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Registration No. 333-164315
Proceeds, before | ||||||||||||
Public offering price(1) | Underwriting discount | expenses, to Teekay | ||||||||||
Per note | 99.181 | % | 1.736 | % | 97.445 | % | ||||||
Total | $ | 446,314,500 | $ | 7,812,000 | $ | 438,502,500 | ||||||
(1) | Plus accrued interest, if any, from January 27, 2010. |
J.P. Morgan | Citi | Deutsche Bank Securities |
BNP PARIBAS | DnB NOR Markets | ING Wholesale | Scotia Capital |
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• | our future financial condition or results of operations and future revenues and expenses; |
• | tanker market conditions and fundamentals, including the balance of supply and demand in these markets and spot tanker charter rates and oil production; |
• | offshore, liquefied natural gas (orLNG) and liquefied petroleum gas (orLPG) market conditions and fundamentals, including the balance of supply and demand in these markets; |
• | our future growth prospects; |
• | our expected benefits from the OMI acquisition; |
• | the sufficiency of our 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 contacts; |
• | potential newbuilding order cancellations; |
• | construction and delivery delays in the tanker industry generally; |
• | the future valuation of goodwill; |
• | the adequacy of restricted cash deposits to fund capital lease obligations; |
• | our compliance with covenants under our credit facilities; |
• | our ability to fulfill our debt obligations; |
• | compliance with financing agreements and the expected effect of restrictive covenants in such agreements; |
• | declining market values of our vessels and the effect on our liquidity; |
• | operating expenses, availability of crew and crewing costs, number of off-hire days, drydocking requirements and durations and the adequacy and cost of insurance; |
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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 forward freight agreements; |
• | the ability of the counterparties to our derivative contracts to fulfill their contractual obligations; |
• | our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term contracts; |
• | the cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards applicable to our business; |
• | the impact of future regulatory changes or environmental liabilities; |
• | taxation of our company and of distributions to our stockholders; |
• | the expected life-spans of our vessels; |
• | the expected impact of heightened environmental and quality concerns of insurance underwriters, regulators and charterers; |
• | anticipated funds for liquidity needs and the sufficiency of cash flows; |
• | our hedging activities relating to foreign exchange, interest rate, spot market and bunker fuel risks; |
• | the effectiveness of our risk management policies and procedures and the ability of the counterparties to our derivative contracts to fulfill their contractual obligations; |
• | the potential for additional revenue from ourPetrojarl VargFPSO contract based on volume of oil produced; |
• | the growth of global oil demand; |
• | the recent economic downturn and financial crisis in the global market, including disruptions in the global credit and stock markets, and potential negative effects of any reoccurrence of such disruptions on our customers’ ability to charter our vessels and pay for our services; |
• | our exemption from tax on our U.S. source international transportation income; |
• | results of our discussions with certain customers to adjust the rate under our floating production, storage and offloading contracts; |
• | our ability to competitively pursue new floating production, storage and offloading projects; |
• | our competitive positions in our markets; |
• | our business strategy and other plans and objectives for future operations; and |
• | our ability to pay dividends on our common stock. |
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• | Our entry into the LNG and LPG shipping sectors and into the offshore oil production, storage and transportation sectors; |
• | The reorganization of certain of our assets through our formation of three publicly-traded subsidiaries, which are focused on growing specific core operating segments and have expanded our investor base and access to the capital markets; and |
• | Expansion of our fixed-rate businesses. For the 12 months ended September 30, 2009, net revenues from fixed-rate contracts with an initial term of at least three years represented 69% of our total net revenues, compared to 41% of total net revenues in 2003. For the 12 months ended September 30, 2009, net revenues from fixed-rate contracts with an initial term of at least one year represented approximately 75% of our total net revenues. As of December 31, 2009, we had under contract a total of approximately $11.5 billion of forward, fixed-rate revenue, with a weighted-average remaining term of approximately 10.3 years (excluding options to extend). |
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(1) | The partnership is controlled by its general partner. Teekay Corporation indirectly owns a 100% beneficial ownership in the general partner. However, in certain limited cases, approval of a majority of the unitholders of the partnership is required to approve certain actions. | |
(2) | Teekay Tankers has two classes of shares: Class A common stock and Class B common stock. Teekay Corporation indirectly owns 100% of the Class B shares which have five votes each but aggregate voting power capped at 49%. As a result of Teekay Corporation’s ownership of Class A and Class B shares, it currently holds aggregate voting power of 51.6%. | |
(3) | Includes 48 vessels owned by Teekay Offshore Operating L.P. |
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Number of vessels | ||||||||||||||||
Teekay Corporation fleet list | Owned vessels | Chartered-in vessels | Newbuildings | Total | ||||||||||||
Teekay Parent fleet(1) | ||||||||||||||||
Aframax tankers(2) | 6 | 16 | 22 | |||||||||||||
Suezmax tankers(3) | 13 | 6 | 19 | |||||||||||||
VLCC tankers | 1 | 1 | ||||||||||||||
Product tankers | 8 | 2 | 10 | |||||||||||||
LNG carriers(4) | 4 | 4 | ||||||||||||||
Shuttle tankers | 4 | 4 | ||||||||||||||
FPSO units(5) | 4 | 4 | ||||||||||||||
FSO units(5) | 1 | 1 | ||||||||||||||
Total Teekay Parent fleet | 32 | (10) | 25 | 8 | 65 | |||||||||||
Teekay Offshore fleet | ||||||||||||||||
Shuttle tankers(6) | 27 | 8 | 35 | |||||||||||||
FSO units(7) | 5 | 5 | ||||||||||||||
FPSO unit | 1 | 1 | ||||||||||||||
Aframax tankers(8) | 11 | 11 | ||||||||||||||
Total Teekay Offshore fleet | 44 | 8 | 52 | |||||||||||||
Teekay LNG fleet | ||||||||||||||||
LNG carriers(9) | 15 | 15 | ||||||||||||||
LPG carriers | 3 | 3 | 6 | |||||||||||||
Suezmax tankers | 8 | 8 | ||||||||||||||
Total Teekay LNG fleet | 26 | 3 | 29 | |||||||||||||
Teekay Tankers fleet | ||||||||||||||||
Aframax tankers | 9 | 9 | ||||||||||||||
Suezmax tankers | 3 | 3 | ||||||||||||||
Total Teekay Tankers fleet | 12 | 12 | ||||||||||||||
Total Teekay consolidated fleet | 114 | (10) | 33 | 11 | 158 | |||||||||||
(1) | Excludes the fleet of Teekay Offshore Operating L.P. (orOPCO), which is owned 51% by Teekay Offshore and 49% by Teekay Parent. All of OPCO’s 48 vessels are included within the Teekay Offshore fleet. | |
(2) | Excludes nine vessels chartered-in from Teekay Offshore and one vessel chartered-in from Teekay Tankers. | |
(3) | Includes one Suezmax tanker Teekay Parent has agreed to offer to Teekay Tankers by June 18, 2010. | |
(4) | Excludes two LNG carriers chartered-in from Teekay LNG. Includes four LNG newbuildings on order in which Teekay Parent’s ownership interest is 33%. Teekay Parent has agreed to offer to Teekay LNG its interest in these four vessels and related charter contracts no later than 180 days before the scheduled delivery dates of the vessels, which are between August 2011 and January 2012. |
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(5) | Teekay Parent has agreed to offer to Teekay Offshore any FPSO and FSO units that service contracts in excess of three years in duration. | |
(6) | Includes two shuttle tankers owned directly by Teekay Offshore, including one vessel in which its ownership is 50%. Includes 25 shuttle tankers owned by OPCO (including five vessels in which OPCO’s ownership is 50%) and eight vessels chartered-in by OPCO. | |
(7) | Includes one FSO unit owned directly by Teekay Offshore and four units owned by OPCO, including one FSO unit in which OPCO’s ownership is 89%. | |
(8) | All these vessels are owned by OPCO. Includes two lightering vessels. | |
(9) | Includes five LNG carriers in which Teekay LNG’s ownership is 70% and four LNG carriers in which its ownership is 40%. | |
(10) | Based on our most recent vessel valuations and current sale and purchase market conditions, we estimate that the fair market values of our owned fleet and of Teekay Parent’s owned fleet, on acharter-free basis, are approximately $7.2 billion and $2.5 billion, respectively. |
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(as of November 2009)
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(including redeployments)
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IEA, December 2009
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• | higher than expected delivery delays, which is particularly relevant for the Suezmax sector where deliveries in 2009 totaled 7.1 mdwt compared to 10.9 mdwt expected at the beginning of the year; |
• | a well-enforced single-hull tanker phase-out; and |
• | potential tanker newbuilding order cancellations, particularly as tanker deliveries scheduled for 2010 and 2011 are the most expensive units currently on order. |
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Issuer | Teekay Corporation | |
Notes offered | $450 million principal amount of 8.500% Senior Notes due 2020. | |
Maturity | January 15, 2020. | |
Issue price | 99.181%. | |
Interest payment dates | January 15 and July 15 of each year, commencing July 15, 2010. | |
Ranking | The notes will rank equally in right of payment with all of our existing and future senior unsecured debt and senior to our existing and future subordinated debt. The notes will effectively rank behind all of our existing and future secured debt, to the extent of the value of the assets securing such debt. | |
We are a holding company and the notes will effectively rank behind all existing and future debt and other liabilities of our subsidiaries. | ||
As of September 30, 2009 and after giving effect to (a) this offering and the proposed application of the net offering proceeds to (i) purchase all of the outstanding 8.875% Senior Notes in the Tender Offer and (ii) repay all amounts outstanding under a term loan and a portion of the borrowings outstanding under one of our revolving credit facilities as described in “Use of proceeds,” and (b) the use of $90 million of net proceeds from Teekay LNG’s November 2009 public offering of common units to repay indebtedness under one of its revolving credit facilities, we would have had approximately $5.3 billion of debt on a consolidated basis, of which approximately $4.8 billion would have been debt of our subsidiaries, all of which is secured by assets of our subsidiaries and approximately $2.0 billion of which is guaranteed on an unsecured basis by Teekay Corporation (including obligations under capital leases secured by $470 million of restricted cash deposits). Our consolidated debt as of September 30, 2009 included obligations of our subsidiaries under capital leases secured by $627 million of restricted cash deposits. Of our consolidated debt, as of September 30, 2009, approximately $4.2 billion ($3.6 billion net of restricted cash) was attributable to our three publicly-traded subsidiaries, of which approximately 83% (93% net of restricted cash) is non-recourse to Teekay Parent. | ||
In addition to our consolidated debt, as of September 30, 2009, our total proportionate interest in debt of joint ventures we do not control was $398 million, of which Teekay Corporation has |
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guaranteed $58.7 million and which otherwise is non-recourse to us. | ||
As of September 30, 2009, and after giving effect to this offering and the proposed application of the net offering proceeds as described in “Use of proceeds,” Teekay Parent would have had approximately $1.3 billion of debt, of which $450 million would have been direct obligations of Teekay Corporation and $813 million would have been debt secured by assets of subsidiaries within Teekay Parent, all of which is guaranteed by Teekay. Please read “Description of notes—General.” | ||
If less than all of our 8.875% Senior Notes are purchased pursuant to the Tender Offer, Teekay Parent’s senior unsecured debt will be higher. | ||
For a more detailed description of our debt and that of Teekay Parent, please read “Description of other indebtedness.” | ||
Guarantees | The notes will not be guaranteed by any of our subsidiaries. | |
Additional amounts | All payments with respect to the notes will be made without withholding or deduction for taxes imposed by the Republic of The Marshall Islands or any jurisdiction from or through which payment on the notes is made unless required by law or the interpretation or administration thereof, in which case, subject to certain exceptions, we will pay such additional amounts as may be necessary so that the net amount received by the holders after such withholding or deduction will not be less than the amount that would have been received in the absence of such withholding or deduction. Please read “Description of notes—Additional amounts.” | |
Optional redemption | We may redeem all or a portion of the notes at any time before their maturity date at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) the sum of the present value of the remaining scheduled payments of principal and interest discounted to the redemption date at the treasury yield plus 50 basis points. Please read “Description of notes—Optional redemption.” | |
In addition, prior to January 15, 2013, we may redeem up to 35% of the notes with the net proceeds of certain equity offerings at a redemption price equal to 108.5% of their principal amount plus accrued interest to the date of redemption. Please read “Description of notes—Redemption with proceeds from equity offerings.” | ||
Tax redemption | If we become obligated to pay additional amounts under the notes as a result of changes affecting certain withholding taxes, we may redeem all, but not less than all, of the notes at 100% of their principal amount plus accrued interest to the date of redemption. |
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Please read “Description of notes—Redemption for changes in withholding taxes.” | ||
Change of control offer | Upon a Change of Control Triggering Event, which requires both a Change of Control and a Rating Decline (as defined herein), we will be obligated to make an offer to purchase all outstanding notes at a redemption price of 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. Please read “Description of notes—Covenants—Repurchase of notes upon a Change of Control Triggering Event.” | |
Certain indenture provisions | The indenture governing the notes will contain covenants limiting our ability to: | |
• create liens; or | ||
• merge, or consolidate or transfer, sell or lease all or substantially all of our assets. | ||
These covenants are subject to a number of important limitations and exceptions which are described under the heading “Description of notes—Covenants.” | ||
Use of proceeds | We intend to use the net proceeds from the issuance of the notes in this offering to fund the Tender Offer for all of our outstanding 8.875% Senior Notes and to repay all amounts outstanding under a term loan and a portion of the borrowings outstanding under one of our revolving credit facilities. Please read “Use of proceeds.” | |
Absence of public market for the notes | The notes will be new securities for which there is no market. There can be no assurance that an active trading market for the notes will develop, or, if it develops, will continue to exist. Although the underwriters have informed us that they currently intend to make a market in the notes, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the notes. |
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• | the historical consolidated financial and operating data as at and for the years ended December 31, 2006, 2007 and 2008 are derived from our audited consolidated financial statements and the notes thereto, which are included elsewhere in this prospectus; |
• | the consolidated historical financial and operating data as at and for the nine months ended September 30, 2008 and 2009 are derived from our unaudited interim consolidated financial statements and the notes thereto, which, other than the unaudited interim consolidated balance sheet as at September 30, 2008, are included elsewhere in this prospectus. |
• | an amendment to Financial Accounting Standards Board (orFASB) Accounting Standards Codification (orASC) 810,Consolidation, which requires that non-controlling interests in subsidiaries held by parties other than us be identified, labeled and presented in the consolidated balance sheet within equity, but separate from the stockholders’ equity. This amendment requires that the amount of consolidated net income (loss) attributable to the stockholders and to the non-controlling interest be clearly identified on the consolidated statements of income (loss). This amendment also requires that distributions from our publicly-traded subsidiaries to non-controlling interests are reflected as a financing cash outflow in our statements of cash flows; and |
• | a new presentation format (theDerivatives Reclassification) for gains (losses) from our derivative instruments that are not designated for accounting purposes as cash flow hedges at inception. These gains (losses) are now reported in realized and unrealized gains (losses) on non-designated derivative instruments within our statements of income (loss) rather than being included in revenue, voyage expenses, vessel operating expenses, general and administrative expenses, interest expense, interest income and foreign exchange gain (loss). |
• | our unaudited consolidated balance sheet as of September 30, 2009 and related unaudited balance sheet data as of September 30, 2008; |
• | our unaudited consolidated statements of income (loss), comprehensive income (loss) and cash flows for the nine months ended September 30, 2009 and 2008; |
• | our unaudited consolidated financial and operating data as of and for the nine months ended September 30, 2009 and 2008; and |
• | the unaudited historical and as adjusted historical financial and operating data of us on a consolidated basis and of Teekay Parent, in each case for the 12 months ended September 30, 2009. |
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• | the unaudited consolidated historical financial and operating data for the 12 months ended September 30, 2009 have been prepared by adding the data from our year-ended December 31, 2008 financial statements adjusted to reflect the adoption of the amendments to ASC 810 and the Derivatives Reclassification (the “Adjusted December 31, 2008 consolidated financial statements”) to the data in our unaudited interim consolidated financial statements for the nine months ended September 30, 2009, and subtracting our consolidated results of operations, cash flows and other data for the nine months ended September 30, 2008; |
• | our as adjusted consolidated financial and operating data for the 12 months ended September 30, 2009 has been prepared by adjusting our historical consolidated financial and operating data for such period as prepared in the manner described in the immediately preceding bullet point to give effect to the following (theAdjustments): (i) $91.9 million of net proceeds received from Teekay LNG’s public offering of 3.95 million common units in November 2009 and the application of $90.0 million of the net proceeds thereof to pay down a portion of one of its revolving credit facilities, (ii) Teekay Offshore’s borrowing in November 2009 of $160.0 million under a new revolving credit facility and the use of such funds to pay down a portion of Teekay’s revolving credit facilities, (iii) the repurchase of $17.4 million of our outstanding 8.875% Senior Notes for an aggregate price of $18.0 million in November 2009 and (iv) this offering and the intended use of the net offering proceeds as described in “Use of proceeds,” as if such events had occurred on October 1, 2008, and assuming that all remaining outstanding 8.875% Senior Notes are purchased in the Tender Offer; and |
• | the as adjusted historical financial and operating data of Teekay Parent as at and for the 12 months ended September 30, 2009 have been prepared by subtracting from our historical consolidated financial and operating data for such period, as prepared in a manner described above, the combined historical results of operations, cash flows and other data of our publicly-traded subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers as at such date and for such period, and adjusting the results by the Adjustments. The historical results of operations and other data of our publicly-traded subsidiaries as at and for the 12 months ended September 30, 2009 have been prepared, for the purposes of preparing the Teekay Parent data described above, by (a) adding the results of operations, cash flows and other data for each such subsidiary as reflected in the Adjusted December 31, 2008 consolidated financial statements to the results of operations, cash flows and other data for each such subsidiary as reflected in its unaudited consolidated financial statements for the nine months ended September 30, 2009, and (b) subtracting the results of operations and other data for each subsidiary as reflected in its adjusted unaudited consolidated financial statements for the nine months ended September 30, 2008. These amounts are further adjusted to subtract the results of operations and cash flows of vessels sold from Teekay Parent to our publicly-traded subsidiaries for periods prior to the date the vessel was sold. The sale of vessels from Teekay Parent to our publicly-traded subsidiaries, both entities under common control, are accounted for by our publicly-traded subsidiaries as if the sale occurred from the date that the acquired vessels were first in control of Teekay Parent and had begun operations. Consequently, as a result of our further adjustment, vessels sold from Teekay Parent to our publicly-listed subsidiaries are reflected in Teekay Parent for the periods prior to the sale of the vessel and are reflected in our publicly-traded subsidiaries for periods subsequent to the sale of the vessel. The as adjusted financial and operating data of Teekay Parent reflects transactions with its publicly-traded subsidiaries. |
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Nine months | Twelve months | |||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||
Year ended December 31, | September 30, | September 30, | ||||||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | 2009 | |||||||||||||||||||
(in thousands, except ratios) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
Income statement data: | ||||||||||||||||||||||||
Revenues(1) | $ | 2,013,737 | $ | 2,395,507 | $ | 3,193,655 | $ | 2,432,123 | $ | 1,649,392 | $ | 2,446,712 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Voyage expenses(1)(2) | 522,957 | 527,308 | 758,388 | 572,685 | 225,253 | 410,956 | ||||||||||||||||||
Vessel operating expenses(1)(3) | 248,039 | 447,146 | 654,319 | 469,517 | 437,299 | 607,730 | ||||||||||||||||||
Time-charter hire expense | 402,168 | 466,481 | 612,123 | 445,444 | 348,243 | 514,888 | ||||||||||||||||||
Depreciation and amortization | 223,965 | 329,113 | 418,802 | 312,900 | 321,856 | 427,758 | ||||||||||||||||||
General and administrative expenses(1) | 181,500 | 231,865 | 244,522 | 184,735 | 156,073 | 211,908 | ||||||||||||||||||
Gain on sale of vessels and equipment—net of write-downs | (1,341 | ) | (16,531 | ) | (60,015 | ) | (39,713 | ) | (10,286 | ) | (30,588 | ) | ||||||||||||
Goodwill impairment charge(4) | – | – | 334,165 | – | – | 334,165 | ||||||||||||||||||
Restructuring charges(5) | 8,929 | – | 15,629 | 11,180 | 12,017 | 16,466 | ||||||||||||||||||
Total operating expenses | 1,586,217 | 1,985,382 | 2,977,933 | 1,956,748 | 1,490,455 | 2,493,283 | ||||||||||||||||||
Income (loss) from vessel operations | 427,520 | 410,125 | 215,722 | 475,375 | 158,937 | (46,571 | ) | |||||||||||||||||
Other items: | ||||||||||||||||||||||||
Interest expenses(1) | (100,089 | ) | (422,433 | ) | (994,966 | ) | (215,139 | ) | (111,505 | ) | (188,962 | ) | ||||||||||||
Interest income(1) | 31,714 | 110,201 | 273,647 | 73,408 | 15,894 | 39,597 | ||||||||||||||||||
Realized and unrealized (loss) gain on non-designated derivative instruments(1) | – | – | – | (125,542 | ) | 83,066 | (364,307 | ) | ||||||||||||||||
Other income (loss), net | (40,751 | ) | (28,639 | ) | (10,473 | ) | (10,119 | ) | (1,700 | ) | (9,118 | ) | ||||||||||||
Total other items | (109,126 | ) | (340,871 | ) | (731,792 | ) | (277,392 | ) | (14,245 | ) | (522,790 | ) | ||||||||||||
Net income before non-controlling interests and income taxes | 318,394 | 69,254 | (516,070 | ) | 197,983 | 144,692 | (569,361 | ) | ||||||||||||||||
Non-controlling interests(6) | (6,759 | ) | (8,903 | ) | (9,561 | ) | – | – | – | |||||||||||||||
Income tax recovery (expense) | (8,811 | ) | 3,192 | 56,176 | 35,022 | (12,174 | ) | 8,980 | ||||||||||||||||
Net income (loss)(6) | $ | 302,824 | $ | 63,543 | $ | (469,455 | ) | 233,005 | 132,518 | (560,381 | ) | |||||||||||||
Less: Net (income) loss attributable to non-controlling interests(6) | (51,587 | ) | (33,902 | ) | 8,124 | |||||||||||||||||||
Net income (loss) attributable to stockholders of Teekay Corp.(6) | $ | 181,418 | $ | 98,616 | $ | (552,257 | ) | |||||||||||||||||
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Nine months | Twelve months | |||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||
Year ended December 31, | September 30, | September 30, | ||||||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | 2009 | |||||||||||||||||||
(in thousands, except ratios) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
Balance sheet data:(at end of period) | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 343,914 | $ | 442,673 | $ | 814,165 | $ | 875,613 | $ | 495,402 | $ | 495,402 | ||||||||||||
Restricted cash(7) | 679,992 | 686,196 | 650,556 | 734,704 | 652,938 | 652,938 | ||||||||||||||||||
Total vessels and equipment(8) | 5,603,316 | 6,846,875 | 7,267,094 | 7,371,364 | 6,890,768 | 6,890,768 | ||||||||||||||||||
Total assets | 8,110,329 | 10,418,541 | 10,215,001 | 11,700,259 | 9,662,233 | 9,662,233 | ||||||||||||||||||
Total long-term debt | 3,252,677 | 5,263,584 | 4,952,792 | 6,111,837 | 4,518,729 | 4,518,729 | ||||||||||||||||||
Total obligations under capital leases | 853,385 | 857,280 | 817,341 | 852,441 | 824,365 | 824,365 | ||||||||||||||||||
Non-controlling interest(6) | 461,887 | 544,339 | 583,938 | 668,563 | 757,167 | 757,167 | ||||||||||||||||||
Total equity (excluding non-controlling interest)(6) | 2,519,147 | 2,655,954 | 2,068,467 | – | – | – | ||||||||||||||||||
Total equity (including non-controlling interest)(6) | – | – | – | 3,454,341 | 2,955,584 | 2,955,584 | ||||||||||||||||||
Cash flow data: | ||||||||||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||||||||||
Operating activities(6) | $ | 520,785 | $ | 255,018 | $ | 431,847 | $ | 317,315 | $ | 298,300 | $ | 504,626 | ||||||||||||
Financing activities(6) | 299,256 | 2,114,199 | 767,878 | 945,798 | (400,743 | ) | (670,457 | ) | ||||||||||||||||
Investing activities | (713,111 | ) | (2,270,458 | ) | (828,233 | ) | (830,173 | ) | (216,320 | ) | (214,380 | ) | ||||||||||||
Other financial data: | ||||||||||||||||||||||||
Net revenues(1)(9) | $ | 1,490,780 | $ | 1,868,199 | $ | 2,435,267 | $ | 1,859,438 | $ | 1,424,139 | $ | 2,035,756 | ||||||||||||
EBITDA(10) | 603,975 | 701,696 | 614,490 | 652,614 | 562,159 | 7,762 | ||||||||||||||||||
Adjusted EBITDA(10) | 630,408 | 660,485 | 882,868 | 686,334 | 420,687 | 617,221 | ||||||||||||||||||
Ratio of earnings to fixed charges(11)(12) | 3.1x | 1.1x | – | 1.7x | 1.7x | N/A | ||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||
Expenditures for vessels and equipment | $ | (442,470 | ) | $ | (910,304 | ) | $ | (716,765 | ) | $ | (546,334 | ) | $ | (431,607 | ) | $ | (602,038 | ) | ||||||
Expenditures for drydocking | (31,120 | ) | (85,403 | ) | (101,511 | ) | (60,905 | ) | (58,815 | ) | (99,421 | ) | ||||||||||||
As adjusted financial data—Consolidated: | ||||||||||||||||||||||||
EBITDA(10) | $ | 7,762 | ||||||||||||||||||||||
Adjusted EBITDA(10) | 617,221 | |||||||||||||||||||||||
Cash interest expense(13) | 276,122 | |||||||||||||||||||||||
Cash and cash equivalents | 479,334 | |||||||||||||||||||||||
Total debt (less restricted cash)(14) | 4,605,004 | |||||||||||||||||||||||
Ratio of total debt (less restricted cash) to Adjusted EBITDA(10)(12)(14) | 7.5x | |||||||||||||||||||||||
Ratio of total debt less total cash to Adjusted EBITDA(10)(12)(14) | 6.7x | |||||||||||||||||||||||
Ratio of Adjusted EBITDA to cash interest expense(10)(13) | 2.2x | |||||||||||||||||||||||
As adjusted financial data—Teekay Parent: | ||||||||||||||||||||||||
EBITDA(10) | $ | (327,975 | ) | |||||||||||||||||||||
Adjusted EBITDA(10) | 250,846 | |||||||||||||||||||||||
Cash distributions from public subsidiaries(15) | 130,106 | |||||||||||||||||||||||
Cash distributions from OPCO(16) | 54,427 | |||||||||||||||||||||||
Cash interest expense(13) | 108,913 | |||||||||||||||||||||||
Cash and cash equivalents | 227,839 | |||||||||||||||||||||||
Total debt (less restricted cash)(14)(17) | 1,096,570 | |||||||||||||||||||||||
Ratio of total debt (less restricted cash) to Adjusted EBITDA(10)(14)(17) | 4.4x | |||||||||||||||||||||||
Ratio of total debt less total cash to Adjusted EBITDA(10)(14)(17) | 3.5x | |||||||||||||||||||||||
Ratio of Adjusted EBITDA to cash interest expense(10)(13) | 2.3x |
(1) | If adjusted for the adoption of the Derivatives Reclassification, realized and unrealized gain (loss) on non-designated derivative instruments on the consolidated statement of income (loss) for the years ended December 31, 2008, 2007 and 2006 would be included as a separate line item on the statements of income (loss) rather than in revenue, voyage expenses, vessel operating expenses, general and administrative expenses, interest expense, interest income and foreign exchange gain (loss), respectively. | |
(2) | Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. | |
(3) | Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. |
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(4) | Goodwill impairment charge was from a write-down of goodwill from the Teekay Petrojarl acquisition. Based on an impairment analysis, management concluded that the carrying value of goodwill in the FPSO segment exceeded its fair value by$334.2 million as of December 31, 2008. As a result, an impairment loss of $334.2 million has been recognized in our consolidated statement of income (loss) for the year ended December 31, 2008. | |
(5) | Restructuring charges generally include costs relating to vessel reflaggings, crew changes, office closures, global staffing changes and business unit reorganization. | |
(6) | If adjusted for the adoption of the FASB ASC 810 amendment, (a) non-controlling interest expense on our consolidated statements of income (loss) for the years ended December 31, 2008, 2007 and 2006 would be included as a component of net income and would be considered a reconciling item from net income to net income attributable to stockholders of Teekay Corp., (b) distributions from our publicly-traded subsidiaries to non-controlling interests would be reflected as a financing cash outflow in our statements of cash flows and (c) non-controlling interest on our balance sheets for the comparable periods would be included as a component of stockholders’ equity. | |
