6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

Date of Report: November 6, 2014

Commission file number 1- 12874

 

 

TEEKAY CORPORATION

(Exact name of Registrant as specified in its charter)

 

 

4th Floor, Belvedere Building

69 Pitts Bay Road

Hamilton, HM 08, Bermuda

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x            Form 40- F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Yes  ¨            No   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Yes  ¨            No   x

 

 

 


Item 1 — Information Contained in this Form 6-K Report

Attached as Exhibit 1 is a copy of an announcement of Teekay Corporation dated November 6, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    TEEKAY CORPORATION
Date: November 6, 2014     By:  

/s/ Vincent Lok

      Vincent Lok
      Executive Vice President and Chief Financial Officer
      (Principal Financial and Accounting Officer)


LOGO   

TEEKAY CORPORATION

4th Floor, Belvedere Building, 69 Pitts Bay Road

Hamilton, HM 08, Bermuda

EARNINGS RELEASE

 

 

TEEKAY CORPORATION

REPORTS THIRD QUARTER 2014 RESULTS

 

 

Highlights

 

 

Third quarter 2014 total cash flow from vessel operations of $251.5 million, an increase of 29 percent from the same period of the prior year.

 

 

Third quarter 2014 adjusted net loss attributable to stockholders of Teekay of $12.6 million, or $0.17 per share (excluding specific items which increased GAAP net income by $15.0 million, or $0.20 per share).

 

 

In September 2014, Teekay announced intention to increase its dividend by 75-80 percent, with future increases primarily linked to growing cash flows from its two MLP subsidiaries.

 

 

In September 2014, the Petrojarl Knarr FPSO was offered for sale to Teekay Offshore; FPSO unit arrived in Norway and is anticipated to commence its charter contract in December 2014.

 

 

Total consolidated liquidity of approximately $1.5 billion as at September 30, 2014.

Hamilton, Bermuda, November 6, 2014 - Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported adjusted net loss attributable to its stockholders(1) of $12.6 million, or $0.17 per share, for the quarter ended September 30, 2014, compared to adjusted net loss attributable to its stockholders of $36.0 million, or $0.51 per share, for the same period of the prior year. Adjusted net loss attributable to its stockholders excludes a number of specific items that had the net effect of increasing GAAP net income by $15.0 million, or $0.20 per share, for the three months ended September 30, 2014 and increasing GAAP net loss by $13.1 million, or $0.18 per share, for the same period of the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net income attributable to its stockholders of $2.4 million, or $0.03 per share, for the quarter ended September 30, 2014, compared to net loss attributable to its stockholders of $49.1 million, or $0.69 per share, for the same period of the prior year. Net revenues(2) for the third quarter of 2014 increased to $456.0 million, compared to $426.8 million for the same period of the prior year.

For the nine months ended September 30, 2014, the Company reported adjusted net loss attributable to its stockholders(1) of $29.2 million, or $0.40 per share, compared to adjusted net loss attributable to its stockholders of $81.0 million, or $1.15 per share, for the same period of the prior year. Adjusted net loss attributable to its stockholders excludes a number of specific items that had the net effect of increasing GAAP net loss by $11.9 million, or $0.17 per share, for the nine months ended September 30, 2014 and decreasing GAAP net loss by $37.1 million, or $0.53 per share, for the same period of the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net loss attributable to its stockholders of $41.1 million, or $0.57 per share, for the nine months ended September 30, 2014, compared to net loss attributable to its stockholders of $43.9 million, or $0.62 per share, for the same period of the prior year. Net revenues(2) for the nine months ended September 30, 2014 increased to $1,346.3 million, compared to $1,256.0 million for the same period of the prior year.

On October 3, 2014, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended September 30, 2014. The cash dividend was paid on October 31, 2014 to all shareholders of record on October 17, 2014.

 

(1)

Adjusted net loss attributable to stockholders of Teekay is a non-GAAP financial measure. Please refer to Appendix A to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable financial measure under United States generally accepted accounting principles (GAAP) and for information about specific items affecting net income that are typically excluded by securities analysts in their published estimates of the Company’s financial results.

(2)

Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable financial measure under GAAP.

 

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“While the third quarter 2014 results improved from the previous quarter, our results were lower than anticipated due to lower than expected production on the Foinaven FPSO relating to subsea issues, and the delayed start-up of the Banff FPSO and the Hi-Load DP unit charter contract,” commented Peter Evensen, Teekay’s President and Chief Executive Officer.

“We recently announced our new dividend policy which represents the next step in Teekay’s transformation into a pure-play owner of two general partnerships,” Mr. Evensen continued. “Based on the increase in cash flows we expect to receive from our general partner and limited partner ownership interests in Teekay Offshore following the proposed dropdown of the Knarr FPSO, we intend to raise Teekay’s annualized cash dividend to between $2.20 and $2.30 per share, representing an increase of approximately 75 to 80 percent. In addition, with a project backlog of approximately $5 billion of known growth capital expenditures at Teekay Offshore and Teekay LNG, we expect that Teekay’s dividend will continue to grow by approximately 20 percent per annum for at least the three years following the initial dividend increase.”

Mr. Evensen added, “The proposed dropdown of the Knarr FPSO is an important milestone in Teekay’s transformation because it will provide for significant deleveraging of Teekay Parent’s balance sheet. The Knarr FPSO, which has now been offered to Teekay Offshore and is currently being reviewed by Teekay Offshore’s Conflicts Committee, is anticipated to achieve first oil in December of this year.”

 

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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.

 

     Three Months Ended September 30, 2014  
     (unaudited)  

(in thousands of U.S. dollars)

   Teekay
Offshore
    Teekay LNG     Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Net revenues(1)

     229,820       100,328       50,598       102,027        (26,773     456,000  

Vessel operating expense

     (91,638     (23,538     (22,935     (67,975     —         (206,086

Time-charter hire expense

     (7,085     —         (6,309     (31,932     28,428       (16,898

Depreciation and amortization

     (49,759     (23,309     (12,451     (21,316     —         (106,835

CFVO - Consolidated(2)(3)(4)

     114,630       71,455       18,464       (14,003     1,530       192,076  

CFVO - Equity Investments(5)

     5,506       51,829       2,695       943        (1,530     59,443  

CFVO - Total

     120,136       123,284       21,159       (13,060     —         251,519  
     Three Months Ended September 30, 2013  
     (unaudited)  

(in thousands of U.S. dollars)

   Teekay
Offshore
    Teekay LNG     Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Net revenues(1)

     207,347       100,319       38,996       104,142        (24,031     426,773  

Vessel operating expense

     (89,788     (24,655     (21,859     (81,277     —         (217,579

Time-charter hire expense

     (14,142     —         (1,216     (33,389     23,261       (25,486

Depreciation and amortization

     (51,920     (24,440     (11,935     (20,819     —         (109,114

CFVO - Consolidated(2)(3)(4)

     87,469       73,291       12,604       (34,531     —         138,833  

CFVO - Equity Investments(5)

     4,852       51,870       1,416       (1,771     —         56,367  

CFVO - Total

     92,321       125,161       14,020       (36,302     —         195,200  

 

(1)

Net revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(2)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please refer to Appendix C and Appendix E of this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(3)

Excludes CFVO relating to assets acquired from Teekay Parent for the periods prior to their acquisition by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as those results are included in the historical results for Teekay Parent.

(4)

In addition to CFVO from directly owned vessels, Teekay Parent also receives cash dividends and distributions from its daughter public companies. For the three months ended September 30, 2014 and 2013, Teekay Parent received dividends and distributions from Teekay LNG, Teekay Offshore and Teekay Tankers totaling $43.8 million and $40.1 million, respectively. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(5)

CFVO – Equity Investments represents the Company’s proportionate share of CFVO from its equity-accounted vessels and other investments. Please refer to Appendix E of this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

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Teekay Offshore Partners L.P.

Teekay Offshore is an international provider of marine transportation, oil production, storage services and floating accommodation to the offshore oil industry through its fleet of 33 shuttle tankers (including two charter-in vessels and one vessel currently in lay-up as a candidate for conversion to an offshore unit), six floating production, storage and offloading (FPSO) units (including one committed FPSO conversion unit), six floating storage and offtake (FSO) units (excluding one existing shuttle tanker scheduled to commence conversion to an FSO unit following expiry of its current charter contract in 2015), 10 long-haul towing and anchor handling vessels (including six vessels Teekay Offshore has agreed to acquire between the fourth quarter of 2014 and first quarter of 2015 and four newbuildings scheduled to deliver during 2016), three floating accommodation unit newbuildings, one Hi-Load Dynamic Positioning (DP) unit and four conventional oil tankers. Teekay Offshore’s interests in these vessels range from 50 to 100 percent. Teekay Offshore also has the right to participate in certain other FPSO and vessel opportunities pursuant to the omnibus agreement with Teekay. Teekay Parent currently owns a 29.2 percent interest in Teekay Offshore (including the 2 percent sole general partner interest).

