Teekay Corporation Reports First Quarter 2016 Results
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 05/19/16 -- Highlights
Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported financial and operating results for the first quarter 2016. These results include the Company''s three publicly-listed subsidiaries (Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE: TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE: TGP), and Teekay Tankers Ltd. (Teekay Tankers) (NYSE: TNK)) (collectively, the Daughter Entities), all of which are consolidated in the Company''s financial statements, and all remaining subsidiaries of the Company are referred to in this release as Teekay Parent. Please refer to the first quarter 2016 earnings releases of Teekay Offshore, Teekay LNG and Teekay Tankers, which are available on the Company''s website at , for additional information on their respective results.
Summary Financial Information
CEO Commentary
"On a consolidated basis, Teekay generated higher cash flow from vessel operations in the first quarter of 2016 compared to the same period of the prior year," commented Peter Evensen, Teekay Corporation''s President and Chief Executive Officer. "The increase in cash flow was mainly driven by various growth projects that delivered during 2015, which more than offset the lower revenue from Teekay Offshore''s Varg FPSO as the unit begins to wind down operations after almost 18 years on the Varg field. We continue to receive a strong level of customer interest in the Varg FPSO for various other offshore production opportunities in Norway."
Mr. Evensen continued, "To bolster the Teekay Group''s financial position, we have completed or are nearing completion of a number of financing initiatives at each entity. Teekay Parent has completed a $50 million debt refinancing and has secured commitments of $262 million towards refinancing two debt facilities, and today entered into an agreement to issue $100 million in shares of common stock, $40 million of which is to be issued to two trusts established by our late founder, including Resolute Investments, Teekay Parent''s largest shareholder. Upon our anticipated completion of these initiatives, Teekay Parent will have significantly reduced its financial leverage, increased its liquidity and enhanced its ability to provide continued sponsorship of its two master limited partnerships, which we believe strengthens the entire Teekay Group."
Mr. Evensen continued, "At our Daughter Entities, Teekay Offshore has made significant progress toward addressing its 2016 and 2017 funding needs. I am pleased to report that Teekay Offshore is also nearing completion of a number of financing initiatives, including a $200 million preferred equity offering, which upon anticipated completion of the combined initiatives, are expected to fully fund its growth capital expenditures through 2018 and address its near- and medium-term debt maturities. Executing on Teekay LNG''s robust pipeline of profitable growth projects that are scheduled to deliver in 2016 through 2020 also remains a top priority, and we continue to make significant progress on securing financing for Teekay LNG''s remaining newbuildings. Finally, earlier this year, Teekay Tankers completed a $900 million debt facility, which extends its debt maturity profile and provides financial flexibility."
Mr. Evensen added, "Looking ahead, upon our anticipated completion of the current initiatives at Teekay Parent and Teekay Offshore, the Teekay Group''s financial position will be significantly enhanced. In addition, we expect our already strong cash flow from vessel operations will continue to increase as Teekay Offshore and Teekay LNG''s robust pipelines of growth projects deliver between now and 2020."
Summary of Results
Teekay Corporation Consolidated
The Company''s consolidated cash flow from vessel operations (CFVO) increased to $359.0 million for the quarter ended March 31, 2016, compared to $320.9 million for the same period of the prior year, primarily due to higher cash flows from Teekay Offshore related to the charter contract commencements for the Petrojarl Knarr (Knarr) floating production, storage and offloading (FPSO) unit and the Arendal Spirit Unit for Maintenance and Safety (UMS) and the acquisition of six long-distance towing and offshore installation vessels during 2015; and higher cash flows from Teekay Tankers as a result of its acquisition of 19 modern conventional tankers during 2015, partially offset by lower spot tanker rates. These increases were partially offset by lower cash flows from Teekay Parent related to off-hire and higher repairs and maintenance costs due to the temporary loss of two mooring lines on the Banff FPSO and the lay-up of the Polar Spirit and Arctic Spirit LNG carriers.
