Teekay Corporation Ltd. · NYSE:TK
Teekay — Q4 2006 Earnings Presentation
33 slides from Teekay's earnings presentation, Feb 22, 2007
Slide 1: Teekay's Fourth Quarter and Fiscal 2006 Earnings Presentation
TEEKAY SHIPPING CORPORATION Teekay’s Fourth Quarter and Fiscal 2006 Earnings Presentation February 22, 2007 TEEKAY – THE MARINE MIDSTREAM COMPANY® 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: Fourth Quarter Highlights
Fourth Quarter Highlights f 4q06 net income of $60.3m, or $0.81 per share (including specific items which decreased net income by $18.9m, or $0.25 per share) f Generated cash flow from vessel operations of $161.0m, of which $107m, or 66% from fixed-rate businesses f Another successful Teekay growth
Slide 4: 2006 Highlights
2006 Highlights f Generated over $2.0b of revenues f Generated net income of $262m or $3.49 per share (including specific items which decreased net income by $63.7m or $0.85 per share) f Generated $622m of CFVO, 58% or $364m from fixed-rate businesses f Balance sheet exceeds $7.7b of assets, from $2
Slide 5: Petrojarl Value Potential – Part I Winning New Projects
Petrojarl Value Potential – Part I Winning New Projects f A leader in sophisticated harsh weather FPSOs f In-house engineering capability f Strong reputation for project execution and reliable operations f Competitive cost of capital through Teekay Offshore f New projects are very valuable fE.g. Sir
Slide 6: Significant Deepwater Offshore Growth
Significant Deepwater Offshore Growth f Deepwater offshore oil Increasing Trend Towards production is one of the Deepwater Oil Production fastest growing areas in 27 10 the energy industry Shallow water f Only significant 26 8 opportunity to add reserves outside of Russia and Middle East 25 6 MB / D
Slide 7: Increasing Demand for FPSOs
Increasing Demand for FPSOs Projected FPSO Fleet Growth f Current operating fleet expected to nearly double over next 5 years 17 - 20 87 – 98 Additional per f FPSO usage year Vessels increasingly 43 Newbuilds Expected popular in offshore sector 111 111 Existing Existing f Growing trend to Fleet Flee
Slide 8: Petrojarl Value Potential – Part II Renegotiation/Redeployment of Existing FPSO Units
Petrojarl Value Potential – Part II Renegotiation/Redeployment of Existing FPSO Units f Petrojarl FPSO contracts entered into during lower rate environment => today, significantly out-of-the-money Petrojarl Varg f Next 2-3 years: assets available for redeployment => window for contract renegotiation
Slide 9: Teekay Offshore Offers One-Stop Service
Teekay Offshore Offers One-Stop Service FSO Shuttle Tanker FPSO ©Teekay Shipping Ltd. Bundling of Offshore Services Adds Value 9 www.teekay.com
Slide 10: Serving Customers from Reservoir to Refinery
Serving Customers from Reservoir to Refinery A leader in high- A leader in harsh end FSO market weather FPSOs World’s largest Shuttle tanker operator Growing force in product tanker market 50% owner of world’s leading lightering World’s largest operator of business mid-size crude oil tankers World’s
Slide 11: Corporate Structure Facilitates Growth
Corporate Structure Facilitates Growth Teekay Parent G.P. of G.P. of Teekay LNG TGP TOO Teekay Offshore Partners L.P. Partners L.P. NYSE: TGP NYSE: TOO Conventional Teekay Tankers Petrojarl Shuttle Tankers LNG Carriers FSOs LPG Carriers Future FPSOs 11 www.teekay.com
Slide 12: Teekay's Updated Sum of Parts Value
Teekay’s Updated Sum of Parts Value $72.02 Teekay LNG Teekay Parent Teekay Offshore Partners Partners NYSE: TGP NYSE: TOO NYSE: TK & OPCO $12.26 $32.44 Per Teekay share $27.32 Per Teekay share Per Teekay share Assumptions and reconciliations provided in appendix 12 www.teekay.com
Slide 13: Developments in Teekay's Offshore Segment
Developments in Teekay’s Offshore Segment f 4q06 CFVO of $60.8 million, up from 3q06 due to the inclusion of Teekay Petrojarl’s results from Oct. 1, 2006 f Signed life-of-field shuttle tanker contract of affreightment with Statoil covering Norwegian Continental Shelf f Some fields expected to run be
Slide 14: Developments in Teekay's Liquefied Gas Segment
