Welcome to Dynagas LNG Partners Conference Call on the Fourth Quarter 2020 Financial Results. We have with us Mr. Tony Lauritzen, Chief Executive Officer, and Mr. Michael Gregos, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today. At this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect Dynagas LNG Partners business prospects and results of operations. Such risks are more fully disclosed in Dynagas LNG Partners filings with the Securities and Exchange Commission. Now I pass the floor to Mr. Lauritzen. Please go ahead, sir.
Morning, everyone, and thank you for joining us in our three months and full year ended 31st December 2020 earnings conference call. I am joined today by our CFO, Michael Gregos. We have issued a press release announcing our results for the said period. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures, as well as a discussion of why we believe this information to be useful in our press release.
Moving on to slide three. We are pleased to report the results for the three months and full year ended 31st December 2020. All six LNG carriers in our fleet are operating under their respective long-term charters with international gas producers. Despite the ongoing operational challenges the industry is going through with respect to COVID-19, we are pleased to again report 100% utilization for the fleet for the fourth quarter of 2020.
For the fourth quarter of 2020, we reported net income of $10.6 million, earnings per common unit of $0.22, adjusted net income of $10.7 million, adjusted earnings per common unit of $0.22, and adjusted EBITDA of $24.4 million. When compared with the same period in 2019, this improved performance is attributable to an increase in voyage revenues and a decrease in interest and finance costs, coupled with stable vessel operating expenses. We paid in November 2020 a quarterly cash distribution of $0.5625 per Series A Preferred Units for the period from August 12 to November 11, 2020, and a quarterly cash distribution of $0.546875 per Series B Preferred Units for the period from August 22nd to November 21st, 2020.
Subsequent to the quarter, we paid in February 2021 a quarterly cash distribution of $0.56 and a quarter per Series A Preferred Units for the period from November 12, 2020 to February 11, 2021, and a quarterly cash distribution of $0.54 and 11 sixteenths per Series B Preferred Units for the period from November 22nd, 2020 to February 21st, 2021. Subsequent to the quarter, we entered into an amended and restated agreement with our manager, under which the technical management fee was reduced by 13%, equivalent to a reduction of about $417 per vessel per day, effective from 1st of January 2021. Also subsequent to the quarter, we issued about $830,000 of common units at an average price of about $2.98 under the amended and restated ATM sales agreement.
Going forward, we intend to continue our strategy of using our cash flow generation to de-lever our balance sheet, reinforce our liquidity, and generate cash so as to build equity value over time, which will enhance our ability to pursue future growth initiatives. I will now turn the presentation over to Michael, who will provide you with further comments to the financial results.
Thank you, Tony. Turning to slide four. We are pleased with the fourth quarter results as we continue to see very stable operations across the fleet and a vessel utilization of 100%. Adjusted net income for the quarter nearly doubled to $10.7 million compared to the fourth quarter of 2019, and our adjusted EBITDA increased by 1.7% to $24.4 million compared to the fourth quarter of 2019. The improvement in our financial performance compared with the same period last year is attributable to the reduced financing costs following our transformative debt refinancing in the fourth quarter of 2019. Our weighted average interest expense was reduced from 5.27% in the fourth quarter of 2019 to 3.15% in the fourth quarter of 2020, reflecting lower LIBOR rates and decreases in our weighted average indebtedness from $757 million in the fourth quarter of 2019 to $627 million in the fourth quarter of 2020.
Since our debt refinancing, our profitability has steadily increased and has now stabilized at increased levels compared to prior quarters, with adjusted earnings per common unit at $0.22 for the fourth quarter, reflecting the stable nature of our contract-based operating model and the limited variability of our operating and finance expenses. Turning to slide five. 49% of our contracted EBITDA is utilized for debt amortization, and a further 21% is spent on interest payments. For the quarter, we generated $14.2 million in operating cash flow, including negative working capital adjustment of $5.1 million. Excluding working capital changes, we generated operating cash flow of $19.3 million. Cash flow after debt service payments, other financing items, and payments to preferred unit holders amounted to $4 million, in line with our prior guidance.
