Teekay Tankers Ltd. Reports Second Quarter 2014 Results

Teekay Tankers Ltd. Reports Second Quarter 2014 Results 
HAMILTON, BERMUDA -- (Marketwired) -- 08/07/14 --  Highlights 


 
 
--  Reported second quarter 2014 adjusted net loss attributable to
    shareholders of Teekay Tankers of $4.1 million, or loss of $0.05 per
    share (excluding specific items which increased GAAP net income by $8.7
    million, or $0.10 per share). 
--  Generated Cash Available for Distribution (CAD) of $0.11 per share. 
--  Realized a $10 million gain on the sale of two Very Large Crude Carriers
    (VLCC) vessels in the second quarter of 2014. As a result of this
    transaction, Teekay Tankers' total liquidity increased to $250 million
    as of June 30, 2014. 
--  Secured time charter-in contracts for two Aframax tankers and four Long
    Range 2 (LR2) product tankers in the second quarter of 2014, bringing
    the total in-charter fleet to eight vessels. 
--  On August 1, 2014, Teekay Tankers completed the acquisition of a 50
    percent ownership interest in Teekay Corporation's commercial and
    technical management operations (Teekay Operations) for approximately
    $15 million. 
--  In July 2014, experienced the highest Suezmax and Aframax spot tanker
    rates for the month of July since 2008. 

Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE: TNK) today
reported adjusted net loss attributable to shareholders of Teekay
Tankers(1) (as detailed in Appendix A to this release) of $4.1
million, or loss of $0.05 per share, for the quarter ended June 30,
2014, compared to adjusted net loss attributable to shareholders of
Teekay Tankers of $6.3 million, or $0.08 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 spot tanker rates in the second quarter of 2014 as compared
to the same period in the prior year, partially offset by a decrease
in recognized interest income as a result of the monetization of the
Company's investment in term loans in March 2014. 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 $8.7 million, or
$0.10 per share, for the three months ended June 30, 2014 and
decreasing net loss attributed to shareholders of Teekay Tankers by
$0.6 million, or $0.01 per share, for the three months ended June 30,
2013, 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 $4.6 million, or $0.05 per
share, for the quarter ended June 30, 2014, compared to a net loss
attributable to shareholders of Teekay Tankers of $5.7 million, or
$0.07 per share, for the quarter ended June 30, 2013. Net revenues(2)
were $40.8 million and $41.0 million for the quarters ended June 30,
2014 and June 30, 2013, respectively.  
For the six months ended June 30, 2014, the Company reported adjusted
net income attributable to shareholders of Teekay Tankers of $12.8
million, or $0.15 per share, compared to adjusted net loss attributed
to the shareholders of Teekay Tankers of $9.9 million, or $0.12 per
share, for the same period in the prior year. The increase in
adjusted net income attributable to shareholders of Teekay Tankers is
primarily due to the stronger spot tanker rates for the first six
months of 2014 compared to the same period in the prior year and an
increase in interest income recognized from the Company's investment
in term loans, which concluded in March 2014. Adjusted net income
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 $18.3 million, or
$0.22 per share, and decreasing the net loss by $2.2 million or $0.03
per share, for the six month periods ended June 30, 2014 and June 30,
2013, respectively, 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 $31.0
million, or $0.37 per share, for the six months ended June 30, 2014,
compared to net loss attributable to shareholders of Teekay Tankers
of $7.7 million, or $0.09 per share, for the six months ended June
30, 2013. Net revenues(2) were $101.1 million and $83.1 million for
the six months ended June 30, 2014 and June 30, 2013, respectively. 
During the second quarter of 2014, the Company generated $9.2
million, or $0.11 per share, of Cash Available for Distribution(3),
compared to $5.6 million, or $0.07 per share, in the second quarter
of 2013 due to the reasons noted above. On July 3, 2014, Teekay
Tankers declared a dividend of $0.03 per share for the second quarter
of 2014, which was paid on July 31, 2014 to all shareholders of
record on July 18, 2014. Since the Company's initial public offering
in December 2007, it has declared dividends in 27 consecutive
quarters, which now total $7.365 per share on a cumulative basis. 
"As we head into the mid-point of the third quarter of 2014, there
has been a significant increase in crude spot tanker rates in recent
weeks which has resulted in the highest quarter-to-date third quarter
spot rates in the Suezmax and Aframax segments since 2008," commented
Kevin Mackay, Chief Executive Officer of Teekay Tankers. "The
increase in spot rates is primarily due to an increase in long-haul
Suezmax movements from the Atlantic to Pacific, the end of seasonal
refinery maintenance, stockpiling due to continued unrest in Iraq,
and vessel delays at U.S. Gulf and Mediterranean ports. While we
expect rates to soften from the current high levels, we believe that
stronger oil demand, limited tanker fleet growth and improving global
economic conditions will continue to support a general firming of
average spot tanker rates." 
"Based on our outlook for the tanker market and expected higher
volatility in rates, we have been actively increasing Teekay Tankers'
spot rate exposure through new in-charter contracts with favorable
rates and optional periods," Mr. Mackay continued. "In addition to
the six vessels we have recently in-chartered, as some of our owned
vessels currently operating under fixed-rate employment contracts
redeliver, we plan to trade more of these vessels in the spot tanker
market rather than pursue replacement fixed-rate contracts. With this
shift from fixed-rate coverage to increased spot exposure, our
fixed-rate coverage for the next 12 months has reduced to 26 percent,
down from almost 50 percent a couple years ago, which we believe will
allow Teekay Tankers to benefit from any additional spikes in the
spot market as we move into the second half of 2014." 
Mr. Mackay added, "With the finalization of our 50 percent
acquisition of Teekay Operations, Teekay Tankers is evolving 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. Combined with an expected overall firming in spot
tankers rates and our shift towards increased spot rate employment,
we believe that the additional fee revenue from our ownership in
Teekay Operations will further position Teekay Tankers to benefit
from a sustained tanker market recovery." 


