Teekay Offshore Partners Reports First Quarter 2014 Results
HAMILTON, BERMUDA--(Marketwired - May 15, 2014) -
Highlights
- Generated distributable cash flow of $51.1 million in the first
quarter of 2014, an increase of 22 percent from the first quarter
of 2013.
- Declared first quarter 2014 cash distribution of $0.5384 per
common unit.
- The Voyageur Spirit FPSO received its certificate of
final acceptance from the charterer effective from February 22,
2014.
- In March 2014, acquired ALP Maritime Services and ordered four
long-haul towing and anchor handling vessel newbuildings for an
aggregate cost of approximately $261 million.
- In May 2014, entered into a letter of intent to acquire Logitel
Offshore, a company focused on the high-end floating accommodation
market utilizing the Sevan cylindrical hull design.
- Liquidity of approximately $349 million as at March 31,
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 March 31, 2014. During the first
quarter of 2014, the Partnership generated distributable cash
flow(1) of $51.1 million, compared to $41.8 million in the same
period of the prior year.
On April 9, 2014, a cash distribution of $0.5384 per common unit
was declared for the quarter ended March 31, 2014. The cash
distribution was paid on May 9, 2014 to all unitholders of record
on April 25, 2014.
"The Partnership's growing portfolio of long-term fixed-rate
contracts continued to generate stable cash flows during the first
quarter," commented Peter Evensen, Teekay Offshore GP LLC's Chief
Executive Officer. "Further to the update last quarter, we are now
pleased to report that in April 2014, the Partnership received the
certificate of final acceptance for the Voyageur Spirit
FPSO from the charterer effective February 22, 2014."
"We are excited about the letter of intent the Partnership
recently signed to acquire Logitel Offshore, which we believe will
provide the Partnership with an attractive and complementary new
channel for growth," Mr. Evensen continued. "We continue to see
strong growth fundamentals in the Brazil and North Sea offshore
markets, which are our core markets. We believe that the
combination of our strong operational platform and access to
capital, with Logitel's innovative accommodation rig design using
Sevan's cylindrical hull platform, will enable us to provide our
customers with an attractive and reliable alternative in this
growing segment."
Mr. Evensen added, "Looking ahead, we expect that the
acquisitions of Logitel and ALP, which diversify the Partnership's
investment portfolio and expand its presence in the offshore oil
production value-chain, will further complement Teekay Offshore's
existing pipeline of growth projects, including the Remora HiLoad
DP unit and two FSO conversion projects delivering between 2014 and
2017. In addition, there are up to five FPSO units that may become
available for purchase from our sponsor, Teekay Corporation, over
the near to medium term. The largest of these, the Knarr
FPSO newbuilding, remains on track for field installation and
start-up in the fourth quarter of 2014."
(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
Proposed Acquisition of Logitel
In May 2014, Teekay Offshore entered into a letter of intent to
acquire Logitel Offshore Holdings Ltd. (Logitel), a
Norway-based company focused on the high-end floating accommodation
market. Logitel owns two floating accommodation units
(FAUs), which are based on the Sevan Marine ASA
(Sevan) cylindrical hull design, currently under
construction at the COSCO (Nantong) Shipyard (COSCO) in
China, and has options with COSCO to order up to an additional six
FAUs. The first committed FAU has secured a three-year fixed-rate
charter contract, plus extension options, with Petroleo Brasileiro
SA (Petrobras) in Brazil and is scheduled for delivery in
early-2015. The Partnership expects to secure a charter contract
for the second FAU prior to its scheduled delivery in late-2015.
The agreement with COSCO for the committed FAUs includes a
favorable payment schedule, with the majority of the purchase price
due upon delivery. The Partnership intends to finance the Logitel
acquisition and the initial newbuilding payments through its
existing liquidity and expects to secure long-term debt financing
for the units prior to their scheduled deliveries. The Partnership
expects the proposed acquisition to be finalized in the third
quarter of 2014.
Acquisition of ALP and Newbuilding Order
In March 2014, Teekay Offshore acquired ALP Maritime Services
B.V. (ALP), a Netherlands-based provider of long-haul
ocean towage and offshore installation services to the global
offshore oil and gas industry. ALP currently provides these
services through a fleet of third-party owned vessels. As part of
the transaction, the Partnership and ALP entered into an agreement
with Niigata Shipbuilding & Repair of Japan for the
construction of four state-of-the-art SX-157 Ulstein Design
ultra-long distance towing and anchor handling vessel newbuildings,
which will be equipped with dynamic positioning capability, for a
fully built-up cost of approximately $261 million, which includes
the cost of acquiring ALP. These newbuildings will be capable of
ultra-long distance towing and offshore unit installation and
decommissioning of large floating exploration, production and
storage units, including floating production, storage and
offloading (FPSO) units, floating liquefied natural gas
(FLNG) units and floating drill rigs. The Partnership
intends to continue financing the newbuilding installments through
its existing liquidity and expects to secure long-term debt
financing for these vessels prior to their scheduled deliveries in
2016.
