Highlights
Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
the Company's results for the fourth quarter and fiscal year
2017. These results include the Company’s two publicly-listed
consolidated subsidiaries Teekay LNG Partners L.P. (Teekay LNG)
(NYSE:TGP) and Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) and
one equity accounted investment in publicly-listed Teekay Offshore
Partners L.P. (Teekay Offshore) (NYSE:TOO) (collectively, the
Daughter Entities), and all remaining subsidiaries of the Company.
The Company, together with its subsidiaries other than the Daughter
Entities, is referred to in this release as Teekay Parent.
Please refer to the fourth quarter and annual 2017 earnings
releases of Teekay LNG, Teekay Tankers and Teekay Offshore, which
are available on the Company’s website at www.teekay.com, for
additional information on their respective results.
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|
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|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2017 |
2017 |
2016 |
2017 |
2016 |
(in thousands of U.S. dollars, except per
share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY CORPORATION CONSOLIDATED |
|
|
|
|
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
Revenues |
326,686 |
|
499,728 |
|
552,203 |
|
1,880,332 |
|
2,328,569 |
|
Income
(loss) from vessel operations |
66,655 |
|
(189,846 |
) |
83,222 |
|
6,700 |
|
384,290 |
|
Equity
(loss) income |
(971 |
) |
1,264 |
|
11,933 |
|
(37,344 |
) |
85,639 |
|
Net loss
attributable to shareholders of Teekay |
(13,727 |
) |
(12,582 |
) |
(2,661 |
) |
(151,717 |
) |
(123,182 |
) |
Loss per
share attributable to |
|
|
|
|
|
|
shareholders of Teekay
|
(0.16 |
) |
(0.15 |
) |
(0.03 |
) |
(1.76 |
) |
(1.62 |
) |
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
Total Cash
Flow from Vessel Operations (CFVO) (1) (2) |
183,586 |
|
238,060 |
|
290,486 |
|
951,118 |
|
1,287,003 |
|
Adjusted
Net Loss attributable to |
|
|
|
|
|
|
shareholders of
Teekay (1) |
(9,500 |
) |
(35,638 |
) |
(18,554 |
) |
(118,954 |
) |
(43,562 |
) |
Adjusted
Loss per share attributable to |
|
|
|
|
|
|
shareholders of
Teekay (1) |
(0.11 |
) |
(0.41 |
) |
(0.22 |
) |
(1.38 |
) |
(0.55 |
) |
TEEKAY PARENT |
|
|
|
|
|
NON-GAAP FINANCIAL COMPARISON |
|
|
|
|
|
Teekay
Parent GPCO Cash Flow(1) |
2,669 |
|
7,162 |
|
3,752 |
|
17,838 |
|
24,593 |
|
Teekay
Parent OPCO Cash Flow(1) |
(3,390 |
) |
(19,055 |
) |
(8,030 |
) |
(70,990 |
) |
(54,389 |
) |
Total
Teekay Parent Free Cash Flow(1) |
(721 |
) |
(11,893 |
) |
(4,278 |
) |
(53,152 |
) |
(29,796 |
) |
(1) These are non-GAAP financial measures. Please
refer to “Definitions and Non-GAAP Financial Measures” and the
Appendices to this release for definitions of these terms and
reconciliations of these non-GAAP financial measures as used
in this release to the most directly comparable financial measures
under United States generally accepted accounting principles
(GAAP).
(2) Total cash flow from vessel operations has reduced in
the fourth quarter of 2017 primarily as a result of the
deconsolidation of Teekay Offshore on September 25, 2017, which
Teekay now accounts for using the equity method.
Teekay LNG and Teekay Tankers are consolidated
in the Company's financial statements and, up to the September 25,
2017 closing of the strategic partnership with Brookfield Business
Partners L.P., together with its institutional partners
(collectively Brookfield), Teekay Offshore was consolidated in the
Company's financial statements. In connection with
Brookfield's acquisition of a 49 percent interest in Teekay
Offshore's general partner, Teekay Offshore GP LLC (TOO GP), Teekay
and Brookfield entered into an amended limited liability company
agreement whereby Brookfield obtained certain participatory rights
in the management of TOO GP, which resulted in Teekay
deconsolidating Teekay Offshore for accounting purposes on
September 25, 2017. Subsequent to the closing of the Brookfield
transaction, Teekay accounts for its investment in Teekay Offshore
using the equity method.
CEO Commentary
“On a consolidated basis, Teekay’s financial
results improved in the fourth quarter of 2017 compared to the
third quarter of 2017 primarily driven by increased cash flows from
Teekay Parent’s FPSO units, the delivery of several offshore and
LNG projects at Teekay Offshore and Teekay LNG, and higher tanker
rates,” commented Kenneth Hvid, Teekay’s President and Chief
Executive Officer. “We anticipate that Teekay’s results
should continue to benefit as our remaining offshore and LNG
projects deliver over the next few years."
Mr. Hvid continued, “With the U.S. capital
markets opening the year strongly, coupled with the positive
sentiment in the broader energy markets, we made what we believe to
be a prudent move to further strengthen Teekay Parent’s balance
sheet. In January 2018, we completed a convertible bond
offering and concurrent equity offering, raising total gross
proceeds of $222.5 million, which provides us with financial
flexibility and optionality, with current total liquidity of over
$500 million.”
“We believe the Teekay Group is at a positive
inflection point,” commented Mr. Hvid. “Over the past couple
of years, we have taken steps to strengthen the financial
foundation of each of our companies and we are now starting to move
from an execution phase, to one where we are now primarily focused
on operating and growing our cash flows. The Teekay Group has
taken delivery of 12 vessels over the past 12 months with more to
come through 2020. Importantly, due to the contracted nature
of these projects, each vessel is expected to provide incremental
cash flow growth upon its delivery, totaling approximately $450
million in annual operating cash flow between Teekay LNG and Teekay
Offshore. In addition, we continue to see signs of an energy
market recovery in our LNG, offshore and crude oil tanker
businesses. With stronger balance sheets, market-leading
positions and strong operational platforms, we believe that each of
our businesses is well-positioned to benefit from an energy market
recovery.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended December 31, 2017, compared to the same period of the
prior year, were positively impacted primarily by higher cash flows
from the Banff and Hummingbird Spirit FPSO units due to the
commencement of oil price-linked production tariffs in those
charter contracts on August 1, 2017 and October 1, 2017,
respectively; higher income and cash flows from Teekay LNG as a
result of the deliveries of three MEGI LNG carrier newbuildings in
2017 and the recognition of prepaid lease payments received from IM
Skaugen SE (Skaugen) in prior periods; and higher income and cash
flows from Teekay Offshore primarily from the contract start-up of
the Randgrid FSO and the Pioneiro de Libra FPSO in the fourth
quarter of 2017.
These increases were partially offset primarily
by lower income and cash flows in Teekay LNG, primarily a result of
lower charter rates earned from its conventional tanker fleet and
lower spot LPG rates earned in Teekay LNG's 50 percent-owned joint
venture with Exmar NV (Exmar); a reduction in income and cash flows
in Teekay Tankers due to lower spot tanker rates; and a reduction
in income and cash flows in Teekay Offshore due to non-recurring
repair and maintenance expenses.
Teekay Parent
Teekay Parent GPCO Cash Flow, which includes
distributions and dividends paid to Teekay Parent from Teekay’s
Daughter Entities in the following quarter, less Teekay Parent’s
corporate general and administrative expenses, was $2.7 million for
the quarter ended December 31, 2017, compared to $3.8 million
for the same period of the prior year. This decrease was primarily
due to a reduction in cash distributions from Teekay Offshore as a
result of the recent strategic partnership with Brookfield,
partially offset by an increase in the cash dividends received from
Teekay Tankers due to an increase in the number of Teekay Tankers
shares owned by Teekay Parent as a result of the strategic merger
between Teekay Tankers and TIL, which closed on November 27, 2017,
and open market purchases of Teekay Tankers Class A common stock in
December 2017.
Teekay Parent OPCO Cash Flow, which includes
cash flow attributable to assets directly-owned by, or chartered-in
to, Teekay Parent, net of interest expense and dry-dock
expenditures, improved to negative $3.4 million for the three
months ended December 31, 2017, from negative $8.0 million for
the same period of the prior year. This increase was primarily due
to higher revenues from the Banff and Hummingbird Spirit FPSO
units due to contractual production tariffs linked to oil prices
commencing on August 1, 2017 and October 1, 2017, respectively, and
the commencement of charter contracts for the Polar Spirit and
Arctic Spirit LNG carriers, which are in-chartered from Teekay LNG
until April 2018, in the second quarter and third quarter of 2017,
respectively, partially offset by no interest income earned for the
three months ended December 31, 2017 on a $200 million loan to
Teekay Offshore which Teekay Parent sold to Brookfield in the third
quarter of 2017.
Total Teekay Parent Free Cash Flow, which is the
total of Teekay Parent GPCO Cash Flow and Teekay Parent OPCO Cash
Flow, was negative $0.7 million during the fourth quarter of 2017,
compared to negative $4.3 million for the same period of the prior
year. Please refer to Appendix D of this release for
additional information about Teekay Parent Free Cash Flow.
Summary Results of Daughter
Entities
Teekay LNG
Teekay LNG’s results increased during the
quarter ended December 31, 2017, compared to the same period of the
prior year, primarily due to the deliveries of three MEGI LNG
carrier newbuildings, which immediately commenced their respective
charter contracts in 2017, the deliveries of two mid-size LPG
carriers in Teekay LNG's 50 percent-owned joint venture with Exmar
in 2017, the delivery of one LNG carrier in one of Teekay LNG's
30-percent-owned joint ventures, and the recognition of prepaid
lease payments received from Skaugen in prior periods, which were
previously deferred and then recognized in the fourth quarter of
2017 upon the termination of the charter contracts for five LPG
carriers on charter with Skaugen. These increases were partially
offset by, among other things, the sale of a conventional tanker in
2017, lower revenues from two conventional tankers due to lower
charter rates upon the expiration of their fixed-rate charter
contracts in 2017, and lower revenues from Teekay LNG's 50
percent-owned joint venture with Exmar due to lower spot LPG rates.
Please refer to Teekay LNG's fourth quarter and annual 2017
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' results decreased during the
quarter ended December 31, 2017, compared to the same period of the
prior year, primarily due to lower average spot tanker rates in the
fourth quarter of 2017 compared to the same period of the prior
year, partially offset by the merger with TIL and redelivery of
four time-chartered in vessels during 2017. Please refer to Teekay
Tankers' fourth quarter and annual 2017 earnings release for
additional information on the financial results for this
entity.
Teekay Offshore
Teekay Offshore’s results increased during the
quarter ended December 31, 2017, compared to the same period of the
prior year primarily due to the contract start-up of the Randgrid
FSO and the Pioneiro de Libra FPSO in the fourth quarter of 2017,
and higher revenues earned in Teekay Offshore's FPSO and shuttle
tanker fleets due to higher operational bonuses and higher average
rates, respectively. These increases were partially offset by
higher repair and maintenance expenses related to two redelivered
shuttle tankers to prepare the vessels for trade in the
conventional market in 2017 and lower revenues from the towage
fleet. Please refer to Teekay Offshore’s fourth quarter and annual
2017 earnings release for additional information on the financial
results for this entity.
