Teekay Corporation Reports Preliminary Restated Historical Results
- Press Release
- Source: Teekay Corporation
- On 9:04 am EST, Tuesday November 25, 2008
HAMILTON, BERMUDA--(MARKET WIRE)--Nov 25, 2008 -- Highlights
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| TK | 21.82 | +0.92 |
- Teekay Corporation has substantially completed its previously announced financial restatement.
- As anticipated, there is no impact from any restatement adjustments on the Company's actual cash flows or liquidity in any period.
- All restatement adjustments are non-cash in nature and do not affect the economics of the Company.
- The Company will host a conference call on Tuesday, November 25, 2008 to discuss its preliminary restated results and key elements of its financial position and outlook.
Teekay Corporation (Teekay or the Company) (NYSE:TK - News) today reported preliminary results for its previously announced financial restatement, including results for fiscal years 2003 through 2007 and the first and second quarters of 2008, to adjust for:
- its accounting treatment for certain derivative transactions under the Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging (SFAS 133), as more fully discussed below under "Restatement for Accounting under SFAS 133"; and
- its financial statement presentation for the Company's interests in the RasGas joint ventures, whereby certain assets and liabilities have been grossed-up for accounting presentation purposes, as more fully discussed below under "Restatement for Gross-up Presentation of RasGas Joint Ventures and Other."
In addition, the Company is currently finalizing the review of an outstanding item pertaining to the timing of the expense recognition relating to the Company's long-term incentive program. As such, all restated results included in this release, including results for fiscal years 2003 through 2007 and the first and second quarters of 2008, should be considered preliminary, subject to finalization of the review of the Company's long-term incentive program and completion of Ernst & Young LLP's procedures associated with the Company's restated financial statements. Any adjustments relating to expense accruals related to the Company's long-term incentive program will be non-cash in nature and will not impact the total cost of the program.
"It is important to emphasize that adjustments to the Company's preliminary reported net income as a result of these restatements are due to changes in the Company's accounting treatment only and have no impact on the Company's actual cash flows," stated Vince Lok, Teekay Corporation's Chief Financial Officer. "Any adjustments to net income as a result of the change in the Company's hedge accounting are exclusively due to unrealized gains or losses from the change in the mark-to-market value of our derivative instruments at the end of each reporting period, which have no cash impact. The change in the Company's hedge accounting treatment does not affect the economics of our hedging transactions."
Mr. Lok continued, "In addition, the gross-up of assets and liabilities related to the Company's RasGas joint venture interests, which came into scope as a result of the Company's detailed and thorough restatement audit, does not impact stockholders' equity and does not result in any change to the Company's net exposure in these joint ventures."
A summary of financial information reflecting the preliminary restatement adjustments for the three and six months ended June 30, 2008 and 2007 is presented below. Appendix C to this release provides a summary of the impact of the preliminary restatements on reported net income for the fiscal years ended December 31, 2003 through 2007. Please see "Information on SEC Filings" below for information about the Company's upcoming filings with the U.S. Securities and Exchange Commission (SEC) relating to the restatements.
Summary of Preliminary Restated Second Quarter 2008 Results
The tables below summarize the impact of the preliminary restatements on previously reported net income, and net income excluding specific items which are detailed in Appendix A(1) to this release, for the three and six months ended June 30, 2008 and 2007. The restatement adjustments are all non-cash in nature and, thus, have no impact on net income excluding the specific items in Appendix A(1). Details of the preliminary restatement adjustments for each of the three and six month periods ended June 30, 2008 and 2007 are included in the summary financial statements provided in this release.
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Three Months Ended June 30, 2008(2)
Adjustments
Gross-Up As
As Derivative Presenta- Prelimin-
Previously Instru- tion and arily
(in thousands Reported ments(3) Other(4) Restated
of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Net Income 104,467 75,191 2,903 182,561
Appendix A Items(1) (27,390) (75,191) (2,903) (105,484)
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Net Income excluding
Appendix A Items 77,077 - - 77,077
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Three Months Ended June 30, 2007(2)
Adjustments
Gross-Up As
As Derivative Presenta- Prelimin-
Previously Instru- tion and arily
(in thousands Reported ments(3) Other(4) Restated
of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Net Income 78,411 90,426 154 168,991
Appendix A Items (1) (10,752) (90,426) (154) (101,332)
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Net Income excluding
Appendix A Items 67,659 - - 67,659
---------------------------------------------------------------------------For the three months ended June 30, 2008, the Company now preliminarily reports net income of $182.6 million, (or $2.49 per share), compared to net income of $169.0 million, (or $2.24 per share), for the same period last year. The results for the three months ended June 30, 2008 and 2007 include a number of specific items which have the net effect of increasing net income by $105.5 million (or $1.44 per share) and $101.3 million (or $1.34 per share), respectively, as detailed in Appendix A to this release. Net revenues(5) for the second quarter of 2008 increased to $579.9 million from $443.2 million for the same period in 2007, and income from vessel operations decreased to $97.6 million from $127.0 million for such periods.
(1) Appendix A to this release lists specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company's financial results.
(2) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release.
(3) Please refer to "Restatement for Accounting under SFAS 133" included in this release.
(4) Please refer to "Restatement for Gross-up Presentation of RasGas Joint Ventures and Other" included in this release.
(5) 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 financial measure under United States generally accepted accounting principles (GAAP).
