UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
the Securities Exchange Act of 1934
Date of Report: March 5, 2010
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)
(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
|
TEEKAY OFFSHORE PARTNERS L.P. 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda |
EARNINGS RELEASE
TEEKAY OFFSHORE PARTNERS
REPORTS FOURTH QUARTER AND ANNUAL RESULTS
REPORTS FOURTH QUARTER AND ANNUAL RESULTS
Highlights
| • | Generated distributable cash flow of $18.2 million in the fourth quarter of 2009, up from
$13.4 million in the third quarter of 2009. |
|
| • | Declared and paid cash distribution of $0.45 per unit for the fourth quarter of 2009. |
Hamilton, Bermuda, March 4, 2010 — Teekay Offshore GP LLC, the general partner of Teekay Offshore
Partners L.P. (Teekay Offshore or the Partnership) (NYSE: TOO), today reported the Partnership’s
results for the quarter and year ended December 31, 2009. During the fourth quarter of 2009, the
Partnership generated distributable cash flow(1) of $18.2 million, an increase from
$13.4 million in the previous quarter, primarily as a result of the acquisition of the Petrojarl
Varg floating production, storage and offloading (FPSO) unit on September 10, 2009.
On January 27, 2010, the Partnership declared a cash distribution of $0.45 per unit for the quarter
ended December 31, 2009. The cash distribution was paid on February 12, 2010, to all unitholders
of record on February 5, 2010.
“2009 was a challenging year operationally for Teekay Offshore Partners,” commented Peter Evensen,
Chief Executive Officer of Teekay Offshore GP L.L.C. “Distributable cash flow from our shuttle
tanker segment was weaker than expected because of lower revenues caused primarily by new oil
fields coming on line later than planned and higher operating expenses. We moved aggressively to
manage costs and in the fourth quarter, distributable cashflow rebounded from the depressed levels
of the second and third quarter as shuttle tanker operating expenses began to reduce and we
completed the acquisition of the Petrojarl Varg FPSO. In 2010, we expect higher cashflows from
both the existing shuttle tanker fleet as we continue to improve profitability and the Petrojarl
Varg FPSO because of higher oil production.”
Teekay Offshore’s Fleet
The following table summarizes Teekay Offshore’s fleet as of February 28, 2010, including vessels
owned by Teekay Offshore Operating L.P. (or OPCO), of which the Partnership owns a 51 percent
interest:
| Number of Vessels | ||||||||||||
| Owned | Chartered-in | |||||||||||
| Vessels | Vessels | Total | ||||||||||
Shuttle Tanker Segment |
28 | * | 7 | 35 | ||||||||
Conventional Tanker Segment |
11 | — | 11 | |||||||||
FSO Segment |
5 | — | 5 | |||||||||
FPSO Segment |
1 | — | 1 | |||||||||
Total |
45 | 7 | 52 | |||||||||
| * | Includes five shuttle tankers in which OPCO’s ownership
interest is 50%, three shuttle tankers in which OPCO’s ownership is 67%
and one shuttle tanker in which Teekay Offshore’s direct ownership
interest is 50%. |
OPCO’s fleet includes 33 shuttle tankers (including seven chartered-in vessels), four FSO units,
nine conventional oil tankers and two lightering vessels.
| (1) | Distributable cash flow is a non-GAAP financial measure used by certain investors to measure
the financial performance of the Partnership and other master limited partnerships. Please
see Appendix B for a reconciliation of this non-GAAP measure to the most directly comparable
financial measure under United States generally accepted accounting principles (GAAP). |
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Future Growth Opportunities
Pursuant to an Omnibus Agreement that Teekay Offshore entered into in connection with its initial
public offering in December 2006, Teekay Corporation (Teekay) is obligated to offer to the
Partnership its interest in certain shuttle tankers, floating storage and sffloading (FSO) units
and FPSO units and joint ventures it may acquire in the future, provided the vessels are servicing
contracts in excess of three years in length. Teekay Offshore also may acquire additional limited
partner interests in OPCO or other vessels that Teekay may offer the Partnership from time to time
in the future. Teekay currently owns 49 percent of OPCO and Teekay Offshore owns the remaining 51
percent, including a general partner interest.
Shuttle Tankers
Teekay has ordered four Aframax shuttle tanker newbuildings that are scheduled to deliver in 2010
and 2011, for a total cost of approximately $480 million. Pursuant to the Omnibus Agreement,
Teekay is obligated to offer its interest in these vessels to Teekay Offshore within 365 days of
the delivery of the vessels, provided the vessels are servicing time-charter contracts or contracts
of affreightment in excess of three years.
