Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the third quarter ended September 30, 2020. These
results include the Company’s two publicly-listed consolidated
subsidiaries, Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP) and
Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) (collectively, the
Daughter Entities), and all remaining subsidiaries and
equity-accounted investments. Teekay, together with its
subsidiaries other than the Daughter Entities, is referred to in
this release as Teekay Parent. Please refer to the third quarter
2020 earnings releases of Teekay LNG and Teekay Tankers, which are
available on Teekay's website at www.teekay.com, for additional
information on their respective results.
Financial Summary
| |
Three Months
Ended |
| |
September
30, |
June
30, |
September
30, |
| |
2020 |
2020 |
2019(3) |
| (in thousands of U.S. dollars,
except per share amounts) |
(unaudited) |
(unaudited) |
(unaudited) |
| TEEKAY CORPORATION CONSOLIDATED |
|
|
|
|
| GAAP FINANCIAL COMPARISON |
|
|
|
|
Revenues |
396,517 |
|
482,805 |
|
425,836 |
|
| Income (loss) from vessel
operations |
11,384 |
|
148,504 |
|
(130,389 |
) |
| Equity income |
24,392 |
|
35,343 |
|
21,514 |
|
| Net (loss) income attributable
to |
|
|
|
|
shareholders of Teekay |
(35,407 |
) |
21,723 |
|
(198,178 |
) |
| (Loss) earnings per share attributable to |
|
|
|
|
shareholders of Teekay |
(0.35 |
) |
0.21 |
|
(1.97 |
) |
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Total adjusted revenues (1) |
498,115 |
|
592,658 |
|
511,825 |
|
| Total adjusted EBITDA (1) |
226,998 |
|
315,869 |
|
192,880 |
|
| Adjusted net income (loss) attributable |
|
|
|
|
to shareholders of Teekay (1) |
15,229 |
|
39,713 |
|
(24,070 |
) |
| Adjusted net income (loss) per share |
|
|
|
|
attributable to shareholders of Teekay (1) |
0.15 |
|
0.39 |
|
(0.24 |
) |
| TEEKAY PARENT |
|
|
|
| NON-GAAP FINANCIAL COMPARISON |
|
|
|
| Teekay Parent adjusted EBITDA
(1) |
3,271 |
|
9,694 |
|
(10,068 |
) |
| Total Teekay Parent free cash
flow (1) |
(17,135 |
) |
(1,908 |
) |
(18,782 |
) |
|
(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) |
|
Pro forma
for Teekay Parent's equity margin revolver refinancing completed in
early-October 2020. |
| (3) |
|
Comparative balances relating to the three months ended September
30, 2019 have been recast to reflect results consistent with the
presentation in the Company’s 2019 Annual Report on Form 20-F and
this report for the three and nine months ended September 30,
2020. |
CEO Commentary
“In the third quarter of 2020, we reported
another adjusted profit, with adjusted net income of approximately
$15 million, or $0.15 per share, and total adjusted EBITDA
increased by approximately $34 million, or 18 percent, from the
prior year period,” commented Kenneth Hvid, Teekay’s President and
Chief Executive Officer.
“Teekay LNG, which accounted for approximately
82 percent of our total adjusted EBITDA in the third quarter of
2020, generated strong earnings and cash flows despite a heavy
scheduled drydock program. Teekay Tankers also reported positive
adjusted net income and outperformed a weak spot tanker market on
the strength of fixed-rate charters secured over the past several
quarters at attractive levels. Teekay Parent’s adjusted EBITDA
improved by $13 million in the third quarter of 2020 compared to
the same period of the prior year, primarily as a result of higher
cash distributions from Teekay LNG, lower net general and
administrative expenses, and improved results from the Foinaven and
Hummingbird FPSOs, partially offset by lower earnings from the
Banff FPSO, which ceased production and commenced decommissioning
in June 2020. We are nearing completion of Phase I of the Banff
FPSO decommissioning project, which has been progressing well in
terms of both schedule and budget. The FPSO unit left the field, as
scheduled, in late-August 2020 and is now preparing for green
recycling, with Phase II of the decommissioning project expected to
be carried out in the summer of 2021,” commented Mr. Hvid.
“We have continued to increase our financial
strength across the Teekay group,” added Mr. Hvid. “During the past
year, we have reduced our consolidated net debt by over $940
million, or approximately 22 percent, and increased our
consolidated liquidity from $0.6 billion to $1.1 billion(1) on a
pro forma basis as of September 30, 2020. In addition, at Teekay
Parent, we used some of our cash balances to opportunistically
repurchase $14.4 million in principal amount of our existing
convertible and secured bonds for total consideration of $11.9
million at all-in average prices of 81.55 and 92.23,
respectively.”
Mr. Hvid concluded, “I want to thank our
seafarers and onshore colleagues for their continued dedication to
providing safe and uninterrupted service to our customers
throughout the course of the pandemic. With our balance sheets
continuing to strengthen, extensive contracted revenues at Teekay
LNG and no committed growth capital expenditures or significant
near-term debt maturities, we believe that we have made significant
progress insulating our companies from near-term market volatility
and positioning the Teekay Group to create long-term shareholder
value.”
|
(1) |
|
Pro forma for Teekay Parent's equity margin revolver refinancing
completed on October 1, 2020. |
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
third quarter of 2020 improved compared to the same period of the
prior year, primarily due to: higher revenues from Teekay Tankers
as a result of several fixed-rate charters secured during the past
year at higher rates and higher average spot tanker rates in the
third quarter of 2020 compared to the third quarter of 2019;
improved results from the commencement of the Foinaven FPSO unit's
new bareboat charter contract in March 2020; lower interest expense
due to debt reduction over the past year and lower interest rates;
Teekay LNG's earnings from the delivery and contract start-up on
three equity-accounted LNG carrier newbuildings; fewer off-hire
days for scheduled drydockings and repairs; and the commencement of
terminal use payments to Teekay LNG's equity-accounted Bahrain LNG
Terminal in January 2020. These improvements were partially offset
by: a reduction in Teekay Tankers' earnings resulting from the sale
of four Suezmax tankers during December 2019 and the first quarter
of 2020; a reduction in Teekay LNG's earnings following the sale of
two non-core LNG carriers in early-2020; and a reduction in Teekay
Parent's earnings from the Banff FPSO unit due to the
decommissioning of the Banff oil field, which commenced in June
2020.
In addition, consolidated GAAP net loss
decreased as the Company recognized fewer impairment charges in the
third quarter of 2020, including write-downs totaling $66.3 million
relating to five Aframax tankers, one FPSO unit and one
in-chartered FSO unit under an operating lease, compared to
write-downs of vessels totaling $175.8 million in the third quarter
of 2019; and a gain of $1.1 million recognized in the third quarter
of 2020 relating to the repurchase of Teekay's 5 percent
Convertible Senior Notes. These items were partially offset by an
increase in unrealized credit loss provision adjustments and
foreign currency exchange losses incurred in the third quarter of
2020, as compared to unrealized gains in the third quarter of
2019.
Teekay Parent
Total Teekay Parent Free Cash Flow(1) was
negative $17.1 million during the third quarter of 2020, compared
to negative $18.8 million for the same period of the prior year,
primarily due to: the elimination of the operating losses on the
Foinaven FPSO unit as a result of the commencement of the new
bareboat contract in the first quarter of 2020; higher
distributions received from Teekay LNG as a result of Teekay LNG's
32 percent increase in its quarterly cash distributions commencing
in May 2020 and the newly-issued Teekay LNG common units Teekay
Parent received as consideration for the Teekay LNG incentive
distribution rights (IDR) transaction completed in May 2020; lower
net general and administrative expenses; and a higher contribution
from the Hummingbird FPSO unit mainly due to a new contract that
took effect in the fourth quarter of 2019 at a higher rate. These
increases are partially offset by: a lower contribution from the
Banff FPSO unit due to the decommissioning of the Banff oil field,
which commenced in June 2020, and the associated decommissioning
costs incurred during the third quarter of 2020. The Banff FPSO
unit's estimated remaining net asset retirement obligation relating
to the remediation of the subsea infrastructure was $34.2 million
as of September 30, 2020 (net of customer recoveries and excluding
any remaining operating expenses and recycling costs relating to
the FPSO unit).
