Highlights
Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the quarter ended September 30, 2018. These results
include the Company’s two publicly-listed consolidated subsidiaries
Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP) and Teekay Tankers
Ltd. (Teekay Tankers) (NYSE:TNK) and its equity-accounted
investment in publicly-listed Teekay Offshore Partners L.P. (Teekay
Offshore) (NYSE:TOO), which was deconsolidated as of September 25,
2017 (collectively, the Daughter Entities) and all remaining
subsidiaries and equity-accounted investments. Teekay, together
with its subsidiaries other than the Daughter Entities, is referred
to in this release as Teekay Parent. Please refer to the third
quarter 2018 earnings releases of Teekay LNG, Teekay Tankers and
Teekay Offshore, which are available on Teekay's website at
www.teekay.com, for additional information on their respective
results.
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|
Three Months Ended |
(in thousands of U.S.
dollars, except per share amounts) |
September
30,2018(unaudited) |
|
June
30,2018(unaudited) |
|
September
30,2018(unaudited) |
TEEKAY
CORPORATION CONSOLIDATED |
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|
|
|
|
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|
GAAP FINANCIAL COMPARISON |
|
|
|
|
|
|
|
|
Revenues |
416,562 |
|
|
405,642 |
|
|
500,781 |
|
Income (loss) from
vessel operations |
55,082 |
|
|
1,921 |
|
|
(189,846 |
) |
Equity income |
13,744 |
|
|
837 |
|
|
1,264 |
|
Net loss attributable
to shareholders in Teekay |
(12,005 |
) |
|
(28,324 |
) |
|
(12,582 |
) |
Loss per share
attributable to shareholders of Teekay |
(0.12 |
) |
|
(0.28 |
) |
|
(0.15 |
) |
NON-GAAP FINANCIAL COMPARISON |
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Total Cash Flow from
Vessel Operations (CFVO)(1)(3) |
196,397 |
|
|
164,197 |
|
|
238,060 |
|
Adjusted Net Loss
attributable to shareholders of Teekay(1) |
(11,378 |
) |
|
(21,555 |
) |
|
(35,638 |
) |
Adjusted Net Loss per
share attributable to shareholders of Teekay(1) |
(0.11 |
) |
|
(0.21 |
) |
|
(0.41 |
) |
TEEKAY PARENT |
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NON-GAAP FINANCIAL COMPARISON |
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Teekay Parent Adjusted
Cash Flow from Vessel Operations(1) |
19,818 |
|
|
16,641 |
|
|
1,179 |
|
Total Teekay Parent
Free Cash Flow(1) |
4,841 |
|
|
798 |
|
|
(11,893 |
) |
- 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).
- For the period up to September 25, 2017, Teekay Offshore was
consolidated in the Company’s financial statements. As a result of
Teekay Offshore’s transaction with Brookfield Business Partners
L.P., together with its institutional partners (collectively
Brookfield) on September 25, 2017, the Company deconsolidated
Teekay Offshore as of that date. Teekay Offshore is accounted for
as an equity-accounted investment, commencing September 25,
2017.
- Total cash flow from vessel operations has reduced in the
second and third quarter of 2018 primarily as a result of the
deconsolidation of Teekay Offshore on September 25, 2017, which
Teekay now accounts for using the equity method.
As a reminder, when making year-over-year
comparisons of Teekay’s consolidated results, it is important to
account for the deconsolidation of Teekay Offshore as of September
25, 2017 and the adoption of the new revenue accounting standard as
of January 1, 2018. Please refer to the “Important Notice to
Reader” section of this release and footnote (1) of the
summary consolidated statement of loss included in this release for
further details on the deconsolidation and the adoption of new
revenue accounting standards.
CEO Commentary
“In the third quarter of 2018, our total cash
flow from vessel operations increased by over $32 million, or
20 percent, compared to the prior quarter, primarily
driven by higher cash flows from our
directly-owned FPSO units, which have upside exposure
to oil prices and production, and the contract start-up of various
growth projects across the Teekay Group,” commented Kenneth Hvid,
Teekay’s President and Chief Executive Officer.
“During the past quarter, Teekay LNG took
delivery of three LNG carrier newbuildings and a floating storage
unit, which will trade in the spot market until it delivers to the
Bahrain regasification facility early next year. A further seven
LNG carriers are still to deliver
through 2019, which are
expected to provide
significant cash flow growth.
The current spot LNG shipping market continues to strengthen to new
multi-year highs and Teekay LNG has taken advantage of this
development, recently securing new charters at higher rates for one
vessel and is well-positioned to further benefit as three
additional vessels have short-term charters maturing through May
2019."
Mr. Hvid continued, "As discussed under a
separate press release, Teekay LNG has carefully assessed its
future capital allocation strategy and concluded that a balanced
approach that, in the near-term, focuses on both delevering its
balance sheet, which creates significant equity value and builds
financial strength, and at the same time returning more capital to
unitholders from its free cash flow after debt amortization
payments, is prudent and will create the most long- term value for
its unitholders, including Teekay Parent. With approximately half
of Teekay LNG's newbuilding program delivered, and virtually all of
its near-term financings completed, Teekay LNG has provided 2019
distribution guidance of $0.76 per common unit on an
annualized basis, representing a 36 percent increase from the
current distribution, which is expected to increase cash flows to
Teekay Parent. As Teekay LNG approaches its targeted leverage
level, we believe that a stronger balance sheet will enable Teekay
LNG to consider returning additional capital to unitholders, which
would benefit Teekay Parent as the largest common unitholder and
the General Partner.”
Mr. Hvid added, "Also announced under a separate
press release, Teekay LNG plans to amend its tax status to be
treated as a corporation instead of a partnership, subject to
common unitholder approval, which is expected to provide access to
a larger investor base and should not result in Teekay LNG
recognizing a gain or loss or change its taxes payable going
forward."
“At Teekay Tankers, we are encouraged by the
recent strength in crude tanker rates, which we believe is the
beginning of a more sustained recovery in the tanker market. As the
tanker market improves, Teekay Tankers continues to work on various
financing initiatives, including the recent completion of two
sale-leaseback transactions and a working capital loan, all of
which significantly strengthened Teekay Tankers’ liquidity position
and extended its debt maturity profile.”
“Teekay Offshore announced that it reached a
constructive settlement agreement with Petrobras relating to
previously- terminated charter contracts, which Teekay Offshore
expects will result in the recognition of approximately $91 million
of revenues in the fourth quarter of 2018. Additionally, as
offshore market fundamentals improve, Teekay Offshore
continues to successfully secure new charter
contracts for its existing assets, with a
new conditional seven- year charter agreement with Alpha Petroleum
for the Petrojarl Varg FPSO for deployment on the Cheviot oil
field, which is one of the largest undeveloped oil fields in the UK
sector of the North Sea.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended September 30, 2018, compared to the same period of
the prior year, were positively impacted primarily by higher cash
flows from the Banff and Hummingbird FPSO units due to the
commencement of oil price-linked production tariffs in those
charter contracts on August 1, 2017 and October 1, 2017,
respectively, higher cash flows due to scheduled maintenance for
the Foinaven FPSO unit in the third quarter of 2017, higher income
and cash flows from Teekay LNG as a result of the deliveries of 11
liquefied natural gas (LNG) and four liquefied petroleum gas (LPG)
carrier newbuildings between July 2017 and September 2018 and the
commencement of short-term charter contracts for certain of the
vessels in Teekay LNG's 52 percent-owned joint venture with
Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture), and
higher income and cash flows in Teekay Tankers, as a result of
higher average spot tanker rates.
These increases were partially offset primarily
by lower income and cash flows in Teekay Tankers, as a result of
the expiry of time-charter out contracts for various vessels which
subsequently traded in the spot market at lower rates, and costs
associated with Teekay Tankers' sale-leaseback of six Aframax
tankers, and lower income and cash flows in Teekay LNG primarily as
a result of a decrease in earnings in 2018 on seven multi-gas
carriers upon Teekay LNG’s termination of their previous charter
contracts due to non-payment by the charterer.
