Teekay Corporation Reports Second Quarter Results
HAMILTON, BERMUDA -- (Marketwire) -- 08/09/12 -- Teekay Corporation (TK) (Teekay or the Company) (NYSE: TK) today reported an adjusted net loss attributable to stockholders of Teekay(1) of $17.0 million, or $0.25 per share, for the quarter ended June 30, 2012, compared to adjusted net loss attributable to the stockholders of Teekay of $36.3 million, or $0.51 per share, for the same period of the prior year. Adjusted net loss attributable to stockholders of Teekay excludes a number of specific items that had the net effect of increasing GAAP net loss by $30.2 million (or $0.43 per share) for the three months ended June 30, 2012 and increasing GAAP net loss by $60.2 million (or $0.85 per share) for the three months ended June 30, 2011, as detailed in Appendix A to this release. Including these items, the Company reported on a GAAP basis, net loss attributable to the stockholders of Teekay of $47.3 million, or $0.68 per share, for the quarter ended June 30, 2012, compared to net loss attributable to the stockholders of Teekay of $96.5 million, or $1.36 per share, for the same period of the prior year. Net revenues(2) for the second quarter of 2012 were $442.7 million, compared to $433.0 million for the same period of the prior year.
For the six months ended June 30, 2012, the Company reported an adjusted net loss attributable to stockholders of Teekay(1) of $37.8 million, or $0.55 per share, compared to adjusted net loss attributable to the stockholders of Teekay of $64.1 million, or $0.90 per share, for the six months ended June 30, 2011. Adjusted net loss attributable to stockholders of Teekay excludes a number of specific items that had the net effect of increasing GAAP net loss by $8.4 million (or $0.12 per share) for the six months ended June 30, 2012 and increasing GAAP net loss by $62.0 million (or $0.87 per share) for the six months ended June 30, 2011, as detailed in Appendix A to this release. Including these items, the Company reported on a GAAP basis, a net loss attributable to the stockholders of Teekay of $46.2 million, or $0.67 per share, for the six months ended June 30, 2012, compared to a net loss attributable to the stockholders of Teekay of $126.1 million, or $1.77 per share, for the six months ended June 30, 2011. Net revenues(2) for the six months ended June 30, 2012 were $899.7 million, compared to $875.9 million for the same period of the prior year.
On July 6, 2012, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended June 30, 2012. The cash dividend was paid on July 27, 2012, to all shareholders of record on July 17, 2012.
(1) Adjusted net (loss) income attributable to stockholders of Teekay is a
non-GAAP financial measure. Please refer to Appendix A to this release
for a reconciliation of this non-GAAP measure as used in this release
to the most directly comparable financial measure under United States
generally accepted accounting principles (GAAP).
(2) Net revenues represents revenues less voyage expenses, which comprise
all expenses relating to certain voyages, including bunker fuel
expenses, port fees, cargo loading and unloading expenses, canal tolls,
agency fees and commissions. Net revenues is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. Please see the Company's website at
http://www.teekay.com/ for a reconciliation of this non-GAAP measure as
used in this release to the most directly comparable financial measure
under GAAP.
"With the announcement of many significant transactions in our core businesses during 2011, one of our main areas of focus in 2012 has been the efficient execution of our existing project development portfolio," commented Peter Evensen, Teekay Corporation's President and Chief Executive Officer. "Later this month, the Voyageur Spirit FPSO upgrade is expected to be completed and will sail away from the shipyard in time for the expected oil field start-up during the fourth quarter. The Cidade de Itajai FPSO conversion is also now largely complete and expected to sail for Brazil in August in preparation for its charter with Petrobras, which is expected to commence in late-2012. In May of this year, steel cutting began on the first two of four newbuilding Suezmax class shuttle tankers that Teekay Offshore will directly acquire for its contract with BG in the Brazil offshore market commencing in mid- to late-2013. And lastly, construction on our largest project to date, the $1 billion Knarr FPSO newbuilding, is proceeding on schedule and first-oil on the Knarr field in the North Sea is expected in the first quarter of 2014."
"Operationally, we have been focused on integrating our recent asset acquisitions and various initiatives aimed at enhancing the profitability of our existing assets," Mr. Evensen continued. "During the next few weeks, Teekay will take over technical management of the final of the six Maersk LNG carriers that the Teekay LNG-Marubeni joint venture acquired earlier this year. During the second quarter, Teekay LNG took advantage of the strong fundamentals in the LNG shipping market to secure a new three-year charter for the Magellan Spirit LNG carrier, which will commence immediately after the expiration of the current charter in September 2013. With the completion of the sale of the majority of our owned conventional crude and product tanker assets to Teekay Tankers in June, Teekay Parent's exposure to the conventional tanker market is now mostly indirect through its equity ownership in a significantly larger Teekay Tankers. Our remaining in-chartered conventional fleet continues to reduce rapidly with eight vessels, or over one-third of the Teekay Parent in-charter fleet, redelivered in the first half of 2012 and two more vessels scheduled to be redelivered in the second half of the year. We have also made significant progress on our previously announced ship management joint venture with Anglo-Eastern, which we expect will result in cost savings commencing in the fourth quarter of this year."
"The pace of tendering activity in the gas and offshore sectors continues to be strong," Mr. Evensen added. "With the completion of our most recent LNG carrier newbuildings in the first quarter, our gas business development team has been actively bidding on both on-the-water and newbuilding LNG investment opportunities. In our offshore business, we are actively assessing various long-term projects which if acquired, will not begin construction until our current projects have been delivered and are generating cash flow."
"Our current focus on project execution is aligned with our objectives of enhancing Teekay's net asset value and profitability," Mr. Evensen concluded. "The acquisition and delivery of gas and offshore assets by our publicly traded master limited partnerships provides growing cash flows to Teekay Parent from its GP and LP ownership interests in Teekay LNG and Teekay Offshore, while dropdowns have the added benefit of deleveraging the Teekay Parent balance sheet and thereby creating future financial flexibility. This includes our recent offer to sell the Voyageur Spirit FPSO to Teekay Offshore Partners upon commencement of its charter contract in the North Sea during the fourth quarter of 2012."
Operating Results
The following tables highlight certain financial information for each of Teekay's four publicly-listed entities: Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE: TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE: TGP), Teekay Tankers Ltd. (Teekay Tankers) (NYSE: TNK) and Teekay Parent (which excludes the results attributed to Teekay Offshore, Teekay LNG and Teekay Tankers). A brief description of each entity and an analysis of its respective financial results follow the tables below. Please also refer to the "Fleet List" section below and Appendix B to this release for further details.
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Three Months Ended June 30, 2012
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(unaudited)
(in Teekay Teekay
thousands Offshore LNG Teekay Teekay
of U.S. Partners Partners Tankers Teekay Consolidation Corporation
dollars) LP LP Ltd. Parent Adjustments Consolidated
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Net revenues 213,351 96,112 50,933 131,303 (48,964) 442,735
Vessel
operating
expense 70,080 20,104 20,922 61,250 - 172,356
Time-charter
hire
expense 12,969 - 644 68,059 (50,181) 31,491
Depreciation
and
amortization 50,003 24,673 18,047 22,345 - 115,068
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CFVO -
Consolidated
(1)(2)(3) 109,812 70,999 15,448 (24,445) - 171,814
CFVO -
Equity
Investments
(4) - 38,035 - (1,441) - 36,594
CFVO - Total 109,812 109,034 15,448 (25,886) - 208,408
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Three Months Ended June 30, 2011
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(unaudited)
(in Teekay Teekay
thousands Offshore LNG Teekay Teekay
of U.S. Partners Partners Tankers Teekay Consolidation Corporation
dollars) LP LP Ltd. Parent Adjustments Consolidated
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Net revenues 201,573 91,562 56,646 138,689 (55,437) 433,033
Vessel
operating
expense 75,197 23,388 21,336 54,796 - 174,717
Time-charter
hire
expense 18,182 - - 90,669 (55,437) 53,414
Depreciation
and
amortization 46,163 22,171 18,782 18,120 - 105,236
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CFVO -
Consolidated
(1)(2)(3) 95,171 63,130 17,895 (27,425) - 148,771
CFVO -
Equity
Investments
(4) - 14,483 - 1,622 - 16,105
CFVO - Total 95,171 77,613 17,895 (25,803) - 164,876
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(1) Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization
of in-process revenue contracts, vessel write-downs, gains and losses
on the sale of vessels, adjustments for direct financing leases to a
cash basis, and unrealized gains and losses relating to derivatives,
but includes realized gains and losses on the settlement of foreign
currency forward contracts. CFVO - Consolidated represents CFVO from
vessels that are consolidated on the Company's financial statements.
