Teekay Tankers Ltd.
NYSE : TNK

Teekay Tankers Ltd.

November 25, 2008 09:09 ET

Teekay Tankers Ltd. Reports Restated First and Second Quarter 2008 Results

HAMILTON, BERMUDA--(Marketwire - Nov. 25, 2008) -

Highlights

- Teekay Tankers has completed a financial restatement of its fiscal 2008 first and second quarter results.

- There is no impact on the Company's previously reported cash available for distribution or liquidity in any period.

- All restatement adjustments are non-cash in nature and do not affect the economics of the Company.

- The Company will host a conference call on Tuesday, November 25, 2008 to discuss its restated results and key elements of its financial position and outlook.

Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE:TNK) today reported that it has restated its previously reported financial results for the first and second quarters of 2008 to adjust its accounting treatment for:

- an interest rate swap agreement under the Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging (SFAS 133), as more fully discussed below under "Restatement for Accounting under SFAS 133"; and

- two vessels acquired from Teekay Corporation (Teekay) subsequent to the Company's December 2007 initial public offering, whereby the Company's financial statements have been retroactively adjusted to include the historical results of the vessels from the date they were originally acquired by Teekay and began operating, as more fully discussed below under "Changes to Accounting for Dropdown Transactions".

Subsequent to the release of its results for the second quarter of 2008 on August 7, 2008, the Company determined that it would be required to restate its previously reported financial results. Accordingly, the Company's previously reported financial statements for the three months ended March 31, 2008 and June 30, 2008 have been restated. A summary of the Company's financial results reflecting the restatement adjustments for these periods is provided below. More detailed financial information relating to the restatements will be included in the amended Form 6-K/A Report for the quarter ended March 31, 2008 and in the Form 6-K Report for the quarter ended June 30, 2008, which the Company expects to furnish to the U.S. Securities and Exchange Commission and make available on its website at www.teekaytankers.com no later than December 5, 2008.

"The requirement to restate our historical financials arose from a detailed and thorough restatement audit which was initiated at Teekay Tankers' parent company, Teekay Corporation," stated Vince Lok, Teekay Tankers' Chief Financial Officer. "It is important to emphasize that adjustments to the Company's reported net income as a result of these restatements are due to changes in the Company's accounting treatment only and have no impact on the Company's actual cash flows. Any adjustments to net income as a result of the change in the Company's hedge accounting are exclusively due to unrealized gains or losses from the change in the mark-to-market value of our interest rate swap agreement at the end of each reporting period, which have no cash impact. This change in accounting treatment does not affect the economics of our hedging transactions."

Mr. Lok continued, "In addition, the change in the accounting treatment for vessel dropdowns only impacts the periods prior to when the Company acquired the vessels from Teekay Corporation and, therefore, has no effect on our financial results subsequent to the date of acquisition and also does not impact our cash available for distribution or liquidity in any period."

A summary of financial information reflecting the restatement adjustments for the three and six months ended June 30, 2008 and 2007 and the three months ended March 31, 2008 is presented below.

Summary of Restated Second Quarter 2008 Results

Since the restatement adjustments are all non-cash in nature, they have no impact on the Company's cash available for distribution. On August 5, 2008, Teekay Tankers declared a cash dividend of $0.90 per share for the quarter ended June 30, 2008, representing a total cash dividend of $22.5 million(1). The dividend was paid on August 22, 2008 to all shareholders of record as of August 15, 2008.

On November 24, 2008, the Company declared a cash dividend of $1.07 per share for the quarter ended September 30, 2008. The cash dividend is payable on December 10, 2008 to all shareholders of record on December 3, 2008.

The effect of the accounting adjustments noted above on net income for the three and six months ended June 30, 2008 and 2007 and for the three months ended March 31, 2008, as previously reported on August 7, 2008, is summarized in the table below. The results of vessels acquired from Teekay relating to the periods prior to their acquisition by the Company are referred to herein as the Dropdown Predecessor.



