February 27, 2008
NASSAU, THE BAHAMAS–(Marketwire – Feb. 27, 2008) – Teekay Corporation (NYSE:TK) – Highlights – Reported fourth quarter net income of $9.5 million, or $0.13 per share (including specific items which decreased net income by $13.5 million, or $0.18 per share) (1) – Reported annual net income of $181.3 million, or $2.43 per share (including specific items which decreased net income by $16.3 million, or $0.22 per share)(1) – Generated cash flow from vessel operations of $138.4 million and $622.2 million in the fourth quarter and fiscal 2007, respectively – Successfully completed the initial public offering of Teekay Tankers Ltd. – Entered into a multi-vessel strategic transaction with ConocoPhillips – Acquired two specialized LNG vessels on charter to a ConocoPhillips and Marathon Oil joint venture Teekay Corporation (Teekay or the Company) today reported net income of $9.5 million, or $0.13 per share, for the quarter ended December 31, 2007, compared to net income of $60.3 million, or $0.81 per share, for the quarter ended December 31, 2006. The results for the quarters ended December 31, 2007 and 2006 included a number of specific items that had the net effect of decreasing net income by $13.5 million, or $0.18 per share, and by $18.9 million, or $0.25 per share, respectively, as detailed in Appendix A to this release. Net revenues(2) for the fourth quarter of 2007 increased to $514.1 million from $443.3 million for the same period in 2006, and income from vessel operations decreased to $74.2 million from $105.2 million. Net income for the year ended December 31, 2007 was $181.3 million, or $2.43 per share, compared to $262.2 million, or $3.49 per share, for the same period last year. The results for the year ended December 31, 2007 and 2006 included a number of specific items that had the net effect of decreasing net income by $16.3 million, or $0.22 per share, and by $63.7 million, or $0.85 per share, respectively, as detailed in Appendix A to this release. Net revenues(2) for the year ended December 31, 2007 increased to $1.9 billion from $1.5 billion for the same period in 2006, and income from vessel operations decreased to $397.9 million from $421.8 million. Initial Public Offering of Teekay Tankers Ltd. On December 18, 2007, Teekay’s subsidiary, Teekay Tankers Ltd. (NYSE:TNK) (Teekay Tankers), completed its initial public offering of 11.5 million class A common shares (including the underwriters’ overallotment option) at a price of $19.50 per share. Net proceeds from the offering amounting to $208.2 million were used by Teekay to repay debt. Teekay Tankers owns a fleet of nine Aframax-class oil tankers which Teekay manages through a mix of short- or medium-term fixed-rate time-charter contracts and spot tanker market trading. Teekay has agreed to offer Teekay Tankers, within 18 months following the completion of Teekay Tankers’ IPO, the right to purchase from it up to four existing Suezmax-class oil tankers. Teekay Tankers anticipates additional opportunities to expand its fleet through acquisitions of tankers from third parties and additional tankers that it expects Teekay will offer to it from time to time. These tankers may include crude oil and product tankers. Teekay owns 1.0 million class A common shares and 12.5 million class B common shares (entitled to five votes per share but capped at 49% of the total vote), which currently provide Teekay with 54 percent of the economic interest and 53 percent of the voting interest in Teekay Tankers. On February 6, 2008, Teekay Tankers declared a cash dividend of $0.115 per share for the 14-day period from December 18, 2007 to December 31, 2007. (1) Please refer to Appendix A to this release for information about specific items affecting net income. (2) Net revenues represents revenues less voyage expenses. