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: May 14, 2015

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 May 14, 2015.

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: May 14, 2015

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

FIRST QUARTER 2015 RESULTS

 

Highlights

 

 

First quarter 2015 total consolidated cash flow from vessel operations(1) of $320.9 million, an increase of 21 percent from the same period of the prior year.

 

 

First quarter 2015 adjusted net income attributable to shareholders(2) of $15.7 million, or $0.22 per share, compared to $3.5 million, or $0.05 per share, in the same period of the prior year.

 

 

First quarter 2015 Teekay Parent free cash flow(3) of $31.5 million, or $0.43 per share, compared to $21.1 million, or $0.30 per share, in the same period of the prior year.

 

 

Knarr FPSO unit achieved first oil in mid-March 2015 and commenced its charter contract at partial rate; the sale of the Knarr FPSO to Teekay Offshore is expected to be completed in the second quarter of 2015.

 

 

Teekay expects to implement its new dividend policy in the second quarter of 2015, with an initial increase of approximately 75 percent to $0.55 per share, or $2.20 per share annualized.

 

 

Consolidated liquidity of approximately $1.2 billion as at March 31, 2015, giving pro-forma effect to Teekay Offshore’s preferred unit offering completed in April 2015 and Teekay LNG’s Norwegian bond offering completed in May 2015.

Hamilton, Bermuda, May 14, 2015 - Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported adjusted net income attributable to shareholders(2) of $15.7 million, or $0.22 per share, compared to $3.5 million, or $0.05 per share, for the quarters ended March 31, 2015 and 2014, respectively. Adjusted net income attributable to shareholders excludes a number of specific items that had the net effect of increasing the GAAP net loss by $25.5 million, or $0.35 per share, and $4.0 million, or $0.06 per share, for the quarters ended March 31, 2015 and 2014, respectively, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, a net loss attributable to shareholders of $9.8 million, or $0.13 per share, compared to $0.5 million, or $0.01 per share, for the quarters ended March 31, 2015 and 2014, respectively. Net revenues(4) for the first quarter of 2015 increased to $520.2 million, compared to $471.5 million for the same period of the prior year.

On April 2, 2015, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended March 31, 2015. The cash dividend was paid on April 30, 2015 to all shareholders of record on April 17, 2015.

“Teekay Parent’s strong free cash flow in the first quarter was largely due to the expected Banff FPSO contract rate step-up effective January 1, 2015 and the Knarr FPSO achieving first oil and commencing its charter contract at partial rate with BG in mid-March 2015, which is expected to increase further with a higher contribution from the Knarr FPSO in the second quarter of 2015,” commented Peter Evensen, Teekay Corporation’s President and Chief Executive Officer. “Our daughter entities also reported strong results during the quarter with Teekay Offshore and Teekay LNG both posting strong cash flows and distribution coverage and Teekay Tankers achieving the strongest cash flows in the last six years.”

“We have continued to make steady progress on the Knarr FPSO commissioning process, including successfully discharging the FPSO’s first cargo to one of Teekay Offshore’s shuttle tankers, and are now in the final phase towards reaching full charter rate,” Mr. Evensen continued. “Subject to the unit completing certain operational tests and commencement of the full charter rate, we expect to complete the sale of the Knarr FPSO to Teekay Offshore in the second quarter of 2015.”

Mr. Evensen added, “We expect to implement the new Teekay Parent dividend policy in the second quarter of 2015 with an initial quarterly dividend increase of approximately 75 percent to $0.55 per share, or $2.20 per share annualized, payable in July 2015, with future increases linked to the growth in the dividend cash flows we receive from our daughter entities. With a robust project pipeline of approximately $6.7 billion of committed growth projects at Teekay Offshore and Teekay LNG and with both partnerships continuing to pursue new growth opportunities, Teekay Parent is expected to achieve strong future free cash flow and dividend growth.”

 

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(1)

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 financial measure under United States generally accepted accounting principles (GAAP).

(2)

Adjusted net income attributable to shareholders 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 GAAP and for information about specific items affecting net loss that are typically excluded by securities analysts in their published estimates of the Company’s financial results.

(3)

Teekay Parent free cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of companies. Please refer to Appendix D 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.

(4)

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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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 March 31, 2015  
     (unaudited)  

(in thousands of U.S. dollars)

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

Net revenues(1)

     228,394       97,008       100,044       118,151        (23,405     520,192  

Vessel operating expense

     (74,034     (21,634     (22,441     (66,094     —         (184,203

Time-charter hire expense

     (6,983     —         (15,003     (28,827     25,886       (24,927

Depreciation and amortization

     (53,604     (23,569     (13,672     (21,859     —         (112,704

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

     127,807       72,705       53,976       3,807        (27     258,268  

CFVO - Equity Investments(5)

     8,854       46,304       4,176       3,226        27       62,587  

CFVO - Total

     136,661       119,009       58,152       7,033        —         320,855  
     Three Months Ended March 31, 2014  
     (unaudited)  

(in thousands of U.S. dollars)

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

Net revenues(1)

     225,780       100,157       60,320       111,749        (26,524     471,482  

Vessel operating expense

     (88,130     (24,256     (22,794     (66,006     —         (201,186

Time-charter hire expense

     (11,412     —         (1,052     (31,276     27,448       (16,292

Depreciation and amortization

     (48,488     (24,110     (12,502     (18,358     —         (103,458

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

     108,149       71,434       33,282       (5,486     —         207,379  

CFVO - Equity Investments(5)

     7,947       48,140       1,423       141        —         57,651  

CFVO - Total

     116,096       119,574       34,705       (5,345     —         265,030  

 

(1)

Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see 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 or losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. CFVO 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 March 31, 2015 and 2014, Teekay Parent received dividends and distributions from Teekay LNG, Teekay Offshore and Teekay Tankers totaling $45.3 million and $43.3 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, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry through its fleet of 63 offshore assets, including shuttle tankers, floating production, storage and offloading (FPSO) units, floating storage and offtake (FSO) units, units for maintenance and safety (UMS), long-distance towing and offshore installation vessels and conventional 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 27.3 percent interest in Teekay Offshore (including the 2 percent sole general partner interest).