Summary of Recent Events
Teekay LNG
During October 2017 through February 2018,
Teekay LNG took delivery of three MEGI LNG carrier newbuildings,
the Macoma, Murex and Magdala, all of which immediately commenced
their respective charter contracts with Royal Dutch Shell (Shell)
ranging between six to eight years in duration, plus extension
options.
During October 2017 through January 2018, Teekay
LNG's 30 percent-owned joint venture with China LNG Shipping
(Holdings) Limited (China LNG) and CETS (an affiliate of China
National Offshore Oil Corporation (CNOOC)) took delivery of two LNG
carrier newbuildings, the Pan Asia and the Pan Americas, both of
which immediately commenced their respective 20-year charter
contracts with Shell.
In November 2017, Teekay LNG terminated its
charter contracts with Skaugen due to non-payment of charter hire
and established the Teekay Multigas Pool, a new in-house commercial
management solution for ethylene-capable LPG and small-scale LNG
vessels. The Teekay Multigas Pool now manages Teekay LNG's seven
directly-owned ethylene-capable LPG carriers, some of which are
also capable of small-scale LNG shipping, which were previously
part of the Norgas Carriers Pool operated by Skaugen.
In December 2017, Teekay LNG's 50 percent-owned
joint venture with China LNG (the Yamal LNG Joint Venture)
completed an $816 million(1) long-term debt facility to finance all
six of the Yamal LNG Joint Venture's ARC7 LNG carrier newbuildings
delivering through early-2020, the first of which, the Eduard Toll,
was delivered in January 2018 and immediately commenced its 28-year
charter contract with Yamal Trade Pte. Ltd.
In January 2018, Teekay LNG sold its 50 percent
ownership interest in the S/S Excelsior to Excelerate Energy for
net proceeds after repaying external debt obligation of $44
million.
(1) Based on Teekay LNG's 50 percent
ownership interests in the six ARC7 LNG carrier newbuildings.
Teekay Offshore
In October 2017, the Randgrid FSO,
which was converted from one of Teekay Offshore's shuttle tankers
at Sembcorp’s Sembawang shipyard in Singapore, commenced its
three-year charter contract with Statoil on the Gina Krog oil and
gas field in the Norwegian sector of the North Sea. This contract
has 12 additional one-year options to extend.
In late-November 2017, the 50 percent-owned
Pioneiro de Libra FPSO, which was converted from one of Teekay
Offshore's shuttle tankers at Sembcorp’s Jurong shipyard in
Singapore, commenced its 12-year charter contract with a consortium
of international oil companies, including Petrobras, Total S.A.,
Shell, China National Petroleum Corporation and CNOOC, on the giant
Libra block in the Santos Basin offshore Brazil.
In late-2017, Teekay Offshore took delivery of
the first two East Coast of Canada shuttle tanker newbuildings,
the Beothuk Spirit and the Norse Spirit, with the third
vessel, the Dorset Spirit, scheduled to deliver in early-March
2018. The first two newbuildings commenced long-term charter
contracts in December 2017 and January 2018, respectively, with a
group of companies that includes Canada Hibernia Holding
Corporation, Chevron Canada, Exxon Mobil, Husky Energy, Mosbacher
Operating Ltd., Murphy Oil, Nalcor Energy, Statoil and Suncor
Energy, and the third newbuilding scheduled to commence its
long-term charter contract in May 2018.
In December 2017, Teekay Offshore completed the
upgrades to the Petrojarl I FPSO unit, which then arrived on the
Atlanta field in Brazil in January 2018. The unit is now undergoing
field installation and testing prior to commencing its five-year
charter contract with Queiroz Galvão Exploração e Produção
SA (QGEP), which is expected to occur in April 2018.
In October 2017 and February 2018, Teekay
Offshore took delivery of the last two of four state-of-the-art
SX-157 Ulstein Design ultra-long distance towing and offshore
installation newbuildings, the ALP Sweeper and ALP Keeper,
constructed by Niigata Shipbuilding & Repair in Japan.
The Partnership is nearing completion of the
previously-announced contract extension with Premier Oil to extend
the employment of the Voyageur Spirit FPSO unit on the Huntington
field out to at least April 2019. The new contract, which will take
effect in April 2018, will include a fixed charter rate component
plus a component based on oil production and oil price.
In January 2018, Teekay Offshore entered into a
contract extension with Petrobras to extend the employment of
the Petrojarl Cidade de Rio das Ostras (Ostras) FPSO for
four months at a slightly lower fixed rate. Petrobras also has an
option to extend the contract for an additional two months to July
2018.
In November 2017, Teekay Offshore declared
options with Samsung Heavy Industries Co. Ltd., to construct two
additional Suezmax DP2 shuttle tanker newbuildings, for an
aggregate fully built-up cost of
approximately $265 million. These newbuildings will be
constructed based on Teekay Offshore's New Shuttle Spirit design.
Upon delivery in 2020, these vessels will join Teekay Offshore’s
contract of affreightment (CoA) fleet in the North Sea.
Teekay Tankers
On November 27, 2017, Teekay Tankers completed
its merger with TIL, increasing its fleet by 18 modern tankers,
including 10 Suezmax tankers, six Aframax tankers and two Long
Range 2 (LR2) product tankers.
In December 2017, Teekay Tankers completed a new
five-year, $270 million, long-term debt facility. The new facility
was used to refinance 14 of the vessels acquired through the merger
with TIL, which extends Teekay Tankers' debt maturity profile,
reduces interest expense, and aligns to Teekay Tankers’ standard
debt covenants.
In November 2017, Teekay Tankers completed the
sale of one older Aframax tanker, the Kareela Spirit, for gross
proceeds of $6.4 million.
Financing and Liquidity Update
In December 2017 and January 2018, Teekay Parent
sold an aggregate of 4.0 million shares of common stock as
part of a continuous offering program (COP), generating gross
proceeds of $36.9 million, of which $25.7 million was received as
of December 31, 2017. The Company currently has the ability to sell
additional shares of common stock having an aggregate offering
amount of up to $3.4 million under the Company's existing COP.
In January 2018, Teekay Parent completed a
private offering of $125 million of aggregate principal amount of 5
percent Convertible Senior Notes due 2023 (Convertible Notes),
which was significantly oversubscribed, raising net proceeds of
approximately $120.9 million. The Convertible Notes will be
convertible into Teekay’s common stock, initially at a rate of
85.4701 shares of common stock per $1,000 principal amount of
Convertible Notes. This represents an initial effective conversion
price of $11.70 per share of common stock. The initial conversion
price represents a premium of 20 percent to the concurrent common
stock offering price of $9.75 per share described below.
Also in January 2018, Teekay Parent completed a
concurrent public offering through the issuance of 10.0 million
common shares priced at $9.75 per share, raising net proceeds of
approximately $93.0 million.
As at December 31, 2017, Teekay Parent had
total liquidity of approximately $313.2 million (consisting of
$129.8 million of cash and cash equivalents and $183.4 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity (excluding Teekay Offshore)
of approximately $908.6 million (consisting of $445.5 million of
cash and cash equivalents and $463.1 million of undrawn revolving
credit facilities). Giving pro-forma effect to the issuance of the
Convertible Notes and the concurrent common equity issuance and COP
proceeds received in January 2018, Teekay Parent's total liquidity
as at December 31, 2017 would have been approximately $538
million.
Conference Call
The Company plans to host a conference call on
Thursday, February 22, 2018 at 2:00 p.m. (ET) to discuss its
results for the fourth quarter and fiscal year 2017. An
accompanying investor presentation will be available on Teekay’s
website at www.teekay.com prior to the start of the
call. All shareholders and interested parties are invited to
listen to the live conference call by choosing from the following
options:
- By dialing (800) 289-0438 or (647) 794-1830, if outside North
America, and quoting conference ID code 7721785
- 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 Fourth Quarter and Annual
Earnings Presentation will also be available at
www.teekay.com in advance of the conference call start
time.
About Teekay
Teekay Corporation operates in the marine
midstream space through its ownership of the general partner and a
portion of the outstanding limited partner interests in Teekay LNG
Partners L.P. (NYSE:TGP) and an interest in the general partner and
a portion of the outstanding limited partner interests in Teekay
Offshore Partners L.P. (NYSE:TOO). The general partners own all of
the outstanding incentive distribution rights of these entities. In
addition, Teekay has a controlling ownership interest in Teekay
Tankers Ltd. (NYSE:TNK) and directly owns a fleet of vessels. The
combined Teekay entities operate total assets under management of
approximately $13 billion, comprised of approximately 215 liquefied
gas, offshore, and conventional tanker assets. With offices in 14
countries and approximately 8,200 seagoing and shore-based
employees, Teekay provides a comprehensive set of marine services
to the world’s leading oil and gas companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries contact:Ryan
HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the U.S. Securities and Exchange Commission. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Adjusted Net Loss Attributable to Shareholders of Teekay, Teekay
Parent GPCO Cash Flow, Teekay Parent OPCO Cash Flow, Teekay Parent
Free Cash Flow, Net Interest Expense and Adjusted Equity Income,
are intended to provide additional information and should not be
considered a substitute for measures of performance prepared in
accordance with GAAP. In addition, these measures do not have
standardized meanings across companies, and therefore may not be
comparable to similar measures presented by other companies. The
Company believes that certain investors use this information to
evaluate the Company’s financial performance, as does
management.
Non-GAAP Financial Measures
Cash Flow from Vessel Operations (CFVO)
represents income (loss) from vessel operations before depreciation
and amortization expense, amortization of in-process revenue
contracts, asset impairments, gains or losses on the sale of
vessels and equipment and other operating assets, write-off of
deferred revenues and operating expenses and adjustments for direct
financing leases to a cash basis, but includes realized gains or
losses on the settlement of foreign currency forward contracts and
a derivative charter contract. CFVO - Consolidated represents CFVO
from vessels that are consolidated on the Company’s financial
statements. CFVO - Equity Investments represents the Company’s
proportionate share of CFVO from its equity-accounted vessels and
other investments. The Company does not control its
equity-accounted vessels and investments and as a result, the
Company does not have the unilateral ability to determine whether
the cash generated by its equity-accounted vessels and other
investments is retained within the entities in which the Company
holds the equity accounted investment or distributed to the Company
and other owners. In addition, the Company does not control the
timing of such distributions to the Company and other owners.
Consequently, readers are cautioned when using total CFVO as a
liquidity measure as the amount contributed from CFVO - Equity
Investments may not be available to the Company in the periods such
CFVO is generated by its equity-accounted vessels and other
investments. CFVO is a non-GAAP financial measure used by certain
investors and management to measure the operational financial
performance of companies. Please refer to Appendices C and E of
this release for reconciliations of these non-GAAP financial
measures to income (loss) from vessel operations and (loss) income
from vessel operations of equity accounted vessels, respectively,
the most directly comparable GAAP measures reflected in the
Company’s consolidated financial statements.
