Teekay Corporation Reports Fourth Quarter and Annual 2015 Results
HAMILTON, BERMUDA -- (Marketwired) -- 02/18/16 -- Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported financial and operating results for the fourth quarter and fiscal year 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), and 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 fourth quarter and fiscal year 2015 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 Year Ended
(in thousands of U.S.
dollars, except per December September December December December
share amounts) 31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
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TEEKAY CORPORATION
CONSOLIDATED
Revenues 700,106 611,617 544,989 2,450,382 1,993,920
Cash Flow from Vessel
Operations (CFVO) (1) 401,396 341,342 308,228 1,415,794 1,049,202
Adjusted Net Income (1) 29,808 2,833 30,670 68,077 1,473
Adjusted Net Income per
share (1) 0.41 0.04 0.42 0.94 0.02
GAAP Net Income (Loss) 38,238 (12,235) (13,656) 82,151 (54,757)
GAAP Net Income (Loss)
per share 0.53 (0.17) (0.19) 1.13 (0.76)
TEEKAY PARENT
Teekay Parent GPCO Cash
Flow (1) 8,871 53,797 41,491 142,197 159,153
Teekay Parent OPCO Cash
Flow (1) 58 6,029 3,530 7,544 (73,148)
Total Teekay Parent Free
Cash Flow (1) 8,929 59,826 45,021 149,741 86,005
Total Teekay Parent Free
Cash Flow per share (1) 0.12 0.82 0.62 2.05 1.20
Declared Dividend per
share 0.055 0.55 0.31625 1.471 1.265
(1) These are non-GAAP measures. Please refer to "Definitions and Non-GAAP
Measures" on Page 6 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 8 for a summary of Teekay Parent Free Cash
Flow.
CEO Commentary
"Despite the challenging macro energy environment affecting our customers, the Teekay Group generated strong cash flow growth during the fourth quarter and fiscal year of 2015 and recorded the highest fiscal year adjusted earnings since 2008, highlighting our diversified business model and our integral role in our customers' oil and gas production logistics chains," commented Peter Evensen, Teekay Corporation's President and Chief Executive Officer. "The strong cash flow growth and earnings were driven mainly by the delivery and acquisition of various growth projects during 2015, including our largest FPSO project to date, the Knarr FPSO, tanker fleet growth and the highest spot tanker rates in seven years."
Mr. Evensen added "Teekay Offshore and Teekay LNG continue to operate with high fleet utilization, generating stable cash flows supported by large portfolios of fee-based contracts with high quality counterparties, while Teekay Tankers recorded one of its strongest years ever and implemented a new variable dividend policy."
"The decision in December to temporarily reduce Teekay Corporation's dividend was a direct result of temporary cash distribution reductions by our two MLPs, Teekay Offshore and Teekay LNG. It was a difficult decision and was caused by the inability of both MLPs to access competitively priced capital in the current negative capital market environment and was not caused by a shortfall in the cash flows of our operating businesses," Mr. Evensen continued. "We believe the reductions are in the best interests of long-term investors as the reallocation of a significant portion of our internally generated cash flows will be used to fund our profitable growth projects scheduled to deliver over the next several years and which we expect will result in higher available distributable cash flow per unitholder at each MLP."
"Looking ahead to 2016, despite the anticipated redelivery of Teekay Offshore's Varg FPSO after operating on the Varg field for almost 18 years, the Teekay Group's operating cash flows are expected to remain relatively strong supported by high fleet utilization, the delivery of various growth projects in 2016 and the continued strength in the conventional tanker market. In addition, we are focusing on project execution, operational efficiencies and securing required financings for our two MLPs."
Business Outlook for 2016 and 2017
The Company plans to host a conference call on Thursday, February 18, at 2:00 p.m. (ET) to discuss the results contained in this news release as well as its business outlook, which includes additional forecasted cash flows for the Company's two master limited partnerships for 2016 and 2017. A copy of the Fourth Quarter 2015 Earnings and Business Outlook Presentation, which will be discussed during this conference call, is available at http://media3.marketwire.com/docs/1043446p.pdf.
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated cash flow from vessel operations (CFVO) increased to $401.4 million for the quarter ended December 31, 2015, compared to $308.2 million for the same period of the prior year, primarily due to higher cash flows from Teekay Offshore related to the charter contract commencements for the Petrojarl Knarr (Knarr) FPSO unit and the Arendal Spirit Unit for Maintenance and Safety (UMS), the acquisition of six long-distance towing and offshore installation vessels in 2015 and a production bonus recorded in the fourth quarter of 2015 relating to the Voyageur Spirit FPSO unit. In addition, cash flows from Teekay Tankers increased as a result of its acquisition of 17 modern conventional tankers in 2015, the expansion of its chartered-in tanker portfolio in 2014 and 2015, and higher spot tanker rates.
The Company's consolidated adjusted net income attributable to shareholders decreased slightly to $29.8 million, or $0.41 per share, during the quarter ended December 31, 2015, compared to $30.7 million, or $0.42 per share, for the same period of the prior year.
On a GAAP basis, the Company's consolidated net income was $38.2 million, or $0.53 per share, for the quarter ended December 31, 2015, compared to net loss of $13.7 million, or $0.19 per share, for the same period of the prior year.
Teekay Parent
Teekay Parent GPCO Cash Flow, which includes distributions and dividends received by Teekay Parent from Teekay's publicly-listed subsidiaries in the following quarter less Teekay Parent's corporate general and administrative expenses was $8.9 million for the quarter ended December 31, 2015, compared to $41.5 million for the same period of the prior year. The distributions and dividends received from Teekay's publicly-listed subsidiaries for the quarter ended December 31, 2015 decreased to $13.0 million, compared to $45.3 million for the same period of the prior year, primarily due to the reductions in quarterly general partner and limited partner cash distributions received from Teekay Offshore and Teekay LNG as a result of the temporary reduction in cash distributions on Teekay Offshore's and Teekay LNG's common units, partially offset by an increase in cash dividends received from Teekay Tankers as a result of the implementation of its new variable dividend policy whereby Teekay Tankers intends to pay out 30 to 50 percent of its quarterly adjusted net income. For the fourth quarter of 2015, Teekay Tankers declared and paid a dividend of $0.12 per share, an increase of 300 percent from the previous quarter.
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, decreased to approximately breakeven for the quarter ended December 31, 2015, from $3.5 million for the same period of the prior year. The decrease is primarily due to the timing of drydocking expenditures for the Shoshone Spirit Very Large Crude Carrier (VLCC) and two chartered-in shuttle tankers, the Petronordic and Petroatlantic, and lower annual incentive-based revenues recognized as a result of lower oil prices relating to the Hummingbird Spirit and Foinaven floating production, storage and offloading (FPSO) units, partially offset by lower operating costs as a result of the sale of the Petrojarl I FPSO unit to Teekay Offshore in December 2014.
Total Teekay Parent Free Cash Flow, which is the total of GPCO and OPCO cash flows, was $8.9 million during the fourth quarter of 2015, compared to $45.0 million for the same period of the prior year. Please refer to Page 8 of this release for additional information about Teekay Parent Free Cash Flow.
On January 20, 2016, the Company declared a cash dividend on its common stock of $0.055 per share for the quarter ended December 31, 2015. The cash dividend is payable on February 18, 2016 to all shareholders of record on February 5, 2016.
Summary Results of Daughter Entities
Teekay Offshore Partners
Teekay Offshore's distributable cash flow(1) increased during the quarter ended December 31, 2015 compared to the same period of the prior year, primarily due to the acquisition of the Knarr FPSO unit in July 2015, the acquisition of six long-distance towing and offshore installation vessels during the first seven months of 2015, the commencement of the Arendal Spirit UMS charter contract in early-June 2015 and the Voyageur Spirit FPSO unit's production bonus recorded in the fourth quarter of 2015. These increases were partially offset by the expiration of two shuttle tanker contracts in the second quarter of 2015 and the sale of two conventional tankers in the fourth quarter of 2015. Please refer to Teekay Offshore's fourth quarter and fiscal year 2015 earnings release for additional information on the financial results for this entity.
