September 3, 2009
HAMILTON, BERMUDA–(Marketwire – Sept. 3, 2009) – Teekay Corporation (Teekay or the Company) (NYSE:TK) today reported an adjusted net loss attributable to stockholders of Teekay(1) of $21.8 million, or $0.30 per share, for the quarter ended June 30, 2009, compared to adjusted net income of $77.1 million, or $1.05 per share, for the same period of the prior year. Adjusted net income (loss) attributable to stockholders of Teekay excludes a number of specific items which had the net effect of increasing net income by $181.2 million (or $2.49 per share) for the three months ended June 30, 2009 and $106.3 million (or $1.45 per share) for the three months ended June 30, 2008, as detailed in Appendix A to this release. Including these items, the Company reported net income attributable to the stockholders of Teekay, on a GAAP basis, of $159.4 million(2), or $2.19 per share, for the quarter ended June 30, 2009, compared to net income attributable to the stockholders of Teekay, on a GAAP basis, of $183.4 million(2), or $2.50 per share, for the same period of the prior year. Net revenues(3) for the second quarter of 2009 were $469.5 million compared to $621.3 million for the same period of the prior year. (1) Adjusted net income (loss) attributable to stockholders of Teekay 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 information about specific items affecting net income which are typically excluded by securities analysts in their published estimates of the Company’s financial results. (2) Effective January 1, 2009, Teekay adopted Statement of Financial Accounting Standards No. 160 (SFAS 160), “Non-controlling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51.” SFAS 160 amended the accounting and reporting for non-controlling interest, which is now classified as a component of equity. SFAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing non-controlling interests. All other requirements of SFAS 160 are applied prospectively. (3) 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 GAAP. For the six months ended June 30, 2009, the Company reported an adjusted net loss attributable to stockholders of Teekay of $10.9 million, or $0.15 per share, compared to adjusted net income attributable to stockholders of Teekay of $137.8 million, or $1.88 per share, for the same period of the prior year, excluding a number of specific items which had the net effect of increasing net income by $251.7 million (or $3.45 per share) and decreasing net income by $59.5 million (or $0.81 per share), respectively, as detailed in Appendix A to this release. Including these items, the Company reported net income attributable to the stockholders of Teekay, on a GAAP basis, of $240.9 million, or $3.30 per share, compared to net income attributable to the stockholders of Teekay, on a GAAP basis, of $78.3 million, or $1.07 per share, for the same period of the prior year. Net revenues for the six months ended June 30, 2009 were $995.4 million compared to $1.2 billion for the same period of the prior year. On June 4, 2009, the Company declared a cash dividend on its common stock of $0.31625 per share for the quarter ended June 30, 2009. The cash dividend was paid on July 24, 2009, to all shareholders of record on July 10, 2009. “Teekay benefited from its large portfolio of stable, fixed-rate business during the second quarter, allowing us to generate $130 million of cash flow from vessel operations during a quarter of weak spot tanker market rates,” commented Bjorn Moller, Teekay Corporation’s President and Chief Executive Officer. “The combination of our stable cash flows generated from fixed-rate offshore, liquefied gas and conventional tanker businesses, our more than $2 billion in consolidated liquidity and our favorable debt maturity profile contributes towards Teekay’s financial strength.” Mr. Moller continued, “We remain focused on our key priorities which include reducing our exposure to the current weak spot tanker market, improving profitability through cost reductions and contract improvements and reducing leverage at Teekay Parent by executing on our strategy of selling assets to our daughter companies and third parties. Since the end of the first quarter, we have reduced our spot exposure through the redelivery of 12 spot traded in-charter vessels and the sale of four spot traded conventional tankers. We have begun to see significant results from our cost management initiatives through lower overhead and operating expenses in the second quarter, compared to the same period last year. In addition, we have now successfully completed follow-on equity offerings at each of our daughter companies this year raising a combined $238 million of equity capital used to finance dropdown acquisitions. We have recently offered the Petrojarl Varg FPSO to Teekay Offshore and, if accepted, this transaction will result in further significant de-leveraging of Teekay Parent’s balance sheet, and will provide Teekay with further financial flexibility.” Mr. Moller added, “A key strength of our business model lies in our global project management activities and our ability to focus our attention on any given segment of our business where a new project may develop. Over the past decade, our successful project management business has seen us build our fixed-rate cash flow from vessel operations to over $550 million per year. Our ability to deliver value-added solutions to our customers gives us access to profitable, fixed-rate projects throughout the tanker cycle. An excellent example is our purchase this month of a modern product tanker against a specialized charter requirement. Upon completion of modification work, the vessel will commence a 10-year fixed-rate charter to Caltex Australia, a long-standing customer who outsourced its Australian marine operations to us in 1997.” Operating Results The following tables highlight certain financial information for each of Teekay’s four publicly-listed entities: Teekay Offshore Partners