Teekay Corporation (Teekay or the Company) (NYSE:TK) today
reported results for the quarter ended March 31, 2019. These
results include the Company’s two publicly-listed consolidated
subsidiaries Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP) and
Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) (collectively, the
Daughter Entities) and its equity-accounted investment in
publicly-listed Teekay Offshore Partners L.P. (Teekay Offshore)
(NYSE:TOO), which the Company sold in May 2019, and all
remaining subsidiaries and equity-accounted investments. Teekay,
together with its subsidiaries other than the Daughter Entities and
Teekay Offshore, is referred to in this release as Teekay
Parent. Please refer to the first quarter 2019 earnings
releases of Teekay LNG, Teekay Tankers and Teekay Offshore, which
are available on Teekay's website at www.teekay.com, for additional
information on their respective results.
Financial Summary
|
|
Three Months
Ended |
|
March
31, |
December
31, |
March
31, |
|
2019 |
2018 |
2018 |
(in thousands of U.S.
dollars, except per share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY CORPORATION
CONSOLIDATED |
|
|
GAAP FINANCIAL
COMPARISON |
|
|
|
Revenues |
481,213 |
|
491,532 |
|
394,022 |
|
Income from vessel
operations |
84,232 |
|
88,811 |
|
18,505 |
|
Equity (loss)
income |
(61,653 |
) |
19,356 |
|
27,117 |
|
Net loss
attributable to shareholders in Teekay |
(84,257 |
) |
(18,353 |
) |
(20,555 |
) |
Loss per share attributable to
shareholders of Teekay |
(0.84 |
) |
(0.18 |
) |
(0.21 |
) |
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
Total Adjusted EBITDA(1) |
236,960 |
|
246,675 |
|
168,364 |
|
Adjusted Net Loss attributable to
shareholders of Teekay(1) |
(12,955 |
) |
(2,014 |
) |
(18,324 |
) |
Adjusted Net Loss per share attributable
to shareholders of Teekay(1) |
(0.13 |
) |
(0.02 |
) |
(0.19 |
) |
TEEKAY PARENT |
|
|
|
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
Teekay Parent
Adjusted EBITDA(1) |
(1,802 |
) |
3,081 |
|
13,222 |
|
Total Teekay
Parent Free Cash Flow(1) |
(13,763 |
) |
(11,000 |
) |
(3,212 |
) |
(1) These are non-GAAP
financial measures. Please refer to “Definitions and Non-GAAP
Financial Measures” and the Appendices to this release for
definitions of these terms and reconciliations of these non-GAAP
financial measures as used in this release to the most directly
comparable financial measures under United States generally
accepted accounting principles (GAAP).
In the first quarter of 2019, the Company made
certain changes to its non-GAAP financial measures to more closely
align with internal management reporting and annual reporting filed
with the U.S. Securities and Exchange Commission (SEC) under Form
20-F. Cash Flow from Vessel Operations (CFVO) and CFVO of
Equity-Accounted for Investments are replaced with Total Adjusted
EBITDA and Adjusted EBITDA from Equity-Accounted Vessels,
respectively. Please refer to "Definitions and Non-GAAP Financial
Measures" in this release for definitions of these non-GAAP
financial measures and information about the changes made.
CEO Commentary
“In the first quarter of 2019, our total
adjusted EBITDA increased by approximately $70 million, or over 40
percent, from the same period of the prior year, primarily driven
by the contract start-up of various growth projects across the
Teekay Group, certain LNG vessels commencing new contracts at
higher rates and higher spot tanker rates,” commented Kenneth Hvid,
Teekay’s President and Chief Executive Officer. “Our consolidated
and Teekay Parent results in the first quarter of 2019 were
negatively impacted by lower revenues from Teekay Parent’s
directly-owned FPSO units as a result of some unplanned
maintenance, lower production and the adoption of the new lease
accounting standard, which reduced revenues by approximately $8
million in the first quarter of 2019.”
Mr. Hvid continued, “The divestment of our
remaining interests in Teekay Offshore was an important milestone
in our evolution and is aligned with Teekay’s strategy to simplify
and focus on our core gas and tanker businesses. The net proceeds
from the divestment allowed us to further delever Teekay Parent’s
balance sheet, while also enabling us to reduce the size of the new
bond offering to $250 million and shorten the tenor to 3.5 years,
which provides a more flexible and lower cost structure to better
suit our delevering strategy. Since the beginning of 2018, we have
reduced Teekay Parent’s gross debt by over $260 million, or 40
percent, which is expected to reduce Teekay Parent’s interest
expense and increase its free cash flow.”
“With the completion of our 2020 bond
refinancing, the near completion of all our LNG growth projects,
and the anticipated improving tanker and gas shipping market
fundamentals, we believe that we have reached a positive turning
point and are now positioned to create greater long-term
value.”
“Despite the near-term weakness in the spot LNG
carrier market, we continued to take advantage of the improving
market fundamentals through Teekay LNG by securing one to
three-year charters on multiple LNG carriers at attractive rates.
Teekay LNG continues to report cash flow growth mainly driven by
recent LNG carrier newbuilding deliveries and the start-up of
various LNG carrier charter contracts at higher rates. In addition,
as expected, Teekay LNG increased its quarterly cash distributions
by 36 percent for the first quarter, which is part of its balanced
capital allocation strategy that allows Teekay LNG to return
additional capital to unitholders while also continue to delever
its balance sheet.”
“Teekay Tankers benefitted from another quarter
of strong tanker rates, which has resulted in two consecutive
profitable quarters. However, spot tanker rates declined in the
latter half of the first quarter due to certain seasonal and
temporary factors. Looking ahead, we believe the tanker market
fundamentals continue to support a market recovery that would
increase both cash flows and asset values. With a stronger
liquidity position and significant operating leverage, we believe
that Teekay Tankers is well-positioned to benefit from a tanker
market recovery.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended March 31, 2019, compared to the same period of the
prior year, were positively impacted primarily by higher earnings
in Teekay LNG due to the delivery and contract start-up of several
newbuildings during the past year as well as higher revenues earned
from certain existing LNG carriers and multi-gas vessels and higher
earnings in Teekay Tankers primarily as a result of an increase in
spot tanker rates.
These increases were partially offset primarily
by lower revenues from Teekay Parent's three directly-owned
floating production, storage and offloading (FPSO) units in the
first quarter of 2019, compared to the same period of the prior
year, as a result of lower oil production and average oil prices,
an increase in unplanned maintenance days, and lower revenues
recognized in the first quarter of 2019 due to timing differences
resulting from the adoption of the new lease accounting standards
effective January 1, 2019.
In addition, GAAP net loss was negatively
impacted in the three months ended March 31, 2019, compared to the
same quarter of the prior year, by various items, including a
write-down of $64.9 million of Teekay Parent's investment in Teekay
Offshore, and an increase in unrealized losses on non-designated
derivative instruments, partially offset by a decrease in asset
impairments.
