Teekay Offshore Partners L.P. (NYSE: TOO) -
Highlights
- Generated distributable cash flow of $9.0 million in the
second quarter of 2009, down from $10.0 million in the previous
quarter.
- Declared and paid cash distribution of $0.45 per unit for the
second quarter of 2009.
- Completed follow-on public equity offering in August 2009,
raising $104.3 million in net proceeds used to repay drawn revolver
debt and for general corporate purposes.
- Received a formal offer from Teekay Corporation to acquire the
Petrojarl Varg FPSO unit and associated fixed-rate contract.
Teekay Offshore GP LLC, the general partner of Teekay Offshore
Partners L.P. (Teekay Offshore or the Partnership) (NYSE: TOO)
today reported its results for the quarter ended June 30, 2009.
During the second quarter, the Partnership generated distributable
cash flow(1) of $9.0 million, a decrease from $10.0 million in the
quarter ended March 31, 2009, primarily as a result of lower
shuttle tanker utilization, partially offset by decreases in
operating expenses and time-charter hire expense in the second
quarter of 2009 as compared to the previous quarter.
(1) Distributable cash flow is a non-GAAP financial measure used
by certain investors to measure the financial performance of the
Partnership and other master limited partnerships. Please see
Appendix B for a reconciliation of this non-GAAP measure to the
most directly comparable GAAP financial measure.
On July 23, 2009, the Partnership declared a cash distribution
of $0.45 per unit for quarter ended June 30, 2009. The cash
distribution was paid on August 14, 2009, to all unitholders of
record on July 29, 2009.
"Consistent with our previous guidance, the Partnership's second
quarter 2009 results were affected by several factors which reduced
income from vessel operations and distributable cash flow for the
quarter," commented Peter Evensen, Chief Executive Officer of
Teekay Offshore GP LLC. "These include costs related to higher than
anticipated operating expenses primarily related to our North Sea
shuttle tanker operations, restructuring costs associated with the
re-flagging of certain of our shuttle tankers, lower shuttle tanker
utilization as a result of reduced oil production and seasonal
field maintenance, and reduced revenues due to start-up delays at
some of the new North Sea fields." Mr. Evensen added, "We continue
to make progress on re-flagging and other initiatives as
demonstrated by our lower operating expenses in the second quarter,
compared to the previous quarter, and we are still targeting
further reductions. In addition, proceeds from our recently
completed follow-on equity offering have resulted in a stronger
balance sheet and increased liquidity which could be utilized by
the Partnership to make future accretive acquisitions. We are
excited about the recent offer from our sponsor, Teekay
Corporation, for us to acquire the Petrojarl Varg FPSO. The offer
is currently under review by our Conflicts Committee and we expect
to be in a position to respond within the coming weeks."
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet,
including vessels owned by OPCO, as of August 31, 2009:
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Number of Vessels
-------------------------------------
Owned Chartered-in
Vessels Vessels Total
-------------------------------------
Shuttle Tanker Segment 27(i) 8 35
Conventional Tanker Segment 11 - 11
FSO Segment 5 - 5
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Total 43 8 51
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(i) Includes five shuttle tankers in which OPCO's ownership interest is 50%
and two shuttle tankers directly owned by Teekay Offshore, of which one
is 50% owned.
Future Growth Opportunities
Pursuant to an Omnibus Agreement that Teekay Offshore entered
into in connection with its initial public offering in December
2006, Teekay Corporation (Teekay) is obligated to offer to the
Partnership its interest in certain shuttle tankers, Floating
Storage and Offloading units (FSO) and Floating Production Storage
and Offloading (FPSO) units and joint ventures it may acquire in
the future, provided the vessels are servicing contracts in excess
of three years in length. Teekay Offshore also may acquire
additional limited partner interests in OPCO or vessels that Teekay
may offer the Partnership from time to time in the future.
Shuttle Tankers
Teekay has ordered four Aframax shuttle tanker newbuildings that
are scheduled to deliver in 2010 and 2011, for a total delivered
cost of approximately $460 million. Teekay Offshore anticipates
that these vessels will be offered to the Partnership pursuant to
the Omnibus Agreement and will be used to service either new
long-term, fixed-rate contracts Teekay may be awarded prior to the
vessel deliveries or OPCO's contracts-of-affreightment in the North
Sea.
