Teekay Tankers Ltd. · NYSE:TNK
Teekay Tankers — Q4 2018 Earnings Presentation
20 slides from Teekay Tankers's earnings presentation, Feb 21, 2019
Slide 1: Teekay Tankers Q4 2018 Earnings Presentation
Teekay Tankers Q4 2018 Earnings Presentation February 21, 2019
Slide 2: Forward Looking Statement
Forward Looking Statement 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, among other things, statements reg
Slide 3: Recent Highlights
Recent Highlights Q4-18 Results Financing Initiatives Charters Total cash flow from vessel Completed two previously- Chartered-in 2.5 Aframax / operations(1) of $62.3 million, up announced financings LR2 vessels for periods from $27.8 million in Q3-18 amounting to approximately ranging 1 to 2 years
Slide 4: Tanker Rates At 3-Yr Highs in Q4-2018
Tanker Rates At 3-Yr Aframax Spot Rates Suezmax Spot Rates Highs in Q4-2018 5-year range 5-year avg. 5-year range 5-year avg. 55,000 55,000 Seasonal upturn 2018 2019 2018 2019 underpinned by a structural 50,000 50,000 shift in fundamentals 45,000 45,000 40,000 40,000 35,000 35,000 USD / Day USD / Da
Slide 5: OPEC Crude Oil Production
33.5 OPEC Crude Oil Production OPEC Supply Cuts a 33.0 Million Barrels per Day Headwind in 1H-2019… 32.5 …but oil markets are well 32.0 balanced, meaning OPEC cuts 31.5 should not be long-lasting 31.0 OPEC production target (1.2 mb/d below Oct’18 base levels) • OPEC is aggressively cutting 30.5 prod
Slide 6: Strong Non-OPEC US Crude Oil Production Growth in 2019
Strong Non-OPEC 14 US Crude Oil Production Growth in 2019, led by Million Barrels per Day 12 the US 10 Increase in US crude 8 exports is positive for mid- 6 size tanker and US Gulf 4 lightering demand 2 US production at record high: 0 11.0 mb/d (2018); growing to 2008 2009 2010 2011 2012 2013 2014 2
Slide 7: Tanker Fleet Utilization Forecast
Tanker Fleet Tanker Fleet Utilization Forecast Utilization Forecast Demand Supply Fleet Utilization 12% 94% Strong demand growth in 2019-20 to propel fleet 92% utilization 10% • Global tanker fleet expected % Supply / Demand Growth to grow by 3.5% in 2019 and 90% % Fleet Utilization by 2% in 2020 8%
Slide 8: Q1-19 Spot Earnings Update
Q1-19 Spot Earnings 30,000 $28,500 Update $26,000 $24,500 $23,600 $21,100 $19,800 20,000 10,000 - Suezmax Aframax LR2 Q4-18 Actual Q1-19 to-date Suezmax Aframax LR2 Q1-19 spot ship 2,372 1,730 823 days available Q1-19 % booked 70% 68% 51% to-date (1) Combined average spot TCE rate including Teekay S
Slide 9: Appendix
Appendix 9
Slide 10: TNK Offers Significant FCF Per Share Upside in Tanker Market Recovery
TNK Offers Significant FCF1 Per Share Spot Rate Sensitivity2 Upside in Tanker Market Recovery $1.50 Mid-cycle rates3,5 $1.00 $ Per Share per annum Q1-19 to-date3,4 Q4-183 $0.50 $0.00 10,000 15,000 20,000 25,000 30,000 35,000 Average Mid-Sized TCE3 (1) Free cash flow (FCF) represents net income, plus
Slide 11: Debt Repayment Profile
Dept Repayment Profile $520 $480 $12 $440 $27 $400 $12 $360 $ Millions $320 $280 $240 $200 $401 $160 $12 $12 $120 $23 $25 $4 $80 $29 $102 $102 $5 $40 $53 $32 $- 2019 2020 2021 2022 2023 Balloon Payments Repayments (Loans) Capital Leases Revolver Amort (1) Pro-forma debt repayment profile as at Decem
Slide 12: Total Tanker Fleet Growth Below Average
Total Tanker Fleet Growth 50 10.0% Below Average Fleet 7.6% 40 8.0% Growth 2019 / 2020 30 3.9% 5.8% 6.0% 4.8% 6.0% 3.8% 3.2% 3.5% Aging fleet will keep tanker 20 1.8% 4.0% Million DWT 1.7% scrapping elevated over the 10 1.3% 1.1% 2.0% next five years 0 0.0% Fleet growth: -10 -2.0% • Focused on VLCCs
Slide 13: Fleet Employment – In Charter
500 Fleet Employment – In 450 Charter 400 Ship Days 350 300 250 200 150 100 50 - Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Aframax/LR2 Days 416 455 460 386 273 273 276 276 91 - - Aframax/LR2 Rates 18,877 19,000 19,000 19,856 21,250 21,250 21,250 21,250 2
Slide 14: Fleet Employment – Out-Charters
300 Fleet Employment – Out-Charters1 250 Ship Days 200 150 100 50 - Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Suezmax Days 2 171 173 49 - - - - - - - - Aframax/LR2 Days 171 149 138 118 46 46 46 46 8 - - Suezmax Rates 22,237 22,237 20,415 - - - - - - - -
Slide 15: Q1-2019 Outlook
Q1-2019 Outlook Income Statement Item Q1-19 Outlook (expected changes from Q4-18) Increase of approximately 50 net revenue days in TNK, mainly due to the timing of in-chartered vessels that were delivered to us in Q1-19 and in Q4-18, partially offset by fewer calendar days in Q1-19 compared Revenues
Slide 16: Adjusted Net Income (Loss)
Adjusted Net Income (In thousands of U.S. dollars) (Loss) Q4-2018 Q3-2018 Statem ent Item Variance Com m ents (unaudited) (unaudited) Q4-2018 vs Q3-2018 Increase primarily due to higher spot TCE rates and improved results from our lightering operations in Q4- Revenues 239,997 175,796 64,201 18 compa
Slide 17: Consolidated Adjusted Statement of Income Q4-2018
Consolidated Adjusted Statement of (In thousands of U.S. dollars) Income Q4-2018 (1) Please refer to Appendix A in Teekay Tankers Q4-18 Earnings Release for a description of Appendix A items. 17
Slide 18: Consolidated Adjusted Statement of Income (Loss) Q3-2018
Consolidated Adjusted Statement of (In thousands of U.S. dollars) Income (Loss) Q3-2018 (1) Please refer to Appendix A in Teekay Tankers Q3-18 Earnings Release for a description of Appendix A items. 18
Slide 19: Drydock & Off-hire Schedule
Drydock & Off-hire Schedule Teekay Tankers March 31, 2019 (E) June 30, 2019 (E) September 30, 2019 (E) December 31, 2019 (E) Total 2019 Total Total Total Total Total Vessels Off-hire Vessels Off-hire Vessels Off-hire Vessels Off-hire Vessels Off-hire Segment Days Days Days Days Days Spot Tanker 4 12
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