Teekay Offshore Partners Reports Fourth Quarter and Annual Results
HAMILTON, BERMUDA--(Marketwired - Feb 20, 2014) - Teekay
Offshore Partners L.P. (NYSE:TOO) -
Highlights
- Generated distributable cash flow of $57.4 million in the
fourth quarter of 2013, an increase of 25 percent from the fourth
quarter of 2012.
- Declared fourth quarter 2013 cash distribution of $0.5384 per
unit, an increase of 2.5 percent from the previous quarter.
- In November 2013, took delivery of the fourth newbuilding
shuttle tanker, which began operations under a 10-year time-charter
with BG Group in Brazil in January 2014.
- Liquidity of approximately $493 million as at December 31,
2013, giving pro forma effect for proceeds from the $162 million
Norwegian bond issuance completed in January 2014.
Teekay Offshore GP LLC, 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 ended December 31, 2013. During the fourth
quarter of 2013, the Partnership generated distributable cash
flow(1) of $57.4 million, compared to $45.9 million in the same
period of the prior year.
On January 15, 2014, a cash distribution of $0.5384 per common
unit was declared for the quarter ended December 31, 2013, an
increase of $0.0131 per unit, or 2.5 percent, from the previous
quarter. The cash distribution was paid on February 14, 2014 to all
unitholders of record on January 31, 2014.
"Fiscal 2013 was another year of steady growth for Teekay
Offshore with the Partnership taking delivery of two FPSO units and
four newbuilding shuttle tankers," commented Peter Evensen, Chief
Executive Officer of Teekay Offshore GP LLC. "Based on the
increased contribution to the Partnership's distributable cash
flow, we were able to increase the Partnership's fourth quarter
distribution by a further 2.5 percent, to $0.5384 per unit, for a
total increase of five percent for the year."
"Looking ahead to 2014, we remain focused on efficiently
executing on our portfolio of accretive 2014 projects, including
the Remora HiLoad DP unit and the Salamander FSO. The Partnership
also has the opportunity to acquire a number of FPSOs available
from our sponsor, Teekay Corporation, the largest being the
Knarr FPSO, which is expected to be eligible for sale to
the Partnership commencing in the fourth quarter of 2014. In
addition, in December 2013, the Partnership was awarded a six-year
shuttle tanker contract, plus extension options, with BG Group to
provide oil transportation services for the Knarr oil and gas field
in the North Sea, which is a great example of Teekay Offshore's
ability to bundle services for its customers."
(1) Distributable cash flow is a non-GAAP financial measure used
by certain investors to measure the financial performance of the
Partnership and other master limited partnerships. Please see
Appendix B for a reconciliation of distributable cash flow
to the most directly comparable financial measure under United
States generally accepted accounting principles
(GAAP).
Summary of Recent
Events
Awarded Shuttle Tanker Contract for Knarr Field
In December 2013, Teekay Offshore was awarded a six year shuttle
tanker contract of affreightment (CoA), with extension
options up to an additional four years, with BG Group plc, which
will service the Knarr oil and gas field in the North Sea. The
expected start date for the shuttle CoA coincides with the expected
start-up of the Petrojarl Knarr FPSO in the North Sea in
the fourth quarter of 2014.
Voyageur Spirit FPSO
On August 27, 2013, repairs to the defective gas compressor on
the Voyageur Spirit FPSO were completed and the unit
achieved full production capacity. Since that time, the Partnership
has been receiving full rate either directly from the charterer or
through the indemnification from Teekay Corporation. The
Partnership expects to receive a certificate of final acceptance
from the charterer after completing certain operational tests,
which have been temporarily delayed by winter weather issues and an
unrelated issue which is the responsibility of the charterer. In
the meantime, the Partnership will continue to earn the full rate
under the charter contract as though the unit was producing at full
capacity.
Teekay Corporation has agreed to indemnify Teekay Offshore for
certain lost revenue and certain unrecovered vessel operating
expenses relating to the full operation of the Voyageur
Spirit FPSO. Any indemnification amounts from Teekay
Corporation to the Partnership are effectively treated as a
reduction in the purchase price paid to Teekay Corporation for the
Voyageur Spirit FPSO by Teekay Offshore. During the fourth
quarter of 2013, the Partnership's indemnification effectively
resulted in a $4.9 million reduction in the purchase price. Any
future compensation received by the Partnership from the charterer
related to the indemnification period will reduce the amount of
Teekay Corporation's indemnification to Teekay Offshore. Although
the Partnership's reported revenue is lower as a result of any
off-hire and reported vessel operating expenses are higher as a
result of certain unrecovered operating costs relating to the
Voyageur Spirit FPSO, there is no net impact on the
Partnership's cash flow as a result of Teekay Corporation's
indemnification. For the period up to December 31, 2013, Teekay
Corporation indemnified the Partnership for approximately $34.9
million relating to the Voyageur Spirit FPSO. The
Partnership has been, and will continue to be, indemnified by
Teekay Corporation for lost revenues and certain uncovered vessel
operating expenses up until receipt of the certificate of final
acceptance from the charterer, subject to a maximum amount of $54
million
Teekay Offshore's
Fleet
The following table summarizes Teekay Offshore's fleet as of
February 1, 2014.
|
Number of Vessels |
|
Owned Vessels |
Chartered-in Vessels |
Committed Newbuildings/ Conversions |
Conversion Candidates |
Total |
Shuttle Tanker Segment |
31(i) |
2 |
1(ii) |
1(iii) |
35 |
FPSO Segment |
5(iv) |
- |
- |
- |
5 |
Conventional Tanker Segment |
4 |
- |
- |
- |
4 |
FSO Segment |
5 |
- |
1(v) |
- |
6 |
Total |
45 |
2 |
2 |
1 |
50 |
- Includes six shuttle tankers in which Teekay Offshore's
ownership interest is 50 percent and two shuttle tankers in which
Teekay Offshore's ownership interest is 67 percent. One of the 67
percent owned shuttle tankers, the Randgrid, will commence
its conversion to an FSO unit for the Gina Krog FSO project after
its current shuttle tanker charter contract expires in 2015.
- Includes one HiLoad DP unit expected to commence operations
under a 10-year contract in the second quarter of 2014 once
operational testing has been completed.
- Includes one shuttle tanker which is currently in lay-up and is
a candidate for conversion to an offshore asset.
- Includes one FPSO unit in which Teekay Offshore's ownership
interest is 50 percent.
- Includes the Navion Clipper shuttle tanker, which is
currently being converted into an FSO unit and is expected to
commence operations under a 10-year charter contract in the third
quarter of 2014 with Salamander Energy plc.
Other Future Growth
Opportunities
Pursuant to an omnibus agreement that the Partnership entered
into in connection with our initial public offering in December
2006, Teekay Corporation is obligated to offer to the Partnership
its interest in certain shuttle tankers, FSO units and FPSO units
Teekay Corporation owns or may acquire in the future, provided the
vessels are servicing contracts with remaining durations of greater
than three years. The Partnership may also acquire other vessels
that Teekay Corporation may offer it from time to time and also
intends to pursue direct acquisitions from third parties and new
organic offshore projects.
Shuttle Tankers (including HiLoad DP)
In September 2013, the Partnership acquired a 2010-built HiLoad
Dynamic Positioning (DP) unit from Remora AS
(Remora), a Norway-based offshore marine technology
company, for a total purchase price of approximately $55 million,
including modification costs. The HiLoad DP unit arrived in Brazil
in November 2013 and is expected to commence operations under a
ten-year time-charter contract with Petroleo Brasileiro SA
(Petrobras) in Brazil in the second quarter of 2014 once
operational testing has been completed. Under the terms of an
agreement between Remora and Teekay Offshore, the Partnership has a
right of first refusal to acquire any future HiLoad DP projects
developed by Remora. In July 2013, Remora was awarded a contract by
BG Brasil to perform a front end engineering and design
(FEED) study to develop the next generation of HiLoad DP
units. The design, which is based on the main parameters of the
first generation design, will include new features, such as
increased engine power and the capability to maneuver vessels
larger than Suezmax conventional tankers.
