Teekay Tankers Ltd. Reports Fourth Quarter and Annual Results

Teekay Tankers Ltd. Reports  Fourth Quarter and Annual Results 
HAMILTON, BERMUDA -- (Marketwired) -- 02/20/14 --  Highlights 


 
 
--  Declared a cash dividend of $0.03 per share for the quarter ended
    December 31, 2013. 
--  Reported fourth quarter 2013 adjusted net loss attributable to
    shareholders of Teekay Tankers(1) of $2.4 million, or $0.03 per share
    (excluding specific items which increased GAAP net income by $16.5
    million, or $0.20 per share, including a $14.9 million reversal of a
    loss provision previously recorded on the Company's investment in term
    loans). 
--  Based on approximately 65 percent of days booked in the quarter, average
    spot time-charter equivalent, or TCE, rate to date for the first quarter
    of 2014 of approximately $34,300 and $25,300 per day for Teekay Tankers'
    spot Suezmax and Aframax vessels, respectively, compared to $15,200 and
    $13,900 per day for the fourth quarter of 2013. 
--  In January 2014, Teekay Tankers and Teekay Corporation jointly created a
    new tanker company, Tanker Investments Limited, and each invested $25
    million for a combined 20 percent ownership interest; and agreed in
    principle for Teekay Tankers to acquire Teekay Corporation's
    conventional tanker commercial and technical management operations. 
--  In December 2013, the detained VLCC tanker that secures one of Teekay
    Tankers' term loan investments was released from Egypt and is currently
    trading in the spot tanker market. 

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 $2.4
million, or $0.03 per share, for the quarter ended December 31, 2013,
compared to adjusted net loss attributable to shareholders of Teekay
Tankers of $7.8 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 stronger Suezmax
and Aframax spot rates in the fourth quarter of 2013 compared to the
same period of the prior year and a decrease in depreciation expense
as a result of vessel impairments recorded in the fourth quarter of
2012, partially offset by the change in employment of certain of the
Company's vessels from fixed rates to lower spot rates upon expiry of
their fixed-rate charters, lower average realized spot tanker rates
for the Company's LR2 fleet and a reduction in interest income 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 income
attributable to shareholders of Teekay Tankers by $16.5 million, or
$0.20 per share, for the three months ended December 31, 2013 and
increasing the net loss by $348.8 million, or $4.18 per share, for
the three months ended December 31, 2012, as detailed in Appendix A
to this release. Including these items, the Company reported, on a
GAAP basis, net income attributable to shareholders of Teekay Tankers
of $14.1 million, or $0.17 per share, for the quarter ended December
31, 2013, compared to a net loss attributable to shareholders of
Teekay Tankers of $356.6 million, or a loss of $4.27 per share, for
the quarter ended December 31, 2012. Net revenues(2) were $39.7
million and $44.5 million for the quarters ended December 31, 2013
and December 31, 2012, respectively. 
For the year ended December 31, 2013, the Company reported an
adjusted net loss attributable to shareholders of Teekay Tankers of
$16.3 million, or $0.20 per share, compared to adjusted net loss
attributed to the shareholders of Teekay Tankers of $11.4 million, or
$0.14 per share, for the prior year. The increase in adjusted net
loss attributable to shareholders of Teekay Tankers is primarily due
to a decrease in the Company's net voyage revenues 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 realized spot tanker rates for the year ended 2013 compared
to the prior year and a reduction in interest income from the
Company's investment in term loans. This was partially offset by the
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 decreasing net loss
attributable to shareholders of Teekay Tankers by $8.2 million, or
$0.10 per share, for the year ended December 31, 2013 and increasing
net loss by $349.6 million, or $4.40 per share, for the year ended
December 31, 2012, 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 $8.1 million,
or $0.10 per share, for the year ended December 31, 2013, compared to
a net loss attributable to shareholders of Teekay Tankers of $361.0
million, or $4.54 per share, for the year ended December 31, 2012.
Net revenues(2) were $161.8 million and $192.8 million for the years
ended December 31, 2013 and December 31, 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 the period from
January to June 2012. 
During the fourth quarter of 2013, the Company generated $10.4
million, or $0.12 per share, of Cash Available for Distribution(3),
compared to $8.7 million, or $0.10 per share, in the third quarter of
2013. On January 3, 2014, Teekay Tankers declared its fixed dividend
of $0.03 per share for the fourth quarter of 2013, which was paid on
January 31, 2014 to all shareholders of record on January 17, 2014.
Since the Company's initial public offering in December 2007, it has
declared dividends in 25 consecutive quarters, which now total $7.305
per share on a cumulative basis. 
"Crude tanker rates in December 2013 and January 2014 reached their
highest levels since the third quarter of 2008, mainly as a result of
higher crude oil imports into China, an increase in long-haul crude
oil movements from the Atlantic basin to Asia and seasonal factors,
most of which will be reflected in the financial results for the
first quarter of 2014," commented Bruce Chan, Teekay Tankers' Chief
Executive Officer. "Based on approximately 65 percent of spot
revenues days booked to date in the first quarter of 2014, the
Company has earned an average time-charter equivalent, or TCE, rate
of approximately $34,300 and $25,300 per day for its spot Suezmax and
Aframax vessels, respectively, compared to $15,200 and $13,900 per
day for the fourth quarter of 2013. "While rates have softened
somewhat in recent weeks, we believe stronger oil demand, limited
tanker fleet growth and improving global economic conditions will
continue to support a general firming of average spot tanker rates
starting in 2014." 
Mr. Chan added, "Teekay Tankers' co-investment in Tanker Investments
Limited, or TIL, provides an additional way for Teekay Tankers'
shareholders to benefit from a potential tanker market recovery while
complementing our existing strategy of directly owning and
in-chartering conventional tankers. Teekay Tankers can now either
invest in secondhand tankers or newbuildings directly or seek to
invest further in TIL. In addition, Teekay Tankers' planned
acquisition of Teekay Corporation's conventional tanker commercial
and technical management operations represents the final step in
Teekay Tankers' evolution into a full-service conventional tanker
platform, which we believe will allow us to better serve our
customers and generate greater value for our shareholders."  