For the third quarter of 2014, Teekay Offshore’s quarterly distribution was $0.5384 per common unit. The cash distribution to be received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totaled $17.7 million for the third quarter of 2014, as detailed in Appendix D to this release.

Cash flow from vessel operations from Teekay Offshore increased to $120.1 million in the third quarter of 2014, from $92.3 million in the same period of the prior year. The increase was primarily due to the contributions from the Voyageur Spirit FPSO unit following the commencement of its time-charter in August 2013, the three BG shuttle tanker newbuildings following commencement of their respective time-charters in August and November 2013 and January 2014 and the Suksan Salamander FSO following commencement of its time-charter in August 2014. These increases were partially offset by the lay-up and sale of older shuttle and conventional tankers during 2013 and 2014 as their related charter contracts expired or terminated and the scheduled drydocking of the Navion Saga FSO during the third quarter of 2014.

The results for the third quarter of 2014 were negatively impacted by the delayed start-up of the Hi-Load DP unit charter contract. The Hi-Load DP unit continues to undergo operational testing, and related delays in commencement of operations may affect previously anticipated cash flow from the unit. Upon successful completion of the testing, the unit is expected to commence its time-charter contract with Petrobras in Brazil.

In October 2014, Teekay Offshore, through its 50/50 joint venture with Odebrecht Oil & Gas S.A., signed a letter of intent with Petroleo Brasileiro SA (Petrobras) to provide an FPSO unit for the Libra field located in the Santos Basin offshore Brazil. The contract, which is expected to be finalized in the fourth quarter of 2014, will be serviced by a new FPSO unit converted from Teekay Offshore’s 1995-built shuttle tanker, the Navion Norvegia. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and is scheduled to commence operations in early-2017 under a 12-year firm period fixed-rate contract with Petrobras. The FPSO conversion is expected to be completed for a total fully built-up cost of approximately $1 billion.

In late-October 2014, Teekay Offshore, through its wholly-owned subsidiary ALP Maritime Services B.V. (ALP), agreed to acquire six modern on-the-water long-distance towing and anchor handling vessels for approximately $220 million. The vessels to be acquired were built between 2006 and 2010 and are all equipped with dynamic positioning (DP) capabilities. Teekay Offshore expects to take delivery of the six vessels during the fourth quarter of 2014 and the first quarter of 2015. Including these vessels, along with ALP’s four state-of-the-art long-distance towing and anchor handling newbuildings scheduled to deliver in 2016, ALP will become the world’s largest owner and operator of DP towing and anchor handling vessels. All ten vessels will be capable of long-distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units, including FPSO units, floating liquefied natural gas (FLNG) units and floating drill rigs. The acquisition remains subject to customary closing conditions, including the completion of vessel inspections and documentation.

Teekay LNG Partners L.P.

Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services, generally under long-term, fixed-rate charter contracts, through its current fleet of 44 LNG carriers (including one LNG regasification unit and 15 newbuildings under construction), 26 LPG/Multigas carriers (including nine newbuildings under construction) and eight conventional tankers. Teekay LNG’s interests in these vessels range from 20 to 100 percent. In addition, Teekay LNG, through its 50/50 LPG joint venture with Exmar NV (Exmar LPG BVBA), charters-in four LPG carriers. Teekay Parent currently owns a 34.0 percent interest in Teekay LNG (including the 2 percent sole general partner interest).

 

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For the third quarter of 2014, Teekay LNG’s quarterly distribution was $0.6918 per common unit. The cash distribution to be received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay LNG totaled $25.3 million for the third quarter of 2014, as detailed in Appendix D to this release.

Teekay LNG’s total cash flow from vessel operations, including cash flows from equity-accounted vessels, was $123.3 million in the third quarter of 2014, compared to $125.2 million in the same period of the prior year. The decrease was primarily due to the sale of three 2000 and 2001-built conventional tankers and four older LPG carriers in Exmar LPG BVBA in 2013 and 2014 and the scheduled dry docking of one LNG carrier and two LPG carriers in Exmar LPG BVBA during the third quarter of 2014, partially offset by the acquisitions of, and contributions from, the two Awilco LNG carriers in late-2013 and higher revenues from Exmar LPG BVBA as a result of three newbuilding deliveries in 2014.

In late-October 2014, Teekay LNG agreed to acquire a 2003-built 10,200 cubic meter (cbm) LPG carrier, the Norgas Napa, from I.M. Skaugen SE (Skaugen) for approximately $27 million. Teekay LNG expects to take delivery of the vessel in mid-November 2014. Upon delivery, Skaugen will bareboat-charter the vessel back for a period of five-years at a fixed rate plus a profit share component based on actual earnings of the vessel, which is trading in Skaugen’s Norgas pool.

Teekay Tankers Ltd.

Teekay Tankers currently owns a fleet of 28 vessels, including 11 Aframax tankers, 10 Suezmax tankers, three Long Range 2 (LR2) product tankers, three Medium-Range (MR) product tankers and a 50 percent interest in a Very Large Crude Carrier (VLCC). In addition, Teekay Tankers has contracted to charter-in six Aframax and four LR2 product tankers. Of the 38 vessels, 12 are employed on fixed-rate time-charters, generally ranging from one to three years in initial duration, with the remaining vessels trading in spot tanker pools. In addition, Teekay Tankers owns a minority interest in Tanker Investments Ltd. (TIL) (OSLO: TIL), which currently owns a fleet of 14 modern tankers. Based on its current ownership of Teekay Tankers Class A common stock and its ownership of 100 percent of the outstanding Class B stock, Teekay Parent currently owns a 28.7 percent economic interest in and has voting control of Teekay Tankers.

For the third quarter of 2014, Teekay Tankers declared a dividend of $0.03 per share. Based on its ownership of Teekay Tankers Class A and Class B shares, the dividend paid to Teekay Parent totaled $0.8 million for the third quarter of 2014.

Cash flow from vessel operations from Teekay Tankers increased to $21.2 million in the third quarter of 2014, from $14.0 million in the same period of the prior year. The increase is primarily due to stronger average spot tanker rates in the third quarter of 2014 compared to the same period in the prior year, an increase in fleet size due to the addition of six in-chartered vessels during 2014 and higher equity income as a result of commercial and technical management fees earned through Teekay Tankers’ 50 percent interest in the conventional tanker commercial management and technical management operations acquired from Teekay on August 1, 2014 (Teekay Operations).

In October 2014, Teekay Tankers secured time charter-in contracts for two additional Aframax vessels, which increased Teekay Tankers’ total time charter-in fleet to ten vessels. The new time charter-in contracts have an average daily rate of $18,000 and firm contract periods of six months to 33 months, with extension options.

Teekay Parent

In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns five FPSO units and one VLCC vessel. As at November 1, 2014, Teekay Parent also had seven charter-in conventional tankers (including four Aframax tankers owned by Teekay Offshore), two charter-in LNG carriers owned by Teekay LNG, and three charter-in FSOs and two shuttle tankers owned by Teekay Offshore.

For the third quarter of 2014, Teekay Parent generated negative cash flow from vessel operations of $13.1 million, compared to negative cash flow from vessel operations of $36.3 million in the same period of the prior year. The reduction in negative cash flow is primarily due to the Banff FPSO recommencing operations under its time-charter contract in July 2014 following a storm event in late-2011, the re-delivery of several in-chartered tankers over the past year and higher spot tanker rates.

In July 2014, repairs to the gas compressors on the Foinaven FPSO were completed and the unit was available to produce at its maximum capacity. However, due to issues with the subsea flow lines, which are the responsibility of the charterer, the field was unable to produce at maximum capacity. As a result, the Foinaven FPSO is expected to generate lower revenues until these issues are resolved by the charterer.

 

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In late-September, Teekay Parent announced a new dividend policy under which the Company’s future dividend payments will be primarily linked to cash flows received from the Company’s general partnership (GP) and limited partnership (LP) interests in its two master limited partnerships, Teekay LNG and Teekay Offshore, together with other dividends received, after deductions for parent company level corporate general and administrative expenses and any reserves determined to be required by the Company’s Board of Directors. The new dividend policy is expected to take effect for the quarter immediately following the completion of the sale of the Petrojarl Knarr FPSO unit to Teekay Offshore.

