Highlights
- Reported GAAP net income of
$106.8 million , or$3.17 per share, and adjusted net income(1) of$110.0 million , or$3.27 per share, in the first quarter of 2020 (excluding items listed in Appendix A to this release). - Total Adjusted EBITDA(1) of
$155.4 million in the first quarter of 2020. - Generated over
$140 million of free cash flow(1) and completed approximately$60 million of vessel sales in the first quarter of 2020, reducing net debt(2) by approximately$200 million and increasing liquidity to approximately$368 million as ofMarch 31, 2020 . - Secured strong second quarter to-date spot tanker rates of
$52,100 per day for its Suezmax fleet and$33,600 per day for its Aframax-sized fleet. - Entered into nine six-month to two-year time charter-out contracts for six Suezmaxes and three Aframax-sized vessels at attractive rates to a total of 13 time charter-out contracts since
October 2019 , securing$170 million of fixed forward revenues. - Closed the previously announced sale of a portion of the ship-to-ship transfer support services business.
Consolidated Financial Summary
Three Months Ended | ||||||||||||||||||||
(in thousands of | 2020 | 2019 (3) | 2019 (3) | |||||||||||||||||
GAAP FINANCIAL COMPARISON | ||||||||||||||||||||
Total revenues | 341,900 | 311,305 | 238,161 | |||||||||||||||||
Income from operations | 120,126 | 91,608 | 32,097 | |||||||||||||||||
Net income | 106,839 | 63,072 | 12,447 | |||||||||||||||||
Earnings per share (4) | 3.17 | 1.88 | 0.37 | |||||||||||||||||
NON-GAAP FINANCIAL COMPARISON | ||||||||||||||||||||
Total Adjusted EBITDA (1) | 155,370 | 132,733 | 63,428 | |||||||||||||||||
Adjusted net income (1) | 109,981 | 82,991 | 14,647 | |||||||||||||||||
Adjusted earnings per share (1)(4) | 3.27 | 2.47 | 0.44 | |||||||||||||||||
Free cash flow (1) | 141,334 | 102,386 | 44,554 |
(1) These are non-GAAP financial measures. Please refer to "Definitions and Non-GAAP Financial Measures" and the Appendices to this release for definitions of these terms and reconciliations of these non-GAAP financial measures as used in this release to the most directly comparable financial measures under
(2) Net debt is a non-GAAP financial measure and represents short-term, current and long-term debt and current and long-term obligations related to finance leases less cash and cash equivalents and restricted cash.
(3) Comparative balances relating to the three months ended
(4) The per share amounts for all periods presented have been adjusted to reflect a one-for-eight reverse stock split completed in
First Quarter of 2020 Compared to Fourth Quarter of 2019
GAAP net income and non-GAAP adjusted net income for the first quarter of 2020 improved compared to the fourth quarter of 2019, primarily due to higher average spot tanker rates, partially offset by the sale of four Suezmax tankers during
First Quarter of 2020 Compared to First Quarter of 2019
GAAP net income and non-GAAP adjusted net income for the first quarter of 2020 significantly increased compared to the same period of the prior year, primarily due to higher average spot tanker rates and fewer off-hire days, partially offset by the sale of four Suezmax tankers since
CEO Commentary
"In the first quarter of 2020,
"We have continued to execute on our strategic priorities, taking advantage of the strong spot tanker market over the last couple of months and opportunistically securing time charter-out contracts for an additional nine vessels for periods of six months to two years. We have now secured a total of 13 time charter-out contracts since
"In addition, we continue to focus on further increasing our financial strength. With the strong cash flows we generated from operations and the proceeds from vessel sales in the first quarter of 2020, we reduced our net debt by approximately
(1) Commencing from
Summary of Recent Events
Since the beginning of the year,
In
Tanker Market
The first quarter of 2020 started on a relatively strong note, as positive supply and demand fundamentals existing during the fourth quarter of 2019 continued into the early part of the year. However, crude tanker spot rates gradually softened through the course of
