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: February 20, 2014

Commission file number 1- 12874

 

 

TEEKAY CORPORATION

(Exact name of Registrant as specified in its charter)

 

 

4th Floor, Belvedere Building

69 Pitts Bay Road

Hamilton, HM 08 Bermuda

(Address of principal executive office)

 

 

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

Form 20-F  x            Form 40-F  ¨

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

Yes  ¨            No   x

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

Yes  ¨            No   x

 

 

 


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

Attached as Exhibit I is a copy of an announcement of Teekay Corporation dated February 20, 2014.

SIGNATURES

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

 

  TEEKAY CORPORATION
Date: February 20, 2014   By:   /s/ Vincent Lok
    Vincent Lok
   

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)


LOGO     

TEEKAY CORPORATION

4th Floor, Belvedere Building, 69 Pitts Bay Road

Hamilton, HM 08, Bermuda

EARNINGS RELEASE

TEEKAY CORPORATION REPORTS

FOURTH QUARTER AND ANNUAL RESULTS

Highlights

 

    Fourth quarter 2013 total cash flow from vessel operations of $247.5 million, an increase of 14 percent from the same period of the prior year.

 

    Fourth quarter 2013 adjusted net income attributable to stockholders of Teekay of $1.1 million, or $0.02 per share (excluding specific items which increased GAAP net loss by $72.0 million, or $1.02 per share).

 

    Teekay Corporation’s cash flows from Teekay Offshore and Teekay LNG increased by an annualized $12.7 million, or 8 percent, due to respective 2.5 percent fourth quarter of 2013 Teekay Offshore and Teekay LNG distribution increases.

 

    Teekay Parent agreed to sell its last four remaining owned conventional tankers to Tanker Investments Ltd, a new tanker company created jointly by Teekay Corporation and Teekay Tankers.

 

    Total consolidated liquidity of approximately $1.4 billion as at December 31, 2013, pro forma for Teekay Offshore’s $162 million Norwegian bond issuance completed in January 2014.

Hamilton, Bermuda, February 20, 2014—Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported adjusted net income attributable to stockholders of Teekay(1) of $1.1 million, or $0.02 per share, for the quarter ended December 31, 2013, compared to adjusted net income attributable to stockholders of Teekay of $2.9 million, or $0.04 per share, for the same period of the prior year. Adjusted net income attributable to stockholders of Teekay excludes a number of specific items that had the net effect of increasing GAAP net loss by $72.0 million, or $1.02 per share, for the three months ended December 31, 2013 and increasing GAAP net loss by $96.7 million, or $1.39 per share, for the same period of the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net loss attributable to stockholders of Teekay of $70.9 million, or $1.00 per share, for the quarter ended December 31, 2013, compared to net loss attributable to stockholders of Teekay of $93.7 million, or $1.35 per share, for the same period of the prior year. Net revenues(2) for the fourth quarter of 2013 were $461.8 million, compared to $492.4 million for the same period of the prior year.

For the year ended December 31, 2013, the Company reported adjusted net loss attributable to stockholders of Teekay(1) of $79.9 million, or $1.13 per share, compared to adjusted net loss attributable to stockholders of Teekay of $54.9 million, or $0.79 per share, for the prior year. Adjusted net loss attributable to stockholders of Teekay excludes a number of specific items that had the net effect of increasing GAAP net loss by $34.9 million, or $0.50 per share, for the year ended December 31, 2013 and increasing GAAP net loss by $105.3 million, or $1.52 per share, for the prior year, as detailed in Appendix A to this release. Including these items, the Company reported, on a GAAP basis, net loss attributable to stockholders of Teekay of $114.7 million, or $1.63 per share, for the year ended December 31, 2013, compared to net loss attributable to stockholders of Teekay of $160.2 million, or $2.31 per share, for the same period of the prior year. Net revenues(2) for the year ended December 31, 2013 were $1,717.9 million, compared to $1,842.5 million for the prior year.

On January 3, 2014, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended December 31, 2013. The cash dividend was paid on January 31, 2014 to all shareholders of record on January 17, 2014.

 

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

 

- more -

1


“During 2013, we made steady progress towards achieving our strategic objective of becoming a fixed asset-light company primarily focused on creating value by increasing cash flows generated by our publicly-traded daughter entities,” commented Peter Evensen, Teekay Corporation’s President and Chief Executive Officer. “This included completing the sales of the Voyageur Spirit and Cidade de Itajai FPSO units to Teekay Offshore during the second quarter of 2013 and, more recently, working and co-investing with Teekay Tankers to create Tanker Investments Ltd., to which we have agreed to sell Teekay Parent’s last four directly-owned conventional tankers.”

“As a result of accretive acquisitions and newbuilding deliveries completed by Teekay Offshore Partners and Teekay LNG Partners, our two master limited partnerships were able to increase their common unit distributions by 2.5 percent for the fourth quarter, which further increases the quarterly cash flows to Teekay Parent based on its general partnership and limited partnership interests,” Mr. Evensen continued. “With Teekay’s general partnership interests in Teekay Offshore and Teekay LNG now both in the 50 percent incentive distribution tier, the fourth quarter distribution increases at these daughter entities have resulted in an annualized increase of approximately $12.7 million, or 8 percent, to Teekay Parent’s general partnership and limited partnership cash flows.”

“Looking ahead to the remainder of 2014, efficiently executing on the Petrojarl Knarr FPSO project, our largest FPSO project to date, will continue to be a primary focus. Construction on the unit is progressing well and I am pleased to report that we recently secured an $815 million long-term debt facility for this strategic asset. The Knarr FPSO is expected to commence its ten-year time-charter with the BG Group in the fourth quarter of 2014, following delivery and transport from the shipyard, and installation on the Knarr field in the North Sea. At that time, the Knarr FPSO will be eligible for sale to Teekay Offshore under the omnibus agreement between Teekay Parent and Teekay Offshore.”

 

- more -

2


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 December 31, 2013  
     (unaudited)  

(in thousands of U.S. dollars)

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

Net revenues(1)

     231,481        103,989        39,671        113,748        (27,070     461,819  

Vessel operating expense

     91,250        25,164        21,922        66,795        —         205,131  

Time-charter hire expense

     13,670        —          1,021        36,668        (27,195     24,164  

Depreciation and amortization

     52,311        24,145        12,113        21,140        —         109,709  

CFVO - Consolidated(2)(3)

     112,839        74,210        14,374        (16,951     —         184,472  

CFVO - Equity Investments(4)

     6,644        52,626        1,245        2,502        —         63,017  

CFVO - Total

     119,483        126,836        15,619        (14,449     —         247,489  
     Three Months Ended December 31, 2012  
     (unaudited)  

(in thousands of U.S. dollars)

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

Net revenues(1)

     212,311        97,631        44,476        169,926        (31,898     492,446  

Vessel operating expense

     89,267        25,770        25,016        90,082        —         230,135  

Time-charter hire expense

     15,493        —          841        43,447        (31,898     27,883  

Depreciation and amortization

     47,249        25,949        18,431        21,831        —         113,460  

CFVO - Consolidated(2)(3)

     97,892        67,354        15,989        (116     —         181,119  

CFVO - Equity Investments(4)

     —          38,498        —          (1,691     —         36,807  

CFVO - Total

     97,892        105,852        15,989        (1,807     —         217,926  

 

(1) Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
(2) Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please refer to Appendix C and Appendix E of this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
(3) Excludes CFVO relating to assets acquired from Teekay Parent for the periods prior to their acquisition by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as those results are included in the historical results for Teekay Parent.
(4) 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.

 

- more -

3


Teekay Offshore Partners L.P.

Teekay Offshore is an international provider of marine transportation, oil production and storage services to the offshore oil industry through its fleet of 34 shuttle tankers (including two chartered-in vessels), five floating, production, storage and offloading (FPSO) units, six floating storage and offtake (FSO) units (including one FSO unit under conversion), four conventional oil tankers and one HiLoad Dynamic Positioning (DP) unit. Teekay Offshore’s interests in its directly-owned fleet (excluding the two chartered-in shuttle tankers) range from 50 to 100 percent. Teekay Offshore also has the right to participate in certain other FPSO and vessel opportunities pursuant to the omnibus agreement with Teekay. Teekay Parent currently owns a 29.3 percent interest in Teekay Offshore, including the 2 percent sole general partner interest.

For the fourth quarter of 2013, Teekay Offshore increased its common unit quarterly cash distribution by 2.5 percent, or $0.0131 per unit, to $0.5384 per common unit. The cash distribution received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totaled $17.7 million for the fourth quarter of 2013, as detailed in Appendix D to this release.

Including cash flows from equity-accounted vessels, Teekay Offshore’s total cash flow from vessel operations increased to $119.5 million in the fourth quarter of 2013, from $97.9 million in the same period of the prior year. The increase was primarily due to the acquisitions of the Voyageur Spirit FPSO and a 50 percent interest in the Cidade de Itajai FPSO from Teekay Corporation in the second quarter of 2013, the commencement of the time-charter contracts for the first three newbuilding shuttle tankers with the BG Group plc (BG) in June, August and November 2013, respectively, and higher shuttle tanker project revenues. These increases were partially offset by the redelivery of the Navion Marita upon completion of its time-charter contract in the third quarter of 2013, the lay-up of the Navion Clipper upon expiration of its time-charter contract during the fourth quarter of 2012, and the sale of five conventional tankers since the fourth quarter of 2012.

