Good morning ladies and gentlemen. Thank you for standing by. Welcome to Teekay Corporation’s Fourth Quarter Year-end 2007 Earnings Release Conference Call. During the call all participants will be in a listen-only mode. Afterwards you will be registered for a question and answer session. [Operator Instructions] As a reminder this call is being recorded, dated Thursday, February 28th of 2008. And now for opening remarks and introduction I would like to turn the call over to Mr. Bjorn Moller, TeeKay’s President and Chief Executive Officer and also Mr. Vincent Lok, Teekay's Chief Financial Officer. Please go ahead sir.

Before, Mr. Bjorn Moller begin I would like to direct all participants to our website at www.teekay.com where you will find a copy of the fourth quarter and fiscal 2007 earnings presentation Mr. Moller and Mr. Lok will review the presentation during today's conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual result may differ materially from those projected by these forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is engaged in our earnings release and the earnings release presentation available on our website. I will now turn it over to Mr. Moller to begin.

Thanks Dave. And good morning ladies and gentlemen, thanks for joining us four our fourth quarter earnings call. Beside Vincent Lok we are joined here for the Q&A session today by our Chief Strategy Officer, Peter Evensen. Let's start with the highlight for the quarter shown on slide number 3, we earned net income on an operating basis of $23 million of $0.31 per share. This figure reflects the weak tanker spot market experienced for most of the quarter prior to the big rates towards year-end. We generated cash flow from vessel operation of CFBO of $138.4 million of which our fixed rate business contributed more than 80%. The successful initial public offering of Teekay Tankers Limited in December 2007 was a major highlight. Teekay Tankers provides a pure play opportunity for investors to co-invest with Teekay in the conventional tanker business. Another highlights was ConocoPhillips selecting Teekay for a strategic multi-vessel transaction in which Teekay took over six Aframax tankers and time-chartered a number of tankers our to ConocoPhillips. In Q4, we also acquired two specialized LNG carriers from a ConocoPhillips/ Marathon oil joint venture. And we completed the construction of the Siri FPSO in Poland in December. The unit has since been re-located to Brazil, where it has delivered on this contract to Petrobras. On slide number 4, for all of 2007, we earned operating net income of $197.5 million or $2.65 per share. We generated $622 million of CFVO, 73% of which came from our fixed rate businesses. We generated record revenues of $2.4 billion and our assets reached $10 billion, a compounded annual growth rate in our asset base of 26% since 2000. In addition to the Q4 highlights, I mentioned before, other highlights for 2007 include our acquisition of 50% of OMI Corporation, which gave…

Thanks, Bjorn. Good morning everyone. Net income in the fourth quarter was $23 million, or $0.31 per share, when excluding the items listed in Appendix A of our earnings release, which relate mainly to unrealized losses from foreign exchange translation and interest rate swaps. The fourth-quarter results were negatively impacted by weaker spot tanker rates and higher-than-normal vessel operating expenses in our shuttle tanker fleet. However, our spot tanker rate strengthened significantly near the end of the fourth quarter, which will have a positive impact to our first quarter results. Looking at our segment operating results on slide 14, we generated $138 million in cash flow from vessel operations, or CFVO during the fourth quarter compared to 161 million in the fourth quarter of last year. The offshore segment's CFVO declined by $7 million from the fourth quarter 2006, mainly reflecting higher vessel operating costs, partially offset by the consolidation of 50% owned shuttle tankers effective December 1st, 2006, and the addition of two Brazil operating shuttle tankers and one FSO during 2007. Approximately 20% of the increase in vessel operating costs was due to the increase in fleet size. The remainder of the increase was due to a combination of higher crude costs, including 1.5 million in one-time bonuses, an increase in repair and maintenance work, and the impact of foreign exchange rate changes. In the fourth quarter, we incurred a number of unexpected repairs in our shuttle tanker fleet totaling about $2 million, which we consider to be of a nonrecurring nature. Our new Siri FPSO commenced its charter in Brazil on February 1st, 2008. As a result of the addition of the Siri FPSO, and expected lower operating costs in the shuttle tanker fleet, we estimate that the CFVO from this segment will increase to approximately $60…

