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, 2017.
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 (2) |
2016 |
2017 |
2016 |
(in
thousands of U.S. Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
Revenues |
295,728 |
273,626 |
|
274,920 |
1,110,284 |
|
1,152,390 |
|
Income
(loss) from vessel operations |
51,026 |
(273,707 |
) |
56,544 |
(116,005 |
) |
230,853 |
|
Equity
income |
2,126 |
4,416 |
|
4,087 |
14,442 |
|
17,933 |
|
Net income
(loss) |
16,037 |
(320,276 |
) |
96,266 |
(299,442 |
) |
44,475 |
|
Net income
(loss) attributable to the partners and preferred unitholders |
15,399 |
(317,491 |
) |
91,953 |
(303,206 |
) |
32,617 |
|
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
Total cash
flow from vessel operations (CFVO) (1) |
144,903 |
124,181 |
|
134,839 |
544,972 |
|
584,322 |
|
Distributable cash flow (DCF) (1) |
34,449 |
13,382 |
|
21,627 |
105,706 |
|
161,329 |
|
Adjusted
net income attributable to the partners and preferred unitholders
(1) |
11,329 |
3,064 |
|
8,487 |
39,977 |
|
86,007 |
|
- 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).
- Please refer to Appendices in the third quarter of 2017 release
for a reconciliation of these non-GAAP measures to the most
directly comparable financial measures under GAAP.
GAAP net income for the fourth quarter of 2017,
compared to the same quarter of the prior year, was impacted by
pre-operational costs related to the transit of the shuttle tanker
newbuildings, the Beothuk Spirit and Norse Spirit, to the East
Coast of Canada during the fourth quarter of 2017, and a decrease
in unrealized gains on derivative instruments. GAAP net
income and non-GAAP adjusted net income for the fourth quarter of
2017, compared to the same quarter of the prior year, were
positively impacted by the commencement of operations of the
Randgrid FSO and Pioneiro de Libra FPSO in the fourth quarter of
2017, partially offset by non-recurring repair and maintenance
expenses in the fourth quarter of 2017 relating to two of the
Partnership's redelivered shuttle tankers.
CEO Commentary
“During the fourth quarter of 2017, we generated
higher cash flow from vessel operations driven mainly by the
delivery and contract start-up of two of our growth projects
combined with lower G&A expenses," commented Ingvild Sæther,
President and CEO of Teekay Offshore Group Ltd.
“Recently, we finalized an agreement and are
nearing completion of a second agreement in our FPSO segment which
will extend the contract durations with existing customers on
existing fields. We are pleased to report that we have
entered into an agreement with Petrobras to extend the employment
on the Ostras FPSO from January 2018 to May 2018, plus an extension
option, and we are nearing completion of the previously-announced
contract extension with Premier Oil for the Voyageur Spirit FPSO
out to at least April 2019,” commented Ms. Sæther. "In
addition, ALP Maritime, our towage subsidiary, was recently awarded
its largest contract to-date, which requires the use of five of its
vessels."
“Looking ahead, we expect our cash flows to
continue to grow as we pivot from project execution to harvesting
cash flows from our projects, which will also further strengthen
our balance sheet as we naturally delever over time,” Ms. Sæther
commented. “Over the past five months, the Randgrid FSO,
Pioneiro de Libra FPSO and two East Coast Canada shuttle tanker
newbuildings commenced their respective charter contracts and we
completed the upgrades on our most challenging project, the
Petrojarl I FPSO, which arrived at its Brazilian oil field in early
January 2018. This FPSO is now undergoing field installation
and testing activities and it is expected to commence its charter
contract in April 2018. In aggregate, we expect these
projects, along with our third East Coast Canada shuttle tanker,
which is scheduled to commence its contract in May of this year, to
generate approximately $200 million of annual cash flow from vessel
operations on an annualized basis with a weighted average contract
length of approximately 10 years.”
"2017 represented a challenging but ultimately
transformative year for Teekay Offshore," continued Ms.
Sæther. “We successfully closed our strategic partnership
with Brookfield, which enhanced our financial position while
positioning us to better service our customers and take advantage
of future growth opportunities as the global energy markets
recover."
Summary of Recent Events
Growth Projects Update
In October 2017, the Randgrid FSO,
which was converted from one of the Partnership’s shuttle tankers
at Sembcorp’s Sembawang shipyard in Singapore, commenced its
three-year charter contract with Statoil ASA (Statoil) on the Gina
Krog oil and gas field in the Norwegian sector of the North Sea.
This contract has 12 additional one-year options to extend.
In late-November 2017, the 50%-owned Pioneiro de
Libra FPSO, which was converted from one of the Partnership’s
shuttle tankers at Sembcorp’s Jurong shipyard in Singapore,
commenced its 12-year charter contract with a consortium of
international oil companies, including Petrobras, Total S.A.,
Shell, China National Petroleum Corporation and China National
Offshore Oil Corporation, on the giant Libra block in the Santos
Basin offshore Brazil. This joint venture is equity accounted by
the Partnership and contributed only one month of cash flows in the
fourth quarter of 2017.
In late 2017, the Partnership took delivery of
the first two East Coast of Canada shuttle tanker newbuildings,
the Beothuk Spirit and the Norse Spirit, with the third
vessel, the Dorset Spirit, scheduled to deliver in early-March
2018. The first two newbuildings commenced long-term charter
contracts in December 2017 and January 2018 with a group of
companies that includes Canada Hibernia Holding Corporation,
Chevron Canada, Exxon Mobil, Husky Energy, Mosbacher Operating
Ltd., Murphy Oil, Nalcor Energy, Statoil and Suncor Energy, with
the third newbuilding scheduled to commence its long-term charter
contract in May 2018. The Beothuk Spirit and Norse Spirit replaced
existing in-chartered vessels servicing the East Coast of Canada,
the first of which the Partnership redelivered to its owner while
the second the Partnership repositioned to the North Sea to operate
in the Partnership's contract of affreightment (CoA) portfolio.
In December 2017, the Partnership completed the
upgrades of the Petrojarl I FPSO unit which arrived on the Atlanta
field in Brazil in January 2018. The unit is now undergoing field
installation and testing prior to commencing its five-year charter
contract with Queiroz Galvão Exploração e Produção SA (QGEP),
which is expected to occur in April 2018.
In October 2017 and February 2018, the
Partnership took delivery of the last two of four state-of-the-art
SX-157 Ulstein Design ultra-long distance towing and offshore
installation newbuildings, the ALP Sweeper and ALP Keeper,
constructed by Niigata Shipbuilding & Repair in Japan.
Recontracting of FPSO Units
In January 2018, the Partnership entered into a
contract extension with Petrobras to extend the employment of the
Ostras FPSO for four months at a slightly lower fixed rate.
Petrobras also has an option to extend the contract for an
additional two months to July 2018.
The Partnership is nearing completion of the
previously-announced contract extension with Premier Oil to extend
the employment of the Voyageur Spirit FPSO unit on the
Huntington field out to at least April 2019. The new contract,
which will take effect in April 2018, will include a fixed charter
rate component plus a component based on oil production and oil
price.