L.P. (Teekay Offshore) (NYSE:TOO), Teekay LNG Partners L.P. (Teekay LNG) (NYSE:TGP), Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) and Teekay, excluding results attributed to Teekay Offshore, Teekay LNG and Teekay Tankers, referred to herein as Teekay Parent. A brief description of each entity and an analysis of its respective financial results follows the tables below. Please also refer to the “Fleet List” section below and Appendix B to this release for further details. /T/ —————————————————————————- Three Months Ended June 30, 2009 (unaudited) (in Teekay Teekay thousands Offshore LNG Teekay Teekay of U.S. Partners Partners Tankers Teekay Consolidation Corporation dollars) LP LP Ltd. Parent Adjustments Consolidated —————————————————————————- Net revenues(1) 150,791 79,902 30,491 253,434 (45,070) 469,548 —————————————————————————- Vessel operating expenses(1) 46,936 18,178 7,911 67,504 – 140,529 Time-charter hire expense 29,144 – – 132,377 (45,070) 116,451 Depreciation and amortization 34,588 20,160 7,230 46,214 – 108,192 —————————————————————————- Cash flow from Vessel operations (2)(3) 58,262 52,911 18,694 (181) – 129,686 —————————————————————————- Net debt(4) 1,395,230 1,411,957 289,453 1,082,050 – 4,178,690 —————————————————————————- (1) Commencing in 2009 and applied retroactively, the gains and losses related to non-designated derivative instruments have been reclassified to a separate line item in the Statements of Income and are no longer included in the amounts above. (2) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel/goodwill write-downs, gains or losses on the sale of vessels and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. 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 measure as used in this release to the most directly comparable GAAP financial measure. (3) Excludes the cash flow from vessel operations relating to assets acquired from Teekay Parent for the periods prior to their acquisition by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as those results are included in the historical results for Teekay Parent. (4) Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash. —————————————————————————- Three Months Ended June 30, 2008 (unaudited) —————————————————————————- (in Teekay Teekay thousands Offshore LNG Teekay Teekay of U.S. Partners Partners Tankers Teekay Consolidation Corporation dollars) LP LP Ltd. Parent Adjustments Consolidated —————————————————————————- Net revenues(1) 164,673 70,943 42,126 383,009 (39,434) 621,317 —————————————————————————- Vessel operating expenses(1) 45,768 20,792 8,059 86,325 – 160,944 Time-charter hire expense 32,262 – – 149,874 (39,434) 142,702 Depreciation and amortization 36,447 18,872 6,837 44,544 – 106,700 —————————————————————————- Cash flow from vessel operations (2)(3) 68,552 44,406 25,788 88,451 – 227,197 —————————————————————————- Net debt(4) 1,505,486 2,211,814 300,922 1,387,332 – 5,405,554 —————————————————————————- (1) Commencing in 2009 and applied retroactively, the gains and losses related to non-designated derivative instruments have been reclassified to a separate line item in the Statements of Income and are no longer included in the amounts above. (2) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel/goodwill write-downs, gains or losses on the sale of vessels and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. 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 measure as used in this release to the most directly comparable GAAP financial measure. (3) Excludes the cash flow from vessel operations relating to assets acquired from Teekay Parent for the periods prior to their acquisition by Teekay Offshore, Teekay LNG and Teekay Tankers, respectively, as those results are included in the historical results for Teekay Parent. (4) Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash. Net debt excludes the impact of the dropdown predecessor. /T/ Teekay Offshore Partners L.P. Teekay Offshore is an international provider of marine transportation and storage services to the offshore oil industry. Through its 51 percent ownership interest in Teekay Offshore Operating L.P. (OPCO), Teekay Offshore operates a fleet of 33 shuttle tankers (including eight chartered-in vessels), four Floating Storage and Offtake (FSO) units, nine double-hull conventional oil tankers and two lightering vessels. Teekay Offshore also has direct ownership interests in two shuttle tankers and one FSO unit and has the right to participate in certain Floating Production, Storage and Offloading (FPSO) opportunities. As at June 30, 2009, Teekay Parent directly owned the remaining 49 percent interest in OPCO, as well as a 49.99 percent interest in Teekay Offshore (including the two percent General Partner interest). Cash flow from vessel operations from Teekay Offshore decreased to $58.3 million in the second quarter of 2009, from $68.6 million in the same period of the prior year, primarily due to lower shuttle tanker utilization resulting from lower oil production and start-up delays at certain North Sea oil fields. In addition, during the second quarter of 2009, Teekay Offshore incurred $1.5 million in restructuring costs relating to the re-flagging of certain of its shuttle tankers. Teekay Offshore’s operating expenses in the second quarter of 2009 declined from the previous quarter reflecting the re-flagging and other cost reduction initiatives. On August 4, 2009, Teekay Offshore completed a follow-on equity offering of 7.475 million common units (including underwriters’ overallotment option which was exercised in full), raising net proceeds of $104.3 million. Proceeds from the offering were used to repay amounts drawn under Teekay Offshore’s revolving credit facilities and for general corporate purposes. In late-August 2009, Teekay Offshore received a formal offer from Teekay Parent to acquire the FPSO unit, the Petrojarl Varg, which is currently being reviewed by the board of directors of Teekay Offshore’s General Partner