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HAMILTON, BERMUDA--(Marketwired - Feb. 18, 2016) -
Highlights
-- Generated distributable cash flow of $67.0 million, or $0.62 per common
unit, in the fourth quarter of 2015 and $244.7 million, or $2.29 per
common unit, during 2015.
-- Generated cash flow from vessel operations of $172.9 million and $588.4
million in the fourth quarter and fiscal year of 2015, respectively,
increases of 38 percent and 25 percent from the same periods of the
prior year.
-- Declared fourth quarter 2015 cash distribution of $0.11 per common unit.
-- Completed the sale of two conventional tankers and agreed to sell the
remaining two conventional tankers for total gross proceeds of
approximately $130 million.
-- Total liquidity of approximately $283 million as at December 31, 2015.
Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership) TOO, today reported the Partnership's results for the quarter and year ended December 31, 2015. During the fourth quarter of 2015, the Partnership generated distributable cash flow(1) of $67.0 million, compared to $50.0 million in the same period of the prior year. The increase in distributable cash flow was primarily due to the acquisition of the Petrojarl Knarr (Knarr) floating production, storage and offloading (FPSO) unit in July 2015, the acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the commencement of the Arendal Spirit unit for maintenance and safety (UMS) charter contract in early-June 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO. These increases were partially offset by the expiration of two shuttle tanker contracts in the second quarter of 2015 and the sale of two conventional tankers, the SPT Explorer and Navigator Spirit, in the fourth quarter of 2015.
On January 20, 2016, the Partnership declared a cash distribution of $0.11 per unit for the quarter ended December 31, 2015. The cash distribution was paid on February 12, 2016 to all unitholders of record on February 5, 2016.
(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).
CEO Commentary
"Despite the challenging macro energy environment affecting our customers, the Partnership grew its cash flows during the fourth quarter and fiscal year 2015, highlighting the stability of our business which plays an integral role in our customers' oil production logistics chains," commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. "The growth was driven mostly by the delivery and acquisition of several offshore units during 2015, including our largest FPSO acquisition to date, the Knarr FPSO, the Arendal Spirit UMS and six long-distance towing and offshore installation vessels."
Mr. Evensen added "Teekay Offshore's fleet continues to operate with high uptime and fleet utilization, generating stable cash flow, supported by a diversified portfolio of long-term contracts with high quality counterparties."
"The decision in December to temporarily reduce Teekay Offshore's distributions was a difficult decision and was caused by the inability to access competitively priced capital in the current negative capital market environment and was not caused by a shortfall in the cash flows of our operations," Mr. Evensen continued, "We believe the reduction is in the best interests of long-term unitholders as the reallocation of a significant portion of our internally generated cash flows to fund our profitable growth projects that will deliver over the next several years will result in higher available distributable cash flow per unit."
"We are pleased to announce the sale of our four remaining non-core conventional tankers, further improving the Partnership's liquidity position," Mr. Evensen continued. "These asset sales take advantage of strong tanker asset prices and represent one of many ways that the Partnership is able to supplement its internally generated cash flows to fund our financing requirements."
Mr. Evensen added "Looking ahead to 2016, despite the sale of the conventional tankers and the anticipated redelivery of the Varg FPSO after operating on the Varg field for almost 18 years, the Partnership's cash flows are expected to increase compared to 2015 supported by high uptime and fleet utilization and the delivery of various growth projects in 2016, including the Petrojarl I FPSO project and the delivery of four newbuilding long-distance towing and offshore installation vessels. We remain focused on completing our existing growth pipeline and are now pivoting our business strategy to focus on the future redeployment of our existing assets onto new contracts instead of new organic growth projects, implementing various cost saving initiatives, and addressing our remaining funding needs."
Business Outlook for 2016 and 2017
The Partnership plans to host a conference call on Thursday, February 18, at 12:30 p.m. (ET) to discuss the results contained in this news release as well as its business outlook, which includes additional forecasted cash flows for 2016 and 2017. A copy of the Fourth Quarter 2015 Earnings and Business Outlook Presentation, which will be discussed during this conference call, is available at http://media3.marketwire.com/docs/1043411p.pdf.
Summary of Recent Events
Sale of Four Conventional Tankers
The Partnership completed the sale of two conventional tankers and has entered into an agreement to sell its remaining two conventional tankers for aggregate sales proceeds of approximately $130 million. The first two conventional tankers, the SPT Explorer and Navigator Spirit, were sold to Teekay Tankers Ltd. (Teekay Tankers) in mid-December 2015 and the two remaining conventional tankers, the Kilimanjaro Spirit and Fuji Spirit, are expected to be delivered to a third party in March 2016. After repaying existing debt secured by these assets and the novation of an existing $50 million revolving credit facility to Teekay Tankers, these transactions are expected to add approximately $60 million to the Partnership's liquidity position. As part of the sale of the Kilimanjaro Spirit and the Fuji Spirit, the Partnership has agreed to charter-in both vessels for a period of three-years at $23,000 per day and $22,750 per day, respectively. Both vessels are expected to operate on the spot tanker market in Teekay's Aframax RSA pool.
Termination of the Petrojarl Varg FPSO Contract
In November 2015, the Partnership received a termination notice for the Petrojarl Varg (Varg) FPSO charter contract from Repsol S.A. (Repsol), formerly Talisman Energy, based on a termination right that is specific to the Varg FPSO contract. Following discussions with Repsol, the Partnership currently expects the Varg FPSO to be redelivered to the Partnership in August 2016. The Partnership is currently pursuing various redeployment opportunities for the Varg FPSO, a unit which meets the strict Norwegian petroleum industry (NORSOK) standards.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $53.7 million for the quarter ended December 31, 2015, compared to $40.1 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 $9.8 million and $63.4 million for the quarters ended December 31, 2015 and 2014, 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 $43.9 million for the fourth quarter of 2015, compared to a net loss attributable to the partners of $23.3 million in the same period of the prior year. Net revenues(2) increased to $312.5 million for the fourth quarter of 2015, compared to $236.3 million in the same period of the prior year.
