November 25, 2008
HAMILTON, BERMUDA–(Marketwire – Nov. 25, 2008) – Highlights – Teekay Corporation has substantially completed its previously announced financial restatement. – As anticipated, there is no impact from any restatement adjustments on the Company’s actual cash flows or liquidity in any period. – All restatement adjustments are non-cash in nature and do not affect the economics of the Company. – The Company will host a conference call on Tuesday, November 25, 2008 to discuss its preliminary restated results and key elements of its financial position and outlook. Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported preliminary results for its previously announced financial restatement, including results for fiscal years 2003 through 2007 and the first and second quarters of 2008, to adjust for: – its accounting treatment for certain derivative transactions under the Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging (SFAS 133), as more fully discussed below under “Restatement for Accounting under SFAS 133”; and – its financial statement presentation for the Company’s interests in the RasGas joint ventures, whereby certain assets and liabilities have been grossed-up for accounting presentation purposes, as more fully discussed below under “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other.” In addition, the Company is currently finalizing the review of an outstanding item pertaining to the timing of the expense recognition relating to the Company’s long-term incentive program. As such, all restated results included in this release, including results for fiscal years 2003 through 2007 and the first and second quarters of 2008, should be considered preliminary, subject to finalization of the review of the Company’s long-term incentive program and completion of Ernst & Young LLP’s procedures associated with the Company’s restated financial statements. Any adjustments relating to expense accruals related to the Company’s long-term incentive program will be non-cash in nature and will not impact the total cost of the program. “It is important to emphasize that adjustments to the Company’s preliminary reported net income as a result of these restatements are due to changes in the Company’s accounting treatment only and have no impact on the Company’s actual cash flows,” stated Vince Lok, Teekay Corporation’s Chief Financial Officer. “Any adjustments to net income as a result of the change in the Company’s hedge accounting are exclusively due to unrealized gains or losses from the change in the mark-to-market value of our derivative instruments at the end of each reporting period, which have no cash impact. The change in the Company’s hedge accounting treatment does not affect the economics of our hedging transactions.” Mr. Lok continued, “In addition, the gross-up of assets and liabilities related to the Company’s RasGas joint venture interests, which came into scope as a result of the Company’s detailed and thorough restatement audit, does not impact stockholders’ equity and does not result in any change to the Company’s net exposure in these joint ventures.” A summary of financial information reflecting the preliminary restatement adjustments for the three and six months ended June 30, 2008 and 2007 is presented below. Appendix C to this release provides a summary of the impact of the preliminary restatements on reported net income for the fiscal years ended December 31, 2003 through 2007. Please see “Information on SEC Filings” below for information about the Company’s upcoming filings with the U.S. Securities and Exchange Commission (SEC) relating to the restatements. Summary of Preliminary Restated Second Quarter 2008 Results The tables below summarize the impact of the preliminary restatements on previously reported net income, and net income excluding specific items which are detailed in Appendix A(1) to this release, for the three and six months ended June 30, 2008 and 2007. The restatement adjustments are all non-cash in nature and, thus, have no impact on net income excluding the specific items in Appendix A(1). Details of the preliminary restatement adjustments for each of the three and six month periods ended June 30, 2008 and 2007 are included in the summary financial statements provided in this release. /T/ ————————————————————————— Three Months Ended June 30, 2008(2) Adjustments Gross-Up As As Derivative Presenta- Prelimin- Previously Instru- tion and arily (in thousands Reported ments(3) Other(4) Restated of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———- Net Income 104,467 75,191 2,903 182,561 Appendix A Items(1) (27,390) (75,191) (2,903) (105,484) ————————————————————————— Net Income excluding Appendix A Items 77,077 – – 77,077 ————————————————————————— ————————————————————————— Three Months Ended June 30, 2007(2) Adjustments Gross-Up As As Derivative Presenta- Prelimin- Previously Instru- tion and arily (in thousands Reported ments(3) Other(4) Restated of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———- Net Income 78,411 90,426 154 168,991 Appendix A Items (1) (10,752) (90,426) (154) (101,332) ————————————————————————— Net Income excluding Appendix A Items 67,659 – – 67,659 ————————————————————————— /T/ For the three months ended June 30, 2008, the Company now preliminarily reports net income of $182.6 million, (or $2.49 per share), compared to net income of $169.0 million, (or $2.24 per share), for the same period last year. The results for the three months ended June 30, 2008 and 2007 include a number of specific items which have the net effect of increasing net income by $105.5 million (or $1.44 per share) and $101.3 million (or $1.34 per share), respectively, as detailed in Appendix A to this release. Net revenues(5) for the second quarter of 2008 increased to $579.9 million from $443.2 million for the same period in 2007, and income from vessel operations decreased to $97.6 million from $127.0 million for such periods. (1) Appendix A to this release lists specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company’s financial results. (2) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (3) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (4) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (5) Net revenues represents revenues less voyage expenses. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s web site at www.teekay.com 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). /T/ ————————————————————————— Six Months Ended June 30, 2008(1) Adjustments Gross-Up As As Derivative Presenta- Prelimin- Previously Instru- tion and arily (in thousands Reported ments(2) Other(3) Restated of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———- Net Income 119,645 (46,000) 2,270 75,915 Appendix A Items(4) 18,177 46,000 (2,270) 61,907 ————————————————————————— Net Income excluding Appendix A Items 137,822 – – 137,822 ————————————————————————— Six Months Ended June 30, 2007(1) Adjustments Gross-Up As As Derivative Presenta- Prelimin- Previously Instru- tion and arily (in thousands Reported ments(2) Other(3) Restated of U.S. dollars) (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———- Net Income 154,786 102,110 (864) 256,032 Appendix A Items(4) (3,383) (102,110) 864 (104,629) ————————————————————————— Net Income excluding Appendix A Items 151,403 – – 151,403 ————————————————————————— /T/ Preliminary net income for the six months ended June 30, 2008 is now $75.9 million, (or $1.03 per share), compared to $256.0 million, (or $3.42 per share), for the same period last year. The results for the six months ended June 30, 2008 and 2007 include a number of specific items which have the net effect of decreasing net income by $61.9 million (or $0.85 per share) and increasing net income by $104.6 million (or $1.40 per share), respectively, as detailed in Appendix A to this release. Net revenues(5) for the six months ended June 30, 2008 increased to $1.2 billion from $904.0 million for the same period in 2007, and income from vessel operations decreased to $219.1 million from $258.0 million for the such periods. Since the preliminary restatement adjustments are all non-cash in nature, they have no impact on the Company’s cash dividends. On October 7, 2008, the Company declared a 15 percent increase to its quarterly cash dividend to $0.31625 per share for the three months ended September 30, 2008. The dividend was paid on October 31, 2008, to all shareholders of record on October 17, 2008. Further Information Regarding Restatement Items Restatement for Accounting under SFAS 133 On August 7, 2008, the Company announced that it would restate its historical financial statements to adjust its accounting treatment for certain derivative transactions under SFAS 133. This restatement adjusts for certain interest rate swap agreements, foreign exchange forward contracts, freight forward agreements and synthetic time charters that did not qualify for hedge accounting treatment under SFAS 133 as aspects of the Company’s hedge documentation did not meet the strict technical requirements of the standard. (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Appendix A to this release lists specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company’s financial results. (5) Net revenues represents revenues less voyage expenses. Net revenues is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s web site at www.teekay.com 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). Accordingly, the Company has now recognized changes in the fair value of these derivatives through the statement of income (loss) rather than directly to stockholders’ equity on the balance sheet. This restatement, which is non-cash in nature, has resulted in adjustments to Teekay’s previously reported net income, but does not affect the economics of any hedging transactions nor the Company’s actual cash flows or liquidity. The Company believes that the applicable derivative transactions were consistent with its risk management policies and that its overall hedging strategy continues to be sound. The Company has decided to discontinue the use of hedge accounting for its derivative instruments, except for certain foreign currency forward contracts. As a result, the unrealized gains and losses due to the change in the fair values of its non-designated derivative instruments will be reflected as increases or decreases to the Company’s net income going forward. This change will not impact the economics of these hedging transactions nor the Company’s actual cash flows or liquidity in any future period. Restatement for Gross-up Presentation of RasGas Joint Ventures and Other Subsequent to the release of its preliminary second quarter financial results in August 2008, the Company reviewed and revised its financial statement presentation of debt and interest rate swap agreements related to its joint venture interests in the three RasGas II and four RasGas 3 LNG carriers. As a result, certain of the Company’s assets and liabilities have been grossed up for accounting presentation purposes. These adjustments, which do not affect the Company’s net income, net cash flows, liquidity or stockholders’ equity in any period, are described below. All of the RasGas II and RasGas 3 LNG carriers have now been delivered and are currently operating under long-term, fixed-rate contracts. In January 2006, the Company entered into a sale and 30-year leaseback arrangement pertaining to shipbuilding contracts for its 70 percent interest in the three RasGas II LNG carriers. In accordance with Emerging Issues Task Force Issue 97-10, The Effect of Lessee Involvement in Asset Construction, the Company has now recorded on its December 31, 2006 balance sheet the accumulated construction cost of these vessels and related capital lease obligations for the period subsequent to the RasGas II sale-leaseback transaction as the Company retained certain construction period risks. This adjustment does not impact the accounting treatment for these vessels in any period following their delivery in the first quarter of 2007. The Company has restated its consolidated balance sheet as at December 31, 2006 to record the accumulated cost of approximately $295 million for these vessels under construction, and related capital lease obligations. Through a wholly-owned subsidiary, the Company owns a 40 percent interest in the four RasGas 3 LNG carriers. The joint venture partner, a wholly-owned subsidiary of Qatar Gas Transport Company, owns the remaining 60 percent interest. Both wholly-owned subsidiaries are joint and several co-borrowers with respect to the RasGas 3 term loan and related interest rate swap agreements. Previously, the Company recorded 40 percent of the RasGas 3 term loan and interest rate swap agreements in its financial statements. As the Company is a joint and several borrower, it has now made adjustments to its balance sheet