Teekay Offshore Partners Reports Fourth Quarter and Annual 2015 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 02/18/16 -- Highlights
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, 2015. During the fourth quarter of 2015, the Partnership generated distributable cash flow(1) of $67.0 million, compared to $50.0 million in the same period of the prior year. The increase in distributable cash flow was primarily due to the acquisition of the Petrojarl Knarr (Knarr) floating production, storage and offloading (FPSO) unit in July 2015, the acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the commencement of the Arendal Spirit unit for maintenance and safety (UMS) charter contract in early-June 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO. These increases were partially offset by the expiration of two shuttle tanker contracts in the second quarter of 2015 and the sale of two conventional tankers, the SPT Explorer and Navigator Spirit, in the fourth quarter of 2015.
On January 20, 2016, the Partnership declared a cash distribution of $0.11 per unit for the quarter ended December 31, 2015. The cash distribution was paid on February 12, 2016 to all unitholders of record on February 5, 2016.
CEO Commentary
"Despite the challenging macro energy environment affecting our customers, the Partnership grew its cash flows during the fourth quarter and fiscal year 2015, highlighting the stability of our business which plays an integral role in our customers'' oil production logistics chains," commented Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC. "The growth was driven mostly by the delivery and acquisition of several offshore units during 2015, including our largest FPSO acquisition to date, the Knarr FPSO, the Arendal Spirit UMS and six long-distance towing and offshore installation vessels."
Mr. Evensen added "Teekay Offshore''s fleet continues to operate with high uptime and fleet utilization, generating stable cash flow, supported by a diversified portfolio of long-term contracts with high quality counterparties."
"The decision in December to temporarily reduce Teekay Offshore''s distributions was a difficult decision and was caused by the inability to access competitively priced capital in the current negative capital market environment and was not caused by a shortfall in the cash flows of our operations," Mr. Evensen continued, "We believe the reduction is in the best interests of long-term unitholders as the reallocation of a significant portion of our internally generated cash flows to fund our profitable growth projects that will deliver over the next several years will result in higher available distributable cash flow per unit."
"We are pleased to announce the sale of our four remaining non-core conventional tankers, further improving the Partnership''s liquidity position," Mr. Evensen continued. "These asset sales take advantage of strong tanker asset prices and represent one of many ways that the Partnership is able to supplement its internally generated cash flows to fund our financing requirements."
Mr. Evensen added "Looking ahead to 2016, despite the sale of the conventional tankers and the anticipated redelivery of the Varg FPSO after operating on the Varg field for almost 18 years, the Partnership''s cash flows are expected to increase compared to 2015 supported by high uptime and fleet utilization and the delivery of various growth projects in 2016, including the Petrojarl I FPSO project and the delivery of four newbuilding long-distance towing and offshore installation vessels. We remain focused on completing our existing growth pipeline and are now pivoting our business strategy to focus on the future redeployment of our existing assets onto new contracts instead of new organic growth projects, implementing various cost saving initiatives, and addressing our remaining funding needs."
Business Outlook for 2016 and 2017
The Partnership plans to host a conference call on Thursday, February 18, at 12:30 p.m. (ET) to discuss the results contained in this news release as well as its business outlook, which includes additional forecasted cash flows for 2016 and 2017. A copy of the Fourth Quarter 2015 Earnings and Business Outlook Presentation, which will be discussed during this conference call, is available at .
Summary of Recent Events
Sale of Four Conventional Tankers
The Partnership completed the sale of two conventional tankers and has entered into an agreement to sell its remaining two conventional tankers for aggregate sales proceeds of approximately $130 million. The first two conventional tankers, the SPT Explorer and Navigator Spirit, were sold to Teekay Tankers Ltd. (Teekay Tankers) in mid-December 2015 and the two remaining conventional tankers, the Kilimanjaro Spirit and Fuji Spirit, are expected to be delivered to a third party in March 2016. After repaying existing debt secured by these assets and the novation of an existing $50 million revolving credit facility to Teekay Tankers, these transactions are expected to add approximately $60 million to the Partnership''s liquidity position. As part of the sale of the Kilimanjaro Spirit and the Fuji Spirit, the Partnership has agreed to charter-in both vessels for a period of three-years at $23,000 per day and $22,750 per day, respectively. Both vessels are expected to operate on the spot tanker market in Teekay''s Aframax RSA pool.
Termination of the Petrojarl Varg FPSO Contract
In November 2015, the Partnership received a termination notice for the Petrojarl Varg (Varg) FPSO charter contract from Repsol S.A. (Repsol), formerly Talisman Energy, based on a termination right that is specific to the Varg FPSO contract. Following discussions with Repsol, the Partnership currently expects the Varg FPSO to be redelivered to the Partnership in August 2016. The Partnership is currently pursuing various redeployment opportunities for the Varg FPSO, a unit which meets the strict Norwegian petroleum industry (NORSOK) standards.