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s web site at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure. Strategic Transaction with ConocoPhillips In January 2008, Teekay entered into a multi-vessel transaction with ConocoPhillips, which involved the acquisition of six double-hull Aframax tankers from ConocoPhillips and the time charter-out of five vessels to ConocoPhillips. Of the six Aframax tankers acquired, two are owned and four are bareboat chartered-in for periods ranging from five to ten years. Two of the Aframax tankers have been chartered back to ConocoPhillips for a period of five years. Commencing in the second quarter of 2008, Teekay will also charter to ConocoPhillips its in-chartered VLCC for a period of three years and two of its MR product tankers for a period of five years. Operating Results During the fourth quarter of 2007, fixed-rate businesses generated approximately 81 percent of the Company’s cash flow from vessel operations compared to 66 percent in the fourth quarter of 2006. The following table highlights certain financial information for Teekay’s four main segments: the offshore segment, the fixed-rate tanker segment, the liquefied gas segment, and the spot tanker segment (please read the “Teekay Fleet” section of this release below and Appendix B for further details):
---------------------------------------------------------------------------
Three Months Ended December 31, 2007
------------------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
(in thousands of U.S. Offshore Tanker Gas Tanker
dollars) Segment Segment Segment Segment Total
---------------------------------------------------------------------------
Net revenues 224,824 53,554 47,991 187,762 514,131
Vessel operating expenses 87,712 14,661 7,844 28,026 138,243
Time-charter hire expense 40,395 10,221 - 95,244 145,860
Depreciation & amortization 46,275 10,054 12,162 26,206 94,697
Cash flow from vessel
operations(i) 53,739 23,996 35,041 25,628 138,404
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended December 31, 2006
------------------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
(in thousands of U.S. Offshore Tanker Gas Tanker
dollars) Segment Segment Segment Segment Total
---------------------------------------------------------------------------
Net revenues 218,280 46,187 29,111 149,753 443,331
Vessel operating expenses 67,019 11,783 4,587 16,095 99,484
Time-charter hire expense 43,170 4,309 - 55,068 102,547
Depreciation & amortization 43,524 8,136 8,938 12,877 73,475
Cash flow from vessel
operations(i) 60,768 26,047 19,867 54,322 161,004
---------------------------------------------------------------------------
(i) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense and vessel
write-downs/(gain) loss on sale of vessels. Cash flow from vessel
operations is a non-GAAP financial measure used by certain investors to
measure the financial performance of shipping companies. Please see the
Company's web site at www.teekay.com for a reconciliation of this
non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
Offshore Segment
The offshore segment is comprised of the Company’s fleet of shuttle tankers, floating storage and off-take (FSO) units, and floating production storage and offtake (FPSO) units.
Cash flow from vessel operations from the Company’s offshore segment decreased to $53.7 million in the fourth quarter of 2007, compared to $60.8 million in the fourth quarter of 2006, primarily due to an increase in crewing expenses and higher than normal vessel repair costs, partially offset by the transfer of an FSO unit, the Navion Saga, to the Offshore Segment in May 2007 upon its commencement of a three-year time-charter, the consolidation of five 50 percent-owned shuttle tankers effective December 1, 2006, and the delivery of two shuttle tankers upon their commencement of 13-year charters.
In February 2008, the Siri FPSO was delivered to Brazil and commenced a two-year charter on a milestone heavy crude oil production project for Petroleo Brasileiro S.A. (Petrobras). At that time, the FPSO was formally named the Petrojarl Cidade De Rio Das Ostras.
Fixed-Rate Tanker Segment
The fixed-rate tanker segment includes Teekay LNG Partners L.P.’s (Teekay LNG) Suezmax fleet and Teekay’s directly operated fixed-rate conventional tankers.
Cash flow from vessel operations from the Company’s fixed-rate tanker segment decreased to $24.0 million in the fourth quarter of 2007, compared to $26.0 million in the fourth quarter of 2006. This decrease was primarily due to lower revenues earned on two vessels, which earn a profit share component when spot tanker rates exceed certain threshold levels, and higher vessel crewing costs, partially offset by the three vessels added to this segment in the third quarter of 2007.
Liquefied Gas Segment
The liquefied gas segment includes Teekay LNG’s fleet of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers.
