antoninscalia Posted August 31, 2018 Share Posted August 31, 2018 Anyone been following this company? Could be interesting with Brookfield's involvement. Link to comment Share on other sites More sharing options...
chrispy Posted August 31, 2018 Share Posted August 31, 2018 I can't determine whether it's better to own it thru BBU or to buy some TOO now that it is at a low. I own a good chunk of BBU. Brookfield has received higher yielding debt from Teekay Offshore as well. Link to comment Share on other sites More sharing options...
redhots Posted August 31, 2018 Share Posted August 31, 2018 Here are a couple of write-ups... https://seekingalpha.com/article/4165045-bonhoeffer-fund-partner-letter-q1-2018 https://jdpcap.com/wp-content/uploads/2018/04/Teekay-FINAL-PRESENTATION-2.pdf Link to comment Share on other sites More sharing options...
JRM Posted August 31, 2018 Share Posted August 31, 2018 I own through TK. There is also nice exposure to TK LNG partners with no K-1 to mess with. Link to comment Share on other sites More sharing options...
Deepdive Posted August 31, 2018 Share Posted August 31, 2018 I believe TOO is treated as a C Corp for tax purposes. Check the IR website. Link to comment Share on other sites More sharing options...
JRM Posted September 1, 2018 Share Posted September 1, 2018 I believe TOO is treated as a C Corp for tax purposes. Check the IR website. I think TK LNG Partners has a K-1. Link to comment Share on other sites More sharing options...
bjakes00 Posted September 6, 2018 Share Posted September 6, 2018 The key questions here, which I don't have the answer to, are likely: 1) Who are the contracts with? 2) Where are the oil fields that they are serving on the cost curve? Basically if oil comes down to $40/bbl, how much strain will the majors they are working for take? Link to comment Share on other sites More sharing options...
chrispy Posted September 6, 2018 Share Posted September 6, 2018 I believe those questions are covered in the PDF s that redhots posted. It is not economically viable to shut down FPSO/FSOs in a down oil market Link to comment Share on other sites More sharing options...
peterHK Posted September 6, 2018 Share Posted September 6, 2018 We saw in the last oil price collapse that revenue stayed fairly intact so I believe the theory that it's a stable business; this is almost a BIP sort of play. Big question I had was about this promise of $200mn of EBITDA improvement that was supposed to come this year. I didn't see it last quarter, and their outlook for Q3 was just as bad as Q2. Haven't done in depth analysis on this, but BAM are no fools, so I suspect it's worth the time. Link to comment Share on other sites More sharing options...
walkie518 Posted September 6, 2018 Share Posted September 6, 2018 Here are a couple of write-ups... https://seekingalpha.com/article/4165045-bonhoeffer-fund-partner-letter-q1-2018 https://jdpcap.com/wp-content/uploads/2018/04/Teekay-FINAL-PRESENTATION-2.pdf The assumption in the JDP paper is that Teekay is worth 10x EBITDA. This feels a bit like what Fairfax is doing with Seaspan... Link to comment Share on other sites More sharing options...
Packer16 Posted September 6, 2018 Share Posted September 6, 2018 There is more support for the 10x multiple as a direct comp (Knot Offshore) has a higher EBITDA multiple & there are one 2 competitors in the shuttle tanker market. Although Seaspan has excellent management & counterparties, container lease & shipping much more competitive than shuttle tankers. Packer Link to comment Share on other sites More sharing options...
kab60 Posted September 6, 2018 Share Posted September 6, 2018 Just took a quick look. What's contracted backlog and contract length like? JDP writes 5 years, but I couldn't find it. Link to comment Share on other sites More sharing options...