FPSO Units
In May 2011, Teekay Corporation entered into a joint venture
agreement with Odebrecht Oil & Gas S.A. (a member of the
Odebrecht group) (Odebrecht) to jointly pursue FPSO
projects in Brazil. Odebrecht is a well-established Brazil-based
company that operates in the engineering and construction,
petrochemical, bioenergy, energy, oil and gas, real estate and
environmental engineering sectors, with over 120,000 employees and
a presence in over 20 countries. Through the joint venture
agreement, Odebrecht became a 50 percent partner in the Cidade
de Itajai FPSO project and Teekay Corporation is currently
working with Odebrecht on other FPSO project opportunities that, if
awarded, may result in offers to the Partnership to acquire Teekay
Corporation's interests in such projects, pursuant to the omnibus
agreement.
Pursuant to the omnibus agreement and subsequent agreements,
Teekay Corporation is obligated to offer to sell to the Partnership
the Petrojarl Foinaven FPSO unit, an existing unit owned
by Teekay Corporation and operating under a long-term contract in
the North Sea, subject to approvals required from the charterer.
The purchase price for the Petrojarl Foinaven
would be its fair market value.
In June 2011, Teekay Corporation entered into a contract with BG
Norge Limited to provide a harsh weather FPSO unit to operate in
the North Sea. The contract will be serviced by a newbuilding FPSO
unit, the Petrojarl Knarr (Knarr), which is being
constructed by Samsung Heavy Industries for a fully built-up cost
of approximately $1 billion. Pursuant to the omnibus agreement,
Teekay Corporation is obligated to offer to the Partnership its
interest in the Knarr FPSO project at Teekay Corporation's
fully built-up cost within a year after the commencement of the
charter, which commencement is expected to occur in the fourth
quarter of 2014.
In November 2011, Teekay Corporation acquired the
Hummingbird Spirit FPSO unit from Sevan Marine ASA, a
Norway-based developer of cylindrical-shaped FPSO units. In
September 2013, Teekay Corporation entered into an agreement with
Centrica Energy, the charterer of the Hummingbird Spirit
FPSO, to extend the firm period of the contract for this FPSO unit
until December 31, 2014, with charterer's options to extend out to
March 31, 2016. In addition, Centrica Energy has an option,
exercisable by February 28, 2014, to extend the firm period of the
contract by a further 12 months. Pursuant to the omnibus agreement,
Teekay Corporation is only obligated to offer the Partnership the
Hummingbird Spirit FPSO unit following the commencement of
a charter contract with a firm period of greater than three years
in duration.
Teekay Corporation owns two additional FPSO units, the
Petrojarl Banff FPSO and the Petrojarl 1 FPSO,
which may also be offered to the Partnership in the future pursuant
to the omnibus agreement.
FSO Units
In May 2013, the Partnership entered into an agreement with
Statoil Petroleum AS (Statoil), on behalf of the field
license partners, to provide an FSO unit for the Gina Krog oil and
gas field located in the North Sea. The contract will be serviced
by a new FSO unit that will be converted from the 1995-built
shuttle tanker, Randgrid, which the Partnership currently
owns through a 67 percent-owned subsidiary. The FSO conversion
project is expected to be completed for a net capital cost of
approximately $220 million, including the cost of acquiring the
remaining 33 percent ownership interest in the Randgrid
shuttle tanker. Following scheduled completion in early-2017, the
newly converted FSO unit will commence operations under a
three-year time-charter contract to Statoil, which also includes 12
additional one-year extension options.
In May 2013, the Partnership entered into a ten-year charter
contract, plus extension options, with Salamander Energy plc
(Salamander) to supply an FSO unit in Asia. The
Partnership is converting its 1993-built shuttle tanker, the
Navion Clipper, into an FSO unit for an estimated fully
built-up cost of approximately $50 million. The unit is expected to
commence its contract with Salamander in the third quarter of
2014.
Financial
Summary
The Partnership reported adjusted net income attributable to the
partners(1) of $33.7 million for the quarter ended December 31,
2013, compared to $29.1 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 $7.6 million and $39.6 million for the quarters ended
December 31, 2013 and December 31, 2012, respectively, as detailed
in Appendix A to this release. Including these items, the
Partnership reported, on a GAAP basis, net income attributable to
the partners of $41.3 million for the fourth quarter of 2013,
compared to $68.7 million in the same period of the prior year. Net
revenues(2) increased to $231.5 million for the fourth quarter of
2013, compared to $206.4 million in the same period of the prior
year.
Adjusted net income attributable to the partners for the three
months ended December 31, 2013 increased from the same period in
the prior year, mainly due to the commencement of the time-charters
for the first three BG Shuttle Tanker newbuildings in June, August
and November 2013 and the acquisition of the Voyageur
Spirit FPSO and a 50 percent interest in the Cidade de
Itajai FPSO in the second quarter of 2013. This increase was
partially offset by the sale and lay-up of older shuttle and
conventional tankers during 2012 and 2013 as their related charter
contracts expired or terminated.
The Partnership reported adjusted net income attributable to the
partners(1) of $72.8 million for the year ended December 31, 2013,
compared to $100.1 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 $20.5 million and $22.8 million for the years ended December 31,
2013 and December 31, 2012, respectively, as detailed in
Appendix A to this release. Including these items, the
Partnership reported, on a GAAP basis, net income attributable to
the partners of $93.2 million for the year ended December 31, 2013,
compared to $123.0 million in the same period of the prior year.
Net revenues(2) for the year ended December 31, 2013 increased to
$827.1 million, compared to $790.7 million in the same period of
the prior year.
Adjusted net income attributable to the partners for the year
ended December 31, 2013 declined from the same period in the prior
year, mainly due to the sale and lay-up of older shuttle and
conventional tankers during 2012 and 2013 as their related charter
contracts expired or terminated, and lower shuttle tanker project
revenues due to fewer opportunities for short-term trading of
excess shuttle tanker fleet capacity. In addition, there was a
higher level of maintenance activity in the FPSO fleet during 2013,
compared to the prior year. This decrease was partially offset by
the acquisition of the two FPSO units in the second quarter of 2013
and the commencement of the time-charters for the first three BG
Shuttle Tanker newbuildings in the second half of 2013.
As a result of the delay in receiving the certificate of final
acceptance from the charterer for the Voyageur Spirit
FPSO, the Partnership has not recorded all the revenues associated
with its operations since its acquisition on May 2, 2013 through
December 31, 2013 and incurred certain operating expenses
associated with ensuring the FPSO operates at full capacity;
however, $4.9 million and $34.9 million in indemnification payments
have been made by Teekay Corporation for the three and twelve
months ended December 31, 2013, respectively, which are recorded in
equity as an adjustment to the purchase price of the FPSO unit. As
a result of the indemnification from Teekay Corporation, there is
no net impact on the Partnership's cash flows relating to the
Voyageur Spirit FPSO.
For accounting purposes, the Partnership is required to
recognize, through the consolidated statements of income (loss),
changes in the fair value of derivative instruments as unrealized
gains or losses. This revaluation does not affect the economics of
any hedging transactions nor does it have any impact on the
Partnership's actual cash flows or the calculation of its
distributable cash flow.
(1) Adjusted net income attributable to the partners is a
non-GAAP financial measure. Please refer to Appendix A
included in this release for a reconciliation of this non-GAAP
measure to the most directly comparable financial measure under
GAAP and information about specific items affecting net income that
are typically excluded by securities analysts in their published
estimates of the Partnership's financial results.
(2) Net revenues is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping
companies. Please refer to Appendix C included in this
release for a reconciliation of this non-GAAP measure to the most
directly comparable financial measure under GAAP.
Operating
Results
The following table highlights certain financial information for
Teekay Offshore's four segments: the Shuttle Tanker segment, the
FPSO segment, the Conventional Tanker segment and the FSO segment
(please refer to the "Teekay Offshore's Fleet" section of this
release above and Appendix C through F for further
details).