New Growth Projects
In November 2017, the Partnership declared
options with Samsung Heavy Industries Co. Ltd., to construct two
additional Suezmax DP2 shuttle tanker newbuildings, for an
aggregate fully built-up cost of
approximately $265 million. These newbuildings will be
constructed based on Teekay Offshore's New Shuttle Spirit design.
Upon delivery in 2020, these vessels will join the Partnership’s
CoA portfolio in the North Sea.
ALP Contract Award
In February 2018, ALP Maritime, the
Partnership’s towage subsidiary, was awarded a contract to provide
five vessels to perform mobilization and field installation
services in spring 2018. The contract is expected to require
approximately 330 vessel equivalent days to service the
project.
Operating Results
The following table highlights certain financial
information for Teekay Offshore’s six segments: the FPSO segment,
the shuttle tanker segment, the FSO segment, the UMS segment, the
towage segment and the conventional tanker segment (please refer to
the “Teekay Offshore’s Fleet” section of this release below and
Appendices C through E for further details).
|
|
|
Three Months Ended |
|
December 31, 2017 |
(in
thousands of U.S. Dollars) |
(unaudited) |
|
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker Segment |
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 |
|
Equity
income |
2,126 |
— |
— |
— |
|
— |
|
— |
|
— |
|
2,126 |
|
NON-GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
CFVO from
(used for) consolidated vessels (i)
|
69,391 |
47,869 |
24,698 |
(6,163 |
) |
(743 |
) |
(774 |
) |
— |
|
134,278 |
|
CFVO from
equity accounted vessels (i) |
10,625 |
— |
— |
— |
|
— |
|
— |
|
— |
|
10,625 |
|
Total CFVO (i) |
80,016 |
47,869 |
24,698 |
(6,163 |
) |
(743 |
) |
(774 |
) |
— |
|
144,903 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, 2016 |
(in
thousands of U.S. Dollars) |
(unaudited) |
|
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker Segment |
Eliminations |
Total |
GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Revenues |
116,429 |
129,092 |
12,037 |
3,821 |
|
9,794 |
|
3,747 |
|
— |
|
274,920 |
|
Income
(loss) from vessel operations |
33,310 |
32,677 |
1,576 |
(6,443 |
) |
(3,863 |
) |
(713 |
) |
— |
|
56,544 |
|
Equity
income |
4,087 |
— |
— |
— |
|
— |
|
— |
|
— |
|
4,087 |
|
NON-GAAP
FINANCIAL COMPARISON |
|
|
|
|
|
|
|
CFVO from
(used for) consolidated vessels (i) |
65,925 |
60,038 |
6,787 |
(4,820 |
) |
(435 |
) |
(713 |
) |
— |
|
126,782 |
|
CFVO from
equity accounted vessels (i) |
8,057 |
— |
— |
— |
|
— |
|
— |
|
— |
|
8,057 |
|
Total CFVO (i) |
73,982 |
60,038 |
6,787 |
(4,820 |
) |
(435 |
) |
(713 |
) |
— |
|
134,839 |
|
- 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 GAAP.
- 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 and cash flow from
vessel operations increased for the three months ended December 31,
2017, compared to the same quarter of the prior year, primarily due
to higher operational bonuses earned in the fourth quarter of 2017
compared to the same period in 2016, the commencement of operations
of the Pioneiro de Libra FPSO in late-November 2017 and
restructuring charges relating to the reorganization within the
Partnership’s FPSO segment during the fourth quarter of 2016.
Shuttle Tanker Segment
Income from vessel operations and cash flow from
vessel operations decreased for the three months ended December 31,
2017, compared to the same quarter of the prior year, primarily due
to the redelivery of the Nordic Brasilia and Nordic Rio in August
2017 and October 2017, respectively, and approximately $6 million
of non-recurring repairs and maintenance expenses incurred during
the fourth quarter of 2017 to prepare these vessels for trade in
the conventional tanker market, and pre-operational costs related
to the transit of the Beothuk Spirit and Norse Spirit to the East
Coast of Canada during the fourth quarter of 2017, which vessels
commenced their respective charter contracts in December 2017 and
January 2018, partially offset by higher charter renewal rates for
the Petronordic and Petroatlantic from April 2017, higher average
CoA rates, a decrease in crew costs due to changes in crew
composition and fewer in-chartered vessel days during the fourth
quarter of 2017.
FSO Segment
Income from vessel operations and cash flow from
vessel operations increased for the three months ended December 31,
2017, compared to the same quarter of the prior year, primarily due
to the Randgrid FSO commencing its charter contract in October
2017.
UMS Segment
Income from vessel operations and cash flow from
vessel operations decreased for the three months ended December 31,
2017, compared to the same quarter of the prior year, primarily due
to the non-payment of charter hire since November 2016 and the
subsequent termination by Petrobras of the charter contract for the
Arendal Spirit UMS in April 2017, and non-recurring expenses
related to the transit of the Arendal Spirit UMS to its lay-up
location during the fourth quarter of 2017, including $3.5 million
of internal towage costs which are eliminated in the Partnership's
consolidated results.
Towage Segment
Income from vessel operations decreased for the
three months ended December 31, 2017, compared to the same quarter
of the prior year, reflecting the challenging towage markets.
Teekay Offshore’s Fleet
The following table summarizes Teekay Offshore’s
fleet as of February 1, 2018.
|
Number of Vessels |
|
Owned Vessels |
Chartered-in Vessels |
Committed Newbuildings / Conversions /
Upgrade |
Total
|
FPSO Segment |
7 (i) |
— |
1 (ii) |
8 |
Shuttle Tanker
Segment |
29 (iii) |
2 |
5 (iv) |
36 |
FSO Segment |
6 |
— |
— |
6 |
UMS Segment |
1 |
— |
— |
1 |
Towage Segment |
9 |
— |
1 (v) |
10 |
Conventional
Segment |
— |
2 |
— |
2 |
Total |
52 |
4 |
7 |
63 |
- Includes two FPSO units, the Cidade de Itajai and Pioneiro de
Libra, in which Teekay Offshore’s ownership interest is 50
percent.
- Consists of the Petrojarl I FPSO upgrade project, which upgrade
was completed in December 2017 and which FPSO is scheduled to
commence operations in April 2018.
- Includes six shuttle tankers in which Teekay Offshore’s
ownership interest is 50 percent and one HiLoad DP unit.
- Includes one Suezmax-size DP2 shuttle tanker newbuilding
scheduled to commence employment under the East Coast of Canada
charter contracts in May 2018 and four Suezmax-size DP2 shuttle
tanker newbuildings scheduled for delivery in late-2019 through
2020, two of which will operate under Teekay Offshore's master
agreement with Statoil and two of which will join Teekay Offshore's
CoA portfolio in the North Sea.
- Consists of one long-distance towing and offshore installation
vessel newbuilding, ALP Keeper, delivered in February 2018.
Liquidity Update
In October 2017, as part of the previously
announced transaction with Brookfield Business Partners L.P. and
its affiliates, the Partnership exercised the call option to
repurchase the remaining outstanding balances under each of the
Partnership’s Norwegian Kroner (NOK) 420 million senior
unsecured bond agreement and the Partnership’s NOK 800 million
senior unsecured bond agreement. These repurchases were
settled in November 2017 in accordance with their respective
terms.
