Table of Contents
SECURITIES AND EXCHANGE COMMISSION
the Securities Exchange Act of 1934
69 Pitts Bay Road
Hamilton, HM 08 Bermuda
(Address of principal executive office)
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Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
REVENUES | 564,537 | 616,551 | ||||||
OPERATING EXPENSES | ||||||||
Voyage expenses | 72,550 | 90,669 | ||||||
Vessel operating expenses(note 16) | 154,535 | 152,760 | ||||||
Time-charter hire expense | 70,913 | 136,828 | ||||||
Depreciation and amortization | 108,230 | 106,553 | ||||||
General and administrative(note 16) | 48,091 | 47,708 | ||||||
Loss on sale of vessels and equipment — net of write-downs (note 13) | 760 | 958 | ||||||
Restructuring charge (note 3) | 3,783 | 5,558 | ||||||
Total operating expenses | 458,862 | 541,034 | ||||||
Income from vessel operations | 105,675 | 75,517 | ||||||
OTHER ITEMS | ||||||||
Interest expense | (32,152 | ) | (43,767 | ) | ||||
Interest income | 4,274 | 6,678 | ||||||
Realized and unrealized (loss) gain on non-designated derivative instruments(note 16) | (87,847 | ) | 46,822 | |||||
Equity (loss) income from joint ventures(note 11b) | (2,666 | ) | 11,422 | |||||
Foreign exchange gain (notes 8 and 16) | 29,026 | 11,312 | ||||||
Loss on bond repurchase(note 8) | (12,108 | ) | — | |||||
Other income (note 14) | 2,422 | 2,658 | ||||||
Net income before income taxes | 6,624 | 110,642 | ||||||
Income tax recovery (expense)(note 18) | 7,307 | (5,868 | ) | |||||
Net income | 13,931 | 104,774 | ||||||
Less: Net income attributable to non-controlling interests | (27,933 | ) | (23,269 | ) | ||||
Net (loss) income attributable to stockholders of Teekay Corporation | (14,002 | ) | 81,505 | |||||
Per common share of Teekay Corporation(note 17) | ||||||||
• Basic (loss) earnings attributable to stockholders of Teekay Corporation | (0.19 | ) | 1.12 | |||||
• Diluted (loss) earnings attributable to stockholders of Teekay Corporation | (0.19 | ) | 1.12 | |||||
• Cash dividends declared | 0.3163 | 0.3163 | ||||||
Weighted average number of common shares outstanding(note 17) | ||||||||
• Basic | 72,788,591 | 72,516,193 | ||||||
• Diluted | 72,788,591 | 72,745,781 |
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As at | As at | |||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents(note 8) | 635,361 | 422,510 | ||||||
Restricted cash(note 9) | 35,001 | 36,068 | ||||||
Accounts receivable, including non-trade of $36,007 (2009 — $19,521) | 248,251 | 234,676 | ||||||
Vessels held for sale (note 13) | 16,725 | 10,250 | ||||||
Net investment in direct financing leases(note 4) | 27,661 | 27,210 | ||||||
Prepaid expenses | 106,452 | 96,549 | ||||||
Current portion of derivative assets(note 16) | 28,573 | 29,996 | ||||||
Other assets | 6,977 | 7,119 | ||||||
Total current assets | 1,105,001 | 864,378 | ||||||
Restricted cash — long-term(note 9) | 573,256 | 579,243 | ||||||
Vessels and equipment(note 8) | ||||||||
At cost, less accumulated depreciation of $1,760,671 (2009 — $1,673,380) | 5,727,879 | 5,793,864 | ||||||
Vessels under capital leases, at cost, less accumulated amortization of $146,850 (2009 — $138,569)(note 9) | 896,506 | 903,521 | ||||||
Advances on newbuilding contracts(notes 11a and 11b) | 176,680 | 138,212 | ||||||
Total vessels and equipment | 6,801,065 | 6,835,597 | ||||||
Net investment in direct financing leases — non-current(note 4) | 482,855 | 485,202 | ||||||
Marketable securities | 17,127 | 18,904 | ||||||
Loans to joint ventures, bearing interest between 4.4% to 6.5% | 20,384 | 21,998 | ||||||
Derivative assets(note 16) | 19,471 | 18,119 | ||||||
Deferred income tax asset (note 18) | 6,765 | 6,516 | ||||||
Investment in joint ventures(note 11b) | 137,422 | 139,790 | ||||||
Other non-current assets | 131,902 | 130,624 | ||||||
Intangible assets — net(note 6) | 206,437 | 213,870 | ||||||
Goodwill(note 6) | 203,191 | 203,191 | ||||||
Total assets | 9,704,876 | 9,517,432 | ||||||
LIABILITIES AND EQUITY | ||||||||
Current | ||||||||
Accounts payable | 58,066 | 57,242 | ||||||
Accrued liabilities(note 16) | 262,316 | 289,757 | ||||||
Current portion of derivative liabilities(note 16) | 141,457 | 136,454 | ||||||
Current portion of long-term debt(note 8) | 242,772 | 231,209 | ||||||
Current obligation under capital leases(note 9) | 40,942 | 41,016 | ||||||
Current portion of in-process revenue contracts(note 6) | 56,402 | 56,758 | ||||||
Loan from joint venture partners | 130 | 1,294 | ||||||
Total current liabilities | 802,085 | 813,730 | ||||||
Long-term debt, including amounts due to joint venture partners of $13,338 (2009 — $16,410)(note 8) | 4,287,951 | 4,187,962 | ||||||
Long-term obligation under capital leases(note 9) | 736,002 | 743,254 | ||||||
Derivative liabilities(note 16) | 270,636 | 223,025 | ||||||
Deferred income tax liability (note 18) | 2,927 | 11,628 | ||||||
Asset retirement obligation | 21,172 | 22,092 | ||||||
In-process revenue contracts(note 6) | 174,523 | 187,602 | ||||||
Other long-term liabilities | 218,490 | 232,469 | ||||||
Total liabilities | 6,513,786 | 6,421,762 | ||||||
Commitments and contingencies(notes 4, 9, 11 and 16) | ||||||||
Redeemable non-controlling interest(note 11d) | 43,133 | — | ||||||
Equity | ||||||||
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 72,943,838 shares outstanding (2009 — 72,694,345); 73,443,038 shares issued (2009 — 73,193,545))(note 10) | 668,155 | 656,193 | ||||||
Retained earnings | 1,566,592 | 1,585,431 | ||||||
Non-controlling interest | 918,642 | 855,580 | ||||||
Accumulated other comprehensive loss(note 15) | (5,432 | ) | (1,534 | ) | ||||
Total equity | 3,147,957 | 3,095,670 | ||||||
Total liabilities and equity | 9,704,876 | 9,517,432 | ||||||
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Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Cash and cash equivalents provided by (used for) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | 13,931 | 104,774 | ||||||
Non-cash items: | ||||||||
Depreciation and amortization | 108,230 | 106,553 | ||||||
Amortization of in-process revenue contracts | (13,435 | ) | (19,055 | ) | ||||
Loss (gain) on sale of vessels and equipment | 239 | (118 | ) | |||||
Write-down of intangible assets and other | — | 1,076 | ||||||
Write-down of vessels and equipment | 521 | — | ||||||
Loss on repurchase of bonds | 12,108 | — | ||||||
Equity loss (income) | 2,666 | (11,442 | ) | |||||
Income tax (recovery) expense | (7,307 | ) | 5,868 | |||||
Employee stock option compensation | 3,923 | 3,637 | ||||||
Foreign exchange gain and other | (23,884 | ) | (26,541 | ) | ||||
Unrealized loss (gain) on derivative instruments | 49,763 | (77,717 | ) | |||||
Change in operating assets and liabilities (note 7) | (48,279 | ) | 58,261 | |||||
Expenditures for drydocking | (3,695 | ) | (8,464 | ) | ||||
Net operating cash flow | 94,781 | 136,832 | ||||||
FINANCING ACTIVITIES | ||||||||
Proceeds from issuance of long-term debt(note 8) | 771,249 | 182,872 | ||||||
Debt issuance costs | (9,565 | ) | (332 | ) | ||||
Scheduled repayments of long-term debt | (38,413 | ) | (47,500 | ) | ||||