 
 
(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 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, 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 
Due to an increase in tanker vessel values, in the fourth quarter of
2013, the Company recognized $2.0 million of interest income and
recorded a $14.9 million reversal of the loss provision on its
investment in term loans secured by two 2010-built Very Large Crude
Carrier (VLCC) vessels. As a result of this reversal, as of December
31, 2013 there is no remaining loan loss provision associated with
the term loans secured by these vessels. The Company expects to
recover the carrying value of the term loans, including the original
loan principal balance, from a combination of the future operating
cash flows of the two VLCC vessels 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
eventual sale of the vessels.  
In December 2013, the previously detained VLCC was released by the
Egyptian authorities. Currently, both VLCC vessels securing the
investment in term loans are trading in the spot tanker market under
Teekay Tankers' management. The Company continues to work closely
with the borrowers and the second priority mortgagees of the vessels
to realize on its security for the loans. 
Investment in Tanker Investments Ltd.  
In January 2014, Teekay Tankers and Teekay Corporation (Teekay)
jointly created Tanker Investments Limited (TIL), which will seek to
opportunistically acquire, operate, and sell modern secondhand
tankers to benefit from an expected recovery in the current cyclical
low of the tanker market. TIL completed a $250 million equity private
placement in which Teekay Tankers and Teekay co-invested $25 million
each for a combined 20 percent ownership in the new company. The
balance of the privately placed TIL shares, which are listed on the
Norwegian over-the-counter market under the symbol "TIL", were
purchased by a group of institutional investors. 
A portion of the net proceeds from the equity private placement will
be used to acquire four 2009 and 2010-built Aframax crude oil tankers
for an aggregate purchase price of approximately $116 million, which
are expected to be acquired between March and June 2014, and four
2009-built Suezmax crude oil tankers for an aggregate purchase price
of approximately $163 million, which TIL will pay for by the assuming
an equal amount of indebtedness already secured by those vessels. The
four Suezmax vessels are expected to be acquired from Teekay in
late-February 2014. The remaining proceeds will be used to acquire
additional tankers and for general corporate purposes. TIL expects to
list its shares on the Oslo Stock Exchange in March 2014.  
The Teekay and Teekay Tankers' Boards of Directors have also agreed
in principle to the sale of Teekay's conventional tanker commercial
and technical management operations (Teekay Operations) to Teekay
Tankers, including direct ownership in three commercially managed
tanker pools, which currently generate income from commercially
managing a fleet of 82 vessels and technically managing a fleet of 49
vessels. The TIL fleet also will be managed by Teekay Operations and,
upon completion of the sale of Teekay Operations, the corresponding
fees associated with the management of TIL's vessels will be earned
by Teekay Tankers. 
Fixed-Rate Time-Charter Coverage 
During December 2013, Teekay Tankers commenced new time-charter out
contracts for two Aframax tankers. The Erik Spirit has been
time-chartered out for a period of 12 months at a rate of $14,100 per
day and the Esther Spirit has been time-chartered out for a period of
24 months at a time-charter rate of $16,500 per day. 
Teekay Tankers recently extended its time-charter in contract with BM
Breeze for a period of 12 months at a rate of $12,000 per day, with
options to extend up to an additional 24 months at escalating rates.  
Tanker Market 
Global oil demand is expected to average 92.5 million barrels per day
(mb/d) in 2014, representing an increase of 4.1 mb/d, or 4.6 percent,
compared to 2010 oil demand of 88.4 mb/d. In recent years, oil demand
growth has been more than offset by high levels of fleet growth with