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, 2013 |
|
(unaudited) |
(in thousands of U.S. dollars) |
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
Total |
Net revenues(1) |
121,027 |
88,079 |
7,734 |
14,641 |
231,481 |
Vessel operating expenses |
41,287 |
40,268 |
1,129 |
8,566 |
91,250 |
Time-charter hire expense |
13,670 |
- |
- |
- |
13,670 |
Depreciation and amortization |
30,423 |
18,074 |
1,697 |
2,117 |
52,311 |
CFVO from consolidated vessels(2) |
60,864 |
39,750 |
6,205 |
6,020 |
112,839 |
CFVO from equity accounted vessel(3) |
- |
6,644 |
- |
- |
6,644 |
Total CFVO(2) |
60,864 |
46,394 |
6,205 |
6,020 |
119,483 |
|
|
|
|
|
|
|
|
|
Three Months Ended |
December 31, 2012 |
(unaudited) |
(in thousands of U.S. dollars) |
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
Total |
Net revenues(1) |
118,322 |
59,709 |
7,504 |
20,861 |
206,396 |
Vessel operating expenses |
39,899 |
29,994 |
1,603 |
15,517 |
87,013 |
Time-charter hire expense |
15,493 |
- |
- |
- |
15,493 |
Depreciation and amortization |
29,394 |
12,726 |
1,578 |
2,529 |
46,227 |
CFVO from consolidated vessels(2) |
58,509 |
24,548 |
9,232 |
5,603 |
97,892 |
CFVO from equity accounted vessel(3) |
- |
- |
- |
- |
- |
Total CFVO(2) |
58,509 |
24,548 |
9,232 |
5,603 |
97,892 |
- Net revenues is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping
companies. Please refer to Appendix C, included in this
release for a reconciliation of this non-GAAP measure to the most
directly comparable GAAP financial measure.
- Cash flow from vessel operations (CFVO) from
consolidated vessels represents income from vessel operations
before depreciation and amortization expense, write-down and loss
on sale of vessels and amortization of deferred gains, includes the
realized gains (losses) on the settlement of foreign exchange
forward contracts, and cash flow from vessel operations relating to
its discontinued operations and adjusting for direct financing
leases to a cash basis. CFVO is a non-GAAP financial measure used
by certain investors to measure the financial performance of
shipping companies. Please refer to Appendix E included in
this release for a description and reconciliation of this non-GAAP
measure to the most directly comparable GAAP financial
measure.
- CFVO from equity accounted vessels represents the Partnership's
50 percent share of CFVO from the Cidade de
Itajai FPSO unit. Please see Appendix F for a
description and reconciliation of CFVO from equity accounted
vessels (a non-GAAP measure) as used in this release to the most
directly comparable GAAP financial measure.
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership's Shuttle
Tanker segment increased to $60.9 million in the fourth quarter of
2013 compared to $58.5 million for the same period of the prior
year, primarily due to increased revenues as a result of the
commencement of the time-charters for the first three BG Shuttle
Tanker newbuildings in June, August and November 2013 and from
higher shuttle tanker project revenues, which were partially offset
by the redelivery of the Navion Marita upon completion of
its time-charter contract in the third quarter of 2013 and the
lay-up of the Navion Clipper upon expiration of its
time-charter contract during the fourth quarter of 2012.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO
segment, including an equity-accounted FPSO unit, increased to
$46.4 million for the fourth quarter of 2013 compared to $24.5
million for the same period of the prior year, primarily due to
cash flows from the acquisition of the Voyageur Spirit and
the Cidade de Itajai FPSO units in the second quarter of
2013. Cash flow from vessel operations for the fourth quarter of
2013 excludes the $4.9 million Voyageur Spirit FPSO
indemnification payment from Teekay Corporation.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's
Conventional Tanker segment decreased to $6.2 million in the fourth
quarter of 2013 compared to $9.2 million for the same period of the
prior year primarily due to the sale of five conventional tankers
since the fourth quarter of 2012.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO
segment increased slightly in the fourth quarter of 2013 to $6.0
million from $5.6 million generated in the same period of the prior
year, primarily due to costs associated with front-end engineering
and design studies completed in 2012 in relation to certain FSO
project tenders.
Liquidity
In May 2013, the Partnership implemented a continuous offering
program (COP) under which the Partnership may issue new
common units, representing limited partner interests, at market
prices up to a maximum aggregate amount of $100 million. Through
December 31, 2013, the Partnership sold an aggregate of 85,508
common units under the COP, generating proceeds of approximately
$2.4 million (including the Partnership's general partner's 2
percent proportionate capital contribution and net of offering
costs). The Partnership did not sell any units under the COP during
the fourth quarter of 2013.
In December 2013, the Partnership sold 1.75 million common units
in an equity private placement for net proceeds of $54.4 million
(including the general partner's contribution). The net proceeds
from the private placement are intended for general partnership
purposes.
In January 2014, the Partnership issued NOK 1,000 million in new
senior unsecured bonds in the Norwegian bond market that mature in
January 2019. The aggregate principal amount of the bonds was
equivalent to approximately USD 162 million and all interest and
principal payments have been swapped into U.S. dollars at a fixed
rate of 6.28%. The net proceeds from the bond offering are intended
for general partnership purposes. The Partnership is applying to
list the new bonds on the Oslo Stock Exchange.
As of December 31, 2013, the Partnership had total liquidity of
$331.0 million, which consisted of $219.1 million in cash and cash
equivalents and $111.9 million in undrawn revolving credit
facilities. Giving effect to the approximately $162 million
Norwegian bond issuance completed in January 2014, the
Partnership's liquidity at December 31, 2013 would have been
approximately $493 million.
Conference
Call
The Partnership also plans to host a conference call on Friday,
February 21, 2014 at noon (ET) to discuss the results for the
fourth quarter and fiscal year of 2013. All unitholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing 1-866-322-8032 or
416-640-3406, if
outside North America, and quoting conference ID code 7689569.
- By accessing the webcast, which will be available on Teekay
Offshore's website at www.teekayoffshore.com (the archive will
remain on the website for a period of 30 days).
A supporting Fourth Quarter and Fiscal Year 2013 Earnings
Presentation will also be available at www.teekayoffshore.com in
advance of the conference call start time.
The conference call will be recorded and available until Friday,
February 28, 2014. This recording can be accessed following the
live call by dialing 1-888-203-1112 or
647-436-0148, if
outside North America, and entering access code 7689569.
About Teekay Offshore
Partners L.P.
Teekay Offshore Partners L.P. is an international provider of
marine transportation, oil production and storage services to the
offshore oil industry focusing on the fast-growing, deepwater
offshore oil regions of the North Sea and Brazil. Teekay Offshore
is structured as a publicly-traded master limited partnership
(MLP) and currently owns interests in 34 shuttle tankers
(including two chartered-in vessels), five floating production,
storage and offloading (FPSO) units, six floating storage
and offtake (FSO) units (including one committed FSO
conversion unit), four conventional oil tankers and one HiLoad
Dynamic Positioning (DP) unit. The majority of Teekay
Offshore's fleet is employed on long-term, stable contracts. In
addition, Teekay Offshore has rights to participate in certain
other FPSO, shuttle tanker and HiLoad DP opportunities provided by
Teekay Corporation (NYSE:TK), Sevan Marine ASA (Oslo Bors:SEVAN)
and Remora AS.
Teekay Offshore's common units trade on the New York Stock
Exchange under the symbol "TOO".
