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HAMILTON, BERMUDA--(Marketwired - Nov. 6, 2014) -
Highlights
-- Third quarter 2014 total cash flow from vessel operations of $251.5
million, an increase of 29 percent from the same period of the prior
year.
-- Third quarter 2014 adjusted net loss attributable to stockholders of
Teekay of $12.6 million, or $0.17 per share (excluding specific items
which increased GAAP net income by $15.0 million, or $0.20 per share).
-- In September 2014, Teekay announced intention to increase its dividend
by 75-80 percent, with future increases primarily linked to growing cash
flows from its two MLP subsidiaries.
-- In September 2014, the Petrojarl Knarr FPSO was offered for sale to
Teekay Offshore; FPSO unit arrived in Norway and is anticipated to
commence its charter contract in December 2014.
-- Total consolidated liquidity of approximately $1.5 billion as at
September 30, 2014.
Teekay Corporation (Teekay or the Company) TK today reported adjusted net loss attributable to its stockholders(1) of $12.6 million, or $0.17 per share, for the quarter ended September 30, 2014, compared to adjusted net loss attributable to its stockholders of $36.0 million, or $0.51 per share, for the same period of the prior year. Adjusted net loss attributable to its stockholders excludes a number of specific items that had the net effect of increasing GAAP net income by $15.0 million, or $0.20 per share, for the three months ended September 30, 2014 and increasing GAAP net loss by $13.1 million, or $0.18 per share, for the same period of the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net income attributable to its stockholders of $2.4 million, or $0.03 per share, for the quarter ended September 30, 2014, compared to net loss attributable to its stockholders of $49.1 million, or $0.69 per share, for the same period of the prior year. Net revenues(2) for the third quarter of 2014 increased to $456.0 million, compared to $426.8 million for the same period of the prior year.
For the nine months ended September 30, 2014, the Company reported adjusted net loss attributable to its stockholders(1) of $29.2 million, or $0.40 per share, compared to adjusted net loss attributable to its stockholders of $81.0 million, or $1.15 per share, for the same period of the prior year. Adjusted net loss attributable to its stockholders excludes a number of specific items that had the net effect of increasing GAAP net loss by $11.9 million, or $0.17 per share, for the nine months ended September 30, 2014 and decreasing GAAP net loss by $37.1 million, or $0.53 per share, for the same period of the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net loss attributable to its stockholders of $41.1 million, or $0.57 per share, for the nine months ended September 30, 2014, compared to net loss attributable to its stockholders of $43.9 million, or $0.62 per share, for the same period of the prior year. Net revenues(2) for the nine months ended September 30, 2014 increased to $1,346.3 million, compared to $1,256.0 million for the same period of the prior year.
On October 3, 2014, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended September 30, 2014. The cash dividend was paid on October 31, 2014 to all shareholders of record on October 17, 2014.
1. Adjusted net loss attributable to stockholders of Teekay is a non-GAAP
financial measure. Please refer to Appendix A to this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable financial measure under United States generally
accepted accounting principles (GAAP) and for information about specific
items affecting net income that are typically excluded by securities
analysts in their published estimates of the Company's financial
results.
2. Net revenues is a non-GAAP financial measure used by certain investors
to measure the financial performance of shipping companies. Please see
Appendix E to this release for a reconciliation of this non-GAAP measure
as used in this release to the most directly comparable financial
measure under GAAP.
"While the third quarter 2014 results improved from the previous quarter, our results were lower than anticipated due to lower than expected production on the Foinaven FPSO relating to subsea issues, and the delayed start-up of the Banff FPSO and the Hi-Load DP unit charter contract," commented Peter Evensen, Teekay's President and Chief Executive Officer.
"We recently announced our new dividend policy which represents the next step in Teekay's transformation into a pure-play owner of two general partnerships," Mr. Evensen continued. "Based on the increase in cash flows we expect to receive from our general partner and limited partner ownership interests in Teekay Offshore following the proposed dropdown of the Knarr FPSO, we intend to raise Teekay's annualized cash dividend to between $2.20 and $2.30 per share, representing an increase of approximately 75 to 80 percent. In addition, with a project backlog of approximately $5 billion of known growth capital expenditures at Teekay Offshore and Teekay LNG, we expect that Teekay's dividend will continue to grow by approximately 20 percent per annum for at least the three years following the initial dividend increase."
Mr. Evensen added, "The proposed dropdown of the Knarr FPSO is an important milestone in Teekay's transformation because it will provide for significant deleveraging of Teekay Parent's balance sheet. The Knarr FPSO, which has now been offered to Teekay Offshore and is currently being reviewed by Teekay Offshore's Conflicts Committee, is anticipated to achieve first oil in December of this year."
Operating Results
The following tables highlight certain financial information for each of Teekay's four publicly-listed entities: Teekay Offshore Partners L.P. (Teekay Offshore) TOO, Teekay LNG Partners L.P. (Teekay LNG) TGP, Teekay Tankers Ltd. (Teekay Tankers) TNK and Teekay Parent (which excludes the results attributed to Teekay Offshore, Teekay LNG and Teekay Tankers). A brief description of each entity and an analysis of its respective financial results follow the tables below. Please also refer to the "Fleet List" section below and Appendix B to this release for further details.
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Three Months Ended September 30, 2014
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(unaudited)
(in thousands Teekay
of U.S. Teekay Teekay Teekay Teekay Consolidation Corporation
dollars) Offshore LNG Tankers Parent Adjustments Consolidated
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Net revenues(1) 229,820 100,328 50,598 102,027 (26,773) 456,000
Vessel
operating (91,638)(23,538)(22,935) (67,975) - (206,086)
expense
Time-charter
hire expense (7,085) - (6,309) (31,932) 28,428 (16,898)
Depreciation
and (49,759)(23,309)(12,451) (21,316) - (106,835)
amortization
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CFVO -
Consolidated 114,630 71,455 18,464 (14,003) 1,530 192,076
(2)(3)(4)
CFVO - Equity
Investments(5) 5,506 51,829 2,695 943 (1,530) 59,443
CFVO - Total 120,136 123,284 21,159 (13,060) - 251,519
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Three Months Ended September 30, 2013
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(unaudited)
(in thousands Teekay
of U.S. Teekay Teekay Teekay Teekay Consolidation Corporation
dollars) Offshore LNG Tankers Parent Adjustments Consolidated
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Net revenues(1) 207,347 100,319 38,996 104,142 (24,031) 426,773
Vessel
operating (89,788)(24,655)(21,859) (81,277) - (217,579)
expense
Time-charter
hire expense (14,142) - (1,216) (33,389) 23,261 (25,486)
Depreciation
and (51,920)(24,440)(11,935) (20,819) - (109,114)
amortization
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CFVO -
Consolidated 87,469 73,291 12,604 (34,531) - 138,833
(2)(3)(4)
CFVO - Equity
Investments(5) 4,852 51,870 1,416 (1,771) - 56,367
CFVO - Total 92,321 125,161 14,020 (36,302) - 195,200
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1. Net revenues represents voyage revenues less voyage expenses, which
comprise all expenses relating to certain voyages, including bunker fuel
expenses, port fees, cargo loading and unloading expenses, canal tolls,
agency fees and commissions. Net voyage revenues is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. Please see Appendix E for a reconciliation of
this non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
2. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization of
in-process revenue contracts, vessel write downs, gains and losses on
the sale of vessels, adjustments for direct financing leases to a cash
basis, and unrealized gains and losses relating to derivatives, but
includes realized gains and losses on the settlement of foreign currency
forward contracts. CFVO - Consolidated represents CFVO from vessels that
are consolidated on the Company's financial statements. Cash flow from
vessel operations is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping companies.
Please refer to Appendix C and Appendix E of this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
3. Excludes CFVO relating to assets acquired from Teekay Parent for the
periods prior to their acquisition by Teekay Offshore, Teekay LNG and
Teekay Tankers, respectively, as those results are included in the
historical results for Teekay Parent.
4. In addition to CFVO from directly owned vessels, Teekay Parent also
receives cash dividends and distributions from its daughter public
companies. For the three months ended September 30, 2014 and 2013,
Teekay Parent received dividends and distributions from Teekay LNG,
Teekay Offshore and Teekay Tankers totaling $43.8 million and $40.1
million, respectively. The dividends and distributions received by
Teekay Parent include, among others, those made with respect to its
general partner interests in Teekay Offshore and Teekay LNG. Please
refer to Appendix D to this release for further details.
5. CFVO - Equity Investments represents the Company's proportionate share
of CFVO from its equity-accounted vessels and other investments. Please
refer to Appendix E of this release for a reconciliation of this non-
GAAP measure as used in this release to the most directly comparable
GAAP financial measure.
Teekay Offshore Partners L.P.
Teekay Offshore is an international provider of marine transportation, oil production, storage services and floating accommodation to the offshore oil industry through its fleet of 33 shuttle tankers (including two charter-in vessels and one vessel currently in lay-up as a candidate for conversion to an offshore unit), six floating production, storage and offloading (FPSO) units (including one committed FPSO conversion unit), six floating storage and offtake (FSO) units (excluding one existing shuttle tanker scheduled to commence conversion to an FSO unit following expiry of its current charter contract in 2015), 10 long-haul towing and anchor handling vessels (including six vessels Teekay Offshore has agreed to acquire between the fourth quarter of 2014 and first quarter of 2015 and four newbuildings scheduled to deliver during 2016), three floating accommodation unit newbuildings, one Hi-Load Dynamic Positioning (DP) unit and four conventional oil tankers. Teekay Offshore's interests in these vessels range from 50 to 100 percent. Teekay Offshore also has the right to participate in certain other FPSO and vessel opportunities pursuant to the omnibus agreement with Teekay. Teekay Parent currently owns a 29.2 percent interest in Teekay Offshore (including the 2 percent sole general partner interest).
For the third quarter of 2014, Teekay Offshore's quarterly distribution was $0.5384 per common unit. The cash distribution to be received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totaled $17.7 million for the third quarter of 2014, as detailed in Appendix D to this release.
