o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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OR
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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GOLAR LNG PARTNERS LP
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(Exact name of Registrant as specified in its charter)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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2nd Floor, S.E. Pearman Building
9 Par-la-Ville Road
Hamilton, HM 11, Bermuda
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(Address of principal executive offices)
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Graham Robjohns
2nd Floor, S.E. Pearman Building
9 Par-la-Ville Road
Hamilton, HM 11, Bermuda
Telephone: +1 (441) 295-4705
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(Name, Telephone, Email and/or Facsimile Number and Address of the Company Contact Person)
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Title of each class
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Name of each exchange on which registered
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Common units representing limited partner interests
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Nasdaq Global Market
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64,073,291 Common Units representing limited partner interests
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Emerging growth company
o
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U.S. GAAP
x
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International Financial Reporting Standards as issued
by the International Accounting Standards Board
o
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Other
o
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Item 1.
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Item 2.
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Item 3.
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A.
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B.
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C.
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D.
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Item 4.
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A.
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B.
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C.
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D.
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Item 4A.
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Item 5.
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A.
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B.
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C.
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D.
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E.
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F.
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G.
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Item 6.
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A.
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B.
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C.
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D.
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E.
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Item 7.
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A.
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B.
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C.
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Item 8.
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A.
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B.
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Item 9.
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C.
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Item 10.
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A.
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B.
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C.
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D.
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E.
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F.
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G.
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H.
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I.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 16A.
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Item 16B.
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Item 16C.
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Item 16D.
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Item 16E.
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Item 16F.
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Item 16G.
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Item 16H.
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Item 17.
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Item 18.
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Item 19.
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•
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market trends in the floating storage regasification unit (or FSRU), liquefied natural gas (or LNG) carrier and floating liquefied natural gas vessel (or FLNG) industries, including charter rates, factors affecting supply and demand, and opportunities for the profitable operation of FSRUs, LNG carriers and FLNGs;
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•
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our and Golar’s ability to retrofit vessels as FSRUs or FLNGs and the timing of the delivery and acceptance of any such retrofitted vessels by their respective charterers;
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•
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our ability to pay cash distributions on our units and the amount of any such distributions;
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•
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our ability to integrate and realize the expected benefits from acquisitions, including the the
Golar Tundra
acquisition;
|
•
|
the completion of the Ghana (Tema) LNG Project;
|
•
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our anticipated growth strategies;
|
•
|
the effect of a 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;
|
•
|
the liquidity and creditworthiness of our customers;
|
•
|
changes in our operating expenses, including drydocking and insurance costs and bunker prices;
|
•
|
our future financial condition or results of operations and our future revenues and expenses;
|
•
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the repayment of debt and settling of interest rate swaps;
|
•
|
our ability to make additional borrowings and to access debt and equity markets;
|
•
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planned capital expenditures and availability of capital resources to fund capital expenditures;
|
•
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the exercise of purchase options by our charterers;
|
•
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our ability to maintain long-term relationships with major LNG traders;
|
•
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our ability to leverage the relationships and reputation of Golar, Golar Power Limited (or Golar Power) and OneLNG S.A. (or OneLNG
SA
)in the LNG industry;
|
•
|
our ability to purchase vessels from Golar, Golar Power and OneLNG
SA
in the future;
|
•
|
our continued ability to enter into long-term time charters, including our ability to re-charter the
Golar Spirit
, the
Golar Mazo
and the
Golar Maria
following the expected termination or expiration of their respective time charters in 2017;
|
•
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our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charter;
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•
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timely purchases and deliveries of newbuilding vessels;
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•
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future purchase prices of newbuildings and secondhand vessels;
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•
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our ability to compete successfully for future chartering and newbuilding opportunities;
|
•
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acceptance of a vessel by its charterer;
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•
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termination dates and extensions of charters;
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•
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the expected cost of, and our ability to comply with, governmental regulations, maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business;
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•
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availability of skilled labor, vessel crews and management;
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•
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our general and administrative expenses and our fees and expenses payable under the fleet management agreements and the management and administrative services agreement;
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•
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the anticipated taxation of our partnership and distributions to our unitholders;
|
•
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challenges by authorities to the tax benefits we previously obtained;
|
•
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estimated future maintenance and replacement capital expenditures;
|
•
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our ability to retain key employees;
|
•
|
customers’ increasing emphasis on environmental and safety concerns;
|
•
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potential liability from any pending or future litigation;
|
•
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potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;
|
•
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future sales of our securities in the public market;
|
•
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our business strategy and other plans and objectives for future operations; and
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•
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other factors detailed in this Annual Report and from time to time in our periodic reports.
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Year Ended December 31,
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||||||||||||||||||
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2016
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2015
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2014
|
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2013
|
|
2012
|
||||||||||
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(in thousands except for unit and fleet data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
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|
|
|
|
|
|
|
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|
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|
|||||
Total operating revenues
|
$
|
441,598
|
|
|
$
|
434,687
|
|
|
$
|
396,026
|
|
|
$
|
329,190
|
|
|
$
|
286,630
|
|
Vessel operating expenses
(1)
|
59,886
|
|
|
65,244
|
|
|
59,191
|
|
|
52,390
|
|
|
45,474
|
|
|||||
Voyage and commission expenses
(2)
|
5,974
|
|
|
7,724
|
|
|
6,048
|
|
|
5,239
|
|
|
4,471
|
|
|||||
Administrative expenses
|
8,600
|
|
|
6,643
|
|
|
5,757
|
|
|
5,194
|
|
|
7,269
|
|
|||||
Depreciation and amortization
|
100,468
|
|
|
99,256
|
|
|
80,574
|
|
|
66,336
|
|
|
51,167
|
|
|||||
Total operating expenses
|
174,928
|
|
|
178,867
|
|
|
151,570
|
|
|
129,159
|
|
|
108,381
|
|
|||||
Operating income
|
266,670
|
|
|
255,820
|
|
|
244,456
|
|
|
200,031
|
|
|
178,249
|
|
|||||
Other non-operating income
|
1,318
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net financial expenses
|
(65,388
|
)
|
|
(77,468
|
)
|
|
(64,768
|
)
|
|
(43,759
|
)
|
|
(41,682
|
)
|
|||||
Income before income taxes
|
202,600
|
|
|
178,352
|
|
|
179,688
|
|
|
156,272
|
|
|
136,567
|
|
|||||
Income taxes
|
(16,858
|
)
|
|
(5,669
|
)
|
|
5,047
|
|
|
(5,453
|
)
|
|
(9,426
|
)
|
|||||
Net income
|
185,742
|
|
|
172,683
|
|
|
184,735
|
|
|
150,819
|
|
|
127,141
|
|
|||||
Net income attributable to non-controlling interest
(3)
|
(13,571
|
)
|
|
(10,547
|
)
|
|
(10,581
|
)
|
|
(9,523
|
)
|
|
(10,723
|
)
|
|||||
Net income attributable to Golar LNG Partners owners
|
$
|
172,171
|
|
|
$
|
162,136
|
|
|
$
|
174,154
|
|
|
$
|
141,296
|
|
|
$
|
116,418
|
|
Earnings Per Unit
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic - Common units
|
$
|
2.44
|
|
|
$
|
2.38
|
|
|
$
|
2.47
|
|
|
$
|
2.31
|
|
|
$
|
2.08
|
|
Diluted - Common units
|
$
|
2.43
|
|
|
$
|
2.38
|
|
|
$
|
2.47
|
|
|
$
|
2.31
|
|
|
$
|
2.08
|
|
Cash distributions declared and paid per unit
|
2.31
|
|
|
2.30
|
|
|
2.14
|
|
|
2.05
|
|
|
1.78
|
|
|||||
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
65,710
|
|
|
$
|
40,686
|
|
|
$
|
98,998
|
|
|
$
|
103,100
|
|
|
$
|
66,327
|
|
Restricted cash and short-term investments
(4)
|
44,927
|
|
|
56,714
|
|
|
25,831
|
|
|
24,451
|
|
|
30,900
|
|
|||||
Long-term restricted cash
(4)
|
117,488
|
|
|
136,559
|
|
|
146,552
|
|
|
145,725
|
|
|
190,523
|
|
|||||
Vessels and equipment, net
|
1,652,710
|
|
|
1,730,676
|
|
|
1,501,170
|
|
|
1,281,591
|
|
|
707,147
|
|
|||||
Vessels under capital lease, net
|
111,186
|
|
|
116,727
|
|
|
122,253
|
|
|
127,693
|
|
|
485,632
|
|
|||||
Total assets
(5)
|
2,252,708
|
|
|
2,231,662
|
|
|
1,942,846
|
|
|
1,706,949
|
|
|
1,495,951
|
|
|||||
Current portion of long-term debt
(5)
|
78,101
|
|
|
118,693
|
|
|
121,562
|
|
|
153,494
|
|
|
62,720
|
|
|||||
Current portion of obligations under capital leases
|
787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,837
|
|
|||||
Long-term debt
(5)
|
1,296,609
|
|
|
1,212,419
|
|
|
897,614
|
|
|
721,707
|
|
|
662,716
|
|
|||||
Long-term obligations under capital leases
|
116,964
|
|
|
143,112
|
|
|
150,997
|
|
|
159,008
|
|
|
405,547
|
|
|||||
Partner’s capital
|
541,506
|
|
|
539,475
|
|
|
536,207
|
|
|
501,744
|
|
|
178,675
|
|
|||||
Number of units issued and outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common units
|
64,073,291
|
|
|
45,167,096
|
|
|
45,663,096
|
|
|
45,663,096
|
|
|
36,246,149
|
|
|||||
Subordinated units
|
—
|
|
|
15,949,831
|
|
|
15,949,831
|
|
|
15,949,831
|
|
|
15,949,831
|
|
|||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by operating activities
|
$
|
261,232
|
|
|
$
|
212,230
|
|
|
$
|
276,980
|
|
|
$
|
148,679
|
|
|
$
|
189,343
|
|
Net cash (used in) provided by investing activities
|
(107,247
|
)
|
|
734
|
|
|
(167,755
|
)
|
|
(84,052
|
)
|
|
(78,798
|
)
|
|||||
Net cash used in financing activities
|
(128,961
|
)
|
|
(271,276
|
)
|
|
(113,327
|
)
|
|
(27,854
|
)
|
|
(93,436
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fleet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of vessels at end of period
(6)
|
10
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|
7
|
|
|||||
Average number of vessels during period
(6)
|
10
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|
7
|
|
|||||
Average age of vessels
|
18
|
|
|
17
|
|
|
18
|
|
|
19
|
|
|
20
|
|
|||||
Total calendar days for fleet
|
3,660
|
|
|
3,631
|
|
|
3,199
|
|
|
2,883
|
|
|
2,562
|
|
|||||
Total operating days for fleet
(7)
|
3,572
|
|
|
3,518
|
|
|
3,196
|
|
|
2,751
|
|
|
2,408
|
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average daily time charter equivalent earnings (TCE)
(8)
|
$
|
119,874
|
|
|
$
|
120,373
|
|
|
$
|
121,906
|
|
|
$
|
117,758
|
|
|
$
|
116,739
|
|
Average daily vessel operating expenses
(9)
|
$
|
16,362
|
|
|
$
|
17,969
|
|
|
$
|
18,502
|
|
|
$
|
18,172
|
|
|
$
|
17,749
|
|
(1)
|
Vessel operating expenses are the direct costs associated with operating a vessel, including crew wages, vessel supplies, routine repairs, maintenance, insurance, lubricating oils, and management fees.
|
(2)
|
The vessels have been operated under time charters during the period presented. Under time charter, the charterer pays substantially all of the vessel operating expense, which are primarily fuel and port expenses.
|
(3)
|
Non controlling interest refers to a 40% interest in the
Golar Mazo
owned by Chinese Petroleum Corporation. In addition, since our entry into a sale and leaseback arrangement with a wholly-owned subsidiary (or “Eskimo SPV”) of China Merchants Bank Leasing (or “CMBL”) in November 2015 relating to the
Golar Eskimo
, we have consolidated Eskimo SPV into our results. Thus, the equity attributable to CMBL is included in our non-controlling interest.
|
(4)
|
Restricted cash and short-term investments consist of bank deposits which i) may only be used to settle certain pre-arranged loans, facilities or lease payments; ii) are held as cash collateral for decline in fair values of certain swaps; iii) represent cash held by our lessor variable interest entity (
“
VIE
”
); and iv) are made in accordance with our contractual obligations under bid or performance guarantees for projects we may enter into.
|
(5)
|
In 2016, we adopted ASU 2015-03 “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs”. The guidance simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding liability, consistent with debt discounts. We historically presented deferred debt issuance costs, or fees related to directly issuing debt, as long-term assets on the consolidated balance sheets. Total assets, current portion of long-term debt and long-term debt for the years ended December 31, 2015, 2014, 2013 and 2012 have been restated on the above table.
|
(6)
|
In each of the periods presented, we held (or are deemed to have held) a 60% ownership interest in the
Golar Mazo
and a 100% interest in the other vessels (excluding the
Golar Tundra
).
|
(7)
|
The operating days for our fleet is the total number of days in a given period that the vessels were in our possession less the total number of days off-hire. We define days off-hire as days lost to, among other things, operational deficiencies, drydocking for repairs, maintenance or inspection, equipment breakdowns, special surveys and vessel upgrades, delays due to accidents, crewing strikes, certain vessel detentions or similar problems, or our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew, or during periods of commercial waiting time during which we do not earn charter hire.
|
(8)
|
Non-GAAP Financial Measure
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(dollars in thousands, except average daily TCE)
|
||||||||||||||||||
Total operating revenues
|
$
|
441,598
|
|
|
$
|
434,687
|
|
|
$
|
396,026
|
|
|
$
|
329,190
|
|
|
$
|
286,630
|
|
Voyage and commission expenses
|
(5,974
|
)
|
|
(7,724
|
)
|
|
(6,048
|
)
|
|
(5,239
|
)
|
|
(4,471
|
)
|
|||||
|
$
|
435,624
|
|
|
$
|
426,963
|
|
|
$
|
389,978
|
|
|
$
|
323,951
|
|
|
$
|
282,159
|
|
Calendar days less scheduled off-hire days
|
3,634
|
|
|
3,547
|
|
|
3,199
|
|
|
2,751
|
|
|
2,417
|
|
|||||
Average daily TCE (in $)
|
$
|
119,874
|
|
|
$
|
120,373
|
|
|
$
|
121,906
|
|
|
$
|
117,758
|
|
|
$
|
116,739
|
|
(9)
|
We calculate average daily vessel operating expenses by dividing vessel operating expenses by the number of calendar days.
|
•
|
the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;
|
•
|
the customer exercises its right to terminate the charter in certain circumstances, such as:
|
•
|
loss of the vessel or damage to it beyond repair;
|
•
|
defaults of our obligations under the charter, including prolonged periods of off-hire;
|
•
|
in the event of war or hostilities that would significantly disrupt the free trade of the vessel;
|
•
|
requisition by any governmental authority; or
|
•
|
with respect to the the
Golar Winter,
the
Golar Freeze
and the
Golar Eskimo
, upon at least six months’ written notice at any time after the fifth or tenth anniversary of the commencement of the related charter upon payment of a termination fee; or
|
•
|
a prolonged force majeure event affecting the customer, including damage to or destruction of relevant production facilities, war or political unrest prevents us from performing services for that customer.
|
•
|
its FSRU, FLNG and LNG shipping experience, technical ability and reputation for operation of highly specialized vessels;
|
•
|
its shipping industry relationships and reputation for customer service and safety;
|
•
|
the quality and experience of its seafaring crew;
|
•
|
its financial stability and ability to finance FSRUs, FLNGs and LNG carriers at competitive rates;
|
•
|
its relationships with shipyards and construction management experience; and
|
•
|
its willingness to accept operational risks pursuant to the charter.
|
•
|
the price and availability of crude oil and other energy sources;
|
•
|
increases in interest rates or other events that may affect the availability of sufficient financing for LNG projects on commercially reasonable terms;
|
•
|
increases in the cost of natural gas derived from LNG relative to the cost of natural gas generally;
|
•
|
increases in the production levels of low-cost natural gas in domestic natural gas consuming markets, which could further depress prices for natural gas in those markets and make LNG uneconomical;
|
•
|
decreases in the cost, or increases in the demand for, conventional land-based regasification systems, which could occur if providers or users of regasification services seek greater economies of scale than FSRUs can provide or if the economic, regulatory or political challenges associated with land-based activities improve;
|
•
|
further development of, or decreases in the cost of, alternative technologies for vessel-based LNG regasification;
|
•
|
increases in the production of natural gas in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-natural gas pipelines to natural gas pipelines in those markets;
|
•
|
decreases in the consumption of natural gas due to increases in its price relative to other energy sources or other factors making consumption of natural gas less attractive;
|
•
|
any significant explosion, spill or other incident involving an LNG facility or carrier;
|
•
|
infrastructure constraints such as delays in the construction of liquefaction facilities, the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities, as well as community or political action group resistance to new LNG infrastructure due to concerns about the environment, safety and terrorism;
|
•
|
labor or political unrest or military conflicts affecting existing or proposed areas of LNG production or regasification;
|
•
|
decreases in the price of LNG, which might decrease the expected returns relating to investments in LNG projects;
|
•
|
availability of new, alternative energy sources, including compressed natural gas; and
|
•
|
negative global or regional economic or political conditions, particularly in LNG consuming regions, which could reduce energy consumption or its growth.
|
•
|
increases in interest rates or other events that may affect the availability of sufficient financing for LNG projects on commercially reasonable terms;
|
•
|
decreases in the price of LNG, which might decrease the expected returns relating to investments in LNG projects;
|
•
|
the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities;
|
•
|
local community resistance to proposed or existing LNG facilities based on safety, environmental or security concerns;
|
•
|
any significant explosion, spill or similar incident involving an LNG facility, FLNG, FSRU or LNG carrier; and
|
•
|
labor or political unrest affecting existing or proposed areas of LNG production and regasification.
|
•
|
price and availability of crude oil and petroleum products;
|
•
|
worldwide demand for natural gas;
|
•
|
the cost of exploration, development, production, transportation and distribution of natural gas;
|
•
|
expectations regarding future energy prices for both natural gas and other sources of energy;
|
•
|
the level of worldwide LNG production and exports;
|
•
|
government laws and regulations, including but not limited to environmental protection laws and regulations;
|
•
|
local and international political, economic and weather conditions;
|
•
|
political and military conflicts;
|
•
|
the availability and cost of alternative energy sources, including alternate sources of natural gas in gas importing and consuming countries; or
|
•
|
the availability and cost of alternative energy sources, including alternate sources of natural gas in gas importing and consuming countries.
|
•
|
a reduction in exploration for or development of new natural gas reserves or projects, or the delay or cancellation of existing projects as energy companies lower their capital expenditures budgets, which may reduce our growth opportunities;
|
•
|
low oil prices negatively affecting both the competitiveness of natural gas as a fuel for power generation and the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil;
|
•
|
lower demand for vessels of the types we own and operate, which may reduce available charter rates and revenue to us upon redeployment of our vessels following expiration or termination of existing contracts;
|
•
|
customers potentially seeking to renegotiate or terminate existing vessel contracts, or failing to extend or renew contracts upon expiration;
|
•
|
the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or
|
•
|
declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings.
|
•
|
fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
|
•
|
be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet;
|
•
|
decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions;
|
•
|
significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
|
•
|
incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired; or
|
•
|
incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
|
•
|
the cost of labor and materials;
|
•
|
customer requirements;
|
•
|
fleet size;
|
•
|
the cost of replacement vessels;
|
•
|
length of charters;
|
•
|
governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; and
|
•
|
competitive standards.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be limited or such financing may not be available on favorable terms;
|
•
|
we will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and distributions to unitholders;
|
•
|
our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and
|
•
|
our debt level may limit our flexibility in responding to changing business and economic conditions.
|
•
|
merge or consolidate with any other person;
|
•
|
make certain capital expenditures;
|
•
|
pay distributions to our unitholders;
|
•
|
terminate or materially amend certain of our charters;
|
•
|
enter into any other line of business;
|
•
|
make any acquisitions;
|
•
|
incur additional indebtedness or grant any liens to secure any of our existing or future indebtedness;
|
•
|
enter into any sale-leaseback transactions; or
|
•
|
enter into any transactions with our affiliates.
|
•
|
prevailing economic conditions in the natural gas and energy markets;
|
•
|
a substantial or extended decline in demand for LNG;
|
•
|
increases in the supply of vessel capacity;
|
•
|
the size and age of a vessel; and
|
•
|
the cost of retrofitting or modifying existing vessels, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise.
|
•
|
renew existing charters upon their expiration;
|
•
|
obtain new charters;
|
•
|
successfully interact with shipyards;
|
•
|
obtain financing on commercially acceptable terms;
|
•
|
recover amounts due to us; or
|
•
|
maintain satisfactory relationships with suppliers and other third parties.
|
•
|
neither our partnership agreement nor any other agreement requires our general partner or Golar or its affiliates to pursue a business strategy that favors us or utilizes our assets, and Golar’s officers and directors have a fiduciary duty to make decisions in the best interests of the shareholders of Golar, which may be contrary to our interests;
|
•
|
our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Specifically, our general partner will be considered to be acting in its individual capacity if it exercises its call right, preemptive rights, registration rights or right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights, consents or withholds consent to any merger or consolidation of the partnership, appoints any directors or votes for the election of any director, votes or refrains from voting on amendments to our partnership agreement that require a vote of the outstanding units, voluntarily withdraws from the partnership, transfers (to the extent permitted under our partnership agreement) or refrains from transferring its units, general partner interest or incentive distribution rights or votes upon the dissolution of the partnership;
|
•
|
our general partner and our directors have limited their liabilities and reduced their fiduciary duties under the laws of the Marshall Islands, while also restricting the remedies available to our unitholders, and, as a result of purchasing common units, unitholders are treated as having agreed to the modified standard of fiduciary duties and to certain actions that may be taken by our general partner and our directors, all as set forth in the partnership agreement;
|
•
|
our general partner is entitled to reimbursement of all reasonable costs incurred by it and its affiliates for our benefit;
|
•
|
our partnership agreement does not restrict us from paying our general partner or its affiliates for any services rendered to us on terms that are fair and reasonable or entering into additional contractual arrangements with any of these entities on our behalf;
|
•
|
our general partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units; and our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon the exercise of its limited call right.
|
•
|
the rates we obtain from our charters;
|
•
|
the level of our operating costs, such as the cost of crews and insurance;
|
•
|
the number of unscheduled off-hire days for our fleet and the timing of, and number of days required for, the drydocking of our vessels;
|
•
|
the continued availability of natural gas production, liquefaction and regasification facilities;
|
•
|
the price of and demand for natural gas and oil;
|
•
|
the price of and demand for LNG;
|
•
|
the supply of FSRUs, FLNGs and LNG carriers;
|
•
|
prevailing global and regional economic and political conditions;
|
•
|
changes in local income tax rates;
|
•
|
currency exchange rate fluctuations; and
|
•
|
the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business.
|
•
|
the level of capital expenditures we make, including for maintaining or replacing vessels, building new vessels, acquiring existing vessels and complying with regulations;
|
•
|
our debt service requirements and restrictions on distributions contained in our debt instruments;
|
•
|
the level of debt we will incur to fund future acquisitions;
|
•
|
fluctuations in interest rates;
|
•
|
fluctuations in our working capital needs;
|
•
|
variable tax rates;
|
•
|
our ability to make, and the level of, working capital borrowings; and
|
•
|
the amount of any cash reserves established by our board of directors.
|
•
|
marine disasters;
|
•
|
piracy;
|
•
|
environmental accidents;
|
•
|
bad weather;
|
•
|
mechanical failures;
|
•
|
grounding, fire, explosions and collisions;
|
•
|
human error; and
|
•
|
war and terrorism.
|
•
|
death or injury to persons, loss of property or environmental damage;
|
•
|
delays in the delivery of cargo;
|
•
|
loss of revenues from or termination of charter contracts;
|
•
|
governmental fines, penalties or restrictions on conducting business;
|
•
|
higher insurance rates; and
|
•
|
damage to our reputation and customer relationships generally.
|
•
|
permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Where our partnership agreement permits, our general partner may consider only the interests and factors that it desires, and in such cases it has no fiduciary duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our unitholders. Decisions made by our general partner in its individual capacity will be made by its sole owner, Golar. Specifically, pursuant to our partnership agreement, our general partner will be considered to be acting in its individual capacity if it exercises its right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights (or the IDRs), call right, pre-emptive rights or registration rights, consents or withholds consent to any merger or consolidation of the partnership, appoints any directors or votes for the election of any director, votes or refrains from voting on amendments to our partnership agreement that require a vote of the outstanding units, voluntarily withdraws from the partnership, transfers (to the extent permitted under our partnership agreement) or refrains from transferring its units, general partner interest or IDRs or votes upon the dissolution of the partnership;
|
•
|
provides that our general partner and our directors are entitled to make other decisions in “good faith” if they reasonably believe that the decision is in our best interests;
|
•
|
generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of our board of directors and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our board of directors may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and
|
•
|
provides that neither our general partner nor our officers or our directors will be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or directors or its officers or directors or those other persons engaged in actual fraud or willful misconduct.
|
•
|
The vote of the holders of at least 66⅔% of all outstanding common units voting together as a single class is required to remove the general partner. Golar currently owns approximately 30.1% of our outstanding common units.
|
•
|
Common unitholders are entitled to elect only four of the seven members of our board of directors. Our general partner in its sole discretion appoints the remaining three directors.
|
•
|
Election of the four directors elected by unitholders is staggered, meaning that the member(s) of only one of three classes of our elected directors will be selected each year. In addition, the directors appointed by our general partner serve for terms determined by our general partner.
|
•
|
Our partnership agreement contains provisions limiting the ability of unitholders to call meetings of unitholders, to nominate directors and to acquire information about our operations as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management.
|
•
|
Unitholders’ voting rights are further restricted by the partnership agreement provision providing that if any person or group owns beneficially more than 4.9% of any class of units then outstanding, any such units owned by that person or group in excess of 4.9% may not be voted on any matter and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating required votes (except for purposes of nominating a person for election to our board), determining the presence of a quorum or for other similar purposes, unless required by law. The voting rights of any such unitholders in excess of 4.9% will effectively be redistributed pro rata among the other common unitholders holding less than 4.9% of the voting power of all classes of units entitled to vote. Our general partner, its affiliates and persons who acquired common units with the prior approval of our board of directors will not be subject to this 4.9% limitation except with respect to voting their common units in the election of the elected directors.
|
•
|
There are no restrictions in our partnership agreement on our ability to issue equity securities.
|
•
|
our unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of cash available for distribution on each unit may decrease;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of the common units may decline.
|
•
|
Pursue strategic and accretive acquisitions of FSRUs and LNG carriers and in the future, possibly FLNG vessels.
