Slide 1: Teekay 2012 Investor Day
Teekay 2012 Investor Day June 18, 2012
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation 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 marke
Slide 3: Agenda
Agenda • Teekay Corporation 1:30pm – 2:45pm ○ Peter Evensen, CEO, Teekay Corporation – Overview and Strategy ○ Vince Lok, CFO, Teekay Corporation – Financial Discussion ○ Peter Lytzen, President ,Teekay Petrojarl – Knarr Project and FPSO Business ○ Teekay Parent Q&A • Teekay Offshore Partners 3:00pm
Slide 4: www.teekay.com
4 www.teekay.com
Slide 5: Teekay is a play on the build-out of global energy infrastructure
TEEKAY IS A PLAY ON THE BUILD-OUT OF GLOBAL ENERGY INFRASTRUCTURE 5 www.teekay.com
Slide 6: Global Infrastructure Build-Out In Progress
Global Infrastructure Build-Out In Progress LNG Oil • LNG is the key to transitioning natural • Remaining conventional land-based gas from a regional to a global market crude increasingly controlled by National • Growth in LNG liquefaction, Oil Companies transportation and regasification projects •
Slide 7: Global Energy Demand to Grow 40% by 2030
Global Energy Demand to Grow 40% by 2030 Source: BP 7 www.teekay.com
Slide 8: World Becoming More Reliant On Offshore Oil
World Becoming More Reliant On Offshore Oil • Easy-to-find onshore and shallow offshore crude reserves are getting depleted • Global E&P spending set to grow with a strong focus on offshore • Historic high rates of deepwater drilling will lead to FPSO (Thousands of BBLs) and shuttle demand in future
Slide 9: LNG Shipping in the “Golden Age of Gas”
LNG Shipping in the “Golden Age of Gas” • LNG supply expected to grow by 4.4% p.a. to 2030, more than twice as fast as underlying global gas production (2.1% p.a.) • Demand growth driven by the power generation sector with gas displacing coal • Non-OECD, led by China, accounts for the majority of de
Slide 10: At the Bottom of the Tanker Cycle
At the Bottom of the Tanker Cycle • The tanker market is at cyclical lows; after four years, a sustained recovery is expected to emerge during 2013 • Changing regional trade patterns and limited supply growth supportive of improving Aframax rate outlook • Suezmax and VLCC tankers set to benefit from
Slide 11: Teekay is a Market Leader in Each of Its Segments
TEEKAY IS A MARKET LEADER IN EACH OF ITS SEGMENTS 11 www.teekay.com
Slide 12: Largest Operator of Mid-Size Conventional Tankers
Largest Operator of Mid-Size Conventional Tankers Transports approximately 94 10% of the world’s seaborne oil 2 68 67 3 61 3 53 29 24 64 58 7 2 22 22 Teekay 1 Heidmar Sovcomflot AET/ OSG Stena Tsakos Pools Group MISC Pools Sonangol Existing Newbuildings on Order Source: Clarkson Research Services, P
Slide 13: Largest Global Fleet of Shuttle Tankers
Largest Global Fleet of Shuttle Tankers Controls More Than 40 50% of the World’s Fleet 4 22 4 36 9 5 18 3 7 2 Teekay Knutsen NYK Transpetro Viken / PJMR Lauritzen Existing Newbuildings on Order Source: Clarkson Research Services, Platou, Company Websites, Industry Sources. 13 www.teekay.com
Slide 14: A Leading Leased FPSO Operator
A Leading Leased FPSO Operator Leader in the Number of Units 7 2 North Sea 3 2 5 1 Top-4 Leased Teekay Bluewater Maersk BW FPSO Operator Offshore Worldwide In Service On Order / Under Conversion Number of Units 17 15 14 3 3 10 2 6 14 4 4 3 3 12 8 2 1 1 2 2 2 SBM MODEC BW Teekay Bluewater Maersk Bumi
Slide 15: Third Largest Independent Operator of LNG Carriers
Third Largest Independent Operator of LNG Carriers Modern Fleet Chartered to Diversified Customer Base 40 32 8 27 1 21 16 16 12 32 31 11 2 11 10 14 5 MOL NYK Teekay Golar BW Gas Maran K Line Gas Exisiting Newbuildings on order Note: Excludes state & oil company fleets. Source: Clarkson Research Serv
Slide 16: Diversified Business Model
Diversified Business Model • Patient, deliberate evolution across three segments • Eliminating cyclicality by generating value at every point in the cycle • $11 billion of consolidated assets, approximately 150 vessels • Over $15 billion of consolidated forward fixed-rate revenues • „One-stop shop‟
