| Segment Reporting |
Segment Reporting On July 31, 2015, the Company acquired a ship-to-ship transfer business (or SPT) from a company jointly-owned by Teekay and a Norway-based marine transportation company I.M. Skaugen SE (see note 17). Following the acquisition, 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 those 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 table includes results for the Company’s revenues and income from vessel operations by segment for the period ended September 30, 2016. | | | | | | | | | | | | | | | | | | Three Months Ended September 30, 2016 | | | | | | | | | | | | | | | Conventional | | Ship-to-Ship | | | | | | | | Tanker | | Transfer | | Inter-segment | | | | | | Segment | | Segment | | Adjustment (1) | | Total | Revenues | | 95,626 |
| | | 9,837 |
| | | (842 | ) | | | 104,621 |
| | Voyage expenses | | (15,775 | ) | | | — |
| | | 842 |
| | | (14,933 | ) | | Vessel operating expenses | | (37,462 | ) | | | (7,321 | ) | | | — |
| | | (44,783 | ) | | Time-charter hire expense | | (10,784 | ) | | | (551 | ) | | | — |
| | | (11,335 | ) | | Depreciation and amortization | | (24,651 | ) | | | (1,237 | ) | | | — |
| | | (25,888 | ) | | General and administrative expenses | | (2,955 | ) | | | (617 | ) | | | — |
| | | (3,572 | ) | | Asset impairment | | (7,766 | ) | | | — |
| | | — |
| | | (7,766 | ) | | Loss on sale of vessel | | (137 | ) | | | — |
| | | — |
| | | (137 | ) | | (Loss) income from operations (2) | | (3,904 | ) | | | 111 |
| | | — |
| | | (3,793 | ) | | | | | | | | | | | | | | | Equity Income | | 1,045 |
| | | — |
| | | — |
| | | 1,045 |
| |
| | (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 is based on estimated costs incurred of approximately $25,000 per voyage. |
| | (2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
| | | | | | | | | | | | | | | | | | Three months ended September 30, 2015 | | | | | | | | | | | | | | | Conventional | | Ship-to-Ship | | | | | | | | Tanker | | Transfer | | Inter-segment | | | | | | Segment | | Segment | | Adjustment (1) | | Total | Revenues | | 117,863 |
| | | 8,850 |
| | | (312 | ) | | | 126,401 |
| | Voyage expenses | | (2,461 | ) | | | (192 | ) | | | — |
| | | (2,653 | ) | | Vessel operating expenses | | (29,164 | ) | | | (6,415 | ) | | | 312 |
| | | (35,267 | ) | | Time-charter hire expense | | (21,344 | ) | | | (38 | ) | | | — |
| | | (21,382 | ) | | Depreciation and amortization | | (17,234 | ) | | | (644 | ) | | | — |
| | | (17,878 | ) | | General and administrative expenses | | (3,398 | ) | | | (912 | ) | | | — |
| | | (4,310 | ) | | Restructuring charges | | — |
| | | (327 | ) | | | — |
| | | (327 | ) | | Income from operations (2) | | 44,262 |
| | | 322 |
| | | — |
| | | 44,584 |
| | | | | | | | | | | | | | | Equity Income | | 2,762 |
| | | — |
| | | — |
| | | 2,762 |
| |
| | (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 is based on estimated costs incurred of approximately $25,000 per voyage. |
| | (2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
| | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2016 | | | | | | | | | | | | | | | Conventional | | Ship-to-Ship | | | | | | | | | Tanker | | Transfer | | Inter-segment | | | | | | Segment | | Segment | | Adjustment (1) | | Total | Revenues | | 380,283 |
| | | 30,922 |
| | | (2,013 | ) | | | 409,192 |
| | Voyage expenses | | (39,527 | ) | | | — |
| | | 2,013 |
| | | (37,514 | ) | | Vessel operating expenses | | (112,248 | ) | | | (23,997 | ) | | | — |
| | | (136,245 | ) | | Time-charter hire expense | | (46,670 | ) | | | (1,294 | ) | | | — |
| | | (47,964 | ) | | Depreciation and amortization | | (74,925 | ) | | | (3,651 | ) | | | — |
| | | (78,576 | ) | | General and administrative expenses | | (11,359 | ) | | | (2,415 | ) | | | — |
| | | (13,774 | ) | | Asset impairments | | (14,186 | ) | | | — |
| | | — |
| | | (14,186 | ) | | Loss on sale of vessel | | (137 | ) | | | — |
| | | — |
| | | (137 | ) | | Income (loss) from operations (2) | | 81,231 |
| | | (435 | ) | | | — |
| | | 80,796 |
| | | | | | | | | | | | | | | Equity Income | | 9,599 |
| | | — |
| | | — |
| | | 9,599 |
| |
| | (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 is based on estimated costs incurred of approximately $25,000 per voyage. |
| | (2) | Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources). |
| | | | | | | | | | | | | | | | | | Nine months ended September 30, 2015 | | | | | | | | | | | | | | | Conventional | | Ship-to-Ship | | | | | | | | | Tanker | | Transfer | | Inter-segment | | | | | | Segment | | Segment | | Adjustment (1) | | Total | Revenues | | 336,669 |
| | | 8,850 |
| | | (312 | ) | | | 345,207 |
| | Voyage expenses | | (9,972 | ) | | | (192 | ) | | | — |
| | | (10,164 | ) | | Vessel operating expenses | | (80,982 | ) | | | (6,415 | ) | | | 312 |
| | | (87,085 | ) | | Time-charter hire expense | | (53,140 | ) | | | (38 | ) | | | — |
| | | (53,178 | ) | | Depreciation and amortization | | (47,702 | ) | | | (644 | ) | | | — |
| | | (48,346 | ) | | General and administrative expenses | | (10,080 | ) | | | (912 | ) | | | — |
| | | (10,992 | ) | | Restructuring charges | | (4,445 | ) | | | (327 | ) | | | — |
| | | (4,772 | ) | | Income from operations (2) | | 130,348 |
| | | 322 |
| | | — |
| | | 130,670 |
| | | | | | | | | | | | | | | Equity Income | | 8,931 |
| | | — |
| | | — |
| | | 8,931 |
| |
| | (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 is based on estimated costs incurred of approximately $25,000 per voyage. |
| | (2) | 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 | | September 30, 2016 | | December 31, 2015 | | $ | | $ | Conventional Tanker | 1,842,803 |
| | 2,020,317 |
| Ship-to-Ship Transfer | 30,499 |
| | 24,429 |
| Cash and cash equivalents | 59,237 |
| | 96,417 |
| Accounts receivable | 25,245 |
| | 28,313 |
| Consolidated total assets | 1,957,784 |
| | 2,169,476 |
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