FSO Unit
In December 2009, Teekay completed the conversion of one of its existing shuttle tankers to a FSO
unit and the unit commenced operations in the Qatar offshore region under a 7.5 year fixed-rate
charter (excluding a 1.5 year extension option) with a major oil company. Under the Omnibus
Agreement, Teekay is obligated to offer its interest in this FSO project to the Partnership within
365 days after the commencement of the charter.
FPSO Units
Teekay Petrojarl, a wholly-owned subsidiary of Teekay, owns three units operating in the North Sea
and operates for the Partnership the Petrojarl Varg FPSO, which the Partnership purchased from
Teekay Petrojarl in September 2009 for $320 million. In addition, Teekay directly owns one FPSO
unit operating in Brazil. Pursuant to existing agreements, the Partnership may acquire Teekay
Petrojarl’s other FPSO units that are servicing contracts in excess of three years in length.
Teekay’s Remaining Interest in OPCO
Teekay may offer to Teekay Offshore additional limited partner interests in OPCO. Teekay currently
owns 49 percent of OPCO and Teekay Offshore owns the remaining 51 percent, including a general
partner interest.
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Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) (as
detailed in Appendix A to this release) of $14.7 million for the quarter ended December 31, 2009,
compared to $8.4 million for the quarter ended September 30, 2009. Adjusted net income
attributable to the partners excludes a number of specific items that had the net effect of
increasing net income by $12.0 million and decreasing net income by $21.8 million for the quarters
ended December 31 and September 30, 2009, respectively, as detailed in Appendix A. Including these
items, the Partnership reported, on a GAAP basis, net income attributable to the partners of $26.7
million (as detailed in Appendix A to this release) for the fourth quarter of 2009,
compared to a net loss of $13.4 million(2) in the previous quarter. Net voyage
revenues(3) for the fourth quarter of 2009 increased to $178.8 million from $175.1
million in the previous quarter.
The Partnership reported adjusted net income attributable to the partners(1) (as
detailed in Appendix A to this release) of $37.6 million for the year ended December 31, 2009,
compared to $34.5 million for the year ended December 31, 2008. Adjusted net income attributable
to the partners excludes a number of specific items that had the net effect of increasing net
income by $26.1 million and decreasing net income by $53.5 million for the years ended December 31,
2009 and 2008, respectively, as detailed in Appendix A. Including these items, the Partnership
reported, on a GAAP basis, net income attributable to the partners of $63.7 million (as detailed in
Appendix A to this release) for the year ended December 31, 2009, compared to a net loss of
$19.0 million(2). Net voyage revenues(3) for the year ended December 31,
2009 decreased to $710.8 million from $743.9 million in the previous year.
For accounting purposes, the Partnership is required to recognize, through the consolidated
statements of income (loss), changes in the fair value of certain derivative instruments as
unrealized gains or losses, through the consolidated statements of income (loss). This revaluation
does not affect the economics of any hedging transactions or have any impact on the Partnership’s
actual cash flows or the calculation of its distributable cash flow.
In accordance with GAAP, business acquisitions of entities under common control that have begun
operations are required to be accounted for in a manner whereby the Partnership’s financial
statements are retroactively adjusted to include the historical results of the acquired vessels
from the date the vessels were originally under the control of Teekay. Accordingly, the
Partnership has recast its historical financial results to include the results of the Petrojarl
Varg FPSO for the periods prior to its September 10, 2009 acquisition, which pre-acquisition
results are referred to in this release as the Dropdown Predecessor.
| (1) | Adjusted net income attributable to the partners is a non-GAAP financial measure. Please
refer to Appendix A included in this release for a reconciliation of this non-GAAP measure to
the most directly comparable financial measure under GAAP and information about specific items
affecting net income which are typically excluded by securities analysts in their published
estimates of the Partnership’s financial results. |
|
| (2) | Commencing in 2009 and applied retroactively, the Partnership’s net income (loss) is
presented including non-controlling interest on the Consolidated Statements of Income (Loss).