In January 2018, the Partnership completed a
public offering of $120 million of its 8.875% Series E
Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred
Units (Series E Preferred Units), including $5 million Series E
Preferred Units sold pursuant to the exercise of the underwriter's
over-allotment option, raising total net proceeds of approximately
$116 million.
As of December 31, 2017, the Partnership
had total liquidity of $221.9 million, excluding $24.3 million
included in restricted cash relating to amounts deposited in escrow
to pre-fund a portion of the remaining Petrojarl I FPSO upgrade
project costs. Giving pro-forma effect to the issuance of the
Series E Preferred Units completed in January 2018, the
Partnership's total liquidity as at December 31, 2017 would have
been approximately $338 million.
Conference Call
The Partnership plans to host a conference call
on Thursday, February 22, 2018 at 12:00 p.m. (ET) to discuss
the results for the fourth quarter and fiscal year of 2017. All
unitholders and interested parties are invited to listen to the
live conference call by choosing from the following options:
- By dialing 1-888-394-8218 or 647-484-0475, if outside North
America, and quoting conference ID code 8526810.
- 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 and Fiscal Year
2017 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 an
international provider of marine transportation, oil production,
storage, long-distance towing and offshore installation and
maintenance and safety services to the oil industry, primarily
focusing on oil production-related activities of its customers and
operating in offshore oil regions of the North Sea, Brazil and the
East Coast of Canada. Teekay Offshore is structured as a
publicly-traded master limited partnership (MLP) with consolidated
assets of approximately $5.6 billion, comprised of 63 offshore
assets, including floating production, storage and offloading
(FPSO) units, shuttle tankers, floating storage and offtake (FSO)
units, a unit for maintenance and safety (UMS), long-distance
towing and offshore installation vessels and conventional tankers.
The majority of Teekay Offshore's fleet is employed on medium-term,
stable contracts.
Teekay Offshore's common units 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. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Adjusted Net Income, and Distributable Cash Flow 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. The Partnership believes that certain investors
use this information to evaluate the Partnership’s financial
performance, as does management.
Non-GAAP Financial Measures
Cash Flow From (Used For) Vessel Operations
(CFVO) represents income (loss) from vessel operations before
depreciation and amortization expense, amortization of in-process
revenue contracts, vessel write-downs, gains or losses on the sale
of vessels, write-off of deferred revenues and operating expenses
and adjustments for direct financing leases to a cash basis, but
includes realized gains or losses on the settlement of foreign
currency forward contracts. CFVO from Consolidated Vessels
represents CFVO from vessels that are consolidated on the
Partnership’s financial statements. CFVO from Equity-Accounted
Vessels represents the Partnership’s proportionate share of CFVO
from its equity-accounted vessels. The Partnership does not control
its equity-accounted vessels and as a result, the Partnership does
not have the unilateral ability to determine whether the cash
generated by its equity-accounted vessels is retained within the
entities in which the Partnership holds the equity-accounted
investments or distributed to the Partnership and other owners. In
addition, the Partnership does not control the timing of such
distributions to the Partnership and other owners. Consequently,
readers are cautioned when using total CFVO as a liquidity measure
as the amount contributed from CFVO from Equity-Accounted Vessels
may not be available to the Partnership in the periods such CFVO is
generated by its equity-accounted vessels. CFVO is a non-GAAP
financial measure used by certain investors and management to
measure the operational financial performance of companies. Please
refer to Appendices D and E of this release for reconciliations of
these non-GAAP financial measures to income (loss) from vessel
operations and income from vessel operations of equity-accounted
vessels, respectively, the most directly comparable GAAP measures
reflected in the Partnership’s consolidated financial
statements.
Adjusted Net Income excludes items of income or
loss from GAAP net income (loss) that are typically excluded by
securities analysts in their published estimates of the
Partnership’s financial results. The Partnership believes that
certain investors use this information to evaluate the
Partnership’s financial performance, as does management. Please
refer to Appendix A 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.
Distributable Cash Flow (DCF) represents GAAP
net income (loss) adjusted for depreciation and amortization
expense, deferred income tax expense or recovery, vessel
write-downs, gains or losses on the sale of vessels, vessel and
business acquisition costs, distributions relating to equity
financing of newbuilding installments and conversion costs,
pre-operational expenses, distributions on the Partnership's
preferred units, gains on extinguishment of contingent liabilities
and losses on non-cash accruals of contingent liabilities,
amortization of the non-cash portion of revenue contracts,
estimated maintenance capital expenditures, unrealized gains and
losses from non-designated derivative instruments, ineffectiveness
for derivative instruments designated as hedges for accounting
purposes, adjustments for direct financing leases to a cash basis
and foreign exchange related items, including the Partnership's
proportionate share of such items in equity-accounted for
investments and non-controlling interests proportionate share of
such interests. 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. DCF is a quantitative standard used
in the publicly-traded partnership investment community and by
management to assist in evaluating financial performance. 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.
Teekay Offshore Partners L.P.Summary Consolidated Statements of
Income (Loss)(in thousands of U.S. Dollars, except unit data)
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
|
Revenues |
295,728 |
|
273,626 |
|
274,920 |
|
1,110,284 |
|
1,152,390 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(29,005 |
) |
(25,102 |
) |
(23,323 |
) |
(99,444 |
) |
(80,750 |
) |
Vessel
operating expenses |
(98,100 |
) |
(86,769 |
) |
(84,320 |
) |
(353,564 |
) |
(364,441 |
) |
Time-charter hire expenses |
(18,375 |
) |
(20,677 |
) |
(22,440 |
) |
(80,315 |
) |
(75,485 |
) |
Depreciation and amortization |
(85,658 |
) |
(75,304 |
) |
(76,873 |
) |
(309,975 |
) |
(300,011 |
) |
General and
administrative |
(14,383 |
) |
(19,870 |
) |
(12,631 |
) |
(62,249 |
) |
(56,122 |
) |
Gain on
sale and (write-down) of vessels (1) |
148 |
|
(316,726 |
) |
3,571 |
|
(318,078 |
) |
(40,079 |
) |
Restructuring recovery (charge) |
671 |
|
(2,885 |
) |
(2,360 |
) |
(2,664 |
) |
(4,649 |
) |
Income (loss) from vessel operations |
51,026 |
|
(273,707 |
) |
56,544 |
|
(116,005 |
) |
230,853 |
|
|
|
|
|
|
|
Interest
expense |
(43,365 |
) |
(38,819 |
) |
(35,859 |
) |
(154,890 |
) |
(140,611 |
) |
Interest
income |
1,245 |
|
710 |
|
262 |
|
2,707 |
|
1,257 |
|
Realized
and unrealized gain (loss) |
|
|
|
|
|
|
on derivative
instruments (2) |
4,708 |
|
(19,232 |
) |
81,967 |
|
(42,853 |
) |
(20,313 |
) |
Equity
income |
2,126 |
|
4,416 |
|
4,087 |
|
14,442 |
|
17,933 |
|
Foreign
currency exchange (loss) gain (3) |
(693 |
) |
(6,526 |
) |
303 |
|
(14,006 |
) |
(14,805 |
) |
Other (expense) income - net (4) |
(3,197 |
) |
15,174 |
|
441 |
|
11,065 |
|
(21,031 |
) |
Income (loss) before income tax recovery
(expense) |
11,850 |
|
(317,984 |
) |
107,745 |
|
(299,540 |
) |
53,283 |
|
Income tax
recovery (expense) |
4,187 |
|
(2,292 |
) |
(11,479 |
) |
98 |
|
(8,808 |
) |
Net income (loss) |
16,037 |
|
(320,276 |
) |
96,266 |
|
(299,442 |
) |
44,475 |
|
|
|
|
|
|
|
Non-controlling interests in net income (loss) |
638 |
|
(2,785 |
) |
4,313 |
|
3,764 |
|
11,858 |
|
Preferred
unitholders' interest in net income (loss) |
5,376 |
|
11,917 |
|
12,387 |
|
42,065 |
|
45,836 |
|
General
partner’s interest in net income (loss) |
76 |
|
(6,373 |
) |
1,590 |
|
(5,770 |
) |
(267 |
) |
Limited
partners’ interest in net income (loss) |
9,947 |
|
(323,035 |
) |
77,976 |
|
(339,501 |
) |
(12,952 |
) |
|
|
|
|
|
|
|
Weighted-average number of common units: |
|
|
|
|
|
-
basic |
410,045,210 |
|
170,657,562 |
|
144,704,887 |
|
220,755,937 |
|
124,747,207 |
|
-
diluted |
475,360,951 |
|
182,393,904 |
|
177,694,503 |
|
229,940,120 |
|
124,747,207 |
|
Total
number of common units outstanding |
|
|
|
|
|
|
at end of
period |
410,045,210 |
|
410,045,210 |
|
147,514,113 |
|
410,045,210 |
|
147,514,113 |
|
(1) 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 Ostras FPSO unit due to the
expected expiration of the 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.
