¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ý | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value of $0.001 per share | New York Stock Exchange |
U.S. GAAP x | International Financial Reporting Standards as issued by the International Accounting Standards Board ¨ | Other ¨ |
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• | our dividend policy and our ability to pay cash dividends on our shares of common stock or any increases in quarterly distributions, and the distribution and dividend policies of our publicly-listed subsidiaries, Teekay Offshore, Teekay LNG and Teekay Tankers (or the Daughter Companies), including the ability to increase the distribution levels of Teekay Offshore and Teekay LNG in the future; |
• | our future financial condition and results of operations and our future revenues, expenses and capital expenditures, and our expected financial flexibility to pursue capital expenditures, acquisitions and other expansion opportunities; |
• | meeting our going concern requirements and our liquidity needs, and the liquidity needs of our Daughter Companies, including our working capital deficit, anticipated funds and sources of financing for liquidity needs and the sufficiency of cash flows, and our estimation that we will have sufficient liquidity for at least the next 12 months; |
• | our ability to refinance existing debt obligations, raise additional debt and equity capital to fund capital expenditures, negotiate extensions or redeployments of existing assets and sell partial interests in certain assets; |
• | our plans for Teekay Parent, which excludes our controlling interests in Daughter Companies and includes Teekay and its remaining subsidiaries, not to have a direct ownership in any conventional tankers and floating production, storage and offloading (or FPSO) units, and to increase its free cash flow per share; |
• | conditions and fundamentals of the markets in which we operate, including the balance of supply and demand in these markets and spot tanker charter rates and oil production; |
• | the relative size of the newbuilding order book and the pace of future newbuilding orders generally; |
• | offshore, liquefied natural gas (or LNG) and liquefied petroleum gas (or LPG) market conditions and fundamentals, including the balance of supply and demand in these markets and charter rates; |
• | the expected lifespan of our vessels, including our expectations as to any impairment of our vessels; |
• | our future growth prospects; |
• | the impact of future changes in the demand for and price of oil, and the related effects on the demand for and price of natural gas; |
• | expected costs, capabilities, delivery dates of and financing for newbuildings, acquisitions and conversions; |
• | expected employment and trading of older shuttle tankers; |
• | our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charter or on a short-term charter contract, including, among others, Teekay LNG’s 52% owned vessels, the Magellan Spirit and the Methane Spirit, Teekay LNG's wholly-owned LNG carrier, the Torben Spirit, and Teekay's in-chartered Arctic Spirit and Polar Spirit LNG carriers; |
• | the ability of Tanker Investments Ltd. (or TIL) to benefit from the cyclical tanker market; |
• | expected financing for Teekay LNG’s joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG); |
• | expected funding of Teekay LNG’s proportionate share of the remaining shipyard installment payments for Teekay LNG’s joint venture with China LNG, CETS Investment Management (HK) Co. Ltd. and BW LNG Investments Pte. Ltd. (or the BG Joint Venture); |
• | the cost of supervision and crew training in relation to the BG Joint Venture, and our expected recovery of a portion of those costs; |
• | the exercise of any counterparty’s rights to terminate a lease, or to obligate us to purchase a leased vessel, or failure to exercise such rights, including the rights under the leases and charters for two of Teekay LNG’s Suezmax tankers; |
• | our expectations regarding the ability of I.M. Skaugen SE (or Skaugen) and our other customers to make charter payments to us, and the ability of our customers to fulfill purchase obligations at the end of charter contracts, including obligations relating to two of Teekay LNG's LNG carriers completing charters in 2017 and 2018; |
• | the future resumption of a LNG plant in Yemen operated by Yemen LNG Company Limited (or YLNG), the expected repayment of deferred hire amounts on Teekay LNG’s two 52% owned vessels, the Marib Spirit and Arwa Spirit, on charter to YLNG, and the expected reduction to Teekay LNG's equity income in 2017 as a result of the charter payment deferral; |
• | our expectations regarding the financing, schedule and performance of the receiving and regasification terminal in Bahrain, which will be owned and operated by a new joint venture, Bahrain LNG W.L.L., owned by Teekay LNG (30%), National Oil & Gas Authority (or Nogaholding) (30%), Gulf Investment Corporation (or GIC) (24%), and Samsung C&T (or Samsung) (16%) (or the Bahrain LNG Joint Venture), and our expectations regarding the supply, modification and charter of the floating storage unit (or FSU) vessel for the project; |
• | our expectations regarding the completion by Teekay LNG of the acquisition of the joint venture between Skaugen (35%), Nogaholding (35%) and Suffun Bahrain W.L.L. (or Suffun) (30%) (or the Skaugen LPG Joint Venture); |
• | the future valuation or impairment of goodwill; |
• | our expectations and estimates regarding future charter business, with respect to minimum charter hire payments, revenues and our vessels’ ability to perform to specifications and maintain their hire rates in the future; |
• | future debt refinancings, including pre-arranged financings, and our ability to fulfill our debt obligations; |
• | compliance with financing agreements and the expected effect of restrictive covenants in such agreements; |
• | the ability of OOG-TK Libra GmbH & Co KG (or the Libra joint venture) to drawdown on its $804 million long-term facility for the new FPSO unit conversion for the Libra field and to obtain further cross default waivers from its lenders; |
• | operating expenses, availability of crew and crewing costs, number of off-hire days, dry-docking requirements and durations and the adequacy and cost of insurance; |
• | the effectiveness of our risk management policies and procedures and the ability of the counterparties to our derivative contracts to fulfill their contractual obligations; |
• | the impact of recent and future regulatory changes or environmental liabilities; |
• | the impact of, and our ability to comply with, new and existing governmental regulations and maritime self-regulatory organization standards applicable to our business, including the expected cost to install ballast water treatment systems on our vessels in compliance with the International Marine Organization (or IMO) proposals; |
• | the outcome and cost of claims and potential claims against us, including claims and potential claims by Sevan Marine ASA (or Sevan), CeFront Technology AS (or CeFront) and COSCO (Nantong) Shipyard (or COSCO) relating to Logitel Offshore Holding AS (or Logitel) and cancellation of Units for Maintenance and Safety (or UMS) newbuildings, by Petroleo Brasileiro S.A. (or Petrobras) associated with the Piranema Spirit FPSO and by Royal Dutch Shell Plc (or Shell) associated with the Petrojarl Knarr FPSO and by Transocean Offshore International Ventures Limited (or Transocean) associated with the ALP Forward; |
• | the outcome of the investigation into allegations of improper payments by one of our subsidiaries to Brazilian agents; |
• | the outcome of discussions with Petrobras, the charterer on the Arendal Spirit UMS, including the timing and certainty of the unit returning to operation, and expected revenues from the unit; |
• | certainty of completion, estimated delivery and completion dates, commencement of charter, intended financing and estimated costs for newbuildings, acquisitions, conversions and upgrades, including the towing and offshore installation vessel newbuildings, conversion of the Randgrid to a floating storage and off-take (or FSO) unit to serve the Gina Krog oil and gas field, conversion of the Libra FPSO unit to serve the Libra field, the upgrade of the Petrojarl I FPSO unit and shuttle tanker newbuildings; |
• | the timing of the new shuttle tanker contract of affreightment (or CoA) contracts and the number of shuttle tankers to serve these new CoAs; |
• | the ability of Teekay Offshore to grow its long-distance ocean towage and offshore installation services business; |
• | expected uses of proceeds from vessel or securities transactions; |
• | the expectations as to the chartering of unchartered vessels, including towage newbuildings and the HiLoad DP unit; |
• | the impact of our cost saving initiatives; |
• | our entering into joint ventures or partnerships with companies; |
• | our expectations regarding whether the UK taxing authority can successfully challenge the tax benefits available under certain of our former and current leasing arrangements, and the potential financial exposure to us if such a challenge is successful; |
• | our hedging activities relating to foreign exchange, interest rate and spot market risks, and the effects of fluctuations in foreign exchange, interest rate and spot market rates on our business and results of operations; |
• | the potential impact of new accounting guidance; and |
• | our business strategy and other plans and objectives for future operations. |
Item 1. | Identity of Directors, Senior Management and Advisors |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(in thousands of U.S. Dollars, except share, per share, and fleet data) | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Revenues | $ | 2,328,569 | $ | 2,450,382 | $ | 1,993,920 | $ | 1,830,085 | $ | 1,980,771 | ||||||||||
Income (loss) from vessel operations (1) | 384,290 | 625,132 | 427,159 | 62,746 | (150,393 | ) | ||||||||||||||
Interest expense | (282,966 | ) | (242,469 | ) | (208,529 | ) | (181,396 | ) | (167,615 | ) | ||||||||||
Interest income | 4,821 | 5,988 | 6,827 | 9,708 | 6,159 | |||||||||||||||
Realized and unrealized (loss) gain on non-designated derivative instruments | (35,091 | ) | (102,200 | ) | (231,675 | ) | 18,414 | (80,352 | ) | |||||||||||
Equity income | 85,639 | 102,871 | 128,114 | 136,538 | 79,211 | |||||||||||||||
Foreign exchange (loss) gain | (6,548 | ) | (2,195 | ) | 13,431 | (13,304 | ) | (12,898 | ) | |||||||||||
Other (loss) income | (39,013 | ) | 1,566 | (1,152 | ) | 5,646 | 366 | |||||||||||||
Income tax (expense) recovery | (24,468 | ) | 16,767 | (10,173 | ) | (2,872 | ) | 14,406 | ||||||||||||
Net income (loss) | 86,664 | 405,460 | 124,002 | 35,480 | (311,116 | ) | ||||||||||||||
Less: Net (income) loss attributable to non- controlling interests | (209,846 | ) | (323,309 | ) | (178,759 | ) | (150,218 | ) | 150,936 | |||||||||||
Net (loss) income attributable to shareholders of Teekay Corporation | (123,182 | ) | 82,151 | (54,757 | ) | (114,738 | ) | (160,180 | ) | |||||||||||
Per Common Share Data: | ||||||||||||||||||||
Basic (loss) income attributable to shareholders of Teekay Corporation | (1.62 | ) | 1.13 | (0.76 | ) | (1.63 | ) | (2.31 | ) | |||||||||||
Diluted (loss) income attributable to shareholders of Teekay Corporation | (1.62 | ) | 1.12 | (0.76 | ) | (1.63 | ) | (2.31 | ) | |||||||||||
Cash dividends declared | 0.2200 | 1.7325 | 1.2650 | 1.2650 | 1.2650 | |||||||||||||||
Balance Sheet Data (at end of year): | ||||||||||||||||||||
Cash and cash equivalents | $ | 567,994 | $ | 678,392 | $ | 806,904 | $ | 614,660 | $ | 639,491 | ||||||||||
Restricted cash | 237,248 | 176,437 | 119,351 | 502,732 | 533,819 | |||||||||||||||
Vessels and equipment | 9,138,886 | 9,366,593 | 8,106,247 | 7,351,144 | 7,321,058 | |||||||||||||||
Net investments in direct financing leases | 660,594 | 684,129 | 704,953 | 727,262 | 436,601 | |||||||||||||||
Total assets | 12,814,752 | 13,061,248 | 11,779,690 | 11,506,393 | 10,959,125 | |||||||||||||||
Total debt (including capital lease obligations) | 7,032,385 | 7,443,213 | 6,715,526 | 6,658,491 | 6,154,388 | |||||||||||||||
Capital stock and additional paid-in capital | 887,075 | 775,018 | 770,759 | 713,760 | 681,933 | |||||||||||||||
Non-controlling interest | 3,189,928 | 2,782,049 | 2,290,305 | 2,071,262 | 1,876,085 | |||||||||||||||
Total equity | 4,089,293 | 3,701,074 | 3,388,633 | 3,203,050 | 3,191,474 | |||||||||||||||
Number of outstanding shares of common stock | 86,149,975 | 72,711,371 | 72,500,502 | 70,729,399 | 69,704,188 | |||||||||||||||
Other Financial Data: | ||||||||||||||||||||
Net revenues (2) | $ | 2,190,230 | $ | 2,334,595 | $ | 1,866,073 | $ | 1,717,867 | $ | 1,842,488 | ||||||||||
EBITDA (3) | 961,102 | 1,134,674 | 758,781 | 641,126 | 291,832 | |||||||||||||||
Adjusted EBITDA (3) | 1,268,668 | 1,393,696 | 1,037,284 | 817,382 | 830,676 | |||||||||||||||
Total debt to total capitalization (4) | 63.2 | % | 66.8 | % | 66.5 | % | 67.5 | % | 65.9 | % | ||||||||||
Net debt to total net capitalization (5) | 60.4 | % | 64.0 | % | 63.1 | % | 63.4 | % | 60.9 | % | ||||||||||
Capital expenditures: | ||||||||||||||||||||
Expenditures for vessels and equipment | $ | 648,326 | $ | 1,795,901 | $ | 994,931 | $ | 753,755 | $ | 523,597 |
(1) | Income (loss) from vessel operations includes, among other things, the following: |
Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(in thousands of U.S. Dollars) | ||||||||||||||||||||
Asset impairments and net (loss) gain on sale of vessels, equipment and other operating assets | $ | (112,246 | ) | $ | (70,175 | ) | $ | 11,271 | $ | (166,358 | ) | $ | (441,057 | ) | ||||||
Unrealized losses on derivative instruments | — | — | — | (130 | ) | (660 | ) | |||||||||||||
Restructuring charges | (26,811 | ) | (14,017 | ) | (9,826 | ) | (6,921 | ) | (7,565 | ) | ||||||||||
$ | (139,057 | ) | $ | (84,192 | ) | $ | 1,445 | $ | (173,409 | ) | $ | (449,282 | ) |
(2) | Net revenues is a non-GAAP financial measure. consistent with general practice in the shipping industry, we use net revenues (defined as revenues less voyage expenses) as a measure of equating revenues generated from voyage charters to revenues generated from time charters, which assists us in making operating decisions about the deployment of our vessels and their performance. Under time charters, the charterer pays the voyage expenses, which are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, whereas under voyage-charter contracts the ship-owner pays these expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we, as the ship-owner, pay the voyage expenses, we typically pass the approximate amount of these expenses on to our customers by charging higher rates under the contract or billing the expenses to them. As a result, although revenues from different types of contracts may vary, the net revenues after subtracting voyage expenses, which we call “net revenues,” are comparable across the different types of contracts. We principally use net revenues because it provides more meaningful information to us than revenues, the most directly comparable GAAP financial measure. Net revenues are also widely used by investors and analysts in the shipping industry for comparing financial performance between companies and to industry averages. Net revenue should not be considered as an alternative to revenue or any other measure of financial performance in accordance with GAAP. Net revenue is adjusted for expenses that we classify as voyage expenses and, therefore, may not be comparable to similarly titled measures of other companies. The following table reconciles net revenues with revenues. |
Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(in thousands of U.S. Dollars) | ||||||||||||||||||||
Revenues | $ | 2,328,569 | $ | 2,450,382 | $ | 1,993,920 | $ | 1,830,085 | $ | 1,980,771 | ||||||||||
Voyage expenses | (138,339 | ) | (115,787 | ) | (127,847 | ) | (112,218 | ) | (138,283 | ) | ||||||||||
Net revenues | $ | 2,190,230 | $ | 2,334,595 | $ | 1,866,073 | $ | 1,717,867 | $ | 1,842,488 |
(3) | EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before restructuring charges, unrealized foreign exchange (gain) loss, items included in other loss (income), asset impairments, loan loss provisions, net loss (gain) on sale of vessels and equipment, amortization of in-process revenue contracts, unrealized losses (gains) on derivative instruments, realized losses on interest rate swaps, realized losses on interest rate swap amendments and terminations, write-down of equity accounted investments, and our share of the above items in non-consolidated joint ventures which are accounted for using the equity method of accounting. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, as discussed below. |
• | Financial and operating performance. EBITDA and Adjusted EBITDA assist our management and security holders by increasing the comparability of our fundamental performance from period to period and against the fundamental performance of other companies in our industry that provide EBITDA or Adjusted EBITDA-based information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest expense, taxes, depreciation or amortization (or other items in determining Adjusted EBITDA), which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA and Adjusted EBITDA as financial and operating measures benefits security holders in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength and health in order to assess whether to continue to hold our equity, or debt securities, as applicable. |
• | Liquidity. EBITDA and Adjusted EBITDA allow us to assess the ability of assets to generate cash sufficient to service debt, pay dividends and undertake capital expenditures. By eliminating the cash flow effect resulting from our existing capitalization and other items such as dry-docking expenditures, working capital changes and foreign currency exchange gains and losses (which may vary significantly from period to period), EBITDA and Adjusted EBITDA provide consistent measures of our ability to generate cash over the long term. Management uses this information as a significant factor in determining (a) our proper capitalization structure (including assessing how much debt to incur and whether changes to our capitalization should be made) and (b) whether to undertake material capital expenditures and how to finance them, all in light of our dividend policy. Use of EBITDA and Adjusted EBITDA as liquidity measures also permits security holders to assess the fundamental ability of our business to generate cash sufficient to meet our financial and operational needs, including dividends on shares of our common stock and repayments under debt instruments. |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
(in thousands of U.S. Dollars) | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss) | ||||||||||||||||||||
Net income (loss) | $ | 86,664 | $ | 405,460 | $ | 124,002 | $ | 35,480 | $ | (311,116 | ) | |||||||||
Income tax expense (recovery) | 24,468 | (16,767 | ) | 10,173 | 2,872 | (14,406 | ) | |||||||||||||
Depreciation and amortization | 571,825 | 509,500 | 422,904 | 431,086 | 455,898 | |||||||||||||||
Interest expense, net of interest income | 278,145 | 236,481 | 201,702 | 171,688 | 161,456 | |||||||||||||||
EBITDA | 961,102 | 1,134,674 | 758,781 | 641,126 | 291,832 | |||||||||||||||
Restructuring charges | 26,811 | 14,017 | 9,826 | 6,921 | 7,565 | |||||||||||||||
Foreign exchange loss (gain) (a) | 6,548 | 2,195 | (13,431 | ) | 13,304 | 12,898 | ||||||||||||||
Items included in other loss (income) (b) (c) | 42,401 | — | 7,699 | — | — | |||||||||||||||
Asset impairments and net loss (gain) on sale of vessels, equipment and other operating assets | 112,246 | 70,175 | (11,271 | ) | 166,358 | 441,057 | ||||||||||||||
Amortization of in-process revenue contracts | (28,109 | ) | (30,085 | ) | (40,939 | ) | (61,700 | ) | (72,933 | ) | ||||||||||
Unrealized (gains) losses on derivative instruments | (69,401 | ) | (38,319 | ) | 100,496 | (178,731 | ) | (29,658 | ) | |||||||||||
Realized losses on interest rate swaps | 87,320 | 108,036 | 125,424 | 122,439 | 123,277 | |||||||||||||||
Realized losses on interest rate swap amendments and terminations | 8,140 | 10,876 | 1,319 | 35,985 | — | |||||||||||||||
Write-downs related to equity-accounted investments | 2,357 | — | — | — | 1,767 | |||||||||||||||
Adjustments relating to equity income (d) | 119,253 | 122,127 | 99,380 | 71,680 | 54,871 | |||||||||||||||
Adjusted EBITDA | 1,268,668 | 1,393,696 | 1,037,284 | 817,382 | 830,676 | |||||||||||||||
Reconciliation of Adjusted EBITDA to net operating cash flow | ||||||||||||||||||||
Net operating cash flow | 620,120 | 770,309 | 446,317 | 292,584 | 288,936 | |||||||||||||||
Expenditures for dry docking | 45,964 | 68,380 | 74,379 | 72,205 | 35,023 | |||||||||||||||
Interest expense, net of interest income | 278,145 | 236,481 | 201,702 | 171,688 | 161,456 | |||||||||||||||
Change in non-cash working capital items related to operating activities | (38,333 | ) | 12,291 | (60,631 | ) | (64,184 | ) | 115,209 | ||||||||||||
Equity income (loss), net of dividends received | 47,563 | (3,203 | ) | 94,726 | 121,144 | 65,639 | ||||||||||||||
Other items (b) (c) | 73,685 | 54,382 | 44,842 | (13,080 | ) | (21,300 | ) | |||||||||||||
Restructuring charges | 26,811 | 14,017 | 9,826 | 6,921 | 7,565 | |||||||||||||||
Realized losses on interest rate swaps | 87,320 | 108,036 | 125,424 | 122,439 | 123,277 | |||||||||||||||
Realized losses on interest rate swap resets and terminations | 8,140 | 10,876 | 1,319 | 35,985 | — | |||||||||||||||
Adjustments relating to equity income (d) | 119,253 | 122,127 | 99,380 | 71,680 | 54,871 | |||||||||||||||
Adjusted EBITDA | 1,268,668 | 1,393,696 | 1,037,284 | 817,382 | 830,676 |
(a) | Foreign exchange loss (gain) excludes the unrealized gain of $75.0 million in 2016 (2015 - loss of $89.2 million, 2014 – loss of $167.3 million, 2013 – loss of $65.4 million and 2012 – gain of $10.7 million) on cross currency swaps, which is incorporated in unrealized (gains) losses on derivative instruments in the table above. |
(b) | In June 2016, as part of its financing initiatives, Teekay Offshore canceled the construction contracts for its two UMS newbuildings. As a result, Teekay Offshore accrued for potential damages resulting from the cancellations and reversed contingent liabilities previously recorded that were relating to the delivery of the UMS newbuildings. This net loss provision of $23.4 million for the year ended December 31, 2016 is reported in Other (loss) income in our consolidated statements of income. The newbuilding contracts are held in Teekay Offshore's separate subsidiaries and obligations of these subsidiaries are non-recourse to Teekay Offshore. For additional information, please read Item 18 - Financial Statements: Note 15d Commitments and Contingencies. |
(c) | The Company holds investments at cost. During the year ended December 31, 2016, the Company recorded a write-down of these investments of $19.0 million. |
(d) | Adjustments relating to equity income, which is a non-GAAP measure, should not be considered as an alternative to equity income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments relating to equity income exclude some, but not all, items that affect equity income and these measures may vary among other companies. Therefore, adjustments relating to equity income as presented in this Annual Report may not be comparable to similarly titled measures of other companies. When using Adjusted EBITDA as a measure of liquidity it should be noted that this measure includes the Adjusted EBITDA from our equity accounted for investments. We do not have control over the operations, nor do we have any legal claim to the revenue and expenses of our equity accounted for investments. Consequently, the cash flow generated by our equity accounted for investments may not be available for use by us in the period generated. Equity income from equity accounted investments is adjusted for income tax expense (recovery), depreciation and amortization, interest expense net of interest income, foreign exchange loss (gain), amortization of in-process revenue contracts, and unrealized and realized (gains) losses on derivative instruments. Adjustments relating to equity income from our equity accounted investments are as follows: |
Year Ended December 31, | |||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||
(in thousands of U.S. Dollars) | |||||||||||||||
Depreciation and amortization | 69,781 | 69,103 | 61,367 | 56,188 | 25,589 | ||||||||||
Interest expense, net of interest income | 45,584 | 47,799 | 42,713 | 37,863 | 26,622 | ||||||||||
Income tax expense (recovery) | 724 | 476 | (188 | ) | (21 | ) | 87 | ||||||||
Amortization of in-process revenue contracts | (5,482 | ) | (7,153 | ) | (8,295 | ) | (14,173 | ) | (11,083 | ) | |||||
Foreign currency exchange loss (gain) | 132 | (527 | ) | (441 | ) | 709 | (18 | ) | |||||||
Asset impairments and net loss (gain) on sale of vessels, equipment and other operating assets | 4,763 | (7,472 | ) | (16,923 | ) | — | — | ||||||||
Realized and unrealized loss (gain) on derivative instruments | 3,075 | 15,027 | 21,147 | (8,886 | ) | 13,674 | |||||||||
Other | 676 | 4,874 | — | — | — | ||||||||||
Adjustments relating to equity income | 119,253 | 122,127 | 99,380 | 71,680 | 54,871 |
(4) | Total capitalization represents total debt and total equity. |
(5) | Net debt is a non-GAAP financial measure. Net debt represents total debt less cash, cash equivalents and restricted cash. Total net capitalization represents net debt and total equity. |
• | a reduction in exploration for or development of new offshore oil fields, or the delay or cancelation of existing offshore projects as energy companies lower their capital expenditures budgets, which may reduce our growth opportunities; |
• | a reduction in or termination of production of oil at certain fields we service, which may reduce our revenues under volume-based contracts of affreightment, production-based components of our FPSO unit contracts or life-of-field contracts; |
• | a reduction in both the competitiveness of natural gas as a fuel for power generation and the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil; |
• | lower demand for vessels of the types we own and operate, which may reduce available charter rates and revenue to us upon redeployment of our vessels, in particular FPSO units, following expiration or termination of existing contracts or upon the initial chartering of vessels, or which may result in extended periods of our vessels being idle between contracts; |
• | customers potentially seeking to renegotiate or terminate existing vessel contracts, failing to extend or renew contracts upon expiration, or seeking to negotiate cancelable contracts; |
• | the inability or refusal of customers to make charter payments to us, including purchase obligations at the end of certain charter contracts, due to financial constraints or otherwise; or |
• | declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings. |
• | the rates they obtain from their charters, voyages and contracts; |
• | the price and level of production of, and demand for, crude oil, LNG and LPG, including the level of production at the offshore oil fields our subsidiaries service under contracts of affreightment; |
• | the operating performance of our FPSO units, whereby receipt of incentive-based revenue from our FPSO units is dependent upon the fulfillment of the applicable performance criteria; |
• | the level of their operating costs, such as the cost of crews and repairs and maintenance; |
• | the number of off-hire days for their vessels and the timing of, and number of days required for, dry docking of vessels; |
• | the rates, if any, at which our subsidiaries may be able to redeploy shuttle tankers in the spot market as conventional oil tankers during any periods of reduced or terminated oil production at fields serviced by contracts of affreightment; |
• | the rates, if any, at which our subsidiaries may be able to redeploy vessels, particularly FPSO units, after they complete their charters or contracts and are redelivered to us; |
• | the rates, if any, and ability, at which our subsidiaries may be able to contract our newbuilding vessels, including our newbuilding towage vessels; |
• | delays in the delivery of any newbuildings or vessels undergoing conversion or upgrades and the beginning of payments under charters relating to those vessels; |
• | prevailing global and regional economic and political conditions; |
• | currency exchange rate fluctuations; and |
• | the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of business. |
• | the level of their capital expenditures, including for maintaining vessels or converting existing vessels for other uses and complying with regulations; |
• | their debt service requirements and restrictions on distributions contained in their debt agreements, including financial ratio covenants which may indirectly restrict loans, distributions or dividends; |
• | fluctuations in their working capital needs; |
• | their ability to make working capital borrowings; and |
• | the amount of any cash reserves, including reserves for future maintenance capital expenditures, working capital and other matters, established by the boards of directors of our Daughter Companies at their discretion. |
• | demand for oil and oil products; |
• | supply of oil and oil products; |
• | regional availability of refining capacity; |
• | global and regional economic and political conditions; |
• | the distance oil and oil products are to be moved by sea; and |
• | changes in seaborne and other transportation patterns. |
• | the number of newbuilding deliveries; |
• | the scrapping rate of older vessels; |
• | conversion of tankers to other uses; |
• | the number of vessels that are out of service; and |
• | environmental concerns and regulations. |
• | geologic factors, including general declines in production that occur naturally over time; |
• | the rate of technical developments in extracting oil and related infrastructure and implementation costs; and |
• | operator decisions based on revenue compared to costs from continued operations. |
• | prevailing economic conditions in oil and energy markets; |
• | a substantial or extended decline in demand for oil or natural gas; |
• | increases in the supply of vessel capacity; |
• | competition from more technologically advanced vessels; |
• | the cost of retrofitting or modifying existing vessels, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise; and |
• | a decrease in oil reserves in the fields and other fields in which our FPSO units or other vessels might otherwise be deployed. |
• | increases in the cost of natural gas derived from LNG relative to the cost of natural gas generally; |
• | increases in the cost of LPG relative to the cost of naphtha and other competing petrochemicals; |
• | increases in the production of natural gas in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-natural gas pipelines to natural gas pipelines in those markets; |
• | decreases in the consumption of natural gas due to increases in its price relative to other energy sources or other factors making consumption of natural gas less attractive; |
• | additional sources of natural gas, including shale gas; |
• | availability of alternative energy sources; and |
• | negative global or regional economic or political conditions, particularly in LNG and LPG consuming regions, which could reduce energy consumption or its rate of growth. |
• | decreases in the actual or projected price of oil, which could lead to a reduction in or termination of production of oil at certain fields we service, delays or cancellations of projects under development or a reduction in exploration for or development of new offshore oil fields; |
• | increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets; |
• | decreases in the consumption of oil due to increases in its price relative to other energy sources, other factors making consumption of oil less attractive or energy conservation measures; |
• | availability of new, alternative energy sources; and |
• | negative global or regional economic or political conditions, particularly in oil consuming regions, which could reduce energy consumption or its growth. |
• | the customer fails to make payments because of its financial inability, disagreements with us or otherwise; |
• | we agree to reduce the payments due to us under a contract because of the customer’s inability to continue making the original payments; |
• | the customer exercises certain rights to terminate the contract; or |
• | the customer terminates the contract because we fail to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, there are serious deficiencies in the vessel or prolonged periods of off-hire, or we default under the contract. |
• | interruption of, or loss of momentum in, the activities of one or more of an acquired company’s businesses and our businesses; |
• | additional demands on members of our senior management while integrating acquired businesses, which would decrease the time they have to manage our existing business, service existing customers and attract new customers; |
• | difficulties integrating the operations, personnel and business culture of acquired companies; |
• | difficulties coordinating and managing geographically separate organizations; |
• | adverse effects on relationships with our existing suppliers and customers, and those of the companies acquired; |
• | difficulties entering geographic markets or new market segments in which we have no or limited experience; and |
• | loss of key officers and employees of acquired companies. |
• | marine disaster; |
• | bad weather or natural disasters; |
• | mechanical failures; |
• | grounding, fire, explosions and collisions; |
• | piracy; |
• | human error; and |
• | war and terrorism. |
• | death or injury to persons, loss of property or environmental damage or pollution; |
• | delays in the delivery of cargo; |
• | loss of revenues from or termination of charter contracts; |
• | governmental fines, penalties or restrictions on conducting business; |
• | higher insurance rates; and |
• | damage to our reputation and customer relationships generally. |
• | failure to achieve expected operating results; |
• | changes in demand for LNG; |
• | adverse changes in Russian regulations or governmental policy relating to the project or the export of LNG; |
• | technical challenges of completing and operating the complex project, particularly in extreme Arctic conditions; |
• | labor disputes; and |
• | environmental regulations or potential claims. |
• | our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes, and our ability to refinance our credit facilities may be impaired or such financing may not be available on favorable terms, if at all; |
• | we will need to use a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to shareholders; |
• | our debt level may make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and |
• | our debt level may limit our flexibility in obtaining additional financing, pursuing other business opportunities and responding to changing business and economic conditions. |
• | pay dividends; |
• | incur or guarantee indebtedness; |
• | change ownership or structure, including mergers, consolidations, liquidations and dissolutions; |
• | grant liens on our assets; |
• | sell, transfer, assign or convey assets; |
• | make certain investments; and |
• | enter into new lines of business. |
• | renew existing charters and contracts of affreightment upon their expiration; |
• | obtain new charters and contracts of affreightment; |
• | successfully interact with shipyards during periods of shipyard construction constraints; |
• | obtain financing on commercially acceptable terms; or |
• | maintain satisfactory relationships with suppliers and other third parties. |
Item 4. | Information on the Company |
A. | Overview, History and Development |
B. | Operations |
Owned Vessels | Chartered-in Vessels | Newbuildings / Conversions | Total | |||||||||
Teekay Offshore | ||||||||||||
Shuttle Tankers | 27 | (1) | 3 | 3 | (4) | 33 | ||||||
FSO Units | 6 | (2) | — | 1 | 7 | |||||||
FPSO Units | 6 | (3) | — | 2 | (3) | 8 | ||||||
Unit for Maintenance and Safety (UMS) | 1 | — | — | 1 | ||||||||
Towage Vessels | 7 | — | 3 | 10 | ||||||||
HiLoad Dynamic Positioning Unit | 1 | — | — | 1 | ||||||||
Aframax Tankers | — | 2 | — | 2 | ||||||||
48 | 5 | 9 | 62 | |||||||||
Teekay LNG | ||||||||||||
LNG Vessels | 31 | (5) | — | 19 | (6) | 50 | ||||||
LPG/Multigas Vessels | 23 | (7) | 2 | 4 | (9) | 29 | ||||||
Suezmax Tankers | 5 | (8) | — | — | 5 | |||||||
Product Tanker | 1 | — | — | 1 | ||||||||
60 | 2 | 23 | 85 | |||||||||
Teekay Tankers | ||||||||||||
Aframax Tankers | 14 | 6 | — | 20 | ||||||||
Suezmax Tankers | 22 | (10) | — | — | 22 | |||||||
VLCC | 1 | (11) | — | — | 1 | |||||||
Product Tankers | 7 | 1 | — | 8 | ||||||||
STS Support Vessels | 4 | 3 | — | 7 | ||||||||
48 | 10 | — | 58 | |||||||||
Teekay Parent (12) | ||||||||||||
FPSO Units | 3 | — | — | 3 | ||||||||
Aframax Tankers | — | 2 | — | 2 | ||||||||
Bunker Barge | — | 1 | — | 1 | ||||||||
Infield Support Vessels | — | 1 | (13) | 2 | 3 | |||||||
3 | 4 | 2 | 9 | |||||||||
Total | 159 | 21 | 34 | 214 |
(1) | Includes six shuttle tankers 50% owned by Teekay Offshore. |
(2) | Includes one FSO unit 89% owned by Teekay Offshore. Includes one FSO unit that is classified as held-for-sale at year end. |
(3) | Owned vessels and Newbuildings / Conversions each include one FPSO unit 50% owned by Teekay Offshore. One of the FPSO units is in lay-up. |
(4) | Includes two vessels scheduled to deliver during 2017. |
(5) | Includes a 70% interest in three LNG carriers, a 69% interest in two LNG carriers, a 52% interest in six LNG carriers, a 50% interest in one LNG carrier, a 49% interest in one LNG carrier, a 40% interest in four LNG carriers, and a 33% interest in four LNG carriers owned by Teekay LNG. |
(6) | Includes a 50% interest in six LNG newbuildings, a 30% interest in two LNG newbuildings, and a 20% interest in two LNG newbuildings. |
(7) | Includes 16 LPG carriers 50% owned by Teekay LNG. Includes one LPG carrier 50% owned by Teekay LNG, Brugge Venture, that was classified as held-for-sale as at December 31, 2016. |
(8) | Includes one vessel, Asian Spirit, that was classified as held-for-sale as at December 31, 2016. This vessel was sold on January 10, 2017. |
(9) | All LPG newbuildings are 50% owned by Teekay LNG. |
(10) | Includes two vessels, Ganges Spirit, which was sold on January 3, 2017, and Yamuna Spirit, which was sold on March 5, 2017. |
(11) | VLCC is 50% owned by Teekay Tankers. |
(12) | Excludes two LNG carriers chartered from Teekay LNG, and two shuttle tankers and three FSO units chartered from Teekay Offshore, all of which are included in the respective Daughter Company totals in this table. |
(13) | KT Maritime (Pty) Ltd, the charterer of the Infield Support Vessel, is owned 50% by Teekay Corporation. |
• | vessel maintenance (including repairs and dry docking) and certification; |
• | crewing by competent seafarers; |
• | procurement of stores, bunkers and spare parts; |
• | management of emergencies and incidents; |
• | supervision of shipyard and projects during new-building and conversions; |
• | insurance; and |
• | financial management services. |
• | our vessels and operations adhere to our operating standards; |
• | the structural integrity of the vessel is being maintained; |
• | machinery and equipment is being maintained to give reliable service; |
• | we are optimizing performance in terms of speed and fuel consumption; and |
• | our vessels’ appearance supports our brand and meets customer expectations. |
• | the residue tank may be fitted with manually operated self closing valves and arrangements for subsequent visual monitoring of the settled water that lead to an oily water holding tank or bilge well; |
• | the sludge tank discharge piping and bilge water piping may be connected to a common line leading to the standard discharge connection; however, the interconnection of line shall not allow for the transfer of sludge to the bilge system; and |
• | a screw down non-return valve in lines connecting to the standard discharge connection, provides an acceptable means for not allowing for the transfer of sludge to the bilge system. Ship operators and managers should, before the first IOPP renewal survey, ensure that such systems are compliant. In the event that modifications are required, system drawings will be subject to approval. |
• | natural resources damages and the related assessment costs; |
• | real and personal property damages; |
• | net loss of taxes, royalties, rents, fees and other lost revenues; |
• | lost profits or impairment of earning capacity due to property or natural resources damage; |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and |
• | loss of subsistence use of natural resources. |
• | address a “worst case” scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”; |
• | describe crew training and drills; and |
• | identify a qualified individual with full authority to implement removal actions. |
C. | Organizational Structure |
• | illuminate higher value of fixed-rate cash flows to Teekay investors; |
• | realize advantages of a lower cost of equity when investing in new offshore or LNG projects; and |
• | enhance returns to Teekay through fee-based revenue and ownership of the limited partnership’s incentive distribution rights, which entitle the holder to disproportionate distributions of available cash as cash distribution levels to unitholders increase. |
(1) | The partnership is controlled by its general partner. Teekay Corporation has a 100% beneficial ownership in the general partner. However, in certain limited cases, approval of a majority or supermajority of the common unitholders is required to approve certain actions. |
(2) | Proportion of voting power held is 52.5%. |
(3) | Including our 100% interest in Teekay Petrojarl. |
D. | Properties |
E. | Taxation of the Company |
Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
• | charges related to the depreciation and amortization of the historical cost of our fleet (less an estimated residual value) over the estimated useful lives of our vessels; |
• | charges related to the amortization of dry-docking expenditures over the useful life of the dry dock; and |
• | charges related to the amortization of intangible assets, including the fair value of time charters, contracts of affreightment and customer relationships where amounts have been attributed to those items in acquisitions; these amounts are amortized over the period in which the asset is expected to contribute to our future cash flows. |
• | Our revenues are affected by cyclicality in the tanker markets. The cyclical nature of the tanker industry causes significant increases or decreases in the revenue we earn from our vessels, particularly those we trade in the spot conventional tanker market. |
• | Tanker rates also fluctuate based on seasonal variations in demand. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the Northern Hemisphere but weaker in the summer months as a result of lower oil consumption in the Northern Hemisphere and increased refinery maintenance. In addition, unpredictable weather patterns during the winter months tend to disrupt vessel scheduling, which historically has increased oil price volatility and oil trading activities in the winter months. As a result, revenues generated by our vessels have historically been weaker during the quarters ended June 30 and September 30, and stronger in the quarters ended December 31 and March 31. |
• | The size of and types of vessels in our fleet continues to change. Our results of operations reflect changes in the size and composition of our fleet due to certain vessel deliveries, vessel dispositions and changes to the number of vessels we charter in, as well as our entry into new markets. Please read “—Results of Operations” below for further details about vessel dispositions, deliveries and vessels chartered in. Due to the nature of our business, we expect our fleet to continue to fluctuate in size and composition. |
• | Vessel operating and other costs are facing industry-wide cost pressures. The shipping industry continues to forecast a shortfall in qualified personnel, although weak shipping and offshore markets and slowing growth may ease officer shortages. We will continue to focus on our manning and training strategies to meet future needs, but going forward crew compensation may increase. In addition, factors such as pressure on commodity and raw material prices, as well as changes in regulatory requirements could also contribute to operating expenditure increases. We continue to take action aimed at improving operational efficiencies and to temper the effect of inflationary and other price escalations; however, increases to operational costs are still likely to occur in the future. |
• | Our net income is affected by fluctuations in the fair value of our derivative instruments. Most of our existing cross currency and interest rate swap agreements and foreign currency forward contracts are not designated as hedges for accounting purposes. Although we believe the non-designated derivative instruments are economic hedges, the changes in their fair value are included in our consolidated statements of income as unrealized gains or losses on non-designated derivatives. The changes in fair value do not affect our cash flows or liquidity. |
• | The amount and timing of dry dockings of our vessels can affect our revenues between periods. Our vessels are off hire at various times due to scheduled and unscheduled maintenance. During 2016 and 2015, on a consolidated basis we incurred 601 and 1,591 off-hire days relating to dry docking, respectively. The financial impact from these periods of off-hire, if material, is explained in further detail below in “—Results of Operations”. 26 of our vessels are scheduled for dry docking during 2017. |
• | The division of our results of operations between the Daughter Companies and Teekay Parent is impacted by the sale of vessels from Teekay Parent to the Daughter Companies. During 2015, Teekay Parent sold certain of its vessels to Teekay Offshore. Teekay Offshore and the other Daughter Companies account for the acquisition of the vessels from Teekay as a transfer of a business between entities under common control. The method of accounting for such transfers is similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the combination. In addition, such transfers are accounted for as if the transfer occurred from the date that the acquiring subsidiary and the acquired vessels were both under the common control of Teekay and had begun operations. As a result, the historical financial information of Teekay Offshore included in this Annual Report reflects the financial results of the vessels acquired from Teekay Parent from the date the vessels were both under the common control of Teekay and had begun operations but prior to the date they were owned by Teekay Offshore. |
• | Three of Teekay LNG’s Suezmax tankers and one of its LPG carriers earned revenues based partly on spot market rates. The time-charter contract for one of Teekay LNG’s Suezmax tankers, the Teide Spirit, and one of its LPG carriers, the Norgas Napa, contain a component providing for additional revenue to Teekay LNG beyond the fixed-hire rate when spot market rates exceed certain threshold amounts. The time-charter contracts for the Bermuda Spirit and Hamilton Spirit were amended in the fourth quarter of 2012 for a period of 24 months, which ended on September 30, 2014, and during this period these charters contained a component providing for additional revenues to Teekay LNG beyond the fixed-hire rate when spot market rates exceeded certain threshold amounts. Accordingly, even though declining spot market rates did not result in Teekay LNG receiving less than the fixed-hire rate, Teekay LNG’s results of operations and cash flow from operations were influenced by the variable component of the charters in periods where the spot market rates exceeded the threshold amounts. |
• | Our financial results are affected by fluctuations in currency exchange rates. Under GAAP, all foreign currency-denominated monetary assets and liabilities (including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, unearned revenue, advances from affiliates, and long-term debt) are revalued and reported based on the prevailing exchange rate at the end of the period. These foreign currency translations fluctuate based on the strength of the U.S. Dollar relative to the applicable foreign currency, mainly to the Euro and NOK, and are included in our results of operations. The translation of all foreign currency-denominated monetary assets and liabilities at each reporting date results in unrealized foreign currency exchange gains or losses but do not impact our cash flows. |
• | The duration of many of our shuttle tanker, FSO and FPSO contracts is the life of the relevant oil field or is subject to extension by the field operator or vessel charterer. If the oil field no longer produces oil or is abandoned or the contract term is not extended, we will no longer generate revenue under the related contract and will need to seek to redeploy affected vessels. Many of our shuttle tanker contracts have a “life-of-field” duration, which means that the contract continues until oil production at the field ceases. If production terminates for any reason, we no longer will generate revenue under the related contract. Other shuttle tanker, FSO and FPSO contracts under which our vessels operate are subject to extensions beyond their initial term. The likelihood of these contracts being extended may be negatively affected by reductions in oil field reserves, low oil prices generally or other factors. If we are unable to promptly redeploy any affected vessels at rates at least equal to those under the contracts, if at all, our operating results will be harmed. Any potential redeployment may not be under long-term contracts, which may affect the stability of our cash flow and our ability to make cash distributions. FPSO units, in particular, are specialized vessels that have very limited alternative uses and high fixed costs. In addition, FPSO units typically require substantial capital investments prior to being redeployed to a new field and production service agreement. Any idle time prior to the commencement of a new contract or our inability to redeploy the vessels at acceptable rates may have an adverse effect on our business and operating results. |
Revenues | Income from Vessel Operations | |||||||||||||||||
(in thousands of U.S. dollars) | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Teekay Offshore | 1,152,390 | 1,229,413 | 1,019,539 | 230,853 | 283,399 | 256,218 | ||||||||||||
Teekay LNG | 396,444 | 397,991 | 402,928 | 153,181 | 181,372 | 183,823 | ||||||||||||
Teekay Tankers (1) | 526,896 | 504,347 | 235,593 | 86,456 | 184,083 | 58,271 | ||||||||||||
Teekay Parent | 340,513 | 419,166 | 450,112 | (96,496 | ) | (30,228 | ) | (73,723 | ) | |||||||||
Elimination of intercompany (2)(3) | (87,674 | ) | (100,535 | ) | (114,252 | ) | 10,296 | 6,506 | 2,570 | |||||||||
Teekay Corporation Consolidated | 2,328,569 | 2,450,382 | 1,993,920 | 384,290 | 625,132 | 427,159 |
(1) | In December 2015, Teekay Offshore sold two Aframax tankers to Teekay Tankers and the results of the two vessels are included in Teekay Offshore up to the date of sale and in Teekay Tankers from the date of acquisition. |
(2) | During 2016, Teekay Parent chartered in three FSO units, three shuttle tankers and one Aframax tanker from Teekay Offshore, two LNG carriers from Teekay LNG and two Aframax tankers from Teekay Tankers. During 2015, Teekay Parent chartered in three FSO units, two shuttle tankers and four Aframax tankers from Teekay Offshore, and two LNG carriers from Teekay LNG, and Teekay Parent chartered out one Aframax tanker to Teekay Tankers. During 2014, Teekay Parent chartered in three FSO units, two shuttle tankers and four Aframax tankers from Teekay Offshore, two LNG carriers from Teekay LNG and two Aframax tankers from Teekay Tankers. Internal charter hire between Teekay Parent and its subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers is eliminated upon consolidation. |
(3) | During 2014, Teekay Parent sold to Teekay Tankers a 50% interest in Teekay Tankers Operations Ltd (or TTOL), which owns the conventional tanker commercial management and technical management operations, including direct ownership in three commercially managed tanker pools of the Teekay group. Teekay Tankers and Teekay Parent each account for their 50% interests in TTOL as equity-accounted investments and, as such, TTOL’s results are reflected in equity income of Teekay Tankers and Teekay Parent. Upon consolidation of Teekay Tankers into Teekay Corporation, the results of TTOL are accounted for on a consolidated basis by Teekay Corporation. The impact on our income from vessel operations of consolidating TTOL in 2016 was an increase of $10.3 million (2015 - $6.5 million, 2014 - $2.6 million). |
• | in Teekay Offshore, the cancellation of the construction contracts for its two UMS newbuildings, lower revenue from its UMS being off-hire for a portion of 2016 due to damage suffered to the gangway and the suspension of charter hire payments since early-November 2016 due to an operational review being conducted by the charterer, the expiration of certain shuttle tanker time-charter and affreightment contracts, change in estimate of useful life of certain shuttle tankers which increased depreciation expense, and the termination of the contract of the Petrojarl Varg FPSO; |
• | in Teekay LNG, the sale of three conventional tankers, partially offset by the delivery of two LNG newbuildings in 2016; |
• | in Teekay Tankers, lower average TCE rates earned in the spot tanker market in 2016 compared to 2015; and |
• | in Teekay Parent, terminations of time charters and the lay-up of the Arctic Spirit and Polar Spirit LNG carriers in 2016, loss on sale of the Shoshone Spirit tanker, lower average TCE rates earned in the spot tanker market, and a contract amendment related to the Hummingbird Spirit FPSO which reduced its revenues. |
Offshore Logistics | Offshore Production | Conventional Tankers | Teekay Offshore Total | ||||||||||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days)____________ | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Revenues | 636,421 | 667,629 | 495,223 | 531,554 | 20,746 | 30,230 | 1,152,390 | 1,229,413 | |||||||||||||||
Voyage expenses | (79,387 | ) | (95,680 | ) | — | — | (1,363 | ) | (2,326 | ) | (80,750 | ) | (98,006 | ) | |||||||||
Net revenues | 557,034 | 571,949 | 495,223 | 531,554 | 19,383 | 27,904 | 1,071,640 | 1,131,407 | |||||||||||||||
Vessel operating expenses | (197,529 | ) | (182,346 | ) | (165,346 | ) | (189,900 | ) | (1,566 | ) | (6,234 | ) | (364,441 | ) | (378,480 | ) | |||||||
Time-charter hire expense | (62,511 | ) | (51,750 | ) | — | — | (12,974 | ) | — | (75,485 | ) | (51,750 | ) | ||||||||||
Depreciation and amortization | (150,813 | ) | (130,102 | ) | (149,198 | ) | (137,914 | ) | — | (6,583 | ) | (300,011 | ) | (274,599 | ) | ||||||||
General and administrative expenses (1) | (19,798 | ) | (32,963 | ) | (35,971 | ) | (38,588 | ) | (353 | ) | (1,062 | ) | (56,122 | ) | (72,613 | ) | |||||||
Asset impairments and gain on sale of vessels | (40,079 | ) | (66,101 | ) | — | — | — | (3,897 | ) | (40,079 | ) | (69,998 | ) | ||||||||||
Restructuring charges | (205 | ) | (568 | ) | (4,444 | ) | — | — | — | (4,649 | ) | (568 | ) | ||||||||||
Income from vessel operations | 86,099 | 108,119 | 140,264 | 165,152 | 4,490 | 10,128 | 230,853 | 283,399 | |||||||||||||||
Equity income | — | — | 17,933 | 7,672 | — | — | 17,933 | 7,672 | |||||||||||||||
Calendar-Ship-Days (2) | |||||||||||||||||||||||
Shuttle Tankers | 11,913 | 12,319 | — | — | — | — | 11,913 | 12,319 | |||||||||||||||
FSO Units | 2,562 | 2,395 | — | — | — | — | 2,562 | 2,395 | |||||||||||||||
FPSO Units | — | — | 2,196 | 2,122 | — | — | 2,196 | 2,122 | |||||||||||||||
Conventional Tankers | — | — | — | — | 732 | 1,432 | 732 | 1,432 | |||||||||||||||
UMS | 366 | 318 | — | — | — | — | 366 | 318 | |||||||||||||||
Towage vessels | 2,307 | 1,606 | — | — | — | 2,307 | 1,606 |
• | a decrease of $55.6 million relating to the UMS fleet, primarily due to the write-downs relating to the cancellation of the two UMS newbuilding contracts, an increase in spare parts and consumables in 2016 due to these costs being covered under warranty during 2015, and lower revenues due to the unit being off-hire from mid-April 2016 until early-July 2016 due to damage suffered to the gangway and the suspension of charter hire payments since early-November 2016 due to an operational review being conducted by the charterer; |