Net income (loss) attributable to partners represents the net income (loss) attributable to
the limited partners and general partner of Teekay Offshore. |
|
| (3) | Net voyage revenues represents voyage revenues less voyage expenses, which comprise all
expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls
and brokerage commissions. Net voyage revenues is a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping companies. Please see the
Partnership’s web site at www.teekayoffshore.com for a reconciliation of this non-GAAP measure
as used in this release to the most directly comparable GAAP financial measure. |
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Operating Results
The following table highlights certain financial information for Teekay Offshore’s four main
segments: the shuttle tanker segment, the conventional tanker segment, the FSO segment, and the
FPSO segment (please refer to the “Teekay Offshore Fleet” section of this release above and
Appendix C for further details).
| Three Months Ended | ||||||||||||||||||||
| December 31, 2009 | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Shuttle | Conventional | |||||||||||||||||||
| Tanker | Tanker | FSO | FPSO | |||||||||||||||||
| (in thousands of U.S. dollars) | Segment | Segment | Segment | Segment(3) | Total | |||||||||||||||
Net voyage revenues |
109,197 | 26,461 | 16,121 | 26,996 | 178,775 | |||||||||||||||
Vessel operating expenses(1) |
34,741 | 5,961 | 7,614 | 13,326 | 61,642 | |||||||||||||||
Time-charter hire expense |
28,141 | — | — | — | 28,141 | |||||||||||||||
Depreciation and amortization |
28,003 | 5,876 | 5,472 | 5,633 | 44,984 | |||||||||||||||
Cash flow from vessel
operations(2) |
35,142 | 18,671 | 7,764 | 11,653 | 73,230 | |||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, 2009 | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Shuttle | Conventional | |||||||||||||||||||
| Tanker | Tanker | FSO | FPSO | |||||||||||||||||
| (in thousands of U.S. dollars) | Segment | Segment | Segment | Segment(3) | Total | |||||||||||||||
Net voyage revenues |
110,313 | 24,799 | 14,509 | 25,525 | 175,146 | |||||||||||||||
Vessel operating expenses(1) |
31,751 | 6,210 | 6,876 | 10,020 | 54,857 | |||||||||||||||
Time-charter hire expense |
27,772 | — | — | — | 27,772 | |||||||||||||||
Depreciation and amortization |
23,670 | 6,208 | 5,470 | 5,633 | 40,981 | |||||||||||||||
Cash flow from vessel
operations(2) |
37,092 | 17,465 | 6,741 | 3,398 | 64,696 | |||||||||||||||
| (1) | Commencing in 2009 and applied retroactively, the gains and losses related to non-designated
derivative instruments have been reclassified to a separate line item in the Consolidated
Statements of Income (Loss) and are no longer included in the amounts above. |
|
| (2) | Cash flow from vessel operations represents income from vessel operations before depreciation
and amortization expense and amortization of deferred gains, and includes the realized gains
(losses) on the settlements of foreign currency exchange forward contracts. Cash flow from
vessel operations is a non-GAAP financial measure used by certain investors to measure the
financial performance of shipping companies. Please see the Partnership’s web site at
www.teekayoffshore.com for a reconciliation of this non-GAAP measure as used in this
release to the most directly comparable GAAP financial measure. |
|
| (3) | Cash flow from vessel operations for the FPSO segment reflects only the cash flow generated
by the Petrojarl Varg FPSO subsequent to its acquisition by the Partnership on September 10,
2009. Results for the Petrojarl Varg FPSO for the periods prior to its acquisition by the
Partnership when it was owned and operated by Teekay are referred to as the Dropdown
Predecessor. |
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership’s shuttle tanker segment decreased to $35.1
million for the fourth quarter of 2009, compared to $37.1 million for the previous quarter,
primarily due to increases in repairs and maintenance expenses and restructuring costs, and a
decrease in net voyage revenues due to increased offhire and drydock days.
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Conventional Tanker Segment
Cash flow from vessel operations from the Partnership’s conventional tanker segment increased to
$18.7 million in the fourth quarter of 2009 from $17.5 million in the third quarter of 2009,
primarily due to a decrease in drydock days.
FSO Segment
Cash flow from vessel operations from the Partnership’s FSO segment increased to $7.8 million in
the fourth quarter of 2009 from $6.7 million in the third quarter of 2009, primarily due to a
scheduled drydocking in the third quarter.
FPSO Segment
Cash flow from vessel operations from the Partnership’s FPSO segment increased to $11.7 million for
the fourth quarter of 2009 from $3.4 million for the third quarter of 2009 as a result of the
Partnership’s acquisition of the Petrojarl Varg FPSO on September 10, 2009. The results for the
full fourth quarter included higher operating expenses primarily due to certain repairs and
maintenance activities completed during the quarter and higher general and administrative costs,
partially offset by higher revenues due to increased oil production (the Petrojarl Varg contract
includes an upside tariff component based on the volume of oil produced).