The Partnership reported adjusted net income attributable to the partners(1) of $165.7 million for the year ended December 31, 2015, compared to $123.8 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 $89.6 million and $116.7 million for the years ended December 31, 2015 and 2014, 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 $76.1 million for the year ended December 31, 2015, compared to $7.2 million in the same period of the prior year. Net revenues(2) increased to $1.1 billion for the year ended December 31, 2015, compared to $907.0 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three months and year ended December 31, 2015 increased from the same period in the prior year mainly due to the acquisition of the Knarr FPSO unit on July 1, 2015, the acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the Arendal Spirit UMS commencing its charter contract in early-June 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO. These increases were partially offset by a temporary shut-down on the Piranema Spirit FPSO for unscheduled repairs during the third quarter of 2015, the expiration of two shuttle tanker contracts in the second quarter of 2015, the sale of the Navion Svenita shuttle tanker in March 2015, and the sale of the SPT Explorer and Navigator Spirit conventional tankers during the fourth quarter of 2015.
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 Teekay Offshore's six segments: the Shuttle Tanker segment, the FPSO segment, the FSO segment, the Conventional Tanker segment, the Towage segment and the UMS segment (please refer to the "Teekay Offshore's Fleet" section of this release below and Appendices C through F for further details).
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Three Months Ended
December 31, 2015
(in thousands of
U.S. Dollars) (unaudited)
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Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
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Net revenues(2) 117,994 153,669 14,093 5,571 8,297 12,911 312,535
Vessel operating
expenses (33,906)(55,148) (6,603) (1,726) (4,763) (6,774)(108,920)
Time-charter
hire expense (15,112) - - - - - (15,112)
Depreciation and
amortization (25,666)(37,595) (2,584) (1,558) (2,874) (1,697) (71,974)
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CFVO from
consolidated
vessels(3) 63,223 83,761 8,679 3,690 2,753 5,732 167,838
CFVO from equity
accounted
vessels(4) - 5,091 - - - - 5,091
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Total CFVO(3)(4) 63,223 88,852 8,679 3,690 2,753 5,732 172,929
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Three Months Ended
December 31, 2014
(in thousands of
U.S. Dollars) (unaudited)
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Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
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Net revenues(2) 119,301 94,595 14,830 7,417 110 - 236,253
Vessel operating
expenses (40,386)(35,211) (7,275) (1,422) - - (84,294)
Time-charter
hire expense (7,618) - - - - - (7,618)
Depreciation and
amortization (28,300)(18,629) (3,059) (1,844) - - (51,832)
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CFVO from
consolidated
vessels(3) 60,713 47,439 7,453 5,498 (562) (203) 120,338
CFVO from equity
accounted
vessel(4) - 5,133 - - - - 5,133
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Total CFVO(3)(4) 60,713 52,572 7,453 5,498 (562) (203) 125,471
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(1) The Partnership acquired 100 percent of the outstanding shares of
Logitel Offshore Holding AS (Logitel) during the third quarter of 2014
and operations began in the second quarter of 2015.
(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 GAAP financial
measure.
(3) Cash flow from vessel operations (CFVO) from consolidated vessels
represents income (loss) from vessel operations before depreciation and
amortization expense, write-down and gain on sale of vessels, and
amortization of the non-cash portion of revenue contracts, and includes
the realized gains and losses on the settlement of foreign exchange
forward contracts and adjusts 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. CFVO should
not be considered as an alternative to net income, equity income or any
other indicator of the Partnership's performance required by GAAP.
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.
(4) CFVO from equity accounted vessels represents the Partnership's
proportionate share of CFVO from its equity-accounted vessels, the
Cidade de Itajai FPSO unit and the Libra FPSO conversion project.
Please see Appendix F for a description and reconciliation of CFVO from
equity accounted vessels (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 $63.2 million for the fourth quarter of 2015 compared to $60.7 million for the same period of the prior year, primarily due to the commencement of the shuttle tanker contract for the East Coast of Canada in June 2015, mobilization costs expensed on the HiLoad DP unit during the fourth quarter of 2014, and a reduction in operating expenses resulting from cost-saving initiatives and the depreciation of certain foreign currencies, partially offset by the sale of Navion Svenita in March 2015 and an increase in repair and crew training costs in the fourth quarter of 2015.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO segment (which also includes the results from two equity-accounted FPSO units), increased to $88.9 million for the fourth quarter of 2015 compared to $52.6 million for the same period of the prior year, primarily due to the acquisition of the Knarr FPSO unit from Teekay Corporation in July 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO, partially offset by a retroactive increase in charter rates for the Cidade de Rio das Ostras FPSO unit recorded in the fourth quarter of 2014 and higher repairs and maintenance on the Piranema Spirit FPSO unit in the fourth quarter of 2015.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO segment increased to $8.7 million for the fourth quarter of 2015, compared to $7.5 million for the same period of the prior year, primarily due to a decrease in management fees resulting from cost-saving initiatives.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment decreased to $3.7 million for the fourth quarter of 2015, compared to $5.5 million for the same period of the prior year, primarily due to net early termination fees paid to Teekay Corporation of $1.8 million relating to the charter contract terminations for the SPT Explorer, Navigator Spirit and the Fuji Spirit during the fourth quarter of 2015.
Towage Segment
Cash flow from vessel operations from the Partnership's Towage segment of $2.8 million for the fourth quarter of 2015, primarily relates to the acquisition of the six towage vessels during the first seven months of 2015.
