Item 6. | Exhibits |
Exhibit Number | Description |
101 | The following financial information from Teekay Offshore Partners L.P.’s Report on Form 6-K for the quarter ended September 30, 2017, filed with the SEC on November 24, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Unaudited Consolidated Statements of (Loss) Income for the three and nine months ended September 30, 2017 and 2016; (ii) Unaudited Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2017 and 2016; (iii) Unaudited Consolidated Balance Sheets as at September 30, 2017 and December 31, 2016; (iv) Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016; (v) Unaudited Consolidated Statement of Changes In Total Equity for the nine months ended September 30, 2017; and (vi) Notes to the Unaudited Consolidated Financial Statements. |
• | REGISTRATION STATEMENT ON FORM S-8 (NO. 333-147682) FILED WITH THE SEC ON NOVEMBER 28, 2007 |
• | REGISTRATION STATEMENT ON FORM F-3 (NO. 333-206461) FILED WITH THE SEC ON AUGUST 19, 2015 |
• | REGISTRATION STATEMENT ON FORM F-3 (NO. 333-212782) FILED WITH THE SEC ON JULY 29, 2016 |
• | REGISTRATION STATEMENT ON FORM F-3 (NO. 333-213229) FILED WITH THE SEC ON AUGUST 22, 2016 |
TEEKAY OFFSHORE PARTNERS L.P. | ||
By: | Teekay Offshore GP L.L.C., its general partner | |
Date: December 21, 2017 | By: | /s/ Edith Robinson |
Edith Robinson Secretary |
Document and Entity Information |
9 Months Ended |
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Sep. 30, 2017 | |
Document And Entity Information [Abstract] | |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | TOO |
Entity Registrant Name | Teekay Offshore Partners L.P. |
Entity Central Index Key | 0001382298 |
Current Fiscal Year End Date | --12-31 |
Unaudited Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (320,276) | $ 50,861 | $ (315,479) | $ (51,791) |
Other comprehensive income (loss) | ||||
Unrealized (loss) gain on qualifying cash flow hedging instruments (note 7) | (272) | 2,182 | (3,150) | (17,705) |
To interest expense: | ||||
Realized loss on qualifying cash flow hedging instruments (note 7) | 424 | 0 | 1,186 | 0 |
Other comprehensive income (loss) | 152 | 2,182 | (1,964) | (17,705) |
Comprehensive (loss) income | (320,124) | 53,043 | (317,443) | (69,496) |
Non-controlling interests in comprehensive (loss) income | (2,785) | 3,161 | 3,126 | 7,545 |
Preferred unitholders' interest in comprehensive (loss) income | 11,917 | 12,386 | 36,689 | 33,449 |
General and limited partners' interest in comprehensive (loss) income | $ (329,256) | $ 37,496 | $ (357,258) | $ (110,490) |
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts receivable non-trade | $ 19,868 | $ 13,032 |
Accumulated depreciation | $ 1,476,563 | $ 1,494,038 |
Convertible Preferred Stock | ||
Convertible Preferred Units, issued | 0 | 12,500,000.0 |
Convertible Preferred Units, outstanding | 0 | 12,500,000.0 |
Common Units | ||
Limited partners - units issued | 410,000,000 | 147,500,000 |
Limited partners - units outstanding | 410,000,000 | 147,500,000 |
Preferred Units | ||
Limited partners - units issued | 11,000,000 | 11,000,000 |
Limited partners - units outstanding | 11,000,000 | 11,000,000 |
Unaudited Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Cash Flows [Abstract] | ||
Dividends received | $ 7,000 | $ 3,472 |
Unaudited Consolidated Statement of Changes in Total Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands |
Total |
Convertible Preferred Stock |
General Partner |
Common Units
Limited Partners
|
Common Units and Additional Paid-in Capital
Limited Partners
|
Preferred Units
Preferred Partner
|
Warrants |
Accumulated Other Comprehensive Loss |
Non-controlling Interests |
Redeemable Non-controlling Interest |
---|---|---|---|---|---|---|---|---|---|---|
Beginning balance, units at Dec. 31, 2016 | 12,517 | 147,514 | 11,000 | |||||||
Beginning balance at Dec. 31, 2016 | $ 1,138,596 | $ 271,237 | $ 20,658 | $ 784,056 | $ 266,925 | $ 13,797 | $ (804) | $ 53,964 | $ 962 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (336,091) | 20,564 | (7,057) | (348,237) | 16,125 | 3,078 | 48 | |||
Other comprehensive loss (note 7) | (1,964) | (1,964) | ||||||||
Cash distributions | $ (40,882) | (10,205) | (24,757) | $ (16,125) | ||||||
Payment-in-kind distributions (note 10), units | 6,400 | 6,391 | ||||||||
Payment-in-kind distributions (note 10) | $ 18,988 | (14,022) | (699) | 19,687 | ||||||
Distribution to non-controlling interests | (3,360) | (3,360) | (1,044) | |||||||
Contribution of capital from joint venture partner | 6,000 | 6,000 | ||||||||
Contribution of capital from Teekay Corporation (notes 6i and 10) | 45,315 | 873 | 44,442 | |||||||
Proceeds from equity offerings, net of offering costs (note 10), units | 256,000 | |||||||||
Proceeds from equity offerings, net of offering costs (note 10) | 625,978 | 588 | 505,347 | 120,043 | ||||||
Repurchase of Convertible Preferred Units (note 10) | (19,971) | $ (269,993) | (383) | (19,588) | ||||||
Repurchase of Convertible Preferred Units (note 10), units | (12,517) | |||||||||
Equity based compensation and other (note 11), units | 140 | |||||||||
Equity based compensation and other (note 11) | (1,866) | $ 2,419 | 164 | (510) | (1,520) | |||||
Ending balance, units at Sep. 30, 2017 | 0 | 410,045 | 11,000 | |||||||
Ending balance at Sep. 30, 2017 | $ 1,470,685 | $ 0 | $ 14,910 | $ 999,616 | $ 266,925 | $ 132,320 | $ (2,768) | $ 59,682 | $ (34) |
Basis of Presentation |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (or GAAP). These financial statements include the accounts of Teekay Offshore Partners L.P., which is a limited partnership organized under the laws of the Republic of The Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Partnership). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements for the year ended December 31, 2016, which are included in the Partnership’s Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission (or SEC) on April 12, 2017. In the opinion of management of the Partnership’s general partner, Teekay Offshore GP L.L.C. (or the general partner), these interim unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly, in all material respects, the Partnership’s consolidated financial position, results of operations, changes in total equity and cash flows for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of those for a full fiscal year. Historically, the utilization of shuttle tankers in the North Sea is higher in the winter months as favorable weather conditions in the summer months provide opportunities for repairs and maintenance to the Partnership’s vessels and the offshore oil platforms. Downtime for repairs and maintenance generally reduces oil production and, thus, transportation requirements. Intercompany balances and transactions have been eliminated upon consolidation. In September 2017, the Partnership entered into a strategic partnership (the Brookfield Transaction) with Brookfield Business Partners L.P., together with its institutional partners (or Brookfield). As part of this transaction, Brookfield and Teekay Corporation invested $610.0 million and $30.0 million respectively, in exchange for 244.0 million and 12.0 million common units, respectively, of the Partnership and 62.4 million and 3.1 million warrants, respectively, exercisable for common units of the Partnership (see note 10). As part of the Brookfield Transaction, Brookfield acquired from a subsidiary of Teekay Corporation a $200.0 million subordinated promissory note of the Partnership (the 2016 Teekay Corporation Promissory Note) in exchange for $140 million in cash and 11.4 million warrants to purchase common units of the Partnership, and the Partnership, Teekay Corporation and Brookfield amended the promissory note to, among other things, extend the maturity date to January 1, 2022 (as amended, the Brookfield Promissory Note) (see note 6h). |
Accounting Pronouncements |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Pronouncements | Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (or ASU 2014-09). ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for the Partnership January 1, 2018 and will be applied as a cumulative-effect adjustment as of this date. The Partnership expects that the adoption of ASU 2014-09 will result in a change in the method of recognizing revenue from contracts of affreightments (or CoAs) whereby revenue will be recognized over the voyage until discharge is complete, instead of over the voyage until tendering notice for the next voyage. This will result in all revenue being fully recognized upon discharge of cargo whereas currently revenue recognition extends into the period the vessel returns to the oil field. This change may result in revenue being recognized earlier which may cause additional volatility in revenue and earnings between periods. In addition, the Partnership expects that the adoption of ASU 2014-09 will result in a change in the method of recognizing revenue for voyage charters, whereby the Partnership’s method of determining proportional performance will change from discharge-to-discharge to load-to-discharge. This will result in no revenue being recognized from discharge of the prior voyage to loading of the current voyage and all revenue being recognized from loading of the current voyage to discharge of the current voyage. This change will result in revenue being recognized later in the voyage which may cause additional volatility in revenue and earnings between periods. The Partnership is in the final stages of completing its assessment of ASU 2014-09, and is focused on developing process changes, determining the transitional impact and completing other items required for the adoption of ASU 2014-09. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (or ASU 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Partnership expects to adopt ASU 2016-02 effective January 1, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Partnership expects that the adoption of ASU 2016-02 will result in a change in accounting method for the lease portion of the daily charter hire for the Partnership's chartered-in vessels accounted for as operating leases with firm periods of greater than one year. Under ASU 2016-02, the Partnership will recognize a right-of-use asset and a lease liability on the balance sheet for these charters, whereas currently no right-of-use asset or lease liability is recognized. This will have the result of increasing the Partnership’s assets and liabilities. Based on the lease agreements the Partnership has entered into on or prior to September 30, 2017, the expected increase to the Partnership's assets and liabilities is not expected to be material. The pattern of expense recognition of chartered-in vessels is expected to remain substantially unchanged, unless the right of use asset becomes impaired. The Partnership is in the final stages of completing its assessment of ASU 2016-02, and is focused on developing process changes, determining the transitional impact and completing other items required for the adoption of ASU 2016-02. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (or ASU 2016-09). ASU 2016-09 simplifies aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. ASU 2016-09 became effective for the Partnership January 1, 2017. The impact of adopting this new accounting guidance is a change in the Partnership's presentation of cash payments for tax withholdings on share settled equity awards from an operating cash outflow to a financing cash outflow on the Partnership's statements of cash flows. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (or ASU 2016-13). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for the Partnership January 1, 2020, with a modified-retrospective approach. The Partnership is currently evaluating the effect of adopting this new guidance. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (or ASU 2016-15), which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity method investees in the statements of cash flows. ASU 2016-15 is effective for the Partnership January 1, 2018, with a retrospective approach. The Partnership is currently evaluating the effect of adopting this new guidance. In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash (or ASU 2016-18). ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 is effective for the Partnership January 1, 2018. Adoption of ASU 2016-18 will result in the Partnership’s statements of cash flows being modified to include changes in restricted cash in addition to changes in cash and cash equivalents. In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities (or ASU 2017-12). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 will be effective for the Partnership January 1, 2019. The Partnership is currently evaluating the effect of adopting this new guidance. |
Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments
For a description of how the Partnership estimates fair value and for a description of the fair value hierarchy levels, see Item 18: Financial Statements: Note 4 in the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2016. The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Partnership’s financial instruments that are not accounted for at fair value on a recurring basis.
