UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Date of Report May 13, 2011
Commission file number 1-33198
TEEKAY OFFSHORE PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
4th floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F
þ
Form 40- F
o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1).
Yes
o
No
þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7).
Yes
o
No
þ
|
|
|
|
|
TEEKAY OFFSHORE PARTNERS L.P.
4
th
Floor, Belvedere Building, 69 Pitts Bay Road,
Hamilton, HM 08, Bermuda
|
EARNINGS
RELEASE
TEEKAY OFFSHORE PARTNERS
REPORTS FIRST QUARTER RESULTS
Highlights
|
|
Generated distributable cash flow of $29.2 million in the first quarter of 2011, up 5.8
percent from the same period of the prior year.
|
|
|
Increased quarterly cash distribution by 5.3 percent to $0.50 per unit for the first
quarter of 2011.
|
|
|
On March 8, 2011, acquired the remaining 49 percent interest in Teekay Offshore Operating
L.P. from Teekay Corporation.
|
|
|
Partnerships total liquidity was $382 million as at March 31, 2011.
|
Hamilton, Bermuda, May 12, 2011 Teekay Offshore GP L.L.C., the general partner of Teekay Offshore
Partners L.P.
(Teekay Offshore
or
the Partnership)
(NYSE: TOO), today reported the Partnerships
results for the quarter ended March 31, 2011. During the first quarter of 2011, the Partnership
generated distributable cash flow
(1)
of $29.2 million, compared to $27.6 million in the
same period of the prior year.
On April 21, 2011, a cash distribution of $0.50 per unit was declared for the quarter ended March
31, 2011. The cash distribution is payable on May 13, 2011 to all unitholders of record on May 6,
2011.
Our acquisition of the remaining 49 percent interest in Teekay Offshore Operating L.P., or OPCO,
in March was a key milestone for the Partnership, commented Peter Evensen, Chief Executive Officer
of Teekay Offshore GP LLC. It significantly simplified our ownership structure and provided a
substantial increase to our distributable cash flow, allowing us to increase the distribution paid
to unitholders by 5.3 percent in the first quarter of 2011. The Partnerships distributable cash
flow is expected to increase further in the second quarter of 2011, reflecting the full quarter
benefit from the OPCO transaction on March 8
th
, 2011. Mr. Evensen continued, The
attractive fundamentals for deepwater offshore oil production are creating more growth
opportunities for the Partnership, many of which we are currently evaluating. With over $380
million of available liquidity, the Partnership is well positioned to continue its track record of
accretive growth.
Summary of Recent Transaction
On March 8, 2011, the Partnership acquired from Teekay Corporation (
Teekay
) the remaining 49
percent interest in OPCO that it did not already own. At the time of the transaction, OPCO
operated a fleet of 34 shuttle tankers, three Floating Storage and Offtake
(FSO)
units, nine
double-hull conventional oil tankers and two lightering vessels. The Partnership financed the
acquisition through a combination of $175 million in cash (less $15 million in distributions made
by OPCO to Teekay between December 31, 2010 and the date of acquisition) and the issuance of 7.6
million common units to Teekay.
|
|
|
(1)
|
|
Distributable cash flow is a non-GAAP financial measure used by certain investors to measure
the financial performance of the Partnership and other master limited partnerships.
Please see
Appendix B
for a reconciliation of distributable cash flow to the most directly
comparable financial measure under U.S. generally accepted accounting principles (
GAAP
).
|
- more -
1
Teekay Offshores Fleet
The following table summarizes Teekay Offshores fleet as of May 1, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Vessels
|
|
|
|
Owned
|
|
|
|
|
|
|
Committed
|
|
|
|
|
|
|
Vessels
|
|
|
Chartered-in Vessels
|
|
|
Newbuildings
|
|
|
Total
|
|
Shuttle Tanker Segment
|
|
|
30
|
(i)
|
|
|
5
|
|
|
|
1
|
|
|
|
36
|
|
Conventional Tanker Segment
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
FSO Segment
|
|
5
|
(ii)
|
|
|
|
|
|
|
|
|
|
|
5
|
|
FPSO Segment
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
48
|
|
|
|
5
|
|
|
|
1
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
|
Includes six shuttle tankers in which Teekay Offshores interest is 50
percent and three shuttle tankers in which Teekay Offshores ownership is 67
percent.
|
|
(ii)
|
|
As a result of the charterer exercising its purchase option in
accordance with the terms of the charter contract, Teekay Offshore sold the
Karratha Spirit
FSO for sales proceeds of $5.1 million during the first quarter
of 2011.
|
Future Growth Opportunities
Pursuant to an omnibus agreement that Teekay Offshore entered into in connection with its initial
public offering in December 2006, Teekay is obligated to offer to the Partnership its interest in
certain shuttle tankers, FSO units, floating production, storage and offloading (
FPSO
) units and
joint ventures it may acquire in the future, provided the vessels are servicing contracts with
remaining durations of three years or greater. The Partnership may also acquire other vessels that
Teekay may offer it from time to time.
