Teekay Restated 1 & 2Q 2008 Results

Tuesday, December 02, 2008

Teekay Tankers Ltd. (NYSE: TNK) 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 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."

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.

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.

(www.teekaytankers.com)

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