Please refer to Appendix D of this release for
additional information about Teekay Parent's Free Cash Flow(1).
|
(1) |
|
This is a non-GAAP financial measure. Please refer to “Definitions
and Non-GAAP Financial Measures” and the Appendices to this release
for a definition of this term and a reconciliation of this non-GAAP
financial measure as used in this release to the most directly
comparable financial measures under GAAP. |
Summary Results of Daughter
Entities
Teekay LNG
Teekay LNG’s net income, adjusted net income(1)
and total adjusted EBITDA(1) for the third quarter of 2020,
compared to the same quarter of the prior year, were positively
impacted by: additional earnings from the delivery and contract
start-up of three 50 percent-owned LNG carrier newbuildings in
late-2019 and the commencement of terminal use payments to the
Bahrain LNG Terminal in one of Teekay LNG's joint ventures; and
fewer off-hire days. These increases were partially offset by a
reduction in earnings as a result of the sale of non-core vessels
and lower charter rates earned by three, 52 percent-owned LNG
carriers. Teekay LNG's net income and adjusted net income(1) were
further positively impacted by lower net interest expense in the
third quarter of 2020 as a result of debt repayments over the past
year.
In addition, Teekay LNG's GAAP net income was
negatively impacted by unrealized credit loss provision adjustments
related to the adoption of new accounting standards (ASC 326) at
the beginning of 2020 and unrealized foreign currency exchange
losses incurred in the third quarter of 2020 as compared to
unrealized gains in the third quarter of 2019; partially offset by
unrealized gains on non-designated derivative instruments in the
third quarter of 2020 compared to unrealized losses in the third
quarter of 2019.
Please refer to Teekay LNG's third quarter 2020
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' GAAP net loss increased for the
third quarter of 2020, while non-GAAP adjusted net income(1) and
total adjusted EBITDA(1) improved compared to the same period of
the prior year. These measures were positively impacted primarily
by higher revenues from several fixed-rate charters secured during
the past year at higher rates and higher spot tanker rates in the
third quarter of 2020 compared to the prior year, partially offset
by the sale of four Suezmax tankers during December 2019 and the
first quarter of 2020, as well as the sale of the non-US portion of
the ship-to-ship support services and LNG terminal management
business in the second quarter of 2020. Teekay Tankers' GAAP net
loss in the third quarter of 2020 also included a $45.0 million
write-down of assets.
Following three strong quarters, spot tanker
rates came under pressure during the third quarter of 2020 as a
result of seasonal weakness, lower oil demand, record OPEC+
production cuts, and the unwinding of floating storage. Teekay
Tankers was able to partially mitigate the impact of these weaker
rates with 22 percent of its fleet on fixed-rate charters during
the third quarter at an average rate of $37,600 per day. The
weakness in spot tanker rates has continued into the fourth quarter
of 2020, with rates so far averaging below the levels in the third
quarter of 2020.
Please refer to Teekay Tankers' third quarter
2020 earnings release for additional information on the financial
results for this entity.
|
(1) |
|
This is a
non-GAAP financial measure. Please refer to “Definitions and
Non-GAAP Financial Measures” and the Appendices to this release for
a definition of this term and a reconciliation of this non-GAAP
financial measure as used in this release to the most directly
comparable financial measures under GAAP. |
Summary of Recent Events
Teekay Parent
In early-October 2020, Teekay Parent closed on a
new equity margin revolver of up to $150 million maturing in June
2022 to refinance the previous facility which was scheduled to
mature in December 2020. The new revolver has substantially similar
terms to the previous facility and currently remains fully
undrawn.
Since mid-September 2020, Teekay Parent has
repurchased $12.8 million in principal amount of its existing 5
percent Convertible Senior Notes for total consideration of $10.5
million at an average all-in price of 81.55, and $1.6 million in
principal amount of its existing 9.25 percent Secured Senior Notes
for total consideration of $1.5 million at an average all-in price
of 92.23.
Teekay LNG
In August 2020, Teekay LNG issued the equivalent
of $112 million of unsecured, 5-year notes in the Norwegian Bond
market at an all-in fixed coupon rate of 5.74 percent. The net
proceeds from the bond issuance were used to repay drawings on the
Partnership's revolving credit facilities and as a result, the new
bond issuance did not increase Teekay LNG's financial leverage.
In October 2020, the charterer of the 52
percent-owned Marib Spirit exercised its options to extend the
current charter by 14 months at a higher charter rate, extending
the vessel's charter coverage to early-2022.
Teekay Tankers
In August 2020, Teekay Tankers secured a
three-year, $67 million term loan to refinance four Suezmax
tankers. The net proceeds from the new debt facility, along with
existing cash balances, were used to repay approximately $85
million outstanding on Teekay Tankers' existing debt facility with
respect to these vessels that was scheduled to mature in 2021.
In September 2020, Teekay Tankers entered into a
one-year time charter-out contract for an Aframax tanker at $18,700
per day, which commenced in early-October 2020.
In October 2020, Teekay Tankers repurchased two
of its Aframax vessels that were previously subject to long-term
finance leases for a total purchase price of $29.6 million. The
purchase was funded with existing cash balances and therefore, the
two vessels are currently unencumbered.
Liquidity
As at September 30, 2020, Teekay Parent had
total liquidity of approximately $142.5 million (consisting of
$54.7 million of cash and cash equivalents and $87.8 million of
undrawn capacity from a revolving credit facility), compared to
Teekay Parent liquidity of $165.5 million as at June 30, 2020.
Including Teekay Parent's equity margin revolver refinancing
completed on October 1, 2020, Teekay Parent's pro forma total
liquidity would have been approximately $173.5 million as of
September 30, 2020.
On a consolidated basis, as at September 30,
2020, Teekay had consolidated total liquidity of approximately $1.0
billion (consisting of $376.6 million of cash and cash equivalents
and $666.5 million of undrawn capacity from its credit facilities),
up from total consolidated liquidity of $939.4 million as at June
30, 2020. Including Teekay Parent's equity margin revolver
refinancing completed on October 1, 2020, Teekay's pro forma
consolidated total liquidity would have been approximately $1.1
billion as of September 30, 2020.
Conference Call
The Company plans to host a conference call on
Thursday, November 12, 2020 at 11:00 a.m. (ET) to discuss its
results for the third quarter of 2020. All shareholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (800) 367-2403 or (647) 490-5367, if outside North
America, and quoting conference ID code 9588810.
- 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 2020 Earnings
Presentation will also be available at www.teekay.com in advance of
the conference call start time.
About Teekay
Teekay is a leading provider of international
crude oil and gas marine transportation services. Teekay provides
these services primarily through its directly-owned fleet and its
controlling ownership interests in Teekay LNG Partners L.P.
(NYSE:TGP), one of the world’s largest independent owners and
operators of LNG carriers, and Teekay Tankers Ltd. (NYSE:TNK), one
of the world’s largest owners and operators of mid-sized crude
tankers. The consolidated Teekay entities manage and operate total
assets under management of approximately $9 billion, comprised of
approximately 140 liquefied gas, offshore, and conventional tanker
assets. With offices in 10 countries and approximately 5,500
seagoing and shore-based employees, Teekay provides a comprehensive
set of marine services to the world’s leading oil and gas
companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries contact:Ryan
HamiltonTel: +1 (604) 609-2963Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the Securities and Exchange Commission (SEC). These non-GAAP
financial measures, which include Adjusted Net Income (Loss)
Attributable to Shareholders of Teekay, Teekay Parent Free Cash
Flow, Total Adjusted Revenues, Net Interest Expense, Adjusted
Equity Income and Adjusted EBITDA, are intended to provide
additional information and should not be considered substitutes for
measures of performance prepared in accordance with GAAP. In
addition, these measures do not have standardized meanings across
companies, and therefore may not be comparable to similar measures
presented by other companies. The Company believes that certain
investors use this information to evaluate the Company’s financial
performance, as does management.
Non-GAAP Financial Measures
Total Adjusted EBITDA represents net income
(loss) before interest, taxes, depreciation and amortization, and
is adjusted to exclude certain items whose timing or amount cannot
be reasonably estimated in advance or that are not considered
representative of core operating performance. Such adjustments
include foreign currency exchange gains and losses, any write-downs
and/or gains and losses on sale of operating assets, adjustments
for direct financing and sales-type leases to a cash basis,
amortization of in-process revenue contracts, unrealized gains and
losses on derivative instruments, credit loss provision
adjustments, write-downs related to equity-accounted investments,
our share of the above items in non-consolidated joint ventures
which are accounted for using the equity method of accounting, and
other income or loss. Total Adjusted EBITDA also excludes realized
gains or losses on interest rate swaps as management, in assessing
the Company's performance, views these gains or losses as an
element of interest expense and realized gains or losses on
derivative instruments resulting from amendments or terminations of
the underlying instruments.