The Company reported consolidated adjusted net loss attributable to shareholders of $6.2 million, or $0.08 per share, during the quarter ended March 31, 2016, compared to adjusted net income attributable to shareholders of $15.7 million, or $0.22 per share, for the same period of the prior year.
On a GAAP basis, the Company''s consolidated net loss was $48.8 million, or $0.67 per share, for the quarter ended March 31, 2016, compared to consolidated net loss of $9.8 million, or $0.13 per share, for the same period of the prior year.
Teekay Parent
Teekay Parent GPCO Cash Flow, which includes distributions and dividends paid to Teekay Parent from Teekay''s publicly-listed subsidiaries in the following quarter, less Teekay Parent''s corporate general and administrative expenses, was $6.9 million for the quarter ended March 31, 2016, compared to $38.4 million for the same period of the prior year. The distributions and dividends received from Teekay''s publicly-listed subsidiaries for the quarter ended March 31, 2016 decreased to $11.8 million, compared to $45.3 million for the same period of the prior year, primarily due to the reductions in quarterly general partner and limited partner cash distributions received from Teekay Offshore and Teekay LNG as a result of the temporary reduction in cash distributions on Teekay Offshore''s and Teekay LNG''s common units announced in December 2015, partially offset by an increase in cash dividends received from Teekay Tankers. For the first quarter of 2016, Teekay Tankers declared and paid a dividend of $0.09 per share, an increase from $0.03 per share in the same period of the prior year.
Teekay Parent OPCO Cash Flow, which includes cash flow attributable to assets directly-owned by, or chartered-in to, Teekay Parent, net of interest expense and dry-dock expenditures, decreased to negative $20.7 million for the quarter ended March 31, 2016, from negative $6.9 million for the same period of the prior year. The decrease is primarily due to lower cash flows related to the sale of the Knarr FPSO to Teekay Offshore on July 1, 2015, higher off-hire due to the temporary loss of two mooring lines on the Banff FPSO during the first quarter of 2016 (total of 23 days off-hire) and the lay-up of Polar Spirit and Arctic Spirit LNG carriers.
Total Teekay Parent Free Cash Flow, which is the total of GPCO and OPCO cash flows, was negative $13.8 million during the first quarter of 2016, compared to $31.5 million for the same period of the prior year. Please refer to Page 9 of this release for additional information about Teekay Parent Free Cash Flow.
On April 1, 2016, the Company declared a cash dividend on its common stock of $0.055 per share for the quarter ended March 31, 2016. The cash dividend is payable on May 19, 2016 to all shareholders of record on April 29, 2016.
Summary Results of Daughter Entities
Teekay Offshore Partners
Teekay Offshore''s distributable cash flow(1) increased during the quarter ended March 31, 2016, compared to the same period of the prior year, primarily due to the acquisition of the Knarr FPSO unit in July 2015, the commencement of the Arendal Spirit UMS charter contract in June 2015, and the commencement of the East Coast Canada shuttle tanker contracts in June 2015. These increases were partially offset by the reduction in revenue earned on the Petrojarl Varg FPSO unit as it prepares to come off field in August 2016, the expiration of two shuttle tanker contracts in the second quarter of 2015, and the sale of two conventional tankers and one shuttle tanker during 2015. Please refer to Teekay Offshore''s first quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay LNG Partners
Teekay LNG''s distributable cash flow(1) decreased during the quarter ended March 31, 2016, compared to the same period of the prior year, primarily due to lower revenues from Teekay LNG''s 52 percent-owned Malt LNG joint venture, lower revenues from two Suezmax tankers upon the charterer exercising its one-year extension options between September 2015 and January 2016, and lower capitalized distributions relating to equity financing of newbuildings as a result of the temporary reduction in cash distributions on Teekay LNG''s common units announced in December 2015. These decreases were partially offset by the Creole Spirit liquefied natural gas (LNG) carrier commencing its charter contract in late-February 2016. Please refer to Teekay LNG''s first quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay Tankers
Teekay Tankers'' free cash flow(2) increased during the quarter ended March 31, 2016, compared to the same period of the prior year, primarily due to an increase in fleet size as a result of the acquisition of 19 modern, mid-size tankers during 2015 and the expansion of Teekay Tankers'' chartered-in tanker portfolio during 2015 and 2016, partially offset by lower spot tanker rates in the first quarter of 2016 compared to the same period in the prior year. Please refer to Teekay Tankers'' first quarter 2016 earnings release for additional information on the financial results for this entity.
