Teekay Corporation Ltd. · NYSE:TK
Teekay — Non-Deal Roadshow (September 2013)
57 slides from Teekay's roadshow presentation, September 2013
Slide 1: Teekay Corporation
// Teekay Corporation September 2013 TEEKAY CORPORATION
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 estimate
Slide 3: Teekay Group Corporate Structure
Teekay Group Corporate Structure GP TEEKAY CORP. (“Teekay Parent”) NYSE: TK Project Market Cap: $2.9b Developer Asset manager and project developer General Partner / controlling shareholder of daughter companies Fleet size: 4 owned conventional tankers and 5 FPSO units Current Yield: 3% 25%
Slide 4: Diversified Business Model
Diversified Business Model • A world leader in marine logistical solutions to the global oil and gas industry • Celebrating our 40th Anniversary this year • $11 billion of consolidated assets, over 170 vessels • Over $15 billion of consolidated forward fee-based revenues • „One-stop shop‟ for custom
Slide 5: World Becoming More Reliant On Offshore Oil
World Becoming More Reliant On Offshore Oil • Decrease in total global and North Sea offshore oil production • Continued increase in deepwater well supply • Historic high rates of deepwater drilling will lead to FPSO and shuttle demand in future years • Trend towards deeper water suits FPSO and shut
Slide 6: LNG Shipping In The “Golden Age of Gas”
LNG Shipping In The “Golden Age of Gas” • LNG supply expected to grow by 4.5% p.a. to 2030, more than twice as fast as underlying global gas production (2.1% p.a.) • Demand growth driven by the power generation sector with gas displacing coal • Non-OECD, led by China, accounts for the majority of de
Slide 7: Teekay is in Every Part of its Customers’ Value Chain
Teekay is in Every Part of its Customers‟ Value Chain 6 Floating Storage Units (FSOs) 36 Shuttle Tankers Offshore Platform Storage Tanks 10 Floating Production Units (FPSOs) 48 Crude Tankers1 Refinery Ship to Ship Lightering Storage Tanks Exports 11 Product Carriers LNG Liquefaction LNG 63 Liquefied
Slide 8: Teekay is a Leader in Each of its Business Segments
Teekay is a Leader in Each of its Business Segments Leading Position in Leased FPSOs Largest Operator of Shuttle Tankers 15 14 In Service On Order 36 In Service On Order 3 11 2 10 26 2 1 4 14 6 5 34 12 9 9 9 2 22 5 4 4 5 7 2 5 2 2 SBM BW MODEC Teekay Bumi Bluewater Teekay Knutsen Transpetro Viken /
Slide 9: Growing Consolidated Fixed-Rate Cash Flows in Offshore and Gas Businesses
Growing Consolidated Fixed-Rate Cash Flows in Offshore and Gas Businesses • Investment in offshore and gas assets over the past few years has contributed to stronger fixed-rate cash flows (2009 – 2012 CAGR: 21%) • Increased cash flows in 2012 from the Sevan FPSO and Maersk LNG JV acquisitions and ou
Slide 10: Significant Forward Coverage
Significant Forward Coverage • Teekay Corporation has total forward fixed-rate revenues of $15.7 billion, with a weighted average fixed-term contract life of over 7.9 years Total Forward Fixed-Rate Revenues of $15.7 Billion* Segment # of Vessels Average Contract Forward Fixed-Rate in Fleet1 Duration
Slide 11: Corporate Structure Provides Financial Flexibility
Corporate Structure Provides Financial Flexibility TEEKAY CORPORATION (PARENT) Sale of Proceeds GP and LP Existing from Asset Distributions / Assets Sales Dividends New Proceeds from Equity Projects Issuance TEEKAY TEEKAY TEEKAY Investment LNG OFFSHORE TANKERS Daughter Shareholders Distributions / D
Slide 12: Dropdown of Assets Deleveraging Teekay Parent