Consolidated Adjusted EBITDA represents Adjusted
EBITDA from vessels that are consolidated on the Company's
financial statements. Adjusted EBITDA from Equity-Accounted
Vessels represents the Company's proportionate share of Adjusted
EBITDA from its equity-accounted vessels. The Company does not have
the unilateral ability to determine whether the cash generated by
its equity-accounted vessels is retained within the entity in which
the Company holds the equity-accounted investments or distributed
to the Company and other owners. In addition, the Company does not
control the timing of any such distributions to the Company and
other owners. Total Adjusted EBITDA represents Consolidated
Adjusted EBITDA plus Adjusted EBITDA from Equity-Accounted Joint
Ventures. Adjusted EBITDA is a non-GAAP financial measure used by
certain investors and management to measure the operational
performance of companies. Please refer to Appendices C and E of
this release for reconciliations of Adjusted EBITDA to net income
(loss) and equity (loss) income, respectively, which are the most
directly comparable GAAP measures reflected in the Company’s
consolidated financial statements.
Total Adjusted Revenues represents the Company's
revenues from its consolidated vessels, as shown in the Company's
Consolidated Statements of (Loss) Income, and its proportionate
ownership percentage of the revenues from its equity-accounted
joint ventures, as shown in Appendix E of this release, and
commencing in 2020, less the Company's proportionate share of
revenues earned directly from its equity-accounted joint ventures.
Please refer to Appendix E of this release for a reconciliation of
this non-GAAP financial measure to revenues and equity income, the
most directly comparable GAAP measure reflected in the Company's
consolidated financial statements. The Company does not have the
unilateral ability to determine whether the cash generated by its
equity-accounted vessels is retained within the entity in which the
Company holds the equity-accounted investments or distributed to
the Company and other owners. In addition, the Company does not
control the timing of any such distributions to the Company and
other owners.
Adjusted Net Income (Loss) Attributable to
Shareholders of Teekay excludes items of income or loss from GAAP
net income (loss) that are typically excluded by securities
analysts in their published estimates of the Company’s financial
results. The Company believes that certain investors use this
information to evaluate the Company’s financial performance, as
does management. Please refer to Appendix A of this release for a
reconciliation of this non-GAAP financial measure to net (loss)
income, and refer to footnote (6) of the statements of (loss)
income 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 EBITDA represents the sum
of (a) distributions or dividends (including payments-in-kind)
relating to a given quarter (but received by Teekay Parent in the
following quarter) as a result of ownership interests in its
consolidated publicly-traded subsidiaries (Teekay LNG and Teekay
Tankers), net of Teekay Parent’s corporate general and
administrative expenditures for the given quarter and (b) Adjusted
EBITDA attributed to Teekay Parent’s directly-owned and
chartered-in assets.
Teekay Parent Free Cash Flow represents Teekay
Parent Adjusted EBITDA, less Teekay Parent’s net interest expense
and, commencing in the second quarter of 2020, asset retirement
costs incurred for the given quarter. Net Interest Expense includes
interest expense (excluding the amortization of prepaid loan
costs), interest income and realized losses on interest rate swaps.
Please refer to Appendices B, C, D and E of this release for
further details and reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures reflected in
the Company’s consolidated financial statements.
Teekay Corporation Summary Consolidated Statements of (Loss)
Income (in thousands of U.S. dollars, except share and per share
data)
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
| |
2020 |
2020 |
2019 (1) |
2020 |
2019 (1) |
| |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
|
|
|
| Revenues |
396,517 |
|
482,805 |
|
425,836 |
|
1,453,376 |
|
1,375,106 |
|
| |
|
|
|
|
|
| Voyage expenses |
(61,736 |
) |
(66,896 |
) |
(97,829 |
) |
(250,196 |
) |
(310,022 |
) |
| Vessel operating expenses |
(153,764 |
) |
(147,796 |
) |
(159,616 |
) |
(454,853 |
) |
(479,229 |
) |
| Time-charter hire expense |
(18,796 |
) |
(17,714 |
) |
(28,932 |
) |
(63,566 |
) |
(87,587 |
) |
| Depreciation and
amortization |
(64,352 |
) |
(62,936 |
) |
(73,633 |
) |
(200,205 |
) |
(219,589 |
) |
| General and administrative
expenses |
(18,073 |
) |
(23,668 |
) |
(20,016 |
) |
(60,018 |
) |
(63,856 |
) |
| Write-down and (loss) gain on
sale of assets (2) |
(66,273 |
) |
(10,669 |
) |
(175,785 |
) |
(171,548 |
) |
(179,113 |
) |
| Gain on commencement of
sales-type lease (3) |
— |
|
— |
|
— |
|
44,943 |
|
— |
|
|
Restructuring charges (4) |
(2,139 |
) |
(4,622 |
) |
(414 |
) |
(9,149 |
) |
(10,404 |
) |
| Income (loss) from
vessel operations |
11,384 |
|
148,504 |
|
(130,389 |
) |
288,784 |
|
25,306 |
|
| |
|
|
|
|
|
| Interest expense |
(53,175 |
) |
(59,245 |
) |
(67,707 |
) |
(174,940 |
) |
(211,583 |
) |
| Interest income |
1,754 |
|
2,314 |
|
1,485 |
|
6,871 |
|
6,407 |
|
| Realized and unrealized losses
on non-designated |
|
|
|
|
|
|
derivative instruments (5) |
(1,471 |
) |
(9,270 |
) |
(1,924 |
) |
(32,404 |
) |
(18,311 |
) |
| Equity income (loss) (6) |
24,392 |
|
35,343 |
|
21,514 |
|
62,048 |
|
(46,423 |
) |
| Income tax (expense) recovery
(7) |
(3,702 |
) |
17,175 |
|
(3,091 |
) |
9,681 |
|
(11,531 |
) |
| Foreign exchange (loss)
gain |
(5,943 |
) |
(8,922 |
) |
5,628 |
|
(8,219 |
) |
(2,853 |
) |
| Other
loss – net (8) |
(14,627 |
) |
(399 |
) |
(1,424 |
) |
(15,707 |
) |
(12,495 |
) |
| Net (loss)
income |
(41,388 |
) |
125,500 |
|
(175,908 |
) |
136,114 |
|
(271,483 |
) |
| Net loss (income) attributable
to |
|
|
|
|
|
|
non-controlling interests |
5,981 |
|
(103,777 |
) |
(22,270 |
) |
(199,603 |
) |
(50,437 |
) |
| Net (loss) income
attributable to the shareholders |
|
|
|
|
|
|
of Teekay Corporation |
(35,407 |
) |
21,723 |
|
(198,178 |
) |
(63,489 |
) |
(321,920 |
) |
|
Earnings (loss) per common share of Teekay Corporation |
|
|
|
|
|
|
- Basic |
$ |
(0.35 |
) |
$ |
0.21 |
|
$ |
(1.97 |
) |
$ |
(0.63 |
) |
$ |
(3.20 |
) |
|
- Diluted |
$ |
(0.35 |
) |
$ |
0.21 |
|
$ |
(1.97 |
) |
$ |
(0.63 |
) |
$ |
(3.20 |
) |
|
Weighted-average number of common shares outstanding |
|
|
|
|
|
|
- Basic |
101,107,371 |
|
101,107,362 |
|
100,784,683 |
|
101,034,362 |
|
100,697,251 |
|
|
- Diluted |
101,107,371 |
|
101,196,383 |
|
100,784,683 |
|
101,034,362 |
|
100,697,251 |
|
|
(1) |
|
Comparative balances relating to the three and nine months ended
September 30, 2019 have been recast to reflect results consistent
with the presentation in the Company’s 2019 Annual Report on Form
20-F and this report for the three and nine months ended September
30, 2020. |
| (2) |
|
Write-down and (loss) gain on sale of assets for the three and nine
months ended September 30, 2020 includes write-downs of $66.3
million relating to five Aframax tankers, the Hummingbird FPSO
unit, and the Suksan Salamander FSO unit, an operating lease
right-of-use (ROU) asset. The five Aframax tankers were written
down to their estimated fair values. In 2020, the Company made
changes to the Hummingbird's expected future cash flows based on
the market environment and oil prices, and contract discussions
