Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
the Company's results for the quarter ended March 31, 2018.
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) and
one equity-accounted investment in publicly-listed Teekay Offshore
Partners L.P. (Teekay Offshore) (NYSE:TOO) (collectively, the
Daughter Entities), and all remaining subsidiaries and
equity-accounted investments of the Company. The Company, together
with its subsidiaries other than the Daughter Entities, is referred
to in this release as Teekay Parent. Please refer to the
first quarter 2018 earnings releases of Teekay LNG, Teekay Tankers
and Teekay Offshore, which are available on the Company’s website
at www.teekay.com, for additional information on their respective
results.
|
|
Three Months Ended |
|
March 31, |
December 31, |
March 31, |
|
2018 |
2017 |
2017 |
(in thousands of U.S. dollars, except per
share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY CORPORATION CONSOLIDATED |
|
|
GAAP FINANCIAL COMPARISON |
|
|
|
Revenues |
394,022 |
|
326,686 |
|
543,505 |
|
Income from
vessel operations |
18,505 |
|
66,655 |
|
81,605 |
|
Equity
income (loss) |
27,117 |
|
(971 |
) |
10,347 |
|
Net loss
attributable to shareholders of Teekay |
(20,555 |
) |
(25,286 |
) |
(45,256 |
) |
Loss per
share attributable to shareholders of Teekay |
(0.21 |
) |
(0.29 |
) |
(0.53 |
) |
NON-GAAP FINANCIAL COMPARISON |
|
|
|
Total Cash
Flow from Vessel Operations(CFVO)(1)(2) |
168,364 |
|
183,586 |
|
274,976 |
|
Adjusted
Net Loss attributable to shareholders of Teekay(1) |
(18,324 |
) |
(9,500 |
) |
(35,671 |
) |
Adjusted
Loss per share attributable to shareholders of Teekay(1) |
(0.19 |
) |
(0.11 |
) |
(0.41 |
) |
TEEKAY PARENT |
|
|
|
NON-GAAP FINANCIAL COMPARISON |
|
|
|
Teekay
Parent Adjusted Cash Flow from Vessel Operations(1) |
13,222 |
|
15,781 |
|
(8,609 |
) |
Total
Teekay Parent Free Cash Flow(1) |
(3,212 |
) |
(721 |
) |
(20,971 |
) |
(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). |
(2) |
|
Total cash flow from
vessel operations has reduced in the first quarter of 2018 and the
fourth quarter of 2017 primarily as a result of the deconsolidation
of Teekay Offshore on September 25, 2017, which Teekay now accounts
for using the equity method. |
CEO Commentary
“On a consolidated basis, Teekay’s financial
results improved in the first quarter of 2018, compared to the same
period of the prior year, primarily driven by higher cash flows
from Teekay Parent’s directly-owned FPSO units that have upside
exposure to oil prices and production, and the delivery and
contract start-up of several growth projects across the group,
partially offset by weaker crude tanker rates,” commented Kenneth
Hvid, President and Chief Executive Officer.
“Having focused on the execution and financing
of our sizeable Teekay Group project portfolio over the past two
years, we are now starting to see these projects deliver and
generate cash flow,” Mr. Hvid added. “We believe that our LNG
and offshore businesses are at a positive inflection point and we
remain encouraged by the improving fundamentals in our tanker
business as we approach 2019.”
“In Teekay LNG, over the past seven months, we
have taken delivery of seven LNG carriers, all on long-term
charters,” commented Mr. Hvid. “We believe Teekay LNG is in
the early innings of a multi-year cash flow ramp-up with an
additional 11 LNG carriers and a regasification facility scheduled
to start-up through early-2020, which we expect will also allow us
to naturally delever our balance sheet. From a macro
perspective, the long-term LNG fundamentals continue to be very
strong, with anticipated LNG demand growth of approximately 25
percent by 2020 and approximately 70 percent by 2030.”
“In Teekay Offshore, with the recent start-up of
the Petrojarl I FPSO and the third East Coast Canada shuttle tanker
newbuilding, we have now completed all our near-term offshore
growth projects, which we expect will also allow Teekay Offshore to
naturally delever its balance sheet,” commented Mr. Hvid.
“Looking ahead, Teekay Offshore has ordered four innovative
LNG-powered shuttle tankers as part of its fleet renewal program to
meet the needs of its North Sea customer base. From a macro
perspective, global deepwater oil production is expected to grow by
approximately 25 percent by 2025.”
“Teekay Tankers continues to take prudent steps
to further strengthen its balance sheet and liquidity position,
most recently signing a term sheet for a sale-leaseback financing,
which is expected to increase its liquidity by approximately $36
million. In addition, Teekay Tankers eliminated its minimum
quarterly dividend to preserve liquidity in this weak tanker market
but maintained the variable portion of its dividend policy linked
to earnings,” commented Mr. Hvid. “While tanker rates are
expected to remain weak in the near-term, we are anticipating a
gradual improvement in fleet utilization and tanker rates from
late-2018. With significant operating leverage, we believe
Teekay Tankers has considerable upside from a cash flow and
valuation perspective as the tanker market strengthens.”
“At Teekay Parent, we are experiencing growing
adjusted cash flow from vessel operations driven by recently
renewed contracts on the Banff and Hummingbird Spirit FPSO units
and the redelivery of our last in-chartered LNG carriers and
conventional tankers,” commented Mr. Hvid. “Teekay Parent
continues to strengthen its balance sheet with the equity and
convertible bond offerings completed earlier this year and our
remaining FPSO units now on better contracts, which opens up
strategic options for these assets.”
Mr. Hvid added, “Overall, we believe the Teekay
Group is well-positioned to benefit from a broad energy
recovery.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended March 31, 2018, compared to the same period of the
prior year, were positively impacted primarily by higher cash flows
from the Banff and Hummingbird FPSO units due to the commencement
of oil price-linked production tariffs in those charter contracts
on August 1, 2017 and October 1, 2017, respectively, and higher
income and cash flows from Teekay LNG as a result of the deliveries
of 10 liquefied natural gas (LNG) and mid-sized liquefied petroleum
gas (LPG) newbuilding carriers between February 2017 and February
2018.
These increases were partially offset primarily
by lower income and cash flows in Teekay Tankers, as a result of
lower average spot tanker rates and the expiry of time-charter out
contracts for various vessels, which vessels have subsequently
traded in the spot tanker market at lower average realized
rates.
Teekay Parent
Teekay Parent Adjusted Cash Flow from Vessel
Operations, which includes distributions and dividends paid to
Teekay Parent from the Daughter Entities in the following quarter
and cash flow attributable to assets directly-owned by, or
chartered-in to, Teekay Parent, less Teekay Parent’s corporate
general and administrative expenses, was $13.2 million for the
quarter ended March 31, 2018 compared to negative $8.6 million
for the same period of the prior year. This significant improvement
was primarily due to higher revenues from the Banff and Hummingbird
Spirit FPSO units due to contractual production tariffs
linked to oil prices which commenced in the latter half of 2017,
the commencement of charter contracts for the Polar Spirit and
Arctic Spirit LNG carriers in the second and third quarters of
2017, respectively, which vessels were in-chartered from Teekay LNG
until March 2018 and April 2018, respectively, and as a result of
the adoption of the new revenue standard, the recognition of $2.0
million of additional annual incentive revenue related to the
Foinaven FPSO which is normally recognized annually in the fourth
quarter. These increases were partially offset by a reduction in
cash distributions from Teekay Offshore as a result of the
strategic partnership with Brookfield Business Partners L.P.
together with its institutional partners (collectively, Brookfield)
and the elimination of the minimum dividend payment from Teekay
Tankers commencing with the first quarter of 2018 (the variable
portion of Teekay Tankers' dividend policy remains intact).
Total Teekay Parent Free Cash Flow, includes
Teekay Parent Adjusted Cash Flow from Vessel Operations, less net
interest expense and dry-dock expenditures, was negative $3.2
million during the first quarter of 2018, compared to negative
$21.0 million for the same period of the prior year for the reasons
mentioned above, and from no interest income earned for the three
months ended March 31, 2018 on a $200 million loan to Teekay
Offshore which Teekay Parent sold to Brookfield in the third
quarter of 2017. Please refer to Appendix D of this release for
additional information about Teekay Parent Free Cash Flow.