Thank you, Vince. As we show on slide 17, with the IPO of Teekay Tankers, our platform is now complete. We've created three vehicles, each providing a focused investment opportunity for a specific part of our business, Teekay LNG for investors looking for long-term fixed-rate contracts of more than 10 years duration, targeting steady distribution growth; Teekay Offshore for investors seeking a fixed-rate contract with a medium-term of three to 10 years, implying slightly greater volatility and also targeting more aggressive distribution growth and Teekay Tankers for investors looking for exposure to the spot and short-term charter business with a full variable dividend payout. Teekay's 2008 newbuilding delivery pipeline, shown on slide 18, consists of 12 vessels across various segments. Eight of these ships have long-term charters, they're all suitable for drop-down, and all have financings in place that could be transferred to subsidiaries, as Vince mentioned. This list excludes the Siri FPSO and the Kenai LNG ships. So we have significant building growth in 2008. Slide 19 updates the sum of the parts calculation of Teekay Corporation, which post-TNK stands at just over $69 per share. At our current share price of around $46, we're trading at a one-third discount to the sum of the parts. Turning to slide 20, we will focus on closing this value gap primarily through a strategy of drop-downs from Teekay Corporation to each of our subsidiaries. This should generate increased general partner fees from the MLPs and, in the case of Teekay Tankers performance fees and it should lead to an increase in the price of limited partner units and Teekay Tankers' share value, respectively. In turn, Teekay Corporation should benefit from a combination of increased free cash flow coming out from the subsidiaries and an increase in our sum-of-the-parts valuation from the improved underlying value of the daughter companies. Later this year, when we have progressed the drop-downs, we plan to evaluate our strategy with regard to further return of capital to Teekay Corporation shareholders. We're pleased with Teekay's central position in the global energy supply chain, and we're excited about our ability to create shareholder value through our business platform. Thank you for listening this morning, and we're happy to take your questions. Question and Answer

[Operator instruction]. The first question is going to be coming towards us from Doug Mavrinac of Jefferies. Please go ahead. Douglas Mavrinac - Jefferies & Co.: Hi, thank you, good morning all. I just had a few questions. First regarding the ConocoPhillips transactions, was the charter back component of the transaction a strategic decision on Teekay's part, provided you guys have stable cash flow over the next five years and not take on additional stock market exposure or was is it a speculation of a transaction if you can share that?

That was a stipulation on part of ConocoPhillips. Douglas Mavrinac - Jefferies & Co.: Okay. So this is necessarily a statement of your view necessarily on the market?

No, but I think it's upon net exposure I think that's in itself a statement, but of course what’s more important is that we have created an increased strategic tie with one the fastest growing companies in the industry. So, it's very exciting strategically but in addition it provides this additional or probably a wash overall when you think of the ships we charted out and ships which are gone. Douglas Mavrinac - Jefferies & Co.: All right. But you did along with the steel so maybe… we can read into that little bit. Okay. And then second, are you just chartered one of your VLCC, the ConocoPhillips as well is expanding that partnership. And when looking at the VLCC profile… VLCC full profile this year in one of your slides if there is likely to be limited growth in this particular asset class and we know the VLCC asset class has outperformed the other asset classes in recent weeks. My question is, would the VLCC asset class be a sector that you all will be interested in expanding after your expansion in the Suezmax asset class as the OMI transaction and secondly do you believe the recent disconnect between the performance of the VLCC asset class and the Suezmaxs and Aframaxs can continue?

We made a, I think significant statement of our intention to replenish our presence in the crude market when we acquired OMI last year and that did very well with our strategy in the medium class tanker space. We don't have any current plans to enter the VLCC market. We accept that this is… it has good dynamics, but we see good dynamics for the overall crude market and on your point about the stretch there can be some periods where they disconnect, but generally it is approachable market and certainly see the smaller vessels always benefiting from strong markets for the large vessels, not always through the other way round, but it's very consistent that the smaller vessels do benefit even if with a lag at times when big ships have good markets. Douglas Mavrinac - Jefferies & Co.: Okay great. And then just a couple of more questions. First in, can you guys remind us of how many additional assets can be dropped from Teekay Corporation to one of the MLPs and or Teekay Tankers? And what considerations do you all have when deciding when and how many additional assets to drop down?

Doug, we have a multitude of assets that we can drop down basically all the forward LNG's on the GAAP side are eligible to go into Teekay LNG and on the offshore side, we are waiting until we have re-contracted some of the FPSOs before we look at putting them into Teekay offshore, but we still have approximately 75% of our Shuttle Tanker franchise that is our private Teekay offshore. And there is another 39 vessels of the Teekay… of the Teekay, which are eligible to go into Teekay Tankers. So that's many years of profitable drop downs in our view. Douglas Mavrinac - Jefferies & Co.: Okay, great. That handled both of them Peter. Thank you very much and thanks Bjorn.