Financial Summary
The Partnership reported adjusted net income attributable to the partners(1) of $53.7 million for the quarter ended December 31, 2015, compared to $40.1 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 decreasing net income by $9.8 million and $63.4 million for the quarters ended December 31, 2015 and 2014, respectively, as detailed in Appendix A to this release. Including these items, the Partnership reported, on a GAAP basis, net income attributable to the partners of $43.9 million for the fourth quarter of 2015, compared to a net loss attributable to the partners of $23.3 million in the same period of the prior year. Net revenues(2) increased to $312.5 million for the fourth quarter of 2015, compared to $236.3 million in the same period of the prior year.
The Partnership reported adjusted net income attributable to the partners(1) of $165.7 million for the year ended December 31, 2015, compared to $123.8 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 decreasing net income by $89.6 million and $116.7 million for the years ended December 31, 2015 and 2014, respectively, as detailed in Appendix A to this release. Including these items, the Partnership reported, on a GAAP basis, net income attributable to the partners of $76.1 million for the year ended December 31, 2015, compared to $7.2 million in the same period of the prior year. Net revenues(2) increased to $1.1 billion for the year ended December 31, 2015, compared to $907.0 million in the same period of the prior year.
Adjusted net income attributable to the partners for the three months and year ended December 31, 2015 increased from the same period in the prior year mainly due to the acquisition of the Knarr FPSO unit on July 1, 2015, the acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the Arendal Spirit UMS commencing its charter contract in early-June 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO. These increases were partially offset by a temporary shut-down on the Piranema Spirit FPSO for unscheduled repairs during the third quarter of 2015, the expiration of two shuttle tanker contracts in the second quarter of 2015, the sale of the Navion Svenita shuttle tanker in March 2015, and the sale of the SPT Explorer and Navigator Spirit conventional tankers during the fourth quarter of 2015.
For accounting purposes, the Partnership is required to recognize, through the consolidated statements of income (loss), changes in the fair value of derivative instruments as unrealized gains or losses. This revaluation does not affect the economics of any hedging transactions nor does it 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 six segments: the Shuttle Tanker segment, the FPSO segment, the FSO segment, the Conventional Tanker segment, the Towage segment and the UMS segment (please refer to the "Teekay Offshore''s Fleet" section of this release below and Appendices C through F for further details).
Shuttle Tanker Segment
Cash flow from vessel operations from the Partnership''s Shuttle Tanker segment increased to $63.2 million for the fourth quarter of 2015 compared to $60.7 million for the same period of the prior year, primarily due to the commencement of the shuttle tanker contract for the East Coast of Canada in June 2015, mobilization costs expensed on the HiLoad DP unit during the fourth quarter of 2014, and a reduction in operating expenses resulting from cost-saving initiatives and the depreciation of certain foreign currencies, partially offset by the sale of Navion Svenita in March 2015 and an increase in repair and crew training costs in the fourth quarter of 2015.
FPSO Segment
Cash flow from vessel operations from the Partnership''s FPSO segment (which also includes the results from two equity-accounted FPSO units), increased to $88.9 million for the fourth quarter of 2015 compared to $52.6 million for the same period of the prior year, primarily due to the acquisition of the Knarr FPSO unit from Teekay Corporation in July 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO, partially offset by a retroactive increase in charter rates for the Cidade de Rio das Ostras FPSO unit recorded in the fourth quarter of 2014 and higher repairs and maintenance on the Piranema Spirit FPSO unit in the fourth quarter of 2015.
FSO Segment
Cash flow from vessel operations from the Partnership''s FSO segment increased to $8.7 million for the fourth quarter of 2015, compared to $7.5 million for the same period of the prior year, primarily due to a decrease in management fees resulting from cost-saving initiatives.
Conventional Tanker Segment
Cash flow from vessel operations from the Partnership''s Conventional Tanker segment decreased to $3.7 million for the fourth quarter of 2015, compared to $5.5 million for the same period of the prior year, primarily due to net early termination fees paid to Teekay Corporation of $1.8 million relating to the charter contract terminations for the SPT Explorer, Navigator Spirit and the Fuji Spirit during the fourth quarter of 2015.
Towage Segment
Cash flow from vessel operations from the Partnership''s Towage segment of $2.8 million for the fourth quarter of 2015, primarily relates to the acquisition of the six towage vessels during the first seven months of 2015.
UMS Segment
Cash flow from vessel operations from the Partnership''s UMS segment increased to $5.7 million for the fourth quarter of 2015, primarily related to the Arendal Spirit UMS, which commenced its charter contract with Petrobras in June 2015.
