Highlights
Teekay Offshore GP LLC (TOO GP), the general partner of Teekay
Offshore Partners L.P. (Teekay Offshore or the Partnership)
(NYSE:TOO), today reported the Partnership’s results for the
quarter and year ended December 31, 2018.
|
Consolidated Financial Summary |
|
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2018 |
2018 |
2017 |
2018 |
2017 |
(in thousands of U.S. Dollars, except per unit
data) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
Revenues |
445,213 |
|
327,658 |
|
295,728 |
|
1,416,424 |
|
1,110,284 |
|
Income (loss) from
vessel operations |
162,545 |
|
61,713 |
|
51,026 |
|
111,737 |
|
(116,005 |
) |
Net income (loss) |
67,842 |
|
(39,355 |
) |
16,037 |
|
(123,945 |
) |
(299,442 |
) |
Limited partners'
interest in net income (loss) per common unit |
0.14 |
|
(0.11 |
) |
0.02 |
|
(0.36 |
) |
(1.45 |
) |
|
|
|
|
|
|
NON-GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
Adjusted EBITDA
(1) |
289,548 |
|
172,328 |
142,651 |
|
782,521 |
|
522,394 |
|
Adjusted net income
attributable to the partners and preferred unitholders (1) |
130,463 |
|
11,560 |
11,329 |
|
149,587 |
|
31,089 |
|
Limited partners'
interest in adjusted net income (loss) per common unit (1) |
0.30 |
|
0.01 |
|
0.01 |
|
0.29 |
|
0.04 |
|
|
(1) These are non-GAAP financial measures. Please
refer to "Definitions and Non-GAAP Financial Measures" and the
Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used in
this release to the most directly comparable financial measures
under United States generally accepted accounting principles
(GAAP). |
|
In the fourth quarter of 2018, the Partnership
made certain changes to its non-GAAP financial measures to more
closely align with internal management reporting, annual reporting
with the U.S. Securities and Exchange Commission (SEC) under Form
20-F and metrics used by its controlling unitholder. Cash Flow from
Vessel Operations (CFVO) from Consolidated Vessels and Total CFVO
are replaced with Consolidated Adjusted EBITDA and Adjusted EBITDA,
respectively, using modified definitions. Adjusted Net Income
Attributable to the Partners and Preferred Unitholders (Adjusted
Net Income) is now reported with a modified definition.
Distributable Cash Flow is no longer reported. Please refer to (a)
"Definitions and Non-GAAP Financial Measures" in this release for
definitions of these non-GAAP financial measures and information
about the changes made and (b) Appendix E for reconciliations of
Total CFVO to Adjusted EBITDA and of Adjusted Net Income as
previously reported to the new definition.
Fourth Quarter of 2018 Compared to Third Quarter
of 2018
GAAP net income increased by $107 million, to
net income of $68 million for the fourth quarter of 2018 compared
to a net loss of $39 million for the third quarter of 2018,
primarily as a result of: $91 million of revenue related to the
positive settlement with Petróleo Brasileiro S.A. and certain of
its subsidiaries (together Petrobras) recorded during the fourth
quarter of 2018; $14 million due to the amortization of non-cash
deferred revenue relating to the Piranema Spirit FPSO unit which
increased from $7 million to $21 million; an $8 million decrease in
deferred income tax expense; $6 million of higher earnings in the
Shuttle Tanker segment due to an increase in CoA days and higher
rates during the fourth quarter of 2018; and $5 million of higher
earnings in the FSO segment primarily due to amended contract
terms, lower off-hire and timing of expenses relating to the
Randgrid FSO unit in the fourth quarter of 2018; partially offset
by a $19 million write-down of the HiLoad DP unit, to $nil, in the
fourth quarter of 2018. Non-GAAP adjusted net income increased by
$119 million for the fourth quarter of 2018 compared to the third
quarter of 2018.
Fourth Quarter of 2018 Compared to Fourth
Quarter of 2017
GAAP net income increased by $52 million, from
$16 million to $68 million, for the fourth quarter of 2018 compared
to the same quarter of the prior year, primarily as a result of:
$91 million of revenue related to the above-mentioned settlement
with Petrobras; $24 million of higher earnings in the FPSO segment
(including equity-accounted vessels) primarily due to the start-up
of the Petrojarl I and Libra FPSO units in May 2018 and November
2017, respectively; $18 million due to the amortization of non-cash
deferred revenue relating to the Piranema Spirit FPSO unit which
increased from $3 million to $21 million, partially offset by lower
charter rates from the Voyageur Spirit and Petrojarl Cidade de Rio
das Ostras (or Rio das Ostras) FPSO unit contract extensions; and
$21 million of higher earnings in the Shuttle Tanker segment
primarily due to an increase in contract of affreightment (CoA)
days and higher rates during the fourth quarter of 2018. This is
partially offset by: a $60 million increase of unrealized non-cash
losses on the Partnership's interest rate swaps (including interest
rate swaps within the FPSO equity-accounted joint ventures); a $19
million write-down of the HiLoad DP unit, to $nil, in the fourth
quarter of 2018; and $8 million of higher interest expense and
realized losses on derivatives primarily due to vessel deliveries
during 2018 and higher average interest rates. Non-GAAP adjusted
net income increased by $119 million for the fourth quarter of 2018
compared to the fourth quarter of 2017.
Please refer to the section later in this
earnings release titled “Operating Results” for additional
information of variances by segment and Appendix B for a
reconciliation between GAAP net income and non-GAAP adjusted net
income.
Fiscal Year 2018 Compared to Fiscal Year
2017
GAAP net loss decreased by $175 million, to $124
million for fiscal year 2018 compared to $299 million for the prior
year, primarily as a result of: $95 million of lower write-downs on
vessels in 2018; $91 million of revenue related to the settlement
with Petrobras; $31 million of higher earnings in the FPSO segment
(including equity-accounted vessels) primarily due to the start-up
of the Petrojarl I and Libra FPSO units; $30 million of improved
earnings in the UMS segment due to the Arendal Spirit charter
contract termination in April 2017 and the subsequent lay-up of the
unit during the fourth quarter of 2017 as well as the recognition
of the remaining deferred mobilization costs relating to the
charter contract during 2017; and $27 million of higher earnings in
the FSO segment primarily due to the start-up of the Randgrid FSO
unit; partially offset by $55 million of losses on debt repurchases
in 2018; $20 million due to a partial reversal of a previously
accrued contingent liability associated with the estimated damages
from the cancellation of the UMS construction contracts in 2017; a
$20 million increase in deferred income tax expense; and $7 million
of higher interest expense, net of lower realized loss on
derivatives, due to vessel deliveries and higher average interest
rates. Non-GAAP adjusted net income increased by $118 million in
fiscal year 2018 compared to fiscal year 2017.
CEO Commentary
“Our non-GAAP Adjusted EBITDA was significantly
higher for both the fourth quarter and full year 2018 compared to
2017. The recognition of $91 million of revenue related to the
Petrobras settlement, higher rates and utilization in our shuttle
segment, and new cash flow from our recent growth projects,
including Libra FPSO unit, Petrojarl I FPSO unit, three shuttle
tankers and the Randgrid FSO unit, were the most important drivers
for the solid results. For the Voyageur and Ostras FPSOs we had
lower revenues in 2018 compared to the previous year as a result of
short term contract extensions,” commented Ingvild Sæther,
President and CEO of Teekay Offshore Group Ltd.
“Since reporting third quarter earnings in
November, we have continued to focus on securing charter contract
extensions and new contracts on existing assets. We recently
entered into a new contract extension with Petrobras for up to
three years for the Piranema Spirit FPSO, which extends the
production on the existing Brazilian field. During the fourth
quarter, we also secured several new contracts of affreightment in
our North Sea shuttle tanker fleet at attractive rates and a
further contract extension on the Ostras FPSO to mid-March 2019. In
addition, we continue to monitor and work with Alpha Petroleum in
their efforts to lift the remaining conditions precedent to effect
the new charter contract for the redeployment of the Petrojarl Varg
FPSO, including their project financing initiatives, which have not
yet been finalized.”
Ms. Sæther added, "Looking ahead, the
construction of our six shuttle tanker newbuildings by Samsung
Heavy Industries Co. Ltd., delivering in late-2019 through
early-2021, is proceeding on schedule and on budget, and we are
also making good progress on securing long-term financing for these
vessels, which we expect to conclude by early second quarter of
2019."
Summary of Recent Events
FPSO Unit Contract Extension and
Redeployment
In January 2019, the Partnership secured a
contract extension with Petrobras to extend the employment of the
Piranema Spirit FPSO unit on the Brazilian field. The contract
extension commenced in February 2019 for a period of three years
but includes customer termination rights with 10 months' advance
notice.
In October 2018, the Partnership entered into a
conditional agreement with Alpha Petroleum Resources Limited
(Alpha) for the Petrojarl Varg FPSO unit for Alpha's development of
the Cheviot field on the UK continental shelf. The FPSO contract is
for a seven-year fixed term from first oil, which was originally
targeted for the second quarter of 2021 and is now delayed, after
completion of a life extension and upgrade phase for the FPSO unit
taking place at Sembcorp Marine’s shipyard in Singapore. It is
intended that the Petrojarl Varg FPSO unit would be used for the
entire expected life of the Cheviot field.
The effectiveness of the agreement with Alpha
remains subject to satisfaction of a number of conditions
precedent, including (i) initial funding from Alpha to cover the
life extension and upgrade costs for the Petrojarl Varg FPSO unit,
which is conditional on Alpha finalizing its project financing, and
(ii) approval by relevant governmental authorities of Alpha’s final
field development plan for the Cheviot field. We understand that
Alpha continues to seek required funding for the project, the
commencement of which will be delayed pending satisfaction of the
conditions precedent. There is no assurance that the conditions
will be satisfied.
Settlement Agreements with Petrobras
In October 2018, the Partnership entered into a
settlement agreement with Petrobras with respect to various
disputes relating to the previously-terminated charter contracts of
the HiLoad DP unit and Arendal Spirit unit for maintenance and
safety (UMS). As part of the settlement agreement, Petrobras agreed
to pay a total amount of $96 million to Teekay Offshore, $55
million of which was received in the fourth quarter of 2018. The
remaining $41 million is to be paid in two separate instalments of
$22 million and $19 million by the end of 2020 and 2021,
respectively, subject to certain potential offsets described
below.
