TEEKAY S Q EARNINGS PRESENTATION

Transcription

1 TEEKAY S Q EARNINGS PRESENTATION May 17, 2018

2 Frward Lking Statements This presentatin cntains frward-lking statements (as defined in Sectin 21E f the Securities Exchange Act f 1934, as amended) which reflect management s current views with respect t certain future events and perfrmance, including: the benefit t the Cmpany s future financial results and balance sheet frm the delivery f the remaining ffshre and LNG prjects ver the next few years; LNG, ffshre and crude il tanker market fundamentals, including demand fr ur services; the ability f the Cmpany s businesses t benefit frm the recvery f such markets; the cash flw impact frm Teekay Parent s FPSOs, including the impact n the Cmpany s balance sheet; the ptential sale f its FPSO units by Teekay Parent; the timing and cst f delivery and start-up f varius newbuildings and cnversin/upgrade prjects and the cmmencement f related cntracts; ptential tax indemnificatin liabilities relating t the Teekay Nakilat Jint Venture; the impact f Teekay Tankers expected sale-leaseback financing transactin n its liquidity and future debt maturity prfile; the expected cash flw frm vessel peratins relating t the emplyment f the Petrjarl I FPSO unit n the Atlanta field; the expected duratin f the mbilizatin and field installatin services t be perfrmed by the ALP Maritime vessels fr the Kamb Nrte FPSO; and the pssibility f liquidated damages relating t prject delays assciated with Petrjarl I FPSO unit. The fllwing factrs are amng thse that culd cause actual results t differ materially frm the frward-lking statements, which invlve risks and uncertainties, and that shuld be cnsidered in evaluating any such statement: changes in explratin, prductin and strage f ffshre il and gas, either generally r in particular regins that wuld impact expected future grwth, particularly in r related t Nrth Sea, Brazil and East Cast f Canada ffshre fields; changes in the demand fr il, refined prducts, LNG r LPG; changes in trading patterns significantly affecting verall vessel tnnage requirements; greater r less than anticipated levels f vessel newbuilding rders and deliveries and greater r less than anticipated rates f vessel scrapping; changes in glbal il prices; issues with vessel peratins; variatins in expected levels f field maintenance; increased perating expenses; ptential prject delays r cancellatins; vessel cnversin and upgrade delays, newbuilding r cnversin specificatin changes, cst verruns, r shipyard disputes; changes in applicable industry laws and regulatins and the timing f implementatin f new laws and regulatins; the ptential fr early terminatin f lng-term cntracts f existing vessels; delays in the cmmencement f charter r ther cntracts; the ability t fund remaining capital cmmitments and debt maturities; the Daughter Entities ability t secure r draw n financings fr its vessels; the result f discussins and any negtiatins relating t the ptential sale f FPSO units by Teekay Parent; the effects n the Teekay Nakilat Jint Venture f decisin n tax indemnificatin liabilities and determinatins f the lessr under the RasGas II LNG carrier leases; and ther factrs discussed in Teekay s filings frm time t time with the SEC, including its Reprt n Frm 20-F fr the fiscal year ended December 31, Teekay expressly disclaims any bligatin r undertaking t release publicly any updates r revisins t any frward-lking statements cntained herein t reflect any change in Teekay s expectatins with respect theret r any change in events, cnditins r circumstances n which any such statement is based. 2

3 Q1-18 Results Teekay Crpratin Cnslidated Q1-18 cnslidated ttal CFVO (1) f $168.4 millin Q1-18 cnslidated adjusted net lss (1) f $18.3 millin, r $0.19 per share Teekay Parent Q1-18 adjusted CFVO (1) f $13.2 millin Ttal liquidity f apprximately $480 millin as f March 31, 2018 (1) Cash flw frm vessel peratins (CFVO). These are nn-gaap financial measures. Adjusted CFVO is Ttal Teekay Parent Free Cash Flw plus Teekay Parent Net Interest Expense. Please see Teekay Crpratin s Q1-18 release fr definitins and recnciliatins t the cmparable GAAP measures. 3

