Teekay Corporation Reports Second Quarter 2016 Results
Highlights - Second quarter 2016 consolidated GAAP net loss attributable to shareholders of Teekay of $77.8 million, or $1.14 per share. - Second quarter 2016 consolidated adjusted net income attributable to shareholders of Teekay of $0.7 million, or $0.01 per share (excluding items listed in Appendix A of this release). - Second quarter 2016 consolidated cash flow from vessel operations of $350.5 million. - In June 2016, Teekay Parent and Teekay Offshore completed all its previously announced financing initiatives. On a consolidated basis, Teekay had total liquidity of approximately $1.1 billion as of June 30, 2016. - In June 2016, Teekay Parent agreed to sell its last remaining conventional tanker. - Declared second quarter 2016 cash dividend of $0.055 per share.
(firmenpresse) - HAMILTON, BERMUDA -- (Marketwired) -- 08/04/16 -- Teekay Corporation (Teekay or the Company) (NYSE: TK) today reported the Company''s results for the quarter ended June 30, 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, which are referred to in this release as Teekay Parent. Please refer to the second 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 slightly lower cash flow from vessel operations compared to the same period of the prior year; however, our results exceeded our expectations mostly due to higher shuttle tanker fleet utilization, higher tanker rates and lower operating expenses mainly in our FPSO segment," commented Peter Evensen, Teekay Corporation''s President and Chief Executive Officer.
Mr. Evensen continued, "With strong support from our financial stakeholders, Teekay Parent completed all of its previously announced financing initiatives in June 2016, including $350 million in extended bank facilities and $100 million in equity capital. With the completion of these financing initiatives, we have reduced our financial leverage and enhanced our liquidity position, which we believe strengthens the entire Teekay Group of companies. In addition, we reached an agreement to sell Teekay Parent''s remaining conventional tanker, the Shoshone Spirit VLCC, which is expected to further reduce our financial leverage."
Mr. Evensen added, "At our Daughter Entities, Teekay Offshore completed all its previously announced financing initiatives in June 2016. These initiatives, together with expected operating cash flow and previously arranged debt facilities, are expected to cover all its medium-term liquidity requirements and fully finance all of Teekay Offshore''s $1.6 billion of committed growth projects. Executing on Teekay LNG''s robust pipeline of growth projects delivering through 2020 has also been a major focus area and Teekay LNG continues to make good progress on the financing for these projects. Since May 2016, Teekay LNG has secured lender credit approvals on over $900 million of new debt financings, including three MEGI LNG carrier newbuildings, the first two Yamal LNG Arc7 newbuildings and the majority of its remaining LPG carrier newbuildings. Once Teekay Offshore''s and Teekay LNG''s projects are delivered, these growth projects are expected to add significantly to their annual cash flow from vessel operations."
Summary of Results
Teekay Corporation Consolidated
The Company''s consolidated results decreased during the quarter ended June 30, 2016, compared to the same period of the prior year, primarily due to lower revenues from Teekay Parent related to the lay-up of the Polar Spirit and Arctic Spirit LNG carriers; lower income and cash flows in Teekay LNG as a result of the sales of two conventional tankers in April and May 2016; lower income and cash flows in Teekay Offshore due to off-hire during the second quarter of 2016 related to damage to the gangway of the Arendal Spirit UMS (which has been repaired and returned to operations in early-July 2016), the redelivery of the Varg FPSO and a provision made with respect to retroactive claims from the charterer of the Piranema Spirit FPSO; and lower income and cash flows in Teekay Tankers due to lower spot tanker rates. Consolidated income from vessel operations was also reduced in the second quarter of 2016 due to asset impairment charges associated with Teekay Offshore''s cancellation of two UMS newbuildings and two conventional tankers to be sold by Teekay Parent and Teekay Tankers, respectively. Please refer to footnote (2) of the summary consolidated statements of (loss) income included in this release for further details.
These decreases were partially offset by higher income and cash flows as a result of Teekay Tankers'' acquisition of 19 modern conventional tankers during 2015 and higher income and cash flows from vessel operations from Teekay LNG as a result of the delivery of Creole Spirit MEGI LNG carrier newbuilding, which commenced its five-year charter contract with Cheniere Energy in late-February 2016 and the favorable settlement of a disputed charter contract termination related to one of the vessels in Teekay LNG''s 52 percent-owned MALT LNG joint venture with Marubeni Corporation.
