Highlights
Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the fourth quarter and fiscal year 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 fourth quarter and annual 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 |
Year Ended |
|
December
31, |
September
30, |
December
31, |
December
31, |
December
31, |
|
2018 |
2018 |
2017 |
2018 |
2017(2) |
(in thousands of U.S.
dollars, except per share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
TEEKAY CORPORATION
CONSOLIDATED |
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|
|
|
GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
Revenues |
491,532 |
|
416,562 |
|
326,686 |
|
1,707,758 |
|
1,880,332 |
|
Income from
vessel operations |
88,811 |
|
55,082 |
|
66,655 |
|
164,319 |
|
6,700 |
|
Equity
income (loss) |
19,356 |
|
13,744 |
|
(971 |
) |
61,054 |
|
(37,344 |
) |
Net loss
attributable to shareholders in Teekay |
(18,353 |
) |
(12,005 |
) |
(25,286 |
) |
(79,237 |
) |
(163,276 |
) |
Loss per
share attributable to shareholders of Teekay |
(0.18 |
) |
(0.12 |
) |
(0.29 |
) |
(0.79 |
) |
(1.89 |
) |
NON-GAAP FINANCIAL
COMPARISON |
|
|
|
|
|
Total Cash Flow from Vessel
Operations (CFVO)(1)(2) |
246,675 |
|
196,397 |
|
183,586 |
|
775,633 |
|
951,118 |
|
Adjusted Net Loss attributable to
shareholders |
|
|
|
|
|
of Teekay(1) |
(2,014 |
) |
(11,378 |
) |
(9,500 |
) |
(53,271 |
) |
(118,954 |
) |
Adjusted Net Loss per share
attributable to |
|
|
|
|
|
shareholders of Teekay(1) |
(0.02 |
) |
(0.11 |
) |
(0.11 |
) |
(0.53 |
) |
(1.38 |
) |
TEEKAY PARENT |
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NON-GAAP FINANCIAL
COMPARISON |
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|
Teekay
Parent Adjusted Cash Flow from Vessel Operations(1) |
3,081 |
|
19,818 |
|
15,781 |
|
52,762 |
|
1,564 |
|
Total
Teekay Parent Free Cash Flow(1) |
(11,000 |
) |
4,841 |
|
(721 |
) |
(8,573 |
) |
(53,152 |
) |
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(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) 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.
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 2018 adoption of new revenue
accounting standards.
CEO Commentary
“In the fourth quarter of 2018, our total CFVO
increased by approximately $50 million, or 25 percent, compared to
the prior quarter, primarily driven by the contract start-up of
various growth projects across the Teekay Group, certain LNG
vessels commencing new contracts at firm rates, and higher spot
tanker rates,” commented Kenneth Hvid, Teekay’s President and Chief
Executive Officer. “The fourth quarter results also included our
minority portion of Teekay Offshore’s previously-announced positive
settlement with Petrobras. In addition, our consolidated and Teekay
Parent cash flows this quarter would have been higher by
approximately $8 million were it not for the unplanned shutdown of
the Foinaven FPSO and the previously-guided shutdown of the Banff
FPSO. I am pleased to report that both FPSO units were back up and
running as of early-January 2019 and early-November 2018,
respectively.”
“Since the beginning of 2018, the Teekay Group
has continued to build financial strength and grow its cash flows
while also benefiting from improving LNG and crude tanker macro
fundamentals, all of which supports greater long-term value
creation,” Mr. Hvid continued.
“We took advantage of multi-year highs in the
LNG spot tanker shipping market by securing new charters at higher
rates for the few vessels Teekay LNG has trading in the short-term
market and we expect the LNG spot shipping market to be relatively
strong through to the end of 2019 and into 2020,” commented Mr.
Hvid. "As announced last quarter, Teekay LNG will increase its
quarterly cash distributions by 36 percent commencing in the first
quarter of 2019. While Teekay LNG’s balanced capital allocation
strategy results in a more moderate distribution increase in the
near-term, we believe that this approach will enable Teekay LNG to
delever its balance sheet faster and thus, maximize equity value
for all of Teekay LNG’s unitholders over the long-term. In
addition, in the fourth quarter, Teekay LNG announced a common unit
repurchase program and we believe that opportunistic repurchases by
Teekay LNG will create further value. We are committed to creating
long-term value for all unitholders, while also maximizing the
benefits to Teekay Parent through the incentive distribution rights
structure.”
“Teekay Tankers benefitted from fourth quarter
crude spot tanker rates reaching three-year highs,” commented Mr.
Hvid. “This strength continued into early-2019 with Teekay Tankers
securing first quarter to-date crude spot tanker rates that are
higher than the fourth quarter. While rates have recently softened
from these levels, we believe we are at the beginning of a more
sustained recovery that is expected to increase Teekay Tankers’
cash flows and asset values. Teekay Tankers has completed various
financing initiatives and have signed a term sheet for an
additional sale-leaseback transaction, which have or are expected
to strengthen its liquidity position and extend its debt maturity
profile. With significant operating leverage, we believe Teekay
Tankers is well-positioned to benefit from a forecasted
strengthening global tanker market in the second half of 2019 and
into 2020.”
“In addition to benefitting from the value
creation taking place at its daughter entities, Teekay Parent is
also benefitting from a delevering balance sheet and higher cash
flows. Teekay Parent adjusted CFVO has increased by $51 million in
2018 compared to 2017, driven primarily by higher cash flows
generated by our directly-owned FPSO
units, which have upside exposure to oil prices and
production.”
Mr. Hvid continued, “Since the beginning of
2018, Teekay Parent has used a portion of the capital raised in
January 2018 to repay all of its secured debt and reduced its 2020
unsecured bond balance by approximately $95 million, including the
repurchase of $42.4 million of our unsecured bonds at an all-in
average price of 97.27 since the beginning of December 2018.
Looking ahead, one our key priorities will be to refinance our 2020
bond maturity with a smaller bond, which is in line with our
strategy of strengthening our financial foundation.”
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended December 31, 2018, compared to the same period of the
prior year, were positively impacted by an increase in revenue from
the Hummingbird Spirit FPSO unit due to higher production and
higher contractual production tariffs linked to oil prices, higher
income and cash flows from Teekay LNG as a result of the
deliveries of 12 liquefied natural gas (LNG) carrier newbuildings
between October 2017 and December 2018, higher income and cash
flows in Teekay Tankers as a result of higher average spot tanker
rates, and higher equity income relating to Teekay Offshore’s $96
million positive settlement with Petrobras.
These increases were partially offset by lower
cash flows for the Banff and Foinaven FPSO units due to unplanned
shutdowns for both units in the fourth quarter of 2018, higher
interest expense in Teekay Tankers as a result of recent
sale-leaseback transactions, lower income and cash flows from
Teekay LNG’s seven multi-gas carriers upon the termination of their
previous charter contracts in early 2018, and higher general and
administrative expense in the fourth quarter of 2018, a portion of
which is non-recurring.
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 $3.1
million for the quarter ended December 31, 2018 compared to
$15.8 million for the same period of the prior year. This decrease
was primarily due to: lower revenues from the Banff and Foinaven
FPSO units in the fourth quarter of 2018 due to their unplanned
shutdowns, and, as a result of the adoption of the new revenue
accounting standard, the recognition of approximately $6 million of
additional annual incentive revenue related to the Foinaven FPSO
unit in the first three quarters of 2018, which in 2017 was
recognized in the fourth quarter; the elimination of the minimum
dividend payment from Teekay Tankers commencing with the first
quarter of 2018; the elimination of common unit distributions from
Teekay Offshore commencing with the fourth quarter of 2018; and
higher general and administrative expense in the fourth quarter of
2018, a portion of which is non-recurring. These decreases were
partially offset by an increase in revenue from the Hummingbird
Spirit FPSO unit due to higher production and higher contractual
production tariffs linked to oil prices.
Total Teekay Parent Free Cash Flow(1), which
includes Teekay Parent Adjusted Cash Flow from Vessel
Operations(1), less net interest expense, was negative $11.0
million during the fourth quarter of 2018, compared to negative
$0.7 million for the same period of the prior year, primarily for
the reasons mentioned above and lower net interest expense due to
the repurchase of a portion of Teekay Parent's 2020 bonds during
2018. Please refer to Appendix D of this release for additional
information about Teekay Parent Free Cash Flow.
(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 GAAP.
