---

---

---

---

---

---

Vessel Name	Year Built	Cargo Capacity (cbm)	Ice Class	Propulsion	Charterer	Earliest Charter Expiration	Latest Charter Expiration	Latest Charter Expiration including options to extend
Clean Energy	2007	149,700	No	Steam	Gazprom	March 2026	April 2026	n/a
Ob River	2007	149,700	Yes	Steam	Gazprom	March 2028	May 2028	n/a
Amur River	2008	149,700	Yes	Steam	Gazprom	June 2028	August 2028	n/a
Arctic Aurora	2013	155,000	Yes	TFDE*	Equinor	July 2021	September 2021	September 2023
Yenisei River	2013	155,000	Yes	TFDE*	Yamal	Q4 2033	Q2 2034	Q2 2049
Lena River	2013	155,000	Yes	TFDE*	Yamal	Q2 2034	Q3 2034	Q4 2049

Estimated contract backlog, at end of year		2020				2021				2022
Contracted time charter revenues (in millions of U.S. Dollars) (1)(2)		$	43.0			$	126.9			$	112.5
Contracted days			684				2,008				1,765
Available Days			684				2,190				2,130
Contracted/Available Days			100	%			92	%			83	%

(1)	Annual revenue calculations are based on: (a) the earliest redelivery dates possible under our charters, (b) no exercise of any option to extend the terms of those charters except for those that have already been exercised, if any, and (c) excluding planned periodical class survey repair days.

(2)

Estimated contracted revenues for each of the years 2020, 2021, 2022 include the amount of $3.8 million, $12.1 million and $12.1 million respectively, which relate to the estimated portion of the variable hire contained in the above mentioned time charter contracts with Yamal, which represent the operating expenses of the respective vessels and are subject to annual adjustments on the basis of the actual operating costs incurred within each year. The actual amount of revenues earned in respect of such variable hire rate may therefore differ from the amounts included in the revenue backlog estimate due to the annual variations in the respective vessels’ operating costs.

Selected Historical Financial Data and Other Operating Information		Six Months Ended June 30,
		2020				2019
STATEMENT OF INCOME (In thousands of U.S. Dollars, except for units and per unit data)
Voyage revenues		$	68,384			$	62,220
Voyage expenses- including related party (1)			(1,610	)			(1,131	)
Vessel operating expenses			(14,470	)			(13,817	)
General and administrative expenses- including related party (2)			(1,265	)			(1,086	)
Management fees-related party			(3,358	)			(3,242	)
Depreciation			(15,812	)			(15,042	)
Operating income		$	31,869			$	27,902
Interest and finance costs, net			(15,100	)			(25,047	)
Loss on derivative instruments			(3,352	)			—
Other, net			(23	)			(31	)
Net Income		$	13,394			$	2,824
Common unitholders’ interest in Net Income		$	7,605			$	(2,954	)
Series A Preferred unitholders’ interest in Net Income		$	3,375			$	3,375
Series B Preferred unitholders’ interest in Net Income		$	2,406			$	2,406
General Partner’s interest in Net Income		$	8			$	(3	)
EARNINGS/(LOSS) PER UNIT (basic and diluted):
Common Unit		$	0.21			$	(0.08	)
Weighted average number of units outstanding (basic and diluted):
Common units			35,490,000				35,490,000

		June 30, 2020				December 31, 2019
BALANCE SHEET DATA, at end of period/ year:
Total current assets		$	17,904			$	18,172
Vessels, net			900,885				916,697
Total assets		$	973,089			$	989,187
Total current liabilities			61,298				64,635
Total long-term debt, gross of deferred financing fees, including current portion			639,000				663,000
Total partners’ equity		$	321,320			$	313,707

Selected Historical Financial Data and Other Financial Information		Six Months Ended June 30,
		2020				2019
CASH FLOW DATA
Net cash provided by operating activities		$	26,836			$	16,144
Net cash used in investing activities			—				—
Net cash used in financing activities		$	(29,781	)		$	(13,149	)
FLEET PERFORMANCE DATA:
Number of vessels at the end of period			6				6
Average number of vessels in operation in period (3)			6				6
Average age of vessels in operation at end of period/ (years)			9.9				8.9
Available Days (4)			1,092.0				1,086.0
Fleet utilization (5)			99.5	%			97.2	%
OTHER FINANCIAL DATA
Cash distributions per common unit for the period (6)		$	—			$	0.0625
Cash distributions per Series A Preferred Unit (7)		$	1.13			$	1.13
Cash distributions per Series B Preferred Unit (8)		$	1.09			$	1.09
Time Charter Equivalent (in U.S. Dollars) (9)		$	61,148			$	56,251
Adjusted EBITDA (9)		$	47,870			$	42,591

(1)	Voyage expenses include commissions of 1.25% of gross charter hire paid to our Manager and third party ship brokers.