Vessels and equipment and advances on newbuilding contracts and conversion costs – In September 2017, as a result of cost overruns and liquidated damages due to the delayed delivery of the Petrojarl I FPSO unit, the Partnership determined that the unit was impaired and wrote down the carrying value of the unit to its estimated fair value based on a discounted cash flow approach. The Partnership determined the discounted cash flows using the expected remaining costs to complete the conversion, the current contracted and projected time charter rates and costs, and estimated residual value, discounted at an estimated market participant rate of 10%. The projected future use takes into consideration the Partnership’s projected time charter rates that could be contracted in future periods. In establishing these estimates, the Partnership has considered current discussions with potential customers, available field expansions and historical experience redeploying FPSOs. The actual carrying value of the completed unit will include the estimated fair value and any remaining costs to complete, which are currently estimated to be $69.0 million, net of recoveries. In the third quarter of 2017, the Partnership received notice from the charterer, Petrobras, that they plan to redeliver the Cidade de Rio das Ostras FPSO upon completion of the unit's firm charter contract in January 2018. As a result of the change in expected cash flows, the Partnership determined that the unit was impaired and wrote down the carrying value of the unit to its estimated fair value based on a discounted cash flow approach. The Partnership determined the discounted cash flows using the current contract’s time charter rates and operating costs, projected future use on another field, and estimated residual value, discounted at an estimated market participant rate of 10%. The projected future use takes into consideration the Partnership’s projected time charter rates that could be contracted in future periods. In establishing these estimates, the Partnership has considered current discussions with potential customers, available field expansions and historical experience redeploying FPSOs. In September 2017, as a result of a change in expectations for future opportunities for the HiLoad DP unit, the Partnership determined that the unit was impaired and wrote down the carrying value of the unit to its estimated fair value based on a discounted cash flow approach. The Partnership determined the discounted cash flows using projected future uses and costs, discounted at an estimated market participant rate of 8.2%. The projected future use takes into consideration the recovery, if any, from the unit's terminated contract with Petrobras and the expected costs to place the unit into cold lay-up. In establishing these estimates, the Partnership has considered discussions with potential customers and projected lay-up costs. As a result of the above, the three units were written down to their respective fair values, which in aggregate totaled $226.3 million. Contingent consideration liability – In August 2014, the Partnership acquired 100% of the outstanding shares of Logitel Offshore Holding AS (or Logitel), a Norway-based company focused on high-end Units for Maintenance and Safety (or UMS), from CeFront Technology AS (or CeFront) for $4.0 million. The Partnership paid the purchase price in cash at closing, plus a commitment to pay an additional amount of up to $27.6 million, depending on certain performance criteria. For a description of the performance criteria, please refer to Item 18: Financial Statements: Note 4 in the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2015. The Arendal Spirit UMS was delivered to the Partnership on February 16, 2015. During the second quarter of 2016, the Partnership canceled the UMS construction contracts for its two remaining UMS newbuildings. This was expected to eliminate any future purchase price contingent consideration payments. Consequently, the contingent liability associated with the UMS newbuildings was reversed in the second quarter of 2016. The gain associated with this reversal is included in Other income (expense) - net on the Partnership's consolidated statements of loss for the three and nine months ended September 30, 2016. In September 2017, CeFront and subsidiaries of the Partnership entered into a settlement agreement relating to this contingent liability (see note 9c). Changes in the estimated fair value of the Partnership’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the three and nine months ended September 30, 2017 and September 30, 2016 are as follows:
The following table contains a summary of the Partnership’s financing receivables by type of borrower and the method by which the Partnership monitors the credit quality of its financing receivables on a quarterly basis:
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The following tables include results for the Partnership’s floating production storage and offloading (or FPSO) unit segment; shuttle tanker segment; floating storage and off-take (or FSO) unit segment; UMS segment; towage segment; and conventional tanker segment for the periods presented in these consolidated financial statements.
