Slide 1: Teekay's Fourth Quarter and Fiscal 2003 Earnings Presentation
Teekay’s Fourth Quarter and Fiscal 2003 Earnings Presentation February 26, 2004 NYSE: TK www.teekay.com
Slide 2: Forward Looking Statements
Forward Looking Statements This document 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 anticipated free
Slide 3: 2003 Highlights
2003 Highlights Highest annual cash flow from vessel operations at $580 million Navion acquisition well timed: Extended position as world’s largest operator of Aframax tankers Became world’s largest shuttle tanker operator Significant fleet renewal accomplished Teekay Shipping Corporation
Slide 4: World Oil Demand
World Oil Demand Year-on-Year Change OECD Non-OECD Total World 2,500 2,000 1,500 Thousand B/D 1,000 500 0 -500 -1,000 -1,500 1q00 2q00 3q00 4q00 1q01 2q01 3q01 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04 3q04 4q04 Source: IEA Teekay Shipping Corporation 4
Slide 5: Tanker Supply - Outlook
Tanker Supply - Outlook Deliveries Deletions On Order Net Change 40 Deliveries of 57 mdwt 30 Million Deadweight 20 10 0 -10 Mandatory Scrapping -20 4.5 mdwt mandatory scrapping 36 mdwt 17.4 mdwt voluntary scrapping -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2
Slide 6: World Tanker Supply / Demand Balance to Remain Tight Through 2006
World Tanker Supply / Demand Balance to Remain Tight Through 2006 2004/2005 2006 (mdwt) (mdwt) Newbuilding deliveries 57 18 less: mandatory scrapping * 36 2 Net fleet growth 21 16 Tanker demand growth ** 23 12 Change in supply / demand (2) 4 balance * excludes any voluntary scrapping ** based on 2%
Slide 7: Aframax Monthly Average Spot TCE Rates
Aframax Monthly Average Spot TCE Rates 70,000 Caribs-USG Indo-Japan 60,000 50,000 US$ per Day 40,000 30,000 20,000 10,000 0 Aug-03 Apr-03 Nov-03 May-03 Feb-03 Jun-03 Oct-03 Jan-03 Jul-03 Jan-04 Sep-03 Mar-03 Dec-03 Source: CRS Teekay Shipping Corporation 7
Slide 8: Significant Fleet Renewal
Significant Fleet Renewal Teekay Fleet at Teekay Fleet at World Fleet at Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003 Average age * 7.7 yrs 11.3 yrs 9.9 yrs % of DH Ships 73% 50% 59% Total Fleet Size 15.6 million dwt 10.5 million dwt 317 million dwt Newbuilding Deliveries 2004 2005 2006 2007 2008 Spot
Slide 9: Significant Operating Leverage
Significant Operating Leverage 30.00 2004: Spot Rate Increase EPS Increase 25.00 $1,000 TCE/day ~ $0.68/year above $13,000 / day 20.00 EPS using Clarkson Q1, 2004 YTD TCE annualized Earnings Per Share ($) 15.00 10.00 EPS using TK 2003 actual TCE 5.00 - $10,000 $15,000 $20,000 $25,000 $30,000 $35,000
Slide 10: Predictable & Stable Earnings
Predictable & Stable Earnings Cash flow from vessel operations from Fixed-rate Long-term Contracts 300 280 260 240 220 200 ($) millions 180 160 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Shuttle Tankers Fixed Rate Conventional Tankers Offshore Average ROE > 20% Ave
Slide 11: Teekay Shipping Fourth Quarter Results
Teekay Shipping Fourth Quarter Results (In thousands of U.S. dollars, except per share data) Q4 - 2003 Q4 - 2002 % change Net voyage revenues $ 340,599 $ 155,144 120% Spot Rate cash flow from vessel operations $ 93,722 $ 60,572 55% Fixed Rate cash flow from vessel operations $ 61,002 $ 27,221 124% T
Slide 12: Teekay Shipping Fiscal 2003 Results
Teekay Shipping Fiscal 2003 Results (In thousands of U.S. dollars, except per share data) FY 2003 FY 2002 % change Net voyage revenues $ 1,181,439 $ 543,872 117% Spot Rate cash flow from vessel operations $ 391,103 $ 167,240 134% Fixed Rate cash flow from vessel operations $ 189,870 $ 101,402 87% To
Slide 13: Teekay Shipping 2003 and 2002 Fourth Quarter Net Income
Teekay Shipping 2003 and 2002 Fourth Quarter Net Income (In thousands of U.S. dollars) Three Months Ended December 31, September 31, 2003 2003 (unaudited) (unaudited) NET VOYAGE REVENUES 340,599 274,858 OPERATING EXPENSES Vessel operating expenses 57,239 55,281 Time-charter hire expense 102,274 95,9
Slide 14: Investment in TORM
Investment in TORM Market Value Unrealized gain $ $ / share July 2003 37.3 million December 31, 2003 90.2 million $ 1.26 February 25, 2004 174.3 million $ 3.26 Teekay Shipping Corporation 14
Slide 15: CAPEX Commitments
CAPEX Commitments At January 31, 2004 (in millions of U.S. dollars) Remainder 2007 & 2005 2006 Total 2004 2008 Newbuilding Installments $225 $95 $107 $123 $550 Committed Financing ($127) ($95) ($33) 0 ($255) Cash required $98 0 $74 $123 $295 Teekay Shipping Corporation 15
Slide 16: Projected 2004 Free Cash Flow Matrix
Projected 2004 Free Cash Flow Matrix TCE per day $ 18,000 $ 24,000 $ 30,000 $ 36,000 $ 42,000 $ 48,000 in millions Cash flow from vessel operations * 472 634 796 958 1,120 1,282 less: principal payments (135) (135) (135) (135) (135) (135) less: interest payments (85) (85) (85) (85) (85) (85) less: d
Slide 17: Average Aframax TCE US$ per day
Average Aframax TCE 40,000 35,000 30,000 US$ per day 25,000 20,000 15,000 10,000 5,000 0 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Source: SSY/Clarkson Teekay Shipping Corporation 17
Slide 18: 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. Cash flow from operations is included because such data is used by certain investors to measure a company's financia