FORM 6-K
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: July 29, 2009
Commission file number 001- 33198
TEEKAY OFFSHORE PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
4th Floor
Belvedere Building
69 Pitts Bay Road
Hamilton, HM08 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 þ Form 40- F o
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 o No þ
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 o No þ
Indicate by check mark whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes o No þ
If Yes is marked, indicate below the file number assigned to the registrant in connection
with
Rule 12g3-2(b):82-
THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE FOLLOWING REGISTRATION
STATEMENT OF THE PARTNERSHIP:
REGISTRATION STATEMENT ON FORM S-8 (NO. 333-147682) FILED WITH THE SEC ON NOVEMBER 28,
2007
REGISTRATION STATEMENT ON FORM F-3 (NO. 333-150682) ORIGINALLY FILED WITH THE SEC ON
MAY 6, 2008
FORWARD LOOKING STATEMENTS
This Form 6-K contains forward-looking statements within the meaning of the U.S. federal securities
laws, which reflect our current views with respect to certain future events and performance,
including statements regarding the expected tax results of Teekay Offshore Partners L.P. (or the Partnership). 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 statements: changes in applicable industry laws and regulations
and the timing of implementation of new laws and regulations; changes to the amount or proportion
of revenues, expenses, or debt service; and other factors discussed in the Partnerships filings
from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended
December 31, 2008. 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 Partnerships expectations with respect thereto or any change in events, conditions
or circumstances on which any such statement is based.
The
following updates our disclosure contained in our Annual Report on
Form 20-F for the year ended December 31, 2008 filed on
June 29, 2009 (or 2008 Annual Report).
Item 3. Key Information
Selected Financial Data
The following tables present, in each case for the periods and as of the dates indicated, summary:
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historical financial and operating data of Teekay Offshore Partners Predecessor (as
defined below); and |
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financial and operating data of Teekay Offshore Partners L.P. and its subsidiaries since
its initial public offering on December 19, 2006. |
The selected financial data below should be read in conjunction with the Partnerships audited
consolidated financial statements for the year ended December 31, 2008, which are included in Item
18 Financial Statements of our 2008 Annual Report.
Prior to the closing of our initial public offering of common units on December 19, 2006,
Teekay Corporation transferred eight Aframax conventional crude oil tankers to a subsidiary of
Norsk Teekay Holdings Ltd. (or Norsk Teekay) and one FSO unit to Teekay Offshore Australia Trust.
Teekay Corporation then transferred to Teekay Offshore Operating L.P. (or OPCO) all of the
outstanding interests of four wholly-owned subsidiaries Norsk Teekay, Teekay Nordic Holdings
Inc., Teekay Offshore Australia Trust and Pattani Spirit L.L.C. These four wholly-owned
subsidiaries, which include the eight Aframax conventional crude oil tankers and the FSO unit, are
collectively referred to as Teekay Offshore Partners Predecessor or the Predecessor.
The summary historical financial and operating data has been prepared on the following basis:
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the historical financial and operating data of Teekay Offshore Partners Predecessor as at
and for the years ended December 31, 2004 and 2005 is derived from the audited combined
consolidated financial statements of Teekay Offshore Partners Predecessor; |
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the historical financial and operating data of Teekay Offshore Partners Predecessor for the
period from January 1, 2006 to December 18, 2006 is derived from the audited combined
consolidated financial statements of Teekay Offshore Partners Predecessor; and |
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the historical financial and operating data of Teekay Offshore Partners L.P. as at December
31, 2006, 2007 and 2008, for the period from December 19, 2006 to December 31, 2006, and for
the years ended December 31, 2007 and 2008, reflect our initial public offering and are
derived from our audited consolidated financial statements. |
In July 2007, we acquired from Teekay Corporation ownership of its 100% interest in the
2000-built shuttle tanker Navion Bergen and its 50% interest in the 2006-built shuttle tanker
Navion Gothenburg. The acquisitions included the assumption of debt, related interest rate swap
agreements and Teekay Corporations rights and obligations under 13-year, fixed-rate bareboat
charters. In October 2007, we acquired from Teekay Corporation its interest in the FSO unit Dampier
Spirit, along with its 7-year fixed-rate time-charter. In June 2008, we acquired from Teekay
Corporation its interests in two 2008-built Aframax-class lightering tankers, the SPT Explorer and
the SPT Navigator. This acquisition included the assumption of debt and Teekay Corporations rights
and obligations under the 10-year, fixed-rate bareboat charters (with options exercisable by the
charterer to extend up to an additional five years). These transactions were deemed to be business
acquisitions between entities under common control. Accordingly, we have accounted for these
transactions in a manner similar to the pooling of interest method. Under this method of
accounting, our financial statements prior to the date the interests in these vessels were actually
acquired by us are retroactively adjusted to include the results of these acquired vessels. The
periods retroactively adjusted include all periods that we and the acquired vessels were both under
common control of Teekay Corporation and had begun operations. As a result, our applicable
consolidated financial statements reflect these vessels and the results of operations of the
vessels, referred to herein as the Dropdown Predecessor, as if we had acquired them when each
respective vessel began operations under the ownership of Teekay Corporation. These vessels began
operations on April 16, 2007 (Navion Bergen), July 24, 2007 (Navion Gothenburg), March 15, 1998
(Dampier Spirit), January 7, 2008 (SPT Explorer) and March 28, 2008 (SPT Navigator). Please read
Note 1 to our consolidated financial statements included in our 2008 Annual Report.
