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¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Class A common stock, par value of $0.01 per share
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TNK
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New York Stock Exchange
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U.S. GAAP ý
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International Financial Reporting Standards as issued by the International Accounting Standards Board ¨
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Other ¨
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PAGE
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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Item 5.
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Item 6.
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Item 7.
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Item 8.
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Item 9.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16A.
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Item 16B.
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Item 16C.
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Item 16D.
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Item 16E.
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Item 16F.
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Item 16G.
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Item 16H.
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•
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our future financial condition, results of operations and future revenues, expenses and capital expenditures, and our expected financial flexibility and sources of liquidity to fund capital expenditures and pursue acquisitions and other expansion opportunities, including vessel acquisitions;
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•
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our dividend policy and ability to pay dividends on shares of our common stock;
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•
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the crude oil and refined product tanker market fundamentals, including the balance of supply and demand in the tanker market, changes in the world tanker fleet, changes in global oil and refined products demand, the rate of global oil production (including the effect of OPEC supply cuts), and changes in long-haul crude tanker movements, trading patterns, tanker fleet utilization and spot tanker rates;
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•
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anticipated levels of tanker newbuilding orders and deliveries and rates of tanker scrapping or use of tankers for floating storage;
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•
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anticipated temporary removal of vessels from the global supply chain for drydocking and scrubber retrofitting;
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•
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our compliance with, and the effect on our business and operating results of, covenants under our term loans, credit facilities and obligations related to finance leases;
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•
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our expectation regarding the ability of Teekay Corporation to comply with its covenants under our loan arrangement which Teekay Corporation is a guarantor;
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•
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the expected scope, duration and effects of the novel coronavirus pandemic, including its impact on global supply and demand for petroleum products and tanker fleet utilization, and the consequences of any future epidemic or pandemic crises;
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•
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future oil production and refinery capacity;
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•
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global oil prices, including the potential impact on oil stockpiling, refinery throughput, bunker fuel prices, and oil futures markets;
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•
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our expectations about the availability of vessels to purchase, the expected costs and time it may take to acquire vessels or construct and deliver newbuildings;
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•
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the ability to leverage Teekay Corporation’s relationships and reputation in the shipping industry;
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•
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the expected benefits of participation in purchasing alliances;
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•
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the effectiveness of our chartering strategy in capturing upside opportunities and reducing downside risks, including our ability to take advantage of strong tanker markets;
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•
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our acquisition strategy and the expected benefits of our acquisitions of vessels or businesses;
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•
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our expectation that our U.S. Gulf lightering business will complement our spot trading strategy in the Caribbean to the U.S. Gulf market, allowing us to better optimize the deployment of the fleet that we trade in this region through better scheduling flexibility and utilization;
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•
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the ability to maximize the use of vessels, including the redeployment of vessels no longer under time charters;
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•
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our expectation regarding our vessels’ ability to perform to specifications and maintain their hire rates;
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•
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operating expenses, availability of crew, number of off-hire days, dry-docking requirements and insurance costs;
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•
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the impact and expected cost of, and our ability and plans to comply with, new and existing governmental regulations and maritime self-regulatory organization standards applicable to our business, including the expected cost to install ballast water treatment systems (or BWTS) on our tankers and the switch to burning low sulfur fuel in compliance with International Maritime Organization (or IMO) proposals and the effect of IMO 2020, a new regulation for a 0.50% global sulfur cap for marine fuels effective January 1, 2020;
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•
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our ability to obtain all permits, licenses and certificates material to the conduct of our operations;
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•
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the impact on us and the shipping industry of environmental liabilities, including climate change;
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•
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the impact of any sanctions on our operations and our ongoing compliance with such sanctions;
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•
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the expected impact of the adoption of the "Poseidon Principles" by financial institutions;
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•
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expenses under service agreements with other affiliates of Teekay Corporation;
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•
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the anticipated taxation of our Company and of dividends to our shareholders;
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•
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the sale of the non-U.S. portion of our ship-to-ship support services business, as well as its LNG terminal management business, including the expected timing of closing;
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•
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our strategy regarding our ship-to-ship transfer business and the expected ongoing benefits of our ship-to-ship transfer business, including, among others, the ability of the business to provide stable cash flow to help us partially manage the cyclicality of the tanker market, and our ability to grow our presence in, and take advantage of the expected increased volumes moving in and out of, the U.S. Gulf, and to increase our market share in the ship-to-ship support business in the Americas region;
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•
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our expected recovery of fuel price increases from the charterers of its vessels through higher rates for voyage charters;
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•
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our expectations as to the useful vessel lives and any impairment of our vessels or of goodwill;
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•
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our customers’ increasing emphasis on environmental and safety concerns;
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•
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meeting our going concern requirements and our liquidity needs, including anticipated funds and sources of financing for liquidity and capital expenditure needs and the sufficiency of cash flows, and our estimation that we will have sufficient liquidity for at least a one-year period;
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•
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our ability to refinance existing debt obligations, to raise additional debt and capital to fund capital expenditures and negotiate extensions or redeployments of existing assets;
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•
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our expectations and hedging activities relating to foreign exchange, interest rate and spot market risks;
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•
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the expected timing of the transition away from the use of the London Inter-Bank Offered Rate (or LIBOR) and the consequences relating to such transition;
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•
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the ability of counterparties to our derivative and other contracts to fulfill their contractual obligations;
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•
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the delivery timing of new charter-in vessels;
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•
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our position that we are not a passive foreign investment company;
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•
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the expected impact of the adoption of new accounting standards; and
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•
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our business strategy and other plans and objectives for future operations.
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Item 1.
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Identity of Directors, Senior Management and Advisors
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Item 2.
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Offer Statistics and Expected Timetable
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Item 3.
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Key Information
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Years Ended December 31,
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||||||||||||||||||
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2019
|
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2018
|
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2017
|
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2016
|
|
2015
|
||||||||||
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(in thousands, except share, per share, and fleet data)
|
||||||||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues (1)
|
|
$943,917
|
|
|
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$776,493
|
|
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$431,178
|
|
|
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$550,543
|
|
|
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$534,681
|
|
Voyage expenses (2)
|
(402,294
|
)
|
|
(381,306
|
)
|
|
(77,368
|
)
|
|
(53,604
|
)
|
|
(18,727
|
)
|
|||||
Vessel operating expenses (3)
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(208,601
|
)
|
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(209,131
|
)
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(175,389
|
)
|
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(182,598
|
)
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(137,164
|
)
|
|||||
Time-charter hire expense (4)
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(43,189
|
)
|
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(19,538
|
)
|
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(30,661
|
)
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(59,647
|
)
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(74,898
|
)
|
|||||
Depreciation and amortization
|
(124,002
|
)
|
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(118,514
|
)
|
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(100,481
|
)
|
|
(104,149
|
)
|
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(73,760
|
)
|
|||||
General and administrative expenses
|
(36,404
|
)
|
|
(39,775
|
)
|
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(32,879
|
)
|
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(33,199
|
)
|
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(30,403
|
)
|
|||||
(Loss) gain and write-down on sale of vessels
|
(5,544
|
)
|
|
170
|
|
|
(12,984
|
)
|
|
(20,594
|
)
|
|
771
|
|
|||||
Restructuring charges
|
—
|
|
|
(1,195
|
)
|
|
—
|
|
|
—
|
|
|
(6,795
|
)
|
|||||
Income from operations
|
123,883
|
|
|
7,204
|
|
|
1,416
|
|
|
96,752
|
|
|
193,705
|
|
|||||
Interest expense
|
(65,362
|
)
|
|
(58,653
|
)
|
|
(31,294
|
)
|
|
(29,784
|
)
|
|
(17,389
|
)
|
|||||
Interest income
|
871
|
|
|
879
|
|
|
907
|
|
|
117
|
|
|
122
|
|
|||||
Realized and unrealized (loss) gain on derivative instruments
|
(967
|
)
|
|
3,032
|
|
|
1,319
|
|
|
(964
|
)
|
|
(1,597
|
)
|
|||||
Equity income (loss)
|
2,345
|
|
|
1,220
|
|
|
(25,370
|
)
|
|
7,680
|
|
|
11,528
|
|
|||||
Income tax expenses
|
(20,103
|
)
|
|
(9,412
|
)
|
|
(5,330
|
)
|
|
(7,511
|
)
|
|
(3,406
|
)
|
|||||
Other income
|
695
|
|
|
3,182
|
|
|
329
|
|
|
1,533
|
|
|
663
|
|
|||||
Net income (loss)
|
|
$41,362
|
|
|
|
($52,548
|
)
|
|
|
($58,023
|
)
|
|
|
$67,823
|
|
|
|
$183,626
|
|
Earnings (loss) per share (5)(6)
|
|
|
|
|
|
|
|
|
|
||||||||||
- Basic
|
|
$1.23
|
|
|
|
($1.57
|
)
|
|
|
($2.48
|
)
|
|
|
$3.20
|
|
|
|
$10.08
|
|
- Diluted
|
|
$1.23
|
|
|
|
($1.57
|
)
|
|
|
($2.48
|
)
|
|
|
$3.20
|
|
|
|
$10.00
|
|
Cash dividends declared (6)
|
|
$—
|
|
|
|
$0.24
|
|
|
|
$0.96
|
|
|
|
$1.44
|
|
|
|
$1.92
|
|
Balance Sheet Data (at end of year):
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
88,824
|
|
|
54,917
|
|
|
71,439
|
|
|
94,157
|
|
|
156,520
|
|
|||||
Restricted cash - current and non-current
|
6,508
|
|
|
5,590
|
|
|
4,271
|
|
|
750
|
|
|
870
|
|
|||||
Vessels and equipment (7)
|
1,223,085
|
|
|
1,401,551
|
|
|
1,737,792
|
|
|
1,605,372
|
|
|
1,767,925
|
|
|||||
Vessels related to finance leases (7)
|
527,081
|
|
|
482,010
|
|
|
227,722
|
|
|
—
|
|
|
—
|
|
|||||
Total assets
|
2,229,476
|
|
|
2,161,086
|
|
|
2,197,348
|
|
|
1,964,370
|
|
|
2,214,803
|
|
|||||
Total debt (8)
|
1,024,467
|
|
|
1,110,695
|
|
|
1,101,210
|
|
|
933,016
|
|
|
1,164,605
|
|
|||||
Common stock and additional paid in capital
|
1,297,555
|
|
|
1,295,929
|
|
|
1,294,998
|
|
|
1,103,304
|
|
|
1,094,874
|
|
|||||
Total equity
|
989,920
|
|
|
946,933
|
|
|
1,006,601
|
|
|
932,740
|
|
|
899,479
|
|
|||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and restricted cash provided by (used for):
|
|
|
|
|
|
|
|
|
|
Operating cash flows
|
117,661
|
|
|
(7,263
|
)
|
|
80,489
|
|
|
206,546
|
|
|
201,821
|
|
|||||
Financing cash flows
|
(89,758
|
)
|
|
(3,448
|
)
|
|
(178,466
|
)
|
|
(290,853
|
)
|
|
647,678
|
|
|||||
Investing cash flows
|
8,380
|
|
|
(4,492
|
)
|
|
78,780
|
|
|
21,824
|
|
|
880,011
|
|
|||||
Number of outstanding shares of common stock at the end of the year (6)
|
33,654,576
|
|
|
33,569,630
|
|
|
33,525,205
|
|
|
19,913,017
|
|
|
19,503,827
|
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues (9)
|
541,623
|
|
|
395,187
|
|
|
353,810
|
|
|
496,939
|
|
|
515,954
|
|
|||||
EBITDA (10)
|
249,958
|
|
|
133,152
|
|
|
78,175
|
|
|
209,150
|
|
|
278,059
|
|
|||||
Adjusted EBITDA (10)
|
260,194
|
|
|
129,559
|
|
|
125,664
|
|
|
240,198
|
|
|
286,504
|
|
|||||
Capital expenditures
|
|
|
|
|
|
|
|
|
|||||||||||
Expenditures for vessels and equipment (11)
|
(11,628
|
)
|
|
(5,827
|
)
|
|
(4,732
|
)
|
|
(9,226
|
)
|
|
(848,229
|
)
|
|||||
Expenditures for dry docking
|
(46,336
|
)
|
|
(27,896
|
)
|
|
(16,239
|
)
|
|
(9,340
|
)
|
|
(39,617
|
)
|
|||||
Fleet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Average number of tankers (12)
|
|
|
|
|
|
|
|
|
|
||||||||||
Suezmax
|
29.9
|
|
|
30.0
|
|
|
21.1
|
|
|
22.0
|
|
|
13.4
|
|
|||||
Aframax
|
20.4
|
|
|
19.2
|
|
|
17.3
|
|
|
21.8
|
|
|
22.0
|
|
|||||
Product
|
10.9
|
|
|
9.0
|
|
|
7.5
|
|
|
9.2
|
|
|
12.2
|
|
|||||
VLCC
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
(1)
|
Periods prior to 2018 do not include the impact of the January 1, 2018 adoption of ASU 2014-09, Revenue from Contracts with Customers (or ASU 2014-09). Refer to Item 18: Financial Statements: Note 2 - Recent Accounting Pronouncements.
|
(2)
|
Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Voyage expenses also include certain costs associated with full service lightering activities, which include: short-term in-charter expenses, bunker fuel expenses and other port expenses. Periods prior to 2018 do not include the impact of the January 1, 2018 adoption of ASU 2014-09. Refer to Item 18: Financial Statements: Note 2 - Recent Accounting Pronouncements.
|
(3)
|
Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils, and communication expenses among others.
|
(4)
|
Time-charter hire expense includes vessel operating lease expense incurred to charter-in vessels.
|
(5)
|
Earnings (loss) per share is determined by dividing (a) net income (loss) after (deducting) adding the amount of net income (loss) attributable to the Entities under Common Control that were purchased solely with cash by (b) the weighted-average number of shares outstanding during the applicable period and the equivalent shares outstanding that are attributable to the Entities under Common Control. The calculation of weighted-average number of shares includes the total Class A and total Class B shares outstanding during the applicable period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock units using the treasury stock method. The computation of diluted loss per share does not assume such exercises.
|
(6)
|
The number of outstanding shares and per share amounts for all periods presented have been adjusted to reflect a one-for-eight reverse stock split completed on November 25, 2019.
|
(7)
|
Vessels and equipment and vessels related to finance leases consists of vessels, at cost less accumulated depreciation.
|
(8)
|
Total debt includes the short-term debt, current and long-term portion of long-term debt, and current and long-term portion of obligations related to finance leases.
|
(9)
|
Net revenues is a non-GAAP financial measure. Consistent with general practice in the shipping industry, we use “net revenues” (defined as revenues less voyage expenses) as a measure of equating revenues generated from voyage charters to revenues generated from time charters, which assists us in making operating decisions about the deployment of our vessels and their performance. Under time charters, the charterer pays the voyage expenses, whereas under voyage charters, the ship-owner pays these expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we, as the ship owner, pay the voyage expenses, we typically pass the approximate amount of these expenses on to our customers by charging higher rates under the contract to them. As a result, although revenues from different types of contracts may vary, the net revenues are comparable across the different types of contracts. We principally use net revenues because it provides more meaningful information to us than revenues, the most directly comparable GAAP financial measure. Net revenues are also widely used by investors and analysts in the shipping industry for comparing financial performance between companies and to industry averages. The following table reconciles net revenues with revenues:
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Revenues
|
$
|
943,917
|
|
|
$
|
776,493
|
|
|
$
|
431,178
|
|
|
$
|
550,543
|
|
|
$
|
534,681
|
|
Voyage expenses
|
(402,294
|
)
|
|
(381,306
|
)
|
|
(77,368
|
)
|
|
(53,604
|
)
|
|
(18,727
|
)
|
|||||
Net revenues
|
$
|
541,623
|
|
|
$
|
395,187
|
|
|
$
|
353,810
|
|
|
$
|
496,939
|
|
|
$
|
515,954
|
|
(10)
|
EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before foreign exchange gain (loss), (loss) gain and write-down on sale of vessels, realized (gains) losses on interest rate swaps, unrealized gains on derivative instruments, fair value adjustment of the equity-accounted for investment and share of the above items in non-consolidated equity-accounted for investments. EBITDA and Adjusted EBITDA are used as supplemental financial performance measures by management and by external users of our financial statements, such as investors. EBITDA and Adjusted EBITDA assist our management and investors by increasing the comparability of our fundamental performance from period to period and against the fundamental performance of other companies in our industry that provide EBITDA or Adjusted EBITDA-based information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest expense, taxes, depreciation or amortization (or other items in determining Adjusted EBITDA), which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA and Adjusted EBITDA benefits investors in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength and health in order to assess whether to continue to hold our equity.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Reconciliation of "EBITDA" and "Adjusted EBITDA” to “Net income (loss)”
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
41,362
|
|
|
(52,548
|
)
|
|
(58,023
|
)
|
|
67,823
|
|
|
183,626
|
|
|||||
Depreciation and amortization
|
124,002
|
|
|
118,514
|
|
|
100,481
|
|
|
104,149
|
|
|
73,760
|
|
|||||
Interest expense, net of interest income
|
64,491
|
|
|
57,774
|
|
|
30,387
|
|
|
29,667
|
|
|
17,267
|
|
|||||
Income tax expenses
|
20,103
|
|
|
9,412
|
|
|
5,330
|
|
|
7,511
|
|
|
3,406
|
|
|||||
EBITDA
|
$
|
249,958
|
|
|
$
|
133,152
|
|
|
$
|
78,175
|
|
|
$
|
209,150
|
|
|
$
|
278,059
|
|
Foreign exchange gain (i)
|
(486
|
)
|
|
(3,133
|
)
|
|
(79
|
)
|
|
(1,413
|
)
|
|
(613
|
)
|
|||||
Loss (gain) and write-down on sale of vessels
|
5,544
|
|
|
(170
|
)
|
|
12,984
|
|
|
20,594
|
|
|
(771
|
)
|
|||||
Realized (gain) loss on interest rate swaps
|
(2,791
|
)
|
|
(2,316
|
)
|
|
994
|
|
|
12,797
|
|
|
9,790
|
|
|||||
Unrealized loss (gain) on derivative instruments
|
5,247
|
|
|
(579
|
)
|
|
(937
|
)
|
|
(9,679
|
)
|
|
(8,193
|
)
|
|||||
Fair value adjustment of Tanker Investments Ltd.
