Welcome to the Teekay Corporation’s Q3 2011 Earnings Results Conference Call. (Operator instructions.) As a reminder, this call is being recorded. Now, for opening remarks and introductions, I would like to turn the call over to Mr. Peter Evensen, Teekay’s President and Chief Executive Officer. Please go ahead.

Before Mr. Evensen begins, I’d like to direct all participants to our website at www.teekay.com where you will find a copy of the Q3 2011 earnings presentation. Mr. Evensen and Mr. Lok will review this presentation during today’s conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Q3 2011 earnings release and earnings presentation available on our website. I will now turn the call over to Mr. Evensen to begin.

Thank you, Kent. Good morning from Vancouver, everyone, and thank you for joining us today for Teekay Corporation’s Q3 earnings call. I’m joined this morning by our CFO Vince Lok, and for the Q&A session we also have our Chief Strategy Officer Kenneth Hvid, and our Group Controller Brian Fortier. If we begin on Slide 3 of the presentation, I will briefly review some recent highlights for Teekay Corporation and our three daughter companies. For Q3 2011, Teekay Corporation generated a consolidated $157 million of cash flow from vessel operations, or CFVO, an increase of 18% from Q3 2010. We reported a consolidated adjusted net loss of $40.6 million, or $0.58 per share in Q3 on a consolidated basis. This was a disappointment. The profits from our fixed-rate businesses were not enough to make up for the losses from our spot tanker operations, including in-chartering of tonnage which took place in previous years. While the third quarter of the year is usually the weakest quarter on a seasonal basis it was particularly weak this quarter. In addition we also looked at our tanker franchise including the booked value of our tanker assets and, after analysis, recorded some non-cash write downs to the goodwill and the booked value of some of our MR product tankers and older crude tankers. Despite the weak spot tanker markets, our fixed-rate businesses continue to grow and in the past month we have announced significant acquisitions in both our offshore and L&G businesses. Starting with offshore, Teekay and Teekay Offshore have agreed to acquire three existing FPSO units from Sevan Marine for approximately $790 million, and Teekay will also invest $25 million to acquire a 40% ownership interest in a new net debt-free Sevan. This transaction positions Teekay as one of the top global operators of…

Thanks, Peter, and good morning everyone. Starting with Slide 8 I will review our consolidated results for the quarter. In order to present the results on a comparative basis we have shown an adjusted Q3 income statement against an adjusted Q2 income statement. Later on I will also provide our outlook for Q4. Net revenues decreased by approximately $5 million mainly due to lower spot tanker rates and fewer vessel days from in-charter vessel deliveries during the quarter, which reduced time charter hire expense by a great amount which I will discuss later. These decreases were partially offset by higher project revenues from our shuttle tanker fleet and delivery of new building shuttle tankers and gas carriers during the past two quarters, and lower dry docking activity for our LNG fleet in Q3. As a reminder, a portion of the revenue we earn on the [Foinhaven] FPSO is dependent on various annual operational performance measures, oil production levels, and average oil price for the year. As a result, for accounting purposes, this portion of revenues is typically recognized in Q4 of each year. Based on the results and performance of the [Foinhaven] FPSO for the first nine months of the year, $4 million of such revenue was recognized in Q3 leaving approximately $25 million of unrecognized revenue at the end of Q3 to be recognized in Q4 2011, provided our operational performance and the average oil price for the year is similar to the performance in the first nine months of the year. Vessel operating expenses decreased by $3 million primarily due to the timing of expenditures and lower maintenance costs relating to our FPSO fleet. Time charter hire expense decreased by $6 million to the redelivery of vessels in Q2 and Q3, and an overall decrease in spot in-chartering…

Thank you, Vince. To conclude, we’re not satisfied that we reported a net loss for the quarter due mainly to the seasonal lows in an already-weak spot tanker market which masks our growing fixed-rate business and corporate structure that are sources of strength, value accretion and profitability. Over the past few years Teekay’s daughter company structure has been an important part of positioning the company for profitable growth that we’ve talked about this quarter, and enabling us to de-lever our balance sheet and build liquidity. In the coming quarters, our main focus is going to be on completing the Sevan and Maersk LNG transactions, executing on our existing offshore, new building and conversion projects and above all, improving the profitability of our existing business operations. Operator, we’re now ready to take questions.

(Operator instructions.) Your first question comes from Michael Webber from Wells Fargo. Please go ahead. Michael Webber – Wells Fargo: Hi, good morning guys. Obviously a lot going on here so I’ll try to keep it brief, maybe just starting with Sevan. Peter, can you just walk us through the timeline for closure here? You’ve got till the 30th and you’ve got the lockup on the bond vote through that period, and I believe the equity vote is on the 14th. I guess can you walk us through that timeline and then how the closure of the private placement for TOO impacts that and whether or not you would need to get an extension on that November 30th date.