In June 2016, as part of the Partnership's 2016
financing initiatives, the Partnership canceled the UMS
construction contracts for its two UMS newbuildings. As a
result, the Partnership incurred a $43.7 million write-down related
to these two UMS newbuildings during the year ended December 31,
2016.
(2) 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. During the three months ended September 30,
2017 and the year ended December 31, 2017, as part of the
Brookfield Transaction, the Partnership amended certain interest
rate swaps to lower the fixed rate interest rate on the swaps and
recorded $38.0 million of related rate reset and transaction fees,
which are included in the realized loss relating to interest rate
swaps in the table below.
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2017 |
2017 |
2016 |
2017 |
2016 |
Realized (loss) gain relating to: |
|
|
|
|
|
|
Interest rate
swaps |
(8,360 |
) |
(48,974 |
) |
(11,830 |
) |
(78,296 |
) |
(52,819 |
) |
|
Foreign currency
forward contracts |
260 |
|
1,048 |
|
(769 |
) |
900 |
|
(7,153 |
) |
|
|
(8,100 |
) |
(47,926 |
) |
(12,599 |
) |
(77,396 |
) |
(59,972 |
) |
|
|
|
|
|
|
|
Unrealized gain (loss) relating to: |
|
|
|
|
|
|
Interest rate
swaps |
14,017 |
|
28,465 |
|
97,782 |
|
33,114 |
|
29,937 |
|
|
Foreign currency
forward contracts |
(1,209 |
) |
229 |
|
(3,216 |
) |
1,429 |
|
9,722 |
|
|
|
12,808 |
|
28,694 |
|
94,566 |
|
34,543 |
|
39,659 |
|
Total
realized and unrealized gain (loss) on |
|
|
|
|
|
|
derivative instruments |
4,708 |
|
(19,232 |
) |
81,967 |
|
(42,853 |
) |
(20,313 |
) |
(3) 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 (loss)
gain 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 an unrealized (loss) gain on the
revaluation of the NOK bonds, as detailed in the table below.
During the three months and year ended December 31, 2017, the
Partnership recorded realized losses of $33.3 million and $73.5
million, respectively, relating to the termination of certain cross
currency swaps, which were offset by unrealized gains of $33.3
million and $73.5 million, respectively, which are included in the
table below. During the three months and year ended December 31,
2017, the Partnership recorded a $67.7 million realized foreign
exchange gain on the settlement of certain NOK bonds which is not
included in the table below. During the year ended December 31,
2016, the Partnership's realized loss on cross currency swaps
includes a $32.6 million loss on the maturity of the swap
associated with the NOK 500 million bond which settled in January
2016, which was offset by a $32.6 million realized foreign currency
exchange gain on the settlement of the bond which is not included
in the table below.
|
|
|
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2017 |
2017 |
2016 |
2017 |
2016 |
Realized loss on cross
currency swaps |
(34,704 |
) |
(42,987 |
) |
(12,221 |
) |
(84,205 |
) |
(53,497 |
) |
Unrealized gain (loss)
on cross currency swaps |
24,936 |
|
54,488 |
|
(12,148 |
) |
91,914 |
|
46,127 |
|
Unrealized (loss) gain on revaluation of NOK bonds |
(57,937 |
) |
(12,823 |
) |
21,910 |
|
(79,818 |
) |
(39,897 |
) |
(4) In September and October 2017, the Partnership settled
certain claims from CeFront Technology AS and Sevan Marine ASA ,
respectively, and reversed related contingent liabilities recorded
in June 2016 arising from the cancellations of two UMS
newbuildings. As a result, a net gain of $15.0 million was reported
in Other (expense) income - net for the three months ended
September 30, 2017 and the year ended December 31, 2017.
During 2016, the Partnership accrued for
potential damages resulting from the cancellations of the UMS
newbuildings and reversed other contingent liabilities previously
recorded that were subject to the delivery of the UMS newbuildings.
This net loss provision of $23.4 million was reported in Other
(expense) income - net for the year ended December 31, 2016. The
UMS newbuilding contracts were held in separate subsidiaries of the
Partnership and obligations of these subsidiaries were non-recourse
to the Partnership.