For the first quarter of 2015, 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 $18.1 million for the first quarter of 2015, as detailed in Appendix D to this release.

Cash flow from vessel operations from Teekay Offshore increased to $136.7 million in the first quarter of 2015, from $116.1 million in the same period of the prior year, primarily due to the acquisition of three long-distance towing and offshore installation vessels during the first quarter of 2015, the delivery of the Suksan Salamander FSO unit in August 2014, an increase in the charter rate for the Cidade de Rio das Ostras FPSO unit and an overall decrease in operating expenses. These increases were partially offset by lower shuttle tanker revenues as a result of the sale of the Navion Norvegia in October 2014 to a 50 percent-owned Teekay Offshore joint venture company for conversion into an FPSO unit, and the sale of the 1997-built Navion Svenita in March 2015 to a third party.

In 2015 to-date, Teekay Offshore, through its wholly-owned subsidiary ALP Maritime Services B.V. (ALP), has acquired four of the six modern on-the-water long-distance towing and offshore installation vessels which ALP agreed to acquire in October 2014 for approximately $220 million. ALP expects to take delivery of the remaining two vessels during the second quarter of 2015. Including these vessels and ALP’s four state-of-the-art long-distance towing and offshore installation newbuildings scheduled to deliver in 2016, ALP will become the world’s largest owner and operator of dynamic positioning towing and offshore installation 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.

In August 2014, Teekay Offshore took delivery of its first UMS, the Arendal Spirit, which has now arrived in Brazil and is expected to commence its three-year fixed-rate time-charter contract, plus extension options, with Petrobras in June 2015. Teekay Offshore has the option to defer the delivery of the remaining two UMS newbuildings by up to one year. Teekay Offshore intends to secure charter contracts for these two UMS newbuildings prior to their scheduled deliveries.

In early-May 2015, Teekay Offshore was awarded a two-year shuttle tanker contract of affreightment (CoA) with EnQuest PLC., which will service the Alma Galia field in the North Sea. The CoA is expected to start-up in July 2015 with the requirement for up to 15 roundtrip voyages per year.

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 interests in 86 liquefied gas and conventional tanker assets, including LNG carriers, LPG carriers and conventional tankers. Teekay LNG’s interests in these vessels range from 20 to 100 percent. Teekay Parent currently owns a 33.5 percent interest in Teekay LNG (including the 2 percent sole general partner interest).

For the first quarter of 2015, Teekay LNG’s quarterly distribution was $0.70 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 $26.3 million for the first quarter of 2015, as detailed in Appendix D to this release.

 

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Teekay LNG’s total cash flow from vessel operations, including cash flows from equity accounted vessels, was $119.0 million in the first quarter of 2015, compared to $119.6 million in the same period of the prior year. The slight decrease was primarily due to the sale of two 2000- and 2001-built conventional tankers and four older Exmar LPG BVBA (Exmar LPG) owned LPG carriers in 2014, a grounding incident and related disputed off-hire for the 52 percent-owned Magellan Spirit LNG carrier during the first quarter of 2015 and the scheduled expiration of the time-charter contract for the 52 percent-owned Methane Spirit LNG carrier in mid-March 2015. These decreases were partially offset by the acquisition of the Norgas Napa LPG carrier in late-2014, higher revenues from Exmar LPG as a result of four newbuilding deliveries in 2014 and early-2015 and fewer scheduled drydockings and unscheduled off-hire days compared to the same period of the prior year.

In February 2015, Teekay LNG entered into an agreement with Daewoo Shipbuilding & Marine Engineering Co., Ltd. of South Korea for the construction of one additional 173,400 cubic meter LNG carrier newbuilding, for a total fully built-up cost of approximately $220 million, with options to order up to four additional vessels. This vessel, and any of these optional newbuildings, if exercised, will be constructed with M-type, Electronically Controlled, Gas Injection (MEGI) twin engines, which are designed to be significantly more fuel-efficient and have lower emission levels than engines currently used in LNG shipping. Teekay LNG intends to secure long-term contract employment for the ordered vessel prior to its scheduled delivery in the fourth quarter of 2018.

In January 2015, the Magellan Spirit LNG carrier, in which Teekay LNG has a 52 percent ownership interest through a joint venture with Marubeni Corporation (the Teekay LNG-Marubeni Joint Venture), was involved in a grounding incident. The vessel was subsequently refloated and returned to service with a majority of the costs of the grounding expected to be covered by insurance, less an applicable deductible. As a result of this incident, the charterer claimed 59 days of vessel off-hire during the first quarter of 2015, which in the view of the charterer, permitted the charterer to terminate the charter contract which it claimed to do effective in late-March 2015. The Teekay LNG-Marubeni Joint Venture has disputed both the charterer’s aggregate off-hire claims as well as the charterer’s ability to terminate the charter contract, which would have otherwise expired in September 2016. The Teekay LNG-Marubeni Joint Venture has obtained legal assistance in resolving this dispute.

In mid-March 2015, the charter contract for the Methane Spirit LNG carrier, which is also owned by the Teekay LNG-Marubeni Joint Venture, expired as scheduled.

The Teekay LNG-Marubeni Joint Venture has secured short-term employment, commencing in September 2015, for both the Magellan Spirit and the Methane Spirit at significantly lower charter rates and continues to seek medium-term to long-term employment.

Teekay Tankers Ltd.

Teekay Tankers is an international owner and operator of conventional crude oil and refined product tankers through its fleet of 33 conventional tankers, including direct ownership in Aframax tankers, Suezmax tankers, Long Range 2 (LR2) product tankers, Medium-Range (MR) product tankers and a 50 percent-owned Very Large Crude Carrier (VLCC), and 12 chartered-in conventional tankers. Of these 45 vessels, eight 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 of 9.3 percent in Tanker Investments Ltd. (TIL) (OSLO: TIL), which currently owns a fleet of 20 modern tankers, including six Suezmax tankers to be acquired in the second quarter of 2015. 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 25.5 percent economic interest in, and has voting control of, Teekay Tankers.

For the first quarter of 2015, 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 received by Teekay Parent totaled $0.9 million for the first quarter of 2015.

