e6vk
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
Date of Report: July 23, 2009
Commission file number 1- 32479
TEEKAY LNG PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
4th Floor
Belvedere Building
69 Pitts Bay Road
Hamilton, HM08 Bermuda
(Address of principal executive office)
 
     Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
     
Form 20-F  þ
   Form 40-F  o
     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).
     
Yes  o
   No  þ
     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).
     
Yes  o
   No  þ
     Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
     
Yes  o
   No  þ
     If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                    
 
 

 

 

Item 1 — Information Contained in this Form 6-K Report
Attached as Exhibit I is a copy of an announcement of Teekay LNG Partners L.P. dated July 23, 2009.
SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  TEEKAY LNG PARTNERS L.P.
 
 		  
Date:  July 23, 2009  By:   /s/  Peter Evensen    
    Peter Evensen   
    Chief Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer) 		  

 

 

     
(TK LOGO)
  TEEKAY LNG PARTNERS L.P.
4th Floor, Belvedere Building, 69 Pitts Bay Road
Hamilton, HM 08, Bermuda
EARNINGS RELEASE
TEEKAY LNG PARTNERS
DECLARES SECOND QUARTER DISTRIBUTION AND
REPORTS FIRST QUARTER RESULTS
Highlights
§   Generated distributable cash flow of $27.6 million in the first quarter of 2009, up over 26% from the first quarter of 2008.
 
§   Declared cash a distribution of $0.57 per unit for the second quarter of 2009, unchanged from the previous quarter.
 
§   Completed follow-on public equity offering of 4.0 million common units in March 2009.
 
§   First of five Skaugen LPG carriers delivered in April 2009.
Hamilton, Bermuda, July 23, 2009 — Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP) today declared a cash distribution of $0.57 per unit ($2.28 per unit on an annualized basis) for the quarter ended June 30, 2009. The cash distribution is payable on August 14, 2009 to all unit holders of record on July 29, 2009.
The Partnership also reported today its results for the quarter ended March 31, 2009. During the first quarter of 2009, the Partnership generated distributable cash flow(1) of $27.6 million, compared to $21.9 million in the same quarter of the previous year. The increase was mainly as a result of the acquisition of the two Kenai and the four RasGas 3 LNG carriers during the second and third quarters of 2008. On May 4, 2009, the Partnership declared a cash distribution of $0.57 per unit for the quarter ended March 31, 2009. The cash distribution was paid on May 15, 2009 to all unitholders of record on May 8, 2009.
“Results for the first quarter of 2009 were in-line with our expectations,” commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. “Our diversified portfolio of fixed-rate long-term contracts, strong liquidity position, and fully-financed newbuilding program support the stability of the Partnership’s distributable cash flows.” Mr. Evensen added, “Through 2011, our committed newbuildings will provide incremental distributable cash flow to support future distribution increases.”
Teekay LNG’s Fleet
In April 2009, the Partnership took delivery of the first of five Skaugen LPG/Multigas vessels, which commenced a 15-year fixed-rate charter concurrently.
The following table summarizes the Partnership’s fleet as of July 1, 2009:
                           
    Number of Vessels
    Delivered   Committed      
    Vessels   Vessels     Total
       
LNG Carrier Fleet*
     13       2         15  
LPG Carrier Fleet
     2       4 **       6  
Suezmax Tanker Fleet
     8       —         8  
       
Total
     23       6         29  
       
 
*   Excludes Teekay’s 33 percent interest in the four Angola LNG newbuildings, as described below.
 
