Table of Contents
SECURITIES AND EXCHANGE COMMISSION
the Securities Exchange Act of 1934
69 Pitts Bay Road
Hamilton, HM 08 Bermuda
(Address of principal executive office)
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PART I: FINANCIAL INFORMATION | ||||
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4 | ||||
5 | ||||
6 | ||||
7 | ||||
21 | ||||
37 | ||||
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
REVENUES | 532,473 | 810,832 | 1,149,024 | 1,551,247 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Voyage expenses | 62,925 | 189,515 | 153,594 | 358,976 | ||||||||||||
Vessel operating expenses(note 16) | 140,529 | 160,944 | 289,857 | 309,379 | ||||||||||||
Time-charter hire expense | 116,451 | 142,702 | 253,279 | 287,622 | ||||||||||||
Depreciation and amortization | 108,192 | 106,700 | 214,745 | 204,407 | ||||||||||||
General and administrative(note 16) | 52,695 | 71,298 | 103,835 | 140,363 | ||||||||||||
Gain on sale of vessels and equipment — net of write-downs (note 13) | (11,083 | ) | (2,925 | ) | (11,201 | ) | (3,421 | ) | ||||||||
Restructuring charge (note 14a) | 5,003 | 4,617 | 10,561 | 6,117 | ||||||||||||
Total operating expenses | 474,712 | 672,851 | 1,014,670 | 1,303,443 | ||||||||||||
Income from vessel operations | 57,761 | 137,981 | 134,354 | 247,804 | ||||||||||||
OTHER ITEMS | ||||||||||||||||
Interest expense | (37,280 | ) | (63,253 | ) | (81,470 | ) | (151,959 | ) | ||||||||
Interest income | 5,023 | 18,832 | 11,701 | 52,722 | ||||||||||||
Realized and unrealized gain (loss) on non-designated derivative instruments(note 16) | 157,485 | 116,263 | 204,730 | (34,948 | ) | |||||||||||
Equity income (loss) from joint ventures(note 11b) | 27,380 | (2,063 | ) | 38,802 | (5,672 | ) | ||||||||||
Foreign exchange loss (notes 8 and 16) | (25,165 | ) | (3,014 | ) | (13,853 | ) | (36,595 | ) | ||||||||
Other income (note 14b) | 3,823 | 6,294 | 5,405 | 10,482 | ||||||||||||
Net income before income tax recovery (expense) | 189,027 | 211,040 | 299,669 | 81,834 | ||||||||||||
Income tax recovery (expense)(note 18) | 4,598 | 11,201 | (1,270 | ) | 8,718 | |||||||||||
Net income | 193,625 | 222,241 | 298,399 | 90,552 | ||||||||||||
Less: Net income attributable to non-controlling interests | (34,266 | ) | (38,822 | ) | (57,535 | ) | (12,262 | ) | ||||||||
Net income attributable to stockholders of Teekay Corporation | 159,359 | 183,419 | 240,864 | 78,290 | ||||||||||||
Per common share of Teekay Corporation(note 17) | ||||||||||||||||
• Basic earnings | 2.20 | 2.53 | 3.32 | 1.08 | ||||||||||||
• Diluted earnings | 2.19 | 2.50 | 3.30 | 1.07 | ||||||||||||
• Cash dividends declared | 0.31625 | 0.27500 | 0.63250 | 0.55000 | ||||||||||||
Weighted average number of common shares outstanding(note 17) | ||||||||||||||||
• Basic | 72,535,899 | 72,377,684 | 72,526,101 | 72,511,041 | ||||||||||||
• Diluted | 72,798,023 | 73,279,213 | 72,887,474 | 73,357,190 |
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(in thousands of U.S. dollars)
As at | As at | |||||||
June 30, 2009 | December 31, 2008 | |||||||
$ | $ | |||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents(note 8) | 472,671 | 814,165 | ||||||
Restricted cash(note 9) | 35,440 | 35,841 | ||||||
Accounts receivable | 189,388 | 300,462 | ||||||
Vessels held for sale (note 13) | 34,970 | 69,649 | ||||||
Net investment in direct financing leases(note 4) | 33,620 | 22,941 | ||||||
Prepaid expenses | 99,872 | 117,651 | ||||||
Other assets | 30,077 | 33,794 | ||||||
Total current assets | 896,038 | 1,394,503 | ||||||
Restricted cash — long-term(note 9) | 610,523 | 614,715 | ||||||
Vessels and equipment(note 8) | ||||||||
At cost, less accumulated depreciation of $1,516,538 (2008 — $1,351,786) | 5,736,758 | 5,784,597 | ||||||
Vessels under capital leases, at cost, less accumulated amortization of $122,966 (2008 — $106,975)(note 9) | 912,978 | 928,795 | ||||||
Advances on newbuilding contracts(note 11a) | 231,220 | 553,702 | ||||||
Total vessels and equipment | 6,880,956 | 7,267,094 | ||||||
Net investment in direct financing leases — non-current(note 4) | 440,701 | 56,567 | ||||||
Loans to joint ventures | 22,588 | 28,019 | ||||||
Derivative instruments(note 16) | 37,279 | 154,248 | ||||||
Investment in joint ventures(note 11b) | 126,315 | 103,956 | ||||||
Other non-current assets | 136,488 | 127,940 | ||||||
Intangible assets — net(note 6) | 246,640 | 264,768 | ||||||
Goodwill(note 6) | 203,191 | 203,191 | ||||||
Total assets | 9,600,719 | 10,215,001 | ||||||
LIABILITIES AND EQUITY | ||||||||
Current | ||||||||
Accounts payable | 53,297 | 59,973 | ||||||
Accrued liabilities | 240,859 | 315,987 | ||||||
Current portion of derivative liabilities(note 16) | 151,810 | 166,725 | ||||||
Current portion of long-term debt(note 8) | 204,549 | 245,043 | ||||||
Current obligation under capital leases(note 9) | 149,285 | 147,616 | ||||||
Current portion of in-process revenue contracts(note 6) | 66,593 | 74,777 | ||||||
Loan from joint venture partners | 21,274 | 21,019 | ||||||
Total current liabilities | 887,667 | 1,031,140 | ||||||
Long-term debt(note 8) | 4,274,903 | 4,707,749 | ||||||
Long-term obligation under capital leases(note 9) | 668,587 | 669,725 | ||||||
Derivative instruments(note 16) | 265,858 | 676,540 | ||||||
Deferred income taxes (note 18) | 6,244 | 6,182 | ||||||
Asset retirement obligation | 22,238 | 18,977 | ||||||
In-process revenue contracts(note 6) | 216,769 | 243,088 | ||||||
Other long-term liabilities | 225,100 | 209,195 | ||||||
Total liabilities | 6,567,366 | 7,562,596 | ||||||
Commitments and contingencies(notes 9, 11 and 16) | ||||||||
Equity | ||||||||
Common stock and additional paid-in capital(note 10) | 649,138 | 642,911 | ||||||
Retained earnings | 1,702,019 | 1,507,617 | ||||||
Non-controlling interest | 727,391 | 583,938 | ||||||
Accumulated other comprehensive loss(note 15) | (45,195 | ) | (82,061 | ) | ||||
Total equity | 3,033,353 | 2,652,405 | ||||||
Total liabilities and equity | 9,600,719 | 10,215,001 | ||||||
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Six Months Ended June 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Cash and cash equivalents provided by (used for) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | 298,399 | 90,552 | ||||||
Non-cash items: | ||||||||
Depreciation and amortization | 214,745 | 204,407 | ||||||
Amortization of in-process revenue contracts | (37,769 | ) | (34,870 | ) | ||||
Gain on sale of marketable securities | — | (4,576 | ) | |||||
Gain on sale of vessels and equipment | (27,634 | ) | (3,421 | ) | ||||
Write-down of intangible assets | 1,076 | — | ||||||
Write-down of vessels and equipment | 16,433 | — | ||||||
Loss on repurchase of bonds | — | 1,310 | ||||||
Equity (income) loss (net of dividends received) | (35,860 | ) | 5,672 | |||||
Income tax expense (recovery) | 1,270 | (8,718 | ) | |||||
Employee stock option compensation | 6,059 | 6,183 | ||||||
Foreign exchange loss and other | 7,920 | 16,736 | ||||||
Unrealized (gains) losses on derivative instruments | (271,471 | ) | 29,472 | |||||
Change in non-cash working capital items related to operating activities (note 7) | 82,343 | (75,554 | ) | |||||
Expenditures for drydocking | (26,243 | ) | (28,227 | ) | ||||
Net operating cash flow | 229,268 | 198,966 | ||||||
FINANCING ACTIVITIES | ||||||||
Proceeds from issuance of long-term debt | (297,224 | ) | 1,284,496 | |||||
Debt issuance costs | (664 | ) | (5,108 | ) | ||||
Scheduled repayments of long-term debt | (137,777 | ) | (198,320 | ) | ||||
Prepayments of long-term debt | (632,910 | ) | (639,321 | ) | ||||
Repayments of capital lease obligations | (4,617 | ) | (4,495 | ) | ||||
Proceeds from loans from joint venture partner | — | 1,041 | ||||||
Repayment of loans from joint venture partner | (4,973 | ) | — | |||||
Decrease (increase) in restricted cash | 5,805 | (11,503 | ) | |||||
Net proceeds from issuance of Teekay LNG Partners L.P. units (note 5) | 67,095 | 148,345 | ||||||
Net proceeds from issuance of Teekay Offshore Partners L.P. units (note 5) | — | 134,265 | ||||||
Net proceeds from issuance of Teekay Tankers Ltd. shares (note 5) | 65,556 | — | ||||||
Issuance of Common Stock upon exercise of stock options | 160 | 4,009 | ||||||
Repurchase of Common Stock | — | (20,512 | ) | |||||
Distribution from subsidiaries to non-controlling interests | (53,093 | ) | (34,546 | ) | ||||
Cash dividends paid | (45,861 | ) | (40,028 | ) | ||||
Other financing activities | — | (2,715 | ) | |||||
Net financing cash flow | (444,055 | ) | 615,608 | |||||
INVESTING ACTIVITIES | ||||||||
Expenditures for vessels and equipment | (344,888 | ) | (410,495 | ) | ||||
Proceeds from sale of vessels and equipment | 198,837 | 79,224 | ||||||
Purchases of marketable securities | — | (542 | ) | |||||
Proceeds from sale of marketable securities | — | 11,058 | ||||||
