Teekay Corporation Reports Fourth Quarter and Annual 2016 Results
HAMILTON, BERMUDA -- (Marketwired) -- 02/23/17 -- Highlights
-- Reported consolidated GAAP net loss attributable to shareholders of
Teekay of $2.7 million, or $0.03 per share, and consolidated adjusted
net loss attributable to shareholders of Teekay(1) of $18.6 million, or
$0.22 per share in the fourth quarter of 2016.
-- Generated GAAP consolidated income from vessel operations of $83.2
million and $384.3 million, respectively, and consolidated cash flow
from vessel operations(1) of $290.5 million and $1.3 billion,
respectively, in the fourth quarter and fiscal year 2016.
-- Entered into a contract amendment and heads of terms to extend the firm
periods for the Banff FPSO and Hummingbird Spirit FPSO out to the third
quarter of 2018 and September 2020, respectively.
-- Declared fourth quarter 2016 cash dividend of $0.055 per share.
Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported the Company's results for the fourth quarter and fiscal year 2016. 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. The Company, together with its subsidiaries other than the Daughter Entities, is referred to in this release as Teekay Parent. Please refer to the fourth quarter and fiscal year 2016 earnings releases of Teekay Offshore, Teekay LNG and Teekay Tankers, which are available on the Company's website at www.teekay.com, for additional information on their respective results.
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Three Months Ended Year Ended
(in thousands
of U.S.
dollars, December 31, September 30, December 31,December 31,December 31,
except per 2016 2016 2015 2016 2015
share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
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TEEKAY
CORPORATION
CONSOLIDATED
GAAP
FINANCIAL
COMPARISON
Revenues 552,203 547,639 700,106 2,328,569 2,450,382
Income from
vessel
operations 83,222 89,765 151,013 384,290 625,132
Equity income 11,933 21,070 27,226 85,639 102,871
Net (Loss)
Income
attributable
to
shareholders
of Teekay (2,661) 6,072 38,238 (123,182) 82,151
Net (Loss)
Income per
share
attributable
to
shareholders
of Teekay (0.03) 0.07 0.53 (1.62) 1.13
NON-GAAP
FINANCIAL
COMPARISON
Total Cash
Flow from
Vessel
Operations
(CFVO)(1) 290,486 285,514 401,396 1,287,003 1,415,794
Adjusted Net
(Loss)
Income
attributable
to
shareholders
of Teekay(1) (18,554) (19,536) 29,808 (43,562) 68,077
Adjusted Net
(Loss)
Income per
share
attributable
to
shareholders
of Teekay(1) (0.22) (0.23) 0.41 (0.55) 0.94
TEEKAY PARENT
NON-GAAP
FINANCIAL
COMPARISON
Teekay Parent
GPCO Cash
Flow(1) 3,752 6,370 8,871 24,593 142,197
Teekay Parent
OPCO Cash
Flow(1) (8,030) (13,144) 58 (54,389) 7,544
Total Teekay
Parent Free
Cash Flow(1) (4,278) (6,774) 8,929 (29,796) 149,741
(1) These are non-GAAP financial measures. Please refer to "Definitions and
Non-GAAP Financial Measures" and the Appendices to this release for
definitions of these terms and reconciliations of these non-GAAP
financial measures as used in this release to the most directly
comparable financial measures under United States generally accepted
accounting principles (GAAP).
CEO Commentary
"On a consolidated basis, Teekay's gas and tanker businesses performed in-line with expectations in the fourth quarter of 2016. However, the results from our offshore business were affected by certain events, which included an operational incident in November 2016 relating to the Arendal Spirit UMS and related suspension of the charter hire revenue since that time," commented Kenneth Hvid, President and CEO of Teekay Corporation. "On the efficiency front, we are pleased to see that our various cost savings initiatives implemented during the past year are resulting in lower run-rate operating and general and administrative expenses."
Mr. Hvid continued, "Looking ahead, we continue to focus on executing on our growth projects at Teekay LNG and Teekay Offshore. Teekay LNG's projects remain on schedule and on budget and we have now completed approximately $1.2 billion(1) of long-term financings for its growth projects, with the remainder of the financings on track to be completed in the second half of 2017. The majority of Teekay Offshore's projects generally are progressing well, including its largest project, the Libra FPSO conversion, which is on time and on budget. However, as mentioned during our third quarter earnings in November 2016, we have experienced delays and additional costs on the Petrojarl I FPSO upgrade, which is now scheduled to commence operations in the fourth quarter of 2017, and we are still in negotiations with the charterer, shipyard and our lenders."
"Since reporting earnings in November 2016, we have seen the oil price stabilize in the mid-$50 range, which is positive to the industry sentiment. I am pleased to report that we have continued the momentum from last quarter by securing key commercial contracts, which are expected to contribute to the Teekay Group's consolidated portfolio of fixed-rate contracts," Mr. Hvid continued. "Teekay Parent entered into a contract amendment and heads of terms to extend the firm contract periods on the Banff and Hummingbird Spirit FPSO units until the third quarter of 2018 and September 2020, respectively; Teekay Offshore is in the final stages of securing an additional shuttle tanker contract of affreightment in the North Sea; and Teekay Tankers secured three, fixed-rate time charter-out contracts at attractive rates."
Mr. Hvid added, "In addition to delivering on our existing growth projects, as we have highlighted previously, we continue to focus on optimizing our asset portfolio across the Teekay Group, with the goal of strengthening our balance sheets to better position the Teekay Group to take advantage of future opportunities."
(1) Based on Teekay LNG's proportionate ownership interests in the projects
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results decreased during the quarter ended December 31, 2016, compared to the same period of the prior year, primarily due to lower revenues from Teekay Parent related to lower utilization on the Polar Spirit and Arctic Spirit liquefied natural gas (LNG) carriers, a new contract in place for the Hummingbird Spirit floating production, storage and offloading (FPSO) unit at a lower fixed charter rate that took effect on July 1, 2016; lower income and cash flows in Teekay LNG mainly as a result of the sales of two conventional tankers in April and May 2016 and lower income from Teekay LNG's Exmar liquefied petroleum gas (LPG) joint venture; lower income and cash flows in Teekay Offshore due to the redelivery of the Varg FPSO in July 2016, lower revenue from the Arendal Spirit unit for maintenance and safety (UMS) due to the charterer suspending charter hire payments since early-November 2016, lower FPSO revenues related to lower bonuses earned during the fourth quarter of 2016, lower results relating to the shuttle tanker fleet primarily due to the repositioning of a shuttle tanker from Brazil to the North Sea, higher depreciation expense, and lower towage fleet charter rates and utilization; and lower income and cash flows in Teekay Tankers due to lower spot tanker rates. Please refer to footnote (2) of the summary consolidated statements of income included in this release for further details.
These decreases in the Company's consolidated results were partially offset by higher income and cash flows from Teekay LNG as a result of the deliveries of the Creole Spirit and Oak Spirit MEGI LNG carrier newbuildings, which commenced their five-year charter contracts with Cheniere Energy in late-February 2016 and early-August 2016, respectively.
Teekay Parent
Teekay Parent GPCO Cash Flow, which includes distributions and dividends paid to Teekay Parent from Teekay's publicly-listed subsidiaries in the following quarter, less Teekay Parent's corporate general and administrative expenses, was $3.8 million for the quarter ended December 31, 2016, compared to $8.9 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, 2016 decreased to $10.5 million, compared to $13.0 million for the same period of the prior year, primarily due to the reductions in quarterly cash dividends received from Teekay Tankers as a result of lower spot tanker rates.
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 dry-dock expenditures, decreased to negative $8.0 million for the quarter ended December 31, 2016, from approximately breakeven for the same period of the prior year. The decrease was primarily due to lower utilization on the Polar Spirit and Arctic Spirit LNG carriers, the new contract in place for the Hummingbird Spirit FPSO as of July 1, 2016 at a lower fixed charter rate and lower average spot tanker rates.
Total Teekay Parent Free Cash Flow, which is the total of GPCO and OPCO Cash Flows, was negative $4.3 million during the fourth quarter of 2016, compared to positive $8.9 million for the same period of the prior year. Please refer to Appendix D of this release for additional information about Teekay Parent Free Cash Flow.