Teekay Offshore Partners L.P.Consolidated Balance Sheets(in
thousands of U.S. Dollars)
|
|
As at |
As at |
As at |
|
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
Current |
|
|
|
Cash and
cash equivalents |
221,934 |
|
416,346 |
|
227,378 |
|
Restricted
cash - current |
28,360 |
|
27,470 |
|
92,265 |
|
Accounts
receivable |
162,691 |
|
138,462 |
|
114,576 |
|
Vessels
held for sale |
— |
|
12,400 |
|
6,900 |
|
Net
investments in direct financing leases - current |
5,199 |
|
6,004 |
|
4,417 |
|
Prepaid
expenses |
30,336 |
|
26,308 |
|
25,187 |
|
Due from
affiliates |
37,376 |
|
44,765 |
|
77,811 |
|
Other current assets |
24,050 |
|
17,110 |
|
21,282 |
|
Total current assets |
509,946 |
|
688,865 |
|
569,816 |
|
|
|
|
|
|
Restricted
cash - long-term |
— |
|
— |
|
22,644 |
|
|
|
|
|
|
Vessels and equipment |
|
|
|
At cost,
less accumulated depreciation |
4,398,836 |
|
3,825,666 |
|
4,084,803 |
|
Advances on
newbuilding contracts and conversion costs |
288,658 |
|
689,252 |
|
632,130 |
|
Net
investments in direct financing leases |
12,008 |
|
12,769 |
|
13,169 |
|
Investment
in equity accounted joint ventures |
169,875 |
|
168,852 |
|
141,819 |
|
Deferred
tax asset |
28,110 |
|
23,760 |
|
24,659 |
|
Other
assets |
101,217 |
|
86,037 |
|
100,435 |
|
Goodwill |
129,145 |
|
129,145 |
|
129,145 |
|
Total assets |
5,637,795 |
|
5,624,346 |
|
5,718,620 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current |
|
|
|
Accounts
payable |
43,317 |
|
37,362 |
|
8,946 |
|
Accrued
liabilities |
187,687 |
|
210,434 |
|
150,281 |
|
Deferred
revenues |
69,668 |
|
58,484 |
|
57,373 |
|
Due to
affiliates |
108,483 |
|
124,711 |
|
96,555 |
|
Current
portion of long-term debt |
589,767 |
|
731,326 |
|
586,892 |
|
Current
portion of derivative instruments |
42,515 |
|
53,646 |
|
55,002 |
|
Current
portion of in-process revenue contracts |
9,056 |
|
10,290 |
|
12,744 |
|
Other current liabilities |
— |
|
1,480 |
|
— |
|
Total current liabilities |
1,050,493 |
|
1,227,733 |
|
967,793 |
|
Long-term
debt |
2,533,961 |
|
2,346,227 |
|
2,596,002 |
|
Derivative
instruments |
167,469 |
|
194,354 |
|
282,138 |
|
Due to
affiliates |
163,037 |
|
160,757 |
|
200,000 |
|
In-process
revenue contracts |
41,225 |
|
43,204 |
|
50,281 |
|
Other long-term liabilities |
208,111 |
|
181,420 |
|
211,611 |
|
Total liabilities |
4,164,296 |
|
4,153,695 |
|
4,307,825 |
|
|
|
|
|
|
Redeemable non-controlling interest |
(29 |
) |
(34 |
) |
962 |
|
Convertible preferred units |
— |
|
— |
|
271,237 |
|
|
|
|
|
|
Equity |
|
|
|
Limited
partners - common units |
1,004,077 |
|
999,616 |
|
784,056 |
|
Limited
partners - preferred units |
266,925 |
|
266,925 |
|
266,925 |
|
General
partner |
15,996 |
|
14,910 |
|
20,658 |
|
Warrants |
132,225 |
|
132,320 |
|
13,797 |
|
Accumulated
other comprehensive loss |
(523 |
) |
(2,768 |
) |
(804 |
) |
Non-controlling interests |
54,828 |
|
59,682 |
|
53,964 |
|
Total equity |
1,473,528 |
|
1,470,685 |
|
1,138,596 |
|
Total liabilities and total
equity |
5,637,795 |
|
5,624,346 |
|
5,718,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Teekay Offshore Partners L.P.Consolidated Statements of Cash
Flows(in thousands of U.S. Dollars)
|
Year Ended |
|
December 31, 2017 |
December 31, 2016 |
|
(unaudited) |
(unaudited) |
Cash and cash
equivalents provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net (loss) income |
(299,442 |
) |
44,475 |
|
Non-cash items: |
|
|
Unrealized gain on derivative instruments |
(126,450 |
) |
(86,467 |
) |
Equity
income, net of dividends received of $11,600 (2016: $7,206) |
(2,842 |
) |
(10,727 |
) |
Depreciation and amortization |
309,975 |
|
300,011 |
|
Write-down and (gain) on sale of vessels |
318,078 |
|
40,079 |
|
Deferred
income tax (recovery) expense |
(1,870 |
) |
4,854 |
|
Amortization of in-process revenue contracts |
(12,745 |
) |
(12,779 |
) |
Unrealized foreign currency exchange loss and other |
37,511 |
|
26,582 |
|
Change in
non-cash working capital items related to operating activities |
29,806 |
|
74,218 |
|
Expenditures for dry docking |
(17,269 |
) |
(26,342 |
) |
Net operating cash flow |
234,752 |
|
353,904 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from long-term
debt |
1,295,751 |
|
456,697 |
|
Scheduled repayments of
long-term debt |
(649,198 |
) |
(434,339 |
) |
Prepayments of
long-term debt |
(729,341 |
) |
(197,776 |
) |
Debt issuance
costs |
(17,268 |
) |
(12,095 |
) |
Decrease (increase) in
restricted cash |
86,549 |
|
(54,389 |
) |
Proceeds from issuance
of common units and warrants |
640,595 |
|
135,246 |
|
Proceeds from issuance
of preferred units and warrants |
— |
|
100,000 |
|
Repurchase of preferred
units |
(250,022 |
) |
— |
|
Expenses relating to
equity offerings |
(12,155 |
) |
(6,395 |
) |
Cash distributions paid
by the Partnership |
(60,593 |
) |
(78,634 |
) |
Cash distributions paid
by subsidiaries to non-controlling interests |
(9,891 |
) |
(14,210 |
) |
Equity contribution
from joint venture partners |
6,000 |
|
750 |
|
Other |
(483 |
) |
(90 |
) |
Net financing cash flow |
299,944 |
|
(105,235 |
) |
INVESTING
ACTIVITIES |
|
|
Net payments for
vessels and equipment, including advances on newbuilding contracts
and conversion costs |
(533,260 |
) |
(294,581 |
) |
Proceeds from sale of
vessels and equipment |
13,100 |
|
69,805 |
|
Repayment from joint
ventures |
(25,824 |
) |
(54,873 |
) |
Direct financing lease
payments received (investments) |
5,844 |
|
(115 |
) |
Net investing cash flow |
(540,140 |
) |
(279,764 |
) |
Decrease in cash and
cash equivalents |
(5,444 |
) |
(31,095 |
) |
Cash and cash
equivalents, beginning of the year |
227,378 |
|
258,473 |
|
Cash and cash equivalents, end of the year |
221,934 |
|
227,378 |
|
|
|
Teekay Offshore Partners L.P.Appendix A - Reconciliation of
Non-GAAP Financial MeasuresAdjusted Net Income(in thousands of U.S.