Summary Results of Daughter
Entities
Teekay LNG
Teekay LNG’s results increased during the
quarter ended March 31, 2018, compared to the same quarter of the
prior year, primarily due to the delivery of 10 LNG and mid-sized
LPG newbuilding carriers between February 2017 and February 2018
and the commencement of short-term charter contracts for certain of
the vessels in Teekay LNG's 52 percent-owned joint venture with
Marubeni Corporation. These increases were partially offset by the
sale of a conventional tanker and an LPG carrier in the first
quarter of 2018, lower rates earned in 2018 on two conventional
tankers upon the expiration of their fixed-rate charter contracts
in 2017, and lower rates earned in 2018 on six LPG carriers upon
the termination of their previous charter contracts. Please refer
to Teekay LNG's first quarter 2018 earnings release for additional
information on the financial results for this entity.
Teekay Tankers
Teekay Tankers' results decreased during the
quarter ended March 31, 2018, compared to the same period of the
prior year, primarily due to lower average spot tanker rates and
the expiry of time-charter out contracts for various vessels, which
have subsequently traded on spot voyages at lower average realized
rates in the first quarter of 2018 compared to the same period of
the prior year. Please refer to Teekay Tankers' first quarter 2018
earnings release for additional information on the financial
results for this entity.
Teekay Offshore
Teekay Offshore’s results increased during the
quarter ended March 31, 2018, compared to the same period of the
prior year, primarily due to the contract start-up of the Randgrid
FSO, the Pioneiro de Libra FPSO and the Beothuk Spirit and Norse
Spirit shuttle tankers in the fourth quarter of 2017 and first
quarter of 2018. These increases were offset by lower earnings from
the Teekay Offshore's towage fleet reflecting the challenging
towage markets and non-recurring repair and maintenance expenses in
the first quarter of 2018 relating to two redelivered shuttle
tankers. Please refer to Teekay Offshore's first quarter 2018
earnings release for additional information on the financial
results for this entity.
Summary of Recent Events
Teekay LNG
Growth Projects Update
In January 2018, Teekay LNG’s 50 percent-owned
joint venture with China LNG Shipping (Holdings) Limited (China
LNG) took delivery of its first ARC7 LNG carrier newbuilding, the
Eduard Toll, which immediately commenced its 28-year charter
contract with Yamal LNG project.
In January 2018, Teekay LNG’s 30 percent-owned
joint venture with China LNG and CETS (an affiliate of China
National Offshore Oil Corporation (CNOOC)) took delivery of one LNG
carrier newbuilding, the Pan Americas, which immediately commenced
its 20-year charter contract with Royal Dutch Shell (Shell).
In February and May 2018, Teekay LNG took
delivery of two M-Type, Electronically Controlled, Gas Injection
(MEGI) LNG carrier newbuildings, the Magdala and Myrina, both of
which immediately commenced their respective charter contracts with
Shell ranging between six and eight years in duration, plus
extension options.
In March 2018, Teekay LNG’s 50 percent-owned
joint venture with Exmar NV (the Exmar LPG Joint Venture) took
delivery of its seventh mid-size LPG carrier newbuilding, the
Kapellen, which is currently trading in the spot market.
Re-chartering Activities
In March 2018, upon the scheduled redelivery
from Teekay, Teekay LNG re-chartered the Polar Spirit to an
Asian-based energy company for a period of approximately three
months and then subsequently secured forward employment beginning
in July 2018 for nine months with a subsidiary of Petroliam
Nasional Berhad (Petronas). In addition, Teekay LNG secured a
four-year charter contract for the Arctic Spirit, also with a
subsidiary of Petronas, which commenced immediately upon redelivery
from Teekay in May 2018.
In May 2018, Teekay LNG agreed to a six-month
charter extension of the Torben Spirit MEGI LNG carrier to a major
energy company out to December 2018.
Teekay Nakilat Capital Lease
Teekay LNG owns a 70 percent interest in Teekay
Nakilat Corporation (the Teekay Nakilat Joint Venture), which
wholly owns a subsidiary which was the lessee under three separate
30-year capital lease arrangements for three LNG carriers (the
RasGas II LNG Carriers). Under the terms of these leases, the
lessor claimed tax depreciation on the capital expenditures
incurred to acquire these vessels and paid the lessee an upfront
benefit in the amount of $60.9 million at the lease inception. As
is typical in these leasing arrangements, tax and change of law
risks were assumed by the lessee, in this case the Teekay Nakilat
Joint Venture. Lease payments under the lease arrangements were
based on certain tax and financial assumptions at the commencement
of the leases in 2006 and subsequently adjusted to maintain the
lessor's agreed after-tax margin. On December 22, 2014, the
Teekay Nakilat Joint Venture terminated the leases of the RasGas II
LNG Carriers; however, it remained obligated to the lessor for
changes in tax treatment.
The UK taxing authority (HMRC) has challenged
the use by third parties of similar lease structures in the UK
courts. One of those challenges was eventually decided in favor of
HMRC, with the lessor and lessee choosing not to appeal further.
This case concluded that capital allowances are not available to
lessors. On the basis of this conclusion, HMRC is now asking
lessees on other leases, including the Teekay Nakilat Joint
Venture, to accept that capital allowances are not available to
their lessors. Under the terms of the lease, the lessor is entitled
to make a determination that additional rentals are due, even where
a court has not made a determination on whether capital allowances
are available or where discussions are otherwise ongoing with HMRC
on the matter (such that additional rental paid may be rebated in
due course if the final tax position is not as determined by the
lessor). The Teekay Nakilat Joint Venture received initial
indications from the lessor in April 2018, which were confirmed on
May 10, 2018, that the lessor made a determination that additional
rentals are due under the leases. As a result, the Teekay
Nakilat Joint Venture has recognized an additional tax
indemnification guarantee of $53.0 million for a total liability of
$65.6 million (46.9 million GBP) as at March 31, 2018, of which
$3.0 million and $50.0 million is included in Teekay Corporation's
results for the three months ended March 31, 2018 and December 31,
2017, respectively. The Teekay Nakilat Joint Venture is in
discussions with HMRC in relation to the correct tax treatment to
be applied to the leases and with the lessor regarding the timing
and amount of this potential liability for additional rentals.
Financing Update
In May 2018, Teekay LNG refinanced an
outstanding debt facility of $58 million maturing in 2018 and
secured by five mid-sized LPG carriers with a new $90 million
long-term debt facility maturing in 2024 and secured by seven
mid-sized LPG carriers.
Teekay Tankers
Maintaining Balance Sheet Strength
In April 2018, Teekay Tankers signed a term
sheet for a sale-leaseback financing transaction relating to seven
modern conventional tankers, including three Suezmax tankers, two
Aframax tankers and two LR2 product tankers. The transaction is
structured as 10- to 12-year bareboat charters at an average rate
of approximately $7,200 per day with attractive purchase options
for all seven vessels throughout the lease term after year three.
Upon expected completion, the sale-leaseback transaction will
provide funds to refinance Teekay Tankers’ only 2018 balloon debt
maturity and is expected to increase Teekay Tankers' liquidity by
approximately $36 million.
In addition, in May 2018, Teekay Tankers
eliminated its minimum quarterly dividend of $0.03 per share with
the variable portion of Teekay Tankers' dividend remaining intact,
which is based on paying out 30 to 50 percent of its adjusted net
income.
Contracting Activities
In the first quarter of 2018, Teekay Tankers
secured time charter-in contracts for two Aframax vessels, with an
average rate of approximately $11,900 per day, and firm periods of
45 days to six months. One of the contracts includes a 50/50 profit
sharing agreement with the option to extend for six months at a
higher rate and the other contract has a maximum period of
approximately four months and will be used to support Teekay
Tankers' full service lightering operations.
