November 13, 2009HAMILTON, BERMUDA–(Marketwire – Nov. 13, 2009) – Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE:TNK) today reported its third quarter results for 2009. During the quarter, the Company generated $8.6 million in Cash Available for Distribution(1). On November 12, 2009 Teekay Tankers declared a dividend of $0.15 per share for the third quarter of 2009, representing a total cash dividend of $4.8 million(2) which will be paid on November 27, 2009 to all shareholders of record on November 20, 2009. Teekay Tankers’ policy is 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. Since the Company’s initial public offering in December 2007, it has declared a dividend in seven consecutive quarters, which now totals $4.53 per share on a cumulative basis (including the $0.15 per share dividend to be paid on November 27, 2009). Estimated Fourth Quarter 2009 Dividend The table below presents the estimated cash dividend per share for the quarter ending December 31, 2009 at various average rates earned by the Company’s spot tanker fleet and reflects the contribution from its existing fixed-rate time-charter contracts and the effect of scheduled vessel drydockings. These estimates are based on current assumptions and actual dividends may differ materially from those included in the following table: /T/ —————————————————————————- Q4 2009 Estimated Suezmax Spot Rate Assumption (TCE basis per day) Dividend ——————————————————— Per Share(i) $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 —————————————————————————- $ 5,000 $0.11 $0.17 $0.22 $0.30 $0.37 $0.43 ——————————————————————- Aframax $10,000 $0.16 $0.21 $0.27 $0.34 $0.41 $0.47 Spot ——————————————————————- Rate $15,000 $0.20 $0.26 $0.32 $0.39 $0.46 $0.52 Assump- ——————————————————————- tion $20,000 $0.25 $0.31 $0.36 $0.44 $0.50 $0.57 (TCE ——————————————————————- basis $25,000 $0.30 $0.36 $0.41 $0.47 $0.54 $0.61 per ——————————————————————- day) $30,000 $0.35 $0.40 $0.45 $0.52 $0.59 $0.66 ——————————————————————- $35,000 $0.39 $0.44 $0.50 $0.57 $0.64 $0.71 ——————————————————————- $40,000 $0.43 $0.49 $0.54 $0.62 $0.69 $0.76 —————————————————————————- (i) Estimated dividend per share is based on Cash Available for Distribution, less $0.9 million for principal payments related to one of the Company’s debt facilities and less $3.0 million reserve for estimated drydocking costs and other vessel capital expenditures. /T/ (1) Cash Available for Distribution represents net income (loss) plus depreciation and amortization, unrealized losses from derivatives, non-cash items and any write-offs or other non-recurring items, less unrealized gains from derivatives and net income attributable to the historical results of vessels acquired by the Company from Teekay Corporation (Teekay), referred to herein as the Dropdown Predecessor, for the period when these vessels were owned and operated by Teekay. (2) Please refer to Appendix A to this release for the calculation of the cash dividend amount. Tanker Market Spot tanker rates declined to multi-year lows in the third quarter of 2009 due to the ongoing effects of reduced global oil demand coupled with tanker fleet growth. The tanker market was also affected in the third quarter by a reduction in global refinery throughput due to both scheduled maintenance programs and weaker refinery margins. Seasonal factors such as North Sea oil field maintenance exerted further downward pressure on crude tanker rates. In October 2009, the International Monetary Fund (IMF) upgraded its forecast for global GDP growth in 2010 to 3.1 percent. Several agencies have upgraded their 2010 outlook for global oil demand based on a stronger recovery in the global economy than was previously expected. As of November 12, 2009, the International Energy Agency (IEA) projected global oil demand of 86.2 million barrels per day (mb/d) in 2010, a 1.3 mb/d (or 1.6 percent) increase from 2009. The world tanker fleet grew by approximately 6.5 percent in the first three quarters of 2009 as an influx of new vessels outpaced tanker removals. In recent weeks, there has been an increase in single-hull tanker scrapping ahead of the 2010 International Maritime Organization (IMO) phase-out target with seven Very Large Crude Carriers (VLCCs) sold for scrap since August 2009. An increase in tanker scrapping combined with the potential for order cancellations as a result of tighter credit markets and construction delays at newly established shipyards could help dampen tanker fleet growth in the coming months. Financial Summary The Company reported adjusted net income(1) of $1.8 million, or $0.05 per share, for the quarter ended September 30, 2009, compared to adjusted net income of $9.7 million, or $0.38 per share, for the quarter ended June 30, 2009. Adjusted net income for the three months ended September 30, 2009 excludes an