Our initial public offering and certain other transactions that occurred during 2006, 2007 and
2008 have affected our historical performance or will affect our future performance. As a result,
the following tables should be read together with, and are qualified in their entirety by reference
to, (a) Item 5 Operating and Financial Review and Prospects, included in our 2008 Annual Report,
and (b) the historical consolidated financial statements and the accompanying notes and the Report
of Independent Registered Public Accounting Firm therein, with respect
to the consolidated financial statements for the years ended December 31, 2008, 2007, and 2006
aggregated as follows:
Page 2 of 11
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Year Ended December 31, |
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Year Ended December 31, 2006 |
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Year Ended December 31, |
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January 1 to |
December 19 |
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December 18, |
to December 31, |
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2004 |
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2005 |
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2006 |
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2006 |
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2007 |
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2008 |
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Income Statement Data: |
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Voyage revenues |
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$ |
723,217 |
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$ |
613,246 |
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$ |
617,514 |
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$ |
24,397 |
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$ |
785,203 |
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$ |
872,492 |
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Operating expenses: |
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Voyage expenses (1) |
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90,414 |
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74,543 |
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91,321 |
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3,102 |
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151,637 |
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225,029 |
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Vessel operating expenses (2) (14) |
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109,278 |
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109,480 |
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107,991 |
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4,297 |
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149,660 |
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184,416 |
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Time-charter hire expense |
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177,050 |
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169,687 |
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159,973 |
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5,641 |
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150,463 |
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132,234 |
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Depreciation and amortization |
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120,197 |
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109,824 |
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100,823 |
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3,726 |
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124,370 |
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138,437 |
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General and administrative (14) |
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45,941 |
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56,726 |
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63,014 |
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2,177 |
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62,404 |
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64,230 |
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(Gain) loss on sale of vessels and equipment net of
writedowns |
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(3,725 |
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2,820 |
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(4,778 |
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Restructuring charge |
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955 |
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832 |
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Total operating expenses |
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539,155 |
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524,035 |
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519,176 |
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18,943 |
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638,534 |
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744,346 |
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Income from vessel operations |
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184,062 |
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89,211 |
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98,338 |
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5,454 |
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146,669 |
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128,146 |
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Interest expense (14) |
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(44,268 |
) |
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(39,983 |
) |
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(64,462 |
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(1,617 |
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(126,304 |
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(215,727 |
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Interest income |
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2,459 |
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4,612 |
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5,167 |
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191 |
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5,871 |
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4,086 |
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Equity income from joint ventures |
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5,514 |
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5,955 |
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6,321 |
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Gain on sales of marketable securities |
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94,222 |
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Foreign currency exchange (loss) gain (3) |
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(37,840 |
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34,228 |
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(66,214 |
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(118 |
) |
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(11,678 |
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4,343 |
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Other net |
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14,064 |
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9,091 |
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8,367 |
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309 |
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10,403 |
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11,936 |
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Income tax (expense) recovery |
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(29,465 |
) |
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12,375 |
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(3,260 |
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(121 |
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10,516 |
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56,704 |
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Income (loss) from continuing operations before
non-controlling interest |
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188,748 |
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115,489 |
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(15,743 |
) |
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4,098 |
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35,477 |