If in the ordinary course of business and prior
to the end of 2021, new charter contracts are entered into with
Petrobras in respect of the Arendal Spirit UMS, Rio das Ostras FPSO
unit and Piranema Spirit FPSO unit, the deferred $41 million will
partly be reduced by revenue actually received from such new
contracts in this period (Offset Amounts). The recent three-year
contract extension with Petrobras for the Piranema Spirit FPSO unit
mentioned above is not expected to result in Offset Amounts being
generated.
Teekay Offshore recognized the above-mentioned
settlement in the fourth quarter of 2018, which increased Teekay
Offshore’s revenues by approximately $91 million, which represents
the present value of the future expected settlement amounts.
In addition, in October 2018, Teekay Offshore,
through separate subsidiaries, entered into a further settlement
agreement with Petrobras with regards to a dispute relating to the
charter of the Piranema Spirit FPSO unit. Pursuant to the
settlement agreement, Teekay Offshore has agreed to a reduction in
the charter rate for the FPSO unit totaling approximately $11
million, which was credited to Petrobras in the fourth quarter of
2018. This amount was accrued in Teekay Offshore's financial
statements in prior periods, primarily in 2016 and 2017.
Operating Results
The following table highlights certain financial
information for Teekay Offshore’s six segments (please refer to the
“Teekay Offshore’s Fleet” section of this release below and
Appendix C for further details).
|
|
|
Three Months Ended |
|
December 31, 2018 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSO Segment |
ShuttleTankerSegment |
FSO Segment |
UMS Segment |
Towage Segment |
ConventionalTankerSegment |
Corporate /Eliminations |
Total |
GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Revenues |
143,651 |
|
206,212 |
|
36,734 |
|
36,536 |
|
15,252 |
|
6,828 |
|
— |
|
445,213 |
|
Income
(loss) from vessel operations |
46,498 |
|
74,703 |
|
15,214 |
|
33,359 |
|
(6,349 |
) |
(880 |
) |
— |
|
162,545 |
|
NON-GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA (i) |
83,273 |
|
128,144 |
|
25,636 |
|
35,011 |
|
(1,202 |
) |
(880 |
) |
(1,470 |
) |
268,512 |
|
Adjusted EBITDA (i) |
108,543 |
|
124,038 |
|
25,508 |
|
35,011 |
|
(1,202 |
) |
(880 |
) |
(1,470 |
) |
289,548 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSO Segment |
ShuttleTankerSegment |
FSO Segment |
UMS Segment |
Towage Segment |
ConventionalTankerSegment |
Corporate /Eliminations(ii) |
Total |
GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Revenues |
118,675 |
|
132,106 |
|
34,409 |
|
321 |
|
12,212 |
|
3,540 |
|
(5,535 |
) |
295,728 |
|
Income
(loss) from vessel operations |
39,304 |
|
13,582 |
|
12,119 |
|
(7,822 |
) |
(5,114 |
) |
(774 |
) |
(269 |
) |
51,026 |
|
NON-GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA (i) |
73,368 |
|
47,761 |
|
23,405 |
|
(6,163 |
) |
(1,061 |
) |
(774 |
) |
260 |
|
136,796 |
|
Adjusted EBITDA (i) |
83,992 |
|
43,210 |
|
23,187 |
|
(6,163 |
) |
(1,061 |
) |
(774 |
) |
260 |
|
142,651 |
|
|
(i) Consolidated Adjusted EBITDA represents net
income (loss) before interest, taxes, and depreciation and
amortization, each on a consolidated basis, and is adjusted to
exclude certain items whose timing or amount cannot be reasonably
estimated in advance or that are not considered representative of
core operating performance. Consolidated Adjusted EBITDA also
excludes realized gains or losses on interest rates swaps and
equity income, each on a consolidated basis. |
|
Adjusted EBITDA represents Consolidated Adjusted
EBITDA further adjusted to include the Partnership's proportionate
share of consolidated adjusted EBITDA from its equity-accounted
joint ventures and to exclude the non-controlling interests'
proportionate share of the consolidated adjusted EBITDA from the
Partnership's consolidated joint ventures. |
|
Consolidated Adjusted EBITDA and Adjusted EBITDA are
non-GAAP financial measures. Please refer to “Definitions and
Non-GAAP Financial Measures” and the Appendices to this release for
definitions of these terms and reconciliations of these non-GAAP
financial measures as used in this release to the most directly
comparable financial measures under GAAP. |
|
(ii) Includes revenues and expenses earned and
incurred between segments of Teekay Offshore during the three
months ended December 31, 2017. |
|
FPSO Segment
Income from vessel operations increased by $7
million for the fourth quarter of 2018, compared to the same
quarter of the prior year, primarily due to $18 million from the
accelerated amortization of non-cash deferred revenue relating to
the Piranema Spirit FPSO unit and $8 million from the commencement
of operations of the Petrojarl I in May 2018, partially offset by a
decrease of $20 million due to lower charter rates from the
Voyageur Spirit and Rio das Ostras FPSO unit contract
extensions.
Adjusted EBITDA (including equity-accounted
vessels) increased by $25 million for the three months ended
December 31, 2018 compared to the same quarter of the prior year,
primarily due to variances noted above plus the commencement of
operations of the Pioneiro de Libra FPSO unit in November 2017.
Shuttle Tanker Segment
Income from vessel operations increased by $61
million for the fourth quarter of 2018, compared to the same
quarter of the prior year, primarily due to $55 million of revenue
related to the positive settlement with Petrobras, $10 million from
the Nordic Brasilia and Nordic Rio operating in the conventional
tanker market after redelivery and repairs and maintenance in the
fourth quarter of 2017, $8 million due to more CoA days and higher
rates during the fourth quarter of 2018 and $5 million from the
redelivery of an in-chartered vessel in January 2018. This is
partially offset by a $19 million write-down of the HiLoad DP unit,
to $nil, in the fourth quarter of 2018 and a $4 million increase in
depreciation expense resulting from a change in the estimated
useful life of shuttle tankers from 25 years to 20 years, effective
January 1, 2018.
Adjusted EBITDA increased by $81 million for the
fourth quarter of 2018, compared to the same quarter of the prior
year, primarily due to variances noted above, excluding the impact
of the write-down of the HiLoad DP unit and the increase in
depreciation expense.
FSO Segment
Income from vessel operations and Adjusted
EBITDA increased by $3 million and $2 million, respectively, for
the fourth quarter of 2018, compared to the same quarter of the
prior year, primarily due to amended contract terms, including a
retrospective adjustment, lower off-hire and the timing of expenses
related to the Randgrid FSO unit in the fourth quarter of 2018.
UMS Segment
Income from vessel operations and Adjusted
EBITDA both increased by $41 million for the fourth quarter of
2018, compared to the same quarter of the prior year, mainly due to
$37 million of revenue related to the positive settlement with
Petrobras and $4 million of lower operating expenses due to costs
incurred related to the transit of the Arendal Spirit UMS to its
lay-up location during the fourth quarter of 2017.
Towage Segment
Loss from vessel operations and Adjusted EBITDA,
both of $(1) million, are consistent for the fourth quarter of 2018
compared to the same quarter of the prior year.
Conventional Tanker Segment
Loss from vessel operations and Adjusted EBITDA,
both of $(1) million, are consistent for the fourth quarter of 2018
compared to the same quarter of the prior year. The time-charter-in
contracts for these two remaining conventional tankers are
scheduled to expire in March 2019, at which point they will be
returned to their owners and the Partnership will no longer have
activity in the conventional tanker segment.
Teekay Offshore’s Fleet
The following table summarizes Teekay Offshore’s
fleet as of February 8, 2019. In comparison to the
previously-reported fleet table in the release for the third
quarter of 2018, Teekay Offshore's owned Shuttle Tanker fleet
decreased by one vessel due to the sale of the Navion Scandia in
November 2018.
|
|
|
Number of Vessels |
|
Owned Vessels |
Chartered-in Vessels |
CommittedNewbuildings |
Total |
FPSO Segment |
8 |
|
(i) |
— |
|
|
— |
|
|
8 |
|
|
Shuttle Tanker
Segment |
27 |
|
(ii) |
2 |
|
|
6 |
|
(iii) |
35 |
|
|
FSO Segment |
6 |
|
|
— |
|
|
— |
|
|
6 |
|
|
UMS Segment |
1 |
|
|
— |
|
|
— |
|
|
1 |
|
|
Towage Segment |
10 |
|
|
— |
|
|
— |
|
|
10 |
|
|
Conventional
Segment |
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
Total |
52 |
|
|
4 |
|
|
6 |
|
|
62 |
|
|
|
(i) Includes two FPSO units, the Cidade de Itajai
and Pioneiro de Libra, in which Teekay Offshore’s ownership
interest is 50 percent. |
(ii) Includes four shuttle tankers in which
Teekay Offshore’s ownership interest is 50 percent and one HiLoad
DP unit. |
(iii) Includes six DP2 shuttle tanker
newbuildings scheduled for delivery in late-2019 through
early-2021, two of which will operate under Teekay Offshore's
master agreement with Equinor and four of which will join Teekay
Offshore's CoA portfolio in the North Sea. |
|
Liquidity Update
As of December 31, 2018, the Partnership
had total liquidity of $225.0 million, an increase of $25.2 million
compared to September 30, 2018.
Conference Call
The Partnership plans to host a conference call
on Friday, February 8, 2019 at 12:00 p.m. (ET) to discuss the
results for the fourth quarter and fiscal year of 2018. All
unitholders and interested parties are invited to listen to the
live conference call by choosing from the following options:
- By dialing 1-800-458-4148 or +1 (647) 484-0477, if outside
North America, and quoting conference ID code 3648822
- By accessing the webcast, which will be available on Teekay
Offshore's website at www.teekay.com (the archive will remain on
the website for a period of one year).