(7) | Substantially all restricted cash deposits relate to Teekay LNG. Under certain capital lease arrangements, Teekay LNG maintains restricted cash deposits that, together with interest earned on the deposits, will equal the remaining scheduled payments it owes under the capital leases. The interest Teekay LNG receives from those deposits is used solely to pay interest associated with the capital leases, and the amount of interest it receives approximates the amount of interest it pays on the capital leases. | |
(8) | Total vessels and equipment consists of (a) owned vessels, at cost less accumulated depreciation, (b) vessels under capital leases, at cost less accumulated amortization and (c) advances on newbuildings. | |
(9) | Consistent with general practice in the shipping industry, we use net revenues (or revenues less voyage expenses) as a measure of equating revenues generated from voyage charters to revenues generated from time charters, which assists us in making operating decisions about the deployment of our vessels and their performance. Under time-charter contracts, the charterer typically pays the voyage expenses, whereas under voyage charter contracts the shipowner typically pays the voyage expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we, as the shipowner, pay the voyage expenses, we typically pass the approximate amount of these expenses on to our customers by charging higher rates under the contract or billing the expenses to them. As a result, although voyage revenues from different types of contracts may vary, the net revenues after subtracting voyage expenses, or net revenues, are comparable across the different types of contracts. We principally use net revenues, a non-GAAP financial measure, because it provides more meaningful information than revenues, the most directly comparable GAAP financial measure. Net revenues are also widely used by investors and analysts in the shipping industry for comparing financial performance between companies in the shipping industry to industry averages. The following table reconciles net revenues with revenues. |
Nine months | Twelve months | |||||||||||||||||||||||
Year ended | ended | ended | ||||||||||||||||||||||
December 31, | September 30, | September 30, | ||||||||||||||||||||||
2006 | 2007 | 2008 | 2008 | 2009 | 2009 | |||||||||||||||||||
(in thousands) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
Revenues | $ | 2,013,737 | $ | 2,395,507 | $ | 3,193,655 | $ | 2,432,123 | $ | 1,649,392 | $ | 2,446,712 | ||||||||||||
Voyage expenses | 522,957 | 527,308 | 758,388 | 572,685 | 225,253 | 410,956 | ||||||||||||||||||
Net revenues | $ | 1,490,780 | $ | 1,868,199 | $ | 2,435,267 | $ | 1,859,438 | $ | 1,424,139 | $ | 2,035,756 | ||||||||||||
(10) | EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before restructuring charges, unrealized foreign exchange gain (loss), gain on sale of vessels and equipment — net of writedowns, goodwill impairment charge and amortization of in-process revenue contracts, realized losses (gains) on interest rate swaps, share of realized and unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures, unrealized loss (gain) on derivative instruments, and non-controlling interest. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, as discussed below. |
• | Financial and operating performance. EBITDA and Adjusted EBITDA assist our management and security holders by increasing the comparability of our fundamental performance from period to period and against the fundamental performance of other companies in our industry that provide EBITDA or Adjusted EBITDA-based information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest expense, taxes, depreciation or amortization (or other items in determining Adjusted EBITDA), which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA and Adjusted EBITDA as a financial and operating measure benefits security holders in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength and health in assessing whether to continue to hold our equity, or debt securities, as applicable. | |
• | Liquidity. EBITDA and Adjusted EBITDA allow us to assess the ability of assets to generate cash sufficient to service debt, pay dividends and undertake capital expenditures. By eliminating the cash flow effect resulting from our existing capitalization and other items such as drydocking expenditures, working capital changes and foreign currency exchange gains and losses (which may very significantly from period to period), EBITDA and Adjusted EBITDA provide a consistent measure of our ability to generate cash over the long term. Management uses this information as a significant factor in determining (a) our proper capitalization (including assessing how much debt to incur and whether changes to the capitalization should be made) and (b) whether to undertake material capital expenditures and how to finance them, all in light of our dividend policy. Use of EBITDA and Adjusted EBITDA as liquidity measures also permits security holders to assess the fundamental ability of our business to generate cash sufficient to meet cash needs, including dividends on shares of our common stock and repayments under debt instruments. |
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Historical consolidated | ||||||||||||||||||||||||
Twelve | ||||||||||||||||||||||||
Nine months | months | |||||||||||||||||||||||
ended | ended | |||||||||||||||||||||||
Year ended December 31, | September 30, | September 30, | ||||||||||||||||||||||
(in thousands) | 2006 | 2007 | 2008 | 2008 | 2009 | 2009 | ||||||||||||||||||
Income statement data: | ||||||||||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net income | ||||||||||||||||||||||||
Net income (loss) | $ | 302,824 | $ | 63,543 | $ | (469,455 | ) | $ | 233,005 | $ | 132,518 | $ | (560,381 | ) | ||||||||||
Income taxes | 8,811 | (3,192 | ) | (56,176 | ) | (35,022 | ) | 12,174 | (8,980 | ) | ||||||||||||||
Depreciation and amortization | 223,965 | 329,113 | 418,802 | 312,900 | 321,856 | 427,758 | ||||||||||||||||||
Interest expense, net of interest income | 68,375 | 312,232 | 721,319 | 141,731 | 95,611 | 149,365 | ||||||||||||||||||
EBITDA | $ | 603,975 | $ | 701,696 | $ | 614,490 | $ | 652,614 | $ | 562,159 | $ | 7,762 | ||||||||||||
Restructuring charges | $ | 8,929 | $ | – | $ | 15,629 | $ | 11,180 | $ | 12,017 | $ | 16,466 | ||||||||||||
Foreign exchange (gain) loss | 50,416 | 39,912 | (32,348 | ) | (8,323 | ) | 39,900 | 15,992 | ||||||||||||||||
Gain on sale of vessels and equipment — net of writedowns | (1,341 | ) | (16,531 | ) | (60,015 | ) | (39,713 | ) | (10,286 | ) | (30,588 | ) | ||||||||||||
Goodwill impairment charge | – | – | 334,165 | – | – | 334,165 | ||||||||||||||||||
Amortization of in-process revenue contracts | (22,404 | ) | (70,979 | ) | (74,425 | ) | (55,733 | ) | (56,719 | ) | (75,411 | ) | ||||||||||||
Unrealized loss (gains) on derivative instruments | (11,912 | ) | (20,850 | ) | 38,724 | 95,366 | (195,048 | ) | 239,869 | |||||||||||||||
Realized losses (gains) on interest rate swaps | – | – | – | 28,361 | 91,737 | 101,662 | ||||||||||||||||||
Realized and unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures | – | – | 32,959 | 2,582 | (23,073 | ) | 7,304 | |||||||||||||||||
Realized gains (losses) on FX forwards | (4,014 | ) | 18,334 | 4,128 | – | – | – | |||||||||||||||||
Non-controlling interest | 6,759 | 8,903 | 9,561 | – | – | – | ||||||||||||||||||
Adjusted EBITDA | $ | 630,408 | $ | 660,485 | $ | 882,868 | $ | 686,334 | $ | 420,687 | $ | 617,221 | ||||||||||||
Reconciliation of Adjusted EBITDA to Net operating cash flow | ||||||||||||||||||||||||
Net operating cash flow | $ | 520,785 | $ | 255,018 | $ | 431,847 | $ | 317,315 | $ | 298,300 | $ | 504,626 | ||||||||||||
Expenditures for drydocking | 31,120 | 85,403 | 101,511 | 60,905 | 58,815 | 99,421 | ||||||||||||||||||
Interest expense, net of interest income | 68,375 | 312,232 | 721,319 | 141,731 | 95,611 | 149,365 | ||||||||||||||||||
Change in non-cash working capital items related to operating activities | (50,360 | ) | 43,871 | 28,816 | 103,055 | (132,802 | ) | (207,041 | ) | |||||||||||||||
Gain on sale of marketable securities | 1,422 | 9,577 | 4,576 | 4,576 | – | – | ||||||||||||||||||
Writedown of marketable securities | – | – | (20,157 | ) | (13,885 | ) | – | (6,272 | ) | |||||||||||||||
Writedown of intangible assets | – | – | (9,748 | ) | – | (1,076 | ) | (10,824 | ) | |||||||||||||||
Loss on bond repurchase | (375 | ) | (947 | ) | (1,310 | ) | (1,310 | ) | – | – | ||||||||||||||
Equity income (loss) from joint ventures (net of dividends received) | (486 | ) | (11,419 | ) | (30,352 | ) | (7,278 | ) | 26,914 | 3,840 | ||||||||||||||
Other — net | (5,956 | ) | 28,586 | 17,532 | 48,083 | 2,851 | (27,583 | ) | ||||||||||||||||
Employee stock compensation | (9,297 | ) | (9,676 | ) | (14,117 | ) | (8,981 | ) | (8,607 | ) | (13,743 | ) | ||||||||||||
Restructuring charges | 8,929 | – | 15,629 | 11,180 | 12,017 | 16,466 | ||||||||||||||||||
Unrealized (losses) gains on interest rate swaps and forward contracts | 45,334 | (119,905 | ) | (491,559 | ) | – | – | – | ||||||||||||||||
Realized (losses) gains on interest rate swaps | – | – | – | 28,361 | 91,737 | 101,662 | ||||||||||||||||||
Realized and unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures | – | – | 32,959 | 2,582 | (23,073 | ) | 7,304 | |||||||||||||||||
Realized gains (losses) on FX forwards | (4,014 | ) | 18,334 | 4,128 | – | – | – | |||||||||||||||||
Distributions from subsidiaries tonon-controlling interests | 24,931 | 49,411 | 91,794 | – | – | – | ||||||||||||||||||
Adjusted EBITDA | $ | 630,408 | $ | 660,485 | $ | 882,868 | $ | 686,334 | $ | 420,687 | $ | 617,221 | ||||||||||||
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As adjusted | ||||||||||||||||
Twelve months ended September 30, 2009 | ||||||||||||||||
(unaudited) | ||||||||||||||||
Teekay | Public | Teekay | ||||||||||||||
(in thousands) | consolidated | subsidiaries | Adjustments | Parent | ||||||||||||
Income statement data: | ||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net loss | ||||||||||||||||
Net Income (loss) | $ | (578,505 | ) | $ | (6,521 | ) | $ | (571,984 | ) | |||||||
Interest expense, net of interest income | 167,489 | 105,768 | 61,721 | |||||||||||||
Income taxes | (8,980 | ) | (7,721 | ) | (1,259 | ) | ||||||||||
Depreciation and amortization | 427,758 | 244,211 | 183,547 | |||||||||||||
EBITDA | $ | 7,762 | $ | 335,737 | $ | (327,975 | ) | |||||||||
Cash distributions from public subsidiaries(15) | $ | – | $ | – | $ | (130,106 | ) | $ | 130,106 | |||||||
Cash distributions from OPCO(16) | – | – | (54,427 | ) | 54,427 | |||||||||||
Restructuring charge | 16,466 | 7,106 | 9,360 | |||||||||||||
Foreign exchange (gain) loss | 15,992 | 17,191 | (1,199 | ) | ||||||||||||
Gain on sale of vessels and equipment — net of writedowns | (30,588 | ) | – | (30,588 | ) | |||||||||||
Goodwill impairment charge | 334,165 | – | 334,165 | |||||||||||||
Amortization of in-process revenue contracts | (75,411 | ) | (421 | ) | (74,990 | ) | ||||||||||
Unrealized losses on derivative instruments | 239,869 | 133,793 | 106,076 | |||||||||||||
Realized losses (gains) on interest rate swaps | 101,662 | 62,882 | 38,780 | |||||||||||||
Realized losses (gains) on interest rate swaps in joint ventures | 7,304 | (5,380 | ) | 12,684 | ||||||||||||
Adjusted EBITDA | $ | 617,221 | $ | 550,908 | $ | (184,533 | ) | $ | 250,846 | |||||||
Reconciliation of Adjusted EBITDA to Net operating cash flow | ||||||||||||||||
Net operating cash flow | $ | 486,502 | $ | 411,367 | $ | 75,135 | ||||||||||
Expenditures for drydocking | 99,421 | 47,542 | 51,879 | |||||||||||||
Interest expense, net of interest income | 167,489 | 105,768 | 61,721 | |||||||||||||
Change in non-cash working capital items related to operating activities | (207,041 | ) | (86,649 | ) | (120,392 | ) | ||||||||||
Gain on sale of marketable securities | – | – | – | |||||||||||||
Writedown of marketable securities | (6,272 | ) | – | (6,272 | ) | |||||||||||
Writedown of intangible assets | (10,824 | ) | – | (10,824 | ) | |||||||||||
Loss on bond repurchase | – | – | – | |||||||||||||
Equity income (net of dividends received) | 3,840 | 11,507 | (7,667 | ) | ||||||||||||
Other — net | (27,583 | ) | (2,865 | ) | (24,718 | ) | ||||||||||
Employee stock compensation | (13,743 | ) | (370 | ) | (13,373 | ) | ||||||||||
Restructuring charges | 16,466 | 7,106 | 9,360 | |||||||||||||
Realized losses (gains) on interest rate swaps | 101,662 | 62,882 | 38,780 | |||||||||||||
Realized losses (gains) on interest rate swaps in joint ventures | 7,304 | (5,380 | ) | 12,684 | ||||||||||||
Cash distributions from public subsidiaries(15) | – | – | (130,106 | ) | 130,106 | |||||||||||
Cash distributions from OPCO(16) | – | – | (54,427 | ) | 54,427 | |||||||||||
Adjusted EBITDA | $ | 617,221 | $ | 550,908 | $ | (184,533 | ) | $ | 250,846 | |||||||
(11) | This data is unaudited for all periods presented. For purposes of computing our ratio of earnings to fixed charges on a consolidated basis, earnings is the result of adding (a) pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, (b) fixed charges, (c) amortization of capitalized interest, (d) distributed income of equity investees and subtracting interest capitalized. Fixed charges represent (i) interest expensed and capitalized, (ii) amortized premiums, discounts and capitalized expenses related to indebtedness, and (iii) interest within time charter hire expense. For the year ended December 31, 2008 the ratio of earnings to fixed charges was less than 1.0x. The amount of the deficiency for this period was $508.1 million. | |
(12) | In addition to our consolidated debt, as of September 30, 2009, our total proportionate interest in debt of joint ventures we do not control was $398 million, of which Teekay Corporation has guaranteed $58.7 million and which otherwise is non-recourse to us. |
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(13) | Cash interest expense represents total interest expense less interest income and amortization of capitalized loan costs plus capitalized interest and realized losses on interest rate swaps. Management believes that cash interest expense, as a supplemental financial measure, is useful for analyzing the cash flow needs and debt service requirements of Teekay. |
Teekay consolidated | ||||||||||||
Twelve months ended | ||||||||||||
September 30, 2009 | ||||||||||||
(unaudited) | ||||||||||||
As | ||||||||||||
(in thousands) | Historical | Adjustments | adjusted | |||||||||
Interest expense | $ | 188,962 | $ | 16,975 | $ | 205,937 | ||||||
Interest income | (39,597 | ) | (39,597 | ) | ||||||||
Capitalized interest | 15,502 | 15,502 | ||||||||||
Realized losses on interest rate swaps | 101,662 | 101,662 | ||||||||||
Amortization of capitalized loan costs | (7,382 | ) | (7,382 | ) | ||||||||
Cash interest expense | $ | 259,147 | $ | 16,975 | $ | 276,122 | ||||||
Twelve months ended | ||||||||||||
September 30, 2009 | ||||||||||||
(unaudited) | ||||||||||||
Teekay | Public | Teekay | ||||||||||
consolidated, | subsidiaries, | Parent, | ||||||||||
as | as | as | ||||||||||
(in thousands) | adjusted | adjusted | adjusted | |||||||||
Interest expense | $ | 205,937 | $ | 137,426 | $ | 68,511 | ||||||
Interest income | (39,597 | ) | (31,658 | ) | (7,939 | ) | ||||||
Capitalized interest | 15,502 | 2,096 | 13,406 | |||||||||
Realized losses on interest rate swaps | 101,662 | 62,882 | 38,780 | |||||||||
Amortization of capitalized loan costs | (7,382 | ) | (3,537 | ) | (3,845 | ) | ||||||
Cash interest expense | $ | 276,122 | $ | 167,209 | $ | 108,913 | ||||||
(14) | The ratio of total debt (less restricted cash) to Adjusted EBITDA represents total debt less restricted cash as of September 30, 2009 divided by Adjusted EBITDA for the 12 months ended September 30, 2009. The ratio of total debt less total cash to Adjusted EBITDA represents total debt less total cash and restricted cash as of September 30, 2009 divided by Adjusted EBITDA for the 12 months ended September 30, 2009. | |
(15) | The aggregate amount of cash distributions to Teekay Parent from Teekay Offshore, Teekay LNG and Teekay Tankers for 2006, 2007, 2008 and the nine months ended September 30, 2008 and 2009 was $43.5 million, $62.4 million, $119.1 million, $81.6 million and $92.6 million, respectively. | |
(16) | Includes cash distributions to Teekay Parent based on its 49% ownership interest in OPCO, which is Teekay Offshore’s primary operating subsidiary and which had a fleet of 48 vessels as of December 31, 2009. This interest is in addition to Teekay Parent’s indirect ownership interest in OPCO through its ownership interest in Teekay Offshore. Teekay Parent received $54.4 million of distributions from OPCO during the 12 months ended September 30, 2009. | |
(17) | Teekay Parent guarantees $737 million ($268 million net of restricted cash) of indebtedness of Teekay’s publicly-traded subsidiaries. |
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• | a 40.5% partnership interest in Teekay Offshore (including a 2% general partner interest) and all incentive distribution rights of Teekay Offshore; |
• | a 49.2% partnership interest in Teekay LNG (including a 2% general partner interest) and all incentive distribution rights of Teekay LNG; and |
• | a 42.2% interest in Teekay Tankers (including 1.0 million shares of Class A Common Stock and 12.5 million shares of Class B Common Stock). |
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• | to provide for the proper conduct of partnership business and the businesses of its operating subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs); |
• | for Teekay Offshore and Teekay LNG, to provide funds for distributions to the respective unitholders and the respective general partner for any one or more of the next four calendar quarters; or |
• | to comply with applicable law or any loan or other agreements. |
• | the level of capital expenditures it makes; |
• | the cost of any acquisitions; |
• | its debt service requirements; |
• | fluctuations in its working capital needs; |
• | restrictions on distributions contained in its debt agreements; |
• | prevailing economic conditions; and |
• | the amount of cash reserves established by its general partner or board of directors in its sole discretion for the proper conduct of its business. |
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• | may increase the risk that Teekay Offshore or Teekay LNG will be unable to maintain or increase its quarterly cash distribution per unit, which in turn may reduce the amount of incentive distributions Teekay receives as the holder of incentive distribution rights of such entities; and |
• | will reduce Teekay’s ownership interest in Teekay Offshore, Teekay LNG or Teekay Tankers, as applicable, which may reduce the amount of the quarterly cash distributions it receives. |
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• | demand for oil and oil products; |
• | supply of oil and oil products; |
• | regional availability of refining capacity; |
• | global and regional economic conditions; |
• | the distance oil and oil products are to be moved by sea; and |
• | changes in seaborne and other transportation patterns. |
• | the number of newbuilding deliveries; |
• | the scrapping rate of older vessels; |
• | conversion of tankers to other uses; |
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• | the number of vessels that are out of service; and |
• | environmental concerns and regulations. |
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• | geologic factors, including general declines in production that occur naturally over time; |
• | the rate of technical developments in extracting oil and related infrastructure and implementation costs; and |
• | operator decisions based on revenue compared to costs from continued operations. |
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• | decreases in the actual or projected price of oil, which could lead to a reduction in or termination of production of oil at certain fields we service or a reduction in exploration for or development of new offshore oil fields; |
• | increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets; |
• | decreases in the consumption of oil due to increases in its price relative to other energy sources, other factors making consumption of oil less attractive or energy conservation measures; |
• | availability of new, alternative energy sources; and |
• | negative global or regional economic or political conditions, particularly in oil consuming regions, which could reduce energy consumption or its growth. |
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• | interruption of, or loss of momentum in, the activities of one or more of an acquired company’s businesses and our businesses; |
• | additional demands on members of our senior management while integrating acquired businesses, which would decrease the time they have to manage our existing business, service existing customers and attract new customers; |
• | difficulties in integrating the operations, personnel and business culture of acquired companies; |
• | difficulties of coordinating and managing geographically separate organizations; |
• | adverse effects on relationships with our existing suppliers and customers, and those of the companies acquired; |
• | difficulties entering geographic markets or new market segments in which we have no or limited experience; and |
• | loss of key officers and employees of acquired companies. |
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• | marine disaster; |
• | bad weather; |
• | mechanical failures; |
• | grounding, fire, explosions and collisions; |
• | piracy; |
• | human error; and |
• | war and terrorism. |
• | death or injury to persons, loss of property or environmental damage or pollution; |
• | delays in the delivery of cargo; |
• | loss of revenues from or termination of charter contracts; |
• | governmental fines, penalties or restrictions on conducting business; |
• | higher insurance rates; and |
• | damage to our reputation and customer relationships generally. |
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• | our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms; |
• | we will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to stockholders; |
• | our debt level may make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and |
• | our debt level may limit our flexibility in obtaining additional financing, pursuing other business opportunities and responding to changing business and economic conditions. |
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• | restructuring or refinancing our debt, including the notes; |
• | seeking additional debt or equity capital; |
• | seeking bankruptcy protection; |
• | reducing distributions; |
• | reducing or delaying our business activities, acquisitions, investments or capital expenditures; or |
• | selling assets. |
• | pay dividends; |
• | incur or guarantee indebtedness; |
• | change our ownership or structure, including through mergers, consolidations, liquidations and dissolutions; |
• | grant liens on our assets; |
• | sell, transfer, assign or convey our assets; |
• | make certain investments; and |
• | enter into a new line of business. |
• | grant liens on our assets; |
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• | transfer, sell, lease or otherwise dispose of all or substantially all of our assets; and |
• | consolidate with, or merge with or into any person. |
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Nine months | ||||||||||||
ended | ||||||||||||
Year ended December 31, | September 30, | |||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||
Ratio of earnings to fixed charges(1)(2) | 4.1x | 3.8x | 3.1x | 1.1x | –(3) | 1.7x | ||||||
(1) | This data is unaudited for all periods presented. For purposes of computing our ratio of earnings to fixed charges on a consolidated basis, earnings is the result of adding (a) pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, (b) fixed charges, (c) amortization of capitalized interest, and (d) distributed income of equity investees, and subtracting interest capitalized. Fixed charges represent (i) interest expensed and capitalized, (ii) amortized premiums, discounts and capitalized expenses related to indebtedness, and (iii) interest within time-charter hire expense. | |
(2) | As of September 30, 2009, we guaranteed $58.7 million of debt of joint ventures we do not control. | |
(3) | For the year ended December 31, 2008, the ratio of earnings to fixed charges was less than 1.0x. The amount of the deficiency was $508.1 million. |
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• | on an actual basis; |
• | on an as adjusted basis to give effect to (a) $91.9 million of net proceeds received from Teekay LNG’s public offering of 3.95 million common units in November 2009 and the application of $90.0 million of the net proceeds thereof to pay down a portion of one of its revolving credit facilities; (b) Teekay Offshore’s borrowing in November 2009 of $160.0 million under a new revolving credit facility and the use of such funds to pay down a portion of Teekay’s revolving credit facilities; (c) the repurchase of $17.4 million of our outstanding 8.875% Senior Notes for an aggregate repurchase price of $18.0 million in November 2009; and |
• | on an as further adjusted basis to give effect to this offering and the application of the estimated net proceeds, assuming that all of our outstanding 8.875% Senior Notes are purchased in the Tender Offer, as described under “Use of proceeds.” If less than all of our outstanding 8.875% Senior Notes are purchased in the Tender Offer, the senior unsecured debt of Teekay Parent will be higher. |
As of September 30, 2009 | ||||||||||||
As further | ||||||||||||
(in thousands) | Actual | As adjusted | adjusted | |||||||||
Cash and cash equivalents | $ | 495,402 | $ | 479,334 | $ | 479,334 | (1) | |||||
Restricted cash(2) | 652,938 | 652,938 | 652,938 | (1) | ||||||||
Total cash and restricted cash | $ | 1,148,340 | $ | 1,132,272 | $ | 1,132,272 | ||||||
Debt: | ||||||||||||
8.875% Senior Notes due July 2011 | $ | 194,466 | $ | 177,063 | $ | – | (3) | |||||
8.500% Senior Notes due January 2020 | – | – | 450,000 | (4) | ||||||||
Other debt(5) | 4,324,263 | 4,234,263 | 3,987,263 | |||||||||
Obligations under capital leases(2)(6) | 824,365 | 824,365 | 824,365 | |||||||||
Total debt | $ | 5,343,094 | $ | 5,235,691 | $ | 5,261,628 | (1)(4) | |||||
Equity: | ||||||||||||
Common stock and additional paid-in capital | 651,884 | 651,884 | 651,884 | |||||||||
Retained earnings | 1,563,713 | 1,578,461 | 1,564,837 | |||||||||
Non-controlling interest | 757,167 | 833,755 | 833,755 | |||||||||
Accumulated other comprehensive loss | (17,180 | ) | (17,180 | ) | (17,180 | ) | ||||||
Total equity | $ | 2,955,584 | $ | 3,046,920 | $ | 3,033,296 | ||||||
Total capitalization | $ | 8,298,678 | $ | 8,282,611 | $ | 8,294,924 | ||||||
(1) | The amounts attributable to Teekay Parent for cash and cash equivalents, restricted cash and total debt, respectively, would be $227.8 million, $2.4 million and $1.1 billion. |
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The following table reconciles Teekay’s consolidated and Teekay Parent’s historical cash and cash equivalents, restricted cash and total debt, respectively. Teekay Parent’s numbers are reconciled to Teekay consolidated numbers, which are the most directly comparable financial measures calculated and presented in accordance with GAAP. | ||
The as further adjusted data in the following table as of September 30, 2009 for each of Teekay on a consolidated basis, Teekay’s publicly-traded subsidiaries (Teekay Offshore, Teekay LNG and Teekay Tankers) and Teekay Parent has been prepared on the bases described in “Summary—Summary financial and operating data.” |
As of September 30, 2009 | ||||||||||||
(unaudited) | ||||||||||||
Teekay | Public | Teekay | ||||||||||
(in thousands) | consolidated | subsidiaries | Parent | |||||||||
Cash and cash equivalents | $ | 479,334 | $ | 251,495 | $ | 227,839 | ||||||
Restricted cash | 652,938 | 650,517 | 2,421 | |||||||||
Total debt | 5,257,942 | 4,158,951 | 1,098,991 | |||||||||
(2) | Substantially all restricted cash deposits relate to Teekay LNG. Under certain capital lease arrangements, Teekay LNG maintains restricted cash deposits that, together with interest earned on the deposits, will equal the remaining scheduled payments it owes under the capital leases. The interest Teekay LNG receives from those deposits is used solely to pay interest associated with the capital leases, and the amount of interest it receives approximates the amount of interest it pays on the capital leases. | |
(3) | We intend to use a portion of the net proceeds of this offering to repurchase, in the Tender Offer we are commencing concurrently with this offering, all of our outstanding 8.875% Senior Notes. If less than all of our 8.875% Senior Notes are purchased in the Tender Offer, we intend to use the additional net proceeds from this offering not used to repurchase the 8.875% Senior Notes to repay additional debt or for general corporate purposes. | |
(4) | The recorded amount of the notes will be reduced by approximately $3.7 million to reflect the issue price of the notes. | |
(5) | The portions of other debt (a) secured by assets of certain of our subsidiaries and (b) guaranteed by us or certain of our subsidiaries are $4.2 billion, $4.1 billion and $4.0 billion, respectively, on an actual, as adjusted and as further adjusted basis. | |
(6) | A total of $627 million of these capital lease obligations is both (a) secured by assets (cash collateral) of certain of our subsidiaries and (b) guaranteed by us or certain of our subsidiaries on an actual, as adjusted and as further adjusted basis. |
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• | the historical financial and operating data as at and for the years ended December 31, 2004 and 2005 are derived from our audited consolidated financial statements and the notes thereto and their subsequent restatement which is contained in our Form 20-F/A for the year ended December 31, 2007 filed with the SEC on April 7, 2009, which are not included or incorporated by reference in this prospectus; |
• | the historical financial and operating data as at and for the years ended December 31, 2006, 2007 and 2008 are derived from our audited consolidated financial statements and the notes thereto, which are included elsewhere in this prospectus; and |
• | the historical financial and operating data as at and for the nine months ended September 30, 2008 and 2009 are derived from our unaudited interim consolidated financial statements and the notes thereto, which, other than the unaudited interim consolidated balance sheet as at September 30, 2008, are included elsewhere in this prospectus. |
• | an amendment to FASB ASC 810,Consolidation, which requires that non-controlling interests in subsidiaries held by parties other than us be identified, labeled and presented in the consolidated balance sheet within equity, but separate from the stockholders’ equity. This amendment requires that the amount of consolidated net income (loss) attributable to the stockholders and to the non-controlling interest be clearly identified on the consolidated statements of income (loss). This amendment also requires that distributions from our publicly-traded subsidiaries to non-controlling interests are reflected as a financing cash outflow in our statements of cash flows; and |
• | a new presentation format (theDerivatives Reclassification) for gains (losses) from our derivative instruments that are not designated for accounting purposes as cash flow hedges at inception. These gains (losses) are now reported in realized and unrealized gains (losses) on non-designated derivative instruments within our statements of income (loss) rather than being included in revenue, voyage expenses, vessel operating expenses, general and administrative expenses, interest expense, interest income and foreign exchange gain (loss). |
• | our unaudited consolidated balance sheet as of September 30, 2009 and related unaudited balance sheet data as of September 30, 2008; |
• | our unaudited consolidated statements of income (loss), comprehensive income (loss) and cash flows for the nine months ended September 30, 2009 and 2008; |
• | our unaudited consolidated financial and operating data as of and for the nine months ended September 30, 2009 and 2008; and |
