Teekay Corporation Reports Second Quarter 2015 Results
HAMILTON, BERMUDA -- (Marketwired) -- 08/06/15 -- Highlights
-- Second quarter 2015 total Teekay Parent free cash flow of $49.5 million,
up $17.9 million, or 57 percent from the first quarter of 2015.
-- Implemented new dividend policy: increased second quarter 2015 dividend
by 75 percent to $0.55 per share ($2.20 per share annualized) and
linking future dividend increases to the growing cash flows from
Teekay's publicly-listed daughter entities.
-- Targeting 15 to 20 percent average annual dividend growth over the next
three years.
-- On July 1, 2015, completed the dropdown sale of the Knarr FPSO to Teekay
Offshore for $1.26 billion.
Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported financial and operating results for the second quarter of 2015. These results include the Company's three publicly-listed subsidiaries (Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE: TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE: TGP), Teekay Tankers Ltd. (Teekay Tankers) (NYSE: TNK)) (collectively, the Daughter Entities), all of which are consolidated in the Company's financial statements, and all remaining subsidiaries of the Company are referred to in this release as Teekay Parent. Please refer to the second quarter earnings releases of Teekay LNG, Teekay Offshore and Teekay Tankers, which are available on the Company's website at www.teekay.com for additional information on their respective results.
Summary Financial Information
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Three Months Ended
(in thousands of U.S. dollars, except per June 30, March 31, June 30,
share amounts) 2015 2015 2014
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TEEKAY PARENT
Teekay Parent GPCO Cash Flow (1) 41,155 38,374 40,288
Teekay Parent OPCO Cash Flow (1) 8,308 (6,851) (35,308)
Total Teekay Parent Free Cash Flow (1) 49,463 31,523 4,980
Total Teekay Parent Free Cash Flow per
share (1) 0.68 0.43 0.07
Declared Dividend per share (1) 0.55 0.31625 0.31625
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TEEKAY CORPORATION CONSOLIDATED
Cash Flow from Vessel Operations (CFVO)
(1) 352,201 320,855 224,426
Adjusted Net Income (Loss) (1) 19,706 15,730 (20,094)
Adjusted Net Income (Loss) per share (1) 0.27 0.22 (0.28)
GAAP Net Income (Loss) 65,912 (9,764) (42,987)
GAAP Net Income (Loss) per share 0.91 (0.13) (0.60)
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(1) These are non-GAAP measures. Please refer to "Definitions and Non-GAAP
Measures" on Page 5 and the Appendices to this release for definitions of
these terms and reconciliations of these non-GAAP financial measures as
used in this release to the most directly comparable financial measures
under United States generally accepted accounting principles (GAAP).
Please refer to Page 7 for a summary of Teekay Parent Free Cash Flow.
CEO Commentary
"Teekay Parent's free cash flow increased significantly during the second quarter, supported by a full quarter contribution from the Knarr FPSO prior to its dropdown sale to Teekay Offshore on July 1st, which resulted in a strong coverage ratio for the quarter," commented Peter Evensen, Teekay Corporation's President and Chief Executive Officer. "Our daughter entities also performed well during the second quarter, with Teekay Offshore and Teekay LNG both reporting strong distributable cash flow and distribution coverage ratios and Teekay Tankers achieving the highest tanker rates in seven years."
"Since reporting first quarter earnings in May, we have achieved key milestones towards the completion of Teekay Parent's transition into a pure-play general partner of two master limited partnerships, most notably the consummation of the Knarr FPSO dropdown, our largest dropdown sale ever, and the implementation of Teekay Parent's new dividend policy," continued Mr. Evensen. "The Knarr FPSO dropdown has resulted in a reduction of Teekay Parent's net debt by nearly $1 billion, which further strengthens Teekay Parent's balance sheet. Teekay Parent's new dividend policy links our dividend to the growing cash flows we receive from our daughter entities. With an initial increase of approximately 75 percent to $0.55 per share, or $2.20 per share annualized, we are targeting Teekay's dividend to further grow by an average of 15 to 20 percent per annum for at least the next three years, based on existing committed growth projects and future growth projects that our daughter entities are pursuing."
"Teekay Parent's growing quarterly free cash flow is primarily supported by the stable and growing cash flows of our two master limited partnerships," Mr. Evensen continued. "Teekay LNG and Teekay Offshore both have diversified portfolios of fee-based contracts with respective contracted forward revenues of $11.4 billion and $8.4 billion, average remaining contract durations of approximately 13 years and 5 years, and no direct commodity price exposure. Despite the current volatility in the energy markets, the long-term fundamentals for both the LNG and offshore markets remain attractive. With a strong pipeline of contracted growth projects directly at our daughter entities and their access to competitive bank financing and multiple capital markets, we believe Teekay Parent is well-positioned to achieve strong free cash flow and dividend growth."
Summary of Results
Teekay Parent
Teekay Parent GPCO Cash Flow, which includes distributions and dividends received on an accrual basis from Teekay's publicly-listed subsidiaries less Teekay Parent's corporate general and administrative expenses, increased to $41.2 million for the quarter ended June 30, 2015, compared to $38.4 million for the quarter ended March 31, 2015, primarily due to the recognition of certain employee incentive compensation expenses recorded in the first quarter of 2015. The distributions and dividends received from Teekay's publicly-listed subsidiaries during the quarter ended June 30, 2015 were consistent with the quarter ended March 31, 2015 at $45.3 million. Please refer to Page 7 for additional information about Teekay Parent GPCO Cash Flow.
Teekay Parent OPCO Cash Flow, which includes cash flow attributable to assets directly-owned by, or chartered-in to, Teekay Parent, net of interest expense and drydock expenditures, increased to $8.3 million for the quarter ended June 30, 2015, from negative $6.9 million for the quarter ended March 31, 2015. The increase is primarily due to a full quarter's contribution from the Petrojarl Knarr (Knarr) FPSO, which commenced its charter contract at partial rate in mid-March 2015 and achieved full rate in late-June 2015 with BG Norge Limited (BG), higher revenues from the Foinaven FPSO and higher average spot tanker rates. These increases were partially offset by lower revenues from the Hummingbird Spirit FPSO. Please refer to Page 7 of this release for additional information about Teekay Parent OPCO Cash Flow.
Total Teekay Parent Free Cash Flow, which is the total of GPCO and OPCO cash flows, was $49.5 million during the second quarter of 2015, compared to $31.5 million in the first quarter of 2015. Please refer to Page 7 of this release for additional information about Teekay Parent Free Cash Flow.