to reflect 100 percent of the RasGas 3 term loan and interest rate swap agreements, as well as offsetting increases in assets, for the fourth quarter of 2006 through the second quarter of 2008. The Company has also made an adjustment to its statement of income to reflect 100 percent of the interest expense on the RasGas 3 term loan with an offsetting amount to interest income from its loan to the joint venture. These adjustments do not result in any increase to the Company’s net exposure in these joint ventures. The Company has also restated certain other items primarily relating to amounts attributable to minority interests. Information on SEC Filings More detailed financial information relating to the restatements will be included in the amended Form 20-F/A for the year ended December 31, 2007 (certain financial information will be included for annual fiscal periods from 2003 through 2007), in the amended Form 6-K/A for the quarter ended March 31, 2008 and in the Form 6-K for the quarter ended June 30, 2008, which the Company will file with or furnish to, as applicable, the SEC and make available on its website at www.teekay.com once the final restatement has been completed. For a summary of the impact of the preliminary restatements on reported net income for the fiscal years ended December 31, 2003 through 2007, please refer to Appendix C of this release. About Teekay Teekay Corporation transports more than 10 percent of the world’s seaborne oil, has built a significant presence in the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE:TGP), is further growing its operations in the offshore oil production, storage and transportation sector through its publicly-listed subsidiary, Teekay Offshore Partners L.P. (NYSE:TOO), and continues to expand its conventional tanker business through its publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE:TNK). With a fleet of approximately 190 vessels, offices in 22 countries and 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay’s reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company. Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”. Conference Call The Company plans to host a conference call at 11:00 a.m. ET on Tuesday, November 25, 2008, to discuss the Company’s preliminary restated results. In addition, the Company will take the opportunity to discuss key elements of its financial position and outlook. All shareholders and interested parties are invited to listen to the live conference call at www.teekay.com or by dialing (866) 322-1159, or (416) 640-3404 if outside North America, and quoting confirmation code 1428377. The Company plans to make available a recording of the conference call until midnight December 2, 2008 by dialing (888) 203-1112 or (647) 436-0148, and entering access code 1428377, or via the Company’s web site until December 24, 2008. An investor presentation to accompany this conference call will be made available on the Company’s web site at www.teekay.com prior to the start of the call. /T/ ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1) (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Three Months Ended June 30, 2008 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– REVENUES(4) 790,530 (21,131) – 769,399 ————————————————————————— OPERATING EXPENSES(5) Voyage expenses(6) 190,859 (1,344) – 189,515 Vessel operating expenses 158,948 522 – 159,470 Time-charter hire expense 142,702 (20) – 142,682 Depreciation and amortization 106,700 – – 106,700 General and administrative 69,899 1,841 – 71,740 Gain on sale of vessels and equipment (2,925) – – (2,925) Restructuring charge 4,617 – – 4,617 ————————————————————————— Total operating expenses 670,800 999 – 671,799 ————————————————————————— Income from vessel operations 119,730 (22,130) – 97,600 ————————————————————————— OTHER ITEMS Interest (expense) gain(7) (25,398) 143,691 (4,331) 113,962 Interest income (loss)(7) 16,703 (23,183) 4,331 (2,149) Income tax recovery (expense) 10,160 (559) 1,600 11,201 Equity loss from joint ventures (2,063) – – (2,063) Foreign currency exchange gain (loss)(5) 958 (2,765) – (1,807) Minority interest (expense) income (20,951) (19,174) 1,303 (38,822) Other – net 5,328 (689) 4,639 ————————————————————————— Total other items (15,263) 97,321 2,903 84,961 ————————————————————————— Net income 104,467 75,191 2,903 182,561 ————————————————————————— ————————————————————————— Earnings per common share – Basic $1.44 $2.52 – Diluted $1.43 $2.49 ————————————————————————— ————————————————————————— Weighted average number of common shares outstanding: – Basic 72,377,684 72,377,684 – Diluted 73,279,213 73,279,213 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Revenues have been restated to reflect the unrealized loss due to changes in the mark-to-market value of non-designated freight forward agreements (FFAs) and synthetic time charters (STCs) that do not qualify as effective hedges for accounting purposes. FFAs and STCs are agreements put in place to economically hedge a portion of the Company’s exposure to changes in spot tanker charter rates. (5) Vessel operating expenses, time-charter hire expense, general and administrative and foreign currency exchange gain (loss) have been restated to reflect the unrealized gains or losses due to changes in the mark-to-market value of non-designated foreign exchange forward contracts that do not qualify as effective hedges for accounting purposes. (6) Voyage expenses have been restated to reflect the unrealized gain due to changes in the mark-to-market value of non-designated bunker fuel swap contracts that do not qualify as effective hedges for accounting purposes. Bunker fuel swap contracts are used as economic hedges to protect against changes in forecasted bunker fuel costs for certain time-chartered-out vessels and for vessels servicing certain contracts of affreightment. (7) Adjustments to interest (expense) gain and interest income (loss) reflect the unrealized gains and losses from the change in fair value of certain interest rate swap agreements that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME (LOSS)(1) (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Three Months Ended March 31, 2008 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– REVENUES(4) 736,391 6,981 – 743,372 ————————————————————————— OPERATING EXPENSES(5) Voyage expenses(6) 168,723 738 – 169,461 Vessel operating expenses 145,443 (2,394) – 143,049 Time-charter hire