--------------------------------------------------------------------------
Net Income
--------------------------------------------------------------------------
(in thousands Three Months Ended Six Months Ended
of U.S. June 30, March 31, June 30, June 30, June 30,
dollars) 2008 2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------------- ---------------------
As Previously
Reported (2) 22,005 14,038 12,411 36,043 27,896
Adjustments:
Derivative
Instrument (3) 325 (4,356) - (4,031) -
Dropdown
Predecessor (4) 298 812 - 1,110 -
-------------------------------------------------- ---------------------
As Restated 22,628 10,494 12,411 33,122 27,896
-------------------------------------------------- ---------------------


For the three months ended June 30, 2008, Teekay Tankers now reports net income of $22.6 million, or $0.89 per share, compared to net income of $10.5 million, or $0.39 per share, for the three months ended March 31, 2008. The results for the quarter ended June 30, 2008 now include an unrealized gain relating to the change in fair value of an interest rate swap agreement that has the effect of increasing net income by $5.4 million(5), or $0.22 per share. The results for the quarter ended March 31, 2008 now include an unrealized loss relating to the change in fair value of an interest rate swap that has the effect of decreasing net income by $4.4 million, or $0.18 per share. Net voyage revenues(6) for the three months ended June 30, 2008 increased to $35.6 million, compared to $33.4 million for the three months ended March 31, 2008.

Net income for the six months ended June 30, 2008 is now $33.1 million, or $1.28 per share, compared to net income of $27.9 million, or $1.86 per share, for the same period last year. The results for the six months ended June 30, 2008 include an unrealized gain relating to the change in fair value of an interest rate swap agreement that has the net effect of increasing net income by $1.0 million(5), or $0.04 per share. Net voyage revenues(6) for the six months ended June 30, 2008 increased to $69.0 million from $55.7 million for the same period in 2007.

(1) Please refer to Appendix A to this release for a calculation of the cash dividend amount.

(2) Previously reported net income for the three and six months ended June 30, 2008 included an unrealized gain of $5.0 million from an interest rate swap agreement.

(3) Please refer to "Restatement for Accounting under SFAS 133" included in this release.

(4) Please refer to "Changes to Accounting for Dropdown Transactions" included in this release.

(5) Unrealized gains of $5.4 million and $1.0 million relating to the change in fair value of an interest rate swap agreement for the three and six months ended June 30, 2008, respectively, are comprised of $5.0 million included in the previously reported net income for such periods and adjustments of $325,000 and ($4.0) million for the three and six months ended June 30, 2008, respectively.

(6) Net voyage revenues represent voyage revenues less voyage expenses. Net voyage revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company's website at www.teekaytankers.com for a reconciliation of this non-GAAP financial measure.

Further Information Regarding Restatement Items

Restatement for Accounting under SFAS 133

Subsequent to the release of its results for the second quarter of 2008, the Company has restated its financial results for the quarters ended March 31, 2008 and June 30, 2008 to adjust its accounting treatment for an interest rate swap agreement pursuant to SFAS 133. This interest rate swap agreement did not qualify for hedge accounting treatment under SFAS 133, as aspects of the Company's hedge documentation did not meet the strict technical requirements of the standard.

Accordingly, the Company has now recognized the changes in the fair value of its swap agreement through the statement of income rather than directly to stockholders' equity on the balance sheet. The restatement, which is non-cash in nature, has resulted in adjustments to Teekay Tanker's previously reported net income, but does not affect the economics of the hedging transaction and does not have any impact on the Company's previously reported cash available for distribution, liquidity or total stockholders' equity. The Company believes that the applicable derivative transaction was consistent with its risk management policies and that its overall hedging strategy continues to be sound.

The Company has discontinued the use of hedge accounting for its interest rate swap agreement. As a result, the unrealized gains and losses due to the change in the fair value of this derivative instrument will be reflected as increases and decreases to the Company's interest expense going forward. This change will not impact the economics of the hedging transaction, nor the Company's cash available for distribution or liquidity in any future period.

Changes to Accounting for Dropdown Transactions

Subsequent to the release of its results for the second quarter of 2008, the Company reviewed and revised its accounting treatment for the two Suezmax tankers, the Ganges Spirit and the Narmada Spirit, which it acquired from Teekay on April 7, 2008 (the Suezmax Dropdowns). The Company initially accounted for the Suezmax Dropdowns as asset acquisitions (rather than business acquisitions) and recorded the financial results of these vessels commencing from the date the vessels were acquired by Teekay Tankers.

