Highlights
Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE: TNK)
today reported the Company's results for the quarter and year ended
December 31, 2018:
Consolidated Financial Summary |
|
|
Three Months Ended |
Year Ended |
(in thousands
of U.S. dollars, except per share data) |
December 31, 2018 |
September 30, 2018 |
December 31, 2017 |
December 31, 2018 |
|
December 31, 2017 |
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
|
Total revenues |
239,724 |
|
|
175,915 |
|
|
105,229 |
|
|
755,763 |
|
|
431,178 |
|
Income (loss) from operations |
31,206 |
|
|
(2,166 |
) |
|
2,822 |
|
|
7,204 |
|
|
1,416 |
|
Net income (loss) |
11,502 |
|
|
(17,484 |
) |
|
(1,879 |
) |
|
(52,548 |
) |
|
(58,023 |
) |
Earnings (loss) per share |
0.04 |
|
|
(0.07 |
) |
|
(0.01 |
) |
|
(0.20 |
) |
|
(0.31 |
) |
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash flow from
vessel operations (1) |
62,254 |
|
|
27,750 |
|
|
32,134 |
|
|
128,870 |
|
|
123,138 |
|
Adjusted net income
(loss) (1) |
14,002 |
|
|
(18,001 |
) |
|
(5,939 |
) |
|
(54,718 |
) |
|
(19,945 |
) |
Adjusted earnings
(loss) per share (1) |
0.05 |
|
|
(0.07 |
) |
|
(0.03 |
) |
|
(0.20 |
) |
|
(0.11 |
) |
Free cash flow (1) |
44,580 |
|
|
12,558 |
|
|
22,859 |
|
|
66,980 |
|
|
87,875 |
|
- 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).
Fourth Quarter of 2018 Compared to Third Quarter of
2018
GAAP net income and non-GAAP adjusted net income
for the fourth quarter of 2018 improved compared to the prior
quarter, primarily as a result of higher average spot tanker
rates. This was partially offset by an increase in general
and administrative expenses, a portion of which is
non-recurring.
Fourth Quarter of 2018 Compared to Fourth Quarter of
2017
GAAP net income and non-GAAP adjusted net income
for the fourth quarter of 2018 compared to the GAAP net loss and
non-GAAP adjusted net loss in the same period of the prior year
were positively affected by higher average spot tanker rates and
the acquisition of Tanker Investments Ltd. in late-November 2017.
This was partially offset by higher interest expense associated
with the sale-leaseback transactions relating to ten tankers that
were completed in September and November 2018.
CEO Commentary
“Crude tanker spot rates reached three-year
highs during the fourth quarter of 2018, driven by winter
seasonality underpinned by positive supply and demand fundamentals,
which led to our results exceeding the prior quarter and the same
quarter of the previous year,” commented Kevin Mackay, Teekay
Tankers’ President and Chief Executive Officer. “This
strength continued into early Q1-2019 and I am pleased that our
secured first quarter to-date spot rates are significantly higher
than the fourth quarter. However, in the last few weeks, crude
tanker rates have declined from those highs, as a result of OPEC
supply cuts, higher fleet growth, and the impact of seasonal
refinery maintenance which we believe could weigh on crude tanker
demand as we go through the first half of 2019. We believe
the near-term headwinds should however give way to a much stronger
second half of 2019 and 2020 due to positive underlying oil demand,
an expected increase in U.S. crude oil exports, higher OPEC
production, lower tanker fleet growth, and the positive impacts of
IMO 2020.”
"We continue to focus on strengthening our
balance sheet and financial position. Since the beginning of
2018, we have completed various financing initiatives and recently
signed a term sheet for a further sale-leaseback transaction, all
of which have or are expected to increase our liquidity position
and extend our maturity profile."
Mr. Mackay added, “Consistent with our strategy
and based on our forward views of the market, we recently entered
into time charter-in contracts for 2.5 Aframax/LR2 vessels for
periods ranging from 1 to 2 years with extension options. Securing
these new vessels at attractive charter rates, will add to our
significant operating leverage and further position Teekay Tankers
to add value and benefit from an expected strengthening global
tanker market as we move through 2019 and into 2020."
Summary of Recent Events
In November 2018, Teekay Tankers completed a
sale-leaseback transaction relating to four vessels and a loan to
finance working capital for the Company's revenue sharing agreement
(RSA) pool management operations, which when fully drawn will
contribute a total of $40 million of additional liquidity after the
repayment of outstanding debt related to the four vessels.
In addition, in February 2019, Teekay Tankers
signed a term sheet for a further sale-leaseback transaction
relating to two Suezmax tankers. The transaction, once completed,
is expected to further increase the Company’s liquidity position by
approximately $25 million after the repayment of outstanding debt
related to these vessels. The transaction, which remains subject to
final lessor approval and customary closing conditions, is expected
to be completed in the first quarter of 2019.
Since November 2018, Teekay Tankers entered into
time charter-in contracts for 2.5 Aframax tanker vessel equivalents
for periods ranging 1 to 2 years with extension options. The new
time charter-in contracts have a weighted average daily rate of
$17,600.
Teekay Tankers' current dividend policy is to
pay out 30 to 50 percent of its quarterly adjusted net income,
subject to reserves the Board of Directors may determine are
necessary for the prudent operation of the Company. Given the
tanker market weakness and losses generated during the first three
quarters of 2018, and the additional debt incurred from recent
sale-leaseback transactions to improve Teekay Tankers' liquidity
position, the Company has elected to reserve the amount that would
have otherwise been paid out as a dividend for the fourth quarter
of 2018 to repay outstanding debt.
Tanker Market
Crude tanker spot rates improved significantly
during the fourth quarter of 2018, spurred by both winter market
seasonality and positive underlying supply and demand fundamentals.
In the fourth quarter of 2018, OPEC crude oil production rose to
32.4 million barrels per day (mb/d), the highest level since July
2017 and up from 31.4 mb/d earlier in 2018. Most of this increase
came from the Middle East, where higher production levels more than
offset lower output from Venezuela and Iran. Russian oil production
reached a record high 11.5 mb/d by the end of 2018, which was
positive for mid-size tanker demand in the Mediterranean / Black
Sea and Baltic Sea regions. Rising U.S. exports also supported
tanker demand, with U.S. crude oil production reaching a record
high 11.7 mb/d and crude oil exports reaching 2.5 mb/d during the
fourth quarter of 2018. This was positive for both crude tanker
demand, as well as lightering demand in the U.S. Gulf.