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Six Months Ended June 30, 2008(1)
Adjustments
Gross-Up As
As Derivative Presenta- Prelimin-
Previously Instru- tion and arily
(in thousands Reported ments(2) Other(3) Restated
of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Net Income 119,645 (46,000) 2,270 75,915
Appendix A Items(4) 18,177 46,000 (2,270) 61,907
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Net Income excluding
Appendix A Items 137,822 - - 137,822
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Six Months Ended June 30, 2007(1)
Adjustments
Gross-Up As
As Derivative Presenta- Prelimin-
Previously Instru- tion and arily
(in thousands Reported ments(2) Other(3) Restated
of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
Net Income 154,786 102,110 (864) 256,032
Appendix A Items(4) (3,383) (102,110) 864 (104,629)
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Net Income excluding
Appendix A Items 151,403 - - 151,403
---------------------------------------------------------------------------Preliminary net income for the six months ended June 30, 2008 is now $75.9 million, (or $1.03 per share), compared to $256.0 million, (or $3.42 per share), for the same period last year. The results for the six months ended June 30, 2008 and 2007 include a number of specific items which have the net effect of decreasing net income by $61.9 million (or $0.85 per share) and increasing net income by $104.6 million (or $1.40 per share), respectively, as detailed in Appendix A to this release. Net revenues(5) for the six months ended June 30, 2008 increased to $1.2 billion from $904.0 million for the same period in 2007, and income from vessel operations decreased to $219.1 million from $258.0 million for the such periods.
Since the preliminary restatement adjustments are all non-cash in nature, they have no impact on the Company's cash dividends. On October 7, 2008, the Company declared a 15 percent increase to its quarterly cash dividend to $0.31625 per share for the three months ended September 30, 2008. The dividend was paid on October 31, 2008, to all shareholders of record on October 17, 2008.
Further Information Regarding Restatement Items
Restatement for Accounting under SFAS 133
On August 7, 2008, the Company announced that it would restate its historical financial statements to adjust its accounting treatment for certain derivative transactions under SFAS 133. This restatement adjusts for certain interest rate swap agreements, foreign exchange forward contracts, freight forward agreements and synthetic time charters that did not qualify for hedge accounting treatment under SFAS 133 as aspects of the Company's hedge documentation did not meet the strict technical requirements of the standard.
(1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint Ventures and Other" included in this release.
(4) Appendix A to this release lists specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company's financial results.
(5) 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 financial measure under United States generally accepted accounting principles (GAAP).
Accordingly, the Company has now recognized changes in the fair value of these derivatives through the statement of income (loss) rather than directly to stockholders' equity on the balance sheet. This restatement, which is non-cash in nature, has resulted in adjustments to Teekay's previously reported net income, but does not affect the economics of any hedging transactions nor the Company's actual cash flows or liquidity. The Company believes that the applicable derivative transactions were consistent with its risk management policies and that its overall hedging strategy continues to be sound.
The Company has decided to discontinue the use of hedge accounting for its derivative instruments, except for certain foreign currency forward contracts. As a result, the unrealized gains and losses due to the change in the fair values of its non-designated derivative instruments will be reflected as increases or decreases to the Company's net income going forward. This change will not impact the economics of these hedging transactions nor the Company's actual cash flows or liquidity in any future period.
Restatement for Gross-up Presentation of RasGas Joint Ventures and Other
Subsequent to the release of its preliminary second quarter financial results in August 2008, the Company reviewed and revised its financial statement presentation of debt and interest rate swap agreements related to its joint venture interests in the three RasGas II and four RasGas 3 LNG carriers. As a result, certain of the Company's assets and liabilities have been grossed up for accounting presentation purposes. These adjustments, which do not affect the Company's net income, net cash flows, liquidity or stockholders' equity in any period, are described below. All of the RasGas II and RasGas 3 LNG carriers have now been delivered and are currently operating under long-term, fixed-rate contracts.
In January 2006, the Company entered into a sale and 30-year leaseback arrangement pertaining to shipbuilding contracts for its 70 percent interest in the three RasGas II LNG carriers. In accordance with Emerging Issues Task Force Issue 97-10, The Effect of Lessee Involvement in Asset Construction, the Company has now recorded on its December 31, 2006 balance sheet the accumulated construction cost of these vessels and related capital lease obligations for the period subsequent to the RasGas II sale-leaseback transaction as the Company retained certain construction period risks. This adjustment does not impact the accounting treatment for these vessels in any period following their delivery in the first quarter of 2007. The Company has restated its consolidated balance sheet as at December 31, 2006 to record the accumulated cost of approximately $295 million for these vessels under construction, and related capital lease obligations.
Through a wholly-owned subsidiary, the Company owns a 40 percent interest in the four RasGas 3 LNG carriers. The joint venture partner, a wholly-owned subsidiary of Qatar Gas Transport Company, owns the remaining 60 percent interest. Both wholly-owned subsidiaries are joint and several co-borrowers with respect to the RasGas 3 term loan and related interest rate swap agreements. Previously, the Company recorded 40 percent of the RasGas 3 term loan and interest rate swap agreements in its financial statements. As the Company is a joint and several borrower, it has now made adjustments to its balance sheet to reflect 100 percent of the RasGas 3 term loan and interest rate swap agreements, as well as offsetting increases in assets, for the fourth quarter of 2006 through the second quarter of 2008. The Company has also made an adjustment to its statement of income to reflect 100 percent of the interest expense on the RasGas 3 term loan with an offsetting amount to interest income from its loan to the joint venture. These adjustments do not result in any increase to the Company's net exposure in these joint ventures.
The Company has also restated certain other items primarily relating to amounts attributable to minority interests.
Information on SEC Filings
More detailed financial information relating to the restatements will be included in the amended Form 20-F/A for the year ended December 31, 2007 (certain financial information will be included for annual fiscal periods from 2003 through 2007), in the amended Form 6-K/A for the quarter ended March 31, 2008 and in the Form 6-K for the quarter ended June 30, 2008, which the Company will file with or furnish to, as applicable, the SEC and make available on its website at www.teekay.com once the final restatement has been completed. For a summary of the impact of the preliminary restatements on reported net income for the fiscal years ended December 31, 2003 through 2007, please refer to Appendix C of this release.
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 - News), 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 - News), and continues to expand its conventional tanker business through its publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE:TNK - News). With a fleet of approximately 190 vessels, offices in 22 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".
Conference Call
The Company plans to host a conference call at 11:00 a.m. ET on Tuesday, November 25, 2008, to discuss the Company's preliminary restated results. In addition, the Company will take the opportunity to discuss key elements of its financial position and outlook. All shareholders and interested parties are invited to listen to the live conference call at www.teekay.com or by dialing (866) 322-1159, or (416) 640-3404 if outside North America, and quoting confirmation code 1428377. The Company plans to make available a recording of the conference call until midnight December 2, 2008 by dialing (888) 203-1112 or (647) 436-0148, and entering access code 1428377, or via the Company's web site until December 24, 2008.