UMS Segment
Cash flow from vessel operations from the Partnership's UMS segment increased to $5.7 million for the fourth quarter of 2015, primarily related to the Arendal Spirit UMS, which commenced its charter contract with Petrobras in June 2015.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of February 1, 2016.
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Number of Vessels
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Committed
Newbuildings /
Chartered-in Conversions /
Owned Vessels Vessels Upgrade Total
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Shuttle Tanker
Segment 30(i) 3 3(ii) 36
FPSO Segment 6(iii) - 2(iv) 8
FSO Segment 6 - 1(v) 7
Towage Segment 6 - 4(vi) 10
Conventional Segment 2 - - 2
UMS Segment 1 - 2(vii) 3
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Total 51 3 12 66
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(i) Includes six shuttle tankers in which Teekay Offshore's ownership
interest is 50 percent, one shuttle tanker in which Teekay Offshore's
ownership interest is 67 percent and one Hiload DP unit.
(ii) Includes three Suezmax-size, DP2 shuttle tanker newbuildings scheduled
to be delivered in the fourth quarter of 2017 through the first half
of 2018 for employment under the East Coast of Canada contract.
(iii) Includes one FPSO unit, the Cidade de Itajai, in which Teekay
Offshore's ownership interest is 50 percent.
(iv) Consists of the Petrojarl I FPSO upgrade project and Teekay Offshore's
50 percent ownership interest in the Libra FPSO conversion project.
(v) Consists of the Randgrid shuttle tanker, which is being converted into
an FSO unit for use with the Gina Krog FSO project.
(vi) Consists of four long-distance towing and offshore installation vessel
newbuildings scheduled to deliver in 2016.
(vii) Consists of two UMS newbuildings currently scheduled to deliver in the
fourth quarter of 2016 and the second quarter of 2019.
Liquidity Update
As of December 31, 2015, the Partnership had total liquidity of $282.7 million (comprised of $258.5 million in cash and cash equivalents and $24.2 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, February 18, 2016 at 12:30 pm (ET) to discuss the results for the fourth quarter and fiscal year of 2015 as well as its business outlook. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
-- By dialing 1-866-738-4015 or 416-204-9524, if outside North America, and
quoting conference ID code 4410522.
-- 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 Fourth Quarter and Fiscal Year 2015 Earnings and Business Outlook 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 Thursday, March 3, 2016. 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 4410522.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry, primarily focusing on the deepwater offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) with consolidated assets of approximately $5.7 billion, comprised of 66 offshore assets, including shuttle tankers, floating production, storage and offloading (FPSO) units, floating storage and offtake (FSO) units, units for maintenance and safety (UMS), long-distance towing and offshore installation vessels and conventional tankers. The majority of Teekay Offshore's fleet is employed on medium-term, stable contracts.
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)
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Three Months Ended
December 31, September 30, December 31,
2015 2015 2014
(unaudited) (unaudited) (unaudited)
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Revenues 339,142 314,054 260,461
Voyage expenses (26,607) (28,166) (24,208)
Vessel operating expenses (108,920) (95,172) (84,294)
Time-charter hire expense (15,112) (18,893) (7,618)
Depreciation and amortization (71,974) (72,827) (51,832)
General and administrative (2) (14,190) (27,321) (20,575)
(Write-down) and gain on sale of
vessels(3) (55,645) - 3,121
Restructuring (charge) recovery (276) (157) -
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Income from vessel operations 46,418 71,518 75,055
Interest expense (33,013) (33,645) (24,982)
Interest income 203 153 207
Realized and unrealized gains
(losses) derivative instruments
(4) 16,478 (77,102) (59,495)
Equity income (loss) 913 (7,052) 1,764
Foreign currency exchange loss(5) (827) (10,257) (11,590)
Other income (loss) - net 825 (373) 597
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Income (loss) before income tax
expense 30,997 (56,758) (18,444)
Income tax recovery (expense) 15,703 5,465 734
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Net income (loss) 46,700 (51,293) (17,710)
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Non-controlling interests in net
income 2,829 3,446 5,547
Dropdown Predecessor's interest in
net income(1) - - -
Preferred unitholders' interest in
net income 10,750 10,349 2,719
General Partner's interest in net
income 662 5,738 3,643
Limited partners' interest in net
income (loss) 32,459 (70,826) (29,619)
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Weighted-average number of common
units:
- basic 107,016,572 102,009,737 88,159,388
- diluted 107,047,391 102,009,737 88,159,388
Total number of common units
outstanding at end of period 107,026,979 107,003,043 92,386,383
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Year Ended
December 31, 2015(1) December 31, 2014
(unaudited) (unaudited)
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Revenues 1,229,413 1,019,539
Voyage expenses (98,006) (112,540)
Vessel operating expenses (378,480) (352,209)
Time-charter hire expense (51,750) (31,090)
Depreciation and amortization (274,599) (198,553)
General and administrative (2) (72,613) (67,516)
(Write-down) and gain on sale of
vessels(3) (69,998) (1,638)
Restructuring (charge) recovery (568) 225
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Income from vessel operations 283,399 256,218
Interest expense (122,838) (88,381)
Interest income 633 719
Realized and unrealized gains
(losses) derivative instruments
(4) (73,704) (143,703)
Equity income (loss) 7,672 10,341
Foreign currency exchange loss(5) (17,467) (16,140)
Other income (loss) - net 1,091 781
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Income (loss) before income tax
expense 78,786 19,835
Income tax recovery (expense) 21,357 (2,179)
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Net income (loss) 100,143 17,656
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Non-controlling interests in net
income 13,911 10,503
Dropdown Predecessor's interest in
net income(1) 10,100 -
Preferred unitholders' interest in
net income 28,609 10,875
General Partner's interest in net
income 16,317 15,658
Limited partners' interest in net
income (loss) 31,206 (19,380)
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Weighted-average number of common
units:
- basic 98,507,732 86,212,290
- diluted 98,602,412 86,212,290
Total number of common units
outstanding at end of period 107,026,979 92,386,383
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(1) The Partnership has recast its financial results to include the
financial results of the Knarr FPSO unit relating to the period prior
to its acquisition by the Partnership from Teekay Corporation when it
was under common control, which pre-acquisition results are referred to
in this release as the Dropdown Predecessor. In accordance with GAAP,
business acquisitions of entities under common control that have begun
operations are required to be accounted for in a manner whereby the
Partnership's financial statements are retroactively adjusted to
include the historical results of the acquired vessels from the date
the vessels were originally under the control of Teekay Corporation.
