Welcome to Teekay Corporation’s first quarter 2012 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). 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 website at www.teekay.com, where you will find a copy of the first quarter 2012 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 first quarter 2012 earnings release and earnings presentation available on our website. I will now turn the call over to Mr. Evensen to begin.

Thank you Dave. Good morning everyone and thank you for joining us today for Teekay Corporation’s first quarter 2012 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. During our call today I will be walking through the first quarter of 2012 earnings presentation, which can be found on our website. Beginning on slide three of the presentation, I will briefly review some recent highlights from Teekay Corporation and our three publicly traded daughter companies. For the first quarter of 2012, Teekay Corporation generated total consolidated cash flow from vessel operations or CFVO of $203.5 million, an increase of approximately 37% from the first quarter of 2011. You will note that in this quarter’s earnings release that we’ve made a slight change in the format of our operating results table, to show our share of the CFVO generated from our equity accounted investments, given their increasing significance, in addition to the CFVO generated by our fully consolidated businesses. Teekay Corporation reported a consolidated adjusted net loss of $20.8 million or $0.30 per share for the first quarter of 2012, compared to a consolidated adjusted net loss of $0.39 per share in the first quarter of 2011. The reduction in our adjusted net loss for the quarter is mainly due to the benefit of these strategic acquisitions and new building deliveries that have occurred since the first quarter of 2011, as well as the progress we’ve made towards improving the profitability of our existing assets. This was partially offset by the Banff FPSO being out of service due to the storm incident in December of 2011. In April, we reached an agreement to sell 13 of our 17 conventional…

Thanks Peter and good morning everyone. Starting with slide nine, I will review our consolidated results for the quarter. In order to present the results on a comparative basis, as we do each quarter, we have shown an adjusted income statement for the current quarter against an adjusted income statement for the previous quarter. Later on I will also provide our outlook for the second quarter. Net revenues decreased by $16 million, mainly due to the absence of $35 million of incremental revenue recognized in the fourth quarter relating to the Foinaven FPSO contract or via a portion of the Foinaven revenues, which is tied to certain annual measures is recognized typically in the fourth quarter of each year. In addition, a full quarter of off-hire related to the Banff FPSO storm damage that occurred in last December, resulted in a decrease in revenues of approximately $9 million. These decreases were partially offset by the full quarter contribution from the acquisition of the two Sevan FPSO units at the end of November and higher TCE rates from our spot conventional tankers in Q1 compared to Q4. Vessel operating expenses decreased by $2 million due to the timing of repairs and maintenance activities, partially offset by the full quarter impact of the two Sevan FPSO units. Time charter hire expense decreased by $4 million due to the redelivery of in-chartered vessels in Q1 and Q4, and a decrease in spot in-chartering of shuttle tankers. Depreciation and amortization increased by $4 million due to the full quarter of depreciation on the two Sevan FPSO units and a decrease to the estimated useful life of certain of our older shuttle tankers, partially offset by the impact of the vessel write-downs taken in Q4. G&A expenses were $53 million in line with expectations. Net…

Thank you Vince. Before we open up the call to questions, I would like to turn your attention to slide number 12, which provides some preliminary details on our 2012 Investor Day to be held during the afternoon of Monday, June 18, at the Waldorf Astoria in New York City. At this event we will provide a detailed presentation of the Teekay Group of Companies, covering our strategies, financial position and market outlook for Teekay Corporation and our three publicly traded daughter companies; Teekay LNG Partners, Teekay Offshore Partners and Teekay Tankers. The event will be webcast live for all interested, current or prospective investors. While this event is still several weeks away, we encourage everyone to mark this date in their calendars and we look forward to presenting and meeting with investors. Thank you for joining us on the call today and we look forward to seeing you next month at our 2012 Investor Day in New York. Operator, we are now ready to take questions.

Thank you. (Operator Instructions). The first question comes from Michael Webber of Wells Fargo. Please go ahead.

Hey, good morning guys. How are you?

Hi, how are you Mike?

Good, good. I wanted to start with the offshore side of the business and around the Knarr specifically. I’m not sure if BG has an extension option on that contract, which I think you guys are waiting for before you guys look to lock up long-term financing, any indication there in terms of whether or not they’ll be extending that contract and then kind of in general, how are you guys thinking about a potential JV partner for the Knarr, just given its sheer size?