Teekay Parent
Teekay Parent Adjusted Cash Flow from Vessel
Operations(1), which includes distributions and dividends paid to
Teekay Parent from the Daughter Entities in the following quarter
and cash flow from vessel operations attributable to assets
directly-owned by, or chartered-in to, Teekay Parent, less Teekay
Parent’s corporate general and administrative expenses, was $19.8
million for the quarter ended September 30, 2018 compared to $1.2
million for the same period of the prior year. This significant
improvement was primarily due to: higher revenues from the Banff
and Hummingbird Spirit FPSO units due to contractual production
tariffs linked to oil prices which commenced in the latter half of
2017, and higher revenues and lower repairs and maintenance costs
related to the scheduled maintenance for the Foinaven FPSO unit in
the third quarter of 2017; and, as a result of the adoption of the
new revenue accounting standard, the recognition of approximately
$2 million of additional annual incentive revenue related to the
Foinaven FPSO unit that was previously recognized annually in the
fourth quarter. These increases were partially offset by the
elimination of the minimum dividend payment from Teekay Tankers
commencing with the first quarter of 2018 and a reduction in cash
distributions from Teekay Offshore as a result of the strategic
partnership with Brookfield.
Total Teekay Parent Free Cash Flow(1), which
includes Teekay Parent Adjusted Cash Flow from Vessel
Operations(1), less net interest expense, was positive $4.8 million
during the third quarter of 2018, compared to negative $11.9
million for the same period of the prior year for the reasons
mentioned above. This improvement was partially offset by no
interest income earned for the three months ended September 30,
2018 on a $200 million loan to Teekay Offshore which Teekay Parent
sold to Brookfield at the end of the third quarter of 2017. Please
refer to Appendix D of this release for additional information
about Teekay Parent Free Cash Flow.
- 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
GAAP.
Summary Results of Daughter Entities
Teekay LNG
Teekay LNG’s results improved during the quarter
ended September 30, 2018, compared to the same quarter of the prior
year, primarily due to the deliveries of 11 LNG and four mid-sized
LPG carrier newbuildings between July 2017 and September 2018 and
the commencement of short-term charter contracts for certain of the
vessels in the Teekay LNG-Marubeni Joint Venture. These increases
were partially offset by lower earnings for the three months ended
September 30, 2018 on seven multi-gas carriers upon the termination
by Teekay LNG of their previous charter contracts due to
non-payment of charter hire, lower rates earned in the three months
ended September 2018 on two conventional tankers upon the
expiration of their fixed-rate charter contracts in 2017, and a
reduction in earnings due to the sale of a conventional tanker and
an LPG carrier in the first quarter of 2018. Teekay LNG's GAAP net
income for the third quarter of 2018, compared to the same quarter
of the prior year, was also positively impacted by a decrease in
write- down of vessels. Please refer to Teekay LNG's third quarter
2018 earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' results increased during the
quarter ended September 30, 2018, compared to the same period of
the prior year, primarily due to higher average spot tanker rates,
partially offset by the expiry of time-charter out contracts for
various vessels, which have subsequently traded in the spot market
at lower rates, and costs associated with Teekay Tankers'
sale-leaseback of six Aframax tankers. Please refer to Teekay
Tankers' third quarter 2018 earnings release for additional
information on the financial results for this entity.
Teekay Offshore
Teekay Offshore’s results increased during the
quarter ended September 30, 2018, compared to the same period of
the prior year, primarily as a result of the contract start-up of
the Pioneiro de Libra and Petrojarl I FPSO units in late- November
2017 and early-May 2018 and the Randgrid FSO in October 2017, lower
operating expenses for the Piranema FPSO unit as a result of
repairs incurred in the third quarter of 2017, and lower operating
expenses as a result of the lay-up of the Arendal Spirit UMS since
the fourth quarter of 2017. These increases were offset by lower
earnings from the Voyageur Spirit and Ostras FPSO units operating
at reduced rates upon contract extensions in the first and second
quarter of 2018, respectively. Please refer to Teekay Offshore's
third quarter 2018 earnings release for additional information on
the financial results for this entity.
Summary of Recent Events
Teekay Parent
In July 2018, Teekay Parent secured a one-year
contract extension with Canadian Natural Resources (CNR) to extend
the employment of the Banff FPSO unit on the Banff and Kyle fields
to August 2019. The new one-year extension, which took effect in
July 2018, has a slightly lower fixed charter rate and an oil and
production tariff, which provides potential upside from a formula
based on oil price and production.
During the third quarter of 2018, Teekay Parent
repurchased $45.8 million of its 8.5% senior unsecured notes due in
January 2020 for total consideration of $47.7 million for an
average price of 103.96, which is below the make-whole price for
the notes.
In July 2018, Teekay Parent agreed to sell its
43.5 percent interest in Sevan Marine ASA (Sevan) for total
consideration of approximately $28 million, which is expected to be
completed during the fourth quarter of 2018. The Company expects to
record an accounting income/gain on this transaction during the
fourth quarter of 2018.
Teekay LNG
LNG Carrier In-charter
In early-September 2018, Teekay LNG agreed to
charter-in the Magellan Spirit LNG carrier from its 52%-owned
Teekay LNG-Marubeni Joint Venture for a period of two years. The
vessel was idle for 29 days in September and early-October while
awaiting a suitable charter contract. Since October 3, 2018, the
vessel has been chartered in the spot market at rates well in
excess of the charter-in rate and is now currently employed under a
5-month charter contract through until late-March 2019, prior to
the vessel’s scheduled drydocking in April 2019.
LNG Carrier Newbuilding Deliveries
In July 2018, Teekay LNG’s 20 percent-owned
joint venture with China LNG Shipping (Holdings) Limited (China
LNG), CETS Investment Management (HK) Co. Ltd. (an affiliate of
China National Offshore Oil Corporation (CNOOC)) and BW LNG
Investments Pte. Ltd., took delivery of one LNG carrier
newbuilding, the Pan Europe, which immediately commenced its
20-year charter contract with Royal Dutch Shell (Shell).
In July 2018, Teekay LNG took delivery of one
M-Type, Electronically Controlled, Gas Injection (MEGI) LNG carrier
newbuilding, the Megara, which immediately commenced its eight-year
charter contract with Shell.
In August 2018, Teekay LNG took delivery of the
Bahrain Spirit floating storage unit (FSU), which immediately
commenced its 21-year charter contract with Bahrain LNG W.L.L., in
which Teekay LNG has a 30 percent ownership interest.
In September 2018, Teekay LNG’s 50 percent-owned
joint venture with China LNG took delivery of its second ARC7 LNG
carrier newbuilding, the Rudolph Samoylovich, which immediately
commenced its 27-year charter contract with the Yamal LNG project
two months ahead of the original scheduled delivery date.
Crude Tanker Dispositions
In September 2018, Teekay LNG agreed to sell the
2003-built African Spirit Suezmax tanker, which had been trading in
the spot tanker market, for gross proceeds of $13.1 million. The
vessel was delivered to the buyers in October 2018.
In November 2018, Teekay LNG agreed to sell the
2003-built European Spirit Suezmax tanker, which had been trading
in the spot tanker market, for gross proceeds of $16.0 million. The
vessel is expected to be delivered to the buyers in late-2018.
Teekay Tankers
Completed Financings
In September and November 2018, Teekay Tankers
completed sale-leaseback transactions relating to six vessels and
four vessels, respectively.
Also in November 2018, Teekay Tankers completed
a loan to finance working capital for its Revenue Sharing Agreement
(RSA) pool management operations.
These transactions provide a total of
approximately $100 million of liquidity after the repayment of
outstanding debt related to the ten vessels, of which approximately
$40 million of liquidity relates to transactions that closed after
September 30, 2018.
Teekay Offshore
Settlement Agreements with Petrobras
In October 2018, Teekay Offshore entered into a
settlement agreement with Petróleo Brasileiro S.A. and Petroleo
Netherlands B.V. - PNBV S.A. (together Petrobras) with respect to
various disputes relating to the previously-terminated charter
contracts of the HiLoad DP unit and Arendal Spirit UMS. As part of
the settlement agreement, Petrobras has agreed to pay a total of
$96 million to Teekay Offshore, which includes $55 million that is
payable unconditionally within 30 days. The remaining $41 million
is to be paid in two separate instalments of $22 million and $19
million by the end of 2020 and 2021, respectively, subject to
certain potential offsets described below.
If in the ordinary course of business and prior
to the end of 2021, new charter contracts are entered into with
Petrobras in respect of the Arendal Spirit UMS, Ostras FPSO unit
and Piranema Spirit FPSO unit, the deferred $41 million (payable in
two instalments in 2020 and 2021, respectively) will be reduced by
40 percent of any revenues actually received in this same period
from such new contracts (Offset Amounts). There are no contracts in
place currently that would result in any Offset Amounts being
generated and neither Petrobras nor Teekay Offshore have any
obligation to enter into such contracts; in addition, Teekay
Offshore is not obligated to hold any of the designated assets
available for charter by Petrobras.