(2)	Includes the Administrative Services Agreement fees and Executive Service Agreement fees charged by our Manager and excludes the daily management fees and commercial management fees.

(3)	Represents the number of vessels that constituted our Fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our Fleet during the period divided by the number of calendar days in the period.

(4)	Available Days are the total number of calendar days our vessels were in our possession during a period less the total number of scheduled off-hire days during the period associated with major repairs or dry-dockings.

(5)

We calculate fleet utilization by dividing the number of our revenue earning days, which are the total number of Available Days of our vessels net of unscheduled off-hire days during a period, by the number of our Available Days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled off-hires for vessel upgrades, dry-dockings or special or intermediate surveys.

(6)	Corresponds to a cash distribution of $0.0625 per common unit in respect of the first quarter of 2019 which were paid in the second quarter of 2019.

(7)	Corresponds to a cash distribution of $0.5625 per Series A Preferred Unit in respect of the first and second quarter of 2020 and 2019, respectively, which were paid in the second and third quarter of 2020 and 2019, respectively.

(8)	Corresponds to a cash distribution of $0.546875 in respect of the first and second quarter of 2020 and 2019, respectively, which were paid in the second and third quarter of 2020 and 2019, respectively.

		Six Months Ended June 30,
(In thousands of U.S. Dollars, except as otherwise stated)		2020				2019
Voyage revenues		$	68,384			$	62,220
Voyage expenses			(1,610	)			(1,131	)
Time charter equivalent revenues			66,774				61,089
Available Days			1,092.0				1,086.0
Time charter equivalent (TCE) rate (in U.S Dollars)		$	61,148			$	56,251

Reconciliation of Net Income to Adjusted EBITDA		Six months ended June 30,
(In thousands of U.S.  Dollars)		2020				2019
Net Income		$	13,394			$	2,824
Net interest and finance costs (1)			15,100				25,047
Depreciation			15,812				15,042
Loss on derivative financial instrument			3,352				—
Amortization of deferred revenue			104				(394	)
Amortization of deferred charges			108				72
Adjusted EBITDA		$	47,870			$	42,591

(1)	Includes interest and finance costs (inclusive of amortization of deferred financing costs), net of interest income, if any.

•

Ownership days. The number of vessels in our Fleet is a key factor in determining the level of our revenues. Aggregate expenses also increase as the size of our Fleet increases;

•

Charter rates. Our revenue is dependent on the charter rates we are able to obtain on our vessels. Charter rates on our vessels are based primarily on demand for and supply of LNG carrier capacity at the time we enter into the charters for our vessels, which is influenced by LNG market trends, such as the demand and supply for natural gas and in particular LNG as well as the supply of LNG carriers available for profitable employment. The charter rates we obtain are also dependent on whether we employ our vessels under multi-year charters or charters with initial terms of less than two years. As of the date of this report,  all six vessels in our Fleet are employed under multi-year time charters with staggered maturities, which will make us less susceptible to cyclical fluctuations in charter rates than vessels operated on charters of less than two years. However we will be exposed to fluctuations in prevailing charter rates when we seek to re-charter our vessels upon the expiry of their respective current charters and when we seek to charter vessels that we may acquire in the future; The earliest contracted re-delivery date for one vessel of our fleet (the Arctic Aurora) is in the third quarter of 2021.