In December 2007, Teekay acquired two 1993-built, 88,000 cubic meter LNG vessels from a joint venture between ConocoPhillips and Marathon Oil Corporation for a total cost of $230.0 million. These specialized, ice-strengthened vessels are currently being chartered back to the sellers until April 2009 (transporting LNG from Alaska’s Kenai LNG plant to Japan), with options exercisable by the charterers to extend up to an additional seven years. Teekay has offered these vessels to Teekay LNG in accordance with an Omnibus agreement among Teekay, Teekay LNG and Teekay Offshore (the Omnibus Agreement).
The Company’s cash flow from vessel operations from its existing LNG and LPG carriers during the fourth quarter of 2007 was $35.0 million compared to $19.9 million in the fourth quarter of 2006. This increase was primarily due to the delivery of the three RasGas II LNG carriers which commenced 20-year fixed-rate charters in November 2006, January 2007, and February 2007, respectively, and the acquisition of the two Kenai LNG carriers in December 2007.
The Company has ownership interests ranging from 40 percent to 70 percent in six additional LNG newbuildings scheduled to deliver at various dates between the second quarter of 2008 and early 2009, all of which will commence service upon delivery under 20 or 25-year fixed-rate contracts with major energy companies.
Teekay has agreed to sell the following vessels to its 63.7 percent owned subsidiary, Teekay LNG:
– RasGas 3 – a 40 percent interest in four newbuilding LNG carriers scheduled to deliver during the second quarter of 2008.
– Tangguh – a 70 percent interest in two newbuilding LNG carriers scheduled to deliver during late 2008 and early 2009.
Teekay LNG has also agreed to acquire three LPG carriers currently under construction from IM Skaugen ASA (Skaugen) upon their delivery from the shipyard between mid-2008 and mid-2009. Upon delivery, these vessels will commence 15-year fixed-rate charters to Skaugen.
As previously announced, a consortium in which Teekay has a 33 percent interest, has agreed to charter four newbuilding LNG carriers for a period of 20 years to the Angola LNG Project, which is being developed by subsidiaries of Chevron, Sonangol, BP, and Total. The vessels will be chartered at fixed-rates, with inflation adjustments, commencing in 2011. Teekay is obligated to offer Teekay LNG its 33 percent interest in these vessels and related charter contracts in accordance with the Omnibus Agreement.
Spot Tanker Segment
The Company’s spot tanker segment includes its conventional tankers, which are operating on voyage and period out-charters with an initial term of less than three years.
Cash flow from vessel operations from the Company’s spot tanker segment decreased to $25.6 million for the fourth quarter of 2007, from $54.3 million for the fourth quarter of 2006, primarily due to a decrease in spot tanker charter rates, an increase in time-charter hire expense and an increase in vessel crewing costs, partially offset by an increase in the size of the Company’s spot tanker fleet from the acquisition of 50 percent of OMI Corporation.
On a net basis, fleet changes increased the total number of revenue days in the Company’s spot tanker segment to 7,446 for the fourth quarter of 2007, compared to 5,231 for the fourth quarter of 2006. Revenue days represent the total number of vessel calendar days less off-hire associated with major repairs, drydockings, or mandated surveys.
Spot tanker freight rates strengthened significantly towards the end of the fourth quarter of 2007 rising to near record highs in December 2007 and into January 2008. However, the financial benefit of the increase in spot tanker rates had only a minimal impact on the fourth quarter financial results due to the timing difference between booking voyages and the physical commencement of voyages. The main drivers behind the strengthening in rates were the restocking of low global oil inventories, a rise in global oil supply as OPEC increased output, and the completion of oil field and refinery maintenance. These factors occurred later than normal in the year, and as a result tanker rates did not strengthen until late in the fourth quarter of 2007. Although tanker rates have declined from the high levels experienced early in the first quarter of 2008, they remain at high levels compared to historical averages.