Slide 17: Overall Goal: Grow Teekay's NAV per Share
OVERALL GOAL: GROW TEEKAY’S NET ASSET VALUE PER SHARE 17 www.teekay.com
Slide 18: Main Drivers for Growing NAV per Share
Main Drivers for Growing NAV per Share • Increase the value • Organically develop • Operate with high of daughter new projects and HSEQ standards companies and commercialize new the value of our business areas • Greater focus on two GP interests costs and • Accretive profitability • Allocate capital
Slide 19: Asset Manager: #1 Value Driver
ASSET MANAGER: #1 VALUE DRIVER INCREASING THE VALUE OF TEEKAY’S GPS 19 www.teekay.com
Slide 20: Corporate Structure Enables Value Creation
Corporate Structure Enables Value Creation Investment New TEEKAY CORPORATION Projects (PARENT) Sale of Sale of Proceeds GP and LP New Existing from Asset distributions / Projects Assets Sales dividends Proceeds from Equity Issuance Assets TEEKAY TEEKAY TEEKAY LNG OFFSHORE TANKERS Daughter Third Shar
Slide 21: Project Developer: The Teekay Competitive Advantage
PROJECT DEVELOPER: THE TEEKAY COMPETITIVE ADVANTAGE 21 www.teekay.com
Slide 22: Regional to Global Presence
Regional to Global Presence Acquisition of Bona Shipping (1999) • Market insight suggested a major investment in shipping at an optimal time in the market cycle • Bona‟s HSEQ focus and leadership in the Atlantic Aframax trade provided a strong compliment to Teekay‟s Pacific Aframax business • Positi
Slide 23: Integrating into Customer Value Chain
Integrating into Customer Value Chain Acquisition of Navion Shuttle Tankers (2003) • A strong customer relationship and trust in Teekay‟s operational capabilities led to an opportunity to acquire Statoil’s shipping franchise and enter into a long-term fixed-rate shuttle tanker outsourcing arrangemen
Slide 24: Establishing Access to Capital For Growth
Establishing Access to Capital For Growth Tapias LNG Acquisition/Teekay LNG IPO (2004/2005) • Strong operating track record with customers provided opportunity to enter LNG shipping • Capital intensive business required access to equity capital, facilitating the creation of a publicly-traded LNG shi
Slide 25: Integrating our Capabilities
Integrating our Capabilities Investment in Sevan (2011) Project • Teekay brought all of its core capabilities together to successfully Management complete the complex Sevan transaction Engineering • The transaction further strengthened our existing engineering project competency and diversified our
Slide 26: Evolution of Teekay’s Project Capability
Evolution of Teekay’s Project Capability Potential Project Offshore Sophisticated One Spirit FSRU Future Management Wind FPSOs Tanker Projects Engineering Corporate Governance • Maersk LNG • Brazil shuttle • Sevan • Established Financial acquisition newbuildings transaction commercial Expertise • Ex
Slide 27: Operational Leader: Managing Over 150 Vessels
OPERATIONAL LEADER: MANAGING OVER 150 VESSELS 24/7 TO THE TEEKAY STANDARD 27 www.teekay.com
Slide 28: Organizational Alignment
Organizational Alignment Goal: more cost effective operations while maintaining HSEQ standards • Reorganization of operations with business units and daughter companies to drive greater P&L accountability • Partnership with Anglo-Eastern will provide scale and efficiencies • Creation of Innovation,
Slide 29: Higher Return Growth Through Product and Service Innovation
HIGHER RETURN GROWTH THROUGH PRODUCT AND SERVICE INNOVATION 29 www.teekay.com
Slide 30: Offshore Wind Foundation Installation Vessel
Offshore Wind Foundation Installation Vessel • Adjacent offshore market using Teekay‟s expertise in harsh weather environments • Shuttle tankers well suited for conversion ○ Dynamic positioning technology ○ Large deck space ○ Reducing wind farm installation costs up to 30% • Conversion extends life
Slide 31: One Spirit Green Tanker
