Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported
results for the first quarter ended March 31, 2020. These results
include the Company’s two publicly-listed consolidated
subsidiaries, Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP) and
Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) (collectively, the
Daughter Entities), and all remaining subsidiaries and
equity-accounted investments. Teekay, together with its
subsidiaries other than the Daughter Entities, is referred to in
this release as Teekay Parent. Please refer to the first quarter
2020 earnings releases of Teekay LNG and Teekay Tankers, which are
available on Teekay's website at www.teekay.com, for additional
information on their respective results.
Financial Summary
| |
|
Three Months Ended |
| |
March 31, |
December 31, |
March 31, |
|
(in thousands of U.S. dollars, except per share
amounts) |
2020 |
2019 (2) |
2019 (2) |
|
(unaudited) |
(unaudited) |
(unaudited) |
| TEEKAY
CORPORATION CONSOLIDATED |
|
|
| GAAP
FINANCIAL COMPARISON |
|
|
|
| Revenues |
574,054 |
|
570,285 |
|
486,873 |
|
| Income from vessel
operations |
128,896 |
|
178,736 |
|
84,232 |
|
| Equity income
(loss) |
2,313 |
|
31,900 |
|
(61,653 |
) |
| Net (loss) income
attributable to |
|
|
|
|
|
shareholders of Teekay |
(49,805 |
) |
11,343 |
|
(84,257 |
) |
| (Loss) income per
share attributable to |
|
|
|
| |
shareholders of Teekay |
(0.49 |
) |
0.11 |
|
(0.84 |
) |
| NON-GAAP
FINANCIAL COMPARISON |
|
|
|
| Total adjusted
revenues (1) |
681,353 |
|
664,519 |
|
600,903 |
|
| Total adjusted
EBITDA (1)(3) |
342,198 |
|
325,465 |
|
236,960 |
|
| Adjusted net
income (loss) attributable |
|
|
|
| |
to shareholders of Teekay
(1) |
25,259 |
|
31,282 |
|
(12,955 |
) |
| Adjusted net
income (loss) per share |
|
|
|
| |
attributable to shareholders
of Teekay (1) |
0.25 |
|
0.31 |
|
(0.13 |
) |
| TEEKAY
PARENT |
|
|
|
| NON-GAAP
FINANCIAL COMPARISON |
|
|
|
| Teekay Parent
adjusted EBITDA (1) |
5,139 |
|
13,822 |
|
(1,802 |
) |
| Total Teekay
Parent free cash flow (1) |
52,689 |
|
4,943 |
|
(13,763 |
) |
(1) These are non-GAAP financial
measures. Please refer to “Definitions and Non-GAAP Financial
Measures” and the Appendices to this release for definitions of
these terms and reconciliations of these non-GAAP financial
measures as used in this release to the most directly comparable
financial measures under United States generally accepted
accounting principles (GAAP).
(2) Comparative balances relating to the
three months ended December 31, 2019 and March 31, 2019 have been
updated to reflect results as presented in the Company’s Annual
Report on Form 20-F and Report on Form 6-K for the year ended
December 31, 2019 and three months ended March 31, 2020,
respectively.
(3) Total Adjusted EBITDA in the quarter
ended March 31, 2019 included $22.3 million related to the
Company's ownership interest in Altera Infrastructure L.P.
(Altera), which was sold in the second quarter of 2019.
CEO Commentary
“The first quarter of 2020 marked the second
consecutive quarterly adjusted profit for Teekay, as we recorded
consolidated adjusted net income of $25.3 million, or $0.25 per
share, and saw our total adjusted EBITDA increase by approximately
$128 million, or 59 percent, from the same period of the prior
year(1)” commented Kenneth Hvid, Teekay’s President and CEO.
“Looking ahead to the second quarter of 2020, we are
expecting another strong quarter supported by our stable LNG cash
flows and the firm tanker rates we have already secured in the
second quarter of 2020.”
Mr. Hvid continued, “Our strong results for the
first quarter of 2020 can be attributed to higher earnings in each
of our businesses. Teekay Tankers experienced significantly
stronger spot tanker rates, reaching its highest level in more
than 10 years, which continued into the second quarter, while
Teekay LNG had robust earnings from a complete quarter contribution
from its fully delivered LNG fleet, which is now 100 percent fixed
through 2020, and our directly-owned FPSO units performed better,
primarily due to a new bareboat contract structure for the Foinaven
FPSO secured in March 2020.”
"While COVID-19 is having an unprecedented
impact on the world and is clearly a major focus for us throughout
the Teekay Group, we are fortunate to be in a position where our
operating results have increased to-date in 2020 and we have had
minimal impacts on our operations due to the pandemic,” commented
Mr. Hvid. “We are truly proud of how our seafarers and onshore
colleagues have responded to COVID-19, implementing new standards
which focus on the health and well-being of everyone involved
in our organization, especially our colleagues at sea, while
maintaining consistently safe and efficient operations of our
assets for our customers."
“Moving forward, we continue to execute on our
strategic priorities across the Teekay Group,” commented Mr. Hvid.
“At Teekay Parent, we delevered our balance sheet with the $67
million in proceeds received in April 2020 as part of the Foinaven
FPSO unit’s new contract that effectively covers the remaining life
of the unit, and eliminates our exposure to the previous
loss-making contract; and we simplified our structure and fully
aligned our interests with those of Teekay LNG's other common
unitholders through the elimination of our Teekay LNG Incentive
Distribution Rights in exchange for 10.75 million newly-issued
Teekay LNG common units."
Mr. Hvid continued, “In the first quarter of
2020, our consolidated pro forma net debt(2) declined by over $580
million as a result of our strong operating cash flows, proceeds
from asset sales and the new Foinaven contract. With our balance
sheets continuing to strengthen, total pro forma liquidity(2) of
over $900 million for the Teekay Group as at March 31, 2020,
extensive contracted revenue from Teekay LNG and higher contracted
revenue and strong rates to date at Teekay Tankers, and with no
committed growth capital expenditures or significant upcoming debt
maturities, we believe that the Teekay Group is financially
well-positioned for both any potential market volatility in the
near-term and the longer-term future of marine energy
transportation.”
(1) Excluding the $22.3 million
contribution during the first quarter of 2019 related to our equity
interest in Altera (Teekay Offshore), which was sold in May
2019.
(2) Pro forma for the $67 million upfront
cash payment received in April 2020 related to the new Foinaven
FPSO contract and $14 million of proceeds related to the closing of
Teekay Tankers' sale of a portion of its ship-to-ship transfer
business.
Summary of Results
Teekay Corporation Consolidated
The Company's consolidated results during the
quarter ended March 31, 2020 increased compared to the same period
of the prior year, primarily due to: higher average spot tanker
rates earned by Teekay Tankers in the first quarter of 2020; higher
earnings in Teekay LNG due to the delivery and contract
commencement of several newbuildings during the past year,
commencement of the terminal use payments in January 2020 to Teekay
LNG's 30 percent-owned joint venture with National Oil & Gas
Authority, Gulf Investment Corporation and Samsung C&T (the
Bahrain LNG Joint Venture), as well as higher revenues earned from
certain existing LNG carriers and multi-gas vessels; and lower
general and administrative expenses incurred in the first quarter
of 2020.
In addition, consolidated GAAP net income was
positively impacted in the three months ended March 31, 2020,
compared to the same quarter of the prior year, by various items,
including a $44.9 million gain realized upon the commencement
of the sales-type lease for the Foinaven FPSO unit as a result of a
new bareboat charter agreement, and a $64.9 million loss that was
recognized in the first quarter of 2019 on the Company's
equity-accounted investment in Altera. These increases were
partially offset by write-downs of six multi-gas carriers in Teekay
LNG and two FPSO units in the first quarter of 2020 totaling $91.5
million, as well as higher unrealized losses on non-designated
derivative instruments.
Total adjusted EBITDA(1) in the first quarter of
2019 included $22.3 million related to Teekay Parent's ownership
interest in Altera, which was sold in the second quarter of
2019.