• | a decrease of $23.6 million due to higher depreciation expense related to the change in the estimated useful life of the shuttle component for all shuttle tankers from 25 to 20 years, the accelerated amortization of the tanker component for eight older shuttle tankers commencing the first quarter of 2016, the acquisition of the six towing and offshore installation vessels during 2015, the delivery of the ALP Striker towage vessel in September 2016 and the commencement of the charter contract of the Arendal Spirit UMS in June 2015. This is partially offset by dry-dock costs for the Navion Saga shuttle tanker being fully depreciated during the fourth quarter of 2015, a write-down of the carrying values of seven shuttle tankers during 2015, and the Navion Europa shuttle tanker being fully amortized during the second quarter of 2015; |
• | a decrease of $22.7 million due to the expiration in April 2015 of a long-term contract at the Heidrun field serviced by Teekay Offshore's CoA fleet; |
• | a decrease of $17.9 million due to the redelivery of two shuttle tankers to Teekay Offshore in April 2015 and June 2016, respectively, as they completed their time-charter-out agreement; |
• | a decrease of $9.7 million due to fewer opportunities to trade excess shuttle tanker capacity in the conventional tanker spot market; |
• | a decrease of $8.7 million relating to the towage fleet primarily due to a decrease in rates and utilization of the towing and offshore installation vessels due to volatility in the offshore market, an increase in operating expenses due to the delivery of the ALP Striker in September 2016, an increase in repairs and maintenance expenses due to engine overhauls on the ALP Winger and ALP Centre during the first quarter of 2016, and an increase in crew costs compared to 2015 due to higher crew levels, partially offset by a more cost-efficient crew composition in 2016; |
• | a decrease of $5.2 million due to the in-chartering of the Grena Knutsen starting September 2016; and |
• | a decrease of $4.2 million related to higher repair and maintenance activities on the Navion Anglia shuttle tanker to prepare the vessel to trade in Teekay Offshore's CoA fleet in the North Sea as the vessel was redelivered to Teekay Offshore in June 2016 due to the completion of its time-charter-out agreement in Brazil; |
• | an increase of $69.7 million due to a write-down of shuttle tankers of $65.1 million in 2015 and a $6.7 million gain on the sale of a shuttle tanker in 2016, partially offset by a write-down of a shuttle tanker of $2.1 million in 2016; |
• | an increase of $15.9 million due to an increase in rates as provided in certain contracts in Teekay Offshore's time-chartered-out fleet and an increase in revenues in Teekay Offshore's CoA fleet due to higher average rates and higher fleet utilization; |
• | an increase of $13.2 million due to lower general and administrative expenses from lower management fees relating to Teekay Offshore's shuttle tanker and FSO fleets primarily from cost saving initiatives, and a decrease in development fees to Teekay of $4.2 million in connection with Teekay Offshore's acquisition of six long-distance towing and offshore installation vessels and the Arendal Spirit UMS in 2015, partially offset by an increase in management fees due to the commencement of the charter contract of the Arendal Spirit in June 2015; |
• | an increase of $10.8 million due to an increase in net revenues from the commencement of the East Coast of Canada contract in June 2015, partially offset by lower reimbursable expenses in relation to this contract and the in-chartering of three shuttle tankers for this contract, one of which was redelivered by Teekay Offshore in August 2015 and was replaced by Teekay's own shuttle tanker, the Navion Hispania; |
• | an increase of $5.6 million due a reduction in operating expenses and amortization expense due to the commencement of the FSO conversion of the Randgrid in June 2015; |
• | an increase of $4.0 million due to the redeliveries by Teekay Offshore of the Grena Knutsen and Aberdeen shuttle tankers in June 2015 and December 2016, respectively, partially offset by increased spot in-chartering of shuttle tankers in 2016; |
• | an increase of $4.0 million due to the Navion Europa shuttle tanker acting as a substitute vessel while the Apollo Spirit FSO unit was undergoing a dry dock in the third quarter of 2016; and |
• | an increase of $3.2 million due to lower shuttle tanker operating expenses due to lower fleet and onshore overhead mainly related to lower crew training costs in 2016, and the strengthening of the U.S. Dollar against the Norwegian Kroner, Euro and Brazilian Real, partially offset by higher crew costs relating to a change in crew composition. |
• | a decrease of $46.6 million for the Petrojarl Varg FPSO unit, due to the termination of the charter contract by Repsol effective at the end of July 2016, partially offset by lower vessel operating expenses as the unit is now in layup; |
• | a decrease of $4.4 million relating to the restructuring costs associated with the reorganization of the FPSO business to create better alignment with the offshore operations and resulting in a lower cost organization going forward; and |
• | a decrease of $2.9 million relating to the Voyageur Spirit FPSO unit due to a lower production bonus earned in 2016 compared to 2015, partially offset by lower repair and maintenance costs reimbursed by the charterer in 2016; |
• | an increase of $28.2 million due to the Petrojarl Knarr FPSO unit commencing operations on March 9, 2015; |
• | an increase of $2.6 million due to lower general and administrative expenses due to (a) a decrease in business development fees paid to Teekay in 2016 compared to 2015 of $9.7 million in connection with the 2015 acquisition for the Petrojarl Knarr FPSO and (b) the redelivery and lay up of the Petrojarl Varg FPSO unit in 2016, partially offset by the increase in general and administration expenses as a result of the acquisition of the Petrojarl Knarr FPSO unit in July 2015; and |
• | an increase of $1.9 million for the Rio das Ostras FPSO unit, primarily due to higher incentive compensation and a bonus earned from the charterer of the unit for unused maintenance days under the service contract during 2016. |
• | a net decrease of $10.7 million in 2016 due to the sale of the Kilimanjaro Spirit and Fuji Spirit in March 2016, and the subsequent in-chartering of the Blue Power and Blue Pride; and |
• | a decrease of $5.4 million for 2016 due to the sale of the Explorer Spirit and Navigator Spirit in December 2015; |
• | an increase of $5.8 million relating to a $4.0 million termination fee received from Teekay due to the early termination of the time-charter-out contract for the Kilimanjaro Spirit in March 2016 and net termination fees of $1.8 million paid to Teekay due to the early terminations of bareboat and time-charter contracts for the SPT Explorer, Navigator Spirit, and Fuji Spirit in December 2015; and |
• | an increase of $3.9 million due to a write-down of two conventional tankers in 2015. |
Liquefied Gas Carriers | Conventional Tankers | Teekay LNG Total | ||||||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days)_____________ | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | 336,530 | 305,056 | 59,914 | 92,935 | 396,444 | 397,991 | ||||||||||||
Voyage expenses | (449 | ) | 203 | (1,207 | ) | (1,349 | ) | (1,656 | ) | (1,146 | ) | |||||||
Net revenues | 336,081 | 305,259 | 58,707 | 91,586 | 394,788 | 396,845 | ||||||||||||
Vessel operating expenses | (66,087 | ) | (63,344 | ) | (22,503 | ) | (30,757 | ) | (88,590 | ) | (94,101 | ) | ||||||
Depreciation and amortization | (80,084 | ) | (71,323 | ) | (15,458 | ) | (20,930 | ) | (95,542 | ) | (92,253 | ) | ||||||
General and administrative expenses (1) | (15,310 | ) | (19,392 | ) | (3,189 | ) | (5,726 | ) | (18,499 | ) | (25,118 | ) | ||||||
Write-down and loss on sale of vessels | — | — | (38,976 | ) | — | (38,976 | ) | — | ||||||||||
Restructuring charges | — | — | — | (4,001 | ) | — | (4,001 | ) | ||||||||||
Income (loss) from vessel operations | 174,600 | 151,200 | (21,419 | ) | 30,172 | 153,181 | 181,372 | |||||||||||
Equity income | 62,307 | 84,171 | — | — | 62,307 | 84,171 | ||||||||||||
Calendar-Ship-Days (2) | ||||||||||||||||||
Liquefied Gas Carriers | 7,440 | 6,935 | — | — | 7,440 | 6,935 | ||||||||||||
Conventional Tankers | — | — | 2,439 | 2,920 | 2,439 | 2,920 |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the liquefied gas carriers and conventional tankers based on estimated use of corporate resources. |
(2) | Calendar-ship-days presented relate to consolidated vessels. |
• | an increase of $19.9 million as a result of the deliveries of the Creole Spirit and Oak Spirit and the commencement of their charter contracts; |
• | an increase of $4.1 million as a result of lower general and administrative expenses primarily due to reimbursement from the Bahrain Joint Venture in 2016 of Teekay LNG's proportionate costs, including pre-operation, engineering and financing-related expenses, upon the joint venture securing its financing in the fourth quarter of 2016; |
• | an increase of $3.8 million due to lower vessel operating expenses due to the charterer, Teekay, not being able to find employment for the Arctic Spirit and Polar Spirit for a portion of 2016, which permitted Teekay LNG to operate the vessels with a reduced average number of crew on board and reduce the amount of repair and maintenance activities performed; and |
• | an increase of $2.2 million due to the Polar Spirit being off-hire for 47 days in 2015 for a scheduled dry docking; |
• | a decrease of $4.5 million due to a revenue deferral relating to Teekay LNG's six LPG carriers on charter to Skaugen; and |
• | a decrease of $2.0 million for Teekay LNG's Spanish LNG carriers primarily due to a performance claim related to the Hispania Spirit recorded in the fourth quarter of 2016 and the Catalunya Spirit being off-hire for six days in the first quarter of 2016 for a scheduled in-water survey. |
(in thousands of U.S. Dollars) | Year Ended December 31, | |||||||||||||
Angola LNG Carriers | Exmar LNG Carriers | Exmar LPG Carriers | MALT LNG Carriers | RasGas 3 LNG Carriers | Other | Total Equity Income | ||||||||
2016 | 15,713 | 9,038 | 13,674 | 4,503 | 19,817 | (438 | ) | 62,307 | ||||||
2015 | 16,144 | 9,332 | 32,733 | 4,620 | 21,527 | (185 | ) | 84,171 | ||||||
Difference | (431 | ) | (294 | ) | (19,059 | ) | (117 | ) | (1,710 | ) | (253 | ) | (21,864 | ) |
• | decreases of $32.5 million due to the sales of the Bermuda Spirit and Hamilton Spirit in 2016, resulting in a loss on sale of vessels of $27.4 million and a decrease in operating income; |
• | a decrease of $11.5 million relating to the write-down of the Asian Spirit in 2016 as this vessel is classified as held for sale at December 31, 2016; |
• | a decrease of $4.4 million due to lower revenues earned by the Teide Spirit relating to a profit sharing agreement between Teekay LNG and Compania Espanole de Petroleos, S.A. (or CEPSA); |
• | a decrease of $3.6 million relating to the European Spirit, African Spirit and Asian Spirit upon the charterer exercising its one-year options in September 2015, November 2015 and January 2016, respectively, at lower charter rates than the original charter rates; and |
• | a decrease of $2.8 million due to lower revenues earned by the Toledo Spirit in 2016 relating to a profit sharing agreement between Teekay LNG and CEPSA. |
• | an increase of $2.5 million due to lower general and administrative expenses relating primarily to a reduced amount of business development activities in 2016. |
Year Ended December 31, | ||||||
(in thousands of U.S. dollars, except calendar-ship-days) | 2016 | 2015 | ||||
Revenues | 526,896 | 504,347 | ||||
Voyage expenses | (55,241 | ) | (19,566 | ) | ||
Net revenues | 471,655 | 484,781 | ||||
Vessel operating expenses | (182,598 | ) | (130,775 | ) | ||
Time-charter hire expense | (59,647 | ) | (77,799 | ) | ||
Depreciation and amortization | (104,149 | ) | (71,429 | ) | ||
General and administrative expenses | (18,211 | ) | (16,694 | ) | ||
Asset impairments | (20,462 | ) | — | |||
(Loss) gain on sale of vessels | (132 | ) | 771 | |||
Restructuring charges | — | (4,772 | ) | |||
Income from vessel operations | 86,456 | 184,083 | ||||
Equity income | 13,101 | 14,411 | ||||
Calendar-Ship-Days (1) | ||||||
Conventional Tankers | 19,303 | 16,636 |
(1) | Calendar-ship-days presented relate to owned and in-chartered consolidated vessels. |
• | a decrease of $99.8 million due to lower average realized rates earned by our Suezmax, Aframax, LR2 and MR tankers trading in the spot tanker market in 2016 compared to 2015; |
• | a decrease of $20.5 million due to write-downs of two MR product tankers and two Suezmax tankers to their respective sales prices in 2016; |
• | a decrease of $6.0 million due to increases in amortization of dry-docking costs during 2016 resulting from high dry-docking activity during the second half of 2015; and |
• | a decrease of $3.6 million due to in-process revenue contract amortization that was recognized in revenue in late 2015 and fully amortized in the first quarter of 2016; |
• | an increase of $15.8 million due to increased revenue days during 2016 due to fewer net off-hire days in 2016 and an additional revenue day as 2016 is a leap year; |
• | an increase of $9.6 million due to higher rates earned from out-chartered Aframax tankers during 2016; |
• | a net increase of $4.4 million due to results from the ship-to-ship transfer business which Teekay Tankers acquired during the third quarter of 2015; and |
• | a net increase of $3.8 million due to lower pool management fees, commissions, off-hire bunker and other expenses in 2016 compared to 2015, due primarily to lower average TCE rates. |
• | a decrease of $3.8 million due to lower equity earnings from TIL resulting from overall lower realized average spot rates earned in 2016 compared to 2015, partially offset by an increase resulting from Teekay Tankers' increased ownership interest in TIL to 11.31% in 2016 as compared to 10.20% in 2015; |
• | an increase of $1.3 million due to higher equity earnings from Teekay Tankers' 50% interest in Teekay Tankers Operations Ltd. (or TTOL), primarily relating to its share of cancellation fees paid to Anglo-Eastern during the first quarter of 2015 for acquiring its 49% share in Teekay Marine Ltd. and the timing of vessels which transitioned from the Gemini Suezmax pool to the Teekay Suezmax RSA in 2015. This was partially offset by overall lower realized average spot rates earned in 2016 compared to 2015; and |
• | an increase of $1.1 million due to higher equity earnings from the High-Q joint venture primarily resulting from profit share recognized in the second quarter of 2016 as VLCC rates averaged above certain thresholds, triggering a profit sharing with the customer. |
Offshore Production | Conventional Tankers | Other and Corporate G&A | Teekay Parent Total | |||||||||||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days)_______________ | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Revenues | 231,435 | 277,842 | 32,967 | 65,777 | 76,111 | 75,547 | 340,513 | 419,166 | ||||||||||||||||
Voyage expenses | (269 | ) | (36 | ) | (287 | ) | (763 | ) | (2,879 | ) | (808 | ) | (3,435 | ) | (1,607 | ) | ||||||||
Net revenues | 231,166 | 277,806 | 32,680 | 65,014 | 73,232 | 74,739 | 337,078 | 417,559 | ||||||||||||||||
Vessel operating expenses | (159,084 | ) | (200,338 | ) | (10,468 | ) | (16,051 | ) | (26,576 | ) | (24,294 | ) | (196,128 | ) | (240,683 | ) | ||||||||
Time-charter hire expense | (33,366 | ) | (29,978 | ) | (23,166 | ) | (38,991 | ) | (48,452 | ) | (44,448 | ) | (104,984 | ) | (113,417 | ) | ||||||||
Depreciation and amortization | (70,855 | ) | (69,508 | ) | (1,717 | ) | (2,852 | ) | 449 | 451 | (72,123 | ) | (71,909 | ) | ||||||||||
General and administrative expenses (1) | (14,099 | ) | (17,261 | ) | (809 | ) | (2,136 | ) | (10,707 | ) | 1,221 | (25,615 | ) | (18,176 | ) | |||||||||
Net loss on sale of vessels and equipment | (110 | ) | (948 | ) | (12,487 | ) | — | — | — | (12,597 | ) | (948 | ) | |||||||||||
Restructuring charges | (1,962 | ) | — | — | — | (20,165 | ) | (2,654 | ) | (22,127 | ) | (2,654 | ) | |||||||||||
(Loss) income from vessel operations | (48,310 | ) | (40,227 | ) | (15,967 | ) | 4,984 | (32,219 | ) | 5,015 | (96,496 | ) | (30,228 | ) | ||||||||||
Equity (loss) income | (575 | ) | (12,196 | ) | 5,089 | 16,712 | (1,838 | ) | (1,101 | ) | 2,676 | 3,415 | ||||||||||||
Calendar-Ship-Days (2) | ||||||||||||||||||||||||
FPSO Units | 1,098 | 1,095 | — | — | — | — | 1,098 | 1,095 | ||||||||||||||||
Conventional Tankers | — | — | 1,278 | 2,516 | — | — | 1,278 | 2,516 | ||||||||||||||||
Gas carriers | — | — | — | — | 732 | 730 | 732 | 730 | ||||||||||||||||
FSO Units | 366 | 365 | — | — | 732 | 730 | 1,098 | 1,095 | ||||||||||||||||
Shuttle Tankers | 732 | 730 | — | — | — | — | 732 | 730 | ||||||||||||||||
Bunker Barges | — | — | — | — | 672 | 200 | 672 | 200 |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore production, conventional tankers and other and corporate G&A based on estimated use of corporate resources. |
(2) | Apart from three FPSO units and one conventional tanker, all remaining calendar-ship-days presented relate to in-chartered days. |
• | an increase in loss of $13.7 million related to the Petrojarl Banff FPSO unit as a result of off-hire in the first quarter of 2016 and higher repairs and maintenance costs due to the temporary loss of two mooring lines in the first quarter of 2016; |
• | an increase in loss of $5.5 million related to the Hummingbird FPSO primarily due to the contract amendment described above that took effect on July 1, 2016, partially offset by lower operating expenses in 2016; and |
• | an increase in loss of $2.0 million due to restructuring charges primarily relating to the reorganization of the Company's FPSO business in 2016; |
• | a decrease in loss of $9.1 million primarily due to legal costs incurred in 2015 relating to repairs and upgrades to the Petrojarl Banff FPSO after the storm event in December 2011, and cost-saving initiatives in 2016; and |
• | a decrease in loss of $4.8 million primarily related to the Petrojarl Foinaven FPSO, primarily due to the shutdown of the unit in 2015 for maintenance and lower operating costs in 2016. |
• | a decrease in income of $12.5 million due to the write-down in 2016 of one VLCC to its agreed sales price; |
• | a decrease in income of $5.8 million due to lower average realized TCE rates in 2016 compared to 2015; |
• | a net decrease in income of $5.7 million due to cancellation fees paid by Teekay Parent to Teekay Offshore in 2016 and 2015 related to the termination of the time-charter contracts of two Aframax tankers, partially offset by cancellations paid to Teekay Parent from Teekay Offshore and Teekay Tankers in 2015 related to the termination of bareboat contracts of two Aframax tankers; and |
• | a decrease in income of $2.6 million due to a higher time-charter hire rate for an Aframax in-charter in the first quarter of 2016; |
• | a net increase in income of $4.0 million due to lower vessel operating expenses from the termination of bareboat contracts of two Aframax tankers that Teekay Parent in-chartered from Teekay Offshore and the sale of the VLCC and lower time-charter hire expense from the redeliveries of three in-chartered conventional tankers to Teekay Offshore and Teekay Tankers, partially offset by the loss of revenue due to the redeliveries and sale of those tankers; and |
• | an increase in income of $2.0 million due to a distribution received from the Gemini Pool in 2016. |
• | an increase in loss of $32.8 million primarily due to lower revenues earned as a result of the terminations of time charters and the lay-up of the Arctic Spirit and Polar Spirit LNG carriers in 2016; |
• | an increase in loss of $13.9 million due to business development fees received from Teekay Offshore in 2015 in respect of the Petrojarl Knarr FPSO unit, the Arendal Spirit UMS and the six on-the-water, long distance towing and offshore installation vessels; |
• | an increase in loss of $2.7 million primarily due to office closure costs and seafarers' severance amounts relating to tug businesses in Western Australia in 2016; and |
• | an increase in loss of $1.6 million due to fees received from TIL in 2015 for our arrangement of the acquisition of certain of its vessels, partially offset by fees received relating to the sale of two vessels in 2016; |
• | a decrease in loss of $5.4 million primarily due to lower restructuring charges relating to the reorganization of our marine operations and corporate services in 2015, and lower general and administrative expenses as a result of cost saving initiatives in 2016; and |
• | a decrease in loss of $9.4 million primarily due to earnings generated on technical, crew and commercial management services provided for an increased fleet size in 2016. |
Year Ended December 31, | |||||||||
(in thousands of U.S. dollars, except percentages) | 2016 | 2015 | % Change | ||||||
Interest expense | (282,966 | ) | (242,469 | ) | 16.7 | ||||
Interest income | 4,821 | 5,988 | (19.5 | ) | |||||
Realized and unrealized loss on non-designated derivative instruments | (35,091 | ) | (102,200 | ) | (65.7 | ) | |||
Foreign exchange loss | (6,548 | ) | (2,195 | ) | 198.3 | ||||
Other (loss) income | (39,013 | ) | 1,566 | (2,591.3 | ) | ||||
Income tax (expense) recovery | (24,468 | ) | 16,767 | (245.9 | ) |
• | an increase of $12.4 million due to additional interest incurred by Teekay Tankers to finance the acquisition of the 12 modern Suezmax tankers which were acquired in the third quarter of 2015; |
• | an increase of $12.1 million relating to interest incurred on the capital lease obligations for the Creole Spirit and Oak Spirit commencing upon their deliveries in February 2016 and July 2016, respectively; |
• | an increase of $10.8 million primarily due to the additional issuance of $200 million of Teekay Parent's 8.5% senior unsecured notes in November 2015, partially offset by reductions in Teekay Parent's equity margin revolving credit facility and loan facility secured by three FPSO units, and the maturity of Teekay Parent's Norwegian Kroner (or NOK) bonds in October 2015; |
• | an increase of $9.2 million due to the interest expense associated with the Petrojarl Knarr FPSO unit commencing operations in March 2015; |
• | an increase of $3.4 million due to interest expense relating to Teekay Offshore's second UMS newbuilding up until its construction contract cancellation in late-June 2016; and |
• | an increase of $2.1 million due to an increase in LIBOR on floating-rate debt, net of debt repayments during 2016 and 2015; |
• | a decrease of $5.2 million due to an increase in capitalized interest on Teekay Offshore's newbuildings, conversion and upgrade projects; and |
• | a decrease of $3.0 million due to the maturity of Teekay Offshore's NOK 500 million senior unsecured bond in January 2016. |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | ||||
Realized (losses) gains relating to: | |||||
Interest rate swap agreements | (87,320 | ) | (108,036 | ) | |
Interest rate swap agreement terminations | (8,140 | ) | (10,876 | ) | |
Foreign currency forward contracts | (11,186 | ) | (21,607 | ) | |
Time charter swap agreement | 2,154 | — | |||
(104,492 | ) | (140,519 | ) | ||
Unrealized gains (losses) relating to: | |||||
Interest rate swap agreements | 62,446 | 37,723 | |||
Foreign currency forward contracts | 15,833 | (418 | ) | ||
Stock purchase warrants | (9,753 | ) | 1,014 | ||
Time charter swap agreement | 875 | — | |||
69,401 | 38,319 | ||||
Total realized and unrealized (losses) gains on derivative instruments | (35,091 | ) | (102,200 | ) |
(in thousands of U.S. dollars, except calendar-ship-days) | Offshore Logistics | Offshore Production | Conventional Tankers | Teekay Offshore Total | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Revenues | 667,629 | 631,455 | 531,554 | 354,518 | 30,230 | 33,566 | 1,229,413 | 950,977 | ||||||||||||||||
Voyage expenses | (95,680 | ) | (107,167 | ) | — | — | (2,326 | ) | (5,373 | ) | (98,006 | ) | (104,325 | ) | ||||||||||
Net revenues | 571,949 | 524,288 | 531,554 | 354,518 | 27,904 | 28,193 | 1,131,407 | 846,652 | ||||||||||||||||
Vessel operating expenses | (182,346 | ) | (188,087 | ) | (189,900 | ) | (158,216 | ) | (6,234 | ) | (5,906 | ) | (378,480 | ) | (347,979 | ) | ||||||||
Time-charter hire expense | (51,750 | ) | (31,090 | ) | — | — | — | — | (51,750 | ) | (56,682 | ) | ||||||||||||
Depreciation and amortization | (130,102 | ) | (118,968 | ) | (137,914 | ) | (72,905 | ) | (6,583 | ) | (6,680 | ) | (274,599 | ) | (200,242 | ) | ||||||||
General and administrative expenses (1) | (32,963 | ) | (37,974 | ) | (38,588 | ) | (27,406 | ) | (1,062 | ) | (2,136 | ) | (72,613 | ) | (45,250 | ) | ||||||||
Asset impairments and gain on sale of vessels | (66,101 | ) | (1,638 | ) | — | — | (3,897 | ) | — | (69,998 | ) | (94,946 | ) | |||||||||||
Restructuring (charges) recovery | (568 | ) | 225 | — | — | — | — | (568 | ) | (2,361 | ) | |||||||||||||
Income from vessel operations | 108,119 | 146,756 | 165,152 | 95,991 | 10,128 | 13,471 | 283,399 | 99,192 | ||||||||||||||||
Equity income | — | — | 7,672 | 10,341 | — | — | 7,672 | 6,731 | ||||||||||||||||
Calendar-Ship-Days (2) | ||||||||||||||||||||||||
Shuttle Tankers | 12,319 | 12,672 | — | — | — | — | 12,319 | 12,672 | ||||||||||||||||
FSO Units | 2,395 | 2,190 | — | — | — | — | 2,395 | 2,190 | ||||||||||||||||
FPSO Units | — | — | 2,122 | 1,476 | — | — | 2,122 | 1,476 | ||||||||||||||||
Conventional Tankers | — | — | — | — | 1,432 | 1,460 | 1,432 | 1,460 | ||||||||||||||||
UMS | 318 | — | — | — | — | — | 318 | — | ||||||||||||||||
Towage | 1,606 | — | — | — | — | — | 1,606 | — |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore logistics, offshore production and conventional tankers based on estimated use of corporate resources. |
(2) | Calendar-ship-days presented relate to owned and in-chartered consolidated vessels. |
• | a decrease of $61.9 million due to vessel write-downs of $66.7 million on seven 1990s-built shuttle tankers, whose carrying values were written down to their estimated fair values using appraised values for the year ended December 31, 2015. During the first quarter of 2015, two of the vessels were written down as a result of the expected sale of a vessel and a change in the operating plan of a vessel. In the fourth quarter of 2015, five shuttle tankers, which have an average age of 17.5 years, were written down as a result of changes in Teekay Offshore’s expectations regarding their future opportunities, primarily due to their advanced age. While we expect four of the five vessels that were written down due to their advanced age to continue to actively trade as shuttle tankers over the near-term and the fifth vessel to actively trade in the conventional tanker market, Teekay Offshore anticipates the vessels will have fewer opportunities for alternative usage and encounter increased age discrimination over time. The decrease due to vessel write-downs was partially offset by a vessel write-down of $4.8 million in 2014 on the carrying value of one of Teekay Offshore’s 1990s-built shuttle tanker which was written down to its estimated fair value using an appraised value, as a result of the vessel charter contract expiring in early-2015 and the expected sale of the vessel; |
• | a decrease of $31.3 million relating to the expiration of a long-term contract at the Heidrun field serviced by Teekay Offshore’s contracts of affreightment fleet; |
• | a decrease of $18.4 million due to the redeliveries of two vessels to Teekay Offshore in February 2014 and April 2015 as they completed their time-charter-out agreements; |
• | a decrease of $6.9 million due to the sale of a 1997-built shuttle tanker, the Navion Svenita in March 2015, partially offset by the gain on the sale of the vessel to a third party; and |
• | a decrease of $3.0 million due to an increase in depreciation expense resulting from the dry docking of eight shuttle tankers from mid-2014 to late-2015; |
• | an increase of $14.3 million from lower vessel operating expense in Teekay Offshore’s shuttle fleet due to the strengthening of the U.S. Dollar against the Norwegian Kroner, Euro and Brazilian Real; |
• | an increase of $8.7 million from lower vessel operating expenses and depreciation expense, due to the commencement of an FSO conversion of the Randgrid in June 2015; |
• | an increase of $8.6 million due to lower time-charter hire expense due to the redelivery by Teekay Offshore to its owners of the in-chartered Karen Knutsen in January 2014 and the Grena Knutsen in June 2015, decreased spot in-chartering of shuttle tankers, lower time-charter hire rates on the Aberdeen and an increase in off-hire during the third quarter of 2015, partially offset by the dry docking and off-hire of the Sallie Knutsen during the first and second quarters of 2014, and the dry docking of the Aberdeen during the second quarter of 2014; |
• | an increase of $8.0 million in revenues from Teekay Offshore’s contract of affreightment fleet due to higher average rates, an increase in rates as provided in certain contracts in Teekay Offshore’s time-chartered-out fleet, and an increase in revenues from the commencement of new contracts in mid-2015; |
• | an increase of $6.5 million due to an increase in revenues from the commencement of the East Coast of Canada contract which commenced in June 2015, partially offset by additional in-chartering costs; |
• | an increase of $6.2 million due to the commencement of the charter contract of the Arendal Spirit UMS in June 2015 partially offset by write-downs relating to the expiration during 2015 of two options to purchase two additional units; |
• | an increase of $4.4 million due to the delivery of six towing and offshore installation vessels during 2015; |
• | an increase of $3.9 million primarily due to the dry docking of the Dampier Spirit during the second quarter of 2014 and the Navion Saga during the third quarter of 2014, partially offset by lower crew costs in 2014 due to a pension adjustment recorded in the first quarter of 2014 and increased depreciation of dry-dock and upgrade costs; |
• | an increase of $3.7 million due to higher average rates earned during 2015 when trading excess shuttle tanker capacity in the conventional tanker spot market, offset by fewer conventional spot days; |
• | an increase of $2.9 million due to fewer repair off-hire days in Teekay Offshore’s time-chartered-out fleet for 2015 compared to 2014; |
• | an increase of $2.2 million relating to the HiLoad DP unit mainly due to mobilization expenses in 2014 partially offset by the commencement of depreciation expense of the HiLoad DP unit from January 2015; |
• | an increase of $2.1 million due to the commencement of operations of the Suksan Salamander FSO in the third quarter of 2014; |
• | an increase of $2.1 million from lower depreciation expense due to the Navion Europa being fully amortized during the second quarter of 2015; and |
• | an increase of $2.1 million due to a decrease in repairs and maintenance expenses for 2015 compared to 2014 and a decrease in crew costs for 2015 compared to 2014 due to a change in crew composition, partially offset by an increase in crew training expenses for 2015 compared to 2014. |
• | an increase of $67.0 million, excluding general and administrative expenses, due to the acquisition of the Petrojarl Knarr FPSO unit; |
• | an increase of $17.2 million, excluding general and administrative expenses, for the Voyageur Spirit FPSO unit during 2015, primarily due to the charterer’s final acceptance of the charter contract in February 2014, a production bonus earned in 2015, a production penalty in 2014 and external consulting fees incurred during the first quarter of 2014 to achieve final acceptance for the unit; |
• | an increase of $3.7 million, excluding general and administrative expenses, for the Rio das Ostras FPSO unit, primarily due to a decrease in operating expenses for the unit due to the strengthening of the U.S. Dollar against the Brazilian Real and Norwegian Kroner and lower repairs and maintenance expenses; |
• | an increase of $2.2 million due to lower ship management costs in 2015 related to operating the FPSO units; and |
• | an increase of $2.1 million, excluding general and administrative expenses, due to an increase in crew hours reimbursed by the charterer of the Petrojarl Varg for 2015, and due to the timing of costs related to repair and maintenance, partially offset by decreases in incentive-related compensation during 2015; |
• | a decrease of $11.2 million due to increases in general and administrative expenses primarily related to the acquisition of the Petrojarl Knarr, partially offset by additional focus required for obtaining final charter contract acceptance for the Voyageur Spirit in the first quarter of 2014; |
• | a decrease of $6.4 million, excluding general and administrative expenses, relating to the Piranema Spirit FPSO unit mainly due to unscheduled off-hire for repairs during the third and fourth quarter of 2015 and higher repairs and maintenance costs, partially offset by a reversal of an agency fee accrual during 2015 which Teekay Offshore no longer considers payable and the commencement of operations of a produced water treatment plan on the Piranema Spirit in the second quarter of 2014; and |
• | a decrease of $6.2 million from increased depreciation expense for the Petrojarl I FPSO unit, which Teekay Offshore acquired from us in December 2014. |
Liquefied Gas Carriers | Conventional Tankers | Teekay LNG Total | ||||||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days)_________________ | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | 305,056 | 307,426 | 92,935 | 95,502 | 397,991 | 402,928 | ||||||||||||
Voyage expenses | 203 | (1,768 | ) | (1,349 | ) | (1,553 | ) | (1,146 | ) | (3,321 | ) | |||||||
Net revenues | 305,259 | 305,658 | 91,586 | 93,949 | 396,845 | 399,607 | ||||||||||||
Vessel operating expenses | (63,344 | ) | (59,087 | ) | (30,757 | ) | (36,721 | ) | (94,101 | ) | (95,808 | ) | ||||||
Depreciation and amortization | (71,323 | ) | (71,711 | ) | (20,930 | ) | (22,416 | ) | (92,253 | ) | (94,127 | ) | ||||||
General and administrative expenses (1) | (19,392 | ) | (17,992 | ) | (5,726 | ) | (5,868 | ) | (25,118 | ) | (23,860 | ) | ||||||
Restructuring recovery (charges) | — | — | (4,001 | ) | (1,989 | ) | (4,001 | ) | (1,989 | ) | ||||||||
Income from vessel operations | 151,200 | 156,868 | 30,172 | 26,955 | 181,372 | 183,823 | ||||||||||||
Equity income | 84,171 | 115,478 | — | — | 84,171 | 115,478 | ||||||||||||
Calendar-Ship-Days (2) | ||||||||||||||||||
Liquefied Gas Carriers | 6,935 | 6,619 | — | — | 6,935 | 6,619 | ||||||||||||
Conventional Tankers | — | — | 2,920 | 3,202 | 2,920 | 3,202 |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the liquefied gas carriers and conventional tankers based on estimated use of corporate resources. |
(2) | Calendar-ship-days presented relate to consolidated vessels. |
• | a decrease of $9.3 million due to the effect on Teekay LNG’s Euro-denominated revenues from the depreciation of the Euro against the U.S. Dollar compared to 2014, partially offset by lower crew wages due to favorable foreign exchange impacts during 2015 on crew wages denominated in foreign currencies relating to certain of its LNG carriers; |
• | a decrease of $1.6 million from an increase in ship management fees for Teekay LNG carriers compared to 2014; and |
• | a decrease of $1.4 million from higher general and administrative expenses primarily due to a greater amount of business development, commercial activities, and legal and tax services provided to Teekay LNG by Teekay to support its growth, and higher advisory fees incurred to support its business development and commercial activities; |
• | a net increase of $4.5 million due to less scheduled and unscheduled off-hire days in 2015 compared to the prior year; and |
• | an increase of $2.0 million as a result of the acquisition and delivery of the Norgas Napa in November 2014. |
(in thousands of U.S. Dollars) | Year Ended December 31, | ||||||||||||||||||||
Angola LNG Carriers | Exmar LNG Carriers | Exmar LPG Carriers | MALT LNG Carriers | RasGas 3 LNG Carriers | Other | Total Equity Income | |||||||||||||||
2015 | 16,144 | 9,332 | 32,733 | 4,620 | 21,527 | (185 | ) | 84,171 | |||||||||||||
2014 | 3,472 | 10,651 | 44,114 | 36,805 | 20,806 | (370 | ) | 115,478 | |||||||||||||
Difference | 12,672 | (1,319 | ) | (11,381 | ) | (32,185 | ) | 721 | 185 | (31,307 | ) |
• | an increase of $6.6 million due to higher revenues earned by the Teide Spirit and Toledo Spirit in 2015 relating to the agreement between Teekay LNG and CEPSA which resulted in additional revenue when spot tanker rates exceeded certain thresholds, and the Teide Spirit being off hire for 31 days for a scheduled dry docking in 2014, partially offset by the Toledo Spirit being off hire for 22 days for a scheduled dry docking in 2015; |
• | a decrease of $2.3 million due to higher revenues recognized last year by the Bermuda Spirit and Hamilton Spirit relating to an agreement between Teekay LNG and the charterer that ended in October 2014, which resulted in Teekay LNG recognizing additional revenues in 2014 when Suezmax tanker spot rates exceeded a certain amount, partially offset by the Bermuda Spirit being off hire for 27 days in the first quarter of 2014 and the Hamilton Spirit being off hire for 24 days in the second quarter of 2014 for scheduled dry dockings; and |
• | a decrease of $1.1 million due to CEPSA’s sales of Teekay LNG’s vessels under capital lease, the Algeciras Spirit and Huelva Spirit, in February 2014 and August 2014, respectively, including the seafarer severance payments in August 2014. |
Year Ended December 31, | ||||||
(in thousands of U.S. dollars, except calendar-ship-days) | 2015 | 2014 | ||||
Revenues | 504,347 | 235,593 | ||||
Voyage expenses | (19,566 | ) | (9,984 | ) | ||
Net revenues | 484,781 | 225,609 | ||||
Vessel operating expenses | (130,775 | ) | (93,022 | ) | ||
Time-charter hire expense | (77,799 | ) | (22,160 | ) | ||
Depreciation and amortization | (71,429 | ) | (50,152 | ) | ||
General and administrative expenses | (16,694 | ) | (11,959 | ) | ||
Net gain on sale of vessels and equipment | 771 | 9,955 | ||||
Restructuring charge | (4,772 | ) | ||||
Income from vessel operations | 184,083 | 58,271 | ||||
Equity income | 14,411 | 5,228 | ||||
Calendar-Ship-Days (1) | ||||||
Conventional Tankers | 16,636 | 11,418 |
(1) | Calendar-ship-days presented relate to owned and in-chartered consolidated vessels. |
• | an increase of $83.0 million of revenue resulting from higher average realized TCE rates earned by Teekay Tankers’ Suezmax, Aframax, LR2 and MR tankers in 2015 compared to 2014; |
• | a net increase of $68.1 million resulting from the addition of 11 Suezmax tankers, three Aframax tanker and four LR2 product tankers acquired in 2015, the addition of two in-chartered Aframax tankers and one LR2 product tanker in 2015 and the addition of seven in-chartered Aframax tankers and four in-chartered LR2 product tankers in 2014 and from the recognition of in-process revenue contracts in 2015, partially offset by the addition of two VLCCs in March 2014 that were subsequently sold to TIL in May 2014 and the sale of a MR product tanker in 2015; |
• | a net increase of $13.4 million for 2015 resulting from certain vessels changing employment between fixed-rate charters and voyage charters; and |
• | an increase of $2.4 million from lower crewing costs during 2015 resulting from a change in the nationality of crew on a MR product tanker, favorable current year foreign currency exchange rates impacting crew wage expenditures, the timing and extent of planned vessel maintenance and repairs, and repairs on a Suezmax tanker which were incurred during 2014; |
• | a decrease of $10.0 million resulting from the gain on sale of vessels recorded in 2014 related to the sale of two wholly-owned subsidiaries, each of which owned one VLCC, to TIL; |
• | a decrease of $9.1 million resulting from the interest income recognized on Teekay Tankers’ investments in term loans in 2014; |
• | a net decrease of $6.6 million resulting from higher management fees, commissions, off-hire bunker expense and other expenses in 2015 compared to 2014; |
• | a decrease of $6.5 million resulting from higher time-charter rates due to profit sharing components and options Teekay Tankers exercised to extend the in-chartered contracts in 2015; |
• | a net decrease of $4.9 million resulting from more off-hire days in 2015 compared to 2014, primarily as a result of higher dry-docking activity; |
• | a decrease of $2.8 million resulting from higher corporate expenses incurred during 2015 primarily as a result of legal expenses related to vessel acquisitions and to the STX arbitration (Please read “Note 15d - Commitments and Contingencies - Legal Proceedings and Claims - STX Offshore & Shipbuilding Co.”); and |
• | a decrease of $2.1 million resulting from higher amortization of dry-docking expenditures in 2015 compared to 2014. |
• | an increase of $5.4 million due to higher equity earnings from TIL resulting from overall higher realized average spot rates earned in 2015 compared to 2014, the acquisition of six Suezmax vessels delivered during 2015 and one Aframax vessel delivered during 2014, partially offset by a decrease relating to a dilution gain recorded in 2014 resulting from Teekay Tankers’ reduced ownership interest in TIL from TIL's share issuance completed as part of its initial public offering (or IPO) in 2014; |
• | an increase of $3.3 million due to a full year of earnings from Teekay Tankers’ 50% interest in TTOL, which it acquired in 2014; and |
• | an increase of $0.5 million due to higher equity earnings from the High-Q joint venture resulting from higher unrealized gain on derivatives recognized in 2015 compared to 2014. |
Offshore Production | Conventional Tankers | Other and Corporate G&A | Teekay Parent Total | |||||||||||||||||||||
(in thousands of U.S. dollars, except calendar-ship-days) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Revenues | 277,842 | 259,945 | 65,777 | 94,376 | 75,547 | 95,791 | 419,166 | 450,112 | ||||||||||||||||
Voyage expenses | (36 | ) | (15 | ) | (763 | ) | (8,855 | ) | (808 | ) | 263 | (1,607 | ) | (8,607 | ) | |||||||||
Net revenues | 277,806 | 259,930 | 65,014 | 85,521 | 74,739 | 96,054 | 417,559 | 441,505 | ||||||||||||||||
Vessel operating expenses | (200,338 | ) | (212,159 | ) | (16,051 | ) | (29,633 | ) | (24,294 | ) | (26,488 | ) | (240,683 | ) | (268,280 | ) | ||||||||
Time-charter hire expense | (29,978 | ) | (29,623 | ) | (38,991 | ) | (54,720 | ) | (44,448 | ) | (42,426 | ) | (113,417 | ) | (126,769 | ) | ||||||||
Depreciation and amortization | (69,508 | ) | (78,630 | ) | (2,852 | ) | (2,216 | ) | 451 | 774 | (71,909 | ) | (80,072 | ) | ||||||||||
General and administrative expenses (1) | (17,261 | ) | (21,778 | ) | (2,136 | ) | (3,992 | ) | 1,221 | (9,321 | ) | (18,176 | ) | (35,091 | ) | |||||||||
Loan loss provision reversal | — | 2,521 | — | — | — | — | — | 2,521 | ||||||||||||||||
Net (loss) gain on sale of vessels and equipment | (948 | ) | 935 | — | (502 | ) | — | — | (948 | ) | 433 | |||||||||||||
Restructuring charges | — | — | — | (6,865 | ) | (2,654 | ) | (1,105 | ) | (2,654 | ) | (7,970 | ) | |||||||||||
(Loss) income from vessel operations | (40,227 | ) | (78,804 | ) | 4,984 | (12,407 | ) | 5,015 | 17,488 | (30,228 | ) | (73,723 | ) | |||||||||||
Equity (loss) income | (12,196 | ) | (1,357 | ) | 16,712 | 3,052 | (1,101 | ) | (2,546 | ) | 3,415 | (851 | ) | |||||||||||
Calendar-Ship-Days (2) | ||||||||||||||||||||||||
FPSO Units | 1,095 | 1,444 | — | — | — | — | 1,095 | 1,444 | ||||||||||||||||
Conventional Tankers | — | — | 2,516 | 3,667 | — | — | 2,516 | 3,667 | ||||||||||||||||
Gas Carriers | — | — | — | — | 730 | 730 | 730 | 730 | ||||||||||||||||
FSO Units | 365 | 365 | — | — | 730 | 503 | 1,095 | 868 | ||||||||||||||||
Shuttle Tankers | 730 | 730 | — | — | — | — | 730 | 730 | ||||||||||||||||
Bunker Barges | — | — | — | — | 200 | — | 200 | — |
(1) | Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore production, conventional tankers and other and corporate G&A based on estimated use of corporate resources. |
(2) | Apart from three FPSO units and one conventional tanker, all remaining calendar-ship-days presented relate to in-chartered days. |
• | an increase of $31.4 million related to the Petrojarl Banff FPSO unit, excluding general and administrative expenses, due to the unit’s recommencement of operations under its time-charter contract in July 2014, partially offset by in-process contract revenue being fully amortized in 2014; |
• | an increase of $21.3 million, excluding general and administrative expenses, related to lower vessel operating costs and depreciation as a result of the sale of Petrojarl I FPSO to Teekay Offshore in December 2014 subsequent to its contract expiration and lay-up in April 2013; and |
• | an increase of $10.0 million, excluding general and administrative expenses, from the Knarr FPSO unit incurring pre-operating costs in 2014 prior to its mobilization to the North Sea; |
• | a decrease of $20.2 million related to Hummingbird Spirit FPSO unit, excluding general and administrative expenses, primarily due to lower incentive revenue earned in 2015 as a result of lower oil prices, loss on disposal of mooring chains in 2015 and loan loss recovery in 2014 related to a front-end engineering and design (or FEED) study; |
• | a decrease of $3.5 million as a result of higher general and administrative expenses primarily due to legal costs associated with the Petrojarl Banff FPSO unit and increase in external consulting fees related to the FPSO fleet; and |
• | a decrease of $1.5 million primarily related to Petrojarl Foinaven, excluding general and administrative expenses, due to a settlement amount received in the first quarter of 2014 and lower oil price-linked revenue in 2015, partially offset by higher production in 2015 compared to the prior year due to compressor and sub-sea issues incurred in 2014. |
• | a net increase of $9.7 million due to higher average spot tanker TCE rates earned in 2015; |
• | a net increase of $5.3 million due to lower vessel operating expenses from the sale of the four Suezmax tankers during 2014 and lower time-charter hire expense from redeliveries of various tankers to their owners during 2014, partially offset by the loss of revenue due to the sale and redeliveries of tankers; and |
• | a net increase of $1.8 million due to net cancellation fees paid by Teekay Offshore to Teekay Parent related to the termination of time-charter contracts in 2015. |
• | a decrease of $15.7 million due to the Arctic Spirit and Polar Spirit LNG carriers earning lower charter rates commencing in 2015 from new contracts with existing charterers and a provision for doubtful accounts in relation to the Polar Spirit LNG carrier; |
• | a decrease of $6.1 million due to the interest income recognized in 2014 related to Teekay Parent’s investment in a term loan which was entered into during 2011; and |
• | a decrease of $1.5 million due to restructuring charges in 2015 for the reorganization of Teekay’s marine operations and corporate services; |
• | an increase of $10.5 million due to lower general and administrative expenses in 2015, primarily as a result of business development fees received from Teekay Offshore in respect of the Petrojarl Knarr FPSO unit, the Arendal Spirit UMS and the six on-the-water, long-distance towing and offshore installation vessels. |
Year Ended December 31, | |||||||||
(in thousands of U.S. dollars, except percentages) | 2015 | 2014 | % Change | ||||||
Interest expense | (242,469 | ) | (208,529 | ) | 16.3 | ||||
Interest income | 5,988 | 6,827 | (12.3 | ) | |||||
Realized and unrealized loss on non-designated derivative instruments | (102,200 | ) | (231,675 | ) | (55.9 | ) | |||
Foreign exchange (loss) gain | (2,195 | ) | 13,431 | (116.3 | ) | ||||
Other income (loss) | 1,566 | (1,152 | ) | (235.9 | ) | ||||
Income tax recovery (expense) | 16,767 | (10,173 | ) | (264.8 | ) |
• | an increase of $37.6 million as a result of the Petrojarl Knarr FPSO unit commencing operations in March 2015; |
• | an increase of $17.0 million due to Teekay Offshore’s borrowings relating to the Suksan Salamander FSO unit (which commenced operations during the third quarter of 2014), the six towing vessels (which delivered throughout 2015), the Arendal Spirit UMS (which commenced operations during the second quarter of 2015) and the $300 million senior unsecured bonds Teekay Offshore issued in May 2014; and |
• | an increase of $15.0 million as a result of further borrowing under a revolving credit facility Teekay Parent entered into in December 2012 partially offset by repayments made near the end of 2015, and additional interest incurred from two term loans which were drawn in 2015 to finance the acquisition of 12 modern Suezmax tankers, one Aframax tanker and four LR2 product tankers acquired by Teekay Tankers during 2015; |
• | a decrease of $10.3 million relating to lower interest expense on our NOK bonds as a result of the depreciation of the NOK against the U.S. Dollar and a decrease in Norwegian InterBank Offered Rate (or NIBOR), maturity of our NOK bond during 2015, partially offset by the issuance of Teekay LNG’s NOK 1,000 million senior unsecured bonds during 2015; |
• | a decrease of $5.1 million due to an increase in capitalized interest as a result of Teekay LNG exercising three newbuilding options with DSME in December 2014 and entering into an additional newbuilding agreement with Daewoo Shipbuilding & Marine Engineering Co. (or DSME) in February 2015 and two additional newbuilding agreements with HHI in June 2015; |
• | a decrease of $3.6 million due to lower interest rates on debt facilities and elimination of interest on capital lease obligations relating to Teekay LNG’s LNG carriers in the Teekay Nakilat Joint Venture upon debt refinancing and termination of capital lease obligations in December 2014; |
• | a decrease of $3.1 million relating to accelerated amortization of Teekay Nakilat Joint Venture’s deferred debt issuance cost upon completion of its debt refinancing in December 2014; |
• | a decrease of $2.6 million relating to capitalized interest on the advances Teekay LNG made to the Yamal LNG Joint Venture in July 2014 to fund its proportionate share of the joint venture’s newbuilding installments; |
• | a decrease of $2.6 million due to lower interest expense on Teekay LNG’s capital lease obligations associated with the sales of the Algeciras Spirit and Huelva Spirit conventional tankers in February 2014 and August 2014, respectively; |
• | a decrease of $2.4 million due to lower interest expense on Teekay Parent’s 8.5% bonds as a result of bond repurchases during 2014, partially offset by the issuance of an additional $200 million of Teekay Parent’s 8.5% bonds in November 2015; |
• | a decrease of $2.0 million due to an increase in capitalized interest on Teekay Offshore’s newbuildings; |
• | a decrease of $1.7 million due to the impact of a decrease in EURIBOR and depreciation of the Euro against the U.S. Dollar on Teekay LNG’s Euro-denominated debt facilities; and |
• | a decrease of $1.5 million mainly due to the sale of four Suezmax crude oil tankers along with their related debt facilities from Teekay Parent to TIL during February 2014. |
Year Ended December 31, | ||||||
(in thousands of U.S. Dollars) | 2015 | 2014 | ||||
Realized losses relating to: | ||||||
Interest rate swap agreements | (108,036 | ) | (125,424 | ) | ||
Interest rate swap agreement terminations | (10,876 | ) | (1,319 | ) | ||
Foreign currency forward contracts | (21,607 | ) | (4,436 | ) | ||
(140,519 | ) | (131,179 | ) | |||
Unrealized gains (losses) relating to: | ||||||
Interest rate swap agreements | 37,723 | (86,045 | ) | |||
Foreign currency forward contracts | (418 | ) | (16,926 | ) | ||
Stock purchase warrants | 1,014 | 2,475 | ||||
38,319 | (100,496 | ) | ||||
Total realized and unrealized losses on derivative instruments | (102,200 | ) | (231,675 | ) |
• | refinancing three existing debt facilities, including $150 million relating to Teekay Parent’s equity margin revolving credit facility, $150 million of an existing revolving credit facility relating to Teekay Parent’s three directly-owned FPSO units, and $50 million of an existing debt facility relating to the Shoshone Spirit VLCC; |
• | selling Teekay Parent’s 50% interest in three infield support vessel tugs for Royal Dutch Shell’s Prelude FLNG unit; and |
• | issuing $100 million of common shares at a price of $8.32 per share to a group of institutional investors and two entities established by Teekay Parent's founder, including Resolute Investments, Inc. (or Resolute), Teekay Parent's largest shareholder. |
• | obtaining additional bank financing, including a $250 million debt facility for the three East Coast of Canada newbuilding shuttle tankers, a $40 million debt facility for six previously un-mortgaged vessels, and a new $35 million tranche added to an existing debt facility secured by two shuttle tankers; |
• | extending $75 million of the outstanding principal amount of an existing revolving credit facility financing for the Petrojarl Varg FPSO unit until late-2017; |
• | extending the majority of the principal maturity payments to late-2018 for two of Teekay Offshore's existing NOK senior unsecured bonds, previously due in January 2017 and January 2018, and agreeing to pay a portion of the outstanding principal amount of these bonds in October 2016, October 2017 and January 2018; |
• | agreeing with Teekay to pay, all distributions on Teekay Offshore's common units to Teekay Parent, including distributions to Teekay Offshore's general partner, in common units, instead of cash, until Teekay Offshore's NOK bonds maturing in 2018 have been fully repaid; |
• | agreeing that, until Teekay Offshore's NOK bonds maturing in 2018 have been repaid, Teekay Offshore will only pay distributions in cash to third party holders of its common units if the amount of the cash distributions is matched or exceeded by the proceeds raised through the issuance of additional equity in advance of, or within six months following, the payment of such distributions; |
• | extending to January 2019 the maturity date of $200 million in obligations owing to Teekay Parent under the terms of a subordinated promissory note, which bears interest at the rate of 10.0% per annum, one half of which will be paid in cash, and the other half of which will be paid in Teekay Offshore's common units or from the proceeds of the sale of equity securities; |
• | issuing $200 million of equity, consisting of (i) $100 million of Teekay Offshore's Series D Preferred Units (with a two-year option to pay quarterly distributions in common units rather than cash) plus 4.5 million common unit warrants with an exercise price of $4.55 per common unit and 2.25 million common unit warrants with an exercise price of $6.05 per common unit, and (ii) $100 million of common units at a price of $4.55 per unit; |
• | cancelling, by Teekay Offshore's subsidiary Logitel, the shipbuilding contracts for the two remaining UMS newbuildings; and |
• | amending the terms of certain interest rate swaps to defer the counterparties’ early termination options and extending and increasing the threshold of existing cross currency swaps related to Teekay Offshore's two NOK bonds that have been extended as part of these initiatives. |
Year Ended December 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Net operating cash flows | 620,120 | 770,309 | 446,317 | ||||||
Net financing cash flows | (555,305 | ) | 924,457 | 726,761 | |||||
Net investing cash flows | (175,213 | ) | (1,823,278 | ) | (980,834 | ) |
Total | 2017 | 2018 | 2019 | 2020 | 2021 | Beyond 2021 | |||||||||||||||
In millions of U.S. Dollars | |||||||||||||||||||||
Teekay Offshore | |||||||||||||||||||||
Bond repayments (1) (2) | 556.9 | 20.8 | 120.4 | 415.7 | — | — | — | ||||||||||||||
Scheduled repayments of long-term debt (1) | 1,993.7 | 348.2 | 412.0 | 332.7 | 243.1 | 220.0 | 437.7 | ||||||||||||||
Repayments on maturity of long-term debt (1) | 687.1 | 219.7 | 154.1 | 25.0 | 40.0 | 14.9 | 233.4 | ||||||||||||||
Subordinated promissory note - repayment on maturity (3) | 200.0 | — | — | 200.0 | — | — | — | ||||||||||||||
Chartered-in vessels (operating leases) | 122.3 | 69.7 | 35.4 | 17.2 | — | — | — | ||||||||||||||
Newbuildings installments/conversion costs(4) | 671.0 | 600.4 | 70.6 | — | — | — | — | ||||||||||||||
4,231.0 | 1,258.8 | 792.5 | 990.6 | 283.1 | 234.9 | 671.1 | |||||||||||||||
Teekay LNG | |||||||||||||||||||||
Bond repayments (2) (5) | 371.3 | 47.3 | 104.2 | — | 115.7 | 104.1 | — | ||||||||||||||
Scheduled repayments of long-term debt (2) (6) | 539.7 | 117.8 | 97.4 | 62.1 | 62.3 | 41.4 | 158.7 | ||||||||||||||
Repayments on maturity of long-term debt (2) (6) (7) | 893.5 | 25.0 | 518.2 | 20.4 | — | 142.9 | 187.0 | ||||||||||||||
Commitments under capital leases (8) | 536.3 | 61.0 | 57.3 | 30.1 | 30.1 | 30.1 | 327.7 | ||||||||||||||