Although substantially all of the value relating to the Suezmax Dropdowns is attributable to the vessels and associated time-charters, the Company has now determined that these related-party vessel acquisitions should be accounted for as business acquisitions (rather than asset acquisitions) under the provision of the Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS 141). Under SFAS 141, business acquisitions for entities under common control which have begun operations are required to be accounted for in a manner whereby the Company's financial statements are retroactively adjusted to include the historical results of the acquired vessels from the date the vessels were originally under the control of Teekay.

Accordingly, the Company has recast its financial statements for the three and six months ended June 30, 2008 to retroactively adjust for the Suezmax Dropdowns as if the vessels had been acquired by the Company on August 1, 2007, the date the vessels were acquired by Teekay. As a result, the Company's financial statements for the three and six months ended June 30, 2008 now include the results of the Suezmax Dropdowns prior to their acquisition by the Company.

The retroactive adjustments to reflect the results of the Dropdown Predecessor for the Suezmax Dropdowns have resulted in changes to Teekay Tanker's previously reported net income and total stockholders' equity. As they are non-cash in nature, these adjustments have not resulted in changes to the Company's previously reported cash available for distribution or liquidity. The effects of these adjustments relating to the Dropdown Predecessor on the Company's previously reported net income for the three and six months ended June 30, 2008 are increases of $0.3 million and $1.1 million, respectively. The effect of these adjustments on the Company's previously reported total stockholders' equity as at June 30, 2008 is an increase of $4.7 million.

About Teekay Tankers Ltd.

Teekay Tankers Ltd. is a Marshall Islands corporation formed in late 2007 by Teekay Corporation (NYSE:TK) as part of its strategy to expand its conventional oil tanker business. Teekay Tankers Ltd. currently owns a fleet of nine double-hull Aframax tankers and two double-hull Suezmax tankers, which an affiliate of Teekay Corporation manages through a mix of short- or medium-term fixed-rate, time-charter contracts and spot tanker market trading. In addition, Teekay Corporation has agreed to offer to Teekay Tankers Ltd., prior to June 18, 2009, the opportunity to purchase an additional two existing Suezmax tankers. Teekay Tankers Ltd. intends to distribute on a quarterly basis all of its cash available for distribution, subject to any reserves established by its board of directors.

Teekay Tankers' common stock trades on the New York Stock Exchange under the symbol "TNK".

Conference Call

Teekay Tankers plans to host a conference call at 1:00 p.m. ET on Tuesday, November 25, 2008, to discuss the Company's restated results. In addition, the Company will take the opportunity to discuss key elements of its financial position and outlook. All shareholders and interested parties are invited to listen to the live conference call at www.teekaytankers.com or by dialing (866) 321-8231, or (416) 642-5213 if outside North America, and quoting confirmation code 3731845. The Company plans to make available a recording of the conference call until midnight December 2, 2008 by dialing (888) 203-1112 or (647) 436-0148, and entering access code 3731845, or via the Company's web site until December 24, 2008.

An investor presentation to accompany this conference call will be made available on the Company's web site at www.teekaytankers.com prior to the start of the call.



--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except share data)
--------------------------------------------------------------------------

Three Months Ended June 30, 2008
--------------------------------

Adjustments
-----------

As Derivative Dropdown
Previously Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

VOYAGE REVENUES 35,745 - 537 36,282
--------------------------------------------------------------------------

OPERATING EXPENSES
Voyage expenses 618 - 91 709
Vessel operating expenses 7,669 - (19) 7,650
Depreciation and amortization 5,430 - 129 5,559
General and administrative 1,670 - - 1,670
--------------------------------------------------------------------------
15,387 - 201 15,588
--------------------------------------------------------------------------
Income from vessel operations 20,358 - 336 20,694
--------------------------------------------------------------------------
OTHER ITEMS
Interest gain (expense) (3)(4) 1,429 325 (38) 1,716
Interest income 225 - - 225
Other expense - net (7) - - (7)
--------------------------------------------------------------------------
1,647 325 (38) 1,934
--------------------------------------------------------------------------
Net income 22,005 325 298 22,628
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share (5)
- Basic and diluted $0.88 $0.89
Weighted-average number of
Class A common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
Class B common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
total common shares
outstanding
- Basic and diluted 25,000,000 25,000,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to the Dropdown Predecessor for the Suezmax Dropdowns for the
period from April 1, 2008 to April 6, 2008, when the vessels were
operating and under the common control of Teekay prior to their
acquisition by the Company. Please reefer to "Changes to Accountin for
Dropdown Transactions" included in this release.
(3) Interest gain (expense) has been restated to reflect unrealized gains
and losses due to the change in the mark-to-market value of an
interest rate swap agreement that does not qualify as an effective
hedge for accounting purposes.
(4) The previously reported interest gain (expense) for the three months
ended June 30, 2008 included an unrealized gain of $5.0 million
relating to the change in fair value of an interest rate swap
agreement. The restated interest gain (expense) now includes a total
unrealized gain of $5.4 million for the three months ended June 30,
2008 relating to the change in fair value of the interest rate swap
agreement.
(5) Earnings per share is determined by dividing net income, after
deducting the amount of net income attributable to the Dropdown
Predecessor, by the weighted-average number of shares outstanding
during the applicable period.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except share data)
--------------------------------------------------------------------------