A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
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Long-Term Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt
As at September 30, 2017, the Partnership had four revolving credit facilities (December 31, 2016 - five), which, as at such date, provided for total borrowings of up to $222.4 million (December 31, 2016 - $325.1 million), and were fully drawn (December 31, 2016 - undrawn balance of $33.3 million). The total amount available under the revolving credit facilities reduces by $71.3 million (remainder of 2017), $144.7 million (2018) and $6.4 million (2019). The four revolving credit facilities are guaranteed by the Partnership and certain of its subsidiaries for all outstanding amounts and contain covenants that require the Partnership to maintain a minimum liquidity (cash, cash equivalents and undrawn committed revolving credit lines with at least six months to maturity) in an amount equal to the greater of $75.0 million and 5.0% of the Partnership’s total consolidated debt. One revolving credit facility that, as at December 31, 2016, was guaranteed by Teekay Corporation, matured during the nine months ended September 30, 2017. The revolving credit facilities are collateralized by first-priority mortgages granted on 20 of the Partnership’s vessels, together with other related security. In October 2017, six of the Partnership's existing debt facilities were refinanced with a new $600 million revolving credit facility with Teekay Shuttle Tankers L.L.C., as part of the formation of Teekay Shuttle Tankers L.L.C. (see note 15). As at September 30, 2017, the Partnership had the following outstanding Norwegian Kroner (or NOK) senior unsecured bonds listed on the Oslo Stock Exchange:
As at September 30, 2017, three of the Partnership’s 50%-owned subsidiaries had a total of two outstanding term loans (December 31, 2016 - three), which in the aggregate totaled $88.8 million. During the three months ended September 30, 2017, two of the original term loan facilities were refinanced into a single facility and the maturity date was extended from 2018 to 2021. The term loans reduce over time with quarterly and semi-annual payments and have varying maturities through 2021. These term loans are collateralized by first-priority mortgages on the three shuttle tankers to which the loans relate, together with other related security. As at September 30, 2017, the Partnership had guaranteed $44.4 million of the term loans, which represents its 50% share of the outstanding term loans, and the other owner had guaranteed the remaining $44.4 million of the term loans. As at September 30, 2017, the Partnership had term loans outstanding for eight shuttle tankers, three East Coast of Canada shuttle tanker newbuildings, three FSO units, four FPSO units, ten towing and offshore installation vessels and vessel newbuildings, and for the Arendal Spirit UMS, which totaled $2.1 billion in the aggregate. For the term loan for two shuttle tankers, one tranche reduces in semi-annual payments while another tranche correspondingly is drawn up every six months with final bullet payments of $29.0 million due in 2022 and $29.1 million due in 2023, respectively. The other term loans reduce over time with quarterly or semi-annual payments. These term loans have varying maturities through 2028 and are collateralized by first-priority mortgages on the vessels to which the loans relate, together with other related security. As at September 30, 2017, the Partnership had guaranteed $1.9 billion of these term loans and Teekay Corporation had guaranteed $219.7 million. In April 2017, Petroleo Netherlands B.V. notified Logitel Offshore Norway AS, a subsidiary of the Partnership, of its termination of the charter contract for the Arendal Spirit UMS. The Partnership has disputed the grounds for termination and is reviewing its legal options, including the initiation of a claim for unpaid standby fees and damages for wrongful termination of the time-charter contract. The term loan outstanding for the Arendal Spirit UMS, which as at September 30, 2017 had a balance of $112.5 million, was payable within 180 days of the charter cancellation unless a replacement contract was obtained or a lender waiver was received. As of September 30, 2017, the Partnership had reached an agreement with the lenders of the Arendal Spirit UMS debt facility to extend the waiver period to September 30, 2018, in exchange for a principal prepayment of $30.0 million, which was paid in October 2017. In February 2015, the Partnership issued $30.0 million in senior bonds that mature in June 2024 in a U.S. private placement. As at September 30, 2017, the carrying amount of the bonds was $22.0 million. The interest payments on the bonds are fixed at a rate of 4.27%. The bonds are collateralized by a first-priority mortgage on the Dampier Spirit FSO unit, together with other related security, and are guaranteed by the Partnership. In September 2013 and November 2013, the Partnership issued, in a U.S. private placement, a total of $174.2 million of ten-year senior bonds that mature in December 2023 to finance the Bossa Nova Spirit and Sertanejo Spirit shuttle tankers. The bonds accrue interest at a fixed combined rate of 4.96%. The bonds are collateralized by first-priority mortgages on the two vessels to which the bonds relate, together with other related security. The Partnership makes semi-annual repayments on the bonds and as at September 30, 2017, the carrying amount of the bonds was $140.7 million. In May 2014, the Partnership issued $300.0 million in five-year senior unsecured bonds that mature in July 2019 in the U.S. bond market. As at September 30, 2017, the carrying amount of the bonds was $300.0 million. The bonds are listed on the New York Stock Exchange. The interest payments on the bonds are fixed at a rate of 6.00%. Interest payments on the revolving credit facilities and the term loans are based on LIBOR plus margins, except for $66.6 million of one tranche of the term loan for the ALP Maritime Services (or ALP) newbuilding towing and offshore installation vessels, which is fixed at 2.93%. At September 30, 2017, the margins ranged between 0.30% and 4.75% (December 31, 2016 - 0.30% and 4.00%). The weighted-average interest rate on the Partnership’s U.S. Dollar variable rate long-term debt as at September 30, 2017 was 3.5% (December 31, 2016 - 3.0%). This rate does not include the effect of the Partnership’s interest rate swaps (see note 7) or fixed rate facilities. The aggregate annual long-term debt principal repayments required to be made subsequent to September 30, 2017 are $220.9 million (remainder of 2017), $615.4 million (2018), $781.3 million (2019), $350.9 million (2020), $304.9 million (2021), and $849.5 million (thereafter). Obligations under the Partnership’s credit facilities are secured by certain vessels, and if the Partnership is unable to repay debt under the credit facilities, the lenders could seek to foreclose on those assets. The Partnership has two revolving credit facilities and six term loans that require the Partnership to maintain vessel values to drawn principal balance ratios of a minimum range of 113% to 125%. Such requirement is assessed either on a semi-annual or annual basis, with reference to vessel valuations compiled by one or more agreed upon third parties. Should the ratio drop below the required amount, the lender may request the Partnership to either prepay a portion of the loan in the amount of the shortfall or provide additional collateral in the amount of the shortfall, at the Partnership's option. As at September 30, 2017, these ratios were estimated to range from 117% to 382% and the Partnership was in compliance with the minimum ratios required. The vessel values used in calculating these ratios are the appraised values provided by third parties where available, or prepared by the Partnership based on second-hand sale and purchase market data. Changes in the shuttle tanker, towing and offshore installation, UMS, FPSO or FSO markets could negatively affect these ratios. Please read Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Liquidity and Capital Needs for a description of certain covenants contained in the Partnership’s credit facilities and loan agreements. As at September 30, 2017, the Partnership was in compliance with all covenants related to the credit facilities and consolidated long-term debt. |
Related Party Transactions and Balances |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions and Balances | Related Party Transactions and Balances
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Partnership uses derivatives to manage certain risks in accordance with its overall risk management policies. Foreign Exchange Risk The Partnership economically hedges portions of its forecasted expenditures denominated in foreign currencies with foreign currency forward contracts. The Partnership has not designated, for accounting purposes, any of the foreign currency forward contracts held during the nine months ended September 30, 2017 as cash flow hedges. As at September 30, 2017, the Partnership was committed to the following foreign currency forward contracts:
(1)Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy. In connection with its issuance of NOK bonds, the Partnership has entered into cross currency swaps pursuant to which it receives the principal amount in NOK on the repayment and maturity dates, in exchange for payments of a fixed U.S. Dollar amount. In addition, the cross currency swaps exchange a receipt of floating interest in NOK based on NIBOR plus a margin for a payment of U.S. Dollar fixed interest. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and repayments of principal amounts of the Partnership’s NOK bonds due through 2019 (see note 5). In addition, the cross currency swaps economically hedge the interest rate exposure on the NOK bonds. The Partnership has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its NOK bonds. In September 2017, the Partnership partially settled certain of these cross currency swaps and incurred a realized loss during the three and nine months ended September 30, 2017, which is included in foreign currency exchange (loss) gain in the consolidated statements of (loss) income. As at September 30, 2017, the Partnership was committed to the following cross currency swaps:
(1) Notional amount reduces equally with NOK bond repayments (see note 5). (2) These swaps were partially settled during the three months ended September 30, 2017. The remaining amounts of the swaps were settled in October 2017 (see note 15).
(4) Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 6.8 million for $1.2 million (see note 5). Interest Rate Risk The Partnership enters into interest rate swaps, which exchange a receipt of floating interest for a payment of fixed interest, to reduce the Partnership’s exposure to interest rate variability on its outstanding floating-rate debt. Certain interest rate swaps are designated and accounted for as hedges within the Partnership's equity-accounted for investments (see note 12). As at September 30, 2017, the Partnership has not designated, for accounting purposes, its interest rate swaps as hedges in the consolidated financial statements. As at September 30, 2017, the Partnership was committed to the following interest rate swap agreements:
For the periods indicated, the following tables present the effective and ineffective portion of the gain (loss) on interest rate swap agreements designated and qualifying as cash flow hedges. The following tables exclude any interest rate swap agreements designated and qualifying as cash flow hedges in the Partnership’s equity accounted joint ventures.
As at September 30, 2017, the Partnership had multiple interest rate swaps, cross currency swaps and foreign currency forward contracts governed by the same master agreement. Each of the master agreements provide for the net settlement of all derivatives subject to that master agreement through a single payment in the event of default or termination of any one derivative. The fair value of these derivatives is presented on a gross basis in the Partnership’s consolidated balance sheets. As at September 30, 2017, these derivatives had an aggregate fair value asset amount of $0.9 million and an aggregate fair value liability amount of $204.0 million (December 31, 2016 - an aggregate fair value asset amount of $0.1 million and an aggregate fair value liability amount of $216.7 million). As at September 30, 2017, the Partnership had $3.2 million on deposit with the relevant counterparties as security for cross currency swap liabilities under certain master agreements (December 31, 2016 - $30.2 million). The deposit is presented in Restricted cash and Restricted cash - long-term on the consolidated balance sheets. Tabular disclosure The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Partnership’s balance sheets.
