Teekay Corporation reports third quarter results

Friday, November 9, 2012

  • Third quarter 2012 total cash flow from vessel operations of $191.6 million, up 11 percent from the same period of the prior year.
  • Third quarter 2012 adjusted net loss attributable to stockholders of Teekay of $20.0 million, or $0.29 per share.

Teekay Corporation (NYSE:TK) -

Highlights

  • Third quarter 2012 total cash flow from vessel operations of $191.6 million, up 11 percent from the same period of the prior year.
  • Third quarter 2012 adjusted net loss attributable to stockholders of Teekay of $20.0 million, or $0.29 per share (excluding specific items which increased GAAP net loss by $0.3 million, or $0.00 per share).
  • Agreed to sell the Voyageur Spirit FPSO to Teekay Offshore for $540 million; transaction expected to be completed in December 2012.
  • Cidade de Itajai FPSO sea trials underway; expected to leave shipyard for Brazil in mid-November 2012.
  • Total consolidated liquidity of approximately $2.0 billion as at September 30, 2012, pro forma for Teekay Corporation's October 2012 US $123 million Norwegian bond offering.

Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported an adjusted net loss attributable to stockholders of Teekay(1) of $20.0 million, or $0.29 per share, for the quarter ended September 30, 2012, compared to an adjusted net loss attributable to stockholders of Teekay of $40.6 million, or $0.58 per share, for the same period of 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 $0.3 million, or $0.00 per share, for the three months ended September 30, 2012 and increasing GAAP net loss by $250.6 million, or $3.62 per share, for the three months ended September 30, 2011, 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 $20.3 million, or $0.29 per share, for the quarter ended September 30, 2012, compared to net loss attributable to stockholders of Teekay of $291.2 million, or $4.20 per share, for the same period of the prior year. Net revenues(2) for the third quarter of 2012 were $433.9 million, compared to $428.5 million for the same period of the prior year.

For the nine months ended September 30, 2012, the Company reported an adjusted net loss attributable to stockholders of Teekay(1) of $57.8 million, or $0.84 per share, compared to an adjusted net loss attributable to stockholders of Teekay of $104.7 million, or $1.48 per share, for the nine months ended September 30, 2011. 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 $8.7 million, or $0.12 per share, for the nine months ended September 30, 2012 and increasing GAAP net loss by $312.6 million, or $4.42 per share, for the nine months ended September 30, 2011, as detailed in Appendix Ato this release. Including these items, the Company reported on a GAAP basis, a net loss attributable to stockholders of Teekay of $66.5 million, or $0.96 per share, for the nine months ended September 30, 2012, compared to a net loss attributable to stockholders of Teekay of $417.3 million, or $5.90 per share, for the nine months ended September 30, 2011. Net revenues(2) for the nine months ended September 30, 2012 were $1,333.5 million, compared to $1,304.4 million for the same period of the prior year.

On October 5, 2012, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended September 30, 2012. The cash dividend was paid on October 26, 2012, to all shareholders of record on October 17, 2012.

  1. Adjusted net (loss) income 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 income that are typically excluded by securities analysts in their published estimates of the Company's financial results.
  2. Net revenues represents revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company's website at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable financial measure under GAAP.

"During the third quarter, we continued to make progress on executing on our multiple projects, most notably the completion of upgrades to the Voyageur Spirit FPSO," commented Peter Evensen, Teekay Corporation's Chief Executive Officer. "The Voyageur Spirit arrived at the Huntington Field in early October, and the sale of this FPSO unit to Teekay Offshore is expected to be completed shortly after production start-up which is expected to occur in mid-December 2012. Factoring the approximately $130 million of capital upgrade payments funded by Teekay, the assumption of Sevan's $230 million debt facility secured by the Voyageur Spirit and payments to Sevan bondholders, Teekay Offshore's $540 million purchase price will be approximately $90 million above Teekay Parent's acquisition cost."