We believe our affiliation with Golar and its affiliates positions us to pursue a broader array of growth opportunities, including strategic and accretive acquisitions from Golar, with Golar or from third parties. Golar is not required to offer to us, and we are not required to purchase, any FLNGs.
|
•
|
Compete for long-term charter contracts for FSRUs, FLNGs and LNG carriers when attractive opportunities arise.
We intend to work with Golar and its affiliates to participate in competitive tender processes and engage in negotiated transactions with potential charterers for both FSRUs, FLNGs and LNG carriers when attractive opportunities arise by leveraging on the strength of the industry expertise of Golar and our publicly traded partnership status.
|
•
|
Manage our fleet and our customer relationships to provide a stable base of cash flows and superior operating performance.
We intend to manage the stability of cash flows in our fleet by actively seeking the extension or renewal of existing charters, entering into new long-term charters with current customers and identifying potential business opportunities with new high-quality charterers.
|
•
|
The
Moss
system was developed in the 1970s and uses free standing insulated spherical tanks supported at the equator by a continuous cylindrical skirt. In this system, the tank and the hull of the vessel are two separate structures.
|
•
|
The
Membrane
system uses insulation built directly into the hull of the vessel, along with a membrane covering inside the tanks to maintain their integrity. In this system, the vessel's hull directly supports the pressure of the LNG cargo.
|
•
|
FSRUs that are permanently located offshore;
|
•
|
FSRUs that are permanently near shore and attached to a jetty (with LNG transfer being either directly vessel to vessel or over a jetty);
|
•
|
shuttle carriers that regasify and discharge their cargos offshore; and
|
•
|
shuttle carriers that regasify and discharge their cargos alongside.
|
FSRU Vessel
|
|
Capacity
(cbm)
|
|
Base Offtake
Capacity
(Bcf/d)
|
|
Year of
Delivery
|
|
Year of FSRU Retrofitting
|
|
Current
Charter
Commencement
|
|
Charterer
|
|
Charter
Expiration
|
|
Charter
Extension
Option
Periods
|
||
Golar Spirit
|
|
128,000
|
|
|
0.25
|
|
|
1981
|
|
2007
|
|
July 2008
|
|
Petrobras
|
|
June 2017
(1)
|
|
Not applicable
|
Golar Winter
|
|
138,000
|
|
|
0.50
|
|
|
2004
|
|
2008
|
|
September 2009
|
|
Petrobras
|
|
September 2024
(2)
|
|
None
|
Golar Freeze
|
|
125,000
|
|
|
0.48
|
|
|
1977
|
|
2010
|
|
May 2010
|
|
DUSUP
|
|
May 2020
|
|
Terms extending up to 2025
(3)
|
NR Satu
(4)
|
|
125,000
|
|
|
0.50
|
|
|
1977
|
|
2012
|
|
May 2012
|
|
PTNR
|
|
December 2022
|
|
2025
|
Golar Igloo
|
|
170,000
|
|
|
0.50
|
|
|
2014
|
|
n/a
|
|
March 2014
|
|
KNPC
|
|
December 2018
|
|
One regasification season
|
Golar Eskimo
|
|
160,000
|
|
|
0.50
|
|
|
2014
|
|
n/a
|
|
June 2015
|
|
Jordan
|
|
June 2025
|
|
None
|
Total Capacity
|
|
846,000
|
|
|
2.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
On December 23, 2016, an Early Termination Notice was received, effective June 2017, exercising Petrobras' right as charterer to terminate the
Golar Spirit
charter
which will entitle us to an early termination fee.
|
(2)
|
The charter initially had a term of 10 years, expiring in 2019. However, in return for certain vessel modifications made at the request of Petrobras the charter was extended by a further five years to 2024. These modifications were completed in August 2013.
|
(3)
|
DUSUP has the option to extend the charter for two extension periods of two years and two years. DUSUP has an option to extend the initial term or either of the extension periods by one year.
|
(4)
|
We hold all of the voting stock and control all of the economic interests in PT Golar Indonesia (“PTGI”), the company that owns and operates the
NR Satu
, pursuant to a Shareholders’ Agreement with the other shareholder of PTGI, PT Pesona. PT Pesona holds the remaining 51% interest in the issued share capital of PTGI.
|
LNG Carrier
|
|
Capacity
(cbm)
|
|
Year of
Delivery
|
|
Charterer
|
|
Charter
Expiration
|
|
Charter Extension
Option Periods
|
|
Golar Mazo
(1)
|
|
135,000
|
|
|
2000
|
|
Pertamina
|
|
December 2017
|
|
Five years plus five years
(2)
|
Methane Princess
|
|
138,000
|
|
|
2003
|
|
Royal Dutch Shell
|
|
March 2024
|
|
Five years plus five years
|
Golar Grand
|
|
145,700
|
|
|
2006
|
|
Golar/new Golar Grand charterer
|
|
October 2017
(3)
/second quarter of 2019
(4)
|
|
Terms extending up to nine years from initial hire
(4)
|
Golar Maria
|
|
145,700
|
|
|
2006
|
|
Eni S.p.A.
|
|
December 2017
|
|
none
|
Total Capacity
|
|
564,400
|
|
|
|
|
|
|
|
|
|
(1)
|
We own a 60% interest in the
Golar Mazo
, and Chinese Petroleum Corporation holds the remaining 40% interest.
|
(2)
|
In addition, Pertamina has the right to one additional short-term extension of 2 to 12 months following either the initial period of the charter or an extension period.
|
(3)
|
Royal Dutch Shell did not exercise its option to extend its charter on the
Golar Grand
beyond February 2015. Accordingly, in February 2015, we exercised our option requiring Golar to charter the vessel through to October 2017.
|
(4)
|
In February 2017, we entered into a time charter agreement with a major international oil and gas company (or the new Golar Grand charterer) commencing in the second quarter of 2017 for an initial period of two years. The new Golar Grand charterer has options to extend the charter by three one year periods and two further periods of up to two years each.
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Petrobras
|
|
$
|
103,368
|
|
|
23
|
%
|
|
$
|
100,052
|
|
|
23
|
%
|
|
$
|
99,976
|
|
|
25
|
%
|
PTNR
|
|
67,774
|
|
|
15
|
%
|
|
67,325
|
|
|
15
|
%
|
|
66,345
|
|
|
17
|
%
|
|||
Jordan
|
|
57,112
|
|
|
13
|
%
|
|
37,750
|
|
|
9
|
%
|
|
—
|
|
|
—
|
%
|
|||
KNPC
|
|
47,654
|
|
|
11
|
%
|
|
47,402
|
|
|
11
|
%
|
|
43,220
|
|
|
11
|
%
|
|||
DUSUP
|
|
46,465
|
|
|
11
|
%
|
|
41,970
|
|
|
10
|
%
|
|
48,392
|
|
|
12
|
%
|
|||
Pertamina
|
|
37,602
|
|
|
9
|
%
|
|
38,061
|
|
|
9
|
%
|
|
40,004
|
|
|
10
|
%
|
|||
Royal Dutch Shell
|
|
26,070
|
|
|
6
|
%
|
|
31,370
|
|
|
7
|
%
|
|
68,884
|
|
|
17
|
%
|
Vessel
|
Capital cost component
|
Operating cost component
|
Other
|
Changes to hire rate in the extension period (if applicable)
|
Golar Spirit
|
Increases on a bi-annual basis based on a cost of living index.
|
Fluctuates annually based on changes to a specified cost of living index and U.S. dollar foreign exchange index.
|
Drydocking costs are included as part of the capital cost component.
|
n/a
|
Golar Winter
|
Increases on a bi-annual basis based on a cost of living index.
|
Fluctuates annually based on changes to a specified cost of living index and U.S. dollar foreign exchange index.
|
Drydocking costs are included as part of the capital cost component.
|
n/a
|
Golar Freeze
|
Fixed.
|
Annual adjustment based on actual costs.
|
|
The hire rate will be reduced by 64% from the initial hire rate.
|
NR Satu
|
This also includes a mooring capital element.
|
Annual adjustment based on actual costs.
|
There is also a tax component.
(1)
|
The capital element will decrease 12% in 2023, then by a further 7% in 2024 and 2025.
|
Golar Igloo
(2)
|
The hire rate is an all-inclusive daily fixed rate.
|
n/a
|
||
Golar Eskimo
|
Fixed for first five years of hire. Decreases by 6.4% after the first five years of hire.
|
Increases by a fixed percentage per annum.
|
n/a
|
n/a
|
Golar Mazo
|
Fixed.
|
Annual adjustment based on actual costs.
|
Reimbursement of costs relating to:
i) Drydocking
ii) Additional cost component.
(3)
|
n/a
|
Methane Princess
|
Fixed.
|
Increases by a fixed percentage per annum.
|
|
Reduces by approximately 37%.
|
Golar Grand
(4)
|
The hire rate is an all-inclusive daily fixed rate.
|
The hire rate with the
new Golar Grand charterer
will increase from the initial hire rate during the extension periods.
|
||
Golar Maria
|
The hire rate is an all-inclusive daily fixed rate.
|
n/a
|
(1)
|
The tax element shall be adjusted only when there is any change in Indonesian Tax Laws (including any changes in interpretation or implementation thereof) or any treaty to which Indonesia is party or the invalidity of any tax assumptions used in determining the tax element.
|
(2)
|
The
Golar Igloo
provides floating storage and regasification services to KNPC for a nine-month period each year (or the Regasification Season) until the termination of the charter. The Regasification Season commences, at KNPC’s election, between March 1 and March 31 of each year (or the Start Date) and ends nine months later (or the End Date). During the period between the End Date with respect to one Regasification Season and the Start Date of the next succeeding Regasification Season (or the Regasification Off-Season), we may charter the
Golar Igloo
to other customers under short-term charters.
|
(3)
|
The additional cost component comprises of reimbursement for certain costs associated with certain modifications, improvements, alterations or replacements that are required pursuant to the charter, requested by Pertamina, or that are estimated to cost more than $2 million and related to any financing we obtain at the request of Pertamina.
|
(4)
|
The
Golar Grand
is on hire to Golar until October 2017. In December 2015, the
Golar Grand
was placed in lay up and the hire rate was further reduced. In February 2017, we entered into a time charter agreement with the new Golar Grand charterer commencing in the second quarter of 2017. Following the commencement of the new time charter, we will continue receiving revenues from Golar at the originally agreed hire rate and any payments received from the new Golar Grand charterer will be paid to Golar until October 2017. The initial term of the new time charter is two years and the charterer has options to extend the charter by three one year periods and two further periods of up to two years each.
|
•
|
operational deficiencies, drydocking for repairs, maintenance or inspection, equipment breakdowns, or delays due to accidents, crewing strikes, certain vessel detentions or similar problems; or
|
•
|
our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew.
|
•
|
the occurrence of specified events of default;
|
•
|
requisition by any governmental authority;
|
•
|
force majeure after a continuous and specified period or in the event that war or hostilities materially and adversely affect the operations of the applicable vessel; and
|
•
|
specified extended periods of off-hire.
|
•
|
technical management, maintenance, dockings;
|
•
|
crew management;
|
•
|
procurement, purchasing, forwarding logistics;
|
•
|
marine operations;
|
•
|
vetting, oil major and terminal approvals;
|
•
|
shipyard supervision;
|
•
|
insurance; and
|
•
|
financial services.
|
•
|
injury to, destruction or loss of, or loss of use of, natural resource and the costs of assessment thereof;
|
•
|
injury to, or economic losses resulting from, the destruction of real and personal property;
|
•
|
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
•
|
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
•
|
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources;
|
•
|
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards.
|
•
|
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status;
|
•
|
on-board installation of vessel security alert systems, which do not sound on the vessel but only alerts the authorities on shore;
|
•
|
the development of vessel security plans;
|
•
|
ship identification number to be permanently marked on a vessel's hull;
|
•
|
a continuous synopsis record kept on board showing a vessel's history, including the name of the vessel and of the state whose flag the ship is entitled to fly, the date on which the vessel was registered with that state, the ship’s identification number, the port at which the vessel is registered and the name of the registered owner(s) and their registered address; and
|
•
|
compliance with flag state security certification requirements.
|
•
|
be organized in a jurisdiction outside the United States that grants an equivalent exemption from tax to corporations organized in the United States with respect to the types of U.S. Source International Transportation Income that we earn (or an Equivalent Exemption);
|
•
|
satisfy the Publicly Traded Test (as described below) or the Qualified Shareholder Stock Ownership Test (as described below); and
|
•
|
meet certain substantiation, reporting and other requirements.
|
•
|
individual residents of jurisdictions that grant an Equivalent Exemption;
|
•
|
non-U.S. corporations organized in jurisdictions that grant an Equivalent Exemption and that meet the Publicly Traded Test; or
|
•
|
certain other qualified persons described in the Section 883 Regulations (which we refer to collectively as Qualified Shareholders).
|
•
|
We intend to increase the size of our fleet by making other acquisitions
. Our growth strategy focuses on expanding our fleet through the acquisition of FSRUs and LNG carriers and in the future, FLNGs under long-term time charters from Golar or third parties. We may need to issue additional equity or incur additional indebtedness to fund additional vessels that we purchase.
|
•
|
Vessel operating and other costs may face industry-wide cost pressures.
Factors such as pressure on raw material prices, increased cost of qualified and experienced seafaring crew and changes in regulatory requirements could also increase operating expenditures. Although we continue to take measures to improve operational efficiencies and mitigate the impact of inflation and price escalations, future increases to operational costs are likely to occur.
|
•
|
We may enter into different financing arrangements
. Our financing arrangements currently in place may not be representative of the arrangements we will enter into in the future. For example, we may amend our existing credit facilities or enter into new financing arrangements. For descriptions of our current financing arrangements, please read “—B. Liquidity and Capital Resources—Borrowing Activities.”
|
•
|
Our results are affected by fluctuations in the fair value of our derivative instruments.
The change in fair value of some of our derivative instruments is included in our net income as some of our derivative instruments are not designated as hedges for accounting purposes. These changes may fluctuate significantly as interest rates fluctuate. Please read note 24 in the notes to our consolidated financial statements.
|
•
|
Our results may be affected by tax exposure and changes in deferred tax.
In 2016 and 2015, we recognized deferred tax assets relating to the recognition of certain historical tax positions relating to foreign tax operating losses in Indonesia and Jordan (2014: Indonesia only). Furthermore, in 2016 and 2015, we recognized a deferred tax liability relating to the excess of the tax basis depreciation over the accounting basis depreciation in connection with the
Golar Eskimo.
Please see note 9 in the notes to our consolidated financial statements. This may not have an impact on our future results as we may not recognize deferred tax in the future. Tax accounting and reporting judgments that we make may not be entirely free from doubt. It is possible that applicable tax authorities will disagree with our positions, possibly resulting in additional taxes being owed. For instance, the Indonesian tax authorities have notified one of our subsidiaries, PTGI, that it is canceling a previously granted waiver of VAT importation in the approximate amount of $24.0 million for the
NR Satu.
In addition, in April 2017 we received a letter from the Indonesian tax authorities, subsequent to their audit of PTGI’s 2014 tax returns, challenging certain of PTGI’s tax positions. In the event of an unfavorable outcome of our challenge of this ruling in Indonesian tax court, it is possible that PTGI will be liable for the VAT plus penalties and interest. See “Item 3. Risk Factors—We will be subject to taxes, which will reduce our cash available for distribution”.
|
•
|
The amount and timing of drydocking and the number of drydocking days of our vessels can significantly affect our revenues between periods.
Our vessels are off-hire at various points of time due to scheduled and unscheduled maintenance. During the years ended
December 31, 2016
,
2015
and
2014
, we had 88, 84, and nil off-hire days, respectively, relating to drydocking of our vessels. Material differences in the number of off-hire days from period to period could cause financial results to differ materially. The material impact of off-hire time on our business and results of operations is discussed below.
|
•
|
The Golar Igloo generated revenues during the first month of her three month Regasification Off-Season.
Under the
Golar Igloo
’s charter with KNPC,
Golar Igloo
is to provide FSRU services for nine months of each year (the regasification season). During the charter term, there is a three-month window each year from December until February, during which the
Golar Igloo
will not provide FSRU services to KNPC, permitting us to pursue spot carrier and other short-term business opportunities. KNPC extended the
Golar Igloo
’s
charter after the end of the regasification season until December 31 in 2016, 2015 and 2014. We cannot guarantee that the
Golar Igloo
will be employed each year during all or any part of her Regasification Off-Season.
|
•
|
Reductions of hire rates for extension periods may significantly affect our revenues
.
The
Golar Grand
is currently operating under a replacement time charter with Golar at a hire rate that is 75% of the rate paid by the previous charterer. Certain of our other time charters provide for significant reductions in hire rates payable during extension periods if the charterer extends the applicable charter beyond its initial term. These reductions range from 12% for the
NR Satu
to 64% for the
Golar Freeze
. Our results of operations will be negatively impacted in periods during which any of our vessels are operating under a reduced hire rate.
|
•
|
Vessels may be re-contracted at lower rates.
We currently derive all of our revenue from a limited number of customers on medium to long-term charters. The charters on the
Golar Spirit,
the
Methane Princess,
the
Golar Mazo
and the
Golar Grand
, are due to expire in 2017. We have entered into a new charter for the
Golar Grand
at a rate that is lower than the hire rate currently received under the time charter with Golar. Hire rates for FSRUs and LNG carriers fluctuate over time as a result of changes in the supply-demand balance relating to current and future FSRU and LNG carrier capacity. Hire rates at a time when we may be seeking a new charter may be lower than the hire rates at which our vessels are currently chartered. If rates are lower when we are seeking a new charter, or if we elect not to or are not able to re-charter a vessel, our earnings and ability to make distributions to our unitholders may decline. See “Item 3. Risk Factors—Hire rates for FSRUs and LNG carriers may fluctuate substantially. If rates are lower when we are seeking a new charter, our earnings and ability to make distributions to our unitholders may decline”.
|
•
|
the number of vessels in our fleet, and our ability to acquire additional vessels from Golar or from third parties;
|
•
|
our ability to maintain good working relationships with our key existing charterers and to increase the number of our charterers through the development of new working relationships;
|
•
|
demand for LNG shipping services and FSRU services, and the underlying demand for and supply of natural gas and LNG;
|
•
|
our ability to successfully employ our vessels at economically attractive rates, as our charters expire or are otherwise terminated;
|
•
|
the effective and efficient technical management of our vessels;
|
•
|
Golar’s ability to obtain and maintain major international energy company approvals and to satisfy their technical, health, safety and compliance standards; and
|
•
|
economic, regulatory, political and governmental conditions that affect the shipping and the LNG industry. This includes changes in the number of new LNG importing countries and regions and availability of surplus LNG from projects around the world, as well as structural LNG market changes allowing greater flexibility and enhanced competition with other energy sources.
|
•
|
the hire rate earned by our vessels and unscheduled off-hire days;
|
•
|
mark-to-market charges in interest rate swaps and foreign currency derivatives;
|
•
|
foreign currency exchange gains and losses;
|
•
|
our access to capital required to acquire additional vessels and/or to implement our business strategy;
|
•
|
the level of vessel operating costs; and
|
•
|
our level of debt and the related interest expense and amortization of principal.
|
•
|
The
Golar Mazo
’s charter provides for operating cost and insurance cost pass-throughs, and so we will be protected from the impact of the vast majority of such increases.
|
•
|
The
Methane Princess
’s and the
Golar Eskimo
’s charters provide that the operating cost component of the charter hire rate, established at the beginning of the charter, will increase by a fixed percentage per annum (except for insurance in the case of the
Methane Princess
, which is covered at cost).
|
•
|
Under the OSAs for both the
Golar Spirit
and the
Golar Winter
, the charter hire rates are payable in Brazilian Reals. The charter hire rates payable under the OSAs covers all vessel operating expenses, other than drydocking and insurance. The charter hire rates payable under the OSAs were established between the parties at the time the charter was entered into and will be increased based on a specified mix of consumer price and U.S. Dollar foreign exchange rate indices on an annual basis.
|
•
|
The
Golar Freeze
and the
NR Satu
time charters provides for annual adjustments to the operating expense component of the charter hire rate as necessary to take into account cost increases.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands, except TCE and average daily vessel operating costs)
|
|||||||||||||
Total operating revenues
|
$
|
441,598
|
|
|
$
|
434,687
|
|
|
$
|
6,911
|
|
|
2
|
%
|
Vessel operating expenses
|
59,886
|
|
|
65,244
|
|
|
(5,358
|
)
|
|
(8
|
)%
|
|||
Voyage and commission expenses
|
5,974
|
|
|
7,724
|
|
|
(1,750
|
)
|
|
(23
|
)%
|
|||
Administrative expenses
|
8,600
|
|
|
6,643
|
|
|
1,957
|
|
|
29
|
%
|
|||
Depreciation and amortization
|
100,468
|
|
|
99,256
|
|
|
1,212
|
|
|
1
|
%
|
|||
Other non-operating income
|
1,318
|
|
|
—
|
|
|
1,318
|
|
|
100
|
%
|
|||
Interest income
|
4,295
|
|
|
1,315
|
|
|
2,980
|
|
|
227
|
%
|
|||
Interest expense
|
(66,938
|
)
|
|
(61,632
|
)
|
|
(5,306
|
)
|
|
9
|
%
|
|||
Other financial items
|
(2,745
|
)
|
|
(17,151
|
)
|
|
14,406
|
|
|
(84
|
)%
|
|||
Taxes
|
(16,858
|
)
|
|
(5,669
|
)
|
|
(11,189
|
)
|
|
197
|
%
|
|||
Net income
|
185,742
|
|
|
172,683
|
|
|
13,059
|
|
|
8
|
%
|
|||
Non-controlling interest
|
(13,571
|
)
|
|
(10,547
|
)
|
|
(3,024
|
)
|
|
29
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data
(in US$)
:
|
|
|
|
|
|
|
|
|||||||
TCE
|
$
|
119,874
|
|
|
120,373
|
|
|
(499
|
)
|
|
—
|
%
|
||
Average daily vessel operating costs
|
16,362
|
|
|
17,969
|
|
|
(1,607
|
)
|
|
(9
|
)%
|
•
|
$6.5 million of increased revenue contribution from
Golar Eskimo
due to the expiration of the sub-lease with Golar on June 30, 2015 and commencement of charter hire revenue from the Hashemite Kingdom of Jordan at a higher rate;
|
•
|
$4.5 million of additional revenue from the
Golar Freeze
representing a full year of revenue compared to approximately ten months in 2015 following her scheduled drydocking in April 2015; and
|
•
|
$3.3 million increase in revenue from the
Golar Winter
and the
Golar Spirit
mainly due to $2.0 million withholding tax refund from our operations in Brazil arising from over payments between 2008 to 2012. We also received interest on the withholding tax refund which is presented as other non-operating income.
|
•
|
a $6.0 million reduction in revenue from the
Golar Grand,
following her redelivery from Royal Dutch Shell in mid-February 2015 and her subsequent charter back to Golar at a lower daily time charter rate; and
|
•
|
a $2.0 million reduction in revenue from the
Golar Maria
resulting from her scheduled drydocking in 2016.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
Calendar days less scheduled off-hire days
|
3,634
|
|
|
3,547
|
|
|
87
|
|
|
2
|
%
|
|||
Average daily TCE (in $)
|
$
|
119,874
|
|
|
$
|
120,373
|
|
|
$
|
(499
|
)
|
|
—
|
%
|
•
|
$4.0 million reduction in the operating cost for the
Golar Grand
due to the vessel being placed in lay-up in December 2015; and
|
•
|
$2.0 million in additional repairs and maintenance costs incurred in 2015 in respect of the
Golar Freeze
due to her scheduled dry docking in April 2015. There were no comparable costs in the year ended December 31, 2016.
|
•
|
$1.5 million in additional costs for
Golar Igloo
, due to higher upstoring and repairs and maintenance cost during her regasification off-season period; and
|
•
|
$1.0 million of incremental repairs and maintenance costs for the
NR Satu
following her scheduled maintenance window during the year ended
December 31, 2016
. There were no comparable costs in 2015.
|
•
|
$0.8 million in additional depreciation on the
Golar Maria
following completion of her scheduled drydocking in the second quarter of 2016; and
|
•
|
$1.3 million of incremental depreciation and intangibles amortization from the
Golar Eskimo
following her acquisition in January 2015 mainly due to the full year depreciation and amortization recognized in 2016 compared to eleven months in 2015. Also, the finalization of the allocation of the purchase price for the Golar Eskimo to the identifiable assets was completed in the fourth quarter of 2015.
|
•
|
$5.0 million incremental interest arising on the new $800 million credit facility entered into in May 2016. The new facility is larger and on average accrues interest at a margin higher than the facilities it replaced;
|
•
|
$3.4 million incremental interest on our $150.0 million 2015 Norwegian Bonds issued in May 2015 (the “2015 Norwegian Bonds”). A full year of interest was incurred in the year ended December 31, 2016 compared with approximately seven months of interest in the same period in 2015; and
|
•
|
an increase in the amortization of deferred financing costs by $2.1 million resulting from the write-off of deferred financing costs following the refinancing of our credit facilities secured by seven of our vessels in May 2016.