Acquisition of additional 30.1% of Teekay Petrojarl ASA(note 3) | — | (257,142 | ) | |||||
Investment in joint ventures | (7,522 | ) | — | |||||
Advances to joint ventures | (1,420 | ) | (211,491 | ) | ||||
Investment in direct financing lease assets | — | (30 | ) | |||||
Direct financing lease payments received | 3,251 | 11,298 | ||||||
Other investing activities | 25,035 | 19,806 | ||||||
Net investing cash flow | (126,707 | ) | (758,314 | ) | ||||
(Decrease) increase in cash and cash equivalents | (341,494 | ) | 56,260 | |||||
Cash and cash equivalents, beginning of the period | 814,165 | 442,673 | ||||||
Cash and cash equivalents, end of the period | 472,671 | 498,933 | ||||||
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Net income | 193,625 | 222,241 | 298,399 | 90,552 | ||||||||||||
Other comprehensive income: | ||||||||||||||||
Unrealized gain (loss) on marketable securities | 3,531 | 2,068 | 1,090 | (3,766 | ) | |||||||||||
Reclassification adjustment for gain on sale of marketable securities | — | (1,868 | ) | — | (4,575 | ) | ||||||||||
Pension adjustments | 437 | — | 874 | 1,058 | ||||||||||||
Unrealized change on qualifying cash flow hedging instruments | 21,046 | 446 | 20,929 | 6,577 | ||||||||||||
Realized change on qualifying cash flow hedging instruments | 5,943 | (1,039 | ) | 18,686 | (4,061 | ) | ||||||||||
Other comprehensive income (loss) | 30,957 | (393 | ) | 41,579 | (4,767 | ) | ||||||||||
Comprehensive income | 224,582 | 221,848 | 339,978 | 85,785 | ||||||||||||
Less: Comprehensive income attributable to non-controlling interests | (37,020 | ) | (39,382 | ) | (62,246 | ) | (13,081 | ) | ||||||||
Comprehensive income attributable to stockholders of Teekay Corporation | 187,562 | 182,466 | 277,732 | 72,704 | ||||||||||||
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Three Months Ended | Six Months Ended | |||||||
June 30, 2009 | June 30, 2009 | |||||||
$ | $ | |||||||
Pro forma net income attributable to the stockholders of Teekay Corporation | 164,652 | 247,045 | ||||||
Pro forma earnings per share: | ||||||||
Basic | 2.27 | 3.41 | ||||||
Diluted | 2.26 | 3.39 |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Page 8 of 41
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Shuttle | ||||||||||||||||||||||||
Tanker and | Liquefied | Fixed-Rate | Spot | |||||||||||||||||||||
FSO | FPSO | Gas | Tanker | Tanker | ||||||||||||||||||||
Three Months ended June 30, 2009 | Segment | Segment | Segment | Segment | Segment | Total | ||||||||||||||||||
Revenues | 138,324 | 97,572 | 57,265 | 76,011 | 163,301 | 532,473 | ||||||||||||||||||
Voyage expenses | 16,167 | — | (34 | ) | 1,758 | 45,034 | 62,925 | |||||||||||||||||
Vessel operating expenses | 41,961 | 47,021 | 12,049 | 17,103 | 22,395 | 140,529 | ||||||||||||||||||
Time charter hire expense | 25,695 | — | — | 11,913 | 78,843 | 116,451 | ||||||||||||||||||
Depreciation and amortization | 28,738 | 25,745 | 15,471 | 14,009 | 24,229 | 108,192 | ||||||||||||||||||
General and administrative(1) | 13,848 | 7,553 | 5,440 | 6,986 | 18,868 | 52,695 | ||||||||||||||||||
Loss (gain) on sale of vessels and equipment, net of write-downs | 941 | — | — | 3,280 | (15,304 | ) | (11,083 | ) | ||||||||||||||||
Restructuring charge | 2,536 | — | 1,030 | 354 | 1,083 | 5,003 | ||||||||||||||||||
Income (loss) from vessel operations | 8,438 | 17,253 | 23,309 | 20,608 | (11,847 | ) | 57,761 | |||||||||||||||||
Shuttle | ||||||||||||||||||||||||
Tanker and | Liquefied | Fixed-Rate | Spot | |||||||||||||||||||||
FSO | FPSO | Gas | Tanker | Tanker | ||||||||||||||||||||
Three Months ended June 30, 2008 | Segment | Segment | Segment | Segment | Segment | Total | ||||||||||||||||||
Revenues | 183,176 | 90,785 | 53,496 | 66,218 | 417,157 | 810,832 | ||||||||||||||||||
Voyage expenses | 46,024 | — | 452 | 948 | 142,091 | 189,515 | ||||||||||||||||||
Vessel operating expenses | 45,417 | 57,418 | 13,125 | 16,387 | 28,597 | 160,944 | ||||||||||||||||||
Time charter hire expense | 32,242 | — | — | 11,445 | 99,015 | 142,702 | ||||||||||||||||||
Depreciation and amortization | 31,207 | 22,565 | 14,209 | 11,289 | 27,430 | 106,700 | ||||||||||||||||||
General and administrative(1) | 15,739 | 11,509 | 6,070 | 7,263 | 30,717 | 71,298 | ||||||||||||||||||
(Gain) loss on sale of vessels and equipment, net of write-downs | (3,150 | ) | — | — | — | 225 | (2,925 | ) | ||||||||||||||||
Restructuring charge | 3,327 | — | 221 | 58 | 1,011 | 4,617 | ||||||||||||||||||
Income (loss) from vessel operations | 12,370 | (707 | ) | 19,419 | 18,828 | 88,071 | 137,981 | |||||||||||||||||
Shuttle | ||||||||||||||||||||||||
Tanker and | Liquefied | Fixed-Rate | Spot | |||||||||||||||||||||
FSO | FPSO | Gas | Tanker | Tanker | ||||||||||||||||||||
Six Months ended June 30, 2009 | Segment | Segment | Segment | Segment | Segment | Total | ||||||||||||||||||
Revenues | 288,189 | 189,498 | 114,848 | 142,603 | 413,886 | 1,149,024 | ||||||||||||||||||
Voyage expenses | 34,575 | — | 258 | 3,062 | 115,699 | 153,594 | ||||||||||||||||||
Vessel operating expenses | 87,745 | 91,450 | 23,836 | 34,912 | 51,914 | 289,857 | ||||||||||||||||||
Time charter hire expense | 57,873 | — | — | 22,903 | 172,503 | 253,279 | ||||||||||||||||||
Depreciation and amortization | 57,991 | 51,525 | 30,068 | 26,300 | 48,862 | 214,746 | ||||||||||||||||||
General and administrative(1) | 26,977 | 17,339 | 10,598 | 12,667 | 36,254 | 103,835 | ||||||||||||||||||
Loss (gain) on sale of vessels and equipment, net of write-downs | 941 | — | — | 3,280 | (15,422 | ) | (11,201 | ) | ||||||||||||||||
Restructuring charge | 5,298 | — | 3,212 | 505 | 1,546 | 10,561 | ||||||||||||||||||
Income from vessel operations | 16,789 | 29,184 | 46,876 | 38,974 | 2,530 | 134,353 | ||||||||||||||||||
Shuttle | ||||||||||||||||||||||||
Tanker and | Liquefied | Fixed-Rate | Spot | |||||||||||||||||||||
FSO | FPSO | Gas | Tanker | Tanker | ||||||||||||||||||||
Six Months ended June 30, 2008 | Segment | Segment | Segment | Segment | Segment | Total | ||||||||||||||||||
Revenues | 349,435 | 183,314 | 109,628 | 127,033 | 781,837 | 1,551,247 | ||||||||||||||||||
Voyage expenses | 84,925 | — | 602 | 1,628 | 271,821 | 358,976 | ||||||||||||||||||
Vessel operating expenses | 84,340 | 105,455 | 24,748 | 32,757 | 62,079 | 309,379 | ||||||||||||||||||
Time charter hire expense | 67,280 | — | — | 23,165 | 197,177 | 287,622 | ||||||||||||||||||
Depreciation and amortization | 59,278 | 40,568 | 28,404 | 20,962 | 55,195 | 204,407 | ||||||||||||||||||
General and administrative(1) | 31,735 | 24,036 | 11,555 | 12,553 | 60,484 | 140,363 | ||||||||||||||||||
Gain on sale of vessels and equipment, net of write- downs | (3,150 | ) | — | — | — | (271 | ) | (3,421 | ) | |||||||||||||||
Restructuring charge | 3,327 | — | 221 | 1,558 | 1,011 | 6,117 | ||||||||||||||||||
Income from vessel operations | 21,700 | 13,255 | 44,098 | 34,410 | 134,341 | 247,804 | ||||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
June 30, 2009 | December 31, 2008 | |||||||
$ | $ | |||||||
Shuttle tanker and FSO segment | 1,683,936 | 1,722,432 | ||||||
FPSO segment | 1,285,098 | 1,331,325 | ||||||
Liquefied gas segment | 2,676,786 | 2,919,194 | ||||||
Fixed-rate tanker segment | 1,027,891 | 951,592 | ||||||
Spot tanker segment | 2,048,691 | 1,935,537 | ||||||
Cash and portion of restricted cash | 472,671 | 821,286 | ||||||
Accounts receivable and other assets | 405,646 | 533,635 | ||||||
Consolidated total assets | 9,600,719 | 10,215,001 | ||||||
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Total minimum lease payments to be received | 838,726 | 94,409 | ||||||
Estimated residual value of leased property (unguaranteed) | 188,233 | — | ||||||
Initial direct costs and other | 1,324 | 674 | ||||||
Less: Unearned income | (553,962 | ) | (15,575 | ) | ||||
Net investments in direct financing leases | 474,321 | 79,508 | ||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Shuttle | Liquefied | Fixed-Rate | Spot | |||||||||||||||||||||
Tanker and FSO | FPSO | Gas | Tanker | Tanker | ||||||||||||||||||||
Segment | Segment | Segment | Segment | Segment | Total | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance as of December 31, 2008 and June 30, 2009 | 130,908 | — | 35,631 | 10,811 | 25,841 | 203,191 | ||||||||||||||||||
Weighted-Average | Gross Carrying | Accumulated | Net Carrying | |||||||||||||
Amortization Period | Amount | Amortization | Amount | |||||||||||||
(Years) | $ | $ | $ | |||||||||||||
Contracts of affreightment | 10.2 | 124,250 | (83,487 | ) | 40,763 | |||||||||||
Time-charter contracts | 10.4 | 232,602 | (72,350 | ) | 160,252 | |||||||||||
Other intangible assets | 1.0 | 58,950 | (13,325 | ) | 45,625 | |||||||||||
12.1 | 415,802 | (169,162 | ) | 246,640 | ||||||||||||
Weighted-Average | Gross Carrying | Accumulated | Net Carrying | |||||||||||||