In December 2013, Teekay Offshore was awarded a six year shuttle tanker contract of affreightment (COA), with extension options up to an additional four years, with BG, which will service the Knarr oil and gas field in the North Sea. The expected start date for the shuttle COA coincides with the expected start-up of the Petrojarl Knarr FPSO in the North Sea in the fourth quarter of 2014.

On August 27, 2013, repairs to the defective gas compressor on the Voyageur Spirit FPSO were completed and the unit achieved full production capacity. Since that time, Teekay Offshore has been receiving full rate either directly from the charterer or through the indemnification from Teekay Corporation. Teekay Offshore expects to receive a certificate of final acceptance from the charterer after completing certain operational tests, which have been temporarily delayed by winter weather issues and an unrelated issue which is the responsibility of the charterer. During the fourth quarter of 2013 and the period up to December 31, 2013, Teekay Corporation indemnified Teekay Offshore for approximately $4.9 million and $34.9 million, respectively, relating to the Voyageur Spirit FPSO. Teekay Offshore has been, and will continue to be, indemnified by Teekay Corporation for lost revenues and certain uncovered vessel operating expenses up until receipt of the certificate of final acceptance from the charterer, subject to a maximum amount of $54 million.

Teekay LNG Partners L.P.

Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services generally under long-term, fixed-rate charter contracts through its current fleet of 34 LNG carriers (including one LNG regasification unit and five newbuildings under construction), 28 LPG carriers (including 12 newbuildings under construction) and 10 conventional tankers. Teekay LNG’s interests in these vessels range from 33 to 100 percent. In addition, Teekay LNG, through its 50 percent interest in Exmar LPG BVBA, Teekay LNG’s LPG joint venture with Exmar NV, charters-in five LPG carriers. Teekay Parent currently owns a 35.3 percent interest in Teekay LNG, including the 2 percent sole general partner interest.

For the fourth quarter of 2013, Teekay LNG increased its common unit quarterly cash distribution by 2.5 percent, or $0.0168 per unit, to $0.6918 per common unit. The cash distribution received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay LNG totaled $25.0 million for the fourth quarter of 2013, as detailed in Appendix D to this release.

 

- more -

4


Including cash flows from equity-accounted vessels, Teekay LNG’s total cash flow from vessel operations increased to $126.8 million in the fourth quarter of 2013, from $105.9 million in the same period of the prior year. The increase was primarily due to the February 2013 acquisition of a 50 percent interest in Exmar LPG BVBA, the acquisition of two LNG carrier newbuildings from Awilco LNG ASA (Awilco) in September and November 2013, an increase in revenue relating to one of the LNG carriers in Teekay LNG’s joint venture with Marubeni Corporation, which commenced a new three-year charter contract at a higher rate during the third quarter of 2013, and an increase in the tanker rates relating to two Suezmax tankers in the fourth quarter of 2013. These increases were partially offset by the sale of the Tenerife Spirit conventional tanker in mid-December 2013 and the scheduled dry docking of two Suezmax tankers, which resulted in 48 days of off-hire in the fourth quarter of 2013.

In November 2013, Teekay LNG exercised an option with Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) of South Korea for the construction of one additional 173,400 cubic meter (cbm) LNG carrier newbuilding. This vessel will be equipped with the M-type, Electronically Controlled, Gas Injection (MEGI) twin engines, which are expected to be significantly more fuel-efficient and have lower emission levels than other engines currently being utilized in LNG shipping. Teekay LNG intends to secure long-term charter contract employment for the vessel prior to its delivery in 2017. In connection with exercising the option in November 2013, Teekay LNG was also able to delay the delivery dates for the two currently unchartered 173,400 cbm LNG carrier newbuildings ordered in July 2013 from 2016 to 2017, to better coincide with the expected timing of new LNG shipping projects. Currently, Teekay LNG has options with DSME to order up to three additional LNG carrier newbuildings.

In September 2013, Teekay LNG agreed to acquire a second 155,900 cbm LNG carrier newbuilding from Awilco on similar terms as the first vessel. The second vessel was delivered to Teekay LNG in late-November 2013 and bareboat-chartered to Awilco on a four-year fixed-rate charter contract (plus a one-year extension option) with a fixed-price purchase obligation at the end of the initial term (and option period). Similar to the first Awilco vessel, the second vessel’s purchase price was $205 million less a $50 million upfront prepayment of charter hire by Awilco, which is in addition to the daily bareboat charter rate.

In late January 2014, Exmar LPG BVBA was awarded two five-year fixed-rate time-charter contracts, up to a maximum of 10 years, with Statoil ASA. The contracts are expected to be serviced by two LPG carrier newbuildings currently under construction at Hanjin Heavy Industries and Construction Co., Ltd., which are scheduled for delivery in 2016.

Also in late January 2014, Exmar LPG BVBA was awarded two 10-year fixed-rate time-charter contracts with Potash Corporation. The contracts will be serviced by two of Exmar LPG BVBA’s existing on-the-water LPG carriers.

Teekay Tankers Ltd.

Teekay Tankers currently owns a fleet of 28 vessels, including 11 Aframax tankers, 10 Suezmax tankers, three Long Range 2 (LR2) product tankers, three Medium-Range (MR) product tankers, and a 50 percent interest in a Very Large Crude Carrier (VLCC). In addition, Teekay Tankers currently time-charters in one Aframax tanker and has invested over $115 million in first-priority mortgage loans, secured by two 2010-built VLCCs, which Teekay Tankers currently manages. Of the 28 vessels currently in operation, 13 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. 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 25.1 percent economic interest in and has voting control of Teekay Tankers.

On January 3, 2014, Teekay Tankers declared a fixed fourth quarter 2013 dividend of $0.03 per share, which was paid on January 31, 2014 to all shareholders of record on January 17, 2014. Based on its ownership of Teekay Tankers Class A and Class B shares, the dividend paid to Teekay Parent totaled $0.6 million for the fourth quarter of 2013.

Including cash flows from equity-accounted vessels, Teekay Tankers’ total cash flow from vessel operations decreased slightly to $15.6 million in the fourth quarter of 2013, from $16.0 million in the same period of the prior year. The decrease was primarily due to the change in employment of certain of Teekay Tankers’ vessels from fixed rates to lower spot rates on expiry of their fixed-rate charters, lower average realized spot tanker rates from its spot LR2 product tankers, and a reduction in interest income earned from Teekay Tankers’ investment in two mortgage loans, which have been in default since the first quarter of 2013, partially offset by higher average realized spot tanker rates from its spot Suezmax and Aframax vessels. In January 2014, crude spot tanker rates for Suezmax and Aframax vessels reached five-year highs, although rates have since softened.

 

- more -

5


In January 2014, Teekay Tankers and Teekay jointly created Tanker Investments Ltd. (TIL), which will seek to opportunistically acquire, operate, and sell modern secondhand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. TIL completed a $250 million equity private placement in which Teekay Tankers and Teekay co-invested $25 million each for a combined 20 percent ownership interest. The balance of the privately placed TIL shares, which are listed on the Norwegian over-the-counter exchange under the symbol “TIL”, were purchased by a group of institutional investors. A portion of the net proceeds from the equity private placement will be used to acquire four 2009 and 2010-built Aframax crude oil tankers from a third party seller. In addition, TIL has also agreed to acquire four 2009-built Suezmax crude oil tankers from Teekay in exchange for assuming the indebtedness secured by these vessels, which approximated the market value of these vessels at the time they were agreed to be acquired. The acquisition of the four Teekay Suezmaxes is expected to be completed in the first quarter of 2014 and the acquisition of the Aframaxes is expected to be completed prior to the end of the second quarter of 2014. The remaining proceeds from the private placement are intended to be used to acquire additional tankers and for general corporate purposes. TIL expects to list its shares on the Oslo Stock Exchange in March 2014.

The Teekay and Teekay Tankers’ Boards of Directors have also agreed in principle to the sale to Teekay Tankers of Teekay’s conventional tanker commercial and technical management operations (Teekay Operations), including direct ownership in three commercially managed tanker pools, which currently generate income from commercially managing a fleet of 82 vessels and technically managing a fleet of 49 vessels.

In July 2010, Teekay Tankers invested $115 million in two loans maturing in July 2013, secured by first priority mortgages registered on two 2010-built VLCCs. The borrowers have been in default on their interest payment obligations since the first quarter of 2013 and their loan principal repayment since July 2013. However, due to an increase in tanker vessel values, in the fourth quarter of 2013 Teekay Tankers reversed all of its previously recorded loan loss provisions relating to these loans. Teekay Tankers currently manages these vessels and continues to have discussions with the borrowers and the second priority mortgagees of the vessels to realize on its security for the loans.

Teekay Parent

In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns several vessels, including the four conventional Suezmax tankers to be sold to TIL and four FPSO units. In addition, Teekay Parent currently owns one newbuilding FPSO unit under construction. As at February 1, 2014, Teekay Parent also had five chartered-in conventional tankers (including two Aframax tankers owned by Teekay Offshore), two chartered-in LNG carriers owned by Teekay LNG, and two chartered-in shuttle tankers and two chartered-in FSOs owned by Teekay Offshore.