• | the unaudited historical and as adjusted historical financial and operating data of us on a consolidated basis and of Teekay Parent, in each case for the 12 months ended September 30, 2009. |
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Nine months ended | ||||||||||||||||||||||||||||
Year ended December 31, | September 30, | |||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||||||||
(in thousands, except ratios) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||
Income statement data: | ||||||||||||||||||||||||||||
Revenues(1) | $ | 2,217,139 | $ | 1,957,732 | $ | 2,013,737 | $ | 2,395,507 | $ | 3,193,655 | $ | 2,432,123 | $ | 1,649,392 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Voyage expenses(1)(2) | 432,677 | 419,071 | 522,957 | 527,308 | 758,388 | 572,685 | 225,253 | |||||||||||||||||||||
Vessel operating expenses(1)(3) | 218,947 | 213,911 | 248,039 | 447,146 | 654,319 | 469,517 | 437,299 | |||||||||||||||||||||
Time-charter hire expense | 458,731 | 468,190 | 402,168 | 466,481 | 612,123 | 445,444 | 348,243 | |||||||||||||||||||||
Depreciation and amortization | 237,498 | 205,529 | 223,965 | 329,113 | 418,802 | 312,900 | 321,856 | |||||||||||||||||||||
General and administrative expenses(1) | 132,934 | 156,402 | 181,500 | 231,865 | 244,522 | 184,735 | 156,073 | |||||||||||||||||||||
Gain on sale of vessels and equipment—net of write-downs | (79,254 | ) | (139,184 | ) | (1,341 | ) | (16,531 | ) | (60,015 | ) | (39,713 | ) | (10,286 | ) | ||||||||||||||
Goodwill impairment charge(4) | – | – | – | – | 334,165 | – | – | |||||||||||||||||||||
Restructuring charges(5) | 1,002 | 2,882 | 8,929 | – | 15,629 | 11,180 | 12,017 | |||||||||||||||||||||
Total operating expenses | 1,402,535 | 1,326,801 | 1,586,217 | 1,985,382 | 2,977,933 | 1,956,748 | 1,490,455 | |||||||||||||||||||||
Income (loss) from vessel operations | 814,604 | 630,931 | 427,520 | 410,125 | 215,722 | 475,375 | 158,937 |
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Nine months ended | ||||||||||||||||||||||||||||
Year ended December 31, | September 30, | |||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||||||||
(in thousands, except ratios) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||
Other items: | ||||||||||||||||||||||||||||
Interest expense(1) | (180,778 | ) | (142,048 | ) | (100,089 | ) | (422,433 | ) | (994,966 | ) | (215,139 | ) | (111,505 | ) | ||||||||||||||
Interest income(1) | 18,528 | 33,943 | 31,714 | 110,201 | 273,647 | 73,408 | 15,894 | |||||||||||||||||||||
Realized and unrealized (loss) gain on non-designated derivate instruments(1) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | (125,542 | ) | $ | 83,066 | |||||||||||||
Other income (loss), net | 75,109 | 54,478 | (40,751 | ) | (28,639 | ) | (10,473 | ) | (10,119 | ) | (1,700 | ) | ||||||||||||||||
Total other items | (87,141 | ) | (53,627 | ) | (109,126 | ) | (340,871 | ) | (731,792 | ) | (277,392 | ) | (14,245 | ) | ||||||||||||||
Net income before non-controlling interests and income taxes | 727,463 | 577,304 | 318,394 | 69,254 | (516,070 | ) | 197,983 | 144,692 | ||||||||||||||||||||
Non-controlling interests(6) | (2,268 | ) | (13,475 | ) | (6,759 | ) | (8,903 | ) | (9,561 | ) | – | – | ||||||||||||||||
Income tax recovery (expense) | (33,464 | ) | 2,787 | (8,811 | ) | 3,192 | 56,176 | 35,022 | (12,174 | ) | ||||||||||||||||||
Net income (loss)(6) | 691,731 | 566,616 | 302,824 | 63,543 | (469,455 | ) | 233,005 | 132,518 | ||||||||||||||||||||
Less: Net (income) loss attributable to non-controlling interests(6) | (51,587 | ) | (33,902 | ) | ||||||||||||||||||||||||
Net income (loss) attributable to stockholders of Teekay Corp.(6) | $ | 181,418 | $ | 98,616 | ||||||||||||||||||||||||
Balance sheet data: (at end of period) | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 427,037 | $ | 236,984 | $ | 343,914 | $ | 442,673 | $ | 814,165 | $ | 875,613 | $ | 495,402 | ||||||||||||||
Restricted cash(7) | 448,812 | 311,084 | 679,992 | 686,196 | 650,556 | 734,704 | 652,938 | |||||||||||||||||||||
Total vessels and equipment(8) | 3,531,287 | 3,721,674 | 5,603,316 | 6,846,875 | 7,267,094 | 7,371,364 | 6,890,768 | |||||||||||||||||||||
Total assets | 5,503,740 | 5,287,030 | 8,110,329 | 10,418,541 | 10,215,001 | 11,700,259 | 9,662,233 | |||||||||||||||||||||
Total long-term debt | 2,108,004 | 1,878,743 | 3,252,677 | 5,263,584 | 4,952,792 | 6,111,837 | 4,518,729 | |||||||||||||||||||||
Total obligations under capital leases | 636,541 | 554,235 | 853,385 | 857,280 | 817,341 | 852,441 | 824,365 | |||||||||||||||||||||
Non-controlling interest(6) | 14,724 | 287,432 | 461,887 | 544,339 | 583,938 | 668,563 | 757,167 | |||||||||||||||||||||
Total equity (excluding non-controlling interest)(6) | 2,237,358 | 2,238,818 | 2,519,147 | 2,655,954 | 2,068,467 | – | – | |||||||||||||||||||||
Total equity (including non-controlling interest)(6) | – | – | – | – | – | 3,454,341 | 2,955,584 | |||||||||||||||||||||
Cash flow data: | ||||||||||||||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||||||||||||||
Operating activities(6) | $ | 814,704 | $ | 594,949 | $ | 520,785 | $ | 255,018 | $ | 431,847 | $ | 317,315 | $ | 298,300 | ||||||||||||||
Financing activities(6) | (370,403 | ) | (618,309 | ) | 299,256 | 2,114,199 | 767,878 | 945,798 | (400,743 | ) | ||||||||||||||||||
Investing activities | (309,548 | ) | (166,693 | ) | (713,111 | ) | (2,270,458 | ) | (828,233 | ) | (830,173 | ) | (216,320 | ) | ||||||||||||||
Other financial data: | ||||||||||||||||||||||||||||
Net revenues(1)(9) | $ | 1,784,462 | $ | 1,538,661 | $ | 1,490,780 | $ | 1,868,199 | $ | 2,435,267 | $ | 1,859,438 | $ | 1,424,139 | ||||||||||||||
EBITDA(10) | 1,124,943 | 877,463 | 603,975 | 701,696 | 614,490 | 652,614 | 562,159 | |||||||||||||||||||||
Adjusted EBITDA(10) | 1,096,891 | 707,882 | 630,408 | 660,485 | 882,868 | 686,334 | 420,687 | |||||||||||||||||||||
Ratio of earnings to fixed charges(11) | 4.1 | x | 3.8 | x | 3.1 | x | 1.1 | x | – | 1.7 | x | 1.7 | x | |||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||||
Expenditures for vessels and equipment | $ | (548,587 | ) | $ | (555,142 | ) | $ | (442,470 | ) | $ | (910,304 | ) | $ | (716,765 | ) | $ | (546,334 | ) | $ | (431,607 | ) | |||||||
Expenditures for drydocking | (32,889 | ) | (20,668 | ) | (31,120 | ) | (85,403 | ) | (101,511 | ) | (60,905 | ) | (58,815 | ) | ||||||||||||||
(1) | If adjusted for the adoption of the Derivatives Reclassification, realized and unrealized gain (loss) on non-designated derivative instruments on the consolidated statement of income for the years ended December 31, 2008, 2007, 2006, 2005 and 2004 would be |
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included as a separate line item on the statements of income (loss) rather than being included in revenue, voyage expenses, vessel operating expenses, general and administrative expenses, interest expense, interest income and foreign exchange gain (loss), respectively. | ||
(2) | Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. | |
(3) | Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. | |
(4) | Goodwill impairment charge was from a write-down of goodwill from the Teekay Petrojarl acquisition. Based on an impairment analysis, management concluded that the carrying value of goodwill in the FPSO segment exceeded its fair value by $334.2 million as of December 31, 2008. As a result, an impairment loss of $334.2 million has been recognized in our consolidated statement of income loss for the year ended December 31, 2008. | |
(5) | Restructuring charges generally include costs relating to vessel reflaggings, crew changes, office closures, global staffing, changes and business unit reorganization. | |
(6) | If adjusted for the adoption of the FASB ASC 810 amendment, (a) non-controlling interest expense on our consolidated statements of income (loss) for the years ended December 31, 2008, 2007, 2006, 2005 and 2004 would be included as a component of net income and would be considered a reconciling item from net income to net income attributable to stockholders of Teekay Corp., (b) distributions from our publicly-traded subsidiaries to non-controlling interests would be reflected as a financing cash outflow in our statements of cash flows and (c) non-controlling interest on our balance sheets for the comparable periods would be included as a component of stockholders’ equity. | |
(7) | Substantially all restricted cash deposits relate to Teekay LNG. Under certain capital lease arrangements, Teekay LNG maintains restricted cash deposits that, together with interest earned on the deposits, will equal the remaining scheduled payments it owes under the capital leases. The interest Teekay LNG receives from those deposits is used solely to pay interest associated with the capital leases, and the amount of interest it receives approximates the amount of interest it pays on the capital leases. | |
(8) | Total vessels and equipment consists of (a) owned vessels, at cost less accumulated depreciation, (b) vessels under capital leases, at cost less accumulated amortization and (c) advances on newbuildings. |
(9) | Consistent with general practice in the shipping industry, we use net revenues (or revenues less voyage expenses) as a measure of equating revenues generated from voyage charters to revenues generated from time charters, which assists us in making operating decisions about the deployment of our vessels and their performance. Under time-charter contracts, the charterer typically pays the voyage expenses, whereas under voyage charter contracts the shipowner typically pays the voyage expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we, as the shipowner, pay the voyage expenses, we typically pass the approximate amount of these expenses on to our customers by charging higher rates under the contract or billing the expenses to them. As a result, although revenues from different types of contracts may vary, the net revenues after subtracting voyage expenses, or net revenues, are comparable across the different types of contracts. We principally use net revenues, a non-GAAP financial measure, because it provides more meaningful information than voyage revenues, the most directly comparable GAAP financial measure. Net revenues are also widely used by investors and analysts in the shipping industry for comparing financial performance between companies in the shipping industry to industry averages. The following table reconciles net revenues with revenues. |
Nine months | ||||||||||||||||||||||||||||
ended September 30, | ||||||||||||||||||||||||||||
Year ended December 31, | 2008 | 2009 | ||||||||||||||||||||||||||
(in thousands) | 2004 | 2005 | 2006 | 2007 | 2008 | (unaudited) | (unaudited) | |||||||||||||||||||||
Revenues | $ | 2,217,139 | $ | 1,957,732 | $ | 2,013,737 | $ | 2,395,507 | $ | 3,193,655 | $ | 2,432,123 | $ | 1,649,392 | ||||||||||||||
Voyage expenses | 432,677 | 419,071 | 522,957 | 527,308 | 758,388 | 572,685 | 225,253 | |||||||||||||||||||||
Net revenues | $ | 1,784,462 | $ | 1,538,661 | $ | 1,490,780 | $ | 1,868,199 | $ | 2,435,267 | $ | 1,859,438 | $ | 1,424,139 | ||||||||||||||
(10) | EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before restructuring charges, unrealized foreign exchange gain (loss), gain on sale of vessels and equipment — net of writedowns, goodwill impairment charge and amortization of in-process revenue contracts, realized losses (gains) on interest rate swaps, share of realized and unrealized losses (gains) on interest rate swaps innon-consolidated joint ventures, unrealized loss (gain) on derivative instruments and non-controlling interest. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, as discussed below. |
• | Financial and operating performance.EBITDA and Adjusted EBITDA assist our management and security holders by increasing the comparability of our fundamental performance from period to period and against the fundamental performance of other companies in our industry that provide EBITDA or Adjusted EBITDA-based information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest expense, taxes, depreciation or amortization (or other items in determining Adjusted EBITDA), which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA and Adjusted EBITDA as a financial and operating measure benefits security holders in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength and health in assessing whether to continue to hold our equity, or debt securities, as applicable. | |
• | Liquidity.EBITDA and Adjusted EBITDA allow us to assess the ability of assets to generate cash sufficient to service debt, pay dividends and undertake capital expenditures. By eliminating the cash flow effect resulting from our existing capitalization and other items such as drydocking expenditures, working capital changes and foreign currency exchange gains and losses (which may very significantly from period to period), EBITDA and Adjusted EBITDA provide a consistent measure of our ability to generate cash over the long term. Management uses this information as a significant factor in determining (a) our proper capitalization (including assessing how much debt to incur and whether changes to the capitalization should be made) and (b) whether to undertake material capital expenditures and how to finance them, all in light of our dividend policy. Use of EBITDA and Adjusted EBITDA as liquidity measures also permits security holders to assess the fundamental ability of our business to generate cash sufficient to meet cash needs, including dividends on shares of our common stock and repayments under debt instruments. |
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Nine months ended | ||||||||||||||||||||||||||||
Year ended December 31, | September 30, | |||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | 2009 | ||||||||||||||||||||||
Income statement data: | ||||||||||||||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net income | ||||||||||||||||||||||||||||
Net income (loss) | $ | 691,731 | $ | 566,616 | $ | 302,824 | $ | 63,543 | $ | (469,455 | ) | $ | 233,005 | $ | 132,518 | |||||||||||||
Income tax expense (recovery) | 33,464 | (2,787 | ) | 8,811 | (3,192 | ) | (56,176 | ) | (35,022 | ) | 12,174 | |||||||||||||||||
Depreciation and amortization | 237,498 | 205,529 | 223,965 | 329,113 | 418,802 | 312,900 | 321,856 | |||||||||||||||||||||
Interest expense, net | 162,250 | 108,105 | 68,375 | 312,232 | 721,319 | 141,731 | 95,611 | |||||||||||||||||||||
EBITDA | 1,124,943 | 877,463 | 603,975 | 701,696 | 614,490 | 652,614 | 562,159 | |||||||||||||||||||||
Restructuring charge | 1,002 | 2,882 | 8,929 | – | 15,629 | 11,180 | 12,017 | |||||||||||||||||||||
Foreign exchange (gain) loss | 43,508 | (61,635 | ) | 50,416 | 39,912 | (32,348 | ) | (8,323 | ) | 39,900 | ||||||||||||||||||
Gain on sale of vessels and equipment — net of writedowns | (79,254 | ) | (139,184 | ) | (1,341 | ) | (16,531 | ) | (60,015 | ) | (39,713 | ) | (10,286 | ) | ||||||||||||||
Goodwill impairment charge | – | – | – | – | 334,165 | – | – | |||||||||||||||||||||
Amortization of in-process revenue contracts | – | – | (22,404 | ) | (70,979 | ) | (74,425 | ) | (55,733 | ) | (56,719 | ) | ||||||||||||||||
Unrealized losses (gains) on derivative instruments | 4,424 | 14,881 | (11,912 | ) | (20,850 | ) | 38,724 | 95,366 | (195,048 | ) | ||||||||||||||||||
Realized losses (gains) on interest rate swaps | – | – | – | – | – | 28,361 | 91,737 | |||||||||||||||||||||
Realized and unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures | – | – | – | – | 32,959 | 2,582 | (23,073 | ) | ||||||||||||||||||||
Realized gains (losses) on FX forwards | – | – | (4,014 | ) | 18,334 | 4,128 | – | – | ||||||||||||||||||||
Non-controlling interest | 2,268 | 13,475 | 6,759 | 8,903 | 9,561 | – | – | |||||||||||||||||||||
Adjusted EBITDA | $ | 1,096,891 | $ | 707,882 | $ | 630,408 | $ | 660,485 | $ | 882,868 | $ | 686,334 | $ | 420,687 | ||||||||||||||
Reconciliation of Adjusted EBITDA to Net operating cash flow | ||||||||||||||||||||||||||||
Net operating cash flow | $ | 814,704 | $ | 594,949 | $ | 520,785 | $ | 255,018 | $ | 431,847 | $ | 317,315 | $ | 298,300 | ||||||||||||||
Expenditures for drydocking | 32,889 | 20,668 | 31,120 | 85,403 | 101,511 | 60,905 | 58,815 | |||||||||||||||||||||
Interest expense, net | 162,250 | 108,105 | 68,375 | 312,232 | 721,319 | 141,731 | 95,611 | |||||||||||||||||||||
Change in non-cash working capital items related to operating activities | 26,550 | 8,644 | (50,360 | ) | 43,871 | 28,816 | 103,055 | (132,802 | ) | |||||||||||||||||||
Gain on sale of marketable securities | 93,175 | – | 1,422 | 9,577 | 4,576 | 4,576 | – | |||||||||||||||||||||
Writedown of marketable securities | – | – | – | – | (20,157 | ) | (13,885 | ) | – | |||||||||||||||||||
Writedown of intangible assets | – | – | – | – | (9,748 | ) | – | (1,076 | ) | |||||||||||||||||||
Loss on bond repurchase | (769 | ) | (13,255 | ) | (375 | ) | (947 | ) | (1,310 | ) | (1,310 | ) | – | |||||||||||||||
Equity income (net of dividends received) | 1,154 | 2,670 | (486 | ) | (11,419 | ) | (30,352 | ) | (7,278 | ) | 26,914 | |||||||||||||||||
Other — net | 27,221 | (12,552 | ) | (5,956 | ) | 28,586 | 17,532 | 48,083 | 2,851 | |||||||||||||||||||
Employee stock compensation | – | – | (9,297 | ) | (9,676 | ) | (14,117 | ) | (8,981 | ) | (8,607 | ) | ||||||||||||||||
Restructuring charge | 1,002 | 2,882 | 8,929 | – | 15,629 | 11,180 | 12,017 | |||||||||||||||||||||
Unrealized (losses) gains on interest rate swaps and forward contracts | (61,285 | ) | (18,322 | ) | 45,334 | (119,905 | ) | (491,559 | ) | – | – | |||||||||||||||||
Realized losses (gains) on interest rate swaps | – | – | – | – | – | 28,361 | 91,737 | |||||||||||||||||||||
Realized and unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures | – | – | – | – | 32,959 | 2,582 | (23,073 | ) | ||||||||||||||||||||
Realized gains (losses) on FX forwards | – | – | (4,014 | ) | 18,334 | 4,128 | – | – | ||||||||||||||||||||
Distributions from subsidiaries to non-controlling interests | – | 14,093 | 24,931 | 49,411 | 91,794 | – | – | |||||||||||||||||||||
Adjusted EBITDA | $ | 1,096,891 | $ | 707,882 | $ | 630,408 | $ | 660,485 | $ | 882,868 | $ | 686,334 | $ | 420,687 | ||||||||||||||
(11) | This data is unaudited for all periods presented. For purposes of computing our ratio of earnings to fixed charges on a consolidated basis, earnings is the result of adding (a) pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, (b) fixed charges, (c) amortization of (d) distributed income of equity investees and subtracting interest capitalized. Fixed charges represent (i) interest expensed and capitalized, (ii) amortized premiums, discounts and capitalized expenses related to indebtedness, and (iii) interest within time charter hire expense. In addition to our consolidated debt, as of September 30, 2009, our total proportionate interest in debt of joint ventures we do not control was $398 million, of which Teekay Corporation has guaranteed $58.7 million and which otherwise is non-recourse to us. For the year ended December 31, 2008 the ratio of earnings to fixed charges was less than 1.0x. The amount of the deficiency for this period was $508.1 million. |
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financial condition and results of operations
• | Our entry into the LNG and LPG shipping sectors and into the offshore oil production, storage and transportation sectors; |
• | The reorganization of certain of our assets through our formation of three publicly-traded subsidiaries, which are focused on growing specific core operating segments and have expanded our investor base and access to the capital markets; and |
• | Expansion of our fixed-rate businesses, with net revenues from fixed-rate contracts with an initial term of at least three years representing 69% of our total net revenues for the 12 months ended September 30, 2009, compared to 41% of our total net revenues in 2003. Net revenues from fixed-rate contracts with an initial term of at least one year represented approximately 75% of our total net revenues for the 12 months ended September 30, 2009. |
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• | an amendment to FASB ASC 810,Consolidation, which requires that non-controlling interests in subsidiaries held by parties other than us be identified, labeled and presented in the consolidated balance sheet within equity, but separate from the stockholders’ equity. This amendment requires that the amount of consolidated net income (loss) attributable to the stockholders and to the non-controlling interest be clearly identified on the consolidated statements of income (loss). This amendment also requires that distributions from our publicly-traded subsidiaries to non-controlling interests are reflected as a financing cash outflow in our statements of cash flows; and |
• | a new presentation format (theDerivatives Reclassification) for gains (losses) from our derivative instruments that are not designated for accounting purposes as cash flow hedges at inception. These gains (losses) are now reported in realized and unrealized gains (losses) on non-designated derivative instruments within our statements of income (loss) rather than being in revenue, voyage expenses, vessel operating expenses, general and administrative expenses, interest expense, interest income and foreign exchange gain (loss). |
• | our unaudited consolidated balance sheet as of September 30, 2009 and related unaudited balance sheet data as of September 30, 2008; |
• | our unaudited consolidated statements of income (loss), comprehensive income (loss) and cash flows for the nine months ended September 30, 2009 and 2008; |
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• | our unaudited consolidated financial and operating data as of and for the nine months ended September 30, 2009 and 2008; and |
• | the unaudited historical and as adjusted historical financial and operating data of us on a consolidated basis and of Teekay Parent, in each case for the 12 months ended September 30, 2009. |
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• | May 2005 issuance of 6.9 million common units in its initial public offering for net proceeds of $135.7 million, which Teekay LNG used to partially fund the acquisition of its initial fleet from Teekay; |
• | November 2005 offering of 4.6 million common units for net proceeds of $122.6 million (including the general partner’s proportionate capital contribution), which Teekay LNG used to partially finance the acquisition from Teekay of three Suezmax tankers; |
• | May 2007 offering of 2.3 million common units for net proceeds of $86.0 million (including the general partner’s proportionate capital contribution), which Teekay LNG used to repay amounts outstanding under one of its revolving credit facilities; |
• | April 2008 offering of 5.4 million common units to the public and 1.7 million common units to Teekay in a concurrent private placement at the same price per unit, for aggregate net proceeds of $202.5 million (including the general partner’s proportionate capital |
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contribution), which Teekay LNG used to repay amounts outstanding under two of its revolving credit facilities which had been used to fund vessel acquisitions; |
• | March 2009 offering of 4.0 million units for net proceeds of $68.5 million (including the general partner’s proportionate capital contribution), which Teekay LNG used to repay amounts outstanding under two of its revolving credit facilities; and |
• | November 2009 offering of 3.95 million common units for net proceeds of $93.9 million (including the general partner’s proportionate capital contribution), which Teekay LNG used to repay amounts outstanding under one of its revolving credit facilities. |
• | December 2006 issuance of 8.1 million common units in its initial public offering for net proceeds of $155.3 million, which Teekay Offshore used to partially fund the acquisition of its initial assets from Teekay; |
• | June 2008 offering of 7.4 million common units to the public and 3.3 million common units to Teekay in a concurrent private placement at the same price per unit, for aggregate net proceeds of $210.8 million (including the general partner’s proportionate capital contribution), which Teekay Offshore used to fund the acquisition of an additional 25% interest in OPCO from Teekay and to repay a portion of advances to Teekay Offshore from OPCO; and |
• | August 2009 offering of 7.475 million common units for net proceeds of $104.3 million (including the general partner’s proportionate capital contribution), which Teekay LNG used to repay amounts outstanding under one of its revolving credit facilities. |
• | December 2007 issuance of 11.5 million shares of Class A common stock in its initial public offering, for net proceeds of $208.0 million, which Teekay Tankers used to partially fund the acquisition of its initial fleet from Teekay; and |
• | June 2009 offering of 7.0 million shares of Class A common stock for net proceeds of $65.6 million, which Teekay Tankers used to acquire from Teekay a Suezmax tanker and to repay a portion of its outstanding debt under its revolving credit facility. |
• | Contracts of affreightment, whereby we carry an agreed quantity of cargo for a customer over a specified trade route within a given period of time; |
• | Time charters, whereby vessels we operate and are responsible for crewing are chartered to customers for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates or current market rates; |
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• | Voyage charters, which are charters for shorter intervals that are priced on a current, or “spot,” market rate. |
Contract of | Time | Bareboat | Voyage | |||||
affreightment | charter(1) | charter(1) | charter(2) | |||||
Typical contract length | One year or more | One year or more | One year or more | Single voyage | ||||
Hire rate basis(3) | Typically daily | Daily | Daily | Varies | ||||
Voyage expenses(4) | We pay | Customer pays | Customer pays | We pay | ||||
Vessel operating expenses(4) | We pay | We pay | Customer pays | We pay | ||||
Off-hire(5) | Customer typically does not pay | Varies | Customer typically pays | Customer does not pay | ||||
(1) | Under time charters and bareboat charters, the customer pays for bunker fuel. | |
(2) | Under a consecutive voyage charter, the customer pays for idle time. | |
(3) | “Hire”rate refers to the basic payment from the charterer for the use of the vessel. | |
(4) | Defined below under “Important financial and operational terms and concepts.” | |
(5) | “Off-hire”refers to the time a vessel is not available for service. |
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• | charges related to the depreciation and amortization of the historical cost of our fleet (less an estimated residual value) over the estimated useful lives of our vessels; |
• | charges related to the amortization of drydocking expenditures over the estimated number of years to the next scheduled drydocking; and |
• | charges related to the amortization of intangible assets, including the fair value of the time-charters, contracts of affreightment, customer relationships and intellectual property where amounts have been attributed to those items in acquisitions; these amounts are amortized over the period in which the asset is expected to contribute to our future cash flows. |
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Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2009 | 2008 | Change | |||||||||
Revenues | 432,371 | 532,821 | (18.9 | ) | ||||||||
Voyage expenses | 58,227 | 132,808 | (56.2 | ) | ||||||||
Net revenues | 374,144 | 400,013 | (6.5 | ) | ||||||||
Vessel operating expenses | 126,911 | 130,038 | (2.4 | ) | ||||||||
Time-charter hire expense | 85,645 | 100,231 | (14.6 | ) | ||||||||
Depreciation and amortization | 88,003 | 88,036 | (0.0 | ) | ||||||||
General and administrative expenses(1) | 40,406 | 45,412 | (11.0 | ) | ||||||||
Loss (gain) on sale of vessels and equipment, net of write-downs | 1,902 | (3,771 | ) | (150.4 | ) | |||||||
Restructuring charge | 5,991 | 6,500 | (7.8 | ) | ||||||||
Income from vessel operations | 25,286 | 33,567 | (24.7 | ) | ||||||||
Calendar-ship-days | ||||||||||||
Owned vessels | 7,917 | 7,828 | 1.1 | |||||||||
Chartered-in vessels | 2,328 | 2,745 | (15.2 | ) | ||||||||
Total | 10,245 | 10,573 | (3.1 | ) | ||||||||
(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 additional information, please read “—Other operating results—General and administrative expenses” elsewhere in this prospectus. |
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• | a decrease of $40.7 million 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; |
• | a decrease in net revenues from our FSO units of $7.4 million primarily due to the strengthening of the U.S. Dollar against the Norwegian Kroner and Australian Dollar, the currencies in which we are paid under the FSO contracts; and |
• | a decrease of $2.7 million due to the recovery of certain 2008 Norwegian environmental taxes during the nine months ended September 30, 2008; |
• | an increase of $7.8 million due to rate increases on certain contracts of affreightment; |
• | an increase of $6.7 million due to a decrease in the number of offhire days resulting from scheduled drydockings and unexpected repairs; and |
• | an increase of $2.8 million due to a decline in bunker prices. |
• | a decrease of $9.0 million primarily due to lower crew manning expenses from the reflagging of five of our vessels from Norwegian flag to Bahamian flag and changing the nationality mix of our crews, and the strengthening of the US Dollar against the Norwegian Kroner, the currency in which certain vessel operating expenses are paid; |
• | a decrease of $4.1 million relating to repairs and maintenance performed for certain vessels during the nine months ended September 30, 2008; and |
• | a decrease in FSO vessel operating expenses of $1.5 million primarily due to the offhire of one vessel during the nine months ended September 30, 2009; |
• | a net increase of $8.6 million from changes in realized and unrealized losses on our designated foreign currency forward contracts; and |
• | an increase of $2.9 million due to an increase in services, consumables, lube oil and freight. |
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Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2009 | 2008 | Change | |||||||||
Revenues | 289,825 | 283,673 | 2.2 | |||||||||
Vessel operating expenses | 140,825 | 165,122 | (14.7 | ) | ||||||||
Depreciation and amortization | 76,869 | 67,759 | 13.4 | |||||||||
General and administrative expenses(1) | 25,799 | 35,544 | (27.4 | ) | ||||||||
Income from vessel operations | 46,332 | 15,248 | 203.9 | |||||||||
Calendar-ship-days | ||||||||||||
Owned vessels | 2,365 | 2,469 | (4.2 | ) | ||||||||
Total | 2,365 | 2,469 | (4.2 | ) | ||||||||
(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 additional information, please read “—Other operating results—General and administrative expenses.” |
• | an increase of $3.8 million 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 |
• | an increase of $2.4 million primarily 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 period and the conversion of a shuttle tanker to an FSO unit. |
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• | a decrease of $23.4 million 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 and $0.9 million from lower insurance charges. |
• | an increase of $5.4 million primarily 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 from the FPSO Delivery. |
Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2009 | 2008 | Change | |||||||||
Revenues | 176,283 | 167,297 | 5.4 | |||||||||
Voyage expenses | 723 | 791 | (8.6 | ) | ||||||||
Net revenues | 175,560 | 166,506 | 5.4 | |||||||||
Vessel operating expenses | 36,238 | 35,224 | 2.9 | |||||||||
Depreciation and amortization | 44,257 | 43,010 | 2.9 | |||||||||
General and administrative expenses(1) | 15,875 | 17,520 | (9.4 | ) | ||||||||
Restructuring charge | 3,802 | 614 | 519.2 | |||||||||
Income from vessel operations | 75,388 | 70,138 | 7.5 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels and vessels under capital lease | 3,383 | 2,740 | 23.5 | |||||||||
