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HAMILTON, BERMUDA--(Marketwired - May 15, 2014) -
Highlights
-- Generated distributable cash flow of $51.1 million in the first quarter
of 2014, an increase of 22 percent from the first quarter of 2013.
-- Declared first quarter 2014 cash distribution of $0.5384 per common
unit.
-- The Voyageur Spirit FPSO received its certificate of final acceptance
from the charterer effective from February 22, 2014.
-- In March 2014, acquired ALP Maritime Services and ordered four long-haul
towing and anchor handling vessel newbuildings for an aggregate cost of
approximately $261 million.
-- In May 2014, entered into a letter of intent to acquire Logitel
Offshore, a company focused on the high-end floating accommodation
market utilizing the Sevan cylindrical hull design.
-- Liquidity of approximately $349 million as at March 31, 2014.
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 ended March 31, 2014. During the first quarter of 2014, the Partnership generated distributable cash flow(1) of $51.1 million, compared to $41.8 million in the same period of the prior year.
On April 9, 2014, a cash distribution of $0.5384 per common unit was declared for the quarter ended March 31, 2014. The cash distribution was paid on May 9, 2014 to all unitholders of record on April 25, 2014.
"The Partnership's growing portfolio of long-term fixed-rate contracts continued to generate stable cash flows during the first quarter," commented Peter Evensen, Teekay Offshore GP LLC's Chief Executive Officer. "Further to the update last quarter, we are now pleased to report that in April 2014, the Partnership received the certificate of final acceptance for the Voyageur Spirit FPSO from the charterer effective February 22, 2014."
"We are excited about the letter of intent the Partnership recently signed to acquire Logitel Offshore, which we believe will provide the Partnership with an attractive and complementary new channel for growth," Mr. Evensen continued. "We continue to see strong growth fundamentals in the Brazil and North Sea offshore markets, which are our core markets. We believe that the combination of our strong operational platform and access to capital, with Logitel's innovative accommodation rig design using Sevan's cylindrical hull platform, will enable us to provide our customers with an attractive and reliable alternative in this growing segment."
Mr. Evensen added, "Looking ahead, we expect that the acquisitions of Logitel and ALP, which diversify the Partnership's investment portfolio and expand its presence in the offshore oil production value-chain, will further complement Teekay Offshore's existing pipeline of growth projects, including the Remora HiLoad DP unit and two FSO conversion projects delivering between 2014 and 2017. In addition, there are up to five FPSO units that may become available for purchase from our sponsor, Teekay Corporation, over the near to medium term. The largest of these, the Knarr FPSO newbuilding, remains on track for field installation and start-up in the fourth quarter of 2014."
(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).
Summary of Recent Events
Proposed Acquisition of Logitel
In May 2014, Teekay Offshore entered into a letter of intent to acquire Logitel Offshore Holdings Ltd. (Logitel), a Norway-based company focused on the high-end floating accommodation market. Logitel owns two floating accommodation units (FAUs), which are based on the Sevan Marine ASA (Sevan) cylindrical hull design, currently under construction at the COSCO (Nantong) Shipyard (COSCO) in China, and has options with COSCO to order up to an additional six FAUs. The first committed FAU has secured a three-year fixed-rate charter contract, plus extension options, with Petroleo Brasileiro SA (Petrobras) in Brazil and is scheduled for delivery in early-2015. The Partnership expects to secure a charter contract for the second FAU prior to its scheduled delivery in late-2015. The agreement with COSCO for the committed FAUs includes a favorable payment schedule, with the majority of the purchase price due upon delivery. The Partnership intends to finance the Logitel acquisition and the initial newbuilding payments through its existing liquidity and expects to secure long-term debt financing for the units prior to their scheduled deliveries. The Partnership expects the proposed acquisition to be finalized in the third quarter of 2014.
Acquisition of ALP and Newbuilding Order
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 dynamic positioning capability, for a fully built-up cost of approximately $261 million, which includes the cost of acquiring ALP. 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 floating production, storage and offloading (FPSO) units, floating liquefied natural gas (FLNG) units and floating drill rigs. The Partnership intends to continue financing the newbuilding installments through its existing liquidity and expects to secure long-term debt financing for these vessels prior to their scheduled deliveries in 2016.
Voyageur Spirit FPSO Update
On August 27, 2013, repairs to the defective gas compressor on the Voyageur Spirit FPSO were completed and the unit achieved full production capacity. Since that time, the Partnership had been receiving full rate under the charter contract as though the unit was producing at full capacity either directly from the charterer or through the indemnification arrangement with Teekay Corporation. On April 4, 2014, the Partnership received the certificate of final acceptance from the charterer, which declared the unit on-hire retroactive to February 22, 2014.