with the customer, which resulted in the vessel being fully written
down. In the third quarter of 2020, the Company also made changes
to the Suksan Salamander's expected future cash flows based on
recent progress on the early termination of the in-charter and the
corresponding novation of the charter contract to Altera
Infrastructure LP (Altera). Write-down and (loss) gain on sale of
assets for the nine months ended September 30, 2020 also includes a
$13.6 million provision incurred in the second quarter of 2020
relating to an adjustment in the Banff FPSO unit's estimated asset
retirement obligation and the write-down of the unit's remaining
residual value, write-downs of six multi-gas carriers totaling
$45.0 million and other write-downs of two FPSO units totaling
$46.5 million, both of which were incurred in the first quarter of
2020. Write-down and (loss) gain on sale of assets for the three
and nine months ended September 30, 2019 includes $175.0 million
relating to the write-down of two FPSO units owned by Teekay
Parent. |
| (3) |
|
Gain on
commencement of sales-type lease of $44.9 million for the nine
months ended September 30, 2020 relates to the commencement of the
sales-type lease for the Foinaven FPSO unit as a result of a new
bareboat charter agreement. |
| (4) |
|
Restructuring charges for the three and nine months ended September
30, 2020 includes redundancy accruals arising from the cessation of
production of the Petrojarl Banff FPSO unit in June 2020, the
restructuring of the Company's tanker operations, and the
reorganization and realignment of resources of the Company's shared
services functions, of which a portion of the costs are recoverable
from the customer, Altera. Restructuring charges for the nine
months ended September 30, 2020 also includes severance costs
resulting from the expected termination of the contract for an FSO
unit based in Australia, which are expected to be fully recoverable
from the customer. Recoverable severance costs totaling $1.0
million and $6.7 million are presented in revenue for the three and
nine months ended September 30, 2020, respectively. |
| (5) |
|
Realized
and unrealized losses related to derivative instruments that are
not designated in qualifying hedging relationships for accounting
purposes are included as a separate line item in the consolidated
statements of (loss) income. The realized losses 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, |
June 30, |
September 30, |
September 30, |
September 30, |
| |
2020 |
2020 |
2019 |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
| Realized (losses) gains
relating to |
|
|
|
|
|
|
Interest rate swap agreements |
(5,349 |
) |
(3,879 |
) |
(2,247 |
) |
(11,905 |
) |
(5,720 |
) |
|
Stock purchase warrants (i) |
— |
|
— |
|
— |
|
— |
|
(25,559 |
) |
|
Foreign currency forward contracts |
379 |
|
— |
|
— |
|
138 |
|
— |
|
|
Forward freight agreements |
(183 |
) |
(201 |
) |
435 |
|
(433 |
) |
393 |
|
|
|
(5,153 |
) |
(4,080 |
) |
(1,812 |
) |
(12,200 |
) |
(30,886 |
) |
| Unrealized gains (losses)
relating to |
|
|
|
|
|
|
Interest rate swap agreements |
3,956 |
|
(5,251 |
) |
(623 |
) |
(20,107 |
) |
(14,839 |
) |
|
Foreign currency forward contracts |
(53 |
) |
53 |
|
(435 |
) |
202 |
|
(536 |
) |
|
Stock purchase warrants (i) |
— |
|
— |
|
— |
|
— |
|
26,900 |
|
|
Forward freight agreements |
(221 |
) |
8 |
|
946 |
|
(299 |
) |
1,050 |
|
|
|
3,682 |
|
(5,190 |
) |
(112 |
) |
(20,204 |
) |
12,575 |
|
| Total
realized and unrealized losses on derivative instruments |
(1,471 |
) |
(9,270 |
) |
(1,924 |
) |
(32,404 |
) |
(18,311 |
) |
| |
(i) |
|
Stock purchase warrants for the nine months ended September 30,
2019 relates to the sale of the Company's remaining interest in
Altera in May 2019. Also refer to footnote (6)(i) below. |
|
(6) |
|
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) income , 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, |
June 30, |
September 30, |
September 30, |
September 30, |
| |
2020 |
2020 |
2019 |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
Equity income (loss) |
24,392 |
|
35,343 |
|
21,514 |
|
62,048 |
(46,423 |
) |
| Proportionate share of
unrealized (gains) |
|
|
|
|
|
|
losses on derivative instruments |
(2,680 |
) |
3,806 |
|
5,170 |
|
23,330 |
19,138 |
|
| Loss on sale of investment in
Altera (i) |
— |
|
— |
|
— |
|
— |
72,753 |
|
| Other (ii) |
8,266 |
|
(61 |
) |
(150 |
) |
16,646 |
873 |
|
|
Equity income adjusted for items in Appendix A |
29,978 |
|
39,088 |
|
26,534 |
|
102,024 |
46,341 |
|
| |
(i) |
|
During the nine months ended September 30, 2019, the Company
recognized a loss of $7.9 million on sale of its investment in
Altera to affiliates of Brookfield Business Partners L.P., which
occurred in May 2019. In connection with the sale, the Company also
recognized a write-down of $64.9 million on its equity-accounted
investment in Altera during the nine months ended September 30,
2019. Also refer to footnote (5)(i) above in respect of gains and
losses on stock purchase warrants. |
| |
(ii) |
|
Other for
the three and nine months ended September 30, 2020, and three
months ended June 30, 2020, includes unrealized credit loss
provision adjustments to the Company's financial instruments as a
result of the adoption in 2020 of ASU 2016-13, Financial
Instruments - Credit Losses: Measurement of Credit Losses on
Financial Instruments (ASU 2016-13). |
|
(7) |
|
Income tax (expense) recovery for the three months ended June 30,
2020 and nine months ended September 30, 2020, includes a reduction
in freight tax accruals of $16.8 million related to periods prior
to 2020. |
| (8) |
|
Other
loss - net for the three and nine months ended September 30, 2020,
and three months ended June 30, 2020 includes unrealized credit
loss provision adjustments of $15.0 million, $15.2 million and $0.2
million, respectively, as a result of the adoption of ASU 2016-13
effective January 1, 2020. Other loss – net for the nine months
ended September 30, 2019 includes a $10.7 million loss relating to
the repurchase of the Company's 2020 Unsecured Senior Notes, which
matured in January 2020. |
Teekay Corporation Summary Consolidated Balance Sheets(in
thousands of U.S. dollars)
| |
As at September 30, |
As at June 30, |
As at December 31, |
| |
2020 |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
| Cash and cash
equivalents - Teekay Parent |
54,655 |
66,917 |
104,196 |
| Cash and cash
equivalents - Teekay LNG |
201,036 |
226,328 |
160,221 |
| Cash and cash
equivalents - Teekay Tankers |
120,872 |
167,907 |
88,824 |
| Assets held for
sale |
— |
— |
65,458 |
| Accounts
receivable and other current assets |
274,408 |
318,726 |
393,406 |
| Restricted cash -
Teekay Parent |
4,060 |
3,915 |
2,048 |
| Restricted cash -
Teekay LNG |
53,801 |
66,147 |
93,070 |
| Restricted cash -
Teekay Tankers |
8,123 |
8,203 |
6,508 |
| Vessels and
equipment - Teekay Parent |
— |
13,964 |
95,984 |
| Vessels and
equipment - Teekay LNG |
2,908,182 |
2,931,602 |
3,027,342 |
| Vessels and
equipment - Teekay Tankers |
1,616,518 |
1,672,976 |
1,750,166 |
| Operating lease
right-of-use assets |
61,796 |
81,255 |
159,638 |
| Net investment in
direct financing and sales-type leases |
537,142 |
554,986 |
818,809 |
| Investments in and
loans to equity-accounted investments |
1,111,660 |
1,102,386 |
1,173,728 |
| Other non-current
assets |
128,867 |
130,200 |
133,466 |
|
Total Assets |
7,081,120 |
7,345,512 |
8,072,864 |
|
LIABILITIES AND EQUITY |
|
|
| Accounts payable
and other current liabilities |
461,664 |
441,857 |
430,497 |
| Liabilities
related to assets held for sale |
