Teekay Offshore Partners Reports First Quarter Results
(Thomson Reuters ONE) -
HAMILTON, BERMUDA--(Marketwire - May 17, 2012) - Teekay Offshore Partners L.P.
(NYSE:TOO) -
Highlights
* Generated distributable cash flow((1)) of $42.4 million in the first quarter
of 2012, up approximately 45 percent from the same period of the prior year.
* Increased cash distribution to $0.5125 per unit for the first quarter of
2012, up 2.5 percent from the previous quarter.
* Completed $230 million in new debt financings, increasing the Partnership's
liquidity to $436.7 million as at March 31, 2012.
Teekay Offshore GP LLC, the general partner of Teekay Offshore Partners L.P.
(Teekay Offshore or the Partnership), today reported the Partnership's results
for the quarter ended March 31, 2012. During the first quarter of 2012, the
Partnership generated distributable cash flow((1) )of $42.4 million, compared to
$29.2 million in the same period of the prior year. The increase was mainly
related to the Partnership's acquisition from Teekay Corporation (Teekay) of the
remaining 49 percent interest in Teekay Offshore Operating L.P. (OPCO) in March
2011 and the acquisition of the Piranema Spirit floating production storage and
offloading (FPSO) unit on November 30, 2011.
(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
distributable cash flow to the most directly comparable financial measure
under United States generally accepted accounting principles (GAAP).
On April 12, 2012, a cash distribution of $0.5125 per common unit was declared
for the quarter ended March 31, 2012, an increase of 2.5 percent from the
previous quarter. The cash distribution was paid on May 14, 2012 to all unit
holders of record on April 23, 2012.
"As we previously announced, the Partnership increased its first quarter of
2012 cash distribution by 2.5 percent to $0.5125 per unit," commented Peter
Evensen, Teekay Offshore GP LLC's Chief Executive Officer. "The Partnership's
distributable cash flow increased again this quarter with the positive impact
from the Piranema Spirit FPSO unit acquired in November of last year, and a
reduction in shuttle tanker operating and time-charter expenses." Mr. Evensen
continued, "Given the positive fundamentals in the offshore sector, we are
confident in our ability to continue growing the Partnership's asset base and
distributable cash flow, both in the near-term and longer-term, through
accretive acquisitions of suitable FPSO units owned by Teekay Corporation,
direct acquisition of offshore assets from third parties, and/or new organic
offshore projects."
Summary of Recent Financings
In late January 2012, the Partnership issued in the Norwegian bond market NOK
600 million in senior unsecured bonds that mature in January 2017. The aggregate
principal amount of the bonds is equivalent to approximately US$100 million and
all interest and principal payments have been swapped into US dollars and fixed
at an interest rate of 7.49 percent. The proceeds of the bonds have been used to
reduce amounts outstanding under the Partnership's revolving credit facilities
and for general partnership purposes, which may be redrawn in the future to fund
acquisitions. The Partnership will apply for listing of the bonds on the Oslo
Stock Exchange.
In February 2012, the Partnership entered into a new 5-year $130 million debt
facility secured by the Piranema Spirit FPSO unit.
Including these two recently completed financings, the Partnership's total
liquidity as of March 31, 2012 increased to $436.7 million, comprised of $234.7
million in cash and cash equivalents and $202.0 million in undrawn revolving
credit facilities.
Teekay Offshore's Fleet
The following table summarizes Teekay Offshore's fleet as of May 1, 2012.
+-----------------------------+-----------------------------------------------+
| | Number of Vessels |
| +---------------------------------------+-------+
| | Owned Chartered-in Committed | |
| | Vessels Vessels Newbuildings | Total |
| +---------------------------------------+-------+
| Shuttle Tanker Segment | 32((i)) 4 4((ii)) | 40 |
| | | |
| Conventional Tanker Segment | 10 - - | 10 |
| | | |
| FSO Segment | 5 - - | 5 |
| | | |
| FPSO Segment | 3 - - | 3 |
+-----------------------------+---------------------------------------+ |
| Total 50 4 4 | 58 |
+---------------------------------------------------------------------+-------+
(i) Includes six shuttle tankers in which Teekay Offshore's ownership interest
is 50 percent and three shuttle tankers in which Teekay Offshore's ownership
interest is 67 percent.