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 $7.6 million for the quarter ended June 30, 2016, compared to $41.2 million for the same period of the prior year. The distributions and dividends received from Teekay''s publicly-listed subsidiaries for the quarter ended June 30, 2016 decreased to $10.7 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 second quarter of 2016, Teekay Tankers declared and paid a dividend of $0.06 per share, an increase from $0.03 per share in the same period of the prior year. In connection with the financing initiatives recently completed by Teekay Offshore (as described below), Teekay Parent agreed with Teekay Offshore that, until Teekay Offshore''s Norwegian Kroner bonds maturing in 2018 have been repaid, all cash distributions to be paid to Teekay Corporation, including the general partner of Teekay Offshore, will instead be paid in common units of Teekay Offshore.
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 $12.5 million for the quarter ended June 30, 2016, from positive $8.3 million for the same period of the prior year. The decrease was primarily due to lower cash flows related to the sale of the Knarr FPSO to Teekay Offshore on July 1, 2015, lower revenues as a result of lower production on the Foinaven FPSO 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 $4.9 million during the second quarter of 2016, compared to positive $49.5 million for the same period of the prior year and negative $13.8 million in the first quarter of 2016. Please refer to Appendix D of this release for additional information about Teekay Parent Free Cash Flow.
Summary Results of Daughter Entities
Teekay Offshore Partners
Teekay Offshore''s results decreased during the quarter ended June 30, 2016, compared to the same period of the prior year, primarily due to the off-hire of the Arendal Spirit UMS as a result of damage to the unit''s gangway (the unit was subsequently repaired and returned to operations in early-July 2016), the redelivery of the Varg FPSO (which left its field at the end of July 2016), a provision made with respect to retroactive claims from the charterer of the Piranema Spirit FPSO, shuttle tanker contract expirations on a long-term contract of affreightment and a time-charter out contract over the past year, and the sale of two conventional tankers and sale-leaseback on two additional conventional tankers in 2015 and 2016. These decreases were partially offset by the acquisition of the Knarr FPSO unit in July 2015 and the commencement of the East Coast Canada shuttle tanker contracts in June 2015. Please refer to Teekay Offshore''s second quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay LNG Partners
Teekay LNG''s results increased during the quarter ended June 30, 2016, compared to the same period of the prior year, primarily due to the favorable settlement of a disputed charter contract termination related to one of the vessels in the Teekay LNG''s 52 percent-owned MALT LNG joint venture with Marubeni Corporation, of which Teekay LNG''s share was $20.3 million, and the delivery of the Creole Spirit MEGI LNG carrier newbuilding, which commenced its five-year charter contract with Cheniere Energy in late-February 2016. These increases were partially offset by lower revenues for two other vessels in the 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 the sales of two conventional tankers in April and May 2016. Please refer to Teekay LNG''s second quarter 2016 earnings release for additional information on the financial results for this entity.
Teekay Tankers
Teekay Tankers'' results decreased during the quarter ended June 30, 2016, compared to the same period of the prior year, primarily due to lower average spot tanker rates in the second quarter of 2016 compared to the same period of the prior year, partially offset by an increase in fleet size as a result of the acquisition of 19 modern, mid-size tankers during 2015. Please refer to Teekay Tankers'' second quarter 2016 earnings release for additional information on the financial results for this entity.
Summary of Recent Events
Teekay Parent
In addition to a series of financing initiatives at Teekay Offshore (see details below), in May and June 2016, Teekay Parent completed various initiatives to increase its financial strength and flexibility, including:
In June 2016, Teekay Parent reached an agreement to sell the 2011-built Shoshone Spirit VLCC for gross proceeds of approximately $63 million, which is expected to continue operating under its existing time-charter contract earning $49,000 per day until its delivery to the buyer between September and October 2016.
In July 2016, Teekay Parent secured a short-term charter commencing in August 2016 for the Polar Spirit LNG carrier, which Teekay Parent has chartered-in from Teekay LNG under a time charter contract.
The Hummingbird Spirit FPSO was previously operating in the latter part of its charter contract with Centrica Energy (Centrica) whereby Centrica could terminate the contract at any time with 90 days'' notice. In June 2016, Teekay Parent entered into a contract amendment with Centrica to extend the firm period to September 2017 (with charterer''s right to terminate no earlier than March 1, 2017) in exchange for a lower fixed charter rate plus upside through an oil price tariff. The contract amendment took effect on July 1, 2016.