Summary of Recent Events
Teekay Parent
In addition to financing initiatives currently underway at Teekay Offshore (see details below), Teekay Parent is executing on various initiatives directly to increase its financial strength and flexibility. The main Teekay Parent financing initiatives include:
Completion of each of these initiatives is subject to, and conditioned upon, completion of each of the other initiatives described above, as well as the financing initiatives being undertaken by Teekay Offshore described below.
In May 2016, Teekay Parent completed the $50 million refinancing of an existing debt facility relating to the Shoshone Spirit VLCC and entered into an agreement to issue $100 million of common shares at a price of $8.32 per common share. Teekay Parent expects to complete all these initiatives before June 30, 2016.
Teekay Offshore
Since early 2016, Teekay Offshore has been executing on a series of financing initiatives intended to fund its unfunded capital expenditures and upcoming debt maturities. The main Teekay Offshore financing initiatives include:
Completion of each of these initiatives is subject to, and conditioned upon, completion of each of the other initiatives described above, as well as the financing initiatives being undertaken by Teekay Parent described above.
In April 2016, Teekay Offshore completed the new $35 million tranche on an existing debt facility secured by two shuttle tankers. As of May 18, 2016, Teekay Offshore has received lender commitments for the other bank financing initiatives, received a majority of lender commitments for the Varg FPSO refinancing, received commitments from a majority of the NOK bondholders to extend the bond maturities (only 66.7% of the votes are required to approve the proposal), extended the $200 million Teekay Corporation intercompany loan maturity, is in discussions to defer the delivery of the two remaining UMS newbuildings, and is in advanced discussions relating to the preferred equity financing. Teekay Offshore expects to complete all these initiatives before June 30, 2016.
On April 21, 2016, during the process of lifting the gangway connecting the Arendal Spirit UMS to an FPSO unit in a period of heavy waves, the gangway of the Arendal Spirit suffered extensive damage, resulting in the UMS being declared off-hire by its charterer, Petrobras. Teekay Offshore is arranging to replace this gangway with the gangway from the second UMS newbuilding, which is currently in the process of being transported from the shipyard in China to Brazil. Teekay Offshore anticipates having the new gangway installed on the Arendal Spirit by mid-June, at which point the unit is expected to recommence full operations.
In March 2016, Teekay Offshore completed the sale of two conventional tankers, the Kilimanjaro Spirit and Fuji Spirit, to a third party for aggregate sales proceeds of approximately $50 million. After repaying existing debt secured by these vessels, this transaction added approximately $30 million to Teekay Offshore''s liquidity position. Related to the sale of these vessels, Teekay Offshore has arranged to charter back both vessels for a period of three-years with an additional one-year extension option at $23,000 per day and $22,750 per day, respectively. One vessel has been fixed on a two-year time charter-out contract at $25,000 per day and the other vessel is currently trading in the spot conventional tanker market.
In January 2016, Teekay Offshore completed the sale of one shuttle tanker, the Navion Torinita, to a third party for aggregate sale proceeds of approximately $5 million.
Teekay LNG
In late-February 2016, Teekay LNG''s first M-type, Electronically Controlled, Gas Injection (MEGI) LNG carrier newbuilding, Creole Spirit, commenced its five-year fee-based charter contract with Cheniere Energy. Teekay LNG''s second MEGI LNG carrier newbuilding, Oak Spirit, has commenced sea trials and is on schedule to begin its five-year fee-based contract with Cheniere Energy in the third quarter of 2016. Each vessel is expected to earn annual CFVO and DCF of approximately $50 million and $30 million, respectively. In early-February 2016, Teekay LNG secured a 10-year, $360 million long-term lease facility, which will be used to finance both vessels.
