Teekay Corporation
NYSE : TK

Teekay Corporation

July 28, 2009 08:00 ET

Teekay Corporation Reports First Quarter Results

Highlights - First quarter 2009 cash flow from vessel operations of $153.5 million - First quarter 2009 adjusted net income of $10.9 million, or $0.15 per share (excluding specific items which increased net income by $70.6 million, or $0.97 per share) - Current liquidity at the end of the first quarter of over $2.0 billion; $2.9 billion in consolidated total liquidity including pre-arranged newbuilding financing

HAMILTON, BERMUDA--(Marketwire - July 28, 2009) - Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported adjusted net income(1) of $10.9 million, or $0.15 per share, for the quarter ended March 31, 2009, compared to adjusted net income of $60.7 million, or $0.83 per share, for the same period of the prior year. Adjusted net income excludes a number of specific items which had the net effect of increasing net income by $70.6 million (or $0.97 per share) for the three months ended March 31, 2009 and decreasing net income by $165.9 million (or $2.28 per share) for the three months ended March 31, 2008, as detailed in Appendix A to this release. Including these items, the Company reported net income attributable to the stockholders of Teekay, on a GAAP basis, of $81.5 million(2), or $1.12 per share, for the quarter ended March 31, 2009, compared to a net loss attributable to the stockholders of Teekay, on a GAAP basis, of $105.1 million(2), or $1.45 per share, for the same period of the prior year. Net revenues(3) for the first quarter of 2009 were $525.9 million compared to $571.0 million for the same period of the prior year.

On June 4, 2009, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended June 30, 2009. The cash dividend was paid on July 24, 2009, to all shareholders of record on July 10, 2009.

"The current weak spot tanker market highlights the value of Teekay's business model of building industry-leading franchises within our Marine Midstream platform, which generate long-term, stable cash flows," commented Bjorn Moller, Teekay Corporation's President and Chief Executive Officer. "As well, we have taken additional measures over the past several months to further strengthen our position," continued Mr. Moller. "We have reduced our exposure to the spot tanker market by selling and chartering out a number of our spot vessels and allowing our existing in-charters to expire. Significant progress has also been made on company-wide initiatives to reduce overhead and vessel operating expenses, which combined with our rapidly declining in-chartered fleet will reduce our cash flow breakeven levels. Recently, two of our daughter companies were able to raise a total of $139 million of equity capital and we successfully extended a portion of our 2011 debt maturities, both of which give us additional financial flexibility. Although we have over $2.0 billion in consolidated liquidity and a fully-financed newbuilding program, a key focus for the company is to further enhance our financial flexibility through deleveraging and building on our already significant liquidity position."

(1) Adjusted net income is a non-GAAP financial measure. Please refer to Appendix A to this release for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable financial measure under United States generally accepted accounting principles (GAAP) and information about specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company's financial results.

(2) Effective January 1, 2009, Teekay adopted Statement of Financial Accounting Standards No. 160 (SFAS 160), "Non-controlling Interests in Consolidated Financial Statements - an Amendment of ARB No. 51." SFAS 160 amended the accounting and reporting for non-controlling interest, which is now classified as a component of equity. SFAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing non-controlling interests. All other requirements of SFAS 160 are applied prospectively.

(3) Net revenues represents revenues less voyage expenses. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company's web site at www.teekay.com for a reconciliation of this non-GAAP measure as used in this release to the most directly comparable financial measure under United States GAAP.

Operating Results

The following tables highlight certain financial information for each of Teekay's four publicly-listed entities: Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE:TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP), Teekay Tankers (Teekay Tankers) (NYSE:TNK) and Teekay, excluding results attributed to Teekay Offshore, Teekay LNG and Teekay Tankers, referred to herein as Teekay Parent. A brief description of each entity and an analysis of its respective financial results follows the tables below. Please also refer to the "Fleet List" section below and Appendix B to this release for further details.



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Three Months Ended March 31, 2009
(unaudited)

Teekay Teekay Consol-
Offshore LNG Teekay idation Teekay
(in thousands of Partners Partners Tankers Teekay Adjust- Corporation
U.S. dollars) LP LP Ltd. Parent ments Consolidated
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Net revenues(1) 158,612 75,155 29,924 305,993 (43,802) 525,882
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Vessel operating
expenses(1) 50,734 18,741 7,678 72,175 - 149,328
Time-charter hire
Expense 32,145 - - 148,485 (43,802) 136,828
Depreciation and
Amortization 34,531 19,326 5,955 46,741 - 106,553
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Cash flow from
vessel
operations(2) 57,033 49,213 20,828 26,397 - 153,471
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Net debt(3) 1,406,417 1,366,728 295,516 1,140,227 - 4,208,888
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Three Months Ended March 31, 2008
(unaudited)