**   Represents the four Skaugen LPG carriers currently under construction, as described below.
 
(1)   Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please see Appendix B for a reconciliation of this non-GAAP measure to the most directly comparable GAAP financial measure.
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Future LNG/LPG Projects
Below is a summary of LNG and LPG newbuildings that the Partnership has agreed to, or has the right to, acquire:
Tangguh LNG
The Partnership has agreed to acquire Teekay Corporation’s (Teekay’s) 70 percent interest in two 155,000 cubic meter newbuilding LNG carriers and expects the purchase to be completed during third quarter of 2009. The Tangguh vessels will provide transportation services to The Tangguh Production Sharing Contractors, a consortium led by a subsidiary of BP plc, to service the Tangguh LNG project in Indonesia. The vessels have been chartered at fixed rates, with inflation adjustments, for a period of 20 years. An Indonesian joint venture partner owns the remaining 30 percent interest in these vessels.
Skaugen LPG
The Partnership has agreed to acquire a total of five LPG carriers from subsidiaries of IM Skaugen ASA (Skaugen), four of which are currently under construction and will be purchased upon their deliveries from the shipyard or from Teekay Corporation scheduled in 2009 and 2010. Upon their delivery, the vessels will commence service under 15-year fixed-rate charters to Skaugen. The first of the five vessels was delivered in April 2009.
Angola LNG
As previously announced, a consortium in which Teekay has a 33 percent interest, has agreed to charter four newbuilding LNG carriers for a period of 20 years to the Angola LNG Project, which is being developed by subsidiaries of Chevron, Sonangol, BP, Total and ENI. The vessels will be chartered at fixed rates, with inflation adjustments, following their deliveries, which are scheduled to commence in 2011. In accordance with an agreement between Teekay and Teekay LNG, Teekay is obligated to offer the Partnership its interest in these vessels and related charter contracts no later than 180 days before delivery of the first of these newbuilding LNG carriers.
Financial Summary
The Partnership reported adjusted net income(1) (as detailed in Appendix A to this release) of $16.1 million for the quarter ended March 31, 2009, compared to adjusted net income of $11.6 million for the same period of the prior year. Adjusted net income excludes a number of specific items which had the net effect of increasing net income by $5.9 million and decreasing net income by $54.7 million for the three months ended March 31, 2009 and 2008, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the Partners, on a GAAP basis(2), of $22.0 million and a net loss attributable to the partners, on a GAAP basis(2), of $43.1 million for the three months ended March 31, 2009 and 2008, respectively.
For accounting purposes, the Partnership is required to recognize the changes in the fair value of its derivative instruments on the statements of income (loss). This method of accounting does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized gains or losses on the statements of income (loss).
The Partnership’s financial statements for the prior periods include historical results of vessels acquired by the Partnership from Teekay, referred to herein as the Dropdown Predecessor, for the period when these vessels were owned and operated by Teekay.
 
(1)   Adjusted net income is a non-GAAP financial measure. Please refer to Appendix A to this release for a reconciliation of this non-GAAP measure to the most directly comparable financial measure under GAAP and information about specific items affecting net income (loss) which are typically excluded by securities analysts in their published estimates of the Partnership’s financial results.
 
(2)   Commencing in 2009, and applied retroactively, in accordance with SFAS 160, the Partnership’s GAAP net income (loss) is presented before non-controlling interest on the Statements of Income (Loss). Net income (loss) attributable to the Partners represents net income (loss) attributable to the limited partners and general partner of Teekay LNG.
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Operating Results
The following table highlights certain financial information for Teekay LNG’s segments: the liquefied gas segment and the Suezmax tanker segment (please refer to the “Teekay LNG’s Fleet” section of this release above and Appendix C for further details).
                                                 
    Three Months Ended   Three Months Ended
    March 31, 2009   March 31, 2008
            (unaudited)                   (unaudited)    
         
    Liquefied   Suezmax           Liquefied   Suezmax    
    Gas   Tanker           Gas   Tanker    
(in thousands of U.S. dollars)   Segment   Segment   Total   Segment   Segment   Total
         
Net voyage revenues(1),(3)
     57,290       17,865       75,155       55,982       19,915       75,897  
 
                                                
Vessel operating expenses
     12,589       6,152       18,741       11,769       6,638       18,407  
Depreciation and amortization
     14,478       4,848       19,326       14,196       4,594       18,790  
 
                                                
Cash flow from vessel operations(2)
     40,005       9,208       49,213       35,083       11,284       46,367  
 
(1)   Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Partnership’s web site at www.teekaylng.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
 
(2)   Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, excluding the cash flow from vessel operations relating to the Partnership’s Variable Interest Entities and Dropdown Predecessors. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Partnership’s web site at www.teekaylng.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
 
