|
|
|
530,520
|
Total equity
|
|
|
602,914
|
|
|
530,520
|
Total liabilities and equity
|
|
$
|
1,023,822
|
|
$
|
1,004,008
|
HÖEGH LNG PARTNERS
LP UNAUDITED CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands of U.S. dollars)
|
|
|
|
Three months ended
|
|
|
September 30,
|
|
|
2022
|
|
|
2021
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
16,618
|
|
$
|
17,359
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5,131
|
|
|
5,096
|
Equity in (earnings)
losses of joint ventures
|
|
|
(2,451)
|
|
|
(6,056)
|
Changes in accrued
interest income on advances to joint ventures
|
|
|
(209)
|
|
|
(124)
|
Amortization of
deferred debt issuance cost
|
|
|
474
|
|
|
572
|
Amortization in
revenue for above market contract
|
|
|
694
|
|
|
694
|
Changes in accrued
interest expense
|
|
|
140
|
|
|
(120)
|
Receipts from
repayment of principal on financing lease
|
|
|
1,371
|
|
|
1,256
|
Unrealized foreign
exchange losses (gains)
|
|
|
(9)
|
|
|
25
|
Unrealized loss (gain)
on derivative instruments
|
|
|
125
|
|
|
67
|
Non-cash revenue: tax
paid directly by charterer
|
|
|
(227)
|
|
|
(225)
|
Non-cash income tax
expense: tax paid directly by charterer
|
|
|
227
|
|
|
225
|
Deferred tax expense
and provision for tax uncertainty
|
|
|
(2,927)
|
|
|
(849)
|
Issuance of units for
Board of Directors' fees
|
|
|
—
|
|
|
84
|
Other
adjustments
|
|
|
—
|
|
|
(4)
|
Changes in working
capital:
|
|
|
|
|
|
|
Trade
receivables
|
|
|
500
|
|
|
2
|
Inventory
|
|
|
—
|
|
|
5
|
Prepaid expenses and
other receivables
|
|
|
5,062
|
|
|
3,131
|
Trade
payables
|
|
|
(431)
|
|
|
(190)
|
Amounts due to owners
and affiliates
|
|
|
80
|
|
|
(579)
|
Value added and
withholding tax liability
|
|
|
273
|
|
|
(96)
|
Accrued liabilities
and other payables
|
|
|
(2,716)
|
|
|
1,585
|
Net cash provided by (used in) operating
activities
|
|
|
21,725
|
|
|
21,858
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Net cash provided by (used in) investing
activities
|
|
$
|
—
|
|
$
|
—
|
HÖEGH LNG
PARTNERS LP UNAUDITED CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands of U.S. dollars)
|
|
|
|
Three months ended
|
|
|
September 30,
|
|
|
2022
|
|
|
2021
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Proceeds from long-term
debt
|
|
$
|
—
|
|
$
|
14,750
|
Repayment of long-term
debt
|
|
|
(11,822)
|
|
|
(11,165)
|
Cash distributions to
limited partners and preferred unitholders
|
|
|
(4,209)
|
|
|
(4,211)
|
Net cash provided by (used in) financing
activities
|
|
|
(16,031)
|
|
|
(4,303)
|
|
|
|
|
|
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
|
|
5,694
|
|
|
17,555
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
(29)
|
|
|
2
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
59,915
|
|
|
43,174
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
65,580
|
|
$
|
60,731
|
HÖEGH LNG PARTNERS LP
UNAUDITED
SEGMENT INFORMATION FOR THE QUARTERS ENDED
SEPTEMBER 30, 2022 and 2021
(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, impairment and other financial
items (gain (loss) on debt extinguishment, gain (loss) on
derivative instruments and other items, net). 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,
interest income from advances to joint ventures and interest
expense related to the outstanding balances on the $85 million revolving credit facility and the
$385 million facility are included in
"Other."