Three Months Ended March 31, 2008
---------------------------------

Adjustments
-----------

Derivative Dropdown
As Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

VOYAGE REVENUES 26,671 - 6,821 33,492
--------------------------------------------------------------------------

OPERATING EXPENSES
Voyage expenses 96 - 11 107
Vessel operating expenses 5,580 - 1,125 6,705
Depreciation and amortization 3,489 - 2,155 5,644
General and administrative 1,321 - 580 1,901
--------------------------------------------------------------------------
10,486 - 3,871 14,357
--------------------------------------------------------------------------
Income from vessel operations 16,185 - 2,950 19,135
--------------------------------------------------------------------------
OTHER ITEMS
Interest expense (3)(4) (2,206) (4,356) (2,138) (8,700)
Interest income 65 - - 65
Other expense - net (6) - - (6)
--------------------------------------------------------------------------
(2,147) (4,356) (2,138) (8,641)
--------------------------------------------------------------------------
Net income 14,038 (4,356) 812 10,494
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share (5)
- Basic and diluted $0.56 $0.39
Weighted-average number of
Class A common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
Class B common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
total common shares
outstanding
- Basic and diluted 25,000,000 25,000,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to the Dropdown Predecessor (based on Form 6-K for the quarter
ended June 30, 2008) for the Suezmax Dropdowns for the period from
January 1, 2008 to March 31, 2008, when the vessels were operating and
under the common control of Teekay prior to their acquisition by the
Company. Please refer to "Changes to Accounting for Dropdown
Transactions" included in this release.
(3) Interest expense has been restated to reflect unrealized gains and
losses due to the change in the mark-to-market value of an interest
rate swap agreement that does not qualify as an effective hedge for
accounting purposes.
(4) Restated interest expense includes an unrealized loss of $4.4 million
for the three ended March 31, 2008 relating to the change in fair
value of an interest rate swap agreement.
(5) Earnings per share is determined by dividing net income, after
deducting the amount of net income attributable to the Dropdown
Predecessor, by the weighted-average number of shares outstanding
during the applicable period.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY CONSOLIDATED STATEMENT OF INCOME (1)
(in thousands of U.S. dollars, except share data)
--------------------------------------------------------------------------

Three Months Ended June 30, 2007
--------------------------------

Adjustments
-----------

Derivative Dropdown
As Instru- Predec- As
Reported ments (2) essor (3) Reported
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