Crude tanker spot rates have softened through
the first quarter of 2019, which is typical for this time of year
as refineries enter into seasonal maintenance programs. OPEC supply
cuts are also weighing on crude tanker demand, with OPEC (plus
select non-OPEC partners) pledging to cut production by 1.2 mb/d
starting in January 2019. Early data suggests that OPEC is
achieving high compliance with these cuts, which is negative for
crude tanker demand in the near-term. Venezuelan crude oil
production could also decline in the near-term due to impending
U.S. sanctions, though this may be offset by longer voyage
distances as Venezuela looks to sell its oil into other markets,
such as Asia. The Company expects OPEC cuts to have a negative
impact on tanker demand through the first half of 2019; however,
looking ahead to the second half of 2019, with well balanced oil
markets, the Company believes that OPEC will increase production
when oil demand is expected to increase substantially versus first
half 2019 levels, driving positive crude tanker demand.
The global tanker fleet grew by just 5.7 million
deadweight (mdwt), or 1.0 percent, in 2018, which was the lowest
level of tanker fleet growth since 2001. High tanker scrapping was
the main driver of low fleet growth in 2018, with a total of 22.4
mdwt removed, representing the fifth highest scrapping year on
record. Looking ahead, the Company expects an increase in tanker
fleet growth during 2019 as a firmer freight rate environment
should lead to relatively fewer vessels sold for scrap. The Company
forecasts total tanker fleet growth of approximately 3.5 percent
during 2019, with much of this growth weighted towards the first
half of 2019. The Company expects this will further add to pressure
on the tanker market during the early part of 2019, although it
paves the way for much lower fleet growth in the second half of
2019 and into 2020, when the Company forecasts that the global
tanker fleet will grow by less than 2 percent.
Global oil demand remains firm, with a forecast
of 1.4 mb/d growth in 2019 (average of IEA, EIA and OPEC
forecasts). Furthermore, the Company expects that tanker demand
will be boosted in 2019 by an increase in global refining capacity.
According to the IEA, a total of 2.6 mb/d of new refining capacity
will come online in 2019, which is the largest annual increase on
record. This should be positive for both crude and product tanker
demand. The Company also expects that the new IMO 2020 regulations
will be positive for tanker demand, as it may lead to an increase
in refinery throughput. The new regulations could also open up a
number of new trade patterns and arbitrage opportunities for both
crude and product, which would be beneficial for overall tonne-mile
demand. Finally, new pipeline capacity to the U.S. Gulf Coast is
expected to result in increased U.S. crude exports during the
second half of 2019 from approximately 2.5 mb/d at present to
approximately 4 mb/d, which is expected to contribute to both crude
tanker demand and U.S. Gulf lightering demand.
In summary, the Company believes that OPEC
supply cuts, higher fleet growth, and the impact of seasonal
refinery maintenance could weigh on tanker demand through the first
half of 2019. However, the Company believes that this will give way
to a much stronger second half of 2019 and 2020 due to strong
underlying oil demand, an increase in U.S. crude oil exports, the
return of OPEC crude oil supply, lower tanker fleet growth, and the
positive impact of IMO 2020 regulations.
Operating Results
The following table highlights the operating
performance of the Company’s time-charter vessels and spot vessels
trading in RSAs, voyage charters and full service lightering, in
each case measured in net revenues(v) per revenue day, or
time-charter equivalent (TCE) rates, before off-hire bunker
expenses:
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2018(i) |
2018(i) |
2017(i) |
2018(i) |
2017(i) |
Time Charter-Out
Fleet |
|
|
|
|
|
|
|
|
|
|
Suezmax revenue days |
180 |
|
162 |
|
438 |
|
819 |
|
1,853 |
|
Suezmax TCE per revenue
day |
$20,868 |
|
$17,630 |
|
$21,821 |
|
$20,144 |
|
$24,198 |
|
Aframax revenue days |
172 |
|
393 |
|
658 |
|
1,674 |
|
2,283 |
|
Aframax TCE per revenue
day |
$23,230 |
|
$20,559 |
|
$21,145 |
|
$21,216 |
|
$22,085 |
|
LR2 revenue days |
12 |
|
92 |
|
183 |
|
420 |
|
837 |
|
LR2 TCE per revenue
day |
$16,583 |
|
$17,732 |
|
$17,176 |
|
$17,287 |
|
$18,063 |
|
|
|
|
|
|
|
|
|
|
|
|
Spot
Fleet |
|
|
|
|
|
|
|
|
|
|
Suezmax revenue days |
2,427 |
|
2,476 |
|
1,679 |
|
9,795 |
|
5,621 |
|
Suezmax spot TCE per
revenue day (ii) |
$23,554 |
|
$15,825 |
|
$15,294 |
|
$16,154 |
|
$16,627 |
|
Aframax revenue days |
1,612 |
|
1,402 |
|
766 |
|
5,515 |
|
3,956 |
|
Aframax spot TCE per
revenue day (iii) |
$22,023 |
|
$13,693 |
|
$16,773 |
|
$16,034 |
|
$15,739 |
|
LR2 revenue days |
724 |
|
644 |
|
438 |
|
2,488 |
|
1,771 |
|
LR2 spot TCE per revenue
day (iv) |
$19,806 |
|
$12,527 |
|
$14,323 |
|
$14,131 |
|
$14,407 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Fleet |
|
|
|
|
|
|
|
|
|
|
Suezmax revenue days |
2,607 |
|
2,638 |
|
2,117 |
|
10,614 |
|
7,474 |
|
Suezmax TCE per revenue
day |
$23,369 |
|
$15,936 |
|
$16,644 |
|
$16,461 |
|
$18,504 |
|
Aframax revenue days |
1,784 |
|
1,795 |
|
1,424 |
|
7,189 |
|
6,239 |
|
Aframax TCE per revenue
day |
$22,139 |
|
$15,197 |
|
$18,794 |
|
$17,240 |
|
$18,061 |
|
LR2 revenue days |
736 |
|
736 |
|
621 |
|
2,908 |
|
2,608 |
|
LR2 TCE per revenue
day |
$19,754 |
|
$13,178 |
|
$15,165 |
|
$14,587 |
|
$15,580 |
|
- Revenue days are the total number of calendar days the
Company's vessels were in its possession during a period, less the
total number of off-hire days during the period associated with
major repairs, dry dockings or special or intermediate surveys.
Consequently, revenue days represents the total number of days
available for the vessel to earn revenue. Idle days, which are days
when the vessel is available to earn revenue yet is not employed,
are included in revenue days.