Prepayments of long-term debt | (609,928 | ) | (261,250 | ) | ||||
Repayments of capital lease obligations | (727 | ) | (2,300 | ) | ||||
Proceeds from loans from joint venture partner | 591 | 1,188 | ||||||
Repayment of loans from joint venture partner | (1,164 | ) | (1,257 | ) | ||||
(Increase) decrease in restricted cash | (428 | ) | 6,734 | |||||
Net proceeds from issuance of Teekay LNG Partners L.P. units | — | 68,524 | ||||||
Net proceeds from issuance of Teekay Offshore Partners L.P. units (note 5) | 94,114 | — | ||||||
Issuance of Common Stock upon exercise of stock options | 1,974 | 1,885 | ||||||
Distribution from subsidiaries to non-controlling interests | (33,083 | ) | (26,154 | ) | ||||
Cash dividends paid | (22,999 | ) | (22,928 | ) | ||||
Net financing cash flow | 151,621 | (100,518 | ) | |||||
INVESTING ACTIVITIES | ||||||||
Expenditures for vessels and equipment(note 7) | (44,696 | ) | (171,303 | ) | ||||
Proceeds from sale of vessels and equipment | 10,045 | 83,405 | ||||||
Investment in joint ventures | (145 | ) | 88 | |||||
Advances to joint ventures | 651 | 273 | ||||||
Investment in direct financing lease assets | (4,199 | ) | — | |||||
Direct financing lease payments received | 4,827 | 5,596 | ||||||
Other investing activities | (34 | ) | 1,912 | |||||
Net investing cash flow | (33,551 | ) | (80,029 | ) | ||||
Increase (decrease) in cash and cash equivalents | 212,851 | (43,715 | ) | |||||
Cash and cash equivalents, beginning of the period | 422,510 | 814,165 | ||||||
Cash and cash equivalents, end of the period | 635,361 | 770,450 | ||||||
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TOTAL EQUITY | ||||||||||||||||||||||||
Common | Accumulated | |||||||||||||||||||||||
Thousands | Stock and | Other | ||||||||||||||||||||||
of Common | Additional | Comprehensive | Non- | |||||||||||||||||||||
Shares | Paid-in | Retained | Income | controlling | ||||||||||||||||||||
Outstanding | Capital | Earnings | (Loss) | Interest | Total | |||||||||||||||||||
# | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance as at December 31, 2009 | 72,694 | 656,193 | 1,585,431 | (1,534 | ) | 855,580 | 3,095,670 | |||||||||||||||||
Net (loss) income | (14,002 | ) | 27,933 | 13,931 | ||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Unrealized loss on marketable securities | (1,777 | ) | (1,777 | ) | ||||||||||||||||||||
Pension adjustments, net of taxes | 349 | 349 | ||||||||||||||||||||||
Unrealized net loss on qualifying cash flow hedging instruments(note 16) | (3,265 | ) | (675 | ) | (3,940 | ) | ||||||||||||||||||
Realized net loss on qualifying cash flow hedging instruments(note 16) | 795 | 218 | 1,013 | |||||||||||||||||||||
Comprehensive income | 27,476 | 9,576 | ||||||||||||||||||||||
Dividends declared | (23,003 | ) | (33,083 | ) | (56,086 | ) | ||||||||||||||||||
Reinvested dividends | 2 | 4 | 4 | |||||||||||||||||||||
Exercise of stock options and other | 247 | 1,973 | 1,973 | |||||||||||||||||||||
Employee stock option compensation and other(note 10) | 9,985 | 9,985 | ||||||||||||||||||||||
Dilution gain on equity offering of Teekay Offshore(note 5) | 23,342 | 23,342 | ||||||||||||||||||||||
Dilution loss on initiation of majority owned subsidiary(note 11d) | (5,176 | ) | (2,256 | ) | (7,432 | ) | ||||||||||||||||||
Addition of non-controlling interest from unit issuances and other | 70,925 | 70,925 | ||||||||||||||||||||||
Balance as at March 31, 2010 | 72,943 | 668,155 | 1,566,592 | (5,432 | ) | 918,642 | 3,147,957 | |||||||||||||||||
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Three Months Ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Net income | 13,931 | 104,774 | ||||||
Other comprehensive (loss) income: | ||||||||
Unrealized loss on marketable securities | (1,777 | ) | (2,441 | ) | ||||
Pension adjustments | 349 | 437 | ||||||
Unrealized loss on qualifying cash flow hedging instruments | (3,940 | ) | (117 | ) | ||||
Realized loss on qualifying cash flow hedging instruments | 1,013 | 12,744 | ||||||
Other comprehensive (loss) income | (4,355 | ) | 10,623 | |||||
Comprehensive income | 9,576 | 115,397 | ||||||
Less: Comprehensive income attributable to non-controlling interests | (27,476 | ) | (25,226 | ) | ||||
Comprehensive (loss) income attributable to stockholders of Teekay Corporation | (17,900 | ) | 90,171 | |||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Shuttle | ||||||||||||||||||||
Tanker and | Liquefied | Conventional | ||||||||||||||||||
FSO | FPSO | Gas | Tanker | |||||||||||||||||
Three months ended March 31, 2010 | Segment | Segment | Segment | Segment | Total | |||||||||||||||
Revenues(1) | 162,069 | 125,877 | 62,534 | 214,057 | 564,537 | |||||||||||||||
Voyage expenses | 29,303 | — | (27 | ) | 43,274 | 72,550 | ||||||||||||||
Vessel operating expenses | 43,321 | 47,965 | 11,370 | 51,879 | 154,535 | |||||||||||||||
Time-charter hire expense | 25,038 | — | — | 45,875 | 70,913 | |||||||||||||||
Depreciation and amortization | 30,559 | 23,748 | 15,527 | 38,396 | 108,230 | |||||||||||||||
General and administrative(2) | 12,145 | 8,826 | 4,771 | 22,349 | 48,091 | |||||||||||||||
Loss on sale of vessels and equipment, net of write-downs | — | — | — | 760 | 760 | |||||||||||||||
Restructuring charge | 325 | — | 119 | 3,339 | 3,783 | |||||||||||||||
Income from vessel operations | 21,378 | 45,338 | 30,774 | 8,185 | 105,675 | |||||||||||||||
Total assets of operating segments at March 31, 2010 | 1,700,867 | 1,201,301 | 2,836,617 | 2,844,239 | 8,583,024 |
Shuttle | ||||||||||||||||||||
Tanker and | Liquefied | Conventional | ||||||||||||||||||
FSO | FPSO | Gas | Tanker | |||||||||||||||||
Three months ended March 31, 2009 | Segment | Segment | Segment | Segment | Total | |||||||||||||||
Revenues | 155,688 | 86,103 | 57,583 | 317,177 | 616,551 | |||||||||||||||
Voyage expenses | 18,408 | — | 292 | 71,969 | 90,669 | |||||||||||||||
Vessel operating expenses | 45,784 | 44,429 | 11,787 | 50,760 | 152,760 | |||||||||||||||
Time charter hire expense | 32,178 | — | — | 104,650 | 136,828 | |||||||||||||||
Depreciation and amortization | 29,252 | 25,779 | 14,598 | 36,924 | 106,553 | |||||||||||||||
General and administrative(2) | 13,129 | 9,786 | 5,158 | 19,635 | 47,708 | |||||||||||||||
Loss on sale of vessels and equipment, net of write-downs | — | — | — | 958 | 958 | |||||||||||||||
Restructuring charge | 2,762 | — | 2,182 | 614 | 5,558 | |||||||||||||||
Income from vessel operations | 14,175 | 6,109 | 23,566 | 31,667 | 75,517 | |||||||||||||||
Total assets of operating segments at March 31, 2009 | 1,696,664 | 1,309,747 | 2,910,847 | 2,879,882 | 8,797,140 |
(1) | FPSO segment includes $30 million in revenue related to operations in previous years as a result of executing a contract amendment during the three months ended March 31, 2010. | |
(2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
March 31, 2010 | December 31, 2009 | |||||||
$ | $ | |||||||
Total assets of all segments | 8,583,024 | 8,640,315 | ||||||
Cash and restricted cash | 635,361 | 422,510 | ||||||
Accounts receivable and other assets | 486,491 | 454,607 | ||||||