Shuttle Tankers
Teekay Offshore recently acquired two Aframax shuttle tanker newbuildings (the
Amundsen Spirit
and
the
Nansen Spirit
) and has committed to acquire one additional Aframax shuttle tanker newbuilding
(the
Peary Spirit
) that is scheduled to deliver to the Partnership in July 2011. Teekay is
obligated to offer the Partnership a fourth shuttle tanker newbuilding (the
Scott Spirit
) within
365 days after its delivery, provided the vessel is servicing a charter contract with remaining
durations of three years or greater.
FPSO Units
Pursuant to the omnibus agreement and a subsequent agreement, Teekay is obligated to offer to sell
the
Petrojarl Foinaven
FPSO unit, an existing FPSO unit, which is owned by Teekay and operating
under a long-term contract in the North Sea, to Teekay Offshore prior to July 9, 2012. The
purchase price for the
Petrojarl Foinaven
FPSO unit would be at its fair market value plus any
additional tax or other costs to Teekay that would be required to transfer the FPSO unit to the
Partnership.
In October 2010, Teekay signed a long-term contract with Petrobras to provide a FPSO unit for the
Tiro and Sidon fields located in the Santos Basin offshore Brazil. The contract with Petrobras
will be serviced by a newly converted FPSO unit, named
Petrojarl Cidade de Itajai
. The new FPSO
unit is scheduled to deliver in the second quarter of 2012, when it will commence operations under
a nine-year, fixed-rate time-charter contract to Petrobras with six additional one-year extension
options. Pursuant to the omnibus agreement, Teekay is obligated to offer to the Partnership its
interest in this FPSO project at Teekays fully built-up cost, within 365 days after the
commencement of the charter with Petrobras.
Teekay recently entered into a joint venture agreement with Odebrecht Oil & Gas S.A. (a member of
the Odebrecht group) to jointly pursue FPSO projects in Brazil. Teekay intends for Odebrecht to be
a 50 percent partner in the Tiro Sidon FPSO project and is currently working with Odebrecht on
potential FPSO project opportunities which, pursuant to the omnibus agreement, may result in the
future sale of new FPSO units to the Partnership. Odebrecht is a well-established Brazil-based
company that operates in the engineering and construction, petrochemical, bioenergy, energy, oil
and gas, real estate and environmental engineering sectors, with over 120,000 employees and a
presence in over 20 countries.
In addition, Teekay has signed a Letter of Intent with a major oil and gas company to provide a new
harsh weather FPSO which will operate in the North Sea. Teekay has been involved in the front-end
engineering and design (FEED) study for this project over the past several months, and is currently
working towards finalizing a contract with the customer. In connection with this project, Teekay
recently signed a conditional contract with Samsung Heavy Industries (
Samsung
) to construct a
newbuilding FPSO unit. If Teekay is awarded an operating contract that is three years or greater
in duration, pursuant to the omnibus agreement, Teekay would be obligated to offer to the
Partnership its interest in this FPSO project at Teekays fully built-up cost, within 365 days
after the commencement of the charter.
- more -
2
Financial Summary
The Partnership reported adjusted net income attributable to the partners
(1)
(as
detailed in
Appendix A
to this release) of $22.1 million for the quarter ended March 31, 2011,
compared to $20.1 million for the same period of the prior year. Adjusted net income attributable
to the partners excludes a number of specific items that had the net effect of increasing net
income by $1.3 million and decreasing net income by $5.3 million for the quarters ended March 31,
2011 and March 31, 2010, respectively, as detailed in
Appendix A
. Including these items, the
Partnership reported, on a GAAP basis, net income attributable to the partners of $23.4 million
for the first quarter of 2011, compared to $14.9 million in the same period of the prior year.
Net revenues
(2)
for the first quarter of 2011 increased to $208.3 million compared to
$198.6 million in the same period of the prior year.
For accounting purposes, the Partnership is required to recognize, through the consolidated
statements of income, changes in the fair value of certain derivative instruments as unrealized
gains or losses. This revaluation does not affect the economics of any hedging transactions or
have any impact on the Partnerships actual cash flows or the calculation of its distributable cash
flow.
The Partnership has recast its historical financial results to include the results of the
Falcon
Spirit
FSO unit and the
Cidade de Rio das Ostras
(
Rio das Ostras)
FPSO unit relating to the periods
prior to their acquisition by the Partnership from Teekay, and for which pre-acquisition results
are referred to in this release as the Dropdown Predecessor. In accordance with GAAP, business
acquisitions of entities under common control that have begun operations are required to be
accounted for in a manner whereby the Partnerships financial statements are retroactively adjusted
to include the historical results of the acquired vessels from the date the vessels were originally
under the control of Teekay. For these purposes, the
Falcon Spirit
was under common control by
Teekay from December 15, 2009 until April 1, 2010, when it was sold to the Partnership and the
Rio
das Ostras
FPSO unit was under common control by Teekay from April 1, 2008 to October 1, 2010, when
it was sold to the Partnership.
