Slide 1: Teekay's Second Quarter 2005 Earnings Presentation
Teekay ’s Teekay’s Second Quarter 2005 Earnings Presentation July 28th, 2005 www.teekay.com
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: the Company’
Slide 3: Highlights
Highlights 2nd Quarter net income of $104.6 million, or $1.23 per share (including specific items which increased net income by $12.7 million or $0.15 per share) Record high second quarter spot Aframax rates - $34,500 per day Completed IPO of Teekay LNG Partners Awarded contracts by the Tang
Slide 4: Developments in Teekay's LNG Segment
Developments in Teekay’s LNG Segment Completed IPO of Teekay LNG Partners L.P. (NYSE: TGP) in early May at $22 per unit, representing a 7.5% yield Teekay LNG has since traded to a high of $32.45 => Teekay’s interest worth over $780 million or over $9.00 per Teekay share Teekay expects to recei
Slide 5: Developments in Teekay's Fixed Rate Tanker Segment
Developments in Teekay’s Fixed Rate Tanker Segment Cash flow from vessel operations of $75 million, up from $70 million. Signed three-year shuttle tanker contract to service Australian oil field – first shuttle tanker operation in Australia Planning to drydock more shuttle tankers in Q3, resul
Slide 6: Teekay - Spot Segment Highlights
Teekay - Spot Segment Highlights 2q05 Aframax earnings of $34,500 / day 2q05 Suezmax earnings of $42,500 / day Teekay fleet almost entirely double hull Increased charterer discrimination against single hull vessels. Main fleet changes: Q2: Delivered four single hulls to new owners Redeli
Slide 7: Continued Strong Oil Demand
Continued Strong Oil Demand World oil demand OECD Industry Stocks World oil supply 94 2,000 Estimated winter 2006 Forecast: 2.1% oil demand growth oil demand is 4.0 Inventory growth mb/d higher than 88 forms part of OPEC 1,700 OECD Industry Stocks - Mill. Bbl. 2005 demand strategy to meet 4q05 Oil D
Slide 8: Non OPEC Oil to Provide Incremental Tanker Demand Growth
Non OPEC Oil to Provide Incremental Tanker Demand Growth 54 1q06 Non OPEC production 53 estimated to be 1.7 mb/d above 2q05. Equal to an estimated 2.5% growth in tanker demand1. 52 Million B/D 51 50 49 48 1q05 2q05 3q05E 4q05E 1q06E 2q06E 3q06E 4q06E Source : IEA 1 Assumes every 1 mb/d increase in N
Slide 9: Effect of Supply Growth Varies by Segment
Effect of Supply Growth Varies by Segment 2q04 TCE L-T-M 2q05 TCE TCE ($ / day) Fleet ($ / day) Change Growth (dwt) VLCC 65,000 7% 39,000 - 40% Suezmax 50,000 8% 40,000 - 20% Aframax 32,000 6% 32,000 0% Clarkson Data Teekay Shipping: The Marine Midstream Company 9
Slide 10: Market Outlook
Market Outlook Typical short-term volatility in early 3q05: VLCC rates up in response to increased Middle East sailings Aframax Atlantic substantially weaker – North Sea oil field maintenance, Libya, hurricane disruptions Upcoming winter market viewed positively: Utilization below its peak
Slide 11: Teekay 'Sum of Parts' Valuation
Teekay ‘Sum of Parts’ Valuation Fixed-rate Tanker Segment Teekay LNG Partners L.P. Spot Tanker Segment CFVO * $285m TGP Enterprise $1,528m Owned Fleet Value @ $32.45 2004 CFVO * $457m Multiple 10x Less: Multiple 5.6x Enterprise $2,850m Value Actual net debt $523m Owned Fleet $2,561m MLP Equity Value
Slide 12: Share Repurchase Update
Share Repurchase Update Repurchase Program Date $ value $ value # shares # shares Program Size Announced repurchased remaining repurchased remaining 3 million #1 Nov. 24, '04 $128.9m 3.0 million shares #2 $225m Apr. 20, '05 $169.7m $55m 3.9 million ~ 1.2 million* Increase to $250m July 27, '05 $250m
Slide 13: Segment Operating Results
Segment Operating Results (in thousands of U.S. dollars) Three Months Ended Three Months Ended 30-Jun-05 30-Jun-04 (unaudited) (unaudited) Spot Fixed-rate Fixed-rate Total Spot Fixed-rate Fixed-Rate Total Tanker Tanker LNG Tanker Tanker LNG Segment Segment Segment Segment Segment Segment Net voyage
Slide 14: Summary Income Statement
Summary Income Statement Three months ended June 30, 2005 June 30, 2004 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 480,140 477,622 General and administrative expenses (40,179) (25,816) Gain on sales of vessels, net of writedowns 15,894 450 Other operating expenses (
Slide 15: Summary Balance Sheet
Summary Balance Sheet As at June As at Dec. 31, In 000s of USD 30, 2005 2004 (unaudited) ASSETS Cash and cash equivalents 246,832 427,037 Other current assets 193,627 264,806 Total restricted cash 394,581 448,812 Vessels held for sale - 129,952 Total vessels and equipment 3,431,271 3,531,287 Other a
Slide 16: Significant Operating Leverage
Significant Operating Leverage $3.00 $2.50 Q3 2005: Spot Rate increase EPS Increase $1,000 TCE/day ~ $0.06 / qtr above $15,000 / day $2.00 Quarterly Earnings Per Share $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 $60,000 Afram ax Rate s ($ per
Slide 17: Teekay - The Marine Midstream Company
Teekay - The Marine Midstream Company Teekay Shipping: The Marine Midstream Company 17
Slide 18: Appendix – Reconciliation of Cash Flow from Vessel Operations
Appendix – Reconciliation of Cash Flow from Vessel Operations Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense and vessel write-downs/(gain) loss on sale of vessels. Cash flow from vessel operations is a non-GAAP financial measu