UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________________________

FORM 6-K/A
__________________________________________________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2018
Commission file number 1- 33867
__________________________________________________________

TEEKAY TANKERS LTD.

(Exact name of Registrant as specified in its charter)
__________________________________________________________

4th Floor, Belvedere Building
69 Pitts Bay Road
Hamilton, HM 08 Bermuda
(Address of principal executive office)
__________________________________________________________


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F  ý            Form 40- F  ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).
Yes  ¨            No   ý
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).
Yes  ¨            No   ý










 





EXPLANATORY NOTE

This Amendment No. 1 to the Report on Form 6-K for the quarter ended June 30, 2018, originally filed with the Securities and Exchange Commission on August 23, 2018 (the “Form 6-K”), is being filed solely for the purposes of furnishing Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T. This Exhibit was not previously filed.

Other than as expressly set forth above, this Form 6-K/A does not, and does not purport to, amend, update or restate the information in any other item of the Form 6-K, or reflect any events that have occurred after the Form 6-K was originally filed. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.








Item 6.
Exhibits
Exhibit Number
Description
101
The following financial information from Teekay Tankers Ltd's Report on Form 6-K for the quarter ended June 30, 2018, filed with the SEC on August 23, 2018, formatted in Extensible Business Reporting Language (XBRL):

(i) Unaudited Consolidated Statements of Loss for the three and six months ended June 30, 2018 and 2017;
(ii) Unaudited Consolidated Balance Sheets as at June 30, 2018 and December 31, 2017;
(iii) Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017;
(iv) Unaudited Consolidated Statement of Changes In Equity for the six months ended June 30, 2018; and
(v) Notes to the Unaudited Consolidated Financial Statements.

THIS REPORT ON FORM 6-K/A IS HEREBY INCORPORATED BY REFERENCE INTO THE FOLLOWING REGISTRATION STATEMENTS OF TEEKAY TANKERS LTD.: 

REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-148055) FILED WITH THE SEC ON DECEMBER 13, 2007.
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-194404) FILED WITH THE SEC ON MARCH 7, 2014.
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-223824) FILED WITH THE SEC ON MARCH 21, 2018.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
TEEKAY TANKERS LTD.
Date: October 10, 2018
By:
 /s/ Stewart Andrade
 
 
Stewart Andrade
Chief Financial Officer
(Principal Financial and Accounting Officer)



v3.10.0.1
Document and Entity Information
6 Months Ended
Jun. 30, 2018
Document And Entity Information [Abstract]  
Document Type 6-K/A
Amendment Flag false
Document Period End Date Jun. 30, 2018
Document Fiscal Year Focus 2018
Document Fiscal Period Focus Q2
Trading Symbol TNK
Entity Registrant Name TEEKAY TANKERS LTD.
Entity Central Index Key 0001419945
Current Fiscal Year End Date --12-31
v3.10.0.1
Unaudited Consolidated Statements of Loss - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenues [Abstract]        
Total revenues $ 171,659 $ 108,789 $ 340,124 $ 239,274
Voyage expenses (notes 2, 3 and 13a) 86,933 19,430 166,926 43,185
Vessel operating expenses (note 13a) (52,652) (46,853) (105,647) (90,991)
Time-charter hire expense (5,697) (7,997) (10,380) (21,624)
Depreciation and amortization (29,573) (24,415) (59,003) (49,324)
General and administrative expenses (note 13a) (9,407) (8,365) (19,192) (17,253)
Gain (loss) on sale of vessels (note 14) 170 (142) 170 (4,569)
Restructuring charges (982) 0 (982) 0
(Loss) income from operations (13,415) 1,587 (21,836) 12,328
Interest expense (13,931) (7,076) (26,660) (14,382)
Interest income 160 360 318 439
Realized and unrealized gain (loss) on derivative instruments (note 9) 1,116 (1,560) 4,129 (1,099)
Equity (loss) income (note 6) (70) (28,027) 624 (26,900)
Other expense (note 10) (1,273) (2,761) (3,141) (4,150)
Net loss $ (27,413) $ (37,477) $ (46,566) $ (33,764)
Per common share amounts (note 15)        
- Basic loss per share (usd per share) $ (0.10) $ (0.21) $ (0.17) $ (0.19)
- Diluted loss per share (usd per share) (0.10) (0.21) (0.17) (0.19)
- Cash dividends declared (usd per share) $ 0 $ 0.03 $ 0.03 $ 0.06
Weighted-average number of Class A and Class B common stock outstanding (note 15)        
- Basic and diluted (shares) 268,558,556 179,197,658 268,426,201 178,665,430
Voyage charter revenues        
Revenues [Abstract]        
Total revenues $ 144,328 $ 30,140 $ 279,970 $ 69,484
Time-charter revenues        
Revenues [Abstract]        
Total revenues 17,384 30,091 39,494 60,421
Other revenues        
Revenues [Abstract]        
Total revenues 9,947 15,458 20,660 29,080
Net pool revenues        
Revenues [Abstract]        
Total revenues $ 0 $ 33,100 $ 0 $ 80,289
v3.10.0.1
Unaudited Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Current    
Cash and cash equivalents $ 48,457 $ 71,439
Restricted cash – current 1,858 1,599
Pool receivable from affiliates, net (note 13b) 24,714 15,550
Accounts receivable, including affiliate balances of $0.2 million (2017 - $0.8 million) (note 2) 15,912 19,288
Due from affiliates (note 13b) 50,034 49,103
Current portion of derivative assets (note 9) 2,728 1,016
Prepaid expenses 21,523 18,690
Other current assets (note 2) 3,103 0
Total current assets 168,329 176,685
Restricted cash – long-term 2,672 2,672
Vessels and equipment At cost, less accumulated depreciation of $563.0 million (2017 - $512.0 million) (note 7) 1,695,722 1,737,792
Vessels related to capital leases At cost, less accumulated depreciation of $31.4 million (2017 - $25.4 million) (note 8) 221,825 227,722
Investment in and advances to equity-accounted investments (note 6) 25,170 25,460
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value 5,797 4,226
Intangible assets At cost, less accumulated amortization of $9.5 million (2017 - $8.2 million) 13,030 14,605
Other non-current assets 92 127
Goodwill 8,059 8,059
Total assets 2,140,696 2,197,348
Current    
Accounts payable 5,822 7,860
Accrued liabilities 34,063 34,608
Current portion of long-term debt (note 7) 155,089 166,745
Current obligation related to capital leases (note 8) 7,454 7,227
Current portion of derivative liabilities (note 9) 16 0
Deferred revenue 61 557
Due to affiliates (note 13b) 39,422 19,717
Total current liabilities 241,927 236,714
Long-term debt (note 7) 778,728 785,557
Long-term obligation related to capital leases (note 8) 137,951 141,681
Other long-term liabilities (note 10) 29,620 26,795
Total liabilities 1,188,226 1,190,747
Commitments and contingencies (notes 6, 7, 8 and 9)
Equity    
Common stock and additional paid-in capital (385.0 million shares authorized, 231.6 million Class A and 37.0 million Class B shares issued and outstanding as of June 30, 2018 and 231.2 million Class A and 37.0 million Class B shares issued and outstanding as of December 31, 2017) (note 12) 1,295,485 1,294,998
Accumulated deficit (343,015) (288,397)
Total equity 952,470 1,006,601
Total liabilities and equity $ 2,140,696 $ 2,197,348
v3.10.0.1
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Accounts receivable, related parties, current $ 0.2 $ 0.8
Accumulated depreciation on vessels and equipment 563.0 512.0
Accumulated depreciation on vessels related to capital leases 31.4 25.4
Accumulated amortization on intangible assets $ 9.5 $ 8.2
Common stock, shares authorized (in shares) 385,000,000.0 385,000,000.0
Class A    
Common stock, shares authorized (in shares) 285,000,000 285,000,000
Common stock, shares issued (in shares) 231,600,000 231,200,000
Common stock, shares outstanding (in shares) 231,600,000 231,200,000
Class B    
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 37,000,000 37,000,000
Common stock, shares outstanding (in shares) 37,000,000 37,000,000
v3.10.0.1
Unaudited Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
OPERATING ACTIVITIES    
Net loss $ (46,566) $ (33,764)
Non-cash items:    
Depreciation and amortization 59,003 49,324
(Gain) loss on sale of vessels (note 14) (170) 4,569
Unrealized (gain) loss on derivative instruments (note 9) (3,283) 1,578
Equity (income) loss (624) 26,900
Other 5,467 6,554
Change in operating assets and liabilities 3,368 12,787
Expenditures for dry docking (6,725) (3,417)
Net operating cash flow 10,470 64,531
FINANCING ACTIVITIES    
Proceeds from long-term debt, net of issuance costs 45,659 14,300
Repayments of long-term debt (66,333) (57,894)
Prepayments of long-term debt 0 (69,216)
Scheduled repayments of obligations related to capital leases (note 8) (3,503) 0
Cash dividends paid (8,052) (9,925)
Proceeds from issuance of Class A common stock (note 12) 0 5,000
Proceeds from equity offerings, net of offering costs (note 12) 0 8,565
Other (92) (241)
Net financing cash flow (32,321) (109,411)
INVESTING ACTIVITIES    
Proceeds from sales of vessels (note 14) 589 40,686
Expenditures for vessels and equipment (2,207) (2,628)
Return of capital from equity-accounted investment 746 0
Loan repayments from equity-accounted investment 0 550
Net investing cash flow (872) 38,608
Decrease in cash, cash equivalents and restricted cash (22,723) (6,272)
Cash, cash equivalents and restricted cash, beginning of the period 75,710 94,907
Cash, cash equivalents and restricted cash, end of the period $ 52,987 $ 88,635
v3.10.0.1
Unaudited Consolidated Statement of Changes in Equity - 6 months ended Jun. 30, 2018 - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock and Additional Paid-in Capital
Common Stock and Additional Paid-in Capital
Class A
Common Stock and Additional Paid-in Capital
Class B
Accumulated Deficit
Balance at beginning of period (in shares) at Dec. 31, 2017   268,202      
Balance at beginning of period at Dec. 31, 2017 $ 1,006,601   $ 1,206,466 $ 88,532 $ (288,397)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net loss (46,566)       (46,566)
Dividends declared (8,052)       (8,052)
Equity-based compensation (in shares)   357      
Equity-based compensation (note 12) 761   761    
Other (274)   (274)    
Balance at end of period (in shares) at Jun. 30, 2018   268,559      
Balance at end of period at Jun. 30, 2018 $ 952,470   $ 1,206,953 $ 88,532 $ (343,015)
v3.10.0.1
Basis of Presentation
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