Summary Results of Daughter Entities
Teekay LNG
Teekay LNG’s total CFVO increased in the three
months ended December 31, 2018, compared to the same quarter
of the prior year, as a result of the deliveries of 12 LNG carrier
newbuildings in Teekay LNG’s consolidated fleet and
equity-accounted joint ventures between October 2017 and December
2018; and the Magellan Spirit chartered-in from Teekay LNG’s 52
percent-owned joint venture with Marubeni Corporation commencing in
September 2018. These increases were partially offset by: lower
cash flows from seven multi-gas carriers following the termination
of their previous charter contracts in early 2018; the sales of the
Teide Spirit, African Spirit and European Spirit conventional
tankers during 2018; an increase in off-hire days for certain of
Teekay LNG’s vessels due to repairs; and an increase in general and
administrative expenses. Please refer to Teekay LNG's fourth
quarter 2018 earnings release for additional information on the
financial results for this entity.
Teekay Tankers
Teekay Tankers' total CFVO increased in the
fourth quarter of 2018 compared to the same period of the prior
year as a result of higher average spot tanker rates and the
acquisition of Tanker Investments Ltd. (or TIL) in late-November
2017. This was partially offset by costs associated with
sale-leaseback transactions relating to ten tankers. Please
refer to Teekay Tankers' fourth quarter 2018 earnings release for
additional information on the financial results for this
entity.
Summary of Recent Events
Teekay Parent
In December 2018, Teekay Parent closed its
previously-announced sale of its 43.5 percent interest in Magnora
ASA (formerly named Sevan Marine ASA ) for total consideration of
approximately $28 million, which resulted in the Company recording
an accounting gain of approximately $15.3 million in the fourth
quarter of 2018.
Since the beginning of December 2018, Teekay
Parent repurchased $42.4 million of its 8.5 percent senior
unsecured notes due in January 2020 (2020 Bond) for total
consideration of $41.3 million for an average price of 97.27
percent of the principal amount, which is below the current trading
price and the make-whole price for the 2020 Bonds. As of today, the
remaining outstanding balance of Teekay Parent's 2020 Bond is
approximately $498 million.
In December 2018, Teekay Parent extended its
equity margin revolver, which is secured by all the Company's
Teekay LNG and Teekay Offshore common units and Teekay Tankers
Class A common shares, by two years out to December 2020.
Teekay LNG
The Torben Spirit LNG carrier commenced its
minimum 3-year charter on January 1, 2019 at a charter rate in
excess of $100,000 per day for the duration of the contract.
In December 2018, Teekay LNG took delivery of
one M-Type, Electronically Controlled, Gas Injection (MEGI) LNG
carrier newbuilding, the Sean Spirit, which immediately commenced
its seven-year charter contract with BP Gas Marketing Limited.
In January 2019, Teekay LNG’s 20 percent-owned
joint venture with China LNG Shipping (Holdings) Limited, CETS
Investment Management (HK) Co. Ltd. (an affiliate of China National
Offshore Oil Corporation) and BW LNG Investments Pte. Ltd., took
delivery of one LNG carrier newbuilding, the Pan Africa, which
immediately commenced its 20-year charter contract with Royal Dutch
Shell.
In January 2019, Teekay LNG took delivery of one
MEGI LNG carrier newbuilding, the Yamal Spirit, which immediately
commenced its 15-year charter with Yamal Trade Pte Ltd.
Concurrently with the delivery, Teekay LNG entered into a $159
million, 15-year sale-leaseback financing arrangement with a lessor
which added approximately $30 million of liquidity to Teekay
LNG.
In January 2019, the Todelo Spirit, a Suezmax
tanker that was chartered-in by Teekay LNG under a capital lease
from the charterer, was sold to a third party. Upon the sale of the
vessel, Teekay LNG's charter contract for this vessel was
terminated and the remaining capital lease obligation was
extinguished. During 2018, Teekay LNG completed similar
transactions for three other Suezmax tankers, the Teide Spirit in
February 2018, the African Spirit in October 2018, and the European
Spirit in November 2018.
Teekay Tankers
In November 2018, Teekay Tankers completed a
sale-leaseback transaction relating to four vessels and a loan to
finance working capital for the Company's revenue sharing agreement
(RSA) pool management operations, which when fully drawn, will
contribute a total of $40 million of additional liquidity after the
repayment of outstanding debt related to the four vessels
In February 2019, Teekay Tankers signed a term
sheet for a sale-leaseback transaction relating to two Suezmax
tankers. The transaction, once completed, is expected to further
increase Teekay Tankers' liquidity position by approximately $25
million after the repayment of outstanding debt related to these
vessels. The transaction, which remains subject to final lessor
approval and customary closing conditions, is expected to be
completed in the first quarter of 2019.
Since November 2018, Teekay Tankers entered into
time charter-in contracts for 2.5 Aframax/LR2 vessel equivalents
for periods ranging 1 to 2 years with extension options. The new
time charter-in contracts have a weighted average daily rate of
$17,600.
Teekay Offshore
In January 2019, Teekay Offshore secured a
contract extension with Petrobras to extend the employment of the
Piranema Spirit FPSO unit on the Brazilian field. The contract
extension commenced in February 2019 for a period of three years
but includes customer termination rights with 10 months' advance
notice.
In October 2018, Teekay Offshore entered into a
settlement agreement with Petrobras with respect to various
disputes relating to the previously-terminated charter contracts of
the HiLoad DP unit and Arendal Spirit unit for maintenance and
safety (UMS). As part of the settlement agreement, Petrobras
agreed to pay a total amount of $96 million to Teekay Offshore, $55
million of which was received in the fourth quarter of 2018. 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.
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
the charter rate for the FPSO unit totaling approximately $11
million, which was credited to Petrobras in the fourth quarter of
2018. This amount was accrued in Teekay Offshore's financial
statements in prior periods, primarily in 2016 and 2017.
Liquidity
As at December 31, 2018, Teekay Parent had
total liquidity of approximately $333.4 million (consisting of
$220.2 million of cash and cash equivalents and $113.2 million of
undrawn revolving credit facilities) and, on a consolidated basis,
Teekay had consolidated total liquidity of approximately $724.7
million (consisting of $424.2 million of cash and cash equivalents
and $300.5 million of undrawn revolving credit facilities).
Conference Call
The Company plans to host a conference call on
Thursday, February 21, 2019 at 2:00 p.m. (ET) to discuss its
results for the fourth quarter and fiscal year 2018. All
shareholders and interested parties are invited to listen to the
live conference call by choosing from the following options:
- By dialing (800) 239-9838 or (647) 794-4605, if outside North
America, and quoting conference ID code 3368131.
- 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 voting 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 Adjusted Net Income (Loss), Cash
Flow from Vessel Operations, Free Cash Flow, and Net Revenues are
intended to provide additional information and should not be
considered a substitute for measures of performance prepared in
accordance with GAAP. In addition, these measures do not have
standardized definitions across companies, and therefore may not be
comparable to similar measures presented by other companies.
These non-GAAP measure are used by management, and the Company
believes that these supplemental metrics assist investors and other
users of its financial reports in comparing financial and operating
performance of the Company across reporting periods and with other
companies.
Non-GAAP Financial Measures
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 year
ended December 31, 2018 are lower compared to the same period 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 months and year ended December 31,
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 months and year ended December 31, 2018 by $90.3
million and $292.6 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 months and year ended December 31,
2018 by $21.2 million and $82.5 million, respectively.