Mr. Evensen continued, "The Cidade de Itajai FPSO conversion project experienced a two-month delay to its delivery from the shipyard which has no material financial impact to Teekay. The FPSO unit is expected to leave the shipyard in mid-November destined for offshore Brazil where it will begin preparations for its nine-year contract with Petrobras during the first quarter of 2013. In October, the Petrojarl Knarr FPSO hull was completed and launched and installation of the topside processing equipment and turret is underway. The Petrojarl Knarr FPSO is expected to achieve first oil on its North Sea field in the first half of 2014. Construction on Teekay Offshore's newbuilding shuttle tankers is also proceeding on schedule with steel cutting initiated on three of the four vessels, which are expected to deliver in mid- to late-2013. Finally, repairs on thePetrojarl Banff FPSO are underway, with all long lead-time items ordered and the unit on track for re-installation on the field in the fourth quarter of 2013."

"Operationally, we have made progress on our cost-savings initiatives including, the contractual redelivery of in-chartered conventional tankers and the establishment of our new ship management subsidiary, Teekay Marine Ltd.," Mr. Evensen continued. "All employees and systems have now been transferred into our subsidiary, Teekay Marine Ltd. and the transfer of technical management for Teekay's conventional tanker fleet to Teekay Marine was completed in September. Also in September, we commenced a reorganization of our onshore shuttle tanker operations, which is expected to provide additional cost savings upon completion in mid-2013."

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 September 30, 2012
(unaudited)
(in thousands of U.S. dollars) Teekay Offshore Partners LP Teekay LNG Partners LP Teekay Tankers Ltd. Teekay Parent Consolidation Adjustments Teekay Corporation Consolidated
Net revenues 203,731 97,863 43,912 126,354 (37,997 ) 433,863
Vessel operating expense 70,767 21,992 23,529 66,293 - 182,581
Time-charter hire expense 14,910 - 804 49,014 (37,342 ) 27,386
Depreciation and amortization 47,768 24,570 17,896 22,522 - 112,756
CFVO - Consolidated(1)(2)(3) 95,528 71,178 16,252 (29,170 ) - 153,788
CFVO - Equity Investments(4) - 40,550 - (2,750 ) - 37,800
CFVO - Total 95,528 111,728 16,252 (31,920 ) - 191,588
Three Months Ended September 30, 2011
(unaudited)
(in thousands of U.S. dollars) Teekay Offshore Partners LP Teekay LNG Partners LP Teekay Tankers Ltd. Teekay Parent Consolidation Adjustments Teekay Corporation Consolidated
Net revenues 208,804 96,949 28,966 152,625 (58,833 ) 428,511
Vessel operating expense 71,641 22,366 10,908 67,457 - 172,372
Time-charter hire expense 18,620 - 1,610 86,036 (58,833 ) 47,433
Depreciation and amortization 46,905 23,032 10,797 27,012 - 107,746
CFVO - Consolidated(1)(2)(3) 105,227 70,402 14,521 (32,736 ) - 157,414
CFVO - Equity Investments(4) - 15,202 - 348 - 15,550
CFVO - Total 105,227 85,604 14,521 (32,388 ) - 172,964

  1. 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 B and Appendix C of this release and see the Company's website at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
  2. 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.
  3. In addition to CFVO from directly owned vessels, Teekay Parent also receives cash dividends and distributions from its daughter public companies. For the three months ended September 30, 2012 and 2011, Teekay Parent received daughter company dividends and distributions totaling $38.0 million and $34.9 million, respectively. The dividends and distributions received by Teekay Parent include, among others, those made with respect to its general partner interests in Teekay Offshore and Teekay LNG. Please refer to Appendix D to this release for further details.
  4. CFVO - Equity Investments represents the Company's proportionate share of CFVO from its equity-accounted vessels and other investments. Please refer to Appendix B of this release and see the Company's website at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.

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 39 shuttle tankers (including four chartered-in vessels and four newbuildings under construction), three floating, production, storage and offloading (FPSO) units, five floating storage and offtake (FSO) units and nine conventional oil tankers, in which its interests range from 50 to 100 percent. Teekay Offshore also has the right to participate in certain other FPSO and vessel opportunities. Teekay Parent currently owns a 29.4 percent interest in Teekay Offshore (including the 2 percent sole general partner interest).

For the third quarter of 2012, Teekay Offshore's quarterly distribution was $0.5125 per common unit. The cash distribution to be received by Teekay Parent based on its common unit ownership and general partnership interest in Teekay Offshore totals $14.6 million for the third quarter of 2012, as detailed in Appendix D to this release.

Article Tags Teekay Corporation Bermuda Worldwide Finance Operations Update Production Update LNG North Sea

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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