Teekay Parent
Total Teekay Parent Free Cash Flow(1) was $52.7
million during the first quarter of 2020, compared to negative
$13.8 million for the same period of the prior year, primarily due
to: higher contribution from the Foinaven FPSO unit due to the
upfront receipt of lease payment totaling $56.1 million upon
entering into the new contract structure in March 2020; lower net
interest expense(1) as a result of the repurchase of unsecured
bonds over the past year and the bond refinancing completed in May
2019; higher contribution from the Hummingbird FPSO unit due to
higher revenues and lower operating costs; lower corporate general
and administrative expenses incurred in the first quarter of 2020;
and a 32 percent increase in Teekay LNG’s quarterly cash
distributions, commencing with the distribution relating to the
first quarter of 2020. Please refer to Appendix D of this
release for additional information about Teekay Parent's Free Cash
Flow(1).
In addition, GAAP net income was positively
impacted in the three months ended March 31, 2020, compared to GAAP
net loss for the same quarter of the prior year, by various items,
including the $64.9 million loss that was recognized in the first
quarter of 2019 on Teekay Parent's equity-accounted investment in
Altera, offset by $46.5 million in write-downs of two FPSO units in
the first quarter of 2020.
(1) This is a non-GAAP financial
measure. Please refer to “Definitions and Non-GAAP Financial
Measures” and the Appendices to this release for a definition of
this term and a reconciliation of this non-GAAP financial measure
as used in this release to the most directly comparable financial
measures under GAAP.
Summary Results of Daughter
Entities
Teekay LNG
Teekay LNG’s net (loss) income, adjusted net
income and total adjusted EBITDA(1) for the three months ended
March 31, 2020, compared to the same quarter of the prior year,
were positively impacted by: earnings from the six liquefied
natural gas (LNG) carrier newbuildings which delivered into Teekay
LNG's consolidated fleet and equity-accounted joint ventures
between January and December 2019; commencement of the terminal use
payments in January 2020 to Teekay LNG's Bahrain LNG Joint Venture;
higher earnings from Teekay LNG's 52 percent-owned joint venture
with Marubeni Corporation (the MALT Joint Venture) as a result of
the charter contracts for two joint venture LNG vessels that were
secured at higher rates in June and July 2019; and higher earnings
from Teekay LNG's 50 percent-owned joint venture with Exmar NV (the
Exmar LPG Joint Venture) from higher LPG charter rates earned.
These increases were partially offset by a
reduction in earnings upon the sales of two LNG carriers and two
conventional tankers between January 2019 and January 2020 and
lower earnings from the Magellan Spirit upon its redeployment in
May 2019, which is currently chartered-in from the MALT Joint
Venture.
In addition, GAAP net (loss) income attributable
to the partners and preferred unitholders was negatively impacted
in the three months ended March 31, 2020, compared to the same
quarter of the prior year, primarily due to a $45 million
write-down of six multi-gas carriers in the first quarter of
2020.
Please refer to Teekay LNG's first quarter 2020
earnings release for additional information on the financial
results for this entity.
Teekay Tankers
Teekay Tankers' net income, adjusted net
income(1), and total adjusted EBITDA(1) for the three months ended
March 31, 2020 significantly increased compared to the same period
of the prior year, primarily due to higher average spot tanker
rates earned in the first quarter of 2020.
Teekay Tankers has so far secured spot tanker
rates for its Suezmax and Aframax-sized vessels of $52,100 per day
and $33,600 per day based on 69 percent and 62 percent of the
available spot revenue days fixed to-date in the second quarter of
2020, respectively, compared to $49,100 per day and $34,400 per day
in the first quarter of 2020, respectively.
Please refer to Teekay Tankers' first quarter
2020 earnings release for additional information on the financial
results for this entity.
(1) This is a non-GAAP financial
measure. Please refer to “Definitions and Non-GAAP Financial
Measures” and the Appendices to this release for a definition of
this term and a reconciliation of this non-GAAP financial measure
as used in this release to the most directly comparable financial
measures under GAAP.
Summary of Recent Events
Teekay Parent
In May 2020, Teekay Parent and Teekay LNG
completed the elimination of Teekay LNG's IDRs in exchange for the
issuance to Teekay Parent of 10.75 million newly-issued Teekay LNG
common units. Following the completion of this transaction on May
11, 2020, Teekay Parent now beneficially owns approximately 36
million of the Partnership's common units and remains the sole
owner of the general partner of Teekay LNG, which together
represents an economic interest of approximately 42 percent in
Teekay LNG.
In March 2020, Teekay Parent entered into a new
bareboat charter contract with the Foinaven field operator (Britoil
Limited, a subsidiary of BP p.l.c.) for the Foinaven FPSO
unit for up to ten years (the Contract). Under the terms
of the Contract, Teekay Parent is entitled to an upfront payment of
approximately $67 million in cash, which was received in April
2020, and will receive a nominal per day rate over the life of the
Contract, and a lump sum payment at the end of the Contract period,
which is expected to cover the costs of recycling the FPSO unit in
accordance with the EU Ship Recycling Regulations. As part of
the transaction, Altera entered into agreements with the Foinaven
field operator directly to provide operations and shuttle tanker
services for the Foinaven FPSO.
Teekay LNG
In May 2020, the MALT Joint Venture chartered
the Marib Spirit LNG carrier to an international trading company
for a period of six months, which is expected to commence in
mid-June 2020.
In April 2020, the MALT Joint Venture secured
new charters for the Arwa Spirit and the Methane Spirit LNG
carriers for periods of 12 and eight months, respectively. The new
charters are expected to commence upon completion and in direct
continuation of their existing charters in May and July 2020,
respectively.
In April 2020, Teekay LNG successfully
refinanced its existing $225 million unsecured revolving credit
facility, which was scheduled to mature in November 2020, with a
new two-year facility of the same amount and pricing consistent
with the previous facility of LIBOR plus a margin of 140 basis
points.
In December 2018, the Board of Directors of
Teekay LNG's general partner approved a $100 million common unit
repurchase program. Since that time, Teekay LNG has repurchased a
total of 3.63 million common units, or approximately 4.6 percent of
the outstanding common units immediately prior to commencement of
the program, for a total cost of $44.2 million, representing an
average repurchase price of $12.16 per unit.
Teekay Tankers
Since the beginning of the year, Teekay Tankers
has entered into time charter-out contracts for five Suezmax
tankers, each for a duration of one year at an average rate of
$45,600 per day, one Suezmax time charter-out contract for six
months at $52,500 per day, and three time charter-out contracts for
Aframax-sized vessels for one to two years at an average rate of
$26,750 per day.
In late-April 2020, Teekay Tankers closed its
previously announced sale of a portion of its oil and gas
ship-to-ship transfer support business, which also provides gas
terminal management and gas consulting services, for approximately
$27 million, of which $14.3 million has been received with the
remaining amount due in the third quarter of 2020. Teekay Tankers
retained its entire Full Service Lightering business that operates
in the U.S. Gulf, which provides ship-to-ship oil transfers for
both U.S. crude imports and exports. In addition, Teekay Tankers
will continue to operate oil ship-to-ship transfer support services
in North America and the Caribbean, a business that has synergies
with its core Full Service Lightering business.
Liquidity
As at March 31, 2020, Teekay Parent had
total liquidity of approximately $87.1 million (consisting of $48.4
million of cash and cash equivalents and $38.7 million undrawn on a
revolving credit facility). Giving pro forma effect for the
$67 million upfront payment received in early April 2020 relating
to the new Foinaven FPSO bareboat charter contract, Teekay Parent's
total liquidity would have been approximately $154 million as of
March 31, 2020.
On a consolidated basis, Teekay had consolidated
total liquidity of approximately $827.9 million (consisting of
$566.4 million of cash and cash equivalents, including cash held
for sale, and $261.5 million of undrawn capacity from its revolving
credit facilities). Giving pro forma effect for the $67 million
upfront payment received in early April 2020 relating to the new
Foinaven FPSO bareboat charter contract and the $14 million of
proceeds from Teekay Tankers' sale of a portion of its ship-to-ship
transfer business that closed in April 2020, Teekay's consolidated
total liquidity would have been approximately $910 million as of
March 31, 2020.
Conference Call
The Company plans to host a conference call on
Thursday, May 21, 2020 at 11:00 a.m. (ET) to discuss its
results for the first quarter of 2020. All shareholders and
interested parties are invited to listen to the live conference
call by choosing from the following options:
- By dialing (888) 254-3590 or (647)
794-4605, if outside North America, and quoting conference ID code
9177823.
- 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 one year).
An accompanying First Quarter 2020 Earnings
Presentation will also be available at www.teekay.com in advance of
the conference call start time.