Up to February 22, 2014, the Partnership has been indemnified by Teekay Corporation for certain lost revenues and certain unrecovered vessel operating expenses relating to the full operation of the Voyageur Spirit FPSO. Any indemnification amounts from Teekay Corporation to the Partnership have been effectively treated as a reduction in the purchase price paid to Teekay Corporation for the Voyageur Spirit FPSO by Teekay Offshore. During the first quarter of 2014, the Partnership's indemnification effectively resulted in a $3.5 million reduction in the purchase price. Any future compensation received by the Partnership from the charterer related to the indemnification period will reduce the amount of Teekay Corporation's indemnification to Teekay Offshore. Although the Partnership's reported revenue is lower as a result of any off-hire and reported vessel operating expenses are higher as a result of certain unrecovered operating costs relating to the Voyageur Spirit FPSO, there is no net impact on the Partnership's cash flow as a result of Teekay Corporation's indemnification. For the period from the date of acquisition to February 22, 2014, Teekay Corporation indemnified the Partnership for a total of $38.4 million relating to the Voyageur Spirit FPSO.
Dampier Spirit FSO Contract Extension
In May 2014, the Partnership secured a 10-year contract extension with Apache Energy for the 1987-built Dampier Spirit floating storage and offtake (FSO) unit, which operates on the Stag oil field offshore Western Australia. As part of the extension, the FSO unit is expected to enter into drydock during the second quarter of 2014 for capital upgrades with an expected total cost of approximately $11 million. Under the new contract, the unit is expected to earn approximately $5.7 million in annual cash flow from vessel operations(1).
(1) Cash flow from vessel operations (CFVO) from consolidated vessels represents income from vessel operations before depreciation and amortization expense, write-down of vessels and amortization of deferred gains, 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 adjusting 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.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of May 1, 2014.
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Number of Vessels
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Committed
Owned Chartered- Newbuildings / Conversion
Vessels in Vessels Conversions Candidates Total
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Shuttle Tanker Segment 31(i) 2 1(ii) 1(iii) 35
FPSO Segment 5(iv) - - - 5
Conventional Tanker
Segment 4 - - - 4
Towage Segment - - 4(v) - 4
FSO Segment 5 - 1(vi) - 6
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Total 46 2 5 1 54
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i. Includes six shuttle tankers in which Teekay Offshore's ownership
interest is 50 percent and three 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 an FSO
unit for the Gina Krog FSO project after its current shuttle tanker
charter contract expires in 2015.
ii. Includes one HiLoad DP unit expected to commence operations under a 10-
year contract in the second quarter of 2014 once operational testing has
been completed.
iii.Includes one shuttle tanker which is currently in lay-up and is a
candidate for conversion to an offshore asset.
iv. Includes one FPSO unit in which Teekay Offshore's ownership interest is
50 percent.
v. Includes four long-haul towing and anchor handling vessel newbuildings
scheduled to deliver in 2016.
vi. Includes the Navion Clipper shuttle tanker, which is currently being
converted into an FSO unit and is expected to commence operations under
a 10-year charter contract in the third quarter of 2014 with Salamander
Energy plc.
Other Future Growth Opportunities
Pursuant to an omnibus agreement that the Partnership entered into in connection with our initial public offering in December 2006, Teekay Corporation is obligated to offer to the Partnership its interest in certain shuttle tankers, FSO units and FPSO units 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.
Shuttle Tankers (including HiLoad DP Units)
In September 2013, the Partnership acquired a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS (Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $55 million, including modification costs. The HiLoad DP unit is currently undergoing operational testing, which is expected to be completed during the second quarter of 2014. Upon completion of the testing, the unit is expected to commence operations under a ten-year time-charter contract with Petroleo Brasileiro SA (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 HiLoad DP projects developed by Remora. In July 2013, Remora was awarded a contract by BG E&P Brasil Ltd. to perform a front end engineering and design (FEED) study to develop the next generation of HiLoad 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 the capability to maneuver vessels larger than Suezmax conventional tankers.
FPSO Units
In June 2011, Teekay Corporation entered into a contract with BG Norge Limited 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 is being constructed by Samsung Heavy Industries for a fully built-up cost of approximately $1 billion. Pursuant to the omnibus agreement, Teekay Corporation is obligated to offer to the Partnership its interest in the Knarr FPSO project at Teekay Corporation's fully built-up cost within a year after the commencement of the charter, which commencement is expected to occur in the fourth quarter of 2014.
