Highlights
- Reported GAAP net loss of
$44.4 million , or$1.32 per share, and adjusted net income(1) of$3.1 million , or$0.09 per share, in the third quarter of 2020 (excluding$45.0 million of asset write-downs and other items listed in Appendix A to this release). - Total Adjusted EBITDA(1) of
$46.2 million in the third quarter of 2020. - Generated approximately
$31 million of free cash flow(1) in the third quarter of 2020, contributing to over a$47 million reduction in net debt(2) and maintaining a strong liquidity position of approximately$470 million as ofSeptember 30, 2020 . - Secured a one-year time charter-out contract for an Aframax tanker in the third quarter; approximately 20 percent of the fleet is currently operating under fixed-rate charters at an average rate of
$36,300 per day. - In
October 2020 , repurchased two Aframax tankers that were previously on sale-leasebacks for$29.6 million . - In
August 2020 , completed refinancing of four Suezmax tankers with a new 3-year,$67 million term loan;Teekay Tankers now has no debt maturities until 2023.
Consolidated Financial Summary
Three Months Ended | |||||||||||
(in thousands of | 2020 | 2020 | 2019 (3) | ||||||||
GAAP FINANCIAL COMPARISON | |||||||||||
Total revenues | 170,240 | 246,492 | 187,444 | ||||||||
(Loss) income from operations | (29,193 | ) | 92,986 | (4,873 | ) | ||||||
Net (loss) income | (44,434 | ) | 98,198 | (19,850 | ) | ||||||
(Loss) earnings per share (4) | (1.32 | ) | 2.91 | (0.59 | ) | ||||||
NON-GAAP FINANCIAL COMPARISON | |||||||||||
Total Adjusted EBITDA (1) | 46,248 | 124,241 | 27,837 | ||||||||
Adjusted net income (loss) (1) | 3,132 | 80,700 | (21,173 | ) | |||||||
Adjusted earnings (loss) per share (1)(4) | 0.09 | 2.39 | (0.63 | ) | |||||||
Free cash flow (1) | 31,178 | 125,799 | 11,735 |
(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
Third Quarter of 2020 Compared to Second Quarter of 2020
GAAP net loss and non-GAAP adjusted net income for the third quarter of 2020, compared to the second quarter of 2020, primarily reflects lower average spot tanker rates and a higher number of scheduled drydockings during the third quarter of 2020. GAAP net loss in the third quarter of 2020 also included a
Third Quarter of 2020 Compared to Third Quarter of 2019
GAAP net loss for the third quarter of 2020 increased, while non-GAAP adjusted net income improved compared to the same period of the prior year. These measures were positively impacted primarily by higher revenues from several fixed-rate charters secured during the past year at higher rates and higher average spot tanker rates in the third quarter of 2020, partially offset by the sale of four Suezmax tankers during
CEO Commentary
“Despite weaker spot tanker rates and a heavy drydock schedule during the third quarter of 2020,
"Following three strong quarters, spot tanker rates came under pressure during the third quarter of 2020 as a result of seasonal weakness, record OPEC+ production cuts resulting from reduced oil demand related to the pandemic, and the unwinding of floating storage. We were able to successfully mitigate the impact of these weaker rates with 22 percent of our fleet on fixed-rate charters during the third quarter at an average rate of
“Increasing our financial strength has been one of our strategic priorities, and over the past year, we have transformed our balance sheet," continued
Summary of Recent Events
In
In
In
Tanker Market
Crude tanker spot rates fell during the third quarter of 2020 due to a combination of seasonal weakness, reduced oil demand due to the impact of COVID-19, and low trade volumes as a result of oil supply cuts by the OPEC+ group of producers. The return of some ships to the spot trading fleet from floating storage further compounded the weakness in rates.