On June 30, 2015, the Company declared a cash dividend on its common stock of $0.55 per share for the quarter ended June 30, 2015, an increase of approximately 75 percent from the previous quarter. The cash dividend was paid on July 31, 2015 to all shareholders of record on July 17, 2015.
Teekay Corporation Consolidated
The Company's consolidated cash flow from vessel operations (CFVO) increased to $352.2 million for the quarter ended June 30, 2015, compared to $320.9 million for the quarter ended March 31, 2015, primarily due to a higher contribution from the Knarr and Foinaven FPSO units and higher average spot tanker rates, partially offset by lower revenues from the shuttle tanker fleet and the Hummingbird Spirit FPSO.
The Company's consolidated adjusted net income increased to $19.7 million, or $0.27 per share, during the quarter ended June 30, 2015, compared to $15.7 million, or $0.22 per share, for the quarter ended March 31, 2015.
On a GAAP basis, the Company's consolidated net income improved significantly to $65.9 million, or $0.91 per share, for the quarter ended June 30, 2015, compared to a net loss of $9.8 million, or $0.13 per share, for the quarter ended March 31, 2015.
Summary Results of Daughter Entities
Teekay Offshore
Teekay Offshore reported strong distributable cash flow during the quarter ended June 30, 2015; however, results were slightly lower compared to the quarter ended March 31, 2015, primarily due to lower shuttle tanker revenues as a result of the redelivery of one shuttle tanker from its charterer early in the second quarter and the sale of an older shuttle tanker late in the first quarter of 2015. These decreases were partially offset by the commencement of operations of the Arendal Spirit Unit for Maintenance and Safety (UMS) and the acquisition of five long-haul towage vessels during the first half of 2015. Please refer to Teekay Offshore's second quarter 2015 earnings release for additional information on the financial results for this entity.
Teekay LNG
Teekay LNG's distributable cash flow during the quarter ended June 30, 2015 was relatively consistent with the quarter ended March 31, 2015, with higher earnings from its liquefied petroleum gas (LPG) joint venture and Angola LNG joint venture, offset by the termination of the charter contract for its 52 percent-owned LNG carrier, the Magallen Spirit in March 2015 (which termination Teekay LNG is currently disputing) and the scheduled expiration of the charter contract for another 52 percent-owned LNG carrier, the Methane Spirit. Please refer to Teekay LNG's second quarter 2015 earnings release for additional information on the financial results for this entity.
Teekay Tankers
Teekay Tankers' free cash flow increased during the quarter ended June 30, 2015, compared to the quarter ended March 31, 2015, primarily due to stronger average spot tanker rates earned on its Aframax tankers, LR2 product tankers and MR product tankers, a full quarter contribution from the five modern tankers acquired in the first quarter of 2015, and the addition of two chartered-in vessels which delivered in the first quarter of 2015, partially offset by slightly lower average spot tankers rates on Teekay Tankers' Suezmax tanker fleet. Please refer to Teekay Tankers' second quarter 2015 earnings release for additional information on the financial results for this entity.
Recent Transactions
Teekay Parent
On July 1, 2015, Teekay Parent completed the dropdown sale of the Knarr FPSO to Teekay Offshore for a fully built-up cost of approximately $1.26 billion. Teekay Offshore fully financed the acquisition through the assumption of an existing $745 million long-term debt facility, $300 million of common units issued to Teekay Parent, and $250 million of convertible preferred units issued in a private placement to a group of institutional investors.
Teekay Offshore
Teekay Offshore's first UMS, the Arendal Spirit, commenced its three-year charter contract with Petrobras in Brazil in early-June 2015.
During 2015, Teekay Offshore, through its wholly-owned subsidiary ALP Maritime Services B.V. (ALP), acquired six, modern on-the-water long-distance towing and offshore installation vessels for approximately $220 million. The vessels were built between 2006 and 2010 and are all equipped with dynamic-positioning (DP) capabilities, allowing them to be used for towage, station-keeping, installation and decommissioning of large floating objects such as FPSO units and floating drilling rigs.
In early-June 2015, Teekay Offshore entered into new long-term contracts with a group of customers to provide shuttle tanker services on the east coast of Canada. These 15-year contracts, plus extension options, are initially being serviced by three chartered-in shuttle tankers currently operating on the east coast of Canada. One of the chartered-in vessels currently servicing this contract is expected to be replaced by an existing Teekay Offshore owned shuttle tanker, the Navion Hispania, during the third quarter of 2015. In connection with this project, Teekay Offshore has entered into shipbuilding contracts to construct three Suezmax, DP2 shuttle tanker newbuildings with a South Korean shipyard for a fully built-up cost of approximately $370 million, with an option to order one additional vessel should a fourth vessel be required. The three ordered vessels are expected to be delivered during the fourth quarter of 2017 and through the first half of 2018.
Teekay LNG
In June 2015, Teekay LNG entered into a 13-year charter contract with BP Shipping Limited (BP) for one LNG carrier newbuilding, plus an option exercisable by BP by the end of the third quarter of 2015 for one additional LNG carrier charter under similar terms. The vessels will primarily provide LNG transportation of BP's LNG volumes from the Freeport LNG project located near Freeport, Texas. In connection with the signing of the BP contracts, Teekay LNG ordered two fuel-efficient 174,000 cubic meter LNG carrier newbuildings to be constructed by Hyundai Samho Heavy Industries Co., Ltd. of South Korea for a fully built-up cost of approximately $425 million. These vessels are scheduled for delivery in the first quarter of 2019.
Teekay Tankers
In early-August 2015, Teekay Tankers agreed to acquire 12 modern on-the-water Suezmax tankers from Principal Maritime Tankers for an aggregate purchase price of $662 million. The vessels are all scheduled to deliver by the end of October 2015 and are expected to operate in the spot tanker market upon or soon after delivery. All of the necessary financing for this acquisition has been secured, including a $30 million investment by Teekay Parent in Teekay Tankers' Class A shares.
In late-July 2015, Teekay Tankers acquired SPT Inc. (SPT) from Teekay Parent and I.M. Skaugen SE for a purchase price of $45.5 million. SPT provides a full suite of ship-to-ship (STS) transfer services in the oil, gas and dry bulk industries. SPT owns and operates a fleet of six STS support vessels and has one chartered-in Aframax tanker. Teekay Tankers issued $45.5 million of its Class B shares to Teekay Parent to fund the acquisition.