Cash flow from vessel operations from Teekay Offshore increased to $120.1 million in the third quarter of 2014, from $92.3 million in the same period of the prior year. The increase was primarily due to the contributions from the Voyageur Spirit FPSO unit following the commencement of its time-charter in August 2013, the three BG shuttle tanker newbuildings following commencement of their respective time-charters in August and November 2013 and January 2014 and the Suksan Salamander FSO following commencement of its time-charter in August 2014. These increases were partially offset by the lay-up and sale of older shuttle and conventional tankers during 2013 and 2014 as their related charter contracts expired or terminated and the scheduled drydocking of the Navion Saga FSO during the third quarter of 2014.
The results for the third quarter of 2014 were negatively impacted by the delayed start-up of the Hi-Load DP unit charter contract. The Hi-Load DP unit continues to undergo operational testing, and related delays in commencement of operations may affect previously anticipated cash flow from the unit. Upon successful completion of the testing, the unit is expected to commence its time-charter contract with Petrobras in Brazil.
In October 2014, Teekay Offshore, through its 50/50 joint venture with Odebrecht Oil & Gas S.A., signed a letter of intent with Petroleo Brasileiro SA (Petrobras) to provide an FPSO unit for the Libra field located in the Santos Basin offshore Brazil. The contract, which is expected to be finalized in the fourth quarter of 2014, will be serviced by a new FPSO unit converted from Teekay Offshore's 1995-built shuttle tanker, the Navion Norvegia. The conversion project will be completed at Sembcorp Marine's Jurong Shipyard in Singapore and is scheduled to commence operations in early-2017 under a 12-year firm period fixed-rate contract with Petrobras. The FPSO conversion is expected to be completed for a total fully built-up cost of approximately $1 billion.
In late-October 2014, Teekay Offshore, through its wholly-owned subsidiary ALP Maritime Services B.V. (ALP), agreed to acquire six modern on-the-water long-distance towing and anchor handling vessels for approximately $220 million. The vessels to be acquired were built between 2006 and 2010 and are all equipped with dynamic positioning (DP) capabilities. Teekay Offshore expects to take delivery of the six vessels during the fourth quarter of 2014 and the first quarter of 2015. Including these vessels, along with ALP's four state-of-the-art long-distance towing and anchor handling newbuildings scheduled to deliver in 2016, ALP will become the world's largest owner and operator of DP towing and anchor handling vessels. All ten vessels will be capable of long-distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units, including FPSO units, floating liquefied natural gas (FLNG) units and floating drill rigs. The acquisition remains subject to customary closing conditions, including the completion of vessel inspections and documentation.
Teekay LNG Partners L.P.
Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services, generally under long-term, fixed-rate charter contracts, through its current fleet of 44 LNG carriers (including one LNG regasification unit and 15 newbuildings under construction), 26 LPG/Multigas carriers (including nine newbuildings under construction) and eight conventional tankers. Teekay LNG's interests in these vessels range from 20 to 100 percent. In addition, Teekay LNG, through its 50/50 LPG joint venture with Exmar NV (Exmar LPG BVBA), charters-in four LPG carriers. Teekay Parent currently owns a 34.0 percent interest in Teekay LNG (including the 2 percent sole general partner interest).
For the third quarter of 2014, Teekay LNG's quarterly distribution was $0.6918 per common unit. The cash distribution to be received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay LNG totaled $25.3 million for the third quarter of 2014, as detailed in Appendix D to this release.
Teekay LNG's total cash flow from vessel operations, including cash flows from equity-accounted vessels, was $123.3 million in the third quarter of 2014, compared to $125.2 million in the same period of the prior year. The decrease was primarily due to the sale of three 2000 and 2001-built conventional tankers and four older LPG carriers in Exmar LPG BVBA in 2013 and 2014 and the scheduled dry docking of one LNG carrier and two LPG carriers in Exmar LPG BVBA during the third quarter of 2014, partially offset by the acquisitions of, and contributions from, the two Awilco LNG carriers in late-2013 and higher revenues from Exmar LPG BVBA as a result of three newbuilding deliveries in 2014.
In late-October 2014, Teekay LNG agreed to acquire a 2003-built 10,200 cubic meter (cbm) LPG carrier, the Norgas Napa, from I.M. Skaugen SE (Skaugen) for approximately $27 million. Teekay LNG expects to take delivery of the vessel in mid-November 2014. Upon delivery, Skaugen will bareboat-charter the vessel back for a period of five-years at a fixed rate plus a profit share component based on actual earnings of the vessel, which is trading in Skaugen's Norgas pool.
Teekay Tankers Ltd.
Teekay Tankers currently owns a fleet of 28 vessels, including 11 Aframax tankers, 10 Suezmax tankers, three Long Range 2 (LR2) product tankers, three Medium-Range (MR) product tankers and a 50 percent interest in a Very Large Crude Carrier (VLCC). In addition, Teekay Tankers has contracted to charter-in six Aframax and four LR2 product tankers. Of the 38 vessels, 12 are employed on fixed-rate time-charters, generally ranging from one to three years in initial duration, with the remaining vessels trading in spot tanker pools. In addition, Teekay Tankers owns a minority interest in Tanker Investments Ltd. (TIL) TIL, which currently owns a fleet of 14 modern tankers. Based on its current ownership of Teekay Tankers Class A common stock and its ownership of 100 percent of the outstanding Class B stock, Teekay Parent currently owns a 28.7 percent economic interest in and has voting control of Teekay Tankers.
For the third quarter of 2014, Teekay Tankers declared a dividend of $0.03 per share. Based on its ownership of Teekay Tankers Class A and Class B shares, the dividend paid to Teekay Parent totaled $0.8 million for the third quarter of 2014.
Cash flow from vessel operations from Teekay Tankers increased to $21.2 million in the third quarter of 2014, from $14.0 million in the same period of the prior year. The increase is primarily due to stronger average spot tanker rates in the third quarter of 2014 compared to the same period in the prior year, an increase in fleet size due to the addition of six in-chartered vessels during 2014 and higher equity income as a result of commercial and technical management fees earned through Teekay Tankers' 50 percent interest in the conventional tanker commercial management and technical management operations acquired from Teekay on August 1, 2014 (Teekay Operations).
In October 2014, Teekay Tankers secured time charter-in contracts for two additional Aframax vessels, which increased Teekay Tankers' total time charter-in fleet to ten vessels. The new time charter-in contracts have an average daily rate of $18,000 and firm contract periods of six months to 33 months, with extension options.
Teekay Parent
In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns five FPSO units and one VLCC vessel. As at November 1, 2014, Teekay Parent also had seven charter-in conventional tankers (including four Aframax tankers owned by Teekay Offshore), two charter-in LNG carriers owned by Teekay LNG, and three charter-in FSOs and two shuttle tankers owned by Teekay Offshore.
For the third quarter of 2014, Teekay Parent generated negative cash flow from vessel operations of $13.1 million, compared to negative cash flow from vessel operations of $36.3 million in the same period of the prior year. The reduction in negative cash flow is primarily due to the Banff FPSO recommencing operations under its time-charter contract in July 2014 following a storm event in late-2011, the re-delivery of several in-chartered tankers over the past year and higher spot tanker rates.
In July 2014, repairs to the gas compressors on the Foinaven FPSO were completed and the unit was available to produce at its maximum capacity. However, due to issues with the subsea flow lines, which are the responsibility of the charterer, the field was unable to produce at maximum capacity. As a result, the Foinaven FPSO is expected to generate lower revenues until these issues are resolved by the charterer.
In late-September, Teekay Parent announced a new dividend policy under which the Company's future dividend payments will be primarily linked to cash flows received from the Company's general partnership (GP) and limited partnership (LP) interests in its two master limited partnerships, Teekay LNG and Teekay Offshore, together with other dividends received, after deductions for parent company level corporate general and administrative expenses and any reserves determined to be required by the Company's Board of Directors. The new dividend policy is expected to take effect for the quarter immediately following the completion of the sale of the Petrojarl Knarr FPSO unit to Teekay Offshore.
In late-June 2014, Teekay Parent took delivery of the Petrojarl Knarr FPSO newbuilding in South Korea and the unit arrived in Norway in mid-September 2014. Following installation and offshore testing on the Knarr field, the unit is anticipated to commence its ten-year charter contract with BG Group in December 2014. In September 2014, Teekay Parent formally offered to sell the Petrojarl Knarr FPSO to Teekay Offshore for its fully built-up cost of approximately $1.16 billion. The offer is currently being reviewed by the Conflicts Committee of Teekay Offshore's Board of Directors. Once approved by the Conflicts Committee and Teekay Offshore's Board of Directors, the sale will remain subject to the Petrojarl Knarr FPSO achieving first oil.
Fleet List
The following table summarizes Teekay's consolidated fleet of 192 vessels as at November 1, 2014, including chartered-in vessels and vessels under construction but excluding vessels managed for third parties:
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Number of Vessels(1)
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Owned Chartered-in Newbuildings /
Vessels Vessels Conversions Total
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Teekay Parent Fleet(2)(3)
Aframax Tankers (4) - 2 - 2
VLCC Tanker 1 - - 1
MR Product Tanker - 1 - 1
FPSO Units 4 - 1 5
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Total Teekay Parent Fleet 5 3 1 9
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Teekay Offshore Fleet(5) 53 2 8 63
Teekay LNG Fleet 54 4 24 82
Teekay Tankers Fleet 28 10 - 38
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Total Teekay Consolidated Fleet 140 19 33 192
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1. Ownership interests in these vessels range from 20 percent to 100
percent.
2. Excludes two LNG carriers chartered-in from Teekay LNG.
3. Excludes two shuttle tankers and three FSO units chartered-in from
Teekay Offshore.
4. Excludes four Aframax tankers chartered-in from Teekay Offshore.
5. Owned Vessels includes six long-distance towing and anchor-handling
vessels that Teekay Offshore agreed to acquire in October 2014 and which
are expected to deliver during the fourth quarter of 2014 and first
quarter of 2015.