Summary Results of Daughter Entities
Teekay LNG Partners
Teekay LNG's results decreased during the quarter ended December 31, 2016, compared to the same period of the prior year, primarily due to lower revenues from two vessels in Teekay LNG's 52 percent-owned LNG joint venture with Marubeni Corporation as the charterer temporarily closed its LNG operations in Yemen in 2015, lower revenues from Teekay LNG's 50 percent-owned joint venture with Exmar due to a reduction in mid-sized LPG carrier spot rates and fleet changes, charter rate deferrals for six LPG carriers on charter to I.M. Skaugen S.E., the sales of two conventional tankers in April and May 2016, and lower profit share revenue on a conventional tanker as a result of lower spot rates in 2016. These decreases were partially offset by, among other things, the deliveries of the Creole Spirit and Oak Spirit MEGI LNG carrier newbuildings, which commenced their five-year charter contracts with Cheniere Energy in late-February 2016 and early-August 2016, respectively. Please refer to Teekay LNG's fourth quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay Offshore Partners
Teekay Offshore's results decreased during the quarter ended December 31, 2016, compared to the same period of the prior year, primarily due to the redelivery of the Varg FPSO at the end of July 2016, lower FPSO revenues related to lower operational bonuses earned during the quarter, the repositioning of a shuttle tanker from from Brazil to Teekay Offshore's North Sea contract of affreightment (CoA) fleet, higher time-charter hire expenses due to the in-chartering of a shuttle tanker during the fourth quarter of 2016 to provide additional vessel capacity required to service new CoA contracts commencing in 2017, the redelivery of the Navion Saga floating storage and offtake (FSO) in October 2016 upon completion of its time-charter out contract, a reduction in revenues from the Arendal Spirit UMS due to the charterer suspending charter hire payments since early-November 2016 (see Summary of Recent Events Teekay Offshore), lower towage fleet charter rates and utilization, and the sale of two conventional tankers and sale-leaseback transactions on two conventional tankers in 2015 and 2016. These decreases were partially offset by, among other things, the delivery of a towage newbuilding, the ALP Striker, in September 2016 and lower operating expenses for the Knarr and Piranema Spirit FPSO units. Please refer to Teekay Offshore's fourth quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay Tankers
Teekay Tankers' results decreased during the quarter ended December 31, 2016, compared to the same period of the prior year, primarily due to lower average spot tanker rates in the fourth quarter of 2016 compared to the same period of the prior year and the redelivery of nine chartered-in vessels during 2016. Compared to the third quarter of 2016, the spot tanker market strengthened during the fourth quarter of 2016 due to expected seasonal factors, and reached a seasonal high in December 2016, as global refinery throughput, increased exports out of Nigeria, Libya, and Baltic / Black Sea ports, and winter weather delays provided support for tanker rates. Mid-sized crude tanker rates, in particular, found support from weather delays through the Turkish Straits along with increasing exports out of the U.S. Gulf. Record high Middle East OPEC crude production, averaging 25.6 million barrels per day (mb/d) in the fourth quarter of 2016, also provided a boost for crude tanker tonne-mile demand. However, crude spot tanker rates have recently started to soften due to a number of factors. Please refer to Teekay Tankers' fourth quarter 2016 earnings release for additional information on the financial results for this entity.
Summary of Recent Events
Teekay Parent
The Banff FPSO has been operating on the Banff field since its delivery nearly 20 years ago under a charter contract with Canadian Natural Resources (CNR) that permitted CNR to terminate the contact at any time with six months' notice. In January 2017, Teekay Parent entered into a contract amendment with CNR to ensure the unit will stay on the current field at least until the third quarter of 2018 and to revise the charter rate structure to include a variable component (through an oil price and oil production tariff) in addition to a fixed charter rate. The future CFVO under the contract is not expected to be materially different from the CFVO before this latest contract amendment.
Since July 1, 2016, the Hummingbird Spirit FPSO has been operating under a contract amendment with Centrica Energy (Centrica) with a firm period out to September 2017. In February 2017, Teekay Parent entered into a new heads of terms with Centrica to extend the firm period out to September 30, 2020 at a higher fixed charter rate plus further upside through an oil price and production tariff. The heads of terms is expected to take effect in October 2017.
Teekay LNG
Teekay LNG owns a 52 percent interest in two LNG carriers, the Marib Spirit and Arwa Spirit, through its joint venture with Marubeni Corporation, which vessels currently are 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 down the LNG plant in 2015. As a result of a possible extended plant closure, 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. At the end of 2016, the Yemen LNG plant remained closed and as a result, in January 2017, Teekay LNG's joint venture agreed to a further temporary deferral during 2017. During this temporary deferral period, Teekay LNG's joint venture with Marubeni Corporation is entitled to trade the Marib Spirit and Awra Spirit for its own account.
In November 2016, the charterer of the 2004-built Suezmax tanker, the Asian Spirit, decided not to declare its extension option, allowing the charter to expire in January 2017. As a result, Teekay LNG agreed to sell the vessel to a third party for net proceeds of $20.6 million which resulted in a write-down of $11.5 million recognized in the fourth quarter of 2016. The Asian Spirit is expected to be delivered to its new owner in mid-March 2017.
Teekay Offshore
In January 2017, Teekay Offshore received a letter of award for a new five-year shuttle tanker CoA, plus extension options, with a consortium of oil companies to service a development located in the UK Central North Sea. Subject to the finalization of the terms of the CoA, the CoA is expected to commence during the first quarter of 2018 and will be serviced by Teekay Offshore's existing CoA shuttle tanker fleet.
In November 2016, the Arendal Spirit UMS experienced an operational incident relating to its dynamic-positioning system. As a result of this operational incident, and a gangway incident that occurred in April 2016, the charterer, Petrobras, initiated an operational review. The operational review is currently ongoing and thus, Petrobras has suspended its charter hire payments since November 2016. Teekay Offshore has completed an investigation to identify the cause of the incidents and has implemented corrective measures. Teekay Offshore is in the process of working with Petrobras to address its concerns with the focus of returning the unit to operations.
Teekay Tankers
Teekay Tankers completed the sale of a Medium-Range (MR) product tanker and an older Suezmax tanker in November 2016 and January 2017, respectively, with one older Suezmax tanker sale scheduled to be completed in late-February 2017.
Since October 2016, Teekay Tankers entered into, and extended, time charter-out contracts for two Suezmax tankers and one Aframax tanker. These contracts have an average rate of approximately $20,800 per day and firm periods of 12 months each. The contracts commenced in December 2016 and February 2017.
Liquidity
As at December 31, 2016, Teekay Parent had total liquidity of $279.5 million (consisting of $146.4 million of cash and cash equivalents and $133.1 million of undrawn revolving credit facilities) and, on a consolidated basis, Teekay Corporation had total liquidity of approximately $1.0 billion (consisting of 568.0 million of cash and cash equivalents and $444.4 million of undrawn revolving credit facilities). Giving pro-forma effect to Teekay LNG's distribution from its RasGas 3 joint venture in February 2017 relating to its vessel refinancing in December 2016 and Teekay LNG's NOK 300 million bond issuance completed in January 2017, Teekay Corporation's consolidated liquidity at December 31, 2016 would have been approximately $1.1 billion.
Conference Call
The Company plans to host a conference call on Friday, February 24, 2017 at 11:00 a.m. (ET) to discuss its results for the fourth quarter and fiscal year 2016. 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 (866) 222-0265 or (416) 642-5209, if outside North America,
and quoting conference ID code 1939994.
-- By accessing the webcast, which will be available on Teekay's website at
www.teekay.com (the archive will remain on the website for a period of
30 days).
The conference call will be recorded and available until Friday, March 10, 2017. 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 1939994.
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 master limited partnership 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 approximately $13 billion, comprised of approximately 220 liquefied gas, offshore, and conventional tanker assets. With offices in 14 countries and approximately 7,900 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".
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S. Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow From Vessel Operations, Adjusted Net (Loss) Income Attributable to Shareholders of Teekay, Teekay Parent GPCO Cash Flow, Teekay Parent OPCO Cash Flow, and Teekay Parent Free Cash Flow, Net Interest Expense and Adjusted Equity Income, are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, although these measures are used consistently among entities in the Teekay Group of companies, they may not be comparable to similar measures presented by other companies. The Company believes that certain investors use this information to evaluate the Company's financial performance, as does management.
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 equipment and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO - Consolidated represents CFVO from vessels that are consolidated on the Company's financial statements. CFVO - Equity Investments represents the Company's proportionate share of CFVO from its equity-accounted vessels and other investments. The Company does not control the equity-accounted vessels and investments. Consequently, the Company does not have the unilateral ability to determine whether the cash generated by the equity-accounted vessels and other investments is retained within the equity accounted investment or distributed to the Company and other shareholders. In addition, the Company does not control the timing of such distributions to the Company and other shareholders. Consequently, readers are cautioned when using total CFVO as a liquidity measure as the amount contributed from CFVO - Equity Investments may not be available to the Company in the periods such CFVO is generated by the equity-accounted vessels and other investments. CFVO is a non-GAAP financial measure used by certain investors to measure the financial performance of companies, as does management. Please refer to Appendices C and E of this release for reconciliations of these non-GAAP financial measures to income (loss) from vessel operations and income from vessel operations of equity accounted vessels, respectively, the most directly comparable GAAP measures reflected in the Company's consolidated financial statements.
Adjusted net (loss) income excludes items of income or loss from GAAP net (loss) income 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 financial measure to net (loss) income, and refer to footnote (4) of the income statement for a reconciliation of adjusted equity income to equity income, the most directly comparable GAAP measure reflected in the Company's consolidated financial statements.
Teekay Parent Financial Measures
Teekay Parent Free Cash Flow represents the sum of (a) distributions received, including payments in kind, 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 dry-dock 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 Appendices B, C, D and E of this release for further details and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures reflected in the Company's consolidated financial statements.