(3)   Commencing in the three months ended March 31, 2009, and applied retroactively, the gains and losses related to derivative instruments that are not designated as hedges for accounting purposes have been reclassified to a separate line item in the statements of income (loss) and are no longer included in the amounts above.
Liquefied Gas Segment
Cash flow from vessel operations from the Partnership’s liquefied gas segment increased to $40.0 million in the first quarter of 2009 from $35.1 million in the same quarter of the prior year, primarily due to the acquisition of the two Kenai LNG carriers from Teekay in April 2008 and the unscheduled offhire of the Cataluyna Spirit in the first quarter of 2008.
Suezmax Tanker Segment
Cash flow from vessel operations from the Partnership’s Suezmax tanker segment decreased to $9.2 million for the first quarter of 2009 from $11.3 million in the same quarter of the prior year. This is primarily due to restructuring costs incurred to move certain ship management functions from the Partnership’s Spain office to a subsidiary of Teekay, and a reduction in revenue relating to a decrease in LIBOR, which affected the daily charter rates that are adjusted for changes in LIBOR under the time-charter contracts for five Suezmax tankers. Under the terms of the capital leases relating to these vessels, there was a corresponding decrease in the Partnership’s lease payments, which is reflected as a decrease to interest expense. Accordingly, these and future interest rate adjustments do not impact the Partnerships’ current or future cash flows or net income.
Follow-on Equity Offering and Liquidity
On March 30, 2009, Teekay LNG completed a follow-on equity offering for 4.0 million common units, generating gross proceeds of $70.4 million. Proceeds, after offering expenses and underwriter commissions, were used to repay amounts drawn under the Partnership’s revolving credit facilities.
As of March 31, 2009, the Partnership had total liquidity of $567.2 million, comprised of $201.0 million in cash and cash equivalents (of which $44.7 million is only available to the Tangguh joint venture) and $366.3 million in undrawn medium-term revolving credit facilities.
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About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors. Teekay LNG Partners L.P. provides LNG, LPG and crude oil marine transportation services under long-term, fixed-rate time-charter contracts with major energy and utility companies through its fleet of fifteen LNG carriers, six LPG carriers and eight Suezmax class crude oil tankers. Two of the fifteen LNG carriers are expected to be acquired by the Partnership during the third quarter of 2009. Four of the six LPG carriers are newbuildings scheduled for delivery in late-2009 and 2010.
Teekay LNG Partners’ common units trade on the New York Stock Exchange under the symbol “TGP”.
For Investor Relations enquiries contact:
Kent Alekson
Tel: +1 (604) 609-6442
For Media enquiries contact:
Alana Duffy
Tel: +1 (604) 844-6605
Web site: www.teekaylng.com
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TEEKAY LNG PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except unit data)
                         
            Three Months Ended    
    March 31,   December 31,   March 31,
    2009   2008   2008
    (unaudited)   (unaudited)   (unaudited)
 
VOYAGE REVENUES
     75,673       88,993       76,305  
 
 
                        
OPERATING EXPENSES
                        
Voyage expenses
     518       1,581       408  
Vessel operating expenses
     18,741       20,414       18,407  
Depreciation and amortization
     19,326       20,113       18,790  
General and administrative
     3,555       5,834       4,455  
Restructuring charge (1)
     1,951       —       —  
 
 
     44,091       47,942       42,060  
 
Income from vessel operations
     31,582       41,051       34,245  
 
OTHER ITEMS
                        
Interest expense
     (17,119 )     (37,092 )     (37,214 )
Interest income
     3,975       18,647       16,072  
Realized and unrealized loss on derivative instruments (2)
     (16,236 )     (73,944 )     (44,296 )
Income tax recovery (expense)
     250       (453 )     (80 )
Foreign exchange gain (loss) (3)
     20,428       3,597       (33,891 )
Equity income (loss) (4)
     3,873       1,549       (64 )
Other — net
     (81 )     287       (1 )
 
Net income (loss)
     26,672       (46,358 )     (65,229 )
 
Net income (loss) attributable to:
                        
Non-controlling interest (5)
     4,691       (30,463 )     (23,006 )
Dropdown Predecessor
     —       —       894  
Partners
     21,981       (15,895 )     (43,117 )
 