•

Utilization of our Fleet. Historically, our Fleet has had a limited number of unscheduled off-hire days. However, an increase in annual off-hire days would reduce our utilization. The efficiency with which suitable employment is secured, the ability to minimize off-hire days and the amount of time spent positioning vessels also affects our results of operations. If the utilization of our Fleet is reduced, our financial results would be affected;

•

Daily operating expenses. The level of our vessel operating expenses, including crewing costs, insurance and maintenance costs. Our ability to control our vessel operating expenses also affects our financial results. These expenses include commission expenses, crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricating oil costs, tonnage taxes and other miscellaneous expenses. In addition, factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages, are paid, can cause our vessel operating expenses to increase;

•

Our ability to exercise the options to purchase the Optional Vessels;

•

The timely delivery of any vessels we may acquire in the future;

•

Our ability to maintain solid working relationships with our existing charterers and our ability to increase the number of our charterers through the development of new working relationships;

•

The performance of our charterers’ obligations under their charter agreements;

•

The effective and efficient technical management of the vessels under our management agreements;

•

Our ability to obtain acceptable equity and debt financing to fund our capital commitments;

•

The ability of our Sponsor to fund its capital commitments and take delivery of the Optional Vessels currently under construction;

•

The supply and demand relationship for LNG shipping services;

•

Our ability to obtain and maintain regulatory approvals and to satisfy technical, health, safety and compliance standards that meet our charterer’s requirements;

•

Our ability to successfully defend against any claims, suits, and complaints, including but not limited to those involving government laws and regulations and product liability;

•

Economic, regulatory, political and governmental conditions that affect shipping and the LNG industry, which include changes in the number of new LNG importing countries and regions, as well as structural LNG market changes impacting LNG supply that may allow greater flexibility and competition of other energy sources with global LNG use;

•

Our ability to successfully employ our vessels at economically attractive rates, as our charters expire or are otherwise terminated;

•

Our access to capital required to acquire additional ships and/or to implement our business strategy;

•

Our level of debt, the related interest expense, our debt amortization levels and the timing of required principal installments;

•

The level of our general and administrative expenses, including salaries and costs of consultants;

•

Our charterer’s right for early termination of the charters under certain circumstances;

•

Performance of our counterparties, which are limited in number, including our charterers ability to make charter payments to us; and

•

The level of any distribution on all classes of our units.

		Six months ended June 30,
(in thousands of U.S. Dollars)		2020				2019
Net cash provided by operating activities		$	26,836			$	16,144
Net cash used in investing activities			—				—
Net cash used in financing activities			(29,781	)			(13,149	)
Cash and cash equivalents and restricted cash at beginning of period			66,206				109,917
Cash and cash equivalents and restricted cash at end of period		$	63,261			$	112,912

Obligations		Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
(in thousands of U.S. Dollars)
Long-Term Debt		$	639,000			$	48,000			$	96,000			$	495,000			$	-
Interest on long term debt (1)			73,619				19,936				35,233				18,450				-
Interest rate swap payments (2)			3,348				908				2,269				171				-
Management fees & commissions payable to the Manager (3)(4)			16,397				4,965				2,597				2,595				6,240
Executive Services fee (5)			2,043				604				1,209				230				-
Administrative Services fee (6)			40				40				-				-				-
Total		$	734,447			$	74,453			$	137,308			$	516,446			$	6,240

(1)

Our variable rate long-term debt outstanding as of June 30, 2020 bears variable interest at a margin over LIBOR. The calculation of interest payments has been made assuming interest rates based on the one-month period actual LIBOR for the period ending August 28, 2020 and our applicable margin rate.

(2)	The variable leg of the derivative instrument has been calculated on the basis of the three-month period forward LIBOR rates as of June 30, 2020.

(3)

Under the terms of the management agreements, we currently pay our Manager a management fee of $3,075 per day per vessel, which is subject to an annual increase of 3% and to further annual increases, if any, by an amount to be agreed between us and our Manager, to reflect material unforeseen costs of providing the management services, which amount is required to be reviewed and approved by our Conflicts Committee. The management agreements also provide for commissions of 1.25% of charter-hire revenues arranged by the Manager. The agreements will terminate automatically after a change of control of the applicable shipping subsidiary and/or of the owner’s ultimate parent, in which case an amount equal to fees of at the least 36 months and not more than 60 months, will become payable to the Manager.

(4)

Not including $2.1 million of the “Management fees & commissions payable to the Manager” related to the commissions on variable hire contained in certain time charter contracts with Yamal, which represents the operating expenses of the vessel and is subject to annual adjustments on the basis of the actual operating costs incurred within each year. The actual amount of “Management fees & commissions payable to the Manager” payable to the Manager in respect of such variable hire rate may therefore differ from the amounts included in the contractual obligations, due to the annual variations in each vessel’s respective operating cost.

