Welcome to Teekay Corporation's Third Quarter 2017 Earnings Results Conference Call. During the call all participants will be in a listen-only mode. Afterwards you will be invited to participate in a question-and-answer session. [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. Kenneth Hvid, Teekay's President and Chief Executive Officer. Please go ahead.

Before we begin, I'd like to direct all participants to our website at www.teekay.com where you will find a copy of the third quarter of 2017 earnings presentation. Kenneth and Vince 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 third quarter of 2017 earnings release and earnings presentation available on our website. I'll now turn the call over to Vince to begin.

Thanks, Ryan, and thank you all for joining us today for Teekay Corporation's Third Quarter 2017 Earnings Conference Call. Before Kenneth reports on the overview of the markets and our businesses, I'd to take a moment to discuss the financial results for the third quarter including the impact of the Brookfield transaction on our financial statements. Starting with Slide 3 of the presentation, in the third quarter, Teekay Corporation generated total consolidated cash flow from vessel operations or CFVO, of approximately $238 million. We reported a consolidated adjusted net loss of approximately $36 million or $0.41 per share. The adjusted net loss excludes asset impairments of approximately $244 million recognized in the third quarter, most of which were related to the Banff and Foinaven FPSO units as discussed in our earnings release. In connection with the Brookfield acquisition of a 49% interest in Teekay Offshore's general partner, Teekay and Brookfield entered into an agreement whereby Brookfield obtained certain participatory rights in the management of TOO's general partner, which resulted in Teekay deconsolidating Teekay Offshore for accounting purposes on September 25th. Subsequent to the closing of the Brookfield transaction, Teekay retains significant influence over TOO and accounts for its continuing investment in TOO using the equity method. As a result of the deconsolidation of TOO, Teekay recognized an accounting loss of $103 million in Q3 as detailed in our earnings release, which mainly reflected the difference between the book value and fair value of our investment in TOO on September 25th. However, this loss on deconsolidation was more than offset by the recognition of a $350 million deferred gain relating to previous sales of assets from Teekay Parent to Teekay Offshore. This gain is shown as an adjustment to non-controlling interest in our income statement. Now turning to our daughter company…

Thank you, Vince. Good morning and good afternoon, everyone. For those of you that have been listening in on our daughter company calls this morning, you can sense, it was a very active quarter for all of the Teekay companies. Turning to slide 4, I'll now provide a brief update on our recent transactions across the Teekay Group, transactions which we believe strengthens our respective balance sheets and provides strategic flexibility for our businesses. Each of which are operating in markets, where we are beginning to see promising signs of that recovery. In late September, Teekay and Teekay Offshore completed the previously announced strategic partnership with Brookfield, which strengthens in the Teekay and Teekay Offshore's financial positions and eliminates various financial guarantees between the two entities. In November, ISS and Glass, Lewis, two leading independent proxy advisor firms both recommended to vote for the proposed charter amendment to permit Teekay Tankers' strategic merger with Tanker Investments Limited or TIL. In October and November, Teekay LNG secured a further $327 million of long-term financings to fund its FSU for the Bahrain reclassification project and a MEGI LNG newbuilding for BP, while opportunistically raising a $170 million preferred equity issuance at a coupon of 8.5%. Turning to Slide 5; since reporting earnings in August we have been very busy taking delivery of multiple growth projects across the Teekay Group, some of which have already commenced their respective charter contracts generating new additional cash flows. Teekay Offshore has taken delivery of an FSO, two shuttle tankers and an ALP long-haul towage newbuilding. The Randgrid FSO has now commenced its charter contract with Statoil on the Gina Krog oil and gas field in the North Sea and we expect the Libra FPSO to commence its charter contract with a consortium of international oil companies…

Thank you. [Operator Instructions] Our first question will come from Mike Webber from Wells Fargo. Please go ahead. Please go ahead.

Yes. Hey, good morning guys. How are you?

Good Mike. How are you doing?

Good. Okay. Just a handful of questions for me, you've done a bunch of calls today already, but obviously a lot going on. I just want to zero in on Slide 7 for a second. I know this is really helpful in terms of laying out kind of the baseline EBITDA from the Parent's operating assets at least in the FPSO side. And just to make sure I'm clear on this when you look at the tariffs that are on all three assets now, the kind of the red and kind of raised white bar in terms of the tariff revenue that just reflects the Foinaven tariff revenue. Do you have a sense on -- one is that correct? And two, do you have a sense on, I guess, the magnitude of cash flow that can be turned out from the other two and how that could be augmented?

Hi, Mike. Yes, first of all -- all of those is right. That is the Foinaven annual incentive revenue that's recognized in the fourth quarter of each year. So this -- in this particular year, it's $8 million, so that is a once a year recognition. And then the rest of it, which is around $7 million for the fourth quarter, that's reflecting our forecast for the fourth quarter. And as Kenneth said, we don't really have full run rate production in the fourth quarter, just given to see the scheduled maintenance on the Foinaven as well as the Hummingbird, which we expect the production to pick up sometime during this quarter. So you don't have a full quarter. So we just want to reflect what the run rate would look like in the last column there, which would bring you up a little bit higher even at $55 Brent and what the sensitivity would be at higher Brent prices. So I think going forward -- yes, go ahead.

