UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT
OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange
Act of 1934
For the month of May 2012
Golar
LNG Partners LP
(Translation of registrants name into English)
Par-la-Ville
Place,
14 Par-la-Ville Road,
Hamilton,
HM 08,
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F [X]
|
Form 40-F [ ]
|
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 [ ]
|
No [X]
|
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 99.1 is a copy of the press release of Golar LNG Partners LP dated May 22, 2012.
Exhibit 99.1
EARNINGS RELEASE - INTERIM RESULTS FOR THE
PERIOD ENDED MARCH 31, 2012
Highlights
| Golar LNG Partners reports net income attributable to unit holders of $19.5 million and operating income of $31.8 million for the first quarter of 2012 |
| Generated distributable cash flow of $19.0 million for the first quarter of 2012 |
| Declared dividend of $0.43 per unit for the first quarter of 2012 |
| Golar Winter charter extension concluded during the quarter |
Financial Results Overview
Golar LNG Partners L.P (Golar Partners or the Partnership) reports net income attributable to unit holders of $19.5 million and operating income of $31.8 million for the first quarter of 2012, as compared to $23.8 million and $30.4 million, respectively for the first quarter of 20111.
While operating results were improved in comparison to the first quarter of 2011, net income was lower largely due to the interest cost associated with debt incurred to acquire the Golar Freeze which is not reflected in the historical results.
Operating results for the first quarter of 2012 were improved compared to the same period in 2011 due to increased revenue as a result of inflation escalators within the Petrobras charters and reduced administrative costs, offset in part by higher operating costs. Operating costs were higher in the first quarter of 2012 largely as a result of annual scheduled maintenance work on the two FSRU vessels operating in Brazil. It is anticipated that operating income from the two Brazilian FSRUs will increase during the balance of the year due to increased charter hire, as a function of the operating element hire rate escalation and lower expected operating costs. All vessels operated well throughout the quarter with 100 per cent utilization.
Net interest expenses increased to $7.8 million for the first quarter of 2012 compared to $3.7 million for the same period in 2011. As noted above, this was principally due to additional interest cost associated with the $222 million loan from Golar LNG Limited (Golar) in connection with the acquisition of the Golar Freeze.
Other financial items increased $1.6 million to a loss of $1.6 million for the first quarter compared to the same period in 2011. The variance mainly relates to the changes in non-cash mark-to-market
valuations of financial derivative instruments, principally interest rate swaps that are hedges against future interest rate movements.
The Partnerships Distributable Cash Flow2 for the first quarter of 2012 was $19.0 million as compared to $20.5 million in the fourth quarter of 2011. This is partly due to the fact that there is one less operating day in the first quarter of 2012 compared to the fourth quarter of 2012, resulting in $0.6 million lower revenue and due to the annual scheduled maintenance work referred to above that resulted in approximately $0.7 million additional operating expenses.
Golar Partners declared a dividend for the first quarter of $0.43 per unit. The dividend was paid on May 16, 2012.
Golars Newbuilding Programme
Golar announced during the quarter that it had entered into two further contracts with Samsung Heavy Industries Co. Ltd to build two LNG carriers for delivery in 2014 and 2015. This increases Golars newbuild programme to thirteen vessels consisting of eleven LNG carriers and two FSRUs. Five of the newbuilds are due for delivery in 2013 with the rest in 2014 and early 2015. Golar has a positive view of the long term charter market and has so far refrained from fixing any of the new buildings on long term charter. Golar has indicated that in its view long term charter rates will increase moving forwards based on a continuing tight shipping market and as the delivery dates for its newbuildings approach. Given the positive outlook for the LNG market, and Golars obligation to offer to sell to the Partnership any such vessels that it may charter for a term of five or more years, Golars expanded newbuilding program is a positive development for the future growth potential of the Partnership.
Floating Storage and Regasification Unit (FSRU) Nusantara Regas Satu (formerly Khannur)
The Partnership has an option to acquire the FSRU Nusantara Regas Satu. The vessel left the shipyard, following its FSRU retrofit, in April 2012 and was delivered to its charterers, Nusantara Regas, in early May 2012. The vessel has received its first cargo of LNG and is currently undergoing its commissioning procedures, which are progressing well. The Partnerships management is currently discussing the terms and timing of a possible acquisition of the Nusantara Regas Satu from Golar.