On October 1, 2010, Teekay Offshore agreed to acquire Teekays interests in the newbuilding shuttle
tanker
Peary Spirit
. Prior to its acquisition by the Partnership, this entity is considered a
variable interest entity for accounting purposes. The
Peary Spirit
is expected to be acquired by
the Partnership in July 2011. As a result, the Partnerships consolidated financial statements
reflect the financial position, results of operations and cash flows of the
Peary Spirit
from
October 1, 2010.
- more -
3
Operating Results
The following table highlights certain financial information for Teekay Offshores four main
segments: the Shuttle Tanker segment, the Conventional Tanker segment, the FSO segment, and the
FPSO segment (please refer to the Teekay Offshores Fleet section of this release above and
Appendix C
for further details).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2011
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Conventional
|
|
|
|
|
|
|
|
|
|
|
|
|
Shuttle Tanker
|
|
|
Tanker
|
|
|
FSO
|
|
|
FPSO
|
|
|
|
|
(in thousands of U.S. dollars)
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Total
|
|
Net revenues
|
|
|
119,204
|
|
|
|
29,617
|
|
|
|
17,200
|
|
|
|
42,285
|
|
|
|
208,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
|
|
|
40,785
|
|
|
|
5,825
|
|
|
|
9,148
|
|
|
|
19,372
|
|
|
|
75,130
|
|
Time-charter hire expense
|
|
|
20,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,270
|
|
Depreciation and amortization
|
|
|
27,432
|
|
|
|
6,045
|
|
|
|
3,181
|
|
|
|
8,912
|
|
|
|
45,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from vessel operations
(1)
|
|
|
45,652
|
|
|
|
22,043
|
|
|
|
4,804
|
|
|
|
19,496
|
|
|
|
91,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2010
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Conventional
|
|
|
|
|
|
|
|
|
|
|
|
|
Shuttle Tanker
|
|
|
Tanker
|
|
|
FSO
|
|
|
FPSO
|
|
|
|
|
(in thousands of U.S. dollars)
|
|
Segment
|
|
|
Segment
|
|
|
Segment
(2)
|
|
|
Segment
(2)
|
|
|
Total
|
|
Net revenues
|
|
|
112,939
|
|
|
|
25,914
|
|
|
|
20,401
|
|
|
|
39,371
|
|
|
|
198,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
|
|
|
34,163
|
|
|
|
5,714
|
|
|
|
8,405
|
|
|
|
15,106
|
|
|
|
63,388
|
|
Time-charter hire expense
|
|
|
25,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,038
|
|
Depreciation and amortization
|
|
|
24,955
|
|
|
|
5,742
|
|
|
|
5,417
|
|
|
|
8,894
|
|
|
|
45,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from vessel operations
(1)
|
|
|
44,804
|
|
|
|
19,007
|
|
|
|
9,534
|
|
|
|
15,768
|
|
|
|
89,113
|
|
|
|
|
(1)
|
|
Cash flow from vessel operations represents income from vessel operations before
depreciation and amortization expense and amortization of deferred gains, includes the
realized gains (losses) on the settlements foreign exchange forward contracts and excludes the
cash flow from vessel operations relating to the Partnerships Dropdown Predecessor and
adjusting for direct financing leases to a cash basis. 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 Partnerships 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)
|
|
Cash flow from vessel operations for the FSO segment and FPSO segment excludes the cash flow
generated by the
Falcon Spirit
FSO unit and the
Rio das Ostras
FPSO unit until their
acquisition by the Partnership on April 1, 2010 and October 1, 2010, respectively. Results
for the
Falcon Spirit
FSO unit and the
Rio das Ostras
FPSO unit for the periods prior to their
acquisition by the Partnership when they were owned and operated by Teekay are included in the
Dropdown Predecessor
.
|
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnerships shuttle tanker segment increased to $45.7
million for the first quarter of 2011, compared to $44.8 million for the same period of the prior
year, primarily due to the acquisition of the
Amundsen Spirit
and
Nansen Spirit
during the fourth
quarter of 2010, higher revenues relating to the amended Statoil master agreement effective
September 2010, and lower time-charter hire expenses resulting from the redelivery of two
in-chartered vessels. This was partially offset by lower revenue resulting from fewer revenue days
from vessels operating under contracts of affreightment, and higher vessel operating expenses and
restructuring costs incurred during the current quarter.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnerships conventional tanker segment increased to
$22.0 million in the first quarter of 2011, compared to $19.0 million for the same period of the
prior year, primarily due to higher than normal net bunker revenues due to changes in bunker prices
and bunker consumption during the first quarter of 2011.