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, 2013 |
|
September 30, 2013 |
|
December 31, 2012 |
|
December 31, 2013(1) |
|
December 31, 2012 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
REVENUES |
260,654 |
|
235,561 |
|
232,012 |
|
930,739 |
|
901,227 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
29,173 |
|
28,249 |
|
25,616 |
|
103,643 |
|
110,483 |
|
Vessel operating expenses (2) |
91,250 |
|
89,035 |
|
87,013 |
|
344,128 |
|
317,576 |
|
Time-charter hire expense |
13,670 |
|
14,142 |
|
15,493 |
|
56,682 |
|
56,989 |
|
Depreciation and amortization |
52,311 |
|
51,920 |
|
46,227 |
|
199,006 |
|
189,364 |
|
General and administrative (2) |
11,066 |
|
12,600 |
|
7,739 |
|
44,473 |
|
34,581 |
|
Write-down and loss on sale of vessels (3) |
19,280 |
|
57,502 |
|
14,307 |
|
76,782 |
|
24,542 |
|
Restructuring charge (4) |
104 |
|
449 |
|
1,115 |
|
2,607 |
|
1,115 |
|
Total operating expenses |
216,854 |
|
253,897 |
|
197,510 |
|
827,321 |
|
734,650 |
|
Income (loss) from vessel operations |
43,800 |
|
(18,336 |
) |
34,502 |
|
103,418 |
|
166,577 |
|
OTHER ITEMS |
|
|
|
|
|
|
|
|
|
|
Interest expense |
(18,403 |
) |
(16,789 |
) |
(10,835 |
) |
(62,855 |
) |
(47,508 |
) |
Interest income |
434 |
|
467 |
|
493 |
|
2,561 |
|
1,027 |
|
Realized and unrealized gains (losses) on derivative instruments
(5) |
9,948 |
|
(7,952 |
) |
31,187 |
|
34,820 |
|
(26,349 |
) |
Equity income |
3,934 |
|
1,199 |
|
- |
|
6,731 |
|
- |
|
Foreign exchange (losses) gains (6) |
(2,465 |
) |
(2,730 |
) |
2,275 |
|
(5,278 |
) |
(315 |
) |
Loss on bond repurchase (7) |
- |
|
- |
|
- |
|
(1,759 |
) |
- |
|
Other income - net |
260 |
|
310 |
|
314 |
|
1,144 |
|
1,538 |
|
Total other items |
(6,292 |
) |
(25,495 |
) |
23,434 |
|
(24,636 |
) |
(71,607 |
) |
Income (loss) from continuing operations before income tax
(expense) recovery |
37,508 |
|
(43,831 |
) |
57,936 |
|
78,782 |
|
94,970 |
|
Income tax (expense) recovery |
(1,896 |
) |
(107 |
) |
11,041 |
|
(2,225 |
) |
10,477 |
|
Net income (loss) from continuing operations |
35,612 |
|
(43,938 |
) |
68,977 |
|
76,557 |
|
105,447 |
|
Net (loss) income from discontinued operations (8) |
- |
|
(333 |
) |
(3,275 |
) |
(4,642 |
) |
17,568 |
|
Net income (loss) |
35,612 |
|
(44,271 |
) |
65,702 |
|
71,915 |
|
123,015 |
|
Non-controlling interests in net income (loss) |
(5,657 |
) |
(18,483 |
) |
(2,982 |
) |
(19,089 |
) |
58 |
|
Dropdown Predecessor's interest in net income (loss) (1) |
- |
|
- |
|
- |
|
(2,225 |
) |
- |
|
Preferred unitholders' interest in net income (loss) |
2,719 |
|
2,718 |
|
- |
|
7,250 |
|
- |
|
General Partner's interest in net income (loss) |
4,621 |
|
2,148 |
|
3,645 |
|
13,674 |
|
11,055 |
|
Limited Partners' interest in net income (loss) |
33,929 |
|
(30,654 |
) |
65,039 |
|
72,305 |
|
111,902 |
|
Weighted-average number of common units - basic |
83,949,362 |
|
83,700,905 |
|
80,105,408 |
|
82,634,000 |
|
73,750,951 |
|
Weighted-average number of common units - diluted |
83,981,522 |
|
83,700,905 |
|
80,105,408 |
|
82,659,179 |
|
73,750,951 |
|
Total number of common units outstanding at end of period |
85,452,079 |
|
83,702,079 |
|
80,105,408 |
|
85,452,079 |
|
80,105,408 |
|
- Results for the Voyageur Spirit FPSO unit for the
period beginning in April 13, 2013 prior to its acquisition by the
Partnership on May 2, 2013 when it was owned and operated by Teekay
Corporation, are included in the Dropdown
Predecessor.
- In order to more closely align the Partnership's presentation
to that of many of its peers, the cost of ship management services
of $8.4 million and $34.9 million for the three months and year
ended December 31, 2013, respectively, and $8.8 million for the
three months ended September 30, 2013 have been presented in vessel
operating expenses. Prior to 2013, the Partnership included these
amounts in general and administrative expenses. All such costs
incurred in comparative periods have been reclassified from general
and administrative expenses to vessel operating expenses to conform
to the presentation adopted in the current period. The amounts
reclassified were $9.8 million and $38.7 million for the three
months and year ended December 31, 2012, respectively.
- Write-down and loss on sale of vessels for the year ended
December 31, 2013 includes the impairment of six of the
Partnership's 1990s-built shuttle tankers to their estimated fair
value. The fourth quarter of 2013 includes the impairments of two
shuttle tankers which the Partnership owns through a 67
percent-owned subsidiary. The write-downs were the result of a
cancellation of a contract renewal and expected sale of an aging
vessel. The third quarter of 2013 includes the impairment of four
shuttle tankers, including the impairment of $37.2 million for two
shuttle tankers which the Partnership owns through a 50
percent-owned subsidiary. The write-downs were the result of the
re-contracting one of the vessels at lower rates than expected
during the third quarter of 2013, the cancellation of a short-term
contract in September 2013 and a change in expectations for the
contract renewal of two shuttle tankers, one operating in Brazil,
and the other one in the North Sea. The fourth quarter of 2012
includes a write-down related to a 1992-built shuttle tanker, which
was written down to its estimated fair value and classified as
held-for-sale at December 31, 2012, a loss on sale related to a
1992-built shuttle tanker, and a write-down related to a 1995-built
shuttle tanker. The write-down was caused by the combination of the
age of the vessel, the requirements of trading in the North Sea and
Brazil and the weak tanker market. The year ended December 31, 2012
also includes a write-down and sale related to a 1992-built shuttle
tanker, and a write-down related to a 1993-built shuttle tanker due
to a change in the operating plan for the vessel.
- Restructuring charges for the three months ended December 31,
2013, the three months ended September 30, 2013, and the year ended
December 31, 2013 relate to the reflagging of one shuttle tanker.
In addition, restructuring charges for the year ended December 31,
2013 and for the three months and year ended December 31, 2012
relate to the reorganization of the Partnership's marine operations
to create better alignment with its shuttle tanker and conventional
tanker business units.
- Realized (losses) gains on derivative instruments relate to
amounts the Partnership actually paid or received to settle
derivative instruments, and the unrealized gains (losses) on
derivative instruments relate to the change in fair value of such
derivative instruments, as detailed in the table below:
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2013 |
|
September 30, 2013 |
|
December 31, 2012 |
|
December 31, 2013 |
|
December 31, 2012 |
|
Realized (losses) gains relating to: |
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap termination |
- |
|
(31,798 |
) |
- |
|
(31,798 |
) |
- |
|
|
Termination of interest rate swap in Dropdown Predecessor |
- |
|
- |
|
- |
|
(4,099 |
) |
- |
|
|
Interest rate swaps |
(15,018 |
) |
(14,354 |
) |
(14,728 |
) |
(58,951 |
) |
(58,596 |
) |
|
Foreign currency forward contract |
(253 |
) |
722 |
|
1,104 |
|
(824 |
) |
2,969 |
|
|
(15,271 |
) |
(45,430 |
) |
(13,624 |
) |
(95,672 |
) |
(55,627 |
) |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) relating to: |
|
|
|
|
|
|
|
|
|
|
|
Interest rate swap termination |
- |
|
31,798 |
|
- |
|
31,798 |
|
- |
|
|
Termination of interest rate swap in Dropdown Predecessor |
- |
|
- |
|
- |
|
3,984 |
|
- |
|
|
Interest rate swaps |
25,073 |
|
4,715 |
|
44,616 |
|
97,706 |
|
26,100 |
|
|
Foreign currency forward contracts |
146 |
|
965 |
|
195 |
|
(2,996 |
) |
3,178 |
|
|
25,219 |
|
37,478 |
|
44,811 |
|
130,492 |
|
29,278 |
|
Total realized and unrealized gains (losses) on
derivative instruments |
9,948 |
|
(7,952 |
) |
31,187 |
|
34,820 |
|
(26,349 |
) |
- Foreign exchange (losses) gains include realized gains relating
to the amounts the Partnership received to settle the Partnership's
non-designated cross currency swaps that were entered into as an
economic hedge relating to the Partnership's Norwegian Kroner
(NOK)-denominated unsecured bonds as detailed in the table
below. The Partnership issued NOK 600 million unsecured bonds in
2010 maturing in 2013, of which it repurchased NOK 388.5 million in
the first quarter of 2013 and recognized a realized gain of $6.8
million on the partial early termination of a cross currency swap
and a realized foreign exchange loss of $6.6 million on the
repurchase of the bonds. The Partnership also issued NOK 600
million unsecured bonds in 2012 maturing in 2017 and NOK 1,300
million of unsecured bonds in 2013 maturing in 2016 and 2018.