Financing and Liquidity
As of March 31, 2012 the Partnership had cash and cash equivalents of $49.9 million and undrawn revolving credit facilities of $20 million. Total debt and capital lease obligations net of restricted cash was $715.9 million as of March 31, 2012.
Based on the above debt amount and annualized3 first quarter 2012 adjusted EBITDA4 Golar Partners has a debt to adjusted EBITDA multiple of 4.4 times, which leaves significant flexibility to finance further growth given debt covenant requirements of 6.5 times.
As of March 31, 2012, Golar Partners had interest rate swaps with a notional outstanding value of $460 million representing approximately 93% of senior bank debt and capital lease obligations, net of restricted cash. The average fixed interest rate of these swaps is approximately 2.7%. Average margins paid on outstanding debt in addition to the interest rate are approximately 1.5%. The fixed rate of interest paid on the $222 million Golar LNG loan is 6.75%.
Golar Partners has entered into constructive discussions with banks regarding secured debt financing to finance future growth, including discussions in relation to a possible future acquisition of the Nusantara Regas Satu.
Outlook
The Partnerships board of directors (the Board) is pleased that the Partnership has made significant progress since the initial public offering. During 2011, the Partnership made its first acquisition, the Golar Freeze, which gave rise to an 11.7% increase in distributions.
Golar Partners has also developed its existing business and thereby contracted revenue backlog, with the extension of the time charter with Petrobras in respect of the Golar Winter, which was extended by 5 years to 2024 during the quarter.
As noted above the acquisition of the Nusantara Regas Satu is currently under consideration. Golar Partners has an option to acquire the FSRU, Nusantara Regas Satu, which is contracted under an 11 year charter to Nusantara Regas, a joint venture between Pertamina and Indonesian gas distributor PGN. The vessel began operations under its charter on May 4, 2012.
Golar Partners also has the right to acquire any of Golars LNG carriers and FSRUs that in the future obtain charters of greater than five years. Golar currently has a fleet of 21 vessels, including newbuildings on order, which may, in the future, be chartered on a long-term basis. This potentially creates, if successfully developed, a solid platform for significant future growth in Golar Partners.
According to Wood Mackenzie, LNG liquefaction capacity is expected to grow by an average of 6% per annum between 2012 and 2017. These estimates could possibly increase if there were significant future debottlenecking of existing projects. There are currently 72 LNG carriers on order and 351 vessels in the existing fleet (excluding FSRUs). Of the existing fleet 46 vessels are more than 30 years old.
In the Boards view there is stability in the Partnerships earnings from the existing long term contracts, and there is potential to increase earnings and distributions significantly through additional vessel acquisitions. Currently the most likely acquisition candidate is the Nusantara Regas Satu and as noted above there are ongoing discussions with Golar about a potential purchase. The Board remains optimistic about Golar Partners ability to achieve a high level of growth and to increase distributions over the long-term.
May 22, 2012
Golar LNG Partners L.P.
Hamilton, Bermuda.