(5)

On March 21, 2014, we entered into an executive services agreement with our Manager, or the Executive Services Agreement, with retroactive effect to the date of the closing of our IPO, pursuant to which our Manager provides us with the services of our executive officers, who report directly to our Board of Directors.  Under the Executive Services Agreement, our Manager is entitled to an executive services fee of €538,000 per annum, for the initial five year term, payable in equal monthly installments. The Executive Services Agreement had an initial term of five years and, on November 18, 2018, has been automatically renewed for successive five year terms, unless terminated earlier. The calculation of the contractual services fee set forth in the table above assumes an exchange rate of €1.0000 to $1.1235, the EURO/USD exchange rate as of June 30, 2020 and does not include any incentive compensation which our Board of Directors may agree to pay.

(6)

On December 30, 2014 and with effect from the IPO closing date, we entered into an administrative services agreement with our Manager (the “Administrative Services Agreement”), according to which we are provided with certain financial, accounting, reporting, secretarial and information technology services, for a monthly fee of $10,000, plus expenses, payable in quarterly installments. The agreement can be terminated upon 120 days’ notice granted either by the Partnership’s Board of Directors or by the Manager as per the provisions of the agreement.

	Page
Consolidated Condensed Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	F-3
Unaudited Interim Condensed Consolidated Statements of Income for the six month periods ended June 30, 2020 and 2019	F-4
Unaudited Interim Condensed Consolidated Statements of Partners’ Equity for the six month periods ended June 30, 2020 and 2019	F-5
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2020 and 2019	F-6
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	F-7

		Note				June 30, 2020				December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents						$	13,261			$	16,206
Trade receivables							720				143
Prepayments and other assets							1,586				1,105
Inventories							785				718
Due from related party			3				1,552				—
Total current assets							17,904				18,172
FIXED ASSETS, NET:
Vessels, net			4				900,885				916,697
Total fixed assets, net							900,885				916,697
OTHER NON CURRENT ASSETS:
Restricted cash							50,000				50,000
Due from related party			3				1,350				1,350
Accrued charter revenue							654				745
Deferred charges							2,296				2,223
Total assets						$	973,089			$	989,187
LIABILITIES AND PARTNERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net of unamortized deferred financing fees of $2,402 and $2,518, respectively			5			$	45,598			$	45,482
Trade payables							4,562				5,496
Due to related party			3				24				2,202
Accrued liabilities							1,333				1,641
Derivative financial instrument, current portion			11				907				—
Unearned revenue							8,874				9,814
Total current liabilities							61,298				64,635
NON-CURRENT LIABILITIES:
Deferred revenue							3,186				3,173
Derivative financial instrument, non-current portion			11				2,442				—
Long-term debt, net of current portion and unamortized deferred financing fees of $6,157 and $7,328, respectively			5				584,843				607,672
Total non-current liabilities							590,471				610,845
Commitments and contingencies			7				—				—
PARTNERS’ EQUITY:
Common unitholders (35,490,000 units issued and outstanding as at June 30, 2020 and December 31, 2019)			8				194,626				187,021
Series A Preferred unitholders (3,000,000 Series A Preferred Units issued and outstanding as at June 30, 2020 and December 31, 2019)			8				73,216				73,216
Series B Preferred unitholders: (2,200,000 Series B Preferred Units issued and outstanding as at June 30, 2020 and December 31, 2019)			8				53,498				53,498
General Partner (35,526 units issued and outstanding as at June 30, 2020 and December 31, 2019)			8				(20	)			(28	)
Total partners’ equity							321,320				313,707
Total liabilities and partners’ equity						$	973,089			$	989,187

