Welcome to Teekay Corporation’s Second Quarter 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, sir.

Before Mr. Evensen begins, I would like to direct all participants to our Web site at www.teekay.com, where you will find a copy of the second quarter 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 could cause actual results to materially differ from those in the forward-looking statements is contained in the second quarter 2011 earnings release and earnings presentation available on our Web site. And I’ll turn the call over to Mr. Evensen to begin.

Thank you, Kent, good morning, everyone, and thank you for joining us today for Teekay Corporation’s second quarter earnings call. I’m joined this morning by our CFO, Vince Lok; and for the Q&A session, we also have our Group Controller, Brian Fortier. Beginning on Slide 3 of the presentation, I will briefly review from recent financial highlights for Teekay Corporation and our three daughter companies. For the first quarter of 2011 or second quarter, excuse me, Teekay Corporation generated a consolidated $149 million of cash flow from vessel operations or CFVO, an increase of approximately 9% from first quarter. We reported a consolidated adjusted net loss of $36.3 million or $0.51 per share in Q2 on a consolidated basis. TK’s diversified business model continues to be an important source of differentiation and fixed-rate cash flows, especially in the current weak spot tanker market which is primarily responsible for our loss this quarter. We continued to experience a high level of business development activity in our offshore business, which paid off in June with the signing of important contracts in both our FPSO and Shuttle Tanker business. I’ll talk further about these in a moment. Together these projects are expected to add approximately $2.7 billion to our existing $12 billion portfolio of foreign fixed-rate revenues and will increase our future fixed-rate CFVO. In July we paid our usual second quarter dividend of $.31.625 per share or $1.27 annualized, which is supported by the growing amount of fixed-rate cash flows, generated by our direct owned assets and the stable dividend cash flows we receive from our general partner and limited partner investment in our two master limited partnerships. We also continued to return capital to shareholders under our existing $200 million share repurchase authorization. Since our last earnings conference call on May…

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 Q2 income statement against an adjusted Q1 income statement. Net revenues decreased by approximately $10 million primarily due to vessel sales and redeliveries, a higher number of dry dock days in Q2 and repositioning costs associated with the delivery of the shuttle tanker the Peary Spirit. These increases were partially offset by the new time-charter rev contract the Arctic Spirit which commenced in late April. As a reminder a portion of the revenue we earn on the Foinaven FPSO is dependent on various annual operational performance measures, oil production levels and the average oil price for the year. As a result for accounting purposes this portion of revenue is recognized only in the fourth quarter of each year, and based on the results for the first half of the year there was approximately $20 million of unrecognized revenue at the end of the second quarter which will be recognized in the fourth quarter of 2011 provided our operational performance for the year is similar to that in the first half of the year. This would amount to $40 million of incremental revenue in the fourth quarter on an annualized basis. Vessel operating expenses increased by $11 million primarily due to seasonal maintenance activity for the FPSO fleet, higher crew cost as a result of wage scale increases as well as the delivery of shuttle tanker new buildings and two MR tankers that are bare-boat chartered in. As usual we typically schedule more of our dry dockings and maintenance activities for our North Sea FPSO and shuttle tanker fleets during the spring and summer months. Time-charter hire…

Thank you, Vince. To conclude our business development initiative yielded important new contract wins in our FPSO and Shuttle Tanker businesses during the second quarter and were encouraged by this strong pipeline of new project tender and asset acquisition opportunities. However we’re being very selective in targeting higher unlevered returns. While we reported a net loss for the quarter due mainly to the persistent weak spot tanker market, TK parent and the daughter companies remained financially well-positioned. Our diversified business model and steps we are taking to further build upon fixed rate business and reduce our spot tanker market exposure have us on the right path to yield better results in the quarters ahead. Operator, we are now ready to take questions.

(Operator Instructions) Please stand-by for your first question. Your first question comes from Justin Yagerman of Deutsche Bank. Please go ahead. Justin Yagerman – Deutsche Bank: Hi. Good morning, guys. I hope all is well.

Hi, Justin. Justin Yagerman – Deutsche Bank: I wanted to dig in a bit. You went into depth on a number of the LNG projects and opportunities that you’re involved in as well as Offshore. I think it’d be helpful if you guys could give a sense of expected returns or projected returns on current projects, duration of average project and an average capital employed when thinking about these projects and how we should think about the pace of them on a go forward basis.