 
 
(1) Adjusted net (loss) income 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) income 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 other non-cash items. 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 Developments 
Completed the Acquisition of Teekay's Commercial and Technical
Operations 
On August 1, 2014, Teekay Tankers' completed the acquisition of a 50
percent ownership interest in Teekay Corporation's commercial and
technical management operations (Teekay Operations) for approximately
$15 million. Consideration for the transaction was paid in shares of
Teekay Tankers at a price of $3.70 per share, which represents the
trailing 20-day volume-weighted average price at the time of the
agreement. Teekay Operations includes direct ownership in three
commercially managed tanker pools, which currently generate income
from commercially managing a fleet of 84 vessels, and direct
ownership in Teekay Marine Limited, which currently generates income
from technically managing a fleet of 53 vessels, including vessels
owned by the Company.  
Fixed-Rate Time Charter Coverage 
During the second quarter of 2014, Teekay Tankers secured time
charter-in contracts for two Aframax vessels and four Long Range 2
(LR2) product tanker vessels which increased Teekay Tankers' total
time charter-in fleet to eight vessels. The new time charter-in
contracts have an average daily rate of $15,600 for the Aframax
vessels and $15,975 for the LR2 product tanker vessels.  
Tanker Market 
Crude tanker spot rates in the second quarter of 2014 averaged
approximately 20 to 30 percent higher compared to the same period of
2013, reflecting improving tanker market fundamentals and higher
fleet utilization compared to the previous year.  
Since the beginning of the third quarter of 2014, Aframax and Suezmax
spot rates experienced a counter-seasonal rally to the highest levels
seen in the month of July since 2008. The third quarter rate spike
was primarily due to refinery throughput increasing as seasonal
refinery maintenance concluded, coupled with an increase in long-haul
Suezmax movements from the Atlantic to Pacific, fear-driven
stockpiling due to uncertainty caused by unrest in Iraq, and vessel
delays at U.S. Gulf and Mediterranean ports. This significant
increase in tanker rates during what is usually a weak part of the
year for crude tankers, is a further sign of improving tanker market
fundamentals and is a positive signal ahead of the seasonally
stronger winter market, which begins in the fourth quarter. 
Long Range 2 (LR2) product tanker rates strengthened in the early
part of the second quarter due to higher naphtha exports from the
Middle East and Europe to Asia before declining in June due to
increased competition from cheaper liquefied petroleum gas. Medium
Range (MR) product tanker spot rates weakened during the second
quarter of 2014 due to a combination of lower U.S. export volumes and
the impact of new fleet supply growth.  
The global tanker fleet grew by 2.6 million deadweight tonnes (mdwt),
or 0.5 percent, in the first half of 2014 compared to 10.8 mdwt, or
2.2 percent, in the same period of 2013. A significant portion of
this fleet growth occurred in the MR product tanker sector while the
world Suezmax and Aframax crude tanker fleets shrank by a net two
vessels, or 0.4 percent, and 13 vessels, or 2.1 percent,
respectively, during the first six months of 2014. Taking into
account newbuilding orderbook slippage and scrapping, the world
tanker fleet is forecasted to grow by approximately 1.2 percent in
2014, the lowest level of tanker fleet growth since 2001, and by
approximately 1.6 percent in 2015. The mid-size tanker fleet is
forecasted to further reduce in size during the second half of 2014
and into 2015 as scrapping of older vessels is expected to outweigh
new deliveries into the fleet. 
In its July 2014 "World Economic Outlook Update," the International
Monetary Fund revised its outlook for global GDP growth in 2014
downward from 3.7 percent to 3.4 percent, with global GDP growth in
2015 unchanged at 4.0 percent. The downward revision is mainly due to
a weaker than expected GDP growth in the United States for the first
quarter of 2014 as a result of extreme weather events, softening
domestic demand in China, geopolitical instability between Russia and
the Ukraine, and a less optimistic growth outlook for several
emerging markets.  
Global oil demand is projected to grow by 1.2 million barrels per day
(mb/d) in 2014 and 1.4 mb/d in 2015 based on the average of forecasts
by the International Energy Agency, the Energy Information
Administration, and OPEC. Accelerating global oil demand growth
coupled with very low tanker fleet growth, particularly in the crude
sectors, is expected to drive an increase in tanker fleet utilization
and spot tanker rates during the remainder of 2014 and 2015. 
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         
                                            June 30,   March 31,    June 30,
                                                2014        2014        2013
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Time-Charter Out Fleet                                                      
Suezmax revenue days                             182         180         182
Suezmax TCE per revenue day                  $20,166     $20,308     $20,228
Aframax revenue days                             761         812         877
Aframax TCE per revenue day                  $17,628     $17,586     $17,094
MR revenue days                                   91          90         114
MR TCE per revenue day (i)                   $36,219     $34,069     $33,425
 