expense 144,921 (437) – 144,484 Depreciation and amortization 97,707 – – 97,707 General and administrative 67,671 (1,515) – 66,156 Gain on sale of vessels and equipment (496) – – (496) Restructuring charge 1,500 – – 1,500 ————————————————————————— Total operating expenses 625,469 (3,608) – 621,861 ————————————————————————— Income from vessel operations 110,922 10,589 – 121,511 ————————————————————————— OTHER ITEMS Interest expense(7) (87,188) (190,429) (4,631) (282,248) Interest income(7) 18,359 37,619 4,631 60,609 Income tax recovery (expense) (2,726) 243 – (2,483) Equity loss from joint ventures (3,609) – – (3,609) Foreign currency exchange loss(5) (29,483) (2,509) – (31,992) Minority interest (expense) income 3,472 23,721 (633) 26,560 Other – net 5,431 (425) – 5,006 ————————————————————————— Total other items (95,744) (131,780) (633) (228,157) ————————————————————————— Net income (loss) 15,178 (121,191) (633) (106,646) ————————————————————————— ————————————————————————— Earnings (loss) per common share – Basic $0.21 ($1.47) – Diluted $0.21 ($1.47) ————————————————————————— ————————————————————————— Weighted average number of common shares outstanding: – Basic 72,644,397 72,644,397 – Diluted 73,435,167 72,644,397 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Revenues have been restated to reflect the unrealized gain due to changes in the mark-to-market value of non-designated freight forward agreements (FFAs) and synthetic time charters (STCs) that do not qualify as effective hedges for accounting purposes. FFAs and STCs are agreements put in place to economically hedge a portion of the Company’s exposure to changes in spot tanker charter rates. (5) Vessel operating expenses, time-charter hire expense, general and administrative and foreign currency exchange loss have been restated to reflect the unrealized gains or losses due to changes in the mark-to-market value of non-designated foreign exchange forward contracts that do not qualify as effective hedges for accounting purposes. (6) Voyage expenses have been restated to reflect the unrealized loss due to changes in the mark-to-market value of non-designated bunker fuel swap contracts that do not qualify as effective hedges for accounting purposes. Bunker fuel swap contracts are used as economic hedges to protect against changes in forecasted bunker fuel costs for certain time-chartered-out vessels and for vessels servicing certain contracts of affreightment. (7) Adjustments to interest expense and interest income reflect the unrealized gains and losses from the change in fair value of certain interest rate swap agreements that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1) (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Three Months Ended June 30, 2007 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– REVENUES(4) 566,127 (391) 565,736 ————————————————————————— OPERATING EXPENSES(5) Voyage expenses(6) 123,554 (1,046) – 122,508 Vessel operating expenses 108,851 (4,948) – 103,903 Time-charter hire expense 101,247 (289) – 100,958 Depreciation and amortization 68,095 – – 68,095 General and administrative 58,358 (3,467) – 54,891 Gain on sale of vessels and equipment (11,613) – – (11,613) Restructuring charge – – – – ————————————————————————— Total operating expenses 448,492 (9,750) – 438,742 ————————————————————————— Income from vessel operations 117,635 9,359 – 126,994 ————————————————————————— OTHER ITEMS Interest (expense) gain(7) (64,158) 137,193 (4,079) 68,956 Interest income (loss)(7) 23,390 (27,047) 4,079 422 Income tax recovery (expense) (287) (558) – (845) Equity loss from joint ventures (2,092) – – (2,092) Foreign currency exchange gain (loss)(5) 1,214 (9,849) – (8,635) Minority interest(expense) income (6,341) (17,889) 154 (24,076) Other – net 9,050 (783) – 8,267 ————————————————————————— Total other items (39,224) 81,067 154 41,997 ————————————————————————— Net income (loss) 78,411 90,426 154 168,991 ————————————————————————— ————————————————————————— Earnings per common share – Basic $1.06 $2.29 – Diluted $1.04 $2.24 ————————————————————————— ————————————————————————— Weighted average number of common shares outstanding: – Basic 73,843,784 73,843,784 – Diluted 75,310,567 75,310,567 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Revenues have been restated to reflect the unrealized loss due to changes in the mark-to-market value of non-designated freight forward agreements (FFAs) that do not qualify as effective hedges for accounting purposes. FFAs are agreements put in place to economically hedge a portion of the Company’s exposure to changes in spot tanker charter rates. (5) Vessel operating expenses, time-charter hire expense, general and administrative and foreign currency exchange gain (loss) have been restated to reflect the unrealized gains or losses due to changes in the mark-to-market value of non-designated foreign exchange forward contracts that do not qualify as effective hedges for accounting purposes. (6) Voyage expenses have been restated to reflect the unrealized gain due to changes in the mark-to-market value of non-designated bunker fuel swap contracts that do not qualify as effective hedges for accounting purposes. Bunker fuel swap contracts are used as economic hedges to protect against changes in forecasted bunker fuel costs for certain time-chartered-out vessels and for vessels servicing certain contracts of affreightment. (7) Adjustments to interest (expense) gain and interest income (loss) reflect the unrealized gains and losses from the change in fair value of certain interest rate swap agreements that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1) (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Six Months Ended June 30, 2008 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– REVENUES(4) 1,526,921 (14,150) – 1,512,771 ————————————————————————— OPERATING EXPENSES(5) Voyage expenses(6) 359,582 (606) – 358,976 Vessel operating expenses 304,391 (1,872) – 302,519 Time-charter hire expense 287,623 (457) – 287,166 Depreciation and amortization 204,407 – – 204,407 General and administrative 137,570 326 – 137,896 Gain on sale of vessels and equipment (3,421) – – (3,421) Restructuring charge 6,117 – – 6,117 ————————————————————————— Total operating expenses 1,296,269 (2,609) – 1,293,660 ————————————————————————— Income from vessel operations 230,652 (11,541) – 219,111 ————————————————————————— OTHER ITEMS Interest