| Segment Reporting |
Segment Reporting The Company allocates capital and assesses performance from the separate perspectives of its two publicly-traded subsidiaries Teekay LNG and Teekay Tankers (together, the Daughter Companies), Teekay and its remaining subsidiaries (or Teekay Parent), and its equity-accounted investment in Teekay Offshore, as well as from the perspective of the Company's lines of business. The primary focus of the Company’s organizational structure, internal reporting and allocation of resources by the chief operating decision maker is on the Daughter Companies, Teekay Parent and its equity-accounted investment in Teekay Offshore (the Legal Entity approach) and its segments are presented accordingly on this basis. The Company (excluding its equity-accounted investment in Teekay Offshore) has three primary lines of business: (1) offshore production (floating production, storage and off-loading (or FPSO) units), (2) liquefied gas carriers (liquefied natural gas (or LNG) and liquefied petroleum gas (or LPG) carriers), and (3) conventional tankers. The Company manages these businesses for the benefit of all stakeholders. The Company incorporates the primary lines of business within its segments, as in certain cases there is more than one line of business in each Daughter Company and the Company believes this information allows a better understanding of the Company’s performance and prospects for future net cash flows. Subsequent to the Brookfield Transaction on September 25, 2017, the Company assesses the performance of, and makes decisions to allocate resources to, its investment in Teekay Offshore as a whole and not at the level of the individual lines of business within Teekay Offshore, which are (1) offshore production (FPSO units), (2) offshore logistics (shuttle tankers, the HiLoad DP unit, floating storage and offtake (or FSO) units, a unit for maintenance and safety (or UMS) and long-distance towing and offshore installation vessels), and (3) conventional tankers. The Company has therefore determined that its equity-accounted investment in Teekay Offshore represents a separate operating segment and that individual lines of business within Teekay Offshore are no longer disclosed in the Company's operating segments. All segment information for prior periods has been retroactively adjusted to be consistent with the change in segment presentation of Teekay Offshore, beginning with the third quarter of 2017. The following table includes results for the Company’s revenues by segment for the three and nine months ended September 30, 2017 and 2016: | | | | | | | | | | | Revenues | | Three Months Ended | Nine Months Ended | | September 30, | September 30, | | 2017 | 2016 | 2017 | 2016 | | $ | $ | $ | $ | Teekay Offshore(1)(2) | 255,781 |
| 286,298 |
| 796,711 |
| 877,470 |
| | | | | | Teekay LNG | | | | | Liquefied Gas Carriers(2) | 92,700 |
| 87,260 |
| 271,078 |
| 250,342 |
| Conventional Tankers | 11,585 |
| 13,398 |
| 35,291 |
| 45,328 |
| | 104,285 |
| 100,658 |
| 306,369 |
| 295,670 |
| | | | | | Teekay Tankers(3) | | | | | Conventional Tankers(2) | 91,238 |
| 109,554 |
| 330,512 |
| 427,349 |
| | | | | | Teekay Parent | | | | | Offshore Production | 51,254 |
| 53,592 |
| 143,769 |
| 167,398 |
| Conventional Tankers(2) | 1,041 |
| 6,982 |
| 4,965 |
| 30,566 |
| Other | 19,727 |
| 17,258 |
| 47,149 |
| 60,698 |
| | 72,022 |
| 77,832 |
| 195,883 |
| 258,662 |
| | | | | | Eliminations and other | (22,545 | ) | (26,703 | ) | (71,266 | ) | (82,785 | ) | | 500,781 |
| 547,639 |
| 1,558,209 |
| 1,776,366 |
|
| | (1) | On September 25, 2017, the Company deconsolidated Teekay Offshore (see Note 3). The revenue figures above are those of Teekay Offshore until the date of deconsolidation. |
| | (2) | Certain vessels are chartered between the Daughter Companies or Teekay Offshore and Teekay Parent. The amounts in the table below represent revenue earned by each segment from other segments within the group. Such intersegment revenue for the three and nine months ended September 30, 2017 and 2016 is as follows: |