Cash flow from vessel operations is a non-GAAP financial measure used
by certain investors to measure the financial performance of shipping
companies. Please refer to Appendix B or Appendix C of this release and
see the Company's website at http://www.teekay.com/ for a
reconciliation of this non-GAAP measure as used in this release to the
most directly comparable GAAP financial measure.
(2) Excludes the cash flow from vessel operations relating to assets
acquired from Teekay Parent for the periods prior to their acquisition
by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as
those results are included in the historical results for Teekay Parent.
(3) In addition to Teekay Parent's cash flow from vessel operations, Teekay
Parent also receives cash dividends and distributions from its daughter
public companies. For the three months ended June 30, 2012 and 2011,
Teekay Parent received daughter company dividends and distributions
totaling $39.2 million and $35.9 million, respectively. The dividends
and distributions received by Teekay Parent include those made with
respect to its general partner interests in Teekay Offshore and Teekay
LNG. Please refer to Appendix D to this release for further details.
(4) Cash flow from vessel operations (CFVO) - Equity Investments represents
the Company's proportionate share of CFVO from its equity accounted
vessels and other investments. Please refer to Appendix B or Appendix C
of this release and see the Company's website at http://www.teekay.com/
for a reconciliation of this non-GAAP measure as used in this release
to the most directly comparable GAAP financial measure.
Teekay Offshore Partners L.P.
Teekay Offshore is an international provider of marine transportation, oil production and storage services to the offshore oil industry through its fleet of 40 shuttle tankers (including four chartered-in vessels and four newbuildings under construction), three floating, production, storage and offloading (FPSO) units, five floating storage and offtake (FSO) units and nine conventional oil tankers, in which its interests range from 50 to 100 percent. Teekay Offshore also has the right to participate in certain other FPSO and vessel opportunities. Teekay Parent currently owns a 30.9 percent interest in Teekay Offshore (including the 2 percent sole general partner interest).
Cash flow from vessel operations from Teekay Offshore increased to $109.8 million in the second quarter of 2012, from $95.2 million in the same period of the prior year. This increase was primarily due to a full quarter contribution from the Piranema Spirit FPSO unit acquired on November 30, 2011, the Scott Spirit and Peary Spirit shuttle tanker newbuildings acquired subsequent to June 30, 2011, and decreases in time-charter hire expense, vessel operating costs and restructuring charges in the shuttle tanker fleet. Time-charter hire expense decreased due to the redelivery of one in-chartered vessel in the fourth quarter of 2011 and fewer short-term chartered-in days. Vessel operating costs decreased due to the cold lay-up of the Basker Spirit shuttle tanker commencing in the third quarter of 2011 and other operating cost savings initiatives. A decrease in vessel operating expenses from the Rio das Ostras FPSO due to higher maintenance costs incurred while the unit was undergoing upgrades during the first half of 2011 further contributed to the increase in cash flow from vessel operations.
In July 2012, Teekay Offshore sold 1.7 million common units in a private placement for net proceeds of $45.9 million (including the general partners' contribution), which will be used to partially finance the shipyard installments relating to four newbuilding shuttle tankers being constructed by Samsung Heavy Industries, for a total delivered cost of approximately $470 million. Upon their scheduled delivery in mid- to late-2013, the vessels will commence operations under 10-year time-charter contracts, which include certain contract extension and vessel purchase options, with a subsidiary of BG Group plc to provide shuttle tanker services in Brazil.
In June 2012, Teekay Parent offered to sell to Teekay Offshore the Voyageur Spirit FPSO unit upon commencement of its new time-charter contract in the fourth quarter of 2012. The offer is currently being reviewed by the Conflicts Committee of Teekay Offshore's Board of Directors. In addition, in June 2012, Talisman Energy, the current charterer of the Teekay Offshore-owned FPSO unit, the Petrojarl Varg, elected to exercise the first of three three-year extension options on the contract, extending the firm charter period until June 30, 2016.
Also in June 2012, Teekay Offshore sold a 1997-built conventional Aframax tanker to a third party buyer for net proceeds of $8.7 million. As a result of the early termination of the associated time-charter to Teekay Parent, Teekay Offshore received a termination fee of $14.7 million from Teekay Parent.
For the second quarter of 2012, Teekay Offshore's quarterly distribution was $0.5125 per common unit. The cash distribution received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totaled $14.3 million for the second quarter of 2012, as detailed in Appendix D to this release.
Teekay LNG Partners L.P.
Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services under long-term, fixed-rate charter contracts with major energy and utility companies through its current fleet of 27 LNG carriers, five LPG carriers and 11 conventional tankers, in which Teekay LNG's interests range from 33 to 100 percent. Teekay Parent currently owns a 40.1 percent interest in Teekay LNG (including the 2 percent sole general partner interest).
Including cash flows from equity accounted vessels, Teekay LNG's total cash flow from vessel operations increased to $109.0 million in the second quarter of 2012, from $77.6 million in the same period of the prior year. This increase primarily resulted from the acquisition of a 52 percent interest in six LNG carriers from A.P. Moller-Maersk in February 2012 (the MALT LNG Carriers), the acquisition of a 33 percent interest in four Angola LNG Carriers from Teekay between August 2011 and January 2012, the acquisition of newbuilding Multigas/LPG carriers in June, September and October 2011, and reduced vessel operating expenses in 2012 primarily due to timing of services and maintenance in relation to scheduled drydockings.
In early May 2012, Teekay LNG issued in the Norwegian bond market NOK 700 million in senior unsecured bonds that mature in May 2017. The aggregate principal amount of the bonds is equivalent to approximately USD 125 million and all interest and principal payments were swapped into USD. The proceeds from the bond issuance have been used to reduce amounts outstanding under Teekay LNG's revolving credit facilities and for general partnership purposes. Teekay LNG is applying to list the bonds on the Oslo Stock Exchange.
For the second quarter of 2012, Teekay LNG's quarterly distribution was $0.675 per common unit. The cash distribution received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay LNG totaled $22.5 million for the second quarter of 2012 as detailed in Appendix D to this release.
Teekay Tankers Ltd.
Teekay Tankers currently owns a fleet of 12 Aframax tankers, 10 Suezmax tankers, three Long Range 2 (LR2) product tankers, three MR product tankers, and a 50 percent interest in a Very Large Crude Carrier (VLCC) newbuilding scheduled to deliver in April 2013. In addition, Teekay Tankers currently time-charters in one Aframax tanker and has invested $115 million in first-priority mortgage loans secured by two 2010-built VLCCs which yield an annualized fixed-rate return of 10 percent. Of the 29 vessels currently in operation, 15 are employed on fixed-rate time-charters, generally ranging from one to three years in initial duration, with the remaining vessels trading in Teekay's spot tanker pools. Based on its current ownership of Class A common stock and its ownership of 100 percent of the outstanding Teekay Tankers Class B stock, Teekay Parent currently owns a 25 percent economic interest in and has voting control of Teekay Tankers.