Liquidity
As at September 30, 2014, the Company had consolidated liquidity of $1.5 billion (consisting of $705.9 million of cash and cash equivalents and $777.1 million of undrawn revolving credit facilities), of which $469.9 million of liquidity (consisting of $337.5 million cash and cash equivalents and $132.4 million of undrawn revolving credit facilities) is attributable to Teekay Parent.
Conference Call
The Company plans to host a conference call on Thursday, November 6, 2014 at 11:00 a.m. (ET) to discuss its results for the third quarter of 2014. An accompanying investor presentation will be available on Teekay's website at www.teekay.com prior to the start of the call. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:
-- By dialing (800) 499-4035 or (416) 204-9269, if outside North America,
and quoting conference ID code 7001692.
-- 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
30 days).
The conference call will be recorded and available until Thursday, November 13, 2014. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 7001692.
About Teekay
Teekay Corporation is a portfolio manager and project developer in the marine midstream space that owns a 2 percent general partner interest, all of the outstanding incentive distributions rights and a portion of the outstanding limited partner interests in Teekay LNG Partners L.P. TGP and Teekay Offshore Partners L.P. TOO. In addition, Teekay has a controlling ownership interest in Teekay Tankers Ltd. TNK and a fleet of directly-owned vessels. The combined Teekay entities manage and operate consolidated assets of over $12 billion, comprised of over 190 liquefied gas, offshore, and conventional tanker assets. With offices in 15 countries and approximately 6,700 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.
Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".
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TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except share and per share data)
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Three Months Ended Nine Months Ended
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September September September September
30, June 30, 30, 30, 30,
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2014 2014 2013 2014 2013
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(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
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REVENUES(1) 490,183 452,254 454,795 1,448,931 1,336,539
Voyage expenses (34,183) (33,439) (28,022) (102,634) (80,491)
Vessel operating
expenses (1)(2) (206,086) (201,714) (217,579) (608,986) (601,021)
Time-charter
hire expense (16,898) (9,714) (25,486) (42,904) (79,482)
Depreciation and
amortization (106,835) (103,373) (109,114) (313,666) (321,377)
General and
administrative
(2) (31,585) (36,945) (31,932) (106,408) (106,598)
Asset
impairments (3) (4,759) - (57,502) (4,759) (57,502)
Loan loss
recoveries
(provision) (4) - 2,521 (15,344) 2,521 (25,551)
Gain on sale of
vessels and
equipment 1,217 9,615 726 10,670 2,035
Restructuring
charges (2,665) 244 (461) (3,060) (4,304)
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Income (loss)
from vessel
operations 88,389 79,449 (29,919) 279,705 62,248
Interest expense
(2) (52,206) (49,656) (45,817) (151,195) (133,014)
Interest income
(2) 2,786 793 1,543 5,362 4,579
Realized and
unrealized
(loss) gain on
derivative
instruments (2) (5,792) (75,331) (26,707) (128,371) 15,539
Equity income
(5) 39,932 35,271 26,753 102,697 101,440
Income tax
(expense)
recovery (3,111) (3,193) 662 (9,102) (3,711)
Foreign exchange
gain (loss) 19,497 (2,046) (11,837) 16,557 (8,970)
Other (loss)
income - net (1,671) (734) 625 5,846 4,481
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Net income
(loss) 87,824 (15,447) (84,697) 121,499 42,592
Less: Net
(income) loss
attributable to
non-controlling
interests (85,450) (27,540) 35,593 (162,600) (86,465)
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Net income
(loss)
attributable to
stockholders of
Teekay
Corporation 2,374 (42,987) (49,104) (41,101) (43,873)
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Income (loss)
per common
share of Teekay
- Basic $0.03 ($0.60) ($0.69) ($0.57) ($0.62)
- Diluted $0.03 ($0.60) ($0.69) ($0.57) ($0.62)
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Weighted-average
number of
commonshares
outstanding
- Basic 72,393,072 72,036,526 70,755,282 71,925,307 70,348,872
- Diluted 73,736,393 72,036,526 70,755,282 71,925,307 70,348,872
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1. The costs of business development and engineering studies relating to
North Sea FPSO and FSO projects that the Company is pursuing are
substantially reimbursable from customers upon completion. For the three
and nine months ended September 30, 2014, $0.5 million and $2.6 million
of costs were recognized. For the three and nine months ended September
30, 2013, $17.5 million of revenues and $20.1 million of costs were
recognized upon completion of two North Sea FPSO studies, and $20.3
million of revenues and $22.7 million of costs were recognized upon
completion of three North Sea FPSO studies, respectively.
2. 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 statements of income (loss). The realized
(losses) gain relate to the amounts the Company actually received or
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 Nine Months Ended
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September September September September
30, June 30, 30, 30, 30,
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2014 2014 2013 2014 2013
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Realized
(losses) gains
relating to:
Interest rate
swaps (32,106) (30,755) (30,254) (92,352) (91,472)
Termination of
interest rate
swap
agreements - - (31,798) 1,000 (35,985)
Foreign
currency
forward
contracts (434) 110 152 (1,608) (1,333)
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(32,540) (30,645) (61,900) (92,960) (128,790)
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Unrealized gains
(losses)
relating to:
Interest rate
swaps 31,560 (39,096) 32,542 (32,934) 148,657
Foreign
currency
forward
contracts (3,897) (1,926) 2,651 (2,772) (4,328)
Stock purchase
warrants (915) (3,664) - 295 -
------------------------------------------------------------
26,748 (44,686) 35,193 (35,411) 144,329
------------------------------------------------------------
Total realized
and unrealized
(losses) gains
on non-
designated
derivative
instruments (5,792) (75,331) (26,707) (128,371) 15,539
------------------------------------------------------------
------------------------------------------------------------
3. The Company recognized asset impairments of $4.8 million for the three
and nine months ended September 30, 2014 related to the impairment of
one 1990s-built shuttle tanker owned by Teekay Offshore. The impairment
was the result of the current contract expiring in December 2014 which
is expected to be re-chartered at a lower rate. Asset impairments of
$57.5 million for the three and nine months ended September 30, 2013
include the impairment of four shuttle tankers owned by Teekay Offshore,
including the impairment of $37.2 million related to two shuttle tankers
which Teekay Offshore owns through a 50 percent-owned consolidated
subsidiary. The impairments were the result of the re-contracting of two
of the vessels at lower rates than expected during the third quarter of
2013, the cancellation of a short-term contract in September 2013 and a
change in expectations for a contract renewal for a shuttle tanker
operating in Brazil.
4. The Company recovered $2.5 million for the three months ended June 30,
2014, related to a receivable for an FPSO front-end engineering and
design study (FEED) completed in 2013, which was previously provided
for. The Company also recognized $11.5 million and $21.7 million of
allowances, respectively, for the three and nine months ended September
30, 2013, in relation to its investments in three term loans. These loan
loss provisions were reversed later in 2013.
5. The Company's proportionate share of items within equity income as
identified in Appendix A of this release, is as detailed in the table
below. By excluding these items from equity income, 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.
Three Months Ended Nine Months Ended
------------------------------------------------------------
September September September September
30, June 30, 30, 30, 30,
------------------------------------------------------------
2014 2014 2013 2014 2013
------------------------------------------------------------
Equity income 39,932 35,271 26,753 102,697 101,440
Proportionate
share of
unrealized
(gains) losses
on derivative
instruments (6,113) 1,990 (1,707) (3,214) (24,256)
Dilution gain on
share issuance
by TIL - - - (4,108) -
Other(i) (8,117) (9,772) 4,100 (16,923) 4,100
------------------------------------------------------------
Equity income
adjusted for
items in
Appendix A 25,702 27,489 29,146 78,452 81,284
------------------------------------------------------------
------------------------------------------------------------
i. Includes gains on sale of vessels in Exmar LPG BVBA joint venture during
2014 and restructuring accruals and loan loss provision in Sevan Marine
ASA during 2013.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at September 30, As at June 30, As at December 31
-----------------------------------------------------
2014 2014 2013
-----------------------------------------------------
(unaudited) (unaudited) (unaudited)
-----------------------------------------------------
ASSETS
Cash and cash
equivalents 705,896 748,900 614,660
Other current assets 513,739 643,471 622,771
Restricted cash -
current 3,142 3,935 4,748
Restricted cash - long-
term 498,537 499,108 497,984
Assets held for sale(1) 6,758 - 176,247
Vessels and equipment 6,377,906 6,424,695 6,554,820
Advances on newbuilding
contracts and
conversion costs 1,496,349 1,403,850 796,324
Derivative assets 137,411 131,983 92,837
Investment in equity
accounted investees 854,669 807,700 690,309
Investment in term
loans - - 211,579
Investment in direct
financing leases 767,934 774,026 727,262
Other assets 481,648 348,314 291,723
Intangible assets 97,886 101,157 107,898
Goodwill 168,572 168,572 166,539
----------------------------------------------------------------------------
Total assets 12,110,447 12,055,711 11,555,701
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and
accrued liabilities 526,016 571,979 565,239
Liabilities associated
with assets held for
sale(1) - - 168,007
Current portion of
long-term debt 736,285 721,317 1,028,093
Long-term debt 6,523,719 6,576,224 5,679,706
Derivative liabilities 562,064 549,515 443,569
In-process revenue
contracts 183,299 159,816 179,852
Other long-term
liabilities 342,802 367,698 271,621
Redeemable non-
controlling interest 17,286 15,149 16,564
Equity:
Non-controlling
interests 2,117,953 2,009,585 2,071,262
Stockholders of Teekay 1,101,023 1,084,428 1,131,788
----------------------------------------------------------------------------
Total liabilities and
equity 12,110,447 12,055,711 11,555,701
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. In connection with the expected sale of a shuttle tanker to Teekay
Offshore's 50/50 joint venture with Odebrecht for conversion to an FPSO
unit, which is expected to commence a 12-year contract in early-2017,
the vessel and equipment related to the vessel were classified as
"Assets held for sale" as at September 30, 2014. In connection with the
2014 sale of four conventional tanker owning companies to TIL, the
vessels and equipment, long-term debt and working capital related to the
four vessel-owning companies were classified as "Assets held for sale"
and "Liabilities associated with assets held for sale" as at December
31, 2013.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months Ended
------------------------------
September 30
------------------------------
2014 2013
------------------------------
(unaudited) (unaudited)
------------------------------
Cash and cash equivalents provided by (used
for)
OPERATING ACTIVITIES
----------------------------------------------------------------------------
Net operating cash flow 291,163 95,027
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term debt 2,095,834 1,718,226
Scheduled repayments of long-term debt (691,861) (211,424)
Prepayments of long-term debt (786,890) (823,170)
(Increase) decrease in restricted cash (565) 31,042
Net proceeds from equity issuances of
subsidiaries 145,228 252,361