Teekay Teekay Consol-
Offshore LNG Teekay idation Teekay
(in thousands of Partners Partners Tankers Teekay Adjust- Corporation
U.S. dollars) LP(4) LP(4) Ltd.(4) Parent ments Consolidated
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Net revenues(1) 152,409 65,727 26,575 380,836 (54,593) 570,954
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Vessel operating
expenses(1) 41,931 15,400 5,580 85,524 - 148,435
Time-charter hire
Expense 33,646 - - 165,867 (54,593) 144,920
Depreciation and
Amortization 32,546 16,072 3,489 45,600 - 97,707
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Cash flow from
vessel
operations(2) 61,864 46,367 19,674 62,913 - 190,818
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Net debt(3) 1,421,632 1,912,884 103,723 1,754,889 - 5,193,128
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(1) Commencing in the quarter ended March 31, 2009, and applied
retroactively, the gains and losses related to non-designated derivative
instruments have been reclassified to a separate line item in the
Statements of Income (Loss) and are no longer included in the amounts
above.
(2) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense, vessel/
goodwill write-downs, gains or losses on the sale of vessels and
unrealized gains and losses relating to derivatives, but includes
realized gains and losses on the settlement of foreign currency forward
contracts. Cash flow from vessel operations is a non-GAAP financial
measure used by certain investors to measure the financial performance
of shipping companies. Please see the Company's web site at
www.teekay.com for a reconciliation of this non-GAAP measure as used in
this release to the most directly comparable GAAP financial measure.
(3) Net debt represents current and long-term debt less cash and, if
applicable, current and long-term restricted cash.
(4) Excludes the historical results of assets acquired from Teekay Parent
for the periods prior to their acquisition by Teekay Offshore, Teekay
LNG and Teekay Tankers as those results are included in the historical
results for Teekay Parent.


Teekay Offshore Partners L.P.

Teekay Offshore is an international provider of marine transportation and storage services to the offshore oil industry. Through its 51 percent ownership interest in Teekay Offshore Operating L.P. (OPCO), Teekay Offshore operates a fleet of 33 shuttle tankers (including eight chartered-in vessels), four Floating Storage and Offtake (FSO) units, nine double-hull conventional oil tankers and two lightering vessels. Teekay Offshore also has direct ownership interests in two shuttle tankers and one FSO unit and has the right to participate in certain Floating Production, Storage and Offloading (FPSO) opportunities. Teekay Parent directly owns the remaining 49 percent interest in OPCO, as well as a 49.99 percent interest in Teekay Offshore (including the two percent General Partner interest).

Cash flow from vessel operations from Teekay Offshore decreased to $57.0 million in the first quarter of 2009, from $61.9 million in the same period of the prior year, primarily due to an increase in vessel operating costs related to its shuttle tanker operations and $2.2 million of restructuring costs associated with the re-flagging of certain Norwegian-flagged shuttle tankers in order to reduce future crewing costs. These cost increases were partially offset by contributions from two Aframax lightering vessels acquired in the second quarter of 2008.

Teekay LNG Partners L.P.

Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services under long-term, fixed-rate time-charter contracts with major energy and utility companies through its current fleet of thirteen LNG carriers, two LPG carriers and eight Suezmax crude oil tankers. In addition, Teekay LNG expects to acquire two newbuilding LNG carriers from Teekay Parent during the third quarter of 2009 and take delivery of four newbuilding LPG carriers in late-2009 and 2010. Teekay Parent currently owns a 53 percent interest in Teekay LNG (including the two percent General Partner interest).

Cash flow from vessel operations from Teekay LNG during the first quarter of 2009 increased to $49.2 million from $46.4 million in the same period of the prior year. This increase was primarily due to the acquisition of the two Kenai LNG carriers from Teekay Parent in April 2008. This increase was partially offset by a reduction in revenue on five Suezmax tankers whereby their daily charter rates are adjusted for changes in LIBOR (offset by a corresponding reduction in interest expense relating to these vessels), as well as $2.0 million of restructuring costs incurred in the first quarter of 2009 to transfer certain ship management functions from Teekay LNG's Spain office to a subsidiary of Teekay Parent.

On March 30, 2009, Teekay LNG completed a follow-on equity offering of four million common units, raising gross proceeds of $70.4 million. Proceeds were used to repay amounts drawn under Teekay LNG's revolving credit facilities.

Subsequent to the first quarter of 2009, Teekay LNG took delivery of the first of five LPG carriers from subsidiaries of IM Skaugen ASA (Skaugen). Upon their delivery, the vessels will commence service under 15-year fixed-rate charters to Skaugen.

Teekay Tankers Ltd.