Total realized and unrealized (loss) gain on interest rate swaps and foreign currency forward contracts that are not designated for accounting purposes as cash flow hedges are recognized in earnings and reported in realized and unrealized (loss) gain on derivative instruments in the consolidated statements of (loss) income. The effect of the (loss) gain on these derivatives in the consolidated statements of (loss) income for the three and nine months ended September 30, 2017 and 2016 is as follows:
Total realized and unrealized gain on cross currency swaps are recognized in earnings and reported in foreign currency exchange (loss) gain in the consolidated statements of (loss) income. The effect of the gain on cross currency swaps in the consolidated statements of (loss) income for the three and nine months ended September 30, 2017 and 2016 is as follows:
The Partnership is exposed to credit loss in the event of non-performance by the counterparties, all of which are financial institutions, to the foreign currency forward contracts and the interest rate swap agreements. In order to minimize counterparty risk, the Partnership only enters into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transactions. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk. |
Income Tax |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax | Income Tax The components of the provision for income tax are as follows:
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Commitments and Contingencies |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies
In June 2016, the Partnership canceled the remaining UMS construction contracts for the two remaining UMS newbuildings, the Stavanger Spirit and the Nantong Spirit. As a result of this cancellation, during the second quarter of 2016, the Partnership wrote-off $43.7 million of assets related to these newbuildings and reversed contingent liabilities of $14.5 million associated with the delivery of these assets. An estimate of the potential damages for the cancellation of the Stavanger Spirit newbuilding contract is based on the amount due for the final yard installment of approximately $170 million less the estimated fair value of the Stavanger Spirit. Given the unique design of the vessel as well as the lack of recent sale and purchase transactions for this type of asset, the value of this vessel, and thus ultimately the amount of potential damages that may result from the cancellation, is uncertain. Pursuant to the Stavanger Spirit newbuilding contract and related agreements, COSCO only has recourse to the single-purpose subsidiary that was a party to the Stavanger Spirit newbuilding contract and its immediate parent company, Logitel Offshore Pte. Ltd., for damages incurred, although COSCO has commenced pre-action disclosure proceedings in Singapore against Logitel Offshore Pte. Ltd. and Logitel Offshore Rig II Pte. Ltd., seeking documentation to permit COSCO to review if there are potential claims against the Partnership and others for interference in the business of the subsidiaries. The Partnership's estimate of potential damages for the cancellation of the Nantong Spirit newbuilding contract is based upon estimates of a number of factors, including accumulated costs incurred by COSCO, sub-supplier contract cancellation costs, as well as how such costs are treated under the termination provisions in the contract. The Partnership estimates that the amount of potential damages faced by it in relation to the cancellation of the Nantong Spirit contract could range between $10 million and $40 million. Pursuant to the Nantong Spirit newbuilding contract, COSCO only has recourse to the single-purpose subsidiary that was a party to the Nantong Spirit newbuilding contract, and subject to the pre-action disclosure proceedings referred to above. During June 2017, Logitel Offshore Rig III LLC, the single-purpose subsidiary relating to the Nantong Spirit, received a claim from COSCO for $51.9 million for the unpaid balance for work completed, cancellation costs and damages, and during the third quarter of 2017, COSCO commenced arbitration against Logitel Offshore Rig III LLC. Logitel Offshore Rig III LLC is disputing this claim. As at September 30, 2017, the Partnership's subsidiaries have accrued $50.5 million in the aggregate related to the above claims and potential claims related to Logitel from COSCO. During September 2016, Sevan Marine ASA (or Sevan) commenced an action against Logitel in the Oslo District Court. The action relates to the agreements between Sevan and CeFront, related to the 2013 transfer by Sevan to Logitel Offshore Pte. Ltd. or its wholly-owned subsidiaries (collectively, Logitel Offshore), which was then owned by CeFront, of two hulls to be converted into UMS, including a $60 million bond loan (of which $41 million was a vendor credit and $19 million was a cash loan, and of which $50 million remains outstanding) granted by a Sevan affiliate to Logitel (or the 2013 Transaction). The action also relates to agreements between Sevan and the Partnership entered into in connection with the Partnership's acquisition of Logitel from CeFront in 2014 (or the 2014 Transaction). Sevan has claimed that the $60 million bond loan to Logitel contravened certain provisions of Norwegian corporate law and that, Sevan is entitled to the remaining payment of $50 million plus interest set at the court’s discretion. Logitel is disputing these claims. In October 2017, the court dismissed Sevan’s claim in its entirety and awarded Logitel costs. In November 2017, Sevan appealed this judgment. The Partnership reversed the accrual it had in place regarding the bond loan previously granted by Sevan to Logitel, as the likelihood of an adverse decision from the appeal of the judgment was no longer considered probable. In addition, Sevan presented Logitel Offshore with a formal notice of claim and request for arbitration seeking in excess of $11 million for license and service fees, which Sevan claimed was payable in connection with the delivery of the Arendal Spirit UMS, for which liability may have arose with subsidiaries of the Partnership. In October 2017, Logitel Offshore and Sevan settled this claim, with the Partnership paying $4.5 million to Sevan in full and final settlement of the disputes. As part of the settlement, Logitel Offshore also obtained a transferable worldwide license for the Arendal Spirit UMS. In addition, in September 2016, CeFront commenced an action against subsidiaries of the Partnership in the Oslo District Court, claiming that $3.8 million was due under a management agreement. CeFront also claimed that $3.3 million was due under the earn-out provisions of the contracts related to the Arendal Spirit and that $20.2 million was due or would have become due related to the earn-out provisions of the contracts for the Stavanger Spirit and Nantong Spirit. In September 2017, CeFront and subsidiaries of the Partnership settled these claims for $10.0 million, of which $7.3 million was paid and the balance is to be paid in quarterly installments through June 1, 2020.
During the three months ended September 30, 2017, the carrying value of the Petrojarl I FPSO unit was written down to its estimated fair value as a result of increasing costs associated with required additional upgrade work and estimated liquidated damages, payable to the charterer, associated with the delay in the commencement of the unit's operations (see note 14). Due to project delays in the delivery of the unit resulting from shipyard delays, an increased scope of work relating to field-specific requirements and the age of the unit, in July 2017 the Partnership agreed with QGEP to a revised delivery date of late-2017, a revised charter acceptance date of early-2018 and other amendments to the terms of the charter agreement. The Partnership is currently in discussions with Damen as to the settlement of the shipyard costs. The lenders under the credit facility financing the upgrades agreed to extend the availability date of the loan for successive periods up to December 15, 2017, as the loan was subject to a mandatory prepayment provision, initially in early October 2016, if the unit was not accepted at that time by QGEP. These interim extensions provided additional time for the Partnership to complete the FPSO upgrades and thereafter, amend the loan facility to reflect the revised delivery schedule. As at September 30, 2017 and December 31, 2016, the Partnership had $24.3 million and $60.0 million, respectively, held in escrow to fund the final upgrade costs. This amount is presented in Restricted Cash - current on the consolidated balance sheet.
Based on these factors, over the one-year period following the issuance of these financial statements, the Partnership will need to obtain additional sources of financing, in addition to amounts generated from operations, to meet its minimum liquidity requirements under its financial covenants. The proceeds from the Brookfield Transaction have strengthened the Partnership's capital structure and increased its liquidity. Additional potential sources of financing include raising additional capital through equity issuances, refinancing debt facilities that mature during the one-year period, increasing amounts available under existing debt facilities and entering into new debt facilities, including long-term debt financing related to the two shuttle tanker newbuildings ordered in July 2017, negotiating extensions or redeployments of existing assets and the sale of partial interests of assets. Based on the Partnership’s liquidity at the date these consolidated financial statements were issued, the liquidity it expects to generate from operations over the following year, and by incorporating the Partnership’s plans to raise additional liquidity that it considers probable of completion, the Partnership expects that it will have sufficient liquidity to enable the Partnership to continue as a going concern for at least the one-year period following the issuance of these consolidated financial statements. |
Total Capital and Net (Loss) Income Per Common Unit |