Sure. So of the three FPSOs, the Sevan [Paranima] is going to be acquired directly by TOO, and we expect that to occur at the end of this month. The really governing feature of that is to get the charterer, which is Petrobras, to give their consent. All the money has been raised, and a key part about the private placement is that it’ll be funded when we get the acquisition of the [Paranima] FPSO. So what we like about the private placement idea is that we don’t have to use that money until we get the [Paranima]. But from the Sevan side, they have their bondholder meeting today and they have the shareholder meeting next Monday, and so we like the fact that that’s going to go directly to Teekay Offshore Partners. The Hummingbird is going to be bought by the end of the month. We expect things to go to the end of the month. They could move around a little bit but that’s the timing, and with the cash in place and the seller, Sevan, is putting all the requisite corporate approvals in place to make that happen. Michael Webber – Wells Fargo: Gotcha, okay. So you guys are still pretty comfortable with the 30th then. There’s still a little bit of leeway but you’re pretty comfortable with that date.

That’s right. And the Voyager, as Vince explained we’re not actually buying it yet but we are funding it and we have already started funding it. And that’s really critically important because what happened was that that unit was delayed and so now we see first oil coming in Q3 2012. We’ve had discussions with [Eon], which is the operator on that field and so to the extent that we can give our technical assistance and money we now see that those modules are being completed on time and on budget. And when you back up an upgrade project you really have to put in place all the requisite parts. So there’s a lot of people spending a lot of time on that upgrade. Michael Webber – Wells Fargo: Gotcha, yeah, that makes sense. I guess I was thinking about the FPSOs in general. The [Paranima] is kind of cutting in line a little bit – you still have the [Foinhaven] there to drop down. How should we think about that timing? Obviously it would seem dependent on putting some debt on the [Paranima] whenever you finalize that $130 million facility. And then I guess more broadly, you guys have talked in the past about doing one to two dropdowns per year. Any change in that thought process at all and I guess how the Sevan FPSOs kind of fit into that? Obviously it’s securing longer-term deployment and getting the upgrades done kind of dictate when they’ll be available, but can you maybe just talk a little bit about that pipeline; and specifically the [Foinhaven] and when we should expect that.

Yeah, well actually what’s happened is the eligible assets just increased and so we actually think that’s a good thing. Obviously you have to finance them but you’re right that the [Foinhaven] is eligible and so the [Paranima] cut in line. But that’s okay. So we’re still looking at good growth in Teekay Offshore in 2012 and as you point out, the [Foinhaven] FPSO is one of the first assets that will probably be considered. Michael Webber – Wells Fargo: Gotcha, okay, that’s helpful. I guess moving to tankers, and obviously the spot [Afermax] is acting as a drag on earnings and valuation at this point. Can you talk a little bit about how you potentially think about dropping those down eventually? You’ve got about $290 million of liquidity sitting at TNK and you’ve talked in the past about TNK being a buyer here but you guys might not necessarily be sellers considering how asset values are. Can you just give us an update on what your thought process is there right now?

Sure. Well, actually I think that’s changed a little. As Vince said, we had de-levered the balance sheet so if we sold anything we didn’t have to build liquidities. So I think that speaking for Teekay Corporation, now that we have some new assets that we put on the books and the GP cash flows that we know are coming in 2012, I expect we would be more of a motivated seller at this time. Because of the sum of the parts we actually marked them to market, and as Vince said we lost about $3. So from our point of view, we’re transparent in marking them to market which we think people should do, so if we decide to sell them the good news is we have a pipeline where we can fill them up with more fixed-rate assets. Michael Webber – Wells Fargo: Right, right. That’s very helpful and encouraging. I guess just staying on the tankers here, it looks like you’ve got I guess eight third-party charter-ins that roll off at some point over the next twelve months. Can you give us an update on the timing of those and when they should hit by quarter?

We don’t have exactly when they’re rolling off but Vince, you can give some more detail on it.

Yeah, I think we’ve provided some of those details, Mike, in the appendix to our presentation. Michael Webber – Wells Fargo: Okay, I can run through them then later.

I mean we’ve got a pretty good run rate of about a couple vessels per quarter over the next several quarters. Michael Webber – Wells Fargo: Gotcha.

We are positive on the tanker market turning around, and so the key question will be do we want to charter out and how do we want to change the mix as it relates to conditioning ourselves for a rebound. Michael Webber – Wells Fargo: Gotcha, gotcha. Alright, that makes sense. And I guess one more and then I’ll get back in line, but on Maersk LNG, obviously a pretty big win for you guys and then certainly it adds pretty considerably to your GP cash flows. By our numbers it seems like you actually have some more room there on the distribution. Can you talk a little bit about I guess what you guys are looking for to maybe unlock more? I mean obviously you did just move it up by 7%, but if I look at the three LNG assets that are there that are rolling over the next probably couple quarters, is securing long-term employment on those really what kind of would drive the kind of more recognition of that potential cash flow?