For the quarter, our cash balance decreased by about $1 million to $75 million due to the aforementioned working capital changes. Moving on to slide six. This slide gives you a snapshot of certain financial metrics. As of end December, we had $615 million debt outstanding under one credit facility, all of which has been fully hedged with an interest rate swap for the life of the loan until its maturity in September 2024. We have no scheduled capital expenditure until 2022, which is when three of our LNG carriers will undergo their special surveys and installment of their ballast water treatment plants. Our stable operating model has proved resilient in light of the COVID-19 pandemic. Slide seven.
We are continuing to execute our strategy of organically deleveraging our balance sheet with the cash flows from our contracts, which has resulted in a drastic 50% reduction in interest expenses in Q4 2020 versus Q4 2019, and a reduction in our debt from $663 million in December 31st, 2019, to $615 million as of December 31st, 2020. We expect that as a result of the $48 million amortization requirement on our sole credit facility, our total projected net leverage will decrease from 5.6 x to less than 3.5 x in 2024, assuming a steady state basis. Our primary focus remains the organic deleveraging of the balance sheet, which will increase equity value over time, positioning the partnership for the next step, including future growth. Moving on to slide eight.
In this slide, we show our fleet-wide cash flow even per day per vessel, versus our contracted time charter rates for the quarter. If we look at the breakdown, we have a competitive cash EBITDA breakeven of $17,200 per day per vessel. Cash interest expense represents $9,100 per day per vessel, and repayment of debt is $21,700 per day per vessel. Our contracted fleet time charter equivalent of $61,100 per day per vessel is well above fleet cash breakeven levels of $48,000 per day per vessel. That wraps it up on my side. I will pass the presentation over to Tony.
Thank you, Michael. Let's move on to slide nine. Our fleet currently counts six LNG carriers with an average age of about 10.6 years. The charterers of our vessels are substantial gas producers, namely Equinor, Gazprom, and Yamal LNG. The fleet's contracted backlog is about $1.1 billion, equivalent to average backlog of about $183 million per vessel, and the fleet's average remaining charter period per vessel is about 7.5 years. Five out of the six vessels in our fleet are assigned with Ice Class 1A FS notation and winterization features. Therefore, the fleet can handle conventional LNG shipping as well as operate in icebound and sub-zero areas. Moving on to slide 10. All the vessels in our fleet are employed on time charter contracts with asset-strong counterparties, under which the charterer pays all major voyage related variable costs such as fuel, canal fees, and terminal costs.
Two of the vessels, namely the Lena and Yenisei River, are under dry dock and OpEx cost pass-through contract, that in general, provides protection for reasonable inflation in operating expenses. Our earliest potential availability is the Arctic Aurora, which will be available in the third quarter of 2021, provided that Equinor does not exercise their option to extend the contract. The next available vessel after the Arctic Aurora may be the Clean Energy, which contract expires in the year 2026. We witnessed a spectacular LNG shipping spot market during the last winter season. Although there was some coal interruption into China, the primary driver for the strong LNG shipping spot market was a cold winter in the Far East. This drove up demand for heating and led to an increase in electricity prices, gas prices, and LNG charter rates.
Demand for heating in the Far East has since then come off, consequently, LNG shipping rates are currently challenging. Even though there are about 50 LNG carriers being delivered in 2021, we believe that there is no reason for the seasonal demand for gas to be as strong or even stronger this coming winter, which we believe will cause a significant increase in LNG shipping rates. Although our revenue have not been affected by the COVID-19 situation, as all of our vessels are employed on term contracts, we are monitoring the situation and outlook. From an operational point of view, we're taking strict measures to protect our seafarers, office staff, and other stakeholders along the logistics chain. So far, we have not had any seafarers onboard testing positive to COVID-19, which we thank all involved for their adherence, patience, and diligence. Let's move on to slide 11.