Well, to be specific it isn’t an extension option. They can choose between whether they want to pay more money over six years, insulation fee or more straight line over 10 years. And so under the contract they don’t have to make that election yet, but the present value effect of whether they choose six years or 10 years isn’t material in reality and so we’re advancing the project and I think as we de-risk it through the construction phase, the value of the project rises. So we may very well look as other FPSO companies have done on these large projects, to take in joint venture investors.

Is it safe to say that you guys would need to see some sort of indication from BG before you guys would look to secure a JV partner and/or long-term financing on the asset?

No, I don’t think that is correct. We can move forward, but we will know that well before. They have to elect that by the end of this year.

Okay, that’s very helpful. And Peter, along those lines, you guys moved the Tiro Sidon to the Odebrecht JV earlier in the year. Was that at $179 million and I know it’s not completed yet. Was that done at cost or was there any sort of mark-to-market there, how should we think about that?

There is a sliding scale, which gives us an incentive in our role as developing the project, so we haven’t given the total economics of that transaction yet, under which Odebrecht will take 50%, but we are very happy with the joint venture that we have with Odebrecht. I think it sets us up very much for future growth in Brazil. So the Tiro Sidon is good because it helps us with the operations that we are going to have. Odebrecht has also helped us in terms of the relationship with Petrobras, so we are very happy with that, but we haven’t given specific guidance around the exact terms of that partnership.

Okay, all right, fair enough. Staying on I guess the FPSOs for a second, you guys won a FEED study through Sevan earlier in the year with the Skrugard, kind of Skrugard/Havis fields. Are you guys getting more traction up there in that area with the cylinder designs from Sevan and can you maybe talk a little about what you are seeing in terms of the tendering activity and then FEED study you guys are involved in right now?

Hey Mike, it’s Kenneth. We are generally seeing a broad interest, well I assume that’s the sign both in the North Sea, but also the Barents Sea and even outside. So as you know, the business model for Sevan changed somewhat after we came in and acquired a 40% of the company. So the company now is primarily focused on participating in these FEED studies. They were awarded one as you correctly pointed out and they are in discussions on a couple of other ones, and what we see there is that that’s just a great way for us to get into these projects early on.

So, it’s pretty safe to say from a relative to a ship shape design, you are seeing a little bit more traction with the Sevan design at this point, and you guys are involved in maybe two to three more and talking about two to three more field studies at this point?

What I think is fair to say is that what we are seeing is that we are in talks with everybody at the moment, because we have some people that are looking for the ship shape design, and we have others that prefer the cylindrical one and that obviously is all based on what field we are discussing about. What’s exciting here is that we are in talks now on pretty much all of the fields, so we get a call every time that there is a requirement.

Sure. Okay, no, that’s helpful.

We do think that the cylinder does have benefits over the ship shape as you move north, especially if they are going to have onshore electricity generation going to the unit and its ice keeping capabilities.

Right, right. Okay, that’s very helpful. Peter, I think the same day you guys actually announced the tanker dropdown, you guys also announced the Kroner bond, which you mentioned in your commentary. Can you maybe talk a little bit about the rationale for entering that market from a funding perspective and then in terms of putting that capital to use, are you looking in individual assets, could we see separate individual corporate entities being acquired? I mean, how should we think about this sort of capital?

Well, first of all we thought it was a great way to access funds and I think these days when you are not quite sure about which way the financial environment will go, it’s always good to diversify what you have. But for us at Teekay LNG, we thought it was a great way to be able to have liquidity to make near term acquisitions and so it was a great way to boost up our liquidity and in these markets, and I’d say that for all of our businesses, to have money when other people don’t is really an advantage.

Fair enough. No, that’s helpful. One more for me and I’ll hop back in the queue. The tanker dropdown, when it closes it’s going to provide a pretty nice net liquidity gain and you guys should also see some cash coming in the door from the Foinaven dropdown and potentially the Voyageur later in the year. Kind of within that context Peter, how do you guys think about restarting or potentially restarting your buyback program this year? Do you need to wait for the FPSO dropdowns to do that or how are you guys thinking about that internally?

