Slide 1: Teekay's Fourth Quarter 2004 Earnings Presentation
Teekay ’s Teekay’s Fourth Quarter 2004 Earnings Presentation Feb.17, 2005 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: the Company’s fut
Slide 3: 4th Quarter Highlights
4th Quarter Highlights Best ever 4th quarter result with net income of $225 million, or $2.50 per share. Result was net of specific items totaling $51 million; without this deduction the 4th quarter would have been an all time record. Record quarterly cash flow from vessel operations (CFVO) of
Slide 4: 4th Quarter Highlights (Continued)
4th Quarter Highlights (Continued) Filed for IPO of Teekay LNG Partners L.P. - Formed by Teekay as part of strategy to accelerate expansion in LNG shipping. - Initial assets; four LNG carriers and five Suezmax tankers, all on long-term fixed-rate charters. - Teekay to retain approximately 75 perce
Slide 5: 2004 Highlights
2004 Highlights Record net income of $757 million or $8.63 per share. Highest ever CFVO of $980 million. Strategic entry into LNG sector. New investments: $1.8 billion executed and a further $700 million committed. Conducted further fleet renewal of conventional fleet* during 2004 Reduce
Slide 6: Strong Oil Demand Growth
Strong Oil Demand Growth World oil demand OECD Industry Stocks World oil supply 94 2000 2005 Forecast: 1.8% oil OECD Industry Stocks - Million Bbls 88 2004 Actual: 3.4% oil demand 1700 Oil Demand / Supply - Million B/D demand growth growth 82 1400 76 1100 70 800 64 500 1q99 3q99 1q00 3q00 1q01 3q01
Slide 7: Tanker Supply
Tanker Supply Deliveries Deletions On Order Net Change 40 30 M illion Deadw eight 20 10 0 -10 -20 -30 -40 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 + Source: CRS Teekay Shipping: The Marine Midstream Company 7
Slide 8: Category 1 Tankers – They can run but they can't hide!
Category 1 Tankers – They can run but they can’t hide! Conversion of Cat. 1 Tankers to Cat. 2 would create only negligible delays to overall phase-out timing CATEGORY 1 TANKERS Phase out year if Phase out year if Trading Life gained Year of Build Dwt. remain Cat 1 converted to Cat 2 (Years) 1970 0.0
Slide 9: High Average Rate of Scrapping since 2000
High Average Rate of Scrapping since 2000 Deliveries Deletions On Order Net Change 40 30 M illion Deadw eight 20 10 0 -10 -20 -30 ’00 – ‘04: Avg. Annual Deletions = 15.8 mdwt -40 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 + Source: CRS Teekay Shipping: The Marine Mids
Slide 10: Continued Tightening in Tanker Supply / Demand Balance
Continued Tightening in Tanker Supply / Demand Balance Utilisation Supply Demand 310 100% 280 98% 250 96% World Fleet in Million D wt. LH Axis 220 90% is considered 94% U tilisation % full utilisation of RH Axis 190 fleet 92% 160 90% 130 88% 100 86% 70 84% 40 82% 1q00 3q00 1q01 3q01 1q02 3q02 1q03 3
Slide 11: TCE Rates Spiking due to High Utilisation
TCE Rates Spiking due to High Utilisation Utilisation Aframax TCE 90,000 100% 80,000 98% LH Axis 70,000 96% TCE US$ per day 60,000 94% RH Axis Utilisation % 50,000 92% 40,000 90% 30,000 88% 20,000 86% 10,000 84% 0 82% 1q00 3q00 1q01 3q01 1q02 3q02 1q03 3q03 1q04 3q04 Source : Platou / CRS Teekay Shi
Slide 12: 2005 - Fleet Supply Scenarios
2005 - Fleet Supply Scenarios Fleet Low scrapping scenario Average scrapping scenario 330 10 mdwt scrapped 310 W orld Fleet in Million D wt. 15 mdwt scrapped 290 270 250 230 210 2000 2001 2002 2003 2004 2005 E Source: Platou Teekay Shipping: The Marine Midstream Company 12