Consolidated total assets | 9,704,876 | 9,517,432 | ||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Head Lease | Sublease | |||||||
Year | Receipts(1) | Payments(1) | ||||||
Remainder of 2010 | $ | 21,667 | $ | 18,804 | ||||
2011 | $ | 28,875 | $ | 25,072 | ||||
2012 | $ | 28,860 | $ | 25,072 | ||||
2013 | $ | 28,843 | $ | 25,072 | ||||
2014 | $ | 28,828 | $ | 25,072 | ||||
Thereafter | $ | 303,735 | $ | 357,387 | ||||
Total | $ | 440,808 | $ | 476,479 |
(1) | The Head Leases are fixed-rate operating leases while the Subleases are variable-rate operating leases. |
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Total minimum lease payments to be received | 849,903 | 869,268 | ||||||
Estimated unguaranteed residual value of leased properties | 203,465 | 203,465 | ||||||
Initial direct costs and other | 1,933 | 1,134 | ||||||
Less unearned revenue | (544,785 | ) | (561,455 | ) | ||||
Total | 510,516 | 512,412 | ||||||
Less current portion | 27,661 | 27,210 | ||||||
Total | 482,855 | 485,202 | ||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, other than share data)
Weighted-Average | Gross Carrying | Accumulated | Net Carrying | |||||||||||||
Amortization Period | Amount | Amortization | Amount | |||||||||||||
(Years) | $ | $ | $ | |||||||||||||
As at March 31, 2010: | ||||||||||||||||
Contracts of affreightment | 10.2 | 124,251 | (90,134 | ) | 34,117 | |||||||||||
Time-charter contracts | 16.0 | 230,668 | (88,038 | ) | 142,630 | |||||||||||
Vessel purchase options | — | 23,900 | — | 23,900 | ||||||||||||
Other intangible assets | 4.5 | 11,430 | (5,640 | ) | 5,790 | |||||||||||
12.9 | 390,249 | (183,812 | ) | 206,437 | ||||||||||||
As at December 31, 2009: | ||||||||||||||||
Contracts of affreightment | 10.2 | 124,251 | (88,015 | ) | 36,236 | |||||||||||
Time-charter contracts | 16.0 | 231,221 | (83,823 | ) | 147,398 | |||||||||||
Vessel purchase options | — | 23,900 | — | 23,900 | ||||||||||||
Other intangible assets | 2.8 | 20,731 | (14,395 | ) | 6,336 | |||||||||||
12.6 | 400,103 | (186,233 | ) | 213,870 | ||||||||||||
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Accounts receivable | (13,575 | ) | 103,119 | |||||
Prepaid expenses and other assets | (9,761 | ) | 15,034 | |||||
Accounts payable | 824 | (5,934 | ) | |||||
Accrued and other liabilities | (25,767 | ) | (53,958 | ) | ||||
(48,279 | ) | 58,261 | ||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
March 31, 2010 | December 31, 2009 | |||||||
$ | $ | |||||||
Revolving Credit Facilities | 1,958,314 | 1,975,360 | ||||||
Senior Notes (8.875%) due July 15, 2011 | 25,551 | 177,004 | ||||||
Senior Notes (8.5%) due January 15, 2020 | 446,363 | — | ||||||
USD-denominated Term Loans due through 2022 | 1,701,081 | 1,837,980 | ||||||
Euro-denominated Term Loans due through 2023 | 386,076 | 412,417 | ||||||
USD-denominated Unsecured Demand Loan due to Joint Venture Partners | 13,338 | 16,410 | ||||||
4,530,723 | 4,419,171 | |||||||
Less current portion | 242,772 | 231,209 | ||||||
4,287,951 | 4,187,962 | |||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
RasGas II LNG Carriers | 470,284 | 470,138 | ||||||
Spanish-Flagged LNG Carrier | 113,961 | 119,068 | ||||||
Suezmax Tankers | 192,699 | 195,064 | ||||||
Total | 776,944 | 784,270 | ||||||
Less current portion | 40,942 | 41,016 | ||||||
Total | 736,002 | 743,254 | ||||||
Year | Commitment | |||
Remainder of 2010 | $ | 18,000 | ||
2011 | $ | 24,000 | ||
2012 | $ | 24,000 | ||
2013 | $ | 24,000 | ||
2014 | $ | 24,000 | ||
Thereafter | $ | 929,000 |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Year | Commitment | |||
Remainder of 2010 | 26,900 Euros ($36,400 | ) | ||
2011 | 64,800 Euros ($87,600 | ) |
Year | Commitment | |||
Remainder of 2010 | $ | 17,700 | ||
2011 | $ | 197,900 |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
March 31, 2010 | December 31, 2009 | |||||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||||
Fair Value | Amount | Value | Amount | Value | ||||||||||||||
Hierarchy | Asset (Liability) | Asset (Liability) | Asset (Liability) | Asset (Liability) | ||||||||||||||
Level(1) | $ | $ | $ | $ | ||||||||||||||
Cash and cash equivalents, restricted cash, and marketable securities | Level 1 | 1,260,745 | 1,260,745 | 1,056,725 | 1,056,725 | |||||||||||||
Vessels held for sale | 16,725 | 17,300 | 10,250 | 10,250 | ||||||||||||||
Loans to joint ventures | 20,384 | 20,384 | 21,998 | 21,998 | ||||||||||||||
Loans from joint venture partners | (130 | ) | (130 | ) | (1,294 | ) | (1,294 | ) | ||||||||||
Long-term debt | (4,530,723 | ) | (4,208,555 | ) | (4,419,171 | ) | (4,055,367 | ) | ||||||||||
Derivative instruments(note 16)(2) | ||||||||||||||||||
Interest rate swap agreements(3) | Level 2 | (432,682 | ) | (432,682 | ) | (378,407 | ) | (378,407 | ) | |||||||||
Interest rate swap agreements(3) | Level 2 | 40,145 | 40,145 | 36,744 | 36,744 | |||||||||||||
Foreign currency contracts | Level 2 | 1,311 | 1,311 | 10,461 | 10,461 | |||||||||||||
Bunker fuel swap contracts | Level 2 | 501 | 501 | 612 | 612 | |||||||||||||
Forward freight agreements | Level 2 | 2,752 | 2,752 | (504 | ) | (504 | ) | |||||||||||
Foinaven embedded derivative | Level 2 | (9,680 | ) | (9,680 | ) | (8,769 | ) | (8,769 | ) |
(1) | The fair value hierarchy level is only applicable to each financial instrument on the consolidated balance sheets that are recorded at fair value on a recurring basis. | |
(2) | 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. | |
(3) | The fair value of the Company’s interest rate swap agreements includes $33.6 million of net accrued interest which is recorded in accrued liabilities on the consolidated balance sheet. |
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Volatile organic compound emission plant lease income | 1,430 | 1,894 | ||||||
Miscellaneous income | 992 | 764 | ||||||
Other income | 2,422 | 2,658 | ||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Unrealized gain on qualifying cash flow hedging instruments | 454 | 2,923 | ||||||
Pension adjustments, net of tax recoveries | (9,946 | ) | (10,294 | ) | ||||
Unrealized gain on marketable securities | 4,060 | 5,837 | ||||||
(5,432 | ) | (1,534 | ) | |||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Fair Value / Carrying Amount | ||||||||||||||||||||||||||||
Contract Amount | of Asset / (Liability) | Expected Maturity | ||||||||||||||||||||||||||
In Foreign | Average | Remainder of | ||||||||||||||||||||||||||
Currency | Forward | Hedge | Non-Hedge | 2010 | 2011 | 2012 | ||||||||||||||||||||||
(millions) | Rate(1) | (in millions of U.S. Dollars) | (in millions of U.S. Dollars) | |||||||||||||||||||||||||
Norwegian Kroner | 1,307.0 | 6.12 | $ | 4.1 | $ | (0.4 | ) | $ | 121.8 | $ | 73.6 | $ | 18.1 | |||||||||||||||
Euro | 62.8 | 0.71 | (1.5 | ) | (2.1 | ) | 49.0 | 33.5 | 5.9 | |||||||||||||||||||
Canadian Dollar | 42.5 | 1.10 | 3.2 | — | 31.9 | 6.7 | — | |||||||||||||||||||||
British Pounds | 43.3 | 0.64 | (1.8 | ) | (0.2 | ) | 39.6 | 24.0 | 4.1 | |||||||||||||||||||
$ | 4.0 | $ | (2.7 | ) | $ | 242.3 | $ | 137.8 | $ | 28.1 | ||||||||||||||||||