Amortization Period | Amount | Amortization | Amount | |||||||||||||
(Years) | $ | $ | $ | |||||||||||||
Contracts of affreightment | 10.2 | 124,251 | (78,961 | ) | 45,290 | |||||||||||
Time-charter contracts | 10.4 | 233,678 | (60,875 | ) | 172,803 | |||||||||||
Other intangible assets | 1.0 | 58,950 | (12,275 | ) | 46,675 | |||||||||||
12.1 | 416,879 | (152,111 | ) | 264,768 | ||||||||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Six Months Ended June 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Accounts receivable | 111,074 | (85,501 | ) | |||||
Prepaid expenses and other assets | 25,080 | (6,047 | ) | |||||
Accounts payable | (6,676 | ) | 4,391 | |||||
Accrued and other liabilities | (47,135 | ) | 11,603 | |||||
82,343 | (75,554 | ) | ||||||
June 30, 2009 | December 31, 2008 | |||||||
$ | $ | |||||||
Revolving Credit Facilities | 2,031,537 | 2,656,658 | ||||||
Senior Notes (8.875%) due July 15, 2011 | 194,524 | 194,642 | ||||||
USD-denominated Term Loans due through 2021 | 1,827,205 | 1,670,005 | ||||||
Euro-denominated Term Loans due through 2023 | 410,139 | 414,144 | ||||||
USD-denominated Unsecured Demand Loan due to Joint Venture Partners | 16,047 | 17,343 | ||||||
4,479,452 | 4,952,792 | |||||||
Less current portion | 204,549 | 245,043 | ||||||
4,274,903 | 4,707,749 | |||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Year | Commitment | |||
Remainder of 2009 | $122.4 million | |||
2010 | $8.4 million | |||
2011 | $84.0 million |
Year | Commitment | |||
Remainder of 2009 | $12.0 million | |||
2010 | $24.0 million | |||
2011 | $24.0 million | |||
2012 | $24.0 million | |||
2013 | $24.0 million | |||
Thereafter | $953.1 million |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Year | Commitment | |||
Remainder of 2009 | 25.7 million Euros ($36.0 million) | |||
2010 | 26.9 million Euros ($37.8 million) | |||
2011 | 64.8 million Euros ($90.9 million) |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Level 1. | Observable inputs such as quoted prices in active markets; | |
Level 2. | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3. | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
June 30, 2009 | ||||||||||||
Carrying | Fair | |||||||||||
Fair Value | Amount | Value | ||||||||||
Hierarchy | Asset (Liability) | Asset (Liability) | ||||||||||
Level | $ | $ | ||||||||||
Cash and cash equivalents and restricted cash | Level 1 | 1,118,634 | 1,118,634 | |||||||||
Vessels held for sale | Level 2 | 34,970 | 34,970 | |||||||||
Loans to joint ventures | Level 2 | 22,588 | 22,588 | |||||||||
Loan from joint venture partners | Level 2 | (21,274 | ) | (21,274 | ) | |||||||
Long-term debt | Level 1 and 2 | (4,479,452 | ) | (4,076,282 | ) | |||||||
Derivative instruments(1) | ||||||||||||
Interest rate swap agreements(2) | Level 2 | (392,262 | ) | (392,262 | ) | |||||||
Interest rate swap agreements(2) | Level 2 | 54,958 | 54,958 | |||||||||
Interest rate swaption | Level 2 | (8,242 | ) | (8,242 | ) | |||||||
Foreign currency contracts | Level 2 | (26,739 | ) | (26,739 | ) | |||||||
Bunker fuel swap contracts | Level 2 | (354 | ) | (354 | ) | |||||||
Forward freight agreements | Level 2 | 1,531 | 1,531 | |||||||||
Foinaven embedded derivative | Level 2 | (11,771 | ) | (11,771 | ) |
(1) | The Company transacts all of its derivative instruments through investment-grade rated financial institutions at the time of the transaction and requires no collateral from these institutions. | |
(2) | The fair value of the Company’s interest rate swap agreements includes $19.2 million of accrued interest which is recorded in accrued liabilities on the balance sheet. |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Gain on sale of marketable securities | — | 1,868 | — | 4,576 | ||||||||||||
Loss on bond repurchase | — | (712 | ) | — | (1,310 | ) | ||||||||||
Volatile organic compound emission plant lease income | 1,708 | 2,395 | 3,602 | 4,965 | ||||||||||||
Miscellaneous income | 2,115 | 2,743 | 1,803 | 2,251 | ||||||||||||
Other income | 3,823 | 6,294 | 5,405 | 10,482 | ||||||||||||
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Unrealized loss on derivative instruments | (23,821 | ) | (58,723 | ) | ||||
Pension adjustments | (22,464 | ) | (23,338 | ) | ||||
Unrealized gain on marketable securities | 1,090 | — | ||||||
(45,195 | ) | (82,061 | ) | |||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Gains (losses) recognized in: | ||||||||||||||||
Vessel operating expenses | 653 | 1,567 | (10,291 | ) | 1,777 | |||||||||||
General and administrative | (1,598 | ) | 918 | (4,226 | ) | 1,691 | ||||||||||
Foreign exchange (loss) gain | — | (444 | ) | (3 | ) | 9 | ||||||||||
Accumulated other comprehensive loss | 21,050 | 447 | 21,991 | 6,577 | ||||||||||||
Gains (losses) reclassified from: | ||||||||||||||||
Accumulated other comprehensive loss | 5,942 | (993 | ) | 18,686 | (4,020 | ) |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Fair Value / | ||||||||||||||||||||||||
Contract Amount | Carrying Amount | |||||||||||||||||||||||
in Foreign | of Asset / (Liability) | |||||||||||||||||||||||
Currency | Average Forward | (in millions of U.S. | Expected Maturity | |||||||||||||||||||||
(millions) | Rate(1) | Dollars) | 2009 | 2010 | 2011 | |||||||||||||||||||
(in millions of U.S. Dollars) | ||||||||||||||||||||||||
Norwegian Kroner | 1,440.7 | 6.03 | $ | (15.4) | $ | 99.5 | $ | 139.5 | — | |||||||||||||||
Euro | 50.4 | 0.68 | (3.2) | 34.9 | 36.8 | 2.3 | ||||||||||||||||||
Canadian Dollar | 71.8 | 1.08 | (4.6) | 28.5 | 37.9 | — | ||||||||||||||||||
British Pound | 36.7 | 0.58 | (3.4) | 32.7 | 31.1 | — | ||||||||||||||||||
Australian Dollar | 1.4 | 1.13 | (0.1) | 1.3 | — | — | ||||||||||||||||||
$ | (26.7) | $ | 196.9 | $ | 245.3 | $ | 2.3 | |||||||||||||||||
(1) | Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy. |
Fair Value / | Weighted- | Fixed | ||||||||||||||||||
Interest | Principal | Carrying Amount | Average | Interest | ||||||||||||||||
Rate | Amount | of Asset (Liability) | Remaining Term | Rate | ||||||||||||||||
Index | $ | $ | (Years) | (%)(1) | ||||||||||||||||
LIBOR-Based Debt: | ||||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 465,554 | (46,725 | ) | 27.6 | 4.9 | ||||||||||||||
U.S. Dollar-denominated interest rate swaps | LIBOR | 2,967,256 | (271,427 | ) | 8.2 | 5.1 | ||||||||||||||
U.S. Dollar-denominated interest rate swaps(3) | LIBOR | 658,536 | (70,654 | ) | 18.0 | 5.4 | ||||||||||||||
LIBOR-Based Restricted Cash Deposit: | ||||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 475,352 | 54,958 | 27.6 | 4.8 | |||||||||||||||
EURIBOR-Based Debt: | ||||||||||||||||||||
Euro-denominated interest rate swaps(4) (5) | EURIBOR | 410,138 | (3,456 | ) | 15.0 | 3.8 |
(1) | Excludes the margins the Company pays on its variable-rate debt, which at of June 30, 2009 ranged from 0.3% to 1.0%. |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
(2) | Principal amount reduces quarterly. | |
(3) | Inception dates of swaps are 2009 ($158.5 million), 2010 ($300.0 million) and 2011 ($200.0 million). | |
(4) | Principal amount reduces monthly to 70.1 million Euros ($98.4 million) by the maturity dates of the swap agreements. | |
(5) | Principal amount is the U.S. Dollar equivalent of 292.3 million Euros. |
Interest | Principal | |||||||
Rate | Amount(1) | Remaining Term | Fixed Interest Rate | |||||
Index | $ | Start Date | (Years) | (%) | ||||
LIBOR | 150,000 | August 31, 2009 | 12.0 | 4.3 |
(1) | Principal amount reduces by $5.0 million semi-annually. See Note 12 of the notes to the consolidated financial statements for fair value of the interest rate swaption. |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Net income attributable to stockholders’ of Teekay Corporation | 159,359 | 183,419 | 240,864 | 78,290 | ||||||||||||
Weighted average number of common shares | 72,535,899 | 72,377,684 | 72,526,101 | 72,511,041 | ||||||||||||
Dilutive effect of employee stock options and restricted stock awards | 262,124 | 901,529 | 361,373 | 846,149 | ||||||||||||
Common stock and common stock equivalents | 72,798,023 | 73,279,213 | 72,887,474 | 73,357,190 | ||||||||||||
Earnings per common share: | ||||||||||||||||
- Basic | 2.20 | 2.53 | 3.32 | 1.08 | ||||||||||||
- Diluted | 2.19 | 2.50 | 3.30 | 1.07 |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Current | 450 | (1,120 | ) | (397 | ) | (2,473 | ) | |||||||||
Deferred | 4,148 | 12,321 | (873 | ) | 11,191 | |||||||||||
Income tax recovery (expense) | 4,598 | 11,201 | (1,270 | ) | 8,718 | |||||||||||
a) | In June 2009, the Company announced that its Board of Directors had approved the Company’s quarterly cash dividend of $0.31625 per share. This dividend was paid on July 24, 2009 to shareholders of record as at July 10, 2009. |