During February and March 2016, Centrofin, the charterer of the Bermuda Spirit and Hamilton Spirit Suezmax tankers, exercised its options under the charter contract to purchase both vessels for a total purchase price of approximately $94 million. The Bermuda Spirit was sold on April 15, 2016 and the Hamilton Spirit was sold on May 17, 2016 and Teekay LNG used substantially all of the proceeds from these sales to repay existing term loans associated with these vessels.
In July 2014, Teekay LNG, through a 50/50 joint venture with China LNG Shipping (Holdings) Limited (China LNG), finalized agreements to provide six internationally-flagged Ice-Class LNG carriers for the Yamal LNG Project in Northern Russia. The joint venture''s vessels, which are scheduled to deliver between the first quarter of 2018 and the first quarter of 2020, will operate under time-charter contracts until December 31, 2045, plus extension options. In April 2016, Yamal LNG announced it had secured approximately $16.2 billion equivalent in long-term external plant financing for the Yamal LNG Project from Chinese and Russian sources. Yamal LNG has announced that these loan facilities, combined with previous financing provided by the National Welfare Fund is the full external funding required for the Yamal LNG Project. As of March 31, 2016, the Yamal LNG Project is reported to be 51 percent complete, with the first LNG train being over 65 percent complete.
The Teekay LNG/China LNG joint venture is currently in discussions with lenders on the financing of its Ice-Class LNG carrier newbuildings.
Liquidity
As at March 31, 2016, Teekay Parent had total liquidity of $147.6 million (consisting of $139.9 million of cash and cash equivalents and $7.7 million of undrawn revolving credit facilities) and, on a consolidated basis, Teekay Corporation had total liquidity of approximately $851.4 million (consisting of $658.2 million of cash and cash equivalents and $193.2 million of undrawn revolving credit facilities).
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the U.S. Securities and Exchange Commission. These non-GAAP financial measures, which include Cash Flow From Vessel Operations, Adjusted Net Income Attributable to Shareholders, Teekay Parent Free Cash Flow, and Net Interest Expense, are intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP. In addition, these measures do not have standardized meanings, and may not be comparable to similar measures presented by other companies. The Company believes that certain investors use this information to evaluate the Company''s financial performance.
Teekay Parent Financial Measures
Teekay Parent Free Cash Flow represents the sum of (a) distributions received as a result of ownership interests in its publicly-traded subsidiaries (Teekay LNG, Teekay Offshore, and Teekay Tankers) net of Teekay Parent''s corporate general and administrative expenditures in the respective period (collectively, Teekay Parent GPCO Cash Flow) plus (b) CFVO attributed to Teekay Parent''s directly-owned and chartered-in assets, less Teekay Parent''s net interest expense and drydock expenditures in the respective period (collectively, Teekay Parent OPCO Cash Flow). Net interest expense includes interest expense, interest income and realized gains and losses on interest rate swaps. Please refer to Page 9 and Appendices B, C and D of this release for further details and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures reflected in the Company''s consolidated financial statements.
Consolidated Financial Measures
Cash flow from vessel operations (CFVO) represents income from vessel operations before depreciation and amortization expense, amortization of in-process revenue contracts, vessel write-downs, gains or losses on the sale of vessels and adjustments for direct financing leases to a cash basis, but includes realized gains or losses on the settlement of foreign currency forward contracts and a derivative charter contract. CFVO - Consolidated represents CFVO from vessels that are consolidated on the Company''s financial statements. CFVO - Equity Investments represents the Company''s proportionate share of CFVO from its equity-accounted vessels and other investments. CFVO is a non-GAAP financial measure used by certain investors to measure the financial performance of companies. Please refer to Appendices C and D of this release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures reflected in the Company''s consolidated financial statements.
Adjusted net income attributable to shareholders excludes from net income items of income or loss that are typically excluded by securities analysts in their published estimates of the Company''s financial results. The Company believes that certain investors use this information to evaluate the Company''s financial performance. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure reflected in the Company''s consolidated financial statements.