Equity contribution by joint venture partner 26,267 1,684
Issuance of common stock upon exercise of
stock options 53,544 19,541
Distribution from subsidiaries to non-
controlling interests (245,852) (196,316)
Cash dividends paid (68,077) (67,762)
Other (4,658) (7,840)
----------------------------------------------------------------------------
Net financing cash flow 522,970 716,342
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (678,089) (553,630)
Proceeds from sale of vessels and equipment 167,274 47,704
Advances to joint ventures and joint venture
partners (88,483) (40,160)
Investment in equity accounted investments (64,509) (140,804)
Investment in direct financing lease assets (54,800) (151,716)
Investment in CVI Ocean Transportation II Inc. (25,000) -
Other 20,710 6,162
----------------------------------------------------------------------------
Net investing cash flow (722,897) (832,444)
----------------------------------------------------------------------------
Increase (decrease) in cash and cash
equivalents 91,236 (21,075)
Cash and cash equivalents, beginning of the
period 614,660 639,491
----------------------------------------------------------------------------
Cash and cash equivalents, end of the period 705,896 618,416
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below is a reconciliation of the Company's unaudited adjusted net loss attributable to stockholders of Teekay, a non-GAAP financial measure, to net loss attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company's financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------
September 30, 2014 September 30, 2014
----------------------------------------
(unaudited) (unaudited)
$ Per $ Per
$ Share(1) $ Share(1)
----------------------------------------------------------------------------
Net income - GAAP basis 87,824 121,499
Adjust for: Net income attributable
to
non-controlling interests (85,450) (162,600)
----------------------------------------------------------------------------
Net income (loss) attributable to
stockholders of Teekay 2,374 0.03 (41,101) (0.57)
Add (subtract) specific items
affecting net income:
Unrealized (gains) losses from
derivative instruments (2) (32,861) (0.45) 32,197 0.45
Foreign exchange gain (3) (20,378) (0.28) (17,726) (0.25)
Restructuring charges (4) 2,665 0.04 3,060 0.04
Gain on sale of vessels, net of
asset impairments (5) (4,575) (0.06) (16,549) (0.23)
Realized gain on termination of
interest rate swap - - (1,000) (0.01)
Dilution gain on share issuance by
TIL (6) - - (4,108) (0.06)
Other (7) 5,584 0.08 1,881 0.03
Non-controlling interests' share
of items above (8) 34,612 0.47 14,149 0.20
----------------------------------------------------------------------------
Total adjustments (14,953) (0.20) 11,904 0.17
----------------------------------------------------------------------------
Adjusted net loss attributable to
stockholders of Teekay (12,579) (0.17) (29,197) (0.40)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Fully diluted per share amounts.
2. Reflects the unrealized gains or losses relating to the change in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes, including those included in equity
income from joint ventures.
3. Foreign currency exchange gains and losses primarily relate to the
Company's debt denominated in Euros and Norwegian Kroner in addition to
the unrealized gains and losses on cross currency swaps used to hedge
the principal and interest on the Norwegian Kroner bonds. Nearly all of
the Company's foreign currency exchange gains and losses are unrealized.
4. Restructuring charges primarily relate to the reorganization of the
Company's marine operations and crew redundancy accrual relating to the
sale of a vessel.
5. Includes the Company's share of the gain on sale of vessels in Exmar LPG
BVBA joint venture, a net gain on the sale of an office building, a net
gain on sale of six vessels to TIL, the recovery of FPSO FEED study
costs previously provided for, net of impairment of a shuttle tanker,
6. Relates to the unrealized gain on the TIL stock purchase warrants issued
to the Company and Teekay Tankers in connection with TIL's formation and
initial funding.
7. Other primarily relates to pre-operational costs and realized losses on
interest rate swaps for the Petrojarl Knarr FPSO.
8. Items affecting net income include items from the Company's wholly-owned
subsidiaries, its consolidated non-wholly-owned subsidiaries and its
proportionate share of items from equity accounted for investments. 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 arrive at the non-controlling
interests' share of the amount. The amount identified as "Non-
controlling interests' share of items above" in the table above is the
cumulative amount of the non-controlling interests' proportionate share
of items listed in the table.
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below is a reconciliation of the Company's unaudited adjusted net loss attributable to stockholders of Teekay, a non-GAAP financial measure, to net loss attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company's financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------------------------
September 30, 2013 September 30, 2013
----------------------------------------
(unaudited) (unaudited)
$ Per $ Per
$ Share(1) $ Share(1)
----------------------------------------------------------------------------
Net (loss) income - GAAP basis (84,697) 42,592
Adjust for: Net loss (income)
attributable to
non-controlling interests 35,593 (86,465)
----------------------------------------------------------------------------
Net loss attributable to
stockholders of Teekay (49,104) (0.69) (43,873) (0.62)
Add (subtract) specific items
affecting net (loss) income:
Unrealized gains from derivative
instruments (2) (36,881) (0.52) (163,946) (2.33)
Foreign exchange loss (3) 12,199 0.17 12,085 0.17
Asset impairments, provisions and
gain on sale of vessels and
equipment (4) 72,120 1.01 81,018 1.15
Restructuring charges(5) 461 0.01 4,304 0.06
Realized loss on termination of
interest rate swap 31,798 0.45 31,798 0.45
Other (6) 2,968 0.04 10,270 0.15
Non-controlling interests' share
of items above(7) (69,575) (0.98) (12,677) (0.18)
----------------------------------------------------------------------------
Total adjustments 13,090 0.18 (37,148) (0.53)
----------------------------------------------------------------------------
Adjusted net loss attributable to
stockholders of Teekay (36,014) (0.51) (81,021) (1.15)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Fully diluted per share amounts.
2. Reflects the unrealized gains or losses relating to the change in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes, including those included in equity
income from joint ventures, and the ineffective portion of foreign
currency forward contracts designated as hedges for accounting purposes.
3. Foreign currency exchange gains and losses primarily relate to the
Company's debt denominated in Euros and Norwegian Kroner in addition to
the unrealized gains and losses on cross currency swaps used to hedge
the principal and interest on the Norwegian Kroner bonds. Nearly all of
the Company's foreign currency exchange gains and losses are unrealized.
4. Relates to allowances provided against investments in term loans,
impairment of four shuttle tankers including two shuttle tankers which
Teekay Offshore owns through a 50 percent-owned consolidated subsidiary,
a loan loss provision on a loan to a joint venture partner, gain on sale
of equipment and gain (loss) on sale of three conventional tankers.
5. Restructuring charges relate to the reorganization of the Company's
marine operations.
6. Other primarily relates to recognition of unrealized loss on sale of
marketable securities, pension fund closure, and realized (gain) loss on
foreign exchange forward contracts relating to certain capital
acquisition expenditures and certain items in joint ventures.
7. Items affecting net (loss) income include items from the Company's
wholly-owned subsidiaries, its consolidated non-wholly-owned
subsidiaries and its proportionate share of items from equity accounted
for investments. The specific items affecting net income (loss) are
analyzed to determine whether any of the amounts originated from a
consolidated non-wholly-owned subsidiary. Each amount that originates
from a consolidated non-wholly-owned subsidiary is multiplied by the
non-controlling interests' percentage share in this subsidiary to arrive
at the non-controlling interests' share of the amount. The amount
identified as "non-controlling interests' share of items listed above"
in the table above is the cumulative amount of the non-controlling
interests' proportionate share of items listed in the table.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY BALANCE SHEET AS AT SEPTEMBER 30, 2014
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Teekay Teekay
Teekay Offshore LNG Tankers
---------------------------------------------
ASSETS
Cash and cash equivalents 224,566 97,455 46,366
Other current assets 185,093 25,182 60,996
Restricted cash - 497,866 -
Vessel held for sale 6,758 - -
Vessels and equipment 2,942,497 1,720,204 838,139
Advances on newbuilding
contracts
and conversion costs 152,919 139,015 -
Derivative assets 7,943 122,557 3,568
Investment in equity accounted
investees 59,793 695,803 54,465
Investment in direct financing
leases 77,827 690,107 -
Other assets 59,105 229,025 13,062
Advances to (from) affiliates 53,572 21,263 9,895
Equity investment in
subsidiaries - - -
Intangibles and goodwill 136,562 125,491 -
---------------------------------------------
TOTAL ASSETS 3,906,635 4,363,968 1,026,491
---------------------------------------------
---------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 183,001 58,494 25,934
Advances from (to) affiliates 46,709 48,610 9,252
Current portion of long-term
debt 376,025 210,345 46,959
Long-term debt 2,211,618 2,074,777 593,297
Derivative liabilities 233,465 257,887 19,471
In process revenue contracts 91,761 37,491 -
Other long-term liabilities 38,954 106,862 5,559
Redeemable non-controlling
interest 17,286 - -
Equity:
Non-controlling interests (1) 44,970 44,184 -
Equity attributable to
stockholders/unitholders of
publicly-listed entities 662,846 1,525,318 326,019
---------------------------------------------
TOTAL LIABILITIES AND EQUITY 3,906,635 4,363,968 1,026,491
---------------------------------------------
---------------------------------------------
NET DEBT(2) 2,363,077 1,689,801 593,890
---------------------------------------------
---------------------------------------------
Teekay Consolidation
Parent Adjustments Total
---------------------------------------------
ASSETS
Cash and cash equivalents 337,509 - 705,896
Other current assets 242,468 - 513,739
Restricted cash 3,813 - 501,679
Vessel held for sale - - 6,758
Vessels and equipment 877,066 - 6,377,906
Advances on newbuilding
contracts
and conversion costs 1,204,415 - 1,496,349
Derivative assets 3,343 - 137,411
Investment in equity accounted
investees 72,014 (27,406) 854,669
Investment in direct financing
leases - - 767,934
Other assets 180,456 - 481,648
Advances to (from) affiliates (84,730) - -
Equity investment in
subsidiaries 458,692 (458,692) -
Intangibles and goodwill 4,405 - 266,458
---------------------------------------------
TOTAL ASSETS 3,299,451 (486,098) 12,110,447
---------------------------------------------
---------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 258,587 - 526,016
Advances from (to) affiliates (104,571) - -
Current portion of long-term
debt 102,956 - 736,285
Long-term debt 1,644,027 - 6,523,719
Derivative liabilities 51,241 - 562,064
In process revenue contracts 54,047 - 183,299
Other long-term liabilities 191,427 - 342,802
Redeemable non-controlling
interest - - 17,286
Equity:
Non-controlling interests (1) 714 2,028,085 2,117,953
Equity attributable to
stockholders/unitholders of
publicly-listed entities 1,101,023 (2,514,183) 1,101,023
---------------------------------------------
TOTAL LIABILITIES AND EQUITY 3,299,451 (486,098) 12,110,447
---------------------------------------------
---------------------------------------------
NET DEBT(2) 1,405,661 - 6,052,429
---------------------------------------------
---------------------------------------------
(1) Non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the respective joint venture partners' share of joint venture net assets. Non-controlling interest in the Consolidation Adjustments column represents the public's share of the net assets of Teekay's publicly-traded subsidiaries.