|
—
|
|
|
—
|
|
|
26,733
|
|
|
—
|
|
|
—
|
|
|||||
Adjustments related to equity-accounted for investments (ii)
|
2,722
|
|
|
2,605
|
|
|
7,794
|
|
|
8,749
|
|
|
8,232
|
|
|||||
Adjusted EBITDA
|
$
|
260,194
|
|
|
$
|
129,559
|
|
|
$
|
125,664
|
|
|
$
|
240,198
|
|
|
$
|
286,504
|
|
(i)
|
Foreign exchange gain includes an unrealized gain of $0.6 million in 2019 (2018 - gain of $3.2 million, 2017 - loss of $0.2 million, 2016 - loss of $46.0 thousand, and 2015 - gain of $1.0 thousand).
|
(ii)
|
The following table reflects certain non-GAAP adjustments to the results of our equity-accounted for investments. The adjusted results should not be considered as an alternative to any measure of financial performance presented in accordance with GAAP. Adjustments to equity-accounted for investments include some, but not all, items that affect equity income and these measures and adjustments may vary among other companies and may not be comparable to adjustments to similarly titled measures of other companies. It should be noted that this measure includes the Adjusted EBITDA from our equity-accounted for investments. We do not have control over the operations, nor do we have any legal claim to the revenue and expenses of our equity-accounted for investments.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
|
1,903
|
|
|
1,745
|
|
|
5,250
|
|
|
5,866
|
|
|
4,517
|
|
|||||
Interest expense, net of interest income
|
819
|
|
|
876
|
|
|
2,562
|
|
|
2,868
|
|
|
2,763
|
|
|||||
Income tax (recovery) expense
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(107
|
)
|
|
602
|
|
|||||
Realized and unrealized (gain) loss on derivative instruments
|
—
|
|
|
(16
|
)
|
|
(14
|
)
|
|
115
|
|
|
344
|
|
|||||
Foreign exchange (gain) loss
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
7
|
|
|
6
|
|
|||||
Adjustments related to equity-accounted for investments
|
$
|
2,722
|
|
|
$
|
2,605
|
|
|
$
|
7,794
|
|
|
$
|
8,749
|
|
|
$
|
8,232
|
|
(11)
|
Excludes vessels purchased in connection with our acquisition of Tanker Investments Ltd. (or TIL). Please read Item 18. Financial Statements: Note 24 - Acquisition of Tanker Investments Ltd.
|
(12)
|
Average number of our tankers consists of the average number of vessels that were in our possession during a period, including time-chartered in vessels, the vessel owned by our High-Q Investment Ltd. (or High-Q) joint venture with Wah Kwong Maritime Transport Holdings Ltd. and vessels of the Entities under Common Control.
|
•
|
deterioration of worldwide, regional or national economic conditions and activity, which could further reduce or prolong the recent significant declines in oil prices, or adversely affect global demand for our services, and time charter and spot rates;
|
•
|
disruptions to our operations as a result of the potential health impact on our employees and crew, and on the workforces of our customers and business partners;
|
•
|
disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions (including for any of our onshore personnel or any of our crew members to timely embark or disembark from our vessels), increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements;
|
•
|
potential delays in the loading and discharging of cargo on or from our vessels, and any related off hire due to quarantine, worker health or regulations, which in turn could disrupt our operations and result in a reduction of revenue;
|
•
|
potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, scheduled or unscheduled maintenance or modifications, or drydocking of, our vessels (including the currently scheduled drydocks for 11 of our vessels in 2020), as a result of a lack of berths available by shipyards from a shortage in labor or due to other business disruptions;
|
•
|
potential delays in vessel inspections and related certifications by class societies, customers or government agencies;
|
•
|
potential reduced cash flows and financial condition, including potential liquidity constraints;
|
•
|
reduced access to capital, including the ability to refinance any existing obligations, as a result of any credit tightening generally or due to continued declines in global financial markets, including to the prices of publicly-traded equity securities of us, our peers and of listed companies generally;
|
•
|
a reduced ability to opportunistically sell any of our vessels on the second-hand market, either as a result of a lack of buyers or a general decline in the value of second-hand vessels;
|
•
|
a decline in the market value of our vessels, which may cause us to (a) incur impairment charges or (b) breach certain covenants under our financing agreements (including our secured facility agreements and financial leases) relating to vessel-to-loan covenants; and
|
•
|
potential deterioration in the financial condition and prospects of our customers or the third party owners whose ships we commercially manage, or attempts by charterers, suppliers or receivers to invoke force majeure contractual clauses as a result of delays or other disruptions.
|
•
|
restructuring our debt;
|
•
|
seeking additional debt or equity capital;
|
•
|
selling additional assets or equity interest in certain assets or our joint venture;
|
•
|
not paying dividends;
|
•
|
reducing, delaying or canceling business activities, acquisitions, investments or capital expenditures; or
|
•
|
seeking bankruptcy protection.
|
•
|
environmental concerns and regulations;
|
•
|
the number of newbuilding deliveries;
|
•
|
the scrapping rate of older vessels;
|
•
|
conversion of tankers to other uses; and
|
•
|
the number of vessels that are out of service.
|
•
|
supply of oil and oil products;
|
•
|
demand for oil and oil products;
|
•
|
regional availability of refining capacity;
|
•
|
global and regional economic and political conditions;
|
•
|
the distance oil and oil products are to be moved by sea; and
|
•
|
changes in seaborne and other transportation patterns.
|
•
|
a reduction in exploration for or development of new oil fields or energy projects, or the delay or cancellation of existing projects as energy companies lower their capital expenditures budgets, which may reduce our growth opportunities;
|
•
|
potential lower demand for tankers, which may reduce available charter rates and revenue to us upon chartering or rechartering of our vessels;
|
•
|
customers failing to extend or renew contracts upon expiration;
|
•
|
the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or
|
•
|
declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings.
|
•
|
identify suitable tankers or shipping companies for acquisitions or joint ventures;
|
•
|
integrate successfully any acquired tankers or businesses with our existing operations; and
|
•
|
obtain required financing for our existing and any new operations.
|
•
|
fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
|
•
|
be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet;
|
•
|
decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;
|
•
|
significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
|
•
|
incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired;
|
•
|
incur other significant charges, such as impairment of intangible assets, asset devaluation or restructuring charges; or
|
•
|
be unable to resell our acquired assets, or any portion thereof, for what we would consider fair value as a result of conditions that are beyond our control.
|
•
|
incur additional indebtedness and guarantee indebtedness;
|
•
|
pay dividends or make other distributions or repurchase or redeem our capital stock;
|
•
|
prepay certain debt;
|
•
|
issue certain preferred shares or similar equity securities;
|
•
|
make loans and investments;
|
•
|
enter into a new line of business;
|
•
|
incur or permit certain liens to exist;
|
•
|
enter into transactions with affiliates;
|
•
|
create unrestricted subsidiaries;
|
•
|
transfer, sell, convey or otherwise dispose of assets;
|
•
|
make certain acquisitions and investments;
|
•
|
enter into agreements restricting our subsidiaries’ ability to pay dividends; and
|
•
|
consolidate, merge or sell all or substantially all of our assets.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on favorable terms, if at all;
|
•
|
we will need a substantial portion of our cash flow to make principal and interest payments on our debt and lease payments on our obligations related to finance leases, reducing the funds that would otherwise be available for operations, business opportunities and dividends to our shareholders;
|
•
|
our debt level makes us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and
|
•
|
our debt level may limit our flexibility in responding to changing business and economic conditions.
|
•
|
marine disasters;
|
•
|
bad weather or natural disasters;
|
•
|
mechanical or electrical failures;
|
•
|
grounding, capsizing, fire, explosions and collisions;
|
•
|
piracy (hijacking and kidnapping);
|
•
|
cyber-attack;
|
•
|
acute-onset illness in connection with global or regional pandemics or similar public health crises;
|
•
|
human error; and
|
•
|
war and terrorism.
|
•
|
death or injury to persons, loss of property or damage to the environment and natural resources;
|
•
|
delays in the delivery of cargo;
|
•
|
loss of revenues from charters;
|
•
|
liabilities or costs to recover any spilled oil or other petroleum products and to restore the eco-system affected by the spill;
|
•
|
governmental fines, penalties or restrictions on conducting business;
|
•
|
higher insurance rates; and
|
•
|
damage to our reputation and customer relationships generally.
|
•
|
maximize revenues of our tankers;
|
•
|
acquire new tankers or obtain new time charters;
|
•
|
renew existing time charters upon their expiration;
|
•
|
successfully interact with shipyards during periods of shipyard construction constraints;
|
•
|
obtain financing on commercially acceptable terms; or
|
•
|
maintain satisfactory relationships with suppliers and other third parties.
|
•
|
our Chief Executive Officer and three of our current directors also serve as officers, directors or members of the senior leadership team of Teekay Corporation, and our Chief Financial Officer is employed by a subsidiary of Teekay Corporation. We have limited their fiduciary duties regarding corporate opportunities that may be attractive to both Teekay Corporation and us;
|
•
|
our Manager, a subsidiary of Teekay Corporation, advises our Board of Directors about the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional common stock and cash reserves, each of which can affect our ability to pay dividends to our shareholders and the amount of the performance fee payable to our Manager under the Management Agreement;
|
•
|
our executive officers and those of our Manager do not spend all their time on matters related to our business; and
|
•
|
our Manager will advise us of costs incurred by it and its affiliates that it believes are reimbursable by us.
|
Item 4.
|
Information on the Company
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
|
Owned and Leased Vessels
|
|
Chartered-in
Vessels
|
|
Total
|
|||
Fixed-rate:
|
|
|
|
|
|
|||
Suezmax Tankers
|
5
|
|
|
—
|
|
|
5
|
|
Total Fixed-Rate Fleet (1)
|
5
|
|
|
—
|
|
|
5
|
|
Spot-rate:
|
|
|
|
|
|
|||
Suezmax Tankers
|
24
|
|
|
—
|
|
|
24
|
|
Aframax Tankers
|
17
|
|
|
4
|
|
|
21
|
|
Long Range 2 Product Tankers
|
9
|
|
|
2
|
|
|
11
|
|
VLCC Tanker (2)
|
1
|
|
|
—
|
|
|
1
|
|
Total Spot Fleet
|
51
|
|
|
6
|
|
|
57
|
|
Total Tanker Fleet
|
56
|
|
|
6
|
|
|
62
|
|
Ship-to-Ship Support Vessels
|
2
|
|
|
3
|
|
|
5
|
|
Total Teekay Tankers Fleet
|
58
|
|
|
9
|
|
|
67
|
|
(1)
|
All five time-charter out contracts are scheduled to expire in 2020.
|
(2)
|
We own one VLCC through a 50/50 joint venture with Wah Kwong Maritime Transport Holdings Limited (please refer to Item 18 - Financial Statements: Note 7 - Investment in and advances to Equity-Accounted for Investment).
|
Vessel
|
Capacity
(dwt)
|
|
Built
|
|
Employment
|
|
Daily Rate
|
|
Expiration of
Charter
|
|
Aspen Spirit
|
156,800
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Athens Spirit
|
158,500
|
|
|
2012
|
|
Spot
|
|
—
|
|
—
|
Atlanta Spirit
|
158,700
|
|
|
2011
|
|
Time charter
|
|
$40,500
|
|
Oct-20
|
Baker Spirit
|
156,900
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Barcelona Spirit
|
158,500
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Beijing Spirit
|
156,500
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Cascade Spirit
|
156,900
|
|
|
2009
|
|
Time charter
|
|
$36,000
|
|
Dec-20
|
Copper Spirit
|
156,800
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Dilong Spirit
|
159,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Godavari Spirit
|
159,100
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
Iskmati Spirit
|
165,300
|
|
|
2003
|
|
Spot
|
|
—
|
|
—
|
Jiaolong Spirit
|
159,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Kaveri Spirit
|
159,100
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
London Spirit
|
158,500
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Los Angeles Spirit
|
159,200
|
|
|
2007
|
|
Spot
|
|
—
|
|
—
|
Montreal Spirit
|
150,000
|
|
|
2006
|
|
Time charter
|
|
$22,750
|
|
Aug-20
|
Moscow Spirit
|
156,500
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Narmada Spirit
|
159,200
|
|
|
2003
|
|
Spot
|
|
—
|
|
—
|
Pinnacle Spirit
|
160,400
|
|
|
2008
|
|
Spot
|
|
—
|
|
—
|
Rio Spirit
|
158,400
|
|
|
2013
|
|
Spot
|
|
—
|
|
—
|
Seoul Spirit
|
160,000
|
|
|
2005
|
|
Time charter
|
|
$35,950
|
|
Sep-20
|
Shenlong Spirit
|
159,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Summit Spirit
|
160,500
|
|
|
2008
|
|
Spot
|
|
—
|
|
—
|
Sydney Spirit
|
158,500
|
|
|
2012
|
|
Spot
|
|
—
|
|
—
|
Tahoe Spirit
|
156,900
|
|
|
2010
|
|
Time charter
|
|
$36,000
|
|
Oct-20
|
Tianlong Spirit
|
159,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Tokyo Spirit
|
150,000
|
|
|
2006
|
|
Spot
|
|
—
|
|
—
|
Vail Spirit
|
157,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Zenith Spirit
|
160,500
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Total Capacity
|
4,584,700
|
|
|
|
|
|
|
|
|
|
Vessel
|
Capacity
(dwt)
|
|
Built
|
|
Employment
|
|
Daily Rate
|
|
Expiration of
Charter
|
|
Americas Spirit
|
111,900
|
|
|
2003
|
|
Spot
|
|
—
|
|
—
|
Australian Spirit
|
111,900
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
Axel Spirit
|
115,400
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
Blackcomb Spirit
|
109,000
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Emerald Spirit
|
109,100
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Erik Spirit
|
115,500
|
|
|
2005
|
|
Spot
|
|
—
|
|
—
|
Esther Spirit
|
115,400
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
Everest Spirit
|
115,000
|
|
|
2004
|
|
Spot
|
|
—
|
|
—
|
Explorer Spirit
|
105,800
|
|
|
2008
|
|
Spot
|
|
—
|
|
—
|
Garibaldi Spirit
|
109,000
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Helga Spirit
|
115,500
|
|
|
2005
|
|
Spot
|
|
—
|
|
—
|
Matterhorn Spirit
|
114,800
|
|
|
2005
|
|
Spot
|
|
—
|
|
—
|
Navigator Spirit
|
105,800
|
|
|
2008
|
|
Spot
|
|
—
|
|
—
|
Peak Spirit
|
104,600
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Tarbet Spirit
|
107,500
|
|
|
2009
|
|
Spot
|
|
—
|
|
—
|
Whistler Spirit
|
109,100
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Yamato Spirit
|
107,600
|
|
|
2008
|
|
Spot
|
|
—
|
|
—
|
Total Capacity
|
1,882,900
|
|
|
|
|
|
|
|
|
|
Vessel
|
Capacity
(dwt)
|
|
Built
|
|
Employment
|
|
Daily Rate
|
|
Expiration of
Charter
|
|
Donegal Spirit
|
105,600
|
|
|
2006
|
|
Spot
|
|
—
|
|
—
|
Galway Spirit
|
105,600
|
|
|
2007
|
|
Spot
|
|
—
|
|
—
|
Hovden Spirit
|
105,300
|
|
|
2012
|
|
Spot
|
|
—
|
|
—
|
Leyte Spirit
|
109,700
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Limerick Spirit
|
105,600
|
|
|
2007
|
|
Spot
|
|
—
|
|
—
|
Luzon Spirit
|
109,600
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Sebarok Spirit
|
109,600
|
|
|
2011
|
|
Spot
|
|
—
|
|
—
|
Seletar Spirit
|
109,000
|
|
|
2010
|
|
Spot
|
|
—
|
|
—
|
Trysil Spirit
|
105,300
|
|
|
2012
|
|
Spot
|
|
—
|
|
—
|
Total Capacity
|
965,300
|
|
|
|
|
|
|
|
|
|
Vessel
|
Capacity
(dwt)
|
|
Built
|
|
Employment
|
|
Daily Rate
|
|
Expiration of
Charter
|
|
Hong Kong Spirit (1)
|
319,000
|
|
|
2013
|
|
Spot
|
|
—
|
|
—
|
(1)
|
The VLCC vessel, Hong Kong Spirit, is owned through a 50/50 joint venture and is employed in a spot market pool managed by a third party.