The tanker market improved quickly during
Crude tanker spot rates have remained firm at the beginning of the second quarter of 2020. However, the outlook for spot rates has become more uncertain. In the near-term, global oil supply is expected to decline substantially, which should result in fewer spot cargoes. The OPEC+ group of producers have announced record supply cuts of 9.7 million barrels per day (mb/d) starting in
Looking further ahead, global oil demand is expected to begin recovering as lockdown restrictions start to be lifted across the globe from
Against the uncertainty around tanker demand, the tanker supply fundamentals offer a clear, positive counterbalance, with a much lower tanker orderbook than in previous cycles. The tanker orderbook, when measured as a percentage of the existing fleet, is currently at a 23-year low of around 8 percent. This compares to an orderbook of around 20 percent at the peak of the last market cycle in 2015 and just under 50 percent in 2008. New vessel ordering remains low due to financing constraints and uncertainty over what type of fuel and propulsion system to choose given new technology developments and future environmental legislation, such as IMO 2030. Finally, the global tanker fleet is aging, with 370 mid-size tankers, or 19 percent of the fleet, currently 15 years of age or older, and thus likely to face scrapping in the coming years. Taking all of these factors into account, net tanker fleet growth is expected to be very low for at least the next two years.
In summary, the extraordinary upheaval in global oil markets at the start of 2020 has driven crude tanker spot rates to the highest level in more than 10 years. In the near-term, we anticipate that rates will remain volatile due to a continued mismatch between oil supply and demand and an ongoing need for floating storage. The medium-term outlook is far less certain, and a period of lower oil supply coupled with inventory destocking may weigh on tanker demand. However, very low tanker fleet growth due to a small orderbook and high scrapping may lead to a faster rebalancing than in previous market cycles.
Operating Results
The following table highlights the operating performance of the Company’s time-charter vessels and spot vessels trading in revenue sharing arrangements (RSAs), voyage charters and full service lightering, in each case measured in net revenues(i) per revenue day, or time-charter equivalent (TCE) rates, before off-hire bunker expenses:
Three Months Ended | |||||||||||||||||||||
Time | |||||||||||||||||||||
Suezmax revenue days | 453 | 322 | 90 | ||||||||||||||||||
Suezmax TCE per revenue day | |||||||||||||||||||||
Aframax revenue days | — | — | 75 | ||||||||||||||||||
Aframax TCE per revenue day | — | — | |||||||||||||||||||
Spot Fleet | |||||||||||||||||||||
Suezmax revenue days | 2,071 | 2,390 | 2,415 | ||||||||||||||||||
Suezmax spot TCE per revenue day (iii) | |||||||||||||||||||||
Aframax revenue days | 1,723 | 1,929 | 1,752 | ||||||||||||||||||
Aframax spot TCE per revenue day (iv) | |||||||||||||||||||||
LR2 revenue days | 953 | 743 | 815 | ||||||||||||||||||
LR2 spot TCE per revenue day (v) | |||||||||||||||||||||
Total Fleet | |||||||||||||||||||||
Suezmax revenue days | 2,524 | 2,712 | 2,505 | ||||||||||||||||||
Suezmax TCE per revenue day | |||||||||||||||||||||
Aframax revenue days | 1,723 | 1,929 | 1,827 | ||||||||||||||||||
Aframax TCE per revenue day | |||||||||||||||||||||
LR2 revenue days | 953 | 743 | 815 | ||||||||||||||||||
LR2 TCE per revenue day |
- Net revenues is a non-GAAP financial measure. Please refer to "Definitions and Non-GAAP Financial Measures" for a definition of this term.
- Revenue days are the total number of calendar days the Company's vessels were in its possession during a period, less the total number of off-hire days during the period associated with major repairs, dry dockings or special or intermediate surveys. Consequently, revenue days represent the total number of days available for the vessel to earn revenue. Idle days, which are days when the vessel is available to earn revenue but is not employed, are included in revenue days.