Teekay CorporationSummary Consolidated
Statements of Loss(1)(in thousands of U.S. dollars, except
share and per share data)
|
|
|
|
Three Months Ended |
Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
491,532 |
|
416,562 |
|
326,686 |
|
1,707,758 |
|
1,880,332 |
|
|
|
|
|
|
|
Voyage expenses |
(117,199 |
) |
(90,899 |
) |
(24,438 |
) |
(388,887 |
) |
(153,766 |
) |
Vessel operating
expenses |
(162,268 |
) |
(157,585 |
) |
(131,650 |
) |
(637,474 |
) |
(731,150 |
) |
Time-charter hire
expense |
(25,434 |
) |
(20,965 |
) |
(22,787 |
) |
(86,458 |
) |
(120,893 |
) |
Depreciation and
amortization |
(71,069 |
) |
(69,967 |
) |
(63,116 |
) |
(276,307 |
) |
(485,829 |
) |
General and
administrative expenses |
(26,751 |
) |
(19,050 |
) |
(17,509 |
) |
(96,555 |
) |
(106,150 |
) |
Write-down and loss on
sale of vessels(2) |
— |
|
(2,201 |
) |
(489 |
) |
(53,693 |
) |
(270,743 |
) |
Restructuring charges |
— |
|
(813 |
) |
(42 |
) |
(4,065 |
) |
(5,101 |
) |
Income from
vessel operations |
88,811 |
|
55,082 |
|
66,655 |
|
164,319 |
|
6,700 |
|
|
|
|
|
|
|
Interest expense |
(72,632 |
) |
(67,343 |
) |
(49,163 |
) |
(254,126 |
) |
(268,400 |
) |
Interest income |
2,650 |
|
2,103 |
|
1,373 |
|
8,525 |
|
6,290 |
|
Realized and unrealized
(loss) gain on |
|
|
|
|
|
non-designated
derivative instruments (3) |
(32,833 |
) |
(2,168 |
) |
4,319 |
|
(14,852 |
) |
(38,854 |
) |
Equity income (loss)
(4) |
19,356 |
|
13,744 |
|
(971 |
) |
61,054 |
|
(37,344 |
) |
Income tax expense |
(6,727 |
) |
(4,334 |
) |
(465 |
) |
(19,724 |
) |
(12,232 |
) |
Foreign exchange (loss)
gain |
(5,764 |
) |
3,553 |
|
(3,575 |
) |
6,140 |
|
(26,463 |
) |
Loss on deconsolidation
of Teekay Offshore (5) |
— |
|
— |
|
(1,600 |
) |
(7,070 |
) |
(104,788 |
) |
Other
income (loss) – net (6) |
782 |
|
(2,400 |
) |
(48,812 |
) |
(2,013 |
) |
(53,981 |
) |
Net
loss |
(6,357 |
) |
(1,763 |
) |
(32,239 |
) |
(57,747 |
) |
(529,072 |
) |
Net (income) loss
attributable to |
|
|
|
|
|
non-controlling interests |
(11,996 |
) |
(10,242 |
) |
6,953 |
|
(21,490 |
) |
365,796 |
|
Net loss
attributable to the |
|
|
|
|
|
shareholders of Teekay Corporation |
(18,353 |
) |
(12,005 |
) |
(25,286 |
) |
(79,237 |
) |
(163,276 |
) |
Loss per common share
of Teekay Corporation |
|
|
|
|
|
- Basic
and Diluted |
$ |
(0.18 |
) |
$ |
(0.12 |
) |
$ |
(0.29 |
) |
$ |
(0.79 |
) |
$ |
(1.89 |
) |
Weighted-average number
of common |
|
|
|
|
|
shares
outstanding |
|
|
|
|
|
- Basic
and Diluted |
100,435,155 |
|
100,435,045 |
|
86,641,584 |
|
99,670,176 |
|
86,335,473 |
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to the "Important Notice to
Reader" for details on the deconsolidation of Teekay Offshore and
the adoption of the new revenue accounting standard.
(2) Write-down and loss on sale of
vessels for the year ended December 31, 2018 relates to the
write-downs of four of Teekay LNG's Multi-gas carriers and two of
Teekay LNG's conventional tankers. 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 charter rate environment and the outlook
for charter rates for these vessels at that time.
(3) 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 (losses) gains 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, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Realized
(losses) gains relating to: |
|
|
|
|
|
|
Interest rate
swaps |
(2,354 |
) |
(2,704 |
) |
(5,725 |
) |
(13,898 |
) |
(53,921 |
) |
|
Termination of interest
rate swaps |
— |
|
(13,681 |
) |
— |
|
(13,681 |
) |
(610 |
) |
|
Foreign currency
forward contracts |
— |
|
— |
|
29 |
|
— |
|
667 |
|
|
Time-charter swaps |
— |
|
— |
|
160 |
|
— |
|
1,106 |
|
|
Forward freight
agreements |
274 |
|
(119 |
) |
(234 |
) |
137 |
|
270 |
|
|
|
(2,080 |
) |
(16,504 |
) |
(5,770 |
) |
(27,442 |
) |
(52,488 |
) |
Unrealized
(losses) gains relating to: |
|
|
|
|
|
|
Interest rate
swaps |
(10,469 |
) |
19,718 |
|
11,824 |
|
33,700 |
|
17,005 |
|
|
Foreign currency
forward contracts |
— |
|
— |
|
(457 |
) |
— |
|
3,925 |
|
|
Stock purchase
warrants |
(20,202 |
) |
(5,373 |
) |
(1,385 |
) |
(21,053 |
) |
(6,421 |
) |
|
Time-charter swap |
— |
|
— |
|
(14 |
) |
— |
|
(875 |
) |
|
Forward freight
agreements |
(82 |
) |
(9 |
) |
121 |
|
(57 |
) |
— |
|
|
|
(30,753 |
) |
14,336 |
|
10,089 |
|
12,590 |
|
13,634 |
|
Total realized and unrealized (losses) gains on
non-designated derivative instruments |
(32,833 |
) |
(2,168 |
) |
4,319 |
|
(14,852 |
) |
(38,854 |
) |
|
|
|
|
|
|
|
|
|
|
|
(4) 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
summary 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 |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Equity
income (loss) |
19,356 |
|
13,744 |
|
(971 |
) |
61,054 |
|
(37,344 |
) |
Proportionate share of unrealized losses (gains) on derivative
instruments |
15,387 |
|
(6,524 |
) |
(5,680 |
) |
(17,600 |
) |
(7,706 |
) |
Other(i) |
(10,411 |
) |
2,289 |
|
9,203 |
|
4,122 |
|
66,922 |
|
Equity income adjusted for items in Appendix A |
24,332 |
|
9,509 |
|
2,552 |
|
47,576 |
|
21,872 |
|
|
|
|
|
|
|
|
|
|
|
|
(i) Other for the three months and year
ended December 31, 2018 includes the Company's gain on the sale of
its 43.5% stake in Magnora ASA (or Magnora, previously Sevan Marine
ASA) and the Company's proportionate share of write-downs and gain
on sale of vessels by Teekay Offshore and a decrease in the
deferred income tax asset for Teekay Offshore's Norwegian tax
structure. Other for the year ended December 31, 2018 also includes
the Company's proportionate share of the loss on bond repurchases
in Teekay Offshore, the realized loss on interest rate swap
amendments in Teekay Offshore, restructuring charges related to
severance costs from crew reduction on the Petrojarl
Varg FPSO unit in Teekay Offshore, 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, 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,
the loss on sale of the Company's investment in KT Maritime (Pty)
Ltd., and the gain on sale of Teekay LNG's interest in the
Excelsior joint venture.
(5) On September 25, 2017, Teekay, Teekay
Offshore and Brookfield finalized a strategic partnership
(or the Brookfield Transaction) which resulted in the
deconsolidation of Teekay Offshore as of that date. On January 1,
2018, as a condition of the Brookfield Transaction, Teekay Offshore
acquired from Teekay a 100% ownership interest in seven
subsidiaries (or the Transferred Subsidiaries) at carrying
value. The Company recognized a loss on sale of the Transferred
Subsidiaries of $7.1 million, primarily as a result of releasing
the associated deferred pension loss from accumulated other
comprehensive income which is recorded in loss on deconsolidation
of Teekay Offshore on the Company's consolidated statements of loss
for the year ended December 31, 2018.
(6) Following the termination of the
capital lease arrangements for the three LNG carriers in Teekay
Nakilat Corporation (the Teekay Nakilat Joint Venture), the lessor
made a determination that additional rentals were due under the
leases following a challenge by the UK taxing authority. As a
result, the Teekay Nakilat Joint Venture recognized an additional
liability of $53.0 million, of which $3.0 million is included in
other (loss) income and foreign exchange (loss) gain for the year
ended December 31, 2018, and $50.0 million is included in other
income (loss) for the three months and year ended December 31,
2017. The Teekay Nakilat Joint Venture paid this liability by
releasing a $7.0 million cash deposit it had made with the lessor
and making a $56.0 million cash payment for the balance, which was
based on the GBP/USD foreign currency exchange rates at the time
the payments were made.