About Teekay
Teekay is a leading provider of international
crude oil and gas marine transportation services and also provides
offshore production. Teekay provides these services primarily
through its directly-owned fleet and its controlling ownership
interests in Teekay LNG Partners L.P. (NYSE:TGP), one of the
world’s largest independent owners and operators of LNG carriers,
and Teekay Tankers Ltd. (NYSE:TNK), one of the world’s largest
owners and operators of mid-sized crude tankers. The consolidated
Teekay entities manage and operate total assets under management of
approximately $10 billion, comprised of approximately 140 liquefied
gas, offshore, and conventional tanker assets. With offices in 10
countries and approximately 5,500 seagoing and shore-based
employees, Teekay provides a comprehensive set of marine services
to the world’s leading oil and gas companies.
Teekay’s common stock is listed on the New York
Stock Exchange where it trades under the symbol “TK”.
For Investor Relations enquiries contact:Ryan
HamiltonTel: +1 (604) 609-2963Website:
www.teekay.com
Definitions and Non-GAAP Financial
Measures
This release includes various financial measures
that are non-GAAP financial measures as defined under the rules of
the Securities and Exchange Commission (SEC). These non-GAAP
financial measures, which include Adjusted Net Income (Loss)
Attributable to Shareholders of Teekay, Teekay Parent Free Cash
Flow, Total Adjusted Revenues, Net Interest Expense, Adjusted
Equity Income and Adjusted EBITDA, are intended to provide
additional information and should not be considered substitutes for
measures of performance prepared in accordance with GAAP. In
addition, these measures do not have standardized meanings across
companies, and therefore may not be comparable to similar measures
presented by other companies. The Company believes that certain
investors use this information to evaluate the Company’s financial
performance, as does management.
Non-GAAP Financial Measures
Total Adjusted EBITDA represents net income
(loss) before interest, taxes, depreciation and amortization,
foreign exchange gain (loss), items included in other (loss)
income, write-down and loss on sale, gain on commencement of
sales-type lease, equipment and other operating assets,
amortization of in-process revenue contracts, adjustments for
direct financing and sales-type leases to a cash basis, unrealized
credit loss adjustments, unrealized (losses) gains on derivative
instruments, realized losses on interest rate swaps, realized
losses on interest rate swap amendments and terminations,
write-downs related to equity-accounted investments, and our share
of the above items in non-consolidated joint ventures which are
accounted for using the equity method of accounting.
Consolidated Adjusted EBITDA represents Adjusted
EBITDA from vessels that are consolidated on the Company's
financial statements. Adjusted EBITDA from Equity-Accounted
Vessels represents the Company's proportionate share of Adjusted
EBITDA from its equity-accounted vessels. The Company does not have
the unilateral ability to determine whether the cash generated by
its equity-accounted vessels is retained within the entity in which
the Company holds the equity-accounted investments or distributed
to the Company and other owners. In addition, the Company does not
control the timing of any such distributions to the Company and
other owners. Total Adjusted EBITDA represents Consolidated
Adjusted EBITDA plus Adjusted EBITDA from Equity-Accounted Joint
Ventures. Adjusted EBITDA is a non-GAAP financial measure used by
certain investors and management to measure the operational
performance of companies. Please refer to Appendices C and E of
this release for reconciliations of Adjusted EBITDA to net income
(loss) and equity (loss) income, respectively, which are the most
directly comparable GAAP measures reflected in the Company’s
consolidated financial statements.
Total Adjusted Revenues represents the Company's
revenues from its consolidated vessels, as shown in the Company's
Consolidated Statements of Income (Loss), and its proportionate
ownership percentage of the revenues from its equity-accounted
joint ventures, as shown in Appendix E of this release, less the
Company's proportionate share of revenues earned directly from its
equity-accounted joint ventures. Please refer to Appendix E of this
release for a reconciliation of this non-GAAP financial measure to
revenues and equity income, the most directly comparable GAAP
measure reflected in the Company's consolidated financial
statements. The Company does not have the unilateral ability
to determine whether the cash generated by its equity-accounted
vessels is retained within the entity in which the Company holds
the equity-accounted investments or distributed to the Company and
other owners. In addition, the Company does not control the timing
of any such distributions to the Company and other owners.
Adjusted Net Income (Loss) Attributable to
Shareholders of Teekay excludes items of income or loss from GAAP
net income (loss) that are typically excluded by securities
analysts in their published estimates of the Company’s financial
results. The Company believes that certain investors use this
information to evaluate the Company’s financial performance, as
does management. Please refer to Appendix A of this release for a
reconciliation of this non-GAAP financial measure to net income
(loss), and refer to footnote (3) of the statements of income
(loss) for a reconciliation of adjusted equity income to equity
income (loss), the most directly comparable GAAP measure reflected
in the Company’s consolidated financial statements.
Teekay Parent Financial
Measures
Teekay Parent Adjusted EBITDA represents the sum
of (a) distributions or dividends (including payments-in-kind)
relating to a given quarter (but received by Teekay Parent in the
following quarter) as a result of ownership interests in its
consolidated publicly-traded subsidiaries (Teekay LNG and Teekay
Tankers) and its equity-accounted investment in Altera prior to it
being sold in May 2019, net of Teekay Parent’s corporate general
and administrative expenditures for the given quarter and (b)
Adjusted EBITDA attributed to Teekay Parent’s directly-owned and
chartered-in assets.
Teekay Parent Free Cash Flow represents Teekay
Parent Adjusted EBITDA, plus upfront cash receivable in respect of
a sales-type lease, less Teekay Parent’s net interest expense for
the given quarter. Net Interest Expense includes interest expense
(excluding the amortization of prepaid loan costs), interest income
and realized losses on interest rate swaps. Please refer to
Appendices B, C, D and E of this release for further details and
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP measures reflected in the Company’s
consolidated financial statements.
Teekay CorporationSummary Consolidated
Statements of Income (Loss)(in thousands of U.S. dollars,
except share and per share data)
| |
Three Months Ended |
| |
March 31, |
December 31, |
March 31, |
| |
2020 |
2019 (1) |
2019 (1) |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
|
| Revenues |
574,054 |
|
570,285 |
|
486,873 |
|
| |
|
|
|
| Voyage expenses |
(121,564 |
) |
(113,655 |
) |
(108,783 |
) |
| Vessel operating expenses |
(153,293 |
) |
(165,216 |
) |
(156,992 |
) |
| Time-charter hire expense |
(27,056 |
) |
(31,174 |
) |
(29,838 |
) |
| Depreciation and
amortization |
(72,917 |
) |
(71,083 |
) |
(72,107 |
) |
| General and administrative
expenses |
(18,277 |
) |
(17,588 |
) |
(22,972 |
) |
| Write-down and loss on sale
(2) |
(94,606 |
) |
(5,546 |
) |
(3,328 |
) |
| Gain on commencement of
sales-type lease (3) |
44,943 |
|
14,349 |
|
— |
|
| Restructuring charges (4) |
(2,388 |
) |
(1,636 |
) |
(8,621 |
) |
|
Income from vessel operations |
128,896 |
|
178,736 |
|
84,232 |
|
| |
|
|
|
| Interest expense |
(62,520 |
) |
(67,476 |
) |
(73,671 |
) |
| Interest income |
2,803 |
|
1,397 |
|
2,689 |
|
| Realized and unrealized (loss)
gain on non-designated derivative instruments (5) |
(21,663 |
) |
4,592 |
|
(5,423 |
) |
| Equity income (loss) (6) |
2,313 |
|
31,900 |
|
(61,653 |
) |
| Income tax expense (7) |
(3,792 |
) |
(13,951 |
) |
(5,036 |
) |
| Foreign exchange gain
(loss) |
6,646 |
|
(10,721 |
) |
(2,630 |
) |
| Other
(loss) income – net |
(681 |
) |
(1,980 |
) |
28 |
|
| Net income
(loss) |
52,002 |
|
122,497 |
|
(61,464 |
) |
| Net
income attributable to non-controlling interests |
(101,807 |
) |
(111,154 |
) |
(22,793 |
) |
|
Net (loss) income attributable to the shareholders
of Teekay Corporation |
(49,805 |
) |
11,343 |
|
(84,257 |
) |
| (Loss) earnings per common
share of Teekay Corporation |
|
|
|
|
- Basic |
$ |
(0.49 |
) |
$ |
0.11 |
|
$ |
(0.84 |
) |
|
- Diluted |
$ |
(0.49 |
) |
$ |
0.11 |
|
$ |
(0.84 |
) |
| Weighted-average number of
common |
|
|
|
| shares outstanding |
|
|
|
|
- Basic |
100,887,551 |
|
100,784,425 |
|
100,520,421 |
|
|
- Diluted |
100,887,551 |
|
101,425,574 |
|
100,520,421 |
|
| |
|
|
|
|
|
|
(1) Comparative balances relating to the
three months ended December 31, 2019 and March 31, 2019 have been
updated to reflect results as presented in the Company’s Annual
Report on Form 20-F and Report on Form 6-K for the year ended
December 31, 2019 and three months ended March 31, 2020,
respectively.