(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 additional information, please read “—Other operating results—General and administrative expenses” elsewhere in this prospectus. |
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• | an increase of $19.6 million due to the commencement of the time-charters from the Tangguh LNG Deliveries and the new LPG carrier; |
• | an increase of $3.1 million due to theCatalunya Spiritbeing off-hire for 34.3 days for repairs during the nine months ended September 30, 2008; and |
• | an increase of $1.0 million due to thePolar Spiritbeing off-hire for 18.5 days for a scheduled drydock during the nine months ended September 30, 2008; |
• | a decrease of $5.1 million due to lower net revenues from theArctic Spiritas a result of a decrease in the time-charter rate; |
• | a relative decrease of $2.1 million, due to theMadrid Spiritbeing off-hire for 25.2 days during the third quarter of 2009 for a scheduled drydock; |
• | a relative decrease of $1.9 million due to theGalicia Spiritbeing off-hire for 27.6 days during the third quarter of 2009 for a scheduled drydock; and |
• | a decrease of $5.6 million due to the effect on our Euro-denominated revenues from the weakening of the Euro against the U.S. Dollar. |
• | an increase of $5.3 million from the Tangguh LNG Deliveries; |
• | a decrease of $2.1 million relating to lower crew manning, insurance, and repairs and maintenance costs; and |
• | a decrease of $1.6 million due to the effect on our Euro-denominated vessel operating expenses from the weakening of the Euro against the U.S. Dollar (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). |
• | an increase of $1.2 million from the delivery of the Tangguh Sago in March 2009 prior to the commencement of the external time-charter contract in May 2009 which is accounted for as a direct financing lease; and |
• | an increase of $0.6 million from the delivery of the one new LPG carrier in April 2009; |
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• | a decrease of $0.8 million due to revised depreciation estimates of certain of our vessels. |
Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2009 | 2008 | Change | |||||||||
Revenues | 217,574 | 188,519 | 15.4 | |||||||||
Voyage expenses | 4,614 | 2,904 | 58.9 | |||||||||
Net revenues | 212,960 | 185,615 | 14.7 | |||||||||
Vessel operating expenses | 55,540 | 49,626 | 11.9 | |||||||||
Time-charter hire expense | 35,918 | 32,881 | 9.2 | |||||||||
Depreciation and amortization | 41,803 | 32,447 | 28.8 | |||||||||
General and administrative expenses(1) | 20,388 | 15,157 | 34.5 | |||||||||
Loss on sale of vessels and equipment, net of write-downs | 3,960 | – | – | |||||||||
Restructuring charge | 613 | 1,893 | (67.6 | ) | ||||||||
Income from vessel operations | 54,738 | 53,611 | 2.1 | |||||||||
Calendar-ship-days | ||||||||||||
Owned vessels | 6,592 | 4,929 | 33.7 | |||||||||
Chartered-in vessels | 1,661 | 1,826 | (9.0 | ) | ||||||||
Total | 8,253 | 6,755 | 22.2 | |||||||||
(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 additional information, please read “—Other operating results—General and administrative expenses.” |
• | the delivery of two new Aframax tankers during January and March 2008 (collectively, theAframax Deliveries); |
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• | 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); |
• | the purchase of a product tanker which commenced a10-year fixed-rate time charter to Caltex Australia Petroleum Pty Ltd. during September 2009; and |
• | the transfer of five Aframax tankers, on a net basis, from the spot tanker segment in 2008 and 2009 upon commencement of long-term time-charters (theAframax Transfers). |
• | an increase of $20.3 million from the Aframax Transfers; |
• | an increase of $7.1 million from the Suezmax Transfers; |
• | an increase of $2.8 million from the Product Tanker Transfers; |
• | an increase of $1.3 million from the Aframax Deliveries; |
• | a relative increase of $1.2 million as two of our Suezmax tankers were off-hire for 48 days for scheduled drydockings during the nine months ended September 30, 2008; and |
• | an increase of $0.9 million from the purchase of the new product tanker. |
• | a decrease of $4.8 million 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 (loss) income); and |
• | a decrease of $1.1 million due to a scheduled drydocking during the nine months ended September 30, 2009 of theTeesta Spirit, which is one of the vessels included in the Product Tanker Transfers. |
• | an increase of $6.2 million from the Aframax Transfers; |
• | an increase of $1.3 million from the Suezmax Transfers; and |
• | an increase of $1.8 million from the Product Tanker Transfers; |
• | a decrease of $2.3 million relating to lower crew manning, insurance, and repairs and maintenance costs; and |
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• | a decrease of $1.4 million due to the effect on our Euro-denominated vessel operating expenses from the weakening of the Euro against the U.S. Dollar. |
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Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2009 | 2008 | Change | |||||||||
Revenues | 533,339 | 1,259,813 | (57.7 | ) | ||||||||
Voyage expenses | 161,689 | 436,182 | (62.9 | ) | ||||||||
Net revenues | 371,650 | 823,631 | (54.9 | ) | ||||||||
Vessel operating expenses | 77,785 | 89,507 | (13.1 | ) | ||||||||
Time-charter hire expense | 226,680 | 312,332 | (27.4 | ) | ||||||||
Depreciation and amortization | 70,924 | 81,648 | (13.1 | ) | ||||||||
General and administrative expenses(1) | 53,605 | 71,102 | (24.6 | ) | ||||||||
Gain on sale of vessels and equipment, net of write-downs | (16,148 | ) | (35,942 | ) | (55.1 | ) | ||||||
Restructuring charge | 1,611 | 2,173 | (25.9 | ) | ||||||||
(Loss) income from vessel operations | (42,807 | ) | 302,811 | (114.1 | ) | |||||||
Calendar-ship-days | ||||||||||||
Owned vessels | 9,050 | 10,339 | (12.5 | ) | ||||||||
Chartered-in vessels | 8,398 | 13,215 | (36.5 | ) | ||||||||
Total | 17,448 | 23,554 | (25.9 | ) | ||||||||
(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 additional information, please read “—Other operating results—General and administrative expenses.” |
• | the transfer of two product tankers in April 2008 to the fixed-rate tanker segment (or theSpot Product Tanker Transfers); |
• | the transfer of four Aframax tankers in November 2008 and one Aframax tanker in September 2009 to the fixed-rate 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; |
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• | the delivery of one large product tanker in October 2008. |
Nine months ended | ||||||||||||||||||||||||
September 30, 2009 | September 30, 2008 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
revenues | Revenue | TCE | revenues | Revenue | TCE | |||||||||||||||||||
Vessel type | ($000’s) | days | rate $ | ($000’s) | days | rate $ | ||||||||||||||||||
Spot fleet:(1) | ||||||||||||||||||||||||
Suezmax tankers | 55,992 | 2,393 | 23,398 | 88,409 | 1,482 | 59,655 | ||||||||||||||||||
Aframax tankers | 161,203 | 8,842 | 18,232 | 461,352 | 11,187 | 41,240 | ||||||||||||||||||
Large/medium product tankers | 39,404 | 2,185 | 18,034 | 105,309 | 3,319 | 31,729 | ||||||||||||||||||
Small product tankers | – | – | – | 37,239 | 2,704 | 13,772 | ||||||||||||||||||
Time-charter fleet:(1) | ||||||||||||||||||||||||
Suezmax tankers | 52,628 | 1,448 | 36,345 | 58,991 | 2,015 | 29,276 | ||||||||||||||||||
Aframax tankers | 50,754 | 1,556 | 32,618 | 23,229 | 713 | 32,579 | ||||||||||||||||||
Large/medium product tankers | 17,883 | 781 | 22,898 | 39,373 | 1,518 | 25,938 | ||||||||||||||||||
Other(2) | (6,214 | ) | 9,729 | |||||||||||||||||||||
Totals | 371,650 | 17,205 | 21,601 | 823,631 | 22,938 | 35,907 | ||||||||||||||||||
(1) | Spot fleet includes time-charters and fixed-rate contracts of affreightment less than one year and time-charter fleet includes time-charters and fixed-rate contracts of affreightment between one and three years. |
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(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. |
• | a decrease of $286.4 million, primarily from decreases in our average TCE rate; |
• | a decrease of $111.7 million from a net decrease in the number of chartered-in vessels, excluding small product tankers discussed below; |
• | a decrease of $37.3 million 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; |
• | a decrease of $30.3 million from the Spot Aframax Transfers and Spot Product Tanker Transfers; |
• | a decrease of $24.3 million from the Spot Product Tanker Sales; and |
• | a decrease $6.8 million from the Suezmax Tanker Sale; |
• | an increase of $15.1 from a change in the number of days our vessels were off-hire due to regularly scheduled maintenance during the nine months ended September 30, 2009; |
• | an increase of $24.0 million from the Suezmax Deliveries; and |
• | an increase of $5.6 million from the delivery of one large product tanker. |
• | a decrease of $9.1 million from the Spot Aframax Tanker Transfers; and |
• | a decrease of $8.4 million from the Spot Product Tanker Sales; |
• | a decrease of $7.4 million from lower crew manning, repairs, maintenance and consumables costs; and |
• | an increase of $7.6 million from the Suezmax Deliveries; |
• | an increase of $1.9 million from the new product tanker delivered in October 2008. |
• | a decrease of $52.6 million from the decrease in the number of chartered-in Suezmax and Aframax tankers; and |
• | a decrease of $33.1 million from a decrease in the number of chartered-in small product tankers from the sale of the Swift Tanker Pool in November 2008. |
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• | a decrease of $4.9 million from the Spot Product Tanker Sales; |
• | a decrease of $4.5 million from the Spot Aframax Tanker Transfers; |
• | a decrease of $8.4 million from the amortization of a non-compete agreement in the prior periods, which was fully amortized by the end of 2008; |
• | a decrease of $1.2 million from the Spot Product Tanker Transfers; and |
• | a decrease of $1.1 million from the Suezmax Tanker Sale; |
• | an increase of $11.0 million from the Suezmax Tanker Deliveries and one new product tanker. |
Nine months ended | ||||||||||||
September 30, | % | |||||||||||
(in thousands of U.S. dollars, except percentages) | 2009 | 2008 | Change | |||||||||
General and administrative expenses | (156,073 | ) | (184,735 | ) | (15.5 | ) | ||||||
Interest expense | (111,505 | ) | (215,139 | ) | (48.2 | ) | ||||||
Interest income | 15,894 | 73,408 | (78.3 | ) | ||||||||
Realized and unrealized (losses) gains on non- designated derivative instruments | 83,066 | (125,542 | ) | (166.2 | ) | |||||||
Foreign exchange (loss) gain | (39,900 | ) | 8,323 | (579.4 | ) | |||||||
Equity (loss) income from joint ventures | 29,857 | (10,780 | ) | (377.0 | ) | |||||||
Income tax (expense) recovery | (12,174 | ) | 35,022 | (134.8 | ) | |||||||
Other income (loss)—net | 8,343 | (7,662 | ) | (208.9 | ) | |||||||
• | a decrease of $32.5 million, in compensation for shore-based employees and other personnel expenses primarily due to decreases in headcount and performance based compensation costs; |
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• | a decrease of $8.9 million from lower travel costs; |
• | a decrease of $5.4 million relating to timing of seafarer training initiatives and lower training activity; and |
• | a decrease of $4.2 million in corporate-related expenses; |
• | an increase of $19.6 million as there was a large recovery recorded in the third quarter of 2008 relating to the costs associated with our equity-based compensation and long-term incentive program for management, in each case due to significant stock market fluctuations; and |
• | an increase of $2.8 million relating to the net realized and unrealized change in fair value of our foreign currency forward contracts. |
• | a decrease of $65.2 million primarily due to repayments of debt drawn under long-term revolving credit facilities and term loans, and decreases in interest rates relating to long-term debt; |
• | a decrease of $24.6 million 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); |
• | a decrease of $10.7 million from the scheduled loan payments on the LNG carrierCatalunya Spirit, and scheduled capital lease repayments on the LNG carrierMadrid 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); |
• | a decrease of $3.3 million from declining interest rates on our five Suezmax tanker capital lease obligations; and |
• | a decrease of $2.5 million due to the effect on our Euro-denominated debt from the weakening of the Euro against the U.S. Dollar; |
• | an increase of $2.7 million relating to debt to finance the purchase of the Tangguh LNG Carriers, as the interest on this debt was capitalized in the same period in 2008. |
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• | a decrease of $23.2 million 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; |
• | a decrease of $24.5 million primarily relating to lower interest rates on our bank account balances; |
• | a decrease of $8.5 million due to decreases in LIBOR rates relating to the restricted cash used to fund capital lease payments for three LNG carriers; |
• | a decrease of $0.6 million, due to the effect on our Euro-denominated deposits from the weakening of the Euro against the U.S. Dollar; and |
• | a decrease of $0.7 million primarily from scheduled capital lease repayments on one of our LNG carriers which was funded from restricted cash deposits. |
Nine months ended | ||||||||
September 30, | ||||||||
(in thousands of U.S. Dollars) | 2009 | 2008 | ||||||
Realized (losses) gains relating to: | ||||||||
Interest rate swaps | (91,737 | ) | (28,361 | ) | ||||
Foreign currency forward contracts | (8,926 | ) | 30,399 | |||||
Bunkers and forward freight agreements (FFAs) | 4,660 | (25,348 | ) | |||||
(96,003 | ) | (23,310 | ) | |||||
Unrealized (losses) gains relating to: | ||||||||
Interest rate swaps | 164,333 | (55,480 | ) | |||||
Foreign currency forward contracts | 15,227 | (31,975 | ) | |||||
Bunkers, FFAs and other | (491 | ) | (14,777 | ) | ||||
179,069 | (102,232 | ) | ||||||
Total realized and unrealized (losses) gains on non-designated derivative instruments | 83,066 | (125,542 | ) | |||||
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2008 | 2007 | Change | |||||||||
Revenues | 705,461 | 642,047 | 9.9 | |||||||||
Voyage expenses | 171,599 | 117,571 | 46.0 | |||||||||
Net revenues | 533,862 | 524,476 | 1.8 | |||||||||
Vessel operating expenses | 175,449 | 127,372 | 37.7 | |||||||||
Time-charter hire expense | 134,100 | 160,993 | (16.7 | ) | ||||||||
Depreciation and amortization | 117,198 | 104,936 | 11.7 | |||||||||
General and administrative expenses(1) | 58,725 | 60,234 | (2.5 | ) | ||||||||
Gain on sale of vessels and equipment, net of write-downs | (3,771 | ) | (16,531 | ) | (77.2 | ) | ||||||
Restructuring charge | 10,645 | – | – | |||||||||
Income from vessel operations | 41,516 | 87,472 | (52.5 | ) | ||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 11,595 | 11,015 | 5.3 | |||||||||
Chartered-in vessels | 3,765 | 4,619 | (18.5 | ) | ||||||||
Total | 15,360 | 15,634 | (1.8 | ) | ||||||||
(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). |
• | the transfer of theNavion Sagafrom the fixed-rate segment to the shuttle tanker and FSO segment in connection with the completion of its conversion to an FSO unit in May 2007; and |
• | the delivery of two new shuttle tankers, theNavion Bergenand theNavion Gothenburg, in April and July 2007, respectively (collectively, theShuttle Tanker Deliveries); |
• | a decline in the number of chartered-in shuttle tankers; and |
• | the sale of a 1987-built shuttle tanker in May 2007 (or theShuttle Tanker Disposition). |
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• | an increase of $10.1 million from the Shuttle Tanker Deliveries; |
• | an increase of $9.6 million due to more revenue days for shuttle tankers servicing contracts of affreightment and from shuttle tankers servicing contracts of affreightment in the conventional spot tanker market, earning a higher average daily charter rate, compared to the same period in 2008; |
• | an increase of $6.9 million from the transfer of theNavion Sagato the shuttle tanker and FSO segment; and |
• | an increase of $2.5 million due to the redeployment of one shuttle tanker from servicing contracts of affreightment to a time-charter effective October 2007, and earning a higher average daily charter rate than for the same period in 2008; |
• | a decrease of $10.0 million due to declining oil production at mature oil fields in the North Sea which are serviced by certain shuttle tankers on contracts of affreightment; |
• | a decrease of $3.9 million due to an increased number of offhire days resulting from an increase in scheduled drydockings and unexpected repairs performed compared to the same period in 2008; |
• | a decrease of $3.4 million due to customer performance claims under the terms of charter party agreements; |
• | a decrease of $3.0 million due to an increase in bunker costs which are not passed on to the charterer under certain contracts; and |
• | a decrease of $3.0 million due to redeliver of an in-chartered shuttle tanker in May 2008. |
• | an increase of $33.2 million from increases in crew manning costs; |
• | an increase of $9.8 million relating to the unrealized change in fair value of our foreign currency forward contracts; |
• | an increase of $5.0 million relating to the transfer of theNavion Sagato the shuttle tanker and FSO segment; |
• | an increase of $4.4 million, from the acquisition of an in-chartered shuttle tanker, theNavion Oslo, which was delivered in late March 2008; and |
• | an increase of $0.5 million from increases in service costs and the price of consumables, freight and lubricants. |
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• | an increase of $6.9 million relating to the transfer of theNavion Sagato the shuttle tanker and FSO segment; and |
• | an increase of $2.8 million from the Shuttle Tanker Deliveries. |
Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2008 | 2007 | Change | |||||||||
Revenues | 383,752 | 350,279 | 9.6 | |||||||||
Vessel operating expenses | 227,651 | 156,264 | 45.7 | |||||||||
Depreciation and amortization | 91,734 | 68,047 | 34.8 | |||||||||
General and administrative expenses(1) | 53,087 | 36,927 | 43.8 | |||||||||
Loss on sale of vessels and equipment, net of write-downs | 12,019 | – | – | |||||||||
Goodwill impairment charge | 334,165 | – | – | |||||||||
(Loss) income from vessel operations | (334,904 | ) | 89,041 | (476.1 | ) | |||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 2,073 | 1,825 | 13.6 | |||||||||
(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). |
• | an increase of $40.4 million from the FPSO Delivery; |
• | a decrease of $11.3 million in revenues from theFoinavenFPSO due to lower oil production compared to the prior year and a production shutdown during August and September 2008. |
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• | an increase of $25.3 million relating to the unrealized change in fair value of our foreign currency forward contracts; |
• | an increase of $24.2 million from the FPSO Delivery; |
• | an increase of $13.9 million from increases in service costs and the price of consumables, freight and lubricants; and |
• | an increase of $7.3 million from increases in crew manning costs; |
• | a decrease of $1.8 million from lower insurance charges. |
• | an increase of $13.8 million from the refinement of preliminary estimates of fair value assigned to certain assets included in our acquisition of Teekay Petrojarl; and |
• | an increase of $9.9 million from the FPSO Delivery. |
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2008 | 2007 | Change | |||||||||
Revenues | 221,930 | 166,981 | 32.9 | |||||||||
Voyage expenses | 1,009 | 109 | 825.7 | |||||||||
Net revenues | 220,921 | 166,872 | 32.4 | |||||||||
Vessel operating expenses | 48,185 | 30,239 | 59.3 | |||||||||
Depreciation and amortization | 58,371 | 46,018 | 26.8 | |||||||||
General and administrative expenses(1) | 23,072 | 20,521 | 12.4 | |||||||||
Restructuring charge | 634 | – | – | |||||||||
Income from vessel operations | 90,659 | 70,094 | 29.3 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels and vessels under capital lease | 3,701 | 2,899 | 27.7 | |||||||||
(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). |
• | the delivery of one new LNG carrier in November 2008 (theTangguh Hiri); |
• | the delivery of two new LNG carriers in January and February 2007 (or theRasGas II Deliveries); and |
• | our December 2007 acquisition of two 1993-built LNG vessels from a joint venture between Marathon Oil Corporation and ConocoPhillips (or theKenai LNG Carriers). |
• | an increase of $38.3 million from the delivery of the Kenai LNG Carriers; |
• | an increase of $6.1 million from the RasGas II Deliveries; |
• | a relative increase of $5.5 million, due to theMadrid Spiritbeing off-hire during the first half of 2007 after sustaining damage to its engine boilers; and |
• | an increase of $4.7 million due to the effect on our Euro-denominated revenues of the strengthening of the Euro against the U.S. Dollar during 2008 compared to 2007; |
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• | a decrease of $3.1 million, due to theCatalunya Spiritbeing off-hire for 34.3 days during the first half of 2008 for scheduled drydocking. |
• | an increase of $10.8 million from the full year operations in 2008 of the Kenai LNG Carriers delivered in 2007; |
• | an increase of $2.3 million due to the effect on our Euro-denominated vessel operating expenses (primarily crewing costs) from the strengthening of the Euro against the U.S. Dollar during 2008 compared to 2007 (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); |
• | an increase of $1.2 million from the RasGas II Deliveries; and |
• | an increase of $0.7 million from the delivery of theTangguh Hiri. |
• | an increase of $9.9 million from the delivery of the Kenai LNG Carriers; |
• | an increase of $1.2 million from the RasGas II Deliveries; |
• | an increase of $0.6 million from the delivery of theTangguh Hiri; and |
• | an increase of $0.3 million relating to the amortization of drydock expenditures incurred during 2008. |
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Year ended December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2008 | 2007 | Change | |||||||||
Revenues | 265,849 | 195,942 | 35.7 | |||||||||
Voyage expenses | 5,010 | 2,707 | 85.1 | |||||||||
Net revenues | 260,839 | 193,235 | 35.0 | |||||||||
Vessel operating expenses | 68,065 | 51,458 | 32.3 | |||||||||
Time-charter hire expense | 43,048 | 25,812 | 66.8 | |||||||||
Depreciation and amortization | 44,578 | 36,018 | 23.8 | |||||||||
General and administrative expenses(1) | 20,740 | 18,221 | 13.8 | |||||||||
Loss on sale of vessels and equipment, net of write-downs | 4,401 | – | – | |||||||||
Restructuring charge | 1,991 | – | – | |||||||||
Income from vessel operations | 78,016 | 61,725 | 26.4 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 6,824 | 5,390 | 26.6 | |||||||||
Chartered-in vessels | 2,363 | 1,312 | 80.1 | |||||||||
Total | 9,187 | 6,702 | 37.1 | |||||||||
(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). |
• | the acquisition of two Suezmax tankers from OMI Corporation on August 1, 2007 (collectively, theOMI Acquisition); |
• | the addition of two new chartered-in Aframax tankers in January 2008 as part of the multi-vessel transaction with ConocoPhillips, in which we acquired ConocoPhillips’ rights in six double-hull Aframax tankers (collectively, theConocoPhillips Acquisition); |
• | 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 (the ProductTanker Transfers); and |
• | the transfer of four Aframax tankers, on a net basis during 2008, from the spot tanker segment upon commencement of long-term time-charters (the2008 Aframax Transfers). |
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• | an increase of $17.6 million from the ConocoPhillips Acquisition; |
• | an increase of $17.0 million from the OMI Acquisition; |
• | an increase of $11.2 million from the Product Tanker Transfers; |
• | an increase of $9.8 million from the 2008 Aframax Transfers; |
• | a increase of $9.2 million from increased revenues earned by theTeide Spiritand theToledo Spirit(the time charters for both these vessels provide for additional revenues to us beyond the fixed hire rate when spot tanker market rates exceed threshold amounts; the time-charter for the Toledo Spirit also provides for a reduction in revenues to us when spot tanker market rates are below threshold amounts); and |
• | an increase of $8.6 million from the Aframax Deliveries; |
• | a decrease of $3.3 million from lower charter rates earned on an in-chartered VLCC. |
• | an increase of $7.9 million from the ConocoPhillips acquisition; |
• | an increase of $4.6 million relating to higher crew manning and repairs, insurance, and maintenance and consumables; |
• | an increase of $3.8 million from the Product Tanker Transfers; |
• | an increase of $1.7 million due to full year operations in 2008 of the Suezmax tankers acquired in the OMI Acquisition; and |
• | an increase of $1.0 million due to the effect on our Euro-denominated vessel operating expenses (primarily crewing costs for five of our Suezmax tankers) from the strengthening of the Euro against the U.S. Dollar during such period compared to the same period in 2008. A majority of our vessel operating expenses for five of our Suezmax tankers 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); |
• | a decrease of $3.1 million from the 2008 Aframax Transfers. |
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• | an increase of $7.3 million from the ConocoPhillips acquisition. |
• | an increase of $5.6 million from the 2008 Aframax Transfers; and |
• | an increase of $4.9 million from the OMI Acquisition. |
• | an increase of $5.1 million from the OMI Acquisition; and |
• | an increase of $2.8 million from the Aframax Deliveries. |
Year ended December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2008 | 2007 | Change | |||||||||
Revenues | 1,616,663 | 1,040,258 | 55.4 | |||||||||
Voyage expenses | 580,770 | 406,921 | 42.7 | |||||||||
Net revenues | 1,035,893 | 633,337 | 63.6 | |||||||||
Vessel operating expenses | 134,969 | 81,813 | 65.0 | |||||||||
Time-charter hire expense | 434,975 | 279,676 | 55.5 | |||||||||
Depreciation and amortization | 106,921 | 74,094 | 44.3 | |||||||||
General and administrative expenses(1) | 88,898 | 95,962 | (7.4 | ) | ||||||||
Gain on sale of vessels and equipment, net of write-downs | (72,664 | ) | – | – | ||||||||
Restructuring charge | 2,359 | – | – | |||||||||
Income from vessel operations | 340,435 | 101,792 | 234.4 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 13,623 | 11,764 | 15.8 | |||||||||
Chartered-in vessels | 17,647 | 12,730 | 38.6 | |||||||||
Total | 31,270 | 24,494 | 27.7 | |||||||||
(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). |
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• | the acquisition of 15 owned and six chartered-in vessels from OMI Corporation on August 1, 2007 (collectively, theOMI Acquisition); |
• | the addition of two owned and two chartered-in Aframax tankers in January 2008 as part of the multi-vessel transaction with ConocoPhillips, in which we acquired ConocoPhillips’ rights in six double-hull Aframax tankers (collectively, theConocoPhillips Acquisition); |
• | the delivery of two new large product tankers in February and May 2007 (or the2007 Spot Tanker Deliveries); |
• | the delivery of three new Suezmax tankers between May and October 2008 (or the2008 Suezmax Deliveries); and |
• | a net increase in the number of chartered-in vessels, primarily Aframax and product tankers. |
Year ended | ||||||||||||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
revenues | Revenue | TCE | revenues | Revenue | TCE | |||||||||||||||||||
Vessel type | ($000’s) | days | rate $ | ($000’s) | days | rate $ | ||||||||||||||||||
Spot Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers(2) | 121,393 | 2,111 | 57,505 | 52,697 | 1,496 | 35,225 | ||||||||||||||||||
Aframax Tankers(2) | 609,150 | 15,072 | 40,416 | 342,989 | 11,681 | 29,363 | ||||||||||||||||||
Large/Medium Product Tankers(2) | 149,842 | 4,396 | 34,086 | 98,194 | 3,746 | 26,213 | ||||||||||||||||||
Small Product Tankers(2) | 44,008 | 3,172 | 13,874 | 51,811 | 3,596 | 14,408 | ||||||||||||||||||
Time-Charter Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers(2) | 85,674 | 2,762 | 31,019 | 47,584 | 1,666 | 28,562 | ||||||||||||||||||
Aframax Tankers(2) | 39,900 | 1,224 | 32,598 | 5,734 | 183 | 31,334 | ||||||||||||||||||
Large/Medium Product Tankers(2) | 52,892 | 1,971 | 26,835 | 42,482 | 1,638 | 25,935 | ||||||||||||||||||
Other(3) | (66,966 | ) | – | – | (8,154 | ) | – | – | ||||||||||||||||
Totals | 1,035,893 | 30,708 | 33,734 | 633,337 | 24,006 | 26,382 | ||||||||||||||||||
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(1) | Spot fleet includes short-term time-charters and fixed-rate contracts of affreightment of less than 1 year and gains and losses from FFAs less than 1 year; and time-charter fleet includes short-term time-charters and fixed-rate contracts of affreightment of between 1-3 years and gains and losses from STCs and FFAs of between 1-3 years. | |
(2) | Includes realized gains and losses from STCs and FFAs. | |
(3) | Includes broker commissions, the cost of spot in-charter vessels servicing fixed-rate contract of affreightment cargoes, unrealized gains and losses from STCs and FFAs, the amortization of in-process revenue contracts and cost of fuel while offhire. |
• | an increase of $207.8 million from an increase in our average TCE rate during 2008 compared to 2007; |
• | an increase of $147.4 million from the OMI Acquisition; |
• | an increase of $52.6 million from a net increase in the number of chartered-in vessels; |
• | an increase of $42.0 million from the ConocoPhillips Acquisition; |
• | an increase of $19.5 million from the 2007 Spot Tanker Deliveries and the 2008 Suezmax Deliveries; and |
• | an increase of $17.0 million from the transfer of two Aframax tankers from the fixed-rate tanker segment in January 2008; |
• | a decrease of $54.2 million from the effect of STCs and FFAs; |
• | a decrease of $13.6 million from an increase in the number of days our vessels were off-hire due to regularly scheduled maintenance; and |
• | a decrease of $5.0 million from the transfer of a Suezmax tanker to the offshore segment in May 2007 and the transfer of an Aframax tanker to the fixed-rate tanker segment in December 2007. |
• | an increase of $18.1 million from higher crew manning repairs, maintenance and consumables costs, insurance costs, port expenses, safety inspections and non-recurring damages; |
• | an increase of $17.2 million from the ConocoPhillips Acquisition; |
• | an increase of $10.1 million from the OMI Acquisition; |
• | an increase of $4.8 million from the transfer of two Aframax tankers from the fixed-rate segment in January 2008; and |
• | an increase of $4.3 million from the 2007 Spot Tanker Deliveries and the 2008 Suezmax Deliveries; |
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• | a decrease of $3.3 million from the transfer of a Suezmax tanker to the shuttle tanker and FSO segment in May 2007 and the transfer of an Aframax tanker to the fixed-rate tanker segment in December 2007. |
• | an increase of $89.9 million from an increase in the number of chartered-in tankers (excluding the OMI and ConocoPhillips vessels) compared to the same period in 2007; |
• | an increase of $2.6 million from an increase in the average in-charter rate; |
• | an increase of $39.8 million from the OMI Acquisition; |
• | an increase of $16.1 million from the ConocoPhillips Acquisition; and |
• | an increase of $6.9 million due to the sale and lease-back of three Aframax tankers during April and July 2007. |
• | an increase of $30.7 million from the OMI Acquisition; |
• | an increase of $6.3 million from the ConocoPhillips Acquisition; and |
• | an increase of $3.5 million from the 2007 Spot Tanker Deliveries and the 2008 Suezmax Deliveries; |
• | a decrease of $2.8 million from the sale and lease-back of three Aframax tankers during April and July 2007; and |