Foreign exchange (losses) gains also include unrealized (losses)
gains relating to the change in fair value of such derivative
instruments, partially offset by unrealized gains (losses) on the
revaluation of the NOK bonds are also detailed in the table
below:
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2013 |
|
September 30, 2013 |
|
December 31, 2012 |
|
December 31, 2013 |
|
December 31, 2012 |
|
Realized gains on cross-currency swaps |
210 |
|
331 |
|
668 |
|
1,563 |
|
2,992 |
|
Unrealized (losses) gains on cross-currency swaps |
(4,534 |
) |
747 |
|
6,835 |
|
(38,596 |
) |
10,700 |
|
Unrealized gains (losses) on revaluation of NOK bonds |
2,983 |
|
(3,235 |
) |
(6,038 |
) |
38,009 |
|
(13,871 |
) |
Realized gain on partial termination of cross-currency swap |
- |
|
- |
|
- |
|
6,800 |
|
- |
|
Realized foreign exchange loss on partial repurchase of NOK
bonds |
- |
|
- |
|
- |
|
(6,573 |
) |
- |
|
- Loss on bond repurchase for the year ended December 31, 2013
relates to the repurchase in the first quarter of 2013 of NOK 388.5
million of the Partnership's NOK 600 million bond issue at a
premium.
- Results for six conventional tankers (Hamane Spirit, Torben
Spirit, Luzon Spirit, Leyte Sprit, Poul Spirit and
Gotland Spirit), which the Partnership sold during 2012
and 2013, have been included in Net (loss) income from discontinued
operations for the three months ended September 30, 2013 and
December 31, 2012 and years ended December 31, 2013 and December
31, 2012.
TEEKAY
OFFSHORE PARTNERS L.P. |
CONSOLIDATED BALANCE SHEETS |
(in
thousands of U.S. dollars) |
|
As at |
As at |
As at |
|
|
December 31, 2013 |
September 30, 2013 |
December 31, 2012 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
|
|
Current |
|
|
|
|
Cash
and cash equivalents |
219,126 |
258,900 |
206,339 |
|
Accounts receivable |
176,265 |
158,234 |
91,879 |
|
Vessel held for sale |
- |
- |
13,250 |
|
Net
investments in direct financing leases - current |
5,104 |
5,369 |
5,647 |
|
Prepaid expenses |
31,675 |
41,746 |
29,392 |
|
Due
from affiliates |
15,202 |
12,772 |
29,682 |
|
Current portion of derivative instruments |
500 |
987 |
12,398 |
|
Other current assets |
3,051 |
- |
- |
|
Total current assets |
450,923 |
478,008 |
388,587 |
|
Vessels and equipment |
|
|
|
|
At
cost, less accumulated depreciation |
3,089,582 |
3,007,747 |
2,327,337 |
|
Advances on newbuilding contracts |
- |
47,562 |
127,286 |
|
Net
investments in direct financing leases |
22,463 |
23,575 |
27,568 |
|
Investment in and advances to joint venture |
52,120 |
64,195 |
- |
|
Derivative instruments |
10,323 |
7,806 |
2,913 |
|
Deferred income tax |
7,854 |
10,922 |
8,948 |
|
Other
assets |
35,272 |
37,382 |
28,112 |
|
Intangible assets - net |
10,436 |
11,694 |
15,527 |
|
Goodwill - shuttle tanker segment |
127,113 |
127,113 |
127,113 |
|
Total assets |
3,806,086 |
3,816,004 |
3,053,391 |
|
LIABILITIES AND EQUITY |
|
|
|
|
Current |
|
|
|
|
Accounts payable |
15,753 |
19,735 |
15,220 |
|
Accrued liabilities |
138,156 |
152,018 |
61,708 |
|
Deferred revenues |
29,075 |
20,231 |
22,641 |
|
Due
to affiliates |
121,864 |
122,605 |
47,810 |
|
Current portion of derivative instruments |
47,944 |
56,450 |
47,748 |
|
Current portion of long-term debt |
806,009 |
437,355 |
248,385 |
|
Current portion of in-process revenue contracts |
12,744 |
12,744 |
12,744 |
|
Total current liabilities |
1,171,545 |
821,138 |
456,256 |
|
Long-term debt |
1,562,967 |
1,950,193 |
1,521,247 |
|
Derivative instruments |
121,135 |
131,283 |
213,731 |
|
In-process revenue contracts |
88,550 |
91,762 |
101,294 |
|
Other long-term liabilities |
23,984 |
28,163 |
26,819 |
|
Total liabilities |
2,968,181 |
3,022,539 |
2,319,347 |
|
Redeemable non-controlling interest |
16,564 |
24,413 |
28,815 |
|
Equity |
|
|
|
|
Limited partners - common units (85.5 and 80.1 million units issued
and outstanding at December 31, 2013 and December 31, 2012,
respectively) |
621,002 |
572,662 |
640,990 |
|
Limited partners - preferred units (6.0 and nil million units
issued and outstanding at December 31, 2013 and December 31, 2012,
respectively) |
144,800 |
144,870 |
- |
|
General Partner |
21,242 |
19,105 |
20,162 |
|
Accumulated other comprehensive loss |
- |
- |
(58 |
) |
Partners' equity |
787,044 |
736,637 |
661,094 |
|
Non-controlling interests |
34,297 |
32,415 |
44,135 |
|
Total equity |
821,341 |
769,052 |
705,229 |
|
Total liabilities and total equity |
3,806,086 |
3,816,004 |
3,053,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEEKAY
OFFSHORE PARTNERS L.P. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in
thousands of U.S. dollars) |
|
Year Ended |
|
|
December 31, 2013(1) |
|
December 31, 2012 |
|
|
(unaudited) |
|
(unaudited) |
|
Cash and cash equivalents provided by (used for) |
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net income |
71,915 |
|
123,015 |
|
Non-cash items: |
|
|
|
|
|
Unrealized gain on derivative instruments |
(91,837 |
) |
(39,538 |
) |
|
Equity income |
(6,731 |
) |
- |
|
|
Depreciation and amortization |
200,242 |
|
194,631 |
|
|
Write-down and loss on sale of vessels |
95,247 |
|
32,217 |
|
|
Deferred income tax expense (recovery) |
2,150 |
|
(8,808 |
) |
|
Amortization of in-process revenue contracts |
(12,744 |
) |
(12,714 |
) |
|
Foreign currency exchange (gain) loss and other |
(35,522 |
) |
15,260 |
|
Change in non-cash working capital items related to
operating activities |
51,999 |
|
(17,447 |
) |
Expenditures for dry docking |
(19,332 |
) |
(19,122 |
) |
Net operating cash flow |
255,387 |
|
267,494 |
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds from long-term debt |
1,140,237 |
|
318,645 |
|
Scheduled repayments of long-term debt |
(266,874 |
) |
(146,162 |
) |
Prepayments of long-term debt |
(466,781 |
) |
(445,698 |
) |
Debt issuance costs |
(14,797 |
) |
(4,361 |
) |
Purchase of Voyageur Spirit FPSO from Teekay
Corporation |
(234,125 |
) |
- |
|
Purchase of VOC equipment from Teekay Corporation |
- |
|
(12,848 |
) |
Proceeds from issuance of common units |
119,588 |
|
265,393 |
|
Proceeds from issuance of preferred units |
150,000 |
|
- |
|
Expenses relating to equity offerings |
(5,837 |
) |
(8,164 |
) |
Cash distributions paid by the Partnership |
(192,142 |
) |
(160,905 |
) |
Cash distributions paid by subsidiaries to
non-controlling interests |
(7,750 |
) |
(8,787 |
) |
Other |
10,346 |
|
(3,120 |
) |
Net financing cash flow |
231,865 |
|
(206,007 |
) |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Expenditures for vessels and equipment |
(455,578 |
) |
(87,408 |
) |
Purchase of equity investment in Itajai FPSO
joint venture (net of cash acquired of $1.3 million) |
(52,520 |
) |
- |
|
Proceeds from sale of vessels and equipment |
27,986 |
|
35,235 |
|
Direct financing lease payments received |
5,647 |
|
17,091 |
|
Net investing cash flow |
(474,465 |
) |
(35,082 |
) |
|
|
|
|
|
Increase in cash and cash equivalents |
12,787 |
|
26,405 |
|
Cash and cash equivalents, beginning of the year |
206,339 |
|
179,934 |
|
Cash and cash equivalents, end of the year |
219,126 |
|
206,339 |
|
- In accordance with GAAP, the Consolidated Statement of Cash
Flows for the year ended December 31, 2013 includes the cash flows
relating to the Voyageur Spirit FPSO unit Dropdown
Predecessor for the period from April 13, 2013 to May 2, 2013, when
the vessel was under the common control of Teekay Corporation, but
prior to its acquisition by the Partnership.