In the fourth quarter of 2018, Teekay Offshore
expects to recognize the above-mentioned settlement, which is
expected to increase Teekay Offshore’s revenues by approximately
$91 million, which represents the present value of the future
expected settlement amounts.
In addition, in October 2018, Teekay Offshore,
through separate subsidiaries, entered into a further settlement
agreement with Petrobras with regards to a dispute relating to the
charter of the Piranema Spirit FPSO unit. Pursuant to the
settlement agreement, Teekay Offshore has agreed to a reduction in
charter rate for the FPSO totaling approximately $11 million, which
is expected to be credited to Petrobras over the remaining contract
term. This amount was accrued in Teekay Offshore's financial
statements in prior periods, primarily in 2016 and 2017.
Recontracting of the Petrojarl Varg FPSO
In October 2018, Teekay Offshore entered into an
agreement with Alpha Petroleum Resources Limited (Alpha) for the
Petrojarl Varg FPSO for their development of the Cheviot oil field
on the UK continental shelf. The FPSO contract is for a seven-year
fixed term from first oil, which is targeted for the second quarter
of 2021, after completion of a life extension and upgrade phase for
the Petrojarl Varg FPSO taking place at Sembcorp Marine’s shipyard
in Singapore. The life extension and upgrade costs for the
Petrojarl Varg FPSO will be funded predominantly by Alpha in
advance. The Petrojarl Varg FPSO is intended to be used for the
entire expected life of the Cheviot field.
The effectiveness of the agreement remains subject to
satisfaction of a number of conditions precedent, including (i)
initial funding from Alpha to cover life extension and upgrade
costs for the Petrojarl Varg FPSO, which is conditional on Alpha
finalizing its debt facilities with a consortium of lenders, and
(ii) approval by relevant governmental authorities of Alpha’s final
field development plan for the Cheviot field. There are no
assurances that the conditions precedent to the agreement will be
met or when they may be met.
The Cheviot field is 100%-owned by Alpha and is
one of the largest undeveloped oil fields in the UK sector of the
North Sea. Matching the field development requirements of a
projected total of 18 wells (including 13 production wells) was a
key factor for the Petrojarl Varg FPSO being selected by Alpha
Petroleum through a solutions-driven process undertaken with Teekay
Offshore.
ALP Contract Award
In October 2018, ALP Maritime, Teekay Offshore’s
towage subsidiary, was awarded a contract to provide five vessels
to perform mobilization and field installation services for Total's
Kaombo Sul project. The contract is expected to require
approximately 300-350 vessel equivalent days to service the
project. This contract was awarded after ALP Maritime's successful
completion of a contract of similar scale for Total's Kaombo Norte
project earlier this year.
Shuttle Tanker Newbuildings
In late-July 2018, Teekay Offshore entered into
shipbuilding contracts with Samsung Heavy Industries Co. Ltd. to
construct two LNG-fueled Aframax DP2 shuttle tanker newbuildings,
bringing Teekay Offshore's orderbook to a total of six shuttle
tankers. These newbuildings will be constructed based on Teekay
Offshore's New Shuttle Spirit design which incorporates proven
technologies to increase fuel efficiency and reduce emissions,
including LNG propulsion technology. Upon expected delivery in
late-2020 through early-2021, these vessels will join Teekay
Offshore's contract of affreightment (CoA) shuttle tanker portfolio
in the North Sea to provide needed capacity to meet its customers’
needs.
Financing Update
In July 2018, Teekay Offshore completed an
upsized $700 million private placement of 8.5% senior unsecured
notes maturing in 2023 (the Notes). Brookfield, the holder of
approximately 60% of Teekay Offshore’s outstanding common units,
purchased $500 million principal amount of the Notes. Teekay
Offshore used a portion of the net proceeds from the issuance to
(a) repurchase $225.2 million of the $300 million aggregate
principal of its outstanding 6% senior notes maturing in 2019, (b)
repurchase NOK 914 million of the NOK 1,000 million aggregate
principal of its NOK senior notes maturing in 2019 (the NOK notes)
and settle $36.5 million of the cross-currency swaps which were an
economic hedge to the NOK notes, and (c) repay at par an
outstanding $200 million 10% promissory note held by Brookfield
maturing in 2022 along with an associated $12 million early
termination fee.
Following the Notes private placement,
Brookfield exercised its option to acquire an additional 2%
ownership interest in Teekay Offshore’s general partner (Teekay
Offshore GP) from Teekay. As a result, Brookfield now holds a 51%
interest in Teekay Offshore GP.
Liquidity
As at September 30, 2018, Teekay Parent had
total liquidity of approximately $389.9 million (consisting of
$191.1 million of cash and cash equivalents and $198.8 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity (excluding Teekay Offshore)
of approximately $789.6 million (consisting of $385.4 million of
cash and cash equivalents and $404.2 million of undrawn revolving
credit facilities).
Conference Call
The Company plans to host a conference call on
Thursday, November 15, 2018 at 2:00 p.m. (ET) to discuss its
results for the third quarter of 2018. All shareholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (888) 220-8474 or (647) 484-0475, if outside North
America, and quoting conference ID code 5738600.
- 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 Third Quarter 2018 Earnings Presentation will
also be available at www.teekay.com in advance of the
conference call start time.
About Teekay
Teekay Corporation operates in the marine
midstream space through its ownership of the general partner and a
portion of the outstanding limited partner interests in Teekay LNG
Partners L.P. (NYSE:TGP) and an interest in the general partner and
a portion of the outstanding limited partner interests in Teekay
Offshore Partners L.P. (NYSE:TOO). The general partners own all of
the outstanding incentive distribution rights of these entities. In
addition, Teekay has a controlling ownership interest in Teekay
Tankers Ltd. (NYSE:TNK) and directly owns a fleet of vessels. The
combined Teekay entities operate total assets under management of
approximately $17 billion, comprised of approximately 220 liquefied
gas, offshore, and conventional tanker assets. With offices in 14
countries and approximately 8,300 seagoing and shore-based
employees, Teekay provides a comprehensive set of marine services
to the world’s leading oil and gas companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries
contact:Ryan HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the U.S. Securities and Exchange Commission. These non-GAAP
financial measures, which include Cash Flow from Vessel Operations,
Cash Flow from Vessel Operations - Consolidated, Cash Flow From
Vessel Operations - Equity Investments, Adjusted Net Loss
Attributable to Shareholders of Teekay, Teekay Parent GPCO Cash
Flow, Teekay Parent OPCO Cash Flow, Teekay Parent Adjusted Cash
Flow from Vessel Operations, Teekay Parent Free Cash Flow, Net
Interest Expense and Adjusted Equity Income, are intended to
provide additional information and should not be considered a
substitute for measures of performance prepared in accordance with
GAAP. In addition, these measures do not have standardized meanings
across companies, and therefore may not be comparable to similar
measures presented by other companies. The Company believes that
certain investors use this information to evaluate the Company’s
financial performance, as does management.
Non-GAAP Financial Measures
Cash Flow from Vessel Operations (CFVO)
represents income (loss) from vessel operations before depreciation
and amortization expense, amortization of in-process revenue
contracts, write-down and loss on sales of vessels 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 income (loss)
from vessel operations of equity-accounted vessels, respectively,
the most directly comparable GAAP measures reflected in the
Company’s consolidated financial statements.
Adjusted Net Loss Attributable to Shareholders
of Teekay excludes items of income or loss from GAAP net loss 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 (4) of the
statements of loss for a reconciliation of adjusted equity income
to equity income (loss), the most directly comparable GAAP measure
reflected in the Company’s consolidated financial statements.
Teekay Parent Financial Measures
Teekay Parent Adjusted Cash Flow from Vessel
Operations represents the sum of (a) distributions or dividends
(including payments-in-kind) relating to a given quarter (but
received by Teekay Parent in the following quarter) as a result of
ownership interests in its consolidated publicly-traded
subsidiaries (Teekay LNG and Teekay Tankers) and its
equity-accounted investment in Teekay Offshore, net of Teekay
Parent’s corporate general and administrative expenditures for the
given quarter (collectively, Teekay Parent GPCO Cash Flow) plus (b)
CFVO attributed to Teekay Parent’s directly-owned and chartered-in
assets (Teekay Parent OPCO Cash Flow). Teekay Parent Free Cash Flow
represents Teekay Parent Adjusted Cash Flow from Vessel Operations,
less Teekay Parent’s net interest expense and dry-dock expenditures
for the given quarter. Net Interest Expense includes interest
expense, interest income and realized losses on interest rate
swaps. Please refer to Appendices B, C, D and E of this release for
further details and reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures reflected in
the Company’s consolidated financial statements.