Teekay LNG Partners
Teekay LNG's distributable cash flow(1) decreased during the quarter ended December 31, 2015 compared to the same period of the prior year, primarily due to the termination of the charter contract for Teekay LNG's 52 percent-owned Magellan Spirit liquefied natural gas (LNG) carrier in March 2015 (which termination Teekay LNG's joint venture with Marubeni Corporation is currently disputing), the scheduled expiration of the charter contract for Teekay LNG's 52 percent-owned Methane Spirit LNG carrier in March 2015, and lower capitalized distributions relating to equity financing of newbuildings as a result of the temporary reduction in cash distributions on its common units. These decreases were partially offset by the lower interest expense resulting from the December 2014 termination of capital leases for, and the subsequent refinancing of, three 70 percent-owned LNG carriers (the RasGas II LNG Carriers), higher cash flows from Teekay LNG's Exmar LPG BVBA joint venture and higher revenue from the Teide Spirit Suezmax tanker. Please refer to Teekay LNG's fourth quarter and fiscal year 2015 earnings release for additional information on the financial results for this entity.
Teekay Tankers
Teekay Tankers' free cash flow(2) increased during the quarter ended December 31, 2015 compared to the same period of the prior year, primarily due to higher average spot tanker rates earned and an increase in fleet size related to the acquisition of 17 modern conventional tankers in 2015 and expansion of its chartered-in tanker portfolio in 2014 and 2015. Please refer to Teekay Tankers' fourth quarter and fiscal year 2015 earnings release for additional information on the financial results for this entity.
(1) Distributable cash flow is a non-GAAP financial measure used by certain
investors to measure the financial performance of Teekay Offshore,
Teekay LNG and other master limited partnerships. Please see Appendix B
to each of Teekay Offshore's and Teekay LNG's fourth quarter and fiscal
year 2015 earnings releases for reconciliations of Teekay Offshore's
and Teekay LNG's distributable cash flows to the most directly
comparable financial measures under GAAP.
(2) Free cash flow (FCF) represents net income, plus depreciation and
amortization, unrealized losses from derivatives, non-cash items, FCF
from the equity accounted investments and any write-offs or other non-
recurring items, less unrealized gains from derivatives, equity income
from the equity accounted investments, net income attributable to the
Entities under Common Control and other non-cash items. Please see
Appendix B to Teekay Tankers' fourth quarter and fiscal year 2015
earnings release for a reconciliation of free cash flow (a non-GAAP
measure) to the most directly comparable financial measure under GAAP.
Recent Transactions
Teekay Parent
During the fourth quarter of 2015, Teekay Parent secured a 12 month charter-out contract for the Shoshone Spirit VLCC at $49,000 per day, which expires in December 2016.
Teekay Offshore
Teekay Offshore completed the sale of two conventional tankers and has entered into an agreement to sell its remaining two conventional tankers for aggregate sales proceeds of approximately $130 million. The first two conventional tankers, the SPT Explorer and Navigator Spirit, were sold to Teekay Tankers in mid-December 2015 and the two remaining conventional tankers, the Kilimanjaro Spirit and Fuji Spirit, are expected to be delivered to a third party in March 2016. After repaying existing debt secured by these assets and the novation of an existing $50 million revolving credit facility to Teekay Tankers, these transactions are expected to add approximately $60 million to Teekay Offshore's liquidity position.
In November 2015, Teekay Offshore received a termination notice for the Petrojarl Varg (Varg) FPSO charter contract from the charterer Repsol S.A. (Repsol), formerly Talisman Energy, based on a termination right that is specific to the Varg FPSO contract. Following discussions with the charterer, Teekay Offshore currently expects the Varg FPSO to be redelivered to Teekay Offshore in August 2016. Teekay Offshore is currently pursuing various redeployment opportunities for the Varg FPSO, a unit which meets the strict Norwegian petroleum industry (NORSOK) standards.
Teekay LNG
In December 2015, a joint venture consisting of Teekay LNG, Samsung C&T (Samsung) and Gulf Investment Corporation (GIC) finalized a 20-year contract with the Government of the Kingdom of Bahrain to develop an LNG receiving and regasification terminal in Bahrain for start-up in mid-2018. The project will include a floating storage unit (FSU), an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility and an onshore nitrogen production facility. The project is expected to have a capacity of 800 million standard cubic feet per day and will be owned and operated through a new joint venture owned by National Oil & Gas Authority (30%), Teekay LNG (30%), Samsung (20%) and GIC (20%). Teekay LNG will provide the project with the FSU, modifying one of its previously unchartered MEGI LNG carrier newbuildings, under a 20-year charter contract to the joint venture. The project, not including the FSU to be time chartered from Teekay LNG, project management and development, financing and other costs, is expected to cost the joint venture approximately $655 million, which is expected to be funded through a combination of equity capital and project finance through a consortium of regional and international banks.
During the fourth quarter of 2015, Teekay LNG's first MEGI LNG carrier newbuilding completed sea trials with the second vessel scheduled to commence sea trials late in the first quarter of 2016. These vessels will commence their respective five-year fee-based charter contracts with Cheniere Energy in March and the third quarter of 2016, respectively, and are expected to earn total annual cash flow from vessel operations and distributable cash flow of $50 million and $30 million. In early-February 2016, Teekay LNG secured a 10-year, $360 million long-term lease facility to finance these two LNG carriers.
Teekay LNG owns two 52 percent-owned LNG carriers, the Marib Spirit and Arwa Spirit, through its joint venture with Marubeni Corporation that are currently on long-term charters expiring in 2029 to the Yemen LNG project (YLNG), a consortium led by Total SA. Due to the political situation in Yemen, YLNG decided to temporarily close the LNG plant in 2015. As a result of a possible extended plant closing, Teekay LNG's joint venture agreed to a temporary deferral of a significant portion of the charter payments for the two LNG carriers during 2016. Upon future resumption of the LNG plant in Yemen, it is expected that YLNG will repay the deferred amounts in full over a period of time to be agreed upon.
In February 2016, Teekay LNG's Exmar LPG joint venture took delivery of the sixth of its 12 LPG carrier newbuildings, which will commence a five-year charter with Statoil ASA.
Teekay Tankers
During the fourth quarter of 2015, Teekay Tankers built on its recent ship-to-ship transfer acquisition of SPT Inc. and expanded its U.S. Gulf presence through the acquisition and chartering-in of three purpose-built Lightering Aframax tankers. On December 18, 2015, Teekay Tankers acquired two Lightering Aframax tankers, the SPT Explorer and Navigator Spirit, from Teekay Offshore for an aggregate purchase price of $80 million and chartered-in the third Lightering Aframax tanker for a firm contract period of five years, which is scheduled to deliver between February and March 2016.
In January 2016, Teekay Tankers completed a new five-year $900 million long-term debt facility, which was 1.4 times oversubscribed. The new facility includes term loan and revolving credit facility components which were used to refinance 36 of Teekay Tankers' existing vessels, including 17 vessels acquired during 2015 that were secured by Teekay Tankers' two bridge loan facilities that matured in early-2016, and Teekay Tankers' main corporate revolving credit facility which would have otherwise expired in 2017. This new facility extends Teekay Tankers' debt maturity profile and provides financial flexibility in the future.
Liquidity
As at December 31, 2015, Teekay Parent had total liquidity of $234.5 million (consisting of $221.0 million of cash and cash equivalents and $13.5 million of undrawn revolving credit facilities) and, on a consolidated basis, Teekay Corporation had total liquidity of approximately $860.7 million (consisting of $678.4 million of cash and cash equivalents and $182.3 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 Attributable to Shareholders, 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, Teekay Parent GPCO Cash Flow) plus (b) CFVO attributed to Teekay Parent's directly-owned and chartered-in assets, less Teekay Parent's net interest expense and drydock expenditures in the respective period (collectively, Teekay Parent OPCO Cash Flow). Net interest expense includes interest expense, interest income and realized gains and losses on interest rate swaps. Please refer to Page 8 and Appendices B, C and D of this release for further details and reconciliations of 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 attributable to shareholders 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 Thursday, February 18, 2016 at 2:00 p.m. (ET) to discuss its results for the fourth quarter and fiscal year 2015 as well as its business outlook. 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 6610943.
-- 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, March 3, 2016. 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 6610943.