Sure. For competitive reasons I can’t be totally transparent on it but on our offshore transactions we’re targeting on the FPSO about 12% to 15% to 16% returns. And that depends upon how complex the conversion is if it’s a new building and generally the longer the contract the lower the IRR is, which you would expect. Justin Yagerman – Deutsche Bank: Those are levered or unlevered returns?

Those are unlevered returns. Justin Yagerman – Deutsche Bank: Okay.

And the way we like to look at it is unlevered because the interest rates will take care of itself and in our MLPs you need to have that stability of having unlevered. On our LNGs on the fixed rate side of things on the point-to-point transportation there I’m seeing returns of 9% to 10% on an unlevered basis and on the FSRUs we’re targeting 10% to 15% depending on the project. And so some of the FSRUs are shorter dated where people need them for a temporary reason but then we’re willing to take that residual rollover risk because we’re confident in the growth of the market. And the same thing’s true on the FPSO side. That’s a risk we’re comfortable taking – that rollover risk. Justin Yagerman – Deutsche Bank: And shuttle tankers? I don’t think you mentioned that.

Shuttle tankers as I said were sitting at about 10% to 12%. Justin Yagerman – Deutsche Bank: 10% to 12%. Okay. Great, that’s helpful. Thank you. And my next question – we saw Teekay Tankers take in two Aframaxes and you guys chartered out two at the same time. Given your view that ‘12 and ‘13 should be improving years should we expect to see more of this conventional trading activity either at Parent or at Tankers?

I think you should expect to see less trading activity up at Teekay Parent. That’s an activity which we’ve pretty much given over to Teekay Tankers and so I think it’s good that Teekay Tankers started to get into the in charter side. It was a good pair transaction but I think if we were more aggressive as we move into late 2012, 2013 if the opportunities present themselves then you’ll find Teekay Tankers using that. I think it’s a good use of capital and Bruce Chan and his crew are working pretty hard on those various activities. But when you look at the results for the second quarter I think our Tanker guys did a really bang up job in terms of the Aframaxes they got really good rates when you compare it to the averages. Justin Yagerman – Deutsche Bank: I guess following along the same theme, if you guys aren’t going to be doing tanker trading activity at Teekay parent, would you consider buying new builds for delivery in ‘13 or ‘14 as you look out to a potentially better supply-demand environment?

I think the – most of the capital that we’re deploying up in Teekay Corporation is used for more longer term fixed rate projects. The tankers that we would be ordering up at Teekay would have to have long-term fixed rate contracts before we would consider them up at Teekay. Otherwise, we have a subsidiary, Teekay Tankers, that’s their job. And you will have seen in late last year we ordered a VLCC for 2013 delivery, and that was Teekay Tankers that did that. And that was coupled with a five-year charter. So you should expect to see that growth in Teekay Tankers rather than at Teekay parent. Justin Yagerman – Deutsche Bank: Okay. So I guess with Teekay Offshore having done its first kind of solo deal, and with Teekay Tankers now shouldering the responsibility for ordering tankers for the future, I don’t know at what point in time LNG gets there. I mean how should we be thinking about what projects make their way into Teekay parent, and what you guys are going to be wanting to warehouse on your own.

Well, when we – our goal is to have the daughters be able to make investments directly. So in fact all three daughters – excuse me. All three daughters have now made direct investments whereas when we started they relied upon Teekay parent in order to warehouse those. Obviously big projects like the Canara FPSO you need the sponsor to help you out with. But our goal is to have strong enough financial strength so that the daughters can make their own investment. And that frees up Teekay Corporation so it can hire return projects like you saw with the wind farm initiative that we have. And I think our innovation group has a lot of good ideas looking forward. And so as I look over Teekay, I think there’s a lot of skill sets that we can employ, and that’s what we’re looking, working together with some of our customers as well as some of our strategic suppliers. So you should expect higher return projects to be resident of the Teekay Corporation. Justin Yagerman – Deutsche Bank: Okay. Great. That’s really helpful. Thanks for the time, guys. That’s all I have.

Thank you.

Thank you. Your next question comes from Michael Webber of Wells Fargo. Please go ahead. Michael Webber – Wells Fargo: Hey. Good morning, guys. How are you?

