Highlights
Teekay Offshore GP LLC (TOO GP), the general partner of Teekay
Offshore Partners L.P. (Teekay Offshore or the Partnership)
(NYSE:TOO), today reported the Partnership’s results for the
quarter ended June 30, 2018.
| |
|
|
| |
|
Three Months Ended |
| |
|
June 30, |
March 31, |
June 30, |
| |
|
2018 |
2018 (2) |
2017 |
| (in thousands of U.S.
Dollars) |
(unaudited) |
(unaudited) |
(unaudited) |
| GAAP FINANCIAL COMPARISON |
|
|
|
| Revenues |
320,354 |
|
323,199 |
|
264,792 |
|
| (Loss) income from vessel operations |
(132,019 |
) |
19,498 |
|
46,218 |
|
| Equity income |
8,346 |
|
13,998 |
|
3,425 |
|
| Net (loss) income |
(168,492 |
) |
16,060 |
|
(16,466 |
) |
| Net (loss) income attributable to the partners and preferred
unitholders |
(168,500 |
) |
23,919 |
|
(20,005 |
) |
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Total cash flow from vessel operations (CFVO) (1) |
162,242 |
|
161,538 |
|
134,601 |
|
| Distributable cash flow (DCF) (1) |
25,327 |
|
39,359 |
|
27,242 |
|
| Adjusted net (loss) income attributable to the partners and
preferred unitholders (1) |
(732 |
) |
13,701 |
|
10,427 |
|
| (1) |
|
These are non-GAAP
financial measures. Please refer to “Definitions and Non-GAAP
Financial Measures” and the Appendices to this release for
definitions of these terms and reconciliations of these non-GAAP
financial measures as used in this release to the most directly
comparable financial measures under United States generally
accepted accounting principles (GAAP). |
| |
|
|
| (2) |
|
Please refer to
Appendices to the release announcing the results for the first
quarter of 2018 attached as Exhibit 1 to the Form 6-K filed with
the Securities and Exchange Commission on May 17, 2018, for a
reconciliation of these non-GAAP measures to the most directly
comparable financial measures under GAAP. |
| |
|
|
GAAP net loss and non-GAAP adjusted net loss
increased for the second quarter of 2018, compared to the same
quarter of the prior year. Lower earnings resulted from the
Voyageur Spirit and Ostras FPSO units operating at reduced rates on
their contract extensions, the expiration of two dynamic
positioning (DP)1 bareboat shuttle tanker charters in August and
October 2017, a change in the estimated useful life of the tanker
component for all shuttle tankers from 25 years to 20 years,
effective January 1, 2018, and more dry-docking days in the second
quarter of 2018. These decreases were partially offset by the
start-up and contract commencement of the Randgrid FSO in October
2017, the Pioneiro de Libra FPSO in November 2017, and the
Petrojarl I FPSO in early-May 2018, the redelivery by the
Partnership of one in-chartered shuttle tanker in early 2018 and
stronger results from the towage segment reflecting higher rates
and utilization from a large tow assist and installation project
for the Kaombo Norte FPSO. GAAP net loss for the second quarter of
2018, compared to the same quarter of the prior year, was also
negatively impacted by the write-down of the Piranema Spirit and
Ostras FPSO units as a result of a reassessment of the future
redeployment assumptions for both units.
CEO Commentary
“For the second quarter, our results came in
better than our guidance driven mainly by stronger than expected
results from our shuttle tanker contract of affreightment (CoA)
fleet and lower operating expenses on various FPSO units,”
commented Ingvild Sæther, President and CEO of Teekay Offshore
Group Ltd. “However, as expected, our overall results were
down from the previous quarter primarily driven by lower rates on
the Voyageur Spirit and Ostras FPSO units as a result of contract
extensions, higher interest expense and liquidated damages received
from a towage newbuilding delivery last quarter, partially offset
by the start-up of the Petrojarl I FPSO in May 2018.”
“Since reporting earnings in May 2018, we have
continued to successfully secure new charter contract extensions.
We entered into a second contract extension for the Voyageur Spirit
FPSO to at least April 2020, and an extension on the Ostras FPSO to
November 2018, plus extension options. These valuable
extensions provide additional forward fixed revenues totaling over
$70 million, plus upside from a formula based on both oil price,
and production volume, with no incremental investment by the
Partnership, while also extending the timeframe available to find
appropriate redeployment opportunities.”
“In July 2018, we refinanced our 2019 bond
maturities and the $200 million promissory note due in 2022 with a
new $700 million unsecured bond offering, which significantly
improves the Partnership’s debt maturity profile and further
highlights Brookfield’s continued strong support of the Partnership
with $300 million of new capital provided by Brookfield towards
this bond offering. Following the bond offering, Brookfield
exercised its option to acquire an additional 2% of our general
partner, bringing its ownership interest in our general partner to
51%. We look forward to continuing our pursuit of our near- and
longer-term objectives with the ongoing support of our sponsors,
Brookfield and Teekay Corporation.”
“Last week, we reached another important
milestone for our shuttle tanker franchise with the order of two
LNG-fueled Aframax DP2 shuttle tanker newbuildings, which we expect
will further strengthen our position as the leading provider of CoA
shuttle tanker services in the North Sea. Our customers require a
reliable, long-term solution for securing offtake services from a
large proportion of current and future production in the North Sea
and these state-of-the-art newbuildings, together with our four
existing newbuildings under construction, demonstrate our ongoing
commitment to our shuttle tanker franchise and our customers.”
Ms. Sæther concluded, “Looking ahead, with a
stronger balance sheet, market-leading positions, operational
excellence and strong and supportive sponsors, we believe Teekay
Offshore is well-positioned to benefit from the expected strong
demand for offshore production, storage and transportation.”
Summary of Recent Events
Recontracting of FPSO Units
In July 2018, the Partnership secured a further
one-year contract extension with Premier Oil to extend the
employment of the Voyageur Spirit FPSO on the Huntington field to
April 2020. Compared to the current contract, the new one-year
extension, which takes effect in April 2019, maintains the same
fixed charter rate and oil production tariff elements, but provides
additional upside from a formula based on oil price, regardless of
production volume, which provides incremental cash flow upside to
the Partnership.
In July 2018, the Partnership agreed to a
contract extension with Petrobras to extend the employment of the
Ostras FPSO to November 2018, with options to extend up to January
2019, at an increased rate relative to the option period of the
previous contract extension.
In both cases, these contract extensions
represent material incremental cash flow contribution with no
incremental investment by the Partnership. These activities also
extend the timeframe available to secure appropriate future
redeployment opportunities and potentially delay or eliminate costs
associated with lay-up between employment opportunities. The
Partnership continues to explore options for future redeployment
opportunities for both assets.
Financing Update
In July 2018, the Partnership completed an
upsized $700 million private placement of 8.5% senior unsecured
notes maturing in 2023 (the Notes). Brookfield Business
Partners L.P., together with its institutional partners
(Brookfield), the holder of approximately 60% of Teekay Offshore’s
outstanding common units, purchased $500 million principal amount
of the Notes. The Partnership used a portion of the net proceeds
from the issuance to (a) repurchase $225.2 million of the $300
million aggregate principal of its outstanding 6% senior notes
maturing in 2019, (b) repurchase approximately NOK 910 million of
the NOK 1,000 million aggregate principal of its NOK senior notes
maturing in 2019 (the NOK notes) and settle approximately $40
million of the cross currency swaps which were an economic hedge to
the NOK notes, and (c) repay at par an outstanding $200 million 10%
promissory note held by Brookfield maturing in 2022 along with an
associated $12 million early termination fee.