Commitments under operating leases (9) | 295.5 | 24.1 | 24.1 | 24.1 | 24.1 | 24.1 | 175.0 | ||||||||||||||
Newbuildings installments/shipbuilding supervision (10) | 2,876.9 | 1,050.0 | 1,067.2 | 561.1 | 198.6 | — | — | ||||||||||||||
5,513.2 | 1,325.2 | 1,868.4 | 697.8 | 430.8 | 342.6 | 848.4 | |||||||||||||||
Teekay Tankers | |||||||||||||||||||||
Scheduled repayments of long-term debt (11) | 455.0 | 122.3 | 110.1 | 110.0 | 110.0 | 2.6 | — | ||||||||||||||
Repayments on maturity of long-term debt (11) | 486.7 | 49.1 | 65.5 | — | — | 372.1 | — | ||||||||||||||
Chartered-in vessels (operating leases) (12) | 53.1 | 26.8 | 8.3 | 8.3 | 8.3 | 1.4 | — | ||||||||||||||
994.8 | 198.2 | 183.9 | 118.3 | 118.3 | 376.1 | — | |||||||||||||||
Teekay Parent | |||||||||||||||||||||
Bond repayments (13) | 592.7 | — | — | — | 592.7 | — | — | ||||||||||||||
Scheduled repayments of long-term debt (13) | 106.6 | 53.3 | 53.3 | — | — | — | — | ||||||||||||||
Repayments on maturity of long-term debt (13) | 46.9 | — | 46.9 | — | — | — | — | ||||||||||||||
Chartered-in vessels (operating leases) (14) | 9.5 | 9.1 | 0.4 | — | — | — | — | ||||||||||||||
Asset retirement obligation | 23.0 | — | 23.0 | — | — | — | — | ||||||||||||||
778.7 | 62.4 | 123.6 | — | 592.7 | — | — | |||||||||||||||
Total | 11,517.7 | 2,844.6 | 2,968.4 | 1,806.7 | 1,424.9 | 953.6 | 1,519.5 |
(1) | Excludes expected interest payments of $108.4 million (2017), $89.6 million (2018), $53.7 million (2019), $32.5 million (2020), $24.7 million (2021) and $34.0 million (beyond 2021). Expected interest payments are based on existing interest rates (fixed-rate loans) and LIBOR or NIBOR as at December 31, 2016, plus margins which ranged between 0.30% and 5.75% (variable rate loans) as at December 31, 2016. The expected interest payments do not reflect the effect of related interest rate swaps and cross currency swaps that Teekay Offshore has used as an economic hedge of certain of its variable rate debt and NOK-denominated obligations. |
(2) | Euro-denominated and NOK-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of December 31, 2016. |
(3) | Consists of the repayment of the $200.0 million subordinated promissory note, issued to a subsidiary of Teekay effective July 1, 2016. The promissory note bears interest at an annual rate of 10.00% on the outstanding principal balance, which is payable quarterly and, one half of which will be paid in cash and the other half of which will be paid in common units or from the proceeds of the sale of equity securities. Excludes maximum expected interest payments of $20.0 million (2017) and $20.0 million (2018). |
(4) | Consists of Teekay Offshore’s estimated remaining payments for the three towing and offshore installation newbuildings, three shuttle tanker newbuildings, its 50% interest in an FPSO conversion for the Libra field, upgrades of the Petrojarl I FPSO unit, and the FSO conversion for the Randgrid shuttle tanker. Teekay Offshore has pre-arranged undrawn financing of approximately $436.8 million relating to its capital expenditure commitments for 2017. |
(5) | Excludes expected interest payments of $15.5 million (2017), $16.8 million (2018), $12.9 million (2019), $10.2 million (2020), and $3.7 million (2021). Expected interest payments are based on NIBOR at December 31, 2016, plus margins that range up to 6.00%, as well as the prevailing U.S. Dollar/NOK exchange rate as of December 31, 2016. The expected interest payments do not reflect the effect of the related cross-currency swaps that Teekay LNG has used as an economic hedge of its foreign exchange and interest rate exposure associated with its NOK-denominated long-term debt. |
(6) | Excludes expected interest payments of $31.3 million (2017), $22.1 million (2018), $13.8 million (2019), $12.7 million (2020), $10.4 million (2021) and $30.0 million (beyond 2021). Expected interest payments reflect the refinancing completed in November 2016 of one of Teekay LNG's revolving credit |
(7) | Upon the completion of the Teekay-LNG Marubeni Joint Venture’s debt refinancing in March 2017, Teekay LNG invested $57.2 million of additional equity into the Teekay-LNG Marubeni Joint Venture through a $44.2 million payment in March 2017 and a $13.0 million payment in April 2017, which is not reflected in the table above. |
(8) | Includes, in addition to lease payments, amounts Teekay LNG may be or is required to pay to purchase the leased vessels at the end of their respective lease terms. For two of Teekay LNG's four capital lease obligations, the lessor has the option to sell two Suezmax tankers under capital lease to Teekay LNG at any time during the remaining lease terms; however, in this table Teekay LNG has assumed the lessor will not exercise its right to sell the two Suezmax tankers to Teekay LNG until after the lease term expires, which is during the years 2017 and 2018. The purchase price for any Suezmax tanker Teekay LNG is required to purchase would be based on the unamortized portion of the vessel construction financing costs for the vessels, which are included in the table above. We expect Teekay LNG to satisfy any such purchase price by assuming the existing vessel financing, although it may be required to obtain separate debt or equity financing to complete any purchases if the lenders do not consent to its assuming the financing obligations. |
(9) | Teekay LNG has corresponding leases whereby it is the lessor and expects to receive approximately $260.3 million under those leases from 2017 to 2029. |
(10) | As of December 31, 2016, Teekay LNG has agreements for the construction of nine wholly-owned LNG carrier newbuildings, for which the estimated remaining costs for these newbuildings totaled $1.5 billion, including estimated interest and construction supervision fees. Teekay LNG has secured $682.8 million of financing related to the commitments for four of the LNG carrier newbuildings included in the table above. |
(11) | Excludes expected interest payments of $22.6 million (2017), $18.7 million (2018), $15.2 million (2019), $12.2 million (2020) and $5.3 million (2021). Expected interest payments are based on the existing interest rates for variable-rate loans at LIBOR plus margins that range from 0.30% to 2.00% at December 31, 2016. The expected interest payments do not reflect the effect of related interest rate swaps that Teekay Tankers has used to economically hedge certain of its floating-rate debt. |
(12) | Excludes payments required if Teekay Tankers executes all options to extend the terms of in-chartered leases signed as of December 31, 2016. If Teekay Tankers exercises all options to extend the terms of these in-chartered leases, Teekay Tankers would expect total payments of, $43.1 million (2017), $17.7 million (2018), $8.3 million (2019), $8.3 million (2020) and $1.4 million (2021). |
(13) | Excludes expected interest payments of $56.7 million (2017), $52.9 million (2018), $50.4 million (2019), and $25.2 million (2020). Expected interest payments are based on the existing interest rate for a fixed-rate loan at 8.5% and existing interest rates for variable-rate loans that are based on LIBOR plus margins which ranged between 3.95% and 4.0% as at December 31, 2016. The expected interest payments do not reflect the effect of related interest rate swaps that Teekay Parent uses as an economic hedge of certain of its variable rate debt. |
(14) | Excludes internal time-charter-in commitments between Teekay Parent and its subsidiaries, Teekay Offshore and Teekay LNG. |
(in thousands of U.S. dollars, except number of vessels) Type of Vessel________________________________ | Number of Vessels | Market Values (1) $ | Carrying Values $ | ||||||
Shuttle Tankers and HiLoad DP Unit (2) | 2 | 55,297 | 70,444 | ||||||
FPSO Unit (2) | 1 | 244,000 | 244,188 | ||||||
FPSO Units (3) | 2 | 392,000 | 453,701 | ||||||
Liquefied Natural Gas Carriers (3) | 2 | 73,306 | 150,570 | ||||||
Liquefied Petroleum Gas Carriers (3) | 6 | 171,156 | 191,281 | ||||||
Conventional Tankers (2) | 12 | 160,200 | 278,159 | ||||||
Conventional Tankers (3) | 32 | 856,476 | 1,403,661 |
(1) | Market values are based on second-hand market comparable values or using a depreciated replacement cost approach as at December 31, 2016. Since vessel values can be volatile, our estimates of market value may not be indicative of either the current or future prices we could obtain if we sold any of the vessels. In addition, the determination of estimated market values for our shuttle tankers, FSO units and FPSO units may involve considerable judgment, given the illiquidity of the second-hand market for these types of vessels. The estimated market values for the HiLoad DP unit in the table above was based on the present value of expected future cash flows given that there are no market comparable values for this unit. The estimated market values for the FSO units in the table above were based on second-hand market comparable values for similar vessels. Given the advanced age of these vessels, the estimated market values substantially reflect the price of steel and amount of steel in the vessel. The estimated market values for the shuttle tankers were based on second-hand market comparable values for conventional tankers of similar age and size, adjusted for shuttle tanker specific functionality. |
(2) | Undiscounted cash flows for these vessels are marginally greater than their carrying values. |
(3) | Undiscounted cash flows for these vessels are significantly greater than their carrying values. |
Item 6. | Directors, Senior Management and Employees |
Name | Age | Position | ||
C. Sean Day | 67 | Director and Chair of the Board (1) | ||
Axel Karlshoej | 76 | Director and Chair Emeritus | ||
Peter S. Janson | 69 | Director | ||
Thomas Kuo-Yuen Hsu | 70 | Director | ||
Eileen A. Mercier | 69 | Director | ||
Bjorn Moller | 59 | Director | ||
Tore I. Sandvold | 69 | Director | ||
Alan Semple | 57 | Director | ||
Bill Utt | 59 | Director (2) | ||
Kenneth Hvid | 48 | President and Chief Executive Officer | ||
Arthur Bensler | 59 | Executive Vice President, Secretary and General Counsel | ||
William Hung | 45 | Executive Vice President, Strategic Development | ||
Mark Kremin | 46 | President and Chief Executive Officer, Teekay Gas Group Ltd. | ||
Vincent Lok | 48 | Executive Vice President and Chief Financial Officer | ||
Kevin Mackay | 48 | President and Chief Executive Officer, Teekay Tankers Ltd. | ||
Ingvild Saether | 48 | President and Chief Executive Officer, Teekay Offshore Group Ltd. |
• | the integrity of our consolidated financial statements; |
• | our compliance with legal and regulatory requirements; |
• | the independent auditors’ qualifications and independence; and |
• | the performance of our internal audit function and independent auditors. |
• | reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of these goals and objectives, and determines the Chief Executive Officer’s compensation; |
• | reviews and approves the evaluation process and compensation structure for executive officers, other than the Chief Executive Officer, evaluates their performance and sets their compensation based on this evaluation; |
• | reviews and makes recommendations to the Board regarding compensation for directors; |
• | establishes and administers long-term incentive compensation and equity-based plans; and |
• | oversees our other compensation plans, policies and programs. |
• | identifies individuals qualified to become Board members; |
• | selects and recommends to the Board director and committee member candidates; |
• | develops and recommends to the Board corporate governance principles and policies applicable to us, monitors compliance with these principles and policies and recommends to the Board appropriate changes; and |
• | oversees the evaluation of the Board and management. |
Identity of Person or Group | Shares Owned | Percent of Class | ||
All directors and executive officers as a group (16 persons) (1) | 2,409,490(3) | 2.8% (2) |
(1) | Includes 1,642,330 shares of common stock subject to stock options exercisable as of March 1, 2017 under our equity incentive plans with a weighted-average exercise price of $36.36 that expire between March 7, 2017 and March 11, 2025. Excludes 572,809 shares of common stock subject to stock options that may become exercisable after March 1, 2017 under the plans with a weighted average exercise price of $18.14, that expire between March 12, 2024 and March 9, 2026. Excludes shares held by our largest shareholder, Resolute Investments, Ltd. (or Resolute), whose ultimate parent is Path Spirit Limited (or Path), which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. One of our directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of our directors, Axel Karlshoej, is among the directors of Path. Our Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including those in the Teekay group of companies. Another of our directors, Bjorn Moller, is a director of Kattegat Limited. Also excludes shares beneficially owned by our former Chief Executive Officer and an Executive Committee Member of Teekay Offshore Group Ltd., both whom retired on January 31, 2017. |
(2) | Based on a total of 86.1 million outstanding shares of our common stock as of December 31, 2016. Each director and Executive Officer beneficially owns less than 1% of the outstanding shares of common stock. |
(3) | Each director is expected to have acquired shares having a value of at least four times the value of the annual cash retainer paid to them for their Board service (excluding fees for Chair or Committee service) no later than March 1, 2017 or the fifth anniversary of the date on which the director joined the Board, whichever is later. In addition, each Executive Officer is expected to acquire shares of Teekay’s common stock equivalent in value to one to three times their annual base salary by 2017 or, for executive officers subsequently joining Teekay or achieving a position covered by the guidelines, within five years after the guidelines become applicable to them. |
Item 7. | Major Shareholders and Certain Relationships and Related Party Transactions |
Identity of Person or Group | Shares Owned | Percent of Class (3) | ||
Resolute Investments, Ltd. (1) | 31,936,012 | 37.1% | ||
FMR LLC (2) | 8,474,791 | 9.8% |
(1) | Includes shared voting and shared dispositive power. The ultimate controlling person of Resolute Investments, Ltd. (or Resolute) is Path Spirit Limited (or Path), which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. This information is based in part on the Schedule 13D/A (Amendment No. 8) filed by Resolute and Path with the SEC on July 1, 2016. Resolute’s beneficial ownership was 37.1% on March 1, 2017, and 39.1% on March 1, 2016. One of our directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of our directors, Axel Karlshoej, is among the directors of Path. Our Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including those in the Teekay group of companies. Another of our directors, Bjorn Moller, is a director of Kattegat Limited. |
(2) | Includes sole voting power and sole dispositive power. This information is based on the Schedule 13G filed by this investor with the SEC on February 14, 2017. |
(3) | Based on a total of 86.1 million outstanding shares of our common stock as of March 1, 2017. |
• | first, 98% to all unitholders, pro rata, and 2% to the general partner, until each unitholder has received a total of $0.4025 (Teekay Offshore) or $0.4625 (Teekay LNG) per unit for that quarter; |
• | second, 85% to all unitholders, and 15% to the general partner, until each unitholder has received a total of $0.4375 (Teekay Offshore) or $0.5375 (Teekay LNG) per unit for that quarter; |
• | third, 75% to all unitholders, and 25% to the general partner, until each unitholder has received a total of $0.525 (Teekay Offshore) or $0.65 (Teekay LNG) per unit for that quarter; and |
• | thereafter, 50% to all unitholders and 50% to the general partner. |
• | Teekay Parent is obligated to offer to sell the Petrojarl Foinaven FPSO unit to Teekay Offshore, subject to approvals required from the charterer. The purchase price for the Foinaven FPSO unit would be its fair market value plus any additional tax or other similar costs to Teekay Petrojarl that would be required to transfer the FPSO unit to Teekay Offshore. |
• | Teekay Parent owns two additional FPSO units and the Hummingbird Spirit FPSO unit, which we will be obligated to offer to Teekay Offshore in the future under the omnibus agreement following the commencement of a charter contract with a firm period of greater than three years' duration (which is not currently the case), and the Petrojarl Banff, which in January 2015 had a charter rate reset which caused the unit to qualify to be offered to Teekay Offshore under the omnibus agreement. |
• | During 2016, one (four in 2015 and 2014) of Teekay Offshore’s conventional tankers were chartered out to Teekay subsidiaries under long-term time charters. Two of Teekay Offshore’s shuttle tankers are chartered out to Teekay subsidiaries under long-term bareboat charters. Pursuant to these charter contracts, Teekay Offshore earned voyage revenues of $30.6 million, $53.8 million, and $56.5 million, respectively, for 2016, 2015, and 2014. |
• | During 2016, three (three in 2015 and 2014) of Teekay Offshore’s FSO units were chartered out to Teekay subsidiaries under long-term bareboat charters. Pursuant to these charter contracts, Teekay Offshore earned voyage revenues of $15.1 million, $13.6 million, and $10.5 million, respectively, for 2016, 2015, and 2014. |
• | Since April 2008, Teekay has chartered in from Teekay LNG the LNG carriers Arctic Spirit and Polar Spirit under a fixed-rate time charter for a period of ten years, plus options exercisable by Teekay to extend up to an additional 15 years. During 2016, 2015, and 2014, Teekay LNG earned revenues of $37.3 million, $35.9 million, and $37.6 million, respectively, under these time-charter contracts. |
Item 8. | Financial Information |
Item 9. | The Offer and Listing |
Years Ended | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||||||||||
High | $11.85 | $51.39 | $67.98 | $48.13 | $36.60 | |||||||||||||
Low | $4.37 | $6.65 | $44.01 | $32.49 | $24.89 | |||||||||||||
Quarters Ended | Mar. 31, 2017 | Dec. 31, 2016 | Sept. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |||||||||
High | $11.77 | $8.95 | $8.22 | $11.85 | $10.23 | $35.93 | $44.58 | $51.39 | $51.20 | |||||||||
Low | $8.21 | $5.76 | $5.45 | $6.69 | $4.37 | $6.65 | $28.36 | $42.22 | $41.12 | |||||||||
Months Ended | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 | Oct. 31, 2016 | ||||||||||||
High | $10.26 | $11.15 | $11.77 | $8.95 | $8.38 | $8.84 | ||||||||||||
Low | $8.70 | $8.82 | $8.21 | $7.74 | $5.76 | $6.50 |
Item 10. | Additional Information |
(a) | Agreement, dated June 26, 2003, for a $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. |
(b) | Agreement, dated September 1, 2004 for a $500,000,000 Credit Facility Agreement to be made available to Teekay Nordic Holdings Incorporated by Nordea Bank Finland PLC, New York Branch. |
(c) | Supplemental Agreement dated September 30, 2004 to Agreement, dated June 26, 2003, for a $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. |
(d) | Agreement, dated May 26, 2005 for a $550,000,000 Credit Facility Agreement to be made available to Avalon Spirit LLC et al by Nordea Bank Finland PLC and others. |
(e) | Agreement, dated October 2, 2006 for a $940,000,000 Secured Reducing Revolving Loan Facility among Teekay Offshore Operating L.P., Den Norske Bank ASA and various other banks. Please read Note 7 to the Consolidated Financial Statements of Teekay Corporation included herein for a summary of certain contract terms relating to our loan facilities. |
(f) | Agreement, dated August 23, 2006 for a $330,000,000 Secured Reducing Revolving Loan Facility among Teekay LNG Partners L.P., ING Bank N.V. and various other banks. Please read Note 7 to the Consolidated Financial Statements of Teekay Corporation included herein for a summary of certain contract terms relating to our loan facilities. |
(g) | Agreement, dated November 28, 2007 for a $845,000,000 Secured Reducing Revolving Loan Facility among Teekay Corporation, Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks. |
(h) | Agreement dated May 16, 2007 for a $700,000,000 Credit Facility Agreement to be made available to Teekay Acquisition Holdings LLC et al by HSH NordBank AG and others. |
(i) | Annual Executive Bonus Plan. |
(j) | Amended 2003 Equity Incentive Plan. |
(k) | Amended 1995 Stock Option Plan. |
(l) | Amended and Restated Rights Agreement, dated as of July 2, 2010, between Teekay Corporation and The Bank of New York, as Rights Agent. |
(m) | Amended and Restated Omnibus Agreement dated as of December 19, 2006, among Teekay Corporation, Teekay GP L.L.C., Teekay LNG Partners L.P., Teekay LNG Operating L.L.C., Teekay Offshore GP L.L.C., Teekay Offshore Partners L.P., Teekay Offshore Operating GP. L.L.C. and Teekay Offshore Operating L.P. govern, among other things, when Teekay Corporation, Teekay LNG L.P. and Teekay Offshore L.P. may compete with each other and to provide the applicable parties certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. |
(n) | Indenture dated January 27, 2010 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for $450,000,000 8.5% Senior Unsecured Notes due 2020. |
(o) | Agreement, dated October 5, 2012, for NOK 700,000,000 Senior Unsecured Bonds due October 2015, among us and Norsk Tillitsmann ASA. All payments are at NIBOR plus 4.75% per annum. |
(p) | 2013 Equity Incentive Plan. |
(q) | Agreement, dated December 21, 2012 for a $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. |
(r) | Amendment Agreement, dated December 18, 2013 for a $300,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. |
(s) | Agreement, dated February 24, 2014 for a $815,000,000 Secure Term Loan Facility Agreement among Knarr L.L.C., Citibank, N.A. and others. |
(t) | Agreement dated July 7, 2014; between Teekay LNG Operating L.L.C. and China LNG Shipping (Holdings) Limited to form TC LNG Shipping L.L.C. in connection with the Yamal LNG Project. |
(u) | Agreement dated December 17, 2014, for a $450,000,000 secured loan facility between Nakilat Holdco L.L.C. and Qatar National Bank SAQ. The loan bears interest at LIBOR plus a margin of 1.85%. The facility requires quarterly repayments, with a bullet payment in 2026. |
(v) | Amendment Agreement No. 2, dated December 19, 2014 for a $500,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. |
(w) | Amendment Agreement No. 3, dated October 5, 2015 for a $500,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. |
(x) | Amendment Agreement No. 4, dated December 17, 2015 for a $300,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. |
(y) | First Supplemental Indenture dated November 16, 2015 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for $200,000,000 8.5% Senior Unsecured Notes due 2021. |
(z) | Agreement, dated July 31, 2015, among OOGTK Libra GmbH & Co KG, ABN AMRO Bank N.V. and various other banks for a $803,711,786.92 term loan due 2027. |
(aa) | Purchase Agreement, dated as of November 10, 2015, between Teekay Corporation and J.P. Morgan Securities LLC, for itself and on behalf of the several initial purchasers listed in Schedule 1 thereto. |
(ab) | Registration Rights Agreement, dated November 16, 2015 by and among Teekay Corporation and J.P. Morgan Securities LLC, for itself and as representative of the several initial purchasers listed in Schedule 1 thereto. |
(ac) | Secured Term Loan and Revolving Credit Facility Agreement dated January 8, 2016 between Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks, for a $894.4 million long-term debt facility, consisting of both a term loan and a revolving credit facility, which is scheduled to mature in January 2021. |
(ad) | Share Purchase Agreement, dated May 18, 2016, by and among Teekay Corporation and the purchasers named therein. |
(ae) | Registration Rights Agreement, dated June 29, 2016, by and among Teekay Corporation and the investors named therein. |
(af) | Equity Distribution Agreement, dated September 9, 2016, between Teekay Corporation and Citigroup Global Markets Inc. |
• | dealers in securities or currencies, |
• | traders in securities that have elected the mark-to-market method of accounting for their securities, |
• | persons whose functional currency is not the U.S. dollar, |
• | persons holding our common stock as part of a hedge, straddle, conversion or other “synthetic security” or integrated transaction, |
• | certain U.S. expatriates, |
• | financial institutions, |
• | insurance companies, |
• | persons subject to the alternative minimum tax, |
• | persons that actually or under applicable constructive ownership rules own 10% or more of our common stock; and |
• | entities that are tax-exempt for U.S. federal income tax purposes. |
• | the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for our common stock; |
• | the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income in the current taxable year; |
• | the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayer for that year; and |
• | an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
• | fails to timely provide an accurate taxpayer identification number; |
• | is notified by the IRS that it has failed to report all interest or distributions required to be shown on its U.S. federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
Contract Amount in Foreign Currency (1) | Average Forward Rate (2) | Fair Value / Carrying Amount of Asset (Liability) (3) $ | Expected Maturity | ||||||||||||
2016 (3) $ | 2017 (3) $ | ||||||||||||||
Euro | 13,750 | 0.92 | (304 | ) | 14,879 | — | |||||||||
Norwegian Kroner | 610,000 | 8.31 | (2,689 | ) | 60,677 | 12,719 | |||||||||
(2,993 | ) | 75,556 | 12,719 |
(1) | Foreign currency contract amounts in thousands. |
(2) | Average forward rate represents the contractual amount of foreign currency one U.S. Dollar will buy. |
(3) | Contract amounts and fair value amounts in thousands of U.S. Dollars. |
Notional Amount NOK (1) | Notional Amount USD (1) | Floating Rate Receivable | Fixed Rate Payable | |||||||||
Reference Rate | Margin | Fair Value (1) $ | Remaining Term (years) | |||||||||
408,500 | 72,946 | NIBOR | 5.25% | 6.88% | (26,417) | 0.3 | ||||||
420,000 (2) (3) | 70,946 | NIBOR | 5.75% | 8.84% | (25,821) | 1.9 | ||||||
800,000 (2) (4) | 143,536 | NIBOR | 5.75% | 7.58% | (56,272) | 2.0 | ||||||
900,000 | 110,400 | NIBOR | 6.00% | 7.72% | (3,814) | 4.8 | ||||||
900,000 | 150,000 | NIBOR | 4.35% | 6.43% | (49,655) | 1.7 | ||||||
1,000,000 | 162,200 | NIBOR | 4.25% | 7.45% | (55,286) | 2.1 | ||||||
1,000,000 | 134,000 | NIBOR | 3.70% | 5.92% | (19,900) | 3.4 | ||||||
(237,165) |
(1) | In thousands of Norwegian Kroner and U.S. Dollars. |
(2) | Notional amount reduces equally with NOK bond repayments. |
(3) | Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 7.2 million for 1.2 million. |
(4) | Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 19.2 million for 3.4 million. |
Expected Maturity Date | |||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | Fair Value Asset / (Liability) | Rate (1) | |||||||||||||||||||
(in millions of U.S. dollars) | |||||||||||||||||||||||||||
Long-Term Debt: | |||||||||||||||||||||||||||
Variable Rate ($U.S.) (2) | 907.0 | 1,307.5 | 513.9 | 420.0 | 754.1 | 862.0 | 4,764.5 | (4,577.0 | ) | 2.8 | % | ||||||||||||||||
Variable Rate (Euro) (3) (4) | 15.6 | 124.8 | 8.9 | 9.6 | 10.3 | 50.5 | 219.7 | (209.8 | ) | 1.2 | % | ||||||||||||||||
Variable Rate (NOK) (4) (5) | 68.1 | 224.5 | 115.7 | 115.7 | 104.2 | — | 628.3 | (594.5 | ) | 6.0 | % | ||||||||||||||||
Fixed-Rate Debt ($U.S.) | 12.7 | 25.3 | 327.3 | 618.5 | 29.5 | 104.3 | 1,117.7 | (1,038.6 | ) | 7.0 | % | ||||||||||||||||
Average Interest Rate | 4.1 | % | 4.2 | % | 5.9 | % | 8.3 | % | 4.3 | % | 4.5 | % | 7.0 | % | |||||||||||||
Capital Lease Obligations | |||||||||||||||||||||||||||
Variable-Rate ($U.S.) (6) | 40.3 | 39.1 | 13.5 | 14.3 | 14.9 | 270.7 | 392.8 | (392.8 | ) | 5.5 | % | ||||||||||||||||
Average Interest Rate (7) | 4.9 | % | 6.1 | % | 5.5 | % | 5.5 | % | 5.5 | % | 5.5 | % | 5.5 | % | |||||||||||||
Interest Rate Swaps: | |||||||||||||||||||||||||||
Contract Amount ($U.S.) (8) | 611.5 | 528.6 | 623.3 | 551.5 | 313.3 | 863.7 | 3,491.9 | (259.7 | ) | 3.2 | % | ||||||||||||||||
Average Fixed Pay Rate (2) | 3.1 | % | 2.6 | % | 3.7 | % | 2.8 | % | 2.1 | % | 4.0 | % | 3.2 | % | |||||||||||||
Contract Amount (Euro) (4) (9) | 15.6 | 124.8 | 8.9 | 9.6 | 10.3 | 50.5 | 219.7 | (34.3 | ) | 3.1 | % | ||||||||||||||||
Average Fixed Pay Rate (3) | 3.1 | % | 2.6 | % | 3.7 | % | 3.7 | % | 3.7 | % | 3.9 | % | 3.1 | % |
(1) | Rate refers to the weighted-average effective interest rate for our long-term debt and capital lease obligations, including the margin we pay on our floating-rate, which, as of December 31, 2016, ranged from 0.3% to 4.0% for U.S. Dollar denominated debt. The average interest rate for our capital lease obligations is the weighted-average interest rate implicit in our lease obligations at the inception of the leases. |
(2) | Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our floating-rate debt. |
(3) | Interest payments on Euro-denominated debt and interest rate swaps are based on EURIBOR. |
(4) | Euro-denominated and NOK-denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of December 31, 2016. |
(5) | Interest payments on our NOK-denominated debt and on our cross currency swaps are based on NIBOR. Our NOK-denominated debt has been economically hedged with cross currency swaps, to swap all interest and principal payments at maturity into U.S. Dollars, with the interest payments fixed at rates between 5.92% to 8.84% and interest rate payments swapped from NIBOR plus margins between 3.70% to 6.00% and the transfer of principal fixed between $70.9 million to $162.2 million upon maturity in exchange for NOK 409 million to NOK 1 billion. |
(6) | The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable. |
(7) | The average interest rate is the weighted-average interest rate implicit in the capital lease obligations at the inception of the leases. Interest rate adjustments on these leases have corresponding adjustments in charter receipts under the terms of the charter contracts to which these leases relate. |
(8) | The average variable receive rate for our interest rate swaps is set quarterly at the 3-month LIBOR or semi-annually at the 6-month LIBOR. The table above does not reflect Teekay LNG's interest rate swaption agreements, whereby Teekay LNG has a one-time option to enter into an interest rate swap at a fixed rate with a third party, and the third party has a one-time option to require Teekay LNG to enter into an interest rate swap at a fixed rate. If Teekay LNG or the third party exercises its option, there will be cash settlements for the fair value of the interest rate swap in lieu of taking delivery of the actual interest rate swap. The net fair value of the interest rate swaption agreements as at December 31, 2016 was a liability of $0.9 million. Includes Teekay Offshore’s six interest rate swaps, which as at December 31, 2016, had a total notional amount of $759.5 million and a total fair value liability of $181.8 million. In the second quarter of 2016, the early termination provisions of Teekay Offshore’s interest rate swaps were extended from the second half of 2016 through the second half of 2017 to early-to-mid-2019. Please read “Item 18 – Financial Statements: Note 14 – Derivative Instruments and Hedging Activities”. |
(9) | The average variable receive rate for our Euro-denominated interest rate swaps is set at 1-month EURIBOR. |
Item 12. | Description of Securities Other than Equity Securities |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
Fees (in thousands of U.S. dollars) | 2016 | 2015 | ||||||
Audit Fees (1) | $ | 3,542 | $ | 3,654 | ||||
Audit-Related Fees (2) | 20 | 24 | ||||||
Tax Fees (3) | 61 | 43 | ||||||
Total | $ | 3,623 | $ | 3,721 |
(1) | Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements, reviews of our quarterly consolidated financial statements and audit services provided in connection with other statutory or regulatory filings for Teekay or our subsidiaries including professional services in connection with the review of our regulatory filings for public offerings of our subsidiaries. Audit fees for 2016 and 2015 include approximately $745,000 and $736,000, respectively, of fees paid to KPMG LLP by Teekay LNG that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay LNG. Audit fees for 2016 and 2015 include approximately $1,136,000 and $1,033,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Offshore that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay Offshore. Audit fees for 2016 and 2015 include approximately $408,000 and $294,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Tankers that were approved by the Audit Committee of the Board of Directors of Teekay Tankers. |
(2) | Audit-related fees consisted primarily of accounting consultations, employee benefit plan audits, services related to business acquisitions, divestitures and other attestation services. |
(3) | For 2016 and 2015, tax fees principally included corporate tax compliance fees. |
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. | Change in Registrant’s Certifying Accountant |
Item 16G. | Corporate Governance |
• | In lieu of obtaining shareholder approval prior to the adoption of equity compensation plans, the board of directors approves such adoption, as permitted by New York Stock Exchange rules for foreign private issuers. |
Item 16H. | Mine Safety Disclosure |
Item 17. | Financial Statements |
Item 18. | Financial Statements |
Item 19. | Exhibits |
1.1 | Amended and Restated Articles of Incorporation of Teekay Corporation. (13) |
1.2 | Articles of Amendment of Articles of Incorporation of Teekay Corporation. (13) |
1.3 | Amended and Restated Bylaws of Teekay Corporation. (1) |
2.1 | Registration Rights Agreement among Teekay Corporation, Tradewinds Trust Co. Ltd., as Trustee for the Cirrus Trust, and Worldwide Trust Services Ltd., as Trustee for the JTK Trust. (2) |
2.2 | Specimen of Teekay Corporation Common Stock Certificate. (2) |
2.8 | Indenture dated as of January 27, 2010 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for $450,000,000 8.5% Senior Notes due 2020. (14) |
2.9 | Agreement, dated October 5, 2012, for NOK 700,000,000 Senior Unsecured Bonds due October 2015, among us and Norsk Tillitsmann ASA. (18) |
2.10 | First Supplemental Indenture dated November 16, 2015 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for $200,000,000 8.5% Senior Unsecured Notes due 2021. (22) |
4.1 | 1995 Stock Option Plan. (2) |
4.2 | Amendment to 1995 Stock Option Plan. (3) |
4.3 | Amended 1995 Stock Option Plan. (4) |
4.4 | Amended 2003 Equity Incentive Plan. (16) |
4.5 | Annual Executive Bonus Plan. (5) |
4.7 | Form of Indemnification Agreement between Teekay and each of its officers and directors. (2) |
4.8 | Amended Rights Agreement, dated as of July 2, 2010 between Teekay Corporation and The Bank of New York, as Rights Agent. (7) |
4.9 | Agreement dated June 26, 2003 for a $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. (8) |
4.10 | Agreement dated September 1, 2004 for a $500,000,000 Credit Facility Agreement to be made available to Teekay Nordic Holdings Incorporated by Nordea Bank Finland PLC. (5) |
4.11 | Supplemental Agreement dated September 30, 2004 to Agreement dated June 26, 2003, for a $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. (5) |
4.12 | Agreement dated May 26, 2005 for a $550,000,000 Credit Facility Agreement to be made available to Avalon Spirit LLC et al by Nordea Bank Finland PLC and others. (6) |
4.13 | Agreement dated October 2, 2006, for a $940,000,000 Secured Reducing Revolving Loan Facility among Teekay Offshore Operating L.P., Den Norske Bank ASA and various other banks. (9) |
4.14 | Agreement dated August 23, 2006, for a $330,000,000 Secured Reducing Revolving Loan Facility among Teekay LNG Partners L.P., ING Bank N.V. and various other banks. (9) |
4.15 | Agreement, dated November 28, 2007 for a $845,000,000 Secured Reducing Revolving Loan Facility among Teekay Corporation, Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks. (10) |
4.16 | Agreement dated May 16, 2007 for a $700,000,000 Credit Facility Agreement to be made available to Teekay Acquisition Holdings L.L.C. et al by HSH NordBank AG and others. (11) |
4.17 | Amended and Restated Omnibus Agreement dated as of December 19, 2006, among Teekay Corporation, Teekay GP L.L.C., Teekay LNG Partners L.P., Teekay LNG Operating L.L.C., Teekay Offshore GP L.L.C., Teekay Offshore Partners L.P., Teekay Offshore Operating GP. L.L.C. and Teekay Offshore Operating L.P. (12) |
4.18 | 2013 Equity Incentive Plan. (15) |
4.19 | Agreement, dated December 21, 2012 for a $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (17) |
4.20 | Amendment Agreement, dated December 18, 2013 for a $300,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (19) |
4.21 | Agreement, dated February 24, 2014 for a $815,000,000 Secure Term Loan Facility Agreement among Knarr L.L.C., Citibank, N.A. and others. (20) |
4.22 | Agreement dated July 7, 2014; Teekay LNG Operating L.L.C. entered into a shareholder agreement with China LNG Shipping (Holdings) Limited to form TC LNG Shipping L.L.C in connection with the Yamal LNG Project. (21) |
4.23 | Agreement dated December 17, 2014, for a $450,000,000 secured loan facility between Nakilat Holdco L.L.C. and Qatar National Bank SAQ. (21) |
4.24 | Amendment Agreement No. 2, dated December 19, 2014 for a $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (21) |
4.25 | Amendment Agreement No. 3, dated October 5, 2015 for a $500,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (22) |
4.26 | Amendment Agreement No. 4, dated December 17, 2015 for a $500,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (22) |
4.27 | Agreement, dated July 31, 2015, among OOGTK Libra GmbH & Co KG, ABN AMRO Bank N.V. and various other banks for a $803,711,786.92 term loan due 2027. (22) |
4.28 | Purchase Agreement, dated as of November 10, 2015, between Teekay Corporation and J.P. Morgan Securities LLC, for itself and on behalf of the several initial purchasers listed in Schedule 1 thereto. (22) |
4.29 | Registration Rights Agreement, dated November 16, 2015 by and among Teekay Corporation and J.P. Morgan Securities LLC, for itself and as representative of the several initial purchasers listed in Schedule 1 thereto. (22) |
4.30 | Secured Term Loan and Revolving Credit Facility Agreement dated January 8, 2016 between Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks, for a $894.4 million long-term debt facility. (22) |
4.31 | Share Purchase Agreement, dated May 18, 2016, by and among Teekay Corporation and the purchasers named therein.(23) |
4.32 | Registration Rights Agreement, dated June 29, 2016, by and among Teekay Corporation and the investors named therein.(23) |
4.33 | Equity Distribution Agreement, dated September 9, 2016, between Teekay Corporation and Citigroup Global Markets Inc.(24) |
8.1 | List of Subsidiaries. |
12.1 | Rule 13a-14(a)/15d-14(a) Certification of Teekay’s Chief Executive Officer. |
12.2 | Rule 13a-14(a)/15d-14(a) Certification of Teekay’s Chief Financial Officer. |
13.1 | Teekay Corporation Certification of Kenneth Hvid, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
13.2 | Teekay Corporation Certification of Vincent Lok, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
23.1 | Consent of KPMG LLP, as independent registered public accounting firm. |
23.2 | Consolidated Financial Statements of Exmar LPG BVBA. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
(1) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No.1-12874), filed with the SEC on August 31, 2011, and hereby incorporated by reference to such Report. |
(2) | Previously filed as an exhibit to the Company’s Registration Statement on Form F-1 (Registration No. 33-7573-4), filed with the SEC on July 14, 1995, and hereby incorporated by reference to such Registration Statement. |
(3) | Previously filed as an exhibit to the Company’s Form 6-K (File No.1-12874), filed with the SEC on May 2, 2000, and hereby incorporated by reference to such Report. |
(4) | Previously filed as an exhibit to the Company’s Annual Report on Form 20-F (File No.1-12874), filed with the SEC on April 2, 2001, and hereby incorporated by reference to such Report. |
(5) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 8, 2005, and hereby incorporated by reference to such Report. |
(6) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 10, 2006, and hereby incorporated by reference to such Report. |
(7) | Previously filed as an exhibit to the Company’s Form 8-A/A (File No.1-12874), filed with the SEC on July 2, 2010, and hereby incorporated by reference to such Report. |
(8) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on August 14, 2003, and hereby incorporated by reference to such Report. |
(9) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on December 21, 2006, and hereby incorporated by reference to such Report. |
(10) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 11, 2008, and hereby incorporated by reference to such Report. |
(11) | Previously filed as an exhibit to the Company’s Schedule TO – T/A, filed with the SEC on May 18, 2007, and hereby incorporated by reference to such schedule. |
(12) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 19, 2007, and hereby incorporated by reference to such Report. |
(13) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 7, 2009, and hereby incorporated by reference to such Report. |
(14) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on January 27, 2010, and hereby incorporated by reference to such Report. |
(15) | Previously filed as an exhibit to the Company’s Registration Statement on Form S-8 (Registration No. 333-187142), filed with the SEC on March 8, 2013, and hereby incorporated by reference to such Registration Statement. |
(16) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 25, 2012, and hereby incorporated by reference to such Report. |
(17) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 29, 2013, and hereby incorporated by reference to such Report. |
(18) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 28, 2014, and hereby incorporated by reference to such Report. |
(19) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 28, 2014, and hereby incorporated by reference to such Report. |
(20) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on September 2, 2014, and hereby incorporated by reference to such Report. |
(21) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 29, 2015, and hereby incorporated by reference to such Report. |
(22) | Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 26, 2016, and hereby incorporated by reference to such Report. |
(23) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on June 30, 2016, and hereby incorporated by reference to such Report. |
(24) | Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on September 9, 2016, and hereby incorporated by reference to such Report. |
TEEKAY CORPORATION | ||
By: | /s/ Vincent Lok | |
Vincent Lok | ||
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
/s/ KPMG LLP |
Chartered Professional Accountants |
Vancouver, Canada |
April 12, 2017 |
/s/ KPMG LLP |
Chartered Professional Accountants |
Vancouver, Canada |
April 12, 2017 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | |||||||
Revenues | 2,328,569 | 2,450,382 | 1,993,920 | ||||||
Voyage expenses | (138,339 | ) | (115,787 | ) | (127,847 | ) | |||
Vessel operating expenses | (825,024 | ) | (844,039 | ) | (809,319 | ) | |||
Time-charter hire expense | (150,145 | ) | (138,548 | ) | (67,219 | ) | |||
Depreciation and amortization | (571,825 | ) | (509,500 | ) | (422,904 | ) | |||
General and administrative expenses | (119,889 | ) | (133,184 | ) | (140,917 | ) | |||
Asset impairments (note 17a) | (45,796 | ) | (67,744 | ) | — | ||||
Loan loss recoveries (note 17b) | — | — | 2,521 | ||||||
Net (loss) gain on sale of vessels, equipment and other operating assets (note 17c) | (66,450 | ) | (2,431 | ) | 8,750 | ||||
Restructuring charges (note 19) | (26,811 | ) | (14,017 | ) | (9,826 | ) | |||
Income from vessel operations | 384,290 | 625,132 | 427,159 | ||||||
Interest expense | (282,966 | ) | (242,469 | ) | (208,529 | ) | |||
Interest income | 4,821 | 5,988 | 6,827 | ||||||
Realized and unrealized loss on non-designated derivative instruments (note 14) | (35,091 | ) | (102,200 | ) | (231,675 | ) | |||
Equity income (note 22) | 85,639 | 102,871 | 128,114 | ||||||
Foreign exchange (loss) gain (notes 7 and 14) | (6,548 | ) | (2,195 | ) | 13,431 | ||||
Other (loss) income (note 13) | (39,013 | ) | 1,566 | (1,152 | ) | ||||
Net income before income taxes | 111,132 | 388,693 | 134,175 | ||||||
Income tax (expense) recovery (note 20) | (24,468 | ) | 16,767 | (10,173 | ) | ||||
Net income | 86,664 | 405,460 | 124,002 | ||||||
Less: Net income attributable to non-controlling interests (note 1) | (209,846 | ) | (323,309 | ) | (178,759 | ) | |||
Net (loss) income attributable to shareholders of Teekay Corporation | (123,182 | ) | 82,151 | (54,757 | ) | ||||
Per common share of Teekay Corporation (note 18) | |||||||||
• Basic (loss) earnings attributable to shareholders of Teekay Corporation | (1.62 | ) | 1.13 | (0.76 | ) | ||||
• Diluted (loss) earnings attributable to shareholders of Teekay Corporation | (1.62 | ) | 1.12 | (0.76 | ) | ||||
• Cash dividends declared | 0.2200 | 1.7325 | 1.265 | ||||||
Weighted average number of common shares outstanding (note 18) | |||||||||
• Basic | 79,211,154 | 72,665,783 | 72,066,008 | ||||||
• Diluted | 79,211,154 | 73,190,564 | 72,066,008 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | |||||||
Net income | 86,664 | 405,460 | 124,002 | ||||||
Other comprehensive income (loss): | |||||||||
Other comprehensive income (loss) before reclassifications | |||||||||
Unrealized gain (loss) on marketable securities | 47 | (463 | ) | (1,151 | ) | ||||
Unrealized loss on qualifying cash flow hedging instruments | (2,183 | ) | (2,564 | ) | (3,082 | ) | |||
Pension adjustments, net of taxes | 7,594 | 14,178 | (7,637 | ) | |||||
Foreign exchange gain (loss) on currency translation | 179 | (217 | ) | 174 | |||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||
To other income: | |||||||||
Impairment of marketable securities | — | — | 1,322 | ||||||
To general and administrative expenses: | |||||||||
Settlement of defined benefit pension plan | (3,905 | ) | (140 | ) | (3,332 | ) | |||
To equity income: | |||||||||
Realized loss on qualifying cash flow hedging instruments | 3,486 | 2,613 | 1,551 | ||||||
Other comprehensive income (loss) | 5,218 | 13,407 | (12,155 | ) | |||||
Comprehensive income | 91,882 | 418,867 | 111,847 | ||||||
Less: Comprehensive income attributable to non-controlling interests | (211,823 | ) | (323,309 | ) | (177,713 | ) | |||
Comprehensive (loss) income attributable to shareholders of Teekay Corporation | (119,941 | ) | 95,558 | (65,866 | ) |
As at December 31, 2016 $ | As at December 31, 2015 $ | |||||
ASSETS | ||||||
Current | ||||||
Cash and cash equivalents (note 7) | 567,994 | 678,392 | ||||
Restricted cash | 107,672 | 61,818 | ||||
Accounts receivable, including non-trade of $33,924 (2015 - $15,623) and related party balances of $26,471 (2015 - $65,936) | 295,357 | 395,013 | ||||
Assets held for sale (notes 10 and 17) | 61,282 | 55,450 | ||||
Net investment in direct financing leases (note 8) | 154,759 | 26,542 | ||||
Prepaid expenses and other (note 14) | 94,370 | 102,429 | ||||
Total current assets | 1,281,434 | 1,319,644 | ||||
Restricted cash - non-current | 129,576 | 114,619 | ||||
Vessels and equipment (note 7) | ||||||
At cost, less accumulated depreciation of $3,294,021 (2015 - $2,894,097) | 7,666,975 | 8,460,500 | ||||
Vessels under capital leases, at cost, less accumulated amortization of $69,072 (2015 – $56,316) (note 9) | 484,253 | 88,215 | ||||
Advances on newbuilding contracts and conversion costs (note 15a) | 987,658 | 817,878 | ||||
Total vessels and equipment | 9,138,886 | 9,366,593 | ||||
Net investment in direct financing leases - non-current (note 8) | 505,835 | 657,587 | ||||
Loans to equity-accounted investees and joint venture partners, bearing interest between nil and LIBOR plus margins up to 3% (note 22) | 292,209 | 184,390 | ||||
Equity-accounted investments (notes 15b and 22) | 1,010,308 | 905,159 | ||||
Other non-current assets | 190,699 | 232,776 | ||||
Intangible assets – net (note 5) | 89,175 | 111,909 | ||||
Goodwill (note 5) | 176,630 | 168,571 | ||||
Total assets | 12,814,752 | 13,061,248 | ||||
LIABILITIES AND EQUITY | ||||||
Current | ||||||
Accounts payable | 53,507 | 64,212 | ||||
Accrued liabilities and other (notes 6 and 14) | 403,685 | 412,278 | ||||
Current portion of derivative liabilities (note 14) | 115,813 | 267,539 | ||||
Current portion of long-term debt (note 7) | 998,591 | 1,106,104 | ||||
Current obligation under capital leases (note 9) | 40,353 | 4,546 | ||||
Current portion of in-process revenue contracts (note 5) | 34,511 | 32,109 | ||||
Total current liabilities | 1,646,460 | 1,886,788 | ||||
Long-term debt (note 7) | 5,640,955 | 6,277,982 | ||||
Long-term obligation under capital leases (note 9) | 352,486 | 54,581 | ||||
Derivative liabilities (note 14) | 415,041 | 414,084 | ||||
In-process revenue contracts (note 5) | 88,179 | 118,690 | ||||
Other long-term liabilities (note 6) | 333,236 | 352,378 | ||||
Total liabilities | 8,476,357 | 9,104,503 | ||||
Commitments and contingencies (notes 3, 7, 8, 9, 14 and 15) | ||||||
Redeemable non-controlling interest (note 15e) | 249,102 | 255,671 | ||||
Equity | ||||||
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 86,149,975 shares outstanding (2015 – 72,711,371); 86,149,975 shares issued (2015 – 72,711,371)) (note 11) | 887,075 | 775,018 | ||||
Retained earnings | 22,893 | 158,898 | ||||
Non-controlling interest | 3,189,928 | 2,782,049 | ||||
Accumulated other comprehensive loss (note 1) | (10,603 | ) | (14,891 | ) | ||
Total equity | 4,089,293 | 3,701,074 | ||||
Total liabilities and equity | 12,814,752 | 13,061,248 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | |||||||
Cash and cash equivalents provided by (used for) | |||||||||
OPERATING ACTIVITIES | |||||||||
Net income | 86,664 | 405,460 | 124,002 | ||||||
Non-cash items: | |||||||||
Depreciation and amortization | 571,825 | 509,500 | 422,904 | ||||||
Amortization of in-process revenue contracts | (28,109 | ) | (30,085 | ) | (40,939 | ) | |||
Unrealized (gain) loss on derivative instruments | (145,116 | ) | 51,910 | 267,830 | |||||
Loss (gain) on sale of vessels and equipment | 66,450 | 2,431 | (8,750 | ) | |||||
Asset impairments and loan loss provisions | 45,796 | 67,744 | (2,521 | ) | |||||
Equity income, net of dividends received | (47,563 | ) | 3,203 | (94,726 | ) | ||||
Income tax expense (recovery) | 24,468 | (16,767 | ) | 10,173 | |||||
Unrealized foreign exchange gain and other | 53,336 | (142,416 | ) | (217,908 | ) | ||||
Change in operating assets and liabilities (note 16) | 38,333 | (12,291 | ) | 60,631 | |||||
Expenditures for dry docking | (45,964 | ) | (68,380 | ) | (74,379 | ) | |||
Net operating cash flow | 620,120 | 770,309 | 446,317 | ||||||
FINANCING ACTIVITIES | |||||||||
Proceeds from issuance of long-term debt, net of issuance costs | 2,075,014 | 2,452,878 | 3,365,045 | ||||||
Prepayments of long-term debt | (1,872,573 | ) | (554,831 | ) | (1,331,469 | ) | |||
Scheduled repayments of long-term debt | (967,146 | ) | (1,040,292 | ) | (1,291,322 | ) | |||
Repayments of capital lease obligations | (21,595 | ) | (4,423 | ) | (479,115 | ) | |||
(Increase) decrease in restricted cash | (49,079 | ) | (21,005 | ) | 380,953 | ||||
Net proceeds from equity issuances of subsidiaries (note 4) | 327,419 | 575,368 | 452,061 | ||||||
Net proceeds from equity issuance of Teekay Corporation | 105,462 | — | — | ||||||
Equity contribution by joint venture partner | 750 | 5,500 | 27,267 | ||||||
Issuance of Common Stock upon exercise of stock options | — | 1,217 | 55,165 | ||||||
Distribution from subsidiaries to non-controlling interests | (136,151 | ) | (360,392 | ) | (360,820 | ) | |||
Cash dividends paid | (17,406 | ) | (125,881 | ) | (91,004 | ) | |||
Other financing activities | — | (3,682 | ) | — | |||||
Net financing cash flow | (555,305 | ) | 924,457 | 726,761 | |||||
INVESTING ACTIVITIES | |||||||||
Expenditures for vessels and equipment | (648,326 | ) | (1,795,901 | ) | (994,931 | ) | |||
Proceeds from sale of vessels and equipment | 252,656 | 20,472 | 180,638 | ||||||
Proceeds from sale-lease back of vessels | 355,306 | — | — | ||||||
Purchase of SPT (net of cash acquired of $377) | — | (46,961 | ) | — | |||||
Purchase of ALP (net of cash acquired of $294) | — | — | (2,322 | ) | |||||
Purchase of Logitel (net of cash acquired of $8,089) | — | — | 4,090 | ||||||
Increase in restricted cash | — | (34,290 | ) | — | |||||
Recovery in term loans | — | — | 4,814 | ||||||
Investment in equity-accounted investees | (61,885 | ) | (40,595 | ) | (79,602 | ) | |||
(Advances to) loan repayments from equity-accounted investees | (96,823 | ) | 53,173 | (87,130 | ) | ||||
Direct financing lease payments received | 23,535 | 20,824 | 22,856 | ||||||
Investment in cost accounted investment | — | — | (25,000 | ) | |||||
Other investing activities | 324 | — | (4,247 | ) | |||||
Net investing cash flow | (175,213 | ) | (1,823,278 | ) | (980,834 | ) | |||
(Decrease) increase in cash and cash equivalents | (110,398 | ) | (128,512 | ) | 192,244 | ||||
Cash and cash equivalents, beginning of the year | 678,392 | 806,904 | 614,660 | ||||||
Cash and cash equivalents, end of the year | 567,994 | 678,392 | 806,904 | ||||||
Supplemental cash flow information (note 16) |
TOTAL EQUITY | ||||||||||||||||||||
Thousands of Shares of Common Stock Outstanding # | Common Stock and Additional Paid-in Capital $ | Retained Earnings $ | Accumul- ated Other Compre- hensive Income (Loss) $ | Non- controlling Interest $ | Total $ | Redeemable Non- controlling Interest $ | ||||||||||||||
Balance at December 31, 2013 | 70,729 | 713,760 | 435,217 | (17,189 | ) | 2,071,262 | 3,203,050 | 16,564 | ||||||||||||
Net (loss) income | (54,757 | ) | 178,759 | 124,002 | ||||||||||||||||
Reclassification of redeemable non-controlling interest in net income | (7,777 | ) | (7,777 | ) | 7,777 | |||||||||||||||
Other comprehensive loss | (11,109 | ) | (1,046 | ) | (12,155 | ) | ||||||||||||||
Dividends declared | (93,021 | ) | (363,685 | ) | (456,706 | ) | (11,499 | ) | ||||||||||||
Reinvested dividends | 1 | 6 | 6 | |||||||||||||||||
Exercise of stock options and other (note 11) | 1,771 | 55,165 | 55,165 | |||||||||||||||||
Employee stock compensation (note 11) | 1,828 | 1,828 | ||||||||||||||||||
Dilution gains on public offerings of Teekay LNG, Teekay Offshore, Teekay Tankers (note 4) | 68,428 | 68,428 | ||||||||||||||||||
Additions to non-controlling interest from share and unit issuances of subsidiaries and other | 412,792 | 412,792 | ||||||||||||||||||
Balance at December 31, 2014 | 72,501 | 770,759 | 355,867 | (28,298 | ) | 2,290,305 | 3,388,633 | 12,842 | ||||||||||||
Net income | 82,151 | 323,309 | 405,460 | |||||||||||||||||
Reclassification of redeemable non-controlling interest in net income | (13,280 | ) | (13,280 | ) | 13,280 | |||||||||||||||
Other comprehensive income | 13,407 | — | 13,407 | |||||||||||||||||
Dividends declared | (126,391 | ) | (354,069 | ) | (480,460 | ) | (20,201 | ) | ||||||||||||
Reinvested dividends | 1 | 10 | 10 | |||||||||||||||||
Exercise of stock options and other (note 11) | 209 | 1,217 | 1,217 | |||||||||||||||||
Employee stock compensation (note 11) | 3,032 | 3,032 | ||||||||||||||||||
Dilution gains on public offerings of Teekay LNG, Teekay Offshore and Teekay Tankers (note 4) | (152,729 | ) | (152,729 | ) | ||||||||||||||||
Additions to non-controlling interest from share and unit issuances of subsidiaries and other | 535,784 | 535,784 | 249,750 | |||||||||||||||||
Balance at December 31, 2015 | 72,711 | 775,018 | 158,898 | (14,891 | ) | 2,782,049 | 3,701,074 | 255,671 | ||||||||||||
Net (loss) income | (123,182 | ) | 209,846 | 86,664 | ||||||||||||||||
Reclassification of redeemable non-controlling interest in net income | (25,342 | ) | (25,342 | ) | 25,342 | |||||||||||||||
Other comprehensive income | 3,241 | 1,977 | 5,218 | |||||||||||||||||
Dividends declared | (17,562 | ) | (120,801 | ) | (138,363 | ) | (27,058 | ) | ||||||||||||
Reinvested dividends | 1 | 4 | 4 | |||||||||||||||||
Employee stock compensation and other (note 11) | 102 | 6,591 | 6,591 | |||||||||||||||||
Equity offerings (note 11) | 13,336 | 105,462 | 105,462 | |||||||||||||||||
Dilution losses on public offerings of Teekay Offshore and Teekay Tankers (note 4) | 9,732 | 9,732 | ||||||||||||||||||
Additions to non-controlling interest from share and unit issuances of subsidiaries and other | (4,993 | ) | 1,047 | 342,199 | 338,253 | (4,853 | ) | |||||||||||||
Balance at December 31, 2016 | 86,150 | 887,075 | 22,893 | (10,603 | ) | 3,189,928 | 4,089,293 | 249,102 |
1. | Summary of Significant Accounting Policies |
