UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________

FORM 6-K
_________________________

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
_________________________

Date of Report: February 6, 2020

Commission file number 1- 33198
_________________________

TEEKAY OFFSHORE PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
_________________________

4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda
(Address of principal executive office)
_________________________

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ý           Form 40- F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).
Yes ¨            No ý
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).
Yes ¨            No ý



















Item 1 — Information Contained in this Form 6-K Report

Attached as Exhibit 1 is a copy of an announcement of Teekay Offshore Partners L.P. dated February 6, 2020.
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TEEKAY OFFSHORE PARTNERS L.P.
By: Teekay Offshore GP L.L.C., its general partner
Date: February 6, 2020 By:   /s/ Edith Robinson
  Edith Robinson
Secretary



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TEEKAY OFFSHORE PARTNERS REPORTS 
FOURTH QUARTER AND ANNUAL 2019 RESULTS
Revenues of $312.1 million and a net loss of $285.5 million, or $(0.71) per common unit, in the fourth quarter of 2019
Adjusted net income attributable to the partners and preferred unitholders(1) of $19.8 million, and adjusted net income attributable to the limited partners' interest of $0.03 per common unit (excluding items listed in Appendix B to this release) in the fourth quarter of 2019
Adjusted EBITDA(1) of $167.1 million in the fourth quarter of 2019
Net loss of $285.5 million was impacted by an impairment charge of $342.4 million mainly relating to one FPSO unit and the Arendal Spirit UMS
In January 2020, completed the plan of merger with Brookfield relating to the Partnership's common units
In January 2020, took delivery of the first E-shuttle tanker newbuilding, the Aurora Spirit
Hamilton, Bermuda, February 6, 2020 - Teekay Offshore GP L.L.C. (TOO GP), the general partner of Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership), today reported the Partnership’s results for the quarter and year ended December 31, 2019.

Consolidated Financial Summary
Three Months Ended Year Ended
December 31, September 30, December 31, December 31, December 31,
(in thousands of U.S. Dollars, except per unit data) 2019
2019 (2)
2018 2019 2018
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
GAAP FINANCIAL RESULTS
Revenues 312,142    299,447    445,213    1,268,000    1,416,424   
Net (loss) income (285,549)   (34,769)   67,842    (350,895)   (123,945)  
Limited partners' interest in net (loss) income per
common unit - basic (0.71)   (0.10)   0.14    (0.92)   (0.36)  
NON-GAAP FINANCIAL RESULTS
Adjusted EBITDA (1)
167,147    157,660    289,548    671,898    782,521   
Adjusted net income attributable to the partners
preferred unitholders (1)
19,796    4,659    130,463    58,696    149,587   
Limited partners' interest in adjusted net income
per common unit (1)
0.03    (0.01)   0.30    0.06    0.29   
(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 third quarter of 2019 attached as Exhibit 1 to the Form 6-K filed with the Securities and Exchange Commission on November 7, 2019 for a reconciliation of these non-GAAP measures to the most directly comparable financial measures under GAAP.

Fourth Quarter of 2019 Compared to Fourth Quarter of 2018
Revenues were $312 million in the fourth quarter of 2019, a decrease of $133 million, compared to $445 million in the same quarter of the prior year, primarily due to $91 million of revenue related to the positive settlement with Petróleo Brasileiro S.A. and certain of its subsidiaries (together Petrobras) recorded during the fourth quarter of 2018, a decrease of $21 million due to the amortization of non-cash deferred revenue relating to the Piranema Spirit FPSO unit during the fourth quarter of 2018, a $12 million decrease due to fewer vessels in our CoA shuttle tanker fleet during the fourth quarter of 2019 and the redelivery of an older shuttle tanker in August 2019 and an $8 million decrease due to the completion of the Ostras FPSO charter contract in March 2019.

Teekay Offshore Partners L.P. Investor Relations Tel: +47 51 44 27 00 www.teekayoffshore.com
4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda


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Net loss increased to $286 million in the fourth quarter of 2019 compared to net income of $68 million in the same quarter of the prior year. A $326 million increase in the net write-down of vessels and the decrease in revenues described above was partially offset by a $61 million increase in unrealized fair value gains mainly related to interest rate swap derivative instruments, reflecting increased interest rate levels in the fourth quarter of 2019 compared to decreased interest rate levels in the fourth quarter of 2018, a $21 million increase in equity income, a $10 million increase in foreign currency exchange gains, a $6 million decrease in depreciation and amortization expense due to the sale of certain shuttle tankers and a $5 million decrease in interest expense.

Non-GAAP Adjusted EBITDA was $167 million in the fourth quarter of 2019, representing a decrease of $123 million, compared to $290 million in the fourth quarter of 2018. This decrease was primarily due to the decrease in revenues, as explained above, partially offset by a $9 million increase in earnings from equity-accounted joint ventures.

