Teekay Tankers Ltd. · NYSE:TNK
Teekay Tankers — Q4 2010 Earnings Presentation
13 slides from Teekay Tankers's earnings presentation, Feb 24, 2011
Slide 1: Q4 2010 Earnings Presentation
Q4 2010 Earnings Presentation February 24, 2011
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: tanker marke
Slide 3: Recent Highlights
Recent Highlights » Declared a dividend of $0.22 per share for Q4 • Payable on March 15th to all shareholders of record on March 8th » +60% of Q4 revenues days earned avg. of $24,390 per day on fixed- rate time-charter, well above avg. spot TCE of $14,779 per day (1) » Earned adjusted net income of
Slide 4: FY2010 Highlights
FY2010 Highlights » Declared total dividends of $1.24 per share for FY2010 (1) » Earned adjusted net income of $22.4 million, or $0.53 per share » In July 2010, invested $115 million in two, first-priority ship mortgages earning interest of 9 percent, secured by two newbuilding VLCCs » Strategically
Slide 5: 2010 – A Year of Fleet Growth and Renewal
2010 – A Year of Fleet Growth and Renewal 16 Teekay Tankers Fleet 15 1 1 1 14 1 1 2 12 1 10 9 # Vessels 2 8 6 2010 4 2 0 Fleet at IPO Acquisition of Acquisition of Acquisition of Sale of Sale of Acquisition of 1 Fleet (Dec 12, '07) 2 Suezmax 1 Suezmax 2 Suezmax and 1 Aframax 1 Aframax Aframax and 1
Slide 6: Profile of TNK’s Tactical Fleet Management
Profile of TNK’s Tactical Fleet Management Name Y/ Built Dwt Kaveri Spirit 2005 149,985 2010 Investments Ashkini Spirit 2003 165,200 Pro Forma Coverage Kanata Spirit 1999 113,000 Trading in Iskmati Spirit 2003 165,209 Teekay Pools Fixed Spot Helga Spirit 2005 115,515 Q12011 62% 38% Erik Spirit 2005
Slide 7: 2011 Priorities
2011 Priorities » Maintaining fleet availability through focus on superior operations » Acquire existing modern ships with proceeds from recent equity offering • Ship prices falling with weakness in spot tanker market • Newbuild prices remaining firm due to weakness in US dollar vs. Korean won and h
Slide 8: Q1 2011 Dividend Matrix
Q1 2011 Dividend Matrix » Tanker rates currently very volatile • Avg. Aframax rates week ended Feb. 11, 2011 - $9,002 per day • Avg. Aframax rates week ended Feb. 18, 2011 - $14,112 per day » TNK largely insulated with ~62% fixed coverage for Q1 Q1 2011 Dividend Estimate Suezmax Spot Rate Assumption
Slide 9: Excess Tanker Supply Driving Down Utilization and Rates
Excess Tanker Supply Driving Down Utilization and Rates » 2010 demand dynamics were positive: • Oil demand growth of 3.3% in 2010 was the second highest since the 1970s • Tanker ton-mile demand growth was the strongest since the 1980s » Growth in tanker supply outpaced demand growth: » Net fleet gro
Slide 10: Tanker Market Outlook
Tanker Market Outlook Demand Supply » Record oil & tanker demand expected » Higher fleet growth vs. 2010 Challenging Year • 1.5 – 2% oil demand growth translates • ~7% nameplate supply growth to 5 – 6% tanker demand growth 2011 – 2011 • Pressure on OPEC to increase crude » Age discrimination reduces
Slide 11: Factors For A Recovery – Self Correcting Behaviour
Factors For A Recovery – Self Correcting Behaviour New Tanker Orders vs. Aframax Spot Earnings 100 New Tanker Orders (LHS) Aframax Earnings (RHS) 50 90 45 80 40 Million Deadweight 70 35 USD '000 / Day 60 30 50 25 40 20 30 15 20 10 10 5 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 12: Secondhand Prices Expected To Decline in 2011
Secondhand Prices Expected To Decline in 2011 Aframax Asset Prices 90 Aframax NB Price Aframax 5 yr Price 80 70 Million USD 60 50 40 30 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11E Source: Clarksons » Secondhand tanker
Slide 13: TNK Financial Snapshot
TNK Financial Snapshot » Low spot tanker cash flow breakeven » Net Debt/Cap: 38% (incl. proceeds from below $0 / day in 2011 recent offering) » December 31, 2010 total liquidity: » Minimal principal payments until 2015 $187 million; $295 million including proceeds from recent offering Total $200 Liq