Liquidity
As of December 31, 2009, the Partnership had total liquidity of $285.7 million, which consisted of
$101.7 million in cash and cash equivalents and $184.0 million in undrawn revolving credit
facilities.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P., a publicly-traded master limited partnership formed by Teekay
Corporation (NYSE: TK), is an international provider of marine transportation, production and
storage services to the offshore oil industry. Teekay Offshore owns a 51 percent interest in and
controls Teekay Offshore Operating L.P., a Marshall Islands limited partnership with a fleet of 33
shuttle tankers (including seven chartered-in vessels), four FSO units, nine conventional oil
tankers and two lightering vessels. In addition, Teekay Offshore has direct ownership interests in
two shuttle tankers, one FSO unit, and one FPSO unit. Teekay Offshore also has rights to
participate in certain other FPSO and FSO opportunities of Teekay Corporation.
Teekay Offshore’s common units trade on the New York Stock Exchange under the symbol “TOO”.
For Investor Relations enquiries contact:
Kent Alekson
Tel: +1 (604) 609-6442
Kent Alekson
Tel: +1 (604) 609-6442
For Media enquiries contact:
Alana Duffy
Tel: +1 (604) 844-6605
Alana Duffy
Tel: +1 (604) 844-6605
Web site: www.teekayoffshore.com
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except unit data)
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except unit data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
VOYAGE REVENUES |
213,396 | 204,509 | 240,492 | 821,856 | 968,908 | |||||||||||||||
OPERATING EXPENSES |
||||||||||||||||||||
Voyage expenses |
34,621 | 29,363 | 51,293 | 111,026 | 225,029 | |||||||||||||||
Vessel operating expenses(1) |
61,642 | 54,857 | 58,237 | 233,261 | 224,235 | |||||||||||||||
Time-charter hire expense |
28,141 | 27,772 | 34,852 | 117,202 | 132,234 | |||||||||||||||
Depreciation and amortization |
44,984 | 40,981 | 40,669 | 166,350 | 158,533 | |||||||||||||||
General and administrative(1) |
15,876 | 13,820 | 19,880 | 58,016 | 69,519 | |||||||||||||||
Goodwill impairment charge |
— | — | 127,403 | — | 127,403 | |||||||||||||||
Restructuring charge(2) |
955 | 371 | — | 5,008 | — | |||||||||||||||
| 186,219 | 167,164 | 332,334 | 690,863 | 936,953 | ||||||||||||||||
Income from vessel operations |
27,177 | 37,345 | (91,842 | ) | 130,993 | 31,955 | ||||||||||||||
OTHER ITEMS |
||||||||||||||||||||
Interest expense |
(9,787 | ) | (9,147 | ) | (21,480 | ) | (43,319 | ) | (85,169 | ) | ||||||||||
Interest income |
138 | 141 | 892 | 1,236 | 4,157 | |||||||||||||||
Realized and unrealized gain (loss)
on derivative instruments (3) |
15,844 | (37,302 | ) | (155,763 | ) | 53,560 | (188,782 | ) | ||||||||||||
Foreign exchange gain (loss) (1) |
1,837 | (4,359 | ) | 5,088 | (6,151 | ) | 4,293 | |||||||||||||
Income tax recovery (expense) |
14,290 | (20,234 | ) | 27,523 | (12,638 | ) | 62,344 | |||||||||||||
Other income — net |
1,863 | 2,068 | 2,493 | 8,918 | 11,929 | |||||||||||||||
Net income (loss) |
51,362 | (31,488 | ) | (233,089 | ) | 132,599 | (159,273 | ) | ||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||
Non-controlling interests (4) |
24,659 | (12,560 | ) | (30,947 | ) | 57,490 | 10,863 | |||||||||||||
Dropdown Predecessor(5) |
— | (5,551 | ) | (151,407 | ) | 11,378 | (151,169 | ) | ||||||||||||
Partners |
26,703 | (13,377 | ) | (50,735 | ) | 63,731 | (18,967 | ) | ||||||||||||
Limited partners’ units outstanding: |
||||||||||||||||||||
Weighted-average number of
common units outstanding
— Basic and diluted |
27,900,000 | 25,056,250 | 20,425,000 | 23,476,438 | 15,461,202 | |||||||||||||||
Weighted-average number of
subordinated units outstanding
— Basic and diluted |
9,800,000 | 9,800,000 | 9,800,000 | 9,800,000 | 9,800,000 | |||||||||||||||
Weighted-average number of total
units outstanding
- Basic and diluted |
37,700,000 | 34,856,250 | 30,225,000 | 33,276,438 | 25,261,202 | |||||||||||||||
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| (1) | The Partnership has entered into foreign exchange forward contracts, which are economic
hedges for certain vessel operating expenses and general and administrative expenses. Certain
of these forward contracts have been designated as cash flow hedges pursuant to GAAP.
