Teekay Corporation Ltd. · NYSE:TK
Teekay — Teekay Shipping — Marine Money Conference 2003
22 slides from Teekay's conference presentation, Jun 18, 2003
Slide 1: Leading From Strength
Leading From Strength Marine Money Conference June 18, 2003 NYSE: TK www.teekay.com
Slide 2: Forward Looking Statements
Forward Looking Statements This document 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 tanker charter ra
Slide 3: Teekay Shipping Corporation
Teekay Shipping Corporation § The world’s leading marine oil transportation franchise, founded in 1973 § Global organization with 4,200 employees in 15 offices and onboard 150 vessels § Leading industry consolidator; more than tripled in size since 1998 § Growing cash generating power – approximatel
Slide 4: The Transformation of Teekay
The Transformation of Teekay 1998 2003 Regional Leader in World Leader in Mid-size Tankers Marine Oil Transportation n 45 ships n 150 ships carrying over 10% of the world’s sea borne oil trade Teekay Shipping Corporation 4
Slide 5: Actively Managing the Cycle
Actively Managing the Cycle $45,000 Acquired UNS L/T Contracts $40,000 Raised Flexible Financing Realized Aframax TCE $35,000 Reduced Debt ConocoPhillips L/T Contracts $30,000 $25,000 Acquired Navion $20,000 Issued Convertible Acquired Pref. Shares Bona Bought Back $15,000 Ordered Shares Ordered New
Slide 6: Acquisition of Navion
Acquisition of Navion Key Highlights: § Acquired Navion ASA for $800 million Offshore Loading § Adds significant earnings stability of approximately $1.00 EPS annually Conventional Tankers § Increased operating leverage by $0.13 per share § Broadened conventional tanker service offering § Right of f
Slide 7: Growing Earnings Power
Growing Earnings Power 12.00 2004: 11.00 Spot Rate Increase EPS Increase Growing $1,000 TCE/day $0.70/year operating 10.00 leverage 9.00 8.00 Increasing Earnings Per Share ($) earnings power 7.00 6.00 5.00 4.00 Declining net income 3.00 break-even TCE rate 2.00 1.00 - $10,000 $12,000 $14,000 $16,000
Slide 8: Unique Blend of Base Profitability and Operating Leverage
Unique Blend of Base Profitability and Operating Leverage Teekay has two complementary businesses: 1. Growing Profitable Long-term Fixed-rate Contract Business • Shuttle Tankers • ConocoPhillips • Australia 2. Leading Spot Tanker Franchise Teekay Shipping Corporation 8
Slide 9: The World Leader in Offshore Loading
The World Leader in Offshore Loading § Approximately half of Teekay’s capital is now invested in “floating pipelines” § Navion - the leading offshore loading logistics provider § UNS - the leading shuttle tanker owning entity § Significant long-term stable cash flow § High profitability Teekay Shipp
Slide 10: Predictable & Stable Earnings
Predictable & Stable Earnings EBITDA from Fixed-rate Long-term Contracts 300 280 260 240 220 200 ($) millions 180 160 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 Offshore Loading ConocoPhillips Australia n Levered IRR > 20% n Average contract length approximately 7 years Teekay Ship
Slide 11: Unique Blend of Base Profitability and Operating Leverage
Unique Blend of Base Profitability and Operating Leverage Teekay has two complementary businesses: 1. Growing Profitable Long-term Contract Business 2. Leading Spot Tanker Franchise • Aframax • Navion Shipping Teekay Shipping Corporation 11
Slide 12: Superior Cash Flow Generation from Spot Business
Superior Cash Flow Generation from Spot Business Fixed-Rate EBITDA Spot-based EBITDA 800 700 600 Spot –based ($) millions 500 EBITDA 400 300 200 Fixed-rate 100 EBITDA 0 Low-cycle Mid-cycle High-cycle ($13,000/day) ($18,000/day) ($27,500/day) Proforma 2004 EPS $1.00 $4.50 $11.15 Spot Rate Increase EB
Slide 13: Teekay is an Integrated Logistics Provider
Teekay is an Integrated Logistics Provider Managed Ships Logistics / Floating Storage Outsourcing and Offtake Long-term Fixed- Time rate time charter Chartered-in Tailored mix of Ships fixed-rate and Offshore Loading TEEKAY market related COA pricing Owned Ships Spot Charter Conventional Tankers Tra
Slide 14: Pre-eminent Market Position
Pre-eminent Market Position § Largest Spot Operator of Medium-Sized Tankers § 69 owned vessels* § 35 chartered-in vessels* § 7 commercially managed vessels § Uniform, Interchangeable Fleet § Unique Global Organization § Portfolio of strategic contracts with blue chip customer base High Capacity Util
Slide 15: Financial Strength is a Competitive Advantage
Financial Strength is a Competitive Advantage § Financial flexibility § Total liquidity of $690 million at March 31, 2003 § Highest credit rating in industry (S&P: BB+, Moody’s: Ba1) § Strong cash flow throughout the cycle § Largest equity market capitalization in the industry § Ability to raise cap
Slide 16: Profitable Throughout the Cycle
Profitable Throughout the Cycle $550 $13.00 Net Income Historical Earnings Per Share Historical $11.00 $450 Proforma 2004 Proforma 2004 $9.00 $350 Net Income ($millions) $7.00 $250 $5.00 $150 $3.00 $1.00 $50 -$1.00 Low Market ($13,000/day) Average Market ($19,000/day) High Market ($27,500/day) -$50
Slide 17: Recent EU Regulations
Recent EU Regulations § Regulations summarized: § the accelerated phase out of single-hull tankers between now and 2010; § Category 1 vessels trading life is reduced from 30 year to 23 years; § the requirement for heavy oils to be transported on double-hull tankers only; and § the imposition of a ri
Slide 18: Teekay Will Benefit
Teekay Will Benefit § Younger fleet; an average age of 9 years compared to 12 years for the world tanker fleet. § 15 single hull vessels with an average age of 13 years, able to trade to the latest possible date, 2010. § Fleet renewal program has 15 newbuildings scheduled for delivery over 2003-2005
Slide 19: Investment Highlights
Investment Highlights § The largest tanker company measured by market capitalization, enterprise value, and fleet size § An integrated logistics provider, not just an owner § Profitable throughout the cycle; large base of long-term fixed-rate business coupled with significant spot market upside § We
Slide 20: Appendix – EBITDA Reconciliation
Appendix – EBITDA Reconciliation § EBITDA represents net income (loss) before interest expense, income tax expense, depreciation and amortization expense, minority interest, foreign exchange gains (losses) and gains (losses) on disposition of assets. EBITDA is included because such data is used by c
Slide 21: Appendix – EBITDA Reconciliation
Appendix – EBITDA Reconciliation § EBITDA represents net income (loss) before interest expense, income tax expense, depreciation and amortization expense, minority interest, foreign exchange gains (losses) and gains (losses) on disposition of assets. EBITDA is included because such data is used by c
Slide 22: NYSE: TK
eo Shipping NYSE: TK www.teekay.com