Cash flow from vessel operations from Teekay Tankers increased to $58.2 million in the first quarter of 2015, from $34.7 million in the same period of the prior year. The increase is primarily due to stronger average spot tanker rates earned in the first quarter of 2015 compared to the same period in the prior year, an increase in fleet size due to the acquisition of four LR2 product tankers and one Aframax tanker in the first quarter of 2015, the addition of ten in-chartered vessels during 2014 and higher equity income as a result of higher earnings from TIL due to stronger average spot tanker rates and 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 Parent (Teekay Operations) on August 1, 2014.

In the first quarter of 2015, Teekay Tankers completed the acquisition of four LR2 product tankers and one Aframax tanker for an aggregate purchase price of approximately $230 million. Teekay Tankers took delivery of these vessels in February and March 2015. All four LR2 product tankers are currently trading in the Taurus LR2 pool and the Aframax tanker is on voyage charter until vetting inspections are completed for joining the Teekay Aframax RSA.

 

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During the first quarter of 2015, Teekay Tankers secured time charter-in contracts for one additional Aframax tanker and one additional LR2 product tanker, bringing Teekay Tankers’ total time chartered-in fleet to 12 vessels. The new time charter-in contracts have an average daily rate of $21,250 and firm contract periods of 24 months, with extension options. The time charter-in contract for the Aframax commenced in April 2015 and the LR2 contract is expected to commence in the second quarter of 2015.

Teekay Parent

In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns four FPSO units (including the Petrojarl Knarr (Knarr) FPSO unit, which Teekay Offshore has agreed to acquire upon commencement of its charter contract at full rate) and one VLCC vessel. As at May 1, 2015, Teekay Parent also had six chartered-in conventional tankers (including four Aframax tankers owned by Teekay Offshore), two chartered-in LNG carriers owned by Teekay LNG, and three chartered-in FSO units and two shuttle tankers owned by Teekay Offshore.

For the first quarter of 2015, Teekay Parent generated cash flow from vessel operations of $7.0 million, compared to negative cash flow from vessel operations of $5.3 million in the same period of the prior year. The increase in cash flow is primarily due to the Banff FPSO unit recommencing operations under its time-charter contract in July 2014 after being off-hire for repairs following damage from a storm event in late-2011, a contract rate step-up for the Banff FPSO effective January 1, 2015, the commencement of the Knarr FPSO units charter contract at partial rate with BG Norge Limited (BG) in mid-March 2015 following the achievement of first oil and higher average spot tanker rates.

In mid-March 2015, the Knarr FPSO unit achieved first oil and commenced its charter contract with BG at partial rate. In December 2014, Teekay Offshore’s Board of Director’s approved the acquisition of the Knarr FPSO from Teekay Parent, subject to the unit completing certain operational tests and commencing its charter contract at full rate, which is expected to occur during the second quarter of 2015. Teekay Offshore’s purchase price for the Knarr, which is based on a fully built-up cost of approximately $1.25 billion, is expected to be financed through the assumption of an existing $780 million long-term debt facility, a combination of vendor financing from, and new Teekay Offshore common units to be issued to, Teekay Parent, and a portion of the approximately $121 million of net proceeds from Teekay Offshore’s preferred unit public offering completed in April 2015.

 

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Fleet List

The following table summarizes Teekay’s consolidated fleet of 201 vessels as at May 1, 2015, 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  

FPSO Units

     4        —           —           4  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Parent Fleet

  5     2     —       7  
  

 

 

    

 

 

    

 

 

    

 

 

 

Teekay Offshore Fleet (5)

  52     2     9     63  

Teekay LNG Fleet

  56     3     27     86  

Teekay Tankers Fleet (6)

  33     12     —        45  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Consolidated Fleet

  146     19     36     201  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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 two long-distance towing and offshore installation vessels that Teekay Offshore agreed to acquire in October 2014, which are expected to deliver in the second quarter of 2015.

(6)

Chartered-in Vessels includes one chartered-in conventional tanker that is expected to deliver in the second quarter of 2015.

 

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Liquidity

As at March 31, 2015, the Company had consolidated liquidity of $986.0 million (consisting of $684.5 million of cash and cash equivalents and $301.5 million of undrawn revolving credit facilities), of which $266.6 million of liquidity (consisting of $258.7 million cash and cash equivalents and $8.1 million of undrawn revolving credit facilities) is attributable to Teekay Parent. Giving pro-forma effect to the $121 million of net proceeds from Teekay Offshore’s preferred unit public offering completed in April 2015 and approximately $130 million of net proceeds from Teekay LNG’s Norwegian bond offering completed in May 2015, the Company’s consolidated liquidity as at March 31, 2015 was approximately $1.2 billion.

Availability of 2014 Annual Report

The Company filed its 2014 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (SEC) on April 29, 2015. Copies of this report are available on Teekay Corporation’s website, under “SEC Filings”, at www.teekay.com. Shareholders may request a printed copy of this Annual Report, including the complete audited financial statements, free of charge by contacting Teekay Corporation’s Investor Relations.

Conference Call

The Company plans to host a conference call on Thursday, May 14, 2015 at 11:00 a.m. (ET) to discuss its results for the first quarter of 2015. An accompanying investor presentation will be available on Teekay’s website at www.teekay.com prior to the start of the call. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:

 

 

By dialing (800) 505-9587 or (416) 204-9524, if outside North America, and quoting conference ID code 7062529.

 

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, May 28, 2015. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 7062529.