New Growth Project
In late-July 2018, the Partnership entered into
shipbuilding contracts with Samsung Heavy Industries Co. Ltd. to
construct two Aframax DP2 shuttle tanker newbuildings. These
newbuildings will be constructed based on Teekay Offshore's New
Shuttle Spirit design which incorporates proven technologies to
increase fuel efficiency and reduce emissions, including LNG
propulsion technology. Upon expected delivery in late-2020 through
early-2021, these vessels will join the Partnership’s CoA shuttle
tanker portfolio in the North Sea to provide needed capacity to
meet its customers’ needs.
Arendal Spirit UMS loan extension
In August 2018, the Partnership extended the
mandatory prepayment date for the Arendal Spirit UMS debt facility
to September 30, 2019 in exchange for a principal prepayment of $18
million, which is expected to be paid in the third quarter of
2018.
Operating Results
The following table highlights certain financial
information for Teekay Offshore’s six segments: the FPSO segment,
the shuttle tanker segment, the FSO segment, the UMS segment, the
towage segment and the conventional tanker segment (please refer to
the “Teekay Offshore’s Fleet” section of this release below and
Appendices C through E for further details).
| |
|
| |
Three Months Ended |
| |
June 30, 2018 |
| (in thousands of U.S.
Dollars) |
(unaudited) |
| |
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker
Segment |
Total |
| GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
| Revenues |
124,053 |
|
142,047 |
|
33,840 |
|
— |
|
15,510 |
|
4,904 |
|
320,354 |
|
| (Loss) income from vessel operations |
(156,506 |
) |
22,553 |
|
11,284 |
|
(3,861 |
) |
(3,077 |
) |
(2,412 |
) |
(132,019 |
) |
| Equity income |
8,346 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
8,346 |
|
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
| CFVO from (used for) consolidated vessels (i) |
56,939 |
|
61,101 |
|
24,232 |
|
(2,208 |
) |
2,034 |
|
(2,412 |
) |
139,686 |
|
| CFVO from equity-accounted vessels (i) |
22,556 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
22,556 |
|
| Total CFVO (i) |
79,495 |
|
61,101 |
|
24,232 |
|
(2,208 |
) |
2,034 |
|
(2,412 |
) |
162,242 |
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
June 30, 2017 |
| (in thousands of U.S.
Dollars) |
(unaudited) |
| |
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker
Segment |
Total |
| GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
| Revenues |
110,247 |
|
132,964 |
|
10,798 |
|
3,089 |
|
4,229 |
|
3,465 |
|
264,792 |
|
| Income (loss) from vessel operations |
31,601 |
|
38,293 |
|
1,178 |
|
(17,050 |
) |
(7,021 |
) |
(783 |
) |
46,218 |
|
| Equity income |
3,425 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,425 |
|
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
| CFVO from (used for) consolidated vessels (i) |
64,015 |
|
68,063 |
|
6,719 |
|
(6,528 |
) |
(3,446 |
) |
(783 |
) |
128,040 |
|
| CFVO from equity-accounted vessels (i) |
6,561 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
6,561 |
|
| Total CFVO (i) |
70,576 |
|
68,063 |
|
6,719 |
|
(6,528 |
) |
(3,446 |
) |
(783 |
) |
134,601 |
|
| (i) |
|
These are non-GAAP
financial measures. Please refer to “Definitions and Non-GAAP
Financial Measures” and the Appendices to this release for
definitions of these terms and reconciliations of these non-GAAP
financial measures as used in this release to the most directly
comparable financial measures under GAAP. |
| |
|
|
FPSO Segment
Income from vessel operations decreased for the
three months ended June 30, 2018, compared to the same quarter of
the prior year, primarily due to the write-down of the Piranema
Spirit and Ostras FPSO units and lower charter rates from the
Voyageur Spirit and Ostras FPSO units contract extensions.
Total cash flow from vessel operations
(including equity-accounted vessels) increased for the three months
ended June 30, 2018, compared to the same quarter of the prior
year, primarily due to the commencement of operations of the
Pioneiro de Libra FPSO in late-November 2017 and the Petrojarl I
FPSO in early-May 2018, partially offset by the lower charter rates
from the Voyageur Spirit FPSO and Ostras FPSO units contract
extensions.
Shuttle Tanker Segment
Income from vessel operations and cash flow from
vessel operations decreased for the three months ended June 30,
2018, compared to the same quarter of the prior year, primarily due
to more dry-docking days during the second quarter of 2018 and the
redelivery to the Partnership of two DP1 shuttle tankers on
bareboat contracts, the Nordic Brasilia and Nordic Rio in August
and October 2017, respectively (which are currently trading in the
weak spot conventional tanker market), partially offset by the
redelivery of an in-chartered vessel in January 2018 and the uplift
from the East Coast of Canada charter contracts resulting from the
delivery and start-up of the Beothuk Spirit, Norse Spirit and
Dorset Spirit newbuildings in December 2017, January 2018 and May
2018, respectively.
FSO Segment
Income from vessel operations and cash flow from
vessel operations increased for the three months ended June 30,
2018, compared to the same quarter of the prior year, primarily due
to the commencement of the Randgrid FSO charter contract in October
2017.
UMS Segment
Income from vessel operations and cash flow from
vessel operations increased for the three months ended June 30,
2018, compared to the same quarter of the prior year, due to lower
operating expenses as a result of the lay-up of the Arendal Spirit
UMS since the fourth quarter of 2017.
Towage Segment
Income from vessel operations and cash flow from
vessel operations increased for the three months ended June 30,
2018, compared to the same quarter of the prior year, due to the
delivery of ALP Sweeper and ALP Keeper in October 2017 and February
2018, respectively, and higher charter rates and fleet utilization
from the Kaombo Norte FPSO mobilization and field installation
contract, which used a total of five vessels during the second
quarter.
Conventional Tanker Segment
Income from vessel operations and cash flow from
vessel operations decreased for the three months ended June 30,
2018, compared to the same quarter of the prior year, primarily due
to the termination of the Blue Power time-charter-out contract in
the fourth quarter of 2017 and subsequent trading of the vessel in
the weak spot conventional tanker market during 2018. The
time-charter-in contracts for both of the conventional tankers
included in this segment are scheduled to expire in March 2019.
