Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the quarter ended September 30, 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 all remaining subsidiaries and
equity-accounted investments. Teekay, together with its
subsidiaries other than the Daughter Entities, is referred to in
this release as Teekay Parent. Please refer to the third
quarter 2019 earnings releases of Teekay LNG and Teekay Tankers,
which are available on Teekay's website at www.teekay.com, for
additional information on their respective results.
Financial Summary
| |
|
Three Months
Ended |
| |
September
30, |
June
30, |
September
30, |
| |
2019 |
2019 |
2018 |
| (in thousands of U.S. dollars, except
per share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
| TEEKAY CORPORATION
CONSOLIDATED |
|
|
| GAAP FINANCIAL COMPARISON |
|
|
|
|
Revenues |
420,696 |
|
457,667 |
|
416,562 |
|
| (Loss) income from
vessel operations |
(130,389 |
) |
71,463 |
|
55,082 |
|
| Equity income
(loss) |
21,514 |
|
(6,284 |
) |
13,744 |
|
| Net loss
attributable to shareholders of Teekay |
(198,178 |
) |
(39,485 |
) |
(12,005 |
) |
| Loss per share attributable to shareholders of
Teekay |
(1.97 |
) |
(0.39 |
) |
(0.12 |
) |
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Total Adjusted EBITDA(1) (2) |
192,880 |
|
196,609 |
|
196,397 |
|
| Adjusted Net Loss attributable to shareholders of
Teekay(1) |
(24,070 |
) |
(13,368 |
) |
(11,378 |
) |
| Adjusted Net Loss per share attributable to
shareholders of Teekay(1) |
(0.24 |
) |
(0.13 |
) |
(0.11 |
) |
| TEEKAY PARENT |
|
|
|
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Teekay Parent
Adjusted EBITDA(1) |
(10,068 |
) |
3,427 |
|
19,818 |
|
| Total Teekay
Parent Free Cash Flow (1) |
(18,782 |
) |
(6,427 |
) |
4,841 |
|
(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 Adjusted EBITDA in the third quarter
of 2018 included $20.3 million related to the Company's ownership
interest in Teekay Offshore Partners L.P. (Teekay Offshore)
(NYSE:TOO), which was sold in the second quarter of 2019.
CEO Commentary
“Our Total Adjusted EBITDA for the third quarter
of 2019 increased approximately $17 million, or 10 percent, from
the same period of the prior year, excluding the 2018 contribution
related to our equity interest in Teekay Offshore, which we
disposed of in May 2019. This increase was primarily due to Teekay
LNG’s higher cash flows resulting from vessel deliveries and LNG
carriers commencing new contracts at higher rates, partially offset
by Teekay Parent’s lower cash flows due to scheduled maintenance
shutdowns on all three of our FPSO units,” commented Kenneth Hvid,
Teekay’s President and CEO. “Looking ahead into the fourth quarter
and into 2020, we expect our results to further improve now that
production on all of Teekay Parent’s FPSO units has recommenced
following the completion of their planned maintenance shutdowns. In
addition, we expect stronger earnings from both of our Daughter
Entities in the fourth quarter of 2019, driven at Teekay LNG by the
deliveries of the final vessels in the Partnership’s newbuilding
program and at Teekay Tankers by the significant strengthening of
spot tanker rates in the fourth quarter of 2019.”
“During October 2019, we successfully secured a
new charter contract through March 2023 for the Hummingbird Spirit
FPSO unit, extending its production in the Chestnut field in the
North Sea where it has been since 2008,” commented Mr. Hvid. "We
remain focused on contracting out and ultimately divesting our
remaining offshore assets, which we consider to be non-core. As a
result of recent discussions with existing charterers and potential
buyers of the FPSO units, we recorded an accounting impairment on
two of our FPSO units totalling $175 million, which was recognized
during the third quarter of 2019.”
Commenting on the capital allocation strategies
of the two Daughter Entities, Mr. Hvid said, “Teekay LNG, which has
almost $10 billion of contracted forward fee-based revenues and a
clear path to reaching its targeted leverage range, continues to
execute on its balanced capital allocation strategy. Today, Teekay
LNG announced its intention to increase its 2020 cash distributions
by 32 percent commencing with the distribution relating to the
first quarter of 2020, surpassing 30 percent growth for the second
consecutive year, while also having opportunistically repurchased
its common units at prices below its estimated intrinsic value.
Teekay Tankers, which has more exposure to market cyclicality and
high financial leverage, has decided to transition away from its
current earnings-based formulaic dividend policy in order to
allocate its growing cash flows towards reducing financial
leverage, which it expects will further build net asset value and
reduce its cost of capital. We believe these prudent capital
allocation strategies will maximize the creation of shareholder
value at each of the Daughter Entities, enabling them to build
equity value, lead to a lower cost of capital, and position them
well strategically throughout the cycle.”
“We look forward to presenting at our Teekay
Group investor and analyst meeting tomorrow morning starting at
8:30 am in New York.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended September 30, 2019 decreased compared to the same
period of the prior year, primarily due to planned maintenance
shutdowns on all three of Teekay Parent's directly-owned floating
production, storage and offloading (FPSO) units during the third
quarter of 2019, and lower earnings in Teekay Tankers primarily as
a result of more scheduled dry dockings in the third quarter of
2019 and the expiration of fixed-rate time charter-out contracts at
higher rates, partially offset by higher spot tanker rates in the
third quarter of 2019.
These decreases were partially offset by higher
earnings in Teekay LNG due to the delivery and contract
commencement of several newbuildings during the past year, as well
as higher revenues earned from certain existing LNG carriers and
multi-gas vessels.
In addition, consolidated GAAP net loss was
negatively impacted in the three months ended September 30, 2019,
compared to the same quarter of the prior year, by a $175.0 million
write-down of two FPSO units. Teekay Parent made changes to its
expected cash flows from the two FPSO units based on recent
discussions with potential buyers about the possible sale of the
units and with existing charterers about contract extensions. This
led to the write-down of one unit to its estimated fair value,
based on the expected sales price, and a write-down of the other
unit to its estimated fair value, using a discounted cash flow
approach based on the terms of the existing contract and
expectations about future contract extensions and potential sale of
the unit.
Total adjusted EBITDA(1) in the third quarter of
2018 included $20.3 million related to Teekay Parent's ownership
interest in Teekay Offshore, which was sold in the second quarter
of 2019.
Teekay Parent
Total Teekay Parent Free Cash Flow(1) was
negative $18.8 million during the third quarter of 2019, compared
to positive $4.8 million for the same period of the prior year
primarily due to: lower revenues from the Banff FPSO unit due to
lower oil price and production and a planned maintenance shutdown
in the third quarter of 2019; lower revenues and higher maintenance
costs for the Foinaven FPSO unit due to a planned maintenance
shutdown in the third quarter of 2019; lower revenues from the
Hummingbird Spirit FPSO unit due to lower contractual production
tariffs linked to oil prices in the third quarter of 2019; and,
lower cash distributions from Teekay Offshore as Teekay Parent
disposed of its interests in Teekay Offshore in the second quarter
of 2019. These decreases were partially offset by a 36
percent increase in Teekay LNG’s quarterly cash distribution
commencing in the first quarter of 2019, lower corporate general
and administrative expenses incurred in 2019, and lower net
interest expense(1) due to the repurchase of 2020 bonds over the
past year and the 2020 bond refinancing completed in May 2019.