Global oil demand has been gradually recovering since the low point in
The OPEC+ group of oil producers, who implemented supply cuts of 9.7 mb/d in
Typically, spot tanker rates would find some support during the winter months due to the seasonal impacts of higher oil demand and an increase in vessel delays due to poor weather and shorter daylight hours. While these seasonal factors are still expected to be positive for the tanker market, the potential increase in spot rates this winter is expected to be tempered by the underlying imbalance between tanker supply and demand. Mid-size tankers could find some support from an increase in Libyan crude oil production, which is expected to reach 1.0 mb/d during the fourth quarter of 2020, having averaged only 0.1 mb/d during the third quarter of 2020. However, this could be counter-balanced by a potential slowdown in demand due to a resurgence of COVID-19 cases in many regions and the potential for fresh restrictions and lockdowns over the winter months.
Looking ahead, the Company expects that tanker demand will continue to recover during 2021 as oil demand increases and oil inventories are brought back to more normal levels. However, the timing of this recovery remains uncertain and depends to a large extent on how the COVID-19 pandemic evolves over the coming months. The OPEC+ group is scheduled to return a further 2.0 mb/d of oil supply to the market from
Fleet supply fundamentals continue to look very positive due to a significantly reduced level of newbuild ordering, a diminishing tanker orderbook, and the potential for higher scrapping due to an aging world fleet. As of
In summary, the tanker market has come off the highs seen during the first half of the year, and the next few months look to be challenging. However, tanker demand should continue to gradually recover through the course of 2021 which, coupled with a positive fleet supply outlook, should help the tanker market begin to rebalance.
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 and fees associated with vessels exiting the RSAs:
Three Months Ended | ||||||||||||
Time | ||||||||||||
Suezmax revenue days | 831 | 794 | 92 | |||||||||
Suezmax TCE per revenue day | $ | 41,216 | $ | 37,740 | $ | 20,488 | ||||||
Aframax revenue days | 184 | 91 | — | |||||||||
Aframax TCE per revenue day | $ | 24,983 | $ | 22,925 | — | |||||||
LR2 revenue days | 79 | 71 | — | |||||||||
LR2 TCE per revenue day | $ | 28,638 | $ | 25,463 | — | |||||||
Spot Fleet | ||||||||||||
Suezmax revenue days | 1,388 | 1,544 | 2,576 | |||||||||
Suezmax spot TCE per revenue day (iii) | $ | 22,269 | $ | 46,484 | $ | 16,321 | ||||||
Aframax revenue days | 1,534 | 1,632 | 1,821 | |||||||||
Aframax spot TCE per revenue day (iv) | $ | 14,802 | $ | 29,569 | $ | 14,850 | ||||||
LR2 revenue days | 865 | 876 | 781 | |||||||||
LR2 spot TCE per revenue day (v) | $ | 14,400 | $ | 29,621 | $ | 14,686 | ||||||
Total Fleet | ||||||||||||
Suezmax revenue days | 2,219 | 2,338 | 2,668 | |||||||||
Suezmax TCE per revenue day | $ | 29,366 | $ | 43,516 | $ | 16,465 | ||||||
Aframax revenue days | 1,718 | 1,723 | 1,821 | |||||||||
Aframax TCE per revenue day | $ | 15,892 | $ | 29,218 | $ | 14,850 | ||||||
LR2 revenue days | 944 | 947 | 781 | |||||||||
LR2 TCE per revenue day | $ | 15,592 | $ | 29,309 | $ | 14,686 |
- 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.
Fourth Quarter of 2020 Tanker Performance Update
The following table summarizes Teekay Tankers’ TCE rates fixed to-date in the fourth quarter of 2020 for both its spot-traded fleet only and its combined spot-traded and fixed-rate fleets:
To-Date Spot Tanker Rates | Combined To-Date Spot Tanker and Fixed-Rate Contract Rates | |||||||
TCE Rates Per Day | % Fixed | TCE Rates Per Day | % Fixed | |||||
Suezmax | 49 | % | 62 | % | ||||
Aframax (1) | 45 | % | 54 | % | ||||
LR2 (2) | 44 | % | 52 | % |
(1) Rates and percentage booked to-date include Aframax RSA, full service lightering (FSL) and non-pool voyage charters for all Aframax vessels.