Important Notice to Reader
Deconsolidation of Teekay Offshore
On September 25, 2017, Teekay, Teekay Offshore
and Brookfield finalized a strategic partnership (the Brookfield
Transaction), which resulted in the deconsolidation of Teekay
Offshore as of that date. As a result, Teekay Offshore's financial
results have not been consolidated by Teekay since September 25,
2017. As a result, items such as revenues and CFVO for the three
and nine months ended September 30, 2018 are lower compared to the
same periods in the prior year since Teekay Offshore has been
accounted for using the equity method since September 25, 2017.
Adoption of New Revenue Accounting Standard
Effective January 1, 2018, the Company adopted
the new revenue accounting standard. The following resulting
differences had no impact on net loss but a material effect
individually on revenues, voyage expenses and vessel operating
expenses reported for the three and nine months ended September 30,
2018:
- Teekay Tankers previously presented the net allocation for its
vessels participating in revenue sharing arrangements as revenues.
Effective January 1, 2018, Teekay Tankers presents the revenue from
the voyages these vessels perform in voyage revenues and the
difference between this aggregate amount and Teekay Tankers' net
allocation from the revenue sharing arrangement as voyage expenses.
This had the effect of increasing both revenues and voyage expenses
for the three and nine months ended September 30, 2018 by $73.6
million and $202.4 million, respectively.
- Teekay Parent previously presented the reimbursement of costs
incurred by Teekay Parent for its seafarers onboard vessels owned
by its equity-accounted investments and third parties as a
reduction to vessel operating expenses. Effective January 1, 2018,
Teekay Parent presents the costs of managing these vessels as
vessel operating expenses and the reimbursement of such costs as
revenue. This had the effect of increasing both revenues and vessel
operating expenses for the three and nine months ended September
30, 2018 by $20.2 million and $61.3 million, respectively.
Teekay CorporationSummary Consolidated Statements of
Loss(1)(in thousands of U.S. dollars, except share and per
share data)
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30,2018(unaudited) |
June 30,2018(unaudited) |
September 30,2017(unaudited) |
September 30,2018(unaudited) |
September
30,2017(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
416,562 |
|
405,642 |
|
500,781 |
|
1,216,226 |
|
1,558,209 |
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
(90,899 |
) |
(94,912 |
) |
(42,454 |
) |
(271,688 |
) |
(133,891 |
) |
Vessel operating
expenses |
(157,585 |
) |
(162,537 |
) |
(200,456 |
) |
(478,057 |
) |
(599,500 |
) |
Time-charter hire
expense |
(20,965 |
) |
(20,648 |
) |
(28,645 |
) |
(61,024 |
) |
(98,106 |
) |
Depreciation and
amortization |
(69,967 |
) |
(67,960 |
) |
(136,942 |
) |
(205,238 |
) |
(422,713 |
) |
General and
administrative expenses |
(19,050 |
) |
(23,720 |
) |
(27,662 |
) |
(66,953 |
) |
(88,641 |
) |
Write-down and loss on
sale of vessels(2) |
(2,201 |
) |
(32,830 |
) |
(251,585 |
) |
(53,693 |
) |
(270,254 |
) |
Restructuring charges |
(813 |
) |
(1,114 |
) |
(2,883 |
) |
(4,065 |
) |
(5,059 |
) |
Income (loss)
from vessel operations |
55,082 |
|
1,921 |
|
(189,846 |
) |
75,508 |
|
(59,955 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
(67,343 |
) |
(59,526 |
) |
(74,499 |
) |
(181,494 |
) |
(219,237 |
) |
Interest income |
2,103 |
|
2,095 |
|
1,900 |
|
5,875 |
|
4,917 |
|
Realized and unrealized
(loss) gain on non-designated derivative instruments(3) |
(2,168 |
) |
10,723 |
|
(6,128 |
) |
17,981 |
|
(43,173 |
) |
Equity income
(loss)(4) |
13,744 |
|
837 |
|
1,264 |
|
41,698 |
|
(36,373 |
) |
Income tax expense |
(4,334 |
) |
(8,746 |
) |
(5,221 |
) |
(17,197 |
) |
(11,767 |
) |
Foreign exchange gain
(loss) |
3,553 |
|
12,529 |
|
(2,642 |
) |
16,104 |
|
(22,888 |
) |
Loss on deconsolidation
of Teekay Offshore |
— |
|
— |
|
(103,188 |
) |
(7,070 |
) |
(103,188 |
) |
Other
(loss) income – net |
(2,400 |
) |
520 |
|
(4,705 |
) |
(2,795 |
) |
(5,169 |
) |
Net
loss |
(1,763 |
) |
(39,647 |
) |
(383,065 |
) |
(51,390 |
) |
(496,833 |
) |
Net
(income) loss attributable to non-controlling interests |
(10,242 |
) |
|
11,323 |
|
|
370,483 |
|
(9,494 |
) |
|
358,843 |
|
Net loss attributable to the shareholders
of Teekay Corporation |
(12,005 |
) |
(28,324 |
) |
(12,582 |
) |
(60,884 |
) |
(137,990 |
) |
Loss per common share
of Teekay Corporation |
|
|
|
|
|
- Basic and
Diluted |
$ |
(0.12 |
) |
$ |
(0.28 |
) |
$ |
(0.15 |
) |
$ |
(0.61 |
) |
$ |
(1.60 |
) |
Weighted-average number
of common shares outstanding |
|
|
|
|
|
-
Basic and Diluted |
|
100,435,045 |
|
|
100,434,512 |
|
|
86,261,330 |
|
|
99,412,381 |
|
|
86,232,315 |
|
- Refer to the "Important Notice to Reader" for details on the
deconsolidation of Teekay Offshore and the adoption of the new
revenue accounting standard.
- Write-down and loss on sale of vessels for the three and nine
months ended September 30, 2018 includes the further write-down of
two of Teekay LNG's conventional tankers as the estimated fair
values of these vessels had decreased. The vessels were classified
as held for sale upon the expiration of their time-charter
contracts in 2017. Write-down and loss on sale of vessels for the
nine months ended September 30, 2018 also includes the write-downs
of four of Teekay LNG's multi-gas carriers. These vessels were
written down to their estimated fair values, using appraised
values, as a result of Teekay LNG's evaluation of alternative
strategies for these assets, combined with the current charter rate
environment and the outlook for charter rates for these
vessels.
- Realized and unrealized (losses) gains related to
derivative instruments that are not designated as hedges for
accounting purposes are included as a separate line item in the
consolidated statements of loss. 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 |
Nine Months Ended |
|
September 30,2018(unaudited) |
June 30,2018(unaudited) |
September
30,2017(unaudited) |
September
30,2018(unaudited) |
September
30,2017(unaudited) |
Realized (losses) gains
relating to: |
|
|
|
|
|
Interest rate swaps |
(2,704 |
) |
(4,031 |
) |
(15,729 |
) |
(11,544 |
) |
(48,199 |
) |
Termination of interest rate swaps |
(13,681 |
) |
— |
|
— |
|
(13,681 |
) |
(610 |
) |
Foreign currency forward contracts |
— |
|
— |
|
1,609 |
|
— |
|
638 |
|
Time-charter swaps |
— |
|
— |
|
— |
|
— |
|
1,106 |
|
Forward freight agreements |
(119 |
) |
(18 |
) |
234 |
|
(137 |
) |
347 |
|
|
(16,504 |
) |
(4,049 |
) |
(13,886 |
) |
(25,362 |
) |
(46,718 |
) |
Unrealized gains
(losses) relating to: |
|
|
|
|
|
Interest
rate swaps |
19,718 |
|
8,532 |
|
11,575 |
|
44,169 |
|
5,181 |
|
Foreign currency forward contracts |
|
— |
|
735 |
|
— |
|
4,383 |
|
Stock
purchase warrants |
(5,373 |
) |
6,206 |
|
(4,461 |
) |
(851 |
) |
(5,036 |
) |
Time-charter swap |
— |
|
— |
|
— |
|
— |
|
(875 |
) |
Forward freight agreements |
(9 |
) |
34 |
|
(91 |
) |
25 |
|
(108 |
) |
|
14,336 |
|
14,772 |
|
7,758 |
|
43,343 |
|
3,545 |
|
Total
realized and unrealized (losses) gains on non-designated derivative
instruments |
(2,168 |
) |
10,723 |
|
(6,128 |
) |
17,981 |
|
(43,173 |
) |
- The Company’s proportionate share of items within
equity income (loss) as identified in Appendix A of this release is
detailed in the table below. By excluding these items from equity
income (loss) as reflected in the consolidated statements of loss,
the Company believes the resulting adjusted equity income is a
normalized amount that can be used to evaluate the financial
performance of the Company’s equity-accounted investments. Adjusted
equity income is a non-GAAP financial measure.