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 FPSO, the Petrojarl Banff FPSO and the Petrojarl 1 FPSO, 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 Oil & Gas S.A. (a member of the Odebrecht group) (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 became a 50 percent partner in the Cidade de Itajai FPSO project and Teekay Corporation is currently working with Odebrecht on other FPSO project opportunities that, if awarded, may result in offers to the Partnership to acquire Teekay Corporation's interests in such projects, pursuant to the omnibus agreement.
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 that will be converted from the 1995-built shuttle tanker, Randgrid, which the Partnership currently owns through a 67 percent-owned subsidiary. The FSO conversion project is expected to be completed for a net capital cost of approximately $230 million, including the cost of acquiring the remaining 33 percent ownership interest in the Randgrid shuttle tanker. Following its scheduled completion in early-2017, the newly converted FSO unit will commence operations under a three-year time-charter contract to Statoil, which also includes 12 additional one-year extension options.
In May 2013, the Partnership entered into a ten-year charter contract, plus extension options, with Salamander Energy plc (Salamander) to supply an FSO unit in Asia. The Partnership is converting its 1993-built shuttle tanker, the Navion Clipper, into an FSO unit for an estimated fully built-up cost of approximately $70 million (including reimbursable installation costs). The unit is expected to commence its contract with Salamander in the third quarter of 2014.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $31.2 million for the quarter ended March 31, 2014, compared to $18.9 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 $23.8 million and increasing net income by $1.3 million for the quarters ended March 31, 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 $7.3 million for the first quarter of 2014, compared to $20.2 million in the same period of the prior year. Net revenues(2) increased to $225.8 million for the first quarter of 2014, compared to $189.2 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three months ended March 31, 2014 increased from the same period in the prior year, mainly due to the acquisition of the Voyageur Spirit and a 50 percent interest in the Cidade de Itajai FPSO units in the second quarter of 2013 and the commencement of the time-charters with a subsidiary of BG Group plc for four newbuilding shuttle tankers (BG Shuttle Tankers) in June, August and November 2013 and January 2014. These increases were partially offset by the sale and lay-up of older shuttle and conventional tankers during 2013 as their related charter contracts expired or terminated.
As a result of the delay in receiving the certificate of final acceptance from the charterer for the Voyageur Spirit FPSO, the Partnership has not recorded all the revenues associated with operations of this FPSO unit from its acquisition on May 2, 2013 through to March 31, 2014. During this period, the unit also incurred certain operating expenses associated with ensuring the Voyageur Spirit FPSO was capable of operating at full capacity. For the three months ended March 31, 2014, the Partnership received $3.5 million in indemnification payments from Teekay Corporation, which are recorded in Partners' Equity as an adjustment to the Partnership's purchase price of the Voyageur Spirit FPSO unit. As a result of the indemnification from Teekay Corporation, there is no net impact on the Partnership's cash flows relating to the Voyageur Spirit FPSO.
For accounting purposes, the Partnership is required to recognize, through the consolidated statements of income, 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 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 four 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
March 31, 2014
(unaudited)
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Shuttle Conventional
(in thousands of Tanker FPSO Tanker
U.S. dollars) Segment Segment FSO Segment Segment Total (3)
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Net revenues(1) 121,474 83,137 14,266 6,903 225,780
Vessel operating
expenses 40,406 40,391 5,873 1,460 88,130
Time-charter hire
expense 11,412 - - - 11,412
Depreciation and
amortization 27,281 17,903 1,693 1,611 48,488
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CFVO from
consolidated
vessels(2) 61,901 33,846 8,492 4,910 108,149
CFVO from equity
accounted
vessel(4) - 7,947 - - 7,947
Total CFVO(2)(4) 61,901 41,793 8,492 4,910 116,096
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Three Months Ended
March 31, 2013
(unaudited)
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Shuttle Conventional
(in thousands of Tanker FPSO Tanker
U.S. dollars) Segment Segment FSO Segment Segment Total
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Net revenues(1) 108,056 57,685 15,625 7,798 189,164
Vessel operating
expenses 37,967 29,501 8,285 1,571 77,324
Time-charter hire
expense 14,777 - - - 14,777
Depreciation and
amortization 27,605 12,752 2,582 1,571 44,510
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CFVO from
consolidated
vessels(2) 48,919 22,256 7,358 15,520 94,053
CFVO from equity
accounted
vessel(4) - - - - -
Total CFVO(2) 48,919 22,256 7,358 15,520 94,053
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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, write-down of vessels and amortization of 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. The total column includes a $1.0 million fee associated with the
acquisition of ALP in CFVO from consolidated vessels and Total CFVO.