An investor presentation to accompany this conference call will be made available on the Company's web site at www.teekay.com prior to the start of the call.
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TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1)
(in thousands of U.S. dollars, except share and per share data)
---------------------------------------------------------------------------
Three Months Ended June 30, 2008
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
REVENUES(4) 790,530 (21,131) - 769,399
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OPERATING EXPENSES(5)
Voyage expenses(6) 190,859 (1,344) - 189,515
Vessel operating expenses 158,948 522 - 159,470
Time-charter hire expense 142,702 (20) - 142,682
Depreciation and
amortization 106,700 - - 106,700
General and administrative 69,899 1,841 - 71,740
Gain on sale of vessels
and equipment (2,925) - - (2,925)
Restructuring charge 4,617 - - 4,617
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Total operating expenses 670,800 999 - 671,799
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Income from vessel
operations 119,730 (22,130) - 97,600
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OTHER ITEMS
Interest (expense) gain(7) (25,398) 143,691 (4,331) 113,962
Interest income (loss)(7) 16,703 (23,183) 4,331 (2,149)
Income tax recovery
(expense) 10,160 (559) 1,600 11,201
Equity loss from joint
ventures (2,063) - - (2,063)
Foreign currency exchange
gain (loss)(5) 958 (2,765) - (1,807)
Minority interest (expense)
income (20,951) (19,174) 1,303 (38,822)
Other - net 5,328 (689) 4,639
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Total other items (15,263) 97,321 2,903 84,961
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Net income 104,467 75,191 2,903 182,561
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Earnings per common share
- Basic $1.44 $2.52
- Diluted $1.43 $2.49
---------------------------------------------------------------------------
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Weighted average number of
common shares outstanding:
- Basic 72,377,684 72,377,684
- Diluted 73,279,213 73,279,213
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(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
(4) Revenues have been restated to reflect the unrealized loss due to
changes in the mark-to-market value of non-designated freight forward
agreements (FFAs) and synthetic time charters (STCs) that do not
qualify as effective hedges for accounting purposes. FFAs and STCs
are agreements put in place to economically hedge a portion of the
Company's exposure to changes in spot tanker charter rates.
(5) Vessel operating expenses, time-charter hire expense, general and
administrative and foreign currency exchange gain (loss) have been
restated to reflect the unrealized gains or losses due to changes in
the mark-to-market value of non-designated foreign exchange forward
contracts that do not qualify as effective hedges for accounting
purposes.
(6) Voyage expenses have been restated to reflect the unrealized gain due
to changes in the mark-to-market value of non-designated bunker fuel
swap contracts that do not qualify as effective hedges for accounting
purposes. Bunker fuel swap contracts are used as economic hedges to
protect against changes in forecasted bunker fuel costs for certain
time-chartered-out vessels and for vessels servicing certain contracts
of affreightment.
(7) Adjustments to interest (expense) gain and interest income (loss)
reflect the unrealized gains and losses from the change in fair value
of certain interest rate swap agreements that do not qualify as
effective hedges for accounting purposes.
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TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME (LOSS)(1)
(in thousands of U.S. dollars, except share and per share data)
---------------------------------------------------------------------------
Three Months Ended March 31, 2008
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
REVENUES(4) 736,391 6,981 - 743,372
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OPERATING EXPENSES(5)
Voyage expenses(6) 168,723 738 - 169,461
Vessel operating expenses 145,443 (2,394) - 143,049
Time-charter hire expense 144,921 (437) - 144,484
Depreciation and
amortization 97,707 - - 97,707
General and administrative 67,671 (1,515) - 66,156
Gain on sale of vessels and
equipment (496) - - (496)
Restructuring charge 1,500 - - 1,500
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Total operating expenses 625,469 (3,608) - 621,861
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Income from vessel
operations 110,922 10,589 - 121,511
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OTHER ITEMS
Interest expense(7) (87,188) (190,429) (4,631) (282,248)
Interest income(7) 18,359 37,619 4,631 60,609
Income tax recovery
(expense) (2,726) 243 - (2,483)
Equity loss from joint
ventures (3,609) - - (3,609)
Foreign currency exchange
loss(5) (29,483) (2,509) - (31,992)
Minority interest (expense)
income 3,472 23,721 (633) 26,560
Other - net 5,431 (425) - 5,006
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Total other items (95,744) (131,780) (633) (228,157)
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Net income (loss) 15,178 (121,191) (633) (106,646)
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Earnings (loss) per common
share
- Basic $0.21 ($1.47)
- Diluted $0.21 ($1.47)
---------------------------------------------------------------------------
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Weighted average number of
common shares outstanding:
- Basic 72,644,397 72,644,397
- Diluted 73,435,167 72,644,397
---------------------------------------------------------------------------
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(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
(4) Revenues have been restated to reflect the unrealized gain due to
changes in the mark-to-market value of non-designated freight forward
agreements (FFAs) and synthetic time charters (STCs) that do not
qualify as effective hedges for accounting purposes. FFAs and STCs
are agreements put in place to economically hedge a portion of the
Company's exposure to changes in spot tanker charter rates.
(5) Vessel operating expenses, time-charter hire expense, general and
administrative and foreign currency exchange loss have been restated
to reflect the unrealized gains or losses due to changes in the
mark-to-market value of non-designated foreign exchange forward
contracts that do not qualify as effective hedges for accounting
purposes.
(6) Voyage expenses have been restated to reflect the unrealized loss due
to changes in the mark-to-market value of non-designated bunker fuel
swap contracts that do not qualify as effective hedges for accounting
purposes. Bunker fuel swap contracts are used as economic hedges to
protect against changes in forecasted bunker fuel costs for certain
time-chartered-out vessels and for vessels servicing certain contracts
of affreightment.
(7) Adjustments to interest expense and interest income reflect the
unrealized gains and losses from the change in fair value of certain
interest rate swap agreements that do not qualify as effective hedges
for accounting purposes.