Dropdown of Assets Deleveraging Teekay Parent Teekay Parent Net Debt $1,400 Includes: $1,343 $1,352 • $585m newbuilding $1,200 advances for Petrojarl Knarr FPSO project in billions $1,018 • Remaining debt relates $1,000 to warehoused FPSOs and four conventional $800 tankers $600 December 31, 2012 Ma
Slide 13: Capital Markets Are Consistently Open to Teekay
Capital Markets Are Consistently Open to Teekay Third Party Equity • $3.4 billion of daughter company third party equity raised since 2005 $800 Recent Transactions: $600 $ Millions TGP: ~$180m Sep 2012 $400 TOO: ~$210m Sep 2012 TOO: ~$60m Apr 2013 $200 TOO: ~$150m Apr 2013 $0 TGP: ~$40m July 2013 20
Slide 14: Teekay Corporation’s Strategy Is Based on Three Core Pillars
Teekay Corporation‟s Strategy Is Based on Three Core Pillars • Increase the value • Organically develop • Operate with high of daughter new projects and HSEQ standards companies and commercialize new the value of two business areas • Greater focus on GP interests costs and • Accretive profitability
Slide 15: Daughter Organic Growth and Acquisitions Benefiting Teekay Parent
Daughter Organic Growth and Acquisitions Benefiting Teekay Parent TOO & TGP Cash Distributions to Teekay Parent $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 2008 2009 2010 2011 2012 2013E* Common Unit Distributions GP Distributions • More growth to come in both the offshore and gas businesses through
Slide 16: Illustrative Growth in GP Value
Illustrative Growth in GP Value Illustrative Assumptions: TGP TOO 2013 2014 2015 2013 - 2015 Annual Distribution Growth Rate per LP Unit 0% 2% 4% 5% p.a. LP Unit Growth per Annum 0% 5% 10% 12% p.a. Illustrative GP Valuation (Assuming 25.3x Publicly Traded GP Cash Flow Multiple) $2,500 $30.74/Teekay
Slide 17: Continued Focus on Project Execution
Continued Focus on Project Execution 2013 2014 2015 2016 2017 Q3 Q4 1H 2H Petrojarl Banff Re-start FPSO Petrojarl Knarr Petrojarl I Redeployment (TBD) 2 BG Shuttle Tankers Remora HiLoad DP Unit SHUTTLE & FSO Salamander FSO Project Gina Krog FSO Project Awilco LNG carrier (Purchase-leaseback) GAS 10
Slide 18: Teekay’s Partnering Model
Teekay‟s Partnering Model • Partners contribute but are also in need of one or more of Teekay‟s capabilities PARTNERS Capabilities Project Contribution Management Examples Attractive Assets Capital Intellectual Property + Engineering Corporate Governance Financial Expertise Business CUSTOMERS / PROJ
Slide 19: Daughter Companies Now Undertaking Projects and Acquisitions Directly
Daughter Companies Now Undertaking Projects and Acquisitions Directly Aggregate Teekay Daughter Market Capitalization $7,000 $6,000 TNK $5,000 $4,000 TOO $ Millions $3,000 $2,000 TNK TOO TGP $1,000 TGP $0 December 31, 2007 September 11, 2013 Aggregate Daughter Aggregate Daughter Financial Liquidity
Slide 20: Operational Leadership
Operational Leadership • Teekay‟s high operating and HSEQ standards remain key to winning and maintaining business with our customers – essence of the Teekay Brand HSEQ KPIs (Per Million Man Hours) 4.0 1.0 Total Recordable Case Frequency (TRCF) 0.9 Loss Time Injury Frequency (LTIF) 0.8 3.0 TRCF 0.7
Slide 21: Teekay Parent Sum-of-Parts
Teekay Parent Sum-of-Parts ($ millions, except per share amounts) Teekay Parent Assets Conventional Tankers 1 $152 FPSOs 1 540 Newbuilding 2 585 JVs and Other Investments 71 FMV of Teekay Parent Assets $1,348 Teekay Parent Pro Forma Net Debt $(1,018) GP Ticker P/DCF % DCF to multiple GP Equity Value
Slide 22: Teekay Offshore Partners
Teekay Offshore Partners TEEKAY OFFSHORE
Slide 23: 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 expected