For the three months ended September 30, 2022 and
2021, Majority held FSRUs includes the 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 September
30, 2022 and 2021, Joint Venture FSRUs include two 50% owned
FSRUs, the Neptune and the 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 consolidated financial statements, except that
i) Joint venture FSRUs is 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)
internal interest income and interest expense between the
Partnership's subsidiaries that eliminate in consolidation are not
included in the segment columns for the other financial income
(expense), net line. 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.
HÖEGH LNG PARTNERS
LP UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED
SEPTEMBER 30, 2022 (in thousands of U.S.
dollars)
|
|
|
|
Three months ended
September 30, 2022
|
|
|
|
|
|
|
Joint venture
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
FSRUs
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
held
|
|
(proportional
|
|
|
|
Segment
|
|
|
|
Consolidated
|
|
(in thousands of U.S. dollars)
|
|
FSRUs
|
|
consolidation)
|
|
Other
|
|
reporting
|
|
Eliminations
|
|
reporting
|
|
Time charter
revenues
|
|
$
|
36,947
|
|
10,600
|
|
—
|
|
47,547
|
|
(10,600)
|
(1)
|
$
|
36,947
|
|
Total revenues
|
|
|
36,947
|
|
10,600
|
|
—
|
|
47,547
|
|
|
|
|
36,947
|
|
Operating
expenses
|
|
|
(10,089)
|
|
(3,957)
|
|
(5,976)
|
|
(20,022)
|
|
3,957
|
(1)
|
|
(16,065)
|
|
Equity in earnings
(losses) of joint ventures
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,451
|
(1)
|
|
2,451
|
|
Segment EBITDA
|
|
|
26,858
|
|
6,643
|
|
(5,976)
|
|
27,525
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
(5,131)
|
|
(2,489)
|
|
—
|
|
(7,620)
|
|
2,489
|
(1)
|
|
(5,131)
|
|
Operating income (loss)
|
|
|
21,727
|
|
4,154
|
|
(5,976)
|
|
19,905
|
|
|
|
|
18,202
|
|
Gain (loss) on
derivative instruments
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
(1)
|
|
—
|
|
Other financial income
(expense), net
|
|
|
(1,758)
|
|
(1,703)
|
|
(4,027)
|
|
(7,488)
|
|
1,703
|
(1)
|
|
(5,785)
|
|
Income (loss) before tax
|
|
|
19,969
|
|
2,451
|
|
(10,003)
|
|
12,417
|
|
|
|
|
12,417
|
|
Income tax
expense
|
|
|
4,201
|
|
—
|
|
—
|
|
4,201
|
|
—
|
|
|
4,201
|
|
Net income (loss)
|
|
$
|
24,170
|
|
2,451
|
|
(10,003)
|
|
16,618
|
|
—
|
|
$
|
16,618
|
|
Preferred unitholders'
interest in net income
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,877
|
(2)
|
|
3,877
|
|
Limited partners'
interest in net income (loss)
|
|
$
|
24,170
|
|
2,451
|
|
(10,003)
|
|
16,618
|
|
(3,877)
|
(2)
|
$
|
12,741
|
|
____________________________
|
(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
(losses) of joint ventures.
|
(2)
|
Allocates the preferred
unitholders' interest in net income to the preferred
unitholders.
|
HÖEGH LNG PARTNERS
LP UNAUDITED SEGMENT INFORMATION FOR THE QUARTER ENDED
SEPTEMBER 30, 2021 (in thousands of U.S.