For these purposes, the Knarr FPSO unit was under common control by
Teekay Corporation from March 9, 2015 to July 1, 2015, when it was sold
to the Partnership.
(2) General and administrative expenses for the three months ended
September 30, 2015 and the year ended December 31, 2015 include one-
time business development fees of $13.9 million paid to Teekay
Corporation relating to the purchases of the Knarr FPSO unit, six
towage vessels and the Arendal Spirit UMS.
(3) The write-down for the three months ended December 31, 2015 includes
the impairment of two of the Partnership's 2000s-built conventional
tankers and five of the Partnership's 1990s-built shuttle tankers to
their estimated fair value, using appraised values. The write-down of
the two conventional tankers was the result of the expected sale of the
vessels and the vessels were classified as held for sale on the
Partnership's consolidated balance sheet as at December 31, 2015. The
write-down of the five shuttle tankers, which have an average age of
17.5 years, was the result of changes in our expectations of their
future opportunities, primarily due to their advanced age. While we
expect four of the five vessels to continue to actively trade as
shuttle tankers over the near-term and the fifth vessel to actively
trade in the conventional tanker market, we anticipate fewer
opportunities for alternative usage and increased age discrimination
over time.
(4) Realized losses on derivative instruments relate to amounts the
Partnership actually paid 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:
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Three Months Ended Year Ended
December September December December December
31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
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Realized losses relating
to:
Interest rate swaps (15,363) (15,857) (13,729) (60,741) (55,588)
Interest rate swap
termination - (10,876) - (10,876) -
Foreign currency forward
contracts (3,909) (4,064) (1,331) (13,799) (1,912)
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(19,272) (30,797) (15,060) (85,416) (57,500)
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Unrealized gains (losses)
relating to:
Interest rate swaps 34,255 (43,453) (35,625) 11,952 (75,777)
Foreign currency forward
contracts 1,495 (2,852) (8,810) (240) (10,426)
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35,750 (46,305) (44,435) 11,712 (86,203)
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Total realized and
unrealized gains (losses)
on derivative instruments 16,478 (77,102) (59,495) (73,704) (143,703)
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(5) Foreign currency exchange loss includes realized losses relating to the
amounts the Partnership paid 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 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 currency
exchange loss also includes unrealized losses relating to the change in
fair value of such derivative instruments, partially offset by
unrealized gains on the revaluation of the NOK bonds, as detailed in
the table below:
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Three Months Ended Year Ended
December September December December December
31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
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Realized losses on cross
currency swaps (2,967) (2,840) (1,473) (10,140) (1,992)
Unrealized losses on cross
currency swaps (9,409) (32,649) (68,455) (61,734) (93,953)
Unrealized gains on
revaluation of NOK bonds 12,615 28,722 62,127 61,217 85,989
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Teekay Offshore Partners L.P.
Consolidated Balance Sheets
(in thousands of U.S. Dollars)
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As at As at As at
December 31, September 30, December 31,
2015 2015 2014
(unaudited) (unaudited) (unaudited)
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ASSETS
Current
Cash and cash equivalents 258,473 251,058 252,138
Restricted cash - current 51,431 40,241 4,704
Accounts receivable 153,662 154,965 103,665
Vessels held for sale 55,450 5,000 -
Net investments in direct
financing leases - current 5,936 5,781 4,987
Prepaid expenses 34,027 42,450 30,211
Due from affiliates 81,271 44,829 44,225
Advances to joint venture - - 5,225
Other current assets 20,490 20,284 4,626
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Total current assets 660,740 564,608 449,781
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Restricted cash - long-term 9,089 9,109 42,056
Vessels and equipment
At cost, less accumulated
depreciation 4,348,535 4,579,915 3,010,689
Advances on newbuilding
contracts and conversion
costs 395,084 327,286 172,776
Net investments in direct
financing leases 11,535 13,038 17,471
Investment in equity
accounted joint ventures 77,647 70,458 54,955
Deferred tax assets 30,050 15,046 5,959
Other assets 82,341 86,035 35,005
Goodwill 129,145 129,145 129,145
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Total assets 5,744,166 5,794,640 3,917,837
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LIABILITIES AND EQUITY
Current
Accounts payable 15,899 36,865 15,064
Accrued liabilities 91,065 100,506 68,013
Deferred revenues 54,378 50,220 25,669
Due to affiliates 304,583 296,683 108,941
Current portion of
derivative instruments 201,456 124,414 85,318
Current portion of long-term
debt 470,589 453,651 249,671
Current portion of in-
process revenue contracts 12,779 12,779 12,744
----------------------------------------------------------------------------
Total current liabilities 1,150,749 1,075,118 565,420
----------------------------------------------------------------------------
Long-term debt 2,893,285 2,864,036 2,158,925
Derivative instruments 221,329 324,051 257,754
In-process revenue contracts 63,026 66,238 75,805
Other long-term liabilities 192,258 214,481 44,238
----------------------------------------------------------------------------
Total liabilities 4,520,647 4,543,924 3,102,142
----------------------------------------------------------------------------
Redeemable non-controlling
interest 3,173 5,574 12,842
Convertible Preferred Units
(10.4 million and nil units
issued and outstanding at
December 31, 2015 and
December 31, 2014,
respectively) 252,498 254,724 -
Equity
Limited partners - common
units (107.0 million and
92.4 million units issued
and outstanding at December
31, 2015 and December 31,
2014, respectively) 629,264 641,320 589,165
Limited partners - preferred
units (11.0 million and 6.0
million units issued and
outstanding at December 31,
2015 and December 31, 2014,
respectively) 266,925 266,924 144,800
General Partner 17,608 25,039 21,038
Non-controlling interests 53,355 58,220 47,850
Accumulated other
comprehensive income (loss) 696 (1,085) -
----------------------------------------------------------------------------
Total equity 967,848 990,418 802,853
----------------------------------------------------------------------------
Total liabilities and total
equity 5,744,166 5,794,640 3,917,837
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Offshore Partners L.P.