- more -
4
FSO Segment
Cash flow from vessel operations from the Partnerships FSO segment decreased to $4.8 million in
the first quarter of 2011, compared to $9.5 million for the same period of the prior year, due
primarily to the sale of the FSO unit
Karratha Spirit
and associated restructuring charges of $2.7
million incurred during the quarter, and a lower time-charter rate on the
Navion Saga
in accordance
with the charter contract that took effect in the second quarter of 2010, partially offset by the
acquisition of the
Falcon Spirit
FSO unit on April 1, 2010.
FPSO Segment
Cash flow from vessel operations from the Partnerships FPSO segment increased to $19.5 million for
the first quarter of 2011, compared to $15.8 million for the same period of the prior year,
primarily due to the acquisition of the
Rio das Ostras
FPSO unit on October 1, 2010.
Liquidity
As of March 31, 2011, the Partnership had total liquidity of $381.9 million, which consisted of
$123.4 million in cash and cash equivalents and $258.5 million in undrawn revolving credit
facilities.
2010 Audited Financial Statements
Teekay Offshore Partners L.P. filed its 2010 Annual Report on Form 20-F with the U.S. Securities
and Exchange Commission (
SEC
) on April 12, 2011. Copies are available on Teekay Offshores web
site, under Investor Briefcase, at
www.teekayoffshore.com
. Unitholders may request a
printed copy of this annual report, including the complete audited financial statements free of
charge by contacting Teekay Offshores Investor Relations.
Conference Call
The Partnership plans to host a conference call on May 13, 2011 at 1:00 p.m. (ET) to discuss its
results for the first quarter 2011. An accompanying investor presentation will be available on
Teekay Offshores Web site at www.teekayoffshore.com prior to the start of the call. All
shareholders and interested parties are invited to listen to the live conference call by choosing
from the following options:
|
|
|
By dialing (866) 322-8032 or (416) 640-3406, if outside North America, and quoting
conference ID code 5531030.
|
|
|
|
By accessing the webcast, which will be available on Teekay Offshores Web site at
www.teekayoffshore.com
(the archive will remain on the Web site for a period of 30
days).
|
The conference call will be recorded and available until May 20, 2011. This recording can be
accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North
America, and entering access code 5531030.
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, oil production and
storage services to the offshore oil industry. Teekay Offshore owns 36 shuttle tankers (including
five chartered-in vessels and one committed newbuilding), five FSO units, 11 conventional oil
tankers, and two FPSO units. Teekay Offshore also has rights to participate in certain other FPSO
and shuttle tanker opportunities.
Teekay Offshores common units trade on the New York Stock Exchange under the symbol TOO.
For Investor Relations enquiries contact:
Kent Alekson
Tel: +1 (604) 609-6442
Web site:
www.teekayoffshore.com
- more -
5
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands of U.S. dollars, except unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2010
(1)
|
|
|
2010
(1)(2)
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
233,771
|
|
|
|
229,263
|
|
|
|
233,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses
|
|
|
25,465
|
|
|
|
26,151
|
|
|
|
34,954
|
|
Vessel operating expenses
(3)
|
|
|
75,130
|
|
|
|
77,344
|
|
|
|
63,388
|
|
Time-charter hire expense
|
|
|
20,270
|
|
|
|
20,981
|
|
|
|
25,038
|
|
Depreciation and amortization
|
|
|
45,570
|
|
|
|
50,230
|
|
|
|
45,008
|
|
General and administrative
(3)
|
|
|
18,730
|
|
|
|
13,394
|
|
|
|
16,634
|
|
Loss on sale of vessel
|
|
|
171
|
|
|
|
|
|
|
|
|
|
Write-down of vessels
|
|
|
900
|
|
|
|
9,441
|
|
|
|
|
|
Restructuring charge
(4)
|
|
|
3,924
|
|
|
|
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190,160
|
|
|
|
197,541
|
|
|
|
185,141
|
|
|
|
|
|
|
|
|
|
|
|
Income from vessel operations
|
|
|
43,611
|
|
|
|
31,722
|
|
|
|
48,438
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ITEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(8,469
|
)
|
|
|
(8,553
|
)
|
|
|
(9,880
|
)
|
Interest income
|
|
|
129
|
|
|
|
200
|
|
|
|
165
|
|
Realized and unrealized gain (loss)
on derivative instruments
(5)
|
|
|
10,840
|
|
|
|
63,863
|
|
|
|
(24,475
|
)
|
Foreign exchange (loss) gain
(6)
|
|
|
(799
|
)
|
|
|
(348
|
)
|
|
|
1,622
|
|
Income tax (expense) recovery
|
|
|
(2,653
|
)
|
|
|
1,133
|
|
|
|
6,911
|
|
Other income net
|
|
|
1,310
|
|
|
|
1,296
|
|
|
|
2,481
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
43,969
|
|
|
|
89,313
|
|
|
|
25,262
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
20,593
|
|
|
|
39,332
|
|
|
|
10,849
|
|
Dropdown Predecessor
(1) (2)
|
|
|
|
|
|
|
|
|
|
|
(467
|
)
|
Partners
|
|
|
23,376
|
|
|
|
49,981
|
|
|
|
14,880
|
|
Limited partners units outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common units outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and diluted
|
|
|
57,170,219
|
|
|
|
50,547,500
|
|
|
|
38,206,000
|
|
Total units outstanding at end of period
|
|
|
62,800,314
|
|
|
|
55,237,500
|
|
|
|
42,760,000
|
|
|
|
|
(1)
|
|
Results for the
Rio das Ostras
FPSO unit for the period beginning April 2008 prior to its
acquisition by the Partnership in October 2010 when it was owned and operated by Teekay
Corporation, are included in the
Dropdown Predecessor
.