In late-June 2014, Teekay Parent took delivery of the Petrojarl Knarr FPSO newbuilding in South Korea and the unit arrived in Norway in mid-September 2014. Following installation and offshore testing on the Knarr field, the unit is anticipated to commence its ten-year charter contract with BG Group in December 2014. In September 2014, Teekay Parent formally offered to sell the Petrojarl Knarr FPSO to Teekay Offshore for its fully built-up cost of approximately $1.16 billion. The offer is currently being reviewed by the Conflicts Committee of Teekay Offshore’s Board of Directors. Once approved by the Conflicts Committee and Teekay Offshore’s Board of Directors, the sale will remain subject to the Petrojarl Knarr FPSO achieving first oil.

 

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Fleet List

The following table summarizes Teekay’s consolidated fleet of 192 vessels as at November 1, 2014, including chartered-in vessels and vessels under construction but excluding vessels managed for third parties:

 

     Number of Vessels(1)  
     Owned
Vessels
     Chartered-in
Vessels
     Newbuildings /
Conversions
     Total  

Teekay Parent Fleet (2)(3)

           

Aframax Tankers (4)

     —           2        —           2  

VLCC Tanker

     1        —           —           1  

MR Product Tanker

     —           1        —           1  

FPSO Units

     4        —           1        5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Parent Fleet

     5        3        1        9  
  

 

 

    

 

 

    

 

 

    

 

 

 

Teekay Offshore Fleet (5)

     53        2        8        63  

Teekay LNG Fleet

     54        4        24        82  

Teekay Tankers Fleet

     28        10        —           38  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Consolidated Fleet

     140        19        33        192  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Ownership interests in these vessels range from 20 percent to 100 percent.

(2)

Excludes two LNG carriers chartered-in from Teekay LNG.

(3)

Excludes two shuttle tankers and three FSO units chartered-in from Teekay Offshore.

(4)

Excludes four Aframax tankers chartered-in from Teekay Offshore.

(5)

Owned Vessels includes six long-distance towing and anchor-handling vessels that Teekay Offshore agreed to acquire in October 2014 and which are expected to deliver during the fourth quarter of 2014 and first quarter of 2015.

 

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Liquidity

As at September 30, 2014, the Company had consolidated liquidity of $1.5 billion (consisting of $705.9 million of cash and cash equivalents and $777.1 million of undrawn revolving credit facilities), of which $469.9 million of liquidity (consisting of $337.5 million cash and cash equivalents and $132.4 million of undrawn revolving credit facilities) is attributable to Teekay Parent.

Conference Call

The Company plans to host a conference call on Thursday, November 6, 2014 at 11:00 a.m. (ET) to discuss its results for the third quarter of 2014. An accompanying investor presentation will be available on Teekay’s website at www.teekay.com prior to the start of the call. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:

 

 

By dialing (800) 499-4035 or (416) 204-9269, if outside North America, and quoting conference ID code 7001692.

 

 

By accessing the webcast, which will be available on Teekay’s website at www.teekay.com (the archive will remain on the website for a period of 30 days).

The conference call will be recorded and available until Thursday, November 13, 2014. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 7001692.

About Teekay

Teekay Corporation is a portfolio manager and project developer in the marine midstream space that owns a 2 percent general partner interest, all of the outstanding incentive distributions rights and a portion of the outstanding limited partner interests in Teekay LNG Partners L.P. (NYSE:TGP) and Teekay Offshore Partners L.P. (NYSE:TOO). In addition, Teekay has a controlling ownership interest in Teekay Tankers Ltd. (NYSE:TNK) and a fleet of directly-owned vessels. The combined Teekay entities manage and operate consolidated assets of over $12 billion, comprised of over 190 liquefied gas, offshore, and conventional tanker assets. With offices in 15 countries and approximately 6,700 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”.

For Investor Relations enquiries contact:

Ryan Hamilton

Tel: +1 (604) 844-6654

Website: www.teekay.com

 

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TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands of U.S. dollars, except share and per share data)

 

    Three Months Ended     Nine Months Ended  
    September 30,
2014
    June 30,
2014
    September 30,
2013
    September 30,
2014
    September 30,
2013
 
    (unaudited)     (unaudited)     (unaudited)     (unaudited)     (unaudited)  

REVENUES (1)

    490,183       452,254       454,795       1,448,931       1,336,539  

Voyage expenses

    (34,183     (33,439     (28,022     (102,634     (80,491

Vessel operating expenses (1)(2)

    (206,086     (201,714     (217,579     (608,986     (601,021

Time-charter hire expense

    (16,898     (9,714     (25,486     (42,904     (79,482

Depreciation and amortization

    (106,835     (103,373     (109,114     (313,666     (321,377

General and administrative (2)

    (31,585     (36,945     (31,932     (106,408     (106,598

Asset impairments (3)

    (4,759     —         (57,502     (4,759     (57,502

Loan loss recoveries (provision) (4)

    —         2,521       (15,344     2,521       (25,551

Gain on sale of vessels and equipment

    1,217       9,615       726       10,670       2,035  

Restructuring charges

    (2,665     244       (461     (3,060     (4,304
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

    88,389       79,449       (29,919     279,705       62,248  

Interest expense (2)

    (52,206     (49,656     (45,817     (151,195     (133,014

Interest income (2)

    2,786       793       1,543       5,362       4,579  

Realized and unrealized (loss) gain on derivative instruments (2)

    (5,792     (75,331     (26,707     (128,371     15,539  

Equity income (5)

    39,932       35,271       26,753       102,697       101,440  

Income tax (expense) recovery

    (3,111     (3,193     662       (9,102     (3,711

Foreign exchange gain (loss)

    19,497       (2,046     (11,837     16,557       (8,970

Other (loss) income - net

    (1,671     (734     625       5,846       4,481  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    87,824       (15,447     (84,697     121,499       42,592  

Less: Net (income) loss attributable to non-controlling interests

    (85,450     (27,540     35,593       (162,600     (86,465
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to stockholders of Teekay Corporation

    2,374       (42,987     (49,104     (41,101     (43,873
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per common share of Teekay

         

- Basic

  $ 0.03     ($ 0.60   ($ 0.69   ($ 0.57   ($ 0.62

- Diluted

  $ 0.03     ($ 0.60   ($ 0.69   ($ 0.57   ($ 0.62
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of common shares outstanding

         

- Basic

    72,393,072       72,036,526       70,755,282       71,925,307       70,348,872  

- Diluted

    73,736,393       72,036,526       70,755,282       71,925,307       70,348,872  

 

(1)

The costs of business development and engineering studies relating to North Sea FPSO and FSO projects that the Company is pursuing are substantially reimbursable from customers upon completion. For the three and nine months ended September 30, 2014, $0.5 million and $2.6 million of costs were recognized. For the three and nine months ended September 30, 2013, $17.5 million of revenues and $20.1 million of costs were recognized upon completion of two North Sea FPSO studies, and $20.3 million of revenues and $22.7 million of costs were recognized upon completion of three North Sea FPSO studies, respectively.

(2)

Realized and unrealized (losses) gains related to derivative instruments that are not designated as hedges for accounting purposes are included as a separate line item in the statements of income (loss). The realized (losses) gain relate to the amounts the Company actually received or paid to settle such derivative instruments and the unrealized (losses) gains relate to the change in fair value of such derivative instruments, as detailed in the table below:

 

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     Three Months Ended     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2014     2014     2013     2014     2013  

Realized (losses) gains relating to:

          

Interest rate swaps

     (32,106     (30,755     (30,254     (92,352     (91,472

Termination of interest rate swap agreements

     —         —         (31,798     1,000       (35,985

Foreign currency forward contracts

     (434     110       152       (1,608     (1,333
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (32,540     (30,645     (61,900     (92,960     (128,790
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unrealized gains (losses) relating to:

          

Interest rate swaps

     31,560       (39,096     32,542       (32,934     148,657  

Foreign currency forward contracts

     (3,897     (1,926     2,651       (2,772     (4,328

Stock purchase warrants

     (915     (3,664     —         295       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     26,748       (44,686     35,193       (35,411     144,329  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total realized and unrealized (losses) gains on non-designated derivative instruments

     (5,792     (75,331     (26,707     (128,371     15,539  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(3)

The Company recognized asset impairments of $4.8 million for the three and nine months ended September 30, 2014 related to the impairment of one 1990s-built shuttle tanker owned by Teekay Offshore. The impairment was the result of the current contract expiring in December 2014 which is expected to be re-chartered at a lower rate. Asset impairments of $57.5 million for the three and nine months ended September 30, 2013 include the impairment of four shuttle tankers owned by Teekay Offshore, including the impairment of $37.2 million related to two shuttle tankers which Teekay Offshore owns through a 50 percent-owned consolidated subsidiary. The impairments were the result of the re-contracting of two of the vessels at lower rates than expected during the third quarter of 2013, the cancellation of a short-term contract in September 2013 and a change in expectations for a contract renewal for a shuttle tanker operating in Brazil.