(2) Rates and percentage booked to-date include Aframax RSA, FSL and non-pool voyage charters for all LR2 vessels, whether trading in the clean or dirty spot market.
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 | 7 | — | 7 |
Aframax Tankers | 3 | — | 3 |
LR2 Product Tanker | 1 | — | 1 |
Total Fixed-Rate Fleet | 11 | — | 11 |
Spot-rate: | |||
Suezmax Tankers | 19 | — | 19 |
Aframax Tankers(i) | 14 | 2 | 16 |
LR2 Product Tankers(ii) | 8 | 2 | 10 |
VLCC Tanker(iii) | 1 | — | 1 |
Total Spot Fleet | 42 | 4 | 46 |
Total Tanker Fleet | 53 | 4 | 57 |
STS Support Vessels | — | 3 | 3 |
Total | 53 | 7 | 60 |
- Includes two Aframax tankers with charter-in contracts that are scheduled to expire in
March 2021 andSeptember 2021 , respectively, one with an option for the Company 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 for the Company 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) 367-2403 or (647) 490-5367, if outside of
North America , and quoting conference ID code 9018310. - 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 Third Quarter of 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 (loss) excludes items of income or loss from GAAP net (loss) 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 (loss) income, the most directly comparable GAAP measure reflected in the Company’s consolidated financial statements.
Adjusted EBITDA represents net (loss) 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 (loss) 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 (loss) 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 the 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 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 (loss) income, the most directly comparable GAAP financial measure reflected in the Company’s consolidated financial statements.
Net revenues represents revenues less voyage expenses. Because the amount of voyage expenses the Company incurs for a particular charter depends on 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 (Loss) Income
(in thousands of
Three Months Ended | Nine Months Ended | |||||||||||||||||
2020 | 2020 | 2019 (1) | 2020 | 2019 (1) | ||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Voyage charter revenues (2) | 125,819 | 207,926 | 178,174 | 651,223 | 591,746 | |||||||||||||
Time-charter revenues | 42,180 | 34,986 | 1,909 | 92,733 | 6,815 | |||||||||||||
Other revenues (3) | 2,241 | 3,580 | 7,361 | 14,676 | 34,051 | |||||||||||||
Total revenues | 170,240 | 246,492 | 187,444 | 758,632 | 632,612 | |||||||||||||
Voyage expenses (2) | (57,777 | ) | (61,558 | ) | (92,866 | ) | (238,576 | ) | (293,263 | ) | ||||||||
Vessel operating expenses | (46,336 | ) | (46,218 | ) | (48,539 | ) | (143,203 | ) | (156,726 | ) | ||||||||
Time-charter hire expenses | (9,070 | ) | (9,296 | ) | (10,637 | ) | (28,245 | ) | (30,877 | ) | ||||||||
Depreciation and amortization | (29,992 | ) | (29,546 | ) | (31,536 | ) | (89,170 | ) | (92,059 | ) | ||||||||
General and administrative expenses | (9,887 | ) | (9,784 | ) | (8,739 | ) | (28,957 | ) | (27,412 | ) | ||||||||
(Write-down) and (loss) gain on sale of assets (4) | (44,973 | ) | 2,896 | — | (45,164 | ) | — | |||||||||||
Restructuring charge | (1,398 | ) | — | — | (1,398 | ) | — | |||||||||||
(Loss) income from operations | (29,193 | ) | 92,986 | (4,873 | ) | 183,919 | 32,275 | |||||||||||
Interest expense | (12,553 | ) | (13,492 | ) | (16,134 | ) | (41,180 | ) | (49,683 | ) | ||||||||
Interest income | 337 | 567 | 138 | 1,160 | 724 | |||||||||||||
Realized and unrealized (loss) gain on derivative instruments (5) | (414 | ) | (589 | ) | 1,453 | (1,830 | ) | (1,172 | ) | |||||||||