(1) | Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy. |
Fair Value / | Weighted- | |||||||||||||||||
Carrying Amount | Average | Fixed | ||||||||||||||||
Interest | Principal | of Asset / | Remaining | Interest | ||||||||||||||
Rate | Amount | (Liability)(1) | Term | Rate | ||||||||||||||
Index | $ | $ | (Years) | (%)(2) | ||||||||||||||
LIBOR-Based Debt: | ||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(3) | LIBOR | 450,271 | (40,717 | ) | 26.8 | 4.9 | ||||||||||||
U.S. Dollar-denominated interest rate swaps | LIBOR | 3,422,307 | (351,498 | ) | 9.4 | 4.7 | ||||||||||||
U.S. Dollar-denominated interest rate swaps(4) | LIBOR | 200,000 | (21,296 | ) | 20.0 | 5.7 | ||||||||||||
LIBOR-Based Restricted Cash Deposit: | ||||||||||||||||||
U.S. Dollar-denominated interest rate swaps(3) | LIBOR | 473,104 | 40,145 | 26.8 | 4.8 | |||||||||||||
EURIBOR-Based Debt: | ||||||||||||||||||
Euro-denominated interest rate swaps(5) (6) | EURIBOR | 386,076 | (19,171 | ) | 14.2 | 3.8 |
(1) | The fair value of the Company’s interest rate swap agreements includes $33.6 million of accrued interest which is recorded in accrued liabilities on the consolidated balance sheet. | |
(2) | Excludes the margins the Company pays on its variable-rate debt, which at of March 31, 2010 ranged from 0.30% to 3.25%. | |
(3) | Principal amount reduces quarterly. | |
(4) | Inception dates of swaps in 2011 ($200.0 million). | |
(5) | Principal amount reduces monthly to 70.1 million Euros ($94.7 million) by the maturity dates of the swap agreements. | |
(6) | Principal amount is the U.S. Dollar equivalent of 285.8 million Euros. |
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Current | Current | |||||||||||||||||||
Portion of | Portion of | |||||||||||||||||||
Derivative | Derivative | Accrued | Derivative | Derivative | ||||||||||||||||
Assets | Assets | Liabilities | Liabilities | Liabilities | ||||||||||||||||
As at March 31, 2010: | ||||||||||||||||||||
Derivatives designated as a cash flow hedge: | ||||||||||||||||||||
Foreign currency contracts | 7,862 | 34 | — | (3,141 | ) | (801 | ) | |||||||||||||
Derivative not designated as a cash flow hedge: | ||||||||||||||||||||
Foreign currency contracts | 642 | 44 | — | (2,618 | ) | (712 | ) | |||||||||||||
Interest rate swaps | 16,816 | 19,393 | (33,567 | ) | (135,698 | ) | (259,443 | ) | ||||||||||||
Forward freight agreements | 2,752 | — | — | — | — | |||||||||||||||
Bunker fuel swap contracts | 501 | — | — | — | — | |||||||||||||||
Foinaven embedded derivative | — | — | — | — | (9,680 | ) | ||||||||||||||
28,573 | 19,471 | (33,567 | ) | (141,457 | ) | (270,636 | ) | |||||||||||||
As at December 31, 2009: | ||||||||||||||||||||
Derivatives designated as a cash flow hedge: | ||||||||||||||||||||
Foreign currency contracts | 11,697 | 250 | — | (2,021 | ) | (71 | ) | |||||||||||||
Derivative not designated as a cash flow hedge: | ||||||||||||||||||||
Foreign currency contracts | 1,351 | 174 | — | (705 | ) | (214 | ) | |||||||||||||
Interest rate swaps | 16,336 | 17,695 | (28,499 | ) | (133,224 | ) | (213,971 | ) | ||||||||||||
Forward freight agreements | — | — | — | (504 | ) | — | ||||||||||||||
Bunker fuel swap contracts | 612 | — | — | — | — | |||||||||||||||
Foinaven embedded derivative | — | — | — | — | (8,769 | ) | ||||||||||||||
29,996 | 18,119 | (28,499 | ) | (136,454 | ) | (223,025 | ) | |||||||||||||
Three Months Ended March 31, 2010 | Three Months Ended March 31, 2009 | |||||||||||||||||||||||||||||
Balance | Balance | |||||||||||||||||||||||||||||
Sheet | Sheet | |||||||||||||||||||||||||||||
(AOCI) | Statement of Income (Loss) | (AOCI) | Statement of Income (Loss) | |||||||||||||||||||||||||||
Effective | Effective | Ineffective | Effective | Effective | Ineffective | |||||||||||||||||||||||||
Portion | Portion | Portion | Portion | Portion | Portion | |||||||||||||||||||||||||
(3,940 | ) | (374 | ) | (2,082 | ) | Vessel operating expenses | (117 | ) | (8,454 | ) | (223 | ) | Vessel operating expenses | |||||||||||||||||
(639 | ) | (892 | ) | General and administrative expenses | (4,290 | ) | 1,998 | General and administrative expenses | ||||||||||||||||||||||
(3,940 | ) | (1,013 | ) | (2,974 | ) | (117 | ) | (12,744 | ) | 1,775 | ||||||||||||||||||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Three Months Ended | Three Months Ended | |||||||
March 31, 2010 | March 31, 2009 | |||||||
$ | $ | |||||||
Foreign currency contracts | (3,540 | ) | 1,254 | |||||
Interest rate swaps | (84,392 | ) | 41,665 | |||||
Forward freight agreements and bunker fuel swap contracts | 996 | 5,405 | ||||||
Foinaven embedded derivative | (911 | ) | (1,502 | ) | ||||
Total realized and unrealized (losses) gains on non-designated derivative instruments | (87,847 | ) | 46,822 | |||||
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Net (loss) income attributable to stockholders’ of Teekay Corporation | (14,002 | ) | 81,505 | |||||
Weighted average number of common shares | 72,788,591 | 72,516,193 | ||||||
Dilutive effect of stock based compensation | — | 229,588 | ||||||
Common stock and common stock equivalents | 72,788,591 | 72,745,781 | ||||||
(Loss) earnings per common share: | ||||||||
- Basic | (0.19 | ) | 1.12 | |||||
- Diluted | (0.19 | ) | 1.12 |
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
$ | $ | |||||||
Current | (1,643 | ) | (1,255 | ) | ||||
Deferred | 8,950 | (4,613 | ) | |||||
Income tax recovery (expense) | 7,307 | (5,868 | ) | |||||
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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. dollars, except share data)
Page 21 of 41
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2010 | 2009 | % Change | |||||||||
Revenues | 162,069 | 155,688 | 4.1 | |||||||||
Voyage expenses | 29,303 | 18,408 | 59.2 | |||||||||
Net revenues | 132,766 | 137,280 | (3.3 | ) | ||||||||
Vessel operating expenses | 43,321 | 45,784 | (5.4 | ) | ||||||||
Time-charter hire expense | 25,038 | 32,178 | (22.2 | ) | ||||||||
Depreciation and amortization | 30,559 | 29,252 | 4.5 | |||||||||
General and administrative(1) | 12,145 | 13,129 | (7.5 | ) | ||||||||
Restructuring charge | 325 | 2,762 | (88.2 | ) | ||||||||
Income from vessel operations | 21,378 | 14,175 | 50.8 | |||||||||
Calendar-Ship-Days | ||||||||||||
Owned Vessels | 2,790 | 2,610 | 6.9 | |||||||||
Chartered-in Vessels | 676 | 930 | (27.4 | ) | ||||||||
Total | 3,466 | 3,540 | (2.1 | ) | ||||||||
(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 further discussion, please read Other Operating Results — General and Administrative Expenses. |
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• | a decrease of $4.8 million due to fewer revenue days from shuttle tankers servicing contracts of affreightment and fewer project days, and lower spot rates earned in the conventional spot market, compared to the same period last year; |
• | a decrease of $3.3 million due to the completion of a time-charter agreement in June 2009; and |