Slide 24: Investment Highlights
Investment Highlights • Diversified portfolio of fee-based contracts with major oil Stable companies Operating • $5.1 billion of forward fee-based revenues (weighted avg. Model contract duration of over 5 years, excluding extension options) • A market leader in harsh weather FPSO operations Leading
Slide 25: Teekay Offshore at a Glance
Teekay Offshore at a Glance • Provider of offshore oil solutions, including floating production, storage and transportation services under long-term, fee-based contracts to primarily investment grade customers • Contracts not linked to, or exposed to commodity prices • Common units listed on the NYS
Slide 26: Market Leader in Core Segments
Market Leader in Core Segments Control Approximately Number of Shuttle Tankers 36 2 26 45% of the World‟s 4 Shuttle Tanker Fleet* 34 9 22 5 4 7 2 2 2 Teekay Knutsen Transpetro Viken / AET Offshore NYK PJMR Existing Newbuildings on Order 15 Leading Position in 14 Teekay Offshore 3 11 Leased FPSOs 10
Slide 27: Teekay Offshore – Linking Rig to Refinery
Teekay Offshore – Linking Rig to Refinery Leading indicators for Teekay Teekay Offshore‟s role in Offshore‟s business the offshore oil value chain Oil Production Oil Storage Floating Pipelines FPSOs FSOs Shuttle Tankers 5 FPSOs capable 6 FSOs with oil 36 shuttle tankers1 of producing storage c
Slide 28: Expertise in Deepwater and Harsh Environments
Expertise in Deepwater and Harsh Environments North Sea • 17 shuttle tankers owned, 4 in-chartered • 2 FPSOs + 5 owned by Sponsor Brazil • 15 shuttle tankers owned • 2 FPSOs + 50% interest in 1 FPSO unit TEEKAY OFFSHORE 28
Slide 29: Attractive Portfolio of Fee-based Contracts
Attractive Portfolio of Fee-based Contracts • Substantial portfolio of long-term, fee-based contracts with high quality oil and gas companies – Total forward fee-based revenues of $5.1 billion – Weighted average remaining contract life of over 5.0 years Shuttle Tankers FPSO Units FSO Units Conventio
Slide 30: Recent Developments
Recent Developments Completed the Voyageur Spirit FPSO acquisition for $540m FPSOs Completed acquisition of a 50% interest in the Cidade de Itajai FPSO for $204m Took delivery of the Samba Spirit and Lambada Spirit shuttle tankers in Shuttle May and Jun 2013, respectively Tankers Remaining 2 BG shut
Slide 31: Gina Krog FSO Project with Statoil
Gina Krog FSO Project with Statoil • TOO will supply an FSO unit to Statoil ASA Gina Krog Field in the Norwegian sector of the North Sea on a 3 year fee-based contract, plus 12 x one-year extension options o Est. conversion $220m using 1995-built Randgrid shuttle tanker o Expect annual avg. CFVO*: ~
Slide 32: Salamander FSO Project
Salamander FSO Project • TOO will supply an FSO to Salamander Energy (LSE: SMDR) for their Bualuang Field in the Gulf of Thailand on a 10 year fee-based contract, plus options to extend an additional 5 years o Estimated fully-built-up cost of $50 million (1993-built Navion Clipper shuttle tanker) o
Slide 33: Remora HiLoad DP unit
Remora HiLoad DP unit • TOO acquired a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS for approximately $55m (incl. $17m of capital upgrades) • Expected to commence 10-year contract with Petrobras in Brazil in early-2014 • Strategic Benefits of the HiLoad unit: o Broadens TOO‟s offsh
Slide 34: North Sea Market - Resurgent Activity
North Sea Market - Resurgent Activity Norwegian Exploration Wells Drilled* • Resurgence in North Sea Record high level drilling activity yielding results of exploration – 1.7 - 3.3 billion barrel Johan Sverdrup find was biggest of 2011 • New finds in deep water and located far from shore and pipelin