the global tanker fleet growing by a net 70.8 million deadweight
tonnes (mdwt), or 16.3 percent, from the start of 2010 until January
2014. Moderate oil demand growth, combined with high tanker fleet
growth resulted in a significant decline in crude tanker spot rates
and second-hand tanker values during the period from 2010 to the
fourth quarter of 2013.  
In December 2013 and January 2014, crude tanker spot rates increased
significantly, reaching their highest levels since the third quarter
of 2008, although rates for 2013 as a whole were comparatively low on
a historical basis. This recent increase was primarily due to strong
Chinese crude oil imports, an increase in long-haul movements from
the Atlantic basin to Asia, and seasonal factors.  
There are currently 61.6 mdwt of tankers on order, or approximately
12.3 percen
t of the existing fleet. The tanker orderbook has been
shrinking since it peaked at 190 mdwt, or approximately 49 percent of
the fleet, in September 2008. As a result of the smaller orderbook,
the global tanker fleet is expected to grow by only 1.2 percent in
2014 and 1.3 percent in 2015, net of removals, which is the smallest
fleet growth rate since 2001. The pace of new tanker ordering
increased in 2013, with a total of 33.6 mdwt ordered, compared to
just 13.9 mdwt ordered during 2012. From 2000 to 2012, annual orders
averaged 35.8 mdwt. However, the majority of orders placed in 2013
were for Medium-Range (MR) and Long Range 2 (LR2) product tankers.  
In its January 2014 "World Economic Outlook", the International
Monetary Fund (IMF) raised its global GDP growth forecast for 2014 to
3.7 percent, an increase of 0.1 percent over its previous forecast
for 2014. Global oil demand is projected to grow by 1.2 million mb/d
in 2014 based on the average of the forecasts of the International
Energy Agency, the Energy Information Administration, and OPEC, an
increase from the 1.0 mb/d of oil demand growth in 2013. The
forecasted increase in demand is based on the cautiously positive
sentiment for global economic growth, which continues to be driven by
China, although at a slower pace than previous years. The call on
OPEC is expected to decline by around 0.6 mb/d in 2014, as non-OPEC
supply, mostly driven by the United States, continues to grow. 
A combination of improving global economic conditions and expected
stronger oil demand growth coupled with limited tanker fleet growth
for 2014 and 2015, is expected to drive an increase in tanker fleet
utilization and therefore improved spot tanker rates over the next
two years. 
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:  


 
 
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                                              Three Months Ended            
                                    December 31, September 30,  December 31,
                                            2013          2013          2012
----------------------------------------------------------------------------
Time-Charter Out Fleet                                                      
Suezmax revenue days                         176           134           362
Suezmax TCE per revenue day(i)       $    19,490   $    20,448   $    21,036
Aframax revenue days                         804           825           714
Aframax TCE per revenue day (i)      $    17,189   $    17,542   $    17,769
MR revenue days                               92            92           276
MR TCE per revenue day(ii)           $    35,054   $    35,633   $    25,287
 
Spot Fleet                                                                  
Suezmax revenue days                         683           716           538
Suezmax spot TCE per revenue day     $    15,221   $    13,799   $    11,515
Aframax revenue days                         276           284           424
Aframax spot TCE per revenue day     $    13,893   $    13,583   $    13,384
LR2 revenue days                             276           275           276
LR2 spot TCE per revenue day         $    12,901   $    12,488   $    15,889
MR revenue days                              181           184             -
MR spot TCE per revenue day          $    15,772   $    15,067             -
 