and its Conflicts Committee. Teekay LNG Partners L.P. Teekay LNG provides liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil marine transportation services under long-term, fixed-rate time-charter contracts with major energy and utility companies through its current fleet of fifteen LNG carriers, two LPG carriers and eight Suezmax crude oil tankers. In addition, Teekay LNG expects to take delivery of four newbuilding LPG carriers in late-2009 and 2010. Teekay Parent currently owns a 53 percent interest in Teekay LNG (including the two percent General Partner interest). Cash flow from vessel operations from Teekay LNG during the second quarter of 2009 increased to $52.9 million from $44.4 million in the same period of the prior year. This increase was primarily due to lower operating expenses, the scheduled drydockings of two LNG carriers, one LPG carrier and two Suezmax vessels during the second quarter of 2008, the delivery of the first of five Skaugen LPG carriers in April 2009, and a decrease in general and administrative expenses. In August 2009, Teekay LNG acquired Teekay Parent’s 70 percent interest in two 155,000 cubic meter newbuilding LNG carriers (the Tangguh LNG Carriers). These vessels have commenced their 20 year time-charters to a consortium led by a subsidiary of BP plc to provide transportation services to the Tangguh LNG Project in Indonesia. Teekay Tankers Ltd. Teekay Tankers currently owns a fleet of nine double-hull Aframax tankers and three double-hull Suezmax tankers. Seven of the 12 vessels are currently employed on fixed-rate time charters mostly ranging from one to three years in duration. Teekay Parent currently owns a 42.2 percent interest in Teekay Tankers (including 100 percent of the Class B common shares). Cash flow from vessel operations from Teekay Tankers decreased to $18.7 million in the second quarter of 2009, from $25.8 million in the same period of the prior year, primarily due to a decrease in spot tanker rates in the second quarter of 2009 compared to the same period of the prior year. On June 24, 2009, Teekay Tankers completed a follow-on equity offering of 7.0 million Class A common shares, raising net proceeds of $65.8 million. Proceeds from the offering were used fund the acquisition of one Suezmax tanker from Teekay Parent for $57.0 million with the remaining proceeds used to reduce amounts drawn under Teekay Tankers’ revolving credit facility. Teekay Parent In addition to its equity ownership interests in Teekay Offshore, Teekay LNG and Teekay Tankers, Teekay Corporation directly owns a substantial fleet of vessels. As at August 31, 2009, this included 28 conventional tankers (including two Suezmax newbuildings under construction), five FPSOs, a 33 percent interest in four newbuilding LNG carriers under construction, four Aframax shuttle tanker newbuildings under construction, and one FSO unit currently under conversion. In addition, as at August 31, 2009, Teekay Parent had 41 chartered-in conventional tankers (including 10 vessels owned by its subsidiaries) and two chartered-in LNG carriers owned by Teekay LNG. Cash flow from vessel operations from Teekay Parent decreased by $88.6 million in the second quarter of 2009 compared to the same period of the prior year, primarily due to a decrease in average spot tanker rates in the second quarter of 2009, partially offset by higher cash flow from the FPSO fleet and lower operating and overhead expenses as a result of cost reduction initiatives. Tanker Market Despite a short-lived increase late in the quarter, average spot rates for crude oil tankers declined in the second quarter of 2009 reflecting a reduction in global oil demand coupled with growth in the world tanker fleet. The market was also adversely affected by seasonal factors such as refinery maintenance and the start of North Sea oil field maintenance. The removal from active trading of a number of vessels used for floating oil storage continues to be a factor in temporarily reducing available tanker supply. Crude tanker rates have declined further in the third quarter of 2009 to date, to levels approaching operating cost breakeven, due to weak market fundamentals. Production outages in Nigeria caused by militant attacks on oil infrastructure and weaker refining fundamentals have put further downward pressure on tanker rates. As of August 12, 2009, the International Energy Agency (IEA) projected global oil demand of 83.9 million barrels per day (mb/d) in 2009, a 2.4 mb/d (or 2.7 percent) decline from 2008. The IEA forecasts a recovery in global oil demand during 2010 to 85.3 mb/d, an increase of 1.3 mb/d (or 1.6 percent) over 2009 based on a projected global GDP growth rate of 1.9 percent for the year. The world tanker fleet grew by approximately 4.9 percent in the first half of 2009, a generally higher level of fleet growth than in recent years. The tanker orderbook for the remainder of 2009 and 2010 is sizeable but fleet growth could be dampened by the removal of single-hull tankers ahead of the targeted IMO phase-out timeline, order cancellations as a result of a weaker global financing market and newbuilding construction delays from newly established shipyards. Teekay’s Spot Tanker Fleet Performance The following table highlights the consolidated operating performance of the Company’s conventional spot tanker pools and period out-charters with an initial term of between one and three years, measured in net revenues per revenue day or time-charter equivalent (TCE) rates: /T/ ————————————————————————— Three Months Ended June 30, March 31, June 30, 2009 2009 2008 ————————– Suezmax Gemini Suezmax Pool average spot TCE rate(1) $24,633 $42,188 $72,169 Spot revenue days(2) 713 606 432 Average time-charter rate(3)(4) $37,486 $35,906 $30,609 Time-charter revenue days 568 586 605 Aframax Teekay Aframax Pool average spot TCE rate(1)(5) $16,475 $25,200 $41,911 Spot revenue days(2) 2,924 3,445 3,635 Average time-charter rate(3) $32,708 $32,944 $31,803 