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 approximately 200 liquefied gas, offshore, and conventional tanker assets (excluding vessels managed for third parties). 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

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

 

     Three Months Ended  
     March 31,
2015
(unaudited)
    December 31,
2014
(unaudited)
    March 31,
2014
(unaudited)
 

REVENUES (1)

     545,862       544,989       506,494  

Voyage expenses

     (25,670     (25,213     (35,012

Vessel operating expenses (1)(2)

     (184,203     (200,333     (201,186

Time-charter hire expense

     (24,927     (24,315     (16,292

Depreciation and amortization

     (112,704     (109,238     (103,458

General and administrative (2)

     (37,954     (34,509     (37,878

Asset impairments (3)

     (15,496     —         —    

Gain (loss) on sale of vessels and equipment

     1,643       2,839       (162

Restructuring charges

     (9,126     (6,766     (639
  

 

 

   

 

 

   

 

 

 

Income from vessel operations

  137,425     147,454     111,867  

Interest expense (2)

  (51,346   (57,334   (49,333

Interest income (2)

  1,530     1,465     1,783  

Realized and unrealized loss on derivative instruments (2)

  (83,386   (103,304   (47,248

Equity income (4)

  20,749     25,417     27,494  

Income tax recovery (expense)

  995     (1,071   (2,798

Foreign exchange gain (loss)

  17,510     (3,126   (894

Other income (loss)

  375     (6,998   8,251  
  

 

 

   

 

 

   

 

 

 

Net income

  43,852     2,503     49,122  

Less: Net income attributable to non-controlling interests

  (53,616   (16,159   (49,610
  

 

 

   

 

 

   

 

 

 

Net loss attributable to shareholders of Teekay Corporation

  (9,764   (13,656   (488
  

 

 

   

 

 

   

 

 

 

Loss per common share of Teekay

- Basic

($ 0.13 ($ 0.19 ($ 0.01

- Diluted

($ 0.13 ($ 0.19 ($ 0.01
  

 

 

   

 

 

   

 

 

 

Weighted-average number of common shares outstanding

- Basic

  72,549,068     72,498,974     71,328,577  

- Diluted

  72,549,068     72,498,974     71,328,577  
  

 

 

   

 

 

   

 

 

 

 

(1)

The costs of certain business development and engineering studies relating to North Sea FPSO and FSO projects that the Company pursues are partially reimbursable from customers upon completion. As a result, $1.1 million of revenues and $2.0 million of costs were recognized for the three months ended December 31, 2014.

(2)

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

 

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     Three Months Ended  
     March 31,
2015
    December 31,
2014
    March 31,
2014
 

Realized (losses) gains relating to:

      

Interest rate swaps

     (27,889     (33,072     (29,490

Termination of interest rate swap agreements

     —         (2,319     1,000  

Foreign currency forward contracts

     (5,428     (2,828     (1,285
  

 

 

   

 

 

   

 

 

 
  (33,317   (38,219   (29,775
  

 

 

   

 

 

   

 

 

 

Unrealized (losses) gains relating to:

Interest rate swaps

  (43,660   (53,111   (25,398

Foreign currency forward contracts

  (6,329   (14,154   3,051  

Stock purchase warrants in TIL

  (80   2,180     4,874  
  

 

 

   

 

 

   

 

 

 
  (50,069   (65,085   (17,473
  

 

 

   

 

 

   

 

 

 

Total realized and unrealized losses on non-designated derivative instruments

  (83,386   (103,304   (47,248
  

 

 

   

 

 

   

 

 

 

 

(3)

The Company recognized asset impairments of $15.5 million for the three months ended March 31, 2015 related to the impairment of two shuttle tankers owned by Teekay Offshore. The impairment for the shuttle tankers was the result of a recent change in the operating plan for one shuttle tanker and the expected sale of the other shuttle tanker.

(4)

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

 

     Three Months Ended  
     March 31,
2015
     December 31,
2014
     March 31,
2014
 

Equity income

     20,749        25,417        27,494  

Proportionate share of unrealized losses on derivative instruments

     2,422        2,082        909  

Dilution gain on share issuance by TIL

     —          —          (4,108

Other (i)

     4,788        —          966  
  

 

 

    

 

 

    

 

 

 

Equity income adjusted for items in Appendix A

  27,959     27,499     25,261  
  

 

 

    

 

 

    

 

 

 

 

(i)

Includes derecognition of deferred tax asset and unrealized foreign exchange losses in Sevan Marine AS for the three months ended March 31, 2015. Includes loss on sale of vessel in Exmar LPG BVBA joint venture for the three months ended March 31, 2014.

 

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TEEKAY CORPORATION

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

 

     As at March 31,
2015
(unaudited)
     As at December 31,
2014

(unaudited)
 

ASSETS

  

Cash and cash equivalents

     684,511        806,904  

Other current assets

     468,439        473,872  

Restricted cash – current

     106,808        33,653  

Restricted cash – long-term

     48,982        85,698  

Assets held for sale(1)

     5,000        —    

Vessels and equipment

     7,989,484        6,399,747  

Advances on newbuilding contracts and conversions costs

     693,329        1,706,500  

Derivative assets

     10,967        14,415  

Investment in equity accounted investees

     847,408        873,421  

Investment in direct financing leases

     702,426        704,953  

Other assets

     485,899        501,812  

Intangible assets

     91,697        94,666  

Goodwill

     168,571        168,571  
  

 

 

    

 

 

 

Total assets

  12,303,521     11,864,212  
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

  

Accounts payable and accrued liabilities

  454,552     480,049  

Current portion of long-term debt

  911,969     658,556  

Long-term debt

  6,268,977     6,141,492  

Derivative liabilities

  728,412     626,139  

In-process revenue contracts

  167,721     173,412  

Other long-term liabilities

  409,641     383,089  

Redeemable non-controlling interest

  12,059     12,842  

Equity:

  

Non-controlling interests

  2,283,434     2,290,305  

Shareholders of Teekay

  1,066,756     1,098,328  
  

 

 

    

 

 

 

Total liabilities and equity

  12,303,521     11,864,212  
  

 

 

    

 

 

 

 

(1)

In connection with the expected sale of an older shuttle tanker by Teekay Offshore, the vessel and equipment related to the vessel were classified as “Assets held for sale” as at March 31, 2015.