Teekay Offshore
Between April and June 2016, Teekay Offshore completed a series of financing initiatives to fund its unfunded capital expenditures and upcoming debt maturities, including:
As part of completing the financing initiatives, Teekay Offshore secured a payment-in-kind option by agreeing to convert $46 million of face value of the $250 million of the outstanding 8.60% Series C Cumulative Convertible Preferred Units (Series C Preferred Units) for approximately 8.3 million common units, and the remaining $204 million of outstanding Series C Preferred Units for approximately 8.5 million of Teekay Offshore''s newly issued 8.60% Series C-1 Cumulative Convertible Preferred Units (Series C-1 Preferred Units) that also include a two-year payment-in-kind option.
In April 2016, during the process of lifting the gangway connecting the Arendal Spirit UMS to an FPSO unit, the gangway of the Arendal Spirit UMS suffered extensive damage, resulting in the UMS being declared off-hire under its charter contract. The gangway has now been replaced and undergone extensive testing, and the unit returned to operations in early-July 2016.
Teekay LNG
On August 1, 2016, Teekay LNG''s second MEGI LNG carrier newbuilding, Oak Spirit, commenced its five-year fee-based contract with Cheniere Energy. The vessel is expected to earn annual cash flow from vessel operations(1) and distributable cash flow of approximately $25 million and $15 million, respectively.
In July 2016, Teekay LNG reached an agreement with Daewoo Shipbuilding and Marine Engineering (DSME) which provides Teekay LNG with an option to defer delivery of its unchartered MEGI LNG carrier, Torben Spirit, from its original delivery date of February 2017 to December 2017. Teekay LNG is currently pursuing employment opportunities for this vessel and will decide in late-2016 on whether to defer the delivery.
Teekay Tankers
In June 2016, Teekay Tankers entered into an agreement to sell one of its non-core MR product tankers, the 2004-built Teesta Spirit, to a third party for gross proceeds of approximately $14 million. The vessel is expected to be delivered in mid-August 2016.
Since May 2016, Teekay Tankers has entered into time charter-out contracts for one Suezmax tanker and two Aframax tankers and a time-charter swap agreement, which effectively provides a fixed charter rate on one Aframax vessel-equivalent. These contracts have an average rate of approximately $24,800 per day with firm contract periods ranging from 11 to 24 months. Three contracts commenced in June and July 2016 and the remaining contract is expected to commence in the third quarter of 2016.
(1) This is a non-GAAP financial measure. Please refer to "Definitions and Non-GAAP Financial Measures" for definitions of this term. A reconciliation with respect to this forward looking statement has been omitted in reliance on the ''unreasonable efforts'' exception.
Liquidity
As at June 30, 2016, Teekay Parent had total liquidity of $341.6 million (consisting of $223.5 million of cash and cash equivalents and $118.1 million of undrawn revolving credit facilities) and, on a consolidated basis, Teekay Corporation had total liquidity of approximately $1.1 billion (consisting of $789.7 million of cash and cash equivalents and $327.0 million of undrawn revolving credit facilities).
Conference Call
The Company plans to host a conference call on Friday, August 5, 2016 at 11:00 a.m. (ET) to discuss its results for the second 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 Friday, August 19, 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 2475173.
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".
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, and 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, although these measures are used consistently among entities in the Teekay Group of companies, they 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.
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 E 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 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.
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 dry-dock 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 Appendices B, C, D and E of this release for further details and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures reflected in the Company''s consolidated financial statements.
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 results and benefits of the Teekay Offshore''s financing initiatives, including Teekay Offshore''s ability to meet its medium-term liquidity requirements and finance its committed growth projects; the sale of the Shoshone Spirit VLCC, including the continuation of the charter until completion of the sale and the financial impact of the sale on Teekay Parent''s financial leverage; the impact of Teekay Offshore''s and Teekay LNG''s growth projects on cash flow from vessel operations; the amount, the timing and certainty of securing financing for Teekay LNG''s committed growth projects; the financial impact of the Oak Spirit MEGI LNG carrier; and the expected timing for commencement of Teekay Tankers'' charter contract. 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: 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; delays in commencement of operations of FPSO and FSO units at designated fields; Teekay LNG''s and Teekay LNG''s joint ventures'' ability to secure financing for its existing newbuildings and projects; 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:
Teekay Corporation
Ryan Hamilton
Investor Relations Enquiries
+1 (604) 844-6654
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Datum: 03.08.2016 - 23:25 Uhr
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