Equity income (6) | 46 | 3,188 | 68 | 5,174 | 652 | |||||||||||||
Other (expense) income | (470 | ) | 940 | 933 | 1,613 | 1,182 | ||||||||||||
Net (loss) income before income tax | (42,247 | ) | 83,600 | (18,415 | ) | 148,856 | (16,022 | ) | ||||||||||
Income tax (expense) recovery (7) | (2,187 | ) | 14,598 | (1,435 | ) | 11,747 | (5,688 | ) | ||||||||||
Net (loss) income | (44,434 | ) | 98,198 | (19,850 | ) | 160,603 | (21,710 | ) | ||||||||||
(Loss) earnings per share attributable | ||||||||||||||||||
to shareholders of | ||||||||||||||||||
- Basic (8) | (1.32 | ) | 2.91 | (0.59 | ) | 4.76 | (0.65 | ) | ||||||||||
- Diluted (8) | (1.32 | ) | 2.89 | (0.59 | ) | 4.73 | (0.65 | ) | ||||||||||
Weighted-average number of total common | ||||||||||||||||||
shares outstanding | ||||||||||||||||||
- Basic (8) | 33,738,143 | 33,727,978 | 33,623,608 | 33,712,124 | 33,610,936 | |||||||||||||
- Diluted (8) | 33,738,143 | 33,978,730 | 33,623,608 | 33,942,191 | 33,610,936 | |||||||||||||
Number of outstanding shares of common stock at the end of the period (8) | 33,738,143 | 33,738,143 | 33,623,608 | 33,738,143 | 33,623,608 |
- 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 and nine months ended
September 2019 to be consistent with the presentation in the 2019 20-F and this report for the three and nine months endedSeptember 30, 2020 . This had the impact of increasing both voyage charter revenues and voyage expenses by$5.1 million and$15.5 million , respectively, for the three and nine months endedSeptember 30, 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
$10.8 million ,$12.7 million and$9.0 million for the three months endedSeptember 30, 2020 ,June 30, 2020 andSeptember 30, 2019 , respectively, and$42.2 million and$39.9 million for the nine months endedSeptember 30, 2020 andSeptember 30, 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.
- (Write-down) and (loss) gain on sale of assets for the three and nine months ended
September 30, 2020 includes a write-down of$45.0 million relating to five Aframax tankers and the Company's operating lease right-of-use assets, which were written-down to their estimated fair values. (Write-down) and (loss) gain on sale of assets for the nine months endedSeptember 30, 2020 also includes a loss on sale of$2.6 million relating to three Suezmax tankers which were sold in the first quarter of 2020 and a write-down of$0.7 million relating to the Company's operating lease right-of-use assets in the second quarter of 2020, partially offset by a gain on sale of$3.1 million relating to the completion of the sale of the non-US portion of the Company's ship-to-ship support services business, as well as the Company's LNG terminal management business in the second quarter of 2020.
- Includes realized gains on interest rate swaps of nil,
$0.1 million and$0.6 million for the three months endedSeptember 30, 2020 ,June 30, 2020 andSeptember 30, 2019 , respectively, and realized gains of$0.6 million and$2.4 million for the nine months endedSeptember 30, 2020 andSeptember 30, 2019 , respectively. The Company also recognized realized losses of$0.2 million ,$0.2 million and realized gains of$0.4 million for the three months endedSeptember 30, 2020 ,June 30, 2020 andSeptember 30, 2019 , respectively, and realized losses of$0.4 million and realized gains of$0.4 million for the nine months endedSeptember 30, 2020 andSeptember 30, 2019 , respectively, 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 recovery for the three months ended
June 30, 2020 includes a reduction in freight tax accruals of$15.2 million related to periods prior to 2020.