Teekay Parent
Total Teekay Parent Free Cash Flow(1) was
negative $13.8 million during the first quarter of 2019, compared
to negative $3.2 million for the same period of the prior year
primarily due to: lower revenues from the Banff and Hummingbird
Spirit FPSO units due to contractual production tariffs linked to
oil prices, which were lower in the first quarter of 2019 compared
to the same period in the prior year, lower revenues for the
Foinaven FPSO unit due to lower production in the first quarter of
2019 and, as a result of the adoption of the new lease accounting
standard in 2019, there was a deferral in 2019 of the recognition
of approximately $4 million of additional incentive revenue related
to the Foinaven FPSO and Banff FPSO units which would have been
recognized in the first quarter of 2019 under the accounting
standard in effect in 2018, and lower cash distributions from
Teekay Offshore as its distributions were reduced to zero in
January 2019. These decreases were partially offset by a 36
percent increase in Teekay LNG’s quarterly distribution in the
first quarter of 2019 and lower Teekay Parent interest expense due
to repurchase of a portion of its 8.5% 2020 bonds and repayments
made on two revolving credit facilities since the beginning of
2018. Please refer to Appendix D of this release for additional
information about Teekay Parent's Free Cash Flow.
(1) These are non-GAAP financial
measures. Please refer to “Definitions and Non-GAAP Financial
Measures” and the Appendices to this release for definitions of
these terms and reconciliations of these non-GAAP financial
measures as used in this release to the most directly comparable
financial measures under United States GAAP.
Summary Results of Daughter
Entities
Teekay LNG
Teekay LNG’s net income and total adjusted
EBITDA for the three months ended March 31, 2019, compared to the
same quarter of the prior year, were positively impacted primarily
by: the deliveries of six wholly-owned LNG carrier newbuildings
(the Magdala, Myrina, Megara, Bahrain Spirit, Sean Spirit and Yamal
Spirit) between February 2018 and January 2019; higher earnings
from the Torben Spirit due to an increased charter rate from a new
three-year charter contract which commenced in December 2018;
higher earnings from Teekay LNG's seven multi-gas carriers which
earned higher spot revenues during the first quarter of 2019;
earnings from the Magellan Spirit which has been employed on a
charter-out basis since October 2018 to March 2019; and the
deliveries of three LNG carrier newbuildings between January 2018
and January 2019 and the delivery of the second ARC7 LNG carrier
newbuilding in September 2018 in two of Teekay LNG's joint
ventures, with Teekay LNG’s ownership interest in these vessels
ranging from 20 to 30 percent, and 50 percent, respectively. These
increases were partially offset by an increase in off-hire days in
the first quarter of 2019 for certain of Teekay LNG's vessels due
to repairs and a scheduled dry docking.
In addition, GAAP net income was negatively
impacted by unrealized losses of $4.4 million on non-designated
derivative instruments in Teekay LNG’s equity-accounted investments
in the first quarter of 2019 compared to gains on designated and
non-designated derivative instruments of $11.5 million in the first
quarter of 2018, and due to a gain of $5.6 million recognized on
the sale of Teekay LNG's 50 percent-owned joint venture with Exmar
NV (the Excelsior Joint Venture) during the first quarter of 2018.
These decreases were partially offset by write-downs of $18.7
million for the Alexander Spirit, European Spirit and African
Spirit conventional tankers to their estimated fair values recorded
during the first quarter of 2018.
Please refer to Teekay LNG's first quarter 2019
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' net income and total adjusted
EBITDA for the three months ended March 31, 2019 increased in
comparison to the same period of the prior year, primarily due to
higher average spot tanker rates and lower general and
administrative expenses.
In addition, GAAP net income was negatively
impacted by unrealized losses of $1.8 million on non-designated
derivative instruments in the first quarter of 2019 compared to
gains on non-designated derivative instruments of $3.0 million in
the first quarter of 2018.
Please refer to Teekay Tankers' first quarter
2019 earnings release for additional information on the financial
results for this entity.
Summary of Recent Events
Teekay Parent
In late April 2019, Teekay Parent agreed to sell
to Brookfield Business Partners L.P., together with its
institutional partners (collectively Brookfield), all of the
Company’s remaining interests in Teekay Offshore, which includes
the Company’s 49% general partner interest, common units, warrants,
and an outstanding $25 million loan from the Company to Teekay
Offshore, for total cash proceeds of $100 million. The transaction
closed on May 8, 2019.
In May 2019, Teekay Parent completed a private
offering for $250 million in aggregate principal amount of 9.25%
senior secured notes due November 2022 (the Notes). The Notes are
guaranteed on a senior secured basis by certain of Teekay’s
subsidiaries and will initially be secured by first-priority liens
on two of Teekay Parent's FPSO units, the Petrojarl Banff and
Hummingbird Spirit, a pledge of the equity interests of the Teekay
subsidiary that owns all of Teekay’s common units of Teekay LNG and
all of Teekay’s Class A common shares of Teekay Tankers and a
pledge of the equity interests in the Teekay subsidiaries that own
its three FPSO units. In addition, Teekay Parent completed the
settlement of its cash tender offer to purchase its outstanding
8.5% senior notes due 2020 (2020 Notes), repurchasing $460.9
million of the $497.7 million aggregate principal amount
outstanding prior to the tender offer. Of the $460.9 million of
repurchases of the 2020 Notes, $458.0 million was repurchased for
total consideration of $1,032.50 per $1,000 of principal amount and
$2.9 million was repurchased for total consideration of $982.50 per
$1,000 of principal amount.
Teekay LNG
In April 2019, Teekay LNG secured a three-year
fixed-rate charter contract for the Magellan Spirit LNG carrier,
which is expected to commence at the end of May 2019, and
concurrently extended the current charter-in contract from the
Teekay LNG-Marubeni Joint Venture to cover the same three-year
period.
In May 2019, Teekay LNG extended its fixed-rate
charter contract of the Polar Spirit LNG carrier for three
additional years at a charter rate in excess of the previous
fixed-rate. The charter extension commenced on May 7, 2019.
In addition, in May 2019, Teekay LNG secured
one-year fixed-rate charter contracts on both the Arwa Spirit and
Marib Spirit LNG carriers, which are expected to commence mid-June
and early-July 2019, respectively, both of which are owned by the
Teekay LNG-Marubeni Joint Venture.
In February 2019, Teekay LNG entered into
a commercial management agreement with Lauritzen Kosan A/S
(Manager), a third-party commercial manager, pursuant to which the
Manager will commercially manage Teekay LNG's seven multi-gas
vessels. In May 2019, Teekay LNG completed the transition of the
commercial management of all seven multi-gas vessels to the
Manager.
Teekay Tankers
In January 2019, Teekay Tankers entered into a
time charter-out contract for one Suezmax tanker for a firm period
of six months at a daily rate of $27,500.
In April 2019, Teekay Tankers entered into a
time charter-in contract for an Aframax vessel for a firm period of
two years, plus an extension option, which is expected to commence
by July 2019 at a daily rate of $21,000.
Teekay Tankers' current dividend policy is to
pay out 30 to 50 percent of its quarterly adjusted net income,
subject to reserves the Board of Directors may determine are
necessary for the prudent operation of the company. Given the
losses generated during the first three quarters of 2018, and the
additional debt incurred from recent financing transactions to
improve its liquidity position as well as the current tanker market
weakness, Teekay Tankers has elected to reserve the amount that
would have otherwise been paid out as a dividend for the first
quarter of 2019 to reduce outstanding debt.
Liquidity
As at March 31, 2019, Teekay Parent had
total liquidity of approximately $355.9 million (consisting of
$213.1 million of cash and cash equivalents and $142.8 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity of approximately $795.6
million (consisting of $410.7 million of cash and cash equivalents
and $384.9 million of undrawn revolving credit facilities).
Conference Call
The Company plans to host a conference call on
Thursday, May 23, 2019 at 2:00 p.m. (ET) to discuss its
results for the first quarter of 2019. All shareholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (800)-667-5617 or (647) 490-5367, if outside North
America, and quoting conference ID code 6079686.