Time-charter revenue days 546 524 180 LR2 Taurus LR2 Pool average spot TCE rate(1) $17,721 $26,228 $29,556 Spot revenue days(2) 398 450 557 Average time-charter rate(3) $28,110 $25,628 $37,876 Time-charter revenue days 98 180 151 MR MR product tanker average spot TCE rate(1) $15,278 $17,929 $26,134 Spot revenue days(2) 270 390 520 Average product tanker time-charter rate(3) $19,645 $21,374 $27,014 Time-charter revenue days 167 180 179 ————————————————————————— (1) Average spot rates include short-term time-charters and fixed-rate contracts of affreightment that are initially under a year in duration and third-party vessels trading in their respective pools but exclude vessels greater than 15 years old. (2) Spot revenue days includes total owned and in-chartered vessels in the Teekay consolidated fleet but excludes commercially managed pool vessels. (3) Average time-charter rates include realized gains and losses of synthetic time-charters and forward freight agreements (FFAs), short- term time-charters, and fixed-rate contracts of affreightment that are initially between one and three years in duration. (4) Average Suezmax time-charter rates exclude the cost of spot in- chartering vessels for contract of affreightment cargoes. (5) Including items outside of the pool (vessels greater than 15 years old and realized results of bunker hedging and FFAs) the average Teekay Aframax spot TCE rate was $16,425 per day, $25,541 per day and $41,982 per day during the three months ended June 30, 2009, March 31, 2009 and June 30, 2008, respectively. /T/ Fleet List As at August 31, 2009, Teekay’s consolidated fleet consisted of 165 vessels, including chartered-in vessels, newbuildings under construction and vessels under conversion but excluding vessels managed for third parties, as summarized in the following table: /T/ —————————————————————————- Number of Vessels(1) ——————————————– Owned Chartered-in Newbuildings/ Vessels Vessels Conversions Total —————————————————————————- Teekay Offshore Fleet Shuttle Tankers(2) 27 8 – 35 FSO Units(3) 5 – – 5 Aframax Tankers 11 – – 11 —————————————————————————- Total Teekay Offshore Fleet 43 8 – 51 —————————————————————————- Teekay LNG Fleet LNG Carriers 15 – – 15 LPG Carriers 2 – 4 6 Suezmax Tankers 8 – – 8 —————————————————————————- Total Teekay LNG Fleet 25 – 4 29 —————————————————————————- Teekay Tankers Fleet Aframax Tankers 9 – – 9 Suezmax Tankers 3 – – 3 —————————————————————————- Total Teekay Tankers Fleet 12 – – 12 —————————————————————————- Teekay Parent Fleet Aframax Tankers(4) 7 20 – 27 Suezmax Tankers 11 6 2 19 VLCC Tankers – 1 – 1 Product Tankers 8 4 – 12 LNG Carriers(5) – – 4 4 Shuttle Tankers – – 4 4 FPSO Units 5 – – 5 FSO Units 1 1 —————————————————————————- Total Teekay Parent Fleet 31 31 11 73 —————————————————————————- Total Teekay Consolidated Fleet 111 39 15 165 —————————————————————————- (1) Excludes vessels managed on behalf of third parties. (2) Includes six shuttle tankers in which Teekay Offshore’s ownership is 50 percent. (3) Includes one FSO in which Teekay Offshore’s ownership is 89 percent. (4) Excludes nine vessels chartered-in from Teekay Offshore Partners and one vessel chartered-in from Teekay Tankers. (5) Excludes two LNG carriers chartered-in from Teekay LNG. /T/ During the second quarter of 2009, Teekay Parent sold and delivered two LR2 product tankers for proceeds of $115.4 million. The total gain related to the sale of these vessels was $29.8 million. In July 2009, Teekay Parent entered into an agreement to sell one of its older Aframax tankers for $16.4 million, which is expected to be delivered in the fall of 2009. In August 2009, Teekay Parent entered into an agreement to purchase a 2007-built 40,000 deadweight tonne product tanker, which is expected to deliver in September 2009, and is expected to commence a 10-year fixed-rate charter with Caltex Australia by the end of third quarter. Liquidity and Capital Expenditures As at June 30, 2009, Teekay had current consolidated liquidity of over $2.0 billion, consisting of $472.7 million cash and $1,558.3 million of undrawn revolving credit facilities. In addition, the Company has pre-arranged newbuilding financing of $757 million, bringing total consolidated liquidity to approximately $2.8 billion. The Company’s remaining capital commitments relating to its portion of newbuildings were as follows as at June 30, 2009: /T/ —————————————————————————- (in millions) 2009 2010 2011 2012 Total —————————————————————————- Teekay Offshore – – – – – —————————————————————————- Teekay LNG $112(i) $61 – – $173 —————————————————————————- Teekay Tankers – – – – – —————————————————————————- Teekay Parent (23)(i) 270 $320 $45 612 —————————————————————————- —————————————————————————- Total Teekay Corporation Consolidated $89 $331 $320 $45 $785 —————————————————————————- —————————————————————————- (i) Adjusted to reflect the $70 million equity purchase price paid to Teekay Parent from Teekay LNG Partners for the Tangguh LNG Carriers in August 2009. /T/ As indicated above, the Company had total capital expenditure commitments of approximately $785 million remaining as at June 30, 2009, of which $757 million has pre-arranged financing, leaving only $28 million to be funded from operating cash flow or other sources. 