Teekay Offshore
Growth Projects Update
In May 2018, the Petrojarl I FPSO successfully
achieved first oil and commenced its five-year charter contract
with a consortium led by Queiroz Galvão Exploração e Produção SA
(QGEP) on the Atlanta oil field, which is the Petrojarl I FPSO’s
tenth field over its lifetime. The Petrojarl I FPSO is expected to
generate annualized cash flow from vessel operations of
approximately $25 million(1) for the first 18 months, increasing to
annualized cash flow from vessel operations of approximately $55
million(1) during the remaining 42 months of the charter contract,
plus additional potential upside from oil price tariffs.
In late-2017 and March 2018, Teekay Offshore
took delivery of its last two of three East Coast of Canada shuttle
tanker newbuildings, the Norse Spirit and Dorset Spirit, which
commenced their respective long-term charter contracts in January
and May 2018, respectively, with a group of companies that includes
Canada Hibernia Holding Corporation, Chevron Canada, Exxon Mobil,
Husky Energy, Mosbacher Operating Ltd., Murphy Oil, Nalcor Energy,
Statoil and Suncor Energy. The Norse Spirit and Dorset Spirit
replaced existing owned and in-chartered vessels servicing the East
Coast of Canada, both of which have been repositioned to the North
Sea to operate in the Partnership’s contract of affreightment (CoA)
portfolio.
In February 2018, Teekay Offshore took delivery
of the last of four state-of-the-art SX-157 Ulstein Design
ultra-long distance towing and offshore installation newbuildings,
the ALP Keeper, constructed by Niigata Shipbuilding & Repair in
Japan.
Recontracting of FPSO units
In April 2018, Teekay Offshore signed the
previously-announced contract extension with Premier Oil to extend
the employment of the Voyageur Spirit FPSO on the Huntington field
to at least April 2019. The new contract, which took effect in
April 2018, will include a lower fixed charter rate component plus
a component based on oil production and oil price.
ALP Contract Award
In February 2018, ALP Maritime, Teekay
Offshore's towage subsidiary, was awarded a contract to provide
five vessels to perform mobilization and field installation
services for the FPSO Kaombo Norte. The contract commenced in
mid-March 2018 and is expected to require approximately 330 vessel
equivalent days to service the project.
Financing Update
In March 2018, Teekay Offshore refinanced its
existing $250 million debt facility secured by its three East Coast
Canada shuttle tankers with a new five-year $266 million debt
facility.
In March 2018, Teekay Offshore entered into an
18-month $125 million unsecured revolving credit facility, of which
$25 million is being provided by Teekay Parent and $100 million is
being provided by Brookfield. The $125 million facility was undrawn
as at March 31, 2018.
Teekay Offshore has reached an agreement in
principle with the lenders of the Arendal Spirit UMS debt facility
to extend the mandatory principal repayment date by one year to
September 2019 in exchange for a partial principal repayment in
September 2018.
(1) Excludes the impact of any potential liquidated damages
relating to project delays and non-cash revenues.
Liquidity
As at March 31, 2018, Teekay Parent had
total liquidity of approximately $478.8 million (consisting of
$244.2 million of cash and cash equivalents and $234.6 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity (excluding Teekay Offshore)
of approximately $1.0 billion (consisting of $489.2 million of cash
and cash equivalents and $553.7 million of undrawn revolving credit
facilities).
Conference Call
The Company plans to host a conference call on
Thursday, May 17, 2018 at 2:00 p.m. (ET) to discuss its
results for the first quarter of 2018. An accompanying
investor presentation will be available on Teekay’s website at
www.teekay.com prior to the start of the call. All
shareholders and interested parties are invited to listen to the
live conference call by choosing from the following options:
- By dialing (800) 289-0438 or (647) 484-0478, if outside North
America, and quoting conference ID code 2014882.
- 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 2018 Earnings
Presentation will also be available at www.teekay.com in advance of
the conference call start time.
About Teekay
Teekay Corporation operates in the marine
midstream space through its ownership of the general partner and a
portion of the outstanding limited partner interests in Teekay LNG
Partners L.P. (NYSE:TGP) and an interest in the general partner and
a portion of the outstanding limited partner interests in Teekay
Offshore Partners L.P. (NYSE:TOO). The general partners own all of
the outstanding incentive distribution rights of these entities. In
addition, Teekay has a controlling ownership interest in Teekay
Tankers Ltd. (NYSE:TNK) and directly owns a fleet of vessels. The
combined Teekay entities operate total assets under management of
approximately $16.7 billion, comprised of approximately 220
liquefied gas, offshore, and conventional tanker assets. With
offices in 14 countries and approximately 8,300 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 U.S. Securities and Exchange Commission. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Cash Flow from Vessel Operations - Consolidated, Cash Flow From
Vessel Operations - Equity Investments, Adjusted Net Loss
Attributable to Shareholders of Teekay, Teekay Parent GPCO Cash
Flow, Teekay Parent OPCO Cash Flow, Teekay Parent Adjusted Cash
Flow from Vessel Operations, Teekay Parent Free Cash Flow, Net
Interest Expense and Adjusted Equity Income, 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.
Non-GAAP Financial Measures
Cash Flow from Vessel Operations (CFVO)
represents income (loss) from vessel operations before depreciation
and amortization expense, amortization of in-process revenue
contracts, asset impairments, gains or losses on the sale of
vessels and equipment and other operating assets and adjustments
for direct financing leases to a cash basis, but includes realized
gains or losses on the settlement of foreign currency forward
contracts and a derivative charter contract. CFVO - Consolidated
represents CFVO from vessels that are consolidated on the Company’s
financial statements. CFVO - Equity Investments represents the
Company’s proportionate share of CFVO from its equity-accounted
vessels and other investments. The Company does not control its
equity-accounted vessels and investments and as a result, the
Company does not have the unilateral ability to determine whether
the cash generated by its equity-accounted vessels and other
investments is retained within the entities in which the Company
holds the equity-accounted investment or distributed to the Company
and other owners. In addition, the Company does not control the
timing of such distributions to the Company and other owners.
Consequently, readers are cautioned when using total CFVO as a
liquidity measure as the amount contributed from CFVO - Equity
Investments may not be available to the Company in the periods such
CFVO is generated by its equity-accounted vessels and other
investments. CFVO is a non-GAAP financial measure used by certain
investors and management to measure the operational financial
performance of companies. Please refer to Appendices C and E of
this release for reconciliations of these non-GAAP financial
measures to (loss) income from vessel operations and income (loss)
from vessel operations of equity-accounted vessels, respectively,
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)
income 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) income, and refer to
footnote (2) of the income statement for a reconciliation of
adjusted equity income to equity income (loss), the most directly
comparable GAAP measure reflected in the Company’s consolidated
financial statements.