• | a decrease of $2.2 million from the transfer of a Suezmax tanker to the shuttle tanker and FSO segment in May 2007 and the transfer of an Aframax to the fixed-rate tanker segment during December 2007. |
• | a gain of $52.2 million from the sale of vessels; and |
• | a gain of $44.4 million from the sale of our 50% interest in the Swift Tanker Pool; |
• | a decrease of $23.9 million from the impairment write-down on two 1992-built Aframax tankers. |
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Year ended December 31, | % | |||||||||||
(in thousands of U.S. dollars, except percentages) | 2008 | 2007 | Change | |||||||||
General and administrative expenses | (244,522 | ) | (231,865 | ) | 5.5 | |||||||
Interest expense | (994,966 | ) | (422,433 | ) | 135.5 | |||||||
Interest income | 273,647 | 110,201 | 148.3 | |||||||||
Foreign exchange gain (loss) | 32,348 | (39,912 | ) | (181.0 | ) | |||||||
Equity loss from joint ventures | (36,085 | ) | (12,404 | ) | 190.9 | |||||||
Income tax recovery | 56,176 | 3,192 | 1,659.9 | |||||||||
Non-controlling interest expense | (9,561 | ) | (8,903 | ) | 7.4 | |||||||
Other (loss) income—net | (6,736 | ) | 23,677 | (128.4 | ) | |||||||
• | an increase of $26.5 million from the unrealized change in fair value of our foreign currency forward contracts; |
• | an increase of $16.7 million in compensation for shore-based employees and other personnel expenses, primarily due to increase in headcount and compensation levels partially offset by the strengthening of the U.S. Dollar compared to other major currencies; |
• | an increase of $10.3 million in corporate-related expenses, including costs associated with Teekay Tankers becoming a public entity in December 2007; and |
• | an increase of $3.8 million in fleet overhead from the timing of seafarer training initiatives and higher training activity in the liquefied gas segment; |
• | a decrease of $42.2 million relating to the costs associated with our equity-based compensation and long-term incentive program for management; and |
• | a decrease of $2.8 million in office expenses and travel costs due to business development and other project initiatives. |
• | an increase of $508.4 million relating to the unrealized change in fair value of our interest rate swaps and certain options to enter into interest rate swaps; |
• | an increase of $43.6 million due to additional debt drawn under long-term revolving credit facilities and term loans relating to the Shuttle Tanker Deliveries, the Aframax Deliveries, the Spot Tanker Deliveries and other investing activities; |
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• | an increase of $9.3 million relating to debt of Teekay Nakilat (III) used by the RasGas 3 Joint Venture to fund shipyard construction installment payments (this increase in interest expense from debt is offset by a corresponding increase in interest income from advances to the joint venture); and |
• | an increase of $0.6 million relating to debt from the delivery of theTangguh Hiri. |
• | an increase of $171.3 million relating to the unrealized change in fair value of our interest rate swaps; and |
• | an increase of $4.5 million relating to interest-bearing loans made by us to the RasGas 3 Joint Venture for shipyard construction installment payments; |
• | a decrease of $8.9 million resulting from the repayment of interest-bearing loans we made to a 50% joint venture between us and TORM, which were used during the second quarter of 2007, together with comparable loans made by TORM, to acquire 100% of the outstanding shares of OMI; and |
• | a decrease of $2.4 million relating to a decrease in restricted cash used to fund capital lease payments for the RasGas II Deliveries. |
• | an increase of $21.7 million from the initial public offering of Teekay Tankers in December 2007; and |
• | an increase of $3.0 million from the operating results of the RasGas II joint venture; |
• | a decrease of $14.6 million from a decrease in earnings from Teekay Offshore partially offset by the follow-on public offering of Teekay Offshore in June 2008; and |
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• | a decrease of $12.3 million from a decrease in earnings from Teekay LNG which was primarily the result of unrealized foreign exchange losses attributable to the revaluation of its Euro-denominated term loans partially offset by the follow-on public offering of Teekay LNG in April 2008. |
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2007 | 2006 | Change | |||||||||
Revenues | 642,047 | 572,392 | 12.2 | |||||||||
Voyage expenses | 117,571 | 89,642 | 31.2 | |||||||||
Net revenues | 524,476 | 482,750 | 8.6 | |||||||||
Vessel operating expenses | 127,372 | 90,798 | 40.3 | |||||||||
Time-charter hire expense | 160,993 | 170,308 | (5.5 | ) | ||||||||
Depreciation and amortization | 104,936 | 83,501 | 25.7 | |||||||||
General and administrative expense(1) | 60,234 | 46,220 | 30.3 | |||||||||
(Gain) loss on sale of vessels | (16,531 | ) | 698 | (2,468.3 | ) | |||||||
Income from vessel operations | 87,472 | 91,225 | (4.1 | ) | ||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 11,015 | 9,050 | 21.7 | |||||||||
Chartered-in vessels | 4,619 | 4,983 | (7.3 | ) | ||||||||
Total | 15,634 | 14,033 | 11.4 | |||||||||
(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). |
• | the consolidation of five 50%-owned subsidiaries, each of which owns one shuttle tanker, effective December 1, 2006 upon amendments of the applicable operating agreements, which granted us control of these entities, that were previously accounted for as joint ventures using the equity method (or theConsolidation of 50%-owned Subsidiaries); |
• | the transfer of theNavion Sagafrom the fixed-rate segment to the shuttle tanker and FSO segment in connection with the completion of its conversion to an FSO unit in May 2007; and |
• | the delivery of two new shuttle tankers, theNavion Bergenand theNavion Gothenburg, in April and July 2007, respectively (or theShuttle Tanker Deliveries); |
• | a decline in the number of chartered-in shuttle tankers; and |
• | the sale of one 1981-built shuttle tanker in July 2006 and one 1987-built shuttle tanker in May 2007 (theShuttle Tanker Dispositions). |
• | an increase of $40.8 million due to the Consolidation of 50%-owned Subsidiaries; |
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• | an increase of $23.0 million relating to the transfer of theNavion Sagato the shuttle tanker and FSO segment; |
• | an increase of $12.3 million due to the Shuttle Tanker Deliveries; and |
• | an increase of $3.6 million due to the renewal of certain vessels on time-charter contracts at higher daily rates during 2006; |
• | a decrease of $13.1 million in revenues due to (a) fewer revenue days for shuttle tankers servicing contracts of affreightment during 2007 due to a decline in oil production from mature oil fields in the North Sea and (b) the redeployment of idle shuttle tankers servicing contracts of affreightment in the conventional spot tanker market at a lower average charter rate during the fourth quarter of 2007 due to a weaker spot tanker market; and |
• | a decrease of $3.4 million due to the drydocking of the FSO unit theDampier Spiritduring the first half of 2007. |
• | an increase of $17.5 million from the Consolidation of 50%-owned Subsidiaries; |
• | an increase of $14.0 million in salaries for crew and officers primarily due to general wage escalations from the renegotiation of seafarer contracts, change in crew composition, a change in the crew rotation system and the weakening U.S. Dollar; |
• | an increase of $6.0 million relating to the transfer of theNavion Sagato the shuttle tanker and FSO segment; |
• | an increase of $3.4 million relating to an increase in services, non-recurring repairs and maintenance; and |
• | an increase of $0.2 million relating to the unrealized change in fair value of our foreign currency forward contracts; |
• | a decrease of $2.1 million relating to the Shuttle Tanker Dispositions. |
• | an increase of $13.7 million from the Consolidation of 50%-owned Subsidiaries; |
• | an increase of $6.6 million from the transfer of theNavion Sagato the shuttle tanker and FSO; and |
• | an increase of $3.8 million due to the Shuttle Tanker Deliveries; |
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• | a decrease of $4.0 million relating to the Shuttle Tanker Dispositions. |
• | a gain of $11.6 million from the sale of a 1987-built shuttle tanker and certain equipment during May 2007; and |
• | a gain of $4.9 million from the sale of a 50% interest in a 2007-built shuttle tanker during September 2007. |
Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2007 | 2006 | Change | |||||||||
Revenues | 350,279 | 95,455 | 267.0 | |||||||||
Vessel operating expenses | 156,264 | 36,158 | 332.2 | |||||||||
Depreciation and amortization | 68,047 | 22,360 | 204.3 | |||||||||
General and administrative expenses(1) | 36,927 | 10,549 | 250.1 | |||||||||
Income from vessel operations | 89,041 | 26,388 | 237.4 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 1,825 | 460 | 296.7 | |||||||||
(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). |
• | an increase of $125.3 million from the Teekay Petrojarl acquisition; |
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• | a decrease of $4.0 million relating to the unrealized change in fair value of our foreign currency forward contracts. |
Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2007 | 2006 | Change | |||||||||
Revenues | 166,981 | 104,489 | 59.8 | |||||||||
Voyage expenses | 109 | 975 | (88.8 | ) | ||||||||
Net revenues | 166,872 | 103,514 | 61.2 | |||||||||
Vessel operating expenses | 30,239 | 18,912 | 59.9 | |||||||||
Depreciation and amortization | 46,018 | 33,160 | 38.8 | |||||||||
General and administrative expenses(1) | 20,251 | 15,531 | 32.1 | |||||||||
Income from vessel operations | 70,094 | 35,911 | 95.2 | |||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels and vessels under capital lease | 2,899 | 1,887 | 53.6 | |||||||||
(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). |
• | the delivery of the three RasGas II LNG Carriers between October 2006 and February 2007, and |
• | our December 2007 acquisition of the two Kenai LNG Carriers. |
• | an increase of $59.8 million from the delivery of the RasGas II LNG Carriers; |
• | an increase of $6.8 million due to the effect on our Euro-denominated revenues from the strengthening of the Euro against the U.S. Dollar during 2007 compared to 2006; |
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• | a relative increase of $2.4 million due to theCatalunya Spiritbeing off-hire for 35.5 days during 2006 to complete repairs and for a scheduled drydock; and |
• | an increase of $2.0 million from the delivery of the Kenai LNG Carriers; |
• | a decrease of $5.8 million due to theMadrid Spiritbeing off-hire, as discussed above; and |
• | a decrease of $2.0 million relating to 30.8 days of off-hire for a scheduled drydocking for one of our LNG carriers during July 2007. |
• | an increase of $8.9 million from the delivery of the RasGas II LNG Carriers; |
• | an increase of $1.4 million due to the effect on our Euro-denominated vessel operating expenses (primarily crewing costs) from the strengthening of the Euro against the U.S. Dollar during such period compared to the same period 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); and |
• | an increase of $0.8 million for repair costs for theMadrid Spiritincurred during the second quarter of 2007 in excess of insurance recoveries; |
• | a relative decrease of $1.0 million relating to repair costs for theCatalunya Spirit incurred during the second quarter of 2006 in excess of insurance recoveries. |
• | an increase of $11.7 million from the delivery of the RasGas II LNG Carriers; |
• | an increase of $0.7 million relating to the amortization of drydock expenditures incurred during 2007; and |
• | an increase of $0.5 million from the delivery of the Kenai LNG Carriers. |
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2007 | 2006 | Change | |||||||||
Revenues | 195,942 | 181,605 | 7.9 | |||||||||
Voyage expenses | 2,707 | 1,999 | 35.4 | |||||||||
Net revenues | 193,235 | 179,606 | 7.6 | |||||||||
Vessel operating expenses | 51,458 | 44,083 | 16.7 | |||||||||
Time-charter hire expense | 25,812 | 16,869 | 53.0 | |||||||||
Depreciation and amortization | 36,018 | 32,741 | 10.0 | |||||||||
General and administrative expenses(1) | 18,221 | 15,843 | 15.0 | |||||||||
Income from vessel operations | 61,726 | 70,070 | (11.9 | ) | ||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 5,390 | 5,475 | (1.6 | ) | ||||||||
Chartered-in vessels | 1,312 | 728 | 80.2 | |||||||||
Total | 6,702 | 6,203 | 8.0 | |||||||||
(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). |
• | the acquisition of two Suezmax tankers as part of the OMI Acquisition on August 1, 2007; and |
• | the transfer of two in-chartered Aframax tankers from the spot tanker segment in July 2007 and October 2007, respectively, upon commencement of three-year time-charters (or the2007 Aframax Transfers). |
• | an increase of $9.3 million from the OMI Acquisition; |
• | an increase of $8.1 million from the 2007 Aframax Transfers; |
• | an increase of $1.4 million due to adjustments to the daily charter rate based on inflation and increases from rising interest rates in accordance with the time-charter contracts for five |
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Suezmax tankers. (However, under the terms of our capital leases for these tankers we had a corresponding increase in our lease payments, which is reflected as an increase to interest expense. Therefore, these and future interest rate adjustments do not and will not affect our cash flow or net income); and |
• | a relative increase of $0.3 million because one of our Suezmax tankers was off-hire for 15.8 days for a scheduled drydocking during 2006; |
• | a decrease of $5.5 million from reduced revenues earned by theTeide Spiritand theToledo Spirit(the time-charters for both these vessels provide for additional revenues to us beyond the fixed hire rate when spot tanker market rates exceed threshold amounts; the time-charter for theToledo Spiritalso provides for a reduction in revenues to us when spot tanker market rates are below threshold amounts). |
• | an increase of $4.1 million relating to higher crew manning and repairs, maintenance and consumables; |
• | an increase of $1.6 million due to the effect on our Euro-denominated vessel operating expenses (primarily crewing costs for five of our Suezmax tankers) from the strengthening of the Euro against the U.S. Dollar during such period compared to the same period last year. A majority of our vessel operating expenses on five of our Suezmax tankers 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); and |
• | an increase of $1.1 million from the OMI Acquisition. |
• | an increase of $4.7 million from the 2007 Aframax Transfers; |
• | an increase of $4.1 million from the OMI Acquisition; and |
• | an increase of $1.2 million due to the sale and lease-back of an Aframax tanker in July 2007. |
• | an increase of $3.4 million from the OMI Acquisition; and |
• | an increase of $1.2 million from an increase in amortization of drydocking costs; |
• | a decrease of $1.1 million due to the sale and lease-back of an Aframax tanker in July 2007. |
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2007 | 2006 | Change | |||||||||
Revenues | 1,040,258 | 1,059,796 | (1.8 | ) | ||||||||
Voyage expenses | 406,921 | 430,341 | (5.4 | ) | ||||||||
Net revenues | 633,337 | 629,455 | 0.6 | |||||||||
Vessel operating expenses | 81,813 | 58,088 | 40.8 | |||||||||
Time-charter hire expense | 279,676 | 214,991 | 30.1 | |||||||||
Depreciation and amortization | 74,094 | 52,203 | 41.9 | |||||||||
General and administrative expenses(1) | 95,962 | 93,357 | 2.8 | |||||||||
Gain on sale of vessels | – | (2,039 | ) | (100.0 | ) | |||||||
Restructuring charge | – | 8,929 | (100.0 | ) | ||||||||
Income from vessel operations | 101,792 | 203,926 | (50.1 | ) | ||||||||
Calendar-ship-days: | ||||||||||||
Owned vessels | 11,764 | 9,541 | 23.3 | |||||||||
Chartered-in vessels | 12,730 | 11,190 | 13.8 | |||||||||
Total | 24,494 | 20,731 | 18.2 | |||||||||
(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). |
• | the delivery of four new large product tankers between November 2006 and May 2007 (or theSpot Tanker Deliveries); |
• | the acquisition of twelve vessels from OMI Corporation on August 1, 2007 as part of the OMI Acquisition; and |
• | a net increase in the number of chartered-in vessels, primarily Suezmax and product tankers; |
• | the transfer of theNavion Sagato the shuttle tanker and FSO segment in connection with the completion of its conversion to an FSO unit in May 2007. |
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• | an increase of $71.0 million relating to the OMI Acquisition; |
• | an increase of $31.9 million relating to the Spot Tanker Deliveries; |
• | an increase of $11.6 million from the effect of STCs and FFAs; and |
• | an increase of $4.5 million from a net increase in the number of chartered-in vessels (excluding the effect of the sale and lease-back of two older Aframax tankers during April 2007 and the Aframax tanker during July 2007); |
• | a decrease of $100.4 million from a 15.1% decrease in our average TCE rate during 2007; |
• | a decrease of $6.5 million from the transfer of theNavion Sagato the offshore segment in May 2007; and |
• | a decrease of $5.7 million from an increase in the number of days our vessels were off-hire due to regularly scheduled maintenance. |
• | an increase of $12.7 million from the OMI Acquisition; |
• | an increase of $7.7 million from the Spot Tanker Deliveries; and |
• | an increase of $3.3 million relating to higher crew manning costs. |
• | an increase of $32.3 million from a net increase in the average TCE rate of our chartered-in fleet; |
• | an increase of $22.3 million from the OMI Acquisition; |
• | an increase of $7.5 million due to the sale and lease-back of the Aframax tankers during April and July 2007; and |
• | an increase of $4.1 million from an increase in the number of chartered-in tankers (excluding OMI vessels). |
• | an increase of $21.4 million from the OMI Acquisition; and |
• | an increase of $6.1 million from the Spot Tanker Deliveries; |
• | a decrease of $5.5 million from the sale and lease-back of the Aframax tankers during April and July 2007; and |
• | a decrease of $1.7 million from the transfer of theNavion Sagato the shuttle tanker and FSO segment. |
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Year ended | ||||||||||||||||||||||||
December 31, 2007 | December 31, 2006 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
revenues | Revenue | TCE | revenues | Revenue | TCE | |||||||||||||||||||
Vessel type | ($000’s) | days | rate $ | ($000’s) | days | rate $ | ||||||||||||||||||
Spot fleet(1) | ||||||||||||||||||||||||
Suezmax tankers(2) | 52,697 | 1,496 | 35,225 | 56,981 | 1,639 | 34,766 | ||||||||||||||||||
Aframax tankers(2) | 342,989 | 11,681 | 29,363 | 398,522 | 10,946 | 36,408 | ||||||||||||||||||
Large/medium product tankers(2) | 98,194 | 3,746 | 26,213 | 96,782 | 3,488 | 27,747 | ||||||||||||||||||
Small product tankers(2) | 51,811 | 3,596 | 14,408 | 58,530 | 3,782 | 15,476 | ||||||||||||||||||
Time-charter fleet(1) | ||||||||||||||||||||||||
Suezmax tankers(2) | 47,584 | 1,666 | 28,562 | – | – | – | ||||||||||||||||||
Aframax tankers(2) | 5,734 | 183 | 31,334 | 19,134 | 729 | 26,247 | ||||||||||||||||||
Large/medium product tankers(2) | 42,482 | 1,638 | 25,935 | – | – | – | ||||||||||||||||||
Other(3) | (8,154 | ) | – | – | (494 | ) | – | – | ||||||||||||||||
Totals | 633,337 | 24,006 | 26,382 | 629,455 | 20,584 | 30,580 | ||||||||||||||||||
(1) | Spot fleet includes short-term time-charters and fixed-rate contracts of affreightment of less than 1 year and gains and losses from forward freight agreements (FFAs) less than 1 year; and time-charter fleet includes short-term time-charters and fixed-rate contracts of affreightment of between 1-3 years and gains and losses from STCs and FFAs of between 1-3 years. | |
(2) | Includes realized gains and losses from STCs and FFAs. | |
(3) | Includes broker commissions, the cost of spot in-charter vessels servicing fixed-rate contract of affreightment cargoes, unrealized gains and losses from STCs and FFAs, the amortization of in-process revenue contracts and cost of fuel while offhire. |
• | an increase of $71.0 million relating to the OMI Acquisition; |
• | an increase of $31.9 million relating to the Spot Tanker Deliveries; |
• | an increase of $11.6 million from the effect of STCs and FFAs; and |
• | an increase of $4.5 million from a net increase in the number of chartered-in vessels (excluding the effect of the sale and lease-back of two older Aframax tankers during April 2007 and the Aframax tanker during July 2007) compared to 2006; |
• | a decrease of $100.4 million from a 15.1% decrease in our average TCE rate during 2007 compared to 2006; |
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• | a decrease of $6.5 million from the transfer of theNavion Sagato the offshore segment in May 2007; and |
• | a decrease of $5.7 million from an increase in the number of days our vessels were off-hire due to regularly scheduled maintenance. |
• | an increase of $12.7 million from the OMI Acquisition; |
• | an increase of $7.7 million from the Spot Tanker Deliveries; and |
• | an increase of $3.3 million relating to higher crew manning costs. |
• | an increase of $32.3 million from a net increase in the average TCE rate of our chartered-in fleet; |
• | an increase of $22.3 million from the OMI Acquisition; |
• | an increase of $7.5 million due to the sale and lease-back of the Aframax tankers during April and July 2007; and |
• | an increase of $4.1 million from an increase in the number of chartered-in tankers (excluding OMI vessels) compared to 2006. |
• | an increase of $21.4 million from the OMI Acquisition; and |
• | an increase of $6.1 million from the Spot Tanker Deliveries; |
• | a decrease of $5.5 million from the sale and lease-back of the Aframax tankers during April and July 2007; and |
• | a decrease of $1.7 million from the transfer of theNavion Sagato the offshore segment. |
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Year ended | ||||||||||||
December 31, | % | |||||||||||
(in thousands of U.S. dollars, except percentages) | 2007 | 2006 | Change | |||||||||
General and administrative expenses | (231,865 | ) | (181,500 | ) | 27.7 | |||||||
Interest expense | (422,433 | ) | (100,089 | ) | 322.1 | |||||||
Interest income | 110,201 | 31,714 | 247.5 | |||||||||
Foreign exchange loss | (39,912 | ) | (50,416 | ) | (20.8 | ) | ||||||
Equity (loss) income from joint ventures | (12,404 | ) | 6,099 | (303.4 | ) | |||||||
Income tax recovery (expense) | 3,192 | (8,811 | ) | (136.2 | ) | |||||||
Non-controlling interest expense | (8,903 | ) | (6,759 | ) | 31.7 | |||||||
Other—net | 23,677 | 3,566 | 564.0 | |||||||||
• | an increase of $26.0 million from our acquisition of Teekay Petrojarl in October 2006; |
• | an increase of $20.7 million from an increase in shore-based compensation and other personnel expenses, primarily due to weakening of the U.S. Dollar compared to other major currencies and increases in headcount and compensation levels; |
• | an increase of $6.7 million from an increase in corporate-related expenses, including costs associated with Teekay Tankers and Teekay Offshore becoming public entities in December 2007 and 2006, respectively; |
• | an increase of $5.8 million from higher travel costs, due to the integration of OMI and Teekay Petrojarl, and an increase in costs due to the weakening of the U.S. Dollar compared to other major currencies, and |
• | an increase of $4.3 million from an increase in crew training expenses, due to integration of new seafarers and LNG training initiatives; |
• | a decrease of $5.6 million relating to the unrealized change in fair value of our non-designated foreign currency forward contracts; |
• | a relative decrease of $6.7 million during 2007 relating to the costs associated with our equity-based compensation and long-term incentive program for management; and |
• | a relative decrease of $2.1 million during 2007 from severance costs recorded in 2006. |
• | an increase of $205.3 million relating to the unrealized change in fair value of our non-designated interest rate swaps; |
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• | an increase of $36.5 million resulting from interest incurred from financing our acquisition of Teekay Petrojarl and interest incurred on debt we assumed from Teekay Petrojarl; |
• | an increase of $33.3 million relating to the increase in capital lease obligations and term loans in connection with the delivery of the RasGas II LNG Carriers; |
• | an increase of $31.6 million relating to the increase in debt used to finance our acquisition of 50% of OMI Corporation; |
• | an increase of $26.7 million relating to additional debt of Teekay Nakilat (III) used by the RasGas 3 Joint Venture to fund shipyard construction installment payments (this increase in interest expense from debt is offset by a corresponding increase in interest income from advances to joint venture); and |
• | an increase of $11.3 million relating to the Consolidation of 50%-owned Subsidiaries; |
• | a decrease of $6.2 million from scheduled capital lease repayments on two of our LNG carriers. |
• | an increase of $36.7 million relating to the unrealized change in fair value of our non-designated interest rate swaps; |
• | an increase of $26.8 million relating to interest-bearing loans made by us to the RasGas 3 Joint Venture for shipyard construction installment payments; |
• | an increase of $11.1 million resulting from $1.1 billion of interest-bearing loans we made to Omaha Inc., a 50% joint venture between us and TORM, which were used, together with comparable loans made by TORM, to acquire 100% of the outstanding shares of OMI Corporation in June 2007; |
• | an increase of $6.9 million relating to additional restricted cash deposits that will be used to pay for lease payments on the three RasGas II LNG Carriers; and |
• | an increase of $2.7 million from the interest we earned on cash we assumed as part of the Teekay Petrojarl acquisition; |
• | a decrease of $7.3 million resulting from scheduled capital lease repayments on two of our LNG carriers that were funded from restricted cash deposits. |
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• | an increase of $2.7 million resulting from the Consolidation of 50%-owned Subsidiaries; and |
• | an increase of $1.2 million from the initial public offering of Teekay Tankers in December 2007; |
• | a decrease of $3.5 million from a minority owner’s share of a gain on the disposal of a vessel in July 2006. |
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Nine months ended | ||||||||||||||||||||
September 30, | Year ended December 31, | |||||||||||||||||||
(in thousands of U.S. dollars) | 2009 | 2008 | 2008 | 2007 | 2006 | |||||||||||||||
Net operating cash flows | 298,300 | 317,315 | 431,847 | 255,018 | 520,785 | |||||||||||||||
Net financing cash flows | (400,743 | ) | 945,798 | 767,878 | 2,114,199 | 299,256 | ||||||||||||||
Net investing cash flows | (216,320 | ) | (830,173 | ) | (828,233 | ) | (2,270,458 | ) | (713,111 | ) | ||||||||||
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• | incurred capital expenditures for vessels and equipment of $431.6 million, primarily for acquisition of one product tanker and shipyard construction installment payments on our newbuilding Suezmax tankers, shuttle tankers, LNG carriers and LPG carriers; |
• | 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. |
• | incurred capital expenditures for vessels and equipment of $620.1 million, primarily for shipyard construction installment payments on our newbuilding Suezmax tankers, Aframax tankers, shuttle tankers and LNG carriers and for costs to convert a conventional tanker to an FPSO unit; |
• | acquired an additional 35.3% interest in Teekay Petrojarl for a total cost of $304.9 million; |
• | loaned $211.5 million to the RasGas 3 Joint Venture for shipyard construction installment payments; |
• | acquired two Aframax tankers for a total cost of approximately $72.5 million as part of the multi-vessel transaction with ConocoPhillips; |
• | acquired a shuttle tanker for a total cost of $41.7 million; |
• | sold our 50% interest in Swift Tankers Management AS, which included our intermediate vessel positions within the Swift Tanker pool for proceeds of $44.4 million; and |
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• | received proceeds of $331.6 million from the sale of three Handysize product tankers, one Aframax product tanker, one medium-range product tanker and one Suezmax tanker. |
• | acquired 50% of OMI Corporation for a total cost of approximately $1.1 billion; |
• | incurred capital expenditures for vessels and equipment of $680.7 million, primarily for shipyard construction installment payments on our Suezmax tankers, Aframax tankers and shuttle tankers and for costs to convert two of our conventional tankers to shuttle tankers and one conventional tanker to an FPSO unit; |
• | acquired the two Kenai LNG Carriers for a total cost of approximately $229.6 million from a joint venture between Marathon Oil Corporation and ConocoPhillips; |
• | loaned $461.3 million to the RasGas 3 Joint Venture for shipyard construction installment payments; and |
• | received proceeds of $214.8 million from the sale of six vessels. |
Remainder | 2010 and | 2012 and | Beyond | |||||||||||||||||
(in millions of U.S. Dollars) | Total | of 2009 | 2011 | 2013 | 2013 | |||||||||||||||
U.S. Dollar-Denominated Obligations: | ||||||||||||||||||||
Long-term debt(1)(2) | 4,094.0 | 32.9 | 831.4 | 518.4 | 2,711.3 | |||||||||||||||
Chartered-in vessels (operating leases) | 696.6 | 78.8 | 423.7 | 146.9 | 47.2 | |||||||||||||||
Commitments under capital leases(3) | 227.6 | 6.0 | 221.6 | – | – | |||||||||||||||
Commitments under capital leases(4) | 1,055.1 | 6.0 | 48.0 | 48.0 | 953.1 | |||||||||||||||
Commitments under operating leases(5) | 489.0 | 6.3 | 50.1 | 50.1 | 382.5 | |||||||||||||||
Newbuilding installments(6) | 510.3 | 42.5 | 467.8 | – | – | |||||||||||||||
Asset retirement obligation | 22.0 | – | – | – | 22.0 | |||||||||||||||
Total U.S. Dollar-denominated obligations | 7,094.6 | 172.5 | 2,042.6 | 763.4 | 4,116.1 | |||||||||||||||
Euro-Denominated Obligations:(7) | ||||||||||||||||||||
Long-term debt(8) | 424.8 | 3.2 | 245.8 | 15.4 | 160.4 | |||||||||||||||
Commitments under capital leases(3)(9) | 171.8 | 37.5 | 134.3 | – | – | |||||||||||||||
Total Euro-denominated obligations | 596.6 | 40.7 | 380.1 | 15.4 | 160.4 | |||||||||||||||
Total(2) | 7,691.2 | 213.2 | 2,422.7 | 778.8 | 4,276.5 | |||||||||||||||
(1) | Excludes expected interest payments of $20.8 million (balance of 2009), $147.7 million (2010 and 2011), $95.0 million (2012 and 2013) and $125.6 million (beyond 2013). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR plus margins that ranged up to 3.25% at September 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. | |
(2) | Giving effect to this offering and the application of the estimated net proceeds as if this offering had occurred on September 30, 2009 and assuming all of our outstanding 8.875% Senior Notes are purchased in the Tender Offer, our (a) U.S. |
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Dollar-denominated long-term debt scheduled for repayment during (i) 2010 and 2011 and (ii) beyond 2013 would have been $1.7 billion and $4.5 billion, respectively, and (b) total debt scheduled for payment during such period would have been $2.1 billion and $4.6 billion, respectively. Please read “Use of proceeds.” | ||
(3) | 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 in 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 $31.7 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. | |
(4) | Existing restricted cash deposits of $480.4 million, together with the interest earned on the deposits, will be sufficient to repay the remaining amounts we currently owe under the lease arrangements. | |
(5) | We have corresponding leases whereby we are the lessor and expect to receive $455 million for these leases from the remainder of 2009 to 2029. | |