Teekay Tankers was formed in December 2007 by Teekay Parent as part of its strategy to expand its conventional oil tanker business. Teekay Tankers currently owns a fleet of nine double-hull Aframax tankers and three double-hull Suezmax tankers. Teekay Parent currently owns a 42.2 percent interest in Teekay Tankers (including 100 percent of the Class B common shares).

Cash flow from vessel operations from Teekay Tankers increased to $20.8 million in the first quarter of 2009, from $19.7 million in the same period of the prior year, primarily due to an increase in the size of the fleet, partially offset by a decrease in spot tanker rates in the first quarter of 2009 compared to the same period of the prior year.

On June 24, 2009, Teekay Tankers acquired a 2003-built Suezmax tanker (the Ashkini Spirit) from Teekay Parent for $57.0 million. To finance this acquisition, Teekay Tankers issued seven million Class A common shares, raising gross proceeds of $68.6 million. Proceeds in excess of the purchase price were used to repay a portion of debt outstanding under Teekay Tankers' revolving credit facility.

Teekay Parent

In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Corporation directly owns a substantial fleet of vessels at the 'Parent' company level. As at July 1, 2009, this included 28 conventional tankers (including two Suezmax newbuildings under construction), five FPSOs primarily through its wholly-owned subsidiary, Teekay Petrojarl AS (Teekay Petrojarl), two newbuilding LNG carriers expected to be acquired by Teekay LNG in the third quarter of 2009, a 33 percent interest in four newbuilding LNG carriers under construction and five shuttle tankers (including four Aframax shuttle tanker newbuildings under construction). In addition, as at July 1, 2009, Teekay Parent had 46 chartered-in conventional tankers (including 10 vessels owned by its subsidiaries) and two chartered-in LNG carriers owned by Teekay LNG.

Cash flow from vessel operations from Teekay Parent decreased to $26.4 million in the first quarter of 2009, from $62.9 million in the same period of the prior year, primarily due to a decrease in average spot tanker rates and higher operating expenses in the first quarter of 2009, partially offset by higher cash flow from the FPSO fleet and lower general and administrative expenses as a result of cost reduction initiatives.

On June 24, 2009, Teekay Parent sold a 2003-built Suezmax tanker (the Ashkini Spirit) to Teekay Tankers for $57.0 million. A portion of the proceeds were used to repay drawn amounts under Teekay Parent's revolving credit facilities.

Tanker Market

Average spot rates for crude oil tankers have declined in the first half of 2009, primarily due to three main factors:

- Global oil demand has contracted as a result of the economic downturn with the International Energy Agency (IEA) forecasting a decline of 2.5 million barrels per day (mb/d) in 2009;

- OPEC has announced production cuts of 4.2 mb/d since September 2008, which has reduced the amount of oil available for transportation; and

- The tanker fleet has grown at an above-average pace in the first half of 2009 with net growth of 18.2 million deadweight tonnes (mdwt), or 4.5 percent, since the start of the year.

Seasonal factors such as oil refinery maintenance and the onset of the North Sea oil field maintenance season have further affected crude oil tanker demand in the second quarter of 2009. The removal of up to 40 Very Large Crude Carriers (VLCCs) from the world tanker fleet for use as floating storage has helped tighten active fleet supply to some extent and was one of the reasons for the run-up in crude tanker rates during June 2009.

As of July 10, 2009, the IEA projected global oil demand to average 83.3 mb/d for 2009 which represents a 2.5 mb/d, or 2.9 percent, decline from 2008. The IEA projects that oil demand will recover in 2010 to 85.2 mb/d, an increase of 1.4 mb/d, or 1.7 percent, based on a recovery in the global economy.

The world tanker orderbook for the remainder of 2009 and 2010 is larger than in previous years, which could lead to continued above-average fleet growth. However, delays at new greenfield shipyards, a potential increase in order cancellations as a result of the global credit crunch and an acceleration of single-hull tanker removals ahead of the 2010 IMO phase-out target could moderate tanker fleet growth in the coming quarters.

Teekay's Spot Tanker Fleet Performance

The following table highlights the consolidated operating performance of the Company's conventional spot tanker pools and period out-charters with an initial term of between one and three years, measured in net revenues per revenue day or time-charter equivalent (TCE) rates:



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Three Months Ended

March 31, December 31, March 31,
2009 2008 2008
-------------------------------

Gemini Suezmax Pool average spot TCE rate(1) $42,188 $47,173 $43,255
Average Suezmax time-charter rate (2)(3) $35,906 $29,083 $28,138

Teekay Aframax Pool average spot TCE
rate (1)(4) $25,200 $32,890 $35,671
Average Aframax time-charter rate (2) $32,944 $32,196 $31,759

Taurus LRII Pool average spot TCE rate (1) $26,228 $48,309 $29,546
Average LRII time-charter rate (2) $25,628 $30,264 $31,986