In the second quarter of 2012, cash flow from vessel operations from Teekay Tankers decreased to $15.4 million from $17.9 million in the same period of the prior year, primarily due to lower average realized tanker rates for its spot Aframax fleet and expiry of certain time-charter contracts, partially offset by higher average realized tanker rates for its spot Suezmax fleet during the second quarter of 2012, compared to the same period of the prior year.
In June 2012, Teekay Tankers completed the acquisition from Teekay Parent of 13 double-hull conventional oil and product tankers, along with related time-charter contracts, debt facilities and other assets and rights, for an aggregate purchase price of $454.2 million. Upon closing of the transaction in late June 2012, Teekay received as partial consideration $25 million of new Teekay Tankers Class A shares issued at a price of $5.60 per share. As a result, Teekay Parent's economic ownership interest in Teekay Corporation, including 100 percent of Teekay Tankers' Class B common stock, increased from approximately 20 percent currently to approximately 25 percent upon closing of the transaction and Teekay's voting control of Teekay Tankers increased from approximately 51 percent to approximately 53 percent.
On August 8, 2012, Teekay Tankers declared a second quarter 2012 dividend of $0.11 per share which will be paid August 27, 2012 to all shareholders of record on August 20, 2012. As a result, based on its ownership of Teekay Tankers Class A and Class B shares, the dividend to be paid to Teekay Parent will total $2.3 million for the second quarter of 2012.
Teekay Parent
In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns several vessels, which, as at August 1, 2012, included four conventional Suezmax tankers and four FPSO units. In addition, Teekay Parent currently has one newbuilding FPSO unit under construction, owns a 50 percent interest in an FPSO unit currently under conversion, and has agreed to acquire one FPSO unit later in 2012 upon completion of capital upgrades and commencement of its time-charter contract. As at August 1, 2012, Teekay Parent also had 13 chartered-in conventional tankers (including five vessels owned by its subsidiaries), two chartered-in LNG carriers owned by Teekay LNG and two chartered-in shuttle tankers owned by Teekay Offshore.
For the second quarter of 2012, Teekay Parent's negative cash flow from vessel operations was $25.9 million, compared to negative cash flow from vessel operations of $25.8 million in the same period of the prior year. The slight increase in negative cash flow is primarily due to a $14.7 million termination fee paid for the termination of the Hamane Spirit time-charter in contract with Teekay Offshore in the second quarter of 2012 and higher vessel operating expenses in Teekay Parent's equity accounted investments compared to the same period in the prior year, offset by the acquisition of the Hummingbird Spirit FPSO unit on November 30, 2011 and lower time-charter hire expense due to redeliveries of time-chartered in vessels during the past year.
In June 2012, Teekay Parent sold to Teekay Tankers 13 of its 17 remaining directly-owned conventional tankers and related time-charter contracts, debt facilities and other assets and rights, as discussed under the Teekay Tankers section above.
Fleet List
The following table summarizes Teekay's consolidated fleet of 149 vessels as at August 1, 2012, including chartered-in vessels and vessels under construction/conversion but excluding vessels managed for third parties:
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Number of Vessels(1)
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Owned Chartered-in Newbuildings /
Vessels Vessels Conversions Total
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Teekay Parent Fleet(2)(3)
Aframax Tankers (4) - 6 - 6
Suezmax Tankers 4 1 - 5
MR Product Tankers - 1 - 1
FPSO Units (5) 4 - 3 7
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Total Teekay Parent Fleet 8 8 3 19
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Teekay Offshore Fleet 49 4 4 57
Teekay LNG Fleet 43 - 43
Teekay Tankers Fleet 28 1 1 30
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Total Teekay Consolidated
Fleet 128 13 8 149
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(1) Ownership interests in these vessels range from 33 percent to 100
percent. Excludes vessels managed on behalf of third parties.
(2) Excludes two LNG carriers chartered-in from Teekay LNG.
(3) Excludes two shuttle tankers chartered-in from Teekay Offshore.
(4) Excludes five vessels chartered-in from Teekay Offshore.
(5) Includes one FPSO unit that for accounting purposes is a variable
interest entity (VIE) whereby Teekay is the primary beneficiary. As a
result, the Company has consolidated the VIE even though the Company
will not acquire the FPSO unit until later in 2012.
Liquidity and Capital Expenditures
As at June 30, 2012, Teekay had consolidated liquidity of $1.5 billion (consisting of $665.7 million cash and cash equivalents and $838.5 million of undrawn revolving credit facilities) of which $387.8 million of liquidity (consisting of $352.8 million cash and cash equivalents and $35.0 million of undrawn revolving credit facilities) is attributable to Teekay Parent. Pro Forma for $45 million of proceeds from the July 2012 Teekay Offshore equity private placement and approximately $168 million of drawings on the Knarr FPSO construction loan facility, Teekay had total consolidated liquidity of $1.7 billion, of which $555.4 million was attributable to Teekay Parent.
The following table provides the Company's remaining capital commitments relating to its portion of acquisitions, newbuildings and conversions and related total financing completed as at June 30, 2012:
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Amount
Financed
(in millions) 2012 2013 2014 Total to Date
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Teekay Offshore (1) $ 56 $ 323 - $ 379 -
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Teekay LNG - - - - -
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Teekay Tankers (2) $ 20 $ 17 - $ 37 $ 34
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Teekay Parent (3) $ 577 $ 389 $ 13 $ 979 $ 555
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Total Teekay Corporation
Consolidated $ 653 $ 729 $ 13 $ 1,395 $ 589
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(1) Includes capital expenditures related to four newbuilding shuttle
tankers.
(2) Includes remaining capital expenditures related to Teekay Tankers' 50
percent interest in the Wah Kwong VLCC Newbuilding.
(3) Includes remaining capital expenditures related to the Knarr FPSO
newbuilding, capital cost to upgrade and acquire the Voyageur Spirit
FPSO unit and Teekay Parent's 50 percent interest in the Cidade de
Itajai FPSO unit.
As indicated above, the Company had total capital expenditure commitments pertaining to its portion of acquisitions, newbuildings and conversions of approximately $1.4 billion remaining as at June 30, 2012. The Company's current pre-arranged financing of approximately $589 million mostly relates to its remaining 2012 capital expenditure commitments. The Company is in the process of obtaining additional debt financing to fund its remaining capital expenditure commitments relating to the four shuttle tanker newbuildings and the Knarr FPSO newbuilding, which are scheduled to deliver in mid- to late-2013.
Conference Call
The Company plans to host a conference call on August 9, 2012 at 11:00 a.m. (ET) to discuss its results for the second quarter of 2012. An accompanying investor presentation will be available on Teekay's website at www.teekay.com prior to the start of the call. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:
-- By dialing (800) 820-0231 or (416) 640-5926, if outside North America, and quoting conference ID code 4705713. -- By accessing the webcast, which will be available on Teekay's website at www.teekay.com (the archive will remain on the website for a period of 30 days).
The conference call will be recorded and available until Thursday, August 16, 2012. 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 4705713.
About Teekay
Teekay Corporation is an operational leader and project developer in the marine midstream space. Through its general partnership interests in two master limited partnerships, Teekay LNG Partners L.P. (NYSE: TGP) and Teekay Offshore Partners L.P. (NYSE: TOO), its controlling ownership of Teekay Tankers Ltd. (NYSE: TNK), and its fleet of directly-owned vessels, Teekay is responsible for managing and operating consolidated assets of over $11 billion, comprised of approximately 150 liquefied gas, offshore, and conventional tanker assets. With offices in 16 countries and approximately 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.
Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".