The unaudited interim consolidated financial statements (or consolidated financial statements) have been prepared in conformity with United States generally accepted accounting principles (or GAAP). These consolidated financial statements include the accounts of Teekay Tankers Ltd., its wholly-owned subsidiaries, equity-accounted investments, the Entities under Common Control (as defined in note 4) and any variable interest entities (or VIEs) of which it is the primary beneficiary (collectively, the Company). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2017, filed on Form 20-F with the U.S. Securities and Exchange Commission (or the SEC) on April 24, 2018. In the opinion of management, these consolidated financial statements reflect all adjustments, consisting solely of a normal recurring nature, necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, and cash flows for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of those for a full fiscal year. Significant intercompany balances and transactions have been eliminated upon consolidation.
v3.10.0.1
Recent Accounting Pronouncements
6 Months Ended
Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, (or ASU 2014-09). ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 became effective for the Company as of January 1, 2018 and may be applied, at the Company’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of such date. The Company has elected to apply ASU 2014-09 only to those contracts that are not completed as of January 1, 2018. The Company has adopted ASU 2014-09 as a cumulative-effect adjustment as of the date of adoption. The Company has identified the following differences on adoption of ASU 2014-09:

The Company previously presented the net allocation for its vessels participating in revenue sharing arrangements (or RSAs) as net pool revenues. The Company has determined that it is the principal in voyages its vessels perform that are included in 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 three and six months ended June 30, 2018 by $67.5 million and $128.8 million, respectively. 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 other current assets and decreasing accounts receivable by $3.1 million at June 30, 2018.

In February 2016, FASB issued Accounting Standards Update 2016-02, Leases (or ASU 2016-02). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. For lessees, leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 requires lessors to classify leases as a sales-type, direct financing, or operating lease. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating that the lessor has transferred substantially all of the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type leases or direct financing leases are operating leases. ASU 2016-02 is effective January 1, 2019, with early adoption permitted. FASB issued an additional accounting standards update in July 2018 that made further amendments to accounting for leases, including allowing the use of a transition approach whereby a cumulative effect adjustment is made as of the effective date, with no retrospective effect. The Company has elected to use this new optional transition approach. The Company is currently assessing whether it will adopt ASU 2016-02 during 2018 or on January 1, 2019. To determine the cumulative effect adjustment, the Company will not reassess lease classification, initial direct costs for any existing leases and whether any expired or existing contracts are or contain leases. The adoption of ASU 2016-02 will result in a change in accounting method for the lease portion of the daily charter hire for the Company’s chartered-in vessels accounted for as operating leases with firm periods of greater than one year. Under ASU 2016-02, the Company will recognize a right-of-use asset and a lease liability on the balance sheet for these charters based on the present value of future minimum lease payments, whereas currently no right-of-use asset or lease liability is recognized. This will have the result of increasing the Company’s assets and liabilities. The pattern of expense recognition of chartered-in vessels is expected to remain substantially unchanged, unless the right-of-use asset becomes impaired. The cumulative effect adjustment to the Company's consolidated financial statements from the adoption of ASU 2016-02 will vary depending on the period in which the Company chooses to adopt ASU 2016-02. The Company is expecting to disclose in its consolidated financial statements for the third quarter of 2018 the quantitative impact of adopting ASU 2016-02, once the Company has determined the date on which it will adopt the new standard.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This update replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for the Company January 1, 2020, with a modified-retrospective approach. The Company is currently evaluating the effect of adopting this new guidance.

In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity method investees in the statement of cash flows. This update became effective for the Company as of January 1, 2018, with a retrospective approach. The Company has elected to classify distributions received from equity method investees in the statement of cash flows based on the nature of the distribution. The adoption of this update did not have a material impact on the Company.

