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Teekay Tankers Ltd. Reports Third Quarter Results

Teekay Tankers Ltd. Reports Third Quarter Results 
HAMILTON, BERMUDA -- (Marketwired) -- 11/07/13 --  
Highlights 


 
--  Declared a cash dividend of $0.03 per share for the quarter ended
    September 30, 2013. 
--  Reported third quarter 2013 adjusted net loss attributable to
    shareholders of Teekay Tankers(1) of $4.0 million, or $0.05 per share
    (excluding specific items which increased GAAP net loss by $10.6
    million, or $0.12 per share, of which includes a $10.4 million loss
    provision on the Company's investment in term loans). 
--  Extended time-charter out contract of one Aframax tanker at above
    current spot market rates, maintaining strong fixed-rate charter
    coverage of approximately 40 percent over the next 12 months. 
--  Total liquidity of $226.1 million with no significant debt maturities
    until 2017. 

 
Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE:TNK) today
reported an adjusted net loss attributable to shareholders of Teekay
Tankers(1) (as detailed in Appendix A to this release) of $4.0
million, or $0.05 per share, for the quarter ended September 30,
2013, compared to adjusted net loss attributable to shareholders of
Teekay Tankers of $7.7 million, or $0.09 per share, for the same
period in the prior year. The decrease in adjusted net loss
attributable to shareholders of Teekay Tankers is primarily due to a
decrease in depreciation expense as a result of vessel impairments
recorded in the fourth quarter of 2012 and stronger Aframax spot
rates in the third quarter of 2013 compared to the same period of the
prior year, partially offset by the change in employment of certain
of the Company's vessels from fixed rates to lower spot rates on
expiry of their fixed-rate charters, lower average realized spot
tanker rates for Suezmax and LR2 vessels and a reduction in interest
income earned from the Company's investment in term loans. Adjusted
net loss attributable to shareholders of Teekay Tankers excludes a
number of specific items that had the net effect of increasing net
loss attributable to shareholders of Teekay Tankers by $10.6 million,
or $0.12 per share, and $2.0 million, or $0.03 per share, for the
three month periods ended September 30, 2013 and September 30, 2012,
respectively, as detailed in Appendix A to this release. Including
these items, the Company reported, on a GAAP basis, a net loss
attributable to shareholders of Teekay Tankers of $14.6 million, or
$0.17 per share, for the quarter ended September 30, 2013, compared
to a net loss attributable to shareholders of Teekay Tankers of $9.7
million, or $0.12 per share, for the quarter ended September 30,
2012. Net revenues(2) were $39.0 million and $43.9 million for the
quarters ended September 30, 2013 and September 30, 2012,
respectively. 
"Relatively stronger spot tanker earnings and lower vessel operating
expenses resulted in higher cash flows for Teekay Tankers in the
third quarter compared to the second quarter," commented Bruce Chan,
Teekay Tankers' Chief Executive Officer. "During this period of spot
tanker market weakness, we continue to focus on the strong fixed-rate
coverage of our fleet as demonstrated by our previously announced
one-year Aframax time-charter out extension at a rate of $15,150 per
day. This contract extension preserves our forecasted fixed-rate
coverage at approximately 40 percent for the next 12 months and 35
percent for fiscal 2014." 
Mr. Chan continued, "Due to our fixed-rate charter coverage,
available liquidity of approximately $226 million as at September 30,
2013 and no significant debt maturities until 2017, we believe Teekay
Tankers is financially stable and well-positioned to benefit from a
tanker market recovery. In addition, with Teekay Tankers' transition
to a fixed dividend policy in the first quarter of this year, an
increasing portion of our future operating cash flow will be retained
as the tanker market recovers, positioning the Company for future
growth." 


 
(1) Adjusted net loss attributable to shareholders of Teekay Tankers 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 for information     
    about specific items affecting net loss that are typically excluded by  
    securities analysts in their published estimates of the Company's       
    financial results.                                                      
(2) Net revenues is a non-GAAP financial measure used by certain investors  
    to measure the financial performance of shipping companies. Please refer
    to Appendix C included in this release for a reconciliation of this non-
    GAAP measure to the most directly comparable financial measure under    
    GAAP.                                                                   