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Partners' Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Capital and Net (Loss) Income Per Common Unit | Total Capital and Net (Loss) Income Per Common Unit At September 30, 2017, a total of 26.7% of the Partnership’s common units outstanding were held by the public. Brookfield held a total of 59.5% of the common units of the Partnership and 49% of the general partner interest. The remaining common units, as well as 51% of the general partner interest, were held by subsidiaries of Teekay Corporation. At September 30, 2017, all of the Partnership’s outstanding Series A Cumulative Redeemable Preferred Units (or the Series A Preferred Units) and Series B Cumulative Redeemable Preferred Units (or the Series B Preferred Units) were held by entities other than Teekay Corporation, Brookfield and their affiliates. Common Units and Brookfield Transaction Warrants On September 25, 2017, as part of the Brookfield Transaction, the Partnership issued to Brookfield 244.0 million common units and warrants to purchase 62.4 million common units in exchange for gross proceeds of $610.0 million. In addition, the Partnership issued to Teekay Corporation 12.0 million common units and warrants (collectively with the warrants issued to Brookfield, the Brookfield Warrants) to purchase 3.1 million common units for gross proceeds of $30.0 million. Net of costs paid to Brookfield, a total of $637.0 million was received by the Partnership. As part of the amended and restated Brookfield Promissory Note transaction (see note 6h), Brookfield concurrently transferred 11.4 million Brookfield Transaction Warrants and $140.0 million to Teekay Corporation to acquire its $200 million subordinated promissory note owed by the Partnership. As at September 30, 2017, Brookfield and Teekay Corporation held 51.0 million and 14.5 million Brookfield Transaction Warrants, respectively. The $637.0 million net investment in the Partnership has been allocated on a relative fair value basis between the 256 million common units issued to Teekay Corporation and Brookfield ($512.6 million), the Brookfield Transaction Warrants ($121.3 million), the effective extinguishment of the $200 million Teekay Corporation Promissory Note (($160.5) million) and the concurrent issuance to Brookfield of the $200 million Brookfield Promissory Note ($163.6 million) (see note 6h). The $39.5 million gain on the extinguishment of the subordinated promissory note has been accounted for as a contribution of capital from Teekay Corporation. The Brookfield Transaction Warrants allow the holders to acquire one common unit for each Brookfield Transaction Warrant for an exercise price of $0.01 per common unit, which are exercisable until September 25, 2024 if the Partnership's common unit volume-weighted average price is equal to or greater than $4.00 per common unit for 10 consecutive trading days. During 2017, the Partnership also issued 6.4 million common units with a total value of $29.8 million (including the general partner's 2% proportionate capital contribution of $0.6 million) as a payment-in-kind for the distributions on the Partnership's Series C-1 Cumulative Convertible Perpetual Preferred Units (or the Series C-1 Preferred Units) and Series D Preferred Units, and distributions on the Partnership's common units and general partner interest held by subsidiaries of Teekay Corporation and payment-in-kind for interest on the 2016 Teekay Corporation Promissory Note (see note 6g). In June 2016, the Partnership agreed with Teekay Corporation that, until the Partnership's NOK bonds maturing in 2018 had been repaid (see note 15), all cash distributions (other than with respect to distributions, if any, on incentive distribution rights) to be paid by the Partnership to Teekay Corporation or its affiliates, including the Partnership's general partner, would instead be paid in common units or from the proceeds of the sale of common units. Series C-1 and Series D Preferred Units On September 25, 2017, as part of the Brookfield Transaction, the Partnership repurchased and subsequently canceled all of its outstanding Series C-1 and Series D Preferred Units from existing unitholders. The Series C-1 Preferred Units were repurchased for $18.20 per unit and Series D Preferred Units for $23.75 per unit, for a total cash payment of $260.2 million, which included $10.2 million of accrued and unpaid quarterly distributions, and resulted in a net accounting gain on repurchase of approximately $20.0 million. Consideration for the repurchase of the Series D Preferred Units also included a reduction in the exercise price, from $6.05 to $4.55 per unit, of 2,250,000 warrants issued in conjunction with the Series D Preferred Units in June 2016. As of September 30, 2017, 6,750,000 warrants with an exercise price of $4.55 remained outstanding of which 26% were held by Teekay Corporation, 11% were held by Resolute Investments Ltd., 10% were held by Brookfield and their affiliates and the remaining were held by unaffiliated entities. In June 2016, the Partnership and the holders of the Series C Cumulative Convertible Perpetual Preferred Units (or the Series C Preferred Units) exchanged approximately 1.9 million of the Series C Preferred Units for approximately 8.3 million common units of the Partnership and exchanged the remaining approximately 8.5 million Series C Preferred Units for approximately 8.5 million Series C-1 Preferred Units. Net (Loss) Income Per Common Unit
Limited partners’ interest in net (loss) income per common unit – basic is determined by dividing net (loss) income, after deducting the amount of net (loss) income attributable to the non-controlling interests, the general partner’s interest, the distributions on the Series A and B Preferred Units and, for periods prior to their exchange or repurchase, the Series C, C-1 and D Preferred Units, the periodic accretion prior to their repurchase of the Series D Preferred Units, the net gain on the repurchase of Preferred Units and gain on the modification of warrants, by the weighted-average number of common units outstanding during the period. The distributions payable or paid on the preferred units for the three and nine months ended September 30, 2017 were $11.9 million and $36.7 million, respectively and $12.4 million and $33.4 million, respectively, for the three and nine months ended September 30, 2016. The computation of limited partners’ interest in income per common unit - diluted assumes the issuance of common units for all potential dilutive securities, consisting of restricted units (see note 11), warrants and, and for periods prior to their exchange or repurchase, Series C, C-1 and D Preferred Units. Consequently, the net income attributable to limited partners’ interest is exclusive of any distributions on the Series C, C-1 and D Preferred Units, the prior periodic accretion of the Series D Preferred Units and the net gain on the repurchase of Preferred Units and gain on the modification of warrants. In addition, the weighted average number of common units outstanding has been increased assuming exercise of the restricted units and warrants using the treasury stock method and, for periods prior to the exchange or repurchase, the Series C, C-1 and D Preferred Units having been converted to common units using the if-converted method. The computation of limited partners’ interest in income per common unit - diluted does not assume the issuance of common units pursuant to the restricted units, warrants and, for periods prior to their exchange or repurchase, Series C, C-1 and D Preferred Units if the effect would be anti-dilutive. In periods where a loss is attributable to common unitholders all restricted units, warrants, the Series C, C-1 and D Preferred Units (for applicable periods) are anti-dilutive. In periods where income is allocated to common unitholders, the Series C-1 and D Preferred Units could have been anti-dilutive for periods prior to their exchange or repurchase. For the three and nine months ended September 30, 2017, 37.3 million and 51.3 million, respectively, common unit equivalent Series C-1 or D Preferred units, 11.0 million and 8.2 million, respectively, common unit equivalent warrants and 0.1 million and 0.4 million, respectively, restricted units were excluded from the computation of limited partners’ interest in net (loss) income per common unit - diluted, as their effect was anti-dilutive. For the three months ended September 30, 2016, a total of 12.6 million common unit equivalent Series C, C-1 and D Preferred Units and 8.2 million common unit equivalent warrants were excluded from the computation of limited partners’ interest in net income per common unit - diluted, as their effect was anti-dilutive. For the nine months ended September 30, 2016, a total of 38.7 million common unit equivalent Series C, C-1 and D Preferred Units, 6.8 million common unit equivalent warrants and 0.3 million restricted units were excluded from the computation of limited partners' interest in net loss per common unit - diluted, as their effect was anti-dilutive. The general partner’s and common unitholders’ interests in net (loss) income are calculated as if all net (loss) income was distributed according to the terms of the Partnership’s partnership agreement, regardless of whether those earnings would or could be distributed. The partnership agreement does not provide for the distribution of net (loss) income; rather, it provides for the distribution of available cash, which is a contractually defined term that generally means all cash on hand at the end of each quarter less, among other things, the amount of cash reserves established by the general partner’s board of directors to provide for the proper conduct of the Partnership’s business including reserves for maintenance and replacement capital expenditure, anticipated capital requirements and any accumulated distributions on, or redemptions of, the Series A Preferred Units, Series B Preferred Units, Series C-1 Preferred Units and Series D Preferred Units. Unlike available cash, net (loss) income is affected by non-cash items such as depreciation and amortization, unrealized gains and losses on derivative instruments and unrealized foreign currency translation gains and losses. The general partner is entitled to incentive distributions based on the amount of quarterly cash distributions per common unit. For more information on the increasing percentages, which may be used to calculate the general partner’s interest in net income or loss, please refer to the Partnership’s Annual Report on Form 20-F for the year ended December 31, 2016. Cash distributions were below $0.35 per common unit during the three and nine months ended September 30, 2017 and 2016. Consequently, the increasing percentages were not used to calculate the general partner’s interest in net (loss) income for the purposes of the net (loss) income per common unit calculation for the three and nine months ended September 30, 2017 and 2016. Pursuant to the partnership agreement, allocations to partners are made on a quarterly basis. |
Unit Based Compensation |
9 Months Ended |