4 Teekay LNG Partners ( TGP ) Recent Highlights Generated Q1-18 ttal CFVO (1) f $117.6 millin and DCF (1) f $35.3 millin, r $0.44 per cmmn unit Existing Grwth Prjects Prject Year-t-date, tk delivery f 4 LNG carrier newbuildings, all n lng-term charters, and ne midsized LPG carrier newbuilding Re-chartering activities: 7 MEGI LNG Carriers (100%) Shell (ex. BG) LNG Carriers (20-30%) 5 vessels with 6 8 year cntracts, plus extensin ptins, with Shell, 1 vessel with 13-year cntract with BP, and 1 vessel with 15-year cntract with Yamal LNG 20-year cntracts, plus extensin ptins Secured cntracts time charters fr the Arctic Spirit and Plar Spirit LNG carriers fr 4 years and 1 year, respectively Yamal LNG ARC 7 Carriers (50%) Charter cntracts thrugh t 2045, plus extensin ptins Extended charter fr the Trben Spirit MEGI LNG carrier until December 2018 Exmar LPG Carriers (50%) Refinanced a $58 millin 2018 lan maturity with new $90 millin 6-year facility Bahrain Regas Terminal (30%) and FSU (100%) 20-year FSU and terminal cntracts Cntinued executin n prtfli f grwth prjects delivering thrugh early-2020 Shrt-term charters Charter cntract Annual CFVO (2) attributable t TGP is expected t grw by ~$310 millin per annum (3) with delivery f grwth prjects, which is expected t naturally de-lever balance sheet (1) Distributable Cash Flw (DCF) and Cash flw frm vessel peratins (CFVO). These are nn-gaap financial measures. Please see Teekay LNG s Q1-18 earnings release fr definitins and recnciliatins t the cmparable GAAP measures. (2) Management did nt prepare a recnciliatin t the cmparable GAAP measure because infrmatin t prvide such a frward-lking estimate is nt available withut unreasnable effrt. (3) Annualized incremental CFVO as f Octber 1, 2017, based n management estimates and assuming full delivery f vessels / grwth prjects. 4

5 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Millin USD $ Per Share Teekay Tankers ( TNK ) Generated Q1-18 ttal CFVO (1) f $22.3 millin and adjusted net lss (1) f $22.0 millin, r $0.08 per share FCF Per Share Spt Rate Sensitivity 2 $2.50 $2.00 $1.50 Practive steps t strengthen financial psitin: $1.00 $0.50 Mid-cycle rates 4 Term sheet signed fr sale lease-back financing f 7 midsize tankers. Expected t increase liquidity by $36 millin. Eliminated minimum quarterly dividend f $0.03 per share (retained liquidity f $32 millin per annum). Variable prtin f dividend plicy linked t earnings remains intact, prviding dividend participatin in tanker market recvery Pr frma liquidity fr sale-leaseback transactin f $137 millin as f March 31, 2018 Significant upside t cash flw and net asset value when tanker market strengthens even at mid-cycle levels (1) These are nn-gaap financial measures. Please see Teekay Tankers Q1-18 earnings release fr definitins and recnciliatins t the cmparable GAAP measures. (2) Free cash flw (FCF). represents net incme, plus depreciatin and amrtizatin, unrealized lsses frm derivatives, nn-cash items, FCF frm equity accunted investments and any write-ffs r ther nn-recurring items, less unrealized gains frm derivatives and ther nn-cash items. Graph is illustrative and based n assumptins as t number f utstanding shares and factrs relating t FCF. (3) Fr 12 mnths ended Q1-19 (4) Aframax equivalent TCE: Suezmax = 1.30x, LR2 = 1.00x $ ,000 15,000 20,000 25,000 30,000 35,000 Afra Equivalent TCE 3 Suezmax Asset Prices NB Price NB Average 5yr Price 5yr Average 5