unrealized loss relating to changes in the fair value of an interest rate swap of $3.3 million, or $0.10 per share. Adjusted net income for the three months ended June 30, 2009 excludes an unrealized gain of $6.6 million, or $0.21 per share, relating to changes in the fair value of an interest rate swap and $0.7 million, or $0.02 per share, related to net income attributable to the Dropdown Predecessor for the Ashkini Spirit which was acquired by the Company from Teekay Corporation on June 24, 2009. These adjustments are detailed in note (4) to the Consolidated Statements of Income and Loss included in this release. Including these items, the Company reported net loss, on a GAAP basis, of $1.5 million, or $0.05 per share, for the quarter ended September 30, 2009, compared to net income, on a GAAP basis, of $16.9 million, or $0.64 per share, for the quarter ended June 30, 2009. Net voyage revenues(2) for the third quarter of 2009 decreased to $20.6 million from $30.5 million in the prior quarter. Teekay Tankers annual results on Form 20-F for the year ended December 31, 2008, as filed with the United States Securities and Exchange Commission (SEC), can be found on the Company’s web site www.teekaytankers.com or alternatively can be requested free of charge by contacting Teekay Tankers Investor Relations. (1) Adjusted net income is a non-GAAP financial measure. Please refer to Note (4) to the Consolidated Statements of Income included in this release for a reconciliation of this non-GAAP measure 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) Net voyage revenues represents 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. Operating Results The following table highlights the operating performance of the Company’s time-charter and spot vessels measured in net voyage revenue per revenue day, or time-charter equivalent (TCE) rates, before pool management fees, commissions and offhire bunker expenses: /T/ ————————————————————————- Three Months Ended September 30, 2009 June 30, 2009 ————————————————————————- Time-Charter Fleet Aframax revenue days 444 434 Aframax TCE per revenue day $30,968 $31,417 Suezmax revenue days 92 91 Suezmax TCE per revenue day(i) $31,182 $30,928 Spot Fleet Aframax revenue days 258 334 Aframax TCE per revenue day $11,334 $17,788 Suezmax revenue days 183 98 Suezmax TCE per revenue day $15,631 $26,224(ii) ————————————————————————- Total Fleet Aframax revenue days 702 768 Aframax TCE per revenue day $23,751 $25,496 Suezmax revenue days 275 189 Suezmax TCE per revenue day(i) $20,834 $28,489(ii) ————————————————————————- (i) Excludes certain profit share amounts relating to the Ganges Spirit, which employed on a time-charter contract at a base rate of $30,500 per day with a profit sharing agreement whereby Teekay Tankers is entitled to the first $3,000 per day of the vessel’s earnings above the base rate and 50 percent of the earnings above $33,500 per day. The profit share amount is determined on an annual basis in the third quarter of each year for the period from June 1 to May 31. The Company recognized $3.7 million in the second quarter relating to the profit share amount. The TCE rate per day for the Suezmax time- charter fleet and for the total Suezmax fleet for the three months ended June 30, 2009, is $71,158 and $47,859, respectively, including the profit share amount recognized in the quarter. (ii) Suezmax spot TCE rates exclude the results of the Ashkini Spirit prior to the acquisition of this vessel by the Company on June 24, 2009. /T/ Teekay Tankers’ Fleet The following table summarizes the Company’s fleet as of November 1, 2009: /T/ ————————————————————— Aframax Suezmax Number of Fleet Fleet Owned Vessels ————————————————————— Time-Charter Vessels 5 1 6 Spot Vessels 4 2 6 ————————————————————— Total 9 3 12 ————————————————————— /T/ Currently, 53 percent and 49 percent of the aggregate ship days for the Company’s fleet for the fourth quarter of 2009 and fiscal 2010, respectively, are under fixed-rate charters. The Company recently entered into a new 13-month fixed-rate out-charter for one of its spot-traded Suezmax tankers commencing in January 2010. Teekay Tankers has an option to purchase from Teekay one additional existing Suezmax tanker prior to June 19, 2010. The Company also anticipates additional opportunities to expand its fleet through acquisitions of tankers from third parties and from time to time additional tankers offered from Teekay. This may include crude oil and product tankers. Liquidity As of September 30, 2009, the Company had total liquidity of $137.1 million (which consisted of $13.4 million of cash and $123.7 million in an undrawn revolving credit facility), compared to $141.3 million as at June 30, 2009. About Teekay Tankers Teekay Tankers Ltd. was formed in December 2007 by Teekay Corporation (NYSE: TK) 