Dynagas LNG Partners LP, an owner and operator of liquefied natural gas (“LNG”) carriers, announced its results (unaudited) for the three and six months ended June 30, 2016.

Three and Six Months Ended June 30, 2016 Highlights:

Distributable Cash Flow(1) during the three and six months ended June 30, 2016 of $22.6 million and $45.3 million, respectively, up by 30% and 28%, respectively, compared to the same periods of 2015;

Adjusted EBITDA(1) for the three and six months ended June 30, 2016 of $35.0 million and $70.2 million, respectively;

Adjusted Net Income(1) for the three and six months ended June 30, 2016 of $18.8 million and $37.7 million, respectively;

Adjusted Earnings per common unit(1)(2) for the three and six months ended June 30, 2016 of $0.48 and $0.96, respectively;

$82.2 million of reported cash and $112.2 million of available liquidity as of June 30, 2016;

Quarterly cash distribution of $0.4225 per common unit and $0.5625 per preferred unit.

Recent Developments:

Quarterly Common and Subordinated Unit Cash Distribution: On July 6, 2016, the Partnership’s Board of Directors announced a quarterly cash distribution of $0.4225 per common and subordinated unit in respect of the second quarter of 2016. This cash distribution was paid on July 19, 2016, to all unitholders of record as of July 12, 2016.

Series A Preferred Units Cash Distribution: On July 25, 2016, the Partnership’s Board of Directors also announced a cash distribution of $0.5625 per unit of its Series A Preferred Units (NYSE:DLNG PR A) for the period from May 12, 2016 to August 11, 2016, payable on or about August 12, 2016 to all unitholders of record as of August 5, 2016.

Chief Executive Officer Commentary:

Tony Lauritzen, Chief Executive Officer of the Partnership, commented:

“We are pleased to report our earnings for the second quarter of 2016.

“The three month period ended June 30, 2016 has been another strong financial quarter for us. Compared to the corresponding quarter ended June 30, 2015, Adjusted EBITDA increased approximately by 27% this past quarter, mainly due to the acquisition of the Lena River in late December 2015. During this past quarter, our current fleet of six LNG Carriers performed at 100% utilization, which also contributed positively to our results. Our Adjusted Earnings per common unit amounted to $0.48 per common unit for this period.

“Our income is derived from the employment of our vessels on fixed charter contracts. The revenues we earn under those charter contracts are not linked to commodity price fluctuations. On July 19, 2016, we paid a quarterly cash distribution of $0.4225 per common and subordinated unit with respect to the second quarter of 2016. Since our Initial Public Offering in November 2013, we have paid total cash distributions amounting to $4.25 per common and subordinated unit. On August 12, 2016, we expect to pay a cash distribution of $0.5625 per unit on our Series A Cumulative Redeemable Perpetual Preferred Units (the “Series A Preferred Units”) for the period from May 12, 2016 to August 11, 2016 to all holders of the Series A Preferred Units as of August 5, 2016.

“With our fleet fully contracted through 2016 and 88% contracted through 2017, and a fleet wide average remaining contract duration of 10.1 years, we intend to continue to focus on obtaining further contract coverage and managing operating expenses. I look forward to working with our team towards meeting our goals, which we believe will continue to benefit our unitholders.”

Three Months Ended June 30, 2016 and 2015 Financial Results

Adjusted Net Income for the three months ended June 30, 2016 was $18.8 million, compared to Adjusted Net Income of $14.6 million in the corresponding period of 2015, which represents a 28.4% increase, mainly attributable to the contribution of net revenues relating to the Lena River to operating results. The Lena River was acquired from Dynagas Holding Ltd., the Partnership’s Sponsor, late in December 2015.

Adjusted EBITDA for the three months ended June 30, 2016 increased by 27.0% across the quarters (second quarter 2016 Adjusted EBITDA of $35.0 million, compared to second quarter 2016 Adjusted EBITDA of $27.6 million), which is due to the factor discussed above.

The Partnership’s Distributable Cash Flow for the three-month period ended June 30, 2016 was $22.6 million, compared to $17.4 million in the corresponding period of 2015, which represents an increase of $5.2 million, or 29.6%.

For the three-month period ended June 30, 2016, the Partnership reported Adjusted Earnings per common basic and diluted unit of $0.48, after taking into account the Series A Preferred Units interest on the Partnership’s net profit. Adjusted Earnings per common is calculated on the basis of a weighted number of 20,505,000 basic and diluted common units outstanding during the period, after reflecting the impact of the non-cash items presented in Appendix B.

Please refer to the definitions and reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP in Appendix B.

Voyage revenues increased to $42.6 million for the three-month period ended June 30, 2016, from $35.6 million for the same period of 2015, due to the increase in Revenue earning days from 455 days during the second quarter of 2015 to 546 days during the second quarter of 2016, which is a result of the growth of the Partnership’s fleet, discussed above.

Vessel operating expenses increased by $0.7 million to $6.7 million in the three-month period ended June 30, 2016, from $6.0 million for the same period of 2015. This increase is exclusively attributable to the ownership of the Lena River.

The Partnership reported average daily hire gross of commissions on a cash basis(1) of approximately $81,300 per day per vessel in the three months ended June 30, 2016, compared to approximately $78,800 per day per vessel in the same period of 2015. During the three-month period ended June 30, 2016, the Partnership’s vessels operated at 100% utilization.

(1) Average daily hire gross of commissions on a cash basis represents voyage revenue on a cash basis, without taking into consideration the non-cash time charter amortization expense, divided by the Available Days in the Partnership’s fleet as described in Appendix B.

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

Liquidity/ Financing/ Cash Flow Coverage

As of June 30, 2016, the Partnership reported cash of $82.2 million (including the aggregate $25.0 million minimum cash liquidity requirements imposed by the Partnership’s lenders). Total indebtedness outstanding as of June 30, 2016 stood at $738.8 million, $32.5 million of which is repayable within one year.

The Partnership’s liquidity profile is further enhanced by the $30.0 million of borrowing capacity under the Partnership’s revolving credit facility with its Sponsor, which is available to the Partnership at any time until November 2018 and remains available in its entirety as of the date of this report.

As of June 30, 2016, the Partnership reported working capital surplus of $4.2 million.

During the three months ended June 30, 2016, the Partnership generated net cash from operating activities of $29.7 million, compared to $14.3 million in the same period of 2015. This increase was mainly attributable to the increase in pre-collected income between the two periods and the excess operating cash flows that the Lena River contributed to the Partnership for the quarter ended June 30, 2016.

Vessel Employment

As of July 27, 2016, the Partnership had contracted employment for 100% of its total fleet Calendar Days through the end of 2016, 88% of its fleet Calendar Days for 2017 and 64% of its fleet Calendar Days for 2018. Time charter coverage with regards to total fleet Calendar Days is calculated on the basis of the earliest estimated redelivery dates provided in the Partnership’s current time charter contracts.

As previously announced, the Partnership recently concluded long-term fixtures for three vessels in the Partnership’s fleet in the first quarter of 2016, which raises the Partnership’s estimate for its contracted revenue backlog(2) to approximately $1.6 billion, with average remaining contract duration of 10.1 years.

(2) The Partnership calculates its 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 the Partnership’s average contract backlog per day. Certain time charter contracts that the Partnership recently entered into with Yamal Trade Pte. are subject to the satisfaction of important conditions, which, if not satisfied, or waived by the charterer, may result in their cancellation or amendment before or after the charter term commences and in such case the Partnership may not receive the contracted revenues thereunder.