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
|
|
|
|
|
As at December 31, |
As at September 30, |
As at December 31, |
|
2018 |
2018 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
ASSETS |
|
Cash and
cash equivalents - Teekay Parent |
220,238 |
|
191,137 |
|
129,772 |
|
Cash and
cash equivalents - Teekay LNG |
149,014 |
|
139,854 |
|
244,241 |
|
Cash and
cash equivalents - Teekay Tankers |
54,917 |
|
54,361 |
|
71,439 |
|
Other
current assets |
420,724 |
|
295,741 |
|
305,525 |
|
Restricted
cash - Teekay Parent |
2,030 |
|
2,057 |
|
7,257 |
|
Restricted
cash - Teekay LNG |
73,850 |
|
66,588 |
|
95,194 |
|
Restricted
cash - Teekay Tankers |
5,590 |
|
4,466 |
|
4,271 |
|
Assets held
for sale |
— |
|
28,482 |
|
33,671 |
|
Vessels and
equipment - Teekay Parent |
304,049 |
|
312,081 |
|
337,318 |
|
Vessels and
equipment - Teekay LNG |
3,242,581 |
|
3,060,856 |
|
2,461,219 |
|
Vessels and
equipment - Teekay Tankers |
1,883,561 |
|
1,897,920 |
|
1,965,514 |
|
Advances on
newbuilding contracts |
86,942 |
|
172,248 |
|
444,493 |
|
Investment
in equity-accounted investees |
1,131,534 |
|
1,151,343 |
|
1,130,198 |
|
Net
investment in direct financing leases |
575,163 |
|
577,696 |
|
495,990 |
|
Other
non-current assets |
120,014 |
|
259,725 |
|
229,631 |
|
Intangible
assets |
77,773 |
|
81,542 |
|
93,014 |
|
Goodwill |
43,690 |
|
43,690 |
|
43,690 |
|
Total Assets |
8,391,670 |
|
8,339,787 |
|
8,092,437 |
|
LIABILITIES AND EQUITY |
|
|
Accounts
payable and accrued liabilities and other |
254,380 |
|
211,247 |
|
320,339 |
|
Advances
from affiliates |
75,292 |
|
73,109 |
|
49,100 |
|
Current
portion of long-term debt - Teekay Parent |
— |
|
— |
|
81,748 |
|
Current
portion of long-term debt - Teekay LNG |
217,120 |
|
236,410 |
|
659,350 |
|
Current
portion of long-term debt - Teekay Tankers |
127,132 |
|
119,682 |
|
173,972 |
|
Long-term
debt - Teekay Parent |
614,341 |
|
643,715 |
|
585,663 |
|
Long-term
debt - Teekay LNG |
3,051,212 |
|
2,976,800 |
|
2,150,191 |
|
Long-term
debt - Teekay Tankers |
983,563 |
|
984,106 |
|
927,238 |
|
Derivative
liabilities |
68,557 |
|
44,753 |
|
128,811 |
|
Other
long-term liabilities |
133,045 |
|
130,052 |
|
136,369 |
|
Equity: |
|
|
|
Non-controlling interests |
2,058,037 |
|
2,077,492 |
|
2,102,465 |
|
Shareholders of Teekay |
808,991 |
|
842,421 |
|
777,191 |
|
Total Liabilities and Equity |
8,391,670 |
|
8,339,787 |
|
8,092,437 |
|
|
|
|
|
Net debt -
Teekay Parent(1) |
392,073 |
|
450,521 |
|
530,382 |
|
Net debt -
Teekay LNG(1) |
3,045,468 |
|
3,006,768 |
|
2,470,106 |
|
Net debt - Teekay Tankers(1) |
1,050,188 |
|
1,044,961 |
|
1,025,500 |
|
|
|
|
|
|
|
|
(1) 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, |
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
Cash, cash equivalents
and restricted cash provided by (used for) |
|
|
OPERATING
ACTIVITIES |
|
|
Net loss |
(57,747 |
) |
(529,072 |
) |
Depreciation and
amortization |
276,307 |
|
485,829 |
|
Unrealized gain on
derivative instruments |
(34,570 |
) |
(95,556 |
) |
Write-down and loss on
sales of vessels |
53,693 |
|
270,743 |
|
Equity (income) loss,
net of dividends received |
(44,312 |
) |
87,602 |
|
Income tax expense |
19,724 |
|
12,232 |
|
Loss on deconsolidation
of Teekay Offshore |
7,070 |
|
104,788 |
|
Foreign exchange (gain)
loss and other |
21,414 |
|
153,766 |
|
Change in operating
assets and liabilities |
(14,754 |
) |
104,831 |
|
Expenditures for dry
docking |
(44,690 |
) |
(50,899 |
) |
Net operating cash flow (1) |
182,135 |
|
544,264 |
|
FINANCING
ACTIVITIES |
|
|
Proceeds from issuance
of long-term debt, net of issuance costs |
1,325,482 |
|
1,007,010 |
|
Prepayments of
long-term debt |
(771,827 |
) |
(831,901 |
) |
Scheduled repayments of
long-term debt and settlement of related swaps |
(671,803 |
) |
(713,278 |
) |
Proceeds from financing
related to sales-leaseback of vessels |
611,388 |
|
809,935 |
|
Repayments of
obligations related to capital leases |
(74,680 |
) |
(46,090 |
) |
Net proceeds from
equity issuances of subsidiaries |
— |
|
172,930 |
|
Net proceeds from
equity issuances of Teekay Corporation |
103,655 |
|
25,636 |
|
Acquisition of shares
in Teekay Tankers |
— |
|
(19,444 |
) |
Distributions paid from
subsidiaries to non-controlling interests |
(64,676 |
) |
(103,150 |
) |
Cash dividends
paid |
(22,082 |
) |
(18,977 |
) |
Other financing
activities |
(671 |
) |
1,638 |
|
Net financing cash flow |
434,786 |
|
284,309 |
|
INVESTING
ACTIVITIES |
|
|
Expenditures for
vessels and equipment |
(693,792 |
) |
(1,054,052 |
) |
Proceeds from sale of
vessels and equipment |
28,837 |
|
73,712 |
|
Investment in
equity-accounted investments |
(41,018 |
) |
(98,774 |
) |
Advances to joint
ventures and joint venture partners |
(24,934 |
) |
(12,946 |
) |
Proceeds from sale of
equity-accounted investment |
81,823 |
|
— |
|
Cash of Teekay Offshore
upon deconsolidation, net of proceeds received |
— |
|
(45,447 |
) |
Direct financing lease
payments received |
10,882 |
|
17,422 |
|
Cash of Tankers
Investments Ltd. upon acquisition |
— |
|
30,831 |
|
Cash of transferred
subsidiaries on sale, net of proceeds received |
(25,254 |
) |
— |
|
Other investing
activities |
— |
|
7,613 |
|
Net investing cash flow |
(663,456 |
) |
(1,081,641 |
) |
Decrease in
cash, cash equivalents and restricted cash |
(46,535 |
) |
(253,068 |
) |
Cash, cash equivalents
and restricted cash, beginning of the year |
552,174 |
|
805,242 |
|
Cash, cash equivalents and restricted cash, end of the
year |
505,639 |
|
552,174 |
|
|
|
|
|
|
(1) The decrease in operating cash flow is due
to the deconsolidation of Teekay Offshore on September 25,
2017.
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, |
|
|
2018 |
2018 |
2018 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
$
Per |
|
$
Per |
|
$
Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
Net
loss – GAAP basis |
(6,357 |
) |
|
(1,763 |
) |
|
(57,747 |
) |
|
Adjust for:
Net income attributable to |
|
|
|
|
|
|
non-controlling interests |
(11,996 |
) |
|
(10,242 |
) |
|
(21,490 |
) |
|
Net
loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(18,353 |
) |
(0.18 |
) |
(12,005 |
) |
(0.12 |
) |
(79,237 |
) |
(0.79 |
) |
(Subtract) add specific items affecting net
loss |
|
|
|
|
|
|
|
Unrealized losses
(gains) from |
|
|
|
|
|
|
|
derivative
instruments(2) |
46,140 |
|
0.46 |
|
(20,860 |
) |
(0.21 |
) |
(30,930 |
) |
(0.31 |
) |
|
Foreign exchange losses
(gains)(3) |
4,526 |
|
0.04 |
|
(5,805 |
) |
(0.06 |
) |
(16,723 |
) |
(0.17 |
) |
|
Write-down and loss
(gain) on sale of vessels and other assets(4) |
3,697 |
|
0.04 |
|
(58 |
) |
— |
|
63,635 |
|
0.64 |
|
|
Restructuring
charges(5) |
— |
|
— |
|
1,080 |
|
0.01 |
|
2,611 |
|
0.03 |
|
|
Loss on deconsolidation
of Teekay Offshore |
— |
|
— |
|
— |
|
— |
|
7,070 |
|
0.07 |
|
|
Realized loss on
interest rate swap terminations and amendments(6) |
— |
|
— |
|
14,560 |
|
0.15 |
|
14,560 |
|
0.15 |
|
|
Other(7) |
(12,526 |
) |
(0.12 |
) |
6,868 |
|
0.07 |
|
5,482 |
|
0.06 |
|
|
Non-controlling interests’ share of items above(8) |
(25,498 |
) |
(0.26 |
) |
4,842 |
|
0.05 |
|
(19,739 |
) |
(0.21 |
) |
Total adjustments |
16,339 |
|
0.16 |
|
627 |
|
0.01 |
|
25,966 |
|
0.26 |
|
Adjusted net loss attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(2,014 |
) |
(0.02 |
) |
(11,378 |
) |
(0.11 |
) |
(53,271 |
) |
(0.53 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Basic per share amounts.
(2) Reflects the unrealized losses (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 (loss) from joint ventures, and hedge ineffectiveness
from derivative instruments designated as hedges for accounting
purposes.
(3) 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.
(4) Includes the Company's proportionate share of
write-downs and gain (loss) on sale of vessels and other operating
assets in equity-accounted joint ventures and the consolidated
write-downs and gain (loss) on sale of vessels and other operating
assets. Refer to footnotes (2) and (4) of the summary consolidated
statements of loss for the three months and year ended December 31,
2018.