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TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(in thousands of U.S. dollars, except share and per share data)
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Three Months Ended Six Months Ended
----------------------------------- -----------------------
June 30, March 31, June 30, June 30, June 30,
----------- ----------- ----------- ----------- -----------
2012 2012 2011 2012 2011
----------- ----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
--------------------------- ----------- ----------- ----------- -----------
REVENUES(1) 481,911 495,564 484,922 977,475 972,946
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OPERATING
EXPENSES
Voyage expenses
(1) 39,176 38,637 51,889 77,813 97,015
Vessel operating
expenses (1)(2) 172,356 167,201 174,717 339,557 336,294
Time-charter
hire expense 31,491 43,979 53,414 75,470 116,445
Depreciation and
amortization 115,068 114,614 105,236 229,682 210,274
General and
administrative
(1)(2) 50,777 53,373 51,273 104,150 121,491
Loss (gain) on
sale of vessels
and equipment /
asset
impairments 3,269 (197) 5,812 3,072 9,405
Restructuring
charges 1,525 - 458 1,525 5,419
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413,662 417,607 442,799 831,269 896,343
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Income from
vessel
operations 68,249 77,957 42,123 146,206 76,603
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OTHER ITEMS
Interest expense
(1) (42,707) (42,300) (33,516) (85,007) (66,310)
Interest income
(1) 1,645 2,046 2,457 3,691 4,922
Realized and
unrealized
(loss) gain on
derivative
instruments (1) (94,598) 4,815 (102,140) (89,783) (78,883)
Income tax
recovery
(expense) 1,849 3,568 (2,022) 5,417 (2,833)
Equity income
(loss)(3) 5,291 17,644 (6,053) 22,935 341
Foreign exchange
gain (loss) 17,835 (15,824) (7,157) 2,011 (27,497)
Other income -
net 89 2,343 958 2,432 1,052
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Net (loss)
income (42,347) 50,249 (105,350) 7,902 (92,605)
Less: Net
(income) loss
attributable to
non-controlling
interests (4,927) (49,183) 8,898 (54,110) (33,504)
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Net (loss)
income
attributable to
stockholders of
Teekay
Corporation (47,274) 1,066 (96,452) (46,208) (126,109)
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(Loss) earnings
per common
share of Teekay
- Basic ($0.68) $0.02 ($1.36) ($0.67) ($1.77)
- Diluted ($0.68) $0.02 ($1.36) ($0.67) ($1.77)
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Weighted-average
number of
common
shares
outstanding
- Basic 69,231,419 68,855,860 70,935,484 69,043,639 71,438,446
- Diluted 69,231,419 70,146,586 70,935,484 69,043,639 71,438,446
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(1) Realized and unrealized gains and 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 (loss)
income. The realized gains (losses) relate to the amounts the Company
actually received or paid to settle such derivative instruments and the
unrealized gains (losses) relate to the change in fair value of such
derivative instruments, as detailed in the table below:
Three Months Ended Six Months Ended
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June 30, March 31, June 30, June 30, June 30,
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2012 2012 2011 2012 2011
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Realized (losses) gains
relating to:
Interest rate swaps (29,669) (30,416) (32,692) (60,085) (66,689)
Interest rate swap resets
and terminations - - - - (92,672)
Foreign currency forward
contracts
Vessel operating
expenses 243 1,237 3,337 1,480 4,553
General and
administrative
expenses (96) - 221 (96) 330
Bunkers, FFAs and other - 11,452 (7) 11,452 42
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(29,522) (17,727) (29,141) (47,249) (154,436)
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Unrealized (losses) gains
relating to:
Interest rate swaps (58,425) 17,135 (73,331) (41,290) 68,527
Foreign currency forward
contracts (6,651) 8,792 540 2,141 7,248
Bunkers, FFAs and other - (3,385) (208) (3,385) (222)
-------------------------------------------------
(65,076) 22,542 (72,999) (42,534) 75,553
-------------------------------------------------
Total realized and
unrealized (losses) gains
on
non-designated derivative
instruments (94,598) 4,815 (102,140) (89,783) (78,883)
-------------------------------------------------
-------------------------------------------------
(2) The Company has entered into foreign currency forward contracts, which
are economic hedges of vessel operating expenses and general and
administrative expenses. Certain of these forward contracts have been
designated as cash flow hedges pursuant to GAAP. Unrealized gains
(losses) arising from hedge ineffectiveness from such forward contracts
are reflected in vessel operating expenses and general and
administrative expenses in the above Summary Consolidated Statements of
(Loss) Income, as detailed in the table below:
Three Months Ended Six Months Ended
--------------------------------------------------
June 30 March 31 June 30 June 30 June 30
--------------------------------------------------
2012 2012 2011 2012 2011
--------------------------------------------------
Vessel operating expenses - - (171) - (350)
General and administrative (306) (18) 121 (324) 216
(3) Equity income excluding the Company's proportionate share of unrealized
gains (losses) on derivative instruments are as detailed in the table
below:
Three Months Ended Six Months Ended
------------------------------------------------
June 30, March 31, June 30, June 30, June 30,
------------------------------------------------
2012 2012 2011 2012 2011
------------------------------------------------
Equity income (loss) 5,291 17,644 (6,053) 22,935 341
Proportionate share of
unrealized losses (gains)
on derivative instruments 10,428 (6,920) 12,396 3,508 8,212
------------------------------------------------
Equity income excluding
unrealized gains
(losses) on derivative
instruments 15,719 10,724 6,343 26,443 8,553
------------------------------------------------
------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at June As at March As at December
30, 31, 31,
-------------------------------------------
2012 2012 2011
-------------------------------------------
(unaudited) (unaudited) (unaudited)
-------------------------------------------
ASSETS
Cash and cash equivalents 665,737 712,288 692,127
Other current assets 557,506 507,070 495,357
Restricted cash - current 4,659 104,688 4,370
Restricted cash - long-term 526,705 526,901 495,784
Vessels held for sale 14,961 19,000 19,000
Vessels and equipment 7,197,259 7,279,189 7,360,454
Advances on newbuilding
contracts/conversions 444,173 316,176 507,908
Derivative assets 167,701 147,565 165,269
Investment in equity accounted
investees 436,486 424,269 252,637
Investment in direct financing
leases 447,746 453,478 459,908
Investment in term loans 187,347 187,091 186,844
Other assets 209,774 191,898 184,438
Intangible assets 128,682 132,494 136,742
Goodwill 166,539 166,539 166,539
----------------------------------------------------------------------------
Total Assets 11,155,275 11,168,646 11,127,377
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 382,128 382,469 487,651
Current portion of long-term debt 798,828 587,216 448,626
Long-term debt 5,227,640 5,443,497 5,422,345
Long-term debt - variable
interest entity(1) 230,450 220,450 220,450
Derivative liabilities 728,944 620,403 686,879
In process revenue contracts 272,733 290,863 308,639
Other long-term liabilities 219,493 220,376 220,986
Redeemable non-controlling
interest 36,356 37,805 38,307
Equity:
Non-controlling interests 1,919,410 1,967,272 1,863,798
Stockholders of Teekay 1,339,293 1,398,295 1,429,696
----------------------------------------------------------------------------
Total Liabilities and Equity 11,155,275 11,168,646 11,127,377
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) For accounting purposes, the Voyageur Spirit is a variable interest
entity (VIE), whereby Teekay is the primary beneficiary. As a result,
the Company has consolidated the VIE as of December 1, 2011, even
though the Company will not acquire the Voyageur Spirit FPSO unit until
later in 2012.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Six Months Ended
--------------------------
June 30
--------------------------
2012 2011
--------------------------
(unaudited) (unaudited)
--------------------------
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
----------------------------------------------------------------------------
Net operating cash flow 139,484 7,199
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term debt 816,296 547,253
Scheduled repayments of long-term debt (159,293) (123,450)
Prepayments of long-term debt (487,548) (341,783)
Increase in restricted cash (31,641) (4,353)
Repurchase of common stock - (83,660)
Net proceeds from the public offering of Teekay
LNG - 158,326
Net proceeds from public offerings of Teekay
Tankers 65,854 107,234
Cash dividends paid (44,956) (46,472)
Distribution paid from subsidiaries to non-
controlling interests (121,109) (101,284)
Other 3,494 17,330
----------------------------------------------------------------------------
Net financing cash flow 41,097 129,141
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (205,186) (358,607)