This fee was recognized in general and administrative expenses in the
consolidated statement of income for the three months ended March 31,
2014. The towage segment has not been disaggregated as its results are
not material other than this fee.
4. 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 $61.9 million in the first quarter of 2014 compared to $48.9 million for the same period of the prior year, primarily due to the delivery of the four BG Shuttle Tanker newbuildings in June, August and November 2013 and January 2014, partially offset by the expiration of time-charter out contracts relating to three existing shuttle tankers during the third quarter of 2013 and the first quarter of 2014.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO segment, including one equity-accounted FPSO unit, increased to $41.8 million for the first quarter of 2014 compared to $22.3 million for the same period of the prior year, primarily due to additional cash flows related to the acquisition of the Voyageur Spirit and a 50 percent interest in the Cidade de Itajai FPSO units in the second quarter of 2013. Cash flow from vessel operations for the first quarter of 2014 excludes the $3.5 million Voyageur Spirit FPSO indemnification payment from Teekay Corporation.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO segment increased to $8.5 million in the first quarter of 2014 compared to $7.4 million for the same period of the prior year, primarily due to costs associated with front-end engineering and design studies completed in 2013 in relation to certain FSO project tenders.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker segment decreased to $4.9 million in the first quarter of 2014 compared to $15.5 million for the same period of the prior year primarily due to the sale of three conventional tankers since the first quarter of 2013.
Liquidity
In January 2014, the Partnership issued NOK 1,000 million in senior unsecured bonds in the Norwegian bond market that mature in January 2019. The aggregate principal amount of the bonds was equivalent to USD 162 million and all interest and principal payments have been swapped into U.S. dollars at a fixed rate of 6.28 percent. The net proceeds from the bond offering were used for general partnership purposes. The Partnership is applying to list the bonds on the Oslo Stock Exchange.
As of March 31, 2014, the Partnership had total liquidity of $348.5 million, which consisted of $223.0 million in cash and cash equivalents and $125.5 million in undrawn revolving credit facilities.
2013 Audited Financial Statements
Teekay Offshore Partners L.P. filed its 2013 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (SEC) on April 29, 2014. Copies are available on Teekay Offshore's website, under "Investors - Financials", at www.teekayoffshore.com. Unitholders may request a printed copy of this annual report, including the complete audited financial statements free of charge by contacting Teekay Offshore's Investor Relations.
Conference Call
The Partnership also plans to host a conference call on Friday, May 16, 2014 at noon (ET) to discuss the results for the first 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 1-866-322-8032 or 416-640-3406, if outside North America, and
quoting conference ID code 2061356.
-- 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 First 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, May 23, 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 2061356.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production and storage services 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 35 shuttle tankers (including two chartered-in vessels and one HiLoad Dynamic Positioning (DP) unit), five floating production, storage and offloading (FPSO) units, six floating storage and offtake (FSO) units (including one committed FSO conversion unit), four long-haul towing and anchor handling vessel newbuildings and four conventional oil tankers. The majority of Teekay Offshore's fleet is employed on long-term, stable contracts. In addition, Teekay Offshore also has rights to participate in certain other FPSO, shuttle tanker and HiLoad 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".