Spot Fleet                                                                  
Suezmax revenue days                             727         685         728
Suezmax spot TCE per revenue day             $16,089     $28,079     $12,150
Aframax revenue days                             266         266         267
Aframax spot TCE per revenue day (ii)        $15,540     $22,591     $12,406
LR2 revenue days                                 273         270         273
LR2 spot TCE per revenue day                 $13,340     $13,905     $12,795
MR revenue days                                  182         180         159
MR spot TCE per revenue day (iii)            $11,656     $13,403     $13,905
VLCC revenue days                                 76          20           -
VLCC spot TCE per revenue day                $11,280     $23,378           -
 
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Total Fleet                                                                 
 
Suezmax revenue days                             909         865         910
Suezmax TCE per revenue day                  $16,906     $26,462     $13,766
Aframax revenue days                           1,027       1,078       1,144
Aframax TCE per revenue day                  $17,087     $18,821     $16,001
LR2 revenue days                                 273         270         273
LR2 TCE per revenue day                      $13,340     $13,905     $12,795
MR revenue days                                  273         270         273
MR TCE per revenue day (i)                   $19,844     $20,291     $24,665
VLCC revenue days                                 76          20           -
VLCC TCE per revenue day                     $11,280     $23,378           -
 
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(i)   The charter rate on the MR tanker includes approximately $14,000 per  
      day for the additional costs relating to Australian crew versus       
      international crew.                                                   
(ii)  The combined average spot TCE rate for the Aframax tankers trading in 
      both the Aframax Pool and on non-pool voyage charters was $15,462 per 
      day and $12,139 per day for the three months ended June 30, 2014 and  
      June 30, 2013, respectively.                                          
(iii) The combined average spot TCE rate for the MR tankers trading in the  
      NOrient Pool and on non-pool voyage charters was $10,113 per day for  
      the three months ended June 30, 2013.                                 