Limited partners’ units outstanding:
                        
Weighted-average number of common units outstanding — Basic and diluted
     33,382,764       33,338,320       22,540,547  
Weighted-average number of subordinated units outstanding — Basic and diluted
     11,050,929       11,050,929       14,734,572  
Weighted-average number of total units outstanding — Basic and diluted
     44,433,693       44,389,249       37,275,119  
 
 
(1)   The total estimated cost to be incurred in connection with the Partnership’s restructuring plan to move certain ship management functions from the Partnership’s office in Spain to a subsidiary of Teekay is approximately $3 million of which $2.0 million was incurred for the three months ended March 31, 2009. The remaining $1.0 million is expected to be incurred during the remainder of the year.
 
(2)   Commencing in the three months ended March 31, 2009, and applied retroactively, the realized and unrealized gains and losses related to derivative instruments that are not designated as hedges for accounting purposes have been reclassified to a separate line item in the statements of income (loss). The realized gains (losses) relate to the amounts the Partnership actually paid to settle such derivative instruments and the unrealized gains (losses) relate to the change in fair value of such derivative instruments as detailed in the table below.
                         
    Three Months Ended,
    March 31,   December 31,   March 31,
    2009   2008   2008
Realized (losses) relating to:
                        
Interest rate swaps
     (5,900 )     (2,009 )     (501 )
Toledo Spirit time-charter derivative contract
     —       (8,620 )     —  
     
 
     (5,900 )     (10,629 )     (501 )
     
 
                        
Unrealized gains (losses) relating to:
                        
Interest rate swaps
     (15,414 )     (72,590 )     (41,101 )
Toledo Spirit time-charter derivative contract
     5,078       9,275       (2,694 )
     
 
     (10,336 )     (63,315 )     (43,795 )
     
Total realized and unrealized (losses) on derivative instruments
     (16,236 )     (73,944 )     (44,296 )
     
 
(3)   The Partnership’s Euro-denominated revenues currently approximate its Euro-denominated expenses and debt service costs. As a result, the Partnership currently is not exposed materially to foreign currency fluctuations. However, for accounting purposes, the Partnership is required to revalue all foreign currency-denominated monetary assets and liabilities based on the prevailing exchange rate at the end of each reporting period. This revaluation does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized foreign currency translation gains or losses in the statements of income (loss).
 
(4)   Equity income (loss) includes unrealized gains on derivative instruments of $2.8 million, nil and nil for the three months ended March 31, 2009, December 31, 2008 and March 31, 2008, respectively.
 
(5)   Commencing in 2009, and applied retroactively in accordance with SFAS 160, net income (loss) is shown before non-controlling interest.
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TEEKAY LNG PARTNERS L.P.
SUMMARY CONSOLIDATED BALANCE SHEETS (1)
(in thousands of U.S. dollars)
                 
    As at March 31, 2009   As at December 31, 2008
    (unaudited)   (unaudited)
ASSETS
                
Cash and cash equivalents
     200,960       117,641  
Restricted cash — current
     28,671       28,384  
Other current assets
     16,348       18,388  
Advances to affiliates
     9,980       9,583  
Restricted cash — long-term
     603,544       614,565  
Vessels and equipment
     1,989,536       2,007,321  
Advances on newbuilding contracts
     54,871       200,557  
Net investment in direct financing lease
     204,292       —  
Derivative assets
     121,318       167,326  
Investment in and advances to joint venture
     68,167       64,382  
Other assets
     26,300       27,266  
Intangible assets
     139,522       141,805  
Goodwill
     35,631       35,631  
 
Total Assets
     3,499,140       3,432,849  
 
LIABILITIES AND EQUITY
                
Accounts payable, accrued liabilities and unearned revenue
     46,593       44,614  
Current portion of long-term debt and capital leases
     183,023       184,971  
Current portion of long-term debt related to vessels to be delivered to the Partnership (2)
     19,143       39,446  
Advances from affiliates and joint venture partners
     93,904       74,300  
Long-term debt and capital leases
     1,666,449       1,699,231  
Long-term debt related to vessels to be delivered to the Partnership (2)
     331,288       276,304  
Derivative liabilities
     224,929       260,602  
Other long-term liabilities
     56,591       44,668  
Equity
                
