HAMILTON, BERMUDA--(Marketwired - Nov. 6, 2014) - Teekay Offshore Partners L.P. TOO -
Highlights
-- Generated distributable cash flow of $45.2 million in the third quarter
of 2014, an increase of 5 percent from the same period last year.
-- Declared third quarter 2014 cash distribution of $0.5384 per common
unit.
-- In October 2014, signed a letter of intent for the Libra FPSO project in
Brazil, through its 50/50 joint venture with Odebrecht.
-- In October 2014, agreed to acquire six on-the-water long-distance towing
and anchor handling vessels for approximately $220 million.
-- In August 2014, Suksan Salamander FSO commenced full operations under
its ten-year charter contract.
-- Liquidity of approximately $448 million as at September 30, 2014.
Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership), today reported the Partnership's results for the quarter ended September 30, 2014. During the third quarter of 2014, the Partnership generated distributable cash flow(1) of $45.2 million, compared to $43.0 million in the same period of the prior year. The increase in distributable cash flow was primarily due to the delivery of three BG Shuttle Tanker newbuildings in August and November 2013 and January 2014 and the delivery of the Suksan Salamander FSO unit in August 2014, partially offset by the expiration of time-charter contracts since the fourth quarter of 2013 relating to three existing shuttle tankers.
(1) Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please see Appendix B for a reconciliation of distributable cash flow to the most directly comparable financial measure under United States generally accepted accounting principles (GAAP).
On October 3, 2014, a cash distribution of $0.5384 per common unit was declared for the quarter ended September 30, 2014. The cash distribution is payable on November 14, 2014 to all unitholders of record on October 17, 2014.
"The Partnership's third quarter distributable cash flow improved from the previous quarter but was again negatively impacted by the delay in start-up of the Hi-Load DP unit charter contract," commented Peter Evensen, Teekay Offshore GP LLC's Chief Executive Officer. "We have agreed with Petrobras to perform further operational tests and while the testing period is taking longer than originally planned, we acknowledge that additional testing is often required when introducing a new technology."
"Looking forward, since reporting our second quarter results in August, we have continued to secure new growth in the Partnership's expanding Offshore Production and Offshore Logistics businesses," Mr. Evensen continued. "Through our 50/50 joint venture with Brazil-based Odebrecht, we recently signed a letter of intent to provide Petrobras with an early well test FPSO for the Libra field, which is considered to be the largest oil field in Brazil. The Libra FPSO will be converted from an existing Teekay Offshore shuttle tanker and is scheduled to commence its charter contract with Petrobras in early-2017. In our Offshore Logistics business, we are also pleased to announce that our wholly-owned subsidiary, ALP Maritime, has agreed to acquire six modern long-distance towing and anchor handling vessels for an en bloc price of approximately $220 million. This acquisition, combined with ALP's four existing state-of-the-art newbuildings, positions ALP as the leading provider of dynamically-positioned towage vessels in the growing global ocean towage and offshore unit installation market. As a result, we believe that this acquisition also enhances the value of ALP's existing four newbuildings given the greater scale to bid on a broader range of projects."
"These new growth projects will further add to the Partnership's strong existing pipeline of accretive projects delivering between 2014 and 2017," Mr. Evensen continued. "The Petrojarl Knarr FPSO, which is currently being reviewed by the Partnership's Conflicts Committee for purchase, is anticipated to achieve first oil and contract start-up in December of this year. Together with the Partnership's directly executed organic projects, recent on-the-water acquisitions and the four remaining potential FPSO dropdown candidates at Teekay Corporation, this built-in growth provides unitholders with clear visibility to anticipated increases in the Partnership's distributable cash flow for the next several years."
Summary of Recent Events
Libra FPSO Project
In October 2014, Teekay Offshore, through its 50/50 joint venture with Odebrecht Oil & Gas S.A (Odebrecht), signed a letter of intent with Petroleo Brasileiro SA (Petrobras) to provide a floating production, storage and offloading (FPSO) unit for the Libra field located in the Santos Basin offshore Brazil. The contract, which is expected to be finalized in the fourth quarter of 2014, will be serviced by a new FPSO unit converted from the Partnership's 1995-built shuttle tanker, the Navion Norvegia. The conversion project will be completed at Sembcorp Marine's Jurong Shipyard in Singapore and is scheduled to commence operations in early-2017 under a 12-year firm period fixed-rate contract with Petrobras. The FPSO conversion is expected to be completed for a total fully built-up cost of approximately $1 billion.
Acquisition of Towage Vessels
In late-October 2014, Teekay Offshore, through its wholly-owned subsidiary ALP Maritime Services B.V. (ALP), agreed to acquire six modern on-the-water long-distance towing and anchor handling vessels for approximately $220 million. The vessels to be acquired were built between 2006 and 2010 and are all equipped with dynamic positioning (DP) capabilities. The Partnership expects to take delivery of the six vessels during the fourth quarter of 2014 and the first quarter of 2015. Including these vessels, along with ALP's four state-of-the-art long-distance towing and anchor handling newbuildings scheduled to deliver in 2016, ALP will become the world's largest owner and operator of DP towing and anchor handling vessels. All ten vessels will be capable of long-distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units, including FPSO units, floating liquefied natural gas (FLNG) units and floating drill rigs. The acquisition remains subject to customary closing conditions, including the completion of vessel inspections and documentation.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of November 1, 2014.
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Number of Vessels
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Committed
Owned Chartered-in Newbuildings / Conversion
Vessels Vessels Conversions Candidates Total
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Shuttle Tanker
Segment 31(i) (ii) 2 - 1(iii) 34
FPSO Segment 5(iv) - 1(v) - 6
FSO Segment 6 - - - 6
Conventional
Tanker Segment 4 - - - 4
Towage Segment 6(vi) - 4(vii) - 10
Floating
Accommodation
Segment - - 3(viii) - 3
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Total 52 2 8 1 63
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i. Includes six shuttle tankers in which Teekay Offshore's ownership
interest is 50 percent and two shuttle tankers in which Teekay
Offshore's ownership interest is 67 percent. One of the 67-percent owned
shuttle tankers, the Randgrid, will commence its conversion to a
floating storage and offtake (FSO) unit for the Gina Krog FSO project
after its current shuttle tanker charter contract expires in 2015.
ii. Includes one Hi-Load DP unit expected to commence its charter contract
in 2015 once operational testing has been completed.
iii.Consists of one shuttle tanker which is currently in lay-up and is a
candidate for conversion to an offshore asset.
iv. Includes one FPSO unit, the Cidade de Itajai, in which Teekay Offshore's
ownership interest is 50 percent.
v. Consists of one shuttle tanker, the Navion Norvegia, which is to be
converted to an FPSO unit and is expected to commence its 12-year
contract in early-2017 in the Partnership's 50/50 joint venture with
Odebrecht.
vi. Consists of six towing and anchor handling vessels which the Partnership
has agreed to acquire during the fourth quarter of 2014 and the first
quarter of 2015.
vii.Consists of four long-haul towing and anchor handling vessel
newbuildings scheduled to deliver in 2016.
viii.Consists of three floating accommodation unit (FAU) newbuildings
scheduled to deliver between the first quarter of 2015 and the fourth
quarter of 2016.