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 attributable to the
partners as determined in accordance with GAAP. The Partnership
believes that, in addition to conventional measures prepared in
accordance with GAAP, certain investors use this information to
evaluate the Partnership's financial performance. The items below
are also typically excluded by securities analysts in their
published estimates of the Partnership's financial results.
Adjusted net income attributable to the partners is intended to
provide additional information and should not be considered a
substitute for measures of performance prepared in accordance with
GAAP.
|
Three Months Ended |
|
Year Ended |
|
|
December 31, 2013 |
|
December 31, 2012 |
|
December 31, 2013 |
|
December 31, 2012 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Net income - GAAP basis |
35,612 |
|
65,702 |
|
71,915 |
|
123,015 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net
loss (income) attributable to non-controlling interests |
5,657 |
|
2,982 |
|
19,089 |
|
(58 |
) |
|
Net loss attributable to Dropdown Predecessor |
- |
|
- |
|
2,225 |
|
- |
|
Net income attributable to the partners |
41,269 |
|
68,684 |
|
93,229 |
|
122,957 |
|
Add (subtract) specific items affecting net
income: |
|
|
|
|
|
|
|
|
|
Foreign exchange losses (gains)(1) |
2,675 |
|
(1,608 |
) |
6,572 |
|
3,305 |
|
|
Unrealized gains on derivative instruments (2) |
(26,397 |
) |
(44,811 |
) |
(128,809 |
) |
(29,278 |
) |
|
Write-down and loss on sale of vessels (3) |
19,280 |
|
14,307 |
|
76,782 |
|
24,542 |
|
|
Components of discontinued operations (4) |
- |
|
5,443 |
|
7,184 |
|
(6,995 |
) |
|
Realized losses on foreign currency forward contracts (5) |
- |
|
- |
|
783 |
|
- |
|
|
Deferred income tax expense (recovery) relating to Norwegian tax
structure (6) |
2,297 |
|
(8,748 |
) |
2,297 |
|
(8,748 |
) |
|
VOC
revenues relating to prior periods (7) |
- |
|
(2,280 |
) |
- |
|
(2,280 |
) |
|
Restructuring charge and other (8) |
633 |
|
1,377 |
|
4,513 |
|
(540 |
) |
|
Loss
on bond repurchase (9) |
- |
|
- |
|
1,759 |
|
- |
|
|
Realized loss on early swap termination (10) |
- |
|
- |
|
31,798 |
|
- |
|
|
Non-controlling interests' share of items above (11) |
(6,074 |
) |
(3,277 |
) |
(23,349 |
) |
(2,841 |
) |
Total adjustments |
(7,586 |
) |
(39,597 |
) |
(20,470 |
) |
(22,835 |
) |
|
|
|
|
|
|
|
|
|
Adjusted net income attributable to the partners |
33,683 |
|
29,087 |
|
72,759 |
|
100,122 |
|
- Foreign exchange losses (gains) primarily relate to the
Partnership's revaluation of all foreign currency-denominated
monetary assets and liabilities based on the prevailing exchange
rate at the end of each reporting period and unrealized gains or
losses related to the Partnership's cross currency swaps and
repurchase of Norwegian Kroner bonds and exclude the realized gains
and losses relating to the cross currency swaps for outstanding
Norwegian bonds of the Partnership
- Reflects the unrealized gains due to changes in the
mark-to-market value of interest rate swaps and foreign exchange
forward contracts that are not designated as hedges for accounting
purposes, including the unrealized mark-to-market value of the
interest rate swap within the Cidade de Itajai FPSO equity
accounted joint venture and excluding amounts relating to the
Dropdown Predecessor.
- Please refer to footnote (3) of the consolidated statements of
income (loss).
- Related to components of net (loss) income from discontinued
operations. The results for the year ended December 31, 2013
include a gain on sale of the Gotland Spirit and the
termination fees received from Teekay Corporation upon cancellation
of the Poul Spirit and the Gotland Spirit
time-charter contracts, partially offset by the write-downs of the
Poul Spirit and the Gotland Spirit to their
estimated fair value in conjunction with the termination of their
charter contracts and the loss on sale of the Poul Spirit.
The results for the three months and year ended December 31, 2012
include the loss on sale of the Luzon Spirit and the
Torben Spirit, and the write-down of the Leyte
Spirit. In addition, the results for the year ended December
31, 2012 include the termination fee received from Teekay
Corporation upon the cancellation of the Hamane Spirit
time-charter contract, partially offset by the loss on sale of the
Hamane Spirit.
- Reflects the realized losses on foreign currency forward
contracts entered into for the purchase of the HiLoad DP unit from
Remora AS that are not designated as a hedge for accounting
purposes.
- Deferred income tax expense (recovery) for the three and twelve
months ended December 31, 2013 relates to the write down of
deferred income tax asset for one of the Partnership's Norwegian
tax structures. The amount for the three and twelve months ended
December 31, 2012 relate to the Norwegian tax structure established
in the fourth quarter of 2012.
- A portion of net revenues for the three and twelve months ended
December 31, 2012 relate to the Partnership entering into a lease
agreement in the fourth quarter of 2012, which allows for the
retroactive payment for any Volatile Organic Compound
(VOC) revenues relating to the period prior to 2012.
- Other items for the three and twelve months ended December 31,
2013 include restructuring charges relating to the reflagging of
one shuttle tanker. Other items for the three and twelve months
ended December 31, 2013 also include a current income tax recovery
for past Norwegian taxes paid and a one-time pension cost
adjustment related to the increased value of future benefits for
seafarers employed on an FSO unit. Other items for the twelve
months ended December 31, 2013 also include a one-time success fee
paid to Teekay Corporation relating to the purchase of the HiLoad
Unit. For the twelve months ended December 31, 2013 and the three
and twelve months ended December 31, 2012, other items include
restructuring charges relating to the reorganization of the
Partnership's marine operations to create better alignment with its
shuttle tanker and conventional tanker business units. In addition,
other items for the twelve months ended December 31, 2013 and the
three and twelve months ended December 31, 2012 include foreign
exchange losses resulting from hedging ineffectiveness and certain
unrealized expenses relating to the revaluation of a fair value
adjustment of contingent consideration liability associated with
the purchase of the Scott Spirit shuttle tanker.