Fine. Michael Webber – Wells Fargo: Hey. My first question is on the buybacks. You guys picked up the pace the last three months at 62 million, and obviously with the recent pricing action it’s certainly advantageous to buy more down here. The current pace points to a November completion. Is that reasonable? And I guess how aggressive do you guys plan to be in terms of buying back the rest of that stock?

Well, Teekay has a track record of announcing share buy-backs then completing them, and we look at it on incremental basis. So we’re systematically going through the 200 million and as Vince said in his remarks, we see the current share prices being compelling value especially when you see it against the sum of the parts. So we see it as an investment and in reference what Justine was asking earlier, we look at share buy-backs as we look at another investment. But right now it looks like a good investment since Teekay is selling at an extraordinary discount to its sum of the parts. Michael Webber – Wells Fargo: Right. Right. I guess in terms of pace and I guess from a modeling perspective kind of keeping your pace from the last three months kind of flat sequentially, is that probably appropriate or reasonable.

We don’t give guidance on exactly what the pace of it is. Michael Webber – Wells Fargo: Okay. Fair enough. Fair enough. And I guess I don’t know if you can comment on this either, but I mean given where the stock is and if we do hover down here for a while, you guys do have a history of buying back shares, are we in a situation where you guys would potentially look to another authorization if the stock does stay down here?

That’s up to the Teekay board, but we look at each authorization when we look at how much excess capital we have going forward. When we complete the existing 200 million then that’s something the Teekay board can look at. Michael Webber – Wells Fargo: Fair enough. Fair enough. I wanted to follow up on one of the questions on your FPSOs. You mentioned five-day awards this year. Can you guys give some color in terms of how many of those tenders you guys are actually involved in right now and what stage those are in?

We’re involved in several tenders. For competitive reasons I don’t want to be more specific than that, but we’re restricting ourselves to the North Sea and Brazil. And so that’s what we’re looking at, and in addition there’s various acquisition opportunities of Offshore units with existing contracts. So that’s something that also is in the mix for us. Michael Webber – Wells Fargo: Fair enough. I guess in terms of size then obviously the Jor Bear was pretty big relative to what you guys apparently have. Are the tenders you guys are involved in now or what’s in the marketplace around that size? Or is it kind of throughout the entire spectrum.

That really is dependent on the field, but in general our new buildings, if we’re going to have a new building FPSO, you should see it in the range of 600 million to one billion. And if it’s a conversion it could be anywhere from $250 million to $600 million. I think what’s also important is that we are teamed up, for example, in Brazil with Odebrecht. Michael Webber – Wells Fargo: Right.

So we think that’s an important component. We’ve done the same thing on our LNG side. So you should expect us to employ joint venture partners if the level of activity is such so that – and that way we share the risks… Michael Webber – Wells Fargo: Right.

and also get some local talent. Michael Webber – Wells Fargo: Yeah. No, that’s helpful. Actually kind of a similar question on the LNG side, and maybe you can’t break out I guess the number of tenders. And you mentioned you’re going to be hearing back hopefully by the end of the year on some. Can you maybe give a breakdown in terms of you know I guess what you’re going after, FSRU versus kind of traditional point-to-point carriers?

Yes. We’re going after several projects. We’re actually looking at more FSRU projects than point-to-point. But we expect that as a lot of the liquefaction plants that we have – see coming on in Australia and other areas come on that we’ll probably see more demand for point-to-point tenders. But again, this is demand that comes from the customers based on their long-term projects. So as these projects get FID, then they’re going to want to lock down their transportation requirement. Michael Webber – Wells Fargo: Fair enough. That makes sense, and within the context, I guess, of the return you do that a little earlier from point-to-point versus FSRU. And I guess I’m curious – are you seeing any kind of creep in the spread between those returns as you’re seeing, you know, some considerable strength in the point-to-point market? Are those return – is that gap getting a little bit narrower right now? Or is it still pretty wide between FSRUs and point-to-point?

I would say it’s wide between the point-to-point and the FSRUs. The FSRUs there’s a certain scarcity value built into it. You have to have – and it really depends upon the speed to market. Ultimately FSRUs are going to move into the new building realm. But given how tight shipyard capacity is, you’re – those projects, you can’t really get a new build. So that pulls you down into the conversion market and where you get paid a premium in order to deliver earlier. And that’s really what’s happening on the LNG side, which is that there’s such incremental near-term demand for LNG that customers are willing to pay up in order to have a solution faster. Michael Webber – Wells Fargo: All right. Now that makes sense. There’s actually – there’re a couple of higher profile point-to-point fleets that are up for bid right now. Can you guys I guess comment, and I’m sure it’ll be generally, but how closely you guys have looked at those and whether or not specifically within the point-to-point market? Are you looking at on-board transactions or is it more single one-off assets or special situations on individual assets?