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 165 vessels, offices in 16 countries and approximately 6,700 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”. /T/ ————————————————————————— TEEKAY CORPORATION SUMMARY CONSOLIDATED STATEMENTS OF INCOME (in thousands of U.S. dollars, except share and per share data) ————————————————————————— Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) ————————————————————————— REVENUES (1) 532,473 616,551 810,832 1,149,024 1,551,247 ————————————————————————— OPERATING EXPENSES Voyage expenses (1) 62,925 90,669 189,515 153,594 358,976 Vessel operating expenses (1)(2) 140,529 149,328 160,944 289,857 309,379 Time-charter hire expense 116,451 136,828 142,702 253,279 287,622 Depreciation and amortization 108,192 106,553 106,700 214,745 204,407 General and administrative (1)(2) 52,695 51,140 71,298 103,835 140,363 Gain on sale of vessels and equipment, net of write-downs (11,083) (118) (2,925) (11,201) (3,421) Restructuring charges 5,003 5,558 4,617 10,561 6,117 ————————————————————————— 474,712 539,958 672,851 1,014,670 1,303,443 ————————————————————————— Income from vessel operations 57,761 76,593 137,981 134,354 247,804 ————————————————————————— OTHER ITEMS Interest expense (1) (37,280) (44,190) (63,253) (81,470) (151,959) Interest income (1) 5,023 6,678 18,832 11,701 52,722 Realized and unrealized gain (loss) on derivative instruments (1) 157,485 47,245 116,263 204,730 (34,948) Income tax recovery (expense) 4,598 (5,868) 11,201 (1,270) 8,718 Equity income (loss) from joint ventures (1) 27,380 11,422 (2,063) 38,802 (5,672) Foreign exchange (loss) gain (25,165) 11,312 (3,014) (13,853) (36,595) Other – net 3,823 1,582 6,294 5,405 10,482 ————————————————————————— Net income (3) 193,625 104,774 222,241 298,399 90,552 Less: Net income attributable to non-controlling interests (34,266) (23,269) (38,822) (57,535) (12,262) ————————————————————————— Net income attributable to stockholders of Teekay Corporation 159,359 81,505 183,419 240,864 78,290 ————————————————————————— Earnings per common share of Teekay – Basic $2.20 $1.12 $2.53 $3.32 $1.08 – Diluted $2.19 $1.12 $2.50 $3.30 $1.07 ————————————————————————— Weighted-average number of common shares outstanding – Basic 72,535,899 72,516,193 72,377,684 72,526,101 72,511,041 – Diluted 72,798,023 72,745,781 73,279,213 72,887,474 73,357,190 ————————————————————————— (1) Commencing in 2009 and applied retroactively, the realized and unrealized gains and losses related to derivative instruments that are not designated as hedges for accounting purposes have been reclassified to a separate line item in the statements of income. The realized gains (losses) relate to the amounts the Company actually received or paid to settle such derivative instruments and the unrealized gains (losses) relate to the change in fair value of such derivative instruments, as detailed in the table below: Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 Realized gains (losses) relating to: Interest rate swaps (29,528) (20,888) (11,495) (50,416) (13,211) Foreign currency forward contracts Vessel operating expenses (2,407) (3,438) 5,520 (5,845) 10,691 General and administrative expenses (41) (2,059) 3,492 (2,100) 7,141 Voyage expenses and other – – 452 – 5,348 Bunkers and FFAs 4,294 (2,289) (10,461) 2,005 (15,750) ——————————————– (27,682) (28,674) (12,492) (56,356) (5,781) ——————————————– Unrealized gains (losses) relating to: Interest rate swaps 182,471 62,976 167,729 245,447 2,622 Foreign currency forward contracts 6,416 6,751 (6,347) 13,167 (8,226) Bunkers, FFAs and other (3,720) 6,192 (32,627) 2,472 (23,563) ——————————————– 185,167 75,919 128,755 261,086 (29,167) ——————————————– Total realized and unrealized gains (losses) on non- designated derivative instruments 157,485 47,245 116,263 204,730 (34,948) ——————————————– ——————————————– In addition, equity income (loss) from joint ventures includes net unrealized gains from non-designated interest rate swaps held within the joint ventures of $25.5 million, $7.8 million and $nil for the three months ended June 30, 2009, March 31, 2009 and June 30, 2008, respectively, and $33.3 million and $nil for the six months ended June 30, 2009 and 2008, respectively. (2) The Company has entered into foreign currency forward contracts, which are economic hedges of vessel operating expenses and general and administrative expenses. Certain of these forward contracts have been designated as cash flow hedges pursuant to United States GAAP. Unrealized gains (losses) arising from hedge ineffectiveness from such forward contracts are reflected in vessel operating expenses and general and administrative expenses in the above Statements of Income, as detailed in the table below: Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2009 2009 2008 2009 2008 Vessel operating expenses 6,919 (223) 445 6,696 (190) General and administrative 1,692 1,997 300 3,689 (115) (3) Commencing in 2009 and applied retroactively, in accordance with SFAS 160, the Company’s net income includes income attributable to non- controlling interests. ————————————————————————— TEEKAY CORPORATION SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars) ————————————————————————— As at As at As at June 30, March 31, December 31, 2009 2009 2008 (unaudited) (unaudited) (unaudited) ASSETS Cash and cash equivalents 472,671 770,450 814,165 Other current assets 302,712 320,820 438,829 Restricted cash – current 35,440 31,984 35,841 Restricted cash – long-term 610,523 603,694 614,715 Vessels held for sale 34,970 – 69,649 Vessels and equipment 6,649,736 6,792,372 6,713,392 Advances on newbuilding contracts 231,220 343,846 553,702 Derivative assets 53,904 127,203 167,326 Investment in joint ventures 126,315 112,365 103,956 Investment in direct financing leases 474,321 278,204 79,508 Other assets 159,076 155,094 155,959 Intangible assets 246,640 255,166 264,768 Goodwill 203,191 203,191 203,191 ————————————————————————— Total Assets 9,600,719 9,994,389 10,215,001 ————————————————————————— ————————————————————————— LIABILITIES AND EQUITY Accounts payable and accrued liabilities 294,156 296,453 374,724 Other current liabilities 21,274 23,443 22,255 Current portion of long-term debt 353,834 361,013 392,659 Long-term debt 4,943,490 5,254,003 5,377,474 Derivative liabilities 417,668 711,777 843,265 In process revenue contracts 283,362 302,076 317,865 Other long-term liabilities 253,582 254,583 234,354 Equity: Non-controlling interests 727,390 653,526 583,938 Stockholders of Teekay 2,305,963 2,137,515 2,068,467 ————————————————————————— Total Liabilities and Equity 9,600,719 9,994,389 10,215,001 ————————————————————————— ————————————————————————— ————————————————————————— TEEKAY