Dynagas LNG Partners LP (NASDAQ: DLNG) ("Dynagas Partners" or the "Partnership"), an owner and operator of LNG carriers, yesterday announced results (unaudited) for the three and six months ended June 30, 2014.
Three and Six months ended June 30, 2014 Highlights:

•    Net income for the three and six months ended June 30, 2014 was $10.2 million and $21.2 million, respectively. Included in the three and six month periods ended June 30, 2014 was a $0.9 million non-recurring non-cash time charter amortization expense. Excluding the above item the Partnership would have reported net income for the three and six months ended June 30, 2014 of $11.1 million and $22.1 million, respectively;
•    Distributable Cash Flow* during the three and six month periods ended June 30, 2014 was $12.6 million and $24.9 million, respectively; up by 11.8% and 11.9% respectively, period over period;
•    Adjusted EBITDA* for the three and six month periods ended June 30, 2014 was $16.7 million and $33.0 million respectively;

* Adjusted EBITDA and Distributable Cash Flow are not recognized measurements under U.S. GAAP. Please refer to the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP in Appendix B.

Recent Developments:

Quarterly Cash Distribution: On July 22, 2014, the Partnership announced that its Board of Directors declared a quarterly cash distribution for the second quarter of 2014 of $0.365 per unit. The cash distribution is scheduled to be paid on or about August 12, 2014, to all unitholders of record as of August 5, 2014. As of August 6, 2014, the Partnership had 35,525,526 common, subordinated and general partner units issued and outstanding.

On July 31, 2014 the Partnership's Board of Directors approved the management's recommendation for an increase in our quarterly cash distribution of $0.025 per unit (an annualized increase of $0.10 per unit to $1.56 per unit), effective for our distribution with respect to the quarter ending September 30, 2014. This represents an increase in our cash distributions on an annualized basis of 6.8% since our IPO in November 2013.

Completion of the acquisition of the LNG carrier Arctic Aurora: On June 23, 2014, the Partnership completed its previously announced acquisition of 100% of the ownership interests in the entity that owns and operates the Arctic Aurora, a 2013 built 155,000 cbm ice class LNG carrier, for an aggregate purchase price of $235 million. The acquisition was funded with the net proceeds of a common units public offering discussed below and a portion of the borrowings under a new $340 million senior secured revolving credit facility dated June 19, 2014, the remaining borrowings of which were used to refinance our $214.1 million senior secured credit facility. As of August 6, 2014, following the acquisition of the Arctic Aurora, the Partnership's fleet consisted of four LNG carriers with an average age of 5.5 years and an aggregate carrying capacity of 604,100 cubic meters.

Follow on common units public offering (the "follow on offering"): On June 18, 2014, the Partnership closed an underwritten public offering of 5,520,000 common units at $22.79 per unit, including the full exercise by the underwriters of their option to purchase up to 720,000 additional common units. In connection with the follow on offering, the Partnership raised $120.6 million, after deducting the underwriting discount of approximately $4.7 million and offering expenses up to June 30, 2014 of approximately $0.5 million. The net proceeds from the follow on offering financed the acquisition of the Arctic Aurora discussed above.

Financial Results Overview:

For the results and the selected financial data presented herein, the Partnership has compiled consolidated statements of income for the six month periods ended June 30, 2014 and 2013, which were derived from the unaudited condensed consolidated financial statements for the periods presented.

Three months ended June 30, 2014 and 2013 Financial Results

The Partnership reported net income attributable to unitholders of $10.2 million for the three months ended June 30, 2014, as compared to $11.5 million in the corresponding period of 2013, representing a decrease of $1.3 million or 11.3%. Operating income for the three month period ended June 30, 2014 was $12.3 million, compared to $13.8 million in the corresponding period of 2013, representing a decrease of $1.5 million or 10.9%.

Adjusted EBITDA for the three months ended June 30, 2014 was $16.7 million compared to $17.2 million for the corresponding period of 2013, representing a decrease of $0.5 million or 2.8%.

The Partnership's Distributable Cash Flow for the three-month period ended June 30, 2014 was $12.6 million. Distributable Cash Flow is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership's ability to make quarterly cash distributions. Please refer to the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP in Appendix B.

Voyage revenues decreased to $20.9 million for the three-month period ended June 30, 2014, as compared to $21.3 million for the same period in 2013 mainly due to an approximate $0.6 million increase in voyage revenues attributable to the addition in the Partnership's fleet of the LNG carrier Arctic Aurora on June 23, 2014 which was offset by non-recurring non-cash expenses of $0.9 million, related to time charter accelerated amortization.

Vessel operating expenses increased by 14.3% to $3.5 million in the three-month period ended June 30, 2014 compared to $3.0 million for the same period in 2013, mainly due to increased crew costs for the three months ended June 30,2014 and the partial operation of the newly acquired Arctic Aurora in the second quarter of 2014.

Daily operating expenses equaled $12,317 per LNG carrier during the three months ended June 30, 2014 from $11,095 per LNG carrier in the corresponding period of 2013. No special survey and dry-dock repairs were incurred on any of our LNG carriers in the periods under discussion.