— |
— |
2,980 |
| Short-term debt -
Teekay Tankers |
20,000 |
10,000 |
50,000 |
| Current portion of
long-term debt - Teekay Parent |
— |
— |
86,674 |
| Current portion of
long-term debt - Teekay LNG |
363,161 |
366,237 |
463,047 |
| Current portion of
long-term debt - Teekay Tankers |
37,756 |
53,830 |
68,930 |
| Long-term debt -
Teekay Parent |
346,178 |
354,065 |
349,403 |
| Long-term debt -
Teekay LNG |
2,488,953 |
2,568,258 |
2,779,253 |
| Long-term debt -
Teekay Tankers |
573,381 |
661,627 |
905,537 |
| Operating lease
liabilities |
63,529 |
72,982 |
148,602 |
| Other long-term
liabilities |
196,568 |
229,415 |
216,348 |
| Equity: |
|
|
|
| Non-controlling
interests |
2,033,112 |
2,058,273 |
2,089,730 |
| Shareholders of
Teekay |
496,818 |
528,968 |
481,863 |
|
Total Liabilities and Equity |
7,081,120 |
7,345,512 |
8,072,864 |
|
|
|
|
|
| Net debt - Teekay
Parent (1) |
287,463 |
283,233 |
329,833 |
| Net debt - Teekay
LNG (1) |
2,597,277 |
2,642,020 |
2,989,009 |
| Net
debt - Teekay Tankers (1) |
502,142 |
549,347 |
929,135 |
|
(1) |
|
Net debt is a non-GAAP financial measure and represents short-term
debt, current portion of long-term debt and long-term debt, less
cash and cash equivalents, and, if applicable, restricted
cash. |
Teekay Corporation Summary Consolidated Statements of Cash
Flows(in thousands of U.S. dollars)
| |
Nine Months Ended |
| |
September 30, |
| |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
| Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
|
Net income (loss) |
136,114 |
|
(271,483 |
) |
| Non-cash and non-operating
items: |
|
|
|
Depreciation and amortization |
200,205 |
|
219,589 |
|
|
Unrealized loss on derivative instruments |
22,373 |
|
38,803 |
|
|
Write-down and loss on sale |
171,548 |
|
179,113 |
|
|
Gain on commencement of sales-type lease |
(44,943 |
) |
— |
|
|
Equity (income) loss, net of dividends received |
(29,751 |
) |
71,797 |
|
|
Foreign currency exchange loss and other |
33,747 |
|
13,602 |
|
| Direct financing lease
payments received |
337,363 |
|
9,242 |
|
| Change in operating assets and
liabilities |
92,310 |
|
41,729 |
|
| Asset retirement obligation
expenditures |
(15,207 |
) |
— |
|
|
Expenditures for dry docking |
(9,623 |
) |
(46,266 |
) |
|
Net operating cash flow |
894,136 |
|
256,126 |
|
| |
|
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance of
long-term debt, net of issuance costs |
1,109,267 |
|
449,686 |
|
| Prepayments of long-term
debt |
(1,639,223 |
) |
(774,401 |
) |
| Scheduled repayments of
long-term debt |
(267,953 |
) |
(171,946 |
) |
| Proceeds from short-term
debt |
235,000 |
|
125,000 |
|
| Prepayment of short-term
debt |
(265,000 |
) |
(75,000 |
) |
| Proceeds from financing
related to sales-leaseback of vessels |
— |
|
381,526 |
|
| Prepayment of obligations
related to finance leases |
— |
|
(111,617 |
) |
| Repayments of obligations
related to finance leases |
(71,135 |
) |
(72,559 |
) |
| Repurchase of Teekay LNG
common units |
(15,635 |
) |
(25,729 |
) |
| Distributions paid from
subsidiaries to non-controlling interests |
(58,081 |
) |
(46,982 |
) |
| Cash dividends paid |
— |
|
(5,523 |
) |
| Other
financing activities |
(798 |
) |
(580 |
) |
|
Net financing cash flow |
(973,558 |
) |
(328,125 |
) |
| |
|
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for vessels and
equipment |
(18,468 |
) |
(98,713 |
) |
| Proceeds from sale of vessels
and equipment |
60,915 |
|
— |
|
| Proceeds from sale of assets,
net of cash sold |
24,977 |
|
100,000 |
|
| Loan repayment by joint
venture |
4,650 |
|
— |
|
| Investment in equity-accounted
investments |
— |
|
(42,171 |
) |
| Other
investing activities |
(6,430 |
) |
— |
|
|
Net investing cash flow |
65,644 |
|
(40,884 |
) |
| |
|
|
| Decrease in cash, cash
equivalents and restricted cash |
(13,778 |
) |
(112,883 |
) |
| Cash,
cash equivalents and restricted cash, beginning of the period |
456,325 |
|
505,639 |
|
|
Cash, cash equivalents and restricted cash, end of the
period |
442,547 |
|
392,756 |
|
Teekay CorporationAppendix A - Reconciliation of Non-GAAP
Financial MeasuresAdjusted Net Income (Loss)(in thousands of U.S.
dollars, except per share data)
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
June 30, |
September 30, |
| |
2020 |
2020 |
2020 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
|
$
Per |
|
$
Per |
|
$
Per |
| |
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
| Net (loss) income –
GAAP basis |
(41,388 |
) |
|
125,500 |
|
|
136,114 |
|
|
| Adjust for: Net loss (income)
attributable to |
|
|
|
|
|
|
|
non-controlling interests |
5,981 |
|
|
(103,777 |
) |
|
(199,603 |
) |
|
|
Net (loss) income attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
(35,407 |
) |
(0.35 |
) |
21,723 |
|
0.21 |
|
(63,489 |
) |
(0.63 |
) |
| Add (subtract)
specific items affecting net loss |
|
|
|
|
|
|
|
Unrealized (gains) losses from |
|
|
|
|
|
|
|
derivative instruments(2) |
(6,362 |
) |
(0.06 |
) |
8,995 |
|
0.09 |
|
43,533 |
|
0.43 |
|
|
Foreign currency exchange losses (3) |
4,275 |
|
0.04 |
|
7,492 |
|
0.07 |
|
3,304 |
|
0.03 |
|
|
Banff FPSO decommissioning costs |
|
|
|
|
|
|
|
net of recoveries(4) |
10,564 |
|
0.10 |
|
5,854 |
|
0.06 |
|
16,418 |
|
0.16 |
|
|
Write-down and (loss) gain on sale |
|
|
|
|
|
|
|
of vessels and other assets(5) |
66,872 |
|
0.66 |
|
10,669 |
|
0.11 |
|
172,147 |
|
1.70 |
|
|
Gain on commencement of sales-type lease(6) |
— |
|
— |
|
— |
|
— |
|
(44,943 |
) |
(0.44 |
) |
|
Restructuring charges, net of recoveries |
1,186 |
|
0.01 |
|
112 |
|
— |
|
2,486 |
|
0.02 |
|
|
Other(7) |
22,657 |
|
0.22 |
|
(17,598 |
) |
(0.17 |
) |
13,289 |
|
0.13 |
|
|
Non-controlling interests’ share of items above(8) |
(48,556 |
) |
(0.48 |
) |
2,466 |
|
0.02 |
|
(62,544 |
) |
(0.62 |
) |
| Total adjustments |
50,636 |
|
0.49 |
|
17,990 |
|
0.18 |
|
143,690 |
|
1.42 |
|
|
Adjusted net income attributable to |
|
|
|
|
|
|
|
shareholders of Teekay |
15,229 |
|
0.15 |
|
39,713 |
|
0.39 |
|
80,201 |
|
0.79 |
|
| (1) |
|
Basic per share amounts. |
| (2) |
|
Reflects
unrealized gains (losses) relating to the change in the
mark-to-market value of derivative instruments that are not
designated in qualifying hedging relationships for accounting
purposes, including those gains (losses) included in the Company's
proportionate share of equity income (loss) from joint
ventures. |
| (3) |
|
Foreign
currency exchange losses (gains) primarily relate to the Company’s
debt denominated in Euros and Norwegian Kroner (NOK) and unrealized
losses on cross currency swaps used to economically hedge the
principal and interest on NOK bonds. |
| (4) |
|
In the
first quarter of 2020, CNR International (U.K.) Limited (or CNR)
provided formal notice to the Company of its intention to
decommission the Banff field and remove the Banff FPSO and the
Apollo Spirit FSO from the field in June 2020. The oil production
under the existing contract for the Banff FPSO unit ceased in June
2020, and the Company commenced decommissioning activities during
the second quarter of 2020. |
| (5) |
|
Refer to
footnote (2) of the Summary Consolidated Statements of (Loss)
Income for additional information. |
| (6) |
|
Gain on
commencement of sales-type lease for the nine months ended
September 30, 2020 relates to the commencement of the sales-type
lease for the Foinaven FPSO unit as a result of a new bareboat
charter agreement. |
| (7) |
|
Other for
the three and nine months ended September 30, 2020, and three
months ended June 30,2020, includes credit loss provision
adjustments to the Company's financial instruments upon adoption of