						Six months ended June 30,
		Note				2020				2019
REVENUES:
Voyage revenues						$	68,384			$	62,220
EXPENSES:
Voyage expenses (including related party)			3				(1,610	)			(1,131	)
Vessel operating expenses							(14,470	)			(13,817	)
General and administrative expenses (including related party)			3				(1,265	)			(1,086	)
Management fees-related party			3				(3,358	)			(3,242	)
Depreciation			4				(15,812	)			(15,042	)
Operating income						$	31,869			$	27,902
OTHER INCOME/(EXPENSES):
Interest and finance costs			5, 10				(15,309	)			(26,188	)
Interest income							209				1,141
Loss on derivative financial instrument			11				(3,352	)			—
Other, net							(23	)			(31	)
Total other expenses							(18,475	)			(25,078	)
Partnership’s Net Income						$	13,394			$	2,824
Common unitholders’ interest in Net Income						$	7,605			$	(2,954	)
Series A Preferred unitholders’ interest in Net Income						$	3,375			$	3,375
Series B Preferred unitholders’ interest in Net Income						$	2,406			$	2,406
General Partner’s interest in Net Income						$	8			$	(3	)
Earnings/(Loss) per unit, basic and diluted:			9
Common unit (basic and diluted)						$	0.21			$	(0.08	)
Weighted average number of units outstanding, basic and diluted:			9
Common units							35,490,000				35,490,000

																		Partners’ Capital
		Series A Preferred				Series B Preferred				Common				General Partner				Series A Preferred				Series B Preferred				Common				General Partner				Total
BALANCE, December 31, 2018			3,000,000				2,200,000				35,490,000				35,526			$	73,216			$	53,885			$	199,400			$	(16	)		$	326,485
—Net income			—				—				—				—				3,375				2,406				(2,954	)			(3	)			2,824
—Distributions declared and paid   (common and preferred units) (Note 8)			—				—				—				—				(3,375	)			(2,794	)			(4,437	)			(4	)			(10,610	)
BALANCE, June 30, 2019			3,000,000				2,200,000				35,490,000				35,526			$	73,216			$	53,497			$	192,009			$	(23	)		$	318,699

																		Partners’ Capital
		Series A Preferred				Series B Preferred				Common				General Partner				Series A Preferred				Series B Preferred				Common				General Partner				Total
BALANCE, December 31, 2019			3,000,000				2,200,000				35,490,000				35,526			$	73,216			$	53,498			$	187,021			$	(28	)		$	313,707
—Net income			—				—				—				—				3,375				2,406				7,605				8				13,394
—Distributions declared and paid   (common and preferred units) (Note 8)			—				—				—				—				(3,375	)			(2,406	)			—				—				(5,781	)
BALANCE, June 30, 2020			3,000,000				2,200,000				35,490,000				35,526			$	73,216			$	53,498			$	194,626			$	(20	)		$	321,320

		Note				June 30, 2020				June 30, 2019
Cash flows from Operating Activities:
Net income:						$	13,394			$	2,824
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			4				15,812				15,042
Amortization and write-off of deferred financing fees			10				1,287				1,611
Deferred revenue amortization							104				(394	)
Amortization of deferred charges							108				72
Loss on derivative financial instrument			11				3,352				—
Changes in operating assets and liabilities:
Trade accounts receivable							(577	)			48
Prepayments and other assets							(481	)			(663	)
Inventories							(67	)			(801	)
Due from/to related parties							(3,730	)			475
Trade accounts payable							(934	)			385
Deferred charges							(181	)			(1,038	)
Accrued liabilities							(311	)			45
Unearned revenue							(940	)			(1,462	)
Net cash provided by Operating Activities						$	26,836			$	16,144
Cash flows from Investing Activities:
Other additions to vessels’ equipment							—				—
Net cash used in Investing Activities						$	—			$	—
Cash flows from Financing Activities:
Payment of securities registration and other filing costs							—				(139	)
Distributions declared and paid							(5,781	)			(10,610	)
Repayment of long-term debt			5				(24,000	)			(2,400	)
Net cash used in Financing Activities						$	(29,781	)		$	(13,149	)
Net (decrease) / increase in cash and cash equivalents and restricted cash							(2,945	)			2,995
Cash and cash equivalents and restricted cash at beginning of the period							66,206				109,917
Cash and cash equivalents and restricted cash at end of the period						$	63,261			$	112,912
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents							13,261				112,912
Restricted cash							50,000				—
Cash and cash equivalents and restricted cash						$	63,261			$	112,912