Net income (loss) attributable to non-controlling interests | Controlling Interest | Net income (loss) of consolidated partially-owned entities (1) | ||||||||||||||||||||||||
Non-public partially-owned subsidiaries | Preferred unit holders | Distri- buted Earnings(2) | Undistri- buted Earnings | Total Net income (loss) attribut- able | Distri- buted Earnings | Undistri- buted Earnings | Total Controlling Interest (Teekay) | |||||||||||||||||||
Teekay Offshore | 11,858 | 45,835 | 41,688 | (46,155 | ) | 53,226 | 18,378 | (27,129 | ) | (8,751 | ) | 44,475 | ||||||||||||||
Teekay LNG | 17,514 | 2,719 | 30,444 | 60,545 | 111,222 | 15,026 | 31,717 | 46,743 | 157,965 | |||||||||||||||||
Teekay Tankers | — | — | — | 47,459 | 47,459 | — | 14,820 | 14,820 | 62,279 | |||||||||||||||||
Other entities and eliminations | — | — | — | — | (2,061 | ) | ||||||||||||||||||||
For the Year Ended December 31, 2016 | 29,372 | 48,554 | 72,132 | 61,849 | 209,846 | |||||||||||||||||||||
Teekay Offshore | 13,911 | 28,609 | 119,971 | (103,949 | ) | 58,542 | 70,414 | (38,913 | ) | 31,501 | 90,043 | |||||||||||||||
Teekay LNG | 16,627 | — | 120,482 | (1,510 | ) | 135,599 | 82,791 | (880 | ) | 81,911 | 217,510 | |||||||||||||||
Teekay Tankers | — | — | — | 129,725 | 129,725 | — | 47,202 | 47,202 | 176,927 | |||||||||||||||||
Other entities and eliminations | — | — | — | — | (557 | ) | ||||||||||||||||||||
For the Year Ended December 31, 2015 | 30,538 | 28,609 | 240,453 | 24,266 | 323,309 | |||||||||||||||||||||
Teekay Offshore | 10,503 | 10,875 | 136,743 | (150,724 | ) | 7,397 | 71,166 | (60,907 | ) | 10,259 | 17,656 | |||||||||||||||
Teekay LNG | 13,489 | — | 143,292 | (26,116 | ) | 130,665 | 101,946 | (13,684 | ) | 88,262 | 218,927 | |||||||||||||||
Teekay Tankers | — | — | — | 41,048 | 41,048 | — | 16,094 | 16,094 | 57,142 | |||||||||||||||||
Other entities and eliminations | — | — | — | — | (351 | ) | ||||||||||||||||||||
For the Year Ended December 31, 2014 | 23,992 | 10,875 | 280,035 | (135,792 | ) | 178,759 |
(1) | Includes earnings from common shares and preferred shares. |
(2) | Excludes the results of the acquisition of interests in vessels between Teekay Corporation, Teekay Offshore and Teekay Tankers during the periods the vessels were under common control and had begun operations. |
Year Ended December 31, | ||||||||
2016 $ | 2015 $ | 2014 $ | ||||||
Balance at the beginning of the year | 150,702 | 135,331 | 118,194 | |||||
Costs incurred for dry dockings | 47,980 | 69,927 | 74,018 | |||||
Dry-dock amortization | (55,026 | ) | (47,271 | ) | (50,926 | ) | ||
Write-down / sales of vessels | (7,956 | ) | (7,285 | ) | (5,955 | ) | ||
Balance at the end of the year | 135,700 | 150,702 | 135,331 |
December 31, | |||||||||
Class of Financing Receivable | Credit Quality Indicator | Grade | 2016 $ | 2015 $ | |||||
Direct financing leases | Payment activity | Performing | 660,594 | 684,129 | |||||
Other loan receivables | |||||||||
Loans to equity-accounted investees and joint venture partners | Other internal metrics | Performing | 304,030 | 191,517 | |||||
Long-term receivable included in other assets | Payment activity | Performing | 17,712 | 37,032 | |||||
982,336 | 912,678 |
Qualifying Cash Flow Hedging Instruments $ | Pension Adjustments $ | Unrealized (Loss) Gain on Available for Sale Marketable Securities $ | Foreign Exchange Gain (Loss) on Currency Translation $ | Total $ | ||||||||||
Balance as of December 31, 2013 | 17 | (18,919 | ) | (171 | ) | 1,884 | (17,189 | ) | ||||||
Other comprehensive (loss) income | (485 | ) | (10,969 | ) | 171 | 174 | (11,109 | ) | ||||||
Balance as of December 31, 2014 | (468 | ) | (29,888 | ) | — | 2,058 | (28,298 | ) | ||||||
Other comprehensive income (loss) | 49 | 14,038 | (463 | ) | (217 | ) | 13,407 | |||||||
Balance as of December 31, 2015 | (419 | ) | (15,850 | ) | (463 | ) | 1,841 | (14,891 | ) | |||||
Other comprehensive income | 378 | 3,690 | 47 | 173 | 4,288 | |||||||||
Balance as of December 31, 2016 | (41 | ) | (12,160 | ) | (416 | ) | 2,014 | (10,603 | ) |
2. | Segment Reporting |
Revenues (1) | Income from Vessel Operations (2) | ||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Teekay Offshore | |||||||||||||||||
Offshore Logistics | 636,421 | 667,629 | 631,455 | 86,099 | 108,119 | 146,756 | |||||||||||
Offshore Production | 495,223 | 531,554 | 354,518 | 140,264 | 165,152 | 95,991 | |||||||||||
Conventional Tankers | 20,746 | 30,230 | 33,566 | 4,490 | 10,128 | 13,471 | |||||||||||
1,152,390 | 1,229,413 | 1,019,539 | 230,853 | 283,399 | 256,218 | ||||||||||||
Teekay LNG | |||||||||||||||||
Liquefied Gas Carriers | 336,530 | 305,056 | 307,426 | 174,600 | 151,200 | 156,868 | |||||||||||
Conventional Tankers | 59,914 | 92,935 | 95,502 | (21,419 | ) | 30,172 | 26,955 | ||||||||||
396,444 | 397,991 | 402,928 | 153,181 | 181,372 | 183,823 | ||||||||||||
Teekay Tankers (3) | |||||||||||||||||
Conventional Tankers | 526,896 | 504,347 | 235,593 | 86,456 | 184,083 | 58,271 | |||||||||||
Teekay Parent | |||||||||||||||||
Offshore Production | 231,435 | 277,842 | 259,945 | (48,310 | ) | (40,227 | ) | (78,804 | ) | ||||||||
Conventional Tankers | 32,967 | 65,777 | 94,376 | (15,967 | ) | 4,984 | (12,407 | ) | |||||||||
Other | 76,111 | 75,547 | 95,791 | (32,219 | ) | 5,015 | 17,488 | ||||||||||
340,513 | 419,166 | 450,112 | (96,496 | ) | (30,228 | ) | (73,723 | ) | |||||||||
Eliminations and other | (87,674 | ) | (100,535 | ) | (114,252 | ) | 10,296 | 6,506 | 2,570 | ||||||||
2,328,569 | 2,450,382 | 1,993,920 | 384,290 | 625,132 | 427,159 |
(1) | Certain vessels are chartered between the Daughter Companies and Teekay Parent. The amounts in the table below represent revenue earned by each segment from other segments within the group. Such intersegment revenue for the year ended 2016, 2015 and 2014 is as follows: |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Teekay Offshore - Offshore Logistics | 43,104 | 38,734 | 34,603 | |||||
Teekay Offshore - Conventional Tankers | 6,410 | 29,259 | 32,411 | |||||
Teekay LNG - Liquefied Gas Carriers | 37,336 | 35,887 | 37,596 | |||||
Teekay Tankers - Conventional Tankers | 5,404 | 1,380 | 13,707 | |||||
Teekay Parent - Conventional Tankers | — | 3,080 | — | |||||
92,254 | 108,340 | 118,317 |
(2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
(3) | Financial information for Teekay Tankers includes operations of the Explorer Spirit, formerly known as the SPT Explorer, and Navigator Spirit from December 18, 2015, the date Teekay Tankers acquired the vessels from Teekay Offshore. |
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | |||
(U.S. dollars in millions) | 2016 | 2015 | 2014 | ||
Royal Dutch Shell Plc (1) (2) | $429.9 or 19% | (5) | (5) | ||
BG Group (1) (2) | (2) | $263.4 or 11% | (5) | ||
Petroleo Brasileiro SA (3) | $223.7 or 10% | $231.8 or 10% | $248.2 or 12% | ||
Statoil ASA (4) | (5) | (5) | $239.8 or 12% |
(1) | Teekay Offshore - Offshore Logistics and Offshore Production. |
(2) | In February 2016, Royal Dutch Shell Plc acquired BG Group Plc and therefore includes revenues from both Royal Dutch Shell Plc and BG Group Plc for 2016. |
(3) | Teekay Offshore - Offshore Logistics and Offshore Production, Teekay Tankers - Conventional Tankers and Teekay Parent – Conventional Tankers |
(4) | Teekay Offshore - Offshore Logistics, Teekay Tankers—Conventional Tankers, Teekay Parent – Offshore Production and Teekay Parent – Conventional Tankers |
(5) | Less than 10% |
Depreciation and Amortization | Asset Impairments, Loan Loss Recoveries, and Net (Loss) Gain on Sale of Vessels, Equipment and Other Operating Assets | Equity Income (Loss) | ||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Teekay Offshore | ||||||||||||||||||||||||||
Offshore Logistics | (150,813 | ) | (130,102 | ) | (118,968 | ) | (40,079 | ) | (66,101 | ) | (1,638 | ) | — | — | — | |||||||||||
Offshore Production | (149,198 | ) | (137,914 | ) | (72,905 | ) | — | — | — | 17,933 | 7,672 | 10,341 | ||||||||||||||
Conventional Tankers | — | (6,583 | ) | (6,680 | ) | — | (3,897 | ) | — | — | — | — | ||||||||||||||
(300,011 | ) | (274,599 | ) | (198,553 | ) | (40,079 | ) | (69,998 | ) | (1,638 | ) | 17,933 | 7,672 | 10,341 | ||||||||||||
Teekay LNG | ||||||||||||||||||||||||||
Liquefied Gas Carriers | (80,084 | ) | (71,323 | ) | (71,711 | ) | — | — | — | 62,307 | 84,171 | 115,478 | ||||||||||||||
Conventional Tankers | (15,458 | ) | (20,930 | ) | (22,416 | ) | (38,976 | ) | — | — | — | — | — | |||||||||||||
(95,542 | ) | (92,253 | ) | (94,127 | ) | (38,976 | ) | — | — | 62,307 | 84,171 | 115,478 | ||||||||||||||
Teekay Tankers (1) | ||||||||||||||||||||||||||
Conventional Tankers | (104,149 | ) | (71,429 | ) | (50,152 | ) | (20,594 | ) | 771 | 9,955 | 13,101 | 14,411 | 5,228 | |||||||||||||
Teekay Parent | ||||||||||||||||||||||||||
Offshore Production | (70,855 | ) | (69,508 | ) | (78,630 | ) | (110 | ) | (948 | ) | 3,456 | (575 | ) | (12,196 | ) | (1,357 | ) | |||||||||
Conventional Tankers | (1,717 | ) | (2,852 | ) | (2,216 | ) | (12,487 | ) | — | (502 | ) | 5,089 | 16,712 | 3,052 | ||||||||||||
Other | 449 | 451 | 774 | — | — | — | (1,838 | ) | (1,101 | ) | (2,546 | ) | ||||||||||||||
(72,123 | ) | (71,909 | ) | (80,072 | ) | (12,597 | ) | (948 | ) | 2,954 | 2,676 | 3,415 | (851 | ) | ||||||||||||
Eliminations and other | — | 690 | — | (10,378 | ) | (6,798 | ) | (2,082 | ) | |||||||||||||||||
(571,825 | ) | (509,500 | ) | (422,904 | ) | (112,246 | ) | (70,175 | ) | 11,271 | 85,639 | 102,871 | 128,114 |
(1) | Financial information for Teekay Tankers includes operations of the Explorer Spirit, formerly known as the SPT Explorer and Navigator Spirit from December 18, 2015, the date Teekay Tankers acquired the vessels from Teekay Offshore. |
December 31, 2016 $ | December 31, 2015 $ | ||||
Teekay Offshore - Offshore Logistics | 2,677,784 | 2,591,489 | |||
Teekay Offshore - Offshore Production | 2,672,100 | 2,717,193 | |||
Teekay Offshore - Conventional Tankers | 4,818 | 63,900 | |||
Teekay LNG - Liquefied Gas Carriers | 3,957,088 | 3,550,396 | |||
Teekay LNG - Conventional Tankers | 193,553 | 360,527 | |||
Teekay Tankers - Conventional Tankers | 1,864,317 | 2,073,059 | |||
Teekay Parent - Offshore Production | 635,364 | 710,533 | |||
Teekay Parent - Conventional Tankers | 55,937 | 142,236 | |||
Teekay Parent - Other | 13,208 | 17,256 | |||
Cash and cash equivalents | 567,994 | 678,392 | |||
Other assets not allocated | 287,138 | 301,586 | |||
Eliminations | (114,549 | ) | (145,319 | ) | |
Consolidated total assets | 12,814,752 | 13,061,248 |
December 31, 2016 $ | December 31, 2015 $ | ||||
Teekay Offshore - Offshore Logistics | 228,347 | 552,219 | |||
Teekay Offshore - Offshore Production | 66,234 | 120,160 | |||
Teekay Offshore - Conventional Tankers | — | 97 | |||
Teekay LNG - Liquefied Gas Carriers | 344,924 | 191,642 | |||
Teekay LNG - Conventional Tankers | 63 | 327 | |||
Teekay Tankers - Conventional Tankers | 9,226 | 848,250 | |||
Teekay Parent - Offshore Production | — | 57,778 | |||
Teekay Parent - Conventional Tankers | — | 92 | |||
Teekay Parent - Other | 88 | 199 | |||
648,882 | 1,770,764 |
3. | Investments |
As at July 31, 2015 | ||
$ | ||
ASSETS | ||
Cash, cash equivalents and short-term restricted cash | 1,292 | |
Accounts receivable | 10,332 | |
Prepaid expenses and other current assets | 3,763 | |
Vessels and equipment | 6,475 | |
Other assets | 143 | |
Intangible assets subject to amortization | ||
Customer relationships (1) | 17,901 | |
Customer contracts (1) | 4,599 | |
Goodwill (2) | 8,059 | |
Total assets acquired | 52,564 | |
LIABILITIES | ||
Accounts payable | (3,650 | ) |
Accrued liabilities | (3,276 | ) |
Total liabilities assumed | (6,926 | ) |
Net assets acquired (3) | 45,638 |
(1) | The customer relationships and customer contracts are being amortized over weighted average amortization periods of 10 years and 7.6 years, respectively. As at December 31, 2016, the gross carrying amount, accumulated amortization and net carrying amount were $22.5 million, $4.8 million and $17.7 million, respectively. |
(2) | Goodwill recognized from this acquisition was attributed to the Company's Teekay Tankers Segment - Conventional tankers. |
(3) | Prior to the SPT acquisition date, SPT had in-chartered the Explorer Spirit from the Company. Of the SPT acquisition price, $1.4 million was allocated to the settlement of this pre-existing relationship. Such amount has been accounted for as a reduction to revenue on the SPT acquisition date. |
(in thousands of U.S. Dollars) | Preliminary Valuation August 11, 2014 $ | Adjustments $ | Final Valuation August 11, 2014 $ | |||||
ASSETS | ||||||||
Cash and cash equivalents | 8,089 | — | 8,089 | |||||
Prepaid expenses | 640 | — | 640 | |||||
Advances on newbuilding contracts | 46,809 | (2,239 | ) | 44,570 | ||||
Intangible assets | — | 1,000 | 1,000 | |||||
Total assets acquired | 55,538 | (1,239 | ) | 54,299 | ||||
LIABILITIES | ||||||||
Accrued liabilities | 4,098 | — | 4,098 | |||||
Long-term debt | 26,270 | 1,330 | 27,600 | |||||
Total liabilities assumed | 30,368 | 1,330 | 31,698 | |||||
Net assets acquired | 25,170 | (2,569 | ) | 22,601 | ||||
Cash consideration | 4,000 | — | 4,000 | |||||
Contingent consideration | 21,170 | (2,569 | ) | 18,601 |
(in thousands of U.S. Dollars) | As at March 14, 2014 $ | |
ASSETS | ||
Cash and cash equivalents | 294 | |
Other current assets | 404 | |
Advances on newbuilding contracts | 164 | |
Other assets - long-term | 395 | |
Goodwill | 2,032 | |
Total assets acquired | 3,289 | |
LIABILITIES | ||
Current liabilities | 387 | |
Other long-term liabilities | 286 | |
Total liabilities assumed | 673 | |
Net assets acquired | 2,616 | |
Consideration | 2,616 |
4. | Equity Financing Transactions of the Daughter Companies |
Total Proceeds Received $ | Less: Teekay Corporation Portion $ | Offering Expenses $ | Net Proceeds Received $ | ||||||||
2016 | |||||||||||
Teekay Offshore Preferred D Units Offering (1) | 100,000 | (26,000 | ) | (2,750 | ) | 71,250 | |||||
Teekay Offshore Common Units Offering | 102,041 | (2,041 | ) | (2,550 | ) | 97,450 | |||||
Teekay Offshore Continuous Offering Program | 31,819 | (636 | ) | (792 | ) | 30,391 | |||||
Teekay Offshore Private Placement (2) | 24,874 | (13,167 | ) | — | 11,707 | ||||||
Teekay LNG Preferred A Units Offering | 125,000 | — | (4,293 | ) | 120,707 | ||||||
Teekay Tankers Continuous Offering Program | 7,747 | — | (189 | ) | 7,558 | ||||||
2015 (3) | |||||||||||
Teekay Offshore Preferred B Units Offering | 125,000 | — | (4,210 | ) | 120,790 | ||||||
Teekay Offshore Preferred C Units Offering | 250,000 | — | (250 | ) | 249,750 | ||||||
Teekay Offshore Continuous Offering Program | 3,551 | (71 | ) | (66 | ) | 3,414 | |||||
Teekay LNG Continuous Offering Program | 36,274 | (725 | ) | (900 | ) | 34,649 | |||||
Teekay Tankers Public Offering | 13,716 | — | (31 | ) | 13,685 | ||||||
Teekay Tankers Continuous Offering Program | 94,595 | — | (2,155 | ) | 92,440 | ||||||
Teekay Tankers Private Placement | 109,907 | — | — | 109,907 | |||||||
2014 (4) | |||||||||||
Teekay Offshore Continuous Offering Program | 7,784 | (156 | ) | (153 | ) | 7,475 | |||||
Teekay Offshore Direct Equity Placement | 178,569 | (3,571 | ) | (75 | ) | 174,923 | |||||
Teekay LNG Public Offering | 140,784 | (2,816 | ) | (299 | ) | 137,669 | |||||
Teekay LNG Continuous Offering Program | 42,556 | (851 | ) | (901 | ) | 40,804 | |||||
Teekay Tankers Public Offering | 116,000 | (20,000 | ) | (4,810 | ) | 91,190 |
(1) | In June 2016, Teekay Offshore issued 4,000,000 of its 10.50% Series D Preferred Units and 4,500,000 warrants exercisable to acquire up to 4,500,000 common units at an exercise price equal to the closing price of Teekay Offshore's common units on June 16, 2016, or $4.55 per unit (or the $4.55 Warrants) and 2,250,000 warrants exercisable to acquire up to 2,250,000 common units with an exercise price at a 33% premium to the closing price of Teekay Offshore's common units on June 16, 2016, or $6.05 per unit (or the $6.05 Warrants) (together, the Warrants). The Warrants have a seven-year term and are exercisable any time after six months following their issuance date. The Warrants are to be net settled in either cash or common units at Teekay Offshore's option. The gross proceeds from the sale of these securities was $100.0 million ($97.2 million net of offering costs). |
(2) | In 2016, Teekay Offshore issued 4.7 million common units for a total value of $24.9 million (including the general partner's 2% proportionate capital contribution of $0.5 million) as a payment-in-kind for the distributions on Teekay Offshore's Series C-1 Cumulative Convertible Perpetual Preferred Units (or the Series C-1 Preferred Units) and Series D Preferred Units and Teekay Offshore's common units and general partner interest held by subsidiaries of Teekay. In June 2016, Teekay Offshore agreed with Teekay that, until the Teekay Offshore's Norwegian Kroner bonds maturing in 2018 have been repaid, all cash distributions (other than with respect to incentive distribution rights) to be paid by Teekay Offshore to Teekay or its affiliates, including Teekay Offshore's general partner, will instead be paid in Teekay Offshore common units or from the proceeds of the sale of common units. Teekay Offshore issued Teekay 2.5 million common units (including the general partner's 2% proportionate capital contribution) as a payment-in-kind for the distribution on Teekay Offshore's Series D Preferred Units, common units and general partner interest held by Teekay and its subsidiaries. |
(3) | In 2015, in addition to the issuances of equity to third parties noted in the table above, Teekay purchased $30.0 million or 4.5 million shares of Class A common stock of Teekay Tankers for Teekay Tankers to partially finance the acquisition of 12 modern Suezmax tankers from Principal Maritime (see Note 3b), $300.0 million or 14.4 million common units of Teekay Offshore for Teekay Offshore to partially finance the July 1, 2015 acquisition of the Petrojarl Knarr FPSO from Teekay, and $45.5 million or 6.5 million shares of Class B common stock of Teekay Tankers to finance the acquisition of SPT (see Note 3c). These increases in Teekay’s ownership interests in Teekay Tankers and Teekay Offshore have been accounted for as equity transactions. Therefore, no gains or losses were recognized in the Company’s consolidated statements of income as a result of these purchases. However, the carrying amount of the non-controlling interests’ share of Teekay Offshore and Teekay Tankers increased by an aggregate of $168.1 million and retained earnings decreased by $168.1 million to reflect the increase in Teekay’s ownership interest in Teekay Offshore and Teekay Tankers and the increase in the carrying value of Teekay Offshore’s and Teekay Tankers’ total equity. This adjustment to non-controlling interest and retained earnings was primarily the result of Teekay Offshore’s 14.4 million common units being issued to Teekay at fair value, which was significantly greater than the carrying value. |
(4) | In August 2014, Teekay Tankers purchased from Teekay a 50% interest in Teekay Tanker Operations Ltd. (or TTOL), which owns conventional tanker commercial management and technical management operations, including the direct ownership in three commercially managed tanker pools, for an aggregate price of approximately $23.5 million, including net working capital. As consideration for this acquisition, Teekay Tankers issued to Teekay 4.2 million Class B common shares. The 4.2 million Class B common shares had an approximate aggregate value of $15.6 million, or $3.70 per share, when the purchase price was agreed to between the parties and an aggregate value of $17.0 million, or $4.03 per share, on the acquisition closing date. The purchase price, for accounting purposes, is based upon the value of the Class B common shares on the acquisition closing date. In addition, Teekay Tankers reimbursed Teekay for $6.5 million of working capital it assumed from Teekay in connection with the purchase. The book value of the assets acquired, including working capital, was $16.9 million on the date of acquisition. |
5. | Goodwill, Intangible Assets and In-Process Revenue Contracts |
Teekay Offshore - Offshore Logistics Segment $ | Teekay LNG - Liquefied Gas Segment $ | Conventional Tanker Segment $ | Total $ | ||||||||
Balance as of December 31, 2015 and 2014 | 132,940 | 35,631 | — | 168,571 | |||||||
Goodwill acquired | — | — | 8,059 | 8,059 | |||||||
Balance as of December 31, 2016 | 132,940 | 35,631 | 8,059 | 176,630 |
Gross Carrying Amount $ | Accumulated Amortization $ | Net Carrying Amount $ | ||||||
Customer contracts | 317,222 | (245,705 | ) | 71,517 | ||||
Customer relationships | 22,500 | (4,842 | ) | 17,658 | ||||
Other intangible assets | 1,000 | (1,000 | ) | — | ||||
340,722 | (251,547 | ) | 89,175 |
Gross Carrying Amount $ | Accumulated Amortization $ | Net Carrying Amount $ | ||||||
Customer contracts | 316,684 | (234,894 | ) | 81,790 | ||||
Customer relationships | 30,879 | (1,260 | ) | 29,619 | ||||
Other intangible assets | 1,000 | (500 | ) | 500 | ||||
348,563 | (236,654 | ) | 111,909 |
6. | Accrued Liabilities and Other and Other Long-Term Liabilities |
December 31, 2016 $ | December 31, 2015 $ | ||||
Voyage and vessel expenses | 177,868 | 168,120 | |||
Interest | 64,362 | 66,110 | |||
Payroll and benefits and other | 70,904 | 88,239 | |||
Deferred revenues and gains - current | 78,766 | 76,883 | |||
Loans from affiliates | 11,785 | 12,426 | |||
Liabilities associated with assets held for sale | — | 500 | |||
403,685 | 412,278 |
December 31, 2016 $ | December 31, 2015 $ | ||||
Deferred revenues and gains | 210,434 | 248,984 | |||
Guarantee liability | 24,373 | 26,467 | |||
Asset retirement obligation | 44,675 | 25,484 | |||
Pension liabilities | 8,599 | 14,953 | |||
Contingent consideration liability | — | 6,225 | |||
Unrecognized tax benefits and deferred income tax | 24,340 | 21,967 | |||
Other | 20,815 | 8,298 | |||
333,236 | 352,378 |
7. | Long-Term Debt |
December 31, 2016 $ | December 31, 2015 $ | ||||
Revolving Credit Facilities | 1,119,808 | 1,500,848 | |||
Senior Notes (8.5%) due January 15, 2020 | 592,657 | 592,657 | |||
Norwegian Kroner-denominated Bonds due through May 2021 | 628,257 | 621,957 | |||
U.S. Dollar-denominated Term Loans due through 2028 | 3,702,997 | 4,020,665 | |||
U.S. Dollar Bonds due through 2024 | 466,680 | 502,449 | |||
Euro-denominated Term Loans due through 2023 | 219,733 | 241,798 | |||
Total principal | 6,730,132 | 7,480,374 | |||
Less unamortized discount and debt issuance costs | (90,586 | ) | (96,288 | ) | |
Total debt | 6,639,546 | 7,384,086 | |||
Less current portion | (998,591 | ) | (1,106,104 | ) | |
Long-term portion | 5,640,955 | 6,277,982 |
8. | Operating and Direct Financing Leases |
Year | Head Lease Receipts (1) $ | Sublease Payments(1)(2) $ | |||
2017 | 21,242 | 24,113 | |||
2018 | 21,242 | 24,113 | |||
2019 | 21,242 | 24,113 | |||
2020 | 21,242 | 24,113 | |||
2021 | 21,242 | 24,113 | |||
Thereafter | 154,095 | 174,959 | |||
Total | 260,305 | 295,524 |
(1) | The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2016, the Teekay Tangguh Joint Venture had received $250.0 million of aggregate Head Lease receipts and had paid $187.9 million of aggregate Sublease payments. The portion of the Head Lease receipts that has not been recognized into earnings, is deferred and amortized on a straight line basis over the lease terms and, as at December 31, 2016, $3.7 million and $36.7 million of Head Lease receipts had been deferred and included in unearned revenue and other long-term liabilities, respectively, in the Company’s consolidated balance sheets. |
(2) | The amount of payments under the Subleases is updated annually to reflect any changes in the lease payments due to changes in tax law. |
December 31, 2016 $ | December 31, 2015 $ | ||||
Total minimum lease payments to be received | 777,334 | 855,655 | |||
Estimated unguaranteed residual value of leased properties | 203,465 | 203,465 | |||
Initial direct costs and other | 393 | 428 | |||
Less unearned revenue | (320,598 | ) | (375,419 | ) | |
Total | 660,594 | 684,129 | |||
Less current portion | (154,759 | ) | (26,542 | ) | |
Long-term portion | 505,835 | 657,587 |
9. | Capital Lease Obligations |
December 31, 2016 $ | December 31, 2015 $ | ||||
LNG Carriers | 338,257 | — | |||
Suezmax Tankers | 54,582 | 59,127 | |||
Less current portion | (40,353 | ) | (4,546 | ) | |
Long-term obligations under capital lease | 352,486 | 54,581 |
Year | Commitment | ||
2017 | $ | 30,065 | |
2018 | $ | 30,065 | |
2019 | $ | 30,065 | |
2020 | $ | 30,147 | |
2021 | $ | 30,065 | |
Thereafter | $ | 327,686 |
Year | Commitment | ||
2017 | $ | 30,953 | |
2018 | $ | 27,296 |
10. | Fair Value Measurements |
December 31, 2016 | December 31, 2015 | |||||||||||||
Fair Value Hierarchy Level | Carrying Amount Asset (Liability) $ | Fair Value Asset (Liability) $ | Carrying Amount Asset (Liability) $ | Fair Value Asset (Liability) $ | ||||||||||
Recurring | ||||||||||||||
Cash and cash equivalents, restricted cash, and marketable securities | Level 1 | 805,567 | 805,567 | 855,107 | 855,107 | |||||||||
Derivative instruments (note 14) | ||||||||||||||
Interest rate swap agreements - assets (1) | Level 2 | 7,943 | 7,943 | 6,136 | 6,136 | |||||||||
Interest rate swap agreements - liabilities (1) | Level 2 | (302,935 | ) | (302,935 | ) | (370,952 | ) | (370,952 | ) | |||||
Cross currency interest swap agreement (1) | Level 2 | (237,165 | ) | (237,165 | ) | (312,110 | ) | (312,110 | ) | |||||
Foreign currency contracts | Level 2 | (2,993 | ) | (2,993 | ) | (18,826 | ) | (18,826 | ) | |||||
Stock purchase warrants (note 14) | Level 3 | 575 | 575 | 10,328 | 10,328 | |||||||||
Time-charter swap agreement | Level 3 | 208 | 208 | — | — | |||||||||
Logitel contingent consideration (see below) | Level 3 | — | — | (14,830 | ) | (14,830 | ) | |||||||
Non-recurring | ||||||||||||||
Vessels and equipment (note 17c) | Level 2 | 11,300 | 11,300 | 100,600 | 100,600 | |||||||||
Vessels held for sale (note 17c) | Level 2 | 61,282 | 61,282 | 55,450 | 55,450 | |||||||||
Long-term investments (note 13) | Level 2 | 6,000 | 6,000 | 25,000 | 25,000 | |||||||||
Other | ||||||||||||||
Loans to equity-accounted investees and joint venture partners - Current | (2) | 11,821 | (2) | 7,127 | (2) | |||||||||
Loans to equity-accounted investees and joint venture partners - Long-term | (2) | 292,209 | (2) | 184,390 | (2) | |||||||||
Long-term receivable included in accounts receivable and other assets (3) | Level 3 | 10,985 | 10,944 | 16,453 | 16,427 | |||||||||
Long-term debt - public (note 7) | Level 1 | (1,503,472 | ) | (1,409,996 | ) | (1,493,915 | ) | (1,161,729 | ) | |||||
Long-term debt - non-public (note 7) | Level 2 | (5,136,074 | ) | (5,009,900 | ) | (5,890,171 | ) | (5,881,483 | ) |
(1) | The fair value of the Company’s interest rate swap agreements at December 31, 2016 includes $15.8 million (December 31, 2015 - $21.7 million) accrued interest expense which is recorded in accrued liabilities on the consolidated balance sheets. |
(2) | In the consolidated financial statements, the Company’s loans to and equity investments in equity-accounted investees constitute the aggregate carrying value of the Company’s interests in entities accounted for by the equity method. The fair value of the individual components of such aggregate interests is not determinable. |
(3) | As at December 31, 2016, the estimated fair value of the non-interest bearing receivable is based on the remaining future fixed payments of $10.9 million to be received from Royal Dutch Shell Plc (or Shell) (formerly BG International Limited (or BG)), as part of the ship construction support agreement, as well as an estimated discount rate of 8.0%. As there is no market rate for the equivalent of an unsecured non-interest bearing receivable from BG, the discount rate was based on unsecured debt instruments of similar maturity held, adjusted for a liquidity premium. A higher or lower discount rate would result in a lower or higher fair value asset. |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | ||||
Fair value asset - beginning of the year | — | — | |||
Settlements | (2,154 | ) | — | ||
Realized and unrealized gain | 2,362 | — | |||
Fair value asset - at the end of the year | 208 | — |
Year Ended December 31, | |||||
2016 $ | 2015 $ | ||||
Fair value at the beginning of the year | 10,328 | 9,314 | |||
Unrealized (loss) gain included in earnings | (9,753 | ) | 1,014 | ||
Fair value at the end of the year | 575 | 10,328 |
Year Ended December 31, | |||||
2016 $ | 2015 $ | ||||
Balance at beginning of year | (14,830 | ) | (21,448 | ) | |
Adjustment to liability | — | 2,569 | |||
Settlement of liability | — | 3,540 | |||
Gain included in Other (loss) income - net (note 13) | 14,830 | 509 | |||
Balance at end of year | — | (14,830 | ) |
11. | Capital Stock |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||
Options (000’s) # | Weighted-Average Exercise Price $ | Options (000’s) # | Weighted-Average Exercise Price $ | Options (000’s) # | Weighted-Average Exercise Price $ | ||||||||||||
Outstanding - beginning of year | 2,800 | 36.84 | 2,710 | 36.61 | 4,237 | 36.33 | |||||||||||
Granted | 916 | 9.44 | 265 | 43.99 | 15 | 56.76 | |||||||||||
Exercised | — | — | (36 | ) | 33.79 | (1,528 | ) | 36.10 | |||||||||
Forfeited / expired | (349 | ) | 38.97 | (139 | ) | 46.80 | (14 | ) | 28.51 | ||||||||
Outstanding - end of year | 3,367 | 29.16 | 2,800 | 36.84 | 2,710 | 36.61 | |||||||||||
Exercisable - end of year | 2,271 | 35.89 | 2,500 | 36.03 | 2,508 | 37.03 |
December 31, 2016 | December 31, 2015 | December 31, 2014 | |||||||||||||||
Options (000’s) # | Weighted-Average Grant Date Fair Value $ | Options (000’s) # | Weighted-Average Grant Date Fair Value $ | Options (000’s) # | Weighted-Average Grant Date Fair Value $ | ||||||||||||
Outstanding non-vested stock options - beginning of year | 300 | 8.09 | 202 | 9.37 | 389 | 9.24 | |||||||||||
Granted | 916 | 3.60 | 265 | 7.74 | 15 | 11.50 | |||||||||||
Vested | (118 | ) | 8.48 | (167 | ) | 9.07 | (188 | ) | 9.30 | ||||||||
Forfeited | (2 | ) | 3.60 | — | — | (14 | ) | 9.01 | |||||||||
Outstanding non-vested stock options - end of year | 1,096 | 4.30 | 300 | 8.09 | 202 | 9.37 |
Outstanding Options | Exercisable Options | ||||||||||||||
Range of Exercise Prices | Options (000’s) # | Weighted- Average Remaining Life (Years) | Weighted- Average Exercise Price $ | Options (000’s) # | Weighted- Average Remaining Life (Years) | Weighted- Average Exercise Price $ | |||||||||
$5.00 – $9.99 | 914 | 9.2 | 9.44 | — | 0 | — | |||||||||
$10.00 – $19.99 | 188 | 2.2 | 11.84 | 188 | 2.2 | 11.84 | |||||||||
$20.00 – $24.99 | 293 | 3.2 | 24.42 | 293 | 3.2 | 24.42 | |||||||||
$25.00 – $29.99 | 364 | 5.2 | 27.69 | 364 | 5.2 | 27.69 | |||||||||
$30.00 – $34.99 | 117 | 5.3 | 34.44 | 117 | 5.3 | 34.44 | |||||||||
$35.00 – $39.99 | 25 | 1.6 | 39.99 | 25 | 1.6 | 39.99 | |||||||||
$40.00 – $44.99 | 1,029 | 3.0 | 41.33 | 852 | 1.9 | 40.78 | |||||||||
$50.00 – $54.99 | 422 | 0.2 | 51.40 | 422 | 0.2 | 51.40 | |||||||||
$55.00 – $59.99 | 15 | 7.2 | 56.76 | 10 | 7.2 | 56.76 | |||||||||
3,367 | 4.61 | 29.16 | 2,271 | 2.49 | 35.89 |
12. | Related Party Transactions |
13. | Other (Loss) Income |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Write-off of contingent consideration (note 15d) | 36,630 | — | — | |||||
Accrual of contingent liability (note 15d) | (61,862 | ) | — | — | ||||
Write-down of cost-accounted investment (1) | (19,000 | ) | — | — | ||||
TIL stock purchase warrants received (note 14) | — | — | 6,839 | |||||
Miscellaneous income (loss) | 5,219 | 1,566 | (292 | ) | ||||
Loss on bond repurchases | — | — | (7,699 | ) | ||||
Other (loss) income | (39,013 | ) | 1,566 | (1,152 | ) |
14. | Derivative Instruments and Hedging Activities |
Fair Value / Carrying Amount Of Asset (Liability) $ | Expected Maturity | |||||||||||||
Contract Amount in Foreign Currency | Average Forward Rate (1) | 2017 | 2018 | |||||||||||
$ | $ | |||||||||||||
Euro | 13,750 | 0.92 | (304 | ) | 14,879 | — | ||||||||
Norwegian Kroner | 610,000 | 8.31 | (2,689 | ) | 60,677 | 12,719 | ||||||||
(2,993 | ) | 75,556 | 12,719 |
Notional Amount NOK | Notional Amount USD | Fair Value / Carrying Amount of Asset / (Liability) | Remaining Term (years) | |||||||||||||
Floating Rate Receivable | ||||||||||||||||
Reference Rate | Margin | Fixed Rate Payable | ||||||||||||||
408,500 | 72,946 | NIBOR | 5.25 | % | 6.88 | % | (26,417 | ) | 0.3 | |||||||
420,000 (1) (2) | 70,946 | NIBOR | 5.75 | % | 8.84 | % | (25,821 | ) | 1.9 | |||||||
800,000 (1) (3) | 143,536 | NIBOR | 5.75 | % | 7.58 | % | (56,272 | ) | 2.0 | |||||||
900,000 | 110,400 | NIBOR | 6.00 | % | 7.72 | % | (3,814 | ) | 4.8 | |||||||
900,000 | 150,000 | NIBOR | 4.35 | % | 6.43 | % | (49,655 | ) | 1.7 | |||||||
1,000,000 | 162,200 | NIBOR | 4.25 | % | 7.45 | % | (55,286 | ) | 2.1 | |||||||
1,000,000 | 134,000 | NIBOR | 3.70 | % | 5.92 | % | (19,900 | ) | 3.4 | |||||||
(237,165 | ) |
(1) | Notional amount reduces equally with NOK bond repayments (see Note 7). |
(2) | Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 7.2 million for $1.2 million (see Note 7). |
(3) | Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 19.2 million for $3.4 million (see Note 7). |
Interest Rate Index | Principal Amount $ | Fair Value / Carrying Amount of Asset / (Liability) $ | Weighted- Average Remaining Term (years) | Fixed Interest Rate (%) (1) | |||||||
LIBOR-Based Debt: | |||||||||||
U.S. Dollar-denominated interest rate swaps | LIBOR | 2,974,274 | (243,261 | ) | 5.4 | 3.3 | |||||
U.S. Dollar-denominated interest rate swaps (2) | LIBOR | 517,629 | (16,489 | ) | 4.2 | 3.0 | |||||
U.S. Dollar-denominated interest rate swaption (3) | LIBOR | 155,000 | (1,525 | ) | 0.3 | 2.2 | |||||
U.S. Dollar-denominated interest rate swaption (3) | LIBOR | 155,000 | 31 | 0.3 | 3.3 | ||||||
U.S. Dollar-denominated interest rate swaption (4) | LIBOR | 160,000 | (1,457 | ) | 1.1 | 2.0 | |||||
U.S. Dollar-denominated interest rate swaption (4) | LIBOR | 160,000 | 1,140 | 1.1 | 3.1 | ||||||
U.S. Dollar-denominated interest rate swaption (5) | LIBOR | 160,000 | (1,248 | ) | 1.5 | 1.8 | |||||
U.S. Dollar-denominated interest rate swaption (5) | LIBOR | 160,000 | 2,112 | 1.5 | 2.9 | ||||||
EURIBOR-Based Debt: | |||||||||||
Euro-denominated interest rate swaps (6) (7) | EURIBOR | 219,733 | (34,295 | ) | 4.0 | 3.1 | |||||
(294,992 | ) |
(1) | Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2016, ranged from 0.3% to 4.0%. |
(2) | Inception dates range from September 2017 to April 2018. Interest rate swaps with an aggregate principal amount of $320 million are being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2017 to 2024. These interest rate swaps are subject to mandatory early termination in 2017 and 2018 whereby the swaps will be settled based on their fair value at that time. |
(3) | During June 2015, as part of its hedging program, Teekay LNG entered into interest rate swaption agreements whereby it has a one-time option in April 2017 to enter into an interest rate swap at a fixed rate of 3.34% with a third party, and the third party has a one-time option in April 2017 to require Teekay LNG to enter into an interest swap at a fixed rate of 2.15%. If Teekay LNG or the third party exercises its option, there will be a cash settlement in April 2017 for the fair value of the interest rate swap, in lieu of taking delivery of the actual interest rate swap. |
(4) | During August 2015, as part of its hedging program, Teekay LNG entered into interest rate swaption agreements whereby it has a one-time option in January 2018 to enter into an interest rate swap at a fixed rate of 3.10% with a third party, and the third party has a one-time option in January 2018 to require Teekay LNG to enter into an interest swap at a fixed rate of 1.97%. If Teekay LNG or the third party exercises its option, there will be a cash settlement in January 2018 for the fair value of the interest rate swap, in lieu of taking delivery of the actual interest rate swap. |
(5) | During October 2015, as part of its hedging program, Teekay LNG entered into interest rate swaption agreements whereby it has a one-time option in July 2018 to enter into an interest rate swap at a fixed rate of 2.935% with a third party, and the third party has a one-time option in July 2018 to require Teekay LNG to enter into an interest swap at a fixed rate of 1.83%. If Teekay LNG or the third party exercises its option, there will be a cash settlement in July 2018 for the fair value of the interest rate swap, in lieu of taking delivery of the actual interest rate swap. |
(6) | Principal amount reduces monthly to 70.1 million Euros ($73.7 million) by the maturity dates of the swap agreements. |
(7) | Principal amount is the U.S. Dollar equivalent of 208.9 million Euros. |
Prepaid Expenses and Other | Other Non-Current Assets | Accrued Liabilities | Current Portion of Derivative Liabilities | Derivative Liabilities | ||||||||||
As at December 31, 2016 | ||||||||||||||
Derivatives designated as a cash flow hedge: | ||||||||||||||
Interest rate swap agreements | — | 1,340 | (363 | ) | (1,033 | ) | (52 | ) | ||||||
Derivatives not designated as a cash flow hedge: | ||||||||||||||
Foreign currency contracts | 119 | — | — | (2,601 | ) | (511 | ) | |||||||
Interest rate swap agreements | 212 | 9,841 | (11,979 | ) | (59,055 | ) | (233,903 | ) | ||||||
Cross currency swap agreements | — | — | (3,464 | ) | (53,124 | ) | (180,577 | ) | ||||||
Stock purchase warrants | — | 575 | — | — | — | |||||||||
Time-charter swap agreement | 875 | — | (667 | ) | — | — | ||||||||
1,206 | 11,756 | (16,473 | ) | (115,813 | ) | (415,043 | ) | |||||||
As at December 31, 2015 | ||||||||||||||
Derivatives designated as a cash flow hedge: | ||||||||||||||
Interest rate swap agreements | — | — | — | (338 | ) | (777 | ) | |||||||
Derivatives not designated as a cash flow hedge: | ||||||||||||||
Foreign currency contracts | 80 | — | — | (16,372 | ) | (2,534 | ) | |||||||
Interest rate swap agreements | — | 7,516 | (18,348 | ) | (198,196 | ) | (154,673 | ) | ||||||
Cross currency swap agreements | — | — | (3,377 | ) | (52,633 | ) | (256,100 | ) | ||||||
Stock purchase warrants | — | 10,328 | — | — | — | |||||||||
80 | 17,844 | (21,725 | ) | (267,539 | ) | (414,084 | ) |
Year Ended December 31, 2016 | |||||||||
Effective Portion | Effective Portion | Ineffective | |||||||
Recognized in AOCI(1) | Reclassified from AOCI(2) | Portion | |||||||
$ | $ | $ | |||||||
691 | (68 | ) | 682 | Interest expense | |||||
691 | (68 | ) | 682 |
Year Ended December 31, 2015 | |||||||||
Effective Portion | Effective Portion | Ineffective | |||||||
Recognized in AOCI(1) | Reclassified from AOCI(2) | Portion | |||||||
$ | $ | $ | |||||||
(65 | ) | — | (1,050 | ) | Interest expense | ||||
(65 | ) | — | (1,050 | ) |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Realized (losses) gains relating to: | ||||||||
Interest rate swap agreements | (87,320 | ) | (108,036 | ) | (125,424 | ) | ||
Interest rate swap agreement terminations | (8,140 | ) | (10,876 | ) | (1,319 | ) | ||
Foreign currency forward contracts | (11,186 | ) | (21,607 | ) | (4,436 | ) | ||
Time charter swap agreement | 2,154 | — | — | |||||
(104,492 | ) | (140,519 | ) | (131,179 | ) | |||
Unrealized gains (losses) relating to: | ||||||||
Interest rate swap agreements | 62,446 | 37,723 | (86,045 | ) | ||||
Foreign currency forward contracts | 15,833 | (418 | ) | (16,926 | ) | |||
Stock purchase warrants | (9,753 | ) | 1,014 | 2,475 | ||||
Time-charter swap agreement | 875 | — | — | |||||
69,401 | 38,319 | (100,496 | ) | |||||
Total realized and unrealized (losses) gains on derivative instruments | (35,091 | ) | (102,200 | ) | (231,675 | ) |
Year Ended December 31, | ||||||||
2016 $ | 2015 $ | 2014 $ | ||||||
Realized losses on maturity and partial termination of cross currency swap | (41,707 | ) | (36,155 | ) | — | |||
Realized losses | (38,564 | ) | (18,973 | ) | (3,955 | ) | ||
Unrealized gains (losses) | 75,033 | (89,178 | ) | (167,334 | ) | |||
Total realized and unrealized losses on cross currency swaps | (5,238 | ) | (144,306 | ) | (171,289 | ) |
15. | Commitments and Contingencies |
Total $ | 2017 $ | 2018 $ | 2019 $ | 2020 $ | ||||||
Yamal LNG Joint Venture (i) | 883,030 | 91,800 | 344,850 | 247,800 | 198,580 | |||||
BG Joint Venture (ii) | 195,565 | 80,010 | 86,154 | 29,401 | — | |||||
Bahrain LNG Joint Venture (iii) | 224,080 | 110,364 | 80,097 | 33,619 | — | |||||
Exmar LPG Joint Venture (iv) | 77,504 | 58,096 | 19,408 | — | — | |||||
1,380,179 | 340,270 | 530,509 | 310,820 | 198,580 |
(i) | Teekay LNG, through the Yamal LNG Joint Venture, has a 50% ownership interest in six 172,000-cubic meter ARC7 LNG carrier newbuildings that have an estimated total fully built-up cost of $2.1 billion. As at December 31, 2016, Teekay LNG’s proportionate costs incurred under these newbuilding contracts totaled $153.3 million. The Yamal LNG Joint Venture intends to secure debt financing for the six LNG carrier newbuildings prior to their scheduled deliveries. |
(ii) | Teekay LNG acquired an ownership interest in the BG Joint Venture and, as part of the acquisition, agreed to assume Shell’s obligation to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates pursuant to a ship construction support agreement. The BG Joint Venture has secured financing of $137.1 million related to the commitments included in the table above and Teekay LNG is scheduled to receive $10.9 million of reimbursement directly from Shell. |
(iii) | Teekay LNG has a 30% ownership interest in the Bahrain LNG Joint Venture for the development of an LNG receiving and regasification terminal in Bahrain. The project will include a FSU, which will be modified from one of the Teekay LNG’s existing MEGI LNG carrier newbuildings, an offshore gas receiving facility, and an onshore nitrogen production facility. The terminal will have a capacity of 800 million standard cubic feet per day and will be owned and operated under a 20-year agreement commencing early-2019. The receiving and regasification terminal is expected to have a fully-built up cost of approximately $960.0 million. The Bahrain LNG Joint Venture has secured debt financing for approximately 75% of the estimated fully built-up cost of the LNG receiving and regasification terminal in Bahrain. |
(iv) | Teekay LNG has a 50% ownership interest in the Exmar LPG Joint Venture which has four LPG newbuilding vessels scheduled for delivery between 2017 and 2018 and has secured financing for the four LPG carrier newbuildings. |
16. | Supplemental Cash Flow Information |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Accounts receivable | 96,497 | (6,488 | ) | 136,660 | ||||
Prepaid expenses and other | 9,690 | (10,607 | ) | (1,618 | ) | |||
Accounts payable | (10,705 | ) | (24,727 | ) | (17,643 | ) | ||
Accrued liabilities and other | (57,149 | ) | 29,531 | (56,768 | ) | |||
38,333 | (12,291 | ) | 60,631 |
b) | Cash interest paid, including realized interest rate swap settlements, during the years ended December 31, 2016, 2015, and 2014, totaled $341.0 million, $318.1 million and $328.2 million, respectively. In addition, during the years ended December 31, 2016, 2015, and 2014, cash interest paid relating to interest rate swap amendments and terminations totaled $8.1 million, $10.9 million and $1.3 million, respectively. |
c) | In 2016, the portion of the distributions paid in kind by Teekay Offshore to the unit holders of Series C-1 Preferred Units and Series D Preferred Units, of $11.7 million was treated as a non-cash transaction in the consolidated statements of cash flows. |
d) | As described in Note 3b, in August 2015, Teekay Tankers agreed to acquire 12 modern Suezmax tankers from Principal Maritime. As of December 31, 2015, all 12 of the vessels had been delivered for a total purchase price of $661.3 million, consisting of $612.0 million in cash and approximately 7.2 million shares of Teekay Tankers’ Class A common stock or $49.3 million, which was treated as a non-cash transaction in the consolidated statement of cash flows. |
e) | During 2014, the Company had several transactions treated as non-cash transactions in the consolidated statements of cash flows. The Company took ownership of three VLCCs with a fair value of $222.0 million, which were collateral for all amounts owing under the investment in term loans, which was concurrently discharged. As described in Note 3f, Teekay LNG acquired BG’s ownership interest in the BG Joint Venture. As compensation, Teekay LNG assumed BG’s obligation to provide services for the four LNG carrier newbuildings up to their delivery dates. The estimated fair value of the assumed obligation of approximately $33.3 million was used to offset the purchase price. The sales of the Huelva Spirit, and Algeciras Spirit conventional tankers resulted in the vessels under capital leases being returned to the owner and the capital lease obligations being concurrently extinguished. The portion of dividends declared by the Teekay Tangguh Joint Venture that was used to settle the advances made to BLT LNG Tangguh Corporation and P.T. Berlian Laju Tanker of $14.4 million was treated as a non-cash transaction. |
17. | Vessel Sales, Asset Impairments and Provisions |
Net (Loss) Gain on Sale of Vessels, Equipment and Other Operating Assets | ||||||||||
Year Ended December 31, | ||||||||||
Segment | Asset Type | Completion of Sale Date | 2016 $ | 2015 $ | 2014 $ | |||||
Teekay Offshore Segment - Offshore Logistics | FSO unit | (1) | (983) | — | — | |||||
Teekay Offshore Segment - Offshore Logistics | Shuttle tanker | Nov-16 | 6,817 | — | — | |||||
Teekay Offshore Segment - Offshore Logistics | Shuttle tanker | Mar-15 | — | 1,643 | (4,759) | |||||
Teekay Offshore Segment - Offshore Logistics | Shuttle tanker | Oct-14 | — | — | 3,121 | |||||
Teekay Offshore Segment - Conventional Tankers | 2 Conventional Tankers | Mar-16 | 65 | (3,897) | — | |||||
Teekay LNG Segment - Conventional Tankers | Suezmax | Mar-17 | (11,537) | — | — | |||||
Teekay LNG Segment - Conventional Tankers | 2 Suezmaxes | Apr/May-2016 | (27,439) | — | — | |||||
Teekay Tankers Segment - Conventional Tankers | 2 Suezmaxes | Jan-17 | (6,276) | — | — | |||||
Teekay Tankers Segment - Conventional Tankers | MR Tanker | Nov-16 | (8,094) | — | — | |||||
Teekay Tankers Segment - Conventional Tankers | MR Tanker | Aug-16 | (6,556) | — | — | |||||
Teekay Tankers Segment - Conventional Tankers | 2 VLCCs | May-14 | — | — | 9,955 | |||||
Teekay Parent Segment - Conventional Tankers | VLCC | Oct-16 | (12,495) | — | — | |||||
Other | 48 | (177) | 433 | |||||||
Total | (66,450) | (2,431) | 8,750 |
(1) | This vessel is expected to be sold in 2017. |
18. | (Loss) Earnings Per Share |
Year Ended December 31, | ||||||||
2016 $ | 2015 $ | 2014 $ | ||||||
Net (loss) income attributable to shareholders of Teekay Corporation | (123,182 | ) | 82,151 | (54,757 | ) | |||
The Company's portion of the Inducement Premium and Exchange Contribution charged to retained earnings by Teekay Offshore (note 15e) | (4,993 | ) | — | — | ||||
Net (loss) income attributable to shareholders of Teekay Corporation for basic income (loss) per share | (128,175 | ) | 82,151 | (54,757 | ) | |||
Reduction in net earnings due to dilutive impact of stock-based compensation in Teekay LNG, Teekay Offshore and Teekay Tankers and Series C-1 Preferred Units in Teekay Offshore | (25 | ) | (227 | ) | — | |||
Net (loss) income attributable to shareholders of Teekay Corporation for diluted income (loss) per share | (128,200 | ) | 81,924 | (54,757 | ) | |||
Weighted average number of common shares | 79,211,154 | 72,665,783 | 72,066,008 | |||||
Dilutive effect of stock-based compensation | — | 524,781 | — | |||||
Common stock and common stock equivalents | 79,211,154 | 73,190,564 | 72,066,008 | |||||
(Loss) Earnings per common share: | ||||||||
- Basic | (1.62 | ) | 1.13 | (0.76 | ) | |||
- Diluted | (1.62 | ) | 1.12 | (0.76 | ) |
19. | Restructuring Charges |
20. | Income Taxes |
December 31, 2016 $ | December 31, 2015 $ | ||||
Deferred tax assets: | |||||
Vessels and equipment | 40,928 | 43,289 | |||
Tax losses carried forward(1) | 276,291 | 321,648 | |||
Other | 17,075 | 22,141 | |||
Total deferred tax assets | 334,294 | 387,078 | |||
Deferred tax liabilities: | |||||
Vessels and equipment | 5,974 | 10,577 | |||
Long-term debt | 1,691 | 3,218 | |||
Other | 11,626 | 15,090 | |||
Total deferred tax liabilities | 19,291 | 28,885 | |||
Net deferred tax assets | 315,003 | 358,193 | |||
Valuation allowance | (290,015 | ) | (322,491 | ) | |
Net deferred tax assets | 24,988 | 35,702 |
(1) | Substantially all of the Company’s net operating loss carryforwards of $1.26 billion relate primarily to its Norwegian, U.K., Spanish, and Luxembourg subsidiaries and, to a lesser extent, to its Australian ship-owning subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely. The Company also has $36.4 million in disallowed finance costs that relate to its Spanish subsidiaries and are available to offset future taxable income in Spain and can also be carried forward indefinitely. |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Current | (14,424 | ) | (10,440 | ) | (6,460 | ) | ||
Deferred | (10,044 | ) | 27,207 | (3,713 | ) | |||
Income tax (expense) recovery | (24,468 | ) | 16,767 | (10,173 | ) |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Net income before taxes | 111,132 | 388,693 | 134,175 | |||||
Net income (loss) not subject to taxes | 57,862 | 252,604 | (80,454 | ) | ||||
Net income subject to taxes | 53,270 | 136,089 | 214,629 | |||||
At applicable statutory tax rates | 5,996 | 32,750 | 39,382 | |||||
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions | 18,198 | (49,789 | ) | (28,027 | ) | |||
Other | 274 | 272 | (1,182 | ) | ||||
Tax expense (recovery) related to the current year | 24,468 | (16,767 | ) | 10,173 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Balance of unrecognized tax benefits as at January 1 | 18,390 | 20,335 | 20,304 | |||||
Increases for positions related to the current year | 6,422 | 4,578 | 3,643 | |||||
Changes for positions taken in prior years | (3,729 | ) | (2,965 | ) | 1,015 | |||
Decreases related to statute of limitations | (1,591 | ) | (3,558 | ) | (4,627 | ) | ||
Balance of unrecognized tax benefits as at December 31 | 19,492 | 18,390 | 20,335 |
21. | Pension Benefits |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | ||||
Change in benefit obligation: | |||||
Beginning balance | 82,415 | 121,604 | |||
Service cost | 5,372 | 7,726 | |||
Interest cost | 2,270 | 2,532 | |||
Contributions by plan participants | 99 | 365 | |||
Actuarial (gain) loss | (2,943 | ) | (9,165 | ) | |
Benefits paid | (7,979 | ) | (9,651 | ) | |
Plan settlements and amendments | (34,725 | ) | (14,891 | ) | |
Foreign currency exchange rate changes | 893 | (16,001 | ) | ||
Other | (95 | ) | (104 | ) | |
Ending balance | 45,307 | 82,415 | |||
Change in fair value of plan assets: | |||||
Beginning balance | 73,075 | 97,158 | |||
Actual return on plan assets | 664 | 2,221 | |||
Contributions by the employer | 5,517 | 7,858 | |||
Contributions by plan participants | 99 | 365 | |||
Benefits paid | (7,974 | ) | (9,646 | ) | |
Plan settlements and amendments | (28,887 | ) | (11,420 | ) | |
Plan assets assumed on acquisition | — | 203 | |||
Foreign currency exchange rate changes | 726 | (13,096 | ) | ||
Other | (445 | ) | (568 | ) | |
Ending balance | 42,775 | 73,075 | |||
Funded status deficiency | (2,532 | ) | (9,340 | ) | |
Amounts recognized in the balance sheets: | |||||
Other long-term liabilities | 2,532 | 9,340 | |||
Accumulated other comprehensive loss: | |||||
Net actuarial losses (1) | (13,775 | ) | (17,374 | ) |
(1) | As at December 31, 2016, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2016 is $0.5 million. |
December 31, 2016 $ | December 31, 2015 $ | ||||
Benefit obligation | 29,737 | 61,124 | |||
Fair value of plan assets | 26,296 | 50,517 | |||
Accumulated benefit obligation | 828 | 1,821 | |||
Fair value of plan assets | — | 925 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Net periodic pension cost: | ||||||||
Service cost | 5,372 | 7,726 | 8,800 | |||||
Interest cost | 2,270 | 2,532 | 4,975 | |||||
Expected return on plan assets | (2,718 | ) | (2,895 | ) | (5,333 | ) | ||
Amortization of net actuarial loss | 469 | 1,538 | 7,148 | |||||
Plan settlement | (3,899 | ) | (140 | ) | (3,332 | ) | ||
Other | 445 | 568 | 557 | |||||
Net cost | 1,939 | 9,329 | 12,815 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | ||||||
Other comprehensive income (loss): | ||||||||
Net gain (loss) arising during the period | 7,035 | 13,288 | (14,954 | ) | ||||
Amortization of net actuarial loss | 469 | 1,538 | 7,148 | |||||
Plan settlement | (3,905 | ) | (140 | ) | (3,332 | ) | ||
Total income (loss) | 3,599 | 14,686 | (11,138 | ) |
Year | Pension Benefit Payments $ | |
2017 | 2,497 | |
2018 | 2,156 | |
2019 | 2,098 | |
2020 | 2,123 | |
2021 | 2,129 | |
2021 – 2025 | 11,908 | |
Total | 22,911 |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | ||||
Pooled Funds | 28,012 | 52,150 | |||
Mutual Funds | |||||
Equity investments | 7,972 | 11,089 | |||
Debt securities | 1,772 | 2,512 | |||
Real estate | 1,919 | 2,929 | |||
Cash and money market | 1,181 | 1,674 | |||
Other | 1,919 | 2,720 | |||
Total | 42,775 | 73,075 |
(1) | The Company does not control the investment mix or strategy of the pooled funds. The pooled funds guarantee a minimum rate of return. If actual investment returns are less than the guarantee minimum rate, then the provider’s statutory reserves are used to top up the shortfall. The pooled funds primarily invest in hold to maturity bonds, real estate and other fixed income investments, which are expected to provide a stable rate of return. |
(2) | The mutual funds primary aim is to provide investors with an exposure to a diversified mix of predominantly growth oriented assets (56%) with moderate to high volatility and some defensive assets (44%). |
December 31, 2016 | December 31, 2015 | ||
Discount rates | 2.9% | 3.0% | |
Rate of compensation increase | 2.5% | 3.4% |
Year Ended December 31, 2016 $ | Year Ended December 31, 2015 $ | Year Ended December 31, 2014 $ | |||
Discount rates | 2.9% | 3.0% | 2.9% | ||
Rate of compensation increase | 2.5% | 3.4% | 4.2% | ||
Expected long-term rates of return | 4.2% | 4.0% | 4.0% |
(1) | To the extent the expected return on plan assets varies from the actual return, an actuarial gain or loss results. The expected long-term rates of return on plan assets are based on the estimated weighted-average long-term returns of major asset classes. In determining asset class returns, the Company takes into account long-term returns of major asset classes, historical performance of plan assets, as well as the current interest rate environment. The asset class returns are weighted based on the target asset allocations. |
22. | Equity-accounted Investments |
As at December 31, | |||||||
Investments in Equity-accounted Investees (1) | Ownership Percentage | 2016 $ | 2015 $ | ||||
Teekay Offshore - Offshore Production | |||||||
Libra Joint Venture | 50% | 69,972 | 17,952 | ||||
Itajai | 50% | 71,827 | 59,692 | ||||
Teekay LNG - Liquefied Gas | |||||||
Angola LNG Carriers | 33% | 63,673 | 56,203 | ||||
BG (note 3f) | 20% - 30% | 33,594 | 25,574 | ||||
Exmar LNG Joint Venture | 50% | 79,577 | 77,844 | ||||
Exmar LPG Joint Venture | 50% | 165,064 | 163,730 | ||||
RasGas3 Joint Venture | 40% | 173,037 | 160,684 | ||||
Teekay LNG - Marubeni Joint Venture | 52% | 294,764 | 283,589 | ||||
Yamal LNG Joint Venture (note 3e) | 50% | 152,927 | 100,084 | ||||
Bahrain LNG Joint Venture | 30% | 64,003 | — | ||||
Teekay Tanker - Conventional Tankers | |||||||
TIL (note 3h) | 11% | 47,710 | 44,195 | ||||
High Q Joint Venture | 50% | 22,025 | 21,166 | ||||
Teekay Parent - Offshore Production | |||||||
Sevan | 43% | 22,180 | 22,581 | ||||
Teekay Parent - Conventional Tankers | |||||||
TIL (note 3h) | 8% | 36,699 | 34,224 | ||||
Other | 50% | 2,802 | 16,072 | ||||
1,299,854 | 1,083,590 |
(1) | Investments in equity-accounted investees is presented in prepaid expenses and other, loans to equity-accounted investees, equity-accounted investments and accrued liabilities and other in the Company’s consolidated balance sheets. |
As at December 31, | |||||
2016 | 2015 | ||||
Cash and restricted cash | 500,355 | 386,727 | |||
Other assets - current | 150,378 | 162,414 | |||
Vessels and equipment | 4,655,170 | 3,936,718 | |||
Net investment in direct financing leases | 1,776,954 | 1,813,991 | |||
Other assets - non-current | 74,096 | 80,987 | |||
Current portion of long-term debt and obligations under capital lease | 360,942 | 345,336 | |||
Other liabilities - current and obligations under capital lease | 160,312 | 162,076 | |||
Long-term debt and obligations under capital lease | 4,208,214 | 3,459,187 | |||
Other liabilities - non-current | 213,060 | 447,947 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 (1) | ||||||
Revenues | 882,650 | 985,318 | 998,655 | |||||
Income from vessel operations | 365,472 | 433,023 | 454,135 | |||||
Realized and unrealized (loss) gain on derivative instruments | (10,900 | ) | (38,955 | ) | (58,884 | ) | ||
Net income | 239,766 | 275,259 | 300,837 |
23. | Subsequent Events |