- Includes vessels trading in the Teekay Suezmax RSA, Teekay Suezmax Classic RSA and non-pool voyage charters.
- Prior to
January 1, 2020 , includes vessels trading in the Teekay Aframax RSA, Teekay Aframax Classic RSA, non-pool voyage charters and full service lightering voyages. Subsequent toJanuary 1, 2020 , includes Aframax vessels trading in the Teekay Aframax RSA, non-pool voyage charters and full service lightering voyages. - Prior to
January 1, 2020 , includes vessels trading in the Teekay Taurus RSA and non-pool voyage charters. Subsequent toJanuary 1, 2020 , includes LR2 vessels trading in the Teekay Aframax RSA, non-pool voyage charters, and full service lightering voyages.
Second Quarter of 2020 Spot Tanker Rates Update
Below is Teekay Tankers’ spot tanker fleet update for the second quarter of 2020 to-date:
- The portion of the Suezmax fleet trading on the spot market has secured TCE rates per revenue day of approximately
$52,100 on average, with 69 percent of the available days fixed(1); and - The portion of the Aframax and LR2 fleet trading on the spot market has secured TCE rates per revenue day of approximately
$33,600 on average, with 62 percent of the available days fixed(2)(3).
(1) Combined average TCE rate includes Teekay Suezmax RSA, Teekay Suezmax Classic RSA and non-pool voyage charters.
(2) Combined average TCE rate includes Teekay Aframax RSA, non-pool voyage charters and full service lightering voyages.
(3) As of
Teekay Tankers’ Fleet
The following table summarizes the Company’s fleet as of
Owned and Leased Vessels | Chartered-in Vessels | Total | |
Fixed-rate: | |||
Suezmax Tankers | 10 | — | 10 |
Aframax Tankers(i) | 1 | — | 1 |
LR2 Product Tanker | 1 | — | 1 |
Total Fixed-Rate Fleet | 12 | — | 12 |
Spot-rate: | |||
Suezmax Tankers | 16 | — | 16 |
Aframax Tankers(ii) | 16 | 2 | 18 |
LR2 Product Tankers(iii) | 8 | 2 | 10 |
VLCC Tanker(iv) | 1 | — | 1 |
Total Spot Fleet | 41 | 4 | 45 |
Total Tanker Fleet | 53 | 4 | 57 |
STS Support Vessels | — | 3 | 3 |
Total | 53 | 7 | 60 |
- One additional time charter-out contract has been secured and is expected to commence in
June 2020 . - Includes two Aframax tankers with charter-in contracts that are scheduled to expire in
March 2021 andSeptember 2021 , respectively, one with an option to extend for one additional year. - Includes two LR2 product tankers with charter-in contracts that are scheduled to expire in
January 2021 , each with an option to extend for one additional year. - The Company’s ownership interest in this vessel is 50 percent.
Liquidity Update
As at
Conference Call
The Company plans to host a conference call on
- By dialing (800) 239-9838 or (647) 484-0478, if outside of
North America , and quoting conference ID code 4141060. - By accessing the webcast, which will be available on Teekay Tankers’ website at www.teekay.com (the archive will remain on the website for a period of one year).
An accompanying First Quarter 2020 Earnings Presentation will also be available at www.teekay.com in advance of the conference call start time.
About
Teekay Tankers’ Class A common stock trades on the
For Investor Relations enquiries contact:
Tel: +1 (604) 609-2963
Website: www.teekay.com
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the
Non-GAAP Financial Measures
Adjusted net income excludes items of income or loss from GAAP net income that are typically excluded by securities analysts in their published estimates of the Company’s financial results. The Company believes that certain investors use this information to evaluate the Company’s financial performance, as does management. Please refer to Appendix A of this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP measure reflected in the Company’s consolidated financial statements.