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands of U.S. dollars, except unit data)
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Three Months Ended
March 31, December March 31,
2014 31, 2013 2013
(unaudited) (unaudited) (unaudited)
REVENUES 259,234 260,654 212,112
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OPERATING EXPENSES
Voyage expenses 33,454 29,173 22,948
Vessel operating expenses 88,130 91,250 77,324
Time-charter hire expense 11,412 13,670 14,777
Depreciation and amortization 48,488 52,311 44,510
General and administrative 14,849 11,066 10,390
Write-down of vessels - 19,280 -
Restructuring charge(1) 559 104 659
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Total operating expenses 196,892 216,854 170,608
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Income from vessel operations 62,342 43,800 41,504
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OTHER ITEMS
Interest expense (18,920) (18,403) (11,628)
Interest income 177 434 195
Realized and unrealized (losses) gains
on derivative instruments (2) (36,632) 9,948 (1,077)
Equity income 3,703 3,934 -
Foreign exchange losses(3) (775) (2,465) (3,638)
Loss on bond repurchase(4) - - (1,759)
Other income - net 390 260 314
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Total other items (52,057) (6,292) (17,593)
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Income from continuing operations before
income tax (expense) recovery 10,285 37,508 23,911
Income tax (expense) recovery (1,263) (1,896) 234
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Net income from continuing operations 9,022 35,612 24,145
Net loss from discontinued operations(5) - - (2,175)
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Net income 9,022 35,612 21,970
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Non-controlling interests in net income 1,679 (5,657) 1,777
Preferred unitholders' interest in net
income 2,719 2,719 -
General Partner's interest in net income 3,943 4,621 3,073
Limited partners' interest in net income 681 33,929 17,120
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Weighted-average number of common units
- basic 85,455,292 83,949,362 80,105,408
Weighted-average number of common units
- diluted 85,480,352 83,981,522 80,106,741
Total number of common units outstanding
at end of period 85,468,145 83,452,079 80,105,408
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1. Restructuring charges for the three months ended March 31, 2014 and
December 31, 2013 each relate to the reflagging of a shuttle tanker. In
addition, restructuring charges for the three months ended March 31,
2013 relate to the reorganization of the Partnership's marine operations
to create better alignment with its shuttle tanker business unit and a
lower-cost organization.
2. Realized (losses) gains on derivative instruments relate to amounts the
Partnership actually paid or received to settle derivative instruments,
and the unrealized (losses) gains on derivative instruments relate to
the change in fair value of such derivative instruments, as detailed in
the table below:
Three Months Ended
March 31, December March 31,
2014 31, 2013 2013
Realized (losses) gains relating to:
Interest rate swaps (14,063) (15,018) (14,623)
Foreign currency forward contract (497) (253) 353
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(14,560) (15,271) (14,270)
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Unrealized (losses) gains relating to:
Interest rate swaps (24,108) 25,073 14,971
Foreign currency forward contracts 2,036 146 (1,778)
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(22,072) 25,219 13,193
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Total realized and unrealized (losses)
gains
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on derivative instruments (36,632) 9,948 (1,077)
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3. Foreign exchange losses include realized gains relating to the amounts
the Partnership received to settle the Partnership's 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 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 unsecured bonds in 2014 maturing
in 2019. Foreign exchange losses also include unrealized gains (losses)
relating to the change in fair value of such derivative instruments,
partially offset by unrealized (losses) gains on the revaluation of the
NOK bonds, as detailed in the table below:
Three Months Ended
December 31,
March 31, 2014 2013 March 31, 2013
Realized gain on partial
termination of cross-currency
swap - - 6,800
Realized foreign exchange loss
on partial repurchase of NOK
bonds - - (6,573)
Realized gains on cross-
currency swaps 16 210 725
Unrealized gains (losses) on
cross-currency swaps 7,575 (4,534) (25,502)
Unrealized (losses) gains on
revaluation of NOK bonds (9,130) 2,983 23,996
4. Loss on bond repurchase for the quarter ended December 31, 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.
5. 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.
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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
March 31, December 31,
2014 2013
(unaudited) (unaudited)
ASSETS
Current
Cash and cash equivalents 222,990 219,126
Accounts receivable 169,021 176,265
Net investments in direct financing leases -
current 4,830 5,104
Prepaid expenses 36,525 31,675
Due from affiliates 19,675 15,202
Current portion of derivative instruments 1,546 500
Other current assets 3,384 3,051
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Total current assets 457,971 450,923
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Vessels and equipment
At cost, less accumulated depreciation 3,067,880 3,089,582
Advances on newbuilding contracts 46,369 -
Investment in equity accounted joint venture 55,824 52,120
Net investments in direct financing leases 21,305 22,463
Derivative instruments 12,168 10,323
Deferred income tax 7,981 7,854
Other assets 37,307 35,272
Intangible assets - net 9,429 10,436
Goodwill 129,145 127,113
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Total assets 3,845,379 3,806,086
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LIABILITIES AND EQUITY
Current
Accounts payable 18,518 15,753
Accrued liabilities 134,756 138,156