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(10,512 |
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Non-controlling interest |
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(2,167 |
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(229 |
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(3,893 |
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(2,636 |
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(31,519 |
) |
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(7,122 |
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Income (loss) from continuing operations |
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186,581 |
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115,260 |
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(19,636 |
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1,462 |
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3,958 |
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(17,634 |
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Net income (loss) from discontinued operations (4) |
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30,619 |
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(19,347 |
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(10,656 |
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Net income (loss) |
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$ |
217,200 |
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$ |
95,913 |
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$ |
(30,292 |
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$ |
1,462 |
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$ |
3,958 |
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$ |
(17,634 |
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Dropdown Predecessors interest in net income |
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$ |
4,076 |
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$ |
2,910 |
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$ |
3,097 |
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$ |
114 |
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$ |
1,300 |
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$ |
1,333 |
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General partners interest in net income |
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64 |
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733 |
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8,918 |
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Limited partners interest: |
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Net income (loss) from continuing operations |
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182,505 |
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112,350 |
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(22,733 |
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1,284 |
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1,925 |
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(27,885 |
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Net Income (loss) from continuing operations per: |
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Common unit (basic and diluted) (5) |
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14.48 |
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8.92 |
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(1.80 |
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0.07 |
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0.12 |
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(0.90 |
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Subordinated unit (basic and diluted) (5) |
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14.48 |
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8.92 |
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(1.80 |
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0.06 |
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0.07 |
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(0.90 |
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Total unit (basic and diluted) (5) |
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14.48 |
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8.92 |
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(1.80 |
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0.07 |
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0.10 |
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(0.90 |
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Limited partners interest: |
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Net income (loss) |
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213,124 |
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93,003 |
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(33,389 |
) |
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1,284 |
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1,925 |
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(27,885 |
) |
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Net income (loss) per: |
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Common unit (basic and diluted) (5) |
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16.91 |
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7.38 |
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(2.65 |
) |
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0.07 |
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0.12 |
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(0.90 |
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Subordinated unit (basic and diluted) (5) |
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16.91 |
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7.38 |
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(2.65 |
) |
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0.06 |
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0.07 |
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(0.90 |
) |
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Total unit (basic and diluted) (5) |
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16.91 |
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7.38 |
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(2.65 |
) |
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0.07 |
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0.10 |
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(0.90 |
) |
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Cash distributions declared per unit |
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1.14 |
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|
1.65 |
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Balance Sheet Data (at end of): |
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Cash and marketable securities (4) (6) |
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$ |
143,729 |
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$ |
128,986 |
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$ |
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$ |
113,986 |
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$ |
121,224 |
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$ |
131,488 |
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Vessels and equipment (7) (8) |
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|
1,440,167 |
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|
1,310,135 |
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|
1,532,743 |
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1,662,865 |
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|
1,708,006 |
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Total assets |
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2,054,760 |
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|
1,895,601 |
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2,081,224 |
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2,183,905 |
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2,180,092 |
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Total debt |
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1,178,132 |
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|
943,319 |
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1,303,352 |
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1,517,467 |
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1,566,436 |
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Non-controlling interest |
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|
14,276 |
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|
11,859 |
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|
427,977 |
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|
392,613 |
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|
201,383 |