The following table highlights the operating performance of the Company’s spot tanker segment measured in net revenues per revenue day, or time-charter equivalent (TCE), and includes the effect of forward freight agreements (FFAs) which are entered into as hedges against a portion of the Company’s exposure to spot market rates:
--------------------------------------------------------------------------
Three Months Ended Years Ended
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
--------------------------------------------------------------------------
Spot Tanker Segment
Suezmax Tanker
Fleet
Revenue days 1,362 1,039 399 3,162 1,639
TCE per revenue
day (i) $ 32,976 $ 27,097 $ 29,922 $ 31,627 $ 34,766
Aframax Tanker
Fleet
Revenue days 3,407 2,960 2,886 11,866 11,675
TCE per revenue
day (i) $ 24,201 $ 21,508 $ 34,789 $ 28,269 $ 35,774
Large/Medium-Size
Product Tanker
Fleet
Revenue days 1,777 1,521 958 5,567 3,488
TCE per revenue
day $ 21,295 $ 27,258 $ 24,544 $ 25,426 $ 27,747
Small Product
Tanker Fleet
Revenue days 900 898 988 3,595 3,782
TCE per revenue
day $ 12,134 $ 13,893 $ 14,155 $ 14,299 $ 15,476
--------------------------------------------------------------------------
(i) TCE results for the Suezmax and Aframax tanker fleets include realized
results of synthetic time charters, FFAs, purchase price adjustments,
short-term time-charters and fixed-rate contracts of affreightment.
Excluding these amounts, Suezmax TCEs on a revenue-day basis for the
quarters ended December 31, 2007, September 30, 2007, and December 31,
2006 would have been $31,718, $21,166 and $44,871 per day,
respectively; and for the years ended December 31, 2007 and December
31, 2006 would have been $32,333 and $46,911 per day, respectively.
Excluding these amounts, Aframax TCEs on a revenue-day basis for the
quarters ended December 31, 2007, September 30, 2007, and December 31,
2006 would have been $23,234, $20,070 and $35,900 per day,
respectively.
Teekay Fleet
As at February 27, 2008, Teekay’s fleet consisted of 203 vessels, including chartered-in vessels, newbuildings on-order, and vessels being converted to offshore units, but excluding vessels managed for third parties.
The following table summarizes the Teekay fleet as at February 27, 2008:
--------------------------------------------------------------------------
Number of Vessels (1)
-------------------------------------------
Owned Chartered-in Newbuildings
Vessels Vessels /Conversions Total
--------------------------------------------------------------------------
Offshore Segment
Shuttle Tankers (2) 28 12 4 44
Floating Storage & Offtake
("FSO") Units (3) 5 - - 5
Floating Production Storage &
Offtake ("FPSO") Units (4) 5 - - 5
--------------------------------------------------------------------------
Total Offshore Segment 38 12 4 54
--------------------------------------------------------------------------
Fixed-Rate Tanker Segment
Conventional Tankers (5) 16 4 1 21
--------------------------------------------------------------------------
Total Fixed-Rate Tanker Segment 16 4 1 21
--------------------------------------------------------------------------
Liquefied Gas Segment
LNG Carriers (6) 9 - 10 19
LPG Carriers 1 - 3 4
--------------------------------------------------------------------------
Total Liquefied Gas Segment 10 - 13 23
--------------------------------------------------------------------------
Spot Tanker Segment
Suezmaxes 6 8 10 24
Aframaxes (7) 21 27 - 48
Large/Medium Product Tankers 14 10 1 25
Small Product Tankers - 10 - 10
--------------------------------------------------------------------------
Total Spot Tanker Segment 41 55 11 107
--------------------------------------------------------------------------
Total 105 71 29 205
--------------------------------------------------------------------------
(1) Excludes vessels managed on behalf of third parties.
(2) Includes six shuttle tankers in which the Company's ownership interest
is 50 percent.
(3) Includes one unit in which the Company's ownership interest is 89
percent.
(4) Includes four FPSOs owned by Teekay Petrojarl ASA, and one FPSO jointly
owned by Teekay and Teekay Petrojarl.
(5) Includes eight Suezmax tankers owned by Teekay LNG.
(6) Seven of the existing LNG vessels are owned by Teekay LNG. Teekay LNG
has agreed to acquire Teekay's 70 percent interest in two of the LNG
newbuildings and Teekay's 40 percent interest in four LNG newbuildings
upon delivery of the vessels. Teekay has offered Teekay LNG the
opportunity to acquire two of the existing LNG vessels.
