UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Date of report: July 27, 2005
Commission file number 1- 12874
TEEKAY SHIPPING CORPORATION
(Exact name of Registrant as specified in its charter)
TK House
Bayside Executive Park
West Bay Street & Blake Road
P.O. Box AP-59212, Nassau, Bahamas
(Address of principal executive office)
[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40- F
[Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ]
Yes No X
[Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ]
Yes No X
[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82- ]
Item 1 - Information Contained in this Form 6-K Report
| Attached as Exhibit I is a copy of an announcement of Teekay Shipping Corporation (the “Company”), dated July 27, 2005. |
THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE FOLLOWING REGISTRATION STATEMENTS OF THE COMPANY.
• REGISTRATION STATEMENT ON FORM F-3 (NO. 33-97746) FILED WITH THE SEC ON OCTOBER 4, 1995;
• REGISTRATION STATEMENT ON FORM S-8 (NO. 333-42434) FILED WITH THE SEC ON JULY 28, 2000;
• REGISTRATION STATEMENT ON FORM F-3 (NO. 333-102594) FILED WITH THE SEC ON JANUARY 17, 2003; AND
• REGISTRATION STATEMENT ON FORM S-8 (NO. 333-119564) FILED WITH THE SEC ON OCTOBER 6, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: July 27, 2005 | TEEKAY SHIPPING CORPORATION By: /s/ Peter Evensen Peter Evensen Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT I
 |
TEEKAY SHIPPING CORPORATION TK House, Bayside Executive Park, West Bay Street & Blake Road P.O. Box AP-59212, Nassau, Bahamas |
EARNINGS RELEASE
TEEKAY REPORTS SECOND QUARTER
NET INCOME OF $104.6 MILLION
Highlights
- Achieved second quarter net income of $104.6 million, or $1.23 per share (including specific items which increased net income by $12.7 million, or $0.15 per share) (1)
- Generated $165.9 million in cash flow from vessel operations
- Repurchased 3.9 million shares for an average cost of $43.37 per share, or approximately $170 million
- Increasing share repurchase program by an additional $250 million for a total remaining authorization of $305 million
- Successfully completed the initial public offering of Teekay LNG Partners L.P.
- Awarded two 20-year fixed-rate LNG charter contracts from a BP plc led consortium
Nassau, The Bahamas, July 27, 2005 — Teekay Shipping Corporation (Teekay or the Company) today reported net income of $104.6 million, or $1.23 per share, for the quarter ended June 30, 2005, compared to net income of $98.5 million, or $1.13 per share, for the quarter ended June 30, 2004. The results for the quarter ended June 30, 2005 included a number of items that, on a net basis, increased net income by $12.7 million, or $0.15 per share, as detailed in Appendix B to this release. The results for the second quarter of 2004 included an unrealized foreign currency translation loss of $5.2 million, or $0.06 per share, relating to long-term debt denominated in Euros. Net voyage revenues(2) for the second quarter of 2005 were $381.8 million, compared to $368.9 million for the same period in 2004, and income from vessel operations increased to $131.5 million from $122.1 million.
Net income for the six months ended June 30, 2005 was $383.6 million, or $4.42 per share, compared to $287.6 million, or $3.32 per share, for the same period last year. The results for the six months ended June 30, 2005 included a number of items that had the net effect of increasing net income by $146.5 million, or $1.69 per share, as detailed in Appendix B to this release. The results for the six months ended June 30, 2004 included the unrealized foreign currency translation loss of $5.2 million, or $0.06 per share, mentioned above for the second quarter of 2004. Net voyage revenues (2) for the six months ended June 30, 2005 were $800.7 million compared to $816.5 million in the same period last year, while income from vessel operations increased to $401.4 million from $330.7 million.
Share Repurchase Program
On April 20, 2005, the Company announced that its Board of Directors had authorized a $225 million share repurchase program which followed the three million share, or $129 million, repurchase program completed in early 2005. As of July 26, 2005, the Company had repurchased approximately 3.9 million shares at an average price of $43.37 per share for a total cost of approximately $170 million under the $225 million repurchase program.
The Company separately announced today that its Board of Directors had authorized a $250 million increase to the existing share repurchase program which has a remaining authorization of approximately $55 million, for a total current authorization of $305 million. If the remaining share repurchase authorization of $305 million is completed at an average price of $45.01 per share (Teekay’s closing share price on July 26, 2005), the Company will have repurchased over 16%, or approximately $604 million, of the Company’s outstanding shares since the end of November 2004 when the first share repurchase announcement was made.