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TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1)
(in thousands of U.S. dollars, except share and per share data)
---------------------------------------------------------------------------
Three Months Ended June 30, 2007
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
REVENUES(4) 566,127 (391) 565,736
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OPERATING EXPENSES(5)
Voyage expenses(6) 123,554 (1,046) - 122,508
Vessel operating expenses 108,851 (4,948) - 103,903
Time-charter hire expense 101,247 (289) - 100,958
Depreciation and
amortization 68,095 - - 68,095
General and administrative 58,358 (3,467) - 54,891
Gain on sale of vessels and
equipment (11,613) - - (11,613)
Restructuring charge - - - -
---------------------------------------------------------------------------
Total operating expenses 448,492 (9,750) - 438,742
---------------------------------------------------------------------------
Income from vessel
operations 117,635 9,359 - 126,994
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OTHER ITEMS
Interest (expense) gain(7) (64,158) 137,193 (4,079) 68,956
Interest income (loss)(7) 23,390 (27,047) 4,079 422
Income tax recovery
(expense) (287) (558) - (845)
Equity loss from joint
ventures (2,092) - - (2,092)
Foreign currency exchange
gain (loss)(5) 1,214 (9,849) - (8,635)
Minority interest(expense)
income (6,341) (17,889) 154 (24,076)
Other - net 9,050 (783) - 8,267
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Total other items (39,224) 81,067 154 41,997
---------------------------------------------------------------------------
Net income (loss) 78,411 90,426 154 168,991
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Earnings per common share
- Basic $1.06 $2.29
- Diluted $1.04 $2.24
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average number of
common shares outstanding:
- Basic 73,843,784 73,843,784
- Diluted 75,310,567 75,310,567
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
(4) Revenues have been restated to reflect the unrealized loss due to
changes in the mark-to-market value of non-designated freight forward
agreements (FFAs) that do not qualify as effective hedges for
accounting purposes. FFAs are agreements put in place to economically
hedge a portion of the Company's exposure to changes in spot tanker
charter rates.
(5) Vessel operating expenses, time-charter hire expense, general and
administrative and foreign currency exchange gain (loss) have been
restated to reflect the unrealized gains or losses due to changes in
the mark-to-market value of non-designated foreign exchange forward
contracts that do not qualify as effective hedges for accounting
purposes.
(6) Voyage expenses have been restated to reflect the unrealized gain due
to changes in the mark-to-market value of non-designated bunker fuel
swap contracts that do not qualify as effective hedges for accounting
purposes. Bunker fuel swap contracts are used as economic hedges to
protect against changes in forecasted bunker fuel costs for certain
time-chartered-out vessels and for vessels servicing certain contracts
of affreightment.
(7) Adjustments to interest (expense) gain and interest income (loss)
reflect the unrealized gains and losses from the change in fair value
of certain interest rate swap agreements that do not qualify as
effective hedges for accounting purposes.
---------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1)
(in thousands of U.S. dollars, except share and per share data)
---------------------------------------------------------------------------
Six Months Ended June 30, 2008
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
REVENUES(4) 1,526,921 (14,150) - 1,512,771
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OPERATING EXPENSES(5)
Voyage expenses(6) 359,582 (606) - 358,976
Vessel operating expenses 304,391 (1,872) - 302,519
Time-charter hire expense 287,623 (457) - 287,166
Depreciation and
amortization 204,407 - - 204,407
General and administrative 137,570 326 - 137,896
Gain on sale of vessels and
equipment (3,421) - - (3,421)
Restructuring charge 6,117 - - 6,117
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Total operating expenses 1,296,269 (2,609) - 1,293,660
---------------------------------------------------------------------------
Income from vessel
operations 230,652 (11,541) - 219,111
---------------------------------------------------------------------------
OTHER ITEMS
Interest expense(7) (112,586) (46,738) (8,962) (168,286)
Interest income(7) 35,062 14,436 8,962 58,460
Income tax recovery
(expense) 7,434 (316) 1,600 8,718
Equity loss from joint
ventures (5,672) - - (5,672)
Foreign currency exchange
loss(5) (28,525) (5,274) - (33,799)
Minority interest (expense)
income (17,479) 4,547 670 (12,262)
Other - net 10,759 (1,114) - 9,645
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Total other items (111,007) (34,459) 2,270 (143,196)
---------------------------------------------------------------------------
Net income 119,645 (46,000) 2,270 75,915
---------------------------------------------------------------------------
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Earnings per common share
- Basic $1.65 $1.05
- Diluted $1.63 $1.03
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average number of
common shares outstanding:
- Basic 72,511,041 72,511,041
- Diluted 73,357,190 73,357,190
---------------------------------------------------------------------------
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(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results
included in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
(4) Revenues have been restated to reflect the unrealized loss due to
changes in the mark-to-market value of non-designated freight forward
agreements (FFAs) and synthetic time charters (STCs) that do not
qualify as effective hedges for accounting purposes. FFAs and STCs are
agreements put in place to economically hedge a portion of the
Company's exposure to changes in spot tanker charter rates.
(5) Vessel operating expenses, time-charter hire expense, general and
administrative and foreign currency exchange loss have been restated to
reflect the unrealized gains or losses due to changes in the
mark-to-market value of non-designated foreign exchange forward
contracts that do not qualify as effective hedges for accounting
purposes.
(6) Voyage expenses have been restated to reflect the unrealized gain due
to changes in the mark-to-market value of non-designated bunker fuel
swap contracts that do not qualify as effective hedges for accounting
purposes. Bunker fuel swap contracts are used as economic hedges to
protect against changes in forecasted bunker fuel costs for certain
time-chartered-out vessels and for vessels servicing certain
contracts of affreightment.
(7) Adjustments to interest expense and interest income reflect the
unrealized gains and losses from the change in fair value of certain
interest rate swap agreements that do not qualify as effective hedges
for accounting purposes.