For the fourth quarter of 2013, Teekay Parent generated negative cash flow from vessel operations of $14.4 million, compared to negative cash flow from vessel operations of $1.8 million in the same period of the prior year. The decrease in cash flow is primarily due to the completion of the Petrojarl I FPSO time-charter in April 2013 and lower production on the Foinaven FPSO, partially offset by increased equity income from Sevan Marine ASA, and lower time-charter hire expense as a result of the redelivery of time-chartered in vessels since the fourth quarter of 2012.

In mid-July 2013, Teekay Parent and the charterer agreed to temporarily stop production to repair the Foinaven FPSO’s gas compressor trains and the subsea system, which is the responsibility of the charterer. In late August 2013, one of the Foinaven FPSO’s two compressor trains was repaired. Since that time, the unit has been producing between approximately 30,000 and 35,000 barrels of oil per day. The repair of the second compressor train is expected to be completed during the first quarter of 2014, at which time the Foinaven FPSO is expected to be capable of ramping up to its target production level of approximately 43,000 barrels of oil per day.

In December 2013, Teekay Parent agreed to sell its last four owned conventional oil tankers to TIL for a total price of approximately $163 million in exchange for the assumption of related indebtedness, which approximated the fair value of the vessels. At December 31, 2013, these four conventional oil tankers were classified as “Assets Held for Sale” and were written down to their fair value selling price, resulting in the recognition of a $90.8 million impairment charge in the fourth quarter of 2013.

 

- more -

6


Fleet List

The following table summarizes Teekay’s consolidated fleet of 168 vessels as at February 1, 2014, including chartered-in vessels and vessels under construction but excluding vessels managed for third parties:

 

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

Teekay Parent Fleet (2)(3)

           

Aframax Tankers (4)

     —           2        —           2  

Suezmax Tankers (5)

     4        —           —           4  

MR Product Tanker

     —           1        —           1  

FPSO Units

     4        —           1        5  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Parent Fleet

     8        3        1        12  
  

 

 

    

 

 

    

 

 

    

 

 

 

Teekay Offshore Fleet

     46        2        2        50  

Teekay LNG Fleet

     55        5        17        77  

Teekay Tankers Fleet

     28        1        —           29  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Teekay Consolidated Fleet

     137        11        20        168  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Ownership interests in these vessels range from 33 percent to 100 percent.
(2) Excludes two LNG carriers chartered-in from Teekay LNG.
(3) Excludes two shuttle tankers and two FSO units chartered-in from Teekay Offshore.
(4) Excludes three Aframax tankers chartered-in from Teekay Offshore.
(5) The four Suezmax tankers are expected to be sold to TIL in February 2014.

 

- more -

7


Liquidity

As at December 31, 2013, the Company had consolidated liquidity of approximately $1.25 billion (consisting of $614.7 million cash and cash equivalents and $635.0 million of undrawn revolving credit facilities), of which $412.5 million of liquidity (consisting of $230.4 million cash and cash equivalents and $182.1 million of undrawn revolving credit facilities) is attributable to Teekay Parent. Including the approximately $162 million of proceeds from Teekay Offshore’s Norwegian bond issuance completed in January 2014, Teekay had pro forma total consolidated liquidity of approximately $1.4 billion as at December 31, 2013.

Conference Call

The Company plans to host a conference call on Thursday, February 20, 2014 at 11:00 a.m. (ET) to discuss its results for the fourth quarter and fiscal year of 2013. 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:

 

(1) By dialing (888) 417-8465 or (719) 457-2083, if outside North America, and quoting conference ID code 7889390.
(2) 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, February 27, 2014. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 7889390.

About Teekay

Teekay Corporation is an operational leader and project developer in the marine midstream space. Through its general partnership interests in two master limited partnerships, Teekay LNG Partners L.P. (NYSE:TGP) and Teekay Offshore Partners L.P. (NYSE:TOO), its controlling ownership of Teekay Tankers Ltd. (NYSE:TNK), and its fleet of directly-owned vessels, Teekay is responsible for managing and operating consolidated assets of over $11.5 billion, comprised of approximately 164 liquefied gas, offshore, and conventional tanker assets. With offices in 15 countries and approximately 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

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

For Investor Relations enquiries contact:

Ryan Hamilton

Tel: +1 (604) 844-6654

Website: www.teekay.com

 

- more -

8


TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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

 

     Three Months Ended     Year Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2013     2013     2012     2013     2012  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)     (unaudited)  

REVENUES (1)(2)(3)

     493,546       454,795       523,242       1,830,085       1,980,771  

OPERATING EXPENSES

          

Voyage expenses (2)

     31,727       28,022       30,796       112,218       138,283  

Vessel operating expenses (1)(2)(3)

     205,131       217,579       230,135       806,152       813,326  

Time-charter hire expense

     24,164       25,486       27,883       103,646       130,739  

Depreciation and amortization

     109,709       109,114       113,460       431,086       455,898  

General and administrative (2)(3)

     34,360       31,932       35,052       140,958       144,296  

Asset impairments and provisions (4)

     85,300       72,846       424,182       168,353       434,082  

Loss (gain) on sale of vessels and equipment

     40       (726     4,610       (1,995     6,975  

Restructuring charges

     2,617       461       2,121       6,921       7,565  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     493,048       484,714       868,239       1,767,339       2,131,164  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     498       (29,919     (344,997     62,746       (150,393
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

OTHER ITEMS

          

Interest expense (2)

     (48,382     (45,817     (40,956     (181,396     (167,615

Interest income (2)

     5,129       1,543       1,794       9,708       6,159  

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

     2,875       (26,707     44,580       18,414       (80,352

Equity income (5)

     35,098       26,753       26,097       136,538       79,211  

Income tax recovery (expense)

     839       662       13,028       (2,872     14,406  

Foreign exchange loss

     (4,334     (11,837     (6,405     (13,304     (12,898

Other income (loss)—net

     1,165       625       (1,690     5,646       366  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (7,112     (84,697     (308,549     35,480       (311,116

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

     (63,753     35,593       214,838       (150,218     150,936  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to stockholders of Teekay Corporation

     (70,865     (49,104     (93,711     (114,738     (160,180
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss per common share of Teekay

          

- Basic

     ($1.00     ($0.69     ($1.35     ($1.63     ($2.31

- Diluted

     ($1.00     ($0.69     ($1.35     ($1.63     ($2.31

Weighted-average number of common shares outstanding

          

- Basic

     70,781,695       70,755,282       69,589,200       70,457,968       69,263,369  

- Diluted

     70,781,695       70,755,282       69,589,200       70,457,968       69,263,369  

 

(1) The costs of business development and engineering studies relating to North Sea FPSO and FSO projects that the Company is pursuing are substantially reimbursable from customers upon completion. As a result, $1.7 million of costs were recognized in the three months ended December 31, 2013 relating to an FPSO study, $17.5 million of revenues and $20.1 million of costs were recognized in the three months ended September 30, 2013 upon completion of two FPSO studies, $20.3 million of revenues and $24.4 million of costs were recognized in the year ended December 31, 2013 upon completion of three FPSO studies, and $26.3 million of revenues and $28.1 million of costs were recognized in the three months and year ended December 31, 2012 upon completion of two FSO studies and one FPSO study.
(2) Realized and unrealized gains (losses) related to derivative instruments that are not designated as hedges for accounting purposes are included as a separate line item in the statements of income (loss). The realized (losses) gains relate to the amounts the Company actually received or paid to settle such derivative instruments and the unrealized gains (losses) relate to the change in fair value of such derivative instruments, as detailed in the table below:

 

- more -

9


     Three Months Ended     Year Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2013     2013     2012     2013     2012  

Realized (losses) gains relating to:

          

Interest rate swaps

     (30,967     (30,254     (33,164     (122,439     (123,277

Termination of interest rate swap agreements

     —         (31,798     —         (35,985     —    

Foreign currency forward contracts

     (694     152       646       (2,027     1,155  

Foinaven embedded derivative

     —         —         —         —         11,452  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (31,661     (61,900     (32,518     (160,451     (110,670
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unrealized gains (losses) relating to:

          

