Welcome to Teekay Corporation Fourth Quarter and Fiscal 2016 Earnings Results Conference Call. [Operator Instructions]. Now for opening remarks and introductions I would like to turn the call over to Mr. Kenneth Hvid, Teekay's President and Chief Executive Officer. Please go ahead .

Before Mr. Hvid begins I would like to direct all participants to our website at www.teekay.com where you will find a copy of the fourth quarter of 2016 earnings presentation. Mr. Hvid will review this 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 results 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 contained in the fourth quarter 2016 earnings release and earnings presentation available on our website. I will now turn the call over to Mr. Hvid to begin.

Thank you, Ryan. Hello everyone and thank you for joining us today for Teekay Corporation's fourth quarter 2016 investor conference call. I'm joined this morning on what will be my first Teekay quarterly conference call by our CFO, Vince Lok. During our call today we will taking you through the earnings presentation which can be found on our website. Turning to slide three of the presentation, I would briefly review some recent highlights for Teekay Corporation. During the first quarter we generated consolidated cash flow from vessel operations or CFVO of approximately $290 million. Teekay's gas and tanker businesses performed in-line with our expectations in the fourth of 2016. However, the results from our offshore business were affected by certain events which included an operational incident in November 2016 relating to Teekay's offshore's [indiscernible] spirit UMS and related suspension of the Charter higher revenue since that time. As [indiscernible] highlighted on yesterday's Teekay offshore earnings call we have maintained an ongoing dialogue Petrobar and our main priority is to address their concerns and return the unit to operation as soon as possible. While Q4 2016 was a challenging quarter on the offshore front we have made good progress on cost saving initiatives throughout the year. For instance daily operating expenses for FPSO fleet have declined approximately 18% and our consolidated G&A expenses decreased by approximately 16% in 2016 compared to the prior year. Teekay Corporation reported a consolidated adjusted net loss of approximately $19 million or $0.22 per share in the first quarter of 2016 and we declared a cash dividend of $0.0550 [ph] per share consistent with the previous quarter's dividend. Since reporting earnings in November 2016 we have seen the oil price stabilized in the mid-$50 range which has had a positive impact on the sentiment of the…

[Operator Instructions]. We will take our first question from Michael Webber with Wells Fargo

I wanted to start with the FPSO, amendments and extensions probably the biggest piece of news from the suite of releases yesterday, can you give a bit of color I guess maybe starting with the Hummingbird, it seemed like rate upside which is certainly surprising I guess given the context I know you're able to add a tariff but can you maybe talk about the basis for that rate upside and I believe there were some short term extensions laid out there, so I want to kind of understand how much upside we would be talking about and maybe just EBITDA level contribution at the parent for both of that asset and the [indiscernible].

Sure Mike. I'll let Vince speak a little bit to the numbers but I think what we're seeing what we've been talking on our calls during the year as you recall exactly a year ago we were sitting looking at $1 million and everybody was talking about go down to 20 or could we go to 40 and we've been talking about improving psychology in the markets that’s throughout here and the conversations we're having with our customers have just continued to become better and better and I think the outlook is becoming more positive and that's obviously what we need for all of the discussions on our FPSO. So we have started at one end, we have a number of active dialogues and we are progressing in Hummingbird and Banff are the first ones where we think we have a better structure now that reflects a new oil environment that hopefully will continue to improve.

So Mike, these as you know are on headsoff of terms on these contracts so we're just in the process of finalizing them. So, we can probably share a little bit of information once we finalize everything but at a high level I think the key thing if you look at the Hummingbird as you know it was due to come off the field in September of this year and the key thing here was to make sure that asset stayed on the field for a longer period in this case another three years which would avoid a lot of layout cost and gives us the optionality. So, it does give us, I would say a slight increase to a minimum rate that kicks in October of 2017 and there is a tariff and I'll talk about the tariff maybe more in a combined basis for the two assets just given the commercial sensitivities. On the Banff, as we indicated there was again make sure we get the duration and asset stays in the field and the overall CFVO for that asset is roughly around the same—will roughly be around the same at current oil prices. We have made a little bit more upside obviously with the tariff. So just in terms of sensitivity for the two combined assets, as a rough rule of thumb for every $10 increase in the oil price going forward it translates into an additional $15 million of CFVO for the two assets just to give you a rule of thumb there.