Thank you, Doug.

Thank you. The next question will come from Jonathan Chappell of J.P. Morgan. Please go ahead.

Hi guys. God down with the Siri projects… it started something pretty big down in Brazil. Can you talk about the growth potential and elaborating a little bit on the slide in the presentation. Do you see more FPSO potential, do you see more shuttle potential or both. Also kind of what's visible from fields that have already been found there versus what you think potential may be, and then finally, what's your capacity with those fixed assets to meet the demand that you see in the Brazilian markets?

I was in Brazil earlier this month and I can tell you that, it's palpable how excited people are down there. We had chance to meet with top brands of Petrobras and they are extremely focused on the rapid development of the two PPO which is like anywhere from 8 billion to 28 billion [inaudible] barrels equivalent. They are looking at cost tracking, in fact, we might have opportunities to help them because of our specialized involvement in the heavy oil segment now. So, I see estimates for FPSO demand in the next several years jumped by at least 10 units based on the two PPOs alone. And so it's a bonanza down there. And I think, we are really well placed. So in terms of our capacity, that's what we are in the process of ramping up and we are strengthening the team. I am extremely pleased with the way that Siri project went. And I would say, if we can do one project a year in the next one or two years and then a couple of projects a year thereafter, that will be a natural ramp up, but of course, a project isn't always a project, some of these projects are huge and some of them are more moderate. So, I think, what’s so impressive about Petrojarl is the quality of the engineering and the operational excellence that they have in such a great marketing tools. They are the pioneers in the FPSO business with 20, 25 years of experience and they have just unbelievable up-time statistics on what they do.

Yes.

So, and of course in the shuttle business is the great edge on to the growth in offshore in Brazil and elsewhere, where we have $500 million worth of shuttle tankers coming in and where we have other vessels with shuttle features in our fleet and along these items are order so that we can step up our investment or our involvement broadly in shuttle. So this is a very exciting area for Teekay.

So, some of it is of lot of potential feature drop downs to TOO. A follow up on the drop down issue, is there a potential area, you're little bit more focused on do you think, if the projects are a little bit more lined up or sooner that might have drop downed possibly in TOO? And also what's the financing capability of your subsidiaries to take assets from the Teekay Corp.? And how much it is over the line of successful equity issuances as you look at the '08 schedule?

Well, we like all our daughters. So there isn't one daughter that we like more than the other and I don't want to give specific guidance from the timing, except to say that we're trying to grow all three in the case of all the vessel, all the three daughters, we’ve graded them so that they do not have to do follow on equity offerings in order to grow. All of them have undrawn revolving credits, which can give them liquidity. And so that's not our preferred alternative. Our preferred alternative is to do follow on offerings. So we're happy to see that the MLP states we opened this week with two large overnight issues from the follow-on side. So that would be our preferred way in order to grow. But as Bjorn said in his speech, we're committed towards growing, each of the daughters this year.

Okay. And then final one for Vince. What are the capital commitments and what financing have you arranged, for those commitments to kind of build those transactions

Yes. The ConocoPhillips we repurchase two out of the six ships and that the other four vessels are sort of medium to long-term [inaudible]. In terms of few ships we purchased, we just used our existing cash and revolvers to finance that but we were looking at some long-term financing for those in the near-term.

Okay. Thanks very much.

Thanks.

The next question will come from Omar Nokta, of Dahlman Rose. Please go ahead. Omar Nokta - Dahlman Rose & Co.: Thank you, good morning.

Hi, Omar. Omar Nokta - Dahlman Rose & Co.: Hi, I just want to get your… your thinking on buybacks. Bjorn, I think you said earlier later on this year would be the timing for that. It seems that at least one of your competitors out there is holding back a bit the healthy credit market shake out, is that some of the position you are in, where you will be waiting for cash from the asset sales, and drop downs rather than having into a liquidity that's available now?

I would say that basically we will plan to finish the existing buyback authority before the Q1 conference call, especially at these attractive prices and we feel that the average price is $50, which we purchase during the quarters is still an attractive price. But as we executed on 2008 strategy of growing up our Siri by dropping down assets, as I mentioned, will be revaluating our share buyback plans dividend policy apparent could end up becoming debt free on a net basis. So we will look at that and I think the drop downs will really create more optionality for us. We have continued to say, we have always said we have several uses for our cash, one is accretive and attractive growth opportunities, one is the repayment of debt and the third one is return of capital to shareholders. And so we typically have done, I think a good mix of all of those, but we won't hesitate to return capital if we don't think we can use it appropriately. Omar Nokta - Dahlman Rose & Co.: I just was the... is there any other way of [inaudible] that Teekay obviously trade at a 33% discount, do you have all the difference been off the line for the value, but it just seems like your shares continue to lag and how do you feel about that? Is there something else you can’t do or is it just… you simply wait until the dropdown takes place?