No. I just trying to -- $7 million to $8 million on an annualized basis, so if you just look at '18 kind of the base load EBITDA potential for the three and then if you would aggregate the tariff upside for the three into kind of a variable bonus call maybe. How much aggregated tariff revenue do you think you could realistically look at based on the assumptions you made with the existing red and white bar?

I guess there's two parts to that question, I guess, maybe you're asking what the Foinaven annual revenue could be say in 2018, that's a little hard to predict obviously, because we don't yet know what the production will look like. We did have some downtime for maintenance on the Foinaven during 2017. We'll probably have some also in '18, but perhaps not as much. So that $8 million could be -- I would say maybe more on a normalized basis in the $10 million to 15 million range, especially as Brent prices continue to -- or production continues to increase. In terms of the run rate for the rest of the three units apart from that one-time fourth quarter number, I think what we have portrayed here in the last column is a pretty good run rate number depending on what Brent price you want to assume. I think the production for these FPSOs at least for the next few quarters is pretty represented like you see in that last column.

Kenneth allow me, if I just kind of run through the Parent level operating assets, you got the two charters in LNG carriers that market's obviously firming. I guess one, what kind of rate are those on now and if they are on maybe legacy contracts when would they find renewed market exposure to maybe take advantage of a firmer environment? And then two, do you have the scale to really trade those on a spot basis as an independent, were you at some point thinking about either joining a pool or finding another way to kind of aggregate spot capacity?

Yes. So as a reminder, the Arctic and the Polar are on a charter to Teekay Parent from TGP and they are scheduled to be redelivered to TGP in April next year. At present they are on new contracts and I'd say it's largely [a wash] between the in-charter and the charter out rate. So that's an improvement over what we saw in earlier part of the year. It's encouraging, but we are seeing the spot market responding as it's done especially over the past quarter. And we have, I'd say pretty good interest for these vessels as well. So we are already in talks about extensions beyond the April charters, which are actually back-to-back with the Teekay charter from TGP. So obviously we'll be discussing that with Mark Kremin in terms of how do we then proceed with these vessels concerned. In terms of pool cooperation, I think we feel we have a pretty good look and performed pretty well against the pools that are out there. So at present no plans to join any of them. As you know a bit of spot exposure and as Mark reported on earlier this morning, we've also seen our vessels trading well, particularly because the TCE tariffs are trending up, and we're getting much higher utilization on these vessels, which is a big positive for the entire segment.

Just one more for me and I'll turn it over. For Vince, kind of putting those two, those first two questions together I guess, when you look at the cash flow that will be coming off your operational FPSOs at the Parent level, it seems like it should trend higher in '18 absent unforeseen event. And at a minimum it sounds like -- looks like the burn -- when those charters roll off that the burn associated with the carriers is lightening up and could even become a bit positive towards the end of the charter. From a Parent cash, operational cash flow perspective, is there enough of a material difference year-on-year that it changes the way you think about handling the service on the Parent level debt load? And maybe can you kind of walk through how you think about handling that and kind of the loan refinancing work you [guided there]?

Sure. Well first of all the Brookfield transaction was a big step in the right direction, which allowed the Parent to delever by $140 million, as well as removing a lot of the debt guarantees and swap guarantees in Teekay Offshore. So that was a big milestone. Going forward you are right, our focus is very much on increasing the free cash flow at the Parent and there are several sources of that. So we talked a lot about the FPSOs, potentially in a strong oil price environment that sort of kicks in the fourth quarter. We have the LNG burn that basically is gone. Now that we have fixed both the Arctic and the Polar and those charters expire -- those in-charters expire in April 2018. We have already terminated the two conventional tankers, so that burn is also gone. And of course there's a lot of discussion about TGP distributions, so that's another source. And I think when we are looking at the refinancing and debt, I think we would like to continue to delever the balance sheet as we approach 2020. So we are taking a multifaceted approach here in terms of both increasing free cash flow as well as chipping away at that maturity before 2020. I think, especially with the strong macro environment I think we should be in a good position to look at various alternatives to refinancing that.

And I think as you alluded to Mike, I mean a big focus for us this year has really been to remove some of the overhang, which I think is fair to call it that we entered into the year with and as Vince is saying as we are paying up some of those structures and we are facing what we think are market recoveries pretty much across the board in all of the segments. We are in here not knowing exactly which one is going to come first. I think we feel pretty good as we have a toolbox of alternatives here that we obviously are very focused on which runs through to pull first.

Thank you. It appears there are no further questions at this time. I would like to turn the conference back to Mr. Kenneth Hvid for any additional or closing remarks.

Well thank you for participating in our call this quarter. We look forward to reporting back to you next year.