(4)

The Company recovered $2.5 million for the three months ended June 30, 2014, related to a receivable for an FPSO front-end engineering and design study (FEED) completed in 2013, which was previously provided for. The Company also recognized $11.5 million and $21.7 million of allowances, respectively, for the three and nine months ended September 30, 2013, in relation to its investments in three term loans. These loan loss provisions were reversed later in 2013.

(5)

The Company’s proportionate share of items within equity income as identified in Appendix A of this release, is as detailed in the table below. By excluding these items from equity income, the resulting adjusted equity income is a normalized amount that can be used to evaluate the financial performance of the Company’s equity accounted investments.

 

     Three Months Ended     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2014     2014     2013     2014     2013  

Equity income

     39,932       35,271       26,753       102,697       101,440  

Proportionate share of unrealized (gains) losses on derivative instruments

     (6,113     1,990       (1,707     (3,214     (24,256

Dilution gain on share issuance by TIL

     —         —         —         (4,108     —    

Other(i)

     (8,117     (9,772     4,100       (16,923     4,100  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity income adjusted for items in Appendix A

     25,702       27,489       29,146       78,452       81,284  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(i)

Includes gains on sale of vessels in Exmar LPG BVBA joint venture during 2014 and restructuring accruals and loan loss provision in Sevan Marine ASA during 2013.

 

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TEEKAY CORPORATION

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

 

 

     As at September 30,
2014

(unaudited)
     As at June 30,
2014
(unaudited)
     As at December 31
2013

(unaudited)
 

ASSETS

        

Cash and cash equivalents

     705,896        748,900        614,660  

Other current assets

     513,739        643,471        622,771  

Restricted cash – current

     3,142        3,935        4,748  

Restricted cash – long-term

     498,537        499,108        497,984  

Assets held for sale(1)

     6,758        —          176,247  

Vessels and equipment

     6,377,906        6,424,695        6,554,820  

Advances on newbuilding contracts and conversion costs

     1,496,349        1,403,850        796,324  

Derivative assets

     137,411        131,983        92,837  

Investment in equity accounted investees

     854,669        807,700        690,309  

Investment in term loans

     —          —          211,579  

Investment in direct financing leases

     767,934        774,026        727,262  

Other assets

     481,648        348,314        291,723  

Intangible assets

     97,886        101,157        107,898  

Goodwill

     168,572        168,572        166,539  
  

 

 

    

 

 

    

 

 

 

Total assets

     12,110,447        12,055,711        11,555,701  
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

        

Accounts payable and accrued liabilities

     526,016        571,979        565,239  

Liabilities associated with assets held for sale(1)

     —          —          168,007  

Current portion of long-term debt

     736,285        721,317        1,028,093  

Long-term debt

     6,523,719        6,576,224        5,679,706  

Derivative liabilities

     562,064        549,515        443,569  

In-process revenue contracts

     183,299        159,816        179,852  

Other long-term liabilities

     342,802        367,698        271,621  

Redeemable non-controlling interest

     17,286        15,149        16,564  

Equity:

        

Non-controlling interests

     2,117,953        2,009,585        2,071,262  

Stockholders of Teekay

     1,101,023        1,084,428        1,131,788  
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

     12,110,447        12,055,711        11,555,701  
  

 

 

    

 

 

    

 

 

 

 

(1)

In connection with the expected sale of a shuttle tanker to Teekay Offshore’s 50/50 joint venture with Odebrecht for conversion to an FPSO unit, which is expected to commence a 12-year contract in early-2017, the vessel and equipment related to the vessel were classified as “Assets held for sale” as at September 30, 2014. In connection with the 2014 sale of four conventional tanker owning companies to TIL, the vessels and equipment, long-term debt and working capital related to the four vessel-owning companies were classified as “Assets held for sale” and “Liabilities associated with assets held for sale” as at December 31, 2013.

 

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TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

 

 

     Nine Months Ended
September 30
 
     2014
(unaudited)
    2013
(unaudited)
 

Cash and cash equivalents provided by (used for)

    

OPERATING ACTIVITIES

    
  

 

 

   

 

 

 

Net operating cash flow

     291,163       95,027  
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Net proceeds from long-term debt

     2,095,834       1,718,226  

Scheduled repayments of long-term debt

     (691,861     (211,424

Prepayments of long-term debt

     (786,890     (823,170

(Increase) decrease in restricted cash

     (565     31,042  

Net proceeds from equity issuances of subsidiaries

     145,228       252,361  

Equity contribution by joint venture partner

     26,267       1,684  

Issuance of common stock upon exercise of stock options

     53,544       19,541  

Distribution from subsidiaries to non-controlling interests

     (245,852     (196,316

Cash dividends paid

     (68,077     (67,762

Other

     (4,658     (7,840
  

 

 

   

 

 

 

Net financing cash flow

     522,970       716,342  
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Expenditures for vessels and equipment

     (678,089     (553,630

Proceeds from sale of vessels and equipment

     167,274       47,704  

Advances to joint ventures and joint venture partners

     (88,483     (40,160

Investment in equity accounted investments

     (64,509     (140,804

Investment in direct financing lease assets

     (54,800     (151,716

Investment in CVI Ocean Transportation II Inc.

     (25,000     —    

Other

     20,710       6,162  
  

 

 

   

 

 

 

Net investing cash flow

     (722,897     (832,444
  

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     91,236       (21,075

Cash and cash equivalents, beginning of the period

     614,660       639,491  
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

     705,896       618,416  
  

 

 

   

 

 

 

 

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TEEKAY CORPORATION

APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME

(in thousands of U.S. dollars, except per share data)

Set forth below is a reconciliation of the Company’s unaudited adjusted net loss attributable to stockholders of Teekay, a non-GAAP financial measure, to net loss attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company’s financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

 

     Three Months Ended
September 30, 2014
    Nine Months Ended
September 30, 2014
 
     (unaudited)     (unaudited)  
     $     $ Per
Share (1)
    $     $ Per
Share (1)
 

Net income – GAAP basis

     87,824         121,499    

Adjust for: Net income attributable to non-controlling interests

     (85,450       (162,600  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to stockholders of Teekay

     2,374       0.03        (41,101     (0.57

Add (subtract) specific items affecting net income:

        

Unrealized (gains) losses from derivative instruments (2)

     (32,861     (0.45     32,197       0.45   

Foreign exchange gain (3)

     (20,378     (0.28     (17,726     (0.25

Restructuring charges (4)

     2,665       0.04        3,060       0.04   

Gain on sale of vessels, net of asset impairments (5)

     (4,575     (0.06     (16,549     (0.23

Realized gain on termination of interest rate swap

     —         —          (1,000     (0.01

Dilution gain on share issuance by TIL (6)

     —         —          (4,108     (0.06

Other (7)

     5,584       0.08        1,881       0.03   

Non-controlling interests’ share of items above (8)

     34,612       0.47        14,149       0.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     (14,953     (0.20     11,904       0.17   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss attributable to stockholders of Teekay

     (12,579     (0.17     (29,197     (0.40
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Fully diluted per share amounts.

(2)

Reflects the unrealized gains or losses relating to the change in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income from joint ventures.

(3)

Foreign currency exchange gains and losses primarily relate to the Company’s debt denominated in Euros and Norwegian Kroner in addition to the unrealized gains and losses on cross currency swaps used to hedge the principal and interest on the Norwegian Kroner bonds. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized.

(4)

Restructuring charges primarily relate to the reorganization of the Company’s marine operations and crew redundancy accrual relating to the sale of a vessel.

(5)

Includes the Company’s share of the gain on sale of vessels in Exmar LPG BVBA joint venture, a net gain on the sale of an office building, a net gain on sale of six vessels to TIL, the recovery of FPSO FEED study costs previously provided for, net of impairment of a shuttle tanker,

(6)

Relates to the unrealized gain on the TIL stock purchase warrants issued to the Company and Teekay Tankers in connection with TIL’s formation and initial funding.

(7)

Other primarily relates to pre-operational costs and realized losses on interest rate swaps for the Petrojarl Knarr FPSO.

(8)

Items affecting net income include items from the Company’s wholly-owned subsidiaries, its consolidated non-wholly-owned subsidiaries and its proportionate share of items from equity accounted for investments. The specific items affecting net income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “Non-controlling interests’ share of items above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of items listed in the table.