|
•
|
Expand our fleet through accretive acquisitions. Since our initial public offering, we have purchased 21 tankers from Teekay Corporation, 18 tankers resulting from the merger with TIL, 17 tankers from third parties and two tankers from Altera. In the future, we anticipate growing our fleet primarily through acquisitions of tankers from third parties, by securing additional in-chartered vessels and by ordering newbuildings.
|
•
|
Tactically manage our mix of spot, fixed-rate and full service lightering contracts. We employ a chartering strategy that seeks to capture upside opportunities in the spot market while using fixed-rate contracts to reduce downside risks. We believe that our experience operating through cycles in the tanker spot market will assist us in employing this strategy to maximize operating results.
|
•
|
Provide superior customer service by maintaining high reliability, safety, environmental and quality standards. We believe that energy companies and oil traders seek transportation partners that have a reputation for high reliability, safety, environmental and quality standards. We leverage our reputation and operational expertise to further expand these relationships with consistent delivery of superior customer service.
|
•
|
vessel maintenance (including repairs and dry docking) and certification;
|
•
|
crewing by competent seafarers;
|
•
|
purchasing of stores, bunkers and spare parts;
|
•
|
shipyard supervision;
|
•
|
insurance; and
|
•
|
financial management services.
|
•
|
our vessels and operations adhere to our operating standards;
|
•
|
the structural integrity of the vessel is being maintained;
|
•
|
machinery and equipment are being maintained to give reliable service;
|
•
|
we are optimizing performance in terms of speed and fuel consumption; and
|
•
|
our vessels' appearance supports our brand and meets customer expectations.
|
•
|
natural resources damages and the related assessment costs;
|
•
|
real and personal property damages;
|
•
|
net loss of taxes, royalties, rents, fees and other lost revenues;
|
•
|
lost profits or impairment of earning capacity due to property or natural resources damage;
|
•
|
net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and
|
•
|
loss of subsistence use of natural resources.
|
•
|
address a “worst case” scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”;
|
•
|
describe crew training and drills; and
|
•
|
identify a qualified individual with full authority to implement removal actions.
|
C.
|
Organizational Structure
|
D.
|
Property, Plant and Equipment
|
E.
|
Taxation of the Company
|
Item 4A.
|
Unresolved Staff Comments
|
Item 5.
|
Operating and Financial Review and Prospects
|
•
|
Voyage charters are charters for shorter intervals that are priced on a current or “spot” market rate; and
|
•
|
Time charters, whereby vessels are chartered to customers for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates or current market rates.
|
(1)
|
“Hire” rate refers to the basic payment from the charterer for the use of the vessel.
|
(2)
|
Voyage expenses are all expenses unique to a particular voyage, including any fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions.
|
(3)
|
Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses.
|
(4)
|
“Off-hire” refers to the time a vessel is not available for service.
|
•
|
Our voyage revenues are affected by cyclicality in the tanker markets. The cyclical nature of the tanker industry causes significant increases or decreases in the revenue we earn from our vessels, particularly those we trade in the spot market.
|
•
|
Tanker rates also fluctuate based on seasonal variations in demand. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and increased refinery maintenance. In addition, unpredictable weather patterns during the winter months tend to disrupt vessel scheduling, which historically has increased oil price volatility and oil trading activities in the winter months. As a result, revenues generated by our vessels have historically been weaker during the quarters ended June 30 and September 30, and stronger in the quarters ended December 31 and March 31.
|
•
|
The novel coronavirus (COVID-19) pandemic is dynamic and expanding. The continuation of this outbreak likely will have, and the emergence of other epidemic or pandemic crises could have, material adverse effects on our business, results of operations, or financial condition. The novel coronavirus pandemic is dynamic and expanding, and its ultimate scope, duration and effects are uncertain. We expect that this pandemic likely will result in direct and indirect adverse effects on our industry or on our business, results of operations and financial condition. COVID-19 is anticipated to result in a decline in global demand for crude oil and refined petroleum products. As our business is the transportation of crude oil and refined petroleum products on behalf of our customers, any significant decrease in demand for the cargo we transport could adversely affect demand for our vessels and services. At this stage, it is extremely difficult to determine the full impact of COVID-19 on our business. Effects of the current pandemic may include, among others: deterioration of worldwide, regional or national economic conditions and activity and of demand for crude oil and refined petroleum products; operational disruptions to us or our customers due to worker health risks and the effects of new regulations, directives or practices implemented in response to the pandemic (such as travel restrictions for individuals and vessels and quarantining and physical distancing); potential delays in (a) the loading and discharging of cargo on or from our vessels, (b) vessel inspections and related certifications by class societies, customers or government agencies and (c) maintenance, modifications or repairs to, or drydocking of, our existing vessels due to worker health or other business disruptions; reduced cash flow and financial condition, including potential liquidity constraints; potential reduced access to capital as a result of any credit tightening generally or due to continued declines in global financial markets; potential reduced ability to opportunistically sell any of our vessels on the second-hand market, either as a result of a lack of buyers or a general decline in the value of second-hand vessels; potential decreases in the market values of our vessels and any related impairment charges or breaches relating to vessel-to-loan financial covenants; and potential deterioration in the financial condition and prospects of our customers or business partners. Although disruption and effects from the novel coronavirus pandemic may be temporary, given the dynamic nature of these circumstances, the duration of business disruption and the related financial impact cannot be reasonably estimated at this time, but could materially affect our business, results of operations and financial condition. Please read "Item 3 - Key Information: Risk Factors" for more details on the potential effects of the coronavirus on our business.
|
•
|
Our U.S. Gulf lightering business competes with alternative methods of delivering crude oil to ports, which may limit our earnings in this area of our operations. Our U.S. Gulf lightering business faces competition from alternative methods of delivering crude oil shipments to port, including offshore offloading facilities. While we believe that lightering offers advantages over alternative methods of delivering crude oil to U.S. Gulf ports, our lightering revenues may be limited due to the availability of alternative methods.
|
•
|
Vessel operating and other costs are facing industry-wide cost pressures. The shipping industry continues to forecast a shortfall in qualified personnel, although weak tanker markets may ease officer shortages. We will continue to focus on our manning and training strategies to meet future needs. In addition, factors such as client demands for enhanced training and physical equipment, pressure on commodity and raw material prices, as well as changes in regulatory requirements could also contribute to operating expenditure increases. We continue to take action aimed at improving operational efficiencies, and to temper the effect of inflationary and other price escalations; however, increases to operational costs may well occur in the future.
|
•
|
The amount and timing of dry dockings of our vessels can significantly affect our revenues between periods. Our vessels are normally off hire when they are being dry docked. We had eighteen vessels drydock in 2019, compared to eight vessels which dry docked
|
•
|
an increase of $126.1 million due to higher overall average realized spot TCE rates earned by our Suezmax, Aframax and LR2 product tankers;
|
•
|
an increase of $3.5 million due to improved net results from our full service lightering (or FSL) activities from more voyage days and higher realized FSL spot rates earned;
|
•
|
an increase of $3.4 million resulting from lower general and administrative expenses primarily due to non-recurring project expenses incurred in the fourth quarter of 2018;
|
•
|
a net increase of $3.2 million primarily due to the expiry of time-charter out contracts for various vessels, which subsequently traded on spot voyages at higher average realized rates;
|
•
|
a net increase of $2.3 million primarily due to the addition of three Aframax and two LR2 chartered-in tankers that were delivered to us in the fourth quarter of 2018, first quarter of 2019, and third quarter of 2019, partially offset by the redeliveries of various in-chartered tankers to their owners in the second and third quarter of 2018; and
|
•
|
an increase of $1.2 million due to restructuring charges incurred in 2018;
|
•
|
a decrease of $10.2 million due to a higher number of off-hire days resulting from dry dockings and higher off-hire bunker expenses compared to 2018;
|
•
|
a decrease of $6.9 million due to the sale of one Suezmax tanker in 2019 and the write-down of two Suezmax tankers held for sale as of December 31, 2019; and
|
•
|
a decrease of $6.4 million due to the amortization of new dry dockings with higher costs and completion of the first dry dockings for various former Tanker Investments Limited (TIL) vessels subsequent to our acquisition of TIL in late 2017.
|
|
Year Ended December 31,
|
|||||||
(in thousands of U.S. dollars, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||
Revenues
|
908,778
|
|
|
740,806
|
|
|
23
|
%
|
Less: voyage expenses (1)
|
(413,796
|
)
|
|
(393,794
|
)
|
|
5
|
%
|
Net revenues
|
494,982
|
|
|
347,012
|
|
|
43
|
%
|
Vessel operating expenses
|
(174,779
|
)
|
|
(174,278
|
)
|
|
—
|
%
|
Time-charter hire expense
|
(37,225
|
)
|
|
(13,537
|
)
|
|
175
|
%
|
Depreciation and amortization
|
(120,468
|
)
|
|
(114,062
|
)
|
|
6
|
%
|
General and administrative expenses
|
(32,938
|
)
|
|
(36,481
|
)
|
|
(10
|
)%
|
Loss and write-down on sale of vessels
|
(5,534
|
)
|
|
—
|
|
|
100
|
%
|
Restructuring charges
|
—
|
|
|
(152
|
)
|
|
(100
|
)%
|
Income from vessel operations
|
124,038
|
|
|
8,502
|
|
|
1,359
|
%
|
Equity income
|
2,345
|
|
|
1,220
|
|
|
92
|
%
|
|
|
|
|
|
|
(1)
|
Includes $11.5 million and $12.5 million of voyage expenses for the years ended December 31, 2019 and 2018, respectively, relating to lightering support services which the STS transfer segment provided to the tanker segment for FSL operations.
|
|
Tanker Segment
|
||||||||||||||||
|
Year Ended December 31, 2019
|
||||||||||||||||
|
Revenues (1)(5)
|
Voyage Expenses (2)(5)
|
Adjustments (3)
|
TCE Revenues
|
Revenue Days
|
Average TCE per Revenue Day (3)
|
|||||||||||
|
(in thousands)
|
(in thousands)
|
(in thousands)
|
(in thousands)
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
Voyage-charter contracts - Suezmax
|
|
$424,578
|
|
|
($194,108
|
)
|
|
$3,630
|
|
|
$234,100
|
|
9,798
|
|
|
$23,892
|
|
Voyage-charter contracts - Aframax (4)(5)
|
|
$329,317
|
|
|
($162,538
|
)
|
|
$2,654
|
|
|
$169,433
|
|
7,265
|
|
|
$23,323
|
|
Voyage-charter contracts - LR2 (5)
|
|
$115,857
|
|
|
($54,677
|
)
|
|
$133
|
|
|
$61,313
|
|
3,178
|
|
|
$19,293
|
|
Time-charter out contracts - Suezmax
|
|
$15,658
|
|
|
($526
|
)
|
|
$311
|
|
|
$15,443
|
|
595
|
|
|
$25,945
|
|
Time-charter out contracts - Aframax
|
|
$1,838
|
|
|
$168
|
|
|
($178
|
)
|
|
$1,828
|
|
75
|
|
|
$24,276
|
|
Total
|
|
$887,248
|
|
|
($411,681
|
)
|
|
$6,550
|
|
|
$482,117
|
|
20,911
|
|
|
$23,055
|
|
(1)
|
Includes $6.4 million of revenue earned from vessels subject to the RSAs that were chartered to perform FSL. Excludes $6.3 million of revenue earned from our responsibilities in employing the vessels subject to the RSAs, $2.2 million of bunker commissions earned and $1.2 million of taxes recoverable from one of our customers.
|
(2)
|
Includes $11.5 million of inter-segment voyage expenses related to lightering support services provided by the STS transfer segment and $6.4 million of voyage expenses incurred by vessels subject to the RSAs that were chartered to perform FSL.
|
(3)
|
Adjustments primarily include off-hire bunker expenses, which are excluded from Average TCE per revenue day.
|
(4)
|
Includes $80.3 million of revenues and $51.9 million of voyage expenses related to the FSL business, which includes $11.5 million of inter-segment voyage expenses referenced in note (2) above relating to the FSL business by the STS transfer segment.
|
(5)
|
Excludes $18.2 million of revenues and $8.5 million of voyage expenses related to the risk-sharing agreements that were entered during the first quarter of 2019 for two time charter-in contracts that were entered during late 2018. Please read "Significant Developments in 2019 - Time Chartered-In Vessels".
|
|
Tanker Segment
|
||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||
|
Revenues (1)
|
Voyage Expenses (2)
|
Adjustments (3)
|
TCE Revenues
|
Revenue Days
|
Average TCE per Revenue Day (3)
|
|||||||||||
|
(in thousands)
|
(in thousands)
|
(in thousands)
|
(in thousands)
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||
Voyage-charter contracts - Suezmax
|
|
$371,731
|
|
|
($214,659
|
)
|
|
$1,144
|
|
|
$158,216
|
|
9,795
|
|
|
$16,154
|
|
Voyage-charter contracts - Aframax (4)
|
|
$244,557
|
|
|
($157,049
|
)
|
|
$915
|
|
|
$88,423
|
|
5,515
|
|
|
$16,034
|
|
Voyage-charter contracts - LR2
|
|
$71,275
|
|
|
($36,272
|
)
|
|
$154
|
|
|
$35,157
|
|
2,488
|
|
|
$14,131
|
|
Time-charter out contracts - Suezmax
|
|
$17,089
|
|
|
($796
|
)
|
|
$204
|
|
|
$16,497
|
|
819
|
|
|
$20,144
|
|
Time-charter out contracts - Aframax
|
|
$35,602
|
|
|
($566
|
)
|
|
$470
|
|
|
$35,506
|
|
1,674
|
|
|
$21,216
|
|
Time-charter out contracts - LR2
|
|
$7,357
|
|
|
($94
|
)
|
|
$4
|
|
|
$7,267
|
|
420
|
|
|
$17,287
|
|
Total
|
|
$747,611
|
|
|
($409,436
|
)
|
|
$2,891
|
|
|
$341,066
|
|
20,711
|
|
|
$16,469
|
|
(1)
|
Includes $15.6 million of revenue earned from the vessels that were chartered from the RSAs to perform FSL. Excludes $5.9 million of revenue earned from our responsibilities in employing the vessels subject to the RSAs and $2.9 million of bunker commissions earned.
|
(2)
|
Includes $12.5 million of inter-segment voyage expenses related to lightering support services provided by the STS transfer segment and $15.6 million of voyage expenses incurred by the vessels that were chartered from the RSAs to perform FSL.
|
(3)
|
Adjustments primarily include off-hire bunker expenses, which are excluded from Average TCE per revenue day.
|
(4)
|
Includes $104.9 million of revenues and $80.6 million of voyage expenses related to the FSL business, which includes $12.5 million of inter-segment voyage expenses referenced in note (2) above related to the FSL business by the STS transfer segment.
|
•
|
an increase of $126.1 million primarily due to a higher overall average realized spot tanker rates earned by our Suezmax, Aframax and LR2 product tankers in 2019 compared to 2018;
|
•
|
a net increase of $24.2 million primarily due to the addition of three Aframax and two LR2 in-chartered tankers that were delivered to us in the fourth quarter of 2018 and the first and third quarters of 2019, partially offset by redeliveries of three Aframax in-chartered tankers to their owners at various times during 2018 and the sale of one Suezmax tanker in the fourth quarter of 2019;
|
•
|
an increase of $4.1 million due to higher average realized spot FSL rates and a decrease in the cost of short-term in-charters to support FSL operations in 2019 compared to 2018; and
|
•
|
a net increase of $3.2 million due to the expiry of time-charter out contracts for various vessels which subsequently traded on spot voyages at higher average realized rates in 2019 compared to 2018;
|
•
|
a net decrease of $10.2 million due to a higher number of off-hire days related to dry dockings and off-hire bunker expenses.
|
•
|
the sale of one Suezmax tanker in the last quarter of 2019, which resulted in a loss of $2.4 million. Please refer to Item 18 – Financial Statements: Note 21 – Sale of Vessels and Other Assets.