Interest rate swaps

     34,142       32,542       76,095       182,800       26,770  

Foreign currency forward contracts

     394       2,651       1,003       (3,935     6,933  

Foinaven embedded derivative

     —         —         —         —         (3,385
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     34,536       35,193       77,098       178,865       30,318  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     2,875       (26,707     44,580       18,414       (80,352
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(3) To more closely align the Company’s presentation to that of many of its peers, the cost of ship management activities related to the Company’s fleet and to services provided to third parties of $19.7 million and $80.9 million for the three months and year ended December 31, 2013, respectively, and $22.6 million for the three months ended September 30, 2013, have been presented in vessel operating expenses. Revenues from ship management activities provided to third parties of $4.5 million and $23.2 million for the three months and year ended December 31, 2013, respectively, and $4.8 million for the three months ended September 30, 2013, have been presented in revenues. Prior to 2013, the Company included these amounts in general and administrative expenses. All such costs incurred in comparative periods have been reclassified from general and administrative expenses to vessel operating expenses and revenues to conform to the presentation adopted in the current period. The amounts reclassified from general and administrative expenses to vessel operating expenses were $22.2 million and $83.2 million for the three months and year ended December 31, 2012, respectively. The amounts reclassified from general and administrative expenses to revenues were $8.0 million and $24.5 million for the three months and year ended December 31, 2012, respectively.
(4) The Company recognized asset impairments and provisions of $85.3 million and $168.4 million for the three months and year ended December 31, 2013, respectively, related to impairment charges on the four conventional tankers to be sold to TIL, and six shuttle tankers, including two shuttle tankers which Teekay Offshore owns through a 50 percent-owned subsidiary, and two shuttle tankers which Teekay Offshore owns through a 67 percent-owned subsidiary. The shuttle tanker impairments were the result of a cancellation of a contract renewal and expected sale of an aging vessel, the re-contracting of one of the vessels at lower rates than expected during the third quarter of 2013, the cancellation of a short-term contract for one shuttle tanker in September 2013 and a change in expectations for the contract renewal of two shuttle tankers, one operating in Brazil, and the other one in the North Sea. The amount also includes a provision for an FPSO front-end engineering and design study (FEED) receivable potentially not collectible, and the reversal of loss provisions relating to investment in term loans and advances to a joint venture partner’s parent entity. Asset impairments and provisions for the three months and year ended December 31, 2012 of $424.2 million and $434.1 million, respectively, relate to impairment of 18 of the Company’s conventional tankers, four shuttle tankers, and one FSO unit.
(5) The Company’s proportionate share of items within equity income as identified in Appendix A of this release, is as detailed in the table below. By excluding these items from equity income, the Company believes that 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. The adjusted equity income is a non-GAAP measure.

 

     Three Months Ended     Year Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2013     2013     2012     2013     2012  

Equity income

     35,098       26,753       26,097       136,538       79,211  

Gain on sale of equity investment

     —         —         —         —         (10,830

Proportionate share of unrealized (gains) losses on derivative instruments

     (6,607     (1,707     (10,676     (30,863     (5,272

Impairments of equity investments

     —         —         1,767       —         1,767  

Other(i)

     —         4,100       750       4,100       1,620  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity income adjusted for applicable items in Appendix A

     28,491       29,146       17,938       109,775       66,496  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(i) Includes restructuring accruals and loan loss provision in Sevan Marine ASA.

 

- more -

10


TEEKAY CORPORATION

SUMMARY CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

 

     As at December 31,      As at September 30,      As at December 31  
     2013      2013      2012  
     (unaudited)      (unaudited)      (unaudited)  

ASSETS

  

  

Cash and cash equivalents

     614,660        618,416        639,491  

Other current assets

     642,521        635,240        692,389  

Restricted cash – current

     4,748        6,170        39,390  

Restricted cash – long-term

     497,984        497,021        494,429  

Assets held for sale(1)

     176,247        —          22,364  

Vessels and equipment

     6,584,632        6,805,137        6,628,383  

Advances on newbuilding contracts

     766,512        731,001        692,675  

Derivative assets

     92,837        107,914        180,250  

Investment in equity accounted investees

     690,309        644,329        480,043  

Investment in term loans

     211,579        180,987        185,934  

Investment in direct financing leases

     727,262        579,655        436,601  

Other assets

     291,723        319,552        217,401  

Intangible assets

     107,898        112,081        126,136  

Goodwill

     166,539        166,539        166,539  
  

 

 

    

 

 

    

 

 

 

Total Assets

     11,575,451        11,404,042        11,002,025  
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND EQUITY

        

Accounts payable and accrued liabilities

     584,989        550,294        478,756  

Liabilities associated with assets held for sale(1)

     168,007        —          —    

Current portion of long-term debt

     1,028,093        1,033,712        867,683  

Long-term debt

     5,679,706        5,815,559        5,099,246  

Long-term debt—variable interest entity(2)

     —          —          230,359  

Derivative liabilities

     443,569        484,461        644,021  

In process revenue contracts

     179,852        194,033        241,591  

Other long-term liabilities

     271,621        195,971        220,080  

Redeemable non-controlling interest

     16,564        24,413        28,815  

Equity:

  

  

Non-controlling interests

     2,071,262        1,911,380        1,876,085  

Stockholders of Teekay

     1,131,788        1,194,219        1,315,389  
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     11,575,451        11,404,042        11,002,025  
  

 

 

    

 

 

    

 

 

 

 

(1) In connection with the pending 2014 sale of four conventional tanker owning companies to a newly created company, TIL, the vessels and equipment, long-term debt, and working capital related to the four vessel-owning companies have been classified as “Assets held for sale” and “Liabilities associated with assets held for sale” as at December 31, 2013.
(2) For accounting purposes, the Voyageur Spirit FPSO unit was a variable interest entity (VIE) until May 2, 2013, whereby Teekay was the primary beneficiary. As a result, the Company consolidated the VIE commencing December 1, 2011, even though the Company did not acquire the Voyageur Spirit FPSO unit until May 2, 2013, on which date the Company sold the Voyageur Spirit FPSO unit to Teekay Offshore.

 

- more -

11


TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

 

     Year Ended  
     December 31  
     2013     2012  
     (unaudited)     (unaudited)  

Cash and cash equivalents provided by (used for)

    

OPERATING ACTIVITIES

    

Net operating cash flow

     291,965       288,936  
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Net proceeds from long-term debt

     2,451,828       1,407,275  

Scheduled repayments of long-term debt

     (706,003     (276,403

Prepayments of long-term debt

     (1,017,818     (1,060,169

Decrease (increase) in restricted cash

     31,776       (33,592

Repurchase of common stock

     (12,000     —    

Net proceeds from public offerings of Teekay LNG

     186,596       178,532  

Net proceeds from public offerings of Teekay Offshore

     260,916       251,921  

Net proceeds from public offerings of Teekay Tankers

     —         65,771  

Equity contribution from joint venture partner

     4,934       86,350  

Cash dividends paid

     (90,265     (83,299

Distribution from subsidiaries to non-controlling interests

     (269,987     (246,555

Other

     27,219       9,840  
  

 

 

   

 

 

 

Net financing cash flow

     867,196       299,671  
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Expenditures for vessels and equipment

     (753,755     (615,900

Proceeds from sale of vessels and equipment

     47,704       250,807  

Investment in term loans

     (12,552     —    

Advances to joint ventures and joint venture partners

     (14,466     (117,235

Investment in joint ventures

     (157,762     (183,554

Investment in direct financing lease assets

     (307,950     —    

Direct financing lease payments received and other

     14,789       24,639  
  

 

 

   

 

 

 

Net investing cash flow

     (1,183,992     (641,243
  

 

 

   

 

 

 

Decrease in cash and cash equivalents

     (24,831     (52,636

Cash and cash equivalents, beginning of the year

     639,491       692,127  
  

 

 

   

 

 

 

Cash and cash equivalents, end of the year

     614,660       639,491  
  

 

 

   

 

 

 

 

- more -

12


TEEKAY CORPORATION

APPENDIX A – SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME

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

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

 

     Three Months Ended     Year Ended  
     December 31, 2013     December 31, 2013  
     (unaudited)     (unaudited)  
           $ Per           $ Per  
     $     Share (1)     $     Share (1)  

Net (loss) income – GAAP basis

     (7,112       35,480    

Adjust for: Net income attributable to non-controlling interests

     (63,753       (150,218  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to stockholders of Teekay

     (70,865     (1.00     (114,738     (1.63

Add (subtract) specific items affecting net loss:

        

Unrealized gains from derivative instruments (2)

     (41,143     (0.58     (205,089     (2.91

Foreign exchange loss (3)

     4,496       0.06        16,581       0.24   

Restructuring charges (4)

     2,617       0.04        6,921       0.10   

Asset impairments and provisions (5)

     85,300       1.20        168,353       2.39   

Net loss (gain) on sale of vessels and equipment (6)

     40       —          (1,995     (0.03

Non-recurring adjustments to tax accruals

     4,859       0.07        4,859       0.07   

Realized loss on termination of interest rate swap

     —         —          31,798       0.45   

Other (7)

     1,961       0.03        12,231       0.17   

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

     13,870       0.20        1,193       0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     72,000       1.02        34,852       0.50   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income (loss) attributable to stockholders of Teekay

     1,135       0.02        (79,886     (1.13
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Fully diluted per share amounts.
(2) Reflects the unrealized gains or losses relating to the change in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income from joint ventures, and the ineffective portion of foreign currency forward contracts designated as hedges for accounting purposes.
(3) Foreign currency exchange gains and losses primarily relate to the Company’s debt denominated in Euros and Norwegian Kroner in addition to the unrealized gains and losses on cross currency swaps used to hedge the principal and interest on the Norwegian Kroner bonds. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized.
(4) Restructuring charges primarily relate to the reorganization of the Company’s marine operations, and termination of crew upon sale of two conventional tankers in Teekay LNG.
(5) Relates to impairment of four conventional tankers to be sold to TIL, and six shuttle tankers, of which Teekay Offshore owns two shuttle tankers through a 50 percent-owned subsidiary and two shuttle tankers through a 67 percent-owned subsidiary. The asset impairments and provisions also include a loss provision for an FPSO FEED receivable, partially offset by the reversal of previously recorded loss provision relating to investments in term loans and a loan to a joint venture partner.
(6) Relates to gain on sale of equipment and gain (loss) on sale of three conventional tankers.
(7) Other primarily relates to recognition of unrealized loss on marketable securities, pension fund closure, pre-operational costs for an FPSO unit nearing completion, realized (gain) loss on foreign exchange forward contracts relating to certain capital acquisition expenditures and certain items in joint ventures.
(8) Items affecting net (loss) income include items from the Company’s wholly-owned subsidiaries, its consolidated non-wholly-owned subsidiaries and its proportionate share of items from equity-accounted for investments. The specific items affecting net (loss) income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “Non-controlling interests’ share of items above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of items listed in the table.