|
Three Months Ended |
|
Nine Months Ended |
|
|
September
30,2018(unaudited) |
June
30,2018(unaudited) |
September
30,2017(unaudited) |
September
30,2018(unaudited) |
September
30,2017(unaudited) |
Equity income
(loss) |
13,744 |
|
837 |
|
1,264 |
|
41,698 |
|
(36,373 |
) |
Proportionate share of
unrealized gains on derivative instruments |
(6,524 |
) |
(6,986 |
) |
(3,804 |
) |
(32,987 |
) |
(2,026 |
) |
Other(i) |
2,289 |
|
10,712 |
|
6,963 |
|
14,533 |
|
57,719 |
|
Equity
income adjusted for items in Appendix A |
9,509 |
|
4,563 |
|
4,423 |
|
23,244 |
|
19,320 |
|
- Other for the three and nine months ended September 30, 2018
includes the Company's proportionate share of the loss on bond
repurchases in Teekay Offshore, a decrease in the deferred income
tax asset for Teekay Offshore's Norwegian tax structure, the
realized loss on interest rate swap amendments in Teekay Offshore,
and restructuring charges related to severance costs from crew
reduction on the Petrojarl Varg FPSO in Teekay Offshore, partially
offset by the Company's gain on the option exercised by Brookfield
to acquire an additional 2% ownership interest in Teekay Offshore's
general partner from Teekay. Other for the nine months ended
September 30, 2018 also includes the Company's proportionate share
of write-downs and gain on sale of vessels in Teekay Offshore and
the gain (loss) on sale of vessels in Teekay LNG's Exmar LPG joint
venture, partially offset by the write-down of two shuttle tankers
in Teekay Offshore, transaction fees relating to the historical
amendment of certain interest rate swaps in Teekay Offshore,
depreciation expense as a result of the change in the useful life
and residual value estimates of certain of Teekay Offshore's
shuttle tankers, a decrease in the deferred income tax asset for
Teekay Offshore's Norwegian tax structure, the loss on sale of the
Company's investment in KT Maritime (Pty) Ltd., and the write-down
of the Company's loans receivable from Gemini Tankers L.L.C.
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
|
As at September
30,2018(unaudited) |
As at
June 30,2018(unaudited) |
As at
December 31,2017(unaudited) |
ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents - Teekay Parent |
191,137 |
|
229,405 |
|
129,772 |
|
Cash and cash
equivalents - Teekay LNG |
139,854 |
|
177,071 |
|
244,241 |
|
Cash and cash
equivalents - Teekay Tankers |
54,361 |
|
48,457 |
|
71,439 |
|
Other current
assets |
295,741 |
|
284,693 |
|
305,525 |
|
Restricted cash -
Teekay Parent |
2,057 |
|
2,141 |
|
7,257 |
|
Restricted cash -
Teekay LNG |
66,588 |
|
83,422 |
|
95,194 |
|
Restricted cash -
Teekay Tankers |
4,466 |
|
4,530 |
|
4,271 |
|
Assets held for
sale |
28,482 |
|
29,911 |
|
33,671 |
|
Vessels and equipment -
Teekay Parent |
312,081 |
|
320,111 |
|
337,318 |
|
Vessels and equipment -
Teekay LNG |
3,060,856 |
|
2,755,911 |
|
2,461,219 |
|
Vessels and equipment -
Teekay Tankers |
1,897,920 |
|
1,917,547 |
|
1,965,514 |
|
Advances on newbuilding
contracts |
172,248 |
|
349,169 |
|
444,493 |
|
Investment in
equity-accounted investees |
1,151,343 |
|
1,133,224 |
|
1,130,198 |
|
Net investment in
direct financing leases |
577,696 |
|
490,747 |
|
495,990 |
|
Other non-current
assets |
259,725 |
|
261,485 |
|
229,631 |
|
Intangible assets |
81,542 |
|
85,394 |
|
93,014 |
|
Goodwill |
43,690 |
|
43,690 |
|
43,690 |
|
Total Assets |
8,339,787 |
|
8,216,908 |
|
8,092,437 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
Accounts payable and
accrued liabilities and other |
211,247 |
|
281,672 |
|
320,339 |
|
Advances from
affiliates |
73,109 |
|
64,100 |
|
49,100 |
|
Current portion of
long-term debt - Teekay Parent |
— |
|
— |
|
81,748 |
|
Current portion of
long-term debt - Teekay LNG |
236,410 |
|
455,752 |
|
659,350 |
|
Current portion of
long-term debt - Teekay Tankers |
119,682 |
|
162,543 |
|
173,972 |
|
Long-term debt - Teekay
Parent |
643,715 |
|
687,761 |
|
585,663 |
|
Long-term debt - Teekay
LNG |
2,976,800 |
|
2,478,796 |
|
2,150,191 |
|
Long-term debt - Teekay
Tankers |
984,106 |
|
916,679 |
|
927,238 |
|
Derivative
liabilities |
44,753 |
|
103,485 |
|
128,811 |
|
Other long-term
liabilities |
130,052 |
|
132,507 |
|
136,369 |
|
Equity: |
|
|
|
|
|
|
Non-controlling
interests |
2,077,492 |
|
2,077,449 |
|
2,102,465 |
|
Shareholders of Teekay |
842,421 |
|
856,164 |
|
777,191 |
|
Total Liabilities and Equity |
8,339,787 |
|
8,216,908 |
|
8,092,437 |
|
Net debt - Teekay
Parent(1) |
450,521 |
|
456,215 |
|
530,382 |
|
Net debt - Teekay
LNG(1) |
3,006,768 |
|
2,674,055 |
|
2,470,106 |
|
Net debt
- Teekay Tankers(1) |
1,044,961 |
|
1,026,235 |
|
1,025,500 |
|
- Net debt is a non-GAAP financial measure and represents current
and long-term debt less cash and cash equivalents and, if
applicable, restricted cash.