- 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 | As at | |||||||
2020 | 2020 | 2019 | |||||||
(unaudited) | (unaudited) | (unaudited) | |||||||
ASSETS | |||||||||
Cash and cash equivalents | 120,872 | 167,907 | 88,824 | ||||||
Restricted cash | 4,686 | 4,766 | 3,071 | ||||||
Accounts receivable | 46,247 | 88,663 | 95,648 | ||||||
Bunker and lube oil inventory | 33,444 | 30,885 | 49,790 | ||||||
Prepaid expenses | 13,561 | 12,103 | 10,288 | ||||||
Due from affiliates | 3,323 | 2,440 | 697 | ||||||
Current portion of derivative assets | — | — | 577 | ||||||
Assets held for sale (1) | — | — | 65,458 | ||||||
Accrued revenue | 29,410 | 42,153 | 106,872 | ||||||
Total current assets | 251,543 | 348,917 | 421,225 | ||||||
Restricted cash – long-term | 3,437 | 3,437 | 3,437 | ||||||
Vessels and equipment – net | 1,131,742 | 1,161,097 | 1,223,085 | ||||||
Vessels related to finance leases – net | 484,776 | 511,879 | 527,081 | ||||||
Operating lease right-of-use assets | 6,148 | 10,758 | 19,560 | ||||||
Investment in and advances to equity-accounted joint venture | 28,635 | 29,740 | 28,112 | ||||||
Derivative assets | — | — | 82 | ||||||
Other non-current assets | 1,175 | 1,453 | 1,923 | ||||||
Intangible assets – net | 2,122 | 2,259 | 2,545 | ||||||
2,426 | 2,426 | 2,426 | |||||||
Total assets | 1,912,004 | 2,071,966 | 2,229,476 | ||||||
LIABILITIES AND EQUITY | |||||||||
Accounts payable and accrued liabilities | 83,272 | 100,012 | 130,713 | ||||||
Short-term debt | 20,000 | 10,000 | 50,000 | ||||||
Current portion of long-term debt | 10,962 | 27,549 | 43,573 | ||||||
Current portion of derivative liabilities | 755 | 414 | 86 | ||||||
Current obligations related to finance leases | 26,794 | 26,281 | 25,357 | ||||||
Current portion of operating lease liabilities | 7,602 | 10,986 | 16,290 | ||||||
Liabilities associated with assets held for sale (1) | — | — | 2,980 | ||||||
Due to affiliates | 2,932 | 2,091 | 2,139 | ||||||
Other current liabilities | 3,696 | 8,485 | 8,567 | ||||||
Total current liabilities | 156,013 | 185,818 | 279,705 | ||||||
Long-term debt | 204,103 | 285,389 | 516,106 | ||||||
Long-term obligations related to finance leases | 369,278 | 376,238 | 389,431 | ||||||
Long-term operating lease liabilities | 421 | 417 | 3,270 | ||||||
Other long-term liabilities | 29,683 | 27,516 | 51,044 | ||||||
Derivative liabilities | 717 | 789 | — | ||||||
Equity | 1,151,789 | 1,195,799 | 989,920 | ||||||
Total liabilities and equity | 1,912,004 | 2,071,966 | 2,229,476 | ||||||
Net debt (2) | 502,142 | 549,347 | 929,135 |
- On
April 30, 2020 , the Company finalized the sale of a portion of its oil and gas ship-to-ship transfer support business, which also provides gas terminal management services, for$27.1 million . 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$1.5 million , was classified as held for sale as atDecember 31, 2019 . Also included in assets held for sale atDecember 31, 2019 were 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
Nine Months Ended | |||||||||
2020 | 2019 | ||||||||
(unaudited) | (unaudited) | ||||||||
Cash, cash equivalents and restricted cash provided by (used for) | |||||||||
OPERATING ACTIVITIES | |||||||||
Net income (loss) | 160,603 | (21,710 | ) | ||||||
Non-cash items: | |||||||||
Depreciation and amortization | 89,170 | 92,059 | |||||||