|
•
|
$1.0 million reduction in interest expense due to the repayment of the Eskimo vendor loan in November 2015.
|
•
|
a $3.0 million decrease in interest expense on the Methane Princess lease following changes to corporation tax rates and the strengthening of the U.S. Dollar to Pound Sterling; and
|
•
|
a decline of $1.2 million in interest expense arising on designated swaps due to the de-designation of swaps related to the Golar LNG Partners Credit Facility following its refinancing in May 2016.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mark-to-market gains for interest rate swaps
|
$
|
9,893
|
|
|
$
|
655
|
|
|
$
|
9,238
|
|
|
1,410
|
%
|
Interest expense on un-designated interest rate swaps
|
(10,824
|
)
|
|
(14,385
|
)
|
|
3,561
|
|
|
(25
|
)%
|
|||
Net unrealized and realized losses on interest rate swaps
|
(931
|
)
|
|
(13,730
|
)
|
|
12,799
|
|
|
(93
|
)%
|
|||
Financing arrangement fees and other costs
|
(1,468
|
)
|
|
(1,694
|
)
|
|
226
|
|
|
(13
|
)%
|
|||
Other
|
(346
|
)
|
|
(1,727
|
)
|
|
1,381
|
|
|
(80
|
)%
|
|||
Other financial items, net
|
$
|
(2,745
|
)
|
|
$
|
(17,151
|
)
|
|
$
|
14,406
|
|
|
(84
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands, except TCE and average daily vessel operating costs)
|
|||||||||||||
Total operating revenues
|
$
|
434,687
|
|
|
$
|
396,026
|
|
|
$
|
38,661
|
|
|
10
|
%
|
Vessel operating expenses
|
65,244
|
|
|
59,191
|
|
|
6,053
|
|
|
10
|
%
|
|||
Voyage and commission expenses
|
7,724
|
|
|
6,048
|
|
|
1,676
|
|
|
28
|
%
|
|||
Administrative expenses
|
6,643
|
|
|
5,757
|
|
|
886
|
|
|
15
|
%
|
|||
Depreciation and amortization
|
99,256
|
|
|
80,574
|
|
|
18,682
|
|
|
23
|
%
|
|||
Interest income
|
1,315
|
|
|
1,131
|
|
|
184
|
|
|
16
|
%
|
|||
Interest expense
|
(61,632
|
)
|
|
(47,335
|
)
|
|
(14,297
|
)
|
|
30
|
%
|
|||
Other financial items
|
(17,151
|
)
|
|
(18,564
|
)
|
|
1,413
|
|
|
(8
|
)%
|
|||
Taxes
|
(5,669
|
)
|
|
5,047
|
|
|
(10,716
|
)
|
|
(212
|
)%
|
|||
Net income
|
172,683
|
|
|
184,735
|
|
|
(12,052
|
)
|
|
(7
|
)%
|
|||
Non-controlling interest
|
(10,547
|
)
|
|
(10,581
|
)
|
|
34
|
|
|
—
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data
(in US$)
:
|
|
|
|
|
|
|
|
|||||||
TCE
|
120,373
|
|
|
121,906
|
|
|
(1,533
|
)
|
|
(1
|
)%
|
|||
Average daily vessel operating costs
|
17,969
|
|
|
18,502
|
|
|
(533
|
)
|
|
(3
|
)%
|
•
|
$50.6 million revenue contribution from the
Golar Eskimo
following her acquisition in January 2015; and
|
•
|
$4.2 million of additional revenue in 2015 from the
Golar Igloo
due to recognition of ten months of revenue as compared to approximately nine months in 2014, following her acquisition in March 2014.
|
•
|
a $6.4 million reduction in revenue from the
Golar Freeze
due to her scheduled drydocking in 2015;
|
•
|
a $9.1 million reduction in revenue from the
Golar Grand,
following her redelivery from Royal Dutch Shell in mid-February 2015 and her subsequent charter back to Golar at a lower daily time charter rate; and
|
•
|
a $1.9 million reduction in revenue from the
Golar Mazo
, due to the effect of the accelerated release of drydocking revenue in 2014, as she drydocked earlier than expected.
|
•
|
$5.9 million incremental operating costs relating to the
Golar Eskimo
following her acquisition in January 2015; and
|
•
|
$1.8 million in additional costs for
Golar Igloo
, due to recognition of a full year’s operating expenses compared to approximately nine months in 2014, following her acquisition in March 2014.
|
•
|
$16.6 million of vessel depreciation and intangibles amortization from the
Golar Eskimo
following her acquisition in January 2015; and
|
•
|
$3.2 million of incremental vessel depreciation and intangibles amortization in 2015 from the
Golar Igloo
, which represents a full year’s depreciation in 2015 compared to only approximately nine months of depreciation, following her acquisition in March 2014.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mark-to-market gains (losses) for interest rate swaps
|
$
|
655
|
|
|
$
|
(5,953
|
)
|
|
$
|
6,608
|
|
|
(111
|
)%
|
Interest expense on un-designated interest rate swaps
|
(14,385
|
)
|
|
(12,163
|
)
|
|
(2,222
|
)
|
|
18
|
%
|
|||
Net unrealized and realized (losses) gains on interest rate swaps
|
(13,730
|
)
|
|
(18,116
|
)
|
|
4,386
|
|
|
(24
|
)%
|
|||
Financing arrangement fees and other costs
|
(1,694
|
)
|
|
(12
|
)
|
|
(1,682
|
)
|
|
14,017
|
%
|
|||
Other
|
(1,727
|
)
|
|
(333
|
)
|
|
(1,394
|
)
|
|
419
|
%
|
|||
Other financial items, net
|
$
|
(17,151
|
)
|
|
$
|
(18,461
|
)
|
|
$
|
1,310
|
|
|
(7
|
)%
|
•
|
In December 2016, we received notice from Petrobras that it intended to terminate the Golar Spirit charter early, subject to its payment of the early termination fee. If we are unable to employ the Golar Spirit under a suitable replacement charter by the 90th day following the early charter termination date of June 23, 2017, we will be required to provide additional security to the lenders under our $800 million credit facility in the form of $40 million in cash collateral.
|
•
|
we issued senior unsecured bonds in the aggregate amount of
$250.0 million
bond offering in the Nordic bond market in February 2017;
|
•
|
we sold 5,175,000 common units in an underwritten public offering and 94,714 general partner units to our general partner, which generated proceeds of
$119.4 million
;
|
•
|
we paid a cash distribution of $0.5775 per unit ($37.8 million in the aggregate) with respect to the quarter ended
December 31, 2016
in February 2017;
|
•
|
we made $20.7 million of scheduled debt repayments and given surplus funds from our February 2017 equity offering and 2017 Norwegian Bonds offering, we chose to temporarily make use of these funds by repaying $125 million on the revolver under the $800 million credit facility up to April 2017;
|
•
|
as of April 24, 2017, we have repurchased a nominal amount of $118.2 million (NOK 996.0 million) of the High-Yield Bonds and settled the corresponding share of the related cross currency interest rate swap; and
|
•
|
we declared a quarterly cash distribution with respect to the quarter ended
March 31, 2017
of $0.5775 per unit which will be paid on
May 12, 2017
to all unitholders of record as of
May 5, 2017
.
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
$
|
261,232
|
|
|
$
|
212,230
|
|
|
$
|
276,980
|
|
Net cash (used in) provided by investing activities
|
(107,247
|
)
|
|
734
|
|
|
(167,755
|
)
|
|||
Net cash used in financing activities
|
(128,961
|
)
|
|
(271,276
|
)
|
|
(113,327
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
25,024
|
|
|
(58,312
|
)
|
|
(4,102
|
)
|
|||
Cash and cash equivalents at beginning of year
|
40,686
|
|
|
98,998
|
|
|
103,100
|
|
|||
Cash and cash equivalents at end of year
|
65,710
|
|
|
40,686
|
|
|
98,998
|
|
•
|
a $6.9 million increase in revenues from charterers coupled by an improvement in the collection of trade receivables by $12.8 million;
|
•
|
a decrease in drydocking expenditure of $11.0 million, by virtue of the lower cost of the scheduled drydocking of the LNG carrier, the
Golar Maria
in 2016 compared with the scheduled drydocking of the FSRU, the
Golar Freeze
in 2015; and
|
•
|
a $7.7 million decrease in restricted cash primarily related to the
Golar Eskimo
performance bond in 2015.
|
•
|
an increase in drydocking expenditure of $12.6 million, by virtue of the scheduled drydocking of the FSRU, the
Golar Freeze
in 2015, compared to the drydocking of the LNG carrier, the
Golar Mazo
in 2014 as well as the loss of revenue contribution from the
Golar Freeze
, while in drydock in 2015;
|
•
|
a $9.1 million reduction in the revenue attributable to the
Golar Grand,
following her redelivery from Royal Dutch Shell in mid February 2015 and her subsequent charter back to Golar at a lower daily time charter rate;
|
•
|
an increase of $7.6 million of restricted cash for the
Golar Eskimo
and
Golar Igloo;
and
|
•
|
a general increase in working capital, specifically, the increase in trade receivables and amounts due from/to Golar of $11.7 million and $18.7 million, respectively.
|
•
|
payment of cash distributions during the year of $167.0 million ($12.4 million of which was distributions to our non-controlling interests);
|
•
|
repayment of debt (including debt due to related party) and lease obligations of $770.4 million. Of this amount, $681.4 million relates to repayment of the Maria and Freeze Facility, the Golar LNG Partners Credit Facility, the Golar Partners Operating Credit Facility and the Golar Igloo Debt in connection with their refinancing in May 2016 into the $800.0 million credit facility;
|
•
|
financing and debt settlement costs of
$13.5 million
mainly in connection with the new $800.0 million credit facility; and
|
•
|
payment of $0.5 million in connection with our common unit repurchase program.
|
•
|
the receipt of aggregate proceeds of $815.0 million from our existing debt or debt refinancings, comprising (i) $40.0 million drawdown of our long-term revolving credit facilities; and (ii) $775.0 million proceeds from the $800 million credit facility; and
|
•
|
a $7.6 million reduction in restricted cash, mainly due to a decrease in the cash collateral requirements associated with our cross-currency swap and a reduction in the cash balances held by Eskimo SPV.
|
•
|
payment of cash distributions during the year of $164.3 million ($11.4 million of which was distributions to our non-controlling interests);
|
•
|
repayment of debt (including debt due to related party) and lease obligations of $713.8 million. Of this amount, $220 million relates to repayment of the Eskimo Vendor Loan from Golar and $133.4 million relates to the settlement of the outstanding debt balances on the Golar Maria and the Golar Freeze debt facilities in connection with their refinancing in June 2015;
|
•
|
net cash deposits of $31.2 million to restricted cash balances, which is mainly attributable to additional cash collateral requirements associated with our cross currency interest rate swap arrangement resulting from the depreciation of the marked-to-market valuation of the swap.
|
•
|
payment of cash distributions during the year of $153.9 million (of which $13.7 million of which was distributions to our non-controlling interests);
|
•
|
repayment of long term debt and lease obligations of $93.6 million.
|
|
December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
$800 million credit facility
|
$
|
740,667
|
|
|
—
|
|
|
High-Yield Bonds
|
150,452
|
|
|
147,007
|
|
||
2015 Norwegian Bonds
|
150,000
|
|
|
150,000
|
|
||
NR Satu Facility
|
117,800
|
|
|
112,100
|
|
||
Eskimo SPV Debt
|
232,931
|
|
|
254,070
|
|
||
Maria and Freeze Facility
|
—
|
|
|
174,000
|
|
||
Golar LNG Partners Credit Facility
|
—
|
|
|
181,500
|
|
||
Golar Partners Operating Credit Facility
|
—
|
|
|
185,000
|
|
||
Golar Igloo Debt
|
—
|
|
|
141,111
|
|
||
Total debt
|
$
|
1,391,850
|
|
|
$
|
1,344,788
|
|
Deferred finance charges
|
$
|
(17,140
|
)
|
|
$
|
(13,676
|
)
|
Total debt, net of deferred finance charges
|
$
|
1,374,710
|
|
|
$
|
1,331,112
|
|
Year Ending December 31,
|
(in thousands)
|
||
2017
(1)
|
$
|
233,419
|
|
2018
|
72,317
|
|
|
2019
|
135,183
|
|
|
2020
|
202,000
|
|
|
2021
|
516,000
|
|
|
2022 and thereafter
|
232,931
|
|
|
Total
|
$
|
1,391,850
|
|
•
|
merge or consolidate with any other person;
|
•
|
de-merge or carry out a corporate reorganization splitting the Partnership into two or more separate entities;
|
•
|
change or cease to carry on the general nature or scope of our business;
|
•
|
sell or dispose of all or a substantial part of our assets or operations;
|
•
|
enter into any transaction with related parties other than on an arms’ length basis; and
|
•
|
change our type of organization or jurisdiction of organization.
|
•
|
free liquid assets of at least $30 million;
|
•
|
a minimum EBITDA to debt service ratio of 1.15:1; and
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1.
|
•
|
free liquid assets of at least $30 million;
|
•
|
a minimum EBITDA to debt service ratio of 1.10:1; and
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1.
|
•
|
free liquid assets of at least $30 million throughout the charter period;
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1; and
|
•
|
a consolidated tangible net worth of $123.95 million.
|
Year ending December 31,
(in thousands)
|
|
Methane
Princess Lease
|
||
2017
|
|
$
|
6,929
|
|
2018
|
|
7,208
|
|
|
2019
|
|
7,489
|
|
|
2020
|
|
7,775
|
|
|
2021
|
|
8,078
|
|
|
2022 and thereafter
|
|
161,594
|
|
|
Total minimum lease payments
|
|
199,073
|
|
|
Less: Imputed interest
|
|
(81,322
|
)
|
|
Present value of minimum lease payments
|
|
$
|
117,751
|
|
•
|
merge or consolidate with any other person;
|
•
|
make certain capital expenditures;
|
•
|
pay distributions to our unitholders;
|
•
|
terminate or materially amend certain of our charters;
|
•
|
enter into any other line of business;
|
•
|
make any acquisitions;
|
•
|
incur additional indebtedness or grant any liens to secure any of our existing or future indebtedness;
|
•
|
enter into sale transactions in respect of the vessel securing such credit facility;
|
•
|
enter into sale-leaseback transactions in respect of certain of our vessels; and
|
•
|
enter into transactions with our affiliates.
|
•
|
Cash flows are assumed to be in line with pre-existing contracts and are utilized based on historical performance levels;
|
•
|
For our LNG carriers, once the initial contract period expires, we have estimated cash flows at the lower of our estimated current long-term charter rate (based on a third party valuation) or option renewal rate with the existing counterparty;
|
•
|
For our FSRUs, once the initial contract period expires, we have estimated cash flows at the lower of our existing contract option renewal rate or estimated long-term charter rate (based on a third party valuation); and
|
•
|
We have made certain assumptions in relation to the scrap values of our vessels at the end of their useful lives of 40-55 years.
|
|
Total
Obligation
|
|
Due in
2017
|
|
Due in
2018—2019
|
|
Due in
2020—2021
|
|
Due
Thereafter
|
|||||
|
(in millions)
|
|||||||||||||
Long-term debt
(1)
|
1,391.8
|
|
|
233.4
|
|
|
175.0
|
|
|
750.5
|
|
|
232.9
|
|
Interest commitments on long-term debt - floating and other interest rate swaps
(2)
|
261.3
|
|
|
65.3
|
|
|
95.0
|
|
|
57.3
|
|
|
43.7
|
|
Capital lease obligations
|
117.8
|
|
|
0.8
|
|
|
2.7
|
|
|
4.1
|
|
|
110.2
|
|
Interest commitments on capital lease obligations
(2)(3)
|
81.3
|
|
|
6.1
|
|
|
12.0
|
|
|
11.7
|
|
|
51.5
|
|
Total
|
1,852.2
|
|
|
305.6
|
|
|
284.7
|
|
|
823.6
|
|
|
438.3
|
|
(1)
|
Amounts shown gross of deferred financing costs of
$17.1 million
.
|
(2)
|
Our interest commitment on our long-term debt is calculated based on assumed USD LIBOR rates of between 0.91% and 2.80% respectively, taking into account our various margin rates and interest rate swaps associated with our debt. Our interest commitment on our capital lease obligations is calculated on an assumed average Pound Sterling LIBOR of 5.2%.
|
(3)
|
In the event of any adverse tax rate changes or rulings our lease obligation with regard to the
Methane Princess
could increase significantly (please read the discussion above under “—Liquidity and Capital Resources—Borrowing Activities—Capital Lease Obligations”). However, Golar has agreed to indemnify us against any such increase.
|
Name
|
|
Age
|
|
Position
|
Tor Olav Trøim
|
|
54
|
|
Chairman
|
Paul Leand Jr.
|
|
50
|
|
Director
|
Lori Wheeler Naess
|
|
46
|
|
Director and Audit Committee Chairperson
|
Carl Steen
|
|
66
|
|
Director, Conflicts and Audit Committee Member
|
Alf Thorkildsen
|
|
60
|
|
Director, Conflicts and Audit Committee Member
|
Andrew Whalley
|
|
50
|
|
Director
|
Jeremy Kramer
|
|
55
|
|
Director and Conflicts Committee Member
|
Name
|
|
Age
|
|
Position
|
Graham Robjohns
|
|
52
|
|
Principal Executive Officer
|
Øistein Dahl
|
|
56
|
|
Chief Operating Officer
|
Brian Tienzo
|
|
43
|
|
Principal Financial and Accounting Officer
|
|
|
Common Units
Beneficially Owned
|
|||
Name of Beneficial Owner
|
|
Number
|
Percent
|
||
Golar LNG Limited
(1)
|
|
20,852,290
|
|
30.1
|
%
|
Kayne Anderson Capital Advisors, L.P.
(2)
|
|
4,251,383
|
|
6.1
|
%
|
Oppenheimer Funds, Inc.
(3)
|
|
4,524,586
|
|
6.5
|
%
|
All directors and executive officers as a group (10 persons)
|
|
*
|
|
*
|
|
(1)
|
Based solely on information contained in a Schedule 13G/A filed on March 17, 2017 by Golar LNG Limited.
|
(2)
|
Based solely on information contained in a Schedule 13G/A filed on January 26, 2017 by Kayne Anderson Capital Advisors, LP.
|
(3)
|
Based solely on information contained in a Schedule 13G/A filed on January 31, 2017 by Oppenheimer Funds, Inc.
|
(1)
|
acquiring, owning, operating or chartering Non-Five-Year Vessels;
|
(2)
|
acquiring one or more Five-Year Vessels if Golar promptly offers to sell the vessel to us for the acquisition price plus any administrative costs (including re-flagging and reasonable legal costs) associated with the transfer to us at the time of the acquisition;
|
(3)
|
putting a Non-Five-Year Vessel under charter for five or more years if Golar offers to sell the vessel to us for fair market value (x) promptly after the time it becomes a Five-Year Vessel and (y) at each renewal or extension of that charter for five or more years;
|
(4)
|
acquiring one or more Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that:
|
(a)
|
if less than a majority of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Golar’s board of directors, Golar must offer to sell such vessels to us for their fair market value plus any additional tax or other similar costs that Golar incurs in connection with the acquisition and the transfer of such vessels to us separate from the acquired business; and
|
(b)
|
if a majority or more of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Golar’s board of directors, Golar must notify us of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, we will notify Golar if we wish to acquire such vessels in cooperation and simultaneously with Golar acquiring the Non-Five-Year Vessels. If we do not notify Golar of our intent to pursue the acquisition within 10 days, Golar may proceed with the acquisition and then offer to sell such vessels to us as provided in (a) above;
|
(5)
|
acquiring a non-controlling interest in any company, business or pool of assets;
|
(6)
|
acquiring, owning, operating or chartering any Five-Year Vessel if we do not fulfill our obligation to purchase such vessel in accordance with the terms of any existing or future agreement;
|
(7)
|
acquiring, owning, operating or chartering a Five-Year Vessel subject to the offers to us described in paragraphs (2), (3) and (4) above pending our determination whether to accept such offers and pending the closing of any offers we accept;
|
(8)
|
providing ship management services relating to any vessel; or
|
(9)
|
acquiring, owning, operating or chartering a Five-Year Vessel if we have previously advised Golar that we consent to such acquisition, operation or charter.
|
(1)
|
prevent us from owning, operating or chartering any Non-Five-Year Vessel that was previously a Five-Year Vessel while owned by us;
|
(2)
|
prevent us or any of our subsidiaries from acquiring Non-Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that:
|
(a)
|
if less than a majority of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by us, we must offer to sell such vessels to Golar for their fair market value plus any additional tax or other similar costs that we incur in connection with the acquisition and the transfer of such vessels to Golar separate from the acquired business; and
|
(b)
|
if a majority or more of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by us, we must notify Golar of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, Golar must notify us if it wishes to acquire the Non-Five-Year Vessels in cooperation and simultaneously with us acquiring the Five-Year Vessels. If Golar does not notify us of its intent to pursue the acquisition within 10 days, we may proceed with the acquisition and then offer to sell such vessels to Golar as provided in (a) above;
|
(3)
|
prevent us or any of our subsidiaries from acquiring, owning, operating or chartering any Non-Five-Year Vessels subject to the offer to Golar described in paragraph (2) above, pending its determination whether to accept such offer and pending the closing of any offer it accepts; or
|
(4)
|
prevent us or any of our subsidiaries from acquiring, owning, operating or chartering Non-Five-Year Vessels if Golar has previously advised us that it consents to such acquisition, ownership, operation or charter.
|
•
|
certain income tax liabilities attributable to the operation of the assets contributed or sold to us prior to the time they were contributed or sold; and
|
•
|
any liabilities in excess of our scheduled payments under the UK tax lease used to finance the
Methane Princess
, including liabilities in connection with termination of such lease.
|
•
|
Commercial and technical management of the vessel.
Managing day-to-day vessel operations, including but not limited to, seeking, negotiating and administering charter parties with respect to the vessels and receipts of payments thereunder, ensuring regulatory compliance, arranging for the vetting of vessels, appointing counsel and negotiating the settlement of all claims in connection with the operation of each vessel, appointing surveyors and technical consultants as necessary, arranging and supervising of drydockings, repairs, alterations and maintenance of such vessel and purchasing of stores, spares and lubricating oils, arranging insurance for vessels and providing technical support.
|
•
|
Vessel maintenance and crewing.