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Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unit Based Compensation | Unit Based Compensation During the nine months ended September 30, 2017, a total of 56,950 common units, with an aggregate value of $0.3 million, were granted and issued to the non-management directors of the general partner as part of their annual compensation for 2017. The Partnership grants restricted unit-based compensation awards as incentive-based compensation to certain employees of Teekay Corporation’s subsidiaries that provide services to the Partnership. During March 2017 and 2016, the Partnership granted restricted unit-based compensation awards with respect to 321,318 and 601,368 units, respectively, with aggregate grant date fair values of $1.6 million and $2.4 million, respectively, based on the Partnership’s closing unit price on the grant dates. Each restricted unit is equal in value to one of the Partnership’s common units. Each award represents the specified number of the Partnership’s common units plus reinvested distributions from the grant date to the vesting date. The awards vest equally over three years from the grant date. Any portion of an award that is not vested on the date of a recipient’s termination of service is canceled, unless the termination arises as a result of the recipient’s retirement and, in this case, the award will continue to vest in accordance with the vesting schedule. Upon vesting, the awards are paid to each grantee in the form of common units or cash. During the nine months ended September 30, 2017, restricted unit-based awards with respect to a total of 255,370 common units with a fair value of $2.2 million, based on the Partnership’s closing unit price on the grant date, vested and the amount paid to the grantees was made by issuing 83,060 common units and by paying $0.6 million in cash. During the nine months ended September 30, 2016, restricted unit-based awards with respect to a total of 76,637 common units with a fair value of $2.0 million, based on the Partnership’s closing unit price on the grant date, vested and the amount paid to the grantees was made by issuing 25,286 common units and by paying $0.2 million in cash. The Partnership recorded unit-based compensation expense of $0.1 million and $0.3 million, during the three months ended September 30, 2017 and 2016, respectively, and $0.7 million and $1.9 million, during the nine months ended September 30, 2017 and 2016, respectively, in general and administrative expenses in the Partnership’s consolidated statements of (loss) income. As of September 30, 2017 and December 31, 2016, liabilities relating to cash settled restricted unit-based compensation awards of $0.5 million and $1.1 million, respectively, were recorded in accrued liabilities on the Partnership’s consolidated balance sheets. As at September 30, 2017, the Partnership had $1.3 million of non-vested awards not yet recognized, which the Partnership expects to recognize over a weighted average period of one year. |
Investment in Equity Accounted Joint Ventures and Advances to Joint Venture |
9 Months Ended |
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Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Accounted Joint Ventures and Advances to Joint Venture | Investment in Equity Accounted Joint Ventures and Advances to Joint Ventures In October 2014, the Partnership sold a 1995-built shuttle tanker, the Navion Norvegia, to OOG-TK Libra GmbH & Co KG (or Libra Joint Venture), a 50/50 joint venture with OOG, and was converted to a new FPSO unit for the Libra field in Brazil. The FPSO unit is scheduled to commence operations in the fourth quarter of 2017 (see note 9d). In conjunction with the conversion project, in late-2015, the Libra Joint Venture entered into a ten-year plus construction period loan facility providing total borrowings of up to $804 million, of which $716.6 million was drawn as of September 30, 2017. The interest payments of the loan facility are based on LIBOR, plus margins which range between 2.50% to 2.65%. The final payment under the loan facility is due October 2027. The Partnership and OOG have severally guaranteed to the banks their 50% shares of the equity contributions scheduled to fund the conversion project, and have jointly guaranteed any unexpected equity requirements. In addition, the Libra Joint Venture entered into ten-year interest rate swap agreements to economically hedge expected interest payments on the loan facility from 2017 to 2027, with an aggregate notional amount of $261.8 million which amortizes quarterly over the term of the interest rate swap agreements. These interest rate swap agreements exchange the receipt of LIBOR-based interest for the payment of a fixed rate of 2.49%. These interest rate swap agreements have been designated as qualifying cash flow hedging instruments for accounting purposes. During 2016 and 2017, as a result of certain defaults on interest payments by an OOG affiliate which OOG had guaranteed, the Libra Joint Venture was required to obtain waivers from the lenders of the loan facility. In November 2017, a new waiver was agreed with lenders which permitted a drawdown under the loan facility and will permit future drawdowns upon the occurrence of the commercial operations date of the FPSO unit, which is expected to occur in the fourth quarter of 2017. A failure in achieving the commercial operations of the FPSO would result in a continuation of a draw stop on the loan facility and could adversely affect the Libra Joint Venture’s ability to fund or operate the Libra FPSO (see note 9d). In June 2013, the Partnership acquired Teekay Corporation’s 50% interest in OOG-TKP FPSO GmbH & Co KG, a joint venture with OOG, which owns the Itajai FPSO unit. Included in the joint venture is an eight-year loan facility, which as at September 30, 2017 had an outstanding balance of $168.8 million. The interest payments of the loan facility are based on LIBOR, plus margins which range between 2.15% and 2.45%. The final payment under the loan facility is due October 2021. The Partnership has guaranteed its 50% share of the loan facility. In addition, the joint venture entered into ten-year interest rate swap agreements with an aggregate notional amount of $75.4 million as at September 30, 2017, which amortizes semi-annually over the term of the interest rate swap agreements. These interest rate swap agreements exchange the receipt of LIBOR-based interest for the payment of a fixed rate of 2.63%. These interest rate swap agreements are not designated as qualifying cash flow hedging instruments for accounting purposes. As at September 30, 2017 and December 31, 2016, the Partnership had total investments of $168.9 million and $141.8 million, respectively, in joint ventures. |
Restructuring Charge |
9 Months Ended |
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Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charge | Restructuring Charge During the three and nine months ended September 30, 2017, the Partnership recognized restructuring charges of $2.9 million and $3.3 million, respectively, mainly relating to severance costs from the termination of the charter contract for the Arendal Spirit UMS and the resulting decommissioning of the unit. During the three and nine months ended September 30, 2016, the Partnership recognized restructuring charges of $0.8 million and $2.3 million, respectively, mainly relating to the reorganization of the Partnership’s FPSO business to create better alignment with the Partnership’s offshore operations, resulting in a lower cost organization going forward. As of September 30, 2017 and September 30, 2016, restructuring liabilities of $2.7 million and $1.4 million, respectively, were recorded in accrued liabilities on the consolidated balance sheet. |
Write-down of vessels |
9 Months Ended |
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Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Write-down of vessels | Write-down of vessels During the three and nine months ended September 30, 2017, the carrying value of the Petrojarl I FPSO unit was written down to its estimated fair value, using a discounted cash flow valuation, as a result of increasing costs associated with additional upgrade work required and estimated liquidated damages associated with the delay in the commencement of the unit's operations. During the third quarter of 2017, the Petrojarl I FPSO unit was moved from the Damen Shipyard in the Netherlands to complete upgrades at the Aibel AS shipyard in Norway. Upon arrival at the Aibel AS shipyard, it was determined that additional upgrade work was required, resulting in a further increase in costs and a further delay of the commencement of the FPSO unit's operations which is expected to be delayed by approximately two months until early-2018. The Partnership's consolidated statement of (loss) income for the three and nine months ended September 30, 2017 includes a $213.2 million write-down related to this unit. The write-down is included in the Partnership's FPSO segment. During the three and nine months ended September 30, 2017, the carrying value of the Cidade de Rio das Ostras FPSO unit was written down to its estimated fair value, using a discounted cash flow valuation, as a result of a change in the operating plans for the unit resulting from receiving confirmation from the charterer in the third quarter of 2017 that it will not extend the charter contract beyond the expiration date of January 2018. The Partnership's consolidated statement of (loss) income for the three and nine months ended September 30, 2017 includes a $52.0 million write-down related to this unit. The write-down is included in the Partnership's FPSO segment. During the three and nine months ended September 30, 2017, the carrying value of the HiLoad DP unit was written down to its estimated fair value, using a discounted cash flow valuation, as a result of a change in expectations for the future employment opportunities for the unit and the unit proceeding into cold lay-up. The Partnership's consolidated statement of (loss) income for the three and nine months ended September 30, 2017 includes a $26.3 million write-down related to this unit. The write-down is included in the Partnership's shuttle tanker segment. During the three and nine months ended September 30, 2017, the carrying value of the Navion Brasilia and Nordic Rio shuttle tankers were written down to their estimated fair values, using appraised values, as a result of a change in the operating plans for these vessels, due to the redelivery of these vessels from their charterer after completing their bareboat charter contracts in July 2017 and a resulting change in expectations for the future opportunities for the vessels. The Partnership's consolidated statement of (loss) income for the three and nine months ended September 30, 2017 includes a $20.1 million write-down related to these vessels, of which $10.8 million is included in a 50%-owned subsidiary of the Partnership. The write-down is included in the Partnership's shuttle tanker segment. During the three and nine months ended September 30, 2017, the carrying value of the Navion Marita shuttle tanker was written down to its estimated fair value, using an appraised value, as a result of the expected sale of the vessel and the vessel was classified as held for sale on the Partnership's consolidated balance sheet as at September 30, 2017. The Partnership's consolidated statement of (loss) income for the three and nine months ended September 30, 2017 includes a $5.1 million write-down related to this vessel. The write-down is included in the Partnership's shuttle tanker segment. During the nine months ended September 30, 2016, the Partnership canceled the UMS construction contracts for its two UMS newbuildings. As a result, the carrying values of these two UMS newbuildings were written down to $nil. The Partnership's consolidated statement of loss for the nine months ended September 30, 2016 includes a $43.7 million write-down related to these two UMS newbuildings (see notes 3 and 9c). The write-down is included in the Partnership’s UMS segment. |
Subsequent events |
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Sep. 30, 2017 | |||||||||||||