Other Future Growth Opportunities
Pursuant to an omnibus agreement that the Partnership entered into in connection with its initial public offering in December 2006, Teekay Corporation is obligated to offer to the Partnership its interests in certain shuttle tankers, FSO units and FPSO units that Teekay Corporation owns or may acquire in the future, provided the vessels are servicing contracts with remaining durations of greater than three years. The Partnership may also acquire other vessels that Teekay Corporation may offer it from time to time and also intends to pursue direct acquisitions from third parties and new organic offshore projects.
Offshore Production
FPSO Units
In June 2011, Teekay Corporation entered into a contract with BG Norge Limited (BG) to provide a harsh weather FPSO unit to operate in the North Sea. The contract will be serviced by a newbuilding FPSO unit, the Petrojarl Knarr (Knarr), which completed construction and arrived in Norway in mid-September 2014. Following field installation and offshore testing, which is expected to be completed in December 2014, the unit is expected to commence its ten-year time-charter contract with BG. In September 2014, the Partnership received a formal offer from Teekay Corporation to acquire the Knarr FPSO unit for Teekay Corporation's fully built-up cost of approximately $1.16 billion. The offer is currently being reviewed by the Conflicts Committee of the Partnership's Board of Directors. Consideration for the acquisition would include cash and assuming an $815 million long-term debt facility and may include common units issued to Teekay Corporation. Once approved by the Conflicts Committee and the Partnership's Board of Directors, the acquisition will remain subject to the Knarr FPSO achieving first oil.
Pursuant to the omnibus agreement and subsequent agreements, Teekay Corporation is obligated to offer to sell to the Partnership the Petrojarl Foinaven FPSO unit, an existing unit owned by Teekay Corporation and operating under a long-term contract in the North Sea, subject to approvals required from the charterer. The purchase price for the Petrojarl Foinaven would be based on fair market value.
Teekay Corporation owns three additional FPSO units, the Hummingbird Spirit, the Petrojarl Banff and the Petrojarl 1, which may also be offered to the Partnership in the future pursuant to the omnibus agreement.
In May 2011, Teekay Corporation entered into a joint venture agreement with Odebrecht to jointly pursue FPSO projects in Brazil. Odebrecht is a well-established Brazil-based company that operates in the engineering and construction, petrochemical, bioenergy, energy, oil and gas, real estate and environmental engineering sectors, with over 120,000 employees and a presence in over 20 countries. Through the joint venture agreement, Odebrecht is a 50 percent partner in the Cidade de Itajai FPSO and the new Libra FPSO project, and the Partnership is currently working with Odebrecht on other FPSO project opportunities.
Offshore Logistics
Shuttle Tankers (including Hi-Load DP Units)
In September 2013, the Partnership acquired a 2010-built Hi-Load DP unit from Remora AS (Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $60 million, including modification and mobilization costs. The Hi-Load DP unit continues to undergo operational testing, and related delays in commencement of operations may affect previously anticipated cash flow from the unit. Upon successful completion of the testing, the unit is expected to commence its time-charter contract with Petrobras in Brazil. Under the terms of an agreement between Remora and Teekay Offshore, the Partnership has a right of first refusal to acquire any future Hi-Load DP projects developed by Remora. In July 2013, Remora was awarded a contract by BG E&P Brasil Ltd. to undertake a front-end engineering and design (FEED) study to develop the next generation of Hi-Load DP units. The design, which is based on the main parameters of the first generation design, is expected to include new features such as increased engine power and capability to maneuver vessels larger than Suezmax conventional tankers.
FSO Units
In May 2013, the Partnership entered into an agreement with Statoil Petroleum AS (Statoil), on behalf of the field license partners, to provide an FSO unit for the Gina Krog oil and gas field located in the North Sea. The contract will be serviced by a new FSO unit converted from the 1995-built shuttle tanker, the Randgrid, which the Partnership currently owns through a 67 percent-owned subsidiary. The Partnership will acquire full ownership of the vessel prior to its conversion. The FSO conversion project is expected to cost approximately $280 million, including amounts reimbursable upon delivery of the unit relating to installation and mobilization, and the cost of acquiring the remaining 33 percent ownership interest in the Randgrid shuttle tanker. Following scheduled completion in early-2017, the newly converted FSO unit will commence operations under a three-year time-charter contract with Statoil, which includes 12 additional one-year extension options.
Floating Accommodation Units
In August 2014, the Partnership acquired Logitel Offshore Holding AS (Logitel), a Norway-based company focused on the high-end floating accommodation market. Logitel is currently constructing three newbuilding FAUs, based on the Sevan Marine ASA (Sevan) cylindrical hull design, at the COSCO (Nantong) Shipyard (COSCO) in China. Prior to being acquired by the Partnership, Logitel secured a three-year fixed-rate charter contract, plus extension options, with Petrobras in Brazil for the first FAU, which is scheduled to deliver in the first quarter of 2015. The Partnership expects to secure charter contracts for the remaining two newbuilding FAUs prior to their respective scheduled deliveries in the fourth quarter of 2015 and the fourth quarter of 2016. In addition, the Partnership currently holds options to order up to an additional five FAUs from the COSCO shipyard.
Towage Vessels
In March 2014, Teekay Offshore acquired ALP Maritime Services B.V. (ALP), a Netherlands-based provider of long-haul ocean towage and offshore installation services to the global offshore oil and gas industry. ALP currently provides these services through a fleet of third-party owned vessels. As part of the transaction, the Partnership and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four state-of-the-art SX-157 Ulstein Design ultra-long distance towing and anchor handling vessel newbuildings, which will be equipped with DP capabilities, for a fully built-up cost of approximately $260 million. These newbuildings will be capable of ultra-long distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units, including FPSO units, FLNG units and floating drill rigs, and are scheduled to deliver during 2016.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $28.8 million for the quarter ended September 30, 2014, compared to $10.5 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of decreasing net income by $0.3 million and $36.3 million for the quarters ended September 30, 2014 and 2013, respectively, as detailed in Appendix A to this release. Including these items, the Partnership reported, on a GAAP basis, net income attributable to the partners of $28.5 million for the third quarter of 2014, compared to net loss attributable to the partners of $25.8 million in the same period of the prior year. Net revenues(2) increased to $229.8 million for the third quarter of 2014, compared to $207.3 million in the same period of the prior year.