(2) Write-down and loss on sale for the
three months ended March 31, 2020 includes write-downs of six
multi-gas carriers totaling $45.0 million and write-downs of two
FPSO units totaling $46.5 million.
(3) Gain on commencement of sales-type
lease for the three months ended March 31, 2020 includes a $44.9
million gain relating to the commencement of the sales-type lease
for the Foinaven FPSO unit as a result of a new bareboat charter
agreement. Gain on commencement of sales-type lease for the three
months ended December 31, 2019 includes a $14.3 million gain upon
derecognition of the vessels and reclassification as sales-type
leases as a result of Awilco fulfilling its obligation to
repurchase from Teekay LNG the WilPride and WilForce LNG
carriers.
(4) Restructuring charges for the three
months ended March 31, 2019 included approximately $6.5 million
related to severance costs resulting from the termination of
certain management services contracts in Teekay Parent, which were
fully recovered from the customer and such recovery is included in
Revenues. The remaining amount related to severance costs
associated with the sale and termination of the charter contract of
the Toledo Spirit Suezmax tanker in Teekay LNG.
(5) Realized and unrealized (losses) gains
related to derivative instruments that are not designated in
qualifying hedging relationships for accounting purposes are
included as a separate line item in the consolidated statements of
income (loss). The realized losses relate to the amounts the
Company actually 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:
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 |
2019 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Realized (losses)
gains relating to |
|
|
|
|
|
Interest rate swap agreements |
(2,677 |
) |
(2,576 |
) |
(1,688 |
) |
| |
Foreign currency forward
contracts |
(241 |
) |
(147 |
) |
— |
|
| |
Forward
freight agreements |
(49 |
) |
1,097 |
|
(13 |
) |
|
|
|
(2,967 |
) |
(1,626 |
) |
(1,701 |
) |
| Unrealized
(losses) gains relating to |
|
|
|
| |
Interest rate swap
agreements |
(18,812 |
) |
6,961 |
|
(6,021 |
) |
| |
Foreign currency forward
contracts |
202 |
|
336 |
|
— |
|
| |
Stock purchase warrants |
— |
|
— |
|
2,316 |
|
| |
Forward
freight agreements |
(86 |
) |
(1,079 |
) |
(17 |
) |
|
|
|
(18,696 |
) |
6,218 |
|
(3,722 |
) |
| Total
realized and unrealized (losses) gainson derivative
instruments |
(21,663 |
) |
4,592 |
|
(5,423 |
) |
(6) The Company’s proportionate share of
items within equity income (loss) as identified in Appendix A of
this release is detailed in the table below. By excluding these
items from equity income (loss) as reflected in the consolidated
statements of income (loss), the Company believes the resulting
adjusted equity income is a normalized amount that can be used to
evaluate the financial performance of the Company’s
equity-accounted investments. Adjusted equity income is a non-GAAP
financial measure.
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 |
2019 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Equity income
(loss) |
2,313 |
|
31,900 |
|
(61,653 |
) |
| Proportionate
share of unrealized losses (gains) |
|
|
|
|
|
on derivative instruments |
22,204 |
|
(6,271 |
) |
8,765 |
|
| Write-down of
investment in Altera(i) |
— |
|
— |
|
64,900 |
|
| Other
(ii) |
8,441 |
|
1,436 |
|
— |
|
| Equity
income adjusted for items in Appendix A |
32,958 |
|
27,065 |
|
12,012 |
|
(i) During the three months ended
March 31, 2019, the Company recognized a write-down of $64.9
million on its equity-accounted investment in Altera related to the
sale of its investment in Altera to Brookfield Business Partners
L.P. (or Brookfield), which occurred in May 2019. (ii)
Other for the three months ended March 31, 2020 includes credit
loss provision adjustments to the Company's financial instruments
upon adoption of ASU 2016-13, Financial Instruments - Credit
Losses: Measurement of Credit Losses on Financial
Instruments.
(7) Income tax expense for the three
months ended December 31, 2019 includes adjustments to freight tax
accruals.
Teekay CorporationSummary Consolidated
Balance Sheets(in thousands of U.S. dollars)
| |
As at March 31, |
As at December 31, |
As at March 31, |
| |
2020 |
2019 (1) |
2019 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
ASSETS |
|
|
|
Cash and cash equivalents - Teekay Parent (2) |
48,366 |
|
104,196 |
|
213,090 |
|
| Cash and cash
equivalents - Teekay LNG |
312,710 |
|
160,221 |
|
122,589 |
|
| Cash and cash
equivalents - Teekay Tankers |
203,325 |
|
88,824 |
|
75,045 |
|
| Assets held for
sale |
50,818 |
|
65,458 |
|
— |
|
| Accounts
receivable and other current assets |
359,705 |
|
393,406 |
|
413,297 |
|
| Restricted cash -
Teekay Parent |
3,569 |
|
2,048 |
|
2,040 |
|
| Restricted cash -
Teekay LNG |
113,528 |
|
93,070 |
|
78,015 |
|
| Restricted cash -
Teekay Tankers |
6,755 |
|
6,508 |
|
5,524 |
|
| Vessels and
equipment - Teekay Parent |
18,791 |
|
95,984 |
|
292,653 |
|
| Vessels and
equipment - Teekay LNG |
2,959,067 |
|
3,027,342 |
|
3,403,379 |
|
| Vessels and
equipment - Teekay Tankers |
1,676,213 |
|
1,750,166 |
|
1,864,425 |
|
| Operating lease
right-of-use assets |
91,624 |
|
159,638 |
|
173,945 |
|
| Net investment in
direct financing and sales-type leases |
625,541 |
|
818,809 |
|
571,796 |
|
| Investments in and
loans to equity-accounted investments |
1,083,741 |
|
1,173,728 |
|
1,106,572 |
|
| Other
non-current assets |
130,051 |
|
133,466 |
|
159,115 |
|
|
Total Assets |
7,683,804 |
|
8,072,864 |
|
8,481,485 |
|
|
LIABILITIES AND EQUITY |
|
|
| Accounts payable
and other current liabilities |
427,640 |
|
430,497 |
|
346,241 |
|
| Liabilities
associated with assets held for sale |
2,535 |
|
2,980 |
|
— |
|
| Short-term
debt |
55,000 |
|
50,000 |
|
25,000 |
|
| Current portion of
long-term debt - Teekay Parent |
60,000 |
|
86,674 |
|
255,458 |
|
| Current portion of
long-term debt - Teekay LNG |
398,839 |
|
463,047 |
|
201,362 |
|
| Current portion of
long-term debt - Teekay Tankers |
55,685 |
|
68,930 |
|
121,842 |
|
| Long-term debt -
Teekay Parent |
351,594 |
|
349,403 |
|
349,637 |
|
| Long-term debt -
Teekay LNG |
2,679,835 |
|
2,779,253 |
|
3,121,709 |
|
| Long-term debt -
Teekay Tankers |
829,671 |
|
905,537 |
|
939,222 |
|
| Operating lease
liabilities |
83,456 |
|
148,602 |
|
161,479 |
|
| Other long-term
liabilities |
252,885 |
|
216,348 |
|
203,445 |
|
| Equity: |
|
|
|
| Non-controlling
interests |
2,085,617 |
|
2,089,730 |
|
2,040,496 |
|
|
Shareholders of Teekay |
401,047 |
|
481,863 |
|
715,594 |
|
| Total
Liabilities and Equity |
7,683,804 |
|
8,072,864 |
|
8,481,485 |
|
|
|
|
|
|
| Net debt - Teekay
Parent (3) |
359,659 |
|
329,833 |
|
389,965 |
|
| Net debt - Teekay
LNG (3) |
2,652,436 |
|
2,989,009 |
|
3,122,467 |
|
| Net
debt - Teekay Tankers (3) |
730,276 |
|
929,135 |
|
1,005,495 |
|
(1) Comparative balances relating to the three months
ended December 31, 2019 have been updated to reflect results as
presented in the Company’s Annual Report for the year ended
December 31, 2019.
