Teekay Corporation Ltd. · NYSE:TK
Teekay — Q1 2008 Earnings Presentation
21 slides from Teekay's earnings presentation, May 15, 2008
Slide 1: Teekay's First Quarter 2008 Earnings Presentation
TEEKAY CORPORATION Teekay’s First Quarter 2008 Earnings Presentation May 15, 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: First Quarter Highlights
First Quarter Highlights f 1q08 operating net income* of $60.8m, or $0.83 per share f (excluding specific items which decreased net income by $45.6m, or $0.62 per share) f Generated cash flow from vessel operations* (CFVO) of $184.8m, of which $115.6m, or 63%, from fixed-rate businesses f Repurchase
Slide 4: 2008 Value Creation Strategy
2008 Value Creation Strategy 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 I
Slide 5: Executing on 2008 Strategy
Executing on 2008 Strategy TEEKAY CORPORATION Gas Tankers Offshore f Agreed to acquire 2 more f Sold 4 ex-OMI Handymax f Siri FPSO ‘first-oil’ and now Skaugen Multigas carriers Product tankers on-hire f Increased tender activity for offshore projects Teekay LNG (TGP) Teekay Tankers (TNK) Teekay Offs
Slide 6: Sum-of-the-Parts Value
Sum-of-the-Parts Value $63.44 per Share “Standalone” assets $28.96 per TK Share TGP TNK TOO/OPCO $10.55 per $4.29 per $19.64 per TK Share TK Share TK Share Current Teekay trading price of ~ $47 is a 25% discount to sum-of-parts value See appendix for detailed calculations 6 www.teekay.com 6
Slide 7: Q2 To-Date: Strongest Q2 Spot Market on Record
Q2 To-Date: Strongest Q2 Spot Market on Record f Q2-08 spot earnings guidance f Aframax – 65% of days booked at USD 38,000 / day f Suezmax – 60% of days booked at USD 62,000 / day f Current market rates well above these levels f Well timed fleet growth f OMI acquisition f ConocoPhillips Aframax tran
Slide 8: Reasons Why the Market is Strong…
3 Reasons Why the Market is Strong… f Reason #1 : Strong tanker demand growth driven by higher oil volumes and growing average transportation distances f Rising demand in China / developing Asia which accounts for ~70% of 2008 global oil demand growth. Q1-08 China’s crude imports up ~15% year on yea
Slide 9: Reasons Why the Market is Strong…
3 Reasons Why the Market is Strong… f Reason #2 : Limited 2008 tanker supply growth f Conversion sales continue across all tanker segments => Q1-08 tanker fleet growth of only 0.6% from end of 2007 f Record high scrap prices (at ~ / > USD 700 / ldt) encouraging scrap sales f Expecting slippage in de
Slide 10: Reasons Why the Market is Strong…
3 Reasons Why the Market is Strong… f Reason #3 : Operational Constraints f Increased discrimination against single-hull tankers f Infrastructure bottlenecks fLimited shore tank capacity fFloating storage fStretched repair yard availability f Temporary Factors fStrikes, weather fStockpiling in China
Slide 11: Fleet Utilization Driving Spot Rates
Fleet Utilization Driving Spot Rates Utilization Suezmax Spot Rates 80,000 94% 70,000 93% 60,000 92% Suezmax Spot Rates 50,000 91% (USD / Day) Utilization 90% = Full Fleet Utilization 40,000 90% RHS 30,000 89% 20,000 88% 10,000 87% 0 86% 2004 2005 2006 2007 Q1-08 Source : CRS / Platou 11 www.teekay.
Slide 12: Financial Discussion
TEEKAY CORPORATION Financial Discussion TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com 12
Slide 13: Segment Operating Results
Segment Operating Results (in thousands of U.S. dollars) Three Months Ended March 31, 2008 (unaudited) Offshore Fixed-Rate Liquefied Gas Segment Tanker Segment Spot Segment Total Net revenues 219,887 60,135 55,982 231,664 567,668 Vessel operating expenses 86,353 16,370 11,623 31,097 145,443 Time-cha
Slide 14: Income Statement
Income Statement Three months ended Mar. 31, 2008 Dec. 31, 2007 '000s of USD (except per share data) (unaudited) (unaudited) VOYAGE REVENUES 736,391 673,046 OPERATING EXPENSES General and administrative expenses (67,671) (60,081) Restructuring charge (1,500) - Other operating expenses (556,298) (538
Slide 15: Disaggregated Balance Sheet
Disaggregated Balance Sheet (in thousands of U.S. dollars) (unaudited) Consoli- Teekay dation Teekay Teekay Teekay Teekay Corp. Adjust- Offshore LNG Tankers Petrojarl Standalone ments Total ASSETS Cash and cash equivalents 137,791 94,593 44,477 48,210 230,602 555,673 Other current assets 104,342 23,
Slide 16: Disaggregated Income Statement
Disaggregated Income Statement (in thousands of U.S. dollars) (unaudited) Consoli- Teekay dation Teekay Teekay Teekay Teekay Corp. Adjust- Offshore LNG Tankers Petrojarl Standalone ments Total Voyage revenues 203,786 66,022 26,671 93,849 400,656 (54,593) 736,391 Voyage expenses 51,377 295 96 - 116,9
Slide 17: Q1 2008 Cash Flows to Teekay Standalone
Q1 2008 Cash Flows to Teekay Standalone $85.2m or $1.16/share 1Q08“Standalone” assets $34.1m (including Teekay Petrojarl)* $0.9m G.P. $0.3m G.P. $8.8m $23.2m $13.3m L.P. $4.6m L.P. TGP TNK TOO Q1 Dist’n Q1 Div’d Q1 Dist’n OPCO $0.53/unit $0.70/share $0.40/unit *Cash flow from vessel operations less
Slide 18: Teekay's 2008 Newbuilding Delivery Pipeline
Teekay’s 2008 Newbuilding Delivery Pipeline 2008 - Teekay Newbuilding Deliveries Suezmax LNG LPG Total 3 4 1 8 f 5 of the 8 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 for drop-down to Teekay s
Slide 19: Appendix
TEEKAY CORPORATION Appendix TEEKAY – THE MARINE MIDSTREAM COMPANY® www.teekay.com 19
Slide 20: 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 1,731.7 L.P. units outstanding 19.6 L.P. units outstanding 37.3 (per Clarkson's) Price per unit $ 21.16 Price per unit $ 30.0 Teekay Petrojarl (TPO
Slide 21: Sum-of-the-Parts Support
Sum-of-the-Parts Support All figures from 1Q08 TOO Net Debt Calculation Teekay LNG Net Debt Calculation Teekay Tankers Net Debt Calcuation Cash 137.8 Cash 94.6 Cash 44.5 Restricted Cash - current Restricted Cash - current 31.2 Restricted Cash - current - Restricted Cash - long-term Restricted Cash -