The Partnership reported adjusted net income attributable to the partners(1) of $83.7 million for the nine months ended September 30, 2014, compared to $39.1 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of decreasing net income by $53.3 million and increasing net income by $12.9 million for the nine months ended September 30, 2014 and 2013, respectively, as detailed in Appendix A to this release. Including these items, the Partnership reported, on a GAAP basis, net income attributable to the partners of $30.4 million for the nine months ended September 30, 2014, compared to $52.0 million in the same period of the prior year. Net revenues(2) increased to $670.7 million for the nine months ended September 30, 2014, compared to $595.6 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three and nine months ended September 30, 2014 increased from the same periods in the prior year, mainly due to the acquisitions of the Voyageur Spirit FPSO unit and a 50 percent interest in the Cidade de Itajai FPSO unit in the second quarter of 2013, the delivery and commencement of the time-charters with a subsidiary of BG Group plc for four newbuilding shuttle tankers (the BG Shuttle Tankers) in June, August and November 2013 and January 2014 and the delivery of the Suksan Salamander FSO unit in August 2014. These increases were partially offset by the sale or lay-up of four older shuttle and conventional tankers during 2013 and 2014 as their related charter contracts expired or terminated. For the nine months ended September 30, 2014 and the three and nine months ended September 30, 2013, the indemnification payments of $3.5 million, $13.0 million and $30.0 million, respectively, received from Teekay Corporation for the Voyageur Spirit FPSO off-hire, were not included in adjusted net income but instead were accounted for as an equity adjustment.
For accounting purposes, the Partnership is required to recognize, through the consolidated statements of income (loss), changes in the fair value of derivative instruments as unrealized gains or losses. This revaluation does not affect the economics of any hedging transactions nor does it have any impact on the Partnership's actual cash flows or the calculation of its distributable cash flow.
(1) Adjusted net income attributable to the partners is a non-GAAP financial measure. Please refer to Appendix A included in this release for a reconciliation of this non-GAAP measure to the most directly comparable financial measure under GAAP and information about specific items affecting net income (loss) that are typically excluded by securities analysts in their published estimates of the Partnership's financial results.
(2) Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please refer to Appendix C included in this release for a reconciliation of this non-GAAP measure to the most directly comparable financial measure under GAAP.
Operating Results
The following table highlights certain financial information for four of Teekay Offshore's current segments: the Shuttle Tanker segment, the FPSO segment, the FSO segment, and the Conventional Tanker segment (please refer to the "Teekay Offshore's Fleet" section of this release above and Appendices C through F for further details).
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Three Months Ended
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September 30, 2014
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(unaudited)
(in thousands Shuttle Conventional
of U.S. Tanker FPSO FSO Tanker
dollars) Segment Segment Segment Segment Total
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Net revenues(1) 118,810 92,801 11,748 6,461 229,820
Vessel
operating
expenses (38,970) (43,141) (7,969) (1,558) (91,638)
Time-charter
hire expense (7,085) - - - (7,085)
Depreciation
and
amortization (27,727) (18,186) (2,232) (1,614) (49,759)
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CFVO from
consolidated
vessels(2) 65,092 41,358 4,072 4,108 114,630
CFVO from
equity
accounted
vessel(3) - 5,506 - - 5,506
Total
CFVO(2)(3) 65,092 46,864 4,072 4,108 120,136
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Three Months Ended
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September 30, 2013
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(unaudited)
(in thousands Shuttle Conventional
of U.S. Tanker FPSO FSO Tanker
dollars) Segment Segment Segment Segment Total
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Net revenues(1) 112,446 73,908 14,129 6,829 207,312
Vessel
operating
expenses (37,221) (42,773) (7,547) (1,494) (89,035)
Time-charter
hire expense (14,142) - - - (14,142)
Depreciation
and
amortization (29,720) (17,789) (2,736) (1,675) (51,920)
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CFVO from
consolidated
vessels(2) 54,136 22,623 7,438 3,272 87,469
CFVO from
equity
accounted
vessel(3) - 4,852 - - 4,852
Total
CFVO(2)(3) 54,136 27,475 7,438 3,272 92,321
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1. Net revenues is a non-GAAP financial measure used by certain investors
to measure the financial performance of shipping companies. Please refer
to Appendix C, included in this release for a reconciliation of this
non-GAAP measure to the most directly comparable GAAP financial measure.
2. Cash flow from vessel operations (CFVO) from consolidated vessels
represents income from vessel operations before depreciation and
amortization expense and amortization of in-process revenue contracts
and deferred gains, and includes the realized gains (losses) on the
settlement of foreign exchange forward contracts, and cash flow from
vessel operations relating to its discontinued operations and
adjustments for direct financing leases to a cash basis. CFVO is a non-
GAAP financial measure used by certain investors to measure the
financial performance of shipping companies. Please refer to Appendix E
included in this release for a description and reconciliation of this
non-GAAP measure to the most directly comparable GAAP financial measure.
3. CFVO from equity accounted vessel represents the Partnership's 50
percent share of CFVO from the Cidade de Itajai FPSO unit. Please see
Appendix F for a description and reconciliation of CFVO from equity
accounted vessel (a non-GAAP measure) as used in this release to the
most directly comparable GAAP financial measure.
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership's Shuttle Tanker segment increased to $65.1 million in the third quarter of 2014 compared to $54.1 million for the same period of the prior year, primarily due to the delivery of three BG Shuttle Tanker newbuildings and commencement of their respective time-charters in August and November 2013 and January 2014, partially offset by the expiration of time-charter out contracts for three existing shuttle tankers since the fourth quarter of 2013.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO segment, including one equity-accounted FPSO unit, increased to $46.9 million for the third quarter of 2014 compared to $27.5 million for the same period of the prior year, primarily due to cash flows from the Voyageur Spirit FPSO unit related to the commencement of its charter in August 2013. Cash received from Teekay Corporation in relation to the Voyageur Spirit indemnification of $13.0 million during the three months ended September 30, 2013 was not included as part of cash flow from vessel operations, but was instead accounted for as an equity adjustment.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO segment decreased to $4.1 million in the third quarter of 2014 compared to $7.4 million for the same period of the prior year, primarily due to the scheduled drydocking of the Navion Saga FSO in the third quarter of 2014 and a reduced rate upon re-contracting of the Pattani Spirit FSO in the second quarter of 2014, partially offset by the delivery of the Suksan Salamander FSO in August 2014.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment increased to $4.1 million in the third quarter of 2014 compared to $3.3 million for the same period of the prior year, primarily due to the sale of a vessel in the third quarter of 2013 which had negative cash flow from vessel operations during that quarter.
Liquidity and Continuous Offering Program Update
In 2013, the Partnership implemented a continuous offering program (COP) under which the Partnership may issue new common units, representing limited partner interests, at market prices up to a maximum aggregate amount of $100 million. As at September 30, 2014, the Partnership sold an aggregate of 296,858 common units under the COP, generating proceeds of approximately $10.0 million (including the Partnership's general partner's 2 percent proportionate capital contribution and net of offering costs). The Partnership did not sell any common units under the COP during the third quarter of 2014.