In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash, (or ASU 2016-18). ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are also required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 became effective for the Company as of January 1, 2018.  Adoption of ASU 2016-18 resulted in the Company including in its statement of cash flows changes in cash, cash equivalents and restricted cash.

In August 2017, the FASB issued Accounting Standards Update 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities (or ASU 2017-12). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 will be effective January 1, 2019. The Company is currently evaluating the effect of adopting this new guidance.
v3.10.0.1
Revenue
6 Months Ended
Jun. 30, 2018
Revenue from Contract with Customer [Abstract]  
Revenue
Revenue
The Company’s primary source of revenue is from chartering its vessels (Aframax tankers, Suezmax tankers and Long Range 2 (or LR2) tankers) to its customers. The Company utilizes two primary forms of contracts, consisting of voyage charters and time-charters.

The extent to which the Company employs its vessels on voyage charters versus time charters is dependent upon the Company’s chartering strategy and the availability of time charters. Spot market rates for voyage charters, including conventional voyages and lightering voyages, are volatile from period to period, whereas time charters provide a stable source of monthly revenue. The Company also provides ship-to-ship support services, which includes managing the process of transferring cargo between seagoing ships positioned alongside each other, either stationary or underway, as well as commercial management services to third-party owners of vessels. Finally, the Company manages LNG terminals, including the procurement of third-party goods and services for the terminal owner.

Voyage Charters

Voyage charters are charters for a specific voyage that are usually priced on a current or "spot" market rate and then adjusted for any pool participation based on predetermined criteria. Voyage charters for full service lightering voyages may also be priced based on pre-agreed terms. The performance obligations within a voyage charter contract, which will typically include the lease of the vessel to the charterer as well as the operation of the vessel, are satisfied as services are rendered over the duration of the voyage, as measured using the time that has elapsed from commencement of performance. In addition, any expenses that are unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, are the responsibility of the vessel owner. The Company’s voyage charters will normally contain a lease; however, judgement is necessary to determine whether this is the case based upon the decision-making rights the charterer has under the contract. Consideration for such contracts is generally fixed, although certain sources of variability exist. Delays caused by the charterer result in additional consideration. Payment for the voyage is not due until the voyage is completed. The duration of a single voyage will typically be less than three months. The Company does not engage in any specific tactics to minimize vessel residual value risk due to the short-term nature of the contracts.

Time Charters

Pursuant to a time charter, the Company charters a vessel to a customer for a fixed period of time, generally one year or more. The performance obligations within a time-charter contract, which will include the lease of the vessel to the charterer as well as the operation of the vessel, are satisfied as services are rendered over the duration of such contract, as measured using the time that has elapsed from commencement of performance. In addition, any expenses that are unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, are the responsibility of the customer, as long as the vessel is not off-hire. Hire is typically invoiced monthly in advance for time-charter contracts, based on a fixed daily hire amount. However, certain sources of variability exist, including off-hire and profit share revenue. If the vessel is off-hire due to mechanical breakdown or for any other reason the charterer does not pay charter hire for this time. For contracts including a profit share component, the profit share consideration occurs when actual spot tanker rates earned by the vessel exceed certain thresholds for a period of time. During the three and six months ended June 30, 2018, the Company’s share of the revenue from the vessel in the Company’s High-Q Investment Ltd. (or High-Q) joint venture was $1.0 million and $2.7 million, respectively (June 30, 2017 - $1.7 million and $3.4 million). Variable consideration of the Company’s contracts is typically recognized as incurred, as either such revenue is allocated and accounted for under lease accounting requirements or, alternatively, such consideration is allocated to distinct periods within a contract that such variable consideration was incurred in. The Company does not engage in any specific tactics to minimize vessel residual value risk.

As at June 30, 2018, eight of the Company’s vessels operated under time-charter contracts with the Company’s customers, of which seven contracts are scheduled to expire in in the last half of 2018, and one contract is scheduled to expire in 2019. Four of the Company’s vessels are employed on time-charter contracts whereby the charterer has the option to extend the charter by one or more periods up to a total extension of 12 months. As at June 30, 2018, the future hire payments to be received by the Company under time charters then in place were approximately $20.2 million, comprised of $17.6 million (remaining 2018) and $2.6 million (2019). The hire payments should not be construed to reflect a forecast of total charter hire revenues for any of the periods. Future hire payments do not include hire payments generated from new contracts entered into after June 30, 2018, from unexercised option periods of contracts that existed on June 30, 2018 or from variable consideration, if any. In addition, future hire payments presented above have been reduced by estimated off-hire time for required period maintenance. Actual amounts may vary given future events such as unplanned vessel maintenance.

The carrying amount of the Company's owned vessels employed on time charters as at June 30, 2018, was $257.4 million (December 31, 2017 - $517.9 million). The cost and accumulated depreciation of the vessels employed on these time charters as at June 30, 2018 were $414.1 million (December 31, 2017 - $754.2 million) and $156.7 million (December 31, 2017 - $236.3 million), respectively. As at June 30, 2018, the Company did not have any advanced payments recognized as contract liabilities (December 31, 2017 - $0.5 million) that are expected to be recognized as time-charter revenues in the following period and are included in deferred revenue on the Company's consolidated balance sheets.

Other Revenues

Ship-to-ship support services include managing the process of transferring cargo between seagoing ships positioned alongside each other. Each operation is typically completed in less than 48 hours. The performance obligations within a commercial management contract are satisfied as services are rendered over the duration of such contracts. The management fee, consisting of a fixed component based on the number of days a vessel was under management and a variable component based on the vessel’s monthly earnings, is invoiced monthly in arrears for commercial management contracts. The performance obligations within an LNG terminal contract are satisfied as services are rendered over the duration of such contracts. The management fee, consisting of a fixed amount, subject to contingent annual inflationary adjustments, is typically invoiced monthly in arrears. Substantially all of the Company’s performance obligations are satisfied over the duration of the associated contract, and the Company uses the proportion of elapsed time as its method to recognize revenue over the contract duration. The variable consideration of the Company’s contracts is typically recognized as incurred as such consideration is allocated to distinct periods within a contract that such variable consideration was incurred in.

Revenue Table

The following table contains a breakdown of the Company's revenue by contract type for the three and six months ended June 30, 2018 and June 30, 2017. All revenue is part of the Company's conventional tanker segment, except for revenue for ship-to-ship support services and LNG terminal management, consultancy and other related services, which is part of the Company's ship-to-ship transfer segment.