(5) Restructuring charges for the year ended December 31,
2018, primarily relate to severance costs resulting from
reorganization and realignment of resources of certain of the
Company's business development, marine solutions and fleet
operations functions better to respond to the changing business
environment, and the Company's proportionate share of restructuring
charges related to severance costs from crew reduction on
the Petrojarl Varg FPSO in Teekay Offshore.
(6) Refer to footnotes (3) and (4) of the summary
consolidated statements of loss for the three months and year ended
December 31, 2018.
(7) Includes the write-off of prepaid loan costs by Teekay
LNG and Teekay Tankers relating to the refinancing of certain
vessels and a gain on bond repurchases by the Company. Also
refer to footnote (4) of the summary consolidated statements of
loss for more detail on items relating to equity-accounted joint
ventures.
(8) 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.
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
December 31, |
|
|
2017 |
2017 |
|
|
(unaudited) |
(unaudited) |
|
|
|
$
Per |
|
$
Per |
|
|
$ |
Share(1) |
$ |
Share(1) |
Net
loss – GAAP basis |
(32,239 |
) |
|
(529,072 |
) |
|
Adjust for:
Net loss attributable to |
|
|
|
|
non-controlling interests |
6,953 |
|
|
365,796 |
|
|
Net
loss attributable to |
|
|
|
|
|
shareholders of Teekay |
(25,286 |
) |
(0.29 |
) |
(163,276 |
) |
(1.89 |
) |
Add
(subtract) specific items affecting net |
|
|
|
|
|
loss: |
|
|
|
|
|
Unrealized gains from
derivative instruments(2) |
(15,785 |
) |
(0.18 |
) |
(20,594 |
) |
(0.24 |
) |
|
Foreign exchange
losses(3) |
1,536 |
|
0.02 |
|
9,437 |
|
0.11 |
|
|
Write-down and (gain)
loss on sale of vessels and other operating
assets(4) |
3,565 |
|
0.04 |
|
322,390 |
|
3.74 |
|
|
Restructuring
(recoveries) charges(5) |
(52 |
) |
— |
|
5,468 |
|
0.06 |
|
|
Realized loss on
interest rate swap amendments |
— |
|
— |
|
5,347 |
|
0.06 |
|
|
Loss on deconsolidation
of Teekay Offshore(6) |
1,600 |
|
0.02 |
|
104,788 |
|
1.21 |
|
|
Tax indemnification
guarantee liability(7) |
50,000 |
|
0.57 |
|
50,000 |
|
0.57 |
|
|
Other (8) |
5,694 |
|
0.07 |
|
31,955 |
|
0.37 |
|
|
Non-controlling interests’ share of items above(9) |
(30,772 |
) |
(0.36 |
) |
(464,469 |
) |
(5.37 |
) |
Total adjustments |
15,786 |
|
0.18 |
|
44,322 |
|
0.51 |
|
Adjusted net loss attributable to |
|
|
|
|
|
shareholders of Teekay |
(9,500 |
) |
(0.11 |
) |
(118,954 |
) |
(1.38 |
) |
|
|
|
|
|
|
|
|
|
|
(1) Basic per share amounts.
(2) 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.
(3) Foreign currency exchange losses primarily relate to
the Company’s debt denominated in Euros and NOK and unrealized
losses on cross currency swaps used to economically hedge the
principal and interest on NOK bonds. Nearly all of the Company’s
foreign currency exchange gains and losses are unrealized.
(4) 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, and
Teekay LNG's impairments of two Suezmax tankers, the Teide Spirit
and Toledo Spirit.
(5) 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.
(6) Refer to footnote (5) of the summary consolidated
statements of loss included in this release for further
details.
(7) Refer to footnote (6) of the summary consolidated
statements of loss included in this release for further
details.
(8) 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, 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.
(9) 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 also includes the recognition of previously
deferred gains of $349.6 million.
Teekay CorporationAppendix B -
Supplemental Financial InformationSummary
Statement of Income (Loss) for the Three Months Ended
December 31, 2018(in thousands of U.S.
dollars)(unaudited)
|
|
|
|
|
|
|
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
Revenues |
149,805 |
|
239,724 |
|
103,562 |
|
(1,559 |
) |
491,532 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(6,529 |
) |
(110,602 |
) |
(271 |
) |
203 |
|
(117,199 |
) |
Vessel
operating expenses |
(30,454 |
) |
(51,323 |
) |
(81,836 |
) |
1,345 |
|
(162,268 |
) |
Time-charter hire expense |
(5,980 |
) |
(4,841 |
) |
(14,613 |
) |
— |
|
(25,434 |
) |
Depreciation and amortization |
(33,079 |
) |
(29,916 |
) |
(8,074 |
) |
— |
|
(71,069 |
) |
General and
administrative expenses |
(7,809 |
) |
(11,836 |
) |
(7,117 |
) |
11 |
|
(26,751 |
) |
|
|
|
|
|
|
Income (loss) from vessel operations |
65,954 |
|
31,206 |
|
(8,349 |
) |
— |
|
88,811 |
|
|
|
|
|
|
|
Interest
expense |
(39,511 |
) |
(16,987 |
) |
(16,134 |
) |
— |
|
(72,632 |
) |
Interest
income |
964 |
|
311 |
|
1,375 |
|
— |
|
2,650 |
|
Realized
and unrealized loss on |
|
|
|
|
|
|
non-designated
derivative instruments |
(11,540 |
) |
(1,693 |
) |
(19,600 |
) |
— |
|
(32,833 |
) |
Equity
income |
949 |
|
955 |
|
17,452 |
|
— |
|
19,356 |
|
Equity in
earnings of subsidiaries(2) |
— |
|
— |
|
9,541 |
|
(9,541 |
) |
— |
|
Income tax
expense |
(42 |
) |
(2,498 |
) |
(4,187 |
) |
— |
|
(6,727 |
) |
Foreign
exchange (loss) gain |
(7,244 |
) |
208 |
|
1,272 |
|
— |
|
(5,764 |
) |
Other income – net |
505 |
|
— |
|
277 |
|
— |
|
782 |
|
Net
income (loss) |
10,035 |
|
11,502 |
|
(18,353 |
) |
(9,541 |
) |
(6,357 |
) |
Net income
attributable to |
|
|
|
|
|
|
non-controlling interests(3) |
(2,666 |
) |
— |
|
— |
|
(9,330 |
) |
(11,996 |
) |
Net
income (loss) attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities |
7,369 |
|
11,502 |
|
(18,353 |
) |
(18,871 |
) |
(18,353 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Consolidation Adjustments column includes adjustments
which eliminate transactions between Teekay LNG, Teekay Tankers and
Teekay Parent.
(2) Teekay Corporation’s proportionate share of the net
earnings of its publicly-traded subsidiaries.
(3) Net income attributable to non-controlling interests
in the Teekay LNG column represents the joint venture partners’
share of the net income of its respective consolidated joint
ventures. Net income attributable to non-controlling interest
in the Consolidation Adjustments column represents the public’s
share of the net income of Teekay’s publicly-traded consolidated
subsidiaries.