a) | On January 23, 2017, Teekay LNG issued in the Norwegian bond market NOK 300 million (equivalent to approximately $36 million) in new senior unsecured bonds through an add-on to its existing NOK bonds due in October 2021, priced at 103.75% of face value. All principal and interest payments have been economically swapped into U.S. Dollars with a fixed interest rate of 7.69%. |
b) | In late October 2016, Teekay Tankers entered into agreements to sell two Suezmax tankers, the Ganges Spirit and the Yamuna Spirit, for an aggregate sales price of $33.8 million. The Ganges Spirit completed its sale in January 2017. The vessel was classified as held for sale on the consolidated balance sheet as at December 31, 2016 and its net book value was written down to its sales price. In February 2017 the sales price of the Yamuna Spirit was reduced to $15.7 million and delivery to its new owner was completed in March 2017. |
c) | In January 2017 Teekay Tankers sold approximately 3.8 million shares of its Class A common stock under its COP for net proceeds of $8.6 million, net of issuance costs. In addition, Teekay Tankers issued 2.2 million new shares of its Class A common stock to Teekay in a private placement for gross proceeds of $5.0 million and the price per share was set to equal the weighted average price of Teekay Tankers' Class A common stock for the ten trading days ending on the date of issuance. |
d) | On February 28, 2017, Teekay LNG took delivery of its third MEGI LNG carrier newbuilding, the Torben Spirit, which commenced its 10-month plus one-year option charter contract with a major energy company on March 3, 2017. Teekay LNG partially financed this MEGI LNG carrier newbuilding through a sales-leaseback transaction of approximately $125 million. |
e) | On December 21, 2016, the RasGas 3 Joint Venture, of which Teekay LNG has a 40% ownership interest, completed its debt refinancing by entering into a $723 million secured term loan facility maturing in 2026 which replaced its outstanding term loan of $610 million. As a result, the RasGas 3 Joint Venture distributed $100 million in February 2017 to its shareholders, of which Teekay LNG's proportionate share was $40 million. |
f) | On March 31, 2017, the Teekay LNG-Marubeni Joint Venture completed the refinancing of its existing $396 million debt facility by entering into a new $335 million U.S. Dollar-denominated term loan maturing in September 2019. The term loan is collateralized by first-priority statutory mortgages over the Marib Spirit, Arwa Spirit, Methane Spirit and Magellan Spirit, first priority pledges or charges of all the issued shares of the respective vessel owning subsidiaries, and guaranteed by Teekay LNG and Marubeni Corporation on a several basis. As part of the completed refinancing, Teekay LNG invested $57 million of additional equity, based on its proportionate ownership interest, into the Teekay LNG-Marubeni Joint Venture. |
The following is a list of the Company’s subsidiaries as at December 31, 2016, excluding certain subsidiaries that in aggregate are not significant. | ||
Name of Subsidiary | State or Jurisdiction of Incorporation | Proportion of Ownership Interest |
Alliance Chartering Pty Ltd. | Australia | 100.0% |
Australian Tankship Agency Pty. Ltd. | Australia | 100.0% |
Banff L.L.C. | Marshall Islands | 100.0% |
C VLCC L.L.C. | Marshall Islands | 100.0% |
Conoco Shipping & Marine Development L.L.C. | Marshall Islands | 100.0% |
Gemini Pool L.L.C. | Marshall Islands | 100.0% |
Golar-Nor (UK) Limited | United Kingdom | 100.0% |
Hummingbird Holdings L.L.C. | Marshall Islands | 100.0% |
Hummingbird Spirit L.L.C. | Marshall Islands | 100.0% |
Iliad International AS | Norway | 100.0% |
Iliad International Inc. | Marshall Islands | 100.0% |
Krepako Inc. | Marshall Islands | 100.0% |
Krepanor AS | Norway | 100.0% |
Petrojarl IV DA | Norway | 100.0% |
Polarc L.L.C. | Marshall Islands | 100.0% |
Taurus Tankers Ltd. | United Kingdom | 100.0% |
Teekay Acquisition Holdings L.L.C. | Marshall Islands | 100.0% |
Teekay Bulkers Investments Ltd. | Marshall Islands | 100.0% |
Teekay Bulkers Management Services Ltd. | Marshall Islands | 100.0% |
Teekay Business Process Services, Inc. | Philippines | 100.0% |
Teekay Crewing Services Pty Ltd. | Australia | 100.0% |
Teekay Cyprus Limited | Cyprus | 100.0% |
Teekay Delaware Chartering Services L.L.C. | USA | 100.0% |
Teekay Do Brasil Servicos Maritimos Ltda. | Brazil | 100.0% |
Teekay Finance Limited | Bermuda | 100.0% |
Teekay GP L.L.C. | Marshall Islands | 100.0% |
Teekay Holdings Australia Pty Ltd. | Australia | 100.0% |
Teekay Holdings Limited | Bermuda | 100.0% |
Teekay Hummingbird Production Limited | United Kingdom | 100.0% |
Teekay International Ship Chartering Services Inc. | Barbados | 100.0% |
Teekay Lightering Services L.L.C. | Marshall Islands | 100.0% |
Teekay Marine Pty Ltd. | Australia | 100.0% |
Teekay Marine Services (Shanghai) Co. Ltd. | China | 100.0% |
Teekay Norway (Marine HR) AS | Norway | 100.0% |
Teekay Offshore Crewing AS | Norway | 100.0% |
Teekay Offshore GP L.L.C. | Marshall Islands | 100.0% |
Teekay Petrojarl Floating Production (UK) Ltd. | United Kingdom | 100.0% |
Teekay Petrojarl Offshore Crew AS | Norway | 100.0% |
Teekay Petrojarl Offshore L.L.C. | Marshall Islands | 100.0% |
Teekay Petrojarl Production AS | Norway | 100.0% |
Teekay Petrojarl UK Limited | United Kingdom | 100.0% |
Teekay Services Holdings Cooperatief U.A. | Netherlands | 100.0% |
Teekay Shipbuilding Supervision Services L.L.C. | Marshall Islands | 100.0% |
Teekay Shipping (Australia) Pty Ltd. | Australia | 100.0% |
Teekay Shipping (Barbados) Ltd. | Barbados | 100.0% |
Teekay Shipping (Canada) Ltd. | Canada | 100.0% |
Teekay Shipping (Glasgow) Ltd. | United Kingdom | 100.0% |
Teekay Shipping (India) Private Limited | India | 100.0% |
Teekay Shipping (Singapore) Pte Ltd. | Singapore | 100.0% |
Teekay Shipping (UK) Ltd. | United Kingdom | 100.0% |
Teekay Shipping (USA) Inc. | USA | 100.0% |
Teekay Shipping Limited | Bermuda | 100.0% |
Teekay Shipping Norway AS | Norway | 100.0% |
Teekay Tankers Management Services Ltd. | Marshall Islands | 100.0% |
TPO Investments AS | Norway | 100.0% |
TPO Investments Inc. | Marshall Islands | 100.0% |
Ugland Stena Storage AS | Norway | 100.0% |
VLCC C Investment L.L.C. | Marshall Islands | 100.0% |
VSSI Guaranty L.L.C. | USA | 100.0% |
Remora AS | Norway | 88.0% |
Remora Hiload Apu AS | Norway | 88.0% |
Remora Hiload Dp No. 1 AS | Norway | 88.0% |
Remora Hiload Dp Technology AS | Norway | 88.0% |
Remora Hiload Mv AS | Norway | 88.0% |
Remora Marine Services AS | Norway | 88.0% |
Remora Shipping Ltd. | Cyprus | 88.0% |
Taurus Tankers L.L.C. | Marshall Islands | 62.7% |
Teekay Chartering Limited | Marshall Islands | 62.7% |
Teekay Marine (Singapore) Pte. Ltd. | Singapore | 62.7% |
Teekay Marine Ltd. | Marshall Islands | 62.7% |
Teekay Tanker Operations Ltd. | Marshall Islands | 62.7% |
Arctic Spirit L.L.C. | Marshall Islands | 33.7% |
DHJS 2007-001 L.L.C. | Marshall Islands | 33.7% |
DHJS 2007-002 L.L.C. | Marshall Islands | 33.7% |
DMSE Option Vessel No.1 L.L.C. | Marshall Islands | 33.7% |
DMSE Option Vessel No.2 L.L.C. | Marshall Islands | 33.7% |
DMSE Option Vessel No.3 L.L.C. | Marshall Islands | 33.7% |
DSME Hull No. 2416 L.L.C. | Marshall Islands | 33.7% |
DSME Hull No. 2417 L.L.C. | Marshall Islands | 33.7% |
Polar Spirit L.L.C. | Marshall Islands | 33.7% |
Taizhou Hull No. WZL 0501 L.L.C. | Marshall Islands | 33.7% |
Taizhou Hull No. WZL 0502 L.L.C. | Marshall Islands | 33.7% |
Taizhou Hull No. WZL 0503 L.L.C. | Marshall Islands | 33.7% |
Teekay LNG Holdco L.L.C. | Marshall Islands | 33.7% |
Teekay LNG Holdings L.P. | USA | 33.7% |
Teekay Tangguh Borrower L.L.C. | Marshall Islands | 33.7% |
Teekay Tangguh Holdings Corporation | Marshall Islands | 33.7% |
Wilforce L.L.C. | Marshall Islands | 33.7% |
Wilpride L.L.C. | Marshall Islands | 33.7% |
Zhonghua Hull No. 451 L.L.C. | Marshall Islands | 33.7% |
African Spirit L.L.C. | Marshall Islands | 33.1% |
Alexander Spirit L.L.C. | Marshall Islands | 33.1% |
Asian Spirit L.L.C. | Marshall Islands | 33.1% |
Bermuda Spirit L.L.C. | Marshall Islands | 33.1% |
Creole Spirit L.L.C. | Marshall Islands | 33.1% |
DSME Hull No. 2411 L.L.C. | Marshall Islands | 33.1% |
DSME Hull No. 2461 L.L.C. | Marshall Islands | 33.1% |
European Spirit L.L.C. | Marshall Islands | 33.1% |
H.H.I. Hull No. S856 LLC | Marshall Islands | 33.1% |
H.H.I. Hull No. S857 LLC | Marshall Islands | 33.1% |
Hamilton Spirit L.L.C. | Marshall Islands | 33.1% |
Naviera Teekay Gas II, S.L. | Spain | 33.1% |
Naviera Teekay Gas III, S.L. | Spain | 33.1% |
Naviera Teekay Gas IV, S.L. | Spain | 33.1% |
Naviera Teekay Gas, S.L. | Spain | 33.1% |
Oak Spirit L.L.C. | Marshall Islands | 33.1% |
Teekay BLT Finance Corporation | Marshall Islands | 33.1% |
Teekay II Iberia, S.L. | Spain | 33.1% |
Teekay LNG Bahrain Operations L.L.C. | Bahrain | 33.1% |
Teekay LNG Finco L.L.C. | Marshall Islands | 33.1% |
Teekay LNG Operating L.L.C. | Marshall Islands | 33.1% |
Teekay LNG Partners L.P. (1) | Marshall Islands | 33.1% |
Teekay LNG US G.P. L.L.C. | Marshall Islands | 33.1% |
Teekay Luxembourg S.A.R.L. | Luxembourg | 33.1% |
Teekay Nakilat Holdings (III) Corporation | Marshall Islands | 33.1% |
Teekay Nakilat Holdings Corporation | Marshall Islands | 33.1% |
Teekay Servicios Maritimos, S.L. | Spain | 33.1% |
Teekay Shipping Spain, S.L. | Spain | 33.1% |
Teekay Spain, S.L. | Spain | 33.1% |
ALP Ace B.V. | Netherlands | 29.0% |
ALP Centre B.V. | Netherlands | 29.0% |
ALP Defender B.V. | Netherlands | 29.0% |
ALP Forward B.V. | Netherlands | 29.0% |
ALP Guard B.V. | Netherlands | 29.0% |
ALP Ippon B.V. | Netherlands | 29.0% |
ALP Keeper B.V. | Netherlands | 29.0% |
ALP Maritime Contractors B.V. | Netherlands | 29.0% |
ALP Maritime Group B.V. | Netherlands | 29.0% |
ALP Maritime Holding B.V. | Netherlands | 29.0% |
ALP Maritime Services B.V. | Netherlands | 29.0% |
ALP Ocean Towage Holding B.V. | Netherlands | 29.0% |
ALP Striker B.V. | Netherlands | 29.0% |
ALP Sweeper B.V. | Netherlands | 29.0% |
ALP Winger B.V. | Netherlands | 29.0% |
Amundsen Spirit L.L.C. | Marshall Islands | 29.0% |
Apollo Spirit L.L.C. | Marshall Islands | 29.0% |
Bossa Nova Spirit L.L.C. | Marshall Islands | 29.0% |
Clipper L.L.C. | Marshall Islands | 29.0% |
Dampier Spirit L.L.C. | Marshall Islands | 29.0% |
Gina Krog L.L.C. | Marshall Islands | 29.0% |
Gina Krog Offshore Pte. Ltd. | Singapore | 29.0% |
Knarr L.L.C. | Marshall Islands | 29.0% |
Lambada Spirit L.L.C. | Marshall Islands | 29.0% |
Logitel Offshore Holding AS | Norway | 29.0% |
Logitel Offshore Holdings Pte. Ltd. | Singapore | 29.0% |
Logitel Offshore L.L.C. | Marshall Islands | 29.0% |
Logitel Offshore Norway AS | Norway | 29.0% |
Logitel Offshore Pte. Ltd. | Singapore | 29.0% |
Logitel Offshore Rig I Pte. Ltd. | Singapore | 29.0% |
Logitel Offshore Rig II Pte. Ltd. | Singapore | 29.0% |
Logitel Offshore Rig III L.L.C. | Marshall Islands | 29.0% |
Logitel Offshore Rig IV L.L.C. | Marshall Islands | 29.0% |
Nansen Spirit L.L.C. | Marshall Islands | 29.0% |
Navion Bergen AS | Norway | 29.0% |
Navion Bergen L.L.C. | Marshall Islands | 29.0% |
Navion Gothenburg AS | Norway | 29.0% |
Navion Offshore Loading AS | Norway | 29.0% |
Norsk Teekay AS | Norway | 29.0% |
Norsk Teekay Holdings Ltd. | Marshall Islands | 29.0% |
Pattani Spirit L.L.C. | Marshall Islands | 29.0% |
Peary Spirit L.L.C. | Marshall Islands | 29.0% |
Petrojarl I L.L.C. | Marshall Islands | 29.0% |
Petrojarl I Production AS | Norway | 29.0% |
Piranema L.L.C. | Marshall Islands | 29.0% |
Piranema Production AS | Norway | 29.0% |
Samba Spirit L.L.C. | Marshall Islands | 29.0% |
Scott Spirit L.L.C. | Marshall Islands | 29.0% |
Sertanejo Spirit L.L.C. | Marshall Islands | 29.0% |
Siri Holdings L.L.C. | Marshall Islands | 29.0% |
Teekay (Atlantic) Chartering ULC | Canada | 29.0% |
Teekay (Atlantic) Management ULC | Canada | 29.0% |
Teekay Al Rayyan L.L.C. | Marshall Islands | 29.0% |
Teekay Australia Offshore Holdings Pty Ltd. | Australia | 29.0% |
Teekay European Holdings, S.A.R.L. | Luxembourg | 29.0% |
Teekay FSO Finance Pty Ltd. | Australia | 29.0% |
Teekay Grand Banks AS | Norway | 29.0% |
Teekay Grand Banks Shipping AS | Norway | 29.0% |
Teekay Hiload L.L.C. | Marshall Islands | 29.0% |
Teekay Knarr AS | Norway | 29.0% |
Teekay Navion Offshore Loading Pte. Ltd. | Singapore | 29.0% |
Teekay Netherlands European Holdings B.V. | Netherlands | 29.0% |
Teekay Nordic Holdings Inc. | Marshall Islands | 29.0% |
Teekay Norway AS | Norway | 29.0% |
Teekay Norway HiLoad AS | Norway | 29.0% |
Teekay Offshore Chartering L.L.C. | Marshall Islands | 29.0% |
Teekay Offshore European Holdings Cooperatief U.A. | Netherlands | 29.0% |
Teekay Offshore Finance Corp. | Marshall Islands | 29.0% |
Teekay Offshore Group Ltd. | Marshall Islands | 29.0% |
Teekay Offshore Holdings L.L.C. | Marshall Islands | 29.0% |
Teekay Offshore Operating GP L.L.C. | Marshall Islands | 29.0% |
Teekay Offshore Operating Holdings L.L.C. | Marshall Islands | 29.0% |
Teekay Offshore Operating L.P. | Marshall Islands | 29.0% |
Teekay Offshore Operating Pte. Ltd. | Singapore | 29.0% |
Teekay Offshore Partners L.P. | Marshall Islands | 29.0% |
Teekay Petrojarl I Servicos de Petroleo Ltda. | Brazil | 29.0% |
Teekay Petrojarl Offshore Siri AS | Norway | 29.0% |
Teekay Petrojarl Producao Petrolifera Do Brasil Ltda. | Brazil | 29.0% |
Teekay Piranema Servicios de Petroleo Ltda. | Brazil | 29.0% |
Teekay Shipping Partners Holding AS | Norway | 29.0% |
Teekay Shuttle Tanker Finance L.L.C. | Marshall Islands | 29.0% |
Teekay Voyageur Production Ltd. | United Kingdom | 29.0% |
Tiro Sidon Holdings L.L.C. | Marshall Islands | 29.0% |
Tiro Sidon L.L.C. | Marshall Islands | 29.0% |
Tiro Sidon UK L.L.P. | United Kingdom | 29.0% |
TPO Siri L.L.C. | Marshall Islands | 29.0% |
Ugland Nordic Shipping AS | Norway | 29.0% |
Varg L.L.C. | Marshall Islands | 29.0% |
Varg Production AS | Norway | 29.0% |
Voyageur L.L.C. | Marshall Islands | 29.0% |
KS Apollo Spirit | Norway | 25.8% |
Americas Spirit L.L.C. | Marshall Islands | 25.4% |
Ashkini Spirit L.L.C. | Marshall Islands | 25.4% |
Athens Spirit L.L.C. | Marshall Islands | 25.4% |
Atlanta Spirit L.L.C. | Marshall Islands | 25.4% |
Australian Spirit L.L.C. | Marshall Islands | 25.4% |
Axel Spirit L.L.C. | Marshall Islands | 25.4% |
Barcelona Spirit L.L.C. | Marshall Islands | 25.4% |
Beijing Spirit L.L.C. | Marshall Islands | 25.4% |
Donegal Spirit L.L.C. | Marshall Islands | 25.4% |
Erik Spirit L.L.C. | Marshall Islands | 25.4% |
Esther Spirit L.L.C. | Marshall Islands | 25.4% |
Everest Spirit Holding L.L.C. | Marshall Islands | 25.4% |
Explorer Spirit L.L.C. | Marshall Islands | 25.4% |
Freeport Landholdings L.L.C. | USA | 25.4% |
Galway Spirit L.L.C. | Marshall Islands | 25.4% |
Ganges Spirit L.L.C. | Marshall Islands | 25.4% |
Godavari Spirit L.L.C. | Marshall Islands | 25.4% |
Helga Spirit L.L.C. | Marshall Islands | 25.4% |
Hugli Spirit L.L.C. | Marshall Islands | 25.4% |
Iskmati Spirit L.L.C. | Marshall Islands | 25.4% |
Kanata Spirit Holding L.L.C. | Marshall Islands | 25.4% |
Kareela Spirit Holding L.L.C. | Marshall Islands | 25.4% |
Kaveri Spirit L.L.C. | Marshall Islands | 25.4% |
Kyeema Spirit Holding L.L.C. | Marshall Islands | 25.4% |
Limerick Spirit L.L.C. | Marshall Islands | 25.4% |
London Spirit L.L.C. | Marshall Islands | 25.4% |
Los Angeles Spirit L.L.C. | Marshall Islands | 25.4% |
Mahanadi Spirit L.L.C. | Marshall Islands | 25.4% |
Matterhorn Spirit L.L.C. | Marshall Islands | 25.4% |
Montreal Spirit L.L.C. | Marshall Islands | 25.4% |
Moscow Spirit L.L.C. | Marshall Islands | 25.4% |
Narmada Spirit L.L.C. | Marshall Islands | 25.4% |
Nassau Spirit Holding L.L.C. | Marshall Islands | 25.4% |
Navigator Spirit L.L.C. | Marshall Islands | 25.4% |
Pinnacle Spirit L.L.C. | Marshall Islands | 25.4% |
Rio Spirit L.L.C. | Marshall Islands | 25.4% |
Seoul Spirit L.L.C. | Marshall Islands | 25.4% |
SPT Marine Transfer Services Ltd. | Bermuda | 25.4% |
STX Hull No. S1672 L.L.C. | Marshall Islands | 25.4% |
STX Hull No. S1673 L.L.C. | Marshall Islands | 25.4% |
STX Hull No. S1674 L.L.C. | Marshall Islands | 25.4% |
STX Hull No. S1675 L.L.C. | Marshall Islands | 25.4% |
Summit Spirit L.L.C. | Marshall Islands | 25.4% |
Sydney Spirit L.L.C. | Marshall Islands | 25.4% |
Teekay Guardian L.L.C. | Marshall Islands | 25.4% |
Teekay Marine Holdings Ltd. | Marshall Islands | 25.4% |
Teekay Marine Solutions (Bermuda) Ltd. | Bermuda | 25.4% |
Teekay Marine Solutions Inc. | USA | 25.4% |
Teekay Marine Solutions Ltd. | United Kingdom | 25.4% |
Teekay Tankers Chartering L.L.C. | Marshall Islands | 25.4% |
Teekay Tankers Holdings Ltd. | Marshall Islands | 25.4% |
Teekay Tankers HZ Hull No. H 1586 L.L.C. | Marshall Islands | 25.4% |
Teekay Tankers HZ Hull No. H 1587 L.L.C. | Marshall Islands | 25.4% |
Teekay Tankers HZ Hull No. H 1592 L.L.C. | Marshall Islands | 25.4% |
Teekay Tankers HZ Hull No. H 1593 L.L.C. | Marshall Islands | 25.4% |
Teekay Tankers Ltd. (2) | Marshall Islands | 25.4% |
Teekay Tankers TS Hull No. S-1415 L.L.C. | Marshall Islands | 25.4% |
Teekay Workboats L.L.C. | USA | 25.4% |
Teesta Spirit L.L.C. | Marshall Islands | 25.4% |
Tokyo Spirit L.L.C. | Marshall Islands | 25.4% |
VLCC A Investment L.L.C. | Marshall Islands | 25.4% |
VLCC B Investment L.L.C. | Marshall Islands | 25.4% |
Yamuna Spirit L.L.C. | Marshall Islands | 25.4% |
Zenith Spirit L.L.C. | Marshall Islands | 25.4% |
Teekay Shipping (Philippines) Inc. | Philippines | 25.0% |
Tangguh Hiri Finance Limited | United Kingdom | 23.6% |
Tangguh Hiri Operating Limited | United Kingdom | 23.6% |
Tangguh Sago Finance Limited | United Kingdom | 23.6% |
Tangguh Sago Operating Limited | United Kingdom | 23.6% |
Teekay BLT Corporation | Marshall Islands | 23.6% |
Al Areesh Inc. | Marshall Islands | 23.1% |
Al Areesh L.L.C. | Marshall Islands | 23.1% |
Al Daayen Inc. | Marshall Islands | 23.1% |
Al Daayen L.L.C. | Marshall Islands | 23.1% |
Al Marrouna Inc. | Marshall Islands | 23.1% |
Al Marrouna L.L.C. | Marshall Islands | 23.1% |
Nakilat Holdco L.L.C. | Marshall Islands | 23.1% |
Teekay Nakilat (II) Limited | United Kingdom | 23.1% |
Teekay Nakilat Corporation | Marshall Islands | 23.1% |
Teekay Nakilat Replacement Purchaser L.L.C. | Marshall Islands | 23.1% |
Partrederiet Teekay Shipping Partners DA | Norway | 19.3% |
Navion Gothenburg L.L.C. | Marshall Islands | 14.5% |
Nordic Rio L.L.C. | Marshall Islands | 14.5% |
Partrederiet Stena Ugland Shuttle Tankers I DA | Norway | 14.5% |
Partrederiet Stena Ugland Shuttle Tankers II DA | Norway | 14.5% |
Partrederiet Stena Ugland Shuttle Tankers III DA | Norway | 14.5% |
Stena Spirit L.L.C. | Isle of Man | 14.5% |
(1) | The partnership is controlled by its general partner. Teekay Corporation has a 100% beneficial ownership in the general partner. In limited cases, approval of a majority or supermajority of the common unitholders (in some cases excluding units held by the general partner and its affiliates) is required to approve certain actions. |
(2) | Proportion of voting power held is 52.9%. |
1 | I have reviewed this report on Form 20-F of Teekay Corporation (the “company”); |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4 | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; |
5 | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Dated: April 12, 2017 | By: | /s/ Kenneth Hvid | ||||
Kenneth Hvid | ||||||
President and Chief Executive Officer |
1 | I have reviewed this report on Form 20-F of Teekay Corporation (the “company”); |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4 | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the company and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; |
5 | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Dated: April 12, 2017 | By: | /s/ Vincent Lok | ||||
Vincent Lok | ||||||
Executive Vice President and Chief Financial Officer |
Dated: April 12, 2017 | |||
By: | /s/ Kenneth Hvid | ||
Kenneth Hvid | |||
President and Chief Executive Officer |
Dated: April 12, 2017 | |||
By: | /s/ Vincent Lok | ||
Vincent Lok | |||
Executive Vice President and Chief Financial Officer |
• | our reports dated April 12, 2017, with respect to the consolidated balance sheets of the Company as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, cash flows and changes in total equity for each of the years in the three-year period ended December 31, 2016, and the effectiveness of internal control over financial reporting as of December 31, 2016; and |
• | our report dated April 21, 2015, with respect to the consolidated statement of financial position of Exmar LPG BVBA as at December 31, 2014 and the consolidated statements of income, comprehensive income, equity and cash flows for the year ended December 31, 2014 |
(Unaudited) | (Unaudited) | ||
As of December 31, 2016 | As of December 31, 2015 | ||
Assets | |||
Current: | |||
Cash and cash equivalents | 32,394 | 74,014 | |
Accounts receivable, including non-trade of $12,005 (2015 - $11,083) (note 11c) | 22,959 | 12,954 | |
Asset classified as held for sale (note 5) | 17,730 | - | |
Other current assets (note 6) | 3,372 | 3,021 | |
Total current assets | 76,455 | 89,989 | |
Non-current assets: | |||
Vessels, net of accumulated depreciation (note 4) | 580,481 | 488,125 | |
Derivative financial instruments (notes 12 and 15) | 2,486 | - | |
Total non-current assets | 582,967 | 488,125 | |
Total assets | 659,422 | 578,114 | |
Liabilities and Equity | |||
Current: | |||
Current portion of long-term debt (note 7a) | 54,218 | 35,867 | |
Current portion of finance lease obligations (note 7b) | 2,121 | 2,333 | |
Shareholders' loans (note 8) | 106,735 | 116,385 | |
Accounts payable (note 11b) | 9,086 | 6,570 | |
Other current liabilities (note 9) | 1,663 | 2,031 | |
Total current liabilities | 173,823 | 163,186 | |
Non-current liabilities: | |||
Long-term debt (note 7a) | 342,187 | 286,721 | |
Finance lease obligations (note 7b) | 9,395 | 11,278 | |
Derivative financial instruments (notes 12 and 15) | 581 | 1,987 | |
Total liabilities | 525,986 | 463,172 | |
Equity: | |||
Share capital (note 10) | 132,832 | 132,832 | |
Reserve for equity adjustment on acquisition | (106,349) | (106,349) | |
Retained earnings | 105,048 | 90,446 | |
Accumulated other comprehensive income/(loss) (note 15) | 1,905 | (1,987) | |
Total equity | 133,436 | 114,942 | |
Total liabilities and equity | 659,422 | 578,114 |
(Unaudited) | (Unaudited) | ||
Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | |
STATEMENT OF INCOME | |||
Operations | |||
Revenue | 161,993 | 203,765 | 198,843 |
Gain on sales of vessels (note 4) | - | 406 | 65,563 |
Other operating income | 5,604 | - | 650 |
Vessel operating expenses (note 11a) | (81,689) | (95,164) | (115,121) |
Administrative expenses (note 11a) | (1,208) | (1,442) | (1,442) |
Depreciation (note 4) | (33,966) | (30,716) | (28,244) |
Other operating expenses | (309) | (228) | (268) |
Result from vessel operations | 50,425 | 76,621 | 119,981 |
Finance costs | (15,442) | (10,410) | (9,777) |
Other financial items, net | (1,297) | (1,347) | (905) |
Result before taxes | 33,686 | 64,864 | 109,299 |
Income taxes (note 3) | (84) | (131) | (81) |
Result for the period attributable to the owners of the company | 33,602 | 64,733 | 109,218 |
STATEMENT OF COMPREHENSIVE INCOME | |||
Result for the period | 33,602 | 64,733 | 109,218 |
Other comprehensive income | |||
Items that are or may be reclassified to profit or loss | |||
Net change in fair value of cash flow hedges - hedge accounting | 3,892 | (1,987) | - |
Other comprehensive income/(loss) | 3,892 | (1,987) | - |
Total comprehensive income | 37,494 | 62,746 | 109,218 |
(Unaudited) | (Unaudited) | |||
Year Ended December 31, 2016 | Year Ended December 31, 2015 | Year Ended December 31, 2014 | ||
Cash provided by (used for) | ||||
Operating Activities | ||||
Result for the period | 33,602 | 64,733 | 109,218 | |
Adjustments to reconcile net income to cash provided by operating activities: | ||||
Depreciation | 33,966 | 30,716 | 28,244 | |
Gain on sale of vessels | - | (406) | (65,563) | |
Finance costs | 15,442 | 10,410 | 9,777 | |
Other financial expenses | 1,039 | 1,001 | - | |
Income taxes | - | 131 | 81 | |
Changes in operating assets and liabilities: | ||||
(Increase)/decrease in accounts receivable | (10,005 | ) | 2,201 | 1,339 |
(Increase)/decrease in other current assets | (351) | 3,642 | 2,892 | |
Increase/(decrease) in accounts payable | 2,516 | (319) | 122 | |
Increase/(decrease) in other current liabilities | (29) | (109) | (1,270) | |
Taxes paid | - | - | (85) | |
Finance costs paid | (14,356) | (9,524) | (9,926) | |
Dry dock expenditures (note 4) | (9,987) | (12,626) | (11,397) | |
Other | - | 18 | 78 | |
Cash provided by operating activities | 51,837 | 89,868 | 63,510 | |
Investing Activities | ||||
Capital expenditures (note 4) | (134,065) | (79,694) | (129,113) | |
Proceeds from sales of vessels (note 4) | - | 13,720 | 149,986 | |
Net cash (used in) provided by investing activities | (134,065) | (65,974) | 20,873 | |
Financing Activities | ||||
Proceeds from long-term debt | 112,450 | 378,216 | 105,000 | |
Repayments of long-term debt | (39,763) | (261,552) | (80,884) | |
Repayments of finance lease obligations | (2,079) | (21,936) | (25,555) | |
Repayment of shareholders' loans | (11,000 | ) | (50,000) | - |
Dividends paid | (19,000 | ) | (110,000) | - |
Advance to affiliated company | - | 60,000 | (60,000) | |
Net cash (used in) provided by financing activities | 40,608 | (5,272) | (61,439) | |
Net increase in cash and cash equivalents | (41,620) | 18,622 | 22,944 | |
Cash and cash equivalents at beginning of the year | 74,014 | 55,392 | 32,448 | |
Cash and cash equivalents at end of the year | 32,394 | 74,014 | 55,392 | |
Share Capital | Reserve for Equity Adjustment on Acquisition | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Total Equity | ||||
Balance, December 31, 2014 | 132,832 | (106,349) | 135,713 | - | 162,196 | |||
Result for the period | - | - | 64,733 | - | 64,733 | |||
Net change in fair value of cash flow hedges - hedge accounting | - | - | - | (1,987 | ) | (1,987 | ) | |
Dividends paid | - | - | (110,000 | ) | - | (110,000 | ) | |
Balance, December 31, 2015 | 132,832 | (106,349) | 90,446 | (1,987) | 114,942 | |||
Result for the period | - | - | 33,602 | - | 33,602 | |||
Net change in fair value of cash flow hedges - hedge accounting | - | - | - | 3,892 | 3,892 | |||
Dividends paid | - | - | (19,000 | ) | - | (19,000 | ) | |
Balance, December 31, 2016 | 132,832 | (106,349) | 105,048 | 1,905 | 133,436 |
(1) | Summary of Significant Accounting Policies |
(a) | Basis of preparation |
(b) | Basis of consolidation |
▪ | has power over the investee; |
▪ | is exposed, or has rights, to variable returns from its involvement with the investee; and |
▪ | has the ability to use its power to affect its returns. |
(c) | Reporting Currency |
(d) | Use of Judgments and Estimates |
(e) | Cash and Cash Equivalents |
(f) | Accounts Receivable |
(g) | Operating Revenues and Expenses |
(h) | Vessels and vessels under finance lease |
(i) | Financial instruments |
▪ | default or delinquency by a debtor; |
▪ | restructuring of an amount due to the Company on terms that the Company would not consider otherwise; |
▪ | indications that a debtor or issuer will enter bankruptcy; |
▪ | adverse changes in the payment status of borrowers or issuers; |
▪ | the disappearance of an active market for a security; and |
▪ | observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets. |
(j) | Other Current Assets |
(k) | Debt issuance costs |
(l) | Commitments and Contingencies |
(m) | Income taxes |
(n) | Leases |
(o) | New standards and interpretations not yet adopted |
(3) | Taxation |
(4) | Vessels |
Vessels | Vessels under capital lease | Dry dock components | Vessels under Construction | Total | ||||||
Cost at December 31, 2014 | 441,773 | 44,800 | 26,257 | 56,548 | 569,378 | |||||
Capital expenditures | - | - | 12,626 | 79,694 | 92,320 | |||||
Vessel acquisitions | 44,800 | (30,800) | - | - | 14,000 | |||||
Vessel sales | (39,460) | - | - | - | (39,460) | |||||
Vessel deliveries | 94,148 | - | - | (94,148) | - | |||||
Component disposal | - | - | (12,716 | ) | - | (12,716 | ) | |||
Cost at December 31, 2015 | 541,261 | 14,000 | 26,167 | 42,094 | 623,522 | |||||
Capital expenditures | 4,077 | - | 9,987 | 129,988 | 144,052 | |||||
Vessel deliveries | 143,730 | - | - | (143,730) | - | |||||
Transfer to held for sale | (23,980) | - | (2,669) | - | (26,649) | |||||
Cost at December 31, 2016 | 665,088 | 14,000 | 33,485 | 28,352 | 740,925 | |||||
Accumulated Depreciation at December 31, 2014 | 111,709 | 19,278 | 12,557 | - | 143,544 | |||||
Depreciations | 21,431 | 219 | 9,066 | - | 30,716 | |||||
Vessel acquisitions | 19,278 | (19,278) | - | - | - | |||||
Vessel sales | (26,147) | - | - | - | (26,147) | |||||
Component disposal | - | - | (12,716) | - | (12,716) | |||||
Accumulated Depreciation at December 31, 2015 | 126,271 | 219 | 8,907 | - | 135,397 | |||||
Depreciations | 23,974 | 1,404 | 8,588 | - | 33,966 | |||||
Transfer to held for sale | (6,684) | - | (2,235) | - | (8,919) | |||||
Accumulated Depreciation at December 31, 2016 | 143,561 | 1,623 | 15,260 | - | 160,444 | |||||
Net Book Value as per December 31, 2015 | 414,990 | 13,781 | 17,260 | 42,094 | 488,125 | |||||
Net Book Value as per December 31, 2016 | 521,527 | 12,377 | 18,225 | 28,352 | 580,481 |
Asset Classified as Held for Sale | 2016 | 2015 |
Cost | ||
Balance as per January 1 | - | - |
Changes during the financial year | ||
Transfer from vessels | 26,649 | - |
Balance as per December 31 | 26,649 | - |
2016 | 2015 | |
Accumulated depreciations and impairment losses | ||
Balance as per January 1 | - | - |
Changes during the financial year | ||
Transfer from vessels | 8,919 | - |
Balance as per December 31 | 8,919 | - |
Net book value as per December 31 | 17,730 | - |
Fair value as per December 31 | 18,816 | - |
December 31, 2016 | December 31, 2015 | |
Accrued revenues | - | 80 |
Prepaid expenses | 3,372 | 2,941 |
3,372 | 3,021 |
(a) | Long-term debt |
December 31, 2016 | December 31, 2015 | |||
U.S. Dollar denominated debt due through 2021 | 402,236 | 329,549 | ||
Less debt issuance costs | (5,831 | ) | (6,961 | ) |
Total debt | 396,405 | 322,588 | ||
Less current portion | (54,218 | ) | (35,867 | ) |
Total long-term debt | 342,187 | 286,721 |
Long-term debt | |
2017 (*) | 55,535 |
2018 | 41,761 |
2019 | 41,761 |
2020 | 41,761 |
2021 | 221,418 |
Total | 402,236 |
▪ | minimum aggregate cash and cash equivalents of the higher of (i) $20.0 million and (ii) 5% of financial indebtedness; |
▪ | minimum consolidated working capital of $0; |
▪ | ratio of net financial indebtedness to consolidated total capitalization of less than 0.70; |
▪ | minimum ratio of EBITDA to interest expense 2.0 to 1.00; |
▪ | minimum security coverage ratio of 125%. |
December 31, 2016 | December 31, 2015 | |
Temse | 11,516 | 13,611 |
Less current portion | (2,121) | (2,333) |
Long-term finance lease obligations | 9,395 | 11,278 |
Finance lease obligations | |
2017 | 2,745 |
2018 | 2,653 |
2019 | 2,565 |
2020 | 2,475 |
2021 | 2,903 |
Total | 13,341 |
December 31, 2016 | December 31, 2015 | |
Deferred revenues | 578 | 1,455 |
Accrued interest expense loan | 700 | 354 |
Accrued interest expense IRS | 164 | 191 |
Other accrued charges | 221 | 31 |
1,663 | 2,031 |
(a) | Exmar NV provides general and corporate management services for the Company. Exmar Shipmanagement NV, a subsidiary of Exmar NV provides all services in relation to crew and technical management of the vessels. Exmar Marine NV, a subsidiary of Exmar NV, provides commercial management services. For these services, fees are charged to the joint ventures based on contractual agreements between all parties involved. All amounts charged by Exmar NV, Exmar Shipmanagement NV and Exmar Marine NV to the Company are reflected in administrative and vessel operating expenses except for the management fee charged if and when a vessel is sold, these are netted in the gain on sale. Detail as follows: |
Year ended December 31, 2016 | Year ended December 31, 2015 | Year ended December 31, 2014 | |
Exmar NV | 641 | 632 | 588 |
Exmar Hong Kong | 110 | 109 | 115 |
Exmar Shipmanagement NV | 2,765 | 2,758 | 2,903 |
Exmar Marine NV | 2,403 | 3,046 | 4,447 |
(b) | Included in accounts payable is due to affiliated companies of $2.6 million and nil as of December 31, 2016 and 2015, respectively. |
(c) | Included in accounts receivable is due from affiliated companies of $10.7 million and $8.3 million as of December 31, 2016 and 2015, respectively. |
(d) | More specifics on shareholder loans and related guarantees, see notes 7 and 8. |
Level 2. | Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
Level 3. | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
December 31, 2016 | December 31, 2015 | ||||||
Fair Value Hierarchy Level | Carrying Amount Asset (Liability) | Fair Value Asset (Liability) | Carrying Amount Asset (Liability) | Fair Value Asset (Liability) | |||
Cash and cash equivalents | Level 2 | 32,394 | 32,394 | 74,014 | 74,014 | ||
Derivative financial instruments - Asset | Level 2 | 2,486 | 2,486 | - | - | ||
Shareholders’ loans | Level 2 | (106,735 | ) | (106,735 | ) | (116,385) | (116,385) |
Long-term debt (1) | Level 2 | (396,405) | (400,918) | (322,588) | (328,313) | ||
Derivative financial instruments - Liability | Level 2 | (581) | (581) | (1,987) | (1,987) |
(a) | Company as a lessor |
December 31, 2016 | December 31, 2015 | |
Less than one year | 105,273 | 137,655 |
Between one and five years | 209,595 | 252,476 |
More than five years | 123,110 | 156,732 |
437,978 | 546,863 |
December 31, 2016 | December 31, 2015 | |
Less than one year | 17,718 | 17,718 |
Between one and five years | 49,597 | 56,497 |
More than five years | 25,242 | 36,060 |
92,557 | 110,275 |
Contractual cash flows | |||||||||||
Carrying amount | Total | 1 year or less | 1-3 years | 3-5 years | More than 5 years | ||||||
Accounts payable | 9,086 | 9,086 | 9,086 | - | - | - | |||||
Accrued interest expense Loan | 700 | 700 | 700 | - | - | - | |||||
Accrued interest expense IRS | 164 | 164 | 164 | - | - | - | |||||
Shareholders’ loans (1) | 106,735 | 106,735 | 106,735 | - | - | - | |||||
Long-term debt (2)(3) | 402,236 | 452,830 | 67,273 | 106,257 | 279,300 | - | |||||
Finance lease obligations | 11,516 | 13,341 | 2,745 | 5,218 | 5,378 | - | |||||
Derivative financial instruments (4) | |||||||||||
Inflow | (2,486) | (24,559 | ) | (4,555 | ) | (10,803 | ) | (9,201 | ) | - | |
Outflow | 581 | 22,578 | 6,316 | 10,347 | 5,915 | - | |||||
528,532 | 580,875 | 188,464 | 111,019 | 281,392 | - |
(1) | The shareholders’ loans are due on demand; however, the Company does not expect the shareholders to demand repayment in the next year. |
(2) | Amount does not include debt issuance costs being netted against long-term debt of $5.8 million. |
(3) | Contractual cash flows for long-term debt include estimated future variable interest payments of $50.6 million based on current interest rates. |
(4) | Contractual cash flows for derivative liability include accrued interest payments included in accrued liabilities of $0.1 million. |
Interest Rate Index | Notional Amount | Fair Value / Carrying Amount of Asset (Liability) | Remaining Term | Fixed Interest Rate(1) | |
(years) | % | ||||
IRS - Revolving credit facility(2) | LIBOR | 257,800 | (581) | 4.5 | 1.84 |
IRS - Kaprijke(2) | LIBOR | 34,743 | 192 | 4.5 | 1.69 |
IRS - Knokke(2) | LIBOR | 35,846 | 28 | 4.5 | 1.81 |
IRS - Kontich(2) | LIBOR | 36,397 | 1,140 | 4.5 | 1.00 |
IRS - Kortrijk(2) | LIBOR | 37,500 | 1,126 | 4.5 | 1.03 |
(1) | Excludes the margin the Company pays on its variable-rate debt, which as at December 31, 2016 was 1.90%. |
(2) | Notional amount reduces quarterly. |
Qualifying Cash Flow Hedging Instruments | |
Balance as at December 31, 2014 | - |
Other comprehensive loss | (1,987) |
Balance at December 31, 2015 | (1,987) |
Other comprehensive income | 3,892 |
Balance at December 31, 2016 | 1,905 |
Year ended December 31, 2016 | Year ended December 31, 2015 | Year ended December 31, 2014 | |
Salaries, bonuses and other personnel expenses | 18,987 | 16,547 | 15,884 |
(a) | On January 10, 2017, the LPG vessel Brugge Venture was sold. |
(b) | On March 28, 2017, one of the Company’s four LPG newbuilding carriers, the Kallo, was delivered. |
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Document and Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2016
shares
| |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | FY |
Trading Symbol | TK |
Entity Registrant Name | TEEKAY CORP |
Entity Central Index Key | 0000911971 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 86,149,975 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts receivable, non-trade | $ 33,924 | $ 15,623 |
Accounts receivable, related party balance | 26,471 | 65,936 |
Accumulated depreciation | 3,294,021 | 2,894,097 |
Accumulated amortization on vessels under capital lease | $ 69,072 | $ 56,316 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, share authorized (shares) | 725,000,000 | 725,000,000 |
Common stock, share issued (shares) | 86,149,975 | 72,711,371 |
Common stock, share outstanding (shares) | 86,149,975 | 72,711,371 |
Minimum [Member] | ||
Range of interest | 0.00% | 0.00% |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Range of interest | 3.00% | 3.00% |
Consolidated Statements of Cash Flows (Parenthetical) - Teekay Offshore [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Ship-to-Ship Transfer Business (SPT) [Member] | ||
Cash acquired | $ 377 | |
ALP Maritime Services B.V [Member] | ||
Cash acquired | $ 294 | |
Logitel Offshore Holdings [Member] | ||
Cash acquired | $ 8,089 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the accounts of Teekay Corporation (or Teekay), which is incorporated under the laws of the Republic of The Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Company). Certain of Teekay’s significant non-wholly owned subsidiaries are consolidated in these financial statements even though Teekay owns less than a 50% ownership interest in the subsidiaries. These significant subsidiaries include the following publicly traded subsidiaries (collectively, the Public Subsidiaries): Teekay LNG Partners L.P. (or Teekay LNG); Teekay Offshore Partners L.P. (or Teekay Offshore); and Teekay Tankers Ltd. (or Teekay Tankers). As of December 31, 2016, Teekay owned a 33.1% interest in Teekay LNG (33.1% - December 31, 2015), including common units and its 2% general partner interest, and a 29.0% interest in Teekay Offshore (37.0% - December 31, 2015), including common units and its 2% general partner interest, and a 26% interest in Teekay Offshore's 10.50% Series D Cumulative Convertible Perpetual Preferred Units (the Series D Preferred Units), and 25.4% of the capital stock of Teekay Tankers (25.9% - December 31, 2015), including Teekay Tankers’ outstanding shares of Class B common stock, which entitle the holders to five votes per share, subject to a 49% aggregate Class B Common Stock voting power maximum. While Teekay owns less than 50% of each of the Public Subsidiaries, Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its 100% ownership interest in the general partners of Teekay LNG and Teekay Offshore, which are both master limited partnerships, and maintains control of Teekay Tankers through its ownership of a sufficient number of Class A common shares and Class B common shares, which provide increased voting rights, to maintain a majority voting interest in Teekay Tankers and thus consolidates these subsidiaries. Significant intercompany balances and transactions have been eliminated upon consolidation. Teekay has entered into an omnibus agreement with Teekay LNG and Teekay Offshore to govern, among other things, when Teekay, Teekay LNG and Teekay Offshore may compete with each other and to provide the applicable parties certain rights of first offer on liquefied natural gas (or LNG) carriers, oil tankers, shuttle tankers, floating storage and off-take (or FSO) units and floating, production, storage and offloading (or FPSO) units. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Given the current condition of the credit markets, it is possible that the amounts recorded as derivative assets and liabilities could vary by material amounts prior to their settlement. Significant intercompany balances and transactions have been eliminated upon consolidation. In addition, certain of the comparative figures have been reclassified to conform to the presentation adopted in the current period relating to certain operating activities in the Company's consolidated statements of cash flows. Non-Controlling Interests Where Teekay’s ownership interest in a consolidated subsidiary is less than 100%, the non-controlling interests’ share of these non-wholly owned subsidiaries are reported in the Company’s consolidated balance sheets as a separate component of equity. The non-controlling interests’ share of the net income of these non-wholly owned subsidiaries is reported in the Company’s consolidated statements of income as a deduction from the Company’s net income to arrive at net (loss) income attributable to shareholders of Teekay. The basis for attributing net income of each non-wholly owned subsidiary to the controlling interest and the non-controlling interests, with the exception of Teekay LNG and Teekay Offshore, is based on the relative ownership interests of the non-controlling interests compared to the controlling interest, which is consistent with how dividends and distributions are paid or are payable for these non-wholly owned subsidiaries. Teekay LNG and Teekay Offshore each have limited partners and one general partner. Both general partners are owned by Teekay. For both Teekay LNG and Teekay Offshore, the limited partners hold common units and preferred units. For each quarterly period, the method of attributing Teekay LNG’s and Teekay Offshore’s net income (loss) of that period to the non-controlling interests of Teekay LNG and Teekay Offshore begins by attributing net income (loss) of Teekay Offshore and Teekay LNG to the non-controlling interests which hold 100% of the preferred units of Teekay Offshore, except for Series D Preferred Units, of which they hold 74%, and 100% of the preferred units of Teekay LNG based on the amount of preferred unit distributions declared for the quarterly period. The remaining net income (loss) to be attributed to the controlling interest and the non-controlling interests of Teekay LNG and Teekay Offshore is divided into two components. The first component consists of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to limited and general partners for that quarterly period (or the Distributed Earnings). The second component consists of the difference between the net income (loss) of Teekay LNG or Teekay Offshore that is available to be allocated to the common unitholders and the general partner of such entity and the amount of the first component cash distribution (or the Undistributed Earnings). The portion of the Distributed Earnings that is allocated to the non-controlling interests is the amount of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to the non-controlling interests for that quarterly period. The portion of the Undistributed Earnings that is allocated to the non-controlling interests is based on the relative ownership percentages of the non-controlling interests of Teekay LNG and Teekay Offshore compared to the controlling interest. The controlling interests include both limited partner common units and the general partner interests. The total net income of Teekay’s consolidated partially-owned entities and the attribution of that net income to controlling and non-controlling interests is as follows:
When Teekay’s non-wholly owned subsidiaries declare dividends or distributions to their owners, or require all of their owners to contribute capital to the non-wholly owned subsidiaries, such amounts are paid to, or received from, each of the owners of the non-wholly owned subsidiaries based on the relative ownership interests in the non-wholly owned subsidiary. As such, any dividends or distributions paid to, or capital contributions received from, the non-controlling interests are reflected as a reduction (dividends or distributions) or an increase (capital contributions) in non-controlling interest in the Company’s consolidated balance sheets. When Teekay’s non-wholly owned subsidiaries issue additional equity interests to non-controlling interests, Teekay is effectively selling a portion of the non-wholly owned subsidiaries. Consequently, the proceeds received by the subsidiaries from their issuance of additional equity interests are allocated between non-controlling interest and retained earnings in the Company’s consolidated balance sheets. The portion allocated to non-controlling interest on the Company’s consolidated balance sheets consists of the carrying value of the portion of the non-wholly owned subsidiary that is effectively disposed of, with the remaining amount attributable to the controlling interest, which consists of the Company’s dilution gain or loss that is allocated to retained earnings. Reporting currency The consolidated financial statements are stated in U.S. Dollars. The functional currency of the Company is the U.S. Dollar because the Company operates in the international shipping market, which typically utilizes the U.S. Dollar as the functional currency. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. Dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of income. Operating revenues and expenses Contracts of Affreightment and Voyage Charters Revenues from contracts of affreightment and voyage charters are recognized on a proportionate performance method. The Company uses a discharge-to-discharge basis in determining proportionate performance for all voyage charters, whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. Shuttle tanker voyages servicing contracts of affreightment with offshore oil fields commence with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. The Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Time Charters, Bareboat Charters and FPSO Contracts Operating Leases - The Company recognizes revenues from time charters, bareboat charters and FPSO contracts accounted for as operating leases on a straight-line basis daily over the term of the charter as the applicable vessel operates under the charter. Receipt of incentive-based revenue from the Company’s FPSO units is dependent upon its operating performance and such revenue is recognized when earned by fulfillment of the applicable performance criteria. The Company does not recognize revenue during days that the vessel is off hire unless the contract provides for compensation while off hire. Direct Financing Leases - Charter contracts that are accounted for as direct financing leases are reflected on the consolidated balance sheets as net investments in direct financing leases. The lease revenue is recognized on an effective interest rate method over the lease term so as to produce a constant periodic rate of return over the lease terms and is included in revenues. Revenue from rendering of services is recognized as the service is performed. Revenues are not recognized during days that the vessel is off hire unless the contract provides for compensation while off hire. The Company employs four LNG carriers, a FSO unit, and volatile organic compound emissions (or VOC) equipment on long-term time charters which are accounted for as direct financing leases. The lease payments received by the Company under these lease arrangements are allocated between the net investments in the leases and revenues or other income using the effective interest method so as to produce a constant periodic rate of return over the lease terms. Pooling Arrangements Revenues and voyage expenses of the vessels operating in pool arrangements are pooled and the resulting net pool revenues, calculated on a time-charter equivalent basis, are allocated to the pool participants according to an agreed formula. The agreed formula used to allocate net pool revenues varies between pools; however, the formula generally allocates revenues to pool participants on the basis of the number of days a vessel operates in the pool with weighting adjustments made to reflect vessels’ differing capacities and performance capabilities. The same revenue and expense recognition principles stated above for voyage charters are applied in determining the net pool revenues of the pool. The pools are responsible for paying voyage expenses and distributing net pool revenues to the participants. The Company accounts for the net allocation from the pool as revenues and amounts due from the pool are included in accounts receivable. Other Revenue Other revenues are earned from the offshore ship-to-ship transfer of commodities, primarily crude oil and refined oil products, but also liquid gases and various other products which are referred to as support operations. In addition, other revenues are also earned from other technical activities such as terminal management, consultancy, procurement and equipment rental. Other revenues from short-term contracts are recognized as services are completed based on percentage of completion or in the case of long-term contracts, are recognized over the duration of the contract period. Operating Expenses Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, ship management services, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred. Cash and cash equivalents The Company classifies all highly liquid investments with a maturity date of three months or less at their inception as cash equivalents. Restricted Cash The Company maintains restricted cash deposits relating to certain term loans, collateral for derivatives, project tenders, leasing arrangements, amounts received from charterers to be used only for dry-docking expenditures and emergency repairs and other obligations. Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and customer economic data. The Company reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged off against the allowance when the Company believes that the receivable will not be recovered. There were no significant amounts recorded as allowance for doubtful accounts as at December 31, 2016, 2015, and 2014. Vessels and equipment All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standard required to properly service the Company’s customers are capitalized. Depreciation is calculated on a straight-line basis over a vessel’s estimated useful life, less an estimated residual value. Depreciation is calculated using an estimated useful life of 25 years for tankers carrying crude oil and refined product, 20 to 25 years for FPSO units, 35 years for LNG carriers and 30 years for liquefied petroleum gas (or LPG) carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time. FSO units are depreciated over the term of the contract. Units for maintenance and safety (or UMS) are depreciated over an estimated useful life of 35 years commencing the date the unit arrives at the oil field and is in a condition that is ready to operate. Long-distance towing and offshore installation vessels are depreciated over an estimated useful life of 25 years commencing the date the vessel is delivered from the shipyard. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Depreciation of vessels and equipment, excluding amortization of dry-docking expenditures, for the years ended December 31, 2016, 2015, and 2014 aggregated $492.0 million, $445.2 million and $341.5 million, respectively. Amortization of vessels accounted for as capital leases was $12.8 million, $5.4 million and $21.6 million for the years ended December 31, 2016, 2015, and 2014, respectively. Teekay Offshore considers its shuttle tankers to be comprised of two components: (i) a conventional tanker (or the tanker component) and (ii) specialized shuttle equipment (or the shuttle component). Teekay Offshore differentiates these two components on the principle that a shuttle tanker can also operate as a conventional tanker without the use of the shuttle component. The economics of this alternate use depend on the supply and demand fundamentals in the two segments. Historically, the useful life of both components was assessed as 25 years commencing from the date the vessel is delivered from the shipyard. In early 2016, Teekay Offshore considered factors related to the ongoing use of the shuttle component and reassessed the useful life as being 20 years based on the challenges associated with adverse market conditions in the energy sector and other long term factors associated with the global oil industry. This change in estimate, commencing January 1, 2016, impacts the entire fleet of Teekay Offshore’s shuttle tanker vessels. Separately, Teekay Offshore reviewed the depreciation of the tanker component for eight shuttle tankers in its fleet that are 17 years of age or older. Based on Teekay Offshore’s expected operating plan for these vessels, commencing January 1, 2016, it has reassessed the estimated useful life of the tanker component for these vessels as 20 years. As market conditions evolve, Teekay Offshore will continue to monitor the useful life of the tanker component for other vessels within the shuttle tanker fleet. The effect of these changes for Teekay Offshore in estimates on the Company’s consolidated statements of income, was an increase in depreciation and amortization expense and a decrease in net income of $29.3 million in the year ended December 31, 2016, and a decrease in net income and an increase in net loss attributable to shareholders of the Company of $8.6 million, or $0.10 per basic and diluted common share, for the year ended December 31, 2016. Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel that are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is amortized over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred. Interest costs capitalized to vessels and equipment for the years ended December 31, 2016, 2015, and 2014, aggregated $36.9 million, $22.0 million and $51.3 million, respectively. Generally, the Company dry docks each shuttle tanker, conventional oil tanker, long-distance towing and offshore installation vessel and gas carrier every two and a half to five years. UMS, FSO and FPSO units are generally not dry docked. The Company capitalizes a substantial portion of the costs incurred during dry docking and amortizes those costs on a straight-line basis over their estimated useful life, which typically is from the completion of a dry docking or intermediate survey to the estimated completion of the next dry docking. The Company includes in capitalized dry-docking costs those costs incurred as part of the dry docking to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during dry docking, and for annual class survey costs on the Company’s FPSO units. The continuity of capitalized dry-docking costs for the years ended December 31, 2016, 2015, and 2014, is summarized as follows:
Vessels and equipment that are intended to be held and used in the Company's business are assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the asset’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, the carrying amount of the asset is reduced to its estimated fair value. The estimated fair value for the Company’s impaired vessels is determined using discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists, an appraised value is used to estimate the fair value of an impaired vessel. An appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company and is based on second-hand sale and purchase data. Vessels and equipment that are “held for sale” are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses attributable to vessels and equipment classified as held for sale, or to their related liabilities, continue to be recognized as incurred. Gains on vessels sold and leased back under capital leases are deferred and amortized over the remaining term of the capital lease. Losses on vessels sold and leased back under capital leases are recognized immediately when the fair value of the vessel at the time of sale and lease-back is less than its book value. In such case, the Company would recognize a loss in the amount by which book value exceeds fair value. Other loan receivables The Company’s investments in loan receivables are recorded at cost. The Company analyzes its loans for collectability during each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considers in determining that a loan is impaired include, among other things, an assessment of the financial condition of the debtor, payment history of the debtor, general economic conditions, the credit rating of the debtor (when available) any information provided by the debtor regarding their ability to repay the loan and the fair value of the underlying collateral. When a loan is impaired, the Company measures the amount of the impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting impairment in the consolidated statements of income. The carrying value of the loans will be adjusted each subsequent reporting period to reflect any changes in the present value of estimated future cash flows. The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2016.