|
|
Year Ended December 31,
|
|||||||
(in thousands of U.S. dollars, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||
Revenues (1)
|
46,641
|
|
|
48,175
|
|
|
(3
|
)%
|
Vessel operating expenses
|
(33,822
|
)
|
|
(34,853
|
)
|
|
(3
|
)%
|
Time-charter hire expense
|
(5,964
|
)
|
|
(6,001
|
)
|
|
(1
|
)%
|
Depreciation and amortization
|
(3,534
|
)
|
|
(4,452
|
)
|
|
(21
|
)%
|
General and administrative expenses
|
(3,466
|
)
|
|
(3,294
|
)
|
|
5
|
%
|
(Loss) gain on sale of vessels
|
(10
|
)
|
|
170
|
|
|
(106
|
)%
|
Restructuring charges
|
—
|
|
|
(1,043
|
)
|
|
(100
|
)%
|
Loss from vessel operations
|
(155
|
)
|
|
(1,298
|
)
|
|
(88
|
)%
|
(1)
|
Includes $11.5 million of revenues for the year ended December 31, 2019 (2018 - $12.5 million) relating to lightering support services which the STS transfer segment provided to the tanker segment for FSL operations.
|
|
Year Ended December 31,
|
||||
(in thousands of U.S. dollars)
|
2019
|
|
2018
|
||
Interest expense
|
(65,362
|
)
|
|
(58,653
|
)
|
Interest income
|
871
|
|
|
879
|
|
Realized and unrealized (loss) gain on derivative instruments
|
(967
|
)
|
|
3,032
|
|
Income tax expenses
|
(20,103
|
)
|
|
(9,412
|
)
|
Other income
|
695
|
|
|
3,182
|
|
|
Year Ended December 31,
|
|||||
(in thousands of U.S. dollars)
|
2019
|
|
2018
|
|
||
Net cash flow provided by (used for) operating activities
|
117,661
|
|
|
(7,263
|
)
|
|
Net cash flow used for financing activities
|
(89,758
|
)
|
|
(3,448
|
)
|
|
Net cash flow provided by (used for) investing activities
|
8,380
|
|
|
(4,492
|
)
|
|
•
|
a net increase of $120.7 million in cash inflows primarily due to higher operating earnings resulting from higher average realized spot tanker rates in 2019 and, five in-charter vessels delivered during 2019 to trade on the spot market, partially offset by a higher number of off-hire days in 2019 and the completion of two LNG terminal contracts during 2019; and
|
•
|
a net decrease of $24.5 million in cash outflows due to changes in working capital.
|
•
|
a decrease of $20.3 million in operating cash flows in 2019 relating to higher expenditures for dry-docking activities. In 2019 we drydocked nine Suezmax tankers and nine Aframax tankers, whereas in 2018, we dry docked five Suezmax tankers and four Aframax tankers.
|
•
|
a decrease of $177.6 million in cash inflows during 2019 due to lower proceeds received on the sale-leaseback financings of two tankers in the second quarter of 2019 in comparison to the sale lease-back financings of 10 tankers in the second half of 2018; and
|
•
|
an increase of $9.3 million in cash outflows during 2019 due to scheduled payments on our obligations related to our finance leases, which we entered into in September 2018, November 2018 and May 2019.
|
•
|
a net increase of $50.0 million in cash inflows during 2019 due to borrowings under our working capital loan facility;
|
•
|
a net decrease of $42.6 million in cash outflows during 2019 due to a net decrease in prepayments and scheduled repayments on our term loans and revolving credit facilities and higher proceeds from the draw-down of our term loans and revolving credit facilities during 2019; and
|
•
|
a decrease of $8.1 million in cash outflows during 2019 due to no cash dividends paid during 2019.
|
•
|
an increase of $19.4 million in cash inflows related to the sales of one Suezmax tanker and one workboat during the year ended December 31, 2019 compared to the sale of one lightering support vessel in the prior year.
|
•
|
an increase of $6.5 million in cash outflows due to higher capital expenditures for the fleet for the year ended December 31, 2019 as compared to the prior year.
|
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Beyond
2024
|
|||||||
(in millions of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Dollar-Denominated Obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scheduled repayments of revolving facilities, term loans and other debt (1)
|
343.6
|
|
|
44.0
|
|
|
100.8
|
|
|
80.4
|
|
|
65.3
|
|
|
53.1
|
|
|
—
|
|
Repayments at maturity of revolving facilities, term loans and other debt (1)
|
269.3
|
|
|
50.0
|
|
|
71.1
|
|
|
—
|
|
|
—
|
|
|
148.2
|
|
|
—
|
|
Scheduled repayments of obligations related to finance leases (2)
|
414.8
|
|
|
25.4
|
|
|
27.3
|
|
|
29.5
|
|
|
31.9
|
|
|
34.6
|
|
|
266.1
|
|
Chartered-in vessels (operating leases) (3)
|
40.6
|
|
|
34.7
|
|
|
5.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
1,068.3
|
|
|
154.1
|
|
|
205.1
|
|
|
109.9
|
|
|
97.2
|
|
|
235.9
|
|
|
266.1
|
|
(1)
|
Giving the effect to the debt refinancing completed in January 2020, excludes expected interest payments of $22.4 million (2020), $17.8 million (2021) $12.7 million (2022), $9.7 million (2023) and $4.2 million (2024). Expected interest payments are based on the existing interest rates for fixed-rate loans of 5.4% and existing interest rates for variable-rate loans at LIBOR plus margins that range from 0.30% to 2.75% at December 31, 2019. The expected interest payments do not reflect the effect of related interest rate swaps that we have used to hedge certain of our floating-rate debt.
|
(2)
|
Excludes imputed interest payments of $31.0 million (2020), $28.9 million (2021), $26.7 million (2022), $24.3 million (2023), $21.8 million (2024) and $54.3 million (thereafter).
|
(3)
|
Excludes payments required if we exercise all options to extend the terms of in-chartered leases signed as of December 31, 2018. If we exercise all options to extend the terms of signed in-chartered leases, we expect total payments of $37.1 million (2020), $25.5 million (2021) and $4.8 million (2022).
|
Aframax, Suezmax and Product Tankers
(in thousands of U.S. dollars, except number of vessels) |
# Vessels
|
|
Market
Values (1) |
|
Carrying
Values |
|||
Tankers (2)
|
1
|
|
|
13,300
|
|
|
22,501
|
|
Tankers (3)
|
34
|
|
|
933,950
|
|
|
1,255,327
|
|
Total
|
35
|
|
|
947,250
|
|
|
1,277,828
|
|
(1)
|
Market values are determined using reference to second-hand market comparables. Since vessel values can be volatile, our estimates of market value shown above may not be indicative of either the current or future prices we could obtain if we sold any of the vessels.
|
(2)
|
Undiscounted cash flows are marginally greater than the carrying values.
|
(3)
|
Undiscounted cash flows are significantly greater than the carrying values.
|
Item 6.
|
Directors, Senior Management and Employees
|
Name
|
|
Age
|
|
Position
|
Stewart Andrade
|
|
47
|
|
Chief Financial Officer
|
Arthur Bensler
|
|
62
|
|
Director and Secretary
|
Sai W. Chu
|
|
53
|
|
Director (1)(2)(3)
|
Richard T. du Moulin
|
|
73
|
|
Director (4)(5)
|
Kenneth Hvid
|
|
51
|
|
Chair (6)
|
Kevin Mackay
|
|
51
|
|
President and Chief Executive Officer
|
David Schellenberg
|
|
56
|
|
Director (4)(7)
|
(1)
|
Appointed on May 29, 2019.
|
(2)
|
Member of Conflicts Committee, and Nominating and Corporate Governance Committee.
|
(3)
|
Chair of Audit Committee.
|
(4)
|
Member of Audit Committee.
|
(5)
|
Chair of Conflicts Committee, and Nominating and Corporate Governance Committee
|
(6)
|
Appointed Chair on June 12, 2019
|
(7)
|
Appointed on June 12, 2019.
|
•
|
the integrity of our consolidated financial statements;
|
•
|
our compliance with legal and regulatory requirements;
|
•
|
the independent auditors’ qualifications and independence; and
|
•
|
the performance of our internal audit function and independent auditors.
|
•
|
reviews specific matters that the Board believes may involve conflicts of interest between us and our controlling shareholder Teekay Corporation or its affiliates (other than us) or represent material related-party transactions, including transactions between us and our or Teekay Corporation’s officers or directors or their affiliates; and
|
•
|
determines if the resolution of the conflict of interest is fair and reasonable to us and recommends to the Board action to be taken with respect to any such matter.
|
•
|
identifies individuals qualified to become Board members and recommends to the Board nominees for election as directors;
|
•
|
maintains oversight of the operation and effectiveness of the Board and our corporate governance;
|
•
|
develops, updates and recommends to the Board corporate governance principles and policies applicable to us, monitors compliance with these principles and policies;
|
•
|
discharges responsibilities of the Board relating to its compensation;
|
•
|
exercises overall responsibility for approving and evaluating our incentive compensation and equity-based plans; and
|
•
|
oversees the evaluation of the Board and its committees.
|
Identity of Person or Group
|
Class A
Common
Stock
|
|
Percent of Class A
Common Stock
Owned
|
|
Percent of Total
Class A and Class B
Common Stock
Owned
|
|||
All directors and executive officers as a group (7 persons) (1)
|
378,467
|
|
|
1.3
|
%
|
|
1.1
|
%
|
(1)
|
Excludes shares of Class A and Class B common stock beneficially owned by Teekay Corporation. Please read Item 7 - Major Shareholders and Related Party Transactions.
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
A.
|
Major Shareholders
|
Identity of Person or Group
|
Class A
Common
Stock
|
|
Percent of Class A
Common Stock
Owned
|
|
Class B
Common
Stock
|
|
Percent of Class B
Common Stock
Owned
|
|
Percent of
Total Class A
and Class B
Common
Stock Owned
|
|||||
Teekay Corporation (1)
|
5,036,306
|
|
|
17.3
|
%
|
|
4,625,997
|
|
|
100.0
|
%
|
|
28.7
|
%
|
(1)
|
The voting power represented by shares beneficially owned by Teekay Corporation is 9.7% for its Class A common stock, 44.5% for its Class B common stock and 54.0% for its total Class A and Class B common stock.
|
B.
|
Related Party Transactions
|
•
|
Teekay Corporation and its other affiliates may engage in the same or similar activities or lines of business as us, and that we will not be deemed to have an interest or expectancy in any business opportunity, transaction or other matter (each a Business Opportunity) in which Teekay Corporation or any of its other affiliates engages or seeks to engage merely because we engage in the same or similar activities or lines of business as that related to such Business Opportunity;
|
•
|
if Teekay Corporation or any of its other affiliates acquires knowledge of a potential Business Opportunity that may be deemed to constitute a corporate opportunity of both Teekay Corporation and us, then (i) none of Teekay Corporation, our Manager or any of their officers or directors will have any duty to communicate or offer such Business Opportunity to us and (ii) Teekay Corporation may pursue or acquire such Business Opportunity for itself or direct such Business Opportunity to another person or entity; and
|
•
|
any Business Opportunity of which our Manager or any person who is an officer or director of Teekay Corporation (or any of its other affiliates) and of us becomes aware shall be a Business Opportunity of Teekay Corporation.
|
•
|
Commercial services fee. Prior to October 1, 2018, we paid a commercial services fee equal to 1.25% of the gross revenue attributable to the vessels our Manager commercially managed for us and which operated under time charters or were spot traded (excluding vessels participating in the RSAs). Subsequent to our acquisition of the remaining 50% interest in TTOL in May 2017, our share of the Manager's commercial management fees has been eliminated. Commencing October 1, 2018, we elected to provide our own commercial services, effectively eliminating the prior subcontracting arrangement between our Manager and TTOL.
|
•
|
Technical services fee. Prior to October 1, 2018, we paid an annual fee per vessel for technical services our Manager provided to us. Commencing October 1, 2018, we elected to provide our own technical services, effectively eliminating the prior subcontracting arrangement between our Manager and TTOL.
|
•
|
Administrative and strategic services fees. We pay fees that reimburse our Manager for its related direct and indirect expenses in providing administrative and strategic services and which include a profit margin based on the most recent transfer pricing study performed by an independent, nationally recognized accounting firm with respect to similar services.
|
Item 8.
|
Financial Information
|
Item 9.
|
The Offer and Listing
|
Item 10.
|
Additional Information
|
a)
|
Management Agreement dated December 18, 2007 between Teekay Tankers Ltd. and Teekay Tankers Management Services Ltd., as amended by Amendment No. 1 dated as of May 7, 2009, Amendment No. 2 dated as of September 21, 2010, Amendment No. 3 dated as of January 1, 2011 and Amendment No. 4 dated as of March 31, 2019. Please read Item 4. – Information on the Company – B. Business Overview for a description of this Management Agreement.
|
b)
|
Addendum to Management Agreement dated March 23, 2016 between Teekay Tankers Ltd. and Teekay Tankers Management Services Ltd. This Addendum allows Teekay Tankers Management Services Ltd. to sub-contract commercial management of vessels to certain parties, subject to certain terms.
|
c)
|
Technical Services Agreement dated December 18, 2007 between Teekay Tankers Management Services Ltd. and Teekay Shipping Limited.
|
d)
|
Commercial Management Services Agreement dated February 29, 2008 between Teekay Tankers Management Services Ltd. and Teekay Chartering Limited.
|
e)
|
Teekay Tankers Ltd. 2007 Long-Term Incentive Plan.
|
f)
|
Registration Rights Agreement between Teekay Tankers Ltd. and Teekay Corporation.
|
g)
|
Shareholders Agreement dated September 30, 2010 for a U.S. $98,000,000 shipbuilding contract among Teekay Tankers Holding Ltd., Kriss Investment Company and High-Q Investment Ltd.
|
h)
|
Master Ship Management Agreement dated August 31, 2012 between Teekay Shipping Limited and Teekay Marine Ltd.
|
i)
|
Secured Term Loan and Revolving Credit Facility Agreement dated January 8, 2016 between Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks, for a $894.4 million long-term debt facility, consisting of both a term loan and a revolving credit facility, which is scheduled to mature in January 2021 (canceled in January 2020).
|
j)
|
Equity Distribution Agreement, dated November 18, 2015, between Teekay Tankers Ltd. and Evercore Group L.L.C. Under this Agreement, we implemented a continuous offering program through which we may, from time to time, issue Class A common stock with an aggregate offering price of up to $80.0 million, through Evercore, as sale agent.
|
k)
|
Equity Distribution Agreement, dated June 4, 2015, between Teekay Tankers Ltd. and Evercore Group L.L.C. Under this Agreement, we implemented a continuous offering program through which we may, from time to time, issue Class A common stock with an aggregate offering price of up to $80.0 million, through Evercore, as sale agent. In September 2015, we concluded this COP after selling approximately 11.3 million shares for net proceeds of $78.2 million.
|
l)
|
Registration Rights Agreement, dated August 4, 2015, by and among Teekay Tankers Ltd. and Veritable Maritime Holdings, LLC. Under this Agreement, we agreed to prepare and file a shelf registration statement to register offers and sales of certain shares of our Class A Common Stock that we issued to Veritable Maritime Holdings, LLC and certain of its affiliates as partial consideration for our purchase of certain vessels from certain wholly-owned indirect subsidiaries of Veritable Maritime Holdings, LLC.
|
m)
|
Common Stock Purchase Agreement, dated August 4, 2015, by and among Teekay Tankers Ltd. and the purchasers named therein. Under this Agreement, we issued 9,118,797 shares of our Class A Common Stock to a group of institutional investors for $6.65 per share.
|
n)
|
Secured Revolving Credit Facility Agreement dated December 18, 2017 between Teekay Tankers Ltd., Nordea Bank AB and various other banks, for a $270.0 million long-term debt facility which is scheduled to mature in December 2022 (canceled in January 2020).
|
o)
|
Agreement and Plan of Merger, dated as of May 31, 2017, by and among Teekay Tankers Ltd., Royal 2017 Ltd. and Tanker Investments Ltd. (or TIL) under which we completed a merger with TIL by acquiring all of the remaining 27.0 million issued and outstanding common
|
p)
|
Voting and Support Agreement, dated as of May 31, 2017, between Teekay Corporation, Teekay Holdings Limited, Teekay Finance Limited, Tanker Investments Ltd. and Teekay Tankers Ltd., providing, among other things, that Teekay Corporation will support the Merger with TIL (no longer in effect).
|
q)
|
Purchase Agreement, dated as of May 31, 2017, between Teekay Tankers Ltd. and Teekay Holdings Limited (or THL), under which we purchased the remaining 50% of the issued and outstanding shares of Teekay Tanker Operations Ltd. from THL.
|
r)
|
Voting and Support Agreement, dated as of September 14, 2017, by and among Teekay Tankers Ltd., Huber Capital Management, LLC and Joseph R. Huber, providing, among other things, that Huber Capital Management, LLC and Joseph R. Huber would vote certain shares of the Company's Class A Common Stock in favor of a charter amendment in connection with our merger with TIL.
|
s)
|
Share Subscription Agreement, dated January 13, 2017, between Teekay Tankers Ltd. and THL, under which we agreed to issue a total of 2,155,172 shares of our Class A common stock for an aggregate purchase price of $5,000,000.
|
t)
|
Secured Revolving Credit Facility Agreement dated January 28, 2020 between Teekay Tankers Ltd., Nordea Bank Abp, New York Branch and various other banks, for a $532.8 million long-term debt facility which is scheduled to mature in December 2024.
|
•
|
dealers in securities or currencies,
|
•
|
traders in securities that have elected the mark-to-market method of accounting for their securities,
|
•
|
persons whose functional currency is not the U.S. dollar,
|
•
|
persons holding our common stock as part of a hedge, straddle, conversion or other “synthetic security” or integrated transaction,
|
•
|
certain U.S. expatriates,
|
•
|
financial institutions,
|
•
|
insurance companies,
|
•
|
persons subject to the alternative minimum tax,
|
•
|
persons that actually or under applicable constructive ownership rules own 10% or more of our stock (by vote or value), and
|
•
|
entities that are tax-exempt for U.S. federal income tax purposes.