Developments in Teekay’s Liquefied Gas Segment f 4q06 CFVO of $19.9 million f Second RasGas II LNG Carrier, Al Areesh, commenced 20-year fixed- rate time charter on January 2, 2007 f Final RasGas II vessel expected to deliver by the end of February 2007 f 3 LPG carriers acquired by Teekay LNG Partne
Slide 15: Developments in Teekay's Conventional Tanker Segments
Developments in Teekay’s Conventional Tanker Segments fFixed-rate Tanker Segment: f 4qo6 CFVO of $26.0 million fSpot crude oil and clean product tanker segment: f 4q06 CFVO of $54.3 million f Aframaxes* had relatively stronger earnings than larger size ships due in part to growth in non-OPEC oil pro
Slide 16: Our 2007 Outlook: A Continued Market Balance
Our 2007 Outlook: A Continued Market Balance Platou tanker utilization estimate for 2006: 89% 2007 Tanker Supply (Mdwt) 2007 Tanker Demand 2007 Tanker deliveries* 34 IEA oil demand growth 1.8% 10% average slippage in deliveries (3.4) Conversion factor 2.5x Expected deliveries 30.6 => Tanker demand g
Slide 17: Financial Discussion
Financial Discussion TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 18: Segment Operating Results
Segment Operating Results (in thousands of U.S. dollars) Three Months Ended December 31, 2006 (unaudited) Offshore Fixed-Rate Liquefied Gas Segment Tanker Segment Segment Spot Segment Total Net voyage revenues 218,280 46,187 29,111 149,753 443,331 Vessel operating expenses 67,019 11,783 4,587 16,095
Slide 19: Summary Income Statement
Summary Income Statement Three months ended Dec 31, 2006 Dec. 31, 2005 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 586,990 531,473 OPERATING EXPENSES General and administrative expenses (56,377) (45,375) Gain on sale of vessels and equipment / (write-downs) (4,754) 1
Slide 20: Summary Balance Sheet
Summary Balance Sheet As at Dec 31, As at Sept 30, In 000s of USD 2006 2006 (unaudited) (unaudited) ASSETS Cash and cash equivalents 343,914 303,231 Other current assets 318,229 254,439 Total restricted cash 679,992 779,505 Other assets 535,996 467,648 Vessels and equipment 4,925,409 3,164,223 Advan
Slide 21: Summary of Share Repurchase Transactions
Summary of Share Repurchase Transactions Repurchased during period Then Remaining Time period $ value # of shares $ value Nov. 2004 to Dec. $555 million 13 million $229 million 6, 2005 Dec. 6, 2005 to $165 million 4.2 million $64 million Feb. 21, 2006 Feb. 21, 2006 to $27.5 million 0.7 million $36 m
Slide 22: EPS Rule of Thumb
EPS Rule of Thumb $1.75 $1.50 Q1 2007: Spot Rate increase $1,000 TCE/day above EPS Increase $16,000 / day ~ $0.06 / qtr $1.25 Quarterly Earnings Per Share $1.00 $0.75 $0.50 $0.25 $- $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Aframax Rates ($ per day) 22 www.teekay.com
Slide 23: Teekay – Much More than a Tanker Company
Teekay – Much More than a Tanker Company A global asset management company focused on the marine midstream space f Our four components to shareholder value creation: f Disciplined traders in a cyclical commodity industry f Applying our operational franchise to deliver a safe, high quality service to
Slide 24: Appendix
Appendix TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com
Slide 25: Teekay "Sum-of-Parts" Valuation
Teekay “Sum-of-Parts” Valuation * Teekay Offshore Partners Teekay LNG Teekay Parent Assets L.P. and OPCO Partners L.P. TOO market TGP market Owned Fleet capitalization @ $591m capitalization @ $1,287m FMV ‘on-the-water’ $29.55/unit $36.80 /unit $1,477m vessels Petrojarl EV $1,124m Teekay’s L.P. 57.7
Slide 26: Sum of the Parts Support
Sum of the Parts Support Teekay Offshore Operating Partners (OPCO)* Teekay LNG Partners Teekay Parent OPCO EBITDA = $278.4 OPCO Net Debt = $1,189.4 in (millions) OPCO FMV of owned 'on-the-water' fleet 1,477.2 (per Clarkson's) TOO EBITDA Multiple 12.4x Petrojarl Enterprise Value 1,123.9 Implied OPCO
Slide 27: Sum of the Parts Support con't
Sum of the Parts Support con’t All figures from 4Q06 F/S All figures from 4Q06 F/S OPCO Net Debt Calculation Teekay LNG Net Debt Calculation Cash 114.0 Cash 28.9 Restricted Cash - current Restricted Cash - current 55.0 Restricted Cash - long-term Restricted Cash - long-term 615.7 Total cash (a) 114.