Non-GAAP Adjusted Net Income was $20 million in the fourth quarter of 2019, a decrease of $110 million compared to $130 million in the fourth quarter of 2018, primarily due to the $123 million decrease in Non-GAAP Adjusted EBITDA, partially offset by a $6 million decrease in depreciation and amortization expense and a $5 million decrease in interest expense.

Fourth Quarter of 2019 Compared to Third Quarter of 2019
Revenues increased by $13 million to $312 million for the fourth quarter of 2019, compared to $299 million for the third quarter of 2019, mainly due to increased utilization and rates in the shuttle tanker and towage fleets, and net loss increased by $251 million in the fourth quarter of 2019, compared to the prior quarter. The net loss during the fourth quarter of 2019 was impacted by a $342 million write-down of vessels. This was partially offset by the increase in revenues, as explained above, a $39 million increase in the consolidated unrealized fair value gains mainly related to interest rate swap derivative instruments, a $23 million increase in equity income due to the recognition of a maintenance bonus during the fourth quarter of 2019 and unrealized fair value gains on derivative instruments within the equity-accounted joint ventures, and an $11 million increase in foreign currency exchange gains.

Non-GAAP Adjusted EBITDA was $167 million in the fourth quarter of 2019, representing an increase of $9 million compared to $158 million in the third quarter of 2019. The increase was primarily due to an $8 million increase in earnings in the FPSO segment mainly from the recognition of the maintenance bonus during the fourth quarter of 2019 in the Pioneiro de Libra FPSO equity-accounted joint venture.

Non-GAAP Adjusted Net Income was $20 million in the fourth quarter of 2019, an increase of $15 million compared to $5 million in the third quarter of 2019 due to the increase in Non-GAAP Adjusted EBITDA and a $6 million decrease in interest expense.

Fiscal Year 2019 Compared to Fiscal Year 2018
Revenues were $1,268 million for the year ended December 31, 2019, compared to $1,416 million for the prior fiscal year. The decrease in revenues was primarily due to $91 million of revenue related to the positive settlement with Petrobras recorded during the fourth quarter of 2018, a $33 million decrease due to reduced charter rates under the Piranema Spirit FPSO contract extension and the amortization of non-cash deferred revenue in 2018, and a $30 million decrease due to the expiration of the Ostras FPSO charter contract in March 2019.

Net loss increased by $227 million for the year ended December 31, 2019 compared to the prior fiscal year mainly due to the $148 million decrease in revenues explained above, a $109 million increase in the net write-down of vessels and a $98 million increase in realized and unrealized losses on derivative instruments, partially offset by the absence in 2019 of $55 million of losses on debt repurchases, a $30 million decrease in operating expenses, a $23 million decrease in depreciation and amortization expense, a $15 million decrease in income tax expense and a $12 million increase in foreign currency exchange gains.

Non-GAAP Adjusted EBITDA was $672 million for the year ended December 31, 2019, compared to $783 million in the prior fiscal year, representing a decrease of $111 million. This decrease was due to the decrease in revenues,
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as explained above, in particular the absence of the $91 million Petrobras settlement, partially offset by a $30 million decrease in operating expenses.

Non-GAAP Adjusted Net Income was $59 million for the year ended December 31, 2019, a decrease of $91 million compared to $150 million for 2018, primarily due to the decrease in Non-GAAP Adjusted EBITDA, partially offset by a $23 million decrease in depreciation and amortization expense.

Please refer to “Operating Results” for additional information on variances by segment and Appendices A and B for reconciliations between GAAP net (loss) income and Non-GAAP Adjusted EBITDA and Adjusted Net Income, respectively.

Summary of Recent Events

Delivery of Shuttle Tanker Newbuilding

In January 2020, the Partnership took delivery of one LNG-fueled Aframax shuttle tanker newbuilding, the Aurora Spirit. The vessel was constructed based on the Partnership's E-shuttle design, which incorporates technologies intended to increase fuel efficiency and reduce emissions, including LNG fuel and recovered volatile organic compounds (VOCs) as secondary fuel, as well as battery packs for flexible power distribution and blackout prevention. The vessel will commence operations under an existing master agreement with Equinor in the North Sea.

Completion of Brookfield Acquisition by Merger

On January 22, 2020, Brookfield Business Partners L.P., together with certain of its affiliates and institutional partners (collectively, Brookfield), completed its acquisition by merger (the Merger) of all of the outstanding publicly held and listed common units representing limited partner interests of the Partnership (common units) held by parties other than Brookfield (unaffiliated unitholders) pursuant to the agreement and plan of merger (the Merger Agreement) among the Partnership, TOO GP and certain members of Brookfield.