Voyageur Spirit FPSO Update
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
had been receiving full rate under the charter contract as though
the unit was producing at full capacity either directly from the
charterer or through the indemnification arrangement with Teekay
Corporation. On April 4, 2014, the Partnership received the
certificate of final acceptance from the charterer, which declared
the unit on-hire retroactive to February 22, 2014.
Up to February 22, 2014, the Partnership has been indemnified by
Teekay Corporation for certain lost revenues 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 have been
effectively treated as a reduction in the purchase price paid to
Teekay Corporation for the Voyageur Spirit FPSO by Teekay
Offshore. During the first quarter of 2014, the Partnership's
indemnification effectively resulted in a $3.5 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 from the date of acquisition to February 22, 2014, Teekay
Corporation indemnified the Partnership for a total of $38.4
million relating to the Voyageur Spirit FPSO.
Dampier Spirit FSO Contract Extension
In May 2014, the Partnership secured a 10-year contract
extension with Apache Energy for the 1987-built Dampier
Spirit floating storage and offtake (FSO) unit, which
operates on the Stag oil field offshore Western Australia. As part
of the extension, the FSO unit is expected to enter into drydock
during the second quarter of 2014 for capital upgrades with an
expected total cost of approximately $11 million. Under the new
contract, the unit is expected to earn approximately $5.7 million
in annual cash flow from vessel operations(1).
(1) Cash flow from vessel operations (CFVO) from
consolidated vessels represents income from vessel operations
before depreciation and amortization expense, write-down 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.
Teekay Offshore's
Fleet
The following table summarizes Teekay Offshore's fleet as of May
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 |
Towage Segment |
- |
- |
4(v) |
- |
4 |
FSO Segment |
5 |
- |
1(vi) |
- |
6 |
Total |
46 |
2 |
5 |
1 |
54 |
- Includes six shuttle tankers in which Teekay Offshore's
ownership interest is 50 percent and three 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 four long-haul towing and anchor handling vessel
newbuildings scheduled to deliver in 2016.
- 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 Units)
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 is currently
undergoing operational testing, which is expected to be completed
during the second quarter of 2014. Upon completion of the testing,
the unit is expected to commence operations under a ten-year
time-charter contract with Petroleo Brasileiro SA
(Petrobras) in Brazil. 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 E&P
Brasil Ltd. 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, is expected to include new features, such
as increased engine power and the capability to maneuver vessels
larger than Suezmax conventional tankers.
FPSO Units
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.
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 based on fair market value.
Teekay Corporation owns three additional FPSO units, the
Hummingbird Spirit FPSO, 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.
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.
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 $230 million, including the cost of acquiring the
remaining 33 percent ownership interest in the Randgrid
shuttle tanker. Following its 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 $70 million (including reimbursable
installation costs). 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 $31.2 million for the quarter ended March 31, 2014,
compared to $18.9 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 decreasing net income
by $23.8 million and increasing net income by $1.3 million for the
quarters ended March 31, 2014 and 2013, 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 $7.3 million for the first quarter of 2014,
compared to $20.2 million in the same period of the prior year. Net
revenues(2) increased to $225.8 million for the first quarter of
2014, compared to $189.2 million in the same period of the prior
year.
Adjusted net income attributable to the partners for the three
months ended March 31, 2014 increased from the same period in the
prior year, mainly due to the acquisition of the Voyageur
Spirit and a 50 percent interest in the Cidade de
Itajai FPSO units in the second quarter of 2013 and the
commencement of the time-charters with a subsidiary of BG Group plc
for four newbuilding shuttle tankers (BG Shuttle Tankers)
in June, August and November 2013 and January 2014. These increases
were partially offset by the sale and lay-up of older shuttle and
conventional tankers during 2013 as their related charter contracts
expired or terminated.
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 operations of this FPSO unit from its acquisition on May 2,
2013 through to March 31, 2014. During this period, the unit also
incurred certain operating expenses associated with ensuring the
Voyageur Spirit FPSO was capable of operating at full
capacity. For the three months ended March 31, 2014, the
Partnership received $3.5 million in indemnification payments from
Teekay Corporation, which are recorded in Partners' Equity as an
adjustment to the Partnership's purchase price of the Voyageur
Spirit 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, 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 FSO segment, and the Conventional Tanker segment
(please refer to the "Teekay Offshore's Fleet" section of this
release above and Appendices C through F for
further details).