expense(7) (112,586) (46,738) (8,962) (168,286) Interest income(7) 35,062 14,436 8,962 58,460 Income tax recovery (expense) 7,434 (316) 1,600 8,718 Equity loss from joint ventures (5,672) – – (5,672) Foreign currency exchange loss(5) (28,525) (5,274) – (33,799) Minority interest (expense) income (17,479) 4,547 670 (12,262) Other – net 10,759 (1,114) – 9,645 ————————————————————————— Total other items (111,007) (34,459) 2,270 (143,196) ————————————————————————— Net income 119,645 (46,000) 2,270 75,915 ————————————————————————— ————————————————————————— Earnings per common share – Basic $1.65 $1.05 – Diluted $1.63 $1.03 ————————————————————————— ————————————————————————— Weighted average number of common shares outstanding: – Basic 72,511,041 72,511,041 – Diluted 73,357,190 73,357,190 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Revenues have been restated to reflect the unrealized loss due to changes in the mark-to-market value of non-designated freight forward agreements (FFAs) and synthetic time charters (STCs) that do not qualify as effective hedges for accounting purposes. FFAs and STCs are agreements put in place to economically hedge a portion of the Company’s exposure to changes in spot tanker charter rates. (5) Vessel operating expenses, time-charter hire expense, general and administrative and foreign currency exchange loss have been restated to reflect the unrealized gains or losses due to changes in the mark-to-market value of non-designated foreign exchange forward contracts that do not qualify as effective hedges for accounting purposes. (6) Voyage expenses have been restated to reflect the unrealized gain due to changes in the mark-to-market value of non-designated bunker fuel swap contracts that do not qualify as effective hedges for accounting purposes. Bunker fuel swap contracts are used as economic hedges to protect against changes in forecasted bunker fuel costs for certain time-chartered-out vessels and for vessels servicing certain contracts of affreightment. (7) Adjustments to interest expense and interest income reflect the unrealized gains and losses from the change in fair value of certain interest rate swap agreements that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF INCOME(1) (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Six Months Ended June 30, 2007 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– REVENUES(4) 1,144,522 (538) – 1,143,984 ————————————————————————— OPERATING EXPENSES(5) Voyage expenses(6) 242,493 (2,506) – 239,987 Vessel operating expenses 206,292 (7,199) – 199,093 Time-charter hire expense 199,748 (433) – 199,315 Depreciation and amortization 147,358 – – 147,358 General and administrative 117,155 (5,342) – 111,813 Gain on sale of vessels and equipment (11,613) – – (11,613) Restructuring charge – – – – ————————————————————————— Total operating expenses 901,433 (15,480) – 885,953 ————————————————————————— Income from vessel operations 243,089 14,942 – 258,031 ————————————————————————— OTHER ITEMS Interest (expense) gain(7) (124,541) 144,518 (6,926) 13,051 Interest income (loss)(7) 39,558 (31,108) 6,926 15,376 Income tax recovery (expense) 3,795 (754) – 3,041 Equity loss from joint ventures (3,687) – – (3,687) Foreign currency exchange loss(5) (4,674) (5,637) – (10,311) Minority interest (expense) income (11,981) (18,986) (864) (31,831) Other – net 13,227 (865) – 12,362 ————————————————————————— Total other items (88,303) 87,168 (864) (1,999) ————————————————————————— Net income 154,786 102,110 (864) 256,032 ————————————————————————— ————————————————————————— Earnings per common share – Basic $2.11 $3.48 – Diluted $2.07 $3.42 ————————————————————————— ————————————————————————— Weighted average number of common shares outstanding: – Basic 73,488,668 73,488,668 – Diluted 74,929,991 74,929,991 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (4) Revenues have been restated to reflect the unrealized loss due to changes in the mark-to-market value of non-designated freight forward agreements (FFAs) that do not qualify as effective hedges for accounting purposes. FFAs are agreements put in place to economically hedge a portion of the Company’s exposure to changes in spot tanker charter rates. (5) Vessel operating expenses, time-charter hire expense, general and administrative and foreign currency exchange loss have been restated to reflect the unrealized gains or losses due to changes in the mark-to-market value of non-designated foreign exchange forward contracts that do not qualify as effective hedges for accounting purposes. (6) Voyage expenses have been restated to reflect the unrealized gain due to changes in the mark-to-market value of non-designated bunker fuel swap contracts that do not qualify as effective hedges for accounting purposes. Bunker fuel swap contracts are used as economic hedges to protect against changes in forecasted bunker fuel costs for certain time-chartered-out vessels and for vessels servicing certain contracts of affreightment. (7) Adjustments to interest (expense) gain and interest income (loss) reflect the unrealized gains and losses from the change in fair value of certain interest rate swap agreements that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED BALANCE SHEET(1) (in thousands of U.S. dollars) ————————————————————————— As at June 30, 2008 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– ASSETS Cash and cash equivalents 498,933 – – 498,933 Other current assets 538,833 – 22,673 561,506 Restricted cash – current 53,067 – – 53,067 Vessels held for sale 18,203 – – 18,203 Restricted cash – long-term 661,758 – – 661,758 Vessels and equipment 6,664,153 – – 6,664,153 Advances on newbuilding contracts 693,292 – – 693,292 Other assets 893,160 – 465,209 1,358,369 Intangible assets 256,070 – – 256,070 Goodwill 491,911 – – 491,911 ————————————————————————— Total assets 10,769,380 – 487,882 11,257,262 ————————————————————————— ————————————————————————— LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities 438,867 – 3,401 442,268 Current portion of long-term debt 426,189 – (94,547) 331,642 Long-term debt 5,708,236 – 579,434 6,287,670 Other long-term liabilities / In process revenue contracts 792,472 – 5,903 798,375 Minority interest 588,916 – 83,246 672,162 Stockholders’ equity 2,814,700 – (89,555) 2,725,145 ————————————————————————— Total liabilities and stockholders’ equity 10,769,380 – 487,882 11,257,262 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED BALANCE SHEET(1) (in