Availability of 2015 Annual Report
The Company filed its 2015 Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (SEC) on April 26, 2016. Copies of this report are available on Teekay Corporation''s website, under "Investors - Teekay Corporation - Financials & Presentations", at . Shareholders may request a printed copy of this Annual Report, including the complete audited financial statements, free of charge by contacting Teekay Corporation''s Investor Relations.
Conference Call
The Company plans to host a conference call on Thursday, May 19, 2016 at 1:30 p.m. (ET) to discuss its results for the first quarter 2016. An accompanying investor presentation will be available on Teekay''s website at 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:
The conference call will be recorded and available until Thursday, June 2, 2016. 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 2764696.
About Teekay
Teekay Corporation operates in the marine midstream space through its ownership of the general partners and a portion of the outstanding limited partner interests in Teekay LNG Partners L.P. (NYSE: TGP) and Teekay Offshore Partners L.P. (NYSE: TOO). The general partners own all of the outstanding incentive distribution rights of these entities. In addition, Teekay has a controlling ownership interest in Teekay Tankers Ltd. (NYSE: TNK) and directly owns a fleet of vessels. The combined Teekay entities manage and operate consolidated assets of approximately $13 billion, comprised of approximately 220 liquefied gas, offshore, and conventional tanker assets. With offices in 15 countries and approximately 7,700 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world''s leading oil and gas companies.
Teekay''s common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".
This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, or any other securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Teekay Parent Free Cash Flow
(in thousands of U.S. dollars, except share and per share data)
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 timing and completion of Teekay Parent''s financing initiatives and their impact on Teekay Parent''s financial position, including, among other things, plans to refinance existing debt, sell Teekay Parent''s interest in three Infield Support Vessel Tugs and issue equity securities; the timing and completion of financing initiatives to address Teekay Offshore''s medium-term funding needs and their impact on Teekay Offshore''s financial position, including, among other things, plans to refinance and access additional debt, extend the maturities to late-2018 for two NOK senior unsecured bonds, issue equity securities and defer deliveries of two units for maintenance and safety (UMS); the impact of the long-term plant financing for the Yamal LNG Project on the financing of Teekay LNG''s ARC7 Ice-Class LNG carrier newbuildings; the impact on Teekay Tankers'' debt maturity profile and financial flexibility as a result of the $900 million long-term debt facility; the sale of the Hamilton Spirit; the impact of growth projects on Teekay Group''s future cash flow from vessel operations; the replacement of the Arendal Spirit UMS gangway and timing of recommencing operations; and the interest of current and potential customers in chartering the Varg FPSO. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: Teekay Parent''s ability to complete its financing initiatives; Teekay Offshore''s ability to complete its financing initiatives, including delivery deferrals for the UMS newbuildings to address Teekay Offshore''s medium-term funding needs, including financing for existing growth projects;
failure of lenders, bondholders, investors or other third parties to approve or agree to the proposed terms of the financing initiatives of Teekay Parent and Teekay Offshore; failure to achieve or the delay in achieving expected benefits of such financing initiatives; changes in production of, or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of newbuilding orders or greater or less than anticipated rates of vessel scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs, FPSOs, UMS, and towage vessels; changes in oil production and the impact on the Company''s tankers and offshore units; fluctuations in global oil prices; trends in prevailing charter rates for the Company''s vessels and offshore unit contract renewals; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; the inability of charterers to make future charter payments; potential shipyard and project construction delays, newbuilding specification changes or cost overruns; costs relating to projects; potential delays related to the Arendal Spirit UMS recommencing operations; failure by Teekay Offshore to secure a new charter contract for the Varg FPSO; delays in commencement of operations of FPSO and FSO units at designated fields; changes in the Company''s expenses; 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, 2015. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company''s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
Contacts:
For Investor Relations Enquiries:
Ryan Hamilton
+1 (604) 844-6654
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Datum: 19.05.2016 - 00:35 Uhr
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