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Schedule I Condensed Non-Consolidated Financial Information of Registrant
 12 Months Ended
Dec. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Schedule I Condensed Non-Consolidated Financial Information of Registrant
SCHEDULE I
CONDENSED NON-CONSOLIDATED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED BALANCE SHEETS (NOTE 1)
(in thousands of U.S. dollars)
 
 
As at December 31, 2017
$
 
As at December 31, 2016
$
ASSETS
 
 
 
 
Current
 
 
 
 
Cash and cash equivalents
 
22,050

 
8,585

Accounts receivable
 
699

 
3,241

Prepaid expenses and other
 
175

 
49

Due from affiliates
 
736,938

 
786,110

Total current assets
 
759,862

 
797,985

Investments in subsidiaries (note 1)
 
1,117,291

 
3,122,738

Other assets
 
297

 
1,586

Total assets
 
1,877,450

 
3,922,309

LIABILITIES AND EQUITY
 
 
 
 
Current
 
 
 
 
Accounts payable
 
1,660

 
344

Accrued liabilities
 
24,972

 
26,036

Due to affiliates
 
254,983

 
1,951,901

Other current liabilities
 
2,239

 
2,441

Total current liabilities
 
283,854

 
1,980,722

Long-term debt (note 2)
 
586,982

 
584,349

Other long-term liabilities
 
10,783

 
11,981

Total liabilities
 
881,619

 
2,577,052

Equity
 
 
 
 
Common stock and additional paid-in capital
 
919,078

 
887,075

Retained earnings
 
76,753

 
458,182

Total equity
 
995,831

 
1,345,257

Total liabilities and equity
 
1,877,450

 
3,922,309

The accompanying notes are an integral part of the condensed non-consolidated financial information.

TEEKAY CORPORATION
SCHEDULE I
CONDENSED NON-CONSOLIDATED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF LOSS (NOTE 1)
(in thousands of U.S. dollars)

 
 
Year ended December 31, 2017
$
 
Year ended December 31, 2016
$
 
Year ended December 31, 2015
$
Revenues
 
5,089

 
14,142

 
34,373

Voyage expenses
 
(242
)
 
(59
)
 
(499
)
Vessel operating expenses
 
—

 
(30
)
 
(652
)
Time-charter hire expense
 
(17,765
)
 
(24,477
)
 
(43,013
)
General and administrative expenses
 
(20,549
)
 
(20,583
)
 
(27,708
)
Loss from vessel operations
 
(33,467
)
 
(31,007
)
 
(37,499
)
Interest expense
 
(53,103
)
 
(53,164
)
 
(38,196
)
Interest income
 
422

 
18,430

 
7,781

Impairments of investments (note 1)
 
(338,749
)
 
—

 
(1,360,705
)
Dividend income (note 1)
 
58,000

 
1,039

 
109

Other
 
4,764

 
(981
)
 
(46,190
)
Net loss before income taxes
 
(362,133
)
 
(65,683
)
 
(1,474,700
)
Income tax (expense) recovery
 
(251
)
 
(525
)
 
52

Net loss
 
(362,384
)
 
(66,208
)
 
(1,474,648
)

The accompanying notes are an integral part of the condensed non-consolidated financial information.
TEEKAY CORPORATION
SCHEDULE I
CONDENSED NON-CONSOLIDATED FINANCIAL INFORMATION OF REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
 
 
Year Ended
December 31, 2017
$
 
Year Ended
December 31, 2016
$
 
Year Ended
December 31, 2015
$
Cash and cash equivalents provided by (used for)
 
 
 
 
 
 
OPERATING ACTIVITIES
 
 
 
 
 
 
Net loss
 
(362,384
)
 
(66,208
)
 
(1,474,648
)
Non-cash items:
 
 
 
 
 
 
Unrealized (gain) loss on derivative instruments
 
(2,336
)
 
604

 
(34,871
)
Impairments of investments
 
338,749

 
—

 
1,360,705

Income tax expense (recovery)
 
251

 
525

 
(52
)
Stock-based compensation
 
6,952

 
7,106

 
8,054

Dividends-in-kind
 
(58,000
)
 
(1,039
)
 
—

Other
 
3,262

 
529

 
(6,907
)
Change in operating assets and liabilities
 
718

 
17,050

 
25,499

Net operating cash flow
 
(72,788
)
 
(41,433
)
 
(122,220
)
FINANCING ACTIVITIES
 
 
 
 
 