 
For the nine months ended September 30, 2013, the Company reported an
adjusted net loss attributable to shareholders of Teekay Tankers of
$13.9 million, or $0.17 per share, compared to adjusted net loss
attributed to the shareholders of Teekay Tankers of $3.7 million, or
$0.05 per share, for the same period in the prior year. The increase
in adjusted net loss attributable to shareholders of Teekay Tankers
is primarily due to the change in employment of certain of the
Company's vessels from fixed rates to lower spot rates on expiry of
their fixed-rate charters, lower average spot realized tanker rates
for the first nine months of 2013 compared to the same period in the
prior year and a reduction in interest income earned from the
Company's investment in term loans, partially offset by a decrease in
depreciation expense as a result of vessel impairments recorded in
the fourth quarter of 2012. Adjusted net loss attributable to
shareholders of Teekay Tankers excludes a number of specific items
that had the net effect of increasing net loss attributable to
shareholders of Teekay Tankers by $8.4 million, or $0.1 per share,
and $0.8 million or $0.01 per share, for the nine month periods ended
September 30, 2013 and September 30, 2012, respectively, as detailed
in Appendix A to this release. Including these items, the Company
reported, on a GAAP basis, a net loss attributable to shareholders of
Teekay Tankers of $22.3 million, or $0.27 per share, for the nine
months ended September 30, 2013, compared to a net loss attributable
to shareholders of Teekay Tankers of $4.4 million, or $0.06 per
share, for the nine months ended September 30, 2012. Net revenues(2)
were $122.1 million and $148.3 million for the nine months ended
September 30, 2013 and September 30, 2012, respectively. 
The Company's financial statements for prior periods include the
historical results of the 13 vessels acquired by the Company from
Teekay Corporation in June 2012, referred to herein as the Dropdown
Predecessor, for the periods when these vessels were owned and
operated by Teekay Corporation, which includes all of 2012. 
During the third quarter of 2013, the Company generated $8.7 million,
or $0.10 per share, of Cash Available for Distribution(3), compared
to $5.6 million, or $0.07 per share, in the second quarter of 2013.
On October 4, 2013, Teekay Tankers declared its fixed dividend of
$0.03 per share for the third quarter of 2013, which was paid on
October 25, 2013 to all shareholders of record on October 16, 2013.
Since the Company's initial public offering in December 2007, it has
declared dividends in 24 consecutive quarters, which now totals
$7.275 per share on a cumulative basis. 


 
(1) Adjusted net loss attributable to shareholders of Teekay Tankers 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 for information     
    about specific items affecting net loss that are typically excluded by  
    securities analysts in their published estimates of the Company's       
    financial results.                                                      
(2) Net revenues is a non-GAAP financial measure used by certain investors  
    to measure the financial performance of shipping companies. Please refer
    to Appendix C included in this release for a reconciliation of this non-
    GAAP measure to the most directly comparable financial measure under    
    GAAP.                                                                   
(3) Cash Available for Distribution represents net 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, for the period 
    when these vessels were owned and operated by Teekay Corporation. Please
    refer to Appendix B to this release for a reconciliation of Cash        
    Available for Distribution (a non-GAAP measure) as used in this release 
    to the most directly comparable GAAP financial measure.                 