|
Three Months
Ended |
|
March 31,
2014 |
|
(unaudited) |
(in thousands of U.S. dollars) |
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
Conventional Tanker Segment |
Total (3) |
Net revenues(1) |
121,474 |
83,137 |
14,266 |
6,903 |
225,780 |
Vessel operating expenses |
40,406 |
40,391 |
5,873 |
1,460 |
88,130 |
Time-charter hire expense |
11,412 |
- |
- |
- |
11,412 |
Depreciation and amortization |
27,281 |
17,903 |
1,693 |
1,611 |
48,488 |
CFVO from consolidated vessels(2) |
61,901 |
33,846 |
8,492 |
4,910 |
108,149 |
CFVO from equity accounted vessel(4) |
- |
7,947 |
- |
- |
7,947 |
Total CFVO(2)(4) |
61,901 |
41,793 |
8,492 |
4,910 |
116,096 |
|
Three Months
Ended |
March 31,
2013 |
(unaudited) |
(in thousands of U.S. dollars) |
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
Conventional Tanker Segment |
Total |
Net revenues(1) |
108,056 |
57,685 |
15,625 |
7,798 |
189,164 |
Vessel operating expenses |
37,967 |
29,501 |
8,285 |
1,571 |
77,324 |
Time-charter hire expense |
14,777 |
- |
- |
- |
14,777 |
Depreciation and amortization |
27,605 |
12,752 |
2,582 |
1,571 |
44,510 |
CFVO from consolidated vessels(2) |
48,919 |
22,256 |
7,358 |
15,520 |
94,053 |
CFVO from equity accounted vessel(4) |
- |
- |
- |
- |
- |
Total CFVO(2) |
48,919 |
22,256 |
7,358 |
15,520 |
94,053 |
- 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 of vessels
and amortization of deferred gains, and 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 adjustments 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.
- The total column includes a $1.0 million fee associated with
the acquisition of ALP in CFVO from consolidated vessels and Total
CFVO. This fee was recognized in general and administrative
expenses in the consolidated statement of income for the three
months ended March 31, 2014. The towage segment has not been
disaggregated as its results are not material other than this
fee.
- CFVO from equity accounted vessel 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 vessel
(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 $61.9 million in the first quarter of
2014 compared to $48.9 million for the same period of the prior
year, primarily due to the delivery of the four BG Shuttle Tanker
newbuildings in June, August and November 2013 and January 2014,
partially offset by the expiration of time-charter out contracts
relating to three existing shuttle tankers during the third quarter
of 2013 and the first quarter of 2014.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO
segment, including one equity-accounted FPSO unit, increased to
$41.8 million for the first quarter of 2014 compared to $22.3
million for the same period of the prior year, primarily due to
additional cash flows related to the acquisition of the
Voyageur Spirit and a 50 percent interest in the
Cidade de Itajai FPSO units in the second quarter of 2013.
Cash flow from vessel operations for the first quarter of 2014
excludes the $3.5 million Voyageur Spirit FPSO
indemnification payment from Teekay Corporation.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO
segment increased to $8.5 million in the first quarter of 2014
compared to $7.4 million for the same period of the prior year,
primarily due to costs associated with front-end engineering and
design studies completed in 2013 in relation to certain FSO project
tenders.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's
Conventional Tanker segment decreased to $4.9 million in the first
quarter of 2014 compared to $15.5 million for the same period of
the prior year primarily due to the sale of three conventional
tankers since the first quarter of 2013.
Liquidity
In January 2014, the Partnership issued NOK 1,000 million in
senior unsecured bonds in the Norwegian bond market that mature in
January 2019. The aggregate principal amount of the bonds was
equivalent to USD 162 million and all interest and principal
payments have been swapped into U.S. dollars at a fixed rate of
6.28 percent. The net proceeds from the bond offering were used for
general partnership purposes. The Partnership is applying to list
the bonds on the Oslo Stock Exchange.
As of March 31, 2014, the Partnership had total liquidity of
$348.5 million, which consisted of $223.0 million in cash and cash
equivalents and $125.5 million in undrawn revolving credit
facilities.
2013 Audited Financial
Statements
Teekay Offshore Partners L.P. filed its 2013 Annual Report on
Form 20-F with the U.S. Securities and Exchange Commission
(SEC) on April 29, 2014. Copies are available on Teekay
Offshore's website, under "Investors - Financials", 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 Offshore's Investor
Relations.
Conference
Call
The Partnership also plans to host a conference call on Friday,
May 16, 2014 at noon (ET) to discuss the results for the first
quarter of 2014. 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 2061356.
- 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 First Quarter 2014 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,
May 23, 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 2061356.