Consolidated Statements of Cash Flows
(in thousands of U.S. Dollars)
----------------------------------------------------------------------------
Year Ended
December 31, December 31,
2015 2014
(unaudited)(1) (unaudited)
----------------------------------------------------------------------------
Cash and cash equivalents provided by (used
for)
OPERATING ACTIVITIES
Net income 100,143 17,656
Non-cash items:
Unrealized loss on derivative instruments 51,072 180,156
Equity income, net of dividends received
of $7,843 (2014 - $16,803) 171 6,462
Depreciation and amortization 274,599 198,553
Write-down and (gain) on sale of vessels 69,998 1,638
Deferred income tax (recovery) expense (23,007) 889
Amortization of in-process revenue
contracts (12,745) (12,744)
Foreign currency exchange gain and other (101,853) (84,719)
Change in non-cash working capital items
related to operating activities 25,903 (111,484)
Expenditures for dry docking (13,060) (36,221)
----------------------------------------------------------------------------
Net operating cash flow 371,221 160,186
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from long-term debt 785,577 1,350,096
Scheduled repayments of long-term debt (341,837) (804,704)
Prepayments of long-term debt (123,606) (418,625)
Debt issuance costs (22,587) (15,555)
Purchase of Teekay Knarr AS and Knarr L.L.C
from Teekay Corporation (net of cash
acquired of $14.2 million) (112,710) -
Increase in restricted cash (13,760) (46,760)
Proceeds from issuance of common units 9,674 186,353
Proceeds from issuance of preferred units 375,000 -
Expenses relating to equity offerings (4,459) (228)
Cash distributions paid by the Partnership (257,900) (214,656)
Settlement of contingent consideration
liability (3,303) -
Cash distributions paid by subsidiaries to
non-controlling interests (23,575) (27,939)
Equity contribution from joint venture
partners 5,500 27,267
Purchase of Voyageur LLC from Teekay
Corporation - 6,181
Other 1,124 974
----------------------------------------------------------------------------
Net financing cash flow 273,138 42,404
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment,
including advances on newbuilding contracts
and conversion costs (664,667) (172,169)
Proceeds from sale of vessels and equipment 8,918 13,364
Repayment (advances) from (to) joint venture
partners and equity accounted joint
ventures 5,225 (5,225)
Direct financing lease payments received 4,987 5,097
Investment in equity accounted joint
ventures (22,855) (12,413)
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
Proceeds from sale of SPT Explorer L.L.C.
and Navigator Spirit L.L.C. 30,368 -
----------------------------------------------------------------------------
Net investing cash flow (638,024) (169,578)
----------------------------------------------------------------------------
Increase in cash and cash equivalents 6,335 33,012
Cash and cash equivalents, beginning of the
year 252,138 219,126
----------------------------------------------------------------------------
Cash and cash equivalents, end of the year 258,473 252,138
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In accordance with GAAP, the Consolidated Statement of Cash Flows for
the year ended December 31, 2015 includes the cash flows relating to
the Knarr FPSO unit Dropdown Predecessor for the period from March 9,
2015 to July 1, 2015, 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 Year Ended
December December December December
31, 2015 31, 2014 31, 2015 31, 2014
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Net income (loss) - GAAP
basis 46,700 (17,710) 100,143 17,656
Adjustments:
Net income attributable to
non-controlling interests (2,829) (5,547) (13,911) (10,503)
Net income attributable to
Dropdown Predecessor - - (10,100) -
----------------------------------------------------------------------------
Net income (loss)
attributable to the
partners 43,871 (23,257) 76,132 7,153
----------------------------------------------------------------------------
Add (subtract) specific
items affecting net income
(loss):
Foreign currency exchange
(gains) losses(1) (2,140) 10,117 5,231 14,148
Unrealized (gains) losses
on derivative
instruments(2) (34,886) 45,147 (5,844) 86,615
Realized loss on swap
termination - - 10,876 -
Write-down and (gain) on
sale of vessels(3) 55,645 (3,121) 69,998 1,638
Deferred income tax
recovery relating to
Norwegian tax structure(4) (15,455) - (21,289) -
Pre-operational costs(5) 3,890 - 10,474 -
Business development fees
and other(6) 2,323 8,833 18,029 10,812
Non-controlling interests'
share of items above(7) 437 2,387 2,088 3,480
----------------------------------------------------------------------------
Total adjustments 9,814 63,363 89,563 116,693
----------------------------------------------------------------------------
Adjusted net income
attributable to the
partners(8) 53,685 40,106 165,695 123,846
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Foreign currency exchange (gains) 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 for outstanding Norwegian bonds of
the Partnership and excludes the realized gains and losses relating to
the cross currency swaps.
(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
swaps within the Cidade de Itajai FPSO and Libra FPSO equity accounted
joint ventures.