Dollars)
|
|
|
Three Months Ended |
Year Ended |
|
|
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Net income
(loss) – GAAP basis |
16,037 |
|
96,266 |
|
(299,442 |
) |
44,475 |
|
Adjustments: |
|
|
|
|
|
Net income attributable to non-controlling
interests |
638 |
|
4,313 |
|
3,764 |
|
11,858 |
|
Net
income (loss) attributable to the partners and preferred
unitholders |
15,399 |
|
91,953 |
|
(303,206 |
) |
32,617 |
|
Add
(subtract) specific items affecting net income (loss): |
|
|
|
|
|
Unrealized
gain on derivative instruments (1) |
(12,203 |
) |
(93,845 |
) |
(34,565 |
) |
(42,930 |
) |
|
Deferred
income tax (recovery) expense relating to Norwegian tax structure
(2) |
(4,724 |
) |
10,409 |
|
(2,669 |
) |
10,409 |
|
|
Foreign
currency exchange (gains) losses (3) |
(785 |
) |
(3,892 |
) |
3,194 |
|
2,568 |
|
|
Termination
of Arendal Spirit UMS charter contract (4) |
(671 |
) |
— |
|
11,102 |
|
— |
|
|
(Gain) on
sale and write-down of vessels (5) |
(148 |
) |
(3,571 |
) |
318,078 |
|
40,079 |
|
|
Realized
loss on interest rate swap amendments |
— |
|
— |
|
37,950 |
|
— |
|
|
Net (gain)
loss provision relating to cancellation of UMS newbuildings
(6) |
— |
|
— |
|
(13,833 |
) |
21,282 |
|
|
Contingency
settlements, restructuring charges and other (7) |
3,102 |
|
3,935 |
|
11,387 |
|
7,655 |
|
|
Pre-operational costs (8) |
11,359 |
|
999 |
|
17,939 |
|
11,411 |
|
|
Non-controlling interests’ share of items above
(9) |
— |
|
2,499 |
|
(5,400 |
) |
2,916 |
|
Total adjustments |
(4,070 |
) |
(83,466 |
) |
343,183 |
|
53,390 |
|
Adjusted net income attributable to the
partners and preferred unitholders |
11,329 |
|
8,487 |
|
39,977 |
|
86,007 |
|
- Reflects the net unrealized 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, hedge ineffectiveness from derivative instruments
designated as hedges for accounting purposes, the unrealized
mark-to-market value of the interest rate swaps within the Cidade
de Itajai FPSO equity accounted joint venture and hedge
ineffectiveness within the Pioneiro de Libra FPSO equity accounted
joint venture.
- Reflects the (increase) decrease in the deferred income tax
asset for the Partnership's Norwegian tax structures.
- Foreign currency exchange (gain) loss primarily relates 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 the 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.
- Includes the write-off (reversal) of deferred revenues and
operating expenses as a result of the termination of the Arendal
Spirit UMS charter contract in late-April 2017 and restructuring
charges related to severance costs from the termination of the
charter contract of the Arendal Spirit UMS.
- See footnote (1) of the summary consolidated statements of
income (loss) included in this release for further details.
- See footnote (4) of the summary consolidated statements of
income (loss) included in this release for further details.
- Other items for the three months ended December 31, 2017
includes a loss on the repurchase of certain of the Partnership's
NOK bonds. Other items for the year ended December 31, 2017 also
includes non-recurring general and administrative expenses relating
to the Brookfield Transaction and an increase in the Piranema
Spirit FPSO rate reduction contingency.Other items for the three
months ended December 31, 2016 mainly includes a restructuring
charge relating to the reorganization within the Partnership’s FPSO
segment. Other items for the year ended December 31, 2016 also
includes an increase in depreciation expense as a result of the
change in the estimated useful life of the shuttle component of the
Partnership’s shuttle tankers from 25 years to 20 years effective
January 1, 2016 (only includes adjustment for the initial period of
adoption, which was the first quarter of 2016) and the write-down
of equipment in one of its joint ventures, partially offset by an
early termination fee received from Teekay Corporation related to
the sale of the Kilimanjaro Spirit conventional tanker.
- Reflects depreciation and amortization expense,
voyage expenses, general and administrative expenses and vessel
operating 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. Reflects depreciation and amortization expense and vessel
operating expenses related to the Petrojarl I FPSO unit while
undergoing upgrades, realized losses (gains) on foreign currency
forward contracts relating to upgrade and conversion costs on the
Petrojarl I FPSO unit and Gina Krog FSO unit, respectively, and
costs associated with the deferral of the delivery of the UMS units
for the three months and year ended December 31, 2016.
- 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
amount identified as “non-controlling interests’ share of items
above” in the table above is the cumulative amount of the
non-controlling interests’ proportionate share of items affecting
net income (loss) listed in the table.
Teekay Offshore Partners L.P.Appendix B - Reconciliation of
Non-GAAP Financial MeasuresDistributable Cash Flow(in thousands of
U.S. Dollars, except unit and per unit data)
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
December 31, |
|
|
|
2017 |
2016 |
2017 |
2016 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
|
Net income (loss) |
16,037 |
|
96,266 |
|
(299,442 |
) |
44,475 |
|
Add
(subtract): |
|
|
|
|
|
Depreciation and amortization |
85,658 |
|
76,873 |
|
309,975 |
|
300,011 |
|
|
Realized
loss on amendment/early termination of interest rate and cross
currency swaps |
33,254 |
|
— |
|
111,371 |
|
— |
|
|
Partnership's share of equity accounted joint venture's
distributable cash flow net of estimated maintenance capital
expenditures (1) |
5,821 |
|
5,625 |
|
21,183 |
|
20,308 |
|
|
Pre-operational costs |
2,844 |
|
(536 |
) |
13,646 |
|
5,933 |
|
|
Distributions relating to equity financing of newbuildings and
conversion costs |
— |
|
4,461 |
|
15,014 |
|
16,335 |
|
|
Net
(reversal of) loss provision relating to cancellation of UMS
newbuildings |
— |
|
— |
|
(13,833 |
) |
21,282 |
|
|
(Gain) on
sale and write-down of vessels (2) |
(148 |
) |
(3,571 |
) |
318,078 |
|
40,079 |
|
|
Equity
income |
(2,126 |
) |
(4,087 |
) |
(14,442 |
) |
(17,933 |
) |
|
Amortization of non-cash portion of revenue contracts |
(4,041 |
) |
(4,032 |
) |
(16,032 |
) |
(16,058 |
) |
|
Deferred
income tax (recovery) expense |
(4,547 |
) |
10,867 |
|
(1,870 |
) |
4,854 |
|
|
Distributions on preferred units |
(5,376 |
) |
(12,386 |
) |
(42,065 |
) |
(45,836 |
) |
|
Unrealized
gain on non-designated derivative instruments (3) |
(37,743 |
) |
(94,566 |
) |
(126,457 |
) |
(39,659 |
) |
|
Estimated
maintenance capital expenditures (4) |
(40,412 |
) |
(41,369 |
) |
(156,074 |
) |
(155,391 |
) |
|
Unrealized foreign exchange (gain) loss and other,
net |
(10,432 |
) |
(6,830 |
) |
9,189 |
|
3,730 |
|
Distributable cash flow before non-controlling interests |
38,789 |
|
26,715 |
|
128,241 |
|
182,130 |
|
|
Non-controlling interests' share of DCF |
(4,340 |
) |
(5,088 |
) |
(22,535 |
) |
(20,801 |
) |
Distributable Cash Flow |
34,449 |
|
21,627 |
|
105,706 |
|
161,329 |
|
Amount attributable to the General Partner |
(31 |
) |
(331 |
) |
(429 |
) |
(1,201 |
) |
Limited partners' Distributable Cash Flow |
34,418 |
|
21,296 |
|
105,277 |
|
160,128 |
|
Weighted-average number of common units
outstanding |
410,045,210 |
|
144,704,887 |
|
220,755,937 |
|
124,747,207 |
|
Distributable Cash Flow per limited partner
unit |
0.08 |
|
0.15 |
|
0.48 |
|
1.28 |
|
- Estimated maintenance capital expenditures relating to the
Partnership’s equity accounted joint ventures were $2.6 million and
$1.0 million for the three months ended December 31, 2017 and
2016, respectively, and $5.7 million and $4.2 million for the years
ended December 31, 2017 and 2016, respectively.