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Dropdown Predecessors equity |
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44,016 |
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|
47,784 |
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|
51,792 |
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Partners/owners equity |
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|
659,212 |
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|
747,879 |
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|
138,942 |
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|
77,401 |
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|
100,866 |
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Weighted
average number of units outstanding: |
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Common units (5) |
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|
2,800,000 |
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|
|
2,800,000 |
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|
|
2,800,000 |
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|
|
9,800,000 |
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|
|
|
9,800,000 |
|
|
|
15,461,202 |
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Subordinated units (5) |
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|
9,800,000 |
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|
|
9,800,000 |
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|
|
|
9,800,000 |
|
|
|
9,800,000 |
|
|
|
|
9,800,000 |
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|
|
9,800,000 |
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Cash Flow Data: |
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|
|
|
|
|
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities (9) |
|
|
$ |
247,184 |
|
|
$ |
150,381 |
|
|
|
Note 9 |
| |
Note 9 |
|
|
|
$ |
45,847 |
|
|
$ |
122,566 |
|
|
Financing activities (9) |
|
|
|
(74,302 |
) |
|
|
(199,248 |
) |
|
|
Note 9 |
|
|
Note 9 |
|
|
|
|
(23,905 |
) |
|
|
38,806 |
|
|
Investing activities (9) |
|
|
|
(190,110 |
) |
|
|
34,124 |
|
|
|
Note 9 |
|
|
Note 9 |
|
|
|
|
(14,704 |
) |
|
|
(151,108 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net voyage revenues (10) |
|
|
$ |
632,803 |
|
|
$ |
538,703 |
|
|
|
$ |
526,193 |
|
|
$ |
21,295 |
|
|
|
$ |
633,566 |
|
|
$ |
647,463 |
|
|
EBITDA (11) |
|
|
|
409,638 |
|
|
|
229,199 |
|
|
|
|
133,086 |
|
|
|
6,735 |
|
|
|
|
238,245 |
|
|
|
275,740 |
|
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for vessels and equipment (12) |
|
|
|
170,630 |
|
|
|
24,760 |
|
|
|
|
31,079 |
|
|
|
|
|
|
|
|
31,228 |
|
|
|
57,858 |
|
|
Expenditures for drydocking |
|
|
|
9,174 |
|
|
|
8,906 |
|
|
|
|
31,255 |
|
|
|
|
|
|
|
|
49,053 |
|
|
|
29,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of shuttle tankers (13) |
|
|
|
37.9 |
|
|
|
35.8 |
|
|
|
|
33.9 |
|
|
|
36.0 |
|
|
|
|
36.9 |
|
|
|
36.6 |
|
|
Average number of conventional tankers (13) |
|
|
|
40.7 |
|
|
|
41.2 |
|
|
|
|
22.0 |
|
|
|
10.0 |
|
|
|
|
9.3 |
|
|
|
10.7 |
|
|
Average number of FSO units (13) |
|
|
|
4.0 |
|
|
|
4.0 |
|
|
|
|
4.0 |
|
|
|
4.0 |
|
|
|
|
4.6 |
|
|
|
5.0 |
|
|
Page 3 of 11
|
|
|
(1) |
|
Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel
expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and
commissions. |
|
(2) |
|
Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube
oils and communication expenses. |
|
(3) |
|
Substantially all of these foreign currency exchange gains and losses were unrealized and not
settled in cash. Under U.S. accounting guidelines, all foreign currency-denominated monetary
assets and liabilities, such as cash and cash equivalents, accounts receivable, accounts
payable, advances from affiliates and deferred income taxes, are revalued and reported based
on the prevailing exchange rate at the end of the period. For the periods prior to our initial
public offering, our primary source of foreign currency gains and losses were our Norwegian
Kroner-denominated advances from affiliates, which were settled by the Predecessor prior to
our initial public offering on December 19, 2006. |
|
(4) |
|
On July 1, 2006, the Predecessor sold Navion Shipping Ltd. to a subsidiary of Teekay
Corporation for $53.7 million. At the time of the sale, all of the Predecessors chartered-in
conventional tankers were chartered-in by Navion Shipping Ltd. and subsequently time chartered
to a subsidiary of Teekay Corporation at charter rates that provided a fixed 1.25% profit
margin. These chartered-in conventional tankers were operated in the spot market by the
subsidiary of Teekay Corporation. |
|
(5) |
|
Net income (loss) per unit is determined by dividing net income (loss), after deducting the
amount of net income (loss) attributable to the Dropdown Predecessor and the amount of net
income (loss) allocated to our general partners interest for periods subsequent to our
initial public offering on December 19, 2006, by the weighted-average number of units
outstanding during the period. For periods prior to December 19, 2006, such units are deemed
equal to the common and subordinated units received by Teekay Corporation in exchange for a
26.0% interest in OPCO in connection with our initial public offering. |
|
(6) |
|
Cash and marketable securities include cash from discontinued operations of $13.4 million and
$2.5 million as at December 31, 2004, and 2005, respectively. |
|
(7) |
|
Vessels and equipment consists of (a) vessels, at cost less accumulated depreciation, (b)
vessels under capital leases, at cost less accumulated depreciation, and (c) advances on
newbuildings. |
|
(8) |
|
Vessels and equipment includes a vessel held for sale of $19.6 million as at December 31,
2004. |
|
(9) |
|
For the year ended December 31, 2006, cash flow provided by (used in) operating
activities, financing activities and investing activities was $162,228, ($230,238) and
$53,010, respectively. |
|
(10) |
|
Consistent with general practice in the shipping industry, we use net voyage revenues
(defined as voyage revenues less voyage expenses) as a measure of equating revenues generated
from voyage charters to revenues generated from time charters, which assists us in making
operating decisions about the deployment of vessels and their performance. Under time charters
and bareboat charters, the charterer typically pays the voyage expenses, which are all
expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo
loading and unloading expenses, canal tolls, agency fees and commissions, whereas under voyage
charter contracts and contracts of affreightment the shipowner typically pays the voyage
expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we or OPCO,
as the shipowner, pay the voyage expenses, we or OPCO typically pass the approximate amount of
these expenses on to the customers by charging higher rates under the contract or billing the
expenses to them. As a result, although voyage revenues from different types of contracts may
vary, the net revenues after subtracting voyage expenses, which we call net voyage revenues,
are comparable across the different types of contracts. We principally use net voyage
revenues, a non-GAAP financial measure, because it provides more meaningful information to us
than voyage revenues, the most directly comparable GAAP financial measure. Net voyage revenues
are also widely used by investors and analysts in the shipping industry for comparing
financial performance between companies in the shipping industry to industry averages. The
following table reconciles net voyage revenues with voyage revenues. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1 |
|
|
December 19 |
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
Year Ended |
|
|
|
to |
|
|
to |
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
|
December 18, |
|
|
December 31, |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
|
|
2004 |
|
|
|
2005 |
|
|
|
2006 |
|
|
2006 |
|
|
|
2007 |
|
|
2008 |
|
|
Voyage revenues |
|
|
$ |
723,217 |
|
|
|
$ |
613,246 |
|
|
|
$ |
617,514 |
|
|
$ |
24,397 |
|
|
|
$ |
785,203 |
|
|
$ |
872,492 |
|
|
Voyage expenses |
|
|
|
90,414 |
|
|
|
|
74,543 |
|
|
|
|
91,321 |
|
|
|
3,102 |
|
|
|
|
151,637 |
|
|
|
225,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net voyage revenues |
|
|
$ |
632,803 |
|
|
|
$ |
538,703 |
|
|
|
$ |
526,193 |
|
|
$ |
21,295 |
|
|
|
$ |
633,566 |
|
|
$ |
647,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11) |
|
EBITDA. Earnings before interest, taxes, depreciation and amortization is used as a
supplemental financial measure by management and by external users of our financial
statements, such as investors, as discussed below: |
|
|
|
Financial and operating performance. EBITDA assists our management and investors by
increasing the comparability of the fundamental performance of us from period to period
and against the fundamental performance of other companies in our industry that provide