Teekay Offshore’s Fleet
The following table summarizes Teekay Offshore’s
fleet as of August 1, 2018.
| |
|
| |
Number of Vessels |
| |
Owned Vessels |
Chartered-in Vessels |
Committed
Newbuildings |
Total |
| FPSO
Segment |
8 |
|
(i) |
— |
|
|
— |
|
|
8 |
|
|
| Shuttle
Tanker Segment |
29 |
|
(ii) |
2 |
|
|
6 |
|
(iii) |
37 |
|
|
| FSO
Segment |
6 |
|
|
— |
|
|
— |
|
|
6 |
|
|
| UMS
Segment |
1 |
|
|
— |
|
|
— |
|
|
1 |
|
|
| Towage
Segment |
10 |
|
|
— |
|
|
— |
|
|
10 |
|
|
|
Conventional Segment |
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
| Total |
54 |
|
|
4 |
|
|
6 |
|
|
64 |
|
|
| (i) |
|
Includes two FPSO
units, the Cidade de Itajai and Pioneiro de Libra, in which Teekay
Offshore’s ownership interest is 50 percent. |
| |
|
|
| (ii) |
|
Includes six shuttle
tankers in which Teekay Offshore’s ownership interest is 50 percent
and one HiLoad DP unit. |
| |
|
|
| (iii) |
|
Includes six DP2
shuttle tanker newbuildings scheduled for delivery in late-2019
through early-2021, two of which will operate under Teekay
Offshore's master agreement with Equinor (formerly Statoil) and
four of which will join Teekay Offshore's CoA portfolio in the
North Sea. |
|
|
|
|
Liquidity Update
As of June 30, 2018, the Partnership had
total liquidity of $241.2 million. Pro forma for the Partnership's
$700 million bond offering, repayment of existing bonds and
promissory note and various fees completed in July 2018, the
Partnership's total liquidity as of June 30, 2018 would have been
approximately $350 million.
Conference Call
The Partnership plans to host a conference call
on Thursday, August 2, 2018 at 12:00 p.m. (ET) to discuss the
results for the second quarter of 2018. All unitholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing 1-888-394-8218 or 647-484-0475, if outside North
America, and quoting conference ID code 9279971.
- By accessing the webcast, which will be available on Teekay
Offshore's website at www.teekay.com (the archive will remain
on the website for a period of one year).
An accompanying Second Quarter 2018 Earnings
Presentation will also be available at www.teekay.com in
advance of the conference call start time.
Availability of 2017 Annual Report
The Partnership filed its 2017 Annual Report on
Form 20-F with the U.S. Securities and Exchange Commission (SEC) on
March 21, 2018. Copies of this report are available on Teekay
Offshore’s website, under “Investors - Teekay Offshore - Financials
& Presentations”, at www.teekay.com. Unitholders may request a
printed copy of this Annual Report, including the complete audited
financial statements, free of charge by contacting Teekay
Offshore’s Investor Relations.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is a leading
international midstream services provider to the offshore oil
production industry, focused on the ownership and operation of
critical infrastructure assets in offshore oil regions of the North
Sea, Brazil and the East Coast of Canada. Teekay Offshore is
structured as a publicly-traded master limited partnership with
consolidated assets of approximately $5.4 billion, comprised of 64
offshore assets, including floating production, storage and
offloading (FPSO) units, shuttle tankers (including six
newbuildings), floating storage and offtake (FSO) units, long
distance towing and offshore installation vessels, a unit for
maintenance and safety (UMS) and conventional tankers. The majority
of Teekay Offshore’s fleet is employed on medium-term, stable
contracts.
Teekay Offshore's common units and preferred
units trade on the New York Stock Exchange under the symbols "TOO",
"TOO PR A", "TOO PR B" and "TOO PR E", respectively.
For Investor Relations enquiries contact:
Ryan HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the U.S. Securities and Exchange Commission. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Adjusted Net Income, and Distributable Cash Flow are intended to
provide additional information and should not be considered a
substitute for measures of performance prepared in accordance with
GAAP. In addition, these measures do not have standardized
meanings, and may not be comparable to similar measures presented
by other companies. The Partnership believes that certain investors
use this information to evaluate the Partnership’s financial
performance, as does management.
Non-GAAP Financial Measures
Cash Flow From (Used For) Vessel Operations
(CFVO) represents (loss) income from vessel operations before
depreciation and amortization expense, amortization of in-process
revenue contracts, vessel write-downs, gains or losses on the sale
of vessels, write-off of deferred revenues and operating expenses
and adjustments for direct financing leases to a cash basis, but
includes realized gains or losses on the settlement of foreign
currency forward contracts. CFVO from Consolidated Vessels
represents CFVO from vessels that are consolidated on the
Partnership’s financial statements. CFVO from Equity-Accounted
Vessels represents the Partnership’s proportionate share of CFVO
from its equity-accounted vessels. The Partnership does not control
its equity-accounted vessels and as a result, the Partnership does
not have the unilateral ability to determine whether the cash
generated by its equity-accounted vessels is retained within the
entities in which the Partnership holds the equity-accounted
investments or distributed to the Partnership and other owners. In
addition, the Partnership does not control the timing of such
distributions to the Partnership and other owners. Consequently,
readers are cautioned when using total CFVO as a liquidity measure
as the amount contributed from CFVO from Equity-Accounted Vessels
may not be available to the Partnership in the periods such CFVO is
generated by its equity-accounted vessels. CFVO is a non-GAAP
financial measure used by certain investors and management to
measure the operational financial performance of companies. Please
refer to Appendices D and E of this release for reconciliations of
these non-GAAP financial measures to (loss) income from vessel
operations and income from vessel operations of equity-accounted
vessels, respectively, the most directly comparable GAAP measures
reflected in the Partnership’s consolidated financial
statements.
Adjusted Net Income excludes items of income or
loss from GAAP net (loss) income that are typically excluded by
securities analysts in their published estimates of the
Partnership’s financial results. The Partnership believes that
certain investors use this information to evaluate the
Partnership’s financial performance, as does management. Please
refer to Appendix A of this release for a reconciliation of this
non-GAAP financial measure to net (loss) income, the most directly
comparable GAAP measure reflected in the Partnership’s consolidated
financial statements.
Distributable Cash Flow (DCF) represents GAAP
net (loss) income adjusted for depreciation and amortization
expense, deferred income tax expense or recovery, vessel
write-downs, gains or losses on the sale of vessels, vessel and
business acquisition costs, distributions relating to equity
financing of newbuilding installments and conversion costs,
pre-operational expenses, distributions on the Partnership's
preferred units, gains on extinguishment of contingent liabilities
and losses on non-cash accruals of contingent liabilities,
amortization of the non-cash portion of revenue contracts,
estimated maintenance capital expenditures, unrealized gains and
losses from non-designated derivative instruments, unrealized
foreign exchange gains and losses, ineffectiveness for derivative
instruments designated as hedges for accounting purposes,
adjustments for direct financing leases to a cash basis and foreign
exchange related items, including the Partnership's proportionate
share of such items in equity-accounted for investments and
non-controlling interests proportionate share of such interests.