Please refer to Appendix D of this release for additional
information about Teekay Parent's Free Cash Flow(1).
In addition, consolidated GAAP net income was
negatively impacted in the three months ended September 30,
2019, compared to the same quarter of the prior year, by various
items, including the $175.0 million write-down of two of Teekay
Parent's FPSO units, as described in the Teekay Corporation
Consolidated section above.
(1) This is a non-GAAP financial measure.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for a definition of this term and a
reconciliation of this non-GAAP financial measure 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 adjusted net income and total
adjusted EBITDA(1) for the three months ended September 30, 2019,
compared to the same quarter of the prior year, were positively
impacted by: the deliveries of four wholly-owned LNG carrier
newbuildings (the Megara, Bahrain Spirit, Sean Spirit and Yamal
Spirit) between July 2018 and January 2019; higher earnings from
the Magellan Spirit, which has been chartered-in from Teekay LNG’s
52 percent-owned joint venture with Marubeni Corporation (MALT
Joint Venture) commencing in September 2018; higher earnings from
the Torben Spirit LNG carrier upon redeployment in December 2018 at
a higher charter rate; higher spot revenues for seven multi-gas
carriers during the third quarter of 2019; the deliveries of three
Yamal Joint Venture ARC7 LNG carrier newbuildings between September
2018 and August 2019; the deliveries of two joint venture LNG
carrier newbuildings between July 2018 and January 2019; and higher
earnings in the MALT Joint Venture from commencement of the Arwa
Spirit and Marib Spirit one-year charter contracts at higher rates
in June and July 2019, respectively, and recognition of drydock
hire revenue for the Meridian Spirit.
These increases were partially offset by an
increase in off-hire days in the third quarter of 2019 for the
Madrid Spirit due to a scheduled dry docking and repairs.
In addition, GAAP net income attributable to the
partners and preferred unitholders was negatively impacted in the
three months ended September 30, 2019, compared to the same
quarter of the prior year, by various items, including unrealized
losses on non-designated derivative instruments in the third
quarter of 2019 compared to gains on non-designated derivative
instruments in the third quarter of 2018, partially offset by a
decrease in the write-down of vessels.
Teekay LNG also announced today increased and
tightened 2019 earnings and cash flow guidance ranges and higher
2020 earnings and cash flow guidance ranges.
Please refer to Teekay LNG's third quarter 2019
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' net loss for the three months
ended September 30, 2019 increased compared to the same period of
the prior year, primarily due to more scheduled dry dockings in the
third quarter of 2019 and the expiration of fixed-rate time
charter-out contracts that had higher rates, partially offset by
higher average spot tanker rates in the third quarter of 2019.
For the fourth quarter of 2019, Teekay Tankers
has so far secured spot tanker rates for its Suezmax, Aframax and
LR2 Product tankers of $38,000 per day, $30,500 per day and $25,200
per day based on 52 percent, 43 percent and 41 percent of the
available fourth quarter days fixed to-date, respectively, compared
to $16,300 per day, $14,900 per day and $14,700 per day in the
third quarter of 2019, respectively.
(1) This is a non-GAAP financial measure.
Please refer to “Definitions and Non-GAAP Financial Measures” and
the Appendices to this release for a definition of this term and a
reconciliation of this non-GAAP financial measure as used in this
release to the most directly comparable financial measures under
United States GAAP.
Summary of Recent Events
Teekay Parent
In October 2019, Teekay Parent entered into an
agreement with the Chestnut Joint Venture, a joint venture between
Spirit Energy Ltd. and Dana Petroleum Ltd., to extend the
employment of the Hummingbird Spirit FPSO unit on the
Chestnut field in the North Sea under a new 3.5-year contract out
to March 2023. This contract extension was done in conjunction with
the Chestnut Joint Venture's plan to drill a new well at the
Chestnut field. The amended contract, which took effect on
October 1, 2019, provides for a fixed charter rate instead of the
previous fixed charter rate plus oil production/price tariff.
Teekay LNG
In December 2018, the board of directors of
Teekay LNG's general partner approved a $100 million common unit
repurchase program. Since that time, Teekay LNG has repurchased a
total of 2.26 million common units, or approximately 2.8 percent of
the common units outstanding immediately prior to commencement of
the program, for a total cost of $28.9 million, representing an
average repurchase price of $12.78 per unit. Since
early-August 2019, Teekay LNG repurchased 816,672 units at an
average price of $14.33 per unit, for a total cost of $11.7
million.
In August and November 2019, Teekay LNG took
delivery of the fourth and fifth 50 percent-owned ARC7 LNG carrier
newbuildings, respectively, the Vladimir Voronin and Georgiy
Ushakov, which immediately commenced their 26-year charter
contracts servicing the Yamal LNG project.
On September 25, 2019, the United States
Government, by an Executive Order of the Department of the
Treasury’s Office of Foreign Assets Control (OFAC), imposed
sanctions on COSCO Shipping Tanker (Dalian) Co., Ltd. (COSCO
Dalian). At the time, COSCO Dalian owned 50 percent of China
LNG Shipping (Holdings) Limited (CLNG). CLNG was not listed
on the OFAC Order as a Specially Designated National or involved in
any sanctioned activity, but by virtue of being 50 percent-owned by
COSCO Dalian at the time, CLNG was designated as a “Blocked Person”
under OFAC's deeming rules. CLNG, in turn, owns a 50 percent
interest in Teekay LNG’s Yamal LNG joint venture (the Yamal LNG
Joint Venture), which owns five on-the-water ARC7 LNG carriers and
one ARC7 LNG carrier newbuilding under construction. As a
result of CLNG’s 50 percent interest, the Yamal LNG Joint Venture
at the time also qualified as a “Blocked Person" under OFAC's
deeming rules.
On October 21, 2019, the COSCO group completed
an ownership restructuring on arms'-length terms pursuant to which
its 50 percent interest in CLNG was transferred from COSCO Dalian
to a non-sanctioned COSCO entity, which automatically resulted in
CLNG and the Yamal LNG Joint Venture no longer being classified as
a “Blocked Person” under OFAC's deeming rules. Teekay LNG does not
expect any material impact to it from these resolved issues.
Teekay Tankers
In October 2019, Teekay Tankers entered into
one-year time charter-out contracts for three Suezmax tankers at an
average rate of approximately $37,500 per day, two of which
commenced in mid-October 2019 and one in early-November 2019.
In November 2019, Teekay Tankers decided to
transition away from its previous formulaic, variable dividend
policy, which was based on a payout of 30 to 50 percent of its
quarterly adjusted net income, to primarily focus on building net
asset value through balance sheet delevering and, as a result
seeking to reduce its cost of capital. As Teekay Tankers’ balance
sheet delevers, Teekay Tankers believes that it will ultimately
have greater financial flexibility to allocate capital towards a
variety of uses, including returning capital to shareholders
through dividends and/or share repurchases and potential vessel
acquisitions at attractive times in the tanker cycle.