- By accessing the webcast, which will be available on Teekay’s
website at www.teekay.com (the archive will remain on the website
for a period of one year).
An accompanying First Quarter 2019 Earnings
Presentation will also be available at www.teekay.com in advance of
the conference call start time.
About Teekay
Teekay is a leading provider of international
crude oil and gas marine transportation services and also provides
offshore production and logistics. Teekay provides these services
primarily through its directly-owned fleet and its controlling
ownership interests in Teekay LNG Partners L.P. (NYSE:TGP), the
world’s third largest independent owner and operator of LNG
carriers, and Teekay Tankers Ltd. (NYSE:TNK), one of the world’s
largest owners and operators of mid-sized crude tankers. The
consolidated Teekay entities manage and operate total assets under
management of approximately $11 billion, comprised of approximately
155 liquefied gas, offshore, and conventional tanker assets. With
offices in 12 countries and approximately 5,600 seagoing and
shore-based employees, Teekay provides a comprehensive set of
marine services to the world’s leading oil and gas companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries contact:Ryan
HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the SEC. These non-GAAP financial measures, which include, Adjusted
Net Loss Attributable to Shareholders of Teekay, Teekay Parent GPCO
Free Cash Flow, Teekay Parent Free Cash Flow, Net Interest Expense
and Adjusted Equity Income, and commencing in the first quarter of
2019, Adjusted EBITDA, are intended to provide additional
information and should not be considered a substitute for measures
of performance prepared in accordance with GAAP. In addition, these
measures do not have standardized meanings across companies, and
therefore may not be comparable to similar measures presented by
other companies. The Company believes that certain investors use
this information to evaluate the Company’s financial performance,
as does management.
In prior periods, the Company reported Cash Flow
from Vessel Operations (CFVO), as a non-GAAP measure. In the first
quarter of 2019, the Company made certain changes to its non-GAAP
financial measures to more closely align with internal management
reporting, annual reporting with the SEC under Form 20-F and
metrics used by certain investors. CFVO from Consolidated Vessels
and Total CFVO are replaced with Consolidated Adjusted EBITDA and
Total Adjusted EBITDA, respectively, for current and comparative
periods.
Non-GAAP Financial Measures
Adjusted EBITDA represents net income (loss)
before interest, taxes, depreciation and amortization, foreign
exchange gain (loss), items included in other (loss) income,
write-down and (loss) gain on sale of vessels, equipment and other
operating assets, amortization of in-process revenue contracts,
adjustments for direct financing leases to a cash basis, unrealized
gains (loss) on derivative instruments, realized losses on interest
rate swaps, realized losses on interest rate swap amendments and
terminations, loss on deconsolidation of Teekay Offshore,
writedowns related to equity-accounted investments, and our share
of the above items in non-consolidated joint ventures which are
accounted for using the equity method of accounting. Consolidated
Adjusted EBITDA represents Adjusted EBITDA from vessels that are
consolidated on the Company's financial statements. Adjusted
EBITDA from Equity-Accounted Vessels represents the Company's
proportionate share of Adjusted EBITDA from its equity-accounted
vessels. The Company does not have the unilateral ability to
determine whether the cash generated by its equity-accounted
vessels is retained within the entity in which the Company holds
the equity-accounted investments or distributed to the Company and
other owners. In addition, the Company does not control the timing
of any such distributions to the Company and other owners. Adjusted
EBITDA is a non-GAAP financial measure used by certain investors
and management to measure the operational performance of companies.
Please refer to Appendices C and E of this release for
reconciliations of Adjusted EBITDA to net income (loss) and equity
(loss) income, respectively, which are the most directly comparable
GAAP measures reflected in the Company’s consolidated financial
statements.
Adjusted Net Loss Attributable to Shareholders
of Teekay excludes items of income or loss from GAAP net loss that
are typically excluded by securities analysts in their published
estimates of the Company’s financial results. The Company believes
that certain investors use this information to evaluate the
Company’s financial performance, as does management. Please refer
to Appendix A of this release for a reconciliation of this non-GAAP
financial measure to net loss, and refer to footnote (3) of the
statements of loss for a reconciliation of adjusted equity income
to equity (loss) income, the most directly comparable GAAP measure
reflected in the Company’s consolidated financial statements.
Teekay Parent Financial
Measures
Teekay Parent Adjusted EBITDA represents the sum
of (a) distributions or dividends (including payments-in-kind)
relating to a given quarter (but received by Teekay Parent in the
following quarter) as a result of ownership interests in its
consolidated publicly-traded subsidiaries (Teekay LNG and Teekay
Tankers) and its equity-accounted investment in Teekay Offshore,
net of Teekay Parent’s corporate general and administrative
expenditures for the given quarter and (b) Adjusted EBITDA
attributed to Teekay Parent’s directly-owned and chartered-in
assets. Teekay Parent Free Cash Flow represents Teekay Parent
Adjusted EBITDA, less Teekay Parent’s net interest expense and
dry-dock expenditures for the given quarter. Net Interest Expense
includes interest expense, interest income and realized losses on
interest rate swaps. Please refer to Appendices B, C, D and E of
this release for further details and reconciliations of these
non-GAAP financial measures to the most directly comparable GAAP
measures reflected in the Company’s consolidated financial
statements.
Teekay CorporationSummary Consolidated Statements of Loss(in
thousands of U.S. dollars, except share and per share data)
|
|
|
|
|
|
Three Months Ended |
|
|
March
31, 2019 (unaudited) |
|
December 31,
2018 (unaudited) |
|
March
31, 2018 (unaudited) |
|
|
|
|
|
|
|
|
Revenues |
481,213 |
|
491,532 |
|
394,022 |
|
|
|
|
|
Voyage expenses |
(103,123 |
) |
(117,199 |
) |
(85,877 |
) |
Vessel operating expenses |
(156,992 |
) |
(162,268 |
) |
(157,935 |
) |
Time-charter hire expense |
(29,838 |
) |
(25,434 |
) |
(19,411 |
) |
Depreciation and
amortization |
(72,107 |
) |
(71,069 |
) |
(67,311 |
) |
General and administrative
expenses |
(22,972 |
) |
(26,751 |
) |
(24,183 |
) |
Asset impairments |
(3,328 |
) |
— |
|
(18,662 |
) |
Restructuring charges (1) |
(8,621 |
) |
— |
|
(2,138 |
) |
Income from vessel operations |
84,232 |
|
88,811 |
|
18,505 |
|
|
|
|
|
Interest expense |
(73,671 |
) |
(72,632 |
) |
(54,625 |
) |
Interest income |
2,689 |
|
2,650 |
|
1,677 |
|
Realized and unrealized (loss)
gain on |
|
|
|
non-designated
derivative instruments(2) |
(5,423 |
) |
(32,833 |
) |
9,426 |
|
Equity (loss) income (3) |
(61,653 |
) |
19,356 |
|
27,117 |
|
Income tax expense |
(5,036 |
) |
(6,727 |
) |
(4,117 |
) |
Foreign exchange (loss)
gain |
(2,630 |
) |
(5,764 |
) |
22 |
|
Loss on deconsolidation of
Teekay Offshore |
— |
|
— |
|
(7,070 |
) |
Other
income (loss) – net |
28 |
|
782 |
|
(915 |
) |
Net loss |
(61,464 |
) |
(6,357 |
) |
(9,980 |
) |
Net income attributable
to |
|
|
|
non-controlling
interests |
(22,793 |
) |
(11,996 |
) |
(10,575 |
) |
Net loss attributable to the shareholders of |
|
|
|
Teekay Corporation |
(84,257 |
) |
(18,353 |
) |
(20,555 |
) |
Loss per common share of
Teekay Corporation |
|
|
|
- Basic and Diluted |
$ |
(0.84 |
) |
$ |
(0.18 |
) |
$ |
(0.21 |
) |
Weighted-average number of
common |
|
|
|
shares outstanding |
|
|
|
- Basic and
Diluted |
100,520,421 |
|
100,435,155 |
|
97,333,503 |
|
(1) Restructuring charges for the
three months ended March 31, 2019 included approximately $6.5
million related to severance costs resulting from the termination
of certain management services contracts in Teekay Parent, which
were fully recovered from the customer and such recovery is
included in Revenues. The remaining amount relates to
severance costs associated with the sale and termination of the
charter contract of the Toledo Spirit Suezmax tanker in Teekay
LNG.