Liquidity
As at June 30, 2015, Teekay Parent had total liquidity of $330.0 million (consisting of $275.0 million cash and cash equivalents and $55.0 million of undrawn revolving credit facilities) and, on a consolidated basis, Teekay Corporation had total liquidity of $1.0 billion (consisting of $707.9 million of cash and cash equivalents and $338.6 million of undrawn revolving credit facilities).
Definitions and Non-GAAP Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S. Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow From Vessel Operations, Adjusted Net Income, Teekay Parent Free Cash Flow, and Net Interest Expense, are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings, and may not be comparable to similar measures presented by other companies. The Company believes that certain investors use this information to evaluate the Company's financial performance.
Teekay Parent Financial Measures
Teekay Parent Free Cash Flow represents the sum of (a) distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers) net of Teekay Parent's corporate general and administrative expenditures in the respective period (collectively, GPCO) plus (b) CFVO attributed to Teekay Parent's directly-owned and chartered-in assets, less net interest expense and drydock expenditures in the respective period (collectively, OPCO). Net interest expense includes interest expense, interest income and realized gains and losses on interest rate swaps. Please refer to Page 7 and Appendices B, C and D of this release for further details and reconciliations of the these non-GAAP measures to the most directly comparable GAAP measures reflected in the Company's consolidated financial statements.
Consolidated Financial Measures
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 and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO - Consolidated represents CFVO from vessels that are consolidated on the Company's financial statements. CFVO - Equity Investments represents the Company's proportionate share of CFVO from its equity-accounted vessels and other investments. CFVO is a non-GAAP financial measure used by certain investors to measure the financial performance of companies. Please refer to Appendices C and D of this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures reflected in the Company's consolidated financial statements.
Adjusted net income excludes from net income items of income or loss that are typically excluded by securities analysts in their published estimates of the Company's financial results. The Company believes that certain investors use this information to evaluate the Company's financial performance. Please refer to Appendix A of this release for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure reflected in the Company's consolidated financial statements.
Conference Call
The Company plans to host a conference call on Friday, August 7, 2015 at 11:00 a.m. (ET) to discuss its results for the second quarter of 2015. 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) 505-9573 or (416) 204-9498, if outside North America,
and quoting conference ID code 2199253.
-- 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 Friday, August 21, 2015. 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 2199253.
About Teekay
Teekay Corporation operates in the marine midstream space through its ownership of the general partners and a portion of the outstanding limited partner interests in Teekay LNG Partners L.P. (NYSE: TGP) and Teekay Offshore Partners L.P. (NYSE: TOO). The general partners own all of the outstanding incentive distribution rights. In addition, Teekay has a controlling ownership interest in Teekay Tankers Ltd. (NYSE: TNK) and directly owns a fleet of vessels. The combined Teekay entities manage and operate consolidated assets of approximately $12.5 billion, comprised of over 220 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.
Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".
Teekay Parent Free Cash Flow
(in thousands of U.S. dollars, except share and per share data)
(unaudited)
Three Months Ended
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December September
June 30, March 31, 31, 30, June 30,
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2015 2015 2014 2014 2014
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TEEKAY PARENT
GPCO CASH FLOW
Daughter
entities
distributions
to Teekay
Parent(1)
Limited Partner
interests (2)
Teekay LNG
Partners 17,646 17,646 17,646 17,439 17,439
Teekay
Offshore
Partners 12,819 12,819 12,819 12,819 12,819
General partner
interests
Teekay LNG
Partners 8,684 8,653 8,650 7,883 7,883
Teekay
Offshore
Partners 5,264 5,264 5,262 4,880 4,880
Other Dividends
Teekay Tankers
(2)(3) 881 881 881 756 629
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Total Daughter
Distributions 45,294 45,263 45,258 43,777 43,650
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Less:
Less: Corporate
general and
administrative
expenses (4,139) (6,889) (3,767) (4,068) (3,362)
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Total Parent
GPCO Cash Flow 41,155 38,374 41,491 39,709 40,288
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TEEKAY PARENT
OPCO CASH FLOW
Teekay Parent
cash flow from
vessel
operations (4)
Owned
Conventional
Tankers 4,628 4,291 1,549 277 855
In-Chartered
Conventional
Tankers (1,501) (2,476) (5,067) (4,441) (4,818)
FPSOs 31,698 7,487 18,077 (10,027) (25,700)
Other (5) 2,326 1,381 7,679 5,021 9,748
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Total (6) 37,151 10,683 22,238 (9,170) (19,915)
Less:
Net interest
expense (7) (28,635) (17,534) (15,056) (13,000) (15,015)
Dry docking
expenditures (208) - (3,652) (2,673) (378)
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Teekay Parent
OPCO Cash Flow 8,308 (6,851) 3,530 (24,843) (35,308)
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TOTAL TEEKAY
PARENT FREE
CASH FLOW 49,463 31,523 45,021 14,866 4,980
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Total Teekay
Parent Free
Cash Flow per
share 0.68 0.43 0.62 0.21 0.07
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Declared
dividend per
share 0.55 0.31625 0.31625 0.31625 0.31625
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Coverage Ratio
(8) 1.24x 1.36x 1.96x 0.66x 0.22x
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Weighted-average
number of
common shares -
Basic 72,697,121 72,549,068 72,498,974 72,393,072 72,036,526
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(1) Cash dividend and distribution cash flows are shown on an accrual basis
for dividends and distributions declared for the respective period.
(2) Common share/unit dividend/distribution cash flows to Teekay Parent are
based on Teekay Parent's ownership on the ex-dividend date for the
respective publicly-traded subsidiary and period as follows:
Three Months Ended
-----------------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
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2015 2015 2014 2014 2014
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Teekay LNG
Partners
Distribution
per common
unit $ 0.7000 $ 0.7000 $ 0.7000 $ 0.6918 $ 0.6918
Common units
owned by
Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274 25,208,274
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Total
distribution $17,645,792 $17,645,792 $17,645,792 $17,439,084 $17,439,084
Teekay Offshore
Partners
Distribution
per common
unit $ 0.5384 $ 0.5384 $ 0.5384 $ 0.5384 $ 0.5384
Common units
owned by
Teekay Parent 23,809,468 23,809,468 23,809,468 23,809,468 23,809,468
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Total
distribution $12,819,018 $12,819,018 $12,819,018 $12,819,018 $12,819,018
Teekay Tankers
Ltd.