As of September 30, 2014, the Partnership had total liquidity of $448.2 million, which consisted of $224.6 million in cash and cash equivalents and $223.6 million in undrawn revolving credit facilities.
Conference Call
The Partnership plans to host a conference call on Friday, November 7, 2014 at noon (ET) to discuss the results for the third quarter of 2014. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
-- By dialing 1-800-499-4035 or 416-204-9269, if outside North America, and
quoting conference ID code 2181019.
-- By accessing the webcast, which will be available on Teekay Offshore's
website at www.teekayoffshore.com (the archive will remain on the
website for a period of 30 days).
A supporting Third Quarter 2014 Earnings Presentation will also be available at www.teekayoffshore.com in advance of the conference call start time.
The conference call will be recorded and available until Friday, November 14, 2014. This recording can be accessed following the live call by dialing 1-888-203-1112 or 647-436-0148, if outside North America, and entering access code 2181019.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage services and floating accommodation to the offshore oil industry focusing on the fast-growing, deepwater offshore oil regions of the North Sea and Brazil. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) and owns interests in 33 shuttle tankers (including two chartered-in vessels and one vessel currently in lay-up as a candidate for conversion to an offshore unit), six floating production storage and offloading (FPSO) units (including one committed FPSO conversion unit), six floating storage and offtake (FSO) units (excluding one committed FSO conversion unit), one Hi-Load Dynamic Positioning (DP) unit, ten long-haul towing and anchor handling vessels (including six vessels Teekay Offshore has agreed to acquire and four newbuildings), three floating accommodation unit newbuildings and four conventional oil tankers. The majority of Teekay Offshore's fleet is employed on medium-term, stable contracts. In addition, Teekay Offshore also has rights to participate in certain other FPSO, shuttle tanker and Hi-Load DP opportunities provided by Teekay Corporation TK, Sevan Marine ASA (Oslo Bors:SEVAN) and Remora AS.
Teekay Offshore's common units trade on the New York Stock Exchange under the symbol "TOO".
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except unit data)
Three Months Ended Nine Months Ended
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September June 30, September September September
30, 2014 2014 30, 2013 30, 2014 30, 2013(1)
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(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
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Revenues 258,442 241,402 235,561 759,078 670,085
Voyage expenses (28,622) (26,256) (28,249) (88,332) (74,470)
Vessel operating
expenses (91,638) (88,184) (89,035) (267,952) (252,878)
Time-charter
hire expense (7,085) (4,975) (14,142) (23,472) (43,012)
Depreciation and
amortization (49,759) (48,474) (51,920) (146,721) (146,695)
General and
administrative (14,038) (18,054) (12,600) (46,941) (33,407)
Write-down of
vessels(2) (4,759) - (57,502) (4,759) (57,502)
Restructuring
recovery
(charge)(3) - 821 (449) 262 (2,503)
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Income (loss)
from vessel
operations 62,541 56,280 (18,336) 181,163 59,618
Interest expense (22,911) (21,568) (16,789) (63,399) (44,452)
Interest income 145 190 467 512 2,127
Realized and
unrealized
(losses) gains
on derivative
instruments (4) (9,432) (38,144) (7,952) (84,208) 24,872
Equity income 2,486 2,388 1,199 8,577 2,797
Foreign currency
exchange
loss(5) (939) (2,836) (2,730) (4,550) (2,813)
Loss on bond
repurchase(6) - - - - (1,759)
Other (expense)
income - net (278) 72 310 184 884
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Income (loss)
from continuing
operations
before income
tax expense 31,612 (3,618) (43,831) 38,279 41,274
Income tax
expense (1,468) (182) (107) (2,913) (329)
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Net income
(loss) from
continuing
operations 30,144 (3,800) (43,938) 35,366 40,945
Net loss from
discontinued
operations(7) - - (333) - (4,642)
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Net income
(loss) 30,144 (3,800) (44,271) 35,366 36,303
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Non-controlling
interests in
net income
(loss) 1,623 1,654 (18,483) 4,956 (13,432)
Dropdown
Predecessor's
interest in net
income(1) - - - - (2,225)
Preferred
unitholders'
interest in net
income (loss) 2,719 2,719 2,719 8,156 4,531
General
Partner's
interest in net
income (loss) 4,376 3,696 2,148 12,015 9,053
Limited
partners'
interest in net
income (loss) 21,426 (11,869) (30,655) 10,239 38,376
Weighted-average
number of
common units:
- basic 85,681,495 85,529,102 83,700,905 85,556,125 82,190,727
- diluted 85,717,631 85,529,102 83,700,905 85,626,915 82,205,069
Total number of
common units
outstanding at
end of period 85,681,495 85,681,495 83,702,079 85,681,495 83,702,079
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1. Results for the Voyageur Spirit FPSO unit for the period beginning April
13, 2013 prior to its acquisition by the Partnership on May 2, 2013 when
it was owned and operated by Teekay Corporation, are included in
Dropdown Predecessor.
2. Write-down of vessels for the three and nine months ended September 30,
2014 includes the impairment of one of the Partnership's 1990s-built
shuttle tankers to its estimated fair value. The write-down is the
result of the pending expiration of the current contract for this vessel
in December 2014, which is expected to be re-chartered at a lower rate.
Write-down of vessels for the three and nine months ended September 30,
2013 include the impairment of four of the Partnership's 1990s-built
shuttle tankers to their estimated fair value, including the impairment
of $37.2 million for two shuttle tankers which the Partnership owns
through a 50 percent-owned consolidated subsidiary. The write-downs were
the result of the re-contracting of two of the vessels at lower than
expected rates during the third quarter of 2013, the cancellation of a
short-term contract in September 2013 and a change in expectations for a
contract renewal for the remaining shuttle tanker operating in Brazil.
3. Restructuring charges for the nine months ended September 30, 2014 and
the three months ended June 30, 2014 include a $0.8 million
reimbursement relating to the reorganization of the Partnership's
shuttle tanker marine operations, which were completed during 2013. In
addition, restructuring charges for the nine months ended September 30,
2014 relate to the reflagging of one shuttle tanker. Restructuring
charges for the three and nine months ended September 30, 2013 relate to
the reflagging of one shuttle tanker. In addition, restructuring charges
for the nine months ended September 30, 2013 relate to the
reorganization of the Partnership's shuttle tanker and conventional
tanker marine operations.