In November 2019, Teekay Tankers signed a term
sheet to refinance 36 vessels with a new five-year, $595 million
revolving credit facility. Upon completion, the facility is
expected to replace three of Teekay Tankers’ existing loan
facilities that currently have an aggregate availability of $510
million, of which $495 million was drawn as of September 30, 2019.
The new facility, which is expected to have substantially similar
terms as these three facilities and to extend balloon maturities
from 2020/2021 until late-2024, is expected to be completed in
December 2019.
Liquidity
As at September 30, 2019, Teekay Parent had
total liquidity of approximately $182.8 million (consisting of
$73.8 million of cash and cash equivalents and $109.0 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity of approximately $607.0
million (consisting of $293.4 million of cash and cash equivalents
and $313.6 million of undrawn revolving credit facilities and the
undrawn portion of a loan, which is determined based on certain
borrowing criteria, to finance Teekay Tankers' pool management
operations).
Investor and Analyst
Meeting
Teekay, Teekay LNG and Teekay Tankers plan to
host an investor and analyst meeting on Thursday, November 14, 2019
at 8:30 a.m. (ET) with presentations from the senior leadership of
Teekay, Teekay LNG and Teekay Tankers. Access to a live
webcast of the presentations will be available to the public in
advance of the event on Teekay’s website,
www.teekay.com. Please allow extra time prior to the
presentation to visit the site and download the necessary software
required to listen to the internet broadcast. A recording of
the webcast will be archived on the same website following the live
presentations.
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 $12 billion, comprised of approximately
150 liquefied gas, offshore, and conventional tanker assets. With
offices in 12 countries and approximately 5,700 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 Securities and Exchange Commission (SEC). These non-GAAP
financial measures, which include, Adjusted Net Loss Attributable
to Shareholders of Teekay, 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 substitutes 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 2018 and 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, Company reporting in its SEC Annual Report on
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
Total 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 (losses) on derivative instruments, realized
losses on interest rate swaps, realized losses on interest rate
swap amendments and terminations, loss on deconsolidation of Teekay
Offshore, write-downs 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. Total Adjusted EBITDA represents Consolidated
Adjusted EBITDA plus Adjusted EBITDA from Equity-Accounted Joint
Ventures. 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
prior to it being sold in May 2019, 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 (excluding
the amortization of prepaid loan costs), 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 |
Nine Months Ended |
|
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|
|
2019 |
2019 |
2018 |
2019 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| |
| Revenues |
420,696 |
|
457,667 |
|
416,562 |
|
1,359,576 |
|
1,216,226 |
|
| |
|
|
|
|
|
| Voyage expenses |
(92,689 |
) |
(98,680 |
) |
(90,899 |
) |
(294,492 |
) |
(271,688 |
) |
| Vessel operating expenses |
(159,616 |
) |
(162,621 |
) |
(155,985 |
) |
(479,229 |
) |
(475,207 |
) |
| Time-charter hire expense |
(28,932 |
) |
(28,817 |
) |
(20,965 |
) |
(87,587 |
) |
(61,024 |
) |
| Depreciation and
amortization |
(73,633 |
) |
(73,849 |
) |
(69,967 |
) |
(219,589 |
) |
(205,238 |
) |
| General and administrative
expenses |
(20,016 |
) |
(20,868 |
) |
(20,650 |
) |
(63,856 |
) |
(69,803 |
) |
| Write-down and loss on sales
of vessels (1) |
(175,785 |
) |
— |
|
(2,201 |
) |
(179,113 |
) |
(53,693 |
) |
| Restructuring charges |
(414 |
) |
(1,369 |
) |
(813 |
) |
(10,404 |
) |
(4,065 |
) |
|
(Loss) income from vessel operations |
(130,389 |
) |
71,463 |
|
55,082 |
|
25,306 |
|
75,508 |
|
| |
|
|
|
|
|
| Interest expense |
(67,707 |
) |
(70,205 |
) |
(67,343 |
) |
(211,583 |
) |
(181,494 |
) |
| Interest income |
1,485 |
|
2,233 |
|
2,103 |
|
6,407 |
|
5,875 |
|
| Realized and unrealized
(losses) gains on |
|
|
|
|
|
| non-designated
derivative instruments (2) |
(1,924 |
) |
(10,964 |
) |
(2,168 |
) |
(18,311 |
) |
17,981 |
|
| Equity income (loss) (3) |
21,514 |
|
(6,284 |
) |
13,744 |
|
(46,423 |
) |
41,698 |
|
| Income tax expense |
(3,091 |
) |
(3,404 |
) |
(4,334 |
) |
(11,531 |
) |
(17,197 |
) |
| Foreign exchange gain
(loss) |
5,628 |
|
(5,851 |
) |
3,553 |
|
(2,853 |
) |
16,104 |
|
| Loss on deconsolidation of
Teekay Offshore |
— |
|
— |
|
— |
|
— |
|
(7,070 |
) |
| Other
loss – net (4) |
(1,424 |
) |
(11,099 |
) |
(2,400 |
) |
(12,495 |
) |
(2,795 |
) |
| Net loss |
(175,908 |
) |
(34,111 |
) |
(1,763 |
) |
(271,483 |
) |
(51,390 |
) |
| Net loss attributable to |
|
|
|
|
|
| non-controlling
interests |
(22,270 |
) |
(5,374 |
) |
(10,242 |
) |
(50,437 |
) |
(9,494 |
) |
|
Net loss attributable to the shareholders of |
|
|
|
|
|
|
Teekay Corporation |
(198,178 |
) |
(39,485 |
) |
(12,005 |
) |
(321,920 |
) |
(60,884 |
) |
| Loss per common share of
Teekay Corporation |
|
|
|
|
|
|
- Basic and diluted |
$ |
(1.97 |
) |
$ |
(0.39 |
) |
$ |
(0.12 |
) |
$ |
(3.20 |
) |
$ |
(0.61 |
) |
| Weighted-average number of
common |
|
|
|
|
|
| shares
outstanding |
|
|
|
|
|
| - Basic and
diluted |
100,784,683 |
|
100,783,496 |
|
100,435,045 |
|
100,697,251 |
|
99,412,381 |
|
(1) Write-down and loss on sales of vessels for
the three and nine months ended September 30, 2019 includes $175.0
million relating to the write-down of two FPSO units owned by
Teekay Parent that occurred in the third quarter of 2019. Please
refer to Summary of Results - Teekay Corporation Consolidated in
this release for more details.