Teekay Parent Financial
Measures
Teekay Parent Adjusted Cash Flow from Vessel
Operations 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 (collectively, Teekay Parent GPCO Cash Flow) plus (b)
CFVO attributed to Teekay Parent’s directly-owned and chartered-in
assets (Teekay Parent OPCO Cash Flow). Teekay Parent Free Cash Flow
represents Teekay Parent Adjusted Cash Flow from Vessel Operations,
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) Income(in thousands of U.S. dollars,
except share and per share data)
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2018 |
|
2017 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
Revenues |
394,022 |
|
326,686 |
|
543,505 |
|
|
|
|
|
Voyage expenses |
(85,877 |
) |
(24,438 |
) |
(50,797 |
) |
Vessel operating
expenses |
(157,935 |
) |
(131,650 |
) |
(191,260 |
) |
Time-charter hire
expense |
(19,411 |
) |
(22,787 |
) |
(38,772 |
) |
Depreciation and
amortization |
(67,311 |
) |
(63,116 |
) |
(143,030 |
) |
General and
administrative expenses |
(24,183 |
) |
(17,509 |
) |
(31,438 |
) |
Asset impairments |
(13,000 |
) |
— |
|
— |
|
Net loss on sale of
vessels, equipment and other operating assets |
(5,662 |
) |
(489 |
) |
(4,427 |
) |
Restructuring charges |
(2,138 |
) |
(42 |
) |
(2,176 |
) |
Income from
vessel operations |
18,505 |
|
66,655 |
|
81,605 |
|
|
|
|
|
Interest expense |
(54,625 |
) |
(49,163 |
) |
(70,355 |
) |
Interest income |
1,677 |
|
1,373 |
|
1,481 |
|
Realized and unrealized
gain (loss) on |
|
|
|
non-designated
derivative instruments(1) |
9,426 |
|
4,319 |
|
(6,475 |
) |
Equity income
(loss)(2) |
27,117 |
|
(971 |
) |
10,347 |
|
Income tax expense |
(4,117 |
) |
(465 |
) |
(3,019 |
) |
Foreign exchange gain
(loss)(3) |
22 |
|
(3,575 |
) |
(2,904 |
) |
Loss on deconsolidation
of Teekay Offshore(4) |
(7,070 |
) |
(1,600 |
) |
— |
|
Other (loss) income –
net(3)(5) |
(915 |
) |
(48,812 |
) |
295 |
|
Net (loss) income |
(9,980 |
) |
(32,239 |
) |
10,975 |
|
Less: Net (income) loss
attributable |
|
|
|
to
non-controlling interests |
(10,575 |
) |
6,953 |
|
(56,231 |
) |
Net loss attributable to
the shareholders of Teekay
Corporation |
|
|
|
(20,555 |
) |
(25,286 |
) |
(45,256 |
) |
|
|
|
|
Loss per common share
of Teekay Corporation |
|
|
|
-
Basic |
$ |
(0.21 |
) |
$ |
(0.29 |
) |
$ |
(0.53 |
) |
- Diluted |
$ |
(0.21 |
) |
$ |
(0.29 |
) |
$ |
(0.53 |
) |
|
|
|
|
Weighted-average number
of common |
|
|
|
shares
outstanding |
|
|
|
-
Basic |
97,333,503 |
|
86,641,584 |
|
86,183,831 |
|
- Diluted |
97,333,503 |
|
86,641,584 |
|
86,183,831 |
|
(1) |
|
Realized
and unrealized gains (losses) 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) income. The realized (losses) gains relate to the amounts
the Company actually paid to settle such derivative instruments and
the unrealized gains (losses) relate to the change in fair value of
such derivative instruments, as detailed in the table below: |
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Realized
(losses) gains relating to: |
|
|
|
|
Interest rate
swaps |
(4,809 |
) |
(5,725 |
) |
(16,556 |
) |
|
Termination of interest
rate swaps |
— |
|
— |
|
395 |
|
|
Foreign currency
forward contracts |
— |
|
29 |
|
(354 |
) |
|
Time-charter swaps |
— |
|
160 |
|
780 |
|
|
Forward freight
agreements |
— |
|
(234 |
) |
— |
|
|
|
(4,809 |
) |
(5,770 |
) |
(15,735 |
) |
Unrealized
gains (losses) relating to: |
|
|
|
|
Interest rate
swaps |
15,919 |
|
11,824 |
|
9,123 |
|
|
Foreign currency
forward contracts |
— |
|
(457 |
) |
839 |
|
|
Stock purchase
warrants |
(1,684 |
) |
(1,385 |
) |
(243 |
) |
|
Time-charter swap |
— |
|
(14 |
) |
(459 |
) |
|
Forward freight
agreements |
— |
|
121 |
|
— |
|
|
|
14,235 |
|
10,089 |
|
9,260 |
|
Total realized and unrealized gains (losses) on
non-designated derivative instruments |
9,426 |
|
4,319 |
|
(6,475 |
) |
(2) |
|
The
Company’s proportionate share of items within equity income (loss)
as identified in Appendix A of this release is detailed in the
table below. By excluding these items from equity income (loss) as
reflected in the consolidated statements of (loss) income, 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, |
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Equity
income (loss) |
27,117 |
|
(971 |
) |
10,347 |
|
Proportionate share of unrealized gains on derivative
instruments |
(19,477 |
) |
(5,680 |
) |
(2,075 |
) |
Other(i) |
1,532 |
|
9,203 |
|
762 |
|
Equity income adjusted for items in Appendix A |
9,172 |
|
2,552 |
|
9,034 |
|
(i) |
|
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. Other for
the three months ended December 31, 2017 includes the Company’s
proportionate share of the reduction in carrying value of amounts
contingently owing to Sevan Marine ASA in relation to the original
financing for its floating accommodation business subsequently sold
to Teekay Offshore, partially offset by the settlement of an
unrecognized license fee of Sevan Marine ASA that was previously in
dispute, the impairment of two vessels in Teekay LNG's Exmar LPG
joint venture, and a gain to reflect the revaluation of Teekay
Tankers' and Teekay Parent's equity-accounted investment as at the
date of the merger between Teekay Tankers and Tanker Investments
Ltd. The Company's proportionate share of a gain on sale of a
subsidiary in Sevan Marine ASA is included in the three months
ended March 31, 2017. |
|
|
|
(3) |
|
Teekay LNG
owns a 70 percent interest in the Teekay Nakilat Joint Venture,
which was the lessee under three separate 30-year capital lease
arrangements with a third party for the RasGas II LNG Carriers.
Under the terms of the leases in respect of the RasGas II LNG
Carriers, the lessor claimed tax depreciation on the capital
expenditures it incurred to acquire these vessels and paid the
lessee an upfront benefit in the amount of $60.9 million at the
lease inception. As is typical in these leases, tax and change of
law risks were assumed by the lessee, in this case the Teekay
Nakilat Joint Venture. Lease payments were based on certain tax and
financial assumptions at the commencement of the leases in 2006 and
subsequently adjusted to maintain the lessor's agreed after-tax
margin. On December 22, 2014, the Teekay Nakilat Joint Venture
terminated the leases of the RasGas II LNG Carriers; however, it
remained obligated to the lessor for changes in tax treatment. |
|
|
|
|
|
HMRC has
been challenging the use by third parties of similar lease
structures in the UK courts. One of those challenges was eventually
decided in favor of HMRC, with the lessor and lessee choosing not
to appeal further. This case concluded that capital allowances were
not available to the lessor. On the basis of this conclusion,
HMRC is now asking lessees on other leases, including the Teekay
Nakilat Joint Venture, to accept that capital allowances are not
available to their lessors. Under the terms of the Teekay Nakilat
Joint Venture lease, the lessor is entitled to make a determination
that additional rentals are due, even where a court has not made a
determination on whether capital allowances are available or where
discussions are otherwise ongoing with HMRC on the matter (such
that additional rentals paid may be rebated in due course if the
final tax position is not as determined by the lessor). The Teekay
Nakilat Joint Venture received initial indications from the lessor
in April 2018, which were confirmed on May 10, 2018, that the
lessor made a determination that additional rentals are due under
the leases. As a result, the Teekay Nakilat Joint Venture
recognized an additional tax indemnification guarantee liability of
$53.0 million for a total liability of $65.6 million (46.9 million
GBP) as at March 31, 2018, of which $3.0 million is included in
other (loss) income and foreign exchange gain (loss) for the three
months ended March 31, 2018 and $50.0 million is included in other
(loss) income for the three months ended December 31, 2017. The
Teekay Nakilat Joint Venture is in discussions with HMRC in
relation to the correct tax treatment to be applied to the leases
and with the lessor regarding the timing and amount of this
potential liability for additional rentals. |
|
|
|
(4) |
|
On
September 25, 2017, Teekay, Teekay Offshore and Brookfield
finalized a strategic partnership (or the Brookfield Transaction)
which resulted in the deconsolidation of Teekay Offshore as of that
date. On January 1, 2018, as a condition of the Brookfield
Transaction, Teekay Offshore acquired a 100% ownership interest in
seven subsidiaries (or the Transferred Subsidiaries) of Teekay
Corporation at carrying value. The Company recognized a loss on
sale of the Transferred Subsidiaries of $7.1 million, primarily as
a result of releasing the associated deferred pension loss from
accumulated other comprehensive income which is recorded in loss on