(2) Realized and unrealized (losses)
gains related to derivative instruments that are not designated as
hedges for accounting purposes are included as a separate line item
in the consolidated statements of loss. The realized (losses) gains
relate to the amounts the Company actually paid to settle such
derivative instruments and the unrealized (losses) gains relate to
the change in fair value of such derivative instruments, as
detailed in the table below:
|
|
Three Months
Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Realized (losses)
gains relating to: |
|
|
|
|
Interest rate swap
agreements |
(1,688 |
) |
(2,354 |
) |
(4,809 |
) |
|
Forward
freight agreements |
(13 |
) |
274 |
|
— |
|
|
|
(1,701 |
) |
(2,080 |
) |
(4,809 |
) |
Unrealized
(losses) gains relating to: |
|
|
|
|
Interest rate swap
agreements |
(6,021 |
) |
(10,469 |
) |
15,919 |
|
|
Stock purchase warrants |
2,316 |
|
(20,202 |
) |
(1,684 |
) |
|
Forward
freight agreements |
(17 |
) |
(82 |
) |
— |
|
|
|
(3,722 |
) |
(30,753 |
) |
14,235 |
|
Total
realized and unrealized (losses) gains on derivative
instruments |
(5,423 |
) |
(32,833 |
) |
9,426 |
|
(3) The Company’s proportionate share of items
within equity (loss) income as identified in Appendix A of this
release is detailed in the table below. By excluding these items
from equity (loss) income as reflected in the consolidated
statements of loss, the Company believes the resulting adjusted
equity income is a normalized amount that can be used to evaluate
the financial performance of the Company’s equity-accounted
investments. Adjusted equity income is a non-GAAP financial
measure.
|
|
Three Months
Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Equity (loss)
income: |
(61,653 |
) |
19,356 |
|
27,117 |
|
Proportionate
share of unrealized losses (gains) on derivative instruments |
8,765 |
|
15,387 |
|
(19,477 |
) |
Write-down of
investment in Teekay Offshore(i) |
64,900 |
|
— |
|
— |
|
Other(ii) |
— |
|
(10,411 |
) |
1,532 |
|
Equity
income adjusted for items in Appendix A |
12,012 |
|
24,332 |
|
9,172 |
|
- The Company wrote-down its equity-accounted investment in
Teekay Offshore as a result of the sale of all of the Company's
remaining interests in Teekay Offshore to Brookfield in May 2019.
The Company expects to recognize a further loss on sale of
approximately $10 million, some of which will be presented in
realized and unrealized gains and losses on non-designated
derivatives, in the second quarter of 2019.
- Other for the three months ended December 31, 2018 includes the
Company's gain on the sale of its 43.5% stake in Magnora ASA
(or Magnora, previously Sevan Marine ASA) and the Company's
proportionate share of write-downs and gain on sale of vessels by
Teekay Offshore and a decrease in the deferred income tax asset for
Teekay Offshore's Norwegian tax structure. Other for the three
months ended March 31, 2018 includes the Company's proportionate
share of the gain (loss) on sale of vessels, equipment and other
operating assets in Teekay LNG's Exmar LPG joint venture, partially
offset by the impairment of two shuttle tankers in Teekay Offshore,
transaction fees relating to the historical amendment of certain
interest rate swaps in Teekay Offshore, depreciation expense as a
result of the change in the useful life and residual value
estimates of certain of Teekay Offshore's shuttle tankers, a
decrease in the deferred income tax asset for Teekay Offshore's
Norwegian tax structure and the write-down of loans receivable from
Gemini Tankers LLC.
Teekay CorporationSummary Consolidated Balance Sheets(in
thousands of U.S. dollars)
|
As at March 31, |
As at December 31, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
ASSETS |
|
Cash and cash
equivalents - Teekay Parent |
213,090 |
|
220,238 |
|
Cash and cash
equivalents - Teekay LNG |
122,589 |
|
149,014 |
|
Cash and cash
equivalents - Teekay Tankers |
75,045 |
|
54,917 |
|
Current portion of
loans to equity-accounted investments |
153,409 |
|
169,197 |
|
Other current
assets |
259,888 |
|
251,527 |
|
Restricted cash -
Teekay Parent |
2,040 |
|
2,030 |
|
Restricted cash -
Teekay LNG |
78,015 |
|
73,850 |
|
Restricted cash -
Teekay Tankers |
5,524 |
|
5,590 |
|
Vessels and
equipment - Teekay Parent |
292,653 |
|
304,049 |
|
Vessels and
equipment - Teekay LNG |
3,403,379 |
|
3,242,581 |
|
Vessels and
equipment - Teekay Tankers |
1,864,425 |
|
1,883,561 |
|
Operating lease
right-of-use assets (1) |
173,945 |
|
— |
|
Advances on
newbuilding contracts |
— |
|
86,942 |
|
Net investment in
direct financing leases |
571,796 |
|
575,163 |
|
Investments in and
loans to equity-accounted investments |
1,106,572 |
|
1,193,741 |
|
Other non-current
assets |
159,115 |
|
179,270 |
|
Total Assets |
8,481,485 |
|
8,391,670 |
|
LIABILITIES AND EQUITY |
|
|
Accounts payable
and accrued liabilities and other |
268,897 |
|
254,380 |
|
Advances from
affiliates |
64,406 |
|
75,292 |
|
Current portion of
long-term debt - Teekay Parent |
255,458 |
|
— |
|
Current portion of
long-term debt - Teekay LNG |
201,362 |
|
217,120 |
|
Current portion of
long-term debt - Teekay Tankers |
146,843 |
|
127,132 |
|
Long-term debt -
Teekay Parent |
349,637 |
|
614,341 |
|
Long-term debt -
Teekay LNG |
3,121,709 |
|
3,051,212 |
|
Long-term debt -
Teekay Tankers |
939,222 |
|
983,563 |
|
Derivative
liabilities |
75,244 |
|
68,557 |
|
Operating lease
liabilities (1) |
161,479 |
|
— |
|
Other long-term
liabilities |
141,138 |
|
133,045 |
|
Equity: |
|
|
Non-controlling
interests |
2,040,496 |
|
2,058,037 |
|
Shareholders of
Teekay |
715,594 |
|
808,991 |
|
Total Liabilities and Equity |
8,481,485 |
|
8,391,670 |
|
|
|
|
Net debt - Teekay
Parent(2) |
389,965 |
|
392,073 |
|
Net debt - Teekay
LNG(2) |
3,122,467 |
|
3,045,468 |
|
Net
debt - Teekay Tankers(2) |
1,005,496 |
|
1,050,188 |
|
(1) Upon adoption of the new
lease accounting standard on January 1, 2019, the Company's
long-term chartered-in vessels, with lease terms of more than one
year, are now treated as operating lease right-of-use assets and
operating lease liabilities. This resulted in an increase in the
Company’s assets and liabilities by $161.5 million at March 31,
2019.