Teekay Tankers' Fleet 
The following table summarizes the Company's fleet as of August 1,
2014 (including committed charter-in vessels to be delivered): 


 
 
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                                                Chartered-in                
                                Owned Vessels     Vessels         Total     
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Fixed-rate:                                                                 
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Suezmax Tankers                       2              -              2       
Aframax Tankers                       8              -              8       
MR Product Tankers                    1              -              1       
VLCC Tanker(i)                        1              -              1       
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Total Fixed-Rate Fleet                12             -              12      
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Spot-rate:                                                                  
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Suezmax Tankers                       8              -              8       
Aframax Tankers(ii)                   3              4              7       
LR2 Product Tankers(iii)              3              4              7       
MR Product Tankers                    2              -              2       
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Total Spot Fleet                      16             8              24      
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Total Teekay Tankers Fleet            28             8              36      
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(i)   The Company's ownership interest in this vessel is 50 percent.        
(ii)  One Aframax tanker is currently in-chartered for a 12-month period    
      ending in January 2015, with options to extend up to an additional 24 
      months and one Aframax tanker is currently in-chartered for a 12-month
      period ending in July 2015, with an option to extend up to an         
      additional 9 months. We expect the remaining two time charter-in      
      Aframax vessels to deliver in the fourth quarter of 2014.             
(iii) One Long Range 2 (LR2) product tanker is currently in-chartered for a 
      12-month period ending in June 2015, with an option to extend up to an
      additional 12 months and one LR2 product tanker is currently in-      
      chartered for a 12-month period ending in July 2015, with an option to
      extend up to an additional 6 months. We expect the remaining two time 
      charter-in LR2 product tankers to deliver late in the third quarter of
      2014.                                                                 

Liquidity 
As of June 30, 2014, the Company had total liquidity of $250 million
(which consisted of $21.8 million of cash and $228.2 million in an
undrawn revolving credit facility), compared to total liquidity of
$149.4 million as at March 31, 2014. 
Conference Call 
The Company plans to host a conference call on Thursday, August 7,
2014 at 1:00 p.m. (ET) to discuss its results for the second quarter
of 2014. 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) 524-8950 or (416) 260-0113, if outside of North
    America, and quoting conference ID code 1020200. 
--  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,
August 14, 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 1020200. 
About Teekay Tankers 
Teekay Tankers directly 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 contracted four time charter-in Aframax tankers and four time
charter-in LR2 product tankers. Teekay Tankers' vessels are employed
through a mix of short- or medium-term fixed-rate time charter
contracts and spot tanker market trading, and its vessels are
commercially and technically managed by a joint venture company which
Teekay Tankers and Teekay Corporation (NYSE: TK) each own a 50
percent interest. The Company also owns a Very Large Crude Carrier
(VLCC) through a 50 percent-owned joint venture. In addition, Teekay
Tankers owns a minority interest in Tanker Investments Ltd. (OSLO:
TIL), which currently owns a fleet of 13 modern tankers. 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             Six Months Ended    
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                  June 30,   March 31,    June 30     June 30,    June 30,  
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                    2014        2014        2013        2014        2013    
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                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 
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Time charter                                                                
 revenues            20,533      21,482      22,710      42,015      46,888 
Net pool                                                                    
 revenues            20,518      30,163      15,493      50,681      31,591 
Voyage charter                                                              
 revenues             3,382         996       2,433       4,378       4,283 
Interest income                                                             
 from investment                                                            
 in term loans                                                              
 (1)                      -       9,118       2,856       9,118       5,683 
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Total revenues       44,433      61,759      43,492     106,192      88,445 
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OPERATING                                                                   
 EXPENSES                                                                   
Voyage expenses       3,612       1,439       2,449       5,051       5,362 
Vessel operating                                                            
 expenses            23,585      22,794      24,832      46,379      47,886 
Time-charter                                                                
 hire expenses        1,112       1,052       1,951       2,164       3,937 
Depreciation and                                                            
 amortization        12,425      12,502      11,921      24,927      23,785 
General and                                                                 
 administrative       3,163       3,192       3,362       6,355       6,923 
Loss provision                                                              
 on investment                                                              
 in term loans            -           -       4,511           -       4,511 
(Gain) loss on                                                              
 sale of vessels                                                            
 (2)                 (9,955)          -           -      (9,955)         71 
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                     33,942      40,979      49,026      74,921      92,475 
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Income from                                                                 
 operations          10,491      20,780      (5,534)     31,271      (4,030)
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OTHER ITEMS                                                                 
Interest expense     (2,274)     (2,347)     (2,604)     (4,621)     (5,115)
Interest income          60         138          20         198          24 
Realized and                                                                
 unrealized                                                                 
 (loss) gain on                                                             
 derivative                                                                 
 instruments (3)     (3,614)      1,644       2,748      (1,970)      1,982 
Equity income                                                               
 (loss)                  15       2,594        (167)      2,609        (168)
Other (expenses)                                                            
 income                 (89)      3,623        (187)      3,534        (370)
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                     (5,902)      5,652        (190)       (250)     (3,647)
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Net income                                                                  
 (loss)               4,589      26,432      (5,724)     31,021      (7,677)
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Earnings (loss)                                                             
 per share                                                                  
 attributable to                                                            
 shareholders of                                                            
 Teekay Tankers                                                             
 (4)                                                                        
  - Basic              0.05        0.32       (0.07)       0.37       (0.09)
  - Diluted            0.05        0.31       (0.07)       0.37       (0.09)
 