Teekay Corporation
Summary Consolidated Statements of Income
(in thousands of U.S. dollars, except share and per share data)
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Three Months Ended
December 31, September 30, December 31,
2016 2016 2015
(unaudited) (unaudited) (unaudited)
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Revenues(1) 552,203 547,639 700,106
Voyage expenses (41,237) (37,213) (36,292)
Vessel operating expenses (199,352) (204,156) (244,810)
Time-charter hire expense (38,418) (33,810) (40,267)
Depreciation and amortization (144,901) (141,688) (137,785)
General and administrative
expenses (26,999) (30,052) (32,478)
Write-down of vessels and
equipment(2) (2,146) - (51,748)
Net loss on sale of vessels,
equipment and other operating
assets (12,038) (7,838) (4,074)
Restructuring charges(1) (3,890) (3,117) (1,639)
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Income from vessel operations 83,222 89,765 151,013
Interest expense (69,018) (68,490) (66,285)
Interest income 1,314 1,143 1,098
Realized and unrealized gain
(loss)on derivative
instruments(3) 131,876 29,926 27,101
Equity income(4) 11,933 21,070 27,226
Income tax (expense) recovery (22,102) 133 18,974
Foreign exchange gain (loss) 13,007 6,116 2,117
Other (loss) income - net(5) (18,207) 480 1,744
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Net income 132,025 80,143 162,988
Less: Net income attributable
tonon-controlling interests (134,686) (74,071) (124,750)
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Net (loss) income attributable
to
shareholders of Teekay
Corporation (2,661) 6,072 38,238
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(Loss) earnings per common
share of
Teekay
- Basic $(0.03) $0.07 $0.53
- Diluted $(0.04) $0.07 $0.52
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Weighted-average number of
common
shares outstanding
- Basic 86,131,038 84,887,101 72,708,463
- Diluted 86,131,038 84,973,745 72,886,260
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Teekay Corporation
Summary Consolidated Statements of Income
(in thousands of U.S. dollars, except share and per share
data)
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Year Ended
December 31, December 31,
2016 2015
(unaudited) (unaudited)
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Revenues(1) 2,328,569 2,450,382
Voyage expenses (138,339) (115,787)
Vessel operating expenses (825,024) (844,039)
Time-charter hire expense (150,145) (138,548)
Depreciation and amortization (571,825) (509,500)
General and administrative
expenses (119,889) (133,184)
Write-down of vessels and
equipment(2) (45,796) (66,086)
Net loss on sale of vessels,
equipment and other operating
assets (66,450) (4,089)
Restructuring charges(1) (26,811) (14,017)
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Income from vessel operations 384,290 625,132
Interest expense (282,966) (242,469)
Interest income 4,821 5,988
Realized and unrealized gain
(loss)on derivative
instruments(3) (35,091) (102,200)
Equity income(4) 85,639 102,871
Income tax (expense) recovery (24,468) 16,767
Foreign exchange gain (loss) (6,548) (2,195)
Other (loss) income - net(5) (39,013) 1,566
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Net income 86,664 405,460
Less: Net income attributable
tonon-controlling interests (209,846) (323,309)
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Net (loss) income attributable
to
shareholders of Teekay
Corporation (123,182) 82,151
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(Loss) earnings per common
share of
Teekay
- Basic $(1.62) $1.13
- Diluted $(1.62) $1.12
--------------------------------------------------------------
Weighted-average number of
common
shares outstanding
- Basic 79,211,154 72,665,783
- Diluted 79,211,154 73,190,564
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(1) The restructuring charges for the three months and year ended December
31, 2016 primarily relate to the costs related to the reorganization of
the Company's FPSO business. The restructuring charges for the three
months and year ended December 31, 2016 also include costs related to
the closure of offices and seafarers' severance amounts, part of which
were recovered from the customer and included in revenues in the
consolidated statements of income for the three months and year ended
December 31, 2016. The restructuring charges for the three months and
year ended December 31, 2015 primarily relate to crew redundancy costs,
part of which were recovered from the customer and included in revenues
in the consolidated statements of income for the three months and year
ended December 31, 2015.
(2) Write-down of vessels and equipment for the three months and year ended
December 31, 2016 relates to the $2.1 million write-down of one shuttle
tanker owned by Teekay Offshore as a result of fewer opportunities to
trade the vessel in the spot conventional tanker market. Write-down of
vessels and equipment for the year ended December 31, 2016 also
includes $43.7 million relating to the write-downs of two unit for
maintenance and safety (UMS) newbuildings as a result of the
cancellation of the related construction contracts by Teekay Offshore's
subsidiaries within Logitel Offshore Pte. Ltd. Please refer to Teekay
Offshore's fourth quarter and fiscal year 2016 earnings release for
additional information on the write-down of vessels and equipment for
this entity. Please also refer to Teekay Corporation's fourth quarter
and fiscal year 2015 earnings release for additional information on the
write-down of vessels, equipment and other assets in 2015.
(3) Realized and unrealized gains (losses) related to derivative
instruments that are not designated as hedges for accounting purposes
are included as a separate line item in the statements of income. The
realized (losses) gains 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:
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Three Months Ended
December 31, September 30, December 31,
2016 2016 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Realized (losses) gains
relating to:
Interest rate swaps (19,512) (22,219) (26,084)
Termination of interest rate
swap agreements - - -
Foreign currency forward
contracts (1,271) (2,583) (5,697)
Time-charter swap agreements 932 1,096 -
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(19,851) (23,706) (31,781)
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Unrealized gains (losses)
relating to:
Interest rate swaps 158,501 47,816 58,079
Foreign currency forward
contracts (5,237) 6,006 1,317
Stock purchase warrants (859) (398) (514)
Time-charter swap agreements (678) 208 -
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151,727 53,632 58,882
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Total realized and unrealized
gains (losses) on non-
designated derivative
instruments 131,876 29,926 27,101
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--------------------------------------------------------------
Year Ended
December 31, December 31,
2016 2015
(unaudited) (unaudited)
--------------------------------------------------------------
Realized (losses) gains
relating to:
Interest rate swaps (87,320) (108,036)
Termination of interest rate
swap agreements (8,140) (10,876)
Foreign currency forward
contracts (11,186) (21,607)
Time-charter swap agreements 2,154 -
--------------------------------------------------------------
(104,492) (140,519)
--------------------------------------------------------------
Unrealized gains (losses)
relating to:
Interest rate swaps 62,446 37,723
Foreign currency forward
contracts 15,833 (418)
Stock purchase warrants (9,753) 1,014
Time-charter swap agreements 875 -
--------------------------------------------------------------
69,401 38,319
--------------------------------------------------------------
Total realized and unrealized
gains (losses) on non-
designated derivative
instruments (35,091) (102,200)
--------------------------------------------------------------
--------------------------------------------------------------
(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
financial measure.
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
2016 2016 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Equity income 11,933 21,070 27,226
Proportionate share of
unrealized gains on
derivative instruments (6,986) (6,616) (6,465)
Other(i) 7,510 (2,526) 2,537
----------------------------------------------------------------------------
Equity income adjusted for
items in Appendix A 12,457 11,928 23,298
----------------------------------------------------------------------------
----------------------------------------------------------------------------
--------------------------------------------------------------
Year Ended
December 31, December 31,
2016 2015
(unaudited) (unaudited)
--------------------------------------------------------------
Equity income 85,639 102,871
Proportionate share of
unrealized gains on
derivative instruments (8,678) (5,898)
Other(i) 5,764 (2,740)
--------------------------------------------------------------
Equity income adjusted for
items in Appendix A 82,725 94,233
--------------------------------------------------------------
--------------------------------------------------------------
(i) Includes the Company's proportionate share of loss on sale of a vessel
in Teekay LNG's Exmar LPG BVBA joint venture and write-downs of loan
receivables from Petrotrans Holdings Ltd. and Gemini Tankers LLC for
the three months and year ended December 31, 2016. Includes the
Company's proportionate share of a gain on sale of a subsidiary in
Sevan Marine ASA for the year ended December 31, 2016. Includes loss on
sale of an LPG carrier owned by Teekay LNG's Exmar LPG BVBA joint
venture, Teekay Parent's share of unrealized foreign exchange loss in
Sevan Marine ASA and severance costs in the Gemini Tankers LLC joint
venture for the three months ended December 31, 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.
(5) Includes the write-down of $19.0 million of the Company's cost-
accounted investment in the dry bulk shipping company CVI Ocean
Transportation II Inc., a company developed in partnership with CarVal
Investors in 2014, for the three months and year ended December 31,
2016.