Unrealized gains and losses arising from hedge ineffectiveness from such forward contracts,
including forward contracts relating to the Dropdown Predecessor (see Note 5 below), are
reflected in vessel operating expenses, general and administrative expenses, and foreign
exchange gains (losses) in the above Consolidated Statements of Income (Loss) as detailed in
the table below: |
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Vessel operating expenses |
(379 | ) | 1,404 | (444 | ) | 2,492 | 831 | |||||||||||||
General and administrative |
(101 | ) | 1,382 | (2,017 | ) | 3,383 | (1,385 | ) | ||||||||||||
Foreign exchange loss |
— | — | — | — | 8 | |||||||||||||||
| (2) | Restructuring charges were incurred in connection with the re-flagging of certain of the
Partnership’s vessels, which are expected to result in lower future crewing costs. The
Partnership expects to incur an additional $0.1 million in similar restructuring charges in
the first quarter of 2010. |
|
| (3) | Commencing in 2009 and applied retroactively, the realized and unrealized gains and losses
related to derivative instruments that are not designated as hedges for accounting purposes,
including non-designated derivatives relating to the Dropdown Predecessor, have been
reclassified to a separate line item in the Consolidated Statements of Income (Loss). The
realized gains (losses) relate to the amounts the Partnership actually paid or received to
settle such derivative instruments and the unrealized gains (losses) relate to the change in
fair value of such derivative instruments as detailed in the table below: |
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
Realized (losses) gains relating to: |
||||||||||||||||||||
Interest rate swaps |
(11,925 | ) | (12,743 | ) | (5,911 | ) | (46,546 | ) | (19,663 | ) | ||||||||||
Foreign currency forward contract |
(125 | ) | (93 | ) | (443 | ) | (4,196 | ) | 1,972 | |||||||||||
| (12,050 | ) | (12,836 | ) | (6,354 | ) | (50,742 | ) | (17,691 | ) | |||||||||||
Unrealized gains (losses) relating to: |
||||||||||||||||||||
Interest rate swaps |
28,202 | (24,942 | ) | (145,965 | ) | 99,740 | (163,291 | ) | ||||||||||||
Foreign currency forward contracts |
(308 | ) | 476 | (3,444 | ) | 4,562 | (7,800 | ) | ||||||||||||
| 27,894 | (24,466 | ) | (149,409 | ) | 104,302 | (171,091 | ) | |||||||||||||
Total realized and unrealized gains
(losses) on non-designated derivative
instruments |
15,844 | (37,302 | ) | (155,763 | ) | 53,560 | (188,782 | ) | ||||||||||||
| (4) | Commencing in 2009 and applied retroactively, net income (loss) includes the net income
(loss) attributable to non-controlling interests. |
|
| (5) | Results for the Petrojarl Varg FPSO for the periods prior to its acquisition on September 10,
2009 by the Partnership when it was owned and operated by Teekay Corporation, are referred to
as the Dropdown Predecessor. |
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
| As at | As at | As at | ||||||||||
| December 31, 2009 | September 30, 2009 | December 31, 2008(1) | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
ASSETS |
||||||||||||
Cash and cash equivalents |
101,747 | 143,746 | 132,348 | |||||||||
Other current assets |
146,777 | 124,710 | 114,071 | |||||||||
Vessels and equipment |
1,917,248 | 1,952,912 | 2,028,150 | |||||||||
Other assets |
58,041 | 58,955 | 74,438 | |||||||||
Intangible assets |
36,885 | 39,164 | 46,004 | |||||||||
Goodwill |
127,113 | 127,113 | 127,113 | |||||||||
Total Assets |
2,387,811 | 2,446,600 | 2,522,124 | |||||||||
LIABILITIES AND EQUITY |
||||||||||||
Accounts payable and accrued liabilities |
73,698 | 74,898 | 65,529 | |||||||||
Other current liabilities |
39,876 | 38,387 | 29,734 | |||||||||
Current portion of long-term debt |
108,159 | 77,322 | 125,503 | |||||||||
Current portion of derivative instruments |
31,852 | 31,203 | 66,135 | |||||||||
Long-term debt |
1,627,455 | 1,694,116 | 1,711,711 | |||||||||
Other long-term liabilities |
73,247 | 114,736 | 212,319 | |||||||||
Equity: |
||||||||||||
Non-controlling interest |
219,692 | 211,508 | 201,383 | |||||||||
Partners’ equity(1) |
213,832 | 204,430 | 109,810 | |||||||||
Total Liabilities and Equity |
2,387,811 | 2,446,600 | 2,522,124 | |||||||||