Dividend per
share $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03
Shares owned
by Teekay
Parent (3) 29,364,141 29,364,141 29,364,141 25,197,475 20,976,530
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Total dividend $ 880,924 $ 880,924 $ 880,924 $ 755,924 $ 629,296
(3) Includes Class A and Class B shareholdings.
(4) Please refer to Appendix C for additional financial information on
Teekay Parent's cash flow from vessel operations.
(5) Includes $1.0 million for the three months ended June 30, 2015, $0.5
million for the three months ended December 31, 2014 and $0.8 million for
the three months ended September 30, 2014 relating to 50 percent of the
CFVO from Teekay Parent's conventional tanker commercial management and
technical management operations (Tanker Operations).
(6) Excludes corporate general and administrative expenses relating to GPCO.
(7) Excludes realized losses on an interest rate swap related to the debt
facility secured by the Knarr FPSO unit up to commencement of operations on
March 9, 2015 of $3.3 million, $5.3 million and $4.1 million for the three
months ended March 31, 2015, December 31, 2014 and September 30, 2014,
respectively. Please see Appendix D to this release for a reconciliation of
this non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
(8) Coverage ratio is the Total Teekay Parent free cash flow per share
divided by the declared dividend per share.
Teekay Corporation
Summary Consolidated Statements of Income (Loss)
(in thousands of U.S. dollars, except share and per share data)
Three Months Ended Six Months Ended
-----------------------------------------------------------
June 30, March 31, June 30, June 30, June 30,
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2015 2015 2014 2015 2014
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(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenues (1) 592,797 545,862 452,254 1,138,659 958,748
Voyage expenses (23,890) (25,670) (33,439) (49,560) (68,451)
Vessel operating
expenses (1)(2) (201,370) (184,203) (201,714) (385,573) (402,900)
Time-charter
hire expense (30,333) (24,927) (9,714) (55,260) (26,006)
Depreciation and
amortization (128,199) (112,704) (103,373) (240,903) (206,831)
General and
administrative
(2) (33,730) (37,954) (36,945) (71,684) (74,823)
Asset
impairments (3) (500) (15,496) - (15,996) -
Loan loss
recoveries (4) - - 2,521 - 2,521
Gain on sale of
vessels and
equipment - 1,643 9,615 1,643 9,453
Restructuring
reversals
(charges) 742 (9,126) 244 (8,384) (395)
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Income from
vessel
operations 175,517 137,425 79,449 312,942 191,316
Interest expense
(2) (62,388) (51,346) (49,656) (113,734) (98,989)
Interest income
(2) 1,199 1,530 793 2,729 2,576
Realized and
unrealized gain
(loss) on
derivative
instruments (2) 63,752 (83,386) (75,331) (19,634) (122,579)
Equity income
(5) 39,901 20,749 35,271 60,650 62,765
Income tax
(expense)
recovery (752) 995 (3,193) 243 (5,991)
Foreign exchange
(loss) gain (1,604) 17,510 (2,046) 15,906 (2,940)
Other (loss)
income (389) 375 (734) (14) 7,517
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Net income
(loss) 215,236 43,852 (15,447) 259,088 33,675
Less: Net income
attributable to
non-controlling
interests (149,324) (53,616) (27,540) (202,940) (77,150)
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Net income
(loss)
attributable to
stockholders of
Teekay
Corporation 65,912 (9,764) (42,987) 56,148 (43,475)
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Income (loss)
per common
share of Teekay
- Basic $0.91 ($0.13) ($0.60) $0.77 ($0.61)
- Diluted $0.90 ($0.13) ($0.60) $0.77 ($0.61)
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Weighted-average
number of
common shares
outstanding
- Basic 72,697,121 72,549,068 72,036,526 72,623,503 71,687,549
- Diluted 73,477,680 72,549,068 72,036,526 73,379,228 71,687,549
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(1) The costs of business development and engineering studies relating to
North Sea FPSO and FSO projects the Company is pursuing are substantially
reimbursable from customers upon completion. As a result, $2.8 million of
revenues and $2.6 million of costs were recognized in the six months ended
June 30, 2014 upon completion of one FPSO study.
(2) Realized and unrealized gains (losses) related to derivative instruments
that are not designated as hedges for accounting purposes are included as a
separate line item in the statements of income (loss). The realized
(losses) gains relate to the amounts the Company actually received or paid
to settle such derivative instruments and the unrealized gains (losses)
relate to the change in fair value of such derivative instruments, as
detailed in the table below:
Three Months Ended Six Months Ended
-----------------------------------------------------------
June 30, March 31, June 30, June 30, June 30,
-----------------------------------------------------------
2015 2015 2014 2015 2014
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Realized
(losses) gains
relating to:
Interest rate
swaps (27,205) (27,889) (30,755) (55,094) (60,245)
Termination of
interest rate
swap
agreements - - - - 1,000
Foreign
currency
forward
contracts (4,232) (5,428) 110 (9,660) (1,175)
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(31,437) (33,317) (30,645) (64,754) (60,420)
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Unrealized gains
(losses)
relating to:
Interest rate
swaps 83,986 (43,660) (39,096) 40,326 (64,494)
Foreign
currency
forward
contracts 9,386 (6,329) (1,926) 3,057 1,125
Stock purchase
warrants 1,817 (80) (3,664) 1,737 1,210
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95,189 (50,069) (44,686) 45,120 (62,159)
-----------------------------------------------------------
Total realized
and unrealized
gains (losses)
on non-
designated
derivative
instruments 63,752 (83,386) (75,331) (19,634) (122,579)
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(3) The Company recognized asset impairments of $0.5 million for the three
months ended June 30, 2015 relating to the expiration of one of Teekay
Offshore's UMS newbuilding options. The Company recognized asset
impairments of $15.5 million for the three months ended March 31, 2015
related to the impairment of two shuttle tankers owned by Teekay Offshore.
The impairment for the shuttle tankers was the result of a recent change in
the operating plan for one shuttle tanker and the expected sale of the
other shuttle tanker.
(4) The Company recovered $2.5 million during the three and six 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.
(5) The Company's proportionate share of items within equity income as
identified in Appendix A of this release is detailed in the table below. By
excluding these items from equity income, the Company believes the
resulting adjusted equity income is a normalized amount that can be used to
evaluate the financial performance of the Company's equity accounted
investments. Adjusted equity income is a non-GAAP measure.