dollars)
|
|
|
|
Three months ended
September 30, 2021
|
|
|
|
|
|
|
Joint venture
|
|
|
|
|
|
|
|
|
|
|
|
|
Majority
|
|
FSRUs
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
held
|
|
(proportional
|
|
|
|
Segment
|
|
|
|
Consolidated
|
|
(in thousands of U.S. dollars)
|
|
FSRUs
|
|
consolidation)
|
|
Other
|
|
reporting
|
|
Eliminations
|
|
reporting
|
|
Time charter
revenues
|
|
$
|
35,596
|
|
10,835
|
|
—
|
|
46,431
|
|
(10,835)
|
(1)
|
$
|
35,596
|
|
Total revenues
|
|
|
35,596
|
|
10,835
|
|
—
|
|
46,431
|
|
|
|
|
35,596
|
|
Operating
expenses
|
|
|
(7,332)
|
|
(1,932)
|
|
(2,086)
|
|
(11,350)
|
|
1,932
|
(1)
|
|
(9,418)
|
|
Equity in earnings
(losses) of joint ventures
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,056
|
(1)
|
|
6,056
|
|
Segment EBITDA
|
|
|
28,264
|
|
8,903
|
|
(2,086)
|
|
35,081
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
(5,096)
|
|
(2,489)
|
|
—
|
|
(7,585)
|
|
2,489
|
(1)
|
|
(5,096)
|
|
Operating income (loss)
|
|
|
23,168
|
|
6,414
|
|
(2,086)
|
|
27,496
|
|
|
|
|
27,138
|
|
Gain (loss) on
derivative instruments
|
|
|
—
|
|
2,287
|
|
—
|
|
2,287
|
|
(2,287)
|
(1)
|
|
—
|
|
Other financial income
(expense), net
|
|
|
(2,935)
|
|
(2,645)
|
|
(4,027)
|
|
(9,607)
|
|
2,645
|
(1)
|
|
(6,962)
|
|
Income (loss) before tax
|
|
|
20,233
|
|
6,056
|
|
(6,113)
|
|
20,176
|
|
|
|
|
20,176
|
|
Income tax
expense
|
|
|
(2,817)
|
|
—
|
|
—
|
|
(2,817)
|
|
—
|
|
|
(2,817)
|
|
Net income (loss)
|
|
$
|
17,416
|
|
6,056
|
|
(6,113)
|
|
17,359
|
|
—
|
|
$
|
17,359
|
|
Preferred unitholders'
interest in net income
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,877
|
(2)
|
|
3,877
|
|
Limited partners'
interest in net income (loss)
|
|
$
|
17,416
|
|
6,056
|
|
(6,113)
|
|
17,359
|
|
(3,877)
|
(2)
|
$
|
13,482
|
|
___________________________
|
(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
(losses) of joint ventures.
|
(2)
|
Allocates the preferred
unitholders' interest in net income to the preferred
unitholders.
|
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 September 30, 2022 and
2021.
|
|
|
|
Three months ended
|
|
|
September 30,
|
(in thousands of U.S. dollars)
|
|
2022
|
|
|
2021
|
Interest income
|
|
$
|
426
|
|
$
|
166
|
Interest expense:
|
|
|
|
|
|
|
Interest
expense
|
|
|
(4,933)
|
|
|
(5,001)
|
Amortization and gain
(loss) on cash flow hedge
|
|
|
(125)
|
|
|
(67)
|
Commitment
fees
|
|
|
—
|
|
|
(506)
|
Amortization of debt
issuance cost
|
|
|
(474)
|
|
|
(572)
|
Total interest expense
|
|
|
(5,532)
|
|
|
(6,146)
|
Other items, net:
|
|
|
|
|
|
|
Foreign exchange gain
(loss)
|
|
|
42
|
|
|
(18)
|
Bank charges, fees and
other
|
|
|
(68)
|
|
|
(391)
|
Withholding tax on
interest expense and other
|
|
|
(653)
|
|
|
(573)
|
Total other items, net
|
|
|
(679)
|
|
|
(982)
|
Total financial income
(expense), net
|
|
$
|
(5,785)
|
|
$
|
(6,962)
|
Appendix A: Segment EBITDA
Non-GAAP Financial Measures
Segment EBITDA. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. Segment EBITDA is
defined as earnings before interest, taxes depreciation,
amortization, impairment and other financial items. Other financial