VOYAGE REVENUES 37,408 - - 37,408
--------------------------------------------------------------------------

OPERATING EXPENSES
Voyage expenses 10,869 - - 10,869
Vessel operating expenses 5,172 - - 5,172
Depreciation and amortization 3,905 - - 3,905
General and administrative 3,260 - - 3,260
--------------------------------------------------------------------------
23,206 - - 23,206
--------------------------------------------------------------------------
Income from vessel operations 14,202 - - 14,202
--------------------------------------------------------------------------
OTHER ITEMS
Interest expense (1,789) - - (1,789)
Other expense - net (2) - - (2)
--------------------------------------------------------------------------
(1,791) - - (1,791)
--------------------------------------------------------------------------
Net income 12,411 - - 12,411
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share
- Basic and diluted $0.83 $0.83
Weighted-average number of
Class A common shares
outstanding
- Basic and diluted (4) 2,500,000 2,500,000
Weighted-average number of
Class B common shares
outstanding
- Basic and diluted (4) 12,500,000 12,500,000
Weighted-average number of
total common shares
outstanding
- Basic and diluted 15,000,000 15,000,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Teekay formed Teekay Tankers in October 2007. Prior to the closing of
the Company's initial public offering on December 18, 2007, a
subsidiary of Teekay transferred to the Company nine wholly owned
subsidiaries, each of which owns one Aframax tanker, in exchange for
12,500,000 shares of the Company's Class B common stock, 2,500,000
shares of the Company's Class A common stock and a $180.8 million non-
interest bearing promissory note. Prior to these contributions to the
Company, Teekay transferred seven of the nine Aframax tankers to seven
new ship-owning subsidiaries. The accounts of the remaining two wholly
owned subsidiaries and any transactions specifically attributable to
these nine vessels in Teekay or other subsidiaries of Teekay which
were not contributed to the Company are reflected above for periods
prior to Teekay Tankers' initial public offering. These transfers
represent a reorganization of entities under common control and have
been recorded at historical cost.
(2) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(3) Please refer to "Changes to Accounting for Dropdown Transactions"
included in this release.
(4) For periods prior to the Company's initial public offering, this
represents the number of common shares received by Teekay in exchange
for a 54% ownership interest in the Company at the time of the initial
public offering.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except share data)
--------------------------------------------------------------------------

Six Months Ended June 30, 2008
------------------------------

Adjustments
-----------

As Derivative Dropdown
Previously Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

VOYAGE REVENUES 62,416 - 7,358 69,774
--------------------------------------------------------------------------

OPERATING EXPENSES
Voyage expenses 714 - 103 817
Vessel operating expenses 13,249 - 1,105 14,354
Depreciation and amortization 8,919 - 2,284 11,203
General and administrative 2,991 - 580 3,571
--------------------------------------------------------------------------
25,873 - 4,072 29,945
--------------------------------------------------------------------------
Income from vessel operations 36,543 - 3,286 39,829
--------------------------------------------------------------------------
OTHER ITEMS
Interest expense (3)(4) (777) (4,031) (2,176) (6,984)
Interest income 290 - - 290
Other expense - net (13) - - (13)
--------------------------------------------------------------------------
(500) (4,031) (2,176) (6,707)
--------------------------------------------------------------------------
Net income 36,043 (4,031) 1,110 33,122
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share (5)
- Basic and diluted $1.44 $1.28
Weighted-average number of
Class A common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
Class B common shares
outstanding
- Basic and diluted 12,500,000 12,500,000
Weighted-average number of
total common shares
outstanding
- Basic and diluted 25,000,000 25,000,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to the Dropdown Predecessor for the Suezmax Dropdowns for the
period from January 1, 2008 to April 6, 2008, when the vessels were
operating and under the common control of Teekay prior to their
acquisition by the Company. Please refer to "Changes to Accounting for
Dropdown Transactions" included in this release.
(3) Interest expense has been restated to reflect unrealized gains and
losses due to the change in the mark-to-market value of an interest
rate swap agreement that does not qualify as an effective hedge for
accounting purposes.
(4) The previously reported interest expense for the six months ended June
30, 2008 included an unrealized gain of $5.0 million relating to the
change in fair value of an interest rate swap agreement. The restated
interest expense now includes a net unrealized gain of $1.0 million
for the six months ended June 30, 2008 relating to the change in fair
value of the interest rate swap agreement.
(5) Earnings per share is determined by dividing net income, after
deducting the amount of net income attributable to the Dropdown
Predecessor, by the weighted-average number of shares outstanding
during the applicable period.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY CONSOLIDATED STATEMENT OF INCOME (1)
(in thousands of U.S. dollars, except share data)
--------------------------------------------------------------------------

Six Months Ended June 30, 2007
------------------------------

Adjustments
-----------

Derivative Dropdown
As Instru- Predec- As
Reported ments (2) essor (3) Reported
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