• | a decrease of $2.3 million due to declining oil production at mature oil fields in the North Sea that are serviced by certain shuttle tankers on contracts of affreightment; |
• | an increase of $2.6 million due to increased rates on certain contracts of affreightment and bareboat and time-charter contracts; |
• | an increase of $2.0 million in FSO revenue due to favorable exchange rates; |
• | an increase of $0.9 million on theNavion Sagadue to a one-time reimbursement from customers for certain crewing costs; and |
• | an increase of $0.8 million for the three months ended March 31, 2010, due to a decline in non-reimbursable bunker costs as compared to the same period last year. |
• | a decrease of $3.5 million relating to the net realized and unrealized changes in fair value of our foreign currency forward contracts that are or have been designated as hedges for accounting purposes; and |
• | a decrease of $2.3 million due to a decrease in costs related to services, spares and consumables during the three months ended March 31, 2010 compared to the same period last year; |
• | an increase of $1.2 million due to weakening of the U.S. Dollar against the Australian Dollar; |
• | an increase of $1.2 million in crew training costs; and |
• | an increase of $0.9 million due to the acquisition of a shuttle tanker in February 2010. |
• | a decrease of $7.3 million from the redelivery of in-chartered vessels to their owners; and |
• | a decrease of $1.4 million due to the acquisition of one previously in-chartered vessel in February 2010; |
• | an increase of $1.7 million due to increased spot in-charter activity for the three months ended March 31, 2010 compared to the same period last year. |
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2010 | 2009 | % Change | |||||||||
Revenues | 125,877 | 86,103 | 46.2 | |||||||||
Vessel operating expenses | 47,965 | 44,429 | 8.0 | |||||||||
Depreciation and amortization | 23,748 | 25,779 | (7.9 | ) | ||||||||
General and administrative(1) | 8,826 | 9,786 | (9.8 | ) | ||||||||
Income from vessel operations | 45,338 | 6,109 | 642.2 | |||||||||
Calendar-Ship-Days | ||||||||||||
Owned Vessels | 720 | 810 | (11.1 | ) | ||||||||
Total | 720 | 810 | (11.1 | ) | ||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the FPSO segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | an increase of $30.0 million for the first installment from the amended operating contract for ourFoinavenFPSO unit related to operations in previous years, as discussed above; |
• | an increase of $6.5 million from increased daily rates, tariff and incentive payments; |
• | an increase of $3.8 million from thePetrojarl VargFPSO unit commencing a new four-year fixed-rate contract extension beginning in the third quarter of 2009; and |
• | an increase of $3.0 million from a supplemental efficiency payment from the amendment of theFoinavenFPSO contract; |
• | a decrease of $4.4 million, from the decrease in amortization of contract value liabilities relating to FPSO service contracts (as discussed below), which was initially recognized on the date of the acquisition by us of a controlling interest in Teekay Petrojarl. |
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2010 | 2009 | % Change | |||||||||
Revenues | 62,534 | 57,583 | 8.6 | |||||||||
Voyage expenses | (27 | ) | 292 | (109.2 | ) | |||||||
Net revenues | 62,561 | 57,291 | 9.2 | |||||||||
Vessel operating expenses | 11,370 | 11,787 | (3.5 | ) | ||||||||
Depreciation and amortization | 15,527 | 14,598 | 6.4 | |||||||||
General and administrative(1) | 4,771 | 5,158 | (7.5 | ) | ||||||||
Restructuring charge | 119 | 2,182 | (94.5 | ) | ||||||||
Income from vessel operations | 30,774 | 23,566 | 30.6 | |||||||||
Calendar-Ship-Days | ||||||||||||
Owned Vessels and Vessels under Direct Financing Lease | 1,260 | 1,005 | 25.4 |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the liquefied gas segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | an increase of $8.8 million due to the commencement of the time-charters from the Tangguh LNG Delivery and the LPG Deliveries; |
• | an increase of $1.0 million due to the effect on our Euro-denominated revenues from the strengthening of the Euro against the U.S. Dollar compared to the same period last year; and |
• | an increase of $0.2 million due to theDania Spiritbeing off-hire for 15 days during 2009 for repairs; |
• | a decrease of $5.0 million due to theArctic Spiritbeing off-hire for 90 days during the first quarter of 2010. |
• | a decrease of $0.8 million relating to lower crew manning, insurance, and repairs and maintenance costs; |
• | an increase of $0.3 million due to the effect on our Euro-denominated vessel operating expenses from the strengthening of the Euro against the U.S. Dollar compared to the same period last year (a portion of our vessel operating expenses are denominated in Euros, which is primarily a function of the nationality of our crew); and |
• | an increase of $0.1 million from the Tangguh LNG Delivery net of initial delivery costs |
• | an increase of $0.5 million from the LPG Deliveries; and |
• | an increase of $0.4 million relating to amortization of drydock expenditures incurred during the third and fourth quarters of 2009; |
• | a decrease of $0.2 million from the commencement of the time-charter contracts for theTangguh HiriandTangguh Sagoin January 2009 and May 2009, respectively, which are accounted for as direct financing leases. |
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2010 | 2009 | % Change | |||||||||
Revenues | 94,032 | 93,680 | 0.4 | |||||||||
Voyage expenses | 696 | 1,304 | (46.6 | ) | ||||||||
Net revenues | 93,336 | 92,376 | 1.0 | |||||||||
Vessel operating expenses | 25,997 | 22,092 | 17.7 | |||||||||
Time-charter hire expense | 15,139 | 20,110 | (24.7 | ) | ||||||||
Depreciation and amortization | 19,816 | 15,653 | 26.6 | |||||||||
General and administrative(1) | 8,979 | 7,516 | 19.5 | |||||||||
Loss on sale of vessels and equipment, net of write-downs | 765 | — | — | |||||||||
Restructuring charge | 106 | 151 | (29.8 | ) | ||||||||
Income from vessel operations | 22,534 | 26,854 | (16.1 | ) | ||||||||
Calendar-Ship-Days | ||||||||||||
Owned Vessels | 2,866 | 2,610 | 9.8 | |||||||||
Chartered-in Vessels | 711 | 830 | (14.3 | ) | ||||||||
Total | 3,577 | 3,440 | 4.0 | |||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the fixed-rate tanker sub-segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | the delivery of two new Suezmax tankers in June 2009 (theSuezmax Deliveries); |
• | the purchase of a product tanker which commenced a 10-year fixed-rate time-charter to Caltex Australia Petroleum Pty Ltd. during September 2009; |
• | the transfer of three Suezmax tankers from the spot tanker sub-segment between September 2009 and November 2009 (theSuezmax Transfers); and |
• | the transfer of three Aframax tankers, on a net basis, from the spot tanker sub-segment in 2009 upon commencement of long-term time-charters (theAframax Transfers); |
• | the sale of one product tanker in October 2009 and two Aframax tankers in November 2009 and January 2010 (theVessel Sales); |