 
Proceeds from issuance of long-term debt, net of issuance costs
 
—

 
—

 
194,358

Scheduled repayments of long-term debt
 
—

 
—

 
(86,645
)
Decrease in restricted cash
 
—

 
—

 
22,520

Advances from (to) affiliates
 
103,400

 
(15,802
)
 
179,095

Net proceeds from equity issuances
 
25,636

 
105,462

 
—

Cash dividends paid
 
(18,967
)
 
(17,406
)
 
(125,881
)
Other financing activities
 
(662
)
 
(666
)
 
(4,306
)
Net financing cash flow
 
109,407

 
71,588

 
179,141

INVESTING ACTIVITIES
 
 
 
 
 
 
Investments in subsidiaries
 
(24,443
)
 
(62,714
)
 
(54,215
)
Other investing activities
 
1,289

 
660

 
1,250

Net investing cash flow
 
(23,154
)
 
(62,054
)
 
(52,965
)
Increase (decrease) in cash and cash equivalents
 
13,465

 
(31,899
)
 
3,956

Cash and cash equivalents, beginning of the year
 
8,585

 
40,484

 
36,528

Cash and cash equivalents, end of the year
 
22,050

 
8,585

 
40,484

Supplemental cash flow information (note 4)

 
 
 
 
 
 

The accompanying notes are an integral part of the condensed non-consolidated financial information.
1. Summary of Significant Accounting Policies
Basis of presentation
The accompanying condensed non-consolidated financial information is required by SEC Regulation S-X 5-04 for Teekay Corporation (or Teekay), which requires the inclusion of financial information for Teekay on a stand-alone basis if the restricted net assets of consolidated subsidiaries exceed 25% of total consolidated net assets as of the last day of its most recent fiscal year.
Teekay’s investments in subsidiaries are presented in this financial information under the cost method of accounting, whereby Teekay’s investment in subsidiaries is measured initially at cost. Under the cost method of accounting for investments in common stock, dividends are the basis for recognition of earnings from an investment. Under this method, an investor recognizes as income dividends received that are distributed from net accumulated earnings of the investee since the date of acquisition by the investor. The net accumulated earnings of an investee subsequent to the date of investment are recognized by the investor only to the extent distributed by the investee as dividends. Dividends received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of cost of the investment. Teekay received dividends from its subsidiaries of $58.0 million (2017), $1.0 million (2016) and $0.1 million (2015), respectively.
Teekay recognizes an impairment loss on its investments in its subsidiaries when a decline in fair value is considered to be other-than-temporary. During the years ended December 31, 2017, 2016 and 2015, Teekay recognized impairment losses of $338.7 million, nil and $1.4 billion, respectively, in relation to other-than-temporary declines in the fair value of its investments.
A substantial amount of Teekay’s operating, investing and financing activities are conducted by its affiliates and not reflected in this financial information. The condensed non-consolidated financial information should be read in conjunction with Teekay’s consolidated financial statements.
2. Long-term debt
 
December 31, 2017
$
 
December 31, 2016
$
Senior Notes (8.5%) due January 15, 2020
592,657

 
592,657

Less unamortized discount and debt issuance costs
(5,675
)
 
(8,308
)
Total debt
586,982

 
584,349

Long-term portion
586,982

 
584,349

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 99.2% of par. During 2014, the Company repurchased $57.3 million of the Original Notes. 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 (collectively 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 annum.

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, 2017, the unamortized balance of the capitalized issuance cost was $3.8 million which is recorded in long-term debt in the condensed 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.
3. Guarantees
Teekay Corporation has guaranteed obligations pursuant to certain credit facilities of its subsidiaries. As at December 31, 2017, the aggregate outstanding balance on such credit facilities of Teekay Tankers was $252.7 million. As at December 31, 2016, the aggregate outstanding balance on such credit facilities of Teekay Tankers and Teekay Offshore was $150.0 million and $364.0 million, respectively. In September 2017, Teekay was released from all of its previous guarantees relating to Teekay Offshore's long-term debt and interest rate swap and cross currency swap agreements.
4. Supplemental Cash Flow Information
During 2017, one of the Company's subsidiaries returned capital in the amount of $1.7 billion, paid-in-kind, which was treated as a non-cash transaction in the Company's condensed statement of cash flows.
During 2017 and 2016, the Company received dividends of $58.0 million and $1.0 million, respectively, paid-in-kind, which were treated as non-cash transactions in the Company's condensed statement of cash flows