 
Three Months Ended
June 30, 2018
 
Three Months Ended
June 30, 2017
 
Six Months Ended
June 30, 2018
 
Six Months Ended
June 30, 2017
Voyage charters (1)
 
 
 
 
 
 
 
     Suezmax
80,721

 
3,450

 
153,504

 
12,634

     Aframax
24,265

 
6,056

 
47,742

 
9,031

     LR2
11,979

 

 
23,600

 

     Full service lightering
27,363

 
20,634

 
55,124

 
47,819

     Total
144,328

 
30,140

 
279,970

 
69,484

 
 
 
 
 
 
 
 
Time-charters
 
 
 
 
 
 
 
     Aframax
11,021

 
12,451

 
23,824

 
24,657

     Suezmax
3,957

 
14,120

 
10,154

 
26,751

     LR2
2,406

 
3,520

 
5,516

 
9,013

     Total
17,384

 
30,091

 
39,494

 
60,421

 
 
 
 
 
 
 
 
Other revenue
 
 
 
 
 
 
 
     Ship-to-ship support services
6,902

 
11,947

 
14,235

 
20,230

     Commercial management
2,138

 
2,684

 
4,196

 
6,336

     LNG terminal management, consultancy and other
907

 
827

 
2,229

 
2,514

     Total
9,947

 
15,458

 
20,660

 
29,080

 
 
 
 
 
 
 
 
Net pool revenues (1)
 
 
 
 
 
 
 
     Suezmax

 
19,418

 

 
47,441

     Aframax

 
7,492

 

 
18,363

     LR2

 
6,191

 

 
14,469

     MR2

 
(1
)
 

 
16

     Total

 
33,100

 

 
80,289

Total revenues
171,659

 
108,789

 
340,124

 
239,274


(1)
Prior to the January 1, 2018 adoption of ASU 2014-09, the Company presented the net allocation for its vessels participating in RSAs as net pool revenues. The Company has determined that it is the principal in voyages its vessels perform that are included in 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 three and six months ended June 30, 2018 by $67.5 million and $128.8 million, respectively.
v3.10.0.1
Acquisition of Entities under Common Control
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Acquisition of Entities under Common Control
Acquisition of Entities under Common Control
On May 31, 2017, the Company acquired from Teekay Holdings Ltd., a wholly-owned subsidiary of Teekay Corporation (or Teekay), the remaining 50% interest in Teekay Tanker Operations Ltd. (or TTOL) (see also note 6c) for $39.0 million, which included $13.1 million for working capital assumed. The Company issued approximately 13.8 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 of the acquisition of a controlling interest in TTOL, the Company's consolidated financial statements prior to the date the Company acquired a controlling interest in TTOL are retroactively adjusted to eliminate the equity method of accounting previously used for the original 50% interest owned and to include 100% of the assets and liabilities and results of TTOL on a consolidated basis during the periods TTOL and the Company were under common control of Teekay and had begun operations. The effect of adjusting such information to accounts in periods prior to the Company's acquisition of the remaining 50% thereof is referred to as the "Entities under Common Control." All intercorporate transactions between the Company and TTOL that occurred prior to the acquisition by the Company have been eliminated upon consolidation.

Assets and liabilities of TTOL are reflected on the Company’s consolidated balance sheets at TTOL’s historical carrying values. The amount of the net consideration of $39.0 million that was in excess of TTOL’s historical carrying value of the net assets acquired of $13.3 million has been accounted for as a $25.7 million return of capital to Teekay.

The effect of adjusting the Company’s consolidated financial statements for the TTOL common control transaction decreased the Company's net loss for the three and six months ended June 30, 2017 by $0.4 million and $1.3 million, respectively, and increased the Company's revenues for the three and six months ended June 30, 2017 by $3.2 million and $8.6 million, respectively.
v3.10.0.1
Segment Reporting
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
The Company has two reportable segments, its conventional tanker segment and its ship-to-ship transfer segment. The Company’s conventional tanker segment consists of the operation of all of its tankers, including the operations of TTOL and Tanker Investments Ltd. (or TIL), which were acquired in 2017 (notes 4, 6 and 18), and those tankers employed on full service lightering contracts. The Company’s ship-to-ship transfer segment consists of the Company’s lightering support services, including those provided to the Company’s conventional tanker segment as part of full service lightering operations and other related services. Segment results are evaluated based on income from operations. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements.

The following tables include results for the Company’s revenues and (loss) income from operations by segment for the three and six months ended June 30, 2018 and June 30, 2017.
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conventional Tanker Segment
 
Ship-to-Ship
Transfer Segment
 
Inter-segment Adjustment (1)
 
Total
 
 
$
 
 
$
 
 
$
 
 
$
 
Revenues (2)(3)
 
163,849

 
 
11,210

 
 
(3,400
)
 
 
171,659

 
Voyage expenses (3)
 
(90,333
)
 
 

 
 
3,400

 
 
(86,933
)
 
Vessel operating expenses
 
(44,738
)
 
 
(7,914
)
 
 

 
 
(52,652
)
 
Time-charter hire expense
 
(4,113
)
 
 
(1,584
)
 
 

 
 
(5,697
)
 
Depreciation and amortization
 
(28,454
)
 
 
(1,119
)
 
 

 
 
(29,573
)
 
General and administrative expenses (4)
 
(8,433
)
 
 
(974
)
 
 

 
 
(9,407
)
 
Gain on sale of vessels
 

 
 
170

 
 

 
 
170

 
Restructuring charges
 
(152
)
 
 
(830
)
 
 

 
 
(982
)
 
Loss from operations
 
(12,374
)
 
 
(1,041
)
 
 

 
 
(13,415
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity loss
 
(70
)
 
 

 
 

 
 
(70
)
 

Three Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conventional Tanker Segment
 
Ship-to-Ship Transfer Segment
 
Inter-segment Adjustment (1)
 
Total
 
 
$
 
 
$
 
 
$
 
 
$
 
Revenues (2)(3)
 
96,841

 
 
14,597

 
 
(2,649
)
 
 
108,789

 
Voyage expenses (3)
 
(22,079
)
 
 

 
 
2,649

 
 
(19,430
)
 
Vessel operating expenses
 
(34,278
)
 
 
(12,575
)
 
 

 
 
(46,853
)
 
Time-charter hire expense
 
(6,935
)
 
 
(1,062
)
 
 

 
 
(7,997
)
 
Depreciation and amortization
 
(23,157
)
 
 
(1,258
)
 
 

 
 
(24,415
)
 
General and administrative expenses (4)
 
(7,513
)
 
 
(852
)
 
 

 
 
(8,365
)
 
(Loss) gain on sale of vessels
 
(150
)
 
 
8

 
 

 
 
(142
)
 
Income (loss) from operations
 
2,729

 
 
(1,142
)
 
 

 
 
1,587

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity loss
 
(28,027
)
 
 

 
 

 
 
(28,027
)
 
Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conventional Tanker Segment
 
Ship-to-Ship Transfer Segment
 
Inter-segment
Adjustment (1)
 
Total
 
 
 
$
 
 
$
 
 
$
 
 
$
 
Revenues (2)(3)
 
323,660

 
 
23,042

 
 
(6,578
)
 
 
340,124

 
Voyage expenses (3)
 
(173,504
)
 
 

 
 
6,578

 
 
(166,926
)
 
Vessel operating expenses
 
(88,454
)
 
 
(17,193
)
 
 

 
 
(105,647
)
 
Time-charter hire expense
 
(7,391
)
 
 
(2,989
)
 
 

 
 
(10,380
)
 
Depreciation and amortization
 
(56,639
)
 
 
(2,364
)
 
 

 
 
(59,003
)
 
General and administrative expenses (4)
 
(17,400
)
 
 
(1,792
)
 
 

 
 
(19,192
)
 
Gain on sale of vessels
 

 
 
170

 
 

 
 
170

 
Restructuring charges
 
(152
)
 
 
(830
)
 
 

 
 
(982
)
 
Loss from operations
 
(19,880
)
 
 
(1,956
)
 
 

 
 
(21,836
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity income
 
624

 
 