Write-down and loss on sale of assets | 45,164 | — | |||||||
Unrealized loss on derivative instruments | 1,948 | 3,960 | |||||||
Equity income | (5,174 | ) | (652 | ) | |||||
Income tax (recovery) expense | (10,951 | ) | 4,181 | ||||||
Other | 3,827 | 3,690 | |||||||
Change in operating assets and liabilities | 72,629 | 18,685 | |||||||
Expenditures for dry docking | (9,405 | ) | (37,430 | ) | |||||
Net operating cash flow | 347,811 | 62,783 | |||||||
FINANCING ACTIVITIES | |||||||||
Proceeds from short-term debt | 235,000 | 125,000 | |||||||
Proceeds from long-term debt, net of issuance costs | 544,872 | 56,788 | |||||||
Scheduled repayments of long-term debt | (10,366 | ) | (76,216 | ) | |||||
Prepayments of long-term debt | (882,495 | ) | (109,688 | ) | |||||
Prepayments of short-term debt | (265,000 | ) | (75,000 | ) | |||||
Proceeds from financing related to sales and leaseback of vessels | — | 63,720 | |||||||
Scheduled repayments of obligations related to finance leases | (18,716 | ) | (18,075 | ) | |||||
Other | (562 | ) | (126 | ) | |||||
Net financing cash flow | (397,267 | ) | (33,597 | ) | |||||
INVESTING ACTIVITIES | |||||||||
Proceeds from sale of assets | 85,892 | — | |||||||
Expenditures for vessels and equipment | (8,881 | ) | (7,210 | ) | |||||
Loan repayments from equity-accounted joint venture | 4,650 | — | |||||||
Net investing cash flow | 81,661 | (7,210 | ) | ||||||
Increase in cash, cash equivalents and restricted cash | 32,205 | 21,976 | |||||||
Cash, cash equivalents and restricted cash, beginning of the period | 96,790 | 60,507 | |||||||
Cash, cash equivalents and restricted cash, end of the period | 128,995 | 82,483 |
Appendix A - Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income (Loss)
(in thousands of
Three Months Ended | |||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||||||
$ | $ Per Share(1) | $ | $ Per Share(1) | $ | $ Per Share(1) | ||||||||||||||||||||||||
Net (loss) income - GAAP basis | (44,434 | ) | ($ | 1.32 | ) | 98,198 | $ | 2.91 | (19,850 | ) | ($ | 0.59 | ) | ||||||||||||||||
Add (subtract) specific items affecting net loss: | |||||||||||||||||||||||||||||
Write-down and (gain) on sale of assets | 44,973 | $ | 1.33 | (2,896 | ) | ($ | 0.09 | ) | — | — | |||||||||||||||||||
Unrealized loss (gain) on derivative instruments (2) | 172 | $ | 0.01 | 475 | $ | 0.02 | (405 | ) | ($ | 0.01 | ) | ||||||||||||||||||
Other (3) | 2,421 | $ | 0.07 | (15,077 | ) | ($ | 0.45 | ) | (918 | ) | ($ | 0.03 | ) | ||||||||||||||||
Total adjustments | 47,566 | $ | 1.41 | (17,498 | ) | ($ | 0.52 | ) | (1,323 | ) | ($ | 0.04 | ) | ||||||||||||||||
Adjusted net income (loss) attributable to | |||||||||||||||||||||||||||||
shareholders of | 3,132 | $ | 0.09 | 80,700 | $ | 2.39 | (21,173 | ) | ($ | 0.63 | ) |
- 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
September 30, 2020 primarily relates to restructuring charges, unrealized foreign exchange losses and debt issuance costs which were written off in connection with the refinancing of one of the Company's debt facilities inAugust 2020 . The amount recorded for the three months endedJune 30, 2020 primarily relates to a reduction to freight tax accruals of prior years and unrealized foreign exchange losses. The amount recorded for the three months endedSeptember 30, 2019 primarily relates to unrealized foreign exchange gains.