Teekay CorporationAppendix B -
Supplemental Financial InformationSummary
Statement of Income (Loss) for the Year
EndedDecember 31, 2018(in thousands
of U.S. dollars)(unaudited)
|
|
|
|
|
|
|
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
Revenues |
510,762 |
|
755,763 |
|
451,659 |
|
(10,426 |
) |
1,707,758 |
|
|
|
|
|
|
|
|
Voyage
expenses |
(28,237 |
) |
(360,576 |
) |
(842 |
) |
768 |
|
(388,887 |
) |
Vessel
operating expenses |
(117,658 |
) |
(209,131 |
) |
(310,925 |
) |
240 |
|
(637,474 |
) |
Time-charter hire expense |
(7,670 |
) |
(19,538 |
) |
(68,668 |
) |
9,418 |
|
(86,458 |
) |
Depreciation and amortization |
(124,378 |
) |
(118,514 |
) |
(33,415 |
) |
— |
|
(276,307 |
) |
General and
administrative expenses |
(28,512 |
) |
(39,775 |
) |
(28,268 |
) |
— |
|
(96,555 |
) |
Write-down
and (loss) gain on sale of vessels |
(53,863 |
) |
170 |
|
— |
|
— |
|
(53,693 |
) |
Restructuring charges |
(1,845 |
) |
(1,195 |
) |
(1,025 |
) |
— |
|
(4,065 |
) |
|
|
|
|
|
|
|
Income from vessel operations |
148,599 |
|
7,204 |
|
8,516 |
|
— |
|
164,319 |
|
|
|
|
|
|
|
Interest
expense |
(128,263 |
) |
(58,653 |
) |
(67,351 |
) |
141 |
|
(254,126 |
) |
Interest
income |
3,760 |
|
879 |
|
4,027 |
|
(141 |
) |
8,525 |
|
Realized
and unrealized gain (loss) on |
|
|
|
|
|
|
non-designated
derivative instruments |
3,278 |
|
3,032 |
|
(21,162 |
) |
— |
|
(14,852 |
) |
Equity
income |
53,546 |
|
1,220 |
|
6,288 |
|
— |
|
61,054 |
|
Equity in
earnings of subsidiaries(2) |
— |
|
— |
|
3,627 |
|
(3,627 |
) |
— |
|
Income tax
expense |
(3,213 |
) |
(9,412 |
) |
(7,099 |
) |
— |
|
(19,724 |
) |
Foreign
exchange gain (loss) |
1,371 |
|
3,132 |
|
4,036 |
|
(2,399 |
) |
6,140 |
|
Loss on
deconsolidation of Teekay Offshore |
— |
|
— |
|
(7,070 |
) |
— |
|
(7,070 |
) |
Other (loss) income – net |
(1,413 |
) |
50 |
|
(3,049 |
) |
2,399 |
|
(2,013 |
) |
Net
income (loss) |
77,665 |
|
(52,548 |
) |
(79,237 |
) |
(3,627 |
) |
(57,747 |
) |
Net income
attributable to |
|
|
|
|
|
|
non-controlling interests(3) |
(13,506 |
) |
— |
|
— |
|
(7,984 |
) |
(21,490 |
) |
Net
income (loss) attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities |
64,159 |
|
(52,548 |
) |
(79,237 |
) |
(11,611 |
) |
(79,237 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Consolidation Adjustments column includes adjustments
which eliminate transactions between Teekay LNG, Teekay Tankers and
Teekay Parent.
(2) Teekay Corporation’s proportionate share of the net
earnings of its publicly-traded subsidiaries.
(3) Net income attributable to non-controlling interests
in the Teekay LNG column represents the joint venture partners’
share of the net income of its respective consolidated joint
ventures. Net income attributable to non-controlling interest
in the Consolidation Adjustments column represents the public’s
share of the net income of Teekay’s publicly-traded consolidated
subsidiaries.
Teekay CorporationAppendix C -
Supplemental Financial InformationTeekay Parent
Summary Operating ResultsFor the Three Months
Ended December 31, 2018(in thousands of U.S.
dollars)(unaudited)
|
|
|
|
Teekay |
|
|
|
Corporate |
Parent |
|
FPSOs |
Other(1) |
G&A |
Total |
|
|
|
|
|
Revenues |
57,754 |
|
45,808 |
|
— |
|
103,562 |
|
|
|
|
|
|
Voyage
expenses |
(225 |
) |
(46 |
) |
— |
|
(271 |
) |
Vessel
operating expenses |
(38,763 |
) |
(43,073 |
) |
— |
|
(81,836 |
) |
Time-charter hire expense |
(11,220 |
) |
(3,393 |
) |
— |
|
(14,613 |
) |
Depreciation and amortization |
(8,035 |
) |
(39 |
) |
— |
|
(8,074 |
) |
General and
administrative expenses |
(1,881 |
) |
(102 |
) |
(5,134 |
) |
(7,117 |
) |
Loss from vessel operations |
(2,370 |
) |
(845 |
) |
(5,134 |
) |
(8,349 |
) |
|
|
|
|
|
Reconciliation of income (loss) from vessel operations to
cash flow from vessel operations |
|
|
|
|
|
Loss from
vessel operations |
(2,370 |
) |
(845 |
) |
(5,134 |
) |
(8,349 |
) |
Depreciation and amortization |
8,035 |
|
39 |
|
— |
|
8,074 |
|
Amortization of in-process revenue |
|
|
|
|
contracts and other |
(1,928 |
) |
1,528 |
|
— |
|
(400 |
) |
CFVO - Teekay Parent (2) |
3,737 |
|
722 |
|
(5,134 |
) |
(675 |
) |
|
|
|
|
|
|
|
|
|
(1) Includes the results of two chartered-in FSO units
owned by Teekay Offshore.
(2) 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. For the three months ended December 31,
2018, Teekay Parent received cash distributions from Teekay LNG
totaling $3.8 million. Distributions received for a given quarter
consist of the amount of distributions relating to such quarter but
received by Teekay Parent in the following quarter. The
distributions and dividends received by Teekay Parent include,
among others, those made with respect to its general partner
interests in Teekay LNG. Please refer to Appendix D this
release for further details.
Teekay CorporationAppendix D -
Reconciliation of Non-GAAP Financial
MeasuresTeekay Parent Free Cash Flow(in
thousands of U.S. dollars, except share and per share data)
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
|
|
(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 |
|
1,698 |
|
6,200 |
|
|
GP
interests |
|
|
|
|
|
|
Teekay LNG |
227 |
|
228 |
|
228 |
|
911 |
|
912 |
|
|
Teekay
Offshore(3) (6) |
— |
|
15 |
|
16 |
|
47 |
|
399 |
|
|
Other
Dividends |
|
|
|
|
|
|
Teekay
Tankers(2)(4) |
— |
|
— |
|
2,319 |
|
— |
|
6,975 |
|
|
Teekay Offshore(5)(6) |
— |
|
— |
|
— |
|
— |
|
2,003 |
|
Total
Daughter Entity Distributions to Teekay Parent |
3,756 |
|
4,338 |
|
6,658 |
|
16,772 |
|
30,605 |
|
Corporate general and administrative
expenses |
(5,134 |
) |
(4,343 |
) |
(3,989 |
) |
(19,140 |
) |
(12,767 |
) |
Total Teekay Parent GPCO Cash Flow |
(1,378 |
) |
(5 |
) |
2,669 |
|
(2,368 |
) |
17,838 |
|
|
|
|
|
|
|
|
TEEKAY PARENT OPCO CASH FLOW |
|
|
|
|
|
Teekay Parent cash flow from vessel
operations(7) |
|
|
|
|
|
|
FPSOs |
3,737 |
|
18,795 |
|
13,085 |
|
48,347 |
|
3,265 |
|
|
Conventional
Tankers |
— |
|
— |
|
(4,866 |
) |
— |
|
(13,390 |
) |
|
Other |
722 |
|
1,028 |
|
4,893 |
|
6,783 |
|
(6,149 |
) |
Teekay Parent OPCO Cash Flow(8) |
4,459 |
|
19,823 |
|
13,112 |
|
55,130 |
|
(16,274 |
) |
|
|
|
|
|
|
Teekay Parent adjusted cash flow from vessel
operations |
3,081 |
|
19,818 |
|
15,781 |
|
52,762 |
|
1,564 |
|
|
|
|
|
|
|
Net
interest expense(9) |
(14,081 |
) |
(14,977 |
) |
(16,502 |
) |
(61,335 |
) |
(54,716 |
) |
|
|
|
|
|
|
TOTAL TEEKAY PARENT FREE CASH
FLOW |
(11,000 |
) |
4,841 |
|
(721 |
) |
(8,573 |
) |
(53,152 |
) |
Weighted-average number of common shares -
Basic |
100,435,155 |
|
100,435,045 |
|
86,641,584 |
|
99,670,176 |
|
86,335,473 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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
quarters ended September 30, 2017, June 30, 2017 and March 31 2017
were paid-in-kind in the form of new Teekay Offshore common
units.
(2) Common share/unit dividend/distribution cash flows to
Teekay Parent are based on Teekay Parent’s ownership on the
ex-dividend date for the respective publicly-traded subsidiary and
equity-accounted investment in Teekay Offshore for the periods as
follows:
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
|
December
31, |
September
30, |
December
31, |
December
31, |
December
31, |
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
|
|
(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 |
|
$ |
0.03 |
|
$ |
0.14 |
|
Common units owned by |
|
|
|
|
|
|
|
|
|
|
Teekay
Parent |
|
56,587,484 |
|
|
56,587,484 |
|
|
56,587,484 |
|
|
56,587,484 |
|
|
44,285,041 |
|
Total distribution |
$ |
— |
|
$ |
565,875 |
|
$ |
565,875 |
|
$ |
1,697,625 |
|
$ |
6,199,906 |
|
Teekay Tankers |
|
|
|
|
|
|
|
|
|
|
Dividend per share |
$ |
— |
|
$ |
— |
|
$ |
0.03 |
|
$ |
— |
|
$ |
0.12 |
|
Shares owned by Teekay Parent(3) |
|
77,298,441 |
|
|
77,298,441 |
|
|
77,298,441 |
|
|
77,298,441 |
|
|
58,119,024 |
|
Total dividend |
$ |
— |
|
$ |
— |
|
$ |
2,318,953 |
|
$ |
— |
|
$ |
6,974,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) In July 2018, Brookfield exercised its option to
acquire an additional 2% ownership interest in Teekay Offshore's
general partner from Teekay.