This includes supervising the maintenance and general efficiency of vessels, and ensuring the vessels are in seaworthy condition, provision of competent, suitably qualified crew for each vessel and arranging transportation for crew.
|
Vessels
|
Vessel Management Agreements
|
|
|
Term
|
Notice for termination
|
Golar Mazo*
Methane Princess
Golar Spirit
Golar Winter
Golar Freeze
NR Satu
Golar Grand
Golar Maria Golar Igloo Golar Eskimo
|
Equal to the Pertamina charter term
Indefinite
Indefinite
Indefinite
Indefinite
Indefinite
Indefinite
Indefinite Indefinite Indefinite
|
12 months**
12 months
12 months
12 months
12 months
12 months
12 months
12 months
12 months
12 months
|
•
|
Our unitholders have no contractual or other legal right to receive distributions other than the obligation under our partnership agreement to distribute available cash on a quarterly basis, which is subject to the broad discretion of our board of directors to establish reserves and other limitations.
|
•
|
We will be subject to restrictions on distributions under our financing arrangements. Our financing arrangements contain material financial tests and covenants that must be satisfied in order to pay distributions. If we are unable to satisfy the restrictions included in any of our financing arrangements or are otherwise in default under any of those agreements, it could have a material adverse effect on our ability to make cash distributions to our unitholders, notwithstanding our stated cash distribution policy.
|
•
|
We are required to make substantial capital expenditures to maintain and replace our fleet. These expenditures may fluctuate significantly over time, particularly as our vessels near the end of their useful lives. In order to minimize these fluctuations, our partnership agreement requires us to deduct estimated, as opposed to actual, maintenance and replacement capital expenditures from the amount of cash that we would otherwise have available for distribution to our unitholders. In years when estimated maintenance and replacement capital expenditures are higher than actual maintenance and replacement capital expenditures, the amount of cash available for distribution to unitholders will be lower than if actual maintenance and replacement capital expenditures were deducted.
|
•
|
Although our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions contained therein requiring us to make cash distributions, may be amended. Our partnership agreement can be amended with the approval of a majority of the outstanding common units. Golar currently owns approximately 30.1% of our common units.
|
•
|
Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy and the decision to make any distribution is determined by our board of directors, taking into consideration the terms of our partnership agreement.
|
•
|
Under Section 51 of the Marshall Islands Act, we may not make a distribution to unitholders if the distribution would cause our liabilities to exceed the fair value of our assets.
|
•
|
PTGI is subject to restrictions on distributions under Indonesian laws due to its formation under the laws of Indonesia. Under Article 71.3 of the Indonesian Company Law (Law No. 40 of 2007), dividend distributions may be made only if PTGI has positive retained earnings. For the year ended December 31, 2016, PTGI paid $6.1 million of dividends to PT Pesona.
|
•
|
We may lack sufficient cash to pay distributions to our unitholders due to decreases in total operating revenues, decreases in hire rates, the loss of a vessel (including, without limitation, through a customer’s exercise of its purchase option) or increases in operating or general and administrative expenses, principal and interest payments on outstanding debt, taxes, working capital requirements, maintenance and replacement capital expenditures or anticipated cash needs. Please read “Item 3. Key Information—D. Risk Factors” for a discussion of these factors.
|
|
Old IDRs (Cancelled)
|
New IDRs
|
||||||
|
Total Quarterly Distribution Target Amount
|
Marginal Percentage Interest in Distributions
|
Total Quarterly Distribution Target Amount
|
Marginal Percentage Interest in Distributions
|
||||
|
Common Unitholders
|
General Partner
|
IDR Holders
|
Common Unitholders
|
General Partner
|
IDR Holders
|
||
Minimum Quarterly Distribution
|
$0.3850
|
98%
|
2%
|
0%
|
$0.5775
|
No Change
|
||
First Target Distribution
|
Up to $0.4428
|
98%
|
2%
|
0%
|
Up to $0.6641
|
|||
Second Target Distribution
|
Above $0.4428 up to $0.4813
|
85%
|
2%
|
13%
|
Above $0.6641 up to $0.7219
|
|||
Third Target Distribution
|
Above $0.4813 up to $0.5775
|
75%
|
2%
|
23%
|
Above $0.7219 up to $0.8663
|
|||
Thereafter
|
Above $0.5775
|
50%
|
2%
|
48%
|
Above $0.8663
|
|
High
|
|
Low
|
||||
Year ended December 31, 2016
|
$
|
24.76
|
|
|
$
|
8.02
|
|
Year ended December 31, 2015
|
$
|
32.28
|
|
|
$
|
7.55
|
|
Year ended December 31, 2014
|
$
|
39.35
|
|
|
$
|
26.54
|
|
Year ended December 31, 2013
|
$
|
36.00
|
|
|
$
|
27.55
|
|
Year ended December 31, 2012
|
$
|
39.05
|
|
|
$
|
25.52
|
|
|
|
|
|
||||
Second quarter 2017
(1)
|
$
|
22.96
|
|
|
$
|
21.80
|
|
First quarter 2017
|
$
|
25.82
|
|
|
$
|
21.25
|
|
Fourth quarter 2016
|
$
|
24.76
|
|
|
$
|
18.32
|
|
Third quarter 2016
|
$
|
20.60
|
|
|
$
|
17.38
|
|
Second quarter 2016
|
$
|
19.93
|
|
|
$
|
14.00
|
|
First quarter 2016
|
$
|
16.63
|
|
|
$
|
8.02
|
|
Fourth quarter 2015
|
$
|
18.66
|
|
|
$
|
7.55
|
|
Third quarter 2015
|
$
|
25.10
|
|
|
$
|
14.14
|
|
Second quarter 2015
|
$
|
30.25
|
|
|
$
|
24.31
|
|
First quarter 2015
|
$
|
32.28
|
|
|
$
|
24.12
|
|
|
|
|
|
||||
Month ended April 30, 2017
(1)
|
$
|
22.96
|
|
|
$
|
21.80
|
|
Month ended March 31, 2017
|
$
|
23.19
|
|
|
$
|
21.25
|
|
Month ended February 28, 2017
|
$
|
25.82
|
|
|
$
|
21.55
|
|
Month ended January 31, 2017
|
$
|
24.91
|
|
|
$
|
22.14
|
|
Month ended December 31, 2016
|
$
|
24.76
|
|
|
$
|
21.38
|
|
Month ended November 30, 2016
|
$
|
22.69
|
|
|
$
|
18.32
|
|
Month ended October 31, 2016
|
$
|
22.42
|
|
|
$
|
18.98
|
|
1.
|
Credit facility agreement dated September 29, 2008 providing for a Senior Secured Revolving Credit Facility by and among Golar LNG Partners L.P. (as borrower) and the Banks and Financial Institutions Referred to therein (as lenders). In September 2008, we entered into a revolving credit facility with a banking consortium to refinance existing loan facilities in respect of two of our vessels, the
Methane Princess
and the
Golar Spirit
(or the Golar LNG Partners credit facility). The loan is secured against the
Golar Spirit
and assignment to the lending bank of a mortgage given to us by the lessors of the
Methane Princess
and the
Golar Spirit
, with a second priority charge over the
Golar Mazo
. The Golar LNG Partners credit facility accrues floating interest at a rate per annum equal to LIBOR plus a margin. See “Item 5—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a summary of certain terms.
|
2.
|
Omnibus Agreement dated April 13, 2011, by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
3.
|
Amendment No. 1 to Omnibus Agreement, dated October 5, 2011 by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
4.
|
First Amended and Restated Management and Administrative Services Agreement between Golar LNG Partners LP and Golar Management Limited. In connection with our initial public offering, we entered into a management and administrative services agreement (as amended and restated, the management and administrative services agreement) with Golar Management, pursuant to which Golar Management agreed to provide certain management and administrative support services to us. As of July 1, 2011, we and Golar Management entered into an amended and restated management and administrative services agreement to reflect changes in the titles of certain of our officers. The material provisions of the amended and restated management and administrative services agreement, including terms related to our obligations and the obligations of Golar Management to provide us with services, remain unchanged from those contained in the management and administrative services agreement entered into at the time of our initial public offering. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
5.
|
Contribution and Conveyance Agreement, dated as of April 5, 2011, among Golar LNG Limited, Golar GP LLC, Golar LNG Partners LP, Golar LNG Holding Co., and Golar Partners Operating LLC, pursuant to which, among other things, Golar contributed interests in certain vessels in our initial fleet to us in connection with our initial public offering.
|
6.
|
$20.0 Million Revolving Credit Agreement, dated April 11, 2011, by and between Golar LNG Partners LP and Golar LNG Limited, as amended by supplemental deed dated April 29, 2015. In connection with our initial public offering, we entered into a $20.0 million revolving credit facility (or the sponsor credit facility) with Golar, to be used to fund our working capital requirements. The sponsor credit facility matured in June 2015.
|
7.
|
Purchase, Sale and Contribution Agreement, dated October 5, 2011, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., pursuant to which we acquired a 100% interest in subsidiaries that own and operate the FSRU, the
Golar Freeze
from Golar for a purchase price of $330.0 million for the vessel plus $9.0 million of working capital adjustments less assumed bank debt of $108.0 million.
|
8.
|
Purchase, Sale and Contribution Agreement, dated July 9, 2012, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., pursuant to which we acquired from Golar interests in the companies that own and operate the NR Satu for a purchase price of approximately $385.0 million for the vessel plus working capital adjustments of $3.0 million.
|
9.
|
Purchase, Sale and Contribution Agreement, dated November 1, 2012, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd, providing for, among other things, the acquisition of the
Golar Grand
for a purchase price of $265.0 million for the vessel plus working capital adjustments of $2.6 million less the assumed capital lease obligations of $90.8 million.
|
10.
|
$175 million Facility Agreement, dated December 14, 2012, by and among a group of banks as the lender and PT Golar Indonesia as the borrower. PT Golar Indonesia, the company that owns and operates the FSRU,
NR Satu
, entered into a 7 year secured loan facility. The total facility amount is $175 million and is split into two tranches, a $155 million term loan facility and a $20 million revolving facility. The facility is with a syndicate of banks and bears interest at LIBOR plus a margin of 3.5%. The loan is payable on a quarterly basis with a final balloon payment of $52.5 million payable after 7 years. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long Term Debt—NR Satu Facility” for a summary of certain terms.
|
11.
|
Purchase, Sale and Contribution Agreement, dated January 30, 2013, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Maria f
or a purchase price of approximately $215.0 million less the assumed debt of $89.5 million.
|
12.
|
Bond Agreement dated October 11, 2012 between Golar LNG Partners LP and Norsk Tillitsmann ASA as bond trustee. We completed the issuance of NOK 1,300 million senior unsecured bonds that mature in October 2017. The bonds bear interest at a rate equal to 3 months NIBOR plus a margin of 5.20% payable quarterly. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-term Debt—Golar Partners Operating Credit Facility” for a summary of certain terms.
|
13.
|
$275 million Facility Agreement, dated June 25, 2013, by and among a group of banks as the lender and Golar Partners Operating LLC as the borrower. We refinanced existing lease financing arrangements in respect of two vessels, the
Golar Winter
and the
Golar Grand
, and entered into a new five year,
$275 million
loan facility with a banking consortium. The total facility amount is $275 million and is split into two tranches, a $225 million term loan facility and a $50 million revolving facility. The facility bears interest at LIBOR plus a margin of 3%. The loan is payable on a quarterly basis with a final balloon payment of $130 million payable after 5 years. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a summary of certain terms.
|
14.
|
Purchase, Sale and Contribution Agreement, dated December 5, 2013, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for the acquisition of the
Golar Igloo
for a purchase price of approximately $310.0 million less assumed debt of $161.3 million plus the fair value of the interest rate swap asset of $3.6 million and net working capital adjustments.
|
15.
|
The Purchase, Sale and Contribution Agreement dated December 15, 2014, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Eskimo
for a purchase price of $330.0 million for the vessel plus $9.0 million of working capital adjustments less assumed bank debt of $108.0 million.
|
16.
|
Letter Agreement, dated January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited. See “Item 7. Major Unitholders and Related Party Transactions—B. Related Party Transactions—Other Related Party Transactions—Vessel Acquisitions and Related Transactions” for a summary of certain terms.
|
17.
|
Eskimo Vendor Loan agreement, dated as of January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited. See “Item 7. Major Unitholders and Related Party Transactions—B. Related Party Transactions—Other Related Party Transactions—Vessel Acquisitions and Related Transactions” for a summary of certain terms.
|
18.
|
Facility Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated July 24, 2013. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt—Golar Igloo Debt”.
|
19.
|
Supplemental Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated July 25, 2013. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Long-Term Debt”.
|
20.
|
Second Supplemental Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated August 28, 2014. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt”.
|
21.
|
$120 million Loan Agreement dated April 19, 2006, among Golar LNG 2234 Corporation, as Borrower, Fokus Bank ASA, as Swap Bank, Agent and Security Trustee and the lenders party thereto. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt”.
|
22.
|
$125 million Facilities Agreement dated June 17, 2010, among Golar Freeze Holding Co., DnB NOR Bank ASA, as Facility Agent and Security Agent, the lenders party thereto and the other parties thereto. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt”.
|
23.
|
Supplemental Deed, dated December 23, 2014, relating to the $120 million Loan Agreement dated April 19, 2006, among Golar LNG 2234 Corporation, as Borrower, Fokus Bank ASA, as Swap Bank, Agent and Security Trustee and the lenders party thereto. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources”.
|
24.
|
Time charter party agreement by and between Golar Grand Corporation and Golar Trading Corporation, with respect to the Golar Grand, dated as of May 27, 2015. See “Item 4. Information on the Partnership—B. Business Overview—Our Fleet and Customers”.
|
25.
|
Bond Agreement dated May 20, 2015 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Long-Term Debt—Norwegian Bonds” for a summary of certain terms.
|
26.
|
Fourth Supplemental Deed to facility agreement, made by and among DNB Bank ASA (formerly known as DnB NOR Bank ASA), Citigroup Global Markets Limited and DVB Bank SE, London Branch, as the mandated lead arrangers, the other lenders party thereto, Golar LNG 2234 LLC, as borrower, and the other parties thereto, with respect to the Maria and Freeze refinancing. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt—Golar Maria and Golar Freeze Facility”.
|
27.
|
Purchase and Sale Agreement made by and between Golar LNG Limited and Golar Partners Operating LLC, dated February 10, 2016 with respect to the acquisition of the
Golar Tundra
. See “Item 7. Major Unitholders and Related Party Transactions—B. Related Party Transactions—Other Related Party Transactions—Vessel Acquisitions and Related Transactions”.
|
28.
|
Facilities Agreement for an $800 million senior secured amortizing term loan and revolving credit facility, dated April 27, 2016, by and among Golar Partners Operating LLC, Citigroup Global Markets Limited, DNB (UK) Limited, Nordea Bank Norge ASA, as agent and security agent and the other parties thereto. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt—$800 million credit facility” for a summary of certain terms.
|
29.
|
Bareboat charter, Memorandum of Agreement and Common Terms Agreements, by and among Golar Eskimo Corp, and a subsidiary of China Merchants Bank Limited (Eskimo SPV), dated November 4, 2015, providing for the sale and leaseback of the Golar Eskimo. See note 5 to our consolidated financial statements for a summary of certain terms.
|
30.
|
Letter Agreement dated May 17, 2016 and Amendment to the Letter Agreement dated September 26, 2016, by and between Golar Partners Operating LLC and Golar LNG Limited. See “Item 7. Major Unitholders and Related Party Transactions—B. Related Party Transactions—Other Related Party Transactions—Vessel Acquisitions and Related Transactions” for a summary of certain terms.
|
31.
|
Bareboat charter, Memorandum of Agreement and Common Terms Agreements, by and among Golar LNG NB13 Corporation, and a subsidiary of China Merchants Bank Limited (Tundra SPV), dated November 19, 2015, providing for the sale and leaseback of the Golar Tundra. See note 5 to our consolidated financial statements for a summary of certain terms.
|
32.
|
Omnibus Agreement dated June 19, 2016, by and among Golar LNG Ltd., Golar Power Limited, Golar LNG Partners LP, Golar GP LLC and Golar Partners Operating LLC. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
33.
|
Management and Administrative Services Agreement between Golar LNG Partners LP and Golar Management Limited, dated April 1, 2016, following the expiration of the First Amended and Restatement Management and Administrative Services Agreement. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
34.
|
Bond Agreement dated February 10, 2017 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee. See “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Long-Term Debt—Norwegian Bonds” for a summary of certain terms.
|
35.
|
Supplemental Agreement by and among Golar LNG NB13 Corporation, Golar LNG Limited, Golar LNG Partners LP and a subsidiary of China Merchants Bank Limited (Tundra SPV), dated April 28, 2016, as supplement to the Bareboat charter, Memorandum of Agreement and Common Terms Agreements dated November 19, 2015. See note 5 to our consolidated financial statements for a summary of certain terms.
|
36.
|
Exchange Agreement by and among Golar LNG Partners LP, Golar GP LLC and Golar LNG Limited, dated October 13, 2016. See “Item 5.—Operating and Financial Review and Prospects—Significant Developments in 2016 and Early 2017—The IDR Exchange” for a summary of certain terms.
|
E.
|
Taxation
|
•
|
an individual U.S. citizen or resident (as determined for U.S. federal income tax purposes),
|
•
|
a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) organized under the laws of the United States or any of its political subdivisions,
|
•
|
an estate the income of which is subject to U.S. federal income taxation regardless of its source, or
|
•
|
a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes.
|
•
|
at least 75.0% of our gross income (including the gross income of our vessel-owning subsidiaries) for such taxable year consists of passive income (
e.g.
, dividends, interest, capital gains from the sale or exchange of investment property, and rents derived other than in the active conduct of a rental business); or
|
•
|
at least 50.0% of the average value of the assets held by us (including the assets of our vessel-owning subsidiaries) during such taxable year produce, or are held for the production of, passive income.
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common units;
|
•
|
the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income; and
|
•
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayers for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
•
|
fails to provide an accurate taxpayer identification number;
|
•
|
is notified by the IRS that it has failed to report all interest or corporate distributions required to be reported on its U.S. federal income tax returns; or
|
•
|
in certain circumstances, fails to comply with applicable certification requirements.
|
•
|
we are not treated as carrying on a trade, profession or vocation in the United Kingdom;
|
•
|
such holders do not have a branch or agency or permanent establishment in the United Kingdom to which such common units pertain; and
|
•
|
such holders do not use or hold and are not deemed or considered to use or hold their common units in the course of carrying on a trade, profession or vocation in the United Kingdom.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the Partnership; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.
|
•
|
a more rigorous process to identify and stratify significant transactions based upon their complexity; and
|
•
|
a formal preparation and review (including escalation) process for the accounting analysis of such transactions dependent upon the level of complexity and extent of judgment involved. This may include the engagement of appropriately qualified third party experts as required.
|
|
2016
|
|
2015
|
||||
Audit Fees
|
$
|
901,748
|
|
|
$
|
808,593
|
|
Tax Fees
|
45,009
|
|
|
104,471
|
|
||
|
$
|
946,757
|
|
|
$
|
913,064
|
|
Month of repurchase
|
Total number of common units purchased
|
|
|
Average price paid per common unit
|
|
|
Total number of common units purchased as part of publicly announced plans or program
|
|
|
Maximum value of common units that may be purchased under the plans or program
|
|
||
January 2016
|
38,000
|
|
|
$
|
13.11
|
|
|
38,000
|
|
|
|
||
As of December 31, 2016
|
534,000
|
|
|
|
|
534,000
|
|
|
$
|
18,500,000
|
|
Exhibit
Number
|
|
Description
|
1.1**
|
|
Certificate of Limited Partnership of Golar LNG Partners LP (incorporated by reference to Exhibit 3.1 to the registrant’s Registration Statement on Form F-1 (Registration No. 333-173160))
|
1.2**
|
|
Second Amended and Restated Agreement of Limited Partnership of Golar LNG Partners LP (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-A/A filed on October 19, 2016)
|
2.1**
|
|
Long Term Incentive Plan, adopted May 30, 2016, providing to Employees, Consultants and Directors who perform services for the Partnership and its subsidiaries incentive compensation awards based on Units (incorporated by reference to Exhibit 4.5 to the registrant's Form S-8 filed on July 12, 2016)
|
2.2**
|
|
Exchange Agreement by and among Golar LNG Partners LP, Golar GP LLC and Golar LNG Limited, dated October 13, 2016 (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 19, 2016)
|
4.1**
|
|
Facility Agreement dated September 29, 2008 for a Senior Secured Revolving Credit Facility by and among Golar LNG Partners L.P. (as borrower) and the Banks and Financial Institutions Referred to therein (as lenders) (incorporated by reference to Exhibit 10.1 to the registrant’s Registration Statement on Form F-1 (Registration No. 333-173160))
|
4.2**
|
|
Omnibus Agreement dated April 13, 2011, by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.2(a)**
|
|
Amendment No. 1 to Omnibus Agreement, dated October 5, 2011 by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.3**
|
|
First Amended and Restated Management and Administrative Services Agreement, effective as of July 1, 2011, between Golar LNG Partners LP and Golar Management Limited (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.4**
|
|
Contribution and Conveyance Agreement, dated as of April 5, 2011, among Golar LNG Limited, Golar GP LLC, Golar LNG Partners LP, Golar LNG Holding Co., and Golar Partners Operating LLC (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.5**
|
|
Form of Management Agreement with Golar Management Limited (incorporated by reference to Exhibit 10.13 to the registrant’s Registration Statement on Form F-1 (Registration No. 333-173160))
|
4.6**
|
|
$20.0 Million Revolving Credit Agreement by and between Golar LNG Partners LP and Golar LNG Limited (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.7**
|
|
Purchase, Sale and Contribution Agreement, dated October 5, 2011, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the Golar Freeze (incorporated by reference to the Exhibits of the Partnership’s Annual Report on Form 20-F for fiscal year ended December 31, 2011)
|
4.8**
|
|
Purchase, Sale and Contribution Agreement, dated July 9, 2012, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
NR Satu
(incorporated by reference to Exhibit 10.2 to the registrant’s Report of Foreign Issuer on Form 6-K filed on July 16, 2012)
|
4.9**
|
|
Purchase, Sale and Contribution Agreement, dated November 1, 2012, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Grand
(incorporated by reference to Exhibit 10.2 to the registrant’s Report of Foreign Issuer on Form 6-K filed on November 6, 2012)
|
4.10**
|
|
$175 million Facility Agreement, dated December 14, 2012, by and among a group of banks as the lender and PT Golar Indonesia as the borrower (incorporated by reference to Exhibit 10.3 to the registrant’s Report of Foreign Issuer on Form 6-K filed on February 5, 2013)
|
4.11**
|
|
Purchase, Sale and Contribution Agreement, dated January 30, 2013, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Maria
(incorporated by reference to Exhibit 10.2 to the registrant’s Report of Foreign Issuer on Form 6-K filed on February 5, 2013)
|
4.12**
|
|
Bond Agreement dated October 11, 2012 between Golar LNG Partners LP and Norsk Tillitsmann ASA as bond trustee (incorporated by reference to Exhibit 10.3 to the registrant’s Report of Foreign Issuer on Form 6-K filed on November 6, 2012)
|
4.13**
|
|
$275 million Facility Agreement, dated June 25, 2013, by and among a group of banks as the lender and Golar Partners Operating LLC as the borrower (incorporated by reference to Exhibit 4.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on September 30, 2013)
|
4.14**
|
|
Purchase, Sale and Contribution Agreement, dated December 5, 2013, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Igloo
(incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on December 10, 2013)
|
4.15**
|
|
Facility Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated July 24, 2013 (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on December 8, 2014)
|
4.16**
|
|
Supplemental Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated July 25, 2013 (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on December 8, 2014)
|
4.17**
|
|
Second Supplemental Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated August 28, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on December 8, 2014)
|
4.18**
|
|
Purchase, Sale and Contribution Agreement of the acquisition of the Golar Eskimo dated December 15, 2014 among Golar LNG Ltd, Golar LNG Partners LP and Golar Partners Operating LLC (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on December 19, 2014)
|
4.19**
|
|
Letter Agreement, dated as of January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited (incorporated by reference to Exhibit 10.3 to the registrant’s Report of Foreign Issuer on Form 6-K filed on January 22, 2015)
|
4.20**
|
|
Loan Agreement, dated as of January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited, providing for the Eskimo Vendor Loan (incorporated by reference to Exhibit 10.3 to the registrant’s Report of Foreign Issuer on Form 6-K filed on January 22, 2015)
|
4.21**
|
|
$120 million Loan Agreement dated April 19, 2006 and as amended on February 27, 2008, among Golar LNG 2234 Corporation, as Borrower, Fokus Bank ASA, as Swap Bank, Agent and Security Trustee and the lenders party thereto (incorporated by reference to the registrant’s Amendment No. 1 to Annual Report on Form 20-F/A filed on April 30, 2015)
|
4.22**
|
|
$125 million Facilities Agreement dated June 17, 2010, among Golar Freeze Holding Co., DnB NOR Bank ASA, as Facility Agent and Security Agent, the lenders party thereto and the other parties thereto (incorporated by reference to the registrant’s Amendment No. 1 to Annual Report on Form 20-F/A filed on April 30, 2015)
|
4.23**
|
|
Supplemental Deed, dated December 23, 2014, relating to the $120 million Loan Agreement dated April 19, 2006, among Golar LNG 2234 Corporation, as Borrower, Fokus Bank ASA, as Swap Bank, Agent and Security Trustee and the lenders party thereto (incorporated by reference to the registrant’s Amendment No. 1 to Annual Report on Form 20-F/A filed on April 30, 2015)
|
4.24**
|
|
Supplemental Deed, dated April 29, 2015, between Golar LNG Limited, as lender and Golar LNG Partners LP as borrower (incorporated by reference to the registrant’s Amendment No. 1 to Annual Report on Form 20-F/A filed on April 30, 2015)
|
4.25**
|
|
Bond Agreement dated May 20, 2015 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee (incorporated by reference to Exhibit 99.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on May 26, 2015)
|
4.26**
|
|
Time charter party agreement by and between Golar Grand Corporation and Golar Trading Corporation, with respect to the
Golar Grand
, dated as of May 27, 2015 (incorporated by reference to Exhibit 4.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on July 7, 2015)
|
4.27**
|
|
Fourth Supplemental Deed to facility agreement, made by and among DNB Bank ASA (formerly known as DnB NOR Bank ASA), Citigroup Global Markets Limited and DVB Bank SE, London Branch, as the mandated lead arrangers, the other lenders party thereto, Golar LNG 2234 LLC, as borrower, and the other parties thereto, with respect to the Maria and Freeze refinancing (incorporated by reference to Exhibit 4.2 to the registrant’s Report of Foreign Issuer on Form 6-K filed on July 7, 2015)
|
4.28**
|
|
Purchase and Sale Agreement made by and between Golar LNG Limited and Golar Partners Operating LLC, dated February 10, 2016 with respect to the acquisition of the Golar Tundra (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on February 2, 2016)
|
4.29**
|
|
Facilities Agreement for an $800 million senior secured amortizing term loan and revolving credit facility, dated April 27, 2016, by and among Golar Partners Operating LLC, Citigroup Global Markets Limited, DNB (UK) Limited, Nordea Bank Norge ASA, as agent and security agent and the other parties thereto (incorporated by reference to Exhibit 4.38 to the registrant’s Annual Report on Form 20-F filed on May 2, 2016)
|
4.30**
|
|
Bareboat charter by and between Golar Eskimo Corp and Sea 23 Leasing Co. Limited, dated November 4, 2015 (incorporated by reference to Exhibit 4.39 to the registrant’s Annual Report on Form 20-F filed on May 2, 2016)
|
4.31**
|
|
Memorandum of Agreement by and between Golar Eskimo Corp and Sea 23 Leasing Co. Limited, dated November 4, 2015 (incorporated by reference to Exhibit 4.40 to the registrant’s Annual Report on Form 20-F filed on May 2, 2016)
|
4.32**
|
|
Common Terms Agreements, by and between Golar Eskimo Corp and Sea 23 Leasing Co. Limited, dated November 4, 2015, providing for the sale and leaseback of the
Golar Eskimo
(incorporated by reference to Exhibit 4.41 to the registrant’s Annual Report on Form 20-F filed on May 2, 2016)
|
4.33**
|
|
Letter Agreement dated May 17, 2016, and Letter Agreement Amendment dated September 26, 2016, by and between Golar Partners Operating LLC and Golar LNG Limited (incorporated by reference to Exhibit 4.8 and 4.9, respectively, to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.34**
|
|
Bareboat charter by and between Golar LNG NB 13 Corporation and Sea 24 Leasing Co. Limited, dated November 19, 2015 (incorporated by reference to Exhibit 4.3 to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.35**
|
|
Memorandum of Agreement by and between Golar LNG NB 13 Corporation and Sea 24 Leasing Co. Limited, dated November 19, 2015 (incorporated by reference to Exhibit 4.5 to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.36**
|
|
Common Terms Agreements, by and between Golar LNG NB 13 Corporation and Sea 24 Leasing Co. Limited, dated November 19, 2015, providing for the sale and leaseback of the
Golar Tundra
(incorporated by reference to Exhibit 4.4 to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.37**
|
|
Omnibus Agreement dated June 19, 2016, by and among Golar LNG Ltd., Golar Power Limited, Golar LNG Partners LP, Golar GP LLC and Golar Partners Operating LLC (incorporated by reference to Exhibit 4.10 to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.38**
|
|
Supplemental Agreement dated April 28, 2016, by and among Golar LNG NB13 Corporation, Golar LNG Limited, Golar LNG Partners LP and a subsidiary of China Merchants Bank Limited (Tundra SPV) to the Bareboat charter, Memorandum of Agreement and Common Terms Agreements dated November 19, 2015 (incorporated by reference to Exhibit 10.1 to the registrant’s Report of Foreign Issuer on Form 6-K filed on February 7, 2017)
|
4.39*
|
|
Management and Administrative Services Agreement between Golar LNG Partners LP and Golar Management Limited, dated April 1, 2016
|
4.40*
|
|
Bond Agreement dated February 10, 2017 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee
|
8.1*
|
|
Subsidiaries of Golar LNG Partners LP
|
12.1*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Golar LNG Partners LP Principal Executive Officer
|
12.2*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Golar LNG Partners LP Principal Financial and Accounting Officer
|
13.1*
|
|
Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer
|
13.2*
|
|
Certification under Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Financial and Accounting Officer
|
15.1*
|
|
Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP
|
101. INS
|
|
XBRL Instance Document
|
101. SCH
|
|
XBRL Taxonomy Extension Schema
|
101. CAL
|
|
XBRL Taxonomy Extension Schema Calculation Linkbase
|
101. DEF
|
|
XBRL Taxonomy Extension Schema Definition Linkbase
|
101. LAB
|
|
XBRL Taxonomy Extension Schema Label Linkbase
|
101. PRE
|
|
XBRL Taxonomy Extension Schema Presentation Linkbase
|
|
|
GOLAR LNG PARTNERS LP
|
||
|
|
|
|
|
|
|
By:
|
/s/ Graham Robjohns
|
|
|
|
|
Name:
|
Graham Robjohns
|
|
|
|
Title:
|
Principal Executive Officer
|
Date:
|
May 1, 2017
|
|
|
|
|
Page
|
GOLAR LNG PARTNERS LP
|
|
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
|
/s/ Ernst & Young LLP
|
|
London, United Kingdom
|
|
May 1, 2017
|
|
/s/ Ernst & Young LLP
|
|
London, United Kingdom
|
|
May 1, 2017
|
|
|
Notes
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Time charter revenues
|
7
|
|
|
413,230
|
|
|
393,132
|
|
|
396,026
|
|
Time charter revenues from related parties
|
25
|
|
|
28,368
|
|
|
41,555
|
|
|
—
|
|
Total operating revenues
|
|
|
|
441,598
|
|
|
434,687
|
|
|
396,026
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
(1)
|
|
|
|
59,886
|
|
|
65,244
|
|
|
59,191
|
|
Voyage and commission expenses
|
|
|
|
5,974
|
|
|
7,724
|
|
|
6,048
|
|
Administrative expenses
(1)
|
|
|
|
8,600
|
|
|
6,643
|
|
|
5,757
|
|
Depreciation and amortization
|
|
|
|
100,468
|
|
|
99,256
|
|
|
80,574
|
|
Total operating expenses
|
|
|
|
174,928
|
|
|
178,867
|
|
|
151,570
|
|
Operating income
|
|
|
|
266,670
|
|
|
255,820
|
|
|
244,456
|
|
Other non-operating income
|
|
|
1,318
|
|
|
—
|
|
|
—
|
|
|
Financial income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(1)
|
|
|
4,295
|
|
|
1,315
|
|
|
1,131
|
|
|
Interest expense
(1)
|
|
|
|
(66,938
|
)
|
|
(61,632
|
)
|
|
(47,335
|
)
|
Other financial items, net
|
8
|
|
|
(2,745
|
)
|
|
(17,151
|
)
|
|
(18,564
|
)
|
Net financial expenses
|
|
|
|
(65,388
|
)
|
|
(77,468
|
)
|
|
(64,768
|
)
|
Income before income taxes
|
|
|
|
202,600
|
|
|
178,352
|
|
|
179,688
|
|
Income taxes
|
9
|
|
|
(16,858
|
)
|
|
(5,669
|
)
|
|
5,047
|
|
Net income
|
|
|
|
185,742
|
|
|
172,683
|
|
|
184,735
|
|
Net income attributable to non-controlling interest
|
|
|
|
(13,571
|
)
|
|
(10,547
|
)
|
|
(10,581
|
)
|
Net income attributable to Golar LNG Partners LP Owners
|
|
|
|
172,171
|
|
|
162,136
|
|
|
174,154
|
|
General Partner’s interest in net income
(2)
|
|
|
|
23,135
|
|
|
18,469
|
|
|
23,908
|
|
Limited Partners’ interest in net income
|
|
|
|
149,036
|
|
|
143,667
|
|
|
150,246
|
|
Earnings per unit:
|
|
|
|
|
|
|
|
|
|
|
|
Basic - Common units
|
29
|
|
|
2.44
|
|
|
2.38
|
|
|
2.47
|
|
Diluted - Common units
|
29
|
|
|
2.43
|
|
|
2.38
|
|
|
2.47
|
|
Cash distributions declared and paid per unit in the period
|
29
|
|
|
2.31
|
|
|
2.30
|
|
|
2.14
|
|
(1)
|
This includes amounts arising from transactions with related parties. See note 25.