FSO Unit
Teekay has recently entered into a fixed-rate FSO contract with
a major oil company, which will involve converting one of its
existing shuttle tankers to an FSO unit. The conversion is expected
to be completed in December 2009 at which time it will commence its
charter based in the Qatar offshore region for an initial
contracted duration of 7.5 years (plus extension options). Under
the Omnibus Agreement, Teekay is obligated to offer its interest in
this FSO project to the Partnership within one year after the
commencement of the charter.
FPSO Units
On July 9, 2008, Teekay completed the acquisition of the
remaining 35.3 percent of Teekay Petrojarl ASA (Teekay Petrojarl)
it did not previously own. Teekay Petrojarl is a leading operator
of FPSO units, with four units operating in the North Sea and one
unit operating in Brazil.
In late-August 2009, Teekay made a formal offer to sell one of
these FPSO units, the Petrojarl Varg, to Teekay Offshore, which is
currently being reviewed by the Board of Directors of Teekay
Offshore's General Partner and its Conflicts Committee.
In addition, prior to July 9, 2010, Teekay Offshore has the
right to acquire Teekay's existing FPSO units that are servicing
contracts in excess of three years in length.
Teekay's Remaining Interest in OPCO
Teekay may offer to Teekay Offshore additional limited partner
interests in OPCO that Teekay owns. Teekay currently owns 49
percent of OPCO and Teekay Offshore owns the remaining 51
percent.
Financial Summary
The Partnership reported adjusted net income attributable to the
partners(1) (as detailed in Appendix A to this release) of $7.0
million for the quarter ended June 30, 2009, compared to $7.5
million for the previous quarter. Adjusted net income attributable
to the partners excludes a number of specific items which had the
net effect of increasing net income by $26.5 million and $9.5
million for the quarters ended June 30, 2009 and March 31, 2009,
respectively, as detailed in Appendix A. Including these items, the
Partnership reported net income attributable to the partners of
$33.5 million(3), on a GAAP basis, for the second quarter of 2009,
compared to $16.9 million(3), for the previous quarter. Net voyage
revenues(2) for the second quarter of 2009 decreased to $150.8
million from $158.6 million for the previous quarter.
(1) Adjusted net income attributable to the partners is a
non-GAAP financial measure. Please refer to Appendix A to the
Consolidated Statements of Income included in this release for a
reconciliation of this non-GAAP measure to the most directly
comparable financial measure under United States generally accepted
accounting principles (GAAP) and information about specific items
affecting net income which are typically excluded by securities
analysts in their published estimates of the Partnership's
financial results.
(2) Net voyage revenues represents voyage revenues less voyage
expenses, which comprise all expenses relating to certain voyages,
including bunker fuel expenses, port fees, canal tolls and
brokerage commissions. Net voyage revenues is a non-GAAP financial
measure used by certain investors to measure the financial
performance of shipping companies. Please see the Partnership's web
site at www.teekayoffshore.com for a reconciliation of this
non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
(3) Commencing in 2009, and applied retroactively in accordance
with SFAS 160, the Partnership's GAAP net income is presented
before non-controlling interest on the Statements of Income. Net
income attributable to Partners represents the net income
attributable to the limited partners and general partner of Teekay
Offshore.
For accounting purposes, the Partnership is required to
recognize the changes in the fair value of certain derivative
instruments, as unrealized gains or losses, through the statements
of income. This revaluation does not affect the economics of any
hedging transactions or have any impact on the Partnership's actual
cash flows or the calculation of its distributable cash flow.
Operating Results
The following table highlights certain financial information for
Teekay Offshore's three main segments: the shuttle tanker segment,
the conventional tanker segment, and the FSO segment (please refer
to the "Teekay Offshore's Fleet" section of this release above and
Appendix C for further details).