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 of these entities. In addition, Teekay has a controlling ownership interest in Teekay Tankers Ltd. (NYSE: TNK) and directly owns a fleet of vessels. The combined Teekay entities manage and operate consolidated assets of over $13 billion, comprised of approximately 220 liquefied gas, offshore, and conventional tanker assets. With offices in 15 countries and approximately 7,700 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)
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Three Months Ended
December September June March
31, 2015 30, 2015 30, 2015 31, 2015
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TEEKAY PARENT GPCO CASH FLOW
Daughter Entities
distributions to Teekay
Parent (1)
Limited Partner interests
(2)
Teekay LNG 3,529 17,646 17,646 17,646
Teekay Offshore 4,203 21,399 12,819 12,819
GP interests
Teekay LNG 227 8,761 8,684 8,653
Teekay Offshore 240 8,407 5,264 5,264
Other Dividends
Teekay Tankers (2)(3) 4,846 1,212 881 881
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Total Daughter Entity
Distributions 13,045 57,425 45,294 45,263
Less:
Corporate general and
administrative expenses (4,174) (3,628) (4,139) (6,889)
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Total Parent GPCO Cash Flow 8,871 53,797 41,155 38,374
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TEEKAY PARENT OPCO CASH FLOW
Teekay Parent cash flow from
vessel operations (4)
Owned Conventional Tankers 2,418 2,422 4,628 4,291
In-Chartered Conventional
Tankers (561) (1,385) (1,501) (2,476)
FPSOs 15,373 (4,071) 31,698 7,487
Other (5)(6) 3,605 22,765 2,326 1,381
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Total (7) 20,835 19,731 37,151 10,683
Less:
Net interest expense (8) (15,708) (13,656) (28,635) (17,534)
Dry docking expenditures (5,069) (46) (208) -
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Teekay Parent OPCO Cash Flow 58 6,029 8,308 (6,851)
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TOTAL TEEKAY PARENT FREE
CASH FLOW 8,929 59,826 49,463 31,523
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Total Teekay Parent Free
Cash Flow per share 0.12 0.82 0.68 0.43
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Declared dividend per share 0.055 0.55 0.55 0.31625
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Coverage Ratio (9) 2.18x 1.49x 1.24x 1.36x
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Weighted-average number of
common shares - Basic 72,708,463 72,706,285 72,697,121 72,549,068
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Three Months Ended
December September June March
31, 2014 30, 2014 30, 2014 31, 2014
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TEEKAY PARENT GPCO CASH FLOW
Daughter Entities
distributions to Teekay
Parent (1)
Limited Partner interests
(2)
Teekay LNG 17,646 17,439 17,439 17,439
Teekay Offshore 12,819 12,819 12,819 12,819
GP interests
Teekay LNG 8,650 7,883 7,883 7,568
Teekay Offshore 5,262 4,880 4,880 4,868
Other Dividends
Teekay Tankers (2)(3) 881 756 629 629
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Total Daughter Entity
Distributions 45,258 43,777 43,650 43,323
Less:
Corporate general and
administrative expenses (3,767) (4,068) (3,362) (5,658)
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Total Parent GPCO Cash Flow 41,491 39,709 40,288 37,665
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TEEKAY PARENT OPCO CASH FLOW
Teekay Parent cash flow from
vessel operations (4)
Owned Conventional Tankers 1,549 277 855 4,490
In-Chartered Conventional
Tankers (5,067) (4,441) (4,818) (2,819)
FPSOs 18,077 (10,027) (25,700) (13,906)
Other (5)(6) 7,679 5,021 9,748 12,408
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Total (7) 22,238 (9,170) (19,915) 173
Less:
Net interest expense (8) (15,056) (13,000) (15,015) (16,151)
Dry docking expenditures (3,652) (2,673) (378) (549)
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Teekay Parent OPCO Cash Flow 3,530 (24,843) (35,308) (16,527)
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TOTAL TEEKAY PARENT FREE
CASH FLOW 45,021 14,866 4,980 21,138
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Total Teekay Parent Free
Cash Flow per share 0.62 0.21 0.07 0.30
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Declared dividend per share 0.31625 0.31625 0.31625 0.31625
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Coverage Ratio (9) 1.96x 0.66x 0.22x 0.95x
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Weighted-average number of
common shares - Basic 72,498,974 72,393,072 72,036,526 71,328,577
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(1) Daughter dividends and distributions for each quarter consist of the
amount of dividends and distributions received by Teekay Parent in the
following quarter.
(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 March
31, 2015 30, 2015 30, 2015 31, 2015
Teekay LNG Partners
Distribution per common
unit $ 0.1400 $ 0.7000 $ 0.7000 $ 0.7000
Common units owned by
Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274
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Total distribution $ 3,529,158 $17,645,792 $17,645,792 $17,645,792
Teekay Offshore Partners
Distribution per common
unit $ 0.1100 $ 0.5600 $ 0.5384 $ 0.5384
Common units owned by
Teekay Parent 38,211,772 38,211,772 23,809,468 23,809,468
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Total distribution $ 4,203,295 $21,398,592 $12,819,018 $12,819,018
Teekay Tankers Ltd.
Dividend per share $ 0.12 $ 0.03 $ 0.03 $ 0.03
Shares owned by Teekay
Parent (3) 40,387,231 40,387,231 29,364,141 29,364,141
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Total dividend $ 4,846,468 $ 1,211,617 $ 880,924 $ 880,924
Three Months Ended
December September June March
31, 2014 30, 2014 30, 2014 31, 2014
Teekay LNG Partners
Distribution per common
unit $ 0.7000 $ 0.6918 $ 0.6918 $ 0.6918
Common units owned by
Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274
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Total distribution $17,645,792 $17,439,084 $17,439,084 $17,439,084
Teekay Offshore Partners
Distribution per common
unit $ 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
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Total distribution $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
Shares owned by Teekay
Parent (3) 29,364,141 25,197,475 20,976,530 20,976,530
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Total dividend $ 880,924 $ 755,924 $ 629,296 $ 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 $1.6 million, $0.7 million, $1.0 million, $0.5 million and
$0.8 million for the three months ended December 31, 2015, September
30, 2015, June 30, 2015, December 31, 2014 and September 30, 2014,
respectively, relating to 50 percent of the CFVO from Teekay Parent's
conventional tanker commercial management and technical management
operations (Tanker Operations). Teekay Tankers owns the remaining 50%
of the Tanker Operations.
(6) Includes $3.2 million of fees earned from managing vessel transactions
for Tanker Investment Ltd. (TIL) and $13.9 million of business
development fees received from Teekay Offshore in connection with the
Knarr FPSO, UMS and towage transactions for the three months ended
September 30, 2015.
(7) Excludes corporate general and administrative expenses relating to
GPCO.
(8) 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.