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for our common stock;
|
•
|
the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income in the current taxable year;
|
•
|
the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayer for that year; and
|
•
|
an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
•
|
fails to timely provide an accurate taxpayer identification number;
|
•
|
is notified by the IRS that it has failed to report all interest or distributions required to be shown on its U.S. federal income tax returns; or
|
•
|
in certain circumstances, fails to comply with applicable certification requirements.
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|
Fair Value
Asset /
(Liability)
|
|
Rate (1)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|||||||||||||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Variable rate
|
(108.6
|
)
|
|
(392.8
|
)
|
|
(86.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(588.0
|
)
|
|
(511.5
|
)
|
|
4.5
|
%
|
Fixed-rate
|
(10.0
|
)
|
|
(37.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.3
|
)
|
|
(47.5
|
)
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Obligation related to finance leases
|
(25.4
|
)
|
|
(27.3
|
)
|
|
(29.5
|
)
|
|
(31.9
|
)
|
|
(34.6
|
)
|
|
(266.1
|
)
|
|
(414.8
|
)
|
|
(442.6
|
)
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest Rate Swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Dollar-denominated interest rate swaps(2)
|
46.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46.3
|
|
|
0.1
|
|
|
1.5
|
%
|
U.S. Dollar-denominated interest rate swaps(2)
|
—
|
|
|
150.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150.0
|
|
|
0.3
|
|
|
1.6
|
%
|
U.S. Dollar-denominated interest rate swap(2)
|
—
|
|
|
50.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.0
|
|
|
0.3
|
|
|
1.2
|
%
|
(1)
|
Rate refers to the weighted-average interest rate for our long-term debt as at December 31, 2019, including the margin we pay on our variable-rate and fixed-rate debt, and the average imputed interest rate we pay for our finance lease obligations.
|
(2)
|
Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The average variable rate paid to us under our interest rate swaps is set quarterly at the three-month LIBOR.
|
Item 12.
|
Description of Securities Other than Equity Securities
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15.
|
Controls and Procedures
|
Item 16A.
|
Audit Committee Financial Expert
|
Item 16B.
|
Code of Ethics
|
Item 16C.
|
Principal Accountant Fees and Services
|
(1)
|
Audit fees represent fees for professional services provided in connection with the audit of our consolidated financial statements, review of our quarterly consolidated financial statements, as well as other professional services in connection with the review of our regulatory filings.
|
(2)
|
For 2019 and 2018, tax fees principally included corporate tax compliance fees.
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Item 16F.
|
Change in Registrant’s Certifying Accountant
|
Item 16G.
|
Corporate Governance
|
•
|
As a foreign private issuer, we are not required to obtain shareholder approval prior to the adoption of equity compensation plans or certain equity issuances, including, among others, issuing 20% or more of our outstanding common shares or voting power in a transaction.
|
Item 16H.
|
Mine Safety Disclosure
|
Item 17.
|
Financial Statements
|
Item 18.
|
Financial Statements
|
Item 19.
|
Exhibits
|
Amended and Restated Articles of Incorporation of Teekay Tankers Ltd., as amended
|
|
Amended and Restated Bylaws of Teekay Tankers Ltd.
|
|
Description of Securities Registered Under Section 12 of the Exchange Act.
|
|
Contribution, Conveyance and Assumption Agreement (1)
|
|
Management Agreement, as amended by Amendment No. 1 dated as of May 7, 2009, Amendment No. 2 dated as of September 21, 2010 and Amendment No. 3 dated as of January 1, 2011 (2)
|
|
Addendum to Management Agreement dated March 23, 2016 (3)
|
|
Amendment No. 4 to Management Agreement dated as of March 31, 2019 (4)
|
|
Gross Revenue Sharing Pool Agreement (1)
|
|
Teekay Tankers Ltd. 2007 Long-Term Incentive Plan (5)
|
|
Technical Services Agreement dated as of December 18, 2007, between Teekay Tankers Management Services Ltd. and Teekay Shipping Limited. (6)
|
|
Registration Rights Agreement between Teekay Tankers Ltd. and Teekay Corporation. (1)
|
|
Commercial Management Services Agreement dated as of February 29, 2008, between Teekay Tankers Management Services Ltd. and Teekay Chartering Limited. (6)
|
|
Shareholders Agreement dated September 30, 2010 for a U.S. $98,000,000 shipbuilding contract among Teekay Tankers Holding Ltd., Kriss Investments Company and High-Q Investment Ltd. (7)
|
|
Master Ship Management Agreement dated August 31, 2012, between Teekay Shipping Limited and Teekay Marine Ltd.(6)
|
|
Secured Term Loan and Revolving Credit Facility Agreement dated January 8, 2016 between Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks, for a $894.4 million long-term debt facility. (8)
|
|
Secured Term Loan Facility Agreement dated August 28, 2015 between Teekay Tankers Ltd., ABN AMRO Capital USA LLC and various other banks for the principal amount of $397.2 million. (8)
|
|
Secured Term Loan Facility Agreement dated January 30, 2015 between Teekay Tankers Ltd., ABN AMRO Capital USA LLC, DNB Capital LLC and DNB Markets, Inc., for the principal amount of approximately $126.6 million. (8)
|
|
Registration Rights Agreement, dated August 4, 2015, by and among Teekay Tankers Ltd. and the persons set forth on Schedule I thereto. (9)
|
|
Common Stock Purchase Agreement, dated August 4, 2015, by and among Teekay Tankers Ltd. and the purchasers named therein. (10)
|
|
Share Subscription Agreement, dated January 13, 2017, between Teekay Tankers Ltd. and Teekay Holdings Limited.(6)
|
|
Agreement and Plan of Merger, dated as of May 31, 2017, by and among Teekay Tankers Ltd., Royal 2017 Ltd. and Tanker Investments Ltd. (11)
|
|
Voting and Support Agreement, dated as of May 31, 2017, between Teekay Corporation, Teekay Holdings Limited, Teekay Finance Limited, Tanker Investments Ltd. and Teekay Tankers Ltd. (11)
|
|
Purchase Agreement, dated as of May 31, 2017, between Teekay Tankers Ltd. and Teekay Holdings Limited (11)
|
|
Voting and Support Agreement, dated as of September 14, 2017, by and among Teekay Tankers Ltd., Huber Capital Management LLC and Joseph R. Huber (12)
|
|
Secured Revolving Credit Facility Agreement dated December 18, 2017 between Teekay Tankers Ltd., Nordea Bank Abp, New York Branch and various other banks, for the principal amount of $270.0 million.(6)
|
|
Secured Revolving Credit Facility Agreement dated January 28, 2020 between Teekay Tankers Ltd., Nordea Bank AB and various other banks, for a $532.8 million long-term debt facility.
|
|
List of Subsidiaries of Teekay Tankers Ltd.
|
|
Equity Distribution Agreement, dated November 18, 2015, between Teekay Tankers Ltd. and Evercore Group L.L.C. (13)
|
|
Equity Distribution Agreement, dated June 4, 2015, between Teekay Tankers Ltd. and Evercore Group L.L.C. (14)
|
|
Rule 13a-14(a)/15d-14(a) Certification of Teekay Tankers Ltd.’s Chief Executive Officer.
|
|
Rule 13a-14(a)/15d-14(a) Certification of Teekay Tankers Ltd.’s Chief Financial Officer.
|
|
Teekay Tankers Ltd. Certification of Kevin Mackay, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Teekay Tankers Ltd. Certification of Stewart Andrade, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
(1)
|
Previously filed as Exhibits 10.1, 10.3 and 4.1 to the Company’s Amendment No. 1 to the Registration Statement on Form F-1 (Registration No. 33-147798), filed with the SEC on December 11, 2007, and hereby incorporated by reference to such Amendment No. 1 to Registration Statement.
|
(2)
|
Previously filed as Exhibit 4.2 to the Company’s Report on Form 20-F filed with the SEC on April 12, 2011 and hereby incorporated by reference to such Report.
|
(3)
|
Previously filed as Exhibit 10.4 to the Company’s Report on Form 20-F filed with the SEC on April 27, 2016 and hereby incorporated by reference to such Report.
|
(4)
|
Previously filed as Exhibit 4.4 to the Company's Report on Form 20-F filed with the SEC on April 10, 2019 and hereby incorporated by reference to such Report.
|
(5)
|
Previously filed as Exhibit 99.1 to the Company’s Registration Statement on Form, S-8 filed with the SEC on March 21, 2018 and hereby incorporated by reference to such Registration Statement.
|
(6)
|
Previously filed as Exhibits 4.5, 4.7, 4.19, 4.25 and 4.30 to the Company Report on Form 20-F filed with the SEC on April 24, 2018 and hereby incorporated by reference to such Report.
|
(7)
|
Previously filed as Exhibit 4.11 to the Company’s Report on Form 6-K furnished to the SEC on November 30, 2010 and hereby incorporated by reference to such Report.
|
(8)
|
Previously filed as Exhibit 4.19, 4.20 and 4.21 to the Company’s Report on Form 20-F filed with the SEC on April 27, 2016 and hereby incorporated by reference to such Report.
|
(9)
|
Previously filed as Exhibit 10.2 to the Company’s Report on Form 6-K filed with the SEC on November 18, 2015 and hereby incorporated by reference to such Report.
|
(10)
|
Previously filed as Exhibit 10.1 to the Company’s Report on Form 6-K furnished to the SEC on August 7, 2015 and hereby incorporated by reference to such Report.
|
(11)
|
Previously filed as Exhibits 1.1, 1.2, and 1.3 to the Company’s Report on Form 6-K filed with the SEC on June 1, 2017 and hereby incorporated by reference to such Report.
|
(12)
|
Previously filed as Appendix D to Exhibit 99.1 to the Company's Report on Form 6-K filed with the SEC on October 25, 2017 and hereby incorporated by reference to such Report.
|
(13)
|
Previously filed as Exhibit 1.1 to the Company’s Report on Form 6-K filed with the SEC on November 18, 2015 and hereby incorporated by reference to such Report.
|
(14)
|
Previously filed as Exhibit 1.1 to the Company’s Report on Form 6-K filed with the SEC on June 4, 2015 and hereby incorporated by reference to such Report.
|
|
|
|
|
TEEKAY TANKERS LTD.
|
||
|
|
|
|
|||
Date: April 14, 2020
|
|
|
|
By:
|
|
/s/ Stewart Andrade
|
|
|
|
|
|
|
Stewart Andrade
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
Year Ended
December 31, 2019 $ |
|
Year Ended
December 31, 2018 $ |
|
Year Ended
December 31, 2017 $ |
||||||
REVENUES
|
|
|
|
|
|
||||||
Voyage charter revenues (note 3)
|
881,603
|
|
|
671,928
|
|
|
125,774
|
|
|||
Time charter revenues (note 3)
|
17,495
|
|
|
59,976
|
|
|
112,100
|
|
|||
Other revenues (notes 3 and 16e)
|
44,819
|
|
|
44,589
|
|
|
53,368
|
|
|||
Net pool revenues (notes 3, 16e and 16h)
|
—
|
|
|
—
|
|
|
139,936
|
|
|||
Total revenues
|
943,917
|
|
|
776,493
|
|
|
431,178
|
|
|||
|
|
|
|
|
|
||||||
Voyage expenses
|
(402,294
|
)
|
|
(381,306
|
)
|
|
(77,368
|
)
|
|||
Vessel operating expenses (notes 16e and 16f)
|
(208,601
|
)
|
|
(209,131
|
)
|
|
(175,389
|
)
|
|||
Time-charter hire expense (note 12)
|
(43,189
|
)
|
|
(19,538
|
)
|
|
(30,661
|
)
|
|||
Depreciation and amortization
|
(124,002
|
)
|
|
(118,514
|
)
|
|
(100,481
|
)
|
|||
General and administrative expenses (note 16e)
|
(36,404
|
)
|
|
(39,775
|
)
|
|
(32,879
|
)
|
|||
(Loss) gain and write-down on sale of vessels (note 21)
|
(5,544
|
)
|
|
170
|
|
|
(12,984
|
)
|
|||
Restructuring charges
|
—
|
|
|
(1,195
|
)
|
|
—
|
|
|||
Income from operations
|
123,883
|
|
|
7,204
|
|
|
1,416
|
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
(65,362
|
)
|
|
(58,653
|
)
|
|
(31,294
|
)
|
|||
Interest income
|
871
|
|
|
879
|
|
|
907
|
|
|||
Realized and unrealized (loss) gain on derivative instruments (note 13)
|
(967
|
)
|
|
3,032
|
|
|
1,319
|
|
|||
Equity income (loss) (note 7)
|
2,345
|
|
|
1,220
|
|
|
(25,370
|
)
|
|||
Other income (note 17)
|
695
|
|
|
3,182
|
|
|
329
|
|
|||
Net income (loss) before income taxes
|
61,465
|
|
|
(43,136
|
)
|
|
(52,693
|
)
|
|||
Income tax expenses (note 22)
|
(20,103
|
)
|
|
(9,412
|
)
|
|
(5,330
|
)
|
|||
Net income (loss)
|
41,362
|
|
|
(52,548
|
)
|
|
(58,023
|
)
|
|||
|
|
|
|
|
|
||||||
Per common share amounts (note 20)
|
|
|
|
|
|
||||||
• Basic earnings (loss) per share
|
|
$1.23
|
|
|
|
($1.57
|
)
|
|
|
($2.48
|
)
|
• Diluted earnings (loss) per share
|
|
$1.23
|
|
|
|
($1.57
|
)
|
|
|
($2.48
|
)
|
• Cash dividends declared
|
—
|
|
|
|
$0.24
|
|
|
|
$0.96
|
|
|
|
|
|
|
|
|
||||||
Weighted-average number of Class A and Class B common stock outstanding (note 20)
|
|
|
|
|
|
||||||
• Basic
|
33,617,635
|
|
|
33,561,615
|
|
|
23,404,422
|
|
|||
• Diluted
|
33,731,171
|
|
|
33,561,615
|
|
|
23,404,422
|
|
|
Year Ended
December 31, 2019 $ |
|
Year Ended
December 31, 2018 $ |
|
Year Ended
December 31, 2017 $ |
|||
Cash, cash equivalents and restricted cash (used for) provided by
|
|
|
|
|
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||
Net income (loss)
|
41,362
|
|
|
(52,548
|
)
|
|
(58,023
|
)
|
Non-cash items:
|
|
|
|
|
|
|||
Depreciation and amortization
|
124,002
|
|
|
118,514
|
|
|
100,481
|
|
Loss (gain) and write-down on sale of vessels (note 21)
|
5,544
|
|
|
(170
|
)
|
|
12,984
|
|
Unrealized gain (loss) on derivative instruments (note 13)
|
5,247
|
|
|
(579
|
)
|
|
(937
|
)
|
Equity (income) loss (note 7)
|
(2,345
|
)
|
|
(1,220
|
)
|
|
25,370
|
|
Income tax expense (note 22)
|
18,489
|
|
|
6,005
|
|
|
4,644
|
|
Other
|
4,044
|
|
|
5,659
|
|
|
3,449
|
|
Change in operating assets and liabilities (note 18)
|
(30,432
|
)
|
|
(54,952
|
)
|
|
6,590
|
|
Expenditures for dry docking
|
(48,250
|
)
|
|
(27,972
|
)
|
|
(14,069
|
)
|
Net operating cash flow
|
117,661
|
|
|
(7,263
|
)
|
|
80,489
|
|
|
|
|
|
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|||
Proceeds from short-term debt (note 10)
|
200,000
|
|
|
—
|
|
|
—
|
|
Proceeds from long-term debt, net of issuance costs
|
57,086
|
|
|
81,397
|
|
|
232,825
|
|
Repayments of long-term debt
|
(101,107
|
)
|
|
(165,365
|
)
|
|
(109,006
|
)
|
Prepayment of long-term debt
|
(135,110
|
)
|
|
(137,717
|
)
|
|
(443,796
|
)
|
Prepayment of short-term debt (note 10)
|
(150,000
|
)
|
|
—
|
|
|
—
|
|
Proceeds from financing related to sales and leasebacks of vessels (note 12)
|
63,720
|
|
|
241,339
|
|
|
153,000
|
|
Scheduled repayments of obligations related to finance leases (note 12)
|
(24,221
|
)
|
|
(14,958
|
)
|
|
(4,090
|
)
|
Cash dividends paid
|
—
|
|
|
(8,052
|
)
|
|
(20,679
|
)
|
Proceeds from equity offerings, net of offering costs (note 5)
|
—
|
|
|
—
|
|
|
8,521
|
|
Proceeds from issuance of common stock, net of share issuance costs (note 5)
|
—
|
|
|
—
|
|
|
5,000
|
|
Other
|
(126
|
)
|
|
(92
|
)
|
|
(241
|
)
|
Net financing cash flow
|
(89,758
|
)
|
|
(3,448
|
)
|
|
(178,466
|
)
|
|
|
|
|
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|||
Proceeds from the sales of vessels and equipment (note 21)
|
20,008
|
|
|
589
|
|
|
52,131
|
|
Expenditures for vessels and equipment
|
(11,628
|
)
|
|
(5,827
|
)
|
|
(4,732
|
)
|
Loan repayments from equity-accounted for investment (note 7)
|
—
|
|
|
—
|
|
|
550
|
|
Return of capital from equity-accounted for investments
|
—
|
|
|
746
|
|
|
—
|
|
Cash acquired in TIL acquisition, net of transaction fees (note 24)
|
—
|
|
|
—
|
|
|
30,831
|
|
Net investing cash flow
|
8,380
|
|
|
(4,492
|
)
|
|
78,780
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
36,283
|
|
|
(15,203
|
)
|
|
(19,197
|
)
|
Cash, cash equivalents and restricted cash, beginning of the year
|
60,507
|
|
|
75,710
|
|
|
94,907
|
|
Cash, cash equivalents and restricted cash, end of the year (note 18d)
|
96,790
|
|
|
60,507
|
|
|
75,710
|
|
|
EQUITY
|
||||||||||||||||
|
Equity of Entities under Common Control
$ |
|
Common Stock and Paid-in Capital
|
|
|
|
|
||||||||||
|
Thousands of Common Stock
# |
|
Class A
$ |
|
Class B
$ |
|
Accumulated Deficit
$ |
|
Total
$ |
||||||||
Balance as at December 31, 2016
|
12,116
|
|
|
19,913
|
|
|
1,040,669
|
|
|
62,635
|
|
|
(182,680
|
)
|
|
932,740
|
|
Net income (loss)
|
1,304
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,327
|
)
|
|
(58,023
|
)
|
Proceeds from issuance of Class A common stock, net of offering costs (note 5)
|
—
|
|
|
744
|
|
|
13,521
|
|
|
—
|
|
|
—
|
|
|
13,521
|
|
Acquisition of the remaining 50% of TTOL (note 5)
|
(13,420
|
)
|
|
1,722
|
|
|
—
|
|
|
25,897
|
|
|
(25,711
|
)
|
|
(13,234
|
)
|
Acquisition of TIL (note 5)
|
—
|
|
|
11,122
|
|
|
151,262
|
|
|
—
|
|
|
—
|
|
|
151,262
|
|
Dividends declared ($0.96 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,679
|
)
|
|
(20,679
|
)
|
Equity-based compensation (note 15)
|
—
|
|
|
24
|
|
|
1,014
|
|
|
—
|
|
|
—
|
|
|
1,014
|
|
Balance as at December 31, 2017
|
—
|
|
|
33,525
|
|
|
1,206,466
|
|
|
88,532
|
|
|
(288,397
|
)
|
|
1,006,601
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,548
|
)
|
|
(52,548
|
)
|
Dividends declared ($0.24 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,052
|
)
|
|
(8,052
|
)
|
Equity-based compensation (note 15)
|
—
|
|
|
45
|
|
|
1,220
|
|
|
—
|
|
|
—
|
|
|
1,220
|
|
Other
|
—
|
|
|
—
|
|
|
(289
|
)
|
|
—
|
|
|
1
|
|
|
(288
|
)
|
Balance as at December 31, 2018
|
—
|
|
|
33,570
|
|
|
1,207,397
|
|
|
88,532
|
|
|
(348,996
|
)
|
|
946,933
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,362
|
|
|
41,362
|
|
Equity-based compensation (note 15)
|
—
|
|
|
85
|
|
|
1,660
|
|
|
—
|
|
|
—
|
|
|
1,660
|
|
Other
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(1
|
)
|
|
(35
|
)
|
Balance as at December 31, 2019
|
—
|
|
|
33,655
|
|
|
1,209,023
|
|
|
88,532
|
|
|
(307,635
|
)
|
|
989,920
|
|
1.