Proceeds from sale of vessels and equipment 205,096 5,055
Investment in term loans - (70,404)
Proceeds from sale of marketable securities 1,063 -
Loan to joint ventures and equity accounted
investees (58,916) (1,881)
Investment in joint ventures (155,228) (6,544)
Other 6,200 13,842
----------------------------------------------------------------------------
Net investing cash flow (206,971) (418,539)
----------------------------------------------------------------------------
Decrease in cash and cash equivalents (26,390) (282,199)
Cash and cash equivalents, beginning of the period 692,127 779,748
----------------------------------------------------------------------------
Cash and cash equivalents, end of the period 665,737 497,549
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below is a reconciliation of the Company's unaudited adjusted net loss attributable to the stockholders of Teekay, a non-GAAP financial measure, to net income (loss) attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company's financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
---------------------------------------------
June 30, 2012 June 30, 2012
---------------------------------------------
(unaudited) (unaudited)
$ Per $ Per
$ Share(1) $ Share(1)
----------------------------------------------------------------------------
Net (loss) income - GAAP basis (42,347) 7,902
Adjust for: Net income
attributable to
non-controlling interests (4,927) (54,110)
----------------------------------------------------------------------------
Net loss attributable to
stockholders of Teekay (47,274) (0.68) (46,208) (0.67)
Add (subtract) specific items
affecting net loss:
Unrealized losses from
derivative instruments(2) 75,811 1.09 46,367 0.67
Foreign currency exchange
gains(3) (18,567) (0.27) (3,736) (0.05)
Loss on sale of assets / asset
impairments 3,269 0.05 3,072 0.04
Non-recurring adjustment to tax
accruals (2,700) (0.04) (8,006) (0.12)
Restructuring charges(4) 1,525 0.02 1,525 0.02
Realized gain upon settlement
of embedded derivative - - (11,452) (0.16)
Other(5) 1,308 0.02 (490) (0.01)
Non-controlling interests'
share of items above (30,404) (0.44) (18,906) (0.27)
----------------------------------------------------------------------------
Total adjustments 30,242 0.43 8,374 0.12
----------------------------------------------------------------------------
Adjusted net loss attributable
to stockholders of Teekay (17,032) (0.25) (37,834) (0.55)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Fully diluted per share amounts.
(2) Reflects the unrealized gains or losses relating to the change in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes, including those included in equity
income (loss) from joint ventures, and the ineffective portion of
foreign currency forward contracts designated as hedges for accounting
purposes.
(3) Foreign currency exchange gains and losses primarily relate to the
Company's debt denominated in Euros and Norwegian Kroner in addition to
the unrealized gains (losses) on cross currency swaps used to hedge the
principal and interest on the Norwegian Kroner bonds. Nearly all of the
Company's foreign currency exchange gains and losses are unrealized.
(4) Restructuring charges relate to reorganization of the Company's marine
operations.
(5) Other includes transaction and start-up related costs associated with
the sale of 13 conventional tankers from Teekay Parent to Teekay
Tankers and the acquisition of the MALT LNG Carriers and gain on sale
of other assets.
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)
(in thousands of U.S. dollars, except per share data)
Set forth below is a reconciliation of the Company's unaudited adjusted net loss attributable to the stockholders of Teekay, a non-GAAP financial measure, to net income (loss) attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company's financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
---------------------------------------------
June 30, 2011 June 30, 2011
---------------------------------------------
(unaudited) (unaudited)
$ Per $ Per
$ Share(1) $ Share(1)
----------------------------------------------------------------------------
Net loss - GAAP basis (105,350) (92,605)
Adjust for: Net loss (income)
attributable to
non-controlling interests 8,898 (33,504)
----------------------------------------------------------------------------
Net loss attributable to
stockholders of Teekay (96,452) (1.36) (126,109) (1.77)
Add (subtract) specific items
affecting net loss:
Unrealized losses (gains) from
derivative instruments (2) 85,445 1.21 (67,207) (0.94)
Foreign currency exchange loss
(3) 7,935 0.11 28,942 0.41
Deferred income tax expense on
unrealized foreign exchange
gains 3,576 0.05 10,095 0.14
Restructuring charges(4) 458 0.01 5,419 0.08
Asset impairments/net loss on
vessel sales 5,812 0.08 9,405 0.13
Adjustments to pension accruals
and stock-based
compensation(5) - - 18,102 0.25
Upfront payments related to
interest rate swap resets - - 92,672 1.30
Other - net(6) (2,598) (0.04) (6,232) (0.09)
Non-controlling interests'
share of items above (40,431) (0.57) (29,215) (0.41)
----------------------------------------------------------------------------
Total adjustments 60,197 0.85 61,981 0.87
----------------------------------------------------------------------------
Adjusted net loss attributable
to stockholders of Teekay (36,255) (0.51) (64,128) (0.90)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Fully diluted per share amounts.
(2) Reflects the unrealized gains or losses relating to the change in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes, including those included in equity
income (loss) from joint ventures, and the ineffective portion of
foreign currency forward contracts designated as hedges for accounting
purposes.
(3) Foreign currency exchange gains and losses primarily relate to the
Company's debt denominated in Euros and deferred tax liability
denominated in Norwegian Kroner. A substantial majority of the
Company's foreign currency exchange gains and losses are unrealized.
(4) Restructuring charges relate to crew changes, reflagging of certain
vessels, and global staffing changes.
(5) Relates to one-time pension retirement payment to the Company's former
President and Chief Executive Officer and accelerated timing of
accounting recognition of stock-based compensation expense.
(6) Relates to non-recurring adjustments to tax accruals.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY BALANCE SHEET AS AT JUNE 30, 2012
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Consolida-
tion
Teekay Teekay Teekay Teekay Adjust-
Offshore LNG Tankers Parent ments Total
---------------------------------------------------------------
ASSETS
Cash and cash
equivalents 179,462 114,916 18,554 352,805 - 665,737
Other current
assets 135,266 15,783 22,551 383,906 - 557,506
Restricted
cash
(current &
non-current) - 526,705 - 4,659 - 531,364
Vessels held
for sale 14,961 - - - - 14,961
Vessels and
equipment 2,446,287 1,980,370 1,275,672 1,494,930 - 7,197,259
Advances on
newbuilding
contracts 69,163 - - 375,010 - 444,173
Derivative
assets 4,457 162,472 - 772 - 167,701
Investment in
equity
accounted
investees - 374,320 3,148 66,018 (7,000) 436,486
Investment in
direct
financing
leases 41,177 406,549 - 20 - 447,746
Investment in
term loans - - 117,347 70,000 - 187,347
Other assets 30,369 39,387 13,742 126,276 - 209,774
Advances to
affiliates 7,848 24,362 20,702 (52,912) - -
Equity
investment
in
subsidiaries - - - 495,728 (495,728) -
Intangibles
and goodwill 145,698 145,482 - 4,041 - 295,221
---------------------------------------------------------------
TOTAL ASSETS 3,074,688 3,790,346 1,471,716 3,321,253 (502,728) 11,155,275
---------------------------------------------------------------
---------------------------------------------------------------
LIABILITIES
AND EQUITY
Accounts
payable and
accrued
liabilities 91,606 53,131 16,558 220,833 - 382,128
Advances from
affiliates 45,820 27,288 10,070 (83,178) - -
Current
portion of
long-term
debt 261,272 255,748 25,246 256,562 - 798,828
Long-term
debt 1,734,169 1,920,250 700,853 872,368 - 5,227,640
Long-term
debt -
variable
interest
entity - - - 230,450 - 230,450
Derivative
liabilities 310,088 326,347 35,470 57,039 - 728,944
In-process
revenue
contracts 120,463 - - 152,270 - 272,733
Other long-
term
liabilities 26,739 106,231 4,009 82,514 - 219,493
Redeemable
non-
controlling
interest 36,356 - - - - 36,356
Equity:
Non-
controlling
interests
(1) 40,384 29,712 - 193,102 1,656,212 1,919,410
Equity
attribut-
able to
stockholders
/unithold-
ers of
publicly-
listed
entities 407,791 1,071,639 679,510 1,339,293 (2,158,940) 1,339,293
---------------------------------------------------------------
TOTAL
LIABILITIES
AND EQUITY 3,074,688 3,790,346 1,471,716 3,321,253 (502,728) 11,155,275
---------------------------------------------------------------
---------------------------------------------------------------
NET DEBT(2) 1,815,979 1,534,377 707,545 1,001,916 - 5,059,817
---------------------------------------------------------------
---------------------------------------------------------------
(1) Non-controlling interests in the Teekay Offshore and Teekay LNG columns
represent the joint venture partners' share of joint venture net
assets. Non-controlling interest in the Consolidation Adjustments
column represents the public's share of the net assets of Teekay's
publicly-traded subsidiaries.