6 Teekay Offshre Partners ( TOO ) Recent Highlights Generated Q1-18 ttal CFVO (1) f $161.5 millin and DCF (1) f $39.4 millin, r $0.10 per cmmn unit Existing Grwth Prjects Prject Randgrid FSO (cnversin) Statil Firm perid ut t 2020 Optins ut t 2032 Grwth prjects supprting $200 millin f cash flw grwth nw fully-delivered: Libra FPSO (50%) (cnversin) Petrbras / Ttal / Shell / CNPC / CNOOC Out t 2029 Third East Cast Canada shuttle tanker newbuilding cmmenced lng-term charter cntract in May East Cast Canada Shuttle Tankers Firm perid ut t 2030 Optins ut t 2035 Petrjarl I FPSO n-cntract in May ALP Twage Newbuildings Cmpleted previusly-annunced cntract extensin n the Vyageur Spirit FPSO t April 2019 Ttal liquidity f $351 millin as at March 31, 2018 Petrjarl I FPSO (upgrade) Nrth Sea Shuttle Tankers Shrt-term charters QGEP Out t 2023 Charter cntract Annual CFVO (2) attributable t TOO prjects that have delivered since September 2017 ttals apprx. $200 millin per annum (3), which is expected t naturally de-lever balance sheet (1) Distributable Cash Flw (DCF) and Cash flw frm vessel peratins (CFVO). These are nn-gaap financial measures. Please see Teekay Offshre s Q1-18 earnings release fr definitins and recnciliatins t the cmparable GAAP measures. (2) Management did nt prepare a recnciliatin t the cmparable GAAP measure because infrmatin t prvide such a frward-lking estimate is nt available withut unreasnable effrt. (3) Annualized incremental CFVO as f Octber 1, 2017, based n management estimates and assuming full delivery f vessels / grwth prjects. 6

7 Adj. CFVO Teekay Parent at an Inflectin Pint Teekay Parent s Grwing Adjusted CFVO¹ ($ millins) $20 $15 $10 $5 $0 -$5 -$10 Finaven FPSO prductin bnus (2) Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Grwing adjusted CFVO frm new recent cntracts n Banff and Hummingbird Spirit FPSO units linked t prductin and il prices Cash flws expected t further imprve n the back f new FPSO cntracts, redelivery f inchartered LNG / crude tankers, and ptential distributin/dividend increases Teekay Parent Fcused n Further Reducing Leverage ($ millins) Net Debt (1) $700 $600 $500 $400 $300 $200 $100 $- Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Cmpleted net $214m f capital issuances in mid- January 2018 De-levers TKC s balance sheet and increases flexibility and ptinality Further de-levering frm the grwing adjusted CFVO f Teekay Parent s FPSOs and the ptential sale f the FPSOs given the strnger energy market. (1) Nn-GAAP financial measures: Net debt is based n Teekay Parent s ttal debt less cash and cash equivalents and restricted cash; and Teekay Parent Adjusted CFVO is Ttal Teekay Parent Free Cash Flw plus Teekay Parent Net Interest Expense. Please see ur respective earnings releases fr the nn- GAAP definitins and recnciliatins. (2) As a result f the adptin f the new revenue accunting standard in Q1-18, $2 millin f additinal annual incentive revenue relating t the Finaven FPSO has been recgnized in Q1-18, which was histrically recgnized in the furth quarter f each year. 7

8 Psitining fr Energy Market Recvery In the early innings 8

9 Appendix 9

10 Cnslidated Adjusted Incme Statement Q1-18 (in thusands f US dllars, except per share amunts) Three Mnths Ended March 31, 2018 Reclass fr Realized Gains/ Appendix A Lsses As Reprted Items (1) n Derivatives (2) As Adjusted Revenues 394, ,022 Vyage expenses (85,877) - - (85,877) Net revenues 308, ,145 Vessel perating expenses (157,935) - - (157,935) Time charter hire expenses (19,411) - - (19,411) Depreciatin and amrtizatin (67,311) - - (67,311) General and administrative expenses (24,183) - - (24,183) Asset impairments (13,000) 13, Lss n sale f vessels, equipment and ther perating assets (5,662) 5, Restructuring charges (2,138) 2, Incme frm vessel peratins 18,505 20,800-39,305 Interest expense (54,625) (740) (6,193) (61,558) Interest incme 1, ,677 Realized and unrealized gains n derivative instruments 9,426 (14,235) 4,809 - Equity incme 27,117 (17,945) - 9,172 Incme tax expense (4,117) 1,389 - (2,728) Freign exchange gain 22 (1,406) 1,384 - Lss n decnslidatin f Teekay Offshre (7,070) 7, Other - net (915) (2) Net Lss (9,980) (4,154) - (14,134) Less: Net incme attributable t nn-cntrlling interests (10,575) 6,385 - (4,190) NET LOSS ATTRIBUTABLE TO STOCKHOLDERS OF TEEKAY CORP. (20,555) 2,231 - (18,324) Basic lss per share (0.21) (0.19) The abve prvides a Nrmalized Incme Statement by adjusting fr the fllwing: (1) remval f Appendix A items as dcumented in the Earnings Release (2) putting the realized gains/lsses t their respective line as if hedge accunting had applied 10