EBITDA information. This increased comparability is achieved by excluding the potentially
disparate effects between periods or companies of interest expense, taxes, depreciation or
amortization, which items are affected by various and possibly changing financing methods,
capital structure and historical cost basis and which items may significantly affect net
income between periods. We believe that including EBITDA as a financial and operating
measure benefits investors in (a) selecting between investing in us and other investment
alternatives and (b) monitoring our ongoing financial and operational strength and health
in assessing whether to continue to hold our common units. |
|
|
|
|
Liquidity. EBITDA allows us to assess the ability of assets to generate cash
sufficient to service debt, make distributions and undertake capital expenditures. By
eliminating the cash flow effect resulting from the existing capitalization of us and OPCO
and other items such as drydocking expenditures, working capital changes and foreign
currency exchange gains and losses (which may vary significantly from period to period),
EBITDA provides a consistent measure of our ability to generate cash over the long term.
Management uses this |
Page 4 of 11
information as a significant factor in determining (a) our and OPCOs proper capitalization
(including assessing how much debt to incur and whether changes to the capitalization
should be made) and (b) whether to undertake material capital expenditures and how to
finance them, all in light of existing cash distribution commitments to unitholders. Use
of EBITDA as a liquidity measure also permits investors to assess the fundamental ability
of OPCO and us to generate cash sufficient to meet cash needs, including distributions on
our common units.
EBITDA should not be considered an alternative to net income, operating income, cash flow from
operating activities or any other measure of financial performance or liquidity presented in
accordance with GAAP. EBITDA excludes some, but not all, items that affect net income and
operating income, and these measures may vary among other companies. Therefore, EBITDA as
presented by us may not be comparable to similarly titled measures of other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1 to |
|
December 19 to |
|
|
|
|
|
|
Year Ended December 31, |
|
|
December 18, |
|
December 31, |
|
|
Year Ended December 31, |
|
|
|
|
2004 |
|
2005 |
|
|
2006 |
|
2006 |
|
|
2007 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to
Net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
$ |
217,200 |
|
|
$ |
95,913 |
|
|
|
$ |
(30,292 |
) |
|
$ |
1,462 |
|
|
|
$ |
3,958 |
|
|
$ |
(17,634 |
) |
|
Depreciation and amortization |
|
|
|
120,197 |
|
|
|
109,824 |
|
|
|
|
100,823 |
|
|
|
3,726 |
|
|
|
|
124,370 |
|
|
|
138,437 |
|
|
Interest expense, net |
|
|
|
41,809 |
|
|
|
35,371 |
|
|
|
|
59,295 |
|
|
|
1,426 |
|
|
|
|
120,433 |
|
|
|
211,641 |
|
|
Income taxes expense (recovery) |
|
|
|
29,465 |
|
|
|
(12,375 |
) |
|
|
|
3,260 |
|
|
|
121 |
|
|
|
|
(10,516 |
) |
|
|
(56,704 |
) |
|
Depreciation and amortization
and income tax expense related
to discontinued operations |
|
|
|
967 |
|
|
|
466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
|
$ |
409,638 |
|
|
$ |
229,199 |
|
|
|
$ |
133,086 |
|
|
$ |
6,735 |
|
|
|
$ |
238,245 |
|
|
$ |
275,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EBITDA to
Net operating cash flow: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating cash flow |
|
|
$ |
247,184 |
|
|
$ |
150,381 |
|
|
|
$ |
162,112 |
|
|
$ |
116 |
|
|
|
$ |
45,847 |
|
|
$ |
122,566 |
|
|
Non-controlling interest |
|
|
|
(2,167 |
) |
|
|
(229 |
) |
|
|
|
(3,893 |
) |
|
|
(2,636 |
) |
|
|
|
(31,519 |
) |
|
|
(7,122 |
) |
|
Expenditures for drydocking |
|
|
|
9,174 |
|
|
|
8,906 |
|
|
|
|
31,255 |
|
|
|
|
|
|
|
|
49,053 |
|
|
|
29,075 |
|
|
Interest expense, net |
|
|
|
41,809 |
|
|
|
35,371 |
|
|
|
|
59,295 |
|
|
|
1,426 |
|
|
|
|
120,433 |
|
|
|
211,641 |
|
|
(Loss) gain on sale of vessels |
|
|
|
3,725 |
|
|
|
9,423 |
|
|
|
|
6,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of marketable
securities, net of writedowns |
|
|
|
94,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on writedown of vessels
and equipment |
|
|
|
|
|
|
|
(12,243 |
) |
|
|
|
(2,150 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
(2,790 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity income (net of dividends
received) |
|
|
|
(1,986 |
) |
|
|
3,205 |
|
|
|
|
319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in working capital |
|
|
|
36,757 |
|
|
|
(19,039 |
) |
|
|
|
(58,173 |
) |
|
|
7,134 |
|
|
|
|
33,706 |
|
|
|
(22,943 |
) |
|
Distribution from subsidiaries
to non-controlling interest |
|
|
|
2,347 |
|
|
|
9,618 |
|
|
|
|
4,224 |
|
|
|
|
|
|
|
|
78,107 |
|
|
|
71,976 |
|
|
Change in fair value of
interest rate swaps |
|
|
|
|
|
|
|
|
|
|
|
|
2,647 |
|
|
|
699 |
|
|
|
|
(45,491 |
) |
|
|
(130,482 |
) |
|
Foreign currency exchange
(loss) gain and other, net |
|
|
|
(21,427 |
) |
|
|
43,806 |
|
|
|
|
(66,688 |
) |
|
|
(4 |
) |
|
|
|
(11,891 |
) |
|
|
1,029 |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
|
$ |
409,638 |
|
|
$ |
229,199 |
|
|
|
$ |
133,086 |
|
|
$ |
6,735 |
|
|
|
$ |
238,245 |
|
|
$ |
275,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
EBITDA is net of non-controlling interest expense of $2.2 million, $0.2 million, $3.9
million, $2.6 million, $31.5 million and $7.1 million for the years ended December 31,
2004 and 2005, and for the periods January 1 to December 18, 2006 and December 19 to
December 31, 2006, and for the years ended December 31, 2007 and 2008, respectively. |
EBITDA also includes the following items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1 |
|
December 19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to |
|
to |
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
December 18, |
|
December 31, |
|
|
Year Ended December 31, |
|
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on sale of vessels and
equipment, net of writedowns |
|
|
$ |
3,725 |
|
|
|
$ |
(2,820 |
) |
|
|
$ |
4,778 |
|
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
|
|
|
Gain on sale of marketable
securities, net of writedowns |
|
|
|
94,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains (losses) on foreign
currency forward contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(466 |
) |
|
|
|
(4,137 |
) |
|
Foreign currency exchange (loss) gain |
|
|
|
(37,840 |
) |
|
|
|
34,228 |
|
|
|
|
(66,214 |
) |
|
|
(118 |
) |
|
|
|
(11,678 |
) |
|
|
|
4,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
60,107 |
|
|
|
$ |
31,408 |
|
|
|
$ |
(61,436 |
) |
|
$ |
(118 |
) |
|
|
$ |
(12,144 |
) |
|
|
$ |
206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12) |
|
Expenditures for vessels and equipment excludes non-cash investing activities. Please read
Item 18 Financial Statements of 2008 Annual Report Form 20-F: Note 14 Supplemental Cash Flow Information. |
|
(13) |
|
Average number of ships consists of the average number of owned and chartered-in vessels
(including those in discontinued operations) that were in our possession during the period
(excluding five vessels owned by OPCOs 50% joint ventures for periods prior to December 1,
2006, but including two vessels deemed to be in our possession for accounting purposes as a
result of the inclusion of the Dropdown Predecessor prior to our actual acquisition of such
vessels). On December 1, 2006, the operating agreements for these five joint ventures were
amended, resulting in OPCO controlling these entities and in their being consolidated with
OPCO in accordance with GAAP. |
|
(14) |
|
Vessel operating expenses, general and administrative expenses and interest expense includes
unrealized gains (losses) on derivative instruments. Please read Item 18 Financial
Statements of 2008 Annual Report Form 20-F: Note 11 Derivative Instruments and Hedging Activities. |
Page 5 of 11
Item 4. Information on the Partnership
U.S. Taxation
Technical Termination of Teekay Offshore Operating, L.P.
On May 11, 2007, Teekay Corporation transferred its then 74% interest in the capital and
profits of Teekay Offshore Operating L.P., our operating subsidiary partnership (or OPCO) to its
wholly-owned subsidiary, Teekay Holdings Limited. As a result of this transfer and because Teekay
Holdings Limited did not timely elect to be classified as a disregarded subsidiary of Teekay
Corporation for U.S. tax purposes, OPCO would be considered to have terminated as a partnership for
U.S. federal income tax purposes on May 11, 2007, and then to have been reconstituted as a new
partnership. Teekay Holdings Limited has requested for an extension of time to make the
classification election, which extension Teekay Holdings Limited believes it will receive. As of
the date of this offering, however, the request is still pending.