I think we have a good strategy in place for 2008 in order to create value, as we said, obviously there is other things you can do but how we’ve establish to good investor base with our daughters and we've been very pleased with the type of investors that have moved into the Teekay ownership space. And so I think we have a different model, which is that we're more of an asset manager and we're creating a longer-term value. I think the more interesting thing about the whole corporate structure is that it will increase the return on invested capital of the Teekay Corporation. As we start to get more of the general partner, incentives come up. So as we create projects the return on invested capital, which has always been the hard part about doing long-term projects, which is like you have a low return on invested capital in the first few years. By having these daughter companies we won’t suffer from that of the Teekay Corporation, so one of our plans going forward, which is the next step is to try to show Teekay Corporation as a stand alone company. And if we do that I think investors will start to feel the whole power of it, which is that as we consolidate up of course we look like we have a high debt to capital level. But as we achieve the strategy, you will start to see the free cash flow of the Teekay Corporation on a standalone basis. And I think when the investors start to focus in on the free cash flow, on the higher return on the invested capital, it will come up to Teekay Corporation, then we'll see that we actually are a different animal than your normal asset intensive shipping company. Omar Nokta - Dahlman Rose & Co.: Okay. Do you see that happening over the next quarter, being able to eliminate Teekay [inaudible] financials?

Yes. We're working actively in order to try to retain our earnings statements in order to try to look at that. I'm not sure our goal is to achieve it in the next quarter, which will be easier on all of you guys, because it hasn't been [inaudible] we have listened to both investors as well as you analysts who have talked to us about the fact that it's hard to analyze Teekay. So, our next step isn't just to illuminate eliminate the value of the assets, it's also to make it a little bit more transparent. So, I think if we can achieve that, in other words, move around the segments, make it closer to the corporate structure, if we're going to achieve that, I think it will be easier for investors to analyze us, and then all the things that I just talked will become more apparent. Omar Nokta - Dahlman Rose & Co.: That's great. And just switching gears, could you clarify the betting issue on Suezmaxes. I thought that who have been consulted, and OMI vessels that you've taken on a technical management team, and that you're going [inaudible] process.

No, that's not the case. We, OMI took over the marine operation side of OMI, that [inaudible] marine operations which were mainly in India, whereas in Teekay, we've decided to incorporate and to integrate the OMI fleet into the Teekay fleet. I think, simply we underestimated the trading flexiblity that we lost during the… this transition. So, this was on gradually leading through the fourth quarter. And just a slightly longer OH pattern of these vessels, meant that it wasn't as practical to get these inspections done, then of course I am just saying despite on a number of vessels really shows up very quickly on the bottom line. So that’s sort of a one time event that's behind us, the ships are now fully in the Teekay System and fully added and approved. So, we look-forward. Omar Nokta - Dahlman Rose & Co.: Okay. Did you, with the guidance that you gave, is there a percentage utilization that you could give us for the quarter on Suezmax?

I don't have that number. Yes, but I guess the utilization shows up in the TCE so, I guess that's the one to focus on, but there was a lot idle time on some ships. So I guess that's… once you get into that situation then you don't earn revenue. [inaudible] Omar Nokta - Dahlman Rose & Co.: I can follow up offline just because today it’s not possible?

Okay. Omar Nokta - Dahlman Rose & Co.: Thank you.

Our next question will come from Scott Burk of Bear Stearns. Please go ahead.

Hi, just a few follow-up questions. First of all, I wanted to know what’s the percentage of your spot fees recovered by your FFA activity for the [inaudible]?

It's relating to the Suezmax fleet and it's roughly about 3.5 vessel equivalents for the Suezmax.

So just [inaudible] activity. Okay. So no active trading beyond that in the FFA market for the Aframax?

We do have some access trading in the FFA market. I don't think it's that material, but we have been doing some trading and hedging over the past year.

Okay and then just final follow up. I missed… you mentioned the minority interest for the first quarter, I think you said it's going to be $7 million. Can you just restate that?

I was saying the 7 million is the minority interest in the fourth quarter, if you exclude the Appendix A items.

Okay.