Adjusted Net Loss 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), and refer to footnote (4) of the income statement 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 Free Cash Flow 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
publicly-traded subsidiaries (Teekay LNG and Teekay Tankers) and
its equity accounted investment in Teekay Offshore, net of Teekay
Parent’s corporate general and administrative expenditures for the
given quarter (collectively, Teekay Parent GPCO Cash Flow) plus (b)
CFVO attributed to Teekay Parent’s directly-owned and chartered-in
assets, less Teekay Parent’s net interest expense and dry-dock
expenditures for the given quarter (collectively, Teekay Parent
OPCO Cash Flow). Net Interest Expense includes interest expense,
interest income and realized gains and 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 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, |
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
|
|
|
Revenues(1) |
326,686 |
|
499,728 |
|
552,203 |
|
1,880,332 |
|
2,328,569 |
|
|
|
|
|
|
|
Voyage expenses |
(24,438 |
) |
(41,401 |
) |
(41,237 |
) |
(153,766 |
) |
(138,339 |
) |
Vessel operating
expenses |
(131,650 |
) |
(200,456 |
) |
(199,352 |
) |
(731,150 |
) |
(825,024 |
) |
Time-charter hire
expense |
(22,787 |
) |
(28,645 |
) |
(38,418 |
) |
(120,893 |
) |
(150,145 |
) |
Depreciation and
amortization |
(63,116 |
) |
(136,942 |
) |
(144,901 |
) |
(485,829 |
) |
(571,825 |
) |
General and
administrative expenses |
(17,509 |
) |
(27,662 |
) |
(26,999 |
) |
(106,150 |
) |
(119,889 |
) |
Asset
impairments(2) |
— |
|
(231,159 |
) |
(2,146 |
) |
(232,659 |
) |
(45,796 |
) |
Net loss on sale of
vessels, equipment and other operating assets |
(489 |
) |
(20,426 |
) |
(12,038 |
) |
(38,084 |
) |
(66,450 |
) |
Restructuring charges(1) |
(42 |
) |
(2,883 |
) |
(3,890 |
) |
(5,101 |
) |
(26,811 |
) |
Income (loss)
from vessel operations |
66,655 |
|
(189,846 |
) |
83,222 |
|
6,700 |
|
384,290 |
|
|
|
|
|
|
|
Interest expense |
(49,163 |
) |
(74,499 |
) |
(69,018 |
) |
(268,400 |
) |
(282,966 |
) |
Interest income |
1,373 |
|
1,900 |
|
1,314 |
|
6,290 |
|
4,821 |
|
Realized and unrealized
gain (loss) on |
|
|
|
|
|
non-designated
derivative instruments(3) |
4,319 |
|
(6,128 |
) |
131,876 |
|
(38,854 |
) |
(35,091 |
) |
Equity (loss)
income(4) |
(971 |
) |
1,264 |
|
11,933 |
|
(37,344 |
) |
85,639 |
|
Income tax expense |
(465 |
) |
(5,221 |
) |
(22,102 |
) |
(12,232 |
) |
(24,468 |
) |
Foreign exchange (loss)
gain |
(3,575 |
) |
(2,642 |
) |
13,007 |
|
(26,463 |
) |
(6,548 |
) |
Loss on deconsolidation
of Teekay Offshore(5) |
(1,600 |
) |
(103,188 |
) |
— |
|
(104,788 |
) |
— |
|
Other income (loss) –
net(6) |
1,188 |
|
(4,705 |
) |
(18,207 |
) |
(3,981 |
) |
(39,013 |
) |
Net income (loss) |
17,761 |
|
(383,065 |
) |
132,025 |
|
(479,072 |
) |
86,664 |
|
Less: Net (income) loss
attributable |
|
|
|
|
|
to
non-controlling interests(7) |
(31,488 |
) |
370,483 |
|
(134,686 |
) |
327,355 |
|
(209,846 |
) |
Net loss attributable to
the shareholders of Teekay
Corporation |
|
|
|
|
|
(13,727 |
) |
(12,582 |
) |
(2,661 |
) |
(151,717 |
) |
(123,182 |
) |
Loss per common share
of Teekay Corporation |
|
|
|
|
|
-
Basic |
(0.16 |
) |
(0.15 |
) |
(0.03 |
) |
(1.76 |
) |
(1.62 |
) |
- Diluted |
(0.16 |
) |
(0.15 |
) |
(0.04 |
) |
(1.76 |
) |
(1.62 |
) |
|
|
|
|
|
|
Weighted-average number
of common |
|
|
|
|
|
shares
outstanding |
|
|
|
|
|
-
Basic |
86,641,584 |
|
86,261,330 |
|
86,131,038 |
|
86,335,473 |
|
79,211,154 |
|
- Diluted |
86,641,584 |
|
86,261,330 |
|
86,131,038 |
|
86,335,473 |
|
79,211,154 |
|
(1) Restructuring charges for the year ended December 31,
2017 relate to severance costs from the termination of the charter
contract for Teekay Offshore's Arendal Spirit UMS and the
reorganization and realignment of resources of the Company's
strategic development function and shore staff redundancies
associated with the Company's FPSO business. The restructuring
charges for the three months and year ended December 31, 2016
primarily relate to the costs related to the reorganization of the
Company's FPSO business. The restructuring charges for the
three months and year ended December 31, 2016 also include costs
related to the closure of offices and seafarers' severance amounts,
part of which were recovered from the customer and which recovery
was included in revenues in the consolidated statements of income
for the three months and year ended December 31, 2016.
(2) Asset impairments for the year ended December 31, 2017
primarily relate to the impairments of two FPSO units in Teekay
Parent, resulting from a revaluation of estimated future cash flows
and carrying values of the asset group in response to the
deconsolidation of Teekay Offshore on September 25, 2017. Asset
impairments for the year ended December 31, 2017 also includes
Teekay LNG's impairments of two Suezmax tankers, Teide Spirit and
Toledo Spirit. Asset impairments of vessels and equipment for
the three months and year ended December 31, 2016 relates to the
$2.1 million write-down of one shuttle tanker owned by Teekay
Offshore as a result of fewer opportunities to trade the vessel in
the spot conventional tanker market. Asset impairments of
vessels and equipment for the year ended December 31, 2016 also
includes $43.7 million relating to the write-downs of two units for
maintenance and safety (UMS) newbuildings as a result of the
cancellation of the related construction contracts by Teekay
Offshore's subsidiaries within Logitel Offshore Pte. Ltd.
(3) Realized and unrealized gains (losses) related to
derivative instruments that are not designated as hedges for
accounting purposes are included as a separate line item in the
consolidated statements of income (loss). The realized (losses)
gains relate to the amounts the Company actually paid to settle
such derivative instruments and the unrealized gains (losses)
relate to the change in fair value of such derivative instruments,
as detailed in the table below:
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Realized
(losses) gains relating to: |
|
|
|
|
|
|
Interest rate
swaps |
(5,725 |
) |
(15,729 |
) |
(19,512 |
) |
(53,924 |
) |
(87,320 |
) |
|
Termination of interest
rate swaps |
— |
|
— |
|
— |
|
(610 |
) |
(8,140 |
) |
|
Foreign currency
forward contracts |
29 |
|
1,609 |
|
(1,271 |
) |
667 |
|
(11,186 |
) |
|
Time-charter swaps |
160 |
|
— |
|
932 |
|
1,106 |
|
2,154 |
|
|
Forward freight
agreements |
(234 |
) |
234 |
|
— |
|
273 |
|
— |
|
|
|
(5,770 |
) |
(13,886 |
) |
(19,851 |
) |
(52,488 |
) |
(104,492 |
) |
Unrealized
gains (losses) relating to: |
|
|
|
|
|
|
Interest rate
swaps |
11,824 |
|
11,575 |
|
158,501 |
|
17,005 |
|
62,446 |
|
|
Foreign currency
forward contracts |
(457 |
) |
735 |
|
(5,237 |
) |
3,925 |
|
15,833 |
|
|
Stock purchase
warrants |
(1,385 |
) |
(4,461 |
) |
(859 |
) |
(6,421 |
) |
(9,753 |
) |
|
Time-charter swap |
(14 |
) |
— |
|
(678 |
) |
(875 |
) |
875 |
|
|
Forward freight
agreements |
121 |
|
(91 |
) |
— |
|
— |
|
— |
|
|
|
10,089 |
|
7,758 |
|
151,727 |
|
13,634 |
|
69,401 |
|
Total realized and unrealized gains (losses) on
non-designated derivative instruments |
4,319 |
|
(6,128 |
) |
131,876 |
|
(38,854 |
) |
(35,091 |
) |
(4) 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 income
(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 |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Equity
(loss) income |
(971 |
) |
1,264 |
|
11,933 |
|
(37,344 |
) |
85,639 |
|
Proportionate share of unrealized gains on derivative
instruments |
(5,680 |
) |
(3,804 |
) |
(6,986 |
) |
(7,706 |
) |
(8,678 |
) |
Other(i) |
9,203 |
|
6,963 |
|
7,510 |
|
66,922 |
|
5,764 |
|
Equity income adjusted for items in
Appendix A |
2,552 |
|
4,423 |
|
12,457 |
|
21,872 |
|
82,725 |
|
(i) Other for the three months and year ended December 31,
2017 includes the Company’s proportionate share of the reduction in
carrying value of amounts contingently owing to Sevan Marine ASA in
relation to the original financing for its accommodation business
subsequently sold to Teekay Offshore, partially offset by the
settlement of an unrecognized license fee of Sevan Marine ASA that
was previously in dispute, the impairment of two vessels in Teekay
LNG's Exmar LPG joint venture, and a gain to reflect the
revaluation of Teekay Tankers' and Teekay Parent's equity accounted
investment at the date of the TIL merger. Other for the year ended
December 31, 2017 also includes the Company's proportionate share
of realized losses on cross-currency swap and interest rate swap
amendments in Teekay Offshore and foreign currency exchange gains
and losses in the Company's equity accounted investments. Refer to
footnote (2) of Appendix A included in this release for further
details. Other for the year ended December 31, 2017 also includes
the Company's proportionate share of the write-down of the
Company's and Teekay Tankers' equity investments in TIL to their
estimated fair value, based on the best available indication of
fair value at June 30, 2017, which was the TIL share price as on
that date. This resulted in a consolidated non-cash
impairment charge of $48.6 million during the year ended December
31, 2017 related to their equity investments in TIL. Other for the
three months and year ended December 31, 2016 includes the
Company's proportionate share of loss on sale of a vessel in Teekay
LNG's Exmar LPG BVBA joint venture and write-downs of loan
receivables from Petrotrans Holdings Ltd. and Gemini Tankers LLC.
The Company's proportionate share of a gain on sale of a subsidiary
in Sevan Marine ASA is included in the year ended December 31,
2016.
(5) In connection with Brookfield's acquisition of the 49
percent interest in TOO GP, Teekay and Brookfield entered into an
amended limited liability company agreement whereby Brookfield
obtained certain participatory rights in the management of TOO GP,
which resulted in Teekay deconsolidating Teekay Offshore for
accounting purposes on September 25, 2017 and recognizing a loss on
deconsolidation for the three months and year ended December 31,
2017. Subsequent to the closing of the Brookfield transaction,
Teekay retains significant influence over Teekay Offshore and
accounts for its investment in Teekay Offshore using the equity
method.
Upon completion of the transaction, the Company
recognized both the net cash proceeds it received as part of the
Brookfield transaction and the fair value of its retained interests
in Teekay Offshore with the difference between the amounts
recognized and derecognized being the loss on deconsolidation.
(6) Includes a gain of $1.3 million for the three months
and year ended December 31, 2017 from the sale of the Company's
cost-accounted investment in the dry bulk shipping company CVI
Ocean Transportation II Inc., a company developed in partnership
with CarVal Investors in 2014. A write-down of $19.0 million was
previously recorded on this investment during the three months and
year ended December 31, 2016.