Well that’s right – when we’ve looked at it we’ve looked at what we call the long-term sustainable cash flows that you can get on those units. Obviously we have a kind of backward-dated forward curve on LNGs. In other words, if you were to trade it in a short-term market you’d get $120,000 whereas if you were going to put it longer-term you’d get I would say closer to $80,000 or $90,000 depending on the duration. So we have to take the short-term duration and play it up against the longer-term. The good news is we have a lot of people that want to charter that and we have to choose the proper duration. So you’re right that if you put in $120,000 versus $80,000 you get to a higher accretion number, but we wanted to give what we thought was the minimum accretion that we’ll get from the project. Michael Webber – Wells Fargo: Gotcha, sounds good. And t hen I guess just finally can you talk a little bit about that interest that you’ve seen in signing those three LNG vessels that roll off over the next several quarters? And maybe just an idea about I guess the volume of interest you’re seeing already on those?

Yeah, well first of all we actually think it’ll only end up being two vessels that’ll be spot because we think the [Max Meridian], because that extension option is below where the current market is we expect them to extend it although we don’t have a definitive declaration by the charterer. So we have one vessel that’s coming due in March, 2012 – that’s the Maersk Methane – and we have a second one, Maersk Magellan, that comes due in Q3 2013. So we already see interest by charterers to lock in the 2013 spot vessel so that tells you the current strength of the market. I mean there’s a clear shortage of LNG vessels but the question that I ask my commercial people is how long will that shortage last, and that’ll fit into our model. Just as we do with Teekay tankers where we don’t go all spot, on Teekay LNG our bias is to put in long-term fixed-rate cash flows. I think that’s consistent with what our investors want, which is stable cash flow, but obviously Teekay LNG is getting to the point where it can afford to have a certain amount of vessels spot, especially when you see how high the short-term charter rates are. Michael Webber – Wells Fargo: Gotcha. Any idea how far forward you guys look to fix those assets or is it a little bit too early?

It’s too early. Michael Webber – Wells Fargo: Gotcha. Okay, that’s all I’ve got. Thanks a lot, guys.

Your next question comes from Justin Yagerman from Deutsche Bank. Please go ahead. Josh Casavant – Deutsche Bank: Good morning, this is Josh Casavant for Justin. I just wanted to start off with maybe what you’re seeing in the bank market. You’re clearly out there raising capital for different asset classes, and just wondering maybe what you’re seeing with regard to just who’s out there, what types of lenders. Are these credit agencies or your traditional bank lenders? Maybe if you can talk on margins and amortization profiles.

Sure. We have over forty banks in our bank group and so we have a large group of banks to work with, and of course there are some banks on that list that are not quite open at this point in time. But there’s still a lot of banks that are open for business, and lending to their core clients such as Teekay – the larger clients; and in particular I think they are more willing to lend to Offshore and LNG where you have long-term stable cash flows against those assets relative to spot assets. So we’re making very good progress on our financings, and of course you are seeing the margins higher than they used to be; however, partially offsetting that you do have lower LIBOR rates and swap rates so your all-in debt cost is not impacted as much overall. So overall we’re making good progress on our financings. Josh Casavant – Deutsche Bank: And with regard to amortizations, is that required to be done usually over the contract life for some of these assets or how are lenders thinking about that?

Yeah, I think in FPSOs the amortization tends to be a little bit quicker just given the nature of the asset and the contracts. Given that our intention here is to, for example, to fix it out on a longer-term contract we will look to get a longer-term loan to match against that. So it really depends on the length of the contract. Of course in the LNG business with the Maersk LNG assets, they’re very long-term contracts so that we’ll get longer-duration loans against those assets. Josh Casavant – Deutsche Bank: And with regard to the Hummingbird, I guess its current fixed portion of its contract expires in Q3 2012. At what point are they required to exercise or declare an option, and have you started discussions on whether those options will be declared or whether you might be seeking maybe longer-term new contracts?

The short answer is yes, we have started discussions with [Centriqua]. It has much more to do with the actual field that it’s operating on – how long they expect to be producing oil on that field. And so we anticipate that it will come off, that they won’t renew all the options which is why you hear us talking about arranging new employment. I think with Teekay’s operating excellence that we have through our [Petrial] unit, that makes the amount of people that want to charter the Hummingbird much larger than it was when Sevan owned it and people weren’t quite sure what the staying power was of Sevan to either operate it or to upgrade it. So a big part of these FPSOs is your operational excellence. Josh Casavant – Deutsche Bank: Does that mean that this could be a potential dropdown candidate in 2012 or likely 2013?