|
Summary of Significant Accounting Policies
|
Class of Financing Receivable
|
|
Credit Quality Indicator
|
|
Grade
|
|
December 31, 2019
$ |
|
December 31, 2018
$ |
|
Advances to equity-accounted for investments
|
|
Other internal metrics
|
|
Performing
|
|
9,930
|
|
9,930
|
|
|
|
|
|
|
|
9,930
|
|
9,930
|
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
Balance at the beginning of the year
|
56,019
|
|
|
48,460
|
|
|
49,298
|
|
Cost incurred for dry docking
|
45,371
|
|
|
27,896
|
|
|
16,239
|
|
Dry-dock amortization
|
(26,682
|
)
|
|
(20,326
|
)
|
|
(17,077
|
)
|
Write-down / sale of vessels
|
(2,901
|
)
|
|
(11
|
)
|
|
—
|
|
Balance at the end of the year
|
71,807
|
|
|
56,019
|
|
|
48,460
|
|
2.
|
Recent Accounting Pronouncements
|
•
|
Prior to January 1, 2018, the Company previously presented the net allocation for its vessels participating in RSAs in existence at that time as net pool revenues. Effective January 1, 2018, the Company has determined, for accounting purpose, that it is the principal in voyages its vessels perform that are subject to the RSAs. As such, the revenue from those voyages is presented in voyage charter revenues and the difference between this amount and the Company's net allocation from the RSA is presented as voyage expenses. This had the effect of increasing voyage charter revenues and voyage expenses for the year ended December 31, 2018 by $292.6 million. There was no cumulative impact to opening equity as at January 1, 2018.
|
•
|
The Company previously presented all accrued revenue as a component of accounts receivable. The Company has determined that if the right to such consideration is conditioned upon something other than the passage of time, such accrued revenue should be presented apart from accounts receivable. This had the effect of increasing accrued revenue and decreasing accounts receivable by $17.9 million at December 31, 2018.
|
3.
|
Revenue
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
Voyage charters (1)
|
|
|
|
|
|
|||
Suezmax
|
424,578
|
|
|
371,463
|
|
|
6,696
|
|
Aframax
|
255,702
|
|
|
125,390
|
|
|
26,250
|
|
LR2
|
119,486
|
|
|
67,345
|
|
|
—
|
|
Full service lightering
|
81,837
|
|
|
107,730
|
|
|
92,828
|
|
Total
|
881,603
|
|
|
671,928
|
|
|
125,774
|
|
|
|
|
|
|
|
|||
Time-charters
|
|
|
|
|
|
|||
Suezmax
|
15,658
|
|
|
17,088
|
|
|
45,745
|
|
Aframax
|
1,837
|
|
|
35,531
|
|
|
50,964
|
|
LR2
|
—
|
|
|
7,357
|
|
|
15,391
|
|
Total
|
17,495
|
|
|
59,976
|
|
|
112,100
|
|
|
|
|
|
|
|
|||
Other revenue
|
|
|
|
|
|
|||
Ship-to-ship support services
|
24,015
|
|
|
28,629
|
|
|
33,436
|
|
Vessel management
|
8,461
|
|
|
8,829
|
|
|
12,946
|
|
LNG terminal management, consultancy, procurement and other
|
12,343
|
|
|
7,131
|
|
|
6,986
|
|
Total
|
44,819
|
|
|
44,589
|
|
|
53,368
|
|
|
|
|
|
|
|
|||
Net pool revenues (1)
|
|
|
|
|
|
|||
Suezmax
|
—
|
|
|
—
|
|
|
91,854
|
|
Aframax
|
—
|
|
|
—
|
|
|
22,718
|
|
LR2
|
—
|
|
|
—
|
|
|
25,353
|
|
MR
|
—
|
|
|
—
|
|
|
11
|
|
Total
|
—
|
|
|
—
|
|
|
139,936
|
|
Total revenues
|
943,917
|
|
|
776,493
|
|
|
431,178
|
|
(1)
|
Prior to the January 1, 2018 adoption of ASU 2014-09, Revenue from Contracts with Customers, (or ASU 2014-09), the Company presented the net allocation for its vessels subject to RSAs as net pool revenues. Effective January 1, 2018, the Company has determined, for accounting purposes, that it is the principal in voyages performed by its vessels subject to the RSAs. As such, the revenue from those voyages is presented in voyage charter revenues and the difference between this amount and the Company's net allocation from the RSA is presented as voyage expenses. The adoption of ASU 2014-09 had the impact of increasing voyage charter revenues and voyage expenses for the year ended December 31, 2019 by $321.2 million (2018 - $292.6 million). The comparative periods do not include the impact of the January 1, 2018 adoption of ASU 2014-09.
|
4.
|
Acquisition of Entities under Common Control
|
5.
|
Public Offerings and Private Placements
|
Date
|
Number of Common Stock Issued (1)
|
|
Offering Price
(Per Share) (1) |
|
Gross Proceeds
|
|
Net Proceeds
|
|
Teekay's Ownership After the Offering
|
|
Use of Proceeds
|
||||||
January 2017
|
269,397
|
|
(2)
|
|
$18.56
|
|
|
5,000
|
|
|
5,000
|
|
|
25.7
|
%
|
|
General corporate purposes
|
May 2017
|
1,721,903
|
|
(3)
|
|
$15.04
|
|
|
25,897
|
|
|
25,897
|
|
|
31.4
|
%
|
|
Acquisition of controlling interest in TTOL
|
November 2017
|
11,122,193
|
|
(4)
|
|
$13.60
|
|
|
151,262
|
|
|
151,262
|
|
|
24.1
|
%
|
|
TIL Merger
|
Continuous offering program during 2017
|
475,000
|
|
(5)
|
$18.08 - $19.28
|
|
|
8,826
|
|
|
8,521
|
|
|
(5
|
)
|
|
General corporate purposes
|
(1)
|
Refer to note 1 for information regarding the Company's 2019 reverse stock split.
|
(2)
|
Represents Class A common shares issued in a private placement to Teekay. The gross proceeds were used for general corporate purposes, including to strengthen the Company's liquidity position and to delever its balance sheet.
|
(3)
|
Represents Class B common shares issued to Teekay as consideration for the Company's acquisition of the remaining 50% interest in TTOL, which shares had an approximate value of $25.9 million, or $15.04 per share, on the closing date of the transaction (note 4).
|
(4)
|
Represents Class A common shares issued to the shareholders of TIL as consideration for the Company's acquisition of the remaining 88.7% interest in TIL. The shares had an approximate value of $151.3 million, or $13.60 per share, on the closing date of the transaction (notes 7 and 24).
|
(5)
|
In January 2017, the Company re-opened its $80.0 million Continuous Offering Program. The portion of the Company's voting power and ownership held by Teekay at December 31, 2017 was 54.1% and 28.8% respectively.
|
6.
|
Segment Reporting
|
Year Ended December 31, 2019
|
Tanker
Segment
$
|
|
Ship-to-Ship
Transfer Segment
$
|
|
Inter-segment
Adjustment (1)
$
|
|
Total
$
|
||||
Revenues (2)
|
908,778
|
|
|
46,641
|
|
|
(11,502
|
)
|
|
943,917
|
|
Voyage expenses
|
(413,796
|
)
|
|
—
|
|
|
11,502
|
|
|
(402,294
|
)
|
Vessel operating expenses
|
(174,779
|
)
|
|
(33,822
|
)
|
|
—
|
|
|
(208,601
|
)
|
Time-charter hire expense
|
(37,225
|
)
|
|
(5,964
|
)
|
|
—
|
|
|
(43,189
|
)
|
Depreciation and amortization
|
(120,468
|
)
|
|
(3,534
|
)
|
|
—
|
|
|
(124,002
|
)
|
General and administrative expenses (4)
|
(32,938
|
)
|
|
(3,466
|
)
|
|
—
|
|
|
(36,404
|
)
|
Loss and write-down on sale of vessels
|
(5,534
|
)
|
|
(10
|
)
|
|
—
|
|
|
(5,544
|
)
|
Income (loss) from operations
|
124,038
|
|
|
(155
|
)
|
|
—
|
|
|
123,883
|
|
Equity income
|
2,345
|
|
|
—
|
|
|
—
|
|
|
2,345
|
|
Year Ended December 31, 2018
|
Tanker
Segment $ |
|
Ship-to-Ship
Transfer Segment $ |
|
Inter-segment
Adjustment (1) $ |
|
Total
$ |
||||
Revenues (2)
|
740,806
|
|
|
48,175
|
|
|
(12,488
|
)
|
|
776,493
|
|
Voyage expenses
|
(393,794
|
)
|
|
—
|
|
|
12,488
|
|
|
(381,306
|
)
|
Vessel operating expenses
|
(174,278
|
)
|
|
(34,853
|
)
|
|
—
|
|
|
(209,131
|
)
|
Time-charter hire expense
|
(13,537
|
)
|
|
(6,001
|
)
|
|
—
|
|
|
(19,538
|
)
|
Depreciation and amortization
|
(114,062
|
)
|
|
(4,452
|
)
|
|
—
|
|
|
(118,514
|
)
|
General and administrative expenses (4)
|
(36,481
|
)
|
|
(3,294
|
)
|
|
—
|
|
|
(39,775
|
)
|
Gain on sale of vessel
|
—
|
|
|
170
|
|
|
—
|
|
|
170
|
|
Restructuring charges
|
(152
|
)
|
|
(1,043
|
)
|
|
—
|
|
|
(1,195
|
)
|
Income (loss) from operations
|
8,502
|
|
|
(1,298
|
)
|
|
—
|
|
|
7,204
|
|
Equity income
|
1,220
|
|
|
—
|
|
|
—
|
|
|
1,220
|
|
Year Ended December 31, 2017
|
Tanker
Segment $ |
|
Ship-to-Ship
Transfer Segment $ |
|
Inter-segment
Adjustment (1) $ |
|
Total
$ |
||||
Revenues (2)(3)
|
391,267
|
|
|
50,422
|
|
|
(10,511
|
)
|
|
431,178
|
|
Voyage expenses (3)
|
(87,879
|
)
|
|
—
|
|
|
10,511
|
|
|
(77,368
|
)
|
Vessel operating expenses
|
(135,740
|
)
|
|
(39,649
|
)
|
|
—
|
|
|
(175,389
|
)
|
Time-charter hire expense
|
(25,666
|
)
|
|
(4,995
|
)
|
|
—
|
|
|
(30,661
|
)
|
Depreciation and amortization
|
(95,433
|
)
|
|
(5,048
|
)
|
|
—
|
|
|
(100,481
|
)
|
General and administrative expenses (4)
|
(29,539
|
)
|
|
(3,340
|
)
|
|
—
|
|
|
(32,879
|
)
|
(Loss) gain and write-down on sale of vessel
|
(13,034
|
)
|
|
50
|
|
|
—
|
|
|
(12,984
|
)
|
Income (loss) from operations
|
3,976
|
|
|
(2,560
|
)
|
|
—
|
|
|
1,416
|
|
Equity loss
|
(25,370
|
)
|
|
—
|
|
|
—
|
|
|
(25,370
|
)
|
(1)
|
The ship-to-ship transfer segment provides lightering support services to the tanker segment for full service lightering operations and the pricing for such services is based on actual costs incurred during 2019, 2018 and 2017.
|
(2)
|
Revenues, net of the inter-segment adjustment, earned from the ship-to-ship transfer segment are reflected in other revenues in the Company's consolidated statements of income (loss).
|
(3)
|
The year ended December 31, 2017 does not include the impact of the January 1, 2018 adoption of ASU 2014-09.
|
(4)
|
Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources) (note 16e).
|
|
As at
December 31, 2019 $ |
|
As at
December 31, 2018 $ |
||
Tanker
|
2,106,943
|
|
|
2,069,854
|
|
Ship-to-Ship Transfer
|
33,709
|
|
|
36,315
|
|
Cash and cash equivalents
|
88,824
|
|
|
54,917
|
|
Total assets (notes 21 and 25)
|
2,229,476
|
|
|
2,161,086
|
|
7.