And in the first quarter that number will likely increase, because we have a full quarter of minority interest relating to Teekay tankers where as in the fourth quarter there is only 14 days of that. That $7 million will likely increase in the first quarter.

Okay. And then your… you did mentioned also that the cash flow from vessel operations in the offshore segment is going up to $60 million in the first quarter, how much of that is driven by revenue increase versus extends a decrease… I guess my question is with lot of the down size in the fourth quarter driven by one-time expense items or was it just the fact as you have some of those shuttle tankers offline?

The offshore segment will include the Siri FPSO for a couple of months. The additional cash flow coming from that unit and if you back out some of the non-recurring operating expenses in the fourth quarter, roughly about $3.5 million that's sort of the difference there.

Okay. Thank you very much.

Next question will come from Justine Fisher of Goldman Sachs. Please go ahead.

Good morning.

Hi, Justine.

The first question that I just have is a clarification on the Suezmax rate. So obviously the idle time during the quarter you said will be reflected in the TCE but then the 40,000 a day rate that you gave that’s before taking into account additional idle time?

That's already in the net of idle time.

Okay.

I think that the market requires some benchmark higher than that and that's what Bjorn was Peter was referring to.

Okay. All right thanks. And then the second question is about your short-term debt maturities in 2008, I know that you had a big revolver of balloon payment in '06 and I believe you had another one in '08. Can you clarify what portion of your short-term debt is that revolver came in or may be I am totally… I am into something else?

Actually that was debt related to a bridge facility we had in connection with the OMI transaction, which is subsequently been refinanced when we did the Teekay Tankers IPO. So, that's been termed out.

Okay. Do you expect short-term debt, I guess for the next four-quarter period going forward once that payment is made to be the kind of $250 million to $300 million that has previously been or are there any other large payments you have to make in '09 or 2010?

If you have 150 of that facility still in the current portion right now, because we payoff majority of that credit facilities, there is still 150 outstanding as to sort of mid 2008.

And you guys will refinance that this year?

That's right.

Okay. And then, a question on just a number at Aframaxs charted in there. It looks like there were ten new Aframaxs charted in for the fourth quarter in the [inaudible] on this especially versus the third quarter. Can you tell us the duration of those charters like how long can we expect those some additional Aframax in the fleet?

Well, six of those vessels relates to the ConocoPhillips transaction.

All right. Okay.

Those are long-term in charters and two 4 in-charters and there are two owned vessels. So, four of them I guess. We bought two vessels and chartered in four. And so those are long-term, but the typical tenure of our in-chartering activity is once in two years.

Okay. And then the last question I have is for Peter. I would think if you could go over than the PEMEX of the asset dropdown on the balance sheet and the cash flow statement, just that we can get a good idea of how this will be affected. And I know that you consolidate your results of the MLPs into Teekay Corp still. So if you drop an asset down, I guess you get cash for that asset and maybe pay down debt but on a consolidated basis, does it make... will it make any difference?

If we drop down the existing assets, first of all they will be transferred in at Teekay's existing book values even if the purchase price is different than that because they are part of the consolidated Teekay Group. If Teekay takes... I guess it depends on whether the MLP or Teekay Tankers issues equities and that would change the capital structure on a consolidated basis. And of course, depending on whether Teekay subscribes the unit that could change the minority interest expense figure. If you look at sort of consolidated EBITDA that doesn't change, it's primarily interest expense and minority interest expense will change accordingly?

And so the... and the total debt level would only change if the MLP issues equity and therefore that would decline but if they issue debt and equities then the total debt is on the balance sheet for Teekay Corp would be the same?

That's correct.

Okay, and then, sorry last question. Any plans to repay significant amounts of debt [inaudible] EBITDA even if we take out or strictly cash it now around five times, any plans to repay some of these big facilities that you guys have taken on to finance fleet expansion?

Yeah, we have taken on a sizable amount of debt with the OMI acquisition and as Bjorn mentioned we're focusing on our plan to execute drop downs into our subsidiary companies and those companies may issue additional equities. So that's the part of our plan for 2008 to pay down debt. But also look at alternate uses for that capital. But I guess it's worth noting that the 80% of our cash flow coming from fixed rate business. I mean, our stability is unique in the industry. So while we certainly want to watch the overall debt level and that dynamic is also [inaudible].

Okay. Thanks a lot.

Next question will come from Greg Lewis of Credit Suisse. Please go ahead.

Thank you and good morning. My first question, I guess is a follow up to the ConocoPhillips transaction. Are you able to provide any details regarding the rates involved?