(2) Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY STATEMENT OF INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2014
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Teekay
Offshore Teekay LNG Teekay Tankers
---------------------------------------------
Revenues 258,442 100,776 53,470
Voyage expenses (28,622) (448) (2,872)
Vessel operating expenses (91,638) (23,538) (22,935)
Time-charter hire expense (7,085) - (6,309)
Depreciation and amortization (49,759) (23,309) (12,451)
General and administrative (14,038) (5,579) (2,890)
Asset impairments (4,759) - -
Gain (loss) on sale of vessels
and equipment - - -
Restructuring charges - (2,231) -
---------------------------------------------
Income (loss) from vessel
operations 62,541 45,671 6,013
Interest expense (22,911) (14,747) (2,042)
Interest income 145 1,530 49
Realized and unrealized
(losses) gains on derivative
instruments (9,432) 2,288 447
Income tax expense (1,468) (370) (116)
Equity income (loss) 2,486 38,710 1,612
Equity in earnings of
subsidiaries (1) - - -
Foreign exchange (loss) gain (939) 23,477 (89)
Other - net (278) 210 (12)
---------------------------------------------
Net income (loss) 30,144 96,769 5,862
Less: Net income attributable
to non-controlling interests
(2) (1,623) (6,182) -
---------------------------------------------
Net income (loss) attributable
to stockholders/unitholders of
publicly-listed entities 28,521 90,587 5,862
---------------------------------------------
---------------------------------------------
CFVO - Consolidated(3)(4) 114,630 71,455 18,464
CFVO - Equity Investments(5) 5,506 51,829 2,695
CFVO - Total 120,136 123,284 21,159
---------------------------------------------
---------------------------------------------
Consolidation
Teekay Parent Adjustments Total
---------------------------------------------
Revenues 105,902 (28,407) 490,183
Voyage expenses (3,875) 1,634 (34,183)
Vessel operating expenses (67,975) - (206,086)
Time-charter hire expense (31,932) 28,428 (16,898)
Depreciation and amortization (21,316) - (106,835)
General and administrative (8,953) (125) (31,585)
Asset impairments - - (4,759)
Gain (loss) on sale of vessels
and equipment 8,502 (7,285) 1,217
Restructuring charges (434) - (2,665)
---------------------------------------------
Income (loss) from vessel
operations (20,081) (5,755) 88,389
Interest expense (12,538) 32 (52,206)
Interest income 1,062 - 2,786
Realized and unrealized
(losses) gains on derivative
instruments 905 - (5,792)
Income tax expense (1,157) - (3,111)
Equity income (loss) (1,519) (1,357) 39,932
Equity in earnings of
subsidiaries (1) 40,215 (40,215) -
Foreign exchange (loss) gain (2,761) (191) 19,497
Other - net (1,604) 13 (1,671)
---------------------------------------------
Net income (loss) 2,522 (47,473) 87,824
Less: Net income attributable
to non-controlling interests
(2) (148) (77,497) (85,450)
---------------------------------------------
Net income (loss) attributable
to stockholders/unitholders of
publicly-listed entities 2,374 (124,970) 2,374
---------------------------------------------
---------------------------------------------
CFVO - Consolidated(3)(4) (14,003) 1,530 192,076
CFVO - Equity Investments(5) 943 (1,530) 59,443
CFVO - Total (13,060) - 251,519
---------------------------------------------
---------------------------------------------
1. Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
2. Net income attributable to non-controlling interests in the Teekay
Offshore and Teekay LNG columns represent the joint venture partners'
share of the net income loss of their respective 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 subsidiaries.
3. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization of
in-process revenue contracts, vessel write downs, gains and losses on
the sale of vessels, adjustments for direct financing leases to a cash
basis, and unrealized gains and losses relating to derivatives, but
includes realized gains and losses on the settlement of foreign currency
forward contracts. CFVO - Consolidated represents CFVO from vessels that
are consolidated on the Company's financial statements. Cash flow from
vessel operations is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping companies.
Please see Appendix C and Appendix E to this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
4. In addition to the CFVO generated by its directly owned and chartered-in
assets, Teekay Parent also receives cash dividends and distributions
from its publicly-traded subsidiaries. For the three months ended
September 30, 2014, Teekay Parent received cash dividends and
distributions from these subsidiaries totaling $43.8 million. The
dividends and distributions received by Teekay Parent include, among
others, those made with respect to its general partner interests in
Teekay Offshore and Teekay LNG. Please refer to Appendix D to this
release for further details.
5. CFVO - Equity Investments represents the Company's proportionate share
of CFVO from its equity accounted vessels and other investments. Please
see Appendix C and Appendix E to this release for a reconciliation of
this non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY STATEMENT OF INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2014
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Teekay
Offshore Teekay LNG Teekay Tankers
---------------------------------------------
Revenues 759,078 303,589 159,662
Voyage expenses (88,332) (2,948) (7,923)
Vessel operating expenses (267,952) (72,114) (69,314)
Time-charter hire expense (23,472) - (8,473)
Depreciation and amortization (146,721) (70,949) (37,378)
General and administrative (46,941) (18,241) (9,245)
Asset impairments (4,759) - -
Loan loss recoveries - - -
Gain (loss) on sale of vessels
and equipment - - 9,955
Restructuring recovery (charge) 262 (2,231) -
---------------------------------------------
Income (loss) from vessel
operations 181,163 137,106 37,284
Interest expense (63,399) (44,646) (6,663)
Interest income 512 2,750 247
Realized and unrealized losses
on derivative instruments (84,208) (21,568) (1,523)
Income tax expense (2,913) (1,140) (210)
Equity income (loss) 8,577 92,007 4,221
Equity in earnings of
subsidiaries (1) - - -
Foreign exchange (loss) gain (4,550) 22,632 (104)
Other - net 184 636 3,631
---------------------------------------------
Net income (loss) 35,366 187,777 36,883
Less: Net income attributable
to non-controlling interests
(2) (4,956) (15,295) -
---------------------------------------------
Net income (loss) attributable
to stockholders/unitholders of
publicly-listed entities 30,410 172,482 36,883
---------------------------------------------
---------------------------------------------
CFVO - Consolidated(3)(4) 325,553 214,539 64,707
CFVO - Equity Investments(5) 20,588 150,863 5,396
CFVO - Total 346,141 365,402 70,103
---------------------------------------------
---------------------------------------------
Consolidation
Teekay Parent Adjustments Total
---------------------------------------------
Revenues 313,123 (86,521) 1,448,931
Voyage expenses (8,550) 5,119 (102,634)
Vessel operating expenses (199,606) - (608,986)
Time-charter hire expense (95,862) 84,903 (42,904)
Depreciation and amortization (58,618) - (313,666)
General and administrative (30,010) (1,971) (106,408)
Asset impairments - - (4,759)
Loan loss recoveries 2,521 - 2,521
Gain (loss) on sale of vessels
and equipment 8,000 (7,285) 10,670
Restructuring recovery (charge) (1,091) - (3,060)
---------------------------------------------
Income (loss) from vessel
operations (70,093) (5,755) 279,705
Interest expense (36,519) 32 (151,195)
Interest income 1,853 - 5,362
Realized and unrealized losses
on derivative instruments (21,072) - (128,371)
Income tax expense (4,839) - (9,102)
Equity income (loss) (751) (1,357) 102,697
Equity in earnings of
subsidiaries (1) 90,267 (90,267) -
Foreign exchange (loss) gain (1,230) (191) 16,557
Other - net 1,382 13 5,846
---------------------------------------------
Net income (loss) (41,002) (97,525) 121,499
Less: Net income attributable
to non-controlling interests
(2) (99) (142,250) (162,600)
---------------------------------------------
Net income (loss) attributable
to stockholders/unitholders of
publicly-listed entities (41,101) (239,775) (41,101)
---------------------------------------------
---------------------------------------------
CFVO - Consolidated(3)(4) (42,766) 1,530 563,563
CFVO - Equity Investments(5) 2,095 (1,530) 177,412
CFVO - Total (40,671) - 740,975
---------------------------------------------
---------------------------------------------
1. Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
2. Net income attributable to non-controlling interests in the Teekay
Offshore and Teekay LNG columns represent the joint venture partners'
share of the net income loss of their respective joint ventures. Net
income loss attributable to non-controlling interest in the
Consolidation Adjustments column represents the public's share of the
net income loss of Teekay's publicly-traded subsidiaries.
3. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization of
in-process revenue contracts, vessel write downs, gains or losses on the
sale of vessels, adjustments for direct financing leases to a cash
basis, and unrealized gains and losses relating to derivatives, but
includes realized gains and losses on the settlement of foreign currency
forward contracts. CFVO - Consolidated represents CFVO from vessels that
are consolidated on the Company's financial statements. Cash flow from
vessel operations is a non-GAAP financial measure used by certain
investors to measure the financial performance of shipping companies.
Please see Appendix C and Appendix E to this release for a
reconciliation of this non-GAAP financial measure as used in this
release to the most directly comparable GAAP financial measure.
4. In addition to Teekay Parent's CFVO, Teekay Parent also receives cash
dividends and distributions from its publicly-traded subsidiaries. For
the nine months ended September 30, 2014, Teekay Parent received cash
dividends and distributions from these subsidiaries totaling $130.8
million. The dividends and distributions received by Teekay Parent
include, among others, those made with respect to its general partner
interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D
to this release for further details.
5. CFVO - Equity investments represents the Company's proportionate share
of CFVO from its equity accounted vessels and other investments. Please
see Appendix C and Appendix E to this release for a reconciliation of
this non-GAAP measure as used in this release to the most directly
comparable GAAP measure.
TEEKAY CORPORATION
APPENDIX C - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT SUMMARY OPERATING RESULTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014
(in thousands of U.S. dollars)
(unaudited)
Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to (loss) income from vessel operations as determined in accordance with GAAP, for Teekay Parent's primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent's financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Owned In-Chartered Teekay
Conventional Conventional Other Corporate Parent
Tankers Tankers FPSOs (1) G&A Total
-------------------------------------------------------------
Revenues 3,309 17,325 63,998 21,270 - 105,902
Voyage expenses (2,130) (1,739) (6) - - (3,875)
Vessel
operating
expenses (767) (5,480) (54,315) (7,413) - (67,975)
Time-charter
hire expense - (13,718) (7,530)(10,684) - (31,932)
Depreciation
and
amortization (713) - (21,145) 542 - (21,316)
General and
administrative (146) (829) (5,427) 1,517 (4,068) (8,953)
Gain on sale of
vessels and
equipment (2) - - 1,217 7,285 - 8,502
Restructuring
charges - - - (434) - (434)
-------------------------------------------------------------
(Loss) income
from vessel
operations (447) (4,441) (23,208) 12,083 (4,068)(20,081)
-------------------------------------------------------------
Reconciliation of (loss) income from vessel operations to cash flow from
vessel operations
(Loss) income
from vessel
operations (447) (4,441) (23,208) 12,083 (4,068)(20,081)
Depreciation
and
amortization 713 - 21,145 (542) - 21,316
Gain on sale of
vessels and
equipment (2) - - (1,217) (7,285) - (8,502)
Amortization of
in-process
revenue
contracts and
other - - (6,580) - - (6,580)
Realized gains
(losses) from
the
settlements of
non-designated
derivative
instruments 11 - (167) - - (156)
-------------------------------------------------------------
CFVO -
Consolidated
(3)(4) 277 (4,441) (10,027) 4,256 (4,068)(14,003)
CFVO -
Equity(5) 1,577 - (285) (349) - 943
-------------------------------------------------------------
CFVO - Total 1,854 (4,441) (10,312) 3,907 (4,068)(13,060)
-------------------------------------------------------------
-------------------------------------------------------------
1. Includes results of two chartered-in LNG carriers owned by Teekay LNG
and two chartered-in FSO units owned by Teekay Offshore.
2. Teekay Parent recognized a gain on sale of an office building and a gain
on the sale of conventional tanker commercial management and technical
management operations to TNK, which is eliminated on consolidation.
3. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization of
in-process revenue contracts, vessel write downs, gains and losses on
the sale of vessels, adjustments for direct financing leases to a cash
basis, and unrealized gains and losses relating to derivatives, but
includes realized gains and losses on the settlement of foreign currency
forward contracts. CFVO - Consolidated represents Teekay Parent's CFVO
from vessels that are consolidated on the Company's financial
statements. Cash flow from vessel operations is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. Please see Appendix E to this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
4. In addition to the CFVO generated by its directly owned and chartered-in
assets, Teekay Parent also receives cash dividends and distributions
from its publicly-traded subsidiaries. For the three months ended
September 30, 2014, Teekay Parent received cash dividends and
distributions from these subsidiaries totaling $43.8 million. The
dividends and distributions received by Teekay Parent include, among
others, those made with respect to its general partner interests in
Teekay Offshore and Teekay LNG. Please refer to Appendix D to this
release for further details.
5. CFVO - Equity Investments represents Teekay Parent's proportionate share
of CFVO from its equity accounted vessels and other investments. Please
see Appendix E to this release for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP
financial measure.
TEEKAY CORPORATION
APPENDIX C - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT SUMMARY OPERATING RESULTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(in thousands of U.S. dollars)
(unaudited)
Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to income (loss) from vessel operations as determined in accordance with GAAP, for Teekay Parent's primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent's financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Owned In-Chartered Teekay
Conventional Conventional Other Corporate Parent
Tankers Tankers FPSOs (1) G&A Total
---------------------------------------------------------------
Revenues 16,496 51,172 170,551 74,904 - 313,123
Voyage
expenses (5,803) (2,697) (6) (44) - (8,550)
Vessel
operating
expenses (4,109) (16,529)(159,238)(19,730) - (199,606)
Time-charter
hire expense - (41,640) (20,902)(33,320) - (95,862)
Depreciation
and
amortization (1,503) - (57,226) 111 - (58,618)
General and
administra-
tive (677) (2,384) (16,978) 1,517 (13,088) (31,610)
Success fee
from
daughter - - - 1,600 - 1,600
Loan loss
recoveries
(2) - - 2,521 - - 2,521
(Loss) gain
on sale of
vessels and
equipment
(2) (502) - 1,217 7,285 - 8,000
Restructuring
charges - - - (1,091) - (1,091)
---------------------------------------------------------------
Income (loss)
from vessel
operations 3,902 (12,078) (80,061) 31,232 (13,088) (70,093)
---------------------------------------------------------------
Reconciliation of income (loss) from vessel operations to cash flow from
vessel operations
Income (loss)
from vessel
operations 3,902 (12,078) (80,061) 31,232 (13,088) (70,093)
Depreciation
and
amortization 1,503 - 57,226 (111) - 58,618
Loan loss
recoveries
(2) - - (2,521) - - (2,521)
Loss (gain)
on sale of
vessels and
equipment
(2) 502 - (1,217) (7,285) - (8,000)
Amortization
of in-
process
revenue
contracts
and other - - (19,740) - - (19,740)
Realized
losses from
the
settlements
of non-
designated
derivative
instruments (285) - (745) - - (1,030)
---------------------------------------------------------------
CFVO -
Consolidated
(3)(4) 5,622 (12,078) (47,058) 23,836 (13,088) (42,766)
CFVO - Equity
(5) 3,282 - (925) (262) - 2,095
---------------------------------------------------------------
CFVO - Total 8,904 (12,078) (47,983) 23,574 (13,088) (40,671)
---------------------------------------------------------------
---------------------------------------------------------------
1. Includes the results of two chartered-in LNG carriers owned by Teekay
LNG and two chartered-in FSO units owned by Teekay Offshore, interest
income received from an investment in term loan, fees earned from
managing TIL vessel transactions of $4.0 million included in revenues,
and a one-time $1.6 million success fee payment received from Teekay
Offshore upon the acquisition of ALP Maritime Services B.V. in March
2014.
2. Teekay Parent recognized a loss relating to the sale of four
conventional tankers to TIL, a recovery of a receivable for an FPSO
front-end engineering and design study which had previously been
provided for, a gain on sale of an office building, and a gain on the
sale of conventional tanker commercial management and technical
management operations to Teekay Tankers which is eliminated on
consolidation.
3. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization of
in-process revenue contracts, vessel write downs, gains and losses on
the sale of vessels, adjustments for direct financing leases to a cash
basis, and unrealized gains and losses relating to derivatives, but
includes realized gains and losses on the settlement of foreign currency
forward contracts. CFVO - Consolidated represents Teekay Parent's CFVO
from vessels that are consolidated on the Company's financial
statements. Cash flow from vessel operations is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. Please see Appendix E to this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
4. In addition to the CFVO generated by its directly owned and chartered-in
assets, Teekay Parent also receives cash dividends and distributions
from its publicly-traded subsidiaries. For the nine months ended
September 30, 2014, Teekay Parent received cash dividends and
distributions from these subsidiaries totaling $130.8 million. The
dividends and distributions received by Teekay Parent include, among
others, those made with respect to its general partner interests in
Teekay Offshore and Teekay LNG. Please refer to Appendix D to this
release for further details.
5. CFVO - Equity Investments represents Teekay Parent's proportionate share
of CFVO from its equity accounted vessels and other investments. Please
see Appendix E to this release for a reconciliation of this non-GAAP
measure as used in this release to the most directly comparable GAAP
financial measure.
TEEKAY CORPORATION
APPENDIX D - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT FREE CASH FLOW
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of Teekay Parent free cash flow for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. The Company defines free cash flow, a non-GAAP financial measure, as cash flow from vessel operations attributed to its directly-owned and in-chartered assets, net of interest expense and drydock expenditures in the respective period (collectively, OPCO); and distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers), net of Teekay Parent corporate general and administrative expenditures in the respective period (collectively, GPCO).