(2) Realized and unrealized (losses) gains
related to derivative instruments that are not designated in
qualifying hedging relationships 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 |
Nine Months
Ended |
| |
|
September 30, |
June 30, |
September 30, |
September 30, |
June 30, |
| |
|
2019 |
2019 |
2018 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Realized losses
relating to |
|
|
|
|
|
|
|
Interest rate swap agreements |
(2,247 |
) |
(1,785 |
) |
(2,704 |
) |
(5,720 |
) |
(11,544 |
) |
| |
Interest rate swap agreement
terminations |
— |
|
— |
|
(13,681 |
) |
— |
|
(13,681 |
) |
| |
Stock purchase
warrants(i) |
— |
|
(25,559 |
) |
— |
|
(25,559 |
) |
— |
|
| |
Forward
freight agreements |
435 |
|
(29 |
) |
(119 |
) |
393 |
|
(137 |
) |
|
|
|
(1,812 |
) |
(27,373 |
) |
(16,504 |
) |
(30,886 |
) |
(25,362 |
) |
| Unrealized
(losses) gains relating to |
|
|
|
|
|
| |
Interest rate swap
agreements |
(623 |
) |
(8,195 |
) |
19,718 |
|
(14,839 |
) |
44,169 |
|
| |
Foreign currency forward
contracts |
(435 |
) |
(101 |
) |
— |
|
(536 |
) |
— |
|
| |
Stock purchase
warrants(i) |
— |
|
24,584 |
|
(5,373 |
) |
26,900 |
|
(851 |
) |
| |
Forward
freight agreements |
946 |
|
121 |
|
(9 |
) |
1,050 |
|
25 |
|
|
|
|
(112 |
) |
16,409 |
|
14,336 |
|
12,575 |
|
43,343 |
|
| Total
realized and unrealized (losses) gains on derivative
instruments |
(1,924 |
) |
(10,964 |
) |
(2,168 |
) |
(18,311 |
) |
17,981 |
|
(i) Relates to the sale of the Company's remaining
interest in Teekay Offshore in May 2019. Also refer to (3)
below.
(3) 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, 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 |
Nine Months
Ended |
| |
|
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
| |
|
2019 |
2019 |
2018 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
Equity income (loss) |
21,514 |
|
(6,284 |
) |
13,744 |
|
(46,423 |
) |
41,698 |
|
| Proportionate
share of unrealized losses (gains) on derivative instruments |
5,170 |
|
5,203 |
|
(6,524 |
) |
19,138 |
|
(32,987 |
) |
| (Gain) loss on
sale/write-down of investment in Teekay Offshore(i) |
— |
|
7,853 |
|
— |
|
72,753 |
|
— |
|
|
Other(ii) |
(150 |
) |
1,023 |
|
2,289 |
|
873 |
|
14,533 |
|
| Equity
income adjusted for items in Appendix A |
26,534 |
|
7,795 |
|
9,509 |
|
46,341 |
|
23,244 |
|
(i) During the three months ended June 30, 2019,
the Company recognized a loss of $7.9 million on sale of its
investment in Teekay Offshore to Brookfield Business Partners L.P.
(or Brookfield) which occurred in May 2019. In connection
with the sale, the Company also recognized a write-down of $64.9
million on its equity-accounted investment in Teekay Offshore in
the first quarter of 2019. Also refer to (2) above in respect of
gains and losses on stock purchase warrants.
(ii) Other for the three and nine months ended
September 30, 2018 includes the Company's proportionate share of
the loss on bond repurchases in Teekay Offshore, a decrease in the
deferred income tax asset for Teekay Offshore's Norwegian tax
structure, the realized loss on interest rate swap amendments in
Teekay Offshore, partially offset by the Company's gain on the
option exercised by Brookfield to acquire an additional 2%
ownership interest in Teekay Offshore's general partner from
Teekay. Other for the nine months ended September 30, 2018 also
includes the Company's proportionate share of write-downs and gain
on sale of vessels in Teekay Offshore and the gain (loss) on sale
of vessels in Teekay LNG's Exmar LPG joint venture, partially
offset by the write-down 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, and the
loss on sale of the Company's investment in KT Maritime (Pty)
Ltd.
(4) Other loss for the nine months
ended September 30, 2019 and three months ended June 30, 2019
includes $10.7 million relating to the repurchase of the Company's
2020 bonds.
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
| |
As at September 30, |
As at June 30, |
As at December 31, |
| |
2019 |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
| Cash and cash
equivalents - Teekay Parent |
73,796 |
|
74,890 |
|
220,238 |
|
| Cash and cash
equivalents - Teekay LNG |
142,860 |
|
124,880 |
|
149,014 |
|
| Cash and cash
equivalents - Teekay Tankers |
76,705 |
|
35,429 |
|
54,917 |
|
| Current portion of
loans and advances to |
|
|
|
|
|
equity-accounted investments (1) |
99,314 |
|
93,924 |
|
169,197 |
|
| Vessel held for
sale |
11,515 |
|
12,300 |
|
— |
|
| Accounts
receivable and other current assets (1) |
296,186 |
|
330,811 |
|
251,527 |
|
| Restricted cash -
Teekay Parent |
1,946 |
|
2,023 |
|
2,030 |
|
| Restricted cash -
Teekay LNG |
91,671 |
|
80,308 |
|
73,850 |
|
| Restricted cash -
Teekay Tankers |
5,778 |
|
5,353 |
|
5,590 |
|
| Vessels and
equipment - Teekay Parent |
102,031 |
|
284,840 |
|
304,049 |
|
| Vessels and
equipment - Teekay LNG |
3,303,126 |
|
3,320,937 |
|
3,242,581 |
|
| Vessels and
equipment - Teekay Tankers |
1,836,138 |
|
1,856,766 |
|
1,883,561 |
|
| Operating lease
right-of-use assets (2) |
177,052 |
|
185,716 |
|
— |
|
| Advances on
newbuilding contracts |
— |
|
— |
|
86,942 |
|
| Net investment in
direct financing leases |
561,437 |
|
564,685 |
|
575,163 |
|
| Investments in and
loans to equity-accounted |
1,034,713 |
|
1,011,530 |
|
1,193,741 |
|
|
|
investments |
| Other non-current
assets |
137,510 |
|
141,626 |
|
179,270 |
|
|
Total Assets |
7,951,778 |
|
8,126,018 |
|
8,391,670 |
|
|
|
LIABILITIES AND EQUITY |
|
|
| Accounts payable,
accrued liabilities and other (1) |
341,092 |
|
341,022 |
|
254,380 |
|
| Advances from
equity-accounted investments (1) |
24,895 |
|
27,607 |
|
75,292 |
|
| Short-term
debt |
50,000 |
|
15,000 |
|
— |
|
| Current portion of
long-term debt - Teekay Parent |
36,663 |
|
36,663 |
|
— |
|
| Current portion of
long-term debt - Teekay LNG |
460,230 |
|
468,038 |
|
217,120 |
|
| Current portion of
long-term debt - Teekay Tankers |
126,170 |
|
125,661 |
|
127,132 |
|
| Long-term debt -
Teekay Parent |
347,830 |
|
345,768 |
|
614,341 |
|
| Long-term debt -
Teekay LNG |
2,795,767 |
|
2,799,426 |
|
3,051,212 |
|
| Long-term debt -
Teekay Tankers |
903,724 |
|
894,501 |
|
983,563 |
|
| Derivative
liabilities |
111,984 |
|
84,653 |
|
68,557 |
|
| Operating lease
liabilities (2) |
165,414 |
|
173,476 |
|
— |
|
| Other long-term
liabilities |
139,109 |
|
141,578 |
|
133,045 |
|
| Equity: |
|
|
|
| Non-controlling
interests |
1,983,896 |
|
2,005,399 |
|
2,058,037 |
|
|
Shareholders of Teekay |
465,004 |
|
667,226 |
|
808,991 |
|
| Total
Liabilities and Equity |
7,951,778 |
|
8,126,018 |
|
8,391,670 |
|
|
|
|
|
|
|
| Net debt - Teekay
Parent (3) |
308,751 |
|
305,518 |
|
392,073 |
|
| Net debt - Teekay
LNG (3) |
3,021,466 |
|
3,062,276 |
|
3,045,468 |
|
| Net
debt - Teekay Tankers (3) |
997,411 |
|
994,380 |
|
1,050,188 |
|
(1) Subsequent to the sale of the Company's
remaining interest in Teekay Offshore in May 2019, amounts
receivable and payable to Teekay Offshore are presented in accounts
receivable and accounts payable, respectively. These were
previously presented in current portion of loans and advances to
equity-accounted investments, and advances from equity-accounted
investments, respectively.