(4) 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 Tankers' Board eliminated the minimum
quarters dividend; however, the variable portion of the dividend
policy was maintained.
(5) 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.
(6) For the fourth quarter of 2017 and the first three
quarters of 2018, Teekay Offshore paid a quarterly distribution of
$0.01 per common unit. Commencing with the distribution for the
fourth quarter of 2018, Teekay Offshore's Board reduced the
quarterly distribution to zero.
(7) Please refer to Appendices C and E for additional
financial information on Teekay Parent’s cash flow from vessel
operations.
(8) Excludes corporate general and administrative expenses
relating to Teekay Parent GPCO Cash Flow.
(9) 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, |
|
|
2018 |
2018 |
2017 |
|
(unaudited) |
(unaudited) |
(unaudited) |
Income from
vessel operations |
88,811 |
|
55,082 |
|
66,655 |
|
Depreciation and amortization |
71,069 |
|
69,967 |
|
63,116 |
|
Amortization of in-process revenue contracts and other |
(2,609 |
) |
(2,412 |
) |
(3,655 |
) |
Realized
loss from the settlements of non-designated |
|
|
|
|
derivative
instruments |
— |
|
— |
|
(45 |
) |
Write-down
and loss on sale of vessels |
— |
|
2,201 |
|
489 |
|
Cash flow
from time-charter contracts, net of revenue accounted for |
|
|
|
|
as direct
finance leases |
2,475 |
|
2,823 |
|
2,142 |
|
CFVO - Consolidated |
159,746 |
|
127,661 |
|
128,702 |
|
CFVO - Equity Investments (see Appendix
E) |
86,929 |
|
68,736 |
|
54,884 |
|
CFVO – Total |
246,675 |
|
196,397 |
|
183,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, |
December 31, |
|
|
2018 |
2017 |
|
(unaudited) |
(unaudited) |
Income from
vessel operations |
164,319 |
|
6,700 |
|
Depreciation and amortization |
276,307 |
|
485,829 |
|
Amortization of in-process revenue contracts and other |
(10,217 |
) |
(22,348 |
) |
Realized
gain from the settlements of non-designated |
|
|
|
derivative
instruments |
— |
|
2,047 |
|
Write-down
and loss on sale of vessels |
53,693 |
|
270,743 |
|
Termination
of Arendal Spirit UMS charter contract |
— |
|
8,888 |
|
Cash flow
from time-charter contracts, net of revenue accounted for |
|
|
|
as direct
finance leases |
11,082 |
|
18,737 |
|
CFVO - Consolidated |
495,184 |
|
770,596 |
|
CFVO - Equity Investments (see Appendix
E) |
280,449 |
|
180,522 |
|
CFVO – Total |
775,633 |
|
951,118 |
|
|
|
|
|
|
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, 2018 |
September 30, 2018 |
December 31, 2017 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(1) |
|
|
|
|
|
|
|
|
Revenues |
601,685 |
|
136,738 |
|
481,760 |
|
115,064 |
|
443,685 |
|
105,986 |
|
Vessel and
other operating expenses |
(238,291 |
) |
(53,756 |
) |
(225,486 |
) |
(48,929 |
) |
(230,168 |
) |
(54,027 |
) |
Depreciation and amortization |
(129,669 |
) |
(28,917 |
) |
(127,335 |
) |
(27,454 |
) |
(125,368 |
) |
(28,329 |
) |
Write-down
and (loss) gain on sale of |
|
|
|
|
|
|
|
vessels |
(26,292 |
) |
(3,697 |
) |
350 |
|
49 |
|
(10,852 |
) |
(5,479 |
) |
Restructuring charges |
379 |
|
53 |
|
(1,899 |
) |
(267 |
) |
— |
|
— |
|
Income from
vessel operations of |
|
|
|
|
|
|
|
equity-accounted
vessels |
207,812 |
|
50,421 |
|
127,390 |
|
38,463 |
|
77,297 |
|
18,151 |
|
Interest
expense |
(103,802 |
) |
(28,380 |
) |
(95,370 |
) |
(25,899 |
) |
(73,187 |
) |
(18,909 |
) |
Realized
and unrealized (loss) gain on |
|
|
|
|
|
|
|
on derivative
instruments |
(68,208 |
) |
(16,625 |
) |
13,266 |
|
2,633 |
|
9,494 |
|
2,563 |
|
(Loss) gain
on sale of equity-accounted |
|
|
|
|
|
|
|
investments(2) |
— |
|
15,302 |
|
— |
|
2,234 |
|
— |
|
— |
|
Other – net |
(14,651 |
) |
(1,362 |
) |
(25,237 |
) |
(3,687 |
) |
(12,156 |
) |
(2,776 |
) |
Equity income (loss) of equity-
accounted vessels |
21,151 |
|
19,356 |
|
20,049 |
|
13,744 |
|
1,448 |
|
(971 |
) |
Income from
vessel operations of |
|
|
|
|
|
|
|
equity-accounted
vessels |
207,812 |
|
50,421 |
|
127,390 |
|
38,463 |
|
77,297 |
|
18,151 |
|
Depreciation and amortization |
129,669 |
|
28,917 |
|
127,335 |
|
27,454 |
|
125,368 |
|
28,329 |
|
Write-down
and loss (gain) on sale of |
|
|
|
|
|
|
|
vessels |
26,292 |
|
3,697 |
|
(350 |
) |
(49 |
) |
10,852 |
|
5,479 |
|
Realized
(loss) gain from the settlement |
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
forward contracts |
(1,470 |
) |
(207 |
) |
(747 |
) |
(105 |
) |
490 |
|
69 |
|
Cash flow
from time-charter contracts, |
|
|
|
|
|
|
|
net of revenue
accounted for as |
|
|
|
|
|
|
|
direct finance
leases |
14,057 |
|
5,066 |
|
14,971 |
|
5,048 |
|
11,914 |
|
3,984 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
contracts
and other |
(1,804 |
) |
(965 |
) |
(12,758 |
) |
(2,075 |
) |
(5,991 |
) |
(1,128 |
) |
Cash flow from vessel operations |
|
|
|
|
|
|
|
of equity-accounted vessels(3) |
374,556 |
|
86,929 |
|
255,841 |
|
68,736 |
|
219,930 |
|
54,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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.
(2) For the three months ended December
31, 2018, includes a gain on the sale of Teekay's 43.5% stake in
Magnora in November 2018. For the three months ended
September 30, 2018, includes a gain on the sale of a 2% ownership
interest in Teekay Offshore's general partner to Brookfield in July
2018.
(3) CFVO from equity-accounted vessels
represents the Company’s proportionate share of CFVO from its
equity-accounted vessels and other investments.
|
|
|
|
|
Year Ended |
|
|
December 31, 2018 |
December 31, 2017 |
|
|
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion (1) |
|
|
|
|
|
|
Revenues |
2,008,308 |
|
470,534 |
|
997,718 |
|
333,011 |
|
Vessel and
other operating expenses |
(928,211 |
) |
(203,734 |
) |
(495,796 |
) |
(162,542 |
) |
Depreciation and amortization |
(511,113 |
) |
(111,019 |
) |
(254,007 |
) |
(82,706 |
) |
Write-down
and loss on sale of |
|
|
|
|
|
vessels |
(114,348 |
) |
(16,277 |
) |
(10,852 |
) |
(5,479 |
) |
Restructuring charges |
(1,520 |
) |
(214 |
) |
— |
|
— |
|
Income from
vessel operations of |
|
|
|
|
|
equity accounted
vessels |
453,116 |
|
139,290 |
|
237,063 |
|
82,284 |
|
Interest
expense |
(361,313 |
) |
(98,731 |
) |
(167,388 |
) |
(57,956 |
) |
Realized
and unrealized gain (loss) on |
|
|
|
|
|
derivative
instruments |
28,512 |
|
5,280 |
|
(34,358 |
) |
(8,199 |
) |
Gain on
sale of equity-accounted |
|
|
|
|
|
investments (2) |
— |
|
21,576 |
|
|
|
Write-down
of equity-accounted investment (3) |
|
|
— |
|
(48,571 |
) |
Other - net |
(40,789 |
) |
(6,361 |
) |
(18,794 |
) |
(4,902 |
) |
Equity income (loss) of equity accounted
vessels |
79,526 |
|
61,054 |
|
16,523 |
|
(37,344 |
) |
Income from
vessel operations of |
|
|
|
|
|
equity accounted
vessels |
453,116 |
|
139,290 |
|
237,063 |
|
82,284 |
|
Depreciation and amortization |
511,113 |
|
111,019 |
|
254,007 |
|
82,706 |
|
Write-down
and loss on sale of vessels |
114,348 |
|
16,277 |
|
10,852 |
|
5,479 |
|
Realized
(loss) gain from the settlement of |
|
|
|
|
|
non-designated foreign
currency |
|
|
|
|
|
forward contracts |
(1,416 |
) |
(199 |
) |
490 |
|
69 |
|
Cash flow
from time-charter contracts, |
|
|
|
|
|
net of revenue
accounted for as direct |
|
|
|
|
|
finance leases |
56,680 |
|
19,486 |
|
40,883 |
|
14,402 |
|
Amortization of in-process revenue |
|
|
|
|
|
contracts
and other |
(26,779 |
) |
(5,424 |
) |
(13,138 |
) |
(4,418 |
) |
Cash flow from vessel operations |
|
|
|
|
|
of equity accounted vessels (4) |
1,107,062 |
|
280,449 |
|
530,157 |
|
180,522 |
|
|
|
|
|
|
|
|
|
|
|
(1) 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.