Teekay Corporation
Summary Consolidated Balance Sheets
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
As at As at As at
December 31, September 30, December 31,
2016 2016 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
ASSETS
Cash and cash equivalents -
Teekay Parent 146,362 154,792 221,021
Cash and cash equivalents -
Teekay LNG 126,146 268,395 102,481
Cash and cash equivalents -
Teekay Offshore 227,378 222,872 258,473
Cash and cash equivalents -
Teekay Tankers 68,108 59,237 96,417
Other current assets 389,727 432,348 497,442
Restricted cash - Teekay Parent 4,562 1,888 3,528
Restricted cash - Teekay LNG 117,027 100,227 111,519
Restricted cash - Teekay
Offshore 114,909 46,630 60,520
Restricted cash - Teekay
Tankers 750 1,000 870
Assets held for sale 61,282 82,252 55,450
Vessels and equipment - Teekay
Parent 602,672 620,178 748,963
Vessels and equipment - Teekay
LNG 1,858,381 1,906,070 1,683,292
Vessels and equipment - Teekay
Offshore 4,084,803 4,168,926 4,348,535
Vessels and equipment - Teekay
Tankers 1,605,372 1,664,859 1,767,925
Advances on newbuilding
contracts/conversions 987,658 888,865 817,878
Investment in equity accounted
investees 1,010,308 984,966 905,159
Investment in direct financing
leases 660,594 667,348 684,129
Other assets 482,908 412,047 417,166
Intangible assets 89,175 92,668 111,909
Goodwill 176,630 176,630 168,571
----------------------------------------------------------------------------
Total Assets 12,814,752 12,952,198 13,061,248
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 457,192 454,798 476,490
Liabilities associated with
assets held for sale - 6,211 -
Current portion of long-term
debt - Teekay Parent 52,170 102,337 249,791
Current portion of long-term
debt - Teekay LNG 228,864 236,596 201,743
Current portion of long-term
debt - Teekay Offshore 631,148 528,568 485,069
Current portion of long-term
debt - Teekay Tankers 171,019 155,690 174,047
Long-term debt - Teekay Parent 680,240 692,018 606,607
Long-term debt - Teekay LNG 1,955,201 2,126,557 1,856,593
Long-term debt - Teekay
Offshore 2,551,746 2,620,283 2,878,805
Long-term debt - Teekay Tankers 761,997 810,961 990,558
Derivative liabilities 530,854 672,568 681,623
In process revenue contracts 122,690 129,608 150,799
Other long-term liabilities 333,236 345,698 352,378
Redeemable non-controlling
interest 249,102 250,816 255,671
Equity:
Non-controlling interests 3,189,928 2,925,957 2,782,049
Stockholders of Teekay 899,365 893,532 919,025
----------------------------------------------------------------------------
Total Liabilities and Equity 12,814,752 12,952,198 13,061,248
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net debt - Teekay Parent(1) 581,486 637,675 631,849
Net debt - Teekay LNG(1) 1,940,892 1,994,531 1,844,336
Net debt - Teekay Offshore(1) 2,840,607 2,879,349 3,044,881
Net debt - Teekay Tankers(1) 864,158 906,414 1,067,318
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Net debt is a non-GAAP financial measure and represents current and
long-term debt less cash and cash equivalents and, if applicable,
restricted cash.
Teekay Corporation
Summary Consolidated Statements of Cash Flows
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Year Ended
December 31,
2016 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
----------------------------------------------------------------------------
Net operating cash flow 624,632 770,309
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt, net of
issuance costs 2,081,770 2,452,878
Prepayments of long-term debt (1,872,573) (554,831)
Scheduled repayments of long-term debt (970,939) (1,040,292)
Repayments of capital lease obligations (21,595) (4,423)
Increase in restricted cash (49,079) (21,005)
Net proceeds from equity issuances of
subsidiaries 327,419 575,368
Net proceeds from equity issuances of Teekay
Corporation 105,462 -
Distribution from subsidiaries to non-
controlling interests (136,151) (360,392)
Cash dividends paid (17,406) (125,881)
Other financing activities 750 3,035
----------------------------------------------------------------------------
Net financing cash flow (552,342) 924,457
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (650,301) (1,795,901)
Proceeds from sale of vessels and equipment 252,656 20,472
Proceeds from sale-lease back of vessels 355,306 -
Purchase of SPT - (46,961)
Increase in restricted cash - (34,290)
Investments in equity-accounted investees (61,885) (40,595)
Loan (advances to) repayments from equity-
accounted investees (102,323) 53,173
Direct financing lease payments received 23,535 20,824
Other investing activities 324 -
----------------------------------------------------------------------------
Net investing cash flow (182,688) (1,823,278)
----------------------------------------------------------------------------
Decrease in cash and cash equivalents (110,398) (128,512)
Cash and cash equivalents, beginning of the year 678,392 806,904
----------------------------------------------------------------------------
Cash and cash equivalents, end of the year 567,994 678,392
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix A - Specific Items Affecting Net Income
(in thousands of U.S. dollars, except per share data)
----------------------------------------------------------------------------
Three Months Ended Three Months Ended Year Ended
December 31, September 30, December 31,
2016 2016 2016
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
$ Per $ Per $ Per
$Share(1) $ Share(1) $Share(1)
----------------------------------------------------------------------------
Net income - GAAP
basis 132,025 80,143 86,664
Adjust for: Net income
attributable to
non-controlling
interests (134,686) (74,071) (209,846)
----------------------------------------------------------------------------
Net (loss) income
attributable to
shareholders of Teekay (2,661) (0.03) 6,072 0.07 (123,182) (1.62)
----------------------------------------------------------------------------
(Subtract) add
specific items
affecting net (loss)
income:
Unrealized gains
from derivative
instruments(2) (159,454) (1.85) (60,245) (0.71) (78,761) (1.00)
Foreign exchange
gains(3) (19,127) (0.22) (11,815) (0.14) (15,035) (0.19)
Net loss on sale of
vessels, equipment,
and other assets(4) 16,898 0.20 564 0.01 68,078 0.86
Write-down of
vessels, equipment
and other operating
assets(5) 23,508 0.27 4,835 0.06 67,722 0.85
Restructuring
charges, net of
recovery(6) 3,595 0.04 1,687 0.02 10,152 0.13
Pre-operational
costs(7) 744 0.01 122 - 6,315 0.08
Adjustments to
deferred taxes(8) 15,973 0.19 - - 15,973 0.20
Other(9) 4,500 0.05 460 0.01 45,100 0.57
Non-controlling
interests' share of
items above(10) 97,470 1.12 38,784 0.46 (39,924) (0.50)
Earnings per share
adjustment relating
to Teekay
Offshore's Series C
Preferred Unit
conversion(11) - - - - - 0.07
----------------------------------------------------------------------------
Total adjustments (15,893) (0.19) (25,608) (0.30) 79,620 1.07
----------------------------------------------------------------------------
Adjusted net loss
attributable to
shareholders of Teekay (18,554) (0.22) (19,536) (0.23) (43,562) (0.55)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Basic per share amounts.
(2) Reflects the unrealized gains relating to the change in the mark-to-
market value of derivative instruments that are not designated as
hedges for accounting purposes, including those investments included
in the Company's proportionate share of equity income from joint
ventures, and hedge ineffectiveness from derivative instruments
designated as hedges for accounting purposes.
(3) Foreign currency exchange gains primarily relate to the Company's debt
denominated in Euros and Norwegian Kroner (NOK), unrealized losses
(gains) on cross currency swaps used to economically hedge the
principal and interest on NOK bonds, the realized gains on the
repurchase of NOK denominated bonds in Teekay LNG and the related loss
on the termination of the associated cross currency swaps. Nearly all
of the Company's foreign currency exchange gains and losses are
unrealized.
(4) Includes net loss of $12.0 million on the sale of one conventional
tanker sold by Teekay LNG, one Suezmax tanker sold by Teekay Tankers,
one Suezmax tanker expected to be sold by Teekay Tankers in early-
2017, one shuttle tanker sold by Teekay Offshore and one FSO unit
expected to be sold by Teekay Offshore for the three months and year
ended December 31, 2016. Also includes the Company's share of loss of
$4.9 million on sale of a vessel in Teekay LNG's Exmar LPG BVBA joint
venture included in equity income on the summary consolidated
statements of income for the three months and year ended December 31,
2016. Also includes a $27.6 million loss on sale of two of Teekay
LNG's conventional tankers, $14.1 million loss on sale of two Medium
Range product tankers by Teekay Tankers, $12.5 million loss on sale of
one VLCC by the Company, partially offset by the Company's
proportionate share of gains of $3.0 million recognized from the sale
of a subsidiary in Sevan Marine ASA for the year ended December 31,
2016.
(5) Includes the write-down of $19.0 million of the Company's investment
in the dry bulk shipping company CVI Ocean Transportation II Inc., a
company developed in partnership with CarVal Investors, included in
other (loss) income for the three months and year ended December 31,
2016. Also includes a $2.1 million write-down of a shuttle tanker by
Teekay Offshore included in write-down of vessels and equipment on the
summary consolidated statements of income for the three months ended
December 31, 2016. Also includes write-downs of $2.4 million and $2.9
million of shareholder loans, respectively, included in equity income
on the summary consolidated statements of income for the three months
and year ended December 31, 2016.