- Includes vessels trading in the Teekay Suezmax RSA, Teekay
Suezmax Classic RSA and non-pool voyage charters.
- Includes vessels trading in the Teekay Aframax RSA, Teekay
Aframax Classic RSA, non-pool voyage charters and full service
lightering voyages.
- Includes vessels trading in the Teekay Taurus RSA and non-pool
voyage charters.
- Net revenues is a non-GAAP financial measure. Please refer to
"Definitions and Non-GAAP Financial Measures" for a definition of
this term.
First Quarter of 2019 Spot Tanker Rates
Update
Below is Teekay Tankers’ spot tanker fleet
update for the first quarter of 2019 to-date:
- The portion of the Suezmax fleet trading on the spot market has
secured TCE per revenue day of approximately $26,000 per day on
average with 70 percent of the available days fixed(1);
- The portion of the Aframax fleet trading on the spot market has
secured TCE per revenue day of approximately $28,500 per day on
average with 68 percent of the available days fixed(2); and
- The portion of the Long Range 2 (LR2) product tanker fleet
trading on the spot market has secured TCE per revenue day of
approximately $24,500 per day on average with 51 percent of the
available days fixed(3).
(1) Combined average TCE rate
includes Teekay Suezmax RSA, Teekay Classic Suezmax RSA and
non-pool voyage charters.(2) Combined average TCE rate
includes Teekay Aframax RSA, non-pool voyage charters and full
service lightering voyages.(3) Combined average TCE
rate includes Teekay Taurus RSA and non-pool voyage charters.
Teekay Tankers’ Fleet
The following table summarizes the Company’s
fleet as of February 1, 2019:
|
Owned
andCapital LeaseVessels |
Chartered-inVessels |
Total |
Fixed-rate: |
|
|
|
Suezmax Tankers |
1 |
— |
1 |
Aframax Tankers |
1 |
— |
1 |
Total Fixed-Rate Fleet |
2 |
— |
2 |
Spot-rate: |
|
|
|
Suezmax Tankers |
29 |
— |
29 |
Aframax Tankers(i) |
16 |
3 |
19 |
LR2 Product
Tankers(ii) |
9 |
2 |
11 |
VLCC
Tanker(iii) |
1 |
— |
1 |
Total Spot
Fleet |
55 |
5 |
60 |
Total Conventional Fleet |
57 |
5 |
62 |
STS Support Vessels |
3 |
3 |
6 |
Total Teekay
Tankers' Fleet |
60 |
8 |
68 |
- Includes three Aframax tankers with charter-in contracts that
are scheduled to expire in November 2019, December 2019 and March
2021, respectively.
- Includes two LR2 product tankers with charter-in contracts that
are scheduled to expire in January 2021, each with an option to
extend for one year.
- The Company’s ownership interest in this vessel is 50
percent.
Liquidity Update
As at December 31, 2018, the Company had
total liquidity of $66.7 million (comprised of $54.9 million in
cash and cash equivalents and $11.8 million in undrawn revolving
credit facilities) compared to total liquidity of $89.2 million as
at September 30, 2018. The Company’s liquidity as at December 31,
2018 does not reflect Teekay Tankers' loan to finance working
capital for the Company's RSA pool management operations, which
will contribute approximately $20 million of liquidity when fully
drawn. Due to timing of various receipts and payments, the
Company’s working capital balances were temporarily elevated at
December 31, 2018, resulting in temporarily low liquidity. As of
February 20, 2019, the Company had total liquidity of approximately
$115 million, which does not reflect the signed term sheet for a
sale-leaseback transaction announced today, which is expected to
add approximately $25 million of additional liquidity.
Conference Call
The Company plans to host a conference call on
Thursday, February 21, 2019 at 1:00 p.m. (ET) to discuss its fourth
quarter and annual 2018 results. All shareholders and interested
parties are invited to listen to the live conference call by
choosing from the following options:
- By dialing (888) 204-4368 or (647) 484-0478, if outside of
North America, and quoting conference ID code 7631598.
- By accessing the webcast, which will be available on Teekay
Tankers’ website at www.teekay.com (the archive will remain on
the website for a period of one year).
An accompanying Fourth Quarter Earnings
Presentation will also be available at www.teekay.com in
advance of the conference call start time.
About Teekay Tankers
Teekay Tankers currently owns a fleet of 42
double-hull tankers, including 25 Suezmax tankers, nine Aframax
tankers, eight Long Range 2 (LR2) product tankers, and three
ship-to-ship support vessels, and has five Suezmax tankers, eight
Aframax tankers, and one LR2 product tanker related to capital
leases and eight contracted time charter-in vessels. Teekay
Tankers’ vessels are typically employed through a mix of short- or
medium-term fixed rate time charter contracts and spot tanker
market trading. The Company also owns a Very Large Crude Carrier
(VLCC) through a 50 percent-owned joint venture. In addition,
Teekay Tankers owns a ship-to-ship transfer business. Teekay
Tankers was formed in December 2007 by Teekay Corporation as part
of its strategy to expand its conventional oil tanker business.
Teekay Tankers’ common stock trades on the New
York Stock Exchange under the symbol “TNK.”
For Investor Relationsenquiries
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 Adjusted Net Income (Loss), Cash
Flow from Vessel Operations, Free Cash Flow, and Net Revenues 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 definitions across companies, and therefore may not be
comparable to similar measures presented by other companies.
These non-GAAP measure are used by management, and the Company
believes that these supplemental metrics assist investors and other
users of its financial reports in comparing financial and operating
performance of the Company across reporting periods and with other
companies.
Non-GAAP Financial Measures
Adjusted net income (loss) excludes items of
income or loss from GAAP net income (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 income (loss), the most directly comparable GAAP measure
reflected in the Company’s consolidated financial statements.
Cash flow from vessel operations (CFVO)
represents income (loss) from operations before depreciation and
amortization expense, amortization of in-process revenue contracts,
vessel write-downs, and gains or losses on the sale of vessels and
equipment. 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 the 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 entity 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 of this release for
reconciliations of these non-GAAP financial measures to income from
vessel operations and income from vessel operations of
equity-accounted investments, respectively, the most directly
comparable GAAP measures reflected in the Company’s consolidated
financial statements.
Free cash flow (FCF) represents net income
(loss), plus depreciation and amortization, unrealized losses from
derivatives, certain non-cash items, FCF from equity-accounted
investments, loss on sales of vessels, and any write-offs or other
non-recurring items, less unrealized gains from derivatives, equity
income from the equity-accounted investments, gain on sales of
vessels and certain other non-cash items. The Company includes FCF
from equity-accounted investments as a component of its FCF. FCF
from the equity-accounted investments represents the Company’s
proportionate share of FCF from its equity-accounted investments.