Appendix B - Reconciliation of Non-GAAP Financial Measures
Free Cash Flow
(in thousands of
Three Months Ended | |||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||
Net (loss) income - GAAP basis | (44,434 | ) | 98,198 | (19,850 | ) | ||||||
Add: | |||||||||||
Depreciation and amortization | 29,992 | 29,546 | 31,536 | ||||||||
Proportionate share of free cash flow from equity-accounted joint venture | 521 | 3,664 | 522 | ||||||||
Unrealized loss on derivative instruments | 172 | 475 | — | ||||||||
Write-down of assets | 44,973 | 185 | — | ||||||||
Less: | |||||||||||
Equity income (1) | (46 | ) | (3,188 | ) | (68 | ) | |||||
Unrealized gain on derivative instruments | — | — | (405 | ) | |||||||
Gain on sale of assets | — | (3,081 | ) | — | |||||||
Free cash flow | 31,178 | 125,799 | 11,735 | ||||||||
Weighted-average number of common shares outstanding for the period - basic | 33,738,143 | 33,727,978 | 33,623,608 |
(1) Equity income relates to the Company’s 50 percent ownership 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 | |||||||||
2020 | |||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||
Net (loss) income - GAAP basis | (44,434 | ) | 98,198 | (19,850 | ) | ||||
Depreciation and amortization | 29,992 | 29,546 | 31,536 | ||||||
Interest expense, net of interest income | 12,216 | 12,925 | 15,996 | ||||||
Income tax expense (recovery) | 2,187 | (14,598 | ) | 1,435 | |||||
EBITDA | (39 | ) | 126,071 | 29,117 | |||||
Add (subtract) specific income statement items affecting EBITDA: | |||||||||
Foreign exchange loss (gain) | 514 | 87 | (918 | ) | |||||
Write-down and (gain) on sale of assets | 44,973 | (2,896 | ) | — | |||||
Realized loss (gain) on interest rate swaps | 58 | (86 | ) | (613 | ) | ||||
Unrealized loss (gain) on derivative instruments | 172 | 475 | (405 | ) | |||||
Equity income | (46 | ) | (3,188 | ) | (68 | ) | |||
Consolidated adjusted EBITDA | 45,632 | 120,463 | 27,113 | ||||||
Adjusted EBITDA from equity-accounted joint venture (See Appendix D) | 616 | 3,778 | 724 | ||||||
Total Adjusted EBITDA | 46,248 | 124,241 | 27,837 |
Appendix D - Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA from Equity-Accounted Joint Venture
(in thousands of
Three Months Ended | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
At | Company's | At | Company's | At | Company's | |||||||
100 | % | Portion (1) | 100 | % | Portion (1) | 100 | % | Portion (1) | ||||
Revenues | 1,986 | 993 | 8,113 | 4,056 | 2,022 | 1,011 | ||||||
Vessel and other operating expenses | (753 | ) | (376 | ) | (557 | ) | (278 | ) | (575 | ) | (287 | ) |
Depreciation and amortization | (951 | ) | (476 | ) | (952 | ) | (476 | ) | (908 | ) | (454 | ) |
Income from vessel operations of equity-accounted joint venture | 282 | 141 | 6,604 | 3,302 | 539 | 270 | ||||||
Net interest expense | (190 | ) | (94 | ) | (228 | ) | (114 | ) | (403 | ) | (202 | ) |
Other | (1 | ) | (1 | ) | — | — | — | — | ||||
Equity income of equity-accounted joint venture | 91 | 46 | 6,376 | 3,188 | 136 | 68 | ||||||
Equity income of equity-accounted joint venture | 91 | 46 | 6,376 | 3,188 | 136 | 68 | ||||||
Depreciation and amortization | 951 | 476 | 952 | 476 | 908 | 454 | ||||||
Interest expense, net of interest income | 190 | 94 | 228 | 114 | 403 | 202 | ||||||
EBITDA from equity-accounted joint venture | 1,232 | 616 | 7,556 | 3,778 | 1,447 | 724 | ||||||
Adjusted EBITDA from equity-accounted joint venture | 1,232 | 616 | 7,556 | 3,778 | 1,447 | 724 |
(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 and the timing thereof; future tanker rates, including the impact of seasonal conditions on spot tanker rates; future OPEC+ oil production increases; the impact of the COVID-19 outbreak and related developments on the Company's business and tanker and oil market fundamentals; the Company's liquidity and market position; the Company’s strategic priorities and anticipated delevering of the Company's balance sheet and reduction in its cost of capital; and the Company’s ability to deal with potential market volatility and create shareholder value. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in tanker rates; changes in the production of, or demand for, oil or refined products; changes in trading patterns significantly affecting overall vessel tonnage requirements; OPEC+ and non-
Source:
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