(2) For the year ended December 31, 2018,
includes a gain on the sale of Teekay's 43.5% stake in Magnora in
November 2018, a gain on the sale of a 2% ownership interest in
Teekay Offshore's general partner to Brookfield in July 2018, a
loss on the sale of Teekay's investment in KT Maritime (Pty) Ltd.
and a gain on the sale of Teekay LNG's 50% ownership interest in
the Excelsior Joint Venture.
(3) For the year ended December 31, 2017,
includes the write-downs of the Company's and Teekay Tankers'
equity investments in TIL.
(4) 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, 2018 |
|
|
(unaudited) |
|
|
|
|
|
|
|
Teekay |
|
|
|
|
Conventional |
|
Corporate |
Parent |
|
|
FPSOs |
Tankers |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent income (loss) from |
|
|
|
|
|
|
|
|
|
|
vessel operations |
|
12,905 |
|
|
— |
|
|
1,688 |
|
(4,343 |
) |
|
10,250 |
|
Depreciation and amortization |
|
8,032 |
|
|
— |
|
|
102 |
|
— |
|
|
8,134 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
|
|
|
contracts and
other |
|
(2,142 |
) |
|
— |
|
|
(762 |
) |
— |
|
|
(2,904 |
) |
Cash flow from vessel operations |
|
|
|
|
|
|
|
|
|
|
– Teekay Parent |
|
18,795 |
|
|
— |
|
|
1,028 |
|
(4,343 |
) |
|
15,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, 2017 |
|
|
(unaudited) |
|
|
|
|
|
|
|
Teekay |
|
|
|
|
Conventional |
|
Corporate |
Parent |
|
|
FPSOs |
Tankers |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent income (loss) from |
|
|
|
|
|
|
|
|
|
|
vessel operations |
|
6,228 |
|
|
(4,866 |
) |
|
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
foreign currency |
|
|
|
|
|
|
|
|
|
|
derivative instruments |
|
29 |
|
|
— |
|
|
— |
|
— |
|
|
29 |
|
Cash flow from vessel operations |
|
|
|
|
|
|
|
|
|
|
– Teekay Parent |
|
13,085 |
|
|
(4,866 |
) |
|
4,893 |
|
(3,989 |
) |
|
9,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2018 |
|
|
(unaudited) |
|
|
|
|
|
|
|
Teekay |
|
|
|
|
Conventional |
|
Corporate |
Parent |
|
|
FPSOs |
Tankers |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent income (loss) from |
|
|
|
|
|
|
|
|
|
|
vessel operations |
|
22,958 |
|
|
— |
|
|
4,698 |
|
(19,140 |
) |
|
8,516 |
|
Depreciation and amortization |
|
33,254 |
|
|
— |
|
|
161 |
|
— |
|
|
33,415 |
|
Write-down
of vessels |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
|
|
|
contracts and
other |
|
(7,865 |
) |
|
— |
|
|
1,924 |
|
— |
|
|
(5,941 |
) |
Realized
gains from the settlements |
|
|
|
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
|
|
|
derivative instruments |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
Cash flow from vessel operations |
|
|
|
|
|
|
|
|
|
|
– Teekay Parent |
|
48,347 |
|
|
— |
|
|
6,783 |
|
(19,140 |
) |
|
35,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2017 |
|
|
(unaudited) |
|
|
|
|
|
|
|
Teekay |
|
|
|
|
Conventional |
|
Corporate |
Parent |
|
|
FPSOs |
Tankers |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
|
Teekay
Parent loss from vessel |
|
|
|
|
|
|
|
|
|
|
operations |
|
(256,758 |
) |
|
(13,390 |
) |
|
(7,510 |
) |
(12,767 |
) |
|
(290,425 |
) |
Depreciation and amortization |
|
60,560 |
|
|
— |
|
|
(163 |
) |
— |
|
|
60,397 |
|
Write-down
of vessels |
|
205,659 |
|
|
— |
|
|
— |
|
— |
|
|
205,659 |
|
Amortization of in-process revenue |
|
|
|
|
|
|
|
|
|
|
contracts and
other |
|
(6,223 |
) |
|
— |
|
|
250 |
|
— |
|
|
(5,973 |
) |
Realized
gains from the settlements |
|
|
|
|
|
|
|
|
|
|
of non-designated
foreign currency |
|
|
|
|
|
|
|
|
|
|
derivative instruments |
|
27 |
|
|
— |
|
|
— |
|
— |
|
|
27 |
|
Cash flow from vessel operations |
|
|
|
|
|
|
|
|
|
|
– Teekay Parent |
|
3,265 |
|
|
(13,390 |
) |
|
(7,423 |
) |
(12,767 |
) |
|
(30,315 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2018 |
2018 |
2017 |
2018 |
2017 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Interest
expense |
(72,632 |
) |
(67,343 |
) |
(49,163 |
) |
(254,126 |
) |
(268,400 |
) |
Interest income |
2,650 |
|
2,103 |
|
1,373 |
|
8,525 |
|
6,290 |
|
Interest
expense net of interest income consolidated |
(69,982 |
) |
(65,240 |
) |
(47,790 |
) |
(245,601 |
) |
(262,110 |
) |
Less:
Non-Teekay Parent interest expense net of |
|
|
|
|
|
|
interest income and adjustment |
(55,223 |
) |
(49,651 |
) |
(31,903 |
) |
(182,277 |
) |
(210,163 |
) |
Interest
expense net of interest income - Teekay Parent |
(14,759 |
) |
(15,589 |
) |
(15,887 |
) |
(63,324 |
) |
(51,947 |
) |
Teekay
Parent non-cash accretion |
|
|
|
|
|
on
convertible bond |
969 |
|
966 |
|
— |
|
3,550 |
|
— |
|
Teekay
Parent realized losses |
|
|
|
|
|
on interest rate swaps |
(291 |
) |
(354 |
) |
(615 |
) |
(1,561 |
) |
(2,769 |
) |
Net interest expense - Teekay
Parent |
(14,081 |
) |
(14,977 |
) |
(16,502 |
) |
(61,335 |
) |
(54,716 |
) |
|
|
|
|
|
|
|
|
|
|
|
Forward Looking Statements
This release contains forward-looking statements
(as defined in Section 21E of the Securities Exchange Act of
1934,as amended) which reflect management’s current views with
respect to certain future events and performance, including
statements, among other things, regarding: Teekay Parent’s
delevering and financial flexibility; Teekay Parent’s ability to
refinance its 2020 Bond with a smaller bond; strengthening of the
global tanker market in the second half of 2019 into 2020;
completion of Teekay Tankers’ sale and leaseback transaction and
its effect on Teekay Tankers’ liquidity; strength of the LNG
shipping market through to the end of 2019 and into 2020 and
improving LNG market conditions; Teekay LNG's balanced capital
allocation strategy and its impact on Teekay LNG’s balance sheet,
its ability to maximize equity value for unitholders, including
Teekay Parent through its incentive distribution rights structure;
potential increases in Teekay LNG’s quarterly distributions; and
the timing and amount of future settlement payments to Teekay
Offshore from Petrobras. The following factors are
among those that could cause actual results to differ
materially from the forward-looking statements, which involve risks
and uncertainties, and that should be considered in evaluating any
such statement: market or counterparty reaction to potential action
of Teekay Parent to refinance its 2020 Bond; 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; satisfaction of
closing conditions to Teekay Tankers’ sale and leaseback
transactions; Petrobras’ payment of settlement amounts and of any
potential offsets to such payments; issues with vessel operations;
increased operating expenses; potential project delays or
cancellations; changes in applicable industry laws and regulations
and the timing of implementation of new laws and regulations; the
effects of IMO 2020; the potential for early termination of
long-term contracts of existing vessels; delays in the commencement
of charter or other contracts; the ability to fund remaining
capital commitments and debt maturities; actual levels of quarterly
distributions approved by Teekay LNG's general partner; 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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