Packer16 Posted September 6, 2018 Share Posted September 6, 2018 It is detailed in the 10-K & it varies depending upon ship type and arrangement. Packer Link to comment Share on other sites More sharing options...
walkie518 Posted September 6, 2018 Share Posted September 6, 2018 Better to review more recent filings, but in July 2017, Brookfield marked contacts at 4 years and they expected extensions https://bbu.brookfield.com/en/press-releases/2017/07-27-2017-035001869 Link to comment Share on other sites More sharing options...
petec Posted September 6, 2018 Share Posted September 6, 2018 Intrigued by this. Just starting DD. Not immediately obviously dirt cheap on their nonGAAP DCF measure. At first glance I can't justify the claims linked above of 25-20% FCF yields. How does DCF inflect from here? Maintenance capex looks stupidly high (p10 of this: https://www.teekay.com/wp-content/uploads/2014/12/TOO-Q2-18-ER-Presentation-v_FINAL_FINAL.pdf). Much more work to do! Link to comment Share on other sites More sharing options...
Packer16 Posted September 6, 2018 Share Posted September 6, 2018 There a few things that are going on here. You have underearning FPSO/FSO assets that are being provided to some users on a temporary price reduction basis. These price reductions should be unwound in 2019. You also have some assets that are not generating any revenue. These include some assets that may never generate revenues but if oil stays high there is a chance & finally the re-investment opportunity from FPSO/FSOs to shuttle tankers should be able to generate the before mentioned 20/25% DCF yield on today's prices. The depreciation is high due to restating shuttle tanker life from 25 to 20 years and depreciation associated with some assets TOO would not invest in if they were investing today. Packer Link to comment Share on other sites More sharing options...
petec Posted September 6, 2018 Share Posted September 6, 2018 Thanks. Aside from the obvious (20F etc) what would you advise I read? Link to comment Share on other sites More sharing options...
Packer16 Posted September 6, 2018 Share Posted September 6, 2018 Take a look at the BBU disclosures as they purchased this entity as one of their higher expected return investments. TOO also discloses a quarterly DCF bridge but it is quite noisey with all of the FPSO/FSO activity. There is also a Shuttle Tanker stand alone financials on the TOO websites which provides some insight into that business. Packer Link to comment Share on other sites More sharing options...
petec Posted September 7, 2018 Share Posted September 7, 2018 Thank you. Link to comment Share on other sites More sharing options...
Snorky Posted September 7, 2018 Share Posted September 7, 2018 I do not see any positive FCF at all. What i am missing ? Link to comment Share on other sites More sharing options...
bjakes00 Posted September 7, 2018 Share Posted September 7, 2018 I do not see any positive FCF at all. What i am missing ? Can you elaborate on which numbers you are looking at and provide how you are getting to FCF? Then let's discuss further. Link to comment Share on other sites More sharing options...
petec Posted September 7, 2018 Share Posted September 7, 2018 I do not see any positive FCF at all. What i am missing ? Probably all the adjustments management are making to make themselves look better ;) Note: this is a joke, before all the bulls get snarky. Link to comment Share on other sites More sharing options...
Snorky Posted September 7, 2018 Share Posted September 7, 2018 Im just looking at morningstar and deduct capex from operating cash flow. Link to comment Share on other sites More sharing options...
peterHK Posted September 7, 2018 Share Posted September 7, 2018 Im just looking at morningstar and deduct capex from operating cash flow. Last 12 months I believe they had significant new build obligations that were being completed. Last quarter they generated $47.8mn cash from ops and spent $14.4 in capex, with $10.4mn in asset sales, so really only about $4.4mn in net capex (data from CapIQ). My question is really what's the normalized level of FCF from the business. I know capex was elevated recently, but I don't have a great sense of the earnings power or margins or capex requirements yet as I haven't really looking into this in dept. Link to comment Share on other sites More sharing options...
petec Posted September 7, 2018 Share Posted September 7, 2018 Last quarter they generated $47.8mn cash from ops and spent $14.4 in capex. That's a very different number from the $53m in maintenance capex cited in the presentation linked above. Link to comment Share on other sites More sharing options...
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