(2) Net debt is a non-GAAP financial
measure and represents current and long-term debt less cash and
cash equivalents and, if applicable, restricted cash.
Teekay CorporationSummary Consolidated Statements of Cash
Flows(in thousands of U.S. dollars)
|
Three Months Ended |
|
March 31, |
|
2019 |
2018 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net income (loss) |
(61,464 |
) |
(9,980 |
) |
Non-cash and non-operating
items: |
|
|
Depreciation and
amortization |
72,107 |
|
67,311 |
|
Unrealized loss (gain) on
derivative instruments |
5,642 |
|
(37,309 |
) |
Asset impairments |
3,328 |
|
18,662 |
|
Loss on deconsolidation of
Teekay Offshore |
— |
|
7,070 |
|
Equity loss (income), net of
dividends received |
68,661 |
|
(26,369 |
) |
Income tax expense |
5,036 |
|
4,117 |
|
Foreign exchange loss and
other |
7,236 |
|
29,697 |
|
Direct financing lease
payments received |
3,025 |
|
— |
|
Change in operating assets and
liabilities |
16,295 |
|
(11,635 |
) |
Expenditures for dry
docking |
(14,712 |
) |
(8,454 |
) |
Net operating cash flow |
105,154 |
|
33,110 |
|
|
|
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance of
long-term debt, net of issuance costs |
138,082 |
|
263,920 |
|
Prepayments of long-term
debt |
(176,581 |
) |
(237,824 |
) |
Scheduled repayments of
long-term debt |
(54,877 |
) |
(64,501 |
) |
Proceeds from financing
related to sales-leaseback of vessels |
158,680 |
|
126,273 |
|
Repayments of obligations
related to finance leases |
(23,199 |
) |
(15,246 |
) |
Net proceeds from equity
issuances of Teekay Corporation |
— |
|
103,696 |
|
Repurchase of Teekay LNG
common units |
(9,497 |
) |
— |
|
Distributions paid from
subsidiaries to non-controlling interests |
(13,892 |
) |
(19,824 |
) |
Cash dividends paid |
(5,523 |
) |
(5,514 |
) |
Other financing
activities |
(24 |
) |
(524 |
) |
Net financing cash flow |
13,169 |
|
150,456 |
|
|
|
|
INVESTING
ACTIVITIES |
|
|
Expenditures for vessels and
equipment |
(124,540 |
) |
(168,287 |
) |
Proceeds from sale of
equity-accounted investments |
— |
|
54,438 |
|
Investment in equity-accounted
investments |
(2,864 |
) |
(19,604 |
) |
Cash of transferred
subsidiaries on sale, net of proceeds received |
— |
|
(25,254 |
) |
Other investing
activities |
(255 |
) |
2,358 |
|
Net investing cash flow |
(127,659 |
) |
(156,349 |
) |
|
|
|
(Decrease) increase in
cash, cash equivalents and restricted cash |
(9,336 |
) |
27,217 |
|
Cash, cash equivalents and
restricted cash, beginning of the period |
505,639 |
|
552,174 |
|
Cash, cash equivalents and restricted cash, end of the
period |
496,303 |
|
579,391 |
|
Teekay CorporationAppendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Loss(in thousands of U.S. dollars,
except per share data)
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
$
Per |
|
$
Per |
|
$
Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
Net loss –
GAAP basis |
(61,464 |
) |
|
(6,357 |
) |
|
(9,980 |
) |
|
Adjust for: Net
income attributable to |
|
|
|
|
|
|
non-controlling interests |
(22,793 |
) |
|
(11,996 |
) |
|
(10,575 |
) |
|
Net loss
attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(84,257 |
) |
(0.84 |
) |
(18,353 |
) |
(0.18 |
) |
(20,555 |
) |
(0.21 |
) |
(Subtract)
add specific items affecting net loss |
|
|
|
|
|
|
|
Unrealized losses (gains) from
derivative |
|
|
|
|
|
|
|
instruments(2) |
12,488 |
|
0.12 |
|
46,140 |
|
0.46 |
|
(34,452 |
) |
(0.35 |
) |
|
Foreign exchange loss
(gains)(3) |
1,196 |
|
0.01 |
|
4,526 |
|
0.04 |
|
(1,399 |
) |
(0.01 |
) |
|
Write-down and loss on sale of
vessels and other assets(4) |
68,228 |
|
0.68 |
|
3,697 |
|
0.04 |
|
16,839 |
|
0.18 |
|
|
Restructuring charges, net of
recoveries |
2,158 |
|
0.02 |
|
— |
|
— |
|
2,138 |
|
0.02 |
|
|
Loss on deconsolidation of
Teekay Offshore |
— |
|
— |
|
— |
|
— |
|
7,070 |
|
0.07 |
|
|
Other(5) |
1,998 |
|
0.02 |
|
(12,526 |
) |
(0.12 |
) |
5,650 |
|
0.05 |
|
|
Non-controlling interests’ share of items above(6) |
(14,766 |
) |
(0.15 |
) |
(25,498 |
) |
(0.26 |
) |
6,385 |
|
0.06 |
|
Total
adjustments |
71,302 |
|
0.71 |
|
16,339 |
|
0.16 |
|
2,231 |
|
0.02 |
|
Adjusted
net loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(12,955 |
) |
(0.13 |
) |
(2,014 |
) |
(0.02 |
) |
(18,324 |
) |
(0.19 |
) |
- Basic per share amounts.
- Reflects the unrealized losses (gains) relating to the change
in the mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes, including those
investments included in the Company's proportionate share of equity
income (loss) from joint ventures, and hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes.
- Foreign currency exchange gains primarily relate to the
Company’s debt denominated in Euros and Norwegian Kroner (NOK) and
unrealized losses on cross currency swaps used to economically
hedge the principal and interest on NOK bonds. Nearly all of the
Company’s foreign currency exchange gains and losses are
unrealized.
- For details on the write-down and loss on sale of vessels and
other assets for the three months ended March 31, 2019, refer to
footnote (3) of the summary consolidated statement of loss.
- Includes the loan extinguishment costs related to Teekay LNG's
refinancing of one of its debt facilities for the three months
ended March 31, 2019.
- Items affecting net loss include items from the Company’s
consolidated non-wholly-owned subsidiaries. The specific items
affecting net loss are analyzed to determine whether any of the
amounts originated from a consolidated non-wholly-owned subsidiary.
Each amount that originates from a consolidated non-wholly-owned
subsidiary is multiplied by the non-controlling interests’
percentage share in this subsidiary to determine the
non-controlling interests’ share of the amount. The amount
identified as “Non-controlling interests’ share of items above” in
the table above is the cumulative amount of the non-controlling
interests’ proportionate share of items listed in the table.