(2) Net debt represents current and long-term debt less cash and, if
applicable, current and long-term restricted cash.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY STATEMENT OF INCOME (LOSS) FOR THE THREE MONTHS ENDED JUNE 30, 2012
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Consolida-
tion
Teekay Teekay Teekay Teekay Adjust-
Offshore LNG Tankers Parent ments Total
---------------------------------------------------------
Revenues 251,151 96,354 51,040 132,870 (49,504) 481,911
---------------------------------------------------------
Voyage expenses 37,800 242 107 1,567 (540) 39,176
Vessel operating
expenses 70,080 20,104 20,922 61,250 - 172,356
Time-charter hire
expense 12,969 - 644 68,059 (50,181) 31,491
Depreciation and
amortization 50,003 24,673 18,047 22,345 - 115,068
General and
administrative 18,689 6,506 4,402 19,963 1,217 50,777
Loss on sale of
vessels and
equipment 3,269 - - - - 3,269
Restructuring
charges - - - 1,525 - 1,525
---------------------------------------------------------
Total operating
expenses 192,810 51,525 44,122 174,709 (49,504) 413,662
---------------------------------------------------------
Income (loss) from
vessel operations 58,341 44,829 6,918 (41,839) - 68,249
---------------------------------------------------------
Net interest
expense (12,368) (12,785) (6,643) (9,266) - (41,062)
Realized and
unrealized (loss)
gain
on derivative
instruments (60,317) (18,145) (3,895) (12,241) - (94,598)
Income tax recovery
(expense) 1,946 (133) - 36 - 1,849
Equity income
(loss) - 11,086 - (5,795) - 5,291
Equity in earnings
of subsidiaries
(1) - - - 15,771 (15,771) -
Foreign exchange
gain 888 13,927 - 3,020 - 17,835
Other - net (119) 481 (703) 430 - 89
---------------------------------------------------------
Net (loss) income (11,629) 39,260 (4,323) (49,884) (15,771) (42,347)
Less: Net (income)
loss attributable
to non-controlling
interests (2) (499) (1,572) - 2,610 (5,466) (4,927)
---------------------------------------------------------
Net (loss) income
attributable to
stockholders/
unitholders
of publicly-listed
entities (12,128) 37,688 (4,323) (47,274) (21,237) (47,274)
---------------------------------------------------------
---------------------------------------------------------
CFVO -
Consolidated(3)(4) 109,812 70,999 15,448 (24,445) - 171,814
CFVO - Equity
Investments(5) - 38,035 - (1,441) - 36,594
CFVO - Total 109,812 109,034 15,448 (25,886) - 208,408
---------------------------------------------------------
---------------------------------------------------------
(1) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(2) Net (income) loss attributable to non-controlling interests in the
Teekay Offshore and Teekay LNG columns represent the joint venture
partners' share of the net income (loss) of the respective joint
ventures. Net (income) loss attributable to non-controlling interest in
the Consolidation Adjustments column represents the public's share of
the net income (loss) of Teekay's publicly-traded subsidiaries.
(3) Cash flow from vessel operations (CFVO) represents income from vessel
operations before depreciation and amortization expense, amortization
of in-process revenue contracts, vessel write-downs, gains and losses
on the sale of vessels, adjustments for direct financing leases on a
cash basis, and unrealized gains and losses relating to derivatives,
but includes realized gains and losses on the settlement of foreign
currency forward contracts. CFVO - Consolidated represents CFVO from
vessels that are consolidated on the Company's financial statements.
Cash flow from vessel operations is a non-GAAP financial measure used
by certain investors to measure the financial performance of shipping
companies. Please see the Company's Web site at http://www.teekay.com/
for a reconciliation of this non-GAAP financial measure as used in this
release to the most directly comparable GAAP financial measure.
(4) In addition to Teekay Parent's cash flow from vessel operations, Teekay
Parent also receives cash dividends and distributions from its
publicly-traded subsidiaries. For the three months ended June 30, 2012,
Teekay Parent received cash dividends and distributions from these
subsidiaries totaling $39.2 million. The dividends and distributions
received by Teekay Parent include those made with respect to its
general partner interests in Teekay Offshore and Teekay LNG. Please
refer to Appendix D to this release for further details.
(5) Cash flow from vessel operations (CFVO) - Equity Investments represents
the Company's proportionate share of CFVO from its equity accounted
vessels and other investments. Please see the Company's Web site at
http://www.teekay.com/ for a reconciliation of this non-GAAP measure as
used in this release to the most directly comparable GAAP financial
measure.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY STATEMENT OF INCOME (LOSS) FOR THE SIX MONTHS ENDED JUNE 30, 2012
(in thousands of U.S. dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited)
Consolida-
tion
Teekay Teekay Teekay Teekay Adjust-
Offshore LNG Tankers Parent ments Total
---------------------------------------------------------
Revenues 495,749 195,570 105,902 267,245 (86,991) 977,475
---------------------------------------------------------
Voyage expenses 74,281 585 1,429 2,098 (580) 77,813
Vessel operating
expenses 141,087 40,635 42,071 115,764 - 339,557
Time-charter hire
expense 26,586 - 2,305 134,241 (87,662) 75,470
Depreciation and
amortization 99,614 49,306 36,038 44,724 - 229,682
General and
administrative 38,825 13,622 7,748 35,738 8,217 104,150
Loss (gain) on sale
of vessels and
equipment/asset
impairments 3,269 - - (197) - 3,072
Restructuring
charges - - - 1,525 - 1,525
---------------------------------------------------------
Total operating
expenses 383,662 104,148 89,591 333,893 (80,025) 831,269
---------------------------------------------------------
Income (loss) from
vessel operations 112,087 91,422 16,311 (66,648) (6,966) 146,206
---------------------------------------------------------
Net interest
expense (24,932) (24,651) (14,194) (17,539) - (81,316)
Realized and
unrealized loss
on derivative
instruments (44,078) (34,048) (4,974) (6,683) - (89,783)
Income tax recovery 461 128 - 4,828 - 5,417
Equity income
(loss) - 28,134 - (5,199) - 22,935
Equity in earnings
of subsidiaries
(1) - - - 38,907 (38,907) -
Foreign exchange
(loss) gain (1,870) 4,259 - (378) - 2,011
Other - net 1,306 695 (979) 1,410 - 2,432
---------------------------------------------------------
Net income (loss) 42,974 65,939 (3,836) (51,302) (45,873) 7,902
Less: Net (income)
loss attributable
to non-controlling
interests (2) (2,468) (3,520) - 5,094 (53,216) (54,110)
---------------------------------------------------------
Net income (loss)
attributable
to
stockholders/
unitholders
of publicly-listed
entities 40,506 62,419 (3,836) (46,208) (99,089) (46,208)
---------------------------------------------------------
---------------------------------------------------------
CFVO -
Consolidated(3)(4) 211,895 143,666 32,228 (31,009) (7,000) 349,780
CFVO - Equity
Investments(5) - 64,221 - (2,066) - 62,155
CFVO - Total 211,895 207,887 32,228 (33,075)(4) (7,000) 411,935
---------------------------------------------------------
---------------------------------------------------------
(1) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(2) Net (income) loss attributable to non-controlling interests in the
Teekay Offshore and Teekay LNG columns represent the joint venture
partners' share of the net income (loss) of the respective joint
ventures. Net (income) loss attributable to non-controlling interest in
the Consolidation Adjustments column represents the public's share of
the net income (loss) of Teekay's publicly-traded subsidiaries.