(6) Please refer to footnote (1) of the summary consolidated statements of
income included in this release for further details.
(7) Includes costs associated with currency forward contracts and interest
rate swaps related to projects during their pre-operational phases for
the three months and year ended December 31, 2016.
(8) Adjustments to deferred taxes relates to decreases in the valuation
allowances related to certain Australian entities and increases in
deferred income tax assets for one of Teekay Offshore's Norwegian tax
structures for the three months and year ended December 31, 2016.
(9) Other for the three months and year ended December 31, 2016 includes a
one-time compensation cost associated with the retirement of Teekay
Corporation's Chief Executive Officer. Other for the year ended
December 31, 2016 primarily relates to potential damages accrued
relating to the cancellation of the construction contracts for two UMS
newbuildings, the write-off of deferred financing costs relating to a
debt refinancing and termination fees associated with the partial
termination of a loan, gains associated with the extinguishment of a
contingent liability resulting from the UMS contract cancellations,
depreciation expense as a result of the change in the useful life
estimate of the shuttle component of Teekay Offshore's shuttle tankers
from 25 years to 20 years effective January 1, 2016 and loss on the
termination of an interest rate swap.
(10) Items affecting net (loss) income include items from the Company's
consolidated non-wholly-owned subsidiaries. The specific items
affecting net (loss) income are analyzed to determine whether any of
the amounts originated from a consolidated non-wholly-owned
subsidiary. Each amount that originates from a consolidated non-
wholly-owned subsidiary is multiplied by the non-controlling
interests' percentage share in this subsidiary to arrive at the non-
controlling interests' share of the amount. The amount identified as
"Non-controlling interests' share of items above" in the table above
is the cumulative amount of the non-controlling interests'
proportionate share of items listed in the table. "Non-controlling
interests' share of items above" for the three months and year ended
December 31, 2016 also includes deferred gain on the sale of vessels
sold externally. The deferred gain was the result of the gain on sale
of vessels sold from Teekay Corporation to one of its partially-owned
subsidiaries which could not be recognized for accounting purposes
until the vessels are sold to parties outside of the Teekay Group.
(11) Relates to the Company's portion of the inducement premium and
exchange contribution charged to retained earnings by Teekay Offshore
when converting its outstanding Series C Preferred Units to common
units and Series C-1 Preferred Units. Refer to Summary of Recent
Events - Teekay Offshore in Teekay's second quarter of 2016 earnings
release for further details.
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, December 31,
2015 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
$ Per $ Per
$Share(1) $Share(1)
----------------------------------------------------------------------------
Net income - GAAP basis 162,988 405,460
Adjust for: Net income attributable to
non-controlling interests (124,750) (323,309)
----------------------------------------------------------------------------
Net income attributable to
shareholders of Teekay 38,238 0.53 82,151 1.13
----------------------------------------------------------------------------
(Subtract) add specific items
affecting net income:
Unrealized gains from derivative
instruments(2) (65,356) (0.90) (43,166) (0.59)
Foreign exchange gains(3) (4,748) (0.07) (13,994) (0.19)
Write-down of vessels and equipment 51,748 0.71 66,086 0.91
Net loss (gain) on sale of vessels,
equipment, and other operating
assets(4) 5,312 0.07 (3,373) (0.05)
Restructuring charges, net of
recovery(5) 1,148 0.02 5,571 0.08
Impact of lease termination(6) 1,450 0.02 1,450 0.02
Pre-operational costs(7) 2,138 0.03 7,579 0.10
Adjustments to deferred taxes(8) (18,633) (0.26) (24,467) (0.34)
Other(9) (1,207) (0.01) 12,775 0.18
Non-controlling interests' share of
items above(10) 19,718 0.27 (22,535) (0.31)
--------------------------------------
Total adjustments (8,430) (0.12) (14,074) (0.19)
----------------------------------------------------------------------------
Adjusted net income attributable to
shareholders of Teekay 29,808 0.41 68,077 0.94
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Basic per share amounts.
(2) Reflects the unrealized gains relating to the change in the mark-to-
market value of derivative instruments that are not designated as
hedges for accounting purposes, including those investments included
in the Company's proportionate share of equity income from joint
ventures and hedge ineffectiveness from derivative instruments
designated as hedges for accounting purposes.
(3) Foreign currency exchange gains primarily relate to the Company's debt
denominated in Euros and Norwegian Kroner (NOK), the unrealized losses
on cross currency swaps used to economically hedge the principal and
interest on NOK bonds and the Company's share of unrealized foreign
exchange losses in Sevan Marine ASA. Nearly all of the Company's
foreign currency exchange gains and losses are unrealized.
(4) Includes a loss of $4.1 million relating to the sale of two
conventional tankers owned by Teekay Offshore for the three months and
year ended December 31, 2015. Includes a gain of $8.7 million on the
sale of the SPT subsidiaries to Teekay Tankers in the ship-to-ship
transfer joint venture and gain on sale of a shuttle tanker by Teekay
Offshore for the year ended December 31, 2015. Also includes a loss of
$1.2 million relating to the Company's proportionate share of the loss
on sale of an LPG carrier included in equity income on the summary
consolidated statements of income for the three months and year ended
December 31, 2015.
(5) Please refer to footnote (1) of the summary consolidated statements of
income included in this release for further details.
(6) Relates to the capital lease termination for the RasGas II LNG
carriers for the three months and year ended December 31, 2015.
(7) 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 and year ended December 31, 2015.
(8) Adjustments 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 year ended December 31,
2015.
(9) Other primarily relates to severance costs in the Gemini Tankers LLC
joint venture for the three months and year ended December 31, 2015
and a realized loss on termination of an interest rate swap for the
year ended December 31, 2015.
(10) Items affecting net income include items from the Company's
consolidated non-wholly-owned subsidiaries. The specific items
affecting net income are analyzed to determine whether any of the
amounts originated from a consolidated non-wholly-owned subsidiary.
Each amount that originates from a consolidated non-wholly-owned
subsidiary is multiplied by the non-controlling interests' percentage
share in this subsidiary to arrive at the non-controlling interests'
share of the amount. The amount identified as "Non-controlling
interests' share of items above" in the table above is the cumulative
amount of the non-controlling interests' proportionate share of items
listed in the table.
Teekay Corporation
Appendix B - Supplemental Financial Information
Summary Statement of Income (Loss) for the Three Months Ended
December 31, 2016
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Teekay Teekay Teekay Teekay Consolidation
Offshore LNG Tankers Parent Adjustments(1) Total
----------------------------------------------------------------------------
Revenues 274,920 100,774 117,704 81,851 (23,046) 552,203
Voyage expenses (23,323) (302) (17,727) (638) 753 (41,237)
Vessel operating
expenses (84,434) (22,270) (46,353) (51,922) 5,627 (199,352)
Time-charter
hire expense (22,440) - (11,683) (23,616) 19,321 (38,418)
Depreciation and
amortization (76,873) (25,021) (25,573) (17,434) - (144,901)
General and
administrative
expenses (12,631) (3,634) (4,437) (8,180) 1,883 (26,999)
Write-down
vessels and
equipment (2,146) - - - - (2,146)
Gain (loss) on
sale of vessels
and equipment 5,831 (11,537) (6,271) (61) - (12,038)
Restructuring
charges (2,360) - - (1,530) - (3,890)
----------------------------------------------------------------------------
Income (loss)
from vessel
operations 56,544 38,010 5,660 (21,530) 4,538 83,222
Interest expense (35,859) (15,934) (7,363) (16,731) 6,869 (69,018)
Interest income 262 783 47 7,091 (6,869) 1,314
Realized and
unrealized gain
(loss) on
derivative
instruments 81,967 43,245 6,938 (274) - 131,876
Equity income
(loss) 4,087 9,728 3,502 (908) (4,476) 11,933
Equity in
earnings of
subsidiaries(2) - - - 59,857 (59,857) -
Income tax
expense (11,479) (251) (3,497) (6,875) - (22,102)
Foreign exchange
gain (loss) 303 15,474 1,723 (4,493) - 13,007
Other income
(loss) - net 441 314 (164) (18,798) - (18,207)
----------------------------------------------------------------------------
Net income
(loss) 96,266 91,369 6,846 (2,661) (59,795) 132,025
Less: Net income
attributable to
non-controlling
interests(3) (4,313) (6,958) - - (123,415)(134,686)
----------------------------------------------------------------------------
Net income
(loss)
attributable to
shareholders/
unitholders of
publicly-listed
entities 91,953 84,411 6,846 (2,661) (183,210) (2,661)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) 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 Teekay Parent's
conventional tanker commercial management and technical management
operations (Tanker Operations).