(7) Subsequent to the formation of the Daughter Entities,
Teekay sold certain vessels to the Daughter Entities. As the
Daughter Entities were non-wholly-owned consolidated subsidiaries
of Teekay at the date of the sales, all of the gain or loss on
sales of these vessels was fully eliminated upon consolidation.
Consequently, the portion of the gain or loss attributable to
Teekay’s reduced interest in the vessels was deferred. The total
unrecognized net deferred gain relating to the vessels previously
sold from Teekay to Teekay Offshore was $349.6 million. Upon
deconsolidation of Teekay Offshore, such amount was recognized in
net (income) loss attributable to non-controlling interests for the
year ended December 31, 2017.
Teekay CorporationSummary Consolidated Balance Sheets(in
thousands of U.S. dollars)
|
As at December 31, |
As at September 30, |
As at December 31, |
|
2017(1) |
2017(1) |
2016 |
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
Cash and
cash equivalents - Teekay Parent |
129,772 |
|
231,669 |
|
146,362 |
|
Cash and
cash equivalents - Teekay LNG |
244,241 |
|
161,008 |
|
126,146 |
|
Cash and
cash equivalents - Teekay Offshore |
— |
|
— |
|
227,378 |
|
Cash and
cash equivalents - Teekay Tankers |
71,439 |
|
60,606 |
|
68,108 |
|
Other
current assets |
307,525 |
|
339,277 |
|
389,727 |
|
Restricted
cash - Teekay Parent |
7,257 |
|
4,820 |
|
4,562 |
|
Restricted
cash - Teekay LNG |
95,194 |
|
93,012 |
|
117,027 |
|
Restricted
cash - Teekay Offshore |
— |
|
— |
|
114,909 |
|
Restricted
cash - Teekay Tankers |
4,271 |
|
4,317 |
|
750 |
|
Assets held
for sale |
33,671 |
|
23,400 |
|
61,282 |
|
Vessels and
equipment - Teekay Parent |
337,318 |
|
346,090 |
|
602,672 |
|
Vessels and
equipment - Teekay LNG |
2,461,219 |
|
1,960,207 |
|
1,858,381 |
|
Vessels and
equipment - Teekay Offshore |
— |
|
— |
|
4,084,803 |
|
Vessels and
equipment - Teekay Tankers |
1,965,514 |
|
1,514,685 |
|
1,605,372 |
|
Advances on
newbuilding contracts/conversions |
444,493 |
|
492,800 |
|
987,658 |
|
Investment
in equity accounted investees(1) |
1,130,198 |
|
1,187,648 |
|
1,010,308 |
|
Investment
in direct financing leases |
495,990 |
|
633,805 |
|
660,594 |
|
Other
assets |
227,631 |
|
235,865 |
|
482,908 |
|
Intangible
assets |
93,014 |
|
97,949 |
|
89,175 |
|
Goodwill |
43,690 |
|
43,690 |
|
176,630 |
|
Total Assets |
8,092,437 |
|
7,430,848 |
|
12,814,752 |
|
LIABILITIES AND EQUITY |
|
|
Accounts
payable and accrued liabilities |
238,259 |
|
217,771 |
|
448,670 |
|
Advances
from affiliates |
49,100 |
|
79,208 |
|
8,522 |
|
Current
portion of long-term debt - Teekay Parent |
81,748 |
|
52,115 |
|
52,169 |
|
Current
portion of long-term debt - Teekay LNG |
659,350 |
|
624,824 |
|
228,864 |
|
Current
portion of long-term debt - Teekay Offshore |
— |
|
— |
|
586,892 |
|
Current
portion of long-term debt - Teekay Tankers |
173,972 |
|
166,185 |
|
171,019 |
|
Long-term
debt - Teekay Parent |
585,663 |
|
754,085 |
|
680,241 |
|
Long-term
debt - Teekay LNG |
2,150,191 |
|
1,975,849 |
|
1,955,201 |
|
Long-term
debt - Teekay Offshore |
— |
|
— |
|
2,596,002 |
|
Long-term
debt - Teekay Tankers |
927,238 |
|
630,676 |
|
761,997 |
|
Derivative
liabilities |
128,811 |
|
134,244 |
|
530,854 |
|
In process
revenue contracts |
38,193 |
|
42,618 |
|
122,690 |
|
Other
long-term liabilities |
124,756 |
|
131,115 |
|
333,236 |
|
Redeemable
non-controlling interest |
— |
|
— |
|
249,102 |
|
Equity: |
— |
|
|
|
Non-controlling interests |
2,146,407 |
|
1,833,095 |
|
3,189,928 |
|
Shareholders of Teekay |
788,749 |
|
789,063 |
|
899,365 |
|
Total Liabilities and Equity |
8,092,437 |
|
7,430,848 |
|
12,814,752 |
|
|
|
|
|
Net debt -
Teekay Parent(2) |
530,382 |
|
569,711 |
|
581,486 |
|
Net debt -
Teekay LNG(2) |
2,470,106 |
|
2,346,653 |
|
1,940,892 |
|
Net debt -
Teekay Offshore(2) |
— |
|
— |
|
2,840,607 |
|
Net debt - Teekay Tankers(2) |
1,025,500 |
|
731,938 |
|
864,158 |
|
(1) Refer to footnote (5) of the
summary consolidated statements of income (loss) included in this
release for further details.(2) Net debt is a non-GAAP
financial measure and represents current and long-term debt less
cash and cash equivalents and, if applicable, restricted
cash.
Teekay CorporationSummary Consolidated Statements of Cash
Flows(in thousands of U.S. dollars)
|
Year Ended |
|
December 31, |
|
2017 |
2016 |
|
(unaudited) |
(unaudited) |
Cash and cash
equivalents provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net (loss) income |
(479,072 |
) |
86,664 |
|
Depreciation and
amortization |
485,829 |
|
571,825 |
|
Amortization of
in-process revenue contracts |
(26,958 |
) |
(28,109 |
) |
Unrealized gain on
derivative instruments |
(95,556 |
) |
(145,116 |
) |
Loss on sale of vessels
and equipment |
38,084 |
|
66,450 |
|
Asset impairments |
232,659 |
|
45,796 |
|
Equity loss (income),
net of dividends received |
87,602 |
|
(47,563 |
) |
Income tax expense |
12,232 |
|
24,468 |
|
Unrealized foreign
exchange loss and other |
98,469 |
|
53,999 |
|
Loss on deconsolidation
of Teekay Offshore |
104,788 |
|
— |
|
Change in operating
assets and liabilities |
106,567 |
|
38,333 |
|
Expenditures for dry
docking |
(50,899 |
) |
(45,964 |
) |
Net operating cash flow |
513,745 |
|
620,783 |
|
|
|
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance
of long-term debt, net of issuance costs |
1,007,010 |
|
2,075,014 |
|
Prepayments of
long-term debt |
(831,901 |
) |
(1,872,573 |
) |
Scheduled repayments of
long-term debt |
(687,544 |
) |
(967,146 |
) |
Proceeds from financing
related to sales and leaseback of vessels |
809,935 |
|
355,306 |
|
Repayments of
obligations related to capital leases |
(46,090 |
) |
(21,595 |
) |
Decrease (increase) in
restricted cash |
104,142 |
|
(49,079 |
) |
Net proceeds from
equity issuances of subsidiaries |
172,930 |
|
327,419 |
|
Net proceeds from
equity issuances of Teekay Corporation |
25,636 |
|
105,462 |
|
Acquisition of shares
in Teekay Tankers |
(19,444 |
) |
— |
|
Distributions from
subsidiaries to non-controlling interests |
(103,150 |
) |
(136,151 |
) |
Cash dividends
paid |
(18,977 |
) |
(17,406 |
) |
Other financing
activities |
5,337 |
|
87 |
|
Net financing cash flow |
417,884 |
|
(200,662 |
) |
|
|
|
INVESTING
ACTIVITIES |
|
|
Expenditures for
vessels and equipment |
(1,054,052 |
) |
(648,326 |
) |
Proceeds from sale of
vessels and equipment |
73,712 |
|
252,656 |
|
Investment in
equity-accounted investees |
(98,774 |
) |
(61,885 |
) |
Advances to
equity-accounted investees |
(12,946 |
) |
(96,823 |
) |
Cash of Tanker
Investments Ltd. upon acquisition, net of transaction costs |
30,831 |
|
— |
|
Cash of Teekay Offshore
upon deconsolidation, net of proceeds received |
(17,977 |
) |
— |
|
Direct financing lease
payments received |
17,422 |
|
23,535 |
|
Other investing
activities |
7,613 |
|
324 |
|
Net investing cash flow |
(1,054,171 |
) |
(530,519 |
) |
|
|
|
Decrease in
cash and cash equivalents |
(122,542 |
) |
(110,398 |
) |
Cash and cash
equivalents, beginning of the year |
567,994 |
|
678,392 |
|
Cash and cash equivalents, end of the year |
445,452 |
|
567,994 |
|
Teekay CorporationAppendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Loss(in thousands of U.S. dollars,
except per share data)
|
|
Three Months Ended |
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
|
|
2017 |
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
$ Per |
|
$ Per |
|
$ Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
Net
income (loss) – GAAP basis |
17,761 |
|
|
(383,065 |
) |
|
(479,072 |
) |
|
Adjust for:
Net (income) loss attributable to |
|
|
|
|
|
|
non-controlling interests |
(31,488 |
) |
|
370,483 |
|
|
327,355 |
|
|
Net
loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(13,727 |
) |
(0.16 |
) |
(12,582 |
) |
(0.15 |
) |
(151,717 |
) |
(1.76 |
) |
Add
(subtract) specific items affecting net |
|
|
|
|
|
|
|
income
(loss): |
|
|
|
|
|
|
|
Unrealized gains from
derivative instruments(2) |
(15,785 |
) |
(0.18 |
) |
(11,555 |
) |
(0.13 |
) |
(20,594 |
) |
(0.24 |
) |
|
Foreign exchange losses
(gains)(3) |
1,536 |
|
0.02 |
|
(853 |
) |
(0.01 |
) |
9,437 |
|
0.11 |
|
|
Net (gain) loss on sale
of vessels, equipment and other operating
assets(4) |
(1,935 |
) |
(0.02 |
) |
20,426 |
|
0.23 |
|
35,660 |
|
0.41 |
|
|
Asset
impairments(4) |
5,500 |
|
0.06 |
|
231,159 |
|
2.68 |
|
286,730 |
|
3.33 |
|
|
Restructuring charges,
net of recovery(5) |
(52 |
) |
— |
|
2,909 |
|
0.03 |
|
5,468 |
|
0.06 |
|
|
Realized loss on
interest rate swap amendments |
— |
|
— |
|
5,347 |
|
0.06 |
|
5,347 |
|
0.06 |
|
|
Loss on deconsolidation
of Teekay Offshore(6) |
1,600 |
|
0.02 |
|
103,188 |
|
1.20 |
|
104,788 |
|
1.21 |
|
|
Other(4)(7) |
5,694 |
|
0.07 |
|
8,371 |
|
0.10 |
|
31,955 |
|
0.37 |
|
|
Non-controlling interests’ share of items above(8) |
7,669 |
|
0.08 |
|
(382,048 |
) |
(4.42 |
) |
(426,028 |
) |
(4.93 |
) |
Total adjustments |
4,227 |
|
0.05 |
|
(23,056 |
) |
(0.26 |
) |
32,763 |
|
0.38 |
|
Adjusted net loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(9,500 |
) |
(0.11 |
) |
(35,638 |
) |
(0.41 |
) |
(118,954 |
) |
(1.38 |
) |
- Basic per share amounts.