(9) Coverage ratio is calculated by dividing the Teekay Parent free cash
flow per share 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 Year Ended
December September December December December
31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Revenues 700,106 611,617 544,989 2,450,382 1,993,920
Voyage expenses (36,292) (29,935) (25,213) (115,787) (127,847)
Vessel operating
expenses (244,810) (213,656) (200,333) (844,039) (809,319)
Time-charter
hire expense (40,267) (43,021) (24,315) (138,548) (67,219)
Depreciation and
amortization (137,785) (130,812) (109,238) (509,500) (422,904)
General and
administrative
expenses (32,478) (29,022) (34,509) (133,184) (140,917)
Asset
impairments (1) (55,645) - - (71,641) (4,759)
Loan loss
recoveries (2) - - - - 2,521
(Loss) gain on
sale of vessels
and equipment (177) - 2,839 1,466 13,509
Restructuring
charges (1,639) (3,994) (6,766) (14,017) (9,826)
----------------------------------------------------------------------------
Income from
vessel
operations 151,013 161,177 147,454 625,132 427,159
Interest expense (66,285) (62,450) (57,334) (242,469) (208,529)
Interest income 1,098 2,161 1,465 5,988 6,827
Realized and
unrealized gain
(loss) on
derivative
instruments (3) 27,101 (109,667) (103,304) (102,200) (231,675)
Equity income
(4) 27,226 14,995 25,417 102,871 128,114
Income tax
recovery
(expense) 18,974 (2,450) (1,071) 16,767 (10,173)
Foreign exchange
gain (loss) 2,117 (20,218) (3,126) (2,195) 13,431
Other - net 1,744 (164) (6,998) 1,566 (1,152)
----------------------------------------------------------------------------
Net income
(loss) 162,988 (16,616) 2,503 405,460 124,002
Less: Net
(income) loss
attributable to
non-controlling
interests (124,750) 4,381 (16,159) (323,309) (178,759)
----------------------------------------------------------------------------
Net income
(loss)
attributable to
shareholders of
Teekay
Corporation 38,238 (12,235) (13,656) 82,151 (54,757)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income (loss)
per common
share of Teekay
- Basic $ 0.53 $ (0.17)$ (0.19)$ 1.13 $ (0.76)
- Diluted $ 0.52 $ (0.17)$ (0.19)$ 1.12 $ (0.76)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Weighted-average
number of
common shares
outstanding
- Basic 72,708,463 72,706,285 72,498,974 72,665,783 72,066,008
- Diluted 72,886,260 72,706,285 72,498,974 73,190,564 72,066,008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Company recognized asset impairments of $55.6 million for the three
months ended December 31, 2015 relating to the write-downs of two
2000s-built conventional tankers and five 1990s-built shuttle tankers
owned by Teekay Offshore to their estimated fair values, using
appraised values. The write-down of the two conventional tankers was
the result of the expected sale of the vessels and the vessels were
classified as held for sale on Teekay Offshore's consolidated balance
sheet as at December 31, 2015. The write-down of the five shuttle
tankers, which have an average age of 17.5 years, was the result of
changes in Teekay Offshore's expectations of their future
opportunities, primarily due to their advanced age. While Teekay
Offshore expects four of the five vessels to continue to actively trade
as shuttle tankers over the near-term and the fifth vessel to actively
trade in the conventional tanker market, Teekay Offshore anticipates
fewer opportunities for alternative usage and increased age
discrimination over time. Results for the year ended December 31, 2015
also include the write-down of two 1990s-built shuttle tankers owned by
Teekay Offshore. The write-down of one of these shuttle tankers was a
result of the expected sale of the vessel and the vessel was classified
as held for sale as at December 31, 2015 and the write-down of the
second shuttle tanker was a result of a change in the operating plan of
the vessel. The Company recognized asset impairments of $4.8 million
for the year ended December 31, 2014 related to the impairment of one
1990s-built shuttle tanker owned by Teekay Offshore.
(2) The Company recovered $2.5 million during the year ended December 31,
2014 related to a receivable for an FPSO front-end engineering and
design study (FEED) completed in 2013, which was previously provided
for.
(3) Realized and unrealized (losses) gains related to derivative
instruments that are not designated as hedges for accounting purposes
are included as a separate line item in the statements of income
(loss). The realized losses relate to the amounts the Company actually
paid to settle such derivative instruments and the unrealized gains
(losses) relate to the change in fair value of such derivative
instruments, as detailed in the table below:
----------------------------------------------------------------------------
Three Months Ended Year Ended
December September December December December
31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
----------------------------------------------------------------------------
Realized losses
relating to:
Interest rate
swaps (26,084) (26,858) (33,072) (108,036) (125,424)
Termination of
interest rate
swap
agreements - (10,876) (2,319) (10,876) (1,319)
Foreign
currency
forward
contracts (5,697) (6,250) (2,828) (21,607) (4,436)
----------------------------------------------------------------------------
(31,781) (43,984) (38,219) (140,519) (131,179)
----------------------------------------------------------------------------
Unrealized gains
(losses)
relating to:
Interest rate
swaps 58,079 (60,682) (53,111) 37,723 (86,045)
Foreign
currency
forward
contracts 1,317 (4,792) (14,154) (418) (16,926)
Stock purchase
warrants (514) (209) 2,180 1,014 2,475
----------------------------------------------------------------------------
58,882 (65,683) (65,085) 38,319 (100,496)
----------------------------------------------------------------------------
Total realized
and unrealized
gains (losses)
on non-
designated
derivative
instruments 27,101 (109,667) (103,304) (102,200) (231,675)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(4) 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 Year Ended
December September December December December
31, 2015 30, 2015 31, 2014 31, 2015 31, 2014
----------------------------------------------------------------------------
Equity income 27,226 14,995 25,417 102,871 128,114
Proportionate
share of
unrealized
(gains) losses
on derivative
instruments (6,465) 13,568 2,082 (5,898) (1,132)
Dilution gain on
share issuance
by TIL - - - - (4,108)
Other(i) 2,537 (8,700) - (2,740) (16,923)
----------------------------------------------------------------------------
Equity income
adjusted for
items in
Appendix A 23,298 19,863 27,499 94,233 105,951
----------------------------------------------------------------------------
----------------------------------------------------------------------------
i. Includes (a) loss on sale of an LPG carrier owned by Teekay LNG's Exmar
LPG BVBA joint venture, (b) Teekay Parent's share of unrealized foreign
exchange loss in Sevan Marine ASA and (c) severance costs in the Gemini
Tankers LLC joint venture for the three months ended December 31, 2015.
Includes the gain on sale of SPT subsidiaries to Teekay Tankers in the
ship-to-ship transfer joint venture for the three months ended September
30, 2015. Includes unrealized foreign exchange losses and restructuring
charges in Sevan Marine ASA and cumulative cost pass-through adjustments
in Teekay LNG's Angola LNG project for the year ended December 31, 2015.
Includes net gains on sale of vessels in Teekay LNG's Exmar LPG BVBA
joint venture for the year ended December 31, 2014.
Teekay Corporation
Summary Consolidated Balance Sheets
(in thousands of U.S. dollars)
As at As at As at
December 31, September 30, December 31,
2015 2015 2014
(unaudited) (unaudited) (unaudited)
ASSETS
Cash and cash equivalents -
Teekay Parent 221,021 303,889 232,330
Cash and cash equivalents -
Teekay LNG 102,481 154,173 159,639
Cash and cash equivalents -
Teekay Offshore 258,473 251,058 252,138
Cash and cash equivalents -
Teekay Tankers 96,417 80,579 162,797
Other current assets 497,362 466,754 473,872
Restricted cash - Teekay Parent 3,528 30,961 26,594
Restricted cash - Teekay LNG 111,519 70,196 45,997
Restricted cash - Teekay
Offshore 60,520 49,350 46,760
Restricted cash - Teekay
Tankers 870 915 -
Assets held for sale(1) 55,450 15,092 -
Vessels and equipment - Teekay
Parent 748,963 764,135 809,184
Vessels and equipment - Teekay
LNG 1,683,292 1,696,281 1,751,583
Vessels and equipment - Teekay
Offshore 4,348,535 4,579,915 3,010,689
Vessels and equipment - Teekay
Tankers 1,767,925 1,589,297 828,291
Advances on newbuilding
contracts and conversion costs 817,878 726,265 1,706,500
Derivative assets 17,924 13,771 14,415
Investment in equity accounted
investees 905,159 876,383 873,421
Investment in direct financing
leases 684,129 690,437 704,953
Other assets(2) 399,322 399,432 417,290
Intangible assets 111,909 117,474 94,666
Goodwill 168,571 168,571 168,571
----------------------------------------------------------------------------
Total assets 13,061,248 13,044,928 11,779,690
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 476,490 470,687 480,049
Current portion of long-term
debt - Teekay Parent(2) 245,949 342,878 188,003
Current portion of long-term
debt - Teekay LNG(2) 198,448 227,052 158,175
Current portion of long-term
debt - Teekay Offshore(2) 470,589 453,651 249,671
Current portion of long-term
debt - Teekay Tankers(2) 163,776 473,859 41,333
Long-term debt - Teekay
Parent(2) 610,449 633,849 1,494,031
Long-term debt - Teekay LNG(2) 1,859,888 1,811,693 1,812,356
Long-term debt - Teekay
Offshore(2) 2,893,285 2,864,036 2,158,925
Long-term debt - Teekay
Tankers(2) 1,000,829 544,361 613,032
Derivative liabilities 681,623 760,745 626,139
In-process revenue contracts 150,799 157,969 173,412
Other long-term liabilities 352,378 394,961 383,089
Redeemable non-controlling
interest 255,671 260,298 12,842
Equity:
Non-controlling interests 2,782,049 2,745,323 2,290,305
Shareholders of Teekay 919,025 903,566 1,098,328
----------------------------------------------------------------------------
Total liabilities and equity 13,061,248 13,044,928 11,779,690
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Debt - Teekay Parent(3) 631,849 641,877 1,423,110
Net Debt - Teekay LNG(3) 1,844,336 1,814,376 1,764,895
Net Debt - Teekay Offshore(3) 3,044,881 3,017,279 2,109,698
Net Debt - Teekay Tankers(3) 1,067,318 936,726 491,568
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In connection with the expected sale of two conventional tankers by
Teekay Offshore, the vessels and related equipment of $50.5 million
were classified as held for sale as at December 31, 2015. In connection
with the expected sale of an older shuttle tanker by Teekay Offshore,
the vessel and related equipment of $5.0 million were classified as
held for sale as at December 31, 2015 and September 30, 2015. In
connection with the expected sale of a conventional tanker by Teekay
Tankers, the vessel and related equipment of $10.1 million were
classified as held for sale as at September 30, 2015.
