Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the quarter ended June 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 second 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 |
| |
June
30, |
March
31, |
June
30, |
| |
2019 |
2019 |
2018 |
| (in thousands of U.S. dollars, except
per share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
| TEEKAY CORPORATION
CONSOLIDATED |
|
|
| GAAP FINANCIAL COMPARISON |
|
|
|
| Revenues |
457,667 |
|
481,213 |
|
405,642 |
|
| Income from vessel
operations |
71,463 |
|
84,232 |
|
1,921 |
|
| Equity (loss)
income |
(6,284 |
) |
(61,653 |
) |
837 |
|
| Net loss
attributable to shareholders of Teekay |
(39,485 |
) |
(84,257 |
) |
(28,324 |
) |
| Loss per share attributable to shareholders of
Teekay |
(0.39 |
) |
(0.84 |
) |
(0.28 |
) |
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Total Adjusted EBITDA(1) |
196,609 |
|
236,960 |
|
164,197 |
|
| Adjusted Net Loss attributable to shareholders of
Teekay(1) |
(13,368 |
) |
(12,955 |
) |
(21,555 |
) |
| Adjusted Net Loss per share attributable to
shareholders of Teekay(1) |
(0.13 |
) |
(0.13 |
) |
(0.21 |
) |
| TEEKAY PARENT |
|
|
|
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Teekay Parent
Adjusted EBITDA(1) |
3,427 |
|
(1,802 |
) |
16,641 |
|
| Total Teekay
Parent Free Cash Flow(1) |
(6,427 |
) |
(13,763 |
) |
798 |
|
(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).
CEO Commentary
“In the second quarter of 2019, our total
adjusted EBITDA increased by $32 million, or 20%, from the same
period of the prior year, primarily driven by the delivery of
various growth projects at Teekay LNG, higher charter rates on
certain LNG carriers, higher spot tanker rates and lower general
and administrative (G&A) expenses,” commented Kenneth Hvid,
Teekay’s President and Chief Executive Officer. “Looking
ahead, although we expect continued cash flow growth from our gas
business, our third quarter results are expected to be weaker
primarily as a result of scheduled maintenance for two of our FPSO
units and lower spot tanker rates partly due to seasonal factors.
However, looking to the fourth quarter, we expect our FPSO units to
be back up to normal capacity and the tanker market fundamentals
continue to support a stronger tanker market in the latter part of
2019 and into 2020.”
“Teekay LNG continues to report cash flow growth
driven by newbuilding deliveries and higher charter rates on
certain LNG carriers and is executing its balanced capital
allocation plan, which currently prioritizes delevering while
opportunistically repurchasing common units below its intrinsic
value.”
“Teekay Tankers experienced seasonally weaker
spot tanker rates compared to the first quarter; however, tanker
rates were significantly higher when compared to the same period of
the prior year, reflecting tightening tanker market fundamentals,
which continue to support a tanker market recovery that should
increase both cash flows and asset values.”
“Teekay Parent reported slightly better than
expected overall results for its FPSO units as a result of higher
production and oil prices for the Banff and Hummingbird Spirit FPSO
units, partially offset by lower production and higher operating
expenses on the Foinaven FPSO unit. In addition, Teekay Parent also
reduced its gross debt by $223 million from last quarter with the
completion of its bond refinancing and divestment of its remaining
interests in Teekay Offshore in May 2019.”
Mr. Hvid continued, “We have also reduced our
G&A expenses at the consolidated and Teekay Parent level, which
are down in the second quarter of this year by 15% and 30%,
respectively, compared to the same period of the prior year.
In closing, we look forward to presenting at our Teekay Group
Investor Day on October 2, 2019 in New York where we will cover the
strategy, financial position and market outlook for the Teekay
Group.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended June 30, 2019, compared to the same period of the
prior year, were positively impacted primarily by higher earnings
in Teekay LNG due to the delivery and contract start-up of several
newbuildings during the past year as well as higher revenues earned
from certain existing LNG carriers and multi-gas vessels, and
higher earnings in Teekay Tankers primarily as a result of an
increase in average spot tanker rates.
These increases were partially offset primarily
by lower revenues from Teekay Parent's three directly-owned
floating production, storage and offloading (FPSO) units in the
second quarter of 2019, compared to the same period of the prior
year, as a result of lower oil production and average oil prices,
higher unplanned shutdowns, and lower revenues recognized in the
second quarter of 2019 due to timing differences resulting from the
adoption of the new lease accounting standards effective January 1,
2019, as well as higher vessel operating costs as a result of the
timing of repair and maintenance activities.
In addition, GAAP net loss was positively
impacted in the three months ended June 30, 2019, compared to the
same quarter of the prior year, by a decrease of $32.8 million in
asset impairments, which decrease was partially offset by various
items, including a loss of $10.7 million related to the repurchase
of Teekay's 8.5% senior notes due 2020 (the 2020 Notes), a loss of
$7.8 million on the sale of Teekay Parent's remaining investment in
Teekay Offshore, an increase in foreign exchange losses, and an
increase in realized and unrealized losses on non-designated
derivative instruments.
Teekay Parent
Total Teekay Parent Free Cash Flow(1) was
negative $6.4 million during the second quarter of 2019, compared
to positive $0.8 million for the same period of the prior year
primarily due to: lower revenues for the Foinaven FPSO unit due to
lower production and higher unplanned maintenance in the second
quarter of 2019, higher operational expenses in preparation for a
scheduled maintenance shutdown in the third quarter of 2019, and,
as a result of the adoption of the new lease accounting standard in
2019, a deferral in 2019 of the recognition of approximately $2
million of additional incentive revenue related to the Foinaven
FPSO unit which would have been recognized in the second quarter of
2019 under the accounting standard in effect in 2018; lower
revenues from the Hummingbird Spirit FPSO unit due to lower
contractual production tariffs linked to oil prices in the second
quarter of 2019 compared to the same period in the prior year; and
lower cash distributions from Teekay Offshore as its distributions
were reduced to zero in January 2019. These decreases were
partially offset by a 36% increase in Teekay LNG’s quarterly
distribution in the first quarter of 2019, lower corporate general
and administrative expenses incurred in 2019, and lower interest
expense due to the repurchase of 2020 Notes over the past year and
the 2020 Note refinancing completed in May 2019. Please refer to
Appendix D of this release for additional information about Teekay
Parent's Free Cash Flow.