(2) During the three months ended March 31, 2020, Teekay
Parent cash decreased as a result of the repayment of the remaining
8.5% senior unsecured notes at maturity, interest payments for the
9.25% senior secured notes and negative operating cash flows.
(3) Net debt is a non-GAAP financial measure and
represents short-term debt, current portion of long-term debt and
long-term debt, less cash and cash equivalents, and, if applicable,
restricted cash. Proforma for the $67 million upfront payment
received in early April 2020 relating to the new Foinaven FPSO
bareboat charter contract, Teekay Parent's net debt would have been
$292.7 million as of March 31, 2020.
Teekay CorporationSummary Consolidated
Statements of Cash Flows(in thousands of U.S. dollars)
| |
Three Months Ended |
| |
March 31, |
| |
2020 |
2019 |
|
|
(unaudited) |
(unaudited) |
| Cash, cash equivalents and
restricted cash provided by (used for) |
|
|
| OPERATING
ACTIVITIES |
|
|
|
Net income (loss) |
52,002 |
|
(61,464 |
) |
| Non-cash and non-operating
items: |
|
|
|
Depreciation and amortization |
72,917 |
|
72,107 |
|
|
Unrealized loss on derivative instruments |
68,236 |
|
5,642 |
|
|
Write-down and loss on sale |
94,606 |
|
3,328 |
|
|
Gain on commencement of sales-type lease |
(44,943 |
) |
— |
|
|
Equity income, net of dividends received |
4,187 |
|
68,661 |
|
|
Foreign currency exchange (gain) loss and other |
(51,294 |
) |
12,272 |
|
| Direct financing lease
payments received |
264,072 |
|
3,025 |
|
| Change in operating assets and
liabilities |
(18,525 |
) |
16,295 |
|
| Expenditures for dry
docking |
(2,299 |
) |
(14,712 |
) |
|
Net operating cash flow |
438,959 |
|
105,154 |
|
| |
|
|
| FINANCING
ACTIVITIES |
|
|
| Proceeds from issuance of
long-term debt, net of issuance costs |
870,639 |
|
138,082 |
|
| Prepayments of long-term
debt |
(1,002,414 |
) |
(176,581 |
) |
| Scheduled repayments of
long-term debt |
(70,225 |
) |
(54,877 |
) |
| Proceeds from short-term
debt |
135,000 |
|
— |
|
| Prepayment of short-term
debt |
(130,000 |
) |
— |
|
| Proceeds from financing
related to sales-leaseback of vessels |
— |
|
158,680 |
|
| Repayments of obligations
related to finance leases |
(23,488 |
) |
(23,199 |
) |
| Repurchase of Teekay LNG
common units |
(15,635 |
) |
(9,497 |
) |
| Distributions paid from
subsidiaries to non-controlling interests |
(16,353 |
) |
(13,892 |
) |
| Cash dividends paid |
— |
|
(5,523 |
) |
| Other financing
activities |
— |
|
(24 |
) |
|
Net financing cash flow |
(252,476 |
) |
13,169 |
|
| |
|
|
| INVESTING
ACTIVITIES |
|
|
| Expenditures for vessels and
equipment |
(8,685 |
) |
(124,540 |
) |
| Proceeds from sale of vessels
and equipment |
60,915 |
|
— |
|
| Loan repayment by joint
venture |
2,000 |
|
— |
|
| Investment in equity-accounted
investments |
— |
|
(2,864 |
) |
| Other investing
activities |
(6,430 |
) |
(255 |
) |
|
Net investing cash flow |
47,800 |
|
(127,659 |
) |
| |
|
|
| Increase (decrease) in
cash, cash equivalents and restricted cash |
234,283 |
|
(9,336 |
) |
| Cash, cash equivalents and
restricted cash, beginning of the period |
456,325 |
|
505,639 |
|
|
Cash, cash equivalents and restricted cash, end of the
period |
690,608 |
|
496,303 |
|
| |
|
|
|
|
Teekay CorporationAppendix A -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted Net Income (Loss)(in
thousands of U.S. dollars, except per share data)
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 |
2019 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
|
$ Per |
|
$ Per |
|
$ Per |
| |
|
$ |
Share(1) |
$ |
Share(1) |
$ |
Share(1) |
| Net income
(loss) – GAAP basis |
52,002 |
|
|
122,497 |
|
|
(61,464 |
) |
|
| Adjust for: Net
income attributable to |
|
|
|
|
|
|
|
non-controlling interests |
(101,807 |
) |
|
(111,154 |
) |
|
(22,793 |
) |
|
| Net (loss)
income attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
(49,805 |
) |
(0.49 |
) |
11,343 |
|
0.11 |
|
(84,257 |
) |
(0.84 |
) |
| Add
(subtract) specific items affecting net loss |
|
|
|
|
|
|
| |
Unrealized losses (gains) from
derivative |
|
|
|
|
|
|
| |
instruments (2) |
40,900 |
|
0.41 |
|
(12,488 |
) |
(0.12 |
) |
12,488 |
|
0.12 |
|
| |
Foreign exchange (gains)
losses (3) |
(8,463 |
) |
(0.08 |
) |
9,612 |
|
0.10 |
|
1,196 |
|
0.01 |
|
| |
Write-down and loss on sale
(4) |
94,606 |
|
0.94 |
|
5,546 |
|
0.05 |
|
68,228 |
|
0.68 |
|
| |
Gain on commencement of
sales-type lease (5) |
(44,943 |
) |
(0.45 |
) |
(14,349 |
) |
(0.14 |
) |
— |
|
— |
|
| |
Restructuring charges, net of
recoveries |
1,188 |
|
0.01 |
|
(612 |
) |
(0.01 |
) |
2,158 |
|
0.02 |
|
| |
Other (6) |
8,230 |
|
0.08 |
|
18,710 |
|
0.19 |
|
1,998 |
|
0.02 |
|
|
|
Non-controlling interests’ share of items above (7) |
(16,454 |
) |
(0.16 |
) |
13,520 |
|
0.13 |
|
(14,766 |
) |
(0.15 |
) |
| Total
adjustments |
75,064 |
|
0.75 |
|
19,939 |
|
0.20 |
|
71,302 |
|
0.71 |
|
| Adjusted
net income (loss) attributable to |
|
|
|
|
|
|
|
|
shareholders of Teekay |
25,259 |
|
0.25 |
|
31,282 |
|
0.31 |
|
(12,955 |
) |
(0.13 |
) |
(1) Basic per share amounts.
(2) Reflects unrealized losses
(gains) relating to the change in the mark-to-market value of
derivative instruments that are not designated in qualifying
hedging relationships for accounting purposes, including those
losses (gains) included in the Company's proportionate share of
equity income (loss) from joint ventures.
(3) Foreign currency exchange (gains)
losses primarily relate to the Company’s debt denominated in Euros
and Norwegian Kroner (NOK) and unrealized losses on cross currency
swaps used to economically hedge the principal and interest on NOK
bonds. Nearly all of the Company’s foreign currency exchange gains
and losses are unrealized.
(4) Write-down and loss on sale
includes vessel impairment charges and losses on sales of
vessels.
(5) Gain on commencement of
sales-type lease for the three months ended March 31, 2020 includes
the gain on commencement of the sales-type lease for the Foinaven
FPSO unit as a result of a new bareboat charter agreement. Gain on
commencement of sales-type lease for the three months ended
December 31, 2019 includes a gain upon derecognition of the vessels
and reclassification as sales-type leases as a result of Awilco
fulfilling its obligation to repurchase from Teekay LNG the
WilPride and WilForce LNG carriers.