---------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1)
(in thousands of U.S. dollars, except share and per share data)
---------------------------------------------------------------------------
Six Months Ended June 30, 2007
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
REVENUES(4) 1,144,522 (538) - 1,143,984
---------------------------------------------------------------------------
OPERATING EXPENSES(5)
Voyage expenses(6) 242,493 (2,506) - 239,987
Vessel operating expenses 206,292 (7,199) - 199,093
Time-charter hire expense 199,748 (433) - 199,315
Depreciation and
amortization 147,358 - - 147,358
General and administrative 117,155 (5,342) - 111,813
Gain on sale of vessels and
equipment (11,613) - - (11,613)
Restructuring charge - - - -
---------------------------------------------------------------------------
Total operating expenses 901,433 (15,480) - 885,953
---------------------------------------------------------------------------
Income from vessel
operations 243,089 14,942 - 258,031
---------------------------------------------------------------------------
OTHER ITEMS
Interest (expense) gain(7) (124,541) 144,518 (6,926) 13,051
Interest income (loss)(7) 39,558 (31,108) 6,926 15,376
Income tax recovery
(expense) 3,795 (754) - 3,041
Equity loss from joint
ventures (3,687) - - (3,687)
Foreign currency exchange
loss(5) (4,674) (5,637) - (10,311)
Minority interest (expense)
income (11,981) (18,986) (864) (31,831)
Other - net 13,227 (865) - 12,362
---------------------------------------------------------------------------
Total other items (88,303) 87,168 (864) (1,999)
---------------------------------------------------------------------------
Net income 154,786 102,110 (864) 256,032
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Earnings per common share
- Basic $2.11 $3.48
- Diluted $2.07 $3.42
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Weighted average number of
common shares outstanding:
- Basic 73,488,668 73,488,668
- Diluted 74,929,991 74,929,991
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
(4) Revenues have been restated to reflect the unrealized loss due to
changes in the mark-to-market value of non-designated freight forward
agreements (FFAs) that do not qualify as effective hedges for
accounting purposes. FFAs are agreements put in place to economically
hedge a portion of the Company's exposure to changes in spot tanker
charter rates.
(5) Vessel operating expenses, time-charter hire expense, general and
administrative and foreign currency exchange loss have been restated
to reflect the unrealized gains or losses due to changes in the
mark-to-market value of non-designated foreign exchange forward
contracts that do not qualify as effective hedges for accounting
purposes.
(6) Voyage expenses have been restated to reflect the unrealized gain
due to changes in the mark-to-market value of non-designated bunker
fuel swap contracts that do not qualify as effective hedges for
accounting purposes. Bunker fuel swap contracts are used as economic
hedges to protect against changes in forecasted bunker fuel costs for
certain time-chartered-out vessels and for vessels servicing certain
contracts of affreightment.
(7) Adjustments to interest (expense) gain and interest income (loss)
reflect the unrealized gains and losses from the change in fair value
of certain interest rate swap agreements that do not qualify as
effective hedges for accounting purposes.
---------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED BALANCE SHEET(1)
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
As at June 30, 2008
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
ASSETS
Cash and cash equivalents 498,933 - - 498,933
Other current assets 538,833 - 22,673 561,506
Restricted cash - current 53,067 - - 53,067
Vessels held for sale 18,203 - - 18,203
Restricted cash - long-term 661,758 - - 661,758
Vessels and equipment 6,664,153 - - 6,664,153
Advances on newbuilding
contracts 693,292 - - 693,292
Other assets 893,160 - 465,209 1,358,369
Intangible assets 256,070 - - 256,070
Goodwill 491,911 - - 491,911
---------------------------------------------------------------------------
Total assets 10,769,380 - 487,882 11,257,262
---------------------------------------------------------------------------
---------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and
accrued liabilities 438,867 - 3,401 442,268
Current portion of
long-term debt 426,189 - (94,547) 331,642
Long-term debt 5,708,236 - 579,434 6,287,670
Other long-term
liabilities / In process
revenue contracts 792,472 - 5,903 798,375
Minority interest 588,916 - 83,246 672,162
Stockholders' equity 2,814,700 - (89,555) 2,725,145
---------------------------------------------------------------------------
Total liabilities and
stockholders' equity 10,769,380 - 487,882 11,257,262
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results
included in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas
Joint Ventures and Other" included in this release.
---------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED BALANCE SHEET(1)
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
As at December 31, 2007
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
ASSETS
Cash and cash equivalents 442,673 - - 442,673
Other current assets 461,546 - 7,512 469,058
Restricted cash - current 33,479 - - 33,479
Vessels held for sale 79,689 - - 79,689
Restricted cash - long-term 652,717 - - 652,717
Vessels and equipment 6,229,809 - - 6,229,809
Advances on newbuilding
contracts 617,066 - - 617,066
Other assets 848,632 - 354,524 1,203,156
Intangible assets 259,952 - - 259,952
Goodwill 434,590 - - 434,590
---------------------------------------------------------------------------
Total assets 10,060,153 - 362,036 10,422,189
---------------------------------------------------------------------------
---------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and
accrued liabilities 364,635 - - 364,635
Current portion of
long-term debt 474,873 - 7,512 482,385
Long-term debt 5,285,397 - 353,082 5,638,479
Other long-term
liabilities / In
process revenue contracts 719,884 - 17,709 737,593
Minority interest 527,494 - 18,814 546,308
Stockholders' equity 2,687,870 - (35,081) 2,652,789
---------------------------------------------------------------------------
Total liabilities and
stockholders' equity 10,060,153 - 362,036 10,422,189
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
---------------------------------------------------------------------------
TEEKAY CORPORATION
SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS(1)
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
Six Months Ended June 30, 2008
Adjustments
Gross-Up
As Derivative Presenta-
Previously Instru- tion and As
Reported ments(2) Other(3) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- -----------
Cash and cash equivalents
provided by (used for)
OPERATING ACTIVITIES
---------------------------------------------------------------------------
Net operating cash flow 164,420 - - 164,420
---------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from long-term
debt 1,155,095 - 124,293 1,279,388
Scheduled repayments of
long-term debt (198,320) - - (198,320)
Prepayments of long-term
debt (645,321) - - (645,321)
Increase in restricted cash (11,503) - - (11,503)
Repurchase of common stock (20,512) - - (20,512)
Net proceeds from the
public offering of Teekay
LNG 148,345 - - 148,345
Net proceeds from the
public offering of Teekay
Offshore 134,265 - - 134,265
Other (36,188) - - (36,188)
---------------------------------------------------------------------------
Net financing cash flow 525,861 - 124,293 650,154
---------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels
and equipment (410,495) - - (410,495)
Proceeds from sale of
vessels and equipment 79,224 - - 79,224
Purchase of marketable
securities (542) - - (542)
Proceeds from sale of
marketable securities 11,058 - - 11,058
Purchase of Teekay
Petrojarl ASA (257,142) - - (257,142)
Purchase of 50% of OMI
Corporation - - - -
Loan to joint ventures (87,198) - (124,293) (211,491)
Other 31,074 - - 31,074
--------------------------------------------------------------------------
Net investing cash flow (634,021) - (124,293) (758,314)
--------------------------------------------------------------------------
Increase in cash and cash
equivalents 56,260 - - 56,260
Cash and cash equivalents,
beginning of the period 442,673 - - 442,673
--------------------------------------------------------------------------
Cash and cash equivalents,
end of the period 498,933 - - 498,933
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other" included in this release.
