Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-197053
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 26, 2014)
6,704,888 Common Units
Representing Limited Partner Interests
Teekay Offshore Partners L.P.
We are selling 6,704,888 of our common units, representing limited partner interests, directly to certain purchasers in a privately negotiated
transaction pursuant to this prospectus supplement at a price of $26.10 per common unit. We are not paying underwriting discounts or commissions, so the net proceeds to us, including from our general partners capital contribution to maintain
its 2% general partner interest in us, and after deducting estimated offering expenses, will be approximately $178.4 million.
Our common
units are listed on the New York Stock Exchange under the symbol TOO. The last reported sale price of our common units on the New York Stock Exchange on November 26, 2014 was $27.10 per common unit.
Investing in our common units involves risks. Please read Risk Factors beginning on
page S-2 of the this prospectus supplement and page 3 of the accompanying prospectus before you make an investment in our common units.
Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus are truthful or complete. Any representation to the
contrary is a criminal offense.
We anticipate delivering the common units on or about December 1, 2014.
November 28, 2014
TABLE OF CONTENTS
Prospectus Supplement
Base Prospectus
S-i
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement, which describes the specific terms of this offering. The second
part is the accompanying base prospectus, which gives more general information, some of which may not apply to this offering. Generally, when we refer to the prospectus, we are referring to both parts combined. If information in the
prospectus supplement conflicts with information in the accompanying base prospectus, you should rely on the information in this prospectus supplement.
Any statement made in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus supplement or in any other subsequently filed document that is also incorporated by reference into this prospectus
modifies or supersedes that statement. Any statement so modified or superseded will be deemed not to constitute a part of this prospectus except as so modified or superseded.
You should rely only on the information contained in this prospectus, any related free writing prospectus and the documents incorporated by
reference into this prospectus. Neither we nor any other person have authorized anyone else to give you different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We are not
offering these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus or any free writing prospectus, as well as the information we previously filed with the U.S.
Securities and Exchange Commission (or SEC) that is incorporated by reference into this prospectus, is accurate as of any date other than its respective date. We will disclose material changes in our affairs in an amendment to
this prospectus, a free writing prospectus or a future filing with the SEC incorporated by reference in this prospectus.
Unless
otherwise indicated, references in this prospectus to Teekay Offshore Partners, the Partnership, we, us and our and similar terms refer to Teekay Offshore Partners L.P. and/or one or more
of its subsidiaries, except that those terms, when used in this prospectus in connection with the common units described herein, shall mean specifically Teekay Offshore Partners L.P. References in this prospectus to Teekay Corporation
refer to Teekay Corporation and/or any one or more of its subsidiaries.
Unless otherwise indicated, all references in this prospectus to
dollars and $ are to, and amounts are presented in, U.S. Dollars, and financial information presented in this prospectus is prepared in accordance with accounting principles generally accepted in the United States (or
GAAP).
You should read carefully this prospectus, any related free writing prospectus, and the additional information described
under the headings Where You Can Find More Information and Incorporation of Documents by Reference.
S-1
RISK FACTORS
Before investing in our securities, you should carefully consider all of the information included or incorporated by reference into this
prospectus. Although many of our business risks are comparable to those of a corporation engaged in a similar business, limited partner interests are inherently different from the capital stock of a corporation. When evaluating an investment in our
common units, you should carefully consider all information included in this prospectus, including those risks discussed under the caption Risk Factors in our latest Annual Report on Form 20-F filed with the SEC, which are
incorporated by reference into this prospectus, and information included in any applicable prospectus supplement.
If any of these risks
were to occur, our business, financial condition, operating results or cash flows could be materially adversely affected. In that case, we might be unable to pay distributions on our common units, the trading price of our common units could decline,
and you could lose all or part of your investment.
S-2
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus information that we file with the SEC. This means that we can
disclose important information to you without actually including the specific information in this prospectus by referring you to other documents filed separately with the SEC. The information incorporated by reference is an important part of this
prospectus. Information that we later provide to the SEC, and which is deemed to be filed with the SEC, automatically will update information previously filed with the SEC, and may replace information in this prospectus.
We incorporate by reference into this prospectus the documents listed below:
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our Annual Report on Form 20-F for the fiscal year ended December 31, 2013; |
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our Reports on Form 6-K furnished to the SEC on May 19, 2014, August 26, 2014, and November 24, 2014, and our Amendment No. 1 to Report on Form 6-K/A furnished to the SEC on October 17,
2014; |
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all subsequent Reports on Form 6-K furnished to the SEC prior to the termination of this offering that we identify in such Reports as being incorporated by reference into the registration statement of which this
prospectus is a part; and |
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the description of our common units contained in our Registration Statement on Form 8-A/A filed on May 7, 2013, including any subsequent amendments or reports filed for the purpose of updating such description.
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These reports contain important information about us, our financial condition and our results of operations.
You may obtain any of the documents incorporated by reference in this prospectus from the SEC through its public reference facilities or its
website at the addresses provided above. You also may request a copy of any document incorporated by reference in this prospectus (excluding any exhibits to those documents, unless the exhibit is specifically incorporated by reference in this
document), at no cost, by visiting our internet website at www.teekayoffshore.com, or by writing or calling us at the following address:
Teekay Offshore Partners L.P.
4th
Floor, Belvedere Building,
69 Pitts Bay Road
Hamilton HM 08, Bermuda
Attn:
Corporate Secretary
(441) 298-2530
You should rely only on the information incorporated by reference or provided in this prospectus or any free writing prospectus. We have not
authorized anyone else to provide you with any information. You should not assume that the information incorporated by reference or provided in this prospectus or any free writing prospectus is accurate as of any date other than the date on the
front of each document. The information contained in our website is not part of this prospectus.
USE OF
PROCEEDS
We expect to receive net proceeds of approximately $178.4 million from the sale of common units we are offering
(including from our general partners related capital contribution to maintain its 2% general partner interest in us), after deducting estimated offering expenses payable by us.
We intend to use the net proceeds from this offering, and the related capital contribution by our general partner, for general partnership
purposes, including funding newbuilding installments, capital conversion projects and the future acquisitions of vessels from Teekay Corporation or third parties.
S-3
CAPITALIZATION
The following table sets forth our capitalization, as of September 30, 2014, on a historical basis and on an as adjusted basis to give
effect to this offering and the related capital contribution by our general partner to maintain its 2% general partner interest in us.
The historical data in the table is derived from, and should be read in conjunction with, our historical financial statements, including
accompanying notes, and the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations from our 2013 Annual Report and our Report on Form 6-K for the three months ended September 30,
2014, each of which is incorporated by reference herein.
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As of September 30, 2014 |
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Actual |
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As Adjusted |
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(in thousands) |
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Total cash and cash equivalents |
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$ |
224,566 |
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$ |
224,566 |
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Long-term debt, including current portion |
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2,587,643 |
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2,409,224 |
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Equity: |
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Non-controlling interests |
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44,970 |
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44,970 |
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Partners equity |
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Limited partnerscommon units (85.7 million units issued and outstanding at September 30, 2014) |
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499,155 |
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674,003 |
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Limited partnerspreferred units (6.0 million units issued and outstanding at September 30, 2014) |
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144,800 |
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144,800 |
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General Partner |
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18,891 |
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22,462 |
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Total capitalization |
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$ |
3,295,459 |
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$ |
3,295,459 |
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S-4
PRICE RANGE OF COMMON UNITS AND DISTRIBUTIONS
Our common units are listed for trading on the New York Stock Exchange under the symbol TOO.
The following table sets forth, for the periods indicated, the high and low sales price per common unit, as reported on the New York Stock
Exchange, and the amount of quarterly cash distributions declared per unit. The closing sale price of our common units on the New York Stock Exchange on November 26, 2014 was $27.10 per common unit.
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Price Ranges |
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Quarterly Cash |
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High |
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Low |
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Distributions(1) |
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Years Ended |
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December 31, 2013 |
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$ |
36.09 |
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$ |
26.17 |
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December 31, 2012 |
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30.14 |
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24.55 |
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December 31, 2011 |
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31.50 |
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22.01 |
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December 31, 2010 |
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29.92 |
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16.89 |
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December 31, 2009 |
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20.15 |
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9.44 |
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Quarters Ended |
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December 31, 2014(2) |
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$ |
33.77 |
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$ |
24.84 |
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September 30, 2014 |
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36.44 |
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32.66 |
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$ |
0.5384 |
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June 30, 2014 |
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37.46 |
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32.41 |
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0.5384 |
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March 31, 2014 |
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33.46 |
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30.87 |
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0.5384 |
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December 31, 2013 |
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34.84 |
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29.24 |
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0.5384 |
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September 30, 2013 |
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36.09 |
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30.31 |
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0.5253 |
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June 30, 2013 |
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33.96 |
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28.71 |
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0.5253 |
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March 31, 2013 |
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30.81 |
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26.17 |
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0.5253 |
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December 31, 2012 |
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28.25 |
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24.55 |
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0.5125 |
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September 30, 2012 |
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29.60 |
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27.18 |
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0.5125 |
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June 30, 2012 |
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29.79 |
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26.31 |
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0.5125 |
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March 31, 2012 |
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30.14 |
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26.88 |
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0.5125 |
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Months Ended |
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November 30, 2014(3) |
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$ |
30.21 |
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$ |
25.19 |
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October 31, 2014 |
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33.77 |
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24.84 |
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September 30, 2014 |
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35.37 |
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33.06 |
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August 31, 2014 |
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35.97 |
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32.66 |
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July 31, 2014 |
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36.44 |
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33.25 |
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June 30, 2014 |
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37.46 |
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34.66 |
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May 31, 2014 |
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36.74 |
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33.79 |
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(1) |
Distributions are shown for the quarter with respect to which they were declared. Cash distributions are declared and paid within 45 days following the close of each quarter. |
(2) |
Period beginning October 1, 2014 and ending November 26, 2014. |
(3) |
Period beginning November 1, 2014 and ending November 26, 2014. |
S-5
PLAN OF DISTRIBUTION
We are selling 6,704,888 common units, representing limited partner interests, directly to specified purchasers. We have entered into a Common
Unit Purchase Agreement, dated as of November 24, 2014, with such purchasers relating to the sale of these common units.
Subject to
the terms and conditions of the Common Unit Purchase Agreement, on the closing date, we will issue the common units to the purchasers and we will receive gross proceeds (including from our general partners related capital contribution to
maintain its 2% general partner interest in us but before expenses) in the amount of $178.6 million. We estimate that the expenses of this offering payable by us will be approximately $150,000.
The common units were offered directly to the purchasers without a placement agent, underwriter, broker or dealer.
We currently anticipate that the closing of the sale of such common units will take place on or about December 1, 2014.
The transfer agent for our common units is Computershare Trust Company, N.A. Our common units are listed on the New York Stock Exchange under
the symbol TOO.
EXPENSES
The following table sets forth costs and expenses we expect to incur in connection with the issuance of the securities covered by this
prospectus supplement. All amounts are estimated.
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Printing costs |
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$ |
10,000 |
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Legal fees and expenses |
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$ |
100,000 |
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Accounting fees and expenses |
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$ |
30,000 |
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Transfer agent fees |
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$ |
10,000 |
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Total |
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$ |
150,000 |
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S-6
$500,000,000
Teekay Offshore Partners L.P.
Common Units Representing Limited Partner Interests
We may offer
from time to time common units, which represent limited partnership interests in Teekay Offshore Partners L.P. The common units offered by this prospectus will have an aggregate offering price of up to $500,000,000.
This prospectus describes some of the general terms that may apply to our common units. Each time we sell our common units, the information
relating to a specific offering will be set forth in an amendment to the registration statement of which this prospectus is a part, or in a supplement to this prospectus, or may be set forth in one or more documents incorporated by reference in this
prospectus.
