Slide 1: Teekay's Third Quarter 2004 Earnings Presentation
Teekay ’s Teekay’s Third Quarter 2004 Earnings Presentation Oct. 21, 2004 NYSE: TK 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’s
Slide 3: 3rd Quarter Highlights
3rd Quarter Highlights Achieved highest ever quarterly net income of $245.3 million, or $2.77 per share Realized $143.6 million gain on sale of vessels and investment in Torm Increased dividend for second consecutive year – 28% cumulative increase over last two years Tapias integration progr
Slide 4: Continued Strong Global Oil Demand Growth
Continued Strong Global Oil Demand Growth 86 2005E 84 2004E 2003 82 Million B/D 2004: Highest Growth 2002 80 Rate Since 1978 2001 78 76 74 1st quarter 2nd quarter 3rd quarter 4th quarter Source : IEA Teekay Shipping Corporation 4
Slide 5: Growing Oil Production Supported by Increased Demand
Growing Oil Production Supported by Increased Demand World Oil Demand World Oil Supply OECD Industry Stocks 88 1,800 86 OECD Industry Stocks - Million B/D 84 1,600 Oil Demand - Million B/D 82 1,400 80 78 1,200 76 74 1,000 72 70 800 68 66 600 1q99 3q99 1q00 3q00 1q01 3q01 1q02 3q02 1q03 3q03 1q04 3q0
Slide 6: Conservative Bias in Demand Estimates?
Conservative Bias in Demand Estimates? 04 IEA Oil Demand Forecast 04 IMF GDP Forecast 05 IEA Oil Demand Forecast 05 IMF GDP Forecast 6.0% 6.0% 5.0% 5.0% Latest 4.0% 4.0% Gap: 1.6% 3.0% 3.0% Gap of Gap of 2.5% 2.8% 2.0% 2.0% 1.0% 1.0% 0.0% 0.0% Nov.'03 Nov.'04 Nov.'05 Jul.'03 Jan.'04 Jul.'04 May'05 S
Slide 7: Long-haul Middle East Oil Gaining Market Share
Long-haul Middle East Oil Gaining Market Share… Middle East Rest of World 28 58 Rest of World Prodn. (Million B/D) 3% Growth Middle East Prodn. (Million B/D) 26 56 24 54 10% Growth LH axis 22 52 RH axis 20 Most tonne-mile 50 intensive source of oil 18 48 1q99 3q99 1q00 3q00 1q01 3q01 1q02 3q02 1q03
Slide 8: And Middle East Oil Creates Significant Tonne Mile Demand
…And Middle East Oil Creates Significant Tonne Mile Demand Estimated percentage increase in global tanker demand resulting from a 1% increase in global oil supply, if the entire increase originated from : FSU Source : Platou / IEA Non OPEC Middle East 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Percentage ch
Slide 9: Tanker Supply
Tanker Supply Deliveries Deletions On Order Net Change 40 30 M illion D eadw eight 20 10 0 -10 Remaining mandatory -20 scrapping of ~19 mdwt -30 2007 + 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: CRS Teekay Shipping Corporation 9
Slide 10: Market to Remain Largely Balanced Through 2006
Market to Remain Largely Balanced Through 2006…… 2005 2006 (mdwt) (mdwt) Newbuilding Deliveries 32 23 less: Mandatory scrapping * (19) (1) Net fleet growth 13 22 Tanker demand growth (1) (11) (12) Change in supply / demand balance 2 10 (1) Assumptions 2005 2006 Oil demand growth (p.a.) 1.8% 2% Tanke
Slide 11: But Tight Fundamentals Through 2010
……But Tight Fundamentals Through 2010 Total during 2005 2006 2007 - 2010 (mdwt) (mdwt) (mdwt) Required newbuilding Newbuilding Deliveries 32 23 133 deliveries to meet fleet replacement less: Mandatory scrapping * (19) (1) (78) and demand growth Net fleet growth 13 22 55 25 mdwt 2007 (est.) 36 mdwt 2
Slide 12: Tanker Deliveries by Shipyard Location