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 owns interests in 35 shuttle tankers (including
two chartered-in vessels and one HiLoad Dynamic Positioning
(DP) unit), five floating production, storage and
offloading (FPSO) units, six floating storage and offtake
(FSO) units (including one committed FSO conversion unit),
four long-haul towing and anchor handling vessel newbuildings and
four conventional oil tankers. The majority of Teekay Offshore's
fleet is employed on long-term, stable contracts. In addition,
Teekay Offshore also 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 |
|
(in thousands of U.S. dollars, except unit data) |
|
|
Three Months
Ended |
|
|
|
|
|
March 31, 2014 |
|
December 31,
2013 |
|
March 31, 2013 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
REVENUES |
259,234 |
|
260,654 |
|
212,112 |
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
Voyage expenses |
33,454 |
|
29,173 |
|
22,948 |
|
Vessel operating expenses |
88,130 |
|
91,250 |
|
77,324 |
|
Time-charter hire expense |
11,412 |
|
13,670 |
|
14,777 |
|
Depreciation and amortization |
48,488 |
|
52,311 |
|
44,510 |
|
General and administrative |
14,849 |
|
11,066 |
|
10,390 |
|
Write-down of vessels |
- |
|
19,280 |
|
- |
|
Restructuring charge(1) |
559 |
|
104 |
|
659 |
|
Total operating expenses |
196,892 |
|
216,854 |
|
170,608 |
|
Income from vessel operations |
62,342 |
|
43,800 |
|
41,504 |
|
OTHER ITEMS |
|
|
|
|
|
|
Interest expense |
(18,920 |
) |
(18,403 |
) |
(11,628 |
) |
Interest income |
177 |
|
434 |
|
195 |
|
Realized and unrealized (losses) gains on derivative instruments
(2) |
(36,632 |
) |
9,948 |
|
(1,077 |
) |
Equity income |
3,703 |
|
3,934 |
|
- |
|
Foreign exchange losses(3) |
(775 |
) |
(2,465 |
) |
(3,638 |
) |
Loss on bond repurchase(4) |
- |
|
- |
|
(1,759 |
) |
Other income - net |
390 |
|
260 |
|
314 |
|
Total other items |
(52,057 |
) |
(6,292 |
) |
(17,593 |
) |
Income from continuing operations before income tax (expense)
recovery |
10,285 |
|
37,508 |
|
23,911 |
|
Income tax (expense) recovery |
(1,263 |
) |
(1,896 |
) |
234 |
|
Net income from continuing operations |
9,022 |
|
35,612 |
|
24,145 |
|
Net loss from discontinued operations(5) |
- |
|
- |
|
(2,175 |
) |
Net income |
9,022 |
|
35,612 |
|
21,970 |
|
Non-controlling interests in net income |
1,679 |
|
(5,657 |
) |
1,777 |
|
Preferred unitholders' interest in net income |
2,719 |
|
2,719 |
|
- |
|
General Partner's interest in net income |
3,943 |
|
4,621 |
|
3,073 |
|
Limited partners' interest in net income |
681 |
|
33,929 |
|
17,120 |
|
Weighted-average number of common units - basic |
85,455,292 |
|
83,949,362 |
|
80,105,408 |
|
Weighted-average number of common units - diluted |
85,480,352 |
|
83,981,522 |
|
80,106,741 |
|
Total number of common units outstanding at end of period |
85,468,145 |
|
83,452,079 |
|
80,105,408 |
|
- Restructuring charges for the three months ended March 31, 2014
and December 31, 2013 each relate to the reflagging of a shuttle
tanker. In addition, restructuring charges for the three months
ended March 31, 2013 relate to the reorganization of the
Partnership's marine operations to create better alignment with its
shuttle tanker business unit and a lower-cost organization.
- Realized (losses) gains on derivative instruments relate to
amounts the Partnership actually paid or received to settle
derivative instruments, and the unrealized (losses) gains on
derivative instruments relate to the change in fair value of such
derivative instruments, as detailed in the table below:
|
|
|
|
|
|
|
Three Months
Ended |
|
|
March 31, 2014 |
|
December 31,
2013 |
|
March 31, 2013 |
|
Realized (losses) gains relating to: |
|
|
|
|
|
|
|
Interest rate swaps |
(14,063 |
) |
(15,018 |
) |
(14,623 |
) |
|
Foreign currency forward contract |
(497 |
) |
(253 |
) |
353 |
|
|
(14,560 |
) |
(15,271 |
) |
(14,270 |
) |
|
|
|
|
|
|
|
Unrealized (losses) gains relating to: |
|
|
|
|
|
|
|
Interest rate swaps |
(24,108 |
) |
25,073 |
|
14,971 |
|
|
Foreign currency forward contracts |
2,036 |
|
146 |
|
(1,778 |
) |
|
(22,072 |
) |
25,219 |
|
13,193 |
|
Total realized and unrealized (losses) gains |
|
|
|
|
|
|
on derivative instruments |
(36,632 |
) |
9,948 |
|
(1,077 |
) |
- Foreign exchange losses 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 that matured in the fourth quarter of 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, NOK 1,300 million of unsecured bonds in 2013
maturing in 2016 and 2018, and NOK 1,000 million unsecured bonds in
2014 maturing in 2019. Foreign exchange losses also include
unrealized gains (losses) relating to the change in fair value of
such derivative instruments, partially offset by unrealized
(losses) gains on the revaluation of the NOK bonds, as detailed in
the table below:
|
Three Months
Ended |
|
|
|
|
|
March 31, 2014 |
|
December 31,
2013 |
|
March 31, 2013 |
|
Realized gain on partial termination of cross-currency swap |
- |
|
- |
|
6,800 |
|
Realized foreign exchange loss on partial repurchase of NOK
bonds |
- |
|
- |
|
(6,573 |
) |
Realized gains on cross-currency swaps |
16 |
|
210 |
|
725 |
|
Unrealized gains (losses) on cross-currency swaps |
7,575 |
|
(4,534 |
) |
(25,502 |
) |
Unrealized (losses) gains on revaluation of NOK bonds |
(9,130 |
) |
2,983 |
|
23,996 |
|
- Loss on bond repurchase for the quarter 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 three conventional tankers (Leyte Spirit,
Poul Spirit and Gotland Spirit), which the
Partnership sold during 2013, have been included in Net loss from
discontinued operations for the periods presented.