b) | During July 2009, the Company entered into an agreement to sell a 1992-built Aframax tanker. The vessel was part of the Company’s spot tanker segment and is presented on the June 30, 2009 balance sheet as vessel held for sale. The vessel was written-down by $7.1 million to its fair market value on June 30, 2009 and the Company did not realize a gain or a loss as a result of the sale. The vessel sale is expected to be completed during the fourth quarter of 2009. |
c) | On August 4, 2009, Teekay Offshore Partners L.P. (ofTeekay Offshore) completed a public offering of 7.475 million common units (including 975,000 units issued upon the exercise in full of the underwriter’s overallotment option) at a price of $14.32 per unit, for total net proceeds of $104.3 million (including the general partner’s $2.2 million proportionate capital contribution). As a result, the Company’s ownership of Teekay Offshore was reduced from 50.0 percent to 40.5 percent (including the Company’s 2 percent general partner interest). The total net proceeds from the offering were used to reduce amounts outstanding under one Teekay Offshore’s revolving credit facilities. |
d) | In early September 2009, the Company purchased a 2007-built, 40,000 deadweight tonne product tanker for approximately $35 million. The vessel renamed theAlexander Spirit, commenced a 10-year, fixed-rate time charter to Caltex Australia Petroleum Pty Ltd. on September 3, 2009. |
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June 30, 2009
PART I — FINANCIAL INFORMATION
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
calendar-ship-days and percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Revenues | 138,324 | 183,176 | (24.5 | ) | 288,189 | 349,435 | (17.5 | ) | ||||||||||||||||
Voyage expenses | 16,167 | 46,024 | (64.9 | ) | 34,575 | 84,925 | (59.3 | ) | ||||||||||||||||
Net revenues | 122,157 | 137,152 | (10.9 | ) | 253,614 | 264,510 | (4.1 | ) | ||||||||||||||||
Vessel operating expenses | 41,961 | 45,417 | (7.6 | ) | 87,745 | 84,340 | 4.0 | |||||||||||||||||
Time-charter hire expense | 25,695 | 32,242 | (20.3 | ) | 57,873 | 67,280 | (14.0 | ) | ||||||||||||||||
Depreciation and amortization | 28,738 | 31,207 | (7.9 | ) | 57,991 | 59,278 | (2.2 | ) | ||||||||||||||||
General and administrative(1) | 13,848 | 15,739 | (12.0 | ) | 26,977 | 31,735 | (15.0 | ) | ||||||||||||||||
(Gain) loss on sale of vessels and equipment, net of write- downs | 941 | (3,150 | ) | (129.9 | ) | 941 | (3,150 | ) | (129.9 | ) | ||||||||||||||
Restructuring charge | 2,536 | 3,327 | (23.8 | ) | 5,298 | 3,327 | 59.2 | |||||||||||||||||
Income from vessel operations | 8,438 | 12,370 | (31.8 | ) | 16,789 | 21,700 | (22.6 | ) | ||||||||||||||||
Calendar-Ship-Days Owned Vessels | 2,914 | 2,913 | — | 5,974 | 5,740 | 4.1 | ||||||||||||||||||
Chartered-in Vessels | 593 | 897 | (33.9 | ) | 1,553 | 1,899 | (18.2 | ) | ||||||||||||||||
Total | 3,507 | 3,810 | (8.0 | ) | 7,527 | 7,639 | (1.5 | ) | ||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the shuttle tanker and FSO segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | decreases of $19.8 million and $23.6 million, respectively, for the three and six months ended June 30, 2009 due to less revenue days for shuttle tankers servicing contracts of affreightment and trading in the conventional spot market and lower spot rates achieved in the conventional spot market, compared to the same periods last year; and |
• | decreases in net revenues from our FSO units of $2.2 million and $4.0 million, respectively, for the three and six months ended June 30, 2009, primarily due to the strengthening of the U.S. Dollar against the Norwegian Kroner and Australian Dollar; |
• | increases of $3.0 million and $6.3 million, respectively, for the three and six months ended June 30, 2009, due to a new time-charter agreement which began in December 2008; |
• | increases of $2.8 million for both the three and six months ended June 30, 2009, due to a decline in bunker prices during the six months ended June 30, 2009, compared to the same periods last year; and |
• | increases of $1.0 million and $6.5 million, respectively, for the three and six months ended June 30, 2009, due to a decrease in the number of offhire days resulting from scheduled and unexpected drydockings, compared to the same periods last year. |
• | decreases of $4.3 million and $5.0 million, respectively, for the three and six months ended June 30, 2009, from a reduction in salaries for crew and officers primarily due to the reflagging of five of our vessels from Norwegian flag to Bahamian flag and changing the nationality mix of its crews, and the strengthening of the US Dollar against the Norwegian Kroner; |
• | decreases of $2.0 million and $2.4 million, respectively, for the three and six months ended June 30, 2009, relating to repairs and maintenance performed for certain vessels; and |
• | decreases in FSO vessel operating expenses of $1.1 million and $1.6 million respectively, for the three and six months ended June 30, 2009, from the same periods last year, respectively, primarily due to primarily due to the strengthening of the U.S. Dollar against the Norwegian Kroner and Australian Dollar compared to the same period last year; |
• | increases of $4.0 million and $7.1 million, respectively, for the three and six months ended June 30, 2009, from changes in realized and unrealized losses on our designated foreign currency forward contracts; |
• | an increase of $1.4 million for the six months ended June 30, 2009, primarily due to the purchase of a previously in-chartered shuttle tanker, which was delivered to us in late March 2008; and |
• | increases of $0.5 million and $2.4 million, respectively, for the three and six months ended June 30, 2009, due to an increase in services due to the rising cost of consumables, lube oil, and freight. |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
calendar-ship-days and percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Revenues | 97,572 | 90,785 | 7.5 | 189,498 | 183,314 | 3.4 | ||||||||||||||||||
Vessel operating expenses | 47,021 | 57,418 | (18.1 | ) | 91,450 | 105,455 | (13.3 | ) | ||||||||||||||||
Depreciation and amortization | 25,745 | 22,565 | 14.1 | 51,525 | 40,568 | 27.0 | ||||||||||||||||||
General and administrative(1) | 7,553 | 11,509 | (34.4 | ) | 17,339 | 24,036 | (27.9 | ) | ||||||||||||||||
Income (loss) income from vessel operations | 17,253 | (707 | ) | (2,540.3 | ) | 29,184 | 13,255 | 120.2 | ||||||||||||||||
Calendar-Ship-Days | ||||||||||||||||||||||||
Owned Vessels | 546 | 546 | — | 1,086 | 1,061 | 2.4 | ||||||||||||||||||
Total | 546 | 546 | — | 1,086 | 1,061 | 2.4 | ||||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the FPSO segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | increases of $5.6 million and $4.4 million, respectively, for the three and six months ended June 30, 2009, from the amortization of contract value liabilities relating to FPSO service contracts (as discussed below), which was recognized on the date of the acquisition by us of a controlling interest in Teekay Petrojarl; and |
• | increases of $1.2 million and $1.8 million, respectively, for the three and six months ended June 30, 2009, from the delivery of a new FPSO unit in February 2008 (or theFPSO Delivery), partially offset by lower revenues in other FPSO units due to lower oil production compared to the prior periods. |
• | decreases of $10.1 million and $13.2 million, respectively, for the three and six months ended June 30, 2009 from decreases in service costs due to the timing of certain projects, cost saving initiatives, and the strengthening of the U.S. Dollar against the Norwegian Kroner; and |
• | a decrease of $0.4 million for the six months ended June 30, 2009 from lower insurance charges. |
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• | increases of $3.2 million and $7.3 million, respectively, for the three and six months ended June 30, 2009, from the finalization of preliminary estimates of fair value assigned to certain assets included in our acquisition of Teekay Petrojarl; and |
• | an increase of $3.7 million for the six months ended June 30, 2009, from the FPSO Delivery. |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
calendar-ship-days and percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Revenues | 57,265 | 53,496 | 7.0 | 114,848 | 109,628 | 4.8 | ||||||||||||||||||
Voyage expenses | (34 | ) | 452 | (107.5 | ) | 258 | 602 | (57.1 | ) | |||||||||||||||
Net revenues | 57,299 | 53,044 | 8.0 | 114,590 | 109,026 | 5.1 | ||||||||||||||||||
Vessel operating expenses | 12,049 | 13,125 | (8.2 | ) | 23,836 | 24,748 | (3.7 | ) | ||||||||||||||||
Depreciation and amortization | 15,471 | 14,209 | 8.9 | 30,068 | 28,404 | 5.9 | ||||||||||||||||||
General and administrative(1) | 5,440 | 6,070 | (10.4 | ) | 10,598 | 11,555 | (8.3 | ) | ||||||||||||||||