Under the terms of the Merger Agreement, common units held by unaffiliated unitholders were converted into the right to receive $1.55 in cash per common unit (the cash consideration), other than common units held by unaffiliated unitholders who elected to receive the equity consideration (as defined below). As an alternative to receiving the cash consideration, each unaffiliated unitholder had the option to elect to forego the cash consideration and instead receive one newly designated unlisted Class A Common Unit of the Partnership per common unit (the equity consideration). The Class A Common Units are economically equivalent to the common units held by Brookfield following the Merger, but have limited voting rights and limited transferability.

As a result of the Merger, Brookfield owns 100% of the Class B Common Units, representing approximately 98.7% of the outstanding common units of the Partnership. All of the Class A Common Units, representing approximately 1.3% of the outstanding common units of the Partnership as of the closing of the Merger, are held by the unaffiliated unitholders who elected to receive the equity consideration in respect of their common units.

As a result of the Merger, and that the exercise price of each of the outstanding warrants exceeded the cash consideration, the warrants were automatically canceled and ceased to exist. No consideration was delivered in respect thereof. Pursuant to the terms of the Merger Agreement, the Partnership’s outstanding preferred units were unchanged and remain outstanding following the Merger.

Trading of the Partnership's common units was suspended on the New York Stock Exchange (the NYSE) before the beginning of trading on January 23, 2020. The Partnership requested that the NYSE file a Form 25 with the United States Securities and Exchange Commission (the SEC) notifying the SEC of the delisting of its common units on the NYSE and the deregistration of the common units. The deregistration of the common units will become effective 90 days after the filing of the Form 25 or such shorter period as may be determined by the SEC.



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Plan to Rebrand as Altera Infrastructure

In January 2020, following the closing of the Merger, the Partnership announced that it intends to change its name in due course to Altera Infrastructure L.P. and, effective from March 24, 2020, to rebrand the consolidated group of companies under the new umbrella of Altera Infrastructure.

Changes to Board of Directors

In January 2020, the Partnership announced the following changes to the Board of Directors of TOO GP:

The retirement of David L. Lemmon as a TOO GP Director and a member of the Audit, Compensation and Conflicts Committees, effective January 23, 2020, after 14 years with the TOO GP’s Board of Directors.
Mr. Lemmon's replacement on the Audit Committee by Bill Utt, who is Chairman of the Board and Chairman of the Governance Committee.
The prospective retirement of Kenneth Hvid, CEO of Teekay Corporation, as a TOO GP Director effective June 17, 2020, after nine years with TOO GP's Board of Directors.

Financing

In October 2019, a subsidiary of the Partnership, Teekay Shuttle Tankers L.L.C., successfully placed $125 million of senior unsecured green floating-rate bonds due in October 2024. The bonds carry a coupon of three-month LIBOR plus 6.50%. The proceeds from the bonds will be to partially fund four LNG-fueled shuttle tankers, one of which delivered to the Partnership in January 2020, and the remaining of which vessels are currently under construction with expected deliveries through 2021.

In October 2019, the Partnership secured a $100 million bridge term loan to provide pre- and post-delivery financing for a shuttle tanker newbuilding to operate on the East Coast of Canada, which matures in August 2022. The debt facility bears interest at a rate of LIBOR plus 250 basis points until March 2020 and increases by 25 basis points per quarter thereafter. The Partnership intends to refinance the bridge loan into the existing East Coast Canada shuttle financing secured by the three vessels in operation. The facility remains undrawn.

Økokrim Investigation

In January 2020, Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) and the local Stavanger police raided Teekay Shipping Norway AS' (a subsidiary of the Partnership) premises, based on a search warrant issued pursuant to suspected violations of Norwegian pollution and export laws in connection with the export of the Navion Britannia shuttle tanker from the Norwegian Continental Shelf in March 2018. The Partnership has not identified such violations but continues to evaluate any potential liabilities together with advisors.

Liquidity Update

As of December 31, 2019, the Partnership had total liquidity of $304 million, including $105 million undrawn on a revolving credit facility, an increase of $33 million compared to September 30, 2019. The increase in liquidity was primarily due to the Partnership's issuance of $125 million of senior unsecured green bonds during the fourth quarter of 2019.


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Operating Results

The commentary below compares certain results of our operating segments (including the non-GAAP measure of Adjusted EBITDA) for the three months ended December 31, 2019 to the same period of the prior year, unless otherwise noted.

FPSO Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues 115,258    113,362    143,651   
Adjusted EBITDA 81,739    73,550    108,543   

Adjusted EBITDA (including Adjusted EBITDA from equity-accounted vessels) decreased by $27 million primarily due to the absence of $21 million in the amortization of non-cash deferred revenue relating to the Piranema Spirit FPSO unit and a decrease of $8 million due to the expiration of the charter contract of the Ostras FPSO unit in March 2019.

Adjusted EBITDA for the fourth quarter of 2019 increased by $8 million, compared to the third quarter of 2019, primarily due the recognition of a maintenance bonus during the fourth quarter of 2019 relating to the Libra FPSO unit in an equity-accounted joint venture.

