Slide 1: Teekay's Fourth Quarter and Fiscal 2005 Earnings Presentation
TEEKAY SHIPPING Teekay Teekay’s’s Fourth Quarter and Fiscal 2005 Earnings Presentation February 23rd, 2006 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 2: Forward Looking Statements
TEEKAY SHIPPING 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 regardi
Slide 3: Fourth Quarter Highlights
TEEKAY SHIPPING Fourth Quarter Highlights f 4q05 net income of $144.6 million, or $1.85 per share f Seasonally strong fourth quarter spot Aframax rates – $48,021 per day f Strong rates have continued into 1q06 f Awarded three long-term contracts for three shuttle tankers in Brazil f Formed strategic
Slide 4: 2005 Highlights
TEEKAY SHIPPING 2005 Highlights f Second highest ever annual net income of $571 million, or $6.83 per share f Generated cash flow from vessel operations of ~$700 million f Completed transformation of spot fleet f Now 100% double-hull f Reduced average age of owned fleet from 8 to 6 years f Doubled s
Slide 5: Developments in Teekay's Fixed-rate Tanker Segment
TEEKAY SHIPPING Developments in Teekay’s Fixed-rate Tanker Segment f 4q05 CFVO of $75.8 million, unchanged from same period one year ago f Shuttle tanker utilization returned to normal after lower third quarter f Teekay’s Marine Midstream business platform is benefiting from increased offshore proje
Slide 6: Teekay Petrojarl Offshore J/V: Moving up the Value Chain
TEEKAY SHIPPING Teekay Petrojarl Offshore J/V : Moving up the Value Chain Goal: to become a leading worldwide supplier of FPSOs f Complimentary skills create a strong platform to pursue the growing market for FPSOs: f PGS brings offshore engineering expertise and proven record as quality FPSO operat
Slide 7: What is an FPSO?
TEEKAY SHIPPING What is an FPSO? PGS FPSO “Petrojarl Foinaven” presently operating west of the Shetland Islands An FPSO is a vessel deployed to produce, process, store and offload hydrocarbons from offshore fields. The FPSO may be connected to wells on the seafloor through risers or to a platform. F
Slide 8: Building on Our Existing Relationship with PGS
TEEKAY SHIPPING Building on Our Existing Relationship with PGS f Teekay currently has three shuttle tankers and one FSO on long-term charter with PGS in the North Sea f Opportunities to bundle FPSO, FSO and Shuttle tankers into complete customer solutions 8 TEEKAY – THE MARINE MIDSTREAM COMPANY® www
Slide 9: Developments in Teekay's LNG Segment
TEEKAY SHIPPING Developments in Teekay’s LNG Segment f CFVO at $18 million unchanged from the prior quarter f Teekay received approximately $10 million in distributions from Teekay LNG during the fourth quarter, expected to increase by ~27% by mid-2007 RasGas II f Teekay LNG Partners Newbuildings su
Slide 10: Developments in Teekay's Spot Tanker Segment: Crude Oil Fleet
TEEKAY SHIPPING Developments in Teekay’s Spot Tanker Segment Crude Oil Fleet: f 4q05 Aframax earnings $48,021 / day – second highest quarter on record f 4q05 Suezmax pure-spot earnings $54,099 / day * f Strong market has continued into 1q06 f 75% of spot revenue days booked at $47,000 per day f Flee
Slide 11: Developments in Teekay's Spot Tanker Segment: Product Tanker Fleet
TEEKAY SHIPPING Developments in Teekay’s Spot Tanker Segment Product Tanker Fleet: f Spot vessels benefited from strong rise in market f 4q05 LR / MR fleet averaged $31,758 f Continuing to grow exposure to product market - two additional MR product tankers in-chartered in 4q05 f Small product tanker
