Teekay Corp. Reports Q2 Results
Teekay Corporation (Teekay or the Company) (NYSE:TK) reported an adjusted net loss attributable to stockholders of Teekay(1) of $21.8 million, or $0.30 per share, for the quarter ended June 30, 2009, compared to adjusted net income of $77.1 million, or $1.05 per share, for the same period of the prior year. Adjusted net income (loss) attributable to stockholders of Teekay excludes a number of specific items which had the net effect of increasing net income by $181.2 million (or $2.49 per share) for the three months ended June 30, 2009 and $106.3 million (or $1.45 per share) for the three months ended June 30, 2008, as detailed in Appendix A to this release. Including these items, the Company reported net income attributable to the stockholders of Teekay, on a GAAP basis, of $159.4 million(2), or $2.19 per share, for the quarter ended June 30, 2009, compared to net income attributable to the stockholders of Teekay, on a GAAP basis, of $183.4 million(2), or $2.50 per share, for the same period of the prior year. Net revenues(3) for the second quarter of 2009 were $469.5 million compared to $621.3 million for the same period of the prior year.
(1) Adjusted net income (loss) attributable to stockholders of Teekay is a non-GAAP financial measure. Please refer to Appendix A to this release 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) and information about specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company's financial results.
(2) Effective January 1, 2009, Teekay adopted Statement of Financial Accounting Standards No. 160 (SFAS 160), "Non-controlling Interests in Consolidated Financial Statements - an Amendment of ARB No. 51." SFAS 160 amended the accounting and reporting for non-controlling interest, which is now classified as a component of equity. SFAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing non-controlling interests. All other requirements of SFAS 160 are applied prospectively.
(3) 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 GAAP.
For the six months ended June 30, 2009, the Company reported an adjusted net loss attributable to stockholders of Teekay of $10.9 million, or $0.15 per share, compared to adjusted net income attributable to stockholders of Teekay of $137.8 million, or $1.88 per share, for the same period of the prior year, excluding a number of specific items which had the net effect of increasing net income by $251.7 million (or $3.45 per share) and decreasing net income by $59.5 million (or $0.81 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported net income attributable to the stockholders of Teekay, on a GAAP basis, of $240.9 million, or $3.30 per share, compared to net income attributable to the stockholders of Teekay, on a GAAP basis, of $78.3 million, or $1.07 per share, for the same period of the prior year. Net revenues for the six months ended June 30, 2009 were $995.4 million compared to $1.2 billion for the same period of the prior year.
On June 4, 2009, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended June 30, 2009. The cash dividend was paid on July 24, 2009, to all shareholders of record on July 10, 2009.
"Teekay benefited from its large portfolio of stable, fixed-rate business during the second quarter, allowing us to generate $130 million of cash flow from vessel operations during a quarter of weak spot tanker market rates," commented Bjorn Moller, Teekay Corporation's President and Chief Executive Officer. "The combination of our stable cash flows generated from fixed-rate offshore, liquefied gas and conventional tanker businesses, our more than $2 billion in consolidated liquidity and our favorable debt maturity profile contributes towards Teekay's financial strength."
Mr. Moller continued, "We remain focused on our key priorities which include reducing our exposure to the current weak spot tanker market, improving profitability through cost reductions and contract improvements and reducing leverage at Teekay Parent by executing on our strategy of selling assets to our daughter companies and third parties. Since the end of the first quarter, we have reduced our spot exposure through the redelivery of 12 spot traded in-charter vessels and the sale of four spot traded conventional tankers. We have begun to see significant results from our cost management initiatives through lower overhead and operating expenses in the second quarter, compared to the same period last year. In addition, we have now successfully completed follow-on equity offerings at each of our daughter companies this year raising a combined $238 million of equity capital used to finance dropdown acquisitions. We have recently offered the Petrojarl Varg FPSO to Teekay Offshore and, if accepted, this transaction will result in further significant de-leveraging of Teekay Parent's balance sheet, and will provide Teekay with further financial flexibility."
Mr. Moller added, "A key strength of our business model lies in our global project management activities and our ability to focus our attention on any given segment of our business where a new project may develop. Over the past decade, our successful project management business has seen us build our fixed-rate cash flow from vessel operations to over $550 million per year. Our ability to deliver value-added solutions to our customers gives us access to profitable, fixed-rate projects throughout the tanker cycle. An excellent example is our purchase this month of a modern product tanker against a specialized charter requirement. Upon completion of modification work, the vessel will commence a 10-year fixed-rate charter to Caltex Australia, a long-standing customer who outsourced its Australian marine operations to us in 1997."
The following tables highlight certain financial information for each of Teekay's four publicly-listed entities: Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE:TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP), Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) and Teekay, excluding results attributed to Teekay Offshore, Teekay LNG and Teekay Tankers, referred to herein as Teekay Parent. A brief description of each entity and an analysis of its respective financial results follows the tables below. Please also refer to the "Fleet List" section below and Appendix B to this release for further details.