(ii) Includes four shuttle tanker newbuildings expected to deliver in mid- to
late-2013 and commence operations under contracts with a subsidiary of BG Group
plc in Brazil.
Future Growth Opportunities
Pursuant to an omnibus agreement that Teekay Offshore entered into in connection
with its initial public offering in December 2006, Teekay is obligated to offer
to the Partnership its interest in certain shuttle tankers, floating storage and
offtake (FSO) units and FPSO units Teekay owns or may acquire in the future,
provided the vessels are servicing contracts with remaining durations of greater
than three years. The Partnership may also acquire other vessels that Teekay may
offer it from time to time and intends to pursue direct acquisitions from third
parties and new organic offshore projects.
Shuttle Tankers
In June 2011, the Partnership entered into a new long-term contract with a
subsidiary of BG Group plc (BG) to provide shuttle tanker services in Brazil.
The contract with BG will be serviced by four Suezmax newbuilding shuttle
tankers under construction by Samsung Heavy Industries for an estimated total
delivered cost of approximately $470 million. Upon their scheduled deliveries in
mid- to late-2013, the vessels will commence operations under 10-year, fixed-
rate time-charter contracts. The contract with BG also includes certain
extension options and vessel purchase options.
FPSO Units
As previously announced, on November 30, 2011, Teekay acquired from Sevan Marine
ASA (Sevan) the Hummingbird Spirit FPSO unit (which is currently operating under
a short-term charter contract), and has agreed to acquire the Voyageur Spirit
FPSO unit upon the completion of certain upgrades that are expected to be
completed in the fourth quarter of 2012 (upon which time the unit is expected to
commence operations under a 5-year charter contract, plus extension options).
Pursuant to the omnibus agreement, Teekay will be obligated to offer both FPSO
units to Teekay Offshore within approximately one year following commencement of
charter contracts with a firm period of greater than three years in duration.
Pursuant to the omnibus agreement and a subsequent agreement, Teekay is
obligated to offer to sell the Petrojarl Foinaven FPSO unit, an existing unit
owned by Teekay and operating under a long-term contract in the North Sea, to
Teekay Offshore prior to July 9, 2012. The purchase price for the Petrojarl
Foinaven FPSO unit would be its fair market value plus any additional tax or
other costs to Teekay that would be required to transfer the FPSO unit to the
Partnership.
In October 2010, Teekay signed a long-term contract with Petroleo Brasileiro
S.A. (or Petrobras) to provide an FPSO unit for the Tiro and Sidon fields
located in the Santos Basin offshore Brazil. The contract with Petrobras will be
serviced by a newly-converted FPSO unit named Petrojarl Cidade de Itajai. This
FPSO unit is scheduled to deliver from the shipyard in the third quarter of
2012 and arrive in Brazilian waters early in the fourth quarter of 2012, upon
which time the unit is expected to commence operations under a nine-year, fixed-
rate time-charter contract with Petrobras with six additional one-year extension
options. Pursuant to the omnibus agreement, Teekay is obligated to offer to the
Partnership its 50 percent interest in this FPSO project at Teekay's fully
built-up cost, within approximately one year after the commencement of the
charter with Petrobras.
In May 2011, Teekay entered into a joint venture agreement with Odebrecht Oil &
Gas S.A. (a member of the Odebrecht group) to jointly pursue FPSO projects in
Brazil. Odebrecht is a well-established Brazil-based company that operates in
the engineering and construction, petrochemical, bioenergy, energy, oil and gas,
real estate and environmental engineering sectors, with over 120,000 employees
and a presence in over 20 countries. As part of the joint venture agreement,
Odebrecht is a 50 percent partner in the Tiro Sidon FPSO project and Teekay is
currently working with Odebrecht on other FPSO project opportunities that, if
awarded, may result in the Partnership being able to acquire Teekay's interests
in such projects pursuant to the omnibus agreement.