|
|
TEEKAY OFFSHORE PARTNERS L.P. |
CONSOLIDATED BALANCE SHEETS |
(in thousands of U.S. dollars) |
|
|
As at |
As at |
|
March 31, 2014 |
December 31,
2013 |
|
(unaudited) |
(unaudited) |
|
|
|
ASSETS |
|
|
Current |
|
|
Cash
and cash equivalents |
222,990 |
219,126 |
Accounts receivable |
169,021 |
176,265 |
Net
investments in direct financing leases - current |
4,830 |
5,104 |
Prepaid expenses |
36,525 |
31,675 |
Due
from affiliates |
19,675 |
15,202 |
Current portion of derivative instruments |
1,546 |
500 |
Other current assets |
3,384 |
3,051 |
Total current assets |
457,971 |
450,923 |
|
|
|
Vessels and equipment |
|
|
At
cost, less accumulated depreciation |
3,067,880 |
3,089,582 |
Advances on newbuilding contracts |
46,369 |
- |
Investment in equity accounted joint venture |
55,824 |
52,120 |
Net
investments in direct financing leases |
21,305 |
22,463 |
Derivative instruments |
12,168 |
10,323 |
Deferred income tax |
7,981 |
7,854 |
Other
assets |
37,307 |
35,272 |
Intangible assets - net |
9,429 |
10,436 |
Goodwill |
129,145 |
127,113 |
Total assets |
3,845,379 |
3,806,086 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current |
|
|
Accounts payable |
18,518 |
15,753 |
Accrued liabilities |
134,756 |
138,156 |
Deferred revenues |
24,437 |
29,075 |
Due
to affiliates |
80,183 |
121,864 |
Current portion of long-term debt |
748,055 |
806,009 |
Current portion of derivative instruments |
55,165 |
47,944 |
Current portion of in-process revenue contracts |
12,744 |
12,744 |
Total current liabilities |
1,073,858 |
1,171,545 |
|
|
|
Long-term debt |
1,730,873 |
1,562,967 |
Derivative instruments |
131,302 |
121,135 |
In-process revenue contracts |
85,407 |
88,550 |
Other long-term liabilities |
23,480 |
23,984 |
Total liabilities |
3,044,920 |
2,968,181 |
|
|
|
Redeemable non-controlling interest |
15,911 |
16,564 |
|
|
|
|
|
|
Limited partners - common units (85.5 million and 85.5 million
units issued and outstanding at March 31, 2014 and December 31,
2013, respectively) |
579,830 |
621,002 |
Limited partners - preferred units (6.0 million and 6.0 million
units issued and outstanding at March 31, 2014 and December 31,
2013, respectively) |
144,800 |
144,800 |
General Partner |
20,399 |
21,242 |
Partners' equity |
745,029 |
787,044 |
Non-controlling interests |
39,519 |
34,297 |
Total equity |
784,548 |
821,341 |
Total liabilities and total equity |
3,845,379 |
3,806,086 |
|
|
|
|
TEEKAY OFFSHORE PARTNERS L.P. |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(in thousands of U.S. dollars) |
|
|
|
|
|
Three Months
Ended |
|
|
March 31, 2014 |
|
March 31, 2013 |
|
|
(unaudited) |
|
(unaudited) |
|
Cash and cash equivalents provided by (used for) |
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net income |
9,022 |
|
21,970 |
|
Non-cash items: |
|
|
|
|
|
Unrealized loss on derivative instruments |
14,497 |
|
12,368 |
|
|
Equity income |
(3,703 |
) |
- |
|
|
Depreciation and amortization |
48,488 |
|
45,349 |
|
|
Write-down and loss on sale of vessels |
- |
|
11,247 |
|
|
Deferred income tax expense (recovery) |
10 |
|
(108 |
) |
|
Amortization of in-process revenue contracts |
(3,142 |
) |
(3,142 |
) |
|
Foreign currency exchange (gain) loss and other |
8,629 |
|
(23,004 |
) |
Change in non-cash working capital items related to
operating activities |
(49,017 |
) |
(17,361 |
) |
Expenditures for dry docking |
(5,212 |
) |
(972 |
) |
Net operating cash flow |
19,572 |
|
46,347 |
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds from long-term debt |
208,821 |
|
234,986 |
|
Scheduled repayments of long-term debt |
(37,999 |
) |
(23,019 |
) |
Prepayments of long-term debt |
(70,000 |
) |
(90,352 |
) |
Debt issuance costs |
(2,250 |
) |
(5,091 |