 
Summary of Recent Events 
First Priority VLCC Mortgage Loans 
In the third quarter of 2013, the Company recorded a $10.4 million
loss provision on its investment in term loans secured by two
2010-built Very Large Crude Carrier (VLCC) vessels. This provision
reflects the estimated loss that could be incurred based on the
Company's current estimates of the amounts recoverable based on the
two VLCC vessels' future operating cash flows and the net proceeds
from their eventual sale. The actual amount recoverable from the
Company's investment in the term loans may vary from the Company's
current estimates depending on various factors, including the
vessels' actual future operating cash flows and actual net proceeds
realized from the sale of the vessels.  
Currently, one of the vessels is trading in the spot tanker market
under Teekay Tankers' management while the other vessel remains under
detention by the authorities in Egypt. The insurers of this vessel
are currently in negotiations with the authorities in Egypt to
expedite its release. Once the vessel is released, it is expected
that it will commence trading in the spot tanker market under Teekay
Tankers' management.  
Long Range 2 (LR2) Product Tanker Newbuilding Orders  
In October 2013, Teekay Tankers exercised options with STX Offshore &
Shipbuilding Co., Ltd. (STX) of South Korea to order four
fuel-efficient 113,000 dead-weight tonne LR2 product tankers, in
addition to the four tankers it ordered from STX in April 2013. The
payment of the first shipyard installments on these recent four
additional vessels by Teekay Tankers to STX is contingent on the
Company receiving acceptable refund guarantees from the shipyard for
vessel installment payments. To date, Teekay Tankers has not made any
installment payments to the yard for any of the eight LR2 product
tanker newbuildings ordered in April and October 2013. Prior to
receiving the refund guarantees, Teekay Tankers has the right to
cancel the newbuilding orders at its discretion. STX has been unable
to secure the refund guarantees; therefore, Teekay Tankers is
evaluating its alternatives, including legal action for damages. 
Fixed Rate Time-Charter Coverage 
In July 2013, Teekay Tankers extended a time-charter out contract for
the Aframax tanker, Kanata Spirit, for 12 months at a rate of $15,150
per day.  
Tanker Market 
Crude tanker spot rates in the third quarter of 2013 improved
slightly from the second quarter of 2013, and remain at comparatively
low levels on a historical basis. Suezmax rates decreased as supply
disruptions in Libya and Iraq reduced available cargos, and continued
increases in U.S. crude production reduced crude movements from West
Africa to the U.S. In the Aframax sector, rates increased in the
first half of the third quarter as a result of stronger summer oil
demand and increased demand for lightering in the U.S. Gulf. Aframax
rates decreased later in the third quarter as European refineries
began scheduled fall maintenance, and higher oil prices weakened
European refining margins and prompted less refinery throughput. LR2
product tanker rates were supported in the latter part of the third
quarter of 2013 by an increase in East-to-West gasoil movements due
to attractive arbitrage opportunities. 
The world tanker fleet increased by 10.5 million deadweight tonnes
(mdwt), or approximately 2.1 percent, through the first nine months
of 2013, compared to growth of 14.6 million mdwt, or approximately
3.1 percent, for the same period of 2012. There are currently 50.7
mdwt of tankers on order, or approximately 10 percent of the existing
fleet. The tanker orderbook has been reducing since peaking at 190
mdwt, or approximately 49 percent of the fleet, in September 2008. As
a result of the smaller orderbook, the global fleet is expected to
grow by only 2.5 percent in 2013 and 1.0 percent in 2014, net of
removals, which is the smallest fleet growth rate since 2002.  
The pace of new tanker ordering has increased in 2013, with a total
of 16.7 mdwt ordered through the first nine months of 2013, compared
to 8.5 mdwt ordered in the same period of 2012. However, the pace of
ordering remains low compared to the historical annual average 35.9
mdwt from 2000 to 2012. A majority of the orders this year have been
for Medium-Range (MR) and LR2 product tankers.  
The International Monetary Fund (IMF) lowered its GDP growth forecast
in 2013 and 2014 to 2.9 percent and 3.6 percent, respectively, which
is a decrease of 0.2 percent from its previous forecasts. Oil demand
growth in 2013 is forecasted to increase moderately by 0.9 million
barrels per day (mb/d) based on the average of the forecasts of the
International Energy Agency (IEA), the Energy Information
Administration (EIA), and OPEC. The outlook is slightly more positive
for 2014, with oil demand growth forecasted to grow by 1.1 mb/d.
However, the call on OPEC is expected to decline by 0.6 mb/d in 2014,
as non-OPEC oil supply growth, led by the U.S., is forecasted to
outpace demand growth, which could dampen demand for large crude oil
tankers. 
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 related-party pool management fees, related-party commissions
and off-hire bunker expenses:  


 
----------------------------------------------------------------------------
                                              Three Months Ended            
                                 September 30,                 September 30,
                                          2013  June 30, 2013           2012
----------------------------------------------------------------------------
Time-Charter Out Fleet                                                      
Suezmax revenue days                       134            182            366
Suezmax TCE per revenue day(i)     $    20,448    $    20,228    $    20,954
Aframax revenue days                       825            877            717
Aframax TCE per revenue day (i)    $    17,542    $    17,094    $    18,255
MR revenue days                             92            114            270
MR TCE per revenue day(ii)         $    35,633    $    33,425    $    25,960
                                                                            
Spot Fleet                                                                  
Suezmax revenue days                       716            728            487
Suezmax spot TCE per revenue day   $    13,799    $    12,150    $    14,081
Aframax revenue days                       284            267            414
Aframax spot TCE per revenue day                                            
 (iii)                             $    13,583    $    12,406    $    11,688
LR2 revenue days                           275            273            276
LR2 spot TCE per revenue day       $    12,488    $    12,795    $    12,601
MR revenue days                            184            159              -
MR spot TCE per revenue day(iv)    $    15,067    $    13,905              -
                                                                            
----------------------------------------------------------------------------
Total Fleet                                                                 
                                                                            
Suezmax revenue days                       850            910            853
Suezmax TCE per revenue day(i)     $    14,845    $    13,766    $    17,031
Aframax revenue days                     1,109          1,144          1,131
Aframax TCE per revenue day(i)     $    16,528    $    16,001    $    15,851
LR2 revenue days                           275            273            276
LR2 TCE per revenue day            $    12,488    $    12,795    $    12,601
MR revenue days                            276            273            270
MR TCE per revenue day(ii)         $    21,923    $    24,665    $    25,960
                                                                            