deconsolidation of Teekay Offshore on the Company's consolidated
statements of (loss) income for the three months ended
March 31, 2018. |
|
|
|
(5) |
|
Includes a
gain of $1.3 million for the three months ended December 31, 2017
from the sale of the Company's cost-accounted investment in the dry
bulk shipping company CVI Ocean Transportation II Inc., a company
developed in partnership with CarVal Investors in 2014. |
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
|
As at March 31, |
As at December 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
ASSETS |
|
Cash and
cash equivalents - Teekay Parent |
244,205 |
129,772 |
Cash and
cash equivalents - Teekay LNG |
197,007 |
244,241 |
Cash and
cash equivalents - Teekay Tankers |
47,962 |
71,439 |
Other
current assets |
283,819 |
305,525 |
Restricted
cash - Teekay Parent |
5 |
7,257 |
Restricted
cash - Teekay LNG |
86,288 |
95,194 |
Restricted
cash - Teekay Tankers |
3,924 |
4,271 |
Assets held
for sale |
28,000 |
33,671 |
Vessels and
equipment - Teekay Parent |
328,748 |
337,318 |
Vessels and
equipment - Teekay LNG |
2,602,182 |
2,461,219 |
Vessels and
equipment - Teekay Tankers |
1,942,139 |
1,965,514 |
Advances on
newbuilding contracts/conversions |
407,211 |
444,493 |
Investment
in equity-accounted investees |
1,129,297 |
1,130,198 |
Investment
in direct financing leases |
493,622 |
495,990 |
Other
assets |
238,057 |
229,631 |
Intangible
assets |
89,218 |
93,014 |
Goodwill |
43,690 |
43,690 |
Total Assets |
8,165,374 |
8,092,437 |
LIABILITIES AND EQUITY |
|
|
Accounts
payable and accrued liabilities and other |
256,996 |
320,339 |
Advances
from affiliates |
48,441 |
49,100 |
Current
portion of long-term debt - Teekay Parent |
— |
81,748 |
Current
portion of long-term debt - Teekay LNG |
606,818 |
659,350 |
Current
portion of long-term debt - Teekay Tankers |
160,737 |
173,972 |
Long-term
debt - Teekay Parent |
686,149 |
585,663 |
Long-term
debt - Teekay LNG |
2,254,138 |
2,150,191 |
Long-term
debt - Teekay Tankers |
931,609 |
927,238 |
Derivative
liabilities |
101,927 |
128,811 |
Other
long-term liabilities |
134,448 |
136,369 |
Equity: |
|
|
Non-controlling interests |
2,098,274 |
2,102,465 |
Shareholders of Teekay |
885,837 |
777,191 |
Total Liabilities and Equity |
8,165,374 |
8,092,437 |
|
|
|
Net debt -
Teekay Parent(1) |
441,939 |
530,382 |
Net debt -
Teekay LNG(1) |
2,577,661 |
2,470,106 |
Net debt - Teekay Tankers(1) |
1,040,460 |
1,025,500 |
(1) |
|
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, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents
and restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net (loss) income |
(9,980 |
) |
10,975 |
|
Depreciation and
amortization |
67,311 |
|
143,030 |
|
Amortization of
in-process revenue contracts |
(4,017 |
) |
(6,907 |
) |
Unrealized gain on
derivative instruments |
(37,309 |
) |
(16,405 |
) |
Loss on sale of
vessels |
5,662 |
|
4,427 |
|
Asset impairments |
13,000 |
|
— |
|
Equity income, net of
dividends received |
(26,369 |
) |
(10,347 |
) |
Income tax expense |
4,117 |
|
3,019 |
|
Loss on deconsolidation
of Teekay Offshore |
7,070 |
|
— |
|
Unrealized foreign
exchange loss and other |
33,714 |
|
21,566 |
|
Change in operating
assets and liabilities |
(11,635 |
) |
(32,588 |
) |
Expenditures for dry
docking |
(8,454 |
) |
(9,454 |
) |
Net operating cash flow |
33,110 |
|
107,316 |
|
|
|
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance
of long-term debt, net of issuance costs |
263,920 |
|
215,938 |
|
Prepayments of
long-term debt |
(237,824 |
) |
(78,782 |
) |
Scheduled repayments of
long-term debt |
(64,501 |
) |
(229,077 |
) |
Proceeds from financing
related to sales and leaseback of vessels |
126,273 |
|
220,825 |
|
Repayments of
obligations related to capital leases |
(15,246 |
) |
(13,485 |
) |
Net proceeds from
equity issuances of subsidiaries |
— |
|
8,843 |
|
Net proceeds from
equity issuances of Teekay Corporation |
103,696 |
|
|
Distributions paid from
subsidiaries to non-controlling interests |
(19,824 |
) |
(31,862 |
) |
Cash dividends
paid |
(5,514 |
) |
(4,737 |
) |
Other financing
activities |
(524 |
) |
(521 |
) |
Net financing cash flow |
150,456 |
|
87,142 |
|
|
|
|
INVESTING
ACTIVITIES |
|
|
Expenditures for
vessels and equipment |
(168,287 |
) |
(264,567 |
) |
Proceeds from sale of
vessels and equipment |
— |
|
53,206 |
|
Investment in
equity-accounted investments |
(19,604 |
) |
(13,535 |
) |
Advances to joint
ventures and joint venture partners |
(9 |
) |
(26,314 |
) |
Proceeds from sale of
equity-accounted investment |
54,438 |
|
|
Cash of transferred
subsidiaries on sale, net of proceeds received |
(25,254 |
) |
— |
|
Other investing
activities |
2,367 |
|
7,048 |
|
Net investing cash flow |
(156,349 |
) |
(244,162 |
) |
|
|
|
Increase
(decrease) in cash, cash equivalents and restricted
cash |
27,217 |
|
(49,704 |
) |
Cash, cash equivalents
and restricted cash, beginning of the period |
552,174 |
|
805,242 |
|
Cash, cash equivalents and restricted cash, end of the
period |
579,391 |
|
755,538 |
|
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, |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
$ Per |
|
$ Per |
|
$ Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
Net
(loss) income – GAAP basis |
(9,980 |
) |
|
(32,239 |
) |
|
10,975 |
|
|
Adjust for:
Net (income) loss attributable to |
|
|
|
|
|
|
non-controlling interests |
(10,575 |
) |
|
6,953 |
|
|
(56,231 |
) |
|
Net
loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(20,555 |
) |
(0.21 |
) |
(25,286 |
) |
(0.29 |
) |
(45,256 |
) |
(0.53 |
) |
Add
(subtract) specific items affecting net |
|
|
|
|
|
|
|
(loss) income
: |
|
|
|
|
|
|
|
Unrealized gains from
derivative instruments(2) |
(34,452 |
) |
(0.35 |
) |
(15,785 |
) |
(0.18 |
) |
(11,402 |
) |
(0.13 |
) |
|
Foreign exchange
(gains) losses (3) |
(1,399 |
) |
(0.01 |
) |
1,536 |
|
0.02 |
|
(3,509 |
) |
(0.04 |
) |
|
Net loss (gain) on sale
of vessels, equipment and other operating
assets(4) |
669 |
|
0.01 |
|
(1,935 |
) |
(0.02 |
) |
4,427 |
|
0.05 |
|
|
Asset
impairments(5) |
16,170 |
|
0.17 |
|
5,500 |
|
0.06 |
|
— |
|
— |
|
|
Restructuring charges
(recoveries)(6) |
2,138 |
|
0.02 |
|
(52 |
) |
— |
|
2,611 |
|
0.03 |
|
|
Tax indemnification
guarantee liability(7) |
600 |
|
0.01 |
|
50,000 |
|
0.57 |
|
— |
|
— |
|
|
Loss on deconsolidation
of Teekay Offshore(8) |
7,070 |
|
0.07 |
|
1,600 |
|
0.02 |
|
— |
|
— |
|
|
Other(9) |
5,050 |
|
0.04 |
|
5,694 |
|
0.07 |
|
579 |
|
0.01 |
|
|
Non-controlling interests’ share of items above(10) |
6,385 |
|
0.06 |
|
(30,772 |
) |
(0.36 |
) |
16,879 |
|
0.20 |
|
Total adjustments |
2,231 |
|
0.02 |
|
15,786 |
|
0.18 |
|
9,585 |
|
0.12 |
|
Adjusted net loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(18,324 |
) |
(0.19 |
) |
(9,500 |
) |
(0.11 |
) |
(35,671 |
) |
(0.41 |
) |
(1) |
|
Basic per
share amounts. |
(2) |
|
Reflects
the unrealized 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. |
(3) |
|
Foreign
currency exchange (gains) losses 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. |
(4) |
|
Also
includes the Company's proportionate share of net loss (gain) on
sale of vessels, equipment and other operating assets in
equity-accounted joint ventures for the three months ended March
31, 2018 and December 31, 2017 (refer to footnote (2) of the
summary consolidated statements of (loss) income included in this
release for further details). |
(5) |
|
Also
includes the Company's proportionate share of asset impairments in
the Company's investment in Teekay Offshore and in the Company's
equity-accounted joint ventures for the three months ended March
31, 2018 and December 31, 2017 (refer to footnote (2) of the
summary consolidated statements of (loss) income included in this
release for further details). |
(6) |
|
Also
includes the Company's proportionate share of restructuring costs
(recoveries) in an equity-accounted joint venture for the three
months ended March 31, 2017 and December 31, 2017. |
(7) |
|
Reflects an
additional tax indemnification guarantee liability in Teekay LNG's
70 percent-owned Teekay Nakilat Joint Venture for the three months
ended March 31, 2018 and December 31, 2017 (refer to footnote (3)
of the summary consolidated statements of (loss) income included in
this release for further details). |
(8) |
|
Refer to
footnote (4) of the summary consolidated statements of (loss)
income included in this release for further details. |
(9) |
|
Other
includes the Company's proportionate share of change to
depreciation expense, interest rate swap termination fees and a
decrease in the deferred income tax asset in the Company's
investment in Teekay Offshore for the three months ended March 31,
2018 (refer to footnote (2) of the summary consolidated statements
of (loss) income included in this release for further details).