ASU 2016-13. Other for the nine months ended September 30, 2020 and
three months ended June 30, 2020 also includes a reduction in
freight tax accruals. |
| (8) |
|
Items
affecting net income include items from the Company’s consolidated
non-wholly-owned subsidiaries. The specific items affecting net
income 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 A - Reconciliation of
Non-GAAP Financial MeasuresAdjusted Net Income (Loss)(in thousands
of U.S. dollars, except per share data)
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2019 |
2019 |
| |
(unaudited) |
(unaudited) |
|
|
|
$
Per |
|
$
Per |
| |
$ |
Share(1) |
$ |
Share(1) |
| Net loss – GAAP
basis |
(175,908 |
) |
|
(271,483 |
) |
|
| Adjust for: Net income
attributable to |
|
|
|
|
|
non-controlling interests |
(22,270 |
) |
|
(50,437 |
) |
|
|
Net loss attributable to |
|
|
|
|
|
shareholders of Teekay |
(198,178 |
) |
(1.97 |
) |
(321,920 |
) |
(3.20 |
) |
| Add (subtract)
specific items affecting net loss |
|
|
|
|
|
Unrealized losses from non-designated derivative
instruments(2) |
5,283 |
|
0.05 |
|
6,565 |
|
0.07 |
|
|
Foreign currency exchange gains(3) |
(7,059 |
) |
(0.07 |
) |
(1,099 |
) |
(0.01 |
) |
|
Write-down and (loss) gain on sale of vessels and |
|
|
|
|
|
other assets(4) |
175,785 |
|
1.74 |
|
251,866 |
|
2.50 |
|
|
Restructuring charges, net of recoveries |
414 |
|
— |
|
3,941 |
|
0.04 |
|
|
Other(5) |
1,267 |
|
0.01 |
|
40,594 |
|
0.40 |
|
|
Non-controlling interests’ share of items above(6) |
(1,582 |
) |
(0.02 |
) |
(30,340 |
) |
(0.30 |
) |
| Total adjustments |
174,108 |
|
1.71 |
|
271,527 |
|
2.70 |
|
|
Adjusted net loss attributable to |
|
|
|
|
|
shareholders of Teekay |
(24,070 |
) |
(0.24 |
) |
(50,393 |
) |
(0.50 |
) |
| |
|
|
|
|
|
(1) |
|
Basic per share amounts. |
| (2) |
|
Reflects
unrealized losses (gains) relating to the change in the
mark-to-market value of derivative instruments that are not
designated in qualifying hedging relationships for accounting
purposes, including those losses (gains) included in the Company's
proportionate share of equity income (loss) from joint
ventures. |
| (3) |
|
Foreign
currency exchange (gains) losses primarily relate to the Company’s
debt denominated in Euros and Norwegian Kroner (NOK) and unrealized
(gains) losses on cross currency swaps used to economically hedge
the principal and interest on NOK bonds. |
| (4) |
|
Refer to
footnote (2) of the Summary Consolidated Statements of (Loss)
Income for additional information. |
| (5) |
|
Other for
the three and nine months ended September 30, 2019 includes upfront
fees on the refinancing of a vessel. Other for the nine months
ended June 30, 2019 also includes the realized loss on sale of
stock purchase warrants in Altera, a loss on the repurchase of 2020
Notes, and the loan extinguishment costs related to Teekay LNG's
refinancing of one of its debt facilities. |
| (6) |
|
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, 2020 (in thousands of U.S.
dollars)(unaudited)
| |
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
| |
LNG |
Tankers |
Parent |
Adjustments(1) |
|
| |
|
|
|
|
|
|
Revenues |
148,935 |
|
170,240 |
|
77,342 |
|
— |
|
396,517 |
|
| |
|
|
|
|
|
| Voyage expenses |
(3,950 |
) |
(57,777 |
) |
(9 |
) |
— |
|
(61,736 |
) |
| Vessel operating expenses |
(30,642 |
) |
(46,336 |
) |
(76,786 |
) |
— |
|
(153,764 |
) |
| Time-charter hire expense |
(5,980 |
) |
(9,070 |
) |
(3,746 |
) |
— |
|
(18,796 |
) |
| Depreciation and
amortization |
(32,601 |
) |
(29,992 |
) |
(1,759 |
) |
— |
|
(64,352 |
) |
| General and administrative
expenses |
(6,165 |
) |
(9,887 |
) |
(2,021 |
) |
— |
|
(18,073 |
) |
| Write-down of vessels |
— |
|
(44,973 |
) |
(21,300 |
) |
— |
|
(66,273 |
) |
|
Restructuring charges |
— |
|
(1,398 |
) |
(741 |
) |
— |
|
(2,139 |
) |
| Income (loss) from
vessel operations |
69,597 |
|
(29,193 |
) |
(29,020 |
) |
— |
|
11,384 |
|
| |
|
|
|
|
|
| Interest expense |
(30,528 |
) |
(12,553 |
) |
(10,124 |
) |
30 |
|
(53,175 |
) |
| Interest income |
1,406 |
|
337 |
|
41 |
|
(30 |
) |
1,754 |
|
| Realized and unrealized (loss)
gain on |
|
|
|
|
|
|
non-designated derivative instruments |
(1,327 |
) |
(414 |
) |
270 |
|
— |
|
(1,471 |
) |
| Equity income |
24,346 |
|
46 |
|
— |
|
— |
|
24,392 |
|
| Equity in earnings of
subsidiaries (2) |
— |
|
— |
|
1,619 |
|
(1,619 |
) |
— |
|
| Income tax expense |
(1,420 |
) |
(2,187 |
) |
(95 |
) |
— |
|
(3,702 |
) |
| Foreign exchange (loss)
gain |
(7,853 |
) |
(514 |
) |
2,424 |
|
— |
|
(5,943 |
) |
| Other (loss) income – net |
(14,149 |
) |
44 |
|
(522 |
) |
— |
|
(14,627 |
) |
|
Net income (loss) |
40,072 |
|
(44,434 |
) |
(35,407 |
) |
(1,619 |
) |
(41,388 |
) |
| Net income attributable
to |
|
|
|
|
|
|
non-controlling interests (3) |
203 |
|
— |
|
— |
|
5,778 |
|
5,981 |
|
| Net income (loss)
attributable to shareholders/ |
|
|
|
|
|
|
unitholders of publicly-listed entities |
40,275 |
|
(44,434 |
) |
(35,407 |
) |
4,159 |
|
(35,407 |
) |
| (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 Corporation Appendix C - Supplemental Financial
Information Teekay Parent Summary Operating Results For the Three
Months Ended September 30, 2020 (in thousands of U.S.
dollars)(unaudited)
| |
|
|
|
Teekay |
| |
|
|
Corporate |
Parent |
| |
FPSOs |
Other(1) |
G&A |
Total |
| |
|
|
|
|
|
Revenues |
16,245 |
|
61,097 |
|
— |
|
77,342 |
|
| |
|
|
|
|
| Voyage expenses |
(9 |
) |
— |
|
— |
|
(9 |
) |
| Vessel operating expenses |
(21,563 |
) |
(55,223 |
) |
— |
|
(76,786 |
) |
| Time-charter hire expense |
(2 |
) |
(3,744 |
) |
— |
|
(3,746 |
) |
| Depreciation and
amortization |
(1,759 |
) |
— |
|
— |
|
(1,759 |
) |
| General and administrative
expenses |
(398 |
) |
— |
|
(1,623 |
) |
(2,021 |
) |
| Write-down of vessels (2) |
(12,200 |
) |
(9,100 |
) |
— |
|
(21,300 |
) |
|
Restructuring charges |
(900 |
) |
159 |
|
— |
|
(741 |
) |
| Loss
from vessel operations |
(20,586 |
) |
(6,811 |
) |
(1,623 |
) |
(29,020 |
) |
| |
|
|
|
|
| Depreciation and
amortization |
1,759 |
|
— |
|
— |
|
1,759 |
|
| Amortization of operating
lease liability |
|
|
|
— |
|
|
and other |
(749 |
) |
602 |
|
— |
|
(147 |
) |
| Write-down of vessels (2) |
12,200 |
|
9,100 |
|
— |
|
21,300 |
|
|
Daughter Entities distributions (3) |
— |
|
— |
|
9,379 |
|
9,379 |
|
|
Teekay Parent adjusted EBITDA |
(7,376 |
) |
2,891 |
|
7,756 |
|
3,271 |
|
|
(1) |
|
Includes the results of one chartered-in FSO unit owned by Altera,
which is largely on a flow-through basis with Teekay Parent earning
a small margin. |
| (2) |
|
Write-down of vessels for the three months ended September 30, 2020
relates to write-down of the Hummingbird FPSO unit and the Suksan
Salamander FSO unit, an operating lease ROU asset. Please refer to
footnote (2) of the Summary Consolidated Statements of (Loss)
Income of this release for further details. |
| (3) |
|
In
addition to the adjusted EBITDA generated by its directly owned and
chartered-in assets, Teekay Parent also receives cash distributions
from its consolidated publicly-traded subsidiary, Teekay LNG. For
the three months ended September 30, 2020, Teekay Parent
received cash distributions of $9.4 million from Teekay LNG,
including those made with respect to its general partner interests
in Teekay LNG. Distributions received for a given quarter consist
of the amount of distributions relating to such quarter but
received by Teekay Parent in the following quarter. Please refer to
Appendix D of this release for further details. |
Teekay CorporationAppendix D - Reconciliation of Non-GAAP
Financial MeasuresTeekay Parent Free Cash Flow(in thousands of U.S.