 

- more -

13


TEEKAY CORPORATION

APPENDIX A – SPECIFIC ITEMS AFFECTING NET LOSS

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

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

 

     Three Months Ended     Year Ended  
     December 31, 2012     December 31, 2012  
     (unaudited)     (unaudited)  
           $ Per           $ Per  
     $     Share (1)     $     Share (1)  

Net loss – GAAP basis

     (308,549       (311,116  

Adjust for: Net loss attributable to non-controlling interests

     214,838         150,936    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to stockholders of Teekay

     (93,711     (1.35     (160,180     (2.31

Add (subtract) specific items affecting net loss:

        

Unrealized gains from derivative instruments (2)

     (87,063     (1.25     (34,386     (0.50

Foreign exchange loss (3)

     6,511       0.09        10,600       0.15   

Loss on sale of assets / asset impairments(4)

     428,792       6.15        441,057       6.37   

Non-recurring adjustments to tax accruals(5)

     (11,360     (0.16     (19,366     (0.28

Restructuring charges(6)

     2,121       0.03        7,565       0.11   

Write down (gain on sale) of equity investment(7)

     1,767       0.03        (9,063     (0.13

Realized gain upon settlement of embedded derivative

     —         —          (11,452     (0.17

Other(8)

     918       0.01        697       0.01   

Non-controlling interests’ share of items above(9)

     (245,034     (3.52     (280,334     (4.05
  

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

     96,652       1.39        105,318       1.52   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income (loss) attributable to stockholders of Teekay

     2,941       0.04        (54,862     (0.79
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Fully diluted per share amounts.
(2) Reflects the unrealized gains or losses relating to the change in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income (loss) from joint ventures, and the ineffective portion of foreign currency forward contracts designated as hedges for accounting purposes.
(3) Foreign currency exchange gains and losses primarily relate to the Company’s debt denominated in Euros and Norwegian Kroner in addition to the unrealized gains and losses on cross currency swaps used to hedge the principal and interest on the Norwegian Kroner bonds. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized.
(4) Relates to the impairment during the year ended December 31, 2012 of 18 of the Company’s conventional tankers, four shuttle tankers, and one FSO unit, and disposal of two older shuttle tankers and three conventional tankers.
(5) Relates to reversal of freight tax accruals and recognition of deferred income tax asset relating to a new Norwegian tax structure.
(6) Restructuring charges relate to the reorganization of the Company’s marine operations.
(7) Relates to impairment of the Company’s interest in a joint venture and gain on sale of the Company’s 40 percent interest in an FPSO unit.
(8) Other includes a revenue adjustment for volatile organic compound equipment, partially offset by write down of the Company’s investment in marketable securities.
(9) Items affecting net (loss) income include items from the Company’s wholly-owned subsidiaries, its consolidated non-wholly-owned subsidiaries and its proportionate share of items from equity accounted for investments. The specific items affecting net (loss) income are analyzed to determine whether any of the amounts originated from a consolidated non-wholly-owned subsidiary. Each amount that originates from a consolidated non-wholly-owned subsidiary is multiplied by the non-controlling interests’ percentage share in this subsidiary to arrive at the non-controlling interests’ share of the amount. The amount identified as “Non-controlling interests’ share of items above” in the table above is the cumulative amount of the non-controlling interests’ proportionate share of items listed in the table.

 

- more -

14


TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY BALANCE SHEET AS AT DECEMBER 31, 2013

(in thousands of U.S. dollars)

(unaudited)

 

     Teekay      Teekay      Teekay      Teekay     Consolidation        
     Offshore      LNG      Tankers      Parent     Adjustments     Total  

ASSETS

               

Cash and cash equivalents

     219,126        139,481        25,646        230,407       —         614,660  

Other current assets

     210,991        39,964        25,373        366,193       —         642,521  

Restricted cash

     —          497,298        —          5,434       —         502,732  

Assets held for sale

     —          —          —          176,247       —         176,247  

Vessels and equipment

     3,089,582        1,825,455        859,308        810,287       —         6,584,632  

Advances on newbuilding contracts

     —          97,207        —          669,305       —         766,512  

Derivative assets

     10,823        81,311        —          703       —         92,837  

Investment in equity accounted investees

     52,120        586,654        8,366        52,869       (9,700     690,309  

Investment in direct financing leases

     27,567        699,695        —          —         —         727,262  

Investment in term loans

     —          —          136,061        75,518       —         211,579  

Other assets

     43,126        113,419        14,784        120,394       —         291,723  

Advances to affiliates

     15,202        6,634        27,991        (49,827     —         —    

Equity investment in subsidiaries

     —          —          —          470,951       (470,951     —    

Intangibles and goodwill

     137,549        132,476        —          4,412       —         274,437  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

     3,806,086        4,219,594        1,097,529        2,932,893       (480,651     11,575,451  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

               

Accounts payable and accrued liabilities

     182,984        61,879        26,281        313,845       —         584,989  

Advances from affiliates

     121,864        19,270        11,323        (152,457     —         —    

Liabilities associated with assets held for sale

     —          —          —          168,007       —         168,007  

Current portion of long-term debt

     806,009        128,782        25,246        68,056       —         1,028,093  

Long-term debt

     1,562,967        2,247,054        719,388        1,150,297       —         5,679,706  

Derivative liabilities

     169,079        207,883        25,269        41,338       —         443,569  

In-process revenue contracts

     101,294        4,773        —          73,785       —         179,852  

Other long-term liabilities

     23,984        106,169        5,350        136,118       —         271,621  

Redeemable non-controlling interest

     16,564        —          —          —         —         16,564  

Equity:

               

Non-controlling interests (1)

     34,297        52,994        —          2,116       1,981,855       2,071,262  

Equity attributable to stockholders/unitholders of publicly-listed entities

     787,044        1,390,790        284,672        1,131,788       (2,462,506     1,131,788  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

     3,806,086        4,219,594        1,097,529        2,932,893       (480,651     11,575,451  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

NET DEBT (2)

     2,149,850        1,739,057        718,988        982,512       —         5,590,407  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

(1) Non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the respective joint venture partners’ share of joint venture net assets. Non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net assets of Teekay’s publicly-traded subsidiaries.
(2) Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash. Net debt excludes liabilities associated with assets held for sale.

 

- more -

15


TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY STATEMENT OF INCOME (LOSS) FOR THE THREE MONTHS ENDED DECEMBER 31, 2013

(in thousands of U.S. dollars)

(unaudited)

 

     Teekay     Teekay     Teekay     Teekay     Consolidation        
     Offshore     LNG     Tankers     Parent     Adjustments     Total  

Revenues

     260,654       104,858       42,163       114,455       (28,584     493,546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Voyage expenses

     29,173       869       2,492       707       (1,514     31,727  

Vessel operating expenses

     91,250       25,164       21,922       66,795       —         205,131  

Time-charter hire expense

     13,670       —         1,021       36,668       (27,195     24,164  

Depreciation and amortization

     52,311       24,145       12,113       21,140       —         109,709  

General and administrative

     11,066       5,438       2,354       15,377       125       34,360  

Asset impairments and provisions (recoveries) (1)

     19,280       (3,804     (14,910     84,734       —         85,300  

Gain on sale of vessels and equipment

     —         —         —         40       —         40  

Restructuring charges

     104       1,786       —         727       —         2,617  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     216,854       53,598       24,992       226,188       (28,584     493,048  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     43,800       51,260       17,171       (111,733     —         498  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

     (18,403     (15,775     (2,468     (11,736     —         (48,382

Interest income

     434       1,019       63       3,613       —         5,129  

Realized and unrealized gains (losses) on derivative instruments

     9,948       (5,238     (1,014     (821     —         2,875  

Income tax (expense) recovery

     (1,896     (2,722     (94     5,551       —         839  

Equity income

     3,934       28,602       564       1,998       —         35,098  

Equity in earnings of subsidiaries (2)

     —         —         —         38,903       (38,903     —    

Foreign exchange (loss) gain

     (2,465     (5,188     (84     3,403       —         (4,334

Other – net

     260       214       (8     699       —         1,165  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     35,612       52,172       14,130       (70,123     (38,903     (7,112

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

     5,657       (4,644     —         (742     (64,024     (63,753
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     41,269       47,528       14,130       (70,865     (102,927     (70,865
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO—Consolidated (4)(5)

     112,839       74,210       14,374       (16,951     —         184,472  

CFVO—Equity Investments(6)

     6,644       52,626       1,245       2,502       —         63,017  

CFVO—Total

     119,483       126,836       15,619       (14,449     —         247,489  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) During the three months ended December 31, 2013, impairment charges were recognized by Teekay Parent of $90.8 million relating to four conventional tankers in connection with the pending sale of these vessels to TIL, and by Teekay Offshore of $19.3 million relating to two shuttle tankers, which Teekay Offshore owns through a 67 percent-owned subsidiary. The asset impairments and provisions also include a $2.6 million provision for an FPSO FEED receivable that potentially is not collectible. These charges were partially offset by the reversal of previously recognized loss provisions on investments in term loans of $14.9 million by Teekay Tankers and $8.7 million by Teekay Parent, and a $3.8 million provision reversal by Teekay LNG relating to the advances to a joint venture partner’s parent entity.
(2) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries.
(3) Net (income) loss attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income (loss) of their respective joint ventures. Net (income) loss attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries.