Five out of our six LNG carriers have been designed and constructed in accordance with, and are assigned with Ice Class 1A FS notation, being equivalent to an Arc4 notation. These LNG carriers are also winterized down to -30 degrees. While the Ice Class notation is in part concerned with the vessel's hull and machinery and icebreaking capability, winterization features are concerned with features that are installed to ensure trouble-free operation in subzero areas. Our partnership and sponsor represent a total market share of about 82% of the global Arc4 equivalent LNG carrier fleet. Our fleet is frequently calling icebound and subzero areas, indicating that our charters are able to unlock the value of the Ice Class notation and winterization features.
The fifth typical area of navigation with regards to icebound and subzero areas are the Northern Sea routes, where the vessels can operate during summer season, the Sakhalin Island, and northern Norway. As our fleet can perform operations in icebound, subzero, and conventional areas without any significant difference in operating costs between these areas of use, we believe our fleet has a broader market reach compared to our peers. Moving on to slide 11. We are an established and experienced LNG shipping company, known as a reliable service provider, able to operate in particularly harsh environments as well as conventional areas. Our fleet is unique and provides for trading versatility. Our focus continues to be on the operational performance, which translates into high utilization and cost control. Our vessels are employed on term contracts, which cash flow is largely utilized to organically reduce debt.
At the current, we are amortizing our debt with about $48 million per annum, and we expect that the reduction of debt will reduce our break-even cost over time. We expect that the solid contract revenue backlog of $1.1 billion and competitive interest expense will allow us to de-leverage our balance sheet, reinforce our liquidity, and generate cash as to build equity value and our cash position over time, which we believe will enhance our ability to pursue future growth initiatives. We have now reached the end of the presentation, and I now open the floor for questions. Thank you.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keyboard and wait for the automated message advising your line is open. If you wish to cancel your request, please press star two. Once again, if you wish to ask a question, please press star one on your telephone. Your first question comes from the line of Randy Giveans from Jefferies. Please ask your question.
Howdy, gentlemen. It's Randy Giveans from Jefferies. How's it going?
Hi, Randy. We're good. Hi. How about you?
Excellent. All good. I guess two questions from me. First, you mentioned for the Arctic Aurora, Equinor has the option. When does that option expire? When would they have to exercise it by? With that, when do you look to book the next charter? Would it be another short-term charter? Are you trying to get a longer-term, one-year, two-year, three-year deal out of it?
Yeah. Thank you, Randy. Look, the options, we can't give the exact date, but let's say in a few weeks from now, the option expires. What we can say is that we're already in various discussions about what future employment could look like. We're not pricing it as of now. We do really believe that it will be a strong winter market going forward, so we are in no real rush. As a company, we're looking at more term charters versus the spot market. As a first priority, we are aiming at term charters, whether that is a year or several years, that is to be seen.
Perfect. On the ATM, do you plan on continuing to make the small sales every once in a while under that ATM program, or do you see maybe a need to use more, do a larger block? I guess, timing. What are the reasons for doing it now?
Well, look, the ATM has been there since last summer. We've raised a very small amount of capital. We're kind of testing the waters with the ATM. We plan on using it opportunistically and selectively. The intent of the ATM is to give us an opportunity to raise capital when we feel it makes sense when the timing and the pricing is reasonable. That's how we see the ATM.
Use of proceeds, is that just debt pay down or trying to build up balance sheet for another acquisition?
Yeah. I think if we're going to raise capital, it would be looking towards future growth, yeah.
Perfect. All right. That covers it for me. I'll hop off. Thank you.
Thank you. Thank you.
There are no further questions. I would like to hand back to Mr. Lauritzen.
Thank you for your time and for listening in on our earnings call. We look forward to speak with you again on our next call. Thank you very much, and stay safe.
That does conclude our conference for today. Thank you for participating. You may all disconnect.