Company Name	Country of incorporation/ formation	Vessel Name	Delivery Date    from shipyard	Delivery date to Partnership	Cbm      Capacity
Pegasus Shipholding S.A. (“Pegasus”)	Marshall Islands	Clean Energy	March 2007	October 2013	149,700
Lance Shipping S.A. (“Lance”)	Marshall Islands	Ob River	July 2007	October 2013	149,700
Seacrown Maritime Ltd. (“Seacrown”)	Marshall Islands	Amur River	January 2008	October 2013	149,700
Fareastern Shipping Limited (“Fareastern”)	Malta	Arctic Aurora	July 2013	June 2014	155,000
Navajo Marine Limited (“Navajo”)	Marshall Islands	Yenisei River	July 2013	September 2014	155,000
Solana Holding Ltd. (“Solana”)	Marshall Islands	Lena River	October 2013	December 2015	155,000

Company Name	Country of incorporation/formation	Purpose of incorporation
Dynagas Equity Holding Limited (“Dynagas Equity”)	Marshall Islands	Holding company that owns all of the outstanding share capital of Arctic LNG Carriers Ltd. (“Arctic LNG”).
Dynagas Operating GP LLC (“Dynagas Operating GP”)	Marshall Islands	Limited Liability Company in which the Partnership holds a 100% membership interest and which has 100% of the Non-Economic General Partner Interest in Dynagas Operating LP.
Dynagas Operating LP (“Dynagas Operating”)	Marshall Islands	Limited partnership in which the Partnership holds a 100% limited partnership interest and which owns 100% of the issued and outstanding share capital of Dynagas Equity.

Dynagas Finance Inc.	Marshall Islands	Wholly owned subsidiary of the Partnership whose activities were limited to the co-issuance of the 250 Million Senior Unsecured Notes due 2019 (“2019 Notes) discussed under Note 5 and engaging in other activities incidental thereto.
Arctic LNG	Marshall Islands	Wholly owned subsidiary of the Partnership which is directly wholly owned by Dynagas Equity and which owns all of the issued and outstanding share capital of Pegasus, Lance, Seacrown, Fareastern, Navajo, Solana and Dynagas Finance LLC.
Dynagas Finance LLC	Delaware	Wholly owned subsidiary of Arctic LNG and co-borrower of the Partnership's $480 Million Senior Secured Term Loan Facility (“Term Loan B”) discussed under Note 5.

Charterer		2020				2019
A			45	%			50	%
B			40	%			22	%
C			15	%			16	%
D			—				12	%
Total			100	%			100	%

i)

On January 1, 2020, the Partnership adopted ASU No. 2016-13—Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities, using the modified retrospective method. This new guidance is amended by: ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”, which clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20 and should be accounted for in accordance with Topic 842, Leases; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which clarify the modification of accounting for available for sale debt securities excluding applicable accrued interest, which must be individually assessed for credit losses when fair value is less than the amortized cost basis; ASU 2019-05, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”, the amendments of which provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. The adoption of this new accounting guidance did not have a material impact on the Partnership’s consolidated financial statements and related disclosures.

ii)

On January 1, 2020, the Partnership adopted ASU 2018-13, “Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”, which improves the effectiveness of fair value measurement disclosures. In particular, the amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, including the consideration of costs and benefits. The amendments in the Update apply to all entities that are required under existing GAAP to make disclosures about recurring and non-recurring fair value measurements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The adoption of this new accounting guidance did not have a material impact on the Partnership’s consolidated financial statements and related disclosures.

i)

In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)" which is intended to provide temporary optional expedients and exceptions to U.S. GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning on March 12, 2020 through December 31, 2022. The Partnership's Management is currently evaluating the impact that this guidance may have on its consolidated financial statements and related disclosures.

		Six months ended June 30,
		2020				2019
Included in voyage expenses
Charter hire commissions (a)		$	855			$	772
Included in general and administrative expenses – related party
Executive services fee (d)		$	298			$	304
Administrative services fee (e)		$	60			$	60
Management fees-related party
Management fees (a)		$	3,358			$	3,242

		Period/Year ended
		June 30, 2020				December 31, 2019
Assets:
Working capital advances provided to the Manager (a), current		$	1,552			$	—
Security deposits to Manager (a), non-current		$	1,350			$	1,350
Liabilities included in Due to related party:
Working capital advances due to the Manager (a)		$	—			$	1,198
Executive service charges due to Manager (d)		$	178			$	148
Administrative service charges due to Manager (e)		$	—			$	30
Management fees due to Manager (a)		$	—			$	701
Other Partnership expenses due (from) /to Manager		$	(154	)		$	125
Total liabilities due to related party, current		$	24			$	2,202

(i)	a commission of 1.25% over charter-hire agreements arranged by the Manager; and

(ii)	a lump sum new-building supervision fee of $700 for the services rendered by the Manager in respect of the construction of the vessel, if applicable, plus out of pocket expenses.

