Slide 1: Teekay's Fourth Quarter and Fiscal 2007 Earnings Presentation
TEEKAY CORPORATION Teekay’s Fourth Quarter and Fiscal 2007 Earnings Presentation February 28, 2008 TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com 1
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 4q07 operating net income* of $23.0m, or $0.31 per share f (excluding specific items which decreased net income by $13.5m, or $0.18 per share) f Generated cash flow from vessel operations (CFVO) of $138.4m, of which $112.8m, or 81%, from fixed-rate businesses f Completed
Slide 4: 2007 Highlights
2007 Highlights f Earned operating net income* of $197.5m, or $2.65 per share (excluding specific items which decreased net income by $16.3m, or $0.22 per share) f Generated $622.2 m of CFVO, 73% or $457.4m from fixed-rate businesses f Generated $2.4bn of revenues f Balance sheet exceeds $10bn in as
Slide 5: Developments in Teekay's Offshore Segment
Developments in Teekay’s Offshore Segment fSiri FPSO commenced charter in February 2008 f First ever heavy-oil FPSO f Strengthens Teekay’s presence in high growth Brazilian offshore market f Well positioned for future opportunities in Brazil fExisting Teekay FPSOs: contract renewal discussions under
Slide 6: Offshore Market Update
Offshore Market Update f High oil prices are Demand for Floating Production continuing to stimulate Solutions Continues to Rise 140 offshore oil activity 130 f Increased deepwater 120 drilling sets stage for 127* High Case E xpected F P S O Orders growing FPSO (Over 5 Y ear P eriod) 110 115 environm
Slide 7: Developments in Teekay's Liquefied Gas Segment
Developments in Teekay’s Liquefied Gas Segment f Successfully grew gas segment during an otherwise quiet spell in industry f Acquired two specialized LNG vessels on charter to ConocoPhillips/Marathon Oil joint venture f First acquisition of existing LNG assets since launch of Teekay LNG f Diversifie
Slide 8: Gas Market Update
Gas Market Update f Cost increases and supply chain bottlenecks have resulted in delays in new liquefaction facilities, but fundamentals remain positive f Alternative, innovative solutions are becoming a growing part of the LNG logistics chain f Floating liquefaction – alternative solution to onshor
Slide 9: Developments in Teekay's Spot Tanker Segment
Developments in Teekay’s Spot Tanker Segment Q4 TCE per Day Suezmax Fleet $33,000 Aframax Fleet $24,200 LR 2 Product Tanker Fleet $24,400 MR Product Tanker Fleet $18,800 fOwned / in-chartered conventional fleet increased to 128 vessels from 116 vessels at the end of 3q07 (including newbuildings) fVe
Slide 10: Major Events in Conventional Tanker Business
Major Events in Conventional Tanker Business f Multi-vessel strategic transaction with ConocoPhillips f Acquired 6 double-hull Aframaxes (2 owned, 4 bareboat chartered-in) f 2 Aframaxes chartered back to ConocoPhillips for 5 years f 1 VLCC and 2 MR product tankers also chartered to ConocoPhillips, f
Slide 11: 2008 Tanker Demand Fundamentals Remain Positive
2008 Tanker Demand Fundamentals Remain Positive f IMF estimates 4.1% global GDP growth for 2008 f Growth expected to be led by energy-intensive developing countries f IEA estimates global oil demand growth of 1.7 mb/d (1.9%) in 2008 f 1.4 mb/d growth from non-OECD countries f Non-OPEC supply estimat
Slide 12: 2008 Tanker Supply – Removals Expected to Dampen Growth
2008 Tanker Supply – Removals Expected to Dampen Growth (number of vessels) End 2007 Fleet 2008 Deliveries Sold For Conversion* / Scrap Net Fleet Growth VLCC 502 39 26 13 (3%) Suezmax 314 21 12 9 (3%) Aframax 726 75 40 35 (5%) Source : CRS / Industry Sources (*Includes tankers sold for conversion an
Slide 13: Financial Discussion
Financial Discussion TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com 13