(1) See Appendix B to this release for information about specific items affecting
net income that securities analysts typically exclude in their published
estimates of the Company’s financial results.
(2) Net voyage revenues
represents voyage revenues less voyage expenses. Net voyage revenues is a
non-GAAP financial measure used by certain investors to measure the financial
performance of shipping companies. Please see the Company’s Web site at
www.teekay.com for a reconciliation of this non-GAAP measure as used in
this release to the most directly comparable GAAP financial measure.
Initial Public Offering of Teekay LNG Partners L.P.
On May 10, 2005, Teekay’s subsidiary, Teekay LNG Partners L.P. (NYSE: TGP) (Teekay LNG), completed its initial public offering of 6.9 million common units (including the underwriter’s overallotment option) at a price of $22 per unit, representing an initial yield of 7.5% based on targeted minimum annual cash distributions. Gross proceeds from the offering were $151.8 million. Teekay LNG’s current fleet includes seven LNG carriers (including three newbuildings) and five Suezmax tankers, all of which are on long-term fixed-rate charters. Teekay currently owns a 78% interest in Teekay LNG, including its 2% general partner interest.
Teekay Awarded Two Long-Term LNG Charter Contracts
The Company announced separately today that it had been awarded long-term fixed-rate contracts to charter two liquefied natural gas (LNG) carriers to the Tangguh LNG project in Indonesia. The carriers will be chartered for a period of 20 years to The Tangguh Production Sharing Contractors, a consortium led by BP Berau, a subsidiary of BP plc. In connection with this award, Teekay has exercised shipbuilding options with Hyundai Heavy Industries Co. Ltd. to construct two 155,000 cubic meter LNG carriers at preferential prices compared to current market values, which are scheduled to deliver in late 2008 and early 2009, respectively. Teekay is entering into these transactions with an Indonesian partner who has taken a 30% interest in the vessels. In accordance with existing agreements, Teekay is required to offer its ownership interest in these vessels and related charter contracts to Teekay LNG.
Operating Results
The following table highlights certain financial information for Teekay’s three main segments: the spot tanker segment, the fixed-rate tanker segment, and the fixed-rate LNG segment, which commenced with Teekay’s acquisition on April 30, 2004 of Naviera F. Tapias S.A. (subsequently renamed Teekay Shipping Spain S.L.). Please read the “Teekay Fleet” section of this release and Appendix A for further details about these segments.
---------------------- -------------------------------------------------- -------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
(unaudited) (unaudited)
Spot Fixed-Rate Fixed-Rate Spot Fixed-Rate Fixed-Rate
(in thousands of Tanker Tanker LNG Tanker Tanker LNG
U.S. dollars) Segment Segment Segment Total Segment Segment Segment Total
-------------------- ---------- ---------- ------------ ----------- ------------ ------------ ----------- -----------
Net voyage revenues 185,212 171,856 24,776 381,844 202,965 158,065 7,884 368,914
Vessel operating
expenses 16,068 31,453 3,820 51,341 23,752 28,376 1,637 53,765
Time-charter hire
expense 72,280 52,174 - 124,454 60,369 46,205 - 106,574
Depreciation &
amortization 12,684 30,099 7,523 50,306 25,976 32,493 2,377 60,846
Cash flow from
vessel operations* 73,554 74,622 17,694 165,870 106,523 70,490 5,506 182,519
-------------------- ---------- ---------- ------------ ----------- ------------ ------------ ----------- -----------
* Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense and vessel write-downs/(gain) loss on sale of vessels. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s Web site at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable GAAP financial measure.
Fixed-Rate Tanker Segment
The Company’s cash flow from vessel operations from its fixed-rate tanker segment increased from $70.5 million in the second quarter of 2004 to $74.6 million in the second quarter of 2005 mainly due to the inclusion of a full quarter’s results from Teekay Shipping Spain’s Suezmax tanker fleet (compared to only two months in the prior period) and the commencement of a three-year fixed-rate time-charter on the Company’s chartered-in Very Large Crude Carrier in April 2005, which previously had been included with the spot tanker segment.