Restructuring charge | 1,030 | 221 | 366.1 | 3,212 | 221 | 1,353.4 | ||||||||||||||||||
Income from vessel operations | 23,309 | 19,419 | 20.0 | 46,876 | 44,098 | 6.3 | ||||||||||||||||||
Calendar-Ship-Days | ||||||||||||||||||||||||
Owned Vessels and Vessels under Capital Lease | 1,304 | 910 | 43.3 | 2,187 | 1,820 | 20.2 | ||||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the liquefied gas segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | increases of $6.9 million and $10.5 million, respectively, for the three and six months ended June 30, 2009, from the Tangguh LNG Deliveries and the new LPG carrier; and |
• | increases of $1.0 million for the three and six months ended June 30, 2009, due to thePolar Spiritbeing off-hire for 18.5 days during the second quarter of 2008; |
• | decreases of $3.2 million and $4.8 million, respectively, for the three and six months ended June 30, 2009, due to the effect on our Euro-denominated revenues from the weakening of the Euro against the U.S. Dollar during such periods compared to the same periods last year. |
• | decreases of $2.3 million for the three and six months ended June 30, 2009, relating to lower crew manning, insurance, and repairs and maintenance costs; and |
• | decreases of $0.6 million and $1.4 million, respectively, for the three and six months ended June 30, 2009, due to the effect on our Euro-denominated vessel operating expenses from the weakening of the Euro against the U.S. Dollar compared to the same periods last year (a majority of our vessel operating expenses are denominated in Euros, which is primarily a function of the nationality of our crew; our Euro-denominated revenues currently generally approximate our Euro-denominated expenses and Euro-denominated loan and interest payments); |
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• | increases of $1.8 million and $2.7 million, respectively, for the three and six months ended June 30, 2009, from the Tangguh LNG Deliveries. |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
calendar-ship-days and percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Revenues | 76,011 | 66,218 | 14.8 | 142,603 | 127,033 | 12.3 | ||||||||||||||||||
Voyage expenses | 1,758 | 948 | 85.4 | 3,062 | 1,628 | 88.1 | ||||||||||||||||||
Net revenues | 74,253 | 65,270 | 13.8 | 139,541 | 125,405 | 11.3 | ||||||||||||||||||
Vessel operating expenses | 17,103 | 16,387 | 4.4 | 34,912 | 32,757 | 6.6 | ||||||||||||||||||
Time-charter hire expense | 11,913 | 11,445 | 4.1 | 22,903 | 23,165 | (1.1 | ) | |||||||||||||||||
Depreciation and amortization | 14,009 | 11,289 | 24.1 | 26,300 | 20,962 | 25.5 | ||||||||||||||||||
General and administrative(1) | 6,986 | 7,263 | (3.8 | ) | 12,667 | 12,553 | 0.9 | |||||||||||||||||
Loss on sale of vessels and equipment, net of write- downs | 3,280 | — | — | 3,280 | — | — | ||||||||||||||||||
Restructuring charge | 354 | 58 | 510.3 | 505 | 1,558 | (67.6 | ) | |||||||||||||||||
Income from vessel operations | 20,608 | 18,828 | 9.5 | 38,974 | 34,410 | 13.3 | ||||||||||||||||||
Calendar-Ship-Days | ||||||||||||||||||||||||
Owned Vessels | 2,134 | 1,728 | 23.5 | 4,204 | 3,181 | 32.2 | ||||||||||||||||||
Chartered-in Vessels | 596 | 627 | (4.9 | ) | 1,078 | 1,257 | (14.2 | ) | ||||||||||||||||
Total | 2,730 | 2,355 | 15.9 | 5,282 | 4,438 | 19.0 | ||||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the fixed-rate tanker segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | the delivery of two new Aframax tankers during January and March 2008 (collectively, theAframax Deliveries); |
• | the transfer of two product tankers from the spot tanker segment in April 2008 upon commencement of long-term time-charters (theProduct Tanker Transfers); |
• | the transfer of two Suezmax tankers from the spot tanker segment in June 2009 (theSuezmax Transfers); and |
• | the transfer of four Aframax tankers, on a net basis, from the spot tanker segment in 2008 upon commencement of long-term time-charters (theAframax Transfers). |
• | increases of $6.3 million and $11.4 million, respectively, for the three and six months ended June 30, 2009, from the Aframax Transfers; |
• | a relative increase of $1.3 million for the three and six months ended June 30, 2009, because two of our Suezmax tankers were off-hire for 50 days for scheduled drydocking during the prior periods; |
• | increases of $0.3 million and $3.9 million, respectively, for the three and six months ended June 30, 2009, from the Product Tanker Transfers; and |
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• | increases of $0.1 million and $1.3 million, respectively, for the three and six months ended June 30, 2009, from the Aframax Deliveries; |
• | decreases of $1.3 million and $3.3 million for the three and six months ended June 30, 2009, due to interest-rate adjustments to the daily charter rates under the time-charter contracts for five Suezmax tankers (however, under the terms of these capital leases, we had corresponding decreases in our lease payments, which are reflected as decreases to interest expense; therefore, these and future interest rate adjustments do not and will not affect our cash flow or net income (loss)). |
• | increases of $2.0 million and $3.7 million, respectively, for the three and six months ended June 30, 2009, from the Aframax Transfers; |
• | increases of $0.1 million and $1.3 million, respectively, for the three and six months ended June 30, 2009, from the Product Tanker Transfers; |
• | decreases of $1.0 million and $1.9 million for the three and six months ended June 30, 2009, relating to lower crew manning, insurance, and repairs and maintenance costs; and |
• | decreases of $0.4 million and $1.2 million for the three and six months ended June 30, 2009, due to the effect on our Euro-denominated vessel operating expenses from the weakening of the Euro against the U.S. Dollar during such period compared to the same periods last year. |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
calendar-ship-days and percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Revenues | 163,301 | 417,157 | (60.9 | ) | 413,886 | 781,837 | (47.1 | ) | ||||||||||||||||
Voyage expenses | 45,034 | 142,091 | (68.3 | ) | 115,699 | 271,821 | (57.4 | ) | ||||||||||||||||
Net revenues | 118,267 | 275,066 | (57.0 | ) | 298,187 | 510,016 | (41.5 | ) | ||||||||||||||||
Vessel operating expenses | 22,395 | 28,597 | (21.7 | ) | 51,914 | 62,079 | (16.4 | ) | ||||||||||||||||
Time-charter hire expense | 78,843 | 99,015 | (20.4 | ) | 172,503 | 197,177 | (12.5 | ) | ||||||||||||||||
Depreciation and amortization | 24,229 | 27,430 | (11.7 | ) | 48,862 | 55,195 | (11.5 | ) | ||||||||||||||||
General and administrative(1) | 18,868 | 30,717 | (38.6 | ) | 36,254 | 60,484 | (40.1 | ) | ||||||||||||||||
(Gain) loss on sale of vessels and equipment, net of write-downs | (15,304 | ) | 225 | (6,901.8 | ) | (15,422 | ) | (271 | ) | 5,590.8 | ||||||||||||||
Restructuring charge | 1,083 | 1,011 | 7.1 | 1,546 | 1,011 | 52.9 | ||||||||||||||||||
(Loss) Income from vessel operations | (11,847 | ) | 88,071 | (113.5 | ) | 2,530 | 134,341 | (98.1 | ) | |||||||||||||||
Calendar-Ship-Days | ||||||||||||||||||||||||
Owned Vessels | 2,920 | 3,326 | (12.2 | ) | 6,134 | 6,953 | (11.8 | ) | ||||||||||||||||
Chartered-in Vessels | 2,869 | 4,225 | (32.1 | ) | 6,089 | 8,468 | (28.1 | ) | ||||||||||||||||
Total | 5,789 | 7,551 | (23.3 | ) | 12,223 | 15,421 | (20.7 | ) | ||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the spot tanker segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | the transfer of two product tankers in April 2008 to the fixed tanker segment (or theSpot Product Tanker Transfers); |
• | the transfer of four Aframax tankers in November 2008 to the fixed tanker segment (or theSpot Aframax Tanker Transfers); |
• | the sale of seven product tankers between March 2008 and May 2009 (or theSpot Product Tanker Sales); |
• | the sale of one Suezmax tanker in November 2008 (or theSuezmax Tanker Sale); and |
• | a net decrease in the number of chartered-in vessels, primarily from the sale of our 50% interest in the Swift Product Tanker Pool in November 2008, which included our interest in ten in-chartered intermediate product tankers; |
• | the delivery of five new Suezmax tankers between May 2008 and May 2009 (or theSuezmax Deliveries); and |
• | the delivery of one Large product tanker in October 2008. |
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Three Months Ended | ||||||||||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||||||||||
Net | TCE | Net | TCE | |||||||||||||||||||||
Revenues | Revenue | Rate | Revenues | Revenue | Rate | |||||||||||||||||||
Vessel Type | ($000’s) | Days | $ | ($000’s) | Days | $ | ||||||||||||||||||
Spot Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers | 17,439 | 713 | 24,459 | 31,162 | 432 | 72,134 | ||||||||||||||||||