|
|
(2)
|
|
Results for the
Falcon Spirit
FSO unit for the period beginning December 2009 prior to its
acquisition by the Partnership in April 2010 when it was owned and operated by Teekay
Corporation, are included in the
Dropdown Predecessor.
|
|
(3)
|
|
The Partnership has entered into foreign exchange forward contracts, which are economic
hedges for certain vessel operating expenses and general and administrative expenses. Certain
of these forward contracts have been designated as cash flow hedges pursuant to GAAP.
Unrealized gains (losses) arising from hedge ineffectiveness from such forward contracts,
including forward contracts relating to the Dropdown Predecessor, are reflected in vessel
operating expenses, and general and administrative expenses in the above Summary Consolidated
Statements of Income as detailed in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2011
|
|
|
December 31, 2010
|
|
|
March 31, 2010
|
|
Vessel operating expenses
|
|
|
(184
|
)
|
|
|
(69
|
)
|
|
|
(1,125
|
)
|
General and administrative
|
|
|
130
|
|
|
|
(272
|
)
|
|
|
(712
|
)
|
|
|
|
(4)
|
|
Restructuring charges for the three months ended March 31, 2011 were incurred in connection
with the sale of a FSO unit and the termination of the charter contract of one of the
Partnerships shuttle tankers. Restructuring charges for the three months ended March 31, 2010
were incurred in connection with the re-flagging of certain of the Partnerships vessels.
|
- end -
6
|
|
|
(5)
|
|
The realized (losses) gains relate to the amounts the Partnership actually paid or received
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
|
|
|
|
March 31, 2011
|
|
|
December 31, 2010
|
|
|
March 31, 2010
|
|
|
Realized (losses) gains relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
(13,702
|
)
|
|
|
(12,993
|
)
|
|
|
(12,787
|
)
|
Foreign currency forward contract
|
|
|
418
|
|
|
|
(384
|
)
|
|
|
(155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,284
|
)
|
|
|
(13,377
|
)
|
|
|
(12,942
|
)
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
20,765
|
|
|
|
76,368
|
|
|
|
(10,949
|
)
|
Foreign currency forward contracts
|
|
|
3,359
|
|
|
|
872
|
|
|
|
(584
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,124
|
|
|
|
77,240
|
|
|
|
(11,533
|
)
|
|
|
|
|
|
|
|
|
|
|
Total realized and unrealized gains (losses) on non-designated
derivative instruments
|
|
|
10,840
|
|
|
|
63,863
|
|
|
|
(24,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
Foreign exchange (loss) gain includes realized gains of $0.7 million for the three months
ended March 31, 2011 relating to the amounts the Partnership received to settle the
Partnerships non-designated cross currency swap that was entered into as an economic hedge in
relation to the Partnerships NOK 600 million unsecured bond. Foreign exchange (loss) gain
also includes unrealized gains of $6.2 million for the three months ended March 31, 2011
relating to the change in fair value of such derivative instrument, partially offset by $5.3
million in unrealized losses on the revaluation of the NOK bond.
|
- end -
7
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
As at
|
|
|
As at
|
|
|
|
March 31, 2011
|
|
|
December 31, 2010
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
123,422
|
|
|
|
166,483
|
|
Other current assets
|
|
|
156,946
|
|
|
|
142,493
|
|
Vessels and equipment
|
|
|
2,271,695
|
|
|
|
2,299,507
|
|
Other assets
|
|
|
75,501
|
|
|
|
78,267
|
|
Intangible assets
|
|
|
26,983
|
|
|
|
28,763
|
|
Goodwill
|
|
|
127,113
|
|
|
|
127,113
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
2,781,660
|
|
|
|
2,842,626
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
101,491
|
|
|
|
101,287
|
|
Other current liabilities
|
|
|
145,511
|
|
|
|
113,183
|
|
Current portion of long-term debt
|
|
|
137,468
|
|
|
|
152,096
|
|
Long-term debt
|
|
|
1,667,768
|
|
|
|
1,565,044
|
|
Other long-term liabilities
|
|
|
117,483
|
|
|
|
140,842
|
|
Redeemable non-controlling interest
|
|
|
40,614
|
|
|
|
41,725
|
|
Equity:
|
|
|
|
|
|
|
|
|
Non-controlling interest
|
|
|
48,323
|
|
|
|
170,876
|
|
Partners equity
|
|
|
523,002
|
|
|
|
557,573
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
|
2,781,660
|
|
|
|
2,842,626
|
|
|
|
|
|
|
|
|
- end -
8
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2010
(1)
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Cash and cash equivalents provided by (used for)
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net operating cash flow
|
|
|
69,028
|
|
|
|
73,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from drawdown of long-term debt
|
|
|
177,644
|
|
|
|
62,000
|
|
Scheduled repayments of long-term debt
|
|
|
(44,441
|
)
|
|
|
(11,839
|
)
|
Prepayments of long-term debt
|
|
|
(50,360
|
)
|
|
|
(110,163
|
)
|
Advances to affiliates
|
|
|
|
|
|
|
(44,410
|
)
|
Joint venture partner advances
|
|
|
14,500
|
|
|
|
4,532
|
|
Contribution by Teekay Corporation relating to acquisition of
Rio das Ostras
|
|
|
1,000
|
|
|
|
|
|
Purchase of 49% interest in Teekay Offshore Operating L.P.