We may offer and sell our common units to or through one or more underwriters, dealers and agents, or directly to purchasers,
or through other means, on a continuous or delayed basis. If any underwriters are involved in the sale of any securities offered by this prospectus and any prospectus supplement, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or may be calculable from the information set forth, in the applicable prospectus supplement.
You should read this prospectus and any prospectus supplement carefully before you invest in our common units. This prospectus may not be used
to offer and sell our common units unless accompanied by a prospectus supplement.
Our common units are traded on the New York Stock
Exchange under the symbol TOO. On June 25, 2014, the last reported sale price of our common units on the New York Stock Exchange was $37.03 per unit.
Investing in
our common units involves a high degree of risk. In addition, limited partnerships are inherently different than corporations. You should carefully consider the section entitled Forward-Looking Statements contained on page 1 and
each of the factors described under Risk Factors beginning on page 3 of this prospectus before you make an investment in our common units.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this
prospectus is June 26, 2014
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus, any prospectus supplement and the documents incorporated by reference
into this prospectus. We have not authorized anyone else to give you different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We are not offering these securities in any
jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus or any prospectus supplement, as well as the information we previously filed or hereafter file with the U.S. Securities and Exchange
Commission (or SEC) that is incorporated by reference into this prospectus, is accurate as of any date other than its respective date. We will disclose material changes in our affairs in an amendment to this prospectus, a prospectus
supplement or a future filing with the SEC incorporated by reference in this prospectus.
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form F-3 that we have filed with the SEC using a shelf registration
process. Under this shelf registration process, we may sell from time to time our common units described in this prospectus in one or more offerings up to an aggregate offering price of $500,000,000. This prospectus generally describes us and the
common units we may offer. Each time we offer common units with this prospectus, we will provide this prospectus and a prospectus supplement that will describe, among other things, the specific amounts and prices of the common units being offered
and the terms of the offering. The prospectus supplement may also add to, update or change information in this prospectus. If information varies between this prospectus and any prospectus supplement, you should rely on the information in the
prospectus supplement.
You should rely only on the information contained in this prospectus, any prospectus supplement and the documents
incorporated by reference herein and therein. We have not authorized anyone to provide you with different information. This prospectus may only be used where it is legal to sell these common units. You should not assume that the information
contained in this prospectus, or in any prospectus supplement, is accurate as of any date other than its date regardless of the time of delivery of the prospectus or prospectus supplement or any sale of our common units. Our business, financial
condition, results of operations and prospects, as well as other information, may have changed since such dates.
Unless otherwise
indicated, references in this prospectus to Teekay Offshore Partners, we, us and our and similar terms refer to Teekay Offshore Partners L.P. and/or one or more of its subsidiaries, except that those
terms, when used in this prospectus in connection with the common units described herein, shall mean specifically Teekay Offshore Partners L.P. References in this prospectus to Teekay Corporation refer to Teekay Corporation and/or any
one or more of its subsidiaries.
Unless otherwise indicated, all references in this prospectus to dollars and $
are to, and amounts are presented in, U.S. Dollars, and financial information presented in this prospectus is prepared in accordance with accounting principles generally accepted in the United States (or GAAP).
You should read carefully this prospectus, any prospectus supplement, and the additional information described below under the headings
Where You Can Find More Information and Incorporation of Documents by Reference.
FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in or incorporated by reference into this prospectus and any prospectus
supplements are forward-looking statements. The Private Securities Litigation Reform Act of 1995, as amended, provides a safe harbor for forward-looking statements to encourage companies to provide prospective information
about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. In addition, we and our
representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our
business, and the markets in which we operate. In some cases, you can identify the forward-looking statements by the use of words such as may, will, could, should, would,
expect, plan, anticipate, intend, forecast, believe, estimate, predict, propose, potential, continue or the negative
of these terms or other comparable terminology.
Forward-looking statements are made based upon managements current plans,
expectations, estimates, assumptions and beliefs concerning future events affecting us. Forward-looking statements are subject to risks, uncertainties and assumptions, including those risks discussed in Risk Factors and
Managements Discussion
1
and Analysis of Financial Condition and Results of Operations set forth in other reports we file with the SEC and that are incorporated into this prospectus by reference. The risks,
uncertainties and assumptions involve known and unknown risks and are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. We caution that forward-looking statements are not guarantees and that
actual results could differ materially from those expressed or implied in the forward-looking statements.
We undertake no obligation to
update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to
predict all of these factors. In addition, we cannot assess the effect of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any
forward-looking statement, and accordingly, you should not place undue reliance on forward-looking statements.
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 growing deep water offshore oil regions of the North Sea and Brazil. We were formed in August 2006 by Teekay Corporation (NYSE:TK), a leading provider of marine services to the global oil and gas industries, to further
develop its operations in the offshore market. Our growth strategy focuses on expanding our fleet of shuttle tankers, floating storage and offtake (or FSO) units, floating production, storage and offloading (or FPSO) units and towage
tankers under long-term, fixed-rate time charters. We intend to continue our practice of generally acquiring shuttle tankers, FSO units, FPSO units and towage tankers as needed for approved projects only after the long-term charters for the projects
have been awarded to us, rather than ordering vessels on a speculative basis. We have entered into and may enter into additional joint ventures and partnerships with companies that may provide increased access to these opportunities or we may engage
in vessel or business acquisitions. We seek to leverage the expertise, relationships and reputation of Teekay Corporation and its affiliates to pursue these growth opportunities in the offshore sectors and may consider other opportunities to which
our competitive strengths are well suited. We have rights to participate in certain other FPSO, shuttle tanker and other opportunities that may be provided by Teekay Corporation or other entities. Our operating fleet operates under medium to
long-term, stable contracts and we are structured as a publicly-traded master limited partnership. Teekay Corporation indirectly owns and controls our general partner and beneficially owns a 27.9% limited partner interest in us, including a 2%
general partner interest.
Our operations are conducted through, and our operating assets are owned by, our subsidiaries. Our general
partner, Teekay Offshore GP L.L.C., a Marshall Islands limited liability company, has an economic interest in us and manages our operations and activities. Our general partner does not receive any management fee or other compensation in connection
with its management of our business, but it is entitled to be reimbursed for all direct and indirect expenses incurred on our behalf. Pursuant to services agreements between us and our subsidiaries, on the one hand, and other subsidiaries of Teekay
Corporation, on the other hand, the Teekay Corporation subsidiaries provide to us substantially all of our administrative services and to our subsidiaries substantially all of their strategic, business development, advisory, ship management,
technical and administrative services.
We are a limited partnership organized under the laws of the Republic of The Marshall Islands. Our
principal executive offices are located at 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08, Bermuda, and our phone number is (441) 298-2530. Our website address is www.teekayoffshore.com. The information contained in our
website is not part of this prospectus.
2
RISK FACTORS
Before investing in our common units, you should carefully consider all of the information included or incorporated by reference into this
prospectus. Although many of our business risks are comparable to those of a corporation engaged in a similar business, limited partner interests are inherently different from the capital stock of a corporation. When evaluating an investment in any
of our common units, you should carefully consider the following risk factors together with all other information included in this prospectus, including those risks discussed under the caption Risk Factors in our latest Annual Report on
Form 20-F filed with the SEC, which are incorporated by reference into this prospectus, and information included in any applicable prospectus supplement.
If any of these risks were to occur, our business, financial condition, operating results or cash flows could be materially adversely
affected. In that case, we might be unable to pay distributions on our common units, the trading price of our common units could decline, and you could lose all or part of your investment.
In addition to the following risk factors, please read Material United States Federal Income Tax Considerations in this
prospectus for a more complete discussion of expected material U.S. federal income tax consequences of owning and disposing of our common units.
Risks Inherent in an Investment in our Common Units
Our partnership agreement limits our general partners fiduciary duties to our unitholders and restricts the remedies available to unitholders for
actions taken by our general partner.
Our partnership agreement contains provisions that restrict the standards to which our
general partner would otherwise be held by Marshall Islands law. For example, our partnership agreement:
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permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Where our partnership agreement permits, our general partner may consider only
the interests and factors that it desires, and in such cases it has no duty or obligation to give any consideration to any interest of, or factors affecting us, our affiliates or our unitholders. Decisions made by our general partner in its
individual capacity are made by its sole owner, Teekay Corporation, and not by the board of directors of our general partner. Examples include the exercise of its call right, its voting rights with respect to the common units it owns, its
registration rights and its determination whether to consent to any merger or consolidation of the partnership; |
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provides that our general partner is entitled to make other decisions in good faith if it reasonably believes that the decision is in our best interests (which definition of good faith does not apply to the
contractual duty of good and fair dealing we owe to holders of our 7.25% Series A Cumulative Redeemable Preferred Units (the Series A Preferred Units)); |
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generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of common
unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be fair and reasonable to us and that, in determining whether a transaction or resolution is
fair and reasonable, our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us; and |
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provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners for any acts or omissions unless there has been a final and non-appealable judgment
entered by a court of competent jurisdiction determining that the general partner or those other persons acted in bad faith or engaged in fraud, willful misconduct or gross negligence. |
In order to become a limited partner of our partnership, a common unitholder agrees to be bound by the provisions in the partnership
agreement, including the provisions discussed above.
3
Fees and cost reimbursements, which our general partner determines for services provided to us, are
substantial and reduce our cash available for distribution to our unitholders.
Prior to making any distribution to unitholders, we
pay fees for services provided to us and our operating subsidiaries by certain subsidiaries of Teekay Corporation, and we reimburse our general partner for all expenses it incurs on our behalf. These fees are negotiated on our behalf by our general
partner, and our general partner also determines the amounts it is reimbursed. These fees and expenses include all costs incurred in providing certain advisory, ship management, technical and administrative services to us and our operating
subsidiaries. The payment of fees to Teekay Corporation and reimbursement of expenses to our general partner could adversely affect our ability to pay cash distributions to unitholders.
Our Series A Preferred Units rank senior to our common units, and we are unable to make any distribution to our common unitholders unless full
cumulative distributions are made on our Series A Preferred Units.
On April 30, 2013, we issued 6,000,000 of our Series A
Preferred Units with a liquidation preference of $25.00 per unit, and we may issue additional Series A Preferred Units or other senior securities in the future. The Series A Preferred Units represent perpetual equity interests in us and
rank senior to our common units. Distributions on the Series A Preferred Units are cumulative from the date of original issue and are payable quarterly in arrears on the 15th day of February, May, August and November of each year, when, as and if
declared by the board of directors of our general partner. No distribution may be declared or paid or set apart for payment on the common units, or any other junior securities, unless full cumulative distributions have been or contemporaneously are
being paid or provided for on all outstanding Series A Preferred Units and any parity securities through the most recent respective distribution payment dates.
Our general partner, which is owned and controlled by Teekay Corporation, makes all decisions on our behalf, subject to the limited voting rights of our
unitholders.
Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting
our business and, therefore, limited ability to influence managements decisions regarding our business. Unitholders did not elect our general partner or its board of directors and have no right to elect our general partner or its board of
directors on an annual or other continuing basis, subject to the limited rights of the holders of Series A Preferred Units to elect one director in the event that six quarterly distributions payable on the Series A Preferred Units are in
arrears. Teekay Corporation, which owns and controls our general partner, appoints our general partners board of directors. Our general partner makes all decisions on our behalf. If the unitholders are dissatisfied with the performance of our
general partner, they have little ability to remove our general partner. As a result of these limitations, the price at which the common units trade could be diminished because of the absence or reduction of a takeover premium in the trading price.
The vote of the holders of at least 66-2/3% of all outstanding common units voting together as a single class is required to remove the
general partner. As of June 1, 2014, Teekay Corporation beneficially owned a 27.9% limited partner interest in us, in addition to its 2% general partner interest.
Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.
Our partnership agreement restricts unitholders voting rights by providing that any units held by a person that owns 20% or more of any
class or series of units then outstanding, other than our general partner, its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter.
This loss of voting rights does not apply to the Series A Preferred Units. Our partnership agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other
provisions limiting the unitholders ability to influence the manner or direction of management.
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The control of our general partner may be transferred to a third party without unitholder consent.
On or after December 31, 2016, our general partner may transfer its general partner interest to a third party in a merger or
in a sale of all or substantially all of its assets without the consent of the unitholders. In addition, our partnership agreement does not restrict the ability of the members of our general partner from transferring their respective membership
interests in our general partner to a third party. In the event of any such transfer, the new members of our general partner would be in a position to replace the board of directors and officers of our general partner with their own choices and to
control the decisions taken by the board of directors and officers.
In establishing cash reserves, our general partner may reduce the amount of
cash available for distribution to unitholders.
Our partnership agreement requires our general partner to deduct from our
available cash reserves that it determines are necessary to fund our future operating expenditures. These reserves affect the amount of cash available for distribution by us to our unitholders. In addition, our partnership agreement requires our
general partner each quarter to deduct from operating surplus estimated maintenance capital expenditures, as opposed to actual expenditures, which could reduce the amount of available cash for distribution.
We can borrow money to pay distributions, which would reduce the amount of credit available to operate our business.
Our partnership agreement allows us to make working capital borrowings to pay distributions. Accordingly, we can make distributions on all our
units even though cash generated by our operations may not be sufficient to pay such distributions. Any working capital borrowings by us to make distributions may reduce the amount of working capital borrowings we can make for operating our
business.
Unitholders may have liability to repay distributions.
Under certain circumstances, unitholders may have to repay amounts wrongfully distributed to them. Under the Marshall Islands Limited
Partnership Act (or Marshall Islands Act), we may not make a distribution to unitholders to the extent that, at the time of the distribution, after giving effect to the distribution, all of our liabilities, other than liabilities to our
partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of ours, exceed the fair value of our assets, except that the fair value of property that is subject to a
liability for which the recourse of creditors is limited shall be included in our assets only to the extent that the fair value of that property exceeds that liability. Marshall Islands law provides that for a period of three years from the date of
the impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Marshall Islands law will be liable to the limited partnership for the distribution amount. Purchasers of
units who become limited partners are liable for the obligations of the transferring limited partner to make contributions to the partnership that are known to the purchaser at the time it became a limited partner and for unknown obligations if the
liabilities could be determined from the partnership agreement.
We may issue additional equity securities without unitholder approval, which would
dilute their ownership interests.
Our general partner, without the approval of our unitholders, may cause us to issue an unlimited
number of additional common units or other equity securities of equal or senior rank. The issuance by us of additional common units or other equity securities will have the following effects:
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our unitholders proportionate ownership interest in us will decrease; |
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the amount of cash available for distribution on each unit may decrease; |
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the relative voting strength of each previously outstanding unit may be diminished; |
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the market price of the common units may decline; and |
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the ratio of taxable income to distributions may increase. |
Our general partner has a call right that
may require common unitholders to sell their common units at an undesirable time or price.
If at any time our general partner and
its affiliates hold more than 80% of the then-issued and outstanding partnership securities of any class or series, except for the Series A Preferred Units, our general partner will have the right, which it may assign in whole or in part to any of
its affiliates or to us, to acquire all, but not less than all, of the remaining partnership securities of the class held by unaffiliated persons as of a record date to be selected by our general partner, on at least 10 but not more than 60
days notice. The purchase price in this event is the greater of (x) the average of the daily closing prices of the partnership securities of such class over the 20 trading days preceding the date three days before notice of exercise of
the call right is first mailed and (y) the highest price paid by our general partner or any of its affiliates for partnership securities of such class during the 90-day period preceding the date such notice is first mailed. As a result of our
general partners right to purchase outstanding partnership securities, a holder of partnership securities may have the holders partnership securities purchased at an undesirable time or price. Common unitholders may also incur a tax
liability upon a sale of their units.
Increases in interest rates may cause the market price of our common units to decline.
An increase in interest rates may cause a corresponding decline in demand for equity investments in general, and in particular for yield-based
equity investments such as our common units. Any such increase in interest rates or reduction in demand for our common units resulting from other relatively more attractive investment opportunities may cause the trading price of our common units to
decline.
We have been organized as a limited partnership under the laws of the Republic of The Marshall Islands, which does not have a
well-developed body of partnership law.
Our partnership affairs are governed by our partnership agreement and by the Marshall
Islands Act. The provisions of the Marshall Islands Act resemble provisions of the limited partnership laws of a number of states in the United States, most notably Delaware. The Marshall Islands Act also provides that it is to be applied and
construed to make it uniform with the laws of the State of Delaware and, so long as it does not conflict with the Marshall Islands Act or decisions of the Marshall Islands courts, the non-statutory law (or case law) of the courts of the State of
Delaware is adopted as the law of the Marshall Islands. There have been, however, few, if any, court cases in the Marshall Islands interpreting the Marshall Islands Act, in contrast to Delaware, which has a fairly well-developed body of case law
interpreting its limited partnership statute. Accordingly, we cannot predict whether Marshall Islands courts would reach the same conclusions as Delaware courts. For example, the rights of our unitholders and the fiduciary responsibilities of our
general partner under Marshall Islands law are not as clearly established as under judicial precedent in existence in Delaware. As a result, unitholders may have more difficulty in protecting their interests in the face of actions by our general
partner and its officers and directors than would unitholders of a limited partnership formed in the United States.
Because we are organized under
the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.
We are organized under the laws of the Marshall Islands, and all of our assets are located outside of the United States. Our business is
operated primarily from our offices in Bermuda, Norway and Singapore. In addition, our general partner is a Marshall Islands limited liability company and a majority of its directors and officers are non-residents of the United States, and all or a
substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States if you believe
that your rights have been infringed under securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict you from enforcing a judgment
against our assets or the assets of our general partner or its directors and officers. For more information regarding the relevant laws of the Marshall Islands, please read Service of Process and Enforcement of Civil Liabilities.
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USE OF PROCEEDS
Unless we specify otherwise in any prospectus supplement, we will use the net proceeds from the sale of our common units covered by this
prospectus for general partnership purposes, which may include, among other things:
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paying or refinancing all or a portion of our indebtedness outstanding at the time; and |
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funding working capital, capital expenditures or acquisitions. |
The actual application of
proceeds from the sale of any particular offering of our common units covered by this prospectus will be described in the applicable prospectus supplement relating to the offering.
DESCRIPTION OF COMMON UNITS
General
Our common units represent
limited partner interests in us. The holders of units are entitled to participate in partnership distributions and exercise the rights and privileges available to limited partners under our partnership agreement. For a description of the relative
rights and privileges of holders of our common units and Series A Preferred Units and our general partner in and to partnership distributions, please read Cash Distributions.
Number of Units
The number of our common
units outstanding, and those held by Teekay Corporation, which owns our general partner, are provided in our Annual Report on Form 20-F and in the quarterly reports we provide on Form 6-K.
Exchange Listing
Our common units are
listed on the New York Stock Exchange, where they trade under the symbol TOO.
Transfer Agent and Registrar
Computershare Shareowner Services LLC serves as registrar and transfer agent for our common units.
Transfer of Common Units
By transfer of
common units in accordance with our partnership agreement, each transferee of common units automatically will be admitted as a limited partner with respect to the common units transferred when such transfer and admission is reflected in our books
and records. Our general partner will cause any transfers to be recorded on our books and records no less frequently than quarterly. Each transferee automatically shall be deemed to:
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represent that the transferee has the capacity, power and authority to become bound by our partnership agreement; |
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agree to be bound by the terms and conditions of, and to have executed, our partnership agreement; |
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grants powers of attorney to officers of our general partner and any liquidator of us as specified in our partnership agreement; and |
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give the consents and approvals contained in our partnership agreement. |
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We are entitled to treat the nominee holder of a common unit as the absolute owner. In that case,
the beneficial holders rights are limited solely to those that it has against the nominee holder as a result of any agreement between the beneficial owner and the nominee holder.
Common units are securities and are transferable according to the laws governing transfer of securities. In addition to other rights acquired
upon transfer, the transferor gives the transferee the right to become a limited partner in our partnership for the transferred common units.
THE PARTNERSHIP AGREEMENT
The following is a summary of certain material terms of our partnership agreement, as amended. For additional information, we refer you to our
partnership agreement, a copy of which is incorporated herein by reference. A summary of other important provisions of our partnership agreement and the rights and privileges of our common unitholders is included in our registration statement on
Form 8-A/A as filed with the SEC on May 7, 2013, including any subsequent amendments or reports filed for the purpose of updating such description.
Issuance of Additional Securities
Our
partnership agreement authorizes us to issue an unlimited number of additional partnership securities and rights to buy partnership securities for the consideration and on the terms and conditions determined by our general partner, without the
approval of our unitholders, other than the limited approval rights of the holders of the Series A Preferred Units. Consent of the holders of at least two-thirds of the outstanding Series A Preferred Units is required prior to, among other things,
(a) issuing any parity securities if the cumulative distributions on Series A Preferred Units are in arrears or (b) creating or issuing any senior securities.
We may fund acquisitions through the issuance of additional common units or other equity securities. Holders of any additional common units we
may issue will be entitled to share equally with the then-existing holders of our common units in distributions. In addition, the issuance of additional common units or other equity securities interests may dilute the value of the interests of the
then-existing holders of our common units in our net assets.
In accordance with Marshall Islands law and the provisions of our
partnership agreement, we may also issue additional partnership securities interests that, as determined by our general partner, have special voting or other rights to which our common units or Series A Preferred Units are not entitled.
Our general partners 2% general partner interest entitles it to receive 2% of all quarterly distributions that we make in respect of our
common units prior to liquidation. Upon issuance of certain additional partnership securities (including our common units, but excluding our Series A Preferred Units), our general partner will have the right, but not the obligation, to make
additional capital contributions to the extent necessary to maintain its general partner interest in us at the same percentage level as before the issuance. Our general partners 2% interest in us will thus be reduced if we issue certain
additional partnership securities and our general partner does not elect to maintain its 2% general partner interest. Our general partners 2% interest does not entitle it to receive any portion of distributions made in respect of the Series A
Preferred Units and our general partners interest is not affected by the issuance of Series A Preferred Units. Our general partner and its affiliates also have the right, which it may from time to time assign in whole or in part to any of
its affiliates, to purchase common units or other equity securities whenever, and on the same terms that, we issue those securities to persons other than our general partner and its affiliates, to the extent necessary to maintain its and its
affiliates percentage interest in us, including its interest represented by common units, that existed immediately prior to each issuance. Other holders of common units do not have similar preemptive rights to acquire additional common units
or other partnership securities.
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Merger, Sale, or Other Disposition of Assets
A merger or consolidation of us requires the consent of our general partner, in addition to the approval of the holders of common units
representing a majority of outstanding common units. However, our general partner will have no duty or obligation to consent to any merger or consolidation and may decline to do so free of any fiduciary duty or obligation whatsoever to us or the
limited partners, including any duty to act in good faith or in the best interests of us or the limited partners; provided, however, that our general partner owes a contractual duty of good faith and fair dealing to holders of the Series A Preferred
Units pursuant to our partnership agreement. In addition, our partnership agreement generally prohibits our general partner, without common unitholder approval, from causing us to sell, exchange, or otherwise dispose of all or substantially all of
our assets. Our general partner may, however, mortgage, pledge, hypothecate, or grant a security interest in all or substantially all of our assets without limited partner approval.