 

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TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

 

     Three Months Ended  
     March 31  
     2015
(unaudited)
    2014
(unaudited)
 

Cash and cash equivalents provided by (used for)

    

OPERATING ACTIVITIES

    
  

 

 

   

 

 

 

Net operating cash flow

  181,668     103,737  
  

 

 

   

 

 

 

FINANCING ACTIVITIES

Net proceeds from long-term debt

  786,048     306,085  

Scheduled repayments of long-term debt

  (110,810   (84,451

Prepayments of long-term debt

  (215,199   (130,000

Increase in restricted cash

  (4,452   (244

Net proceeds from equity issuances of subsidiaries

  20,280     —    

Equity contribution from joint venture partner

  —       6,500  

Distribution from subsidiaries to non-controlling interests

  (82,136   (96,125

Cash dividends paid

  (22,926   (23,467

Issuance of common stock upon exercise of stock options

  251     34,720  
  

 

 

   

 

 

 

Net financing cash flow

  371,056     13,018  
  

 

 

   

 

 

 

INVESTING ACTIVITIES

Expenditures for vessels and equipment

  (665,091   (106,299

Proceeds from sale of vessels and equipment

  8,918     —    

Repayments from joint ventures and joint venture partners

  15,916     1,478  

Investment in equity accounted investments

  (7,005   (50,322

Direct financing lease payments received

  2,527     5,228  

Increase in restricted cash (1)

  (34,082   —    

Other

  3,700     2,492  
  

 

 

   

 

 

 

Net investing cash flow

  (675,117   (147,423
  

 

 

   

 

 

 

Decrease in cash and cash equivalents

  (122,393   (30,668

Cash and cash equivalents, beginning of the period

  806,904     614,660  
  

 

 

   

 

 

 

Cash and cash equivalents, end of the period

  684,511     583,992  
  

 

 

   

 

 

 

 

(1)

Increase in restricted cash for the three months ended March 31, 2015 relates to Teekay Offshore’s cash held in escrow related to a holdback on the purchase price of three towing and offshore installation vessels during the period.

 

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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 income attributable to shareholders of Teekay, a non-GAAP financial measure, to net loss attributable to shareholders 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 income attributable to the shareholders 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      Three Months Ended  
     March 31, 2015      March 31, 2014  
     (unaudited)      (unaudited)  
     $      $ Per
Share (1)
     $      $ Per
Share (1)
 

Net income – GAAP basis

     43,852           49,122     

Adjust for: Net income attributable to non-controlling interests

     (53,616         (49,610   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss attributable to shareholders of Teekay

  (9,764   (0.13   (488   (0.01

Add (subtract) specific items affecting net loss:

  

Unrealized losses from derivative instruments(2)

  52,491     0.72      18,382     0.26   

Foreign exchange (gain) loss(3)

  (21,673   (0.30   749     0.01   

Net (gain) loss on sale of vessels(4)

  (1,643   (0.02   162     —     

Restructuring charges, net of recovery(5)

  3,802     0.05      639     0.01   

Realized gain upon termination of interest rate swap

  —       —        (1,000   (0.01

Dilution gain on share issuance by TIL (6)

  —       —        (4,108   (0.06

Asset impairments (7)

  15,496     0.21      —       —     

Pre-operational costs (8)

  3,598     0.05      —       —     

Other(9)

  5,348     0.08      (1,587   (0.01

Non-controlling interests’ share of items above(10)

  (31,925   (0.44   (9,273   (0.13
  

 

 

    

 

 

    

 

 

    

 

 

 

Total adjustments

  25,494     0.35      3,964     0.06   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income attributable to shareholders of Teekay

  15,730     0.22      3,476     0.05   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Basic per share amounts.

(2)

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

(3)

Foreign currency exchange 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 Company’s Norwegian Kroner bonds. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized.

(4)

Net gain on sale of vessels for the three months ended March 31, 2015 includes the gain on sale of a shuttle tanker. Net loss on sale of vessels for the three months ended March 31, 2014 includes the loss relating to the sale of four conventional tankers to TIL.

(5)

Restructuring charges for the three months ended March 31, 2015 primarily relate to the reorganization of the Company’s marine operations and corporate shared services. Restructuring charges for the three months ended March 31, 2014 primarily relate to the reorganization of the Company’s marine operations and termination of crew upon reflagging a shuttle tanker in Teekay Offshore.

(6)

The Company recognized a gain from the share issuance completed as part of TIL’s initial public offering in March 2014.

(7)

Includes the impairment of two shuttle tankers to their estimated fair values.

(8)

Relates to pre-operational costs and realized losses on interest rate swaps for the Knarr FPSO unit.

(9)

Other for the three months ended March 31, 2015 primarily relates to derecognition of deferred tax asset and unrealized foreign exchange losses in Sevan Marine AS and realized losses on foreign exchange forward contracts related to the upgrade costs of an FPSO. Other for the three months ended March 31, 2014 primarily relates to an external transaction fee related to Teekay Offshore’s acquisition of ALP, pre-operational costs for an FPSO unit nearing completion and an initial unrealized gain on the TIL stock purchase warrants issued to Teekay and Teekay Tankers.

(10)

If any of the specific items affecting net loss originate from a consolidated non-wholly-owned subsidiary, the net income attributable to non-controlling interests of these subsidiaries is recalculated without these specific items affecting net loss. The amount identified as “Non-controlling interests’ share of items above” in the table above is the cumulative change to the Company’s net income attributable to non-controlling interests by excluding the specific items affecting net loss.

 

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TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY BALANCE SHEET AS AT MARCH 31, 2015

(in thousands of U.S. dollars)

 

(unaudited)

 

     Teekay
Offshore
     Teekay
LNG
     Teekay
Tankers
     Teekay
Parent
    Consolidation
Adjustments(1)
    Total  

ASSETS

  

         

Cash and cash equivalents

     278,846        106,410        40,513        258,742       —          684,511  

Other current assets

     119,136        17,926        102,655        228,722       —          468,439  

Restricted cash

     69,972        56,632        —          29,186       —          155,790  

Assets held for sale

     5,000        —          —          —         —          5,000  

Vessels and equipment

     3,076,643        1,731,727        1,047,231        2,133,883       —          7,989,484  

Advances on newbuilding contracts and conversion costs

     395,945         298,362        —          (978     —          693,329  

Derivative assets

     1,679        —          4,617        4,671       —          10,967  

Investment in equity accounted investees

     64,061        683,825        60,999        66,024       (27,501     847,408  

Investment in direct financing leases

     21,312        681,114        —          —         —          702,426  

Other assets

     57,385        210,879        17,408        200,227       —          485,899  

Advances to (from) affiliates

     33,032        17,254        6,041        (56,327     —          —    

Equity investment in subsidiaries

     —          —          —          482,415       (482,415     —    

Intangibles and goodwill

     134,800        121,064        —          4,404       —          260,268  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  4,257,811     3,925,193     1,279,464     3,350,969     (509,916   12,303,521  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