Non-controlling interest (3)
     7,553       2,862  
Partners’ equity
     869,667       805,851  
 
Total Liabilities and Total Equity
     3,499,140       3,432,849  
 
 
(1)   Due to the Partnership’s agreement to acquire Teekay’s 70 percent interest in the Tangguh LNG Project, it is required to consolidate Tangguh under U.S. generally accepted accounting principles. Due to the Partnership’s acquisition of a 40 percent interest in the four RasGas 3 LNG carriers on May 6, 2008, it is required to equity account for its investment in the RasGas 3 joint venture under U.S. generally accepted accounting principles.
 
(2)   As at March 31, 2009, includes the debt associated with the Tangguh LNG Carriers, which the Partnership had not yet acquired from Teekay.
 
(3)   Non-controlling interest includes 100 percent of the equity interest in the Tangguh project as the Partnership had not yet acquired the interest in the Tangguh project and is consolidating the Tangguh project as described in note (1) above and the 30 percent portion of Teekay Nakilat (RasGasII Project) which the Partnership does not own.
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TEEKAY LNG PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
                 
    Three Months Ended March 31,
    2009   2008
    (unaudited)   (unaudited)
Cash and cash equivalents provided by (used for)
                
OPERATING ACTIVITIES
                
 
Net operating cash flow
     54,061       35,528  
 
FINANCING ACTIVITIES
                
Proceeds from long-term debt
     85,695       78,642  
Debt issuance costs
     —       (1,083 )
Scheduled repayments of long-term debt
     (31,897 )     (9,154 )
Prepayments of long-term debt
     (25,000 )     —  
Scheduled repayments of capital lease and other long-term liabilities
     (2,347 )     (2,241 )
Proceeds from follow-on equity offering
     68,532       —  
Advances to and from affiliates
     19,207       (2,069 )
Prepayment of advances from affiliates
     —       578  
Decrease in restricted cash
     628       942  
Cash distributions paid
     (26,789 )     (20,552 )
Equity distribution from Teekay Corporation
     —       3,281  
 
Net financing cash flow
     88,029       48,344  
 
INVESTING ACTIVITIES
                
Receipts from direct financing lease
     1,341       —  
Advances to joint venture
     (1,210 )     (3,085 )
Expenditures for vessels and equipment
     (58,902 )     (78,085 )
 
Net investing cash flow
     (58,771 )     (81,170 )
 
 
                
Increase in cash and cash equivalents
     83,319       2,702  
Cash and cash equivalents, beginning of the period
     117,641       91,891  
 
Cash and cash equivalents, end of the period
     200,960       94,593  
 
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TEEKAY LNG PARTNERS L.P.
APPENDIX A — SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below is a reconciliation of the Partnership’s unaudited adjusted net income, a non-GAAP financial measure, to net income (loss) as determined in accordance with GAAP, adjusted for some of the significant items of income and expense that affected the Partnership’s net income (loss) for the three months ended March 31, 2009 and 2008, all of which items are typically excluded by securities analysts in their published estimates of the Partnership’s financial results:
                 
    Three Months Ended   Three Months Ended
    March 31, 2009   March 31, 2008
    (unaudited)   (unaudited)
 
Net income (loss) — GAAP basis
     26,672       (65,229 )
Less:
                
Net (income) loss attributable to non-controlling interest
     (4,691 )     23,006  
Net (income) loss attributable to Dropdown Predecessor
     —       (894 )
 
Net income (loss) attributable to the partners
     21,981       (43,117 )
Add (subtract) specific items affecting net income (loss):
                
Foreign currency exchange (gains) losses (1)
     (20,428 )     33,891  
Unrealized losses from derivative instruments (2)
     10,336       43,792  
Unrealized gains from derivative instruments from equity accounted investees (2)
     (2,806 )     —  
Restructuring charge (3)
     1,951       —  
Non-controlling interests’ share of items above
     5,082       (23,004 )
 
Total adjustments
     (5,865 )     54,679  
 
Adjusted net income
     16,116       11,562  
 
 
(1)   Foreign currency exchange gains and losses primarily relate to the revaluation of the Partnership’s debt denominated in Euros.
 