This is really more of the debt deleveraging event. It doesn’t actually increase our liquidity, because we are transferring the debt facilities down. But I think we’ll give more specifics at the Investor Day coming up, but from our point of view, it frees up capacity. As I just alluded to with my comment, I think there’s going to be a lot of interesting opportunities coming forward. We want to once again reposition Teekay to be able to take advantage of acquisition environments. We liked the Sevan deal last year and I think there will be more those kinds of deals going forward. And then another thing that we think is, there will be a lot of these new projects that you just asked about, Skrugard and other ones, those are all 2015 going forward. Well, I think that’s an important part, and as I said in my prepared remarks, it does simplify the Teekay corporate structure. So I think the simplicity in the alignment will make it easier for investors to understand the role of each company.

All right guys, that’s all from me. Thanks a lot. I appreciate it a ton.

Thank you.

Thank you. The next question comes from Justin Yagerman of Deutsche Bank. Please go ahead.

Hey, good morning everyone. It’s Josh Katzeff on for Justin. I just want to quickly follow on I guess Mike’s last question with regard to financing and the deleveraging. I guess there’s been a structural shift in your liquidity at the parent company and there’s a lot less capacity in the revolver. So I guess, how are you looking at financing new CapEx going forward? Is it going to be more reliant on project-based debt and I guess equity commitments from your cash?

Well, I think if you looked at our earnings release, you’ll see that most of the financing on our CapEx is several years out, like out in 2014. We have financed all of our near-term 2012 CapEx that we have going forward. So in some respects you don’t want to invest or put in place CapEx on everything at the start, although people look at that right now. We have a number of financings in place that I think we will go forward. For example, what we haven’t financed yet are our four BG shuttle tankers. That’s about $500 million, and we expect to put in place that financing just as part of it, but we don’t need that financing until mid-year 2013.

I guess my question was more focused on future CapEx and new projects that you might be bringing more into the company?

Well, we can either arrange financing at that time or we could always put in place a new standby revolving credit facility. We have assets which haven’t been encumbered up at Teekay Corporation. I think right now we are more concentrated on the fact that we should reduce our leverage up at Teekay and we are not really bugged about the liquidity side of things.

I think the other thing to note is as you’ve seen the growth in our daughter companies and their ability to access equity, as well as now the bond markets. The daughters are able to do the direct acquisitions without any financial support from the parent. So there is probably less need for warehousing other than very large projects like the Knarr FPSO at the parent level and as we continue to execute in our dropdown strategy, that will free up capital again and recycle the capital of the parent company for further investment.

Got it. And I guess with regard to the dropdown strategy, I guess would you be able to provide any update on time frames or I guess maybe schedule for any drop downs?

I think we’ll discuss that more at the Investor Day.

Got it. And shifting to the FPSOs and the offshore market, I guess in the presentation you mentioned that there have been a bunch of tenders already and you’re expecting a lot more. I guess has Teekay been participating in the existing tenders and I guess what does it make sense for Teekay into those transactions I guess if you did participate?

Which market are you talking about?

In the FPSOs?

In the FPSOs, yes, we’ve looked at several of them, but as I said we’re busy trying to execute the ones that we have, and so we are actually more interested in FPSOs that are going to be in 2014 and 2015 and even out into 2016. With our engineering guys very much focused in on the three that we are doing right now, we are not interested in more near term opportunities, but I would say we are really looking much more at new buildings rather than conversions. We think that fits in better with how our customers require going forward. However, on the FSO side, there we are looking much more at conversion of older tankers. So it depends on each sector very much.

Got it, got it. And just one more question before I turn it over, there is still the four Suezmaxes at the parent level. I guess, how should we think about those as being part of the I guess core parent fleet?

Yes, we are very happy with those tankers. Those are modern tankers. They are all sister ships. So I always say I won’t refuse any offer, but I have to say that we were very happy, so we left them out of the offer that we gave to Teekay Tankers. We like them, they work really well, they are a key part of the Gemini Suezmax tanker pool and as I said, we think we might very well hold them just for the rebound that we see coming up in the future in tankers.

Got it. All right, well I appreciate the time guys, thanks.

Thank you.

Thank you. The next question comes from Brandon Oglenski of Barclays. Please go ahead.

Hey, good morning everyone. I was wondering if we could just come back to the tanker market and obviously you guys have provided some visibility here on rates for the second quarter, which are down a bit sequentially. I mean I’m looking at your graphic here of scrapping increasing; I mean, just where do you see this market playing out over the next two, three, four quarters, because I know we have gotten a little bit more of a bullish read here in the last three or four months, maybe we are just being too optimistic though?