(7) Includes nine Aframax tankers owned by Teekay Offshore and chartered to
Teekay and nine Aframaxes owned by Teekay Tankers.
Capital Expenditures and Liquidity
As of December 31, 2007, the Company’s remaining capital commitments relating to its portion of newbuildings and conversions, were as follows:
---------------------------------------------------------------------- (in millions) 2008 2009 2010 2011 2012 Total ---------------------------------------------------------------------- Offshore Segment $ 42 $ 23 $231 $163 - $ 459 ---------------------------------------------------------------------- Fixed-Rate Tanker Segment 59 - - - - 59 ---------------------------------------------------------------------- Liquefied Gas Segment 187 113 37 157 45 539 ---------------------------------------------------------------------- Spot Tanker Segment 327 207 - - - 534 ---------------------------------------------------------------------- Total $615 $343 $268 $320 $45 $1,591 ----------------------------------------------------------------------Pre-arranged debt facilities are in place for $1.3 billion of these capital commitments. Additionally, as of December 31, 2007, the Company had total liquidity of $1.7 billion (excluding debt related to capital commitments), comprised of $443 million in cash and cash equivalents and $1.2 billion in undrawn credit facilities. Share Repurchase Program Since November 1, 2007, the previous date the Company reported the status of its share repurchase program, the Company has repurchased 472,600 shares of its common stock at an average price of $50.28 per share, resulting in $20.5 million remaining under the existing share repurchase authorization. As at December 31, 2007, the Company had 72.8 million common shares issued and outstanding. About Teekay Teekay Corporation transports more than 10 percent of the world’s seaborne oil, has built a significant presence in the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE:TGP), is further growing its operations in the offshore oil production, storage and transportation sector through its publicly-listed subsidiary, Teekay Offshore Partners L.P. (NYSE:TOO), and continues to expand its conventional tanker business through its publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE:TNK). With a fleet of over 200 vessels, offices in 16 countries and 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay’s reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company. Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”. Earnings Conference Call The Company plans to host a conference call on Thursday, February 28, 2008 at 11:00 a.m. (ET) to discuss the results for the quarter. All shareholders and interested parties are invited to listen to the live conference call and view the Company’s earnings presentation through the Company’s web site at www.teekay.com. The Company plans to make available a recording of the conference call until midnight March 7, 2008, by dialing (888) 203-1112 or (647) 436-0148, access code 7547068, or via the Company’s web site until March 30, 2008.
TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands of U.S. dollars, except share and per share data)
--------------------------------------------------------------------------
Three Months Ended Years Ended
------------------------------- --------------------
December September December December December
31, 30, 31, 31, 31,
2007 2007 2006 2007 2006
--------- --------- --------- --------- ---------
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
--------------------------------------------------------------------------
REVENUES 673,046 589,054 586,990 2,406,622 2,013,306
--------------------------------------------------------------------------
OPERATING EXPENSES
Voyage expenses 158,915 126,772 143,659 528,180 522,117
Vessel operating
expenses 138,243 120,008 99,484 464,543 257,350
Time-charter
hire expense 145,860 121,756 102,547 467,364 402,522
Depreciation and
amortization 94,697 87,058 73,475 329,113 223,965
General and
administrative 60,081 60,912 56,377 238,148 177,915