thousands of U.S. dollars) ————————————————————————— As at December 31, 2007 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– ASSETS Cash and cash equivalents 442,673 – – 442,673 Other current assets 461,546 – 7,512 469,058 Restricted cash – current 33,479 – – 33,479 Vessels held for sale 79,689 – – 79,689 Restricted cash – long-term 652,717 – – 652,717 Vessels and equipment 6,229,809 – – 6,229,809 Advances on newbuilding contracts 617,066 – – 617,066 Other assets 848,632 – 354,524 1,203,156 Intangible assets 259,952 – – 259,952 Goodwill 434,590 – – 434,590 ————————————————————————— Total assets 10,060,153 – 362,036 10,422,189 ————————————————————————— ————————————————————————— LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities 364,635 – – 364,635 Current portion of long-term debt 474,873 – 7,512 482,385 Long-term debt 5,285,397 – 353,082 5,638,479 Other long-term liabilities / In process revenue contracts 719,884 – 17,709 737,593 Minority interest 527,494 – 18,814 546,308 Stockholders’ equity 2,687,870 – (35,081) 2,652,789 ————————————————————————— Total liabilities and stockholders’ equity 10,060,153 – 362,036 10,422,189 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. ————————————————————————— TEEKAY CORPORATION SUMMARY PRELIMINARY RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS(1) (in thousands of U.S. dollars) ————————————————————————— Six Months Ended June 30, 2008 Adjustments Gross-Up As Derivative Presenta- Previously Instru- tion and As Reported ments(2) Other(3) Restated (unaudited) (unaudited) (unaudited) (unaudited) ———- ———- ———- ———– Cash and cash equivalents provided by (used for) OPERATING ACTIVITIES ————————————————————————— Net operating cash flow 164,420 – – 164,420 ————————————————————————— FINANCING ACTIVITIES Net proceeds from long-term debt 1,155,095 – 124,293 1,279,388 Scheduled repayments of long-term debt (198,320) – – (198,320) Prepayments of long-term debt (645,321) – – (645,321) Increase in restricted cash (11,503) – – (11,503) Repurchase of common stock (20,512) – – (20,512) Net proceeds from the public offering of Teekay LNG 148,345 – – 148,345 Net proceeds from the public offering of Teekay Offshore 134,265 – – 134,265 Other (36,188) – – (36,188) ————————————————————————— Net financing cash flow 525,861 – 124,293 650,154 ————————————————————————— INVESTING ACTIVITIES Expenditures for vessels and equipment (410,495) – – (410,495) Proceeds from sale of vessels and equipment 79,224 – – 79,224 Purchase of marketable securities (542) – – (542) Proceeds from sale of marketable securities 11,058 – – 11,058 Purchase of Teekay Petrojarl ASA (257,142) – – (257,142) Purchase of 50% of OMI Corporation – – – – Loan to joint ventures (87,198) – (124,293) (211,491) Other 31,074 – – 31,074 ————————————————————————– Net investing cash flow (634,021) – (124,293) (758,314) ————————————————————————– Increase in cash and cash equivalents 56,260 – – 56,260 Cash and cash equivalents, beginning of the period 442,673 – – 442,673 ————————————————————————– Cash and cash equivalents, end of the period 498,933 – – 498,933 ————————————————————————– ————————————————————————– (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. ————————————————————————— TEEKAY CORPORATION APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME (PRELIMINARY RESTATED) (1)(2) (in thousands of U.S. dollars, except per share data) Set forth below are some of the significant items of income and expense that affected the Company’s net income for the three and six months ended June 30, 2008, all of which items are typically excluded by securities analysts in their published estimates of the Company’s financial results: ————————————————————————— ————————————————————————— Three Months Ended Six Months Ended June 30, 2008 June 30, 2008 (unaudited) (unaudited) $ Per $ Per $ Share $ Share ————————————————————————— Gain on sale of vessels and equipment 2,925 0.04 3,421 0.05 Foreign currency exchange losses(3) (2,764) (0.04) (36,987) (0.50) Deferred income tax expense on unrealized foreign exchange gains(4) (284) – (8,680) (0.12) Unrealized gains from derivative instruments(5) 48,092 0.66 36,637 0.50 Net effect from non-cash changes in purchase price allocation for the acquisition of Teekay Petrojarl ASA(6) (6,398) (0.09) (6,398) (0.09) Net effect from non-cash changes in purchase price allocation for the acquisition of 50 percent of OMI Corporation(7) (3,084) (0.04) (7,028) (0.10) Restructuring charge(8) (4,617) (0.06) (4,617) (0.06) Other(9) (712) (0.01) (4,810) (0.07) Minority owners’ share of items above(10) (5,768) (0.08) 10,285 0.14 ————————————————————————— Total as previously reported 27,390 0.38 (18,177) (0.25) Preliminary restatement adjustments: Foreign currency exchange gains(5) 957 0.01 1,648 0.02 Unrealized gains (losses) from derivative instruments(5) 93,408 1.27 (52,195) (0.71) Other(9) 1,600 0.02 1,600 0.02 Minority owners’ share of items above(10) (17,871) (0.24) 5,217 0.07 ————————————————————————— Total as preliminarily restated 105,484 1.44 (61,907) (0.85) ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (3) Previously reported foreign currency exchange losses primarily relate to the Company’s debt denominated in Euros and deferred tax liability denominated in Norwegian Kroner. Nearly all of the Company’s foreign currency exchange gains and losses are unrealized and have been included in the amounts in the above table except for $3.7 million and $8.4 million of gains in the three- and six-month periods ended June 30, 2008, respectively, for foreign exchange forward contracts relating to vessel operating expenses and general and administrative expenses not designated as hedges. (4) Portion of deferred income tax related to unrealized foreign exchange losses. (5) Reflects the unrealized gain or loss due to changes in the mark-to-market value of non-designated derivative instruments that do not qualify as effective hedges for accounting purposes. (6) Primarily relates to changes in amortization of in-process revenue contracts as a result of adjustments to the purchase price allocation of Teekay Petrojarl ASA. (7) Primarily relates to changes in amortization of intangible assets as a result of adjustments to the purchase price allocation of OMI Corporation. (8) Restructuring charges relate to the reorganization of certain of the Company’s operational functions. (9) Primarily relates to a change in a non-cash deferred tax balances, settlement