Slide 1: Teekay's Third Quarter 2008 Earnings Presentation
TEEKAY CORPORATION Teekay’s Third Quarter 2008 Earnings Presentation January 25, 2009 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’
Slide 3: Third Quarter Highlights
Third Quarter Highlights f 3Q-08 operating net income* of $60.8m, or $0.83 per share f (excluding specific items which decreased net income by $45.6m, or $0.62 per share) f Generated cash flow from vessel operations* (CFVO) of $184.8m, of which $115.6m, or 63%, from fixed-rate businesses f Enjoying
Slide 4: Restatement Process Completed
Restatement Process Completed Key Findings: f As anticipated, all reported changes are non-cash in nature f no impact on historical or future cash flows, liquidity or dividends f no impact on adjusted net earnings and EPS f Restatements strictly related to accounting treatment and presentation - no
Slide 5: Executing on 2008 Strategy
Executing on 2008 Strategy TEEKAY CORPORATION Gas Tankers Offshore f Agreed to acquire 2 more f Sale of Swift product tanker f Renegotiation of existing Skaugen Multigas carriers completed FPSO contracts [finalized] f Sold Product Chemical f Increased tender activity in Tanker for $98 million offsho
Slide 6: Teekay Petrojarl Update
Teekay Petrojarl Update f Varg Charter contract extended to at least 2013 6 www.teekay.com
Slide 7: Sum-of-the-Parts Value
Sum-of-the-Parts Value $60.07 per Share “Standalone” assets $36.68 per TK Share TGP TNK TOO/OPCO $9.23 per $3.91 per $10.25 per TK Share TK Share TK Share Current Teekay trading price of ~ $42 is a 30% discount to sum-of-parts value See following slides for detailed calculations 7 www.teekay.com
Slide 8: Q2-08 is Strongest Second Quarter On Record
Q2-08 : Strongest Second Quarter On Record Million B/D Middle East OPEC Crude Output (LHS) Suezmax Average Rates (RHS) USD / Day 22.0 140,000 21.5 120,000 RHS 100,000 21.0 80,000 20.5 60,000 20.0 40,000 19.5 20,000 19.0 0 Q1-04 Q3-04 Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 to date Source : I
Slide 9: Combination of Volume and Distance Driving Tanker Demand
Combination of Volume and Distance Driving Tanker Demand 6 1,450 Chinese Crude Oil Imports Went Up By 100%... 5 …But Ton-Mile Demand Increased By 133% 1,200 China Crude Imports - Billion Ton-Miles 4 Million B/D 950 3 700 2 1 450 LHS RHS 0 200 2003 1H-08 Source: China Customs / Teekay Classification
Slide 10: Scrapping / Conversions Constraining Fleet Supply Growth
Scrapping / Conversions Constraining Fleet Supply Growth 1H 2008 Actual 2H 2008 Estimate* Scrapping Conversions Fleet Net Net Type End-2007 Deliveries Scrapping Conversions Change Deliveries (Only IMO (Sold but Change Mandated) yet to leave) VLCC 504 16 3 11 +2 20 1 15 +4 Suezmax 316 8 1 4 +3 9 - 10
Slide 11: Rates Spike – A Result of a Stretched World Tanker Fleet
Rates Spike – A Result of a Stretched World Tanker Fleet Utilization Suezmax Spot Rates 100,000 96% 90,000 95% 80,000 94% Suezmax Spot Rates 70,000 93% (USD / Day) Utilization 60,000 92% 50,000 91% 90% = Full Fleet Utilization 40,000 90% RHS 30,000 89% 20,000 88% 10,000 87% 2004 2005 2006 2007 Q1-08
Slide 12: Q3/08 Financial Update
Q3/08 Financial Update www.teekay.com
Slide 13: Teekay is well-positioned in the current economic and financial environment
Teekay is well-positioned in the current economic and financial environment: 1. Strong liquidity position, with all future CAPEX fully financed 2. Favorable debt profile with no near-term refinancing requirements and no covenant concerns 3. Substantial long-term fixed-rate revenue and cash flow 13 w
Slide 14: Strong Liquidity Position with 100% Funding for CAPEX
Strong Liquidity Position with 100% Funding for CAPEX TOTAL LIQUIDITY CAPEX & FUNDING As of September 30, 2008 As of September 30, 2008 Cash $ 876m Total CAPEX $1,197m Undrawn Revolving Pre-arranged, committed $ 873m <$1,053m> Facilities newbuild financing To be funded from operating cash Current Li
Slide 15: Teekay Has a Favorable Debt Profile
Teekay Has a Favorable Debt Profile No refinancing requirements through 2010 f Only $36 million in balloon payments due between now and mid-2010 f Current liquidity more than sufficient to repay all facilities coming due 2,000 $1,749 Total Liquidity Bullet Repayments 1,500 $ Millions 1,000 500 $150.