Writedown or loss
(gain) on sale
of vessels and
equipment 1,055 (8,072) 4,754 (18,630) (1,341)
Restructuring
charge - - 1,515 - 8,929
--------------------------------------------------------------------------
598,851 508,434 481,811 2,008,718 1,591,457
--------------------------------------------------------------------------
Income from vessel
operations 74,195 80,620 105,179 397,904 421,849
--------------------------------------------------------------------------
OTHER ITEMS
Interest expense (82,009) (81,008) (57,584) (287,558) (171,643)
Interest income 19,529 23,071 16,276 82,158 56,224
Income tax
recovery (expense) 11,709 (9,995) (2,030) 5,509 (7,869)
Equity (loss)
income from
joint ventures (7,063) (1,654) 3,681 (12,404) 5,940
Foreign exchange
(loss) gain (7,407) (10,025) (12,391) (22,106) (45,382)
Minority interest
(expense) income (1,284) 3,602 4,241 (9,663) (441)
Other - net 1,806 12,378 2,928 27,411 3,566
--------------------------------------------------------------------------
(64,719) (63,631) (44,879) (216,653) (159,605)
--------------------------------------------------------------------------
Net income 9,476 16,989 60,300 181,251 262,244
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per
common share
- Basic $ 0.13 $ 0.23 $ 0.83 $ 2.47 $ 3.58
- Diluted $ 0.13 $ 0.23 $ 0.81 $ 2.43 $ 3.49
--------------------------------------------------------------------------
Weighted-average
number of
common shares
outstanding
- Basic 72,962,375 73,592,554 73,051,350 73,382,197 73,180,193
- Diluted 74,168,422 74,917,614 74,564,536 74,734,913 75,128,724
--------------------------------------------------------------------------
------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
------------------------------------------------------------------------
As at December 31, As at December 31,
2007 2006
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents 442,673 343,914
Other current assets 428,190 318,229
Restricted cash - current 33,479 64,243
Vessels held for sale 129,318 20,754
Restricted cash - long-term 652,717 615,749
Vessels and equipment 6,180,180 4,925,409
Advances on newbuilding contracts 617,066 382,659
Other assets 881,988 515,242
Intangible assets 259,952 280,559
Goodwill 434,590 266,718
------------------------------------------------------------------------
Total Assets 10,060,153 7,733,476
------------------------------------------------------------------------
------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities 346,765 311,088
Current portion of long-term debt 474,873 369,043
Long-term debt 5,285,397 3,350,640
Other long-term liabilities /
In process revenue contracts 737,754 720,080
Minority interest 527,494 454,403
Stockholders' equity 2,687,870 2,528,222
------------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity 10,060,153 7,733,476
------------------------------------------------------------------------
------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
------------------------------------------------------------------------
Years Ended
December 31,
2007 2006
----------- ------------
(unaudited) (unaudited)
----------- ------------
Cash and cash equivalents provided
by (used for)
OPERATING ACTIVITIES
------------------------------------------------------------------------
Net operating cash flow 269,900 520,785
------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term debt 3,924,451 2,114,505
Scheduled repayments of long-term debt (320,049) (178,446)
Prepayments of long-term debt (1,958,382) (1,275,121)
Decrease (increase) in restricted cash 24,322 (328,035)
Repurchase of common stock (80,430) (233,305)
Net proceeds from the public offering
of Teekay Tankers 208,186 -
Net proceeds from the public offering
of Teekay LNG 84,185 -
Net proceeds from the public offering
of Teekay Offshore - 156,711
Other (37,991) (47,740)
------------------------------------------------------------------------
Net financing cash flow 1,844,292 208,569
------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels and equipment (910,304) (442,470)
Proceeds from sale of vessels and