If OPCO were considered terminated as a partnership on May 11, 2007:
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our allocable share of OPCOs depreciation and amortization deductions
would be reduced for 2007 and subsequent years as compared to the
amount of such deductions available to us if the
termination did not occur; |
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|
the portion of the distributions made to unitholders who held our
units in 2007 that would be treated as taxable dividends would
increase and those unitholders may be required to file amended tax
returns for those years and could be subject to penalties and interest
for those years; and |
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we would incur administrative expenses in connection with the filing
of amended tax returns for 2007 and 2008 and amended unitholder
information reports for 2007 and 2008, and the IRS might assert
penalties and interest against us for failure to take the termination
into account in our original tax returns and information reports,
though Teekay Corporation has agreed to indemnify us for these and any
other costs or losses to us arising from a May 11, 2007 termination. |
If OPCO were considered terminated on May 11, 2007, we would attempt to negotiate an agreement
with the IRS that mitigates some of the effects of the termination for unitholders who held units
in 2007, possibly including a waiver of penalties and interest for 2007 arising from the
termination, a waiver of the requirement to file amended returns and information reports for 2007
and 2008 and permission to instead increase the taxable income reported to affected unitholders for
tax years after 2008 (possibly including some premium to take into account the time value of
money). However, there is no assurance that any such agreement could be reached with the IRS.
Page 6 of 11
Canadian Federal Income Tax Considerations
The following discussion is a summary of the material Canadian federal income tax
considerations under the Income Tax Act (Canada) (or the Canada Tax Act ), as of the date of this
prospectus, that we believe are relevant to holders of common units who are, at all relevant times,
for the purposes of the Canada Tax Act and the Canada-United States Tax Convention 1980 (or the
Canada-U.S. Treaty ) resident in the United States and entitled to all of the benefits of the
Canada-U.S. Treaty and who deal at arms length with us and Teekay Corporation (or U.S. Resident
Holders ).
Under the Canada Tax Act, no taxes on income (including taxable capital gains) are payable by
U.S. Resident Holders in respect of the acquisition, holding, disposition or redemption of the
common units, provided that we do not carry on business in Canada and such U.S. Resident Holders do
not, for the purposes of the Canada-U.S. Treaty, otherwise have a permanent establishment or fixed
base in Canada to which such common units pertain and, in addition, do not use or hold and are not
deemed or considered to use or hold such common units in the course of carrying on a business in
Canada and, in the case of any U.S. Resident Holders that carry on an insurance business in Canada
and elsewhere, such U.S. Resident Holders establish that the common units are not effectively
connected with their insurance business carried on in Canada.
In this connection, we believe that our activities and affairs and the activities and affairs
of OPCO, a Marshall Islands limited partnership in which we own a 50.99% limited partnership
interest, can be conducted in a manner such that both we and OPCO will not be carrying on business in
Canada. As a result, U.S. Resident Holders should not be considered to be carrying on business in
Canada for purposes of the Canada Tax Act solely by reason of the acquisition, holding, disposition
or redemption of their common units. We believe that this is and continues to be the case,
notwithstanding that we, OPCO and its
operating subsidiaries have engaged, and will continue to engage Teekay Shipping Limited (a subsidiary of Teekay Corporation that is
resident and based in Bermuda) for the performance of certain
services and Teekay Shipping Limited has and will contract for assistance in the delivery of such services with
Canadian service providers, as discussed below.
Under the Canada Tax Act, our election to be treated as a corporation for U.S. tax purposes
has no effect. Therefore, we will continue to be treated as a partnership for Canadian tax
purposes. Under the Canada Tax Act, a resident of Canada (which may include a foreign corporation
the central management and control of which is in Canada) is subject to Canadian tax on its
world-wide income, subject to any relief that may be provided by any relevant tax treaty. A
non-resident corporation or individual that carries on a business in Canada directly or through a
partnership, including through a partnership that owns an interest in another partnership, is
subject to tax in Canada on income attributable to its business (or that of the partnership or the
partnerships interest in another partnership, as the case may be) carried on in Canada. The
taxation under the Canada Tax Act is subject to the provisions of any relevant tax treaty.
The Canada Tax Act contains special rules that provide assurance to qualifying international
shipping corporations that they will not be considered resident in Canada even if they are, in
whole or in part, managed from Canada. Further, the Canada Tax Act and many of the tax treaties to
which Canada is a party also contain special exemptions for profits derived from international
shipping operations.
We and OPCO have entered and may in the future enter into agreements with Teekay Shipping
Limited for the provision of administrative services. Certain of OPCOs operating subsidiaries have
entered and may in the future enter into agreements with:
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Teekay Shipping Limited for the provision of advisory, technical, ship
management and administrative services; and |
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Teekay Shipping Canada Ltd., a Canadian subsidiary of Teekay
Corporation, for the provision of strategic advisory and consulting services. |
Certain of the services that Teekay Shipping Limited provides to us, to OPCO and to OPCOs
operating subsidiaries under the services agreements are and may in the future be obtained by
Teekay Shipping Limited through subcontracts with a Canadian subsidiary of Teekay Corporation. The
special rules in the Canada Tax Act and various relevant tax treaties relating to qualifying
international shipping corporations and income from international shipping operations may provide
relief to OPCOs operating subsidiaries to the extent that the services provided to them by
Canadian entities would otherwise result in such operating subsidiaries being considered to be
resident in Canada or to be taxable in Canada on certain income from such operations by virtue of
carrying on business in Canada. However, such rules would not apply to us or OPCO, as holding
limited partnerships, or to our general partner or unitholders. While we do not believe it to be
the case, if the arrangements described herein result in our being considered to carry on business
in Canada for purposes of the Canada Tax Act, our unitholders would be considered to be carrying
on business in Canada and may be required to file Canadian tax returns and, subject to any relief
provided in any relevant treaty (including, in the case of U.S. Resident Holders, the Canada-U.S.