| | | | | | | | | | | Three Months Ended | Nine Months Ended | | September 30, | September 30, | | 2017 | 2016 | 2017 | 2016 | | $ | $ | $ | $ | Teekay Offshore | 9,211 |
| 13,554 |
| 33,429 |
| 38,472 |
| Teekay LNG - Liquefied Gas Carriers | 9,296 |
| 9,429 |
| 26,851 |
| 28,075 |
| Teekay Tankers - Conventional Tankers | — |
| 417 |
| — |
| 5,405 |
| Teekay Parent - Conventional Tankers | — |
| — |
| — |
| — |
| | 18,507 |
| 23,400 |
| 60,280 |
| 71,952 |
|
(3) On May 31, 2017, Teekay Tankers acquired from Teekay Parent the remaining 50% interest in Teekay Tanker Operations Ltd. (or TTOL); Teekay Tankers acquired its initial 50% interest in TTOL in August 2014. As a result of the acquisition, the financial information for Teekay Tankers prior to the date that Teekay Tankers acquired its remaining 50% interest in TTOL is retroactively adjusted to include 100% of the results of TTOL during the periods they were under common control of Teekay and had begun operations. The following table includes results for the Company’s (loss) income from vessel operations by segment for the three and nine months ended September 30, 2017 and 2016: | | | | | | | | | | | (Loss) Income from Vessel Operations(1) | | Three Months Ended | Nine Months Ended | | September 30, | September 30, | | 2017 | 2016 | 2017 | 2016 | | $ | $ | $ | $ | Teekay Offshore(2) | 40,384 |
| 61,739 |
| 147,060 |
| 174,309 |
| | | | | | Teekay LNG | | | | | Liquefied Gas Carriers | 44,902 |
| 48,009 |
| 128,281 |
| 130,682 |
| Conventional Tankers | (34,580 | ) | 2,625 |
| (42,010 | ) | (15,511 | ) |
| 10,322 |
| 50,634 |
| 86,271 |
| 115,171 |
|
| | | | | Teekay Tankers(3) | | | | | Conventional Tankers | (13,734 | ) | (3,207 | ) | (1,406 | ) | 86,565 |
|
| | | | | Teekay Parent | | | | | Offshore Production | (223,957 | ) | (13,116 | ) | (262,986 | ) | (39,159 | ) | Conventional Tankers | (3,077 | ) | (363 | ) | (8,524 | ) | (13,644 | ) | Other | 216 |
| (5,922 | ) | (20,370 | ) | (22,174 | ) |
| (226,818 | ) | (19,401 | ) | (291,880 | ) | (74,977 | ) |
| | | | | | (189,846 | ) | 89,765 |
| (59,955 | ) | 301,068 |
|
| | (1) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
| | (2) | On September 25, 2017, the Company deconsolidated Teekay Offshore (see Note 3). The income from vessel operations figures above are those of Teekay Offshore until the date of deconsolidation. |
| | (3) | On May 31, 2017, Teekay Tankers acquired from Teekay Parent, the remaining 50% interest in TTOL; Teekay Tankers acquired its initial 50% interest in TTOL in August 2014. As a result of the acquisition, the financial information for Teekay Tankers prior to the date that Teekay Tankers acquired its remaining 50% interest in TTOL is retroactively adjusted to include 100% of the results of TTOL during the periods they were under common control of Teekay and had begun operations. |
Commencing on September 25, 2017, the Company accounts for its investment in Teekay Offshore using the equity method, and recognized an equity loss of $3.1 million for the three and nine months ended September 30, 2017. In the period after deconsolidation of Teekay Offshore to September 30, 2017, Teekay Offshore incurred impairment charges of $316.7 million which did not impact the equity loss recognized by Teekay as Teekay recorded its equity-accounted investment in Teekay Offshore at fair value on September 25, 2017.
A reconciliation of total segment assets to total assets presented in the accompanying unaudited consolidated balance sheets is as follows:
| | | | | |
| September 30, 2017 | December 31, 2016 |
| $ | $ | Teekay Offshore | 302,706 |
| 5,354,702 |
| Teekay LNG - Liquefied Gas Carriers | 4,307,812 |
| 3,957,088 |
| Teekay LNG - Conventional Tankers | 115,168 |
| 193,553 |
| Teekay Tankers - Conventional Tankers | 1,675,347 |
| 1,870,211 |
| Teekay Parent - Offshore Production | 382,790 |
| 635,364 |
| Teekay Parent - Conventional Tankers | 32,153 |
| 55,937 |
| Teekay Parent - Other | 59,882 |
| 13,208 |
| Cash and cash equivalents | 453,283 |
| 567,994 |
| Other assets not allocated | 124,793 |
| 281,244 |
| Eliminations | (23,086 | ) | (114,549 | ) | Consolidated total assets | 7,430,848 |
| 12,814,752 |
|
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