 

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TEEKAY CORPORATION

APPENDIX A – SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME

(in thousands of U.S. dollars, except per share data)

Set forth below is a reconciliation of the Company’s unaudited adjusted net loss attributable to stockholders of Teekay, a non-GAAP financial measure, to net loss attributable to stockholders of Teekay as determined in accordance with GAAP. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company’s financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Company’s financial results. Adjusted net loss attributable to the stockholders of Teekay is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

 

     Three Months Ended
September 30, 2013
    Nine Months Ended
September 30, 2013
 
     (unaudited)     (unaudited)  
     $     $ Per
Share (1)
    $     $ Per
Share (1)
 

Net (loss) income – GAAP basis

     (84,697       42,592    

Adjust for: Net loss (income) attributable to non-controlling interests

     35,593         (86,465  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to stockholders of Teekay

     (49,104     (0.69     (43,873     (0.62

Add (subtract) specific items affecting net (loss) income:

        

Unrealized gains from derivative instruments (2)

     (36,881     (0.52     (163,946     (2.33

Foreign exchange loss (3)

     12,199       0.17        12,085       0.17   

Asset impairments, provisions and gain on sale of vessels and equipment (4)

     72,120       1.01        81,018       1.15   

Restructuring charges(5)

     461       0.01        4,304       0.06   

Realized loss on termination of interest rate swap

     31,798       0.45        31,798       0.45   

Other (6)

     2,968       0.04        10,270       0.15   

Non-controlling interests’ share of items above(7)

     (69,575     (0.98     (12,677     (0.18
  

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     13,090       0.18        (37,148     (0.53
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net loss attributable to stockholders of Teekay

     (36,014     (0.51     (81,021     (1.15
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Fully diluted per share amounts.

(2)

Reflects the unrealized gains or losses relating to the change in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income from joint ventures, and the ineffective portion of foreign currency forward contracts designated as hedges for accounting purposes.

(3)

Foreign currency exchange gains and losses primarily relate to the Company’s debt denominated in Euros and Norwegian Kroner in addition to the unrealized gains and losses on cross currency swaps used to hedge the principal and interest on the Norwegian Kroner bonds. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized.

(4)

Relates to allowances provided against investments in term loans, impairment of four shuttle tankers including two shuttle tankers which Teekay Offshore owns through a 50 percent-owned consolidated subsidiary, a loan loss provision on a loan to a joint venture partner, gain on sale of equipment and gain (loss) on sale of three conventional tankers.

(5)

Restructuring charges relate to the reorganization of the Company’s marine operations.

(6)

Other primarily relates to recognition of unrealized loss on sale of marketable securities, pension fund closure, and realized (gain) loss on foreign exchange forward contracts relating to certain capital acquisition expenditures and certain items in joint ventures.

(7)

Items affecting net (loss) income include items from the Company’s wholly-owned subsidiaries, its consolidated non-wholly-owned subsidiaries and its proportionate share of items from equity accounted for investments. The specific items affecting net income (loss) are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “non-controlling interests’ share of items listed above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of items listed in the table.

 

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TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY BALANCE SHEET AS AT SEPTEMBER 30, 2014

(in thousands of U.S. dollars)

 

(unaudited)

 

     Teekay
Offshore
     Teekay
LNG
     Teekay
Tankers
     Teekay
Parent
    Consolidation
Adjustments
    Total  

ASSETS

  

            

Cash and cash equivalents

     224,566        97,455        46,366        337,509       —         705,896  

Other current assets

     185,093        25,182        60,996        242,468       —         513,739  

Restricted cash

     —          497,866        —          3,813       —         501,679  

Vessel held for sale

     6,758        —          —          —         —         6,758  

Vessels and equipment

     2,942,497        1,720,204        838,139        877,066       —         6,377,906  

Advances on newbuilding contracts and conversion costs

     152,919        139,015        —          1,204,415       —         1,496,349  

Derivative assets

     7,943        122,557        3,568        3,343       —         137,411  

Investment in equity accounted investees

     59,793        695,803        54,465        72,014       (27,406     854,669  

Investment in direct financing leases

     77,827        690,107        —          —         —         767,934  

Other assets

     59,105        229,025        13,062        180,456       —         481,648  

Advances to (from) affiliates

     53,572        21,263        9,895        (84,730     —         —    

Equity investment in subsidiaries

     —          —          —          458,692       (458,692     —    

Intangibles and goodwill

     136,562        125,491        —          4,405       —         266,458  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

     3,906,635        4,363,968        1,026,491        3,299,451       (486,098     12,110,447  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

  

            

Accounts payable and accrued liabilities

     183,001        58,494        25,934        258,587       —         526,016  

Advances from (to) affiliates

     46,709        48,610        9,252        (104,571     —         —    

Current portion of long-term debt

     376,025        210,345        46,959        102,956       —         736,285  

Long-term debt

     2,211,618        2,074,777        593,297        1,644,027       —         6,523,719  

Derivative liabilities

     233,465        257,887        19,471        51,241       —         562,064  

In process revenue contracts

     91,761        37,491        —          54,047       —         183,299  

Other long-term liabilities

     38,954        106,862        5,559        191,427       —         342,802  

Redeemable non-controlling interest

     17,286        —          —          —         —         17,286  

Equity:

  

            

Non-controlling interests (1)

     44,970        44,184        —          714       2,028,085       2,117,953  

Equity attributable to stockholders/unitholders of publicly-listed entities

     662,846        1,525,318        326,019        1,101,023       (2,514,183     1,101,023  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

     3,906,635        4,363,968        1,026,491        3,299,451       (486,098     12,110,447  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

NET DEBT (2)

     2,363,077        1,689,801        593,890        1,405,661       —         6,052,429  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

(1)

Non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the respective joint venture partners’ share of joint venture net assets. Non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net assets of Teekay’s publicly-traded subsidiaries.

(2)

Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash.

 

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TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY STATEMENT OF INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(in thousands of U.S. dollars)

 

(unaudited)

 

     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Total  

Revenues

     258,442       100,776       53,470       105,902       (28,407     490,183  

Voyage expenses

     (28,622     (448     (2,872     (3,875     1,634       (34,183

Vessel operating expenses

     (91,638     (23,538     (22,935     (67,975     —         (206,086

Time-charter hire expense

     (7,085     —         (6,309     (31,932     28,428       (16,898

Depreciation and amortization

     (49,759     (23,309     (12,451     (21,316     —         (106,835

General and administrative

     (14,038     (5,579     (2,890     (8,953     (125     (31,585

Asset impairments

     (4,759     —         —         —         —         (4,759

Gain (loss) on sale of vessels and equipment

     —         —         —         8,502       (7,285     1,217  

Restructuring charges

     —         (2,231     —         (434     —         (2,665
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     62,541       45,671       6,013       (20,081     (5,755     88,389  

Interest expense

     (22,911     (14,747     (2,042     (12,538     32       (52,206

Interest income

     145       1,530       49       1,062       —         2,786  

Realized and unrealized (losses) gains on derivative instruments

     (9,432     2,288       447       905       —         (5,792

Income tax expense

     (1,468     (370     (116     (1,157     —         (3,111

Equity income (loss)

     2,486       38,710       1,612       (1,519     (1,357     39,932  

Equity in earnings of subsidiaries (1)

     —         —         —         40,215       (40,215     —    

Foreign exchange (loss) gain

     (939     23,477       (89     (2,761     (191     19,497  

Other – net

     (278     210       (12     (1,604     13       (1,671
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     30,144       96,769       5,862       2,522       (47,473     87,824  

Less: Net income attributable to non-controlling interests (2)

     (1,623     (6,182     —         (148     (77,497     (85,450
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to stockholders/unitholders of publicly-listed entities

     28,521       90,587       5,862       2,374       (124,970     2,374  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated (3)(4)

     114,630       71,455       18,464       (14,003     1,530       192,076  

CFVO - Equity Investments (5)

     5,506       51,829       2,695       943       (1,530     59,443  

CFVO - Total

     120,136       123,284       21,159       (13,060     —         251,519  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries.

(2)

Net income attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income loss of their respective joint ventures. Net income attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income of Teekay’s publicly-traded subsidiaries.