For competitive reasons, I don’t comment on potential acquisition opportunities. Michael Webber – Wells Fargo: Fair enough. That’s actually all I had. I appreciate the time, guys.

Thank you.

Thank you. Your next question comes from Gregory Lewis of Credit Suisse. Please go ahead. Gregory Lewis – Credit Suisse: Yes. Thank you and good morning. Peter, you mentioned that there were ten FPSO contracts signed year-to-date and there’s five – I guess first in looking at those ten, how many of those were actual new construction FPSOs and how many of those were conversions of tankers?

I would say it was about half and half. Gregory Lewis – Credit Suisse: And are those conversions primarily – should we be thinking more along the line of the medium size assets or are any of those VLCCs?

Yes, some of them are VLCCs, but when you get to some of the VLCCs in the pre-salt, if you’re using a VLCC, that’s just a very small part of the whole top side, so in point of fact, it almost feels like a new building. But I think you find, based on the reservoirs, you’re looking really at VLCC conversions down in Brazil and if you’re looking in Asia, you’re looking pretty much at Aframax or Suezmax conversions. Gregory Lewis – Credit Suisse: Okay. Great. So in other words, when we think about the five to eight later this year, when you talk about the 120 plus visible projects, if we think that maybe half of those or 70% of those gets done and we think half of those are potential conversions, it sounds to me that there’s the opportunity for multiple tanker conversions, especially given the backdrop where we’re at; is that sort of a fair statement?

Yes, I think it is. And the other thing is that a lot of the big VLCCs will be used as floating storage units because in the really big fields down in Brazil you have to aggregate the oil before you can transport it. Gregory Lewis – Credit Suisse: Okay. So in thinking about that and your inroads into Brazil at this point, it sounds like there’s FPSO tenders going on down there. Are there also tenders for FSOs at this point?

Yes, there are. Gregory Lewis – Credit Suisse: There isn’t a real slide – is that a single-digit number? Is it five? Is it ten? Is that something you can talk about?

That’s a single-digit number more in the midsize I would say. Gregory Lewis – Credit Suisse: Okay. Great. And then just...

When you see the amount of oil, obviously we announced our shuttle tankers, and they’re going to go to aggregate stations because when you move oil, even from a floating unit to a floating unit that’s a cabotage trade. That needs a shuttle tanker. But ultimately you either have to ship it out on a shuttle tanker or in benign water so you can put it onto a conventional tanker. When you see the amount, the doubling of oil production down in Brazil, you see the amount of the international oil companies have to come up with. They have to build their own distribution networks, which is similar to what we saw in the North Sea. But of course it’s happening faster and at a greater magnitude than what we saw in the North Sea. Gregory Lewis – Credit Suisse: Okay. Great. Just thinking about the two spot LNG vessels, clearly it looks like we’re in the midst of a potential bull market in LNG. In other words, I realize the issues in Japan have definitely created demand for LNG, at least in the short-term. Could we think that this is actually going to be a real shift in this industry where this is now a long-term bull market? Or is it more just a short of a blip on the radar? How do you merge those two thoughts?

It seems to me that the Atlantic gas price is going to stay at a sustainable arbitrage to what you’re seeing in the Pacific. What simplifies the oil market is that it’s a worldwide market, whereas the gas market is a regionalized market. And so with the price of gas in Japan being $14, if you have the price of gas as $4 for example in the U.S. or $5 that sets up the opportunity to make a lot of money on that arbitrage. That’s what’s really happening, which is all the excess gas is flowing out to the Pacific. It’s a bigger issue in Japan. I think we have to think that the price of gas in the Pacific is going to stay higher for a longer period of time. That’s before you get to the issues in Europe. They get droughts and they have their own questions on how much dependency they want to have on Russian gas. We’re actually very optimistic about that. Our strategy isn’t to order ships and then play them on the stock market. Our strategy is to have a view on chartering them. Clearly a lot of people have come into the market and they’re wanted to lock up tenants. And we’re seeing new players come in specifically more oil traders and financial players are coming in and they need a logistics partner. Gregory Lewis – Credit Suisse: Okay, great. And just to follow-up on that real quick. In thinking about the LNG vessels that are on short-term contracts and how do you think about that as it fits into the MLP structure which has historically been vessels on long-term contracts? In other words should we think that while there will be spot vessels in TGP it will be a small portion of the fleet?