Teekay CorporationSummary Consolidated Statements of
Cash Flows(in thousands of U.S. dollars)
|
Nine Months EndedSeptember 30, |
|
2018(unaudited) |
2017(unaudited) |
Cash, cash equivalents and restricted cash provided by
(used for) |
OPERATING ACTIVITIES |
Net loss |
(51,390 |
) |
(496,833 |
) |
Depreciation and
amortization |
205,238 |
|
422,713 |
|
Unrealized gain on
derivative instruments |
(93,817 |
) |
(94,532 |
) |
Write-down and loss on
sales of vessels |
53,693 |
|
270,254 |
|
Equity (income) loss,
net of dividends received |
(28,382 |
) |
72,159 |
|
Income tax expense |
17,197 |
|
11,767 |
|
Loss on deconsolidation
of Teekay Offshore |
7,070 |
|
103,188 |
|
Unrealized foreign
exchange (gain) loss and other |
(1,644 |
) |
95,682 |
|
Change in operating
assets and liabilities |
(41,424 |
) |
67,855 |
|
Expenditures for dry docking |
(28,782 |
) |
(38,704 |
) |
Net operating cash flow |
37,759 |
|
413,549 |
|
FINANCING ACTIVITIES |
Proceeds from issuance
of long-term debt, net of issuance costs |
843,854 |
|
680,261 |
|
Prepayments of
long-term debt |
(681,664 |
) |
(314,029 |
) |
Scheduled repayments of
long-term debt |
(223,597 |
) |
(615,337 |
) |
Proceeds from financing
related to sales-leaseback of vessels |
526,692 |
|
488,830 |
|
Repayments of
obligations related to capital leases |
(54,122 |
) |
(29,723 |
) |
Net proceeds from
equity issuances of subsidiaries |
— |
|
8,521 |
|
Net proceeds from
equity issuances of Teekay Corporation |
103,657 |
|
— |
|
Distributions paid from
subsidiaries to non-controlling interests |
(49,124 |
) |
(88,133 |
) |
Cash dividends
paid |
(16,637 |
) |
(14,235 |
) |
Other
financing activities |
(595 |
) |
1,675 |
|
Net financing cash flow |
448,464 |
|
117,830 |
|
INVESTING ACTIVITIES |
Expenditures for
vessels and equipment |
(564,464 |
) |
(694,507 |
) |
Proceeds from sale of
vessels and equipment |
— |
|
67,440 |
|
Investment in
equity-accounted investments |
(28,375 |
) |
(109,580 |
) |
Advances to joint
ventures and joint venture partners |
(24,957 |
) |
(12,576 |
) |
Proceeds from sale of
equity-accounted investment |
54,438 |
|
— |
|
Cash of transferred
subsidiaries on sale, net of proceeds received |
(25,254 |
) |
(45,447 |
) |
Other
investing activities |
8,678 |
|
13,481 |
|
Net investing cash flow |
(579,934 |
) |
(781,189 |
) |
Decrease in
cash, cash equivalents and restricted cash |
(93,711 |
) |
(249,810 |
) |
Cash,
cash equivalents and restricted cash, beginning of the period |
552,174 |
|
805,242 |
|
Cash, cash equivalents and restricted cash, end of the
period |
458,463 |
|
555,432 |
|
|
|
|
|
|
Teekay CorporationAppendix A - Reconciliation of
Non-GAAP Financial MeasuresAdjusted Net Loss(in thousands
of U.S. dollars, except per share data)
|
Three Months Ended |
|
September 30,2018(unaudited) |
June 30,2018(unaudited) |
September 30,2017(unaudited) |
|
$ |
$
PerShare(1) |
$ |
$
PerShare(1) |
$ |
$
PerShare(1) |
Net loss – GAAP
basis |
(1,763 |
) |
|
|
(39,647 |
) |
|
|
(383,065 |
) |
|
|
Adjust
for: Net (income) loss attributable to non-controlling
interests |
(10,242 |
) |
|
|
11,323 |
|
|
|
370,483 |
|
|
|
Net loss attributable to shareholders
of Teekay |
(12,005 |
) |
(0.12 |
) |
(28,324 |
) |
(0.28 |
) |
(12,582 |
) |
(0.15 |
) |
(Subtract) add
specific items affecting net loss |
(20,860 |
) |
(0.21 |
) |
(21,758 |
) |
(0.22 |
) |
(11,555 |
) |
(0.13 |
) |
Unrealized gains from derivative instruments(2) Foreign exchange
gains(3) |
(5,805 |
) |
(0.06 |
) |
(14,045 |
) |
(0.14 |
) |
(853 |
) |
(0.01 |
) |
Write-down and (gain) loss on sale of vessels and other
assets(4) |
(58 |
) |
— |
|
43,157 |
|
0.43 |
|
251,585 |
|
2.91 |
|
Restructuring charges (recoveries)(5) |
1,080 |
|
0.01 |
|
(607 |
) |
(0.01 |
) |
2,909 |
|
0.03 |
|
Loss on deconsolidation of Teekay Offshore |
— |
|
— |
|
— |
|
— |
|
103,188 |
|
1.20 |
|
Realized loss on interest rate swap terminations and
amendments(6) |
14,560 |
|
0.15 |
|
— |
|
— |
|
5,347 |
|
0.06 |
|
Other(7) |
6,868 |
|
0.07 |
|
5,490 |
|
0.06 |
|
8,371 |
|
0.10 |
|
Non-controlling interests’ share of items above(8) |
4,842 |
|
0.05 |
|
(5,468 |
) |
(0.05 |
) |
(382,048 |
) |
(4.42 |
) |
Total
adjustments |
627 |
|
0.01 |
|
6,769 |
|
0.07 |
|
(23,056 |
) |
(0.26 |
) |
Adjusted net loss attributable
to shareholders of Teekay |
(11,378 |
) |
(0.11 |
) |
(21,555 |
) |
(0.21 |
) |
(35,638 |
) |
(0.41 |
) |
- Basic per share amounts.
- Reflects the unrealized (gains) losses relating to the change
in the mark-to-market value of derivative instruments that are not
designated as hedges for accounting purposes, including those
investments included in the Company's proportionate share of equity
income (loss) from joint ventures, and hedge ineffectiveness from
derivative instruments designated as hedges for accounting
purposes.
- Foreign currency exchange 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.
- Also includes the Company's proportionate share of write-downs
and loss on sale of vessels and other operating assets in
equity-accounted joint ventures for the three months ended
September 30, 2018 (refer to footnote (4) of the summary
consolidated statements of loss included in this release for
further details) and June 30, 2018. For details on the consolidated
write-downs of vessels for the three months ended September 30,
2018, refer to footnote (2) of the summary consolidated statement
of loss.
- Also includes the Company's proportionate share of
restructuring costs in an equity-accounted joint venture for the
three months ended September 30, 2018 (refer to footnote (4) of the
summary consolidated statements of loss included in this release
for further details).
- Also includes the Company's proportionate share of realized
losses on interest rate swap amendments in an equity-accounted
joint venture for the three months ended September 30, 2018 and
2017 (refer to footnote (4) of the summary consolidated statements
of loss included in this release for further details).
- Other for the three months ended September 30, 2018 and June
30, 2018 includes the Company's proportionate share of a decrease
in the deferred income tax assets of certain equity-accounted joint
ventures (refer to footnote (4) of the summary consolidated
statements of loss included in this release for further details).
Other for the three months ended September 30, 2018 also includes
the Company's proportionate share of losses on debt repurchases in
an equity-accounted joint venture (refer to footnote (4) of the
summary consolidated statements of loss included in this release
for further details), losses on the Company's debt repurchases, and
the write-off of debt issuance costs in connection with the
refinancing of loans in Teekay Tankers.
- 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 September 30, 2018(in thousands of U.S.
dollars)(unaudited)
|
TeekayLNG |
TeekayTankers |
TeekayParent |
ConsolidationAdjustments(1) |
Total |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
123,336 |
|
175,915 |
|
117,571 |
|
(260 |
) |
416,562 |
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
(7,956 |
) |
(83,048 |
) |
(83 |
) |
188 |
|
(90,899 |
) |
Vessel operating
expenses |
(27,621 |
) |
(52,161 |
) |
(77,875 |
) |
72 |
|
(157,585 |
) |
Time-charter hire
expense |
(1,690 |
) |
(4,317 |
) |
(14,958 |
) |
— |
|
(20,965 |
) |
Depreciation and
amortization |
(32,238 |
) |
(29,595 |
) |
(8,134 |
) |
— |
|
(69,967 |
) |
General and
administrative expenses |
(4,183 |
) |
(8,747 |
) |
(6,120 |
) |
— |
|
(19,050 |
) |
Write-down and loss on
sale of vessels |
(2,201 |
) |
— |
|
— |
|
— |
|
(2,201 |
) |
Restructuring charges |
(449 |
) |
(213 |
) |
(151 |
) |
— |
|
(813 |
) |
Income (loss)
from vessel operations |
46,998 |
|
(2,166 |
) |
10,250 |
|
— |
|
55,082 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
(35,875 |
) |
(15,006 |
) |
(16,462 |
) |
— |
|
(67,343 |
) |
Interest income |
980 |
|
250 |
|
873 |
|
— |
|
2,103 |
|
Realized and unrealized
gain (loss) on non-designated derivative instruments |
2,515 |
|
596 |
|
(5,279 |
) |
— |
|
(2,168 |
) |
Equity income
(loss) |
14,679 |
|
(359 |
) |
(576 |
) |
— |
|
13,744 |
|
Equity in earnings of
subsidiaries(2) |
— |
|
— |
|
1,381 |
|
(1,381 |
) |
— |
|
Income tax expense |
(1,549 |
) |
(2,050 |
) |
(735 |
) |
— |
|
(4,334 |
) |
Foreign exchange
gain |
1,445 |
|
1,251 |
|
857 |
|
— |
|
3,553 |
|
Other
income (loss) – net |
314 |
|
— |
|
(2,714 |
) |
— |
|
(2,400 |
) |
Net income
(loss) |
29,507 |
|
(17,484 |
) |
(12,405 |
) |
(1,381 |
) |
(1,763 |
) |
Net
income attributable to non-controlling interests(3) |
(3,557 |
) |
— |
|
— |
|
(6,685 |
) |
(10,242 |
) |
Net income (loss) attributable to
shareholders/unitholders of publicly-listed
entities |
25,950 |
|
(17,484 |
) |
(12,405 |
) |
(8,066 |
) |
(12,005 |
) |
- 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.
- Net income attributable to non-controlling interests in the
Teekay LNG column represents the joint venture partners’ share of
the net income of its respective consolidated joint ventures. Net
income attributable to non-controlling interest in the
Consolidation Adjustments column represents the public’s share of
the net income of Teekay’s publicly-traded consolidated
subsidiaries.
