Teekay Corporation Ltd. · NYSE:TK
Teekay — Investor Presentation (April 2010)
28 slides from Teekay's investor presentation, April 2010
Slide 1: Teekay Corporation Investor Presentation April 2010
TEEKAY CORPORATION Investor Presentation April 2010 www.teekay.com
Slide 2: Safe Harbor
Safe Harbor 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 market fundamentals,
Slide 3: Investment Highlights
Investment Highlights f Diversified marine midstream operator with stable operating cash flows: over 80% of total fleet operating days under long-term, fixed- rate contracts to high quality oil and gas companies f Market leadership in each business segment f Strong and improving credit profile f 201
Slide 4: Teekay Group Corporate Structure
Teekay Group Corporate Structure TEEKAY PARENT NYSE: TK # of Vessels1 Value f Teekay Parent Fleet 56 $2.1b f Equity Investment in Daughter Companies 2.1b $4.2b 49.2% Ownership CONTROL 35.9% Ownership CONTROL CONTROL 37.1% Economic Ownership / (incl. 2% GP interest) (incl. 2% GP interest) 55.0% Votin
Slide 5: Substantial Asset Value at Teekay Parent
Substantial Asset Value at Teekay Parent Teekay Parent Assets ($ millions) Conventional Tankers – Spot 1 $809 Conventional Tankers – Fixed 1 184 FPSOs 2 901 Newbuildings 3 213 FMV of Teekay Parent Fleet $2,107 Teekay Parent Equity Investment in Daughters4 TGP 754 TOO 336 Value of TOO and TGP GPs5 16
Slide 6: Company Overview
Company Overview www.teekay.com
Slide 7: Teekay Corporation
Teekay Corporation f A world leader in marine logistical solutions to the global oil and gas industry f Total fleet of 156 vessels1 valued at $7.2b2 f Transports approximately 10% of the world’s seaborne oil f Founded 1973 by the late Torben Karlshoej f Transnational company with 6,340 employees f E
Slide 8: Teekay's Transformation
Teekay’s Transformation f Transformed from a regional tanker company to a diversified global marine midstream operator f Combination of strategic acquisitions and organic growth f Track record of: f Buying valuable franchises and growing them f Managing the cycles f Realizing value through well-time
Slide 9: Substantial Scale & Diversification
Substantial Scale & Diversification f Teekay has increased its fixed-rate revenues and broadened its business mix Net Revenues by Business Segment 2003 2009 Fixed-Rate Tanker Segment Spot Tanker Segment¹ 16% 24% Fixed-Rate Liquefied Gas Conventional & Segment Shuttle Tanker 13% Segment 41% Spot Tank
Slide 10: Strategic Customer Relationships
Strategic Customer Relationships f Top 10 fixed-rate customers represent 78% of fixed-rate revenues (9/30/09 YTD) Customer Credit Rating Entity1 Aa1 / AA TK, TGP Baa2 / BBB TK NR / NR TGP A1 / A TK, TGP Aaa / AAA TK, TOO A3 / BBB- TK, TOO (Qatar) Aa2 / A TGP Baa1 / BBB TGP Aa2 / AA- TK, TOO Baa2 / B
Slide 11: 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) 39 Shuttle Tankers Offshore Platform Storage Tanks 5 Floating Production Units (FPSOs) 71 Crude Tankers1 Refinery Average Vessel Age 2 Ship to Ship 6.5 years Lightering Storage Tanks Exports 10 Product Carriers LNG
Slide 12: Teekay is a Market Leader in Each of its Business Segments
Teekay is a Market Leader in Each of its Business Segments Market Leader in Harsh Weather FPSOs Largest Operator of Shuttle Tankers # of vessels Existing New buildings on Order 39 4 Petrojarl Varg Petrojarl Foinaven Petrojarl Banff North Sea North Sea North Sea 16 35 3 9 13 3 3 7 2 2 3 1 Petrojarl I
Slide 13: Maintaining Our Focus on Realizing Value
Maintaining Our Focus on Realizing Value Three key strategies to realize value: 1. Actively managing asset portfolio 2. Improving profitability of existing assets 3. De-leveraging at Teekay Parent 13 www.teekay.com
Slide 14: Active Management of Spot Market Exposure
Active Management of Spot Market Exposure f Teekay Parent’s flexible platform consists of owned, in-chartered and commercially managed vessels f Enables Teekay Parent to dial its market exposure up or down while maintaining sizeable footprint f Reduced spot market exposure by not renewing expiring i
Slide 15: Improving Profitability
Improving Profitability f Value enhancement is not dependent on growth f Teekay Parent expects to earn more from its existing asset base f Renegotiating FPSO contracts at higher rates f Reducing G&A – current quarterly run-rate 20% below Q2 ’08 peak of $68m f Improving spot market f Divesting non-co