(6) | Represents remaining construction costs (excluding capitalized interest and miscellaneous construction costs) for four shuttle tankers, one Suezmax tanker, and four LPG carriers. | |
(7) | Euro-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of September 30, 2009. | |
(8) | Excludes expected interest payments of $2.0 million (balance of 2009), $10.1 million (2010 and 2011), $4.9 million (2012 and 2013) and $15.3 million (beyond 2013). Expected interest payments are based on EURIBOR at September 30, 2009, plus margins that ranged up to 0.66%, as well as the prevailing U.S. Dollar/Euro exchange rate as of September 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. | |
(9) | Existing restricted cash deposits of $159.1 million, together with the interest earned on the deposits, are expected to equal the remaining amounts we owe under the lease arrangement, including our obligation to purchase the vessel at the end of the lease term. |
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Expected maturity date | ||||||||||||||||||||
Remainder | Total | |||||||||||||||||||
of 2009 | 2010 | 2011 | Total | fair value(1) | ||||||||||||||||
contract | contract | contract | contract | asset | ||||||||||||||||
amount(1) | amount(1) | amount(1) | amount(1) | (liability) | ||||||||||||||||
Norwegian Kroner: | $ | 46.8 | $ | 139.5 | $ | 9.6 | $ | 195.9 | $ | 9.7 | ||||||||||
Average contractual exchange rate(2) | 5.78 | 6.21 | 6.20 | 6.11 | ||||||||||||||||
Euro: | $ | 16.9 | $ | 36.8 | $ | 2.3 | $ | 56.0 | $ | 0.5 | ||||||||||
Average contractual exchange rate(2) | 0.66 | 0.70 | 0.73 | 0.69 | ||||||||||||||||
Canadian Dollar: | $ | 14.5 | $ | 45.3 | – | $ | 59.8 | $ | 1.0 | |||||||||||
Average contractual exchange rate(2) | 1.06 | 1.10 | – | 1.09 | ||||||||||||||||
British Pound: | $ | 15.4 | $ | 34.3 | $ | 1.8 | $ | 51.5 | $ | (2.7 | ) | |||||||||
Average contractual exchange rate(2) | 0.54 | 0.61 | 0.63 | 0.59 | ||||||||||||||||
Australian Dollar: | $ | 0.3 | – | – | $ | 0.3 | – | |||||||||||||
Average contractual exchange rate(2) | 1.13 | – | – | 1.13 | ||||||||||||||||
Singapore Dollar: | $ | 1.6 | – | – | $ | 1.6 | – | |||||||||||||
Average contractual exchange rate(2) | 1.41 | – | – | 1.41 | ||||||||||||||||
(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/ | |||||||||||||||||||||||||||||||||||
(in millions, except percentages) | of 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | (liability) | Rate(1) | |||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||||||||||
Variable rate ($U.S.)(2) | 20.5 | 317.6 | 225.8 | 206.6 | 216.4 | 2,405.8 | 3,392.7 | (3,023.7 | ) | 1.2% | ||||||||||||||||||||||||||
Variable rate (Euro)(3)(4) | 3.2 | 13.3 | 232.5 | 7.5 | 8.0 | 160.3 | 424.8 | (367.2 | ) | 1.5% | ||||||||||||||||||||||||||
Fixed-rate debt ($U.S.) | 12.4 | 46.7 | 241.7 | 47.6 | 47.6 | 305.2 | 701.2 | (669.8 | ) | 6.2% | ||||||||||||||||||||||||||
Average interest rate | 5.2% | 5.1% | 8.0% | 5.2% | 5.2% | 5.2% | 6.2% | |||||||||||||||||||||||||||||
Capital lease obligations:(5)(6) | ||||||||||||||||||||||||||||||||||||
Fixed-rate ($U.S.)(7) | 2.3 | 9.6 | 185.5 | – | – | – | 197.4 | (197.4 | ) | 7.4% | ||||||||||||||||||||||||||
Average interest Rate(8) | 7.5% | 7.5% | 7.4% | – | – | – | 7.4% | |||||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||||||||||||
Contract amount ($U.S.)(6)(9)(10) | 349.8 | 279.3 | 170.3 | 276.3 | 82.5 | 2,738.6 | 3,896.8 | (422.3 | ) | 4.8% | ||||||||||||||||||||||||||
Average fixed pay rate(2) | 4.9% | 4.3% | 3.5% | 3.1% | 4.9% | 5.1% | 4.8% | |||||||||||||||||||||||||||||
Contract amount (Euro)(4)(9) | 3.2 | 13.3 | 232.5 | 7.4 | 8.0 | 160.4 | 424.8 | (14.3 | ) | 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 September 30, 2009 ranged from 0.3% to 3.25%. |
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(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 September 30, 2009. | |
(5) | Excludes capital lease obligations (present value of minimum lease payments) of 107.2 million Euros ($156.9 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 September 30, 2009, this amount was 108.6 million Euros ($159.1 million). Consequently, we are not subject to interest rate risk from these obligations or deposits. | |
(6) | Under the terms of the capital leases for three LNG carriers, 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 September 30, 2009 totaled $480.4 million, and the lease obligations, which as at September 30, 2009 totaled $470.1 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 September 30, 2009, the contract amount, fair value and fixed interest rates of these interest rate swaps related to the capital lease obligations and restricted cash deposits for the three LNG carriers were $460.5 million and $474.6 million, $(62.1) million and $76.4 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. | |
(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 the1-month LIBOR or EURIBOR, quarterly at the3-month LIBOR or semi-annually at the6-month LIBOR. | |
(10) | Includes interest rate swaps of $300.0 million and $200.0 million that have commencement dates of 2010 and 2011, respectively. |
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• | Our entry into the LNG and LPG shipping sectors and into the offshore oil production, storage and transportation sectors; |
• | The reorganization of certain of our assets through our formation of threepublicly-traded subsidiaries, which are focused on growing specific core operating segments and have expanded our investor base and access to the capital markets; and |
• | Expansion of our fixed-rate businesses. For the 12 months ended September 30, 2009, net revenues from fixed-rate contracts with an initial term of at least three years represented 69% of our total net revenues, compared to 41% of total net revenues in 2003. For the 12 months |
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ended September 30, 2009, net revenues from fixed-rate contracts with an initial term of at least one year represented approximately 75% of our total net revenues. As of December 31, 2009, we had under contract a total of approximately $11.5 billion of forward, fixed-rate revenue, with a weighted-average remaining term of approximately 10.3 years (excluding options to extend). |
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(1) | The partnership is controlled by its general partner. Teekay Corporation indirectly owns a 100% beneficial ownership in the general partner. However, in certain limited cases, approval of a majority of the unitholders of the partnership is required to approve certain actions. | |
(2) | Teekay Tankers has two classes of shares: Class A common stock and Class B common stock. Teekay Corporation indirectly owns 100% of the Class B shares which have five votes each but aggregate voting power capped at 49%. As a result of Teekay Corporation’s ownership of Class A and Class B shares, it currently holds aggregate voting power of 51.6%. | |
(3) | Includes 48 vessels owned by Teekay Offshore Operating L.P. |
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Number of vessels | ||||||||||||||||
Owned | Chartered-in | |||||||||||||||
Teekay Corporation fleet list | vessels | vessels | Newbuildings | Total | ||||||||||||
Teekay Parent fleet(1) | ||||||||||||||||
Aframax tankers(2) | 6 | 16 | 22 | |||||||||||||
Suezmax tankers(3) | 13 | 6 | 19 | |||||||||||||
VLCC tankers | 1 | 1 | ||||||||||||||
Product tankers | 8 | 2 | 10 | |||||||||||||
LNG carriers(4) | 4 | 4 | ||||||||||||||
Shuttle tankers | 4 | 4 | ||||||||||||||
FPSO units(5) | 4 | 4 | ||||||||||||||
FSO units(5) | 1 | 1 | ||||||||||||||
Total Teekay Parent fleet | 32 | (10) | 25 | 8 | 65 | |||||||||||
Teekay Offshore fleet | ||||||||||||||||
Shuttle tankers(6) | 27 | 8 | 35 | |||||||||||||
FSO units(7) | 5 | 5 | ||||||||||||||
FPSO unit | 1 | 1 | ||||||||||||||
Aframax tankers(8) | 11 | 11 | ||||||||||||||
Total Teekay Offshore fleet | 44 | 8 | 52 | |||||||||||||
Teekay LNG fleet | ||||||||||||||||
LNG carriers(9) | 15 | 15 | ||||||||||||||
LPG carriers | 3 | 3 | 6 | |||||||||||||
Suezmax tankers | 8 | 8 | ||||||||||||||
Total Teekay LNG fleet | 26 | 3 | 29 | |||||||||||||
Teekay Tankers fleet | ||||||||||||||||
Aframax tankers | 9 | 9 | ||||||||||||||
Suezmax tankers | 3 | 3 | ||||||||||||||
Total Teekay tankers fleet | 12 | 12 | ||||||||||||||
Total Teekay consolidated fleet | 114 | (10) | 33 | 11 | 158 | |||||||||||
(1) | Excludes the fleet of Teekay Offshore Operating L.P. (orOPCO), which is owned 51% by Teekay Offshore and 49% by Teekay Parent. All of OPCO’s 48 vessels are included within the Teekay Offshore fleet. | |
(2) | Excludes nine vessels chartered-in from Teekay Offshore and one vessel chartered-in from Teekay Tankers. | |
(3) | Includes one Suezmax tanker Teekay Parent has agreed to offer to Teekay Tankers by June 18, 2010. |
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(4) | Excludes two LNG carriers chartered-in from Teekay LNG. Includes four LNG newbuildings on order in which Teekay Parent’s ownership interest is 33%. Teekay Parent has agreed to offer to Teekay LNG its interest in these four vessels and related charter contracts no later than 180 days before the scheduled delivery dates of the vessels, which are between August 2011 and January 2012. | |
(5) | Teekay Parent has agreed to offer to Teekay Offshore any of FPSO and FSO units that service contracts in excess of three years in duration. | |
(6) | Includes two shuttle tankers owned directly by Teekay Offshore, including one vessel in which its ownership is 50%. Includes 25 shuttle tankers owned by OPCO (including five vessels in which OPCO’s ownership is 50%) and eight vessels chartered-in by OPCO. | |
(7) | Includes one FSO unit owned directly by Teekay Offshore and four units owned by OPCO, including one FSO unit in which OPCO’s ownership is 89%. | |
(8) | All these vessels are owned by OPCO. Includes two lightering vessels. | |
(9) | Includes five LNG carriers in which Teekay LNG’s ownership is 70% and four LNG carriers in which its ownership is 40%. | |
(10) | Based on our most recent vessel valuations and current sale and purchase market conditions, we estimate that the fair market values of our owned fleet and of Teekay Parent’s owned fleet, on a charter-free basis, are approximately $7.2 billion and $2.5 billion, respectively. |
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World inter-regional natural gas trade |
Global natural gas demand |
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(as of November 2009)
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• | higher than expected delivery delays, which is particularly relevant for the Suezmax sector where deliveries in 2009 totaled 7.1 mdwt compared to 10.9 expected at the beginning of the year; |
• | a well-enforced single-hull tanker phase-out; and |
• | potential tanker newbuilding order cancellations, particularly as tanker deliveries scheduled for 2010 and 2011 are the most expensive units currently on order. |
• | The Teekay Navion Shuttle Tankers and Offshore and Teekay Petrojarl business units provide marine transportation, processing and storage services to the offshore oil industry, including shuttle tanker, FSO and FPSO services. Our expertise and partnerships with third parties allow us to create solutions for customers producing crude oil from offshore installations. |
• | The Teekay Gas Services business unit provides gas transportation services, primarily under long-term fixed-rate contracts to major energy and utility companies. These services currently include the transportation of LNG and LPG. |
• | The Teekay Tanker Services business unit is responsible for the commercial management of our conventional crude oil and product tanker transportation services. We offer a full range of shipping solutions through our worldwide network of commercial offices. |
• | offloading and transportation of cargo from oil field installations to onshore terminals by means of dynamically positioned, offshore loading shuttle tankers; |
• | floating storage for oil field installations using FSO units; and |
• | floating production, processing and storage services using FPSO units. |
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• | vessel maintenance (including repairs and drydocking) and certification; |
• | crewing by competent seafarers; |
• | procurement of stores, bunkers and spare parts; |
• | management of emergencies and incidents; |
• | supervision of shipyard and projects during new-building and conversions; |
• | insurance; and |
• | financial management services. |
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• | adherence to our operating standards; |
• | the structural integrity of the vessel is being maintained; |
• | machinery and equipment is being maintained to give full reliability in service; |
• | we are optimizing performance in terms of speed and fuel consumption; and |
• | the vessel’s appearance will support our brand and meet customer expectations. |
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• | is the subject of a contract for a major conversion or original construction on or after July 6, 1993; |
• | commences a major conversion or has its keel laid on or after January 6, 1994; or |
• | completes a major conversion or is a newbuilding delivered on or after July 6, 1996. |
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• | natural resources damages and the related assessment costs; |
• | real and personal property damages; |
• | net loss of taxes, royalties, rents, fees and other lost revenues; |
• | lost profits or impairment of earning capacity due to property or natural resources damage; |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and |
• | loss of subsistence use of natural resources. |
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• | address a “worst case” scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”; |
• | describe crew training and drills; and |
• | identify a qualified individual with full authority to implement removal actions. |
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Name | Age | Position | ||||
C. Sean Day | 60 | Director and Chairman of the Board | ||||
Bjorn Moller | 52 | Director, President and Chief Executive Officer | ||||
Axel Karlshoej | 69 | Director and Chair Emeritus | ||||
Dr. Ian D. Blackburne | 63 | Director | ||||
James R. Clark | 59 | Director | ||||
Peter S. Janson | 62 | Director | ||||
Thomas Kuo-Yuen Hsu | 63 | Director | ||||
Eileen A. Mercier | 62 | Director | ||||
Tore I. Sandvold | 62 | Director | ||||
Arthur Bensler | 52 | EVP, Secretary and General Counsel | ||||
Bruce Chan | 37 | President, Teekay Tanker Services, a division of Teekay | ||||
Peter Evensen | 51 | EVP and Chief Strategy Officer | ||||
David Glendinning | 55 | President, Teekay Gas Services and Offshore, a division of Teekay | ||||
Kenneth Hvid | 41 | President, Teekay Navion Shuttle Tankers and Offshore, a division of Teekay | ||||
Vincent Lok | 41 | EVP and Chief Financial Officer | ||||
Peter Lytzen | 52 | President, Teekay Petrojarl ASA, a subsidiary of Teekay | ||||
Lois Nahirney | 46 | EVP, Corporate Resources | ||||
Graham Westgarth | 55 | President, Teekay Marine Services, a division of Teekay | ||||
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• | first, 98% to the common unitholders,pro rata, and 2% to the general partner, until Teekay Offshore or Teekay LNG, as applicable, distributes for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter; |
• | second, 98% to the common unitholders,pro rata, and 2% to the general partner, until Teekay Offshore or Teekay LNG, as applicable, distributes for each outstanding common unit an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for any prior quarters during the subordination period; |
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• | third, 98% to the subordinated unitholders,pro rata, and 2% to the general partner, until Teekay Offshore or Teekay LNG, as applicable, distributes for each subordinated unit an amount equal to the minimum quarterly distribution for that quarter; and |
• | thereafter, in the manner described in “—Incentive distribution rights” below. |
• | distributions of available cash from “operating surplus” on each of the outstanding common units and subordinated units equaled or exceeded the minimum quarterly distribution for each of the three, consecutive, non-overlapping four-quarter periods immediately preceding that date; |
• | the “adjusted operating surplus” generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date equaled or exceeded the sum of the minimum quarterly distributions on all of the outstanding common units and subordinated units during those periods on a fully diluted basis and the related distribution on the 2% general partner interest during those periods; and |
• | there are no arrearages in payment of the minimum quarterly distribution on the common units. |
• | first, 98% to the common unitholders,pro rata, and 2% to the general partner, until Teekay Offshore or Teekay LNG, as applicable, distributes for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter; and |
• | thereafter, in the manner described in “—Incentive distribution rights” below. |
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• | Teekay Offshore or Teekay LNG has distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and |
• | Teekay Offshore or Teekay LNG has distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution; |
• | first, 98% to all unitholders,pro rata, and 2% to the general partner, until each unitholder has received a total of $0.4025 (Teekay Offshore) or $0.4625 (Teekay LNG) per unit for that quarter; |
• | second, 85% to all unitholders, and 15% to the general partner, until each unitholder has received a total of $0.4375 (Teekay Offshore) or $0.5375 (Teekay LNG) per unit for that quarter; |
• | third, 75% to all unitholders, and 25% to the general partner, until each unitholder has received a total of $0.525 (Teekay Offshore) or $0.65 (Teekay LNG) per unit for that quarter; and |
• | thereafter, 50% to all unitholders and 50% to the general partner. |
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• | To sell to Teekay LNG a 33% interest in the Angola LNG Project. |
• | To sell to Teekay LNG for a total cost of approximately $94 million two technically advanced 12,000-cubic meter multi-gas newbuildings capable of carrying LNG, LPG or ethylene. This sale will occur upon delivery and purchase by Teekay of these vessels, which is scheduled for the second half of 2010. Upon delivery, each vessel will commence service under15-year fixed-rate charters to I.M. Skaugen ASA. |
• | To sell to Teekay Offshore existing FPSO units of Teekay Petrojarl that were servicing contracts in excess of three years in length as of July 9, 2008, the date on which Teekay Corporation acquired 100% of Teekay Petrojarl. Teekay Offshore, at its election, may acquire these units at any time until July 9, 2010. The purchase price for any such existing FPSO units would be its fair market value plus any additional tax or other similar costs to Teekay Petrojarl that would be required to transfer the offshore vessels to Teekay Offshore. |
• | To offer to Teekay Tankers a Suezmax tanker prior to June 18, 2010. The purchase price for the vessel would be its fair market value at the time of offer, taking into account any existing charter contracts and based on independent ship broker valuations. |
• | Nine of OPCO’s conventional tankers are chartered out to Teekay subsidiaries under long-term time charters. Two of OPCO’s shuttle tankers are chartered out to Teekay subsidiaries under long-term bareboat charters. Pursuant to these charter contracts, OPCO earned voyage revenues of $85.3 million for the nine months ended September 30, 2009, and $25.9 million, $142.6 million and $159.3 million, respectively, for 2006 (following Teekay Offshore’s initial public offering in December 2006), 2007 and 2008. |
• | From December 2008 to June 2009, OPCO entered into a bareboat charter contract to in-charter one shuttle tanker from a subsidiary Teekay. Pursuant to the charter contract, OPCO |
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incurred time-charter hire expenses of $3.4 million for the nine months ended September 30, 2009. |
• | During 2009, two of OPCO’s shuttle tankers were employed on single-voyage charters with a subsidiary of Teekay. Pursuant to these charter contracts, OPCO earned voyage revenues of $11.3 million, respectively, for the nine months ended September 30, 2009. |
• | From August 2008, Teekay has been chartering in from Teekay Tankers the tanker Nassau Spirit under a fixed-rate time charter currently scheduled to expire in August 2010. Teekay Tankers earned revenues of $10.4 million during the nine months ended September 30, 2009, and $4.9 million for 2008 under this time-charter contract. |
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• | pay dividends; |
• | incur or guarantee indebtedness; |
• | change our ownership or structure, including through mergers, consolidations, liquidations and dissolutions; |
• | grant liens on our assets; |
• | sell, transfer, assign or convey our assets; |
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• | make certain investments; and |
• | enter into a new line of business. |
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• | are general unsecured obligations of Teekay; |
• | rank equally and ratably in right of payment with all existing and future unsecured senior debt of Teekay; |
• | are senior in right of payment to all existing and future subordinated debt of Teekay; |
• | are effectively subordinated to all of Teekay’s secured debt to the extent of the collateral securing such debt; and |
• | are effectively subordinated to all existing and future debt and other liabilities and commitments of Teekay’s subsidiaries because Teekay is a holding company and the notes will not be guaranteed by any of its subsidiaries. |
• | $450 million would be direct obligations of Teekay Corporation, none of which are secured by assets of Teekay Corporation or guaranteed by Teekay subsidiaries; and |
• | $4.8 billion would be direct obligations of Teekay subsidiaries (including obligations under capital leases secured by $627 million of restricted cash deposits) |
• | none of which are secured by assets of Teekay Corporation; |
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• | all of which are secured by assets of Teekay subsidiaries (including the $627 million of restricted cash deposits); and | |
• | $2.0 billion of which are guaranteed by Teekay Corporation (including obligations under capital leases secured by $470 million of restricted cash deposits). |
• | $450 million would be direct obligations of Teekay Corporation, none of which are secured by assets of Teekay Corporation or guaranteed by Teekay subsidiaries; and |
• | $813 million would be direct obligations of subsidiaries within Teekay Parent; |
• | none of which are secured by assets of, but all of which is guaranteed by, Teekay Corporation; and | |
• | all of which are secured by assets of subsidiaries within Teekay Parent. |
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• | dealers in securities or currencies; |
• | traders in securities that have elected themark-to-market method of accounting for their securities; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | persons holding notes as part of a hedge, straddle, conversion or other “synthetic security” or integrated transaction; |
• | certain U.S. expatriates; |
• | banking, financing and similar institutions; |
• | insurance companies; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | persons subject to the alternative minimum tax; |
• | entities that are tax-exempt for U.S. federal income tax purposes; and |
• | partnerships and other pass-through entities and investors therein. |
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• | an individual who is a U.S. citizen or U.S. resident alien; |
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, that was created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that either is subject to the supervision of a court within the United States and has one or more United States persons with authority to control all of its substantial decisions of the trust or has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person. |
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• | whether the investment is prudent under Section 404(a)(1)(B) of ERISA and any other applicable Similar Laws; |
• | whether in making the investment, that plan will satisfy the diversification requirements of Section 404(a)(1)(C) of ERISA and any other applicable Similar Laws; and |
• | whether making such an investment will comply with the delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws. |
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Underwriters | Principal amount | |||
J.P. Morgan Securities Inc. | $ | 270,000,000 | ||
Citigroup Global Markets Inc. | 90,000,000 | |||
Deutsche Bank Securities Inc. | 54,000,000 | |||
BNP Paribas Securities Corp. | 9,000,000 | |||
DnB NOR Markets, Inc. | 9,000,000 | |||
ING Financial Markets LLC | 9,000,000 | |||
Scotia Capital (USA) Inc. | 9,000,000 | |||
Total | $ | 450,000,000 | ||
Paid by us | ||||
Per note | 1.736% | |||
• | We will not offer or sell any of our debt securities (other than the notes) for a period of 90 days after the date of this prospectus without the prior consent of J.P. Morgan Securities Inc. |
• | We will indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in respect of those liabilities. |
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• | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; |
• | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or |
• | in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. |
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• | our Annual Report onForm 20-F for the year ended December 31, 2008; |
• | all subsequent Annual Reports onForm 20-F filed prior to the termination of this offering; |
• | our Reports onForm 6-K furnished to the SEC on August 28, October 1, and December 16, 2009, respectively; and |
• | all subsequent Reports onForm 6-K furnished prior to the termination of this offering that we identify in such Reports as being incorporated by reference into the registration statement of which this prospectus is a part. |
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4th Floor, Belvedere Building
69 Pitts Bay Road,
Hamilton, HM 08, Bermuda
Attention: Corporate Secretary
Telephone:(441) 298-2530
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U.S. Securities and Exchange Commission registration fee | $ | 32,085 | ||
Legal fees and expenses | 600,000 | |||
Accounting fees and expenses | 200,000 | |||
Printing costs | 150,000 | |||
Rating agency fees | 280,000 | |||
Trustee fees and expenses | 15,000 | |||
Miscellaneous | 22,915 | |||
Total | $ | 1,300,000 | ||
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Aframax tanker | An oil tanker generally between 80,000 and 120,000 dwt in size. Certain external statistical compilations define an “Aframax tanker” slightly differently, some as high as 125,000 dwt and others as low at 70,000 dwt. External data used in this prospectus has been adjusted so that the definition is consistent throughout. | |
Bareboat charter | A charter in which the customer (the charterer) pays a fixed daily rate for a fixed period of time for the full use of the vessel and becomes responsible for all crewing, management and navigation of the vessel and the expenses therefor. | |
Bunker fuel | Any hydrocarbon mineral oil used or intended to be used for the operation or propulsion of a ship. | |
Charter | The hiring of a vessel, or use of its carrying capacity, for either (1) a specified period of time or (2) a specific voyage or set of voyages. | |
Chartered in | Vessels to which the operator has access pursuant to a charter. Also commonly referred to as “in-chartered” vessels. | |
Charterer | The party that charters a vessel. | |
Commercial management | Management of the employment of a vessel, including marketing the vessel for hire under time charters or under voyage charters in the spot market. | |
Contract of affreightment | A contract where the vessel operator commits to be available to transport the quantity of cargo requested by the customer from time to time over a specified trade route within a given period of time. | |
Deepwater | Water with depths of more than 1,000 feet. | |
Double-hull | Hull construction technique by which a ship has an inner and outer hull, separated by void space, usually several feet in width. | |
Drydock | A dock that may be drained of water to allow for the inspection and repair of a ship’s hull. | |
Dwt | Deadweight, a measure of oil tanker carrying capacity, usually in tonnes, based upon weight of cargo and other items necessary to submerge the vessel to its maximum permitted draft. | |
EBITDA | Earnings before interest, taxes, depreciation and amortization. | |
Forward freight agreement | A derivative instrument that provides for the sale of a contracted charter rate along a specified route and period of time. The instrument settles in cash based on the difference between the contracted charter rate and the average rate of an identified index. | |
FPSO unit | Floating production, storage and offloading unit. An FPSO unit is a type of floating tank system designed to process and store crude oil. |
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An FPSO unit typically has onboard the capability to carry out the oil separation process, obviating the need for such facilities to be located on the fixed platform. The processed oil is periodically offloaded onto shuttle tankers or ocean-going barges for transport to shore. | ||
FSO unit | Floating storage and offtake unit. An FSO unit is an oil tanker that has been moored in an oil field and modified to store oil. | |
GAAP | Accounting principles generally accepted in the United States. | |
General and administrative expenses | Employment costs of shore staff and cost of facilities, as well as legal, audit and other administrative costs. | |
Hire rate | The agreed sum or rate to be paid by the customer for the use of the vessel. | |
Lightering | Conveying cargo with another vessel known as a “lighter” from a ship to shore or vessel. | |
Liquefaction | The process of liquefying natural gas. | |
LNG | Liquefied natural gas. | |
LNG carrier | A tank ship designed for transporting liquefied natural gas. | |
Long-term charter | A charter for a term three years or more. | |
LPG | Liquefied petroleum gas. | |
LPG carrier | A tank ship designed for transporting liquefied petroleum gas. | |
Newbuilding | A new vessel under construction. | |
OECD | Organisation for Economic co-operation and Development. | |
Off-hire | The time during which a vessel is not available for service. | |
Pooling arrangement | Arrangements that enable participating vessels to combine their revenues. Pools are administered by a pool manager that secures employment for the participating vessels. | |
Product tanker | A vessel designed to carry a variety of liquid products varying from crude oil to clean or refined petroleum products, acids and other chemicals, as well as edible oils. The tanks are coated to prevent product contamination and hull corrosion. The vessel may have equipment designed for the loading and unloading of cargoes with a high viscosity. | |
Scrapping | The process by which a vessel is stripped of equipment and broken up, generally for reprocessing of its steel. | |
Ship-equivalent basis | A weighted-average calculation method, used in this prospectus, based on the relative value of vessels in our fleet. | |
Short-term charter | A charter for a term less than three years. |
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Shuttle tanker | A dynamically-positioned vessel generally between 80,000 and 150,000 dwt in size that contains sophisticated equipment designed to transport oil from offshore production platforms or FPSO units or FSO units to onshore storage and refinery facilities, often in harsh weather conditions. | |
Spot market | The market for chartering a vessel for single voyages. | |
Suezmax tanker | A vessel with capacity ranging from 120,000 dwt to 200,000 dwt. The term is derived from the maximum length, breadth and draft of a vessel capable of passing fully loaded through the Suez Canal. | |