Maintenance capital expenditures represent those capital
expenditures required to maintain over the long-term the operating
capacity of, or the revenue generated by, the Partnership's capital
assets. DCF is a quantitative standard used in the publicly-traded
partnership investment community and by management to assist in
evaluating financial performance. Please refer to Appendix B of
this release for a reconciliation of this non-GAAP financial
measure to net (loss) income, the most directly comparable GAAP
measure reflected in the Partnership’s consolidated financial
statements.
| |
| Teekay Offshore Partners L.P. |
| Summary Consolidated Statements of (Loss) Income |
| (in thousands of U.S. Dollars, except unit data) |
| |
| |
Three Months Ended |
Six Months Ended |
| |
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
| |
2018 |
2018 |
2017 |
2018 |
2017 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
|
|
|
| Revenues
(1) |
320,354 |
|
323,199 |
|
264,792 |
|
643,553 |
|
540,930 |
|
| |
|
|
|
|
|
| Voyage
expenses (1) |
(36,486 |
) |
(35,006 |
) |
(20,196 |
) |
(71,492 |
) |
(45,337 |
) |
| Vessel
operating expenses (1) |
(110,298 |
) |
(115,382 |
) |
(89,705 |
) |
(225,680 |
) |
(168,695 |
) |
|
Time-charter hire expenses |
(13,464 |
) |
(12,727 |
) |
(19,507 |
) |
(26,191 |
) |
(41,263 |
) |
|
Depreciation and amortization (2) |
(95,440 |
) |
(94,304 |
) |
(74,287 |
) |
(189,744 |
) |
(149,013 |
) |
| General and
administrative |
(17,890 |
) |
(17,786 |
) |
(13,379 |
) |
(35,676 |
) |
(27,996 |
) |
|
(Write-down) and gain on sale of vessels (3) |
(178,795 |
) |
(28,496 |
) |
(1,500 |
) |
(207,291 |
) |
(1,500 |
) |
| Restructuring charge |
— |
|
— |
|
— |
|
— |
|
(450 |
) |
|
(Loss) income from vessel operations |
(132,019 |
) |
19,498 |
|
46,218 |
|
(112,521 |
) |
106,676 |
|
| |
|
|
|
|
|
| Interest
expense |
(49,662 |
) |
(41,573 |
) |
(36,602 |
) |
(91,235 |
) |
(72,706 |
) |
| Interest
income |
734 |
|
658 |
|
406 |
|
1,392 |
|
752 |
|
| Realized
and unrealized gain (loss) |
|
|
|
|
|
| on derivative instruments (4) |
9,441 |
|
34,450 |
|
(21,797 |
) |
43,892 |
|
(28,329 |
) |
| Equity
income |
8,346 |
|
13,998 |
|
3,425 |
|
22,344 |
|
7,900 |
|
| Foreign
currency exchange loss (5) |
(3,860 |
) |
(1,943 |
) |
(6,564 |
) |
(5,803 |
) |
(6,787 |
) |
| Other expense - net |
(592 |
) |
(3,270 |
) |
(1,134 |
) |
(3,863 |
) |
(912 |
) |
|
(Loss) income before income tax expense |
(167,612 |
) |
21,818 |
|
(16,048 |
) |
(145,794 |
) |
6,594 |
|
| Income tax
expense |
(880 |
) |
(5,758 |
) |
(418 |
) |
(6,638 |
) |
(1,797 |
) |
| Net (loss) income |
(168,492 |
) |
16,060 |
|
(16,466 |
) |
(152,432 |
) |
4,797 |
|
| |
|
|
|
|
|
|
Non-controlling interests in net (loss) income |
8 |
|
(7,859 |
) |
3,539 |
|
(7,852 |
) |
5,911 |
|
| Preferred
unitholders' interest in net (loss) income |
8,038 |
|
7,370 |
|
12,386 |
|
15,409 |
|
24,772 |
|
| General
partner’s interest in net (loss) income |
(1,342 |
) |
126 |
|
(648 |
) |
(1,217 |
) |
(518 |
) |
| Limited
partners’ interest in net (loss) income |
(175,196 |
) |
16,423 |
|
(31,743 |
) |
(158,772 |
) |
(25,368 |
) |
| |
|
|
|
|
|
|
Weighted-average number of common units: |
|
|
|
|
|
| -
basic |
410,310,586 |
|
410,101,480 |
|
151,364,950 |
|
410,206,610 |
|
150,006,972 |
|
| -
diluted |
410,310,586 |
|
475,447,576 |
|
151,364,950 |
|
410,206,610 |
|
150,006,972 |
|
| Total
number of common units outstanding |
|
|
|
|
|
| at end of period |
410,314,977 |
|
410,260,795 |
|
153,858,292 |
|
410,314,977 |
|
153,858,292 |
|
| (1) |
|
Effective January 1,
2018, the Partnership adopted the new revenue accounting standard,
which resulted in increasing revenues by $15.8 million and $31.9
million for the three and six months ended June 30, 2018,
respectively, increasing voyage expenses by $3.0 million and $6.3
million for the three and six months ended June 30, 2018,
respectively, and increasing vessel operating expenses by $12.8
million and $25.6 million for the three and six months ended June
30, 2018, respectively. These gross-up adjustments had no impact on
net loss for the three and six months ended June 30, 2018. |
| |
|
|
| (2) |
|
The Partnership's
shuttle tankers are comprised of two components: i) a conventional
tanker (the “tanker component”) and ii) specialized shuttle
equipment (the “shuttle component”). The Partnership differentiated
these two components on the principle that a shuttle tanker can
also operate as a conventional tanker without the use of the
shuttle component. The economics of this alternate use depend on
the supply and demand fundamentals in the two segments.