	Vessel Cost				Accumulated Depreciation				Net Book Value
Balance December 31, 2019		$	1,167,909			$	(251,212	)		$	916,697
Period depreciation			—				(15,812	)			(15,812	)
Balance June 30, 2020		$	1,167,909			$	(267,024	)		$	900,885

				Period / Year Ended
Debt instruments		Borrowers-Issuers		June 30, 2020				December 31, 2019
$675 Million Credit Facility		Fareastern Shipping Limited, PegasusShipholding S.A., Lance Shipping S.A.,Seacrown Maritime Ltd., Navajo Marine Limited,Solana Holding Ltd.			639,000				663,000
Total debt				$	639,000			$	663,000
Less deferred financing fees					(8,559	)			(9,846	)
Total debt, net of deferred finance costs				$	630,441			$	653,154
Less current portion, net of deferred financing fees				$	(45,598	)		$	(45,482	)
Long-term debt, net of current portion and deferred financing fees				$	584,843			$	607,672

•

meet a specified minimum ratio of Cash and Cash Equivalents to Total Liabilities;

•

meet a specified maximum ratio of Total Liabilities to the Market Value Adjusted Total Assets; and

•

maintain a minimum liquidity of $50.0 million in a restricted Cash Collateral Account.

Year ending December 31,		Amount
2020		$	24,000
2021			48,000
2022			48,000
2023			48,000
2024			471,000
Total long-term debt		$	639,000

◾	Long-term debt: The $675 Million Credit Facility discussed in Note 5, has an approximate recorded value due to the variable interest rate payable and is thus considered a Level 2 item in accordance with the fair value hierarchy.

◾

Derivative financial instrument: The carrying values reported in the accompanying consolidated condensed balance sheets for the swap transaction are determined through Level 2 of the fair value hierarchy and are derived principally from interest rates, yield curves and other items that allow value to be determined.

◾

Level 1:  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

◾

Level 2:  Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data; and

◾

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the determination of the fair value of the assets or liabilities.

Year ending December 31,		Amount
2020		$	63,330
2021			114,794
2022			103,824
2023			103,824
2024			103,935
2025 and thereafter			550,540
Total		$	1,040,247

		Total Quarterly Distribution Target Amount				Unitholders				General Partner				Holders of IDRs
Minimum Quarterly Distribution			$ 0.365				99.9	%			0.1	%			0.0	%
First Target Distribution		up to $0.420					99.9	%			0.1	%			0.0	%
Second Target Distribution		above $0.420 up to $0.456					85.0	%			0.1	%			14.9	%
Third Target Distribution		Above $0.456 up to $0.548					75.0	%			0.1	%			24.9	%
Thereafter		above $0.548					50.0	%			0.1	%			49.9	%

		Six months ended June 30,
		2020				2019
Partnership’s Net income		$	13,394			$	2,824
Less:
Net Income attributable to Series A preferred unitholders			3,375				3,375
Net Income attributable to Series B preferred unitholders			2,406				2,406
General Partner’s interest in Net Income			8				(3	)
Net income/(loss) attributable to common unitholders		$	7,605			$	(2,954	)
Weighted average number of common units outstanding, basic and diluted			35,490,000				35,490,000
Earnings /(Loss) per common unit, basic and diluted		$	0.21			$	(0.08	)

	Six months ended June 30,
		2020				2019
Interest expense (Note 5)		$	13,939			$	24,396
Amortization and write-off of deferred financing fees			1,287				1,611
Other			83				181
Total		$	15,309			$	26,188

(a)

Quarterly Series A Preferred unit cash distribution: On July 21, 2020, the Partnership’s Board of Directors declared a cash distribution of $0.5625 per unit on its Series A Preferred Units for the period from May 12, 2020 to August 11, 2020. The cash distribution was paid on August 12, 2020, to all Series A preferred unitholders of record as of August 5, 2020.