(6) Other for the three months ended
March 31, 2020 includes credit loss provision adjustments to the
Company's financial instruments upon adoption of ASU 2016-13,
Financial Instruments - Credit Losses: Measurement of Credit Losses
on Financial Instruments. Other for the three months ended December
31, 2019 includes adjustments to freight tax accruals for periods
prior to 2019, and the impact of the Awilco charter contracts being
reclassified from operating leases to sales-type leases. Other for
the three months ended March 31, 2019 includes the loan
extinguishment costs related to Teekay LNG's refinancing of one of
its debt facilities.
(7) Items affecting net income (loss)
include items from the Company’s consolidated non-wholly-owned
subsidiaries. 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 determine the non-controlling interests’ share
of the amount. The amount identified as “Non-controlling interests’
share of items above” in the table above is the cumulative amount
of the non-controlling interests’ proportionate share of items
listed in the table.
Teekay CorporationAppendix B -
Supplemental Financial InformationSummary
Statement of (Loss) Income for the Three Months Ended
March 31, 2020(in thousands of U.S.
dollars)(unaudited)
|
|
|
Teekay |
Teekay |
Teekay |
Consolidation |
Total |
|
|
|
LNG |
Tankers |
Parent |
Adjustments(1) |
|
|
|
|
|
|
|
|
|
|
Revenues |
139,887 |
|
341,900 |
|
92,267 |
|
— |
|
574,054 |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
(2,317 |
) |
(119,241 |
) |
(6 |
) |
— |
|
(121,564 |
) |
|
Vessel operating expenses |
(26,104 |
) |
(50,649 |
) |
(76,540 |
) |
— |
|
(153,293 |
) |
|
Time-charter hire expense |
(5,922 |
) |
(9,879 |
) |
(11,255 |
) |
— |
|
(27,056 |
) |
|
Depreciation and amortization |
(32,639 |
) |
(29,632 |
) |
(10,646 |
) |
— |
|
(72,917 |
) |
|
General and administrative expenses |
(6,167 |
) |
(9,286 |
) |
(2,824 |
) |
— |
|
(18,277 |
) |
|
Write-down and loss on sale |
(45,000 |
) |
(3,087 |
) |
(46,519 |
) |
— |
|
(94,606 |
) |
|
Gain on commencement of sales-type lease |
— |
|
— |
|
44,943 |
|
— |
|
44,943 |
|
|
Restructuring charges |
— |
|
|
(2,388 |
) |
— |
|
(2,388 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) from vessel operations |
21,738 |
|
120,126 |
|
(12,968 |
) |
— |
|
128,896 |
|
|
|
|
|
|
|
|
|
Interest expense |
(36,704 |
) |
(15,135 |
) |
(10,740 |
) |
59 |
|
(62,520 |
) |
|
Interest income |
2,370 |
|
256 |
|
236 |
|
(59 |
) |
2,803 |
|
|
Realized and unrealized loss on |
|
|
|
|
|
|
|
non-designated derivative instruments |
(20,471 |
) |
(827 |
) |
(365 |
) |
— |
|
(21,663 |
) |
|
Equity income |
373 |
|
1,940 |
|
— |
|
— |
|
2,313 |
|
|
Equity in earnings of subsidiaries (2) |
— |
|
— |
|
(25,796 |
) |
25,796 |
|
— |
|
|
Income tax expense |
(2,512 |
) |
(664 |
) |
(616 |
) |
— |
|
(3,792 |
) |
|
Foreign exchange gain |
4,739 |
|
1,135 |
|
772 |
|
— |
|
6,646 |
|
|
Other (loss) income – net |
(361 |
) |
8 |
|
(328 |
) |
— |
|
(681 |
) |
|
Net (loss) income |
(30,828 |
) |
106,839 |
|
(49,805 |
) |
25,796 |
|
52,002 |
|
|
Net income attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
non-controlling interests (3) |
(2,166 |
) |
— |
|
— |
|
(99,641 |
) |
(101,807 |
) |
|
Net (loss) income attributable to
shareholders/ |
|
|
|
|
|
|
|
unitholders of publicly-listed entities |
(32,994 |
) |
106,839 |
|
(49,805 |
) |
(73,845 |
) |
(49,805 |
) |
(1) Consolidation Adjustments column
includes adjustments which eliminate transactions between Teekay
LNG, Teekay Tankers and Teekay Parent.
(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 LNG column represents the
joint venture partners’ share of the net income of its respective
consolidated 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 consolidated subsidiaries.
Teekay CorporationAppendix C -
Supplemental Financial InformationTeekay Parent
Summary Operating ResultsFor the Three Months
Ended March 31, 2020(in thousands of U.S.
dollars)(unaudited)
| |
|
|
|
Teekay |
| |
|
|
Corporate |
Parent |
|
|
FPSOs |
Other(1) |
G&A |
Total |
| |
|
|
|
|
|
Revenues |
45,933 |
|
46,334 |
|
— |
|
92,267 |
|
| |
|
|
|
|
| Voyage expenses |
(6 |
) |
— |
|
— |
|
(6 |
) |
| Vessel operating expenses |
(36,270 |
) |
(40,270 |
) |
— |
|
(76,540 |
) |
| Time-charter hire expense |
(7,950 |
) |
(3,305 |
) |
— |
|
(11,255 |
) |
| Depreciation and
amortization |
(10,646 |
) |
— |
|
— |
|
(10,646 |
) |
| General and administrative
expenses |
(699 |
) |
— |
|
(2,125 |
) |
(2,824 |
) |
| Write-down of vessels (2) |
(46,519 |
) |
— |
|
— |
|
(46,519 |
) |
| Gain on commencement of
sales-type lease (3) |
44,943 |
|
— |
|
— |
|
44,943 |
|
| Restructuring charges |
(1,054 |
) |
(1,334 |
) |
— |
|
(2,388 |
) |
|
(Loss) income from vessel operations |
(12,268 |
) |
1,425 |
|
(2,125 |
) |
(12,968 |
) |
| |
|
|
|
|
| Depreciation and
amortization |
10,646 |
|
— |
|
— |
|
10,646 |
|
| Amortization of in-process
revenue |
|
|
|
— |
|
|
contracts and other |
(1,402 |
) |
596 |
|
|
(806 |
) |
| Write-down of vessels (2) |
46,519 |
|
— |
|
— |
|
46,519 |
|
| Gain on commencement of
sales-type lease (3) |
(44,943 |
) |
— |
|
— |
|
(44,943 |
) |
|
Daughter Entities distributions (4) |
— |
|
— |
|
6,691 |
|
6,691 |
|
|
Teekay Parent adjusted EBITDA |
(1,448 |
) |
2,021 |
|
4,566 |
|
5,139 |
|
(1) Includes the results of one
chartered-in FSO unit owned by Altera, which is largely on a
flow-through basis with Teekay Parent earning a small margin.
(2) Write-down of vessels for the three
months ended March 31, 2020 relates to write-downs relating to two
FPSO units. The oil production under the existing contract for the
Petrojarl Banff FPSO unit is expected to cease in mid-2020, at
which time Teekay Parent expects to incur decommissioning/asset
retirement costs. Accordingly, the capitalized asset
retirement obligation for the Petrojarl Banff FPSO unit was
increased based on recent changes to cost estimates and the
carrying value of the unit was then written down to its estimated
residual value. Teekay Parent revised its expected cash flows
from the Hummingbird FPSO unit based on the recent changes in oil
prices and the offshore market, and recent discussions with
potential buyers of the unit. This led to the write-down of the
unit to its estimated fair value using a discounted cash flow
approach.
(3) Gain on commencement of sales-type
lease for the three months ended March 31, 2020 relates to the gain
realized upon the commencement of the sales-type lease for the
Foinaven FPSO unit as a result of a new bareboat charter
agreement.
(4) In addition to the adjusted EBITDA
generated by its directly owned and chartered-in assets, Teekay
Parent also receives cash distributions from its consolidated
publicly-traded subsidiary, Teekay LNG. For the three months ended
March 31, 2020, Teekay Parent received cash distributions of
$6.7 million from Teekay LNG, including those made with respect to
its general partner interests in Teekay LNG. Distributions
received for a given quarter consist of the amount of distributions
relating to such quarter but received by Teekay Parent in the
following quarter. Please refer to Appendix D of this release for
further details.