| (1) | In accordance with GAAP, the balance sheet at December 31, 2008 includes the Dropdown
Predecessor for the Petrojarl Varg FPSO, which was acquired by the Partnership on September
10, 2009, to reflect ownership of the vessel from the time it was acquired by Teekay
Corporation on October 1, 2006. |
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TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2009(1) | 2008(1) | |||||||
| (unaudited) | (unaudited) | |||||||
Cash and cash equivalents provided by (used for) |
||||||||
OPERATING ACTIVITIES |
||||||||
Net operating cash flow |
168,213 | 205,011 | ||||||
FINANCING ACTIVITIES |
||||||||
Proceeds from issuance of long-term debt |
279,575 | 259,261 | ||||||
Scheduled repayments of long-term debt |
(34,948 | ) | (73,331 | ) | ||||
Prepayments of long-term debt |
(426,090 | ) | (138,085 | ) | ||||
Net advances to affiliates |
— | (46,544 | ) | |||||
Prepayments of joint venture partner advances |
(21,532 | ) | — | |||||
Joint venture partner advances |
477 | 17,485 | ||||||
Net proceeds from equity offering |
104,127 | 210,645 | ||||||
Equity contribution from joint venture partner |
4,772 | 5,200 | ||||||
Contribution of capital from Teekay Corporation
to Dropdown Predecessor relating to Petrojarl Varg |
110,386 | 73,062 | ||||||
Purchase of Petrojarl Varg from Teekay Corporation |
(100,000 | ) | — | |||||
Distribution to Teekay Corporation relating to purchase of SPT
Explorer L.L.C. and SPT Navigator L.L.C. |
— | (16,661 | ) | |||||
Excess of purchase price over the contributed basis of a 25%
interest in Teekay Offshore Operating L.P. |
— | (91,562 | ) | |||||
Cash distributions paid by the Partnership |
(60,452 | ) | (42,226 | ) | ||||
Cash distributions paid by subsidiaries to non-controlling interest |
(61,065 | ) | (71,976 | ) | ||||
Other |
(5,089 | ) | (1,500 | ) | ||||
Net financing cash flow |
(209,839 | ) | 83,768 | |||||
INVESTING ACTIVITIES |
||||||||
Expenditures for vessels and equipment |
(11,365 | ) | (57,858 | ) | ||||
Purchase of 35% of Petrojarl Varg by Teekay Corporation |
— | (134,183 | ) | |||||
Investment in direct financing lease assets |
(579 | ) | (536 | ) | ||||
Direct financing lease payments received |
22,969 | 22,352 | ||||||
Purchase of 25% interest in Teekay Offshore Operating L.P. |
— | (115,066 | ) | |||||
Net investing cash flow |
11,025 | (285,291 | ) | |||||
(Decrease) increase in cash and cash equivalents |
(30,601 | ) | 3,488 | |||||
Cash and cash equivalents, beginning of the year |
132,348 | 128,860 | ||||||
Cash and cash equivalents, end of the year |
101,747 | 132,348 | ||||||
| (1) | In accordance with GAAP, the Consolidated Statements of Cash Flows includes the cash flows
relating to the Dropdown Predecessor for the Petrojarl Varg FPSO, for the period from October
1, 2006 to September 10, 2009, when the vessel was under the common control of Teekay
Corporation, but prior to its acquisition by the Partnership. |
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9
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX A — SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars)
APPENDIX A — SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars)
Set forth below is a reconciliation of the Partnership’s unaudited adjusted net income (loss) attributable to the partners, a
non-GAAP financial measure, to net income as determined in accordance with GAAP, adjusted for some of the significant items of
income and expense that affected the Partnership’s net income (loss) for the three months ended December 31, 2009 and September
30, 2009, and for the twelve months ended December 31, 2009 and 2008, all of which items are typically excluded by securities
analysts in their published estimates of the Partnership’s financial results:
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2009 | September 30, 2009 | December 31, 2009 | December 31, 2008 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Net income (loss) — GAAP basis |
51,362 | (31,488 | ) | 132,599 | (159,273 | ) | ||||||||||
Adjustments: |
||||||||||||||||
Net income (loss) attributable to
non-controlling interests |
24,659 | (12,560 | ) | 57,490 | 10,863 | |||||||||||
Net income (loss) attributable to
Dropdown Predecessor |