Three Months Ended Six Months Ended
-----------------------------------------------------------
June 30, March 31, June 30, June 30, June 30,
-----------------------------------------------------------
2015 2015 2014 2015 2014
-----------------------------------------------------------
Equity income 39,901 20,749 35,271 60,650 62,765
Proportionate
share of
unrealized
(gains) losses
on derivative
instruments (15,423) 2,422 1,990 (13,001) 2,899
Dilution gain on
share issuance
by TIL - - - - (4,108)
Other(i) (1,365) 4,788 (9,772) 3,423 (8,806)
-----------------------------------------------------------
Equity income
adjusted for
items in
Appendix A 23,113 27,959 27,489 51,072 52,750
-----------------------------------------------------------
-----------------------------------------------------------
(i) Includes unrealized foreign exchange losses and restructuring charges in
Sevan Marine AS and cumulative cost pass-through adjustments in Teekay
LNG's Angola LNG project for the three months ended June 30, 2015. Includes
de-recognition of a deferred tax asset and unrealized foreign exchange
losses in Sevan Marine AS for the three months ended March 31, 2015.
Includes (gain) loss on sale of vessels in Teekay LNG's Exmar LPG BVBA
joint venture for the three and six months ended June 30, 2014.
Teekay Corporation
Summary Consolidated Balance Sheets
(in thousands of U.S. dollars)
As at
As at June As at December
30, March 31, 31
-----------------------------------
2015 2015 2014
-----------------------------------
(unaudited) (unaudited) (unaudited)
-----------------------------------
ASSETS
Cash and cash equivalents - Teekay
Parent 275,048 258,742 232,330
Cash and cash equivalents - Teekay LNG 106,991 106,410 159,639
Cash and cash equivalents - Teekay
Offshore 242,764 278,846 252,138
Cash and cash equivalents - Teekay
Tankers 83,082 40,513 162,797
Other current assets 481,697 468,439 473,872
Restricted cash - Teekay Parent 27,514 29,186 26,594
Restricted cash - Teekay LNG 55,222 56,632 45,997
Restricted cash - Teekay Offshore 73,700 69,972 46,760
Assets held for sale(1) 5,000 5,000 -
Vessels and equipment - Teekay Parent 2,115,665 2,133,883 809,184
Vessels and equipment - Teekay LNG 1,712,341 1,731,727 1,751,583
Vessels and equipment - Teekay Offshore 3,274,888 3,076,643 3,010,689
Vessels and equipment - Teekay Tankers 1,035,311 1,047,231 828,291
Advances on newbuilding contracts and
conversion costs 629,266 693,329 1,706,500
Derivative assets 18,464 10,967 14,415
Investment in equity accounted investees 890,351 847,408 873,421
Investment in direct financing leases 693,532 702,426 704,953
Other assets 511,373 485,899 501,812
Intangible assets 89,228 91,697 94,666
Goodwill 168,571 168,571 168,571
----------------------------------------------------------------------------
Total assets 12,490,008 12,303,521 11,864,212
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued liabilities 444,967 454,552 480,049
Current portion of long-term debt -
Teekay Parent 226,714 189,824 196,926
Current portion of long-term debt -
Teekay LNG 215,985 180,133 161,657
Current portion of long-term debt -
Teekay Offshore 466,952 395,008 258,014
Current portion of long-term debt -
Teekay Tankers 144,453 147,004 41,959
Long-term debt - Teekay Parent 1,621,277 1,656,749 1,523,362
Long-term debt - Teekay LNG 1,805,778 1,735,394 1,826,017
Long-term debt - Teekay Offshore 2,195,010 2,311,922 2,178,009
Long-term debt - Teekay Tankers 530,219 564,912 614,104
Derivative liabilities 627,217 728,412 626,139
In-process revenue contracts 161,798 167,721 173,412
Other long-term liabilities 404,332 409,641 383,089
Redeemable non-controlling interest 10,481 12,059 12,842
Equity:
Non-controlling interests 2,520,361 2,283,434 2,290,305
Stockholders of Teekay 1,114,464 1,066,756 1,098,328
----------------------------------------------------------------------------
Total liabilities and equity 12,490,008 12,303,521 11,864,212
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Debt - Teekay Parent(2) 1,545,429 1,558,645 1,461,364
Net Debt - Teekay LNG(2) 1,859,550 1,752,485 1,782,038
Net Debt - Teekay Offshore(2) 2,345,498 2,358,112 2,137,125
Net Debt - Teekay Tankers(2) 591,590 671,403 493,266
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In connection with the expected sale of an older shuttle tanker by
Teekay Offshore, the vessel and related equipment were classified as
"Assets held for sale" as at June 30, 2015 and March 31, 2015.
(2) Net debt is a non-GAAP measure and represents current and long-term debt
less cash and cash equivalents and, if applicable, restricted cash.