----------------------------------------------------------------------------
(i)   Excludes profit share amounts relating to certain vessels which are   
      employed on fixed-rate time-charter contracts that include a profit-  
      sharing component.                                                    
(ii)  The charter rate on one of the MR tankers includes approximately      
      $14,000 per day for the additional costs relating to Australian crew  
      versus international crew.                                            
(iii) The combined average spot TCE rate for the Aframax tankers trading in 
      the Aframax Pool and non-pool voyage charters was $12,139 per day for 
      the three months ended June 30, 2013. No Aframax tankers in the       
      Company's fleet were traded in the non-pool voyage charters for the   
      three months ended September 30, 2013.                                
(iv)  The combined average spot TCE rate for the MR tankers trading in the  
      NOrient Pool and non-pool voyage charters was $10,113 per day for the 
      three months ended June 30, 2013. No MR tankers in the Company's fleet
      were traded in the non-pool voyage charters for the three months ended
      September 30, 2013.                                                   

 
Teekay Tankers' Fleet 
The following table summarizes the Company's fleet as of November 1,
2013: 


 
----------------------------------------------------------------------------
                                                   Chartered-in             
                                 Owned Vessels          Vessels        Total
----------------------------------------------------------------------------
Fixed-rate:                                                                 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Suezmax Tankers                              2                -            2
Aframax Tankers                              9                -            9
MR Product Tankers                           1                -            1
VLCC Tankers(i)                              1                -            1
----------------------------------------------------------------------------
Total Fixed-Rate Fleet                      13                -           13
----------------------------------------------------------------------------
Spot-rate:                                                                  
----------------------------------------------------------------------------
Suezmax Tankers                              8                -            8
Aframax Tankers(ii)                          2                1            3
LR2 Product Tankers                          3                -            3
MR Product Tankers                           2                -            2
----------------------------------------------------------------------------
Total Spot Fleet                            15                1           16
----------------------------------------------------------------------------
Total Teekay Tankers Fleet                  28                1           29
----------------------------------------------------------------------------
(i)  The Company's ownership interest in this vessel is 50 percent.         
(ii) The Aframax tanker BM Breeze is currently time-chartered in for a 12-  
     month period ending in January 2014 with an option to extend for an    
     additional year.                                                       

 
Teekay Tankers owns a 50 percent interest in a 2013-built VLCC
through a joint venture with Wah Kwong Maritime Transport Holdings
Limited (the High Q Joint Venture), which the Company entered into in
October 2010. The newbuilding VLCC delivered in mid-June 2013 and
commenced a time-charter out contract to a major Chinese shipping
company for a period of five years. The time-charter includes a fixed
floor rate, coupled with a profit-sharing component. 
Liquidity 
As of September 30, 2013, the Company had total liquidity of $226.1
million (which consisted of $29.2 million of cash and $196.9 million
in an undrawn revolving credit facility), compared to total liquidity
of $255.5 million as at June 30, 2013.  
Conference Call 
The Company plans to host a conference call on Thursday, November 7,
2013 at 1:00 p.m. (ET) to discuss its results for the third quarter
of 2013. An accompanying investor presentation will be available on
Teekay Tankers' website at www.teekaytankers.com prior to the start
of the call. All shareholders and interested parties are invited to
listen to the live conference call by choosing from the following
options: 


 
--  By dialing (800) 711-9538 or (416) 640-5925, if outside of North
    America, and quoting conference ID code 7931910. 
--  By accessing the webcast, which will be available on Teekay Tankers'
    website at www.teekaytankers.com (the archive will remain on the website
    for a period of 30 days). 

 
The conference call will be recorded and available until Thursday,
November 14, 2013. This recording can be accessed following the live
call by dialing (888) 203-1112 or (647) 436-0148, if outside North
America, and entering access code 7931910. 
About Teekay Tankers 
Teekay Tankers currently owns a fleet of 27 double-hull vessels,
including 11 Aframax tankers, 10 Suezmax tankers, three Long Range 2
(LR2) product tankers, three Medium-Range (MR) product tankers and
has one time-chartered in Aframax tanker, all of which vessels an
affiliate of Teekay Corporation (NYSE: TK) manages through a mix of
short- or medium-term fixed-rate time-charter contracts and spot
tanker market trading. The Company also owns a Very Large Crude
Carrier (VLCC) through a 50 percent-owned joint venture. Teekay
Tankers was formed in December 2007 by Teekay Corporation as part of
its strategy to expand its conventional oil tanker business.  
Teekay Tankers' common stock trades on the New York Stock Exchange
under the symbol "TNK." 