Fixed-Rate LNG Segment
The Company’s cash flow from vessel operations from its fixed-rate LNG segment increased from $5.5 million in the second quarter of 2004 to $17.7 million in the second quarter of 2005, primarily due to the delivery of two LNG tankers during the second half of 2004. The Company, including Teekay LNG, has five LNG newbuildings scheduled to deliver between the fourth quarter of 2006 and early 2009, all of which will commence service under 20 year fixed-rate contracts upon delivery.
Spot Tanker Segment
The Company’s cash flow from vessel operations from its spot tanker segment decreased to $73.6 million in the second
quarter of 2005 from $106.5 million in the second quarter of 2004, primarily due to the sale of a number of older
non-double hull vessels during the past 12 months, partially offset by the delivery of newbuildings, the
chartering-in of additional vessels and an increase in spot tanker rates. On a net basis, these fleet changes
reduced the total number of revenue days in the Company’s spot tanker segment by 1,443 days, from 7,373 days in the
second quarter of 2004 to 5,930 days in the second quarter of 2005. Revenue days represent the total number of
calendar days the Company’s vessels were in its possession for the periods presented less the total number of
off-hire days associated with major repairs, drydockings or special and intermediate surveys.
The Company’s spot tanker segment generally includes vessels operating on voyage and period charters with an initial
term of less than three years. The following table highlights the operating performance of the Company’s spot tanker
segment measured in net voyage revenue per day, or time-charter equivalent (TCE), and includes the effect of forward
freight agreements (FFAs) which are entered into as hedges against a portion of the Company’s exposure to spot market
rates:
---------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Month Ended
June 30, 2005 March 31, 2005 June 30, 2004 June 30, 2005 June 30, 2004
---------------------------------------------------------------------------------------------------------------------
Spot Tanker Segment
Very Large Crude Carrier Fleet
Revenue days - 90 273 90 543
TCE per revenue day - $92,844 $54,788 $92,844 $63,273
Suezmax Tanker Fleet
Revenue days 577 540 647 1,117 1,208
TCE per revenue day * $42,527 $38,865 $36,879 $40,756 $49,947
Aframax Tanker Fleet
Revenue days 3,575 4,321 5,048 7,896 10,090
TCE per revenue day $34,496 $39,622 $28,135 $37,301 $34,500
Oil/Bulk/Ore Fleet
Revenue days - - - - 150
TCE per revenue day - - - - $21,793
Large/Medium-Size Product Tanker Fleet
Revenue days 782 647 503 1,429 898
TCE per revenue day $28,508 $31,941 $20,332 $30,062 $23,476
Small Product Tanker Fleet
Revenue days 996 949 902 1,945 1,749
TCE per revenue day $15,148 $16,411 13,188 $15,764 $13,344
---------------------------------------------------------------------------------------------------------------------
* Results for the three and six months ended June 30, 2005 for the Company’s Suezmax tankers include realized losses from FFAs of $0.8 million (or $1,460 per revenue day) and $2.9 million (or $2,612 per revenue day), respectively. Results for the three and six months ended June 30, 2004 for the Company’s Suezmax tankers include realized losses from FFAs of $2.1 million (or $3,297 per revenue day) and $3.3 million (or $2,758 per revenue day), respectively. Results for the three months ended March 31, 2005 for the Company’s Suezmax tankers include realized losses from FFAs of $2.1 million (or $3,842 per revenue day). The FFAs relating to the Suezmax tankers were entered into as a hedge against one of the Company’s Suezmax tankers which is chartered-in at a fixed rate, thus effectively locking in a profit.
Market Overview
During the second quarter of 2005, tanker freight rates followed their traditional seasonal pattern and continued to decline from the very high levels experienced earlier this year; however, Aframax tanker rates remained at relatively firm levels when compared to historical averages.
Global oil demand, an underlying driver of tanker demand, averaged 81.9 million barrels per day (mb/d) during the second quarter of 2005, a decline of 2.0 mb/d from the previous quarter but 0.8 mb/d, or 1%, higher than the second quarter of 2004. While seasonal factors were the main cause of the decline in demand from the first to the second quarter of 2005, continued global economic growth led to an increase in oil demand from the prior year despite record high oil prices. On July 13, 2005, the International Energy Agency (IEA) lowered its annual global oil demand growth forecast for 2005 as demand in the first half of 2005 was weaker than anticipated; however, the outlook for the second half of 2005 remains positive with oil demand in the fourth quarter estimated to be 4.0 mb/d, or 4.9%, higher than the second quarter of 2005 and 2.0 mb/d, or 2.4%, higher than the fourth quarter of 2004. For 2006, the IEA forecasts a further increase in oil demand of 1.7 mb/d, or 2.1% higher than 2005, to 85.6 mb/d.