In June 2011, Teekay entered into a new contract with BG Norge Limited to
provide a high-specification FPSO unit for the Knarr oil and gas field located
in the North Sea. The contract will be serviced by a new FPSO unit to be
constructed by Samsung Heavy Industries for a fully built-up cost of
approximately $1 billion. Pursuant to the omnibus agreement, Teekay is obligated
to offer to the Partnership its interest in this FPSO project at Teekay's fully
built-up cost, within approximately one year after the commencement of the
charter, which is expected to commence in the first quarter of 2014.
Financial Summary
The Partnership reported adjusted net income attributable to the partners((1))
(as detailed in Appendix A to this release) of $26.1 million for the quarter
ended March 31, 2012, compared to $22.1 million for the same period of the prior
year. Adjusted net income attributable to the partners excludes a number of
specific items that had the net effect of increasing net income by $26.5 million
and $1.3 million for the quarters ended March 31, 2012 and March 31, 2011,
respectively, as detailed in Appendix A. Including these items, the Partnership
reported, on a GAAP basis, net income attributable to the partners of $52.6
million for the first quarter of 2012, compared to $23.4 million in the same
period of the prior year. Net revenues((2)) of $208.1 million for the first
quarter of 2012 was comparable to the same period of the prior year.
(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 that are typically excluded by securities analysts in their
published estimates of the Partnership's financial results.
(2) Net revenues represents revenues less voyage expenses, which comprise all
expenses relating to certain voyages, including bunker fuel expenses, port
fees, canal tolls and brokerage commissions. Net 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
http://www.teekayoffshore.com/ for a reconciliation of this non-GAAP measure
as used in this release to the most directly comparable GAAP financial
measure.
For accounting purposes, the Partnership is required to recognize, through the
consolidated statements of income, changes in the fair value of certain
derivative instruments as unrealized gains or losses. 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.
Operating Results
The following table highlights certain financial information for Teekay
Offshore's four segments: the Shuttle Tanker segment, the Conventional Tanker
segment, the FSO segment, and the FPSO segment (please refer to the "Teekay
Offshore's Fleet" section of this release above and Appendix C for further
details).
+--------------------------+---------------------------------------------------+
| | Three Months Ended |
| | |
| | March 31, 2012 |
| | |
| | (unaudited) |
| | |
| | Conventional |
|(in thousands of U.S. |Shuttle Tanker Tanker FSO FPSO |
|dollars) | Segment Segment Segment Segment Total|
+--------------------------+---------------------------------------------------+
|Net revenues((1)) | 117,772 17,901 14,685 57,759 208,117|
| | |
| | |
| | |
|Vessel operating expenses | 36,625 5,449 6,867 22,066 71,007|
| | |
|Time-charter hire expense | 13,617 - - - 13,617|
| | |
|Depreciation and | |
|amortization | 31,371 3,256 2,258 12,726 49,611|
| | |
| | |
| | |
|Cash flow from vessel | |
|operations((2)) | 56,768 10,240 7,486 27,589 102,083|
+--------------------------+---------------------------------------------------+
+--------------------------+---------------------------------------------------+
| | Three Months Ended |
| | |
| | March 31, 2011 |
| | |
| | (unaudited) |
| | |
| | Conventional |
|(in thousands of U.S. |Shuttle Tanker Tanker FSO FPSO |
|dollars) | Segment Segment Segment Segment Total|
+--------------------------+---------------------------------------------------+
|Net revenues((1)) | 119,204 29,617 17,200 42,285 208,306|
| | |
| | |
| | |
|Vessel operating expenses | 40,785 5,825 9,148 19,372 75,130|
| | |
|Time-charter hire expense | 20,270 - - - 20,270|
| | |
|Depreciation and | |
|amortization | 27,432 6,045 3,181 8,912 45,570|
| | |
| | |
| | |
|Cash flow from vessel | |
|operations((2)) | 45,652 22,043 4,804 19,496 91,995|
+--------------------------+---------------------------------------------------+
(1) Net revenues represents revenues less voyage expenses, which comprise
all expenses relating to certain voyages, including bunker fuel expenses, port
fees, canal tolls and brokerage commissions. Net 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
http://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) Cash flow from vessel operations represents income from vessel operations
before depreciation and amortization expense, write-down of vessels and
amortization of deferred gains and in-process revenue contract, includes the
realized gains (losses) on the settlement of foreign exchange forward contracts
and adjusting for direct financing leases to a cash basis. 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 http://www.teekayoffshore.com/ for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP financial
measure.