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Total Fleet                                                                 
 
Suezmax revenue days                         859           850           900
Suezmax TCE per revenue day(i)       $    16,096   $    14,845   $    15,345
Aframax revenue days                       1,080         1,109         1,138
Aframax TCE per revenue day(i)       $    16,347   $    16,528   $    16,141
LR2 revenue days                             276           275           276
LR2 TCE per revenue day              $    12,901   $    12,488   $    15,889
MR revenue days                              273           276           276
MR TCE per revenue day(ii)           $    22,279   $    21,923   $    25,287
 
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(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.                                             

Teekay Tankers' Fleet 
The following table summarizes the Company's fleet as of February 1,
2014: 


 
 
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                                              Owned   Chartered-in          
                                            Vessels        Vessels     Total
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Fixed-rate:                                                                 
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Suezmax Tankers                                   2              -         2
Aframax Tankers                                   9              -         9
MR Product Tankers                                1              -         1
VLCC Tanker(i)                                    1              -         1
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Total Fixed-Rate Fleet                           13              -        13
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Spot-rate:                                                                  
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Suezmax Tankers                                   8              -         8
Aframax Tankers(ii)                               2              1         3
LR2 Product Tankers                               3              -         3
MR Product Tankers                                2              -         2
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Total Spot Fleet                                 15              1        16
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Total Teekay Tankers Fleet                       28              1        29
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(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 2015, with options to extend up to an   
     additional 24 months.                                                  

Liquidity 
As of December 31, 2013, the Company had total liquidity of $173.9
million (which consisted of $25.6 million of cash and $148.3 million
in an undrawn revolving credit facility), compared to total liquidity
of $226.1 million as at September 30, 2013.  
Conference Call 
The Company plans to host a conference call on Thursday, February 20,
2014 at 1:00 p.m. (ET) to discuss its results for the fourth quarter
and fiscal year 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 6530002. 
--  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,
February 27, 2014. 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 6530002. 
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." 


 
 
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                            TEEKAY TANKERS LTD.                             
              SUMMARY CONSOLIDATED STATEMENTS OF INCOME (LOSS)              
              (in thousands of U.S. dollars, except share data)             
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                         Three Months Ended                Year Ended       
                ------------------------------------------------------------
                  December,  September,   December,   December,   December, 
                         31          30          31          31          31 
                ----------- ----------- ----------- ----------- ----------- 
                       2013        2013        2012        2013        2012 
                ----------- ----------- ----------- ----------- ----------- 
                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 
                ----------- ----------- ----------- ----------- ----------- 
 
Time-charter                                                                
 revenues            20,832      20,600      27,339      88,320     123,364 
Net pool                                                                    
 revenues            19,205      18,879      15,241      69,675      62,328 
Voyage charter                                                              
 revenue                132           -          28       4,415         238 
Interest income                                                             
 from investment                                                            
in term loans(1)      1,994           -       2,885       7,677      11,499 
----------------------------------------------------------------------------
Total revenues       42,163      39,479      45,493     170,087     197,429 
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OPERATING                                                                   
 EXPENSES                                                                   
Voyage expenses       2,492         483       1,017       8,337       4,618 
Vessel operating                                                            
 expenses(2)         21,922      21,859      25,016      91,667      96,160 
Time-charter                                                                
 hire expense         1,021       1,216         841       6,174       3,950 
Depreciation and                                                            
 amortization        12,113      11,935      18,431      47,833      72,365 
General and                                                                 
 administrative                                                             
 (2)                  2,354       3,317       2,390      12,594       7,985 
(Reversal) loss                                                             
 provision on                                                               
 investment in                                                              
term loans(1)                                                               
 (3)                (14,910)     10,399           -           -           - 
Vessel                                                                      
 impairment and                                                             
 net loss on                                                                
 sale                                                                       
of vessel                 -           -     352,546          71     352,546 
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                     24,992      49,209     400,241     166,676     537,624 
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Income (loss)                                                               
 from operations     17,171      (9,730)   (354,748)      3,411    (340,195)
----------------------------------------------------------------------------
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OTHER ITEMS                                                                 
Interest expense     (2,468)     (2,440)     (2,840)    (10,023)    (20,009)
Interest income          63          71          14         158          50 
Realized and                                                                
 unrealized                                                                 
 (loss) gain                                                                
on derivative                                                               
 instruments(4)      (1,014)     (2,492)      1,263      (1,524)     (7,963)
Equity income                                                               
 (loss) from                                                                
 joint venture          564         458          (1)        854          (1)
Other expenses         (186)       (458)       (257)     (1,014)     (2,063)
----------------------------------------------------------------------------
                     (3,041)     (4,861)     (1,821)    (11,549)    (29,986)
----------------------------------------------------------------------------
Net income                                                                  
 (loss)              14,130     (14,591)   (356,569)     (8,138)   (370,181)
----------------------------------------------------------------------------
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Earnings (loss)                                                             
 per share                                                                  
 attributable to                                                            
 shareholders of                                                            
 Teekay Tankers                                                             
 (5)                                                                        
- Basic and                                                                 
 diluted               0.17       (0.17)      (4.27)     ($0.10)     ($4.54)
Weighted-average                                                            
 number of Class                                                            
 A                                                                          
common shares                                                               
 outstanding                                                                
- Basic and                                                                 
 diluted         71,091,030  71,091,030  71,091,030  71,091,030  67,039,605 
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  79,539,605 
 