Historically, the Partnership has assessed the useful life of the
tanker component as being 25 years and the shuttle component as
being 20 years. During the three months ended March 31, 2018, the
Partnership has considered challenges associated with shuttle
tankers that have approached 20 years of age in recent years and
has reassessed the useful life of the tanker component to be 20
years. This change in estimate, commencing January 1, 2018, impacts
21 vessels in the Partnership's shuttle tanker fleet. Separately,
the Partnership has reviewed the residual value for seven vessels
in its fleet that are 17 years of age or older and, as a result of
a change in current estimated recycling values, has decreased the
residual value for these vessels. The effect of these changes in
estimates increased depreciation expense and decreased net income
by $5.4 million and $10.8 million for the three and six months
ended June 30, 2018, respectively. |
| |
|
|
| (3) |
|
During the three months
ended June 30, 2018, the Partnership incurred a write-down of
$181.4 million, mainly related to the Piranema Spirit and Ostras
FPSO units as a result of a reassessment of the future redeployment
assumptions for both units. In June 2018, the Partnership sold a
1998-built shuttle tanker, the Navion Britannia, for net proceeds
of $10.4 million, and recorded a gain on sale of $2.6 million in
the Partnership's shuttle tanker segment.During the three months
ended March 31, 2018, the Partnership incurred a write-down of
$28.5 million related to two older shuttle tankers ($14.2 million
which relates to one shuttle tanker the Partnership owns through a
50 percent-owned subsidiary), due to the expected redelivery of
these vessels from their charterer after completing their bareboat
charter contracts in April 2018 and the resulting change in the
expectations for the future employment opportunities for the
vessels. |
| |
|
|
| (4) |
|
Realized loss on
derivative instruments relates to amounts the Partnership actually
paid to settle derivative instruments, and the unrealized gain
(loss) on derivative instruments relates to the change in fair
value of such derivative instruments, as detailed in the table
below: |
| |
Three Months Ended |
Six Months Ended |
| |
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
| |
2018 |
2018 |
2017 |
2018 |
2017 |
|
Realized (loss) gain relating to: |
|
|
|
|
|
| Interest rate swaps |
(5,843 |
) |
(17,143 |
) |
(10,296 |
) |
(22,986 |
) |
(20,962 |
) |
| Foreign currency forward contracts |
370 |
|
618 |
|
(309 |
) |
988 |
|
(410 |
) |
| |
(5,473 |
) |
(16,525 |
) |
(10,605 |
) |
(21,998 |
) |
(21,372 |
) |
| |
|
|
|
|
|
|
Unrealized gain (loss) relating to: |
|
|
|
|
|
| Interest rate swaps |
18,674 |
|
49,300 |
|
(12,871 |
) |
67,974 |
|
(9,367 |
) |
| Foreign currency forward contracts |
(3,760 |
) |
1,675 |
|
1,679 |
|
(2,084 |
) |
2,410 |
|
| |
14,914 |
|
50,975 |
|
(11,192 |
) |
65,890 |
|
(6,957 |
) |
| Total
realized and unrealized gain (loss) on |
|
|
|
|
|
| derivative instruments |
9,441 |
|
34,450 |
|
(21,797 |
) |
43,892 |
|
(28,329 |
) |
| (5) |
|
The Partnership entered
into cross currency swaps to economically hedge the foreign
currency exposure on the payment of interest and repayment of
principal amounts of the Partnership’s Norwegian Kroner (NOK)
bonds. In addition, the cross currency swaps economically hedge the
interest rate exposure on the NOK bonds. The Partnership has not
designated, for accounting purposes, these cross currency swaps as
cash flow hedges of its NOK bonds and, thus, foreign currency
exchange loss includes a realized loss relating to the amounts the
Partnership paid to settle its non-designated cross currency swaps
and an unrealized (loss) gain relating to the change in fair value
of such swaps, partially offset by an unrealized gain (loss) on the
revaluation of the NOK bonds, as detailed in the table below. In
July 2018, the Partnership used a portion of the net proceeds from
the issuance of the Notes to repurchase approximately NOK 910
million of the NOK 1,000 million aggregate principal of its NOK
bonds and terminated NOK 905 million of the associated NOK 1,000
million aggregate notional amount of the cross currency swaps,
resulting in a cash settlement of approximately $40 million on the
cross currency swap termination. |
| |
|
|
| |
|
|
| |
Three Months Ended |
Six Months Ended |
| |
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
| |
2018 |
2018 |
2017 |
2018 |
2017 |
| Realized
loss on cross currency swaps |
(1,444 |
) |
(1,293 |
) |
(3,310 |
) |
(2,737 |
) |
(6,514 |
) |
| Unrealized
(loss) gain on cross currency swaps |
(4,433 |
) |
6,338 |
|
8,111 |
|
1,905 |
|
12,490 |
|
| Unrealized gain (loss) on revaluation of NOK bonds |
4,791 |
|
(5,641 |
) |
(7,797 |
) |
(850 |
) |
(9,058 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Consolidated Balance Sheets |
| (in thousands of U.S. Dollars) |
| |
| |
As at |
As at |
As at |
| |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
|
|
Current |
|
|
|
| Cash and
cash equivalents |
241,202 |
|
225,892 |
|
221,934 |
|
| Restricted
cash |
12,425 |
|
15,814 |
|
28,360 |
|
| Accounts
receivable |
134,931 |
|
137,054 |
|
162,691 |
|
| Vessels
held for sale |
8,000 |
|
— |
|
— |
|
| Prepaid
expenses |
37,011 |
|
36,815 |
|
30,336 |
|
| Due from
affiliates |
51,249 |
|
39,871 |
|
37,376 |
|
| Other current assets |
10,644 |
|
10,107 |
|
29,249 |
|
|
Total current assets |
495,462 |
|
465,553 |
|
509,946 |
|
| |
|
|
|
| |
|
|
|
|
Vessels and equipment |
|
|
|
| At cost,
less accumulated depreciation |
4,388,304 |
|
4,457,170 |
|
4,398,836 |
|
| Advances on
newbuilding contracts and conversion costs |
17,742 |
|
225,129 |
|
288,658 |
|
| Investment
in equity accounted joint ventures |
195,082 |
|
187,304 |
|
169,875 |
|
| Deferred
tax asset |
22,674 |
|
24,222 |
|
28,110 |
|
| Other
assets |
177,254 |
|
185,686 |
|
113,225 |
|
| Goodwill |
129,145 |
|
129,145 |
|
129,145 |
|
|
Total assets |
5,425,663 |
|
5,674,209 |
|
5,637,795 |
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current |
|
|
|
| Accounts
payable |
12,020 |
|
11,677 |
|
43,317 |
|
| Accrued
liabilities |
142,147 |
|
200,951 |
|
187,687 |
|
| Deferred
revenues |
55,786 |
|
51,811 |
|
69,668 |
|
| Due to
affiliates |
57,331 |
|
72,361 |
|
108,483 |
|
| Current
portion of derivative instruments |
62,273 |
|
58,333 |
|
42,515 |
|
| Current
portion of long-term debt |
473,691 |
|
684,118 |
|
589,767 |
|
| Other current liabilities |
10,437 |
|
7,849 |
|
9,056 |
|
|
Total current liabilities |
813,685 |
|
1,087,100 |