Teekay CorporationAppendix B - Supplemental Financial
InformationSummary Statement of Income (Loss) for the Three Months
Ended March 31, 2019(in thousands of U.S.
dollars)(unaudited)
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
Revenues |
149,744 |
|
232,501 |
|
100,097 |
|
(1,129 |
) |
481,213 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(5,775 |
) |
(97,339 |
) |
(9 |
) |
— |
|
(103,123 |
) |
Vessel operating
expenses |
(26,101 |
) |
(54,587 |
) |
(77,433 |
) |
1,129 |
|
(156,992 |
) |
Time-charter hire
expense |
(5,591 |
) |
(9,448 |
) |
(14,799 |
) |
— |
|
(29,838 |
) |
Depreciation and
amortization |
(34,126 |
) |
(29,865 |
) |
(8,116 |
) |
— |
|
(72,107 |
) |
General and
administrative expenses |
(6,632 |
) |
(9,165 |
) |
(7,175 |
) |
— |
|
(22,972 |
) |
Asset
impairments |
— |
|
— |
|
(3,328 |
) |
— |
|
(3,328 |
) |
Restructuring
charges |
(2,158 |
) |
— |
|
(6,463 |
) |
— |
|
(8,621 |
) |
|
|
|
|
|
|
|
Income
(loss) from vessel operations |
69,361 |
|
32,097 |
|
(17,226 |
) |
— |
|
84,232 |
|
|
|
|
|
|
|
Interest
expense |
(42,217 |
) |
(16,942 |
) |
(14,578 |
) |
66 |
|
(73,671 |
) |
Interest
income |
1,078 |
|
365 |
|
1,312 |
|
(66 |
) |
2,689 |
|
Realized and
unrealized (loss) gain on |
|
|
|
|
|
|
non-designated derivative
instruments |
(6,617 |
) |
(847 |
) |
2,041 |
|
— |
|
(5,423 |
) |
Equity income
(loss) |
5,578 |
|
753 |
|
(67,984 |
) |
— |
|
(61,653 |
) |
Equity in earnings
of subsidiaries(2) |
— |
|
— |
|
13,779 |
|
(13,779 |
) |
— |
|
Income tax
(expense) recovery |
(2,578 |
) |
(2,614 |
) |
156 |
|
— |
|
(5,036 |
) |
Foreign exchange
loss |
(731 |
) |
(412 |
) |
(1,487 |
) |
— |
|
(2,630 |
) |
Other
income (loss) – net |
251 |
|
47 |
|
(270 |
) |
— |
|
28 |
|
Net income
(loss) |
24,125 |
|
12,447 |
|
(84,257 |
) |
(13,779 |
) |
(61,464 |
) |
Net income
attributable to |
|
|
|
|
|
|
non-controlling interests(3) |
(2,508 |
) |
— |
|
— |
|
(20,285 |
) |
(22,793 |
) |
Net income
(loss) attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities |
21,617 |
|
12,447 |
|
(84,257 |
) |
(34,064 |
) |
(84,257 |
) |
- Consolidation Adjustments column includes adjustments which
eliminate transactions between Teekay LNG, Teekay Tankers and
Teekay Parent.
- Teekay Corporation’s proportionate share of the net earnings of
its publicly-traded subsidiaries.
- Net income attributable to non-controlling interests in the
Teekay LNG column represents the joint venture partners’ share of
the net income of its respective consolidated joint ventures. Net
income attributable to non-controlling interest in the
Consolidation Adjustments column represents the public’s share of
the net income of Teekay’s publicly-traded consolidated
subsidiaries.
Teekay CorporationAppendix C - Supplemental Financial
InformationTeekay Parent Summary Operating ResultsFor the Three
Months Ended March 31, 2019(in thousands of U.S.
dollars)(unaudited)
|
|
|
|
Teekay |
|
|
|
|
Parent |
|
FPSOs |
Other(1) |
GPCO |
Total |
|
|
|
|
|
Revenues |
49,438 |
|
50,659 |
|
— |
|
100,097 |
|
|
|
|
|
|
Voyage expenses |
(9 |
) |
— |
|
— |
|
(9 |
) |
Vessel operating expenses |
(36,925 |
) |
(40,508 |
) |
— |
|
(77,433 |
) |
Time-charter hire expense |
(11,102 |
) |
(3,697 |
) |
— |
|
(14,799 |
) |
Depreciation and
amortization |
(8,036 |
) |
(80 |
) |
— |
|
(8,116 |
) |
General and administrative
expenses |
(2,595 |
) |
(96 |
) |
(4,484 |
) |
(7,175 |
) |
Asset impairments |
(3,328 |
) |
— |
|
— |
|
(3,328 |
) |
Restructuring charges (2) |
— |
|
(6,463 |
) |
— |
|
(6,463 |
) |
Loss from vessel operations |
(12,557 |
) |
(185 |
) |
(4,484 |
) |
(17,226 |
) |
|
|
|
|
|
Depreciation and
amortization |
8,036 |
|
80 |
|
— |
|
8,116 |
|
Asset impairments |
3,328 |
|
— |
|
— |
|
3,328 |
|
Amortization of in-process
revenue |
|
|
|
|
contracts and
other |
(1,919 |
) |
804 |
|
— |
|
(1,115 |
) |
Daughter entities distributions (3) |
— |
|
— |
|
5,095 |
|
5,095 |
|
Teekay Parent adjusted EBITDA |
(3,112 |
) |
699 |
|
611 |
|
(1,802 |
) |
- Includes the results of two chartered-in FSO units owned by
Teekay Offshore.
- The restructuring charges are related to seafarers' severance
amounts, which were fully recovered from the customer and such
recovery is included in Revenues.
- In addition to the adjusted EBITDA generated by its directly
owned and chartered-in assets, Teekay Parent also receives cash
distributions from its consolidated publicly-traded subsidiary,
Teekay LNG. For the three months ended March 31, 2019, Teekay
Parent received cash distributions from Teekay LNG totaling $5.1
million, including those made with respect to its general partner
interests in Teekay LNG. Distributions received for a given
quarter consist of the amount of distributions relating to such
quarter but received by Teekay Parent in the following quarter.
Please refer to Appendix D of this release for further
details.
Teekay CorporationAppendix D - Reconciliation of Non-GAAP
Financial MeasuresTeekay Parent Free Cash Flow(in thousands of U.S.
dollars, except share and per share data)
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY
PARENT GPCO |
|
|
|
Daughter
Entities distributions to Teekay Parent(1) |
|
|
|
|
Limited Partner
interests(2) |
|
|
|
|
Teekay LNG |
4,790 |
|
3,529 |
|
3,529 |
|
|
Teekay Offshore |
— |
|
— |
|
566 |
|
|
GP interests |
|
|
|
|
Teekay LNG |
305 |
|
227 |
|
228 |
|
|
Teekay Offshore(3)(4) |
— |
|
— |
|
16 |
|
|
Other Dividends |
|
|
|
|
Teekay Tankers(2)(5) |
— |
|
— |
|
— |
|
|
Teekay Offshore |
— |
|
— |
|
— |
|
Total Daughter
Entity Distributions to Teekay Parent |
5,095 |
|
3,756 |
|
4,339 |
|
Corporate general and administrative expenses |
(4,484 |
) |
(5,134 |
) |
(5,647 |
) |
Total
Teekay Parent GPCO |
611 |
|
(1,378 |
) |
(1,308 |
) |
|
|
|
|
|
TEEKAY
PARENT OPCO |
|
|
|
Teekay
Parent OPCO (6) |
|
|
|
|
FPSOs |
(3,112 |
) |
3,737 |
|
13,538 |
|
|
Other |
699 |
|
722 |
|
992 |
|
Total Teekay Parent OPCO (7) |
(2,413 |
) |
4,459 |
|
14,530 |
|
|
|
|
|
TEEKAY PARENT ADJUSTED EBITDA |
(1,802 |
) |
3,081 |
|
13,222 |
|
|
|
|
|
Net interest
expense(8) |
(11,961 |
) |
(14,081 |
) |
(16,434 |
) |
|
|
|
|
|
TOTAL TEEKAY PARENT FREE CASH FLOW |
(13,763 |
) |
(11,000 |
) |
(3,212 |
) |
|
|
|
|
Weighted-average number of common shares -
Basic |
100,520,421 |
100,435,155 |
97,333,503 |
- Daughter Entities dividends and distributions for a given
quarter consist of the amount of dividends and distributions
relating to such quarter but received by Teekay Parent in the
following quarter.