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(1) The amount recoverable from the Company's investment in term loans is   
    dependent on various factors, including the amount realizable from the  
    sale of two VLCCs held as collateral for the loans. The amounts the     
    Company ultimately may record in its annual 2013 filing with the SEC on 
    the Form 20-F as interest income and loss provision on its investment in
    term loans for 2013 may vary from the amounts shown above if there are  
    significant changes in the Company's current estimates of the value of  
    its collateral that may be realized.                                    
(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 $1.4  
    million for the three months ended December 31, 2013 and September 30,  
    2013, respectively, and $5.6 million for the year ended December 31,    
    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 for the three months 
    ended December 31, 2012 and $7.0 million for the year ended December 31,
    2012.                                                                   
(3) A reversal of a loss provision on the Company's investment in term loans
    of $14.9 million was recorded for the three months ended December 31,   
    2013. Loss provisions on investment in term loans of $10.4 million and  
    $4.5 million had previously been recorded for the three months ended    
    September 30, 2013 and June 30, 2013, respectively. As a result of the  
    reversal, there was no remaining loan loss provision recorded as of     
    December 31, 2013.                                                      
(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      
    December 31, 2013, September 30, 2013 and December 31, 2012,            
    respectively, and $9.9 million and $7.8 million for the years ended     
    December 31, 2013 and December 31, 2012, respectively.                  
(5) Income (loss) per share attributable to shareholders of Teekay Tankers  
    is determined by dividing (a) net income (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)                       
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                                       As at           As at           As at
                              -------------- --------------- ---------------
                                December 31,   September 30,    December 31,
                                        2013            2013            2012
                              -------------- --------------- ---------------
                                 (unaudited)     (unaudited)     (unaudited)
                              -------------- --------------- ---------------
ASSETS                                                                      
Cash                                  25,646          29,168          26,341
Pool receivable from related                                                
 parties                              10,765           7,962           9,101
Accounts receivable                    4,247           8,233           4,523
Vessel held for sale                       -               -           9,114
Prepaid assets                        10,361          12,630           9,714
Investment in term loans             136,061         114,096         119,385
Due from affiliates                   27,991          26,791          24,787
Vessels and equipment                859,308         861,377         885,992
Loan to joint venture                  9,830           9,830           9,830
Investment in joint venture            8,366           7,802           3,457
Other non-current assets               4,954           5,164           3,412
----------------------------------------------------------------------------
Total assets                       1,097,529       1,083,053       1,105,656
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
LIABILITIES AND EQUITY                                                      
Accounts payable and accrued                                                
 liabilities                          23,320          19,683          21,228
Current portion of long-term                                                
 debt                                 25,246          25,246          25,246
Current portion of derivative                                               
 instruments                           7,344           6,219           7,200
Deferred revenue                       2,961           1,090           4,564
Due to affiliates                     11,323          11,430           3,592
Long-term debt                       719,388         720,921         710,455
Other long-term liabilities           23,275          25,792          31,188
Equity                               284,672         272,672         302,183
----------------------------------------------------------------------------
Total liabilities and equity       1,097,529       1,083,053       1,105,656
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                            TEEKAY TANKERS LTD.                             
                SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS               
                       (in thousands of U.S. dollars)                       
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                      Year Ended            
                                           ---------------------------------
                                              December 31,     December 31, 
                                                      2013             2012 
                                           ---------------  ----------------
                                               (unaudited)   (unaudited)(1) 
                                           ---------------  ----------------
Cash and cash equivalents prov
ided by (used                                 
 for)                                                                       
 