Shuttle Tanker Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 (2) 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues 141,541    133,659    206,212   
Adjusted EBITDA 65,339    64,421    124,038   

Adjusted EBITDA decreased by $59 million mainly due to $55 million of revenues related to the positive settlement with Petrobras received in the fourth quarter of the prior year and a $5 million decrease due to the redelivery of the Stena Sirita from its charter contract in August 2019, which had reached the end of its estimated useful life.

Adjusted EBITDA for the fourth quarter of 2019 was generally in line with the third quarter of 2019.

FSO Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues 35,690    35,168    36,734   
Adjusted EBITDA 22,415    23,703    25,508   

Adjusted EBITDA decreased by $3 million mainly due to higher repair and maintenance expenses.

Adjusted EBITDA for the fourth quarter of 2019 was generally in line with the third quarter of 2019.


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UMS Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues 446    441    36,536   
Adjusted EBITDA (2,310)   (1,574)   35,011   

Adjusted EBITDA decreased by $37 million due to the absence of $37 million of revenues related to the positive settlement with Petrobras received in the same quarter of the prior year.

Adjusted EBITDA for the fourth quarter of 2019 was generally in line with the third quarter of 2019.

Towage Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues 19,207    16,817    15,252   
Adjusted EBITDA 1,467    (1,198)   (1,202)  

Adjusted EBITDA increased by $3 million compared to both prior periods presented due to higher utilization.

Conventional Tanker Segment
Three Months Ended
December 31, September 30, December 31,
2019 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
Revenues —    —    6,828   
Adjusted EBITDA —    —    (880)  

The Partnership redelivered the two in-chartered vessels to their owners in March and April 2019, respectively, and no longer has activity in the conventional tanker segment.

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Teekay Offshore’s Fleet
The following table summarizes Teekay Offshore’s fleet as of February 6, 2020. In comparison to the previously-reported fleet table in the release for the third quarter of 2019, Teekay Offshore's fleet decreased by two vessels due to the sale of the Navion Hispania and Stena Sirita shuttle tankers in January 2020, both of which vessels had reached the end of their estimated useful lives.

Number of Vessels
Owned Vessels Chartered-in Vessels Committed Newbuildings Total
FPSO Segment   (i)   —    —     
Shuttle Tanker Segment 24    (ii)       (iii)   32   
FSO Segment   —    —     
UMS Segment   —    —     
Towage Segment 10    —    —    10   
Total 48        56   
(i)Includes two FPSO units, the Cidade de Itajai and Libra, in which Teekay Offshore’s ownership interest is 50 percent.
(ii)Includes four 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 through early-2022, one of which will operate under Teekay Offshore's master agreement with Equinor in the North Sea, four of which will join Teekay Offshore's CoA portfolio in the North Sea and one which will operate under Teekay Offshore's existing contracts on the East Coast of Canada.

Conference Call
The Partnership plans to host a conference call on Thursday, February 6, 2020 at 12:00 p.m. (ET) to discuss the results for the fourth quarter of 2019. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

By dialing 1-800-367-2403 or +1 (647) 490-5367, if outside North America, and quoting conference ID code 3380755
By accessing the webcast, which will be available on Teekay Offshore's website at www.teekayoffshore.com (the archive will remain on the website for a period of one year).

An accompanying Fourth Quarter 2019 Earnings Presentation will also be available at www.teekayoffshore.com in advance of the conference call start time.

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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, among others: the timing and certainty of the delisting and deregistration of the Partnership's common units; the timing of the retirement of Kenneth Hvid from TOO GP's Board of Directors; the expected use of proceeds from the Partnership's issuance of green bonds; the intended refinancing of the Partnership's bridge loan; and the timing of shuttle tanker newbuilding deliveries and the commencement of related contracts. 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; shipyard delivery delays and cost overruns; delays in the commencement of charter contracts; 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, 2018. 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.

About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is a leading international midstream services provider to the offshore oil production industry, primarily 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 has consolidated assets of approximately $4.9 billion, comprised of 56 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 and a unit for maintenance and safety (UMS). The majority of Teekay Offshore’s fleet is employed on medium-term, stable contracts. Brookfield owns 100 percent of Teekay Offshore’s general partner.

Teekay Offshore's preferred units trade on the New York Stock Exchange under the symbols "TOO PR A", "TOO PR B" and "TOO PR E", respectively.