CORPORATION SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of U.S. dollars) ————————————————————————— Six Months Ended June 30, 2009 2008 (unaudited) (unaudited) Cash and cash equivalents provided by (used for) OPERATING ACTIVITIES ————————————————————————— Net operating cash flow 229,268 198,966 ————————————————————————— FINANCING ACTIVITIES Net proceeds from long-term debt 296,560 1,279,388 Scheduled repayments of long-term debt (137,777) (198,320) Prepayments of long-term debt (642,500) (645,321) Decrease (increase) in restricted cash 5,805 (11,503) Repurchase of common stock – (20,512) Net proceeds from the public offering of Teekay LNG 67,095 148,345 Net proceeds from the public offering of Teekay – 134,265 Offshore Net proceeds from the public offering of Teekay 65,556 – Tankers Cash dividends paid (45,861) (40,028) Distribution from subsidiaries to non-controlling (53,093) (34,546) interests Other 160 3,840 ————————————————————————— Net financing cash flow (444,055) 615,608 ————————————————————————— INVESTING ACTIVITIES Expenditures for vessels and equipment (344,888) (410,495) Proceeds from sale of vessels and equipment 198,837 79,224 Purchase of marketable securities – (542) Proceeds from sale of marketable securities – 11,058 Purchase of Teekay Petrojarl ASA – (257,142) Loans to joint ventures (1,420) (211,491) Other 20,764 31,074 ————————————————————————— Net investing cash flow (126,707) (758,314) ————————————————————————— (Decrease) increase in cash and cash equivalents (341,494) 56,260 Cash and cash equivalents, beginning of the period 814,165 442,673 ————————————————————————— Cash and cash equivalents, end of the period 472,671 498,933 ————————————————————————— ————————————————————————— ————————————————————————— TEEKAY CORPORATION APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME (in thousands of U.S. dollars, except per share data) Set forth below is a reconciliation of the Company’s unaudited adjusted net loss, a non-GAAP financial measure, to net income as determined in accordance with GAAP, adjusted for 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, 2009, 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, 2009 June 30, 2009 (unaudited) (unaudited) $ Per $ Per $ Share(1) $ Share(1) ————————————————————————- Net income – GAAP basis 193,625 298,399 Adjust for: Net income attributable to non-controlling interests (34,266) (57,535) ————————————————————————- Net income attributable to stockholders of Teekay 159,359 2.19 240,864 3.30 Add (subtract) specific items affecting net income: Unrealized gains from derivative instruments (2) (219,251) (3.02) (304,741) (4.18) Foreign currency exchange losses (3) 25,165 0.35 13,853 0.19 Deferred income tax expense on unrealized foreign exchange gains (4) 1,904 0.03 10,268 0.14 Restructuring charge (5) 5,003 0.07 10,561 0.15 Gain on sale of vessels and equipment (29,845) (0.41) (29,963) (0.41) Write-down of vessels and equipment 18,762 0.26 18,762 0.26 Other (6) (637) (0.01) 871 0.01 Non-controlling interests’ share of items above 17,725 0.24 28,658 0.39 ————————————————————————- Total adjustments (181,174) (2.49) (251,731) (3.45) ————————————————————————- Adjusted net loss attributable to stockholders of Teekay (21,815) (0.30) (10,867) (0.15) ————————————————————————- ————————————————————————- (1) Fully diluted per share amounts. (2) Reflects the unrealized gains relating to the change in the mark-to- market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income (loss) from joint ventures, and the ineffective portion of foreign currency forward contracts designated as hedges for accounting purposes. (3) 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. (4) Primarily due to deferred income tax related to unrealized foreign exchange gains and losses. (5) Restructuring charges relate to the reorganization of certain of the Company’s operational functions and the re-flagging of certain of the Company’s shuttle tankers. (6) Primarily relates to non-recurring adjustments to tax accruals and impairment of intangible assets. ————————————————————————— TEEKAY CORPORATION APPENDIX A – SPECIFIC ITEMS AFFECTING NET INCOME (in thousands of U.S. dollars, except per share data) Set forth below is a reconciliation of the Company’s unaudited adjusted net income, a non-GAAP financial measure, to net income as determined in accordance with GAAP, adjusted for 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(1) $ Share(1) ————————————————————————— Net income – GAAP basis 222,241 90,552 Adjust for: Net income attributable to non-controlling interests (38,822) (12,262) ————————————————————————— Net income attributable to stockholders of Teekay 183,419 2.50 78,290 1.07 Add (subtract) specific items affecting net income: Unrealized (gains) losses from derivative instruments (2) (141,500) (1.93) 15,558 0.21 Foreign currency exchange losses (3) 1,807 0.03 35,339 0.48 Deferred income tax expense on unrealized foreign exchange gains (4) 284 – 8,680 0.12 Restructuring charge (5) 4,617 0.06 4,617 0.06 Gain on sale of vessels and equipment (2,925) (0.04) (3,421) (0.05) Net effect from non-cash changes in purchase price allocation for the acquisition of 50 percent of OMI Corporation (6) 3,084 0.04 7,028 0.10 Net effect from non-cash changes in purchase price allocation for the acquisition of Teekay Petrojarl ASA (7) 6,398 0.09 6,398 0.09 Other (8) (1,746) (0.02) 835 0.01 Non-controlling interests’ share of items above 23,639 0.32 (15,502) (0.21) ————————————————————————— Total adjustments (106,342) (1.45) 59,532 0.81 ————————————————————————— Adjusted net income attributable to stockholders of Teekay 77,077 1.05 137,822 1.88 ————————————————————————— ————————————————————————— (1) Fully diluted per share amounts. (2) Reflects the unrealized gains or losses relating to the change in the mark-to-market value of derivative instruments that are not designated as hedges for accounting purposes, including those included in equity income (loss) from joint