Well, I think we have to look at the normal seasonal patterns, which are the fourth quarter and the first quarter are high. The second and the third quarters are generally low as I said, because of refinery maintenance and I think this year you saw an exaggerated effect, because people were a little bit worried about Iran. So you saw almost a record amount of call on OPEC in April and so I think that got people’s juices flowing very much. But the reason we’ve focused in on the scrapping is that that really reflects what a ship owner has to make a decision. In other words, am I going to spend $2 million or $3 million to go through a third special survey or fourth special survey, and what we saw was that people are deciding that, because of charterer discrimination and because their outlook for that type of ship, those ships are being called from the fleet. And so when you look at the sizing of the fleet, the Aframax is actually as I like to say, the pig is to the python, because on the Aframax side we have about 676 vessels. The order book on Aframax is only 50 or 7% and whereas when we look at the amount of Aframaxes that are somewhere in 15 to 20 years old, there’s about 150 or three times as many ships on the order book. So if those older ladies either go in to lay up or get scrapped, that’s a real benefit going forward and that’s why when you look at the net fleet growth that we’ve had so far this year, it’s only 1.4%, so that augers pretty well. So I mean, I’m not there to say whether you can annualize the first quarter figure, but so far what we’ve seen is that ships are going into lay up or ships are – and we have three ships ourselves in lay up in that zone, so we can talk from personal experience. So I actually think that sets up quite well for the Aframax size. Obviously for the VLs and the Suezmax you still have a high degree of order book. So, there’s still a lot of deliveries to come off of that, but when you see the amount of ships being scrapped, that looks pretty good for the mid-size tankers.

But I guess maybe a little bit longer to go than on the larger vessel classes?

Yes, just because on VLs there’s 18% to 19% of the order book on order and for Suezmaxes it’s actually closer to 23% on order. So I think this time you aren’t going to see the Vs leading us up. I think you are going to see the smaller ships, the Aframaxes leading it up and when we look at the amount of oil flow, everyone concentrates on the bigger sizes, but we are seeing more Suezmaxes cargos coming out of the AG. We are also seeing more non-OPEC supply coming on as you have Brazil and Russia. We had Libya come back, and so ultimately you should see more west-to-east type of cargos.

Okay, that’s very helpful. Maybe if we can shift gears to the FPSO market, I mean obviously that’s sounding pretty bullish right now, but you did highlight that orders are going up this year as well, and just given that we are seeing a little bit of contraction in the Brent, WTI spread here and if that were to go even further, does that place any of these future projects in jeopardy and maybe with a bit supply growth, does that market potentially maybe not look as good as it does right now if some of those things play out?

I don’t think the variation that we’ve seen in oil price so far changes any CapEx plans that oil companies have going forward on FPSOs. What we like about the FPSO is that it is sort of predictable. People go through a certain development phase and once they sanction or start a field, then they are going to go through and you spend enough CapEx going forward that once the unit delivers, the marginal cost isn’t as high and therefore, we don’t see that whether the oil price or the Brent, WTI spread changes. You would have to see a significant downturn to like $60, $70 oil before you would see people put their plans on ice.

Okay, and I guess under that backdrop and you think even with the older order book, we saw ample demand relative to that supply base?

Well, the order book on FPSOs is all custom. There aren’t any speculative FPSOs that I’m aware of. They are all being built for given projects and the point that we are making is it’s fundamentally different from the tanker market. The tanker market and now a little bit on the LNG side that has 34 uncommitted LNGs, you have more of a push type strategy, where people are ordering it, hoping that they’ll get projects for it. What we are seeing in the FPSO is fundamentally different. There it’s the more built to suit, where you go through an engineering study, it’s more of a bespoke FPSO that deals with whatever gas compression, water and barrels per day in storage that you need. So you’re building a unit that is a little bit customer bespoke and therefore you can have more confidence that those units are going to go forward. And so when we look at the FPSO orders that I talked about in my prepared remarks, you are looking at individual fields going forward, that people are taking a decision to put them into production, and I think the overall higher rate that we’ve seen means that people are going to go forward and that’s as well, because they’ve done a lot of drilling, and drilling is expensive, so that’s part of the field development plan.

All right, well listen, thank you very much for your response.

Thank you.

Thank you. The next question comes from Fotis Giannakoulis from Morgan Stanley. Please go ahead.