Teekay CorporationAppendix C - Supplemental Financial
InformationTeekay Parent Summary Operating ResultsFor the Three
Months Ended September 30, 2018(in thousands of U.S.
dollars) (unaudited)
|
FPSOs |
Other(1) |
CorporateG&A |
TeekayParentTotal |
|
|
|
|
|
|
|
|
|
Revenues |
71,583 |
|
45,988 |
|
— |
|
117,571 |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
(200 |
) |
117 |
|
— |
|
(83 |
) |
Vessel operating
expenses |
(36,545 |
) |
(41,330 |
) |
— |
|
(77,875 |
) |
Time-charter hire
expense |
(11,566 |
) |
(3,392 |
) |
— |
|
(14,958 |
) |
Depreciation and
amortization |
(8,032 |
) |
(102 |
) |
— |
|
(8,134 |
) |
General and
administrative expenses |
(2,335 |
) |
558 |
|
(4,343 |
) |
(6,120 |
) |
Restructuring charges |
— |
|
(151 |
) |
— |
|
(151 |
) |
Income
(loss) from vessel operations |
12,905 |
|
1,688 |
|
(4,343 |
) |
10,250 |
|
|
|
|
|
|
|
|
Reconciliation of income (loss) from vessel operations to
cash flow from vessel operations |
|
|
|
|
|
|
|
Income (loss) from
vessel operations |
12,905 |
|
1,688 |
|
(4,343) |
|
10,250 |
|
Depreciation and
amortization |
8,032 |
|
102 |
|
— |
|
8,134 |
|
Amortization of in-process revenue contracts and other |
(2,142 |
) |
(762 |
) |
— |
|
(2,904 |
) |
CFVO -
Consolidated(2) |
18,795 |
|
1,028 |
|
(4,343 |
) |
15,480 |
|
CFVO - Equity Investments(3) |
266 |
|
20,308 |
|
— |
|
20,574 |
|
CFVO - Total |
19,061 |
|
21,336 |
|
(4,343 |
) |
36,054 |
|
- Includes the results of two chartered-in FSO units owned by
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 consolidated publicly-traded subsidiaries,
Teekay LNG and Teekay Tankers, and its equity-accounted investment
in Teekay Offshore. For the three months ended September 30, 2018,
Teekay Parent received cash distributions and dividends from these
entities totaling $4.3 million. The distributions and dividends
received by Teekay Parent include, among others, those made with
respect to its general partner interests in Teekay Offshore and
Teekay LNG. Please refer to Appendix D this release for further
details.
- Please see Appendix E to this release for a reconciliation of
this non-GAAP financial measure as used in this release to equity
income (loss) of equity accounted vessels, the most directly
comparable GAAP financial measure.
Teekay CorporationAppendix D - Reconciliation of
Non-GAAP Financial MeasuresTeekay Parent Free Cash Flow(in
thousands of U.S. dollars, except share and per share data)
|
Three Months Ended |
|
September
30,2018(unaudited) |
June
30,2018(unaudited) |
September
30,2017(unaudited) |
TEEKAY PARENT GPCO CASH FLOW |
Daughter
Entities distributions to Teekay Parent(1) |
|
|
|
|
|
|
Limited Partner interests(2) |
|
|
|
|
|
|
Teekay LNG |
3,529 |
|
3,529 |
|
3,529 |
|
Teekay Offshore |
566 |
|
566 |
|
566 |
|
GP interests |
|
|
|
|
|
|
Teekay LNG |
228 |
|
228 |
|
228 |
|
Teekay Offshore(3) |
15 |
|
16 |
|
16 |
|
Other Dividends |
|
|
|
|
|
|
Teekay Tankers(2)(4) |
— |
|
— |
|
1,690 |
|
Teekay Offshore(5) |
— |
|
— |
|
637 |
|
Total Daughter Entity
Distributions to Teekay Parent |
4,338 |
|
4,339 |
|
6,666 |
|
Corporate
general and administrative expenses |
(4,343 |
) |
(4,016 |
) |
496 |
|
Total Teekay Parent GPCO Cash Flow |
(5 |
) |
323 |
|
7,162 |
|
|
TEEKAY PARENT OPCO CASH FLOW |
Teekay Parent
cash flow from vessel operations(6) |
|
|
|
FPSOs |
18,795 |
|
12,277 |
|
(1,901 |
) |
Conventional Tankers |
— |
|
— |
|
(3,077 |
) |
Other(7) |
1,028 |
|
4,041 |
|
(1,005 |
) |
Teekay Parent OPCO Cash Flow(8) |
19,823 |
|
16,318 |
|
(5,983 |
) |
Teekay Parent
adjusted cash flow from vessel operations |
19,818 |
|
16,641 |
|
1,179 |
|
Net
interest expense(9) |
(14,977 |
) |
(15,843 |
) |
(13,072 |
) |
TOTAL TEEKAY PARENT FREE CASH FLOW |
4,841 |
|
798 |
|
(11,893 |
) |
Weighted-average number of common shares - Basic |
100,435,045 |
|
100,434,512 |
|
86,261,330 |
|
- Daughter Entities dividends and distributions for a given
quarter consist of the amount of dividends and distributions
(including payments- in-kind) relating to such quarter but received
by Teekay Parent in the following quarter. The limited partner and
general partner distributions received from Teekay Offshore for the
quarter ended September 30, 2017 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 |
|
September
30,2018(unaudited) |
|
June
30,2018(unaudited) |
|
September
30,2017(unaudited) |
Teekay
LNG |
|
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.14 |
|
$ |
0.14 |
|
$ |
0.14 |
Common units owned by Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
Total
distribution |
$ |
3,529,158 |
|
$ |
3,529,158 |
|
$ |
3,529,158 |
Teekay
Offshore |
|
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.01 |
|
$ |
0.01 |
|
$ |
0.01 |
Common units owned by Teekay Parent |
|
56,587,484 |
|
|
56,587,484 |
|
|
56,587,484 |
Total
distribution |
$ |
565,875 |
|
$ |
565,875 |
|
$ |
565,875 |
Teekay
Tankers |
|
|
|
|
|
|
|
|
Dividend
per share |
$ |
— |
|
$ |
— |
|
$ |
0.03 |
Shares owned by Teekay Parent(3) |
|
77,298,441 |
|
|
77,298,441 |
|
|
56,317,627 |
Total
dividend |
$ |
— |
|
$ |
— |
|
$ |
1,689,529 |
- In July 2018, Brookfield exercised its option to
acquire an additional 2% ownership interest in Teekay Offshore's
general partner from Teekay.
- Includes Class A and Class B shareholdings. Teekay Tankers'
past dividend policy was to pay out 30 percent to 50 percent of its
quarterly adjusted net income (as defined), with a minimum
quarterly dividend of $0.03 per share, subject to Teekay Tankers'
Board approval. Commencing with the dividend for the first quarter
of 2018, Teekay Tanker's Board eliminated the minimum quarter
dividend; however, the variable portion of the dividend policy was
maintained.
- Includes distributions from Teekay Parent's interest in Teekay
Offshore's 10.5% Series D Preferred Units acquired in June 2016.
All outstanding Series D Preferred Units were repurchased by Teekay
Offshore in September 2017 as part of the Brookfield
Transaction.
- Please refer to Appendices C and E for additional financial
information on Teekay Parent’s cash flow from vessel
operations.
- Other for the three months ended June 30, 2018 includes $1.7
million of revenue associated with a customer recovery of prior
period restructuring costs relating to Teekay Parent's Australian
operations.