|
|
|
(160,000
|
)
|
|
|
|
|
Equity contribution from joint venture partner
|
|
|
750
|
|
|
|
|
|
Proceeds from issuance of common units
|
|
|
|
|
|
|
100,581
|
|
Expenses of equity offerings
|
|
|
|
|
|
|
(4,452
|
)
|
Cash distributions paid by the Partnership
|
|
|
(27,723
|
)
|
|
|
(17,665
|
)
|
Cash distributions paid by subsidiaries to non-controlling interests
|
|
|
(17,449
|
)
|
|
|
(19,472
|
)
|
Other
|
|
|
|
|
|
|
333
|
|
|
|
|
|
|
|
|
Net financing cash flow
|
|
|
(106,079
|
)
|
|
|
(40,555
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Expenditures for vessels and equipment
|
|
|
(16,907
|
)
|
|
|
(208
|
)
|
Proceeds from sale of vessels and equipment
|
|
|
5,054
|
|
|
|
|
|
Investment in direct financing lease assets
|
|
|
370
|
|
|
|
(886
|
)
|
Direct financing lease payments received
|
|
|
5,473
|
|
|
|
6,178
|
|
|
|
|
|
|
|
|
Net investing cash flow
|
|
|
(6,010
|
)
|
|
|
5,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(43,061
|
)
|
|
|
38,480
|
|
Cash and cash equivalents, beginning of the period
|
|
|
166,483
|
|
|
|
109,407
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of the period
|
|
|
123,422
|
|
|
|
147,887
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
In accordance with GAAP, the Summary Consolidated Statements of Cash Flows includes the
cash flows relating to the
Falcon Spirit
FSO unit, for the period from December 15, 2009 to
April 1, 2010 and the
Rio das Ostras
FPSO unit, for the period from April 1, 2008 to October
1, 2010, when the vessels were under the common control of Teekay Corporation, but prior to
their acquisition by the Partnership.
|
- end -
9
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 Partnerships unaudited adjusted net income attributable
to the partners, a non-GAAP financial measure, to net income attributable to the partners as
determined in accordance with GAAP. The Partnership believes that, in addition to conventional
measures prepared in accordance with GAAP, certain investors use this information to evaluate the
Partnerships financial performance. The items below are also typically excluded by securities
analysts in their published estimates of the Partnerships financial results. Adjusted net income
attributable to the partners is intended to provide additional information and should not be
considered a substitute for measures of performance prepared in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2011
|
|
|
March 31, 2010
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Net income GAAP basis
|
|
|
43,969
|
|
|
|
25,262
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Net (income) attributable to non-controlling interests
|
|
|
(20,593
|
)
|
|
|
(10,849
|
)
|
Net loss attributable to Dropdown Predecessor
|
|
|
|
|
|
|
467
|
|
|
|
|
|
|
|
|
Net income attributable to the partners
|
|
|
23,376
|
|
|
|
14,880
|
|
Add (subtract) specific items affecting net income:
|
|
|
|
|
|
|
|
|
Foreign exchange losses (gains)
(1)
|
|
|
1,464
|
|
|
|
(636
|
)
|
Foreign currency exchange losses resulting
from hedging ineffectiveness
(2)
|
|
|
54
|
|
|
|
1,860
|
|
Deferred income tax expense (recovery) relating to unrealized
foreign exchange gains
(3)
|
|
|
6,519
|
|
|
|
(3,209
|
)
|
Unrealized (gains) losses on derivative instruments
(4)
|
|
|
(24,124
|
)
|
|
|
11,150
|
|
Loss on sale of vessel
(5)
|
|
|
171
|
|
|
|
|
|
Write-down of vessel
(6)
|
|
|
900
|
|
|
|
|
|
Restructuring charges and other
(7)
|
|
|
4,873
|
|
|
|
119
|
|
Non-controlling interests share of items above
|
|
|
8,849
|
|
|
|
(4,019
|
)
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
(1,294
|
)
|
|
|
5,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to the partners
|
|
|
22,082
|
|
|
|
20,145
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Foreign exchange losses (gains) primarily relate to the Partnerships revaluation of all
foreign currency-denominated monetary assets and liabilities based on the prevailing exchange
rate at the end of each reporting period, excluding amounts related to Dropdown Predecessor.