 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                            TEEKAY TANKERS LTD.                             
                   SUMMARY CONSOLIDATED STATEMENTS OF LOSS                  
              (in thousands of U.S. dollars, except share data)             
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                         Three Months Ended            Nine Months Ended    
                ------------------------------------------------------------
                                         September,              September, 
                 September,                      30  September,          30 
                         30    June, 30        2012          30        2012 
                       2013        2013 (unaudited)        2013 (unaudited) 
                (unaudited) (unaudited)         (1) (unaudited)         (1) 
                ------------------------------------------------------------
                                                                            
Time-charter                                                                
 revenues            20,600      22,710      28,356      67,488      96,025 
Net pool                                                                    
 revenues            18,879      15,493      14,638      50,470      47,087 
Voyage charter                                                              
 revenue                  -       2,433         210       4,283         210 
Interest income                                                             
 from investment                                                            
in term loans             -       2,856       2,880       5,683       8,614 
----------------------------------------------------------------------------
Total revenues       39,479      43,492      46,084     127,924     151,936 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
OPERATING                                                                   
 EXPENSES                                                                   
Voyage expenses         483       2,449       2,172       5,845       3,601 
Vessel operating                                                            
 expenses(2)         21,859      24,832      24,921      69,745      71,145 
Time-charter                                                                
 hire expense         1,216       1,951         804       5,153       3,109 
Depreciation and                                                            
 amortization        11,935      11,921      17,896      35,720      53,934 
General and                                                                 
 administrative                                                             
 (2)                  3,317       3,362       1,935      10,240       5,594 
Loss provision                                                              
 on investment                                                              
 in                                                                         
term loans(3)        10,399       4,511           -      14,910           - 
Net loss on sale                                                            
 of vessel                -           -           -          71           - 
----------------------------------------------------------------------------
                     49,209      49,026      47,728     141,684     137,383 
                ------------------------------------------------------------
(Loss) income                                                               
 from operations     (9,730)     (5,534)     (1,644)    (13,760)     14,553 
                ------------------------------------------------------------
                ------------------------------------------------------------
                                                                            
OTHER ITEMS                                                                 
Interest expense     (2,440)     (2,604)     (2,954)     (7,555)    (17,169)
Interest income          71          20          15          95          36 
Realized and                                                                
 unrealized                                                                 
 (loss) gain                                                                
on derivative                                                               
 instruments(4)      (2,492)      2,748      (4,252)       (510)     (9,226)
Equity income                                                               
 (loss) from                                                                
 joint venture          458        (168)          -         290         (63)
Other expenses         (458)       (186)       (826)       (828)     (1,743)
----------------------------------------------------------------------------
                     (4,861)       (190)     (8,017)     (8,508)    (28,165)
----------------------------------------------------------------------------
Net loss            (14,591)     (5,724)     (9,661)    (22,268)    (13,612)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Loss per share                                                              
 attributable to                                                            
 shareholders of                                                            
 Teekay Tankers                                                             
 (5)                                                                        
- Basic and                                                                 
 diluted              (0.17)      (0.07)      (0.12)     ($0.27)     ($0.06)
Weighted-average                                                            
 number of Class                                                            
 A                                                                          
common shares                                                               
 outstanding                                                                
- Basic and                                                                 
 diluted         71,091,030  71,091,030  71,091,030  71,091,030  65,659,449 
Weighted-average                                                            
 number of Class                                                            
 B                                                                          
common shares                                                               
 outstanding                                                                
- 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                                                               
 outstanding     83,591,030  83,591,030  83,591,030  83,591,030  78,159,449 
                                                                            