Subsequent Events [Abstract] | |||||||||||||
Subsequent events | Subsequent events
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Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (or GAAP). These financial statements include the accounts of Teekay Offshore Partners L.P., which is a limited partnership organized under the laws of the Republic of The Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Partnership). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements for the year ended December 31, 2016, which are included in the Partnership’s Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission (or SEC) on April 12, 2017. In the opinion of management of the Partnership’s general partner, Teekay Offshore GP L.L.C. (or the general partner), these interim unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly, in all material respects, the Partnership’s consolidated financial position, results of operations, changes in total equity and cash flows for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of those for a full fiscal year. Historically, the utilization of shuttle tankers in the North Sea is higher in the winter months as favorable weather conditions in the summer months provide opportunities for repairs and maintenance to the Partnership’s vessels and the offshore oil platforms. Downtime for repairs and maintenance generally reduces oil production and, thus, transportation requirements. Intercompany balances and transactions have been eliminated upon consolidation. |
Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (or ASU 2014-09). ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for the Partnership January 1, 2018 and will be applied as a cumulative-effect adjustment as of this date. The Partnership expects that the adoption of ASU 2014-09 will result in a change in the method of recognizing revenue from contracts of affreightments (or CoAs) whereby revenue will be recognized over the voyage until discharge is complete, instead of over the voyage until tendering notice for the next voyage. This will result in all revenue being fully recognized upon discharge of cargo whereas currently revenue recognition extends into the period the vessel returns to the oil field. This change may result in revenue being recognized earlier which may cause additional volatility in revenue and earnings between periods. In addition, the Partnership expects that the adoption of ASU 2014-09 will result in a change in the method of recognizing revenue for voyage charters, whereby the Partnership’s method of determining proportional performance will change from discharge-to-discharge to load-to-discharge. This will result in no revenue being recognized from discharge of the prior voyage to loading of the current voyage and all revenue being recognized from loading of the current voyage to discharge of the current voyage. This change will result in revenue being recognized later in the voyage which may cause additional volatility in revenue and earnings between periods. The Partnership is in the final stages of completing its assessment of ASU 2014-09, and is focused on developing process changes, determining the transitional impact and completing other items required for the adoption of ASU 2014-09. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (or ASU 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Partnership expects to adopt ASU 2016-02 effective January 1, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Partnership expects that the adoption of ASU 2016-02 will result in a change in accounting method for the lease portion of the daily charter hire for the Partnership's chartered-in vessels accounted for as operating leases with firm periods of greater than one year. Under ASU 2016-02, the Partnership will recognize a right-of-use asset and a lease liability on the balance sheet for these charters, whereas currently no right-of-use asset or lease liability is recognized. This will have the result of increasing the Partnership’s assets and liabilities. Based on the lease agreements the Partnership has entered into on or prior to September 30, 2017, the expected increase to the Partnership's assets and liabilities is not expected to be material. The pattern of expense recognition of chartered-in vessels is expected to remain substantially unchanged, unless the right of use asset becomes impaired. The Partnership is in the final stages of completing its assessment of ASU 2016-02, and is focused on developing process changes, determining the transitional impact and completing other items required for the adoption of ASU 2016-02. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (or ASU 2016-09). ASU 2016-09 simplifies aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. ASU 2016-09 became effective for the Partnership January 1, 2017. The impact of adopting this new accounting guidance is a change in the Partnership's presentation of cash payments for tax withholdings on share settled equity awards from an operating cash outflow to a financing cash outflow on the Partnership's statements of cash flows. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (or ASU 2016-13). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for the Partnership January 1, 2020, with a modified-retrospective approach. The Partnership is currently evaluating the effect of adopting this new guidance. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (or ASU 2016-15), which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity method investees in the statements of cash flows. ASU 2016-15 is effective for the Partnership January 1, 2018, with a retrospective approach. The Partnership is currently evaluating the effect of adopting this new guidance. In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash (or ASU 2016-18). ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 is effective for the Partnership January 1, 2018. Adoption of ASU 2016-18 will result in the Partnership’s statements of cash flows being modified to include changes in restricted cash in addition to changes in cash and cash equivalents. In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities (or ASU 2017-12). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 will be effective for the Partnership January 1, 2019. The Partnership is currently evaluating the effect of adopting this new guidance. |
Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Value of Financial Instruments Measured at Fair Value on Recurring Basis | The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Partnership’s financial instruments that are not accounted for at fair value on a recurring basis.
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Changes in Fair Value for Partnership's Contingent Consideration Liability Measured Recurring Basis Using Significant Unobservable Inputs (Level 3) | Changes in the estimated fair value of the Partnership’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the three and nine months ended September 30, 2017 and September 30, 2016 are as follows:
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Summary of Partnership's Financing Receivables | The following table contains a summary of the Partnership’s financing receivables by type of borrower and the method by which the Partnership monitors the credit quality of its financing receivables on a quarterly basis:
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Results as Presented in Consolidated Financial Statements | The following tables include results for the Partnership’s floating production storage and offloading (or FPSO) unit segment; shuttle tanker segment; floating storage and off-take (or FSO) unit segment; UMS segment; towage segment; and conventional tanker segment for the periods presented in these consolidated financial statements.
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Reconciliation of Total Segment Assets to Total Assets Presented in Accompanying Consolidated Balance Sheets | A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
|
Long-Term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt |
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Related Party Transactions and Balances (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues (Expenses) from Related Party Transactions | The Partnership's related party transactions were as follows for the periods indicated:
_______________
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Derivative Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Forward Contracts | As at September 30, 2017, the Partnership was committed to the following foreign currency forward contracts:
(1)Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy. |
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Schedule of Cross Currency Contracts Statement of Financial Position | As at September 30, 2017, the Partnership was committed to the following cross currency swaps:
(1) Notional amount reduces equally with NOK bond repayments (see note 5). (2) These swaps were partially settled during the three months ended September 30, 2017. The remaining amounts of the swaps were settled in October 2017 (see note 15).
(4) Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 6.8 million for $1.2 million (see note 5). |
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Interest Rate Swap Agreements | As at September 30, 2017, the Partnership was committed to the following interest rate swap agreements:
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Derivative Instruments, Gain (Loss) | The following tables exclude any interest rate swap agreements designated and qualifying as cash flow hedges in the Partnership’s equity accounted joint ventures.
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Location and Fair Value Amounts of Assets (Liabilities) of Partnership's Derivative Instruments | The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Partnership’s balance sheets.
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Effect of Losses on Derivatives | The effect of the (loss) gain on these derivatives in the consolidated statements of (loss) income for the three and nine months ended September 30, 2017 and 2016 is as follows:
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Effect of Gain on Cross Currency Swaps on Consolidated Statements of Income (Loss) | The effect of the gain on cross currency swaps in the consolidated statements of (loss) income for the three and nine months ended September 30, 2017 and 2016 is as follows:
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Income Tax (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Provision for Income Tax | The components of the provision for income tax are as follows:
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Total Capital and Net (Loss) Income Per Common Unit (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partners' Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net (Loss) Income Per Common Unit | Net (Loss) Income Per Common Unit
|
Basis of Presentation (Details) - USD ($) shares in Millions |
1 Months Ended | ||
---|---|---|---|
Sep. 25, 2017 |
Sep. 30, 2017 |
Jul. 01, 2016 |
|
Subordinated Promissory Notes | |||