Deferred revenues 24,437 29,075
Due to affiliates 80,183 121,864
Current portion of long-term debt 748,055 806,009
Current portion of derivative instruments 55,165 47,944
Current portion of in-process revenue contracts 12,744 12,744
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Total current liabilities 1,073,858 1,171,545
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Long-term debt 1,730,873 1,562,967
Derivative instruments 131,302 121,135
In-process revenue contracts 85,407 88,550
Other long-term liabilities 23,480 23,984
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Total liabilities 3,044,920 2,968,181
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Redeemable non-controlling interest 15,911 16,564
Limited partners - common units (85.5 million and
85.5 million units issued and outstanding at
March 31, 2014 and December 31, 2013,
respectively) 579,830 621,002
Limited partners - preferred units (6.0 million
and 6.0 million units issued and outstanding at
March 31, 2014 and December 31, 2013,
respectively) 144,800 144,800
General Partner 20,399 21,242
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Partners' equity 745,029 787,044
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Non-controlling interests 39,519 34,297
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Total equity 784,548 821,341
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Total liabilities and total equity 3,845,379 3,806,086
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TEEKAY OFFSHORE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
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Three Months Ended
March 31, 2014 March 31, 2013
(unaudited) (unaudited)
Cash and cash equivalents provided by (used
for)
OPERATING ACTIVITIES
Net income 9,022 21,970
Non-cash items:
Unrealized loss on derivative instruments 14,497 12,368
Equity income (3,703) -
Depreciation and amortization 48,488 45,349
Write-down and loss on sale of vessels - 11,247
Deferred income tax expense (recovery) 10 (108)
Amortization of in-process revenue contracts (3,142) (3,142)
Foreign currency exchange (gain) loss and
other 8,629 (23,004)
Change in non-cash working capital items
related to operating activities (49,017) (17,361)
Expenditures for dry docking (5,212) (972)
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Net operating cash flow 19,572 46,347
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FINANCING ACTIVITIES
Proceeds from long-term debt 208,821 234,986
Scheduled repayments of long-term debt (37,999) (23,019)
Prepayments of long-term debt (70,000) (90,352)
Debt issuance costs (2,250) (5,091)
Indemnification on Voyageur Spirit FPSO from
Teekay Corporation 3,474 -
Realized gain on cross currency swap - 6,800
Cash distributions paid by the Partnership (57,204) (44,209)
Other 7,111 (158)
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Net financing cash flow 51,953 78,957
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INVESTING ACTIVITIES
Expenditures for vessels and equipment (66,772) (23,785)
Proceeds from sale of vessels and equipment - 13,250
Prepayment of purchase of Voyageur Spirit FPSO - (150,000)
Direct financing lease payments received 1,433 1,693
Acquisition of ALP Maritime Services B.V. (net
of cash acquired of $0.3 million) (2,322) -
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Net investing cash flow (67,661) (158,842)
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Increase (decrease) in cash and cash
equivalents 3,864 (33,538)
Cash and cash equivalents, beginning of the
period 219,126 206,339
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Cash and cash equivalents, beginning of the
period 222,990 172,801
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars)
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----------------------------------------------------------------------------
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 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
March 31, 2014 March 31, 2013
(unaudited) (unaudited)
Net income - GAAP basis 9,022 21,970
Adjustments:
Net income attributable to non-controlling
interests (1,679) (1,777)
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Net income attributable to the partners 7,343 20,193
Add (subtract) specific items affecting net
income :
Foreign exchange losses (1) 791 4,365
Unrealized losses (gains) on derivative
instruments (2) 21,921 (13,193)
Components of discontinued operations (3) - 4,447
Restructuring charges and other (4) 922 821
Loss on bond repurchase (5) - 1,759
Non-controlling interests' share of items
above (6) 199 470
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Total adjustments 23,833 (1,331)
----------------------------------------------------------------------------
Adjusted net income attributable to the
partners 31,176 18,862
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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 exclude the realized gains and losses relating to the cross
currency swaps for outstanding Norwegian bonds of the Partnership.
2. Reflects the unrealized losses (gains) 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.
3. Related to components of net loss from discontinued operations. The
results for the three months ended March 31, 2013 include a termination
fee of $6.8 million received from Teekay Corporation upon the early
termination of the Poul Spirit conventional tanker time-charter contract
in March 2013, and the write-down of the Poul Spirit conventional tanker
of $11.2 million to its estimated fair value.
4. The three months ended March 31, 2014 includes $0.6 million of
restructuring charges relating to the reflagging of a vessel and a $1.0
million fee associated with the acquisition of ALP, partially offset by
a seafarer pension credit of $0.7 million. The three months ended March
31, 2013 includes $0.7 million in restructuring charges relating to the
reorganization of the Partnership's shuttle tanker marine operations
resulting in a lower cost organization.
5. Loss on bond repurchase for the three months ended March 31, 2013
relates to the repurchase of NOK 388.5 million of the Partnership's
existing NOK 600 million bond issue at a premium in January 2013.