If conditions specified in our partnership agreement are satisfied, our general partner may convert us or any of our subsidiaries into a new
limited liability entity or merge us or any of our subsidiaries into, or convey some or all of our assets to, a newly formed entity if the sole purpose of that merger or conveyance is to effect a mere change in our legal form into another limited
liability entity.
Our limited partners are not entitled to dissenters rights of appraisal under our partnership agreement or
applicable law in the event of a conversion, merger or consolidation, a sale of substantially all of our assets, or any other transaction or event.
Call Right
If at any time our general
partner and its affiliates hold more than 80% of the then-issued and outstanding partnership securities of any class or series, except for the Series A Preferred Units, our general partner will have the right, which it may assign in whole or in part
to any of its affiliates or to us, to acquire all, but not less than all, of the remaining partnership securities of the class or series held by unaffiliated persons as of a record date to be selected by our general partner, on at least 10 but not
more than 60 days notice. The purchase price in this event is the greater of (x) the average of the daily closing prices of the partnership securities of such class or series over the 20 trading days preceding the date three days before
notice of exercise of the call right is first mailed and (y) the highest price paid by our general partner or any of its affiliates for partnership securities of such class or series during the 90-day period preceding the date such notice is
first mailed.
As a result of our general partners right to purchase outstanding partnership securities, a holder of partnership
securities (except for the Series A Preferred Units) may have the holders partnership securities purchased at an undesirable time or price.
Meetings; Voting
Unlike the holders of
common stock in a corporation, the holders of our common units have only limited voting rights on matters affecting our business. They have no right to elect our general partner (who manages our operations and activities) or the directors of our
general partner on an annual or other continuing basis. On those matters that are submitted to a vote of common unitholders, each record holder of a common unit may vote according to the holders percentage interest of all common units entitled
to vote on such matter, although additional limited partner interests having special voting rights could be issued.
Holders of the Series
A Preferred Units generally have no voting rights. However, the consent of the holders of at least two-thirds of the outstanding Series A Preferred Units is required prior to (a) any amendment to our partnership agreement that would have a
material adverse effect on the existing terms of the Series A Preferred Units, (b) issuing any parity securities if the cumulative distributions on Series A Preferred Units are in arrears or (c) creating or issuing any senior securities.
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Except as described below regarding a person or group owning 20% or more of any class or series
of limited partner interests then outstanding, limited partners as of the record date will be entitled to notice of, and to vote at, any meetings of our limited partners and to act upon matters for which approvals by the holders of such class or
series of limited partner interests may be solicited.
Any action that is required or permitted to be taken by our limited partners, or
any applicable class or series thereof, may be taken either at a meeting of the applicable limited partners or without a meeting if consents in writing describing the action so taken are signed by holders of the number of limited partner interests
necessary to authorize or take that action at a meeting. Meetings of our limited partners may be called by our general partner or by limited partners owning at least 20% of the outstanding limited partner interests of the class or series for which a
meeting is proposed. Limited partners may vote either in person or by proxy at meetings. The holders of a majority of the outstanding limited partner interests of the class or series for which a meeting has been called, represented in person or by
proxy, will constitute a quorum unless any action by the limited partners requires approval by holders of a greater percentage of the limited partner interests, in which case the quorum will be the greater percentage.
If at any time any person or group, other than our general partner and its affiliates, or a direct or subsequently approved transferee of our
general partner or its affiliates or a transferee approved by the board of directors of our general partner, acquires, in the aggregate, beneficial ownership of 20% or more of any class or series of our limited partner interests then outstanding,
that person or group will lose voting rights on all of its limited partner interests, except for the Series A Preferred Units, and such limited partner interests may not be voted on any matter and will not be considered to be outstanding when
sending notices of a meeting of limited partners, calculating required votes, determining the presence of a quorum, or for other similar purposes.
Common units and Series A Preferred Units held in nominee or street name account will be voted by the broker or other nominee in
accordance with the instruction of the beneficial owner unless the arrangement between the beneficial owner and the nominee provides otherwise.
Any notice, demand, request report, or proxy material required or permitted to be given or made to record holders of common units or Series A
Preferred Units under our partnership agreement will be delivered to the record holder by us or by our transfer agent.
Registration Rights
Under our partnership agreement, we have agreed to register for resale under the U.S. Securities Act of 1933 (the Securities Act) and
applicable state securities laws any common units or other partnership securities proposed to be sold by our general partner or any of its affiliates or their assignees if an exemption from the registration requirements is not otherwise available or
advisable. These registration rights continue for two years following any withdrawal or removal of Teekay Offshore GP L.L.C. as our general partner. We are obligated to pay all expenses incidental to the registration, excluding underwriting
discounts and commissions.
Summary of Additional Important Provisions of Our Partnership Agreement and Conflicts of Interest Matters
Please also see the summary of important provisions of our partnership agreement and the rights and privileges of our unitholders included in our registration
statement on Form 8-A/A as filed with the SEC on May 7, 2013, including any subsequent amendments or reports filed for the purpose of updating such description. In addition to the partnership agreement summary, the Form 8-A/A also describes
(a) conflicts of interest that may arise as a result of the relationship between our general partner and its affiliates, including Teekay Corporation, on the one hand, and us and our unaffiliated limited partners on the other hand, and
(b) the fiduciary duties our general partner owes us, and possible limitations on those duties. Please read Where You Can Find More Information and Incorporation of Documents by Reference.
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CASH DISTRIBUTIONS
Distribution of Available Cash
General
Within approximately 45 days after the end of each quarter, we distribute all of our available cash to unitholders of record on
the applicable record date.
Available Cash
Available cash generally means, for each fiscal quarter, all cash on hand at the end of the quarter (including our proportionate share of cash
on hand of certain subsidiaries we do not wholly own):
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less the amount of cash reserves (including our proportionate share of cash reserves of certain subsidiaries we do not wholly own) established by our general partner to: |
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provide for the proper conduct of our business (including reserves for future capital expenditures and for our anticipated credit needs); |
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comply with applicable law, any debt instruments, or other agreements; |
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provide funds to pay quarterly distributions on, and to make any redemption payments relating to, the Series A Preferred Units; or |
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provide funds for distributions to our common unitholders and to our general partner for any one or more of the next four quarters; |
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plus all cash on hand (including our proportionate share of cash on hand of certain subsidiaries we do not wholly own) on the date of determination of available cash for the quarter resulting from working capital
borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under our credit agreements and in all cases are used solely for working capital purposes or to pay distributions to partners.
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Series A Preferred Units
As of the date of this prospectus, there are 6.0 million units of our Series A Preferred Units issued and outstanding. Our Series A
Preferred Units rank senior to our common units as to the payment of distributions and amounts payable upon liquidation, dissolution or winding up and have a liquidation preference of $25.00 per unit. Our Series A Preferred Units are entitled to
cumulative distributions from the date of original issue, with distributions being calculated at an annual rate of 7.25% on the stated liquidation preference and payable quarterly in arrears on the 15th day of February, May, August and November of
each year, when, as and if declared by the board of directors of our general partner. At any time on or after April 30, 2018, the Series A Preferred Units may be redeemed, in whole or in part, at a redemption price of $25.00 per unit plus an
amount equal to all accumulated and unpaid distributions thereon to the date of redemption, whether or not declared. No distribution may be declared or paid or set apart for payment on any common units (other than a distribution payable solely in
common units) unless full cumulative distributions have been or contemporaneously are being paid or provided for on all outstanding Series A Preferred Units through the most recent distribution payment date for the Series A Preferred Units. For
additional information about our Series A Preferred Units, please read our Form 8-A filed with the SEC on April 25, 2013.
Minimum Quarterly
Distribution
Common unitholders are entitled under our partnership agreement to receive a quarterly distribution of $0.35 per
unit, or $1.40 per unit per year, to the extent we have sufficient available cash from our operations after we establish cash reserves and pay fees and expenses, including payments to our general partner. Our general partner has the authority to
determine the amount of our available cash for any quarter. This determination, as
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well as all determinations made by our general partner, must be made in good faith. There is no guarantee that we will pay the minimum quarterly distribution on our common units in any quarter,
and we will be prohibited from making any distributions to our common unitholders if it would cause an event of default, or an event of default is existing, under our credit facilities, or if full cumulative distributions have not been paid or are
not contemporaneously being paid or provided for on all outstanding Series A Preferred Units through the most recent distribution payment date for the Series A Preferred Units.
Operating Surplus and Capital Surplus
General
All cash distributed to common unitholders is characterized as either operating surplus or capital
surplus. We treat distributions of available cash from operating surplus differently than distributions of available cash from capital surplus.
Definition of Operating Surplus
Operating surplus, for any period, generally means:
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all of our cash receipts (including our proportionate share of cash receipts of certain subsidiaries we do not wholly own) after the closing of our initial public offering, excluding cash from (a) borrowings, other
than working capital borrowings, (b) sales of equity and debt securities, (c) sales or other dispositions of assets outside the ordinary course of business, (d) termination of interest rate swap agreements, (e) capital
contributions or (f) corporate reorganizations or restructurings (items (a)-(f) are referred to herein as interim capital transactions); plus |
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working capital borrowings (including our proportionate share of working capital borrowings for certain subsidiaries we do not wholly own) made after the end of a quarter but before the date of determination of
operating surplus for the quarter; plus |
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interest paid on debt incurred (including periodic net payments under related interest rate swap agreements) and cash distributions paid on equity securities issued, in each case (and including our proportionate share
of such interest and cash distributions paid by certain subsidiaries we do not wholly own), to finance all or any portion of the conversion or construction, replacement or improvement of a capital asset such as vessels during the period from such
financing until the earlier to occur of the date the capital asset is put into service or the date that it is abandoned or disposed of; plus |
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interest paid on debt incurred (including periodic net payments under related interest rate swap agreements) and cash distributions paid on equity securities issued, in each case (and including our proportionate share
of such interest and cash distributions paid by certain subsidiaries we do not wholly own), to pay the conversion or construction period interest on debt incurred (including periodic net payments under related interest rate swap agreements), or to
pay conversion or construction period distributions on equity issued, to finance the conversion or construction projects described in the immediately preceding bullet; less |
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all of our operating expenditures (including our proportionate share of operating expenditures of certain subsidiaries we do not wholly own) after the closing of our initial public offering and the repayment of working
capital borrowings, but not (a) the repayment of other borrowings, (b) actual maintenance capital expenditures, or expansion capital expenditures or investment capital expenditures, (c) transaction expenses (including taxes) related
to interim capital transactions, (d) any Series A Preferred Unit redemption payments or any funds otherwise used by us to repurchase Series A Preferred Units or (e) distributions other than on our Series A Preferred Units; less
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estimated maintenance capital expenditures and the amount of cash reserves (including our proportionate share of cash reserves of certain subsidiaries we do not wholly own) established by our general partner to provide
funds for future operating expenditures. |
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If a working capital borrowing, which increases operating surplus, is not repaid during the
12-month period following the borrowing, it is deemed repaid at the end of such period, thus decreasing operating surplus at such time. When such working capital borrowing is in fact repaid, it is not treated as a reduction in operating surplus
because operating surplus has been previously reduced by the deemed repayment.
As described above, operating surplus includes a provision
that enables us, if we choose, to distribute as operating surplus up to $15 million of cash we have received or will receive from non-operating sources since the time of our initial public offering, such as asset sales, issuances of securities and
long-term borrowings, that would otherwise be distributed as capital surplus. In addition, the effect of including, as described above, certain cash distributions on equity securities or interest payments on debt in operating surplus is to increase
operating surplus by the amount of any such cash distributions or interest payments. As a result, we may distribute as operating surplus up to the amount of any such cash distributions or interest payments of cash we receive from non-operating
sources.