Adjusted EBITDA represents net income before interest, taxes, and depreciation and amortization and is adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include foreign exchange gains and losses, gains and losses on sale of vessels, unrealized credit loss adjustments, unrealized gains and losses on derivative instruments and any write-offs and certain other income or expenses. Adjusted EBITDA also excludes realized gains or losses on interest rate swaps as management, in assessing the Company's performance, views these gains or losses as an element of interest expense and realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments. Consolidated Adjusted EBITDA represents Adjusted EBITDA from vessels that are consolidated on the Company's financial statements. Adjusted EBITDA from Equity-Accounted Joint Venture represents the Company's proportionate share of Adjusted EBITDA from its equity-accounted joint venture, and as a result, the Company does not have the unilateral ability to determine whether the cash generated by its equity-accounted joint venture is retained within the entity in which the Company holds the equity-accounted joint venture or distributed to the Company and other owners. In addition, the Company does not control the timing of any such distributions to the Company and other owners. Adjusted EBITDA is a non-GAAP financial measure used by certain investors and management to measure the operational performance of companies. Total Adjusted EBITDA represents Consolidated Adjusted EBITDA plus Adjusted EBITDA from Equity-Accounted Joint Venture. Please refer to Appendices C and D of this release for reconciliations of Adjusted EBITDA to net income and equity income, respectively, which are the most directly comparable GAAP measures reflected in the Company’s consolidated financial statements.
Free cash flow (FCF) represents net income, plus depreciation and amortization, unrealized losses from derivative instruments, loss on sales of vessels, equity loss from the equity-accounted joint venture, and any write-offs and certain other non-cash non-recurring items, less unrealized gains from derivative instruments, gain on sales of vessels, equity income from the equity-accounted joint venture and certain other non-cash items. The Company includes FCF from equity-accounted joint venture as a component of its FCF. FCF from the equity-accounted joint venture represents the Company’s proportionate share of FCF from its equity-accounted joint venture. The Company does not control its equity-accounted joint venture, and as a result, the Company does not have the unilateral ability to determine whether the cash generated by its equity-accounted joint venture is retained within the entity in which the Company holds the equity-accounted joint venture or distributed to the Company and other owners. In addition, the Company does not control the timing of such distributions to the Company and other owners. Consequently, readers are cautioned when using FCF as a liquidity measure as the amount contributed from FCF from the equity-accounted joint venture may not be available to the Company in the periods such FCF is generated by the equity-accounted joint venture. FCF is a non-GAAP financial measure used by certain investors and management to evaluate the Company’s financial and operating performance and to assess the Company’s ability to generate cash sufficient to repay debt, pay dividends and undertake capital and dry-dock expenditures. Please refer to Appendix B to this release for a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP financial measure reflected in the Company’s consolidated financial statements.
Net revenues represent revenues less voyage expenses. Because the amount of voyage expenses the Company incurs for a particular charter depends upon the type of the charter, the Company uses net revenues to improve the comparability between periods of reported revenues that are generated by the different types of charters and contracts. The Company principally uses net revenues, a non-GAAP financial measure, because the Company believes it provides more meaningful information about the deployment of the Company's vessels and their performance than does revenues, the most directly comparable financial measure under GAAP.