(3) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense,
vessel/goodwill write-downs, gains or losses on the sale of vessels,
adjustments for direct financing leases on a cash basis, and unrealized
gains and losses relating to derivatives, but includes realized gains
and losses on the settlement of foreign currency forward contracts.
Cash flow from vessel operations is a non-GAAP financial measure used
by certain investors to measure the financial performance of shipping
companies. Please see the Company's website at http://www.teekay.com/
for a reconciliation of this non-GAAP financial measure as used in this
release to the most directly comparable GAAP financial measure.
(4) In addition to Teekay Parent's cash flow from vessel operations, Teekay
Parent also receives cash dividends and distributions from its
publicly-traded subsidiaries. For the six months ended June 30, 2012,
Teekay Parent received cash dividends and distributions from these
subsidiaries totaling $78.5 million. The dividends and distributions
received by Teekay Parent include those made with respect to its
general partner interests in Teekay Offshore and Teekay LNG. Please
refer to Appendix D to this release for further details.
(5) Cash flow from vessel operations (CFVO) - Equity investments represents
the Company's proportionate share of CFVO from its equity accounted
vessels and other investments. Please see the Company's Web site at
http://www.teekay.com/ for a reconciliation of this non-GAAP measure as
used in this release to the most directly comparable GAAP measure.
TEEKAY CORPORATION
APPENDIX C - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT SUMMARY OPERATING RESULTS
FOR THE THREE MONTHS ENDED JUNE 30, 2012
(in thousands of U.S. dollars)
(unaudited)
Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to income (loss) from vessel operations as determined in accordance with GAAP, for Teekay Parent's primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent's financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Owned In-Chartered Teekay
Conventional Conventional Other Parent
Tankers Tankers(1) FPSOs (2) Total
-----------------------------------------------------
Revenues 7,713 30,330 80,002 14,825 132,870
Voyage expenses 740 924 - (97) 1,567
Vessel operating
expenses 1,963 3,931 54,368 988 61,250
Time-charter hire
expense - 51,753 5,367 10,939 68,059
Depreciation and
amortization 2,566 - 19,779 - 22,345
General and
administrative 728 1,860 9,464 7,911 19,963
Restructuring charges - - - 1,525 1,525
-----------------------------------------------------
Total operating
expenses 5,997 58,468 88,978 21,266 174,709
-----------------------------------------------------
Income (loss) from
vessel operations 1,716 (28,138) (8,976) (6,441) (41,839)
-----------------------------------------------------
Reconciliation of income (loss) from vessel operations to cash flow from
vessel operations
Income (loss) from
vessel operations 1,716 (28,138) (8,976) (6,441) (41,839)
Depreciation and
amortization 2,566 - 19,779 - 22,345
Amortization of in
process revenue
contracts
and other (69) - (14,167) - (14,236)
Unrealized (gains)
losses from the change
in fair
value of designated
foreign exchange
forward contracts (51) - 103 - 52
Realized (losses) gains
from the
settlements of non-
designated foreign
exchange forward
contracts/bunkers/FFAs (340) - 56 - (284)
Dropdown predecessor
cash flow(3) 9,517 - - - 9,517
-----------------------------------------------------
CASH FLOW FROM VESSEL
OPERATIONS(4) 13,339 (28,138) (3,205) (6,441) (24,445)
-----------------------------------------------------
-----------------------------------------------------
(1) Time-charter hire expense includes one-time $14.7 million charter
termination fee paid to Teekay Offshore.
(2) Results of two chartered-in LNG carriers owned by Teekay LNG and one
chartered-in FSO unit owned by Teekay Offshore and interest income
received from an investment in term loan.
(3) Represents cash flow from vessel operations (CFVO) relating to assets
owned by Teekay Parent prior to their acquisition by Teekay Tankers.
These historical financial results are now included in the historical
financial results of Teekay Tankers and therefore excluded from the
above income (loss) from vessel operations for Teekay Parent.
(4) Excludes CFVO from the Company's proportionate share of CFVO from its
equity accounted vessels and other investments.
TEEKAY CORPORATION
APPENDIX C - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT SUMMARY OPERATING RESULTS
FOR THE SIX MONTHS ENDED JUNE 30, 2012
(in thousands of U.S. dollars)
(unaudited)
Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to income from vessel operations as determined in accordance with GAAP, for Teekay Parent's primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent's financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
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Owned In-Chartered Teekay
Conventional Conventional Parent
Tankers Tankers(1) FPSOs Other (2) Total
----------------------------------------------------------
Revenues 15,910 70,713 150,910 29,712 267,245
Voyage expenses 518 1,924 - (344) 2,098
Vessel operating
expenses 4,806 8,865 100,443 1,650 115,764
Time-charter hire
expense - 101,752 10,613 21,876 134,241
Depreciation and
amortization 6,070 - 38,654 - 44,724
General and
administrative 1,456 4,044 18,928 11,310 35,738
Asset
impairments/net
(gain) loss on
vessel sales (197) - - - (197)
Restructuring
charges - - - 1,525 1,525
----------------------------------------------------------
Total operating
expenses 12,653 116,585 168,638 36,017 333,893
----------------------------------------------------------
Income (loss) from
vessel operations 3,257 (45,872) (17,728) (6,305) (66,648)
----------------------------------------------------------
Reconciliation of (loss) income from vessel operations to cash flow from
vessel operations
(Loss) income from
vessel operations 3,257 (45,872) (17,728) (6,305) (66,648)
Depreciation and
amortization 6,070 - 38,654 - 44,724
Asset
impairments/net
(gain) loss on
vessel sales (197) - - - (197)
Amortization of in
process revenue
contracts
and other (138) - (28,782) - (28,920)
Unrealized (gains)
losses from the
change in
fair value of
designated
foreign exchange
forward contracts (87) - 177 - 90
Realized gains
from the
settlements of
non-designated
foreign
exchange forward
contracts/bunkers/
FFAs (374) - 161 - (213)
Dropdown
predecessor cash
flow(3) 20,155 - - - 20,155
----------------------------------------------------------
CASH FLOW FROM
VESSEL
OPERATIONS(4) 28,686 (45,872) (7,518) (6,305) (31,009)
----------------------------------------------------------
----------------------------------------------------------
(1) Time-charter hire expense includes one-time $14.7 million charter
termination fee paid to Teekay Offshore.
(2) Results of two chartered-in LNG carriers owned by Teekay LNG and one
chartered-in FSO unit owned by Teekay Offshore, interest income
received from an investment in term loan and includes one-time $7.0
million success fee payment received from Teekay LNG upon the
acquisition of six LNG carriers in February 2012.
(3) Represents cash flow from vessel operations (CFVO) relating to assets
owned by Teekay Parent prior to their acquisition by Teekay Tankers.