For Investor Relations enquiries contact:

Jan Rune Steinsland, Chief Financial Officer
Tel: +47 51 44 27 00
Website: www.teekayoffshore.com

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Teekay Offshore Partners L.P.
Summary Consolidated Statements of (Loss) Income
Three Months Ended Year Ended
December 31, September 30, December 31, December 31, December 31,
(in thousands of U.S. Dollars, except per unit data) 2019 2019 2018 2019 2018
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenues 312,142    299,447    445,213    1,268,000    1,416,424   
Voyage expenses (32,314)   (30,906)   (39,402)   (129,910)   (151,808)  
Vessel operating expenses (107,614)   (99,400)   (108,592)   (426,951)   (437,671)  
Time-charter hire expenses (10,236)   (11,119)   (13,281)   (44,427)   (52,616)  
Depreciation and amortization (84,911)   (86,336)   (91,023)   (349,379)   (372,290)  
General and administrative (25,094)   (16,947)   (14,335)   (76,245)   (65,427)  
(Write-down) and gain on sale of vessels (342,383)   (1,498)   (16,414)   (332,125)   (223,355)  
Restructuring recovery (charge) —    —    379    —    (1,520)  
Operating (loss) income (290,410)   53,241    162,545    (91,037)   111,737   
Interest expense (48,085)   (53,767)   (53,424)   (205,709)   (199,395)  
Interest income 1,012    1,776    1,215    5,111    3,598   
Realized and unrealized gain (loss)
on derivative instruments 14,634    (27,600)   (40,465)   (85,195)   12,808   
Equity income 26,135    3,385    5,237    32,794    39,458   
Foreign currency exchange gain (loss) 6,359    (5,387)   (3,344)   2,193    (9,413)  
Losses on debt repurchases —    —    —    —    (55,479)  
Other income (expense) - net 870    (101)   (40)   (1,225)   (4,602)  
(Loss) income before income tax expense (289,485)   (28,453)   71,724    (343,068)   (101,288)  
Income tax recovery (expense) 3,936    (6,316)   (3,882)   (7,827)   (22,657)  
Net (loss) income (285,549)   (34,769)   67,842    (350,895)   (123,945)  
Non-controlling interests in net (loss) income 147    (1,817)   1,476    (1,384)   (7,161)  
Preferred unitholders' interest in net (loss) income 8,038    8,038    8,038    32,150    31,485   
General partner’s interest in net (loss) income (2,223)   (311)   443    (2,891)   (1,128)  
Limited partners’ interest in net (loss) income (291,511)   (40,679)   57,885    (378,770)   (147,141)  
Limited partner's interest in net (loss) income per
common unit
 - basic (0.71)   (0.10)   0.14    (0.92)   (0.36)  
 - diluted (0.71)   (0.10)   0.12    (0.92)   (0.36)  
Weighted-average number of common units
 - basic 411,158,400    410,801,717    410,314,977    410,727,035    410,261,239   
 - diluted 411,158,400    410,801,717    475,565,613    410,727,035    410,261,239   
Total number of common units outstanding
at end of period 411,148,991    411,188,338    410,314,977    411,148,991    410,314,977   

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Teekay Offshore Partners L.P.
Consolidated Balance Sheets
As at As at As at
December 31, 2019 September 30, 2019 December 31, 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited)
ASSETS
Current
Cash and cash equivalents 199,388    270,827    225,040   
Restricted cash 17,798    17,961    8,540   
Accounts receivable 204,020    168,593    141,903   
Vessels held for sale 15,374    19,756    12,528   
Prepaid expenses 29,887    28,136    32,199   
Due from related parties —    —    58,885   
Other current assets 7,467    5,830    11,879   
Total current assets 473,934    511,103    490,974   
Restricted cash - long-term 89,070    —    —   
Vessels and equipment
At cost, less accumulated depreciation 3,511,758    3,929,521    4,196,909   
Advances on newbuilding contracts 257,017    220,186    73,713   
Investment in equity-accounted joint ventures 234,627    212,589    212,202   
Deferred tax asset 7,000    2,146    9,168   
Due from related parties —    —    949   
Other assets 220,716    205,775    198,992   
Goodwill 129,145    129,145    129,145   
Total assets 4,923,267    5,210,465    5,312,052   
LIABILITIES AND EQUITY
Current
Accounts payable 56,699    105,377    16,423   
Accrued liabilities 140,976    111,861    129,896   
Deferred revenues 53,728    57,735    55,750   
Due to related parties 20,000    —    183,795   
Current portion of derivative instruments 18,956    18,061    23,290   
Current portion of long-term debt 353,238    358,781    554,336   
Other current liabilities 14,793    4,198    15,062   
Total current liabilities 658,390    656,013    978,552   
Long-term debt 2,825,712    2,704,685    2,543,406   
Derivative instruments 143,222    168,965    94,354   
Due to related parties —    125,000    —   
Other long-term liabilities 223,877    188,147    236,616   
Total liabilities 3,851,201    3,842,810    3,852,928   
Equity
Limited partners - common units 505,394    796,815    883,090   
Limited partners - preferred units 384,274    384,274    384,274   
General Partner 12,164    14,385    15,055   
Warrants 132,225    132,225    132,225   
Accumulated other comprehensive income 4,410    6,504    7,361   
Non-controlling interests 33,599    33,452    37,119   
Total equity 1,072,066    1,367,655    1,459,124   
Total liabilities and total equity 4,923,267    5,210,465    5,312,052   