Treaty), would be subject to taxation in Canada on any income that is considered to be attributable
to the business carried on by us in Canada.
Page 7 of 11
The fifth protocol (the Fifth Protocol) to the Canada-U.S. Treaty, which came into effect on
December 15, 2008, amends certain aspects of the Canada-U.S. Treaty. The Fifth Protocol contains
new Article IV(7)(a) which is a treaty denial rule that will apply beginning on January 1, 2010.
Article IV(7)(a) would generally deny benefits under the Canada-U.S. Treaty to a U.S. Resident
Holder in respect of any income earned by us from carrying on business in Canada where (i) such
income is considered for Canadian federal income tax purposes to have been derived by the U.S.
Resident Holder through us, (ii) we are not considered to be a resident of the United States for
purposes of the Canada-U.S. Treaty, and (iii) by reason of us being treated as a corporation for
U.S. federal income tax purposes, the treatment of such income under the tax law of the United
States is not the same as it would be if it had been derived directly by the U.S. Resident Holder.
Beginning on January 1, 2010, the effect of Article IV(7)(a) will be to deny relief from Canadian
taxation to U.S. Resident Holders under the Canada-U.S. Treaty in respect of any income
attributable to a business carried on by us in Canada.
We believe that we and OPCO can each conduct our respective activities and affairs in a manner
so that our unitholders should not be considered to be carrying on business in Canada solely as a
consequence of the acquisition, holding, disposition or redemption of our common units.
Consequently, we believe our unitholders should not be subject to tax filing or other tax
obligations in Canada under the Canada Tax Act. However, although we do not intend to do so, there
can be no assurance that the manner in which we and OPCO carry on our respective activities will
not change from time to time as circumstances dictate or warrant in a manner that may cause our
unitholders to be carrying on business in Canada for purposes of the Canada Tax Act.
Further, the relevant Canadian federal income tax law may change by legislation or judicial
interpretation and the Canadian taxing authorities may take a different view than we have of the
current law.
It is the responsibility of each unitholder to investigate the legal and tax consequences,
under the laws of pertinent jurisdictions, including Canada, of its investment in us. Accordingly,
each prospective unitholder is urged to consult, and depend upon, its tax counsel or other advisor
with regard to those matters. Further, it is the responsibility of each unitholder to file all
state, local and non-U.S., as well as U.S. federal, tax returns that
may be required of him.
Netherlands Taxation
The following discussion is based upon the current tax laws of the Kingdom of the Netherlands
and regulations, the Dutch tax administrative practice and judicial decisions there under, all as
in effect as of the date of this prospectus and subject to possible change on a retroactive basis.
The following discussion is for general information purposes only and does not purport to be a
comprehensive description of all of the Dutch corporate income tax considerations applicable to us.
Teekay Netherlands European Holdings B.V. (or TNEH) is capitalized solely with equity from
Teekay European Holdings S.a.r.l. (or Luxco). Its only significant asset is the shareholding in
Norsk Teekay AS (or NTAS), which is an intermediate holding company and is the direct or indirect
parent of various operating subsidiaries in Norway and Singapore, including Teekay Norway AS (or
TNAS), Navion Offshore Loading AS (or NOL), Navion Gothenburg AS (or NGAS), Navion Bergen AS (or
NBAS), Ugland Nordic Shipping AS (or UNS), PR Stena Ugland Shuttle Tanker I DA (or Stena I), PR
Stena Ugland Shuttle Tankers II DA (or Stena II) and Teekay Navion Offshore Loading PTE. Ltd. (or
TNOL).
Taxation of Dividends and Capital Gains
Pursuant to Dutch law, dividends received by TNEH from NTAS and capital gains realized on any
disposal of the shares of NTAS generally will be exempt from Dutch taxation (the participation
exemption) if the following conditions are met:
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the company in which the shareholding is held has a capital divided into shares; |
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the shareholding is at least 5% of the paid up share capital of the company; |
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more than 50% of the consolidated assets of the participation
do not, directly or indirectly, consist of portfolio investments
(asset test); or |
Page 8 of 11
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in case that more than 50% of the participations assets do, directly or indirectly, consist
of portfolio investments, the participation is subject to a profit tax
which results in taxation at a rate of at least 10% on a profit determined according to
Dutch corporate income tax rules the (subject to tax test). |
Ownership test
NTAS equity is wholly divided into shares. TNEH meets the ownership threshold, and we
currently expect that TNEH will maintain its 100 % ownership interest in NTAS for the foreseeable
future.
Asset test
Whether a shareholders interest in a company is considered to be a portfolio investment is
determined solely by the assets of that company (based on the fair market value of the assets). For
example, if the consolidated assets of that company are predominantly portfolio investments or
consist predominantly (50% or more) of assets used for passive group finance activities (e.g. group
loans), the shareholders interest will in principle be considered a portfolio investment. Free
portfolio investments are assets that are not used in the line of the business of the company. Only
assets will be consolidated. This means that mutual claims and debts of subsidiaries will not be
eliminated. The assets will be taken into account for their fair market value. This also applies to
assets that have not been commercially activated, such as the companys own goodwill and other
intangible assets. Furthermore, the asset test should be met continuously.
Subject to tax test
If the asset test is not met then the participation exemption should still apply to
shareholdings of 5% or more in foreign (as well as domestic) entities, unless the shareholders
interest is a portfolio investment in a company that is not subject to a tax rate that is
considered adequate. Adequate is defined as subject to a profit tax that equals at least an
effective tax rate of 10% over a taxable base according to Dutch tax standards.