An accompanying Fourth Quarter 2018 Earnings
Presentation will also be available at www.teekay.com in advance of
the conference call start time.
About Teekay Offshore Partners
L.P.
Teekay Offshore Partners L.P. is a leading
international midstream services provider to the offshore oil
production industry, primarily focused on the ownership and
operation of critical infrastructure assets in offshore oil regions
of the North Sea, Brazil and the East Coast of Canada. Teekay
Offshore has consolidated assets of approximately $5.3 billion,
comprised of 62 offshore assets, including floating production,
storage and offloading (FPSO) units, shuttle tankers (including six
newbuildings), floating storage and offtake (FSO) units,
long-distance towing and offshore installation vessels, a unit for
maintenance and safety (UMS) and conventional tankers. The majority
of Teekay Offshore’s fleet is employed on medium-term, stable
contracts. Brookfield Business Partners L.P.
(NYSE:BBU)(TSX:BBU.UN), together with its institutional partners
(collectively Brookfield), and Teekay Corporation (NYSE:TK)
own 51 percent and 49 percent, respectively, of Teekay Offshore’s
general partner.
Teekay Offshore's common units and preferred
units trade on the New York Stock Exchange under the symbols "TOO",
"TOO PR A", "TOO PR B" and "TOO PR E", respectively.
For Investor Relations enquiries contact:
Ryan HamiltonTel: +1 (604) 609-2963Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the U.S. Securities and Exchange Commission (SEC). These non-GAAP
financial measures, which commencing in the fourth quarter of 2018,
include Consolidated Adjusted EBITDA, Adjusted EBITDA and Adjusted
Net Income, are intended to provide additional information and
should not be considered a substitute for measures of performance
prepared in accordance with GAAP. In addition, these measures do
not have standardized meanings, and may not be comparable to
similar measures presented by other companies. These non-GAAP
measures are used by management, and the Partnership believes that
these supplementary metrics assist investors and other users of its
financial reports in comparing financial and operating performance
of the Partnership across reporting periods and with other
companies.
In prior periods, the Partnership reported Cash
Flow from Vessel Operations (CFVO), Adjusted Net Income and
Distributable Cash Flow as non-GAAP measures. In the fourth quarter
of 2018, the Partnership made certain changes to these measures and
their definitions to more closely align with internal management
reporting, annual reporting with the SEC under Form 20-F and
metrics used by its controlling unitholder. CFVO from Consolidated
Vessels and Total CFVO are replaced with Consolidated Adjusted
EBITDA and Adjusted EBITDA, respectively, using modified
definitions. Adjusted Net Income is now reported with a modified
definition. Distributable Cash Flow is no longer reported.
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA represents net
income (loss) before interest, taxes, and depreciation and
amortization and is adjusted to exclude certain items whose timing
or amount cannot be reasonably estimated in advance or that are not
considered representative of core operating performance. Such
adjustments include vessel write-downs, gains or losses on the sale
of vessels, unrealized gains or losses on derivative instruments,
foreign exchange gains or losses, losses on debt repurchases, and
certain other income or expenses. Consolidated Adjusted EBITDA also
excludes realized gains or losses on interest rate swaps as
management, in assessing the Partnership's performance, views these
gains or losses as an element of interest expense and realized
gains or losses on derivative instruments resulting from amendments
or terminations of the underlying instruments. Consolidated
Adjusted EBITDA also excludes equity income as the Partnership does
not control its equity-accounted investments, and as a result, the
Partnership does not have the unilateral ability to determine
whether the cash generated by its equity-accounted investments is
retained within the entity in which the Partnership holds the
equity-accounted investment or distributed to the Partnership and
other owners. In addition, the Partnership does not control the
timing of any such distributions to the Partnership and other
owners.
Adjusted EBITDA represents Consolidated Adjusted
EBITDA further adjusted to include the Partnership's proportionate
share of consolidated adjusted EBITDA from its equity-accounted
joint ventures and to exclude the non-controlling interests'
proportionate share of the consolidated adjusted EBITDA from the
Partnership's consolidated joint ventures. Readers are cautioned
when using Adjusted EBITDA as a liquidity measure as the amount
contributed from Adjusted EBITDA from the equity-accounted
investments may not be available or distributed to the Partnership
in the periods such Adjusted EBITDA is generated by the
equity-accounted investments. Please refer to Appendices A and D of
this release for reconciliations of Adjusted EBITDA to net income
(loss) and equity income, respectively, the most directly
comparable GAAP measures reflected in the Partnership’s
consolidated financial statements. Appendix E also includes
supplementary information to reconcile total CFVO, the non-GAAP
financial measure used in prior periods, to Adjusted EBITDA.
Adjusted Net Income represents net income (loss)
adjusted to exclude the impact of certain items whose timing or
amount cannot be reasonably estimated in advance or that are not
considered representative of core operating performance consistent
with the calculation of Adjusted EBITDA. Adjusted Net Income
includes realized gains or losses on derivative instruments as an
element of interest expense and excludes income tax expenses or
recoveries from changes in valuation allowance or uncertain tax
provisions. Please refer to Appendix B of this release for a
reconciliation of this non-GAAP financial measure to net income
(loss), the most directly comparable GAAP measure reflected in the
Partnership’s consolidated financial statements. Appendix E also
includes supplementary information to reconcile Adjusted Net Income
to amounts reported previously.
|
Teekay Offshore Partners L.P. |
Summary Consolidated Statements of Income
(Loss) |
|
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2018 |
2018 |
2017 |
2018 |
2017 |
(in thousands of U.S. Dollars, except per unit
data) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
Revenues (1) |
445,213 |
|
327,658 |
|
295,728 |
|
1,416,424 |
|
1,110,284 |
|
|
|
|
|
|
|
Voyage expenses
(1) |
(39,402 |
) |
(40,914 |
) |
(29,005 |
) |
(151,808 |
) |
(99,444 |
) |
Vessel operating
expenses (1) |
(108,592 |
) |
(103,399 |
) |
(98,100 |
) |
(437,671 |
) |
(353,564 |
) |
Time-charter hire
expenses |
(13,281 |
) |
(13,144 |
) |
(18,375 |
) |
(52,616 |
) |
(80,315 |
) |
Depreciation and
amortization (1)(2) |
(91,023 |
) |
(91,523 |
) |
(85,658 |
) |
(372,290 |
) |
(309,975 |
) |
General and
administrative |
(14,335 |
) |
(15,416 |
) |
(14,383 |
) |
(65,427 |
) |
(62,249 |
) |
(Write-down) and gain
on sale of vessels (3) |
(16,414 |
) |
350 |
|
148 |
|
(223,355 |
) |
(318,078 |
) |
Restructuring recovery (charge) |
379 |
|
(1,899 |
) |
671 |
|
(1,520 |
) |
(2,664 |
) |
Income (loss)
from vessel operations |
162,545 |
|
61,713 |
|
51,026 |
|
111,737 |
|
(116,005 |
) |
|
|
|
|
|
|
Interest expense |
(53,424 |
) |
(54,736 |
) |
(43,365 |
) |
(199,395 |
) |
(154,890 |
) |
Interest income |
1,215 |
|
991 |
|
1,245 |
|
3,598 |
|
2,707 |
|
Realized and unrealized
(loss) gain |
|
|
|
|
|
on
derivative instruments (4) |
(40,465 |
) |
9,381 |
|
4,708 |
|
12,808 |
|
(42,853 |
) |
Equity income (1) |
5,237 |
|
11,877 |
|
2,126 |
|
39,458 |
|
14,442 |
|
Foreign currency
exchange loss (5) |
(3,344 |
) |
(266 |
) |
(693 |
) |
(9,413 |
) |
(14,006 |
) |
Losses on debt
repurchases (6) |
— |
|
(55,479 |
) |
(3,102 |
) |
(55,479 |
) |
(3,102 |
) |
Other
(expense) income - net |
(40 |
) |
(699 |
) |
(95 |
) |
(4,602 |
) |
14,167 |
|
Income (loss)
before income tax expense |
71,724 |
|
(27,218 |
) |
11,850 |
|
(101,288 |
) |
(299,540 |
) |
Income tax (expense)
recovery |
(3,882 |
) |
(12,137 |
) |
4,187 |
|
(22,657 |
) |
98 |
|
Net income (loss) |
67,842 |
|
(39,355 |
) |
16,037 |
|
(123,945 |
) |
(299,442 |
) |
|
|
|
|
|
|
Non-controlling
interests in net income (loss) |
1,476 |
|
(785 |
) |
638 |
|
(7,161 |
) |
3,764 |
|
Preferred unitholders'
interest in net income (loss) |
8,038 |
|
8,038 |
|
5,376 |
|
31,485 |
|
42,065 |
|
General partner’s
interest in net income (loss) |
443 |
|
(354 |
) |
76 |
|
(1,128 |
) |
(5,770 |
) |
Limited partners’
interest in net income (loss) |
57,885 |
|
(46,254 |
) |
9,947 |
|
(147,141 |
) |
(339,501 |
) |
Limited partner's
interest in net income (loss) for |
|
|