It all depends on when [Centriqua] wants to release it. They recently renewed it from March 2012 until September and so we’re in commercial discussions. I think pending those commercial discussions then we’ll have a better timeframe for when it’ll be eligible to be dropped down, but if you want to look at what 2012 will look like, clearly the Voyager will be finished in Q3 2012. It’ll be on a minimum five-year contract and then that would be clearly eligible. So we’re not sure which comes first. Josh Casavant – Deutsche Bank: Thanks for that color. Maybe just switching topics, with regards to the GP interest, I guess the new guidance is that TGP will surpass that 50% profit share split, and TOO is not far away – I guess it’s getting close to that $0.525 split. Have you thought about maybe monetizing the GP units in any way? I guess you’ve gotten away from it in the past, but now that you’re getting to these higher hurdles have you thought about maybe a spinoff?

No we haven’t. From our point of view we think the GP is a clear value driver up at Teekay. We are not going to be affected by any changes in the GP law and so because we’re incorporated in the Marshall Islands. And so for us we think owning the GPs or having the GPs from two different MLPs, both of which have good growth profiles is really important. I think when you look at the MLP universe, a lot of people have been doing in-market consolidations whereas obviously we’ve been doing some in-market consolidations. But the real story about both Teekay LNG and Teekay Offshore is that they’re pointed toward strong international energy growth. And so we expect that to continue, and therefore we expect the GPs to continue to increase value. And there isn’t anyone who would ever in my opinion look to monetize the GP when you’re just up at the 50% split. This is when it gets interesting. Josh Casavant – Deutsche Bank: Thanks for your time.

Your next question comes from Michael Pack from Clarkson Capital Markets. Please go ahead. Michael Pack – Clarkson Capital Markets: Yes, hi everyone. I just had a question on the write downs of the conventional tankers. Can you talk about the test that is required on that and do you expect a test for your year-end results in Q4?

Yeah, hi Michael. Under US GAAP, it’s undiscounted cash flow analysis which is the first part of the test, so you have to forecast your projected cash flow for the assets. And if the undiscounted cash flows are below the carrying value then you go to step two, which is marking it to fair market value. So you’re correct – we typically would do these reviews in the year-end accounts. However, we started the work a little bit earlier just given the condition of the spot tanker markets and what we’ve seen over the last several quarters. And it became apparent to us that there was some impairment in some of these, especially the older tankers just given that they have a limited remaining life in those assets. So this is essentially in our way our sort of year-end review of our carrying values. Michael Pack – Clarkson Capital Markets: Okay, great. So we would not expect any further write downs at year end, I assume.

Based on the information that we have now and our intended use of the assets, I’m not expecting any further write downs in Q4. Michael Pack – Clarkson Capital Markets: Okay, great. That’s all I had. Good luck the rest of the year, guys.

Your next question comes from [Fotis Stianakulous from Morgan Stanley. Please go ahead. [Fotis Stianakulous] – Morgan Stanley: Yes, hi guys. Mike just gave me a pass and I want to follow-up a little bit on this question and ask you what kind of flexibility do you have in order to postpone write downs? I’m not asking so much about Teekay; I’m asking for other companies that they might be forced to take write downs in the future.

Well, it is based on management’s forecast of earnings for the asset so I guess it may differ from company to company, from management to management and relative to what the book value of the assets are. So there’s obviously some subjectivity but it should be obviously consistent with the reviews of the market. [Fotis Stianakulous] – Morgan Stanley: Thank you on that. I want to ask about the tanker market. We have seen over the last few days the market tightening. Rates are moving a little bit higher. Inventories, according to refining analysts are extremely low in Europe and Asia. Do you think that we can have a rally these winter months? And if yes, what will drive it and which routes do you think we’re going to see higher movement, and how long can it last?

That’s asking me to get out my crystal ball but let me give you a better view about where we think it is. We’ve been consistent that Q3 was seasonally weak but it was hit by a lot of strong headwinds if you talk about Libya, if you talk about the strategic petroleum reserve. And really what happened in our view is that the ton mile demand reduced and so while everyone talks about how much oil you would have, the fact of the matter was that because oil prices were in backwardation you had this drawdown on stocks. And the weather also now is going to be a more positive view so all the headwinds are switching around to being, I would call them not strong tailwinds but good ones. For example, we see that Libya is coming back and therefore you should see more West Africa oil flowing to the east, whereas what was happening was the West African oil was flowing up to take away the Libyan volumes. And so that led to shorter routes and so the Chinese were taking more from the Agee. So if things get back a little bit more to normal, Libya comes in and feeds the Med, then we’re going to get back to that situation we were in which was that we had surplus oil in the Atlantic which had to flow to the Pacific and that gave us those longer ton mile demand. If you want to get excited you should look and see what happened on the LNG side. On the LNG side, you suddenly had a lot more ton mile demand when all those LNG volumes were starting to flow out to the Pacific, and therefore you saw the big jump that can occur. I’m not in…