That’s helpful, just with the Banff, let me make sure that was on till 2019 but there is a 60 day kind of walk away clause in the contract so with that sliding it upto 18 was that just bit of horse trading that kind of firm up the, as the firm employment period and did the talk and the conversations around what the actual use of life for that field, did that change at all? Is there still expected to run until '19 and if you're [indiscernible] again for a year after that firm period ends?

Yes, as you know when you come to the tailend of some of these large fields and that are producing for long time it's obviously getting harder and harder to say exactly how long the tail is at the end of it. So well this gives us is essentially instead of having the evergreen uncertainty it gives us a fixed date that we can start planning around and we will of course continue to have the ongoing dialogue with the customer here in terms of their planning as we move forward but at least we have a firm date where we can also go out and market this vessels and would have the option to take it away now and that just gives us an ability to better plan for the asset. So that's really the motivation for us going into this.

Two more quick ones and then I will turn it over. The [indiscernible] LNG I believe one is selling a short-term contract, one is still laid up, rates obviously improves off the bottom of the past six months. What's the plan for that last asset? Would you through that in a pool? Would you look for a long-term storage play with that, what should we expect in terms of employment for that asset for the balance of '17?

Yes, as we have talked about on previous calls, these are little bit of a niche assets that have been good on some of the shallow draft trace that we've seen especially occurring in China. So we are in dialogue now certainly the slightly better spot market ad has also helped here. Although I would say all the time these units have actually been a little bit separated from the rest of the pack because what they are good for is really transporting parcels into terminals where the larger LNG carriers cannot go in but they still carry 80,000 cubic meters. So they are good size needs vessels that have been able to command good rates as you recall we had them on to South America, the interest that we're seeing for the charters now are for some of the new terminals in China and those discussions are open.

And then last one, actually kind of after your results were announced this morning, one of your investment [indiscernible] entered into a long framework with Exxon with the idea of being providing FLNG technology and licensing, what does this mean for your investment in Savon [ph], how does that impact you guys and then is there any kind of timeline you can share or framework you can share to help us conceptualize how this change your view on that investment, it seems like a pretty big deal.

Yes, I think it's a great deal for Savon in terms of further expanding the use of the technologies there. Teekay has never had any special agreements around the FLNG technology so that something that Savon has pursued for the past couple of years and we have followed it and we are encouraged by it but other than that we are really just an investor in Savon and especially as it comes to the FLNG they are developing it as you know, Teekay is not active in the FLNG market today and we don't have any plans to become an active player you never know if it changes down the road but at present that’s not a segment that we are focused on.

[Operator Instructions]. We will take our next question from Fotis Giannakoulis from Morgan Stanley.

I would like to go on announcing the parent level, can you tell us did you repay any debt during this quarter at the parent level?

Yes the main debt amortization we have at the parent is the debt facility related to the three FPSOs and so the quarterly amortization is about 13 million so that's the run rate.

And, what is the plan of the repayment of this debt especially I'm talking about the 2020 loan the debt market is getting a little bit better right now, how do you envision repaying this loan and the second question I want to ask is at this point, cash flow of the parent is negative by $8 million it was this quarter which is partially supported digital payments for the daughters. I was wondering what is the purpose of the parent entity paying a dividend right now.

Well, I guess maybe just a step back a bit obviously it is a major focus of ours to continue to delever the parents balance sheet that's always been our stated goal to become close to net debt free. I think when you look at the free cash flow it was lower than what we expected for the fourth quarter for sure. But I think when you look at free cash flow going forward and sources of to delever the parents balance sheet there's kind of three main sources or catalyst. The first one is increasing distributions from daughters as you said including some inter-company loans from TOL, that's number one. The second is, the [indiscernible] LNG carriers that Mike Webber just referred to earlier that has a current drag on our field about $36 million a year and we're targeting to get charters for those assets in the second half of this year. Those in charters as a reminder due to [indiscernible] in April 2018 they go back to TGP, the third I would say, the three FPSOs that we just talked a little bit, we want to get extensions on two of the three with upside to oil prices. We still have the [indiscernible] which is actually a drag on our cash flow right now. We are in discussions on redoing that that contract and extending that out and ultimately to really sell those assets to continue to delever the balance sheet. So those are really the three, I would say the three key sources of cash flow and catalyst to the parents delivering plan.

So, the asset sale that you mentioned for Teekay Offshore for finding potential equity investors that also applies for the FPSOs at the parent level?

Yes. Absolutely.

That concludes today's question and answer session. Mr. Hvid at this time I would like to turn the conference back to you for any additional or closing remarks.

Thank you very much for your questions. We look forward to reporting back to you next quarter.