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Three Months Ended
June 30, 2009
(unaudited)
Shuttle Conventional
(in thousands of Tanker Tanker FSO
U.S. dollars) Segment Segment Segment Total
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Net voyage revenues 109,860 25,043 15,888 150,791
Vessel operating
expenses(i) 34,737 5,942 6,257 46,936
Time-charter hire
expense 29,144 - - 29,144
Depreciation and
amortization 23,185 5,984 5,419 34,588
Cash flow from
vessel operations(ii) 31,833 17,818 8,611 58,262
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Three Months Ended
March 31, 2009
(unaudited)
Shuttle Conventional
(in thousands of Tanker Tanker FSO
U.S. dollars) Segment Segment Segment Total
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Net voyage revenues 119,897 23,862 14,853 158,612
Vessel operating
expenses(i) 39,522 5,390 5,822 50,734
Time-charter hire
expense 32,145 - - 32,145
Depreciation and
amortization 23,155 5,974 5,402 34,531
Cash flow from
vessel operations(ii) 31,404 17,038 8,591 57,033
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(i) Commencing in the quarter ended March 31, 2009 and applied
retroactively, the gains and losses related to non-designated
derivative instruments have been reclassified to a separate line
item in the Consolidated Statements of Income and are no longer
included in the amounts above.
(ii) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense and
amortization of deferred gains, and includes the realized gains
(losses) on the settlements of foreign currency exchange forward
contracts. Cash flow from vessel operations is a non-GAAP financial
measure used by certain investors to measure the financial
performance of shipping companies. Please see the Partnership's web
site at www.teekayoffshore.com for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP
financial measure.
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership's shuttle
tanker segment was consistent with the previous quarter, increasing
slightly to $31.8 million for the second quarter of 2009, compared
to $31.4 million for the previous quarter, primarily due to
decreases in vessel operating expenses and time charter hire
expense. This was partially offset by a decrease in net voyage
revenues resulting from lower shuttle tanker utilization due to
reduced oil production, seasonal maintenance of oil fields and
start-up delays at certain new North Sea oil fields.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's
conventional tanker segment increased slightly to $17.8 million in
the second quarter of 2009 from $17.0 million in the first quarter
of 2009.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO
segment was unchanged at $8.6 million for the second and first
quarters of 2009.
Follow-on Equity Offering and Liquidity
On August 4, 2009, the Partnership completed a follow-on equity
offering for a total of 7.475 million common units (including
underwriters' overallotment option which was exercised in full),
generating net proceeds of $104.3 million. Proceeds from the
offering were used to repay amounts drawn under one of the
Partnership's revolving credit facilities and for general corporate
purposes.
As of June 30, 2009, the Partnership had total liquidity of
$242.6 million, which consisted of $97.3 million in cash and cash
equivalents and $145.3 million in undrawn revolving credit
facilities. This excludes the $104.3 million in net proceeds from
the equity offering completed in August 2009.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P., a publicly-traded master limited
partnership formed by Teekay Corporation (NYSE: TK), is an
international provider of marine transportation and storage
services to the offshore oil industry. Teekay Offshore owns a 51
percent interest in and controls Teekay Offshore Operating L.P., a
Marshall Islands limited partnership with a fleet of 33 shuttle
tankers (including eight chartered-in vessels), four FSO units,
nine double-hull conventional oil tankers and two lightering
vessels. In addition, Teekay Offshore has direct ownership
interests in two shuttle tankers and one FSO unit. Teekay Offshore
also has rights to participate in certain FPSO opportunities.
Teekay Offshore's common units trade on the New York Stock
Exchange under the symbol "TOO".