Slide 13: 2005 Tanker Demand Growth Scenarios
2005 Tanker Demand Growth Scenarios Tanker Demand Average oil demand growth * High oil demand growth ** 300 * 1.8% oil demand growth (IEA 6% tanker estimate) x 1.75 (conversion demand factor) = 3.2% tanker demand growth Tanker Demand in Million Dwt. growth 280 * * 3.4% oil demand growth (2004 3.2% t
Slide 14: Every Supply / Demand Scenario points to High Fleet Utilisation in 2005
Every Supply / Demand Scenario points to High Fleet Utilisation in 2005 Scenario B: “Average scrapping; high oil demand growth” Average 4q04 utilisation 94.8%=> * TCE $81,900/day “B” Average 2004 Range of utilisation 92.1%=> other TCE $49,600/day outcomes “A” Scenario A: “Low scrapping; average oil
Slide 15: Fourth Quarter 2004 Tanker Market Highlights
Fourth Quarter 2004 Tanker Market Highlights Strong global economic growth and seasonality led to a rise in oil demand of 2.5 mb/d from 3q04. Rising oil supply from long haul sources; OPEC oil production rose by 0.5 mb/d from already high levels in 3q04. Charterers covering lifting requirement
Slide 16: Factors in 2005
Factors in 2005 In January, rates declined due to OPEC production cuts. In February, rates have recovered. Venezuela wild card: Venezuela oil to China and long-haul US replacement imports would boost ton-mile demand significantly. In April, IMO phase-out schedule for single hull tankers take
Slide 17: Developments in Teekay's Spot Tanker Segment
Developments in Teekay’s Spot Tanker Segment Q4 completed sale of six* single hull ships; recognized gain of $24.8 million. Maintained large spot fleet through active newbuilding delivery and in-charter programs. Customer discrimination against single hull tonnage intensifying. Remaining own
Slide 18: Developments in Teekay's Fixed Rate Segments
Developments in Teekay’s Fixed Rate Segments Record quarterly cash flow from vessel operations in fixed rate segments of $89 million. Announced planned IPO of Teekay LNG Partners. High oil price driving increased activity in offshore sector => improved demand environment for Teekay shuttle and
Slide 19: Segment Operating Results
Segment Operating Results Three Months Ended Three Months Ended 31-Dec-04 31-Dec-03 (unaudited) (unaudited) Spot Fixed-Rate Fixed-Rate Spot Fixed-Rate Tanker Tanker LNG Tanker Tanker (in thousands of U.S. dollars) Segment Segment Segment Total Segment Segment Total Net voyage revenues 366,786 171,41
Slide 20: Summary Income Statement
Summary Income Statement Three months ended Dec. 31, 2004 Dec. 31, 2003 000s of USD (except per share data) (unaudited) (unaudited) Voyage Revenues 669,553 451,048 General and administrative expenses (48,251) (26,362) Gain/(loss) on sale of vessels and vessel write-downs 24,689 (54,048) Other Operat
Slide 21: Summary Balance Sheet
Summary Balance Sheet In 000s of USD As at Dec. 31, 2004 As at Sept. 30, 2004 ASSETS Cash and cash equivalents 427,037 308,034 Other current assets 264,806 205,626 Total Restricted cash 448,812 413,706 Vessels held for sale 129,952 - Total vessels and equipment 3,531,287 3,540,936 Other assets 254,7
Slide 22: Significant Operating Leverage
Significant Operating Leverage $3.50 $3.00 Q1 2005: Spot Rate increase $2.50 EPS Increase Quarterly Earnings Per Share $1,000 TCE/day above $13,500 / day ~ $0.06 / qtr $2.00 $1.50 $1.00 $0.50 $- $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 Aframax Rates ($
Slide 23: Teekay - The Marine Midstream Company
Teekay - The Marine Midstream Company Teekay Shipping: The Marine Midstream Company 23