Global oil supply, a direct driver of tanker demand, grew by 0.9 mb/d to 84.6 mb/d in the second quarter of 2005 and was 2.1 mb/d higher than the same period last year. Long-haul Middle East OPEC oil production rose by 0.5 mb/d in the second quarter of 2005 from the previous quarter, while an increase in non-OPEC oil production led by Brazil and Africa added a further 0.4 mb/d. In response to rising oil prices, OPEC members raised production quotas by 0.5 mb/d to 28.0 mb/d effective July 1, 2005, and authorized the OPEC President to commence discussions on a further 0.5 mb/d increase should oil prices remain high.
The size of the world tanker fleet rose to 345.0 million deadweight tonnes (mdwt) as of June 30, 2005, up 4.0 mdwt, or 1.2%, from March 31, 2005. Deletions aggregated 2.1 mdwt in the second quarter of 2005, down from 2.7 mdwt in the previous quarter. Deliveries of tanker newbuildings during the second quarter of 2005 declined to 5.8 mdwt from 9.0 mdwt in the previous quarter.
As of June 30, 2005, the world tanker orderbook stood at 89.0 mdwt, representing 25.8% of the total world tanker fleet compared to 86.0 mdwt, or 25.2%, as of March 31, 2005.
Teekay Fleet
At June 30, 2005 (and including the two LNG newbuildings for the Tangguh project), Teekay’s fleet consisted of 145 vessels, including 54 chartered-in vessels and 14 newbuildings on order. During the second quarter of 2005, the Company completed the previously announced sale of three older single-hull Aframax tankers and one older single-hull Suezmax tanker to new owners, and took delivery of one newbuilding Aframax tanker which is currently trading in the spot market.
The following table summarizes the Teekay fleet as of June 30, 2005 (adjusted to include the two LNG newbuildings for the Tangguh project):
-----------------------------------------------------------------------------------------------------------------------
Number of Vessels(1)
---------------------------------------------------------------
Owned Chartered-in Newbuildings
Vessels Vessels on Order Total
-----------------------------------------------------------------------------------------------------------------------
Spot Tanker Segment:
Very Large Crude Carriers - 1 - 1
Suezmax Tankers 1 4 - 5
Aframax Tankers 27 16 3 46
Large / Medium-Size Product Tankers - 8 3 11
Small Product Tankers - 11 - 11
-----------------------------------------------------------------------------------------------------------------------
Total Spot Tanker Segment 28 40 6 74
-----------------------------------------------------------------------------------------------------------------------
Fixed-Rate Tanker Segment:
Shuttle Tankers (2) 28 13 - 41
Conventional Tankers (3) 12 - 3 15
Floating Storage & Offtake Units (4) 4 - - 4
LPG / Methanol Carriers 1 1 - 2
-----------------------------------------------------------------------------------------------------------------------
Total Fixed-Rate Tanker Segment 45 14 3 62
-----------------------------------------------------------------------------------------------------------------------
Fixed-Rate LNG Segment (5) 4 - 5 9
-----------------------------------------------------------------------------------------------------------------------
Total 77 54 14 145
=======================================================================================================================
(1)
Excludes vessels managed on behalf of third parties.
(2)
Includes six shuttle tankers of which the Company’s ownership interests
range from 50% to 50.5%.
(3) Includes five Suezmax tankers owned by subsidiaries
of Teekay LNG.
(4) Includes one unit in which the Company’s ownership
interest is 89%.
(5) The four existing
LNG vessels are owned by Teekay LNG; three LNG newbuildings will be sold to Teekay
LNG and the remaining two newbuildings will be offered to Teekay LNG in accordance with existing agreements.
For a detailed listing of vessel sales and deliveries, please refer to the Company’s Web site at www.teekay.com.
Liquidity and Capital Expenditures
At June 30, 2005, the Company had total liquidity of over $1.4 billion, comprising $246.8 million in cash and cash equivalents and $1.2 billion in undrawn medium-term revolving credit facilities.
At June 30, 2005 (and including the capital commitments relating to the two LNG carriers for the Tangguh project), the Company had approximately $1.1 billion in remaining capital commitments relating to its newbuildings on order, for which the Company has arranged long-term financing. Of this total amount, approximately $308 million is due during the remainder of 2005, $230 million in 2006, $352 million in 2007 and $160 million in 2008 and early 2009. Of the remaining capital commitments, approximately $743 million are installment payments relating to LNG newbuildings.