  

Accounts payable and accrued liabilities

  133,069     50,632     25,493     245,358     —        454,552  

Advances from (to) affiliates

  125,724     52,749     14,863     (193,336   —        —    

Current portion of long-term debt

  395,008     180,133     147,004     189,824     —        911,969  

Long-term debt

  2,311,922     1,735,394     564,912     1,656,749     —        6,268,977  

Derivative liabilities

  408,389     206,617     17,306     96,100     —        728,412  

In-process revenue contracts

  85,407     36,330     —       45,984     —        167,721  

Other long-term liabilities

  55,178     106,107     4,862     243,494     —        409,641  

Redeemable non-controlling interest

  12,059     —       —       —       —        12,059  

Equity:

  

Non-controlling interests (2)

  50,021     12,902     —       40     2,220,471      2,283,434  

Equity attributable to shareholders/unitholders of publicly-listed entities

  681,034     1,544,329     505,024     1,066,756     (2,730,387   1,066,756  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

  4,257,811     3,925,193     1,279,464     3,350,969     (509,916   12,303,521  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

NET DEBT (3)

  2,358,112     1,752,485     671,403     1,558,645     —        6,340,645  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

(1)

Consolidation Adjustments column includes adjustments which eliminates transactions between subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers and Teekay Parent and Teekay Tanker’s investment in Teekay Operations.

(2)

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.

(3)

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

 

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TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2015

(in thousands of U.S. dollars)

 

(unaudited)

 

     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments(1)
    Total  

Revenues

     250,911       97,326       103,878       118,238       (24,491     545,862  

Voyage expenses

     (22,517     (318     (3,834     (87     1,086        (25,670

Vessel operating expenses

     (74,034     (21,634     (22,441     (66,094     —          (184,203

Time-charter hire expense

     (6,983     —         (15,003     (28,827     25,886        (24,927

Depreciation and amortization

     (53,604     (23,569     (13,672     (21,859     —          (112,704

General and administrative

     (14,880     (6,708     (3,300     (12,578     (488     (37,954

Asset impairments

     (15,496     —         —         —         —          (15,496

Gain on sale of vessels and equipment

     1,643       —         —         —         —          1,643  

Restructuring charges

     —         —         (5,324     (1,782     (2,020     (9,126
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

  65,040     45,097     40,304     (12,989   (27   137,425  

Interest expense

  (23,183   (10,104   (2,365   (15,694   —        (51,346

Interest income

  134     734     31     631     —        1,530  

Realized and unrealized losses on derivative instruments

  (51,648   (14,032   (1,587   (16,119   —        (83,386

Income tax (expense) recovery

  (845   225     68     1,547     —        995  

Equity income (loss)

  4,091     18,058     2,582     (3,849   (133   20,749  

Equity in earnings of subsidiaries (2)

  —       —       —       38,555     (38,555   —    

Foreign exchange (loss) gain

  (7,076   25,930     (48   (1,459   163      17,510  

Other income (loss)

  259     443     —       (387   60      375  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

  (13,228   66,351     38,985     (9,764   (38,492   43,852  

Less: Net income attributable to non-controlling interests (3)

  (3,998   (3,283   —       —       (46,335   (53,616
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

  (17,226   63,068     38,985     (9,764   (84,827   (9,764
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated (4)(5)

  127,807     72,705     53,976     3,807     (27   258,268  

CFVO - Equity Investments(6)

  8,854     46,304     4,176     3,226     27      62,587  

CFVO - Total

  136,661     119,009     58,152     7,033     —        320,855  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Consolidation Adjustments column includes adjustments which eliminates transactions between subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers and Teekay Parent and Teekay Tanker’s investment in Teekay Operations.

(2)

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

(3)

Net income attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income 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 (loss) income of Teekay’s publicly-traded subsidiaries.

(4)

CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. 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.

(5)

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 March 31, 2015, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $45.3 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(6)

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 reconciliations 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 THREE MONTHS ENDED MARCH 31, 2015

(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

     5,170       11,303        83,005       18,760       —         118,238  

Voyage expenses

     —         (78     (9     —         —         (87

Vessel operating expenses

     (785     (2,849     (56,893     (5,567     —         (66,094

Time-charter hire expense

     —         (10,436     (7,084     (11,307     —         (28,827

Depreciation and amortization

     (713     —          (21,259     113       —         (21,859

General and administrative

     (94     (416     (5,899     720       (6,889     (12,578

Restructuring charges

     —         —          —         (1,782     —         (1,782
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

  3,578     (2,476   (8,139   937     (6,889   (12,989
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

Income (loss) from vessel operations

  3,578     (2,476   (8,139   937     (6,889   (12,989

Depreciation and amortization

  713     —        21,259     (113   —       21,859  

Amortization of in-process revenue contracts and other

  —       —        (3,457   570     —       (2,887

Realized losses from the settlements of non-designated derivative instruments

  —       —        (2,176   —       —       (2,176
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Consolidated(2)(3)

  4,291     (2,476   7,487     1,394     (6,889   3,807  

CFVO - Equity(4)

  3,304     —        42     (120   —       3,226  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO - Total

  7,595     (2,476   7,529     1,274     (6,889   7,033  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

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

(2)

CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO – Consolidated represents 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.

(3)

In addition to the CFVO generated by its directly owned and in-chartered assets, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the three months ended March 31, 2015, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $45.3 million. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.

(4)

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 March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014. The Company defines free cash flow, a non-GAAP financial measure, as the sum of (a) 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) plus (b) distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers), net of Teekay Parent’s corporate general and administrative expenditures in the respective period (collectively, GPCO).

