Teekay Corporation Ltd. · NYSE:TK
Teekay — Teekay Shipping — Merger or Acquisition (April 2007)
16 slides from Teekay's merger presentation, April 2007
Slide 1: Acquisition of OMI Corporation
TEEKAY SHIPPING CORPORATION Acquisition of OMI Corporation Investor Presentation April 2007 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 closing
Slide 3: The Transaction
The Transaction f Teekay and Torm will jointly acquire OMI Corporation for $29.25 per share in cash f Teekay’s effective price reduced by $0.33 per share from pre-existing shareholdings f Total enterprise value of $2.2bn, Teekay’s share is $1.1bn f Teekay’s 50% share includes: f 7 owned Suezmaxes f
Slide 4: Investment Highlights
Investment Highlights f Addition of OMI franchise positions Teekay as the clear market leader in medium sized crude tankers f Allows us to provide broader, more flexible services to customers f Reduces average age of Teekay’s modern double-hull fleet f Acquisition expected to create significant syne
Slide 5: OMI Vessels to be Acquired by Teekay
OMI Vessels to be Acquired by Teekay Charter-in Charter-out No. Vessel Name Ownership Yard DWT Hull Year Built Current Age Expiry Expiry* 2007 SUEZMAX 1 ANGELICA 100% Jun-09 Hyundai 159,106 DH 2004 3.0 2 JANET 100% Jun-09 Hyundai 149,985 DH 2004 3.0 3 ADAIR 100% Sep-09 Hyundai 159,199 DH 2003 4.0 4
Slide 6: Strategic Rationale - Suezmaxes
Strategic Rationale - Suezmaxes f Immediately expands Suezmax footprint to 33 vessels in addition to Teekay’s existing orderbook of 10 Suezmax newbuildings f Complements Teekay’s Aframax franchise with synergies between the two segments f Enhances flexibility to undertake volume contracts in additio
Slide 7: Clear Market Leader in Medium Sized Crude Tankers
Clear Market Leader in Medium Sized Crude Tankers # of Aframax and Suezmax Tankers 100 90 Existing Newbuildings on Order 80 70 No. of Ships 60 50 40 30 20 10 0 Sovcomflot Tanker Pacific Teekay/OMI * Aframax Intl Frontline Dynacom MISC Tsakos Novo. + Source : Company Websites / CRS *Proforma Teekay a
Slide 8: Suezmax Tanker Rates
Suezmax Tanker Rates 2005 2006 2007 ytd 100,000 75,000 US $ / Day 50,000 25,000 Averages 2005: US$ 53,967 / day 2006: US$ 53,464 / day 2007 ytd: US$ 54,434 / day 0 Q1 Q2 Q3 Q4 Source : CRS (Suezmax average) 8 www.teekay.com
Slide 9: Suezmax Market Fundamentals
Suezmax Market Fundamentals Demand f Rising production from key Suezmax load points: FSU, West Africa, North Africa and Brazil f Gradual transition to Suezmaxes on some trade routes f Growing Atlantic to Asia crude oil trades fSuezmaxes benefit from rising distances from longer haul nature of trades
Slide 10: Strategic Rationale - Product Tankers
Strategic Rationale – Product Tankers f Enhances our existing medium sized product tanker presence, establishing a core owned fleet. f Core fleet provides opportunity to leverage Teekay’s competence in freight trading and intensive scheduling across customer network f Global refinery and port constr
Slide 11: MR Tanker Rates
MR Tanker Rates 2005 2006 2007 ytd 50,000 40,000 US $ / Day 30,000 20,000 Averages 2005: US$ 27,247 / day 2006: US$ 25,466 / day 2007ytd: US$ 35,127 / day 10,000 Q1 Q2 Q3 Q4 Source : CRS (MR average) 11 www.teekay.com
Slide 12: Product Tanker Market Fundamentals
Product Tanker Market Fundamentals Demand f Product tanker demand growing faster than crude f Increasing long haul trade volumes fMajority of refinery capacity growth in Middle East / Asia fIncreasing US and European product imports from long haul sources f US product imports up from 2.1 mb/d in 200
Slide 13: Planned Launch of "Teekay Tankers"
Planned Launch of “Teekay Tankers” f Plan to create a new publicly-traded entity that will initially own a portion of Teekay’s conventional tanker fleet f OMI assets represent additional growth opportunity f “Pure-play” tanker company expected to provide currency to grow conventional tanker franchis
Slide 14: Acquisition is 10% Accretive to 2008 Earnings
Acquisition is 10% Accretive to 2008 Earnings Teekay1 Teekay2 $ Change % Change (Pre-Acquisition) (Post-Acquisition) Net Income (millions) $337 $371 $34 10.0% CFVO3 (millions) $800 $945 $145 18.1% EPS $4.50 $4.95 $0.45 10.0% Net Debt4 to CFVO3 3.4x 4.0x Liquidity (billions) $2.1 $1.7 1 Estimate base
Slide 15: Appendix
TEEKAY SHIPPING CORPORATION Appendix www.teekay.com
Slide 16: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (millions) Teekay (Pre- Teekay (Post- Acquisition) Acquisition) Net Income $337 $371 Depreciation & Amortization $325 $371 Interest Expense $138 $203 CFVO* $800 $945 * Cash flow from vessel operations represents net income before depreciation and amortiz