Capital Expenditures
For purposes of determining operating surplus, maintenance capital expenditures are those capital expenditures required to maintain over the
long term the operating capacity of or the revenue generated by capital assets, and expansion capital expenditures are those capital expenditures that increase the operating capacity of or the revenue generated by capital assets. To the extent,
however, that capital expenditures associated with acquiring or converting an existing or new vessel increase the revenues or the operating capacity of our fleet, those capital expenditures would be classified as expansion capital expenditures.
Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital
expenditures. Investment capital expenditures largely consist of capital expenditures made for investment purposes.
Examples of
investment capital expenditures include traditional capital expenditures for investment purposes, such as purchases of securities, as well as other capital expenditures that might be made in lieu of such traditional investment capital expenditures,
such as the acquisition of a capital asset for investment purposes.
Examples of maintenance capital expenditures include capital
expenditures associated with drydocking a vessel or acquiring or converting an existing or a new vessel to the extent such expenditures are incurred to maintain the operating capacity of or the revenue generated by our fleet. Maintenance capital
expenditures also include interest (and related fees) on debt incurred and distributions on equity issued to finance the conversion or construction of a replacement vessel and paid during the conversion or construction period, which we define as the
period beginning on the date of entry into a binding conversion or construction contract and ending on the earlier of the date that the replacement vessel commences commercial service or the date that the replacement vessel is abandoned or disposed
of. Debt incurred to pay or equity issued to fund conversion or construction period interest payments, and distributions on such equity, are also considered maintenance capital expenditures.
Because maintenance capital expenditures can be very large and vary significantly in timing, the amount of our actual maintenance capital
expenditures may differ substantially from period to period, which could cause similar fluctuations in the amounts of operating surplus, adjusted operating surplus, and available cash for distribution to our common unitholders if we subtracted
actual maintenance capital expenditures from operating surplus each quarter. Accordingly, to eliminate the effect on operating surplus of these fluctuations, our partnership agreement requires that an amount equal to an estimate of the average
quarterly maintenance capital expenditures necessary to maintain the operating capacity of or the revenue generated by our capital assets over the long term be subtracted from operating surplus each quarter, as opposed to the actual amounts spent.
The amount of estimated maintenance capital expenditures deducted from operating surplus is subject to review and change by the board of directors of our general partner at least once a year, provided that any change must be approved by the
boards conflicts committee. The estimate is made at least annually and whenever an event
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occurs that is likely to result in a material adjustment to the amount of our maintenance capital expenditures, such as a major acquisition or the introduction of new governmental regulations
that will affect our fleet. For purposes of calculating operating surplus, any adjustment to this estimate is prospective only.
The use
of estimated maintenance capital expenditures in calculating operating surplus has the following effects:
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it reduces the risk that actual maintenance capital expenditures in any one quarter will be large enough to make operating surplus less than the minimum quarterly distribution to be paid on all the common units for that
quarter and subsequent quarters; |
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it reduces the need for us to borrow under our working capital facility to pay distributions; and |
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it is more difficult for us to raise our distribution on our common units above the minimum quarterly distribution and pay incentive distributions to our general partner. |
Definition of Capital Surplus
Capital surplus generally is generated only by:
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borrowings other than working capital borrowings; |
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sales of debt and equity securities; and |
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sales or other dispositions of assets for cash, other than inventory, accounts receivable and other current assets sold in the ordinary course of business or non-current assets sold as part of normal retirements or
replacements of assets. |
Characterization of Common Unit Cash Distributions
We treat all available cash distributed on our common units as coming from operating surplus until the sum of all available cash distributed
since we began operations equals the operating surplus as of the most recent date of determination of available cash. We treat any amount distributed on our common units in excess of operating surplus, regardless of its source, as capital surplus.
As described above, operating surplus does not reflect actual cash on hand that is available for distribution to our common unitholders. For example, it includes a provision that enables us, if we choose, to distribute as operating surplus up to $15
million of cash we have received or will receive from non-operating sources since the time of our initial public offering, such as asset sales, issuances of securities and long-term borrowings that would otherwise be distributed as capital surplus.
We do not anticipate that we will make any distributions on our common units from capital surplus.
Distributions of Available Cash From Operating
Surplus
We make distributions of available cash from operating surplus in the following manner:
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first, 98% to all common unitholders, pro rata, and 2% to our general partner, until we distribute for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter; and
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thereafter, in the manner described in Incentive Distribution Rights below. |
The
percentage interests set forth above assume that our general partner maintains its 2% general partner interest and has not transferred the incentive distribution rights and that we do not issue additional classes of equity securities.
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Incentive Distribution Rights
Incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of available cash from
operating surplus after the minimum quarterly distribution for our common units and the target distribution levels have been achieved. Our general partner currently holds the incentive distribution rights, but may transfer these rights separately
from its general partner interest. Except for transfers of incentive distribution rights to an affiliate or another entity as part of our general partners merger or consolidation with or into, or sale of all or substantially all of its assets
to such entity, the approval of a majority of our common units (excluding common units held by our general partner and its affiliates), voting separately as a class, generally is required for a transfer of the incentive distributions rights to a
third party prior to December 31, 2016. Any transfer by our general partner of the incentive distribution rights would not change the percentage allocations of quarterly distributions with respect to such rights.
If for any quarter we have distributed available cash from operating surplus to the common unitholders in an amount equal to the minimum
quarterly distribution, then we distribute any additional available cash from operating surplus for that quarter among the common unitholders and our general partner in the following manner:
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first, 98% to all common unitholders, pro rata, and 2% to our general partner, until each common unitholder receives a total of $0.4025 per unit for that quarter (the first target distribution);
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second, 85% to all common unitholders, pro rata, and 15% to our general partner, until each common unitholder receives a total of $0.4375 per unit for that quarter (the second target distribution);
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third, 75% to all common unitholders, pro rata, and 25% to our general partner, until each common unitholder receives a total of $0.525 per unit for that quarter (the third target distribution); and
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thereafter, 50% to all common unitholders, pro rata, and 50% to our general partner. |
The
percentage interests set forth above assume that our general partner maintains its 2% general partner interest and has not transferred the incentive distribution rights and that we do not issue additional classes of equity securities.
Percentage Allocations of Available Cash From Operating Surplus
The following table illustrates the percentage allocations of the additional available cash from operating surplus between the common
unitholders and our general partner up to the various target distribution levels. The amounts set forth under Marginal Percentage Interest in Distributions are the percentage interests of the common unitholders and our general partner in
any available cash from operating surplus we distribute up to and including the corresponding amount in the column Total Quarterly Distribution Target Amount, until available cash from operating surplus we distribute reaches the next
target distribution level, if any. The percentage interests shown for the common unitholders and our general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum
quarterly distribution. The percentage interests shown for our general partner include its 2% general partner interest and assume our general partner has contributed any capital necessary to maintain its 2% general partner interest and has not
transferred the incentive distribution rights.
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Total Quarterly Distribution Target Amount |
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Marginal Percentage Interest in Distributions |
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Common Unitholders |
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General Partner |
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Minimum Quarterly Distribution |
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$0.35 |
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98 |
% |
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2 |
% |
First Target Distribution |
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up to $0.4025 |
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98 |
% |
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2 |
% |
Second Target Distribution |
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above $0.4025 up to $0.4375 |
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85 |
% |
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15 |
% |
Third Target Distribution |
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above $0.4375 up to $0.525 |
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75 |
% |
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25 |
% |
Thereafter |
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above $0.525 |
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50 |
% |
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50 |
% |
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Distributions From Capital Surplus
How Distributions From Capital Surplus Are Made
We make distributions of available cash from capital surplus, if any, in the following manner:
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first, 98% to all common unitholders, pro rata, and 2% to our general partner, until we distribute for each common unit an amount of available cash from capital surplus equal to the initial public offering price of our
common units; and |
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thereafter, we make all distributions of available cash from capital surplus as if they were from operating surplus. |
The preceding paragraph is based on the assumption that our general partner maintains its 2% general partner interest and that we do not issue
additional classes of equity securities.
Effect of a Distribution From Capital Surplus
Our partnership agreement treats a distribution of capital surplus on our common units as the repayment of the initial unit price from our
initial public offering on December 19, 2006, which is a return of capital. Each time a distribution of capital surplus on our common units is made, the minimum quarterly distribution for the common units and the target distribution levels will
be reduced in the same proportion as the distribution had to the fair market value of the common units prior to the announcement of the distribution. Because distributions of capital surplus will reduce the minimum quarterly distribution, after any
of these distributions are made, it may be easier for our general partner to receive incentive distributions. However, any distribution of capital surplus on our common units before the minimum quarterly distribution is reduced to zero cannot be
applied to the payment of the minimum quarterly distribution.
Once we distribute capital surplus on a common unit issued in our initial
public offering in an amount equal to the initial unit price, we will reduce the minimum quarterly distribution and the target distribution levels for our common units to zero. We will then make all future distributions on our common units from
operating surplus, with 50% being paid to the holders of common units and 50% to our general partner. The percentage interests shown for our general partner include its 2% general partner interest and assume the general partner maintains its 2%
general partner interest and has not transferred the incentive distribution rights.
Adjustment to the Minimum Quarterly Distribution and Target
Distribution Levels
In addition to adjusting the minimum quarterly distribution and target distribution levels for our common units to
reflect a distribution of capital surplus, if we combine our common units into fewer units or subdivide our common units into a greater number of units, we will proportionately adjust:
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the minimum quarterly distribution; |
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the target distribution levels; and |
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the initial unit price. |
For example, if a two-for-one split of the common units should occur,
the minimum quarterly distribution, the target distribution levels and the initial unit price would each be reduced to 50% of its initial level. We will not make any adjustment by reason of the issuance of additional common units for cash or
property.
Distributions of Cash Upon Liquidation
If we dissolve in accordance with our partnership agreement, we will sell or otherwise dispose of our assets in a process called liquidation.
Neither the sale of all or substantially all of our property or business, nor the consolidation or merger of us with or into any other entity, individually or in a series of transactions, will be deemed a liquidation. We will apply any proceeds of
liquidation available for distribution to our general and limited partners in the manner set forth below.
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First, holders of our Series A Preferred Units will have the right to receive the liquidation
preference of $25.00 per unit plus an amount equal to all accumulated and unpaid distributions to the date of payment, whether or not declared.
After such Series A Preferred Unit distribution, if, as of the date three trading days prior to the announcement of the proposed liquidation,
the average closing price of our common units for the preceding 20 trading days (or the current market price) is greater than the initial public offering common unit price (less any prior capital surplus distributions and any prior cash
distributions made on our common units in connection with a partial liquidation), then the proceeds of the liquidation will be applied as follows:
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first, 98% to the common unitholders, pro rata, and 2% to our general partner, until we distribute for each outstanding common unit an amount equal to the current market price of our common units; and |
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thereafter, 50% to all common unitholders, pro rata, 48% to holders of incentive distribution rights and 2% to our general partner. |
If, as of the date three trading days prior to the announcement of the proposed liquidation, the current market price of our common units is
equal to or less than the initial public offering common unit price (less any prior capital surplus distributions and any prior cash distributions made on our common units in connection with a partial liquidation), then the proceeds of the
liquidation will be applied as follows:
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first, 98% to the common unitholders, pro rata, and 2% to our general partner, until we distribute for each outstanding common unit an amount equal to the initial public offering unit price (less any prior capital
surplus distributions and any prior cash distributions made on our common units in connection with a partial liquidation); and |
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thereafter, 50% to all common unitholders, pro rata, 48% to holders of incentive distribution rights and 2% to our general partner. |
The immediately preceding two paragraphs are based on the assumption that our general partner maintains its 2% general partner interest and that we do not
issue additional classes of equity securities.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material U.S. federal income tax considerations that may be relevant to prospective
unitholders and, unless otherwise noted in the following discussion, is the opinion of Perkins Coie LLP, our U.S. counsel, insofar as it relates to matters of U.S. federal income tax law and legal conclusions with respect to those matters. The
opinion of our counsel is dependent on the accuracy of representations made by us to them, including descriptions of our operations contained herein.