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Teekay Offshore Partners L.P.
Consolidated Statements of Cash Flows
Year Ended
December 31, 2019 December 31, 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited)
Cash, cash equivalents and restricted cash provided by (used for)
OPERATING ACTIVITIES
Net loss (350,895)   (123,945)  
Adjustments to reconcile net loss to net operating cash flow:
Unrealized loss (gain) on derivative instruments   50,956    (53,419)  
Equity income, net of dividends received of $17,655 (2018 - $6,200)   (15,139)   (33,258)  
Depreciation and amortization    349,379    372,290   
Write-down and (gain) on sale of vessels   332,125    223,355   
Deferred income tax expense     3,161    18,606   
Amortization of in-process revenue contracts    (15,062)   (35,219)  
Expenditures for dry docking    (15,890)   (21,411)  
Other    (31,142)   16,871   
Change in non-cash working capital items related to operating activities 12,416    (83,227)  
Net operating cash flow 319,909    280,643   
FINANCING ACTIVITIES
Proceeds from long-term debt 492,517    734,698   
Scheduled repayments of long-term debt and settlement of related swaps (410,429)   (567,298)  
Prepayments of long-term debt and settlement of related swaps —    (457,426)  
Financing issuance costs (23,755)   (14,128)  
Proceeds from financing related to sales and leaseback of vessels 23,800    —   
Proceeds from issuance of preferred units —    120,000   
Expenses relating to equity offerings —    (3,997)  
Proceeds from credit facility due to related parties 95,000    125,000   
Prepayments of credit facility due to related parties (200,000)   —   
Cash distributions paid by the Partnership (32,150)   (46,675)  
Cash distributions paid by subsidiaries to non-controlling interests (3,636)   (12,048)  
Cash contributions paid from non-controlling interests to subsidiaries 1,500    1,500   
Other (865)   (964)  
Net financing cash flow (58,018)   (121,338)  
INVESTING ACTIVITIES   
Net payments for vessels and equipment, including advances on newbuilding
contracts and conversion costs (214,670)   (233,736)  
Proceeds from sale of vessels and equipment 33,341    30,049   
Investment in equity-accounted joint ventures (7,886)   (3,000)  
Direct financing lease payments received —    5,414   
Acquisition of companies from Teekay Corporation (net of cash acquired of $26.6    —    25,254   
million)
Net investing cash flow     (189,215)   (176,019)  
Increase (decrease) in cash, cash equivalents and restricted cash   72,676    (16,714)  
Cash, cash equivalents and restricted cash, beginning of the year 233,580    250,294   
Cash, cash equivalents and restricted cash, end of the year 306,256    233,580   

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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 (SEC). These non-GAAP financial measures, including Consolidated Adjusted EBITDA, Adjusted EBITDA and Adjusted Net Income, are intended to provide additional information and should not be considered substitutes 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. These non-GAAP measures are used by management, and the Partnership believes that these supplementary metrics assist investors and other users of its financial reports in comparing financial and operating performance of the Partnership across reporting periods and with other companies.

Non-GAAP Financial Measures
Consolidated Adjusted EBITDA represents net (loss) income before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel write-downs, gains or losses on the sale of vessels, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, losses on debt repurchases, and certain other income or expenses. Consolidated Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense, and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA also excludes equity income as the Partnership does not control its equity-accounted investments, and as a result, the Partnership does not have the unilateral ability to determine whether the cash generated by its equity-accounted investments is retained within the entity in which the Partnership holds the equity-accounted investment or distributed to the Partnership and other owners. In addition, the Partnership does not control the timing of any such distributions to the Partnership and other owners.

Adjusted EBITDA represents Consolidated Adjusted EBITDA further adjusted to include the Partnership's proportionate share of consolidated adjusted EBITDA from its equity-accounted joint ventures and to exclude the non-controlling interests' proportionate share of the consolidated adjusted EBITDA from the Partnership's consolidated joint ventures. Readers are cautioned when using Adjusted EBITDA as a liquidity measure as the amount contributed from Adjusted EBITDA from the equity-accounted investments may not be available or distributed to the Partnership in the periods such Adjusted EBITDA is generated by the equity-accounted investments. Please refer to Appendices A and C of this release for reconciliations of Adjusted EBITDA to net (loss) income and equity income, respectively, the most directly comparable GAAP measures reflected in the Partnership’s consolidated financial statements.

Adjusted Net Income represents net (loss) income adjusted to exclude the impact of certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance consistent with the calculation of Adjusted EBITDA. Adjusted Net Income includes realized gains or losses on interest rate swaps as an element of interest expense and excludes income tax expenses or recoveries from changes in valuation allowance or uncertain tax provisions. 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.