Aframax Tankers | 48,027 | 2,924 | 16,425 | 152,605 | 3,635 | 41,982 | ||||||||||||||||||
Large/Medium Product Tankers | 11,151 | 668 | 16,693 | 34,527 | 1,156 | 29,868 | ||||||||||||||||||
Small Product Tankers | — | — | — | 12,196 | 887 | 13,750 | ||||||||||||||||||
Time-Charter Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers | 21,292 | 568 | 37,486 | 22,651 | 740 | 30,609 | ||||||||||||||||||
Aframax Tankers | 17,859 | 546 | 32,708 | 5,725 | 180 | 31,803 | ||||||||||||||||||
Large/Medium Product Tankers | 6,028 | 265 | 22,748 | 12,135 | 431 | 28,156 | ||||||||||||||||||
Other(2) | (3,529 | ) | 4,065 | |||||||||||||||||||||
Totals | 118,267 | 5,684 | 20,807 | 275,066 | 7,461 | 36,867 | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||||||||||
Net | TCE | Net | TCE | |||||||||||||||||||||
Revenues | Revenue | Rate | Revenues | Revenue | Rate | |||||||||||||||||||
Vessel Type | ($000’s) | Days | $ | ($000’s) | Days | $ | ||||||||||||||||||
Spot Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers | 41,778 | 1,319 | 31,674 | 55,508 | 985 | 56,354 | ||||||||||||||||||
Aframax Tankers | 136,016 | 6,369 | 21,356 | 282,830 | 7,343 | 38,517 | ||||||||||||||||||
Large/Medium Product Tankers | 31,062 | 1,545 | 20,105 | 62,549 | 2,218 | 28,201 | ||||||||||||||||||
Small Product Tankers | — | — | — | 24,572 | 1,789 | 13,735 | ||||||||||||||||||
Time-Charter Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers | 42,333 | 1,154 | 36,684 | 41,446 | 1,408 | 29,436 | ||||||||||||||||||
Aframax Tankers | 35,122 | 1,070 | 32,824 | 10,234 | 322 | 31,784 | ||||||||||||||||||
Large/Medium Product Tankers | 14,484 | 625 | 23,175 | 30,661 | 1,244 | 24,647 | ||||||||||||||||||
Other(2) | (2,608 | ) | 2,216 | |||||||||||||||||||||
Totals | 298,187 | 12,082 | 24,680 | 510,016 | 15,309 | 33,315 | ||||||||||||||||||
(1) | Spot fleet includes short-term time-charters and fixed-rate contracts of affreightment less than 1 year and time-charter fleet includes short-term time-charters and fixed-rate contracts of affreightment between 1-3 years. | |
(2) | Includes realized gains and losses on forward freight agreements and synthetic time-charter contracts, the cost of spot in-charter vessels servicing fixed-rate contract of affreightment cargoes, the amortization of in-process revenue contracts and cost of fuel while offhire. |
• | decreases of $112.4 million and $113.7 million, respectively, for the three and six months ended June 30, 2009, from decreases in our average TCE rate during the periods compared to the same periods in 2008; |
• | decreases of $12.2 million and $24.6 million, respectively, for the three and six months ended June 30, 2009, from a net decrease in the number of chartered-in small product tankers primarily due to the sale of our interest in the Swift Tanker Pool in November 2008; |
• | decreases of $8.2 million and $18.7 million, respectively, for the three and six months ended June 30, 2009, from the Spot Aframax Transfers; |
• | decreases of $7.5 million and $18.1 million, respectively, for the three and six months ended June 30, 2009, from the Spot Product Tanker Sales; and |
• | decreases of $37.3 million and $68.9 million, respectively, for the three and six months ended June 30, 2009, from a net decrease in the number of chartered-in vessels, excluding small product tankers discussed above; |
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• | increases of $10.2 million and $21.0 million, respectively, for the three and six months ended June 30, 2009, from the Suezmax Deliveries; and |
• | increases of $8.7 million and $11.3 million, respectively, for the three and six months ended June 30, 2009, from a decrease in the number of days our vessels were off-hire due to regularly scheduled maintenance compared to prior periods. |
• | decreases of $2.7 million and $6.2 million, respectively, for the three and six months ended June 30, 2009, from the Spot Aframax Tanker Transfers; |
• | decreases of $2.5 million and $5.7 million, respectively, for the three and six months ended June 30, 2009, from the Spot Product Tanker Sales; and |
• | decreases of $2.2 million and $3.9 million, respectively, for the three and six months ended June 30, 2009, from lower crew manning, repairs, maintenance and consumables costs; |
• | increases of $2.5 million and $4.8 million, respectively, for the three and six months ended June 30, 2009, from the Suezmax Deliveries; and |
• | increases of $0.5 million and $1.1 million, respectively, for the three and six months ended June 30, 2009, from the one new product tanker delivered in October 2008. |
• | decreases of $10.8 million and $21.9 million, respectively, for the three and six months ended June 30, 2009, from a decrease in the number of chartered-in spot product tankers from the sale of the Swift Tanker Pool in November 2008, compared to the same periods in 2008; and |
• | decreases of $9.3 million and $2.4 million, respectively, for the three and six months ended June 30, 2009, from the decrease in the number of chartered-in Suezmax and Aframax tankers. |
• | decreases of $3.1 million and $7.0 million, respectively, for the three and six months ended June 30, 2009, from the amortization of charter-in contracts; |
• | decreases of $1.5 million and $3.0 million, respectively, for the three and six months ended June 30, 2009, from the Spot Aframax Tanker Transfers; |
• | decreases of $nil and $1.2 million, respectively, for the three and six months ended June 30, 2009, from the Spot Product Tanker Transfers; |
• | decreases of $1.1 million and $2.6 million, respectively, for the three and six months ended June 30, 2009, from the Spot Product Tanker Sales; and |
• | a decrease of $0.3 million, for the three and six months ended June 30, 2009, from the Suezmax Tanker Sale; |
• | increases of $3.8 million and $7.1 million, respectively, for the three and six months ended June 30, 2009, from the Suezmax Tanker Deliveries and one new product tanker. |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. dollars, except | June 30, | June 30, | ||||||||||||||||||||||
percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
General and administrative | (52,695 | ) | (71,298 | ) | (26.1 | ) | (103,835 | ) | (140,363 | ) | (26.0 | ) | ||||||||||||
Interest expense | (37,280 | ) | (63,253 | ) | (41.1 | ) | (81,470 | ) | (151,959 | ) | (46.4 | ) | ||||||||||||
Interest income | 5,023 | 18,832 | (73.3 | ) | 11,701 | 52,722 | (77.8 | ) | ||||||||||||||||
Realized and unrealized gains (losses) on non- designated derivative instruments | 157,485 | 116,263 | 35.5 | 204,730 | (34,948 | ) | (685.8 | ) | ||||||||||||||||
Foreign exchange loss | (25,165 | ) | (3,014 | ) | 734.9 | (13,853 | ) | (36,595 | ) | (62.1 | ) | |||||||||||||
Equity income (loss) from joint ventures | 27,380 | (2,063 | ) | (1,427.2 | ) | 38,802 | (5,672 | ) | (784.1 | ) | ||||||||||||||
Income tax recovery (expense) | 4,598 | 11,201 | (59.0 | ) | (1,270 | ) | 8,718 | (114.6 | ) | |||||||||||||||
Other income | 3,823 | 6,294 | (39.3 | ) | 5,405 | 10,482 | (48.4 | ) |
• | decreases of $11.0 million and $20.9 million, respectively, for the three and six months ended June 30, 2009, in compensation for shore-based employees and other personnel expenses primarily due to decreases in performance based compensation costs and headcount; |
• | decreases of $3.8 million and $7.6 million, respectively, for the three and six months ended June 30, 2009, from lower travel costs; |
• | decreases of $2.4 million and $4.8 million, respectively, for the three and six months ended June 30, 2009, in corporate-related expenses; |
• | decreases of $2.4 million and $3.8 million, respectively, for the three and six months ended June 30, 2009, relating to timing of seafarer training initiatives and lower training activity; |
• | decreases of $1.4 million and $3.8 million, respectively, for the three and six months ended June 30, 2009 relating to the unrealized change in fair value of our foreign currency forward contracts; and |
• | decreases of $1.4 million and $2.3 million, respectively, for the three and six months ended June 30, 2009, relating to the costs associated with our equity-based compensation and long-term incentive program for management. |
• | decreases of $15.1 million and $47.0 million, respectively, for the three and six months ended June 30, 2009, primarily due to repayments of debt drawn under long-term revolving credit facilities and term loans and decrease in interest rates relating to long-term debt; |
• | decreases of $7.2 million and $15.0 million, respectively, for the three and six months ended June 30, 2009, as the debt relating to Teekay Nakilat (III) was novated to the RasGas 3 Joint Venture on December 31, 2008 (the interest expense on this debt is not reflected in our 2009 consolidated interest expense as the RasGas 3 Joint Venture is accounted for using the equity method); |