• | the transfer of two product tankers to the spot tanker sub-segment in July 2009 and January 2010 (theProduct Tanker Transfers); and |
• | an overall decrease in the number of in-chartered vessels. |
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• | an increase of $8.4 million from the Aframax Transfers; |
• | an increase of $7.1 million from the Suezmax Transfers; | ||
• | an increase of $4.2 million from the Suezmax Deliveries; and |
• | an increase of $3.1 million from the purchase of a new product tanker; |
• | a decrease of $9.3 million from theVessel Sales; |
• | a decrease of $8.4 million from the redelivery of in-chartered vessels to their owners; |
• | a decrease of $4.0 million from theProduct Tanker Transfers; and |
• | a decrease of $0.2 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 the capital lease for these vessels, we had corresponding decreases in our lease payments, which are reflected as decreases to interest expense; therefore, these and future interest rate adjustments do not and will not affect our cash flow or net income). |
• | an increase of $4.2 million from the Aframax Transfers and Suezmax Transfers; |
• | an increase of $1.8 million from the purchase of the new product tanker; |
• | an increase of $0.5 million relating to higher crew manning, insurance, and repairs and maintenance costs; and |
• | an increase of $0.4 million from the Suezmax Deliveries; |
• | a decrease of $2.9 million from theVessel Sales. |
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days and percentages) | 2010 | 2009 | % Change | |||||||||
Revenues | 120,025 | 223,497 | (46.3 | ) | ||||||||
Voyage expenses | 42,578 | 70,665 | (39.7 | ) | ||||||||
Net revenues | 77,447 | 152,832 | (49.3 | ) | ||||||||
Vessel operating expenses | 25,882 | 28,668 | (9.7 | ) | ||||||||
Time-charter hire expense | 30,736 | 84,540 | (63.6 | ) | ||||||||
Depreciation and amortization | 18,580 | 21,271 | (12.7 | ) | ||||||||
General and administrative(1) | 13,370 | 12,119 | 10.3 | |||||||||
(Gain) loss on sale of vessels and equipment, net of write-downs | (5 | ) | 958 | (100.5 | ) | |||||||
Restructuring charge | 3,233 | 463 | 598.3 | |||||||||
�� | ||||||||||||
(Loss) income from vessel operations | (14,349 | ) | 4,813 | (398.1 | ) | |||||||
Calendar-Ship-Days | ||||||||||||
Owned Vessels | 2,288 | 2,674 | (14.4 | ) | ||||||||
Chartered-in Vessels | 1,437 | 2,872 | (50.0 | ) | ||||||||
Total | 3,725 | 5,546 | (32.8 | ) | ||||||||
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the spot tanker sub-segment based on estimated use of corporate resources). For further discussion, please read Other Operating Results — General and Administrative Expenses. |
• | the sale of two product tankers in May 2009 (theSpot Product Tanker Sales); |
• | the transfer of three Suezmax tankers to the fixed-rate tanker sub-segment between September and November 2009 (theSpot Suezmax Transfers); |
• | the net transfer of three Aframax tankers to the fixed-rate tanker sub-segment in 2009 (theSpot Aframax Tanker Transfers); and |
• | an overall decrease in the number of in-chartered vessels; |
• | the delivery of five new Suezmax tankers between January 2009 to December 2009 (theSpot Suezmax Deliveries); and |
• | the transfer of two product tankers from the fixed-rate tanker sub-segment in July 2009 and January 2010 (theProduct Tanker Transfers). |
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Three Months Ended | ||||||||||||||||||||||||
March 31, 2010 | March 31, 2009 | |||||||||||||||||||||||
Net | TCE | Net | TCE | |||||||||||||||||||||
Revenues | Revenue | Rate | Revenues | Revenue | Rate | |||||||||||||||||||
Vessel Type | ($000’s) | Days | $ | ($000’s) | Days | $ | ||||||||||||||||||
Spot Fleet(1) | ||||||||||||||||||||||||
Suezmax Tankers | 29,477 | 969 | 30,420 | 40,277 | 1,012 | 39,799 | ||||||||||||||||||
Aframax Tankers | 42,192 | 2,194 | 19,231 | 92,855 | 3,621 | 25,643 | ||||||||||||||||||
Large/Medium Product Tankers | 7,122 | 495 | 14,388 | 19,911 | 877 | 22,704 | ||||||||||||||||||
Other(2) | (1,344 | ) | (211 | ) | ||||||||||||||||||||
Totals | 77,447 | 3,658 | 21,172 | 152,832 | 5,510 | 27,737 | ||||||||||||||||||
(1) | Spot fleet includes short-term time-charters and fixed-rate contracts of affreightment less than 1 year. | |
(2) | Includes 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 $36.8 million from decreases in our average spot tanker TCE rate during the three months ended March 31, 2010, compared to the same period last year; |
• | a decrease of $25.5 million from a decrease in the number of in-chartered vessels; |
• | a decrease of $10.1 million from the Spot Suezmax Transfers; |
• | a decrease of $7.4 million from the Spot Aframax Tanker Transfers; |
• | a decrease of $5.4 million from the Spot Product Tanker Sales; and |
• | a decrease of $0.3 million from a change in the number of days our vessels were off-hire due to regularly scheduled maintenance for the three months ended March 31, 2010, compared to the same period last year; |
• | an increase of $8.3 million from the Spot Suezmax Deliveries; and |
• | an increase of $1.9 million from the Product Tanker Transfers. |
• | a decrease of $2.2 million from lower crew manning, repairs, maintenance and consumables costs; |
• | a decrease of $1.8 million from the Spot Suezmax Transfers; |
• | a decrease of $1.2 million from the Spot Product Tanker Sales; and |
• | a decrease of $0.9 million from the Spot Aframax Tanker Transfers; |
• | an increase of $2.0 million from the Spot Suezmax Deliveries; |
• | an increase of $1.4 million from the Product Tanker Transfers. |
• | a decrease of $2.6 million from the Spot Suezmax Transfers; |
• | a decrease of $1.5 million from the Spot Aframax Tanker Transfers; and |
• | a decrease of $0.8 million from the Spot Product Tanker Sales; |
• | an increase of $2.3 million from the Spot Suezmax Tanker Deliveries. |
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Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in thousands of U.S. dollars, except percentages) | 2010 | 2009 | % Change | |||||||||
General and administrative | (48,091 | ) | (47,708 | ) | 0.8 | |||||||
Interest expense | (32,152 | ) | (43,767 | ) | (26.5 | ) | ||||||
Interest income | 4,274 | 6,678 | (36.0 | ) | ||||||||
Realized and unrealized (losses) gains on non-designated derivative instruments | (87,847 | ) | 46,822 | (287.6 | ) | |||||||
Equity (loss) income from joint ventures | (2,666 | ) | 11,422 | (123.3 | ) | |||||||
Foreign exchange gain | 29,026 | 11,312 | 156.6 | |||||||||
Loss on bond repurchase | (12,108 | ) | — | — | ||||||||
Other income | 2,422 | 2,658 | (8.9 | ) | ||||||||
Income tax recovery (expense) | 7,307 | (5,868 | ) | (224.5 | ) |
• | an increase of $2.5 million in compensation for shore-based employees and other personnel expenses primarily due to the weakening of the U.S. dollar against the Canadian dollar; |
• | an increase of $0.2 million associated with our equity-based compensation and long-term incentive program for management; and |
• | an increase of $0.2 million from timing of travel costs; |