equipment 199,475 326,901
Purchase of marketable securities (59,165) (549)
Proceeds from sale of marketable
securities 57,093 8,898
Purchase of OMI Corporation (net of
cash acquired $427) (1,098,216) -
Purchase of Petrojarl ASA (net of
cash acquired $71,728) (1,210) (464,823)
Loan to joint ventures (219,335) (61,333)
Other 16,229 10,952
------------------------------------------------------------------------
Net investing cash flow (2,015,433) (622,424)
------------------------------------------------------------------------
Increase in cash and cash equivalents 98,759 106,930
Cash and cash equivalents, beginning
of the year 343,914 236,984
------------------------------------------------------------------------
Cash and cash equivalents, end of
the year 442,673 343,914
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below are some of the significant items of income and expense
that affected the Company's net income for the three months and year
ended December 31, 2007 and 2006, all of which items are typically
excluded by securities analysts in their published estimates of the
Company's financial results:
------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, 2007 December 31, 2007
------------------ ------------------
(unaudited) (unaudited)
------------------ ------------------
$ Per $ Per
$ Share $ Share
--------------------------------------------------------------------------
(Loss) gain on sale of
vessels and equipment (1,055) (0.01) 18,630 0.25
Gain on sale of marketable
securities and investments - - 11,833 0.16
Foreign currency exchange
losses (1) (7,407) (0.10) (22,106) (0.30)
Deferred income tax
recovery (expense) on
unrealized foreign
exchange losses
(gains) (2) 1,164 0.02 (18,580) (0.25)
Unrealized loss from
interest rate swaps (5,815) (0.08) (12,113) (0.16)
Net effect from non-cash
changes in purchase price
allocation for
acquisition of Teekay
Petrojarl ASA (3) - - (4,240) (0.06)
Equity loss from OMI
joint venture (4) (2,743) (0.04) (3,010) (0.04)
Other (5) (3,483) (0.05) (4,325) (0.06)
Minority owners' share
of items above (6) 5,850 0.08 17,628 0.24
--------------------------------------------------------------------------
Total (13,489) (0.18) (16,283) (0.22)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Three Months Ended Year Ended
December 31, 2006 December 31, 2006
------------------ ------------------
(unaudited) (unaudited)
$ Per $ Per
$ Share $ Share
--------------------------------------------------------------------------
(Write-down) gain on sale of
vessels and equipment (4,754) (0.06) (1,829) (0.02)
Foreign currency exchange
losses (1) (12,391) (0.16) (45,382) (0.60)
Minority owners' share of
foreign currency exchange
losses 6,841 0.09 14,703 0.19
Deferred income tax expense on
unrealized foreign exchange
gains (2) (5,102) (0.07) (10,529) (0.14)
Restructuring charge (1,515) (0.02) (8,929) (0.12)
Net effect from consolidation
of Teekay Petrojarl ASA 252 - (1,313) (0.02)
Loss on expiry of options to
construct LNG carriers - - (6,102) (0.08)
Other (5) (2,236) (0.03) (4,291) (0.06)
--------------------------------------------------------------------------
Total (18,905) (0.25) (63,672) (0.85)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) Foreign currency exchange gains and losses primarily relate to the
Company's debt denominated in Euros and deferred tax liability
denominated in Norwegian Kroner. Nearly all of the Company's foreign
currency exchange gains and losses are unrealized.
(2) Portion of deferred income tax related to unrealized foreign exchange
gains and losses.
(3) Primarily from changes in amortization of vessels, intangible assets
and in-process revenue contracts relating to the period from October 1,
2006, to June 30, 2007, as a result of adjustments to the purchase
price allocation for acquisition of Teekay Petrojarl ASA.
(4) Primarily includes one-time retention bonuses for OMI employees.
(5) Primarily relates to write-off of capitalized loan costs and loss on
bond repurchases (8.875% Notes due 2011).
(6) Primarily relates to minority owners' share of foreign currency
exchange losses.