(2) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(3) Net income attributable to non-controlling interests in the Teekay
Offshore and Teekay LNG columns represents 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 (Loss) for the Year Ended
December 31, 2016
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Consolidation
Teekay Teekay Teekay Teekay Adjustments
Offshore LNG Tankers Parent (1) Total
----------------------------------------------------------------------------
Revenues 1,152,390 396,444 526,896 340,513 (87,674)2,328,569
Voyage expenses (80,750) (1,656) (55,241) (3,435) 2,743 (138,339)
Vessel operating
expenses (364,440)(88,590)(182,598)(196,129) 6,733 (825,024)
Time-charter
hire expense (75,485) - (59,647)(104,984) 89,971 (150,145)
Depreciation and
amortization (300,011)(95,542)(104,149) (72,123) - (571,825)
General and
administrative
expenses (56,087)(18,499) (18,211) (25,615) (1,477) (119,889)
Write-down of
vessels and
equipment (45,796) - - - - (45,796)
Gain (loss) on
sale of vessels
and equipment 5,716 (38,976) (20,594) (12,596) - (66,450)
Restructuring
charges (4,684) - - (22,127) - (26,811)
----------------------------------------------------------------------------
Income (loss)
from vessel
operations 230,853 153,181 86,456 (96,496) 10,296 384,290
Interest expense (140,611)(58,844) (29,784) (75,610) 21,883 (282,966)
Interest income 1,257 2,583 117 22,747 (21,883) 4,821
Realized and
unrealized loss
on derivative
instruments (20,313) (7,161) (964) (6,653) - (35,091)
Equity income 17,933 62,307 13,101 2,676 (10,378) 85,639
Equity in
earnings of
subsidiaries(2) - - - 55,366 (55,366) -
Income tax
expense (8,808) (973) (7,509) (7,178) - (24,468)
Foreign exchange
(loss) gain (14,805) 5,335 1,449 1,564 (91) (6,548)
Other (loss)
income - net (21,031) 1,537 (11) (19,598) 90 (39,013)
----------------------------------------------------------------------------
Net income
(loss) 44,475 157,965 62,855 (123,182) (55,449) 86,664
Less: Net income
attributable to
non-controlling
interests(3) (11,858)(17,514) - - (180,474) (209,846)
----------------------------------------------------------------------------
Net income
(loss)
attributable to
shareholders/
unitholders of
publicly-listed
entities 32,617 140,451 62,855 (123,182) (235,923) (123,182)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) 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 Teekay Parent's
conventional tanker commercial management and technical management
operations (Tanker Operations).
(2) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(3) Net income attributable to non-controlling interests in the Teekay
Offshore and Teekay LNG columns represents 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, 2016
(in thousands of U.S. dollars)
(unaudited)
----------------------------------------------------------------------------
Owned In-Chartered
Conventional Conventional
Tankers Tankers FPSOs
----------------------------------------------------------------------------
Revenues 23 2,378 64,037
Voyage expenses (51) 18 (86)
Vessel operating expenses (17) (1,645) (43,234)
Time-charter hire expense - (2,932) (8,091)
Depreciation and
amortization - - (17,546)
General and administrative
expenses - (146) (3,476)
Gain (loss) on sale of
vessels and equipment 49 - (110)
Restructuring charges - - (645)
----------------------------------------------------------------------------
Income (loss) from vessel
operations 4 (2,327) (9,151)
----------------------------------------------------------------------------
Reconciliation of income (loss) from vessel operations to cash flow from
vessel operations
Income (loss) from vessel
operations 4 (2,327) (9,151)
Depreciation and
amortization - - 17,546
(Gain) loss on sale of
vessels and equipment (49) - 110
Amortization of in-process
revenue
contracts and other - - (1,483)
Realized losses from the
settlements of non-
designated
derivative instruments - - (500)
----------------------------------------------------------------------------
CFVO - Consolidated(3) (45) (2,327) 6,522
CFVO - Equity
Investments(4) 1,298 - (438)
----------------------------------------------------------------------------
CFVO - Total 1,253 (2,327) 6,084
----------------------------------------------------------------------------
----------------------------------------------------------------------------
---------------------------------------------------------------------------
Teekay
Corporate Parent
Other(1) G&A(2) Total
---------------------------------------------------------------------------
Revenues 15,413 - 81,851
Voyage expenses (519) - (638)
Vessel operating expenses (7,026) - (51,922)
Time-charter hire expense (12,593) - (23,616)
Depreciation and
amortization 112 - (17,434)
General and administrative
expenses 2,201 (6,759) (8,180)
Gain (loss) on sale of
vessels and equipment - - (61)
Restructuring charges (885) - (1,530)
---------------------------------------------------------------------------
Income (loss) from vessel
operations (3,297) (6,759) (21,530)
---------------------------------------------------------------------------
Reconciliation of income (loss) from vessel operations to cash flow from
vessel operations
Income (loss) from vessel
operations (3,297) (6,759) (21,530)
Depreciation and
amortization (112) - 17,434
(Gain) loss on sale of
vessels and equipment - - 61
Amortization of in-process
revenue
contracts and other 1,274 - (209)
Realized losses from the
settlements of non-
designated
derivative instruments - - (500)
---------------------------------------------------------------------------
CFVO - Consolidated(3) (2,135) (6,759) (4,744)
CFVO - Equity
Investments(4) 1,053 - 1,913
---------------------------------------------------------------------------
CFVO - Total (1,082) (6,759) (2,831)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(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) Includes a one-time compensation cost associated with the retirement of
Teekay Corporation's Chief Executive Officer for the three months ended
December 31, 2016.
(3) 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, 2016, Teekay Parent received cash distributions and
dividends from these subsidiaries totaling $10.5 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 Appendix D this release
for further details. Please see Appendix E to this release for a
reconciliation of this non-GAAP financial measure as used in this
release to income from vessel operations, the most directly comparable
GAAP financial measure.
(4) Please see Appendix E to this release for a reconciliation of this non-
GAAP financial measure as used in this release to equity income of
equity accounted vessels, the most directly comparable GAAP financial
measure.
Teekay Corporation
Appendix D - Reconciliation of Non-GAAP Financial Measures
Teekay Parent Free Cash Flow
(in thousands of U.S. dollars, except share and per share data)
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, June 30, March 31,
2016 2016 2016 2016
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
TEEKAY PARENT GPCO CASH FLOW
----------------------------------------------------------------------------
Daughter Entities
distributions
to Teekay Parent(1)
Limited Partner
interests(2)
Teekay LNG 3,529 3,529 3,529 3,529
Teekay Offshore 4,465 4,305 4,203 4,203
GP interests
Teekay LNG 227 227 227 227
Teekay Offshore 331 321 309 240
Other Dividends
Teekay Tankers(2)(3) 1,276 1,212 2,423 3,635
Teekay Offshore(4) 683 683 - -
----------------------------------------------------------------------------
Total Daughter Entity
Distributions 10,511 10,277 10,691 11,834
Less:
Corporate general and
administrative
expenses(5) (6,759) (3,907) (3,103) (4,951)
----------------------------------------------------------------------------
Total Parent GPCO Cash
Flow 3,752 6,370 7,588 6,883
TEEKAY PARENT OPCO CASH FLOW
Teekay Parent cash flow
from vessel
operations(6)
Owned Conventional
Tankers (45) 3,757 3,705 3,365
In-Chartered
Conventional
Tankers(7) (2,327) (4,120) (2,499) (3,600)
FPSOs 6,522 2,295 7,449 (3,472)
Other(8)(9) 134 (1,818) (4,148) (2,274)
----------------------------------------------------------------------------
Total(10) 4,284 114 4,507 (5,981)
Less:
Net interest
expense(11) (12,314) (13,258) (17,004) (14,737)
Dry docking
expenditures - - - -
----------------------------------------------------------------------------
Teekay Parent OPCO Cash
Flow (8,030) (13,144) (12,497) (20,718)
----------------------------------------------------------------------------
TOTAL TEEKAY PARENT
FREECASH FLOW (4,278) (6,774) (4,909) (13,835
)
----------------------------------------------------------------------------
Weighted-average number
of common shares -
Basic 86,131,038 84,887,101 72,945,635 72,742,426
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, June 30, March 31,
2015 2015 2015 2015
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
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
Teekay Offshore(4) - - - -
----------------------------------------------------------------------------
Total Daughter Entity
Distributions 13,045 57,425 45,294 45,263
Less:
Corporate general and
administrative
expenses(5) (4,174) (3,628) (4,139) (6,889)
----------------------------------------------------------------------------
Total Parent GPCO Cash
Flow 8,871 53,797 41,155 38,374
TEEKAY PARENT OPCO CASH
FLOW
Teekay Parent cash flow
from vessel
operations(6)
Owned Conventional
Tankers 2,418 2,422 4,628 4,291
In-Chartered
Conventional
Tankers(7) (561) (1,385) (1,501) (2,476)
FPSOs 15,373 (4,071) 31,698 7,487
Other(8)(9) 3,605 22,765 2,326 1,381
----------------------------------------------------------------------------
Total(10) 20,835 19,731 37,151 10,683
Less:
Net interest
expense(11) (15,708) (13,656) (28,635) (17,534)
Dry docking
expenditures (5,069) (46) (208) -
----------------------------------------------------------------------------
Teekay Parent OPCO Cash
Flow 58 6,029 8,308 (6,851)
----------------------------------------------------------------------------
TOTAL TEEKAY PARENT
FREECASH FLOW 8,929 59,826 49,463 31,523
----------------------------------------------------------------------------
Weighted-average number
of common shares -
Basic 72,708,463 72,706,285 72,697,121 72,549,068
----------------------------------------------------------------------------
(1) Daughter dividends and distributions for each quarter consist of the
amount of dividends and distributions received by Teekay Parent in the
following quarter. The limited partner and general partner
distributions received from Teekay Offshore for the quarters ended
December 31, 2016, September 30, 2016 and June 30, 2016 were paid-in-
kind in the form of new Teekay Offshore common units.