(3) Please refer to footnote (3) of the summary consolidated statements of
income (loss) about the write-down of vessels for the three months
ended December 31, 2015. Results for the year ended December 31, 2015
also include the write-down of two of the Partnership's 1990s-built
shuttle tankers and a gain on the sale of a 1997-built shuttle tanker,
the Navion Svenita. The write-down of one of these shuttle tankers was
a result of the expected sale of the vessel and the vessel was
classified as held for sale as at December 31, 2015. This vessel was
subsequently sold in January 2016 for gross proceeds of $5.1 million.
The write-down of the second shuttle tanker was a result of a change in
the operating plan of the vessel.
(4) Reflects the increase in the deferred income tax assets within the
Partnership's Norwegian tax group.
(5) Reflects the realized losses on foreign currency forward contracts
relating to upgrade costs on the Petrojarl I FPSO unit, depreciation
and amortization expense relating to the Petrojarl I FPSO unit while
undergoing conversion, and costs associated to the delivery deferral of
the Stavanger Spirit UMS.
(6) Other items for the three months ended December 31, 2015 include net
early termination fees paid to Teekay Corporation of $1.8 million, a
restructuring charge of $0.3 million relating to a seafarer redundancy
accrual in the Partnership's shuttle tanker fleet and a $0.3 million
write-down of inventory assets. Other items for the year ended December
31, 2015 include one-time business development fees of $13.9 million
paid to Teekay Corporation relating to the purchases of the Knarr FPSO
unit, six towage vessels, and the Arendal Spirit UMS, the ineffective
portion of losses on interest rate swaps designated and qualifying as
cash flow hedges of $1.1 million, a $0.7 million write-down of
inventory assets, and a restructuring charge of $0.6 million relating
to seafarer redundancy in the Partnership's shuttle tanker fleet. Other
items for the three months and year ended December 31, 2014 include
$4.7 million of mobilization costs related to the HiLoad DP unit, fees
of $2.1 million paid to Teekay Corporation associated with the
Partnership's acquisition of the Petrojarl I FPSO unit, and a $2.0
million and $1.4 million charge, respectively, related to pension
adjustments. Other items for the year ended December 31, 2014 also
include fees of $2.6 million associated with the Partnership's
acquisition of ALP.
(7) 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.
(8) For the year ended December 31, 2014, adjusted net income attributable
to the partners excludes $3.5 million of indemnification payments from
Teekay Corporation relating to the loss of revenues and certain
unrecovered vessel operating expenses for the Voyageur Spirit FPSO.
Teekay Offshore Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measure
Distributable Cash Flow
(in thousands of U.S. Dollars)
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, distributions on our preferred units, vessel and business acquisition costs, estimated maintenance capital expenditures, write-down and gains on sale of vessels, unrealized gains and losses from derivatives, realized losses on termination of interest rate swaps, non-cash income taxes 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 and years ended December 31, 2015 and December 31, 2014, respectively.
----------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Net income (loss) 46,700 (17,710) 100,143 17,656
Net income attributable to
Dropdown Predecessor - - (10,100) -
----------------------------------------------------------------------------
Net income attributable to
the partners and non-
controlling interests' 46,700 (17,710) 90,043 17,656
Depreciation and
amortization 71,974 51,832 252,269 198,553
Vessel and business
acquisition costs(1) - - 13,920 -
Realized loss on termination
of interest rate swap - - 10,876 -
Equity income from joint
ventures (913) (1,764) (7,672) (10,341)
Distributions relating to
equity financing of
newbuildings and conversion
costs 3,034 2,824 19,210 8,393
Partnership's share of
equity accounted joint
venture's distributable
cash flow net of estimated
maintenance capital
expenditures 2,754 2,525 16,985 14,451
Write-down and (gain on
sale) of vessels 55,645 (3,121) 69,998 1,638
Distributions relating to
preferred units (10,525) (2,719) (28,608) (10,876)
Estimated maintenance
capital expenditures(2) (39,718) (28,240) (137,194) (114,338)
Unrealized (gains) losses on
derivative instruments(3) (35,750) 44,435 (9,976) 86,203
Foreign currency exchange
and other, net (21,484) 8,560 (22,510) 11,342
----------------------------------------------------------------------------
Distributable cash flow
before non-controlling
interests 71,717 56,622 267,341 206,155
Non-controlling interests'
share of DCF (4,718) (6,667) (22,617) (19,842)
----------------------------------------------------------------------------
Distributable Cash Flow 66,999 49,955 244,724 186,313
Amount attributable to the
General Partner (240) (5,262) (19,174) (19,891)
----------------------------------------------------------------------------
Limited partners'
Distributable Cash Flow 66,759 44,693 225,550 166,422
Weighted-average number of
common units outstanding 107,016,572 88,159,388 98,507,732 86,212,290
----------------------------------------------------------------------------
Distributable Cash Flow per
limited partner unit 0.62 0.51 2.29 1.93
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Vessel and business acquisition costs relate to business development
fees of $13.9 million paid to Teekay Corporation relating to the
purchases of the Knarr FPSO unit, the six towage vessels and the
Arendal Spirit UMS.
(2) Estimated maintenance capital expenditures relating to the
Partnership's equity accounted joint venture for the three months ended
December 31, 2015 and 2014 were $1.0 million and $1.0 million,
respectively, and for the years ended December 31, 2015 and 2014 were
$4.2 million and $4.2 million, respectively.