|
(2)
|
This includes net income attributable to IDR holders of
$19.7 million
,
$15.2 million
and
$18.3 million
for the years ended
December 31, 2016
,
2015
and
2014
, respectively.
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Net income
|
185,742
|
|
|
172,683
|
|
|
184,735
|
|
Unrealized net gain (loss) on qualifying cash flow hedging instruments:
|
|
|
|
|
|
|||
Other comprehensive income (loss) before reclassification
(1)
|
4,263
|
|
|
(5,106
|
)
|
|
(1,031
|
)
|
Amounts reclassified from accumulated other comprehensive income (loss) to the statement of operations
(2)
|
409
|
|
|
(2,533
|
)
|
|
1,339
|
|
Net other comprehensive income (loss)
|
4,672
|
|
|
(7,639
|
)
|
|
308
|
|
Comprehensive income
|
190,414
|
|
|
165,044
|
|
|
185,043
|
|
Comprehensive income attributable to:
|
|
|
|
|
|
|
|
|
Partners’ Equity
|
176,843
|
|
|
154,497
|
|
|
174,462
|
|
Non-controlling interest
|
13,571
|
|
|
10,547
|
|
|
10,581
|
|
|
190,414
|
|
|
165,044
|
|
|
185,043
|
|
|
Notes
|
|
2016
|
|
|
2015
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
65,710
|
|
|
40,686
|
|
Restricted cash
|
17
|
|
|
44,927
|
|
|
56,714
|
|
Trade accounts receivable
|
12
|
|
|
20,444
|
|
|
20,824
|
|
Other receivables and prepaid expenses
|
13
|
|
|
4,822
|
|
|
5,160
|
|
Amounts due from related parties
|
25
|
|
|
23,914
|
|
|
7,128
|
|
Inventories
|
|
|
|
1,110
|
|
|
1,339
|
|
Total current assets
|
|
|
|
160,927
|
|
|
131,851
|
|
Long-term assets
|
|
|
|
|
|
|
|
|
Restricted cash
|
17
|
|
|
117,488
|
|
|
136,559
|
|
Vessels and equipment, net
|
14
|
|
|
1,652,710
|
|
|
1,730,676
|
|
Vessel under capital lease, net
|
15
|
|
|
111,186
|
|
|
116,727
|
|
Intangible assets, net
|
16
|
|
|
86,133
|
|
|
99,096
|
|
Amounts due from related parties
|
25
|
|
|
107,247
|
|
|
—
|
|
Other non-current assets
|
18
|
|
|
17,017
|
|
|
16,753
|
|
Total assets
|
|
|
|
2,252,708
|
|
|
2,231,662
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Current portion of long term-debt
|
21
|
|
|
78,101
|
|
|
118,693
|
|
Current portion of obligations under capital lease
|
22
|
|
|
787
|
|
|
—
|
|
Trade accounts payable
|
|
|
|
2,110
|
|
|
3,959
|
|
Accrued expenses
|
19
|
|
|
17,438
|
|
|
21,230
|
|
Other current liabilities
|
20
|
|
|
117,036
|
|
|
119,084
|
|
Total current liabilities
|
|
|
|
215,472
|
|
|
262,966
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
Long-term debt
|
21
|
|
|
1,296,609
|
|
|
1,212,419
|
|
Obligations under capital lease
|
22
|
|
|
116,964
|
|
|
143,112
|
|
Other long-term liabilities
|
23
|
|
|
19,234
|
|
|
16,650
|
|
Total liabilities
|
|
|
|
1,648,279
|
|
|
1,635,147
|
|
Commitments and contingencies
|
26
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Partners’ capital:
|
|
|
|
|
|
|
|
|
Common unitholders: 64,073,291 units issued and outstanding at December 31, 2016 (2015: 45,167,096)
|
|
|
|
490,564
|
|
|
486,533
|
|
Subordinated unitholders: nil units issued and outstanding at December 31, 2016 (2015: 15,949,831)
|
|
|
|
—
|
|
|
12,649
|
|
General partner interest: 1,318,517 units issued and outstanding at December 31, 2016 (2015: 1,257,408)
|
|
|
|
50,942
|
|
|
40,293
|
|
Total partners’ capital
|
|
|
|
541,506
|
|
|
539,475
|
|
Accumulated other comprehensive loss
|
|
|
|
(5,053
|
)
|
|
(9,725
|
)
|
Total before non-controlling interest
|
|
|
|
536,453
|
|
|
529,750
|
|
Non-controlling interest
|
|
|
|
67,976
|
|
|
66,765
|
|
Total equity
|
|
|
|
604,429
|
|
|
596,515
|
|
Total liabilities and equity
|
|
|
|
2,252,708
|
|
|
2,231,662
|
|
|
Notes
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
185,742
|
|
|
172,683
|
|
|
184,735
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
100,468
|
|
|
99,256
|
|
|
80,574
|
|
Recognition of foreign tax losses
|
|
|
—
|
|
|
(4,945
|
)
|
|
(11,832
|
)
|
|
Release of deferred tax asset
|
|
|
5,308
|
|
|
4,076
|
|
|
2,308
|
|
|
Movement in deferred tax liability
|
|
|
|
2,064
|
|
|
—
|
|
|
—
|
|
Amortization of deferred charges
|
|
|
|
8,412
|
|
|
6,308
|
|
|
3,554
|
|
Unrealized foreign exchange gains
|
|
|
|
(532
|
)
|
|
(493
|
)
|
|
(674
|
)
|
Unit options expense
|
27
|
|
|
23
|
|
|
—
|
|
|
—
|
|
Drydocking expenditure
|
|
|
|
(4,060
|
)
|
|
(15,093
|
)
|
|
(2,468
|
)
|
Interest element included in obligations under capital leases
|
|
|
|
(1,205
|
)
|
|
279
|
|
|
1,639
|
|
Change in assets and liabilities, net of effects from purchase of
Golar Eskimo
and
Golar Igloo
:
|
|
|
|
|
|
|
|
||||
Trade accounts receivable
|
|
|
|
1,126
|
|
|
(11,704
|
)
|
|
(1,989
|
)
|
Inventories
|
|
|
|
230
|
|
|
(642
|
)
|
|
1,005
|
|
Prepaid expenses, accrued income and other assets, including long term assets
|
|
|
|
(5,305
|
)
|
|
3,188
|
|
|
8,901
|
|
Amounts due from/to related parties
|
|
|
|
(17,512
|
)
|
|
(18,071
|
)
|
|
6,659
|
|
Trade accounts payable
|
|
|
|
(1,700
|
)
|
|
902
|
|
|
755
|
|
Accrued expenses
|
|
|
|
(4,746
|
)
|
|
(4,578
|
)
|
|
24
|
|
Restricted cash
|
|
|
(129
|
)
|
|
(7,686
|
)
|
|
—
|
|
|
Other current liabilities
|
|
|
|
(6,952
|
)
|
|
(11,250
|
)
|
|
3,789
|
|
Net cash provided by operating activities
|
|
|
|
261,232
|
|
|
212,230
|
|
|
276,980
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Additions to vessels and equipment
|
|
|
|
—
|
|
|
(3,667
|
)
|
|
(1,293
|
)
|
Acquisition of
Golar Eskimo
and
Golar Igloo
, net of cash acquired
(1)
|
11
|
|
|
—
|
|
|
(5,971
|
)
|
|
(155,319
|
)
|
Deposit made in connection with the
Golar Tundra
acquisition
|
25
|
|
|
(107,247
|
)
|
|
—
|
|
|
—
|
|
Short-term debt granted to related parties
|
|
|
—
|
|
|
(50,000
|
)
|
|
—
|
|
|
Repayment of short-term debt granted to related parties
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
Restricted cash
|
|
|
|
—
|
|
|
10,372
|
|
|
(11,143
|
)
|
Net cash (used in) provided by investing activities
|
|
|
|
(107,247
|
)
|
|
734
|
|
|
(167,755
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term debt due to related parties
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|
Proceeds from long-term debt
|
21
|
|
|
815,000
|
|
|
644,070
|
|
|
115,000
|
|
Repayments of long-term debt (including related parties)
|
|
|
|
(770,422
|
)
|
|
(707,202
|
)
|
|
(93,558
|
)
|
Repayments of obligations under capital lease
|
|
|
|
(122
|
)
|
|
—
|
|
|
(41
|
)
|
Financing arrangement fees and other costs
|
|
|
|
(13,521
|
)
|
|
(6,628
|
)
|
|
(846
|
)
|
Common units repurchased and canceled
|
28
|
|
|
(495
|
)
|
|
(5,970
|
)
|
|
—
|
|
Restricted cash
|
|
|
7,627
|
|
|
(31,248
|
)
|
|
—
|
|
|
Cash distributions paid
|
|
|
|
(154,668
|
)
|
|
(152,898
|
)
|
|
(140,142
|
)
|
Dividends paid to non-controlling interests
|
|
|
|
(12,360
|
)
|
|
(11,400
|
)
|
|
(13,740
|
)
|
Net cash used in financing activities
|
|
|
|
(128,961
|
)
|
|
(271,276
|
)
|
|
(113,327
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
25,024
|
|
|
(58,312
|
)
|
|
(4,102
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
40,686
|
|
|
98,998
|
|
|
103,100
|
|
Cash and cash equivalents at end of period
|
|
|
|
65,710
|
|
|
40,686
|
|
|
98,998
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
58,005
|
|
|
52,814
|
|
|
43,011
|
|
Income taxes paid
|
|
|
|
5,278
|
|
|
5,124
|
|
|
2,707
|
|
|
Partners’ Capital
|
|
Accumulated
Other
Comprehensive
Income
(loss)
|
|
Total
before
Non-
controlling
interest
|
|
Non-
controlling
Interest
|
|
Total
Owner’s
Equity
|
||||||||||||
|
Common
Units
|
|
Subordinated
Units
|
|
General
Partner and IDRs
(3)
|
|
|
|
|
||||||||||||
Consolidated balance at December 31, 2013
|
475,610
|
|
—
|
|
6,900
|
|
|
19,234
|
|
|
(2,394
|
)
|
|
499,350
|
|
|
70,777
|
|
|
570,127
|
|
Net income
|
111,351
|
|
|
38,895
|
|
|
23,908
|
|
|
—
|
|
|
174,154
|
|
|
10,581
|
|
|
184,735
|
|
|
Cash distributions
(1)
|
(96,577
|
)
|
|
(33,732
|
)
|
|
(9,833
|
)
|
|
—
|
|
|
(140,142
|
)
|
|
—
|
|
|
(140,142
|
)
|
|
Non-controlling interest dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,740
|
)
|
|
(13,740
|
)
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
308
|
|
|
—
|
|
|
308
|
|
|
Contribution to equity
|
440
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
451
|
|
|
—
|
|
|
451
|
|
|
Consolidated balance at December 31, 2014
|
490,824
|
|
|
12,063
|
|
|
33,320
|
|
|
(2,086
|
)
|
|
534,121
|
|
|
67,618
|
|
|
601,739
|
|
|
Net income
|
106,476
|
|
|
37,191
|
|
|
18,469
|
|
|
—
|
|
|
162,136
|
|
|
10,547
|
|
|
172,683
|
|
|
Cash distributions
(1)
|
(104,797
|
)
|
|
(36,605
|
)
|
|
(11,496
|
)
|
|
—
|
|
|
(152,898
|
)
|
|
—
|
|
|
(152,898
|
)
|
|
Non-controlling interest dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,400
|
)
|
|
(11,400
|
)
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,639
|
)
|
|
(7,639
|
)
|
|
—
|
|
|
(7,639
|
)
|
|
Common units repurchased and canceled
|
(5,970
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,970
|
)
|
|
—
|
|
|
(5,970
|
)
|
|
Consolidated balance at December 31, 2015
|
486,533
|
|
|
12,649
|
|
|
40,293
|
|
|
(9,725
|
)
|
|
529,750
|
|
|
66,765
|
|
|
596,515
|
|
|
Net income
|
139,948
|
|
|
9,088
|
|
|
23,135
|
|
|
—
|
|
|
172,171
|
|
|
13,571
|
|
|
185,742
|
|
|
Cash distributions
(1)
|
(124,400
|
)
|
|
(18,422
|
)
|
|
(11,846
|
)
|
|
—
|
|
|
(154,668
|
)
|
|
—
|
|
|
(154,668
|
)
|
|
Non-controlling interest dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,360
|
)
|
|
(12,360
|
)
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,672
|
|
|
4,672
|
|
|
—
|
|
|
4,672
|
|
|
Common units repurchased and canceled
|
(495
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(495
|
)
|
|
—
|
|
|
(495
|
)
|
|
Conversion of subordinated units
(2)
|
3,315
|
|
|
(3,315
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Grant of unit options
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|
Exchange of IDRs
(4)
(see note 28)
|
(14,360
|
)
|
|
—
|
|
|
(640
|
)
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
(15,000
|
)
|
|
Consolidated balance at December 31, 2016
|
490,564
|
|
|
—
|
|
|
50,942
|
|
|
(5,053
|
)
|
|
536,453
|
|
|
67,976
|
|
|
604,429
|
|
(1)
|
This includes cash distributions to IDR holders for the years ended
December 31, 2016
,
2015
and
2014
of
$8.8 million
,
$8.7 million
and
$5.6 million
, respectively.
|
(2)
|
In June 2016, our board of directors determined that the conditions precedent for the expiration of the subordination period set forth in the definition of "Subordination Period" contained in the Partnership Agreement were satisfied, and on June 30, 2016, all
15,949,831
subordinated units (all of which were held by Golar) converted into common units on a one-for-one basis. As of December 31, 2016, there are no subordinated units.
|
(3)
|
As of December 31, 2016, the carrying value of the equity attributable to the IDR holders was
$32.5 million
(2015:
$21.5 million
)
|
(4)
|
Overall the effect of the transaction was (i) reclassification of the initial fair value of the derivative from equity to current liabilities of
$15.0 million
; (ii) reallocation between unitholders within equity due to the recognition of the incremental fair value of the modification and fair values of newly issued instruments and resulting deemed distribution.
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Unrealized net loss on qualifying cash flow hedging instruments
|
|
(5,053
|
)
|
|
(9,725
|
)
|
|
(2,086
|
)
|
Vessels (excluding converted FSRUs)
|
40 years
|
Vessels - Converted FSRUs
|
20 years from conversion date
|
Drydocking expenditure
|
2 to 5 years
|
Mooring equipment
|
11 years
|
Vessel
|
2016 Market value
(1)
|
2016 Carrying value
|
(in millions of $)
|
|
|
Golar Winter
|
184.8
|
225.5
|
NR Satu
|
151.5
|
191.1
|
Golar Maria
|
120.5
|
194.7
|
Golar Mazo
|
105.0
|
141.4
|
Methane Princess
|
106.5
|
111.2
|
•
|
Common units
. Common units represent limited partner interests in us. During the subordination period, the common units had preferential distribution and liquidation rights over the subordinated units as described in note 29. Each outstanding common unit is entitled to
one
vote on matters subject to a vote of common unitholders. However, if at any time, any person or group owns beneficially more than
4.9%
or more of any class of units outstanding, any such units owned by that person or group in excess of
4.9%
may not be voted (except for purposes of nominating a person for election to our board). The voting rights of any such common unitholder in excess of
4.9%
will effectively be redistributed pro rata among the other common unitholders holding less than
4.9%
of the voting power of such class of units. The General Partner, its affiliates and persons who acquired common units with the prior approval of the board of directors will not be subject to this
4.9%
limit except with respect to voting their common units in the election of the
four
elected directors.
|
•
|
Subordinated units.
Subordinated units represented limited partner interests in us. Subordinated units had limited voting rights and most notably were excluded from voting in the election of the elected directors. During the subordination period, the common units had preferential distribution rights to the subordinated units (see note 29). The subordination period ended on June 30, 2016, on which date all our subordinated units, which were
100%
held by Golar, converted to common units.
|
•
|
General Partner units.
There is a limitation on the transferability of the general partner interest such that the General Partner may not transfer all or any part of its general partner interest to another person (except to an affiliate of the General Partner or another entity as part of the merger or consolidation of the General Partner with or into another entity or the transfer by the General Partner of all or substantially all of its assets to another entity) prior to March 31, 2021 without the approval of the holders of at least a majority of the outstanding common units, excluding common units held by the General Partner and its affiliates. The general partner units are not entitled to vote in the election of the
four
elected directors. However, the General Partner in its sole discretion appoints
three
of the
seven
board directors.
|
•
|
IDRs.
The IDRs are non-voting and represent rights to receive an increasing percentage of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved, as described in note 29. Pursuant to the Second Amended and Restated Agreement of Limited Partnership, the IDRs interest are transferable without unitholder approval.
|
•
|
To what extent we and Golar may compete with each other;
|
•
|
Certain rights of first offer on certain FSRUs and LNG carriers operating under charters for
five
or more years; and
|
•
|
The provision of certain indemnities to us by Golar.
|
Name
|
|
Jurisdiction of
Incorporation
|
|
Purpose
|
Golar Partners Operating LLC
|
|
Marshall Islands
|
|
Holding Company
|
Golar LNG Holding Corporation
|
|
Marshall Islands
|
|
Holding Company
|
Golar Maritime (Asia) Inc.
|
|
Republic of Liberia
|
|
Holding Company
|
Golar Servicos de Operacao de Embaracaoes Limited
|
|
Brazil
|
|
Management Company
|
Golar Winter Corporation
|
|
Marshall Islands
|
|
Owns
Golar Winter
|
Golar Winter UK Ltd
|
|
United Kingdom
|
|
Operates
Golar Winter
|
Golar Spirit Corporation
|
|
Marshall Islands
|
|
Owns
Golar Spirit
|
Golar Spirit UK Ltd
|
|
United Kingdom
|
|
Operates
Golar Spirit
|
Faraway Maritime Shipping Company (60% ownership)
|
|
Republic of Liberia
|
|
Owns and operates
Golar Mazo
|
Golar LNG 2215 Corporation
|
|
Marshall Islands
|
|
Leases
Methane Princess
|
Golar 2215 UK Ltd
|
|
United Kingdom
|
|
Operates
Methane Princess
|
Golar Freeze Holding Corporation
|
|
Marshall Islands
|
|
Owns
Golar Freeze
|
Golar Freeze UK Ltd
|
|
United Kingdom
|
|
Operates
Golar Freeze
|
Golar Khannur Corporation
|
|
Marshall Islands
|
|
Holding Company
|
Golar LNG (Singapore) Pte. Ltd.