Three Months Ended
-------------------------------------------------------
September December September
30, June 30, March 31, 31, 30,
-------------------------------------------------------
2014 2014 2014 2013 2013
-------------------------------------------------------
Teekay Parent OPCO
Cash Flow
Teekay Parent cash
flow from vessel
operations (1)
Owned Conventional
Tankers 277 855 4,490 232 883
In-Chartered
Conventional
Tankers (4,441) (4,818) (2,819) (9,292) (8,672)
FPSOs (10,027) (23,126) (13,906) (4,932) (24,214)
Other (2) 5,021 7,174 12,408 3,355 1,386
-------------------------------------------------------
Total (3) (9,170) (19,915) 173 (10,637) (30,617)
Less:
Net interest
expense (4) (13,000) (15,015) (16,151) (12,039) (16,576)
Dry dock
expenditures (2,673) (378) (549) (2,056) (607)
-------------------------------------------------------
Teekay Parent OPCO
Cash Flow (24,843) (35,308) (16,527) (24,732) (47,800)
-------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Parent GPCO
Cash Flow
Daughter company
distributions to
Teekay Parent (5)
Limited Partner
interest (6)
Teekay LNG Partners 17,439 17,439 17,439 17,439 17,016
Teekay Offshore
Partners 12,819 12,819 12,819 12,819 12,507
General partner
interest
Teekay LNG Partners 7,883 7,883 7,568 7,566 6,320
Teekay Offshore
Partners 4,880 4,880 4,868 4,867 3,671
Other Dividends
Teekay Tankers
(6)(7) 756 629 629 629 629
-------------------------------------------------------
Total Daughter
Distributions 43,777 43,650 43,323 43,320 40,143
-------------------------------------------------------
Less: Corporate
general and
administrative
expenses (4,068) (3,362) (5,658) (6,314) (3,914)
-------------------------------------------------------
Total Parent GPCO
Cash Flow 39,709 40,288 37,665 37,006 36,229
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TOTAL TEEKAY PARENT
FREE CASH FLOW 14,866 4,980 21,137 12,274 (11,571)
-------------------------------------------------------
-------------------------------------------------------
Total Teekay Parent
Free Cash Flow per
share 0.21 0.07 0.30 0.17 (0.16)
-------------------------------------------------------
Weighted-average
number of common
shares - Basic 72,393,072 72,036,526 71,328,577 70,781,695 70,755,282
-------------------------------------------------------
-------------------------------------------------------
1. Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, vessel/goodwill
write downs, gains or losses on the sale of vessels, adjustments for
direct financing leases to a cash basis, and unrealized gains and losses
relating to derivatives, but includes realized gains and losses on the
settlement of foreign currency forward contracts. CFVO is a non-GAAP
financial measure used by certain investors to measure the financial
performance of shipping companies. For further details for the three
months ended September 30, 2014, including a reconciliation of this non-
GAAP financial measure to the most directly comparable GAAP financial
measure, please refer to Appendix C to this release; for a
reconciliation of this non-GAAP financial measure to the most directly
comparable GAAP financial measure for the three months ended June 30,
2014, March 31, 2014, December 31, 2013, and September 30, 2013, please
refer to Appendix E to this release.
2. Includes $0.8 million for the three months ended September 30, 2014
relating to 50 percent of the CFVO from Tanker Operations.
3. Excluding corporate general and administrative expenses relating to
GPCO.
4. The three month period ended September 30, 2014 excludes a realized loss
on an interest rate swap related to the debt facility secured by the
Petrojarl Knarr FPSO unit of $4.1 million. Net interest expense is a
non-GAAP financial measure that includes realized gains and losses on
interest rate swaps. Please see Appendix E to this release for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
5. Cash dividend and distribution cash flows are shown on an accrual basis
for dividends and distributions declared for the respective period.
6. 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 period as follows:
Three Months Ended
----------------------------------------------------------
September September
30, June 30, March 31, December 31, 30,
----------------------------------------------------------
2014 2014 2014 2013 2013
----------------------------------------------------------
Teekay LNG
Partners
Distribution
per common
unit $ 0.6918 $ 0.6918 $ 0.6918 $ 0.6918 $ 0.6750
Common units
owned by
Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274 25,208,274
------------------------------------------------------------
Total
distribution $17,439,084 $17,439,084 $17,439,084 $17,439,084 $17,015,585
Teekay Offshore
Partners
Distribution
per common
unit $ 0.5384 $ 0.5384 $ 0.5384 $ 0.5384 $ 0.5253
Common units
owned by
Teekay Parent 23,809,468 23,809,468 23,809,468 23,809,468 23,809,468
------------------------------------------------------------
Total
distribution $12,819,018 $12,819,018 $12,819,018 $12,819,018 $12,507,114
Teekay Tankers
Ltd.
Dividend per
share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Shares owned
by Teekay
Parent (7) 25,197,475 20,976,530 20,976,530 20,976,530 20,976,530
------------------------------------------------------------
Total dividend $ 755,924 $ 629,296 $ 629,296 $ 629,296 $ 629,296
7. Includes Class A and Class B shareholdings.
TEEKAY CORPORATION
APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
CASH FLOW FROM VESSEL OPERATIONS - CONSOLIDATED
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of consolidated CFVO for the three months ended September 30, 2014 and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company's financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company's performance required by GAAP.
Three Months Ended September 30, 2014
--------------------------------------------------------------
(unaudited)
--------------------------------------------------------------
Teekay
Teekay Teekay Teekay Teekay Consolidation Corporation
Offshore LNG Tankers Parent Adjustments Consolidated
----------------------------------------------------------------------------
Income (loss)
from vessel
operations 62,541 45,671 6,013 (20,081) (5,755) 88,389
Depreciation
and
amortization 49,759 23,309 12,451 21,316 - 106,835
Amortization
of in process
revenue
contracts and
other (3,212) (1,991) - (6,580) - (11,783)
Realized
(losses)
gains from
the
settlements
of non-
designated
derivative
instruments (278) - - (156) - (434)
Asset
impairment 4,759 - - - - 4,759
(Gain) loss on
sale of
vessels and
equipment - - - (8,502) 7,285 (1,217)
Cash flow from
time-charter
contracts,
net of
revenue
accounted for
as direct
finance
leases 1,061 4,466 - - - 5,527
----------------------------------------------------------------------------
Cash flow from
vessel
operations -
Consolidated 114,630 71,455 18,464 (14,003) 1,530 192,076
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
--------------------------------------------------------------
(unaudited)
--------------------------------------------------------------
Teekay Teekay
Offshore Teekay Teekay Teekay Consolidation Corporation
(1) LNG Tankers Parent Adjustments Consolidated
----------------------------------------------------------------------------
(Loss) income
from vessel
operations (18,646) 42,627 (9,730) (44,170) - (29,919)
Depreciation
and
amortization 51,920 24,440 11,935 20,819 - 109,114
Amortization
of in process
revenue
contracts and
other (3,249) (278) - (10,708) - (14,235)
Unrealized
losses
(gains) from
the change in
fair value of
designated
derivative
instruments - - - 19 - 19
Realized
(losses)
gains from
the
settlements
of non
designated
derivative
instruments (360) 903 - (1,471) - (928)
Asset
impairments /
gain on sale
of vessels
and equipment 56,937 3,804 10,399 980 - 72,120
Cash flow from
time-charter
contracts,
net of
revenue
accounted for
as direct
finance
leases 867 1,795 - - - 2,662
----------------------------------------------------------------------------
Cash flow from
vessel
operations -
Consolidated 87,469 73,291 12,604 (34,531) - 138,833
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. The results of Teekay Offshore include the results from both continuing
and discontinued operations.
TEEKAY CORPORATION
APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
CASH FLOW FROM VESSEL OPERATIONS - EQUITY ACCOUNTED VESSELS
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of cash flow from vessel operations for equity accounted vessels for the three months ended September 30, 2014 and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO from equity accounted vessels represents the Company's proportionate share of CFVO from its equity accounted vessels and other investments. CFVO is included because certain investors use this data to measure a company's financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company's performance required by GAAP.
Three Months Ended Three Months Ended
September 30, 2014 September 30, 2013
------------------------------------------------
(unaudited) (unaudited)
------------------------------------------------
At Company's At Company's
100% Portion(1) 100% Portion(2)
----------------------------------------------------------------------------
Revenues 325,092 144,385 224,638 105,245
Vessel and other operating
expenses (191,731) (84,074) (101,075) (47,713)
Depreciation and
amortization (35,993) (16,212) (28,252) (14,280)
Gain on sale of vessels 16,234 8,117 - -
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 113,602 52,216 95,311 43,252
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Interest expense (25,758) (11,102) (24,513) (11,532)
Realized and unrealized gain
(loss) on derivative
instruments 526 260 (9,846) (3,563)
Other income - net 133 214 (3,440) (1,404)
----------------------------------------------------------------------------
Net income of equity
accounted vessels 88,503 41,588 57,512 26,753
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Pro forma equity income
from Teekay Operations - (1,656) - -
----------------------------------------------------------------------------
Equity income of equity
accounted vessels 88,503 39,932 57,512 26,753
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel
operations of equity
accounted vessels 113,602 52,216 95,311 43,252
Depreciation and
amortization 35,993 16,212 28,252 14,280
Gain on sale of vessels (16,234) (8,117) - -
Cash flow from time-charter
contracts net of revenue
accounted for as direct
finance lease 7,520 2,719 7,309 2,652
Amortization of in-process
revenue contracts and other (4,047) (2,057) (7,427) (3,818)
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 136,834 60,973 123,445 56,366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Pro forma CFVO from Teekay
Operations - (1,530) - -
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 136,834 59,443 123,445 56,366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 13 percent to 52 percent.
2. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 33 percent to 52 percent.
3. CFVO from equity accounted vessels represents the Company's
proportionate share of CFVO from its equity accounted vessels and other
investments.
TEEKAY CORPORATION
APPENDIX E - RECONCILIATION OF NON-GAAP MEASURES
CASH FLOW FROM VESSEL OPERATIONS - TEEKAY PARENT
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of Teekay Parent cash flow from vessel operations for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company's financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company's performance required by GAAP.