6. Items affecting net income include items from the Partnership's
consolidated non-wholly-owned subsidiaries. The specific items affecting
net income 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 listed above" in the table above is the cumulative amount of the
non-controlling interests' proportionate share of items listed in the
table.
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
DISTRIBUTABLE CASH FLOW
(in thousands of U.S. dollars)
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Description of Non-GAAP Financial Measure - Distributable Cash Flow (DCF)
Distributable cash flow represents net income 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 or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net income for the quarters ended March 31, 2014 and March 31, 2013, respectively.
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Three Months Ended
March 31, 2014 March 31, 2013
(unaudited) (unaudited)
----------------------------------------------------------------------------
Net income 9,022 21,970
Add (subtract):
Depreciation and amortization 48,488 44,510
Unrealized losses (gains) on derivative
instruments (1) 22,072 (13,193)
Partnership's share of equity accounted
joint venture's distributable cash flow
before estimated maintenance capital
expenditures 5,907 -
Distributions relating to equity financing
of newbuildings 1,707 2,459
Distributions relating to preferred units (2,719) -
Loss on bond repurchase - 1,759
Equity income from joint venture (3,703) -
Estimated maintenance capital expenditures
(2) (29,924) (24,620)
Indemnification from Teekay Corporation
relating to the Voyageur Spirit FPSO (2) 3,474 -
Non-cash items in discontinued operations
(3) - 12,086
Foreign exchange and other, net 1,106 2,598
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Distributable Cash Flow before Non-
Controlling Interests 55,430 47,569
Non-controlling interests' share of DCF (4,370) (5,813)
----------------------------------------------------------------------------
Distributable Cash Flow 51,060 41,756
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1. Derivative instruments include interest rate swaps and foreign exchange
forward contracts.
2. Indemnification of the loss of revenues and certain unrecovered vessel
operating expenses from the Voyageur Spirit FPSO is effectively treated
as a reduction to estimated maintenance capital expenditures in the
first quarter of 2014, since the indemnification amount received from
Teekay Corporation is effectively treated as a reduction to the purchase
price of the Voyageur Spirit FPSO.
3. Includes depreciation and loss on write-down of vessel included in
discontinued operations.
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
NET REVENUES
(in thousands of U.S. dollars)
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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 March 31, 2014
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
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Revenues 153,180 83,137 14,289 8,628 259,234
Voyage expenses 31,706 - 23 1,725 33,454
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Net revenues 121,474 83,137 14,266 6,903 225,780
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Three Months Ended March 31, 2013
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
----------------------------------------------------------------------------
Revenues 130,350 57,685 15,140 8,937 212,112
Voyage expenses
(recoveries) 22,294 - (485) 1,139 22,948
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Net revenues 108,056 57,685 15,625 7,798 189,164
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX D - SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended March 31, 2014
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
----------------------------------------------------------------------------
Net revenues (See
Appendix C) 121,474 83,137 14,266 6,903 225,780
Vessel operating
expenses 40,406 40,391 5,873 1,460 88,130
Time-charter hire
expense 11,412 - - - 11,412
Depreciation and
amortization 27,281 17,903 1,693 1,611 48,488
General and
administrative 6,699 5,758 859 533 13,849
Acquisition fee (1) - - - - 1,000
Restructuring charge 559 - - - 559
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Income from vessel
operations 35,117 19,085 5,841 3,299 62,342
----------------------------------------------------------------------------
(1) The towage segment has not been disaggregated as its results are not
material other than a $1.0 million fee associated with the acquisition of
ALP. This fee was recognized in general and administrative expenses in the
consolidated statement of income for the three months ended March 31, 2014.
Three Months Ended March 31, 2013
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
----------------------------------------------------------------------------
Net revenues (See
Appendix C) 108,056 57,685 15,625 7,798 189,164
Vessel operating
expenses 37,967 29,501 8,285 1,571 77,324
Time-charter hire
expense 14,777 - - - 14,777
Depreciation and
amortization 27,605 12,752 2,582 1,571 44,510
General and
administrative 5,889 3,062 766 673 10,390
Restructuring charge 659 - - - 659
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Income from vessel
operations 21,159 12,370 3,992 3,983 41,504
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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 or any other indicator of the Partnership's performance required by GAAP.