 
 

 
 
624

 
Six months ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conventional Tanker Segment
 
Ship-to-Ship Transfer Segment
 
Inter-segment
Adjustment (1)
 
Total

 
 
 
$
 
 
$
 
 
$
 
 
$
 
Revenues (2)(3)
 
217,396

 
 
27,485

 
 
(5,607
)
 
 
239,274

 
Voyage expenses (3)
 
(48,792
)
 
 

 
 
5,607

 
 
(43,185
)
 
Vessel operating expenses
 
(68,359
)
 
 
(22,632
)
 
 

 
 
(90,991
)
 
Time-charter hire expense
 
(19,069
)
 
 
(2,555
)
 
 

 
 
(21,624
)
 
Depreciation and amortization
 
(46,786
)
 
 
(2,538
)
 
 

 
 
(49,324
)
 
General and administrative expenses (4)
 
(15,435
)
 
 
(1,818
)
 
 

 
 
(17,253
)
 
Gain on sale of vessels
 
(4,577
)
 
 
8

 
 

 
 
(4,569
)
 
Income (loss) from operations
 
14,378

 
 
(2,050
)
 
 

 
 
12,328

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity loss
 
(26,900
)
 
 

 
 

 
 
(26,900
)
 
(1)
The ship-to-ship transfer segment provides lightering support services to the conventional tanker segment for full service lightering operations and the pricing for such services was based on actual costs incurred.
(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 loss.
(3)
The comparative periods do not include the impact of the January 1, 2018 adoption of ASU 2014-09 (see note 2).
(4)
Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).











A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
 
As at
 
As at
 
June 30, 2018
 
December 31, 2017
 
$
 
$
Conventional Tanker Segment
2,056,681

 
2,089,099

Ship-to-Ship Transfer Segment
35,558

 
36,810

Cash and cash equivalents
48,457

 
71,439

Consolidated total assets
2,140,696

 
2,197,348

v3.10.0.1
Investments in and Advances to Equity Accounted Investments
6 Months Ended
Jun. 30, 2018
Equity Method Investments and Joint Ventures [Abstract]  
Investments in and Advances to Equity Accounted Investments
Investments in and Advances to Equity-Accounted Investments
 
 
As at June 30, 2018
 
As at December 31, 2017
 
 
$
 
$
High-Q Joint Venture
 
25,170

 
24,546

Gemini Tankers L.L.C.
 

 
914

Total
 
25,170

 
25,460



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 Very Large Crude Carrier (or VLCC), which traded on a fixed time charter-out contract that expired in May 2018, and subsequently went into dry dock. Under this contract, the vessel earned a fixed daily rate and an additional amount if the daily rate of any sub-charter earned exceeded a certain threshold.

As at June 30, 2018, the High-Q joint venture has a loan outstanding with a financial institution with a balance of $39.9 million (December 31, 2017 – $42.7 million). The loan is secured by a first-priority mortgage on the VLCC owned by the High-Q joint venture and 50% of the outstanding loan balance is guaranteed by the Company. The High-Q joint venture also had an interest rate swap agreement that expired in June 2018. The interest rate swap exchanged a receipt of floating interest based on 3-months LIBOR for a payment of a fixed rate of 1.47% every three months.

b.
In January 2014, the Company and Teekay formed TIL, which owned and operated conventional tankers. The Company purchased 2.5 million shares of TIL common stock for $25.0 million and received a stock purchase warrant entitling it to purchase up to 750,000 additional shares of common stock of TIL (note 9). The Company also received one preferred share which entitled the Company to elect one board member of TIL. The preferred share did not give the Company a right to any dividends or distributions of TIL.

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 3.3 shares of Class A common stock of the Company for each outstanding share 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. As the Company then accounted for its investment in TIL under the equity method, the Company was required to remeasure its previously held equity investment to fair value at the acquisition date. Based on the then pending transaction, the Company recognized an other than temporary impairment and remeasured its investment in TIL to fair value during the second quarter of 2017 based on the TIL share price at June 30, 2017, resulting in a write-down of $28.1 million presented in equity (loss) income on the consolidated statements of loss. 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 gain of $1.4 million presented in equity (loss) income on the consolidated statements of loss.

c.
On May 31, 2017, the Company purchased from Teekay the remaining 50% interest in TTOL, which owns conventional tanker commercial management and technical management operations, including direct ownership in four commercially managed RSAs, for $39.0 million, which included $13.1 million for assumed working capital (note 4). Prior to the May 31, 2017 purchase, the Company equity-accounted for its initial 50% interest in TTOL.
v3.10.0.1
Long-Term Debt
6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Long-Term Debt
Long-Term Debt
 
As at
 
As at
 
June 30, 2018
 
December 31, 2017
 
$
 
$
Revolving Credit Facilities due through 2022
569,142

 
539,735

Term Loans due through 2021
373,832

 
423,512

Total principal
942,974

 
963,247

Less: unamortized discount and debt issuance costs
(9,157
)
 
(10,945
)
Total debt
933,817

 
952,302

Less: current portion
(155,089
)
 
(166,745
)
Non-current portion of long-term debt
778,728

 
785,557



As at June 30, 2018, the Company had three revolving credit facilities (or the Revolvers), which, as at such date, provided for aggregate borrowings of up to $600.8 million, of which $31.7 million was undrawn (December 31, 2017 - $628.3 million, of which $88.6 million was undrawn). Interest payments are based on LIBOR plus margins. As at June 30, 2018, such margins ranged between 2.00% and 2.75% (December 31, 2017: 0.45% and 2.75%). The total amount available under the Revolvers reduces by $62.0 million (remainder of 2018), $30.2 million (2019), $30.2 million (2020), $322.9 million (2021) and $155.6 million (2022). As at June 30, 2018, the Company also had three term loans outstanding, which totaled $373.8 million (December 31, 2017 - $423.5 million). Interest payments on the term loans are based on a combination of a fixed rate of 5.4% (December 31, 2017 - 5.4%) and variable rates based on LIBOR plus margins. As at June 30, 2018, the margins ranged from 0.30% to 2.00% (December 31, 2017 - 0.30% to 2.00%). The term loan repayments are made in quarterly or semi-annual payments. Two of the term loans also have a balloon or bullet repayment due at maturity in 2021. These revolving credit facilities and term loans are further described below.

In December 2017, the Company entered into a $270.0 million long-term debt facility (or the 2017 Revolver), which is scheduled to mature in December 2022. In December 2017, $215.8 million of the 2017 Revolver was used to refinance two of the Company's debt facilities that were assumed in the merger with TIL (note 18). These debt facilities were scheduled to mature in April 2019 and June 2020. The 2017 Revolver is collateralized by 14 of the Company's vessels, together with other related security. The 2017 Revolver also requires that the Company maintain a minimum hull coverage ratio of 125% of the total outstanding drawn balance for the facility period. Such requirement is assessed on a semi-annual basis with reference to vessel valuations compiled by two or more agreed upon third parties. Should the ratio drop below the required amount, the lender may request that the Company either prepay a portion of the loan in the amount of the shortfall or provide additional collateral in the amount of the shortfall, at the Company's option. As of June 30, 2018, the hull coverage ratio was 160% (December 31, 2017 - 191%). The vessel values used in this ratio are appraised values provided by third parties where available, or prepared by the Company based on second-hand sale and purchase market data. A decline in the tanker market could negatively affect the ratio. In addition, the Company is required to maintain a minimum liquidity (cash, cash equivalents and undrawn committed revolving credit lines with at least six months to maturity) of $35.0 million and at least 5% of the Company's total consolidated debt.

