Teekay Corporation
NYSE : TK

Teekay Corporation

December 18, 2008 16:07 ET

Teekay Corporation Provides Estimated Third Quarter Financial Results

HAMILTON, BERMUDA--(Marketwire - Dec. 18, 2008) - Teekay Corporation (Teekay or the Company) (NYSE:TK) today announced that it expects its adjusted fully-diluted earnings per share(1) for the three months ended September 30, 2008 to exceed the current consensus estimate of $1.01 per share. The Company also announced that it expects to publish its complete third quarter results in January 2009, upon finalization of the regular quarterly review by the Company's independent auditor, Ernst & Young LLP. The delay is due to a later than normal start to the Company's third quarter earnings review process as a result of committing resources to finalize the previously announced restatement of historical results.

"I am pleased to report that the third quarter was another strong quarter for Teekay," commented Bjorn Moller, Teekay's President and Chief Executive Officer. "We benefited both from strong spot tanker rates and the performance of our stable fixed-rated businesses. Additionally, we are confident in the ability of each of our daughter companies to generate substantial cash flows, as demonstrated by the best-ever quarterly dividend of $1.07 per share at Teekay Tankers, the recent four percent distribution increase at Teekay LNG and the recent 12.5 percent distribution increase at Teekay Offshore."

The Company's estimated earnings for the third quarter of 2008 reflect the strong spot tanker freight rates prevalent during the quarter. As a result, the Company realized an average Suezmax spot rate of approximately $67,000 per day and an average Aframax spot rate of approximately $46,000 per day. This counter-seasonal strength in tanker freight rates was primarily due to higher volumes of oil production from ton-mile intensive OPEC producers, rising crude oil import volumes into the United States, China and India, as well as other factors, including port delays in the United States and Japan and stockpiling of oil ahead of the Olympics in China. Tanker rates have also been supported in the second half of 2008 by a dampening of tanker supply growth due to the removal of tankers from the global fleet for conversion purposes and an increase in scrapping compared to previous years. During the first nine months of 2008, the world tanker fleet grew by three percent, a decrease from the annual fleet supply growth rate of approximately six percent experienced for the same period in 2006 and 2007.

During the fourth quarter of 2008, rates for medium sized crude-oil tankers have remained relatively firm, primarily due to the seasonal increase in oil demand during the northern hemisphere winter, rising volumes of non-OPEC production as seasonal maintenance was completed in the North Sea, and weather-related delays, particularly in the Bosphorus Straits. The Company estimates that it has completed approximately 90 percent of its spot bookings for the fourth quarter at an average Suezmax rate of approximately $46,500 per day and an average Aframax rate of approximately $36,500 per day. Current spot tanker freight rates are above these levels.

Following the release of preliminary restated results on November 25, 2008, the Company has continued to make progress on its review of one outstanding item related to expense accruals under its long-term incentive program. In particular, the Company is reviewing the accounting methodology for determining fair value of the future liability and amortization period. As previously indicated, any adjustments resulting from accounting changes associated will be non-cash in nature. With the exception of this item, no additional items have been raised and the Company and its auditors are working diligently to release final restated results as expeditiously as possible.

(1) Adjusted fully-diluted earnings per share does not include specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company's financial results. These excluded items typically include: gains or losses on the sale of vessels and equipment, foreign currency exchange gains or losses, deferred income tax expense on unrealized foreign exchange gains or losses and unrealized gains or losses from derivative instruments.

About Teekay

Teekay Corporation transports more than 10 percent of the world's seaborne oil, has built a significant presence in the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE:TGP), is further growing its operations in the offshore oil production, storage and transportation sector through its publicly-listed subsidiary, Teekay Offshore Partners L.P. (NYSE:TOO), and continues to expand its conventional tanker business through its publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE:TNK). With a fleet of more than 180 vessels, offices in 17 countries and 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay's reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the Company's future growth prospects; tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; the Company's future capital expenditure commitments and the financing requirements for such commitments; the timing of newbuilding deliveries; the commencement of charter contracts; the estimated adjusted fully-diluted earnings per share for the quarter ended September 30, 2008; the timing of the release of the Company's results for the third quarter of 2008; and the Company's financial position in the current economic and financial environment. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs and FPSOs; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; changes affecting the offshore tanker market; shipyard production delays; the Company's future capital expenditure requirements; the Company's, Teekay LNG's, Teekay Offshore's, and Teekay Tankers' potential inability to raise financing to purchase additional vessels; conditions in the United States capital markets; changes affecting the conventional tanker market; the determination of the Company's restatement of prior period results; any adjustments to the Company's established third quarter results arising from the regular quarterly review by the Company's auditors, Ernst & Young LLP; and other factors discussed in Teekay's filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2007. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Contact Information

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