(1) This is a non-GAAP financial measures.
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 net income and total adjusted
EBITDA for the three months ended June 30, 2019, compared to the
same quarter of the prior year, were positively impacted by: the
deliveries of five wholly-owned LNG carrier newbuildings (the
Myrina, Megara, Bahrain Spirit, Sean Spirit and Yamal Spirit)
between May 2018 and January 2019; 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 second quarter of 2019; lower vessel operating expenses
due to the timing of expenditures; and the deliveries of two joint
venture LNG carrier newbuildings between July 2018 and January 2019
and two joint venture ARC7 LNG carrier newbuildings between
September 2018 and June 2019.
These increases were partially offset by an
increase in off-hire days in the second quarter of 2019 for certain
LNG carriers for repairs and a scheduled dry docking, the sales of
the European Spirit, African Spirit and Toledo Spirit conventional
tankers between October 2018 and January 2019, and scheduled dry
dockings and planned maintenance on certain vessels in one of
Teekay LNG's joint ventures.
In addition, GAAP net income was positively
impacted in the three months ended June 30, 2019, compared to
the same quarter of the prior year, by various items, including a
decrease in the write-down of vessels, which was partially offset
by increases in unrealized losses on non-designated derivative
instruments.
Please refer to Teekay LNG's second quarter 2019
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' net income and total adjusted
EBITDA for the three months ended June 30, 2019 increased compared
to the same period of the prior year, primarily due to higher
average spot tanker rates, which increase was partially offset by
more scheduled dry dockings and higher interest expense associated
with three sale-leaseback transactions that were completed between
September 2018 and May 2019.
In addition, GAAP net income was negatively
impacted by unrealized losses on non-designated derivative
instruments in the second quarter of 2019 compared to gains on
non-designated derivative instruments in the second quarter of
2018.
Please refer to Teekay Tankers' second quarter
2019 earnings release for additional information on the financial
results for this entity.
Summary of Recent Events
Teekay Parent
In late-April 2019, Teekay Parent agreed to sell
to Brookfield Business Partners L.P., together with its
institutional partners (collectively Brookfield), all of the
Company’s remaining interests in Teekay Offshore, which included
the Company’s 49% general partner interest, common units, warrants,
and an outstanding $25 million loan from Teekay Parent to Teekay
Offshore, for total cash proceeds of $100 million. The transaction
closed on May 8, 2019.
In May 2019, Teekay Parent completed a private
offering for $250 million in aggregate principal amount of 9.25%
senior secured notes due November 2022 (the Notes). The Notes are
guaranteed on a senior secured basis by certain of Teekay’s
subsidiaries and will initially be secured by first-priority liens
on two of Teekay Parent's FPSO units, the Petrojarl Banff and
Hummingbird Spirit, a pledge of the equity interests of the Teekay
subsidiary that owns all of Teekay’s common units of Teekay LNG and
all of Teekay’s Class A common shares of Teekay Tankers and a
pledge of the equity interests in the Teekay subsidiaries that own
its three FPSO units. In addition, Teekay Parent completed the
settlement of its cash tender offer to purchase its outstanding
2020 Notes, repurchasing $460.9 million of the $497.7 million
aggregate principal amount outstanding prior to the tender offer.
Of the $460.9 million of repurchases of the 2020 Notes, $458.0
million was repurchased for total consideration of $1,032.50 per
$1,000 of principal amount and $2.9 million was repurchased for
total consideration of $982.50 per $1,000 of principal amount.
In May 2019, Teekay Parent entered into an
agreement with CNR International (U.K.) Limited to extend the
employment of the Banff FPSO unit on the Banff field in
the North Sea for a period of one year to the end of August 2020 at
substantially similar terms to the previous contract.
Teekay LNG
In June 2019, Teekay LNG took delivery of the
third, 50 percent-owned ARC7 LNG carrier newbuilding, the Nikolay
Yevgenov, that immediately commenced its 27-year charter contract
servicing the Yamal LNG project.
In December 2018, the board of directors of
Teekay LNG's general partner approved a $100 million unit
repurchase program. Since that time, Teekay LNG has
repurchased a total of 1.43 million common units, or approximately
2% of the outstanding common units immediately prior to
commencement of the program, for a total cost of $16.9 million,
representing an average repurchase price of $11.86 per unit.
Liquidity
As at June 30, 2019, Teekay Parent had
total liquidity of approximately $186.8 million (consisting of
$74.9 million of cash and cash equivalents and $111.9 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity of approximately $643.7
million (consisting of $235.2 million of cash and cash equivalents
and $408.5 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).
Conference Call
The Company plans to host a conference call on
Thursday, August 1, 2019 at 1:00 p.m. (ET) to discuss its
results for the second quarter of 2019. All shareholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (877)-260-1479 or (647) 490-5367, if outside North
America, and quoting conference ID code 5752076.
- By accessing the webcast, which will be available on Teekay’s
website at www.teekay.com (the archive will remain on the website
for a period of one year).
An accompanying Second Quarter 2019 Earnings
Presentation will also be available at www.teekay.com in
advance of the conference call start time.