--------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)
--------------------------------------------------------------------------
Three Months Ended December 31, 2007
------------------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
Offshore Tanker Gas Tanker
Segment Segment Segment Segment Total
--------------------------------------------------------------------------
Net revenues (1) 224,824 53,554 47,991 187,762 514,131
Vessel operating
expenses 87,712 14,661 7,844 28,026 138,243
Time-charter hire
expense 40,395 10,221 - 95,244 145,860
Depreciation and
amortization 46,275 10,054 12,162 26,206 94,697
General and
administrative 25,030 4,584 5,106 25,361 60,081
Loss on sale of
vessels and equipment 1,055 - - - 1,055
--------------------------------------------------------------------------
Income from vessel
operations 24,357 14,034 22,879 12,925 74,195
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Three Months Ended September 30, 2007
-------------------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
Offshore Tanker Gas Tanker
Segment Segment Segment Segment Total
--------------------------------------------------------------------------
Net revenues (1) 219,613 50,457 42,921 149,291 462,282
Vessel operating
expenses 76,625 13,285 8,056 22,042 120,008
Time-charter hire
expense 40,615 7,773 - 73,368 121,756
Depreciation and
amortization 45,359 9,236 11,491 20,972 87,058
General and
administrative 25,956 4,889 5,677 24,390 60,912
Gain on sale of
vessels and equipment (8,072) - - - (8,072)
--------------------------------------------------------------------------
Income from vessel
operations 39,130 15,274 17,697 8,519 80,620
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Three Months Ended December 31, 2006
------------------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
Offshore Tanker Gas Tanker
Segment Segment Segment Segment Total
--------------------------------------------------------------------------
Net revenues (1) 218,280 46,187 29,111 149,753 443,331
Vessel operating
expenses 67,019 11,783 4,587 16,095 99,484
Time-charter hire
expense 43,170 4,309 - 55,068 102,547
Depreciation and
amortization 43,524 8,136 8,938 12,877 73,475
General and
administrative 24,919 4,048 4,657 22,753 56,377
Gain on sale of
vessels and equipment 5,362 - - (608) 4,754
Restructuring charge - - - 1,515 1,515
--------------------------------------------------------------------------
Income from vessel
operations 34,286 17,911 10,929 42,053 105,179
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Year Ended December 31, 2007
----------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
Offshore Tanker Gas Tanker
Segment Segment Segment Segment Total
--------------------------------------------------------------------------
Net revenues (1) 874,755 193,235 166,872 643,580 1,878,442
Vessel operating
expenses 301,478 51,458 30,239 81,368 464,543
Time-charter hire
expense 161,876 25,812 - 279,676 467,364
Depreciation and
amortization 172,983 36,018 46,018 74,094 329,113
General and
administrative 101,119 18,471 21,471 97,087 238,148
Gain on sale of
vessels and equipment (18,630) - - - (18,630)
--------------------------------------------------------------------------
Income from vessel
operations 155,929 61,476 69,144 111,355 397,904
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Year Ended December 31, 2006
----------------------------
(unaudited)
----------
Fixed-
Rate Liquefied Spot
Offshore Tanker Gas Tanker
Segment Segment Segment Segment Total
--------------------------------------------------------------------------
Net revenues (1) 578,205 179,606 103,514 629,864 1,491,189
Vessel operating
expenses 134,866 44,083 18,912 59,489 257,350
Time-charter hire
expense 170,662 16,869 - 214,991 402,522
Depreciation and
amortization 105,861 32,741 33,160 52,203 223,965
General and
administrative 58,048 16,000 15,685 88,182 177,915
Writedown / (gain) on
sale of vessels and
equipment 698 - - (2,039) (1,341)
Restructuring charge - - - 8,929 8,929
--------------------------------------------------------------------------
Income from vessel
operations 108,070 69,913 35,757 208,109 421,849
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) Net revenues represents revenues less voyage expenses, which comprise
all expenses relating to certain voyages, including bunker fuel
expenses, port fees, canal tolls and brokerage commissions. Net
revenues is a non-GAAP financial measure used by certain investors to
measure the financial performance of shipping companies. Please see
the Company's Web site at www.teekay.com for a reconciliation of this
non-GAAP measure as used in this release to the most directly
comparable GAAP financial measure.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: the Company’s future growth prospects; tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; expected demand in the offshore oil production sector and the demand for vessels; the Company’s future capital expenditure commitments and the financing requirements for such commitments; the timing of newbuilding deliveries; the commencement of charter contracts; and the level of future OPEC oil production. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products and LNG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs and FPSOs; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; changes affecting the offshore tanker market; shipyard production delays; the Company’s future capital expenditure requirements; the Company’s, Teekay LNG’s, Teekay Offshore’s, and Teekay Tankers’ potential inability to raise financing to purchase additional vessels; conditions in the United States capital markets; changes affecting the conventional tanker market; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2006. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.