• | decreases of $3.6 million and $6.2 million, respectively, for the three and six months ended June 30, 2009, from the scheduled loan payments on theCatalunya Spirit, and scheduled capital lease repayments on theMadrid Spirit(theMadrid Spiritis financed pursuant to a Spanish tax lease arrangement, under which we borrowed under a term loan and deposited the proceeds into a restricted cash account and entered into a capital lease for the vessel; as a result, this decrease in interest expense from the capital lease is offset by a corresponding decrease in the interest income from restricted cash); |
• | decreases of $0.6 million and $2.3 million, respectively, for the three and six months ended June 30, 2009, from declining interest rates on our five Suezmax tanker capital lease obligations; and |
• | decreases of $1.0 million and $2.1 million, respectively, for the three and six months ended June 30, 2009, due to the effect on our Euro-denominated debt from the weakening of the Euro against the U.S. Dollar during such period compared to the same periods last year; |
• | increases of $1.5 million and $2.1 million, respectively, for the three and six months ended June 30, 2009, relating to debt to finance the purchase of the Tangguh LNG Carriers as the interest on this debt was capitalized in the same periods last year. |
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• | decreases of $7.3 million and $15.0 million for the three and six months ended June 30, 2009, relating to interest-bearing advances made by us to the RasGas 3 Joint Venture for shipyard construction installment payments as the loan was repaid on December 31, 2008 when the external debt was novated to the RasGas 3 Joint Venture; |
• | decreases of $2.6 million and $6.5 million for the three and six months ended June 30, 2009, due to decreases in LIBOR rates relating to the restricted cash used to fund capital lease payments for the RasGas II LNG Carriers (please read Item 1 — Financial Statements: Note 9 — Capital Leases and Restricted Cash); |
• | decreases of $2.4 million and $6.1 million for the three and six months ended June 30, 2009, relating to lower interest rates on our bank account balances compared to the same periods last year; |
• | decreases of $0.4 million and $0.8 million for the three and six months ended June 30, 2009, due to the effect on our Euro-denominated deposits from the weakening of the Euro against the U.S. Dollar during such period compared to the same periods last year; and |
• | decreases of $0.2 million and $0.4 million for the three and six months ended June 30, 2009, primarily from scheduled capital lease repayments on one of our LNG carriers which was funded from restricted cash deposits. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in thousands of U.S. Dollars) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Realized gains (losses) relating to: | ||||||||||||||||
Interest rate swaps | (29,528 | ) | (11,495 | ) | (50,416 | ) | (13,211 | ) | ||||||||
Foreign currency forward contracts | (2,448 | ) | 9,464 | (7,945 | ) | 23,180 | ||||||||||
Bunkers and forward freight agreements (FFAs) | 4,294 | (10,461 | ) | 2,005 | (15,750 | ) | ||||||||||
(27,682 | ) | (12,492 | ) | (56,356 | ) | (5,781 | ) | |||||||||
Unrealized gains (losses) relating to: | ||||||||||||||||
Interest rate swaps | 182,471 | 167,729 | 245,447 | 2,622 | ||||||||||||
Foreign currency forward contracts | 6,416 | (6,347 | ) | 13,167 | (8,226 | ) | ||||||||||
Bunkers, FFAs and other | (3,720 | ) | (32,627 | ) | 2,472 | (23,563 | ) | |||||||||
185,167 | 128,755 | 261,086 | (29,167 | ) | ||||||||||||
Total realized and unrealized gains (losses) on non-designated derivative instruments | 157,485 | 116,263 | 204,730 | (34,948 | ) | |||||||||||
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Six Months Ended June 30, | ||||||||
2009 | 2008 | |||||||
($000’s) | ($000’s) | |||||||
Net operating cash flows | 229,268 | 198,966 | ||||||
Net financing cash flows | (444,055 | ) | 615,608 | |||||
Net investing cash flows | (126,707 | ) | (758,314 | ) |
• | incurred capital expenditures for vessels and equipment of $344.9 million, primarily for shipyard construction installment payments on our newbuilding Suezmax tankers, shuttle tankers, LNG and LPG carriers, and a product tanker; |
• | received proceeds of $166.1 million from the sale of three product tankers; and |
• | received proceeds of $32.7 million from the sale of an Aframax tanker through a sale-leaseback agreement. |
Remainder of | 2010 and | 2012 and | Beyond | |||||||||||||||||
In millions of U.S. Dollars | Total | 2009 | 2011 | 2013 | 2013 | |||||||||||||||
U.S. Dollar-Denominated Obligations: | ||||||||||||||||||||
Long-term debt(1) | 4,069.0 | 107.3 | 1,155.1 | 488.6 | 2,318.0 | |||||||||||||||
Chartered-in vessels (operating leases) | 769.2 | 182.0 | 417.2 | 141.0 | 29.0 | |||||||||||||||
Commitments under capital leases(2) | 214.8 | 122.4 | 92.4 | — | — | |||||||||||||||
Commitments under capital leases(3) | 1,061.1 | 12.0 | 48.0 | 48.0 | 953.1 | |||||||||||||||
Commitments under operating leases(4) | 495.3 | 12.5 | 50.1 | 50.2 | 382.5 | |||||||||||||||
Newbuilding installments(5) | 545.2 | 88.8 | 456.4 | — | — | |||||||||||||||
Asset retirement obligation | 22.2 | — | — | — | 22.2 | |||||||||||||||
Total U.S. Dollar-denominated obligations | 7,176.8 | 525.0 | 2,219.2 | 727.8 | 3,704.8 | |||||||||||||||
Euro-Denominated Obligations:(6) | ||||||||||||||||||||
Long-term debt(7) | 410.1 | 6.0 | 235.5 | 14.8 | 153.8 | |||||||||||||||
Commitments under capital leases(2) (8) | 164.7 | 36.0 | 128.7 | — | — | |||||||||||||||
Total Euro-denominated obligations | 574.8 | 42.0 | 364.2 | 14.8 | 153.8 | |||||||||||||||
Total | 7,751.6 | 567.0 | 2,583.4 | 742.6 | 3,858.6 | |||||||||||||||
(1) | Excludes expected interest payments of $92.9 million (balance of 2009), $163.0 million (2010 and 2011), $103.3 million (2012 and 2013) and $144.4 million (beyond 2013). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR plus margins that ranged up to 1.0% at June 30, 2009 (variable-rate loans). The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge of certain of our floating-rate debt. |
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(2) | Includes, in addition to lease payments, amounts we are required to pay to purchase certain leased vessels at the end of the lease terms. We are obligated to purchase five of our existing Suezmax tankers upon the termination of the related capital leases, which will occur at various times from late-2009 to 2011. The purchase price will be based on the unamortized portion of the vessel construction financing costs for the vessels, which we expect to range from $35.6 million to $39.2 million per vessel. We expect to satisfy the purchase price by assuming the existing vessel financing, although we may be required to obtain separate debt or equity financing to complete the purchases if the lenders do not consent to our assuming the financing obligations. We are also obligated to purchase one of our existing LNG carriers upon the termination of the related capital leases on December 31, 2011. The purchase obligation has been fully funded with restricted cash deposits. Please read Item 1 — Financial Statements: Note 9 — Capital Leases and Restricted Cash. | |
(3) | Existing restricted cash deposits of $481.9 million, together with the interest earned on the deposits, will equal the remaining amounts we owe under the lease arrangements. | |
(4) | We have corresponding leases whereby we are the lessor and expect to receive $463 million for these leases from the remainder of 2009 to 2029. | |
(5) | Represents remaining construction costs (excluding capitalized interest and miscellaneous construction costs) for four shuttle tankers, two Suezmax tankers, and four LPG carriers. Please read Item 1 — Financial Statements: Note 11(a) — Commitments and Contingencies - Vessels Under Construction. | |
(6) | Euro-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of June 30, 2009. | |
(7) | Excludes expected interest payments of $5.8 million (balance of 2009), $9.7 million (2010 and 2011), $4.7 million (2012 and 2013) and $14.7 million (beyond 2013). Expected interest payments are based on EURIBOR plus margins that ranged up to 0.66% at June 30, 2009, as well as the prevailing U.S. Dollar/Euro exchange rate as of June 30, 2009. The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge of certain of our floating-rate debt. | |
(8) | Existing restricted cash deposits of $150.6 million, together with the interest earned on the deposits, will equal the remaining amounts we owe under the lease arrangements, including our obligation to purchase the vessels at the end of the lease terms. |