Slide 16: Significant Upside in Teekay's Offshore Segment Cash Flows
Significant Upside in Teekay’s Offshore Segment Cash Flows f Below market FPSO contracts renewing at higher levels f The Varg FPSO renewed in July ‘09 yielding 37% increase in annual cash flows (from $40m to $55m) f Negotiating contract renewals on two FPSO units (in progress) f Shuttle tanker contr
Slide 17: Significant Debt Reduction Achieved at Teekay Parent
Significant Debt Reduction Achieved at Teekay Parent ~$1.4b Total Liability Reduction $3,000 $2,500 $2,000 $ Millions $1,500 $1,000 $500 $0 Jun. 30, 2008 Dec. 31, 2009 Pro Forma 2010 YTD Dropdowns to TGP, TOO and TNK Net Debt Pre-financed Newbuild Committments f Focused on moving Teekay Parent towar
Slide 18: Significant Liquidity and Favorable Debt Profile
Significant Liquidity and Favorable Debt Profile f Approximately $2.1b1 of consolidated liquidity at December 31, 2009, with $1.1b2 at Teekay Parent, pro forma for $450m bond offering f No debt covenant concerns f Less than 5% of consolidated total debt tied to conventional tanker values f Additiona
Slide 19: LNG Industry Outlook
LNG Industry Outlook Global Natural Gas Demand LNG Commentary billion m3 p .a. f Natural gas is one of the world’s 1.5% fastest growing primary energy sources due to its abundance and 4,313 clean burning characteristics 3,395 f Global LNG trade grew by over 3,049 1,517 7% p.a. between 2000 and 2007
Slide 20: Recent Uptick in Offshore Market Activity
Recent Uptick in Offshore Market Activity Floating Production Unit Orders vs. Oil Price Offshore Market Update 9 Floating Production Unit Orders WTI Oil Price $140 8 $120 f Global E&P spending expected to increase by 11% 7 in 2010, which is expected to drive FPSO / FSO / Number of Units $100 shuttle
Slide 21: Brazil is a Significant Growth Opportunity
Brazil is a Significant Growth Opportunity f Almost 90% of Brazilian oil is currently produced offshore f Expected to increase as new discoveries come on-line f Significant demand for FPSOs and shuttle tankers f Driven by the depth and distance from shore of discoveries f +20 FPSO projects currently
Slide 22: Tanker Rates Off the Bottom
Tanker Rates Off the Bottom Mid-Sized Tanker Spot TCE Rates f Spot rates declined to multi-year lows in summer 2009 – impact of economic downturn and $120 Suezmax Aframax $120 contracting oil demand coupled with fleet growth 100 100 f Recovery in rates during Q4-09 / Q1-10 driven by: ‘000s USD / Day
Slide 23: Latest Changes to 2010 Tanker Market Drivers
Latest Changes to 2010 Tanker Market Drivers 2010 Driver Change Comment Global GDP Growth Å IMF upgraded its forecast for global GDP growth in 2010 from 3.1% to 3.9%. Oil Demand Growth Å IEA revised its global oil demand growth forecast for 2010 up to 1.6 mb/d (1.8%). OPEC Market Share Å As per the
Slide 24: Revised 2010 Tanker Fleet Utilization Outlook
Revised 2010 Tanker Fleet Utilization Outlook 94% 2009 2010 2010 94% Base Recovery Case +/- 2% 92% Case 92% +1% 90% +0.5% 90% Fleet Utilization Fleet Utilization +1.5% 88% +0.75% 88% +1.25% 86% 85% 86% 84% Upside Potential + 8% 84% 84% 82% 82% Source: IMF / IEA / CRS / Platou / Internal estimates 80
Slide 25: Investment Highlights
Investment Highlights f Diversified marine midstream operator with stable operating cash flows: over 80% of total fleet operating days under long-term, fixed-rate contracts to high quality oil and gas companies f $11.5 billion of forward fixed-rate revenues f Market leadership in each business segme
Slide 26: Appendix: Supplemental Information
Appendix: Supplemental Information www.teekay.com
Slide 27: Capital Markets Are Open to Teekay
Capital Markets Are Open to Teekay f Teekay has been actively negotiating new debt financing and extensions on existing facilities ~$1.8b in transactions completed in 2009 f Proceeds from Daughter company equity issuance used to and 2010YTD finance dropdown transactions from Teekay Parent Commercial
Slide 28: Daughter Dividend History
Daughter Dividend History Quarterly Dividend/Share $ 0.60 4% $ 0.50 $1.20 Quarterly Dividend/Unit 4% 13% 15% 4% 0.80 0.50 0.40 10% 12% 0.40 0.40 0.30 0.00 2005 2006 2007 2008 2009 2006 2007 2008 2009 2007 2008 2009 Distribution Increase f MLPs by design are structured to pay a stable dividend, f Tee