Yes, good morning and thank you. Peter, I would like to ask you, you mentioned earlier about the increasing volume of crude that is flowing from West Africa to the East that is supporting 10 miles. There has been a discussion recently regarding the different impact across asset classes and if you could comment on that, which vessels will be benefiting and particularly I am asking because U.S. imports are usually using Suezmaxes and Aframaxes, and if there is going to be any adverse impact for these two asset classes?

Yes, I think people were getting a little depressed about Suezmaxes when we had word of all these U.S. refineries that we are going to close. That seems to have jumped the gun a little since they are being sold and it looks like they’ll keep going. But I think the big news was really that you saw higher Iraqi, Nigerian and Libyan supplies, and it was the Nigerian and Libyan supplies and if you put those three groups together, you lifted OPEC production by about 400,000 barrels of oil a day and that was the big reason behind the call on OPEC and so those were Suezmax and Aframax volumes primarily. We didn’t see as many of these coming into Nigeria, and that’s why for example today you see Suezmax rates over $30,000 a day and the Suezmax market in the Med has similarly been high and so all that is very good. Of course, we are going to see normal North Sea maintenance and that will take away a little bit of the volumes that we would have had on Suezmaxes, but I think that explains a lot of what’s going on the Suezmax side. We’ve also seen more cargos coming out, the AG coming up. And then finally if you look forward into 2013, you see Kozmino coming on. That will probably take more; that’s a Russian export terminal, and that will actually take the cargos that would traditionally go long haul and you are going to see that on Aframax today, Suezmax in 2013, and that’s going to shift it back and help the mid-sized tankers. But what we are really seeing is that the Vs moving long haul to China from the Persian Gulf, it really creates an opportunity or a gap for the Suezmaxes, and I think that’s why we’ve seen greater Suezmax or higher Suezmax rates. So don’t count the Suezmaxes out.

Okay, thank you for that. I want to shift on the LNG space. You show in one of your slides that the rate right now for short-term are about $140,000, while for the longer term they are close to $80,000 to $90,000. You have one vessel that is due for rechartering, and given the fact that the market is shifting towards more uncommitted cargos, the spot and the short-term movements of LNGs, they have increased 50% from last year. Is there any thinking over perhaps shifting your strategy and trying to secure shorter-term contracts as compared to the 15 or 20-year contracts that you have been active in so far?

Well, a few comments on that. First of all, you have to look at what the LNG vessel is going to be used for. For the type of market we’ve had our LNGs on, are more long-haul project deals or what we call the LNG train where they are going on definite trade routes going forward, and that is more of a long-haul type of thing where they need a base amount of tonnage. For example, our most recent deliveries there were our Angolan ships, where they know they are going to need a certain amount ships. But what’s happened in the LNG market is, because of the Japanese effect in this long haul, you saw people needed ships for trading and obviously they are not going to take ships for longer periods on a trading type. So you have to really see that the market is bifurcated into these long haul project businesses and that still is the 10 plus years. Then you have these trading ships, and that’s where they are interested only in one year to three years, and then you get into the negotiation between the ship owners and the charterers on whether it’s going to be one year, three years or four years. The ship owners we are trying to reach out for three years, four years, and as you heard, we fixed one of our Maersk vessels that was open for March as Vince talked about, we fixed it for $133,000 for three years. That still seems to be where the market is. Some people I think have gotten a little enthusiastic, and then you see that other people like GasLog, they locked up their ships for five years for $80,000 a day and so I think there is this backwardation going forward and…

Can I ask you about your outlook beyond 2014 for LNG shipping? It seems that everything is pretty clear between now and 2015, but a lot of things remain uncertain for the longer term. We have 70 new buildings as you mentioned, around half of them they do not have contracts yet. What is you view about your long-term outlook and particularly about the U.S. exports if you have a base case of potential new projects and new approvals that they will be given after the approval of the Sabine Pass terminal?