|
|
|
basic
income (loss) per unit |
57,885 |
|
(46,254 |
) |
9,943 |
|
(147,141 |
) |
(320,749 |
) |
Limited partner's
interest in net income (loss) for |
|
|
|
|
|
per
common unit |
|
|
|
|
|
- basic |
0.14 |
|
(0.11 |
) |
0.02 |
|
(0.36 |
) |
(1.45 |
) |
- diluted |
0.12 |
|
(0.11 |
) |
0.02 |
|
(0.36 |
) |
(1.46 |
) |
Weighted-average number
of common units: |
|
|
|
|
|
- basic |
410,314,977 |
|
410,314,977 |
|
410,045,210 |
|
410,261,239 |
|
220,755,937 |
|
- diluted |
475,565,613 |
|
410,314,977 |
|
475,360,951 |
|
410,261,239 |
|
229,940,120 |
|
Total number of common
units outstanding |
|
|
|
|
|
at end of period |
410,314,977 |
|
410,314,977 |
|
410,045,210 |
|
410,314,977 |
|
410,045,210 |
|
|
(1) Effective January 1, 2018, the Partnership
adopted Accounting Standards Update 2014-09, Revenue from Contracts
with Customers, which resulted in increasing revenues by $17.6
million and $65.5 million for the three months and year ended
December 31, 2018, respectively, increasing voyage expenses by
$2.2 million and $11.3 million for the three months and year ended
December 31, 2018, respectively, increasing vessel operating
expenses by $15.5 million and $52.1 million for the three months
and year ended December 31, 2018, respectively, decreasing
depreciation and amortization by $nil and $1.1 million for the
three months and year ended December 31, 2018, respectively, and
decreasing equity income by $0.1 million and $0.6 million for the
three months and year ended December 31, 2018, respectively. |
|
Includes revenues of $91.5 million related to the
October 2018 settlement agreement with Petrobras in relation to the
previously-terminated charter contracts of the HiLoad DP unit and
Arendal Spirit UMS. As part of the settlement agreement, Petrobras
has agreed to pay a total amount of $96.0 million to the
Partnership, which includes $55.0 million that was paid November
2018, and amounts of $22.0 million payable in late-2020 and $19.0
million payable in late-2021, which are available to be reduced by
40% of the revenues paid prior to the end of 2021 by Petrobras
under certain new contracts entered into subsequent to October 25,
2018 relating specifically to the Arendal Spirit UMS and the Rio
das Ostras and Piranema Spirit FPSO units. |
|
(2) The Partnership's shuttle tankers are
comprised of two components: i) a conventional tanker (the “tanker
component”) and ii) specialized shuttle equipment (the “shuttle
component”). The Partnership differentiated these two components on
the principle that a shuttle tanker can also operate as a
conventional tanker without the use of the shuttle component. The
economics of this alternate use depend on the supply and demand
fundamentals in the two segments. Historically, the Partnership has
assessed the useful life of the tanker component as being 25 years
and the shuttle component as being 20 years. During the three
months ended March 31, 2018, the Partnership considered challenges
associated with shuttle tankers that have approached 20 years of
age in recent years and has reassessed the useful life of the
tanker component to be 20 years. This change in estimate,
commencing January 1, 2018, impacted 21 vessels in the
Partnership's shuttle tanker fleet. The effect of this change in
estimate was an increase in depreciation and amortization expense
and a decrease in net income by $3.8 million and $15.7 million for
the three months and year ended December 31, 2018,
respectively. |
|
(3) During the three months ended December 31,
2018, the Partnership incurred a write-down of $19.2 million
related to the HiLoad DP unit, to $nil, as a result of a reduction
in the expected future cash flows of the unit as a result of the
settlement with Petrobras during the fourth quarter of 2018 and a
change in the operating plan for the unit. In November 2018, the
Partnership sold a 1998-built shuttle tanker, the Navion Scandia,
for net proceeds of $10.8 million, and recorded a gain on sale of
$2.8 million in the Partnership's shuttle tanker segment. |
During the three months ended September 30, 2018, the
Partnership sold a 2001-built shuttle tanker, the Stena Spirit
(which the Partnership owned through a 50 percent-owned
subsidiary), for net proceeds of $8.8 million, and recorded a gain
on sale of $0.4 million in the Partnership's shuttle tanker
segment. |
During the three months ended June 30, 2018, the
Partnership incurred a write-down of $181.4 million, mainly related
to the Piranema Spirit and Rio das Ostras FPSO units as a result of
a reassessment of the future redeployment assumptions for both
units. In June 2018, the Partnership sold a 1998-built shuttle
tanker, the Navion Britannia, for net proceeds of $10.4 million,
and recorded a gain on sale of $2.6 million in the Partnership's
shuttle tanker segment. |
During the three months ended March 31, 2018, the
Partnership incurred a write-down of $28.5 million related to two
older shuttle tankers ($14.2 million which related to one shuttle
tanker the Partnership owned through a 50 percent-owned
subsidiary), due to the expected redelivery of these vessels from
their charterer after completing their bareboat charter contracts
in April 2018 and the resulting change in the expectations for the
future employment opportunities for the vessels. |
During the year ended December 31, 2017, the
Partnership incurred a $318.1 million write-down related to the
Petrojarl I FPSO unit due to increased costs and time associated
with upgrade work on the unit, the Rio das Ostras FPSO unit due to
the expected expiration of its charter in early-2018, three DP1
shuttle tankers as a result of a change in operational plans for
the vessels, and the HiLoad DP unit due to a change in expectations
for the future opportunities of the unit. |
|
(4) Realized (loss) gain on derivative
instruments relates to amounts the Partnership actually paid to
settle derivative instruments, and the unrealized (loss) gain on
derivative instruments relates to the change in fair value of such
derivative instruments, as detailed in the table below: |
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
(in thousands of U.S. Dollars) |
2018 |
2018 |
2017 |
2018 |
2017 |
Realized (loss)
gain relating to: |
|
|
|
|
|
Interest rate swaps |
(4,276 |
) |
(10,749 |
) |
(8,360 |
) |
(38,011 |
) |
(78,296 |
) |
Foreign
currency forward contracts |
(1,470 |
) |
(747 |
) |
260 |
|
(1,228 |
) |
900 |
|
|
(5,746 |
) |
(11,496 |
) |
(8,100 |
) |
(39,239 |
) |
(77,396 |
) |
|
|
|
|
|
|
Unrealized
(loss) gain relating to: |
|
|
|
|
|
Interest
rate swaps |
(31,637 |
) |
20,083 |
|
14,017 |
|
56,420 |
|
33,114 |
|
Foreign
currency forward contracts |
(3,082 |
) |
794 |
|
(1,209 |
) |
(4,373 |
) |
1,429 |
|
|
(34,719 |
) |
20,877 |
|
12,808 |
|
52,047 |
|
34,543 |
|
Total realized and
unrealized (loss) gain on |
|
|
|
|
|
derivative instruments |
(40,465 |
) |
9,381 |
|
4,708 |
|
12,808 |
|
(42,853 |
) |
|
(5) The Partnership entered into cross-currency
swaps to economically hedge the foreign currency exposure on the
payment of interest and repayment of principal amounts of the
Partnership’s Norwegian Kroner (NOK) bonds. In addition, the
cross-currency swaps economically hedge the interest rate exposure
on the NOK bonds. The Partnership has not designated, for
accounting purposes, these cross-currency swaps as cash flow hedges
of its NOK bonds and, thus, foreign currency exchange gain (loss)
includes a realized loss relating to the amounts the Partnership
paid to settle its non-designated cross-currency swaps and an
unrealized gain (loss) relating to the change in fair value of such
swaps, partially offset by the realized gain on repurchases of the
NOK bonds and unrealized (loss) gain on the revaluation of the NOK
bonds, as detailed in the table below. In July 2018, the
Partnership used a portion of the net proceeds from the issuance of
its $700 million 8.5% senior unsecured notes maturing in 2023 to
repurchase approximately NOK 914 million of the NOK 1,000 million
aggregate principal of its NOK bonds and terminated NOK 905 million
of the associated NOK 1,000 million aggregate notional amount of
the cross-currency swaps, resulting in a cash settlement in favor
of the counterparty of $36.5 million on the cross-currency swap
termination. |
In September 2017, the Partnership terminated NOK 712
million of the associated NOK 1,220 million aggregate notional
amount of cross-currency swaps, resulting in a cash settlement in
favor of the counterparty of $40.2 million on the cross-currency
swap termination. The termination of the cross-currency swaps was
in connection with the repurchase of NOK 712 million bonds maturing
in late 2018 in exchange for a U.S. Dollar senior unsecured bond in
the Norwegian bond market that matures in August 2022. In November
2017, the Partnership repurchased the remaining NOK 508 million of
