• Teekay Tankers can pay a dividend under any market scenario thanks to a balanced chartering strategy which provides a floor under our cash flows while maintaining some upside to the spot tanker market.
   
  • For example, assuming an illustrative average Aframax spot rate of $15,000 per day and an illustrative average Suezmax spot rate of $25,000 per day, Teekay Tankers would be able to pay a dividend of approximately $1.20 per share in 2010. Additionally, each $5,000 per day increase in spot tanker rates would increase the annual dividend by approximately $0.30 per share.
     

• We have a favorable debt profile with low debt servicing costs, no significant principal repayments until 2015 and no covenant concerns. 

• Strong sponsorship from parent Teekay Corporation provides TNK with financial strength, operational expertise and built-in growth opportunities.

Teekay Tankers trades on the New York Stock Exchange under the symbol “TNK”.

Teekay Tankers trades on the New York Stock Exchange under the symbol “TNK”.

• Maximize cash flow by tactically managing our mix of spot and charter contacts, as well as participating in the Teekay pools
• A full payout dividend policy based on the earnings of our tanker fleet
• Expand our fleet through accretive acquisitions

By actively managing our fleet through a mix of fixed-rate and spot tanker market trading, Teekay Tankers shareholders benefit from downside protection provided by cash flows from fixed-rate contracts while maintaining some upside to the spot tanker market. 

The result is a favorable risk/reward balance and low dividend breakeven rate, which allows Teekay Tankers to pay a dividend even when spot markets are weak.  

Teekay Tankers’ most recent dividend payment was $0.34/share, payable on August 27, 2010.

Teekay Tankers maximizes cash flow by tactically managing our mix of spot market and time-charter contracts and by participating in Teekay’s Aframax and Gemini Suezmax pools.

A commercial tonnage pool brings together any number of vessels from various pool partners (ship owners) to create a homogeneous fleet, which is commercially managed by a pool manager. This pool structure provides numerous advantages to the pool partners, including higher fleet utilization, cost efficiencies and more stable revenues.

Currently, nine of our 14 vessels or almost two-thirds of our fleet are currently locked-in on short-term (1-3 years) time charters. In the second half of 2010, 66% of our revenue days will be under fixed-rate contracts. These out-charters generate stable cash flows that do not rise or fall with the spot tanker market and effectively provide a floor under our dividend payments.

Depending on spot tanker market outlook, we will adjust the percentage of fixed-rate charters up or down to either provide increased time-charter coverage when spot tanker rates are expected to be weak or increased spot market exposure when spot tanker rates are expected to be strong. 

When taking on new charters, we consider the market outlook and vary the length of our fixed-rate cover between one and three years as we see appropriate.

Over time, we expect to take advantage of vessel acquisition opportunities both through dropdowns from parent Teekay Corporation and acquisitions from third parties. 

We will only proceed when we expect acquisitions to be accretive to our cash available for distribution.

Teekay Tankers’ capital structure includes a combination of debt and equity. Our fixed-rate contracts provide stable cash flows which support our ongoing debt principal and interest obligations. 

Teekay Tankers has a favorable debt portfolio with minimal principal payments until 2015, low average cost of debt (~4%) and no financial ratio or hull covenant concerns.

With Teekay Corporation as its sponsor, Teekay Tankers has access to a network of strong customer relationships and the opportunity to benefit from participation in Teekay’s Aframax and Gemini Suezmax pools. (See Commercial Tonnage pools)

Other benefits provided by Teekay Corporation include: 

• Six chartering offices working 24 / 7
•  Higher utilization through market concentration on key routes 
•  Operational control through managing business in-house
•  A large fleet of interchangeable uniform-sized vessels

All 14 Teekay Tankers vessels are double hull. As such, the single hull phase out has no direct impact on our fleet.