The Partnership's operating results were also impacted by increased general and administrative costs of approximately $0.4 million, mainly due to additional fees and expenses as a result of being a public company since November 2013.

The overall financial performance of the Partnership in the periods discussed reflected the decrease in the levels of weighted outstanding indebtedness in the three months ended June 30, 2014 as compared to the corresponding period of 2013 that caused an approximate $0.2 million decrease in the Partnership's interest and finance costs.

The Partnership reported average daily hire gross of commissions earned by its LNG carriers of approximately $77,200 per day per vessel in the three months ended June 30, 2014, compared to approximately $77,700 in the same period of 2013. During both three month periods ended June 30, 2014 and 2013, all of the Partnership's vessels operated at 100% utilization.

Amounts relating to variations in period-on-period comparisons shown in this section are derived from the condensed financials presented below.

Six Months ended June 30, 2014 and 2013 Financial Results

The Partnership reported net income attributable to unitholders of $21.2 million for the six months ended June 30, 2014, as compared to $22.7 million in the corresponding period of 2013, representing a decrease of $1.5 million or 6.5%. Operating income for the six months ended June 30, 2014 was $25.1 million, compared to $27.3 million in the corresponding period of 2013, representing a decrease of $2.2 million or 8.0%.

Adjusted EBITDA for the six month period ended June 30, 2014 was $33.0 million compared to $34.1 million for the comparative period of 2013, representing a decrease of $1.0 million or 3.1%.

The Partnership's Distributable Cash Flow for the six months ended June 30, 2014 was $24.9 million. Distributable Cash Flow is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership's ability to make quarterly cash distributions. Please refer to the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP in Appendix B.

During the six month period ended June 30, 2014, the Partnership incurred, as discussed above, non-recurring non-cash charges amounting to $0.9 million related to accelerated time charter amortization, which was partly counterbalanced by the $0.6 million voyage revenues generated by the Arctic Aurora that was added to the Partnership's fleet on June 23, 2014. In addition, during the six months ended June 30, 2014, the Partnership incurred $1.0 million of general and administrative costs versus approximately nil in the corresponding period of 2013. The Arctic Aurora addition in the Partnership's fleet further had an approximate $0.3 million impact on our operating performance, related to recurring operational costs (i.e operating expenses, depreciation and management fees).

Voyage revenues decreased to $41.9 million for the six-month period ended June 30, 2014, as compared to $42.4 million for the same period in 2013.

Vessel operating expenses increased by 5.7% to $6.6 million in the six-month period ended June 30, 2014 compared to $6.2 million for the same period in 2013, mainly due to increased crew costs and the partial operation of the newly acquired Arctic Aurora in the second quarter of 2014, discussed above.

Daily operating expenses equaled $11,951 per LNG carrier during the six months ended June 30, 2014 from $11,477 per LNG carrier in the corresponding period of 2013. No special survey and dry-dock repairs were incurred on any of our LNG carriers in the periods under discussion.

During the six months ended June 30, 2014, the Partnership's results were similarly positively affected by lower levels of weighted outstanding indebtedness that reduced the Partnership's interest and finance costs by approximately $0.6 million.

The Partnership reported average daily hire gross of commissions earned by its LNG carriers of approximately $77,500 per day per vessel in the six months ended June 30 2014, versus approximately $77,700 in the same period of 2013. During both six month periods ended June 30, 2014 and 2013, all of the Partnership's vessels operated at 100% utilization.

Amounts relating to variations in period-on-period comparisons shown in this section are derived from the condensed financials presented below.

Liquidity Position

As of June 30, 2014, the Partnership reported cash of $43.6 million (including minimum cash liquidity requirements imposed by our lenders). Total indebtedness as of June 30, 2014 was $335.0 million. The weighted average margin over LIBOR accruing on the Partnership's outstanding bank debt during the six months ended June 30, 2014 was approximately 3.1%.

During the six months ended June 30, 2014, the Partnership generated net cash from operating activities of $33.2 million, compared to $17.7 million in the same period in 2013, which is mainly the effect of operating assets and liabilities and deferred revenue variations between compared periods.

As of June 30, 2014, the Partnership had total available liquidity of $73.6 million (comprised of $43.6 million in cash, including minimum cash liquidity requirements imposed by our lenders, and $30.0 million of borrowing capacity under its Sponsor facility).

Time charter coverage

As of August 6, 2014, the Partnership had contracted employment for 100% of its total fleet calendar days through 2016 and 75% of its fleet calendar days for 2017. Time charter coverage in regards to total fleet calendar days is calculated on the basis of the earliest estimated redelivery dates.

The contracted revenue backlog for the Partnership as of August 6, 2014 was approximately $625.3 million with average remaining contract duration of 6.0 years1.

1 We calculate our contracted revenue backlog by multiplying the contractual daily hire rate by the minimum expected number of days committed under the contracts (excluding options to extend), assuming full utilization. The actual amount of revenues earned and the actual periods during which revenues are earned may differ from the amounts and periods shown in the table below due to, for example, shipyard and maintenance projects, downtime and other factors that result in lower revenues than our average contract backlog per day.
Source: Dynagas LNG Partners LP