Summary Consolidated Statements of Income
(in thousands of
Three Months Ended | |||||||||||||||||
2020 | 2019 (1) | 2019 (1) | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||
Voyage charter revenues (2) | 317,478 | 289,857 | 222,077 | ||||||||||||||
Time-charter revenues | 15,567 | 10,680 | 3,410 | ||||||||||||||
Other revenues (3) | 8,855 | 10,768 | 12,674 | ||||||||||||||
Total revenues | 341,900 | 311,305 | 238,161 | ||||||||||||||
Voyage expenses (2) | (119,241 | ) | (109,031 | ) | (102,999 | ) | |||||||||||
Vessel operating expenses | (50,649 | ) | (51,875 | ) | (54,587 | ) | |||||||||||
Time-charter hire expenses | (9,879 | ) | (12,312 | ) | (9,448 | ) | |||||||||||
Depreciation and amortization | (29,632 | ) | (31,943 | ) | (29,865 | ) | |||||||||||
General and administrative expenses | (9,286 | ) | (8,992 | ) | (9,165 | ) | |||||||||||
Loss and write-down on sale of vessels | (3,087 | ) | (5,544 | ) | — | ||||||||||||
Income from operations | 120,126 | 91,608 | 32,097 | ||||||||||||||
Interest expense | (15,135 | ) | (15,679 | ) | (16,942 | ) | |||||||||||
Interest income | 256 | 147 | 365 | ||||||||||||||
Realized and unrealized (loss) gain | |||||||||||||||||
on derivative instruments (4) | (827 | ) | 205 | (847 | ) | ||||||||||||
Equity income (5) | 1,940 | 1,693 | 753 | ||||||||||||||
Other income (expense) | 1,143 | (487 | ) | (365 | ) | ||||||||||||
Net income before income tax | 107,503 | 77,487 | 15,061 | ||||||||||||||
Income tax expenses (6) | (664 | ) | (14,415 | ) | (2,614 | ) | |||||||||||
Net income | 106,839 | 63,072 | 12,447 | ||||||||||||||
Earnings per share attributable | |||||||||||||||||
to shareholders of | |||||||||||||||||
- Basic (7) | 3.17 | 1.88 | 0.37 | ||||||||||||||
- Diluted (7) | 3.15 | 1.86 | 0.37 | ||||||||||||||
Weighted-average number of total common | |||||||||||||||||
shares outstanding | |||||||||||||||||
- Basic (7) | 33,669,967 | 33,638,082 | 33,584,778 | ||||||||||||||
- Diluted (7) | 33,946,292 | 33,948,512 | 33,609,540 | ||||||||||||||
Number of outstanding shares of common stock at the end of the period (7) | 33,721,161 | 33,654,576 | 33,623,800 |
- Voyage expenses incurred that are recoverable from the Company's customers in connection with its voyage charter contracts are reflected in voyage charter revenues and voyage expenses. The Company recast the results for the three months ended
March 2019 to be consistent with the presentation in the 2019 20-F and this report for the three months endedMarch 31, 2020 . This had the impact of increasing both voyage charter revenues and voyage expenses by$5.7 million for the three months endedMarch 31, 2019 .
- Voyage charter revenues include revenues earned from full service lightering activities. Voyage expenses include certain costs associated with full service lightering activities, which include: short-term in-charter expenses, bunker fuel expenses and other port expenses totaling
$18.7 million ,$12.0 million and$11.4 million for the three months endedMarch 31, 2020 ,December 31, 2019 andMarch 31, 2019 , respectively.
- Other revenues include lightering support and liquefied natural gas services revenue, revenue earned from the Company's responsibilities in employing the vessels subject to the RSAs, and bunker commissions earned. In
April 2020 , the Company sold a portion of its oil and gas ship-to-ship transfer support business, including its gas terminal management services.
- Includes realized gains on interest rate swaps of
$0.5 million ,$0.4 million and$1.0 million for the three months endedMarch 31, 2020 ,December 31, 2019 andMarch 31, 2019 , respectively. The Company also recognized realized gains of$1.1 million for the three months endedDecember 31, 2019 , relating to its forward freight agreements.
- Equity income relates to the Company’s 50 percent interest in the
High-Q Investment Ltd. (High-Q) joint venture, which owns one VLCC tanker.
- Income tax expenses for the three months ended
December 31, 2019 includes adjustments to freight tax accruals of$10.9 million related to periods prior to 2019.
- The number of shares and per share amounts, including comparative figures, have been adjusted to reflect the changes resulting from the one-for-eight reverse stock split which took effect on
November 25, 2019 .