 

- more -

16


(4) CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix C and Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
(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 December 31, 2013, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $43.3 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.

 

- more -

17


TEEKAY CORPORATION

APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION

SUMMARY STATEMENT OF INCOME (LOSS) FOR THE YEAR ENDED DECEMBER 31, 2013

(in thousands of U.S. dollars)

(unaudited)

 

     Teekay
Offshore
    Teekay
LNG
    Teekay
Tankers
    Teekay
Parent
    Consolidation
Adjustments
    Total  

Revenues

     950,977       399,276       170,087       440,008        (130,263     1,830,085  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Voyage expenses

     104,325       2,857       8,337       2,804        (6,105     112,218  

Vessel operating expenses

     347,979       99,949       91,667       266,557        —         806,152  

Time-charter hire expense

     56,682       —         6,174       164,949        (124,159     103,646  

Depreciation and amortization

     200,242       97,884       47,833       85,127        —         431,086  

General and administrative

     45,250       20,444       12,594       59,969        2,701       140,958  

Asset impairments and provisions (1)

     94,946       —         —         73,407        —         168,353  

Loss (gain) on sale of vessels and equipment

     301       —         71       (2,367     —         (1,995

Restructuring charges

     2,361       1,786       —         2,774        —         6,921  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     852,086       222,920       166,676       653,220        (127,563     1,767,339  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from vessel operations

     98,891       176,356       3,411       (213,212     (2,700     62,746  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

     (62,964     (55,703     (10,023     (53,923     1,217       (181,396

Interest income

     2,561       2,972       158       5,234        (1,217     9,708  

Realized and unrealized gains (losses) on derivative instruments

     34,820       (14,000     (1,524     (882     —         18,414  

Income tax (expense) recovery

     (2,225     (5,156     (593     5,102        —         (2,872

Equity income

     6,731       123,282       854       5,671        —         136,538  

Equity in earnings of subsidiaries (2)

     —         —         —         125,511        (125,511     —    

Foreign exchange (loss) gain

     (5,278     (15,832     (107     7,913        —         (13,304

Other – net

     (621     1,396       (314     5,185        —         5,646  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     71,915       213,315       (8,138     (113,401     (128,211     35,480  

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

     19,089       (12,073     —         (1,337     (155,897     (150,218
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     91,004       201,242       (8,138     (114,738     (284,108     (114,738
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO—Consolidated (4)(5)

     384,576       278,544       50,835       (106,427     (2,700     604,828  

CFVO—Equity Investments (6)

     12,807       193,657       2,684       5,332        —         214,480  

CFVO—Total

     397,383       472,201       53,519       (101,095     (2,700     819,308  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Teekay Offshore recognized impairment charges of $94.9 million relating to two conventional tankers and six shuttle tankers during the year ended December 31, 2013, including the impairment of $37.2 million of two shuttle tankers which Teekay Offshore owns through a 50 percent-owned subsidiary, and $19.3 million of two shuttle tankers which Teekay Offshore owns through a 67 percent-owned subsidiary. Teekay Parent had already recognized impairment charges on the two Teekay Offshore-owned conventional tankers during the three months ended December 31, 2012 and therefore, reversed the impairment charge on consolidation. Teekay Parent also recognized an impairment of $90.8 million on four conventional tankers in connection with the pending sale of these vessels to TIL. The asset impairments and provisions also include the recognition of loss provision of $2.6 million on an FPSO FEED receivable, and the reversal of a previously recognized loss provision of $1.9 million by Teekay Parent on an investment in a term loan.
(2) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries.
(3) Net (income) loss attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income (loss) of their respective joint ventures. Net (income) loss attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries.

 

- more -

18


(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, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix C and Appendix E to this release for reconciliations of this non-GAAP financial measure as used in this release to the most directly comparable GAAP financial measure.
(5) In addition to Teekay Parent’s CFVO, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the year ended December 31, 2013, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $162.2 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 measure.

 

- more -

19


TEEKAY CORPORATION

APPENDIX C – SUPPLEMENTAL FINANCIAL INFORMATION

TEEKAY PARENT SUMMARY OPERATING RESULTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2013

(in thousands of U.S. dollars)

(unaudited)

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

 

     Owned
Conventional
Tankers
    In-Chartered
Conventional
Tankers
    FPSOs     Other (1)     Teekay
Parent
Total
 

Revenues

     3,893       15,882        75,584       19,096       114,455  

Voyage expenses

     216       446        —         45       707  

Vessel operating expenses

     2,798       5,436        54,666       3,895       66,795  

Time-charter hire expense

     —         18,235        7,359       11,074       36,668  

Depreciation and amortization

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

General and administrative

     624       1,057        7,382       6,314       15,377  

Asset impairments and provisions (recoveries)(2)

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

Gain on sale of vessel

     —         —          —         40       40  

Restructuring charges

     —         —          —         727       727  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     97,053       25,174        91,036       12,925       226,188  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from vessel operations

     (93,160     (9,292     (15,452     6,171       (111,733
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

          

(Loss) income from vessel operations

     (93,160     (9,292     (15,452     6,171       (111,733

Depreciation and amortization

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

Asset impairments and provisions (recoveries)

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

Gain on sale of vessel

     —         —          —         40       40  

Amortization of in process revenue contracts and other

     —         —          (10,691     —         (10,691

Realized losses from the settlements of non-designated derivative instruments

     (23     —          (418     —         (441
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO—Consolidated(3)(4)

     232       (9,292     (4,932     (2,959     (16,951

CFVO—Equity(5)

     1,339       —          1,175       (12     2,502  

CFVO—Total

     1,571       (9,292     (3,757     (2,971     (14,449
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes results of two chartered-in LNG carriers owned by Teekay LNG and one chartered-in FSO unit owned by Teekay Offshore, and interest income received from, and reversal of previously recognized loss provision on an investment in a term loan.
(2) Teekay Parent recognized an impairment of $90.8 million relating to four conventional tankers in connection with the pending sale of these vessels to TIL. The asset impairments and provisions also include a loss provision for an FPSO FEED receivable of $2.6 million. This was partially offset by the reversal of previously recognized loss provision of $8.7 million on an investment in a term loan.
(3) CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents Teekay Parent’s CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

- more -

20


(4) In addition to the CFVO generated by its directly owned and chartered-in assets, Teekay Parent also receives cash dividends and distributions from its publicly-traded subsidiaries. For the three months ended December 31, 2013, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $43.3 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.
(5) CFVO – Equity Investments represents Teekay Parent’s proportionate share of CFVO from its equity accounted vessels and other investments. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

 

- more -

21


TEEKAY CORPORATION

APPENDIX C – SUPPLEMENTAL FINANCIAL INFORMATION

TEEKAY PARENT SUMMARY OPERATING RESULTS

FOR THE YEAR ENDED DECEMBER 31, 2013

(in thousands of U.S. dollars)

(unaudited)

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

 

     Owned     In-Chartered                 Teekay  
     Conventional     Conventional                 Parent  
     Tankers     Tankers     FPSOs     Other (1)     Total  

Revenues

     16,864       66,656        282,687       73,801       440,008  

Voyage expenses

     411       2,198        —         195       2,804  

Vessel operating expenses

     12,998       22,754        212,328       18,477       266,557  

Time-charter hire expense(2)

     —         93,576        32,276       39,097       164,949  

Depreciation and amortization

     10,348       (466     78,646       (3,401     85,127  

General and administrative

     2,557       4,536        26,721       26,155       59,969  

Asset impairments and provisions (recoveries)(3)

     90,813       —          2,634       (20,040     73,407  

Gain on sale of vessels and equipment

     —         —          (1,337     (1,030     (2,367

Restructuring charges

     —         —          —         2,774       2,774  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     117,127       122,598        351,268       62,227       653,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from vessel operations

     (100,263     (55,942     (68,581     11,574       (213,212
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   

   

(Loss) income from vessel operations

     (100,263     (55,942     (68,581     11,574       (213,212

Depreciation and amortization

     10,348       (466     78,646       (3,401     85,127  

Asset impairments and provisions (recoveries)

     90,813       —          2,634       (20,040     73,407  

Gain on sale of vessels and equipment

     —         —          (1,337     (1,030     (2,367

Amortization of in process revenue contracts and other

     —          —          (47,883     —         (47,883

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

     72       —          —         —         72  

Realized losses from the settlements of non-designated derivative instruments

     (136     —          (1,033     (903     (2,072

Dropdown predecessor cash flow(4)

     —         —          501       —         501  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

CFVO—Consolidated(5)(6)

     834       (56,408     (37,053     (13,800     (106,427

CFVO—Equity(7)

     6,195       —          (760     (103     5,332  

CFVO—Total

     7,029       (56,408     (37,813     (13,903     (101,095
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes the results of two chartered-in LNG carriers owned by Teekay LNG and one chartered-in FSO unit owned by Teekay Offshore, interest income received from, and reversal of previously recognized loss provision on, an investment in a term loan, a $2.7 million success fee payment received from Teekay LNG upon the acquisition of the Exmar LPG joint venture in February 2013, and a $1.0 million success fee payment received from Teekay Offshore upon the acquisition of one HiLoad DP unit in September 2013.
(2) Time-charter hire expense includes $11.3 million in charter termination fees paid to Teekay Offshore.