- 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 |
|
September
30,2018(unaudited) |
June
30,2018(unaudited) |
September
30,2017(unaudited) |
Income (loss) from
vessel operations |
55,082 |
|
1,921 |
|
(189,846 |
) |
Depreciation and
amortization |
69,967 |
|
67,960 |
|
136,942 |
|
Amortization of
in-process revenue contracts and other |
(2,412 |
) |
(2,727 |
) |
(6,737 |
) |
Realized gains from the
settlements of non-designated derivative instruments |
— |
|
— |
|
1,843 |
|
Write-down and loss on
sale of vessels |
2,201 |
|
32,830 |
|
251,585 |
|
Cash flow
from time-charter contracts, net of revenue accounted for as direct
finance leases |
2,823 |
|
2,897 |
|
3,071 |
|
CFVO -
Consolidated |
127,661 |
|
102,881 |
|
196,858 |
|
CFVO - Equity Investments (see Appendix E) |
68,736 |
|
61,316 |
|
41,202 |
|
CFVO – Total |
196,397 |
|
164,197 |
|
238,060 |
|
|
|
|
|
|
|
|
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 |
|
September
30, 2018(unaudited) |
June
30, 2018(unaudited) |
September
30, 2017(unaudited) |
|
At100% |
Company'sPortion(1) |
At100% |
Company'sPortion |
At100% |
Company'sPortion |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
481,760 |
|
115,064 |
|
458,098 |
|
106,875 |
|
196,281 |
|
78,912 |
|
Vessel and other
operating expenses |
(225,486 |
) |
(48,929 |
) |
(228,523 |
) |
(48,996 |
) |
(101,063 |
) |
(40,279 |
) |
Depreciation and
amortization |
(127,335 |
) |
(27,454 |
) |
(128,353 |
) |
(27,467 |
) |
(48,045 |
) |
(19,425 |
) |
Write-down and gain
(loss) on sale of vessels |
350 |
|
49 |
|
(62,913 |
) |
(8,854 |
) |
— |
|
— |
|
Restructuring charges |
(1,899 |
) |
(267 |
) |
— |
|
— |
|
— |
|
— |
|
Income from vessel
operations of equity-accounted vessels |
127,390 |
|
38,463 |
|
38,309 |
|
21,558 |
|
47,173 |
|
19,208 |
|
Interest expense |
(95,370 |
) |
(25,899 |
) |
(87,010 |
) |
(23,611 |
) |
(36,568 |
) |
(14,878 |
) |
Realized and unrealized
gain (loss) on on derivative instruments |
13,266 |
|
2,633 |
|
17,474 |
|
4,684 |
|
(21,538 |
) |
(3,652 |
) |
Gain (loss) on sale of
equity-accounted investments (2) |
— |
|
2,234 |
|
— |
|
(1,523 |
) |
— |
|
— |
|
Other –
net |
(25,237 |
) |
(3,687 |
) |
(2,744 |
) |
(271 |
) |
(1,716 |
) |
586 |
|
Equity income (loss) of equity- accounted
vessels |
20,049 |
|
13,744 |
|
(33,971 |
) |
837 |
|
(12,649 |
) |
1,264 |
|
Income from vessel
operations of equity-accounted vessels |
127,390 |
|
38,463 |
|
38,309 |
|
21,558 |
|
47,173 |
|
19,208 |
|
Depreciation and
amortization |
127,335 |
|
27,454 |
|
128,353 |
|
27,467 |
|
48,045 |
|
19,425 |
|
Write-down and (gain)
loss on sale of vessels |
(350 |
) |
(49 |
) |
62,913 |
|
8,854 |
|
— |
|
— |
|
Realized (loss) gain
from the settlement of non-designated foreign currency forward
contracts |
(747 |
) |
(105 |
) |
370 |
|
52 |
|
— |
|
— |
|
Cash flow from
time-charter contracts, net of revenue accounted for as direct
finance leases |
14,971 |
|
5,048 |
|
13,879 |
|
4,707 |
|
10,017 |
|
3,636 |
|
Amortization of in-process revenue contracts and other |
(12,758 |
) |
(2,075 |
) |
(6,027 |
) |
(1,322 |
) |
(2,065 |
) |
(1,067 |
) |
Cash flow from vessel operations of
equity-accounted vessels(3) |
255,841 |
|
68,736 |
|
237,797 |
|
61,316 |
|
103,170 |
|
41,202 |
|
- 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.
- Includes a gain on the option exercised by Brookfield to
acquire an additional 2% ownership interest in Teekay Offshore's
general partner from Teekay during the three months ended September
30, 2018 and a loss on the sale of the Company's investment in KT
Maritime (Pty) Ltd. during the three months ended June 30,
2018.
- 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 June 30,
2018(unaudited) |
|
FPSOs |
ConventionalTankers |
Other |
CorporateG&A |
TeekayParentTotal |
|
|
|
|
|
|
|
|
|
|
|
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 |
) |
Cash flow from vessel operations –
Teekay Parent |
12,277 |
|
— |
|
4,041 |
|
(4,016 |
) |
12,302 |
|
|
Three Months Ended September 30,
2017(unaudited) |
|
FPSOs |
ConventionalTankers |
Other |
CorporateG&A |
TeekayParentTotal |
|
|
|
|
|
|
Teekay Parent (loss)
income from vessel operations |
(223,957 |
) |
(3,077 |
) |
(280 |
) |
496 |
|
(226,818 |
) |
Depreciation and
amortization |
17,320 |
|
— |
|
(79 |
) |
— |
|
17,241 |
|
Write-down of
vessels |
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 |
(1,901 |
) |
(3,077 |
) |
(1,005 |
) |
496 |
|
(5,487 |
) |
|
|
|
|
|
|
|
|
|
|
|
Teekay CorporationAppendix E - Reconciliation
of Non-GAAP Financial MeasuresNet Interest Expense - Teekay
Parent(in thousands of U.S. dollars)
|
Three Months
Ended |
|
September
30,2018(unaudited) |
June
30,2018(unaudited) |
September
30,2017(unaudited) |
|
|
|
|
Interest expense |
(67,343 |
) |
(59,526 |
) |
(74,499 |
) |
Interest
income |
2,103 |
|
2,095 |
|
1,900 |
|
Interest expense net of
interest income consolidated |
(65,240 |
) |
(57,431 |
) |
(72,599 |
) |
Less:
Non-Teekay Parent interest expense net of interest income and
adjustment |
(49,651 |
) |
(41,040 |
) |
(60,201 |
) |
Interest expense net of
interest income - Teekay Parent |
(15,589 |
) |
(16,391 |
) |
(12,398 |
) |
Less: Teekay Parent
non-cash accretion on convertible bond |
966 |
|
942 |
|
— |
|
Add:
Teekay Parent realized losses on interest rate swaps |
(354 |
) |
(394 |
) |
(674 |
) |
Net interest expense - Teekay Parent |
(14,977 |
) |
(15,843 |
) |
(13,072 |
) |
|
|
|
|
|
|
|
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 effect of Teekay Tankers'
financing transactions on its liquidity and debt maturity profile;
the impact of contract extensions on future cash flows; the timing
and certainty of the Company’s sale of its ownership interest in
Sevan, and the expected income/gain from the sale; the anticipated
benefit to the Company’s future financial results and balance sheet
from the delivery of the remaining LNG projects and newbuildings
over the next few years; the timing and cost of delivery and
start-up of various newbuildings and other projects and the
commencement of related contracts; the effects of future
newbuilding deliveries on Teekay LNG’s future cash flows; Teekay
LNG’s proposed election to be classified as a corporation, instead
of a partnership, for U.S. federal income tax purposes, and the
effects of any such change; Teekay LNG’s guidance as to 2019 cash
distributions, and the expected benefits of Teekay LNG’s capital
allocation strategy, including its ability to consider additional
return of capital to its unitholders in the future; Teekay LNG’s
ability to benefit from future LNG fundamentals; the completion and
impact of Teekay Offshore’s newbuilding orders on its position in
the North Sea CoA shuttle tanker market, and customer demand in
that market; the timing and amount of future settlement payments
from Petrobras, including the impact on revenue for the fourth
quarter of 2018 and of any Offset Amounts; the estimated effect of
the rate reduction relating to the Piranema Spirit FPSO; the timing
and certainty of the effectiveness of the agreement with Alpha to
develop the Cheviot field, including satisfaction by Alpha of the
various conditions precedent to its effectiveness; the expected
requirements of ALP Maritime to service Total’s Kaombo Sul project;
fuel consumption and emissions for the shuttle tanker newbuildings;
the ability of the Teekay Group to benefit from a broader energy
and tanker market recovery; and the potential upside from charter
arrangements that include a variable rate component. 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; 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
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; the Daughter Entities’
ability to secure or draw on financings; the result of potential
rechartering discussions and negotiations; the outcome of the
unitholder vote at the special meeting to approve changes to the
tax classification of Teekay LNG and related amendments to Teekay
LNG’s partnership agreement, and the actual effect of any such
changes on Teekay LNG and its unitholders; actual levels of
quarterly distributions approved by Teekay LNG's general partner;
the ability of Alpha to satisfy all of the conditions precedent
relating to the contract between Teekay Offshore and Alpha; failure
to complete the sale of shares in Sevan; 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, 2017. Teekay expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Teekay’s expectations with respect thereto or any change in
events, conditions or circumstances on which any such statement is
based.
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