Questions should be directed to:
C/o Golar Management Ltd - +44 207 063 7900
Brian Tienzo or Graham Robjohns
Golar LNG Partners LP
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENTS OF INCOME
2012
|
|
20111
|
|
20111
|
|
20111
|
||
(in thousands) |
Jan-Mar
|
|
Jan-Mar
|
|
Oct- Dec
|
|
Jan- Dec
|
|
|
|
|
|
|||||
Total operating revenues | $50,788 | $49,670 | $51,398 | $203,725 | ||||
Vessel operating expenses | 9,151 | 8,628 | 7,787 | 33,069 | ||||
Voyage costs | 36 | 46 | 43 | 238 | ||||
Administrative expenses | 1,022 | 1,776 | 829 | 5,203 | ||||
Depreciation and amortization | 8,797 | 8,796 | 8,991 | 35,634 | ||||
Total operating expenses | 19,006 | 19,246 | 17,650 | 74,144 | ||||
Operating income | 31,782 | 30,424 | 33,748 | 129,581 | ||||
Financial income (expenses) | ||||||||
Interest income | 469 | 363 | 511 | 1,547 | ||||
Interest expense | (8,247 | ) | (4,101 | ) | (7,363 | ) | (19,880 | ) |
Other financial items | (1,633 | ) | (44 | ) | (549 | ) | (20,115 | ) |
Net financial expenses | (9,411 | ) | (3,782 | ) | (7,401 | ) | (38,448 | ) |
Income before tax and non-controlling interests | 22,371 | 26,642 | 26,347 | 91,133 | ||||
Tax | (445 | ) | (417 | ) | (783 | ) | (1,609 | ) |
Net income | 21,926 | 26,225 | 25,564 | 89,524 | ||||
Net income attributable to non-controlling interests | (2,471 | ) | (2,379 | ) | (2,439 | ) | (9,863 | ) |
Net income attributable to Golar LNG Partners LP Owners | $19,455 | $23,846 | $23,125 | $79,661 |
(1) | Results for the Golar Freeze for the periods prior to her acquisition by the Partnership (on October 19, 2011) when she was owned and operated by Golar LNG Limited have been combined with the previously published results of the Partnership and are included in the results of all periods presented. These results are referred to as the Dropdown Predecessor. |
Golar LNG Partners LP
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT BALANCE SHEETS
At March 31,
|
At December 31,
|
|||
(in thousands) |
2012
|
2011
|
||
|
|
|||
ASSETS | ||||
Short-term | ||||
Cash and cash equivalents | 49,875 | 45,962 | ||
Restricted cash and short-term investments | 31,725 | 24,512 | ||
Other current assets | 3,432 | 3,065 | ||
Amounts due from related parties | 1,463 | 3,076 | ||
Total Short-term Assets | 86,495 | 76,615 | ||
Long-term | ||||
Restricted cash | 144,430 | 140,262 | ||
Vessels and vessels under capital leases, net | 844,139 | 853,055 | ||
Other long term assets | 5,294 | 5,563 | ||
Total Assets | $1,080,358 | $1,075,495 | ||
LIABILITIES AND EQUITY | ||||
Short-term | ||||
Current portion of long-term debt | 53,030 | 49,906 | ||
Current portion of obligations under capital leases | 3,460 | 3,240 | ||
Other current liabilities | 74,327 | 75,414 | ||
Amounts due to related parties | 252 | - | ||
Total Short-term Liabilities | 131,069 | 128,560 | ||
Long-term | ||||
Long-term debt | 341,466 | 350,668 | ||
Long-term debt due to related parties | 222,310 | 222,310 | ||
Obligations under capital leases | 271,836 | 264,840 | ||
Other long-term liabilities | 18,998 | 19,153 | ||
Total Liabilities | 985,679 | 985,531 | ||
Equity | ||||
Total Partners capital | 34,378 | 32,069 | ||
Accumulated other comprehensive income (loss) | (4,504 | ) | (5,039 | ) |
Non-controlling interest | 64,805 | 62,934 | ||
Total liabilities and equity | $1,080,358 | $1,075,495 |
Golar LNG Partners LP
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED CARVE-OUT STATEMENTS OF CASHFLOWS
2012
|
20111
|
|||
(in thousands ) |
Jan-Mar
|
Jan-Mar
|
||
|
|
|||
OPERATING ACTIVITIES | ||||
Net income | 21,926 | 26,225 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 8,797 | 8,796 | ||
Amortization of deferred charges | 230 | 200 | ||
Trade accounts receivable | 132 | 347 | ||
Inventories | 20 | 14 | ||
Prepaid expenses, accrued income and other assets | (480 | ) | (472 | ) |
Amount due to/ from related companies | 1,865 | 28,838 | ||
Trade accounts payable | 165 | (126 | ) | |
Accrued expenses and deferred income | 5,012 | (4,037 | ) | |
Unrealized foreign exchange losses | 3,689 | 4,470 | ||
Interest element included in obligations under capital leases | 22 | 207 | ||
Other current liabilities | (5,726 | ) | (7,604 | ) |
Net cash provided by operating activities | 35,652 | 56,858 | ||
INVESTING ACTIVITIES | ||||
Additions to vessels and equipment | (40 | ) | (893 | ) |
Restricted cash and short-term investments | (7,060 | ) | (7,290 | ) |
Net cash used in investing activities | (7,100 | ) | (8,183 | ) |
FINANCING ACTIVITIES | ||||
Repayments of obligations under capital leases | (815 | ) | (918 | ) |
Repayments of long-term debt | (6,078 | ) | (5,961 | ) |
Non-controlling interest dividend | (600 | ) | (1,000 | ) |
Cash distributions paid | (17,146 | ) | - | |
Financing costs paid | - | (174 | ) | |
Repayments of owners funding | - | (34,171 | ) | |