- Reflects the unrealized gains relating to the change in the
mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes, including those
investments included in the Company's proportionate share of equity
(loss) income from joint ventures, and hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes.
- 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.
- Refer to footnote (4) of the summary consolidated statements of
income (loss) included in this release for further details.
- Refer to footnote (1) of the summary consolidated statements of
income (loss) included in this release for further details.
- Refer to footnote (5) of the summary consolidated statements of
income (loss) included in this release for further details.
- Other for the three months and year ended December 31, 2017
includes a gain from the sale of one of the Company's
cost-accounted investments (refer to footnote (6) of the summary
consolidated statements of income (loss) included in this release
for further details), the deferred tax expense in Teekay LNG's
Teekay Tangguh joint venture, the reversal of the fair value
differential from the TIL merger associated with loans refinanced
in Teekay Tankers in December 2017, early termination fees paid by
Teekay Parent on the contract terminations for two in-chartered
vessels, and costs related to projects during their pre-operational
phases. Other for the year ended December 31, 2017 also includes
the write-off of deferred revenues and operating expenses as a
result of the termination of the Arendal Spirit UMS charter
contract in late-April 2017, the settlement of a contingent
liability in Teekay Offshore, an increase in the Piranema Spirit
FPSO rate reduction contingency in Teekay Offshore, costs,
including those associated with interest rate swaps, related to
projects during their pre-operational phases, legal fees associated
with Teekay Tankers' merger with TIL and with the Brookfield
transaction, and the net loss provision relating to cancellation of
UMS newbuildings in Teekay Offshore.
- 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.
“Non-controlling interests’ share of items above” for the year
ended December 31, 2017 and the quarter ended September 30, 2017
also includes the recognition of previously deferred gains of
$349.6 million. See footnote (7) of the summary consolidated
statements of income (loss) included in this release for further
details.
Teekay CorporationAppendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Loss(in thousands of U.S. dollars,
except per share data)
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
December 31, |
|
|
2016 |
2016 |
|
|
(unaudited) |
(unaudited) |
|
|
|
$ Per |
|
$ Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
Net
income – GAAP basis |
132,025 |
|
|
86,664 |
|
|
Adjust for: Net income attributable to non-controlling
interests |
(134,686 |
) |
|
(209,846 |
) |
|
Net loss attributable to shareholders of
Teekay |
(2,661 |
) |
(0.03 |
) |
(123,182 |
) |
(1.62 |
) |
Add
(subtract) specific items affecting net loss: |
|
|
|
|
|
Unrealized gains from
derivative instruments(2) |
(159,454 |
) |
(1.85 |
) |
(78,761 |
) |
(1.00 |
) |
|
Foreign exchange
gains(3) |
(19,127 |
) |
(0.22 |
) |
(15,035 |
) |
(0.19 |
) |
|
Net loss on sale of
vessels, equipment, and other assets(4) |
16,898 |
|
0.20 |
|
68,078 |
|
0.86 |
|
|
Asset
impairments(4)(5) |
23,508 |
|
0.27 |
|
67,722 |
|
0.85 |
|
|
Restructuring charges,
net of recovery(6) |
3,595 |
|
0.04 |
|
10,152 |
|
0.13 |
|
|
Adjustments to deferred
taxes(7) |
15,973 |
|
0.19 |
|
15,973 |
|
0.20 |
|
|
Other(8) |
5,244 |
|
0.06 |
|
51,415 |
|
0.65 |
|
|
Non-controlling
interests’ share of items above(9) |
97,470 |
|
1.12 |
|
(39,924 |
) |
(0.50 |
) |
|
Earnings per share
adjustment relating to Teekay Offshore's |
|
|
|
|
|
|
|
|
|
Series C Preferred Unit conversion(10) |
— |
|
— |
|
— |
|
0.07 |
|
Total adjustments |
(15,893 |
) |
(0.19 |
) |
79,620 |
|
1.07 |
|
Adjusted net loss attributable to |
|
|
|
|
|
shareholders of Teekay |
(18,554 |
) |
(0.22 |
) |
(43,562 |
) |
(0.55 |
) |
- Basic per share amounts.
- Reflects the unrealized gains relating to the change in the
mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes, including those
investments included in the Company's proportionate share of equity
income from joint ventures and hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes.
- Foreign currency exchange gains primarily relate to the
Company’s debt denominated in Euros and NOK, the unrealized losses
on cross currency swaps used to economically hedge the principal
and interest on NOK bonds and the Company's share of unrealized
foreign exchange losses in Sevan Marine ASA. Nearly all of the
Company’s foreign currency exchange gains and losses are
unrealized.
- Refer to footnote (4) of the summary consolidated statements of
income (loss) included in this release for further details.
- Refer to footnote (6) of the summary consolidated statements of
income (loss) included in this release for further details.
- Refer to footnote (1) of the summary consolidated statements of
income (loss) included in this release for further details.
- Adjustments to deferred taxes relates to decreases in the
valuation allowances related to certain Australian entities and
increases in deferred income tax assets for one of Teekay
Offshore's Norwegian tax structures for the three months and year
ended December 31, 2016.
- Other for the three months and year ended December 31, 2016
includes a one-time compensation cost associated with the
retirement of Teekay Corporation's Chief Executive Officer.
Other for the year ended December 31, 2016 primarily relates to
potential damages accrued relating to the cancellation of the
construction contracts for two UMS newbuildings, the write-off of
deferred financing costs relating to a debt refinancing and
termination fees associated with the partial termination of a loan,
gains associated with the extinguishment of a contingent liability
resulting from the UMS contract cancellations, depreciation expense
as a result of the change in the useful life estimate of the
shuttle component of Teekay Offshore’s shuttle tankers from 25
years to 20 years effective January 1, 2016, loss on the
termination of an interest rate swaps and costs, including those
associated with interest rate swaps, related to projects during
their pre-operational phases.
- 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 arrive at 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.
“Non-controlling interests’ share of items above” for the three
months and year ended December 31, 2016 also includes deferred
gains on the sale of vessels sold externally. See footnote (7) of
the summary of consolidated statements of income (loss) included in
this release for further details.
- Relates to the Company's portion of the inducement premium and
exchange contribution charged to retained earnings by Teekay
Offshore when converting its outstanding Series C Preferred Units
to common units and Series C-1 Preferred Units. Teekay Offshore
repurchased and cancelled all of its outstanding Series C-1
Preferred Units as part of the Brookfield Transaction.
Teekay CorporationAppendix B - Supplemental Financial
InformationSummary Statement of Income (Loss) for the Three Months
EndedDecember 31, 2017(in thousands of U.S.
dollars)(unaudited)
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
Revenues |
126,307 |
|
105,229 |
|
107,683 |
|
(12,533 |
) |
326,686 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(4,303 |
) |
(20,443 |
) |
(343 |
) |
651 |
|
(24,438 |
) |
Vessel
operating expenses |
(27,026 |
) |
(43,440 |
) |
(60,480 |
) |
(704 |
) |
(131,650 |
) |
Time-charter hire expense |
— |
|
(3,202 |
) |
(29,093 |
) |
9,508 |
|
(22,787 |
) |
Depreciation and amortization |
(27,651 |
) |
(26,829 |
) |
(8,636 |
) |
— |
|
(63,116 |
) |
General and
administrative expenses |
(4,949 |
) |
(8,004 |
) |
(7,634 |
) |
3,078 |
|
(17,509 |
) |
Net loss on
sale of vessels, equipment and |
|
|
|
|
|
|
other operating
assets |
— |
|
(489 |
) |
— |
|
— |
|
(489 |
) |
Restructuring charges |
— |
|
— |
|
(42 |
) |
— |
|
(42 |
) |
|
|
|
|
|
|
|
Income from vessel operations |
62,378 |
|
2,822 |
|
1,455 |
|
— |
|
66,655 |
|
|
|
|
|
|
|
Interest
expense |
(23,333 |
) |
(9,613 |
) |
(16,217 |
) |
— |
|
(49,163 |
) |
Interest
income |
880 |
|
163 |
|
330 |
|
— |
|
1,373 |
|
Realized
and unrealized gain (loss) |
|
|
|
|
|
|
on derivative
instruments |
3,066 |
|
2,028 |
|
(775 |
) |
— |
|
4,319 |
|
Equity
income (loss) |
2,992 |
|
1,804 |
|
(5,767 |
) |
— |
|
(971 |
) |
Equity in
earnings of subsidiaries(2) |
— |
|
— |
|
10,923 |
|
(10,923 |
) |
— |
|
Income tax
recovery (expense) |
319 |
|
966 |
|
(1,750 |
) |
— |
|
(465 |
) |
Foreign
exchange loss |
(2,436 |
) |
(72 |
) |
(1,067 |
) |
— |
|
(3,575 |
) |
Loss on
deconsolidation of Teekay Offshore |
|
|
(1,600 |
) |
|
(1,600 |
) |
Other income - net |
424 |
|
23 |
|
741 |
|
— |
|
1,188 |
|
Net
income (loss) |
44,290 |
|
(1,879 |
) |
(13,727 |
) |
(10,923 |
) |
17,761 |
|
Less: Net
income attributable |
|
|
|
|
|
|
to
non-controlling interests(3) |
(4,413 |
) |
— |
|
— |
|
(27,075 |
) |
(31,488 |
) |
Net
income (loss) attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities
|
39,877 |
|
(1,879 |
) |
(13,727 |
) |
(37,998 |
) |
(13,727 |
) |
- Consolidation Adjustments column includes adjustments which
eliminate transactions between subsidiaries (a) Teekay LNG and
Teekay Tankers and (b) Teekay Parent.
- Teekay Corporation’s proportionate share of the net earnings of
its publicly-traded subsidiaries. Refer to footnote (7) of
the summary consolidated statements of income (loss) included in
this release for further details.
- Net income attributable to non-controlling interests in the
Teekay LNG column represents the joint venture partners’ share of
the net income or loss of its respective consolidated joint
ventures. Net income attributable to non-controlling interest
in the Consolidation Adjustments column represents the public’s
share of the net income of Teekay’s publicly-traded consolidated
subsidiaries.