(2)   Reflects the unrealized gain or loss due to changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes.
 
(3)   Restructuring charges were incurred in connection with the Partnership’s restructuring plan to move certain ship management functions from the Partnership’s office in Spain to a subsidiary of Teekay.
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TEEKAY LNG PARTNERS L.P.
APPENDIX B — RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure — Distributable Cash Flow (DCF)
Distributable cash flow represents net income (loss) adjusted for depreciation and amortization expense, non-cash items, estimated maintenance capital expenditures, gains and losses on vessel sales, unrealized gains and losses from derivatives, income taxes and foreign exchange related items. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by the Partnership’s capital assets. Distributable cash flow is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Distributable cash flow is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net income (loss) or any other indicator of the Partnership’s performance required by accounting principles generally accepted in the United States. The table below reconciles distributable cash flow to net income (loss).
         
    Three Months Ended
    March 31, 2009
    (unaudited)
 
Net income
     26,672  
Add:
        
Depreciation and amortization
     19,326  
Unrealized gains and losses from derivatives and other non-cash items
     12,604  
Partnership’s share of RasGas 3 DCF before estimated maintenance capital expenditures
     4,145  
Less:
        
Income tax recovery
     (250 )
Estimated maintenance capital expenditures
     (8,789 )
Equity income of RasGas 3 joint venture
     (3,873 )
Foreign exchange gain
     (20,428 )
 
Distributable Cash Flow before Non-controlling interest
     29,407  
 
Non-controlling interests’ share of DCF before estimated maintenance capital expenditures
     (1,807 )
 
Distributable Cash Flow
     27,600  
 
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TEEKAY LNG PARTNERS L.P.
APPENDIX C — SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
                         
    Three Months Ended March 31, 2009
            (unaudited)    
    Liquefied   Suezmax Tanker    
    Gas Segment   Segment   Total
 
Net voyage revenues (1) (2)
     57,290       17,865       75,155  
Vessel operating expenses
     12,589       6,152       18,741  
Depreciation and amortization
     14,478       4,848       19,326  
General and administrative
     2,134       1,421       3,555  
Restructuring charge
     867       1,084       1,951  
 
Income from vessel operations
     27,222       4,360       31,582  
 
                         
    Three Months Ended March 31, 2009
            (unaudited)    
    Liquefied   Suezmax Tanker    
    Gas Segment   Segment (2)   Total
 
Net voyage revenues (1) (2)
     55,982       19,915       75,897  
Vessel operating expenses
     11,769       6,638       18,407  
Depreciation and amortization
     14,196       4,594       18,790  
General and administrative
     2,462       1,993       4,455  
 
Income from vessel operations
     27,555       6,690       34,245  
 
 
(1)   Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Partnership’s web site at www.teekaylng.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
 
(2)   Commencing in the three months ended March 31, 2009, and applied retroactively, the gains and losses related to derivative instruments that are not designated as hedges for accounting purposes have been reclassified to a separate line item in the statements of income (loss) and are no longer included in the amounts above.
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FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: the Partnership’s future growth prospects; Teekay Corporation offering its interest in the Angola LNG Project vessels to the Partnership; the timing of LNG and LPG newbuilding deliveries and incremental cash flows relating to such newbuildings; the stability of the Partnership’s distributable cash flows; and potential future cash distribution increases. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: the unit price of equity offerings to finance acquisitions; changes in production of LNG or LPG, either generally or in particular regions; required approvals by the conflicts committee of the board of directors of the Partnership’s general partner to acquire any LNG projects offered to the Partnership by Teekay Corporation; less than anticipated revenues or higher than anticipated costs or capital requirements; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts and inability of the Partnership to renew or replace long-term contracts; LNG and LPG project delays, shipyard production delays; the Partnership’s ability to raise financing to purchase additional vessels or to pursue LNG or LPG projects; changes to the amount or proportion of revenues, expenses, or debt service costs denominated in foreign currencies; and other factors discussed in Teekay LNG Partners’ filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2008. The Partnership expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
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