Slide 1: Teekay's Fourth Quarter and Fiscal 2008 Earnings Presentation
TEEKAY CORPORATION Teekay’s Fourth Quarter and Fiscal 2008 Earnings Presentation June 4, 2009 www.teekay.com
Slide 2: Forward Looking Statements
Forward Looking Statements This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: tanker market fun
Slide 3: Fourth Quarter and Fiscal 2008 Results
Fourth Quarter and Fiscal 2008 Results f Earned Q4 adjusted net income of $53.2m, or $0.73 per share(1), up from $0.31 per share in Q4’07 f Generated $199m of cash flow from vessel operations(2) in Q4 (~71% from fixed-rate segments)(3) f 2008 annual adjusted net income was $285m, or $3.94 per share
Slide 4: Highlights – Fourth Quarter 2008 to Present
Highlights – Fourth Quarter 2008 to Present f Further strengthened financial profile in Q4’08 and 2009 YTD through: f Disposal of spot assets – gain of $107m and proceeds of over $380m since October 2008 f $70m equity raise at Teekay LNG Partners f Debt profile improvements through new and/or extens
Slide 5: Positive Developments
Positive Developments f Varg FPSO contract extended on improved terms from 9 Charter renewals July 1, 2009 at improved rates f Shuttle contract renewals above last done f Secured 8-year FSO contract for oldest shuttle tanker Securing new 9 f Out-chartered 10 conventional tankers locking-in contracts
Slide 6: Tanker Market Fundamentals
Tanker Market Fundamentals BALANCE OF 2009 – Weak Outlook 2010 – Emerging Recovery? Demand Demand f Global oil demand shrinking as GDP f Potential for economic recovery beginning growth turns negative in 2010 f OPEC cutbacks have led to reduced f Economic stimulus and lower energy tanker demand / lo
Slide 7: Reducing Spot Market Exposure for 2009
Reducing Spot Market Exposure for 2009 f Spot Segment (<3 years) already represents less than 1/3rd of Teekay’s business(1) f On average, over 20% of Spot Segment has been locked-in for 2009(2) f Spot market exposure and cash flow breakeven further reducing in 2009 as in-charters roll-off Spot Segme
Slide 8: Q4 2008 Income Statement
Q4 2008 Income Statement Three Months Ended December 31, 2008 September 30, 2008 Adjusted for Adjusted for (1) (2) (in thousands of U.S. dollars) As Reported Appendix A Items Appendix A Items Appendix A Items (unaudited) NET VOYAGE REVENUES Voyage revenues 801,640 (15,890) 785,750 871,009 Voyage exp
Slide 9: Q4 '08 Non-Cash Goodwill and Vessel Impairment Charges
Q4 ’08 Non-Cash Goodwill and Vessel Impairment Charges f Goodwill charge mainly a consequence of lower share price and higher market discount rates used to assess fair market value f 2008 annual impairment evaluation resulted in: f $330m goodwill impairment related to Teekay Petrojarl acquisition f
Slide 10: Non-Cash Swap Loss Reduces Reported Earnings
Non-Cash Swap Loss Reduces Reported Earnings f Cessation of hedge accounting introduces quarterly income statement movement (shown as an unrealized gain or loss on our income statement) due to mark-to-market accounting f Unusually large drop in swap rates in late 2008 resulted in an exceptionally hi
Slide 11: G&A Reduction a Key Focus
G&A Reduction a Key Focus f Since peaking in Q2 2008, quarterly G&A run-rate has been reduced by approximately 20%, or $10m f Headcount reductions, office rationalizations and cost saving initiatives Teekay Consolidated 2008 Normalized* Quarterly G&A Expense $70 $65 $60 $ Millions $55 $50 $45 $40 Q2
Slide 12: Teekay Remains Well-Positioned Financially
Teekay Remains Well-Positioned Financially f Approximately $1.9bn of liquidity at December 31, 2008 f Newbuilding deliveries more than offset by approximately $200m of third-party vessel sales and $70m from daughter company equity issuance in 2009 YTD, used to pay down revolvers f Current liquidity
Slide 13: Optimizing Existing Business and Reducing Risk
Optimizing Existing Business and Reducing Risk f Renewing existing fixed-rate contracts at higher rates f Growing long-term fixed-rate cash flows f Reducing spot exposure f Reducing G&A costs f Reducing debt and extending maturities f Growing liquidity 13 www.teekay.com
Slide 14: Teekay Group Investor Meeting
Teekay Group Investor Meeting f Date: June 23, 2009 f Time: 8:30 am – 11:45 am ET Teekay Corp. 8:30 am - 10:00 am Break Teekay LNG Partners 10:15 am - 10:45 am Teekay Offshore Partners 10:45 am - 11:15 am Teekay Tankers 11:15 am - 11:45 am f Location: Wedgewood Room The Pierre Hotel 2 East 61st St.
Slide 15: Appendices
Appendices www.teekay.com
Slide 16: Q4 2008 Appendix A Item Descriptions
Q4 2008 Appendix A Item Descriptions Q 4/08 App. A Items Explanation of Items (in thousands of U.S. dollars) NE T VOY AGE REVE NUES Voyage revenues (15,890) Unrealized gains on derivative instruments Voyage expenses (5,735) Unrealized losses on derivative instruments Net voyage revenues (10,155) OPE
Slide 17: Q3 2008 Adjusted Net Income Reconciled to GAAP Net Income
Q3 2008 Adjusted Net Income Reconciled to GAAP Net Income Thr ee Months Ended S eptember 30, 2008 Adjusted for As Reported Appendix A Items Appendix A Items (unaudited) NE T VOY AGE REVE NUES Voyage revenues 879,244 (8,235) 871,009 Voyage expenses 213,709 (705) 213,004 Net voyage revenues 665,535 (7