|
Investment in and advances to Equity-Accounted for Investment
|
|
Year Ended December 31,
|
||||
|
2019
$ |
|
2018
$ |
||
High-Q Joint Venture
|
28,112
|
|
|
25,766
|
|
Total
|
28,112
|
|
|
25,766
|
|
a.
|
The Company has a joint venture arrangement with Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong), whereby the Company has a 50% economic interest in the High-Q joint venture, which is jointly controlled by the Company and Wah Kwong. The High-Q joint venture owns one 2013-built VLCC, which traded on a fixed time charter-out contract that expired in May 2018. Under the fixed contract, the vessel earned a daily rate and an additional amount if the daily rate of sub-charter earnings exceeded a certain threshold. The VLCC completed its dry dock in July 2018 and subsequently began trading on spot voyage charters in a pool managed by a third party.
|
b.
|
On May 31, 2017, the Company entered into a Merger Agreement to acquire the remaining 27.0 million issued and outstanding common shares of TIL, by way of a share-for-share exchange of 0.4 shares of Class A common stock of the Company for each of TIL common stock not owned by the Company. Prior to the completion of the merger, the Company accounted for its 11.3% investment in TIL using the equity method. On November 27, 2017, the Company completed the merger with TIL, and the Company remeasured its equity investment in TIL to fair value based on the relative share exchange value at the date of the acquisition, which resulted in the recognition of a net write-down of $26.7 million presented in equity income (loss) on the consolidated statements of income (loss) (note 24).
|
c.
|
On May 31, 2017, the Company acquired from Teekay Holdings Ltd., a wholly-owned subsidiary of Teekay, the remaining 50% interest in TTOL for $39.0 million, which included $13.1 million for assumed working capital (note 4). The Company issued approximately 1.7 million shares of the Company's Class B common stock to Teekay as consideration in addition to the working capital consideration of $13.1 million. As a result, the Company now consolidates TTOL and thus, all comparative periods have been retroactively adjusted to include TTOL on a consolidated basis (note 4) and TTOL's results are not included in the summary of equity-accounted for investment results below. Prior to the May 31, 2017 purchase, the Company equity-accounted for its initial 50% interest in TTOL.
|
|
As at December 31,
|
||||
|
2019
$ |
|
2018
$ |
||
Cash, cash equivalents and restricted cash
|
3,285
|
|
|
1,697
|
|
Other current assets
|
2,026
|
|
|
2,488
|
|
Vessels and equipment
|
77,984
|
|
|
81,789
|
|
|
|
|
|
||
Current portion of long-term debt
|
6,091
|
|
|
5,378
|
|
Other current liabilities
|
500
|
|
|
452
|
|
Long-term debt
|
25,651
|
|
|
31,742
|
|
Other non-current liabilities
|
18,398
|
|
|
20,436
|
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
Revenues
|
12,282
|
|
|
9,601
|
|
|
107,691
|
|
Income from operations
|
6,329
|
|
|
4,159
|
|
|
11,640
|
|
Realized and unrealized (loss) gain on derivative instruments
|
—
|
|
|
(104
|
)
|
|
26
|
|
Net income (loss)
|
4,689
|
|
|
2,441
|
|
|
(8,967
|
)
|
8.
|
Goodwill and Intangible Assets
|
|
As at
|
||||
|
December 31, 2019
|
|
|
December 31, 2018
|
|
|
$
|
|
$
|
||
Customer relationships
At cost, less accumulated amortization of $0.7 million (2018 - $8.2 million) (1) |
2,545
|
|
|
9,724
|
|
Customer contracts
At cost, less accumulated amortization of $nil (2018 - $2.7 million) (1) |
—
|
|
|
1,901
|
|
|
2,545
|
|
|
11,625
|
|
(1)
|
The customer relationships and customer contracts are being amortized over weighted average amortization periods of 10 years and 7.6 years, respectively. Amortization of intangible assets for the year ended December 31, 2019 was $2.2 million (2018 - $2.9 million, 2017 - $3.3 million). Amortization of intangible assets for the five years subsequent to 2019 is expected to be, $0.6 million (2020), $0.5 million (2021), $0.4 million (2022), $0.4 million (2023), $0.3 million (2024) and $0.3 million (thereafter).
|
9.
|
Accrued Liabilities
|
|
Year Ended December 31,
|
||||
|
2019
$ |
|
2018
$ |
||
Voyage and vessel
|
48,526
|
|
|
23,922
|
|
Corporate accruals
|
463
|
|
|
1,587
|
|
Interest and dividends
|
2,610
|
|
|
6,678
|
|
Payroll and benefits (note 16f)
|
8,136
|
|
|
8,669
|
|
Accrued liabilities
|
59,735
|
|
|
40,856
|
|
11.
|
Long-Term Debt
|
|
Year Ended December 31,
|
||||
|
2019
$ |
|
2018
$ |
||
Revolving credit facilities due through 2022
|
341,132
|
|
|
417,997
|
|
Term loans due through 2021
|
221,729
|
|
|
323,995
|
|
Total principal
|
562,861
|
|
|
741,992
|
|
Less: unamortized discount and debt issuance costs
|
(3,182
|
)
|
|
(6,586
|
)
|
Total debt
|
559,679
|
|
|
735,406
|
|
Less: current portion
|
(43,573
|
)
|
|
(106,236
|
)
|
Non-current portion of long-term debt
|
516,106
|
|
|
629,170
|
|
12.
|
Operating Leases and Obligations Related to Finance Leases
|
|
Lease Commitment
$ |
|
Non-Lease Commitment
$ |
|
Total Commitment
$ |
|||
As at December 31, 2019
|
|
|
|
|
|
|||
Payments:
|
|
|
|
|
|
|||
2020
|
16,956
|
|
|
13,406
|
|
|
30,362
|
|
2021
|
3,315
|
|
|
2,585
|
|
|
5,900
|
|
Total payments
|
20,271
|
|
|
15,991
|
|
|
36,262
|
|
Less: imputed interest
|
(711
|
)
|
|
|
|
|
||
Carrying value of operating lease liabilities
|
19,560
|
|
|
|
|
|
|
As at
|
|
As at
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|
|
$
|
|
$
|
|
Total obligations related to finance leases
|
414,788
|
|
375,289
|
|
Less: current portion
|
(25,357)
|
|
(20,896
|
)
|
Long-term obligations related to finance leases
|
389,431
|
|
354,393
|
|
13.
|
Derivative Instruments
|
|
Interest Rate Index
|
|
Notional Amount
$ |
|
Fair Value /
Carrying Amount of Asset $ |
|
Remaining
Term (years) |
|
Fixed Interest
Rate (1) |
||
LIBOR-Based Debt:
|
|
|
|
|
|
|
|
|
|
||
U.S. Dollar-denominated interest rate swaps (2)
|
LIBOR
|
|
46,281
|
|
|
97
|
|
|
1.0
|
|
1.46%
|
U.S. Dollar-denominated interest rate swaps
|
LIBOR
|
|
150,000
|
|
|
268
|
|
|
1.0
|
|
1.55%
|
U.S. Dollar-denominated interest rate swaps
|
LIBOR
|
|
50,000
|
|
|
294
|
|
|
1.0
|
|
1.16%
|
(1)
|
Excludes the margin the Company pays on its variable-rate debt, which, as of December 31, 2019 ranged from 0.30% to 3.50%.
|
(2)
|
Notional amount reduces quarterly.
|
|
Current portion of derivative assets
$ |
|
Derivative assets
$ |
|
Accounts Receivable /(Accrued liabilities)
$ |
|
Current portion of derivative liabilities
$ |
|
||||
As at December 31, 2019
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements
|
577
|
|
|
82
|
|
|
230
|
|
|
—
|
|
|
Forward freight agreements
|
—
|
|
|
—
|
|
|
—
|
|
|
(86
|
)
|
|
|
577
|
|
|
82
|
|
|
230
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
As at December 31, 2018
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements
|
2,905
|
|
|
2,973
|
|
|
422
|
|
|
—
|
|
|
Forward freight agreements
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(57
|
)
|
|
|
2,905
|
|
|
2,973
|
|
|
419
|
|
|
(57
|
)
|
|
|
Year Ended
December 31, 2019 $ |
|
Year Ended
December 31, 2018 $ |
|
Year Ended
December 31, 2017 $ |
|||
Realized gains (losses) relating to:
|
|
|
|
|
|
|||
Interest rate swaps agreements
|
2,791
|
|
|
2,316
|
|
|
(994
|
)
|
Forward freight agreements
|
1,489
|
|
|
137
|
|
|
270
|
|
Others
|
—
|
|
|
—
|
|
|
1,106
|
|
|
4,280
|
|
|
2,453
|
|
|
382
|
|
|
|
|
|
|
|
|||
Unrealized (losses) gains relating to:
|
|
|
|
|
|
|||
Interest rate swaps agreements
|
(5,218
|
)
|
|
636
|
|
|
2,099
|
|
Forward freight agreements
|
(29
|
)
|
|
(57
|
)
|
|
—
|
|
Other
|
—
|
|
|
—
|
|
|
(1,162
|
)
|
|
(5,247
|
)
|
|
579
|
|
|
937
|
|
Total realized and unrealized (loss) gain on derivatives
|
(967
|
)
|
|
3,032
|
|
|
1,319
|
|
14.
|
Fair Value Measurements
|
Level 1.
|
Observable inputs such as quoted prices in active markets;
|
Level 2.
|
Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3.
|
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Fair Value Hierarchy Level
|
|
Carrying Amount Asset/ (Liability)
$ |
|
Fair Value Asset/ (Liability)
$ |
|
Carrying Amount Asset/ (Liability)
$ |
|
Fair Value Asset/ (Liability)
$ |
||||
Recurring:
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents and restricted cash (note 18d)
|
Level 1
|
|
95,332
|
|
|
95,332
|
|
|
60,507
|
|
|
60,507
|
|
Derivative instruments (note 13)
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements (1)
|
Level 2
|
|
659
|
|
|
659
|
|
|
5,878
|
|
|
5,878
|
|
Freight forward agreements (1)
|
Level 2
|
|
(86
|
)
|
|
(86
|
)
|
|
(57
|
)
|
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
|
||||
Short-term debt (note 10)
|
Level 2
|
|
(50,000
|
)
|
|
(50,000
|
)
|
|
—
|
|
|
—
|
|
Advances to equity-accounted for investments
|
Note (2)
|
|
9,930
|
|
|
Note (2)
|
|
|
9,930
|
|
|
Note (2)
|
|
Long-term debt, including current portion (note 11)
|
Level 2
|
|
(559,679
|
)
|
|
(558,657
|
)
|
|
(735,406
|
)
|
|
(723,031
|
)
|
Obligations related to finance leases, including current portion (note 12)
|
Level 2
|
|
(414,788
|
)
|
|
(442,648
|
)
|
|
(375,289
|
)
|
|
(377,652
|
)
|
Assets held for sale (note 21)
|
Level 2
|
|
37,240
|
|
|
37,240
|
|
|
—
|
|
|
—
|
|
(1)
|
The fair values of the Company's interest rate swap agreements and FFAs at December 31, 2019 and 2018 exclude accrued interest income and expenses, which are recorded in accounts receivables and accrued liabilities, respectively, in these consolidated financial statements.
|
(2)
|
The advances to equity-accounted for investments, together with the Company’s investments in the equity-accounted for investments, form the net aggregate carrying value of the Company’s interests in the equity-accounted for investments in these consolidated financial statements. The fair values of the individual components of such aggregate interests as at December 31, 2019 and 2018 were not determinable.
|
15.
|
Capital Stock
|
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||
|
Options (#)
|
|
Weighted-Average Exercise Price ($)
|
|
Options (#)
|
|
Weighted-Average Exercise Price ($)
|
|
Options (#)
|
|
Weighted-Average Exercise Price ($)
|
|||||
Outstanding - beginning of year
|
359,496
|
|
|
18.45
|
|
|
208,788
|
|
|
24.78
|
|
|
102,793
|
|
|
31.94
|
Granted
|
277,066
|
|
|
8.00
|
|
|
155,053
|
|
|
9.76
|
|
|
110,343
|
|
|
17.84
|
Exercised
|
(30,968
|
)
|
|
8.96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Forfeited / expired
|
—
|
|
|
—
|
|
|
(4,345
|
)
|
|
12.45
|
|
|
(4,348
|
)
|
|
17.84
|
Outstanding - end of year
|
605,594
|
|
|
14.16
|
|
|
359,496
|
|
|
18.45
|
|
|
208,788
|
|
|
24.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable - end of year
|
309,609
|
|
|
19.12
|
|
|
224,687
|
|
|
21.54
|
|
|
131,906
|
|
|
26.71
|
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||
|
Options (#)
|
|
Weighted-Average Grant Date Fair Value ($)
|
|
Options (#)
|
|
Weighted-Average Grant Date Fair Value ($)
|
|
Options (#)
|
|
Weighted-Average Grant Date Fair Value ($)
|
|||||
Outstanding non-vested stock options - beginning of year
|
134,809
|
|
|
13.30
|
|
|
76,881
|
|
|
21.47
|
|
|
36,539
|
|
|
32.20
|
Granted
|
218,223
|
|
|
8.00
|
|
|
92,041
|
|
|
9.76
|
|
|
60,791
|
|
|
17.84
|
Vested
|
(57,048
|
)
|
|
15.54
|
|
|
(29,768
|
)
|
|
23.56
|
|
|
(16,101
|
)
|
|
33.10
|
Forfeited / expired
|
—
|
|
|
—
|
|
|
(4,345
|
)
|
|
12.45
|
|
|
(4,348
|
)
|
|
17.84
|
Outstanding non-vested stock options - end of year
|
295,984
|
|
|
8.96
|
|
|
134,809
|
|
|
13.30
|
|
|
76,881
|
|
|
21.47
|
16.
|
Related Party Transactions
|
a.
|
On November 27, 2017, the Company completed its merger with TIL. As consideration for the merger, the Company issued 11,122,193 Class A common shares to the TIL shareholders (other than the Company and its subsidiaries), including 1,031,250 shares to Teekay, for $151.3 million, or $13.6 per share (notes 5 and 24).
|
b.
|
On May 31, 2017, the Company acquired from Teekay Holdings Ltd., a wholly-owned subsidiary of Teekay, the remaining 50% of TTOL, which owns vessel management operations.
|
c.
|
In January 2017, the Company issued 269,397 shares of Class A common stock in a private placement to Teekay at a price of $18.6 per share for gross proceeds of $5.0 million (note 5).
|
d.
|
The Company's operations are conducted in part by its subsidiaries who receive services from Teekay's wholly-owned subsidiary, Teekay Shipping Ltd. (or the Manager), and its affiliates. The Manager provides various services under a long-term management agreement (the Management Agreement). Commencing October 1, 2018, the Company elected to receive vessel management services for its owned and leased vessels (other than certain former TIL vessels, which are technically managed by a third party) from its wholly-owned subsidiaries and will no longer contract these services from the Manager. Prior to this date, the Manager was required to provide these services to the Company, which it did by subcontracting such services from the Company's subsidiary TTOL and its affiliates.
|
e.
|
Amounts received and paid by the Company for such related party transactions for the periods indicated were as follows:
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
RSA management fees and commissions (i)
|
—
|
|
|
—
|
|
|
(2,799
|
)
|
Commercial management fees (ii)
|
—
|
|
|
—
|
|
|
(1,187
|
)
|
Vessel operating expenses - technical management fee (iii)
|
(1,202
|
)
|
|
(10,400
|
)
|
|
(8,775
|
)
|
Strategic and administrative service fees (iv)
|
(31,422
|
)
|
|
(32,918
|
)
|
|
(21,185
|
)
|
Secondment fees (v)
|
(185
|
)
|
|
(679
|
)
|
|
(382
|
)
|
Lay-up services revenues
|
—
|
|
|
—
|
|
|
33
|
|
LNG terminal services revenues (vi)
|
1,979
|
|
|
1,689
|
|
|
388
|
|
Technical management fee recoveries (vii)
|
765
|
|
|
13,811
|
|
|
7,666
|
|
Service revenues (viii)
|
320
|
|
|
1,019
|
|
|
1,939
|
|
Entities under Common Control (note 4)
|
|
|
|
|
|
|||
RSA management fees and commissions (i)
|
—
|
|
|
—
|
|
|
2,799
|
|
Commercial management fees (ii)
|
—
|
|
|
—
|
|
|
1,187
|
|
Strategic and administrative service fees (iv)
|
—
|
|
|
—
|
|
|
(7,026
|
)
|
Secondment fees (v)
|
—
|
|
|
—
|
|
|
(248
|
)
|
Technical management fee revenues (vii)
|
—
|
|
|
—
|
|
|
4,890
|
|
Service revenues (viii)
|
—
|
|
|
—
|
|
|
1,772
|
|
i
|
The Company’s share of TTOL’s fees related to revenue sharing agreements are reflected as a reduction to net pool revenues from affiliates on the Company’s consolidated statements of income (loss). The Company acquired the remaining 50% interest in TTOL on May 31, 2017 (notes 4 and note 7c). Subsequent to the acquisition, the Company's share of TTOL's fees has been eliminated.