 

- more -

22


(3) Teekay Parent recognized an impairment of $90.8 million relating to four conventional tankers in connection with the pending sale of these vessels to TIL. The asset impairments and provisions also include a loss provision for an FPSO FEED receivable of $2.6 million. This was partially offset by reversal of loss provisions. Teekay Offshore recognized impairment charges of $18.1 million relating to two conventional tankers during the year ended December 31, 2013. Teekay Parent had already recognized these impairment charges during the three months ended December 31, 2012 and therefore, reversed the impairment charge on consolidation. Teekay Parent further reversed $1.9 million of a previously recognized loss provision relating to an investment in a term loan.
(4) Represents CFVO relating to assets owned by Teekay Parent prior to their acquisition by Teekay Offshore. These historical financial results are now included in the historical financial results of Teekay Offshore and therefore excluded from the above loss from vessel operations for Teekay Parent.
(5) CFVO represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write downs, gains and losses on the sale of vessels, adjustments for direct financing leases to a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO – Consolidated represents Teekay Parent’s CFVO from vessels that are consolidated on the Company’s financial statements. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see Appendix E to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
(6) 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 year ended December 31, 2013, Teekay Parent received cash dividends and distributions from these subsidiaries totaling $162.2 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.
(7) 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.

 

- more -

23


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 December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012. The Company defines free cash flow, a non-GAAP financial measure, as cash flow from vessel operations attributed to its directly-owned and in-chartered assets, distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers), net of interest expense and drydock expenditures in the respective period. For a reconciliation of Teekay Parent cash flow from vessel operations for the three months ended December 31, 2013 to the most directly comparable financial measure under GAAP, please refer to Appendix C to this release. For a reconciliation of Teekay Parent cash flow from vessel operations to the most directly comparable GAAP financial measure for the three months ended September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012, please see Appendix E to this release. Teekay Parent free cash flow, as provided below, is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

 

     Three Months Ended  
     December 31,     September 30,     June 30,     March 31,     December 31,  
     2013     2013     2013     2013     2012  

Teekay Parent cash flow from vessel operations (1)

          

Owned Conventional Tankers

     232       883       (380     99       (563

In-Chartered Conventional Tankers (2)

     (9,292     (8,672     (18,436     (20,008     (11,601

FPSOs

     (4,932     (24,214     (13,407     5,500       16,705  

Other

     (2,959     (2,528     (3,337     (4,977     (4,657
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     (16,951     (34,531     (35,560     (19,386     (116

Daughter company distributions to

          

Teekay Parent (3)

          

Common shares/units (4)

          

Teekay LNG Partners

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

Teekay Offshore Partners

     12,819       12,507       12,507       11,747       11,461  

Teekay Tankers Ltd. (5)

     629       629       629       629       629  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     30,887       30,152       30,152       29,392       29,106  

General partner interest

          

Teekay LNG Partners

     7,566       6,320       5,946       5,935       5,935  

Teekay Offshore Partners

     4,867       3,671       3,671       3,603       3,155  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     12,433       9,991       9,617       9,538       9,090  

Total Teekay Parent cash flow before interest and dry dock expenditures

     26,369       5,612       4,209       19,544       38,080  

Less:

          

Net interest expense (6)

     (12,039     (16,576     (17,017     (18,574     (18,075

Dry dock expenditures

     (2,056     (607     —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL TEEKAY PARENT FREE CASH FLOW

     12,274       (11,571     (12,808     970       20,005  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) CFVO represents income from vessel operations before depreciation and amortization expense, vessel/goodwill write downs, gains or losses on the sale of vessels, adjustments for direct financing leases on a cash basis, and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. CFVO is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. For further details for the three months ended December 31, 2013, including a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to Appendix C to this release; for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure for the three months ended September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012, please refer to Appendix E to this release.

 

- more -

24


(2) Includes charter termination fees of $4.5 million and $6.8 million paid to Teekay Offshore during the three months ended June 30, 2013 and March 31, 2013, respectively.
(3) Cash dividend and distribution cash flows are shown on an accrual basis for dividends and distributions declared for the respective period.
(4) Common share/unit dividend/distribution cash flows to Teekay Parent are based on Teekay Parent’s ownership on the ex-dividend date for the respective publicly traded subsidiary and period as follows:

 

     Three Months Ended  
     December 31,      September 30,      June 30,      March 31,      December 31,  
     2013      2013      2013      2013      2012  

Teekay LNG Partners

              

Distribution per common unit

   $ 0.6918      $ 0.6750      $ 0.6750      $ 0.6750      $ 0.6750  

Common units owned by

              

Teekay Parent

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distribution

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

Teekay Offshore Partners

              

Distribution per common unit

   $ 0.5384      $ 0.5253      $ 0.5253      $ 0.5253      $ 0.5125  

Common units owned by

              

Teekay Parent

     23,809,468        23,809,468        23,809,468        22,362,814        22,362,814  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total distribution

   $ 12,819,018      $ 12,507,114      $ 12,507,114      $ 11,747,186      $ 11,460,942  

Teekay Tankers Ltd.

              

Dividend per share

   $ 0.03      $ 0.03      $ 0.03      $ 0.03      $ 0.03  

Shares owned by Teekay Parent (5)

     20,976,530        20,976,530        20,976,530        20,976,530        20,976,530  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total dividend

   $ 629,296      $ 629,296      $ 629,296      $ 629,296      $ 629,296  

 

(5) Includes Class A and Class B shareholdings.
(6) 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.

 

- more -

25


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 December 31, 2013 and December 31, 2012. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

     Three Months Ended December 31, 2013  
     (unaudited)  
     Teekay
Offshore
Partners LP (1)
    Teekay LNG
Partners LP
    Teekay
Tankers Ltd.
    Teekay
Parent
    Teekay
Corporation
Consolidated
 

Income (loss) from vessel operations

     43,800        51,260       17,171       (111,733     498  

Depreciation and amortization

     52,311        24,145       12,113       21,140       109,709  

Amortization of in process revenue contracts and other

     (3,212     (1,341     —         (10,691     (15,244

Realized losses from the settlements of non designated derivative instruments

     (253     —         —         (441     (694

Asset impairments and provisions (recoveries)

     19,280        (3,804     (14,910     84,734       85,300  

Gain on sale of vessels and equipment

     —          —         —         40       40  

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

     913        3,950       —         —         4,863  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Consolidated’(2)

     112,839        74,210       14,374       (16,951     184,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     Three Months Ended December 31, 2012  
     (unaudited)  
     Teekay
Offshore
Partners LP (1)
    Teekay LNG
Partners LP
    Teekay
Tankers Ltd.
    Teekay
Parent
    Teekay
Corporation
Consolidated
 

Income (loss) from vessel operations

     31,370        11,322       (354,748     (32,941     (344,997

Depreciation and amortization

     47,249        25,949       18,431       21,831       113,460  

Amortization of in process revenue contracts and other

     (2,476     (759     (240     (15,696     (19,171

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

     146        —         —         23       169  

Realized gains (losses) from the settlements of non-designated foreign exchange forward contracts/bunkers/FFAs

     1,104        —         —         (458     646  

Asset impairments / net loss on vessel sales

     19,754        29,367       352,546       27,125       428,792  

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

     745        1,475       —         —         2,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Consolidated(2)

     97,892        67,354       15,989       (116     181,119  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) The results of Teekay Offshore include the results from both continuing and discontinued operations.
(2) Excludes the cash flow from vessel operations relating to assets acquired from Teekay Parent for the periods prior to their acquisition by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as those results are included in the historical results for Teekay Parent.