the NOK 1,220 million aggregate principal of its NOK bonds and
terminated NOK 508 million of the associated notional amount of the
cross-currency swaps, resulting in a cash settlement in favor of
the counterparty of $33.3 million on the cross-currency swap
termination. |
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
(in thousands of U.S. Dollars) |
2018 |
2018 |
2017 |
2018 |
2017 |
Realized loss on
cross-currency swaps |
(143 |
) |
(36,768 |
) |
(34,704 |
) |
(39,647 |
) |
(84,205 |
) |
Unrealized (loss) gain
on cross-currency swaps |
(624 |
) |
37,367 |
|
24,936 |
|
38,648 |
|
91,914 |
|
Realized gain on
revaluation of NOK bonds |
— |
|
34,993 |
|
67,654 |
|
34,993 |
|
67,654 |
|
Unrealized gain (loss) on revaluation of NOK bonds |
594 |
|
(35,712 |
) |
(57,937 |
) |
(35,968 |
) |
(79,818 |
) |
|
(6) Losses on debt repurchases of $55.5 million
for the three months ended September 30, 2018, related to the
prepayment of a promissory note issued to Brookfield and the
repurchases of $225.2 million of the existing $300.0 million senior
unsecured bonds maturing in July 2019, and NOK 914 million of the
existing NOK 1,000 million senior unsecured bonds maturing in
January 2019. The losses on debt repurchases are comprised of an
acceleration of non-cash accretion expense of $31.5 million
resulting from the difference between the $200 million face value
of the Brookfield Promissory Note and its accounting carrying value
of $168.5 million and an associated early termination fee of $12
million paid to Brookfield, as well as 2.0% - 2.5% premiums on the
repurchase of the bonds and the write-off of capitalized loan
costs. The accounting carrying value of the $200 million Brookfield
Promissory Note was lower than face value due to it being recorded
at its relative fair value based on the allocation of total net
proceeds invested by Brookfield on September 25, 2017. |
Losses on debt repurchases of $3.1 million for the
three months ended December 31, 2017, related to the repurchase of
the NOK 508 million of the remaining NOK 1,220 million senior
unsecured bonds maturing in late 2018. |
|
Teekay Offshore Partners L.P. |
Consolidated Balance Sheets |
|
|
As at |
As at |
As at |
|
December 31, 2018 |
September 30, 2018 |
December 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
Current |
|
|
|
Cash and cash
equivalents |
225,040 |
|
199,860 |
|
221,934 |
|
Restricted cash |
8,540 |
|
9,901 |
|
28,360 |
|
Accounts
receivable |
141,903 |
|
154,962 |
|
162,691 |
|
Vessel held for
sale |
12,528 |
|
— |
|
— |
|
Prepaid expenses |
32,199 |
|
32,624 |
|
30,336 |
|
Due from
affiliates |
58,885 |
|
55,736 |
|
37,376 |
|
Other
current assets |
11,879 |
|
14,203 |
|
29,249 |
|
Total current
assets |
490,974 |
|
467,286 |
|
509,946 |
|
|
|
|
|
|
|
|
|
Vessels and
equipment |
|
|
|
At cost, less
accumulated depreciation |
4,196,909 |
|
4,312,214 |
|
4,398,836 |
|
Advances on newbuilding
contracts and conversion costs |
83,713 |
|
63,826 |
|
288,658 |
|
Investment in equity
accounted joint ventures |
212,202 |
|
207,075 |
|
169,875 |
|
Deferred tax asset |
9,168 |
|
12,046 |
|
28,110 |
|
Due from
affiliates |
949 |
|
987 |
|
— |
|
Other assets |
198,992 |
|
175,214 |
|
113,225 |
|
Goodwill |
129,145 |
|
129,145 |
|
129,145 |
|
Total
assets |
5,322,052 |
|
5,367,793 |
|
5,637,795 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current |
|
|
|
Accounts payable |
26,423 |
|
9,878 |
|
43,317 |
|
Accrued
liabilities |
129,896 |
|
147,444 |
|
187,687 |
|
Deferred revenues |
55,750 |
|
54,734 |
|
69,668 |
|
Due to affiliates |
183,795 |
|
67,315 |
|
108,483 |
|
Current portion of
derivative instruments |
23,290 |
|
21,391 |
|
42,515 |
|
Current portion of
long-term debt |
554,336 |
|
556,498 |
|
589,767 |
|
Other
current liabilities |
15,062 |
|
36,381 |
|
9,056 |
|
Total current
liabilities |
988,552 |
|
893,641 |
|
1,050,493 |
|
|
|
|
|
Long-term debt |
2,543,406 |
|
2,633,343 |
|
2,533,961 |
|
Derivative
instruments |
94,354 |
|
68,375 |
|
167,469 |
|
Due to affiliates |
— |
|
125,000 |
|
163,037 |
|
Other
long-term liabilities |
236,616 |
|
238,572 |
|
249,336 |
|
Total
liabilities |
3,862,928 |
|
3,958,931 |
|
4,164,296 |
|
|
|
|
|
Redeemable
non-controlling interest |
— |
|
— |
|
(29 |
) |
|
|
|
|
Equity |
|
|
|
Limited partners -
common units |
883,090 |
|
829,193 |
|
1,004,077 |
|
Limited partners -
preferred units |
384,274 |
|
384,274 |
|
266,925 |
|
General Partner |
15,055 |
|
14,646 |
|
15,996 |
|
Warrants |
132,225 |
|
132,225 |
|
132,225 |
|
Accumulated other
comprehensive income (loss) |
7,361 |
|
6,272 |
|
(523 |
) |
Non-controlling interests |
37,119 |
|
42,252 |
|
54,828 |
|
Total equity |
1,459,124 |
|
1,408,862 |
|
1,473,528 |
|
Total liabilities and total equity |
5,322,052 |
|
5,367,793 |
|
5,637,795 |
|
Teekay Offshore Partners L.P. |
Consolidated Statements of Cash Flows |
|
|
Year Ended |
|
December 31, 2018 |
December 31, 2017 |
(in thousands
of U.S. Dollars) |
(unaudited) |
(unaudited) |
Cash, cash equivalents
and restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net loss |
(123,945 |
) |
(299,442 |
) |
Non-cash items: |
|
|
Unrealized gain on derivative instruments |
(53,419 |
) |
(59,702 |
) |
Equity
income, net of dividends received of $6,200 (2017 - $11,600) |
(33,258 |
) |
(2,842 |
) |
Depreciation and amortization |
372,290 |
|
309,975 |
|
Write-down and (gain) on sale of vessels |
223,355 |
|
318,078 |
|
Deferred
income tax expense (recovery) |
18,606 |
|
(1,870 |
) |
Amortization of in-process revenue contracts |
(35,219 |
) |
(12,745 |
) |
Unrealized foreign currency exchange loss and other |
16,871 |
|
37,511 |
|
Change in
non-cash working capital items related to operating activities |
(83,227 |
) |
33,506 |
|
Expenditures for dry docking |
(21,411 |
) |
(17,269 |
) |
Net operating cash flow |
280,643 |
|
305,200 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from long-term
debt |
734,698 |
|
1,205,477 |
|
Scheduled repayments of
long-term debt and settlement of related swaps |
(567,298 |
) |
(652,898 |
) |
Prepayments of
long-term debt and settlement of related swaps |
(457,426 |
) |
(702,115 |
) |
Debt issuance
costs |
(14,128 |
) |
(17,268 |
) |
Proceeds from credit
facility due to affiliates |
125,000 |
|
— |
|
Proceeds from issuance
of preferred units |
120,000 |
|
— |
|
Proceeds from issuance
of common units and warrants |
— |
|
640,595 |
|
Repurchase of preferred
units |
— |
|
(250,022 |
) |
Expenses relating to
equity offerings |
(3,997 |
) |
(12,155 |
) |
Cash distributions paid
by the Partnership |
(46,675 |
) |
(60,593 |
) |
Cash distributions paid
by subsidiaries to non-controlling interests |
(12,048 |
) |
(9,891 |
) |
Equity contribution
from joint venture partners |
— |
|
6,000 |
|
Contribution from
non-controlling interest to subsidiaries |
1,500 |
|
— |
|
Other |
(964 |
) |
(4,183 |
) |
Net financing cash flow |
(121,338 |
) |
142,947 |
|
INVESTING
ACTIVITIES |
|
|
Net payments for
vessels and equipment, including advances on newbuilding contracts
and conversion costs |
(233,736 |
) |
(533,260 |
) |
Proceeds from sale of
vessels and equipment |
30,049 |
|
13,100 |
|
Investment in equity
accounted joint ventures |
(3,000 |
) |
(25,824 |
) |
Direct financing lease
payments received |
5,414 |
|
5,844 |
|
Acquisition of companies from Teekay Corporation (net of cash
acquired of $26.6 million) |
25,254 |
|
— |
|
Net investing cash flow |
(176,019 |
) |
(540,140 |
) |
Decrease in cash, cash
equivalents and restricted cash |
(16,714 |
) |
(91,993 |
) |
Cash,
cash equivalents and restricted cash, beginning of the year |
250,294 |
|
342,287 |
|
Cash, cash equivalents and restricted cash, end of the
year |
233,580 |
|
250,294 |
|
Teekay Offshore Partners L.P. |
Appendix A - Reconciliation of Non-GAAP Financial
Measures |
Adjusted EBITDA |
|
|
Three Months Ended |
Year Ended |
|
December 31, |
December 31, |
|
2018 |
2017 |
2018 |
2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
Net income
(loss) |
67,842 |
|
16,037 |
|
(123,945 |
) |
(299,442 |
) |
Depreciation and amortization |
91,023 |
|
85,658 |
|
372,290 |
|
309,975 |
|
Interest
expense, net of interest income |
52,209 |
|
42,120 |
|
195,797 |
|
152,183 |
|
Income tax expense (recovery) |
3,882 |
|
(4,187 |
) |
22,657 |
|
(98 |
) |
EBITDA |
214,956 |
|
139,628 |
|
466,799 |
|
162,618 |
|
Add (subtract) specific
income statement items affecting EBITDA: |
|
|
|
|
Write-down and (gain) on sale of vessels |
16,414 |
|
(148 |
) |
223,355 |
|
318,078 |
|
Realized
and unrealized loss (gain) on derivative instruments |
40,465 |
|
(4,708 |
) |
(12,808 |
) |
42,853 |
|
Equity
income |
(5,237 |
) |
(2,126 |
) |
(39,458 |
) |
(14,442 |
) |
Foreign
currency exchange loss |
3,344 |
|
693 |
|
9,413 |
|
14,006 |
|
Losses on
debt repurchases |
— |
|
3,102 |
|
55,479 |
|
3,102 |
|
Other
expense (income) - net |
40 |
|
95 |
|
4,602 |
|
(14,167 |
) |
Realized
(loss) gain on foreign currency forward contracts |