----------------------------------------------------------------------------
                                                                            
(1) The Company acquired 13 vessels from Teekay Corporation in June 2012.   
    Results for the 13 conventional tankers for the periods 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 Appendix A.                    
(2) In order to more closely align the Company's presentation to many of its
    peers, the cost of ship management activities of $1.4 million and $4.2  
    million for the three and nine months ended September 30, 2013,         
    respectively, and $1.4 million for the three months ended June 30, 2013 
    have been presented in vessel operating expenses. Prior to 2013, the    
    Company included these amounts in general and administrative expenses.  
    All such costs incurred in comparative periods have been reclassified   
    from general and administrative expenses to vessel operating expenses to
    conform to the presentation adopted in the current period. The amounts  
    reclassified were $1.4 million and $5.5 million for the three and nine  
    months ended September 30, 2012, respectively.                          
(3) A loss provision on the Company's investment in term loans of $10.4     
    million and $14.9 million has been recorded for the three and nine      
    months ended September 30, 2013, respectively. The provision represents 
    the amount the Company estimates will not be recovered, including       
    accrued interest to September 30, 2013, from realizing on its collateral
    for the loans.                                                          
(4) Includes realized losses relating to interest rate swaps of $2.5        
    million, $2.5 million, and $2.4 million for the three months ended      
    September 30, 2013, June 30, 2013 and September 30, 2012, respectively, 
    and $7.4 million and $7.1 million for the nine months ended September   
    30, 2013, and September 30, 2012, respectively.                         
(5) Loss per share attributable to shareholders of Teekay Tankers is        
    determined by dividing (a) net loss of the Company after adjusting for  
    the amount of net loss attributable to the Dropdown Predecessor by (b)  
    the weighted-average number of shares outstanding during the applicable 
    period.                                                                 
 

 
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----------------------------------------------------------------------------
                            TEEKAY TANKERS LTD.                             
                     SUMMARY CONSOLIDATED BALANCE SHEETS                    
                        (in thousands of U.S. dollars)                      
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   As at           As at               As at
                      September 30, 2013   June 30, 2013   December 31, 2012
                             (unaudited)     (unaudited)         (unaudited)
                      ------------------------------------------------------
ASSETS                                                                      
Cash                              29,168          37,708              26,341
Pool receivable from                                                        
 related parties                   7,962           7,481               9,101
Accounts receivable                8,233           7,633               4,523
Interest receivable                    -               -                   -
Vessel held for sale                   -               -               9,114
Prepaid assets                    12,630           8,077               9,714
Investment in term                                                          
 loans                           114,096         122,841             119,385
Due from affiliates               26,791          20,981              24,787
Vessels and equipment            861,377         867,035             885,992
Loan to joint venture              9,830           9,830               9,830
Investment in joint                                                         
 venture                           7,802           7,289               3,457
Other non-current                                                           
 assets                            5,164           2,958               3,412
----------------------------------------------------------------------------
Total assets                   1,083,053       1,091,833           1,105,656
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND EQUITY                                                      
Accounts payable and                                                        
 accrued liabilities              19,683          16,641              21,228
Current portion of                                                          
 long-term debt                   25,246          25,246              25,246
Current portion of                                                          
 derivative                                                                 
 instruments                       6,219           7,184               7,200
Deferred revenue                   1,090           1,302               4,564
Due to affiliates                 11,430          22,375               3,592
Long-term debt                   720,921         704,968             710,455
Other long-term                                                             
 liabilities                      25,792          24,442              31,188
Equity                           272,672         289,675             302,183
----------------------------------------------------------------------------
Total liabilities and                                                       
 equity                        1,083,053       1,091,833           1,105,656
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
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                            TEEKAY TANKERS LTD.                             
                SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS               
                        (in thousands of U.S. dollars)                      
----------------------------------------------------------------------------
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                                                  Nine Months Ended         
                                          ----------------------------------
                                             September 30,    September 30, 
                                                      2013             2012 
                                               (unaudited)   (unaudited)(1) 
                                          ---------------- -----------------
Cash and cash equivalents provided by                                       
 (used for)                                                                 
                                                                            
OPERATING ACTIVITIES                                                        
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Net operating cash flow                                320           21,570 
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FINANCING ACTIVITIES                                                        
Proceeds from long-term debt                        53,181           15,000 
Repayments of long-term debt                       (17,715)          (4,855)
Prepayment of long-term debt                       (25,000)         (55,000)
Proceeds from long-term debt of Dropdown                                    
 Predecessor                                             -            2,312 
Repayment from long-term debt of Dropdown                                   
 Predecessor                                             -          (10,372)
Prepayment from long-term debt of Dropdown                                  
 Predecessor                                             -          (15,000)
Acquisition of 13 vessels from Teekay                                       
 Corporation                                             -           (2,306)
Net advances from affiliates                             -           16,913 
Contribution of capital from Teekay                                         
 Corporation                                             -            9,467 
Proceeds from issuance of Class A common                                    
 stock                                                   -           69,000 
Share issuance costs                                     -           (3,229)
Cash dividends paid                                 (7,522)         (30,559)
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Net financing cash flow                              2,944           (8,629)
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INVESTING ACTIVITIES                                                        
Proceeds from sale of vessel and equipment           9,119                - 
Expenditures for vessels and equipment              (1,489)          (2,099)
Investment in joint venture                         (4,000)          (3,110)
Investment in term loans                            (4,067)               - 
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Net investing cash flow                               (437)          (5,209)
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Increase in cash and cash equivalents                2,827            7,732 
Cash and cash equivalents, beginning of                                     
 the period                                         26,341           18,566 
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Cash and cash equivalents, end of the                                       
 period                                             29,168           26,298 
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(1) In accordance with GAAP, the statements of cash flows for the nine-month
    period ended September 30, 2012, include the Dropdown Predecessor       
    amounts for the 13 conventional tankers acquired by the Company from    
    Teekay Corporation in June 2012 to reflect ownership of the vessels from
    the time they were owned and operated by Teekay Corporation.            
                                                                            