Teekay Corporation
Summary Consolidated Statements of Cash Flows
(in thousands of U.S. dollars)
Six Months Ended
-----------------------
June 30
-----------------------
2015 2014
-----------------------
(unaudited) (unaudited)
-----------------------
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
----------------------------------------------------------------------------
Net operating cash flow 336,314 201,529
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term debt 1,143,442 1,872,259
Prepayments of long-term debt (395,199) (613,516)
Scheduled repayments of long-term debt (282,391) (669,413)
Decrease (increase) in restricted cash 4,296 (385)
Net proceeds from equity issuances of subsidiaries 187,576 7,475
Equity contribution by joint venture partner 5,500 22,017
Issuance of common stock upon exercise of stock
options 1,158 44,372
Distribution from subsidiaries to non-controlling
interests (164,808) (155,567)
Cash dividends paid (45,910) (45,188)
Other (5,878) (3,396)
----------------------------------------------------------------------------
Net financing cash flow 447,786 458,658
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (873,274) (602,257)
Proceeds from sale of vessels and equipment 8,918 165,055
Investment in equity accounted investments (8,604) (50,648)
Repayments from equity accounted investees 16,768 6,175
Investment in direct financing lease assets - (54,800)
Increase in restricted cash (42,048) -
Other 15,121 10,528
----------------------------------------------------------------------------
Net investing cash flow (883,119) (525,947)
----------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (99,019) 134,240
Cash and cash equivalents, beginning of the period 806,904 614,660
----------------------------------------------------------------------------
Cash and cash equivalents, end of the period 707,885 748,900
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix A - Specific Items Affecting Net Income
(in thousands of U.S. dollars, except per share data)
Three Months Ended
-----------------------------------------------------------
June 30, 2015 March 31, 2015 June 30, 2014
-----------------------------------------------------------
(unaudited) (unaudited) (unaudited)
$ Per $ Per $ Per
$ Share(1) $ Share(1) $ Share(1)
----------------------------------------------------------------------------
Net income
(loss) - GAAP
basis 215,236 43,852 (15,447)
Adjust for: Net
income
attributable to
non-controlling
interests (149,324) (53,616) (27,540)
----------------------------------------------------------------------------
Net income
(loss)
attributable to
stockholders of
Teekay 65,912 0.91 (9,764) (0.13) (42,987) (0.60)
Add (subtract)
specific items
affecting net
income:
Unrealized
(gains)
losses from
derivative
instruments
(2) (110,612) (1.52) 52,491 0.72 46,676 0.65
Foreign
exchange
(gain)
loss(3) (2,167) (0.03) (21,673) (0.30) 1,903 0.03
Net gain on
sale of
vessels and
loan loss
recoveries(4) - - (1,643) (0.02) (12,136) (0.17)
Asset
impairments
(5) 500 0.01 15,496 0.21 - -
Restructuring
charges
(reversals)(6
) 137 - 3,802 0.05 (244) -
Pre-
operational
costs (7) - - 3,598 0.05 6,356 0.09
Other(8) 175 - 5,348 0.08 (8,472) (0.12)
Non-
controlling
interests'
share of
items
above(9) 65,761 0.90 (31,925) (0.44) (11,190) (0.16)
----------------------------------------------------------------------------
Total
adjustments (46,206) (0.64) 25,494 0.35 22,893 0.32
----------------------------------------------------------------------------
Adjusted net
income (loss)
attributable to
stockholders of
Teekay 19,706 0.27 15,730 0.22 (20,094) (0.28)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Basic per share amounts.
(2) Reflects the unrealized (gains) losses relating to the change in the
mark-to-market value of derivative instruments that are not designated as
hedges for accounting purposes, including those included in equity income
from joint ventures.
(3) Foreign currency exchange (gains) losses primarily relate to the
Company's debt denominated in Euros and Norwegian Kroner (NOK) in addition
to the unrealized (gains) losses on cross currency swaps used to
economically hedge the principal and interest on the NOK bonds. Nearly all
of the Company's foreign currency exchange gains and losses are unrealized.
(4) Net gain on sale of vessels for the three months ended March 31, 2015
includes the gain on sale of an older shuttle tanker. Net gain on sale of
vessels and loan loss recoveries for the three months ended June 30, 2014
includes the net gain on sale of two vessels to Tanker Investments Ltd.
(TIL) and the recovery of FPSO FEED study costs previously provided for.
(5) Includes the impairment relating to the expiration of one of Teekay
Offshore's UMS newbuilding options for the three months ended June 30, 2015
and the impairment of two shuttle tankers to their estimated fair values
for the three months ended March 31, 2015.
(6) Restructuring charges primarily relate to crew redundancy costs for the
three months ended June 30, 2015, the reorganization of the Company's
marine operations and corporate shared services for the three months ended
March 31, 2015 and the reorganization of the Company's marine operations
for the three months ended June 30, 2014.
(7) Relates to pre-operational costs and realized losses on interest rate
swaps for the Knarr FPSO unit for the three months ended March 31, 2015 and
realized losses on interest rate swaps for the Knarr FPSO for the three
months ended June 30, 2014.
(8) Other for the three months ended June 30, 2015 primarily relates to
realized loss on derivatives relating to assets in pre-operational phase,
write down of an investment and unrealized foreign exchange and
restructuring charge in Sevan Marine AS. Other for the three months ended
March 31, 2015 primarily relates to de-recognition of a deferred tax asset
and unrealized foreign exchange losses in Sevan Marine AS and realized
losses on foreign exchange forward contracts related to the upgrade costs
of an FPSO. Other for the three months ended June 30, 2014 relates to the
Company's share of (gain) loss on sale of vessels in Teekay LNG's Exmar LPG
BVBA joint venture.
(9) 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 B - Supplemental Financial Information
Summary Statement of Income for the Three Months Ended June 30, 2015
(in thousands of U.S. dollars)
(unaudited)
Consoli-
dation
Teekay Teekay Teekay Teekay Adjust-
Offshore LNG Tankers Parent ments(1) Total
-----------------------------------------------------------
Revenues 255,758 98,608 107,594 157,436 (26,599) 592,797
Voyage expenses (20,716) (373) (3,545) (315) 1,059 (23,890)
Vessel operating
expenses (77,935) (24,102) (26,201) (73,132) - (201,370)
Time-charter
hire expense (10,762) - (16,793) (30,016) 27,238 (30,333)
Depreciation and
amortization (53,864) (23,209) (15,227) (35,899) - (128,199)
General and
administrative (14,202) (7,068) (3,039) (9,642) 221 (33,730)
Asset
impairments (500) - - - - (500)
Restructuring
charges
(reversals) (135) - 879 - (2) 742
-----------------------------------------------------------
Income from
vessel
operations 77,644 43,856 43,668 8,432 1,917 175,517
Interest expense (24,741) (11,153) (3,075) (23,419) - (62,388)
Interest income 135 611 8 445 - 1,199
Realized and
unrealized
gains on
derivative
instruments 42,282 10,888 523 10,059 - 63,752
Equity income
(loss) 9,720 29,002 3,587 (468) (1,940) 39,901
Equity in
earnings of
subsidiaries
(2) - - - 66,517 (66,517) -
Income tax
(expense)
recovery (353) (258) (410) 269 - (752)
Foreign exchange
gain (loss) 2,789 (9,546) (59) 5,218 (6) (1,604)
Other income
(loss) 388 335 - (1,141) 29 (389)
-----------------------------------------------------------
Net income 107,864 63,735 44,242 65,912 (66,517) 215,236
Less: Net income
attributable to
non-controlling
interests (3) (3,638) (5,642) - - (140,044) (149,324)
-----------------------------------------------------------
Net income
attributable to
stockholders/un
itholders of
publicly-listed
entities 104,226 58,093 44,242 65,912 (206,561) 65,912
-----------------------------------------------------------
-----------------------------------------------------------
(1) Consolidation Adjustments column includes adjustments which eliminates
transactions between subsidiaries Teekay Offshore, Teekay LNG and Teekay
Tankers and Teekay Parent and results from Tanker Operations.