 

 

 

     Three Months Ended  
     March 31,
2015
    December 31,
2014
    September 30,
2014
    June 30,
2014
    March 31,
2014
 

Teekay Parent OPCO Cash Flow

          

Teekay Parent Cash Flow from Vessel

          

Operations (1)

          

Owned Conventional Tankers

     4,291       1,549       277       855       4,490  

In-Chartered Conventional Tankers

     (2,476     (5,067     (4,441     (4,818     (2,819

FPSOs

     7,487       18,077       (10,027     (25,700     (13,906

Other (2)

     1,381       7,679       5,021       9,748       12,408  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total (3)

  10,683     22,238     (9,170   (19,915   173  

Less:

Net interest expense (4)

  (17,534   (15,056   (13,000   (15,015   (16,151

Dry docking expenditures

  —       (3,652   (2,673   (378   (549
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Teekay Parent OPCO Cash Flow

  (6,851   3,530     (24,843   (35,308   (16,527
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Teekay Parent GPCO Cash Flow Daughter Company Distributions to Teekay Parent (5)

Limited Partner Interest (6)

Teekay LNG Partners

  17,646     17,646     17,439     17,439     17,439  

Teekay Offshore Partners

  12,819     12,819     12,819     12,819     12,819  

General Partner Interest

Teekay LNG Partners

  8,653     8,650     7,883     7,883     7,568  

Teekay Offshore Partners

  5,264     5,262     4,880     4,880     4,868  

Other Dividends

Teekay Tankers (6)(7)

  881     881     756     629     629  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Daughter Distributions

  45,263     45,258     43,777     43,650     43,323  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Corporate general and administrative expenses

  (6,889   (3,767   (4,068   (3,362   (5,658
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Parent GPCO Cash Flow

  38,374     41,491     39,709     40,288     37,665  

TOTAL TEEKAY PARENT FREE CASH FLOW

  31,523     45,021     14,866     4,980     21,137  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Teekay Parent Free Cash Flow per share

  0.43     0.62     0.21     0.07     0.30  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of common shares - Basic

  72,549,068     72,498,974     72,393,072     72,036,526     71,328,577  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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(1)

CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO 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 to this release for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

(2)

Includes ($0.01) million for the three month period ended March 31, 2015, $0.5 million for the three month period ended December 31, 2014 and $0.8 million for the three month period ended September 30, 2014 relating to 50 percent of the CFVO from Teekay Operations.

(3)

Excludes corporate general and administrative expenses relating to GPCO.

(4)

Excludes realized losses on the interest rate swap related to the debt facility secured by the Knarr FPSO unit up to commencement of operations on March 9, 2015 of $3.3 million for the three months ended March 31, 2015, $5.3 million for the three months ended December 31, 2014 and $4.1 million for the three months ended September 30, 2014. 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  
     March 31,
2015
     December 31,
2014
     September 30,
2014
     June 30,
2014
     March 31,
2014
 

Teekay LNG Partners

              

Distribution per common unit

   $ 0.7000      $ 0.7000      $ 0.6918      $ 0.6918      $ 0.6918  

Common units owned by Teekay Parent

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distribution

$ 17,645,792   $ 17,645,792   $ 17,439,084   $ 17,439,084   $ 17,439,084  

Teekay Offshore Partners

Distribution per common unit

$ 0.5384   $ 0.5384   $ 0.5384   $ 0.5384   $ 0.5384  

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   $ 12,819,018  

Teekay Tankers Ltd.

Dividend per share

$ 0.03   $ 0.03   $ 0.03   $ 0.03   $ 0.03  

Shares owned by Teekay Parent (7)

  29,364,141     29,364,141     25,197,475     20,976,530     20,976,530  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total dividend

$ 880,924   $ 880,924   $ 755,924   $ 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 March 31, 2015 and March 31, 2014. 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 adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign exchange forward contracts and a derivative charter contract. 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 March 31, 2015  
     (unaudited)  
     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
     Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Income (loss) from vessel operations

     65,040        45,097       40,304        (12,989     (27     137,425  

Depreciation and amortization

     53,604        23,569       13,672        21,859       —         112,704  

Amortization of in-process revenue contracts and other

     (3,142     (362     —          (2,887     —         (6,391

Realized losses from the settlements of non designated derivative instruments

     (2,694     —         —          (2,176     —         (4,870

Asset impairments, net of gain on sale of vessels and equipment

     13,853        —         —          —         —         13,853  

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

     1,146        4,401       —          —         —         5,547  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Consolidated

  127,807      72,705     53,976     3,807     (27   258,268  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
     Three Months Ended March 31, 2014  
     (unaudited)  
     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
     Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Income (loss) from vessel operations

     62,342        45,383       20,780        (16,638     —         111,867  

Depreciation and amortization

     48,488        24,110       12,502        18,358       —         103,458  

Amortization of in-process revenue contracts and other

     (3,142     (278     —          (6,580     —         (10,000

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

     (497     —         —          (788     —         (1,285

Loss on sale of vessels and equipment

     —          —         —          162       —         162  

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

     958        2,219       —          —         —         3,177  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Consolidated

  108,149      71,434     33,282     (5,486   —       207,379  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

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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 March 31, 2015 and March 31, 2014. 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 adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign exchange forward contracts and a derivative charter contract. 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 March 31, 2015      Three Months Ended March 31, 2014  
     (unaudited)      (unaudited)  
     At
100%
     Company’s
Portion(1)
     At
100%
    Company’s
Portion(2)
 

Revenues

     263,322        109,287         224,386       103,165   

Vessel and other operating expenses

     (110,981      (47,848      (101,092     (46,075

Depreciation and amortization

     (36,572      (16,207      (29,252     (14,529

Loss on sale of vessel

     —          —           (1,931     (966
  

 

 

    

 

 

    

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

  115,769      45,232      92,111     41,594   

Interest expense

  (28,591   (12,205   (22,076   (10,217

Realized and unrealized loss on derivative instruments

  (19,784   (6,997   (18,931   (6,726

Dilution gain on share issuance by TIL

  —       —        —       4,108   

Other loss

  (10,541   (4,748   (2,819   (1,266
  

 

 

    

 

 

    

 

 

   

 

 

 

Net income of equity accounted vessels

  56,853     21,282      48,285     27,494   

Pro forma equity income from Teekay Operations

  —       (533   —       —     
  

 

 

    

 

 

    

 

 

   

 

 

 

Equity income of equity accounted vessels

  56,853     20,749      48,285     27,494   
  

 

 

    

 

 

    

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

  115,769      45,232      92,111     41,594   

Depreciation and amortization

  36,572     16,207      29,252     14,529   

Loss on sale of vessel

  —       —        1,931     966   

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

  8,584      3,134      7,462     2,707   

Amortization of in-process revenue contracts and other

  (3,959   (2,013   (4,225   (2,146
  

 

 

    

 

 

    

 

 

   

 

 

 

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

  156,966      62,560      126,531     57,650   

Pro forma CFVO from Teekay Operations

  —       27      —       —     
  

 

 

    

 

 

    

 

 

   

 

 

 

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

  156,966      62,587      126,531     57,650   
  

 

 

    

 

 

    

 

 

   

 

 

 

 

(1)

The Company’s proportionate share of its equity accounted vessels and other investments ranges from 16 percent to 52 percent.