Other also includes adjustments to deferred taxes relating to a
decrease in the valuation allowances related to certain Norwegian
entities for the three months ended March 31, 2018. Other also
includes a gain from the sale of one of the Company's
cost-accounted investments for the three months ended December 31,
2017 (refer to footnote (5) of the summary consolidated statements
of (loss) income included in this release for further
details). |
(10) |
|
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
EndedMarch 31, 2018(in thousands of
U.S. dollars)(unaudited)
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
Revenues |
115,306 |
|
168,465 |
|
117,914 |
|
(7,663 |
) |
394,022 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(5,801 |
) |
(79,993 |
) |
(258 |
) |
175 |
|
(85,877 |
) |
Vessel
operating expenses |
(28,467 |
) |
(52,995 |
) |
(75,993 |
) |
(480 |
) |
(157,935 |
) |
Time-charter hire expense |
— |
|
(4,683 |
) |
(22,707 |
) |
7,979 |
|
(19,411 |
) |
Depreciation and amortization |
(29,267 |
) |
(29,430 |
) |
(8,614 |
) |
— |
|
(67,311 |
) |
General and
administrative expenses |
(6,571 |
) |
(9,785 |
) |
(7,816 |
) |
(11 |
) |
(24,183 |
) |
Asset
impairments |
(13,000 |
) |
— |
|
— |
|
— |
|
(13,000 |
) |
Net loss on
sale of vessels, equipment and |
|
|
|
|
|
|
other operating
assets |
(5,662 |
) |
— |
|
— |
|
— |
|
(5,662 |
) |
Restructuring charges |
(1,396 |
) |
— |
|
(742 |
) |
— |
|
(2,138 |
) |
|
|
|
|
|
|
|
Income (loss) from vessel operations |
25,142 |
|
(8,421 |
) |
1,784 |
|
— |
|
18,505 |
|
|
|
|
|
|
|
Interest
expense |
(24,706 |
) |
(12,729 |
) |
(17,261 |
) |
71 |
|
(54,625 |
) |
Interest
income |
914 |
|
158 |
|
676 |
|
(71 |
) |
1,677 |
|
Realized
and unrealized gain (loss) |
|
|
|
|
|
|
on derivative
instruments |
8,001 |
|
3,013 |
|
(1,588 |
) |
— |
|
9,426 |
|
Equity
income |
26,724 |
|
694 |
|
(301 |
) |
— |
|
27,117 |
|
Equity in
earnings of subsidiaries(2) |
— |
|
— |
|
1,713 |
|
(1,713 |
) |
— |
|
Income tax
expense |
(779 |
) |
(1,878 |
) |
(1,460 |
) |
— |
|
(4,117 |
) |
Foreign
exchange (loss) gain |
(1,273 |
) |
(20 |
) |
3,714 |
|
(2,399 |
) |
22 |
|
Loss on
deconsolidation of Teekay Offshore |
|
|
(7,070 |
) |
|
(7,070 |
) |
Other (loss) income – net |
(2,582 |
) |
30 |
|
(762 |
) |
2,399 |
|
(915 |
) |
Net
income (loss) |
31,441 |
|
(19,153 |
) |
(20,555 |
) |
(1,713 |
) |
(9,980 |
) |
Less: Net
income attributable |
|
|
|
|
|
|
to
non-controlling interests(3) |
(3,335 |
) |
— |
|
— |
|
(7,240 |
) |
(10,575 |
) |
Net
income (loss) attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities |
28,106 |
|
(19,153 |
) |
(20,555 |
) |
(8,953 |
) |
(20,555 |
) |
(1) |
|
Consolidation Adjustments column includes adjustments which
eliminate transactions between subsidiaries (a) Teekay LNG and
Teekay Tankers and (b) Teekay Parent. |
(2) |
|
Teekay
Corporation’s proportionate share of the net earnings of its
publicly-traded subsidiaries. Refer to footnote (2) of the summary
consolidated statements of income (loss) included in this release
for further details. |
(3) |
|
Net income
attributable to non-controlling interests in the Teekay LNG column
represents the joint venture partners’ share of the net income or
loss 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, 2018(in thousands of U.S.
dollars)(unaudited)
|
|
|
|
Teekay |
|
|
|
Corporate |
Parent |
|
FPSOs |
Other(1) |
G&A |
Total |
|
|
|
|
|
Revenues |
65,970 |
|
51,944 |
|
— |
|
117,914 |
|
|
|
|
|
|
Voyage
expenses |
(172 |
) |
(86 |
) |
— |
|
(258 |
) |
Vessel
operating expenses |
(35,913 |
) |
(40,080 |
) |
— |
|
(75,993 |
) |
Time-charter hire expense |
(11,487 |
) |
(11,220 |
) |
— |
|
(22,707 |
) |
Depreciation and amortization |
(8,594 |
) |
(20 |
) |
— |
|
(8,614 |
) |
General and
administrative expenses |
(2,922 |
) |
753 |
|
(5,647 |
) |
(7,816 |
) |
Restructuring charges |
— |
|
(742 |
) |
— |
|
(742 |
) |
Income (loss) from vessel operations |
6,882 |
|
549 |
|
(5,647 |
) |
1,784 |
|
|
|
|
|
|
Reconciliation of income (loss) from vessel operations to
cash flow from vessel operations |
|
|
|
|
|
Income
(loss) from vessel operations |
6,882 |
|
549 |
|
(5,647 |
) |
1,784 |
|
Depreciation and amortization |
8,594 |
|
20 |
|
— |
|
8,614 |
|
Amortization of in-process revenue |
|
|
|
— |
|
contracts and other |
(1,938 |
) |
423 |
|
— |
|
(1,515 |
) |
CFVO - Consolidated(2) |
13,538 |
|
992 |
|
(5,647 |
) |
8,883 |
|
CFVO - Equity Investments(3) |
(336 |
) |
19,910 |
|
— |
|
19,574 |
|
CFVO - Total |
13,202 |
|
20,902 |
|
(5,647 |
) |
28,457 |
|
(1) |
|
Includes
the results of two chartered-in LNG carriers owned by Teekay LNG
and two chartered-in FSO units owned by Teekay Offshore. |
(2) |
|
In addition
to the CFVO generated by its directly owned and chartered-in
assets, Teekay Parent also receives cash dividends and
distributions from its consolidated publicly-traded subsidiaries,
Teekay LNG and Teekay Tankers, and for its equity-accounted
investment in Teekay Offshore. For the three months ended
March 31, 2018, Teekay Parent received cash distributions and
dividends from these entities totaling $4.3 million. The
distributions and dividends received by Teekay Parent include,
among others, those made with respect to its general partner
interests in Teekay Offshore and Teekay LNG. Please refer to
Appendix D this release for further details. |
(3) |
|
Please see
Appendix E to this release for a reconciliation of this non-GAAP
financial measure as used in this release to equity income (loss)
of equity accounted vessels, the most directly comparable GAAP
financial measure. |
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, |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY PARENT GPCO CASH FLOW |
|
|
|
Daughter Entities distributions to Teekay
Parent(1) |
|
|
|
|
Limited Partner
interests(2) |
|
|
|
|
Teekay LNG |
3,529 |
|
3,529 |
|
3,529 |
|
|
Teekay Offshore |
566 |
|
566 |
|
4,624 |
|
|
GP
interests |
|
|
|
|
Teekay LNG |
228 |
|
228 |
|
228 |
|
|
Teekay Offshore |
16 |
|
16 |
|
336 |
|
|
Other
Dividends |
|
|
|
|
Teekay Tankers(2)(3) |
— |
|
2,319 |
|
1,276 |
|
|
Teekay Offshore(4) |
— |
|
— |
|
683 |
|
Total
Daughter Entity Distributions |
4,339 |
|
6,658 |
|
10,676 |
|
Less: Corporate general and administrative
expenses |
(5,647 |
) |
(3,989 |
) |
(5,956 |
) |
Total Parent GPCO Cash Flow |
(1,308 |
) |
2,669 |
|
4,720 |
|
TEEKAY PARENT OPCO CASH FLOW |
|
|
|
Teekay Parent cash flow from vessel
operations(5) |
|
|
|
|
Conventional
Tankers(6) |
— |
|
(4,866 |
) |
(2,459 |
) |
|
FPSOs |
13,538 |
|
13,085 |
|
(4,830 |
) |
|
Other(7) |
992 |
|
4,893 |