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, 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. Teekay Tankers 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”. /T/ TEEKAY TANKERS LTD. SUMMARY CONSOLIDATED STATEMENTS OF INCOME AND LOSS(1) (in thousands of U.S. dollars, except share data) ————————————————————————— Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2009 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) ———— ———- ———- ———- ———- VOYAGE REVENUES 21,899 31,005 47,284 87,352 126,120 ————————————————————————— OPERATING EXPENSES Voyage expenses 1,288 514 688 2,382 1,505 Vessel operating expenses 7,677 7,911 8,669 23,977 24,067 Depreciation and amor- tization 6,906 7,230 7,101 21,167 20,638 General and adminis- trative 1,814 1,783 3,423 5,239 7,805 ————————————————————————— 17,685 17,438 19,881 52,765 54,015 ————————————————————————— Income from vessel operations 4,214 13,567 27,403 34,587 72,105 ————————————————————————— OTHER ITEMS Interest expense (1,155) (2,114) (3,750) (5,857) (12,710) Interest income 12 26 68 60 358 Realized and unreal- ized gain (loss) on interest rate swap (2) (4,564) 5,475 (2,060) 2,279 (2,131) Other (expense) income – net (24) (60) (3) (51) (16) ————————————————————————— (5,731) 3,327 (5,745) (3,569) (14,499) ————————————————————————— Net (loss) income (1,517) 16,894 21,658 31,018 57,606 ————————————————————————— ————————————————————————— Earnings (loss) per share (3) – Basic and diluted ($0.05) $0.64 $0.78 $1.05 $2.06 Weighted- average number of Class A common shares out- standing – Basic and diluted 19,500,000 12,961,538 12,500,000 15,012,821 12,500,000 Weighted- average number of Class B common shares out- standing – Basic and diluted 12,500,000 12,500,000 12,500,000 12,500,000 12,500,000 Weighted- average number of total common shares out- standing – Basic and diluted 32,000,000 25,461,538 25,000,000 27,512,821 25,000,000 ————————————————————————— ————————————————————————— (1) Results for three Suezmax tankers, the Ganges Spirit, the Narmada Spirit, and the Ashkini Spirit for the period prior to their acquisition by the Company when they were owned and operating under Teekay Corporation, are referred to as the Dropdown Predecessor. Dropdown Predecessor amounts included in the financial results are summarized for the respective periods in note (4) below. (2) Includes realized losses of $1.3 million, $1.1 million, and $0.7 million, for the three months ended September 30, 2009, June 30, 2009 and September 30, 2008, respectively, and $3.4 million and $1.6 million for the nine months ended September 30, 2009 and 2008, respectively. (3) Earnings (loss) per share is determined by dividing (a) net (loss) income of the Company after deducting the amount of net income attributable to the Dropdown Predecessor by (b) the weighted-average number of shares outstanding during the applicable period. (4) The following table provides a reconciliation of adjusted net (loss) income, a non-GAAP measure, to reported GAAP-based net income (loss) for the respective periods, adjusting for specific items affecting net income (loss) which are typically excluded by securities analysts in their published estimates of the Company’s financial results: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2009 2009 2008 2009 2008 ———— ——- ———— ———— ———— Net (loss) income – GAAP basis (1,517) 16,894 21,658 31,018 57,606 Less: Net income attribut- able to the Drop- down Pre- decessor – (656) (2,098) (2,164) (6,034) Unrealized gain on interest rate swap – (6,572) – (5,656) – Add: Unrealized loss on interest rate swap 3,299 – 1,355 – 356 ————————————————————————— Adjusted net income 1,782 9,666 20,915 23,198 51,928 Adjusted earnings per share $0.05 $0.38 $0.83 $0.84 $2.08 ————————————————————————— ————————————————————————— TEEKAY TANKERS LTD. SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars) ————————————————————————— As at As at As at September 30, June 30, December 31, 2009 2009 2008(1) (unaudited) (unaudited) (audited) ———— ———- ———– ASSETS Cash 13,396 17,575 26,698 Pool receivable from related parties 2,496 6,058 9,113 Other current assets 3,068 2,538 4,645 Due from affiliates 766 7,947 25,341 Vessels and equipment 511,942 511,008 522,796 Other non-current assets 4,246 4,003 4,181 Goodwill 6,761 6,761 6,761 ————————————————————————— Total assets 542,675 555,890 599,535 ————————————————————————— ————————————————————————— LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities 11,049 9,150 9,358 Current portion of long-term debt 3,600 3,600 3,600 Current portion of derivative instruments 3,870 3,607 2,716 Other current liabilities 3,126 3,076 5,389 Due to affiliates 1,462 4,620 2,401 Long-term debt 302,528 303,428 417,539 Other long-term liabilities 13,861 10,763 20,879 Stockholders’ equity 203,179 217,646 137,653 ————————————————————————— Total liabilities