Teekay CorporationAppendix D -
Reconciliation of Non-GAAP Financial
MeasuresTeekay Parent Free Cash Flow(in
thousands of U.S. dollars, except share and per share data)
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 |
2019 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Daughter
Entities distributions to Teekay Parent (1) |
|
|
|
| |
Teekay LNG |
|
|
|
|
|
Limited Partner interests (2) |
6,302 |
|
4,790 |
|
4,790 |
|
|
|
GP interests |
389 |
|
300 |
|
305 |
|
| Total
Daughter Entity Distributions to Teekay Parent |
6,691 |
|
5,090 |
|
5,095 |
|
| |
|
|
|
|
| |
FPSOs(5) |
(1,448 |
) |
9,363 |
|
(3,112 |
) |
| |
Other and corporate general
and administrative expenses |
|
|
|
| |
Other |
2,021 |
|
2,498 |
|
699 |
|
|
|
Corporate general and administrative expenses |
(2,125 |
) |
(3,129 |
) |
(4,484 |
) |
|
TEEKAY PARENT ADJUSTED EBITDA (3) |
5,139 |
|
13,822 |
|
(1,802 |
) |
| |
|
|
|
| Net interest
expense (4) |
(8,577 |
) |
(8,879 |
) |
(11,961 |
) |
| |
|
|
|
|
|
|
| Upfront lease
payment received in excess of revenue recognized(5) |
56,127 |
|
— |
|
— |
|
|
TOTAL TEEKAY PARENT FREE CASH FLOW |
52,689 |
|
4,943 |
|
(13,763 |
) |
| |
|
|
|
|
Weighted-average number of common shares -
Basic |
100,887,551 |
|
100,784,425 |
|
100,520,421 |
|
(1) Daughter Entities dividends and
distributions for a given quarter consist of the amount of
dividends and distributions relating to such quarter but received
by Teekay Parent in the following quarter.
(2) Common unit distribution cash flows to
Teekay Parent are based on Teekay Parent’s ownership on the
ex-dividend date for its publicly-traded subsidiary Teekay LNG for
the periods as follows:
| |
|
Three Months Ended |
| |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
| Teekay
LNG |
|
|
|
|
|
|
|
Distribution per common unit |
$ |
0.25 |
|
$ |
0.19 |
|
$ |
0.19 |
|
|
Common units owned by |
|
|
|
|
|
|
|
Teekay Parent |
|
25,208,274 |
|
|
25,208,274 |
|
|
25,208,274 |
|
|
Total distribution |
$ |
6,302,069 |
|
$ |
4,789,572 |
|
$ |
4,789,572 |
|
(3) Please refer to Appendices C and E for
additional financial information on Teekay Parent’s adjusted
EBITDA.
(4) Please see Appendix E to this release
for a description of this measure and a reconciliation of this
non-GAAP financial measure as used in this release to interest
expense net of interest income, the most directly comparable GAAP
financial measure.
(5) Upfront lease payment relates to cash
received in early April 2020 in excess of revenue recognized in the
three months ended March 31, 2020, as a result of a new bareboat
charter agreement relating to the Foinaven FPSO unit. Please refer
to Summary Consolidated Statements of Income (Loss) for additional
information.
Teekay
CorporationNon-GAAP Financial
Reconciliations
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA - Consolidated(in
thousands of U.S. dollars)
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 (1) |
2019 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Net income
(loss) |
52,002 |
|
122,497 |
|
(61,464 |
) |
| Depreciation and
amortization |
72,917 |
|
71,083 |
|
72,107 |
|
| Interest expense,
net of interest income |
59,717 |
|
66,079 |
|
70,982 |
|
| Income
tax expense |
3,792 |
|
13,951 |
|
5,036 |
|
|
EBITDA |
188,428 |
|
273,610 |
|
86,661 |
|
|
Specific income statement items affecting EBITDA: |
|
|
|
|
|
Write-down and loss on sale |
94,606 |
|
5,546 |
|
3,328 |
|
| |
Gain on commencement of sales-type lease |
(44,943 |
) |
(14,349 |
) |
— |
|
| |
Direct finance lease payments received in excess of revenue
recognized |
3,769 |
|
10,310 |
|
3,218 |
|
| |
Amortization of in-process contracts and other |
(806 |
) |
(881 |
) |
(1,115 |
) |
| |
Realized and unrealized loss (gain) on derivative instruments |
21,663 |
|
(4,592 |
) |
5,423 |
|
| |
Realized (gain) loss from the settlements of non-designated
derivative instruments |
(49 |
) |
1,097 |
|
— |
|
| |
Equity (income) loss |
(2,313 |
) |
(31,900 |
) |
61,653 |
|
| |
Foreign currency exchange (gain) loss |
(6,646 |
) |
10,721 |
|
2,630 |
|
|
|
Other (income) expense - net |
681 |
|
1,980 |
|
(28 |
) |
|
Consolidated Adjusted EBITDA |
254,390 |
|
251,542 |
|
161,770 |
|
|
Adjusted EBITDA from equity-accounted vessels (See Appendix E) |
87,808 |
|
73,923 |
|
75,190 |
|
|
Total Adjusted EBITDA |
342,198 |
|
325,465 |
|
236,960 |
|
(1) Comparative balances relating to the
three months ended December 31, 2019 have been updated to reflect
results as presented in the Company’s Annual Report for the year
ended December 31, 2019.
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA – Equity-Accounted
Vessels(in thousands of U.S. dollars)
| |
|
Three Months Ended |
| |
|
March 31, 2020 |
December 31, 2019 |
March 31, 2019 |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| |
|
At |
Company's |
At |
Company's |
At |
Company's |
| |
|
100% |
Portion(1) |
100% |
Portion(1) |
100% |
Portion(1) |
| Revenues |
260,488 |
|
113,054 |
|
223,716 |
|
100,267 |
|
494,729 |
|
119,506 |
|
| Vessel and other
operating expenses |
(74,396 |
) |
(33,336 |
) |
(73,139 |
) |
(32,600 |
) |
(219,099 |
) |
(48,349 |
) |
|
Depreciation and amortization |
(26,564 |
) |
(13,441 |
) |
(29,609 |
) |
(14,392 |
) |
(112,611 |
) |
(25,918 |
) |
| Income
from vessel operations of equity-accounted vessels |
159,528 |
|
66,277 |
|
120,968 |
|
53,275 |
|
163,019 |
|
45,239 |
|
| |
|
|
|
|
|
|
| Net interest
expense |
(76,359 |
) |
(30,644 |
) |
(62,291 |
) |
(25,821 |
) |
(105,894 |
) |
(28,856 |
) |
| Income tax
expense |
(598 |
) |
(299 |
) |
(200 |
) |
(107 |
) |
(5,176 |
) |
(1,388 |
) |
| Other items
including realized and |
|
|
|
|
|
|
| |
unrealized (loss) gain on
derivative |
|
|
|
|
|
|
|
|
instruments (2) |
(102,926 |
) |
(33,021 |
) |
12,823 |
|
4,553 |
|
(60,877 |
) |
(11,748 |
) |
| Write-down and
loss on sale of |
|
|
|
|
|
|
|
|
equity-accounted investments (3) |
|
— |
|
|
— |
|
|
(64,900 |
) |
| Net (loss)
income / equity income (loss) of equity-accounted
vessels |
(20,355 |
) |
2,313 |
|
71,300 |
|
31,900 |
|
(8,928 |
) |
(61,653 |
) |
|
|
|
|
|
|
|
|
|
| Net (loss)
income / equity income (loss) |
|
|
|
|
|
|
| |
of equity-accounted
vessels |
(20,355 |
) |
2,313 |
|
71,300 |
|
31,900 |
|
(8,928 |
) |
(61,653 |
) |
| Depreciation and
amortization |
26,564 |
|
13,441 |
|
29,609 |
|
14,392 |
|
112,611 |
|
25,918 |
|
| Net interest
expense |
76,359 |
|
30,644 |
|
62,291 |
|
25,821 |
|
105,894 |
|
28,856 |
|
| Income
tax expense |
598 |
|
299 |
|
200 |
|
107 |
|
5,176 |
|
1,388 |
|
|
EBITDA |
83,166 |
|
46,697 |
|
163,400 |
|
72,220 |
|
214,753 |
|
(5,491 |
) |
| Specific income
statement items affecting EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Direct finance lease payments
received in excess of revenue recognized |
24,976 |
|
9,025 |
|
19,286 |
|
7,212 |
|
14,689 |
|
5,133 |
|
| |
Amortization of in-process
contracts and other |
(1,718 |
) |
(935 |
) |
(1,758 |
) |
(956 |
) |
(1,722 |
) |
(936 |
) |
| |
Other items including realized
and unrealized loss (gain) on derivative instruments (2) |
102,927 |
|
33,021 |
|
(12,823 |
) |
(4,553 |
) |
60,877 |
|
11,749 |
|
| |
Realized loss on foreign
currency forward contracts |
— |
|
— |
|
— |
|
— |
|
(1,175 |
) |
(165 |
) |
|
|
Write-down and loss on sale of equity-accounted investments
(3) |
|
— |
|
|
— |
|
|
64,900 |
|
|
Adjusted EBITDA from equity-accounted vessels
(4) |
209,351 |
|
87,808 |
|
168,105 |
|
73,923 |
|
287,422 |
|
75,190 |
|
(1) For the three months ended March 31,
2020 and December 31, 2019, the Company’s proportionate share of
its equity-accounted vessels and other investments ranged from 20%
to 52%. For the three months ended March 31, 2019, the Company’s
proportionate share of its equity-accounted vessels and other
investments ranged from 14% to 52% and included $22.3 million
related to the Company's proportionate share of its investment in
Altera, which was sold in the second quarter of 2019.