Well I want to emphasize that the Artic Spirit and Polar Spirit – that’s a historically charter that we had. So those are – all of our LNG vessels at TGP right now are chartered out long-term. The Artic Spirit and Polar Spirit were chartered in by Teekay. So it’s Teekay that’s taking that risk, not TGP. And so I wouldn’t exclude the fact that TGP could get into the short-term charter market but primarily we’re not going to be spot player. We’re going to move into the short-term market and I think what we’re seeing in the LNG market is the time period of charters is reducing. So we probably won’t see 20, 25 year charters. We’re going to see more like five, 10 and 15 year charters. Gregory Lewis – Credit Suisse: Okay, great, and then just one last follow-up question. It looks like in a broker report this week that it looked like Teekay actually scrapped one of its 19 year old Aframaxes. First, is that correct and could just give a little bit of the thought process behind why that vessel was targeted for demolition?

We actually on sold it but in all likelihood it’ll either get short-term employment or else it’ll be scrapped. We’re not scrapping it ourselves. But that actually was a real calculation. We looked at what it would take to go through force special survey and in our opinion the likelihood of being able to pay back the force special survey and trade it meant that – and the near-term trading meant that it was better to scrap it. And I think a lot of other owners are going to come to that conclusion as well. Gregory Lewis – Credit Suisse: Let’s hope so. Okay, guys, thanks for the time.

Thank you.

Thank you. Your next question comes from Urs Dur from Lazard Capital Markets. Please go ahead. Urs Dur – Lazard Capital Markets: Hi.

Hi, Urs. Urs Dur – Lazard Capital Markets: How are you? On the FSRU business right now we’ve seen most of it on the conversion business, and it looks like for you it’d be much more competitive on a new building basis. Is that – you don’t have any assets you think you can buy to convert. You think you’re really going to go after a new building basis. Do I understand it correctly?

No. We’re after both. But… Urs Dur – Lazard Capital Markets: Okay. Great.

We have access – we believe we have access to existing tenants we can convert. Urs Dur – Lazard Capital Markets: Okay. No, that’s excellent. Can you give us how many tenders are out there right now? How many possible deals are out there right now, globally?

Again, for competitive reasons I don’t want to say, but if – on specific deals. But if you want to talk about in general, we see about 10 FSRU projects we can identify. Urs Dur – Lazard Capital Markets: Okay. Good. And we’ve heard, actually a higher number. But either way it’s a nice margin business. Everything else really been covered, except I was wondering, can you give me a little bit of an idea of what you expect from the wind business? Is that going to be a really material thing that we have to model today? Or how do we want to look at that?

Well we’re – as I said, we’re setting ourselves up in order to be able to play there. But the way Teekay operates is more on a build to suit. If we get a long-term contract then you’ll find us going into the wind market. But our general rule on these specialized vessels is that we first get the contract and then we’ll build or convert a shipment order to meet that requirement. So that’s why it’s so important that you work very hard with the customers on the design of the unit. I definitely believe that the wind farm market is going to be there and ships are required. We’re making sure we have the best technology going forward. And right now I think our dynamic positioning and the high deck load capacity of our shuttle tankers is a real advantage over the way they’re building wind farms offshore right now. Urs Dur – Lazard Capital Markets: Great. So, obviously very much the starting stages. We’ve just received some questions on that, and I think you know it’s a great, interesting idea. And this is probably way beyond anything you want to mention, but if you do go into wind you’re looking at contracts, is that something you would want to place in one of the existing dropdowns, keep it in the parent, or start a new dropdown? Do you think they would be substantial enough, say years down the road, for a new and separate dropdown business?

I think it’s too early to say where that would be resident. Urs Dur – Lazard Capital Markets: Right. Excellent. That’s what I thought. Thank you for your time.

Thank you.

Thank you. Your next question comes from Justine Fisher of Goldman Sachs. Please go ahead. Justine Fisher – Goldman Sachs: Good morning.