We can't give any details, but I guess if [inaudible] provides the rate for various periods of time charter of different types of vessel, it's pretty much market related.

Okay, great. And then actually a follow up to that. I guess the last time Teekay sort of did the vessel buyback on break down of charted in rate was probably about a year ago. Is there any plans to sort of re-release those types of numbers?

Not at this stage. I think the next change is quite a bit from quarter to quarter, and I think as you see changes in the fleet you can probably just assume that there is sort of standard market rates based on the terms that we entered into.

Okay.

[inaudible] you kind of the aggregate outcome of those in-chartering, those in-chartering portfolio, so we will provide that on a regular basis.

Okay. I guess and then shifting gears to the FPSO business, I guess on slide five you talk about your strength in the FPSO market, is that more a function of region, is that more a function of you want to do business in the North Sea and Brazil, or is there something else with that?

Well, I would say that our FPSO business is focused in on more complex FPSO solutions rather than simpler FPSO solutions, so you haven't see in more benign waters like Africa or in certain areas of Asia. But we are pleased with the deepwater opportunities that are available in places like Brazil. I think you could see things in other areas that go to harsh environments and that kind of complexity that you see on the existing Petrojarl assets goes well in the North Sea or in Eastern Canada or eventually partner up towards the Artic side of thing. So, that's where our competitive advantage is and that's where we are focusing in on the tenders, so there is more complex value-added progress.

Okay. Thank you.

Thanks Greg.

Next question will come from John Kartsonas of Citigroup. Please go ahead.

Hi. Based on your guidance on the cost side for '08 [inaudible] may be G&A, depreciation, chartering?

I think the… if you look at vessel operating expenses, the levels that you saw in the fourth quarter is a pretty good indication, subject to, of course, changes in the fleet, which who we will have some newbuilding delivered during 2008, which we are looking at sort of first quarter to fourth quarter, it's a pretty good indication although I think in the offshore segment as I mentioned earlier that will… we expect that to come down a little bit because of the unusual nature or non-recurring nature of some of the expenses we've seen. In terms of G&A, I think just is with sort of general inflationary increases and the addition of additional vessels, the G&A level will increase little bit from where we are currently on a run rate basis, sort of in the low 60's per quarter.

And would you annualize it for the year?

Yes.

Okay.

That's low-60s per quarter.

Okay. Depreciation?

Depreciation, I don't have a full year figure, but if you… of course, there is going to be fleet changes happening in each quarter along the way, but if you look at the first quarter, we are looking at a total depreciation of roughly just under $100 million.

Okay. Second on debt, how much of that is swap or how much do you have free at this point floating?

Pretty much all of our debt is fixed.

Okay.

And swaps are varying...

Do you have an average rate for that approximately?

Our all-in debt cost with the spreads is about 6%.

6%, okay. Okay. Also on the rule of thumb, is that still something that's viewed as a rough guidance for the quarter or has it changed?

Yes. It's really difficult to have an accurate rule of thumb given the diverse range of ships that we have in our spot tanker fleet as well as the fact that spot grades still have facility... [inaudible] sort of trade in tandem in a particular quarter. If you are looking for [inaudible] previous one we had, I think preventing from break-even probably has increased given the rise in costs and the fact that we're in-chartering at higher rates given the current market. So the net income break-even is probably closer to $18,000, $19,000 per day. The operating leverage of $0.06 per quarter above the net income break-even per $1,000, is probably around the same.

And finally, have you done any calculation of what is the entity of your operating basis? Obviously, without one of your competitor at credit rating change and that was part of the vision, have you calculated what's your all-in liabilities to GAAP based on the operating basis.

You could only do that if you went against Amerex [ph] curves. And we're not sure Amerex curves are actually quite reflective of that. So we don't give out any of that kind of data.

But these are like time chartering vessels, why would you use Amerex.

Are you referring to the debt calculation?

Yes, like how much of the entity is operating, whether it is the time chartering vessels?

We haven't done that calculation.

Okay. Do you have the outstanding amount?

Yes. You could see that in the notes of the financial statements for the quarter.

Okay. Thank you very much.

Thanks, John.

Your next question comes from Alex Cornwith of Spencer Capital [ph]. Please go ahead, sir.

Hi, good morning.

Hello.

Hi. A quick question for you. It obviously helps quite a bit to have a premium currency for your daughters. To help them grow at the rates that you have put out to the market. If my question is what tools do you have at your disposal to hopefully get the market to recognize the value proposition of your daughters, and to help [inaudible] equity for future growth?