• | a net decrease of $1.7 million in unrealized and realized losses on foreign currency forward contracts; |
• | a decrease of $0.9 million in corporate-related expenses. |
• | a decrease of $13.8 million primarily due to repayments of debt drawn under long-term revolving credit facilities and term loans and decrease in interest rates relating to long-term debt; |
• | a decrease of $2.1 million from the scheduled loan payments on theCatalunya Spirit, and scheduled capital lease repayments on theMadrid Spirit(theMadrid Spiritis financed pursuant to a Spanish tax lease arrangement, under which we borrowed under a term loan and deposited the proceeds into a restricted cash account and entered into a capital lease for the vessel; as a result, this decrease in interest expense from the capital lease is offset by a corresponding decrease in the interest income from restricted cash); and |
• | a decrease of $0.2 million from declining interest rates on our five Suezmax tanker capital lease obligations; |
• | a net increase of $4.1 million due to the effect of the public offering of $450 million 8.5% senior unsecured notes due January 2020 and the repurchase of the majority of the 8.875% senior notes due 2011 in January 2010; and |
• | an increase of $0.4 million due to the effect on our Euro-denominated debt from the strengthening of the Euro against the U.S. Dollar during three months ended March 31, 2010, compared to the same period last year. |
• | a decrease of $1.8 million due to decreases in LIBOR rates relating to the restricted cash in Teekay Nakilat that is used to fund capital lease payments for the RasGas II LNG Carriers; |
• | a decrease of $0.4 million primarily from scheduled capital lease repayments on one of our LNG carriers which was funded from restricted cash deposits; and |
• | a decrease of $0.2 million primarily relating to lower bank account balances. |
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Three Months Ended | ||||||||
March 31, | ||||||||
(in thousands of U.S. Dollars) | 2010 | 2009 | ||||||
Realized (losses) relating to: | ||||||||
Interest rate swaps | (38,586 | ) | (21,311 | ) | ||||
Foreign currency forward contracts | (323 | ) | (5,497 | ) | ||||
Bunkers and forward freight agreements (FFAs) | (2,149 | ) | (2,289 | ) | ||||
(41,058 | ) | (29,097 | ) | |||||
Unrealized (losses) gains relating to: | ||||||||
Interest rate swaps | (45,806 | ) | 62,976 | |||||
Foreign currency forward contracts | (3,217 | ) | 6,751 | |||||
Bunkers, FFAs and other | 2,234 | 6,192 | ||||||
(46,789 | ) | 75,919 | ||||||
Total realized and unrealized (losses) gains on non-designated derivative instruments | (87,847 | ) | 46,822 | |||||
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Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
($000’s) | ($000’s) | |||||||
Net operating cash flows | 94,781 | 136,832 | ||||||
Net financing cash flows | 151,621 | (100,518 | ) | |||||
Net investing cash flows | (33,551 | ) | (80,029 | ) |
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• | incurred capital expenditures for vessels and equipment of $44.7 million primarily for capitalized vessel modifications and shipyard construction installment payments on our new-building shuttle tankers and LPG carriers; and |
• | received net proceeds of $10.0 million from the sale of one Aframax tanker. |
Remainder of | ||||||||||||||||||||
In millions of U.S. Dollars | Total | 2010 | 2011 and 2012 | 2013 and 2014 | Beyond 2014 | |||||||||||||||
U.S. Dollar-Denominated Obligations: | ||||||||||||||||||||
Long-term debt(1) | 4,144.8 | 196.2 | 608.8 | 1,318.9 | 2,020.9 | |||||||||||||||
Chartered-in vessels (operating leases) | 626.4 | 221.1 | 271.6 | 90.9 | 42.8 | |||||||||||||||
Commitments under capital leases(2) | 215.6 | 17.7 | 197.9 | — | — | |||||||||||||||
Commitments under capital leases(3) | 1,043.3 | 18.0 | 48.0 | 48.0 | 929.3 | |||||||||||||||
Commitments under operating leases (4) | 476.5 | 18.8 | 50.1 | 50.2 | 357.4 | |||||||||||||||
Newbuilding installments(5) (6) | 667.8 | 284.8 | 383.0 | — | — | |||||||||||||||
Asset retirement obligation | 21.2 | — | — | — | 21.2 | |||||||||||||||
Total U.S. Dollar-denominated obligations | 7,195.6 | 756.6 | 1,559.4 | 1,508.0 | 3,371.6 | |||||||||||||||
Euro-Denominated Obligations:(7) | ||||||||||||||||||||
Long-term debt(8) | 386.1 | 9.3 | 221.4 | 15.3 | 140.1 | |||||||||||||||
Commitments under capital leases(2) (9) | 124.0 | 36.4 | 87.6 | — | — | |||||||||||||||
Total Euro-denominated obligations | 510.1 | 45.7 | 309.0 | 15.3 | 140.1 | |||||||||||||||
Total | 7,705.7 | 802.3 | 1,868.4 | 1,523.3 | 3,511.7 | |||||||||||||||
(1) | Excludes expected interest payments of $73.2 million (remainder of 2010), $180.6 million (2011 and 2012), $145.3 million (2013 and 2014) and $284.6 million (beyond 2014). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR plus margins that ranged up to 3.25% at March 31, 2010 (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) | 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 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. Please read Item 1 — Financial Statements: Note 9 — Capital Lease Obligations and Restricted Cash. | |
(3) | Existing restricted cash deposits of $478.6 million, together with the interest earned on the deposits, will be sufficient to repay the remaining amounts we currently owe under the lease arrangements. | |
(4) | We have corresponding leases whereby we are the lessor and expect to receive $440.8 million for these leases from 2010 to 2029. |
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(5) | Represents remaining construction costs (excluding capitalized interest and miscellaneous construction costs) for three LPG carriers and four shuttle tankers as of March 31, 2010. Please read Item 1 — Financial Statements: Note 11(a) — Commitments and Contingencies — Vessels Under Construction. | |
(6) | We also have a 33% interest in a consortium that has entered into agreements for the construction of four LNG carriers. As at March 31, 2010, the remaining commitments on these vessels, excluding capitalized interest and other miscellaneous construction costs, totaled $724.8 million of which our share is $239.2 million. Please read Item 1 — Financial Statements: Note 11(b) — Commitments and Contingencies — Joint Ventures. | |
(7) | Euro-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as at March 31, 2010. | |
(8) | Excludes expected interest payments of $2.9 million (remainder of 2010), $6.4 million (2011 and 2012), $3.0 million (2013 and 2014) and $8.4 million (beyond 2014). Expected interest payments are based on EURIBOR at March 31, 2010, plus margins that ranged up to 0.66%, as well as the prevailing U.S. Dollar/Euro exchange rate as of March 31, 2010. 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 $115.4 million, together with the interest earned on these deposits, will be 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. |
• | our future growth prospects; |
• | tanker market fundamentals, including the balance of supply and demand in the tanker market and spot tanker charter rates; |