Aggregate Tanker Output Declining 36 Tanker Deliveries by Shipyard Location 30.9 31.6 30 28 24 23.2 Million Deadweight 22.8 18 12 6 Korea Japan China Others 0 2003 2004 2005 2006 2007 Source : CRS Shipyard Capacity Allocation by Ship Type Shift in 2003 2007 Tanker 37% 28% Shipyard Container 20% 32%
Slide 13: OPEC Production vs. Aframax TCE
OPEC Production vs. Aframax TCE 30 90,000 OPEC Production Aframax TCE 80,000 29 higher highs 70,000 Production (Million B/D) 28 TCE (US$ per Day) 60,000 27 50,000 26 40,000 30,000 25 20,000 higher lows 24 10,000 23 0 Apr-02 Aug-02 Apr-03 Aug-03 Apr-04 Aug-04 Feb-02 Jun-02 Dec-02 Feb-03 Jun-03 Dec-03
Slide 14: Developments in Spot Tanker Segment
Developments in Spot Tanker Segment Q3 average Aframax TCE of $31,100 per calendar-ship-day, up from $27,600 in Q2 9 owned and 2 in-chartered newbuildings on order in spot segment Profitable fleet renewal through well-timed arbitrage; example: In Q3, took delivery of Aframax newbuilding at c
Slide 15: Renewing the Fleet While Maintaining Operating Leverage
Renewing the Fleet While Maintaining Operating Leverage Spot Tankers: # of ships * 1q04 2q04 3q04 4q04 ** 2005 ** 2006+ ** Additions 5 6 6 2 5 6 Deletions 8 3 9 3 Net Change -3 3 -3 -1 * Owned and in-chartered **Transactions concluded as of October 20, 2004 Teekay Shipping Corporation 15
Slide 16: Highly Profitable In-charter Strategy
Highly Profitable In-charter Strategy A B C D=C-B Cflow=D*365*A Avg. Optional Avg. break- Rates No. of Ship Profit / Annualized Cash Remaining Ship even rates / achieved / ships Years day flow in years * Years day (LTM) day (LTM) VLCC 2 1.8 3.6 2 $ 38,000 $ 61,100 $ 23,100 $ 16,863,000 Suezmax 4 1.9
Slide 17: Developments in Fixed-rate Segments
Developments in Fixed-rate Segments Awarded 5-year shuttle tanker contract for new North Sea oil field, “Alvheim” Took delivery of third LNG newbuilding which commenced 25-year charter Delivered another shuttle tanker on minimum 13-year charter to Petrobras Record quarterly cash-flow from ve
Slide 18: Segment Operating Results
Segment Operating Results Three Months Ended Three Months Ended 30-Sep-04 30-Sep-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 237,843 159,03
Slide 19: Summary Income Statement
Summary Income Statement Three months ended Sept. 30, 2004 Sept. 30, 2003 000s of USD (except per share data) (unaudited) (unaudited) Voyage Revenues 520,612 380,544 General and administrative expenses (29,050) (23,461) Other Operating Expenses (296,853) (313,307) Income from vessel operations 194,7
Slide 20: Summary Balance Sheet
Summary Balance Sheet As at Sept. 30, 2004 As at June 30, 2004 (unaudited) (unaudited) ASSETS Cash and cash equivalents 308,034 215,743 Other current assets 205,626 242,557 Total Restricted cash 413,706 395,459 Marketable Securities - 139,654 Total vessels and equipment 3,540,936 3,505,633 Other ass
Slide 21: Significant Operating Leverage
Significant Operating Leverage $6.00 $5.50 $5.00 2004: $4.50 Spot Rate increase Quarterly Earnings Per Share $1,000 TCE/day EPS Increase $4.00 above $14,500 / day ~ $0.08 - $0.09 / qtr $3.50 $3.00 $2.50 43% of 4th Qtr. booked at avg. $2.00 TCE of $44,000 per day $1.50 Actual Q3 2004 EPS * However, p
Slide 22: Teekay Shipping Corporation
Teekay Shipping Corporation 22