11 Q Outlk Teekay Cnslidated Incme Statement Item Q Outlk (expected changes frm Q1-18) (1) Net Revenues Vessel Operating Expenses (OPEX) Time-Charter Hire Expense Depreciatin and Amrtizatin Teekay Parent $4m decrease frm the Banff FPSO due t a scheduled maintenance shutdwn in Q2-18 $2m increase frm the Hummingbird FPSO due t higher il price linked tariff revenues in Q2-18 Teekay LNG $3m increase primarily frm the cmmencement f charter cntracts f tw MEGI LNG carrier newbuildings in mid Q1-18 and Q2-18, partially ffset by the scheduled drydcking f Catalunya Spirit and sale f Teide Spirit Teekay Tankers Increase f apprximately 140 net revenue days, mainly due t full peratins f tw in-chartered vessels which delivered in Q1-18 and ne additinal calendar day in Q2-18. Apprximately 52% and 56%, r 700 and 1,410 spt revenue days fr Aframaxes and Suezmaxes have been fixed at $12,800/day and $11,100/day, respectively, s far in Q2-18 cmpared t actual rates f $15,100/day and $12,500/day, respectively, in Q1-18 Teekay Parent - $5m increase primarily frm the timing f maintenance csts n the Finaven and Banff FPSOs in Q2-18 Teekay LNG - $2m increase due the timing f maintenance csts Teekay Tankers - $1m increase due t the timing f purchasing in Q2-18 Teekay Tankers - $1m increase frm the full peratins f tw in-chartered vessels delivered in Q1-18, partially ffset by the redelivery f ne inchartered vessel in Q1-18 Teekay LNG - $1m increase primarily frm the deliveries f tw MEGI LNG carrier newbuildings in mid Q1-18 and Q2-18 Net Interest Expense Teekay LNG - $3m increase primarily frm the financings f tw MEGI LNG carrier newbuildings which delivered in mid Q1-18 and Q2-18 General & Administrative Expected t range frm $18m - $22m n a cnslidated basis Equity Incme Adjusted Net Lss Attributable t Nncntrlling Interests $4m decrease due t lwer earnings frm the investment in Teekay Offshre $3m decrease primarily frm lwer earnings in Teekay LNG s MALT, RasGas 3 and Exmar LPG jint ventures Expected t range frm $11m t $13m due t lwer expected adjusted net incme in Teekay Tankers and Teekay LNG (cmpared t adjusted net incme attributable t nn-cntrlling interests in Q1-18 f $4m) (1) Changes described are after adjusting Q1-18 fr items included in Appendix A t ur First Quarter 2018 Results Earnings Release and realized gains and lsses n derivatives (see slide 10 t this presentatin fr the Cnslidated Adjusted Statement f Lss fr Q1-18) 11

12 Quarterly CFVO in $ millins Pised t Benefit frm Strnger Oil Prices Teekay Parent s 3 directly-wned FPSOs benefit frm il price and prductin tariffs Hummingbird Spirit Banff Finaven Firm charter cntract ut t September 2020 OPEX cvered, plus tariffs linked t il prductin and il price +$45/bbl Well issues have hampered pstdrilling prductin; hwever prductin is expected t be mre stable Operating under Evergreen cntract with firm charter cntract ut t July In discussins n a cntract extensin. OPEX and CAPEX cvered, plus tariffs linked t il and gas prductin and il price $25 $20 $15 $10 FPSO cntracts prvide upside expsure t il prices Operating under Evergreen cntract. Current cntract includes prductin and price tariff +$65/bbl $85 Brent Estimated CFVO range assuming full prductin f 42,000 bbls/d $5 $65 Brent $0 -$5 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18E Q2 '18N (2) CFVO fr 3 FPSOs Impact f Banff Shutdwn Finaven annual prductin bnus (1) (1) N = nrmalized fr Q2-18 run-rate prductin (2) As a result f the adptin f the new revenue accunting standard in Q1-18, $2 millin f additinal annual incentive revenue relating t the Finaven FPSO has been recgnized in Q1-18, which was histrically recgnized in the furth quarter f each year. 12

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