Joint ventures The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statements of income. Debt issuance costs Debt issuance costs, including fees, commissions and legal expenses, are deferred and presented as a direct reduction from the carrying amount of the debt liability. Debt issuance costs related to loan facilities without a recognized debt liability will continue to be presented as non-current assets in the consolidated balance sheets. Debt issuance costs of revolving credit facilities are amortized on a straight-line basis over the term of the relevant facility. Debt issuance costs of term loans are amortized using the effective interest rate method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. Derivative instruments All derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and whether the contract qualifies for hedge accounting. The Company does not apply hedge accounting to its derivative instruments, except for certain types of interest rate swaps (See Note 14). When a derivative is designated as a cash flow hedge, the Company formally documents the relationship between the derivative and the hedged item. This documentation includes the strategy and risk management objective for undertaking the hedge and the method that will be used to assess the effectiveness of the hedge. Any hedge ineffectiveness is recognized immediately in earnings, as are any gains and losses on the derivative that are excluded from the assessment of hedge effectiveness. The Company does not apply hedge accounting if it is determined that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold, or repaid. For derivative financial instruments designated and qualifying as cash flow hedges, changes in the fair value of the effective portion of the derivative financial instruments are initially recorded as a component of accumulated other comprehensive loss in total equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from total equity to the corresponding earnings line item in the consolidated statements of income. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in earnings in the consolidated statements of income. If a cash flow hedge is terminated and the originally hedged item is still considered possible of occurring, the gains and losses initially recognized in total equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item (e.g. general and administrative expense) item in the consolidated statements of income. If the hedged items are no longer possible of occurring, amounts recognized in total equity are immediately transferred to the earnings item in the consolidated statements of income. For derivative financial instruments that are not designated or that do not qualify as hedges under Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 815, Derivatives and Hedging, the changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated interest rate swaps related to long-term debt, capital lease obligations, restricted cash deposits, non-designated bunker fuel swap contracts and forward freight agreements, and non-designated foreign exchange currency forward contracts are recorded in realized and unrealized loss on non-designated derivative instruments. Gains and losses from the Company’s hedge accounted foreign currency forward contracts are recorded primarily in vessel operating expenses and general and administrative expense. Gains and losses from the Company’s non-designated cross currency swap are recorded in foreign currency exchange (loss) gain in the consolidated statements of income. Goodwill and intangible assets Goodwill is not amortized, but reviewed for impairment at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When goodwill is reviewed for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. The Company’s intangible assets consist primarily of acquired time-charter contracts, contracts of affreightment, and customer relationships. The value ascribed to the acquired time-charter contracts and contracts of affreightment are being amortized over the life of the associated contract, with the amount amortized each year being weighted based on the projected revenue to be earned under the contracts. The value ascribed to customer relationships intangible assets are amortized over the expected life of a customer contract or the expected duration that the customer relationships are estimated to contribute to the cash flows of the Company. The amount amortized each year is weighted based on the projected revenue to be earned under the contracts or projected revenue to be earned as a result of the customer relationships. Asset retirement obligation The Company has an asset retirement obligation (or ARO) relating to the sub-sea production facility associated with the Petrojarl Banff FPSO unit operating in the North Sea. This obligation generally involves the costs associated with the restoration of the environment surrounding the facility and removal and disposal of all production equipment. This obligation is expected to be settled at the end of the contract under which the FPSO unit currently operates. The ARO will be covered in part by contractual payments to be received from FPSO contract counterparties. Teekay Offshore has an ARO relating to the sub-sea mooring and riser system associated with the Gina Krog FSO unit expected to commence operations in the North Sea in early-2017. This obligation involves the costs associated with the restoration of the environment surrounding the facility and removal of all equipment, which are subsequently required to be reimbursed by the charterer under the terms of the contract. This obligation is expected to be settled at the end of the contract under which the FSO unit is expected to operate, which is a three-year time-charter contract which includes 12 additional one-year extension options. The Company records the fair value of an ARO as a liability in the period when the obligation arises. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. When the liability is recorded, the Company capitalizes the cost by increasing the carrying amount of the related equipment. Each period, the liability is increased for the change in its present value, and the capitalized cost is depreciated over the useful life of the related asset. Changes in the amount or timing of the estimated ARO are recorded as an adjustment to the related asset and liability. As at December 31, 2016, the ARO and associated receivable, which is recorded in other non-current assets, were $44.7 million and $27.9 million, respectively (2015 - $25.5 million and $6.9 million, respectively). Repurchase of common stock The Company accounts for repurchases of common stock by decreasing common stock by the par value of the stock repurchased. In addition, the excess of the repurchase price over the par value is allocated between additional paid in capital and retained earnings. The amount allocated to additional paid in capital is the pro-rata share of the capital paid in and the balance is allocated to retained earnings. Share-based compensation The Company grants stock options, restricted stock units, performance share units and restricted stock awards as incentive-based compensation to certain employees and directors. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period, which generally equals the vesting period. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the vesting period of the award. Compensation cost for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The compensation cost of the Company’s stock-based compensation awards is substantially reflected in general and administrative expense. Income taxes The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities using the applicable jurisdictional tax rates. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. Recognition of uncertain tax positions is dependent upon whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax (expense) recovery. The Company believes that it and its subsidiaries are not subject to income taxation under the laws of the Republic of The Marshall Islands or Bermuda, or that distributions by its subsidiaries to the Company will be subject to any income taxes under the laws of such countries, and that it qualifies for the Section 883 exemption under U.S. federal income tax purposes. Accumulated other comprehensive income (loss) The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.
Employee pension plans The Company has defined contribution pension plans covering the majority of its employees. Pension costs associated with the Company’s required contributions under its defined contribution pension plans are based on a percentage of employees’ salaries and are charged to earnings in the year incurred. The Company also has defined benefit pension plans covering certain of its employees. The Company accrues the costs and related obligations associated with its defined benefit pension plans based on actuarial computations using the projected benefits obligation method and management’s best estimates of expected plan investment performance, salary escalation, and other relevant factors. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. The overfunded or underfunded status of the defined benefit pension plans are recognized as assets or liabilities in the consolidated balance sheets. The Company recognizes as a component of other comprehensive loss, the gains or losses that arise during a period but that are not recognized as part of net periodic benefit costs. (Loss) earnings per common share The computation of basic earnings (loss) per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock awards using the treasury stock method. The computation of diluted loss per share does not assume such exercises. Accounting pronouncements not yet adopted In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (or ASU 2014-09). ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for the Company January 1, 2018 and shall be applied, at the Company’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company expects that the adoption of ASU 2014-09 may result in a change in the method of recognizing revenue from contracts of affreightment whereby revenue will be recognized over the voyage until discharge is complete, instead of over the voyage until tendering notice for the next voyage. This will result in all revenue being fully recognized upon discharge of cargo whereas currently revenue recognition extends into the period the vessel returns to the oil field. This change may result in revenue being recognized earlier which may cause additional volatility in revenue and earnings between periods. In addition, the Company expects that the adoption of ASU 2014-09 may result in a change in the method of recognizing revenue for voyage charters, whereby the Company’s method of determining proportional performance will change from discharge-to-discharge to load-to-discharge. This will result in no revenue being recognized from discharge of the prior voyage to loading of the current voyage and all revenue being recognized from loading of the current voyage to discharge of the current voyage. This change will result in revenue being recognized later in the voyage which may cause additional volatility in revenue and earnings between periods. The Company is in the process of validating aspects of its preliminary assessment of ASU 2014-09, determining the transitional impact and completing other items required for the adoption of ASU 2014-09. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (or ASU 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company expects to adopt ASU 2016-02 on January 1, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company expects that the adoption of ASU 2016-02 will result in a change in accounting method for the lease portion of the daily charter hire for the Company’s chartered-in vessels accounted for as operating leases and office leases with firm periods of greater than one year. Under ASU 2016-02, the Company will recognize a right of use asset and a lease liability on the balance sheet for these charters and office leases, whereas currently no right of use asset or lease liability is recognized. This will have the result of increasing the Company’s assets and liabilities. The pattern of expense recognition of chartered-in vessels and office leases are expected to remain substantially unchanged, unless the right of use asset becomes impaired. The Company is in the process of validating aspects of its preliminary assessment of ASU 2016-02, determining the transitional impact and completing other items required for the adoption of ASU 2016-02. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (or ASU 2016-09). ASU 2016-09 simplifies aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 became effective for the Company January 1, 2017. The Company expects the impact of adopting this new accounting guidance will be a change in presentation of cash payments for tax withholdings on share-settled equity awards from an operating cash outflow to financing cash outflow on the Company's statement of cash flows. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This update replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for the Company on January 1, 2020, with a modified-retrospective approach. The Company is currently evaluating the effect of adopting this new guidance. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity method investees in the statement of cash flows. This update is effective for the Company on January 1, 2018, with a retrospective approach. The Company is currently evaluating the effect of adopting this new guidance. |
Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company has four primary lines of business: offshore logistics (shuttle tankers, the HiLoad DP unit, FSO units, UMS and long-distance towing and offshore installation vessels), offshore production (FPSO units), liquefied gas carriers (LNG and LPG carriers) and conventional tankers. The Company manages these businesses for the benefit of all stakeholders. The Company allocates capital and assesses performance both from the separate perspectives of its three publicly-traded subsidiaries Teekay Offshore, Teekay LNG, and Teekay Tankers (together, the Daughter Companies) and Teekay and its remaining subsidiaries (or Teekay Parent), as well as from the perspective of the Company's lines of business. The primary focus of the Company’s organizational structure, internal reporting and allocation of resources by the chief operating decision maker, is on the Daughter Companies and Teekay Parent and its segments are presented accordingly. The Company incorporates the primary lines of business within its segments, as in certain cases there is more than one line of business in each Daughter Company and the Company believes this information allows a better understanding of the Company’s performance and prospects for future net cash flows. The following table includes results for the Company’s revenue and income from vessel operations by segment for the periods presented in these financial statements.
The following table presents revenues and percentage of consolidated revenues for customers that accounted for more than 10% of the Company’s consolidated revenues during the periods presented. All of these customers are international oil companies.
The following table includes other income statement items by segment for the periods presented in these financial statements.
A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
The following table includes capital expenditures by segment for the periods presented in these financial statements.
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Investments | Investments a)Teekay LNG – Bahrain LNG Joint Venture In December 2015, Teekay LNG entered into an agreement with National Oil & Gas Authority (or Nogaholding), Samsung C&T (or Samsung) and Gulf Investment Corporation (or GIC) to form a joint venture, Bahrain LNG W.L.L. (or the Bahrain LNG Joint Venture), for the development of an LNG receiving and regasification terminal in Bahrain. The Bahrain LNG Joint Venture is a joint venture between Nogaholding (30%), Teekay LNG (30%), Samsung (16%) and GIC (24%). The project will include an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility with a total LNG terminal capacity of 800 million standard cubic feet per day and will be owned and operated under a 20-year agreement commencing in early-2019 with an estimated fully-built up cost of approximately $960.0 million, which is expected to be funded by the Bahrain LNG Joint Venture through a combination of equity capital and project-level debt through a consortium of regional and international banks. In addition, Teekay LNG will supply a floating storage unit (or FSU) in connection with this project, which will be modified specifically from one of the Teekay LNG’s nine M-type, Electronically Controlled, Gas Injection (or MEGI) LNG carrier newbuildings ordered from Daewoo Shipbuilding & Marine Engineering Co. (or DSME), through a 20-year time-charter contract with the Bahrain LNG Joint Venture. b)Teekay Tankers – Principal Maritime In August 2015, Teekay Tankers agreed to acquire 12 modern Suezmax tankers from Principal Maritime Tankers Corporation (or Principal Maritime). All 12 of the vessels were delivered in 2015 for a total purchase price of $661.3 million, consisting of $612.0 million in cash and approximately 7.2 million shares of Teekay Tankers’ Class A common stock with a value of $49.3 million. To finance the cash portion of the acquisition price, Teekay Tankers secured a $397.2 million loan facility which matured in January 2016, and which was refinanced as part of a comprehensive Teekay Tankers refinancing in January 2016 (see Note 7). In addition, in August 2015 Teekay Tankers issued in a public offering and concurrent private placement approximately 13.6 million shares of its Class A common stock for net proceeds of $90.6 million, including approximately 4.5 million shares which were issued to Teekay Parent. Teekay Tankers financed the remainder of the cash purchase price with existing liquidity. c)Teekay Tankers – Ship-to-Ship Transfer Business In July 2015, Teekay Tankers acquired a ship-to-ship transfer business (or SPT) from a company jointly-owned by Teekay and a Norway-based marine transportation company, I.M. Skaugen SE (or Skaugen), for a cash purchase price of $47.3 million (including $1.8 million for working capital). To finance this acquisition, Teekay subscribed for approximately 6.5 million shares of Teekay Tankers’ Class B common stock at a subscription price of approximately $6.99 per share. SPT provides a full suite of ship-to-ship transfer services in the oil, gas and dry bulk industries. In addition to full service lightering and lightering support, it also provides consultancy and terminal management services. This acquisition established Teekay Tankers as a global company in the ship-to-ship (or STS) transfer business, which is expected to increase Teekay Tankers’ fee-based revenue and its overall fleet utilization. On the transaction closing date of July 31, 2015, SPT owned and operated a fleet of six STS support vessels and one chartered-in Aframax Tanker. The acquisition of SPT was accounted for using the acquisition method of accounting, based upon preliminary estimates of fair value. The following table summarizes the final estimates of fair values of the SPT assets acquired and liabilities assumed by Teekay Tankers on the acquisition date. Such estimates of fair value were finalized in the first quarter of 2016 and resulted in an increase in goodwill of $8.1 million and a decrease in intangible assets by $8.4 million from preliminary estimates. Such changes did not have a material impact to the Company's consolidated statement of income for 2016.
Operating results of SPT are reflected in the Company’s consolidated financial statements commencing July 31, 2015, the effective date of acquisition. Pro forma revenues and net income as if the acquisition of SPT had occurred at the beginning of 2015 would not be materially different than actual operating results reported. The Company’s prior 50% interest in SPT was remeasured to its estimated fair value on the acquisition date and the resulting gain of $8.7 million was recognized in equity income in 2015. d)Teekay Offshore – Logitel Offshore Holding AS In August 2014, Teekay Offshore acquired 100% of the outstanding shares of Logitel Offshore Holding AS (or Logitel). The purchase price for the shares of Logitel consisted of $4.0 million in cash paid at closing and a potential additional cash amount of $27.6 million, subject to reductions of some or all of this potential additional amount if certain performance criteria were not met, primarily relating to the construction of the three UMS ordered from the COSCO (Nantong) Shipyard (or COSCO) in China (see Note 10). Prior to the acquisition, Logitel secured a three-year fixed-rate charter contract, with Petroleo Brasileiro S.A. (or Petrobras) in Brazil for the first UMS, the Arendal Spirit, which delivered in February 2015 and commenced its contract with Petrobras in June 2015. During 2016 Teekay Offshore canceled the UMS construction contracts for its two remaining UMS newbuildings (see Note 10). The acquisition of Logitel was accounted for using the acquisition method of accounting, based upon finalized estimates of fair value. The following table summarizes the preliminary and final valuations of the Logitel assets and liabilities on the acquisition date. The estimates of fair values of the Logitel assets acquired and liabilities assumed by Teekay Offshore were finalized during the second quarter of 2015.
Operating results of Logitel are reflected in the Company’s consolidated financial statements commencing August 11, 2014, the effective date of acquisition. Pro forma revenues and net income if the acquisition of Logitel had occurred at the beginning of 2014 would not be materially different than actual operating results reported. e)Teekay LNG - Yamal LNG Joint Venture In July 2014, Teekay LNG, through a new 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG), ordered six internationally-flagged icebreaker LNG carriers for a project located on the Yamal Peninsula in Northern Russia (or the Yamal LNG Project). As of December 31, 2016, Teekay LNG had advanced $146.7 million (December 31, 2015 - $96.9 million). The advances bear interest at LIBOR plus 3.00% compounded semi-annually. As at December 31, 2016, the interest accrued on these advances was $9.4 million (December 31, 2015 - $4.8 million). f)Teekay LNG - BG International Limited Joint Venture In June 2014, Teekay LNG acquired from BG International Limited (or BG) (which was subsequently acquired by Shell) its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. Through this transaction, Teekay LNG has a 30% ownership interest in two LNG carrier newbuildings and a 20% ownership interest in the remaining two LNG carrier newbuildings (or collectively the BG Joint Venture). As compensation for Shell's ownership interest in these four LNG carrier newbuildings, Teekay LNG assumed Shell’s obligation to provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery date pursuant to a ship construction support agreement. Teekay LNG estimates it will incur approximately $36.9 million of costs to provide these services, of which Shell has agreed to pay a fixed amount of $20.3 million. Teekay LNG estimated that the fair value of the service obligation was $33.3 million and the fair value of the amount due from Shell was $16.5 million. As at December 31, 2016, the carrying value of the service obligation of $22.6 million (December 31, 2015 - $29.7 million) is included in both the current portion of in-process revenue contracts and in-process contracts and the carrying value of the receivable from Shell of $10.9 million (December 31, 2015 - $16.5 million) is included in both accounts receivable and other non-current assets in the Company’s consolidated balance sheets. g)Teekay Offshore - ALP Maritime Services B.V. In March 2014, Teekay Offshore acquired 100% of the shares of ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. Concurrently with this transaction, Teekay Offshore and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four state-of-the-art SX-157 Ulstein Design ultra-long-distance towing and anchor handling vessel newbuildings. Teekay Offshore acquired ALP for a purchase price of $2.6 million, which was paid in cash, and also entered into an arrangement to pay additional compensation to three former shareholders of ALP if certain requirements are satisfied. This contingent compensation consists of $2.4 million, which is payable upon the delivery and employment of ALP’s four newbuildings and a further amount of up to $2.6 million, which is payable if ALP’s annual operating results from 2017 to 2021 meet certain targets. Teekay Offshore has the option to pay up to 50% of this compensation through the issuance of common units of Teekay Offshore. Each of the contingent compensation amounts are payable only if the three shareholders are employed by ALP at the time the performance conditions are met. For the year ended December 31, 2016, compensation cost was $0.7 million and was recorded in general and administrative expenses in the Company’s consolidated statements of income (December 31, 2015 - $0.7 million, December 31, 2014 - $0.5 million). Teekay Offshore also incurred a $1.0 million fee to a third party associated with the acquisition of ALP in 2014 for assistance with the acquisition, which has been recognized in general and administrative expenses during 2014. The acquisition of ALP was accounted for using the purchase method of accounting, based upon finalized estimates of fair value. The following table summarizes the finalized estimates of fair values of the ALP assets acquired and liabilities assumed by Teekay Offshore on the acquisition date.
The goodwill recognized in connection with the ALP acquisition is attributable primarily to the assembled workforce of ALP, including their experience, skills and abilities. Operating results of ALP are reflected in the Company’s consolidated financial statements commencing March 14, 2014, the effective date of the acquisition. On a pro forma basis for the Company for the years ended December 31, 2014 and 2013, there would be no material changes to revenues and net income giving effect to Teekay Offshore’s acquisition of ALP as if it had taken place on January 1, 2014. h)Tanker Investments Ltd. In January 2014, Teekay and Teekay Tankers formed Tanker Investments Ltd. (or TIL), which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the tanker market. In connection with TIL’s formation, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase in the aggregate up to 1.5 million shares of common stock of TIL (see Note 14). The stock purchase warrants are derivative assets for accounting purposes which had an aggregate value of $0.6 million as at December 31, 2016 (2015 - $10.3 million). Teekay also received one Series A-1 preferred share and Teekay Tankers received one Series A-2 preferred share, each of which entitles the holder to elect one board member of TIL. The preferred shares do not give the holder a right to any dividends or distributions of TIL. The Company accounts for its investment in TIL using the equity method. As of December 31, 2016, Teekay and Teekay Tankers ownership interest in TIL totaled 19.55% (2015 - 17.62%). |
Equity Financing Transactions of the Daughter Companies |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Financing Transactions of the Daughter Companies | Equity Financing Transactions of the Daughter Companies During the years ended December 31, 2016, 2015, and 2014, the Company’s publicly traded subsidiaries, Teekay Tankers, Teekay Offshore and Teekay LNG, completed the following public offerings and private placements of equity securities:
Teekay purchased for $26.0 million a total of 1,040,000 of Teekay Offshore's Series D Preferred Units. Teekay also received 1,170,000 of the $4.55 Warrants and 585,000 of the $6.05 Warrants. The purchase of Teekay Offshore Series D Preferred Units has been accounted for as an equity transaction. Therefore, no gains or losses were recognized in the Company’s consolidated statements of income (loss) as a result of this purchase. Net cash proceeds from the sale of these securities of $71.3 million, which excludes Teekay's investment, was allocated on a relative fair value basis to the Series D Preferred Units ($61.1 million), to the $4.55 Warrants ($7.0 million) and to the $6.05 Warrants ($3.1 million). The Warrants qualify as freestanding financial instruments and are accounted for separately from the Series D Preferred Units. The Series D Preferred Units are presented in the Company's consolidated balance sheets as redeemable non-controlling interest in temporary equity which is above the equity section but below the liabilities section as they are not mandatorily redeemable and the prospect of a forced redemption paid with cash due to a change of control event is not presently probable. The Warrants are recorded as non-controlling interests in the Company's consolidated balance sheets.
As a result of the public offerings and equity placements of Teekay Tankers, Teekay Offshore and Teekay LNG, the Company recorded increases (decreases) to retained earnings of $9.7 million (2016), $(152.7) million (2015) and $68.4 million (2014). These amounts represent Teekay’s dilution gains (losses) from the issuance of units and shares by these consolidated subsidiaries. |
Goodwill, Intangible Assets and In-Process Revenue Contracts |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Intangible Assets and In-Process Revenue Contracts |
Goodwill The carrying amount of goodwill for the years ended December 31, 2016 and 2015, for the Company’s reportable segments are as follows:
In July 2015, Teekay Tankers acquired SPT. The estimates of fair value were finalized in the first quarter of 2016 and resulted in an increase in goodwill of $8.1 million from preliminary estimates (see Note 3c). Intangible Assets As at December 31, 2016, the Company’s intangible assets consisted of:
As at December 31, 2015, the Company’s intangible assets consisted of:
In July 2015, as part of Teekay Tankers’ acquisition of SPT (see Note 3c), Teekay Tankers ascribed a value of $30.9 million to the customer relationships assumed as part of the acquisition of the STS transfer business. The Company is amortizing the customer relationships over a period of 10 years. The estimates of fair value were finalized in the first quarter of 2016 and resulted in a decrease in intangible assets by $8.4 million from preliminary estimates. This change did not have a material impact to the Company’s consolidated statement of income for the year ended December 31, 2016. Amortization expense relating to this acquisition for the years ended December 31, 2016 and 2015 were $3.6 million and 1.3 million, respectively, which is included in depreciation and amortization. Aggregate amortization expense of intangible assets for the year ended December 31, 2016, was $14.9 million (2015 - $13.6 million, 2014 - $13.2 million), which is included in depreciation and amortization. Amortization of intangible assets following 2016 is expected to be $13.2 million (2017), $12.0 million (2018), $11.2 million (2019), $10.9 million (2020), $10.7 million (2021) and $31.3 million (thereafter). In-Process Revenue Contracts As part of the Company’s acquisition of FPSO units from Sevan Marine ASA (or Sevan) and its previous acquisition of Petrojarl ASA (subsequently renamed Teekay Petrojarl AS, or Teekay Petrojarl), and Teekay LNG’s acquisition of BG’s ownership interests in four LNG carrier newbuildings, the Company assumed certain FPSO contracts and time-charter-out contracts with terms that were less favorable than the then prevailing market terms, and a service obligation for shipbuilding supervision and crew training services for the four LNG carrier newbuildings. At the time of the acquisitions, the Company recognized liabilities based on the estimated fair value of these contracts and service obligations. The Company is amortizing these liabilities over the estimated remaining terms of their associated contracts on a weighted basis, based on the projected revenue to be earned under the contracts. Amortization of in-process revenue contracts for the year ended December 31, 2016 was $28.1 million (2015 - $30.1 million, 2014 - $40.9 million), which is included in revenues on the consolidated statements of income. Amortization of in-process revenue contracts following 2016 is expected to be $34.5 million (2017), $22.7 million (2018), $14.3 million (2019), $13.8 million (2020), $13.8 million (2021) and $23.6 million (thereafter). |
Accrued Liabilities and Other and Other Long-Term Liabilities |
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Accrued Liabilities and Other and Other Long-Term Liabilities |
Accrued Liabilities and Other
Other Long-Term Liabilities
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Long-Term Debt |
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Long-Term Debt |
As of December 31, 2016, the Company had 13 revolving credit facilities (or the Revolvers) available, which, as at such date, provided for aggregate borrowings of up to $1.6 billion, of which $0.5 billion was undrawn. Interest payments are based on LIBOR plus margins; at December 31, 2016 and December 31, 2015, the margins ranged between 0.45% and 4.00% and between 0.45% and 3.95%, respectively. The aggregate amount available under the Revolvers is scheduled to decrease by $482.4 million (2017), $669.7 million (2018), $43.0 million (2019), $0 million (2020), and $369.1 million (thereafter). The Revolvers are collateralized by first-priority mortgages granted on 68 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts. Included in other related security are 38.2 million common units in Teekay Offshore, 25.2 million common units in Teekay LNG and 16.8 million Class A common shares in Teekay Tankers, which secure a $150 million credit facility. The Company’s 8.5% senior unsecured notes are due January 15, 2020 with an original aggregate principal amount of $450 million (or the Original Notes). The Original Notes issued on January 27, 2010 were sold at a price equal to 99.181% of par. In November 2015, the Company issued an aggregate principal amount of $200 million of the Company’s 8.5% senior unsecured notes due on January 15, 2020 (or the Notes) at 99.01% of face value, plus accrued interest from July 15, 2015. The Notes are an additional issuance of the Company’s Original Notes (cumulatively referred to as the 8.5% Notes). The Notes were issued under the same indenture governing the Original Notes, and are fungible with the Original Notes. The discount on the 8.5% Notes is accreted through the maturity date of the notes using the effective interest rate of 8.67% per year. The Company capitalized aggregate issuance costs of $13.3 million which are amortized to interest expense over the term of the 8.5% Notes. As of December 31, 2016, the unamortized balance of the capitalized issuance cost was $5.7 million which is recorded in long-term debt in the consolidated balance sheet. The 8.5% Notes rank equally in right of payment with all of Teekay’s existing and future senior unsecured debt and senior to any future subordinated debt of Teekay. The 8.5% Notes are not guaranteed by any of Teekay’s subsidiaries and effectively rank behind all existing and future secured debt of Teekay and other liabilities of its subsidiaries. The Company may redeem the 8.5% Notes in whole or in part at any time before their maturity date at a redemption price equal to the greater of (i) 100% of the principal amount of the 8.5% Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 8.5% Notes to be redeemed (excluding accrued interest), discounted to the redemption date on a semi-annual basis, at the treasury yield plus 50 basis points, plus accrued and unpaid interest to the redemption date. Teekay Offshore and Teekay LNG have a total of NOK 5.4 billion in senior unsecured bonds in the Norwegian bond market at December 31, 2016 that mature through October 2021. As at December 31, 2016, the total carrying amount of the senior unsecured bonds was $628.3 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin, which ranges from 3.70% to 6.00%. The Company entered into cross currency rate swaps to swap all interest and principal payments of the bonds into U.S. Dollars, with the interest payments fixed at rates ranging from 5.92% to 8.84%, and the transfer of principal amount fixed at $844.0 million upon maturity in exchange for NOK 5.4 billion (see Note 14). In June 2016 Teekay Offshore amended certain of the bond agreements to extend the maturity dates of the senior unsecured bonds. The maturity date for bonds in an aggregate principal amount of NOK 600 million was extended to November 2018, with two interim installments of NOK 180 million. One installment was paid in October 2016 and the other is due in October 2017. The maturity date for bonds in an aggregate principal amount of NOK 800 million was extended to December 2018, with one interim installment of NOK 160 million due in January 2018 and the remaining balance of NOK 640 million repayable in December 2018 at 103% of the principal amount. In October 2016, Teekay LNG issued NOK 900 million unsecured bonds that mature in October 2021 which amount is equivalent to approximately $110 million. In connection with the new bond issuance, Teekay LNG repurchased a portion of its NOK bonds maturing in May 2017, at a price equal to 101.50% of the principal amount of the repurchased bond of NOK 292 million ($36.5 million) for a total purchase price of NOK 296 million. As of December 31, 2016, the Company had 23 U.S. Dollar-denominated term loans outstanding, which totaled $3.7 billion in aggregate principal amount (December 31, 2015 – $4.0 billion). Certain of the term loans with a total outstanding principal balance of $58.3 million as at December 31, 2016 (December 31, 2015 – $48.6 million) bear interest at a weighted-average fixed rate of 2.9% (December 31, 2015 – 4.0%). Interest payments on the remaining term loans are based on LIBOR plus a margin. At December 31, 2016 and December 31, 2015, the margins ranged between 0.30% and 3.5%. The term loan payments are made in quarterly or semi-annual payments commencing three or six months after delivery of each newbuilding vessel financed thereby, and 20 of the term loans have balloon or bullet repayments due at maturity. The term loans are collateralized by first-priority mortgages on 46 (December 31, 2015 – 67) of the Company’s vessels, together with certain other security. In addition, at December 31, 2016, all but $56.2 million (December 31, 2015 – $64.6 million) of the outstanding term loans were guaranteed by Teekay or one of its subsidiaries. During May 2014, Teekay Offshore issued $300 million in five-year senior unsecured bonds that mature in July 2019 in the U.S. bond market. As of December 31, 2016, the carrying amount of the bonds was $300 million. The bonds are listed on the New York Stock Exchange. The interest payments on the bonds are fixed at a rate of 6.0%. In September 2013 and November 2013, Teekay Offshore issued $174.2 million in aggregate of ten-year senior bonds that mature in December 2023 and that were issued in a U.S. private placement to finance the Bossa Nova Spirit and the Sertanejo Spirit shuttle tankers. The bonds accrue interest at a fixed combined rate of 4.96%. The bonds are collateralized by first-priority mortgages on the two vessels to which the bonds relate, together with other related security. Teekay Offshore makes semi-annual repayments on the bonds and as of December 31, 2016, the carrying amount of the bonds was $143.3 million. In February 2015, Teekay Offshore issued $30.0 million in senior bonds that mature in June 2024 in a U.S. private placement. As of December 31, 2016, the carrying amount of the bonds was $23.4 million. The interest payments on the bonds are fixed at a rate of 4.27%. The bonds are collateralized by a first-priority mortgage on the Dampier Spirit FSO unit to which the bonds relate, together with other related security and are guaranteed by two subsidiaries of Teekay Offshore. Teekay LNG has two Euro-denominated term loans outstanding, which, as at December 31, 2016, totaled 208.9 million Euros ($219.7 million) (December 31, 2015 – 222.7 million Euros ($241.8 million)). Teekay LNG is repaying the loans with funds generated by two Euro-denominated, long-term time-charter contracts. Interest payments on the loans are based on EURIBOR plus a margin. At December 31, 2016 and December 31, 2015, the margins ranged between 0.6% and 2.25%. The Euro-denominated term loans reduce in monthly payments with varying maturities through 2023, are collateralized by first-priority mortgages on two of Teekay LNG’s vessels, together with certain other security, and are guaranteed by Teekay LNG and one of its subsidiaries. Both Euro-denominated term loans and NOK-denominated bonds are revalued at the end of each period using the then-prevailing U.S. Dollar exchange rate. Due primarily to the revaluation of the Company’s NOK-denominated bonds, the Company’s Euro-denominated term loans, capital leases and restricted cash, and the change in the valuation of the Company’s cross currency swaps, the Company recognized a foreign exchange loss during 2016 of $6.5 million (2015 – $2.2 million loss, 2014 – $13.4 million gain). The weighted-average effective interest rate on the Company’s aggregate long-term debt as at December 31, 2016 was 4.0% (December 31, 2015 – 3.4%). This rate does not include the effect of the Company’s interest rate swap agreements (see Note 14). Teekay Corporation has guaranteed obligations pursuant to credit facilities of Teekay Tankers and Teekay Offshore. As at December 31, 2016, the aggregate outstanding balance on such credit facilities was $150.0 million and $364.0 million, respectively. The aggregate annual long-term debt principal repayments required to be made by the Company subsequent to December 31, 2016, including the impact of the debt refinancing by Teekay Offshore in March 2017, are $1.0 billion (2017), $1.7 billion (2018), $1.0 billion (2019), $1.1 billion (2020), $0.9 billion (2021) and $1.0 billion (thereafter). The Company and its consolidated subsidiaries are actively pursuing financing and refinancing alternatives for amounts due in 2017 (see Note 15). Among other matters, the Company’s long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and 11 loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2016, these ratios ranged from 116.6% to 433.2% compared to their minimum required ratios of 105% to 125%. The vessel values used in these ratios are the appraised values prepared by the Company based on second hand sale and purchase market data. Changes in the LNG/LPG, conventional tanker, FPSO, shuttle tanker, towage and UMS markets could negatively affect the Company’s compliance with these ratios. Certain loan agreements require that a minimum level of free cash be maintained and as at December 31, 2016 and December 31, 2015, this amount was $50 million for the Company, excluding Teekay Offshore and Teekay LNG. Most of the loan agreements also require that the Company maintain an aggregate minimum level of free liquidity and undrawn revolving credit lines with at least six months to maturity of 5.0% of total debt for either Teekay Parent, Teekay Offshore or Teekay Tankers, which as at December 31, 2016, such amounts were $63.8 million, $159.1 million and $46.7 million, respectively. In addition, certain loan agreements require Teekay LNG to maintain a minimum level of tangible net worth and liquidity, and not exceed a maximum level of financial leverage. As at December 31, 2016, the Company was in compliance with all covenants under its credit facilities and other long-term debt. Certain loan agreements that have been entered into by subsidiaries of the Company require these subsidiaries to maintain an aggregate minimum level of free liquidity and undrawn revolving credit lines with at least six months to maturity and/or a minimum net debt to capitalization ratio. The effect of such agreements is that these subsidiaries are restricted in their ability to transfer a certain amount of their net assets to Teekay, either through loans or dividends/distributions. As at December 31, 2016, Teekay Parent's proportionate share of the restricted net assets of the Company's subsidiaries amounted to $209.0 million. |
Operating and Direct Financing Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating and Direct Financing Leases |
Charters-in As at December 31, 2016, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $185.0 million, comprised of $105.7 million (2017), $44.1 million (2018), $25.5 million (2019), $8.3 million (2020), and $1.4 million (2021). The Company recognizes the expense from these charters, which is included in time-charter hire expense, on a straight-line basis over the firm period of the charters. Charters-out Time charters and bareboat charters of the Company’s vessels to third parties (except as noted below) are accounted for as operating leases. Certain of these charters provide the charterer with the option to acquire the vessel or the option to extend the charter. As at December 31, 2016, minimum scheduled future revenues to be received by the Company on time charters and bareboat charters then in place were approximately $8.0 billion, comprised of $1.3 billion (2017), $1.2 billion (2018), $1.1 billion (2019), $1.0 billion (2020), $0.7 billion (2021) and $2.7 billion (thereafter). The minimum scheduled future revenues should not be construed to reflect total charter hire revenues for any of the years. Minimum scheduled future revenues do not include revenue generated from new contracts entered into after December 31, 2016, revenue from unexercised option periods of contracts that existed on December 31, 2016, revenue from vessels in the Company’s equity accounted investments, or variable or contingent revenues. In addition, minimum scheduled future operating lease revenues presented in this paragraph have been reduced by estimated off-hire time for any periodic maintenance. The amounts may vary given unscheduled future events such as vessel maintenance. The carrying amount of the vessels accounted for as operating leases at December 31, 2016, was $6.6 billion (2015 - $7.1 billion). The cost and accumulated depreciation of the vessels employed on operating leases as at December 31, 2016 were $9.1 billion (2015 - $9.6 billion) and $2.5 billion (2015 - $2.5 billion), respectively. Operating Lease Obligations Teekay Tangguh Joint Venture As at December 31, 2016, the Teekay BLT Corporation (or the Teekay Tangguh Joint Venture) was a party to operating leases (or Head Leases) whereby it is leasing its two LNG carriers (or the Tangguh LNG Carriers) to a third party company. The Teekay Tangguh Joint Venture is then leasing back the LNG carriers from the same third party company (or the Subleases). Under the terms of these leases, the third party company claims tax depreciation on the capital expenditures it incurred to lease the vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the Teekay Tangguh Joint Venture. Lease payments under the Subleases are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lease payments are increased or decreased under the Sublease to maintain the agreed after-tax margin. The Teekay Tangguh Joint Venture’s carrying amounts of this tax indemnification guarantee as at December 31, 2016 and December 31, 2015 were $7.5 million and $8.0 million, respectively, and are included as part of other long-term liabilities in the consolidated balance sheets of the Company. The tax indemnification is for the duration of the lease contract with the third party plus the years it would take for the lease payments to be statute barred, and ends in 2033. Although there is no maximum potential amount of future payments, the Teekay Tangguh Joint Venture may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Teekay Tangguh Joint Venture will be required to make termination payments to the third party company sufficient to repay the third party company’s investment in the vessels and to compensate it for the tax effect of the terminations, including recapture of any tax depreciation. The Head Leases and the Subleases have 20 year terms and are classified as operating leases. The Head Lease and the Sublease for the two Tangguh LNG Carriers commenced in November 2008 and March 2009, respectively. As at December 31, 2016, the total estimated future minimum rental payments to be received and paid under the lease contracts are as follows:
Net Investment in Direct Financing Leases The time charters for the two Tangguh LNG carriers, one FSO unit of Teekay Offshore and certain VOC equipment are accounted for as direct financing leases. In addition, in September and November 2013, Teekay LNG acquired two 155,900-cubic meter LNG carriers (or Awilco LNG Carriers) from Norway-based Awilco LNG ASA (or Awilco) and chartered them back to Awilco on a five- and four-year fixed-rate bareboat charter contract (plus a one-year extension option), respectively, with Awilco holding a fixed-price purchase obligation at the end of the charter. The bareboat charters with Awilco are accounted for as direct financing leases. The purchase price of each vessel was $205.0 million less a $51.0 million upfront prepayment of charter hire by Awilco (inclusive of a $1.0 million upfront fee), which is in addition to the daily bareboat charter rate. The following table lists the components of the net investments in direct financing leases for the five vessels and VOC equipment:
As at December 31, 2016, minimum lease payments to be received by the Company in each of the next five years following 2016 were $206.2 million (2017), $175.0 million (2018), $40.4 million (2019), $40.4 million (2020), $40.4 million (2021) and $1.9 million (thereafter). The FSO contract is scheduled to expire in 2017, the LNG time charters are both scheduled to expire in 2029 and the two LNG carriers under the Awilco LNG carrier leases expire in 2017 and 2018. |
Capital Lease Obligations |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Lease Obligations |
Capital Lease Obligations
LNG Carriers. As at December 31, 2016, Teekay LNG was a party to capital leases on two LNG carriers, the Creole Spirit and Oak Spirit. Upon delivery of the Creole Spirit in February 2016 and the Oak Spirit in July 2016, Teekay LNG sold these vessels to a third party and leased them back under 10-year bareboat charter contracts ending in 2026. The bareboat charter contracts are fixed-rate capital leases with a fixed-price purchase obligation at the end of the lease terms. At inception of these leases, the weighted-average interest rate implicit in these leases was 5.5%. Teekay LNG guarantees the obligations of the bareboat charter contracts. In addition, the guarantee agreements require Teekay LNG to maintain minimum levels of tangible net worth and aggregate liquidity, and not to exceed a maximum amount of leverage. In December 2016, Teekay LNG entered into a $682.8 million sale-leaseback agreement with ICBC Leasing for four of Teekay LNG’s LNG carrier newbuildings equipped with MEGI twin engines, delivering in 2017 and 2018, and at such dates, ICBC Financial Leasing Co., Ltd. will take delivery and charter each respective vessel back to Teekay LNG. As at December 31, 2016, the remaining commitments under the two capital leases for the Creole Spirit and the Oak Spirit, including the related purchase obligations, approximated $478.1 million, including imputed interest of $139.8 million, repayable from 2017 through 2026, as indicated below:
Suezmax Tankers. As at December 31, 2016, Teekay LNG was a party to capital leases on two Suezmax tankers. Under these capital leases, the owner has the option to require Teekay LNG to purchase the two vessels. The charterer, who is also the owner, also has the option to cancel the charter contracts and the cancellation options are first exercisable in October 2017 and July 2018, respectively. The amounts in the table below assume the owner will not exercise its options to require Teekay LNG to purchase either of the two remaining vessels, but rather it assumes the owner will cancel the charter contracts when the cancellation right is first exercisable (in October 2017 and July 2018, respectively), and sell the vessels to a third party, upon which the lease obligations will be extinguished. At the inception of these leases, the weighted-average interest rate implicit in these leases was 5.5%. These capital leases are variable-rate capital leases. However, any change in the lease payments resulting from changes in interest rates is offset by a corresponding change in the charter hire payments received by Teekay LNG. As at December 31, 2016, the remaining commitments under the two capital leases for Suezmax Tankers, including the related purchase obligations, approximated $58.2 million, including imputed interest of $3.6 million, repayable from 2017 through 2018, as indicated below:
The Company’s capital leases do not contain financial or restrictive covenants other than those relating to operation and maintenance of the vessels. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other non-financial assets. Cash and cash equivalents, restricted cash and marketable securities - The fair value of the Company’s cash and cash equivalents restricted cash, and marketable securities approximates their carrying amounts reported in the accompanying consolidated balance sheets. Vessels and equipment and assets held for sale – The estimated fair value of the Company’s vessels and equipment and assets held for sale was determined based on discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists, an appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company. Other assets held for sale include working capital balances and the fair value of such amounts generally approximate their carrying value. Long-term investments - The estimated fair value of the Company’s long-term investments was determined based on discounted cash flows or appraised values. As an active second hand sale and purchase market exists, the appraised value is the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company. Long-term investments include variable-rate long-term debt balances and the fair value of such amounts is estimated using discounted cash flow analyses, based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the Company. Long-term investments also include working capital balances and the fair value of such amounts generally approximate their carrying value. Loans to equity-accounted investees and joint venture partners – The fair value of the Company’s loans to joint ventures and joint venture partners approximates their carrying amounts reported in the accompanying consolidated balance sheets. Long-term receivable included in accounts receivable and other assets – The fair values of the Company’s long-term loan receivable is estimated using discounted cash flow analysis based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the counterparty. Long-term debt – The fair value of the Company’s fixed-rate and variable-rate long-term debt is either based on quoted market prices or estimated using discounted cash flow analyses, based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the Company. Alternatively, if the fixed-rate and variable-rate long-term debt is held for sale the fair value is based on the estimated sales price. Derivative instruments – The fair value of the Company’s derivative instruments is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, foreign exchange rates, and the current credit worthiness of both the Company and the derivative counterparties. The estimated amount is the present value of future cash flows. The Company transacts all of its derivative instruments through investment-grade rated financial institutions at the time of the transaction and requires no collateral from these institutions. Given the current volatility in the credit markets, it is reasonably possible that the amounts recorded as derivative assets and liabilities could vary by material amounts in the near term. The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows: Level 1.Observable inputs such as quoted prices in active markets; Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3.Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at a fair value on a recurring basis.