— | (5,551 | ) | 11,378 | (151,169 | ) | ||||||||||
Net income (loss) attributable to the
partners |
26,703 | (13,377 | ) | 63,731 | (18,967 | ) | ||||||||||
Add (subtract) specific items
affecting net income: |
||||||||||||||||
Restructuring charges (1) |
955 | 371 | 5,008 | — | ||||||||||||
Foreign exchange (gains) losses
(2) |
(1,837 | ) | 3,414 | 5,178 | (4,343 | ) | ||||||||||
Foreign currency exchange losses
(gains) resulting from hedging
ineffectiveness (3) |
480 | (2,630 | ) | (5,319 | ) | 222 | ||||||||||
Deferred income tax (recovery)
expense relating to unrealized
foreign exchange gains and losses
(4) |
(470 | ) | 14,586 | 24,384 | (28,223 | ) | ||||||||||
Unrealized (gains) losses on
derivative instruments
(5) |
(27,894 | ) | 19,778 | (91,224 | ) | 136,648 | ||||||||||
Other (6) |
3,714 | 5,516 | 9,230 | — | ||||||||||||
Non-controlling interests’ share of
items above |
13,091 | (19,236 | ) | 26,600 | (50,850 | ) | ||||||||||
Total adjustments |
(11,961 | ) | 21,800 | (26,143 | ) | 53,454 | ||||||||||
Adjusted net income attributable to
the partners |
14,742 | 8,423 | 37,588 | 34,487 | ||||||||||||
| (1) | Restructuring charges were incurred in connection with the re-flagging of certain of the
Partnership’s vessels, which are expected to result in lower future crewing costs. |
|
| (2) | Foreign exchange (gains) losses primarily relate to the Partnership’s revaluation of all
foreign currency-denominated monetary assets and liabilities based on the prevailing exchange
rate at the end of each reporting period, excluding losses relating to the Dropdown
Predecessor of $0.9 million for the three months ended September 30, 2009, and $1.0 million
and $0.1 million, respectively, for the twelve months ended December 31, 2009 and 2008. |
|
| (3) | Foreign currency exchange gains (losses) resulting from hedging ineffectiveness includes the
unrealized gains (losses) arising from hedge ineffectiveness from foreign exchange forward
contracts that are or have been designated as hedges for accounting purposes. This excludes
foreign currency exchange gains (losses) resulting from hedging ineffectiveness relating to
the Dropdown Predecessor of $0.2 million for the three months ended September 30, 2009, and
$0.6 million and ($0.3) million, respectively, for the twelve months ended December 31, 2009
and 2008. |
|
| (4) | Portion of deferred income tax (recovery) expense related to unrealized foreign exchange
gains and losses. |
|
| (5) | Reflects the unrealized gain or loss due to changes in the mark-to-market value of derivative
instruments that are not designated as hedges for accounting purposes, excluding unrealized
gains (losses) relating to the Dropdown Predecessor of ($4.7) million for the three months
ended September 30, 2009, and $13.1 million and ($34.4) million, respectively, for the twelve
months ended December 31, 2009 and 2008. |
|
| (6) | Relates primarily to non-recurring adjustments to tax accruals and a cumulative adjustment to
depreciation expense. |
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10
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX B —RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)
APPENDIX B —RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure — Distributable Cash Flow (DCF)
Distributable cash flow represents net income adjusted for depreciation and amortization expense,
non-controlling interest, non-cash items, estimated maintenance capital expenditures, gains and
losses on vessel sales, unrealized gains and losses from derivatives, non-cash income taxes,
unrealized foreign exchange related items and income (loss) attributable to Dropdown Predecessor.
Maintenance capital expenditures represent those capital expenditures required to maintain over the
long-term the operating capacity of, or the revenue generated by, the Partnership’s capital assets.
Distributable cash flow is a quantitative standard used in the publicly-traded partnership
investment community to assist in evaluating a partnership’s ability to make quarterly cash
distributions. Distributable cash flow is not defined by GAAP and should not be considered as an
alternative to net income or any other indicator of the Partnership’s performance required by GAAP.