Well, I think we've given pretty much guidance on the two MLPs about what kind of distribution growth we want to have. So people have seen that the Teekay LNG wants to... aims to grow its distribution by at least 10%. Teekay Offshore wants to grow its distributions by 15%. And on TNK we're waiting for the first quarter dividend, so people can really the real power of the free cash flow that's being returned to their shareholders. And I think when they start to see that Teekay Tankers will regain its footing. So we are basically letting our performance show the investors what that we're delivering on what we said we were going to deliver on.

I think there was an element that I guess in hindsight we probably should have been more aggressive in doing dropdowns in TOO last year and I guess we missed the window. And so that was probably there was an element of show me please attitude out there and, of course, that [inaudible] show you.

Very good. So, looking at offshoring LNG, given what your current cost and equity is in the market, do you feel confident you can grow at the 10% or 15% you’ve put out there this year?

Yes.

Terrific. Another question for you. Can you just review for us what the impacts of changing currency valuations are and how do you manage that through your FX program?

Yeah, we have a regular hedging program in place. For example, we've hedged out... we entered into hedges last year on Norwegian kroner expenses and that goes all the way through to the end of 2008 and then we extended out through 2009. So in, each of our currencies, our biggest one is Norwegian kroner I would say as well as euro expenses. But we do have in many ships for example on our Danish fleet where we incur euro expenses that is offset by euro revenues. So there is a natural hedge in place for that. So our biggest exposure is Norwegian kroner, which we have hedged for 2008.

All right, well.. I guess last question for you and I guess this is more of a soft argument, but I'm looking at some of the price analysis right now and then I feel that you are going to imply the EBITDA from Teekay offshore to value your OPCO interest. Remind us why you feel it is appropriate to use the implied EBITDA multiple when it comes time to shut down OPCO interest, you have to take a haircut on it.

Well, how we feel is that any haircut that would be taken in an OPCO drop down would be made up with the value of the general partner that would increase. So, you need to have a basic benchmark or so... we feel that those things will cancel each other out as well as the increase in the L.P. units as well.

Do you feel that why regardless of the multiple that you drop down OPCO at?

Well, if you took a haircut in dropping down certain assets which should be made up in the GP value and the LP unit accretion. It is going to be exactly 1 to 1, but that's, I mean... that's the best benchmark you can come out with.

Perfect. Well thanks guys.

Next question will come from Stephen Erco of Lotus Wood Capital [ph]. Please go ahead.

Thank you. Most of my questions have been answered. I just wonder if you could get a little bit more specific on the size and I know the drop-down is going to be over the next couple of years, but if you could just put a range around what you feel is realistic in terms of hundreds of millions of dollars that you could drop down this year into the daughters, that would be helpful?

If I... I don't think I am going to get drawn on that, that's a function of where the market is. As I said we are confident that we saw the opening up of MLP market big time with a follow-on offering. So, we are going to be aggressive, but we're going to look at what the market will bare. We don't want to create too much of an expectation, but we will time it out in order to get the best value. Right?

Right.

It is just a question of how fast you can do it in doing it in the right way and then in the proper way. And I think we have a good mark on how the markets are both listening to bankers as well as our own views.

Great. Thank you very much.

Next question comes from Daniel Burke of Johnson Rice. Please go ahead. Daniel Burke - Johnson Rice & Company: Thank you all. I have two specific questions left. First of all with regards to the equity value of the in charter fleet, Peter, based upon what I think you mentioned earlier... am I to assume that you use the [inaudible] at the end year of year 2007 to determine the value that shows up in some of the parts?

No. I mean it's a rather small part of that. We have our own view of what we think those values are. What I was trying to say is that, it isn't huge significant amount of our some of the parts that we don't go out and say that it is worth X-amount or try to make it work more. I think… and the other thing that we do is we don't stick around and say well Teekay's premium will be X-amount over in the MRX curve. It's just the way for people to get an idea of what the value of our in-charter activity could be. Daniel Burke - Johnson Rice & Company: Okay. I understand. And then last question, I was curious if you could address maybe the timing you would hear indications from both ConocoPhillips and Marathon on the LNG side, and I guess Petrobras on the Siri side. Given that as it stands right now I guess you got potentially some remarketing risk on Siri and on the R&D carriers that you purchased?