 

- more -

26


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 December 31, 2013 and December 31, 2012. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives, but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO from equity accounted vessels represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

     Three Months Ended December 31, 2013     Three Months Ended December 31, 2012  
     (unaudited)     (unaudited)  
     At
100%
    Company’s
Portion(1)
    At
100%
    Company’s
Portion(1)
 

Revenues

     234,131       109,092        158,119       72,883   

Vessel and other operating expenses

     98,434       45,949        73,400       34,468   

Depreciation and amortization

     34,437       17,343        18,759       9,582   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

     101,260       45,799        65,960       28,833   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense

     (22,832     (10,754     (15,610     (6,861

Realized and unrealized gain on derivative instruments

     1,408       298        15,588       5,507   

Other income—net

     (1,053     (247     99       396   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other items

     (22,478     (10,701     54       (969
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income / equity income of equity accounted vessels

     78,782       35,098        66,014       27,864   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from vessel operations of equity accounted vessels

     101,260       45,799        65,960       28,833   

Depreciation and amortization

     34,437       17,343        18,759       9,582   

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

        

direct finance lease

     7,471       2,711        7,466       2,731   

Amortization of in-process revenue contracts and other

     (5,606     (2,838     (8,350     (4,339
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations of equity accounted vessels(2)

     137,562       63,017        83,835       36,807   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) The Company’s proportionate share of its equity accounted vessels and other investments ranges from 33 percent to 52 percent.
(2) CFVO from equity accounted vessels represents the Company’s proportionate share of CFVO from its equity accounted vessels and other investments.

 

- more -

27


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 September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012. CFVO, a non-GAAP financial measure, represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and unrealized gains or losses relating to derivatives, but includes realized gains or losses on the settlement of foreign exchange forward contracts. CFVO is included because certain investors use this data to measure a company’s financial performance. CFVO is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Company’s performance required by GAAP.

 

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

Teekay Parent loss from vessel operations

     (1,634 )     (8,672     (32,692     (1,172     (44,170

Depreciation and amortization

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

Loss provision

     —          —         —          1,141        1,141   

Gain on sale of vessel

     —          —         —          (161     (161

Amortization of in process revenue contracts and other

     —          —         (10,708     —          (10,708

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

     19        —         —          —          19   

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

     (84     —          (484     (903     (1,471
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Teekay Parent

     883        (8,672     (24,214     (2,528     (34,531
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     Three Months Ended June 30, 2013  
     (unaudited)  
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Teekay
Parent
Total
 

Teekay Parent (loss) income from vessel operations

     (2,922     (18,203     (21,883     2,883        (40,125

Depreciation and amortization

     2,582        (233     20,646        (965     22,030   

Asset impairments/net (gain) on vessel sales

     —          —          (1,337     (5,255     (6,592

Amortization of in process revenue contracts and other

     —          —          (11,184     —          (11,184

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

     38        —         —          —          38   

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

     (78     —          (150     —          (228

Dropdown predecessor cash flow

     —          —          501        —          501   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Teekay Parent

     (380     (18,436     (13,407     (3,337     (35,560
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- more -

28


     Three Months Ended March 31, 2013  
     (unaudited)  
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Teekay
Parent
Total
 

Teekay Parent (loss) income from vessel operations

     (2,547 )     (8,528 )     1,446        (7,557     (17,186

Depreciation and amortization

     2,582       (233     19,335        (546     21,138   

Asset impairments/net (gain) loss on vessel sales

     —          (11,247     —          3,126        (8,121

Amortization of in process revenue contracts and other

     —          —          (15,300 )     —          (15,300

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

     15        —          —          —          15   

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

     49        —          19        —          68   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Teekay Parent

     99       (20,008     5,500        (4,977     (19,386
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     Three Months Ended December 31, 2012  
     (unaudited)  
     Owned
Conventional
Tankers
    In-chartered
Conventional
Tankers
    FPSOs     Other     Teekay
Parent
Total
 

Teekay Parent (loss) income from vessel operations

     (2,723 )     (11,601     13,023        (31,640     (32,941

Depreciation and amortization

     2,598       —          19,375        (142     21,831   

Asset impairments/net loss on vessel sales

     —          —          —          27,125        27,125   

Amortization of in process revenue contracts and other

     —          —         (15,696     —          (15,696

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

     23        —         —          —          23   

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

     (461     —          3        —          (458
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash flow from vessel operations—Teekay Parent

     (563     (11,601     16,705        (4,657     (116
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- more -

29


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 and year ended December 31, 2013 and December 31, 2012. Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage 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.

 

                                         Year Ended  
     Three Months Ended December 31, 2013     December 31,
2013
 
                                   Teekay     Teekay  
     Teekay Offshore     Teekay LNG     Teekay     Teekay     Consolidation     Corporation     Corporation  
     Partners LP (1)     Partners LP     Tankers Ltd.     Parent     Adjustments     Consolidated     Consolidated  

Revenues

     260,654        104,858       42,163       114,455       (28,584     493,546       1,830,085  

Voyage expense

     (29,173     (869     (2,492     (707     1,514       (31,727     (112,218
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     231,481        103,989       39,671       113,748       (27,070     461,819       1,717,867  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

                                         Year Ended  
     Three Months Ended December 31, 2012     December 31,
2012
 
                                   Teekay     Teekay  
     Teekay Offshore     Teekay LNG     Teekay     Teekay     Consolidation     Corporation     Corporation  
     Partners LP (1)     Partners LP     Tankers Ltd.     Parent     Adjustments     Consolidated     Consolidated  

Revenues

     240,489        97,958       45,493       171,550       (32,248     523,242       1,980,771  

Voyage expense

     (28,178     (327     (1,017     (1,624     350       (30,796     (138,283
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     212,311        97,631       44,476       169,926       (31,898     492,446       1,842,488  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

- more -

30


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 December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, and December 31, 2012. 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  
     December 31,     September 30,     June 30,     March 31,     December 31,  
     2013     2013     2013     2013     2012  

Interest expense

     (48,382     (45,817     (44,687     (42,510     (40,956

Interest income

     5,129       1,543       2,018       1,018       1,794  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense—consolidated

     (43,253     (44,274     (42,669     (41,492     (39,162

Less:

          

Non-Teekay Parent net interest expense

     (35,130     (31,604     (29,540     (26,725     (25,802
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest expense net of interest income—Teekay Parent

     (8,123     (12,670     (13,129     (14,767     (13,360

Add:

          

Teekay Parent realized losses on interest rate swaps (1)

     (3,916     (3,906     (3,888     (3,807     (4,715
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest expense—Teekay Parent

     (12,039     (16,576     (17,017     (18,574     (18,075
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Realized losses on interest rate swaps for the three months ended June 30, 2013 excludes a realized loss on the termination of a swap agreement prior to the acquisition of the Voyageur FPSO unit in May 2013.

 

- more -

31


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: the increase in annualized cash flows to be received by Teekay Parent due to respective 2.5 percent fourth quarter of 2013 Teekay Offshore and Teekay LNG cash distribution increases; Teekay Parent’s strategic objective of becoming a fixed asset-light company focused on creating value by increasing cash flows generated by its publicly-traded daughter entities, including completing Teekay Parent’s sale of its last four directly owned conventional oil tankers to TIL; the estimated cost and timing of delivery of newbuildings and converted vessels and the commencement of associated time-charter contracts; the timing and certainty of the Knarr FPSO being eligible for sale to Teekay Offshore commencing in the fourth quarter of 2014 under the omnibus agreement; the Voyageur Spirit FPSO achieving the certificate of final acceptance from its charterer and commencing full operations under the charterer contract; securing long-term employment for the LNG carrier newbuilding ordered by Teekay LNG in November 2013; expected fuel-efficiency and emission levels associated with the MEGI engines to be built by DSME; the delayed delivery dates for the two LNG carrier newbuildings ordered by Teekay LNG from 2016 to 2017 to better coincide with the expected timing of new LNG shipping projects; TIL’s acquisition of four Aframax vessels and the ability of TIL to secure additional future tanker acquisitions; TIL’s listing of its shares on the Oslo Stock Exchange; Teekay Tankers completing the acquisition of the Teekay Operations; the Company realizing on its security in loans secured by three VLCCs; the timing of completion of repairs to the Foinaven FPSO’s second compressor train and the FPSO unit achieving target production under its charter contract; and the timing of amount of future capital expenditure commitments for Teekay Parent, Teekay LNG and Teekay Offshore. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs and FPSOs; decreases in oil production by or increased operating expenses for FPSO units; trends in prevailing charter rates for shuttle tanker and FPSO contract renewals; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts or complete existing contract negotiations; the inability to negotiate new contracts on the three LNG carrier newbuildings ordered in July and November 2013; shipyard production or vessel conversion delays and cost overruns; delays in commencement of operations of FPSO and FSO units at designated fields; changes in the Company’s expenses; the Company’s future capital expenditure requirements and the inability to secure financing for such requirements; the inability of the Voyageur Spirit FPSO to complete certain operational tests and receive its certificate of final acceptance from the charterer; the inability of the Company to repair the second gas compressor train on the Foinaven FPSO and achieve target production; the inability of the Company to realize on the security of its VLCC term loan investments; the inability of the Company to complete vessel sale transactions to its public-traded subsidiaries or to third parties; potential delays in the construction of the Knarr FPSO and/or commencement of operations under its charter contract; conditions in the capital markets; actual performance of the MEGI engines; failure of TIL to list its shares on the Oslo Stock Exchange or to complete its anticipated vessel acquisitions; 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, 2012. 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.

 

- end -

32