The Company does not control its equity-accounted investments, and
as a result, the Company does not have the unilateral ability to
determine whether the cash generated by its equity-accounted
investments is retained within the entity 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 FCF as a liquidity
measure as the amount contributed from FCF from the
equity-accounted investments may not be available to the Company in
the periods such FCF is generated by the equity-accounted
investments. FCF is a non-GAAP financial measure used by certain
investors and management to evaluate the Company’s financial and
operating performance and to assess the Company’s ability to
generate cash sufficient to repay debt, pay dividends and undertake
capital and dry dock expenditures. Please refer to Appendix B to
this release for a reconciliation of this non-GAAP financial
measure to net (loss) income, the most directly comparable GAAP
financial measure reflected in the Company’s consolidated financial
statements.
Entities under common control represent a
transfer of a business between entities under common control. As a
result, Teekay Tankers consolidated financial statements prior to
the date the interests in these entities were actually acquired by
the Company are retroactively adjusted to include the results of
these entities during the periods they were under common control of
Teekay Corporation and had begun operations.
Net revenues represent revenues less voyage
expenses. Because the amount of voyage expenses the Company incurs
for a particular charter depends upon the type of the charter, the
Company uses net revenues to improve the comparability between
periods of reported revenues that are generated by the different
types of charters and contracts. The Company principally uses net
revenues, a non-GAAP financial measure, because the Company
believes it provides more meaningful information about the
deployment of the Company's vessels and their performance than does
revenues, the most directly comparable financial measure under
GAAP.
Important Notice to Reader
Effective January 1, 2018, the Company adopted
the new revenue accounting standard, which had no impact on net
loss but a material effect on revenues and voyage expenses since
adoption. Prior to January 1, 2018, the Company presented the net
allocation for its vessels participating in RSAs as net pool
revenues. The Company has determined that it is the principal in
voyages its vessels perform that are included in the RSAs. As such,
commencing January 1, 2018, the Company presents revenue from those
voyages in voyage charter revenues and the difference between this
amount and the Company's net allocation from the RSA is presented
as voyage expenses. This had the effect of increasing both voyage
charter revenues and voyage expenses for the three months ended
December 31, 2018 and September 30, 2018 and the year ended
December 31, 2018 by $90.2 million, $73.6 million, and $292.6
million, respectively.
Teekay Tankers Ltd.Summary Consolidated
Statements of Income (Loss)(in thousands of U.S. dollars,
except share and per share data)
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
|
December 31, |
December 31, |
|
|
|
2018 |
2018 |
2017 |
|
2018 |
2017 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
(unaudited) |
(unaudited)(1) |
|
|
|
|
|
|
|
|
|
|
Voyage
charter revenues (2)(4) |
219,371 |
|
152,047 |
|
30,893 |
|
|
651,388 |
|
125,774 |
|
|
Time-charter revenues |
8,039 |
|
12,326 |
|
26,998 |
|
|
59,786 |
|
112,100 |
|
|
Other
revenues (3) |
12,314 |
|
11,542 |
|
11,374 |
|
|
44,589 |
|
53,368 |
|
|
Net pool revenues (4) |
— |
|
— |
|
35,964 |
|
|
— |
|
139,936 |
|
|
Total revenues |
239,724 |
|
175,915 |
|
105,229 |
|
|
755,763 |
|
431,178 |
|
|
|
|
|
|
|
|
|
|
|
Voyage
expenses (2)(4) |
(110,602 |
) |
(83,048 |
) |
(20,443 |
) |
|
(360,576 |
) |
(77,368 |
) |
|
Vessel
operating expenses |
(51,323 |
) |
(52,161 |
) |
(43,440 |
) |
|
(209,131 |
) |
(175,389 |
) |
|
Time-charter hire expense |
(4,841 |
) |
(4,317 |
) |
(3,202 |
) |
|
(19,538 |
) |
(30,661 |
) |
|
Depreciation and amortization |
(29,916 |
) |
(29,595 |
) |
(26,829 |
) |
|
(118,514 |
) |
(100,481 |
) |
|
General and
administrative expenses |
(11,836 |
) |
(8,747 |
) |
(8,004 |
) |
|
(39,775 |
) |
(32,879 |
) |
|
(Loss) gain
on sales of vessels |
— |
|
— |
|
(489 |
) |
|
170 |
|
(12,984 |
) |
|
Restructuring charges |
— |
|
(213 |
) |
— |
|
|
(1,195 |
) |
— |
|
|
Income (loss) from operations |
31,206 |
|
(2,166 |
) |
2,822 |
|
|
7,204 |
|
1,416 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
(16,987 |
) |
(15,006 |
) |
(9,613 |
) |
|
(58,653 |
) |
(31,294 |
) |
|
Interest
income |
311 |
|
250 |
|
163 |
|
|
879 |
|
907 |
|
|
Realized
and unrealized (loss) gain |
|
|
|
|
|
|
|
on derivative instruments (5) |
(1,693 |
) |
596 |
|
2,028 |
|
|
3,032 |
|
1,319 |
|
|
Equity
income (loss) (6) |
955 |
|
(359 |
) |
1,804 |
|
|
1,220 |
|
(25,370 |
) |
|
Other (expense) income |
(2,290 |
) |
(799 |
) |
917 |
|
|
(6,230 |
) |
(5,001 |
) |
|
Net income (loss) |
11,502 |
|
(17,484 |
) |
(1,879 |
) |
|
(52,548 |
) |
(58,023 |
) |
|
|
|
|
|
|
|
|
|
Loss per
share attributable |
|
|
|
|
|
|
|
|
to shareholders of
Teekay Tankers |
|
|
|
|
|
|
|
|
- Basic |
0.04 |
|
(0.07 |
) |
(0.01 |
) |
|
(0.20 |
) |
(0.31 |
) |
|
|
- Diluted |
0.04 |
|
(0.07 |
) |
(0.01 |
) |
|
(0.20 |
) |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of total common |
|
|
|
|
|
|
|
shares outstanding |
|
|
|
|
|
|
|
|
- Basic (1) |
268,558,556 |
|
268,558,556 |
|
212,107,100 |
|
|
268,492,922 |
|
187,235,377 |
|
|
|
- Diluted (1) |
268,759,554 |
|
268,558,556 |
|
212,107,100 |
|
|
268,492,922 |
|
187,235,377 |
|
|
|
|
|
|
|
|
|
|
|
Number of
outstanding shares of common stock at the end of the period |
268,558,556 |
|
268,558,556 |
|
268,201,638 |
|
|
268,558,556 |
|
268,201,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Prior to May 31, 2017, the Company owned 50 percent of Teekay
Tanker Operations Ltd. (TTOL) and accounted for this investment
using the equity method of accounting. The Company acquired the
remaining 50 percent of TTOL on May 31, 2017 from Teekay
Corporation, resulting in the Company owning 100 percent of TTOL
and consolidating its results. Periods prior to May 31, 2017 have
been recast to include 100 percent of TTOL's results on a
consolidated basis in accordance with common control accounting as
required under GAAP at that time. As a result, the weighted-average
number of common shares outstanding for periods prior to May 2017
has been retroactively adjusted to include the approximately 13.8
million shares of the Company's Class B common stock issued to
Teekay Corporation as consideration for the acquisition. The impact
of this recasting is referred to herein as the "Entities under
Common Control", and such amounts are summarized for the respective
periods in Appendix A.
