Teekay Corporation Ltd. · NYSE:TK
Teekay — Pareto Securities Shipping Conference 2009
24 slides from Teekay's conference presentation, December 2009
Slide 1: Teekay Corporation Pareto Securities Shipping Conference
TEEKAY CORPORATION Pareto Securities Shipping Conference December 2009 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: tanker marke
Slide 3: Investment Highlights
Investment Highlights f Over 40% of Teekay’s value not yet reflected in current stock price f Management is executing on its plan to narrow the value gap by: f Actively managing our asset portfolio f Improving profitability of our existing businesses f Further enhancing our financial strength f Prov
Slide 4: Teekay Corporation
Teekay Corporation f Founded 1973 by the late Torben Karlshoej f Transnational company with 6,700 employees f Transporter of more than 10% of the world’s seaborne oil f World’s largest operator of shuttle tankers and mid-size oil tankers f Third largest independent LNG ship owner f Leader in harsh w
Slide 5: Teekay Creates Value through Active Asset Management
Teekay Creates Value through Active Asset Management f Track record of: f Buying and building valuable franchises f Managing the cycle f Realizing value through well-timed asset sales Acquired Acquired Acquired Navion Tapias Acquired Acquired OMI Kenai Shuttle LNG Carrier Petrojarl FPSO Suezmax LNG
Slide 6: From Reservoir to Refinery
From Reservoir to Refinery 5 Floating, Production Storage & Offtake Units (FPSO) 39 Shuttle Tankers 10 Product 25 Gas Tankers 6 Floating Storage 76 Crude Oil Tankers & Offloading Units Tankers* *Excludes commercially managed vessels. 6 www.teekay.com
Slide 7: Growing Stable Cash Flows
Growing Stable Cash Flows f Teekay has diversified its cash flow streams beyond cyclical spot tanker markets Historical Cash Flow $1,200 $1,000 $800 Teekay Corp. 1H’09 (annualized): over ($ millions) $500m of fixed-rate $600 CFVO $400 $200 $- 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20
Slide 8: Majority of Cash Flows Insulated from Volatile Spot Markets
Majority of Teekay’s Cash Flows Are Insulated from Volatile Spot Markets Fixed-Rate CFVO (1) Spot CFVO $80 $60 Quarterly CFVO ($Millions) $40 $20 $0 -$20 Annualized Fixed-rate -$40 CFVO >$550m -$60 Teekay Teekay Teekay Teekay Teekay Teekay LNG Offshore Tankers Parent Tankers Parent Q1 '09 Q2 '09 Q3
Slide 9: Financial Market Profile
Financial Market Profile TEEKAY CORPORATION NYSE: TK f Market Cap: $1.7bn* f Supportive sponsor of its ‘daughters’ f ~$2.8bn of assets suitable to sell to appropriate daughter company 49.6% Ownership** 40.5% Ownership (incl. 2% GP interest) (incl. 2% GP interest) 42.19% Ownership TEEKAY LNG TEEKAY O
Slide 10: 2010 Global Tanker Fleet Utilization Factors
2010 Global Tanker Fleet Utilization Factors 92% 2009 2010 2010 92% Base Recovery Case 90% “Full” Fleet Case 90% Utilization +1% +1.5% +0.5% Fleet Utilization Fleet Utilization 88% 88% +1.5% 86% 86% +1.5% 84% 84% 83% 83% Upside Potential + 6% 82% 82% 80% 80% 2009 (E) 2010 (E) (1) Stronger (2) Increa
Slide 11: Tanker Rates Closely Linked to Fleet Utilization
Tanker Rates Closely Linked to Fleet Utilization Tanker Fleet Utilization Suezmax Spot Earnings Base Case Utilization Recovery Case Utilization 100,000 96% 94% LHS “Full” Fleet Utilization 80,000 92% 90% Fleet Utilization 60,000 88% USD / Day 86% 40,000 84% 82% RHS 20,000 80% 78% 0 76% Q4-09* Q1-07
Slide 12: Maintaining Our Focus on Realizing Value
Maintaining Our Focus on Realizing Value 9 Actively managing asset portfolio 9 Improving profitability 9 De-leveraging at Teekay Parent 12 www.teekay.com
Slide 13: Actively Managing Asset Portfolio – Reducing Spot Exposure
Actively Managing Asset Portfolio – Reducing Spot Exposure f Over $60m reduction in quarterly time-charter hire expense between Q3 ’08 and Q3 ’09 f 24 in-chartered vessels redelivered over the last four quarters f Further reduction in spot market exposure as 6 additional in-charters roll-off in Q4 ‘