OPERATING ACTIVITIES                                                        
----------------------------------------------------------------------------
Net operating cash flow                              6,202           27,542 
----------------------------------------------------------------------------
 
FINANCING ACTIVITIES                                                        
Proceeds from long-term debt                        59,179           32,226 
Repayments of long-term debt                       (25,246)         (13,522)
Prepayment of long-term debt                       (25,000)         (60,000)
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                                             -           (9,509)
Net advances from affiliates                             -           16,913 
Contribution of capital from Teekay                                         
 Corporation                                             -            9,507 
Proceeds from issuance of Class A common                                    
 stock                                                   -           69,000 
Share issuance costs                                     -           (3,229)
Cash dividends paid                                (10,030)         (32,231)
----------------------------------------------------------------------------
Net financing cash flow                             (1,097)         (13,905)
----------------------------------------------------------------------------
 
INVESTING ACTIVITIES                                                        
Proceeds from sale of vessel and equipment           9,114                - 
Expenditures for vessels and equipment              (1,904)          (2,518)
Investment in joint venture                         (3,890)          (3,344)
Investment in term loans                            (9,120)               - 
----------------------------------------------------------------------------
Net investing cash flow                             (5,800)          (5,862)
----------------------------------------------------------------------------
 
(Decrease) increase in cash and cash                                        
 equivalents                                          (695)           7,775 
Cash and cash equivalents, beginning of the                                 
 year                                               26,341           18,566 
----------------------------------------------------------------------------
Cash and cash equivalents, end of the year          25,646           26,341 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In accordance with GAAP, the statements of cash flows for the year ended
    December 31, 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 for the time they were    
    owned and operated by Teekay Corporation.                               
 
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                            TEEKAY TANKERS LTD.                             
           APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME (LOSS)          
          (in thousands of U.S. dollars, except per share amounts)          
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Set forth below is a reconciliation of the Company's unaudited adjusted
net income (loss) attributable to the shareholders of Teekay Tankers,
a non-GAAP financial measure, to net income (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 income (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. 


 
 
-----------------------------------------------------------------------
-----
-----------------------------------------------------------------
-----------
                                           Three Months Ended               
                            ------------------------------------------------
                               December 31, 2013       December 31, 2012    
                            ---------------------- -------------------------
                                  (unaudited)             (unaudited)       
                            ---------------------- -------------------------
                                   $   $ Per Share          $   $ Per Share 
----------------------------------------------------------------------------
Net income (loss) - GAAP                                                    
 basis                        14,130    $     0.17   (356,569)   $    (4.27)
----------------------------------------------------------------------------
Net income (loss)                                                           
 attributable to                                                            
 shareholders of Teekay                                                     
 Tankers                      14,130    $     0.17   (356,569)        (4.27)
(Subtract) add specific                                                     
 items affecting net income:                                                
  Unrealized gain on                                                        
   interest rate swaps (1)    (1,486)   $    (0.02)    (3,735)        (0.04)
  Reversal of loss provision                                                
   on investment term loans                                                 
   (2)                       (14,910)   $    (0.18)         -             - 
  Write-down of vessels and                                                 
   equipment (3)                   -             -    352,546    $     4.22 
  Other (4)                     (145)            -          -             - 
----------------------------------------------------------------------------
Total adjustments            (16,541)   $    (0.20)   348,811    $     4.18 
----------------------------------------------------------------------------
Adjusted net loss                                                           
 attributable to                                                            
 shareholders of Teekay                                                     
 Tankers                      (2,411)   $    (0.03)    (7,758)   $    (0.09)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                               Year Ended                   
                            ------------------------------------------------
                               December 31, 2013       December 31, 2012    
                            ---------------------- -------------------------
                                  (unaudited)             (unaudited)       
                            ---------------------- -------------------------
                                   $   $ Per Share          $   $ Per Share 
----------------------------------------------------------------------------
Net loss - GAAP basis         (8,138)   $    (0.10)  (370,181)   $    (4.65)
Add:                                                                        
Net loss attributable to the                                                
 Dropdown Predecessor              -             -      9,163    $     0.11 
----------------------------------------------------------------------------
Net loss attributable to                                                    
 shareholders of Teekay                                                     
 Tankers                      (8,138)   $    (0.10)  (361,018)   $    (4.54)
(Subtract) add specific                                                     
 items affecting net income:                                                
  Unrealized gain on                                                        
   interest rate swaps (1)    (8,363)   $    (0.10)    (3,810)   $    (0.04)
  Write-down of vessels and                                                 
   equipment/ loss on sale                                                  
   (3)                            71             -    352,546    $     4.43 
  Other (4)                      126             -        840    $     0.01 
                            ------------------------------------------------
Total adjustments             (8,166)   $    (0.10)   349,576    $     4.40 
----------------------------------------------------------------------------
Adjusted net loss                                                           
 attributable to                                                            
 shareholders of Teekay                                                     
 Tankers                     (16,304)   $    (0.20)   (11,442)   $    (0.14)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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) Reversal of the loan loss provision was recorded for the three months   
    ended December 31, 2013. The full reversal of the loan loss provision   
    was due to the increase in the value of the two VLCCs securing the      
    Company's investment in term loans.                                     
(3) The amount for the year ended December 31, 2012 relates to impairment   
    charges associates with the Company's Suezmax tankers, certain of its   
    older Aframax tankers, and one MR product tanker.                       
(4) The amount recorded for the three months ended December 31, 2013 and the
    year ended December 31, 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 year ended December 31, 2012 relates to the          
    transaction costs related to the acquisition costs of the 13            
    conventional tankers acquired in June 2012.                             
 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                             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)       
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Description of Non-GAAP Financial Measure - Cash Available for
Distribution  
Cash Available for Distribution (CAD) represents net income, plus
depreciation and amortization, unrealized losses from derivatives,
non-cash items, CAD from the VLCC joint venture and any write-offs or
other non-recurring items, less unrealized gains from derivatives and
equity income from the joint venture.  