Weighted-average                                                            
 number of total                                                            
 common shares                                                              
 outstanding                                                                
  - Basic        83,676,425  83,617,408  83,591,030  83,646,230  83,591,030 
  - Diluted      83,966,874  83,973,172  83,591,030  83,962,395  83,591,030 
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(1) In 2010, the Company invested in two term loans (Loans) secured by two  
    2010-built VLCC vessels. The borrowers under the Loans were in default  
    on their interest payment obligations since the first quarter of 2013,  
    and subsequently, in default of the repayment of the loan principal from
    the loan maturity date in July 2013. In late-March 2014, the Company    
    took full ownership of the vessels held as collateral in satisfaction of
    the Loans and accrued interest and recorded the vessels at their fair   
    value at that date. As a result, the Company recognized an additional   
    $9.1 million of interest income owing under the Loans for the three     
    months ended March 31, 2014.                                            
(2) In early May 2014, the Company sold to Tanker Investments Limited (TIL) 
    two wholly-owned subsidiaries, each of which owns one VLCC, for         
    aggregate proceeds of $154.0 million plus related working capital on    
    closing of $1.7 million. In the second quarter of 2014, the Company     
    recognized a $10.0 million gain on this transaction.                    
(3) Includes realized losses relating to interest rate swaps of $2.5        
    million, $2.5 million, and $2.5 million for the three months ended June 
    30, 2014, March 31, 2014 and June 30, 2013, respectively, and $5.0      
    million and $4.9 million for the six months ended June 30, 2014, and    
    June 30, 2013, respectively.                                            
(4) Earnings (loss) per share attributable to shareholders of Teekay Tankers
    is determined by dividing (a) net income (loss) of the Company 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      
                             -----------------------------------------------
                              June 30, 2014 March 31, 2014 December 31, 2013
                             -----------------------------------------------
                               (unaudited)   (unaudited)      (unaudited)   
                             -----------------------------------------------
ASSETS                                                                      
Cash                                 21,764         27,138            25,646
Pool receivable from related         13,699         13,025            10,765
 parties                                                                    
Accounts receivable                   2,545          5,031             4,247
Vessels held for sale                     -        144,000                 -
Prepaid assets                       12,036         14,894            10,361
Investment in term loans                  -              -           136,061
Due from affiliates                  33,197         25,890            27,991
Vessels and equipment               841,013        848,988           859,308
Loan to equity accounted              8,680          8,680             9,830
 investment                                                                 
Equity accounted investments         35,975         35,960             8,366
Derivative asset (1)                  4,026          5,857                 -
Other non-current assets              4,564          4,758             4,954
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Total assets                        977,499      1,134,221         1,097,529
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LIABILITIES AND EQUITY                                                      
Accounts payable and accrued                                                
 liabilities                         18,359         20,201            23,320
Current portion of long-term                                                
 debt                                51,959         20,367            25,246
Current portion of derivative                                               
 instruments                          7,482          6,377             7,344
Deferred revenue                          -            423             2,961
Due to affiliates                     8,707          8,377            11,323
Long-term debt                      557,439        745,174           719,388
Other long-term liabilities          20,862         22,643            23,275
Equity                              312,691        310,659           284,672
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Total liabilities and equity        977,499      1,134,221         1,097,529
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(1) Derivative asset reflects the fair value of the stock purchase warrant, 
    which was received in connection with the Company's involvement in the  
    formation of TIL.                                                       
 