• | the impact of theFoinavenamended contract on our future operating results; |
• | the sufficiency of working capital for short-term liquidity requirements; |
• | future capital expenditure commitments and the financing requirements for such commitments; |
• | delivery dates of and financing for new-buildings, and the commencement of service of new-buildings under long-term time-charter contracts; |
• | potential new-building order cancellations; |
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• | construction and delivery delays in the tanker industry generally; |
• | the future valuation of goodwill; |
• | our compliance with covenants under our credit facilities; |
• | our hedging activities relating to foreign exchange and interest rate risks; |
• | the adequacy of restricted cash deposits to fund capital lease obligations; |
• | the effectiveness of our risk management policies and procedures and the ability of the counter-parties to our derivative contracts to fulfill their contractual obligations; |
• | the condition of financial and economic markets, including the recent credit crisis, interest rate volatility and the availability and cost of capital; and |
• | the growth of global oil demand. |
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MARCH 31, 2010
PART I — FINANCIAL INFORMATION
Expected Maturity Date | ||||||||||||||||||||
Remainder of | Total | |||||||||||||||||||
2010 | 2011 | 2012 | Total | Fair value(1) | ||||||||||||||||
Contract | Contract | Contract | Contract | Asset | ||||||||||||||||
Amount(1) | Amount(1) | Amount(1) | Amount(1) | (Liability) | ||||||||||||||||
Norwegian Kroner: | $ | 121.8 | $ | 73.6 | $ | 18.1 | $ | 213.5 | $ | 3.7 | ||||||||||
Average contractual exchange rate(2) | 6.19 | 5.99 | 6.15 | 6.12 | ||||||||||||||||
Euro: | $ | 49.0 | $ | 33.5 | $ | 5.9 | $ | 88.4 | $ | (3.6 | ) | |||||||||
Average contractual exchange rate(2) | 0.70 | 0.72 | 0.74 | 0.71 | ||||||||||||||||
Canadian Dollar: | $ | 31.9 | $ | 6.7 | — | $ | 38.6 | $ | 3.2 | |||||||||||
Average contractual exchange rate(2) | 1.11 | 1.07 | — | 1.10 | ||||||||||||||||
British Pounds: | $ | 39.6 | $ | 24.0 | $ | 4.1 | $ | 67.7 | $ | (2.0 | ) | |||||||||
Average contractual exchange rate(2) | 0.64 | 0.64 | 0.67 | 0.64 |
(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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Fair | ||||||||||||||||||||||||||||||||||||
Expected Maturity Date | Value | |||||||||||||||||||||||||||||||||||
Balance | Asset / | Rate | ||||||||||||||||||||||||||||||||||
of 2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | Total | (Liability) | (1) | ||||||||||||||||||||||||||||
(in millions of U.S. dollars, except percentages) | ||||||||||||||||||||||||||||||||||||
Long-Term Debt: | ||||||||||||||||||||||||||||||||||||
Variable Rate ($U.S.)(2) | 160.2 | 253.5 | 233.7 | 401.9 | 821.0 | 1,311.8 | 3,182.1 | (2,899.9 | ) | 1.1 | % | |||||||||||||||||||||||||
Variable Rate (Euro)(3) (4) | 9.3 | 13.1 | 208.3 | 7.4 | 7.9 | 140.1 | 386.1 | (348.7 | ) | 1.0 | % | |||||||||||||||||||||||||
Fixed-Rate Debt ($U.S.) | 36.0 | 73.6 | 48.0 | 48.0 | 48.0 | 709.2 | 962.8 | (960.0 | ) | 6.8 | % | |||||||||||||||||||||||||
Average Interest Rate | 5.2 | % | 6.4 | % | 5.2 | % | 5.2 | % | 5.2 | % | 7.3 | % | 6.8 | % | ||||||||||||||||||||||
Capital Lease Obligations(5) (6) | ||||||||||||||||||||||||||||||||||||
Fixed-Rate ($U.S.)(7) | 7.2 | 185.5 | — | — | — | — | 192.7 | (192.7 | ) | 7.4 | % | |||||||||||||||||||||||||
Average Interest Rate(8) | 7.5 | % | 7.4 | % | — | — | — | — | 7.4 | % | ||||||||||||||||||||||||||
Interest Rate Swaps: | ||||||||||||||||||||||||||||||||||||
Contract Amount ($U.S.)(6)(9)(10) | 252.1 | 170.3 | 276.3 | 82.5 | 96.4 | 2,744.8 | 3,622.4 | (373.4 | ) | 4.8 | % | |||||||||||||||||||||||||
Average Fixed Pay Rate(2) | 4.2 | % | 3.5 | % | 3.1 | % | 4.9 | % | 4.8 | % | 6.0 | % | 4.8 | % | ||||||||||||||||||||||
Contract Amount (Euro)(4) | 9.3 | 13.1 | 208.3 | 7.4 | 7.9 | 140.1 | 386.1 | (19.2 | ) | 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, which as of March 31, 2010, ranged from 0.3% to 3.25%. 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. | |
(2) | Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The average fixed pay rate for our interest rate swaps excludes the margin we pay our floating-rate debt. | |
(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 March 31, 2010. | |
(5) | Excludes capital lease obligations (present value of minimum lease payments) of 84.3 million Euros ($114.0 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 March 31, 2010, this amount was 85.4 million Euros ($115.4 million). Consequently, we are not subject to interest rate risk from these obligations or deposits. | |
(6) | Under the terms of the capital leases for the RasGas II LNG Carriers (see Item 1 — Financial Statements: Note 9 — Capital Lease Obligations and Restricted Cash), we are required to have on deposit, subject to a variable rate of interest, an amount of cash that, together with interest earned on the deposit, will equal the remaining amounts owing under the variable-rate leases. The deposits, which as at March 31, 2010, totaled $478.6 million, and the lease obligations, which as at March 31, 2010, totaled $470.3 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 March 31, 2010, the contract amount, fair value and fixed interest rates of these interest rate swaps related to the RasGas II LNG Carriers capital lease obligations and restricted cash deposits were $450.3 million and $473.1 million, ($40.7) million and $40.1 million, and 4.9% and 4.8% respectively. | |
(7) | The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable (see Item 1 — Financial Statements: Note 9 — Capital Lease Obligations and Restricted Cash). | |
(8) | The average interest rate is the weighted-average interest rate implicit in the capital lease obligations at the inception of the leases. | |
(9) | The average variable receive rate for our interest rate swaps is set monthly at the 1-month LIBOR or EURIBOR, quarterly at the 3-month LIBOR or semi-annually at the 6-month LIBOR. | |
(10) | Includes interest rate swaps of $200.0 million that commence in 2011. |
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MARCH 31, 2010
• | REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 33-97746) FILED WITH THE SEC ON OCTOBER 4, 1995; | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-42434) FILED WITH THE SEC ON JULY 28, 2000; | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-119564) FILED WITH THE SEC ON OCTOBER 6, 2004; | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-147683) FILED WITH THE SEC ON NOVEMBER 28, 2007; AND | |
• | REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-166523) FILED WITH THE SEC ON MAY 5, 2010 |
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TEEKAY CORPORATION | ||||
Date: June 14, 2010 | By: | /s/ Vincent Lok | ||
Vincent Lok | ||||
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
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