dollars, except share and per share data)
| |
Three Months Ended |
| |
September 30, |
June 30, |
September 30, |
|
|
2020 |
2020 |
2019 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Daughter Entities
distributions to Teekay Parent (1) |
|
|
|
|
Teekay LNG |
|
|
|
|
Limited Partner interests (2) |
8,990 |
|
8,990 |
|
4,790 |
|
|
GP interests |
389 |
|
389 |
|
300 |
|
| Total Daughter Entity
Distributions to Teekay Parent |
9,379 |
|
9,379 |
|
5,090 |
|
| |
|
|
|
|
FPSOs |
(7,376 |
) |
2,250 |
|
(13,087 |
) |
|
Other income and corporate general and administrative expenses |
|
|
|
|
Other Income |
2,891 |
|
3,488 |
|
649 |
|
|
Corporate general and administrative expenses (3) |
(1,623 |
) |
(5,423 |
) |
(2,720 |
) |
| TEEKAY PARENT ADJUSTED
EBITDA (4) |
3,271 |
|
9,694 |
|
(10,068 |
) |
|
|
|
|
|
| Net interest expense (5) |
(8,237 |
) |
(8,675 |
) |
(8,714 |
) |
| Asset
retirement costs incurred (6) |
(12,169 |
) |
(2,927 |
) |
— |
|
| TOTAL TEEKAY PARENT
FREE CASH FLOW |
(17,135 |
) |
(1,908 |
) |
(18,782 |
) |
|
|
|
|
|
|
Weighted-average number of common shares -
Basic |
101,107,371 |
|
101,107,362 |
|
100,784,683 |
|
|
(1) |
|
Daughter Entities dividends and distributions for a given quarter
consist of the amount of dividends and distributions relating to
such quarter but received by Teekay Parent in the following
quarter. |
| (2) |
|
Common
unit distribution cash flows to Teekay Parent are based on Teekay
Parent’s ownership on the ex-dividend date for its publicly-traded
subsidiary Teekay LNG for the periods as follows: |
|
|
Three Months Ended |
| |
|
September 30, |
|
June, 30 |
|
September 30, |
| |
|
2020 |
|
2020 |
|
2019 |
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
Teekay LNG |
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.25 |
$ |
0.25 |
$ |
0.19 |
|
Common units owned by |
|
|
|
|
|
|
|
Teekay Parent |
|
35,958,274 |
|
35,958,274 |
|
25,208,274 |
|
Total distribution |
$ |
8,989,569 |
|
8,989,569 |
$ |
4,789,572 |
|
(3) |
|
Increase in corporate general and administrative expenses for the
three months ended June 30, 2020 relates primarily to a change in
timing of annual equity-based compensation grants in 2020 and
professional fees associated with the IDR transaction completed in
May 2020. |
| (4) |
|
Please
refer to Appendices C and E for additional financial information on
Teekay Parent’s adjusted EBITDA. |
| (5) |
|
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. |
| (6) |
|
Relates
to decommissioning activities for the Banff FPSO unit, which have
been accrued on the balance sheet as an asset retirement
obligation. Please see Appendix C footnote (2) for additional
information. |
Teekay CorporationNon-GAAP Financial
Reconciliations
Teekay Corporation Appendix E - Reconciliation of Non-GAAP
Financial Measures Adjusted EBITDA - Consolidated (in thousands of
U.S. dollars)
|
|
Three Months Ended |
|
|
September 30, |
June 30, |
September 30, |
|
|
2020 |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
Net (loss) income |
(41,388 |
) |
125,500 |
|
(175,908 |
) |
| Depreciation and
amortization |
64,352 |
|
62,936 |
|
73,633 |
|
| Interest expense, net of
interest income |
51,421 |
|
56,931 |
|
66,222 |
|
| Income tax expense
(recovery) |
3,702 |
|
(17,175 |
) |
3,091 |
|
|
EBITDA |
78,087 |
|
228,192 |
|
(32,962 |
) |
|
Specific income statement items affecting EBITDA: |
|
|
|
|
Write-down and (loss) gain on sale of assets |
66,273 |
|
10,669 |
|
175,785 |
|
|
Adjustments for direct financing and sales-type lease to a cash
basis and other |
2,976 |
|
2,452 |
|
3,191 |
|
|
Realized and unrealized losses on derivative instruments |
1,471 |
|
9,270 |
|
1,924 |
|
|
Realized gains (losses) from the settlements of non-designated
derivative instruments |
195 |
|
(200 |
) |
435 |
|
|
Equity income |
(24,392 |
) |
(35,343 |
) |
(21,514 |
) |
|
Foreign currency exchange loss (gain) |
5,943 |
|
8,922 |
|
(5,628 |
) |
|
Other loss - net (1) |
14,627 |
|
399 |
|
1,424 |
|
| Consolidated Adjusted
EBITDA |
145,180 |
|
224,361 |
|
122,655 |
|
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
81,818 |
|
91,508 |
|
70,225 |
|
|
Total Adjusted EBITDA |
226,998 |
|
315,869 |
|
192,880 |
|
| (1) |
|
Please refer
to footnote (8) of the Summary Consolidated Statements of (Loss)
Income of this release for further details. |
Teekay Corporation Appendix E - Reconciliation of Non-GAAP
Financial Measures Adjusted EBITDA – Equity-Accounted Vessels (in
thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
September 30, 2020 |
June 30, 2020 |
September 30, 2019 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
|
At |
Company's |
At |
Company's |
At |
Company's |
|
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(1) |
| Revenues |
248,474 |
|
107,619 |
|
266,539 |
|
115,422 |
|
207,749 |
|
91,490 |
|
| Vessel and other operating
expenses |
(77,966 |
) |
(34,522 |
) |
(74,233 |
) |
(32,468 |
) |
(60,219 |
) |
(26,779 |
) |
| Depreciation and
amortization |
(27,436 |
) |
(13,804 |
) |
(26,075 |
) |
(13,006 |
) |
(29,799 |
) |
(14,416 |
) |
|
Income from vessel operations of equity-accounted
vessels |
143,072 |
|
59,293 |
|
166,231 |
|
69,948 |
|
117,731 |
|
50,295 |
|
| |
|
|
|
|
|
|
| Net interest expense |
(61,774 |
) |
(25,228 |
) |
(73,310 |
) |
(29,465 |
) |
(57,031 |
) |
(23,423 |
) |
| Income tax (expense)
recovery |
(449 |
) |
(235 |
) |
225 |
|
110 |
|
(32 |
) |
(16 |
) |
| Other items including realized
and |
|
|
|
|
|
|
|
unrealized loss on derivative |
|
|
|
|
|
|
|
instruments (2) |
(26,624 |
) |
(9,438 |
) |
(17,786 |
) |
(5,250 |
) |
(18,270 |
) |
(5,492 |
) |
| Gain on sale of
equity-accounted |
|
|
|
|
|
|
|
investments |
|
— |
|
|
— |
|
|
150 |
|
| Net income / equity
income of equity-accounted vessels |
54,225 |
|
24,392 |
|
75,360 |
|
35,343 |
|
42,398 |
|
21,514 |
|
|
|
|
|
|
|
|
|
| Net income / equity
income |
|
|
|
|
|
|
|
of equity-accounted vessels |
54,225 |
|
24,392 |
|
75,360 |
|
35,343 |
|
42,398 |
|
21,514 |
|
| Depreciation and
amortization |
27,436 |
|
13,804 |
|
26,075 |
|
13,006 |
|
29,799 |
|
14,416 |
|
| Net interest expense |
61,774 |
|
25,228 |
|
73,310 |
|
29,465 |
|
57,031 |
|
23,423 |
|
| Income tax expense
(recovery) |
449 |
|
235 |
|
(225 |
) |
(110 |
) |
32 |
|
16 |
|
|
EBITDA |
143,884 |
|
63,659 |
|
174,520 |
|
77,704 |
|
129,260 |
|
59,369 |
|
| Specific income
statement items affecting EBITDA: |
|
|
|
|
|
|
Adjustments for direct financing and sales-type lease to a cash
basis |
26,752 |
|
9,677 |
|
26,381 |
|
9,499 |
|
17,701 |
|
6,470 |
|
|
Amortization of in-process contracts and other |
(1,759 |
) |
(956 |
) |
(1,738 |
) |
(945 |
) |
(1,758 |
) |
(956 |
) |
|
Other items including realized and unrealized loss on derivative
instruments(2) |
26,624 |
|
9,438 |
|
17,786 |
|
5,250 |
|
18,270 |
|
5,492 |
|
|
Loss on sale of equity-accounted investments |