---------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME (PRELIMINARY RESTATED)
(1)(2)
(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 and six months ended
June 30, 2008, all of which items are typically excluded by securities
analysts in their published estimates of the Company's financial results:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, 2008 June 30, 2008
(unaudited) (unaudited)
$ Per $ Per
$ Share $ Share
---------------------------------------------------------------------------
Gain on sale of vessels and
equipment 2,925 0.04 3,421 0.05
Foreign currency exchange
losses(3) (2,764) (0.04) (36,987) (0.50)
Deferred income tax expense
on unrealized foreign
exchange gains(4) (284) - (8,680) (0.12)
Unrealized gains from
derivative instruments(5) 48,092 0.66 36,637 0.50
Net effect from non-cash
changes in purchase price
allocation for the
acquisition of Teekay
Petrojarl ASA(6) (6,398) (0.09) (6,398) (0.09)
Net effect from non-cash
changes in purchase price
allocation for the
acquisition of 50 percent
of OMI Corporation(7) (3,084) (0.04) (7,028) (0.10)
Restructuring charge(8) (4,617) (0.06) (4,617) (0.06)
Other(9) (712) (0.01) (4,810) (0.07)
Minority owners' share of
items above(10) (5,768) (0.08) 10,285 0.14
---------------------------------------------------------------------------
Total as previously reported 27,390 0.38 (18,177) (0.25)
Preliminary restatement
adjustments:
Foreign currency exchange
gains(5) 957 0.01 1,648 0.02
Unrealized gains (losses)
from derivative
instruments(5) 93,408 1.27 (52,195) (0.71)
Other(9) 1,600 0.02 1,600 0.02
Minority owners' share of
items above(10) (17,871) (0.24) 5,217 0.07
---------------------------------------------------------------------------
Total as preliminarily
restated 105,484 1.44 (61,907) (0.85)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" and
"Restatement for Gross-up Presentation of RasGas Joint Ventures and
Other" included in this release.
(3) Previously reported foreign currency exchange 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 and have been
included in the amounts in the above table except for $3.7 million and
$8.4 million of gains in the three- and six-month periods ended June
30, 2008, respectively, for foreign exchange forward contracts relating
to vessel operating expenses and general and administrative expenses
not designated as hedges.
(4) Portion of deferred income tax related to unrealized foreign exchange
losses.
(5) Reflects the unrealized gain or loss due to changes in the
mark-to-market value of non-designated derivative instruments that do
not qualify as effective hedges for accounting purposes.
(6) Primarily relates to changes in amortization of in-process revenue
contracts as a result of adjustments to the purchase price allocation
of Teekay Petrojarl ASA.
(7) Primarily relates to changes in amortization of intangible assets as
a result of adjustments to the purchase price allocation of OMI
Corporation.
(8) Restructuring charges relate to the reorganization of certain of the
Company's operational functions.
(9) Primarily relates to a change in a non-cash deferred tax balances,
settlement of a previous claim against OMI Corporation, and loss on
bond repurchases (8.875% Notes due 2011).
(10) Primarily relates to minority owners' share of foreign currency
exchange losses and unrealized gains (losses) from derivative
instruments.
--------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(PRELIMINARY RESTATED)(1)(2)
(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 and six months ended
June 30, 2007, all of which items are typically excluded by securities
analysts in their published estimates of the Company's financial results:
--------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, 2007 June 30, 2007
(unaudited) (unaudited)
$ Per $ Per
$ Share $ Share
--------------------------------------------------------------------------
Gain on sale of vessels 11,613 0.16 11,613 0.16
Gain on sale of marketable
securities 4,836 0.06 4,836 0.06
Foreign currency exchange gains
(losses) (3) 1,214 0.02 (4,674) (0.06)
Deferred income tax expense on
unrealized foreign exchange gains
(4) (4,382) (0.06) (7,713) (0.10)
Net effect from non-cash changes in
purchase price allocation for
acquisition of Teekay Petrojarl
ASA (5) (4,240) (0.06) (4,240) (0.06)
Minority owners' share of items
above (6) 1,711 0.02 3,561 0.05
--------------------------------------------------------------------------
Total as previously reported 10,752 0.14 3,383 0.05
Preliminary restatement
adjustments:
Foreign currency exchange
losses (7) (9,849) (0.13) (5,637) (0.08)
Unrealized gains from derivative
instruments (7) 118,164 1.57 126,733 1.69
Minority owners' share of items
above (6) (17,735) (0.24) (19,850) (0.26)
--------------------------------------------------------------------------
Total as preliminarily restated 101,332 1.34 104,629 1.40
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" and
"Restatement for Gross-up Presentation of RasGas Joint Ventures and
Other" included in this release.
(3) Foreign currency exchange gains (losses) primarily relate to the
Company's debt denominated in Euros and deferred tax liability
denominated in Norwegian Kroner.