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership's Shuttle Tanker segment
increased to $56.8 million for the first quarter of 2012 compared to $45.7
million for the same period of the prior year, primarily due to decreases in
time-charter hire expense, vessel operating expenses and restructuring charges.
Time-charter hire expense decreased due to the redelivery of one in-chartered
vessel in the fourth quarter of 2011 and from fewer short-term chartered-in
days. Vessel operating expenses decreased due to the lay-up of the Basker Spirit
commencing in the third quarter of 2011 and from reduced crew costs.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership's Conventional Tanker
segment decreased to $10.2 million in the first quarter of 2012 compared to
$22.0 million for the same period of the prior year, primarily due to the expiry
of time-charter contracts on two tankers during the fourth quarter of 2011,
which are now trading in the spot tanker market at lower rates, and the sale of
the Scotia Spirit in the third quarter of 2011.
FSO Segment
Cash flow from vessel operations from the Partnership's FSO segment increased to
$7.5 million in the first quarter of 2012 compared to $4.8 million for the same
period of the prior year, primarily due to restructuring costs associated with
the termination of the employment of certain seafarers of the Karratha Spirit
FSO unit during the first quarter of 2011.
FPSO Segment
Cash flow from vessel operations from the Partnership's FPSO segment increased
to $27.6 million for the first quarter of 2012 compared to $19.5 million for the
same period of the prior year, primarily due to the acquisition of the Piranema
Spirit FPSO unit on November 30, 2011 and a decrease in vessel operating
expenses for the Rio das Ostras FPSO unit. The Rio das Ostras' vessel operating
expenses decreased from the prior year mainly due to the higher maintenance work
while the vessel was being upgraded for the Aruana field during the first
quarter of 2011.
Liquidity
As of March 31, 2012, the Partnership had total liquidity of $436.7 million,
which consisted of $234.7 million in cash and cash equivalents and $202.0
million in undrawn revolving credit facilities.
Conference Call
The Partnership plans to host a conference call on Friday, May 18, 2012 at
11:00 a.m. (ET) to discuss its results for the first quarter of 2012. An
accompanying investor presentation will be available on Teekay Offshore's
website at www.teekayoffshore.com prior to the start of the call. All
unitholders and interested parties are invited to listen to the live conference
call by choosing from the following options:
* By dialing (866) 322-8032 or (416) 640-3406, if outside North America, and
quoting conference ID code 5961264.
* By accessing the webcast, which will be available on Teekay Offshore's
website at www.teekayoffshore.com (the archive will remain on the website
for a period of 30 days).
The conference call will be recorded and made available until Friday, May
25, 2012. This recording can be accessed following the live call by dialing
(888) 203-1112 or (647) 436-0148, if outside North America, and entering access
code 5961264.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine
transportation, oil production and storage services to the offshore oil industry
focusing on the fast-growing, deepwater offshore oil regions of the North Sea
and Brazil. Teekay Offshore owns interests in 40 shuttle tankers (including four
chartered-in vessels and four committed newbuildings), three floating
production, storage and offloading (FPSO) units, five floating storage and
offtake (FSO) units and ten conventional oil tankers. Teekay Offshore has rights
to participate in certain other FPSO and shuttle tanker opportunities provided
by Teekay Corporation (NYSE:TK) and Sevan Marine ASA (OSLO:SEVAN). A majority of
Teekay Offshore's fleet trades on long-term, stable contracts and it is
structured as a publicly-traded master limited partnership.