One Spirit Green Tanker • Next generation of tankers • Reducing fuel consumption by 30% with three design advancements: ○ Hydrodynamic hull ○ Next generation engine ○ Larger propeller • Compliant with 2025 Energy Efficiency Design Index (EEDI) requirements. 31 www.teekay.com
Slide 32: Teekay’s Framework for Growing Shareholder Value
Teekay’s Framework for Growing Shareholder Value Commercialize New Businesses Cash Flows from New Investment Businesses Investment New TEEKAY CORPORATION Projects (PARENT) Sale of Sale of Proceeds GP and LP New Existing from Asset Distributions / Projects Assets Sales Dividends Proceeds from Equity
Slide 33: Financial Discussion
TK | TEEKAY CORPORATION Financial Discussion
Slide 34: Current Teekay Parent Sum-of-Parts Value
Current Teekay Parent Sum-of-Parts Value ($ millions, except per share amounts) Teekay Parent Assets Conventional Tankers 1 $188 FPSOs 1 575 Newbuildings 2 270 JVs and Other Investments 3 234 FMV of Teekay Parent Assets $1,267 Teekay Parent Net Debt 4 $(831) Add back: Voyageur VIE Debt $220 Equity V
Slide 35: Multiple Ways to Increase NAV per Share
Multiple Ways to Increase NAV Per Share Share Repurchases at Discount to NAV NAV Per Share Improving Profitability of Existing Assets Investment in Higher Return Opportunities GP Value Growth 35 www.teekay.com
Slide 36: GP Incentive Distribution Rights Provide Mechanism for Cash Flow Growth
GP Incentive Distribution Rights Provide Share Mechanism for Parent Cash Flow Growth Repurchases at Discount to NAV Improving Profitability of Existing Assets • As TOO and TGP grow, Teekay Parent will receive an Investment in Higher Return Opportunities increasing share of incremental cash distribut
Slide 37: GP Cash Flows Have Become More Meaningful
GP Cash Flows Have Become Share Repurchases at More Meaningful Discount to NAV Improving Profitability of Existing Assets Investment in Higher Return Opportunities GP Cash Flows to Teekay Parent GP Value Growth $35 $30 $25 $ Millions $20 $15 $10 $5 $0 2005 2006 2007 2008 2009 2010 2011 2012E * TGP T
Slide 38: However, Significantly More to Come
However, Significantly More to Come Share Repurchases at Discount to NAV Improving Profitability of Existing Assets Illustrative Assumptions: TGP TOO Investment in Higher Return Opportunities Annual Distribution Growth Rate per LP Unit 4% 5% GP Value Growth LP Unit Growth per Annum 10% 12% Illustrat
Slide 39: Illustrative Growth in GP Value
Illustrative Growth in GP Value Share Repurchases at Discount to NAV Improving Profitability of Existing Assets Illustrative GP Valuation Investment in Higher (Assuming 22.3x Publicly Traded GP Cash Flow Multiple) Return Opportunities GP Value Growth $37.85/Teekay Share * $3,000 $2,500 $2,000 $ Mill
Slide 40: Visible TOO GP Growth From Remaining FPSOs at Teekay Parent
Visible TOO GP Growth From Remaining FPSOs at Teekay Parent Share Repurchases at Discount to NAV Current Expected Improving Profitability FPSO Unit Charterer Contract Dropdown Status of Existing Assets Expiry Availability Investment in Higher Return Opportunities Capital upgrade Voyageur GP Value Gr
Slide 41: Proven Track Record of Distribution Growth at TGP
Proven Track Record of Share Distribution Growth at TGP Repurchases at Discount to NAV $2.70 Improving Profitability of Existing Assets MAERSK LNG Investment in Higher (52% JV) (6 LNG Carriers) Return Opportunities GP Value Growth ANGOLA PROJECT (33%) (4 LNG carriers) SKAUGEN $2.52 (3 LPGs) EXMAR (2
Slide 42: 2011 Teekay Parent Acquisitions and Projects
Investments In Higher Return Opportunities Share Repurchases at Discount to NAV • 2011 Teekay Parent Acquisitions and Projects Improving Profitability of Existing Assets Investment in Higher ○ Hummingbird Spirit and Voyageur Spirit FPSO acquisitions Return Opportunities GP Value Growth ○ 40% shareho
Slide 43: Organizing to Achieve Greater Cost-Effectiveness
Organizing to Achieve Greater Cost-Effectiveness Share Repurchases at Discount to NAV Improving Profitability of Existing Assets Investment in Higher Return Opportunities GP Value Growth 43 www.teekay.com
Slide 44: Teekay Marine Ltd.