|
|
Singapore
|
|
Holding Company
|
PT Golar Indonesia*
|
|
Indonesia
|
|
Owns and operates
NR Satu
|
Golar Grand Corporation
|
|
Marshall Islands
|
|
Owns and operates
Golar Grand
|
Golar LNG 2234 LLC
|
|
Republic of Liberia
|
|
Owns and operates
Golar Maria
|
Golar Hull M2031 Corporation
|
|
Marshall Islands
|
|
Owns and operates
Golar Igloo
|
Golar Eskimo Corporation**
|
|
Marshall Islands
|
|
Leases and operates
Golar Eskimo
|
(in $ thousands)
|
2017
|
2018
|
2019
|
2020
|
2021
|
After 2021
|
||||||
Golar Eskimo*
|
22,963
|
|
22,437
|
|
21,859
|
|
21,330
|
|
20,755
|
|
74,463
|
|
(in $ thousands)
|
2016
|
|
2015
|
||
Assets
|
|
|
|
||
Restricted cash (refer to note 17)
|
—
|
|
|
4,031
|
|
|
|
|
|
||
Liabilities
|
|
|
|
||
Long-term debt (refer to note 21)
|
232,931
|
|
|
254,070
|
|
(in thousands of $)
|
2017
|
2018
|
2019
|
2020
|
2021
|
After 2021
|
Golar Tundra*
|
20,910
|
20,446
|
19,934
|
19,466
|
18,953
|
68,097
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
ASSETS
|
|
|
|
|
||
Cash
|
|
14,124
|
|
|
14,783
|
|
Restricted cash
|
|
10,361
|
|
|
10,281
|
|
Vessels and equipment, net*
|
|
290,638
|
|
|
311,751
|
|
Other assets
|
|
12,121
|
|
|
14,552
|
|
Total assets
|
|
327,244
|
|
|
351,367
|
|
|
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
|
|
||
Accrued liabilities
|
|
9,989
|
|
|
9,247
|
|
Current portion of long-term debt
|
|
13,633
|
|
|
13,263
|
|
Amounts due to related parties
|
|
135,809
|
|
|
172,979
|
|
Long-term debt
|
|
102,500
|
|
|
96,346
|
|
Other liabilities
|
|
68
|
|
|
158
|
|
Total liabilities
|
|
261,999
|
|
|
291,993
|
|
Total equity
|
|
65,245
|
|
|
59,374
|
|
Total liabilities and equity
|
|
327,244
|
|
|
351,367
|
|
•
|
Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities;
|
•
|
Eliminate the presumption that a general partner should consolidate a limited partnership;
|
•
|
Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and
|
•
|
Provide a scope exception from consolidation guidance for reporting entities with interest in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Petrobras
|
|
103,368
|
|
|
23
|
%
|
|
100,052
|
|
|
23
|
%
|
|
99,976
|
|
|
25
|
%
|
PTNR
|
|
67,774
|
|
|
15
|
%
|
|
67,325
|
|
|
15
|
%
|
|
66,345
|
|
|
17
|
%
|
Jordan
|
|
57,112
|
|
|
13
|
%
|
|
37,750
|
|
|
9
|
%
|
|
—
|
|
|
—
|
%
|
KNPC
|
|
47,654
|
|
|
11
|
%
|
|
47,402
|
|
|
11
|
%
|
|
43,220
|
|
|
11
|
%
|
DUSUP
|
|
46,465
|
|
|
11
|
%
|
|
41,970
|
|
|
10
|
%
|
|
48,392
|
|
|
12
|
%
|
Pertamina
|
|
37,602
|
|
|
9
|
%
|
|
38,061
|
|
|
9
|
%
|
|
40,004
|
|
|
10
|
%
|
Royal Dutch Shell
|
|
26,070
|
|
|
6
|
%
|
|
31,370
|
|
|
7
|
%
|
|
68,884
|
|
|
17
|
%
|
Revenues (in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Brazil
|
|
103,368
|
|
|
100,052
|
|
|
99,976
|
|
Indonesia
|
|
67,774
|
|
|
67,325
|
|
|
66,345
|
|
Jordan
|
|
57,112
|
|
|
37,750
|
|
|
—
|
|
Kuwait
|
|
47,654
|
|
|
47,402
|
|
|
43,220
|
|
United Arab Emirates
|
|
46,465
|
|
|
41,970
|
|
|
48,392
|
|
Fixed assets (in thousands of $)
|
|
2016
|
|
2015
|
||
Brazil
|
|
347,366
|
|
|
369,922
|
|
Jordan
|
|
278,588
|
|
|
286,974
|
|
Kuwait
|
|
267,055
|
|
|
275,684
|
|
Indonesia
|
|
191,139
|
|
|
205,188
|
|
United Arab Emirates
|
|
122,078
|
|
|
133,883
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Financing arrangement fees and other costs
|
|
(1,468
|
)
|
|
(1,694
|
)
|
|
(147
|
)
|
Interest expense on un-designated interest rate swaps
|
|
(10,824
|
)
|
|
(14,385
|
)
|
|
(12,163
|
)
|
Mark-to-market adjustment for interest rate swap derivatives
|
|
9,893
|
|
|
655
|
|
|
(5,953
|
)
|
Mark-to-market adjustment for currency swap derivatives
|
|
—
|
|
|
16
|
|
|
—
|
|
Foreign exchange gain on capital lease obligations and related restricted cash
|
|
945
|
|
|
492
|
|
|
677
|
|
Foreign exchange loss on operations
|
|
(1,291
|
)
|
|
(2,235
|
)
|
|
(978
|
)
|
Total
|
|
(2,745
|
)
|
|
(17,151
|
)
|
|
(18,564
|
)
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Current tax expense (credit):
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
411
|
|
|
(1,098
|
)
|
|
852
|
|
Indonesia
|
|
5,579
|
|
|
3,641
|
|
|
544
|
|
Brazil
|
|
1,350
|
|
|
716
|
|
|
1,136
|
|
Kuwait
|
|
2,146
|
|
|
2,133
|
|
|
1,945
|
|
Total current tax expense
|
|
9,486
|
|
|
5,392
|
|
|
4,477
|
|
Deferred tax expense (income):
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
5,304
|
|
|
(869
|
)
|
|
(9,524
|
)
|
Jordan
|
|
2,068
|
|
|
1,146
|
|
|
—
|
|
Total income tax expense (credit)
|
|
16,858
|
|
|
5,669
|
|
|
(5,047
|
)
|
(In thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Effect of change on uncertain tax positions relating to prior year
|
|
133
|
|
|
(1,894
|
)
|
|
(5,042
|
)
|
Effect of recognition of deferred tax asset
|
|
—
|
|
|
(4,945
|
)
|
|
(9,524
|
)
|
Effect of taxable income in various countries
|
|
16,725
|
|
|
12,508
|
|
|
9,519
|
|
Total tax expense (credit)
|
|
16,858
|
|
|
5,669
|
|
|
(5,047
|
)
|
Jurisdiction
|
|
Earliest
|
UK
|
|
2013
|
Brazil
|
|
2011
|
Indonesia
|
|
2014
|
Kuwait
|
|
2016
|
Jordan
|
|
2015
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Short-term deferred tax asset
|
|
5,086
|
|
|
—
|
|
Long-term deferred tax asset
|
|
—
|
|
|
10,393
|
|
Deferred tax asset
|
|
5,086
|
|
|
10,393
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Long-term deferred tax asset
|
|
534
|
|
|
956
|
|
Long-term deferred tax liability
|
|
(3,744
|
)
|
|
(2,102
|
)
|
Net deferred tax liability
|
|
(3,210
|
)
|
|
(1,146
|
)
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Balance at January 1
|
|
10,393
|
|
|
9,524
|
|
|
—
|
|
Recognition of deferred tax assets on previously unrecognized losses
|
|
—
|
|
|
4,945
|
|
|
13,920
|
|
Utilization of tax losses
|
|
(5,307
|
)
|
|
(4,076
|
)
|
|
(4,396
|
)
|
Balance at December 31
|
|
5,086
|
|
|
10,393
|
|
|
9,524
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Balance at January 1
|
|
(1,146
|
)
|
|
—
|
|
Adjustment in respect of prior year
|
|
150
|
|
|
—
|
|
(Utilization of tax losses)/recognition of deferred tax asset on tax losses
|
|
(409
|
)
|
|
956
|
|
Recognition of deferred liability on fixed asset temporary differences
|
|
(1,805
|
)
|
|
(2,102
|
)
|
Balance at December 31
|
|
(3,210
|
)
|
|
(1,146
|
)
|
(in thousands of $)
|
|
Amount
|
|
Date of expiry
|
|
Net operating losses in 2013 (
NR Satu
)
|
|
20,341
|
|
|
2018
|
Net operating losses in 2015 (
Golar Eskimo
)
|
|
11,030
|
|
|
2020
|
Year ending December 31,
(in thousands of $)
|
|
Total
|
|
|
2017
|
|
445,035
|
|
(1)(2)
|
2018
|
|
295,616
|
|
|
2019
|
|
258,018
|
|
|
2020
|
|
227,156
|
|
|
2021
|
|
208,435
|
|
|
2022 and thereafter
|
|
483,866
|
|
|
Total
|
|
1,918,126
|
|
|
|
Golar Eskimo
|
|
|
Golar Igloo
|
|
(in thousands of $)
|
January 20, 2015
|
|
|
March 28, 2014
|
|
Purchase consideration
(1)
|
226,010
|
|
|
156,001
|
|
Less: Fair value of net assets (liabilities) acquired:
|
|
|
|
||
Vessel and equipment
|
292,872
|
|
|
287,542
|
|
Intangible asset
|
95,520
|
|
|
19,099
|
|
Cash
|
298
|
|
|
682
|
|
Fair value of interest rate swap
|
—
|
|
|
3,636
|
|
Other assets and liabilities
|
150
|
|
|
6,312
|
|
Long-term debt
|
(162,830
|
)
|
|
(161,270
|
)
|
Subtotal
|
(226,010
|
)
|
|
(156,001
|
)
|
Difference between the purchase price and fair value of net assets acquired
|
—
|
|
|
—
|
|
(in thousands of $)
|
Golar Eskimo
|
|
|
Golar Igloo
|
|
Loan from Golar
|
220,000
|
|
|
—
|
|
Cash consideration paid to Golar
|
7,170
|
|
|
148,730
|
|
Adjustment for the interest rate swap asset assumed
|
—
|
|
|
3,636
|
|
Purchase price adjustments
|
(1,160
|
)
|
|
3,635
|
|
|
226,010
|
|
|
156,001
|
|
|
Unaudited
|
|
(in thousands of $, except per unit data)
|
2015
|
|
Revenues
|
435,573
|
|
Net income
|
163,022
|
|
|
Unaudited
|
|
(in thousands of $, except per unit data)
|
2014
|
|
Revenues
|
400,209
|
|
Net income
|
184,751
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Other receivables
|
|
2,457
|
|
|
2,716
|
|
Prepaid expenses
|
|
2,365
|
|
|
2,444
|
|
|
|
4,822
|
|
|
5,160
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Cost
|
|
2,267,819
|
|
|
2,263,166
|
|
Accumulated depreciation
|
|
(615,109
|
)
|
|
(532,518
|
)
|
Net book value
|
|
1,652,710
|
|
|
1,730,648
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Cost
|
|
168,577
|
|
|
168,577
|
|
Accumulated depreciation and amortization
|
|
(57,391
|
)
|
|
(51,850
|
)
|
Net book value
|
|
111,186
|
|
|
116,727
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Cost
|
|
114,616
|
|
|
114,616
|
|
Accumulated amortization
|
|
(28,483
|
)
|
|
(15,520
|
)
|
Net book value
|
|
86,133
|
|
|
99,096
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Methane Princess lease security deposits
|
|
111,958
|
|
|
134,477
|
|
Restricted cash relating to the cross currency interest rate swap (see note 24)
|
|
32,410
|
|
|
36,798
|
|
Restricted cash relating to the NR Satu facility (see note 21)
|
|
10,361
|
|
|
10,281
|
|
Restricted cash held by Eskimo SPV (see note 5)
|
|
—
|
|
|
4,031
|
|
Restricted cash relating to performance guarantees
|
|
7,686
|
|
|
7,686
|
|
Total restricted cash
|
|
162,415
|
|
|
193,273
|
|
Less: current portion of restricted cash
|
|
(44,927
|
)
|
|
(56,714
|
)
|
Long-term restricted cash
|
|
117,488
|
|
|
136,559
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Mark-to-market interest rate swaps valuation (see note 24)
|
|
8,194
|
|
|
1,881
|
|
Deferred tax asset (see note 9)
|
|
5,086
|
|
|
10,393
|
|
Other long-term assets
|
|
3,737
|
|
|
4,479
|
|
|
|
17,017
|
|
|
16,753
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Vessel operating and drydocking expenses
|
|
5,424
|
|
|
4,517
|
|
Administrative expenses
|
|
479
|
|
|
599
|
|
Interest expense
|
|
10,074
|
|
|
9,553
|
|
Provision for tax
|
|
1,461
|
|
|
6,561
|
|
|
|
17,438
|
|
|
21,230
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Deferred revenue
|
|
13,554
|
|
|
12,645
|
|
Mark-to-market interest rate swaps valuation (see note 24)
|
|
6,143
|
|
|
15,540
|
|
Mark-to-market cross currency interest rate swaps valuation (see note 24)
|
|
81,454
|
|
|
89,015
|
|
Derivative - other (see note 28)
|
|
15,000
|
|
|
—
|
|
Deferred credits from capital lease transactions (see note 23)
|
|
625
|
|
|
625
|
|
Other creditors
|
|
260
|
|
|
1,259
|
|
|
|
117,036
|
|
|
119,084
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Total debt, net of deferred finance charges
|
|
1,374,710
|
|
|
1,331,112
|
|
Less: Current portion of long-term debt due to third parties, net of deferred finance charges
|
|
(78,101
|
)
|
|
(118,693
|
)
|
Long-term debt, net of deferred finance charges
|
|
1,296,609
|
|
|
1,212,419
|
|
Year Ending December 31,
(in thousands of $)
|
|
|
|
2017
(1)
|
|
233,419
|
|
2018
|
|
72,317
|
|
2019
|
|
135,183
|
|
2020
|
|
202,000
|
|
2021
|
|
516,000
|
|
2022 and thereafter
|
|
232,931
|
|
Total debt
|
|
1,391,850
|
|
Less: deferred finance charges
|
|
(17,140
|
)
|
Total debt, net of deferred finance charges
|
|
1,374,710
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
Maturity date
|
||
$800 million credit facility
|
|
740,667
|
|
|
—
|
|
|
2021
|
High-Yield Bonds
|
|
150,452
|
|
|
147,007
|
|
|
2017***
|
2015 Norwegian Bonds
|
|
150,000
|
|
|
150,000
|
|
|
2020
|
NR Satu Facility
|
|
117,800
|
|
|
112,100
|
|
|
2019
|
Eskimo SPV Debt
|
|
232,931
|
|
|
254,070
|
|
|
2025**
|
Maria and Freeze Facility
|
|
—
|
|
|
174,000
|
|
|
2018*
|
Golar LNG Partners Credit Facility
|
|
—
|
|
|
181,500
|
|
|
2018*
|
Golar Partners Operating Credit Facility
|
|
—
|
|
|
185,000
|
|
|
2018*
|
Golar Igloo Debt
|
|
—
|
|
|
141,111
|
|
|
2019/2026*
|
Total debt
|
|
1,391,850
|
|
|
1,344,788
|
|
|
|
Deferred finance charges
|
|
(17,140
|
)
|
|
(13,676
|
)
|
|
|
Total debt, net of deferred finance charges
|
|
1,374,710
|
|
|
1,331,112
|
|
|
|
Tranche
|
Proportion of debt
|
Term of loan
|
Repayment terms
|
Margin on LIBOR
|
K-Sure
|
40%
|
12 years
|
Semi-annual installments
|
2.10%
|
KEXIM
|
40%
|
12 years
|
Semi-annual installments
|
2.75%
|
Commercial
|
20%
|
5 years
|
Semi-annual installments, unpaid balance to be refinanced after 5 years
|
2.75%
|
•
|
free liquid assets of at least
$30 million
;
|
•
|
a minimum EBITDA to debt service ratio of 1.10:1; and
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1.
|
•
|
free liquid assets of at least
$30 million
throughout the charter period;
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1; and
|
•
|
a consolidated tangible net worth of
$123.95 million
.
|
•
|
free liquid assets of at least
$30 million
;
|
•
|
a minimum EBITDA to debt service ratio of 1.15:1; and
|
•
|
a maximum net debt to EBITDA ratio of 6.5:1.
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Total obligations under capital lease
|
|
117,751
|
|
|
143,112
|
|
Year ending December 31,
(in thousands of $)
|
|
Methane
Princess Lease
|
|
2017
|
|
6,929
|
|
2018
|
|
7,208
|
|
2019
|
|
7,489
|
|
2020
|
|
7,775
|
|
2021
|
|
8,078
|
|
2022 and thereafter
|
|
161,594
|
|
Total minimum lease payments
|
|
199,073
|
|
Less: Imputed interest
|
|
(81,322
|
)
|
Present value of minimum lease payments
|
|
117,751
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Deferred tax liability (see note 9)
|
|
3,210
|
|
|
—
|
|
Deferred credits from capital lease transactions
|
|
16,024
|
|
|
16,650
|
|
|
|
19,234
|
|
|
16,650
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Deferred credits from capital lease transactions
|
|
24,691
|
|
|
24,691
|
|
Less: Accumulated amortization
|
|
(8,042
|
)
|
|
(7,416
|
)
|
|
|
16,649
|
|
|
17,275
|
|
Short-term (see note 20)
|
|
625
|
|
|
625
|
|
Long-term
|
|
16,024
|
|
|
16,650
|
|
|
|
16,649
|
|
|
17,275
|
|
Instrument
(in thousands of $)
|
|
Year Ended
|
|
Notional Amount
|
|
Maturity
Dates
|
|
Fixed Interest
Rate
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receiving floating, pay fixed
|
|
December 31, 2016
|
|
1,131,746
|
|
|
2018
|
to
|
2023
|
|
1.07
|
%
|
to
|
2.44%
|
Receiving floating, pay fixed
|
|
December 31, 2015
|
|
863,184
|
|
|
2018
|
to
|
2022
|
|
1.07
|
%
|
to
|
2.96%
|
Derivatives designated as
hedging instruments
|
|
|
|
Effective
portion gain/
(loss) reclassified from
Accumulated Other
Comprehensive Loss
|
|
Ineffective Portion
|
||||||||||||||
(in thousands of $)
|
|
Location
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest rate swaps
|
|
Other financial items, net
|
|
(409
|
)
|
|
2,533
|
|
|
(1,339
|
)
|
|
(639
|
)
|
|
411
|
|
|
(1,210
|
)
|
Derivatives designated as hedging instruments
|
|
Amount of gain/
(loss) recognized in
OCI on derivative
(effective portion)
|
|||||||
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Interest rate swaps
|
|
147
|
|
|
(174
|
)
|
|
492
|
|
|
|
Interest rate element
|
|
Currency element
|
|||||||||||||
|
|
|
|
|
|
Notional Amount
|
|
|
|
Average forward
rate USD foreign
currency
|
|||||||
Instrument
(in thousands)
|
|
Notional Amount
|
|
Fixed Interest Rate
|
|
Receiving in
Norwegian Kroner
|
|
Pay in USD
|
|
Maturity
Date
|
|
||||||
Cross currency interest rate swap
|
|
227,193
|
|
|
6.485
|
%
|
|
1,300,000
|
|
|
227,193
|
|
|
2017
|
|
5.722
|
|
Derivatives designated as hedging instruments
|
|
Amount of gain
(loss) recognized in
OCI on derivative
(effective portion)
|
|||||||
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Cross currency interest rate swap
|
|
4,116
|
|
|
(4,933
|
)
|
|
(184
|
)
|
(in thousands of $)
|
|
Fair Value
Hierarchy(1)
|
|
2016 Carrying Value
|
|
2016 Fair Value
|
|
2015 Carrying Value
|
|
2015 Fair Value
|
||||
Non-Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
Level 1
|
|
65,710
|
|
|
65,710
|
|
|
40,686
|
|
|
40,686
|
|
Restricted cash
|
|
Level 1
|
|
162,415
|
|
|
162,415
|
|
|
193,273
|
|
|
193,273
|
|
High-Yield and 2015 Norwegian Bonds
(1)
|
|
Level 1
|
|
300,452
|
|
|
293,484
|
|
|
297,007
|
|
|
298,845
|
|
Short-term and long-term debt—floating
(2)
|
|
Level 2
|
|
1,091,398
|
|
|
1,091,398
|
|
|
1,047,781
|
|
|
1,047,781
|
|
Obligations under capital leases
(2)
|
|
Level 2
|
|
117,751
|
|
|
117,751
|
|
|
143,112
|
|
|
143,112
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps asset
(3)(4)
|
|
Level 2
|
|
8,194
|
|
|
8,194
|
|
|
1,881
|
|
|
1,881
|
|
Interest rate swaps liability
(3)(4)
|
|
Level 2
|
|
6,143
|
|
|
6,143
|
|
|
15,540
|
|
|
15,540
|
|
Cross currency interest rate swap liability
(3)(5)
|
|
Level 2
|
|
81,454
|
|
|
81,454
|
|
|
89,015
|
|
|
89,015
|
|
Earn out units
(6)
|
|
Level 2
|
|
15,000
|
|
|
15,000
|
|
|
—
|
|
|
—
|
|
1.
|
This pertains to bonds with a carrying value of
$300.5 million
as of
December 31, 2016
(
2015
:
$297.0 million
) which is included under long-term debt on the balance sheet. The fair value of the bonds as of
December 31, 2016
was
$293.5 million
(
2015
:
$298.8 million
), which represents
97.7%
(
2015
:
100.6%
) of their face value.
|
2.
|
Our debt and capital lease obligations are recorded at amortized cost in the consolidated balance sheets. Debt is presented gross of deferred financing cost of
$17.1 million
as of
December 31, 2016
(
2015
:
$13.7 million
).
|
3.
|
Derivative liabilities are captured within other current liabilities and derivative assets are captured within long-term assets on the balance sheet.
|
4.
|
The fair value/carrying value of interest rate swap agreements (excluding the cross currency interest rate swap described in footnote 5) that qualify and are designated as cash flow hedges as of
December 31, 2016
and
2015
was
$0.1 million
(with a notional amount of
$82.5 million
) and
$1.6 million
(with a notional amount of
$142.5 million
), respectively. The expected maturity of these interest rate agreements is in
February 2018
.
|
5.
|
We issued NOK denominated senior unsecured bonds. In order to hedge our exposure, we entered into a non-amortizing cross currency interest rate swap agreement. The swap hedges both the full redemption amount of the NOK obligation and the related quarterly interest payments. We designated the cross currency interest rate swap as a cash flow hedge.
|
6.
|
This relates to the Earn Out units issued in connection with the IDRs reset transaction in October 2016. See note 28 for further details.
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||
(in thousands of $)
|
|
Gross amounts presented in the consolidated balance sheet
|
|
Gross amounts not offset in the consolidated balance sheet subject to netting agreements
|
|
Net amount
|
|
Gross amounts presented in the consolidated balance sheet
|
|
Gross amounts not offset in the consolidated balance sheet subject to netting agreements
|
|
Net amount
|
||||||
Total asset derivatives
|
|
8,194
|
|
|
(4,194
|
)
|
|
4,000
|
|
|
1,881
|
|
|
(1,881
|
)
|
|
—
|
|
Total liability derivatives
|
|
6,143
|
|
|
(4,194
|
)
|
|
1,949
|
|
|
15,540
|
|
|
(1,881
|
)
|
|
13,659
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
|
2014
|
|||
Transactions with Golar and subsidiaries:
|
|
|
|
|
|
|
|
|
|
Time charter revenues (a)
|
|
28,368
|
|
|
41,555
|
|
|
—
|
|
Management and administrative services fees (b)
|
|
(4,251
|
)
|
|
(2,949
|
)
|
|
(2,877
|
)
|
Ship management fees (c)
|
|
(6,466
|
)
|
|
(7,577
|
)
|
|
(7,746
|
)
|
Expense in connection with the Golar Eskimo Vendor Loan (d)
|
|
—
|
|
|
(4,217
|
)
|
|
—
|
|
Interest income on short-term loans (e)
|
|
122
|
|
|
203
|
|
|
—
|
|
Share options expense (f)
|
|
(181
|
)
|
|
(297
|
)
|
|
—
|
|
Income related to the Tundra Letter Agreement (g)
|
|
1,967
|
|
|
—
|
|
|
—
|
|
Distributions to Golar (h)
|
|
(54,688
|
)
|
|
(52,130
|
)
|
|
(61,336
|
)
|
Fees to Helm Energy Advisors Inc. (i)
|
|
(795
|
)
|
|
(2,307
|
)
|
|
—
|
|
Transactions with others:
|
|
|
|
|
|
|
|||
Dividends to China Petroleum Corporation (j)
|
|
(12,360
|
)
|
|
(11,400
|
)
|
|
(13,740
|
)
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Balances due from Golar and its affiliates (e)
|
|
21,908
|
|
|
4,400
|
|
Methane Princess Lease security deposit movements (k)
|
|
2,006
|
|
|
2,728
|
|
Deposit paid to Golar (g)
|
|
107,247
|
|
|
—
|
|
|
|
131,161
|
|
|
7,128
|
|
(in thousands of $)
|
|
2016
|
|
2015
|
||
Carrying value of vessels and equipment secured against long-term loans and capital leases
|
|
1,622,416
|
|
|
1,847,403
|
|
(in units)
|
|
Common Units
|
|
Subordinated Units
|
|
GP Units
|
|||
December 31, 2013 and 2014
|
|
45,663,096
|
|
|
15,949,831
|
|
|
1,257,408
|
|
December 2015 common unit repurchase program
|
|
(496,000
|
)
|
|
—
|
|
|
—
|
|
December 31, 2015
|
|
45,167,096
|
|
|
15,949,831
|
|
|
1,257,408
|
|
January 2016 common unit repurchase program
|
|
(38,000
|
)
|
|
—
|
|
|
—
|
|
June 2016 conversion of subordinated units
|
|
15,949,831
|
|
|
(15,949,831
|
)
|
|
—
|
|
October 2016 IDR reset
|
|
2,994,364
|
|
|
—
|
|
|
61,109
|
|
December 31, 2016
|
|
64,073,291
|
|
|
—
|
|
|
1,318,517
|
|
(in thousands of $ except unit and per unit data)
|
|
2016
|
|
2015
|
|
2014
|
|||
Net income attributable to general partner and limited partner interests
|
|
172,171
|
|
|
162,136
|
|
|
174,154
|
|
Less: distributions paid
(1)
|
|
(152,336
|
)
|
|
(153,796
|
)
|
|
(143,450
|
)
|
Under distributed earnings
|
|
19,835
|
|
|
8,340
|
|
|
30,704
|
|
(Over) under distributed earnings attributable to:
|
|
|
|
|
|
|
|
|
|
Common unitholders
|
|
(11,746
|
)
|
|
3,235
|
|
|
13,347
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
Weighted average units outstanding (in thousands)
|
|
53,745
|
|
|
45,654
|
|
|
45,663
|
|
Diluted:
|
|
|
|
|
|
|
|||
Weighted average units outstanding (in thousands)
|
|
53,745
|
|
|
45,654
|
|
|
45,663
|
|
Earnout units
|
|
189
|
|
|
—
|
|
|
—
|
|
Common stock and common stock equivalents
|
|
53,934
|
|
|
45,654
|
|
|
45,663
|
|
Earnings per unit:
|
|
|
|
|
|
|
|
|
|
Basic - Common unitholders
|
|
2.44
|
|
|
2.38
|
|
|
2.47
|
|
Diluted - Common unitholders
|
|
2.43
|
|
|
2.38
|
|
|
2.47
|
|
Cash distributions declared and paid in the period per unit
(2)
|
|
2.31
|
|
|
2.30
|
|
|
2.14
|
|
Subsequent event
: Cash distributions declared and paid per unit relating to the period
(3)
|
|
0.58
|
|
|
0.58
|
|
|
0.56
|
|
•
|
First,
98%
to the common unitholders, pro rata, and
2%
to the General Partner, until each common unit had received the minimum quarterly distribution for that quarter;
|
•
|
Second,
98%
to the common unitholders, pro rata, and
2%
to the General Partner, until each common unit had received an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for prior quarters during the subordination period; and
|
•
|
Third,
98%
to the subordinated unitholders, pro rata, and
2%
to the General Partner, until each subordinated unit had received the minimum quarterly distribution for that quarter.