MR product tanker average spot TCE rate (1) $17,929 $22,350 $22,632
Average MR product tanker time-charter
rate (2) $21,374 $26,405 $19,471
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(1) Average spot rates include short-term time-charters and fixed-rate
contracts of affreightment that are under a year in duration and third-
party vessels trading in their respective pools but exclude vessels
greater than 15 years old.
(2) Average time-charter rates include realized gains and losses of
synthetic time-charters and forward freight agreements (FFAs), short-
term time-charters, and fixed-rate contracts of affreightment that are
between one and three years in duration.
(3) Average Suezmax time-charter rates exclude the cost of spot in-
chartering vessels for contract of affreightment cargoes.
(4) Including items outside of the pool (vessels greater than 15 years old
and realized results of bunker hedging and FFAs) the average Teekay
Aframax spot TCE rate was $25,541 per day, $32,482 per day and $35,120
per day during the three months ended March 31, 2009, December 31, 2008
and March 31, 2008, respectively.


Fleet List

As at July 1, 2009, Teekay's consolidated fleet consisted of 170 vessels, including chartered-in vessels and newbuildings under construction but excluding vessels managed for third parties, as summarized in the following table:



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Number of Vessels (1)
------------------------------------------
Owned Chartered-in
Vessels Vessels Newbuildings Total
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Teekay Offshore Fleet
Shuttle Tankers (2) 27 8 - 35
FSO Units (3) 5 - - 5
Aframax Tankers 11 - - 11
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Total Teekay Offshore Fleet 43 8 - 51
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Teekay LNG Fleet
LNG Carriers 13 - - 13
LPG Carriers 2 - 4 6
Suezmax Tankers 8 - - 8
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Total Teekay LNG Fleet 23 - 4 27
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Teekay Tankers Fleet
Aframax Tankers 9 - - 9
Suezmax Tankers 3 - - 3
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Total Teekay Tankers Fleet 12 - - 12
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Teekay Parent Fleet
Aframax Tankers (4) 7 24 - 31
Suezmax Tankers 11 7 2 20
VLCC Tankers - 1 - 1
Large Product Tankers 8 4 - 12
LNG Carriers (5) 2 - 4 6
Shuttle Tankers 1 - 4 5
FPSO Units 5 - - 5
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Total Teekay Parent Fleet 34 36 10 80
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Total Teekay Consolidated Fleet 112 44 14 170
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(1) Excludes vessels managed on behalf of third parties.
(2) Includes six shuttle tankers in which Teekay Offshore's ownership is 50
percent.
(3) Includes one FSO in which Teekay Offshore's ownership is 89 percent.
(4) Excludes nine vessels chartered-in from Teekay Offshore Partners and
one vessel chartered-in from Teekay Tankers.
(5) Excludes two LNG carriers chartered-in from Teekay LNG.


During the first quarter of 2009, Teekay Parent sold and delivered one newbuilding Handymax product tanker for total proceeds of $50.5 million and completed the sale and four-year lease-back of one Aframax tanker for $32.7 million. The total gain related to the sale of these vessels was approximately $16.5 million.

Subsequent to the first quarter of 2009, Teekay Parent sold and delivered two LR product tankers for proceeds of $113.7 million. The total gain related to the sale of these vessels was approximately $29.7 million. In July 2009, Teekay Parent entered into an agreement to sell one of its older Aframax tankers for $16.4 million, which is expected to be delivered in the fall of 2009.

Liquidity and Capital Expenditures

As of March 31, 2009, Teekay had current consolidated liquidity of over $2.0 billion, consisting of $770.5 million cash and $1,254.7 million of undrawn revolving credit facilities. In addition, the Company has pre-arranged newbuilding financing of $900 million, bringing total consolidated liquidity to approximately $2.9 billion.

The Company's remaining capital commitments relating to its portion of newbuildings were as follows as at March 31, 2009:



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(in millions) 2009 2010 2011 2012 Total
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Teekay Offshore - - - - -
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Teekay LNG $162 $43 - - $205
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Teekay Tankers - - - - -
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Teekay Parent 132 270 $320 $45 767
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Total Teekay Corporation Consolidated $294 $313 $320 $45 $972
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As indicated above, the Company had total capital expenditure commitments of approximately $972 million remaining as at March 31, 2009, of which $900 million has pre-arranged financing, leaving only $72 million to be funded from operating cash flow or other sources.

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 170 vessels, offices in 17 countries and approximately 6,800 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".