Teekay CorporationAppendix B - Supplemental Financial
InformationSummary Statement of Income (Loss) for the Year
EndedDecember 31, 2017(in thousands of U.S.
dollars)(unaudited)
|
|
Teekay |
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
Offshore(1) |
LNG |
Tankers(2) |
Parent |
Adjustments(2)(3) |
|
|
|
|
|
|
|
|
|
Revenues |
796,711 |
|
432,676 |
|
431,178 |
|
303,566 |
|
(83,799 |
) |
1,880,332 |
|
|
|
|
|
|
|
|
|
Voyage
expenses |
(68,802 |
) |
(8,202 |
) |
(77,368 |
) |
(1,693 |
) |
2,299 |
|
(153,766 |
) |
Vessel
operating expenses |
(249,805 |
) |
(103,139 |
) |
(175,389 |
) |
(202,985 |
) |
168 |
|
(731,150 |
) |
Time-charter hire expense |
(60,592 |
) |
— |
|
(30,661 |
) |
(98,654 |
) |
69,014 |
|
(120,893 |
) |
Depreciation and amortization |
(219,406 |
) |
(105,545 |
) |
(100,481 |
) |
(60,397 |
) |
— |
|
(485,829 |
) |
General and
administrative expenses |
(46,399 |
) |
(16,541 |
) |
(32,879 |
) |
(22,649 |
) |
12,318 |
|
(106,150 |
) |
Asset
impairments |
(1,500 |
) |
(25,500 |
) |
— |
|
(205,659 |
) |
— |
|
(232,659 |
) |
Net loss on
sale of vessels, equipment and other operating assets |
— |
|
(25,100 |
) |
(12,984 |
) |
— |
|
— |
|
(38,084 |
) |
Restructuring charges |
(3,147 |
) |
— |
|
— |
|
(1,954 |
) |
— |
|
(5,101 |
) |
|
|
|
|
|
|
|
|
Income (loss) from vessel operations |
147,060 |
|
148,649 |
|
1,416 |
|
(290,425 |
) |
— |
|
6,700 |
|
|
|
|
|
|
|
|
Interest
expense |
(108,993 |
) |
(80,937 |
) |
(31,294 |
) |
(67,629 |
) |
20,453 |
|
(268,400 |
) |
Interest
income |
1,416 |
|
2,915 |
|
907 |
|
21,505 |
|
(20,453 |
) |
6,290 |
|
Realized
and unrealized (loss) gain |
|
|
|
|
|
|
|
on derivative
instruments |
(28,935 |
) |
(5,309 |
) |
1,319 |
|
(5,929 |
) |
— |
|
(38,854 |
) |
Equity
income (loss) |
12,028 |
|
9,789 |
|
(25,370 |
) |
(33,791 |
) |
— |
|
(37,344 |
) |
Equity in
earnings of subsidiaries(4) |
— |
|
— |
|
— |
|
321,781 |
|
(321,781 |
) |
— |
|
Income tax
expense |
(3,939 |
) |
(824 |
) |
(5,331 |
) |
(2,138 |
) |
— |
|
(12,232 |
) |
Foreign
exchange (loss) gain |
(10,149 |
) |
(26,933 |
) |
80 |
|
10,539 |
|
— |
|
(26,463 |
) |
Loss on
deconsolidation of Teekay Offshore |
— |
|
— |
|
— |
|
(105,587 |
) |
799 |
|
(104,788 |
) |
Other (loss) income - net |
(5,749 |
) |
1,561 |
|
250 |
|
(43 |
) |
— |
|
(3,981 |
) |
Net
income (loss) |
2,739 |
|
48,911 |
|
(58,023 |
) |
(151,717 |
) |
(320,982 |
) |
(479,072 |
) |
Less: Net
income attributable |
|
|
|
|
|
|
|
to
non-controlling interests(5) |
(8,262 |
) |
(14,946 |
) |
— |
|
— |
|
350,563 |
|
327,355 |
|
Net
(loss) income attributable to |
|
|
|
|
|
|
|
shareholders/unitholders |
|
|
|
|
|
|
|
of publicly-listed entities |
(5,523 |
) |
33,965 |
|
(58,023 |
) |
(151,717 |
) |
29,581 |
|
(151,717 |
) |
- Teekay Offshore was consolidated by the Company for the period
up to September 25, 2017 and equity accounted for thereafter.
- On May 31, 2017, Teekay Tankers acquired from Teekay Parent,
the remaining 50% interest in Teekay Tanker Operations Ltd. (TTOL).
As a result of the acquisition, the financial information for
Teekay Tankers prior to the date that Teekay Tankers acquired
interests in TTOL is retroactively adjusted to include 100% of the
results of TTOL during the periods they were under common control
of Teekay and had begun operations.
- Consolidation Adjustments column includes adjustments which
eliminate transactions between subsidiaries (a) Teekay Offshore for
the period up to September 25, 2017, and Teekay LNG and Teekay
Tankers and (b) Teekay Parent.
- Teekay Corporation’s proportionate share of the net earnings of
its publicly-traded subsidiaries. Refer to footnote (7) of
the summary consolidated statements of income (loss) included in
this release for further details.
- Net income attributable to non-controlling interests in the
Teekay LNG and Teekay Offshore columns represents the joint venture
partners’ share of the net income or loss of their 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 December 31, 2017(in thousands of U.S.
dollars)(unaudited)
|
|
|
|
|
Teekay |
|
Conventional |
|
|
Corporate |
Parent |
|
Tankers |
FPSOs |
Other(1)(2) |
G&A |
Total |
|
|
|
|
|
|
Revenues(2) |
100 |
|
65,625 |
|
41,958 |
|
— |
|
107,683 |
|
|
|
|
|
|
|
Voyage
expenses |
(83 |
) |
(168 |
) |
(92 |
) |
— |
|
(343 |
) |
Vessel
operating expenses(2) |
(604 |
) |
(33,485 |
) |
(26,391 |
) |
— |
|
(60,480 |
) |
Time-charter hire expense |
(4,279 |
) |
(11,532 |
) |
(13,282 |
) |
— |
|
(29,093 |
) |
Depreciation and amortization |
— |
|
(8,601 |
) |
(35 |
) |
— |
|
(8,636 |
) |
General
and administrative expenses |
— |
|
(5,611 |
) |
1,966 |
|
(3,989 |
) |
(7,634 |
) |
Restructuring charges |
— |
|
— |
|
(42 |
) |
— |
|
(42 |
) |
(Loss) income from vessel operations |
(4,866 |
) |
6,228 |
|
4,082 |
|
(3,989 |
) |
1,455 |
|
|
|
|
|
|
|
Reconciliation of (loss) income from vessel operations to
cash flow from vessel operations |
|
|
|
|
|
|
(Loss)
income from vessel operations |
(4,866 |
) |
6,228 |
|
4,082 |
|
(3,989 |
) |
1,455 |
|
Depreciation and amortization |
— |
|
8,601 |
|
35 |
|
— |
|
8,636 |
|
Amortization of in-process revenue |
|
|
|
|
— |
|
contracts and other |
— |
|
(1,773 |
) |
776 |
|
— |
|
(997 |
) |
Realized
gains from the settlements |
|
|
|
|
|
of non-designated derivative instruments |
— |
|
29 |
|
— |
|
— |
|
29 |
|
CFVO - Consolidated(3) |
(4,866 |
) |
13,085 |
|
4,893 |
|
(3,989 |
) |
9,123 |
|
CFVO - Equity Investments(4) |
479 |
|
(1,453 |
) |
17,820 |
|
— |
|
16,846 |
|
CFVO - Total |
(4,387 |
) |
11,632 |
|
22,713 |
|
(3,989 |
) |
25,969 |
|
- Includes the results of two chartered-in LNG carriers owned by
Teekay LNG and two chartered-in FSO units owned by Teekay
Offshore.
- Revenues and vessel operating expenses include $17.8 million
and $16.1 million, respectively, related to intercompany
transactions between Teekay Offshore and Teekay Parent, which as a
result of the Deconsolidation of Teekay Offshore are no longer
eliminated upon consolidation. The intercompany transactions relate
to services for ship management, crew training, commercial,
technical, strategic, business development and administrative
management services provided by Teekay Parent to Teekay
Offshore.
- In addition to the CFVO generated by its directly owned and
chartered-in assets, Teekay Parent also receives cash dividends and
distributions from its publicly-traded subsidiaries. For the
three months ended December 31, 2017, Teekay Parent received
cash distributions and dividends from these subsidiaries totaling
$6.7 million. The distributions and dividends received by Teekay
Parent include, among others, those made with respect to its
general partner interests in Teekay Offshore and Teekay LNG.
Please refer to Appendix D this release for further details.
- Please see Appendix E to this release for a reconciliation of
this non-GAAP financial measure as used in this release to equity
income of equity accounted vessels, the most directly comparable
GAAP financial measure.
Teekay CorporationAppendix D - Reconciliation of Non-GAAP
Financial MeasuresTeekay Parent Free Cash Flow(in thousands of U.S.
dollars, except share and per share data)
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY PARENT GPCO CASH FLOW |
|
|
|
|
|
Daughter Entities distributions |
|
|
|
|
|
|
to Teekay
Parent(1) |
|
|
|
|
|
|
Limited Partner
interests(2) |
|
|
|
|
|
|
Teekay LNG |
3,529 |
|
3,529 |
|
3,529 |
|
14,116 |
|
14,116 |
|
|
Teekay Offshore |
566 |
|
566 |
|
4,465 |
|
6,200 |
|
17,176 |
|
|
GP interests |
|
|
|
|
|
|
Teekay LNG |
228 |
|
228 |
|
227 |
|
912 |
|
908 |
|
|
Teekay Offshore |
16 |
|
16 |
|
331 |
|
399 |
|
1,201 |
|
|
Other Dividends |
|
|
|
|
|
|
Teekay
Tankers(2)(3) |
2,319 |
|
1,690 |
|
1,276 |
|
6,975 |
|
8,546 |
|
|
Teekay
Offshore(4) |
— |
|
637 |
|
683 |
|
2,003 |
|
1,366 |
|
Total
Daughter Entity Distributions |
6,658 |
|
6,666 |
|
10,511 |
|
30,605 |
|
43,313 |
|
Less: |
|
|
|
|
|
|
Corporate general
and |
|
|
|
|
|
|
administrative expenses(5) |
(3,989 |
) |
496 |
|
(6,759 |
) |
(12,767 |
) |
(18,720 |
) |
Total Parent GPCO Cash Flow |
2,669 |
|
7,162 |
|
3,752 |
|
17,838 |
|
24,593 |
|
TEEKAY PARENT OPCO CASH FLOW |
|
|
|
|
|
Teekay Parent cash flow from |
|
|
|
|
|
|
vessel
operations(6) |
|
|
|
|
|
|
Conventional
Tankers(7) |
(4,866 |
) |
(3,077 |
) |
(2,372 |
) |
(13,390 |
) |
(1,764 |
) |
|
FPSOs(8) |
13,085 |
|
(1,901 |
) |
6,522 |
|
3,265 |
|
12,794 |
|
|
Other(9)(10) |
4,893 |
|
(1,005 |
) |
134 |
|
(6,149 |
) |
(8,106 |
) |
Total(11) |
13,112 |
|
(5,983 |
) |
4,284 |
|
(16,274 |
) |
2,924 |
|
Less:
Net interest expense(12) |
(16,502 |
) |
(13,072 |
) |
(12,314 |
) |
(54,716 |
) |
(57,313 |
) |
Teekay Parent OPCO Cash Flow |
(3,390 |
) |
(19,055 |
) |
(8,030 |
) |
(70,990 |
) |
(54,389 |
) |
TOTAL TEEKAY PARENT FREE |
|
|
|
|
|
|
CASH FLOW |
(721 |
) |
(11,893 |
) |
(4,278 |
) |
(53,152 |
) |
(29,796 |
) |
Weighted-average number of |
|
|
|
|
|
|
common shares - Basic |
86,641,584 |
|
86,261,330 |
|
86,131,038 |
|
86,335,473 |
|
79,211,154 |
|
- Daughter Entities dividends and distributions for a given
quarter consists of the amount of dividends and distributions
(including payments in kind) relating to such quarter but received
by Teekay Parent in the following quarter. The limited partner and
general partner distributions received from Teekay Offshore for the
quarters ended September 30, 2017, June 30, 2017, March 31, 2017,
December 31, 2016, and September 30, 2016 were paid-in-kind in the
form of new Teekay Offshore common units.