(3)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix C and Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(4)

In addition to the CFVO generated by its directly owned and chartered-in assets, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the three months ended September 30, 2014, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $43.8 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(5)

CFVO – Equity Investments represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments. Please see Appendix C and Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

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TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY STATEMENT OF INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(in thousands of U.S. dollars)

 

(unaudited)

 

     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Total  

Revenues

     759,078       303,589       159,662       313,123        (86,521     1,448,931  

Voyage expenses

     (88,332     (2,948     (7,923     (8,550     5,119       (102,634

Vessel operating expenses

     (267,952     (72,114     (69,314     (199,606     —         (608,986

Time-charter hire expense

     (23,472     —         (8,473     (95,862     84,903       (42,904

Depreciation and amortization

     (146,721     (70,949     (37,378     (58,618     —         (313,666

General and administrative

     (46,941     (18,241     (9,245     (30,010     (1,971     (106,408

Asset impairments

     (4,759     —         —         —          —         (4,759

Loan loss recoveries

     —         —         —         2,521        —         2,521  

Gain (loss) on sale of vessels and equipment

     —         —         9,955       8,000        (7,285     10,670  

Restructuring recovery (charge)

     262       (2,231     —         (1,091     —         (3,060
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     181,163       137,106       37,284       (70,093     (5,755     279,705  

Interest expense

     (63,399     (44,646     (6,663     (36,519     32       (151,195

Interest income

     512       2,750       247       1,853        —         5,362  

Realized and unrealized losses on derivative instruments

     (84,208     (21,568     (1,523     (21,072     —         (128,371

Income tax expense

     (2,913     (1,140     (210     (4,839     —         (9,102

Equity income (loss)

     8,577       92,007       4,221       (751     (1,357     102,697  

Equity in earnings of subsidiaries (1)

     —         —         —         90,267        (90,267     —    

Foreign exchange (loss) gain

     (4,550     22,632       (104     (1,230     (191     16,557  

Other – net

     184       636       3,631       1,382        13       5,846  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     35,366       187,777       36,883       (41,002     (97,525     121,499  

Less: Net income attributable to non-controlling interests (2)

     (4,956     (15,295     —         (99     (142,250     (162,600
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to stockholders/unitholders of publicly-listed entities

     30,410       172,482       36,883       (41,101     (239,775     (41,101
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated (3)(4)

     325,553       214,539       64,707       (42,766     1,530       563,563  

CFVO - Equity Investments (5)

     20,588       150,863       5,396       2,095        (1,530     177,412  

CFVO - Total

     346,141       365,402       70,103       (40,671     —         740,975  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries.

(2)

Net income attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income loss of their respective joint ventures. Net income loss attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income loss of Teekay’s publicly-traded subsidiaries.

(3)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains or losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix C and Appendix E to this release for a reconciliation of this non-GAAP financial measure as used in this release to the most directly comparable GAAP financial measure.

 

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(4)

In addition to Teekay Parent’s CFVO, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the nine months ended September 30, 2014, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $130.8 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(5) CFVO – Equity investments represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments. Please see Appendix C and Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP measure.

 

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TEEKAY CORPORATION

APPENDIX C – SUPPLEMENTAL FINANCIAL INFORMATION

TEEKAY PARENT SUMMARY OPERATING RESULTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(in thousands of U.S. dollars)

(unaudited)

Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to (loss) income from vessel operations as determined in accordance with GAAP, for Teekay Parent’s primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent’s financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

 

     Owned
Conventional
Tankers
    In-Chartered
Conventional
Tankers
    FPSOs     Other (1)     Corporate
G&A
    Teekay
Parent
Total
 

Revenues

     3,309       17,325        63,998       21,270       —         105,902  

Voyage expenses

     (2,130     (1,739     (6     —         —         (3,875

Vessel operating expenses

     (767     (5,480     (54,315     (7,413     —         (67,975

Time-charter hire expense

     —         (13,718     (7,530     (10,684     —         (31,932

Depreciation and amortization

     (713     —          (21,145     542       —         (21,316

General and administrative

     (146     (829     (5,427     1,517       (4,068     (8,953

Gain on sale of vessels and equipment (2)

     —         —          1,217       7,285       —         8,502  

Restructuring charges

     —         —          —         (434     —         (434
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from vessel operations

     (447     (4,441     (23,208     12,083       (4,068     (20,081
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of (loss) income from vessel operations to cash flow from vessel operations

  

(Loss) income from vessel operations

     (447     (4,441     (23,208     12,083       (4,068     (20,081

Depreciation and amortization

     713       —          21,145       (542     —         21,316  

Gain on sale of vessels and equipment (2)

     —         —          (1,217     (7,285     —         (8,502

Amortization of in-process revenue contracts and other

     —         —          (6,580     —         —         (6,580

Realized gains (losses) from the settlements of non-designated derivative instruments

     11       —          (167     —         —         (156
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated(3)(4)

     277       (4,441     (10,027     4,256       (4,068     (14,003

CFVO - Equity(5)

     1,577       —          (285     (349     —         943  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Total

     1,854       (4,441     (10,312     3,907       (4,068     (13,060
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes results of two chartered-in LNG carriers owned by Teekay LNG and two chartered-in FSO units owned by Teekay Offshore.

(2)

Teekay Parent recognized a gain on sale of an office building and a gain on the sale of conventional tanker commercial management and technical management operations to TNK, which is eliminated on consolidation.

(3)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents Teekay Parent’s CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(4)

In addition to the CFVO generated by its directly owned and chartered-in assets, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the three months ended September 30, 2014, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $43.8 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(5)

CFVO – Equity Investments represents Teekay Parent’s proportionate share of CFVO from its equity accounted vessels and other investments. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

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TEEKAY CORPORATION

APPENDIX C – SUPPLEMENTAL FINANCIAL INFORMATION

TEEKAY PARENT SUMMARY OPERATING RESULTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(in thousands of U.S. dollars)

(unaudited)

Set forth below is a reconciliation of unaudited cash flow from vessel operations, a non-GAAP financial measure, to income (loss) from vessel operations as determined in accordance with GAAP, for Teekay Parent’s primary operating segments. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate Teekay Parent’s financial performance. Disaggregated cash flow from vessel operations for Teekay Parent, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

 

     Owned
Conventional
Tankers
    In-Chartered
Conventional
Tankers
    FPSOs     Other (1)     Corporate
G&A
    Teekay
Parent
Total
 

Revenues

     16,496       51,172        170,551       74,904       —         313,123  

Voyage expenses

     (5,803     (2,697     (6     (44     —         (8,550

Vessel operating expenses

     (4,109     (16,529     (159,238     (19,730     —         (199,606

Time-charter hire expense

     —         (41,640     (20,902     (33,320     —         (95,862

Depreciation and amortization

     (1,503     —          (57,226     111       —         (58,618

General and administrative

     (677     (2,384     (16,978     1,517       (13,088     (31,610

Success fee from daughter

     —         —          —         1,600       —         1,600  

Loan loss recoveries(2)

     —         —          2,521       —         —         2,521  

(Loss) gain on sale of vessels and equipment(2)

     (502     —          1,217       7,285       —         8,000  

Restructuring charges

     —         —          —         (1,091     —         (1,091
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     3,902       (12,078     (80,061     31,232       (13,088     (70,093
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of income (loss) from vessel operations to cash flow from vessel operations

  

Income (loss) from vessel operations

     3,902       (12,078     (80,061     31,232       (13,088     (70,093

Depreciation and amortization

     1,503       —          57,226       (111     —         58,618  

Loan loss recoveries(2)

     —         —          (2,521     —         —         (2,521

Loss (gain) on sale of vessels and equipment (2)

     502       —          (1,217     (7,285     —         (8,000

Amortization of in-process revenue contracts and other

     —         —          (19,740     —         —         (19,740

Realized losses from the settlements of non-designated derivative instruments

     (285     —          (745     —         —         (1,030
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated(3)(4)

     5,622       (12,078     (47,058     23,836       (13,088     (42,766

CFVO - Equity(5)

     3,282       —          (925     (262     —         2,095  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Total

     8,904       (12,078     (47,983     23,574       (13,088     (40,671
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes the results of two chartered-in LNG carriers owned by Teekay LNG and two chartered-in FSO units owned by Teekay Offshore, interest income received from an investment in term loan, fees earned from managing TIL vessel transactions of $4.0 million included in revenues, and a one-time $1.6 million success fee payment received from Teekay Offshore upon the acquisition of ALP Maritime Services B.V. in March 2014.

(2)

Teekay Parent recognized a loss relating to the sale of four conventional tankers to TIL, a recovery of a receivable for an FPSO front-end engineering and design study which had previously been provided for, a gain on sale of an office building, and a gain on the sale of conventional tanker commercial management and technical management operations to Teekay Tankers which is eliminated on consolidation.

(3)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts.

 

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CFVO – Consolidated represents Teekay Parent’s CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(4)

In addition to the CFVO generated by its directly owned and chartered-in assets, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the nine months ended September 30, 2014, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $130.8 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(5)

CFVO – Equity Investments represents Teekay Parent’s proportionate share of CFVO from its equity accounted vessels and other investments. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

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TEEKAY CORPORATION

APPENDIX D – SUPPLEMENTAL FINANCIAL INFORMATION

TEEKAY PARENT FREE CASH FLOW

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of Teekay Parent free cash flow for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. The Company defines free cash flow, a non-GAAP financial measure, as cash flow from vessel operations attributed to its directly-owned and in-chartered assets, net of interest expense and drydock expenditures in the respective period (collectively, OPCO); and distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers), net of Teekay Parent corporate general and administrative expenditures in the respective period (collectively, GPCO).