- Voyage charter revenues include revenues earned from full
service lightering activities. Voyage expenses include certain
costs associated with full service lightering activities, which
include: short-term in-charter expenses, bunker fuel expenses and
other port expenses totaling $23.8 million, $12.4 million and $20.1
million for the three months ended December 31, 2018, September 30,
2018 and December 31, 2017, respectively, and $80.5 million and
$72.4 million for the years ended December 31, 2018 and December
31, 2017, respectively.
- Other revenues include lightering support and liquefied natural
gas services revenue, and pool management fees and commission
revenues earned from TTOL.
- Commencing January 1, 2018, the Company adopted Accounting
Standards Update 2014-09 as required under GAAP. Prior to January
1, 2018, the Company presented the net allocation for its vessels
participating in RSAs as net pool revenues. The Company has
determined that it is the principal in voyages its vessels perform
that are included in the RSAs. As such, commencing January 1, 2018,
revenue from those voyages is presented in voyage charter revenues
and the difference between this amount and the Company's net
allocation from the RSA is presented as voyage expenses. This had
the impact of increasing both voyage charter revenues and voyage
expenses for the three months ended December 31, 2018 and September
30, 2018 and the year ended December 31, 2018 by $90.2 million,
$73.6 million, and $292.6 million, respectively. This change has
been adopted prospectively from January 1, 2018.
- Includes realized losses and gains relating to interest rate
swaps entered into by the Company. For the three months ended
December 31, 2018, September 30, 2018 and December 31, 2017, the
Company recognized a realized gain on its interest rate swaps of
$0.7 million, a realized gain of $0.7 million and a realized loss
of $0.1 million, respectively, and a realized gain of $2.3 million
and a realized loss of $1.0 million for the years ended December
31, 2018 and 2017, respectively. The Company recognized a realized
gain relating to a time-charter swap agreement of $1.1 million for
the year ended December 31, 2017. The Company also recognized a
realized gain of $0.3 million, a realized loss of $0.1 million and
a realized loss of $77 thousand for the three months ended December
31, 2018, September 30, 2018 and December 31, 2017, respectively,
and a realized gain of $0.1 million and $0.3 million for the years
ended December 31, 2018 and 2017, respectively, relating to its
forward freight agreements.
- Included in equity income (loss) are the Company’s 50 percent
interest in the High-Q Investment Ltd. (High-Q) joint venture,
which owns one VLCC tanker, its 50 percent interest in Gemini
Tankers L.L.C. (until March 2018, when the remaining capital was
returned to the Company), and its proportionate 11.3 percent share
of earnings from its investment in Tanker Investments Ltd. (TIL)
until November 27, 2017, when the Company completed a merger with
TIL. From that date, TIL became a wholly-owned subsidiary of
the Company, and it has been consolidated.
Components of equity income (loss) are detailed
in the table below:
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
High-Q
Joint Venture |
955 |
|
|
(359 |
) |
|
735 |
|
|
1,220 |
|
|
3,072 |
|
|
Tanker
Investments Ltd. |
— |
|
|
— |
|
|
(322 |
) |
|
— |
|
|
(1,706 |
) |
|
Fair value
adjustment of |
|
|
|
|
|
|
|
|
|
|
|
Tanker Investments Ltd.
(i) |
— |
|
|
— |
|
|
1,391 |
|
|
— |
|
|
(26,733 |
) |
|
Gemini Tankers L.L.C. |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3 |
) |
|
Total equity income (loss) |
955 |
|
|
(359 |
) |
|
1,804 |
|
|
1,220 |
|
|
(25,370 |
) |
|
- As part of the accounting for the TIL merger, GAAP treats the
Company's existing equity investment in TIL as being disposed of at
its existing fair value and concurrently repurchased at such fair
value, which is included in the cost of the acquisition of the 100
percent controlling interest in TIL. In June 2017, it was
determined at that time that recovery of the carrying value of the
Company's investment in TIL prior to closing of the merger would be
unlikely. Consequently, a non-cash impairment of $28.1 million was
required under GAAP to be recognized in the three months ended June
30, 2017 based on the difference between the carrying value of the
investment at June 30, 2017 and its fair value based on the TIL
share price on that date. On the completion of the merger with TIL
in the fourth quarter of 2017, a gain of $1.4 million was recorded
on the revaluation of the Company's equity-accounted investment in
TIL to fair value at the time.