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                            TEEKAY TANKERS LTD.                             
               APPENDIX A - SPECIFIC ITEMS AFFECTING NET LOSS               
          (in thousands of U.S. dollars, except per share amounts)          
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Set forth below is a reconciliation of the Company's unaudited
adjusted net loss attributable to the shareholders of Teekay Tankers,
a non-GAAP financial measure, to net loss as determined in accordance
with GAAP. The Company believes that, in addition to conventional
measures prepared in accordance with GAAP, certain investors use this
information to evaluate the Company's financial performance. The
items below are also typically excluded by securities analysts in
their published estimates of the Company's financial results.
Adjusted net loss attributable to the shareholders of Teekay Tankers
is intended to provide additional information and should not be
considered a substitute for measures of performance prepared in
accordance with GAAP. 


 
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                                            Three Months Ended              
                              ----------------------------------------------
                                September 30, 2013     September 30, 2012   
                                    (unaudited)            (unaudited)      
                              ---------------------- -----------------------
                                      $  $ Per Share         $  $ Per Share 
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Net loss - GAAP basis           (14,591)   $   (0.17)   (9,661)   $   (0.12)
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Net loss attributable to                                                    
 shareholders of Teekay                                                     
 Tankers                        (14,591)   $   (0.17)   (9,661)   $   (0.12)
Add specific items affecting                                                
 net income:                                                                
  Unrealized loss on interest                                               
   rate swaps (1)                    30    $    0.00     1,896    $    0.03 
  Loss provision on investment                                              
   in term loans (2)             10,399    $    0.12         -            - 
  Other (3)                         131            -        90            - 
                              ----------------------------------------------
Total adjustments                10,560    $    0.12     1,986    $    0.03 
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Adjusted net loss attributable                                              
 to shareholders of Teekay                                                  
 Tankers                         (4,031)   $   (0.05)   (7,675)   $   (0.09)
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                                            Nine Months Ended               
                              ----------------------------------------------
                                September 30, 2013     September 30, 2012   
                                    (unaudited)            (unaudited)      
                              ---------------------- -----------------------
                                      $  $ Per Share         $  $ Per Share 
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Net loss - GAAP basis           (22,268)   $   (0.27)  (13,612)   $   (0.17)
Add:                                                                        
Net loss attributable to the                                                
 Dropdown Predecessor                 -            -     9,163    $    0.11 
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Net loss attributable to                                                    
 shareholders of Teekay                                                     
 Tankers                        (22,268)   $   (0.27)   (4,449)   $   (0.06)
(Subtract) add specific items                                               
 affecting net income:                                                      
  Unrealized gain on interest                                               
   rate swaps (1)                (6,876)   $   (0.08)      (75)   $   (0.00)
  Loss provision on investment                                              
   in term loans (2)             14,910    $    0.18         -            - 
  Loss on vessel sale                71            -         -            - 
  Other (3)                         271            -       840    $    0.01 
                              ----------------------------------------------
Total adjustments                 8,376    $    0.10       765    $    0.01 
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Adjusted net loss attributable                                              
 to shareholders of Teekay                                                  
 Tankers                        (13,892)   $   (0.17)   (3,684)   $   (0.05)
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(1) Reflects the unrealized gain or loss due to changes in the mark-to-     
    market value of derivative instruments that are not designated as hedges
    for accounting purposes.                                                
(2) Loss provision on investment in term loans has been recorded for the    
    three and nine months ended September 30, 2013. The amounts represent   
    what the Company estimates will not be recoverable, including accrued   
    interest from realizing on its collateral.                              
(3) The amount recorded for the three and nine months ended September 30,   
    2013, relates to the 50-percent portion of an unrealized derivative     
    instrument loss recorded by the High Q Joint Venture, which owns the    
    VLCC newbuilding that delivered in June 2013. The amount for the nine   
    months September 30, 2012 relates to the transaction costs related to   
    the acquisition costs of the 13 conventional tankers in June 2012.      
                                                                            
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                             TEEKAY TANKERS LTD.                            
          APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE         
                       CASH AVAILABLE FOR DISTRIBUTION                      
       (in thousands of U.S. dollars, except share and per share data)      
----------------------------------------------------------------------------
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Description of Non-GAAP Financial Measure - Cash Available for
Distribution  
Cash Available for Distribution represents net 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 any net income attributable to
the historical results of vessels acquired by the Company from Teekay
Corporation for the period when these vessels were owned and operated
by Teekay Corporation.  