(2) For the three months ended March 31,
2020, includes unrealized credit losses recorded upon the adoption
of ASU 2016-13, Financial Instruments - Credit Losses: Measurement
of Credit Losses on Financial Instruments.
(3) For the three months ended March 31,
2019, includes a write-down of the Company's investment in
Altera.
(4) Adjusted EBITDA from equity-accounted
vessels represents the Company’s proportionate share of adjusted
EBITDA from its equity-accounted vessels and other investments.
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresTotal
Adjusted Revenues(in thousands of U.S. dollars)
| |
|
Three Months Ended |
| |
|
March 31, |
December 31, |
March 31, |
| |
|
2020 |
2019 (1) |
2019 (1) |
|
|
|
(unaudited) |
(unaudited) |
(unaudited) |
| Revenues |
574,054 |
|
570,285 |
|
486,873 |
|
| Proportionate
share of revenues |
|
|
|
|
|
from equity-accounted joint ventures |
113,054 |
|
100,267 |
|
119,506 |
|
|
|
|
|
|
|
|
|
|
| Less proportionate
share of voyage revenues earned |
|
|
|
|
|
directly from equity-accounted joint ventures |
(5,755 |
) |
(6,033 |
) |
(5,476 |
) |
|
Total adjusted revenues |
681,353 |
|
664,519 |
|
600,903 |
|
(1) Comparative balances relating to the
three months ended December 31, 2019 and March 31, 2019 have been
updated to reflect results as presented in the Company’s Annual
Report on Form 20-F and Report on Form 6-K for the year ended
December 31, 2019 and three months ended March 31, 2020,
respectively.
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial
MeasuresAdjusted EBITDA - Teekay
Parent(in thousands of U.S. dollars)
| |
Three Months Ended December 31, 2019 |
|
|
(unaudited) |
| |
|
|
|
Teekay |
| |
|
|
Corporate |
Parent |
| |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
| Teekay
Parent income (loss) from vessel operations |
4,792 |
|
1,861 |
|
(3,129 |
) |
3,524 |
|
| Write-down of
vessels |
2 |
|
— |
|
— |
|
2 |
|
| Depreciation and
amortization |
6,052 |
|
35 |
|
— |
|
6,087 |
|
| Amortization of
in-process revenue contracts and other |
(1,483 |
) |
602 |
|
— |
|
(881 |
) |
|
Daughter Entities distributions |
— |
|
— |
|
5,090 |
|
5,090 |
|
|
Adjusted EBITDA – Teekay Parent |
9,363 |
|
2,498 |
|
1,961 |
|
13,822 |
|
| |
Three Months Ended March 31, 2019 |
|
|
(unaudited) |
| |
|
|
|
Teekay |
| |
|
|
Corporate |
Parent |
| |
FPSOs |
Other |
G&A |
Total |
|
|
|
|
|
|
|
|
|
|
| Teekay Parent loss
from vessel operations |
(12,557 |
) |
(185 |
) |
(4,484 |
) |
(17,226 |
) |
| Write-down of
vessels |
3,328 |
|
— |
|
— |
|
3,328 |
|
| Depreciation and
amortization |
8,036 |
|
80 |
|
— |
|
8,116 |
|
| Amortization of
in-process revenue contracts and other |
(1,919 |
) |
804 |
|
— |
|
(1,115 |
) |
|
Daughter Entities distributions |
— |
|
— |
|
5,095 |
|
5,095 |
|
|
Adjusted EBITDA – Teekay Parent |
(3,112 |
) |
699 |
|
611 |
|
(1,802 |
) |
| |
|
|
|
|
|
|
|
|
Teekay CorporationAppendix E -
Reconciliation of Non-GAAP Financial MeasuresNet
Interest Expense - Teekay Parent(in thousands of U.S.
dollars)
| |
Three Months Ended |
| |
March 31, |
December 31, |
March 31, |
| |
2020 |
2019 (1) |
2019 |
|
|
(unaudited) |
(unaudited) |
(unaudited) |
|
Interest expense |
(62,520 |
) |
(67,476 |
) |
(73,671 |
) |
|
Interest income |
2,803 |
|
1,397 |
|
2,689 |
|
| Interest expense
net of interest income consolidated |
(59,717 |
) |
(66,079 |
) |
(70,982 |
) |
| Less: Non-Teekay
Parent interest expense net of interest income |
(49,213 |
) |
(55,322 |
) |
(57,716 |
) |
| Interest expense
net of interest income - Teekay Parent |
(10,504 |
) |
(10,757 |
) |
(13,266 |
) |
| Teekay Parent
non-cash accretion and loan cost amortization |
2,215 |
|
2,161 |
|
1,562 |
|
| Teekay
Parent realized losses on interest rate swaps |
(288 |
) |
(283 |
) |
(257 |
) |
|
Net interest expense - Teekay Parent |
(8,577 |
) |
(8,879 |
) |
(11,961 |
) |
| |
|
|
|
|
|
|
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, among other things, regarding: the impact of COVID-19
and related global events on the Company’s business and financial
results; results for the second quarter of 2020, including as a
result of strong crude spot tanker rates to date; the Company's
liquidity and the Teekay Group’s financial positioning for both
near-term volatility and the longer-term future of marine energy
transportation; the Company’s strategic priorities and anticipated
delevering of the Teekay Group’s balance sheets; expected charter
commencement dates; and Teekay Tankers’ continued operation of its
oil ship-to-ship transfer support services in North America and the
Caribbean and the synergies of that business with Teekay Tankers’
core Full Service Lightering business. 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: market or counterparty reaction to changes in
exploration, production and storage of offshore oil and gas, either
generally or in particular regions that would impact expected
future growth; changes in the demand for oil, refined products, LNG
or LPG; changes in trading patterns significantly affecting overall
vessel tonnage requirements; greater or less than anticipated
levels of vessel newbuilding orders and deliveries and greater or
less than anticipated rates of vessel scrapping; changes in global
oil prices or tanker rates; OPEC+ production and supply levels; oil
contango levels; the duration and extent of the COVID-19 pandemic
and any resulting effects on the markets in which the Company
operates; the impact of the pandemic on the Company’s ability to
maintain safe and efficient operations; issues with vessel
operations; higher than expected costs and expenses, off-hire days
or dry-docking requirements; changes in applicable industry laws
and regulations and the timing of implementation of new laws and
regulations; the effects of IMO 2020 and IMO 2030; the potential
for early termination of long-term contracts of existing vessels;
delays in the commencement of charter or other contracts, including
potential further delays to the commencement of commercial
operations of the regasification terminal in Bahrain; changes in
borrowing costs or equity valuations; declaration by Teekay LNG’s
board of directors of common unit distributions; available cash to
reduce financial leverage at Teekay Parent, Teekay LNG and Teekay
Tankers; the impact of geopolitical tensions and changes in global
economic conditions; and other factors discussed in Teekay’s
filings from time to time with the SEC, including its Annual Report
on Form 20-F for the fiscal year ended December 31, 2019. Teekay
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 Teekay’s expectations
with respect thereto or any change in events, conditions or
circumstances on which any such statement is based.
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