|
Teekay Tankers Ltd. |
Summary Consolidated Balance Sheets |
(in
thousands of U.S. dollars) |
|
|
|
|
|
As at |
As at |
As at |
|
December 31, |
September 30, |
December 31, |
|
2018 |
2018 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents |
54,917 |
|
|
54,361 |
|
|
71,439 |
|
|
Restricted cash |
2,153 |
|
|
1,794 |
|
|
1,599 |
|
|
Pool receivable from
affiliates |
56,549 |
|
|
26,923 |
|
|
15,550 |
|
|
Accounts
receivable |
17,365 |
|
|
17,048 |
|
|
19,288 |
|
|
Due from
affiliates |
39,663 |
|
|
50,551 |
|
|
49,103 |
|
|
Current portion of
derivative assets |
2,905 |
|
|
3,075 |
|
|
1,016 |
|
|
Prepaid expenses |
34,096 |
|
|
22,662 |
|
|
18,690 |
|
|
Other current
assets |
17,943 |
|
|
1,385 |
|
|
— |
|
|
Restricted cash –
long-term |
3,437 |
|
|
2,672 |
|
|
2,672 |
|
|
Vessels and equipment –
net |
1,401,551 |
|
|
1,556,959 |
|
|
1,737,792 |
|
|
Vessels related to
capital leases – net |
482,010 |
|
|
340,961 |
|
|
227,722 |
|
|
Investment in and
advances to equity-accounted |
|
|
|
|
|
|
investments |
25,766 |
|
|
24,811 |
|
|
25,460 |
|
|
Derivative assets |
2,973 |
|
|
5,531 |
|
|
4,226 |
|
|
Intangible assets –
net |
11,625 |
|
|
12,320 |
|
|
14,605 |
|
|
Other non-current
assets |
74 |
|
|
82 |
|
|
127 |
|
|
Goodwill |
8,059 |
|
|
8,059 |
|
|
8,059 |
|
|
Total assets |
2,161,086 |
|
|
2,129,194 |
|
|
2,197,348 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
Accounts payable and
accrued liabilities |
52,002 |
|
|
41,069 |
|
|
42,468 |
|
|
Current portion of
long-term debt |
106,236 |
|
|
103,843 |
|
|
166,745 |
|
|
Current portion of
derivative liabilities |
57 |
|
|
— |
|
|
— |
|
|
Current obligation
related to capital leases |
20,896 |
|
|
15,839 |
|
|
7,227 |
|
|
Deferred revenue |
— |
|
|
89 |
|
|
557 |
|
|
Due to affiliates |
18,570 |
|
|
18,391 |
|
|
19,717 |
|
|
Long-term debt |
629,170 |
|
|
703,235 |
|
|
785,557 |
|
|
Long-term obligation
related to capital leases |
354,393 |
|
|
280,871 |
|
|
141,681 |
|
|
Other long-term
liabilities |
32,829 |
|
|
30,646 |
|
|
26,795 |
|
|
Equity |
946,933 |
|
|
935,211 |
|
|
1,006,601 |
|
|
Total liabilities and equity |
2,161,086 |
|
|
2,129,194 |
|
|
2,197,348 |
|
|
|
|
Teekay Tankers Ltd. |
Summary Consolidated Statements of Cash Flows |
(in
thousands of U.S. dollars) |
|
|
Year Ended |
|
December 31, |
December 31, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited)(1) |
Cash, cash
equivalents and restricted cash (used for) provided by |
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
(52,548 |
) |
|
(58,023 |
) |
|
Non-cash
items: |
|
|
|
|
Depreciation and amortization |
118,514 |
|
|
100,481 |
|
|
(Gain) loss on sales of vessels |
(170 |
) |
|
12,984 |
|
|
Unrealized gain on derivative instruments |
(579 |
) |
|
(937 |
) |
|
Equity (income) loss |
(1,220 |
) |
|
25,370 |
|
|
Other |
11,664 |
|
|
8,093 |
|
|
Change in
operating assets and liabilities |
(54,952 |
) |
|
6,590 |
|
|
Expenditures for dry docking |
(27,972 |
) |
|
(14,069 |
) |
|
Net operating cash flow |
(7,263 |
) |
|
80,489 |
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds
from long-term debt, net of issuance costs |
81,397 |
|
|
232,825 |
|
|
Repayments
of long-term debt |
(165,365 |
) |
|
(109,006 |
) |
|
Prepayment
of long-term debt |
(137,717 |
) |
|
(443,796 |
) |
|
Proceeds
from financing related to sales and leaseback of vessels |
241,339 |
|
|
153,000 |
|
|
Scheduled
repayments of obligation related to capital leases |
(14,958 |
) |
|
(4,090 |
) |
|
Cash
dividends paid |
(8,052 |
) |
|
(20,679 |
) |
|
Proceeds
from equity offerings, net of offering costs |
— |
|
|
8,521 |
|
|
Proceeds
from issuance of common stock, net of share issuance costs |
— |
|
|
5,000 |
|
|
Other |
(92 |
) |
|
(241 |
) |
|
Net financing cash flow |
(3,448 |
) |
|
(178,466 |
) |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Proceeds
from sales of vessels |
589 |
|
|
52,131 |
|
|
Expenditures for vessels and equipment |
(5,827 |
) |
|
(4,732 |
) |
|
Return of
capital from equity-accounted investment |
746 |
|
|
— |
|
|
Loan
repayments from equity-accounted investment |
— |
|
|
550 |
|
|
Cash acquired in TIL acquisition, net of transaction
fees |
— |
|
|
30,831 |
|
|
Net investing cash flow |
(4,492 |
) |
|
78,780 |
|
|
|
|
|
|
|
Decrease in
cash, cash equivalents and restricted cash |
(15,203 |
) |
|
(19,197 |
) |
|
Cash, cash equivalents and restricted cash, beginning
of the year |
75,710 |
|
|
94,907 |
|
|
Cash, cash equivalents and restricted cash, end
of the year |
60,507 |
|
|
75,710 |
|
|
- See note 1 to the Summary Consolidated Statements of Income
(Loss) included in this release for further details.
|
|
Teekay Tankers Ltd. |
Appendix A - Reconciliation of Non-GAAP Financial
Measures |
Adjusted Net Income (Loss) |
(in
thousands of U.S. dollars, except per share amounts) |
|
|
|
Three Months Ended |
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
$ |
$ PerShare(1) |
|
$ |
$ PerShare(1) |
|
Net income (loss) - GAAP basis |
11,502 |
|
|
$0.04 |
|
|
(1,879 |
) |
|
($0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add specific items affecting
net loss: |
|
|
|
|
|
|
|
|
|
Loss on sale of
vessels |
— |
|
|
— |
|
|
489 |
|
|
— |
|
|
|
Unrealized loss (gain)
on derivative instruments (3) |
2,708 |
|
|
$0.01 |
|
|
(2,205 |
) |
|
($0.01 |
) |
|
|
Other (4) |
(208 |
) |
|
— |
|
|
(2,344 |
) |
|
($0.01 |
) |
|
Total
adjustments |
2,500 |
|
|
$0.01 |
|
|
(4,060 |
) |
|
($0.02 |
) |
|
Adjusted net income (loss) attributable to shareholders of
Teekay |
|
|
|
|
|
|
|
|
|
Tankers |
14,002 |
|
|
$0.05 |
|
|
(5,939 |
) |
|
($0.03 |
) |
|
|
|
Year Ended |
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
$ |
|
$ PerShare(1) |
|
$ |
|
$ PerShare(1) |
|
Net loss -
GAAP basis |
(52,548 |
) |
|
($0.20 |
) |
|
(58,023 |
) |
|
($0.31 |
) |
|
Subtract: |
|
|
|
|
|
|
|
|
|
Net income
attributable to the Entities under Common Control (2) |
— |
|
|
— |
|
|
(1,303 |
) |
|
($0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
shareholders of Teekay Tankers |
(52,548 |
) |
|
($0.20 |
) |
|
(59,326 |
) |
|
($0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add specific items affecting
net loss: |
|
|
|
|
|
|
|
|
|
(Gain) loss on sale of
vessels |
(170 |
) |
|
— |
|
|
12,984 |
|
|
$0.07 |
|
|
|
Unrealized gain on
derivative instruments (3) |
(579 |
) |
|
— |
|
|
(937 |
) |
|
($0.01 |
) |
|
|
Other (4) |
(1,421 |
) |
|
— |
|
|
27,334 |
|
|
$0.15 |
|
|
Total
adjustments |
(2,170 |
) |
|
— |
|
|
39,381 |
|
|
$0.21 |
|
|
Adjusted net loss
attributable to shareholders of Teekay |
|
|
|
|
|
|
|
|
|
Tankers |
(54,718 |
) |
|
($0.20 |
) |
|
(19,945 |
) |
|
($0.11 |
) |
|
- Basic per share amounts.