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands of U.S. dollars, except unit data)
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Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
VOYAGE REVENUES 173,020 183,425 224,484 356,445 429,416
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OPERATING
EXPENSES
Voyage expenses 22,229 24,813 59,811 47,042 111,188
Vessel operating
expenses(1) 46,936 50,734 45,768 97,670 87,699
Time-charter
hire expense 29,144 32,145 32,262 61,289 65,908
Depreciation and
amortization 34,588 34,531 36,447 69,119 69,359
General and
administrative
(1) 13,351 11,922 15,778 25,273 31,604
Restructuring
charge(2) 1,481 2,201 - 3,682 -
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147,729 156,346 190,066 304,075 365,758
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Income from
vessel
operations 25,291 27,079 34,418 52,370 63,658
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OTHER ITEMS
Interest expense (9,089) (10,568) (15,658) (19,657) (36,924)
Interest income 128 826 1,051 954 2,300
Realized and
unrealized gain
(loss) on
derivative
instruments (3) 44,256 17,584 39,166 61,840 (6,249)
Foreign exchange
loss (1) (1,353) (2,248) (1,110) (3,601) (3,573)
Income tax
recovery
(expense) 3,037 (4,138) 6,826 (1,101) 5,913
Other income -
net 1,910 3,081 3,030 4,991 6,372
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Net income 64,180 31,616 67,723 95,796 31,497
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Net income
attributable to:
Non-controlling
interests (4) 30,715 14,676 42,498 45,391 19,021
Dropdown
Predecessor - - 848 - 1,333
Partners 33,465 16,940 24,377 50,405 11,143
Limited
partners' units
outstanding:
Weighted-average
number of common
units
outstanding
- Basic and
diluted 20,425,000 20,425,000 11,151,648 20,425,000 10,475,824
Weighted-average
number of
subordinated
units
outstanding
- Basic and
diluted 9,800,000 9,800,000 9,800,000 9,800,000 9,800,000
Weighted-average
number of total
units
outstanding
- Basic and
diluted 30,225,000 30,225,000 20,951,648 30,225,000 20,275,824
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(1) The Partnership has entered into foreign exchange forward contracts,
which are economic hedges of vessel operating expenses and general and
administrative expenses. Certain of these forward contracts have been
designated as cash flow hedges pursuant to United States generally
accepted accounting principles (GAAP). Unrealized gains and losses
arising from hedge ineffectiveness from such forward contracts are
reflected in vessel operating expenses, general and administrative
expenses, and foreign exchange gains (losses) in the above Statements
of Income as detailed in the table below:
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
Vessel operating expenses 716 735 246 1,451 (199)
General and administrative 516 1,202 91 1,718 (140)
Foreign exchange loss - - (443) - 8
(2) Restructuring charges were incurred in connection with the re-flagging
of certain of the Partnership's vessels, which will result in lower
future crewing costs. The Partnership expects to incur an additional
$0.7 million in similar restructuring charges in the second half of
2009.
(3) Commencing in the three months ended March 31, 2009, and applied
retroactively, the realized and unrealized gains and losses related to
derivative instruments that are not designated as hedges for accounting
purposes have been reclassified to a separate line item in the
statements of income. The realized gains (losses) relate to the amounts
the Partnership actually paid to settle such derivative instruments and
the unrealized gains (losses) relate to the change in fair value of such
derivative instruments as detailed in the table below:
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
Realized
(losses) gains
relating to:
Interest rate
swaps (9,196) (8,459) (3,141) (17,656) (3,681)
Foreign
currency
forward
contract (679) (2,934) 44 (3,612) 44
----------------------------------------------------
(9,875) (11,393) (3,097) (21,268) (3,637)
----------------------------------------------------
Unrealized gains
(losses)
relating to:
Interest rate
swaps 52,931 26,626 41,952 79,557 (3,431)
Foreign
currency
forward
contracts 1,200 2,351 311 3,551 819
----------------------------------------------------
54,131 28,977 42,263 83,108 (2,612)
----------------------------------------------------
Total realized
and unrealized
gains (losses)
on non
designated
derivative
instruments 44,256 17,584 39,166 61,840 (6,249)
----------------------------------------------------
(4) Commencing in 2009, and applied retroactively in accordance with SFAS
160, net income includes the net income attributable to non-controlling
interests.