(4) Portion of deferred income tax related to unrealized foreign exchange
gains (losses).
(5) Primarily relates to changes in amortization of in-process revenue
contracts as a result of adjustments to the purchase price allocation
of Teekay Petrojarl ASA.
(6) Primarily relates to minority owners' share of foreign currency
exchange gains (losses) and unrealized gains (losses) from derivative
instruments.
(7) Reflects the unrealized gain or loss due to changes in the
mark-to-market value of non-designated derivative instruments that do
not qualify as effective hedges for accounting purposes.
---------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2)
SUMMARY BALANCE SHEET AS AT JUNE 30, 2008
(in thousands of U.S. dollars) (unaudited)
---------------------------------------------------------------------------
Teekay Consoli-
Corp. dation
Teekay Teekay Teekay Teekay Stand- Adjust-
Offshore LNG Tankers Petrojarl alone ments Total
-----------------------------------------------------------------------
ASSETS
Cash
and
cash
equiv-
alents 113,021 78,811 19,706 44,155 243,240 - 498,933
Other
current
assets 112,456 40,058 25,655 73,217 328,323 - 579,709
Restricted
cash
(current
& non-
current) - 695,128 - 2,745 16,952 - 714,825
Other
assets
(3) 70,906 867,431 994 (13,055) 432,093 - 1,358,369
Ves-
sels
and
eq-
uip-
ment 1,751,281 1,810,796 441,135 1,413,694 1,247,247 - 6,664,153
Advan-
ces
on
ves-
sels - 322,897 - - 370,395 - 693,292
Equity
invest-
ment
in
subsid-
iaries - - - - 1,628,137 (1,628,137) -
Intan-
gibles
and
good-
will 177,436 185,650 - 273,859 111,036 - 747,981
-----------------------------------------------------------------------
TOTAL
AS-
SETS 2,225,100 4,000,771 487,490 1,794,615 4,377,423 (1,628,137)11,257,262
-----------------------------------------------------------------------
-----------------------------------------------------------------------
LIABILITIES
AND
EQUITY
Accounts
payable
and
accrued
lia-
bil-
ities 73,973 67,537 11,899 78,503 210,356 - 442,268
Current
portion
of debt
and
leases 96,988 159,288 3,600 47,100 24,666 - 331,642
Long-
term
debt
and
cap-
ital
lea-
ses 1,521,519 2,826,465 317,028 398,900 1,223,758 - 6,287,670
Other
long-
term
lia-
bil-
ities /
in pro-
cess
revenue
con-
tracts 111,168 71,018 6,792 420,114 189,283 - 798,375
Min-
ority
inter-
est(4) 31,513 20,288 - 534 4,215 615,612 672,162
Equ-
ity 389,939 856,175 148,171 849,464 2,725,145 (2,243,749)2,725,145
-----------------------------------------------------------------------
TOTAL
LIA-
BIL-
ITIES
AND
EQU-
ITY 2,225,100 4,000,771 487,490 1,794,615 4,377,423 (1,628,137)11,257,262
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" and
"Restatement for Gross-up Presentation of RasGas Joint Ventures and
Other" included in this release.
(3) Other assets include equity investments in joint ventures.
(4) Minority interest in the Teekay Offshore, Teekay LNG, Teekay Tankers
and Teekay Petrojarl columns represent the joint venture partners'
share of the joint venture net assets. Minority interest in the
Consolidation Adjustments column represents the public's share of the
net assets of Teekay's publicly-traded subsidiaries.
---------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2)
SUMMARY STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2008
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
(unaudited)
Teekay Consoli-
Corp. dation
Teekay Teekay Teekay Teekay Stand- Adjust-
Offshore LNG Tankers Petrojarl alone ments Total
-----------------------------------------------------------------
Voyage
revenues 222,282 62,316 35,745 92,104 423,960 (67,008) 769,399
-----------------------------------------------------------------
Voyage
expenses 59,811 649 618 - 128,437 - 189,515
Vessel
operating
expenses 45,506 20,792 7,669 54,039 31,464 - 159,470
Time
charter
hire
expense 32,262 - - 6,718 170,710 (67,008) 142,682
Deprecia-
tion
and
amortiz-
ation 35,747 18,872 5,429 22,565 24,087 - 106,700
General
and
admin-
istra-
tive 15,684 5,745 1,670 11,234 37,407 - 71,740
Gain
on
disposal
of
vessels
and
equipment - - - - (2,925) - (2,925)
Restruc-
turing
charge - - - - 4,617 - 4,617
-----------------------------------------------------------------
Total
operating
expenses 189,010 46,058 15,386 94,556 393,797 (67,008) 671,799
-----------------------------------------------------------------
Income
from
vessel
operat-
ions 33,272 16,258 20,359 (2,452) 30,163 - 97,600
-----------------------------------------------------------------
Net
interest
(expense)
gain 24,855 34,371 1,979 3,190 47,418 - 111,813
Income
tax
recovery
(expense) 7,542 (8) - - 3,667 - 11,201
Equity
income
(loss) - (1,627) - - (436) - (2,063)
Equity
in
earnings
of
subsid-
iaries
(3) - - - - 101,664 (101,664) -
Foreign
exchange
gain
(loss) (1,081) (29) (7) (1,423) 733 - (1,807)
Minority
interest
income
(expense)
(4) (975) (4,392) - 180 (348) (33,287) (38,822)
Other
(net) 2,315 1,093 - (784) 2,015 4,639
-----------------------------------------------------------------
Total
other
income 32,656 29,408 1,972 1,163 154,713 (134,951) 84,961
-----------------------------------------------------------------
-----------------------------------------------------------------
NET
INCOME
(LOSS) 65,928 45,666 22,331 (1,289) 184,876 (134,951) 182,561
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
CASH
FLOW
FROM
VESSEL
OPERA-
TIONS
(5) 68,370 44,406 25,788 10,754 76,839 - 226,157
-----------------------------------------------------------------
-----------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results included
in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" and
"Restatement for Gross-up Presentation of RasGas Joint Ventures and
Other" included in this release.