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                            TEEKAY TANKERS LTD.                             
                SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS               
                       (in thousands of U.S. dollars)                       
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                                                     Six Months Ended       
                                              ------------------------------
                                               June 30, 2014  June 30, 2013 
                                              ------------------------------
                                                (unaudited)    (unaudited)  
                                              ------------------------------
Cash and cash equivalents provided by (used                                 
 for)                                                                       
 
OPERATING ACTIVITIES                                                        
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Net operating cash flow                                4,613         17,958 
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FINANCING ACTIVITIES                                                        
Proceeds from long-term debt                          31,947         27,136 
Repayments of long-term debt                         (10,183)       (12,623)
Prepayment of long-term debt                        (157,000)       (20,000)
Equity contribution from Teekay Corporation            1,267              - 
Cash dividends paid                                   (5,018)        (5,015)
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Net financing cash flow                             (138,987)       (10,502)
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INVESTING ACTIVITIES                                                        
Proceeds from sale of vessels                        154,000          9,119 
Expenditures for vessels and equipment                  (837)        (1,208)
Investment in equity accounted investments           (25,000)        (4,000)
Loan repayments from equity accounted                                       
 investment                                            1,150              - 
Term loan advance recoveries                           1,179              - 
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Net investing cash flow                              130,492          3,911 
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(Decrease) increase in cash and cash                                        
 equivalents                                          (3,882)        11,367 
Cash and cash equivalents, beginning of the                                 
 period                                               25,646         26,341 
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Cash and cash equivalents, end of the period          21,764         37,708 
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                            TEEKAY TANKERS LTD.                             
           APPENDIX A - SPECIFIC ITEMS AFFECTING NET (LOSS) INCOME          
          (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) income 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 (loss) income 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           
                                    ----------------------------------------
                                       June 30, 2014       June 30, 2013    
                                    ----------------------------------------
                                        (unaudited)         (unaudited)     
                                    ----------------------------------------
                                                $ Per               $ Per   
                                        $      Share(1)     $      Share(1) 
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Net income (loss) - GAAP basis          4,589     $0.05    (5,724)   ($0.07)
----------------------------------------------------------------------------
 
Add (subtract) specific items                                               
 affecting net income:                                                      
  Unrealized loss (gain) on                                                 
   derivative instruments (2)           1,116     $0.01    (5,276)   ($0.06)
  Loss provision on investment in                                           
   term loans (3)                           -         -     4,511     $0.05 
  Gain on sale of vessels (4)          (9,955)   ($0.11)        -         - 
  Other (5)                               134         -       140         - 
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Total adjustments                      (8,705)   ($0.10)     (625)   ($0.01)
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Adjusted net loss attributable to                                           
 shareholders of Teekay Tankers        (4,116)   ($0.05)   (6,349)   ($0.08)
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                                                Six Months Ended            
                                    ----------------------------------------
                                       June 30, 2014       June 30, 2013    
                                    ----------------------------------------
                                        (unaudited)         (unaudited)     
                                    ----------------------------------------
                                                $ Per               $ Per   
                                        $      Share(1)     $      Share(1) 
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Net income (loss) - GAAP basis         31,021     $0.37    (7,677)   ($0.09)
----------------------------------------------------------------------------
 