(2) Prior period information relating to debt issuance costs has been
retrospectively adjusted due to the adoption of Accounting Standards
Update 2015-03, Simplifying the Presentation of Debt Issuance Costs (or
ASU 2015-03). As a result of adopting ASU 2015-03, non-current assets,
total assets and total liabilities and equity decreased by $91.7
million (December 31, 2015), $92.1 million (September 30, 2015) and
$84.5 million (December 31, 2014), current portion of long-term debt
decreased by $25.6 million (December 31, 2015), $26.0 million
(September 30, 2015) and $21.4 million (December 31, 2014), and long-
term debt decreased by $66.1 million (December 31, 2015), $66.0 million
(September 30, 2015) and $63.1 million (December 31, 2014).
(3) 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)
Year Ended
December 31, December 31,
2015 2014
(unaudited) (unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
----------------------------------------------------------------------------
Net operating cash flow 770,328 446,317
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term debt 2,452,878 3,365,045
Prepayments of long-term debt (554,831) (1,331,469)
Scheduled repayments of long-term debt (1,044,715) (1,770,437)
(Increase) decrease in restricted cash (21,005) 380,953
Net proceeds from equity issuances of
subsidiaries 575,349 452,061
Equity contribution by joint venture partner 5,500 27,267
Issuance of common stock upon exercise of stock
options 1,217 55,165
Distribution from subsidiaries to non-
controlling interests (360,392) (360,820)
Cash dividends paid (125,881) (91,004)
Other (3,682) -
----------------------------------------------------------------------------
Net financing cash flow 924,438 726,761
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (1,799,601) (994,931)
Proceeds from sale of vessels and equipment 20,472 180,638
Purchase of SPT (46,961) -
Investment in equity accounted investments (40,595) (79,602)
Repayments from (advances to) equity accounted
investees 53,173 (87,130)
Increase in restricted cash (34,290) -
Direct financing lease payments received 20,824 22,856
Investment in CVI Ocean Transportation II Inc. - (25,000)
Other 3,700 2,335
----------------------------------------------------------------------------
Net investing cash flow (1,823,278) (980,834)
----------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (128,512) 192,244
Cash and cash equivalents, beginning of the year 806,904 614,660
----------------------------------------------------------------------------
Cash and cash equivalents, end of the year 678,392 806,904
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix A - Specific Items Affecting Net Income (Loss)
(in thousands of U.S. dollars, except per share data)
----------------------------------------------------------------------------
Three Months Three Months
Ended Ended Year Ended
December 31, September 30, December 31,
2015 2015 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
$ Per $ Per $ Per
$ Share(1) $ Share(1) $ Share(1)
Net income (loss) -
GAAP basis 162,988 (16,616) 405,460
Adjust for: Net
(income) loss
attributable to non-
controlling interests(124,750) 4,381 (323,309)
----------------------------------------------------------------------------
Net income (loss)
attributable to
shareholders of
Teekay 38,238 0.53 (12,235) (0.17) 82,151 1.13
----------------------------------------------------------------------------
Add (subtract)
specific items
affecting net income:
Unrealized (gains)
losses from
derivative
instruments (2) (65,356) (0.90) 80,311 1.10 (43,166) (0.59)
Foreign exchange
(gains) losses(3) (7,533) (0.10) 14,594 0.20 (16,779) (0.23)
Net loss (gain) on
sale of vessels(4) 1,415 0.02 (8,700) (0.12) (8,928) (0.12)
Asset impairments(5) 55,645 0.76 - - 71,641 0.99
Restructuring
charges(6) 1,148 0.02 484 0.01 5,571 0.08
Impact of lease
termination (7) 1,450 0.02 - - 1,450 0.02
Pre-operational
costs (8) 2,138 0.03 426 0.01 7,579 0.10
Adjustment to
deferred taxes(9) (18,633) (0.26) (5,834) (0.08) (24,467) (0.34)
Other(10) 1,578 0.02 9,876 0.14 15,560 0.21
Non-controlling
interests' share of
items above(11) 19,718 0.27 (76,089) (1.05) (22,535) (0.31)
----------------------------------------------------------------------------
Total adjustments (8,430) (0.12) 15,068 0.21 (14,074) (0.19)
----------------------------------------------------------------------------
Adjusted net income
attributable to
shareholders of
Teekay 29,808 0.41 2,833 0.04 68,077 0.94
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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 and hedge ineffectiveness from derivative
instruments designated as hedges for accounting purposes.
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 losses (gains) 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. Includes the Company's share of the loss on sale of an LPG carrier for
the three months and year ended December 31, 2015, gain on sale of the
SPT subsidiaries to Teekay Tankers in the ship-to-ship transfer joint
venture for the three months ended September 30, 2015 and year ended
December 31, 2015, and gain on sale of a shuttle tanker for the year
ended December 31, 2015.
5. Please refer to footnote (1) of the summary consolidated statements of
income (loss) about the write-down of vessels for the three months and
year ended December 31, 2015.
6. Restructuring charges primarily relate to crew redundancy costs.
7. Relates to the capital lease termination for RasGas II LNG Carriers for
the three months and year ended December 31, 2015.
8. Includes costs associated with the delivery deferral of the Stavanger
Spirit UMS for the three months and year ended December 31, 2015 and
currency forward contracts and interest rate swaps related to projects
during their pre-operational phases for the three months ended December
31, 2015, September 30, 2015 and year ended December 31, 2015.
9. Adjustment to deferred taxes primarily relates to a decrease in the
valuation allowance related to certain Norwegian entities and an
increase in deferred income tax asset for one of Teekay Offshore's
Norwegian tax structures for the three months and year ended December
31, 2015 and a net deferred tax recovery related to the acquisition of
the Knarr FPSO by Teekay Offshore for the three months ended September
30, 2015 and year ended December 31, 2015.
10. Other primarily relates to Teekay Parent's share of unrealized foreign
exchange losses in Sevan Marine ASA and severance costs in the Gemini
Tankers LLC joint venture for the three months and year ended December
31, 2015 and realized loss on termination of an interest rate swap for
the three months ended September 30, 2015 and year ended December 31,
2015.
11. 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.
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 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.
Teekay Corporation
Appendix A - Specific Items Affecting Net Income
(in thousands of U.S. dollars, except per share data)
----------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, 2014 December 31, 2014
(unaudited) (unaudited)
----------------------------------------------------------------------------
$ Per $ Per
$ Share(1) $ Share(1)
Net income - GAAP basis 2,503 124,002
Adjust for: Net income attributable
to non-controlling interests (16,159) (178,759)
----------------------------------------------------------------------------
Net loss attributable to
shareholders of Teekay (13,656) (0.19) (54,757) (0.76)
----------------------------------------------------------------------------
Add (subtract) specific items
affecting net income:
Unrealized losses from derivative
instruments (2) 67,167 0.93 99,364 1.38
Foreign exchange losses (gains)(3) 342 - (17,384) (0.24)
Net gain on sale of vessels and
loan loss recoveries(4) (2,839) (0.04) (32,954) (0.46)
Asset impairments(5) - - 4,759 0.07
Restructuring charges(6) - - 2,818 0.04
Formation of TIL(7) - - (10,948) (0.15)
Loss on bond repurchases 6,839 0.09 7,699 0.11
Impact of lease termination (8) 12,978 0.18 12,978 0.18
Pre-operational costs (9) 2,609 0.04 15,641 0.22
Adjustment to deferred taxes(10) 4,200 0.06 4,200 0.06
Other(11) 7,547 0.10 10,424 0.14
Non-controlling interests' share
of items above(12) (54,517) (0.75) (40,367) (0.57)
----------------------------------------------------------------------------
Total adjustments 44,326 0.61 56,230 0.78
----------------------------------------------------------------------------
Adjusted net income attributable to
shareholders of Teekay 30,670 0.42 1,473 0.02
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Basic per share amounts.