Good morning. Justine Fisher – Goldman Sachs: I just have a question about the role of the parent company going forward. I know that you guys have been putting most of the assets at the daughter companies as they are fully financed and delivered. Does the fact that you did this one deal at Teekay Offshore did that mean that you’re going to start doing more of your asset acquisitions at the daughter companies? And if so, as the parent slowly reduces it’s in-charter fleet does the parent become an asset-less company?

I think it actually sets up the potential for Teekay to go in – the corporation to go in a number of directions, but in general we’re trying to get more excess capital at Teekay Corp. So we watch our net debt level very much up at Teekay Corp. So the shuttle tankers were done directly, whereas the FPSO was so big that you needed Teekay Corp. in order to warehouse it. But in general, as I said earlier, we want the daughter companies in order to build the – or to be able to order and take the investment decisions directly. And it’s helpful to us because the more the daughter companies grow then the value of the general partner goes up, and I think that’s the biggest catalyst for increasing the value at Teekay. Obviously we’re buying back shares, that’s a near term. We’ll raise the value per share, but the greatest way we can increase the value of Teekay is to put good fixed-rate growth into our MLPs. Justine Fisher – Goldman Sachs: Maybe I missed this number in the presentation, I’ve found I’ve done that in the last couple calls, I’ve missed some of Vince’s numbers, but how much of the debt at Teekay parent is associated with the owned tanker as a Teekay parent. I see you broke the fleet out in the earnings release. And so how debt is actually secured by those vessels versus debt that is currently warehouse facilities for vessels that will eventually be transferred to the daughters?

Well, if you look at Slide 11, out of the $700 million of net debt of the parent $450 million of that is related to warehoused new building installments. So the remaining $250 million on a pool basis is really relating to the other existing assets on the water, so that’s the existing FPSOs and the conventional tankers. Justine Fisher – Goldman Sachs: Okay. So I guess it’s the $267 million that is actually encumbered by assets at Teekay parent, and so if Teekay were eventually to transfer those assets to the daughter companies you’d have to transfer that debt as well or repay all that debt?

Yes. As you know we also have a large amount of un-drawn revolvers as well, the $267 is just the drawn amount. Justine Fisher – Goldman Sachs: Okay. The last question I had was just, I know it’s been a crazy week in the market and probably the shipping markets as well, and so maybe there’s not a lot of this inquiry going on at the moment. Have you guys heard more inquires for storage startup again in the market given where crude prices have gone? I know you’re not really starting on aftermaths. You guys are more on the smaller side of the market. But given that you’re involved in the entire oil supply chain are you guys seeing more inquiry for tankers being used as storage?

No, we aren’t. But the market hasn’t set itself up for a contango yet either. But what we did see was when the strategic petroleum reserve announcement came, then we saw immediately for the Gulf of Mexico people were looking for options in order to use the tankers as storage. That has provided an incremental boost down in the Gulf of Mexico. The market has not moved to a contango point where people wanted to store oil, unfortunately. If it was then you would quickly see using up the supply of tankers and we would see higher rates. Justine Fisher – Goldman Sachs: Okay. Thanks very much.

Thank you.

Thank you. Your next question comes from Sal Vitale of Sterne Agee. Please go ahead. Sal Vitale – Sterne Agee: Good morning, gentlemen. Thank you for taking my question. Most of my questions have been answered. I just have a quick question. Just looking at the LNG business big picture, it looks like the supply/demand dynamic is pretty favorable at this point. On the demand side what forces could actually ruin the party? What actually could happen on the demand side that could impact that favorable supply/demand going forward?

I think it’s really two aspects. One is clearly Japan is going to need more LNG than what they had in the past. You’re seeing the incremental cargo go out to Japan. Then further out I think if the world didn’t grow as much because we got a world recession as opposed to the developed market then I think that would cut people’s ideas going forward. There’s positives and negative. Clearly if the U.S. is able to put in place export of gas then that would be a further demand jump because people would be able to arbitrage between the U.S. and Pacific prices. But I’m not a particular bull on that, but what has changed is the shale gas. If – if shale gas becomes a bigger thing around the world rather than in the United States, then that could change it. But what we are seeing is because of the disparate oil and gas price, you’re seeing people want to use more LNG in their electrification. And so with the carbon tax or cap and trade coming in, in Australia, then that favors gas over coal for electricity generation. So, when you see what’s happening in the developed markets it’s pretty stable as it relates to power consumption. But when you go to a lot of places – I was on an Asia trip for about two weeks a few weeks ago – then you really see the demand for raw power generation. And that’s something that you really only can get with LNG right now. Sal Vitale – Sterne Agee: Okay. That’s very helpful color. Thank you. And I have a similar type question on the offshore side. You know given the recent impact to oil demand just from the slowing global economy, I guess what level of whether you want to quantify it as the oil price or level of global oil demand, but what level you know – at what level would the opportunities on the offshore side start to be impaired?