Teekay Parent | Teekay Parent includes all the assets, liabilities, results of operations and cash flows from Teekay Corporation and its non-publicly-traded subsidiaries as more fully described on page 22. | |
Time charter | A charter in which the customer pays for the use of a vessel’s cargo capacity for a specified period of time. The shipowner provides the vessel with crew, stores and provisions, ready in all aspects to load cargo and proceed on a voyage as directed by the customer. The customer usually pays for bunkering and all voyage-related expenses, including canal tolls and port charges. | |
Time charter equivalent | Bulk shipping industry freight rates are commonly measured in the shipping industry at the net revenues level in terms of “time-charter equivalent” (orTCE) rates, which represent net revenues divided by revenue days. | |
VLCC tanker | Very large crude carriers. | |
Voyage charter | A charter in which the customer pays for the use of a vessel’s cargo capacity for one, or sometimes more than one, voyage between specified ports. Under this type of charter, the shipowner pays all the operating costs of the vessel (including bunker fuel, canal and port charges, pilotage, towage and vessel’s agency) while payment for cargo handling charges are subject of agreement between the parties. Freight is generally paid per unit of cargo, such as a ton, based on an agreed quantity, or as a lump sum irrespective of the quantity loaded. |
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Page | ||||
Unaudited consolidated financial statements | ||||
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Audited consolidated financial statements | ||||
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Unaudited consolidated statements of income
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
(in thousands of U. S. dollars, except share amounts) | $ | $ | ||||||
REVENUES | 1,649,392 | 2,432,123 | ||||||
OPERATING EXPENSES | ||||||||
Voyage expenses | 225,253 | 572,685 | ||||||
Vessel operating expenses(note 16) | 437,299 | 469,517 | ||||||
Time-charter hire expense(note 16) | 348,243 | 445,444 | ||||||
Depreciation and amortization | 321,856 | 312,900 | ||||||
General and administrative(notes 11d and 16) | 156,073 | 184,735 | ||||||
Gain on sale of vessels and equipment—net of write-downs(note 13) | (10,286 | ) | (39,713 | ) | ||||
Restructuring charge(note 14a) | 12,017 | 11,180 | ||||||
Total operating expenses | 1,490,455 | 1,956,748 | ||||||
Income from vessel operations | 158,937 | 475,375 | ||||||
OTHER ITEMS | ||||||||
Interest expense(note 16) | (111,505 | ) | (215,139 | ) | ||||
Interest income(note 16) | 15,894 | 73,408 | ||||||
Realized and unrealized gain (loss) on non-designated derivative instruments(note 16) | 83,066 | (125,542 | ) | |||||
Equity income (loss) from joint ventures(note 11b) | 29,857 | (10,780 | ) | |||||
Foreign exchange (loss) gain(notes 8 and 16) | (39,900 | ) | 8,323 | |||||
Other income (loss)(note 14b) | 8,343 | (7,662 | ) | |||||
Net income before income taxes | 144,692 | 197,983 | ||||||
Income tax (expense) recovery(note 18) | (12,174 | ) | 35,022 | |||||
Net income | 132,518 | 233,005 | ||||||
Less: Net income attributable to non-controlling interests | (33,902 | ) | (51,587 | ) | ||||
Net income attributable to stockholders of Teekay Corporation | 98,616 | 181,418 | ||||||
Per common share of Teekay Corporation (note 17) | ||||||||
• Basic earnings | 1.36 | 2.50 | ||||||
• Diluted earnings | 1.35 | 2.48 | ||||||
• Cash dividends declared | 0.94875 | 0.82500 | ||||||
Weighted average number of common shares outstanding (note 17) | ||||||||
• Basic | 72,535,438 | 72,496,564 | ||||||
• Diluted | 72,876,558 | 73,248,540 | ||||||
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As at | As at | |||||||
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
(in thousands of U.S. dollars) | $ | $ | ||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents(note 8) | 495,402 | 814,165 | ||||||
Restricted cash(note 9) | 37,845 | 35,841 | ||||||
Accounts receivable | 180,121 | 300,462 | ||||||
Vessels held for sale(note 13) | 34,637 | 69,649 | ||||||
Net investment in direct financing leases(note 4) | 33,217 | 22,941 | ||||||
Prepaid expenses | 106,550 | 117,651 | ||||||
Other assets | 41,233 | 33,794 | ||||||
Total current assets | 929,005 | 1,394,503 | ||||||
Restricted cash—long-term(note 9) | 615,093 | 614,715 | ||||||
Vessels and equipment(note 8) | ||||||||
At cost, less accumulated depreciation of $1,606,647 (2008—$1,351,786) | 5,786,648 | 5,784,597 | ||||||
Vessels under capital leases, at cost, less accumulated amortization of $130,499 (2008—$106,975)(note 9) | 908,040 | 928,795 | ||||||
Advances on newbuilding contracts(note 11a) | 196,080 | 553,702 | ||||||
Total vessels and equipment | 6,890,768 | 7,267,094 | ||||||
Net investment in direct financing leases—non-current(note 4) | 448,272 | 56,567 | ||||||
Loans to joint ventures | 22,161 | 28,019 | ||||||
Derivative assets(note 16) | 58,249 | 154,248 | ||||||
Investment in joint ventures(note 11b) | 117,204 | 103,956 | ||||||
Other non-current assets | 139,898 | 127,940 | ||||||
Intangible assets—net(note 6) | 238,392 | 264,768 | ||||||
Goodwill(note 6) | 203,191 | 203,191 | ||||||
Total assets | 9,662,233 | 10,215,001 | ||||||
LIABILITIES AND EQUITY | ||||||||
Current | ||||||||
Accounts payable | 53,835 | 59,973 | ||||||
Accrued liabilities | 277,822 | 315,987 | ||||||
Current portion of derivative liabilities(note 16) | 135,091 | 166,725 | ||||||
Current portion of long-term debt(note 8) | 350,239 | 245,043 | ||||||
Current obligation under capital leases(note 9) | 44,739 | 147,616 | ||||||
Current portion of in-process revenue contracts(note 6) | 63,302 | 74,777 | ||||||
Loan from joint venture partners | 1,990 | 21,019 | ||||||
Total current liabilities | 927,018 | 1,031,140 | ||||||
Long-term debt(note 8) | 4,168,490 | 4,707,749 | ||||||
Long-term obligation under capital leases(note 9) | 779,626 | 669,725 | ||||||
Derivative liabilities(note 16) | 362,816 | 676,540 | ||||||
Deferred income taxes(note 18) | 16,803 | 6,182 | ||||||
Asset retirement obligation | 22,000 | 18,977 | ||||||
In-process revenue contracts(note 6) | 200,935 | 243,088 | ||||||
Other long-term liabilities | 228,961 | 209,195 | ||||||
Total liabilities | 6,706,649 | 7,562,596 | ||||||
Commitments and contingencies(notes 9, 11 and 16) | ||||||||
Equity | ||||||||
Common stock and additional paid-in capital(note 10) | 651,884 | 642,911 | ||||||
Retained earnings | 1,563,713 | 1,507,617 | ||||||
Non-controlling interest | 757,167 | 583,938 | ||||||
Accumulated other comprehensive loss(note 15) | (17,180 | ) | (82,061 | ) | ||||
Total equity | 2,955,584 | 2,652,405 | ||||||
Total liabilities and equity | 9,662,233 | 10,215,001 | ||||||
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Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
(in thousands of U.S. dollars) | $ | $ | ||||||
Cash and cash equivalents provided by (used for) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | 132,518 | 233,005 | ||||||
Non-cash items: | ||||||||
Depreciation and amortization | 321,856 | 312,900 | ||||||
Amortization of in-process revenue contracts | (56,719 | ) | (55,733 | ) | ||||
Gain on sale of marketable securities | – | (4,576 | ) | |||||
Gain on sale of vessels and equipment | (27,399 | ) | (39,713 | ) | ||||
Write-down of marketable securities | – | 13,885 | ||||||
Write-down of intangible assets | 1,076 | – | ||||||
Write-down of vessels and equipment | 17,113 | – | ||||||
Loss on repurchase of bonds | – | 1,310 | ||||||
Equity (income) loss, net of dividends received | (26,914 | ) | 7,278 | |||||
Income tax expense (recovery) | 12,174 | (35,022 | ) | |||||
Employee stock option compensation | 8,607 | 8,981 | ||||||
Foreign exchange loss and other | 37,049 | (56,406 | ) | |||||
Unrealized (gains) losses on derivative instruments | (195,048 | ) | 95,366 | |||||
Change in non-cash working capital items related to operating activities(note 7) | 132,802 | (103,055 | ) | |||||
Expenditures for drydocking | (58,815 | ) | (60,905 | ) | ||||
Net operating cash flow | 298,300 | 317,315 | ||||||
FINANCING ACTIVITIES | ||||||||
Proceeds from issuance of long-term debt | 762,712 | 1,978,792 | ||||||
Debt issuance costs | (3,852 | ) | (1,825 | ) | ||||
Scheduled repayments of long-term debt | (113,534 | ) | (235,172 | ) | ||||
Prepayments of long-term debt | (1,104,204 | ) | (881,993 | ) | ||||
Repayments of capital lease obligations | (6,949 | ) | (6,766 | ) | ||||
Proceeds from loans from joint venture partner | 591 | – | ||||||
Repayment of loans from joint venture partner | (23,390 | ) | (1,489 | ) | ||||
Decrease (increase) in restricted cash | 5,228 | (56,924 | ) | |||||
Net proceeds from issuance of Teekay LNG Partners L.P. units(note 5) | 67,095 | 148,331 | ||||||
Net proceeds from issuance of Teekay Offshore Partners L.P. units(note 5) | 102,098 | 142,160 | ||||||
Net proceeds from issuance of Teekay Tankers Ltd. Class A shares(note 5) | 65,556 | – | ||||||
Issuance of Common Stock upon exercise of stock options | 352 | 4,206 | ||||||
Repurchase of Common Stock | – | (20,512 | ) | |||||
Distribution from subsidiaries to non-controlling interests | (83,646 | ) | (61,616 | ) | ||||
Cash dividends paid | (68,800 | ) | (59,952 | ) | ||||
Other financing activities | – | (1,442 | ) | |||||
Net financing cash flow | (400,743 | ) | 945,798 | |||||
INVESTING ACTIVITIES | ||||||||
Expenditures for vessels and equipment | (431,607 | ) | (546,334 | ) | ||||
Proceeds from sale of vessels and equipment | 198,837 | 184,338 | ||||||
Purchases of marketable securities | – | (542 | ) | |||||
Proceeds from sale of marketable securities | – | 11,058 | ||||||
Acquisition of additional 35.3% of Teekay Petrojarl ASA(note 3) | – | (258,555 | ) | |||||
Investment in joint ventures | (7,288 | ) | (1,434 | ) | ||||
Advances to joint ventures | (1,206 | ) | (255,971 | ) | ||||
Investment in direct financing lease assets | – | (537 | ) | |||||
Direct financing lease payments received | 2,135 | 16,664 | ||||||
Other investing activities | 22,809 | 21,140 | ||||||
Net investing cash flow | (216,320 | ) | (830,173 | ) | ||||
(Decrease) increase in cash and cash equivalents | (318,763 | ) | 432,940 | |||||
Cash and cash equivalents, beginning of the period | 814,165 | 442,673 | ||||||
Cash and cash equivalents, end of the period | 495,402 | 875,613 | ||||||
F-4
Table of Contents
Nine months ended | ||||||||
September 30, | ||||||||
2009 | 2008 | |||||||
(in thousands of U.S. dollars) | $ | $ | ||||||
Net income | 132,518 | 233,005 | ||||||
Other comprehensive income (loss): | ||||||||
Unrealized gain (loss) on marketable securities | 5,053 | (16,636 | ) | |||||
Reclassification adjustment for gain on sale of marketable securities | – | 9,310 | ||||||
Pension adjustments | 252 | 1,058 | ||||||
Unrealized change on qualifying cash flow hedging instruments | 44,967 | (37,743 | ) | |||||
Realized change on qualifying cash flow hedging instruments | 23,314 | 2,153 | ||||||
Other comprehensive income (loss) | 73,586 | (41,858 | ) | |||||
Comprehensive income | 206,104 | 191,147 | ||||||
Less: Comprehensive income attributable to non-controlling interests | (42,589 | ) | (48,332 | ) | ||||
Comprehensive income attributable to stockholders of Teekay Corporation | 163,515 | 142,815 | ||||||
F-5
Table of Contents
except share data)
1. | Summary of significant accounting policies |
F-6
Table of Contents
Nine months ended | ||||
September 30, 2009 | ||||
$ | ||||
Pro forma net income attributable to the stockholders of Teekay Corporation | 104,260 | |||
Pro forma earnings per share: | ||||
Basic | 1.44 | |||
Diluted | 1.43 | |||
F-7
Table of Contents
2. | Segment reporting |
F-8
Table of Contents
Shuttle | Conventional Tanker | |||||||||||||||||||||||
Tanker | Liquefied | Fixed-rate | Spot | |||||||||||||||||||||
and FSO | FPSO | gas | Tanker | Tanker | ||||||||||||||||||||
Nine months ended September 30, 2009 | segment | segment | segment | segment | segment | Total | ||||||||||||||||||
Revenues | 432,371 | 289,825 | 176,283 | 217,574 | 533,339 | 1,649,392 | ||||||||||||||||||
Voyage expenses | 58,227 | – | 723 | 4,614 | 161,689 | 225,253 | ||||||||||||||||||
Vessel operating expenses | 126,911 | 140,825 | 36,238 | 55,540 | 77,785 | 437,299 | ||||||||||||||||||
Time-charter hire expense | 85,645 | – | – | 35,918 | 226,680 | 348,243 | ||||||||||||||||||
Depreciation and amortization | 88,003 | 76,869 | 44,257 | 41,803 | 70,924 | 321,856 | ||||||||||||||||||
General and administrative(1) | 40,406 | 25,799 | 15,875 | 20,388 | 53,605 | 156,073 | ||||||||||||||||||
Loss (gain) on sale of vessels and equipment, net of write-downs | 1,902 | – | – | 3,960 | (16,148 | ) | (10,286 | ) | ||||||||||||||||
Restructuring charge | 5,991 | – | 3,802 | 613 | 1,611 | 12,017 | ||||||||||||||||||
Income (loss) from vessel operations | 25,286 | 46,332 | 75,388 | 54,738 | (42,807 | ) | 158,937 | |||||||||||||||||
Shuttle | Conventional Tanker | |||||||||||||||||||||||
Tanker | Liquefied | Fixed-rate | Spot | |||||||||||||||||||||
and FSO | FPSO | gas | Tanker | Tanker | ||||||||||||||||||||
Nine months ended September 30, 2008 | segment | segment | segment | segment | segment | Total | ||||||||||||||||||
Revenues | 532,821 | 283,673 | 167,297 | 188,519 | 1,259,813 | 2,432,123 | ||||||||||||||||||
Voyage expenses | 132,808 | – | 791 | 2,904 | 436,182 | 572,685 | ||||||||||||||||||
Vessel operating expenses | 130,038 | 165,122 | 35,224 | 49,626 | 89,507 | 469,517 | ||||||||||||||||||
Time-charter hire expense | 100,231 | – | – | 32,881 | 312,332 | 445,444 | ||||||||||||||||||
Depreciation and amortization | 88,036 | 67,759 | 43,010 | 32,447 | 81,648 | 312,900 | ||||||||||||||||||
General and administrative(1) | 45,412 | 35,544 | 17,520 | 15,157 | 71,102 | 184,735 | ||||||||||||||||||
Gain on sale of vessels and equipment, net of write-downs | (3,771 | ) | – | – | – | (35,942 | ) | (39,713 | ) | |||||||||||||||
Restructuring charge | 6,500 | – | 614 | 1,893 | 2,173 | 11,180 | ||||||||||||||||||
Income from vessel operations | 33,567 | 15,248 | 70,138 | 53,611 | 302,811 | 475,375 | ||||||||||||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
F-9
Table of Contents
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Shuttle tanker and FSO segment | 1,695,154 | 1,722,432 | ||||||
FPSO segment | 1,272,105 | 1,331,325 | ||||||
Liquefied gas segment | 2,890,314 | 2,919,194 | ||||||
Fixed-rate tanker segment | 1,173,719 | 951,592 | ||||||
Spot tanker segment | 1,728,456 | 1,935,537 | ||||||
Cash and portion of restricted cash | 495,402 | 821,286 | ||||||
Accounts receivable and other assets | 407,083 | 533,635 | ||||||
Consolidated total assets | 9,662,233 | 10,215,001 | ||||||
3. | Acquisition of additional 35.3% of Teekay Petrojarl ASA |
4. | Net investment in direct financing leases |
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Total minimum lease payments to be received | 811,028 | 94,409 | ||||||
Estimated residual value of leased property (not guaranteed) | 194,497 | – | ||||||
Initial direct costs and other | 1,230 | 674 | ||||||
Less unearned income | (525,266 | ) | (15,575 | ) | ||||
Total | 481,489 | 79,508 | ||||||
Less current portion | 33,217 | 22,941 | ||||||
Total | 448,272 | 56,567 | ||||||
F-10
Table of Contents
5. | Public offerings |
F-11
Table of Contents
6. | Goodwill, intangible assets and in-process revenue contracts |
Shuttle | Liquefied | Conventional | ||||||||||||||||||
Tanker and | FPSO | gas | Tanker | |||||||||||||||||
FSO segment | segment | segment | segment | Total | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Balance as of September 30, 2009, and December 31, 2008 | 130,908 | – | 35,631 | 36,652 | 203,191 | |||||||||||||||
Weighted-average | Gross carrying | Accumulated | Net carrying | |||||||||||||
amortization period | amount | amortization | amount | |||||||||||||
(years) | $ | $ | $ | |||||||||||||
Contracts of affreightment | 10.2 | 124,250 | (85,750 | ) | 38,500 | |||||||||||
Time-charter contracts | 16.0 | 232,602 | (78,087 | ) | 154,515 | |||||||||||
Other intangible assets | 1.0 | 59,231 | (13,854 | ) | 45,377 | |||||||||||
12.1 | 416,083 | (177,691 | ) | 238,392 | ||||||||||||
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 | 15.9 | 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 | ||||||||||||
F-12
Table of Contents
7. | Supplemental cash flow information |
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Accounts receivable | 120,341 | (80,220 | ) | |||||
Prepaid expenses and other assets | 17,485 | (33,781 | ) | |||||
Accounts payable | (6,982 | ) | (9,305 | ) | ||||
Accrued and other liabilities | 1,958 | 20,251 | ||||||
132,802 | (103,055 | ) | ||||||
8. | Long-term debt |
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Revolving Credit Facilities | 2,018,027 | 2,656,658 | ||||||
Senior Notes (8.875%) due July 15, 2011 | 194,466 | 194,642 | ||||||
USD-denominated Term Loans due through 2021 | 1,865,225 | 1,670,005 | ||||||
Euro-denominated Term Loans due through 2023 | 424,782 | 414,144 | ||||||
USD-denominated Unsecured Demand Loan due to Joint Venture Partners | 16,229 | 17,343 | ||||||
4,518,729 | 4,952,792 | |||||||
Less current portion | 350,239 | 245,043 | ||||||
4,168,490 | 4,707,749 | |||||||
F-13
Table of Contents
F-14
Table of Contents
9. | Capital leases and restricted cash |
Year | Commitment | |||
Remainder of 2009 | $ | 6.0 million | ||
2010 | $ | 23.7 million | ||
2011 | $ | 197.9 million | ||
F-15
Table of Contents
Year | Commitment | |||
Remainder of 2009 | $ | 6.0 million | ||
2010 | $ | 24.0 million | ||
2011 | $ | 24.0 million | ||
2012 | $ | 24.0 million | ||
2013 | $ | 24.0 million | ||
Thereafter | $ | 953.1 million | ||
Year | Commitment | |||
Remainder of 2009 | 25.7 million Euros ($ | 37.5 million | ) | |
2010 | 26.9 million Euros ($ | 39.4 million | ) | |
2011 | 64.8 million Euros ($ | 94.9 million | ) | |
F-16
Table of Contents
10. | Capital stock |
F-17
Table of Contents
11. | Commitments and contingencies |
a) | Vessels under construction |
b) | Joint ventures |
F-18
Table of Contents
c) | Legal proceedings and claims |
d) | Long-term incentive plan |
e) | Other |
12. | Fair value measurements |
F-19
Table of Contents
F-20
Table of Contents
September 30, 2009 | ||||||||||||
Carrying | Fair | |||||||||||
Fair value | amount | value | ||||||||||
hierarchy | asset (liability) | asset (liability) | ||||||||||
level | $ | $ | ||||||||||
Cash and cash equivalents and restricted cash | – | 1,148,340 | 1,148,340 | |||||||||
Vessels held for sale | Level 2 | 34,637 | 34,637 | |||||||||
Loans to joint ventures | – | 22,161 | 22,161 | |||||||||
Loan from joint venture partners | – | (1,990 | ) | (1,990 | ) | |||||||
Long-term debt | Level 1 and 2 | (4,518,729 | ) | (4,060,750 | ) | |||||||
Derivative instruments(1) | ||||||||||||
Interest rate swap agreements(2) | Level 2 | (512,943 | ) | (512,943 | ) | |||||||
Interest rate swap agreements(2) | Level 2 | 76,368 | 76,368 | |||||||||
Foreign currency contracts | Level 2 | 8,523 | 8,523 | |||||||||
Foinaven embedded derivative | Level 2 | (13,818 | ) | (13,818 | ) | |||||||
(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 $29.0 million of accrued interest which is recorded in accrued liabilities on the balance sheet. |
13. | Vessel sales and write-downs of Vessels and equipment |
a) | Vessel sales |
F-21
Table of Contents
b) | Vessels and equipment write-down |
14. | Restructuring charge and other income (loss) |
a) | Restructuring charge |
b) | Other income (loss) |
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Net gain on sale (write-down) of marketable securities | – | (9,309 | ) | |||||
Loss on bond repurchase | – | (1,310 | ) | |||||
Volatile organic compound emission plant lease income | 5,172 | 7,529 | ||||||
Miscellaneous income (loss) | 3,171 | (4,572 | ) | |||||
Other income (loss) | 8,343 | (7,662 | ) | |||||
15. | Accumulated other comprehensive loss |
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Unrealized loss on derivative instruments | (206 | ) | (58,723 | ) | ||||
Pension adjustments | (22,027 | ) | (23,338 | ) | ||||
Unrealized gain on marketable securities | 5,053 | – | ||||||
(17,180 | ) | (82,061 | ) | |||||
F-22
Table of Contents
16. | Derivative instruments and hedging activities |
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Gains (losses) recognized in: | ||||||||
Vessel operating expenses | (11,598 | ) | 5,315 | |||||
General and administrative | (3,760 | ) | 2,736 | |||||
Foreign exchange (loss) gain | (3 | ) | 9 | |||||
Accumulated other comprehensive income | 44,967 | (37,743 | ) | |||||
Gains (losses) reclassified from: | ||||||||
Accumulated other comprehensive income | 23,314 | 2,153 | ||||||
F-23
Table of Contents
Contract | Fair value/ | |||||||||||||||||||||||
amount | Average | carrying | ||||||||||||||||||||||
in foreign | forward | amount of | Expected maturity | |||||||||||||||||||||
currency | rate(1) | asset/(liability) | 2009 | 2010 | 2011 | |||||||||||||||||||
(millions) | (in millions of U.S. dollars) | |||||||||||||||||||||||
(in millions of | ||||||||||||||||||||||||
U.S. dollars) | ||||||||||||||||||||||||
Norwegian Kroner | 1,197.6 | 6.11 | $ | 9.7 | $ | 46.8 | $ | 139.5 | $ | 9.6 | ||||||||||||||
Euro | 38.6 | 0.69 | 0.5 | 16.9 | 36.8 | 2.3 | ||||||||||||||||||
Canadian Dollar | 65.1 | 1.09 | 1.0 | 14.5 | 45.3 | – | ||||||||||||||||||
British Pound | 30.5 | 0.59 | (2.7 | ) | 15.4 | 34.3 | 1.8 | |||||||||||||||||
Australian Dollar | 0.3 | 1.13 | – | 0.3 | – | – | ||||||||||||||||||
Singapore Dollar | 2.2 | 1.41 | – | 1.6 | – | – | ||||||||||||||||||
$ | 8.5 | $ | 95.5 | $ | 255.9 | $ | 13.7 | |||||||||||||||||
(1) | Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy. |
F-24
Table of Contents
Fair Value/ | ||||||||||||||||||
carrying | Weighted- | |||||||||||||||||
amount of | average | Fixed | ||||||||||||||||
Principal | asset | remaining | interest | |||||||||||||||
Interest | amount | (liability) | term | rate | ||||||||||||||
rate index | $ | $ | (years) | (%)(1) | ||||||||||||||
LIBOR-Based Debt: | ||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 460,480 | (62,138 | ) | 27.3 | 4.9 | ||||||||||||
U.S. Dollar-denominated interest rate swaps | LIBOR | 3,061,635 | (352,642 | ) | 8.8 | 5.0 | ||||||||||||
U.S. Dollar-denominated interest rate swaps(3) | LIBOR | 835,000 | (83,899 | ) | 12.9 | 4.2 | ||||||||||||
LIBOR-Based Restricted Cash Deposit: | ||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 474,567 | 76,368 | 27.3 | 4.8 | |||||||||||||
EURIBOR-Based Debt: | ||||||||||||||||||
Euro-denominated interest rate swaps(4)(5) | EURIBOR | 424,782 | (14,264 | ) | 14.7 | 3.8 | ||||||||||||
(1) | Excludes the margins the Company pays on its variable-rate debt, which at of September 30, 2009, ranged from 0.30% to 3.25%. | |
(2) | Principal amount reduces quarterly. | |
(3) | Inception dates of swaps are 2009 ($335.0 million), 2010 ($300.0 million) and 2011 ($200.0 million). | |
(4) | Principal amount reduces monthly to 70.1 million Euros ($102.6 million) by the maturity dates of the swap agreements. | |
(5) | Principal amount is the U.S. Dollar equivalent of 290.1 million Euros. |
F-25
Table of Contents
17. | Earnings per share |
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Net income attributable to stockholders’ of Teekay Corporation | 98,616 | 181,418 | ||||||
Weighted average number of common shares | 72,535,438 | 72,496,564 | ||||||
Dilutive effect of employee stock options and restricted stock awards | 341,120 | 751,976 | ||||||
Common stock and common stock equivalents | 72,876,558 | 73,248,540 | ||||||
Earnings per common share: | ||||||||
- Basic | 1.36 | 2.50 | ||||||
- Diluted | 1.35 | 2.48 | ||||||
18. | Income tax (expense) recovery |
Nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
$ | $ | |||||||
Current | (2,459 | ) | (6,036 | ) | ||||
Deferred | (9,715 | ) | 41,058 | |||||
Income tax (expense) recovery | (12,174 | ) | 35,022 | |||||
19. | Accounting pronouncements not yet adopted |
F-26
Table of Contents
20. | Subsequent events |
F-27
Table of Contents
F-28
Table of Contents
Chartered Accountants
F-29
Table of Contents
Chartered Accountants
F-30
Table of Contents
Consolidated statements of income (loss)
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
(in thousands of U.S. dollars, except share amounts) | $ | $ | $ | |||||||||
REVENUES(note 15) | 3,193,655 | 2,395,507 | 2,013,737 | |||||||||
OPERATING EXPENSES | ||||||||||||
Voyage expenses | 758,388 | 527,308 | 522,957 | |||||||||
Vessel operating expenses(note 15) | 654,319 | 447,146 | 248,039 | |||||||||
Time-charter hire expense(note 15) | 612,123 | 466,481 | 402,168 | |||||||||
Depreciation and amortization | 418,802 | 329,113 | 223,965 | |||||||||
General and administrative(note 15) | 244,522 | 231,865 | 181,500 | |||||||||
Gain on sale of vessels and equipment—net of write-downs(notes 18a and 18b) | (60,015 | ) | (16,531 | ) | (1,341 | ) | ||||||
Goodwill impairment charge(note 6) | 334,165 | – | – | |||||||||
Restructuring charge(note 22) | 15,629 | – | 8,929 | |||||||||
Total operating expenses | 2,977,933 | 1,985,382 | 1,586,217 | |||||||||
Income from vessel operations | 215,722 | 410,125 | 427,520 | |||||||||
OTHER ITEMS | ||||||||||||
Interest expense(note 15) | (994,966 | ) | (422,433 | ) | (100,089 | ) | ||||||
Interest income(note 15) | 273,647 | 110,201 | 31,714 | |||||||||
Foreign exchange gain (loss)(notes 8 and 15) | 32,348 | (39,912 | ) | (50,416 | ) | |||||||
Equity (loss) income from joint ventures(note 16b) | (36,085 | ) | (12,404 | ) | 6,099 | |||||||
Other (loss) income—net(note 14) | (6,736 | ) | 23,677 | 3,566 | ||||||||
Total other items | (731,792 | ) | (340,871 | ) | (109,126 | ) | ||||||
(Loss) income before non-controlling interest | ||||||||||||
and income tax (expense) recovery | (516,070 | ) | 69,254 | 318,394 | ||||||||
Income tax recovery (expense)(note 21) | 56,176 | 3,192 | (8,811 | ) | ||||||||
(Loss) income before non-controlling interest | (459,894 | ) | 72,446 | 309,583 | ||||||||
Non-controlling interest expense | (9,561 | ) | (8,903 | ) | (6,759 | ) | ||||||
Net (loss) income | (469,455 | ) | 63,543 | 302,824 | ||||||||
Per common share amounts | ||||||||||||
• Basic net (loss) earnings(note 19) | (6.48 | ) | 0.87 | 4.14 | ||||||||
• Diluted net (loss) earnings(note 19) | (6.48 | ) | 0.85 | 4.03 | ||||||||
• Cash dividends declared | 1.1413 | 0.9875 | 0.8600 | |||||||||
Weighted average number of common shares(note 19) | ||||||||||||
• Basic | 72,493,429 | 73,382,197 | 73,180,193 | |||||||||
• Diluted | 72,493,429 | 74,735,356 | 75,128,724 | |||||||||
F-31
Table of Contents
Consolidated balance sheets
As at | As at | |||||||
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
(in thousands of U.S. dollars) | $ | $ | ||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents(note 8) | 814,165 | 442,673 | ||||||
Restricted cash(note 10) | 35,841 | 33,479 | ||||||
Accounts receivable, including non-trade of $46,422 (2007—$35,410) | 300,462 | 262,420 | ||||||
Vessels held for sale(note 18a) | 69,649 | 79,689 | ||||||
Net investment in direct financing leases(note 9) | 22,941 | 22,268 | ||||||
Prepaid expenses | 117,651 | 126,761 | ||||||
Other assets | 33,794 | 57,609 | ||||||
Total current assets | 1,394,503 | 1,024,899 | ||||||
Restricted cash—long-term(note 10) | 614,715 | 652,717 | ||||||
Vessels and equipment(note 8) | ||||||||
At cost, less accumulated depreciation of $1,351,786 (2007—$1,061,619) | 5,784,597 | 5,295,751 | ||||||
Vessels under capital leases, at cost, less accumulated amortization of $106,975 (2007—$74,442)(note 10) | 928,795 | 934,058 | ||||||
Advances on newbuilding contracts(note 16) | 553,702 | 617,066 | ||||||
Total vessels and equipment | 7,267,094 | 6,846,875 | ||||||
Net investment in direct financing leases—non-current(note 9) | 56,567 | 78,908 | ||||||
Loans to joint ventures, bearing interest between 4.4% to 8.0% (2007—6.4% to 8.0%) | 28,019 | 729,429 | ||||||
Derivative instruments(note 15) | 154,248 | 39,381 | ||||||
Investment in joint ventures(note 16) | 103,956 | 135,515 | ||||||
Other non-current assets | 127,940 | 177,775 | ||||||
Intangible assets—net(note 6) | 264,768 | 298,452 | ||||||
Goodwill(note 6) | 203,191 | 434,590 | ||||||
Total assets | 10,215,001 | 10,418,541 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current | ||||||||
Accounts payable | 59,973 | 89,691 | ||||||
Accrued liabilities(note 7) | 315,987 | 260,717 | ||||||
Current portion of derivative liabilities(note 15) | 166,725 | 17,870 | ||||||
Current portion of long-term debt(note 8) | 245,043 | 331,594 | ||||||
Current obligation under capital leases(note 10) | 147,616 | 150,791 | ||||||
Current portion of in-process revenue contracts(note 6) | 74,777 | 82,704 | ||||||
Loan from joint venture partners | 21,019 | – | ||||||
Total current liabilities | 1,031,140 | 933,367 | ||||||
Long-term debt(note 8) | 4,707,749 | 4,931,990 | ||||||
Long-term obligation under capital leases(note 10) | 669,725 | 706,489 | ||||||
Derivative instruments(note 15) | 676,540 | 164,769 | ||||||
Deferred income taxes(note 21) | 6,182 | 74,975 | ||||||
Asset retirement obligation(note 1) | 18,977 | 24,549 | ||||||
In-process revenue contracts(note 6) | 243,088 | 205,429 | ||||||
Other long-term liabilities | 209,195 | 176,680 | ||||||
Total liabilities | 7,562,596 | 7,218,248 | ||||||
Commitments and contingencies(notes 9, 10, 15 and 16) | ||||||||
Non-controlling interest | 583,938 | 544,339 | ||||||
Stockholders’ equity | ||||||||
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 72,512,291 shares outstanding (2007—72,772,529); 73,011,488 shares issued (2007—95,327,329))(note 12) | 642,911 | 628,786 | ||||||
Retained earnings | 1,507,617 | 2,022,601 | ||||||
Accumulated other comprehensive (loss) income(note 1) | (82,061 | ) | 4,567 | |||||
Total stockholders’ equity | 2,068,467 | 2,655,954 | ||||||
Total liabilities and stockholders’ equity | 10,215,001 | 10,418,541 | ||||||
F-32
Table of Contents
Consolidated statements of cash flows
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
(in thousands of U.S. dollars) | $ | $ | $ | |||||||||
Cash and cash equivalents provided by (used for) | ||||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net (loss) income | (469,455 | ) | 63,543 | 302,824 | ||||||||
Non-cash items: | ||||||||||||
Depreciation and amortization | 418,802 | 329,113 | 223,965 | |||||||||
Amortization of in-process revenue contracts | (74,425 | ) | (70,979 | ) | (22,404 | ) | ||||||
Gain on sale of marketable securities | (4,576 | ) | (9,577 | ) | (1,422 | ) | ||||||
Gain on sale of vessels and other | (100,392 | ) | (16,531 | ) | (9,041 | ) | ||||||
Write-down of marketable securities | 20,157 | – | – | |||||||||
Write-down for impairment of goodwill | 334,165 | – | – | |||||||||
Write-down of intangible assets | 9,748 | – | – | |||||||||
Write-down of vessels and equipment | 40,377 | – | 7,700 | |||||||||
Loss on repurchase of bonds | 1,310 | 947 | 375 | |||||||||
Equity loss (net of dividends received: December 31, 2008—$1,690; December 31, 2007—$661; December 31, 2006—$6,585) | 30,352 | 11,419 | 486 | |||||||||
Income tax (recovery) expense | (56,176 | ) | (3,192 | ) | 8,811 | |||||||
Employee stock option compensation | 14,117 | 9,676 | 9,297 | |||||||||
Foreign exchange (gain) loss and other—net | (40,319 | ) | 20,229 | 63,131 | ||||||||
Unrealized (gains) losses on derivative instruments | 530,283 | 99,055 | (57,246 | ) | ||||||||
Change in non-cash working capital items related to operating activities(note 17a) | (28,816 | ) | (43,871 | ) | 50,360 | |||||||
Expenditures for drydocking | (101,511 | ) | (85,403 | ) | (31,120 | ) | ||||||
Distribution from subsidiaries to minority owners | (91,794 | ) | (49,411 | ) | (24,931 | ) | ||||||
Net operating cash flow | 431,847 | 255,018 | 520,785 | |||||||||
FINANCING ACTIVITIES | ||||||||||||
Proceeds from issuance of long-term debt | 2,208,715 | 4,164,308 | 2,220,336 | |||||||||
Debt issuance costs | (8,425 | ) | (14,135 | ) | (19,424 | ) | ||||||
Repayments of long-term debt | (1,634,879 | ) | (2,178,464 | ) | (1,300,172 | ) | ||||||
Repayments of capital lease obligations | (33,176 | ) | (30,999 | ) | (153,395 | ) | ||||||
Proceeds from loans from joint venture partner | 26,338 | 44,185 | 4,280 | |||||||||