(2) 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 $165.4 million at September 30, 2019, and by
$173.5 million at June 30, 2019.
(3) 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)
| |
Nine Months Ended |
| |
September 30, |
| |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
| Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
|
Net loss |
(271,483 |
) |
(51,390 |
) |
| Non-cash and non-operating
items: |
|
|
| Depreciation and
amortization |
219,589 |
|
205,238 |
|
| Unrealized loss (gain)
on derivative instruments and loss on sale of warrants |
38,803 |
|
(93,817 |
) |
| Write-down and loss on
sales of vessels |
179,113 |
|
53,693 |
|
| Equity loss (income),
net of dividends received |
71,797 |
|
(28,382 |
) |
| Foreign currency
exchange loss and other |
13,602 |
|
69,277 |
|
| Direct financing lease
payments received |
9,242 |
|
— |
|
| Change in operating assets and
liabilities |
41,729 |
|
(41,424 |
) |
| Expenditures for dry
docking |
(46,266 |
) |
(28,782 |
) |
|
Net operating cash flow |
256,126 |
|
84,413 |
|
| |
|
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance of
long-term debt, net of issuance costs |
449,686 |
|
843,854 |
|
| Prepayments of long-term
debt |
(774,401 |
) |
(681,664 |
) |
| Scheduled repayments of
long-term debt |
(171,946 |
) |
(265,868 |
) |
| Proceeds from short-term
debt |
125,000 |
|
— |
|
| Prepayment of short-term
debt |
(75,000 |
) |
— |
|
| Proceeds from financing
related to sales-leaseback of vessels |
381,526 |
|
526,692 |
|
| Prepayment of obligations
related to finance leases |
(111,617 |
) |
— |
|
| Repayments of obligations
related to finance leases |
(72,559 |
) |
(54,122 |
) |
| Net proceeds from equity
issuances of Teekay Corporation |
— |
|
103,657 |
|
| Repurchase of Teekay LNG
common units |
(25,729 |
) |
— |
|
| Distributions paid from
subsidiaries to non-controlling interests |
(46,982 |
) |
(49,124 |
) |
| Cash dividends paid |
(5,523 |
) |
(16,637 |
) |
| Other financing
activities |
(580 |
) |
(595 |
) |
|
Net financing cash flow |
(328,125 |
) |
406,193 |
|
| |
|
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for vessels and
equipment |
(98,713 |
) |
(564,464 |
) |
| Proceeds from sale of
equity-accounted investments and related assets |
100,000 |
|
54,438 |
|
| Investment in equity-accounted
investments |
(42,171 |
) |
(32,758 |
) |
| Loans to joint ventures and
joint venture partners |
— |
|
(24,957 |
) |
| Cash of transferred
subsidiaries on sale, net of proceeds received |
— |
|
(25,254 |
) |
| Other investing
activities |
— |
|
8,678 |
|
|
Net investing cash flow |
(40,884 |
) |
(584,317 |
) |
| |
|
|
| Decrease in cash, cash
equivalents and restricted cash |
(112,883 |
) |
(93,711 |
) |
| Cash, cash equivalents and
restricted cash, beginning of the period |
505,639 |
|
552,174 |
|
|
Cash, cash equivalents and restricted cash, end of the
period |
392,756 |
|
458,463 |
|
Teekay CorporationAppendix A -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted Net Loss(in thousands of
U.S. dollars, except per share data)
| |
|
Three Months Ended |
| |
|
September 30, |
June 30, |
September 30, |
| |
|
2019 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
$
Per |
|
$
Per |
|
$
Per |
| |
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
| Net loss –
GAAP basis |
(175,908 |
) |
|
(34,111 |
) |
|
(1,763 |
) |
|
| Adjust for: Net
loss attributable to |
|
|
|
|
|
|
|
non-controlling interests |
(22,270 |
) |
|
(5,374 |
) |
|
(10,242 |
) |
|
| Net loss
attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
(198,178 |
) |
(1.97 |
) |
(39,485 |
) |
(0.39 |
) |
(12,005 |
) |
(0.12 |
) |
| Add
(subtract) specific items affecting net loss |
|
|
|
|
|
|
| |
Unrealized losses (gains) from
derivative |
|
|
|
|
|
|
| |
instruments(2) |
5,283 |
|
0.05 |
|
(11,206 |
) |
(0.11 |
) |
(20,860 |
) |
(0.21 |
) |
| |
Foreign exchange (gains)
losses(3) |
(7,059 |
) |
(0.07 |
) |
4,764 |
|
0.05 |
|
(5,805 |
) |
(0.06 |
) |
| |
Write-down and loss (gain) on
sale of vessels |
|
|
|
|
|
|
| |
and other assets |
175,785 |
|
1.74 |
|
7,853 |
|
0.08 |
|
(58 |
) |
— |
|
| |
Restructuring charges, net of
recoveries |
414 |
|
— |
|
1,369 |
|
0.01 |
|
1,080 |
|
0.01 |
|
| |
Realized loss on interest rate
swap |
|
|
|
|
|
|
| |
terminations and amendments(4) |
— |
|
— |
|
— |
|
— |
|
14,560 |
|
0.15 |
|
| |
Other(5) |
1,267 |
|
0.01 |
|
37,329 |
|
0.37 |
|
6,868 |
|
0.07 |
|
|
|
Non-controlling interests’ share of items above(6) |
(1,582 |
) |
(0.02 |
) |
(13,992 |
) |
(0.14 |
) |
4,842 |
|
0.05 |
|
| Total
adjustments |
174,108 |
|
1.71 |
|
26,117 |
|
0.26 |
|
627 |
|
0.01 |
|
| Adjusted
net loss attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
(24,070 |
) |
(0.24 |
) |
(13,368 |
) |
(0.13 |
) |
(11,378 |
) |
(0.11 |
) |
(1) Basic per share amounts.
(2) Reflects unrealized losses (gains) relating
to the change in the mark-to-market value of derivative instruments
that are not designated in qualifying hedging relationships for
accounting purposes, including those losses (gains) included in the
Company's proportionate share of equity income (loss) from joint
ventures, and for 2018 periods hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes.
(3) Foreign currency exchange losses (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.