This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (or the Code), legislative history,
applicable U.S. Treasury Regulations (or Treasury Regulations), judicial authority and administrative interpretations, all as in effect on the date of this prospectus, and which are subject to change, possibly with retroactive effect, or are
subject to different interpretations. Changes in these authorities may cause the tax consequences to vary substantially from the consequences described below. Unless the context otherwise requires, references in this section to we,
our or us are references to Teekay Offshore Partners L.P.
This discussion is limited to unitholders who hold
their common units as capital assets for tax purposes. This discussion does not address all tax considerations that may be important to a particular unitholder in light of the unitholders circumstances, or to certain categories of unitholders
that may be subject to special tax rules, such as:
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dealers in securities or currencies; |
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traders in securities that have elected the mark-to-market method of accounting for their securities; |
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persons whose functional currency is not the U.S. dollar; |
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persons holding our common units as part of a hedge, straddle, conversion or other synthetic security or integrated transaction; |
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certain U.S. expatriates; |
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financial institutions; |
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persons subject to the alternative minimum tax; |
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persons that actually or under applicable constructive ownership rules own 10% or more of our units; and |
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entities that are tax-exempt for U.S. federal income tax purposes. |
If a partnership
(including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common units, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If
you are a partner of a partnership holding our common units, you should consult your own tax advisor about the U.S. federal income tax consequences of owning and disposing the common units.
No ruling has been or will be requested from the Internal Revenue Service (or IRS) regarding any matter affecting us or our
unitholders. Instead, we will rely on the opinion of Perkins Coie LLP. Unlike a ruling, an opinion of counsel represents only that counsels legal judgment and does not bind the IRS or the courts. Accordingly, the opinions and statements made
herein may not be sustained by a court if contested by the IRS.
This discussion does not address any U.S. estate tax considerations or
tax considerations arising under the laws of any state, local or non-U.S. jurisdiction. Each unitholder is urged to consult its own tax advisor regarding the U.S. federal, state, local and other tax consequences of the ownership or disposition of
our common units.
Election to be Taxed as a Corporation
We have elected to be taxed as a corporation for U.S. federal income tax purposes. As such, unitholders are not directly subject to U.S.
federal income tax on our income, but rather are subject to U.S. federal income tax on distributions received from us and dispositions of units as described below.
United States Federal Income Taxation of U.S. Holders
As used herein, the term U.S. Holder means a beneficial owner of our common units that is, for U.S. federal income tax purposes: (a) a
U.S. citizen or U.S. resident alien (or a U.S. Individual Holder), (b) a corporation or other entity taxable as a corporation, that was created or organized in or under the laws of the United States, any state thereof or the District of
Columbia, (c) an estate whose income is subject to U.S. federal income taxation regardless of its source, or (d) a trust that either is subject to the supervision of a court within the United States and has one or more U.S. persons with
authority to control all of its substantial decisions or has a valid election in effect under applicable Treasury Regulations to be treated as a U. S. person.
Distributions
We have elected to
be taxed as a corporation for U.S. federal income tax purposes. Subject to the discussion of passive foreign investment companies (or PFICs) below, any distributions made by us with respect to our common units to a U.S. Holder generally will
constitute dividends, which may be taxable as ordinary income or qualified dividend income as described in more detail below, to the extent of our current and accumulated
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earnings and profits allocated to the U.S. Holders common units, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits allocated to the
U.S. Holders common units will be treated first as a nontaxable return of capital to the extent of the U.S. Holders tax basis in its common units and thereafter as capital gain, which will be either long term or short term capital gain
depending upon whether the U.S. Holder has held the shares for more than one year. U.S. Holders that are corporations for U.S. federal income tax purposes generally will not be entitled to claim a dividends received deduction with respect to any
distributions they receive from us. For purposes of computing allowable foreign tax credits for U.S. federal income tax purposes, dividends paid with respect to our common units generally will be treated as foreign source income and generally we be
treated as passive category income.
Dividends paid on our common units to a U.S. Holder who is an individual, trust or estate
(or a Non-Corporate U.S. Holder) will be treated as qualified dividend income that is taxable to such Non-Corporate U.S. Holder at preferential capital gain tax rates provided that: (a) our common units are readily tradable
on an established securities market in the United States (such as the New York Stock Exchange on which our common units are traded); (b) we are not classified as a PFIC for the taxable year during which the dividend is paid or the immediately
preceding taxable year (we intend to take the position that we are not now and have never been classified as a PFIC, as discussed below); (c) the Non-Corporate U.S. Holder has owned the common units for more than 60 days in the 121-day period
beginning 60 days before the date on which the common units become ex-dividend; (d) the Non-Corporate U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property; and
(e) certain other conditions are met. There is no assurance that any dividends paid on our common units will be eligible for these preferential rates in the hands of a Non-Corporate U.S. Holder. Any dividends paid on our common units not
eligible for these preferential rates will be taxed as ordinary income to a Non-Corporate U.S. Holder.
Special rules may apply to any
extraordinary dividend paid by us. An extraordinary dividend is, generally, a dividend with respect to a share of common stock if the amount of the dividend is equal to or in excess of 10% of a common stockholders adjusted basis
(or fair market value in certain circumstances) in such common stock. In addition, extraordinary dividends include dividends received within a one year period that, in the aggregate, equal or exceed 20% of a shareholders adjusted tax basis. If
we pay an extraordinary dividend on our common units that is treated as qualified dividend income, then any loss derived by a Non-Corporate U.S. Holder from the sale or exchange of such common units will be treated as
long-term capital loss to the extent of such dividend.
Certain Non-Corporate U.S. Holders are subject to a 3.8% tax on certain investment
income, including dividends. Non-Corporate U.S. Holders should consult their tax advisors regarding the effect, if any, of this tax on their ownership of our common units.
Sale, Exchange or Other Disposition of Common Units
Subject to the discussion of PFICs below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other
disposition of our common units in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holders tax basis in such units. Subject to the discussion of
extraordinary dividends above, such gain or loss generally will be treated as (a) long-term capital gain or loss if the U.S. Holders holding period is greater than one year at the time of the sale, exchange or other disposition, or short
term capital gain or loss otherwise and (b) U.S.-source gain or loss, as applicable, for foreign tax credit purposes. Non-Corporate U.S. Holders may be eligble for preferential rates of U.S. federal income tax in respect of long-term capital
gains. A U.S. Holders ability to deduct capital losses is subject to certain limitations.
Certain Non-Corporate U.S. Holders are
subject to a 3.8% tax on certain investment income, including capital gains from the sale or other disposition of units. Non-Corporate U.S. Holders should consult their tax advisors regarding the effect, if any, of this tax on their disposition of
our common units.
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Consequences of Possible PFIC Classification
A non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be a PFIC in any taxable year in which, after taking into
account the income and assets of the corporation and certain subsidiaries pursuant to a look through rule, either: (a) at least 75% of its gross income is passive income; or (b) at least 50% of the average value of
its assets is attributable to assets that produce or are held for the production of passive income. For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and
rents and royalties (other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business). By contrast, income derived from the performance of services does not constitute
passive income.
There are legal uncertainties involved in determining whether the income derived from our time chartering
activities constitutes rental income or income derived from the performance of services, including legal uncertainties arising from the decision in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), which held that income derived
from certain time chartering activities should be treated as rental income rather than services income for purposes of a foreign sales corporation provision of the Code. However, the IRS stated in an Action on Decision (AOD 2010-01) that it
disagrees with, and will not acquiesce to, the way that the rental versus services framework was applied to the facts in the Tidewater decision, and in its discussion stated that the time charters at issue in Tidewater would be treated
as producing services income for PFIC purposes. The IRSs statement with respect to Tidewater cannot be relied upon or otherwise cited as precedent by taxpayers. Consequently, in the absence of any binding legal authority specifically
relating to the statutory provisions governing PFICs, there can be no assurance that the IRS or a court would not follow the Tidewater decision in interpreting the PFIC provisions of the Code. Nevertheless, based on our and our
subsidiaries current assets and operations, we intend to take the position that we are not now and have never been a PFIC, and our counsel, Perkins Coie LLP, is of the opinion that it is more likely than not that we are not a PFIC based on
applicable law, including the Code, legislative history, published revenue rulings and court decisions, and representations we have made to them regarding the composition of our assets, the source of our income and the nature of our activities and
other operations, including:
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the total payments due to us under each of our time charters and certain of our FPSO contracts are substantially in excess of the current bareboat charter rate for comparable vessels; |
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the income derived from our contracts of affreightment, time chartering activities and certain of our FPSO contracts will be greater than 25% of our total gross income at all relevant times; and |
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the gross value of our vessels servicing our contracts of affreightment, time charters and certain of our FPSO contracts will exceed the gross value of all other assets we own at all relevant times. |
An opinion of counsel represents only that counsels best legal judgment and does not bind the IRS or the courts. Accordingly, the
opinion of Perkins Coie LLP may not be sustained by a court if contested by the IRS. Further, no assurance can be given, however, that we would not constitute a PFIC for any future taxable year if there were to be changes in our or our
subsidiaries assets, income or operations.
As discussed more fully below, if we were to be treated as a PFIC for any taxable year,
a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes a timely and effective election to treat us as a Qualified Electing Fund (a QEF election). As an alternative to making a QEF
election, a U.S. Holder should be able to make a mark-to-market election with respect to our common units, as discussed below.
Taxation of U.S. Holders Making a Timely QEF Election. If a U.S. Holder makes a timely QEF election (an Electing Holder), the
Electing Holder must report each taxable year for U.S. federal income tax purposes the Electing Holders pro rata share of our ordinary earnings and net capital gain, if any, for each taxable year for which we are a PFIC that ends with or
within the Electing Holders taxable year, regardless of whether or not the Electing Holder received distributions from us in that year. Such income inclusions would not be eligible for the
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preferential tax rates applicable to qualified dividend income. The Electing Holders adjusted tax basis in our common units will be increased to reflect taxed but undistributed
earnings and profits. Distributions of earnings and profits that were previously taxed will result in a corresponding reduction in the Electing Holders adjusted tax basis in our common units and will not be taxed again once distributed. An
Electing Holder generally will recognize capital gain or loss on the sale, exchange or other disposition of our common units. A U.S. Holder makes a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with the U.S.
Holders timely filed U.S. federal income tax return (including extensions).
If a U.S. Holder has not made a timely QEF election
with respect to the first year in the U.S.Holders holding period of our common units during which we qualified as a PFIC, the U.S. Holder may be treated as having made a timely QEF election by filing a QEF election with the U.S. Holders
timely filed U.S. federal income tax return (including extensions) and, under the rules of Section 1291 of the Code, a deemed sale election to include in income as an excess distribution (described below) the amount of
any gain that the U.S. Holder would otherwise recognize if the U.S. Holder sold the U.S. Holders common units on the qualification date. The qualification date is the first day of our taxable year in which we qualified as a
qualified electing fund with respect to such U.S. Holder. In addition to the above rules, under very limited circumstances, a U.S. Holder may make a retroactive QEF election if the U.S. Holder failed to file the QEF election documents in
a timely manner. If a U.S. Holder makes a timely QEF election for one of our taxable years, but did not make such election with respect to the first year in the U.S. Holders holding period of our common units during which we qualified as a
PFIC and the U.S. Holder did not make the deemed sale election described above, the U.S. Holder also will be subject to the more adverse rules described below.