- 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 |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Teekay
LNG |
|
|
|
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.56 |
|
$ |
0.56 |
|
Common
units owned by |
|
|
|
|
|
|
|
|
|
|
Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
Total
distribution |
$ |
3,529,158 |
|
$ |
3,529,158 |
|
$ |
3,529,158 |
|
$ |
14,116,633 |
|
$ |
14,116,633 |
|
Teekay
Offshore |
|
|
|
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.01 |
|
$ |
0.01 |
|
$ |
0.11 |
|
$ |
0.14 |
|
$ |
0.44 |
|
Common
units owned by |
|
|
|
|
|
|
|
|
|
|
Teekay Parent |
|
56,587,484 |
|
|
56,587,484 |
|
|
40,589,218 |
|
|
44,285,041 |
|
|
39,037,938 |
|
Total
distribution |
$ |
565,875 |
|
$ |
565,875 |
|
$ |
4,464,814 |
|
$ |
6,199,906 |
|
$ |
17,176,693 |
|
Teekay
Tankers |
|
|
|
|
|
|
|
|
|
|
Dividend
per share |
$ |
0.03 |
|
$ |
0.03 |
|
$ |
0.03 |
|
$ |
0.12 |
|
$ |
0.21 |
|
Shares owned by Teekay Parent(3) |
|
77,298,441 |
|
|
56,317,627 |
|
|
42,542,403 |
|
|
58,119,024 |
|
|
40,695,113 |
|
Total
dividend |
$ |
2,318,953 |
|
$ |
1,689,529 |
|
$ |
1,276,272 |
|
$ |
6,974,283 |
|
$ |
8,545,974 |
|
- Includes Class A and Class B shareholdings. Teekay
Tankers' current dividend policy is to pay out 30 percent to 50
percent of its quarterly adjusted net income (as defined) with a
minimum quarterly dividend of $0.03 per share.
- Includes distributions from Teekay Parent's interest in Teekay
Offshore's 10.5% Series D Preferred Units acquired in June
2016. The distributions received for the quarters ended June
30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016
were paid-in-kind in the form of new Teekay Offshore common
units. All outstanding Series D Preferred Units were
repurchased by Teekay Offshore in September 2017 as part of the
Brookfield Transaction.
- Includes recoveries from Teekay Offshore legal expenses for the
three months ended September 30, 2017. Includes a one-time
compensation cost associated with the retirement of Teekay
Corporation's Chief Executive Officer for the three months ended
December 31, 2016.
- Please refer to Appendices C and E for additional financial
information on Teekay Parent’s cash flow from vessel
operations.
- Includes early termination fees totaling $1.6 million paid to
the owners in the three months ended December 31, 2017 related to
the termination of two bareboat contracts. Includes an early
termination fee paid to Teekay Offshore of $4.0 million for the
year ended December 31, 2016 related to the early termination of
the in-charter contract on the Kilimanjaro Spirit conventional
tanker.
- Includes recoveries from Teekay Offshore for business
development costs for the three months ended September 30,
2017.
- Includes $2.2 million for the three months ended December 31,
2016, and $1.3 million and $5.1 million, for the years ended
December 31, 2017 and 2016, respectively, relating to 50 percent of
the CFVO from TTOL. Teekay Parent owned 50 percent of TTOL for the
period up to May 31, 2017, when Teekay Tankers purchased the
remaining 50 percent of TTOL from Teekay Parent.
- Includes $1.6 million of fees earned from managing vessel
transactions for Tanker Investments Ltd. for the year ended
December 31, 2016.
- Excludes corporate general and administrative expenses relating
to Teekay Parent GPCO Cash Flow.
- Please see Appendix E to this release for a description of this
measure and a reconciliation of this non-GAAP financial measure as
used in this release to interest expense net of interest income,
the most directly comparable GAAP financial measure.
Teekay CorporationNon-GAAP Financial
Reconciliations
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresCash Flow from Vessel Operations -
Consolidated(in thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
December 31, |
September 30, |
December 31, |
|
|
2017 |
2017 |
2016 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Income
(loss) from vessel operations |
66,655 |
|
(189,846 |
) |
83,222 |
|
Depreciation and amortization |
63,116 |
|
136,942 |
|
144,901 |
|
Amortization of in-process revenue contracts and other |
(3,655 |
) |
(6,737 |
) |
(5,794 |
) |
Realized
(losses) gains from the settlements of non-designated |
|
|
|
|
derivative
instruments |
(45 |
) |
1,843 |
|
(104 |
) |
Asset
impairments |
— |
|
231,159 |
|
2,146 |
|
Net loss on
sale of vessels, equipment and other operating assets |
489 |
|
20,426 |
|
12,038 |
|
Cash flow
from time-charter contracts, net of revenue accounted for |
|
|
|
|
as direct
finance leases |
2,142 |
|
3,071 |
|
6,866 |
|
CFVO - Consolidated |
128,702 |
|
196,858 |
|
243,275 |
|
CFVO - Equity Investments (see Appendix
E) |
54,884 |
|
41,202 |
|
47,211 |
|
CFVO - Total |
183,586 |
|
238,060 |
|
290,486 |
|
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresCash Flow from Vessel Operations -
Consolidated(in thousands of U.S. dollars)
|
|
Year Ended |
|
|
December 31, |
December 31, |
|
|
2017 |
2016 |
|
(unaudited) |
(unaudited) |
Income from
vessel operations |
6,700 |
|
384,290 |
|
Depreciation and amortization |
485,829 |
|
571,825 |
|
Amortization of in process revenue contracts and other |
(22,348 |
) |
(24,195 |
) |
Realized
gains (losses) from the settlements of non-designated |
|
|
|
derivative
instruments |
2,047 |
|
(8,646 |
) |
Asset
impairments |
232,659 |
|
45,796 |
|
Loss on
sale of vessels, equipment and other operating assets |
38,084 |
|
66,450 |
|
Termination
of Arendal Spirit UMS charter contract |
8,888 |
|
— |
|
Cash flow
from time-charter contracts, net of revenue accounted for |
|
|
|
as direct
finance leases |
18,737 |
|
28,348 |
|
CFVO - Consolidated |
770,596 |
|
1,063,868 |
|
CFVO - Equity Investments (see Appendix
E) |
180,522 |
|
223,135 |
|
CFVO - Total |
951,118 |
|
1,287,003 |
|
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresCash Flow from Vessel Operations - Equity
Accounted Vessels(in thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
December 31, 2017 |
September 30, 2017 |
December 31, 2016 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(2) |
|
|
|
|
|
|
|
|
Revenues |
443,685 |
|
105,986 |
|
196,281 |
|
78,912 |
|
190,201 |
|
78,531 |
|
Vessel and
other operating expenses |
(230,168 |
) |
(54,027 |
) |
(101,063 |
) |
(40,279 |
) |
(80,609 |
) |
(33,454 |
) |
Depreciation and amortization |
(125,368 |
) |
(28,329 |
) |
(48,045 |
) |
(19,425 |
) |
(42,155 |
) |
(18,437 |
) |
Asset
impairments |
(10,852 |
) |
(5,479 |
) |
— |
|
— |
|
— |
|
— |
|
Loss on sale of vessels |
— |
|
— |
|
— |
|
— |
|
(9,721 |
) |
(4,861 |
) |
Income from
vessel operations of |
|
|
|
|
|
|
|
equity accounted
vessels |
77,297 |
|
18,151 |
|
47,173 |
|
19,208 |
|
57,716 |
|
21,779 |
|
Interest
expense |
(73,187 |
) |
(18,909 |
) |
(36,568 |
) |
(14,878 |
) |
(30,743 |
) |
(12,910 |
) |
Realized
and unrealized gain (loss) on |
|
|
|
|
— |
|
— |
|
|
derivative
instruments |
9,494 |
|
2,563 |
|
(21,538 |
) |
(3,652 |
) |
15,708 |
|
5,255 |
|
Write-down
of loans receivable |
— |
|
— |
|
— |
|
— |
|
— |
|
(2,387 |
) |
Other - net |
(12,156 |
) |
(2,776 |
) |
(1,716 |
) |
586 |
|
115 |
|
196 |
|
Equity income (loss) of equity accounted
vessels |
1,448 |
|
(971 |
) |
(12,649 |
) |
1,264 |
|
42,796 |
|
11,933 |
|
Income from
vessel operations of |
|
|
|
|
|
|
|
equity accounted
vessels |
77,297 |
|
18,151 |
|
47,173 |
|
19,208 |
|
57,716 |
|
21,779 |
|
Depreciation and amortization |
125,368 |
|
28,329 |
|
48,045 |
|
19,425 |
|
42,155 |
|
18,437 |
|
Asset
impairments |
10,852 |
|
5,479 |
|
— |
|
— |
|
— |
|
— |
|
Loss on
sale of vessels |
|
|
— |
|
— |
|
9,721 |
|
4,861 |
|
Realized
gains from the settlement |
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
forward contracts |
490 |
|
69 |
|
— |
|
— |
|
— |
|
— |
|
Cash flow
from time-charter contracts, |
|
|
|
|
|
|
|
net of revenue
accounted for as |
|
|
|
|
|
|
|
direct finance
leases |
11,914 |
|
3,984 |
|
10,017 |
|
3,636 |
|
9,476 |
|
3,438 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
contracts
and other |
(5,991 |
) |
(1,128 |
) |
(2,065 |
) |
(1,067 |
) |
(2,541 |
) |
(1,304 |
) |
Cash flow from vessel operations |
|
|
|
|
|
|
|
of equity accounted vessels(3) |
219,930 |
|
54,884 |
|
103,170 |
|
41,202 |
|
116,527 |
|
47,211 |
|
- The Company’s proportionate share of its equity accounted
vessels and other investments, including its investment in Teekay
Offshore, ranges from 14 percent to 52 percent.
- On May 31, 2017, Teekay Tankers acquired from Teekay Parent the
remaining 50% interest in TTOL. As a result of the acquisition, the
financial information for Teekay Tankers prior to the date that
Teekay Tankers acquired interests in TTOL are retroactively
adjusted to include the results of TTOL during the periods they
were under common control of Teekay and had begun operations. As a
result, TTOL's results are no longer included in this table.
- CFVO from equity accounted vessels represents the Company’s
proportionate share of CFVO from its equity accounted vessels and
other investments.