(3) 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)
Net revenues represents revenues less voyage expenses, 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 December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
----------------------------------------------------------------------------
Revenues 139,422 153,669 14,506 5,917 12,717 12,911 339,142
Voyage expenses (21,428) - (413) (346) (4,420) - (26,607)
----------------------------------------------------------------------------
Net revenues 117,994 153,669 14,093 5,571 8,297 12,911 312,535
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
----------------------------------------------------------------------------
Revenues 142,065 94,595 15,120 8,527 154 - 260,461
Voyage expenses (22,764) - (290) (1,110) (44) - (24,208)
----------------------------------------------------------------------------
Net revenues 119,301 94,595 14,830 7,417 110 - 236,253
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
----------------------------------------------------------------------------
Revenues 541,792 531,554 57,391 30,230 40,112 28,334 1,229,413
Voyage expenses (82,777) - (851) (2,326)(12,052) - (98,006)
----------------------------------------------------------------------------
Net revenues 459,015 531,554 56,540 27,904 28,060 28,334 1,131,407
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional UMS
Tanker FPSO FSO Tanker Towage Segment
Segment Segment Segment Segment Segment (1) Total
----------------------------------------------------------------------------
Revenues 577,064 354,518 53,868 33,566 523 - 1,019,539
Voyage expenses (105,562) - (1,500) (5,373) (105) - (112,540)
----------------------------------------------------------------------------
Net revenues 471,502 354,518 52,368 28,193 418 - 906,999
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Partnership acquired 100% of the outstanding shares of Logitel
during the third quarter of 2014 and operations began in the second
quarter of 2015.
Teekay Offshore Partners L.P.
Appendix D - Supplemental Segment Information
(in thousands of U.S. Dollars)
----------------------------------------------------------------------------
Three Months Ended December 31, 2015
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional
Tanker FPSO FSO Tanker Towage UMS
Segment Segment Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Net revenues
(See Appendix
C) 117,994 153,669 14,093 5,571 8,297 12,911 312,535
Vessel operating
expenses (33,906)(55,148) (6,603) (1,726) (4,763) (6,774)(108,920)
Time-charter
hire expense (15,112) - - - - - (15,112)
Depreciation and
amortization (25,666)(37,595) (2,584) (1,558) (2,874) (1,697) (71,974)
General and
administrative (3,535) (9,155) (159) (155) (781) (405) (14,190)
Write-down on
sale of vessel (51,248) - - (3,897) - (500) (55,645)
Restructuring
recovery (276) - - - - - (276)
----------------------------------------------------------------------------
Income (loss)
from vessel
operations (11,749) 51,771 4,747 (1,765) (121) 3,535 46,418
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Conven-
Shuttle tional
Tanker FPSO FSO Tanker Towage UMS
Segment Segment Segment Segment Segment Segment Total
----------------------------------------------------------------------------
Net revenues
(See Appendix
C) 119,301 94,595 14,830 7,417 110 - 236,253
Vessel operating
expenses (40,386)(35,211) (7,275) (1,422) - - (84,294)
Time-charter
hire expense (7,618) - - - - - (7,618)
Depreciation and
amortization (28,300)(18,629) (3,059) (1,844) - - (51,832)
General and
administrative (9,470) (8,516) (1,217) (497) (672) (203) (20,575)
Gain on sale of
vessel 3,121 - - - - - 3,121
----------------------------------------------------------------------------
Income (loss)
from vessel
operations 36,648 32,239 3,279 3,654 (562) (203) 75,055
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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)
Cash flow from vessel operations from consolidated vessels represents (loss) income from vessel operations before depreciation and amortization expense, write-down and gain on sale of vessels, and amortization of the non-cash portion of revenue contracts, and includes the realized gains and losses on the settlement of foreign exchange forward contracts and adjusts 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
December 31,
2015
(unaudited)
----------------------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment
----------------------------------------------------------------------------
Income (loss) from vessel operations
(See Appendix D) (11,749) 51,771 4,747 (1,765)
Depreciation and amortization 25,666 37,595 2,584 1,558
Realized losses from the
settlements of non-designated
foreign exchange forward contracts (1,942) (1,564) - -
Amortization of non-cash portion of
revenue contracts - (4,041) - -
Write-down of vessels 51,248 - - 3,897
Falcon Spirit revenue accounted for
as direct financing lease - - (836) -
Falcon Spirit cash flow from
time-charter contracts - - 2,184 -
----------------------------------------------------------------------------
Cash flow from vessel operations
from consolidated vessels 63,223 83,761 8,679 3,690
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, December 31,
2015 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
Towage UMS
Segment Segment Total Total
----------------------------------------------------------------------------
Income (loss) from vessel operations
(See Appendix D) (121) 3,535 46,418 260,620
Depreciation and amortization 2,874 1,697 71,974 252,269
Realized losses from the
settlements of non-designated
foreign exchange forward contracts - - (3,506) (12,409)
Amortization of non-cash portion of
revenue contracts - - (4,041) (14,401)
Write-down of vessels - 500 55,645 69,998
Falcon Spirit revenue accounted for
as direct financing lease - - (836) (3,658)
Falcon Spirit cash flow from
time-charter contracts - - 2,184 8,644
----------------------------------------------------------------------------
Cash flow from vessel operations
from consolidated vessels 2,753 5,732 167,838 561,063
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended
December, 31
2014
(unaudited)
----------------------------------------------------------------------------
Shuttle Conventional
Tanker FPSO FSO Tanker
Segment Segment Segment Segment
----------------------------------------------------------------------------
Income (loss) from vessel operations
(See Appendix D) 36,648 32,239 3,279 3,654
Depreciation and amortization 28,300 18,629 3,059 1,844
Realized losses from the settlements
of non-designated foreign exchange
forward contracts (1,114) (217) - -
Amortization of non-cash portion of
revenue contracts - (3,212) - -
Write-down and (gain) on sale of
vessels (3,121) - - -
Falcon Spirit revenue accounted for
as direct financing lease - - (1,054) -
Falcon Spirit cash flow from time-
charter contracts - - 2,169 -
----------------------------------------------------------------------------
Cash flow from (used for) vessel
operations from consolidated
vessels 60,713 47,439 7,453 5,498
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Year Ended
December, 31 December, 31
2014 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
Towage UMS
Segment Segment Total Total
----------------------------------------------------------------------------
Income (loss) from vessel operations
(See Appendix D) (562) (203) 75,055 256,218
Depreciation and amortization - - 51,832 198,553
Realized losses from the settlements
of non-designated foreign exchange
forward contracts - - (1,331) (1,910)
Amortization of non-cash portion of
revenue contracts - - (3,212) (12,743)
Write-down and (gain) on sale of
vessels - - (3,121) 1,638
Falcon Spirit revenue accounted for
as direct financing lease - - (1,054) (4,483)
Falcon Spirit cash flow from time-
charter contracts - - 2,169 8,618
----------------------------------------------------------------------------
Cash flow from (used for) vessel
operations from consolidated
vessels (562) (203) 120,338 445,891
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Offshore Partners L.P.