- See note 1 to the Summary Consolidated Statements of Income
(Loss) included in this release for further details.
- Reflects unrealized gains or losses due to the changes in the
mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes, including unrealized
gains or losses on interest rate swaps, forward freight agreements,
a time-charter swap and a TIL common stock purchase warrant that
was related to the period prior to the merger.
- The amount recorded for the year ended December 31, 2018
primarily relates to foreign exchange gains, debt issuance costs
which were written off in connection with the refinancing of the
Company's debt facilities, freight tax accruals from prior years
and restructuring charges. The amount recorded for the year
ended December 31, 2017 include the unrealized derivative gains and
losses in joint ventures, foreign exchange gains and losses, a net
adjustment of $1.0 million related to a reversal of the fair value
differential from the TIL merger associated with the loans
refinanced in December 2017, a $28.1 million impairment recognized
on its equity investment in TIL in the second quarter of 2017, and
a $1.4 million gain in the fourth quarter of 2017 to reflect the
revaluation of the equity-accounted investment at the date of the
TIL merger.
|
|
Teekay Tankers Ltd. |
Appendix B - Reconciliation of Non-GAAP Financial
Measures |
Free Cash Flow |
(in
thousands of U.S. dollars, except share data) |
|
|
|
|
Three Months Ended |
Year Ended |
|
|
|
December 31,2018 |
December 31,2017 |
December 31,2018 |
December 31,2017 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) - GAAP basis |
11,502 |
|
|
(1,879 |
) |
|
(52,548 |
) |
|
(58,023 |
) |
|
|
Subtract: |
|
|
|
|
|
|
|
|
|
|
Net income
attributable to the Entities under Common Control (1) |
— |
|
|
— |
|
|
— |
|
|
(1,303 |
) |
|
Net
income (loss) attributable to shareholders of Teekay
Tankers |
11,502 |
|
|
(1,879 |
) |
|
(52,548 |
) |
|
(59,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
29,916 |
|
|
26,829 |
|
|
118,514 |
|
|
100,481 |
|
|
|
|
Proportionate share of
free cash flow from equity-accounted investments |
1,409 |
|
|
1,429 |
|
|
2,983 |
|
|
8,284 |
|
|
|
|
Unrealized loss on
derivative instruments |
2,708 |
|
|
— |
|
|
2,708 |
|
|
1,700 |
|
|
|
|
Loss on sales of
vessels |
— |
|
|
489 |
|
|
— |
|
|
12,984 |
|
|
|
|
Equity loss (2) |
— |
|
|
— |
|
|
— |
|
|
24,063 |
|
|
|
|
Other |
— |
|
|
— |
|
|
— |
|
|
2,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Equity income (2) |
(955 |
) |
|
(1,804 |
) |
|
(1,220 |
) |
|
— |
|
|
|
|
Unrealized gain on
derivative instruments |
— |
|
|
(2,205 |
) |
|
(3,287 |
) |
|
(2,636 |
) |
|
|
|
Gain on sale of
vessels |
— |
|
|
— |
|
|
(170 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow |
44,580 |
|
|
22,859 |
|
|
66,980 |
|
|
87,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding for the period
- basic |
268,558,556 |
|
|
212,107,100 |
|
|
268,492,922 |
|
|
187,235,377 |
|
|
|
|
|
|
|
|
|
|
|
- See note 1 to the Summary Consolidated Statements of Income
(Loss) included in this release for further details.
- Included in equity (income) loss is the Company’s 50 percent
interest in the High-Q joint venture, which owns one VLCC
tanker. For the three months ended December 31, 2017, equity
income also included the Company's proportionate 11.3 percent share
of earnings from its investment in TIL prior to the TIL merger. For
the year ended December 31, 2017, equity loss also included the
Company's 50 percent interest in Gemini Tankers L.L.C., its
proportionate 11.3 percent share of earnings from its investment in
TIL prior to the TIL merger and excludes equity income associated
with TTOL as it is now consolidated (see note 1 to the Summary
Consolidated Statements of Income (Loss) included in this release
for further details).