Repayment of loans from joint venture partner | (4,104 | ) | (68,968 | ) | – | |||||||
Decrease (increase) in restricted cash | 23,955 | 24,322 | (328,035 | ) | ||||||||
Net proceeds from sale of Teekay Offshore Partners L.P. units(note 5) | 141,484 | – | 156,711 | |||||||||
Net proceeds from sale of Teekay LNG Partners L.P. units(note 5) | 148,345 | 84,185 | – | |||||||||
Net proceeds from sale of Teekay Tankers Ltd. shares(note 5) | – | 208,186 | – | |||||||||
Issuance of Common Stock upon exercise of stock options | 4,224 | 34,508 | 15,325 | |||||||||
Repurchase of Common Stock(note 12) | (20,512 | ) | (80,430 | ) | (233,305 | ) | ||||||
Cash dividends paid | (82,877 | ) | (72,499 | ) | (63,065 | ) | ||||||
Other financing activities | (1,210 | ) | – | – | ||||||||
Net financing cash flow | 767,878 | 2,114,199 | 299,256 | |||||||||
INVESTING ACTIVITIES | ||||||||||||
Expenditures for vessels and equipment | (716,765 | ) | (910,304 | ) | (442,470 | ) | ||||||
Proceeds from sale of vessels and equipment | 331,611 | 214,797 | 326,901 | |||||||||
Purchases of marketable securities | (542 | ) | (59,165 | ) | (549 | ) | ||||||
Proceeds from sale of marketable securities | 11,058 | 57,093 | 8,898 | |||||||||
Proceeds from sale of interest in Swift Product Tanker Pool(note 18a) | 44,377 | – | – | |||||||||
Purchase of OMI Corporation, net of cash acquired of $577(note 4) | – | (1,108,216 | ) | – | ||||||||
Purchase of Petrojarl ASA(note 3) | (304,949 | ) | (1,210 | ) | (464,823 | ) | ||||||
Investment in joint ventures | (1,204 | ) | (16,975 | ) | (9,868 | ) | ||||||
Loans to joint ventures | (260,424 | ) | (479,242 | ) | (152,020 | ) | ||||||
Collections of loans from joint ventures | 30,484 | – | – | |||||||||
Investment in direct financing lease assets | (535 | ) | (13,947 | ) | (13,420 | ) | ||||||
Direct financing lease payments received | 22,203 | 21,151 | 19,323 | |||||||||
Other investing activities | 16,453 | 25,560 | 14,917 | |||||||||
Net investing cash flow | (828,233 | ) | (2,270,458 | ) | (713,111 | ) | ||||||
Increase in cash and cash equivalents | 371,492 | 98,759 | 106,930 | |||||||||
Cash and cash equivalents, beginning of the year | 442,673 | 343,914 | 236,984 | |||||||||
Cash and cash equivalents, end of the year | 814,165 | 442,673 | 343,914 | |||||||||
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Consolidated statements of changes in stockholders’ equity
Common | Accumu- | |||||||||||||||||||
stock and | lated other | Total | ||||||||||||||||||
Thousands of | additional | comprehensive | stock- | |||||||||||||||||
common | paid-in | Retained | income | holders’ | ||||||||||||||||
shares | capital | earnings | (loss) | equity | ||||||||||||||||
(in thousands of U.S. dollars) | # | $ | $ | $ | $ | |||||||||||||||
Balance as at December 31, 2005 | 71,376 | 471,784 | 1,768,382 | (1,348 | ) | 2,238,818 | ||||||||||||||
Net income | 302,824 | 302,824 | ||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||
Unrealized gain on marketable securities | 8,370 | 8,370 | ||||||||||||||||||
Reclassification adjustment for gain on marketable securities | (1,422 | ) | (1,422 | ) | ||||||||||||||||
Comprehensive income | 309,772 | |||||||||||||||||||
Dividends declared | (63,071 | ) | (63,071 | ) | ||||||||||||||||
Reinvested dividends | 1 | 6 | 6 | |||||||||||||||||
Exercise of stock options | 745 | 15,325 | 15,325 | |||||||||||||||||
Issuance of Common Stock(note 12) | 13 | 429 | 429 | |||||||||||||||||
Repurchase of Common Stock(note 12) | (5,837 | ) | (42,132 | ) | (191,173 | ) | (233,305 | ) | ||||||||||||
Settlement of the Premium Equity Participating Security Units | 6,534 | 142,003 | 142,003 | |||||||||||||||||
Employee stock option compensation(note 12) | 9,297 | 9,297 | ||||||||||||||||||
Gain on public offering of Teekay Offshore(note 5) | 99,873 | 99,873 | ||||||||||||||||||
Balance as at December 31, 2006 | 72,832 | 596,712 | 1,916,835 | 5,600 | 2,519,147 | |||||||||||||||
Net income | 63,543 | 63,543 | ||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||
Unrealized gain on marketable securities | 19,612 | 19,612 | ||||||||||||||||||
Pension adjustments | (6,278 | ) | (6,278 | ) | ||||||||||||||||
Unrealized net gain on qualifying cash flow hedging instruments(note 15) | 6,231 | 6,231 | ||||||||||||||||||
Reclassification adjustment for gain on marketable securities | (17,887 | ) | (17,887 | ) | ||||||||||||||||
Realized net gain on qualifying cash flow hedging instruments(note 15) | (2,711 | ) | (2,711 | ) | ||||||||||||||||
Comprehensive income | 62,510 | |||||||||||||||||||
Dividends declared | (72,508 | ) | (72,508 | ) | ||||||||||||||||
Reinvested dividends | 1 | 9 | 9 | |||||||||||||||||
Change in accounting policy(note 1) | (1,011 | ) | (1,011 | ) | ||||||||||||||||
Exercise of stock options | 1,435 | 34,508 | 34,508 | |||||||||||||||||
Issuance of Common Stock(note 12) | 15 | 589 | 589 | |||||||||||||||||
Repurchase of Common Stock(note 12) | (1,511 | ) | (12,708 | ) | (67,722 | ) | (80,430 | ) | ||||||||||||
Employee stock option compensation(note 12) | 9,676 | 9,676 | ||||||||||||||||||
Gain on public offerings of Teekay LNG and | ||||||||||||||||||||
Teekay Tankers and other(note 5) | 183,464 | 183,464 | ||||||||||||||||||
Balance as at December 31, 2007 | 72,772 | 628,786 | 2,022,601 | 4,567 | 2,655,954 | |||||||||||||||
Net loss | (469,455 | ) | (469,455 | ) | ||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Unrealized loss on marketable securities | (21,449 | ) | (21,449 | ) | ||||||||||||||||
Pension adjustments | (17,060 | ) | (17,060 | ) | ||||||||||||||||
Unrealized net loss on qualifying cash flow hedging instruments(note 15) | (86,333 | ) | (86,333 | ) | ||||||||||||||||
Reclassification adjustment for loss on marketable securities | 14,123 | 14,123 | ||||||||||||||||||
Realized net loss on qualifying cash flow hedging instruments(note 15) | 24,091 | 24,091 | ||||||||||||||||||
Comprehensive loss | (556,083 | ) | ||||||||||||||||||
Dividends declared | (82,889 | ) | (82,889 | ) | ||||||||||||||||
Reinvested dividends | 1 | 12 | 12 | |||||||||||||||||
Exercise of stock options | 179 | 4,224 | 4,224 | |||||||||||||||||
Issuance of Common Stock(note 12) | 59 | 1,252 | 1,252 | |||||||||||||||||
Repurchase of Common Stock(note 12) | (499 | ) | (4,228 | ) | (16,284 | ) | (20,512 | ) | ||||||||||||
Employee stock option compensation(note 12) | 12,865 | 12,865 | ||||||||||||||||||
Dilution gain on public offerings of Teekay Offshore and Teekay LNG(note 5) | 53,644 | 53,644 | ||||||||||||||||||
Balance as at December 31, 2008 | 72,512 | 642,911 | 1,507,617 | (82,061 | ) | 2,068,467 | ||||||||||||||
F-34
Table of Contents
1. | Summary of significant accounting policies |
F-35
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F-36
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F-37
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Year ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Balance at January 1, | 98,925 | 57,030 | 36,495 | |||||||||
Costs incurred for drydocking | 98,092 | 71,181 | 36,344 | |||||||||
Costs fully amortized | (1,639 | ) | (3,979 | ) | – | |||||||
Drydock amortization | (40,765 | ) | (25,307 | ) | (15,809 | ) | ||||||
Balance at December 31, | 154,613 | 98,925 | 57,030 | |||||||||
F-38
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F-39
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F-40
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F-41
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December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Unrealized (loss) gain on derivative instruments | (58,723 | ) | 3,520 | – | ||||||||
Pension adjustments | (23,338 | ) | (6,278 | ) | – | |||||||
Unrealized gain on marketable securities | – | 7,325 | 5,600 | |||||||||
(82,061 | ) | 4,567 | 5,600 | |||||||||
F-42
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F-43
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F-44
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2. | Segment reporting |
F-45
Table of Contents
Shuttle | Fixed | |||||||||||||||||||||||
Tanker | rate | Liquefied | Spot | |||||||||||||||||||||
and FSO | FPSO | Tanker | gas | Tanker | ||||||||||||||||||||
Year ended December 31, 2008 | segment | segment | segment | segment | segment | Total | ||||||||||||||||||
Revenues | 705,461 | 383,752 | 265,849 | 221,930 | 1,616,663 | 3,193,655 | ||||||||||||||||||
Voyage expenses | 171,599 | – | 5,010 | 1,009 | 580,770 | 758,388 | ||||||||||||||||||
Vessel operating expenses | 175,449 | 227,651 | 68,065 | 48,185 | 134,969 | 654,319 | ||||||||||||||||||
Time charter hire expense | 134,100 | – | 43,048 | – | 434,975 | 612,123 | ||||||||||||||||||
Depreciation and amortization | 117,198 | 91,734 | 44,578 | 58,371 | 106,921 | 418,802 | ||||||||||||||||||
General and administrative(1) | 58,725 | 53,087 | 20,740 | 23,072 | 88,898 | 244,522 | ||||||||||||||||||
Goodwill impairment charge | – | 334,165 | – | – | – | 334,165 | ||||||||||||||||||
Loss (gain) on sale of vessels and equipment, net of write-downs | (3,771 | ) | 12,019 | 4,401 | – | (72,664 | ) | (60,015 | ) | |||||||||||||||
Restructuring charge | 10,645 | – | 1,991 | 634 | 2,359 | 15,629 | ||||||||||||||||||
Income (loss) from vessel operations | 41,516 | (334,904 | ) | 78,016 | 90,659 | 340,435 | 215,722 | |||||||||||||||||
Equity (loss) income | – | (3,079 | ) | 634 | (32,823 | ) | (817 | ) | (36,085 | ) | ||||||||||||||
Investments in joint ventures at December 31, 2008 | – | – | 5,166 | 64,193 | 34,597 | 103,956 | ||||||||||||||||||
Total assets of operating segments at December 31, 2008 | 1,722,432 | 1,331,325 | 951,592 | 2,919,194 | 1,935,537 | 8,860,080 | ||||||||||||||||||
Expenditures for vessels and equipment(2) | 99,638 | 28,205 | 67,837 | 192,955 | 328,130 | 716,765 | ||||||||||||||||||
Shuttle | Fixed- | |||||||||||||||||||||||
Tanker | rate | Liquefied | Spot | |||||||||||||||||||||
and FSO | FPSO | Tanker | gas | Tanker | ||||||||||||||||||||
Year ended December 31, 2007 | segment | segment | segment | segment | segment | Total | ||||||||||||||||||
Revenues | 642,047 | 350,279 | 195,942 | 166,981 | 1,040,258 | 2,395,507 | ||||||||||||||||||
Voyage expenses | 117,571 | – | 2,707 | 109 | 406,921 | 527,308 | ||||||||||||||||||
Vessel operating expenses | 127,372 | 156,264 | 51,458 | 30,239 | 81,813 | 447,146 | ||||||||||||||||||
Time charter hire expense | 160,993 | – | 25,812 | – | 279,676 | 466,481 | ||||||||||||||||||
Depreciation and amortization | 104,936 | 68,047 | 36,018 | 46,018 | 74,094 | 329,113 | ||||||||||||||||||
General and administrative(1) | 60,234 | 36,927 | 18,221 | 20,521 | 95,962 | 231,865 | ||||||||||||||||||
Gain on sale of vessels and equipment, net of write-downs | (16,531 | ) | – | – | – | – | (16,531 | ) | ||||||||||||||||
Income from vessel operations | 87,472 | 89,041 | 61,726 | 70,094 | 101,792 | 410,125 | ||||||||||||||||||
Equity loss | – | – | (2,879 | ) | (130 | ) | (9,395 | ) | (12,404 | ) | ||||||||||||||
Investments in joint ventures at December 31, 2007 | – | 16 | 4,490 | 97,920 | 33,089 | 135,515 | ||||||||||||||||||
Total assets of operating segments at December 31, 2007 | 1,761,547 | 1,426,088 | 795,775 | 3,366,049 | 1,966,166 | 9,315,625 | ||||||||||||||||||
Expenditures for vessels and equipment(2) | 168,207 | 160,792 | 63,698 | 392,779 | 124,828 | 910,304 | ||||||||||||||||||
F-46
Table of Contents
Shuttle | Fixed- | |||||||||||||||||||||||
Tanker | rate | Liquefied | Spot | |||||||||||||||||||||
and FSO | FPSO | Tanker | gas | Tanker | ||||||||||||||||||||
Year ended December 31, 2006 | segment | segment | segment | segment | segment | Total | ||||||||||||||||||
Revenues | 572,392 | 95,455 | 181,605 | 104,489 | 1,059,796 | 2,013,737 | ||||||||||||||||||
Voyage expenses | 89,642 | – | 1,999 | 975 | 430,341 | 522,957 | ||||||||||||||||||
Vessel operating expenses | 90,798 | 36,158 | 44,083 | 18,912 | 58,088 | 248,039 | ||||||||||||||||||
Time charter hire expense | 170,308 | – | 16,869 | – | 214,991 | 402,168 | ||||||||||||||||||
Depreciation and amortization | 83,501 | 22,360 | 32,741 | 33,160 | 52,203 | 223,965 | ||||||||||||||||||
General and administrative(1) | 46,220 | 10,549 | 15,843 | 15,531 | 93,357 | 181,500 | ||||||||||||||||||
Loss (gain) on sale of vessels and equipment—net of write-downs | 698 | – | – | – | (2,039 | ) | (1,341 | ) | ||||||||||||||||
Restructuring charge | – | – | – | – | 8,929 | 8,929 | ||||||||||||||||||
Income from vessel operations | 91,225 | 26,388 | 70,070 | 35,911 | 203,926 | 427,520 | ||||||||||||||||||
Equity income (loss) | 6,231 | (114 | ) | 831 | (226 | ) | (623 | ) | 6,099 | |||||||||||||||
Investments in joint ventures at December 31, 2006 | – | 20 | 5,132 | 86,119 | 33,024 | 124,295 | ||||||||||||||||||
Total assets of operating segments at December 31, 2006 | 1,661,674 | 1,419,503 | 678,033 | 2,481,378 | 1,116,145 | 7,356,733 | ||||||||||||||||||
Expenditures for vessels and equipment(2) | 94,594 | 23,861 | 33,938 | 5,092 | 284,985 | 442,470 | ||||||||||||||||||
(2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). | |
(3) | Excludes vessels purchased as part of the Company’s acquisition of (a) 50% of OMI Corporation in August 2007 and (b) Teekay Petrojarl in October 2006. |
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
$ | $ | |||||||
Total assets of all operating segments | 8,860,080 | 9,315,625 | ||||||
Cash and restricted cash | 821,286 | 446,102 | ||||||
Accounts receivable and other assets | 533,635 | 656,814 | ||||||
Consolidated total assets | 10,215,001 | 10,418,541 | ||||||
3. | Acquisition of additional 35.3% of Teekay Petrojarl ASA |
F-47
Table of Contents
At June 30, | ||||
2008 | ||||
$ | ||||
ASSETS | ||||
Vessels and equipment | 211,021 | |||
Other assets—long-term | (3,575 | ) | ||
Intangible assets subject to amortization | 353 | |||
Goodwill (FPSO segment) | 105,842 | |||
Total assets acquired | 313,641 | |||
LIABILITIES | ||||
In-process revenue contracts | (108,138 | ) | ||
Other long-term liabilities | (2,859 | ) | ||
Total liabilities assumed | (110,997 | ) | ||
Non-controlling interest | 102,305 | |||
Net assets acquired (cash consideration) | 304,949 | |||
F-48
Table of Contents
Pro forma | Pro forma | Pro forma | ||||||||||
year ended | year ended | year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenues(1) | 3,193,655 | 2,395,507 | 2,284,498 | |||||||||
Net (loss) income | (476,597 | ) | 62,454 | 315,304 | ||||||||
Earnings (loss) per common share | ||||||||||||
- Basic | (6.57 | ) | 0.85 | 4.31 | ||||||||
- Diluted | (6.57 | ) | 0.84 | 4.20 | ||||||||
(1) | Revenues from Teekay Petrojarl has been consolidated with the Company’s results since October 1, 2006. |
4. | Acquisition of 50% of OMI Corporation |
F-49
Table of Contents
Original at | Revised at | |||||||||||
August 1, | August 1, | |||||||||||
2007 | Revisions | 2007 | ||||||||||
$ | $ | $ | ||||||||||
ASSETS | ||||||||||||
Cash, cash equivalents and short-term restricted cash | 577 | – | 577 | |||||||||
Other current assets | 67,159 | (43,003 | ) | 24,156 | ||||||||
Vessels and equipment | 923,670 | – | 923,670 | |||||||||
Other assets—long-term | 6,820 | 50,160 | 56,980 | |||||||||
Investment in joint venture | 64,244 | 5,785 | 70,029 | |||||||||
Intangible assets subject to amortization | 60,540 | 8,407 | 68,947 | |||||||||
Goodwill ($25.8 million spot tanker segment, and $7.2 million fixed-rate tanker segment) | 31,961 | 1,045 | 33,006 | |||||||||
Total assets acquired | 1,154,971 | 22,394 | 1,177,365 | |||||||||
LIABILITIES | ||||||||||||
Current liabilities | 21,006 | (1,429 | ) | 19,577 | ||||||||
Other long-term liabilities | – | 15,873 | 15,873 | |||||||||
In-process revenue contracts | 25,402 | (3,811 | ) | 21,591 | ||||||||
Total liabilities assumed | 46,408 | 10,633 | 57,041 | |||||||||
Net assets acquired | 1,108,563 | 11,761 | 1,120,324 | |||||||||
Pro forma | Pro forma | |||||||
year ended | year ended | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
$ | $ | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | 2,533,951 | 2,288,563 | ||||||
Gain on sale of vessels and equipment—net of write-downs | 16,531 | 79,558 | ||||||
Net income | 59,352 | 407,803 | ||||||
Earnings per common share: | ||||||||
- Basic | 0.81 | 5.57 | ||||||
- Diluted | 0.79 | 5.43 | ||||||
5. | Public offerings |
F-50
Table of Contents
Teekay | Teekay | Teekay | Teekay | Teekay | ||||||||||||||||
Tankers | offshore | offshore | LNG | LNG | ||||||||||||||||
initial | follow-on | initial | follow-on | follow-on | ||||||||||||||||
offering | offering | offering | offering | offering | ||||||||||||||||
2007 | 2008 | 2006 | 2008 | 2007 | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Proceeds received | 224,250 | 212,500 | 169,050 | 154,531 | 87,699 | |||||||||||||||
Offering expenses | 16,064 | 6,192 | 13,788 | 6,186 | 3,494 | |||||||||||||||
Net proceeds received | 208,186 | 206,308 | 155,262 | 148,345 | 84,205 | |||||||||||||||
F-51
Table of Contents
F-52
Table of Contents
6. | Goodwill, intangible assets and in-process revenue contracts |
Shuttle | ||||||||||||||||||||||||||||
Tanker | Liquefied | Fixed-rate | Spot | |||||||||||||||||||||||||
and FSO | FPSO | gas | Tanker | Tanker | ||||||||||||||||||||||||
segment | segment | segment | segment | segment | Other | Total | ||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Balance as of December 31, 2006 | 130,908 | 95,461 | 35,631 | 3,648 | – | 1,070 | 266,718 | |||||||||||||||||||||
Adjustment to goodwill acquired (note 3) | – | 132,862 | – | – | – | – | 132,862 | |||||||||||||||||||||
Goodwill acquired (note 4) | – | – | – | – | 36,080 | – | 36,080 | |||||||||||||||||||||
Disposal of reporting unit | – | – | – | – | – | (1,070 | ) | (1,070 | ) | |||||||||||||||||||
Balance as of December 31, 2007 | 130,908 | 228,323 | 35,631 | 3,648 | 36,080 | – | 434,590 | |||||||||||||||||||||
Goodwill acquired (note 3) | – | 105,842 | – | – | – | – | 105,842 | |||||||||||||||||||||
Adjustment to goodwill acquired (note 4) | – | – | – | – | (3,076 | ) | – | (3,076 | ) | |||||||||||||||||||
Goodwill impairment | – | (334,165 | ) | – | – | – | – | (334,165 | ) | |||||||||||||||||||
Reallocation of goodwill acquired between segments | – | – | – | 7,163 | (7,163 | ) | – | – | ||||||||||||||||||||
Balance as of December 31, 2008 | 130,908 | – | 35,631 | 10,811 | 25,841 | – | 203,191 | |||||||||||||||||||||
F-53
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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 | 15.5 | 233,678 | (60,875 | ) | 172,803 | |||||||||||
Other intangible assets | 2.8 | 58,950 | (12,275 | ) | 46,675 | |||||||||||
13.1 | 416,879 | (152,111 | ) | 264,768 | ||||||||||||
Weighted-average | Gross carrying | Accumulated | Net carrying | |||||||||||||
amortization period | amount | amortization | amount | |||||||||||||
(years) | $ | $ | $ | |||||||||||||
Contracts of affreightment | 10.2 | 124,250 | (68,895 | ) | 55,355 | |||||||||||
Time-charter contracts | 16.0 | 232,049 | (37,374 | ) | 194,675 | |||||||||||
Other intangible assets | 5.0 | 49,297 | (875 | ) | 48,422 | |||||||||||
13.7 | 405,596 | (107,144 | ) | 298,452 | ||||||||||||
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7. | Accrued liabilities |
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
$ | $ | |||||||
Voyage and vessel expenses | 196,899 | 142,627 | ||||||
Interest | 45,626 | 40,839 | ||||||
Payroll and benefits and other | 73,462 | 77,251 | ||||||
315,987 | 260,717 | |||||||
8. | Long-term debt |
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
$ | $ | |||||||
Revolving Credit Facilities | 2,656,658 | 2,393,967 | ||||||
Senior Notes (8.875%) due July 15, 2011 | 194,642 | 246,059 | ||||||
USD-denominated Term Loans due through 2021 | 1,670,005 | 2,162,420 | ||||||
Euro-denominated Term Loans due through 2023 | 414,144 | 443,992 | ||||||
USD-denominated Unsecured Demand Loan due to Joint Venture Partners | 17,343 | 17,146 | ||||||
4,952,792 | 5,263,584 | |||||||
Less current portion | 245,043 | 331,594 | ||||||
4,707,749 | 4,931,990 | |||||||
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9. | Leases |
10. | Capital leases and restricted cash |
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Year | Commitment | |||
2009 | $ | 134.4 million | ||
2010 | $ | 8.4 million | ||
2011 | $ | 84.0 million | ||
Year | Commitment | |||
2009 | $ | 24.0 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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Year | Commitment | |||
2009 | 25.6 million Euros ($ | 35.8 million | ) | |
2010 | 26.9 million Euros ($ | 37.6 million | ) | |
2011 | 64.8 million Euros ($ | 90.6 million | ) | |
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11. | Fair value measurements |
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December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | |||||||||||||||||||
carrying | Fair | carrying | Fair | |||||||||||||||||
amount | value | amount | value | |||||||||||||||||
Fair value | asset | asset | asset | asset | ||||||||||||||||
Hierarchy | (liability) | (liability) | (liability) | (liability) | ||||||||||||||||
level | $ | $ | $ | $ | ||||||||||||||||
Cash and cash equivalents, marketable securities, and restricted cash | Level 1 | 1,477,788 | 1,477,788 | 1,175,360 | 1,175,360 | |||||||||||||||
Loans to joint ventures | Level 2 | 28,019 | 28,019 | 729,429 | 729,429 | |||||||||||||||
Long-term debt | Level 1 and 2 | (4,952,792 | ) | (4,537,237 | ) | (5,263,584 | ) | (5,246,670 | ) | |||||||||||
Derivative instruments(note 15) | ||||||||||||||||||||
Interest rate swap agreements | Level 2 | (718,871 | ) | (718,871 | ) | (154,148 | ) | (154,148 | ) | |||||||||||
Interest rate swap agreements | Level 2 | 167,390 | 167,390 | 38,823 | 38,823 | |||||||||||||||
Interest rate swaptions | Level 2 | (27,461 | ) | (27,461 | ) | (2,480 | ) | (2,480 | ) | |||||||||||
Foreign currency contracts | Level 2 | (90,966 | ) | (90,966 | ) | 35,038 | 35,038 | |||||||||||||
Bunker fuel swap contracts | Level 2 | (3,142 | ) | (3,142 | ) | 32 | 32 | |||||||||||||
Forward freight agreements | Level 2 | (604 | ) | (604 | ) | (5,478 | ) | (5,478 | ) | |||||||||||
Foinaven embedded derivative | Level 2 | (9,354 | ) | (9,354 | ) | (19,581 | ) | (19,581 | ) | |||||||||||
12. | Capital stock |
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December 31, 2008 | ||||||||
Options | Weighted-average | |||||||
(000’s) | exercise price | |||||||
# | $ | |||||||
Outstanding-beginning of year | 3,665 | 35.42 | ||||||
Granted | 1,476 | 40.35 | ||||||
Exercised | (179 | ) | 23.54 | |||||
Forfeited | (149 | ) | 38.03 | |||||
Outstanding—end of year | 4,813 | 37.22 | ||||||
Exercisable—end of year | 2,556 | 32.41 | ||||||
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Outstanding options | Exercisable options | |||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | Weighted- | |||||||||||||||||||||
average | average | average | average | |||||||||||||||||||||
Options | remaining | exercise | Options | remaining | exercise | |||||||||||||||||||
(000’s) | life | price | (000’s) | life | price | |||||||||||||||||||
Range of exercise prices | # | (years) | $ | # | (years) | $ | ||||||||||||||||||
$ 8.44—$ 9.99 | 40 | 0.4 | 8.44 | 40 | 0.4 | 8.44 | ||||||||||||||||||
$10.00—$14.99 | 161 | 1.2 | 11.78 | 161 | 1.2 | 11.78 | ||||||||||||||||||
$15.00—$19.99 | 602 | 3.8 | 19.57 | 602 | 3.8 | 19.57 | ||||||||||||||||||
$20.00—$29.99 | 203 | 2.3 | 20.57 | 203 | 2.3 | 20.57 | ||||||||||||||||||
$30.00—$34.99 | 390 | 5.2 | 33.63 | 390 | 5.2 | 33.63 | ||||||||||||||||||
$35.00—$39.99 | 847 | 7.3 | 38.89 | 495 | 7.2 | 38.94 | ||||||||||||||||||
$40.00—$44.99 | 1,393 | 9.2 | 40.41 | 2 | 6.4 | 42.33 | ||||||||||||||||||
$45.00—$49.99 | 411 | 6.2 | 46.80 | 411 | 6.2 | 46.80 | ||||||||||||||||||
$50.00—$59.99 | 763 | 8.2 | 51.40 | 251 | 8.2 | 51.40 | ||||||||||||||||||
$60.00—$64.99 | 3 | 8.3 | 60.96 | 1 | 8.3 | 60.96 | ||||||||||||||||||
4,813 | 6.8 | 37.22 | 2,556 | 5.1 | 32.41 | |||||||||||||||||||
13. | Related party transactions |
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14. | Other (loss) income |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Gain on sale of marketable securities | 4,576 | 9,577 | 1,422 | |||||||||
Write-down of marketable securities | (20,158 | ) | – | – | ||||||||
Gain (loss) on bond repurchase | 3,010 | (947 | ) | (375 | ) | |||||||
Volatile organic compound emission plant lease income | 9,469 | 10,960 | 11,445 | |||||||||
Write-off of deferred debt issuance costs | – | – | (2,790 | ) | ||||||||
Loss on expiry of options to construct LNG carriers | – | – | (6,102 | ) | ||||||||
Miscellaneous (expense) income | (3,633 | ) | 4,087 | (34 | ) | |||||||
Other (loss) income—net | (6,736 | ) | 23,677 | 3,566 | ||||||||
15. | Derivative instruments and hedging activities |
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Average | Fair value/ | |||||||||||||||||||
Contract amount in | contractual | carrying amount of | Expected maturity | |||||||||||||||||
foreign currency | exchange rate(1) | asset/(liability) | 2009 | 2010 | ||||||||||||||||
(millions) | (in millions) | (in millions of U.S. dollars) | ||||||||||||||||||
Norwegian Kroner: | 2,024.6 | 5.93 | $ | (52.2 | ) | $ | 202.1 | $ | 139.5 | |||||||||||
Euro: | 75.9 | 0.67 | $ | (7.7 | ) | $ | 77.6 | $ | 35.6 | |||||||||||
Canadian Dollar: | 94.0 | 1.07 | $ | (10.9 | ) | $ | 50.3 | $ | 37.9 | |||||||||||
British Pounds: | 50.5 | 0.54 | $ | (19.5 | ) | $ | 68.8 | $ | 24.2 | |||||||||||
Australian Dollar: | 3.3 | 1.12 | $ | (0.7 | ) | $ | 3.0 | – | ||||||||||||
(1) | Average contractual exchange rate represents the contractual amount of foreign currency one U.S. Dollar will buy. |
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Weighted- | ||||||||||||||||||||
Fair value/ | average | Fixed | ||||||||||||||||||
Principal | carrying amount of | remaining | interest | |||||||||||||||||
Interest | amount | asset/(liability) | term | rate | ||||||||||||||||
rate index | $ | $ | (years) | (%)(1) | ||||||||||||||||
LIBOR-Based Debt: | ||||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 478,825 | (110,492 | ) | 28.1 | 4.9 | ||||||||||||||
U.S. Dollar-denominated interest rate swaps | LIBOR | 2,830,326 | (396,784 | ) | 7.0 | 5.1 | ||||||||||||||
U.S. Dollar-denominated interest rate swaps(3) | LIBOR | 908,536 | (208,227 | ) | 18.6 | 5.3 | ||||||||||||||
LIBOR-Based Restricted Cash Deposit: | ||||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(2) | LIBOR | 477,135 | 167,390 | 28.1 | 4.8 | |||||||||||||||
EURIBOR-Based Debt: | ||||||||||||||||||||
Euro-denominated interest rate swaps(4)(5) | EURIBOR | 414,144 | (3,368 | ) | 15.5 | 3.8 | ||||||||||||||
(5) | Excludes the margins the Company pays on its variable-rate debt, which at of December 31, 2008 ranged from 0.3% to 1.0%. | |
(6) | Principal amount reduces quarterly. | |
(7) | Inception dates of swaps are 2009 ($408.5 million), 2010 ($300.0 million) and 2011 ($200.0 million). | |
(8) | Principal amount reduces monthly to 70.1 million Euros ($97.9 million) by the maturity dates of the swap agreements. | |
(9) | Principal amount is the U.S. Dollar equivalent of 296.4 million Euro. |
Fixed | ||||||||||||||||
Principal | Remaining | interest | ||||||||||||||
amount(1) | term | rate | ||||||||||||||
Interest rate index | $ | Start date | (years) | (%) | ||||||||||||
LIBOR | 150,000 | August 31, 2009 | 12.0 | 4.3 | ||||||||||||
LIBOR | 109,375 | November 15, 2008 | 10.3 | 4.0 | ||||||||||||
(1) | Principal amount reduces $5.0 million semi-annually ($150.0 million) and $2.6 million quarterly ($109.4 million). |
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16. | Commitments and contingencies |
a) | Vessels under construction |
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b) | Joint ventures |
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c) | Legal proceedings and claims |
d) | Other |
17. | Supplemental cash flow information |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Accounts receivable | (50,851 | ) | (44,837 | ) | (15,417 | ) | ||||||
Prepaid expenses and other assets | 30,161 | (28,655 | ) | (21,909 | ) | |||||||
Accounts payable | (29,718 | ) | 18,588 | 19,262 | ||||||||
Accrued and other liabilities | 21,592 | 11,033 | 68,424 | |||||||||
(28,816 | ) | (43,871 | ) | 50,360 | ||||||||
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18. | Vessel sales and write-downs on Vessels and equipment |
a) | Vessel sales |
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b) | Vessels and equipment write-downs |
19. | Earnings (loss) per share |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Net (loss) income available for common stockholders | (469,455 | ) | 63,543 | 302,824 | ||||||||
Weighted average number of common shares | 72,493,429 | 73,382,197 | 73,180,193 | |||||||||
Dilutive effect of employee stock options and restricted stock awards | – | 1,317,879 | 1,589,914 | |||||||||
Dilutive effect of equity units | – | 35,280 | 358,617 | |||||||||
Common stock and common stock equivalents | 72,493,429 | 74,735,356 | 75,128,724 | |||||||||
Earnings (loss) per common share: | ||||||||||||
- Basic | (6.48 | ) | 0.87 | 4.14 | ||||||||
- Diluted | (6.48 | ) | 0.85 | 4.03 | ||||||||
20. | Valuation and qualifying accounts |
Balance at | Balance at | |||||||
beginning of year | end of year | |||||||
$ | $ | |||||||
Allowance for bad debts: | ||||||||
Year ended December 31, 2007 | 1,765 | 1,256 | ||||||
Year ended December 31, 2008 | 1,256 | 1,567 | ||||||
Restructuring cost accrual: | ||||||||
Year ended December 31, 2007 | 2,147 | – | ||||||
Year ended December 31, 2008 | – | – | ||||||
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21. | Income taxes |
Year ended December 31, | ||||||||
2008 | 2007 | |||||||
Balance of unrecognized tax benefits as at January 1, | 8,630 | 1,000 | ||||||
Increase for positions taken in prior years | – | – | ||||||
Increases for positions related to the current year | 3,602 | 7,630 | ||||||
Amounts of decreases related to settlements | (5,000 | ) | – | |||||
Reductions due to lapse of statues of limitations | – | – | ||||||
Balance of unrecognized tax benefits as at December 31, | 7,232 | 8,630 | ||||||
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December 31, | December 31, | |||||||
2008 | 2007 | |||||||
$ | $ | |||||||
Deferred tax assets: | ||||||||
Vessels and equipment | 64,080 | 124,970 | ||||||
Tax losses carried forward(1) | 163,369 | 223,836 | ||||||
Other | 28,265 | 24,941 | ||||||
Total deferred tax assets | 255,714 | 373,747 | ||||||
Deferred tax liabilities: | ||||||||
Vessels and equipment | 50,231 | 84,198 | ||||||
Long-term debt | 11,505 | 94,071 | ||||||
Unrealized foreign exchange | – | 17,215 | ||||||
Total deferred tax liabilities | 61,736 | 195,484 | ||||||
Net deferred tax assets | 193,978 | 178,263 | ||||||
Valuation allowance | (200,160 | ) | (253,238 | ) | ||||
Net deferred tax assets and liabilities(2) | (6,182 | ) | (74,975 | ) | ||||
(1) | Substantially all of the Company’s net operating loss carryforwards of $630.0 million relate to its Australian ship-owning subsidiaries and its Norwegian subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely. | |
(2) | The change in the net deferred tax liabilities is related to the change in temporary differences and foreign exchange gains. |
Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Current | (796 | ) | (5,264 | ) | (8,386 | ) | ||||||
Deferred | 56,972 | 8,456 | (425 | ) | ||||||||
Income tax recovery (expense) | 56,176 | 3,192 | (8,811 | ) | ||||||||
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Year ended | Year ended | Year ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2008 | 2007 | 2006 | ||||||||||
$ | $ | $ | ||||||||||
Net (loss) income before taxes | (516,070 | ) | 69,254 | 318,394 | ||||||||
Net (loss) income not subject to taxes | (712,237 | ) | 122,170 | 382,373 | ||||||||
Net income (loss) subject to taxes | 196,167 | (52,916 | ) | (63,979 | ) | |||||||
At applicable statutory tax rates | 46,893 | (13,394 | ) | (23,096 | ) | |||||||
Permanent differences and adjustments related to currency differences | (53,137 | ) | 22,708 | 12,682 | ||||||||
Temporary differences and adjustments to valuation allowance | (47,763 | ) | (7,285 | ) | 19,030 | |||||||
Other | (2,169 | ) | (5,221 | ) | 195 | |||||||
Tax (recovery) charge related to current year | (56,176 | ) | (3,192 | ) | 8,811 | |||||||
22. | Restructuring charge |
23. | Subsequent events |
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