2. Reflects the unrealized 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 losses (gains) primarily relate to the
Company's debt denominated in Euros and Norwegian Kroner (NOK) in
addition to the unrealized losses (gains) 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. Includes the gain on sale of a shuttle tanker to Teekay Offshore's 50/50
joint venture with Odebrecht, the Company's share of the gain on sale of
vessels in the Exmar LPG BVBA joint venture, a net gain on the sale of
an office building, a net gain on the sale of six vessels to TIL, and
the recovery of FPSO FEED study costs previously provided for the year
ended December 31, 2014.
5. Includes the impairment of a shuttle tanker for the year ended December
31, 2014.
6. Restructuring charges primarily relate to crew redundancy costs.
7. 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 and a dilution gain on share issuance by TIL.
8. Relates to the capital lease terminations for the RasGas II LNG Carriers
for the year ended December 31, 2014.
9. Includes realized losses on interest rate swaps and income taxes related
to the Knarr FPSO during its pre-operational phase for the year ended
December 31, 2014.
10. Adjustment to deferred taxes relates to an increase in the valuation
allowance in relation the Banff FPSO for the year ended December 31,
2014.
11. Other primarily relates to a permanent impairment charge on marketable
securities, Norwegian pension termination costs and the write-off of
mobilization costs relating to the HiLoad DP unit for the year ended
December 31, 2014.
12. 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.
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.
Teekay Corporation
Appendix B - Supplemental Financial Information
Summary Statement of Income for the Three Months Ended December 31, 2015
(in thousands of U.S. dollars)
(unaudited)
Teekay Consolidation
Teekay Teekay Tankers Teekay Adjustments
Offshore LNG (1) Parent (2) Total
Revenues 339,142 103,642 167,506 114,540 (24,724) 700,106
Voyage expenses (26,607) (215) (9,599) (904) 1,033 (36,292)
Vessel
operating
expenses (108,920) (24,046) (48,559) (63,285) - (244,810)
Time-charter
hire expense (15,112) - (23,403) (27,470) 25,718 (40,267)
Depreciation
and
amortization (71,974) (23,002) (25,131) (18,368) 690 (137,785)
General and
administrative
expenses (14,190) (5,666) (6,217) (6,836) 431 (32,478)
Asset
impairments (55,645) - - - - (55,645)
Gain (loss) on
sale of
vessels and
equipment - - 771 (948) - (177)
Restructuring
charges (276) (491) - (872) - (1,639)
----------------------------------------------------------------------------
Income (loss)
from vessel
operations 46,418 50,222 55,368 (4,143) 3,148 151,013
Interest
expense (33,013) (10,827) (7,644) (16,885) 2,084 (66,285)
Interest income 203 539 39 2,386 (2,069) 1,098
Realized and
unrealized
gains on
derivative
instruments 16,478 9,957 497 169 - 27,101
Equity income 913 23,588 5,480 331 (3,086) 27,226
Equity in
earnings of
subsidiaries
(3) - - - 51,552 (51,552) -
Income tax
recovery
(expense) 15,703 (2,431) (1,653) 7,355 - 18,974
Foreign
exchange
(loss) gain (827) 5,712 405 (3,146) (27) 2,117
Other - net 825 355 (5) 619 (50) 1,744
----------------------------------------------------------------------------
Net income 46,700 77,115 52,487 38,238 (51,552) 162,988
Less: Net
income
attributable
to non-
controlling
interests (4) (2,829) (4,891) - - (117,030) (124,750)
----------------------------------------------------------------------------
Net income
attributable
to
shareholders/
unitholders of
publicly-
listed
entities 43,871 72,224 52,487 38,238 (168,582) 38,238
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Financial information for Teekay Tankers includes operations of the SPT
Explorer and Navigator Spirit from December 18, 2015, the date Teekay
Tankers acquired the vessels from Teekay Offshore.
2. Consolidation Adjustments column includes adjustments which eliminate
transactions between subsidiaries (a) Teekay Offshore, Teekay LNG and
Teekay Tankers and (b) Teekay Parent and results from Tanker Operations.
3. Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
4. 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 B - Supplemental Financial Information
Summary Statement of Income for the Year Ended December 31, 2015
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Teekay
Teekay Teekay Tankers
Offshore LNG (1)
----------------------------------------------------------------------------
Revenues 1,229,413 397,991 504,347
Voyage expenses (98,006) (1,146) (19,566)
Vessel operating expenses (378,480) (94,101) (130,775)
Time-charter hire expense (51,750) - (77,799)
Depreciation and amortization (274,599) (92,253) (71,429)
General and administrative
expenses (72,613) (25,118) (16,694)
Asset impairments (71,641) - -
Gain (loss) on sale of vessels
and equipment 1,643 - 771
Restructuring charges (568) (4,001) (4,772)
----------------------------------------------------------------------------
Income (loss) from vessel
operations 283,399 181,372 184,083
Interest expense (122,838) (43,259) (16,987)
Interest income 633 2,501 106
Realized and unrealized losses
on derivative instruments (73,704) (20,022) (1,598)
Equity income 7,672 84,171 14,411
Equity in earnings of
subsidiaries (3) - - -
Income tax recovery (expense) 21,357 (2,722) (3,336)
Foreign exchange (loss) gain (17,467) 13,943 253
Other - net 1,091 1,526 (5)
----------------------------------------------------------------------------
Net income 100,143 217,510 176,927
Less: Net income attributable
to non-controlling interests
(4) (13,911) (16,627) -
----------------------------------------------------------------------------
Net income attributable to
shareholders/ unitholders of
publicly-listed entities 86,232 200,883 176,927
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix B - Supplemental Financial Information
Summary Statement of Income for the Year Ended December 31, 2015
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Consolidation
Teekay Adjustments
Parent (2) Total
----------------------------------------------------------------------------
Revenues 419,166 (100,535) 2,450,382
Voyage expenses (1,607) 4,538 (115,787)
Vessel operating expenses (240,683) - (844,039)
Time-charter hire expense (113,417) 104,418 (138,548)
Depreciation and amortization (71,909) 690 (509,500)
General and administrative
expenses (18,176) (583) (133,184)
Asset impairments - - (71,641)
Gain (loss) on sale of vessels
and equipment (948) - 1,466
Restructuring charges (2,654) (2,022) (14,017)
----------------------------------------------------------------------------
Income (loss) from vessel
operations (30,228) 6,506 625,132
Interest expense (64,492) 5,107 (242,469)
Interest income 7,840 (5,092) 5,988
Realized and unrealized losses
on derivative instruments (6,876) - (102,200)
Equity income 3,415 (6,798) 102,871
Equity in earnings of
subsidiaries (3) 171,333 (171,333) -
Income tax recovery (expense) 1,468 - 16,767
Foreign exchange (loss) gain 754 322 (2,195)
Other - net (1,063) 17 1,566
----------------------------------------------------------------------------
Net income 82,151 (171,271) 405,460
Less: Net income attributable
to non-controlling interests
(4) - (292,771) (323,309)
----------------------------------------------------------------------------
Net income attributable to
shareholders/ unitholders of
publicly-listed entities 82,151 (464,042) 82,151
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Financial information for Teekay Tankers includes operations of the SPT
Explorer and Navigator Spirit from December 18, 2015, the date Teekay
Tankers acquired the vessels from Teekay Offshore.
2. Consolidation Adjustments column includes adjustments which eliminate
transactions between subsidiaries (a) Teekay Offshore, Teekay LNG and
Teekay Tankers and (b) Teekay Parent and results from Tanker Operations.
3. Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
4. 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 December 31, 2015
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Owned In-Chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Revenues 3,494 11,161 80,947
Voyage expenses (118) (282) 115
Vessel operating expenses (862) (2,824) (50,300)
Time-charter hire expense - (8,192) (8,440)
Depreciation and amortization (713) - (17,768)
General and administrative
expenses (96) (424) (3,677)
Loss on sale of vessels and
equipment - - (948)
Restructuring charges - - -
----------------------------------------------------------------------------
Income (loss) from vessel
operations 1,705 (561) (71)
----------------------------------------------------------------------------
Reconciliation of income (loss)
from vessel operations to cash
flow from vessel operations
Income (loss) from vessel
operations 1,705 (561) (71)
Depreciation and amortization 713 - 17,768
Loss on sale of vessels and
equipment - - 948
Amortization of in-process
revenue contracts and other - - (1,483)
Realized losses from the
settlements of non-designated
derivative instruments - - (1,789)
----------------------------------------------------------------------------
CFVO - Consolidated(2) 2,418 (561) 15,373
CFVO - Equity Investments(3) 3,307 - (779)
----------------------------------------------------------------------------
CFVO - Total 5,725 (561) 14,594
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other (1) G&A Total
----------------------------------------------------------------------------
Revenues 18,938 - 114,540
Voyage expenses (619) - (904)
Vessel operating expenses (9,299) - (63,285)
Time-charter hire expense (10,838) - (27,470)
Depreciation and amortization 113 - (18,368)
General and administrative
expenses 1,535 (4,174) (6,836)
Loss on sale of vessels and
equipment - - (948)
Restructuring charges (872) - (872)
----------------------------------------------------------------------------
Income (loss) from vessel
operations (1,042) (4,174) (4,143)
----------------------------------------------------------------------------
Reconciliation of income (loss)
from vessel operations to cash
flow from vessel operations
Income (loss) from vessel
operations (1,042) (4,174) (4,143)
Depreciation and amortization (113) - 18,368
Loss on sale of vessels and
equipment - - 948
Amortization of in-process
revenue contracts and other 3,186 - 1,703
Realized losses from the
settlements of non-designated
derivative instruments - - (1,789)
----------------------------------------------------------------------------
CFVO - Consolidated(2) 2,031 (4,174) 15,087
CFVO - Equity Investments(3) 1,378 - 3,906
----------------------------------------------------------------------------
CFVO - Total 3,409 (4,174) 18,993
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Includes the 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
December 31, 2015, Teekay Parent received cash distributions and
dividends from these subsidiaries totaling $13.0 million. The
distributions and dividends received by Teekay Parent include, among
others, those made with respect to its general partner interests in
Teekay Offshore and Teekay LNG. Please refer to Teekay Parent's free
cash flow summary on Page 8 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
December 31, September 30, December 31,
2015 2015 2014
----------------------------------------------------------------------------
Income from vessel operations 151,013 161,177 147,454
Depreciation and amortization 137,785 130,812 109,238
Amortization of in process
revenue contracts and other (6,488) (6,777) (9,561)
Realized losses from the
settlements of non-designated
derivative instruments (5,295) (5,824) (2,828)
Loss (gain) on sale of vessels
and equipment 177 - (2,839)
Asset impairments 55,645 - -
Cash flow from time-charter
contracts(1), net of revenue
accounted for as direct
finance leases 6,586 6,620 5,675
----------------------------------------------------------------------------
CFVO - Consolidated 339,423 286,008 247,139
CFVO - Equity Investments (see
Appendix D) 61,973 55,334 61,089
----------------------------------------------------------------------------
CFVO - Total 401,396 341,342 308,228
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Year Ended
December 31, December 31,
2015 2014
----------------------------------------------------------------------------
Income from vessel operations 625,132 427,159
Depreciation and amortization 509,500 422,904
Amortization of in process revenue contracts
and other (33,226) (43,289)
Realized losses from the settlements of non-
designated derivative instruments (20,008) (4,437)
Asset impairments 71,641 4,759
Gain on sale of vessels and equipment (1,466) (13,509)
Loan loss recoveries - (2,521)
Cash flow from time-charter contracts(1), net
of revenue accounted for as direct finance
leases 24,429 19,636
----------------------------------------------------------------------------
CFVO - Consolidated 1,176,002 810,702
CFVO - Equity Investments (see Appendix D) 239,792 238,500
----------------------------------------------------------------------------
CFVO - Total 1,415,794 1,049,202
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Teekay LNG's charter contracts for two of its Suezmax tankers, the
Bermuda Spirit and Hamilton Spirit, were amended in 2012, which had the
effect of reducing the daily charter rates by $12,000 per day for a
duration of 24 months ended September 30, 2014. The cash impact of the
change in hire rates is not fully reflected in Teekay LNG's statements
of income and comprehensive income as the change in the lease payments
is being recognized on a straight-line basis over the term of the lease.
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
December 31, 2015 September 30, 2015 December 31, 2014
----------------------------------------------------------------------------
At Company's At Company's At Company's
Portion(1 Portion(2 Portion(3
100% ) 100% ) 100% )
----------------------------------------------------------------------------
Revenues 270,717 105,188 244,551 98,043 277,894 120,796
Vessel and other
operating
expenses (108,285) (41,579) (108,402) (42,720) (138,084) (59,493)
Depreciation and
amortization (48,511) (20,547) (38,840) (16,378) (33,638) (14,815)
(Loss) gain on
sale of vessels (2,455) (1,228) 16,822 8,410 - -
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 111,466 41,834 114,131 47,355 106,172 46,488
Interest expense (29,199) (11,932) (30,715) (12,539) (25,280) (10,806)
Realized and
unrealized gain
(loss) on
derivative
instruments 3,329 597 (43,485) (17,874) (21,195) (7,497)
Other - net (394) (243) (173) 86 (7,543) (3,112)
----------------------------------------------------------------------------
Net income of
equity
accounted
vessels 85,202 30,256 39,758 17,028 52,154 25,073
Pro forma
equity loss
from Tanker
Operations - (3,030) - (2,033) - 344
----------------------------------------------------------------------------
Equity income of
equity
accounted
vessels 85,202 27,226 39,758 14,995 52,154 25,417
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 111,466 41,834 114,131 47,355 106,172 46,488
Depreciation and
amortization 48,511 20,547 38,840 16,378 33,638 14,815
Loss (gain) on
sale of vessels 2,455 1,228 (16,822) (8,410) - -
Cash flow from
time-charter
contracts, net
of revenue
accounted for
as direct
finance lease 8,631 3,135 8,551 3,102 7,937 2,884
Amortization of
in-process
revenue
contracts and
other (3,176) (1,623) (3,176) (1,623) (4,047) (2,058)
----------------------------------------------------------------------------
Cash flow from
vessel
operations of
equity
accounted
vessels(4) 167,887 65,121 141,524 56,802 143,700 62,129
Pro forma CFVO
from Tanker
Operations(5) - (3,148) - (1,468) - (1,040)
----------------------------------------------------------------------------
Cash flow from
vessel
operations of
equity
accounted
vessels(4) 167,887 61,973 141,524 55,334 143,700 61,089
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 18 percent to 52 percent.
2. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 16 percent to 52 percent.
3. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 13 percent to 52 percent.
4. CFVO from equity accounted vessels represents the Company's
proportionate share of CFVO from its equity accounted vessels and other
investments.
5. 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 - Equity Accounted Vessels
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Year Ended
December 31, 2015 December 31, 2014
----------------------------------------------------------------------------
At Company's At Company's
100% Portion(1) 100% Portion(2)
----------------------------------------------------------------------------
Revenues 1,039,015 419,335 1,064,890 473,150
Vessel and other operating
expenses (436,741) (178,266) (540,523) (234,886)
Depreciation and amortization (160,207) (69,103) (132,785) (61,361)
Gain on sale of vessels 14,367 7,182 33,846 16,923
----------------------------------------------------------------------------
Income from vessel operations
of equity accounted vessels 456,434 179,148 425,428 193,826
Interest expense (115,777) (47,799) (96,953) (42,672)
Realized and unrealized loss
on derivative instruments (37,443) (14,790) (59,839) (21,200)
Dilution gain on share
issuance by TIL - - - 4,108
Other - net (13,513) (5,863) (11,044) (4,636)
----------------------------------------------------------------------------
Net income of equity accounted
vessels 289,701 110,696 257,592 129,426
Pro forma equity loss from
Tanker Operations - (7,825) - (1,312)
----------------------------------------------------------------------------
Equity income of equity
accounted vessels 289,701 102,871 257,592 128,114
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations
of equity accounted vessels 456,434 179,148 425,428 193,825
Depreciation and amortization 160,207 69,103 132,785 61,361
Gain on sale of vessels (14,367) (7,182) (33,846) (16,923)
Cash flow from time-charter
contracts, net of revenue
accounted for as direct
finance lease 34,062 12,381 30,616 11,102
Amortization of in-process
revenue contracts and other (14,030) (7,153) (16,321) (8,295)
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 622,306 246,297 538,662 241,070
Pro forma CFVO from Tanker
Operations(4) - (6,505) - (2,570)
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 622,306 239,792 538,662 238,500
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. The Company's proportionate share of its equity accounted vessels and
other investments ranges from 16 percent to 52 percent during the year.