Summary Consolidated Balance Sheets
(in thousands of
As at | As at | |||||||
2020 | 2019 | |||||||
(unaudited) | (unaudited) | |||||||
ASSETS | ||||||||
Cash and cash equivalents | 203,325 | 88,824 | ||||||
Restricted cash | 3,318 | 3,071 | ||||||
Accounts receivable | 108,326 | 95,648 | ||||||
Bunker and lube oil inventory | 50,430 | 49,790 | ||||||
Prepaid expenses | 11,841 | 10,288 | ||||||
Due from affiliates | 463 | 697 | ||||||
Current portion of derivative assets | — | 577 | ||||||
Assets held for sale (1) | 50,818 | 65,458 | ||||||
Accrued revenue | 66,664 | 106,872 | ||||||
Total current assets | 495,185 | 421,225 | ||||||
Restricted cash – long-term | 3,437 | 3,437 | ||||||
Vessels and equipment – net | 1,157,003 | 1,223,085 | ||||||
Vessels related to finance leases – net | 519,210 | 527,081 | ||||||
Operating lease right-of-use assets | 15,511 | 19,560 | ||||||
Investment in and advances to equity-accounted joint venture | 28,051 | 28,112 | ||||||
Derivative assets | — | 82 | ||||||
Other non-current assets | 1,667 | 1,923 | ||||||
Intangible assets – net | 2,401 | 2,545 | ||||||
2,426 | 2,426 | |||||||
Total assets | 2,224,891 | 2,229,476 | ||||||
LIABILITIES AND EQUITY | ||||||||
Accounts payable and accrued liabilities | 106,820 | 130,713 | ||||||
Short-term debt | 55,000 | 50,000 | ||||||
Current portion of long-term debt | 29,910 | 43,573 | ||||||
Current portion of derivative liabilities | 234 | 86 | ||||||
Current obligations related to finance leases | 25,775 | 25,357 | ||||||
Current portion of operating lease liabilities | 14,049 | 16,290 | ||||||
Liabilities associated with assets held for sale (1) | 2,535 | 2,980 | ||||||
Due to affiliates | 4,677 | 2,139 | ||||||
Other current liabilities | 5,923 | 8,567 | ||||||
Total current liabilities | 244,923 | 279,705 | ||||||
Long-term debt | 446,766 | 516,106 | ||||||
Long-term obligations related to finance leases | 382,905 | 389,431 | ||||||
Long-term operating lease liabilities | 1,462 | 3,270 | ||||||
Other long-term liabilities | 51,114 | 51,044 | ||||||
Derivative liabilities | 494 | — | ||||||
Equity | 1,097,227 | 989,920 | ||||||
Total liabilities and equity | 2,224,891 | 2,229,476 | ||||||
Net debt (2) | 730,276 | 929,135 |
- In
January 2020 , the Company reached an agreement to sell a portion of its oil and gas ship-to-ship transfer support business, which also provides gas terminal management services, for$26 million , subject to adjustment for the final amounts of cash and other working capital present on the closing date. The numbers in these financial statements have been adjusted to reflect the pending sale. The sale of a portion of the ship-to-ship support services business and gas terminal management business, including cash, cash equivalents and restricted cash of$2.4 million and$1.5 million , is classified as held for sale as atMarch 31, 2020 andDecember 31, 2019 , respectively. This transaction closed onApril 30, 2020 . Also included in assets held for sale atMarch 31, 2020 is one Suezmax vessel (December 31, 2019 : two Suezmax vessels).
- Net debt is a non-GAAP financial measure and represents short-term, current and long-term debt and current and long-term obligations related to finance leases less cash and cash equivalents and restricted cash.