Teekay Offshore Partners' common units trade on the New York Stock Exchange
under the symbol "TOO".
--------------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except unit data)
-------------------------------------+------------------------------------------
| Three Months Ended
|
| December 31,
|March 31, 2012 2011 March 31, 2011
|
| (unaudited) (unaudited) (unaudited)
|
|
|
REVENUES | 244,598 238,122 233,771
-------------------------------------+------------------------------------------
|
|
OPERATING EXPENSES |
|
Voyage expenses | 36,481 33,011 25,465
|
Vessel operating expenses((1)) | 71,007 69,065 75,130
|
Time-charter hire expense | 13,617 17,406 20,270
|
Depreciation and amortization | 49,611 48,194 45,570
|
General and administrative((1)) | 20,136 18,780 18,730
|
Write-down of vessels and loss on |
sale of vessel | - 57,882 1,071
|
Restructuring charge((2)) | - - 3,924
-------------------------------------+------------------------------------------
| 190,852 244,338 190,160
-------------------------------------+------------------------------------------
Income (loss) from vessel operations | 53,746 (6,216) 43,611
-------------------------------------+------------------------------------------
OTHER ITEMS |
-------------------------------------+------------------------------------------
Interest expense | (12,776) (9,804) (8,469)
|
Interest income | 212 199 129
|
Realized and unrealized gain (loss) |
on derivative instruments((3)) | 16,239 (19,179) 10,840
|
Foreign exchange (loss) gain((4)) | (2,758) 2,247 (799)
|
Income tax expense | (1,485) (4,517) (2,653)
|
Other income - net | 1,425 171 1,310
-------------------------------------+------------------------------------------
Net income (loss) | 54,603 (37,099) 43,969
-------------------------------------+------------------------------------------
Net income (loss) attributable to: |
|
Non-controlling interests | 1,969 4,094 20,593
|
Partners | 52,634 (41,193) 23,376
|
Limited partners' units outstanding: |
|
Weighted-average number of common |
units outstanding - Basic and diluted| 70,626,554 65,910,343 57,170,219
|
Total units outstanding at end of |
period | 70,626,554 70,626,554 62,800,314
-------------------------------------+------------------------------------------
(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 (losses) arising from
hedge ineffectiveness from such forward contracts are reflected in vessel
operating expenses, and general and administrative expenses in the above Summary
Consolidated Statements of Income (Loss) as detailed in the table below:
Three Months Ended
December 31,
March 31, 2012 2011 March 31, 2011
Vessel operating expenses - - (184)
General and administrative 20 (96) 130
(2) Restructuring charges for the three months ended March 31, 2011 were
incurred in connection with the sale of an FSO unit and the termination of
the charter contract of one of the Partnership's shuttle tankers.