Conclusion
Prior
to June 2008, NTAS met the asset test as non portfolio
investments accounted for 51.89% of
its consolidated assets. However, due to, among other factors, the increase of the inter-company
receivables held by NTAS and its direct and indirect subsidiaries, NTAS no longer met the asset
test and the participation exemption no longer applied after June 2008, and the exemption will not
apply until NTAS has re-qualified for the exemption. In order to re-qualify for the participation
exemption, certain inter-company receivables held by NTAS and its direct and indirect subsidiaries
are expected to be eliminated by August 2009. Assuming, that these certain inter-company
receivables are eliminated by August 2009, NTAS should meet the asset test and qualify for the
participation exemption thereafter. Dividends received on or any capital gain resulting from the
disposition of the shares of NTAS after August 2009 should be exempt from taxation in the
Netherlands and capital losses on a disposition of the shares should not be tax deductible, except
to the extent that dividends are funded with profits generated in, or capital gains allocated to,
the period the participation exemption did not apply to NTAS. Because NTAS does not anticipate
distributing dividends to TNEH and TNEH does not anticipate selling or transferring its shares in
NTAS in the foreseeable future, any profits that were generated by NTAS and its direct and indirect
subsidiaries during the non-exempt period should not give rise to Dutch corporate income tax in the
foreseeable future.
Taxation of TNEH Dividends
In general, the Netherlands levies a 15% withholding tax on dividends paid by a Dutch company.
The withholding tax is reduced to zero if the dividend is paid by TNEH to Luxco, if Luxco meets the
conditions of the European Union Parent-Subsidiary Directive. The Directive requires Luxco to hold
at least 5% of the shares of TNEH for at least one year before the dividend distribution. Based on
Dutch tax legislation no holding period is required. We currently expect that Luxco will maintain
its 100% ownership interest in TNEH for the foreseeable future. Therefore, we believe that Dutch
withholding tax will not apply to dividends paid by TNEH to Luxco. In addition, Luxco should not be
liable to Dutch corporate income tax with regards to the dividends received.
Singapore Taxation
Taxation of Singapore Companies Operating Ships in International Traffic. OPCO has one
subsidiary that is incorporated and tax resident in Singapore for Singapore tax purposes, Teekay
Navion Offshore Loading Pte. Ltd. (or TNOL). TNOL owns and operates non-Singapore registered ships
for the year ended December 31, 2008.
Taxation of Charter Income from Non-Singapore-Registered Ships. In respect of the charter
income that TNOL earns from its non-Singapore-registered ships, they are currently exempt from
Singapore tax under a tax incentive being enjoyed by TNOL. TNOL was conferred the Singapore
Approved International Shipping (or AIS) status with effect from January 1, 2005. The AIS status
was granted for an initial period of 10 years subject to a review at the end of the fifth year to
ensure that TNOL has complied with the qualifying conditions of the incentive. At the end of the
first 10 years, TNOL can apply for a further 10-year extension of the incentive.
Page 9 of 11
Under Section 13F of the Singapore Income Tax Act and the terms of the AIS incentive approval
letter from the Maritime Port Authority of Singapore (or MPA) dated January 26, 2005, the types of
income that would qualify for tax exemption include:
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charter hire/freight income from the operation of non-Singapore-registered vessels
outside the limits of the port of Singapore; |
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dividends from approved shipping subsidiaries; |
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gains from the disposition of non-Singapore-registered ships for a period of 10 years
from January 1, 2004 to December 31, 2013; and |
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gains from foreign exchange and risk management activities which are carried out in
connection with and incidental to the shipping operations of TNOL. |
The AIS awarded to TNOL is subject to TNOL meeting and continuing to implement the business plan
agreed with the MPA at the time of application of the incentive or such other modified plans as
approved by the MPA.
TNOL intends to operate such that substantially all of its charter income will be exempt from
Singapore tax under the AIS incentive. This means it intends to operate and charter out all of its
non-Singapore-registered ships in international waters outside the limits of the port of Singapore.
On this basis, it expects that all of its income from the charter of its non-Singapore-registered
ships should be exempt from Singapore tax under Section 13F of the Singapore Income Tax Act.
Taxation of Investment Income. Any investment income earned by TNOL would be subject to the
normal corporate tax rules. With respect to the interest income earned from deposits placed outside
Singapore, the interest will be taxable in Singapore at the prevailing corporate tax rate
(currently 17.0%) when received or deemed received in Singapore.
There is a one year moratorium for foreign sourced investment income accrued up to 21 January 2009
to be exempted from tax if they are remitted into Singapore between 22 January 2009 and 21 January
2010.
Taxation of Ship Management Income. In addition to the above, since October 2006 TNOL has
provided ship management services to related and third party companies. Income from such activities
does not qualify for exemption under the AIS incentive. Accordingly, the income derived from these
activities is subject to tax at the prevailing corporate tax rate of 17.0%.
Taxation of Dividend Distribution. Dividends distributed by TNOL to its shareholders, Teekay
Offshore Operating Pte Ltd and Navion Offshore Loading AS will be exempt from Singapore tax.
Singapore does not impose withholding tax on payment of dividends.
Item 8: Financial Information
Minimum Quarterly Distribution
Common unitholders are entitled under our partnership agreement to receive a minimum quarterly
distribution of $0.35 per unit, or $1.40 per unit per year, prior to any distribution on our
subordinated units to the extent we have sufficient cash from our operations after establishment of
cash reserves and payment of fees and expenses, including payments to our general partner. Our
general partner has the authority to determine the amount of our available cash for any quarter.
This determination must be made in good faith. There is no guarantee that we will pay the minimum
quarterly distribution on the common units in any quarter, and we will be prohibited from making
any distributions to unitholders if it would cause an event of default, or if an event of default
exists, under our credit agreements.
Page 10 of 11
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.
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TEEKAY OFFSHORE PARTNERS L.P.
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Date: July 29, 2009 |
By: |
/s/ Peter Evensen
|
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Peter Evensen |
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Chief Executive Officer and Chief Financial Officer
(Principal Financial and Accounting Officer) |
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Page 11 of 11