(3) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(4) Minority interest income (expense) in the Teekay Offshore, Teekay LNG,
Teekay Tankers and Teekay Petrojarl columns represent the joint venture
partners' share of the net income (loss) of the respective joint
ventures. Minority interest income (expense) in the Consolidation
Adjustments column represents the public's share of the net income
(loss) of Teekay's publicly-traded subsidiaries.
(5) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense, vessel
write-downs/(gain) loss on sale of vessels and unrealized gains or
losses relating to derivatives. 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
website at http://www.teekay.com for a reconciliation of this non-GAAP
financial measure as used in this release to the most directly
comparable GAAP financial measure.
---------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX B - PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2)
SUMMARY STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2008
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
(unaudited)
Teekay Consoli-
Corp. dation
Teekay Teekay Teekay Teekay Stand- Adjust-
Offshore LNG Tankers Petrojarl alone ments Total
-----------------------------------------------------------------
Voyage
revenues 426,068 125,644 62,416 185,953 834,291 (121,601) 1,512,771
---------------------------------------------------------------------------
Voyage
expenses 111,188 944 714 - 246,130 - 358,976
Vessel
operating
expense 87,437 36,192 13,249 97,562 68,079 - 302,519
Time
charter
hire
expense 65,908 - - 13,712 329,147 (121,601) 287,166
Deprecia-
tion
and
amortiza-
tion 68,293 34,944 8,918 40,568 51,684 - 204,407
General
and
administra-
tive 31,002 9,705 2,991 23,958 70,240 - 137,896
Gain
on
disposal
of
vessels
and
equipment - - - - (3,421) - (3,421)
Restructuring
charge - - - - 6,117 - 6,117
---------------------------------------------------------------------------
Total
opera-
ting
expenses 363,828 81,785 25,872 175,800 767,976 (121,601) 1,293,660
---------------------------------------------------------------------------
Income
from
vessel
opera-
tions 62,240 43,859 36,544 10,153 66,315 - 219,111
---------------------------------------------------------------------------
Net
interest
expense (40,789) (23,541) (5,430) (10,533) (29,533) - (109,826)
Income
tax
recovery
(expense) 7,345 (88) - - 1,461 - 8,718
Equity
income
(loss) - (1,691) - - (3,981) - (5,672)
Equity
in
earnings
of
subsidiaries
(3) - - - - 25,113 (25,113) -
Foreign
exchange
gain
(loss) (3,544) (33,920) (13) (11,237) 14,915 - (33,799)
Minority
interest
income
(expense)
(4) (604) 75 - 180 (704) (11,209) (12,262)
Other
(net) 4,940 1,092 - (1,031) 4,644 9,645
---------------------------------------------------------------------------
Total
other
income (32,652) (58,073) (5,443) (22,621) 11,915 (36,322) (143,196)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
NET
INCOME
(LOSS) 29,588 (14,214) 31,101 (12,468) 78,230 (36,322) 75,915
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
CASH
FLOW
FROM
VESSEL
OPERA-
TIONS
(5) 130,053 90,773 45,462 22,131 126,859 - 415,278
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results
included in this release.
(2) Please refer to "Restatement for Accounting under SFAS 133" and
"Restatement for Gross-up Presentation of RasGas Joint Ventures and
Other" included in this release.
(3) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(4) Minority interest income (expense) in the Teekay Offshore, Teekay LNG,
Teekay Tankers and Teekay Petrojarl columns represent the joint venture
partners' share of the net income (loss) of the respective joint
ventures. Minority interest income (expense) in the Consolidation
Adjustments column represents the public's share of the net income
(loss) of Teekay's publicly-traded subsidiaries.
(5) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense, vessel write-
downs/(gain) loss on sale of vessels and unrealized gains or losses
relating to derivatives. 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 http://www.teekay.com for a reconciliation of this non-GAAP
financial measure as used in this release to the most directly
comparable GAAP financial measure.
---------------------------------------------------------------------------
TEEKAY CORPORATION
APPENDIX C - SUMMARY OF PRELIMINARY RESTATED FINANCIAL RESULTS(1)
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
The table below summarizes the impact on the Company's previously reported
net income for fiscal years ended December 31, 2003 through 2007, as a
result of the restatements described in this release under "Restatement
for Accounting under SFAS 133" and "Restatement for Gross-up Presentation
for RasGas Joint Ventures and Other".
---------------------------------------------------------------------------
Net Income
---------------------------------------------------------------------------
(in Year Ended December 31,
thousands of 2007 2006 2005 2004 2003
US dollars) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
---------------------------------------------------------------------------
As Previously
Reported $ 181,251 $262,244 $ 570,900 $ 757,440 $ 177,364
Preliminary
Restatement
Adjustments:
Derivative
Instruments
(2) (108,733) 47,767 (18,259) (65,709) 9,029
Gross-Up
Presentation
and Other
(3) (4,205) (1,147) - - -
---------------------------------------------------------------------------
As
Preliminarily
Restated $ 68,313 $ 308,864 $ 552,641 $ 691,731 $ 186,393
---------------------------------------------------------------------------
(1) The Company is currently reviewing the accounting for its long-term
incentive program. This review may result in additional accrual
adjustments which are not reflected in the preliminary results
included in this release.
(2) Relates to unrealized gains (losses) as a result of the change in
fair value of certain derivative instruments. Amounts are net of
minority interest. Please refer to "Restatement for Accounting under
SFAS 133" included in this release.
(3) Please refer to "Restatement for Gross-up Presentation of RasGas
Joint Ventures and Other" included in this release.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 amount and timing of the Company's determination of restated results for prior periods. 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: the extent and nature of any remaining issues to be resolved and the potential for such issues to impede the timely determination of the Company's restatement of prior period results; 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, 2007. 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.
Contact:
Contacts:
Teekay Corporation
Kent Alekson
Investor Relations Enquiries
(604) 844-6654
Teekay Corporation
Alana Duffy
Media Enquiries
(604) 844-6605
Website: http://www.teekay.com
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