- Relates to the repurchase of NOK 388.5 million of the
Partnership's NOK 600 million bond issue at a premium in January
2013.
- Reflects the realized loss on the early termination of an
interest rate swap in the third quarter of 2013.
- Items affecting net income include items from the Partnership's
consolidated non-wholly-owned subsidiaries. The specific items
affecting net income are analyzed to determine whether any of the
amounts originated from a consolidated non-wholly-owned subsidiary.
Each amount that originates from a consolidated non-wholly-owned
subsidiary is multiplied by the non-controlling interests'
percentage share in this subsidiary to arrive at the
non-controlling interests' share of the amount. The amount
identified as "non-controlling interests' share of items listed
above" in the table above is the cumulative amount of the
non-controlling interests' proportionate share of items listed in
the table.
TEEKAY OFFSHORE PARTNERS L.P. APPENDIX B - RECONCILIATION OF
NON-GAAP FINANCIAL MEASURE DISTRIBUTABLE CASH FLOW (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, distributions relating to equity financing of
newbuilding installments and on our preferred units, certain
realized gains on forward contracts, vessel acquisition costs,
estimated maintenance capital expenditures, unrealized gains and
losses from derivatives, non-cash income taxes, foreign currency
and unrealized foreign exchange related items. Maintenance capital
expenditures represent those capital expenditures required to
maintain over the long-term the operating capacity of, or the
revenue generated by, the Partnership's capital assets.
Distributable cash flow is a quantitative standard used in the
publicly-traded partnership investment community to assist in
evaluating a partnership's ability to make quarterly cash
distributions. Distributable cash flow is not defined by GAAP and
should not be considered as an alternative to net income or any
other indicator of the Partnership's performance required by GAAP.
The table below reconciles distributable cash flow to net income
for the quarters ended December 31, 2013 and December 31, 2012,
respectively.
|
Three Months Ended |
|
|
December 31, 2013 |
|
December 31, 2012 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
Net income |
35,612 |
|
65,702 |
|
Add (subtract): |
|
|
|
|
|
Depreciation and amortization |
52,311 |
|
46,227 |
|
|
Write-down and loss on sale of vessels |
19,280 |
|
14,307 |
|
|
Partnership's share of equity accounted joint ventures'
distributable cash flow before estimated maintenance capital
expenditures |
4,787 |
|
- |
|
|
Distributions relating to equity financing of newbuildings |
2,914 |
|
2,384 |
|
|
Deferred income tax expense (recovery) |
2,297 |
|
(9,401 |
) |
|
Distributions relating to preferred units |
(2,719 |
) |
- |
|
|
Equity income from joint venture |
(3,934 |
) |
- |
|
|
Unrealized gains on derivative instruments (1) |
(25,219 |
) |
(44,811 |
) |
|
Estimated maintenance capital expenditures (2) |
(28,859 |
) |
(26,573 |
) |
|
Indemnification from Teekay Corporation relating to the
Voyageur Spirit FPSO (2) |
4,911 |
|
- |
|
|
Non-cash items in discontinued operations (3) |
- |
|
6,476 |
|
|
Foreign exchange and other, net |
672 |
|
(3,256 |
) |
Distributable Cash Flow before Non-Controlling
Interests |
62,053 |
|
51,055 |
|
|
Non-controlling interests' share of DCF |
(4,650 |
) |
(5,126 |
) |
Distributable Cash Flow before Non-Controlling |
57,403 |
|
45,929 |
|
- Derivative instruments include interest rate swaps and foreign
exchange forward contracts.
- Indemnification of the loss of revenues and certain unrecovered
vessel operating expenses from the Voyageur Spirit FPSO is
effectively treated as a reduction to estimated maintenance capital
expenditures in the fourth quarter of 2013, since the
indemnification amount received from Teekay Corporation is
effectively treated as a reduction to the purchase price of the
Voyageur Spirit FPSO.
- Includes depreciation and loss on write-down and sale of
vessels included in discontinued operations.
TEEKAY
OFFSHORE PARTNERS L.P. |
APPENDIX C - RECONCILIATION OF NON-GAAP
FINANCIAL MEASURE |
NET REVENUES |
(in
thousands of U.S. dollars) |
Description of Non-GAAP Financial Measure - Net Revenues
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 is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping
companies, however, it is not required by GAAP and should not be
considered as an alternative to revenues or any other indicator of
the Partnership's performance required by GAAP.
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2013 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
|
Total |
Revenues |
148,893 |
88,079 |
9,010 |
14,672 |
|
260,654 |
Voyage expenses |
27,866 |
- |
1,276 |
31 |
|
29,173 |
Net revenues |
121,027 |
88,079 |
7,734 |
14,641 |
|
231,481 |
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
|
Total |
Revenues |
143,229 |
59,709 |
8,643 |
20,431 |
|
232,012 |
Voyage expenses (recoveries) |
24,907 |
- |
1,139 |
(430 |
) |
25,616 |
Net revenues |
118,322 |
59,709 |
7,504 |
20,861 |
|
206,396 |
|
|
|
|
|
|
|
|
Year Ended December 31, 2013 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
|
Total |
Revenues |
552,019 |
284,932 |
34,772 |
59,016 |
|
930,739 |
Voyage expenses (recoveries) |
99,543 |
- |
4,532 |
(432 |
) |
103,643 |
Net revenues |
452,476 |
284,932 |
30,240 |
59,448 |
|
827,096 |
|
|
|
|
|
|
|
|
Year Ended December 31, 2012 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
FSO Segment |
|
Total |
Revenues |
569,519 |
231,688 |
37,119 |
62,901 |
|
901,227 |
Voyage expenses |
104,394 |
- |
5,689 |
400 |
|
110,483 |
Net revenues |
465,125 |
231,688 |
31,430 |
62,501 |
|
790,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEEKAY OFFSHORE PARTNERS L.P. APPENDIX D - SUPPLEMENTAL SEGMENT
INFORMATION (in thousands of U.S. dollars) |
|
Three Months Ended December 31, 2013 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
|
FSO Segment |
Total |
Net
revenues (See Appendix C) |
121,027 |
88,079 |
7,734 |
|
14,641 |
231,481 |
Vessel operating expenses (1) |
41,287 |
40,268 |
1,129 |
|
8,566 |
91,250 |
Time-charter hire expense |
13,670 |
- |
- |
|
- |
13,670 |
Depreciation and amortization |
30,423 |
18,074 |
1,697 |
|
2,117 |
52,311 |
General and administrative (1) |
4,849 |
4,849 |
400 |
|
968 |
11,066 |
Write-down and loss on sale of vessels |
19,280 |
- |
- |
|
- |
19,280 |
Restructuring charge |
104 |
- |
- |
|
- |
104 |
Income from vessel operations |
11,414 |
24,888 |
4,508 |
|
2,990 |
43,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
Conventional Tanker Segment |
|
FSO Segment |
Total |
Net
revenues (See Appendix C) |
118,322 |
59,709 |
7,504 |
|
20,861 |
206,396 |
Vessel operating expenses(1) |
39,899 |
29,994 |
1,603 |
|
15,517 |
87,013 |
Time-charter hire expense |
15,493 |
- |
- |
|
- |
15,493 |
Depreciation and amortization |
29,394 |
12,726 |
1,578 |
|
2,529 |
46,227 |
General and administrative (1) |
4,524 |
3,191 |
(462 |
) |
486 |
7,739 |
Write-down and loss on sale of vessels |
14,307 |
- |
- |
|
- |
14,307 |
Restructuring charges |
647 |
- |
468 |
|
- |
1,115 |
Income from vessel operations |
14,058 |
13,798 |
4,317 |
|
2,329 |
34,502 |
- In order to more closely align the Partnership's presentation
to that of its peers, the cost of ship management services of $8.4
million for the three months ended December 31, 2013 have been
presented in vessel operating expenses. All such costs incurred in
comparative periods have been reclassified from general and
administrative expenses to vessel operating expenses to conform to
the presentation adopted in the current period. The amount
reclassified was $9.8 million for the three months ended December
31, 2012.