Yes, so to be more specific there is 76 new buildings on order of which 34 are uncommitted, meaning they don’t have a charter employment right now and from what we see, there is only two coming in 2012, but there’s 19 coming in 2013, 35 in 2014, and 19 in 2015. And so the big question is, will there be gas in order to take these uncommitted ships? Right now it looks like in the near-term, in 2013 and into 2014 there won’t be enough gas for some of these ships that are uncommitted going forward. So that’s why you see this backwardation in the LNG rates, and I think we are pretty level headed about that and we are not projecting rates to the moon. But you bring up the most essential point, which is that from 2015, and we had this slide in our last earnings call, you will get to see a lot of projects coming in, especially from Australia you mentioned the U.S. exports and we are just now starting to see the tenders come in for those long haul projects. From Australia you’ll also see people want to take ships, who are going to pick up the Sabine Pass gas and that I think goes really to the sweet spot that Teekay LNG has. Obviously looking a little further out, we see Russia and you saw the announcement of Statoil becoming much more involved in Stockman, and then you saw the big Mozambique announcements that Anadarko came with. And so I think we are really excited about the post 2015 period going forward, because you are going to see actually a lot more gas going forward. What’s happened, up until 2015 is that we had ton-mile demand going up. In other words, all the ships were trading inside the Atlantic and now they are going longer haul to the Pacific, so you just saw this quick acceleration of ton-mile demand and that gave us the spike that we had going forward. But I think that we are going to see much – I think as they say, it’s a golden age of gas. You’re seeing the increase in gas demand in general, but you are also seeing the switching out from coal to gas being important. People, except in China, aren’t really building coal plants. So we are very enthusiastic about the LNG market, especially in the 2015 period going forward, but we are not as involved in the trading side of things in the 2013 to 2015 side of things, so sorry for the long answer.

No, thank you, thank you very much for that. My last question is going to be very quick. I just want to ask about the GP. The GP’s cash flow is growing really rapidly. Is there any plan in the future to split the GP and monetize that and how far away we might be from such a potential plan?

No, we don’t have any plans.

Okay, thank you very much for your time. Thank you.

Thank you.

Thank you. (Operator Instructions). The next question comes from Heather Lambirth of Wells Capital Management. Please go ahead.

Hi there, this is Steve Pfeiffer from Wells Capital Management. I was going over the questions. Normally in the past you’ve had some balance sheet slides and I haven’t seen any of them this time. So I’m trying to reconcile some stuff off your press release. It’s kind of hard with this presentation, because the presentation format you’ve changed, so every time I click off of the presentation it all minimizes, so it’s hard to really read, but let’s see. I am going through and trying to reconcile parent level debt and how that has changed from last time. Can you just walk me through the change from year-end debt levels at the parent level to the quarter-end debt levels and reconcile that with your statement that the dropdown was a deleveraging event, please?

Yes, if you look at the parent net debt, I think last quarter was a little bit over $1.3 billion and right now it’s a little bit below that, so $1.26 billion, so not a big change on the surface. We did have the Tiro Sidon FPSO debt or the conversion debt come off the balance sheet as we sold 50% to Odebrecht, so that was a slight reduction there and if you look at the slide 11 or on some of the parts, you’ll notice our parent net debt figures is shown there as $831 million, and what is is essentially the pro forma in the Teekay Tankers dropdown, which reduces our net debt by $430 million, so that’s $1.26 billion minus the $430 million to get to the $831 million. Of course, we have that $220 million of the IE debt related to Voyageur. So not a lot of changes overall. I think between December 31 and March 31, but as we close the TNK 13 ship dropdown, the parent net debt will decrease significantly and so that’s helping the current balance sheet strengthen.

So you have on here the parent net debt of a reduction of $831 million on slide 11 here. That was not a change off of here. This is some of the absolute value then, correct?

That is the balance. That’s correct.

That’s the balance, and now for the dropdown with the reduction of, I think you said net debt of $450 million was the number because of the dropdown?

$430 million. That’s embedded in the $831 million.

The $430 million, and how exactly did that reduce the debt? Was that a pay down of debt or was that just an increase of cash? How does that transaction work?

Well, the gross value of the sale of 13 vessels is $455 million and Teekay Parent is taking back $25 million in shares of TNK and the rest, which is $430 million is basically the transfer of debt from the parent to Teekay Tankers.

What specifically that’s was at?

It’s a number of revolvers and term loans.

And do we have an associated interest expense for those?

Yes, the average cost of debt, including our interest rate swap that we are transferring down is about 3.5%, all-in.

Okay, that’s it, thank you.

Thank you.

Thank you. There are no further questions at this time.

Okay. Thank you all very much and hopefully we’ll see many of you at Investor Day on June 18. Thank you.

Ladies and gentlemen, this does conclude the conference call for today. You may now disconnect your line and have a great day.