|
•
|
we had distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and
|
•
|
we had distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;
|
•
|
first
,
98.0%
to all unitholders, pro rata, and
2.0%
to the General Partner, until each unit holder received a total of
$0.4428
per unit for that quarter (the “first target distribution”);
|
•
|
second
,
85.0%
to all unitholders, pro rata,
2.0%
to the General Partner, and
13.0%
to the holders of the incentive distribution rights, pro rata, until each unit holder received a total of
$0.4813
per unit for that quarter (the “second target distribution”); and
|
•
|
third
,
75.0%
to all unitholders, pro rata,
2.0%
to the General Partner, and
23.0%
to the holders of the incentive distribution rights, pro rata, until each unit holder received a total of
$0.5775
per unit for that quarter (the “third target distribution”).
|
•
|
first
,
98.0%
to all unitholders, pro rata, and
2.0%
to the General Partner, until each outstanding unit received an amount equal to the minimum quarterly distribution for that quarter;
|
•
|
second
,
98.0%
to all unitholders, pro rata, and
2.0%
to the General Partner, until each outstanding unit received a total of the first target distribution for that quarter;
|
•
|
third
,
85.0%
to all unitholders, pro rata,
2.0%
to the General Partner, and
13.0%
to the holders of the incentive distribution rights, pro rata, until each outstanding unit received a total of the second target distribution for that quarter; and
|
•
|
fourth
,
75%
to all unitholders, pro rata,
2.0%
to the General Partner, and
23.0%
to the holders of the incentive distribution rights, pro rata, under each outstanding unit received a total of the third target distribution for that quarter.
|
A.
|
GLP, a limited partnership whose common units are listed and trade on The Nasdaq Global Market, owns interests in certain floating storage and regasification units and LNG carriers and requires certain management and administrative support services in connection with the operation of its business;
|
B.
|
GLP and GML previously entered into that certain Amended and Restated Management and Administrative Services Agreement dated as of July 1, 2011 (the “
Prior Agreement
”) in order to allow GML to provide such management and administrative support services to GLP;
|
C.
|
The term of the Prior Agreement has ended; and
|
D.
|
GLP wishes to engage GML to provide such management and administrative support services to GLP commencing as of April 1, 2016 on the terms set out herein.
|
(i)
|
there is a Change of Control of GLP or GGP;
|
(ii)
|
a receiver is appointed for all or substantially all of the property of GLP;
|
(iii)
|
an order is made to wind up GLP’s partnership;
|
(iv)
|
a final judgment, order or decree which materially and adversely affects the ability of GLP to perform under this Agreement shall have been obtained or entered against GLP, and such judgment, order or decree shall not have been vacated, discharged or stayed; or
|
(v)
|
GLP makes a general assignment for the benefit of its creditors, files a petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt, commences any proceeding for a reorganization or arrangement of debts, dissolution or liquidation under any law or
|
Name
|
Position With GML
|
Services to be Provided to GLP
|
Graham Robjohns
|
Director
|
Principal Executive Officer
|
Oistein Dahl
|
Chief Operating Officer
|
Chief Operating Officer
|
Brian Tienzo
|
Chief Financial Officer
|
Principal Financial and Accounting Officer
|
(1)
|
Golar LNG Partners LP
(a company incorporated in Marshall Islands with Company No. 950020) as issuer (the “
Issuer
”), and
|
(2)
|
Nordic Trustee ASA
(a company incorporated in Norway with Company No. 963 342 624) as bond trustee (the “
Bond Trustee
”).
|
1
|
Interpretation
|
1.1
|
Definitions
|
(a)
|
money borrowed or raised and debit balances at banks;
|
(b)
|
any bond, note, loan stock, debenture or similar debt instrument;
|
(c)
|
acceptance or documentary credit facilities;
|
(d)
|
receivables sold or discounted (otherwise than on a non-recourse basis);
|
(e)
|
deferred payments for assets or services acquired (other than assets or services acquired on normal commercial terms in the ordinary course of business where payment is deferred by no more than one hundred and eighty (180) days);
|
(f)
|
capitalised lease obligations;
|
(g)
|
any other transaction (including, without limitation, forward sale or purchase agreements) having the commercial effect of a borrowing or raising of money;
|
(h)
|
guarantees in respect of the indebtedness of any person not being a member of the Group falling within any of (a) to (g) above; and
|
(i)
|
preferred share capital of the Issuer which is or may be redeemable prior to the Maturity Date.
|
(a)
|
Golar LNG Limited ceases to hold, directly or indirectly, more than 50% of the ownership and voting rights of the General Partner;
|
(b)
|
any person or group becomes the owner, directly or indirectly, of more than 50% of the outstanding shares of Golar LNG Limited; or
|
(c)
|
an entity other than Golar LNG Limited or person, group of persons or entities acting in concert acquires in excess of 50% of the issued share capital (or equivalent) of the Issuer, or has the right or ability to control, either directly or indirectly, the affairs or the composition of the majority of the board of directors (or equivalent) of the Issuer.
|
(a)
|
the aggregate principal payable or paid during such period on any Borrowed Money of the Issuer or any consolidated Subsidiary, other than rental or other obligations under the lease agreements and principal of any such Borrowed Money prepaid at the option of the Issuer;
|
(b)
|
aggregate interest expense, less interest income, (including, without limitation, capitalised interest accrued during such period) of the Issuer and its consolidated Subsidiaries for such period; and
|
(c)
|
all rent and capital lease obligations or operating lease obligations by which the Group Company is bound which are payable or paid during such period, net of cash released during the same period from deposits forming security for lease obligations and the portion of any debt discount that must be amortised in such period as calculated in accordance with GAAP and derived from the then latest audited consolidated accounts of the Issuer and its consolidated Subsidiaries delivered to the Bond Trustee.
|
(a)
|
a majority of the voting rights in that other person; or
|
(b)
|
a right to elect or remove a majority of the members of the board of directors of that other person.
|
(a)
|
including, in relation to vessels acquired or new built and delivered during the Relevant Period (and which have not been in operation for the Group for the full previous 12-month period), the contribution of EBITDA annualized, calculated pro forma for a full 12-month (historical and/or forward looking) period (“
Calculation Period
”), provided it can demonstrate committed employment in the Calculation Period under relevant contract(s); and
|
(b)
|
excluding the consolidated earnings before interest, taxes and depreciation and amortization (calculated as set out above) attributable to any Group Company (or to any business or vessel) disposed of during the Relevant Period.
|
(a)
|
moneys borrowed, including acceptance credit;
|
(b)
|
any bond, note, debenture, loan stock or other similar instrument;
|
(c)
|
the amount of any liability in respect of any lease, hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
|
(d)
|
receivables sold or discounted (other than any receivables sold on a non-recourse basis);
|
(e)
|
any sale and lease-back transaction, or similar transaction which is treated as indebtedness under GAAP;
|
(f)
|
the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset;
|
(g)
|
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price, including without limitation currency or interest rate swaps, caps or collar transactions (and, when calculating the value of the transaction, only the mark-to-market value shall be taken into account);
|
(h)
|
any amounts raised under any other transactions having the commercial effect of a borrowing or raising of money, whether recorded in the balance sheet or not (including any forward sale of purchase agreement);
|
(i)
|
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institutions; and
|
(j)
|
(without double counting) any guarantee, indemnity or similar assurance against financial loss of any person in respect of any of the items referred to in (a) through (i) above.
|
(a)
|
cash balances and deposits (both current and fixed) with banks and other financial institutions available for withdrawal
|
(b)
|
any USD or Euro time deposit, overnight deposit, certificate of deposit or bankers’ acceptance, issued by, or time deposit with any commercial banking institution which has a credit rating of at least A from Standard & Poors;
|
(c)
|
undrawn amounts available for borrowing under existing credit lines with maturity longer than 6 months; and
|
(d)
|
short-term commercial paper issued by institutions, having a rating of at least A from Standard & Poors;
|
1.2
|
Construction
|
(a)
|
headings are for ease of reference only;
|
(b)
|
words denoting the singular number shall include the plural and vice versa;
|
(c)
|
references to Clauses are references to the Clauses of this Bond Agreement;
|
(d)
|
references to a time is a reference to Oslo time unless otherwise stated herein;
|
(e)
|
references to a provision of law is a reference to that provision as it may be amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law, including any determinations, rulings, judgments and other binding decisions relating to such provision or regulation;
|
(f)
|
references to “
control
” means the power to appoint a majority of the board of directors of the Issuer or to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise; and
|
(g)
|
references to a “
person
” shall include any individual, firm, partnership, joint venture, company, corporation, trust, fund, body corporate, unincorporated body of persons, or any state or any agency of a state or association (whether or not having separate legal personality).
|
2
|
The Bonds
|
2.1
|
Binding nature of the Bond Agreement
|
2.1.1
|
The Bondholders are, through their subscription, purchase or other transfer of Bonds bound by the terms of the Bond Agreement and other Finance Documents, as authority to the Bond Trustee to finalize and execute the Bond Agreement on the Bondholders behalf is set out in the subscription documents, term sheet, sales documents or in any other way, and while all Bond transfers are subject to the terms of this Bond Agreement and all Bond transferees are, in taking transfer of Bonds, deemed to have accepted the terms of the Bond Agreement and the other Finance Documents and will automatically become parties to the Bond Agreement upon completed transfer having been registered, without any further action required to be taken or formalities to be complied with, see also Clause 18.1.
|
2.1.2
|
The Bond Agreement is available to anyone and may be obtained from the Bond Trustee or the Issuer. The Issuer shall ensure that the Bond Agreement is available to the general public throughout the entire term of the Bonds. This Bond Agreement may be published at the web site
www.stamdata.no
.
|
2.2
|
The Bond Issue
|
2.2.1
|
The Issuer has resolved to issue a series of Bonds in the total aggregate amount of USD 250,000,000 (US Dollars two hundred and fifty million).
|
2.3
|
Purpose and utilization
|
2.3.1
|
The net proceeds from the Bonds shall be used for refinancing of the Issuer's existing bonds GOLP01 and/or general corporate purposes.
|
3
|
Listing
|
3.1
|
The Issuer shall apply for listing of the Bonds on Oslo Børs within 12 months of the Issue Date.
|
3.2
|
If the Bonds are listed, the Issuer shall ensure that the Bonds remain listed until they have been discharged in full.
|
4
|
Registration in a Securities Depository
|
4.1
|
The Bond Issue and the Bonds shall prior to disbursement be registered in the Securities Depository according to the Securities Depository Act and the terms and conditions of the Securities Depository.
|
4.2
|
The Issuer shall promptly arrange for notification to the Securities Depository of any changes in the terms and conditions of this Bond Agreement. The Bond Trustee shall receive a copy of the notification.
|
4.3
|
The Issuer is responsible for the implementation of correct registration in the Securities Depository. The registration may be executed by an agent for the Issuer provided that the agent is qualified according to relevant regulations.
|
4.4
|
The Bonds have not been registered under the US Securities Act, and the Issuer is under no obligation to arrange for registration of the Bonds under the US Securities Act.
|
5
|
Purchase and transfer of Bonds
|
5.1
|
Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from time to time under local laws to which a Bondholder may be subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each Bondholder must ensure compliance with applicable local laws and regulations at its own cost and expense.
|
5.2
|
Notwithstanding the above, a Bondholder which has purchased the Bonds in breach of applicable mandatory restrictions may nevertheless utilize its rights (including, but not limited to, voting rights) under this Bond Agreement.
|
6
|
Conditions Precedent
|
6.1
|
Disbursement of the net proceeds of the Bonds to the Issuer will be subject to the Bond Trustee having received the following documents, in form and substance satisfactory to it, at least two Business Days prior to the Issue Date:
|
(a)
|
this Bond Agreement duly executed by all parties thereto;
|
(b)
|
certified copies of all necessary corporate resolutions to issue the Bonds and execute the Finance Documents;
|
(c)
|
a power of attorney from the Issuer to relevant individuals for their execution of the relevant Finance Documents, or extracts from the relevant register or similar documentation evidencing the individuals' authorisation to sign the Finance Documents on behalf of the Issuer;
|
(d)
|
certified copies of (i) the Certificate of Incorporation or other similar official document for the Issuer, evidencing that it is validly existing and (ii) Articles of Association of the Issuer;
|
(e)
|
the latest Financial Statements and Quarterly Financial Report;
|
(f)
|
confirmation that the requirements set forth in Chapter 7 of the Norwegian Securities Trading Act (implementing the EU prospectus directive (2003/71 EC) concerning prospectuses have been fulfilled;
|
(g)
|
to the extent necessary, any public authorisations required for the Bond Issue;
|
(h)
|
confirmation that the Bonds have been registered in the Securities Depository;
|
(i)
|
the agreement set forth in Clause 14.2, duly executed;
|
(j)
|
copies of any written documentation used in the marketing of the Bond Issue or made public by the Issuer or the Managers in connection with the Bond Issue; and
|
(k)
|
any statements or legal opinions reasonably required by the Bond Trustee (including any capacity corporate opinions for the Issuer and opinions related to the validity, perfection and enforceability of the Finance Documents);
|
6.2
|
The Bond Trustee may, in its reasonable opinion, waive the deadline or requirements for documentation as set forth in Clause 6.1.
|
6.3
|
The Bond Trustee may require any statement or legal opinion in connection with the Bond Issue (pre and post Issue Date).
|
6.4
|
Disbursement of the net proceeds from the Bonds is subject to the Bond Trustee’s written notice to the Issuer, the Managers and the Paying Agent that the documents have been controlled and that the required conditions precedent are fulfilled.
|
6.5
|
On the Issue Date, subject to receipt of confirmation from the Bond Trustee pursuant to Clause 6.4, the Managers shall make the net proceeds from the Bond Issue available to the Issuer.
|
7
|
Representations and Warranties
|
7.1
|
The Issuer represents and warrants to the Bond Trustee (on behalf of the Bondholders) that:
|
(a)
|
Status
|
(b)
|
Power and authority
|
(c)
|
Valid, binding and enforceable obligations
|
(d)
|
Non-conflict with other obligations
|
(e)
|
No Event of Default
|
(f)
|
Authorizations and consents
|
(g)
|
Litigation
|
(h)
|
Financial Statements
|
(i)
|
No undisclosed liabilities
|
(j)
|
No Material Adverse Effect
|
(k)
|
No misleading information
|
(l)
|
Environmental compliance
|
(m)
|
Intellectual property
|
(a)
|
its patents, trademarks, service marks, designs, business names, copyrights, design rights, inventions, confidential information and other intellectual property rights and interests (whether registered or unregistered), and
|
(b)
|
the benefit of all applications and rights to use such assets
|
(n)
|
No withholdings
|
(o)
|
Pari passu ranking
|
(p)
|
Encumbrances
|
7.2
|
The representations and warranties set out in Clause 7.1 are made on the execution date of this Bond Agreement, and shall be deemed to be repeated on the Issue Date.
|
7.3
|
In the event of misrepresentation, the Issuer shall indemnify the Bond Trustee for any economic losses suffered, both prior to the disbursement of the Bonds, and
|
8
|
Status of the Bonds and security
|
8.1
|
The Bonds shall rank as senior unsecured debt of the Issuer. The Bonds shall rank
pari passu
with other senior unsecured debt of the Issuer save for obligations which are mandatorily preferred by law. The Bonds shall rank ahead of subordinated debt.
|
8.2
|
The Bonds are unsecured.
|
9
|
Interest
|
9.1
|
The Issuer shall pay interest on the face value of the Bonds from, and including, the Issue Date at the Bond Reference Rate plus the Margin (together the “
Floating Rate
”).
|
9.2
|
Interest payments shall be made in arrears on the Interest Payment Dates each year, the first Interest Payment Date falls in May 2017.
|
9.3
|
The relevant interest payable amount shall be calculated based on a period from, and including, one Interest Payment Date to, but excluding, the next following applicable Interest Payment Date.
|
9.4
|
The day count fraction (“
Floating Rate Day Count Fraction
”) in respect of the calculation of the payable interest amount shall be “Actual/360”, which means that the number of days in the calculation period in which payment being made divided by 360.
|
9.5
|
The applicable Floating Rate on the Bonds is set/reset on each Interest Payment Date by the Bond Trustee commencing on the Interest Payment Date at the beginning of the relevant calculation period, based on the Bond Reference Rate two Business Days preceding that Interest Payment Date or, in the case of the first interest period, two Business Days preceding the Issue Date.
|
9.6
|
The payable interest amount per Bond for a relevant calculation period shall be calculated as follows:
|
10
|
Maturity of the Bonds and Change of Control
|
10.1
|
Maturity
|
10.2
|
Change of Control
|
10.2.1
|
Upon the occurrence of a Change of Control Event each Bondholder shall have a right of pre-payment (a “
Put Option
”) of its Bonds at a price of 101 % of par plus accrued interest.
|
10.2.2
|
The Put Option must be exercised within 30 days after the Issuer has given notification to the Bond Trustee and the Bondholders of a Change of Control Event. Such notification shall be given as soon as possible after a Change of Control Event has taken place.
|
10.2.3
|
On the settlement date of the Put Option, the Issuer shall pay to each of the Bondholders holding Bonds to be pre-paid, the principal amount of each such Bond (including the premium pursuant to Clause 10.2.1) and any unpaid interest accrued up to (but not including) the settlement date.
|
10.2.4
|
If Bonds representing more than 90 per cent of the Outstanding Bonds have been repurchased by the Issuer pursuant to this Clause 10.2 (
Change of Control
) (Put Option), the Issuer is entitled to repurchase all the remaining Outstanding Bonds at the price stated in Clause 10.2.3 above by notifying the remaining Bondholders of its intention to do so no later than 20 calendar days after the settlement date of the Put Option. Such prepayment may occur at the earliest on the 15th calendar day following the date of such notice.
|
11
|
Payments
|
11.1
|
Covenant to pay
|
11.1.1
|
The Issuer will on any Payment Date (or any other due date pursuant to any Finance Document) unconditionally pay to or to the order of the Bond Trustee all amounts due under this Bond Agreement or any other Finance Document.
|
11.1.2
|
The covenant contained in Clause 11.1.1 shall be for the benefit of the Bond Trustee and the Bondholders
|
11.2
|
Payment mechanics
|
11.2.1
|
If no specific order is made by the Bond Trustee under Clause 11.1.1, the Issuer shall pay all amounts due to the Bondholders under the Bonds and this Bond Agreement or any other Finance Document by crediting the bank account nominated by each Bondholder in connection with its securities account in the Securities Depository.
|
11.2.2
|
Payment shall be deemed to have been made once the amount has been credited to the bank which holds the bank account nominated by the Bondholder in question, but if the paying bank and the receiving bank are the same, payment shall be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question, see however Clause 11.3.
|
11.2.3
|
In case of irregular payments, the Bond Trustee may instruct the Issuer, the Bondholders or others of other payment mechanisms than described in Clause 11.2.1 or 11.2.2 above. The Bond Trustee may also obtain payment information regarding Bondholders’ accounts from the Securities Depository or Account Managers.
|
11.2.4
|
Subject to Clause 11.3, payment by the Issuer in accordance with this Clause 11.2 shall constitute good discharge of its obligations under Clause 11.1.1.
|
11.3
|
Currency
|
11.3.1
|
Each Bondholder shall provide the Paying Agent (either directly or through its Account Manager) with specific payment instructions, including foreign exchange bank account details. Depending on any currency exchange settlement agreements between each Bondholder’s bank and the Paying Agent, cash settlement may be delayed, and payment shall be deemed to have been made at the date of the cash settlement, provided however, that no default interest or other penalty shall accrue for the account of the Issuer.
|
11.3.2
|
Except as otherwise expressly provided, all amounts payable under this Bond Agreement and any other Finance Document shall be payable in the same currency as the Bonds are denominated in. If, however, the Bondholder has not given instruction as set out in Clause 11.3 within five Business Days prior to a Payment Date, the cash settlement will be exchanged into NOK and credited to the NOK bank account registered with the Bondholder’s account in the Securities Depository.
|
11.3.3
|
Amounts payable in respect of costs, expenses, taxes and other liabilities shall be payable in the currency in which they are incurred.
|
11.4
|
Set-off and counterclaims
|
11.4.1
|
The Issuer may not apply or perform any counterclaims or set-off against any payment obligations pursuant to this Bond Agreement or any other Finance Document.
|
11.5
|
Interest in the event of late payment
|
11.5.1
|
In the event that payment of interest or principal is not made on the relevant Payment Date, the unpaid amount shall bear interest from the Payment Date at an interest rate equivalent to the interest rate according to Clause 9 plus 5.00 percentage points.
|
11.5.2
|
The interest charged under this Clause 11.5 shall be added to the defaulted amount on each respective Interest Payment Date relating thereto until the defaulted amount has been repaid in full.
|
11.5.3
|
The unpaid amounts shall bear interest as stated above until payment is made, whether or not the Bonds are declared to be in default pursuant to Clause 15.1 (a), cf. Clauses 15.2 - 15.4.
|
11.6
|
Partial payments
|
11.6.1
|
If the Bond Trustee or the Paying Agent receives a payment that is insufficient to discharge all the amounts then due and payable under the Finance Documents, that payment shall be applied in the following order:
|
(a)
|
first, in or towards payment of any unpaid fees, costs and expenses of the Bond Trustee under the Finance Documents;
|
(b)
|
secondly, in or towards payment of any accrued interest due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind; and
|
(c)
|
thirdly, in or towards payment of any principal due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind.
|
12
|
Issuer’s acquisition of Bonds
|
12.1
|
The Issuer has the right to acquire and own Bonds (Issuer’s Bonds). The Issuer’s Bonds may at the Issuer’s discretion be retained by the Issuer, sold or discharged.
|
13
|
Covenants
|
13.1
|
General
|
13.1.1
|
The Issuer has undertaken the covenants in this Clause 13 to the Bond Trustee (on behalf of the Bondholders), as further stated below.
|
13.1.2
|
The covenants in this Clause 13 shall remain in force from the date of this Bond Agreement and until such time that no amounts are outstanding under this Bond Agreement and any other Finance Document, unless the Bond Trustee (or the Bondholders’ Meeting, as the case may be), has agreed in writing to waive any covenant, and then only to the extent of such waiver, and on the terms and conditions set forth in such waiver.
|
13.2
|
Information Covenants
|
13.2.1
|
The Issuer shall
|
(a)
|
without being requested to do so, immediately inform the Bond Trustee in writing of any Event of Default as well as of any circumstances which the Issuer understands or should understand is likely to become an Event of Default;
|
(b)
|
without being requested to do so, inform the Bond Trustee in writing of any other event which may have a Material Adverse Effect;
|
(c)
|
without being requested to do so, inform the Bond Trustee if the Issuer intends to sell or dispose of all or a substantial part of its assets or operations, or change the nature of its business;
|
(d)
|
without being requested to do so, produce Financial Statements annually and Quarterly Financial Reports quarterly and make them directly available to the Bond Trustee and available on its website in the English language as soon as they become available, and not later than 120 days after the end of the financial year and 60 days after the end of the interim period, subject to any exemption, waiver or extension granted by Oslo Børs;
|
(e)
|
at the request of the Bond Trustee, report the balance of the Issuer’s Bonds;
|
(f)
|
without being requested to do so, send the Bond Trustee copies of any creditors’ notifications of the Issuer, including but not limited to mergers, de-mergers and reduction of the Issuer’s share capital or equity;
|
(g)
|
without being requested to do so, send a copy to the Bond Trustee of its notices to the Exchange (if listed) which are of relevance for the Issuer’s liabilities pursuant to this Bond Agreement;
|
(h)
|
without being requested to do so, inform the Bond Trustee of changes in the registration of the Bonds in the Securities Depository; and
|
(i)
|
within a reasonable time, provide such information about the Issuer’s business, assets and financial condition as the Bond Trustee may reasonably request.
|
13.2.2
|
The Issuer shall at the request of the Bond Trustee provide the documents and information necessary to maintain the listing and quotation of the Bonds on the Exchange (if listed) and to otherwise enable the Bond Trustee to carry out its rights and duties pursuant to this Bond Agreement and the other Finance Documents, as well as applicable laws and regulations.
|
13.2.3
|
The Issuer shall in connection with the issue of its Financial Statements and Quarterly Financial Reports under Clause 13.2.1 (d), confirm to the Bond Trustee in writing the Issuer’s compliance with the covenants in Clause 13. Such confirmation shall be undertaken in a compliance certificate, substantially in the format set out in Attachment 1 hereto, signed by the Chief Executive Officer or Chief Financial Officer of the Issuer. In the event of non-compliance, the compliance certificate shall describe the non-compliance, the reasons therefore as well as the steps which the Issuer has taken and will take in order to rectify the non-compliance.
|
13.3
|
General Covenants
|
(a)
|
Pari passu ranking
|
(b)
|
Mergers
|
(c)
|
De-mergers
|
(d)
|
Continuation of business
|
(e)
|
Disposal of business
|
13.4
|
Corporate and operational matters
|
(a)
|
Intra-group transactions
|
(b)
|
Transactions with shareholders, directors and affiliated companies
|
(c)
|
Corporate status
|
(d)
|
Compliance with laws
|
(e)
|
Litigations
|
(a)
|
litigations, arbitrations or administrative proceedings which have been or might be started by or against any Group Company and which, if decided adversely is likely to have a Material Adverse Effect; and
|
(b)
|
other events which have occurred or might occur and which is likely to have a Material Adverse Effect, as the Bond Trustee may reasonably request.