About Teekay
Teekay is a leading provider of international
crude oil and gas marine transportation services and also provides
offshore production and logistics. Teekay provides these services
primarily through its directly-owned fleet and its controlling
ownership interests in Teekay LNG Partners L.P. (NYSE:TGP), the
world’s third largest independent owner and operator of LNG
carriers, and Teekay Tankers Ltd. (NYSE:TNK), one of the world’s
largest owners and operators of mid-sized crude tankers. The
consolidated Teekay entities manage and operate total assets under
management of approximately $12 billion, comprised of approximately
155 liquefied gas, offshore, and conventional tanker assets. With
offices in 12 countries and approximately 5,600 seagoing and
shore-based employees, Teekay provides a comprehensive set of
marine services to the world’s leading oil and gas companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries contact:Ryan
HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial
Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the Securities and Exchange Commission (SEC). These non-GAAP
financial measures, which include, Adjusted Net Loss Attributable
to Shareholders of Teekay, Teekay Parent GPCO Free Cash Flow,
Teekay Parent Free Cash Flow, Net Interest Expense and Adjusted
Equity Income, and commencing in the first quarter of 2019,
Adjusted EBITDA, are intended to provide additional information and
should not be considered 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. 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 |
Six Months Ended |
|
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
|
|
2019 |
2019 |
2018 |
2019 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
|
|
| Revenues |
457,667 |
|
481,213 |
|
405,642 |
|
938,880 |
|
799,664 |
|
| |
|
|
|
|
|
| Voyage expenses |
(98,680 |
) |
(103,123 |
) |
(94,912 |
) |
(201,803 |
) |
(180,789 |
) |
| Vessel operating expenses |
(162,621 |
) |
(156,992 |
) |
(161,787 |
) |
(319,613 |
) |
(319,222 |
) |
| Time-charter hire expense |
(28,817 |
) |
(29,838 |
) |
(20,648 |
) |
(58,655 |
) |
(40,059 |
) |
| Depreciation and
amortization |
(73,849 |
) |
(72,107 |
) |
(67,960 |
) |
(145,956 |
) |
(135,271 |
) |
| General and administrative
expenses |
(20,868 |
) |
(22,972 |
) |
(24,470 |
) |
(43,840 |
) |
(49,153 |
) |
| Write-down and loss on sales
of vessels |
— |
|
(3,328 |
) |
(32,830 |
) |
(3,328 |
) |
(51,492 |
) |
| Restructuring charges |
(1,369 |
) |
(8,621 |
) |
(1,114 |
) |
(9,990 |
) |
(3,252 |
) |
|
Income from vessel operations |
71,463 |
|
84,232 |
|
1,921 |
|
155,695 |
|
20,426 |
|
| |
|
|
|
|
|
| Interest expense |
(70,205 |
) |
(73,671 |
) |
(59,526 |
) |
(143,876 |
) |
(114,151 |
) |
| Interest income |
2,233 |
|
2,689 |
|
2,095 |
|
4,922 |
|
3,772 |
|
| Realized and unrealized
(losses) gains on |
|
|
|
|
|
| non-designated
derivative instruments (1) |
(10,964 |
) |
(5,423 |
) |
10,723 |
|
(16,387 |
) |
20,149 |
|
| Equity (loss) income (2) |
(6,284 |
) |
(61,653 |
) |
837 |
|
(67,937 |
) |
27,954 |
|
| Income tax expense |
(3,404 |
) |
(5,036 |
) |
(8,746 |
) |
(8,440 |
) |
(12,863 |
) |
| Foreign exchange (loss)
gain |
(5,851 |
) |
(2,630 |
) |
12,529 |
|
(8,481 |
) |
12,551 |
|
| Loss on deconsolidation of
Teekay Offshore |
— |
|
— |
|
— |
|
— |
|
(7,070 |
) |
| Other
(loss) income – net (3) |
(11,099 |
) |
28 |
|
520 |
|
(11,071 |
) |
(395 |
) |
| Net loss |
(34,111 |
) |
(61,464 |
) |
(39,647 |
) |
(95,575 |
) |
(49,627 |
) |
| Net (income) loss attributable
to |
|
|
|
|
|
| non-controlling
interests |
(5,374 |
) |
(22,793 |
) |
11,323 |
|
(28,167 |
) |
748 |
|
|
Net loss attributable to the shareholders of |
|
|
|
|
|
|
Teekay Corporation |
(39,485 |
) |
(84,257 |
) |
(28,324 |
) |
(123,742 |
) |
(48,879 |
) |
| Loss per common share of
Teekay Corporation |
|
|
|
|
|
| - Basic and
diluted |
$ |
(0.39 |
) |
$ |
(0.84 |
) |
$ |
(0.28 |
) |
$ |
(1.23 |
) |
$ |
(0.49 |
) |
| Weighted-average number of
common |
|
|
|
|
|
| shares outstanding |
|
|
|
|
|
| - Basic and
diluted |
100,783,496 |
|
100,520,421 |
|
100,434,512 |
|
100,652,685 |
|
98,892,574 |
|
(1) 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 |
Six Months
Ended |
| |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
| |
|
2019 |
2019 |
2018 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Realized losses
relating to |
|
|
|
|
|
| |
Interest rate swap
agreements |
(1,785 |
) |
(1,688 |
) |
(4,031 |
) |
(3,473 |
) |
(8,840 |
) |
| |
Stock purchase
warrants(i) |
(25,559 |
) |
— |
|
— |
|
(25,559 |
) |
— |
|
| |
Forward
freight agreements |
(29 |
) |
(13 |
) |
(18 |
) |
(42 |
) |
(18 |
) |
|
|
|
(27,373 |
) |
(1,701 |
) |
(4,049 |
) |
(29,074 |
) |
(8,858 |
) |
| Unrealized
(losses) gains relating to |
|
|
|
|
|
| |
Interest rate swap
agreements |
(8,195 |
) |
(6,021 |
) |
8,532 |
|
(14,216 |
) |
24,451 |
|
| |
Foreign currency forward
contracts |
(101 |
) |
— |
|
— |
|
(101 |
) |
— |
|
| |
Stock purchase
warrants(i) |
24,584 |
|
2,316 |
|
6,206 |
|
26,900 |
|
4,522 |
|
| |
Forward
freight agreements |
121 |
|
(17 |
) |
34 |
|
104 |
|
34 |
|
|
|
|
16,409 |
|
(3,722 |
) |
14,772 |
|
12,687 |
|
29,007 |
|
| Total
realized and unrealized (losses) gains on derivative
instruments |
(10,964 |
) |
(5,423 |
) |
10,723 |
|
(16,387 |
) |
20,149 |
|
(i) Relates to the sale of the Company's remaining interest in
Teekay Offshore in May 2019. Also refer to (2) below.