Slide 14: Improving Profitability
Improving Profitability f Value enhancement is not dependent on growth f Teekay Parent expects to earn more from existing assets f Renegotiating FPSO contracts at higher rates f Reducing G&A and OPEX – Annualized savings of $96m or $1.32 achieved in the past year f Divesting non-core, less profitabl
Slide 15: Cash Flow Break-Even Declining Below Operating Cost
Cash Flow Break-Even Declining Below Operating Cost f Due to: f Roll-off of in-chartered vessels f Additional out-charters f Renewal of below market contracts at market rates f Reduced G&A expenses f Reduced operating expenses Aframax Spot Cash Flow Break Even Rate* Cash flow sensitivity per $1,000
Slide 16: De-Leveraging is a Top Priority
De-Leveraging is a Top Priority f De-leveraging the Teekay Parent will position the Company for future growth and/or return of cash to shareholders Sources Uses Cash Flow from Operations De-leveraging / Building Dropdowns to Liquidity Daughter Companies Asset sales / New Sale-leasebacks Growth CAPEX
Slide 17: Teekay Parent Net Debt Reducing Due to Dropdowns and Vessel Sales
Teekay Parent Net Debt Reducing Due to Dropdowns and Vessel Sales Teekay Parent Asset Dropdowns / Transaction Date Net Debt Reduction Third Party Sales (USD Millions) Aframax tanker and MR product tanker Third Party Nov ’09 $21m (Patriot Spirit and Barrington) Sale Dropdown to FPSO Teekay Offshore S
Slide 18: Significant Debt Reduction Achieved at Teekay Parent
Significant Debt Reduction Achieved at Teekay Parent f Since September 30, 2008: f Teekay Parent net debt has been reduced by over $460m(1) – net debt to total capitalization of 28%(1) as at September 30, 2009 f Remaining newbuilding capital commitments have declined by almost $350m Teekay Parent Ne
Slide 19: Capital Markets Are Open to Teekay
Capital Markets Are Open to Teekay f Teekay has been actively negotiating new debt financing and extensions on existing facilities Almost $1.2b in transactions f Proceeds from daughter company equity issuance used completed in to finance dropdown transactions from Teekay Parent 2009 YTD Commercial D
Slide 20: Teekay Remains Financially Strong
Teekay Remains Financially Strong f Over $2.0b(1) of consolidated liquidity at September 30, 2009 f No significant balloon payments until 2011 f No debt covenant concerns f Less than 5% of consolidated total debt tied to hull values f Additional credit facilities are in place for 98% of future newbu
Slide 21: Majority of Consolidated Debt is Non-Recourse to Teekay Parent
Majority of Consolidated Debt is Non-Recourse to Teekay Parent f Of Teekay’s Consolidated $4.2bn net debt at September 30, 2009, $3.4bn is non-recourse to Teekay Parent Teekay Consolidated Teekay Parent Total Debt 5,343 Cash (495) Total Debt* 1,094 Restricted Cash (653) Cash (248) Restricted Cash (2
Slide 22: Teekay Asset Value Summary
Teekay Asset Value Summary Teekay is trading at 43% of its NAV ($ millions) (per share) Conventional Tanker Assets $1,209 FPSO Assets $796 Newbuildings(1) $196 FMV of Teekay Parent Fleet $2,201 Less: Teekay Parent Net Debt(2) ($844) NAV of Teekay Parent Fleet $1,357 $18.71 Plus: Value of Daughter Cu
Slide 23: Benefiting from Our Unique Business Model
Benefiting from Our Unique Business Model Current Teekay’s Typical Shipping Position Company Concerns f Diversified business mix includes FPSOs, FSOs, shuttle tankers, LNG carriers, fixed- rate conventional tankers and spot Business Mix f Spot conventional tanker focus conventional tankers f $12b of
Slide 24: Investment Highlights
Investment Highlights f Over 40% of Teekay’s value not yet reflected in current stock price f Management is executing on its plan to narrow the value gap by: f Actively managing our asset portfolio f Improving profitability of our existing businesses f Further enhancing our financial strength f Prov