) |
Indemnification on Voyageur Spirit FPSO from
Teekay Corporation |
3,474 |
|
- |
|
Realized gain on cross currency swap |
- |
|
6,800 |
|
Cash distributions paid by the Partnership |
(57,204 |
) |
(44,209 |
) |
Other |
7,111 |
|
(158 |
) |
Net financing cash flow |
51,953 |
|
78,957 |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Expenditures for vessels and equipment |
(66,772 |
) |
(23,785 |
) |
Proceeds from sale of vessels and equipment |
- |
|
13,250 |
|
Prepayment of purchase of Voyageur Spirit
FPSO |
- |
|
(150,000 |
) |
Direct financing lease payments received |
1,433 |
|
1,693 |
|
Acquisition of ALP Maritime Services B.V. (net of cash
acquired of $0.3 million) |
(2,322 |
) |
- |
|
Net investing cash flow |
(67,661 |
) |
(158,842 |
) |
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
3,864 |
|
(33,538 |
) |
Cash and cash equivalents, beginning of the period |
219,126 |
|
206,339 |
|
Cash and cash equivalents, beginning of the period |
222,990 |
|
172,801 |
|
|
|
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 |
|
|
March 31, 2014 |
|
March 31, 2013 |
|
|
(unaudited) |
|
(unaudited) |
|
Net income - GAAP basis |
9,022 |
|
21,970 |
|
Adjustments: |
|
|
|
|
|
Net income attributable to non-controlling interests |
(1,679 |
) |
(1,777 |
) |
Net income attributable to the partners |
7,343 |
|
20,193 |
|
Add (subtract) specific items affecting net income
: |
|
|
|
|
|
Foreign exchange losses (1) |
791 |
|
4,365 |
|
|
Unrealized losses (gains) on derivative instruments (2) |
21,921 |
|
(13,193 |
) |
|
Components of discontinued operations (3) |
- |
|
4,447 |
|
|
Restructuring charges and other (4) |
922 |
|
821 |
|
|
Loss
on bond repurchase (5) |
- |
|
1,759 |
|
|
Non-controlling interests' share of items above (6) |
199 |
|
470 |
|
Total adjustments |
23,833 |
|
(1,331 |
) |
Adjusted net income attributable to the partners |
31,176 |
|
18,862 |
|
- Foreign exchange losses primarily relate to the Partnership's
revaluation of all foreign currency-denominated monetary assets and
liabilities based on the prevailing exchange rate at the end of
each reporting period and 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 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, including the unrealized mark-to-market value of the
interest rate swap within the Cidade de Itajai FPSO equity
accounted joint venture.
- Related to components of net loss from discontinued operations.
The results for the three months ended March 31, 2013 include a
termination fee of $6.8 million received from Teekay Corporation
upon the early termination of the Poul Spirit conventional
tanker time-charter contract in March 2013, and the write-down of
the Poul Spirit conventional tanker of $11.2 million to
its estimated fair value.
- The three months ended March 31, 2014 includes $0.6 million of
restructuring charges relating to the reflagging of a vessel and a
$1.0 million fee associated with the acquisition of ALP, partially
offset by a seafarer pension credit of $0.7 million. The three
months ended March 31, 2013 includes $0.7 million in restructuring
charges relating to the reorganization of the Partnership's shuttle
tanker marine operations resulting in a lower cost
organization.
- Loss on bond repurchase for the three months ended March 31,
2013 relates to the repurchase of NOK 388.5 million of the
Partnership's existing NOK 600 million bond issue at a premium in
January 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 interests,
non-cash items, distributions relating to equity financing of
newbuilding installments and on our preferred units, vessel and
business 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 March 31, 2014 and March 31, 2013, respectively.