(2) The Company’s proportionate share of items within equity
(loss) income as identified in Appendix A of this release is
detailed in the table below. By excluding these items from equity
(loss) income as reflected in the consolidated statements of loss,
the Company believes the resulting adjusted equity income is a
normalized amount that can be used to evaluate the financial
performance of the Company’s equity-accounted investments. Adjusted
equity income is a non-GAAP financial measure.
| |
|
Three Months
Ended |
Six Months
Ended |
| |
|
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
| |
|
2019 |
2019 |
2018 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Equity (loss)
income |
(6,284 |
) |
(61,653 |
) |
837 |
|
(67,937 |
) |
27,954 |
|
| Proportionate
share of unrealized losses (gains) on derivative instruments |
5,203 |
|
8,765 |
|
(6,986 |
) |
13,968 |
|
(26,463 |
) |
| Loss on
sale/write-down of investment in Teekay Offshore(i) |
7,853 |
|
64,900 |
|
— |
|
72,753 |
|
— |
|
|
Other(ii) |
1,023 |
|
— |
|
10,712 |
|
1,023 |
|
12,244 |
|
| Equity
income adjusted for items in Appendix A |
7,795 |
|
12,012 |
|
4,563 |
|
19,807 |
|
13,735 |
|
(i) During the three and six months ended June 30, 2019, the
Company recognized a loss of $7.9 million on sale of its investment
in Teekay Offshore to 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 (1)
above in respect of gains and losses on stock purchase
warrants.
(ii) Other for the three and six months ended June 30, 2018
includes the Company's proportionate share of write-downs and gain
on sales of vessels in Teekay Offshore and a loss on sale of the
Company's investment in KT Maritime Services Australia (Pty)
Ltd. Other for the six months ended June 30, 2018 also
includes the Company's proportionate share of the gain (loss) on
sale of vessels in Teekay LNG's Exmar LPG joint venture, partially
offset by transaction fees relating to the historical amendment of
certain interest rate swaps in Teekay Offshore, depreciation
expense as a result of the change in the useful life and residual
value estimates of certain of Teekay Offshore's shuttle tankers, a
decrease in the deferred income tax asset for Teekay Offshore's
Norwegian tax structure and the write-down of loans receivable from
Gemini Tankers LLC.
(3) Other (loss) income for the three and six
months ended June 30, 2019 includes $10.7 million relating to the
repurchase of the Company's 2020 Notes. Please refer to Summary of
Recent Events in this release.
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
| |
As at June 30, |
As at March 31, |
As at December 31, |
| |
2019 |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
| Cash and cash
equivalents - Teekay Parent |
74,890 |
|
213,090 |
|
220,238 |
|
| Cash and cash
equivalents - Teekay LNG |
124,880 |
|
122,589 |
|
149,014 |
|
| Cash and cash
equivalents - Teekay Tankers |
35,429 |
|
75,045 |
|
54,917 |
|
| Current portion of
loans and advances to |
|
|
|
| |
equity-accounted investments
(1) |
93,924 |
|
153,409 |
|
169,197 |
|
| Vessel held for
sale |
12,300 |
|
— |
|
— |
|
| Accounts
receivable and other current assets (1) |
330,811 |
|
259,888 |
|
251,527 |
|
| Restricted cash -
Teekay Parent |
2,023 |
|
2,040 |
|
2,030 |
|
| Restricted cash -
Teekay LNG |
80,308 |
|
78,015 |
|
73,850 |
|
| Restricted cash -
Teekay Tankers |
5,353 |
|
5,524 |
|
5,590 |
|
| Vessels and
equipment - Teekay Parent |
284,840 |
|
292,653 |
|
304,049 |
|
| Vessels and
equipment - Teekay LNG |
3,320,937 |
|
3,403,379 |
|
3,242,581 |
|
| Vessels and
equipment - Teekay Tankers |
1,856,766 |
|
1,864,425 |
|
1,883,561 |
|
| Operating lease
right-of-use assets (2) |
185,716 |
|
173,945 |
|
— |
|
| Advances on
newbuilding contracts |
— |
|
— |
|
86,942 |
|
| Net investment in
direct financing leases |
564,685 |
|
571,796 |
|
575,163 |
|
| Investments in and
loans to equity-accounted |
1,011,530 |
|
1,106,572 |
|
1,193,741 |
|
|
|
investments |
| Other non-current
assets |
141,626 |
|
159,115 |
|
179,270 |
|
| Total
Assets |
8,126,018 |
|
8,481,485 |
|
8,391,670 |
|
|
|
LIABILITIES AND EQUITY |
|
|
| Accounts payable
and accrued liabilities and |
|
|
|
| |
other (1) |
356,022 |
|
268,897 |
|
254,380 |
|
| Advances from
equity-accounted investments (1) |
27,607 |
|
64,406 |
|
75,292 |
|
| Current portion of
long-term debt - Teekay Parent |
36,663 |
|
255,458 |
|
— |
|
| Current portion of
long-term debt - Teekay LNG |
468,038 |
|
201,362 |
|
217,120 |
|
| Current portion of
long-term debt - Teekay Tankers |
125,661 |
|
146,843 |
|
127,132 |
|
| Long-term debt -
Teekay Parent |
345,768 |
|
349,637 |
|
614,341 |
|
| Long-term debt -
Teekay LNG |
2,799,426 |
|
3,121,709 |
|
3,051,212 |
|
| Long-term debt -
Teekay Tankers |
894,501 |
|
939,222 |
|
983,563 |
|
| Derivative
liabilities |
84,653 |
|
75,244 |
|
68,557 |
|
| Operating lease
liabilities (2) |
173,476 |
|
161,479 |
|
— |
|
| Other long-term
liabilities |
141,578 |
|
141,138 |
|
133,045 |
|
| Equity: |
|
|
|
| Non-controlling
interests |
2,005,399 |
|
2,040,496 |
|
2,058,037 |
|
|
Shareholders of Teekay |
667,226 |
|
715,594 |
|
808,991 |
|
| Total
Liabilities and Equity |
8,126,018 |
|
8,481,485 |
|
8,391,670 |
|
|
|
|
|
|
|
| Net debt - Teekay
Parent (3) |
305,518 |
|
389,965 |
|
392,073 |
|
| Net debt - Teekay
LNG (3) |
3,062,276 |
|
3,122,467 |
|
3,045,468 |
|
| Net
debt - Teekay Tankers (3) |
979,380 |
|
1,005,496 |
|
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 $161.5 million at March 31, 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)
| |
Six Months Ended |
| |
June 30, |