(2)

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

(3)

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

 

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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 December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014. 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 adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign exchange forward contracts and a derivative charter contract. 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 December 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

     836        (5,067     4,381        7,272        (3,767     3,655   

Depreciation and amortization

     713        —          20,854        (113     —          21,454   

Loss on sale of vessels and equipment

     —          —          282        —          —          282   

Amortization of in-process revenue contracts and other

     —          —         (5,943     —          —          (5,943

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

     —          —          (1,497     —          —          (1,497
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

  1,549      (5,067   18,077      7,159      (3,767   17,951   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Teekay Parent (loss) income from vessel operations

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

Depreciation and amortization

     713        —          21,145        (542     —          21,316   

Gain on sale of vessels and equipment

     —          —          (1,217     (7,285     —          (8,802

Amortization of in-process revenue contracts and other

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

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

     11        —          (167     —          —          (156
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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     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     (34,843     9,810        (3,362     (33,374

Depreciation and amortization

     710        —          18,296        (62     —          18,944   

Loan loss recoveries

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

Loss on sale of vessels and equipment

     340        —          —          —          —          340   

Amortization of in-process revenue contracts and other

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

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

     (34     —          (52     —          —          (86
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations - Teekay Parent

  855      (4,818   (25,700   9,748      (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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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 months ended March 31, 2015 and March 31, 2014. 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.

 

 

 

     Three Months Ended March 31, 2015  
     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Revenues

     250,911        97,326       103,878       118,238       (24,491     545,862  

Voyage expense

     (22,517     (318     (3,834     (87     1,086       (25,670
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

  228,394      97,008     100,044     118,151     (23,405   520,192  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended March 31, 2014  
     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Teekay
Corporation
Consolidated
 

Revenues

     259,234        101,490       61,759       112,505       (28,494     506,494  

Voyage expense

     (33,454     (1,333     (1,439     (756     1,970       (35,012
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

  225,780      100,157     60,320     111,749     (26,524   471,482  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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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 March 31, 2015, December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014. 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  
     March 31,
2015
    December 31,
2014
    September 30,
2014
    June 30,
2014
    March 31,
2014
 

Interest expense

     (51,346     (57,334     (52,206     (49,656     (49,333

Interest income

     1,530       1,465       2,786       793       1,783  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense - consolidated

  (49,816   (55,869   (49,420   (48,863   (47,550

Less:

  

Non-Teekay Parent net interest expense

  (34,753   (42,279   (37,944   (38,088   (35,135
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense net of interest income - Teekay Parent

  (15,063   (13,590   (11,476   (10,775   (12,415

Add:

  

Teekay Parent realized losses on interest rate swaps (1)

  (2,471   (1,466   (1,524   (4,240   (3,736
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense - Teekay Parent

  (17,534   (15,056   (13,000   (15,015   (16,151
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Teekay Parent realized losses on interest rate swaps exclude realized losses on the interest rate swap related to the debt facility secured by the Knarr FPSO unit up to commencement of operations on March 9, 2015 of $3.3 million for the three months ended March 31, 2015, $5.3 million for the three months ended December 31, 2014 and $4.1 million for the three months ended September 30, 2014 and exclude 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 cash flows; the timing for implementation of the Company’s new dividend policy, the initial dividend increase, and expectations for future dividend increases by Teekay Parent and distribution increases by its daughter entities; the sale of the Knarr FPSO, including the sales price, the timing of completion of testing and contract start-up at full rate for this FPSO unit, the timing of Teekay Offshore’s acquisition, and the consideration for the acquisition; the start-up date of the shuttle tanker CoA contract with EnQuest PLC., including the required roundtrip voyages; the dividend contributions of any future projects awarded to the Company’s daughter companies; the total cost and timing for the delivery of newbuilding and conversion projects and timing of commencement of associated time-charter contracts; the timing and certainty of securing charter contracts for unchartered vessels or offshore units; ALP’s position as the world’s largest owner and operator of dynamic positioning towing and offshore installation vessels, and the capabilities of those vessels; the timing and certainty of exercising any of Teekay LNG’s existing options to order up to four additional MEGI LNG carrier newbuildings; expected fuel-efficiency and emission levels associated with MEGI engines; the outcome of Teekay LNG’s dispute over the Magellan Spirit off-hire incident and claimed charter contract termination, as well as the expected insurance coverage; the timing, certainty and purchase price of pending and future vessel acquisitions; timing of delivery of a charter-in tanker. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of newbuilding orders or greater or less than anticipated rates of vessel scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, 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; failure by Teekay Offshore and Teekay LNG to complete its vessel acquisitions; actual performance of the MEGI engines; failure by the Company or its daughter companies to secure charter contracts for unchartered vessels or offshore units; factors affecting the outcome of the Partnership’s dispute over the Magellan Spirit; potential delays in the commencement of full operations of the Knarr FPSO unit; the inability of the Company to complete vessel sale transactions to its publicly-traded subsidiaries or to third parties, including obtaining Board of Directors and Conflicts Committee approvals; failure by the Company’s Board of Directors to approve the implementation of the new Teekay Parent dividend policy in the second quarter of 2015, including the initial dividend increase; failure of the respective Board of Directors of the general partners of Teekay Offshore and Teekay LNG to approve future distribution increases; conditions in the United States capital markets; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2014. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

 

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