Three Months Ended June 30, 2014
---------------------------------------------
(unaudited)
---------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations (161) (4,818) (31,719)
Depreciation and amortization 710 - 17,746
Loan loss recoveries - - (2,521)
Loss on sale of vessels and
equipment 340 - -
Amortization of in process
revenue contracts and other - - (6,580)
Realized losses from the
settlements of non-designated
foreign derivative instruments (34) - (52)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 855 (4,818) (23,126)
----------------------------------------------------------------------------
Three Months Ended June 30, 2014
---------------------------------------------
(unaudited)
---------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations 6,686 (3,362) (33,374)
Depreciation and amortization 488 - 18,944
Loan loss recoveries - - (2,521)
Loss on sale of vessels and
equipment - - 340
Amortization of in process
revenue contracts and other - - (6,580)
Realized losses from the
settlements of non-designated
foreign derivative instruments - - (86)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 7,174 (3,362) (23,277)
----------------------------------------------------------------------------
Three Months Ended March 31, 2014
---------------------------------------------
(unaudited)
---------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 4,510 (2,819) (25,135)
Depreciation and amortization 80 - 18,335
Loss on sale of vessels and
equipment 162 - -
Amortization of in process
revenue contracts and other - - (6,580)
Realized losses from the
settlements of non-designated
foreign derivative instruments (262) - (526)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 4,490 (2,819) (13,906)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended March 31, 2014
---------------------------------------------
(unaudited)
---------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 12,465 (5,658) (16,638)
Depreciation and amortization (57) - 18,358
Loss on sale of vessels and
equipment - - 162
-
Amortization of in process
revenue contracts and other - (6,580)
-
Realized losses from the
settlements of non-designated
foreign derivative instruments - - (788)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 12,408 (5,658) (5,486)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2013
---------------------------------------------
(unaudited)
---------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations (93,160) (9,292) (15,452)
Depreciation and amortization 2,602 - 18,995
Asset impairments and
provisions (recoveries) 90,813 - 2,634
Loss on sale of vessel - - -
Amortization of in process
revenue contracts and other - - (10,691)
Realized losses from the
settlements of non-designated
foreign exchange forward
contracts (23) - (418)
----------------------------------------------------------------------------
Cash flow from vessel
operations -Teekay Parent 232 (9,292) (4,932)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2013
---------------------------------------------
(unaudited)
---------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations 12,485 (6,314) (111,733)
Depreciation and amortization (457) - 21,140
Asset impairments and
provisions (recoveries) (8,713) - 84,734
Loss on sale of vessel 40 - 40
Amortization of in process
revenue contracts and other - - (10,691)
Realized losses from the
settlements of non-designated
foreign exchange forward
contracts - - (441)
----------------------------------------------------------------------------
Cash flow from vessel
operations -Teekay Parent 3,355 (6,314) (16,951)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
---------------------------------------------
(unaudited)
---------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent loss (income)
from vessel operations (1,634) (8,672) (32,692)
Depreciation and amortization 2,582 - 19,670
Loss provision - - -
Gain on sale of vessel - - -
Amortization of in process
revenue contracts and other - - (10,708)
Unrealized losses from the
change in fair value of
designated foreign exchange
forward contracts 19 - -
Realized losses from the
settlements of non-designated
foreign exchange forward
contracts (84) - (484)
----------------------------------------------------------------------------
Cash flow from vessel
operations -Teekay Parent 883 (8,672) (24,214)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2013
---------------------------------------------
(unaudited)
---------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent loss (income)
from vessel operations 2,742 (3,914) (44,170)
Depreciation and amortization (1,433) - 20,819
Loss provision 1,141 - 1,141
Gain on sale of vessel (161) - (161)
Amortization of in process
revenue contracts and other - - (10,708)
Unrealized losses from the
change in fair value of
designated foreign exchange
forward contracts - - 19
Realized losses from the
settlements of non-designated
foreign exchange forward
contracts (903) - (1,471)
----------------------------------------------------------------------------
Cash flow from vessel
operations -Teekay Parent 1,386 (3,914) (34,531)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
NET REVENUES
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of net revenues for the three and nine months ended September 30, 2014 and September 30, 2013. Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is included because certain investors use this data to measure the financial performance of shipping companies. Net revenues is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Company's performance required by GAAP.
Three Months Ended September 30, 2014
------------------------------------------------
Teekay Teekay Teekay
Offshore Teekay LNG Tankers Parent
----------------------------------------------------------------------------
Revenues 258,442 100,776 53,470 105,902
Voyage expense (28,622) (448) (2,872) (3,875)
----------------------------------------------------------------------------
Net revenues 229,820 100,328 50,598 102,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months
Ended
Three Months Ended September September 30,
30, 2014 2014
------------------------------- ----------------
Teekay Teekay
Consolidation Corporation Corporation
Adjustments Consolidated Consolidated
----------------------------------------------------------- ----------------
Revenues (28,407) 490,183 1,448,931
Voyage expense 1,634 (34,183) (102,634)
----------------------------------------------------------- ----------------
Net revenues (26,773) 456,000 1,346,297
----------------------------------------------------------- ----------------
----------------------------------------------------------- ----------------
Three Months Ended September 30, 2013
------------------------------------------------
Teekay Teekay Teekay Teekay
Offshore(1) LNG Tankers Parent
----------------------------------------------------------------------------
Revenues 236,040 100,692 39,479 103,988
Voyage expense (28,693) (373) (483) 154
----------------------------------------------------------------------------
Net revenues 207,347 100,319 38,996 104,142
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Nine Months
Ended
Three Months Ended September September 30,
30, 2013 2013
------------------------------- ----------------
Teekay Teekay
Consolidation Corporation Corporation
Adjustments Consolidated Consolidated
----------------------------------------------------------- ----------------
Revenues (25,404) 454,795 1,336,539
Voyage expense 1,373 (28,022) (80,491)
----------------------------------------------------------- ----------------
Net revenues (24,031) 426,773 1,256,048
----------------------------------------------------------- ----------------
----------------------------------------------------------- ----------------
(1) The results of Teekay Offshore include the results from both continuing and discontinued operations.
TEEKAY CORPORATION
APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
NET INTEREST EXPENSE - TEEKAY PARENT
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of Teekay Parent net interest expense for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. Net interest expense is a non-GAAP financial measure that includes realized gains and losses on interest rate swaps. Net interest expense is not required by GAAP and should not be considered as an alternative to interest expense or any other indicator of the Company's performance required by GAAP.
Three months ended
------------------------------------------------------------
September December September
30, June 30, March 31, 31, 30,
2014 2014 2014 2013 2013
------------------------------------------------------------
Interest expense (52,206) (49,656) (49,333) (48,382) (45,817)
Interest income 2,786 793 1,783 5,129 1,543
----------------------------------------------------------------------------
Net interest
expense -
consolidated (49,420) (48,863) (47,550) (43,253) (44,274)
Less:
Non-Teekay
Parent net
interest
expense (37,944) (38,088) (35,135) (35,130) (31,604)
----------------------------------------------------------------------------
Interest expense
net of interest
income - Teekay
Parent (11,476) (10,775) (12,415) (8,123) (12,670)
Add:
Teekay Parent
realized
losses on
interest rate
swaps (1) (1,524) (4,240) (3,736) (3,916) (3,906)
----------------------------------------------------------------------------
Net interest
expense -
Teekay Parent (13,000) (15,015) (16,151) (12,039) (16,576)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Realized losses on interest rate swaps excludes a realized loss on the interest rate swap related to the debt facility secured by the Petrojarl Knarr FPSO unit of $4.1 million for the three months ended September 30, 2014 and excludes a realized gain on the termination of a swap agreement of $1.0 million for the three months ended March 31, 2014.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 regarding: future growth opportunities and market conditions; the timing for implementation of the Company's new dividend policy, the amount of the initial dividend increase from the current level, and expected increases over the three years following the initial dividend increase; the anticipated sale of the Petrojarl Knarr FPSO unit to Teekay Offshore, including the sale price, the anticipated commencement of the Petrojarl Knarr FPSO charter contract in the fourth quarter of 2014, and the timing and certainty of Teekay Parent completing the sale; the dividend contributions of any future projects awarded to the Company's daughter companies; expected growth of Teekay Offshore and Teekay LNG and its impact on Teekay Parent; the total cost and timing for the delivery of newbuilding and conversion projects and the commencement of associated time-charter contracts; the timing and certainty of Teekay Offshore's joint venture with Odebrecht finalizing the contract for the Libra FPSO project with Petrobras; the timing, certainty and purchase price of pending and future Teekay Offshore and Teekay LNG vessel acquisitions; and the timing and certainty of the charterer resolving the subsea issues relating to the Foinaven field and revenues generated from the Foinaven FPSO. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement:
changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSO and FPSO units; decreases in oil production by, or increased operating expenses for, FPSO units; fluctuations in global oil prices; trends in prevailing charter rates for shuttle tanker and FPSO contract renewals; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts or complete existing contract negotiations; delays in commencement of operations of FPSO and FSO units at designated fields; changes in the Company's expenses; the Company and its publicly-traded subsidiaries' future capital expenditure requirements and the inability to secure financing for such requirements; the amount of future distributions by the Company's daughter companies to the Company; the amount of Teekay Parent and daughter subsidiary expenses; failure by Teekay Offshore's joint venture with Odebrecht to complete final contract negotiations with Petrobras for the Libra FPSO project; potential delays in the commencement of operations of the Petrojarl Knarr FPSO unit and potential failure of the FPSO unit to be sold to Teekay Offshore; the inability to successfully complete the operational testing of the Hi-Load DP unit and achieve final acceptance of the unit from Petrobras; failure by Teekay Offshore and Teekay LNG to complete its vessel acquisitions; the inability of the Company to complete vessel sale transactions to its public-traded subsidiaries or to third parties, including obtaining Board of Directors and Conflicts Committee approvals; failure of the respective Board of Directors of the general partners of Teekay Offshore and Teekay LNG to approve future distribution increases; failure by the charterer to resolve the subsea issues relating to the Foinaven field; conditions in the United States capital markets; and other factors discussed in Teekay's filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2013. The Company 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 the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
FOR FURTHER INFORMATION PLEASE CONTACT:
Teekay Corporation
Investor Relations Enquiries
Ryan Hamilton
Tel: +1 (604) 844-6654
www.teekay.com
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