items consist of gain (loss) on debt extinguishment, gain (loss) 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, depreciation, amortization,
impairment, taxes, and other financial items, 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 or preferred 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
September 30, 2022
|
|
|
|
|
|
|
|
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)
|
|
$
|
24,170
|
|
2,451
|
|
(10,003)
|
|
16,618
|
|
|
|
$
|
16,618
|
(3)
|
|
Interest
income
|
|
|
(119)
|
|
(115)
|
|
(307)
|
|
(541)
|
|
115
|
(4)
|
|
(426)
|
|
|
Interest
expense
|
|
|
1,235
|
|
1,890
|
|
4,297
|
|
7,422
|
|
(1,890)
|
(4)
|
|
5,532
|
|
|
Depreciation and
amortization
|
|
|
5,131
|
|
2,489
|
|
—
|
|
7,620
|
|
(2,489)
|
(5)
|
|
5,131
|
|
|
Other financial items
(2)
|
|
|
642
|
|
(72)
|
|
37
|
|
607
|
|
72
|
(6)
|
|
679
|
|
|
Income tax (benefit)
expense
|
|
|
(4,201)
|
|
—
|
|
—
|
|
(4,201)
|
|
—
|
|
|
(4,201)
|
|
|
Equity in earnings of JVs: Interest
(income) expense,
net
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,775
|
(4)
|
|
1,775
|
|
|
Equity in earnings of JVs: Depreciation
and
amortization
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,489
|
(5)
|
|
2,489
|
|
|
Equity in earnings of JVs: Other financial
items (2)
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(72)
|
(6)
|
|
(72)
|
|
|
Segment EBITDA
|
|
$
|
26,858
|
|
6,643
|
|
(5,976)
|
|
27,525
|
|
|
|
$
|
27,525
|
|
|
|
|
Three months ended
September 30, 2021
|
|
|
|
|
|
|
|
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)
|
|
$
|
17,416
|
|
6,056
|
|
(6,113)
|
|
17,359
|
|
|
|
$
|
17,359
|
(3)
|
|
Interest
income
|
|
|
(42)
|
|
—
|
|
(124)
|
|
(166)
|
|
—
|
(4)
|
|
(166)
|
|
|
Interest
expense
|
|
|
2,043
|
|
2,641
|
|
4,103
|
|
8,787
|
|
(2,641)
|
(4)
|
|
6,146
|
|
|
Depreciation and
amortization
|
|
|
5,096
|
|
2,489
|
|
—
|
|
7,585
|
|
(2,489)
|
(5)
|
|
5,096
|
|
|
Other financial items
(2)
|
|
|
934
|
|
(2,283)
|
|
48
|
|
(1,301)
|
|
2,283
|
(6)
|
|
982
|
|
|
Income tax (benefit)
expense
|
|
|
2,817
|
|
—
|
|
—
|
|
2,817
|
|
—
|
|
|
2,817
|
|
|
Equity in earnings of JVs: Interest
(income) expense,
net
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,641
|
(4)
|
|
2,641
|
|
|
Equity in earnings of JVs: Depreciation
and
amortization
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,489
|
(5)
|
|
2,489
|
|
|
Equity in earnings of JVs: Other financial
items (2)
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,283)
|
(6)
|
|
(2,283)
|
|
|
Segment EBITDA
|
|
$
|
28,264
|
|
8,903
|
|
(2,086)
|
|
35,081
|
|
|
|
$
|
35,081
|
|
|
_____________________
|
(1)
|
Eliminations reverse
each of the income statement reconciling 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. 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 gain and loss on debt extinguishment, 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.
|
_________________________
Media contact:
The IGB Group, Bryan Degnan, +1
(646) 673‑9701 / Leon Berman, +1
(212) 477‑8438
www.hoeghlngpartners.com
View original
content:https://www.prnewswire.com/news-releases/hoegh-lng-partners-lp-reports-financial-results-for-the-quarter-ended-september-30-2022-301680756.html
SOURCE Hoegh LNG Partners LP