Dynagas LNG Partners LP · NYSE:DLNG

Dynagas LNG Partners LP — Investor Presentation (September 2018)

30 slides from Dynagas LNG Partners LP's investor presentation, September 2018

  1. Slide 1: Investor Presentation September 2018

    q Investor Presentation September 2018

  2. Slide 2: Forward Looking Statements and Disclaimer

    Forward Looking Statements and Disclaimer This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of applicable federal securities laws. All statements included in this presentation which are not historical or current facts (including ou

  3. Slide 3: Forward Looking Statements and Disclaimer (cont')

    Forward Looking Statements and Disclaimer (cont’) Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin. While the company reports its results in accordance with generally accepted accounting principles in the

  4. Slide 4: Partnership Overview

    Partnership Overview

  5. Slide 5: Key Business Highlights

    Key Business Highlights 1 ■ Master Limited Partnership (MLP) listed on the NYSE (“DLNG”) since 2013 Pure-play LNG shipping ■ Modern (average age: 8.1 years)(1) and flexible fleet of 6 LNG carriers Partnership owning ■ Owns 5 out of a total of 11 LNG carriers in the global fleet with ice class 1A FS

  6. Slide 6: Fleet Profile

    1 Fleet Profile Fleet  6 LNG carriers Total cbm capacity  914,100 cbm (149,700 cbm for steam turbine LNG fleet, 155,000 cbm for the tri- fuel diesel engine LNG fleet (“TFDE’s”)) Fleet average age  ~8.1 years(1) Average remaining charter duration  ~10.1 years(1)(2) Counterparties  Gazprom, Equin

  7. Slide 7: Market Share: Leader in Ice Class Trades

    1 Market Share: Leader in Ice Class Trades  Dynagas Group (DLNG and Sponsor) has a >80% market share of vessels with ice class 1A FS or equivalent notations (controls 9 of 11 such vessels available) − Limited vessel supply creates sublet opportunities for clients (Gazprom  Sakhalin) − First and on

  8. Slide 8: Long Term Contracts Provide Stable, Visible Cash Flows

    2 Long Term Contracts Provide Stable, Visible Cash Flows LNG Carrier Year Capacity Name Built (cbm) Charterer ‘18 2019 2020 2021 2022 2023 2024 2025 Clean Energy 2007 149,700 2026 Ob (1) 2007 149,700 2028 River Amur 2008 149,700 (1) 2028 River Arctic 2013 155,000 2023 Aurora Yenisei 2013 155,000 203

  9. Slide 9: Successful Transition to Long-Term Contracts

    2 Successful Transition to Long-Term Contracts Reduction in charter ($) income of Yenisei ($) Billion River and Lena River Million due to agreement with Gazprom to charter Clean Energy Lena River Drop Clean Energy on a contract with 1.8 Down: Yenisei long term 8 year Shell at peak Arctic 40.0  Part

  10. Slide 10: Value Creation: Sponsor Supported Growth Strategy

    3 Sponsor Supported Growth Strategy, With No Capex Obligations Drop-downs Post-Delivery, with Long-Term Contracts Warehousing Partnership Sponsor Funds Newbuildings Value Creation Grows Fleet & Revenue Backlog Reinvests Capital Sponsor  Dynagas LNG Partners does not enter into shipbuilding contract

  11. Slide 11: Fully Contracted Dropdown Opportunities

    3 Fully Contracted Dropdown Opportunities  All LNG carriers chartered on long-term contracts, providing multi-billion dollar contract backlog  Sponsor is a critical partner to Novatek, Total and CNPC  Sponsor and DLNG together account for 11 out of 27 ships contracted to Yamal LNG Firm Carrier Ye

  12. Slide 12: Leading Manager with Unrivalled Performance Record

    4 Leading Manager with Unrivalled Performance Record High Historical Fleet Utilization  Dynagas Ltd. offers comprehensive management services for DLNG and Sponsor operations  Last 3 year average fleet utilization rate of 99.0% due to insignificant off-hire days  Significant history (13+ years) wi

  13. Slide 13: Low Supply of Uncommitted Newbuilds

    5 Low Supply of Uncommitted Newbuilds 1. Existing Fleet LNG Fleet by Propulsion Type (Existing plus Orderbook) • Number of vessels: 509 # of Vessels # of % Average Existing Fleet Vessels of Fleet Age >185 -266,000 m3 46 10,585,300 13% 9 167- 185,000 m3 105 18,207,120 23% 2 >150- 167,500 m3 127 20,01

  14. Slide 14: LNG Trade to Increase by over 40% by 2022

    5 LNG Trade to Increase by over 40% by 2022 Global LNG Supply / Exports by Region, 2012-2022 Global LNG trade reached 292 mt in 2017, up 11% In million tons of Asia-Pacific Atlantic East Africa Middle East Total from 2016 LNG +41%  Over the next 5 years, LNG supply projected to rise 5-Year by 118 m

  15. Slide 15: LNG Trade up 8% 1H '18 versus 1H '17

    5 LNG Trade up 8% 1H ‘18 versus 1H ‘17 Total LNG exports reached 152.7 mt in the first half of 2018, up Incremental LNG Exports by Region, 1H ‘18 vs 1H ‘17 (mill tons) 8% from the first half of 2017  LNG export projects in Australia, Russia and the U.S. produced a total of +2.7 48.9 mt in the first