| |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
| Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
| Net loss |
(95,575 |
) |
(49,627 |
) |
| Non-cash and non-operating
items: |
|
|
| Depreciation and
amortization |
145,956 |
|
135,271 |
|
| Unrealized loss (gain)
on derivative instruments and loss on sale of warrants |
14,933 |
|
(35,515 |
) |
| Write-down and loss on
sales of vessels |
3,328 |
|
51,492 |
|
| Equity loss (income),
net of dividends received |
85,211 |
|
(15,207 |
) |
| Foreign currency
exchange loss and other |
34,744 |
|
22,132 |
|
| Direct financing lease
payments received |
6,050 |
|
— |
|
| Change in operating assets and
liabilities |
18,427 |
|
14,325 |
|
| Expenditures for dry
docking |
(34,150 |
) |
(12,437 |
) |
|
Net operating cash flow |
178,924 |
|
110,434 |
|
| |
|
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance of
long-term debt, net of issuance costs |
376,658 |
|
409,793 |
|
| Prepayments of long-term
debt |
(759,401 |
) |
(295,914 |
) |
| Scheduled repayments of
long-term debt |
(117,110 |
) |
(171,433 |
) |
| Proceeds from short-term
debt |
65,000 |
|
— |
|
| Prepayment of short-term
debt |
(50,000 |
) |
— |
|
| Proceeds from financing
related to sales-leaseback of vessels |
222,400 |
|
243,812 |
|
| Repayments of obligations
related to finance leases |
(45,928 |
) |
(28,819 |
) |
| Net proceeds from equity
issuances of Teekay Corporation |
— |
|
103,657 |
|
| Repurchase of Teekay LNG
common units |
(12,056 |
) |
— |
|
| Distributions paid from
subsidiaries to non-controlling interests |
(30,465 |
) |
(33,872 |
) |
| Cash dividends paid |
(5,523 |
) |
(11,036 |
) |
| Other financing
activities |
(580 |
) |
(566 |
) |
|
Net financing cash flow |
(357,005 |
) |
215,622 |
|
| |
|
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for vessels and
equipment |
(89,120 |
) |
(315,348 |
) |
| Proceeds from sale of
equity-accounted investments and related assets |
100,000 |
|
54,438 |
|
| Investment in equity-accounted
investments |
(15,555 |
) |
(27,629 |
) |
| Loans to joint ventures and
joint venture partners |
— |
|
(24,971 |
) |
| Cash of transferred
subsidiaries on sale, net of proceeds received |
— |
|
(25,254 |
) |
| Other investing
activities |
— |
|
5,560 |
|
|
Net investing cash flow |
(4,675 |
) |
(333,204 |
) |
| |
|
|
| Decrease in cash, cash
equivalents and restricted cash |
(182,756 |
) |
(7,148 |
) |
| Cash, cash equivalents and
restricted cash, beginning of the period |
505,639 |
|
552,174 |
|
|
Cash, cash equivalents and restricted cash, end of the
period |
322,883 |
|
545,026 |
|
Teekay CorporationAppendix A -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted Net Loss(in thousands of
U.S. dollars, except per share data)
| |
|
Three Months Ended |
| |
|
June 30, |
March 31, |
June 30, |
| |
|
2019 |
2019 |
2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
$
Per |
|
$
Per |
|
$
Per |
| |
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
| Net loss –
GAAP basis |
(34,111 |
) |
|
(61,464 |
) |
|
(39,647 |
) |
|
| Adjust for: Net
(income) loss attributable to |
|
|
|
|
|
|
|
non-controlling interests |
(5,374 |
) |
|
(22,793 |
) |
|
11,323 |
|
|
| Net loss
attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
(39,485 |
) |
(0.39 |
) |
(84,257 |
) |
(0.84 |
) |
(28,324 |
) |
(0.28 |
) |
| (Subtract)
add specific items affecting net loss |
|
|
|
|
|
|
| |
Unrealized (gains) losses from
derivative |
|
|
|
|
|
|
| |
instruments(2) |
(11,206 |
) |
(0.11 |
) |
12,488 |
|
0.12 |
|
(21,758 |
) |
(0.22 |
) |
| |
Foreign exchange losses
(gains)(3) |
4,764 |
|
0.05 |
|
1,196 |
|
0.01 |
|
(14,045 |
) |
(0.14 |
) |
| |
Write-down and loss on sale of
vessels |
|
|
|
|
|
|
| |
and other assets |
7,853 |
|
0.08 |
|
68,228 |
|
0.68 |
|
43,157 |
|
0.43 |
|
| |
Restructuring charges, net of
recoveries |
1,369 |
|
0.01 |
|
2,158 |
|
0.02 |
|
(607 |
) |
(0.01 |
) |
| |
Other(4) |
37,329 |
|
0.37 |
|
1,998 |
|
0.02 |
|
5,490 |
|
0.06 |
|
|
|
Non-controlling interests’ share of items above(5) |
(13,992 |
) |
(0.14 |
) |
(14,766 |
) |
(0.15 |
) |
(5,468 |
) |
(0.05 |
) |
| Total
adjustments |
26,117 |
|
0.26 |
|
71,302 |
|
0.71 |
|
6,769 |
|
0.07 |
|
| Adjusted
net loss attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
(13,368 |
) |
(0.13 |
) |
(12,955 |
) |
(0.13 |
) |
(21,555 |
) |
(0.21 |
) |
(1) Basic per share amounts.(2) Reflects unrealized (gains)
losses 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
(gains) losses 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) 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
Notes. Other for the three months ended March 31, 2019 includes the
loan extinguishment costs related to Teekay LNG's refinancing of
one of its debt facilities. Other for the three months ended June
30, 2018 includes a decrease in the Company's freight taxes
relating to prior periods and a decrease in the Company's deferred
tax assets.(5) Items affecting net loss include items from the
Company’s consolidated non-wholly-owned subsidiaries. The specific
items affecting net loss are analyzed to determine whether any of
the amounts originated from a consolidated non-wholly-owned
subsidiary. Each amount that originates from a consolidated
non-wholly-owned subsidiary is multiplied by the non-controlling
interests’ percentage share in this subsidiary to determine the
non-controlling interests’ share of the amount. The amount
identified as “Non-controlling interests’ share of items above” in
the table above is the cumulative amount of the non-controlling
interests’ proportionate share of items listed in the table.