(3) The realized (losses) gains on derivative instruments relate to the amounts
the Partnership actually paid or received to settle such derivative
instruments, and the unrealized gains (losses) on derivative instruments
relate to the change in fair value of such derivative instruments as
detailed in the table below:
Three Months Ended
December 31,
March 31, 2012 2011 March 31, 2011
Realized (losses) gains
relating to:
Interest rate swaps (15,007) (16,115) (13,702)
Foreign currency
forward contract 1,198 1,132 418
---------------------------------------------------
(13,809) (14,983) (13,284)
---------------------------------------------------
Unrealized gains (losses)
relating to:
Interest rate swaps 24,763 (1,214) 20,765
Foreign currency
forward contracts 5,285 (2,982) 3,359
---------------------------------------------------
30,048 (4,196) 24,124
---------------------------------------------------
---------------------------------------------------
Total realized and
unrealized gains (losses)
on non-designated
derivative instruments 16,239 (19,179) 10,840
---------------------------------------------------
(4) Foreign exchange (loss) gain includes realized gains relating to the
amounts the Partnership received to settle the Partnership's non-designated
cross currency swaps that were entered into as an economic hedge in
relation to the Partnership's Norwegian Kroner (NOK)-denominated unsecured
bonds as detailed in the table below. The Partnership issued NOK 600
million unsecured bonds in 2010 maturing in 2013 and in 2012 issued NOK
600 million unsecured bonds maturing in 2017. Foreign exchange (loss) gain
also includes unrealized gains (losses) relating to the change in fair
value of such derivative instruments, partially offset by unrealized gains
(losses) on the revaluation of the NOK bonds as detailed in the table
below:
Three Months Ended
December 31,
March 31, 2012 2011 March 31, 2011
Realized gains on cross-currency
swaps 994 661 667
Unrealized gains (losses) on
cross-currency swaps 7,879 (1,159) 6,228
Unrealized (losses) gains on
revaluation of NOK bonds (9,031) 1,872 (5,254)
--------------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
--------------------------------------------------------------------------------
As at As at
December 31,
March 31, 2012 2011
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents 234,742 179,934
Vessels held for sale 19,000 19,000
Other current assets 162,262 148,825
Vessels and equipment 2,493,934 2,539,949
Advances on newbuilding contracts 46,333 45,637
Other assets 71,768 62,627
Intangible assets 20,114 21,644
Goodwill 127,113 127,113
--------------------------------------------------------------------------------
Total Assets 3,175,266 3,144,729
--------------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 98,963 99,220
Other current liabilities 112,814 99,624
Current portion of long-term debt 214,274 229,365
Long-term debt 1,847,607 1,799,711
Other long-term liabilities 362,119 393,769
Redeemable non-controlling interest 37,805 38,307
Equity:
Non-controlling interest 42,046 40,622
Partners' equity 459,638 444,111
--------------------------------------------------------------------------------
Total Liabilities and Equity 3,175,266 3,144,729
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
--------------------------------------------------------------------------------
Three Months Ended
March 31,
2012 2011
(unaudited) (unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
--------------------------------------------------------------------------------
Net operating cash flow 71,193 61,318
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from drawdown of long-term debt 233,202 177,644
Scheduled repayments of long-term debt (21,154) (44,441)
Prepayments of long-term debt (188,274) (50,360)
Advance from joint venture partner - 14,500
Contribution by Teekay Corporation relating to
acquisition of Rio das Ostras - 1,000
Purchase of 49% interest in Teekay Offshore Operating
L.P. - (160,000)
Equity contribution from joint venture partner 1,000 750
Cash distributions paid by the Partnership (37,803) (27,723)
Cash distributions paid by subsidiaries to non-
controlling interests (2,046) (17,449)
Other (4,028) -
--------------------------------------------------------------------------------
Net financing cash flow (19,103) (106,079)
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (2,199) (9,197)
Direct financing lease payments received 4,917 5,473
Proceeds from sale of vessels and equipment - 5,054
Investment in direct financing lease assets - 370
--------------------------------------------------------------------------------
Net investing cash flow 2,718 1,700
--------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 54,808 (43,061)
Cash and cash equivalents, beginning of the period 179,934 166,483
--------------------------------------------------------------------------------
Cash and cash equivalents, end of the period 234,742 123,422
--------------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
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 attributable to the partners, a non-GAAP financial measure, to net income
attributable to the partners as determined in accordance with GAAP. The
Partnership believes that, in addition to conventional measures prepared in
accordance with GAAP, certain investors use this information to evaluate the
Partnership's financial performance. The items below are also typically excluded
by securities analysts in their published estimates of the Partnership's
financial results. Adjusted net income attributable to the partners is intended
to provide additional information and should not be considered a substitute for
measures of performance prepared in accordance with GAAP.