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Teekay Offshore Partners L.P.
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited) (unaudited)
Net (loss) income (285,549)   67,842    (350,895)   (123,945)  
Depreciation and amortization 84,911    91,023    349,379    372,290   
Interest expense, net of interest income 47,073    52,209    200,598    195,797   
Income tax (recovery) expense   (3,936)   3,882    7,827    22,657   
EBITDA    (157,501)   214,956    206,909    466,799   
Add (subtract) specific income statement items affecting EBITDA:
Write-down and (gain) on sale of vessels 342,383    16,414    332,125    223,355   
Realized and unrealized (gain) loss on derivative instruments (14,634)   40,465    85,195    (12,808)  
Equity income (26,135)   (5,237)   (32,794)   (39,458)  
Foreign currency exchange (gain) loss (6,359)   3,344    (2,193)   9,413   
Losses on debt repurchases —    —    —    55,479   
Other (income) expense - net (870)   40    1,225    4,602   
Realized loss on foreign currency forward contracts (1,495)   (1,470)   (5,054)   (1,228)  
Total adjustments 292,890    53,556    378,504    239,355   
Consolidated Adjusted EBITDA
135,389    268,512    585,413    706,154   
Add: Adjusted EBITDA from equity-accounted vessels (See Appendix C)
34,198    25,270    97,849    92,637   
Less: Adjusted EBITDA attributable to non-controlling interests (1)
(2,440)   (4,234)   (11,364)   (16,270)  
Adjusted EBITDA
167,147    289,548    671,898    782,521   
(1)Adjusted EBITDA attributable to non-controlling interests is summarized in the table below.
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited) (unaudited) (unaudited)
Net (loss) income attributable to non-controlling interests 147    1,476    (1,384)   (7,161)  
Depreciation and amortization 2,006    2,809    10,525    14,617   
Interest expense, net of interest income 308    439    1,470    2,064   
EBITDA attributable to non-controlling interests 2,461    4,724    10,611    9,520   
Add (subtract) specific income statement items affecting EBITDA:
(Gain) on sale and write-down of vessels —    (500)   746    6,711   
Foreign currency exchange (gain) loss (21)   10      39   
Total adjustments (21)   (490)   753    6,750   
Adjusted EBITDA attributable to non-controlling interests 2,440    4,234    11,364    16,270   





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Teekay Offshore Partners L.P.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
Three Months Ended Year Ended
December 31, December 31,
2019 2018 2019 2018
(in thousands of U.S. Dollars, except per unit data) (unaudited) (unaudited) (unaudited) (unaudited)
Net (loss) income   (285,549)   67,842    (350,895)   (123,945)  
Adjustments:   
Net (loss) income attributable to non-controlling interests   147    1,476    (1,384)   (7,161)  
Net (loss) income attributable to the partners and preferred unitholders (285,696)   66,366    (349,511)   (116,784)  
Add (subtract) specific items affecting net (loss) income:
Write-down and (gain) on sale of vessels 342,383    16,414    332,125    223,355   
Unrealized (gain) loss on derivative instruments (25,970)   34,719    50,956    (52,047)  
Realized loss on interest rate swap amendments 5,000    —    14,000    16,250   
Foreign currency exchange (gain) loss (1)
(6,359)   3,201    (2,629)   6,532   
Losses on debt repurchases —    —    —    55,479   
Other (income) expense - net (870)   40    1,225    4,602   
Deferred income tax (recovery) expense relating to Norwegian tax structure (4,900)   2,719    2,126    18,822   
Other adjustments (2)
—    —    —    2,164   
Adjustments related to equity-accounted vessels (3)
(3,813)   6,514    11,157    (2,036)  
Adjustments related to non-controlling interests (4)
21    490    (753)   (6,750)  
Total adjustments 305,492    64,097    408,207    266,371   
Adjusted net income attributable to the partners and preferred    19,796    130,463    58,696    149,587   
unitholders   
Preferred unitholders' interest in adjusted net income 8,038    8,038    32,150    31,485   
General Partner's interest in adjusted net income 89    931    202    898   
Limited partners' interest in adjusted net income 11,669    121,494    26,344    117,204   
Limited partners' interest in adjusted net income per common unit, basic 0.03    0.30    0.06    0.29   
Weighted-average number of common units outstanding, basic    411,158,400    410,314,977    410,727,035    410,261,239   
(1)Foreign currency exchange (gain) loss primarily relates to the Partnership's revaluation of all foreign currency-denominated assets and liabilities based on the prevailing exchange rate at the end of each reporting period and unrealized gain or loss related to the Partnership's cross-currency swaps related to the Partnership's Norwegian Krone (NOK) bonds, and excludes the realized gain or loss relating to the Partnership's cross-currency swaps and NOK bonds.
(2)Other adjustments primarily reflects voyage expenses, vessel operating expense, depreciation and amortization expense and general and administrative expenses relating to vessels undergoing upgrades or newbuilding vessels prior to the commencement of their respective charter contracts.
(3)Reflects the Partnership's proportionate share of specific items affecting the net income of the Cidade de Itajai FPSO unit and Libra FPSO unit equity-accounted joint ventures, including the unrealized gain or loss on derivative instruments and the foreign exchange gain or loss.
(4)Items affecting net (loss) income include amounts attributable to the Partnership’s consolidated non-wholly-owned subsidiaries. Each item affecting net (loss) income 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 adjustments relate to the gain on sale or write-down of vessels and foreign currency exchange gain or loss within the Partnership's consolidated non-wholly-owned subsidiaries.