(Subtract) add specific items                                               
 affecting net income:                                                      
  Unrealized gain on derivative                                             
   instruments (2)                     (2,975)   ($0.04)   (6,907)   ($0.08)
  (Gain) loss on sale of vessels (4)   (9,955)   ($0.12)       71         - 
  Fair value on initial recognition                                         
   of stock purchase warrants (6)      (3,420)   ($0.04)        -         - 
  Dilution gain on equity accounted                                         
   investment (7)                      (2,054)   ($0.02)        -         - 
  Loss provision on investment in                                           
   term loans (3)                           -         -     4,511     $0.05 
  Other (5)                               140         -       140         - 
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Total adjustments                     (18,264)   ($0.22)   (2,185)   ($0.03)
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Adjusted net income (loss)                                                  
 attributable to shareholders of                                            
 Teekay Tankers                        12,757     $0.15    (9,862)   ($0.12)
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(1) Fully diluted per share amounts.                                        
(2) 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, including unrealized gains on losses on        
    interest rate swaps and the TIL stock purchase warrant.                 
(3) In 2010, the Company invested in two term loans (Loans) secured by two  
    2010-built VLCC vessels. The borrowers under the Loans were in default  
    on their interest payment obligations since the first quarter of 2013,  
    and subsequently, in default of the repayment of the loan principal from
    the loan maturity date in July 2013. In late-March 2014, the Company    
    took full ownership of the vessels held as collateral in satisfaction of
    the Loans and accrued interest and recorded the vessels at their fair   
    value at that date.                                                     
(4) In early May 2014, the Company sold to TIL two wholly-owned             
    subsidiaries, each of which owns one VLCC, for the aggregate proceeds of
    $154.0 million plus related working capital on closing of $1.7 million. 
    The Company recognized a $10.0 million gain on this transaction.        
(5) The amount recorded for the three and six months ended June 30, 2014    
    relates to foreign exchange gains (losses) and a 50-percent portion of  
    an unrealized derivative instrument loss recorded by the High-Q Joint   
    Venture, through which the Company owns a 50 percent interest in one    
    VLCC vessel.                                                            
(6) Reflects the fair value on the initial recognition of the stock purchase
    warrants issued by TIL to the Company during the three months ended     
    March 31, 2014, which were received in connection with the Company's    
    involvement in the formation of TIL.                                    
(7) Reflects the dilution gain from the share issuance completed as part of 
    TIL's initial public offering in March 2014.                            
 
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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 (CAD) represents net income, plus
depreciation and amortization, unrealized losses from derivatives,
non-cash items, CAD from the equity accounted investments and any
write-offs or other non-recurring items, less unrealized gains from
derivatives, equity income from the equity accounted investments and
other non-cash items.  


 
 
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                                                              Three Months  
                                                                  Ended     
                                                             ---------------
                                                              June 30, 2014 
                                                             ---------------
                                                               (unaudited)  
----------------------------------------------------------------------------
 
  Net income for the period                                           4,589 
 
  Add:                                                                      
    Depreciation and amortization                                    12,425 
    Proportionate share of cash available for distribution              874 
     from equity accounted investments                                      
    Unrealized loss on derivative instruments                         1,116 
    Other                                                               194 
  Less:                                                                     
    Equity income                                                       (15)
    Gain on sale of vessels                                          (9,955)
 
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Cash Available for Distribution                                       9,228 
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Weighted-average number of common shares outstanding for the     83,966,874 
 quarter, diluted                                                           
 
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Cash Available for Distribution per share, diluted (rounded)          $0.11 
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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 are comprised of all expenses relating to certain voyages,
including bunker fuel expenses, port fees, cargo loading and
unloading expenses, canal tolls, agency fees and 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             Six Months Ended    
                ------------------------------------------------------------
                  June 30,   March 31,    June 30,    June 30,    June 30,  
                ------------------------------------------------------------
                    2014        2014        2013        2014        2013    
                ------------------------------------------------------------
                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 
----------------------------------------------------------------------------
Revenues             44,433      61,759      43,492     106,192      88,445 
Voyage expenses      (3,612)     (1,439)     (2,449)     (5,051)     (5,362)
----------------------------------------------------------------------------
Net revenues         40,821      60,320      41,043     101,141      83,083 
----------------------------------------------------------------------------
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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, estimated growth in the world
tanker fleet in 2014 and 2015, estimated growth in global oil demand
and crude oil tanker demand in 2014, and tanker fleet utilization and
spot tanker rates in 2014 and 2015; the Company's financial position
and ability to take advantage of growth opportunities in an expected
future tanker market recovery; the Company's plans regarding
increased spot market exposure; the Company's fixed-rate coverage for
the next 12 months; and the expected effects of the Company's
acquisition of a 50 percent interest in Teekay Operations. 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 and deliveries 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 financial markets; increases in the Company's expenses,
including any dry docking expenses and associated off-hire days;
failure to realize expected benefits of the acquisition of an
interest in Teekay 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, 2013. 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.
Ryan Hamilton
Investor Relations Enquiries
+1 (604) 844-6654
www.teekaytankers.com
 
 
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