Net cash used in financing activities | (24,639 | ) | (42,224 | ) |
Net increase in cash and cash equivalents | 3,913 | 6,451 | ||
Cash and cash equivalents at beginning of period | 45,962 | 44,100 | ||
Cash and cash equivalents at end of period | $49,875 | $50,551 |
(1) | Cash flows relating to the Golar Freeze for the periods prior to her acquisition by the Partnership (on October 19, 2011) when she was owned and operated by Golar LNG Limited have been combined with the previously published cash flows of the Partnership. These cash flows are referred to as the Dropdown Predecessor. As of October 19, 2011, the financial statements of the Partnership as a separate legal entity are presented on a consolidated basis. |
(2) | On April 13, 2011, the Partnership completed its initial
public offering (IPO). Prior to April 13, 2011, the results
of operations, cash flows and balance sheet have been carved out of the
consolidated financial statements of Golar LNG Limited and therefore are
presented on a combined carve-out basis. The combined entitys historical
combined financial statements include assets, liabilities, revenues, expenses
and cash flows directly attributable to the Partnerships interests
in four vessels, the Golar Mazo, the Methane Princess, the
Golar Spirit and the Golar Winter (Initial
Fleet). Accordingly, the historical combined carve-out interim financial
statements prior to April 13, 2011 reflect allocations of certain administrative
and other expenses, including share options and pension costs, mark-to-market
valuations of interest rate and foreign currency swap derivatives. The basis
for the allocations are described in note 2 of the audited consolidated
and combined carve-out financial statements for the year ended December
31, 2011 contained in the 20-F filed by Golar Partners with the U.S. Securities
and Exchange Commission. These allocated costs have been accounted for as
an equity contribution in the combined balance sheets. |
(3) | Subsequent to the IPO in April 2011, on October 19, 2011, the Partnership acquired from Golar LNG Limited, 100% interests in subsidiaries which own and operate the FSRU, the Golar Freeze. This transaction is deemed also to be a reorganization of entities under common control. As a result, the Partnerships financial statements have been retroactively adjusted for all periods to include the results, cash flows and net assets of the Golar Freeze, herein referred to as the Dropdown Predecessor during the periods under common control of Golar LNG Limited. The basis is similar to the carve out of the initial fleet as described above using a historical combined carve-out basis. |
APPENDIX A RECONCILATION OF NON-GAAP FINANCIAL MEASURES
Distributable Cash Flow (DCF)
Distributable cash flow represents net income adjusted for depreciation and amortization, unrealized gains and losses from derivatives, unrealized foreign exchange gains and losses, other non-cash items, maintenance and replacement capital expenditures and Dropdown Predecessors net income before depreciation and amortization. Maintenance and replacement capital expenditures, including expenditure on drydocking, represent capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, Golar Partners capital assets. Distributable cash flow is a quantitative standard used by investors in publicly-traded partnerships to assist in evaluating a partnerships ability to make quarterly cash distributions. Distributable cash flow is a non-GAAP financial measure and should not be considered as an alternative to net income or any other indicator of Golar Partners performance calculated in accordance with GAAP. The table below reconciles distributable cash flow to net income, the most directly comparable GAAP measure.
Three months
|
Three months
|
|||
ended
|
ended
|
|||
(in thousands) |
March 31, 2012
|
December 31, 2011
|
||
|
|
|||
Net income | $21,926 | $25,564 | ||
Add: | ||||
Depreciation and amortization | 8,797 | 8,991 | ||
Unrealized gain from interest rate derivatives | (684 | ) | (32 | ) |
Unrealized net loss/(gain) from foreign exchange and related foreign currency derivatives | 602 | (977 | ) | |
Less: | ||||
Estimated maintenance and replacement capital expenditures (including drydocking reserve) | (8,664 | ) | (8,148 | ) |
Non-controlling interests share of DCF before maintenance and replacement capital expenditure | (2,986 | ) | (3,112 | ) |
Dropdown Predecessors net income before depreciation and amortization | - | (1,808 | ) | |
|
|
|||
Distributable cash flow | $18,991 | $20,478 | ||
|
|
Adjusted EBITDA
Adjusted EBITDA refers to earnings before interest, other financial items, taxes, non-controlling interest, depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure used by investors to measure our performance.