4. Realized (losses) gains on derivative instruments relate to amounts the
Partnership actually paid or received to settle derivative instruments,
and the unrealized gains (losses) on derivative instruments relate to
the change in fair value of such derivative instruments, as detailed in
the table below:
Three Months Ended Nine Months Ended
------------------------------------------------------------
September June 30, September September September
30, 2014 2014 30, 2013 30, 2014 30, 2013
------------------------------------------------------------
Realized
(losses) gains
relating to:
Interest rate
swaps (13,799) (13,997) (14,354) (41,859) (48,032)
Foreign currency
forward
contracts (278) 196 722 (581) (571)
Interest rate
swap
termination - - (31,798) - (31,798)
------------------------------------------------------------
(14,077) (13,801) (45,430) (42,440) (80,401)
------------------------------------------------------------
Unrealized gains
(losses)
relating to:
Interest rate
swaps 6,940 (22,985) 4,715 (40,152) 76,617
Foreign currency
forward
contracts (2,295) (1,358) 965 (1,616) (3,142)
Interest rate
swap
termination - - 31,798 - 31,798
------------------------------------------------------------
4,645 (24,343) 37,478 (41,768) 105,273
------------------------------------------------------------
Total realized
and unrealized
(losses) gains
on derivative
instruments (9,432) (38,144) (7,952) (84,208) 24,872
------------------------------------------------------------
5. Foreign currency exchange losses include realized gains relating to the
amounts the Partnership received to settle its non-designated cross
currency swaps that were entered into as an economic hedge relating to
the Partnership's Norwegian Kroner (NOK)-denominated unsecured bonds as
detailed in the table below. The Partnership issued NOK 600 million
unsecured bonds in 2010 that matured in the fourth quarter of 2013, of
which it repurchased NOK 388.5 million in the first quarter of 2013 and
recognized a realized gain of $6.8 million on the partial early
termination of a cross currency swap and a realized foreign exchange
loss of $6.6 million on the repurchase of the bonds. The Partnership
also issued NOK 600 million of unsecured bonds in 2012 maturing in 2017,
NOK 1,300 million of unsecured bonds in 2013 maturing in 2016 and 2018,
and NOK 1,000 million of unsecured bonds in 2014 maturing in 2019.
Foreign exchange losses also include unrealized (losses) gains relating
to the change in fair value of such derivative instruments, partially
offset by unrealized gains (losses) on the revaluation of the NOK bonds,
as detailed in the table below:
Three Months Ended Nine Months Ended
------------------------------------------------------------
September June 30, September September September
30, 2014 2014 30, 2013 30, 2014 30, 2013
------------------------------------------------------------
Realized
(losses) gains
on cross-
currency swaps (497) (38) 331 (519) 1,353
Realized gain on
partial
termination of
cross-currency
swap - - - - 6,800
Realized foreign
exchange loss
on partial
repurchase of
NOK bonds - - - - (6,573)
Unrealized
(losses) gains
on cross-
currency swaps (18,806) (14,267) 747 (25,498) (34,062)
Unrealized gains
(losses) on
revaluation of
NOK bonds 21,561 11,431 (3,235) 23,862 35,026
6. Loss on bond repurchase for the nine months ended September 30, 2013
relates to the repurchase in the first quarter of 2013 of NOK 388.5
million of the Partnership's NOK 600 million bond issue at a premium.
7. Results for three conventional tankers (Leyte Spirit, Poul Spirit and
Gotland Spirit), which the Partnership sold during 2013, have been
included in net loss from discontinued operations for the periods
presented.
TEEKAY OFFSHORE PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
As at As at As at
------------------------------------
September June 30, December
30, 2014 2014 31, 2013
------------------------------------
(unaudited) (unaudited) (unaudited)
------------------------------------
ASSETS
Current
Cash and cash equivalents 224,566 251,561 219,126
Accounts receivable 145,028 153,226 176,265
Vessel held for sale (1) 6,758 - -
Net investments in direct financing
leases - current 5,777 5,537 5,104
Prepaid expenses 34,968 34,073 31,675
Due from affiliates 53,572 55,843 15,202
Current portion of derivative
instruments 17 712 500
Other current assets 5,097 3,987 3,051
----------------------------------------------------------------------------
Total current assets 475,783 504,939 450,923
----------------------------------------------------------------------------
Vessels and equipment
At cost, less accumulated depreciation 2,942,497 2,931,060 3,059,770
Advances on newbuilding contracts and
conversion costs 152,919 114,087 29,812
Investment in equity accounted joint
venture 59,793 58,338 52,120
Net investments in direct financing
leases 72,050 73,909 22,463
Derivative instruments 7,926 5,743 10,323
Deferred tax asset 6,686 8,106 7,854
Other assets 52,419 45,723 35,272
Intangible assets - net 7,417 8,423 10,436
Goodwill 129,145 129,145 127,113
----------------------------------------------------------------------------
Total assets 3,906,635 3,879,473 3,806,086
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current
Accounts payable 22,630 16,754 15,753
Accrued liabilities 140,774 121,243 138,156
Deferred revenues 19,597 24,004 29,075
Due to affiliates 46,709 75,577 121,864
Current portion of long-term debt 376,025 339,087 806,009
Current portion of derivative
instruments 63,106 63,136 47,944
Current portion of in-process revenue
contracts 12,744 12,744 12,744
----------------------------------------------------------------------------
Total current liabilities 681,585 652,545 1,171,545
----------------------------------------------------------------------------
Long-term debt 2,211,618 2,204,394 1,562,967
Derivative instruments 170,359 154,681 121,135
In-process revenue contracts 79,017 82,230 88,550
Other long-term liabilities 38,954 27,441 23,984
----------------------------------------------------------------------------
Total liabilities 3,181,533 3,121,291 2,968,181
----------------------------------------------------------------------------
Redeemable non-controlling interest 17,286 15,149 16,564
Equity
Limited partners - common units (85.7
million and 85.5 million units issued
and outstanding at September 30, 2014
and December 31, 2013, respectively) 499,155 523,500 621,002
Limited partners - preferred units (6.0
million and 6.0 million units issued
and outstanding at September 30, 2014
and December 31, 2013, respectively) 144,800 144,800 144,800
General Partner 18,891 19,389 21,242
----------------------------------------------------------------------------
Partners' equity 662,846 687,689 787,044
----------------------------------------------------------------------------
Non-controlling interests 44,970 55,344 34,297
----------------------------------------------------------------------------
Total equity 707,816 743,033 821,341
----------------------------------------------------------------------------
Total liabilities and total equity 3,906,635 3,879,473 3,806,086
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Vessel held for sale represents one shuttle tanker, the Navion Norvegia,
which is to be converted to an FPSO unit by our 50/50 joint venture with
Odebrecht and is expected to commence its 12-year charter contract in
early-2017.
