This adjusted net loss excluded a number of specific items that had the net effect of increasing GAAP net loss by $22.9 mill for 2Q14 and increasing GAAP net income by $44.7 mill for 2Q13.
Including these items, the company reported on a GAAP basis, a net loss of $43 mill, compared to net income of $11.4 mill for 2Q13. Net revenues for 2Q14 increased to $418.8 mill, compared to $404.6 mill for 2Q13.
For the first six months of this year, the company reported an adjusted net loss of $16.6 mill, compared to an adjusted net loss of $45 mill in 1H13.
Again this excluded a number of specific items that had the net effect of increasing GAAP net loss by $26.9 mill for 1H14 and increasing GAAP net income by $50.2 mill for 1H13.
Including these items, the company reported on a GAAP basis, a net loss of $43.5 mill, compared to net income of $5.2 mill in 1H13. Net revenues for 1H14 increased to $890.3 mill, compared to $829.3 mill for the same period of 2013.
"We have continued to make steady progress on the execution of our existing business development projects and added new important projects which, when completed, we expect will create future value for Teekay Parent and its daughter companies," said Peter Evensen, Teekay Corp's president and CEO. "In late-June, we took delivery of the ‘Petrojarl Knarr’ FPSO from the shipyard in South Korea and the unit is currently in transit to the North Sea for field installation and offshore testing.
“Following the expected commencement of its charter contract in the fourth quarter of 2014, the ‘Petrojarl Knarr’ FPSO, our largest FPSO project to-date, will be eligible for dropdown to Teekay Offshore. We are also pleased to report that in July, the ‘Petrojarl Banff’ FPSO recommenced operations under its charter contract and the unit is generating cash flow after approximately 30 months of off-hire for storm-related repairs and upgrades. Finally, repairs to the gas compressors on board the ‘Petrojarl Foinaven’ FPSO were completed in July and the unit is now gradually increasing its oil production throughput.
"Teekay LNG was active during the second quarter of 2014 securing new, long-term accretive contracts to construct and operate 10 new LNG carriers of which Teekay LNG's share of the capital investment will be approximately $1.3 bill, bringing Teekay LNG's committed growth pipeline to over $2.5 bill over the next several years.
"Teekay Offshore was also active, finalising contracts to enter into new adjacencies in the long-haul towage and floating accommodation businesses, which will provide Teekay Offshore with additional growth channels to complement its existing offshore segments.
“We anticipate that expected continued growth of our two MLP daughter entities will benefit Teekay Parent in the form of increased general and limited partner cash flows in the coming years and, in addition, the dropdown sale of the remaining FPSOs owned by Teekay Parent will significantly de-lever Teekay Parent's balance sheet."
As for the daughter companies, Teekay Offshore’s cash flow from vessel operations increased to $109.9 mill in 2Q14, from $91.5 mill in 2Q13.
The increase was primarily due to the acquisition of the ‘Voyageur Spirit’ FPSO and a 50% interest in the ‘Cidade deItajai’FPSO in 2Q13 and the commencement of the timecharters with BG Group for four newbuilding shuttle tankers in June, August, November 2013 and January 2014.
These increases were partially offset by the lay-up and sale of older shuttle and conventional tankers during 2013 and 2014 as their related charter contracts expired, or terminated.
In August 2014, Teekay Offshore acquired Logitel Offshore Holdings, a Norway-based company focused on the floating accommodation market.
Teekay LNG's total cash flow from vessel operations, including cash flows from equity-accounted vessels, increased to $122.5 mill in 2Q14, from $112.6 mill in 2Q13.
The increase was primarily due to the acquisitions and contributions by the two Awilco LNGCs in late-2013 and higher revenues from Exmar LPG BVBA as a result of newbuilding deliveries and higher spot rates.
This was partially offset by the sale of two conventional tankers in December 2013 and February 2014 and two older LPG carriers in Exmar LPG BVBA during the first half of 2014.
In early July 2014, Teekay LNG, through a new 50/50 joint venture with China LNG Shipping (Holdings), finalised agreements to provide six icebreaking LNGCs for the Yamal LNG project.
In late June 2014, Teekay LNG acquired from BG Group interests in four 174,000 cu m tri-fuel diesel electric LNGCs newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding in China for a total fully built-up cost of around $1 bill.
Teekay Tankers reported cash flow from vessel operations increased to $14.2 mill in 2Q14, from $10.7 mill in 2Q13.
The increase was primarily due to the stronger average spot tanker rates in 2Q14, compared to the same period in the previous year, partially offset by a decrease in recognised interest income as a result of the monetisation of Teekay Tankers' investment in term loans in late-March 2014.
On 1st August, 2014, Teekay Tankers' completed the acquisition of a 50% ownership interest in Teekay's commercial and technical management operations for about $15 mill, paid in shares of Teekay Tankers.
Teekay Operations included direct ownership in three commercially managed tanker pools, which currently generate income from commercially managing a fleet of 89 vessels and direct ownership in Teekay Marine, which currently generates income from technically managing a fleet of 53 vessels, including vessels owned by Teekay Tankers.
During the second quarter of 2014, Teekay Tankers secured timecharter-in contracts for two Aframaxes and four LR2s, which increased the company’s total timecharter-in fleet to eight vessels. The new timecharter-in contracts have an average daily rate of $15,600 for the Aframaxes and $15,975 for the LR2s.
In early-May 2014, Teekay Tankers sold two VLCC vessels to TIL for an aggregate purchase price of around $154 mill. As a result, Teekay Tankers recognised a $10 mill gain on the sale during 2Q14.
In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Parent directly owns five FPSO units and one VLCC vessel.
As at 1st August, 2014, Teekay Parent also had six charter-in conventional tankers (including four Aframaxes owned by Teekay Offshore), two charter-in LNG carriers owned by Teekay LNG and two charter-in FSOs and two shuttle tankers owned by Teekay Offshore.
For 2Q14, Teekay Parent generated negative cash flow from vessel operations of $22.3 mill, compared to negative cash flow of $31.2 mill in 2Q13.
The reduction in the negative cash flow is primarily due to the re-delivery of several in-chartered tankers over the past year, higher spot tanker rates and fees earned from managing TIL vessel transactions in 2Q14, partially offset by the completion of the ‘Petrojarl I ‘FPSO timecharter in April 2013 and the sale of four conventional tankers to TIL in 1Q14.
In late-June 2014, Teekay Parent took delivery of the ‘Petrojarl Knarr’ FPSO newbuilding in South Korea and the unit is currently in transit to the North Sea. Following installation and offshore testing on the Knarr field, the unit is expected to commence its 10-year charter contract with BG late in 4Q14.
Teekay Parent has recently signed a letter of intent with CarVal Investors, a global alternative investment manager, to participate in the development of a drybulk shipping company.