|
|
Teekay Tankers Ltd. |
Appendix C - Reconciliation of Non-GAAP Financial
Measures |
Cash Flow from Vessel Operations -
Consolidated |
(in
thousands of U.S. dollars) |
|
|
Three Months Ended |
Year Ended |
|
December 31,2018 |
September
30,2018 |
December 31,2017 |
December 31,2018 |
December 31,2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Income (loss) from
operations - GAAP basis |
31,206 |
|
(2,166 |
) |
2,822 |
|
7,204 |
|
1,416 |
|
Depreciation and
amortization |
29,916 |
|
29,595 |
|
26,829 |
|
118,514 |
|
100,481 |
|
Loss
(gain) on sale of vessels |
— |
|
— |
|
489 |
|
(170 |
) |
12,984 |
|
CFVO –
Consolidated |
61,122 |
|
27,429 |
|
30,140 |
|
125,548 |
|
114,881 |
|
Less: CFVO attributable to the Entities under Common
Control |
— |
|
— |
|
— |
|
— |
|
(2,546 |
) |
CFVO – Equity
Investments (See this Appendix C) |
1,132 |
|
321 |
|
1,994 |
|
3,322 |
|
10,803 |
|
Total CFVO |
62,254 |
|
27,750 |
|
32,134 |
|
128,870 |
|
123,138 |
|
|
|
Teekay Tankers Ltd. |
Appendix C - Reconciliation of Non-GAAP Financial
Measures |
Cash Flow from Vessel Operations - Equity-Accounted
Investments |
(in
thousands of U.S. dollars) |
|
|
Three Months Ended |
|
December 31, 2018 |
September 30, 2018 |
December 31, 2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
|
At |
Company's |
At |
Company's |
At |
Company's |
|
100% |
Portion (1) |
100% |
Portion (1) |
100% |
Portion (1) |
Revenues |
2,851 |
|
1,426 |
|
1,363 |
|
682 |
|
19,237 |
|
3,509 |
|
Vessel and other
operating expenses |
(588 |
) |
(294 |
) |
(722 |
) |
(361 |
) |
(10,739 |
) |
(1,515 |
) |
Depreciation and
amortization |
(908 |
) |
(454 |
) |
(903 |
) |
(452 |
) |
(6,316 |
) |
(1,035 |
) |
Income (loss) from vessel operations of equity-accounted
investments |
1,355 |
|
678 |
|
(262 |
) |
(131 |
) |
2,182 |
|
959 |
|
Interest expense |
(451 |
) |
(226 |
) |
(456 |
) |
(228 |
) |
(3,137 |
) |
(507 |
) |
Realized and unrealized
gain on derivative instruments |
— |
|
— |
|
— |
|
— |
|
21 |
|
11 |
|
Other |
1,006 |
|
503 |
|
— |
|
— |
|
(445 |
) |
(50 |
) |
Equity income (loss) of equity-accounted vessels
(2) |
1,910 |
|
955 |
|
(718 |
) |
(359 |
) |
(1,379 |
) |
413 |
|
|
|
|
|
|
|
|
Income (loss) from
vessel operations of equity-accounted investments |
1,355 |
|
678 |
|
(262 |
) |
(131 |
) |
2,182 |
|
959 |
|
Depreciation and
amortization |
908 |
|
454 |
|
903 |
|
452 |
|
6,316 |
|
1,035 |
|
Cash flow from vessel operations of equity-accounted
investments |
2,263 |
|
1,132 |
|
641 |
|
321 |
|
8,498 |
|
1,994 |
|
- The Company’s proportionate share of its equity-accounted
vessels and other investments ranges from 11.3 percent to 50
percent.
- For the three months ended December 31, 2017, the Company's
portion of equity income excludes a $1.4 million gain in the fourth
quarter of 2017 to reflect the revaluation of the Company's
equity-accounted investment in TIL at the date of the TIL
merger.
|
|
Teekay Tankers Ltd. |
Appendix C - Reconciliation of Non-GAAP Financial
Measures |
Cash Flow from Vessel Operations - Equity-Accounted
Investments |
(in
thousands of U.S. dollars) |
|
|
Year Ended |
|
December 31, 2018 |
December 31, 2017 |
|
(unaudited) |
(unaudited) |
|
At |
Company's |
At |
Company's |
|
100% |
Portion (1) |
100% |
Portion (1) |
Revenues |
9,601 |
|
4,801 |
|
107,689 |
|
17,470 |
|
Vessel and other
operating expenses |
(2,958 |
) |
(1,479 |
) |
(58,429 |
) |
(6,667 |
) |
Depreciation and
amortization |
(3,490 |
) |
(1,745 |
) |
(35,072 |
) |
(5,250 |
) |
Income from vessel operations of equity-accounted investments |
3,153 |
|
1,577 |
|
14,188 |
|
5,553 |
|
Interest expense |
(1,751 |
) |
(876 |
) |
(17,436 |
) |
(2,569 |
) |
Realized and unrealized
gain on derivative instruments |
32 |
|
16 |
|
27 |
|
14 |
|
Other |
1,006 |
|
503 |
|
(3,140 |
) |
(330 |
) |
Equity income (loss) of equity-accounted vessels
(2) |
2,440 |
|
1,220 |
|
(6,361 |
) |
2,668 |
|
|
|
|
|
|
Income from vessel
operations of equity-accounted investments |
3,153 |
|
1,577 |
|
14,188 |
|
5,553 |
|
Depreciation and
amortization |
3,490 |
|
1,745 |
|
35,072 |
|
5,250 |
|
Cash flow from vessel operations of equity-accounted
investments |
6,643 |
|
3,322 |
|
49,260 |
|
10,803 |
|
- The Company’s proportionate share of its equity-accounted
vessels and other investments ranges from 11.3 percent to 50
percent.
- For the year ended December 31, 2017, the Company's portion of
equity income excludes the net write-down of $26.7 million
recognized on the Company's equity-accounted investment in TIL and
includes equity income associated with TTOL through May 31, 2017
(see note 1 to the Summary Consolidated Statements of Income (Loss)
included in this release for further details).
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, among other
things, statements regarding: the timing and certainty of
completing the sale-leaseback transaction for two vessels and the
effect of the transaction, as well as other recent financing
transactions, on the Company’s liquidity and future debt maturity
profile; crude oil and refined product tanker market fundamentals,
including the balance of supply and demand in the tanker market,
the occurrence and expected timing of a stronger tanker market in
the second half of 2019 and into 2020, forecasts of worldwide
tanker fleet growth, the amount of tanker scrapping, estimated
growth in global oil demand and supply, future OPEC oil supply, the
impact of U.S. and Venezuelan crude oil production and exports on
mid-size tanker demand, the impact of new pipeline capacity in the
U.S. Gulf Coast, and estimated impact of IMO 2020 regulations; and
the Company’s ability to benefit from a strengthening tanker
market. 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: the potential for
early termination of charter contracts of existing vessels in the
Company's fleet; the inability of charterers to make future charter
payments; the inability of the Company to renew or replace charter
contracts; changes in tanker rates; changes in the production of,
or demand for, oil or refined products; changes in trading patterns
significantly affecting overall vessel tonnage requirements;
greater or less than anticipated rates of tanker scrapping; changes
in global oil prices; changes in applicable industry laws and
regulations and the timing of implementation of new laws and
regulations and the impact of such changes; increased costs;
failure to complete the sale-leaseback transaction; and other
factors discussed in Teekay Tankers’ filings from time to time with
the United States Securities and Exchange Commission, including its
Annual Report on Form 20-F for the fiscal year ended December 31,
2017. The Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company’s
expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is
based.
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