Time-charter swap agreement - Changes in fair value during the years ended December 31, 2016 and 2015 for Teekay Tankers' time-charter swap agreement, which is described in Note 14 below and is measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:
The estimated fair value of the time-charter swap agreement is based in part upon the Company’s projection of future Aframax spot market tanker rates, which has been derived from current Aframax spot market tanker rates and estimated future rates, as well as an estimated discount rate. The estimated fair value of the time-charter swap agreement as of December 31, 2016 is based upon an estimated average daily tanker rate of approximately $18,000 over the remaining duration of the contract. In developing and evaluating this estimate, the Company considers the current tanker market fundamentals as well as the short and long-term outlook. A higher or lower average daily tanker rate would result in a higher or lower fair value liability or a lower or higher fair value asset. A higher or lower discount rate would result in a lower or higher fair value asset or liability. Stock purchase warrants – During January 2014, the Company received from TIL stock purchase warrants entitling it to purchase up to 1.5 million shares of the common stock of TIL (see Note 14). The estimated fair value of the stock purchase warrants was determined using a Monte-Carlo simulation and is based, in part, on the historical price of common shares of TIL, the risk-free rate, vesting conditions and the historical volatility of comparable companies. The estimated fair value of these stock purchase warrants as of December 31, 2016 was based on the historical volatility of the comparable companies of 47.8%. A higher or lower volatility would result in a higher or lower fair value of this derivative asset. Changes in fair value during the years ended December 31, 2016 and 2015 for one of the Company’s derivative instruments, the TIL stock purchase warrants, which are described above and are measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:
Contingent consideration liability – In August 2014, Teekay Offshore acquired 100% of the outstanding shares of Logitel, a Norway-based company focused on high-end UMS, from CeFront Technology AS (or CeFront) for $4.0 million, which was paid in cash at closing, plus a commitment to pay an additional amount of up to $27.6 million, depending upon certain performance criteria. During the second quarter of 2016, Teekay Offshore canceled the UMS construction contracts for its two remaining UMS newbuildings. This is expected to eliminate any future purchase price contingent consideration payments. Consequently, the contingent liability was reversed in the second quarter of 2016. The gain associated with this reversal is included in Other (loss) income on the Company's consolidated statement of income for the year ended December 31, 2016. Changes in the estimated fair value of Teekay Offshore’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the years ended December 31, 2016 and 2015 is as follows:
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Capital Stock |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Capital Stock The authorized capital stock of Teekay at December 31, 2016 and 2015, was 25,000,000 shares of Preferred Stock, with a par value of $1 per share, and 725,000,000 shares of Common Stock, with a par value of $0.001 per share. As at December 31, 2016, 86,149,975 shares of Common Stock (2015 – 72,711,371) were issued and outstanding and no shares of Preferred Stock issued. During 2016, Teekay issued 0.1 million shares of common stock upon the exercise or issuance of stock options, restricted stock units and restricted stock awards and issued approximately 12.0 million shares of common stock in a private placement for net proceeds of approximately $96.2 million. In 2016, Teekay implemented a continuous offering program (or COP) under which Teekay may issue new common stock, at market prices up to a maximum aggregate amount of $50.0 million. During 2016, Teekay sold an aggregate of 1.3 million shares of common stock under the COP, generating net proceeds of approximately $9.3 million (net of approximately $0.4 million of offering costs). Teekay used the net proceeds from the issuance of these shares of common stock for general corporate purposes. During 2015, the Company issued 0.2 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. During 2014, the Company issued 1.8 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. Dividends may be declared and paid out of surplus, but if there is no surplus, dividends may be declared or paid out of the net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. Surplus is the excess of the net assets of the Company over the aggregated par value of the issued shares of the Teekay. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to share equally in any dividends that the Board of Directors may declare from time to time out of funds legally available for dividends. During 2008, Teekay announced that its Board of Directors had authorized the repurchase of up to $200 million of shares of its Common Stock in the open market, subject to cancellation upon approval by the Board of Directors. As at December 31, 2016, Teekay had repurchased approximately 5.2 million shares of Common Stock for $162.3 million pursuant to such authorization. The total remaining share repurchase authorization at December 31, 2016, was $37.7 million. On July 2, 2010, the Company amended and restated its Shareholder Rights Agreement (the Rights Agreement), which was originally adopted by the Board of Directors in September 2000. In September 2000, the Board of Directors declared a dividend of one common share purchase right (or a Right) for each outstanding share of the Company’s common stock. These Rights continue to remain outstanding and will not be exercisable and will trade with the shares of the Company’s common stock until after such time, if any, as a person or group becomes an “acquiring person” as set forth in the amended Rights Agreement. A person or group will be deemed to be an “acquiring person,” and the Rights generally will become exercisable, if a person or group acquires 20% or more of the Company’s common stock, or if a person or group commences a tender offer that could result in that person or group owning more than 20% of the Company’s common stock, subject to certain higher thresholds for existing shareholders that owned in excess of 15% of the Company’s common stock when the Rights Agreement was amended. Once exercisable, each Right held by a person other than the “acquiring person” would entitle the holder to purchase, at the then-current exercise price, a number of shares of common stock of the Company having a value of twice the exercise price of the Right. In addition, if the Company is acquired in a merger or other business combination transaction after any such event, each holder of a Right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the Right. The amended Rights Agreement will expire on July 1, 2020, unless the expiry date is extended or the Rights are earlier redeemed or exchanged by the Company. Stock-based compensation In March 2013, the Company adopted the 2013 Equity Incentive Plan (or the 2013 Plan) and suspended the 1995 Stock Option Plan and the 2003 Equity Incentive Plan (collectively referred to as the Plans). As at December 31, 2016, the Company had reserved 4,780,371 (2015 - 4,527,282) shares of Common Stock pursuant to the 2013 Plan, for issuance upon the exercise of options or equity awards granted or to be granted. During the years ended December 31, 2016, 2015 and 2014, the Company granted options under the 2013 Plan to acquire up to 916,015, 265,135 and 15,243 shares of Common Stock, respectively, to certain eligible officers, employees and directors of the Company. The options under the Plans have ten-year terms and vest equally over three years from the grant date. All options outstanding as of December 31, 2016, expire between March 13, 2017 and March 7, 2026, ten years after the date of each respective grant. A summary of the Company’s stock option activity and related information for the years ended December 31, 2016, 2015, and 2014, are as follows:
A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2016, 2015 and 2014, are as follows:
The weighted average grant date fair value for non-vested options forfeited in 2016 was $0.0 million (2015 - $0.0 million, 2014 - $0.1 million). As of December 31, 2016, there was $1.2 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. Recognition of this compensation is expected to be $0.6 million (2017), $0.5 million (2018) and $0.1 million (2019). During the years ended December 31, 2016, 2015, and 2014, the Company recognized $1.5 million, $1.7 million and $1.0 million, respectively, of compensation cost relating to stock options granted under the Plans. There were no options in-the-money during 2016. The intrinsic value of options exercised during 2015 was $0.5 million and during 2014 was $22.6 million. As at December 31, 2016 and 2015, there was no intrinsic value in the outstanding and exercisable stock options. As at December 31, 2016, the weighted-average remaining life of options vested and expected to vest was 4.5 years (2015 – 3.4 years). Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2016 are as follows:
The weighted-average grant-date fair value of options granted during 2016 was $3.60 per option (2015 - $7.74, 2014 - $11.50). The fair value of each option granted was estimated on the date of the grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used in computing the fair value of the options granted: expected volatility of 55.1% in 2016, 31.1% in 2015 and 34.7% in 2014; expected life of 6 years in 2016 and 5 years in 2015 and 2014; dividend yield of 3.2% in 2016 and 4.4% in 2015 and 2014; risk-free interest rate of 1.3% in 2016, 1.4% in 2015, and 1.6% in 2014; and estimated forfeiture rate of 7% in 2016, 8% in 2015 and 12% 2014. The expected life of the options granted was estimated using the historical exercise behavior of employees. The expected volatility was generally based on historical volatility as calculated using historical data during the five years prior to the grant date. The Company grants restricted stock units and performance share units to certain eligible officers and employees of the Company. Each restricted stock unit and performance share unit is equivalent in value to one share of the Company’s common stock plus reinvested dividends from the grant date to the vesting date. The restricted stock units vest equally over three years from the grant date and the performance share units vest two or three years from the grant date. Upon vesting, the value of the restricted stock units, restricted stock awards and performance shares are paid to each grantee in the form of shares or cash. The number of performance share units that vest will range from zero to a multiple of the original number granted, based on certain performance and market conditions. During 2016, the Company granted 238,609 restricted stock units with a fair value of $2.3 million and 311,691 performance share units with a fair value of $3.6 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees. During 2016, a total of 98,844 restricted stock units with a market value of $4.3 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 59,518 shares of common stock. During 2015, the Company granted 63,912 restricted stock units with a fair value of $2.8 million and 61,774 performance share units with a fair value of $3.4 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees. During 2015, a total of 101,419 restricted stock units with a market value of $4.3 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 98,381 shares of common stock. During 2014, the Company granted 81,388 restricted stock units with a fair value of $4.6 million and 50,689 performance share units with a fair value of $3.4 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees. During 2014, a total of 261,911 restricted stock units with a market value of $8.5 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 149,082 shares of common stock. For the year ended December 31, 2016, the Company recorded an expense of $4.2 million (2015 - $4.5 million, 2014 - $7.5 million) related to the restricted stock units and performance share units. During 2016, the Company also granted 67,000 (2015 – 22,502 and 2014 – 18,230) shares as restricted stock awards with a fair value of $0.6 million (2015 – $1.0 million and 2014 – $1.0 million), based on the quoted market price, to certain of the Company’s directors. The shares of restricted stock are issued when granted. Share-based Compensation of Subsidiaries During the years ended December 31, 2016, 2015 and 2014, 76,084, 14,603 and 9,482 common units of Teekay Offshore, 32,723, 10,447 and 9,521 common units of Teekay LNG and 9,358, 51,948 and 17,073 shares of Class A common stock of Teekay Tankers, with aggregate values of $0.7 million, $1.0 million, and $0.8 million, respectively, were granted and issued to the non-management directors of the general partners of Teekay Offshore and Teekay LNG and the non-management directors of Teekay Tankers as part of their annual compensation for 2016, 2015 and 2014. Teekay Offshore, Teekay LNG and Teekay Tankers grant equity-based compensation awards as incentive-based compensation to certain employees of Teekay’s subsidiaries that provide services to Teekay Offshore, Teekay LNG and Teekay Tankers. During March 2016, 2015 and 2014, Teekay Offshore and Teekay LNG granted phantom unit awards and Teekay Tankers granted restricted stock-based compensation awards with respect to 601,368, 102,843 and 67,569 units of Teekay Offshore, 132,582, 32,054 and 31,961 units of Teekay LNG and 279,980, 192,387 and 586,014 Class A common shares of Teekay Tankers, respectively, with aggregate grant date fair values of $4.9 million, $4.2 million and $5.7 million, respectively, based on Teekay Offshore, Teekay LNG and Teekay Tankers’ closing unit or stock prices on the grant dates. Each phantom unit or restricted stock unit is equal in value to one of Teekay Offshore’s, Teekay LNG’s or Teekay Tankers’ common units or common shares plus reinvested distributions or dividends from the grant date to the vesting date. The awards vest equally over three years from the grant date. Any portion of an award that is not vested on the date of a recipient’s termination of service is cancelled, unless their termination arises as a result of the recipient’s retirement, in which case the award will continue to vest in accordance with the vesting schedule. Upon vesting, the awards are paid to a substantial majority of the grantees in the form of common units or common shares, net of withholding tax. During March 2016, Teekay Tankers granted 216,043 stock options with an exercise price of $3.74 per share that have a ten-year term and vest equally over three years from the grant date to an officer of Teekay Tankers. During March 2015, Teekay Tankers granted 58,434 stock options with an exercise price of $5.39 per share that have a ten-year term and vest equally over three years from the grant date to an officer of Teekay Tankers. During June 2014, Teekay Tankers granted 110,829 stock options with an exercise price of $4.25 per share that have a ten-year term and vest equally over three years from the grant date to an officer of Teekay Tankers. During March 2016, Teekay Tankers granted 284,693 stock options with an exercise price of $3.74 per share that have a ten-year term and vest immediately to non-management directors of Teekay Tankers. During March 2014, Teekay Tankers granted 152,346 stock options with an exercise price of $4.10 per share that have a ten-year term and vest immediately to non-management directors of Teekay Tankers. |
Related Party Transactions |
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Dec. 31, 2016 | |||||
Related Party Transactions [Abstract] | |||||
Related Party Transactions |
As at December 31, 2016, Resolute Investments, Ltd. (or Resolute) owned 37.1% (2015 – 39.1%, 2014 – 34.8%) of the Company’s outstanding Common Stock. One of the Company’s directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of the Company’s directors, Axel Karlshoej, is among the directors of Path Spirit Limited, which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. The Company’s Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including those in the Teekay group of companies. Another of the Company’s directors, Bjorn Moller, is a director of Kattegat Limited. |
Other (Loss) Income |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (Loss) Income |
(1) The company holds investments at cost. During the year ended December 31, 2016 the Company recorded a write-down of these investments of $19.0 million. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities |
The Company uses derivatives to manage certain risks in accordance with its overall risk management policies. Foreign Exchange Risk The Company economically hedges portions of its forecasted expenditures denominated in foreign currencies with foreign currency forward contracts. As at December 31, 2016, the Company was committed to the following foreign currency forward contracts:
(1)Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy. The Company enters into cross currency swaps and pursuant to these swaps the Company receives the principal amount in NOK on the maturity date of the swap, in exchange for payment of a fixed U.S. Dollar amount. In addition, the cross currency swaps exchange a receipt of floating interest in NOK based on NIBOR plus a margin for a payment of U.S. Dollar fixed interest. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and principal at maturity of the Company’s NOK-denominated bonds due in 2017 through 2021. In addition, the cross currency swaps economically hedge the interest rate exposure on the NOK bonds due in 2017 through 2021. The Company has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its NOK-denominated bonds due in 2017 through 2021. As at December 31, 2016, the Company was committed to the following cross currency swaps:
Interest Rate Risk The Company enters into interest rate swap agreements, which exchange a receipt of floating interest for a payment of fixed interest, to reduce the Company’s exposure to interest rate variability on its outstanding floating-rate debt. The Company designates certain of its interest rate swap agreements as cash flow hedges for accounting purposes. As at December 31, 2016, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt obligations were swapped with fixed-rate obligations:
Teekay Corporation has guaranteed obligations, up to a maximum of $387.0 million, pursuant to certain interest rate swaps and cross currency swaps of Teekay Offshore. As at December 31, 2016, the estimated fair value of these interest rate swaps and cross currency swaps, capped at the maximum guarantee obligation, was a liability of $241.3 million. Stock Purchase Warrants In January 2014, Teekay and Teekay Tankers formed TIL. Teekay and Teekay Tankers purchased an aggregate of 5.0 million shares of TIL’s common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In addition, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase an aggregate of up to 1.5 million shares of common stock of TIL at a fixed price of $10 per share. Alternatively, if the shares of TIL’s common stock trade on a national securities exchange or over-the-counter market denominated in NOK, Teekay and Teekay Tankers may also exercise their stock purchase warrants at 61.67 NOK per share. The estimated fair value of the warrants on issuance was $6.8 million and was included in other (loss) income in the consolidated statements of income. The stock purchase warrants vest in four equally sized tranches and as at December 31, 2016, two tranches had vested. If the shares of TIL’s common stock trade on a national securities exchange or over-the-counter market denominated in NOK, each tranche will vest and become exercisable when and if the fair market value of a share of TIL’s common stock equals or exceeds 77.08 NOK, 92.50 NOK, 107.91 NOK and 123.33 NOK, respectively, for such tranche for any ten consecutive trading days. The stock purchase warrants expire on January 23, 2019. The fair value of the stock purchase warrants at December 31, 2016 was $0.6 million. The Company reports the unrealized gains from the stock purchase warrants in realized and unrealized losses on non-designated derivatives in the consolidated statements of income. Time-charter Swap Effective June 1, 2016, Teekay Tankers entered into a time-charter swap agreement for 55% of two Aframax-equivalent vessels. Under such agreement, Teekay Tankers will receive $27,776 per day, net of a 1.25% brokerage commission, and pay 55% of the net revenue distribution of two Aframax-equivalent vessels employed in Teekay Tankers' Aframax revenue sharing pooling arrangement, less $500 per day, for a period of 11 months plus an additional two months at the counterparty's option. The purpose of the agreement is to reduce Teekay Tankers’ exposure to spot tanker market rate variability for certain of its vessels that are employed in the Aframax revenue sharing pooling arrangement. Teekay Tankers has not designated, for accounting purposes, the time-charter swap as a cash flow hedge. The fair value of the time-charter swap agreement at December 31, 2016 was an asset of $0.2 million. Tabular Disclosure The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.
As at December 31, 2016, the Company had multiple interest rate swaps, cross currency swaps and foreign currency forward contracts with the same counterparty that are subject to the same master agreements. Each of these master agreements provides for the net settlement of all derivatives subject to that master agreement through a single payment in the event of default or termination of any one derivative. The fair value of these derivatives is presented on a gross basis in the Company’s consolidated balance sheets. As at December 31, 2016, these derivatives had an aggregate fair value asset amount of $7.2 million (December 31, 2015 - $nil) and an aggregate fair value liability amount of $398.7 million (December 31, 2015 - $588.1 million). As at December 31, 2016, the Company had $68.0 million on deposit with the relevant counterparties as security for swap liabilities under certain master agreements (December 31, 2015 - $105.3 million). The deposit is presented in restricted cash on the consolidated balance sheets. For the periods indicated, the following table presents the effective portion of gains (losses) on interest rate swap agreements designated and qualifying as cash flow hedges:
(1) Recognized in accumulated other comprehensive loss (or AOCI). (2) Recorded in AOCI during the term of the hedging relationship and reclassified to earnings. (3) Recognized in the ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges. As at December 31, 2016, the Company estimated, based on then current interest rates, that it would reclassify approximately $0.7 million of net losses on interest rate swaps from accumulated other comprehensive loss to earnings during the next 12 months. Realized and unrealized gains and (losses) from derivative instruments that are not designated for accounting purposes as cash flow hedges, are recognized in earnings and reported in realized and unrealized losses on non-designated derivatives in the consolidated statements of income. The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income are as follows:
Realized and unrealized losses of the cross currency swaps are recognized in earnings and reported in foreign exchange (loss) gain in the consolidated statements of income. The effect of the loss on cross currency swaps on the consolidated statements of income is as follows:
The Company is exposed to credit loss to the extent the fair value represents an asset in the event of non-performance by the counterparties to the foreign currency forward contracts, and cross currency and interest rate swap agreements; however, the Company does not anticipate non-performance by any of the counterparties. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transaction. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk. |
Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies a)Vessels under Construction As at December 31, 2016, the Company was committed to the construction of nine LNG carriers, three long-haul towage vessels, three shuttle tankers, one FSO conversion and one FPSO upgrade for a total cost of approximately $3.0 billion, including capitalized interest and other miscellaneous construction costs. Vessels in which the Company holds an interest through non-consolidated joint ventures are excluded from the above amounts and are described in Note 15b. Three LNG carriers are scheduled for delivery in 2017, four LNG carriers are scheduled for delivery in 2018 and two LNG carriers are scheduled for delivery in 2019. Three long-distance towing and offshore installation vessels are scheduled for delivery during 2017, three shuttle tankers are expected to be delivered in late-2017 through the first half of 2018, the one FSO conversion is scheduled for completion in mid-2017 and the one FPSO upgrade is scheduled for completion in 2017. As at December 31, 2016, payments made towards these commitments totaled $1.0 billion. As at December 31, 2016, the remaining payments required to be made under these newbuilding and conversion capital commitments were $1.1 billion (2017), $607.3 million (2018), $250.3 million (2019). b)Joint Ventures Teekay LNG’s share of commitments to fund newbuilding and other construction contract costs of its non-consolidated joint ventures as at December 31, 2016 are as follows:
In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a 50/50 joint venture with Brazilian-based Odebrecht Oil & Gas S.A. (or OOG). The vessel is committed to a new FPSO conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project has been completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in mid-2017 under a 12-year fixed-rate contract with Petrobras. The FPSO conversion is expected to cost approximately $1.0 billion. As at December 31, 2016, payments made by the joint venture towards these commitments totaled $700.6 million and the estimated remaining payments required to be made are $302.3 million (2017). The joint venture secured a long-term debt facility providing total borrowings of up to $804.0 million for the FPSO conversion, of which $266.7 million was undrawn as at December 31, 2016. During 2016, as a result of certain defaults on interest payments by an OOG affiliate which OOG had guaranteed, the Libra Joint Venture was required to obtain cross default waivers from the lenders of the construction period loan facility. The current waiver is due to expire on June 16, 2017. Although the Libra Joint Venture expects to obtain further cross default waivers from the facility lenders, a failure to do so could adversely affect its ability to fund and complete the Libra FPSO conversion. c)Liquidity As of December 31, 2016, the Company adopted the new accounting standard ASC-205-40, Presentation of Financial Statements - Going Concern, which requires management to assess if the Company will have sufficient liquidity to continue as a going concern for the one-year period following the issuance of its financial statements. Despite generating $87 million of consolidated net income and $620 million of consolidated cash flows from operating activities during 2016, the Company ended the year with a working capital deficit of $365 million. This working capital deficit is driven primarily from scheduled 2017 maturities and repayments of outstanding consolidated debt of approximately $1.0 billion, which were classified as current liabilities as at December 31, 2016. In addition to these obligations, the Company also anticipates that Teekay LNG and Teekay Offshore will be required to make payments related to commitments to fund vessels under construction or undergoing conversions/upgrades. (see Notes 15a and 15b). Based on these factors, over the one-year period following the issuance of its consolidated financial statements, the Company’s consolidated subsidiaries Teekay Tankers, Teekay LNG and Teekay Offshore will need to obtain additional sources of financing, in addition to amounts generated from operations, to meet the minimum liquidity requirements under the financial covenants related to these subsidiaries. These anticipated sources of financing include: raising additional capital through equity issuances; refinancing and increasing amounts available under various loan facilities of Teekay Tankers, Teekay LNG and Teekay Offshore; negotiating new secured debt financings related to vessels under construction or other unencumbered operating vessels for Teekay Tankers, Teekay LNG and Teekay Offshore; and, for Teekay Offshore, negotiating extensions or redeployments of existing assets and the sale of partial interests in certain assets. The success of these initiatives of the Daughter Companies may impact the liquidity of Teekay Parent as a result of certain guarantees provided by Teekay Parent and through the payment of dividends/distributions by the Daughter Companies to Teekay Parent. The Company is actively pursuing the alternatives described above, which it considers probable of completion based on the Company’s history of being able to raise equity, refinance similar loan facilities and to obtain new debt financing for its vessels under construction, as well as the progress it has made on the financing process to date and indicative offers received from potential investors in certain assets. The Company is in various stages of completion on these matters. Based on the Company’s liquidity at the date these consolidated financial statements were issued, the liquidity it expects to generate from operations over the following year, and by incorporating the Company’s plans to raise additional liquidity that it considers probable of completion, the Company estimates that it will have sufficient liquidity to continue as a going concern for at least the one-year period following the issuance of these consolidated financial statements. d)Legal Proceedings and Claims The Company may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. The Company believes that any adverse outcome of existing claims, other than with respect to the items noted below, individually or in the aggregate, would not have a material effect on its financial position, results of operations or cash flows, when taking into account its insurance coverage and indemnifications from charterers. Polar Spirit contract termination In December 2016, Teekay was awarded $42.4 million plus interest by an arbitrator for unpaid hire and damages for termination of a time-charter contract relating to the Polar Spirit. The charterers have not responded and Teekay is looking to enforce the award. As the collectability of the award is uncertain, no amounts have been accrued. Cancellation of two UMS newbuilding contracts In August 2014, Teekay Offshore acquired 100% of the outstanding shares of Logitel, a Norway-based company focused on high-end UMS. As part of this transaction, Teekay Offshore assumed three UMS newbuilding contracts ordered from COSCO. Teekay Offshore took delivery of one of the UMS newbuildings, the Arendal Spirit, in February 2015. In June 2016, Teekay Offshore canceled the UMS construction contracts for the two remaining UMS newbuildings, the Stavanger Spirit and Nantong Spirit. As a result of this cancellation, during the second quarter of 2016, Teekay Offshore wrote-off $43.7 million of the assets related to these newbuildings and reversed contingent liabilities of $14.5 million associated with the delivery of these assets. The estimate of potential damages for the cancellation of the Stavanger Spirit newbuilding contract is based on the amount due for the final yard installment of approximately $170 million less the estimated fair value of the Stavanger Spirit. Given the unique design of the vessel as well as the lack of recent sale and purchase transactions for this type of asset, the value of this vessel, and thus ultimately the amount of potential damages that may result from the cancellation, is uncertain. Pursuant to the Stavanger Spirit newbuilding contract and related agreements, Teekay Offshore believes COSCO only has recourse to the single purpose subsidiary that was a party to the Stavanger Spirit newbuilding contract and its immediate parent company, Logitel Offshore Pte. Ltd., for damages incurred. The estimate of potential damages for the cancellation of the Nantong Spirit newbuilding contract is based upon estimates of a number of factors, including accumulated costs incurred by COSCO, sub-supplier contract cancellation costs, as well as how such costs are treated under the termination provisions in the contract. Teekay Offshore estimates that the amount of potential damages related to the cancellation of the Nantong Spirit contract could range between $10 million and $40 million. Pursuant to the Nantong Spirit newbuilding contract, Teekay Offshore believes COSCO only has recourse to the single purpose subsidiary that was a party to the Nantong Spirit newbuilding contract. During September 2016, Sevan commenced an action against Logitel, which Teekay Offshore acquired in 2014, in the Oslo District Court. The action relates to the agreements between Sevan and CeFront, related to the 2013 transfer to Logitel Offshore Pte. Ltd. or its wholly-owned subsidiaries (collectively Logitel Offshore) of two hulls to be converted into UMS, including the $60 million bond loan (of which $41 million was a vendor credit and $19 million was a cash loan) granted by a Sevan affiliate to Logitel (or the 2013 Transaction). The action also relates to agreements between Sevan and Teekay Offshore entered into in connection with Teekay Offshore's acquisition of Logitel from CeFront in 2014 (or the 2014 Transaction). Sevan has claimed that the $60 million bond loan to Logitel contravened certain provisions of the Norwegian Corporate Law and that Sevan is entitled to the remaining payment of $50 million plus interest set at the court’s discretion. Logitel intends to dispute these claims. In addition, Sevan has presented Teekay Offshore with a formal notice of claim and request for arbitration seeking $10 million for license and services fees, which Sevan claims is payable in connection with the delivery of the Arendal Spirit. The parties are in the process of selecting an arbitration tribunal and exchanging information on their respective calculations of the amount of license and service fees that may be due. In addition, in September 2016, CeFront commenced an action against Logitel in the Oslo District Court, claiming that $2.8 million is due under a management agreement and an additional $3.6 million will fall due by May 2017 under that agreement. CeFront also claims that $3.3 million is due under the earn-out provisions of the contracts related to the Arendal Spirit and that $20.2 million is due or will become due related to the earn-out provisions of the contracts for the Stavanger Spirit and Nantong Spirit. Teekay Offshore is defending these claims based on its interpretation of the agreement. Teekay Offshore is uncertain as to the ultimate resolution of these claims. As at December 31, 2016, Teekay Offshore has accrued $61.9 million in the aggregate related to the above claims and potential claims related to Logitel from Sevan, COSCO and CeFront. Petrojarl Knarr FPSO In October 2016 Teekay Offshore received a claim from Royal Dutch Shell Plc (or Shell) for liquidated damages of $23.6 million. This claim is based on Shell's allegation that the Petrojarl Knarr FPSO did not meet the conditions for achieving the Offshore Completion milestone on time. Shell is also claiming that the inability of Teekay Offshore to meet the Offshore Completion milestone date in excess of the grace period has in effect resulted in a 20% reduction in the purchase price for which Shell may purchase the Petrojarl Knarr FPSO from Teekay Offshore pursuant to an option granted in the Purchase Option Agreement. In the counterclaim, Teekay Offshore has alleged that Offshore Completion was achieved after the milestone but within the grace period and that Shell had caused delays due to certain defaults in Shell’s specifications, as well as other events. It is Teekay Offshore’s position that, due to delays caused by Shell, Teekay Offshore is entitled to the daily lease rate for the unit for a period of time prior to when Shell actually started paying such rate and that Shell is not entitled to a reduction in the Purchase Option Price. The duration of any such period that Teekay Offshore claims to be entitled to receive additional daily lease payments is in dispute. However, Teekay Offshore expects that the amount of its claim relating to the counterclaim will exceed Shell's claim of liquidated damages. Nevertheless, uncertainty exists as to the resolution of the claims. Arendal Spirit UMS In early-November 2016, the Arendal Spirit UMS experienced an operational incident relating to its dynamic positioning system. As a result of this operational incident, and a gangway incident that occurred in April 2016, the charterer, Petrobras, initiated an operational review. Until the results of the review are available, Petrobras has suspended its charter hire payments since November 2016. Teekay Offshore completed an investigation to identify the cause of such incidents and has implemented corrective actions. There is a risk that Petrobras may seek to cancel the charter contract resulting from their operational review. If this occurs, the term loan outstanding for the Arendal Spirit UMS, which as at December 31, 2016 had a balance of $127.5 million, could become payable within 180 days of a cancellation. Teekay Offshore is working to address Petrobras' concerns to bring the unit back into operation as soon as possible. Should the contract be cancelled, it could result in a reclassification of $112.5 million of long-term debt to the current portion of long-term debt unless Teekay Offshore is able to obtain an extension from the lenders. Piranema Spirit FPSO Contract In March 2016, Petrobras claimed that Teekay Offshore’s November 2011 cessation of paying certain agency fees with respect to the Piranema Spirit FPSO unit’s employment should have resulted in a corresponding 2.0% rate reduction on the FPSO contract with Petrobras. Teekay Offshore has estimated the maximum amount of the claim at $7.5 million, consisting of $5.4 million (which is the amount accrued by Teekay Offshore as at December 31, 2016) from a return of 2.0% of the charter hire previously paid by Petrobras to Teekay Offshore for the period from November 2011 up to December 31, 2016, and $2.1 million from a 2.0% reduction of future charter hire to the end of the term of the FPSO contract with Petrobras. Towage of the Ocean Winner In February 2017, Teekay Offshore received a notice from Transocean Offshore International Ventures Limited (or Transocean) that it intends to file a claim against Teekay Offshore arising from the towage of the Transocean Winner oil rig by one of its towage vessels, the ALP Forward. Transocean intends to file a claim to recover losses it incurred relating to the grounding of the Transocean Winner in August 2016, including the costs associated with the salvage, replacement tow and other costs payable by Transocean as a result of this incident. Teekay Offshore intends to dispute these claims and believes that such claims would be covered by insurance. As at December 31, 2016, Teekay Offshore had not accrued for any potential liability relating to these claims. An estimate of the possible loss or range of loss cannot be made at this time. Damen Shipyard Group In December 2014, Teekay Offshore acquired the Petrojarl I FPSO unit from Teekay Corporation for $57.0 million. The Petrojarl I is undergoing upgrades at the Damen Shipyard Group’s DSR Schiedam Shipyard (or Damen) in the Netherlands with an estimated total cost of approximately $350 million, which includes the cost of acquiring the Petrojarl I. The FPSO is expected to commence operations in the late-2017 under a five-year charter contract with Queiroz Galvão Exploração e Produção SA (or QGEP). As at December 31, 2016, payments made towards these commitments, including the acquisition of the Petrojarl I FPSO unit from Teekay Corporation, totaled $252.5 million and the remaining payments required to be made are estimated to be $97.5 million in 2017. Teekay Offshore is currently in negotiations with the yard regarding the valuation of certain variation orders relating to the upgrades. The outcome of these negotiations may impact the total estimated cost of the Petrojarl I FPSO unit. Teekay Offshore has financed $171.2 million of the Pertrojarl I FPSO upgrade cost through a fully-drawn long-term loan. Due to project delays in the delivery of the unit resulting from shipyard delays, an increased scope of work relating to field-specific requirements and the age of the unit, Teekay Offshore is currently in discussions with QGEP, Damen and its lenders in the Petrojarl I loan facility to agree on revised delivery and charterer acceptance dates for the unit and other terms associated with the charter, shipyard contract and loan facility. In October 2016, December 2016, February 2017, and April 2017 the lenders agreed to extend the availability date of the loan for successive periods of two months, as the loan was subject to a mandatory prepayment provision, initially in early October 2016, if the unit was not accepted at that time by QGEP. These interim extensions provide additional time for Teekay Offshore to negotiate a revised schedule for the delivery of the unit and thereafter, amend the loan facility to reflect the revised delivery schedule. As at December 31, 2016, Teekay Offshore had $60 million held in escrow to fund the final upgrade costs (December 31, 2015 - nil). This amount is presented in restricted cash on the consolidated balance sheet. STX Offshore & Shipbuilding Co. In April 2013, four special purpose subsidiary companies of Teekay Tankers entered into agreements with STX Offshore & Shipbuilding Co., Ltd (or STX) of South Korea to construct four, fuel-efficient 113,000 dead-weight tonne Long Range 2 (or LR2) product tanker newbuildings. At the same time, Teekay Tankers entered an Option Agreement with STX allowing Teekay Tankers to order up to 12 additional vessels. The payment of Teekay Tankers’ first shipyard installment was contingent on Teekay Tankers receiving acceptable refund guarantees for the shipyard installment payments. At around the same time, however, STX commenced a voluntary financial restructuring with its lenders, and as a result, STX’s ability to obtain the necessary refund guarantees in respect of the four firm shipbuilding contracts was severely affected. In October and November 2013, Teekay Tankers went on to exercise its rights under the Option Agreement to order eight additional newbuildings. The further required shipbuilding contracts were not entered into by STX within the timeframe specified in the Option Agreement. By December 2013, Teekay Tankers had determined that there was no prospect of the refund guarantees being provided under any of the firm shipbuilding contracts and then by February 2014 that there was no prospect of the same in respect of the further contracts to be entered pursuant to the Option Agreement or of that agreement being otherwise performed by STX. In December 2013, therefore, the subsidiaries of Teekay Tankers gave STX notice that it was treating STX as having repudiated the four firm shipbuilding contracts. Then in February 2014, Teekay Tankers gave STX notice that it was treating STX as having repudiated the Option Agreements. In February and March 2014, Teekay Tankers and its subsidiaries commenced legal proceedings against STX for damages. This involved arbitration proceedings in London in respect of the four firm shipbuilding contracts and English High Court proceedings in respect of the Option Agreement. In November 2014, Teekay Tankers, on behalf of the subsidiaries, placed $0.6 million in an escrow account as cash security in respect of STX’s legal costs relating to the arbitration proceedings. These funds were classified as cash and cash equivalents in Teekay Tankers’ consolidated balance sheets as of December 31, 2015. On February 15, 2016, Teekay Tankers’ subsidiaries had successfully obtained an English Court Order requiring STX to pay a total of $32.4 million in respect of the four firm shipbuilding contracts. As a result, Teekay Tankers’ subsidiaries have exercised their rights under English law to seek the assistance of the English court in the enforcement of the arbitration awards. Teekay Tankers and its subsidiaries are also pursuing other routes to enforce the awards against STX. Additionally, the $0.6 million cash deposit was refunded in March 2016. STX has filed for bankruptcy protection and as of December 31, 2016, all Korean enforcement actions are stayed. STX has had that protection recognized in England and Wales. Teekay Tankers will not be in a position to take any further action on enforcement and recognition of its award in the UK or Korea while the bankruptcy protection remains in place. No amounts have been recorded as receivable in respect of these awards due to uncertainty of their collection. The option agreement case has gone through trial and despite finding that Teekay Tankers had valid option agreements, the judgment was ruled against Teekay Tankers due to uncertainty of delivery dates. Teekay Tankers is considering whether to appeal this ruling. Class Action Complaint Following the Company’s announcement in December 2015 that its Board of Directors had reduced the Company’s quarterly dividend to $0.055 per share, down from a dividend of $0.55 per share in the fourth quarter of 2015 dividend payable in February 2016 and the subsequent decline of the price of the Company’s common stock, a class action complaint was filed on March 1, 2016 in the U.S. District Court for the District of Connecticut against the Company and certain of its officers. As a result of the Company's motion to transfer the action, the case was transferred to the U.S. District Court for the Western District of Washington on November 18, 2016. The lead plaintiff in the action filed an Amended Class Action Complaint on January 13, 2017. The Amended Complaint includes claims that the Company and certain of its officers violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Amended Complaint alleges that the Company and certain of its officers violated federal securities laws by making materially false and misleading statements regarding the Company’s ability and intention to increase its future dividends beyond the initial dividend increase to $0.55 per share that the Company announced in September 2014 and first declared in the second quarter of 2015, thereby artificially inflating the price of its common stock. The lead plaintiff is seeking unspecified monetary damages, including reasonable costs and expenses incurred in this action. The Company is vigorously defending against the claims. The Company filed a motion to dismiss the Amended Complaint on March 14, 2017. The motion to dismiss will be fully briefed and ready for consideration by the Court on June 14, 2017. Based on the current stage of this action and the Company's evaluation of the facts available at this time, the amount or range of reasonably possible losses to which the Company is exposed cannot be estimated and the ultimate resolution of this matter and the associated financial impact to the Company, if any, remains uncertain at this time. The Company maintains a Directors and Officers insurance policy that provides a fixed amount of coverage for such claims, subject to coverage defenses, and a deductible to be paid by the Company. Teekay Nakilat Capital Lease Teekay LNG owns a 70% interest in Teekay Nakilat Corporation (or Teekay Nakilat Joint Venture), which was the lessee under three separate 30-year capital lease arrangements with a third party for three LNG carriers (or the RasGas II LNG Carriers). Under the terms of the leasing arrangements in respect of the RasGas II LNG Carriers, the lessor claimed tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks were assumed by the lessee, in this case the Teekay Nakilat Joint Venture. Lease payments under the lease arrangements were based on certain tax and financial assumptions at the commencement of the leases and subsequently adjusted to maintain its agreed after-tax margin. On December 22, 2014, the Teekay Nakilat Joint Venture terminated the leasing of the RasGas II LNG Carriers. However, the Teekay Nakilat Joint Venture remains obligated to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date and placed $6.8 million on deposit with the lessor as security against any future claims and recorded as part of restricted cash - long term in the Company's consolidated balance sheets. The UK taxing authority (or HMRC) has been challenging the use of similar lease structures in the UK courts. One of those challenges was eventually decided in favor of HMRC (Lloyds Bank Equipment Leasing No. 1 or LEL1), with the lessor and lessee choosing not to appeal further. The LEL1 tax case concluded that capital allowances were not available to the lessor. On the basis of this conclusion, HMRC is now asking lessees on other leases, including the Teekay Nakilat Joint Venture, to accept that capital allowances are not available to their lessor. The Teekay Nakilat Joint Venture does not accept this contention and has informed HMRC of this position. It is not known at this time whether the Teekay Nakilat Joint Venture would eventually prevail in court. If the former lessor of the RasGas II LNG Carriers were to lose on a similar claim from HMRC, Teekay LNG’s 70% share of the Teekay Nakilat Joint Venture's potential exposure is estimated to be approximately $60 million. Such estimate is primarily based on information received from the lessor. e)Redeemable Non-Controlling Interest During 2010, an unrelated party contributed a shuttle tanker with a value of $35.0 million to a subsidiary of Teekay Offshore for a 33% equity interest in the subsidiary. The non-controlling interest owner of Teekay Offshore’s 67%-owned subsidiary holds a put option which, if exercised, would obligate Teekay Offshore to purchase the non-controlling interest owner’s 33% share in the entity for cash in accordance with a defined formula. The redeemable non-controlling interest is subject to remeasurement if the formulaic redemption amount exceeds the carrying value. No remeasurement was required as at December 31, 2016. In July 2015, Teekay Offshore issued 10.4 million of its 8.60% Series C Cumulative Convertible Perpetual Preferred Units (or Series C Preferred Units) in a private placement for net proceeds of approximately $249.8 million. The terms of the Series C Preferred Units provided that at any time after the 18-month anniversary of the closing date, at the election of each holder, the Series C Preferred Units could be converted on a one-for-one basis into common units of Teekay Offshore. In addition, if after the three-year anniversary of the closing date, the volume weighted average price of the common units exceeded $35.925, Teekay Offshore had the option to convert the Series C Preferred Units into common units. Distributions on the Series C Preferred Units were cumulative from the date of original issue and are payable quarterly in arrears, when, as and if declared by the board of directors of the general partner. The Series C Preferred Units could be redeemed in cash if a change of control occurred in Teekay Offshore. In June 2016, Teekay Offshore and the holders of the Series C Preferred Units exchanged approximately 1.9 million of the Series C Preferred Units for approximately 8.3 million common units of Teekay Offshore. The number of common units issued consists of the approximately 1.9 million common units that would have been issuable under the original conversion terms of the Series C Preferred Units plus an additional approximately 6.4 million common units to induce the exchange (the Inducement Premium). The value of the additional 6.4 million common units on the date of conversion was approximately $37.7 million, of which $26.7 million has been charged to non-controlling interest and $11.0 million has been charged to retained earnings on the Company's consolidated balance sheet as at December 31, 2016. In June 2016, Teekay Offshore and the holders of the Series C Preferred Units also exchanged the remaining approximately 8.5 million Series C Preferred Units for approximately 8.5 million Cumulative Convertible Perpetual Preferred Units (or the Series C-1 Preferred Units). The terms of the Series C-1 Preferred Units are equivalent to the terms of the Series C Preferred Units, with the exception that at any time after the 18-month anniversary of the original Series C Preferred Units closing date, at the election of each holder, each Series C-1 Preferred Unit is convertible into 1.474 common units of Teekay Offshore. In addition, if a unitholder of the Series C-1 Preferred Units elects to convert their Series C-1 Preferred Units into common units of Teekay Offshore, Teekay Offshore now has the option to redeem these Series C-1 Preferred Units for cash based on the closing market price of the common units of Teekay Offshore instead of common units. Furthermore, if after the three-year anniversary of the closing date, the volume weighted average price of the common units exceeds 150% of $16.25 per unit, Teekay Offshore has the option to convert the Series C-1 Preferred Units into common units. In addition, unlike the Series C Preferred Units, for which distributions were to be paid in cash, quarterly distributions on the Series C-1 Preferred Units for the eight consecutive quarters ending March 31, 2018 may be paid in Teekay Offshore's sole discretion, in cash, common units (at a discount of 2% to the 10-trading day volume weighted average price ending on the distribution declaration date) or a combination of cash and common units (at the same discount), and thereafter, the distributions will be paid in cash. Consistent with the terms of the Series C Preferred Units, the Series C-1 Preferred Units may be redeemed in cash if a change of control occurs in Teekay Offshore. As a result, the Series C-1 Preferred Units are included on the Company’s consolidated balance sheet as part of temporary equity which is above the equity section but below the liabilities section. The exchange of the Series C Preferred Units for Series C-1 Preferred Units has been accounted for as an extinguishment of the Series C Preferred Units and the issuance of the Series C-1 Preferred Units. As a result, the excess of the carrying value of the Series C Preferred Units over the fair value of the Series C-1 Preferred Units was approximately $20.6 million, of which $14.6 million was accounted for as an increase to non-controlling interest and $6.0 million as an increase to retained earnings on the Company's consolidated balance sheet (the Exchange Contribution) as at December 31, 2016. In June 2016, Teekay Offshore issued 4.0 million of its 10.50% Series D Preferred Units, of which 1,040,000 of the Series D Preferred Units were purchased by Teekay. Teekay Offshore pays to holders of the Series D Preferred Units a cumulative, quarterly cash distribution in arrears at an annual rate of 10.50%. However, Teekay Offshore may elect, in its sole discretion, to pay the quarterly distributions for the first eight consecutive quarters following issuance in cash, common units (at a discount of 4% to the 10-trading day volume weighted average price ending on the distribution declaration date) or a combination of cash and common units (at the same discount), and thereafter the distributions will be paid in cash. The Series D Preferred Units have no mandatory redemption date, but they are redeemable at Teekay Offshore's option after June 29, 2021 for a 10% premium to the liquidation value and for a 5% premium to the liquidation value any time after June 29, 2022. The Series D Preferred Units are exchangeable into common units of Teekay Offshore at the option of the holder at any time after June 29, 2021, based on the greater of the 10-trading day volume weighted average price at the time of the notice of exchange or $4.00. A change of control event involving the purchase of at least 90% of the common units would result in the Series D Preferred Units being redeemable for cash. As a result, the Series D Preferred Units, net of Teekay's units, are included on the Company’s consolidated balance sheet as part of temporary equity which is above the equity section but below the liabilities section. f)Other The Company enters into indemnification agreements with certain Officers and Directors. In addition, the Company enters into other indemnification agreements in the ordinary course of business. The maximum potential amount of future payments required under these indemnification agreements is unlimited. However, the Company maintains what it believes is appropriate liability insurance that reduces its exposure and enables the Company to recover future amounts paid up to the maximum amount of the insurance coverage, less any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered material. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information |
a)The changes in operating assets and liabilities for the years ended December 31, 2016, 2015, and 2014, are as follows:
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Vessel Sales, Asset Impairments and Provisions |
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Property, Plant and Equipment Assets Held-for-sale Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessel Sales, Asset Impairments and Provisions | Vessel Sales, Asset Impairments and Provisions a) Asset Impairments During the fourth quarter of 2016, the carrying value of the Navion Marita was written down to its estimated fair value, using an appraised value, as a result of fewer opportunities to trade the vessel in the spot conventional tanker market. The Company’s consolidated statement of income for the year ended December 31, 2016, includes a $2.1 million write-down related to this vessel. The write-down is included in the Company’s Teekay Offshore Segment - Offshore Logistics. In 2016, Teekay Offshore canceled the UMS construction contracts for its two UMS newbuildings. As a result, the carrying values of these two UMS newbuildings were written down to $nil. The Company's consolidated statement of income for the year ended December 31, 2016 includes a $43.7 million write-down related to these two UMS newbuildings. The write-down is included in the Company’s Teekay Offshore Segment - Offshore Logistics. During 2015, seven of Teekay Offshore’s 1990s-built shuttle tankers were written down to their estimated fair value, using appraised values. Of the seven shuttle tankers, during the first quarter of 2015, one shuttle tanker was written down as a result of the expected sale of the vessel and the vessel was classified as held for sale on the Company’s consolidated balance sheet as at December 31, 2015. An additional shuttle tanker was written down during the first quarter of 2015 as a result of a change in the operating plan of the vessel. In the fourth quarter of 2015, the write-down of five shuttle tankers, which had an average age of 17.5 years, was the result of changes in Teekay Offshore’s expectations of their future opportunities, primarily due to their advanced age. The Company’s consolidated statement of income for the year ended December 31, 2015, includes total write-downs of $66.7 million related to these seven shuttle tankers. The write-downs are included in the Company’s Teekay Offshore Segment - Offshore Logistics. b) Loan Loss Recoveries During 2014, the Company reversed a $2.5 million loss provision for an amount receivable related to an FPSO front-end engineering and design study completed in 2013, as this receivable was recovered in 2014. c) Net (Loss) Gain on Sale of Vessels, Equipment and Other Operating Assets The Company's sale of vessels generally consists of those vessels approaching the end of their useful lives as well as other vessels it strategically sells to reduce exposure to a certain vessel class. The following table shows the net (loss) gain on sale of vessels, equipment and other operating assets for the years ended December 31, 2016, 2015, and 2014:
See Note 2 – Segment Reporting for the asset impairments, loan loss recoveries, and net (loss) gain on sale of vessels, equipment and other operating assets, by segment for 2016, 2015 and 2014. |
(Loss) Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) Earnings Per Share |
Stock-based awards, which have an anti-dilutive effect on the calculation of diluted loss per common share, are excluded from this calculation. For the years ended December 31, 2016 and 2015, options to acquire 3.8 million shares and 1.4 million shares of Common Stock, respectively, had an anti-dilutive effect on the calculation of diluted earnings per common share. In periods where a loss attributable to shareholders has been incurred all stock-based awards are anti-dilutive. |
Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||
Restructuring Charges |
During 2016, the Company recorded restructuring charges of $26.8 million ($14.0 million – 2015, $9.8 million - 2014). The restructuring charges in 2016 primarily relate to the closure of two offices and seafarers' severance amounts related to the tug business in Western Australia, reorganization of the Company’s FPSO business to create better alignment with the Company’s offshore operations, and reductions to charges previously accrued. The charges related to the seafarers' severance were partly recovered from customers and the recovery is included in revenues on the consolidated statements of income. The restructuring charges in 2015 relate to the termination of the employment of certain seafarers upon the expiration of a time-charter-out contract, the reorganization of the Company’s marine operations and corporate services, and the change in crew on a vessel as requested by a charterer. The actual restructuring charges relating to the termination of the employment of certain seafarers upon the expiration of a time-charter-out contract and the change in crew on a vessel as requested by a charterer in the amount of $8.4 million were fully reimbursed to the Company by the charterers and the net reimbursement is included in voyage revenues. The restructuring charges in 2014 relate to the termination of the employment of certain seafarers upon the re-delivery of an in-chartered conventional tanker in December 2014 and upon the sale of a vessel under capital lease to a third party in August 2014, and the reflagging of one shuttle tanker which commenced in January 2014 and was completed in March 2014, partially offset by an adjustment to the accrual for costs related to the reorganization of the Company’s marine operations. At December 31, 2016 and 2015 $5.6 million and $3.2 million, respectively, of restructuring liabilities were recorded in accrued liabilities on the consolidated balance sheets. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Teekay and a majority of its subsidiaries are not subject to income tax in the jurisdictions in which they are incorporated because they do not conduct business or operate in those jurisdictions. However, among others, the Company’s U.K. and Norwegian subsidiaries are subject to income taxes. The significant components of the Company’s deferred tax assets and liabilities are as follows:
Net deferred tax assets are presented in other non-current assets and other long term liabilities in the accompanying consolidated balance sheets. Certain of the balances in the comparative columns above have been adjusted with no impact on the amount of the net deferred tax assets.