Summary Consolidated Statements of Cash Flows
(in thousands of
Three Months Ended | |||||||||||||
2020 | 2019 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||
Cash, cash equivalents and restricted cash provided by (used for) | |||||||||||||
OPERATING ACTIVITIES | |||||||||||||
Net income | 106,839 | 12,447 | |||||||||||
Non-cash items: | |||||||||||||
Depreciation and amortization | 29,632 | 29,865 | |||||||||||
Loss and write-down on sale of vessels | 3,087 | — | |||||||||||
Unrealized loss on derivative instruments | 1,301 | 1,788 | |||||||||||
Equity income | (1,940 | ) | (753 | ) | |||||||||
Income tax expense | 1,439 | 2,569 | |||||||||||
Other | 744 | 4,473 | |||||||||||
Change in operating assets and liabilities | (1,308 | ) | 6,265 | ||||||||||
Expenditures for dry docking | (1,109 | ) | (10,433 | ) | |||||||||
Net operating cash flow | 138,685 | 46,221 | |||||||||||
FINANCING ACTIVITIES | |||||||||||||
Proceeds from short-term debt | 135,000 | 30,000 | |||||||||||
Proceeds from long-term debt, net of issuance costs | 479,091 | 434 | |||||||||||
Scheduled repayments of long-term debt | (5,728 | ) | (25,400 | ) | |||||||||
Prepayments of long-term debt | (557,368 | ) | (20,000 | ) | |||||||||
Repayments of short-term debt | (130,000 | ) | (5,000 | ) | |||||||||
Scheduled repayments of obligations related to finance leases | (6,108 | ) | (5,537 | ) | |||||||||
Net financing cash flow | (85,113 | ) | (25,503 | ) | |||||||||
INVESTING ACTIVITIES | |||||||||||||
Proceeds from sale of vessels | 60,915 | — | |||||||||||
Expenditures for vessels and equipment | (842 | ) | (656 | ) | |||||||||
Loan repayments from equity-accounted joint venture | 2,000 | — | |||||||||||
Net investing cash flow | 62,073 | (656 | ) | ||||||||||
Increase in cash, cash equivalents and restricted cash | 115,645 | 20,062 | |||||||||||
Cash, cash equivalents and restricted cash, beginning of the period | 96,790 | 60,507 | |||||||||||
Cash, cash equivalents and restricted cash, end of the period | 212,435 | 80,569 |
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income
(in thousands of
Three Months Ended | |||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||
$ | $ Per Share(1) | $ | $ Per Share(1) | ||||||||||||||||||||||||||||||
Net income - GAAP basis | 106,839 | 12,447 | |||||||||||||||||||||||||||||||
Add specific items affecting net income: | |||||||||||||||||||||||||||||||||
Loss and write-down on sale of vessels | 3,087 | — | — | ||||||||||||||||||||||||||||||
Unrealized loss on derivative instruments (2) | 1,301 | 1,788 | |||||||||||||||||||||||||||||||
Other (3) | (1,246 | ) | ( | ) | 412 | ||||||||||||||||||||||||||||
Total adjustments | 3,142 | 2,200 | |||||||||||||||||||||||||||||||
Adjusted net income attributable to shareholders of | |||||||||||||||||||||||||||||||||
109,981 | $3.27 | 14,647 | $0.44 |
- Basic per share amounts.
- Reflects unrealized gains or losses due to the changes in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including unrealized gains or losses on interest rate swaps and forward freight agreements.
- The amount recorded for the three months ended
March 31, 2020 primarily relates to unrealized foreign exchange gains, realized gains from swap termination settlement and debt issuance costs which were written off in connection with the refinancing of the Company's debt facilities inJanuary 2020 . The amount recorded for the three months endedMarch 31, 2019 primarily relates to unrealized foreign exchange losses.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Free Cash Flow
(in thousands of
Three Months Ended | ||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||
Net income - GAAP basis | 106,839 | 12,447 | ||||||||||||||||
Add: | ||||||||||||||||||
Depreciation and amortization | 29,632 | 29,865 | ||||||||||||||||
Proportionate share of free cash flow from equity-accounted joint venture | 2,415 | 1,207 | ||||||||||||||||
Unrealized loss on derivative instruments | 1,301 | 1,788 | ||||||||||||||||
Loss and write-down on sale of vessels | 3,087 | — | ||||||||||||||||
Less: | ||||||||||||||||||
Equity income (1) | (1,940 | ) | (753 | ) | ||||||||||||||
Free cash flow | 141,334 | 44,554 | ||||||||||||||||
Weighted-average number of common shares outstanding for the period - basic | 33,669,967 | 33,584,778 |
(1) Equity income relates to the Company’s 50 percent interest in the High-Q joint venture, which owns one VLCC tanker.