The Company entered into a $894.4 million long-term debt facility (or the 2016 Debt Facility), consisting of both a term loan and a revolving credit component, which are scheduled to mature in January 2021. The 2016 Debt Facility is collateralized by 29 of the Company’s vessels, together with other related security. The 2016 Debt Facility also requires that the Company maintain a minimum hull coverage ratio of 125% of the total outstanding drawn balance for the facility period. Such requirement is assessed on a semi-annual basis with reference to vessel valuations compiled by one or more agreed upon third parties. Should the ratio drop below the required amount, the lender may request that the Company either prepay a portion of the loan in the amount of the shortfall or provide additional collateral in the amount of the shortfall, at the Company’s option. As at June 30, 2018, the hull coverage ratio was 133% (December 31, 2017 - 145%). The vessel values used in this ratio are appraised values provided by third parties where available, or prepared by the Company based on second-hand sale and purchase market data. A decline in the tanker market could negatively affect the ratio. In addition, the Company is required to maintain a minimum liquidity (cash, cash equivalents and undrawn committed revolving credit lines with at least six months to maturity) of $35.0 million and at least 5.0% of the Company’s total consolidated debt.

The Company’s remaining revolver is collateralized by three of the Company’s vessels, together with other related security, and requires that the Company's applicable subsidiary maintain a minimum hull coverage ratio of 105% of the total outstanding drawn balance for the facility period. Such requirement is assessed on an annual basis, with reference to vessel valuations compiled by one or more agreed upon third parties. Should the ratio drop below the required amount, the lender may request the Company to either prepay a portion of the loan in the amount of the shortfall or provide additional collateral in the amount of the shortfall, at the Company’s option. As at June 30, 2018, such revolver, with a minimum hull coverage ratio requirement, had an outstanding balance of $50.0 million (December 31, 2017 - $65.6 million) and a hull coverage ratio of 143% (December 31, 2017 - 118%). The vessel values used in this ratio are appraised values provided by third parties where available, or prepared by the Company based on second-hand sale and purchase market data. A decline in the tanker market could negatively affect the ratio. The revolver is also guaranteed by Teekay and contains covenants that require Teekay (excluding the Company and Teekay LNG Partners L.P. (or TGP)) to maintain the greater of free liquidity (cash and cash equivalents and undrawn committed revolving credit lines with at least six months to maturity) of $50.0 million and at least 5.0% of Teekay’s total consolidated debt which has recourse to Teekay.

The Company’s remaining two term loans are guaranteed by Teekay and are collateralized by six of the Company’s vessels, together with other related security. One of the term loans contains covenants that require Teekay and the Company in aggregate to maintain the greater of (a) free cash (cash and cash equivalents) of at least $50.0 million and (b) an aggregate of free cash and undrawn committed revolving credit lines with at least six months to maturity of at least 5.0% of Teekay’s total consolidated debt (excluding the debt of TGP). The other term loan requires Teekay and the Company in aggregate to maintain the greater of (a) free cash (cash and cash equivalents) of at least $100.0 million and (b) an aggregate of free cash and undrawn committed revolving credit lines with at least six months to maturity of at least 7.5% of Teekay's total consolidated debt (excluding the debt of TGP).

As at June 30, 2018, the Company was in compliance with all covenants in respect of the Revolvers and term loans. Teekay has also advised the Company that Teekay is in compliance with all covenants relating to the revolving credit facilities and term loans to which the Company is a party.
The weighted-average interest rate on the Company’s long-term debt as at June 30, 2018 was 4.4% (December 31, 2017 - 3.5%). This rate does not reflect the effect of the Company’s interest rate swap agreements (note 9).
The aggregate annual long-term principal repayments required to be made by the Company under the Revolvers and term loans subsequent to June 30, 2018, excluding the impact of the Company's sale-leaseback transactions as described in note 8, are $100.8 million (remaining 2018), $120.6 million (2019), $132.0 million (2020), $434.0 million (2021) and $155.6 million (2022).
v3.10.0.1
Leases
6 Months Ended
Jun. 30, 2018
Leases [Abstract]  
Leases
Leases
Obligations Related to Capital Leases
 
As at
 
As at
 
June 30, 2018
 
December 31, 2017
 
$
 
$
Total obligations related to capital leases
145,405

 
148,908

Less: current portion
(7,454
)
 
(7,227
)
Long-term obligations related to capital leases
137,951

 
141,681


In July 2017, the Company completed a $153.0 million sale-leaseback financing transaction with a financial institution relating to four of the Company's Suezmax tankers, the Athens Spirit, Beijing Spirit, Moscow Spirit and Sydney Spirit. Under this arrangement, the Company transferred the vessels to subsidiaries of the financial institution (or collectively, the Lessors) and leased the vessels back from the Lessors on bareboat charters for 12-year terms. The Company has the option to purchase each of the four vessels at any point between July 2020 and July 2029.
The Company understands that these vessels and lease operations are the only assets and operations of the Lessors. The Company operates the vessels during the lease term, and as a result, is considered to be the Lessors' primary beneficiary and therefore the Company consolidates the Lessors for financial reporting purposes.
The liabilities of the Lessors are loans and are non-recourse to the Company. The amounts funded to the Lessors in order to purchase the vessels materially match the funding to be paid by the Company's subsidiaries under the lease-back transaction. As a result, the amounts due by the Company's subsidiaries to the Lessors have been included in obligations related to capital leases as representing the Lessors' loans.
The bareboat charters also require that the Company maintain a minimum liquidity (cash, cash equivalents and undrawn committed revolving credit lines with at least six months to maturity) of $35 million and at least 5.0% of the Company's consolidated debt and obligations related to capital leases (excluding applicable security deposits reflected in restricted cash - long-term on the Company's consolidated balance sheets). In addition, the Company is required for each vessel to maintain a hull coverage ratio of 90% of the total outstanding principal balance during the first three years of the lease period and 100% of the total outstanding principal balance thereafter. Such requirement is assessed annually with reference to vessel valuations compiled by one or more agreed upon third parties. As at June 30, 2018, this ratio was approximately 98% (December 31, 2017 - 105%). As at June 30, 2018, the Company was in compliance with all covenants in respect of the obligations related to capital leases.
As at June 30, 2018, the Company's remaining commitments under the four capital leases for the Suezmax tankers was approximately $210.0 million, including imputed interest of $64.6 million, repayable from 2018 through 2029, as indicated below:
Year
 
Commitment
Remaining 2018
 
$
8,210

2019
 
$
16,236

2020
 
$
16,279

2021
 
$
16,233

2022
 
$
16,232

Thereafter
 
$
136,846

v3.10.0.1
Derivative Instruments
6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Derivative Instruments
Interest rate swap agreements

The Company uses derivatives in accordance with its overall risk management policies. The Company enters into interest rate swap agreements which exchange a receipt of floating interest for a payment of fixed interest to reduce the Company’s exposure to interest rate variability on its outstanding floating-rate debt. The Company has not designated, for accounting purposes, its interest rate swaps as cash flow hedges of its U.S. Dollar LIBOR-denominated borrowings.