A U.S. Holders QEF election will not be effective unless we annually provide the U.S. Holder with certain information concerning our
income and gain, calculated in accordance with the Code, to be included with the U.S. Holders U.S. federal income tax return. We have not provided our U.S. Holders with such information in prior taxable years and do not intend to provide such
information in the current taxable year. Accordingly, U.S. Holders will not be able to make an effective QEF election at this time. If, contrary to our expectations, we determine that we are or will be a PFIC for any taxable year, we will provide
U.S. Holders with the information necessary to make an effective QEF election with respect to our common units.
Taxation of U.S.
Holders Making a Mark-to-Market Election. If we were to be treated as a PFIC for any taxable year and, as we anticipate, our common units were treated as marketable stock, then, as an alternative to making a QEF election,
a U.S. Holder would be allowed to make a mark-to-market election with respect to our common units, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations.
If that election is made for the first year a U.S. Holder holds or is deemed to hold our common units and for which we are a PFIC, the U.S. Holder generally would include as ordinary income in each taxable year that we are a PFIC the excess, if any,
of the fair market value of the U.S. Holders common units at the end of the taxable year over the U.S. Holders adjusted tax basis in the common units. The U.S. Holder also would be permitted an ordinary loss in respect of the excess, if
any, of the U.S. Holders adjusted tax basis in the common units over the fair market value thereof at the end of the taxable year that we are a PFIC, but only to the extent of the net amount previously included in income as a result of the
mark-to-market election. A U.S. Holders tax basis in our common units would be adjusted to reflect any such income or loss recognized. Gain recognized on the sale, exchange or other disposition of our common units in taxable years that we are
a PFIC would be treated as ordinary income, and any loss recognized on the sale, exchange or other disposition of the common units in taxable years that we are a PFIC would be treated as ordinary loss to the extent that such loss does not exceed the
net mark-to-market gains previously included in income by the U.S. Holder. Because the mark-to-market election only applies to marketable stock, however, it would not apply to a U.S. Holders indirect interest in any of our subsidiaries that
were also determined to be PFICs.
If a U.S. Holder makes a mark-to-market election for one of our taxable years and we were a PFIC for a
prior taxable year during which such U.S. Holder held our common units and for which (i) we were not a QEF with respect to such U.S. Holder and (ii) such U.S. Holder did not make a timely mark-to-market election, such
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U.S. Holder would also be subject to the more adverse rules described below in the first taxable year for which the mark-to-market election is in effect and also to the extent the fair market
value of the U.S. Holders common units exceeds the U.S. Holders adjusted tax basis in the common units at the end of the first taxable year for which the mark-to-market election is in effect.
Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election. If we were to be treated as a PFIC for any taxable year, a
U.S. Holder who does not make either a QEF election or a mark-to-market election for that year (a Non-Electing Holder) would be subject to special rules resulting in increased tax liability with respect to (a) any excess
distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common units in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding
taxable years or, if shorter, the Non-Electing Holders holding period for our common units), and (b) any gain realized on the sale, exchange or other disposition of the common units. Under these special rules:
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the excess distribution or gain would be allocated ratably over the Non-Electing Holders aggregate holding period for the common units; |
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the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income in the current
taxable year; |
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the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayers for that year; and |
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an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
Additionally, for each year during which a U.S. Holder owns units, we are a PFIC, and the total value of all PFIC interests that such U.S.
Holder directly or indirectly owns exceeds certain thresholds, such U.S. Holder will be required to file IRS Form 8621 with its annual U.S. federal income tax return to report its ownership of our common units. In addition, if a Non-Electing Holder
who is an individual dies while owning our common units, such Non-Electing Holders successor generally would not receive a step-up in tax basis with respect to such common units.
U.S. Holders are urged to consult their own tax advisors regarding the PFIC rules, including the PFIC annual reporting requirements as well as the
applicability, availability and advisability of, and procedure for, making QEF, Mark-to-Market Elections and other available elections with respect to us, and the U.S. federal income tax consequences of making such elections.
Consequences of Possible Controlled Foreign Corporation Classification
If CFC Unitholders (generally, U.S. Holders who each own, directly, indirectly or constructively, 10% or more of the total combined voting
power of our outstanding units entitled to vote) own directly, indirectly or constructively more than 50% of either the total combined voting power of our outstanding units entitled to vote or the total value of all of our outstanding units, we
generally would be treated as a controlled foreign corporation, or a CFC.
CFC Unitholders are treated as receiving current distributions
of their shares of certain income of the CFC without regard to any actual distributions and are subject to other burdensome U.S. federal income tax and administrative requirements but generally are not also subject to the requirements generally
applicable to owners of a PFIC. In addition, a person who is or has been a CFC Unitholder may recognize ordinary income on the disposition of units of the CFC. Although we do not believe we are or will become a CFC, U.S. persons owning a substantial
interest in us should consider the potential implications of being treated as a CFC Unitholder in the event we become a CFC in the future.
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The U.S. federal income tax consequences to U.S. Holders who are not CFC Unitholders would not
change in the event we become a CFC in the future.
U.S. Return Disclosure Requirements for U.S. Individual Holders
U.S. Individual Holders who hold certain specified foreign financial assets, including stock in a foreign corporation that is not held in an
account maintained by a financial institution, with an aggregate value in excess of $50,000 on the last day of a taxable year, or $75,000 at any time during that taxable year, may be required to report such assets on IRS Form 8938 with their U.S.
federal income tax return for that taxable year. This reporting requirement does not apply to U.S. Individual Holders who report their ownership of our units under the PFIC annual reporting rules described above. Penalties apply for failure to
properly complete and file IRS Form 8938. Investors are encouraged to consult with their own tax advisors regarding the possible application of this disclosure requirement to their investment in our common units.
United States Federal Income Taxation of Non-U.S. Holders
A beneficial owner of our common units (other than a partnership, including any entity or arrangement treated as a partnership for U.S. federal
income tax purposes) that is not a U.S. Holder is a Non-U.S. Holder.
Distributions
In general, a Non-U.S. Holder will not be subject to U.S. federal income tax on distributions received from us with respect to our common units
unless the distributions are effectively connected with the Non-U.S. Holders conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment that the
Non-U.S. Holder maintains in the United States). If a Non-U.S. Holder is engaged in a U.S. trade or business and the distributions are deemed to be effectively connected to that trade or business, the Non-U.S. Holder generally will be subject to
U.S. federal income tax on those distributions in the same manner as it were a U.S. Holder.
Sale, Exchange or Other Disposition of Common Units
In general, a Non-U.S. Holder is not subject to U.S. federal income tax on any gain resulting from the disposition of our common
units unless (a) such gain is effectively connected with the Non-U.S. Holders conduct o a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment that the
Non-U.S. Holder maintains in the United States) or (b) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year in which such disposition occurs and meets certain other requirements.
If a Non-U.S. Holder is engaged in a U.S. trade or business and the disposition of our common units is deemed to be effectively connected to that trade or business, the Non-U.S. Holder generally will be subject to U.S. federal income tax on the
resulting gain in the same manner as if it were a U.S. Holder.
Information Reporting and Backup Withholding
In general, payments of distributions with respect to, or the proceeds of a disposition of, our common units to a Non-Corporate U.S. Holder
will be subject to information reporting requirements. These payments to a Non-Corporate U.S. Holder also may be subject to backup withholding if the Non-Corporate U.S. Holder:
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fails to timely provide an accurate taxpayer identification number; |
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is notified by the IRS that it has failed to report all interest or distributions required to be shown on its U.S. federal income tax returns; or |
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in certain circumstances, fails to comply with applicable certification requirements. |
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Non-U.S. Holders may be required to establish their exemption from information reporting and
backup withholding on payments made to them within the United States, or through a U.S. payor, by certifying their status on IRS Form W-8BEN, W-8ECI or W-8IMY, as applicable.
Backup withholding is not an additional tax. Rather, a unitholder generally may obtain a credit for any amount withheld against its liability
for U.S. federal income tax (and a refund of any amounts withheld in excess of such liability) by accurately completing and timely filing a U.S. federal income tax return with the IRS.
NON-UNITED STATES TAX CONSIDERATIONS
Marshall Islands Tax Considerations
The
following discussion is based upon the opinion of Watson, Farley & Williams LLP, our counsel as to matters of the laws of the Republic of The Marshall Islands, and the current laws of the Republic of The Marshall Islands and is applicable
only to persons who do not reside in, maintain offices in or engage in business in the Republic of The Marshall Islands.
Because we,
Teekay Offshore Operating L.P., a Marshall Islands limited partnership in which we own a 100% limited partnership interest (or OPCO), and our other subsidiaries do not, and we do not expect that we, OPCO or our other subsidiaries will,
conduct business or operations in the Republic of The Marshall Islands, and because all documentation related to this offering has been and will be executed outside of the Republic of The Marshall Islands, under current Marshall Islands law you will
not be subject to Marshall Islands taxation or withholding on distributions, including upon a return of capital, we make to you as a unitholder, so long as you do not reside in, maintain offices in, or engage in business in the Republic of The
Marshall Islands. In addition, you will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership or disposition of our common units, and you will not be required by the Republic of The Marshall Islands to
file a tax return relating to our common units.
It is the responsibility of each unitholder to investigate the legal and tax
consequences, under the laws of pertinent jurisdictions, including the Marshall Islands, of its investment in us. Accordingly, each unitholder is urged to consult its tax counsel or other advisor with regard to those matters. Further, it is the
responsibility of each unitholder to file all state, local and non-U.S., as well as U.S. federal, tax returns that may be required of such unitholder.
Canadian Federal Income Tax Considerations
The following discussion is a summary of the material Canadian federal income tax considerations under the Income Tax Act (Canada) (or
the Canada Tax Act ), as of the date of this prospectus, that we believe are relevant to holders of common units who, for the purposes of the Canada Tax Act and the Canada-United States Tax Convention 1980 (or the Canada-U.S. Treaty )
are, at all relevant times, resident in the United States and entitled to all of the benefits of the Canada-U.S. Treaty and who deal at arms length with us and Teekay Corporation (or U.S. Resident Holders ). This discussion takes into
account all proposed amendments to the Canada Tax Act and the regulations thereunder that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and assumes that such proposed amendments will be
enacted substantially as proposed. However, no assurance can be given that such proposed amendments will be enacted in the form proposed or at all.
We are considered to be a partnership under Canadian federal income tax law and therefore not a taxable entity for Canadian income tax
purposes.
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A U.S. Resident Holder will not be liable to tax under the Canada Tax Act on any income or gains
allocated by us to the U.S. Resident Holder in respect of such U.S. Resident Holders common units, provided that (a) we do not carry on business in Canada for purposes of the Canada Tax Act and (b) such U.S. Resident Holder does not
hold such common units in connection with a business carried on by such U.S. Resident Holder through a permanent establishment in Canada for purposes of the Canada-U.S. Treaty.
A U.S. Resident Holder will not be liable to tax under the Canada Tax Act on any income or gain from the sale, redemption or other disposition
of such U.S. Resident Holders common units, provided that, for purposes of the Canada-U.S. Treaty, such common units do not, and did not at any time in the twelve-month period preceding the date of disposition, form part of the business
property of a permanent establishment in Canada of such U.S. Resident Holder.
We believe that our activities and affairs and the
activities and affairs of OPCO are conducted in such a manner that both we and OPCO are not carrying on business in Canada and that U.S. Resident Holders should not be considered to be carrying on business in Canada for purposes of the Canada Tax
Act or the Canada-U.S. Treaty solely by reason of the acquisition, holding, disposition or redemption of their common units. We intend that this is and continues to be the case, notwithstanding that Teekay Shipping Limited (a subsidiary of Teekay
Corporation that is resident and based in Bermuda) provides certain services to Teekay Offshore Partners L.P. and OPCO and obtains some or all such services under subcontracts with Canadian service providers.