--------------------------------------------------------------------------------
Three Months Ended
March 31, 2012 March 31, 2011
(unaudited) (unaudited)
Net income - GAAP basis 54,603 43,969
Adjustments:
Net income attributable to non-
controlling interests (1,969) (20,593)
--------------------------------------------------------------------------------
Net income attributable to the
partners 52,634 23,376
Add (subtract) specific items
affecting net income:
Foreign exchange losses((1)) 3,752 1,464
Foreign currency exchange (gains)
losses resulting from hedging
ineffectiveness((2)) (20) 54
Deferred income tax expense relating
to unrealized foreign exchange
gains((3)) - 6,519
Unrealized gains on derivative
instruments((4)) (30,048) (24,124)
Loss on sale of vessel((5)) - 171
Write-down of vessel((6)) - 900
Restructuring charges and other((7)) (546) 4,873
Non-controlling interests' share of
items above 313 8,849
--------------------------------------------------------------------------------
Total adjustments (26,549) (1,294)
--------------------------------------------------------------------------------
Adjusted net income attributable to
the partners 26,085 22,082
--------------------------------------------------------------------------------
(1) Foreign exchange 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 and
exclude the realized gains relating to the cross currency swaps for
outstanding Norwegian bonds of the Partnership.
(2) Foreign currency exchange (gains) losses resulting from hedging
ineffectiveness include the unrealized (gains) losses arising from hedge
ineffectiveness from foreign exchange forward contracts that are or have
been designated as hedges for accounting purposes.
(3) Portion of deferred income tax expense related to unrealized foreign
exchange gains and losses. There is no adjustment for this item for the
three months ended March 31, 2012, as a full valuation allowance was taken
starting in the third quarter of 2011 against the deferred tax asset.
(4) Reflects the unrealized gains due to changes in the mark-to-market value of
interest rate swaps and foreign exchange forward contracts that are not
designated as hedges for accounting purposes.
(5) Loss on sale of vessel relates to the sale of the Karratha Spirit FSO unit.
(6) Write-down of vessel relates to the valuation impairment of one
conventional tanker based on its estimated fair value.
(7) Other items for the three months ended March 31, 2012 include $0.5 million
related to a revaluation of a fair value adjustment of contingent
consideration liability associated with the purchase of the Scott Spirit
shuttle tanker. Restructuring charges of $3.9 million for the three months
ended March 31, 2011 were incurred in connection with the sale of an FSO
unit and the termination of the charter contract of one of the
Partnership's shuttle tankers. Other items for the three months ended March
31, 2011 include $0.9 million related to a one-time management fee
associated with the portion of stock-based compensation grants for Teekay's
former Chief Executive Officer that had not yet vested prior to the date of
his retirement on March 31, 2011.
-----------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
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, distributions
relating to equity financing of newbuilding instalments, vessel acquisition
costs, estimated maintenance capital expenditures, unrealized gains and losses
from derivatives, non-cash income taxes and unrealized foreign exchange related
items. 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 for the quarter.
------------------------------------------------+------------------------------+
| Three Months Ended |
| |
|March 31, 2012 March 31, 2011|
| |
| (unaudited) (unaudited)|
------------------------------------------------+------------------------------+
| |
| |
Net income | 54,603 43,969|
| |
Add (subtract): | |
| |
Write-down of vessel and loss on sale of | |
vessel | - 1,071|
| |
Depreciation and amortization | 49,611 45,570|
| |
Distributions relating to equity financing of | |
newbuilding instalments | 914 -|
| |
Foreign exchange and other, net | 1,144 4,323|
| |
Estimated maintenance capital expenditures | (27,673) (25,610)|
| |
Unrealized gains on non-designated derivative | |
instruments((1)) | (30,048) (24,124)|
------------------------------------------------+------------------------------+
Distributable Cash Flow before Non-Controlling | |
Interest | 48,551 45,199|
| |
Non-controlling interests' share of DCF | (6,127) (15,983)|
------------------------------------------------+------------------------------+
Distributable Cash Flow | 42,424 29,216|
------------------------------------------------+------------------------------+
(1) Derivative instruments include interest rate swaps and foreign
exchange forward contracts.