(2) Common share/unit dividend/distribution cash flows to Teekay Parent are
based on Teekay Parent's ownership on the ex-dividend date for the
respective publicly-traded subsidiary and period as follows:
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, June 30, March 31,
2016 2016 2016 2016
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Teekay LNG
Distribution per
common unit $ 0.1400 $ 0.1400 $ 0.1400 $ 0.1400
Common units owned
by Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274
----------------------------------------------------------------------------
Total distribution $ 3,529,158 $ 3,529,158 $ 3,529,158 $ 3,529,158
Teekay Offshore
Distribution per
common unit $ 0.1100 $ 0.1100 $ 0.1100 $ 0.1100
Common units owned
by Teekay Parent 40,589,218 39,138,991 38,211,772 38,211,772
----------------------------------------------------------------------------
Total distribution $ 4,464,814 $ 4,305,289 $ 4,203,295 $ 4,203,295
Teekay Tankers
Dividend per share $ 0.0300 $ 0.0300 $ 0.0600 $ 0.0900
Shares owned by
Teekay Parent(3) 42,542,403 40,387,231 40,387,231 40,387,231
----------------------------------------------------------------------------
Total dividend $ 1,276,272 $ 1,211,617 $ 2,423,234 $ 3,634,851
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, June 30, March 31,
2015 2015 2015 2015
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Teekay LNG
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
----------------------------------------------------------------------------
Total distribution $ 3,529,158 $ 17,645,792 $ 17,645,792 $ 17,645,792
Teekay Offshore
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
----------------------------------------------------------------------------
Total distribution $ 4,203,295 $ 21,398,592 $ 12,819,018 $ 12,819,018
Teekay Tankers
Dividend per share $ 0.1200 $ 0.0300 $ 0.0300 $ 0.0300
Shares owned by
Teekay Parent(3) 40,387,231 40,387,231 29,364,141 29,364,141
----------------------------------------------------------------------------
Total dividend $ 4,846,468 $ 1,211,617 $ 880,924 $ 880,924
(3) Includes Class A and Class B shareholdings. Teekay Tankers implemented
a new dividend policy in December 2015, whereby Teekay Tankers intends
to pay out 30 to 50 percent of its quarterly adjusted net income with
a minimum quarterly dividend of $0.03 per share.
(4) Includes distributions from Teekay Parent's interest in Teekay
Offshore's 10.50% Series D Preferred Units acquired in June 2016. The
distributions received for the quarters ended December 31, 2016 and
September 30, 2016 were paid-in-kind in the form of new Teekay
Offshore common units.
(5) Please refer to footnote (2) of Appendix C included in this release
for further details.
(6) Please refer to Appendix C for additional financial information on
Teekay Parent's cash flow from vessel operations.
(7) Includes an early termination fee paid to Teekay Offshore of $4.0
million for the three months ended March 31, 2016 in connection with
the early termination of the in-charter contract on the Kilimanjaro
Spirit conventional tanker.
(8) Includes $2.2 million, $0.3 million, $1.1 million, $1.5 million, and
$1.6 million for the three months ended December 31, 2016, September
30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015,
respectively, relating to 50 percent of the CFVO from Tanker
Operations. Teekay Tankers owns the remaining 50 percent of Tanker
Operations.
(9) Includes $1.6 million and $3.2 million of fees earned from managing
vessel transactions for Tanker Investments Ltd. for the three months
ended March 31, 2016 and September 30, 2015, respectively, 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.
(10) Excludes corporate general and administrative expenses relating to
Teekay Parent GPCO Cash Flow.
(11) Please see Appendix E to this release for a description of this
measure and a reconciliation of this non-GAAP financial measure as
used in this release to interest expense net of interest income, the
most directly comparable GAAP financial measure.
Teekay Corporation
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Consolidated
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
2016 2016 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
Income from vessel operations 83,222 89,765 151,013
Depreciation and amortization 144,901 141,688 137,785
Amortization of in process revenue
contracts and other (5,794) (5,921) (6,488)
Realized losses from the
settlements of non-designated
derivative instruments (104) (1,364) (5,295)
Write-down of vessels and equipment 2,146 - 51,748
Net loss on sale of vessels,
equipment and other operating
assets 12,038 7,838 4,074
Cash flow from time-charter
contracts(1), net of revenue
accounted for as direct finance
leases 6,866 6,809 6,586
----------------------------------------------------------------------------
CFVO - Consolidated 243,275 238,815 339,423
CFVO - Equity Investments (see
Appendix E) 47,211 46,699 61,973
----------------------------------------------------------------------------
CFVO - Total 290,486 285,514 401,396
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Teekay LNG's charter contracts for two of its former Suezmax tankers,
the Bermuda Spirit and Hamilton Spirit, were amended in 2012, which
amendments had the effect of reducing the daily charter rates by
$12,000 per day for a duration of 24 months ending 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 (loss) for
the three months ended December 31, 2015 as the change in the lease
payments is being recognized on a straight-line basis over the term of
the lease. In addition, the charterer of these two Suezmax tankers
exercised its purchase options on these two vessels as permitted under
the charter contract agreements and the vessels were redelivered during
the second quarter of 2016.
Teekay Corporation
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Consolidated
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Year Ended
December 31, December 31,
2016 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
Income from vessel operations 384,290 625,132
Depreciation and amortization 571,825 509,500
Amortization of in process revenue contracts and
other (24,195) (33,226)
Realized losses from the settlements of non-
designated derivative instruments (8,646) (20,008)
Write-down of vessels and equipment 45,796 66,086
Net loss on sale of vessels, equipment and other
operating assets 66,450 4,089
Cash flow from time-charter contracts(1), net of
revenue accounted for as direct finance leases 28,348 24,429
----------------------------------------------------------------------------
CFVO - Consolidated 1,063,868 1,176,002
CFVO - Equity Investments (see Appendix E) 223,135 239,792
----------------------------------------------------------------------------
CFVO - Total 1,287,003 1,415,794
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Teekay LNG's charter contracts for two of its former Suezmax tankers,
the Bermuda Spirit and Hamilton Spirit, were amended in 2012, which
amendments had the effect of reducing the daily charter rates by
$12,000 per day for a duration of 24 months ending 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 (loss) for
the years ended December 31, 2015 and 2016 as the change in the lease
payments is being recognized on a straight-line basis over the term of
the lease. In addition, the charterer of these two Suezmax tankers
exercised its purchase options on these two vessels as permitted under
the charter contract agreements and the vessels were redelivered during
the second quarter of 2016.
Teekay Corporation
Appendix E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Equity Accounted Vessels
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Three Months Ended
December 31, 2016 September 30, 2016 December 31, 2015
(unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
At Company's At Company's At Company's
100%Portion(1) 100%Portion(2) 100%Portion(3)
----------------------------------------------------------------------------
Revenues 190,201 78,531 194,068 81,764 270,717 105,188
Vessel and other
operating
expenses (76,071) (28,916) (88,521) (36,570) (108,285) (41,579)
Depreciation and
amortization (42,165) (18,447) (39,992) (17,298) (48,511) (20,547)
Loss on sale of
vessels (9,721) (4,861) - - (2,455) (1,228)
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 62,244 26,307 65,555 27,896 111,466 41,834
Interest expense (30,743) (12,910) (26,604) (11,278) (29,199) (11,932)
Realized and
unrealized gain
on derivative
instruments 15,708 5,255 9,401 3,481 3,329 597
Write-down of
loans
receivable - (2,387) - - - -
Other - net 64 145 3,770 1,651 (394) (243)
----------------------------------------------------------------------------
Net income of
equity
accounted
vessels 47,273 16,410 52,122 21,750 85,202 30,256
Pro forma equity
income from
Tanker
Operations - (4,477) - (680) - (3,030)
----------------------------------------------------------------------------
Equity income of
equity
accounted
vessels 47,273 11,933 52,122 21,070 85,202 27,226
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from
vessel
operations of
equity
accounted
vessels 62,244 26,307 65,555 27,896 111,466 41,834
Depreciation and
amortization 42,165 18,447 39,992 17,298 48,511 20,547
Loss on sale of
vessels 9,721 4,861 - - 2,455 1,228
Cash flow from
time-charter
contracts, net
of revenue
accounted for
as direct
finance lease 9,476 3,438 9,333 3,388 8,631 3,135
Amortization of
in-process
revenue
contracts and
other (2,541) (1,304) (2,553) (1,310) (3,176) (1,623)
----------------------------------------------------------------------------
Cash flow from
vessel
operations of
equity
accounted
vessels(4) 121,065 51,749 112,327 47,272 167,887 65,121
Pro forma CFVO
from Tanker
Operations(5) - (4,538) - (573) - (3,148)
----------------------------------------------------------------------------
Cash flow from
vessel
operationsof
equity
accounted
vessels(4) 121,065 47,211 112,327 46,699 167,887 61,973
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 20 percent to 52 percent.