(4) Also includes the Company's proportionate
share of realized losses on interest rate swap amendments in an
equity-accounted joint venture for the three months ended September
30, 2018.
(5) Other for the three months ended September
30, 2019 includes upfront fees on the refinancing of a vessel.
Other for the three months ended June 30, 2019 includes the
realized loss on sale of stock purchase warrants in Teekay Offshore
and a loss on the repurchase of 2020 bonds. Other for the three
months ended September 30, 2018 includes the Company's
proportionate share of a decrease in the deferred income tax assets
of certain equity-accounted joint ventures, and also includes the
Company's proportionate share of losses on debt repurchases in an
equity-accounted joint venture, losses on the Company's debt
repurchases, and the write-off of debt issuance costs in connection
with the refinancing of loans in Teekay Tankers.
(6) 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
EndedSeptember 30, 2019(in thousands of U.S.
dollars)(unaudited)
| |
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
| |
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
| |
|
|
|
|
|
|
| Revenues |
149,655 |
|
182,304 |
|
95,833 |
|
(7,096 |
) |
420,696 |
|
| |
|
|
|
|
|
|
| Voyage
expenses |
(4,961 |
) |
(87,726 |
) |
(9 |
) |
7 |
|
(92,689 |
) |
| Vessel operating
expenses |
(27,321 |
) |
(48,539 |
) |
(83,606 |
) |
(150 |
) |
(159,616 |
) |
| Time-charter hire
expense |
(5,336 |
) |
(10,637 |
) |
(20,205 |
) |
7,246 |
|
(28,932 |
) |
| Depreciation and
amortization |
(34,248 |
) |
(31,536 |
) |
(7,849 |
) |
— |
|
(73,633 |
) |
| General and
administrative expenses |
(5,393 |
) |
(8,739 |
) |
(6,077 |
) |
193 |
|
(20,016 |
) |
| Write-down of
vessels |
(785 |
) |
— |
|
(175,000 |
) |
— |
|
(175,785 |
) |
| Restructuring
charges |
— |
|
— |
|
(214 |
) |
(200 |
) |
(414 |
) |
|
|
|
|
|
|
|
|
| Income
(loss) from vessel operations |
71,611 |
|
(4,873 |
) |
(197,127 |
) |
— |
|
(130,389 |
) |
| |
|
|
|
|
|
| Interest
expense |
(40,574 |
) |
(16,134 |
) |
(11,062 |
) |
63 |
|
(67,707 |
) |
| Interest
income |
1,025 |
|
138 |
|
385 |
|
(63 |
) |
1,485 |
|
| Realized and
unrealized (loss) gain on |
|
|
|
|
|
|
|
non-designated derivative instruments |
(3,270 |
) |
1,453 |
|
(107 |
) |
— |
|
(1,924 |
) |
| Equity income |
21,296 |
|
68 |
|
150 |
|
— |
|
21,514 |
|
| Equity in earnings
of subsidiaries(2) |
— |
|
— |
|
8,231 |
|
(8,231 |
) |
— |
|
| Income tax
expense |
(1,442 |
) |
(1,435 |
) |
(214 |
) |
— |
|
(3,091 |
) |
| Foreign exchange
gain |
2,879 |
|
918 |
|
1,831 |
|
— |
|
5,628 |
|
| Other
(loss) income – net |
(1,174 |
) |
15 |
|
(265 |
) |
— |
|
(1,424 |
) |
| Net income
(loss) |
50,351 |
|
(19,850 |
) |
(198,178 |
) |
(8,231 |
) |
(175,908 |
) |
| Net income
attributable to |
|
|
|
|
|
|
|
non-controlling interests(3) |
(2,983 |
) |
— |
|
— |
|
(19,287 |
) |
(22,270 |
) |
| Net income
(loss) attributable to shareholders/ |
|
|
|
|
|
|
|
unitholders of publicly-listed entities |
47,368 |
|
(19,850 |
) |
(198,178 |
) |
(27,518 |
) |
(198,178 |
) |
(1) Consolidation Adjustments column includes
adjustments which eliminate transactions between Teekay LNG, Teekay
Tankers and Teekay Parent.
(2) Teekay Corporation’s proportionate share of
the net earnings of its publicly-traded subsidiaries.
(3) 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 September 30, 2019(in thousands of U.S.
dollars)(unaudited)
| |
|
|
|
Teekay |
| |
|
|
|
Parent |
| |
FPSOs |
Other(1) |
GPCO |
Total |
| |
|
|
|
|
|
Revenues |
44,558 |
|
51,275 |
|
— |
|
95,833 |
|
| |
|
|
|
|
| Voyage expenses |
(9 |
) |
— |
|
— |
|
(9 |
) |
| Vessel operating expenses |
(43,179 |
) |
(40,427 |
) |
— |
|
(83,606 |
) |
| Time-charter hire expense |
(9,617 |
) |
(10,588 |
) |
— |
|
(20,205 |
) |
| Depreciation and
amortization |
(7,811 |
) |
(38 |
) |
— |
|
(7,849 |
) |
| General and administrative
expenses |
(3,357 |
) |
— |
|
(2,720 |
) |
(6,077 |
) |
| Write-down of vessels (2) |
(175,000 |
) |
— |
|
— |
|
(175,000 |
) |
| Restructuring charges |
— |
|
(214 |
) |
— |
|
(214 |
) |
|
(Loss) income from vessel operations |
(194,415 |
) |
8 |
|
(2,720 |
) |
(197,127 |
) |
| |
|
|
|
|
| Depreciation and
amortization |
7,811 |
|
38 |
|
— |
|
7,849 |
|
| Amortization of in-process
revenue |
|
|
|
|
| contracts and
other |
(1,483 |
) |
603 |
|
|
(880 |
) |
| Write-down of vessels (2) |
175,000 |
|
— |
|
— |
|
175,000 |
|
|
Daughter Entities distributions (3) |
— |
|
— |
|
5,090 |
|
5,090 |
|
|
Teekay Parent adjusted EBITDA |
(13,087 |
) |
649 |
|
2,370 |
|
(10,068 |
) |
(1) Includes the results of one chartered-in FSO
unit owned by Teekay Offshore, and one chartered-in LNG unit owned
by Teekay LNG, all of which are largely on a flow-through basis
with Teekay Parent earning a small margin.
(2) Asset impairments for the three months ended
September 30, 2019 relates to write-downs on two FPSO units.