Slide 35: Brazil Market – More Growth to Come
Brazil Market – More Growth to Come Brazil Offshore Production Fleet Development 140 120 100 Installed On Order Planned 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: International Maritime Associates • Brazilian offshore production fleet predicted to dou
Slide 36: Strong Future Demand For FPSOs
Strong Future Demand For FPSOs FPSOs in the Planning Stage FPSO Forecast (Next 5 Years) 30 28 Source: IMA Source: IMA 24 End-06 68 25 20 20 15 End-08 96 15 10 10 5 Apr-12 141 0 Avg. Avg. Orders Orders Low Low Base Base High High Orders Jan-Apr Case Case Case 0 50 100 150 Orders per year Jan-Apr 2012
Slide 37: Increased Demand for FSO Solutions
Increased Demand for FSO Solutions • The offshore market has seen a recent resurgence in FSO activity: o Re-emergence of FSO demand in the North Sea o New development in S.E. Asia • 22 projects currently considering the use of an FSO o 11 in Asia; 4 in North Sea Planned FSO Projects Top Leased FSO O
Slide 38: Visible Existing and Potential Growth Opportunities for TOO
Visible Existing and Potential Growth Opportunities for TOO NEAR-TERM MEDIUM-TERM LONGER-TERM Directly Ordered by TOO Directly acquired by TOO Direct by TOO Direct by TOO HiLoad DP Unit FSO FSO 2 NB Shuttle Tankers (Petrobras) (Salamander Energy) (Gina Krog - Statoil) (BG) Teekay Corporation Teekay
Slide 39: Track Record of Distribution Growth
Track Record of Distribution Growth $2.10 Remora HiLoad DP Unit Shuttle Tankers (4 Vessels) Shuttle Cidade Tankers de Itajai (4 Vessels) FPSO (Acquired 50%) Cidade de Itajai FPSO (received Voyageur Spirit offerFPSO to acquire $2.00 $2.05 50% in Q2’13) Sevan Piranema FPSO Additional 49% $1.90 of OPCO
Slide 40: Teekay LNG Partners
Teekay LNG Partners TEEKAY LNG
Slide 41: 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: future growt
Slide 42: Teekay LNG Partners Highlights
Teekay LNG Partners Highlights One of the World‟s Largest • Top 2 independent owner and operator of LNG LNG Carrier carriers Owners • 100% of existing LNG fleet operating under fixed-rate Stable contracts (weighted avg. contract duration of ~13 years) Operating primarily to major oil and gas compani
Slide 43: Teekay LNG at a Glance
Teekay LNG at a Glance • Provider of LNG, LPG and crude oil marine transportation primarily under long-term, fee-based contracts • Contracts not linked to, or exposed to commodity prices • Common units listed on the NYSE (TGP) with a market cap. of $3.0bn* • Structured as a Master Limited Partnershi
Slide 44: Major Independent LNG Operator
Major Independent LNG Operator • Teekay LNG has grown to become the second largest independent operator of LNG carriers In Service On Order 35 32 29 7 5 2 22 20 16 15 2 28 27 27 16 11 3 14 12 6 9 MOL Teekay NYK Maran Golar BW Gas K Line LNG Gas Note: Excludes state & oil company fleets. TEEKAY LNG 4
Slide 45: Stable Long-Term Cash Flows
Stable Long-Term Cash Flows • Attractive fee-based contracts, “locking-in” cash flows: – 10 - 25 years initial length for LNG carriers – High credit quality customers – Cost escalation provisions • Long average remaining contract life: – LNGs: 13 years – LPGs: 7 years* – Tankers: 6 years • Liabiliti
Slide 46: Long-Term Contract Portfolio With Blue-Chip Customer Base
Long-Term Contract Portfolio With Blue-Chip Customer Base • Substantial portfolio of long-term fee-based contracts with high quality oil and gas companies LNG LPG Conventional Carriers Carriers Tankers # of units 32 31* 11 Average remaining 13 years 7 years** 6 years Contract Life Forward $5.9 billi