TEEKAY CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. dollars, except share and per share data)
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Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
(unaudited) (unaudited) (unaudited)
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REVENUES (1) 616,551 797,320 740,415
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OPERATING EXPENSES
Voyage expenses (1) 90,669 185,703 169,461
Vessel operating expenses (1)(2) 149,328 170,431 148,435
Time-charter hire expense 136,828 166,645 144,920
Depreciation and amortization 106,553 105,902 97,707
General and administrative (1)(2) 51,140 55,835 69,065
Gain on sale of vessels and equipment,
net of write-downs (118) (20,302) (496)
Goodwill impairment - 330,517 -
Restructuring charges 5,558 4,449 1,500
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539,958 999,180 630,592
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Income (loss) from vessel operations 76,593 (201,860) 109,823
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OTHER ITEMS
Interest expense (1) (43,767) (77,457) (88,706)
Interest income (1) 6,678 23,703 33,890
Realized and unrealized gain (loss) on
derivative instruments (1) 46,822 (447,373) (151,211)
Income tax (expense) recovery (5,868) 23,132 (2,483)
Equity income (loss) from joint
ventures (1) 11,422 (25,305) (3,609)
Foreign exchange gain (loss) 11,312 23,908 (33,581)
Other - net (3) 1,582 (11,647) 4,188
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Net income (loss) (4) 104,774 (692,899) (131,689)
Less: Net (income) loss attributable
to non-controlling interests (23,269) 42,026 26,560
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Net income (loss) attributable to
stockholders of Teekay 81,505 (650,873) (105,129)
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Earnings (loss) per common share of Teekay
- Basic $1.12 ($8.98) ($1.45)
- Diluted $1.12 ($8.98) ($1.45)
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Weighted-average number of common
shares outstanding
- Basic 72,516,193 72,467,924 72,644,397
- Diluted 72,745,781 72,467,924 72,644,397
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(1) Commencing in 2009, and applied retroactively, the realized and
unrealized gains and losses related to derivative instruments that are
not designated as hedges for accounting purposes have been reclassified
to a separate line item in the statements of income (loss). The realized
gains (losses) relate to the amounts the Company actually paid to settle
such derivative instruments and the unrealized gains (losses) relate to
the change in fair value of such derivative instruments, as detailed in
the table below:

Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
Realized gains (losses) relating to:
Interest rate swaps (21,310) (9,925) (1,716)
Foreign currency forward contracts
Vessel operating expenses (3,438) (1,216) 5,170
General and administrative (2,059) (1,171) 3,650
Voyage expenses and other - (526) 4,896
Bunkers and FFAs (2,289) (7,623) (5,289)
-------------------------------
(29,096) (20,461) 6,711
-------------------------------
Unrealized gains (losses) relating to:
Interest rate swaps 62,975 (432,066) (165,107)
Foreign currency forward contracts 6,751 (13,753) (1,879)
Bunkers, FFAs and other 6,192 18,907 9,064
-------------------------------
75,918 (426,912) (157,922)
-------------------------------
Total realized and unrealized gains (losses)
on non-designated derivative instruments 46,822 (447,373) (151,211)
-------------------------------
-------------------------------

In addition, equity income (loss) from joint ventures includes net
unrealized gains from non-designated interest rate swaps held within the
joint ventures of $7.8 million for the three months ended March 31, 2009, an
unrealized loss of $30.4 million for the three months ended December 31,
2008, and $nil for the three months ended March 31, 2008.

(2) The Company has entered into foreign currency forward contracts, which
are economic hedges of vessel operating expenses and general and
administrative expenses. Certain of these forward contracts have been
designated as cash flow hedges pursuant to United States GAAP.
Unrealized gains (losses) arising from hedge ineffectiveness from such
forward contracts are reflected in vessel operating expenses and general
and administrative expenses in the above Statements of Income (Loss), as
detailed in the table below:

Three Months Ended
March 31, December 31, March 31,
2009 2008 2008
Vessel operating expenses (223) (9,015) (635)
General and administrative 1,997 (4,667) (415)

(3) Other - net includes intangible impairments of $1.1 million, $9.7
million and $nil for the three months ended March 31, 2009, December 31,
2008 and March 31, 2008, respectively.

(4) Commencing in 2009, and applied retroactively, in accordance with SFAS
160, the Company's net income (loss) includes income (loss) attributable
to non-controlling interests.