About Teekay
Teekay Shipping Corporation transports more than 10 percent of the world’s seaborne oil and has recently expanded into the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE: TGP). With a fleet of more than 140 tankers, offices in 14 countries and 5,500 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay’s reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.
Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”.
Earnings Conference Call
The Company plans to host a conference call at 11:00 a.m. EDT (8:00 a.m. PDT) on July 28, 2005, to discuss the Company’s results and the outlook for its business activities. All shareholders and interested parties are invited to listen to the live conference call and view the Company’s earnings presentation through the Company’s Web site at www.teekay.com. A recording of the call will be available until August 4, 2005 by dialing (719) 457-0820, access code 4063452, or via the Company’s Web site until August 28, 2005.
For Investor Relations
enquiries contact:
Scott Gayton
Tel: +1 (604) 844-6654
For Media enquiries
contact:
Kim Barbero
Tel: +1 (604) 609-4703
Web site: www.teekay.com
-------------------------------------------------------------------------------------------------------------------------------
TEEKAY SHIPPING CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(in thousands of U.S. dollars, except share and per share data)
-------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2005 2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
VOYAGE REVENUES 480,140 517,411 477,622 997,551 1,029,073
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
OPERATING EXPENSES
Voyage expenses 98,296 98,529 108,708 196,825 212,592
Vessel operating expenses 51,341 54,440 53,765 105,781 102,677
Time-charter hire expense 124,454 108,582 106,574 233,036 215,239
Depreciation and amortization 50,306 54,083 60,846 104,389 114,460
General and administrative 40,179 33,698 25,816 73,877 53,441
Write-down / (gain) on sale of vessels
and equipment (15,894) (101,853) (450) (117,747) (1,053)
Restructuring charge - - 240 - 1,002
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
348,682 247,479 355,499 596,161 698,358
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
Income from vessel operations 131,458 269,932 122,123 401,390 330,715
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
OTHER ITEMS
Interest expense (33,319) (37,697) (30,672) (71,016) (52,235)
Interest income 8,426 8,230 4,883 16,656 6,137
Income tax recovery (expense) 555 9,317 (6,086) 9,872 (8,235)
Equity income from joint ventures 2,884 2,827 3,288 5,711 5,124
Other - net (5,435) 26,437 5,007 21,002 6,046
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
(26,889) 9,114 (23,580) (17,775) (43,163)
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
Net income 104,569 279,046 98,543 383,615 287,552
================================== ================ ================= =============== =============== =================
Earnings per common share
- Basic $1.31 $3.41 $1.19 $4.72 $3.50
- Diluted * $1.23 $3.19 $1.13 $4.42 $3.32
---------------------------------- ---------------- ----------------- --------------- --------------- -----------------
Weighted-average number of common
shares outstanding
- Basic 79,953,740 81,712,320 82,603,379 81,279,750 82,112,086
- Diluted * 85,314,815 87,467,141 87,340,951 86,741,711 86,697,235
================================== ================ ================= ================= =============== =================
*Reflects the effect of outstanding stock options and the $143.75 million mandatory convertible preferred PEPS units, computed using the treasury stock method
------------------------------------------------------------------------------------------------------------------------ TEEKAY SHIPPING CORPORATION SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars) ------------------------------------------------------------------------------------------------------------------------ As at June 30, As at December 31, 2005 2004 (unaudited) ASSETS Cash and cash equivalents 246,832 427,037 Other current assets 193,627 264,806 Restricted cash - current 90,781 96,087 Vessels held for sale - 129,952 Restricted cash - long-term 303,800 352,725 Vessels and equipment 3,171,615 3,278,710 Advances on newbuilding contracts 259,656 252,577 Other assets 226,139 254,745 Intangible assets 264,417 277,511 Goodwill 171,898 169,590 -------------------------------------------------------------------- ------------------------- ------------------ Total Assets 4,928,765 5,503,740 ==================================================================== ========================= ================== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued liabilities 161,136 206,022 Current portion of long-term debt 265,528 208,387 Long-term debt 1,835,990 2,536,158 Other long-term liabilities 201,374 301,091 Minority interest 161,018 14,724 Stockholders' equity 2,303,719 2,237,358 -------------------------------------------------------------------- ------------------------- ------------------ Total Liabilities and Stockholders' Equity 4,928,765 5,503,740 ==================================================================== ========================= ==================