The Partnership believes that adjusted 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 its industry that provide adjusted EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest, other financial items, taxes and depreciation and amortization, 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 adjusted EBITDA as a financial and operating measure benefits investors in (a) selecting between investing in the Partnership and other investment alternatives and (b) monitoring the Partnerships ongoing financial and operational strength in assessing whether to continue to hold common units. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to net income or any other indicator of Golar Partners performance calculated in accordance with GAAP. The table below reconciles Adjusted EBITDA to net income, the most directly comparable GAAP measure.
Three months |
Three months
|
|||
ended |
ended
|
|||
(in thousands) | March 31, 2012 |
March 31, 2011
|
||
|
|
|||
Net income | $21,926 | $26,225 | ||
Depreciation and amortization | 8,797 | 8,796 | ||
Interest income | (469 | ) | (363 | ) |
Interest Expense | 8,247 | 4,101 | ||
Other financial items | 1,633 | 44 | ||
Taxes | 445 | 417 | ||
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|
|||
Adjusted EBITDA | $40,579 | $39,220 | ||
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|
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Annualized adjusted EBITDA | $162,316 | $156,880 | ||
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FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements concerning future events and Golar Partners 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, 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 Golar Partners 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:
| statements about FSRU and LNG market trends, including charter rates, factors affecting supply and demand, and opportunities for the profitable operations of FSRUs and LNG carriers; |
| statements about Golar Partners and Golar LNG's ability to retrofit vessels as FSRUs and the timing of the delivery and acceptance of any such retrofitted vessels; |
| Golar Partners anticipated growth strategies; |
| the effect of the worldwide economic slowdown; |
| turmoil in the global financial markets; |
| fluctuations in currencies and interest rates; |
| general market conditions, including fluctuations in charter hire rates and vessel values; |
| changes in Golar Partners operating expenses, including drydocking and insurance costs and bunker prices; |
| forecasts of Golar Partners ability to make cash distributions on the units and the amount of any borrowings that may be necessary to make such distributions; |
| Golar Partners future financial condition or results of operations and our future revenues and expenses; |
| the repayment of debt and settling of interest rate swaps; |
| Golar Partners ability to make additional borrowings and to access debt and equity markets; |
| planned capital expenditures and availability of capital resources to fund capital expenditures; |
| the exercise of purchase options by the Partnerships charterers; |
| Golar Partners ability to maintain long-term relationships with major LNG traders; |
| Golar Partners ability to purchase vessels from Golar LNG in the future; |
| Golar Partners continued ability to enter into long-term time charters, including charters for floating storage and regasification projects; |
| Golar Partners ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charter; |
| timely purchases and deliveries of newbuilding vessels; |
| future purchase prices of newbuildings and secondhand vessels; |
| Golar Partners ability to compete successfully for future chartering and newbuilding opportunities; |
| acceptance of a vessel by its charterer; |
| termination dates and extensions of charters; |
| the expected cost of, and Golar Partners ability to comply with, governmental regulations, maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to Golar Partners business; |
| availability of skilled labor, vessel crews and management; |
| Golar Partners anticipated incremental general and administrative expenses as a publicly traded limited partnership and our fees and expenses payable under the fleet management agreements and the management and administrative services agreement; |
| the anticipated taxation of Golar Partners and distributions to Golar Partners unitholders; |
| estimated future maintenance and replacement capital expenditures; |
| Golar Partners 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 Golar Partners common units in the public market; |
| Golar Partners 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 we file with the U.S. Securities and Exchange Commission. |
All forward-looking statements included in this release are made only as of the date of this release on. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, Golar Partners 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. Golar Partners does not intend to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Golar Partners expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
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.
Golar
LNG Partners LP (Registrant) |
||
Date: May 22, 2012 | By: | /s/ Graham Robjohns Graham Robjohns Principal Financial Officer |