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TEEKAY CORPORATION
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
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As at March 31, As at December 31,
2009 2008
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents 770,450 814,165
Other current assets 320,820 438,829
Restricted cash - current 31,984 35,841
Restricted cash - long-term 603,694 614,715
Vessels held for sale - 69,649
Vessels and equipment 6,792,372 6,713,392
Advances on newbuilding contracts 343,846 553,702
Derivative assets 127,203 167,326
Investment in joint ventures 112,365 103,956
Investment in direct financing leases 278,204 79,508
Other assets 155,094 155,959
Intangible assets 255,166 264,768
Goodwill 203,191 203,191
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Total Assets 9,994,389 10,215,001
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LIABILITIES AND EQUITY
Accounts payable and accrued liabilities 296,453 374,724
Other current liabilities 23,443 22,255
Current portion of long-term debt 361,013 392,659
Long-term debt 5,254,003 5,377,474
Derivative liabilities 711,777 843,265
In process revenue contracts 302,076 317,865
Other long-term liabilities 254,583 234,354
Equity:
Non-controlling interests 653,526 583,938
Stockholders of Teekay 2,137,515 2,068,467
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Total Liabilities and Equity 9,994,389 10,215,001
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TEEKAY CORPORATION

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
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Three Months Ended
March 31,
2009 2008
(unaudited) (unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
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Net operating cash flow 110,678 72,993
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FINANCING ACTIVITIES
Net proceeds from long-term debt 183,728 561,918
Scheduled repayments of long-term debt (51,057) (24,438)
Prepayments of long-term debt (261,250) (232,111)
Increase in restricted cash 6,734 2,651
Repurchase of common stock - (20,512)
Net proceeds from the public offering of Teekay LNG 68,524 -
Cash dividends paid (22,928) (20,013)
Other 1,885 (566)
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Net financing cash flow (74,364) 266,929
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INVESTING ACTIVITIES
Expenditures for vessels and equipment (171,303) (292,917)
Proceeds from sale of vessels and equipment 83,405 36,630
Purchase of marketable securities - (520)
Proceeds from sale of marketable securities - 7,283
Advances from (loans to) joint ventures 273 (3,085)
Other 7,596 25,687
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Net investing cash flow (80,029) (226,922)
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(Decrease) increase in cash and cash equivalents (43,715) 113,000
Cash and cash equivalents, beginning of the period 814,165 442,673
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Cash and cash equivalents, end of the period 770,450 555,673
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TEEKAY CORPORATION
APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
(in thousands of U.S. dollars, except per share data)

Set forth below is a reconciliation of the Company's unaudited adjusted net
income, a non-GAAP financial measure, to net income (loss) as determined in
accordance with GAAP, adjusted for some of the significant items of income
and expense that affected the Company's net income (loss) for the three
months ended March 31, 2009 and 2008, all of which items are typically
excluded by securities analysts in their published estimates of the
Company's financial results:

---------------------------------------------------------------------------
Three Months Ended Three Months Ended
March 31, 2009 March 31, 2008
(unaudited) (unaudited)
$ Per $ Per
$ Share(1) $ Share(1)
---------------------------------------------------------------------------
Net income (loss) - GAAP basis 104,774 (131,689)
Adjust for: Net (income) loss
attributable to non-controlling
interests (23,269) 26,560
---------------------------------------------------------------------------
Net income (loss) attributable to
stockholders of Teekay 81,505 1.12 (105,129) (1.45)
Add (subtract) specific items
affecting net income:
Unrealized (gains) losses from
derivative instruments (2) (85,490) (1.18) 157,009 2.16
Foreign currency exchange (gains)
losses (3) (11,312) (0.16) 33,581 0.46
Deferred income tax expense on
unrealized foreign exchange gains (4) 8,364 0.12 8,396 0.12
Restructuring charge (5) 5,558 0.08 - -
Gain on sale of vessels and equipment (118) 0.00 (496) (0.01)
Net effect from non-cash changes in
purchase price allocation for the
acquisition of 50 percent of OMI
Corporation (6) - - 3,944 0.05
Other (7) 1,508 0.02 2,581 0.04
Non-controlling interests' share of
items above 10,933 0.15 (39,141) (0.54)
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Total adjustments (70,557) (0.97) 165,874 2.28
---------------------------------------------------------------------------
Adjusted net income 10,948 0.15 60,745 0.83
---------------------------------------------------------------------------
---------------------------------------------------------------------------

(1) Fully diluted per share amounts.
(2) Reflects the unrealized gains or losses relating to the change in the
mark-to-market value of derivative instruments that are not designated
as hedges for accounting purposes, including those included in equity
income (loss) from joint ventures, and the ineffective portion of
foreign currency forward contracts designated as hedges for accounting
purposes.
(3) Foreign currency exchange (gains) losses primarily relate to the
Company's debt denominated in Euros and deferred tax liability
denominated in Norwegian Kroner. Nearly all of the Company's foreign
currency exchange gains and losses are unrealized.
(4) Primarily due to deferred income tax related to unrealized foreign
exchange gains and losses.
(5) Restructuring charges relate to the reorganization of certain of the
Company's operational functions and the re-flagging of certain of the
Company's shuttle tankers.
(6) Primarily relates to changes in amortization of intangible assets as a
result of adjustments to the purchase price allocation of OMI
Corporation.
(7) Primarily relates to gains and losses on bond repurchases (8.875% Notes
due 2011), non-recurring adjustments to tax accruals, impairment of
intangible assets and settlement of a previous claim against OMI
Corporation.