- See footnote (1) of the summary consolidated statements of
income (loss) included in this release for further details.
- Derivative instruments include interest rate swaps. cross
currency swaps, and foreign currency forward contracts.
- Estimated maintenance capital expenditures for the three months
and year ended December 31, 2017 includes $8.1 million and $0.9
million reductions relating to cash compensation received from
shipyards in connection with the delayed deliveries of the ALP
Sweeper and the Beothuk Spirit, respectively, and additionally, the
year ended December 31, 2017 includes a further $8.4 million
reduction relating to cash compensation received from the shipyard
in connection with the delayed delivery of the ALP Defender.
Estimated maintenance expenditures for the year ended December 31,
2016 includes a $7.0 million reduction relating to cash
compensation received from the shipyard in connection with the
delayed delivery of the ALP Striker.
Teekay Offshore Partners L.P.Appendix C - Supplemental Segment
Information(in thousands of U.S. Dollars)
|
Three Months Ended December 31,
2017 |
|
(unaudited) |
|
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker Segment |
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 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2016 |
|
(unaudited) |
|
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker Segment |
Eliminations |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
116,429 |
|
129,092 |
|
12,037 |
|
3,821 |
|
9,794 |
|
3,747 |
|
— |
|
274,920 |
|
Voyage expenses |
— |
|
(17,437 |
) |
(1,086 |
) |
— |
|
(4,785 |
) |
(15 |
) |
— |
|
(23,323 |
) |
Vessel operating
expenses |
(34,714 |
) |
(32,215 |
) |
(5,443 |
) |
(7,312 |
) |
(4,509 |
) |
(127 |
) |
— |
|
(84,320 |
) |
Time-charter hire
expenses |
— |
|
(18,213 |
) |
— |
|
— |
|
— |
|
(4,227 |
) |
— |
|
(22,440 |
) |
Depreciation and
amortization |
(37,200 |
) |
(31,919 |
) |
(2,725 |
) |
(1,623 |
) |
(3,406 |
) |
— |
|
— |
|
(76,873 |
) |
General and
administrative |
(8,845 |
) |
(1,185 |
) |
(224 |
) |
(1,329 |
) |
(957 |
) |
(91 |
) |
— |
|
(12,631 |
) |
Gain on sale and
(write-down) of vessels |
— |
|
4,554 |
|
(983 |
) |
— |
|
— |
|
— |
|
— |
|
3,571 |
|
Restructuring charge |
(2,360 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,360 |
) |
Income (loss) from vessel operations |
33,310 |
|
32,677 |
|
1,576 |
|
(6,443 |
) |
(3,863 |
) |
(713 |
) |
— |
|
56,544 |
|
- Includes revenues and expenses earned and incurred between
segments of Teekay Offshore during the three months ended
December 31, 2017.
Teekay Offshore Partners L.P.Appendix D - Reconciliation of
Non-GAAP Financial MeasuresCash Flow From (Used For) Vessel
Operations From Consolidated Vessels(in thousands of U.S.
Dollars)
|
|
Three Months Ended |
Year Ended |
|
|
December 31, 2017 |
December 31, 2017 |
|
|
(unaudited) |
(unaudited) |
|
|
|
Shuttle |
|
|
|
Conventional |
|
|
|
|
FPSO |
Tanker |
FSO |
UMS |
Towage |
Tanker |
|
|
|
|
Segment |
Segment |
Segment |
Segment |
Segment |
Segment |
Eliminations(1) |
Total |
Total |
Income
(loss) from vessel operations |
|
|
|
|
|
|
|
|
|
|
(See Appendix C) |
39,304 |
|
13,582 |
|
12,119 |
|
(7,822 |
) |
(5,114 |
) |
(774 |
) |
(269 |
) |
51,026 |
|
(116,005 |
) |
Depreciation and amortization |
34,064 |
|
33,935 |
|
11,678 |
|
1,659 |
|
4,522 |
|
— |
|
(200 |
) |
85,658 |
|
309,975 |
|
Realized
gain from the |
|
|
|
|
|
|
|
|
|
|
settlements of
non-designated |
|
|
|
|
|
|
|
|
|
|
foreign currency
forward contracts |
64 |
|
108 |
|
— |
|
— |
|
318 |
|
— |
|
— |
|
490 |
|
1,003 |
|
Amortization of non-cash portion of |
|
|
|
|
|
|
|
|
|
|
revenue contracts |
(4,041 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
|
(4,041 |
) |
(16,032 |
) |
Termination
of Arendal Spirit UMS |
|
|
|
|
|
|
|
|
|
|
charter contract |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
8,888 |
|
Loss (gain)
on sale and writedown of vessels |
— |
|
244 |
|
(392 |
) |
— |
|
— |
|
— |
|
— |
|
(148 |
) |
318,078 |
|
Falcon
Spirit revenue accounted for |
|
|
|
|
|
|
|
|
|
|
as a direct financing
lease |
— |
|
— |
|
(368 |
) |
— |
|
— |
|
— |
|
— |
|
(368 |
) |
(1,635 |
) |
Falcon
Spirit cash flow from |
|
|
|
|
|
|
|
|
|
|
time-charter
contracts |
— |
|
— |
|
1,661 |
|
— |
|
— |
|
— |
|
— |
|
1,661 |
|
7,340 |
|
Eliminations upon consolidation |
— |
|
— |
|
— |
|
— |
|
(469 |
) |
— |
|
469 |
|
— |
|
|
Cash flow from (used for) vessel |
|
|
|
|
|
|
|
|
|
|
operations from consolidated vessels |
69,391 |
|
47,869 |
|
24,698 |
|
(6,163 |
) |
(743 |
) |
(774 |
) |
— |
|
134,278 |
|
511,612 |
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, 2016 |
December 31, 2016 |
|
|
(unaudited) |
(unaudited) |
|
|
|
Shuttle |
|
|
|
Conventional |
|
|
|
|
FPSO |
Tanker |
FSO |
UMS |
Towage |
Tanker |
|
|
YTD |
|
Segment |
Segment |
Segment |
Segment |
Segment |
Segment |
Eliminations |
Total |
Total |
Income
(loss) from vessel operations |
|
|
|
|
|
|
|
|
|
|
(See Appendix C) |
33,310 |
|
32,677 |
|
1,576 |
|
(6,443 |
) |
(3,863 |
) |
(713 |
) |
— |
|
56,544 |
|
230,853 |
|
Depreciation and amortization |
37,200 |
|
31,919 |
|
2,725 |
|
1,623 |
|
3,406 |
|
— |
|
— |
|
76,873 |
|
300,011 |
|
Realized
(loss) gain from the |
|
|
|
|
|
|
|
|
|
|
settlements of
non-designated |
|
|
|
|
|
|
|
|
|
|
foreign currency
forward contracts |
(553 |
) |
(4 |
) |
— |
|
— |
|
22 |
|
— |
|
— |
|
(535 |
) |
(6,744 |
) |
Amortization of non-cash portion of |
|
|
|
|
|
|
|
|
|
|
revenue contracts |
(4,032 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(4,032 |
) |
(16,058 |
) |
(Gain) on
sale and write-down of vessels |
— |
|
(4,554 |
) |
983 |
|
— |
|
— |
|
— |
|
— |
|
(3,571 |
) |
40,079 |
|
Falcon
Spirit revenue accounted for |
|
|
|
|
|
|
|
|
|
|
as a direct financing
lease |
— |
|
— |
|
(729 |
) |
— |
|
— |
|
— |
|
— |
|
(729 |
) |
(2,829 |
) |
Falcon
Spirit cash flow from |
|
|
|
|
|
|
|
|
|
|
time-charter contracts |
— |
|
— |
|
2,232 |
|
— |
|
— |
|
— |
|
— |
|
2,232 |
|
8,766 |
|
Cash flow from (used for) vessel |
|
|
|
|
|
|
|
|
|
|
operations from consolidated vessels |
65,925 |
|
60,038 |
|
6,787 |
|
(4,820 |
) |
(435 |
) |
(713 |
) |
— |
|
126,782 |
|
554,078 |
|
- Includes revenues and expenses earned and incurred between
segments of Teekay Offshore during the three months ended
December 31, 2017.