(2) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 20 percent to 52 percent.
(3) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 18 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 because 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 E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Equity Accounted Vessels
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Year Ended
December 31, 2016 December 31, 2015
(unaudited) (unaudited)
----------------------------------------------------------------------------
At Company's At Company's
100% Portion(1) 100% Portion(2)
----------------------------------------------------------------------------
Revenues 886,794 367,947 1,039,015 419,335
Vessel and other operating
expenses (356,569) (142,185) (436,741) (178,266)
Depreciation and amortization (160,953) (69,822) (160,207) (69,103)
Write-down of equipment (1,351) (677) - -
(Loss) gain on sale of
vessels (8,493) (4,627) 14,367 7,182
----------------------------------------------------------------------------
Income from vessel operations
of equity accounted vessels 359,428 150,636 456,434 179,148
Interest expense (109,610) (45,962) (115,777) (47,799)
Realized and unrealized loss
on derivative instruments (10,157) (3,296) (37,443) (14,790)
Write-down of loans
receivable - (2,387) - -
Other - net (7,481) (3,162) (13,513) (5,863)
----------------------------------------------------------------------------
Net income of equity
accounted vessels 232,180 95,829 289,701 110,696
Pro forma equity income
from Tanker Operations - (10,190) - (7,825)
----------------------------------------------------------------------------
Equity income of equity
accounted vessels 232,180 85,639 289,701 102,871
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations
of equity accounted vessels 359,428 150,636 456,434 179,148
Depreciation and amortization 160,953 69,822 160,207 69,103
Loss (gain) on sale of
vessels 8,493 4,627 (14,367) (7,182)
Write-down of equipment 1,351 677 - -
Cash flow from time-charter
contracts, net of revenue
accounted for as direct
finance lease 36,463 13,231 34,062 12,381
Amortization of in-process
revenue contracts and other (10,697) (5,482) (14,030) (7,153)
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 555,991 233,511 622,306 246,297
Pro forma CFVO from Tanker
Operations(4) - (10,376) - (6,505)
----------------------------------------------------------------------------
Cash flow from vessel
operations of equity
accounted vessels(3) 555,991 223,135 622,306 239,792
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The Company's proportionate share of its equity accounted vessels and
other investments ranges from 19 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) 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 E - Reconciliation of Non-GAAP Financial Measures
Cash Flow from Vessel Operations - Teekay Parent
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
Three Months Ended September 30, 2016
(unaudited)
Owned In-chartered Teekay
Conventional Conventional Corporate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
income (loss)
from vessel
operations 3,757 (4,120) (13,116) (2,002) (3,907) (19,388)
Depreciation
and
amortization - - 17,713 (113) - 17,600
Amortization
of in-process
revenue
contracts and
other - - (1,483) 10
- (1,473)
Realized
losses from
the
settlements
of non-
designated
foreign
currency
derivative
instruments - - (819) - - (819)
----------------------------------------------------------------------------
Cash flow from
vessel
operations -
Teekay Parent 3,757 (4,120) 2,295 (2,105) (3,907) (4,080)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended June 30, 2016
(unaudited)
Owned In-chartered Teekay
Conventional Conventional Corporate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
loss from
vessel
operations (9,677) (2,499) (8,343) (5,174) (3,103) (28,796)
Depreciation
and
amortization 847 - 17,798 (113) - 18,532
Asset
impairments 12,535 - - - - 12,535
Amortization
of in-
process
revenue
contracts
and other - - (1,483) - - (1,483)
Realized
losses from
the
settlements
of non-
designated
foreign
currency
derivative
instruments - - (523) - - (523)
----------------------------------------------------------------------------
Cash flow
from vessel
operations -
Teekay
Parent 3,705 (2,499) 7,449 (5,287) (3,103) 265
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended March 31, 2016
(unaudited)
Owned In-chartered Teekay
Conventional Conventional Corporate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
income (loss)
from vessel
operations 2,495 (3,600) (17,700) (3,026) (4,951) (26,782)
Depreciation
and
amortization 870 - 17,798 (111) - 18,557
Amortization
of in-process
revenue
contracts and
other - - (1,483) (630) - (2,113)
Realized
losses from
the
settlements
of non-
designated
foreign
currency
derivative
instruments - - (2,087) - - (2,087)
----------------------------------------------------------------------------
Cash flow from
vessel
operations -
Teekay Parent 3,365 (3,600) (3,472) (3,767) (4,951) (12,425)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended December 31, 2015
(unaudited)
Owned In-chartered Teekay
Conventional Conventional Corporate Parent
Tankers Tankers FPSOs Other G&A Total
----------------------------------------------------------------------------
Teekay Parent
income (loss)
from vessel
operations 1,705 (561) (71) (1,042) (4,174) (4,143)
Depreciation
and
amortization 713 - 17,768 (113) - 18,368
Loss on sale
of vessels
and equipment - - 948 - - 948
Amortization
of in-process
revenue
contracts and
other - - (1,483) 3,186 - 1,703
Realized
losses from
the
settlements
of non-
designated
foreign
currency
derivative
instruments - - (1,789) - - (1,789)
----------------------------------------------------------------------------
Cash flow from
vessel
operations -
Teekay Parent 2,418 (561) 15,373 2,031 (4,174) 15,087
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Teekay Corporation
Appendix E - Reconciliation of Non-GAAP Financial Measures
Net Interest Expense - Teekay Parent
(in thousands of U.S. dollars)
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Three Months Ended
December 31, September 30, June 30, March 31,
2016 2016 2016 2016
(unaudited) (unaudited) (unaudited) (unaudited)
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Interest expense (69,018) (68,490) (73,255) (72,203)
Interest income 1,314 1,143 1,042 1,322
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Interest expense net
of interest income -
consolidated (67,704) (67,347) (72,213) (70,881)
Less:
Non-Teekay Parent
interest expense
net of interest
income and
adjustment (56,227) (55,035) (56,211) (57,262)
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Interest expense net
of interest income(1)
- Teekay Parent (11,477) (12,312) (16,002) (13,619)
Add:
Teekay Parent
realized losses on
interest rate swaps (837) (946) (1,002) (1,118)
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Net interest expense -
Teekay Parent (12,314) (13,258) (17,004) (14,737)
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(1) Three months ended June 30, 2016 excludes a $3.1 million write-off of
prepaid loan costs in relation to the partial termination of a credit
facility and includes a $2.3 million cash termination fee from the
partial termination of a debt facility.
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Three Months Ended
December 31, September 30, June 30, March 31,
2015 2015 2015 2015
(unaudited) (unaudited) (unaudited) (unaudited)
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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 and
adjustment (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(2) (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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(2) Realized losses on interest rate swaps exclude realized losses of $3.3
million for the three months ended March 31, 2015 on the interest rate
swap related to the debt facility secured by the Knarr FPSO.
Forward-Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the U.S. Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the outcome of discussions with the charterer on the Arendal Spirit UMS, including the timing and certainty of the unit returning to operation; the timing of newbuilding vessel and conversion deliveries and the commencement of related contracts, including potential delays and additional costs on the Petrojarl I FPSO unit; Teekay LNG's access to capital markets and the timing and certainty of securing financing for Teekay LNG's committed growth projects; the impact of new commercial contracts on the Company's consolidated portfolio of fixed-rate contracts and future cash flows and earnings; the charter payment deferral on the Teekay LNG's two 52 percent-owned LNG carriers on charter to the Yemen LNG project and six LPG carriers on charter to Skaugen, including the temporary nature of such deferrals; timing and certainty relating to certain vessel sales; expected cash flow from vessel operations under the revised Banff FPSO charter rate structure; and the potential new shuttle tanker CoA contract, including the timing of start-up.
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; the inability of Teekay Offshore to meet the charterer's requirements for the Arendal Spirit UMS to return to operations; the inability of the Company to negotiate acceptable terms with the charterer, shipyard and lenders related to the delay of the Petrojarl I FPSO; Teekay LNG's and Teekay LNG's joint ventures' ability to secure financing for its existing newbuildings and projects; potential shipyard and project construction delays, newbuilding specification changes or cost overruns; costs relating to projects; delays in commencement of operations of FPSO and FSO units at designated fields; 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 and from Skaugen; a delay in, or failure to complete, vessel sales; the inability of Teekay Offshore to finalize the new shuttle tanker CoA contract and delays in project start-up; changes in the Company's expenses; 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, 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: Investor Relations Enquiries: Ryan Hamilton +1 (604) 844-6654 www.teekay.com
Source: Teekay Corporation