VOYAGE REVENUES 77,263 - - 77,263
--------------------------------------------------------------------------

OPERATING EXPENSES
Voyage expenses 21,611 - - 21,611
Vessel operating expenses 10,115 - - 10,115
Depreciation and amortization 7,809 - - 7,809
General and administrative 6,515 - - 6,515
--------------------------------------------------------------------------
46,050 - - 46,050
--------------------------------------------------------------------------
Income from vessel operations 31,213 - - 31,213
--------------------------------------------------------------------------
OTHER ITEMS
Interest expense (3,316) - - (3,316)
Interest income - - - -
Other expense - net (1) - - (1)
--------------------------------------------------------------------------
(3,317) - - (3,317)
--------------------------------------------------------------------------
Net income 27,896 - - 27,896
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share
- Basic and diluted $1.86 $1.86
Weighted-average number of
Class A common shares
outstanding
- Basic and diluted (4) 2,500,000 2,500,000
Weighted-average number of
Class B common shares
outstanding
- Basic and diluted (4) 12,500,000 12,500,000
Weighted-average number of
total common shares
outstanding
- Basic and diluted 15,000,000 15,000,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Teekay formed Teekay Tankers in October 2007. Prior to the closing of
the Company's initial public offering on December 18, 2007, a
subsidiary of Teekay transferred to the Company nine wholly owned
subsidiaries, each of which owns one Aframax tanker, in exchange for
12,500,000 shares of the Company's Class B common stock, 2,500,000
shares of the Company's Class A common stock and a $180.8 million non-
interest bearing promissory note. Prior to these contributions to the
Company, Teekay transferred seven of the nine Aframax tankers to seven
new ship-owning subsidiaries. The accounts of the remaining two wholly
owned subsidiaries and any transactions specifically attributable to
these nine vessels in Teekay or other subsidiaries of Teekay which
were not contributed to the Company are reflected above for periods
prior to Teekay Tankers' initial public offering. These transfers
represent a reorganization of entities under common control and have
been recorded at historical cost.
(2) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(3) Please refer to "Changes to Accounting for Dropdown Transactions"
included in this release.
(4) For periods prior to the Company's initial public offering, this
represents the number of common shares received by Teekay in exchange
for a 54% ownership interest in the Company at the time of the initial
public offering.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY RESTATED CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
--------------------------------------------------------------------------

As at June 30, 2008
-------------------

Adjustments
-----------

As Prev- Derivative Dropdown
iously Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

ASSETS
Cash and cash equivalents 19,706 - - 19,706
Accounts receivable and
due from pools 23,392 - - 23,392
Other current assets 2,263 - - 2,263
Vessels and equipment 441,135 - - 441,135
Other non-current assets 4,089 - - 4,089
Goodwill - - 4,670 4,670
--------------------------------------------------------------------------
Total assets 490,585 - 4,670 495,255
--------------------------------------------------------------------------
--------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY -
Accounts payable and accrued
liabilities 10,110 - 10,110
Current portion of
long-term debt 3,600 - - 3,600
Current portion of
derivative instruments 1,789 - - 1,789
Advances from affiliates 3,094 - - 3,094
Long-term debt 317,028 - - 317,028
Other long-term liabilities 6,793 - - 6,793
Stockholders' equity 148,171 - 4,670 152,841
--------------------------------------------------------------------------
Total liabilities and
stockholders' equity 490,585 - 4,670 495,255
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to goodwill attributable to the Suezmax Dropdowns. Please refer
to "Changes to Accounting for Dropdown Transactions" included in this
release.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY ADJUSTED CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
--------------------------------------------------------------------------

As at December 31, 2007
-----------------------

Adjustments
-----------

Derivative Dropdown As Retro-
As Instru- Predec- actively
Reported ments (1) essor (2) Adjusted
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
ASSETS
Cash and cash equivalents 34,839 - - 34,839
Accounts receivable and
due from pools 4,094 - 145 4,239
Other current assets 2,088 - 325 2,413
Vessels and equipment 267,729 - 178,812 446,541
Due from affiliates - - 131,757 131,757
Other non-current assets 1,574 - 1,157 2,731
Goodwill - - 4,670 4,670
--------------------------------------------------------------------------
Total assets 310,324 - 316,866 627,190
--------------------------------------------------------------------------
--------------------------------------------------------------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and
accrued liabilities 4,615 - 603 5,218
Current portion of
long-term debt 3,600 - - 3,600
Current portion of
derivative instruments 894 - - 894
Other - - 451 451
Long-term debt 145,500 - 183,007 328,507
Other long-term liabilities 6,921 - 1,048 7,969
Stockholders' equity 148,794 - 131,757 280,551
--------------------------------------------------------------------------

Total liabilities and
stockholders' equity 310,324 - 316,866 627,190
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to the Dropdown Predecessor for the Suezmax Dropdowns as at
December 31, 2007, when the vessels were operating and under the common
control of Teekay prior to their acquisition by the Company. Please
refer to "Changes to Accounting for Dropdown Transactions" included
in this release.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of U.S. dollars)
--------------------------------------------------------------------------