|
Three Months
Ended |
|
|
March 31, 2014 |
|
March 31, 2013 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
Net income |
9,022 |
|
21,970 |
|
Add (subtract): |
|
|
|
|
|
Depreciation and amortization |
48,488 |
|
44,510 |
|
|
Unrealized losses (gains) on derivative instruments (1) |
22,072 |
|
(13,193 |
) |
|
Partnership's share of equity accounted joint venture's
distributable cash flow before estimated maintenance capital
expenditures |
5,907 |
|
- |
|
|
Distributions relating to equity financing of newbuildings |
1,707 |
|
2,459 |
|
|
Distributions relating to preferred units |
(2,719 |
) |
- |
|
|
Loss on bond repurchase |
- |
|
1,759 |
|
|
Equity income from joint venture |
(3,703 |
) |
- |
|
|
Estimated maintenance capital expenditures (2) |
(29,924 |
) |
(24,620 |
) |
|
Indemnification from Teekay Corporation relating to the
Voyageur Spirit FPSO (2) |
3,474 |
|
- |
|
|
Non-cash items in discontinued operations (3) |
- |
|
12,086 |
|
|
Foreign exchange and other, net |
1,106 |
|
2,598 |
|
Distributable Cash Flow before Non-Controlling
Interests |
55,430 |
|
47,569 |
|
|
Non-controlling interests' share of DCF |
(4,370 |
) |
(5,813 |
) |
Distributable Cash Flow |
51,060 |
|
41,756 |
|
- 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 first quarter of 2014, 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 of vessel 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
(recoveries), which comprise all expenses relating to certain
voyages, including bunker fuel expenses, port fees, cargo loading
and unloading expenses, canal tolls, agency fees and 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 March 31, 2014 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
|
Conventional Tanker Segment |
Total |
Revenues |
153,180 |
83,137 |
14,289 |
|
8,628 |
259,234 |
Voyage expenses |
31,706 |
- |
23 |
|
1,725 |
33,454 |
Net revenues |
121,474 |
83,137 |
14,266 |
|
6,903 |
225,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March 31, 2013 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
|
Conventional Tanker Segment |
Total |
Revenues |
130,350 |
57,685 |
15,140 |
|
8,937 |
212,112 |
Voyage expenses (recoveries) |
22,294 |
- |
(485 |
) |
1,139 |
22,948 |
Net revenues |
108,056 |
57,685 |
15,625 |
|
7,798 |
189,164 |
|
|
|
|
|
|
|
|
|
TEEKAY OFFSHORE PARTNERS L.P. APPENDIX D - SUPPLEMENTAL SEGMENT
INFORMATION (in thousands of U.S. dollars) |
|
|
|
|
|
Three Months
Ended March 31, 2014 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
Conventional Tanker Segment |
Total |
|
|
|
|
|
|
Net
revenues (See Appendix C) |
121,474 |
83,137 |
14,266 |
6,903 |
225,780 |
Vessel operating expenses |
40,406 |
40,391 |
5,873 |
1,460 |
88,130 |
Time-charter hire expense |
11,412 |
- |
- |
- |
11,412 |
Depreciation and amortization |
27,281 |
17,903 |
1,693 |
1,611 |
48,488 |
General and administrative |
6,699 |
5,758 |
859 |
533 |
13,849 |
Acquisition fee (1) |
- |
- |
- |
- |
1,000 |
Restructuring charge |
559 |
- |
- |
- |
559 |
Income from vessel operations |
35,117 |
19,085 |
5,841 |
3,299 |
62,342 |
|
|
|
|
|
|
(1) The towage segment has not been disaggregated as
its results are not material other than a $1.0 million fee
associated with the acquisition of ALP. This fee was recognized in
general and administrative expenses in the consolidated statement
of income for the three months ended March 31, 2014. |
|
Three Months
Ended March 31, 2013 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
Conventional Tanker Segment |
Total |
Net
revenues (See Appendix C) |
108,056 |
57,685 |
15,625 |
7,798 |
189,164 |
Vessel operating expenses |
37,967 |
29,501 |
8,285 |
1,571 |
77,324 |
Time-charter hire expense |
14,777 |
- |
- |
- |
14,777 |
Depreciation and amortization |
27,605 |
12,752 |
2,582 |
1,571 |
44,510 |
General and administrative |
5,889 |
3,062 |
766 |
673 |
10,390 |
Restructuring charge |
659 |
- |
- |
- |
659 |
Income from vessel operations |
21,159 |
12,370 |
3,992 |
3,983 |
41,504 |
|
|
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 of vessels and amortization of
deferred gains, and 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
adjustments 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 March 31, 2014 |
|
(unaudited) |
|
Shuttle Tanker Segment |
FPSO Segment |
FSO Segment |
Conventional Tanker Segment |
Total |
Income from vessel operations (See Appendix D) (1) |
35,117 |
19,085 |
5,841 |
3,299 |
62,342 |
Depreciation and amortization |
27,281 |
17,903 |
1,693 |
1,611 |
48,488 |
Realized losses from the settlements of non-designated foreign
exchange forward contracts |
(497) |
- |
- |
- |
(497) |
Amortization of non-cash portion of revenue contracts |
- |
(3,142) |
- |
- |
(3,142) |