 

     Three Months Ended  
     September 30,     June 30,     March 31,     December 31,     September 30,  
     2014     2014     2014     2013     2013  

Teekay Parent OPCO Cash Flow

          

Teekay Parent cash flow from vessel operations (1)

          

Owned Conventional Tankers

     277       855       4,490       232       883  

In-Chartered Conventional Tankers

     (4,441     (4,818     (2,819     (9,292     (8,672

FPSOs

     (10,027     (23,126     (13,906     (4,932     (24,214

Other (2)

     5,021       7,174       12,408       3,355       1,386  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total (3)

     (9,170     (19,915     173       (10,637     (30,617

Less:

          

Net interest expense (4)

     (13,000     (15,015     (16,151     (12,039     (16,576

Dry dock expenditures

     (2,673     (378     (549     (2,056     (607
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Teekay Parent OPCO Cash Flow

     (24,843     (35,308     (16,527     (24,732     (47,800
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Teekay Parent GPCO Cash Flow

                                        

Daughter company distributions to Teekay Parent (5)

            

Limited Partner interest (6)

            

Teekay LNG Partners

     17,439       17,439       17,439       17,439       17,016  

Teekay Offshore Partners

     12,819       12,819       12,819       12,819       12,507  

General partner interest

            

Teekay LNG Partners

     7,883       7,883       7,568       7,566       6,320  

Teekay Offshore Partners

     4,880       4,880       4,868       4,867       3,671  

Other Dividends

            

Teekay Tankers (6)(7)

     756       629       629       629       629  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Daughter Distributions

     43,777       43,650       43,323       43,320       40,143  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Corporate general and administrative expenses

     (4,068     (3,362     (5,658     (6,314     (3,914
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Parent GPCO Cash Flow

     39,709       40,288       37,665       37,006       36,229  

TOTAL TEEKAY PARENT FREE CASH FLOW

     14,866       4,980       21,137       12,274       (11,571
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Teekay Parent Free Cash Flow per share

     0.21       0.07       0.30       0.17       (0.16
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of common shares - Basic

     72,393,072       72,036,526       71,328,577       70,781,695       70,755,282  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, vessel/goodwill write downs, gains or losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. For further details for the three months ended September 30, 2014, including a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to Appendix C to this release; for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013, please refer to Appendix E to this release.

 

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(2)

Includes $0.8 million for the three months ended September 30, 2014 relating to 50 percent of the CFVO from Tanker Operations.

(3)

Excluding corporate general and administrative expenses relating to GPCO.

(4)

The three month period ended September 30, 2014 excludes a realized loss on an interest rate swap related to the debt facility secured by the Petrojarl Knarr FPSO unit of $4.1 million. Net interest expense is a non-GAAP financial measure that includes realized gains and losses on interest rate swaps. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

(5)

Cash dividend and distribution cash flows are shown on an accrual basis for dividends and distributions declared for the respective period.

(6)

Common share/unit dividend/distribution cash flows to Teekay Parent are based on Teekay Parent’s ownership on the ex-dividend date for the respective publicly traded subsidiary and period as follows:

 

     Three Months Ended  
     September 30,
2014
     June 30,
2014
     March 31,
2014
     December 31,
2013
     September 30,
2013
 

Teekay LNG Partners

              

Distribution per common unit

   $ 0.6918      $ 0.6918      $ 0.6918      $ 0.6918      $ 0.6750  

Common units owned by Teekay Parent

     25,208,274        25,208,274        25,208,274        25,208,274        25,208,274  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distribution

   $ 17,439,084      $ 17,439,084      $ 17,439,084      $ 17,439,084      $ 17,015,585  

Teekay Offshore Partners

              

Distribution per common unit

   $ 0.5384      $ 0.5384      $ 0.5384      $ 0.5384      $ 0.5253  

Common units owned by Teekay Parent

     23,809,468        23,809,468        23,809,468        23,809,468        23,809,468  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distribution

   $ 12,819,018      $ 12,819,018      $ 12,819,018      $ 12,819,018      $ 12,507,114  

Teekay Tankers Ltd.

              

Dividend per share

   $ 0.03      $ 0.03      $ 0.03      $ 0.03      $ 0.03  

Shares owned by Teekay Parent (7)

     25,197,475        20,976,530        20,976,530        20,976,530        20,976,530  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total dividend

   $ 755,924      $ 629,296      $ 629,296      $ 629,296      $ 629,296  

 

(7)

Includes Class A and Class B shareholdings.

 

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TEEKAY CORPORATION

APPENDIX E – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CASH FLOW FROM VESSEL OPERATIONS - CONSOLIDATED

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of consolidated CFVO for the three months ended September 30, 2014 and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

     Three Months Ended September 30, 2014
(unaudited)
 
     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Income (loss) from vessel operations

     62,541        45,671       6,013       (20,081     (5,755     88,389  

Depreciation and amortization

     49,759        23,309       12,451       21,316       —         106,835  

Amortization of in process revenue contracts and other

     (3,212     (1,991     —         (6,580     —         (11,783

Realized (losses) gains from the settlements of non-designated derivative instruments

     (278     —         —         (156     —         (434

Asset impairment

     4,759        —         —         —         —         4,759  

(Gain) loss on sale of vessels and equipment

     —          —         —         (8,502     7,285       (1,217

Cash flow from time-charter contracts, net of revenue accounted for as direct finance leases

     1,061        4,466       —         —         —         5,527  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Consolidated

     114,630        71,455       18,464       (14,003     1,530       192,076  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended September 30, 2013
(unaudited)
 
     Teekay
Offshore(1)
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

(Loss) income from vessel operations

     (18,646     42,627       (9,730     (44,170     —         (29,919

Depreciation and amortization

     51,920        24,440       11,935       20,819       —         109,114  

Amortization of in process revenue contracts and other

     (3,249     (278     —         (10,708     —         (14,235

Unrealized losses (gains) from the change in fair value of designated derivative instruments

     —          —          —         19       —         19  

Realized (losses) gains from the settlements of non designated derivative instruments

     (360     903       —         (1,471     —         (928

Asset impairments / gain on sale of vessels and equipment

     56,937        3,804       10,399       980       —         72,120  

Cash flow from time-charter contracts, net of revenue accounted for as direct finance leases

     867        1,795       —         —         —         2,662  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Consolidated

     87,469        73,291       12,604       (34,531     —         138,833  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) The results of Teekay Offshore include the results from both continuing and discontinued operations.

 

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TEEKAY CORPORATION

APPENDIX E – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

CASH FLOW FROM VESSEL OPERATIONS – EQUITY ACCOUNTED VESSELS

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of cash flow from vessel operations for equity accounted vessels for the three months ended September 30, 2014 and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO from equity accounted vessels represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

    Three Months Ended September 30, 2014
(unaudited)
    Three Months Ended September 30, 2013
(unaudited)
 
    At
100%
    Company’s
Portion(1)
    At
100%
    Company’s
Portion(2)
 

Revenues

    325,092       144,385        224,638       105,245   

Vessel and other operating expenses

    (191,731     (84,074     (101,075     (47,713

Depreciation and amortization

    (35,993     (16,212     (28,252     (14,280

Gain on sale of vessels

    16,234       8,117        —         —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

    113,602        52,216        95,311       43,252   
 

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

    (25,758     (11,102     (24,513     (11,532

Realized and unrealized gain (loss) on derivative instruments

    526       260        (9,846     (3,563

Other income - net

    133       214        (3,440     (1,404
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income of equity accounted vessels

    88,503       41,588        57,512       26,753   
 

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma equity income from Teekay Operations

    —         (1,656     —         —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Equity income of equity accounted vessels

    88,503       39,932        57,512       26,753   
 

 

 

   

 

 

   

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

    113,602       52,216        95,311       43,252   

Depreciation and amortization

    35,993       16,212        28,252       14,280   

Gain on sale of vessels

    (16,234     (8,117     —         —     

Cash flow from time-charter contracts net of revenue accounted for as direct finance lease

    7,520       2,719        7,309       2,652   

Amortization of in-process revenue contracts and other

    (4,047     (2,057     (7,427     (3,818
 

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations of equity accounted vessels(3)

    136,834       60,973        123,445       56,366   
 

 

 

   

 

 

   

 

 

   

 

 

 

Pro forma CFVO from Teekay Operations

    —         (1,530     —         —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations of equity accounted vessels(3)

    136,834       59,443        123,445       56,366   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

The Company’s proportionate share of its equity accounted vessels and other investments ranges from 13 percent to 52 percent.

(2)

The Company’s proportionate share of its equity accounted vessels and other investments ranges from 33 percent to 52 percent.