Six Months Ended June 30, 2008
------------------------------

Adjustments
-----------

As Prev- Derivative Dropdown
iously Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

Cash and cash equivalents
provided by (used for)
OPERATING ACTIVITIES
--------------------------------------------------------------------------
Net operating cash flow 24,386 - 2,510 26,896
--------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from
long-term debt 115,000 - - 115,000
Repayments of
long-term debt (16,800) - - (16,800)
Proceeds from
long-term debt of
Dropdown Predecessor - - 44,027 44,027
Repayment of
long-term debt of
Dropdown Predecessor - - (153,656) (153,656)
Debt issuance costs (234) - (42) (276)
Net advances to affiliates - - (9,002) (9,002)
Contribution of capital - - 1,020 1,020
Cash dividends paid (20,375) - - (20,375)
Share issuance costs (1,130) - - (1,130)
--------------------------------------------------------------------------
Net financing cash flow 76,461 - (117,653) (41,192)
--------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for vessels
and equipment (810) - (27) (837)
Acquisition of Suezmax
tankers from Teekay
Corporation (114,965) - 114,965 -
Other investing activities (205) - 205 -
--------------------------------------------------------------------------
Net investing cash flow (115,980) - 115,143 (837)
--------------------------------------------------------------------------
Decrease in cash and
cash equivalents (15,133) - - (15,133)
Cash and cash equivalents,
beginning of the period 34,839 - - 34,839
--------------------------------------------------------------------------
Cash and cash equivalents,
end of the period 19,706 - - 19,706
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included in
this release.
(2) Relates to the Dropdown Predecessor for the Suezmax Dropdowns for the
period from January 1, 2008 to April 6, 2008, when the vessels were
operating and under the common control of Teekay prior to their
acquisition by the Company. Please refer to "Changes to Accounting for
Dropdown Transactions" included in this release.


--------------------------------------------------------------------------
TEEKAY TANKERS LTD.
APPENDIX A - RESTATED CASH DIVIDEND CALCULATION
(in thousands of U.S. dollars)
--------------------------------------------------------------------------


Cash Available for Distribution - Three Months Ended June 30, 2008

The Company has adopted a dividend policy to pay a variable quarterly dividend equal to its Cash Available for Distribution, subject to any reserves its board of directors may from time to time determine are required for the prudent conduct of its business. Cash Available for Distribution represents net income plus depreciation and amortization, loan cost amortization, non-cash items and any write-offs or other non-recurring items. The adjustments relating to the accounting for derivative instruments and the Dropdown Predecessor are non-cash items and thus, have no impact on the Company's Cash Available for Distribution.



--------------------------------------------------------------------------
Three Months Ended June 30, 2008
--------------------------------

Adjustments
-----------

As Prev- Derivative Dropdown
iously Instru- Predec- As
Reported ments (1) essor (2) Restated
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------

Net income 22,005 325 298 22,628
Add:
Depreciation and
amortization 5,430 - 129 5,559
Less:
Amortization of debt
issuance costs and
other (21) - (7) (28)
Unrealized gain from
interest rate swap and
amortization of
accumulated other
comprehensive income (5,030) (325) - (5,355)
Amount attributable to
the Dropdown Predecessor - - (420) (420)
--------------------------------------------------------------------------
Cash Available for
Distribution 22,384 - - 22,384

Weighted-average number of
total common shares
outstanding 25,000,000 25,000,000

--------------------------------------------------------------------------
Cash dividend per share $0.90 $0.90
--------------------------------------------------------------------------

(1) Please refer to "Restatement for Accounting under SFAS 133" included
in this release.
(2) Relates to the accounting results of the Dropdown Predecessor for the
Suezmax Dropdowns for the period from April 1, 2008 to April 6, 2008,
when the vessels were operating and under the common control of Teekay
prior to their acquisition by the Company. Please refer to "Changes to
Accounting for Dropdown Transactions" included in this release.

Contact Information

  • Teekay Tankers Ltd.
    Kent Alekson
    Investor Relations Enquiries
    (604) 844-6654
    or
    Teekay Tankers Ltd.
    Alana Duffy
    Media Enquiries
    (604) 844-6605
    Website: www.teekaytankers.com