I think that’s more a function of oil price than it is of whether oil is in demand or not. Now obviously oil price is a function of oil demand, but what we’re seeing is that countries want to go ahead and develop their domestic reserves. I think you’re seeing that as Norway has a great oil industry, so they will do what it takes to encourage oil industry employment. And ultimately you will see the same thing in other areas. And so it’s a great job grower in order to keep your people employed in the energy side. And certainly that’s something that’s been seen in the United States. And so I think you’re going to see non OPEC oil be developed almost no matter what. It’s just a national security question. But it also helps all these countries. And so when you see what’s happening in Brazil in established areas like the North Sea, they will continue to develop because it’s in those countries’ interest to have a sustained oil market going forward. Now when you talk about what the oil demand growth is, the IEA came out with some numbers this week. It was a little lower, reflecting the uncertainty. But what we continue to see is that it isn’t about the developed market. It isn’t about the U.S. where the summer driving season didn’t come in as much. It’s about how much will China and India and the rest of Asia grow. And I have to say that it isn’t a question of whether they’ll grow it’s a question of at what pace they will grow. And more and more they’re starting to deregulate oil prices which will allow more oil to be consumed there. So do I think car sales are going to continue to grow in India and China? Yes I do. Sal Vitale – Sterne Agee: Okay, and then the final question I have is just on the net asset value. Given the current gap between the current price and the net asset value is close to 50%. Have there been periods in the past where it’s exceeded that?

Yes, I think during the downturn that we had in ‘08 and ‘09 we were at a bigger discount but obviously that was a bigger dislocation. We didn’t have central banks pumping liquidity around the world. But I think Teekay was in a different position at that time too. We didn’t feel we were in a strong enough financial position in order to have share buybacks. So this time I think no matter where the world goes I think Teekay has positioned itself in a much stronger positional financially in order to take advantage of that. So obviously we’ve seen a lot of companies and announcing buybacks. We already had a buyback so right now I feel Teekay is in a good enough position to take advantage of these market dislocations which is what Vince said in his prepared remarks. Sal Vitale – Sterne Agee: Okay and then just sorry the final question is just a housekeeping question. Are there any – has there been any materially change to the debt maturity profile since the last conference call?

No there hasn’t. And we are making very good progress on financing our new offshore projects, but no change. No substantial changes to our existing portfolio. Sal Vitale – Sterne Agee: Okay, thank you.

Thank you. Your next question comes from Adam Zworg of Omega. Please go ahead. Adam Zworg – Omega: Morning, guys. How are you?

Hi. Adam Zworg – Omega: Question is around the general partner interests. Given how close we are to reaching the high splits in those general partner interests what’s your plan for incremental drop downs or are there ways to increase that GP cash flow and secondly, in this uncertain world if we feel highly confident that we can reach those high splits in an identifiable period of time, really shouldn’t we be more aggressive now in buying stock in front that higher GP cash flow and take advantage of both the higher absolute value of those general partners and the higher per-share value to Teekay Parent? Thanks.

Yeah. Hi. So first of all I think what we are showing is that we do have good growth in both Teekay LNG partners and Teekay Offshore partners. And as you point out we’re very close to that inflection point where we get to the 50% splits on the GP, and then the GP value of the Teekay really does start to ramp up. And so we’re very enthusiastic about that, and so our capital has to go toward making sure that we continue to feed the growth into those partnerships because the greatest value creation is the GP split that will give us much greater value which we have in our sum of the parts at about $440 million. But we can also create value in the short term by buying back shares, and that’s something we saw last November which is why we announced the share buy-back program and why we have been systematically buying back shares because while we increase the numerator we want to reduce the denominator. And so the short answer we’re doing both. Adam Zworg – Omega: Okay. Thanks.

Thank you. (Operator Instructions) There are no further questions at this time. I’ll turn the conference back to Mr. Evensen.

All right. Thanks very much for listening, and we look forward to reporting to you on our third quarter numbers. Thank you.