of a previous claim against OMI Corporation, and loss on bond repurchases (8.875% Notes due 2011). (10) Primarily relates to minority owners’ share of foreign currency exchange losses and unrealized gains (losses) from derivative instruments. ————————————————————————– TEEKAY CORPORATION APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME (PRELIMINARY RESTATED)(1)(2) (in thousands of U.S. dollars, except per share data) Set forth below are some of the significant items of income and expense that affected the Company’s net income for the three and six months ended June 30, 2007, all of which items are typically excluded by securities analysts in their published estimates of the Company’s financial results: ————————————————————————– Three Months Ended Six Months Ended June 30, 2007 June 30, 2007 (unaudited) (unaudited) $ Per $ Per $ Share $ Share ————————————————————————– Gain on sale of vessels 11,613 0.16 11,613 0.16 Gain on sale of marketable securities 4,836 0.06 4,836 0.06 Foreign currency exchange gains (losses) (3) 1,214 0.02 (4,674) (0.06) Deferred income tax expense on unrealized foreign exchange gains (4) (4,382) (0.06) (7,713) (0.10) Net effect from non-cash changes in purchase price allocation for acquisition of Teekay Petrojarl ASA (5) (4,240) (0.06) (4,240) (0.06) Minority owners’ share of items above (6) 1,711 0.02 3,561 0.05 ————————————————————————– Total as previously reported 10,752 0.14 3,383 0.05 Preliminary restatement adjustments: Foreign currency exchange losses (7) (9,849) (0.13) (5,637) (0.08) Unrealized gains from derivative instruments (7) 118,164 1.57 126,733 1.69 Minority owners’ share of items above (6) (17,735) (0.24) (19,850) (0.26) ————————————————————————– Total as preliminarily restated 101,332 1.34 104,629 1.40 ————————————————————————– ————————————————————————– (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (3) Foreign currency exchange gains (losses) primarily relate to the Company’s debt denominated in Euros and deferred tax liability denominated in Norwegian Kroner. (4) Portion of deferred income tax related to unrealized foreign exchange gains (losses). (5) Primarily relates to changes in amortization of in-process revenue contracts as a result of adjustments to the purchase price allocation of Teekay Petrojarl ASA. (6) Primarily relates to minority owners’ share of foreign currency exchange gains (losses) and unrealized gains (losses) from derivative instruments. (7) Reflects the unrealized gain or loss due to changes in the mark-to-market value of non-designated derivative instruments that do not qualify as effective hedges for accounting purposes. ————————————————————————— TEEKAY CORPORATION APPENDIX B – PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2) SUMMARY BALANCE SHEET AS AT JUNE 30, 2008 (in thousands of U.S. dollars) (unaudited) ————————————————————————— Teekay Consoli- Corp. dation Teekay Teekay Teekay Teekay Stand- Adjust- Offshore LNG Tankers Petrojarl alone ments Total ———————————————————————– ASSETS Cash and cash equiv- alents 113,021 78,811 19,706 44,155 243,240 – 498,933 Other current assets 112,456 40,058 25,655 73,217 328,323 – 579,709 Restricted cash (current & non- current) – 695,128 – 2,745 16,952 – 714,825 Other assets (3) 70,906 867,431 994 (13,055) 432,093 – 1,358,369 Ves- sels and eq- uip- ment 1,751,281 1,810,796 441,135 1,413,694 1,247,247 – 6,664,153 Advan- ces on ves- sels – 322,897 – – 370,395 – 693,292 Equity invest- ment in subsid- iaries – – – – 1,628,137 (1,628,137) – Intan- gibles and good- will 177,436 185,650 – 273,859 111,036 – 747,981 ———————————————————————– TOTAL AS- SETS 2,225,100 4,000,771 487,490 1,794,615 4,377,423 (1,628,137)11,257,262 ———————————————————————– ———————————————————————– LIABILITIES AND EQUITY Accounts payable and accrued lia- bil- ities 73,973 67,537 11,899 78,503 210,356 – 442,268 Current portion of debt and leases 96,988 159,288 3,600 47,100 24,666 – 331,642 Long- term debt and cap- ital lea- ses 1,521,519 2,826,465 317,028 398,900 1,223,758 – 6,287,670 Other long- term lia- bil- ities / in pro- cess revenue con- tracts 111,168 71,018 6,792 420,114 189,283 – 798,375 Min- ority inter- est(4) 31,513 20,288 – 534 4,215 615,612 672,162 Equ- ity 389,939 856,175 148,171 849,464 2,725,145 (2,243,749)2,725,145 ———————————————————————– TOTAL LIA- BIL- ITIES AND EQU- ITY 2,225,100 4,000,771 487,490 1,794,615 4,377,423 (1,628,137)11,257,262 ———————————————————————– ———————————————————————– (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (3) Other assets include equity investments in joint ventures. (4) Minority interest in the Teekay Offshore, Teekay LNG, Teekay Tankers and Teekay Petrojarl columns represent the joint venture partners’ share of the joint venture net assets. Minority interest in the Consolidation Adjustments column represents the public’s share of the net assets of Teekay’s publicly-traded subsidiaries. ————————————————————————— TEEKAY CORPORATION APPENDIX B – PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2) SUMMARY STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2008 (in thousands of U.S. dollars) ————————————————————————— (unaudited) Teekay Consoli- Corp. dation Teekay Teekay Teekay Teekay Stand- Adjust- Offshore LNG Tankers Petrojarl alone ments Total —————————————————————– Voyage revenues 222,282 62,316 35,745 92,104 423,960 (67,008) 769,399 —————————————————————– Voyage expenses 59,811 649 618 – 128,437 – 189,515 Vessel operating expenses 45,506 20,792 7,669 54,039 31,464 – 159,470 Time charter hire expense 32,262 – – 6,718 170,710 (67,008) 142,682 Deprecia- tion and amortiz- ation 35,747 18,872 5,429 22,565 24,087 – 106,700 General and admin- istra- tive 15,684 5,745 1,670 11,234 37,407 – 71,740 Gain on disposal of vessels and equipment – – – – (2,925) – (2,925) Restruc- turing charge – – – – 4,617 – 4,617 —————————————————————– Total operating expenses 189,010 46,058 15,386 94,556 393,797 (67,008) 671,799 —————————————————————– Income from vessel operat- ions 33,272 16,258 20,359 (2,452) 30,163 – 97,600 —————————————————————– Net interest (expense) gain 24,855 34,371 1,979 3,190 47,418 – 111,813 Income tax recovery (expense) 7,542 (8) – – 3,667 – 11,201 Equity income (loss) – (1,627) – – (436) – (2,063) Equity in earnings of subsid- iaries (3) – – – – 101,664 (101,664) – Foreign exchange gain (loss) (1,081) (29) (7) (1,423) 733 – (1,807) Minority interest income (expense) (4) (975) (4,392) – 180 (348) (33,287) (38,822) Other (net) 2,315 1,093 – (784) 2,015 4,639 —————————————————————– Total other income 32,656 29,408 1,972 1,163 154,713 (134,951) 84,961 —————————————————————– —————————————————————– NET INCOME (LOSS) 65,928 45,666 22,331 (1,289) 184,876 (134,951) 182,561 —————————————————————– —————————————————————– —————————————————————– CASH FLOW FROM VESSEL OPERA- TIONS (5) 68,370 44,406 25,788 10,754 76,839 – 226,157 —————————————————————– —————————————————————– (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (3) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries. (4) Minority interest income (expense) in the Teekay Offshore, Teekay LNG, Teekay Tankers and Teekay Petrojarl columns represent the joint venture partners’ share of the net income (loss) of the respective joint ventures. Minority interest income (expense) in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries. (5) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel write-downs/(gain) loss on sale of vessels and unrealized gains or losses relating to derivatives. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s website at www.teekay.com for a reconciliation of this non-GAAP financial measure as used in this release to the most directly comparable GAAP financial measure. ————————————————————————— TEEKAY CORPORATION APPENDIX B – PRELIMINARY RESTATED SUPPLEMENTAL FINANCIAL INFORMATION(1)(2) SUMMARY STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2008 (in thousands of U.S. dollars) ————————————————————————— (unaudited) Teekay Consoli- Corp. dation Teekay Teekay Teekay Teekay Stand- Adjust- Offshore LNG Tankers Petrojarl alone ments Total —————————————————————– Voyage revenues 426,068 125,644 62,416 185,953 834,291 (121,601) 1,512,771 ————————————————————————— Voyage expenses 111,188 944 714 – 246,130 – 358,976 Vessel operating expense 87,437 36,192 13,249 97,562 68,079 – 302,519 Time charter hire expense 65,908 – – 13,712 329,147 (121,601) 287,166 Deprecia- tion and amortiza- tion 68,293 34,944 8,918 40,568 51,684 – 204,407 General and administra- tive 31,002 9,705 2,991 23,958 70,240 – 137,896 Gain on disposal of vessels and equipment – – – – (3,421) – (3,421) Restructuring charge – – – – 6,117 – 6,117 ————————————————————————— Total opera- ting expenses 363,828 81,785 25,872 175,800 767,976 (121,601) 1,293,660 ————————————————————————— Income from vessel opera- tions 62,240 43,859 36,544 10,153 66,315 – 219,111 ————————————————————————— Net interest expense (40,789) (23,541) (5,430) (10,533) (29,533) – (109,826) Income tax recovery (expense) 7,345 (88) – – 1,461 – 8,718 Equity income (loss) – (1,691) – – (3,981) – (5,672) Equity in earnings of subsidiaries (3) – – – – 25,113 (25,113) – Foreign exchange gain (loss) (3,544) (33,920) (13) (11,237) 14,915 – (33,799) Minority interest income (expense) (4) (604) 75 – 180 (704) (11,209) (12,262) Other (net) 4,940 1,092 – (1,031) 4,644 9,645 ————————————————————————— Total other income (32,652) (58,073) (5,443) (22,621) 11,915 (36,322) (143,196) ————————————————————————— ————————————————————————— NET INCOME (LOSS) 29,588 (14,214) 31,101 (12,468) 78,230 (36,322) 75,915 ————————————————————————— ————————————————————————— ————————————————————————— CASH FLOW FROM VESSEL OPERA- TIONS (5) 130,053 90,773 45,462 22,131 126,859 – 415,278 ————————————————————————— ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Please refer to “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. (3) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries. (4) Minority interest income (expense) in the Teekay Offshore, Teekay LNG, Teekay Tankers and Teekay Petrojarl columns represent the joint venture partners’ share of the net income (loss) of the respective joint ventures. Minority interest income (expense) in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries. (5) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel write- downs/(gain) loss on sale of vessels and unrealized gains or losses relating to derivatives. Cash flow from vessel operations is a non-GAAP financial measure used by certain investors to measure the financial performance of shipping companies. Please see the Company’s web site at www.teekay.com for a reconciliation of this non-GAAP financial measure as used in this release to the most directly comparable GAAP financial measure. ————————————————————————— TEEKAY CORPORATION APPENDIX C – SUMMARY OF PRELIMINARY RESTATED FINANCIAL RESULTS(1) (in thousands of U.S. dollars) ————————————————————————— The table below summarizes the impact on the Company’s previously reported net income for fiscal years ended December 31, 2003 through 2007, as a result of the restatements described in this release under “Restatement for Accounting under SFAS 133” and “Restatement for Gross-up Presentation for RasGas Joint Ventures and Other”. ————————————————————————— Net Income ————————————————————————— (in Year Ended December 31, thousands of 2007 2006 2005 2004 2003 US dollars) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) ————————————————————————— As Previously Reported $ 181,251 $262,244 $ 570,900 $ 757,440 $ 177,364 Preliminary Restatement Adjustments: Derivative Instruments (2) (108,733) 47,767 (18,259) (65,709) 9,029 Gross-Up Presentation and Other (3) (4,205) (1,147) – – – ————————————————————————— As Preliminarily Restated $ 68,313 $ 308,864 $ 552,641 $ 691,731 $ 186,393 ————————————————————————— (1) The Company is currently reviewing the accounting for its long-term incentive program. This review may result in additional accrual adjustments which are not reflected in the preliminary results included in this release. (2) Relates to unrealized gains (losses) as a result of the change in fair value of certain derivative instruments. Amounts are net of minority interest. Please refer to “Restatement for Accounting under SFAS 133” included in this release. (3) Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. /T/ FORWARD LOOKING STATEMENTS This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding the amount and timing of the Company’s determination of restated results for prior periods. 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: the extent and nature of any remaining issues to be resolved and the potential for such issues to impede the timely determination of the Company’s restatement of prior period results; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2007. 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.