Slide 12: What drove tanker rates in Q4'05
TEEKAY SHIPPING What drove tanker rates in Q4’05 f Fourth quarter oil demand flat from one year ago f Seasonal factors led to a 1.3 mb/d rise in oil demand over 3q05 f Tanker demand remained high as OPEC maintained high production volumes; non OPEC production rose by 0.3 mb/d f Increasing customer d
Slide 13: Aframax Tanker Rates
TEEKAY SHIPPING Aframax Tanker Rates 2004 2005 2006 ytd 100,000 Q106: Spot TCE’s above year ago levels 75,000 US $ / Day 50,000 25,000 0 Q1 Q2 Q3 Q4 Source : CRS (Aframax average) 13 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 14: 2006 – Tanker Demand Factors
TEEKAY SHIPPING 2006 – Tanker Demand Factors World Oil Dem and (Yr on Yr Grow th) f Firm global economic 3.0% Hurricanes Katrina /Rita growth – IMF 2.0% forecasting 4.3% % Change 1.0% f IEA oil demand growth 2.3% growth 0.0% estimate of 2.1% vs. 1.3% in 2005 -1.0% Aug'05 Sept'05 Oct'05 Nov'05 Dec.'0
Slide 15: Tanker Deliveries – Slowdown in Crude Tanker Deliveries in 2006
TEEKAY SHIPPING Tanker Deliveries – Slowdown in Crude Tanker Deliveries in 2006 Crude tanker deliveries as % of crude fleet 25 9.7% One–third lower than average of 7.8% last four years 8.3% 20 7.4% 5.6% 15 Mdwt 22.9 10 19.3 20.3 18.2 15.1 5 0 2002 2003 2004 2005 2006E Source : CRS 15 TEEKAY – THE MA
Slide 16: Finely Balanced Supply / Demand Outlook for 2006
TEEKAY SHIPPING Finely Balanced Supply / Demand Outlook for 2006 Tanker Supply Tanker Demand (Mdwt) 2003 2004 2005 2006E 2003 2004 2005 2006E Deliveries 29 26.2 27.7 26 Oil Demand Growth (A) 2% 3.8% 1.3% 2.1% Deletions (Mdwt)* 21.6 10.7 4.8 ~8 Tanker Demand Growth (Mdwt) 15.4 16 8.8 12.6 - 15.7 Net
Slide 17: Segment Operating Results
TEEKAY SHIPPING Segment Operating Results (in thousands of U.S. dollars) Three Months Ended Three Months Ended 31-Dec-05 31-Dec-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 Seg
Slide 18: Summary Income Statement
TEEKAY SHIPPING Summary Income Statement Three months ended Dec. 31, 2005 Dec. 31, 2004 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 531,473 669,553 OPERATING EXPENSES General and administrative expenses (45,375) (48,251) Gain on sales of vessels, net of writedowns 14
Slide 19: Summary Balance Sheet
TEEKAY SHIPPING Summary Balance Sheet As at Dec. 31, As at Sept. 30, In 000s of USD 2005 2005 (unaudited) (unaudited) ASSETS Cash and cash equivalents 236,984 252,851 Other current assets 241,147 205,387 Total restricted cash 311,084 398,009 Other assets 360,034 312,760 Vessels and equipment 3,248,1
Slide 20: 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 $64 million 1.6 million * $0
Slide 21: 'Rule-of-thumb' Guidance Discussion
TEEKAY SHIPPING ‘Rule-of-thumb’ Guidance Discussion Clarkson trade routes used Aframax Gulf - East Aframax Carib-US Gulf Revenue weighting 50% 50% Lag (based on avg. distance of voyage) 3 week lag 2 week lag Q4, 2005 Clarkson TCE/day 51,007 45,503 Blended Clarkson rate 48,255 Utilization factor * 90
Slide 22: Quarterly Earnings Per Share: Significant Operating Leverage
TEEKAY SHIPPING Significant Operating Leverage $4.50 $4.00 Q1 2006: Spot Rate increase EPS Increase $1,000 TCE/day ~ $0.06 / qtr $3.50 above $15,000 / day $3.00 Quarterly Earnings Per Share $2.50 $2.00 4q05 Guidance = $1.70 $1.50 $1.00 $0.50 $- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 00 00 00 00 00 00 00