|
|
(2)
|
|
Foreign currency exchange losses resulting from hedging ineffectiveness include the
unrealized losses arising from hedge ineffectiveness from foreign exchange forward contracts
that are or have been designated as hedges for accounting purposes. This excludes foreign
currency exchange gains resulting from hedging ineffectiveness relating to the Dropdown
Predecessors of $0.02 million for the three months ended March 31, 2010.
|
|
(3)
|
|
Portion of deferred income tax (recovery) expense related to unrealized foreign exchange
gains and losses.
|
|
(4)
|
|
Reflects the unrealized losses (gains) due to changes in the mark-to-market value of interest
rate swaps and foreign exchange forward contracts that are not designated as hedges for
accounting purposes, excluding unrealized losses of $0.4 million relating to the Dropdown
Predecessors for the three months ended March 31, 2010.
|
|
(5)
|
|
Loss on sale of vessel relates to the sale of the
Karratha Spirit
FSO unit.
|
|
(6)
|
|
Write-down of vessel is related to the valuation impairment of one conventional tanker based
on its projected discounted cash flows.
|
|
(7)
|
|
Restructuring charges of $3.9 million for the three months ended March 31, 2011 were incurred
in connection with the sale of a FSO unit and the termination of the charter contract of one
of the Partnerships shuttle tankers. Restructuring charges of $0.1 million for the three
months ended March 31, 2010 were incurred in connection with the re-flagging of certain of the
Partnerships vessels. Other items for the three months ended March 31, 2011 include $0.9
million related to a one-time management fee associated with the portion of stock-based
compensation grants of Teekays former Chief Executive Officer that had not yet vested prior
to the date of his retirement on March 31, 2011.
|
- end -
10
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, income (loss) from variable
interest entities, non-cash income taxes, loss on write down of vessels 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
Partnerships capital assets. Distributable cash flow is a quantitative standard used in the
publicly-traded partnership investment community to assist in evaluating a partnerships ability to
make quarterly cash distributions. Distributable cash flow is not defined by GAAP and should not
be considered as an alternative to net income or any other indicator of the Partnerships
performance required by GAAP. The table below reconciles distributable cash flow to net income for
the quarter.
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31, 2011
|
|
|
|
(unaudited)
|
|
Net income
|
|
|
43,969
|
|
Add (subtract):
|
|
|
|
|
Depreciation and amortization
|
|
|
45,570
|
|
Loss on sale of vessel
|
|
|
171
|
|
Write-down of vessel
|
|
|
900
|
|
Foreign exchange and other, net
|
|
|
3,154
|
|
Deferred income tax expense
|
|
|
1,169
|
|
Estimated maintenance capital expenditures
|
|
|
(25,610
|
)
|
Unrealized gains on non-designated derivative instruments
(1)
|
|
|
(24,124
|
)
|
|
|
|
|
Distributable Cash Flow before Non-Controlling Interest
|
|
|
45,199
|
|
Non-controlling interests share of DCF
|
|
|
(15,983
|
)
|
|
|
|
|
Distributable Cash Flow
|
|
|
29,216
|
|
|
|
|
|
|
|
|
(1)
|
|
Derivative instruments include interest rate swaps and foreign exchange forward
contracts.