Slide 47: Summary of Recent Developments
Summary of Recent Developments • Entered into an accretive purchase-leaseback transaction with Awilco LNG for up to two 155,900 cbm LNG carrier newbuildings • Announced several new LNG and LPG projects that will contribute to TGP‟s near and long-term growth • In June, TGP signed 5-year fee-based con
Slide 48: LNG Carrier Purchase – Leaseback
LNG Carrier Purchase – Leaseback • In August, TGP agreed to acquire an LNG carrier newbuilding, with a fixed- rate bareboat charter back to Awilco LNG (Awilco); – Awilco has an option to sell and bareboat charter back an identical second LNG carrier newbuilding, under similar terms, exercisable late
Slide 49: More LNG/LPG Newbuilding Orders Placed
More LNG/LPG Newbuilding Orders Placed • In July 2013, TGP exercised two of its existing three options from DSME and ordered two additional 173,400 cbm MEGI LNG carrier newbuildings – Tail-heavy payment profile – Expect to secure long-term employment and financing prior to delivery • Secured options
Slide 50: TGP’s Visible Growth Pipeline
TGP‟s Visible Growth Pipeline 6 Options for MEGI LNG Carrier Newbuldings 4 MEGI LNG Carrier Newbuildings 2 Exmar LPG JV Newbuildings 4 Exmar LPG JV Newbuildings 4 Exmar LPG JV Newbuildings Awilco LNG carrier Awilco LNG carrier (Acquisition / Charter (Acquisition / Charter back) back) 2013 2014 2015
Slide 51: Strong LNG Supply Growth Post-2015
Strong LNG Supply Growth Post-2015 • Australia expected to add ~80 MTPA of LNG supply by 2020 • Requirement for additional newbuildings to move new LNG volumes LNG Capacity Additions By Region vs. LNG Carrier Orderbook 500 Others Russia Africa North America Australia Existing Million Tonnes Per Annu
Slide 52: Large Growth of North American Exports after 2016
Large Growth of North American Exports after 2016 • ~ 63 MTPA of North American LNG exports have secured sales agreements – Cheniere‟s 18 MTPA Sabine Pass is under construction with start-up as early as late 2015 – Another 45 MTPA from six US and four Canadian projects have secured sales agreements
Slide 53: LNG Demand Growth Primarily Driven By China and India
LNG Demand Growth Primarily Driven By China and India • LNG is a cornerstone of China‟s energy mix • Chinese LNG imports expected to double to ~25-30 million tonnes (MT) by 2015 • Domestic gas shortfall prompting India to turn to LNG imports • India planning to double regasification capacity by end-
Slide 54: LPG Market
LPG Market MGC Term Rates Remain Steady 2000 MGC 1-year TC rate VLGC spot rate • Medium Gas Carrier (MGC) rates (USD „000 / month) 1600 have remained steady at ~$810k / 1200 month in Q1-2013 800 400 • Very Large Gas Carrier (VLGC) 0 spot rates down on lower Middle- May-08 May-09 May-10 May-11 May-12
Slide 55: Current TGP Growth Initiatives
Current TGP Growth Initiatives • Actively bidding on point-to-point LNG and FSRU projects – Experiencing increased number of new LNG and FSRU tenders • Pursuing long-term contracts for two recently ordered LNG carrier newbuildings delivering in 2016 • Pursuing growth in the LPG sector through our 50
Slide 56: Track Record of Distribution Growth
Track Record of Distribution Growth $2.70 Exmar LPG (50% JV) $2.70 (23 LPG carriers*) MAERSK LNG (52% JV) (6 LNG Carriers) $2.52 ANGOLA PROJECT (33%) (4 LNG carriers) SKAUGEN (3 LPGs) $2.52 EXMAR (2 LNGs) INCREASING CONVENTIONAL TANKERS $2.40 (3 Vessels) DISTRIBUTIONS SKAUGEN (CAGR = 5.6%) (2 LPGs)
Slide 57: Teekay Corporation
TEEKAY CORPORATION