Three Months Ended March 31, 2014
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
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Income from vessel
operations (See
Appendix D) (1) 35,117 19,085 5,841 3,299 62,342
Depreciation and
amortization 27,281 17,903 1,693 1,611 48,488
Realized losses from
the settlements of
non-designated
foreign exchange
forward contracts (497) - - - (497)
Amortization of non-
cash portion of
revenue contracts - (3,142) - - (3,142)
Falcon Spirit
revenue accounted
for as direct
financing lease - - (1,184) - (1,184)
Falcon Spirit cash
flow from time-
charter contracts - - 2,142 - 2,142
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Cash flow from
vessel operations
from
consolidated vessels 61,901 33,846 8,492 4,910 108,149
----------------------------------------------------------------------------
(1) The total column includes a $1.0 million fee associated with the
acquisition of ALP in income from vessel operations. This fee was
recognized in general and administrative expenses in the consolidated
statement of income for the three months ended March 31, 2014. The towage
segment has not been disaggregated as its results are not material other
than this fee.
Three Months Ended March 31, 2013
(unaudited)
Shuttle Conventional
Tanker FPSO Tanker
Segment Segment FSO Segment Segment Total
----------------------------------------------------------------------------
Income from vessel
operations (See
Appendix D) 21,159 12,370 3,992 3,983 41,504
Depreciation and
amortization 27,605 12,752 2,582 1,571 44,510
Unrealized losses from
the change in fair
value of designated
foreign exchange
forward contracts 59 - - - 59
Realized gains from
the settlements of
non-designated
foreign exchange
forward contracts 96 257 - - 353
Amortization of
intangible and non-
cash portion of
revenue contracts - (3,123) - - (3,123)
Falcon Spirit revenue
accounted for as
direct financing
lease - - (1,339) - (1,339)
Falcon Spirit cash
flow from time-
charter contracts - - 2,123 - 2,123
Cash flow from
discontinued
operations - - - 9,966 9,966
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Cash flow from vessel
operations from
consolidated vessels 48,919 22,256 7,358 15,520 94,053
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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)
----------------------------------------------------------------------------
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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
March 31, 2014
(unaudited)
At Partnership's
100% 50%
----------------------------------------------------------------------------
Voyage revenues 23,385 11,693
Vessel and other operating expenses 7,471 3,735
Depreciation and amortization 4,466 2,233
General and administrative 21 11
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Income from vessel operations of equity
accounted vessel 11,427 5,714
----------------------------------------------------------------------------
Interest expense (1,735) (868)
Realized and unrealized losses on derivative
instruments (1,788) (894)
Foreign currency exchange loss (475) (238)
----------------------------------------------------------------------------
Total other items (3,998) (2,000)
----------------------------------------------------------------------------
Net income / equity income of equity accounted
vessel before income tax expense 7,429 3,714
Income tax expense (22) (11)
----------------------------------------------------------------------------
Net income / equity income of equity accounted
vessel 7,407 3,703
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations 11,427 5,714
Depreciation and amortization 4,466 2,233
----------------------------------------------------------------------------
Cash flow from vessel operations from equity
accounted vessel 15,893 7,947
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FORWARD LOOKING STATEMENTS
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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 fundamentals in the offshore industry; future growth opportunities, including the Partnership's ability to successfully bid for new offshore projects or to grow organically; future increases in the Partnership's distributable cash flows; the results of proposed projects; the timing of new and converted vessel deliveries and commencement of their time charter contracts; the potential for the Partnership to acquire future HiLoad projects and improved features of new HiLoad DP vessel designs; the timing and certainty of completion of the Partnership's acquisition of Logitel; the effect of the Logitel acquisition on the Partnership's future cash flows and growth opportunities; the timing and certainty of entering into long-term financing for the FAU newbuildings prior to their deliveries; the timing and certainty of securing a charter contract for the second FAU newbuilding prior to its delivery; the estimated cost of building or converting vessels or offshore units; the effect of the Dampier Spirit FSO contract extension on the Partnership's cash flow from vessel operations; 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, including the timing and certainty of the acquisition of the Knarr FPSO.
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 to complete the Partnership's acquisition of Logitel; failure by the Partnership to secure financing on the two FAU newbuildings and secure a charter contract for the second FAU newbuilding; change in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact the expected future growth in the floating accommodation and services rig market; delays in the commencement of time-charters; the inability to successfully complete the operational testing of the HiLoad DP unit; actual results of the new HiLoad DP unit designs; failure of Teekay Corporation to offer to the Partnership additional vessels or of Sevan, Remora or Odebrecht to develop new vessels or projects; potential delays in the construction of the Knarr FPSO and/or commencement of operations under its charter contract; 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; the Partnership's ability to raise adequate financing to purchase additional assets; 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
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