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
As at As at As at
June March December
30, 2009 31, 2009 31, 2008
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and cash equivalents 97,290 147,837 131,488
Other current assets 98,635 92,675 100,470
Vessels and equipment 1,658,129 1,680,279 1,708,006
Other assets 56,211 61,260 67,725
Intangible assets 40,761 43,026 45,290
Goodwill 127,113 127,113 127,113
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Total Assets 2,078,139 2,152,190 2,180,092
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LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 49,955 57,944 54,368
Other current liabilities 51,479 33,921 29,734
Current portion of long-term debt 85,417 118,598 125,503
Current portion of derivative
instruments 41,168 48,815 54,937
Long-term debt 1,407,103 1,435,656 1,440,933
Other long-term liabilities 82,235 143,801 172,368
Equity:
Non-controlling interest 228,520 206,102 201,383
Partners' equity 132,262 107,353 100,866
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Total Liabilities and Equity 2,078,139 2,152,190 2,180,092
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
Six Months Ended
June 30,
2009 2008
(unaudited) (unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
---------------------------------------------------------------------------
Net operating cash flow 92,735 102,227
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FINANCING ACTIVITIES
Proceeds from issuance of long-term debt - 111,338
Scheduled repayments of long-term debt (18,917) (14,298)
Prepayments of long-term debt (55,000) (41,000)
Net advances to affiliates - (46,544)
Prepayments of joint venture partner advances (2,237) -
Proceeds from equity offering - 209,184
Expenses from equity offering (12) (5,431)
Distribution to Teekay Corporation relating to
purchase of SPT Explorer L.L.C. and SPT
Navigator L.L.C. - (16,661)
Excess of purchase price over the contributed
basis of a 25% interest in Teekay Offshore
Operating L.P. - (93,782)
Cash distributions paid (56,096) (62,788)
Other (644) (1,319)
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Net financing cash flow (132,906) 38,699
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INVESTING ACTIVITIES
Expenditures for vessels and equipment (5,227) (49,055)
Investment in direct financing lease assets - (29)
Direct financing lease payments received 11,200 11,701
Purchase of 25% interest in Teekay Offshore
Operating L.P. - (111,746)
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Net investing cash flow 5,973 (149,129)
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Decrease in cash and cash equivalents (34,198) (8,203)
Cash and cash equivalents, beginning of the period 131,488 121,224
---------------------------------------------------------------------------
Cash and cash equivalents, end of the period 97,290 113,021
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars)
Set forth below is a reconciliation of the Partnership's
unaudited adjusted net income attributable to the partners, a
non-GAAP financial measure, to net income as determined in
accordance with GAAP, adjusted for some of the significant items of
income and expense that affected the Partnership's net income for
the three months ended June 30, 2009 and March 31, 2009, all of
which items are typically excluded by securities analysts in their
published estimates of the Partnership's financial results:
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Three Three
Months Months
Ended Ended
June March
30, 2009 31, 2009
(unaudited) (unaudited)
Net income - GAAP basis 64,180 31,616
Adjustments:
Net income attributable to non-controlling
interests (30,715) (14,676)
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Net income attributable to the partners 33,465 16,940
Add (subtract) specific items affecting net
income:
Restructuring charges (1) 1,481 2,201
Foreign currency exchange losses (2) 121 311
Deferred income tax expense relating to
unrealized foreign exchange gains (3) 1,904 8,364
Unrealized gains on derivative instruments (4) (54,131) (28,977)
Non-controlling interests' share of
items above (5) 24,116 8,628
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Total adjustments (26,509) (9,473)
---------------------------------------------------------------------------
Adjusted net income attributable to the partners 6,956 7,467
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(1) Restructuring charges were incurred in connection with the re-flagging
of certain of the Partnership's vessels, which will result in lower
future crewing costs.
(2) Foreign currency exchange gains (losses) primarily relate to the
Partnership's revaluation of all foreign currency-denominated monetary
assets and liabilities based on the prevailing exchange rate at the end
of each reporting period and also includes the unrealized gains and
losses, arising from hedge ineffectiveness, from foreign exchange
forward contracts that are or have been designated as hedges for
accounting purposes.
(3) Portion of deferred income tax expense related to unrealized foreign
exchange gains and losses.
(4) Reflects the unrealized gain or loss due to changes in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes.
(5) Primarily relates to Teekay's non-controlling interest share of the
items noted above.
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Distributable Cash
Flow (DCF)
Distributable cash flow represents net income adjusted for
depreciation and amortization expense, non-controlling interest,
non-cash items, estimated maintenance capital expenditures, gains
and losses on vessel sales, unrealized gains and losses from
derivatives, non-cash income taxes and unrealized foreign exchange
related items. Maintenance capital expenditures represent those
capital expenditures required to maintain over the long-term the
operating capacity of, or the revenue generated by, the
Partnership's capital assets. Distributable cash flow is a
quantitative standard used in the publicly-traded partnership
investment community to assist in evaluating a partnership's
ability to make quarterly cash distributions. Distributable cash
flow is not defined by United States generally accepted accounting
principles and should not be considered as an alternative to net
income or any other indicator of the Partnership's performance
required by United States generally accepted accounting principles.
The table below reconciles distributable cash flow to net
income.