TEEKAY OFFSHORE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Nine Months Ended
----------------------------
September September
30, 2014 30, 2013(1)
----------------------------
(unaudited) (unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
Net income 35,366 36,303
Non-cash items:
Unrealized loss (gain) on derivative
instruments 67,266 (71,152)
Equity income, net of dividends received of
$7,390 (2013 - $nil) (1,187) (2,797)
Depreciation and amortization 146,721 147,931
Write-down of vessels 4,759 75,967
Deferred income tax expense (recovery) 887 (148)
Amortization of in-process revenue contracts (9,532) (9,532)
Foreign currency exchange gain and other (28,667) (33,575)
Change in non-cash working capital items related
to operating activities (105,368) 66,016
Expenditures for dry docking (26,527) (15,360)
----------------------------------------------------------------------------
Net operating cash flow 83,718 193,653
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from long-term debt 799,049 971,481
Scheduled repayments of long-term debt (274,164) (122,976)
Prepayments of long-term debt (308,625) (433,152)
Debt issuance costs (10,555) (13,371)
Equity contribution from Teekay Corporation to
Dropdown Predecessor - 5,596
Purchase of Voyageur LLC from Teekay Corporation
(net of cash acquired of $0.9 million) 3,474 (239,036)
Equity contribution from joint venture partner 26,267 1,500
Proceeds from issuance of common units 7,784 65,124
Proceeds from issuance of preferred units - 150,000
Expenses relating to equity offerings (153) (5,728)
Cash distributions paid by the Partnership (160,926) (141,783)
Cash distributions paid by subsidiaries to non-
controlling interests (19,828) (4,190)
Other 684 -
----------------------------------------------------------------------------
Net financing cash flow 63,007 233,465
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (140,755) (354,294)
Purchase of equity investment in Itajai FPSO
joint venture (net of cash acquired of $1.3
million) - (52,520)
Proceeds from sale of vessels and equipment - 27,986
Advances to joint venture partners and equity
accounted joint ventures (6,487) -
Direct financing lease payments received 4,189 4,271
Acquisition of ALP Maritime Services B.V. (net
of cash acquired of $0.3 million) (2,322) -
Acquisition of Logitel Offshore Holding AS (net
of cash acquired of $8.1 million) 4,090 -
----------------------------------------------------------------------------
Net investing cash flow (141,285) (374,557)
----------------------------------------------------------------------------
Increase in cash and cash equivalents 5,440 52,561
Cash and cash equivalents, beginning of the
period 219,126 206,339
----------------------------------------------------------------------------
Cash and cash equivalents, end of the period 224,566 258,900
----------------------------------------------------------------------------
1. In accordance with GAAP, the Consolidated Statement of Cash Flows for
the nine months ended September 30, 2013 includes the cash flows
relating to the Voyageur Spirit FPSO unit for the period from April 13,
2013 to May 2, 2013 (or the Dropdown Predecessor), when the vessel was
under the common control of Teekay Corporation, but prior to its
acquisition by the Partnership.
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)
(in thousands of U.S. dollars)
Set forth below is a reconciliation of the Partnership's unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net income (loss) attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership's financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------------------------------
September September September September
30, 2014 30, 2013 30, 2014 30, 2013
------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net income (loss) - GAAP
basis 30,144 (44,271) 35,366 36,303
Adjustments:
Net (income) loss
attributable to non-
controlling interests (1,623) 18,483 (4,956) 13,432
Net loss attributable to
Dropdown Predecessor - - - 2,225
----------------------------------------------------------------------------
Net income (loss)
attributable to the
partners 28,521 (25,788) 30,410 51,960
Add (subtract) specific
items affecting net income
(loss):
Foreign currency exchange
losses(1) 442 3,061 4,031 3,897
Unrealized (gains) losses
on derivative
instruments(2) (5,690) (37,416) 41,468 (102,412)
Acquisition, restructuring
charges and other (3) 278 1,558 1,979 3,880
Write-down of vessels (4) 4,759 57,502 4,759 57,502
Realized loss on early
swap termination (5) - 31,798 - 31,798
Loss on bond repurchase
(6) - - - 1,759
Components of discontinued
operations (7) - (565) - 7,184
Realized (gains) losses on
foreign currency forward
contracts(8) - (1,080) - 783
Non-controlling interests'
share of items above (9) 494 (18,553) 1,093 (17,275)
----------------------------------------------------------------------------
Total adjustments 283 36,305 53,330 (12,884)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income
attributable to the
partners(10) 28,804 10,517 83,740 39,076
----------------------------------------------------------------------------
1. Foreign exchange losses primarily relate to the Partnership's
revaluation of all foreign currency-denominated monetary assets and
liabilities based on the prevailing exchange rate at the end of each
reporting period and unrealized gains or losses related to the
Partnership's cross currency swaps and repurchase of Norwegian Kroner
bonds and excludes the realized gains and losses relating to the cross
currency swaps for outstanding Norwegian bonds of the Partnership.
2. Reflects the unrealized (gains) losses due to changes in the mark-to-
market value of interest rate swaps and foreign exchange forward
contracts that are not designated as hedges for accounting purposes,
including the unrealized mark-to-market value of the interest rate swap
within the Cidade de Itajai FPSO equity accounted joint venture and
excluding amounts relating to the Dropdown Predecessor.
3. Other items for the three and nine months ended September 30, 2014
include a $0.3 million loss related to the revaluation of a contingent
consideration payable in relation to the Partnership's acquisition of
Logitel. Other items for the nine months ended September 30, 2014
primarily include fees of $2.6 million associated with the Partnership's
acquisition of ALP, partially offset by a seafarer pension credit of
$0.7 million. Other items for the three and nine months ended September
30, 2013 primarily include restructuring charges of $0.4 million
relating to the reflagging of one shuttle tanker and $1.0 million
related to a one-time business development fee paid to Teekay
Corporation relating to the purchase of the Hi-Load DP unit. Other items
also include restructuring charges of $2.1 million for the nine months
ended September 30, 2013 relating to the reorganization of the
Partnership's shuttle tanker and conventional tanker marine operations.
4. Write-down of vessels for the three and nine months ended September 30,
2014 includes the impairment of one of the Partnership's 1990s-built
shuttle tankers to its estimated fair value. The write-down is the
result of the pending expiration of the current contract for this vessel
in December 2014, which is expected to be re-chartered at a lower rate.
Write-down of vessels for the three and nine months ended September 30,
2013 includes the impairment of four of the Partnership's shuttle
tankers which were written down to their estimated fair value, including
the impairment of $37.2 million of two shuttle tankers which the
Partnership owns through a 50 percent-owned consolidated subsidiary.
5. Reflects the realized loss on the early termination of an interest rate
swap.
6. Loss on bond repurchase for the nine months ended September 30, 2013
relates to the repurchase of NOK 388.5 million of the Partnership's then
existing NOK 600 million bond issue at a premium in January 2013.
7. Related to components of net loss from discontinued operations. The
results for the three months ended September 30, 2013 include a gain on
sale of the Gotland Spirit. In addition, the results for the nine months
ended September 30, 2013 include the termination fees received from
Teekay Corporation upon cancellation of the Poul Spirit and the Gotland
Spirit time-charter contracts, partially offset by the write downs of
the Poul Spirit and the Gotland Spirit to their estimated fair value in
conjunction with the termination of their charter contracts and the loss
on sale of the Poul Spirit.
8. Reflects the realized (gains) losses on foreign currency forward
contracts entered into for the purchase of the Hi-Load DP unit from
Remora AS that is not designated as hedges for accounting purposes.