------------------------------------------------------------------------------------------------------------------------ TEEKAY SHIPPING CORPORATION SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of U.S. dollars) ------------------------------------------------------------------------------------------------------------------------ Six Months Ended June 30, 2005 2004 (unaudited) (unaudited) Cash and cash equivalents provided by (used for) OPERATING ACTIVITIES -------------------------------------------------------------------- ------------------------- ------------------ ------ Net operating cash flow 346,790 396,179 -------------------------------------------------------------------- ------------------------- ------------------ ------ FINANCING ACTIVITIES Net proceeds from long-term debt 1,222,834 874,236 Scheduled repayments of long-term debt (58,986) (76,662) Prepayments of long-term debt (1,732,460) (704,170) Repurchase of common stock (223,482) - Net proceeds from the initial public offering of Teekay LNG 139,395 - Settlement of interest rate swaps (143,295) - Other 6,174 1,214 -------------------------------------------------------------------- ------------------------- ------------------ ------ Net financing cash flow (789,820) 94,618 -------------------------------------------------------------------- ------------------------- ------------------ ------ INVESTING ACTIVITIES Expenditures for vessels and equipment (160,729) (263,715) Purchase of Teekay Shipping Spain S.L. - (286,112) Proceeds from sale of vessels and equipment 433,748 - Other (10,194) (17,511) -------------------------------------------------------------------- ------------------------- ------------------ ------ Net investing cash flow 262,825 (567,338) -------------------------------------------------------------------- ------------------------- ------------------ ------ Decrease in cash and cash equivalents (180,205) (76,541) Cash and cash equivalents, beginning of the period 427,037 292,284 -------------------------------------------------------------------- ------------------------- ------------------ ------ Cash and cash equivalents, end of the period 246,832 215,743 ==================================================================== ========================= ================== ======
-------------------------------------------------------------------------------------------------------------------------- TEEKAY SHIPPING CORPORATION APPENDIX A - SEGMENT INFORMATION (in thousands of U.S. dollars) -------------------------------------------------------------------------------------------------------------------------- Three Months Ended June 30, 2005 (unaudited) Fixed-Rate Spot Tanker Tanker Fixed-Rate Segment Segment LNG Segment Total ---------------------------------- --------------------- --------------------- -------------------- ----------------- Net voyage revenues 185,212 171,856 24,776 381,844 Vessel operating expenses 16,068 31,453 3,820 51,341 Time-charter hire expense 72,280 52,174 - 124,454 Depreciation and amortization 12,684 30,099 7,523 50,306 General and administrative 23,310 13,607 3,262 40,179 Write-down / (gain) on sale of vessels and equipment (26,147) 10,253 - (15,894) ---------------------------------- --------------------- --------------------- -------------------- ----------------- Income from vessel operations 87,017 34,270 10,171 131,458 ================================== ===================== ===================== ======================= ============== Three Months Ended March 31, 2005 (unaudited) Fixed-Rate Spot Tanker Tanker Fixed-Rate Segment Segment LNG Segment Total ---------------------------------- --------------------- --------------------- -------------------- ----------------- Net voyage revenues 236,788 157,877 24,217 418,882 Vessel operating expenses 17,807 32,290 4,343 54,440 Time-charter hire expense 66,216 42,366 - 108,582 Depreciation and amortization 15,866 30,695 7,522 54,083 General and administrative 18,325 12,433 2,940 33,698 Gain on sale of vessels (96,969) (4,884) - (101,853) ---------------------------------- --------------------- --------------------- -------------------- ---------------- Income from vessel operations 215,543 44,977 9,412 269,932 ================================== ===================== ===================== ======================= =============== Three Months Ended June 30, 2004 (unaudited) Fixed-Rate Spot Tanker Tanker Fixed-Rate Segment Segment LNG Segment Total ---------------------------------- ------------------------ --------------------- ----------------------- ---------------- Net voyage revenues 202,965 158,065 7,884 368,914 Vessel operating expenses 23,752 28,376 1,637 53,765 Time-charter hire expense 60,369 46,205 - 106,574 Depreciation and amortization 25,976 32,493 2,377 60,846 General and administrative 12,081 12,994 741 25,816 Gain on sale of vessels (450) - - (450) Restructuring charge 240 - - 240 ---------------------------------- --------------------- --------------------- ----------------------- ---------------- Income from vessel operations 80,997 37,997 3,129 122,123 ================================== ===================== ===================== ======================= ================