(3)

CFVO from equity accounted vessels represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments.

 

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TEEKAY CORPORATION

APPENDIX E – RECONCILIATION OF NON-GAAP MEASURES

CASH FLOW FROM VESSEL OPERATIONS – TEEKAY PARENT

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of Teekay Parent cash flow from vessel operations for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

     Three Months Ended June 30, 2014
(unaudited)
 
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Corporate
G&A
    Teekay
Parent
Total
 

Teekay Parent (loss) income from vessel operations

     (161     (4,818     (31,719     6,686        (3,362     (33,374

Depreciation and amortization

     710        —          17,746        488        —          18,944   

Loan loss recoveries

     —          —          (2,521     —          —          (2,521

Loss on sale of vessels and equipment

     340        —          —          —          —          340   

Amortization of in process revenue contracts and other

     —          —         (6,580     —          —          (6,580

Realized losses from the settlements of non-designated foreign derivative instruments

     (34     —          (52     —          —          (86
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

     855        (4,818     (23,126     7,174        (3,362     (23,277
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended March 31, 2014
(unaudited)
 
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Corporate
G&A
    Teekay
Parent
Total
 

Teekay Parent income (loss) from vessel operations

     4,510        (2,819     (25,135     12,465        (5,658     (16,638

Depreciation and amortization

     80        —          18,335        (57     —          18,358   

Loss on sale of vessels and equipment

     162        —         —          —          —          162   

Amortization of in process revenue contracts and other

     —          —          (6,580     —          —          (6,580

Realized losses from the settlements of non-designated foreign derivative instruments

     (262     —          (526     —          —          (788
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

     4,490        (2,819     (13,906     12,408        (5,658     (5,486
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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     Three Months Ended December 31, 2013
(unaudited)
 
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Corporate
G&A
    Teekay
Parent
Total
 

Teekay Parent (loss) income from vessel operations

     (93,160 )     (9,292     (15,452     12,485        (6,314     (111,733

Depreciation and amortization

     2,602        —          18,995        (457     —          21,140   

Asset impairments and provisions (recoveries)

     90,813        —         2,634        (8,713     —          84,734   

Loss on sale of vessel

     —          —         —          40        —          40   

Amortization of in process revenue contracts and other

     —          —         (10,691     —          —          (10,691

Realized losses from the settlements of non-designated foreign exchange forward contracts

     (23     —          (418     —          —          (441
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

     232        (9,292     (4,932     3,355        (6,314     (16,951
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended September 30, 2013
(unaudited)
 
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Corporate
G&A
    Teekay
Parent
Total
 

Teekay Parent loss (income) from vessel operations

     (1,634 )     (8,672     (32,692     2,742        (3,914     (44,170

Depreciation and amortization

     2,582        —          19,670        (1,433     —          20,819   

Loss provision

     —          —         —          1,141        —          1,141   

Gain on sale of vessel

     —          —         —          (161     —          (161

Amortization of in process revenue contracts and other

     —          —         (10,708     —          —          (10,708

Unrealized losses from the change in fair value of designated foreign exchange forward contracts

     19        —         —          —          —          19   

Realized losses from the settlements of non-designated foreign exchange forward contracts

     (84     —          (484     (903     —          (1,471
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

     883        (8,672     (24,214     1,386        (3,914     (34,531
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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TEEKAY CORPORATION

APPENDIX E – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

NET REVENUES

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of net revenues for the three and nine months ended September 30, 2014 and September 30, 2013. Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is included because certain investors use this data to measure the financial performance of shipping companies. Net revenues is not required by GAAP and should not be considered as an alternative to revenues or any other indicator of the Company’s performance required by GAAP.

 

                                        Nine Months
Ended
 
    Three Months Ended September 30, 2014     September 30,
2014
 
    Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
    Teekay
Corporation
Consolidated
 

Revenues

    258,442        100,776       53,470       105,902       (28,407     490,183       1,448,931  

Voyage expense

    (28,622     (448     (2,872     (3,875     1,634       (34,183     (102,634
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

    229,820        100,328       50,598       102,027       (26,773     456,000       1,346,297  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                                        Nine Months
Ended
 
    Three Months Ended September 30, 2013     September 30,
2013
 
    Teekay
Offshore(1)
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
    Teekay
Corporation
Consolidated
 

Revenues

    236,040        100,692       39,479       103,988       (25,404     454,795       1,336,539  

Voyage expense

    (28,693     (373     (483     154       1,373       (28,022     (80,491
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

    207,347        100,319       38,996       104,142       (24,031     426,773       1,256,048  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

The results of Teekay Offshore include the results from both continuing and discontinued operations.

 

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TEEKAY CORPORATION

APPENDIX E – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

NET INTEREST EXPENSE – TEEKAY PARENT

(in thousands of U.S. dollars)

(unaudited)

Set forth below is an unaudited calculation of Teekay Parent net interest expense for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013. Net interest expense is a non-GAAP financial measure that includes realized gains and losses on interest rate swaps. Net interest expense is not required by GAAP and should not be considered as an alternative to interest expense or any other indicator of the Company’s performance required by GAAP.

 

     Three months ended  
     September 30,
2014
    June 30,
2014
    March 31,
2014
    December 31,
2013
    September 30,
2013
 

Interest expense

     (52,206     (49,656     (49,333     (48,382     (45,817

Interest income

     2,786       793       1,783       5,129       1,543  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense - consolidated

     (49,420     (48,863     (47,550     (43,253     (44,274

Less:

  

     

Non-Teekay Parent net interest expense

     (37,944     (38,088     (35,135     (35,130     (31,604
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense net of interest income - Teekay Parent

     (11,476     (10,775     (12,415     (8,123     (12,670

Add:

  

     

Teekay Parent realized losses on interest rate swaps (1)

     (1,524     (4,240     (3,736     (3,916     (3,906
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense - Teekay Parent

     (13,000     (15,015     (16,151     (12,039     (16,576
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Realized losses on interest rate swaps excludes a realized loss on the interest rate swap related to the debt facility secured by the Petrojarl Knarr FPSO unit of $4.1 million for the three months ended September 30, 2014 and excludes a realized gain on the termination of a swap agreement of $1.0 million for the three months ended March 31, 2014.

 

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FORWARD LOOKING STATEMENTS

 

 

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: future growth opportunities and market conditions; the timing for implementation of the Company’s new dividend policy, the amount of the initial dividend increase from the current level, and expected increases over the three years following the initial dividend increase; the anticipated sale of the Petrojarl Knarr FPSO unit to Teekay Offshore, including the sale price, the anticipated commencement of the Petrojarl Knarr FPSO charter contract in the fourth quarter of 2014, and the timing and certainty of Teekay Parent completing the sale; the dividend contributions of any future projects awarded to the Company’s daughter companies; expected growth of Teekay Offshore and Teekay LNG and its impact on Teekay Parent; the total cost and timing for the delivery of newbuilding and conversion projects and the commencement of associated time-charter contracts; the timing and certainty of Teekay Offshore’s joint venture with Odebrecht finalizing the contract for the Libra FPSO project with Petrobras; the timing, certainty and purchase price of pending and future Teekay Offshore and Teekay LNG vessel acquisitions; and the timing and certainty of the charterer resolving the subsea issues relating to the Foinaven field and revenues generated from the Foinaven FPSO. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSO and FPSO units; decreases in oil production by, or increased operating expenses for, FPSO units; fluctuations in global oil prices; trends in prevailing charter rates for shuttle tanker and FPSO contract renewals; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts or complete existing contract negotiations; delays in commencement of operations of FPSO and FSO units at designated fields; changes in the Company’s expenses; the Company and its publicly-traded subsidiaries’ future capital expenditure requirements and the inability to secure financing for such requirements; the amount of future distributions by the Company’s daughter companies to the Company; the amount of Teekay Parent and daughter subsidiary expenses; failure by Teekay Offshore’s joint venture with Odebrecht to complete final contract negotiations with Petrobras for the Libra FPSO project; potential delays in the commencement of operations of the Petrojarl Knarr FPSO unit and potential failure of the FPSO unit to be sold to Teekay Offshore; the inability to successfully complete the operational testing of the Hi-Load DP unit and achieve final acceptance of the unit from Petrobras; failure by Teekay Offshore and Teekay LNG to complete its vessel acquisitions; the inability of the Company to complete vessel sale transactions to its public-traded subsidiaries or to third parties, including obtaining Board of Directors and Conflicts Committee approvals; failure of the respective Board of Directors of the general partners of Teekay Offshore and Teekay LNG to approve future distribution increases; failure by the charterer to resolve the subsea issues relating to the Foinaven field; conditions in the United States capital markets; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2013. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

 

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