Teekay Offshore''s Fleet
The following table summarizes Teekay Offshore''s fleet as of February 1, 2016.
Liquidity Update
As of December 31, 2015, the Partnership had total liquidity of $282.7 million (comprised of $258.5 million in cash and cash equivalents and $24.2 million in undrawn credit facilities).
Conference Call
The Partnership plans to host a conference call on Thursday, February 18, 2016 at 12:30 pm (ET) to discuss the results for the fourth quarter and fiscal year of 2015 as well as its business outlook. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
A supporting Fourth Quarter and Fiscal Year 2015 Earnings and Business Outlook Presentation will also be available at in advance of the conference call start time.
The conference call will be recorded and available until Thursday, March 3, 2016. This recording can be accessed following the live call by dialing 1-888-203-1112 or 647-436-0148, if outside North America, and entering access code 4410522.
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry, primarily focusing on the deepwater offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Teekay Offshore is structured as a publicly-traded master limited partnership (MLP) with consolidated assets of approximately $5.7 billion, comprised of 66 offshore assets, including shuttle tankers, floating production, storage and offloading (FPSO) units, floating storage and offtake (FSO) units, units for maintenance and safety (UMS), long-distance towing and offshore installation vessels and conventional tankers. The majority of Teekay Offshore''s fleet is employed on medium-term, stable contracts.
Teekay Offshore''s common units trade on the New York Stock Exchange under the symbol "TOO".
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 (loss) 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.
Distributable cash flow represents net income (loss) adjusted for depreciation and amortization expense, non-controlling interests, non-cash items, distributions relating to equity financing of newbuilding installments, distributions on our preferred units, vessel and business acquisition costs, estimated maintenance capital expenditures, write-down and gains on sale of vessels, unrealized gains and losses from derivatives, realized losses on termination of interest rate swaps, 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 (loss) or any other indicator of the Partnership''s performance required by GAAP. The table below reconciles distributable cash flow to net income (loss) for the quarters and years ended December 31, 2015 and December 31, 2014, respectively.
Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies, however, it is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Partnership''s performance required by GAAP.
Cash flow from vessel operations from consolidated vessels represents (loss) income from vessel operations before depreciation and amortization expense, write-down and gain on sale of vessels, and amortization of the non-cash portion of revenue contracts, and includes the realized gains and losses on the settlement of foreign exchange forward contracts and adjusts for direct financing leases to a cash basis. Cash flow from vessel operations is included because certain investors use this data to measure a company''s financial performance. Cash flow from vessel operations is not required by GAAP and should not be considered as an alternative to net income (loss) or any other indicator of the Partnership''s performance required by GAAP.
Cash flow from vessel operations from equity accounted vessels represents income from vessel operations before depreciation and amortization expense. Cash flow from equity accounted vessel represents the Partnership''s proportionate share of cash flow from vessel operations from its equity-accounted vessels, the Cidade de Itajai FPSO unit and the Libra FPSO conversion project. Cash flow from vessel operations from equity accounted vessels is included because certain investors use cash flow from vessel operations to measure a company''s financial performance, and to highlight this measure for the Partnership''s equity accounted joint ventures. Cash flow from vessel operations from equity accounted vessels is not required by GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership''s performance required by GAAP.
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 use of internally generated cash flows to contribute to the funding of growth projects; the impact of cash distribution reductions on the Partnership''s financial position; the potential for future cash distribution changes; the pending sale of the Kilimanjaro Spirit and Fuji Spirit, including the impact on future liquidity; the stability and growth of the Partnership''s future cash flows; the impact of growth projects on the Partnership''s future distributable cash flow per unit; the expected redelivery date and potential redeployment of the Varg FPSO; the timing of newbuilding, conversion and upgrade vessel or offshore unit deliveries and commencement of their respective charter contracts; and the Partnership''s focus on the future redeployment of existing assets onto new contracts instead of new organic growth projects, implementing various cost saving initiatives, and addressing remaining funding needs. 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, Brazil and East Coast of Canada offshore fields; potential early termination of contracts; shipyard delivery or vessel conversion and upgrade delays and cost overruns; changes in exploration, production and storage of offshore oil and gas, either generally or in particular regions that would impact expected future growth; delays in the commencement of charter contracts; potential delays in the sale of the Kilimanjaro Spirit and Fuji Spirit; the Partnership''s ability to raise adequate financing for existing growth projects, refinance future debt maturities, and other financing requirements; failure by the Partnership to secure a contract for the Varg FPSO; 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, 2014 and Form 6-K for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. 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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Datum: 18.02.2016 - 05:44 Uhr
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