We see it as a remodeling opportunity, I can assure you. The Siri project is 2, 3-year project. And I think they say in Brazil, that no FPSO has ever left Brazil to take up service elsewhere that's a country where they can't get FPSOs fast enough, so we think that's the great opportunity for us. On the system leg, on the Canary Islands we think prospects are good that we are going to be employed at least for 2011. But again, we think with these many specialized and innovative LNG projects that customers are looking at, we almost, we don’t… have a rate to get the ships so that we can pursue these projects, of course the lead time of those projects. So it is good that we have a fixed rate employment in the mean time. We are very excited about the fact that unlike the sort of 20 to 25 year model on the LNG, which didn't give us the lot of opportunities to projects, we are now getting into the project. So that's a great development.

Okay. Great. Thanks for those answers.

[Operator Instructions]. And the next question is going to come to us from Urs Dur of Lazard Capital Markets. Please go ahead.

Hi guys. Everything has already been asked, but interested a bit in vessel OpEx going forward, you have a lot of fixed rate stuff. But OpEx isn't fixed rate. I was just wondering how you plan to manage that going forward, what potential hurdles you see and also if you could chat through very quickly or maybe offline later again what the increases were in the fourth quarter some of that is in the larger fleet, but you mentioned some other items, I would love to talk about that too?

Okay. Do you want… you're referring to the increase in the fourth quarter?

Fourth quarter, but also how you guys view it as a corporation going forward with a lot of fixed revenue going forward, which is fantastic, but how are OpEx going to be managed going forward?

I think, let me also add a comment on the fixed rate contracts. We have a variety of escalation provision.

Right.

To go through on different contracts.

Okay.

So I think on some contracts it is fair to say that the building escalation provisions are probably on the lower end of what we are experiencing, fuel cost increases for example. So we think there are some harms to get over here and there. But on the whole, we feel that this is manageable.

A large number of our fixed rate business is therefore chartered out as well. There is no operating cost written there.

Right. Okay. And then how do you look at crewing costs for instance going forward. I mean how does one approach it. What do you see as a hurdle on the horizon, is it just continues to... going to go up or...?

Well [inaudible] the world's shipping fleet is growing and the high end of the shipping fleet is a sort of complex tank of LNG, I'm sure that's also growing. Teekay has always been at the high end of the cost range because we are favoring to the most quality customers, so in a way we are already paying up for crew whereas it is more people who are at the lower end that will experience some tightness as well. But we're also diversifying our crew sources gradually and so we think Teekay is a very attractive company to work for, and we have very good growth crew. So just making sure we stay competitive.

Okay. Thanks.

The next question will come from Stephen Williams of Simmons. Please go ahead. Stephen Williams - Simmons & Company International: Yes, hi. Just a quick question on the two new LNG vessels, can you just be a little bit more specific about how the specialized characteristics you mentioned associated with these vessels to give you an advantage with, what are the specialized LNG applications you think they do such as [inaudible] slowing their production whatever. And how [inaudible] in the existing LNG fleet?

Right. So these are self-supporting prismatic tank or SPB tanks are unique. These are the only ships in the world that have this feature and unlike a membrane in an LNG area. The membrane doesn't have it's having it's own strength, it's just revised on the hull strength to make it supported it, whereas these as fully self sustaining tanks inside a hull, and what that does is it means that the forces of slushing when you are offshore with a partially loaded tank typically a membrane LNG cannot withstand those slushing pressures and therefore it is very difficult to have transactions offshore where you are either partially filling or partially emptying a vessel. These vessels have no such restrictions and there are there's.... there's one more Norwegian company that sells LNG that’s been out speculative new buildings with SPB tanks, because exactly all the liquid faction, all the offshore application. But we already get this in these vessels. Stephen Williams - Simmons & Company International: Okay. And have you got any feel for exactly what application you would... really think these would be useful?

I hope, we have a range of ideas and this is about which ideas gain traction. I think as we talked about floating with this fraction but nobody has actually signed up, yes. So we think ships that these ships are not lag this company to 2011, so we have a couple of years in which to develop projects. Stephen Williams - Simmons & Company International: Okay. That's great. Thank you.

Thank you.

Thank you. There are no further questions at this time. Mr. Moller, please go ahead.

Well, I just wanted to say that... just seeing as we talk about the supply and demand for the tanker freight this year and this week alone we've seen 5 Aframax’s and two [inaudible]. So I think this tightness in market is real, and we're very optimistic for this year. So thanks for joining us today and we look forward to talking to you, and if you would like hear more about the tanker market, we're hosting a conference call, the first quarter conference call for Teekay Tankers at 1 P.M. Eastern Standard Time today. Thank you very much.

Ladies and gentlemen that concludes the conference call for today. You may now disconnect your lines, and have a great day.