(1,470 |
) |
260 |
|
(1,228 |
) |
900 |
|
Total
adjustments |
53,556 |
|
(2,832 |
) |
239,355 |
|
350,330 |
|
Consolidated
Adjusted EBITDA |
268,512 |
|
136,796 |
|
706,154 |
|
512,948 |
|
Add:
Adjusted EBITDA from equity-accounted vessels (See Appendix D) |
25,270 |
|
10,624 |
|
92,637 |
|
33,360 |
|
Less: Adjusted EBITDA attributable to non-controlling interests
(1) |
(4,234 |
) |
(4,769 |
) |
(16,270 |
) |
(23,914 |
) |
Adjusted EBITDA |
289,548 |
|
142,651 |
|
782,521 |
|
522,394 |
|
|
(1) Adjusted EBITDA attributable to
non-controlling interests is summarized in the table below. |
|
Three Months Ended |
Year Ended |
|
December 31, |
December 31, |
|
2018 |
2017 |
2018 |
2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Net income
attributable to non-controlling interests |
1,476 |
|
638 |
|
(7,161 |
) |
3,764 |
|
Depreciation and amortization |
2,809 |
|
3,690 |
|
14,617 |
|
13,324 |
|
Interest expense, net of interest income |
439 |
|
487 |
|
2,064 |
|
1,549 |
|
EBITDA
attributable to non-controlling interests |
4,724 |
|
4,815 |
|
9,520 |
|
18,637 |
|
Add
(subtract) specific income statement items affecting EBITDA: |
|
|
|
|
(Gain) on sale and write-down of vessels |
(500 |
) |
— |
|
6,711 |
|
5,400 |
|
Foreign exchange loss (gain) |
10 |
|
(46 |
) |
39 |
|
(123 |
) |
Total adjustments |
(490 |
) |
(46 |
) |
6,750 |
|
5,277 |
|
Adjusted EBITDA attributable to non-controlling
interests |
4,234 |
|
4,769 |
|
16,270 |
|
23,914 |
|
Teekay Offshore Partners L.P. |
Appendix B - Reconciliation of Non-GAAP Financial
Measures |
Adjusted Net Income |
|
|
Three Months Ended |
Year Ended |
|
December 31, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2017 |
(in thousands of U.S. Dollars, except per unit
data) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Net income (loss) – GAAP
basis |
67,842 |
|
16,037 |
|
(123,945 |
) |
(299,442 |
) |
Adjustments: |
|
|
|
|
Net income (loss) attributable to non-controlling
interests |
1,476 |
|
638 |
|
(7,161 |
) |
3,764 |
|
Net
income (loss) attributable to the partners and preferred
unitholders |
66,366 |
|
15,399 |
|
(116,784 |
) |
(303,206 |
) |
Add
(subtract) specific items affecting net income (loss): |
|
|
|
|
Write-down and (gain) on sale of vessels |
16,414 |
|
(148 |
) |
223,355 |
|
318,078 |
|
Unrealized loss (gain) on derivative instruments (1) |
34,719 |
|
(12,808 |
) |
(52,047 |
) |
(34,543 |
) |
Realized loss on interest rate swap amendments |
— |
|
— |
|
16,250 |
|
37,950 |
|
Foreign currency exchange loss (gain) (2) |
3,201 |
|
(757 |
) |
6,532 |
|
3,222 |
|
Losses on debt repurchases |
— |
|
3,102 |
|
55,479 |
|
3,102 |
|
Other expense (income) - net |
40 |
|
95 |
|
4,602 |
|
(14,167 |
) |
Other adjustments (3) |
— |
|
9,642 |
|
2,164 |
|
27,710 |
|
Deferred income tax expense (recovery) relating to Norwegian
tax structure |
2,719 |
|
(4,724 |
) |
18,822 |
|
(2,669 |
) |
Adjustments related to equity-accounted vessels (4) |
6,514 |
|
1,482 |
|
(2,036 |
) |
889 |
|
Adjustments related to non-controlling interests (5) |
490 |
|
46 |
|
(6,750 |
) |
(5,277 |
) |
Total adjustments |
64,097 |
|
(4,070 |
) |
266,371 |
|
334,295 |
|
Adjusted net income attributable to the
partners and preferred unitholders |
130,463 |
|
11,329 |
|
149,587 |
|
31,089 |
|
Preferred
unitholders' interest in adjusted net income |
8,038 |
|
5,376 |
|
31,485 |
|
42,065 |
|
General
Partner's interest in adjusted net income |
931 |
|
45 |
|
898 |
|
(197 |
) |
Limited
partners' interest in adjusted net income |
121,494 |
|
5,908 |
|
117,204 |
|
(10,779 |
) |
Limited
partners' interest in adjusted net income per common unit,
basic |
0.30 |
|
0.01 |
|
0.29 |
|
0.04 |
|
Weighted-average number of common units outstanding,
basic |
410,314,977 |
|
410,045,210 |
|
410,261,239 |
|
220,755,937 |
|
|
(1) Reflects the net unrealized loss (gain) due
to changes in the mark-to-market value of interest rate swaps and
foreign currency forward contracts that are not designated as
hedges for accounting purposes and hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes. |
(2) Foreign currency exchange loss (gain)
primarily relates to the Partnership's revaluation of all foreign
currency-denominated assets and liabilities based on the prevailing
exchange rate at the end of each reporting period and unrealized
gain or loss related to the Partnership's cross-currency swaps
related to the Partnership's NOK bonds, and excludes the realized
gain or loss relating to the Partnership's cross-currency swaps and
NOK bonds. |
(3) Other adjustments primarily reflects voyage
expenses, vessel operating expense, depreciation and amortization
expense, general and administrative expenses relating to the
Beothuk Spirit and Norse Spirit shuttle tankers prior to the
commencement of the East Coast of Canada charter contracts and the
Petrojarl I FPSO unit while undergoing upgrades and realized losses
on interest rate swaps relating to the Pioneiro de Libra FPSO
conversion and the ALP towage newbuildings for the three months and
year ended December 31, 2017. Other adjustments also include
non-recurring general and administrative expenses relating to an
investment by Brookfield and an increase in the Piranema Spirit
FPSO rate reduction contingency for the year ended December 31,
2017. |
(4) Reflects the Partnership's proportionate
share of specific items affecting the net income of the Cidade de
Itajai FPSO unit and Pioneiro de Libra FPSO unit equity-accounted
joint ventures, including unrealized gain or loss on derivative
instruments and foreign exchange gain or loss. |
(5) Items affecting net income (loss) include
amounts attributable to the Partnership’s consolidated
non-wholly-owned subsidiaries. Each item affecting net income
(loss) is 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 adjustments
relate to (gain) on sale and write-down of vessels and foreign
currency exchange loss (gain) within the Partnership's consolidated
non-wholly-owned subsidiaries. |
Teekay Offshore Partners L.P. |
Appendix C - Adjusted EBITDA by Segment |
|
|
Three Months Ended December 31,
2018 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSOSegment |
ShuttleTankerSegment |
FSOSegment |
UMSSegment |
TowageSegment |
ConventionalTankerSegment |
Corporate /Eliminations |
Total |
Revenues |
143,651 |
|
206,212(2) |
36,734 |
|
36,536(2) |
15,252 |
|
6,828 |
|
— |
|
445,213 |
|
Voyage expenses |
— |
|
(27,325 |
) |
(216 |
) |
(4 |
) |
(8,447 |
) |
(3,410 |
) |
— |
|
(39,402 |
) |
Vessel operating
expenses |
(52,242 |
) |
(37,794 |
) |
(10,372 |
) |
(702 |
) |
(7,482 |
) |
— |
|
— |
|
(108,592 |
) |
Time-charter hire
expenses |
— |
|
(9,073 |
) |
— |
|
— |
|
— |
|
(4,208 |
) |
— |
|
(13,281 |
) |
Depreciation and
amortization |
(36,775 |
) |
(37,027 |
) |
(10,422 |
) |
(1,652 |
) |
(5,147 |
) |
— |
|
— |
|
(91,023 |
) |
General and
administrative |
(8,515 |
) |
(3,876 |
) |
(510 |
) |
(819 |
) |
(525 |
) |
(90 |
) |
— |
|
(14,335 |
) |
Write-down and gain on
sale of vessels |
— |
|
(16,414 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(16,414 |
) |
Restructuring recovery |
379 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
379 |
|
Income (loss)
from vessel operations |
46,498 |
|
74,703 |
|
15,214 |
|
33,359 |
|
(6,349 |
) |
(880 |
) |
— |
|
162,545 |
|
Depreciation and amortization |
36,775 |
|
37,027 |
|
10,422 |
|
1,652 |
|
5,147 |
|
— |
|
— |
|
91,023 |
|
Write-down and gain on
sale of vessels |
— |
|
16,414 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
16,414 |
|
Realized loss on
foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,470 |
) |
(1,470 |
) |
Total adjustments |
36,775 |
|
53,441 |
|
10,422 |
|
1,652 |
|
5,147 |
|
— |
|
(1,470 |
) |
105,967 |
|
Consolidated
Adjusted EBITDA |
83,273 |
|
128,144 |
|
25,636 |
|
35,011 |
|
(1,202 |
) |
(880 |
) |
(1,470 |
) |
268,512 |
|
Add: Adjusted EBITDA
from equity-accounted vessels (See Appendix D) |
25,270 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
25,270 |
|
Less: Adjusted EBITDA
attributable to non-controlling interests |
— |
|
(4,106 |
) |
(128 |
) |
— |
|
— |
|
— |
|
— |
|
(4,234 |
) |
Adjusted EBITDA |
108,543 |
|
124,038 |
|
25,508 |
|
35,011 |
|
(1,202 |
) |
(880 |
) |
(1,470 |
) |
289,548 |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2018 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSOSegment |
ShuttleTankerSegment |
FSOSegment |
UMSSegment |
TowageSegment |
ConventionalTankerSegment |
Corporate /Eliminations(1) |
Total |
Revenues |
533,186 |
|
636,413(2) |
136,557 |
|
36,536(2) |
53,327 |
|
21,325 |
|
(920 |
) |
1,416,424 |
|
Voyage expenses |
— |
|
(109,796 |
) |
(769 |
) |
(47 |
) |
(28,925 |
) |
(12,453 |
) |
182 |
|
(151,808 |
) |
Vessel operating
expenses |
(214,623 |
) |
(149,226 |
) |
(42,913 |
) |
(3,679 |
) |
(27,346 |
) |
— |
|
116 |
|
(437,671 |
) |
Time-charter hire
expenses |
— |
|
(36,421 |
) |
— |
|
— |
|
— |