Teekay CorporationAppendix B -
Supplemental Financial InformationSummary
Statement of Income (Loss) for the Three Months Ended June 30,
2019(in thousands of U.S. dollars)(unaudited)
| |
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
| |
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
| |
|
|
|
|
|
|
| Revenues |
153,060 |
|
202,277 |
|
105,817 |
|
(3,487 |
) |
457,667 |
|
| |
|
|
|
|
|
|
| Voyage
expenses |
(6,023 |
) |
(92,668 |
) |
(9 |
) |
20 |
|
(98,680 |
) |
| Vessel operating
expenses |
(27,457 |
) |
(53,600 |
) |
(82,564 |
) |
1,000 |
|
(162,621 |
) |
| Time-charter hire
expense |
(3,080 |
) |
(10,792 |
) |
(17,432 |
) |
2,487 |
|
(28,817 |
) |
| Depreciation and
amortization |
(35,338 |
) |
(30,658 |
) |
(7,853 |
) |
— |
|
(73,849 |
) |
| General and
administrative expenses |
(5,667 |
) |
(9,508 |
) |
(6,073 |
) |
380 |
|
(20,868 |
) |
| Restructuring
charges |
(818 |
) |
— |
|
(151 |
) |
(400 |
) |
(1,369 |
) |
|
|
|
|
|
|
|
|
| Income
(loss) from vessel operations |
74,677 |
|
5,051 |
|
(8,265 |
) |
— |
|
71,463 |
|
| |
|
|
|
|
|
| Interest
expense |
(41,018 |
) |
(16,607 |
) |
(12,644 |
) |
64 |
|
(70,205 |
) |
| Interest
income |
960 |
|
221 |
|
1,116 |
|
(64 |
) |
2,233 |
|
| Realized and
unrealized loss on |
|
|
|
|
|
| |
non-designated derivative
instruments |
(7,826 |
) |
(1,778 |
) |
(1,360 |
) |
— |
|
(10,964 |
) |
| Equity income
(loss) |
1,738 |
|
(169 |
) |
(7,853 |
) |
— |
|
(6,284 |
) |
| Equity in earnings
of subsidiaries(2) |
— |
|
— |
|
(629 |
) |
629 |
|
— |
|
| Income tax
(expense) recovery |
(2,472 |
) |
(1,639 |
) |
707 |
|
— |
|
(3,404 |
) |
| Foreign exchange
(loss) gain |
(7,243 |
) |
595 |
|
797 |
|
— |
|
(5,851 |
) |
| Other
income (loss) – net |
236 |
|
19 |
|
(11,354 |
) |
— |
|
(11,099 |
) |
| Net income
(loss) |
19,052 |
|
(14,307 |
) |
(39,485 |
) |
629 |
|
(34,111 |
) |
| Net income
attributable to |
|
|
|
|
|
|
|
non-controlling interests(3) |
(2,617 |
) |
— |
|
— |
|
(2,757 |
) |
(5,374 |
) |
| Net income
(loss) attributable to shareholders/ |
|
|
|
|
|
|
|
unitholders of publicly-listed entities |
16,435 |
|
(14,307 |
) |
(39,485 |
) |
(2,128 |
) |
(39,485 |
) |
(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 June 30, 2019(in thousands of U.S.
dollars)(unaudited)
| |
|
|
|
Teekay |
| |
|
|
|
Parent |
| |
FPSOs |
Other(1) |
GPCO |
Total |
| |
|
|
|
|
| Revenues |
57,828 |
|
47,989 |
|
— |
|
105,817 |
|
| |
|
|
|
|
| Voyage expenses |
(9 |
) |
— |
|
— |
|
(9 |
) |
| Vessel operating expenses |
(41,229 |
) |
(41,335 |
) |
— |
|
(82,564 |
) |
| Time-charter hire expense |
(11,512 |
) |
(5,920 |
) |
— |
|
(17,432 |
) |
| Depreciation and
amortization |
(7,811 |
) |
(42 |
) |
— |
|
(7,853 |
) |
| General and administrative
expenses |
(3,254 |
) |
— |
|
(2,819 |
) |
(6,073 |
) |
| Restructuring charges |
— |
|
(151 |
) |
— |
|
(151 |
) |
|
(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 (2) |
— |
|
— |
|
5,094 |
|
5,094 |
|
|
Teekay Parent adjusted EBITDA |
(99 |
) |
1,251 |
|
2,275 |
|
3,427 |
|
(1) Includes the results of two chartered-in FSO units 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) 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
June 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 |
| |
|
June 30, |
March 31, |
June 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 |
304 |
|
305 |
|
228 |
|
| |
Teekay Offshore(3) |
— |
|
— |
|
16 |
|
| |
Other Dividends |
|
|
|
|
|
Teekay Tankers(2)(4) |
— |
|
— |
|
— |
|
| Total Daughter
Entity Distributions to Teekay Parent |
5,094 |
|
5,095 |
|
4,339 |
|
|
Corporate general and administrative expenses |
(2,819 |
) |
(4,484 |
) |
(4,016 |
) |
| Total
Teekay Parent GPCO |
2,275 |
|
611 |
|
323 |
|
|
|
|
|
|
|
| TEEKAY
PARENT OPCO |
|
|
|
| Teekay
Parent OPCO (5) |
|
|
|
| |
FPSOs |
(99 |
) |
(3,112 |
) |
12,277 |
|
|
|
Other |
1,251 |
|
699 |
|
4,041 |
|
|
Total Teekay Parent OPCO (6) |
1,152 |
|
(2,413 |
) |
16,318 |
|
|
|
|
|
|
|
TEEKAY PARENT ADJUSTED EBITDA |
3,427 |
|
(1,802 |
) |
16,641 |
|
| |
|
|
|
| Net interest
expense(7) |
(9,854 |
) |
(11,961 |
) |
(15,843 |
) |
|
|
|
|
|
|
|
TOTAL TEEKAY PARENT FREE CASH FLOW |
(6,427 |
) |
(13,763 |
) |
798 |
|
| |
|
|
|
|
Weighted-average number of common shares -
Basic |
100,783,496 |
|
100,520,421 |
|
100,434,512 |
|
(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 share/unit dividend/distribution cash
flows to Teekay Parent are based on Teekay Parent’s ownership on
the ex-dividend date for the respective publicly-traded subsidiary
and equity-accounted investment in Teekay Offshore for the periods
as follows:
| |
|
Three Months Ended |
| |
|
June
30, |
March
31, |
June
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 |
|
|
56,587,484 |
|
| Total distribution |
$ |
— |
|
$ |
— |
|
$ |
565,875 |
|
| Teekay Tankers |
|
|
|
|
|
|
| Dividend per share |
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Shares owned by Teekay Parent |
|
77,298,441 |
|
|
77,298,441 |
|
|
77,298,441 |
|
| Total dividend |
$ |
— |
|
$ |
— |
|
$ |
— |
|
(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) Includes Class A and Class B shareholdings.