 
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                                                         Three Months Ended 
                                                         September 30, 2013 
                                                                (unaudited) 
----------------------------------------------------------------------------
                                                                            
Net loss for the period                                             (14,591)
                                                                            
Add:                                                                        
  Depreciation and amortization                                      11,935 
  Loss provision on investment in term loans                         10,399 
  Unrealized loss on interest rate swaps                                 30 
  Proportionate share of cash available for distribution              1,113 
   from joint venture                                                       
  Other                                                                 303 
Less:                                                                       
  Equity income from joint venture                                     (458)
                                                                            
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Cash Available for Distribution                                       8,731 
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Weighted average number of common shares outstanding for         83,591,030 
 the quarter ended                                                          
                                                                            
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Cash Available for Distribution per share (rounded)                   $0.10 
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                             TEEKAY TANKERS LTD.                            
          APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE         
                                NET REVENUES                                
                       (in thousands of U.S. dollars)                       
----------------------------------------------------------------------------
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Description of Non-GAAP Financial Measure - Net Revenues 
Net revenues represents revenues less voyage expenses where voyage
expenses is comprised of all expenses relating to certain voyages,
including bunker fuel expenses, port fees, canal tolls and brokerage
commissions. Net revenues is a non-GAAP financial measure used by
certain investors to measure the financial performance of shipping
companies; however, it is not required by GAAP and should not be
considered as an alternative to revenues or any other indicator of
the Company's performance required by GAAP. 


 
                         Three Months Ended            Nine Months Ended    
                ------------------------------------------------------------
                  September               September   September   September 
                        30,    June 30,         30,         30,         30, 
                       2013        2013        2012        2013        2012 
                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 
----------------------------------------------------------------------------
Revenues             39,479      43,492      46,084     127,924     151,936 
Voyage expenses        (483)     (2,449)     (2,172)     (5,845)     (3,601)
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Net revenues         38,996      41,043      43,912     122,079     148,335 
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                         FORWARD LOOKING STATEMENTS                         
----------------------------------------------------------------------------
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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 crude oil
and refined product tanker market fundamentals, including the balance
of supply and demand in the tanker market, spot tanker rates and the
potential for a tanker market recovery; the Company's financial
stability and ability to benefit from a tanker market recovery; the
Company's ability to take advantage of growth opportunities in a
future tanker market recovery; the Company's fixed coverage for the
12 months commencing October 1, 2013; the timing and certainty of the
Company receiving refund guarantees from STX for the eight LR2
newbuildings orders placed in April and October 2013 and the
potential for Teekay Tankers to amend the contract terms or cancel
these vessel orders prior to receiving refund guarantees and pursue
alternatives, including legal action; the amount recoverable from the
Company's investments in loans secured by two 2010-built VLCCs and
the timing and certainty for the potential sale of these vessels; the
timing and certainty of the insurer of one of the VLCCs successfully
negotiating with the Egyptian authorities for the release of this
vessel; and the Company's ability to retain operating cash flow for
investment in future growth.  
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; lower than expected levels of tanker
scrapping; 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; failure of STX to provide a refund guarantee for the eight
newbuilding LR2 product tankers ordered by the Company in April 2013
and October 2013; the nature and extent of any amendments to the
contract with STX required to secure the refund guarantees; failure
by the insurers of one of the VLCC vessels securing the Company's
mortgage loan investment to negotiate the timely release of this
vessel from Egypt changes in the market value of the VLCCs securing
the Company's investment in term loans; the ability of Teekay Tankers
to obtain access to the VLCC tankers and to operate or sell the VLCC
tankers, and the cash flow and sale proceeds thereof; increases in
the Company's expenses, including any dry docking expenses and
associated off-hire days; the ability of Teekay Tankers' Board of
directors to establish cash reserves for the prudent conduct of
Teekay Tankers' business or otherwise; failure of Teekay Tankers
Board of Directors and its Conflicts Committee to accept future
acquisitions of vessels that may be offered by Teekay Corporation or
third parties; 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, 2012. 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.
Contacts:
Teekay Tankers Ltd. - Investor Relations Enquiries
Kent Alekson
+1 (604) 844-6654
www.teekaytankers.com