|
(16,195 |
) |
— |
|
(52,616 |
) |
Depreciation and
amortization |
(145,451 |
) |
(155,932 |
) |
(44,077 |
) |
(6,611 |
) |
(20,323 |
) |
— |
|
104 |
|
(372,290 |
) |
General and
administrative |
(34,052 |
) |
(21,763 |
) |
(2,174 |
) |
(3,547 |
) |
(3,531 |
) |
(360 |
) |
— |
|
(65,427 |
) |
Write-down and loss on
sale of vessels |
(180,200 |
) |
(43,155 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(223,355 |
) |
Restructuring charge |
(1,520 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,520 |
) |
(Loss) income
from vessel operations |
(42,660 |
) |
120,120 |
|
46,624 |
|
22,652 |
|
(26,798 |
) |
(7,683 |
) |
(518 |
) |
111,737 |
|
Depreciation and amortization |
145,451 |
|
155,932 |
|
44,077 |
|
6,611 |
|
20,323 |
|
— |
|
(104 |
) |
372,290 |
|
Write-down and loss on
sale of vessels |
180,200 |
|
43,155 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
223,355 |
|
Realized loss on
foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,228 |
) |
(1,228 |
) |
Eliminations upon
consolidation |
— |
|
— |
|
— |
|
— |
|
(622 |
) |
|
622 |
|
— |
|
Total adjustments |
325,651 |
|
199,087 |
|
44,077 |
|
6,611 |
|
19,701 |
|
— |
|
(710 |
) |
594,417 |
|
Consolidated
Adjusted EBITDA |
282,991 |
|
319,207 |
|
90,701 |
|
29,263 |
|
(7,097 |
) |
(7,683 |
) |
(1,228 |
) |
706,154 |
|
Add: Adjusted EBITDA
from equity-accounted vessels (See Appendix D) |
92,637 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
92,637 |
|
Less: Adjusted EBITDA
attributable to non-controlling interests |
— |
|
(15,593 |
) |
(677 |
) |
— |
|
— |
|
— |
|
— |
|
(16,270 |
) |
Adjusted EBITDA |
375,628 |
|
303,614 |
|
90,024 |
|
29,263 |
|
(7,097 |
) |
(7,683 |
) |
(1,228 |
) |
782,521 |
|
|
(1) Includes revenues and expenses earned and
incurred between segments of Teekay Offshore during the year ended
December 31, 2018. |
(2) Includes $55.0 million and $36.5 million of
revenue recognized in the Shuttle Tanker and UMS segments,
respectively, related to the October 2018 settlement with
Petrobras, in relation to the previously-terminated charter
contracts of the HiLoad DP unit and Arendal Spirit UMS. |
|
Three Months Ended December 31,
2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSOSegment |
ShuttleTankerSegment |
FSOSegment |
UMSSegment |
TowageSegment |
ConventionalTankerSegment |
Corporate /Eliminations (1) |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
118,675 |
|
132,106 |
|
34,409 |
|
321 |
|
12,212 |
|
3,540 |
|
(5,535 |
) |
295,728 |
|
Voyage expenses |
— |
|
(22,348 |
) |
(159 |
) |
(1,152 |
) |
(5,617 |
) |
(248 |
) |
519 |
|
(29,005 |
) |
Vessel operating
expenses |
(38,165 |
) |
(42,671 |
) |
(10,337 |
) |
(5,329 |
) |
(6,145 |
) |
— |
|
4,547 |
|
(98,100 |
) |
Time-charter hire
expenses |
— |
|
(14,399 |
) |
— |
|
— |
|
— |
|
(3,976 |
) |
— |
|
(18,375 |
) |
Depreciation and
amortization |
(34,064 |
) |
(33,935 |
) |
(11,678 |
) |
(1,659 |
) |
(4,522 |
) |
— |
|
200 |
|
(85,658 |
) |
General and
administrative |
(7,142 |
) |
(4,717 |
) |
(508 |
) |
(884 |
) |
(1,042 |
) |
(90 |
) |
— |
|
(14,383 |
) |
(Loss) gain on sale of
vessels |
— |
|
(244 |
) |
392 |
|
— |
|
— |
|
— |
|
— |
|
148 |
|
Restructuring (charge) recovery |
— |
|
(210 |
) |
— |
|
881 |
|
— |
|
— |
|
— |
|
671 |
|
Income (loss)
from vessel operations |
39,304 |
|
13,582 |
|
12,119 |
|
(7,822 |
) |
(5,114 |
) |
(774 |
) |
(269 |
) |
51,026 |
|
Depreciation and amortization |
34,064 |
|
33,935 |
|
11,678 |
|
1,659 |
|
4,522 |
|
— |
|
(200 |
) |
85,658 |
|
Loss (gain) on sale of
vessels |
— |
|
244 |
|
(392 |
) |
— |
|
— |
|
— |
|
— |
|
(148 |
) |
Realized gain on
foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
260 |
|
260 |
|
Eliminations upon
consolidation |
— |
|
— |
|
— |
|
— |
|
(469 |
) |
— |
|
469 |
|
— |
|
Total adjustments |
34,064 |
|
34,179 |
|
11,286 |
|
1,659 |
|
4,053 |
|
— |
|
529 |
|
85,770 |
|
Consolidated
Adjusted EBITDA |
73,368 |
|
47,761 |
|
23,405 |
|
(6,163 |
) |
(1,061 |
) |
(774 |
) |
260 |
|
136,796 |
|
Add: Adjusted EBITDA
from equity-accounted vessels (See Appendix D) |
10,624 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
10,624 |
|
Less: Adjusted EBITDA
attributable to non-controlling interests |
— |
|
(4,551 |
) |
(218 |
) |
— |
|
— |
|
— |
|
— |
|
(4,769 |
) |
Adjusted EBITDA |
83,992 |
|
43,210 |
|
23,187 |
|
(6,163 |
) |
(1,061 |
) |
(774 |
) |
260 |
|
142,651 |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
|
FPSOSegment |
ShuttleTankerSegment |
FSOSegment |
UMSSegment |
TowageSegment |
ConventionalTankerSegment |
Corporate /Eliminations (1) |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
458,388 |
|
536,852 |
|
66,901 |
|
4,236 |
|
38,771 |
|
14,022 |
|
(8,886 |
) |
1,110,284 |
|
Voyage expenses |
— |
|
(80,964 |
) |
(1,172 |
) |
(1,152 |
) |
(17,727 |
) |
(359 |
) |
1,930 |
|
(99,444 |
) |
Vessel operating
expenses |
(149,153 |
) |
(129,517 |
) |
(25,241 |
) |
(33,656 |
) |
(21,074 |
) |
10 |
|
5,067 |
|
(353,564 |
) |
Time-charter hire
expenses |
— |
|
(62,899 |
) |
— |
|
— |
|
(925 |
) |
(16,491 |
) |
— |
|
(80,315 |
) |
Depreciation and
amortization |
(143,559 |
) |
(125,648 |
) |
(19,406 |
) |
(6,566 |
) |
(15,578 |
) |
— |
|
782 |
|
(309,975 |
) |
General and
administrative |
(33,046 |
) |
(17,425 |
) |
(1,864 |
) |
(5,068 |
) |
(4,486 |
) |
(360 |
) |
— |
|
(62,249 |
) |
Write-down and loss on
sale of vessels |
(265,229 |
) |
(51,741 |
) |
(1,108 |
) |
— |
|
— |
|
— |
|
— |
|
(318,078 |
) |
Restructuring charge |
(450 |
) |
(210 |
) |
— |
|
(2,004 |
) |
— |
|
— |
|
— |
|
(2,664 |
) |
(Loss) income
from vessel operations |
(133,049 |
) |
68,448 |
|
18,110 |
|
(44,210 |
) |
(21,019 |
) |
(3,178 |
) |
(1,107 |
) |
(116,005 |
) |
Depreciation and amortization |
143,559 |
|
125,648 |
|
19,406 |
|
6,566 |
|
15,578 |
|
— |
|
(782 |
) |
309,975 |
|
Write-down and loss on
sale of vessels |
265,229 |
|
51,741 |
|
1,108 |
|
— |
|
— |
|
— |
|
— |
|
318,078 |
|
Realized gain on
foreign currency forward contracts |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
900 |
|
900 |
|
Eliminations upon
consolidation |
— |
|
— |
|
— |
|
— |
|
(1,889 |
) |
— |
|
1,889 |
|
— |
|
Total adjustments |
408,788 |
|
177,389 |
|
20,514 |
|
6,566 |
|
13,689 |
|
— |
|
2,007 |
|
628,953 |
|
Consolidated
Adjusted EBITDA |
275,739 |
|
245,837 |
|
38,624 |
|
(37,644 |
) |
(7,330 |
) |
(3,178 |
) |
900 |
|
512,948 |
|
Add: Adjusted EBITDA
from equity-accounted vessels (See Appendix D) |
33,360 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
33,360 |
|
Less: Adjusted EBITDA
attributable to non-controlling interests |
— |
|
(23,035 |
) |
(879 |
) |
— |
|
— |
|
— |
|
— |
|
(23,914 |
) |
Adjusted EBITDA |
309,099 |
|
222,802 |
|
37,745 |
|
(37,644 |
) |
(7,330 |
) |
(3,178 |
) |
900 |
|
522,394 |
|
|
(1) Includes revenues and expenses earned and
incurred between segments of Teekay Offshore during the three
months and year ended December 31, 2017. |
Teekay Offshore Partners L.P. |
Appendix D - Reconciliation of Non-GAAP Financial
Measures |
Adjusted EBITDA From Equity-Accounted Vessels |
|
|
Three Months Ended |
Three Months Ended |
|
December 31, 2018 |
December 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
|
At 100% |
Partnership's 50% |
At 100% |
Partnership's 50% |
Revenues |
77,566 |
|
38,783 |
|
29,482 |
|
14,741 |
|
Vessel and other
operating expenses |
(27,026 |
) |
(13,513 |
) |
(8,234 |
) |
(4,117 |
) |
Depreciation and
amortization |
(15,905 |
) |
(7,952 |
) |
(8,226 |
) |
(4,113 |
) |
Income from vessel
operations of equity-accounted vessels |
34,635 |
|
17,318 |
|
13,022 |
|
6,511 |
|
Net interest expense
(1) |
(11,441 |
) |
(5,721 |
) |
(8,538 |
) |
(4,269 |
) |
Realized and unrealized
(loss) gain on derivative instruments (2) |
(13,325 |
) |
(6,663 |
) |
764 |
|
382 |
|
Foreign
currency exchange gain (loss) |
314 |
|
157 |
|
(1,100 |
) |
(550 |
) |
Total other items |
(24,452 |
) |
(12,227 |
) |
(8,874 |
) |
(4,437 |
) |
Net income / equity
income of equity-accounted vessels before income tax expense |
10,183 |
|
5,091 |
|
4,148 |
|
2,074 |
|
Income
tax recovery |
291 |
|
146 |
|
103 |
|
52 |
|
Net income /
equity income of equity-accounted vessels |
10,474 |
|
5,237 |
|
4,251 |
|
2,126 |
|
Depreciation and amortization |
15,905 |
|
7,952 |
|
8,226 |
|
4,113 |
|
Net
interest expense (1) |
11,441 |
|
5,721 |
|
8,538 |
|
4,269 |
|
Income tax recovery |
(291 |
) |
(146 |
) |
(103 |
) |
(52 |
) |
EBITDA |
37,529 |
|
18,764 |
|
20,912 |
|
10,456 |
|
Add (subtract) specific
items affecting EBITDA: |
|
|
|
|
Realized
and unrealized loss (gain) on derivative instruments (2) |
13,325 |
|
6,663 |
|
(764 |
) |
(382 |
) |
Foreign currency exchange (gain) loss |
(314 |
) |
(157 |
) |
1,100 |
|
550 |
|
Adjusted EBITDA from equity-accounted vessels |
50,540 |
|
25,270 |
|
21,248 |
|
10,624 |
|
|
(1) Net interest expense for the three months
ended December 31, 2017 includes an unrealized loss of $3.1 million