and stockholders’ equity 542,675 555,890 599,535 ————————————————————————— ————————————————————————— (1) In accordance with US GAAP, the balance sheet as at December 31, 2008 includes the Dropdown Predecessor for the Ashkini Spirit, which was acquired by the Company on June 24, 2009, to reflect ownership of the vessel from the time it was acquired by Teekay Corporation on August 1, 2007. ————————————————————————— TEEKAY TANKERS LTD. SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of U.S. dollars) ————————————————————————— Nine Months Ended September 30, 2009(1) 2008(1) (unaudited) (unaudited) ———————- Cash and cash equivalents provided by (used for) OPERATING ACTIVITIES ————————————————————————— Net operating cash flow 55,246 43,750 ————————————————————————— FINANCING ACTIVITIES Proceeds of long-term debt – 121,635 Repayments of long-term debt (2,700) (2,700) Prepayments of long-term debt (20,000) (15,000) Proceeds from long-term debt of Dropdown Predecessor – 44,027 Prepayment of long-term debt of Dropdown Predecessor (13,303) (160,445) Prepayment of push-down debt of Dropdown Predecessor (57,000) – Debt issuance costs – (276) Advances from (to) affiliates 7,867 (9,002) Contributed capital 1,411 10,055 Cash dividends paid (45,500) (42,875) Issuance of Class A common shares 68,600 – Share issuance costs (3,064) (1,130) ————————————————————————— Net financing cash flow (63,689) (55,711) ————————————————————————— INVESTING ACTIVITIES Expenditures for vessels and equipment (4,859) (6,005) ————————————————————————— Net investing cash flow (4,859) (6,005) ————————————————————————— Decrease in cash and cash equivalents (13,302) (17,966) Cash and cash equivalents, beginning of the period 26,698 34,839 ————————————————————————— Cash and cash equivalents, end of the period 13,396 16,873 ————————————————————————— ————————————————————————— (1) In accordance with US GAAP, the statement of cash flows include the cash flows relating to the Dropdown Predecessor for the Ashkini Spirit for the period from August 1, 2007 to June 24, 2009, when the vessel was under the common control of Teekay Corporation but prior to its acquisition by the Company. /T/ TEEKAY TANKERS LTD. APPENDIX A – CASH DIVIDEND CALCULATION (in thousands of U.S. dollars) Cash Available for Distribution 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 (loss) plus depreciation and amortization, unrealized losses from derivatives, non-cash items and any write-offs or other non-recurring items, less net income attributable to the Dropdown Predecessor, and unrealized gains from derivatives. /T/ Three Months Ended September 30, 2009 (unaudited) ————————————————————————— Net loss (1,517) Add: Depreciation and amortization 6,906 Unrealized loss from interest rate swap 3,299 Less: Amortization of debt issuance costs and other (96) ————————————————————————— Cash Available for Distribution 8,592 Less: Reserve for scheduled drydockings and other capital (2,750) expenditures Reserve for debt principal repayment (900) ————————————————————————— Cash dividend 4,942 Total common shares outstanding as at September 30, 2009 32,000,000 ————————————————————————— Cash dividend per share (rounded) $0.15 ————————————————————————— /T/ 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; potential newbuilding order cancellations or delivery delays in the tanker industry generally; the Company’s compliance with debt covenants; the estimated dividends per share for the quarter ending December 31, 2009 based on various spot tanker rates; the Company’s mix of spot market and time-charter trading; the Company’s ability to generate surplus cash flow and pay dividends; the impact of vessel drydock activities on the Company’s future Cash Available for Distribution, including the fourth quarter of 2009; and the potential for Teekay Tankers to acquire additional vessels from third parties or Teekay Corporation, including an existing Suezmax tanker which the Company has the option to acquire prior to June 19, 2010. 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 the production of or demand for oil; 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; the potential for early termination of short- or medium-term contracts and inability of the Company to renew or replace short- or medium-term contracts; changes in interest rates and the capital markets; increases in the Company’s expenses, including any drydocking expenses and associated offhire days; the Company’s ability to raise financing to purchase additional vessels; the ability of Teekay Tankers’ board of directors to establish cash reserves for the prudent conduct of Teekay Tankers’ business or otherwise; and other factors discussed in Teekay Tankers’ filings from time to time with the United States Securities and Exchange Commission, 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.