(2) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(3) Net income attributable to non-controlling interests in the Teekay
Offshore and Teekay LNG columns represent the joint venture partners' share
of the net income or 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.
Teekay Corporation
Appendix C - Supplemental Financial Information
Teekay Parent Summary Operating Results
For the three months ended June 30, 2015
(in thousands of U.S. dollars)
(unaudited)
In-Char-
Owned tered
Conven- Conven- Corpo- Teekay
tional tional Other rate Parent
Tankers Tankers FPSOs (1) G&A Total
-----------------------------------------------------------
Revenues 5,600 12,813 121,870 17,153 - 157,436
Voyage expenses - (169) (133) (13) - (315)
Vessel operating
expenses (870) (3,322) (63,689) (5,251) - (73,132)
Time-charter
hire expense - (10,375) (7,119) (12,522) - (30,016)
Depreciation and
amortization (713) - (35,298) 112 - (35,899)
General and
administrative (102) (448) (6,954) 2,001 (4,139) (9,642)
-----------------------------------------------------------
Income (loss)
from vessel
operations 3,915 (1,501) 8,677 1,480 (4,139) 8,432
-----------------------------------------------------------
Reconciliation of income (loss) from vessel operations to cash flow from
vessel operations
Income (loss)
from vessel
operations 3,915 (1,501) 8,677 1,480 (4,139) 8,432
Depreciation and
amortization 713 - 35,298 (112) - 35,899
Amortization of
in-process
revenue
contracts and
other - - (10,619) - - (10,619)
Realized losses
from the
settlements of
non-designated
derivative
instruments - - (1,658) - - (1,658)
-----------------------------------------------------------
CFVO -
Consolidated(2) 4,628 (1,501) 31,698 1,368 (4,139) 32,054
CFVO - Equity(3) 3,473 - (2,221) 925 - 2,177
-----------------------------------------------------------
CFVO - Total 8,101 (1,501) 29,477 2,293 (4,139) 34,231
-----------------------------------------------------------
-----------------------------------------------------------
(1) Includes results of two chartered-in LNG carriers owned by Teekay LNG
and two chartered-in FSO units owned by Teekay Offshore.
(2) In addition to the CFVO generated by its directly owned and chartered-in
assets, Teekay Parent also receives cash dividends and distributions from
its publicly-traded subsidiaries. For the three months ended June 30, 2015,
Teekay Parent received cash dividends and distributions from these
subsidiaries totaling $45.3 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 Teekay Parent's free cash flow summary on Page 7 of this release
for further details.
(3) Please see Appendix D 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 - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Consolidated
(in thousands of U.S. dollars)
(unaudited)
Three Months Ended
-----------------------------------
June 30, March 31, June 30,
-----------------------------------
2015 2015 2014
----------------------------------------------------------------------------
Income from vessel operations 175,517 137,425 79,449
Depreciation and amortization 128,199 112,704 103,373
Amortization of in process revenue
contracts and other (13,570) (6,391) (11,945)
Realized (gains) losses from the
settlements of non-designated
derivative instruments (4,019) (4,870) 110
Loan loss recoveries - - (2,521)
Asset impairments, net of gain on sale
of vessels and equipment 500 13,853 (9,615)
Cash flow from time-charter contracts,
net of revenue accounted for as direct
finance leases 5,676 5,547 5,257
----------------------------------------------------------------------------
Cash flow from vessel operations -
Consolidated 292,303 258,268 164,108
Cash flow from vessel operations -
Equity Accounted Vessels (see Appendix
D) 59,898 62,587 60,318
----------------------------------------------------------------------------
Cash flow from vessel operations - Total 352,201 320,855 224,426
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Equity Accounted Vessels
(in thousands of U.S. dollars)
(unaudited)
Three Months Ended
-----------------------------------------------------------
June 30, 2015 March 31, 2015 June 30, 2014
-----------------------------------------------------------
Comp- Comp- Comp-
any's any's any's
At Portion At Portion At Portion
100% (1) 100% (1) 100% (2)
----------------------------------------------------------------------------
Revenues 260,425 106,817 263,322 109,287 237,518 104,804
Vessel and other
operating
expenses (109,073) (46,119) (110,981) (47,848) (109,616) (45,244)
Depreciation and
amortization (36,284) (15,971) (36,572) (16,207) (33,902) (15,805)
Gain on sale of
vessels - - - - 19,543 9,772
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 115,068 44,727 115,769 45,232 113,543 53,527
Interest expense (27,273) (11,122) (28,591) (12,205) (23,839) (10,547)
Realized and
unrealized gain
(loss) on
derivative
instruments 22,497 9,483 (19,784) (6,997) (20,239) (7,237)
Other income -
net (2,405) (958) (10,541) (4,748) (815) (472)
----------------------------------------------------------------------------
Net income of
equity
accounted
vessels 107,887 42,130 56,853 21,282 68,650 35,271
Pro forma
equity loss
from Teekay
Operations - (2,229) - (533) - -
----------------------------------------------------------------------------
Equity income of
equity
accounted
vessels 107,887 39,901 56,853 20,749 68,650 35,271
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 115,068 44,727 115,769 45,232 113,543 53,527
Depreciation and
amortization 36,284 15,971 36,572 16,207 33,902 15,805
Gain on sale of
vessels - - - - (19,543) (9,772)
Cash flow from
time-charter
contracts net
of revenue
accounted for
as direct
finance lease 8,296 3,010 8,584 3,134 7,697 2,792
Amortization of
in-process
revenue
contracts and
other (3,719) (1,894) (3,959) (2,013) (4,002) (2,034)
----------------------------------------------------------------------------
Cash flow from
vessel
operations of
equity
accounted
vessels(3) 155,929 61,814 156,966 62,560 131,597 60,318
Pro forma CFVO
from Tanker
Operations(4) - (1,916) - 27 - -
----------------------------------------------------------------------------
Cash flow from
vessel
operations of
equity
accounted
vessels(3) 155,929 59,898 156,966 62,587 131,597 60,318
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 16 percent to 52 percent.
(2) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 13 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.