Slide 16: Teekay's Business Model Provides Substantial Stable Revenues
Teekay’s Business Model Provides Substantial Stable Revenues Over 70% of Teekay’s Invested Capital operates under long- term, fixed-rate contracts with high quality counterparties Total Forward Fixed-rate Revenues exceed $12.2 billion Avg. Remaining Forward Fixed-rate Segment # of Vessels Primary Ch
Slide 17: Fixed-rate Business Supports Teekay's Entire Current Debt Servicing
Fixed-rate Business Supports Teekay’s Entire Current Debt Servicing f Annualized Fixed-rate CFVO* alone is more than sufficient to service 100% of the Company’s current principal and interest payments Annualized Fixed-rate $467m CFVO Current TOTAL Teekay <$179m> principal payments Current TOTAL Teek
Slide 18: Teekay Debt Profile
Teekay Debt Profile As of September 30, 2008, 80% of consolidated total debt is at subsidiary level and is non-recourse to Teekay Standalone Teekay Disaggregated Debt (as at June 30, 2008) Teekay Offshore Teekay LNG Partners Teekay Tankers Teekay Petrojarl Teekay Standalone Teekay Consolidated Partn
Slide 19: Accounting Treatment Does Not Reflect Net Principal Payments
Accounting Treatment Does Not Reflect Net Principal Payments Debt and Capital Lease Obligations in Financial Statements Overstate Actual Cash Repayments 2H 2008 2009 2010 Long-term debt 139.6 326.0 477.4 Commitments under capital leases 62.8 198.8 74.8 Debt and Capital Lease Obligations per financia
Slide 20: Teekay is well-positioned in the current economic and financial environment
Teekay is well-positioned in the current economic and financial environment: 1. Total available liquidity of ~$3.0 billion, including committed financing for all future CAPEX 2. Favorable debt profile with no need to access capital markets and no covenant concerns 3. Substantial fixed-rate contract
Slide 21: Appendix
Appendix www.teekay.com
Slide 22: Sum-of-the-Parts Support
Sum-of-the-Parts Support Teekay Offshore Partners and OPCO Teekay LNG Partners Teekay Standalone in (millions) TOO TGP FMV of owned 'on-the-water' fleet 2,020.0 L.P. units outstanding 30.2 L.P. units outstanding 44.4 (per Clarkson's) Price per unit $ 16.61 Price per unit $ 23.99 Teekay Petrojarl (TP
Slide 23: Sum-of-the-Parts Support
Sum-of-the-Parts Support TOO Net Debt Calculation Teekay LNG Net Debt Calculation Teekay Tankers Net Debt Calcuation Cash 113.0 Cash 78.8 Cash 19.7 Restricted cash - current Restricted cash - current 33.5 Restricted cash - current - Restricted cash - long-term Restricted cash - long-term 661.6 Restr
Slide 24: Support for Slide #16
Support for Slide #16 Calculation of Q2 2008 Calculation of Q2 2008 Annualized Net Interest Annualized Fixed-rate CFVO Expense Interest Gain 114.0 Offshore 53.1 SFAS 133 adj. gain 191.8 Fixed-rate Tanker 29.8 actual interest expense -77.8 Liquefied Gas 33.8 Interest (loss) -2.1 116.7 SFAS 133 adj lo
Slide 25: Teekay Disaggregated Debt Support
Teekay Disaggregated Debt Support (USD millions) as at June 30, 2008 Teekay Offshore Teekay LNG Partners Teekay Tankers Teekay Petrojarl Teekay Standalone Teekay Consolidated Partners Long-term Long-term Long-term Long-term Long-term Long-term 2,985.8 1,618.5 320.6 446.0 1,248.4 6,619.3 debt debt de