Appendix C - Reconciliation of Non-GAAP Financial Measures
Total Adjusted EBITDA
(in thousands of
Three Months Ended | ||||||||
(unaudited) | (unaudited) | |||||||
Net income - GAAP basis | 106,839 | 12,447 | ||||||
Depreciation and amortization | 29,632 | 29,865 | ||||||
Interest expense, net of interest income | 14,879 | 16,577 | ||||||
Income tax expense | 664 | 2,614 | ||||||
EBITDA | 152,014 | 61,503 | ||||||
Add (subtract) specific income statement items affecting EBITDA: | ||||||||
Foreign exchange (gain) loss | (1,135 | ) | 412 | |||||
Loss and write-down on sale of vessels | 3,087 | — | ||||||
Realized gain on interest rate swaps | (523 | ) | (954 | ) | ||||
Unrealized loss on derivative instruments | 1,301 | 1,788 | ||||||
Equity income | (1,940 | ) | (753 | ) | ||||
Consolidated adjusted EBITDA | 152,804 | 61,996 | ||||||
Adjusted EBITDA from equity-accounted joint venture (See Appendix D) | 2,566 | 1,432 | ||||||
Total Adjusted EBITDA | 155,370 | 63,428 |
Appendix D - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA from Equity-Accounted Joint Venture
(in thousands of
Three Months Ended | ||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||
At | Company's | At | Company's | |||||||||||||||||||
100% | Portion (1) | 100% | Portion (1) | |||||||||||||||||||
Revenues | 5,836 | 2,918 | 3,210 | 1,605 | ||||||||||||||||||
Vessel and other operating expenses | (705 | ) | (353 | ) | (490 | ) | (245 | ) | ||||||||||||||
Depreciation and amortization | (951 | ) | (475 | ) | (908 | ) | (454 | ) | ||||||||||||||
Income from vessel operations of equity-accounted joint venture | 4,180 | 2,090 | 1,812 | 906 | ||||||||||||||||||
Net interest expense | (301 | ) | (151 | ) | (450 | ) | (225 | ) | ||||||||||||||
Other | 1 | 1 | 145 | 72 | ||||||||||||||||||
Equity income of equity-accounted joint venture | 3,880 | 1,940 | 1,507 | 753 | ||||||||||||||||||
Equity income of equity-accounted joint venture | 3,880 | 1,940 | 1,507 | 753 | ||||||||||||||||||
Depreciation and amortization | 951 | 475 | 908 | 454 | ||||||||||||||||||
Interest expense, net of interest income | 301 | 151 | 450 | 225 | ||||||||||||||||||
EBITDA from equity-accounted joint venture | 5,132 | 2,566 | 2,865 | 1,432 | ||||||||||||||||||
Adjusted EBITDA from equity-accounted joint venture | 5,132 | 2,566 | 2,865 | 1,432 |
(1) The Company’s proportionate share of its equity-accounted joint venture is 50 percent.
Forward Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including, among other things, statements regarding: crude oil and refined product tanker market fundamentals, including the balance of supply and demand in the oil and tanker markets and the volatility of such markets; forecasts of worldwide tanker fleet growth or contraction and newbuilding tanker deliveries and vessel scrapping; estimated growth in global oil demand and supply; future tanker rates; future OPEC+ oil production or oil supply cuts; floating storage demand; the impact of the COVID-19 outbreak and related developments on the Company's business and tanker market fundamentals; the Company's forward fixed rate revenues; future free cash flow breakevens; timing for the commencement of a time charter-out contract; the Company’s continued operation of its oil ship-to-ship transfer support services in
Source:
2020 GlobeNewswire, Inc., source