However, although we do not intend to do so, there can be no assurance that the manner in which we and OPCO carry on our respective activities
will not change from time to time as circumstances dictate or warrant in a manner that may cause U.S. Resident Holders to be carrying on business in Canada for purposes of the Canada Tax Act. Further, the relevant Canadian federal income tax law may
change by legislation or judicial interpretation and the Canadian taxing authorities may take a different view than we have of the current law.
If the arrangements we have entered into result in our being considered to carry on business in Canada for purposes of the Canada Tax Act,
U.S. Resident Holders would be considered to be carrying on business in Canada and may be required to file Canadian tax returns and, subject to any relief provided under the Canada-U.S. Treaty, would be subject to taxation in Canada on any income
that is considered to be attributable to the business carried on by us in Canada. The Canada-U.S. Treaty contains a treaty benefit denial rule which may have the effect of denying relief thereunder from Canadian taxation to U.S. Resident Holders in
respect of any income attributable to a business carried on by us in Canada.
It is the responsibility of each U.S. Resident Holder to
investigate the legal and tax consequences, under the laws of pertinent jurisdictions, including Canada, of an investment in us. Accordingly, each prospective U.S. Resident Holder is urged to consult, and depend upon, such unitholders tax
counsel or other advisor with regard to those matters. Further, it is the responsibility of each U.S. Resident Holder to file all state, local and non-U.S., as well as U.S. federal, tax returns that may be required of such unitholder.
PLAN OF DISTRIBUTION
We may sell our common units offered by this prospectus and applicable prospectus supplements from time to time on a continuous or delayed
basis:
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through underwriters or dealers; |
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directly to one or more purchasers or other persons or entities; |
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through a combination of any such methods of sale; or |
25
We may enter into hedging transactions with respect to our common units.
For example, we may:
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enter into transactions involving short sales of shares of our common units by underwriters, brokers or dealers; |
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sell securities short and deliver our common units to close out short positions; |
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enter into option or other types of transactions that require us to deliver our common units to an underwriter, broker or dealer, who will then resell or transfer our common units under this prospectus; or
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loan or pledge our common units to an underwriter, broker or dealer, who may sell the loaned securities or, in the event of default, sell our pledged common units. |
If underwriters are used to sell our common units, we will enter into an underwriting agreement or similar agreement with them at the time of
the sale to them. In that connection, underwriters may receive compensation from us in the form of underwriting discounts or commissions and may also receive commissions from purchasers of our common units for whom they may act as agent. Any such
underwriter, dealer or agent may be deemed to be an underwriter within the meaning of the Securities Act.
The applicable prospectus
supplement relating to our common units will set forth, among other things:
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the offering terms, including the name or names of any underwriters, dealers or agents; |
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the purchase price of our common units and the proceeds to us from such sale; |
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any underwriting discounts, concessions, commissions and other items constituting compensation to underwriters, dealers or agents; |
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any initial public offering price; |
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any discounts or concessions allowed or reallowed or paid by underwriters or dealers to other dealers; and |
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any securities exchanges on which our common units may be listed. |
If underwriters or dealers
are used in the sale, our common units will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more transactions in accordance with the rules of the New York Stock Exchange:
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at a fixed price or prices that may be changed; |
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at market prices prevailing at the time of sale; |
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at prices related to such prevailing market prices; or |
Our common units may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or directly by one or more of such firms. Unless otherwise set forth in an applicable prospectus supplement, the obligations of underwriters or dealers to purchase our common
units will be subject to certain conditions precedent and the underwriters or dealers will be obligated to purchase all our common units if any are purchased. Any public offering price and any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers may be changed from time to time.
26
Our common units may be sold directly by us from time to time, at prevailing market prices or
otherwise. From time to time, Teekay Holdings Limited, a subsidiary of Teekay Corporation, may sell common units representing limited partnership interests in us, at prevailing market prices or otherwise. Our common units may also be sold through
agents designated by us from time to time, at prevailing market prices or otherwise. Any agent involved in the offer or sale of our common units in respect of which this prospectus and a prospectus supplement is delivered will be named, and any
commissions payable by us to such agent will be set forth, in the prospectus supplement. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment.
If so indicated in the prospectus supplement, we will authorize underwriters, dealers or agents to solicit offers from certain specified
institutions to purchase our common units from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be
subject to any conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commissions payable for solicitation of such contracts. The underwriters and other persons soliciting such contracts will have no
responsibility for the validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements
entered into with us to be indemnified by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution by us to payments which they may be required to make. The terms and conditions of such indemnification
will be described in an applicable prospectus supplement.
Underwriters, dealers and agents may be customers of, engage in transactions
with, or perform services for us in the ordinary course of business.
Any underwriters to whom our common units are sold by us for public
offering and sale may make a market in our common units, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of the trading market for
our common units.
Certain persons participating in any offering of our common units may engage in transactions that stabilize, maintain
or otherwise affect the price of our common units offered. In connection with any such offering, the underwriters or agents, as the case may be, may purchase and sell our common units in the open market. These transactions may include over-allotment
and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market
price of our common units and syndicate short positions involve the sale by the underwriters or agents, as the case may be, of a greater number of our common units than they are required to purchase from us in the offering. The underwriters may also
impose a penalty bid, whereby selling concessions allowed to syndicate members or other broker-dealers for our common units sold for their account may be reclaimed by the syndicate if our common units are repurchased by the syndicate in stabilizing
or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of our common units, which may be higher than the price that might otherwise prevail in the open market, and if commenced, may be discontinued at
any time. These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise. These activities will be described in more detail in the applicable prospectus supplement.
SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES
Teekay Offshore Partners L.P. is organized under the laws of the Republic of The Marshall Islands as a limited partnership. Our general
partner is organized under the laws of the Republic of The Marshall Islands as a limited liability company. The Republic of The Marshall Islands has a less developed body of securities laws as compared to the United States and provides protections
for investors to a significantly lesser extent.
27
Most of the directors and officers of our general partner and those of our subsidiaries are
residents of countries other than the United States. Substantially all of our and our subsidiaries assets and a substantial portion of the assets of the directors and officers of our general partner are located outside the United States. As a
result, it may be difficult or impossible for United States investors to effect service of process within the United States upon us, our general partner, our subsidiaries or the directors and officers of our general partner or to realize against us
or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. However, we have expressly submitted to the
jurisdiction of the U.S. federal and New York state courts sitting in the City of New York for the purpose of any suit, action or proceeding arising under the securities laws of the United States or any state in the United States, and we have
appointed Watson, Farley & Williams LLP to accept service of process on our behalf in any such action.
Watson, Farley &
Williams LLP, our counsel as to Marshall Islands law, has advised us that there is uncertainty as to whether the courts of the Republic of The Marshall Islands would (a) recognize or enforce against us, our general partner or our general
partners directors or officers judgments of courts of the United States based on civil liability provisions of applicable U.S. federal and state securities laws or (b) impose liabilities against us, our general partner or our general
partners directors and officers in original actions brought in the Republic of The Marshall Islands, based on these laws.
LEGAL MATTERS
Unless otherwise stated in any applicable prospectus supplement, Perkins Coie LLP will pass upon certain legal
matters for us with respect to the offering of our common units. Unless otherwise stated in any applicable prospectus supplement, the validity of our common units and certain other legal matters with respect to the laws of the Republic of The
Marshall Islands will be passed upon for us by Watson, Farley & Williams LLP. As appropriate, legal counsel representing any underwriters, dealers or agents will be named in the applicable prospectus supplement and may opine to certain
legal matters.
EXPERTS
The consolidated financial statements of Teekay Offshore Partners L.P. as of December 31, 2013 and 2012, and for each of the years in the
three-year period ended December 31, 2013, and managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2013, have been incorporated by reference herein and in the registration
statement in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. To the extent that KPMG LLP audits and
reports on financial statements of Teekay Offshore Partners L.P. issued at future dates, and consents to the use of its reports thereon, such financial statements also will be incorporated by reference in the registration statement in reliance upon
its report and said authority.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-3 regarding the securities covered by this prospectus. This prospectus does
not contain all of the information found in the registration statement. For further information regarding us and the securities offered in this prospectus, you may wish to review the full registration statement, including its exhibits. In addition,
we file annual, quarterly and other reports with and furnish information to the SEC. You may inspect and copy any document we file with or furnish to the SEC at the public reference facilities maintained by the SEC at
100 F Street, NE, Washington, D.C. 20549. Copies of
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this material can also be obtained upon written request from the Public Reference Section of the SEC at that address, at prescribed rates, or from the SECs website on the internet at
www.sec.gov free of charge. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms. You can also obtain information about us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, certain rules
prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal unitholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, including the filing of
quarterly reports or current reports on Form 8-K. However, we intend to make available quarterly reports containing our unaudited interim financial information for the first three fiscal quarters of each fiscal year.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus information that we file with the SEC. This means that we can
disclose important information to you without actually including the specific information in this prospectus by referring you to other documents filed separately with the SEC. The information incorporated by reference is an important part of this
prospectus. Information that we later provide to the SEC, and which is deemed to be filed with the SEC, automatically will update information previously filed with the SEC, and may replace information in this prospectus.
We incorporate by reference into this prospectus the documents listed below:
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our Annual Report on Form 20-F for the fiscal year ended December 31, 2013; |
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all subsequent Annual Reports on Form 20-F filed with the SEC prior to the termination of this offering; |
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our Report on Form 6-K filed with the SEC on May 19, 2014; |
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all subsequent Reports on Form 6-K filed with the SEC prior to the termination of this offering that we identify in such Reports as being incorporated by reference into the registration statement of which this
prospectus is a part; |
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the description of our common units contained in our Registration Statement on Form 8-A/A filed with the SEC on May 7, 2013, including any subsequent amendments or reports filed for the purpose of updating
such description; and |
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the description of our Series A Preferred Units contained in Exhibit 4.1 to our Registration Statement on Form 8-A filed with the SEC on April 25, 2013, including any subsequent amendments or reports filed for the
purpose of updating such description. |
These reports contain important information about us, our financial condition and our results of
operations.
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You may obtain any of the documents incorporated by reference in this prospectus from the SEC
through its public reference facilities or its website at the addresses provided above. You also may request a copy of any document incorporated by reference in this prospectus (excluding any exhibits to those documents, unless the exhibit is
specifically incorporated by reference in this document), at no cost, by visiting our internet website at www.teekayoffshore.com, or by writing or calling us at the following address:
Teekay Offshore Partners, L.P.
4th Floor, Belvedere Building,
69
Pitts Bay Road
Hamilton HM 08, Bermuda
Attn: Corporate Secretary
(441) 298-2530
You should
rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with any information. You should not assume that the information incorporated by
reference or provided in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of each document. The information contained in our website is not part of this prospectus.
EXPENSES
The following table sets forth costs and expenses, other than any underwriting discounts and commissions, we expect to incur in connection
with the issuance and distribution of our common units covered by this prospectus.
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U.S. Securities and Exchange Commission registration fee |
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$ |
64,400 |
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Legal fees and expenses |
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* |
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Accounting fees and expenses |
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* |
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Printing costs |
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* |
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Transfer agent fees |
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* |
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New York Stock Exchange listing fee |
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* |
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Miscellaneous |
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* |
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Total |
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$ |
* |
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* |
To be provided in a prospectus supplement or in a Report on Form 6-K subsequently incorporated by reference into this prospectus. |
30
6,704,888 Common Units
Representing Limited Partner Interests
Teekay Offshore Partners L.P.
PROSPECTUS SUPPLEMENT
November 28,
2014
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