Slide 1: Teekay's First Quarter 2006 Earnings Presentation
TEEKAY SHIPPING Teekay ’s First Teekay’s Quarter 2006 Earnings Presentation May 4th, 2006 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 2: Forward Looking Statements
TEEKAY SHIPPING 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: t
Slide 3: Highlights
TEEKAY SHIPPING Highlights f 1q06 net income of $101.7 million, or $1.35 per share (including specific items which decreased net income by $17.3 million, or $0.23 per share) f Generated cash flow from vessel operations of $193 million, of which ~$90 million from fixed-rate businesses f Strong first
Slide 4: Disciplined Use of Capital
TEEKAY SHIPPING Disciplined Use of Capital f Made significant investment in growing our businesses during the last twelve months: f Fixed-rate: $170 million f LNG: $715 million f Spot: $445 million f Total: $1.33 billion f Strengthened the balance sheet: f Leverage reduced from 42% to 37% f Total li
Slide 5: Teekay "Sum-of-Parts" Valuation
TEEKAY SHIPPING Teekay “Sum-of-Parts” Valuation * Teekay LNG Fixed-Rate Tanker Segment Partners L.P. Spot Tanker Segment CFVO $238m TGP market Owned Fleet capitalization @ $1,106m FMV ‘on-the-water’ Multiple 10x $31/unit $1,466m vessels Enterprise Value $2,382m Pro forma CFVO $127.5m In-the-money po
Slide 6: Update on Teekay's Fixed-rate Tanker Segment
TEEKAY SHIPPING Update on Teekay’s Fixed-rate Tanker Segment f 1q06 CFVO of $73.2 million, up 3% from one year ago f Shuttle tanker utilization remained high during seasonally strong winter period f Seasonal reduction in 2q and 3q CFVO expected to be greater than normal due to above average field ma
Slide 7: Developments in Teekay's LNG Segment
TEEKAY SHIPPING Developments in Teekay’s LNG Segment f CFVO of $16.6 million, unchanged from last quarter f Teekay LNG Partners (NYSE: TGP) annualized cash distributions increased by 12% to $1.85 per unit => Teekay share of annual distributions = $44 million f 9 newbuildings on-order, all progressin
Slide 8: Developments in Teekay's Spot Tanker Segment
TEEKAY SHIPPING Developments in Teekay’s Spot Tanker Segment f Teekay’s spot fleet benefited from strong spot market and also outperformed indices TCE / Day Teekay (as reported) Teekay (pure spot) Clarkson * Aframax $44,333 $45,078 $42,612 Suezmax $54,147 $64,493 $63,741 * Weighted Aframax average /
Slide 9: Suezmax Newbuilding Prices (US$ vs. KRW)
TEEKAY SHIPPING Suezmax Newbuilding Prices (US$ vs. KRW) Suezmax NB (USD) Suezmax NB (KRW) 80 90,000 80,000 70 Million Korean Won Million US$ 70,000 60 Placed orders RH Axis for 6 Suezmax NB’s during 60,000 dip in prices 50 50,000 LH Axis 40 40,000 1q00 3q00 1q01 3q01 1q02 3q02 1q03 3q03 1q04 3q04 1
Slide 10: Q1 2006 Tanker Market Factors
TEEKAY SHIPPING Q106 Tanker Market Factors f Global oil production rose to an all-time high f 1q06 oil demand up 0.7 mb/d (or 0.9%) year-on-year and 1.0 mb/d higher than 4q05 f Chinese crude imports up 25%; Japanese crude imports up 8% year-on-year f Crude and fuel oil movements from Atlantic basin
Slide 11: Aframax Tanker Rates Following Seasonal Pattern
TEEKAY SHIPPING Aframax Tanker Rates Following Seasonal Pattern 2004 2005 2006 ytd 100,000 55% of Teekay’s Q2’06 Aframax revenue days have been booked at ~$30,000 per day 75,000 US $ / Day 50,000 25,000 0 Q1 Q2 Q3 Q4 Source : CRS (Aframax average) 11 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay
Slide 12: Continued Balanced Outlook for 2006
TEEKAY SHIPPING Continued Balanced Outlook for 2006 Tanker Demand Growth (~ 4-5%): f Firm global economic growth outlook – IMF increased its 2006 estimate to 4.9% f IEA estimated oil demand growth of 1.8% vs. 1.3% in 2005 f OPEC continues to maintain high production volumes in light of ongoing geopo
Slide 13: Accelerating Oil Demand Growth in 2H06
TEEKAY SHIPPING Accelerating Oil Demand Growth in 2H06 Demand 5 4 Y-O-Y Oil Demand Growth Mb/d Q4’06E: 3 2.8% growth 2 1 0 -1 2q06E 3q06E 4q06E 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04 3q04 4q04 1q05 2q05 3q05 4q05 1q06 Source: IEA 13 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 14: Segment Operating Results
TEEKAY SHIPPING Segment Operating Results (in thousands of U.S. dollars) Three Months Ended Three Months Ended 31-Mar-06 31-Mar-05 (unaudited) (unaudited) Fixed-rate Fixed-rate Spot Total Fixed-rate Fixed-rate Spot Total Tanker LNG Tanker Tanker LNG Tanker Segment Segment Segment Segment Segment Seg
Slide 15: Summary Income Statement
TEEKAY SHIPPING Summary Income Statement Three months ended Mar. 31, 2006 Mar. 31, 2005 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 525,996 517,411 OPERATING EXPENSES General and administrative expenses (40,260) (33,698) Gain on sales of vessels 607 101,853 Restructu
Slide 16: Summary Balance Sheet
TEEKAY SHIPPING Summary Balance Sheet As at Mar. 31, As at Dec. 31, In 000s of USD 2006 2005 (unaudited) (unaudited) ASSETS Cash and cash equivalents 257,003 236,984 Other current assets 279,904 241,147 Total restricted cash 723,469 311,084 Other assets 440,314 360,034 Vessels and equipment 3,204,10
Slide 17: Summary of Share Transactions
TEEKAY SHIPPING Summary of Share Transactions Repurchased during period Then Remaining Time period $ value # of shares $ value Nov. 2004 to Dec. $555 million 13 million $229 million 6, 2005 Dec. 6, 2005 to $165 million 4.2 million $64 million Feb. 21, 2006 Feb. 21, 2006 to $27.5 million 0.7 million
Slide 18: Significant Operating Leverage
TEEKAY SHIPPING Significant Operating Leverage $1.75 $1.50 Q2 2006: Spot Rate increase EPS Increase $1,000 TCE/day ~ $0.055 / qtr $1.25 above $15,000 / day Quarterly Earnings Per Share $1.00 $0.75 $0.50 $0.25 $- $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Afram ax Rates ($ per da
Slide 19: Teekay Sum-of-Parts Valuation - Appendix
TEEKAY SHIPPING Teekay ‘Sum-of-Parts’ Valuation - Appendix Fixed-Rate Segment Teekay LNG Partners Spot Rate Segment Actual LTM CFVO 283.2 Market Cap. (35.7 million units @ $31/unit) 1,106.3 less: TGP Suezmax CFVO (45.0) net Teekay Fixed-rate CFVO 238.2 Pro-forma 2006 CFVO (TGP Guidance) 127.5 FMV of