Teekay Tankers Ltd. · NYSE:TNK
Teekay Tankers — Q2 2017 Earnings Presentation
20 slides from Teekay Tankers's earnings presentation, Aug 3, 2017
Slide 1: Teekay Tankers Q2-2017 Earnings Presentation
TEEKAY TANKERS Q2-2017 EARNINGS PRESENTATION August 3, 2017
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 timing a
Slide 3: Recent Highlights
Recent Highlights • Q2-17 Financial Results ○ Recorded adjusted net loss(1) of $7.1 million, or $0.04 per share, and generated free cash flow(1) of $18.7 million • Declared dividend of $0.03 per share for Q2-17, consistent with dividend policy • Corporate and Fleet Developments ○ Agreed to a share-f
Slide 4: Key Benefits of Merger with TIL
Key Benefits of Merger with TIL • Consistent with TNK’s strategy of increasing shareholder value by investing and operating throughout the tanker cycle • Establishes TNK’s market leading presence in key markets resulting in improved vessel utilization, triangulation opportunities and improved earnin
Slide 5: Financial Benefits of Proposed Merger
Financial Benefits of Proposed Merger • Immediately 10% accretive to Asset Values Currently Near Historic Lows earnings per share1 90.0 • Fixed exchange ratio represents a 80.0 modest 3.1% premium on fair market 70.0 value of TIL’s fleet, at historically low 60.0 values 50.0 • Strengthens balance sh
Slide 6: Tanker Rates At a Cyclical Low Point
Tanker Rates At a Cyclical Low Point High fleet growth and OPEC supply cuts weighing on rates 50 Q2 Crude Tanker Earnings 35 2017 YTD Earnings 45 Suezmax Aframax Suezmax Aframax 30 40 $42 ‘000 USD / day ‘000 USD / day 35 $38 25 30 20 $31 25 $25 15 20 $22 15 $19 $18 10 10 $14 $13 $14 $14 $13 $12 $10
Slide 7: Green Shoots for a 2H-2018 Recovery
Green Shoots for a 2H-2018 Recovery Lower fleet growth and growing oil supply are the catalysts for a recovery Scrapping is on the rise OPEC cut compliance is slipping 1.4 110% Highest scrapping 1.2 since Nov’13 100% 1.0 101% 99% 90% 95% MB/D 0.8 93% 89% 0.6 80% 0.4 78% 70% 0.2 0.0 60% Source: Clark
Slide 8: Q3-17 Spot Earnings Update
Q3-17 Spot Earnings Update $20,000 $16,600 $14,500 $14,200 $12,500 $12,300 $10,000 $9,300 $- 1 2 Suezmax Aframax RSA and FSL LR2 Q2-17 Actual Q3-17 to-date Suezmax Aframax LR2 Q3-17 spot ship 1,377 849 430 days available Q3-17 % booked 47% 42% 28% to-date (1) Combined average spot TCE rate including
Slide 9: Near-Term Priorities for TNK Post-merger
Near-Term Priorities for TNK Post-merger • Focus on further strengthening of financial position by reducing financial leverage and increasing liquidity • Position fleet for market recovery through active management of charter portfolio • Modernize fleet through sale of older vessels • Leverage recen
Slide 10: Appendix
APPENDIX 10
Slide 11: Fleet Employment – In-Charters
Fleet Employment – In-Charters 350 300 Ship Days 250 200 150 100 50 - Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Aframax/LR2 Days 259 116 90 91 92 92 90 91 92 92 91 91 92 Aframax/LR2 Rates 19,591 21,551 22,750 22,750 22,750 22,750 22,750 2
Slide 12: Fleet Employment – Out-Charters
Fleet Employment – Out-Charters1 (2) (2) (3) (1) Excludes expected drydock/ offhire days noted on slide 16 (2) The Company’s ownership interest in this vessel is 50%. 50/50 profit share if earnings are above $40,500 per day 12 (3) Excludes full service lightering
Slide 13: Q3-17 Outlook
Q3-17 Outlook Income Statement Item Q3-17 Outlook (expected changes from Q2-17) Decrease of approximately 220 net revenue days in TNK, mainly due to the redeliveries of four in-charters at various times in Q3-17 and Q2-17. Revenues Refer to Slide 8 for Q3-17 to-date spot tanker rates. Approximately
Slide 14: Consolidated Adjusted Line Items
Consolidated Adjusted Line Items Q2-17 (in thousands of U.S. dollars) Income Statement Item As Reported Appendix A Reclassification As Items (1) for Realized Adjusted Gain/ Loss on Derivatives Revenues 108,789 - 441 109,230 General and administrative expenses (8,365) 700 - (7,665) Loss on sale of ve
Slide 15: The Acquisition of 50 percent of Teekay Tanker Operations Ltd. (TTOL)
The Acquisition of 50 percent of Teekay Tanker Operations Ltd. (TTOL) Up to May 31, 2017, Teekay Tankers owned 50 percent of its tanker operations business (or TTOL), and included 50 percent of the net profit from this business in equity income in its income statement. On May 31, 2017, Teekay Tanker
Slide 16: Combined Income Statement
Combined Income Statement For the three months ended March 31, 2017 Recast TNK TTOL TNK (Without TTOL) (on a 100% basis) (As reported)(2) (in thousands, except share and per share amounts) Q1-17 Q1-17 Q1-17 REVENUES Net pool revenues 45,452 1,737 47,189 Time-charter revenues 30,330 - 30,330 Voyage c
Slide 17: Combined Income Statement
Combined Income Statement For the three months ended June 30, 2017 Recast TNK TTOL TTOL TTOL TNK (Without TTOL) April / May June (on a 100% basis) (As reported) (in thousands, except share and per share amounts) Q2-17 Q2-17 REVENUES Net pool revenues 31,736 921 443 1,364 33,100 Time-charter revenues
Slide 18: Drydock & Offhire Schedule
Drydock & Offhire Schedule Teekay Tankers March 31, 2017 (A) June 30, 2017 (A) September 30, 2017 (E) December 31, 2017 (E) Total 2017 Total Total Total Total Total Vessels Off-hire Vessels Off-hire Vessels Off-hire Vessels Off-hire Vessels Off-hire Segment Days Days Days Days Days Spot Tanker 1 29
Slide 19: Additional Information about the Merger and Where to Find It
Additional Information about the Merger and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the propose
Slide 20: Bringing Energy to the World
BRINGING ENERGY TO THE WORLD