-------------------------------------------------------------------------------------------------------------------------- TEEKAY SHIPPING CORPORATION APPENDIX A - SEGMENT INFORMATION (in thousands of U.S. dollars) -------------------------------------------------------------------------------------------------------------------------- Six Months Ended June 30, 2005 (unaudited) Fixed-Rate Spot Tanker Tanker Fixed-Rate Segment Segment LNG Segment Total -------------------------------- --------------------- --------------------- -------------------- ------------------- Net voyage revenues 422,000 329,733 48,993 800,726 Vessel operating expenses 33,875 63,743 8,163 105,781 Time-charter hire expense 138,496 94,540 - 233,036 Depreciation and amortization 28,550 60,794 15,045 104,389 General and administrative 41,635 26,040 6,202 73,877 Write-down / (gain) on sale of vessels and equipment (123,116) 5,369 - (117,747) -------------------------------- --------------------- --------------------- -------------------- ------------------ Income from vessel operations 302,560 79,247 19,583 401,390 ================================ ===================== ===================== ==================== ================== Six Months Ended June 30, 2004 (unaudited) Fixed-Rate Spot Tanker Tanker Fixed-Rate Segment Segment LNG Segment Total -------------------------------- --------------------- --------------------- ----------------------- ---------------- Net voyage revenues 491,046 317,551 7,884 816,481 Vessel operating expenses 47,205 53,835 1,637 102,677 Time-charter hire expense 119,924 95,315 - 215,239 Depreciation and amortization 50,862 61,221 2,377 114,460 General and administrative 25,099 27,601 741 53,441 Gain on sale of vessels (1,053) - - (1,053) Restructuring charge 1,002 - - 1,002 -------------------------------- --------------------- --------------------- ----------------------- --------------- Income from vessel operations 248,007 79,579 3,129 330,715 ================================== ===================== ===================== ==================== =================
-----------------------------------------------------------------------------------------------------------------------------------
TEEKAY SHIPPING CORPORATION
APPENDIX B - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars, except per share data)
Set forth below are some of the significant items of income and expense that affected the Company's net income for the
three and six months ended June 30, 2005, which securities analysts typically exclude in their published estimates of the
Company's financial results:
-----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, 2005 June 30, 2005
(unaudited) (unaudited)
Per Per
$ Share $ Share
-------------------------------------------------------------------------------------------------------------------------------
Gain on sale of vessels 26,095 0.31 127,948 1.48
Foreign currency translation gains (1) 16,601 0.19 42,475 0.49
Deferred income tax recoveries on unrealized foreign exchange losses (2) 4,304 0.05 10,297 0.12
Write off of capitalized loan costs and loss on termination of interest (15,282) (0.18) (15,282) (0.18)
rate swaps (3)
Write down of vessels and equipment (4) (10,201) (0.12) (10,201) (0.12)
Loss on bond repurchase (8.875% Notes due 2011) (5) (8,775) (0.10) (8,775) (0.10)
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Total 12,742 0.15 146,462 1.69
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| (1) | Foreign currency translation gains (net of minority owner’s share) primarily relates to the Company’s debt denominated in Euros and deferred tax liability denominated in Norwegian Kroner. |
| (2) | Deferred income tax recoveries relating to unrealized foreign exchange losses on intercompany debt. |
| (3) | In connection with the initial public offering of Teekay LNG Partners L.P., the Company repaid $337.3 million of debt and terminated certain related interest rate swap contracts. |
| (4) | In June 2005, the Company wrote-down the carrying value of certain offshore equipment due to a lower estimated net realizable value. |
| (5) | During the second quarter of 2005, the Company repurchased $56.8 million of its 8.875% bonds due 2011 at a premium to their book value. |
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 statements regarding: the Company’s future growth prospects; tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; the Company’s future capital expenditure commitments and the financing requirements for such commitments; the Company’s share repurchase program; vessel delivery dates; offers of vessels to Teekay LNG; and the Tangguh LNG project. 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 production of or demand for oil, petroleum products and LNG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly impacting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; shipyard production delays; the Company’s future capital expenditure requirements; the potential inability to repurchase the Company’s shares under its share repurchase program; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2004. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.