ventures, and the ineffective portion of foreign currency forward contracts designated as hedges for accounting purposes. (3) 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. (4) Primarily due to deferred income tax related to unrealized foreign exchange gains and losses. (5) Restructuring charges relate to the reorganization of certain of the Company’s operational functions. (6) Primarily relates to changes in amortization of intangible assets as a result of adjustments to the purchase price allocation of OMI Corporation. (7) 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. (8) Primarily relates to losses on bond repurchases (8.875% Notes due 2011), a change in non-cash deferred tax balances and settlement of a previous claim against OMI Corporation. ————————————————————————— TEEKAY CORPORATION APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION SUMMARY BALANCE SHEET AS AT JUNE 30, 2009 (in thousands of U.S. dollars) ————————————————————————— (unaudited) Teekay Teekay Teekay Teekay Offshore LNG Tankers Petrojarl ——————————————— ASSETS Cash and cash equivalents 97,290 94,199 17,575 34,910 Other current assets 66,489 14,928 8,596 52,943 Restricted cash (current & non-current) – 642,594 – 2,416 Vessels and equipment 1,658,129 1,801,459 511,008 1,270,107 Advances on newbuilding contracts – 55,661 – – Derivative assets – 51,239 – – Investment in joint ventures – 78,211 – – Investment in direct financing leases 67,451 406,177 – – Other assets 10,987 27,993 4,003 18,544 Advances to affiliates 9,919 10,176 7,947 – Equity investment in subsidiaries – – – – Intangibles and goodwill 167,874 172,871 6,761 999 ——————————————— TOTAL ASSETS 2,078,139 3,355,508 555,890 1,379,919 ——————————————— ——————————————— LIABILITIES AND EQUITY Accounts payable and accrued liabilities 49,955 45,233 11,935 38,848 Other current liabilities 20,038 1,236 – – Advances from affiliates 31,441 99,724 4,620 115,706 Current portion of long-term debt 85,417 214,902 3,600 12,100 Long-term debt 1,407,103 1,933,848 303,428 341,659 Derivative liabilities 88,188 139,109 13,970 32,225 In-process revenue contracts – – 691 280,654 Other long-term liabilities 35,215 54,389 – 41,033 Equity: Non-controlling interests (1) 40,560 4,053 – 714 Equity attributable to stockholders/unitholders of publicly-listed entities 320,222 863,014 217,646 516,980 ——————————————— TOTAL LIABILITIES AND EQUITY 2,078,139 3,355,508 555,890 1,379,919 ——————————————— ——————————————— NET DEBT (2) 1,395,230 1,411,957 289,453 316,433 ——————————————— ——————————————— Consol- Teekay idation Standalone Adjustments Total ———————————- ASSETS Cash and cash equivalents 228,697 – 472,671 Other current assets 194,726 – 337,682 Restricted cash (current & non-current) 953 – 645,963 Vessels and equipment 1,409,033 – 6,649,736 Advances on newbuilding contracts 175,559 – 231,220 Derivative assets 2,665 – 53,904 Investment in joint ventures 48,104 – 126,315 Investment in direct financing leases 693 – 474,321 Other assets 97,549 – 159,076 Advances to affiliates (28,042) – – Equity investment in subsidiaries 1,235,799 (1,235,799) – Intangibles and goodwill 101,326 – 449,831 ———————————- TOTAL ASSETS 3,467,062 (1,235,799) 9,600,719 ———————————- ———————————- LIABILITIES AND EQUITY Accounts payable and accrued liabilities 148,185 – 294,156 Other current liabilities – – 21,274 Advances from affiliates (251,491) – – Current portion of long-term debt 37,815 – 353,834 Long-term debt 957,452 – 4,943,490 Derivative liabilities 144,176 – 417,668 In-process revenue contracts 2,017 – 283,362 Other long-term liabilities 122,945 – 253,582 Equity: Non-controlling interests (1) – 682,063 727,390 Equity attributable to stockholders/ unitholders of publicly-listed entities 2,305,963 (1,917,862) 2,305,963 ———————————- TOTAL LIABILITIES AND EQUITY 3,467,062 (1,235,799) 9,600,719 ———————————- ———————————- NET DEBT (2) 765,617 – 4,178,690 ———————————- ———————————- (1) Non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the joint venture net assets. Non- controlling interest in the Consolidation Adjustments column represents the public’s share of the net assets of Teekay’s publicly-traded subsidiaries. Commencing in 2009, in accordance with SFAS 160, non-controlling interest is included as a component of equity. (2) Net debt represents current and long-term debt less cash and, if applicable, current and long-term restricted cash. ————————————————————————— TEEKAY CORPORATION APPENDIX B – SUPPLEMENTAL FINANCIAL INFORMATION SUMMARY STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2009 (in thousands of U.S. dollars) ————————————————————————— (unaudited) Consol- Teekay Teekay Teekay idation Off- Teekay Teekay Petro- Stand- adjust- shore LNG Tankers jarl alone ments Total ———————————————————— Voyage revenues 173,020 80,124 31,005 99,170 200,286 (51,132) 532,473 ———————————————————— Voyage expenses 22,229 222 514 – 46,022 (6,062) 62,925 Vessel operating expenses 46,936 18,178 7,911 44,904 22,600 – 140,529 Time-charter hire expense 29,144 – – 5,782 126,595 (45,070) 116,451 Depreciation and amortization 34,588 20,160 7,230 25,746 20,468 – 108,192 General and administrative 13,351 4,056 1,783 7,553 25,952 – 52,695 Gain on sale of vessels and equipment, net of write-downs – – – – (11,083) – (11,083) Restructuring charge 1,481 709 – – 2,813 – 5,003 ———————————————————— Total operating expenses 147,729 43,325 17,438 83,985 233,367 (51,132) 474,712 ———————————————————— Income (loss) from vessel operations 25,291 36,799 13,567 15,185 (33,081) – 57,761 ———————————————————— Net interest expense (8,961) (12,608) (2,088) (2,493) (6,107) – (32,257) Realized and unrealized gain on derivative instruments 44,256 8,641 5,475 1,781 97,332 – 157,485 Income tax recovery (expense) 3,037 49 – (229) 1,741 – 4,598 Equity income (loss) from joint ventures – 10,133 – (702) 17,949 – 27,380 Equity in earnings of subsidiaries (1) – – – – 78,617 (78,617) – Foreign exchange (loss) gain (1,354) (22,379) (60) (2,569) 1,197 – (25,165) Other – net 1,910 (40) – 242 1,711 – 3,823 ———————————————————— Net income 64,179 20,595 16,894 11,215 159,359 (78,617) 193,625 Less: Net (income) loss attributable to non- controlling interests (2) (4,228) (2,798) – 146 – (27,386) (34,266) ———————————————————— Net income attributable to stock- holders/ unitholders of publicly- listed entities 59,951 17,797 16,894 11,361 159,359 (106,003) 159,359 ———————————————————— ———————————————————— ———————————————————— CASH FLOW FROM VESSEL OPERATIONS (3) 58,262 52,911 18,694 20,820 (21,001) – 129,686 ———————————————————— ———————————————————— (1) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries. (2) Net (income) loss attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income (loss) of the respective joint ventures. Net (income) loss attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries. Commencing in 2009, in accordance with SFAS 160, the Company’s net income (loss) includes income (loss) attributable to non-controlling interests. (3) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel/ goodwill write-downs, gains or losses on the sale of vessels and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. 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 B – SUPPLEMENTAL FINANCIAL INFORMATION SUMMARY STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2009 (in thousands of U.S. dollars) ————————————————————————— (unaudited) Consol- Teekay Teekay Teekay idation Off- Teekay Teekay Petro- Stand- adjust- shore LNG Tankers jarl alone ments Total ————————————————————– Voyage revenues 356,445 155,797 65,453 192,896 479,759 (101,326) 1,149,024 ————————————————————– Voyage expenses 47,042 740 1,094 – 117,185 (12,467) 153,594 Vessel operating expenses 97,670 36,919 16,300 87,682 51,286 – 289,857 Time-charter hire expense 61,289 – – 11,605 269,244 (88,859) 253,279 Depreciation and amortization 69,119 39,486 14,261 51,525 40,354 – 214,745 General and adminis- trative 25,273 7,611 3,425 17,339 50,187 – 103,835 Gain on sale of vessels and equipment, net of write- downs – – – – (11,201) – (11,201) Restructuring charge 3,682 2,660 – – 4,219 – 10,561 ————————————————————– Total operating expenses 304,075 87,416 35,080 168,151 521,274 (101,326) 1,014,670 ————————————————————– Income (loss) from vessel operations 52,370 68,381 30,373 24,745 (41,515) – 134,354 ————————————————————– Net interest expense (18,703) (25,752) (4,654) (6,214) (14,446) – (69,769) Realized and unrealized gain (loss) on derivative instruments 61,840 (7,595) 6,842 1,386 142,257 – 204,730 Income tax (expense) recovery (1,101) 299 – (277) (191) – (1,270) Equity income (loss) from joint ventures – 14,006 – (1,012) 25,808 – 38,802 Equity in earnings of subsidiaries (1) – – – – 131,712 (131,712) – Foreign exchange loss (3,602) (1,951) (26) (4,876) (3,398) – (13,853) Other – net 4,991 (121) – (102) 637 – 5,405 ————————————————————– Net income 95,795 47,267 32,535 13,650 240,864 (131,712) 298,399 Less: Net (income) loss attributable to non- controlling interests (2) (5,450) (1,103) – 114 – (51,096) (57,535) ————————————————————– Net income attributable to stockholders/ unitholders of publicly- listed entities 90,345 46,164 32,535 13,764 240,864 (182,808) 240,864 ————————————————————– ————————————————————– ————————————————————– CASH FLOW FROM VESSEL OPERATIONS (3) 115,295 102,124 39,522 36,641 (8,730) – 284,852 ————————————————————– ————————————————————– (1) Teekay Corporation’s proportionate share of the net earnings of its publicly-traded subsidiaries. (2) Net (income) loss attributable to non-controlling interests in the Teekay Offshore and Teekay LNG columns represent the joint venture partners’ share of the net income (loss) of the respective joint ventures. Net (income) loss attributable to non-controlling interest in the Consolidation Adjustments column represents the public’s share of the net income (loss) of Teekay’s publicly-traded subsidiaries. Commencing in 2009, in accordance with SFAS 160, the Company’s net income (loss) includes income (loss) attributable to non-controlling interests. (3) Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense, vessel/ goodwill write- downs, gains or losses on the sale of vessels and unrealized gains and losses relating to derivatives, but includes realized gains and losses on the settlement of foreign currency forward contracts. 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. /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: tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; the Company’s financial strength, including the stability of its cash flows, its liquidity position, and debt maturity profile; the Company’s annual fixed-rate cash flow from vessel operations; the Company’s future capital expenditure commitments and the financing requirements for such commitments; the impact on the Company’s profitability through cost reductions and contract improvements; and the impact on the Company’s financial leverage and flexibility resulting from its strategy of selling assets to its subsidiary companies, Teekay LNG, Teekay Offshore and Teekay Tankers, including the potential effect of the Company’s recent offer to sell the Petrojarl Varg FPSO to Teekay Offshore. 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 production of or demand for oil, petroleum products, LNG and LPG, either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil or demand for shuttle tankers, FSOs and FPSOs; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; changes affecting the offshore tanker market; shipyard production delays; changes in the Company’s expenses; the Company’s future capital expenditure requirements; the inability of the Company to complete vessel sale transactions to its daughters or third parties, including the outstanding offer to sell the Petrojarl Varg FPSO to Teekay Offshore; conditions in the United States capital markets; 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, 2008. 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.