|
1,050,493 |
|
| |
|
|
|
| Long-term
debt |
2,492,517 |
|
2,425,126 |
|
2,533,961 |
|
| Derivative
instruments |
83,211 |
|
97,167 |
|
167,469 |
|
| Due to
affiliates |
290,959 |
|
164,195 |
|
163,037 |
|
| Other long-term liabilities |
281,798 |
|
258,262 |
|
249,336 |
|
|
Total liabilities |
3,962,170 |
|
4,031,850 |
|
4,164,296 |
|
| |
|
|
|
|
Redeemable non-controlling interest |
— |
|
— |
|
(29 |
) |
| |
|
|
|
|
Equity |
|
|
|
| Limited
partners - common units |
879,437 |
|
1,058,848 |
|
1,004,077 |
|
| Limited
partners - preferred units |
384,274 |
|
384,923 |
|
266,925 |
|
| General
Partner |
15,032 |
|
16,405 |
|
15,996 |
|
|
Warrants |
132,225 |
|
132,225 |
|
132,225 |
|
| Accumulated
other comprehensive income (loss) |
6,213 |
|
2,989 |
|
(523 |
) |
| Non-controlling interests |
46,312 |
|
46,969 |
|
54,828 |
|
| Total equity |
1,463,493 |
|
1,642,359 |
|
1,473,528 |
|
| Total liabilities and total
equity |
5,425,663 |
|
5,674,209 |
|
5,637,795 |
|
| |
|
|
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Consolidated Statements of Cash Flows |
| (in thousands of U.S. Dollars) |
| |
| |
Six Months Ended |
| |
June 30, 2018 |
June 30, 2017 |
| |
(unaudited) |
(unaudited) |
| Cash, cash
equivalents and restricted cash provided by (used for) |
|
|
|
OPERATING ACTIVITIES |
|
|
| Net (loss)
income |
(152,432 |
) |
4,797 |
|
| Non-cash
items: |
|
|
| Unrealized gain on derivative instruments |
(67,795 |
) |
(5,526 |
) |
| Equity income, net of dividends received of $4,700 (2017 -
$7,000) |
(17,644 |
) |
(900 |
) |
| Depreciation and amortization |
189,744 |
|
149,013 |
|
| Write-down and (gain) on sale of vessels |
207,291 |
|
1,500 |
|
| Deferred income tax expense |
5,435 |
|
762 |
|
| Amortization of in-process revenue contracts |
(6,101 |
) |
(6,319 |
) |
| Unrealized foreign currency exchange (gain) loss and
other |
(992 |
) |
35,143 |
|
| Change in non-cash working capital items related to operating
activities |
(70,456 |
) |
14,909 |
|
| Expenditures for dry docking |
(9,995 |
) |
(2,815 |
) |
| Net operating cash flow |
77,055 |
|
190,564 |
|
|
FINANCING ACTIVITIES |
|
|
| Proceeds
from long-term debt |
226,520 |
|
207,464 |
|
| Scheduled
repayments of long-term debt |
(345,970 |
) |
(263,169 |
) |
| Prepayments
of long-term debt |
(40,000 |
) |
— |
|
| Debt
issuance costs |
(8,346 |
) |
(2,214 |
) |
| Proceeds
from credit facility due to affiliates |
125,000 |
|
— |
|
| Proceeds
from issuance of preferred units |
120,000 |
|
— |
|
| Proceeds
from issuance of common units |
— |
|
585 |
|
| Expenses
relating to equity offerings |
(3,997 |
) |
(212 |
) |
| Cash
distributions paid by the Partnership |
(22,330 |
) |
(34,412 |
) |
| Cash
distributions paid by subsidiaries to non-controlling
interests |
(664 |
) |
(660 |
) |
| Other |
(715 |
) |
(483 |
) |
| Net financing cash flow |
49,498 |
|
(93,101 |
) |
|
INVESTING ACTIVITIES |
|
|
| Net
payments for vessels and equipment, including advances on
newbuilding contracts and conversion costs |
(160,175 |
) |
(118,601 |
) |
| Proceeds
from sale of vessels and equipment |
10,410 |
|
— |
|
| Direct
financing lease payments received |
2,991 |
|
3,177 |
|
| Investment
in equity accounted joint ventures |
(1,700 |
) |
(12,339 |
) |
| Acquisition
of companies from Teekay Corporation (net of cash acquired of $26.6
million) |
25,254 |
|
— |
|
| Net investing cash flow |
(123,220 |
) |
(127,763 |
) |
| Increase
(decrease) in cash, cash equivalents and restricted cash |
3,333 |
|
(30,300 |
) |
| Cash, cash
equivalents and restricted cash, beginning of the period |
250,294 |
|
342,287 |
|
| Cash, cash equivalents and restricted cash, end
of the period |
253,627 |
|
311,987 |
|
| |
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Appendix A - Reconciliation of Non-GAAP Financial
Measures |
| Adjusted Net (Loss) Income |
| (in thousands of U.S. Dollars) |
| |
| |
|
Three Months Ended |
| |
|
June 30, 2018 |
June 30, 2017 |
| |
|
(unaudited) |
(unaudited) |
| Net loss – GAAP basis |
(168,492 |
) |
(16,466 |
) |
| Adjustments: |
|
|
| Net income attributable to non-controlling
interests |
(8 |
) |
(3,539 |
) |
| Net loss attributable to the partners and preferred
unitholders |
(168,500 |
) |
(20,005 |
) |
| Add (subtract) specific items affecting net loss: |
|
|
| Write-down and gain on sale of vessels (1) |
178,795 |
|
1,500 |
|
| Foreign currency exchange loss (2) |
2,910 |
|
3,254 |
|
| Other (3) |
1,209 |
|
4,170 |
|
| Pre-operational costs (4) |
266 |
|
1,788 |
|
| Unrealized (gain) loss on derivative instruments
(5) |
(15,122 |
) |
10,832 |
|
| Termination of Arendal Spirit UMS charter contract
(6) |
— |
|
8,888 |
|
| Non-controlling interests' share of items
above (7) |
(290 |
) |
— |
|
| Total adjustments |
167,768 |
|
30,432 |
|
| Adjusted net (loss) income
attributable to the partners and preferred
unitholders |
(732 |
) |
10,427 |
|
| (1) |
|
See footnote (3) of the
summary consolidated statements of (loss) income included in this
release for further details. |
| |
|
|
| (2) |
|
Foreign currency
exchange loss primarily relates to the Partnership’s revaluation of
all foreign currency-denominated monetary assets and liabilities
based on the prevailing exchange rate at the end of each reporting
period, including revaluation of all foreign-currency-denominated
monetary assets and liabilities within the equity accounted joint
ventures and the unrealized gain or loss related to the
Partnership’s cross currency swaps related to the Partnership's NOK
bonds and excludes the realized gain or loss relating to the
Partnership's cross currency swaps. |
| |
|
|
| (3) |
|
Other items for the
three months ended June 30, 2018 include a decrease in the deferred
income tax asset for the Partnership's Norwegian tax structures.
Other items for the three months ended June 30, 2017 includes an
increase in the Piranema Spirit FPSO rate reduction contingency and
an increase in accrual relating to potential damages resulting from
the cancellation of the UMS newbuildings, partially offset by an
increase in the deferred income tax asset for the Partnership's
Norwegian tax structures. |
| |
|
|
| (4) |
|
Reflects depreciation
and amortization expense, general and administrative expenses and
vessel operating expenses relating to the Petrojarl I FPSO unit
while undergoing upgrades. |
| |
|
|
| (5) |
|
Reflects the net
unrealized (gain) loss due to changes in the mark-to-market value
of interest rate swaps and foreign currency forward contracts that
are not designated as hedges for accounting purposes, hedge