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 September 30, 2015
(unaudited)
----------------------------------------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 1,709 (1,385) (18,012)
Depreciation and amortization 713 - 17,610
Amortization of in-process
revenue contracts and other - - (1,483)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (2,186)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 2,422 (1,385) (4,071)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2015
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 22,567 (3,628) 1,251
Depreciation and amortization (210) - 18,113
Amortization of in-process
revenue contracts and other (326) - (1,809)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (2,186)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 22,031 (3,628) 15,369
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended June 30, 2015
(unaudited)
----------------------------------------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 3,915 (1,501) 8,677
Depreciation and amortization 713 - 35,298
Amortization of in-process
revenue contracts and other - - (10,619)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (1,658)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 4,628 (1,501) 31,698
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended June 30, 2015
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 1,480 (4,139) 8,432
Depreciation and amortization (112) - 35,899
Amortization of in-process
revenue contracts and other - - (10,619)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (1,658)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 1,368 (4,139) 32,054
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended March 31, 2015
(unaudited)
----------------------------------------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 3,578 (2,476) (8,139)
Depreciation and amortization 713 - 21,259
Amortization of in-process
revenue contracts and other - - (3,457)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (2,176)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 4,291 (2,476) (7,487)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended March 31, 2015
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 937 (6,889) (12,989)
Depreciation and amortization (113) - 21,859
Amortization of in-process
revenue contracts and other 570 - (2,887)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (2,176)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 1,394 (6,889) 3,807
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 836 (5,067) 4,381
Depreciation and amortization 713 - 20,854
Loss on sale of vessels and
equipment - - 282
Amortization of in-process
revenue contracts and other - - (5,943)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (1,497)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 1,549 (5,067) 18,077
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2014
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent income (loss)
from vessel operations 7,272 (3,767) 3,655
Depreciation and amortization (113) - 21,454
Loss on sale of vessels and
equipment - - 282
Amortization of in-process
revenue contracts and other - - (5,943)
Realized losses from the
settlements of non-designated
foreign currency derivative
instruments - - (1,497)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 7,159 (3,767) 17,951
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2014
(unaudited)
----------------------------------------------------------------------------
Owned In-chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations (447) (4,441) (23,208)
Depreciation and amortization 713 - 21,145
Gain on sale of vessels and
equipment - - (1,217)
Amortization of in-process
revenue contracts and other - - (6,580)
Realized gains (losses) from
the settlements of non-
designated foreign currency
derivative instruments 11 - (167)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 277 (4,441) (10,027)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended September 30, 2014
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations 12,083 (4,068) (20,081)
Depreciation and amortization (542) - 21,316
Gain on sale of vessels and
equipment (7,285) - (8,502)
Amortization of in-process
revenue contracts and other - - (6,580)
Realized gains (losses) from
the settlements of non-
designated foreign currency
derivative instruments - - (156)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 4,256 (4,068) (14,003)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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) (34,843)
Depreciation and amortization 710 - 18,296
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 currency derivative
instruments (34) - (52)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 855 (4,818) (25,700)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended June 30, 2014
(unaudited)
----------------------------------------------------------------------------
Teekay
Corporate Parent
Other G&A Total
----------------------------------------------------------------------------
Teekay Parent (loss) income
from vessel operations 9,810 (3,362) (33,374)
Depreciation and amortization (62) - 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 currency derivative
instruments - - (86)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 9,748 (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 currency 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 currency derivative
instruments - - (788)
----------------------------------------------------------------------------
Cash flow from vessel
operations - Teekay Parent 12,408 (5,658) (5,486)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix D - Reconciliation of Non-GAAP Financial Measures
Net Interest Expense - Teekay Parent
(in thousands of U.S. dollars)
(unaudited)
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Three Months Ended
December 31, September 30, June 30, March 31,
2015 2015 2015 2015
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Interest expense (66,285) (62,450) (62,388) (51,346)
Interest income 1,098 2,161 1,199 1,530
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Interest expense net of
interest income -
consolidated (65,187) (60,289) (61,189) (49,816)
Less:
Non-Teekay Parent interest
expense net of interest
income (50,688) (47,925) (38,215) (34,753)
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Interest expense net of
interest income - Teekay
Parent (14,499) (12,364) (22,974) (15,063)
Add:
Teekay Parent realized
losses on interest rate
swaps (1) (1,209) (1,292) (5,661) (2,471)
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Net interest expense - Teekay
Parent (15,708) (13,656) (28,635) (17,534)
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Three Months Ended
December 31, September 30, June 30, March 31,
2014 2014 2014 2014
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Interest expense (57,334) (52,206) (49,656) (49,333)
Interest income 1,465 2,786 793 1,783
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Interest expense net of
interest income -
consolidated (55,869) (49,420) (48,863) (47,550)
Less:
Non-Teekay Parent interest
expense net of interest
income (42,279) (37,944) (38,088) (35,135)
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Interest expense net of
interest income - Teekay
Parent (13,590) (11,476) (10,775) (12,415)
Add:
Teekay Parent realized
losses on interest rate
swaps (1) (1,466) (1,524) (4,240) (3,736)
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Net interest expense - Teekay
Parent (15,056) (13,000) (15,015) (16,151)
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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 and exclude 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: Teekay Offshore's and Teekay LNG's use of internally generated cash flow to contribute to the funding of growth projects, including the impact on their future available distributable cash flow per unit; the potential for future dividend and distribution changes by Teekay Parent or any of the Daughter Entities; the impact of growth projects on Teekay Group's future cash flows; future tanker market fundamentals; the Teekay Group's focus on project execution, driving operating efficiencies, securing required financings for Teekay Offshore and Teekay LNG, and redeploying its existing assets rather than on new growth projects; the pending sale of Teekay Offshore's two conventional tankers, including the impact on future liquidity; the expected redelivery date and potential redeployment of the Varg FPSO; the timing of newbuilding deliveries and the Bahrain project start-up and timing of commencement of related contracts; the capacity, total cost and financing for the Bahrain project; the outcome of Teekay LNG's dispute over the Magellan Spirit charter contract termination; the expected annual CFVO and distributable cash flow from Teekay LNG's two MEGI LNG carriers for Cheniere Energy; any recovery of deferred charter amounts relating to Teekay LNG's two 52 percent owned LNG carriers on charter to the Yemen LNG project, and any recommencement of such project; Teekay Tankers' future dividend payout ratio; and the impact on Teekay Tankers' debt maturity profile and financial flexibility as a result of the new $900 million long-term debt facility. 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; the inability of charterers to make future charter payments; potential shipyard and project construction delays, newbuilding specification changes or cost overruns; costs relating to projects; potential delays in the sale of Teekay Offshore's two conventional tankers; failure by Teekay Offshore to secure a contract for the Varg FPSO; delays in commencement of operations of FPSO and FSO units at designated fields; changes in the Company's expenses; factors affecting the outcome of Teekay LNG's dispute over the Magellan Spirit; factors affecting the resumption of the LNG plant in Yemen; the inability of Teekay LNG to collect the deferred charter payments from the Yemen LNG project; the Company and its publicly-traded subsidiaries' ability to raise adequate financing for existing growth projects, to refinance future debt maturities and for other financing requirements; the amount of future cash distributions by the Company's Daughter Entities to the Company, including any 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; Teekay Tankers actual dividend payout ratio determined by its Board of Directors; 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 and Form 6-K for the quarters ended March 31, 2015, June 30, 2015 and September 30, 2015. 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: Ryan Hamilton Investor Relations enquiries +1 (604) 844-6654 www.teekay.com
Source: Teekay Corporation