9. Items affecting net income (loss) include items from the Partnership's
consolidated non-wholly-owned subsidiaries. The specific items affecting
net income (loss) are analyzed to determine whether any of the amounts
originated from a consolidated non-wholly-owned subsidiary. Each amount
that originates from a consolidated non-wholly-owned subsidiary is
multiplied by the non-controlling interests' percentage share in this
subsidiary to arrive at the non-controlling interests' share of the
amount. The amount identified as "non-controlling interests' share of
items above" in the table above is the cumulative amount of the non-
controlling interests' proportionate share of items listed in the table.
10. Adjusted net income (loss) attributable to the partners excludes
indemnification payments from Teekay Corporation relating to the loss of
revenues and certain unrecovered vessel operating expenses for the
Voyageur Spirit FPSO, which for the nine months ended September 30, 2014
was $3.5 million and for the three and nine months ended September 30,
2013 was $13.0 million and $30.0 million, respectively.
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE DISTRIBUTABLE CASH FLOW
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Distributable Cash Flow (DCF)
Distributable cash flow represents net income (loss) adjusted for depreciation and amortization expense, non-controlling interests, non-cash items, distributions relating to equity financing of newbuilding installments and on our preferred units, vessel and business acquisition costs, estimated maintenance capital expenditures, unrealized gains and losses from derivatives, non-cash income taxes, foreign currency and unrealized foreign exchange related items. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, the Partnership's capital assets. Distributable cash flow is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Distributable cash flow is not defined by GAAP and should not be considered as an alternative to net income (loss) or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net income (loss) for the quarters ended September 30, 2014 and September 30, 2013, respectively.
----------------------------------------------------------------------------
Three Months Ended
------------------------
September September
30, 2014 30, 2013
------------------------
(unaudited) (unaudited)
----------------------------------------------------------------------------
Net income (loss) 30,144 (44,271)
----------------------------------------------------------------------------
Add (subtract):
Depreciation and amortization 49,759 51,920
Write-down of vessels 4,759 57,502
Partnership's share of equity accounted joint
venture's distributable cash flow net of
estimated maintenance capital expenditures (1) 2,774 2,162
Distributions relating to equity financing of
newbuildings and conversion costs 1,678 3,331
Realized loss on termination of interest rate swap - 31,798
Indemnification from Teekay Corporation relating
to the Voyageur Spirit FPSO (2) - 13,000
Non-cash items in discontinued operations (3) - (565)
Equity income from joint venture (2,486) (1,199)
Distributions relating to preferred units (2,719) (2,719)
Unrealized gains on derivative instruments (4) (4,645) (37,478)
Estimated maintenance capital expenditures (2) (28,979) (27,065)
Foreign currency exchange and other, net (729) 917
----------------------------------------------------------------------------
Distributable Cash Flow before Non-Controlling
Interests 49,556 47,333
Non-controlling interests' share of DCF (4,393) (4,354)
----------------------------------------------------------------------------
Distributable Cash Flow 45,163 42,979
----------------------------------------------------------------------------
1. Estimated maintenance capital expenditures relating to the Partnership's
equity accounted joint venture for the three months ended September 30,
2014 and 2013 were $1.0 million and $0.9 million, respectively.
2. Indemnification payments from Teekay Corporation for the loss of
revenues and certain unrecovered vessel operating expenses for the
Voyageur Spirit FPSO are effectively treated as a reduction to estimated
maintenance capital expenditures in the third quarter of 2013, since the
indemnification payments are effectively treated as a reduction to the
purchase price of the Voyageur Spirit FPSO. Estimated maintenance
capital expenditures excludes the estimated maintenance capital
expenditures of the equity accounted joint venture, which are deducted
from the equity accounted joint venture's distributable cash flow.
3. Includes depreciation and gain on sale of a vessel included within
discontinued operations.
4. Derivative instruments include interest rate swaps and foreign exchange
forward contracts.
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
NET REVENUES
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Net Revenues
Net revenues represents revenues less voyage expenses (recoveries), which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies, however, it is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Partnership's performance required by GAAP.
Three Months Ended September 30, 2014
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Revenues 145,043 92,801 12,786 7,812 258,442
Voyage expenses (26,233) - (1,038) (1,351) (28,622)
----------------------------------------------------------------------------
Net revenues 118,810 92,801 11,748 6,461 229,820
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Revenues 139,554 73,908 14,151 7,948 235,561
Voyage expenses (27,108) - (22) (1,119) (28,249)
----------------------------------------------------------------------------
Net revenues 112,446 73,908 14,129 6,829 207,312
----------------------------------------------------------------------------
Nine Months Ended September 30, 2014
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Revenues 435,369 259,922 38,748 25,039 759,078
Voyage expenses (82,858) - (1,210) (4,264) (88,332)
----------------------------------------------------------------------------
Net revenues 352,511 259,922 37,538 20,775 670,746
----------------------------------------------------------------------------
Nine Months Ended September 30, 2013
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Revenues 403,126 196,853 44,344 25,762 670,085
Voyage
(expenses)
recoveries (71,677) - 463 (3,256) (74,470)
----------------------------------------------------------------------------
Net revenues 331,449 196,853 44,807 22,506 595,615
----------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX D - SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
Three Months Ended September 30, 2014
-------------------------------------------------------------
(unaudited)
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Net revenues
(See Appendix
C) 118,810 92,801 11,748 6,461 229,820
Vessel
operating
expenses (38,970) (43,141) (7,969) (1,558) (91,638)
Time-charter
hire expense (7,085) - - - (7,085)
Depreciation
and
amortization (27,727) (18,186) (2,232) (1,614) (49,759)
General and
administrative (7,332) (5,143) (768) (795) (14,038)
Write-down of
vessel (4,759) - - - (4,759)
----------------------------------------------------------------------------
Income from
vessel
operations 32,937 26,331 779 2,494 62,541
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
-------------------------------------------------------------
(unaudited)
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Net revenues
(See Appendix
C) 112,446 73,908 14,129 6,829 207,312
Vessel
operating
expenses (37,221) (42,773) (7,547) (1,494) (89,035)
Time-charter
hire expense (14,142) - - - (14,142)
Depreciation
and
amortization (29,720) (17,789) (2,736) (1,675) (51,920)
General and
administrative (6,172) (5,231) (11) (1,186) (12,600)
Write-down of
vessels (57,502) - - - (57,502)
Restructuring
charge (449) - - - (449)
----------------------------------------------------------------------------
(Loss) income
from vessel
operations (32,760) 8,115 3,835 2,474 (18,336)
----------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
CASH FLOW FROM VESSEL OPERATIONS FROM CONSOLIDATED VESSELS
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Consolidated Vessels
Cash flow from vessel operations from consolidated vessels represents income from vessel operations before depreciation and amortization expense, write-down of vessels and amortization of deferred gains, and includes the realized (losses) gains on the settlement of foreign exchange forward contracts, and cash flow from vessel operations relating to its discontinued operations and adjustments for direct financing leases to a cash basis. Cash flow from vessel operations is included because certain investors use this data to measure a company's financial performance. Cash flow from vessel operations is not required by GAAP and should not be considered as an alternative to net income (loss) or any other indicator of the Partnership's performance required by GAAP.