Teekay Tankers' past dividend policy was to pay out 30% to 50% of
its quarterly adjusted net income (as defined), with a minimum
quarterly dividend of $0.03 per share, subject to reserves the
Teekay Tankers' Board of Directors may determine are necessary for
the prudent operation of Teekay Tankers. Commencing with the
dividend for the first quarter of 2018, Teekay Tankers' Board of
Directors eliminated the minimum quarterly dividend; however, the
variable portion of the dividend policy was maintained.(5) Please
refer to Appendices C and E for additional financial information on
Teekay Parent’s adjusted EBITDA.(6) Excludes corporate general and
administrative expenses relating to Teekay Parent GPCO.(7) 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 |
| |
|
June 30, |
March 31, |
June 30, |
| |
|
2019 |
2019 |
2018 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
| Net loss |
(34,111 |
) |
(61,464 |
) |
(39,647 |
) |
| Depreciation and
amortization |
73,849 |
|
72,107 |
|
67,960 |
|
| Interest expense,
net of interest income |
67,972 |
|
70,982 |
|
57,431 |
|
| Income
tax expense |
3,404 |
|
5,036 |
|
8,746 |
|
|
EBITDA |
111,114 |
|
86,661 |
|
94,490 |
|
|
Specific income statement items affecting EBITDA: |
|
|
|
| |
Asset impairments and loss on sale of vessels |
— |
|
3,328 |
|
32,830 |
|
| |
Direct finance lease payments received in excess of revenue
recognized |
4,037 |
|
3,218 |
|
2,897 |
|
| |
Amortization of in-process contracts and other |
(1,255 |
) |
(1,115 |
) |
(2,727 |
) |
| |
Realized and unrealized loss (gain) on derivative instruments |
10,964 |
|
5,423 |
|
(10,723 |
) |
| |
Equity loss (income) |
6,284 |
|
61,653 |
|
(837 |
) |
| |
Foreign currency exchange loss (gain) |
5,851 |
|
2,630 |
|
(12,529 |
) |
|
|
Other expense (income) - net |
11,099 |
|
(28 |
) |
(520 |
) |
|
Consolidated Adjusted EBITDA |
148,094 |
|
161,770 |
|
102,881 |
|
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
48,515 |
|
75,190 |
|
61,316 |
|
|
Total Adjusted EBITDA |
196,609 |
|
236,960 |
|
164,197 |
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA – Equity-Accounted
Vessels(in thousands of U.S. dollars)
| |
|
Three Months Ended |
| |
|
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
| |
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
At |
Company's |
At |
Company's |
At |
Company's |
| |
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(1) |
| Revenues |
174,382 |
|
74,266 |
|
494,729 |
|
119,506 |
|
458,098 |
|
106,875 |
|
| Vessel and other
operating expenses |
(69,135 |
) |
(30,565 |
) |
(219,099 |
) |
(48,349 |
) |
(228,523 |
) |
(48,996 |
) |
| Depreciation and
amortization |
(29,459 |
) |
(14,195 |
) |
(112,611 |
) |
(25,918 |
) |
(128,353 |
) |
(27,467 |
) |
| Asset impairments
and loss on sale of |
|
|
|
|
|
|
| |
vessels |
— |
|
— |
|
— |
|
— |
|
(62,913 |
) |
(8,854 |
) |
| Income
from vessel operations of equity-accounted vessels |
75,788 |
|
29,506 |
|
163,019 |
|
45,239 |
|
38,309 |
|
21,558 |
|
| |
|
|
|
|
|
|
| Net interest
expense |
(53,356 |
) |
(21,467 |
) |
(105,894 |
) |
(28,856 |
) |
(87,010 |
) |
(23,611 |
) |
| Income tax
expense |
(670 |
) |
(246 |
) |
(5,176 |
) |
(1,388 |
) |
(46 |
) |
(24 |
) |
| Other items
including realized and |
|
|
|
|
|
|
| |
unrealized (loss) gain on
derivative |
|
|
|
|
|
|
| |
instruments |
(18,764 |
) |
(6,224 |
) |
(60,877 |
) |
(11,748 |
) |
14,776 |
|
4,437 |
|
| Write-down and
loss on sale of equity- |
|
|
|
|
|
|
| |
accounted investments (2) |
|
(7,853 |
) |
|
(64,900 |
) |
|
(1,523 |
) |
|
|
|
|
|
|
|
|
|
| Net income
(loss) / equity (loss) income of equity-accounted
vessels |
2,998 |
|
(6,284 |
) |
(8,928 |
) |
(61,653 |
) |
(33,971 |
) |
837 |
|
|
|
|
|
|
|
|
|
|
| Net income
(loss) / equity (loss) income |
|
|
|
|
|
|
| |
of equity-accounted
vessels |
2,998 |
|
(6,284 |
) |
(8,928 |
) |
(61,653 |
) |
(33,971 |
) |
837 |
|
| Depreciation and
amortization |
29,459 |
|
14,195 |
|
112,611 |
|
25,918 |
|
128,353 |
|
27,467 |
|
| Net interest
expense |
53,356 |
|
21,467 |
|
105,894 |
|
28,856 |
|
87,010 |
|
23,611 |
|
| Income
tax expense |
670 |
|
246 |
|
5,176 |
|
1,388 |
|
46 |
|
24 |
|
|
EBITDA |
86,483 |
|
29,624 |
|
214,753 |
|
(5,491 |
) |
181,438 |
|
51,939 |
|
| Specific income
statement items affecting EBITDA: |
|
|
|
|
|
| |
Asset impairments and loss on
sale of vessels |
— |
|
— |
|
— |
|
— |
|
62,913 |
|
8,854 |
|
| |
Direct finance lease payments
received in excess of revenue recognized |
16,131 |
|
5,759 |
|
14,689 |
|
5,133 |
|
13,879 |
|
4,707 |
|
| |
Amortization of in-process
contracts and other |
(1,736 |
) |
(945 |
) |
(1,722 |
) |
(936 |
) |
(6,027 |
) |
(1,322 |
) |
| |
Other items including realized
and unrealized loss (gain) on derivative instruments |
18,764 |
|
6,224 |
|
60,877 |
|
11,749 |
|
(14,776 |
) |
(4,437 |
) |
| |
Realized (loss) gain on
foreign currency forward contracts |
— |
|
— |
|
(1,175 |
) |
(165 |
) |
370 |
|
52 |
|
|
|
Write-down and loss on sale of equity-accounted
investments(2) |
|
7,853 |
|
|
64,900 |
|
|
1,523 |
|
|
Adjusted EBITDA from equity-accounted
vessels(3)(4) |
119,642 |
|
48,515 |
|
287,422 |
|
75,190 |
|
237,797 |
|
61,316 |
|
(1) For the three months ended June 30,
2019, the Company’s proportionate share of its equity-accounted
vessels and other investments, ranges from 20% to 52%. For the