Falcon Spirit revenue accounted for as direct financing lease |
- |
- |
(1,184) |
- |
(1,184) |
Falcon Spirit cash flow from time-charter contracts |
- |
- |
2,142 |
- |
2,142 |
Cash
flow from vessel operations from |
|
|
|
|
|
consolidated vessels |
61,901 |
33,846 |
8,492 |
4,910 |
108,149 |
|
|
|
|
|
|
(1) The total column includes a $1.0 million fee
associated with the acquisition of ALP in income from vessel
operations. This fee was recognized in general and administrative
expenses in the consolidated statement of income for the three
months ended March 31, 2014. The towage segment has not been
disaggregated as its results are not material other than this
fee. |
|
|
|
|
|
|
|
Three Months
Ended March 31, 2013 |
|
|
(unaudited) |
|
|
Shuttle Tanker Segment |
FPSO Segment |
|
FSO Segment |
|
Conventional Tanker Segment |
Total |
|
Income from vessel operations (See Appendix D) |
21,159 |
12,370 |
|
3,992 |
|
3,983 |
41,504 |
|
Depreciation and amortization |
27,605 |
12,752 |
|
2,582 |
|
1,571 |
44,510 |
|
Unrealized losses from the change in fair value of designated
foreign exchange forward contracts |
59 |
- |
|
- |
|
- |
59 |
|
Realized gains from the settlements of non-designated foreign
exchange forward contracts |
96 |
257 |
|
- |
|
- |
353 |
|
Amortization of intangible and non-cash portion of revenue
contracts |
- |
(3,123 |
) |
- |
|
- |
(3,123 |
) |
Falcon Spirit revenue accounted for as direct financing lease |
- |
- |
|
(1,339 |
) |
- |
(1,339 |
) |
Falcon Spirit cash flow from time-charter contracts |
- |
- |
|
2,123 |
|
- |
2,123 |
|
Cash flow from discontinued operations |
- |
- |
|
- |
|
9,966 |
9,966 |
|
Cash
flow from vessel operations from |
|
|
|
|
|
|
|
|
consolidated vessels |
48,919 |
22,256 |
|
7,358 |
|
15,520 |
94,053 |
|
|
|
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 |
|
|
March 31,
2014 |
|
|
(unaudited) |
|
|
At |
|
Partnership's |
|
|
100% |
|
50% |
|
Voyage revenues |
23,385 |
|
11,693 |
|
Vessel and other operating expenses |
7,471 |
|
3,735 |
|
Depreciation and amortization |
4,466 |
|
2,233 |
|
General and administrative |
21 |
|
11 |
|
Income from vessel operations of equity accounted vessel |
11,427 |
|
5,714 |
|
Interest expense |
(1,735 |
) |
(868 |
) |
Realized and unrealized losses on derivative instruments |
(1,788 |
) |
(894 |
) |
Foreign currency exchange loss |
(475 |
) |
(238 |
) |
Total other items |
(3,998 |
) |
(2,000 |
) |
Net
income / equity income of equity accounted vessel before income tax
expense |
7,429 |
|
3,714 |
|
Income tax expense |
(22 |
) |
(11 |
) |
Net income / equity income of equity accounted vessel |
7,407 |
|
3,703 |
|
|
|
|
|
|
Income from vessel operations |
11,427 |
|
5,714 |
|
Depreciation and amortization |
4,466 |
|
2,233 |
|
Cash flow from vessel operations from equity accounted vessel |
15,893 |
|
7,947 |
|
|
|
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; future increases in the
Partnership's distributable cash flows; the results of proposed
projects; 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 and improved features
of new HiLoad DP vessel designs; the timing and certainty of
completion of the Partnership's acquisition of Logitel; the effect
of the Logitel acquisition on the Partnership's future cash flows
and growth opportunities; the timing and certainty of entering into
long-term financing for the FAU newbuildings prior to their
deliveries; the timing and certainty of securing a charter contract
for the second FAU newbuilding prior to its delivery; the estimated
cost of building or converting vessels or offshore units; the
effect of the Dampier Spirit FSO contract extension on the
Partnership's cash flow from vessel operations; 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; 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; failure to complete the Partnership's acquisition of
Logitel; failure by the Partnership to secure financing on the two
FAU newbuildings and secure a charter contract for the second FAU
newbuilding; change in exploration, production and storage of
offshore oil and gas, either generally or in particular regions
that would impact the expected future growth in the floating
accommodation and services rig market; delays in the commencement
of time-charters; the inability to successfully complete the
operational testing of the HiLoad DP unit; actual results of the
new HiLoad DP unit designs; failure of Teekay Corporation to offer
to the Partnership additional vessels or of Sevan, 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, 2013. 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.Investor Relations enquiriesRyan
Hamilton+1 (604) 609-6442www.teekayoffshore.com
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