- Common share/unit dividend/distribution cash flows to Teekay
Parent are based on Teekay Parent’s ownership on the ex-dividend
date for the respective publicly-traded subsidiary and
equity-accounted investment in Teekay Offshore for the periods as
follows:
|
|
Three Months Ended |
|
|
March
31, |
December
31, |
March
31, |
|
|
2019 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Teekay
LNG |
|
|
|
|
|
|
Distribution per common unit |
$ |
0.19 |
|
$ |
0.14 |
|
$ |
0.14 |
|
Common units owned by |
|
|
|
|
|
|
Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
Total distribution |
$ |
4,789,572 |
|
$ |
3,529,158 |
|
$ |
3,529,158 |
|
Teekay Offshore |
|
|
|
|
|
|
Distribution per common unit |
$ |
— |
|
$ |
— |
|
$ |
0.01 |
|
Common units owned by |
|
|
|
|
|
|
Teekay Parent |
|
56,587,484 |
|
|
56,587,484 |
|
|
56,587,484 |
|
Total distribution |
$ |
— |
|
$ |
— |
|
$ |
565,875 |
|
Teekay Tankers |
|
|
|
|
|
|
Dividend per share |
$ |
— |
|
$ |
— |
|
$ |
— |
|
Shares owned by Teekay Parent(3) |
|
77,298,441 |
|
|
77,298,441 |
|
|
77,298,441 |
|
Total dividend |
$ |
— |
|
$ |
— |
|
$ |
— |
|
- In July 2018, Brookfield exercised its option to
acquire an additional 2% ownership interest in Teekay Offshore's
general partner from Teekay.
- For the first three quarters of 2018, Teekay Offshore paid a
quarterly distribution of $0.01 per common unit. Commencing with
the distribution for the fourth quarter of 2018, Teekay Offshore's
Board reduced the quarterly distribution to zero.
- Includes Class A and Class B shareholdings. Teekay Tankers'
past dividend policy was to pay out 30 percent to 50 percent of its
quarterly adjusted net income (as defined), with a minimum
quarterly dividend of $0.03 per share, subject to reserves the
Teekay Tankers' Board of Directors may determine are necessary for
the prudent operation of Teekay Tankers. Commencing with the
dividend for the first quarter of 2018, Teekay Tankers' Board of
Directors eliminated the minimum quarterly dividend; however, the
variable portion of the dividend policy was maintained.
- Please refer to Appendices C and E for additional financial
information on Teekay Parent’s adjusted EBITDA.
- Excludes corporate general and administrative expenses relating
to Teekay Parent GPCO.
- Please see Appendix E to this release for a description of this
measure and a reconciliation of this non-GAAP financial measure as
used in this release to interest expense net of interest income,
the most directly comparable GAAP financial measure.
Teekay CorporationNon-GAAP Financial
Reconciliations
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA - Consolidated(in thousands of
U.S. dollars)
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2019 |
2018 |
2018 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Net loss |
(61,464 |
) |
(6,357 |
) |
(9,980 |
) |
Depreciation and
amortization |
72,107 |
|
71,069 |
|
67,311 |
|
Interest expense,
net of interest income |
70,982 |
|
69,982 |
|
52,948 |
|
Income
tax expense |
5,036 |
|
6,727 |
|
4,117 |
|
EBITDA |
86,661 |
|
141,421 |
|
114,396 |
|
Specific income statement items affecting EBITDA: |
|
|
|
|
Asset impairments and loss on sale of vessels |
3,328 |
|
— |
|
18,662 |
|
|
Direct finance lease payments received in excess of revenue
recognized |
3,218 |
|
2,475 |
|
2,887 |
|
|
Amortization of in-process contracts and other |
(1,115 |
) |
(2,609 |
) |
(2,469 |
) |
|
Realized and unrealized loss (gain) on derivative instruments |
5,423 |
|
32,833 |
|
(9,426 |
) |
|
Equity loss (income) |
61,653 |
|
(19,356 |
) |
(27,117 |
) |
|
Foreign currency exchange loss |
2,630 |
|
5,764 |
|
(22 |
) |
|
Loss on deconsolidation of Teekay Offshore |
— |
|
— |
|
7,070 |
|
|
Other (income) expense - net |
(28 |
) |
(782 |
) |
915 |
|
Consolidated Adjusted EBITDA |
161,770 |
|
159,746 |
|
104,896 |
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
75,190 |
|
86,929 |
|
63,468 |
|
Total Adjusted EBITDA |
236,960 |
|
246,675 |
|
168,364 |
|
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA – Equity-Accounted Vessels(in
thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
March 31, 2019 |
December 31, 2018 |
March 31, 2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
At |
Company's |
|
|
100% |
|
Portion(1) |
100% |
|
Portion(1) |
100% |
|
Portion(1) |
Revenues |
494,729 |
|
119,506 |
|
601,685 |
|
136,738 |
|
466,765 |
|
111,857 |
|
Voyage
expenses |
(36,946 |
) |
(6,237 |
) |
(43,289 |
) |
(7,502 |
) |
(37,567 |
) |
(6,214 |
) |
Vessel operating
expenses, time-charter hire expense and general and administrative
expenses |
(182,153 |
) |
(42,112 |
) |
(194,623 |
) |
(46,201 |
) |
(198,344 |
) |
(45,839 |
) |
Depreciation and
amortization |
(112,611 |
) |
(25,918 |
) |
(129,669 |
) |
(28,917 |
) |
(125,756 |
) |
(27,181 |
) |
Asset impairments
and loss on sale of vessels |
— |
|
— |
|
(26,292 |
) |
(3,697 |
) |
(25,493 |
) |
(3,775 |
) |
Income
from vessel operations of equity-accounted vessels |
163,019 |
|
45,239 |
|
207,812 |
|
50,421 |
|
79,605 |
|
28,848 |
|
|
|
|
|
|
|
|
Net interest
expense |
(105,894 |
) |
(28,856 |
) |
(103,802 |
) |
(28,380 |
) |
(75,131 |
) |
(20,841 |
) |
Income tax
expense |
(5,176 |
) |
(1,388 |
) |
(5,586 |
) |
(785 |
) |
(26 |
) |
(13 |
) |
Realized and
unrealized (loss) gain on derivative instruments |
(48,296 |
) |
(10,033 |
) |
(68,208 |
) |
(16,625 |
) |
65,980 |
|
14,588 |
|
Other expense -
net |
(12,581 |
) |
(1,715 |
) |
(9,065 |
) |
(577 |
) |
1,869 |
|
(1,028 |
) |
(Writedowns) and
gains on sale of equity-accounted investments |
|
(64,900 |
) |
— |
|
15,302 |
|
|
5,563 |
|
|
|
|
|
|
|
|
|
Net (loss)
income / equity (loss) income of equity-accounted
vessels |
(8,928 |
) |
(61,653 |
) |
21,151 |
|
19,356 |
|
72,297 |
|
27,117 |
|
|
|
|
|
|
|
|
|
Net (loss) income
/ equity (loss) income of equity-accounted vessels |
(8,928 |
) |
(61,653 |
) |
21,151 |
|
19,356 |
|
72,297 |
|
27,117 |
|
Depreciation and
amortization |
112,611 |
|
25,918 |
|
129,669 |
|
28,917 |
|
125,756 |
|
27,181 |
|
Interest expense,
net of interest income |
105,894 |
|
28,856 |
|
103,802 |
|
28,380 |
|
75,131 |
|
20,841 |
|
Income
tax expense |
5,176 |
|
1,388 |
|
5,586 |
|
785 |
|
26 |
|
13 |
|
EBITDA |
214,753 |
|
(5,491 |
) |
260,208 |
|
77,438 |
|
273,210 |
|