  16. Slide 16: Asia keeps driving LNG Demand Growth

    5 Asia keeps driving LNG Demand Growth Behind Japan, China is second largest importer of LNG with Incremental LNG Imports by Region, 1H ‘18 vs 1H ‘17 (mill tons) 22.4 mt for the first half of 2018 up 6.7 mt from 1H 2017 followed closely by South Korea with 21.9 mt (up 3.0 mt)  Demand growth mainly

  17. Slide 17: Liquidity in LNG Charter Market Continues to Grow

    5 Liquidity in LNG Charter Market Continues to Grow Annual Fixtures by Charter Length Fixture activity in LNG charter market continues to increase  Spot chartering activity (<180 days) continues to comprise a growing proportion of the charter market, accounting for ~89% of fixtures over 2016 and ~9

  18. Slide 18: Financial Overview

    Financial Overview

  19. Slide 19: Simplified Capital Structure and Debt Profile

    Simplified Capital Structure and Debt Profile $ 319m  Net Debt to Total Capitalization 63% Equity Market Cap(1) $ 78m Preferred(1)  Net Debt to LTM EBITDA 6.4x $250m Unsecured ~ $1 billion Notes market value  $88 million of available liquidity of vessels  Non amortizing 6.25% USD 250 million sen

  20. Slide 20: Significant Asset Coverage

    Significant Asset Coverage  A best in class LNG fleet with a contracted revenue backlog of ~$1.4 billion that provides significant asset coverage over total debt (average appraised market value > $1.0 billion) ($ in millions) Senior Secured TLB Senior Unsecured Notes $1,440 Excess asset ~$1,043 cov

  21. Slide 21: Recent Reduction In Dividend Payout Strengthens DLNG

    Recent Reduction In Dividend Payout Strengthens DLNG Aligns Partnership’s distribution level with cash flow generating capacity Annual cash savings of $24.5 million supports the Partnership’s balance sheet Emphasis on distribution sustainability and stability Improves distribution and cash coverage

  22. Slide 22: Dynagas LNG Partners LP: Financial Overview

    Dynagas LNG Partners LP: Financial Overview Revenue Adjusted EBITDA(1) ($ in millions) ($ in millions) $169.9 $145.2 $139.0 $139.5 $132.7 $107.1 $113.2 $107.5 $104.4 $85.7 $84.8 $64.7 2013 2014 2015 2016 2017 LTM 2013 2014 2015 2016 2017 LTM 6/30/18 6/30/18 Avg. # of Avg. # of 3.0 3.8 5.0 6.0 6.0 6.

  23. Slide 23: Appendix

    Appendix 22

  24. Slide 24: DLNG Structure

    DLNG Structure Dynagas Holding Ltd. Preferred Unitholders Dynagas GP LLC 100% Public Unitholders (“Sponsor”) ($78 million(1)) 0.1% GP 43.9% 56.0% 100% IDR Senior Unsecured Notes 100% membership interest (NYSE: “DLNG”, TLB Guarantor) $250 million Equity market capital of $319m(1) Dynagas Operating GP

  25. Slide 25: DLNG Fleet Overview

    DLNG Fleet Overview Amur River Clean Energy Ob River Year Built 2008 2007 2007 Design Steam / Ice-class 1A-FS Steam Steam / Ice-class 1A-FS Build yard HHI HHI HHI Capacity 149,700 cbm 149,700 cbm 149,700 cbm Charterer Gazprom Gazprom Gazprom Charter Commencement Jun-15 Jul-18 Apr-18 Earliest / Lates

  26. Slide 26: Q2'18 Financial Highlights

    Q2’ 18 Financial Highlights USD in thousands (except per unit, average daily hire and other operational data) Q2 2018 Q1 2018 Q2 2017 Revenues 30,892 33,904 31,975 Adjusted EBITDA (1) 24,443 26,590 22,921 Annualized cash distributions per unit 1.00 1.00 1.69 Average daily hire rate (2) $61,500 $66,3

  27. Slide 27: Historical Financials – Income Statement

    Dynagas LNG Partners LP: Historical Financials – Income Statement Year ended December 31, (in millions of US dollars) 2013 2014 2015 2016 2017 Revenues Voyage revenues $85.7 $107.1 $145.2 $169.9 $139.0 % growth 10.6% 25.0% 35.6% 17.0% (18.2%) Expenses Voyage expenses ($0.7) ($0.9) ($1.0) ($0.7) ($1.

  28. Slide 28: Historical Financials – Cash Flow Statement

    Dynagas LNG Partners LP: Historical Financials – Cash Flow Statement Year Ended December 31, (in millions of US dollars) 2013 2014 2015 2016 2017 Cash flows from Operating Activities: Net income $45.6 $50.6 $60.1 $66.9 $17.3 Depreciation 13.6 17.8 24.4 30.4 30.3 Amortization and write-off of deferre

  29. Slide 29: Historical Financials – Balance Sheet

    Dynagas LNG Partners LP: Historical Financials – Balance Sheet Year ended December 31, Quarter ended (in millions of US dollars) 2015 2016 2017 6/30/2018 Assets Current assets Cash and cash equivalents $24.3 $57.6 $67.5 $57.8 Trade receivables, net of allowance for doubtful debt 0.1 0.1 0.2 – Prepay

  30. Slide 30: Reconciliation of Adjusted EBITDA

    Reconciliation of Adjusted EBITDA LTM Three Months Ended Reconciliation to Net Income Ended Year ended December 31, 30 June 30 June (In thousands of U.S dollars) 2018 2018 2017 2017 2016 2015 2014 2013 Net income / (loss) $ 14,799 $ 351 $ (5,181) $ 17,339 $ 66,854 $ 60,050 $ 50,561 $ 45,620 Net inte

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