($1.5 million at the Partnership's 50% share) related to interest
rate swaps designated and qualifying as cash flow hedges for the
Pioneiro de Libra FPSO unit. |
(2) Realized and unrealized (loss) gain on
derivative instruments includes an unrealized loss of $13.3 million
($6.7 million at the Partnership’s 50% share) for the three months
ended December 31, 2018 related to interest rate swaps for the
Cidade de Itajai and Pioneiro de Libra FPSO units and an unrealized
gain of $1.2 million ($0.6 million at the Partnership’s 50% share)
for the three months ended December 31, 2017 related to interest
rate swaps for the Cidade de Itajai FPSO unit. |
|
Year Ended |
Year Ended |
|
December 31, 2018 |
December 31, 2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
|
At 100% |
Partnership's 50% |
At 100% |
Partnership's 50% |
Revenues |
262,205 |
|
131,103 |
|
90,662 |
|
45,331 |
|
Vessel and other
operating expenses |
(76,931 |
) |
(38,466 |
) |
(23,942 |
) |
(11,971 |
) |
Depreciation and
amortization |
(61,893 |
) |
(30,947 |
) |
(21,439 |
) |
(10,719 |
) |
Income from vessel
operations of equity-accounted vessels |
123,381 |
|
61,690 |
|
45,281 |
|
22,641 |
|
Net interest expense
(1) |
(37,166 |
) |
(18,585 |
) |
(14,874 |
) |
(7,437 |
) |
Realized and unrealized
loss on derivative instruments (2) |
(7,047 |
) |
(3,523 |
) |
(139 |
) |
(70 |
) |
Foreign
currency exchange gain (loss) |
636 |
|
318 |
|
(1,178 |
) |
(589 |
) |
Total other items |
(43,577 |
) |
(21,790 |
) |
(16,191 |
) |
(8,096 |
) |
Net income / equity
income of equity-accounted vessels before income tax expense |
79,804 |
|
39,900 |
|
29,090 |
|
14,545 |
|
Income
tax expense |
(883 |
) |
(442 |
) |
(206 |
) |
(103 |
) |
Net income /
equity income of equity-accounted vessels |
78,921 |
|
39,458 |
|
28,884 |
|
14,442 |
|
Depreciation and amortization |
61,893 |
|
30,947 |
|
21,439 |
|
10,719 |
|
Net
interest expense (1) |
37,166 |
|
18,585 |
|
14,874 |
|
7,437 |
|
Income tax expense |
883 |
|
442 |
|
206 |
|
103 |
|
EBITDA |
178,863 |
|
89,432 |
|
65,403 |
|
32,701 |
|
Add (subtract) specific
items affecting EBITDA: |
|
|
|
|
Realized
and unrealized loss on derivative instruments (2) |
7,047 |
|
3,523 |
|
139 |
|
70 |
|
Foreign currency exchange (gain) loss |
(636 |
) |
(318 |
) |
1,178 |
|
589 |
|
Adjusted EBITDA from equity-accounted vessels |
185,274 |
|
92,637 |
|
66,720 |
|
33,360 |
|
|
(1) Net interest expense for the years ended
December 31, 2018 and 2017 includes an unrealized gain of $9.7
million ($4.9 million at the Partnership's 50% share) and an
unrealized loss of $2.6 million ($1.3 million at the Partnership's
50% share), respectively, related to interest rate swaps designated
and qualifying as cash flow hedges for the Pioneiro de Libra FPSO
unit. |
(2) Realized and unrealized loss on derivative
instruments includes an unrealized loss of $6.3 million ($3.1
million at the Partnership's 50% share) for the year ended December
31, 2018 related to interest rate swaps for the Cidade de Itajai
and Pioneiro de Libra FPSO units and an unrealized gain of $2.0
million ($1.0 million at the Partnership’s 50% share) for the year
ended December 31, 2017 related to interest rate swaps for the
Cidade de Itajai FPSO unit. |
Teekay Offshore Partners L.P. |
Appendix E - Reconciliation of Non-GAAP
Financial Measures |
|
Reconciliation of total CFVO to Adjusted EBITDA is
summarized in the table below: |
|
|
Three Months Ended |
Year Ended |
|
March 31, |
June 30, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2018 |
2018 |
2018 |
2018 |
2018 |
2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Total CFVO, as
previously reported (1) |
161,538 |
|
162,242 |
|
167,323 |
|
271,672 |
|
762,775 |
|
544,972 |
|
Adjustments
no longer made: |
|
|
|
|
|
|
Amortization of non-cash portion of revenue contracts (2) |
4,374 |
|
4,205 |
|
9,058 |
|
22,578 |
|
40,215 |
|
16,032 |
|
Termination of Arendal Spirit UMS charter contract (3) |
— |
|
— |
|
— |
|
— |
|
— |
|
(8,888 |
) |
Other adjustments |
(1,066 |
) |
(1,305 |
) |
(1,360 |
) |
(468 |
) |
(4,199 |
) |
(5,808 |
) |
New
adjustment: |
|
|
|
|
|
|
Adjusted EBITDA attributable to non-controlling
interests |
(4,399 |
) |
(4,944 |
) |
(2,693 |
) |
(4,234 |
) |
(16,270 |
) |
(23,914 |
) |
Adjusted EBITDA |
160,447 |
|
160,198 |
|
172,328 |
|
289,548 |
|
782,521 |
|
522,394 |
|
|
(1) Please refer to the Appendices to the
applicable previous releases announcing the respective quarterly
and annual results for the definition of this term and
reconciliations of this non-GAAP financial measure to the most
directly comparable financial measure under GAAP. |
(2) Reflects the amortization of non-cash
deferred revenue on the Piranema Spirit and Knarr FPSO units. |
(3) Reflects the write-off of deferred revenues
and operating expenses as a result of the termination of the
Arendal Spirit UMS charter contract in late-April 2017. |
Reconciliation of Adjusted Net Income as previously
defined and reported to Adjusted Net Income as now defined is
summarized in the table below: |
|
|
Three Months Ended |
Year Ended |
|
March 31, |
June 30, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2018 |
2018 |
2018 |
2018 |
2018 |
2017 |
(in thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Adjusted net
income (loss) attributable to the partners and preferred
unitholders, as previously defined and reported (1) |
13,701 |
|
(732 |
) |
7,053 |
|
130,463 |
|
150,485 |
|
39,977 |
|
Adjustments
no longer made: |
|
|
|
|
|
|
Amortization of non-cash portion of revenue contracts (2) |
— |
|
— |
|
4,507 |
|
— |
|
4,507 |
|
— |
|
Termination of Arendal Spirit UMS charter contract
(3) |
— |
|
— |
|
— |
|
— |
|
— |
|
(8,888 |
) |
Depreciation policy change (4) |
(5,405 |
) |
— |
|
— |
|
— |
|
(5,405 |
) |
— |
|
Adjusted net income (loss) attributable to
partners and preferred unitholders, as
re-defined |
8,296 |
|
(732 |
) |
11,560 |
|
130,463 |
|
149,587 |
|
31,089 |
|
|
(1) Please refer to the Appendices to the
applicable previous releases announcing the respective quarterly
and annual results for the definition of this term and
reconciliations of this non-GAAP financial measure to the most
directly comparable financial measure under GAAP. |
(2) Reflects the accelerated portion of
amortization of non-cash deferred revenue on the Piranema Spirit
FPSO unit. |
(3) Reflects the write-off of deferred revenues
and operating expenses as a result of the termination of the
Arendal Spirit UMS charter contract in late-April 2017. |
(4) Relates to an increase in depreciation
expense as a result of the change in the useful life and residual
value estimates of certain of the Partnership's shuttle tankers
effective in the first quarter of 2018. |
|
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, among others:
the timing and amount of future settlement payments from Petrobras,
including the impact on revenue and of any Offset Amounts; the
timing and certainty of the effectiveness of the agreement with
Alpha to develop the Cheviot field, including satisfaction by Alpha
of the financing and other conditions precedent to its
effectiveness, which conditions remain out of our control; the
timing and certainty of first oil on the Cheviot field; the
expected funding from Alpha for the life extension and upgrade
costs relating to the Petrojarl Varg FPSO; the contract extension
for the Piranema Spirit FPSO and the related impact on EBITDA; and
the timing of shuttle tanker newbuildings and the commencement of
related contracts. 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:
changes in exploration, production and storage of offshore oil and
gas, either generally or in particular regions that would impact
expected future growth, particularly in or related to North Sea,
Brazil and East Coast of Canada offshore fields; significant
changes in oil prices; variations in expected levels of field
maintenance; increased operating expenses; potential early
termination of contracts; shipyard delivery delays and cost
overruns; delays in the commencement of charter contracts; the
inability of charterers to make future charter payments; the
inability of the Partnership to renew or replace long-term
contracts on existing vessels; the ability to fund the
Partnership’s remaining capital commitments and debt maturities;
the Partnership’s ability to collect the amounts due under the
settlement agreement with Petrobras; the ability of Alpha to
satisfy all of the conditions precedent relating to the contract
with Alpha, including obtaining required funding for the project
and the timing of any such satisfaction; less than expected revenue
generated by, or higher than expected expenses and costs incurred
relating to, the Piranema Spirit 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, 2017. 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.
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