The components of the provision for income taxes are as follows:
The Company operates in countries that have differing tax laws and rates. Consequently, a consolidated weighted average tax rate will vary from year to year according to the source of earnings or losses by country and the change in applicable tax rates. Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:
The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2014 to December 31, 2016:
The majority of the net increase for positions relates to the potential tax on freight income on an increased number of voyages for the year ended December 31, 2016. The Company does not presently anticipate such uncertain tax positions will significantly increase or decrease in the next 12 months; however, actual developments could differ from those currently expected. The tax years 2007 through 2016 remain open to examination by some of the major jurisdictions in which the Company is subject to tax. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The interest and penalties on unrecognized tax benefits are included in the roll-forward schedule above and are approximately an increase of $1.2 million in 2016, net of statute barred liabilities, and a reduction of $0.3 million in 2015 and $1.6 million in 2014. |
Pension Benefits |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefits |
a)Defined Contribution Pension Plans With the exception of certain of the Company’s employees in Australia and Norway, the Company’s employees are generally eligible to participate in defined contribution plans. These plans allow for the employees to contribute a certain percentage of their base salaries into the plans. The Company matches all or a portion of the employees’ contributions, depending on how much each employee contributes. During the years ended December 31, 2016, 2015, and 2014, the amount of cost recognized for the Company’s defined contribution pension plans was $13.5 million, $15.2 million and $13.9 million, respectively. b)Defined Benefit Pension Plans The Company has a number of defined benefit pension plans (or the Benefit Plans) which primarily cover certain employees in Norway and Australia. As at December 31, 2016, approximately 65% of the defined benefit pension assets were held by the Norwegian plans and approximately 35% were held by the Australian plan. The pension assets in the Norwegian plans have been guaranteed a minimum rate of return by the provider, thus reducing potential exposure to the Company to the extent the provider honors its obligations. The following table provides information about changes in the benefit obligation and the fair value of the Benefit Plans assets, a statement of the funded status, and amounts recognized on the Company’s balance sheets:
As of December 31, 2016 and 2015, the accumulated benefit obligations for the Benefit Plans were $38.9 million and $67.1 million, respectively. The following table provides information for those pension plans with a benefit obligation in excess of plan assets and those pension plans with an accumulated benefit obligation in excess of plan assets:
The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
The components of other comprehensive income (loss) relating to the Plans for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
The Company estimates that it will make contributions into the Benefit Plans of $2.4 million during 2017. The following table provides the estimated future benefit payments, which reflect expected future service, to be paid by the Benefit Plans:
The fair value of the plan assets, by category, as of December 31, 2016 and 2015 were as follows:
The investment strategy for all plan assets is generally to actively manage a portfolio that is diversified among asset classes, markets and regions. Certain of the investment funds do not invest in companies that do not meet certain socially responsible investment criteria. In addition to diversification, other risk management strategies employed by the investment funds include gradual implementation of portfolio adjustments and hedging currency risks. The Company’s plan assets are primarily invested in commingled funds holding equity and debt securities, which are valued using the net asset value (or NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares or units outstanding. Commingled funds are classified within Level 2 of the fair value hierarchy as the NAVs are not publicly available. The Company has a pension committee that is comprised of various members of senior management. Among other things, the Company’s pension committee oversees the investment and management of the plan assets, with a view to ensuring the prudent and effective management of such plans. In addition, the pension committee reviews investment manager performance results annually and approves changes to the investment managers. The weighted average assumptions used to determine benefit obligations at December 31, 2016 and 2015 were as follows:
The weighted average assumptions used to determine net pension expense for the years ended December 31, 2016, 2015 and 2014 were as follows:
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Equity-accounted Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-accounted Investments |
In December 2015, Teekay LNG entered into a joint venture agreement with Nogaholding, GIC, and Samsung to form a joint venture, the Bahrain LNG Joint Venture, for the development of an LNG receiving and regasification terminal in Bahrain and the supply of a FSU vessel. The Bahrain LNG Joint Venture is a joint venture between Nogaholding (30%), Teekay LNG (30%), GIC (24%), and Samsung (16%). The project will include an offshore LNG receiving jetty and breakwater, an adjacent regasification platform, subsea gas pipelines from the platform to shore, an onshore gas receiving facility, and an onshore nitrogen production facility with a total LNG terminal capacity of 800 million standard cubic feet per day and will be owned and operated under a 20-year agreement commencing in early-2019 with an estimated fully built-up cost of approximately $960.0 million which is expected to be funded by the Bahrain LNG Joint Venture through a combination of equity capital and project-level debt through a consortium of regional and international banks. In addition, Teekay LNG will supply a FSU vessel in connection with this project, which will be modified from one of the nine MEGI LNG carrier newbuildings ordered from DSME through a 20-year time-charter contract with the Bahrain LNG Joint Venture (see Note 3a). As at December 31, 2016, Teekay LNG had advanced $62.9 million (December 31, 2015 – $nil) to the Bahrain LNG Joint Venture. These advances bear interest at LIBOR plus 1.25% and as at December 31, 2016, the interest accrued on these advances was $0.1 million (December 31, 2015 – $nil). In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to the OOG-TK Libra GmbH & Co KG (or Libra Joint Venture), a 50/50 joint venture with OOG. The vessel is committed to a new FPSO unit conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in mid-2017 under a 12-year fixed-rate contract with Petrobras (see Note 15b). In July 2014, Teekay LNG, entered into a 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG and ordered six internationally-flagged icebreaker LNG carriers for a project located on the Yamal Peninsula in Northern Russia (or the Yamal LNG Project) (See Note 3e). In June 2014, Teekay LNG acquired from BG (which was subsequently acquired by Shell) its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels, upon delivery, which are scheduled between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG (see Note 3f). In January 2014, Teekay and Teekay Tankers formed TIL, which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. Teekay and Teekay Tankers in the aggregate purchased 5.0 million shares of common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. In October 2014, TIL authorized a share repurchase program for up to $30 million and in September 2015, TIL authorized an increase in its share repurchase program to $60 million. As of December 31, 2016, TIL has repurchased $87.6 million of its shares at an average price of NOK 88.31 per share. The Company’s combined interests of Teekay and Teekay Tankers in TIL were 19.55% as at December 31, 2016 (December 31, 2015 - 17.62%) (see Note 3h). As of December 31, 2016, the aggregate value of the Company's investment in TIL, based on the quoted market price of TIL's common stock on the Oslo Stock Exchange was $24.7 million (December 31, 2015 - $72.8 million). In June 2013, Teekay Offshore completed the acquisition from Teekay of its 50% interest in a FPSO unit, the Cidade de Itajai (or Itajai). The Itajai FPSO has been operating on the Baúna and Piracaba (previously named Tiro and Sidon) fields in the Santos Basin offshore Brazil since February 2013 under a nine-year fixed-rate time-charter contract, plus extension options, with Petrobras. The remaining 50% interest in the Itajai FPSO unit is owned by OOG. In February 2013, Teekay LNG entered into a joint venture agreement with Exmar to own and charter-in LPG carriers with a primary focus on the mid-size gas carrier segment. Exmar LPG BVBA (or the Exmar LPG Joint Venture), took economic effect as of November 1, 2012 and, as of December 31, 2016, its fleet included 19 LPG carriers and four LPG carrier newbuildings scheduled for delivery in 2017 and 2018. For Teekay LNG’s 50% ownership interest in the joint venture, including newbuilding payments made prior to the November 1, 2012 economic effective date of the joint venture, Teekay LNG invested $133.1 million in exchange for equity and a shareholder loan and assumed approximately $108 million of its pro rata share of existing debt and lease obligations as of the economic effective date. These debt and lease obligations are secured by certain vessels in the Exmar LPG Joint Venture fleet. The excess of the book value of net assets acquired over Teekay LNG’s investment in the Exmar LPG Joint Venture, which amounted to approximately $6.0 million, has been accounted for as an adjustment to the value of the vessels, charter agreements and lease obligations of the Exmar LPG Joint Venture and recognition of goodwill, in accordance with the final purchase price allocation. Control of the Exmar LPG Joint Venture is shared equally between Exmar and Teekay LNG. Teekay LNG accounts for its investment in the Exmar LPG Joint Venture using the equity method. Teekay LNG has a 52% ownership interest in the joint venture between Marubeni Corporation and Teekay LNG (or the Teekay LNG-Marubeni Joint Venture), which owns six LNG carriers. Since control of the Teekay LNG-Marubeni Joint Venture is shared jointly between Marubeni and Teekay LNG, Teekay LNG accounts for its investment in the Teekay LNG-Marubeni Joint Venture using the equity method. Teekay LNG has a 33% ownership interest in the Angola Joint Venture that owns four newbuilding 160,400-cubic meter LNG carriers (or the Angola LNG Carriers). The Angola LNG Carriers are chartered at fixed rates to the Angola LNG Project. The High-Q Joint Venture is a joint venture arrangement between Teekay Tankers and Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong) whereby Teekay Tankers holds a 50% interest. The RasGas 3 Joint Venture is a joint venture arrangement between Teekay LNG and QGTC Nakilat (1643-6) Holdings Corporation whereby Teekay LNG holds a 40% interest. The RasGas 3 Joint Venture owns four LNG carriers and related long-term fixed-rate time charters to service the expansion of a LNG project in Qatar. Teekay LNG has ownership interests ranging from 49% to 50% in its joint ventures with Exmar (or the Exmar LNG Joint Venture) which owns two LNG carriers that are chartered out under long term contracts. In November 2011, Teekay acquired a 40% interest in a recapitalized Sevan for approximately $25 million. Sevan owns (i) two partially-completed hulls available for upgrade to FPSOs or other offshore projects; (ii) a licensing agreement with ENI SpA; (iii) an engineering and offshore project development business; and (iv) intellectual property rights, including offshore unit design patents. As of December 31, 2016, the aggregate value of the Company’s 43% interest (43% interest —December 31, 2015) in Sevan, based on the quoted market price of Sevan’s common stock on the Oslo Stock Exchange, was $44.9 million ($44.9 million – December 31, 2015). A condensed summary of the Company’s investments in equity-accounted investees by segment is as follows (in thousands of U.S. dollars, except percentages):
A condensed summary of the Company’s financial information for equity-accounted investments (18% to 52% owned) shown on a 100% basis are as follows:
Certain of the comparative figures have been adjusted to conform to the presentation adopted in the current year. (1)The results included for TIL are from the date of incorporation in January 2014. For the year ended December 31, 2016, the Company recorded equity income of $85.6 million (2015 – $102.9 million and 2014 - $128.1 million). The income was primarily comprised of the Company’s share of net income (loss) from the Teekay LNG-Marubeni Joint Venture, Angola LNG Project, the RasGas 3 Joint Venture, Exmar LNG Joint Venture, Exmar LPG BVBA, and from the interest in the Itajai. For the year ended December 31, 2016, $8.7 million of the equity gain related to the Company’s share of unrealized gain (loss) on interest rate swaps associated with these projects (2015 – $5.9 million and 2014 - $1.1 million). |
Subsequent Events |
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Subsequent Events [Abstract] | |||||||||||||||||||||||||
Subsequent Events | Subsequent Events
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the accounts of Teekay Corporation (or Teekay), which is incorporated under the laws of the Republic of The Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Company). Certain of Teekay’s significant non-wholly owned subsidiaries are consolidated in these financial statements even though Teekay owns less than a 50% ownership interest in the subsidiaries. These significant subsidiaries include the following publicly traded subsidiaries (collectively, the Public Subsidiaries): Teekay LNG Partners L.P. (or Teekay LNG); Teekay Offshore Partners L.P. (or Teekay Offshore); and Teekay Tankers Ltd. (or Teekay Tankers). As of December 31, 2016, Teekay owned a 33.1% interest in Teekay LNG (33.1% - December 31, 2015), including common units and its 2% general partner interest, and a 29.0% interest in Teekay Offshore (37.0% - December 31, 2015), including common units and its 2% general partner interest, and a 26% interest in Teekay Offshore's 10.50% Series D Cumulative Convertible Perpetual Preferred Units (the Series D Preferred Units), and 25.4% of the capital stock of Teekay Tankers (25.9% - December 31, 2015), including Teekay Tankers’ outstanding shares of Class B common stock, which entitle the holders to five votes per share, subject to a 49% aggregate Class B Common Stock voting power maximum. While Teekay owns less than 50% of each of the Public Subsidiaries, Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its 100% ownership interest in the general partners of Teekay LNG and Teekay Offshore, which are both master limited partnerships, and maintains control of Teekay Tankers through its ownership of a sufficient number of Class A common shares and Class B common shares, which provide increased voting rights, to maintain a majority voting interest in Teekay Tankers and thus consolidates these subsidiaries. Significant intercompany balances and transactions have been eliminated upon consolidation. Teekay has entered into an omnibus agreement with Teekay LNG and Teekay Offshore to govern, among other things, when Teekay, Teekay LNG and Teekay Offshore may compete with each other and to provide the applicable parties certain rights of first offer on liquefied natural gas (or LNG) carriers, oil tankers, shuttle tankers, floating storage and off-take (or FSO) units and floating, production, storage and offloading (or FPSO) units. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Given the current condition of the credit markets, it is possible that the amounts recorded as derivative assets and liabilities could vary by material amounts prior to their settlement. Significant intercompany balances and transactions have been eliminated upon consolidation. In addition, certain of the comparative figures have been reclassified to conform to the presentation adopted in the current period relating to certain operating activities in the Company's consolidated statements of cash flows. |
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Non-Controlling Interests | Non-Controlling Interests Where Teekay’s ownership interest in a consolidated subsidiary is less than 100%, the non-controlling interests’ share of these non-wholly owned subsidiaries are reported in the Company’s consolidated balance sheets as a separate component of equity. The non-controlling interests’ share of the net income of these non-wholly owned subsidiaries is reported in the Company’s consolidated statements of income as a deduction from the Company’s net income to arrive at net (loss) income attributable to shareholders of Teekay. The basis for attributing net income of each non-wholly owned subsidiary to the controlling interest and the non-controlling interests, with the exception of Teekay LNG and Teekay Offshore, is based on the relative ownership interests of the non-controlling interests compared to the controlling interest, which is consistent with how dividends and distributions are paid or are payable for these non-wholly owned subsidiaries. Teekay LNG and Teekay Offshore each have limited partners and one general partner. Both general partners are owned by Teekay. For both Teekay LNG and Teekay Offshore, the limited partners hold common units and preferred units. For each quarterly period, the method of attributing Teekay LNG’s and Teekay Offshore’s net income (loss) of that period to the non-controlling interests of Teekay LNG and Teekay Offshore begins by attributing net income (loss) of Teekay Offshore and Teekay LNG to the non-controlling interests which hold 100% of the preferred units of Teekay Offshore, except for Series D Preferred Units, of which they hold 74%, and 100% of the preferred units of Teekay LNG based on the amount of preferred unit distributions declared for the quarterly period. The remaining net income (loss) to be attributed to the controlling interest and the non-controlling interests of Teekay LNG and Teekay Offshore is divided into two components. The first component consists of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to limited and general partners for that quarterly period (or the Distributed Earnings). The second component consists of the difference between the net income (loss) of Teekay LNG or Teekay Offshore that is available to be allocated to the common unitholders and the general partner of such entity and the amount of the first component cash distribution (or the Undistributed Earnings). The portion of the Distributed Earnings that is allocated to the non-controlling interests is the amount of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to the non-controlling interests for that quarterly period. The portion of the Undistributed Earnings that is allocated to the non-controlling interests is based on the relative ownership percentages of the non-controlling interests of Teekay LNG and Teekay Offshore compared to the controlling interest. The controlling interests include both limited partner common units and the general partner interests. The total net income of Teekay’s consolidated partially-owned entities and the attribution of that net income to controlling and non-controlling interests is as follows:
When Teekay’s non-wholly owned subsidiaries declare dividends or distributions to their owners, or require all of their owners to contribute capital to the non-wholly owned subsidiaries, such amounts are paid to, or received from, each of the owners of the non-wholly owned subsidiaries based on the relative ownership interests in the non-wholly owned subsidiary. As such, any dividends or distributions paid to, or capital contributions received from, the non-controlling interests are reflected as a reduction (dividends or distributions) or an increase (capital contributions) in non-controlling interest in the Company’s consolidated balance sheets. When Teekay’s non-wholly owned subsidiaries issue additional equity interests to non-controlling interests, Teekay is effectively selling a portion of the non-wholly owned subsidiaries. Consequently, the proceeds received by the subsidiaries from their issuance of additional equity interests are allocated between non-controlling interest and retained earnings in the Company’s consolidated balance sheets. The portion allocated to non-controlling interest on the Company’s consolidated balance sheets consists of the carrying value of the portion of the non-wholly owned subsidiary that is effectively disposed of, with the remaining amount attributable to the controlling interest, which consists of the Company’s dilution gain or loss that is allocated to retained earnings. |
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Reporting currency | Reporting currency The consolidated financial statements are stated in U.S. Dollars. The functional currency of the Company is the U.S. Dollar because the Company operates in the international shipping market, which typically utilizes the U.S. Dollar as the functional currency. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. Dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of income. |
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Operating revenues | Operating revenues and expenses Contracts of Affreightment and Voyage Charters Revenues from contracts of affreightment and voyage charters are recognized on a proportionate performance method. The Company uses a discharge-to-discharge basis in determining proportionate performance for all voyage charters, whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. Shuttle tanker voyages servicing contracts of affreightment with offshore oil fields commence with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. The Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Time Charters, Bareboat Charters and FPSO Contracts Operating Leases - The Company recognizes revenues from time charters, bareboat charters and FPSO contracts accounted for as operating leases on a straight-line basis daily over the term of the charter as the applicable vessel operates under the charter. Receipt of incentive-based revenue from the Company’s FPSO units is dependent upon its operating performance and such revenue is recognized when earned by fulfillment of the applicable performance criteria. The Company does not recognize revenue during days that the vessel is off hire unless the contract provides for compensation while off hire. Direct Financing Leases - Charter contracts that are accounted for as direct financing leases are reflected on the consolidated balance sheets as net investments in direct financing leases. The lease revenue is recognized on an effective interest rate method over the lease term so as to produce a constant periodic rate of return over the lease terms and is included in revenues. Revenue from rendering of services is recognized as the service is performed. Revenues are not recognized during days that the vessel is off hire unless the contract provides for compensation while off hire. The Company employs four LNG carriers, a FSO unit, and volatile organic compound emissions (or VOC) equipment on long-term time charters which are accounted for as direct financing leases. The lease payments received by the Company under these lease arrangements are allocated between the net investments in the leases and revenues or other income using the effective interest method so as to produce a constant periodic rate of return over the lease terms. Pooling Arrangements Revenues and voyage expenses of the vessels operating in pool arrangements are pooled and the resulting net pool revenues, calculated on a time-charter equivalent basis, are allocated to the pool participants according to an agreed formula. The agreed formula used to allocate net pool revenues varies between pools; however, the formula generally allocates revenues to pool participants on the basis of the number of days a vessel operates in the pool with weighting adjustments made to reflect vessels’ differing capacities and performance capabilities. The same revenue and expense recognition principles stated above for voyage charters are applied in determining the net pool revenues of the pool. The pools are responsible for paying voyage expenses and distributing net pool revenues to the participants. The Company accounts for the net allocation from the pool as revenues and amounts due from the pool are included in accounts receivable. Other Revenue Other revenues are earned from the offshore ship-to-ship transfer of commodities, primarily crude oil and refined oil products, but also liquid gases and various other products which are referred to as support operations. In addition, other revenues are also earned from other technical activities such as terminal management, consultancy, procurement and equipment rental. Other revenues from short-term contracts are recognized as services are completed based on percentage of completion or in the case of long-term contracts, are recognized over the duration of the contract period. |
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Operating expenses | Operating Expenses Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, ship management services, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred. |
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Cash and cash equivalents | Cash and cash equivalents The Company classifies all highly liquid investments with a maturity date of three months or less at their inception as cash equivalents. |
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Restricted Cash | Restricted Cash The Company maintains restricted cash deposits relating to certain term loans, collateral for derivatives, project tenders, leasing arrangements, amounts received from charterers to be used only for dry-docking expenditures and emergency repairs and other obligations. |
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Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and customer economic data. The Company reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged off against the allowance when the Company believes that the receivable will not be recovered. There were no significant amounts recorded as allowance for doubtful accounts as at December 31, 2016, 2015, and 2014. |
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Vessels and equipment | Vessels and equipment All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standard required to properly service the Company’s customers are capitalized. Depreciation is calculated on a straight-line basis over a vessel’s estimated useful life, less an estimated residual value. Depreciation is calculated using an estimated useful life of 25 years for tankers carrying crude oil and refined product, 20 to 25 years for FPSO units, 35 years for LNG carriers and 30 years for liquefied petroleum gas (or LPG) carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time. FSO units are depreciated over the term of the contract. Units for maintenance and safety (or UMS) are depreciated over an estimated useful life of 35 years commencing the date the unit arrives at the oil field and is in a condition that is ready to operate. Long-distance towing and offshore installation vessels are depreciated over an estimated useful life of 25 years commencing the date the vessel is delivered from the shipyard. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Depreciation of vessels and equipment, excluding amortization of dry-docking expenditures, for the years ended December 31, 2016, 2015, and 2014 aggregated $492.0 million, $445.2 million and $341.5 million, respectively. Amortization of vessels accounted for as capital leases was $12.8 million, $5.4 million and $21.6 million for the years ended December 31, 2016, 2015, and 2014, respectively. Teekay Offshore considers its shuttle tankers to be comprised of two components: (i) a conventional tanker (or the tanker component) and (ii) specialized shuttle equipment (or the shuttle component). Teekay Offshore differentiates these two components on the principle that a shuttle tanker can also operate as a conventional tanker without the use of the shuttle component. The economics of this alternate use depend on the supply and demand fundamentals in the two segments. Historically, the useful life of both components was assessed as 25 years commencing from the date the vessel is delivered from the shipyard. In early 2016, Teekay Offshore considered factors related to the ongoing use of the shuttle component and reassessed the useful life as being 20 years based on the challenges associated with adverse market conditions in the energy sector and other long term factors associated with the global oil industry. This change in estimate, commencing January 1, 2016, impacts the entire fleet of Teekay Offshore’s shuttle tanker vessels. Separately, Teekay Offshore reviewed the depreciation of the tanker component for eight shuttle tankers in its fleet that are 17 years of age or older. Based on Teekay Offshore’s expected operating plan for these vessels, commencing January 1, 2016, it has reassessed the estimated useful life of the tanker component for these vessels as 20 years. As market conditions evolve, Teekay Offshore will continue to monitor the useful life of the tanker component for other vessels within the shuttle tanker fleet. The effect of these changes for Teekay Offshore in estimates on the Company’s consolidated statements of income, was an increase in depreciation and amortization expense and a decrease in net income of $29.3 million in the year ended December 31, 2016, and a decrease in net income and an increase in net loss attributable to shareholders of the Company of $8.6 million, or $0.10 per basic and diluted common share, for the year ended December 31, 2016. Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel that are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is amortized over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred. Interest costs capitalized to vessels and equipment for the years ended December 31, 2016, 2015, and 2014, aggregated $36.9 million, $22.0 million and $51.3 million, respectively. Generally, the Company dry docks each shuttle tanker, conventional oil tanker, long-distance towing and offshore installation vessel and gas carrier every two and a half to five years. UMS, FSO and FPSO units are generally not dry docked. The Company capitalizes a substantial portion of the costs incurred during dry docking and amortizes those costs on a straight-line basis over their estimated useful life, which typically is from the completion of a dry docking or intermediate survey to the estimated completion of the next dry docking. The Company includes in capitalized dry-docking costs those costs incurred as part of the dry docking to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during dry docking, and for annual class survey costs on the Company’s FPSO units. The continuity of capitalized dry-docking costs for the years ended December 31, 2016, 2015, and 2014, is summarized as follows:
Vessels and equipment that are intended to be held and used in the Company's business are assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the asset’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, the carrying amount of the asset is reduced to its estimated fair value. The estimated fair value for the Company’s impaired vessels is determined using discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists, an appraised value is used to estimate the fair value of an impaired vessel. An appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company and is based on second-hand sale and purchase data. Vessels and equipment that are “held for sale” are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses attributable to vessels and equipment classified as held for sale, or to their related liabilities, continue to be recognized as incurred. Gains on vessels sold and leased back under capital leases are deferred and amortized over the remaining term of the capital lease. Losses on vessels sold and leased back under capital leases are recognized immediately when the fair value of the vessel at the time of sale and lease-back is less than its book value. In such case, the Company would recognize a loss in the amount by which book value exceeds fair value. |
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Other loan receivables | Other loan receivables The Company’s investments in loan receivables are recorded at cost. The Company analyzes its loans for collectability during each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considers in determining that a loan is impaired include, among other things, an assessment of the financial condition of the debtor, payment history of the debtor, general economic conditions, the credit rating of the debtor (when available) any information provided by the debtor regarding their ability to repay the loan and the fair value of the underlying collateral. When a loan is impaired, the Company measures the amount of the impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting impairment in the consolidated statements of income. The carrying value of the loans will be adjusted each subsequent reporting period to reflect any changes in the present value of estimated future cash flows. The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2016.
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Joint ventures | Joint ventures The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statements of income. |
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Debt issuance costs | Debt issuance costs Debt issuance costs, including fees, commissions and legal expenses, are deferred and presented as a direct reduction from the carrying amount of the debt liability. Debt issuance costs related to loan facilities without a recognized debt liability will continue to be presented as non-current assets in the consolidated balance sheets. Debt issuance costs of revolving credit facilities are amortized on a straight-line basis over the term of the relevant facility. Debt issuance costs of term loans are amortized using the effective interest rate method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense. |
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Derivative instruments | Derivative instruments All derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and whether the contract qualifies for hedge accounting. The Company does not apply hedge accounting to its derivative instruments, except for certain types of interest rate swaps (See Note 14). When a derivative is designated as a cash flow hedge, the Company formally documents the relationship between the derivative and the hedged item. This documentation includes the strategy and risk management objective for undertaking the hedge and the method that will be used to assess the effectiveness of the hedge. Any hedge ineffectiveness is recognized immediately in earnings, as are any gains and losses on the derivative that are excluded from the assessment of hedge effectiveness. The Company does not apply hedge accounting if it is determined that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold, or repaid. For derivative financial instruments designated and qualifying as cash flow hedges, changes in the fair value of the effective portion of the derivative financial instruments are initially recorded as a component of accumulated other comprehensive loss in total equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from total equity to the corresponding earnings line item in the consolidated statements of income. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in earnings in the consolidated statements of income. If a cash flow hedge is terminated and the originally hedged item is still considered possible of occurring, the gains and losses initially recognized in total equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item (e.g. general and administrative expense) item in the consolidated statements of income. If the hedged items are no longer possible of occurring, amounts recognized in total equity are immediately transferred to the earnings item in the consolidated statements of income. For derivative financial instruments that are not designated or that do not qualify as hedges under Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 815, Derivatives and Hedging, the changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated interest rate swaps related to long-term debt, capital lease obligations, restricted cash deposits, non-designated bunker fuel swap contracts and forward freight agreements, and non-designated foreign exchange currency forward contracts are recorded in realized and unrealized loss on non-designated derivative instruments. Gains and losses from the Company’s hedge accounted foreign currency forward contracts are recorded primarily in vessel operating expenses and general and administrative expense. Gains and losses from the Company’s non-designated cross currency swap are recorded in foreign currency exchange (loss) gain in the consolidated statements of income. |
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Goodwill and intangible assets | Goodwill and intangible assets Goodwill is not amortized, but reviewed for impairment at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When goodwill is reviewed for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. The Company’s intangible assets consist primarily of acquired time-charter contracts, contracts of affreightment, and customer relationships. The value ascribed to the acquired time-charter contracts and contracts of affreightment are being amortized over the life of the associated contract, with the amount amortized each year being weighted based on the projected revenue to be earned under the contracts. The value ascribed to customer relationships intangible assets are amortized over the expected life of a customer contract or the expected duration that the customer relationships are estimated to contribute to the cash flows of the Company. The amount amortized each year is weighted based on the projected revenue to be earned under the contracts or projected revenue to be earned as a result of the customer relationships. |
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Asset retirement obligation | Asset retirement obligation The Company has an asset retirement obligation (or ARO) relating to the sub-sea production facility associated with the Petrojarl Banff FPSO unit operating in the North Sea. This obligation generally involves the costs associated with the restoration of the environment surrounding the facility and removal and disposal of all production equipment. This obligation is expected to be settled at the end of the contract under which the FPSO unit currently operates. The ARO will be covered in part by contractual payments to be received from FPSO contract counterparties. Teekay Offshore has an ARO relating to the sub-sea mooring and riser system associated with the Gina Krog FSO unit expected to commence operations in the North Sea in early-2017. This obligation involves the costs associated with the restoration of the environment surrounding the facility and removal of all equipment, which are subsequently required to be reimbursed by the charterer under the terms of the contract. This obligation is expected to be settled at the end of the contract under which the FSO unit is expected to operate, which is a three-year time-charter contract which includes 12 additional one-year extension options. The Company records the fair value of an ARO as a liability in the period when the obligation arises. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. When the liability is recorded, the Company capitalizes the cost by increasing the carrying amount of the related equipment. Each period, the liability is increased for the change in its present value, and the capitalized cost is depreciated over the useful life of the related asset. Changes in the amount or timing of the estimated ARO are recorded as an adjustment to the related asset and liability. |
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Repurchase of common stock | Repurchase of common stock The Company accounts for repurchases of common stock by decreasing common stock by the par value of the stock repurchased. In addition, the excess of the repurchase price over the par value is allocated between additional paid in capital and retained earnings. The amount allocated to additional paid in capital is the pro-rata share of the capital paid in and the balance is allocated to retained earnings. |
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Share-based compensation | Share-based compensation The Company grants stock options, restricted stock units, performance share units and restricted stock awards as incentive-based compensation to certain employees and directors. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period, which generally equals the vesting period. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the vesting period of the award. Compensation cost for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The compensation cost of the Company’s stock-based compensation awards is substantially reflected in general and administrative expense. |
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Income taxes | Income taxes The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities using the applicable jurisdictional tax rates. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. Recognition of uncertain tax positions is dependent upon whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax (expense) recovery. The Company believes that it and its subsidiaries are not subject to income taxation under the laws of the Republic of The Marshall Islands or Bermuda, or that distributions by its subsidiaries to the Company will be subject to any income taxes under the laws of such countries, and that it qualifies for the Section 883 exemption under U.S. federal income tax purposes. |
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Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.
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Employee pension plans | Employee pension plans The Company has defined contribution pension plans covering the majority of its employees. Pension costs associated with the Company’s required contributions under its defined contribution pension plans are based on a percentage of employees’ salaries and are charged to earnings in the year incurred. The Company also has defined benefit pension plans covering certain of its employees. The Company accrues the costs and related obligations associated with its defined benefit pension plans based on actuarial computations using the projected benefits obligation method and management’s best estimates of expected plan investment performance, salary escalation, and other relevant factors. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. The overfunded or underfunded status of the defined benefit pension plans are recognized as assets or liabilities in the consolidated balance sheets. The Company recognizes as a component of other comprehensive loss, the gains or losses that arise during a period but that are not recognized as part of net periodic benefit costs. |
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(Loss) earnings per common share | (Loss) earnings per common share The computation of basic earnings (loss) per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock awards using the treasury stock method. The computation of diluted loss per share does not assume such exercises. |
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Accounting pronouncements not yet adopted | Accounting pronouncements not yet adopted In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (or ASU 2014-09). ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for the Company January 1, 2018 and shall be applied, at the Company’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company expects that the adoption of ASU 2014-09 may result in a change in the method of recognizing revenue from contracts of affreightment whereby revenue will be recognized over the voyage until discharge is complete, instead of over the voyage until tendering notice for the next voyage. This will result in all revenue being fully recognized upon discharge of cargo whereas currently revenue recognition extends into the period the vessel returns to the oil field. This change may result in revenue being recognized earlier which may cause additional volatility in revenue and earnings between periods. In addition, the Company expects that the adoption of ASU 2014-09 may result in a change in the method of recognizing revenue for voyage charters, whereby the Company’s method of determining proportional performance will change from discharge-to-discharge to load-to-discharge. This will result in no revenue being recognized from discharge of the prior voyage to loading of the current voyage and all revenue being recognized from loading of the current voyage to discharge of the current voyage. This change will result in revenue being recognized later in the voyage which may cause additional volatility in revenue and earnings between periods. The Company is in the process of validating aspects of its preliminary assessment of ASU 2014-09, determining the transitional impact and completing other items required for the adoption of ASU 2014-09. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (or ASU 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company expects to adopt ASU 2016-02 on January 1, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company expects that the adoption of ASU 2016-02 will result in a change in accounting method for the lease portion of the daily charter hire for the Company’s chartered-in vessels accounted for as operating leases and office leases with firm periods of greater than one year. Under ASU 2016-02, the Company will recognize a right of use asset and a lease liability on the balance sheet for these charters and office leases, whereas currently no right of use asset or lease liability is recognized. This will have the result of increasing the Company’s assets and liabilities. The pattern of expense recognition of chartered-in vessels and office leases are expected to remain substantially unchanged, unless the right of use asset becomes impaired. The Company is in the process of validating aspects of its preliminary assessment of ASU 2016-02, determining the transitional impact and completing other items required for the adoption of ASU 2016-02. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (or ASU 2016-09). ASU 2016-09 simplifies aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 became effective for the Company January 1, 2017. The Company expects the impact of adopting this new accounting guidance will be a change in presentation of cash payments for tax withholdings on share-settled equity awards from an operating cash outflow to financing cash outflow on the Company's statement of cash flows. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This update replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for the Company on January 1, 2020, with a modified-retrospective approach. The Company is currently evaluating the effect of adopting this new guidance. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity method investees in the statement of cash flows. This update is effective for the Company on January 1, 2018, with a retrospective approach. The Company is currently evaluating the effect of adopting this new guidance. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income of Consolidated Partially-Owned Entities and Attribution of Net Income to Controlling and Non-controlling Interests | The total net income of Teekay’s consolidated partially-owned entities and the attribution of that net income to controlling and non-controlling interests is as follows:
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Summary of Capitalized Dry Docking Costs | The continuity of capitalized dry-docking costs for the years ended December 31, 2016, 2015, and 2014, is summarized as follows:
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Summary of Financing Receivables | The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2016.
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Income from Vessel Operations by Segment | The following table includes results for the Company’s revenue and income from vessel operations by segment for the periods presented in these financial statements.
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Revenues and Percentage of Consolidated Revenues | The following table presents revenues and percentage of consolidated revenues for customers that accounted for more than 10% of the Company’s consolidated revenues during the periods presented. All of these customers are international oil companies.
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Other Income Statement Items by Segment | The following table includes other income statement items by segment for the periods presented in these financial statements.
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Reconciliation of Total Segment Assets | A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
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Capital Expenditures by Segment | The following table includes capital expenditures by segment for the periods presented in these financial statements.
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Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Teekay Tankers [Member] | Ship-to-Ship Transfer Business (SPT) [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the final estimates of fair values of the SPT assets acquired and liabilities assumed by Teekay Tankers on the acquisition date. Such estimates of fair value were finalized in the first quarter of 2016 and resulted in an increase in goodwill of $8.1 million and a decrease in intangible assets by $8.4 million from preliminary estimates. Such changes did not have a material impact to the Company's consolidated statement of income for 2016.
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Teekay Offshore [Member] | Logitel Offshore Holdings [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary and final valuations of the Logitel assets and liabilities on the acquisition date. The estimates of fair values of the Logitel assets acquired and liabilities assumed by Teekay Offshore were finalized during the second quarter of 2015.
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Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the finalized estimates of fair values of the ALP assets acquired and liabilities assumed by Teekay Offshore on the acquisition date.
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Equity Financing Transactions of the Daughter Companies(Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Proceeds Received from Financial Transactions | During the years ended December 31, 2016, 2015, and 2014, the Company’s publicly traded subsidiaries, Teekay Tankers, Teekay Offshore and Teekay LNG, completed the following public offerings and private placements of equity securities:
Teekay purchased for $26.0 million a total of 1,040,000 of Teekay Offshore's Series D Preferred Units. Teekay also received 1,170,000 of the $4.55 Warrants and 585,000 of the $6.05 Warrants. The purchase of Teekay Offshore Series D Preferred Units has been accounted for as an equity transaction. Therefore, no gains or losses were recognized in the Company’s consolidated statements of income (loss) as a result of this purchase. Net cash proceeds from the sale of these securities of $71.3 million, which excludes Teekay's investment, was allocated on a relative fair value basis to the Series D Preferred Units ($61.1 million), to the $4.55 Warrants ($7.0 million) and to the $6.05 Warrants ($3.1 million). The Warrants qualify as freestanding financial instruments and are accounted for separately from the Series D Preferred Units. The Series D Preferred Units are presented in the Company's consolidated balance sheets as redeemable non-controlling interest in temporary equity which is above the equity section but below the liabilities section as they are not mandatorily redeemable and the prospect of a forced redemption paid with cash due to a change of control event is not presently probable. The Warrants are recorded as non-controlling interests in the Company's consolidated balance sheets.
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Goodwill, Intangible Assets and In-Process Revenue Contracts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount of Goodwill for Company's Reportable Segment | The carrying amount of goodwill for the years ended December 31, 2016 and 2015, for the Company’s reportable segments are as follows:
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Summary of Intangible Assets | As at December 31, 2016, the Company’s intangible assets consisted of:
As at December 31, 2015, the Company’s intangible assets consisted of:
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Accrued Liabilities and Other and Other Long-Term Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued Liabilities and Other
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Schedule of Other Long-Term Liabilities | Other Long-Term Liabilities
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Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt |
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Operating and Direct Financing Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts | As at December 31, 2016, the total estimated future minimum rental payments to be received and paid under the lease contracts are as follows:
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Net Investments in Direct Financing Leases | The following table lists the components of the net investments in direct financing leases for the five vessels and VOC equipment:
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Capital Lease Obligations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Lease Obligations | Capital Lease Obligations
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Schedule of Repayments of Capital Leases Including Imputed Interest | As at December 31, 2016, the remaining commitments under the two capital leases for Suezmax Tankers, including the related purchase obligations, approximated $58.2 million, including imputed interest of $3.6 million, repayable from 2017 through 2018, as indicated below:
As at December 31, 2016, the remaining commitments under the two capital leases for the Creole Spirit and the Oak Spirit, including the related purchase obligations, approximated $478.1 million, including imputed interest of $139.8 million, repayable from 2017 through 2026, as indicated below:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments and Other Non-Financial Assets | The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at a fair value on a recurring basis.
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Changes in Fair Value Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3) | Changes in fair value during the years ended December 31, 2016 and 2015 for Teekay Tankers' time-charter swap agreement, which is described in Note 14 below and is measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:
Changes in fair value during the years ended December 31, 2016 and 2015 for one of the Company’s derivative instruments, the TIL stock purchase warrants, which are described above and are measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:
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Changes in Estimated Fair Value of Contingent Consideration Liability Relating to Acquisition of Logitel | Changes in the estimated fair value of Teekay Offshore’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the years ended December 31, 2016 and 2015 is as follows:
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Capital Stock (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity and Related Information | A summary of the Company’s stock option activity and related information for the years ended December 31, 2016, 2015, and 2014, are as follows:
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Non-Vested Stock Option Activity and Related Information | A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2016, 2015 and 2014, are as follows:
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Details Regarding Outstanding and Exercisable Stock Options | Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2016 are as follows:
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Other (Loss) Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other (Loss) Income |
(1) The company holds investments at cost. During the year ended December 31, 2016 the Company recorded a write-down of these investments of $19.0 million |
Derivative Instruments and Hedging Activities (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment of Foreign Currency Forward Contracts | As at December 31, 2016, the Company was committed to the following foreign currency forward contracts:
(1)Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy. |
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Commitment of Cross Currency Swaps | As at December 31, 2016, the Company was committed to the following cross currency swaps:
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Interest Rate Swap Agreements | As at December 31, 2016, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt obligations were swapped with fixed-rate obligations:
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Location and Fair Value Amounts of Derivative Instruments | The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.
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Effective Portion of Gains (Losses) on Interest Rate Swap Agreements | For the periods indicated, the following table presents the effective portion of gains (losses) on interest rate swap agreements designated and qualifying as cash flow hedges:
(1) Recognized in accumulated other comprehensive loss (or AOCI). (2) Recorded in AOCI during the term of the hedging relationship and reclassified to earnings. (3) Recognized in the ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges. |
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Effect of Gain (Loss) on Derivatives Not Designated as Hedging Instruments | The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income are as follows:
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Effect of Gains (Losses) on Cross Currency Swaps | The effect of the loss on cross currency swaps on the consolidated statements of income is as follows:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Joint Ventures | Teekay LNG’s share of commitments to fund newbuilding and other construction contract costs of its non-consolidated joint ventures as at December 31, 2016 are as follows:
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Supplemental Cash Flow Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Operating Assets and Liabilities | a)The changes in operating assets and liabilities for the years ended December 31, 2016, 2015, and 2014, are as follows:
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Vessel Sales, Asset Impairments and Provisions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Assets Held-for-sale Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Vessel Sales | The following table shows the net (loss) gain on sale of vessels, equipment and other operating assets for the years ended December 31, 2016, 2015, and 2014:
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(Loss) Earnings Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income (Loss) Per Share |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Company's Deferred Tax Assets and Liabilities | The significant components of the Company’s deferred tax assets and liabilities are as follows:
Net deferred tax assets are presented in other non-current assets and other long term liabilities in the accompanying consolidated balance sheets. Certain of the balances in the comparative columns above have been adjusted with no impact on the amount of the net deferred tax assets.
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Components of Provision for Income Taxes | The components of the provision for income taxes are as follows:
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Reconciliations of Income Tax Rates and Actual Tax Charge | Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:
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Unrecognized Tax Benefits, Recorded in Other Long-Term Liabilities | The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2014 to December 31, 2016:
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Pension Benefits (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Benefit Obligation and Fair Value of Benefit Plans Assets | The following table provides information about changes in the benefit obligation and the fair value of the Benefit Plans assets, a statement of the funded status, and amounts recognized on the Company’s balance sheets:
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Pension Plans with Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets | The following table provides information for those pension plans with a benefit obligation in excess of plan assets and those pension plans with an accumulated benefit obligation in excess of plan assets:
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Components of Net Periodic Pension Cost Relating to Benefit Plans | The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
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Components of Other Comprehensive Income (Loss) Relating to Plans | The components of other comprehensive income (loss) relating to the Plans for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
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Estimated Future Benefit Payments which Reflect Expected Future Service to be Paid by Benefit Plans | The Company estimates that it will make contributions into the Benefit Plans of $2.4 million during 2017. The following table provides the estimated future benefit payments, which reflect expected future service, to be paid by the Benefit Plans:
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Fair Value of Plan Assets | The fair value of the plan assets, by category, as of December 31, 2016 and 2015 were as follows:
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Schedule of Assumptions Used | The weighted average assumptions used to determine benefit obligations at December 31, 2016 and 2015 were as follows:
The weighted average assumptions used to determine net pension expense for the years ended December 31, 2016, 2015 and 2014 were as follows:
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Equity-accounted Investments (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Summary of Company's Investments in and Advances to Joint Ventures | A condensed summary of the Company’s investments in equity-accounted investees by segment is as follows (in thousands of U.S. dollars, except percentages):
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Condensed Summary of Company's Financial Information for Joint Venture | A condensed summary of the Company’s financial information for equity-accounted investments (18% to 52% owned) shown on a 100% basis are as follows:
Certain of the comparative figures have been adjusted to conform to the presentation adopted in the current year. (1)The results included for TIL are from the date of incorporation in January 2014. |
Summary of Significant Accounting Policies - Summary of Capitalized Dry Docking Costs (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Property, Plant and Equipment [Roll Forward] | |||
Balance at the beginning of the year | $ 9,366,593 | ||
Balance at the end of the year | 9,138,886 | $ 9,366,593 | |
Dry-docking activity [Member] | |||
Property, Plant and Equipment [Roll Forward] | |||
Balance at the beginning of the year | 150,702 | 135,331 | $ 118,194 |
Costs incurred for dry dockings | 47,980 | 69,927 | 74,018 |
Dry-dock amortization | (55,026) | (47,271) | (50,926) |
Write-down / sales of vessels | (7,956) | (7,285) | (5,955) |
Balance at the end of the year | $ 135,700 | $ 150,702 | $ 135,331 |
Summary of Significant Accounting Policies - Summary of Financing Receivables (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Summary of financing receivables | ||
Direct financing leases | $ 660,594 | $ 684,129 |
Other loan receivables | ||
Total direct financing leases and other loan receivables | 982,336 | 912,678 |
Payment activity [Member] | Performing [Member] | ||
Summary of financing receivables | ||
Direct financing leases | 660,594 | 684,129 |
Other loan receivables | ||
Long term receivable included in other assets | 17,712 | 37,032 |
Other internal metrics [Member] | Performing [Member] | ||
Other loan receivables | ||
Loans to equity accounted investees and joint venture partners | $ 304,030 | $ 191,517 |
Segment Reporting - Additional Information (Detail) |
12 Months Ended |
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Dec. 31, 2016
subsidiary
segment
| |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 4 |
Number of subsidiaries | subsidiary | 3 |
Minimum [Member] | Public Subsidiaries [Member] | |
Segment Reporting Information [Line Items] | |
Number of lines of businesses | 1 |
Investments - Teekay Offshore Acquisition of ALP Maritime Services B.V. - Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands |
1 Months Ended | ||||
---|---|---|---|---|---|
Mar. 14, 2014 |
Mar. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
ASSETS | |||||
Goodwill | $ 176,630 | $ 168,571 | $ 168,571 | ||
Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | |||||
ASSETS | |||||
Cash and cash equivalents | $ 294 | ||||
Other current assets | 404 | ||||
Advances on newbuilding contracts | 164 | ||||
Other assets - long-term | 395 | ||||
Goodwill | 2,032 | ||||
Total assets acquired | 3,289 | ||||
LIABILITIES | |||||
Current liabilities | 387 | ||||
Other long-term liabilities | 286 | ||||
Long-term debt | 673 | ||||
Net assets acquired | 2,616 | ||||
Cash consideration | $ 2,616 | $ 2,600 |
Goodwill, Intangible Assets and In-Process Revenue Contracts - Carrying Amount of Goodwill for Company's Reportable Segment (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2014 |
|
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | $ 168,571 | |
Goodwill acquired | 8,059 | |
Goodwill, Ending balance | 176,630 | |
Goodwill | 168,571 | $ 168,571 |
Offshore Logistics [Member] | Teekay Offshore [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 132,940 | |
Goodwill acquired | 0 | |
Goodwill, Ending balance | 132,940 | |
Goodwill | 132,940 | 132,940 |
Liquefied Gas Segment [Member] | Teekay LNG [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 35,631 | |
Goodwill acquired | 0 | |
Goodwill, Ending balance | 35,631 | |
Goodwill | 35,631 | 35,631 |
Conventional Tanker Segment [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 0 | |
Goodwill acquired | 8,059 | |
Goodwill, Ending balance | 8,059 | |
Goodwill | $ 0 | $ 0 |
Goodwill, Intangible Assets and In-Process Revenue Contracts - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 340,722 | $ 348,563 |
Accumulated Amortization | (251,547) | (236,654) |
Net Carrying Amount | 89,175 | 111,909 |
Customer Contracts [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 317,222 | 316,684 |
Accumulated Amortization | (245,705) | (234,894) |
Net Carrying Amount | 71,517 | 81,790 |
Customer Relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 22,500 | 30,879 |
Accumulated Amortization | (4,842) | (1,260) |
Net Carrying Amount | 17,658 | 29,619 |
Other Intangible Assets [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,000 | 1,000 |
Accumulated Amortization | (1,000) | (500) |
Net Carrying Amount | $ 0 | $ 500 |
Accrued Liabilities and Other and Other Long-Term Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Voyage and vessel expenses | $ 177,868 | $ 168,120 |
Interest | 64,362 | 66,110 |
Payroll and benefits and other | 70,904 | 88,239 |
Deferred revenues and gains - current | 78,766 | 76,883 |
Loans from affiliates | 11,785 | 12,426 |
Liabilities associated with assets held for sale | 0 | 500 |
Accrued Liabilities | $ 403,685 | $ 412,278 |
Accrued Liabilities and Other and Other Long-Term Liabilities - Schedule of Other Long-Term Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Liabilities, Noncurrent [Abstract] | ||
Deferred revenues and gains | $ 210,434 | $ 248,984 |
Guarantee liability | 24,373 | 26,467 |
Asset retirement obligation | 44,675 | 25,484 |
Pension liabilities | 8,599 | 14,953 |
Contingent consideration liability | 0 | 6,225 |
Unrecognized tax benefits and deferred income tax | 24,340 | 21,967 |
Other | 20,815 | 8,298 |
Other Long-Term Liabilities | $ 333,236 | $ 352,378 |
Long-Term Debt - Additional Information - Senior unsecured notes (Detail) - Senior Notes (8.5%) due January 15, 2020 [Member] - USD ($) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 27, 2010 |
Nov. 30, 2015 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | |||
Fixed interest rate on the portion of U. S. Dollar-denominated term loans outstanding | 8.50% | 8.50% | |
Debt instrument, principal amount | $ 200,000,000 | $ 450,000,000 | |
Percentage over par at which notes sold | 99.181% | 99.01% | |
Effective interest rate | 8.67% | ||
Capitalized cost included in long term debt | $ 13,300,000 | ||
Unamortized balance of the capitalized issuance cost | $ 5,700,000 | ||
Debt instrument, redemption price as percentage of principal amount | 100.00% | ||
Discount rate for redemption feature | 0.50% |
Operating and Direct Financing Leases - Charters-in - Additional Information (Detail) - In-Chartered [Member] $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Property Subject to or Available for Operating Lease [Line Items] | |
Total | $ 185.0 |
Minimum commitments to be incurred by the company in current year | 105.7 |
Minimum commitments to be incurred by the company in second year | 44.1 |
Minimum commitments to be incurred by the company in third year | 25.5 |
Minimum commitments to be incurred by the company in fourth year | 8.3 |
Minimum commitments to be incurred by the company in fifth year | $ 1.4 |
Operating and Direct Financing Leases - Charters-out - Additional Information (Detail) - USD ($) $ in Billions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Property Subject to or Available for Operating Lease [Line Items] | ||
Carrying amount of the vessels accounted for as operating leases | $ 6.6 | $ 7.1 |
Cost of the vessels | 9.1 | 9.6 |
Accumulated depreciation of the vessels | 2.5 | $ 2.5 |
Charters-out [Member] | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Total | 8.0 | |
Minimum scheduled future revenues to be received by the company in current year | 1.3 | |
Minimum scheduled future revenues to be received by the company in second year | 1.2 | |
Minimum scheduled future revenues to be received by the company in third year | 1.1 | |
Minimum scheduled future revenues to be received by the company in fourth year | 1.0 | |
Minimum scheduled future revenues to be received by the company in fifth year | 0.7 | |
Minimum scheduled future revenues to be received by the company thereafter | $ 2.7 |
Operating and Direct Financing Leases - Operating Lease Obligations - Additional Information (Detail) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Nov. 30, 2013
vessel
|
Dec. 31, 2016
USD ($)
vessel
|
Dec. 31, 2015
USD ($)
|
|
Property Subject to or Available for Operating Lease [Line Items] | |||
Number of vessels | 5 | ||
Teekay Tangguh Joint Venture [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Number of vessels | 2 | ||
Tax indemnification | $ | $ 7.5 | $ 8.0 | |
Operating lease arrangement period | 20 years |
Operating and Direct Financing Leases - Schedule of Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts (Detail) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Head Lease Receipts [Member] | |
Head Lease Receipts | |
2017 | $ 21,242 |
2018 | 21,242 |
2019 | 21,242 |
2020 | 21,242 |
2021 | 21,242 |
Thereafter | 154,095 |
Total | 260,305 |
Sublease Payments [Member] | |
Sublease Payments | |
2017 | 24,113 |
2018 | 24,113 |
2019 | 24,113 |
2020 | 24,113 |
2021 | 24,113 |
Thereafter | 174,959 |
Total | $ 295,524 |
Operating and Direct Financing Leases - Schedule of Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts (Footnote) (Detail) - Teekay Tangguh Joint Venture [Member] $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Operating Leased Assets [Line Items] | |
Head lease payment received | $ 250.0 |
Sublease payment made | 187.9 |
Other liabilities - non-current [Member] | |
Operating Leased Assets [Line Items] | |
Deferred Head Lease receipts | 36.7 |
Accrued Liabilities [Member] | |
Operating Leased Assets [Line Items] | |
Deferred Head Lease receipts | $ 3.7 |
Operating and Direct Financing Leases - Components of Net Investments in Direct Financing Leases (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Leases [Abstract] | ||
Total minimum lease payments to be received | $ 777,334 | $ 855,655 |
Estimated unguaranteed residual value of leased properties | 203,465 | 203,465 |
Initial direct costs and other | 393 | 428 |
Less unearned revenue | (320,598) | (375,419) |
Total | 660,594 | 684,129 |
Less current portion | (154,759) | (26,542) |
Long-term portion | $ 505,835 | $ 657,587 |
Capital Lease Obligations - Capital Lease Obligations (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Capital Leased Assets [Line Items] | ||
Less current portion | $ (40,353) | $ (4,546) |
Long-term obligations under capital lease | 352,486 | 54,581 |
LNG Carriers [Member] | ||
Capital Leased Assets [Line Items] | ||
Capital lease obligations | 338,257 | 0 |
Suezmax Tankers [Member] | ||
Capital Leased Assets [Line Items] | ||
Capital lease obligations | $ 54,582 | $ 59,127 |
Capital Lease Obligations - Schedule of Repayments of Capital Leases Including Imputed Interest (Detail) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
LNG Carriers [Member] | |
Capital Leased Assets [Line Items] | |
2017 | $ 30,065 |
2018 | 30,065 |
2019 | 30,065 |
2020 | 30,147 |
2021 | 30,065 |
Thereafter | 327,686 |
Suezmax Tankers [Member] | |
Capital Leased Assets [Line Items] | |
2017 | 30,953 |
2018 | $ 27,296 |
Fair Value Measurements - Fair Value of Financial Instruments and Other Non-Financial Assets (Footnote) (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of interest rate swap agreements | $ 15,800 | $ 21,700 |
Level 2 [Member] | BG Joint Venture [Member] | Shipbuilding supervision and crew training services [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Discount rate | 8.00% | |
Estimate of Fair Value Measurement [Member] | Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term receivable | $ 10,944 | $ 16,427 |
Fair Value Measurements - Summary of Derivative Instrument Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Details) - Teekay Tankers [Member] - Level 3 [Member] - Time-charter Swap [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value at the beginning of the year | $ 0 | $ 0 |
Settlements | (2,154) | 0 |
Realized and unrealized gain | 2,362 | 0 |
Fair value at the end of the year | $ 208 | $ 0 |
Fair Value Measurements - Changes in Fair Value Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) - Recurring [Member] - Level 3 [Member] - Warrant [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value at the beginning of the year | $ 10,328 | $ 9,314 |
Unrealized (loss) gain included in earnings | (9,753) | 1,014 |
Fair value at the end of the year | $ 575 | $ 10,328 |
Fair Value Measurements - Changes in Estimated Fair Value of Contingent Consideration Liability Relating to Acquisition of Logitel (Detail) - Logitel Offshore Holdings [Member] - Teekay Offshore [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of year | $ (14,830) | $ (21,448) |
Adjustment to liability | 0 | 2,569 |
Settlement of liability | 0 | 3,540 |
Gain included in Other (loss) income - net (note 13) | 14,830 | 509 |
Balance at end of year | $ 0 | $ (14,830) |
Related Party Transactions (Detail) |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Resolute Investments, Ltd. [Member] | |||
Related Party Transaction [Line Items] | |||
Share of Resolute in outstanding common stock | 37.10% | 39.10% | 34.80% |
Other (Loss) Income (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Other Income and Expenses [Abstract] | |||
Write-off of contingent consideration (note 15d) | $ 36,630 | $ 0 | $ 0 |
Accrual of contingent liability (note 15d) | (61,862) | 0 | 0 |
Write-down of cost-accounted investment | (19,000) | 0 | 0 |
TIL stock purchase warrants received (note 14) | 0 | 0 | 6,839 |
Miscellaneous income (loss) | 5,219 | 1,566 | (292) |
Loss on bond repurchases | 0 | 0 | (7,699) |
Other (loss) income | $ (39,013) | $ 1,566 | $ (1,152) |
Derivative Instruments and Hedging Activities - Effective Portion of Gains (Losses) on Interest Rate Swap Agreements (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Derivative [Line Items] | ||
Effective Portion Recognized in AOCI | $ 691 | $ (65) |
Effective Portion Reclassified from AOCI | (68) | 0 |
Ineffective Portion | 682 | (1,050) |
Interest Expense [Member] | ||
Derivative [Line Items] | ||
Effective Portion Recognized in AOCI | 691 | (65) |
Effective Portion Reclassified from AOCI | (68) | 0 |
Ineffective Portion | $ 682 | $ (1,050) |
Commitments and Contingencies - Additional Information - Liquidity (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loss Contingencies [Line Items] | |||
Net (loss) income | $ 86,664 | $ 405,460 | $ 124,002 |
Consolidated cash flows from operating activities | 620,000 | ||
Working capital deficit | 365,000 | ||
Current portion of long-term debt | 998,591 | $ 1,106,104 | |
Other Current Liabilities [Member] | |||
Loss Contingencies [Line Items] | |||
Current portion of long-term debt | $ 1,000,000 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Polar Spirit contract termination (Details) $ in Millions |
1 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Polar Spirit [Member] | |
Loss Contingencies [Line Items] | |
Litigation settlement amount | $ 42.4 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Petrojarl Knarr FPSO (Details) $ in Millions |
1 Months Ended |
---|---|
Oct. 31, 2016
USD ($)
| |
Royal Dutch Shell Plc [Member] | |
Loss Contingencies [Line Items] | |
Percentage of rate reduction claim | 20.00% |
Royal Dutch Shell Plc [Member] | |
Loss Contingencies [Line Items] | |
Estimated claim | $ 23.6 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Arendal Spirit UMS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | ||
Long-term debt | $ 6,639,546 | $ 7,384,086 |
Fpso [Member] | Petrobras [Member] | ||
Loss Contingencies [Line Items] | ||
Period for cancellation of debt | 180 days | |
Petrobras [Member] | Units for Maintenance and Safety [Member] | ||
Loss Contingencies [Line Items] | ||
Debt instrument, principal amount | $ 127,500 | |
Long-term debt | $ 112,500 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Damen Shipyard Group (Details) - Petrojarl I FPSO [Member] - USD ($) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | |||
Purchase price of acquisition | $ 57,000,000 | ||
Expected cost of project | $ 350,000,000 | ||
Operating lease arrangement period, lessor | 5 years | ||
Payment made towards commitments | $ 252,500,000 | ||
Purchase obligation due in 2017 | 97,500,000 | ||
Secured short-term loan refinanced with long-term debt facility | $ 171,200,000 | ||
Debt term | 2 months | ||
Amount of escrow account placed | $ 60,000,000 | $ 0 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Class Action Complaint (Details) - $ / shares |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loss Contingencies [Line Items] | |||||
Quarterly dividend (dollars per share) | $ 0.22 | $ 1.7325 | $ 1.265 | ||
Class Action Complaint [Member] | |||||
Loss Contingencies [Line Items] | |||||
Quarterly dividend (dollars per share) | $ 0.055 | $ 0.550 |
Commitments and Contingencies - Additional Information - Legal Proceedings and Claims - Teekay Nakilat Capital Lease (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Nov. 30, 2013
vessel
|
Dec. 31, 2016
USD ($)
vessel
agreement
|
Dec. 22, 2014
USD ($)
|
|
Loss Contingencies [Line Items] | |||
Number of vessels | vessel | 5 | ||
Teekay Nakilat Corporation [Member] | |||
Loss Contingencies [Line Items] | |||
Security deposit against future claims | $ | $ 6.8 | ||
Teekay LNG [Member] | Teekay Nakilat Corporation [Member] | |||
Loss Contingencies [Line Items] | |||
Share of potential exposure | 70.00% | ||
Number of vessels | vessel | 3 | ||
Teekay LNG [Member] | RasGas II LNG Carriers [Member] | Foreign Tax Authority [Member] | |||
Loss Contingencies [Line Items] | |||
Share of potential exposure | 70.00% | ||
Estimated shares of lease rental increase claim | $ | $ 60.0 | ||
Teekay Nakilat Corporation [Member] | Teekay LNG [Member] | |||
Loss Contingencies [Line Items] | |||
Number of lease agreements | agreement | 3 | ||
Lease term | 30 years |
Supplemental Cash Flow Information - Changes in Operating Assets and Liabilities (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Supplemental Cash Flow Elements [Abstract] | |||
Accounts receivable | $ 96,497 | $ (6,488) | $ 136,660 |
Prepaid expenses and other | 9,690 | (10,607) | (1,618) |
Accounts payable | (10,705) | (24,727) | (17,643) |
Accrued liabilities and other | (57,149) | 29,531 | (56,768) |
Total | $ 38,333 | $ (12,291) | $ 60,631 |
(Loss) Earnings Per Share - Additional Information (Detail) - shares shares in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Anti-dilutive effect on calculation of diluted loss per common share attributable to outstanding stock-based awards | 3.8 | 1.4 |
Restructuring Charges (Detail) $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jan. 31, 2014
vessel
|
Nov. 30, 2013
vessel
|
Dec. 31, 2016
USD ($)
office
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 26,811 | $ 14,017 | $ 9,826 | ||
Number of offices closed | office | 2 | ||||
Number of vessels | vessel | 5 | ||||
Restructuring liability | $ 5,600 | 3,200 | |||
Special Termination Benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Reimbursement revenue | $ 8,400 | ||||
In-Chartered [Member] | Special Termination Benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of vessels | vessel | 1 |
Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Vessels and equipment | $ 40,928 | $ 43,289 |
Tax losses carried forward | 276,291 | 321,648 |
Other | 17,075 | 22,141 |
Total deferred tax assets | 334,294 | 387,078 |
Deferred tax liabilities: | ||
Vessels and equipment | 5,974 | 10,577 |
Long-term debt | 1,691 | 3,218 |
Other | 11,626 | 15,090 |
Total deferred tax liabilities | 19,291 | 28,885 |
Net deferred tax assets | 315,003 | 358,193 |
Valuation allowance | (290,015) | (322,491) |
Net deferred tax assets | $ 24,988 | $ 35,702 |
Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Footnote) (Detail) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 1,260.0 |
Disallowed finance costs | $ 36.4 |
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Current | $ (14,424) | $ (10,440) | $ (6,460) |
Deferred | (10,044) | 27,207 | (3,713) |
Income tax (expense) recovery | $ (24,468) | $ 16,767 | $ (10,173) |
Income Taxes - Reconciliations of Income Tax Rates and Actual Tax Charge (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Net income before income taxes | $ 111,132 | $ 388,693 | $ 134,175 |
Net income (loss) not subject to taxes | 57,862 | 252,604 | (80,454) |
Net income subject to taxes | 53,270 | 136,089 | 214,629 |
At applicable statutory tax rates | 5,996 | 32,750 | 39,382 |
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions | 18,198 | (49,789) | (28,027) |
Other | 274 | 272 | (1,182) |
Tax expense (recovery) related to the current year | $ 24,468 | $ (16,767) | $ 10,173 |
Income Taxes - Unrecognized Tax Benefits, Recorded in Other Long-Term Liabilities (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance of unrecognized tax benefits as at January 1 | $ 18,390 | $ 20,335 | $ 20,304 |
Increases for positions related to the current year | 6,422 | 4,578 | 3,643 |
Changes for positions taken in prior years | (3,729) | (2,965) | 1,015 |
Decreases related to statute of limitations | (1,591) | (3,558) | (4,627) |
Balance of unrecognized tax benefits as at December 31 | $ 19,492 | $ 18,390 | $ 20,335 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Interest and penalties on unrecognized tax benefits | $ 1.2 | $ 0.3 | $ 1.6 |
Pension Benefits - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Cost recognized for defined contribution pension plans | $ 13.5 | $ 15.2 | $ 13.9 |
Accumulated benefit obligation | 38.9 | $ 67.1 | |
Estimations of contributions into benefit plan during 2017 | $ 2.4 | ||
Norway [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of ownership of defined benefit pension assets | 65.00% | ||
Australia [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of ownership of defined benefit pension assets | 35.00% |
Pension Benefits - Changes in Benefit Obligation and Fair Value of Benefit Plans Assets (Footnote) (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Compensation and Retirement Disclosure [Abstract] | |
Amortized from accumulated other comprehensive (loss) income into net periodic benefit cost | $ 0.5 |
Pension Benefits - Pension Plans with Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Compensation and Retirement Disclosure [Abstract] | ||
Benefit obligation | $ 29,737 | $ 61,124 |
Fair value of plan assets | 26,296 | 50,517 |
Accumulated benefit obligation | 828 | 1,821 |
Fair value of plan assets | $ 0 | $ 925 |
Pension Benefits - Components of Net Periodic Pension Cost Relating to Benefit Plans (Detail) - Net period pension cost [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 5,372 | $ 7,726 | $ 8,800 |
Interest cost | 2,270 | 2,532 | 4,975 |
Expected return on plan assets | (2,718) | (2,895) | (5,333) |
Amortization of net actuarial loss | 469 | 1,538 | 7,148 |
Plan settlement | (3,899) | (140) | (3,332) |
Other | 445 | 568 | 557 |
Net cost | $ 1,939 | $ 9,329 | $ 12,815 |
Pension Benefits - Components of Other Comprehensive Income (Loss) Relating to Plans (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Other comprehensive income (loss): | |||
Net gain (loss) arising during the period | $ 7,035 | $ 13,288 | $ (14,954) |
Amortization of net actuarial loss | 469 | 1,538 | 7,148 |
Plan settlement | (3,905) | (140) | (3,332) |
Total income (loss) | $ 3,599 | $ 14,686 | $ (11,138) |
Pension Benefits - Estimated Future Benefit Payments which Reflect Expected Future Service to be Paid by Benefit Plans (Detail) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Compensation and Retirement Disclosure [Abstract] | |
2017 | $ 2,497 |
2018 | 2,156 |
2019 | 2,098 |
2020 | 2,123 |
2021 | 2,129 |
2021 - 2025 | 11,908 |
Total | $ 22,911 |
Pension Benefits - Fair Value of Plan Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 42,775 | $ 73,075 |
Pooled Funds [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 28,012 | 52,150 |
Mutual Fund Equity investments [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 7,972 | 11,089 |
Mutual Funds Debt securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,772 | 2,512 |
Mutual Funds Real estate [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,919 | 2,929 |
Mutual Funds Cash and money market [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1,181 | 1,674 |
Mutual Funds Other [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 1,919 | $ 2,720 |
Pension Benefits - Fair Value of Plan Assets (Footnote) (Detail) |
Dec. 31, 2016 |
---|---|
Compensation and Retirement Disclosure [Abstract] | |
Growth oriented assets | 56.00% |
Defensive assets | 44.00% |
Pension Benefits - Schedule of Assumptions Used (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Weighted average assumptions used to determine benefit obligation | |||
Discount rates | 2.90% | 3.00% | |
Rate of compensation increase | 2.50% | 3.40% | |
Weighted average assumptions used to determine net pension expense | |||
Discount rates | 2.90% | 3.00% | 2.90% |
Rate of compensation increase | 2.50% | 3.40% | 4.20% |
Expected long-term rates of return | 4.20% | 4.00% | 4.00% |
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