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TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY BALANCE SHEET AS AT MARCH 31, 2009
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
(unaudited)

Teekay Teekay Teekay Teekay
Offshore LNG Tankers Petrojarl
--------------------------------------

ASSETS
Cash and cash equivalents 147,837 200,960 22,412 38,936
Other current assets 58,402 16,348 9,240 50,321
Restricted cash (current & non-
current) - 632,215 - 3,019
Vessels and equipment 1,680,279 1,989,536 428,721 1,294,442
Advances on newbuilding contracts - 54,871 - -
Derivative assets - 121,318 - -
Investment in joint ventures - 68,167 - -
Investment in direct financing leases 73,122 204,292 - -
Other assets 11,190 26,300 3,367 17,892
Advances to affiliates 11,221 9,980 4,433 -
Equity investment in subsidiaries - - - -
Intangibles and goodwill 170,139 175,153 4,670 999
--------------------------------------

TOTAL ASSETS 2,152,190 3,499,140 472,843 1,405,609
--------------------------------------
--------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities 57,944 46,593 13,442 37,449
Other current liabilities 22,207 1,236 - -
Advances from affiliates 11,714 92,668 1,388 117,159
Current portion of long-term debt 118,598 202,166 3,600 12,100
Long-term debt 1,435,656 1,997,737 314,328 355,934
Derivative liabilities 154,565 224,929 20,543 45,373
In-process revenue contracts - - 935 298,182
Other long-term liabilities 38,051 56,591 - 40,209
Equity:
Non-controlling interests (1) 36,417 1,256 - 860
Equity attributable to stockholders/
unitholders of publicly-listed
entities 277,038 875,964 118,607 498,343
--------------------------------------

TOTAL LIABILITIES AND
EQUITY 2,152,190 3,499,140 472,843 1,405,609
--------------------------------------
--------------------------------------

NET DEBT (2) 1,406,417 1,366,728 295,516 326,079
--------------------------------------
--------------------------------------


Teekay Consolidation
Standalone Adjustments Total
------------------------------------

ASSETS
Cash and cash equivalents 360,305 - 770,450
Other current assets 186,509 - 320,820
Restricted cash (current & non-current) 444 - 635,678
Vessels and equipment 1,399,394 - 6,792,372
Advances on newbuilding contracts 288,975 - 343,846
Derivative assets 5,885 - 127,203
Investment in joint ventures 44,198 - 112,365
Investment in direct financing leases 790 - 278,204
Other assets 96,345 - 155,094
Advances to affiliates (25,634) - -
Equity investment in subsidiaries 1,154,959 (1,154,959) -
Intangibles and goodwill 107,396 - 458,357
------------------------------------

TOTAL ASSETS 3,619,566 (1,154,959) 9,994,389
------------------------------------
------------------------------------
LIABILITIES AND EQUITY
Accounts payable and accrued liabilities 141,025 - 296,453
Other current liabilities - - 23,443
Advances from affiliates (222,929) - -
Current portion of long-term debt 24,549 - 361,013
Long-term debt 1,150,348 - 5,254,003
Derivative liabilities 266,367 - 711,777
In-process revenue contracts 2,959 - 302,076
Other long-term liabilities 119,732 - 254,583
Equity:
Non-controlling interests (1) - 614,993 653,526
Equity attributable to stockholders/
unitholders of publicly-listed
entities 2,137,515 (1,769,952) 2,137,515
------------------------------------

TOTAL LIABILITIES AND
EQUITY 3,619,566 (1,154,959) 9,994,389
------------------------------------
------------------------------------

NET DEBT (2) 814,148 - 4,208,888
------------------------------------
------------------------------------

(1) Non-controlling interests in the Teekay Offshore and Teekay LNG columns
represent the joint venture partners' share of the joint venture net
assets. Non-controlling interest in the Consolidation Adjustments
column represents the public's share of the net assets of Teekay's
publicly-traded subsidiaries. Commencing in 2009, in accordance with
SFAS 160, non-controlling interest is included as a component of equity.
(2) Net debt represents current and long-term debt less cash and, if
applicable, current and long-term restricted cash.