|
(f)
|
Subordination of Shareholders Loans
|
(g)
|
Listing of Issuers shares
|
13.5
|
Financial Covenants
|
(a)
|
Free Liquidity
|
(b)
|
EBITDA to Debt Service Ratio
|
(c)
|
Net Debt to EBITDA Ratio
|
14
|
Fees and expenses
|
14.1
|
The Issuer shall cover all costs and expenses incurred by it or the Bond Trustee in connection with this Bond Agreement and the fulfilment of its obligations under this Bond Agreement or any other Finance Document, including in connection with the negotiation, preparation, execution and enforcement of this Bond Agreement and the other Finance Documents and any registration or notifications relating thereto (including any stamp duty), the listing of the Bonds on an Exchange (if applicable), and the registration and administration of the Bonds in the Securities Depository. The Bond Trustee may withhold funds from any escrow account (or similar arrangement) or from other funds received from the Issuer or any other person, irrespective of such funds being subject to Security under a Finance Documents, to set-off and cover any such costs and expenses.
|
14.2
|
The fees, costs and expenses payable to the Bond Trustee shall be paid by the Issuer and are set out in a separate agreement between the Issuer and the Bond Trustee.
|
14.3
|
Fees, costs and expenses payable to the Bond Trustee which, due to the Issuer’s insolvency or similar circumstances, are not reimbursed in any other way may be covered by making an equivalent reduction in the proceeds to the Bondholders hereunder of any costs and expenses incurred by the Bond Trustee in connection with the restructuring or default of the Bond Issue and the enforcement of any Finance Document.
|
14.4
|
Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the Issuer is not responsible for reimbursing any such fees.
|
14.5
|
The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to the Bondholders.
|
14.6
|
If the Issuer is required by law to withhold any withholding tax from any payment under any Finance Document:
|
(a)
|
the amount of the payment due from the Issuer shall be increased to such amount which is necessary to ensure that the Bondholders receive a net amount which is (after making the required withholding) equal to the payment which would have been due if no withholding had been required; and
|
(b)
|
the Issuer shall at the request of the Bond Trustee deliver to the Bond Trustee evidence that the required tax reduction or withholding has been made.
|
14.7
|
If any withholding tax is imposed due to subsequent changes in applicable law after the date of this Bond Agreement, the Issuer shall have the right to call all but not some of the Bonds at par value plus accrued interest. Such call shall be notified by the Issuer in writing to the Bond Trustee and the Bondholders at least thirty - 30 - Business Days prior to the settlement date of the call.
|
15
|
Events of Default
|
15.1
|
Each of the events or circumstances set out in this Clause 15.1 shall constitute an Event of Default:
|
(a)
|
Non-payment
|
(i)
|
its failure to pay is caused by administrative or technical error in payment systems or the Securities Depository and payment is made within five (5) Business Days following the original due date; or
|
(ii)
|
in the discretion of the Bond Trustee, the Issuer has substantiated that it is likely that such payment will be made in full within five (5) Business Days following the original due date.
|
(b)
|
Breach of other obligations
|
(c)
|
Misrepresentation
|
(d)
|
Cross default
|
(i)
|
any Financial Indebtedness is not paid when due nor within any applicable grace period; or
|
(ii)
|
any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); or
|
(iii)
|
any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described); or
|
(iv)
|
any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described),
|
(e)
|
Insolvency and insolvency proceedings
|
(i)
|
is or becomes Insolvent; or
|
(ii)
|
is or becomes the object of any corporate action or any legal proceedings is taken in relation to:
|
(A)
|
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) other than a solvent liquidation or reorganization; or
|
(B)
|
a composition, compromise, assignment or arrangement with any creditor which may materially impair its ability to perform its payment obligations under the terms and conditions of this Bond Agreement; or
|
(C)
|
the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other similar officer of any of its assets; or
|
(D)
|
enforcement of any Security over any of its or their assets having an aggregate value exceeding the threshold amount set out in paragraph 15.1 (d) (
Cross default
) above; or
|
(E)
|
for (A) - (D) above, any analogous procedure or step is taken in any jurisdiction in respect of any such company,
|
(f)
|
Creditor’s process
|
(g)
|
Unlawfulness
|
(i)
|
the ability of the Issuer to perform its obligations under terms and conditions of this Bond Agreement ; or
|
(ii)
|
the ability of the Bond Trustee or any Security Agent to exercise any material right or power vested to it under the Finance Documents.
|
15.2
|
In the event that one or more of the circumstances mentioned in Clause 15.1 occurs and is continuing, the Bond Trustee can, in order to protect the interests of the Bondholders, declare the Outstanding Bonds including accrued interest and expenses to be in default and due for immediate payment.
|
15.3
|
In the event that one or more of the circumstances mentioned in Clause 15.1 occurs and is continuing, the Bond Trustee shall declare the Outstanding Bonds including accrued interest and costs to be in default and due for payment if:
|
(a)
|
the Bond Trustee receives a demand in writing that a default shall be declared from Bondholders representing at least 1/5 of the Voting Bonds, and the Bondholders’ Meeting has not decided on other solutions, or
|
(b)
|
the Bondholders’ Meeting has with simple majority decided to declare the Outstanding Bonds in default and due for payment.
|
15.4
|
In the event that the Bond Trustee pursuant to the terms of Clauses 15.2 or 15.3 declares the Outstanding Bonds to be in default and due for payment, the Bond Trustee shall immediately deliver to the Issuer a notice demanding payment of interest and principal due to the Bondholders under the Outstanding Bonds including accrued interest and interest on overdue amounts and expenses.
|
16
|
Bondholders’ Meeting
|
16.1
|
Authority of the Bondholders’ Meeting
|
16.1.1
|
The Bondholders’ Meeting represents the supreme authority of the Bondholders community in all matters relating to the Bonds, and has the power to make all decisions altering the terms and conditions of the Bonds, including, but not limited
|
16.1.2
|
The Bondholders’ Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction of the principal that has not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding reduction of principal.
|
16.1.3
|
If a resolution by or an approval of the Bondholders is required, such resolution shall be passed at a Bondholders’ Meeting, see however Clause 17.1. Resolutions passed at Bondholders’ Meetings shall be binding upon all Bondholders and prevail for all the Bonds.
|
16.2
|
Procedural rules for Bondholders’ meetings
|
16.2.1
|
A Bondholders’ Meeting shall be held at the written request of:
|
(a)
|
the Issuer;
|
(b)
|
Bondholders representing at least 1/10 of the Voting Bonds;
|
(c)
|
the Exchange, if the Bonds are listed; or
|
(d)
|
the Bond Trustee.
|
16.2.2
|
The Bondholders’ Meeting shall be summoned by the Bond Trustee. A request for a Bondholders’ Meeting shall be made in writing to the Bond Trustee, and shall clearly state the matters to be discussed.
|
16.2.3
|
If the Bond Trustee has not summoned a Bondholders’ Meeting within ten Business Days after having received a valid request, then the requesting party may summons the Bondholders’ Meeting itself.
|
16.2.4
|
The summons to a Bondholders’ Meeting shall be dispatched no later than ten Business Days prior to the date of the Bondholders’ Meeting. The summons and a confirmation of each Bondholder’s holdings of Bonds shall be sent to all Bondholders registered in the Securities Depository at the time of distribution. The Exchange shall also be informed if the Bonds are listed.
|
16.2.5
|
The summons shall specify the agenda of the Bondholders’ Meeting. The Bond Trustee may in the summons also set out other matters on the agenda than those requested. If amendments to this Bond Agreement have been proposed, the main content of the proposal shall be stated in the summons.
|
16.2.6
|
The Bond Trustee may restrict the Issuer from making any changes in the number of Voting Bonds in the period from distribution of the summons until the Bondholders’ Meeting, by serving notice to it to such effect.
|
16.2.7
|
Matters that have not been reported to the Bondholders in accordance with the procedural rules for summoning of a Bondholders’ Meeting may only be adopted with the approval of all Voting Bonds.
|
16.2.8
|
The Bondholders’ Meeting shall be held on premises designated by the Bond Trustee. The Bondholders’ Meeting shall be opened and shall, unless otherwise decided by the Bondholders’ Meeting, be chaired by the Bond Trustee. If the Bond Trustee is not present, the Bondholders’ Meeting shall be opened by a Bondholder, and be chaired by a representative elected by the Bondholders’ Meeting.
|
16.2.9
|
Minutes of the Bondholders’ Meeting shall be kept. The minutes shall state the number of Bonds represented at the Bondholders’ Meeting, the resolutions passed at the meeting, and the result of the voting. The minutes shall be signed by the chairman and at least one other person elected by the Bondholders’ Meeting. The minutes shall be deposited with the Bond Trustee and shall be available to the Bondholders.
|
16.2.10
|
The Bondholders, the Bond Trustee and – provided the Bonds are listed – representatives of the Exchange, have the right to attend the Bondholders’ Meeting. The chairman may grant access to the meeting to other parties, unless the Bondholders’ Meeting decides otherwise. Bondholders may attend by a representative holding proxy. Bondholders have the right to be assisted by an advisor. In case of dispute the chairman shall decide who may attend the Bondholders’ Meeting and vote for the Bonds.
|
16.2.11
|
Representatives of the Issuer have the right to attend the Bondholders’ Meeting. The Bondholders’ Meeting may resolve that the Issuer’s representatives may not participate in particular matters. The Issuer has the right to be present under the voting.
|
16.3
|
Resolutions passed at Bondholders’ Meetings
|
16.3.1
|
At the Bondholders’ Meeting each Bondholder may cast one vote for each Voting Bond owned at close of business on the day prior to the date of the Bondholders’ Meeting in accordance with the records registered in the Securities Depository. The Bond Trustee may, at its sole discretion, accept other evidence of ownership. Whoever opens the Bondholders’ Meeting shall adjudicate any question concerning which Bonds shall count as the Issuer’s Bonds. The Issuer’s Bonds shall not have any voting rights.
|
16.3.2
|
In all matters, the Issuer, the Bond Trustee and any Bondholder have the right to demand vote by ballot. In case of parity of votes, the chairman shall have the deciding vote, regardless of the chairman being a Bondholder or not.
|
16.3.3
|
In order to form a quorum, at least half (1/2) of the Voting Bonds must be represented at the meeting, see however Clause 16.4. Even if less than half (1/2) of the Voting Bonds are represented, the Bondholders’ Meeting shall be held and voting completed.
|
16.3.4
|
Resolutions shall be passed by simple majority of the Voting Bonds represented at the Bondholders’ Meeting, unless otherwise set out in Clause 16.3.5.
|
16.3.5
|
A majority of at least 2/3 of the Voting Bonds represented at the Bondholders’ Meeting is required for any waiver or amendment of any terms of this Bond Agreement.
|
16.3.6
|
The Bondholders’ Meeting may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.
|
16.3.7
|
The Bond Trustee shall ensure that resolutions passed at the Bondholders’ Meeting are properly implemented, however, the Bond Trustee may refuse to carry out resolutions being in conflict with this Bond Agreement (or any other Finance Document) or any applicable law.
|
16.3.8
|
The Issuer, the Bondholders and the Exchange shall be notified of resolutions passed at the Bondholders’ Meeting.
|
16.4
|
Repeated Bondholders’ Meeting
|
16.4.1
|
If the Bondholders’ Meeting does not form a quorum pursuant to Clause 16.3.3, a repeated Bondholders’ Meeting may be summoned to vote on the same matters. The attendance and the voting result of the first Bondholders’ Meeting shall be specified in the summons for the repeated Bondholders’ Meeting.
|
16.4.2
|
The procedures and resolutions as set out in 16.2 and 16.3 above also apply for a repeated Bondholders’ meeting, however, a valid resolution may be passed at a repeated Bondholders’ Meeting even though less than half (1/2) of the Voting Bonds are represented.
|
17
|
The Bond Trustee
|
17.1
|
The role and authority of the Bond Trustee
|
17.1.1
|
The Bond Trustee shall monitor the compliance by the Issuer of its obligations under this Bond Agreement and applicable laws and regulations which are relevant to the terms of this Bond Agreement, including supervision of timely and correct payment of principal or interest, (however, this shall not restrict the Bond Trustee from discussing matters of confidentiality with the Issuer), arrange Bondholders’ Meetings, and make the decisions and implement the measures resolved pursuant to this Bond Agreement. The Bond Trustee is not obligated to assess the Issuer’s financial situation beyond what is directly set out in this Bond Agreement.
|
17.1.2
|
The Bond Trustee may take any step it in its sole discretion considers necessary or advisable to ensure the rights of the Bondholders in all matters pursuant to the terms of this Bond Agreement and is entitled to rely on advice from professional advisors. The Bond Trustee may in its sole discretion postpone taking action until such matter has been put forward to the Bondholders’ Meeting. The Bond Trustee is not obliged to take any steps to ascertain whether any Event of Default has occurred and until it has actual knowledge or express notice to the contrary the Bond Trustee is entitled to assume that no Event of Default has occurred.
|
17.1.3
|
The Bond Trustee may make decisions binding for all Bondholders concerning this Bond Agreement, including amendments to this Bond Agreement and waivers or modifications of certain provisions, which in the opinion of the Bond Trustee, do not materially and adversely affect the rights or interests of the Bondholders pursuant to this Bond Agreement.
|
17.1.4
|
The Bond Trustee may reach decisions binding for all Bondholders in circumstances other than those mentioned in Clause 17.1.3 provided that prior notification has been made to the Bondholders. Such notice shall contain a proposal of the amendment and the Bond Trustee’s evaluation. Further, such notification shall state that the Bond Trustee may not reach a decision binding for all Bondholders in the event that any Bondholder submits a written protest against the proposal within a deadline set by the Bond Trustee. Such deadline may not be less than five Business Days following the dispatch of such notification.
|
17.1.5
|
The Bond Trustee may reach other decisions than set out in Clauses 17.1.3 or 17.1.4 to amend or rectify decisions which due to spelling errors, calculation mistakes, misunderstandings or other obvious errors do not have the intended meaning.
|
17.1.6
|
The Bond Trustee may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.
|
17.1.7
|
The Issuer, the Bondholders and the Exchange shall be notified of decisions made by the Bond Trustee pursuant to Clause 17.1 unless such notice obviously is unnecessary.
|
17.1.8
|
The Bondholders’ Meeting can decide to replace the Bond Trustee without the Issuer’s approval, as provided for in Clause 16.3.5.
|
17.1.9
|
The Bond Trustee may act as bond trustee and/or security agent for several bond issues relating to the Issuer notwithstanding potential conflicts of interest. The Bond Trustee may delegate exercise of its powers to other professional parties.
|
17.1.10
|
The Bond Trustee may instruct the Paying Agent to split the Bonds to a lower denomination in order to facilitate partial redemptions or restructuring of the Bonds or other situations.
|
17.2
|
Liability and indemnity
|
17.2.1
|
The Bond Trustee is liable only for direct losses incurred by Bondholders or the Issuer as a result of gross negligence or wilful misconduct by the Bond Trustee in performing its functions and duties as set out in this Bond Agreement. Such liability
|
17.2.2
|
The Issuer is liable for, and shall indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by the Bond Trustee as a result of negligence by the Issuer (including its directors, management, officers, employees, agents and representatives) to fulfil its obligations under the terms of this Bond Agreement and any other Finance Document, including losses incurred by the Bond Trustee as a result of the Bond Trustee’s actions based on misrepresentations made by the Issuer in connection with the establishment and performance of this Bond Agreement and any other Finance Document.
|
17.2.3
|
The Bond Trustee can as a condition for carrying out an instruction from the Bondholders (including, but not limited to, instructions set out in Clause 15.3 (a) or 16.2.1 (b), require satisfactory security and indemnities for any possible liability and anticipated costs and expenses, from those Bondholders who requested that instruction and/or those who voted in favour of the decision to instruct the Bond Trustee. Any instructions from the Bondholders may be put forward to the Bondholders’ Meeting by the Bond Trustee before the Bond Trustee takes any action.
|
17.3
|
Change of Bond Trustee
|
17.3.1
|
Change of Bond Trustee shall be carried out pursuant to the procedures set out in Clause 16. The Bond Trustee shall continue to carry out its duties as bond trustee until such time that a new Bond Trustee is elected.
|
17.3.2
|
The fees and expenses of a new bond trustee shall be covered by the Issuer pursuant to the terms set out in Clause 14, but may be recovered wholly or partially from the Bond Trustee if the change is due to a breach by the Bond Trustee of its duties pursuant to the terms of this Bond Agreement or other circumstances for which the Bond Trustee is liable.
|
17.3.3
|
The Bond Trustee undertakes to co-operate so that the new bond trustee receives without undue delay following the Bondholders’ Meeting the documentation and information necessary to perform the functions as set out under the terms of this Bond Agreement.
|
18
|
Miscellaneous
|
18.1
|
The community of Bondholders
|
18.1.1
|
By virtue of holding Bonds, which are governed by this Bond Agreement (which pursuant to Clause 2.1.1 is binding upon all Bondholders), a community exists between the Bondholders, implying, inter alia, that
|
(a)
|
the Bondholders are bound by the terms of this Bond Agreement;
|
(b)
|
the Bond Trustee has power and authority to act on behalf of, and/or represent, the Bondholders, in all matters, included but not limited to taking any legal or other action, including enforcement of the Bond Issue and/or any Security, opening of bankruptcy or other insolvency proceedings;
|
(c)
|
the Bond Trustee has, in order to manage the terms of this Bond Agreement, access to the Securities Depository to review ownership of Bonds registered in the Securities Depository; and
|
(d)
|
this Bond Agreement establishes a community between Bondholders meaning that;
|
(i)
|
the Bonds rank pari passu between each other;
|
(ii)
|
the Bondholders may not, based on this Bond Agreement, act directly towards, and may not themselves institute legal proceedings against, the Issuer, guarantors or any other third party based on claims derived from the Finance Documents, including but not limited to recover the Bonds, enforcing any Security Interest or pursuing claims against any party as a substitute for damages to the interests under the Finance Documents, regardless of claims being pursued on a contractual or non-contractual basis, however not restricting the Bondholders to exercise their individual rights derived from this Bond Agreement;
|
(iii)
|
the Issuer may not, based on this Bond Agreement, act directly towards the Bondholders;
|
(iv)
|
the Bondholders may not cancel the Bondholders’ community; and
|
(v)
|
the individual Bondholder may not resign from the Bondholders’ community.
|
18.2
|
Bond Defeasance
|
18.2.1
|
The Issuer may, at its option and at any time, elect to have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“
Bond Defeasance
”);
|
(a)
|
the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Bondholders cash or government bonds accepted by the Bond Trustee, or other security accepted by the Bond Trustee, (the “
Defeasance Security
”) in such amounts as will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a Call Option) and interest on the Outstanding Bonds to Maturity Date (or upon an exercise of a Call Option plus applicable premium) or any other amount agreed between the Parties;
|
(b)
|
the Issuer shall have delivered to the Bond Trustee a duly signed certificate that the Defeasance Security was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others; and
|
(c)
|
the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required by the Bond Trustee regarding the Bond Defeasance including any statements regarding the perfection and enforceability, rights against other creditors (including any hardening period) and other issues regarding the Defeasance Security.
|
18.2.2
|
Upon the exercise by the Issuer of the Bond Defeasance:
|
(a)
|
the Issuer shall be released from the obligations under all provisions in Clause 13, except Clauses 13.2.1 (a), (e), (h) and (i), or as otherwise agreed;
|
(b)
|
the Issuer shall not (and shall ensure that all Group Companies shall not) take any actions that may cause the value of the Defeasance Security to be reduced, and shall at the request of the Bond Trustee execute, such further actions as the Bond Trustee may reasonably require;
|
(c)
|
any Security other than the Defeasance Security shall be discharged; and
|
(d)
|
all other provisions of this Bond Agreement (except (a) – (b) above) shall remain fully in force without any modifications, or as otherwise agreed.
|
18.2.3
|
All amounts owed by the Issuer hereunder covered by the Defeasance Security shall be applied by the Bond Trustee, in accordance with the provisions of this Bond Agreement, against payment to the Bondholders of all sums due to them under this Bond Agreement on the due date thereof.
|
18.2.4
|
If the Bonds are secured, the Defeasance Security shall be considered as a replacement of the Security established prior to the Defeasance Security.
|
18.3
|
Limitation of claims
|
18.3.1
|
All claims under the Bonds and this Bond Agreement for payment, including interest and principal, shall be subject to the time-bar provisions of the Norwegian Limitation Act of May 18, 1979 No. 18.
|
18.4
|
Access to information
|
18.4.1
|
The Bond Agreement is available to anyone and copies may be obtained from the Bond Trustee or the Issuer. The Bond Trustee shall not have any obligation to distribute any other information to the Bondholders or others than explicitly stated in this Bond Agreement. The Issuer shall ensure that the Bond Agreement is available in copy form to the general public until all the Bonds have been fully discharged.
|
18.4.2
|
The Bond Trustee shall, in order to carry out its functions and obligations under the Bond Agreement, have access to the Securities Depository for the purposes of reviewing ownership of the Bonds registered in the Securities Depository.
|
18.5
|
Amendments
|
18.5.1
|
All amendments of this Bond Agreement shall be made in writing, and shall unless otherwise provided for by this Bond Agreement, only be made with the approval of all parties hereto.
|
18.6
|
Notices, contact information
|
18.6.1
|
Written notices, warnings, summons etc to the Bondholders made by the Bond Trustee shall be sent via the Securities Depository with a copy to the Issuer and the Exchange. Information to the Bondholders may also be published at the web site
www.stamdata.no
.
|
18.6.2
|
The Issuer’s written notifications to the Bondholders shall be sent via the Bond Trustee, alternatively through the Securities Depository with a copy to the Bond Trustee and the Exchange.
|
18.6.3
|
Unless otherwise specifically provided, all notices or other communications under or in connection with this Bond Agreement between the Bond Trustee and the Issuer shall be given or made in writing, by letter, or telefax. Any such notice or communication addressed shall be deemed to be given or made as follows:
|
(a)
|
if by letter, when delivered at the address of the relevant Party;
|
(b)
|
If by e-mail, when received; and
|
(c)
|
if by telefax, when received.
|
18.6.4
|
The Issuer and the Bond Trustee shall ensure that the other party is kept informed of changes in postal address, e-mail address, telephone and fax numbers and contact persons
|
18.6.5
|
When determining deadlines set out in this Bond Agreement, the following shall apply (unless otherwise stated):
|
(a)
|
If the deadline is set out in days, the first day when the deadline is in force shall not be inclusive, however, the meeting day or the occurrence the deadline relates to, shall be included.
|
(b)
|
If the deadline is set out in weeks, months or years, the deadline shall end on the day in the last week or the last month which, according to its name or number, corresponds to the first day the deadline is in force. If such day is not a part of an actual month, the deadline shall be the last day of such month.
|
(c)
|
If a deadline ends on a day which is not a Business Day, the deadline is postponed to the next Business Date.
|
18.7
|
Dispute resolution and legal venue
|
18.7.1
|
This Bond Agreement and all disputes arising out of, or in connection with this Bond Agreement between the Bond Trustee, the Bondholders and the Issuer, shall be governed by Norwegian law.
|
18.8
|
Process Agent
|
Issuer
/s/ Graham Robjohns
……………………………………………..
By: Graham Robjohns
Position: Attorney-in-fact
|
Bond Trustee
/s/ Jorgen Andersen
……………………………………………..
By: Jorgen Andersen
Position:
|
1.
|
all information contained herein is true and accurate and there has been no change which would have a Material Adverse Effect since the date of the last accounts or the last Compliance Certificate submitted to you
.the covenants set out in Clause 13 are satisfied;
|
2.
|
in accordance with Clause 13.5 (a), the Free Liquidity is XX
|
3.
|
in accordance with Clause 13.5 (b), the EBITDA to Debt Service ratio is XX
|
4.
|
in accordance with Clause 13.5 (c), the Net Debt to EBITDA ratio is XX
|
Subsidiary
|
|
Ownership Interest
|
|
Jurisdiction of Formation
|
Golar Partners Operating LLC
|
|
100%
|
|
Marshall Islands
|
Golar LNG Holding Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Maritime (Asia) Inc.
|
|
100%
|
|
Republic of Liberia
|
Oxbow Holdings Inc.
|
|
100%
|
|
British Virgin Islands
|
Faraway Maritime Shipping Company
|
|
60%
|
|
Republic of Liberia
|
Golar LNG 2215 Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Spirit Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Freeze Holding Corporation
|
|
100%
|
|
Marshall Islands
|
Golar 2215 UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar Spirit UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar Winter UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar Freeze UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar Servicos de Operacao de Embaracaoes Limited
|
|
100%
|
|
Brazil
|
Golar Khannur Corporation
|
|
100%
|
|
Marshall Islands
|
Golar LNG (Singapore) Pte. Ltd.
|
|
100%
|
|
Singapore
|
PT Golar Indonesia*
|
|
49%
|
|
Indonesia
|
Golar 2226 UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar LNG 2234 Corporation
|
|
100%
|
|
Republic of Liberia
|
Golar Winter Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Grand Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Eskimo Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Hull M2031 Corporation
|
|
100%
|
|
Marshall Islands
|
*
|
Golar LNG Partners LP holds all of the voting stock and controls all of the economic interests in PT Golar Indonesia (“PTGI”) pursuant to a Shareholder's Agreement with the other shareholder of PTGI, PT Pesona Sentra Utama (“PT Pesona”). PT Pesona holds the remaining 51% interest in the issued share capital of PTGI.
|
1.
|
I have reviewed this annual report on Form 20-F of Golar LNG Partners LP (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Golar LNG Partners LP
(the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
GOLAR LNG PARTNERS LP
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By:
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/s/Graham Robjohns
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Graham Robjohns
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Principal Executive Officer
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GOLAR LNG PARTNERS LP
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By:
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/s/Brian Tienzo
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Brian Tienzo
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Principal Financial and Accounting Officer
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