|
- end -
11
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2011
|
|
|
|
(unaudited)
|
|
|
|
Shuttle
|
|
|
Conventional
|
|
|
|
|
|
|
|
|
|
|
|
|
Tanker
|
|
|
Tanker
|
|
|
FSO
|
|
|
FPSO
|
|
|
|
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Total
|
|
Net revenues
(1)
|
|
|
119,204
|
|
|
|
29,617
|
|
|
|
17,200
|
|
|
|
42,285
|
|
|
|
208,306
|
|
Vessel operating expenses
|
|
|
40,785
|
|
|
|
5,825
|
|
|
|
9,148
|
|
|
|
19,372
|
|
|
|
75,130
|
|
Time-charter hire expense
|
|
|
20,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,270
|
|
Depreciation and amortization
|
|
|
27,432
|
|
|
|
6,045
|
|
|
|
3,181
|
|
|
|
8,912
|
|
|
|
45,570
|
|
General and administrative
|
|
|
12,482
|
|
|
|
1,749
|
|
|
|
1,063
|
|
|
|
3,436
|
|
|
|
18,730
|
|
Loss on sale of vessel
|
|
|
|
|
|
|
|
|
|
|
171
|
|
|
|
|
|
|
|
171
|
|
Write-down of vessel
|
|
|
|
|
|
|
900
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
Restructuring charges
|
|
|
1,227
|
|
|
|
|
|
|
|
2,697
|
|
|
|
|
|
|
|
3,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from vessel operations
|
|
|
17,008
|
|
|
|
15,098
|
|
|
|
940
|
|
|
|
10,565
|
|
|
|
43,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2010
|
|
|
|
(unaudited)
|
|
|
|
Shuttle
|
|
|
Conventional
|
|
|
|
|
|
|
|
|
|
|
|
|
Tanker
|
|
|
Tanker
|
|
|
FSO
|
|
|
FPSO
|
|
|
|
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
(2)
|
|
|
Segment
(2)
|
|
|
Total
|
|
Net revenues
(1)
|
|
|
112,939
|
|
|
|
25,914
|
|
|
|
20,401
|
|
|
|
39,371
|
|
|
|
198,625
|
|
Vessel operating expenses
|
|
|
34,163
|
|
|
|
5,714
|
|
|
|
8,405
|
|
|
|
15,106
|
|
|
|
63,388
|
|
Time-charter hire expense
|
|
|
25,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,038
|
|
Depreciation and amortization
|
|
|
24,955
|
|
|
|
5,742
|
|
|
|
5,417
|
|
|
|
8,894
|
|
|
|
45,008
|
|
General and administrative
|
|
|
11,260
|
|
|
|
1,193
|
|
|
|
1,010
|
|
|
|
3,171
|
|
|
|
16,634
|
|
Restructuring charges
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from vessel operations
|
|
|
17,404
|
|
|
|
13,265
|
|
|
|
5,569
|
|
|
|
12,200
|
|
|
|
48,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Net revenues represents revenues less voyage expenses, which comprise all expenses relating
to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage
commissions. Net revenues are a non-GAAP financial measure used by certain investors to
measure the financial performance of shipping companies. Please see the Partnerships 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)
|
|
Income from operations for the
Falcon Spirit
FSO unit and the
Rio das Ostras
FPSO unit for
the periods prior to their acquisition by the Partnership on April 1, 2010 and October 1,
2010, respectively, when they were owned and operated by Teekay Corporation are required by
GAAP to be included in Teekay Offshores results for such prior periods. The amounts included
in this release related to the
Falcon Spirit
FSO unit Dropdown Predecessor and the
Rio das
Ostras
FPSO Dropdown Predecessor figures are only expected to impact the accounting for
periods prior to the date the
Falcon Spirit
FSO unit and the
Rio das Ostras
FPSO were acquired
by the Partnership, and therefore will have no effect on the adjusted net income attributable
to the partners or distributable cash flow of the Partnership for any period, including the
first quarter of 2010.
|
- end -
12
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 managements current views with respect to certain
future events and performance, including statements regarding: the Partnerships future growth
prospects, cash flows and distributions to unitholders; the expected increase in distributable cash
flow in the second quarter of 2011 as a result of the acquisition of the remaining 49 percent
interest in OPCO in March 2011; the industry fundamentals for deepwater offshore oil production;
the potential for Teekay to offer additional vessels to the Partnership and the Partnerships
acquisition of any such vessels, including the
Petrojarl Foinaven
FPSO unit, the
Petrojarl Cidade
de Itajai
FPSO unit, and the
Scott Spirit
newbuilding Aframax shuttle tanker; and the potential for
the Partnership to acquire other vessels or offshore projects from Teekay or third parties. The
following factors are among those that could cause actual results to differ materially from the
forward-looking statements, which involve risks and uncertainties, and that should be considered in
evaluating any such statement: vessel operations and oil production volumes; significant changes in
oil prices; variations in expected levels of field maintenance; increased operating expenses;
variability in shuttle tanker tonnage requirements under the Statoil Master Agreement;
different-than-expected levels of oil production in the North Sea offshore fields; potential early
termination of contracts, including the
Rio das Ostras
FPSO time-charter contract and the Statoil
Master Agreement; failure of Teekay to offer to the Partnership additional vessels; the inability
of the joint venture between Teekay and Odebrecht to secure new Brazil FPSO projects that may be
offered for sale to the Partnership; failure of Teekay to win a new long-term fixed-rate contract
in the North Sea with a major oil and gas company; failure to obtain required approvals by the
Conflicts Committee of Teekay Offshores general partner to acquire to acquire other vessels or
offshore projects from from Teekay or third parties; the Partnerships ability to raise financing
to purchase additional assets; failure to secure a new contract in excess of three years for
Teekays fourth Aframax shuttle tanker newbuilding; and other factors discussed in Teekay
Offshores filings from time to time with the SEC, including its Report on Form 20-F for the fiscal
year ended December 31, 2010. 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 Partnerships expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is based.
- end -
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
TEEKAY OFFSHORE PARTNERS L.P.
By: Teekay Offshore GP L.L.C., its general partner
|
|
Date: May 13, 2011
|
By:
|
/s/ Peter Evensen
|
|
|
|
Peter Evensen
|
|
|
|
Chief Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Teekay Offshore Partners (NYSE:TOO)
Historical Stock Chart
From Jul 2023 to Jul 2024