Teekay Corporation Ltd. · NYSE:TK
Teekay — Bear Stearns Transportation Conference 2005
25 slides from Teekay's conference presentation, May 13, 2005
Slide 1: Teekay Shipping – The Marine Midstream Company
Teekay Shipping – The Marine Midstream Company Peter Evensen, CFO Bear Stearns Transportation Conference – May 13, 2005 NYSE : TK 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’s
Slide 3: Teekay Shipping Highlights
Teekay Shipping Highlights Largest crude oil tanker company measured by enterprise value and fleet size Transports over 10% of the world’s seaborne oil Ships more oil per year than BP and Chevron Texaco combined produce in a year World’s largest medium-size spot tanker franchise and world’s
Slide 4: Teekay Shipping Highlights
Teekay Shipping Highlights Large long-term contract portfolio Growing long-term fixed-rate business ~$390 million in annual CFVO from fixed-rate business alone This portfolio enables Teekay to be profitable through almost any tanker cycle Proven track record of profitable growth Fleet and
Slide 5: Teekay – The Transformation
Teekay – The Transformation Teekay circa 1998 Teekay today 43 ships owned, 3 chartered-in 77 ships owned, 52 chartered-in, 13 newbuildings Predominantly spot market operator Balanced mix of spot / fixed-rate business $3 million in annual long-term $390 million in annual long-term fixed-r
Slide 6: Unique Blend of Financial Stability and Operating Leverage
Unique Blend of Financial Stability and Operating Leverage Teekay has two complementary businesses: 1. Leading Spot Tanker Franchise • Conventional • Lightering 2. Growing Long-term Profitable Contract Business Teekay Shipping: The Marine Midstream Company 6
Slide 7: Pre-eminent Market Position
Pre-eminent Market Position Large focused fleet provides Teekay with substantial operating leverage Global reach and interchangeability of fleet provides reliable customer service (i.e. “on time” performance) Customer focus through unique, direct to customer sales force Unique global organiz
Slide 8: World’s Largest Operator of Medium-Sized Tankers
World’s Largest Operator of Medium-Sized Tankers Aframax Sized Vessels 80 70 Commercial Management 60 Newbuildings Vessels 50 # of vessels 40 30 20 10 0 (a) Teekay Shipping Aframax Malaysian Intn'l Novoship General BP Minerva International Shipping Corp. Maritime (a) Includes owned and in-chartered
Slide 9: Present Status of Main Spot Tanker Market Drivers
Present Status of Main Spot Tanker Market Drivers Demand for Oil Supply of Oil Forecast to grow by 2.2% in 2005 => OPEC counterseasonally increasing possibly underestimated given 3.5% production to offset high prices – OPEC growth in 2004? expected to maintain high levels of production through 2
Slide 10: TCE Rates Spiking due to High Utilization
TCE Rates Spiking due to High Utilization Utilization Aframax TCE 90,000 100% 80,000 98% 90% utilization LH Axis 70,000 is considered 96% full use of the TCE US$ per day 60,000 tanker fleet 94% RH Axis Utilization % 50,000 92% 40,000 90% 30,000 88% 20,000 86% 10,000 84% 0 82% 1q00 3q00 1q01 3q01 1q0
Slide 11: Unique Blend of Financial Stability and Operating Leverage
Unique Blend of Financial Stability and Operating Leverage Teekay has two complementary businesses: 1. Leading Spot Tanker Franchise 2. Growing Profitable Long-term Contract Business • LNG Carriers – 76% stake in Teekay LNG Partners L.P. • Shuttle Tankers • Offshore • Fixed Rate Conventional Tankers
Slide 12: Teekay LNG Partners
COMPANY OVERVIEW Teekay LNG Partners 100% 100% Teekay Teekay Shipping Shipping Corporation Corporation Enterprise Enterprise Value Value == $5.0 $5.0 billion billion Public Public Teekay Teekay GP GP L.L.C. L.L.C. 76% (General 76% Unitholders Unitholders (General Partner) Partner) 2% 2% Teekay LNG 2
Slide 13: MLP Investment Highlights