ineffectiveness from derivative instruments designated as hedges
for accounting purposes, the unrealized mark-to-market value of the
interest rate swaps within the Cidade de Itajai FPSO
equity-accounted joint venture and hedge ineffectiveness within the
Pioneiro de Libra FPSO equity accounted joint venture. |
| |
|
|
| (6) |
|
Includes the write-off
of deferred revenues and operating expenses as a result of the
termination of the Arendal Spirit UMS charter contract in
late-April 2017. |
| |
|
|
| (7) |
|
Items affecting net
loss include amounts attributable to the Partnership’s consolidated
non-wholly-owned subsidiaries. Each item affecting net loss is
analyzed to determine whether any of the amounts originated from a
consolidated non-wholly-owned subsidiary. Each amount that
originates from a consolidated non-wholly-owned subsidiary is
multiplied by the non-controlling interests’ percentage share in
this subsidiary to arrive at the non-controlling interests’ share
of the amount. The amount identified as “non-controlling interests’
share of items above” in the table above is the cumulative amount
of the non-controlling interests’ proportionate share of items
affecting net loss listed in the table. |
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Appendix B - Reconciliation of Non-GAAP Financial
Measures |
| Distributable Cash Flow |
| (in thousands of U.S. Dollars, except unit and per unit
data) |
| |
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
|
2018 |
2017 |
| |
|
(unaudited) |
(unaudited) |
|
|
|
|
|
| Net loss |
(168,492 |
) |
(16,466 |
) |
| Add (subtract): |
|
|
| Write-down and gain on sale of vessels (1) |
178,795 |
|
1,500 |
|
| Depreciation and amortization |
95,440 |
|
74,287 |
|
| Partnership's share of equity accounted joint
venture's distributable cash flow net of estimated maintenance
capital expenditures (2) |
11,091 |
|
4,422 |
|
| Deferred income tax expense (recovery) |
1,213 |
|
(674 |
) |
| Amortization of non-cash portion of revenue
contracts |
(4,205 |
) |
(3,997 |
) |
| Distributions on preferred units |
(8,038 |
) |
(12,386 |
) |
| Equity income |
(8,346 |
) |
(3,425 |
) |
| Unrealized (loss) gain on non-designated derivative
instruments (3) |
(14,914 |
) |
11,192 |
|
| Estimated maintenance capital expenditures |
(53,320 |
) |
(32,676 |
) |
| Unrealized foreign exchange and other,
net |
511 |
|
12,213 |
|
| Distributable cash flow before non-controlling
interests |
29,735 |
|
33,990 |
|
| Non-controlling interests' share of
DCF |
(4,408 |
) |
(6,748 |
) |
| Distributable Cash Flow |
25,327 |
|
27,242 |
|
| Amount attributable to the General
Partner |
(31 |
) |
(31 |
) |
| Limited Partners' Distributable Cash
Flow |
25,296 |
|
27,211 |
|
| Weighted-average number of common units
outstanding |
410,310,586 |
|
151,364,950 |
|
| Distributable Cash Flow per Limited
Partner Unit |
0.06 |
|
0.18 |
|
| (1) |
|
See footnote (3) of the
summary consolidated statements of (loss) income included in this
release for further details. |
| |
|
|
| (2) |
|
Estimated maintenance
capital expenditures relating to the Partnership’s equity-accounted
joint ventures were $5.5 million and $1.0 million for the three
months ended June 30, 2018 and 2017, respectively. |
| |
|
|
| (3) |
|
Derivative instruments
include interest rate swaps and foreign currency forward
contracts. |
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Appendix C - Supplemental Segment Information |
| (in thousands of U.S. Dollars) |
| |
| |
Three Months Ended June 30,
2018 |
| |
(unaudited) |
| |
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker
Segment |
Total |
| |
|
|
|
|
|
|
|
|
Revenues |
124,053 |
|
142,047 |
|
33,840 |
|
— |
|
15,510 |
|
4,904 |
|
320,354 |
|
| Voyage
expenses |
— |
|
(26,951 |
) |
(202 |
) |
(4 |
) |
(6,290 |
) |
(3,039 |
) |
(36,486 |
) |
| Vessel
operating expenses |
(55,040 |
) |
(37,982 |
) |
(10,360 |
) |
(893 |
) |
(6,023 |
) |
— |
|
(110,298 |
) |
|
Time-charter hire expenses |
— |
|
(9,277 |
) |
— |
|
— |
|
— |
|
(4,187 |
) |
(13,464 |
) |
|
Depreciation and amortization |
(37,179 |
) |
(39,840 |
) |
(11,643 |
) |
(1,653 |
) |
(5,125 |
) |
— |
|
(95,440 |
) |
| General and
administrative |
(8,140 |
) |
(6,849 |
) |
(351 |
) |
(1,311 |
) |
(1,149 |
) |
(90 |
) |
(17,890 |
) |
| (Write-down) and gain on sale of vessels |
(180,200 |
) |
1,405 |
|
— |
|
— |
|
— |
|
— |
|
(178,795 |
) |
| (Loss) income from vessel
operations |
(156,506 |
) |
22,553 |
|
11,284 |
|
(3,861 |
) |
(3,077 |
) |
(2,412 |
) |
(132,019 |
) |
| |
|
|
|
|
|
|
|
| |
Three Months Ended June 30,
2017 |
| |
(unaudited) |
| |
FPSO Segment |
Shuttle Tanker Segment |
FSO Segment |
UMS Segment |
Towage Segment |
Conventional Tanker
Segment |
Total |
| |
|
|
|
|
|
|
|
|
Revenues |
110,247 |
|
132,964 |
|
10,798 |
|
3,089 |
|
4,229 |
|
3,465 |
|
264,792 |
|
| Voyage
expenses |
— |
|
(17,319 |
) |
(430 |
) |
— |
|
(2,409 |
) |
(38 |
) |
(20,196 |
) |
| Vessel
operating expenses |
(35,079 |
) |
(28,410 |
) |
(4,693 |
) |
(17,333 |
) |
(4,190 |
) |
— |
|
(89,705 |
) |
|
Time-charter hire expenses |
— |
|
(15,387 |
) |
— |
|
— |
|
— |
|
(4,120 |
) |
(19,507 |
) |
|
Depreciation and amortization |
(36,497 |
) |
(30,049 |
) |
(2,588 |
) |
(1,634 |
) |
(3,519 |
) |
— |
|
(74,287 |
) |
| General and
administrative |
(7,070 |
) |
(3,506 |
) |
(409 |
) |
(1,172 |
) |
(1,132 |
) |
(90 |
) |
(13,379 |
) |
| Write-down
of vessels |
— |
|
— |
|
(1,500 |
) |
— |
|
— |
|
— |
|
(1,500 |
) |
| Income (loss) from vessel
operations |
31,601 |
|
38,293 |
|
1,178 |
|
(17,050 |
) |
(7,021 |
) |
(783 |
) |
46,218 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Appendix D - Reconciliation of Non-GAAP Financial
Measures |
| Cash Flow From (Used For) Vessel Operations From Consolidated
Vessels |
| (in thousands of U.S. Dollars) |
| |
| |
Three Months Ended |
| |
June 30, 2018 |
| |
(unaudited) |
| |
|
Shuttle |
|
|
|
Conventional |
|
| |
FPSO |
Tanker |
FSO |
UMS |
Towage |
Tanker |
|
| |
Segment |
Segment |
Segment |
Segment |
Segment |
Segment |
Total |
| (Loss)
income from vessel operations |
|
|
|
|
|
|
|
| (See Appendix C) |
(156,506 |
) |
22,553 |
|
11,284 |
|
(3,861 |
) |
(3,077 |
) |
(2,412 |
) |
(132,019 |
) |
|
Depreciation and amortization |
37,179 |
|
39,840 |
|
11,643 |
|
1,653 |
|
5,125 |
|
— |
|
95,440 |
|
| Realized
gain (loss) from the |
|
|
|
|
|
|
|
| settlements of non-designated |
|
|
|
|
|
|
|
| foreign currency forward contracts |
271 |
|
113 |
|
— |
|
— |
|
(14 |
) |
— |
|
370 |
|
|
Amortization of non-cash portion of |
|
|
|
|
|
|
|
| revenue contracts |
(4,205 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(4,205 |