Slide 14: Segment Operating Results
Segment Operating Results (in thousands of U.S. dollars) Three Months Ended December 31, 2007 (unaudited) Offshore Fixed-Rate Liquefied Gas Segment Tanker Segment Spot Segment Total Net revenues 224,824 53,554 47,991 187,762 514,131 Vessel operating expenses 87,712 14,661 7,844 28,026 138,243 Time-c
Slide 15: Summary Income Statement
Summary Income Statement Three months ended Dec. 31, 2007 Dec. 31, 2006 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 673,046 586,990 OPERATING EXPENSES General and administrative expenses (60,081) (56,377) Restructuring charge - (1,515) Other operating expenses (538,7
Slide 16: Summary Balance Sheet
Summary Balance Sheet As at Dec. 31, As at Sept. 30, In 000s of USD 2007 2007 (unaudited) (unaudited) ASSETS Cash and cash equivalents 442,673 296,637 Other current assets 428,190 415,061 Total restricted cash 686,196 716,487 Other assets 1,011,306 859,138 Vessels and equipment 6,180,180 6,085,605 A
Slide 17: Teekay's Platform is Complete
Teekay’s Platform is Complete f Teekay’s gas franchise TEEKAY LNG PARTNERS L.P f 10 – 25 year fixed rate contracts f 10% annual distribution growth target f Teekay’s offshore franchise TEEKAY OFFSHORE PARTNERS L.P. f 3 – 10 year fixed rate contracts f 15% annual distribution growth target f Teekay’s
Slide 18: Teekay's 2008 Newbuilding Delivery Pipeline
Teekay’s 2008 Newbuilding Delivery Pipeline 2008 - Teekay Newbuilding Deliveries Lightering Aframax Suezmax LNG LPG Total 2 4 5 1 12 f 8 of the 12 ships delivering in 2008 are backed by long-term charters f Continued growth in medium-size spot tanker fleet f All of these newbuildings are suitable fo
Slide 19: Sum-of-the-Parts Value
Sum-of-the-Parts Value $69.04 per Share “Standalone” assets $31.56 per TK Share TGP TNK TOO/OPCO $10.60 per $3.32 per $23.57 per TK Share TK Share TK Share Current Teekay trading price of ~ $46 is a 33% discount to sum-of-parts value See appendix for detailed calculations 19 www.teekay.com 19
Slide 20: 2008 Strategy to Create Value
2008 Strategy to Create Value f Execute on strategy of growing each of our subsidiaries accretively through drop-downs of existing and future assets from Teekay Corp and third party asset acquisitions Increased GP / TNK Increased LP Unit / TNK Performance Fee + Share Value = Increased Free Cash and
Slide 21: Appendix
Appendix TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com 21
Slide 22: Non-GAAP Financial Measure
Non-GAAP Financial Measure For the 3 months ended December 31, 2007 $(000s) $ per share Net Income as reported 9,476 0.13 Items listed in Appendix A in the Company’s Earning’s Release 13,489 0.18 Operating Net Income 22,965 0.31 For the year ended December 31, 2007 $(000s) $ per share Net Income as
Slide 23: Capex
Capex Capex by Segment (in millions) 2008 2009 2010 2011 2012 Total Offshore Segment $42 $23 $231 $163 - $459 Fixed-Rate Tanker Segment 59 - - - - 59 Liquefied Gas Segment 187 113 37 157 45 539 Spot Tanker Segment 327 207 - - - 534 Total $615 $343 $268 $320 $45 $1,591 Company’s remaining capital com
Slide 24: Sum-of-the-Parts Support
Sum-of-the-Parts Support Teekay Offshore Partners and OPCO Teekay LNG Partners Teekay Standalone in (millions) TOO TGP FMV of owned 'on-the-water' fleet 2,132.8 L.P. units outstanding 19.6 L.P. units outstanding 37.3 (per Clarkson's) Price per unit $ 25.74 Teekay Petrojarl (TPO) Ent. Value 1,123.9 P
Slide 25: Sum-of-the-Parts Support
Sum-of-the-Parts Support Consolidated Teekay Net Debt Calculation OPCO Net Debt Calculation Teekay LNG Net Debt Calculation Cash 442.7 Cash 121.2 Cash 91.9 Restricted Cash - current 33.5 Restricted Cash - current Restricted Cash - current 26.7 Restricted Cash - long-term 652.7 Restricted Cash - long