(3) 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
September 30, 2019, Teekay Parent received cash distributions
of $5.1 million from Teekay LNG, 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 |
| |
|
September 30, |
June 30, |
September 30, |
| |
|
2019 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| TEEKAY
PARENT GPCO |
|
|
|
| Daughter
Entities distributions to Teekay Parent(1) |
|
|
|
| |
Limited Partner
interests (2) |
|
|
|
|
|
Teekay LNG |
4,790 |
|
4,790 |
|
3,529 |
|
| |
Teekay Offshore |
— |
|
— |
|
566 |
|
| |
GP interests |
|
|
|
| |
Teekay LNG |
300 |
|
304 |
|
228 |
|
| |
Teekay Offshore (3) |
— |
|
— |
|
15 |
|
| Total Daughter
Entity Distributions to Teekay Parent |
5,090 |
|
5,094 |
|
4,338 |
|
|
Corporate general and administrative expenses |
(2,720 |
) |
(2,819 |
) |
(4,343 |
) |
| Total
Teekay Parent GPCO |
2,370 |
|
2,275 |
|
(5 |
) |
|
|
|
|
|
|
| TEEKAY
PARENT OPCO |
|
|
|
| Teekay
Parent OPCO (4) |
|
|
|
| |
FPSOs |
(13,087 |
) |
(99 |
) |
18,795 |
|
|
|
Other |
649 |
|
1,251 |
|
1,028 |
|
|
Total Teekay Parent OPCO (5) |
(12,438 |
) |
1,152 |
|
19,823 |
|
|
|
|
|
|
|
TEEKAY PARENT ADJUSTED EBITDA |
(10,068 |
) |
3,427 |
|
19,818 |
|
| |
|
|
|
| Net interest
expense (6) |
(8,714 |
) |
(9,854 |
) |
(14,977 |
) |
|
|
|
|
|
|
|
TOTAL TEEKAY PARENT FREE CASH FLOW |
(18,782 |
) |
(6,427 |
) |
4,841 |
|
| |
|
|
|
|
Weighted-average number of common shares -
Basic |
100,784,683 |
|
100,783,496 |
|
100,435,045 |
|
(1) 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.
(2) Common unit distribution cash flows to
Teekay Parent are based on Teekay Parent’s ownership on the
ex-dividend date for its publicly-traded subsidiary Teekay LNG and
equity-accounted investment in Teekay Offshore for the periods as
follows:
| |
|
Three Months Ended |
| |
|
September
30, |
June
30, |
September
30, |
| |
|
2019 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| Teekay
LNG |
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.19 |
|
$ |
0.19 |
|
$ |
0.14 |
|
| Common units owned by |
|
|
|
|
|
|
|
Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
| Total distribution |
$ |
4,789,572 |
|
$ |
4,789,572 |
|
$ |
3,529,158 |
|
| Teekay Offshore |
|
|
|
|
|
|
| Distribution per common unit |
$ |
— |
|
$ |
— |
|
$ |
0.01 |
|
| Common units owned by |
|
|
|
|
|
|
|
Teekay Parent |
|
— |
|
|
— |
|
|
56,587,484 |
|
| Total distribution |
$ |
— |
|
$ |
— |
|
$ |
565,875 |
|
(3) 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.
Teekay sold its remaining interests in Teekay Offshore to
Brookfield in the second quarter of 2019.
(4) Please refer to Appendices C and E for
additional financial information on Teekay Parent’s adjusted
EBITDA.
(5) Excludes corporate general and
administrative expenses relating to Teekay Parent GPCO.
(6) 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 |
| |
|
September 30, |
June 30, |
September 30, |
| |
|
2019 |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
| Net loss |
(175,908 |
) |
(34,111 |
) |
(1,763 |
) |
| Depreciation and
amortization |
73,633 |
|
73,849 |
|
69,967 |
|
| Interest expense,
net of interest income |
66,222 |
|
67,972 |
|
65,240 |
|
| Income
tax expense |
3,091 |
|
3,404 |
|
4,334 |
|
|
EBITDA |
(32,962 |
) |
111,114 |
|
137,778 |
|
|
Specific income statement items affecting EBITDA: |
|
|
|
|
|
Write-down and loss on sale of vessels |
175,785 |
|
— |
|
2,201 |
|
| |
Direct finance lease payments received in excess of revenue
recognized |
4,071 |
|
4,037 |
|
2,823 |
|
| |
Amortization of in-process contracts and other |
(880 |
) |
(1,255 |
) |
(2,412 |
) |
| |
Realized and unrealized loss on derivative instruments |
1,924 |
|
10,964 |
|
2,168 |
|
| |
Realized gains from the settlements of non-designated derivative
instruments |
435 |
|
— |
|
— |
|
| |
Equity (income) loss |
(21,514 |
) |
6,284 |
|
(13,744 |
) |
| |
Foreign currency exchange (gain) loss |
(5,628 |
) |
5,851 |
|
(3,553 |
) |
|
|
Other expense - net |
1,424 |
|
11,099 |
|
2,400 |
|
|
Consolidated Adjusted EBITDA |
122,655 |
|
148,094 |
|
127,661 |
|
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
70,225 |
|
48,515 |
|
68,736 |
|
|
Total Adjusted EBITDA |
192,880 |
|
196,609 |
|
196,397 |
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA – Equity-Accounted
Vessels(in thousands of U.S. dollars)
| |
|
Three Months Ended |
| |
|
September 30, 2019 |
June 30, 2019 |
September 30, 2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
At |
Company's |
At |
Company's |
At |
Company's |
| |
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(1) |
| Revenues |
207,749 |
|
91,490 |
|
174,382 |
|
74,266 |
|
481,760 |
|
115,064 |
|
| Vessel and other
operating expenses |
(60,219 |
) |
(26,779 |
) |
(69,135 |
) |
(30,565 |
) |
(225,486 |
) |
(48,929 |
) |
| Depreciation and
amortization |
(29,799 |
) |
(14,416 |
) |
(29,459 |
) |
(14,195 |
) |
(127,335 |
) |
(27,454 |
) |
| Write-down and
gain on sale of |
|
|
|
|
|
|
|
|
vessels |
— |
|
— |
|
— |
|
— |
|
350 |
|
49 |
|
| Restructuring
charges |
— |
|
— |
|
— |
|
— |
|
(1,899 |
) |
(267 |
) |
| Income
from vessel operations of equity-accounted vessels |
117,731 |
|
50,295 |
|
75,788 |
|
29,506 |
|
127,390 |
|
38,463 |
|
| |
|
|
|
|
|
|
| Net interest
expense |
(57,031 |
) |
(23,423 |
) |
(53,356 |
) |
(21,467 |
) |
(95,370 |
) |
(25,899 |
) |
| Income tax
expense |
(32 |
) |
(16 |
) |
(670 |
) |
(246 |
) |
(174 |
) |
(78 |
) |
| Other items
including realized and |
|
|
|
|
|
|
| |
unrealized loss on
derivative |
|
|
|
|
|
|
| |
instruments |
(18,270 |
) |
(5,492 |
) |
(18,764 |
) |
(6,224 |
) |
(11,797 |
) |
(976 |
) |
| Write-down and
(loss) gain on sale of |
|
|
|
|
|
|
|
|
equity-accounted investments (2) |
|
150 |
|
|
(7,853 |
) |
|
2,234 |
|
| Net income
/ equity income (loss) of equity-accounted vessels |
42,398 |
|
21,514 |
|
2,998 |
|
(6,284 |
) |
20,049 |
|
13,744 |
|
|
|
|
|
|
|
|
|
|
| Net income
/ equity income (loss) |
|
|
|
|
|
|
| |
of equity-accounted
vessels |
42,398 |
|
21,514 |
|
2,998 |
|
(6,284 |
) |
20,049 |
|
13,744 |
|
| Depreciation and
amortization |
29,799 |
|
14,416 |
|
29,459 |
|
14,195 |
|
127,335 |
|
27,454 |
|
| Net interest
expense |
57,031 |
|
23,423 |
|
53,356 |
|
21,467 |
|
95,370 |
|
25,899 |
|
| Income
tax expense |
32 |
|
16 |
|
670 |
|
246 |
|
174 |
|
78 |
|
|
EBITDA |
129,260 |
|
59,369 |
|
86,483 |
|
29,624 |
|
242,928 |
|
67,175 |
|
| Specific income
statement items affecting EBITDA: |
|
|
|
|
|
| |
Write-down and gain on sale of
vessels |
— |
|
— |
|
— |
|
— |
|
(350 |
) |
(49 |
) |
| |
Direct finance lease payments
received in excess of revenue recognized |
17,701 |
|
6,470 |
|
16,131 |
|
5,759 |
|
14,971 |
|
5,048 |
|
| |
Amortization of in-process
contracts and other |
(1,758 |
) |
(956 |
) |
(1,736 |
) |
(945 |
) |
(12,758 |
) |
(2,075 |
) |
| |
Other items including realized
and unrealized loss on derivative instruments |
18,270 |
|
5,492 |
|
18,764 |
|
6,224 |
|
11,797 |
|
976 |
|
| |
Realized loss on foreign
currency forward contracts |
— |
|
— |
|
— |
|
— |
|
(747 |
) |
(105 |
) |
|
|
Write-down and loss (gain) on sale of equity-accounted
investments(2) |
|
(150 |
) |
|
7,853 |
|
|
(2,234 |
) |
|
Adjusted EBITDA from equity-accounted
vessels(3)(4) |
163,473 |
|
70,225 |
|
119,642 |
|
48,515 |
|
255,841 |
|
68,736 |
|
(1) For the three months ended September 30,
2019 and June 30, 2019, the Company’s proportionate share of its
equity-accounted vessels and other investments, ranged from 20% to
52%. For the three months ended September 30, 2018, the Company’s
proportionate share of its equity-accounted vessels and other
investments, including its investment in Teekay Offshore, ranged
from 14% to 52%.