|
— |
|
|
— |
|
|
(150 |
) |
|
Adjusted EBITDA from equity-accounted vessels
(3) |
195,501 |
|
81,818 |
|
216,949 |
|
91,508 |
|
163,473 |
|
70,225 |
|
|
(1) |
|
The Company’s proportionate share of its equity-accounted vessels
and other investments ranged from 20% to 52%. |
| (2) |
|
Includes
credit loss provision adjustments recorded upon the adoption of ASU
2016-13 for the three months ended September 30, 2020 and June 30,
2020. |
| (3) |
|
Adjusted
EBITDA from equity-accounted vessels represents the Company’s
proportionate share of adjusted EBITDA from its equity-accounted
vessels and other investments. |
Teekay Corporation Appendix E - Reconciliation of Non-GAAP
Financial Measures Total Adjusted Revenues (in thousands of
U.S. dollars)
|
|
Three Months Ended |
|
|
September 30, |
June 30, |
September 30, |
| |
2020 |
2020 |
2019
(1) |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
Revenues |
396,517 |
|
482,805 |
|
425,836 |
|
| Proportionate
share of revenues |
|
|
|
|
from equity-accounted joint ventures |
107,619 |
|
115,422 |
|
91,490 |
|
| Less proportionate
share of voyage revenues |
|
|
|
|
earned directly from equity-accounted joint ventures |
(6,021 |
) |
(5,569 |
) |
(5,501 |
) |
|
Total adjusted revenues |
498,115 |
|
592,658 |
|
511,825 |
|
|
(1) |
|
Comparative balances relating to the three months ended September
30, 2019 have been recast to reflect results consistent with the
presentation in the Company’s 2019 Annual Report on Form 20-F and
this report for the three and nine months ended September 30,
2020. |
Teekay Corporation Appendix E - Reconciliation of Non-GAAP
Financial MeasuresAdjusted EBITDA - Teekay Parent (in thousands of
U.S. dollars)
| |
Three Months
Ended June 30, 2020 |
| |
(unaudited) |
| |
|
|
|
|
Teekay |
| |
|
|
|
Corporate |
Parent |
| |
FPSOs |
Other |
G&A |
Total |
| |
|
|
|
|
|
|
|
|
Teekay Parent (loss) income from vessel operations |
|
(11,540 |
) |
|
2,892 |
(5,423 |
) |
|
(14,071 |
) |
| Write-down of
vessels |
|
13,565 |
|
|
— |
— |
|
|
13,565 |
|
| Depreciation and
amortization |
|
1,761 |
|
|
— |
— |
|
|
1,761 |
|
| Amortization of
operating lease liability and other |
|
(1,536 |
) |
|
596 |
— |
|
|
(940 |
) |
| Daughter Entities
distributions |
|
— |
|
|
— |
9,401 |
|
|
9,401 |
|
|
Adjusted EBITDA – Teekay Parent |
|
2,250 |
|
|
3,488 |
3,978 |
|
|
9,716 |
|
| |
Three Months
Ended September 30, 2019 |
| |
(unaudited) |
| |
|
|
|
|
Teekay |
| |
|
|
|
Corporate |
Parent |
| |
FPSOs |
Other |
G&A |
Total |
| |
|
|
|
|
|
|
|
|
Teekay Parent (loss) income from vessel operations |
|
(194,415 |
) |
|
8 |
(2,720 |
) |
|
(197,127 |
) |
| Write-down of
vessels |
|
175,000 |
|
|
— |
— |
|
|
175,000 |
|
| Depreciation and
amortization |
|
7,811 |
|
|
38 |
— |
|
|
7,849 |
|
| Amortization of
in-process revenue contracts and other |
|
(1,483 |
) |
|
603 |
— |
|
|
(880 |
) |
| Daughter Entities
distributions |
|
— |
|
|
— |
5,090 |
|
|
5,090 |
|
|
Adjusted EBITDA – Teekay Parent |
|
(13,087 |
) |
|
649 |
2,370 |
|
|
(10,068 |
) |
Teekay Corporation Appendix E - Reconciliation of Non-GAAP
Financial Measures Net Interest Expense - Teekay Parent (in
thousands of U.S. dollars)
|
|
Three Months Ended |
|
|
September 30, |
June 30, |
September 30, |
| |
2020 |
2020 |
2019 |
| |
(unaudited) |
(unaudited) |
(unaudited) |
|
Interest expense |
(53,175 |
) |
(59,245 |
) |
(67,707 |
) |
| Interest
income |
1,754 |
|
2,314 |
|
1,485 |
|
| Interest
expense net of interest income consolidated |
(51,421 |
) |
(56,931 |
) |
(66,222 |
) |
| Less:
Non-Teekay Parent interest expense net of interest income |
(41,338 |
) |
(46,371 |
) |
(55,545 |
) |
| Interest expense
net of interest income - Teekay Parent |
(10,083 |
) |
(10,560 |
) |
(10,677 |
) |
| Teekay Parent
non-cash accretion and loan cost amortization |
2,188 |
|
2,191 |
|
2,204 |
|
| Teekay Parent
realized losses on interest rate swaps |
(342 |
) |
(306 |
) |
(241 |
) |
|
Net interest expense - Teekay Parent |
(8,237 |
) |
(8,675 |
) |
(8,714 |
) |
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 impact of COVID-19 and related
global events on the Company’s business and financial results;
fixed charter coverage for Teekay LNG’s and Teekay Tankers’ fleets
for the remainder of 2020 and 2021; the timing and cost of the
remediation of the Banff field’s subsea infrastructure and the
Banff FPSO unit's decommissioning and recycling; and the Company's
liquidity and the Teekay Group’s positioning for both near-term
market volatility and to create long-term shareholder value. The
following factors are among those that could cause actual results
to differ materially from the forward-looking statements, which
involve risks and uncertainties, and that should be considered in
evaluating any such statement: market or counterparty reaction to
changes in exploration, production and storage of offshore oil and
gas, either generally or in particular regions that would impact
expected future growth; changes in the demand for oil, refined
products, LNG or LPG; changes in trading patterns significantly
affecting overall vessel tonnage requirements; greater or less than
anticipated levels of vessel newbuilding orders and deliveries and
greater or less than anticipated rates of vessel scrapping; changes
in global oil prices or tanker rates; OPEC+ and non-OPEC production
and supply levels; the duration and extent of the COVID-19 pandemic
and any resulting effects on the markets in which the Company
operates; the impact of the pandemic on the Company’s ability to
maintain safe and efficient operations; issues with vessel
operations; higher than expected costs and expenses, off-hire days
or dry-docking requirements; higher than expected costs and/or
delays associated with the remediation of the Banff field or the
decommission/recycling of the Banff FPSO unit; changes in
applicable industry laws and regulations and the timing of
implementation of new laws and regulations, including IMO 2030; the
potential for early termination of long-term contracts of existing
vessels; changes in borrowing costs or equity valuations;
declaration by Teekay LNG’s board of directors of common unit
distributions; available cash to reduce financial leverage at
Teekay Parent, Teekay LNG and Teekay Tankers; the impact of
geopolitical tensions and changes in global economic conditions;
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, 2019. 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.
Reflects unrealized gains (losses) relating to the change in the
mark-to-market value of derivative instruments that are not
designated in qualifying hedging relationships for accounting
purposes, including those gains (losses) included in the Company's
proportionate share of equity income (loss) from joint
ventures.
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