Appendix F - Reconciliation of Non-GAAP Financial Measure
Cash Flow From Vessel Operations From Equity Accounted Vessels
(in thousands of U.S. Dollars)
Cash flow from vessel operations from equity accounted vessels 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 vessels, the Cidade de Itajai FPSO unit and the Libra FPSO conversion project. Cash flow from vessel operations from equity accounted vessels 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 ventures. Cash flow from vessel operations from equity accounted vessels 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
December 31, 2015 December 31, 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
At Partnership's At Partnership's
100% 50% 100% 50%
----------------------------------------------------------------------------
Voyage revenues 19,254 9,627 19,166 9,583
Vessel and other operating
expenses (9,071) (4,536) (9,018) (4,509)
Depreciation and
amortization (3,901) (1,951) (2,226) (1,113)
General and administrative - - 118 59
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 6,282 3,140 8,040 4,020
----------------------------------------------------------------------------
Net interest expense (1,720) (860) (1,884) (942)
Realized and unrealized
losses on derivative
instruments(1) (2,810) (1,405) (2,746) (1,373)
----------------------------------------------------------------------------
Total other items (4,530) (2,265) (2,746) (2,315)
----------------------------------------------------------------------------
Net income / equity income
of equity accounted vessel
before income tax recovery 1,752 875 3,410 1,705
Income tax recovery 76 38 118 59
----------------------------------------------------------------------------
Net income / equity income
of equity accounted vessels 1,828 913 3,528 1,764
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 6,282 3,140 8,040 4,020
Depreciation and
amortization 3,901 1,951 2,226 1,113
----------------------------------------------------------------------------
Cash flow from vessel
operations from equity
accounted vessels 10,183 5,091 10,266 5,133
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Realized and unrealized losses on derivative instruments for the three
months ended December 31, 2015 and 2014 include total unrealized losses
of $1.7 million ($0.9 million at the Partnership's 50% share) and
unrealized losses of $1.4 million ($0.7 million at the Partnership's
50% share), respectively, related to interest rate swaps for the Libra
FPSO conversion project and the Cidade de Itajai FPSO unit.
----------------------------------------------------------------------------
Year Ended Year Ended
December 31, 2015 December 31, 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
At Partnership's At Partnership's
100% 50% 100% 50%
----------------------------------------------------------------------------
Voyage revenues 82,831 41,416 82,845 41,423
Vessel and other operating
expenses (28,188) (14,095) (31,424) (15,712)
Depreciation and
amortization (16,711) (8,356) (16,172) (8,086)
General and administrative (2) (1) 21 11
Loss on sale of asset (579) (290) - -
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Income from vessel
operations of equity
accounted vessels 37,351 18,674 35,270 17,636
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Net interest expense (8,468) (4,234) (7,997) (3,999)
Realized and unrealized
losses on derivative
instruments(1) (13,214) (6,607) (6,656) (3,328)
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Total other items (21,682) (10,841) (14,653) (7,327)
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Net income / equity income
of equity accounted vessel
before income tax (expense)
recovery 15,669 7,833 20,617 10,309
Income tax (expense)
recovery (321) (161) 63 32
----------------------------------------------------------------------------
Net income / equity income
of equity accounted vessels 15,348 7,672 20,680 10,341
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 37,351 18,674 35,270 17,636
Depreciation and
amortization 16,711 8,356 16,172 8,086
Loss on sale of asset 579 290 - -
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Cash flow from vessel
operations from equity
accounted vessels 54,641 27,320 51,442 25,722
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(1) Realized and unrealized losses on derivative instruments for the year
ended December 31, 2015 and 2014 include total unrealized losses of
$8.3 million ($4.1 million at the Partnership's 50% share) and
unrealized losses of $0.8 million ($0.4 million at the Partnership's
50% share), respectively, related to interest rate swaps for the Libra
FPSO conversion project and the Cidade de Itajai FPSO unit.
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 use of internally generated cash flows to contribute to the funding of growth projects; the impact of cash distribution reductions on the Partnership's financial position; the potential for future cash distribution changes; the pending sale of the Kilimanjaro Spirit and Fuji Spirit, including the impact on future liquidity; the stability and growth of the Partnership's future cash flows; the impact of growth projects on the Partnership's future distributable cash flow per unit; the expected redelivery date and potential redeployment of the Varg FPSO; the timing of newbuilding, conversion and upgrade vessel or offshore unit deliveries and commencement of their respective charter contracts; and the Partnership's focus on the future redeployment of existing assets onto new contracts instead of new organic growth projects, implementing various cost saving initiatives, and addressing remaining funding needs. 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, Brazil and East Coast of Canada offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion and upgrade delays and cost overruns; 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 charter contracts; potential delays in the sale of the Kilimanjaro Spirit and Fuji Spirit; the Partnership's ability to raise adequate financing for existing growth projects, refinance future debt maturities, and other financing requirements; failure by the Partnership to secure a contract for the Varg FPSO; 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, 2014 and Form 6-K for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. 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:
Investor Relations Enquiries:
Ryan Hamilton
+1 (604) 609-6442
www.teekayoffshore.com
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Posted In: Press Releases
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