three months ended March 31, 2019 and June 30, 2018, the Company’s
proportionate share of its equity-accounted vessels and other
investments, including its investment in Teekay Offshore, ranges
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 March 31, 2019, includes a
write-down of the Company's investment in Teekay Offshore. For the
three months ended June 30, 2018, includes a loss on sale of the
Company's investment in KT Maritime Services Australia (Pty)
Ltd.(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 June 30, 2019. The three months ended March 31,
2019 and June 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 March 31, 2019 |
| |
|
(unaudited) |
| |
|
|
|
|
|
Teekay |
| |
|
|
|
|
|
Parent |
| |
|
FPSOs |
Other |
GPCO |
Total |
| |
|
|
|
|
|
|
|
|
| Teekay Parent loss
from vessel operations |
|
(12,557 |
) |
|
(185 |
) |
(4,484 |
) |
|
(17,226 |
) |
| Depreciation and
amortization |
|
8,036 |
|
|
80 |
|
— |
|
|
8,116 |
|
| Asset
impairments |
|
3,328 |
|
|
— |
|
— |
|
|
3,328 |
|
| Amortization of
in-process revenue contracts and other |
|
(1,919 |
) |
|
804 |
|
— |
|
|
(1,115 |
) |
|
Daughter entities distributions |
|
— |
|
|
— |
|
5,095 |
|
|
5,095 |
|
|
Adjusted EBITDA – Teekay Parent |
|
(3,112 |
) |
|
699 |
|
611 |
|
|
(1,802 |
) |
| |
|
Three Months
Ended June 30, 2018 |
| |
|
(unaudited) |
| |
|
|
|
|
|
Teekay |
| |
|
|
|
|
|
Parent |
| |
|
FPSOs |
Other |
GPCO |
Total |
| |
|
|
|
|
|
|
|
|
| Teekay Parent
income (loss) from vessel operations |
|
5,541 |
|
|
3,306 |
|
(4,016 |
) |
|
4,831 |
|
| Depreciation and
amortization |
|
8,593 |
|
|
— |
|
— |
|
|
8,593 |
|
| Amortization of
in-process revenue contracts and other |
|
(1,857 |
) |
|
735 |
|
— |
|
|
(1,122 |
) |
|
Daughter entities distributions |
|
— |
|
|
— |
|
4,339 |
|
|
4,339 |
|
|
Adjusted EBITDA – Teekay Parent |
|
12,277 |
|
|
4,041 |
|
323 |
|
|
16,641 |
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresNet
Interest Expense - Teekay Parent(in thousands of U.S.
dollars)
| |
|
|
Three Months Ended |
| |
|
|
June 30, |
March 31, |
June 30, |
| |
|
|
2019 |
2019 |
2018 |
| |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Interest
expense |
(70,205 |
) |
(73,671 |
) |
(59,526 |
) |
|
Interest income |
2,233 |
|
2,689 |
|
2,095 |
|
| Interest expense
net of interest income consolidated |
(67,972 |
) |
(70,982 |
) |
(57,431 |
) |
| Less: Non-Teekay
Parent interest expense net of |
|
|
|
|
|
interest income |
(56,444 |
) |
(57,716 |
) |
(41,040 |
) |
| Interest expense
net of interest income - Teekay Parent |
(11,528 |
) |
(13,266 |
) |
(16,391 |
) |
| Teekay Parent
non-cash accretion and loan cost amortization |
1,896 |
|
1,562 |
|
942 |
|
| Teekay
Parent realized losses on interest rate swaps |
(222 |
) |
(257 |
) |
(394 |
) |
|
Net interest expense - Teekay Parent |
(9,854 |
) |
(11,961 |
) |
(15,843 |
) |
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: the anticipated benefit
to the Company’s future financial results and balance sheet from
the delivery of the remaining LNG projects; the ability of Teekay
LNG to return capital to unitholders while also continuing to
delever its balance sheet; the completion of maintenance on Teekay
Parent’s FPSO units and expected production capacity in the fourth
quarter of 2019; the ability of the Company to complete contract
extensions, amendments and/or dispositions relating to its three
directly-owned FPSO units; strengthening of the global tanker
market in the latter part of 2019 and into 2020 and the expected
impact on cash flows and asset values; improving tanker and gas
shipping market fundamentals; the anticipated cash flow growth from
the Company’s gas business; and the Company’s ability to reduce
G&A expenses. The following factors are among those that could
cause actual results to differ materially from the forward-looking
statements, which involve risks and uncertainties, and that should
be considered in evaluating any such statement: market or
counterparty reaction to changes in exploration, production and
storage of offshore oil and gas, either generally or in particular
regions that would impact expected future growth; changes in the
demand for oil, refined products, LNG or LPG; changes in trading
patterns significantly affecting overall vessel tonnage
requirements; greater or less than anticipated levels of vessel
newbuilding orders and deliveries and greater or less than
anticipated rates of vessel scrapping; changes in global oil
prices; issues with vessel operations; increased operating
expenses; potential project delays or cancellations; changes in
applicable industry laws and regulations and the timing of
implementation of new laws and regulations; the effects of IMO
2020; the potential for early termination of long-term contracts of
existing vessels; delays in the commencement of charter or other
contracts; the ability to fund remaining capital commitments and
debt maturities; and other factors discussed in Teekay’s filings
from time to time with the SEC, including its Annual Report on Form
20-F for the fiscal year ended December 31, 2018. Teekay expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Teekay’s expectations with respect
thereto or any change in events, conditions or circumstances on
which any such statement is based.
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