--------------------------------------------------------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
APPENDIX C - SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
--------------------------------------------------------------------------------
Three Months Ended March 31, 2012
(unaudited)
Shuttle Conventional
Tanker Tanker FSO FPSO
Segment Segment Segment Segment Total
--------------------------------------------------------------------------------
Net revenues((1)) 117,772 17,901 14,685 57,759 208,117
Vessel operating expenses 36,625 5,449 6,867 22,066 71,007
Time-charter hire expense 13,617 - - - 13,617
Depreciation and
amortization 31,371 3,256 2,258 12,726 49,611
General and
administrative 11,803 2,212 973 5,148 20,136
--------------------------------------------------------------------------------
Income from vessel
operations 24,356 6,984 4,587 17,819 53,746
--------------------------------------------------------------------------------
Three Months Ended March 31, 2011
(unaudited)
Shuttle Conventional
Tanker Tanker FSO FPSO
Segment Segment Segment Segment Total
--------------------------------------------------------------------------------
Net revenues((1)) 119,204 29,617 17,200 42,285 208,306
Vessel operating expenses 40,785 5,825 9,148 19,372 75,130
Time-charter hire expense 20,270 - - - 20,270
Depreciation and
amortization 27,432 6,045 3,181 8,912 45,570
General and
administrative 12,482 1,749 1,063 3,436 18,730
Write-down of vessel and
loss on sale of vessel - 900 171 - 1,071
Restructuring charges 1,227 - 2,697 - 3,924
--------------------------------------------------------------------------------
Income from vessel
operations 17,008 15,098 940 10,565 43,611
--------------------------------------------------------------------------------
(1) Net revenues represents revenues less voyage expenses, which comprise all
expenses relating to certain voyages, including bunker fuel expenses, port
fees, canal tolls and brokerage commissions. Net 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
http://www.teekayoffshore.com/ for a reconciliation of this non-GAAP measure
as used in this release to the most directly comparable GAAP financial
measure.
----------------------------
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 near-term and longer-term future growth
prospects, asset base, and distributable cash flow; the timing of delivery of
vessels under construction or conversion; the industry fundamentals for
deepwater offshore oil production, storage and transportation; the potential for
Teekay to offer additional vessels to the Partnership and the Partnership's
acquisition of any such vessels, including the Petrojarl Foinaven, the Petrojarl
Cidade de Itajai, the Voyageur Spirit, the Hummingbird Spirit and the
newbuilding FPSO unit that will service the Knarr field under contract with BG
Norge Limited; and the potential for the Partnership to acquire other vessels or
offshore projects from Teekay or directly from third parties. 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 oil production volumes; significant changes in oil prices; variations in
expected levels of field maintenance; increased operating expenses; different-
than-expected levels of oil production in the North Sea and Brazil offshore
fields; potential early termination of contracts; failure of Teekay to offer to
the Partnership additional vessels; the inability of the joint venture between
Teekay and Odebrecht to secure new Brazil FPSO projects that may be offered for
sale to the Partnership; failure to obtain required approvals by the Conflicts
Committee of Teekay Offshore's general partner to acquire other vessels or
offshore projects from Teekay or third parties; the Partnership's ability to
raise adequate financing to purchase additional assets; 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, 2011. 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.
Contact Information
Teekay Offshore Partners L.P.
Kent Alekson
Investor Relations Enquiries
+1 (604) 609-6442
www.teekayoffshore.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Teekay Offshore Partners L.P. via Thomson Reuters ONE
[HUG#1613094]
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Datum: 17.05.2012 - 16:19 Uhr
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