TEEKAY
OFFSHORE PARTNERS L.P. |
APPENDIX E - RECONCILIATION OF NON-GAAP
FINANCIAL MEASURE |
CASH FLOW FROM VESSEL OPERATIONS FROM
CONSOLIDATED VESSELS |
(in
thousands of U.S. dollars) |
Description of Non-GAAP Financial Measure - Cash Flow from
Vessel Operations from Consolidated Vessels
Cash flow from vessel operations from consolidated vessels
represents income from vessel operations before depreciation and
amortization expense, write-down and loss on sale of vessels and
amortization of deferred gains, includes the realized (losses)
gains on the settlement of foreign exchange forward contracts, and
cash flow from vessel operations relating to its discontinued
operations and adjusting for direct financing leases to a cash
basis. Cash flow from vessel operations is included because certain
investors use this data to measure a company's financial
performance. Cash flow from vessel operations is not required by
GAAP and should not be considered as an alternative to net income
or any other indicator of the Partnership's performance required by
GAAP.
|
Three Months Ended December 31, 2013 |
|
|
(unaudited) |
|
|
Shuttle Tanker Segment |
|
FPSO Segment |
|
Conventional Tanker Segment |
FSO Segment |
|
Total |
|
Income from vessel operations (See Appendix D) |
11,414 |
|
24,888 |
|
4,508 |
2,990 |
|
43,800 |
|
Depreciation and amortization |
30,423 |
|
18,074 |
|
1,697 |
2,117 |
|
52,311 |
|
Realized losses from the settlements of non- designated foreign
exchange forward contracts |
(253 |
) |
- |
|
- |
- |
|
(253 |
) |
Amortization of non-cash portion of revenue contracts |
- |
|
(3,212 |
) |
- |
- |
|
(3,212 |
) |
Write-down of vessels |
19,280 |
|
- |
|
- |
- |
|
19,280 |
|
Falcon Spirit revenue accounted for as direct financing lease |
- |
|
- |
|
- |
(1,239 |
) |
(1,239 |
) |
Falcon Spirit cash flow from time-charter contracts |
- |
|
- |
|
- |
2,152 |
|
2,152 |
|
Cash flow from vessel operations from consolidated vessels |
60,864 |
|
39,750 |
|
6,205 |
6,020 |
|
112,839 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2012 |
|
|
(unaudited) |
|
|
Shuttle Tanker Segment |
|
FPSO Segment |
|
Conventional Tanker Segment |
FSO Segment |
|
Total |
|
Income from vessel operations (See Appendix D) |
14,058 |
|
13,798 |
|
4,317 |
2,329 |
|
34,502 |
|
Depreciation and amortization |
29,394 |
|
12,726 |
|
1,578 |
2,529 |
|
46,227 |
|
Unrealized gains from the change in fair value of designated
foreign exchange forward contracts |
146 |
|
- |
|
- |
- |
|
146 |
|
Realized gains from the settlements of non- designated foreign
exchange forward contracts |
604 |
|
500 |
|
- |
- |
|
1,104 |
|
Amortization of intangible and non-cash portion of revenue
contracts |
- |
|
(2,476 |
) |
- |
- |
|
(2,476 |
) |
Write-down and loss on sale of vessels |
14,307 |
|
- |
|
- |
- |
|
14,307 |
|
Falcon Spirit revenue accounted for as direct financing lease |
- |
|
- |
|
- |
(1,388 |
) |
(1,388 |
) |
Falcon Spirit cash flow from time-charter contracts |
- |
|
- |
|
- |
2,133 |
|
2,133 |
|
Cash flow from discontinued operations |
- |
|
- |
|
3,337 |
- |
|
3,337 |
|
Cash flow from vessel operations from consolidated vessels |
58,509 |
|
24,548 |
|
9,232 |
5,603 |
|
97,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TEEKAY
OFFSHORE PARTNERS L.P. |
APPENDIX F - RECONCILIATION OF NON-GAAP
FINANCIAL MEASURE |
CASH FLOW FROM VESSEL OPERATIONS FROM
EQUITY ACCOUNTED VESSEL |
(in
thousands of U.S. dollars) |
Description of Non-GAAP Financial Measure - Cash Flow from
Vessel Operations from Equity Accounted Vessel
Cash flow from vessel operations from equity accounted vessel
represents income from vessel operations before depreciation and
amortization expense. Cash flow from equity accounted vessel
represents the Partnership's proportionate share of cash flow from
vessel operations from its equity-accounted vessel, the Cidade
de Itajai FPSO unit. Cash flow from vessel operations from
equity accounted vessel is included because certain investors use
cash flow from vessel operations to measure a company's financial
performance, and to highlight this measure for the Partnership's
equity accounted joint venture. Cash flow from vessel operations
from equity accounted vessel is not required by GAAP and should not
be considered as an alternative to equity income or any other
indicator of the Partnership's performance required by GAAP.
|
Three Months Ended |
|
|
December 31, 2013 |
|
|
(unaudited) |
|
|
At |
|
Partnership's |
|
|
100% |
|
50% |
|
Voyage revenues |
19,033 |
|
9,517 |
|
Vessel and other operating expenses |
6,283 |
|
3,142 |
|
Depreciation and amortization |
4,062 |
|
2,031 |
|
General and administrative |
(537 |
) |
(269 |
) |
Income from vessel operations of equity accounted vessel |
9,225 |
|
4,613 |
|
Interest expense |
(2,281 |
) |
(1,141 |
) |
Realized and unrealized gains on derivative instruments |
924 |
|
462 |
|
Total other items |
(1,357 |
) |
(679 |
) |
Net income / equity income of equity accounted vessel |
7,868 |
|
3,934 |
|
|
|
|
|
|
Income from vessel operations |
9,225 |
|
4,613 |
|
Depreciation and amortization |
4,062 |
|
2,031 |
|
Cash flow from vessel operations from equity accounted vessel |
13,287 |
|
6,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
fundamentals in the offshore industry; future growth opportunities,
including the Partnership's ability to successfully bid for new
offshore projects or to grow organically; the timing of the
Voyageur Spirit receiving its certificate of final
acceptance from the charterer; the timing of new and converted
vessel deliveries and commencement of their time charter contracts;
the potential for the Partnership to acquire future HiLoad projects
developed by Remora; the estimated cost of building or converting
vessels; and the potential for Teekay Corporation or third parties
to offer additional vessels or projects to the Partnership and the
Partnership agreeing to acquire such vessels or projects, including
the timing and certainty of the acquisition of the Knarr
FPSO.
The following factors are among those that could cause actual
results to differ materially from the forward-looking statements,
which involve risks and uncertainties, and that should be
considered in evaluating any such statement: vessel operations and
oil production volumes; the potential inability of the Voyageur
Spirit FPSO to complete operational testing and receive its
certificate of final acceptance from the charterer; Teekay
Corporation's indemnification payments relating to the Voyageur
Spirit FPSO exceeding the maximum indemnification amount;
significant changes in oil prices; variations in expected levels of
field maintenance; increased operating expenses;
different-than-expected levels of oil production in the North Sea
and Brazil offshore fields; potential early termination of
contracts; shipyard delivery or vessel conversion delays and cost
overruns; delays in the commencement of time-charters; the
inability to successfully complete the operational testing of the
HiLoad DP unit; failure of Teekay Corporation to offer to the
Partnership additional vessels or of Remora or Odebrecht to develop
new vessels or projects; potential delays in the construction of
the Knarr FPSO and/or commencement of operations under its
charter contract; failure to obtain required approvals by the
Conflicts Committee of Teekay Offshore's general partner to approve
the acquisition of vessels offered from Teekay Corporation, or
third parties; the Partnership's ability to raise adequate
financing to purchase additional assets; and other factors
discussed in Teekay Offshore's filings from time to time with the
SEC, including its Report on Form 20-F for the fiscal year ended
December 31, 2012. 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 L.P.Ryan HamiltonInvestor Relations+1
(604) 609-6442www.teekayoffshore.com
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