Three Months Ended September 30, 2014
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Income from
vessel
operations
(See Appendix
D) 32,937 26,331 779 2,494 62,541
Depreciation
and
amortization 27,727 18,186 2,232 1,614 49,759
Realized
(losses) gains
from the
settlements of
non-designated
foreign
exchange
forward
contracts (331) 53 - - (278)
Amortization of
non-cash
portion of
revenue
contracts - (3,212) - - (3,212)
Write-down of
vessel 4,759 - - - 4,759
Falcon Spirit
revenue
accounted for
as direct
financing
lease - - (1,104) - (1,104)
Falcon Spirit
cash flow from
time-charter
contracts - - 2,165 - 2,165
----------------------------------------------------------------------------
Cash flow from
vessel
operations
from
consolidated
vessels 65,092 41,358 4,072 4,108 114,630
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
-------------------------------------------------------------
(unaudited)
-------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment Total
----------------------------------------------------------------------------
(Loss) income
from vessel
operations
(See Appendix
D) (32,760) 8,115 3,835 2,474 (18,336)
Depreciation
and
amortization 29,720 17,789 2,736 1,675 51,920
Realized losses
from the
settlements of
non-designated
foreign
exchange
forward
contracts (326) (34) - - (360)
Amortization of
intangible and
non-cash
portion of
revenue
contracts - (3,247) - - (3,247)
Write-down of
vessels 57,502 - - - 57,502
Falcon Spirit
revenue
accounted for
as direct
financing
lease - - (1,280) - (1,280)
Falcon Spirit
cash flow from
time-charter
contracts - - 2,147 - 2,147
Cash flow from
discontinued
operations - - - (877) (877)
----------------------------------------------------------------------------
Cash flow from
vessel
operations
from
consolidated
vessels 54,136 22,623 7,438 3,272 87,469
----------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX F - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
CASH FLOW FROM VESSEL OPERATIONS FROM EQUITY ACCOUNTED VESSEL
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Equity Accounted Vessel
Cash flow from vessel operations from equity accounted vessel represents income from vessel operations before depreciation and amortization expense. Cash flow from equity accounted vessel represents the Partnership's proportionate share of cash flow from vessel operations from its equity-accounted vessel, the Cidade de Itajai FPSO unit. Cash flow from vessel operations from equity accounted vessel is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's equity accounted joint venture. Cash flow from vessel operations from equity accounted vessel is not required by GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership's performance required by GAAP.
Three Months Ended Three Months Ended
------------------------------------------------------
September September
30, 2014 30, 2013
------------------------------------------------------
(unaudited) (unaudited)
------------------------------------------------------
At Partnership's At Partnership's
100% 50% 100% 50%
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Voyage revenues 19,456 9,728 18,167 9,084
Vessel and other
operating expenses (8,367) (4,184) (7,480) (3,740)
Depreciation and
amortization (4,760) (2,380) (3,615) (1,807)
General and
administrative (76) (38) (984) (492)
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Income from vessel
operations of equity
accounted vessel 6,253 3,126 6,088 3,045
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Net interest expense (2,009) (1,005) (2,387) (1,194)
Realized and
unrealized gains
(losses) on
derivative
instruments 524 262 (1,742) (871)
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Total other items (1,485) (743) (4,129) (2,065)
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Net income / equity
income of equity
accounted vessel
before income tax
expense 4,768 2,383 1,959 980
Income tax recovery 204 103 439 219
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Net income / equity
income of equity
accounted vessel 4,972 2,486 2,398 1,199
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Income from vessel
operations 6,253 3,126 6,088 3,045
Depreciation and
amortization 4,760 2,380 3,615 1,807
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Cash flow from vessel
operations from
equity accounted
vessel 11,013 5,506 9,703 4,852
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FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the Partnership's growth projects, including new organic offshore projects and future acquisitions, and the impact of these projects on the Partnership's future distributable cash flows; the timing of newbuilding and conversion vessel deliveries and commencement of their respective time-charter contracts; the Partnership's acquisition of future Hi-Load projects and potential for improved features of new Hi-Load DP vessel designs; the impact on cash flow from the Hi-Load DP unit delay; the timing and purchase price of the Partnership's acquisition of six towing and anchor handling vessels; the timing and certainty of entering into charter contracts for the FAU newbuildings prior to their deliveries; the estimated cost of building or converting vessels or offshore units; the timing and certainty of the Partnership, through its joint venture with Odebrecht, achieving the final contract signing with Petrobras for the Libra FPSO project; the Partnership's potential acquisition of the Petrojarl Knarr FPSO, including the purchase price, the timing of completion of field installation and contract start-up for this FPSO unit, the timing and certainty of the Partnership completing the acquisition, and the consideration for the acquisition; and the potential for Teekay Corporation or third parties to offer additional vessels or projects to the Partnership and the Partnership agreeing to acquire such vessels or projects.
The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: vessel operations and oil production volumes; significant changes in oil prices; variations in expected levels of field maintenance; increased operating expenses; different-than-expected levels of oil production in the North Sea and Brazil offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion delays and cost overruns; failure by the Partnership to secure charter contracts for FAU newbuildings; changes in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact expected future growth; delays in the commencement of time-charters; the inability to successfully complete the operational testing of the Hi-Load DP unit and achieve final acceptance of the unit from Petrobras, including the impact on cash flow from delays; inability of Remora to develop innovations for future Hi-Load DP unit designs; failure of the Partnership to receive offers for additional vessels or offshore units from Teekay Corporation, Sevan, Remora or third parties; failure to develop new offshore projects with Odebrecht in Brazil; failure by the Partnership to complete the acquisition of the six towing and anchor handling vessels, including the transition of technical and commercial management of the vessels to ALP; failure by the Partnership's joint venture with Odebrecht to complete and sign the final contract with Petrobras for the Libra FPSO project; potential delays in the commencement of operations of the Petrojarl Knarr FPSO unit; failure to obtain required approvals by the Conflicts Committee of Teekay Offshore's general partner to approve the acquisition of vessels offered from Teekay Corporation, or third parties, including the Petrojarl Knarr FPSO offer; the Partnership's ability to raise adequate financing to purchase additional assets and complete organic growth projects; and other factors discussed in Teekay Offshore's filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2013. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
FOR FURTHER INFORMATION PLEASE CONTACT:
Teekay Offshore Partners L.P.
Investor Relations Enquiries
Ryan Hamilton
+1 (604) 609-6442
www.teekayoffshore.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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