 
 
-----------------------------------------------------------------------
-----
                                                          Three Months Ended
                                                          ------------------
                                                          December 31, 2013 
                                                          ------------------
                                                             (unaudited)    
----------------------------------------------------------------------------
 
Net income for the period                                           14,130  
 
Add:                                                                        
  Depreciation and amortization                                     12,113  
  Proportionate share of cash available for distribution                    
   from joint venture                                                  939  
  Other                                                                210  
Less:                                                                       
  Reversal of loss provision on investment in term loans           (14,910) 
  Equity income from joint venture                                    (564) 
  Unrealized gain on interest rate swaps                            (1,486) 
----------------------------------------------------------------------------
Cash Available for Distribution                                     10,432  
----------------------------------------------------------------------------
 
Weighted average number of common shares outstanding for                    
 the quarter                                                    83,591,030  
 
----------------------------------------------------------------------------
Cash Available for Distribution per share (rounded)                  $0.12  
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                             TEEKAY TANKERS LTD.                            
          APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURE         
                                NET REVENUES                                
                       (in thousands of U.S. dollars)                       
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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                   Year ended        
           -----------------------------------------------------------------
                          September                                         
           December 31,      30,     December 31, December 31, December 31, 
           ------------ ------------ ------------ ------------ -------------
               2013         2013         2012         2013         2012     
           ------------ ------------ ------------ ------------ -------------
            (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
----------------------------------------------------------------------------
Revenues         42,163       39,479       45,493      170,087      197,429 
Voyage                                                                      
 expenses        (2,492)        (483)      (1,017)      (8,337)      (4,618)
----------------------------------------------------------------------------
Net                                                                         
 revenues        39,671       38,996       44,476      161,750      192,811 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                         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 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 acquisition of Teekay's
conventional tanker commercial and technical management operations
and the related effect on the Company; the Company's investment in
TIL, potential benefits to the Company, and TIL's proposed vessels
acquisitions and Oslo Stock Exchange listing; and 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 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; greater or less than anticipated levels
of tanker newbuilding orders or greater or less than anticipated
rates 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 TIL to achieve market acceptance,
obtain growth opportunities or list its shares on the Oslo Exchange;
changes in future charter rates and the market value of the VLCCs
securing the Company's investment in term loans; the ability of
Teekay Tankers 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;
failure by the Company and Teekay to negotiate or complete the sale
of the conventional tanker technical and commercial management
operations; 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
Ryan Hamilton
+1 (604) 844-6654
www.teekaytankers.com
 
 
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