As at June 30, 2018, the Company was committed to the following interest rate swap agreements:
 
 
Interest Rate
 
Notional Amount
 
Fair Value / Carrying Amount of Asset
 
Remaining Term
 
Fixed Interest Rate
 
 Index
 
$
 
$
 
(years)
 
(%) (1)
LIBOR-Based Debt:
 
 
 
 
 
 
 
 
 
 
 
U.S. Dollar-denominated interest rate swaps (2)
LIBOR
 
115,703

 
 
1,915

 
 
2.5
 
1.46
U.S. Dollar-denominated interest rate swaps
LIBOR
 
150,000

 
 
4,566

 
 
2.5
 
1.55
U.S. Dollar-denominated interest rate swaps
LIBOR
 
50,000

 
 
2,010

 
 
2.5
 
1.16
 
(1)
Excludes the margin the Company pays on its variable-rate debt, which, as of June 30, 2018, ranged from 0.30% to 2.75%.
(2)
Notional amount reduces quarterly.

The Company is potentially exposed to credit loss in the event of non-performance by the counterparty to the interest rate swap agreements in the event that the fair value results in an asset being recorded. In order to minimize counterparty risk, the Company only enters into interest rate swap agreements with counterparties that are rated A– or better by Standard & Poor’s or A3 or better by Moody’s at the time transactions are entered into.
Stock purchase warrant
During 2017, the Company had one stock purchase warrant, which had entitled it to purchase up to 750,000 shares of common stock of TIL at certain conditions at pre-determined prices. The stock purchase warrant was not exercised and was canceled upon completion of the TIL merger in November 2017 (notes 6 and 18).

Time-charter swap agreement
Effective June 1, 2016, the Company entered into a time-charter swap agreement for 55% of two Aframax equivalent vessels. Under such agreement, the Company received $27,776 per day, less a 1.25% brokerage commission, and paid 55% of the net revenue distribution of two Aframax equivalent vessels employed in the Company’s Aframax RSA, less $500 per day, for a period of 11 months plus an additional two months at the counterparty’s option. The purpose of the agreement was to reduce the Company’s exposure to spot tanker market rate variability for certain of its vessels that are employed in the Aframax RSA. The Company did not designate, for accounting purposes, the time-charter swap as a cash flow hedge. As of May 1, 2017, the time-charter swap counter-party did not exercise the two-month option and as such, the agreement was completed as of June 30, 2017.

Forward freight agreements
The Company uses forward freight agreements (or FFAs) in non-hedge-related transactions to increase or decrease its exposure to spot market rates, within defined limits. Net gains and losses from FFAs are recorded within realized and unrealized gain (loss) on derivative instruments in the Company's consolidated statements of loss.
The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.
 
Current portion of derivative asset
 
Derivative asset
 
Accounts receivables (Accrued liabilities)
 
Current portion of derivative liability
 
$
 
$
 
$
 
$
As at June 30, 2018

 

 

 

     Interest rate swap agreements
2,694

 
5,797

 
389

 

     Forward freight agreements
34

 

 
(8
)
 
(16
)
 
2,728

 
5,797

 
381

 
(16
)
 
 
 
 
 
 
 
 
As at December 31, 2017
 
 
 
 
 
 
 
     Interest rate swap agreements
1,016

 
4,226

 
(39
)
 

 
1,016

 
4,226

 
(39
)
 



Realized and unrealized gains (losses) relating to the interest rate swaps, stock purchase warrant, time-charter swap and freight forward agreements are recognized in earnings and reported in realized and unrealized gain (loss) on derivative instruments in the Company’s consolidated statements of loss as follows:
 
Three Months Ended
 
Three Months Ended
 
June 30, 2018
 
June 30, 2017
 
Realized gains (losses)
Unrealized gains (losses)
Total
 
Realized (losses) gains
Unrealized
losses
Total
 
$
$
$
 
$
$
$
Interest rate swap agreements
674

426

1,100

 
(301
)
(1,101
)
(1,402
)
Stock purchase warrant



 

(166
)
(166
)
Time-charter swap agreement



 
360

(402
)
(42
)
Forward freight agreements
(18
)
34

16

 
80

(30
)
50

 
656

460

1,116

 
139

(1,699
)
(1,560
)
 
 
 
 
 
 
 
 
 
Six Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
 
Realized gains (losses)
Unrealized gains (losses)
Total
 
Realized (losses) gains
Unrealized losses
Total
 
$
$
$
 
$
$
$
Interest rate swap agreements
864

3,249

4,113

 
(740
)
(399
)
(1,139
)
Stock purchase warrant



 

(287
)
(287
)
Time-charter swap agreement



 
1,106

(875
)
231

Forward freight agreements
(18
)
34

16

 
113

(17
)
96

 
846

3,283

4,129

 
479

(1,578
)
(1,099
)
v3.10.0.1
Other Expense
6 Months Ended
Jun. 30, 2018
Other Liabilities Disclosure [Abstract]  
Other Expense
Other Expense
The components of other expense are as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
$
 
$
 
$
 
$
Freight tax provision
(6,086
)
 
 
(2,944
)
 
 
(7,964
)
 
 
(4,432
)
 
Foreign exchange gain (loss)
4,794

 
 
(3
)
 
 
4,774

 
 
70

 
Other income
19

 
 
186

 
 
49

 
 
212

 
Total
(1,273
)
 
 
(2,761
)
 
 
(3,141
)
 
 
(4,150
)
 


The following reflects the changes in the Company’s potential tax on freight income, recorded in other long-term liabilities, from January 1, 2018 to June 30, 2018:
 
2018
 
$
Balance of potential tax on freight income as at January 1
26,054

 
    Increases for positions related to the current period
1,467

 
    Changes for positions taken in prior periods
1,483

 
    Decreases related to statute of limitations
(93
)
 
Balance of potential tax on freight income as at June 30
28,911

 


The Company does not presently anticipate its uncertain tax positions will significantly increase or decrease in the next 12 months; however, actual developments could differ from those currently expected.
v3.10.0.1
Financial Instruments
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Financial Instruments
Financial Instruments
a.
Fair Value Measurements
 
For a description of how the Company estimates fair value and for a description of the fair value hierarchy levels, see note 12 to the Company’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2017.

The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis as well as the estimated fair value of the Company’s financial instruments that are not accounted for at the fair value on a recurring basis. 
 