) |
| Write-down
and (gain) on sale of vessels |
180,200 |
|
(1,405 |
) |
— |
|
— |
|
— |
|
— |
|
178,795 |
|
| Falcon
Spirit revenue accounted for |
|
|
|
|
|
|
|
| as a direct financing lease |
— |
|
— |
|
(291 |
) |
— |
|
— |
|
— |
|
(291 |
) |
| Falcon
Spirit cash flow from |
|
|
|
|
|
|
|
| time-charter contracts |
— |
|
— |
|
1,596 |
|
— |
|
— |
|
— |
|
1,596 |
|
|
Cash flow from (used for) vessel |
|
|
|
|
|
|
|
| operations from consolidated
vessels |
56,939 |
|
61,101 |
|
24,232 |
|
(2,208 |
) |
2,034 |
|
(2,412 |
) |
139,686 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
Three Months Ended |
| |
June 30, 2017 |
| |
(unaudited) |
| |
|
Shuttle |
|
|
|
Conventional |
|
| |
FPSO |
Tanker |
FSO |
UMS |
Towage |
Tanker |
|
| |
Segment |
Segment |
Segment |
Segment |
Segment |
Segment |
Total |
| Income
(loss) from vessel operations |
|
|
|
|
|
|
|
| (See Appendix C) |
31,601 |
|
38,293 |
|
1,178 |
|
(17,050 |
) |
(7,021 |
) |
(783 |
) |
46,218 |
|
|
Depreciation and amortization |
36,497 |
|
30,049 |
|
2,588 |
|
1,634 |
|
3,519 |
|
— |
|
74,287 |
|
| Realized
(loss) gain from the |
|
|
|
|
|
|
|
| settlements of non-designated |
|
|
|
|
|
|
|
| foreign currency forward contracts |
(86 |
) |
(279 |
) |
— |
|
— |
|
56 |
|
— |
|
(309 |
) |
|
Amortization of non-cash portion of |
|
|
|
|
|
|
|
| revenue contracts |
(3,997 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(3,997 |
) |
| Termination
of Arendal Spirit UMS |
|
|
|
|
|
|
|
| charter contract |
— |
|
— |
|
— |
|
8,888 |
|
— |
|
— |
|
8,888 |
|
| Write-down
of vessels |
— |
|
— |
|
1,500 |
|
— |
|
— |
|
— |
|
1,500 |
|
| Falcon
Spirit revenue accounted for |
|
|
|
|
|
|
|
| as a direct financing lease |
— |
|
— |
|
(366 |
) |
— |
|
— |
|
— |
|
(366 |
) |
| Falcon
Spirit cash flow from |
|
|
|
|
|
|
|
| time-charter contracts |
— |
|
— |
|
1,819 |
|
— |
|
— |
|
— |
|
1,819 |
|
|
Cash flow from (used for) vessel |
|
|
|
|
|
|
|
| operations from consolidated
vessels |
64,015 |
|
68,063 |
|
6,719 |
|
(6,528 |
) |
(3,446 |
) |
(783 |
) |
128,040 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Teekay Offshore Partners L.P. |
| Appendix E - Reconciliation of Non-GAAP Financial
Measures |
| Cash Flow From Vessel Operations From Equity-Accounted
Vessels |
| (in thousands of U.S. Dollars) |
| |
| |
Three Months Ended |
Three Months Ended |
| |
June 30, 2018 |
June 30, 2017 |
| |
(unaudited) |
(unaudited) |
| |
At 100% |
Partnership's 50% |
At 100% |
Partnership's 50% |
|
Revenues |
61,794 |
|
30,897 |
|
23,653 |
|
11,827 |
|
| Vessel and
other operating expenses |
(16,682 |
) |
(8,341 |
) |
(10,532 |
) |
(5,266 |
) |
|
Depreciation and amortization |
(15,455 |
) |
(7,728 |
) |
(4,400 |
) |
(2,200 |
) |
| Income from
vessel operations of equity-accounted vessels |
29,657 |
|
14,828 |
|
8,721 |
|
4,361 |
|
| Net
interest expense (1) |
(11,849 |
) |
(5,925 |
) |
(1,859 |
) |
(930 |
) |
| Realized
and unrealized gain (loss) on derivative instruments (2) |
357 |
|
179 |
|
(273 |
) |
(137 |
) |
| Foreign currency exchange (loss) gain |
(987 |
) |
(494 |
) |
85 |
|
43 |
|
| Total other
items |
(12,479 |
) |
(6,240 |
) |
(2,047 |
) |
(1,024 |
) |
| Net income
/ equity income of equity-accounted vessels before income tax
expense |
17,178 |
|
8,588 |
|
6,674 |
|
3,337 |
|
| Income tax (expense) recovery |
(484 |
) |
(242 |
) |
175 |
|
88 |
|
| Net income
/ equity income of equity-accounted vessels |
16,694 |
|
8,346 |
|
6,849 |
|
3,425 |
|
| Income from
vessel operations of equity-accounted vessels |
29,657 |
|
14,828 |
|
8,721 |
|
4,361 |
|
|
Depreciation and amortization |
15,455 |
|
7,728 |
|
4,400 |
|
2,200 |
|
| Cash flow from vessel operations from
equity-accounted vessels |
45,112 |
|
22,556 |
|
13,121 |
|
6,561 |
|
| (1) |
|
Net interest expense
for the three months ended June 30, 2018 includes a realized loss
of $0.6 million ($0.3 million at the Partnership's 50% share)
related to interest rate swaps designated and qualifying as cash
flow hedges for the Pioneiro de Libra FPSO unit. |
| |
|
|
| (2) |
|
Realized and unrealized
gain (loss) on derivative instruments for the three months ended
June 30, 2018 and 2017 includes an unrealized gain of $0.4 million
($0.2 million at the Partnership’s 50% share) and $0.9 million
($0.4 million at the Partnership’s 50% share), respectively,
related to interest rate swaps for the Cidade de Itajai FPSO
unit. |
|
|
|
|
Forward Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect
to certain future events and performance, including: the timing and
cost of delivery and start-up of various newbuildings and the
commencement of related contracts; the impact of the Partnership’s
newbuilding order on its position in the North Sea CoA shuttle
tanker market; fuel consumption and emissions for the shuttle
tanker newbuildings; future forward revenues; the impact of
contract extensions on the Partnership’s future cash flows;
potential redeployment opportunities; a potential global energy and
offshore market recovery and the Partnership’s ability to benefit
from such recovery; the continued support of the Partnership’s
sponsors; and the extension of the Arendal Spirit UMS loan
facility. The following factors are among those that could cause
actual results to differ materially from the forward-looking
statements, which involve risks and uncertainties, and that should
be considered in evaluating any such statement: changes in
exploration, production and storage of offshore oil and gas, either
generally or in particular regions that would impact expected
future growth, particularly in or related to North Sea, Brazil and
East Coast of Canada offshore fields; significant changes in oil
prices; variations in expected levels of field maintenance;
increased operating expenses; potential early termination of
contracts; shipyard delivery delays and cost overruns; delays in
the commencement of charter contracts; the inability of charterers
to make future charter payments; the inability of the Partnership
to renew or replace long-term contracts on existing vessels; the
ability to fund the Partnership’s remaining capital commitments and
debt maturities; and other factors discussed in Teekay Offshore’s
filings from time to time with the SEC, including its Report on
Form 20-F for the fiscal year ended December 31, 2017. The
Partnership expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the
Partnership’s expectations with respect thereto or any change in
events, conditions or circumstances on which any such statement is
based.
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