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TEEKAY CORPORATION
APPENDIX B - SUPPLEMENTAL FINANCIAL INFORMATION
SUMMARY STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2009
(in thousands of U.S. dollars)
---------------------------------------------------------------------------
(unaudited)

Teekay Teekay Teekay Teekay
Offshore LNG Tankers Petrojarl
------------------------------------

Voyage revenues 183,425 75,673 30,504 93,739
------------------------------------

Voyage expenses 24,813 518 580 -
Vessel operating expenses 50,734 18,741 7,678 42,778
Time-charter hire expense 32,145 - - 5,823
Depreciation and amortization 34,531 19,326 5,955 25,779
General and administrative 11,922 3,555 1,418 9,786
Gain on sale of vessels and
equipment, net of write-downs - - - -
Restructuring charge 2,201 1,951 - -
------------------------------------
Total operating expenses 156,346 44,091 15,631 84,166
------------------------------------

Income from vessel operations 27,079 31,582 14,873 9,573
------------------------------------

Net interest expense (9,742) (13,144) (1,718) (3,721)
Realized and unrealized gain (loss) on
derivative instruments 17,584 (16,236) 944 (395)
Income tax (expense) recovery (4,138) 250 - (48)
Equity income (loss) from joint
ventures - 3,873 - (310)
Equity in earnings of subsidiaries (1) - - - -
Foreign exchange gain (loss) (2,248) 20,428 34 (2,307)
Other - net 3,081 (81) - (344)
------------------------------------
Net income 31,616 26,672 14,133 2,448
Less: Net (income) loss attributable
to non-controlling interests (2) (1,222) 1,695 - (32)
------------------------------------
Net income attributable to
stockholders/unitholders of
publicly-listed entities 30,394 28,367 14,133 2,416
------------------------------------
------------------------------------

------------------------------------
CASH FLOW FROM VESSEL
OPERATIONS (3) 57,033 49,213 20,828 15,834
------------------------------------
------------------------------------


Teekay Consolidation
Standalone Adjustments Total
----------------------------------

Voyage revenues 283,417 (50,207) 616,551
----------------------------------

Voyage expenses 71,163 (6,405) 90,669
Vessel operating expenses 29,397 - 149,328
Time-charter hire expense 142,662 (43,802) 136,828
Depreciation and amortization 20,962 - 106,553
General and administrative 24,459 - 51,140
Gain on sale of vessels and
equipment, net of write-downs (118) - (118)
Restructuring charge 1,406 - 5,558
----------------------------------
Total operating expenses 289,931 (50,207) 539,958
----------------------------------

Income from vessel operations (6,514) - 76,593
----------------------------------

Net interest expense (8,764) - (37,089)
Realized and unrealized gain (loss) on
derivative instruments 44,925 - 46,822
Income tax (expense) recovery (1,932) - (5,868)
Equity income (loss) from joint ventures 7,859 - 11,422
Equity in earnings of subsidiaries (1) 51,600 (51,600) -
Foreign exchange gain (loss) (4,595) - 11,312
Other - net (1,074) - 1,582
----------------------------------
Net income 81,505 (51,600) 104,774
Less: Net (income) loss attributable to
non-controlling interests (2) - (23,710) (23,269)
----------------------------------
Net income attributable to stockholders/
unitholders of publicly-listed entities 81,505 (75,310) 81,505
----------------------------------
----------------------------------

----------------------------------
CASH FLOW FROM VESSEL
OPERATIONS (3) 10,563 - 153,471
----------------------------------
----------------------------------

(1) Teekay Corporation's proportionate share of the net earnings of its
publicly-traded subsidiaries.
(2) Net (income) loss attributable to non-controlling interests in the
Teekay Offshore and Teekay LNG columns represent the joint venture
partners' share of the net income (loss) of the respective joint
ventures. Net (income) loss attributable to non-controlling interest in
the Consolidation Adjustments column represents the public's share of
the net income (loss) of Teekay's publicly-traded subsidiaries.
Commencing in 2009, in accordance with SFAS 160, the Company's net
income (loss) includes income (loss) attributable to non-controlling
interests.
(3) Cash flow from vessel operations represents income from vessel
operations before depreciation and amortization expense, vessel/goodwill
write-downs, gains or losses on the sale of vessels and unrealized gains
and losses relating to derivatives, but includes realized gains and
losses on the settlement of foreign currency forward contracts. Cash
flow from vessel operations is a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping
companies. Please see the Company's web site at www.teekay.com for
a reconciliation of this non-GAAP financial measure as used in this
release to the most directly comparable GAAP financial measure.


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: tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; the Company's financial position, including the stability of its cash flows, its liquidity position and the expected decline in its cash flow breakeven levels; the Company's future capital expenditure commitments and the financing requirements for such commitments; and the Company's plan to deleverage its balance sheet and build further liquidity. 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; changes in the Company's expenses; the Company's future capital expenditure requirements; conditions in the United States capital markets; 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, 2008. 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
    + 1 (604) 844-6654
    or
    Teekay Corporation
    Alana Duffy
    Media Enquiries
    + 1 (604) 844-6605
    www.teekay.com