These historical financial results are now included in the historical
financial results of Teekay Tankers and therefore excluded from the
above income (loss) from vessel operations for Teekay Parent.
(4) Excludes CFVO from the Company's proportionate share of CFVO from its
equity accounted vessels and other investments.
TEEKAY CORPORATION
APPENDIX D - SUPPLEMENTAL FINANCIAL INFORMATION
TEEKAY PARENT FREE CASH FLOW
(in thousands of U.S. dollars)
(unaudited)
Set forth below is an unaudited calculation of Teekay Parent free cash flow for the three months ended June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011, and June 30, 2011. The Company defines free cash flow, a non-GAAP financial measure, as cash flow from vessel operations attributed to its directly-owned and in-chartered assets, distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers), net of interest expense and drydock expenditures in the respective period. For a reconciliation of Teekay Parent cash flow from vessel operations for the three months ended June 30, 2012 to the most directly comparable financial measure under GAAP please refer to Appendix C to this release. For a reconciliation of Teekay Parent cash flow from vessel operations to the most directly comparable GAAP financial measure for the three months ended March 31, 2012, December 31, 2011, September 30, 2011, and June 30, 2011, please see the Company's website at www.teekay.com. Teekay Parent free cash flow, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.
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Three Months Ended
--------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
--------- --------- --------- --------- ---------
2012 2012 2011 2011 2011
--------- --------- --------- --------- ---------
Teekay Parent cash flow
from vessel
operations (1)
Owned Conventional
Tankers 13,339 15,347 18,090 13,690 17,488
In-Chartered
Conventional Tankers
(2) (28,138) (17,734) (34,957) (30,966) (25,684)
FPSOs (3,205) (4,313) 35,044 (5,501) (5,264)
Other (6,441) 136 (13,073) (9,959) (13,966)
--------------------------------------------------
Total (24,445) (6,564) 5,104 (32,736) (27,425)
Daughter company
distributions to
Teekay Parent (3)
Common shares/units (4)
Teekay LNG Partners 17,016 17,016 15,881 15,881 15,881
Teekay Offshore Partners 11,461 11,461 11,181 11,181 11,181
Teekay Tankers Ltd. (5) 2,307 2,578 1,772 2,417 3,384
--------------------------------------------------
Total 30,784 31,055 28,834 29,479 30,446
General partner interest
Teekay LNG Partners 5,524 5,524 3,470 3,176 3,176
Teekay Offshore Partners 2,849 2,782 2,488 2,237 2,237
--------------------------------------------------
Total 8,373 8,306 5,958 5,413 5,413
Total Teekay Parent cash
flow
before interest and dry
dock
expenditures 14,712 32,797 39,896 2,156 8,434
Less:
Net interest expense (6) (19,269) (19,504) (17,280) (16,920) (18,012)
Dry dock expenditures (129) (124) (3,659) (1,811) (3,040)
--------------------------------------------------
TOTAL TEEKAY PARENT
FREE CASH FLOW (4,686) 13,169 18,957 (16,575) (12,618)
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(1) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense,
vessel/goodwill write-downs, gains or losses on the sale of vessels,
adjustments for direct financing leases on a cash basis, and unrealized
gains and losses relating to derivatives, but includes realized gains
and losses on the settlement of foreign currency forward contracts.
Cash flow from vessel operations is a non-GAAP financial measure used
by certain investors to measure the financial performance of shipping
companies. Further details for the quarter ended June 30, 2012,
including a reconciliation of this non-GAAP financial measure to the
most directly comparable GAAP financial measure, please refer to
Appendix C to this release; for a reconciliation of this non-GAAP
financial measure to the most directly comparable GAAP financial
measure for the quarters ended March 31, 2012 and December 31,
September 30 and June 30, 2011, please refer to the Company's website
at http://www.teekay.com/.
(2) Includes one-time charter termination fee of $14.7 million paid to
Teekay Offshore during the three months ended June 30, 2012.
(3) Cash dividend and distribution cash flows are shown on an accrual basis
for dividends and distributions declared for the respective period.
(4) 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 company and period as follows:
Three Months Ended
----------------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
----------------------------------------------------------
2012 2012 2011 2011 2011
----------------------------------------------------------
Teekay LNG
Partners
Distribution per
common unit $ 0.675 $ 0.675 $ 0.630 $ 0.630 $ 0.630
Common units
owned by
Teekay Parent 25,208,274 25,208,274 25,208,274 25,208,274 25,208,274
------------------------------------------------------------
Total
distribution $17,015,585 $17,015,585 $15,881,213 $15,881,213 $15,881,213
Teekay Offshore
Partners
Distribution per
common unit $ 0.5125 $ 0.5125 $ 0.500 $ 0.500 $ 0.500
Common units
owned by
Teekay Parent 22,362,814 22,362,814 22,362,814 22,362,814 22,362,814
------------------------------------------------------------
Total
distribution $11,460,942 $11,460,942 $11,181,407 $11,181,407 $11,181,407
Teekay Tankers
Ltd.
Dividend per
share $ 0.11 $ 0.16 $ 0.11 $ 0.15 $ 0.21
Shares owned by
Teekay Parent
(3) 20,976,530 16,112,244 16,112,244 16,112,244 16,112,244
------------------------------------------------------------
Total dividend $ 2,307,418 $ 2,577,959 $ 1,772,347 $ 2,416,837 $ 3,383,571
(5) Includes Class A and Class B shareholdings.
(6) Net interest expense includes realized gains and losses on interest
rate swaps. For the three months ended June 30, 2012, net interest
expense includes $6.3 million related to 13 conventional tankers prior
to their sale to Teekay Tankers in June 2012. For the three months
ended September 30, 2011, net interest expense excludes a realized loss
of $34.4 million related to early termination of an interest rate swap
agreement.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: tanker market fundamentals, including the balance of supply and demand in the tanker market and the impact of seasonal factors on spot tanker charter rates; the estimated cost and timing of delivery of FPSO and shuttle tanker newbuildings/conversions in progress and the effect on the Company's future cash flows and profitability; the estimated timing of commencement of new charter contracts upon delivery of FPSO and shuttle tanker newbuildings/conversions in progress; the potential sale of the Voyageur Spirit FPSO from Teekay Parent to Teekay Offshore; the impact on Teekay Parent's cash flows from its GP and LP ownership interests in Teekay LNG and Teekay Offshore resulting from acquisitions and delivery of assets by Teekay LNG and Teekay Offshore; the estimated timing for the completion of the Company's takeover of technical management of the MALT LNG Carriers; the expected timing of the commencement of the new charter contract for the Magellan Spirit LNG carrier; expected timing of redeliveries of vessels chartered-in by Teekay Parent; expected timing for commencement of cost savings related to the Company's ship management joint venture with Anglo-Eastern; the Company's future capital expenditure commitments and the debt financings that the Company expects to obtain for its remaining unfinanced capital expenditure commitments; and fundamentals of the offshore and LNG industries and the Company's ability to complete future growth projects and acquisitions.
The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs and FPSOs; decreases in oil production by or increased operating expenses for FPSO units; trends in prevailing charter rates for shuttle tanker and FPSO contract renewals; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts or complete existing contract negotiations; changes affecting the offshore tanker market; shipyard production delays and cost overruns; changes in the Company's expenses; the Company's future capital expenditure requirements and the inability to secure financing for such requirements; the inability of the Company to complete vessel sale transactions to its public company subsidiaries or to third parties; factors impeding the expected transfer of technical management of the MALT LNG Carriers; factors impeding or preventing the establishment of the Company's ship management joint venture with Anglo-Eastern; conditions in the United States capital markets; and other factors discussed in Teekay's filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2011. 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: Teekay Corporation Kent Alekson Investor Relations Enquiries +1 (604) 844-6654 www.teekay.com
Source: Teekay Corporation