|
(6,040 |
) |
Teekay Parent OPCO Cash Flow(8) |
14,530 |
|
13,112 |
|
(13,329 |
) |
Teekay Parent Adjusted Cash Flow from Vessel
Operations |
13,222 |
|
15,781 |
|
(8,609 |
) |
Less:
Net interest expense(9) |
(16,434 |
) |
(16,502 |
) |
(12,362 |
) |
TOTAL TEEKAY PARENT FREE CASH
FLOW |
(3,212 |
) |
(721 |
) |
(20,971 |
) |
Weighted-average number of common shares
- Basic |
97,333,503 |
|
86,641,584 |
|
86,183,831 |
|
(1) |
|
Daughter
Entities dividends and distributions for a given quarter consists
of the amount of dividends and distributions (including
payments-in-kind) relating to such quarter but received by Teekay
Parent in the following quarter. The limited partner and general
partner distributions received from Teekay Offshore for the quarter
ended March 31, 2017 were paid-in-kind in the form of new Teekay
Offshore common units. |
(2) |
|
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, |
|
|
2018 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Teekay
LNG |
|
|
|
|
|
|
Distribution per
common unit |
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
|
Common units
owned by |
|
|
|
|
|
|
Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
Total
distribution |
$ |
3,529,158 |
|
$ |
3,529,158 |
|
$ |
3,529,158 |
|
Teekay
Offshore |
|
|
|
|
|
|
Distribution per
common unit |
$ |
0.01 |
|
$ |
0.01 |
|
$ |
0.11 |
|
Common units
owned by |
|
|
|
|
|
|
Teekay Parent |
|
56,587,484 |
|
|
56,587,484 |
|
|
42,037,728 |
|
Total
distribution |
$ |
565,875 |
|
$ |
565,875 |
|
$ |
4,624,150 |
|
Teekay
Tankers |
|
|
|
|
|
|
Dividend per
share |
$ |
— |
|
$ |
0.03 |
|
$ |
0.03 |
|
Shares owned by Teekay Parent(3) |
|
77,298,441 |
|
|
77,298,441 |
|
|
42,542,403 |
|
Total
dividend |
$ |
— |
|
$ |
2,318,953 |
|
$ |
1,276,272 |
|
(3) |
|
Includes
Class A and Class B shareholdings. Teekay Tankers' 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 Board approval. Commencing with the dividend
for the first quarter of 2018, Teekay Tankers' Board eliminated the
minimum quarter dividend; however, the variable portion of the
dividend policy was maintained. |
(4) |
|
Includes
distributions from Teekay Parent's interest in Teekay Offshore's
10.5% Series D Preferred Units acquired in June 2016. The
distributions received for the quarter ended March 31, 2017 were
paid-in-kind in the form of new Teekay Offshore common units. All
outstanding Series D Preferred Units were repurchased by Teekay
Offshore in September 2017 as part of the Brookfield
Transaction. |
(5) |
|
Please
refer to Appendices C and E for additional financial information on
Teekay Parent’s cash flow from vessel operations. |
(6) |
|
Includes
early termination fees totaling $1.6 million paid to the owners in
the three months ended December 31, 2017 related to the termination
of two bareboat contracts. Includes an early termination fee paid
to Teekay Offshore of $4.0 million for the year ended December 31,
2016 related to the early termination of the in-charter contract on
the Kilimanjaro Spirit conventional tanker. |
(7) |
|
Includes
$0.9 million for the three months ended March 31, 2017 relating to
50 percent of the CFVO from Teekay Tanker Operations Ltd. (TTOL).
Teekay Parent owned 50 percent of TTOL for the period up to May 31,
2017, when Teekay Tankers purchased the remaining 50 percent of
TTOL from Teekay Parent. |
(8) |
|
Excludes
corporate general and administrative expenses relating to Teekay
Parent GPCO Cash Flow. |
(9) |
|
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 MeasuresCash
Flow from Vessel Operations - Consolidated(in thousands of
U.S. dollars)
|
|
Three Months Ended |
|
|
March 31, |
December 31, |
March 31, |
|
|
2018 |
2017 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Income from
vessel operations |
18,505 |
|
66,655 |
|
81,605 |
|
Depreciation and amortization |
67,311 |
|
63,116 |
|
143,030 |
|
Amortization of in-process revenue contracts and other |
(2,469 |
) |
(3,655 |
) |
(5,715 |
) |
Realized
(losses) gains from the settlements of non-designated |
|
|
|
|
derivative
instruments |
— |
|
(45 |
) |
426 |
|
Asset
impairment |
13,000 |
|
— |
|
— |
|
Net loss on
sale of vessels, equipment and other operating assets |
5,662 |
|
489 |
|
4,427 |
|
Cash flow
from time-charter contracts, net of revenue accounted for |
|
|
|
|
as direct
finance leases |
2,887 |
|
2,142 |
|
7,015 |
|
CFVO - Consolidated |
104,896 |
|
128,702 |
|
230,788 |
|
CFVO - Equity Investments (see Appendix
E) |
63,468 |
|
54,884 |
|
44,188 |
|
CFVO – Total |
168,364 |
|
183,586 |
|
274,976 |
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresCash
Flow from Vessel Operations – Equity-Accounted Vessels(in
thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
March 31, 2018 |
December 31, 2017 |
March 31, 2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion |
100% |
Portion(2) |
|
|
|
|
|
|
|
|
Revenues |
466,765 |
|
111,857 |
|
443,685 |
|
105,986 |
|
180,086 |
|
73,260 |
|
Vessel and
other operating expenses |
(235,911 |
) |
(52,053 |
) |
(230,168 |
) |
(54,027 |
) |
(76,600 |
) |
(31,388 |
) |
Depreciation and amortization |
(125,756 |
) |
(27,181 |
) |
(125,368 |
) |
(28,329 |
) |
(40,395 |
) |
(17,524 |
) |
Asset
impairments |
(24,979 |
) |
(3,518 |
) |
(10,852 |
) |
(5,479 |
) |
— |
|
— |
|
Loss on sale of vessels |
(514 |
) |
(257 |
) |
— |
|
— |
|
— |
|
— |
|
Income from
vessel operations of |
|
|
|
|
|
|
|
equity-accounted
vessels |
79,605 |
|
28,848 |
|
77,297 |
|
18,151 |
|
63,091 |
|
24,348 |
|
Interest
expense |
(75,131 |
) |
(20,841 |
) |
(73,187 |
) |
(18,909 |
) |
(28,026 |
) |
(11,786 |
) |
Realized
and unrealized gain (loss) |
|
|
|
|
|
|
|
on derivative
instruments |
65,980 |
|
14,588 |
|
9,494 |
|
2,563 |
|
(1,357 |
) |
(463 |
) |
Gain on
sale of equity-accounted |
|
|
|
|
|
|
|
investment(3) |
— |
|
5,563 |
|
— |
|
— |
|
— |
|
— |
|
Other – net |
1,843 |
|
(1,041 |
) |
(12,156 |
) |
(2,776 |
) |
(3,638 |
) |
(1,752 |
) |
Equity income (loss) of equity- accounted
vessels |
72,297 |
|
27,117 |
|
1,448 |
|
(971 |
) |
30,070 |
|
10,347 |
|
Income from
vessel operations of |
|
|
|
|
|
|
|
equity-accounted
vessels |
79,605 |
|
28,848 |
|
77,297 |
|
18,151 |
|
63,091 |
|
24,348 |
|
Depreciation and amortization |
125,756 |
|
27,181 |
|
125,368 |
|
28,329 |
|
40,395 |
|
17,524 |
|
Asset
impairments |
24,979 |
|
3,518 |
|
10,852 |
|
5,479 |
|
— |
|
— |
|
Loss on
sale of vessels |
514 |
|
257 |
|
— |
|
— |
|
— |
|
— |
|
Realized
gains from the settlement |
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
forward contracts |
431 |
|
61 |
|
490 |
|
69 |
|
— |
|
— |
|
Cash flow