Teekay Marine Ltd. Share Repurchases at Discount to NAV • Establishing a new subsidiary company, Teekay Marine Improving Profitability of Existing Assets Investment in Higher Ltd. (TML) Return Opportunities • New company will be 51% owned by Teekay and 49% GP Value Growth by Anglo-Eastern Group • TM
Slide 45: Reducing Teekay Parent Direct Conventional Tanker Exposure
Reducing Teekay Parent Direct Conventional Share Tanker Exposure Repurchases at Discount to NAV • Owned fleet reduced from 17 vessels to 4 Suezmaxes Improving Profitability of Existing Assets Investment in Higher (2009-built) Return Opportunities • In-chartered fleet rolling off rapidly: TCH expense
Slide 46: Illustrative Teekay Parent Free Cash Flow
Illustrative Teekay Parent Free Cash Flow Share Repurchases at Discount to NAV Assumptions: Improving Profitability of Existing Assets • Does not include cash flows from potential new Teekay Parent Investment in Higher Return Opportunities investments GP Value Growth • Dropdowns: o Voyageur (Q4-2012
Slide 47: Illustrative Teekay Parent Free Cash Flow
Illustrative Teekay Parent Free Cash Flow Share Repurchases at Discount to NAV Improving Profitability $300 of Existing Assets Investment in Higher $250 Return Opportunities $200 GP Value Growth $150 $100 $50 $ Millions $0 ($50) ($100) ($150) ($200) 2010 2011 2012 2013 2014 LP Cash Flows GP Cash Flo
Slide 48: Return of Capital to Shareholders
Return of Capital to Shareholders Share Repurchases at Discount to NAV Improving Profitability Dividends of Existing Assets Investment in Higher • Teekay Parent free cash flow is improving and will Return Opportunities support the future stability of Teekay‟s dividend (current GP Value Growth yield:
Slide 49: Financial Strength and Access to Capital are Prerequisites for NAV Growth
Financial Strength and Access to Capital are Prerequisites for NAV Growth Share Repurchases at Discount to NAV NAV Per Share Improving Profitability of Existing Assets Investment in Higher Return Opportunities GP Value Growth Financial Strength and Access to Capital 49 www.teekay.com
Slide 50: Deleveraging Enables Teekay Parent to Invest in New Higher Return Opportunities
Deleveraging Enables Teekay Parent to Invest in New Higher Return Opportunities Illustrative Teekay Parent Net Debt Continuity $2,500 $2,000 Reduction in Net Debt $1,500 $ Millions Increase in Net Debt $1,000 $1,261 $500 $0 ($122) -$500 Net Debt, March 31, CAPEX Payments Drop Down Teekay Parent Free
Slide 51: Access to Multiple Sources of Capital
Access to Multiple Sources of Capital Current Sources Teekay Corporation (consolidated) • Commercial Bank Debt Sources of Capital (December 31, 2008 - Present) • Export Credit Agency (ECA) Facilities $1,710 • U.S. Corporate Bonds $2,024 • Norwegian Kroner Bonds $325 $450 • Joint Venture Partners • D
Slide 52: $2.4 Billion of Debt and Equity Financings Completed Since Start of 2011
$2.4 Billion of Debt and Equity Financings Completed Since Start of 2011 Entity Debt Financing Amount Equity Financing Date Amount Stena Spirit Feb TOO $23.6m TNK Public Follow-on $108m (Refinancing – 50% portion) 2011 Tiro & Sidon FPSO Apr Parent $150m TGP Public Follow-on $160m (50% portion) 2011
Slide 53: Daughter Companies Can Now Directly Undertake Projects and Acquisitions
Daughter Companies Can Now Directly Undertake Projects and Acquisitions Aggregate Teekay Daughter Market Capitalization $5,000 TNK $4,000 $ Millions TOO $3,000 $2,000 TNK TOO TGP $1,000 TGP $0 December 31, 2007 June 13, 2012 Aggregate Daughter Aggregate Daughter Financial Liquidity Financial Liquidi
Slide 54: Teekay’s Framework for Growing Shareholder Value
Teekay’s Framework for Growing Shareholder Value Commercialize New Businesses Teekay Cash Flows Shareholders from New Investment Businesses Return of Proceeds Capital from Debt Issuance Investment New TEEKAY CORPORATION (PARENT) Lenders Projects Debt Service Sale of Sale of Proceeds GP and LP New Ex
Slide 55: Appendix
TEEKAY CORPORATION 4 BINGES SPIRIT Appendix June 18, 2012
Slide 56: Teekay Parent Free Cash Flow Illustration Details
Teekay Parent Free Cash Flow Illustration Details Actual Forecasted Comments ($ 000's) 2011* 2012 2013 2014 Owned Conventional Tankers Revenues 120,289 72,400 36,200 43,400 Operating expenses 55,706 29,700 11,400 11,700 General and administrative 22,500 12,700 2,900 2,900 Owned Conventional CFVO $42