COMPANY OVERVIEW MLP Investment Highlights A unique investment opportunity: Stable cash flows – fixed-rate 20+ year contracts High growth potential – LNG is the fastest growing energy sector Strong sponsorship – ability to leverage Teekay Shipping’s premier global franchise Opportunity to Co-I
Slide 14: Increased Demand for LNG Carriers
INDUSTRY OVERVIEW Increased Demand for LNG Carriers ~ $15 billion market opportunity Projected Demand for LNG Carriers by 2010 364 Additional 76 additional Demand ships required 108 Ships to meet Currently On- projected 180 Order demand (1) Existing Fleet Today 2010 (1) (1) Source: Source: LNG LNG S
Slide 15: Teekay is a Clear Market Leader in Shuttle Tankers
Teekay is a Clear Market Leader in Shuttle Tankers Dynamically Positioned Shuttle Tankers by Operator 45 40 35 30 # of vessels 25 20 15 10 5 0 (a) Teekay Knutsen JJ Ugland Penny Transpetro Ugland (a) Includes owned and in-chartered vessels Teekay Shipping: The Marine Midstream Company 15
Slide 16: The Leader in Offshore Loading
The Leader in Offshore Loading Approximately 35% of Teekay’s capital is invested in “floating pipelines” Serving 30 North Sea oil fields on contracts of affreightment with 20 oil companies Expanding use of shuttle tankers in other markets Shuttling close to 1 billion bbls/year or 2,600,000 bbl
Slide 17: Quantum Leap in Fixed-rate Segment Cash Flow
Quantum Leap in Fixed-rate Segment Cash Flow * 450 400 CAGR = 57% 350 300 $ millions 250 200 150 100 50 0 2002 2003 2004 2005 * Long-term fixed-rate cash flow from vessel operations Teekay Shipping: The Marine Midstream Company 17
Slide 18: Significant Operating Leverage
Significant Operating Leverage $3.00 $2.50 Q2 2005: Spot Rate increase EPS Increase $2.00 $1,000 TCE/day ~ $0.055 / qtr Quarterly Earnings Per Share above $13,000 / day $1.50 $1.00 $0.50 $- $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 Afram ax Rate s ($ pe
Slide 19: Teekay ‘Sum of Parts’ Valuation
Teekay ‘Sum of Parts’ Valuation In millions (except per share data) Balance Sheet and outstanding share data as at Mar. 31, 2005 Medium-term fixed-rate segment Teekay LNG Partners L.P. Spot Segment Medium-term fixed-rate Total Teekay LNG Partners Owned Fleet 285 1,410 segment CFVO enterprise value *
Slide 20: Summary
Summary Disciplined & Focused Growth Strategy Financial strength to pursue continued profitable growth in Business Units / Sectors Near term non-LNG growth likely to come from additional long-term fixed-rate contracts and/or in-chartering vessels Long-Term Fixed-Rate Cash Flow Portfolio is a
Slide 21: Teekay - The Marine Midstream Company: Leading from Strength
Teekay - The Marine Midstream Company LEADING FROM STRENGTH Teekay Shipping: The Marine Midstream Company 21
Slide 22: Appendix
Appendix 1. Summary Fleet List 2. Non -GAAP Reconciliations Non-GAAP NYSE : TK www.teekay.com
Slide 23: Fleet Summary
Fleet Summary As at May 10, 2005 Number of Vessels Owned Chartered-in Newbuildings Vessels Vessels on Order Total Spot Tanker Fleet: VLCC's 1 1 Suezmaxes 2 4 6 Aframaxes 26 17 4 47 Large Product Tankers 6 3 9 Small Product Tankers 11 11 Total Spot Tanker Segment 28 39 7 74 Fixed-rate Tanker Segment:
Slide 24: Appendix – Reconciliation of Cash Flow from Vessel Operations
Appendix – Reconciliation of Cash Flow from Vessel Operations Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense and vessel write-downs/(gain) loss on sale of vessels. Cash flow from vessel operations is a non-GAAP financial measu
Slide 25: Appendix – Reconciliation of Cash Flow from Vessel Operations
Appendix – Reconciliation of Cash Flow from Vessel Operations Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense and vessel write-downs/(gain) loss on sale of vessels. Cash flow from vessel operations is a non-GAAP financial measu