(4) Pro forma CFVO from Tanker Operations represents the Company's 100
percent CFVO from Tanker Operations as Teekay Parent and Teekay Tankers
each account for their 50 percent interest in Tanker Operations as an
equity-accounted investment. Upon consolidation of Teekay Tankers into
Teekay, the results of Tanker Operations are accounted for on a
consolidated basis.
Teekay Corporation
Appendix D - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Teekay Parent
(in thousands of U.S. dollars)
(unaudited)
Three Months Ended March 31, 2015
-----------------------------------------------------------
(unaudited)
-----------------------------------------------------------
In-
char-
Owned tered
Conven- Conven- Corpo- Teekay
tional tional rate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
income (loss)
from vessel
operations 3,578 (2,476) (8,139) 937 (6,889) (12,989)
Depreciation and
amortization 713 - 21,259 (113) - 21,859
Amortization of
in process
revenue
contracts and
other - - (3,457) 570 - (2,887)
Realized losses
from the
settlements of
non-designated
foreign
currency
derivative
instruments - - (2,176) - - (2,176)
----------------------------------------------------------------------------
Cash flow from
vessel
operations
-Teekay Parent 4,291 (2,476) (7,487) 1,394 (6,889) 3,807
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
-----------------------------------------------------------
(unaudited)
-----------------------------------------------------------
In-
char-
Owned tered
Conven- Conven- Corpo- Teekay
tional tional rate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
income (loss)
from vessel
operations 836 (5,067) 4,381 7,272 (3,767) 3,655
Depreciation and
amortization 713 - 20,854 (113) - 21,454
Loss on sale of
vessels and
equipment - - 282 - - 282
Amortization of
in-process
revenue
contracts and
other - - (5,943) - - (5,943)
Realized losses
from the
settlements of
non-designated
foreign
currency
derivative
instruments - - (1,497) - - (1,497)
----------------------------------------------------------------------------
Cash flow from
vessel
operations
-Teekay Parent 1,549 (5,067) 18,077 7,159 (3,767) 17,951
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2014
-----------------------------------------------------------
(unaudited)
-----------------------------------------------------------
In-
char-
Owned tered
Conven- Conven- Corpo- Teekay
tional tional rate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
(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 - - (1,217) (7,285) - (8,802)
Amortization of
in process
revenue
contracts and
other - - (6,580) - - (6,580)
Realized gains
(losses) from
the settlements
of non-
designated
foreign
currency
derivative
instruments 11 - (167) - - (156)
----------------------------------------------------------------------------
Cash flow from
vessel
operations
-Teekay Parent 277 (4,441) (10,027) 4,256 (4,068) (14,003)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended June 30, 2014
-----------------------------------------------------------
(unaudited)
-----------------------------------------------------------
In-
char-
Owned tered
Conven- Conven- Corpo- Teekay
tional tional rate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
(loss) income
from vessel
operations (161) (4,818) (34,843) 9,810 (3,362) (33,374)
Depreciation and
amortization 710 - 18,296 (62) - 18,944
Loan loss
recoveries - - (2,521) - - (2,521)
Loss on sale of
vessels and
equipment 340 - - - - 340
Amortization of
in process
revenue
contracts and
other - - (6,580) - - (6,580)
Realized losses
from the
settlements of
non-designated
foreign
currency
derivative
instruments (34) - (52) - - (86)
----------------------------------------------------------------------------
Cash flow from
vessel
operations
-Teekay Parent 855 (4,818) (25,700) 9,748 (3,362) (23,277)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix D - Reconciliation of Non-GAAP Financial Measures
Net Interest Expense - Teekay Parent
(in thousands of U.S. dollars)
(unaudited)
Three Months Ended
-----------------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
2015 2015 2014 2014 2014
-----------------------------------------------------------
Interest expense (62,388) (51,346) (57,334) (52,206) (49,656)
Interest income 1,199 1,530 1,465 2,786 793
----------------------------------------------------------------------------
Net interest
expense -
consolidated (61,189) (49,816) (55,869) (49,420) (48,863)
Less:
Non-Teekay
Parent net
interest
expense (38,215) (34,753) (42,279) (37,944) (38,088)
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Interest expense
net of interest
income - Teekay
Parent (22,974) (15,063) (13,590) (11,476) (10,775)
Add:
Teekay Parent
realized
losses on
interest rate
swaps (1) (5,661) (2,471) (1,466) (1,524) (4,240)
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Net interest
expense -
Teekay Parent (28,635) (17,534) (15,056) (13,000) (15,015)
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(1) Realized losses on interest rate swaps exclude realized losses of $3.3
million, $5.3 million and $4.1 million for the three months ended March 31,
2015, December 31, 2014 and September 30, 2014, respectively, on the
interest rate swap related to the debt facility secured by the Knarr FPSO
unit up to commencement of operations on March 9, 2015.
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: expectations for future dividend increases by Teekay Parent and distribution increases by its daughter entities; the impact of the Knarr FPSO dropdown on Teekay Parent's balance sheet and results of operations; Teekay LNG and Teekay Offshore's expected future revenues and remaining average contract durations; fundamentals in the liquefied natural gas and offshore industry; the Company's daughter entities' access to competitive bank financing and multiple capital markets; the outcome of Teekay LNG's dispute over the Magellan Spirit offhire incident and claimed charter contract termination; the total cost and timing for the delivery of newbuilding projects and timing of commencement of associated time-charter contracts; the timing, certainty and purchase price of pending acquisitions; and the daughter entities' current and future growth projects, including the impact of these projects on Teekay Parent's cash flows and dividend.
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 newbuilding orders or greater or less than anticipated rates of vessel 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, FSOs, FPSOs, UMS, and towage vessels; changes in oil production and the impact on the Company's tankers and offshore units; fluctuations in global oil prices; trends in prevailing charter rates for the Company's vessels and offshore unit 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 cash distributions by the Company's daughter entities to the Company; factors affecting the outcome of Teekay LNG's dispute over the Magellan Spirit; timely completion of the Freeport LNG project as currently designed; failure by Teekay Tankers to complete its vessel acquisitions; successful integration of vessels or companies acquired by Teekay or its daughter entities; failure of the respective Board of Directors of the general partners of Teekay Offshore and Teekay LNG to approve future cash distribution increases; failure by the Company's Board of Directors to approve future dividend increases; 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, 2014. 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.
Contacts: For Investor Relations Enquiries Ryan Hamilton +1 (604) 844-6654 www.teekay.com
Source: Teekay Corporation