• | our future growth prospects; |
• | tanker market fundamentals, including the balance of supply and demand in the tanker market and spot tanker charter rates; |
• | the sufficiency of working capital for short-term liquidity requirements; |
• | future capital expenditure commitments and the financing requirements for such commitments; |
• | delivery dates of and financing for newbuildings, and the commencement of service of newbuildings under long-term time-charter contracts; |
• | our compliance with covenants under our credit facilities; |
• | our hedging activities relating to foreign exchange, interest rate, bunker fuel prices and spot market risks; |
• | the adequacy of restricted cash deposits to fund capital lease obligations; |
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• | our ability to capture some of the value from the volatility of the spot tanker market and from market imbalances by utilizing FFAs and STCs; |
• | the effectiveness of our risk management policies and procedures and the ability of the counter-parties to our derivative contracts to fulfill their contractual obligations; |
• | the condition of financial and economic markets, including the recent credit crisis, interest rate volatility and the availability and cost of capital; and |
• | the growth of global oil demand. |
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JUNE 30, 2009
PART I — FINANCIAL INFORMATION
Expected Maturity Date | ||||||||||||||||||||
Remainder | ||||||||||||||||||||
of 2009 | 2010 | 2011 | Total | Total | ||||||||||||||||
Contract | Contract | Contract | Contract | Fair value(1) | ||||||||||||||||
Amount(1) | Amount(1) | Amount(1) | Amount(1) | Asset (Liability) | ||||||||||||||||
Norwegian Kroner: | $ | 99.5 | $ | 139.5 | — | $ | 239.0 | $ | (15.4 | ) | ||||||||||
Average contractual exchange rate(2) | 5.77 | 6.21 | — | 6.03 | ||||||||||||||||
Euro: | $ | 34.9 | $ | 36.8 | $ | 2.3 | $ | 74.0 | $ | (3.2 | ) | |||||||||
Average contractual exchange rate(2) | 0.66 | 0.70 | 0.73 | 0.68 | ||||||||||||||||
Canadian Dollar: | $ | 28.5 | $ | 37.9 | — | $ | 66.4 | $ | (4.6 | ) | ||||||||||
Average contractual exchange rate(2) | 1.05 | 1.10 | — | 1.08 | ||||||||||||||||
British Pound: | $ | 32.7 | $ | 31.1 | — | $ | 63.8 | $ | (3.4 | ) | ||||||||||
Average contractual exchange rate(2) | 0.54 | 0.61 | — | 0.58 | ||||||||||||||||
Australian Dollar: | $ | 1.3 | — | — | $ | 1.3 | $ | (0.1 | ) | |||||||||||
Average contractual exchange rate(2) | 1.13 | — | — | 1.13 |
(1) | Contract amounts and fair value amounts in millions of U.S. Dollars. | |
(2) | Average contractual exchange rate represents the contractual amount of foreign currency one U.S. Dollar will buy. |
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Expected Maturity Date | Fair Value | |||||||||||||||||||||||||||||||||||
Balance | Asset / | |||||||||||||||||||||||||||||||||||
of 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | (Liability) | Rate(1) | ||||||||||||||||||||||||||||
(in millions of U.S. dollars, except percentages) | ||||||||||||||||||||||||||||||||||||
Long-Term Debt: | ||||||||||||||||||||||||||||||||||||
Variable Rate ($U.S.)(2) | 84.3 | 325.4 | 543.2 | 192.8 | 202.6 | 2,025.0 | 3,373.3 | (3,052.3 | ) | 1.5 | % | |||||||||||||||||||||||||
Variable Rate (Euro)(3) (4) | 6.0 | 12.7 | 222.8 | 7.1 | 7.7 | 153.8 | 410.1 | (356.9 | ) | 1.4 | % | |||||||||||||||||||||||||
Fixed-Rate Debt ($U.S.) | 23.0 | 45.9 | 240.6 | 46.6 | 46.6 | 293.0 | 695.7 | (667.1 | ) | 6.2 | % | |||||||||||||||||||||||||
Average Interest Rate | 5.2 | % | 5.1 | % | 8.0 | % | 5.1 | % | 5.1 | % | 5.2 | % | 6.1 | % | ||||||||||||||||||||||
Capital Lease Obligations(5) (6) | ||||||||||||||||||||||||||||||||||||
Fixed-Rate ($U.S.)(7) | 115.7 | 3.9 | 80.3 | — | — | — | 199.9 | (199.9 | ) | 7.4 | % | |||||||||||||||||||||||||
Average Interest Rate(8) | 8.9 | % | 5.4 | % | 5.5 | % | — | — | — | 7.4 | % | |||||||||||||||||||||||||
Interest Rate Swaps: | ||||||||||||||||||||||||||||||||||||
Contract Amount ($U.S.)(6) (9)(10) | 413.9 | 369.3 | 70.3 | 71.3 | 72.4 | 2,628.6 | 3,625.8 | (342.1 | ) | 5.1 | % | |||||||||||||||||||||||||
Average Fixed Pay Rate(2) | 5.0 | % | 4.9 | % | 5.0 | % | 5.0 | % | 5.0 | % | 5.2 | % | 5.1 | % | ||||||||||||||||||||||
Contract Amount (Euro)(4) (9) | 6.0 | 12.7 | 222.8 | 7.1 | 7.7 | 153.8 | 410.1 | (3.5 | ) | 3.8 | % | |||||||||||||||||||||||||
Average Fixed Pay Rate(3) | 3.8 | % | 3.8 | % | 3.8 | % | 3.7 | % | 3.7 | % | 3.8 | % | 3.8 | % |
(1) | Rate refers to the weighted-average effective interest rate for our long-term debt and capital lease obligations, including the margin we pay on our floating-rate debt and the average fixed pay rate for our interest rate swap agreements. The average interest rate for our capital lease obligations is the weighted-average interest rate implicit in our lease obligations at the inception of the leases. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our floating-rate debt, which as of June 30, 2009 ranged from 0.3% to 1.0%. | |
(2) | Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. | |
(3) | Interest payments on Euro-denominated debt and interest rate swaps are based on EURIBOR. | |
(4) | Euro-denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of June 30, 2009. | |
(5) | Excludes capital lease obligations (present value of minimum lease payments) of 105.7 million Euros ($148.3 million) on one of our existing LNG carriers with a weighted-average fixed interest rate of 5.8%. Under the terms of this fixed-rate lease obligation, we are required to have on deposit, subject to a weighted-average fixed interest rate of 5.0%, an amount of cash that, together with the interest earned thereon, will fully fund the amount owing under the capital lease obligation, including a vessel purchase obligation. As at June 30, 2009, this amount was 107.3 million Euros ($150.6 million). Consequently, we are not subject to interest rate risk from these obligations or deposits. | |
(6) | Under the terms of the capital leases for the three RasGas II LNG Carriers (see Item 1 - Financial Statements: Note 9 — Capital Leases and Restricted Cash), we are required to have on deposit, subject to a variable rate of interest, an amount of cash that, together with interest earned on the deposit, will equal the remaining amounts owing under the leases. The deposits, which as at June 30, 2009 totaled $481.9 million, and the lease obligations, which as at June 30, 2009 totaled $469.7 million, have been swapped for fixed-rate deposits and fixed-rate obligations. Consequently, we are not subject to interest rate risk from these obligations and deposits and, therefore, the lease obligations, cash deposits and related interest rate swaps have been excluded from the table above. As at June 30, 2009, the contract amount, fair value and fixed interest rates of these interest rate swaps related to the RasGas II LNG Carrier capital lease obligations and restricted cash deposits were $465.6 million and $475.4 million, $(46.7) million and $55.0 million, and 4.9% and 4.8%, respectively. | |
(7) | The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable (see Item 1 — Financial Statements: Note 9 — Capital Leases and Restricted Cash). | |
(8) | The average interest rate is the weighted-average interest rate implicit in the capital lease obligations at the inception of the leases. | |
(9) | The average variable receive rate for our interest rate swaps is set monthly at the 1-month LIBOR or EURIBOR, quarterly at the 3-month LIBOR or semi-annually at the 6-month LIBOR. | |
(10) | Includes interest rate swaps of $158.5 million, $300.0 million and $200.0 million that have commencement dates of 2009, 2010 and 2011, respectively. |
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JUNE 30, 2009
Votes Against or | Shares Which | Broker | ||||||||||||||
Terms Expiring in 2012 | Votes For | Withheld | Abstained | Non-Votes | ||||||||||||
Dr. Ian D. Blackburne | 66,417,286 | 166,941 | N/A | N/A | ||||||||||||
J. Rod Clark | 66,280,609 | 303,618 | N/A | N/A | ||||||||||||
C. Sean Day | 65,072,042 | 1,512,185 | N/A | N/A |
• | REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 33-97746) FILED WITH THE SEC ON OCTOBER 4, 1995; | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-42434) FILED WITH THE SEC ON JULY 28, 2000; | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-119564) FILED WITH THE SEC ON OCTOBER 6, 2004; AND | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-147683) FILED WITH THE SEC ON NOVEMBER 28, 2007 |
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TEEKAY CORPORATION | ||||
Date: October 1, 2009 | By: | /s/ Vincent Lok | ||
Vincent Lok | ||||
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
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