Teekay Offshore Partners L.P.Appendix E - Reconciliation of
Non-GAAP Financial MeasuresCash Flow From Vessel Operations From
Equity Accounted Vessels(in thousands of U.S. Dollars)
|
|
Three Months Ended |
Three Months Ended |
|
|
December 31, 2017 |
December 31, 2016 |
|
(unaudited) |
(unaudited) |
|
|
At 100% |
Partnership's 50% |
At 100% |
Partnership's 50% |
Revenues |
29,482 |
|
14,741 |
|
20,007 |
|
10,004 |
|
Vessel and
other operating expenses |
(8,234 |
) |
(4,116 |
) |
(3,894 |
) |
(1,947 |
) |
Depreciation and amortization |
(8,226 |
) |
(4,113 |
) |
(4,235 |
) |
(2,118 |
) |
Income from
vessel operations of equity accounted vessels |
13,022 |
|
6,512 |
|
11,878 |
|
5,939 |
|
Net
interest expense (1) |
(8,538 |
) |
(4,269 |
) |
(1,919 |
) |
(960 |
) |
Realized
and unrealized loss on derivative instruments (2) |
764 |
|
382 |
|
(1,465 |
) |
(733 |
) |
Foreign currency exchange loss |
(1,100 |
) |
(551 |
) |
(2 |
) |
(1 |
) |
Total other
items |
(8,874 |
) |
(4,438 |
) |
(3,386 |
) |
(1,694 |
) |
Net income
/ equity income of equity accounted vessels before
income tax recovery (expense) |
4,148 |
|
2,074 |
|
8,492 |
|
4,245 |
|
Income tax recovery (expense) |
103 |
|
52 |
|
(316 |
) |
(158 |
) |
Net income
/ equity income of equity accounted vessels |
4,251 |
|
2,126 |
|
8,176 |
|
4,087 |
|
Income from
vessel operations of equity accounted vessels |
13,022 |
|
6,512 |
|
11,878 |
|
5,939 |
|
Depreciation and amortization |
8,226 |
|
4,113 |
|
4,235 |
|
2,118 |
|
Cash flow from vessel operations from equity
accounted vessels |
21,248 |
|
10,625 |
|
16,113 |
|
8,057 |
|
- 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 edges for the Pioneiro de
Libra FPSO unit.
- Realized and unrealized loss on derivative instruments for the
three months ended December 31, 2017 and 2016 includes an
unrealized gain of $1.2 million ($0.6 million at the Partnership’s
50% share) and an unrealized loss of $0.8 million ($0.4 million at
the Partnership’s 50% share), respectively, related to interest
rate swaps for the Cidade de Itajai FPSO unit.
|
|
Year Ended |
Year Ended |
|
December 31, 2017 |
December 31, 2016 |
|
|
(unaudited) |
(unaudited) |
|
At 100% |
Partnership's 50% |
At 100% |
Partnership's 50% |
Revenues |
90,662 |
|
45,331 |
|
80,869 |
|
40,435 |
|
Vessel and
other operating expenses |
(23,942 |
) |
(11,971 |
) |
(20,380 |
) |
(10,190 |
) |
Depreciation and amortization |
(21,439 |
) |
(10,719 |
) |
(17,429 |
) |
(8,715 |
) |
Write-down and loss on sale of equipment |
— |
|
— |
|
(1,351 |
) |
(675 |
) |
Income from
vessel operations of equity accounted vessels |
45,281 |
|
22,641 |
|
41,709 |
|
20,855 |
|
Net
interest expense (1) |
(14,874 |
) |
(7,437 |
) |
(7,081 |
) |
(3,541 |
) |
Realized
and unrealized (loss) gain on derivative instruments (2) |
(139 |
) |
(70 |
) |
1,609 |
|
805 |
|
Foreign currency exchange gain |
(1,178 |
) |
(589 |
) |
372 |
|
186 |
|
Total other
items |
(16,191 |
) |
(8,096 |
) |
(5,100 |
) |
(2,550 |
) |
Net income
/ equity income of equity accounted vessels before income
tax expense |
29,090 |
|
14,545 |
|
36,609 |
|
18,305 |
|
Income tax expense |
(206 |
) |
(103 |
) |
(743 |
) |
(372 |
) |
Net income / equity income of equity accounted
vessels |
28,884 |
|
14,442 |
|
35,866 |
|
17,933 |
|
Income from
vessel operations of equity accounted vessels |
45,281 |
|
22,641 |
|
41,709 |
|
20,855 |
|
Depreciation and amortization |
21,439 |
|
10,719 |
|
17,429 |
|
8,715 |
|
Write-down and loss on sale of equipment |
— |
|
— |
|
1,351 |
|
675 |
|
Cash flow from vessel operations from equity
accounted vessels |
66,720 |
|
33,360 |
|
60,489 |
|
30,245 |
|
- Net interest expense for the year ended December 31, 2017
includes an unrealized loss of $2.6 million ($1.3 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.
- Realized and unrealized (loss) gain on derivative instruments
for the years ended December 31, 2017 and 2016 includes an
unrealized gain of $2.0 million ($1.0 million at the Partnership’s
50% share) and an unrealized gain of $5.2 million ($2.6 million at
the Partnership’s 50% share), respectively, related to interest
rate swaps for the Cidade de Itajai FPSO units.
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: the estimated
future cash flow from vessel operations, including the impact on
the Partnership's balance sheet, and weighted average contract
length associated with the Partnership’s existing growth projects
once delivered; the timing and cost of delivery and start-up of
various newbuildings and conversion/upgrade projects and the
commencement of related contracts; the timing and contract terms
related to the extension of the employment of the Voyageur Spirit
FPSO unit on the Huntington field and the expected impact on the
life of the Huntington field; a potential global energy and
offshore market recovery; the Partnership’s ability to benefit from
future opportunities; and the number of vessel equivalent days for
the new ALP contract. 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 to negotiate final documentation related to the Voyageur
Spirit FPSO heads of terms; 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; vessel demand under the new towage contract; 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, 2016. 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.
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Apr 2023 to Apr 2024