(2) For the three months ended June 30, 2019,
includes a loss on sale of the Company's investment in Teekay
Offshore. For the three months ended September 30, 2018, includes a
gain on the option exercised by Brookfield to acquire an additional
2% ownership interest in Teekay Offshore's general partner from
Teekay.
(3) Adjusted EBITDA from equity-accounted
vessels represents the Company’s proportionate share of adjusted
EBITDA from its equity-accounted vessels and other investments.
(4) The Company sold its investment in Teekay
Offshore in May 2019 and consequently did not include any share of
Teekay Offshore's adjusted EBITDA for the three months ended
September 30, 2019 and June 30, 2019. The three months ended
September 30, 2018 include the Company's proportionate share of the
adjusted EBITDA from Teekay Offshore.
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA - Teekay
Parent(in thousands of U.S. dollars)
| |
|
Three Months
Ended June 30, 2019 |
| |
|
(unaudited) |
| |
|
|
|
|
|
Teekay |
| |
|
|
|
|
|
Parent |
| |
|
FPSOs |
Other |
GPCO |
Total |
| |
|
|
|
|
|
|
|
|
|
Teekay Parent (loss) income from vessel operations |
|
(5,987 |
) |
|
541 |
|
(2,819 |
) |
|
(8,265 |
) |
| Depreciation and
amortization |
|
7,811 |
|
|
42 |
|
— |
|
|
7,853 |
|
| Amortization of
in-process revenue contracts and other |
|
(1,923 |
) |
|
668 |
|
— |
|
|
(1,255 |
) |
|
Daughter Entities distributions |
|
— |
|
|
— |
|
5,094 |
|
|
5,094 |
|
|
Adjusted EBITDA – Teekay Parent |
|
(99 |
) |
|
1,251 |
|
2,275 |
|
|
3,427 |
|
| |
|
Three Months
Ended September 30, 2018 |
| |
|
(unaudited) |
| |
|
|
|
|
|
Teekay |
| |
|
|
|
|
|
Parent |
| |
|
FPSOs |
Other |
GPCO |
Total |
| |
|
|
|
|
|
|
|
|
|
Teekay Parent income (loss) from vessel operations |
|
12,905 |
|
|
1,688 |
|
(4,343 |
) |
|
10,250 |
|
| Depreciation and
amortization |
|
8,032 |
|
|
102 |
|
— |
|
|
8,134 |
|
| Amortization of
in-process revenue contracts and other |
|
(2,142 |
) |
|
(762 |
) |
— |
|
|
(2,904 |
) |
|
Daughter Entities distributions |
|
— |
|
|
— |
|
4,338 |
|
|
4,338 |
|
|
Adjusted EBITDA – Teekay Parent |
|
18,795 |
|
|
1,028 |
|
(5 |
) |
|
19,818 |
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresNet
Interest Expense - Teekay Parent(in thousands of U.S.
dollars)
| |
|
|
Three Months Ended |
| |
|
|
September 30, |
June 30, |
September 30, |
| |
|
|
2019 |
2019 |
2018 |
| |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Interest
expense |
(67,707 |
) |
(70,205 |
) |
(67,343 |
) |
|
Interest income |
1,485 |
|
2,233 |
|
2,103 |
|
| Interest expense
net of interest income consolidated |
(66,222 |
) |
(67,972 |
) |
(65,240 |
) |
| Less: Non-Teekay
Parent interest expense net of |
|
|
|
|
|
interest income |
(55,545 |
) |
(56,444 |
) |
(49,651 |
) |
| Interest expense
net of interest income - Teekay Parent |
(10,677 |
) |
(11,528 |
) |
(15,589 |
) |
| Teekay Parent
non-cash accretion and loan cost amortization |
2,204 |
|
1,896 |
|
966 |
|
| Teekay
Parent realized losses on interest rate swaps |
(241 |
) |
(222 |
) |
(354 |
) |
|
Net interest expense - Teekay Parent |
(8,714 |
) |
(9,854 |
) |
(14,977 |
) |
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 LNG’s intention
to increase quarterly cash distributions on its common units by 32
percent in 2020; the expected delivery date of the final ARC7
newbuilding for Teekay LNG’s Yamal Joint Venture; revised and new
2019 and 2020 earnings and cash flow guidance from Teekay LNG;
contributions to improved Company results for the quarter ending
December 31, 2019 and for 2020 from recommencement of operations of
FPSO units following completion of scheduled maintenance shutdowns;
stronger earnings for the Daughter Entities as a result of
additional newbuilding deliveries in Teekay LNG and expected
stronger tanker rates in Teekay Tankers; Teekay LNG’s ability to
reach its target leverage range; Teekay Tankers’ anticipated
reduction of financial leverage and cost of capital and increased
net asset value; and expected results of the Daughter Entities’
capital allocation strategies. 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
or tanker rates; issues with vessel operations; increased operating
expenses; potential project or vessel 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; changes in borrowing costs or equity valuations;
declaration by Teekay LNG’s board of directors of increased common
unit distributions; available cash to reduce financial leverage at
Teekay LNG and Teekay Tankers; 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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