Slide 28: Newbuilding/Conversion Deliveries
Newbuilding/Conversion Deliveries 1Q07 2Q07 3Q07 4Q07 2007 Offshore Segment 1 1 2 Fixed-Rate Tanker Segment Liquefied Gas Segment 2 2 Spot Segment 2 1 3 Total 5 2 7 1Q08 2Q08 3Q08 4Q08 2008 Offshore Segment 1 1 Fixed-Rate Tanker Segment 1 1 2 Liquefied Gas Segment 1 4 2 7 Spot Segment 1 1 2 4 Total
Slide 29: Capex
Capex Capex by Segment (in millions) 2007 2008 2009 2010 Total Offshore Segment $297 - $23 $184 $504 Fixed-Rate Tanker Segment 17 59 - - 76 Liquefied Gas Segment 357 191 54 - 602 Spot Segment 156 261 226 - 643 Total $827 $511 $303 $184 $1,825 29 www.teekay.com
Slide 30: Highly Profitable In-charter Portfolio
Highly Profitable In-charter Portfolio Avg. Spot Rates # of remaining Ship Avg. rate as of Feb. ships (in years) Years ($/day) 16, '07* Suezmax 4 0.6 2.2 $ 24,100 $ 50,639 Aframax 12 2.0 24.3 $ 21,900 $ 47,144 LRII 1 5.5 5.5 $ 19,000 $ 21,000 MR 6 1.8 10.8 $ 21,900 $ 23,800 Small Product 10 1.3 12.8
Slide 31: Sum of Parts Support - Petrojarl
Sum of Parts Support - Petrojarl Petrojarl Market Cap – $858.6m 75m shares at 70 NOK/share @ 6.1 NOK/USD Net Debt (as of Dec. 31, 2006) 265.3m Enterprise Value 1,123.9m Minority Interest (34.5% 304.8m of market cap) 31 www.teekay.com
Slide 32: Sum of Parts Support – GP Values
Sum of Parts Support – GP Values GP Valuation Comp Table Price Current DCF P/DCF 3-Year Dist. GP Ticker (12/4/06) Distribution 2006 2007 Yield 2006 2007 CAGR Valero GP Holdings, LLC VEH $21.14 $1.20 $1.25 $1.38 5.7% 16.9x 15.3x 8.8% Buckey GP Holdings, L.P BGH $15.65 $.82 $.87 $1.03 5.2% 18.0x 15.2x
Slide 33: Teekay Parent Fleet Valuation
Teekay Parent Fleet Valuation Year Spot - In-chartered Spot - owned Built Year Year Aframax Built Built Everest Spirit 2004 Suezmax Large Product Tankers Esther Spirit 2004 Roviken 2006 Stavanger Prince 2002 Axel Spirit 2004 SCF Khibiny 2002 Horizon 2004 Erik Spirit 2005 Astra 2002 Stavanger Eagle 2