Business Acquisition [Line Items] | |||
Number of warrants to be issued (in shares) | 11.4 | ||
Debt instrument, principal amount | $ 200,000,000.0 | ||
Aggregate proceeds from the debt purchase | $ 140,000,000 | ||
Brookfield | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price, cash | $ 610,000,000 | $ 610,000,000 | |
Number of shares to be issued/exchanged | 244.0 | 244.0 | |
Number of warrants to be issued (in shares) | 62.4 | 62.4 | |
Teekay Corporation | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price, cash | $ 30,000,000 | $ 30,000,000 | |
Number of shares to be issued/exchanged | 12.0 | 12.0 | |
Number of warrants to be issued (in shares) | 3.1 | 3.1 | |
Teekay Corporation | Subordinated Promissory Notes | |||
Business Acquisition [Line Items] | |||
Number of warrants to be issued (in shares) | 11.4 | ||
Aggregate proceeds from the debt purchase | $ 140,000,000 |
Financial Instruments - Changes in Fair Value for Partnership's Contingent Consideration Liability Measured Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Contingent Consideration - Logitel - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 0 | $ 0 | $ 0 | $ (14,830) |
Gain included in Other expense - net | 0 | 0 | 0 | 14,830 |
Balance at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Financial Instruments - Summary of Partnership's Financing Receivables (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Payment activity | Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Direct financing leases | $ 18,773 | $ 17,586 |
Long-Term Debt - Additional Information - Senior Bonds (Details) |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
May 31, 2014
USD ($)
|
Nov. 30, 2013
USD ($)
vessel
|
Sep. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Feb. 28, 2015
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Carrying amount of debt | $ 3,077,553,000 | $ 3,182,894,000 | |||
U.S. Dollar Bonds due through 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt issued | $ 300,000,000 | 300,000,000 | |||
Bonds | Senior Bonds due in June 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 30,000,000 | ||||
Carrying amount of debt | $ 22,000,000 | ||||
Fixed interest rate | 4.27% | ||||
Bonds | Ten Year Senior Secured Bonds | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 174,200,000 | ||||
Carrying amount of debt | $ 140,700,000 | ||||
Fixed interest rate | 4.96% | ||||
Debt instrument, term | 10 years | ||||
Number of vessels | vessel | 2 | ||||
Bonds | U.S. Dollar Bonds due through 2019 | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 6.00% | ||||
Debt instrument, term | 5 years |
Related Party Transactions and Balances - Revenues (Expenses) from Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Related Party Transactions [Abstract] | ||||
Revenues | $ 10,446 | $ 13,733 | $ 34,664 | $ 38,651 |
Vessel operating expenses | (8,108) | (8,889) | (23,741) | (26,951) |
General and administrative | (9,809) | (7,469) | (24,189) | (22,817) |
Interest expense | $ (6,946) | $ (6,927) | $ (20,840) | $ (15,409) |
Derivative Instruments and Hedging Activities - Foreign Currency Forward Contracts (Details) - Foreign currency forward contracts $ in Thousands |
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
NOK
|
Sep. 30, 2017
EUR (€)
|
---|---|---|---|
Derivative [Line Items] | |||
Fair Value / Carrying Amount of Asset (Liability) Non-hedge | $ 852 | ||
Expected Maturity, 2017 | 16,376 | ||
Expected Maturity, 2018 | 7,829 | ||
Norwegian Kroner | |||
Derivative [Line Items] | |||
Contract Amount in Foreign Currency | NOK | NOK 165,000,000 | ||
Fair Value / Carrying Amount of Asset (Liability) Non-hedge | $ 532 | ||
Average Forward Rate | 8.20 | 8.20 | 8.20 |
Expected Maturity, 2017 | $ 12,289 | ||
Expected Maturity, 2018 | 7,829 | ||
Euro | |||
Derivative [Line Items] | |||
Contract Amount in Foreign Currency | € | € 3,750,000 | ||
Fair Value / Carrying Amount of Asset (Liability) Non-hedge | $ 320 | ||
Average Forward Rate | 0.92 | 0.92 | 0.92 |
Expected Maturity, 2017 | $ 4,087 |
Derivative Instruments and Hedging Activities - Effective Portion of Gains (Losses) on Interest Rate Swap Agreements (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative [Line Items] | ||||
Effective Portion Recognized in AOCI | $ 0 | $ 640 | $ (460) | $ (3,870) |
Effective Portion Reclassified from AOCI | (424) | 0 | (1,186) | 0 |
Ineffective Portion | 0 | 126 | (7) | 984 |
Interest expense | ||||
Derivative [Line Items] | ||||
Effective Portion Recognized in AOCI | 0 | 640 | (460) | (3,870) |
Effective Portion Reclassified from AOCI | (424) | 0 | (1,186) | 0 |
Ineffective Portion | $ 0 | $ 126 | $ (7) | $ 984 |
Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Aggregate fair value asset | $ 0.9 | $ 0.1 |
Aggregate fair value liability | 204.0 | 216.7 |
Restricted cash | $ 3.2 | $ 30.2 |
Derivative Instruments and Hedging Activities - Effect of Gain on Cross Currency Swaps on Consolidated Statements of Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total realized and unrealized gain on cross currency swaps | $ (19,232) | $ 20,247 | $ (47,561) | $ (102,280) |
Foreign Exchange and Other Derivative Financial Instruments | Cross currency swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Realized loss | (42,987) | (3,330) | (49,501) | (41,276) |
Unrealized gain | 54,488 | 19,803 | 66,978 | 58,276 |
Total realized and unrealized gain on cross currency swaps | $ 11,501 | $ 16,473 | $ 17,477 | $ 17,000 |
Income Tax (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Current | $ (377) | $ (2,180) | $ (1,412) | $ (3,342) |
Deferred | (1,915) | 577 | (2,677) | 6,013 |
Income tax (expense) recovery | $ (2,292) | $ (1,603) | $ (4,089) | $ 2,671 |
Commitments and Contingencies - Additional Information - Odebrecht (Details) - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Oct. 31, 2014 |
Sep. 30, 2017 |
Dec. 31, 2015 |
|
Odebrecht Oil And Gas Sa | |||
Loss Contingencies [Line Items] | |||
Percentage of interest in joint venture arrangement | 50.00% | ||
Odebrecht Oil And Gas Sa | |||
Loss Contingencies [Line Items] | |||
Percentage of interest in joint venture arrangement | 50.00% | ||
Operating lease arrangement period, lessor | 12 years | ||
Estimated cost of project | $ 1,000.0 | ||
Payments made towards the commitment | $ 908.8 | ||
Payments due in the remainder of 2017 | 95.9 | ||
Secured long-term debt financing | $ 804.0 | ||
Undrawn borrowings | $ 87.1 |
Commitments and Contingencies - Additional Information - Petrojarl I (Details) - USD ($) $ in Thousands |
1 Months Ended | ||
---|---|---|---|
Dec. 31, 2014 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Loss Contingencies [Line Items] | |||
Aggregate principal amount | $ 3,122,901 | $ 3,237,703 | |
Escrow deposit | 27,470 | 92,265 | |
Petrojarl I FPSO Unit | |||
Loss Contingencies [Line Items] | |||
Estimated cost of project | $ 489,000 | ||
Operating lease arrangement period, lessor | 5 years | ||
Payments made towards the commitment | 385,300 | ||
Payments due in the remainder of 2017 | 97,300 | ||
Payments due in the year 2018 | 6,000 | ||
Escrow deposit | 24,300 | $ 60,000 | |
Petrojarl I FPSO Unit | Long-term Debt | |||
Loss Contingencies [Line Items] | |||
Aggregate principal amount | $ 171,200 | ||
Petrojarl I FPSO Unit | |||
Loss Contingencies [Line Items] | |||
Business acquisition, purchase price | $ 57,000 |
Commitments and Contingencies - Additional Information - Petrobras (Detailss) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Loss Contingencies [Line Items] | |||
Loss contingency accrual | $ 50.5 | ||
Petrobras | |||
Loss Contingencies [Line Items] | |||
Loss contingency accrual | $ 5.4 | ||
Petrobras | FPSO Segment | |||
Loss Contingencies [Line Items] | |||
Percentage of rate reduction claim | 2.00% | ||
Estimated claim | $ 10.9 | ||
Loss contingency accrual | $ 9.8 | ||
Range of possible losses in addition to what has already been accrued | $ 1.1 |
Commitments and Contingencies - Additional Information - Royal Dutch Shell (Details) - Shell $ in Millions |
1 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Loss Contingencies [Line Items] | |
Estimated claim | $ 23.6 |
Percentage of rate reduction claim | 20.00% |
Commitments and Contingencies - Additional Information - Transocean (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
Feb. 28, 2017
vessel
|
---|---|---|
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 50.5 | |
Claim from Transocean arising from Towage of Transocean Winner Oil Rig | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | 1.8 | |
Estimated insurance recovery | $ 1.7 | |
Towage Vessels | ||
Loss Contingencies [Line Items] | ||
Number of vessels | vessel | 1 |
Commitments and Contingencies - Additional Information - Samsung (Details) $ in Millions |
Sep. 30, 2017
USD ($)
|
Jul. 31, 2017
USD ($)
vessel
newbuilding
|
---|---|---|
Loss Contingencies [Line Items] | ||
Number of newbuildings | newbuilding | 2 | |
Samsung Heavy Industries Co., Ltd. | ||
Loss Contingencies [Line Items] | ||
Number of newbuildings | newbuilding | 2 | |
Aggregate fully built-up cost for shipbuilding contracts | $ 294.0 | |
Number of additional vessels | vessel | 2 | |
Payments due in the remainder of 2017 | $ 14.1 | |
Payments due in the year 2018 | 52.5 | |
Payments due in the year 2019 | 136.3 | |
Payments due in the year 2020 | $ 91.0 |
Commitments and Contingencies - Additional Information - Presentation of Financial Statements (Details) $ in Thousands |
9 Months Ended | 15 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2018
USD ($)
|
Jul. 31, 2017
newbuilding
|
Dec. 31, 2016
USD ($)
|
|
Loss Contingencies [Line Items] | |||||
Net operating cash flow | $ 192,657 | $ 274,160 | |||
Working capital deficit | 539,000 | ||||
Current portion of long-term debt | 731,326 | $ 586,892 | |||
Escrow deposit | 27,470 | 92,265 | |||
Number of newbuildings | newbuilding | 2 | ||||
Petrojarl I FPSO Unit | |||||
Loss Contingencies [Line Items] | |||||
Escrow deposit | $ 24,300 | $ 60,000 | |||
Scenario, Forecast | |||||
Loss Contingencies [Line Items] | |||||
Anticipated payments for vessels under construction | $ 509,000 | ||||
Scenario, Forecast | Newbuildings | |||||
Loss Contingencies [Line Items] | |||||
Undrawn borrowings | $ 243,000 |
Total Capital and Net (Loss) Income Per Common Unit - Additional Information (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 25, 2017 |
|
General Partner | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of interest in joint venture | 51.00% | |
Brookfield | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of noncontrolling interest acquired | 59.50% | |
Brookfield | General Partner | ||
Limited Partners' Capital Account [Line Items] | ||
Percentage of noncontrolling interest acquired | 49.00% | |
Public | ||
Limited Partners' Capital Account [Line Items] | ||
Partner's interest (percent) | 26.70% |
Restructuring Charge (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring liabilities | $ 2.7 | $ 1.4 | $ 2.7 | $ 1.4 |
FPSO Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 0.8 | $ 2.3 | ||
Contract Termination | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2.9 | $ 3.3 |
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