|
ii.
|
The Manager’s commercial management fees for vessels on time-charter out contracts and spot-traded vessels, which are not included in the RSAs. These fees are reflected in voyage expenses on the Company’s consolidated statements of income (loss). Subsequent to the Company's acquisition of the remaining 50% interest in TTOL, the Company's share of the Manager's commercial management fees has been eliminated.
|
iii.
|
The cost of ship management services provided by the Manager has been presented as vessel operating expenses on the Company’s consolidated statements of income (loss). Commencing October 1, 2018, the Company has elected to receive ship management services for its own vessels from its wholly-owned subsidiaries and no longer subcontracts these services from the Manager.
|
iv.
|
The Manager’s strategic and administrative service fees have been presented in general and administrative fees, except for fees related to technical management services, which have been presented in vessel operating expenses, on the Company’s consolidated statements of income (loss). The Company’s executive officers are employees of Teekay or subsidiaries thereof, and their compensation (other than any awards under the Company’s long-term incentive plan described in note 15) is set and paid by Teekay or such other subsidiaries. The Company compensates Teekay for time spent by its executive officers on the Company’s management matters through the strategic portion of the management fee.
|
v.
|
The Company pays secondment fees for services provided by some employees of Teekay. Secondment fees have been presented in general and administrative expenses, except for fees related to technical management services, which have been presented in vessel operating expenses on the Company's consolidated statements of income (loss).
|
vi.
|
In November 2016, the Company's ship-to-ship transfer business signed an operational and maintenance subcontract with Teekay LNG Bahrain Operations L.L.C., an entity wholly-owned by TGP, for the Bahrain LNG Import Terminal. The terminal is owned by Bahrain LNG W.I.L., a joint venture for which Teekay LNG Operating L.L.C., an entity wholly-owned by TGP, has a 30% interest. The sub-contract ended in April 2019.
|
vii.
|
The Company receives reimbursements from Teekay, for the provision of technical management services. These reimbursements have been presented in general and administrative expenses on the Company's consolidated statements of income (loss). Commencing October 1, 2018, the Company has elected to receive technical management services for its own vessels from its wholly-owned subsidiaries and no longer subcontracts these services from the Manager.
|
viii.
|
The Company recorded service revenues, relating to TTOL's administration of certain revenue sharing agreements and provision of certain commercial services to participants in the arrangements. Commencing October 1, 2018, the Company has elected to receive certain commercial services from its wholly-owned subsidiaries and will no longer subcontract these services from the Manager.
|
f.
|
The Manager and other subsidiaries of Teekay collect revenues and remit payments for expenses incurred by the Company’s vessels. Such amounts, which are presented in the consolidated balance sheets in due from affiliates or due to affiliates, are without interest or stated terms of repayment. In addition, $7.9 million and $7.6 million were payable to the Manager as at December 31, 2019 and 2018, respectively, for reimbursement of the Manager’s crewing and manning costs to operate the Company’s vessels and such amounts are included in accrued liabilities in the consolidated balance sheets.
|
g.
|
The Management Agreement provides for payment to the Manager of a performance fee in certain circumstances. If Gross Cash Available for Distribution for a given fiscal year exceeds $25.60 per share of the Company’s weighted average outstanding common stock (or the Incentive Threshold), the Company is generally required to pay a performance fee equal to 20% of all Gross Cash Available for Distribution for such year in excess of the Incentive Threshold. The Company did not incur any performance fees for the years ended December 31, 2019, 2018 and 2017. Cash Available for Distribution represents net income plus depreciation and amortization, unrealized losses from derivatives, non-cash items and any write-offs or other non-recurring items, less unrealized gains from derivatives and net income
|
h.
|
Prior to 2019, pursuant to certain RSAs, TTOL provided management services in relation to the RSAs in exchange for a fee consisting of a fixed component based on the period of management and a variable component based on the vessel's monthly earnings. Voyage revenues and voyage expenses of all vessels which operated under these RSAs were shared based on the actual earning days each vessel was available and the relative performance capabilities of each vessel. The pool receivable from affiliates as at December 31, 2019 and 2018 was nil and $56.5 million, respectively.
|
i.
|
Pursuant to a service agreement with the Teekay Aframax RSA, from time to time, the Company may hire vessels to perform full service lightering services. During 2019, 2018 and 2017, the Company recognized $8.8 million, $28.4 million and $14.1 million, respectively, related to vessels which were chartered-in from the RSA to assist with full service lightering operations. These amounts have been presented in voyage expenses on the Company's consolidated statements of income (loss).
|
17.
|
Other Income
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
Foreign exchange gain
|
486
|
|
|
3,133
|
|
|
79
|
|
Other income
|
209
|
|
|
49
|
|
|
250
|
|
Total
|
695
|
|
|
3,182
|
|
|
329
|
|
18.
|
Supplemental Cash Flow Information
|
a.
|
The changes in non-cash working capital items related to operating activities for the years ended December 31, 2019, 2018 and 2017 are as follows:
|
b.
|
Cash interest paid (including interest paid by the Entities under Common Control) during the years ended December 31, 2019, 2018, and 2017 totaled $61.8 million, $47.6 million, and $26.4 million, respectively.
|
c.
|
In November 2017, the Company acquired the outstanding shares of TIL through issuing 11.1 million Class A common shares, which was treated as a non-cash transaction in the Company's consolidated statement of cash flows. As a result of this transaction, the Company acquired $37.6 million in cash and paid $6.9 million in transaction costs (note 24).
|
d.
|
The Company maintains restricted cash deposits relating to certain contracts which were assumed as part of the acquisition of the ship-to-ship transfer business in 2015, LNG terminal management and for certain freight forward agreements (note 13). Attached to these contracts are certain performance guarantees required by the Company. The Company also maintains restricted cash deposits for the purposes of the margin requirements of the Company's obligations related to certain finance leases (note 12). Total cash, cash equivalents and restricted cash, including cash, cash equivalents and restricted cash held for sale are as follows:
|
|
As at December 31, 2019
|
|
As at December 31, 2018
|
|
As at December 31, 2017
|
|
As at December 31, 2016
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Cash and cash equivalents
|
88,824
|
|
|
54,917
|
|
|
71,439
|
|
|
94,157
|
|
Restricted cash - current
|
3,071
|
|
|
2,153
|
|
|
1,599
|
|
|
750
|
|
Restricted cash - long-term
|
3,437
|
|
|
3,437
|
|
|
2,672
|
|
|
—
|
|
Cash and cash equivalents held for sale
|
1,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restricted cash held for sale - current
|
337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,790
|
|
|
60,507
|
|
|
75,710
|
|
|
94,907
|
|
|
As at December 31, 2019
|
As at December 31, 2018
|
||
|
$
|
$
|
||
Leased assets obtained in exchange for new operating lease liabilities
|
23,725
|
|
—
|
|
19.
|
Liquidity
|
20.
|
Earnings (Loss) Per Share
|
|
Year Ended December 31,
|
|||||||
|
2019
$ |
|
2018
$ |
|
2017
$ |
|||
Net income (loss)
|
41,362
|
|
|
(52,548
|
)
|
|
(58,023
|
)
|
|
|
|
|
|
|
|||
Weighted-average number of common shares - basic (1)
|
33,617,635
|
|
|
33,561,615
|
|
|
23,404,422
|
|
Dilutive effect of stock-based awards
|
113,536
|
|
|
—
|
|
|
—
|
|
Weighted average number of common shares - diluted (1)
|
33,731,171
|
|
|
33,561,615
|
|
|
23,404,422
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|||
- Basic
|
1.23
|
|
|
(1.57
|
)
|
|
(2.48
|
)
|
- Diluted
|
1.23
|
|
|
(1.57
|
)
|
|
(2.48
|
)
|
(1)
|
The weighted-average number of common shares outstanding for periods prior to May 2017 has been retroactively adjusted to include the approximately 1.7 million shares of the Company's Class B common stock issued to Teekay as consideration for the acquisition of 50% of TTOL in May 2017.
|
21.
|
Sale of Vessels and Other Assets
|
As at December 31, 2019
|
Tanker Segment
$
|
|
Ship-to-Ship Transfer Segment
$
|
|
Total
$
|
|||
|
|
|
|
|
|
|||
Cash and cash equivalents
|
—
|
|
|
1,121
|
|
|
1,121
|
|
Restricted cash - current
|
—
|
|
|
337
|
|
|
337
|
|
Accounts receivable
|
—
|
|
|
4,129
|
|
|
4,129
|
|
Bunker and lube oil inventory
|
2,017
|
|
|
—
|
|
|
2,017
|
|
Prepaid expenses
|
—
|
|
|
510
|
|
|
510
|
|
Vessel and equipment
|
37,240
|
|
|
7,562
|
|
|
44,802
|
|
Intangibles (i)
|
—
|
|
|
6,880
|
|
|
6,880
|
|
Goodwill (i)
|
—
|
|
|
5,633
|
|
|
5,633
|
|
Other non current assets
|
—
|
|
|
29
|
|
|
29
|
|
Total assets held for sale
|
39,257
|
|
|
26,201
|
|
|
65,458
|
|
Current liabilities
|
—
|
|
|
2,650
|
|
|
2,650
|
|
Other long term liabilities
|
—
|
|
|
330
|
|
|
330
|
|
Total liabilities associated with assets held for sale
|
—
|
|
|
2,980
|
|
|
2,980
|
|
Net assets held for sale
|
39,257
|
|
|
23,221
|
|
|
62,478
|
|
Net assets to be sold
|
39,257
|
|
|
23,221
|
|
|
62,478
|
|
i.
|
91% of the intangible assets and goodwill relating to support services and 100% of the LNG business intangibles and goodwill have been allocated as held for sale.
|
22.
|
Income Tax Expenses
|
|
Year Ended December 31,
|
||||
|
2019
$ |
|
2018
$ |
||
Balance of unrecognized tax benefits as at January 1
|
32,059
|
|
|
26,054
|
|
Increases for positions related to the current year
|
3,385
|
|
|
5,399
|
|
Changes for positions taken in prior years
|
15,781
|
|
|
1,701
|
|
Decreases related to statute of limitations
|
(1,646
|
)
|
|
(1,095
|
)
|
Balance of unrecognized tax benefits as at December 31
|
49,579
|
|
|
32,059
|
|
23.
|
Shipbuilding Contracts
|
a.
|
On January 28, 2020, the Company entered into an agreement to sell the non-U.S. portion of its ship-to-ship support services business, as well its LNG terminal management business for $26 million, subject to adjustment for the final amounts of cash and other working capital present on the closing date. The sale is expected to close in the second quarter of 2020.
|
b.
|
On January 28, 2020 the Company entered into a new five-year, $532.8 million revolving credit facility to refinance 31 vessels which is scheduled to mature in late 2024, of which approximately $455 million which was used to repay the Company's two revolving facilities and the Company's term loan facility which was scheduled to mature in 2021.
|
c.
|
In January 2020, the Company entered into agreements to sell two Suezmax tankers for an aggregate price of $40.8 million. One vessel and the related bunkers was classified as held for sale on the consolidated balance sheet as at December 31, 2019 (note 21) and the net book value was written down to it sales price less closing costs. The vessel was then delivered in February 2020. The other vessel was delivered to its new owner in March 2020 and the Company expects to recognize a loss on sale of $2.7 million in the quarter ended March 31, 2020.
|
d.
|
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. The Company has not yet experienced a material negative impact to its business, results of operations, or financial position as a result of COVID-19. The future financial effects to the Company, if any, of COVID-19 cannot be reasonably estimated at this time.
|
•
|
485,000,000 shares are designated as Class A common stock, par value $0.01 per share;
|
•
|
100,000,000 shares are designated as Class B common stock, par value $0.01 per share; and
|
•
|
100,000,000 shares are designated as preferred stock, par value $0.01 per share.
|
•
|
upon any transfer of shares of Class B common stock to a holder other than Teekay Corporation (or any of its affiliates (not including us and our subsidiaries) or any successor to Teekay Corporation’s business or to all or substantially all of its assets), each of such transferred shares of Class B common stock shall automatically convert into one share of Class A common stock upon such transfer; and
|
•
|
each share of our Class B common stock will automatically convert into one share of our Class A common stock on the date, if any, that the aggregate number of outstanding shares of Class A common stock and Class B common stock beneficially owned by Teekay Corporation and its affiliates (not including us and our subsidiaries) or any successor to Teekay Corporation’s business or all or substantially all of its assets represents less than 15% of the aggregate number of shares of our then outstanding common stock.
|
•
|
the designation of the series;
|
•
|
the number of shares of the series;
|
•
|
the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions of such series; and
|
•
|
the voting rights, if any, of the holders of the series.
|
Name of Subsidiary
|
State or Jurisdiction of Incorporation
|
Proportion of Ownership Interest
|
Americas Spirit L.L.C.
|
Marshall Islands
|
100%
|
Ashkini Spirit L.L.C.
|
Marshall Islands
|
100%
|
Athens Spirit L.L.C.
|
Marshall Islands
|
100%
|
Atlanta Spirit L.L.C.
|
Marshall Islands
|
100%
|
Australian Spirit L.L.C.
|
Marshall Islands
|
100%
|
Axel Spirit L.L.C.
|
Marshall Islands
|
100%
|
Barcelona Spirit L.L.C.
|
Marshall Islands
|
100%
|
Beijing Spirit L.L.C.
|
Marshall Islands
|
100%
|
Dilong Spirit L.L.C.
|
Marshall Islands
|
100%
|
Donegal Spirit L.L.C.
|
Marshall Islands
|
100%
|
Erik Spirit L.L.C.
|
Marshall Islands
|
100%
|
Esther Spirit L.L.C.
|
Marshall Islands
|
100%
|
Everest Spirit Holding L.L.C.
|
Marshall Islands
|
100%
|
Explorer Spirit L.L.C.
|
Marshall Islands
|
100%
|
Freeport Landholdings LLC
|
USA
|
100%
|
Galway Spirit L.L.C.
|
Marshall Islands
|
100%
|
Godavari Spirit L.L.C.
|
Marshall Islands
|
100%
|
Helga Spirit L.L.C.
|
Marshall Islands
|
100%
|
Iskmati Spirit L.L.C.
|
Marshall Islands
|
100%
|
Jiaolong Spirit L.L.C.
|
Marshall Islands
|
100%
|
Kaveri Spirit L.L.C.
|
Marshall Islands
|
100%
|
Limerick Spirit L.L.C.
|
Marshall Islands
|
100%
|
LNG STS Limited
|
United Kingdom
|
100%
|
London Spirit L.L.C.
|
Marshall Islands
|
100%
|
Los Angeles Spirit L.L.C.
|
Marshall Islands
|
100%
|
Matterhorn Spirit L.L.C.
|
Marshall Islands
|
100%
|
Montreal Spirit L.L.C.
|
Marshall Islands
|
100%
|
Moscow Spirit L.L.C.
|
Marshall Islands
|
100%
|
Narmada Spirit L.L.C.
|
Marshall Islands
|
100%
|
Navigator Spirit L.L.C
|
Marshall Islands
|
100%
|
Pinnacle Spirit L.L.C.
|
Marshall Islands
|
100%
|
Rio Spirit L.L.C.
|
Marshall Islands
|
100%
|
Seoul Spirit L.L.C.
|
Marshall Islands
|
100%
|
Shenlong Spirit L.L.C.
|
Marshall Islands
|
100%
|
SPT Marine Transfer Services Ltd.
|
Bermuda
|
100%
|
STX Hull No. S1672 L.L.C.
|
Marshall Islands
|
100%
|
Summit Spirit L.L.C.
|
Marshall Islands
|
100%
|
Sydney Spirit L.L.C.
|
Marshall Islands
|
100%
|
T.I.L. Holdings Ltd.
|
Marshall Islands
|
100%
|
T.I.L. I L.L.C.
|
Marshall Islands
|
100%
|
T.I.L. II L.L.C.
|
Marshall Islands
|
100%
|
T.I.L. III L.L.C.
|
Marshall Islands
|
100%
|
T.I.L. IV L.L.C.
|
Marshall Islands
|
100%
|
T.I.L. IX L.L.C.
|
Marshall Islands
|
100%
|
1.
|
I have reviewed this Annual Report on Form 20-F of Teekay Tankers Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
Date: April 14, 2020
|
|
By:
|
/s/ Kevin Mackay
|
|
|
|
Kevin Mackay
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 20-F of Teekay Tankers Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
Date: April 14, 2020
|
|
By:
|
/s/ Stewart Andrade
|
|
|
|
Stewart Andrade
|
|
|
|
Chief Financial Officer
|
(1)
|
The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Kevin Mackay
|
|
|
Kevin Mackay
|
|
|
President and Chief Executive Officer
|
|
(1)
|
The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
The information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Stewart Andrade
|
|
|
Stewart Andrade
|
|
|
Chief Financial Officer
|
|