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Three Months Ended
June 30, 2009
(unaudited)
---------------------------------------------------------------------------
Net income 64,180
Add:
Depreciation and amortization 34,588
Less:
Income tax recovery (3,158)
Foreign exchange and other, net (525)
Unrealized gains on non-designated derivative instruments (54,131)
Estimated maintenance capital expenditures (20,288)
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Distributable Cash Flow before Non-Controlling Interest 20,666
Non-controlling interests' share of DCF (11,630)
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Distributable Cash Flow 9,036
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TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C - SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
Three Months Ended June 30, 2009
(unaudited)
Shuttle Conventional
Tanker Tanker FSO
Segment Segment Segment Total
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Net voyage revenues (1) 109,860 25,043 15,888 150,791
Vessel operating
expenses(2) 34,737 5,942 6,257 46,936
Time-charter hire
expense 29,144 - - 29,144
Depreciation and
amortization 23,185 5,984 5,419 34,588
General and
administrative(2) 11,048 1,283 1,020 13,351
Restructuring charges 1,481 - - 1,481
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Income from vessel
operations 10,265 11,834 3,192 25,291
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Three Months Ended March 31, 2009
(unaudited)
Shuttle Conventional
Tanker Tanker FSO
Segment Segment Segment Total
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Net voyage revenues (1) 119,897 23,862 14,853 158,612
Vessel operating
expenses(2) 39,522 5,390 5,822 50,734
Time-charter hire
expense 32,145 - - 32,145
Depreciation and
amortization 23,155 5,974 5,402 34,531
General and
administrative(2) 10,048 1,434 440 11,922
Restructuring charges 2,201 - - 2,201
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Income from vessel
operations 12,826 11,064 3,189 27,079
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(1) Net voyage revenues represents voyage revenues less voyage expenses,
which comprise all expenses relating to certain voyages, including
bunker fuel expenses, port fees, canal tolls and brokerage commissions.
Net voyage revenues is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping companies.
Please see the Partnership's web site at www.teekayoffshore.com for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
(2) Commencing in the quarter ended March 31, 2009, and applied
retroactively, the gains and losses related to derivative instruments
that are not designated as hedges for accounting purposes have been
reclassified to a separate line item in the Statements of Income and
are no longer included in the amounts above.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended)
which reflect management's current views with respect to certain
future events and performance, including statements regarding: the
impact on the Partnership's operating expenses due to the
re-flagging of certain shuttle tankers and other cost management
initiatives; the impact on the Partnership's shuttle tanker fleet
utilization as a result of reduced oil production, seasonal
maintenance on certain North Sea oil facilities and start-up delays
on certain North Sea oil fields; the Partnership's future growth
prospects; the potential for Teekay to offer up to four Aframax
shuttle tanker newbuildings either with new long-term fixed-rate
contracts, or to service the contracts-of-affreightment in the
North Sea; Teekay's recent offer to sell the Petrojarl Varg FPSO
unit to the Partnership and the potential for Teekay to offer
Teekay Petrojarl's other existing FPSO units, and the expected
accretion to the Partnership's distributable cash flow from such
FPSO acquisitions; the timing and certainty of the Partnership's
acceptance, or election, to acquire the FPSOs and FSO from Teekay;
the potential for Teekay to secure future FPSO projects; the
potential for Teekay to offer to Teekay Offshore additional limited
partner interests in OPCO; and the Partnership's exposure to
foreign currency fluctuations.
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 production
of offshore oil, either generally or in particular regions; changes
in trading patterns significantly affecting overall vessel tonnage
requirements; changes in applicable industry laws and regulations
and the timing of implementation of new laws and regulations; the
potential for early termination of long-term contracts and
inability of the Partnership or OPCO to renew or replace long-term
contracts; higher than expected increases in vessel operating
expenses; the failure of Teekay to offer additional assets to
Teekay Offshore; required approvals by the Conflicts Committee of
Teekay Offshore's General Partner to acquire assets from Teekay,
including the Petrojarl Varg FPSO; the Partnership's ability to
raise financing to purchase additional vessels and/or interests in
OPCO; changes to the amount or proportion of revenues, expenses, or
debt service costs denominated in foreign currencies; 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, 2008. 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.
Contacts: Teekay Offshore Partners L.P. Kent Alekson Investor
Relations +1 (604) 609-6442 Teekay Offshore Partners L.P. Nicole
Breuls Media Enquiries +1 (604) 844-6631 www.teekayoffshore.com
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