 
 
 
June 30, 2018
 
December 31, 2017
 
 
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
 
Level 1
 
72,007

 
72,007

 
75,710

 
75,710

Derivative instruments (note 9)
 
 
 
 
 
 
 
 
 
 
     Interest rate swap agreements (1)
 
Level 2
 
8,491

 
8,491

 
5,242

 
5,242

     Forward freight agreements (1)
 
Level 2
 
18

 
18

 

 

 
 
 
 
 
 
 
 
 
 
 
Other:
 
 
 
 
 
 
 
 
 
 
Advances to equity-accounted investments
 
Note (2)
 
9,930

 
 Note (2)

 
9,930

 
 Note (2)

Long-term debt, including current portion
 
Level 2
 
(933,817
)
 
(917,928
)
 
(952,302
)
 
(946,105
)
Obligations related to capital leases, including current portion
 
Level 2
 
(145,405
)
 
(140,647
)
 
(148,908
)
 
(147,401
)
 
(1)
The fair value of the Company’s interest rate swap agreements and FFAs at June 30, 2018 and December 31, 2017 excludes accrued interest expense which is recorded in accrued liabilities on the unaudited consolidated balance sheets.
(2)
The advances to equity-accounted investments together with the Company’s investments in the equity-accounted investments form the net aggregate carrying value of the Company’s interests in the equity-accounted investments in these consolidated financial statements. The fair values of the individual components of such aggregate interests as at June 30, 2018 and December 31, 2017 were not determinable.

b.
Financing Receivables
The following table contains a summary of the Company’s financing receivables by type and the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis.
 
 
 
 
June 30,
2018
 
December 31, 2017
Class of Financing Receivable
Credit Quality Indicator
 
Grade
$
 
$
Advances to equity-accounted investments
Other internal metrics
 
Performing
9,930

 
9,930

Total
 
 
 
9,930

 
9,930

v3.10.0.1
Capital Stock and Stock-Based Compensation
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Capital Stock and Stock-Based Compensation
Capital Stock and Stock-Based Compensation
The authorized capital stock of the Company at June 30, 2018 was 100,000,000 shares of preferred stock (December 31, 2017 - 100,000,000), with a par value of $0.01 per share, 285,000,000 shares of Class A common stock (December 31, 2017 - 285,000,000), with a par value of $0.01 per share, and 100,000,000 shares of Class B common stock (December 31, 2017 - 100,000,000), with a par value of $0.01 per share. A share of Class A common stock entitles the holder to one vote per share while a share of Class B common stock entitles the holder to five votes per share, subject to a 49% aggregate Class B common stock voting power maximum. As of June 30, 2018, the Company had 231.6 million shares of Class A common stock (December 31, 2017 – 231.2 million), 37.0 million shares of Class B common stock (December 31, 2017 – 37.0 million) and no shares of preferred stock (December 31, 2017 – nil) issued and outstanding.

During March 2018, a total of 168,029 shares of Class A common stock with an aggregate value of $0.2 million and 0.5 million stock options with an exercise price of $1.22 per share were granted to the Company’s non-management directors as part of their annual compensation for 2017. These stock options have a ten-year term and vest immediately. These shares of Class A common stock and stock options were issued under the Teekay Tankers Ltd. 2007 Long-Term Incentive Plan and distributed to the directors. During March 2017, 0.4 million stock options with an exercise price of $2.23 per share were granted to non-management directors of the Company. For the three and six months ended June 30, 2018 and June 30, 2017, the compensation relating to the granting of such stock and stock options has been included in general administrative expenses in the amount of $0.4 million and $0.3 million, respectively.

The Company also grants stock options and restricted stock units as incentive-based compensation under the Teekay Tankers Ltd. 2007 Long-Term Incentive Plan to the officers of the Company and certain employees of Teekay subsidiaries that provide services to the Company. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period. The requisite service period consists of the period from the grant date of the award to the earlier of the date of vesting or the date the recipient becomes eligible for retirement. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the requisite service period. The compensation cost of the Company's stock-based compensation awards is reflected in general and administrative expenses in the Company’s consolidated statements of loss.
During March 2018, the Company granted 0.7 million stock options with an exercise price of $1.22 per share to the officers of the Company and certain employees of Teekay subsidiaries that provide services to the Company. During March 2017, the Company granted 0.5 million stock options with an exercise price of $2.23 per share to an officer of the Company. Each stock option has a ten-year term and vests equally over three years from the grant date.
The weighted-average fair value of the stock options granted in 2018 to non-management directors and to officers was $0.35 (2017 - $0.67) per option, estimated on the grant date using the Black-Scholes option pricing model. The following assumptions were used in computing the fair value of the stock options granted: expected volatility of 48.7% (2017 - 50.2%); expected life of five years (2017 - five years); dividend yield of 5.5% (2017 - 5.0%); and risk-free interest rate of 2.6% (2017 - 2.1%). The expected life of the stock options granted was estimated using the historical exercise behavior of employees of Teekay that receive stock options from Teekay. The expected volatility was based on historical volatility as calculated using historical data during the five years prior to the grant date.
During March 2018, the Company also granted 0.8 million (2017 - 0.4 million) restricted stock units to the officers of the Company and certain employees of Teekay subsidiaries that provide services to the Company with an aggregate fair value of $0.9 million (2017 - $0.8 million). Each restricted stock unit is equal to one share of the Company’s common stock plus reinvested distributions from the grant date to the vesting date. The restricted stock units vest equally over three years from the grant date. Any portion of a restricted stock unit award that is not vested on the date of the recipient’s termination of service is cancelled, unless their termination arises as a result of the recipient’s retirement and, in this case, the restricted stock unit award will continue to vest in accordance with the vesting schedule. Upon vesting, the value of the restricted stock unit awards, net of withholding taxes, is paid to each recipient in the form of common stock.
During the three and six months ended June 30, 2018, the Company recorded $0.2 million and $0.5 million (June 30, 2017 - $0.3 million and $0.6 million), respectively, of expenses related to the restricted stock units and stock options. During the three and six months ended June 30, 2018, a total of 0.3 million restricted stock units (June 30, 2017 - 46 thousand and 0.3 million) with a market value of $0.3 million (June 30, 2017 - $78 thousand and $0.6 million) vested and was paid to the grantees by issuing 0.2 million shares (June 30, 2017 - 30 thousand and 0.2 million shares) of Class A common stock, net of withholding taxes.
v3.10.0.1
Related Party Transactions
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
Management Fee - Related and Other

a.
Teekay, and its wholly-owned subsidiary and the Company's manager, Teekay Tankers Management Services Ltd. (or the Manager), provide commercial, technical, strategic and administrative services to the Company pursuant to a long-term management agreement (the Management Agreement). In addition, the Manager has subcontracted with TTOL and its affiliates to provide certain commercial and technical services to the Company, except for certain vessels acquired in the merger with TIL, which are technically managed by a third-party. Certain of the Company’s vessels participate in RSAs managed by TTOL (or the Pool Manager). Amounts received and paid by the Company for such related party transactions for the periods indicated were as follows:
 
 
Three Months Ended
Six Months Ended
 
June 30, 2018
June 30, 2017
June 30, 2018
June 30, 2017
 
$
$
$
$
RSA pool management fees and commissions (i)

(1,063
)

(2,799
)
Commercial management fees (ii)

(480
)

(1,187
)
Vessel operating expenses - technical management fee (iii)
(2,800
)
(2,196
)
(6,100
)
(4,422
)
Strategic and administrative service fees (iv)
(8,633
)
(4,253
)
(17,329
)
(6,917
)
Secondment fees (v)
(142
)

(359
)

LNG service revenues (vi)
31

84

272

168

Technical management fee revenue (vii)
3,171

1,220

6,329

1,220

Service revenues (viii)
254

277

415

277

Entities under Common Control (note 4)
 
 
 
 
   RSA pool management fees and commissions (i)

1,063


2,799