The table below reconciles distributable cash flow to net income.
| Three Months Ended | ||||
| December 31, 2009 | ||||
| (unaudited) | ||||
Net income |
51,362 | |||
Add: |
||||
Depreciation and amortization |
44,984 | |||
Foreign exchange and other, net |
315 | |||
Less: |
||||
Unrealized gains on non-designated derivative instruments |
(27,894 | ) | ||
Income tax recovery |
(14,482 | ) | ||
Estimated maintenance capital expenditures |
(22,428 | ) | ||
Distributable Cash Flow before Non-Controlling Interest |
31,857 | |||
Non-controlling interests’ share of DCF |
(13,638 | ) | ||
Distributable Cash Flow |
18,219 | |||
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11
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C —SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
APPENDIX C —SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
| Three Months Ended December 31, 2009 | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Shuttle | Conventional | |||||||||||||||||||
| Tanker | Tanker | |||||||||||||||||||
| Segment | Segment | FSO Segment | FPSO Segment | Total | ||||||||||||||||
Net voyage revenues (1) |
109,197 | 26,461 | 16,121 | 26,996 | 178,775 | |||||||||||||||
Vessel operating expenses(2) |
34,741 | 5,961 | 7,614 | 13,326 | 61,642 | |||||||||||||||
Time-charter hire expense |
28,141 | — | — | — | 28,141 | |||||||||||||||
Depreciation and amortization |
28,003 | 5,876 | 5,472 | 5,633 | 44,984 | |||||||||||||||
General and administrative(2) |
11,542 | 1,555 | 743 | 2,036 | 15,876 | |||||||||||||||
Restructuring charges |
681 | 274 | — | — | 955 | |||||||||||||||
Income from vessel operations |
6,089 | 12,795 | 2,292 | 6,001 | 27,177 | |||||||||||||||
| Three Months Ended September 30, 2009 | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Shuttle | Conventional | |||||||||||||||||||
| Tanker | Tanker | |||||||||||||||||||
| Segment | Segment | FSO Segment | FPSO Segment(3) | Total | ||||||||||||||||
Net voyage revenues (1) |
110,313 | 24,799 | 14,509 | 25,525 | 175,146 | |||||||||||||||
Vessel operating expenses(2) |
31,751 | 6,210 | 6,876 | 10,020 | 54,857 | |||||||||||||||
Time-charter hire expense |
27,772 | — | — | — | 27,772 | |||||||||||||||
Depreciation and amortization |
23,670 | 6,208 | 5,470 | 5,633 | 40,981 | |||||||||||||||
General and administrative(2) |
11,173 | 1,124 | 892 | 631 | 13,820 | |||||||||||||||
Restructuring charges |
371 | — | — | — | 371 | |||||||||||||||
Income from vessel operations |
15,576 | 11,257 | 1,271 | 9,241 | 37,345 | |||||||||||||||
| (1) | Net voyage revenues represents voyage revenues less voyage expenses, which comprise all
expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls
and brokerage commissions. Net voyage revenues is a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping companies. Please see the
Partnership’s web site at www.teekayoffshore.com for a reconciliation of this non-GAAP measure
as used in this release to the most directly comparable GAAP financial measure. |
|
| (2) | Commencing in 2009 and applied retroactively, the gains and losses related to derivative
instruments that are not designated as hedges for accounting purposes have been reclassified
to a separate line item in the Consolidated Statements of Income (Loss) and are no longer
included in the amounts above. |
|
| (3) | Income from operations for the Petrojarl Varg FPSO for the periods prior to its September 10,
2009 acquisition by the Partnership when it was owned and operated by Teekay Corporation, are
required by GAAP to be included in our results for such prior periods. |
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12
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities
Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain
future events and performance, including statements regarding: the Partnership’s future growth
prospects; profitability of our shuttle tankers; the potential for Teekay to offer additional
vessels to the Partnership, and the Partnership’s acquisitions of any such vessels; the potential
for Teekay to offer to the Partnership additional limited partner interests in OPCO; the
Partnership’s exposure to foreign currency fluctuations; and lower crewing expenses for re-flagged
vessels. The following factors are among those that could cause actual results to differ
materially from the forward-looking statements, which involve risks and uncertainties, and that
should be considered in evaluating any such statement: vessel operations and production volumes of
the Petrojarl Varg FPSO; failure of Teekay to offer to the Partnership additional vessels or
ownership interests in OPCO; required approvals by the Conflicts Committee of Teekay Offshore’s
general partner to acquire from Teekay vessels or ownership interests in OPCO; the Partnership’s
ability to raise financing to purchase additional vessels and/or interests in OPCO; changes to the
amount or proportion of revenues, expenses, or debt service costs denominated in foreign
currencies; revenue generated by our shuttle tankers under contracts of affreightment; 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, 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 Partnership’s expectations with respect
thereto or any change in events, conditions or circumstances on which any such statement is based.
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13
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: March 5, 2010 | By: | /s/ Peter Evensen | ||
| Peter Evensen | ||||
| Chief Executive Officer and Chief
Financial Officer (Principal Financial and Accounting Officer) |
||||