75,152 |
|
Specific income
statement items affecting EBITDA: |
|
|
|
|
|
|
Asset impairments and loss on
sale of vessels |
— |
|
— |
|
26,292 |
|
3,697 |
|
25,493 |
|
3,775 |
|
|
Direct finance lease payments
received in excess of revenue recognized |
14,689 |
|
5,133 |
|
14,057 |
|
5,066 |
|
13,773 |
|
4,665 |
|
|
Amortization of in-process
contracts and other |
(1,722 |
) |
(936 |
) |
(1,804 |
) |
(965 |
) |
(6,190 |
) |
(1,062 |
) |
|
Realized and unrealized loss
(gain) on derivative instruments |
48,296 |
|
10,033 |
|
68,208 |
|
16,625 |
|
(65,980 |
) |
(14,588 |
) |
|
Realized (loss) gain on
foreign currency forward contracts |
(1,175 |
) |
(165 |
) |
(1,470 |
) |
(207 |
) |
431 |
|
61 |
|
|
Other (income) expense -
net(2) |
12,581 |
|
1,716 |
|
9,065 |
|
577 |
|
(1,869 |
) |
1,028 |
|
|
Write-down and (gain) on sale of equity-accounted investments |
|
64,900 |
|
— |
|
(15,302 |
) |
— |
|
(5,563 |
) |
Adjusted EBITDA from equity-accounted
vessels(3) |
287,422 |
|
75,190 |
|
374,556 |
|
86,929 |
|
238,868 |
|
63,468 |
|
(1) The Company’s proportionate share of
its equity-accounted vessels and other investments, including its
investment in Teekay Offshore, ranges from 14 percent to 52
percent.
(2) For the three months ended December
31, 2018, includes a gain on the sale of Teekay's 43.5% stake in
Magnora in November 2018. For the three months ended March 31,
2018, includes a gain on the sale of Teekay LNG's 50% ownership
interest in the Excelsior Joint Venture.
(3) Adjusted EBITDA from equity-accounted
vessels represents the Company’s proportionate share of adjusted
EBITDA from its equity-accounted vessels and other investments.
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA - Teekay Parent(in thousands of
U.S. dollars)
|
|
Three Months
Ended December 31, 2018 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
|
|
|
|
Parent |
|
|
FPSOs |
Other |
GPCO |
Total |
|
|
|
|
|
|
|
|
|
Teekay Parent loss
from vessel operations |
|
(2,370 |
) |
|
(845 |
) |
(5,134 |
) |
|
(8,349 |
) |
Depreciation and
amortization |
|
8,035 |
|
|
39 |
|
— |
|
|
8,074 |
|
Amortisation of
in-process revenue contracts and other |
|
(1,928 |
) |
|
1,528 |
|
— |
|
|
(400 |
) |
Daughter entities distributions |
|
— |
|
|
— |
|
3,756 |
|
|
3,756 |
|
Adjusted EBITDA – Teekay Parent |
|
3,737 |
|
|
722 |
|
(1,378 |
) |
|
3,081 |
|
|
|
Three Months
Ended March 31, 2018 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
|
|
|
|
Parent |
|
|
FPSOs |
Other |
GPCO |
Total |
|
|
|
|
|
|
|
|
|
Teekay Parent
income (loss) from vessel operations |
|
6,882 |
|
|
549 |
|
(5,647 |
) |
|
1,784 |
|
Depreciation and
amortization |
|
8,594 |
|
|
20 |
|
— |
|
|
8,614 |
|
Amortisation of
in-process revenue contracts and other |
|
(1,938 |
) |
|
423 |
|
— |
|
|
(1,515 |
) |
Daughter entities distributions |
|
— |
|
|
— |
|
4,339 |
|
|
4,339 |
|
Adjusted EBITDA – Teekay Parent |
|
13,538 |
|
|
992 |
|
(1,308 |
) |
|
13,222 |
|
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresNet Interest Expense - Teekay Parent(in thousands
of U.S. dollars)
|
|
|
Three Months Ended |
|
|
|
March 31, |
December 31, |
March 31, |
|
|
|
2019 |
2018 |
2018 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Interest
expense |
(73,671 |
) |
(72,632 |
) |
(54,625 |
) |
Interest income |
2,689 |
|
2,650 |
|
1,677 |
|
Interest expense
net of interest income consolidated |
(70,982 |
) |
(69,982 |
) |
(52,948 |
) |
Less: Non-Teekay
Parent interest expense net of |
|
|
|
|
interest income |
(57,716 |
) |
(55,223 |
) |
(36,363 |
) |
Interest expense
net of interest income - Teekay Parent |
(13,266 |
) |
(14,759 |
) |
(16,585 |
) |
Teekay Parent
non-cash accretion and loan cost amortization |
1,562 |
|
969 |
|
673 |
|
Teekay
Parent realized losses on interest rate swaps |
(257 |
) |
(291 |
) |
(522 |
) |
Net interest expense - Teekay Parent |
(11,961 |
) |
(14,081 |
) |
(16,434 |
) |
Forward Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect
to certain future events and performance, including statements,
among other things, regarding: Teekay Parent’s delevering and
financial flexibility; expected reductions in Teekay Parent’s
interest expense and increases in its free cash flow resulting from
reductions in Teekay Parent’s gross debt; strengthening of the
global tanker market in the second half of 2019 into 2020;
improving tanker and gas shipping market fundamentals; Teekay
Parent's ability to create greater long-term value; a tanker market
recovery that would increase Teekay Tankers’ cash flows and asset
values; and the ability of Teekay LNG to return capital to
unitholders while also continuing to delever its balance sheet. The
following factors are among those that could cause actual results
to differ materially from the forward-looking statements, which
involve risks and uncertainties, and that should be considered in
evaluating any such statement: market or counterparty reaction to
changes in exploration, production and storage of offshore oil and
gas, either generally or in particular regions that would impact
expected future growth; changes in the demand for oil, refined
products, LNG or LPG; changes in trading patterns significantly
affecting overall vessel tonnage requirements; greater or less than
anticipated levels of vessel newbuilding orders and deliveries and
greater or less than anticipated rates of vessel scrapping; changes
in global oil prices; issues with vessel operations; increased
operating expenses; potential project delays or cancellations;
changes in applicable industry laws and regulations and the timing
of implementation of new laws and regulations; the effects of IMO
2020; the potential for early termination of long-term contracts of
existing vessels; delays in the commencement of charter or other
contracts; the ability to fund remaining capital commitments and
debt maturities; and other factors discussed in Teekay’s filings
from time to time with the SEC, including its Annual Report on Form
20-F for the fiscal year ended December 31, 2018. Teekay expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Teekay’s expectations with respect
thereto or any change in events, conditions or circumstances on
which any such statement is based.
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