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresCash Flow from Vessel Operations - Equity
Accounted Vessels(in thousands of U.S. dollars)
|
|
Year Ended |
|
|
December 31, 2017 |
December 31, 2016 |
|
|
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion(2) |
|
|
|
|
|
|
Revenues |
997,718 |
|
333,011 |
|
886,794 |
|
367,947 |
|
Vessel and
other operating expenses |
(495,796 |
) |
(162,542 |
) |
(366,935 |
) |
(152,561 |
) |
Depreciation and amortization |
(254,007 |
) |
(82,706 |
) |
(160,833 |
) |
(69,702 |
) |
Asset
impairments |
(10,852 |
) |
(5,479 |
) |
(1,351 |
) |
(677 |
) |
Loss on sale of vessels |
— |
|
— |
|
(8,493 |
) |
(4,627 |
) |
Income from
vessel operations of |
|
|
|
|
|
equity accounted
vessels |
237,063 |
|
82,284 |
|
349,182 |
|
140,380 |
|
Interest
expense |
(167,388 |
) |
(57,956 |
) |
(109,610 |
) |
(45,962 |
) |
Realized
and unrealized loss on |
|
|
|
|
|
derivative
instruments |
(34,358 |
) |
(8,199 |
) |
(10,157 |
) |
(3,296 |
) |
Write-down
of other assets(3) |
— |
|
(48,571 |
) |
— |
|
(2,387 |
) |
Other - net |
(18,794 |
) |
(4,902 |
) |
(7,415 |
) |
(3,096 |
) |
Equity income (loss) of equity accounted
vessels |
16,523 |
|
(37,344 |
) |
222,000 |
|
85,639 |
|
Income from
vessel operations of |
|
|
|
|
|
equity accounted
vessels |
237,063 |
|
82,284 |
|
349,182 |
|
140,380 |
|
Depreciation and amortization |
254,007 |
|
82,706 |
|
160,833 |
|
69,702 |
|
Loss on
sale of vessels |
|
|
8,493 |
|
4,627 |
|
Asset
impairments |
10,852 |
|
5,479 |
|
1,351 |
|
677 |
|
Realized
gains from the settlement of |
|
|
|
|
|
non-designated foreign
currency |
|
|
|
|
|
forward contracts |
490 |
|
69 |
|
— |
|
— |
|
Cash flow
from time-charter contracts, |
|
|
|
|
|
net of revenue
accounted for as direct |
|
|
|
|
|
finance leases |
40,883 |
|
14,402 |
|
36,463 |
|
13,231 |
|
Amortization of in-process revenue |
|
|
|
|
|
contracts
and other |
(13,138 |
) |
(4,418 |
) |
(10,697 |
) |
(5,482 |
) |
Cash flow from vessel operations |
|
|
|
|
|
of equity accounted vessels(4) |
530,157 |
|
180,522 |
|
545,625 |
|
223,135 |
|
- The Company’s proportionate share of its equity accounted
vessels and other investments, including its investment in Teekay
Offshore, ranges from 14 percent to 52 percent.
- On May 31, 2017, Teekay Tankers acquired from Teekay Parent,
the remaining 50% interest in TTOL. As a result of the acquisition,
the financial information for Teekay Tankers prior to the date that
Teekay Tankers acquired interests in TTOL are retroactively
adjusted to include the results of TTOL during the periods they
were under common control of Teekay and had begun operations. As a
result, TTOL's results are no longer included in this table.
- Refer to footnote (4) of the summary consolidated statements of
income (loss) included in this release for further details.
- CFVO from equity accounted vessels represents the Company’s
proportionate share of CFVO from its equity accounted vessels and
other investments.
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresCash Flow from Vessel Operations - Teekay
Parent(in thousands of U.S. dollars)
|
|
Three Months Ended September 30, 2017
|
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
Teekay
Parent (loss) income from |
|
|
|
|
|
|
|
|
vessel operations |
|
(3,077 |
) |
(223,957 |
) |
(280 |
) |
496 |
|
|
(226,818 |
) |
Depreciation and amortization |
|
— |
|
17,320 |
|
(79 |
) |
— |
|
|
17,241 |
|
Asset
impairments |
|
— |
|
205,659 |
|
— |
|
— |
|
|
205,659 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
|
contracts and
other |
|
— |
|
(1,483 |
) |
(646 |
) |
— |
|
|
(2,129 |
) |
Realized
gains from the settlements |
|
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
|
derivative instruments |
|
— |
|
560 |
|
— |
|
— |
|
|
560 |
|
Cash flow from vessel |
|
|
|
|
|
|
|
|
operations - Teekay Parent |
|
(3,077 |
) |
(1,901 |
) |
(1,005 |
) |
496 |
|
|
(5,487 |
) |
|
|
Three Months Ended December 31,
2016 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
Teekay
Parent loss from |
|
|
|
|
|
|
|
vessel operations |
(2,323 |
) |
(9,151 |
) |
(3,297 |
) |
(6,759 |
) |
|
(21,530 |
) |
Depreciation and amortization |
— |
|
17,546 |
|
(112 |
) |
— |
|
|
17,434 |
|
(Gain) loss
on sale of vessels and equipment |
(49 |
) |
110 |
|
— |
|
— |
|
|
61 |
|
Amortization of in-process |
|
|
|
|
|
|
|
revenue contracts and
other |
— |
|
(1,483 |
) |
1,274 |
|
— |
|
|
(209 |
) |
Realized
losses from the settlements |
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
derivative instruments |
— |
|
(500 |
) |
— |
|
— |
|
|
(500 |
) |
Cash flow from vessel |
|
|
|
|
|
|
|
operations - Teekay Parent |
(2,372 |
) |
6,522 |
|
(2,135 |
) |
(6,759 |
) |
|
(4,744 |
) |
|
|
Year Ended December 31, 2017 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
Teekay
Parent loss from |
|
|
|
|
|
|
vessel operations |
(13,390 |
) |
(256,758 |
) |
(7,510 |
) |
(12,767 |
) |
(290,425 |
) |
Depreciation and amortization |
— |
|
60,560 |
|
(163 |
) |
— |
|
60,397 |
|
Asset
impairments |
— |
|
205,659 |
|
— |
|
— |
|
205,659 |
|
Amortization of in-process |
|
|
|
|
|
|
revenue contracts and
other |
— |
|
(6,223 |
) |
250 |
|
— |
|
(5,973 |
) |
Realized
losses from the settlements |
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
derivative instruments |
— |
|
27 |
|
— |
|
— |
|
27 |
|
Cash flow from vessel |
|
|
|
|
|
|
operations - Teekay Parent |
(13,390 |
) |
3,265 |
|
(7,423 |
) |
(12,767 |
) |
(30,315 |
) |
|
|
Year Ended December 31, 2016 |
|
|
(unaudited) |
|
|
|
|
|
|
Teekay |
|
|
Conventional |
|
|
Corporate |
Parent |
|
|
Tankers |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
Teekay
Parent loss from |
|
|
|
|
|
|
vessel
operations |
(15,967 |
) |
(48,310 |
) |
(13,499 |
) |
(18,720 |
) |
(96,496 |
) |
Depreciation and amortization |
1,717 |
|
70,855 |
|
(449 |
) |
— |
|
72,123 |
|
Asset
impairments |
12,535 |
|
— |
|
— |
|
— |
|
12,535 |
|
(Gain) loss
on sale of vessels |
|
|
|
|
|
|
and
equipment |
(49 |
) |
110 |
|
— |
|
— |
|
61 |
|
Amortization of in-process |
|
|
|
|
|
|
revenue
contracts and other |
— |
|
(5,932 |
) |
654 |
|
— |
|
(5,278 |
) |
Realized
losses from the settlements |
|
|
|
|
|
|
of
non-designated foreign currency |
|
|
|
|
|
|
derivative instruments |
— |
|
(3,929 |
) |
— |
|
— |
|
(3,929 |
) |
Cash flow from vessel |
|
|
|
|
|
|
operations - Teekay Parent |
(1,764 |
) |
12,794 |
|
(13,294 |
) |
(18,720 |
) |
(20,984 |
) |
Teekay CorporationAppendix E - Reconciliation of Non-GAAP
Financial MeasuresNet Interest Expense - Teekay Parent(in thousands
of U.S. dollars)
|
|
|
Three Months Ended |
Year Ended |
|
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
|
2017 |
2017 |
2016 |
2017 |
2016 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Interest
expense |
(49,163 |
) |
(74,499 |
) |
(69,018 |
) |
(268,400 |
) |
(282,966 |
) |
Interest income |
1,373 |
|
1,900 |
|
1,314 |
|
6,290 |
|
4,821 |
|
Interest
expense net of interest income consolidated |
(47,790 |
) |
(72,599 |
) |
(67,704 |
) |
(262,110 |
) |
(278,145 |
) |
Less:
Non-Teekay Parent interest |
|
|
|
|
|
|
expense net
of interest income |
|
|
|
|
|
|
and adjustment |
(31,903 |
) |
(60,201 |
) |
(56,227 |
) |
(210,163 |
) |
(224,735 |
) |
Interest
expense net of interest income(1) |
|
|
|
|
|
|
- Teekay
Parent |
(15,887 |
) |
(12,398 |
) |
(11,477 |
) |
(51,947 |
) |
(53,410 |
) |
Add: Teekay
Parent realized losses |
|
|
|
|
|
|
on interest rate swaps |
(615 |
) |
(674 |
) |
(837 |
) |
(2,769 |
) |
(3,903 |
) |
Net interest expense - Teekay
Parent |
(16,502 |
) |
(13,072 |
) |
(12,314 |
) |
(54,716 |
) |
(57,313 |
) |
- Year ended December 31, 2016 excludes a $3.1 million write-off
of prepaid loan costs in relation to the partial termination of a
credit facility and includes a $2.3 million cash termination
fee from the partial termination of a debt facility.
Forward Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of 1934,
as amended) which reflect management’s current views with respect
to certain future events and performance, including: the benefit to
the Company’s future financial results from the delivery of the
remaining offshore and LNG projects over the next few years; the
level of financial flexibility and optionality arising from Teekay
Parent’s January 2018 financings; the effects of, and ability of
Teekay and the Daughter Entities to execute on vessel deliveries
and financing initiatives in each of the Company’s businesses; the
expected incremental cash flow growth for each delivered vessel,
and the estimated additional annualized operating cash flow
relating to Teekay LNG's and Teekay Offshore's existing growth
projects; potential recoveries in the LNG, offshore and crude oil
tanker markets; the ability of the Company’s businesses to benefit
from the recovery of such markets; and the timing and cost of
delivery and start-up of various newbuildings and
conversion/upgrade projects and the commencement of related
contracts. The following factors are among those that could cause
actual results to differ materially from the forward-looking
statements, which involve risks and uncertainties, and that should
be considered in evaluating any such statement: changes in
exploration, production and storage of offshore oil and gas, either
generally or in particular regions that would impact expected
future growth, particularly in or related to North Sea, Brazil and
East Coast of Canada offshore fields; changes in the demand
for oil, refined products, LNG or LPG; changes in trading patterns
significantly affecting overall vessel tonnage requirements;
greater or less than anticipated levels of vessel newbuilding
orders and deliveries and greater or less than anticipated rates of
vessel scrapping; changes in global oil prices; issues with vessel
operations; variations in expected levels of field maintenance;
increased operating expenses; potential project delays or
cancellations; vessel conversion and upgrade delays, newbuilding or
conversion specification changes, cost overruns, or shipyard
disputes; changes in applicable industry laws and regulations and
the timing of implementation of new laws and regulations; the
potential for early termination of long-term contracts of existing
vessels; delays in the commencement of charter or other contracts;
the ability to fund remaining capital commitments and debt
maturities; the Daughter Entities ability to secure or draw on
financings for its vessels; and other factors discussed in Teekay’s
filings from time to time with the SEC, including its Report on
Form 20-F for the fiscal year ended December 31, 2016. 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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