from time-charter contracts, |
|
|
|
|
|
|
|
net of revenue
accounted for as |
|
|
|
|
|
|
|
direct finance
leases |
13,773 |
|
4,665 |
|
11,914 |
|
3,984 |
|
9,476 |
|
3,421 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
contracts
and other |
(6,190 |
) |
(1,062 |
) |
(5,991 |
) |
(1,128 |
) |
(2,541 |
) |
(1,105 |
) |
Cash flow from vessel operations |
|
|
|
|
|
|
|
of equity-accounted vessels(4) |
238,868 |
|
63,468 |
|
219,930 |
|
54,884 |
|
110,421 |
|
44,188 |
|
(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) |
|
On May 31,
2017, Teekay Tankers acquired from Teekay Parent the remaining 50%
interest in TTOL. As a result of the acquisition, the financial
information for Teekay Tankers prior to the date that Teekay
Tankers acquired interests in TTOL are retroactively adjusted to
include the results of TTOL during the periods they were under
common control of Teekay and had begun operations. As a result,
TTOL's results are no longer included in this table. |
(3) |
|
On January
31, 2018, Teekay LNG sold its 50% ownership interest in the
Excelsior Joint Venture, which resulted in gain of $5.6 million for
the three months ended March 31, 2018. |
(4) |
|
CFVO from
equity-accounted vessels represents the Company’s proportionate
share of CFVO from its equity-accounted vessels and other
investments. |
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresCash
Flow from Vessel Operations - Teekay Parent(in thousands
of U.S. dollars)
|
|
Three Months Ended December 31,
2017 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent (loss) income from |
|
|
|
|
|
|
|
|
|
|
vessel operations |
|
(4,866 |
) |
|
6,228 |
|
|
4,082 |
|
(3,989 |
) |
|
1,455 |
|
Depreciation and amortization |
|
— |
|
|
8,601 |
|
|
35 |
|
— |
|
|
8,636 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
|
|
|
contracts and
other |
|
— |
|
|
(1,773 |
) |
|
776 |
|
— |
|
|
(997 |
) |
Realized
gains from the settlements |
|
|
|
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
|
|
|
derivative instruments |
|
— |
|
|
29 |
|
|
— |
|
— |
|
|
29 |
|
Cash flow from vessel |
|
|
|
|
|
|
|
|
|
|
operations – Teekay Parent |
|
(4,866 |
) |
|
13,085 |
|
|
4,893 |
|
(3,989 |
) |
|
9,123 |
|
|
|
Three Months Ended March 31,
2017 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent loss from |
|
|
|
|
|
|
|
|
|
|
vessel operations |
|
(2,459 |
) |
|
(20,411 |
) |
|
(5,981 |
) |
(5,956 |
) |
|
(34,807 |
) |
Depreciation and amortization |
|
— |
|
|
17,319 |
|
|
(44 |
) |
— |
|
|
17,275 |
|
Amortization of in-process |
|
|
|
|
|
|
|
|
|
|
revenue contracts and
other |
|
— |
|
|
(1,484 |
) |
|
(15 |
) |
— |
|
|
(1,499 |
) |
Realized
losses from the settlements |
|
|
|
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
|
|
|
derivative instruments |
|
— |
|
|
(254 |
) |
|
— |
|
— |
|
|
(254 |
) |
Cash flow from vessel |
|
|
|
|
|
|
|
|
|
|
operations – Teekay Parent |
|
(2,459 |
) |
|
(4,830 |
) |
|
(6,040 |
) |
(5,956 |
) |
|
(19,285 |
) |
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, |
|
|
|
2018 |
2017 |
2017 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
Interest
expense |
(54,625 |
) |
(49,163 |
) |
(70,355 |
) |
Interest income |
1,677 |
|
1,373 |
|
1,481 |
|
Interest
expense net of interest income consolidated |
(52,948 |
) |
(47,790 |
) |
(68,874 |
) |
Less:
Non-Teekay Parent interest expense net of |
|
|
|
|
interest income and adjustment |
(36,363 |
) |
(31,903 |
) |
(57,282 |
) |
Interest
expense net of interest income - Teekay Parent |
(16,585 |
) |
(15,887 |
) |
(11,592 |
) |
Less:
Teekay Parent non-cash accretion on convertible bond |
673 |
|
— |
|
— |
|
Add: Teekay Parent realized losses on interest rate
swaps |
(522 |
) |
(615 |
) |
(770 |
) |
Net interest expense - Teekay
Parent |
(16,434 |
) |
(16,502 |
) |
(12,362 |
) |
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: the benefit to
the Company’s future financial results and balance sheet from the
delivery of the remaining offshore and LNG projects over the next
few years; LNG, offshore and crude oil tanker market fundamentals,
including demand for our services; the ability of the Company’s
businesses to benefit from the recovery of such markets; the cash
flow impact from Teekay Parent’s FPSOs, including the impact on the
Company’s balance sheet; the strategic options available for Teekay
Parent’s FPSO units, including a potential sale of the FPSO units;
the timing and cost of delivery and start-up of various
newbuildings and conversion/upgrade projects and the commencement
of related contracts; potential tax indemnification liabilities
relating to the Teekay Nakilat Joint Venture; the impact of Teekay
Tankers’ expected sale-leaseback financing transaction on its
liquidity and future debt maturity profile; the expected cash flow
from vessel operations relating to the employment of the Petrojarl
I FPSO unit on the Atlanta field; the expected duration of the
mobilization and field installation services to be performed by the
ALP Maritime vessels for the Kaombo Norte FPSO; and the
possibility of liquidated damages relating to project delays
associated with Petrojarl I FPSO unit; the extension of the Arendal
Spirit UMS loan facility;. 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:
changes in exploration, production and storage of offshore oil and
gas, either generally or in particular regions that would impact
expected future growth, particularly in or related to North Sea,
Brazil and East Coast of Canada offshore fields; 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; variations in expected
levels of field maintenance; increased operating expenses;
potential project delays or cancellations; vessel conversion and
upgrade delays, newbuilding or conversion specification changes,
cost overruns, or shipyard disputes; changes in applicable industry
laws and regulations and the timing of implementation of new laws
and regulations; 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; the Daughter Entities’ ability to
secure or draw on financings for its vessels; the result of
discussions and any negotiations relating to the potential sale of
FPSO units by Teekay Parent; the effects on the Teekay Nakilat
Joint Venture of decision on tax indemnification liabilities and
determinations of the lessor under the RasGas II LNG carrier
leases; and other factors discussed in Teekay’s filings from time
to time with the SEC, including its Report on Form 20-F for the
fiscal year ended December 31, 2017. 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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