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Teekay Offshore Partners L.P.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA From Equity-Accounted Vessels
Three Months Ended Three Months Ended
December 31, 2019 December 31, 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited)
At 100% Partnership's 50% At 100% Partnership's 50%
Revenues 84,543    42,272    77,566    38,783   
Vessel and other operating expenses (16,148)   (8,074)   (27,026)   (13,513)  
Depreciation and amortization (15,670)   (7,835)   (15,905)   (7,952)  
Operating income of equity-accounted vessels 52,725    26,363    34,635    17,318   
Net interest expense (6,870)   (3,435)   (11,441)   (5,721)  
Realized and unrealized gain (loss) on derivative instruments (1)
6,307    3,154    (13,325)   (6,663)  
Foreign currency exchange gain 406    203    314    157   
Total other items (157)   (78)   (24,452)   (12,227)  
Net income / equity income of equity-accounted vessels 52,568    26,285    10,183    5,091   
before income tax (expense) recovery
Income tax (expense) recovery (300)   (150)   291    146   
Net income / equity income of equity-accounted vessels 52,268    26,135    10,474    5,237   
Depreciation and amortization 15,670    7,835    15,905    7,952   
Net interest expense 6,870    3,435    11,441    5,721   
Income tax expense (recovery) 300    150    (291)   (146)  
EBITDA 75,108    37,555    37,529    18,764   
Add (subtract) specific items affecting EBITDA:
Realized and unrealized (gain) loss on derivative instruments (1)
(6,307)   (3,154)   13,325    6,663   
Foreign currency exchange gain (406)   (203)   (314)   (157)  
Adjusted EBITDA from equity-accounted vessels 68,395    34,198    50,540    25,270   
(1)Realized and unrealized (loss) gain on derivative instruments includes an unrealized gain of $7.2 million ($3.6 million at the Partnership’s 50% share) for the three months ended December 31, 2019 and an unrealized loss of $13.3 million ($6.7 million at the Partnership’s 50% share) for the three months ended December 31, 2018 related to interest rate swaps for the Cidade de Itajai and Libra FPSO units.






















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Year Ended Year Ended
December 31, 2019 December 31, 2018
(in thousands of U.S. Dollars) (unaudited) (unaudited)
At 100% Partnership's 50% At 100% Partnership's 50%
Revenues 261,574    130,787    262,205    131,103   
Vessel and other operating expenses (65,877)   (32,938)   (76,931)   (38,466)  
Depreciation and amortization (65,067)   (32,534)   (61,893)   (30,947)  
Operating income of equity-accounted vessels 130,630    65,315    123,381    61,690   
Net interest expense (1)
(39,499)   (19,749)   (37,166)   (18,585)  
Realized and unrealized loss on derivative instruments(2)
(25,053)   (12,527)   (7,047)   (3,523)  
Foreign currency exchange gain 10      636    318   
Total other items (64,542)   (32,271)   (43,577)   (21,790)  
Net income / equity income of equity-accounted vessels 66,088    33,044    79,804    39,900   
before income tax expense
Income tax expense (501)   (250)   (883)   (442)  
Net income / equity income of equity-accounted vessels 65,587    32,794    78,921    39,458   
Depreciation and amortization 65,067    32,534    61,893    30,947   
Net interest expense(1)
39,499    19,749    37,166    18,585   
Income tax expense 501    250    883    442   
EBITDA 170,654    85,327    178,863    89,432   
Add (subtract) specific items affecting EBITDA:
Realized and unrealized loss on derivative instruments(2)
25,053    12,527    7,047    3,523   
Foreign currency exchange gain (10)   (5)   (636)   (318)  
Adjusted EBITDA from equity-accounted vessels 195,697    97,849    185,274    92,637   
(1)Net interest expense for the year ended December 30, 2018 includes an unrealized gain of $9.7 million ($4.9 million at the Partnership's 50% share) related to interest rate swaps designated and qualifying as cash flow hedges for the Libra FPSO unit.
(2)Realized and unrealized loss on derivative instruments includes an unrealized loss of $22.4 million ($11.2 million at the Partnership’s 50% share) for the year ended December 31, 2019 and an unrealized loss of $6.3 million ($3.1 million at the Partnership’s 50% share) for the year ended December 31, 2018 related to interest rate swaps for the Cidade de Itajai FPSO unit.
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