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Issuer Free Writing Prospectus filed pursuant to Rule 433
supplementing the Preliminary Prospectus dated January 15, 2010
Registration No. 333-164315
January 15, 2010
Teekay Corporation
Pricing Supplement
Pricing Supplement dated January 15, 2010 to Preliminary Prospectus dated January 15, 2010 of Teekay Corporation (or Teekay). This Pricing Supplement is qualified in its entirety by reference to the Preliminary Prospectus. The information in this Pricing Supplement supplements the Preliminary Prospectus and supersedes the information in the Preliminary Prospectus to the extent it is inconsistent with the information in the Preliminary Prospectus. Capitalized terms used in this Pricing Supplement but not defined have the meanings given them in the Preliminary Prospectus.
     
Issuer:
   Teekay Corporation
 
    
Title of Security:
   8.500% Senior Notes due 2020
 
    
Aggregate Principal Amount:
   $450,000,000
 
    
Maturity:
   January 15, 2020
 
    
Public Offering Price:
   99.181%, plus accrued interest, if any, from January 27, 2010
 
    
Coupon:
   8.500%
 
    
Yield to maturity:
   8.625%
 
    
Spread to Benchmark Treasury:
   +492 basis points
 
    
Benchmark Treasury:
   UST 3.625% due 8/15/2019
 
    
Interest Payment Dates:
   January 15 and July 15 of each year, beginning on July 15, 2010
 
    
Record Dates:
   January 1 and July 1
 
    
Optional Redemption:
   Teekay may redeem all or a portion of the notes at any time before
 
   their maturity date at a redemption price equal to the greater of
 
   (a) 100% of the principal amount of the notes to be redeemed and
 
   (b) the sum of the present value of the remaining scheduled payments
 
   of principal and interest discounted to the redemption date at the
 
   treasury yield plus 50 basis points plus accrued interest to the date
 
   of redemption.
 
    
Optional Redemption with Equity Proceeds:
   Prior to January 15, 2013, Teekay may redeem up to 35% of the notes
 
   with the net proceeds of certain equity offerings at a redemption
 
   price equal to 108.5% of their principal amount plus accrued interest
 
   to the date of redemption.
 
    
Change of Control Triggering Event:
   101% of the principal amount, plus accrued and unpaid interest, if any.
 
    
Gross Proceeds:
   $446,314,500
 
    
Underwriting Discount:
   1.736% per note, $7,810,504 in the aggregate
 
    
Net Proceeds to Issuer before Expenses:
   $438,503,996
 
    
Approximate Net Proceeds to Issuer after
    
Estimated Expenses:
   $437,000,000
 
    
Use of Proceeds:
   Fund the tender offer for all of Teekay's outstanding 8.875% Senior
 
   Notes due 2011, of which $176.6 million in aggregate principal amount
 
   was outstanding as of December 31, 2009, and to repay (a) all of the
 
   $150.0 million of debt outstanding under one of Teekay's term loans
 
   and (b) a portion of the borrowings outstanding under one of Teekay's
 
   revolving credit facilities.

 

 

     
Trade Date:
  January 15, 2010
 
    
Settlement Date:
  January 27, 2010 (T+7)
 
    
Ratings:
  B1/BB1
 
    
Joint Book-Running Managers:
  J.P. Morgan Securities Inc.
Citigroup Global Markets Inc.
Deutsche Bank Securities Inc.
 
    
Co-Managers:
  BNP Paribas Securities Corp.
DnB NOR Markets, Inc.
ING Financial Markets LLC
Scotia Capital (USA) Inc.
 
    
             
Allocation:   Underwriters   Principal Amount  
 
  J.P. Morgan Securities Inc.   $ 270,000,000  
 
  Citigroup Global Markets Inc.   $ 90,000,000  
 
  Deutsche Bank Securities Inc.   $ 54,000,000  
 
  BNP Paribas Securities Corp.   $ 9,000,000  
 
  DnB NOR Markets, Inc.   $ 9,000,000  
 
  ING Financial Markets LLC   $ 9,000,000  
 
  Scotia Capital (USA) Inc.   $ 9,000,000  
 
            
Denominations:   $2,000 and integral multiples of $1,000
 
            
CUSIP/ISIN Numbers:   CUSIP: 87900YAA1 ISIN: US87900YAA10
 
            
Listing:
  None        
 
            
Form of Offering:   SEC Registered (Registration No. 333-164315)
Additional Information:
The as adjusted financial data appearing on page 24 of the Preliminary Prospectus will be updated to reflect the following changes ($ in thousands, except ratios):
                     
As adjusted financial data Consolidated:           As adjusted financial data Teekay Parent:        
EBITDA(10)
  $ 7,762     EBITDA(10)   $ (327,975 )
Adjusted EBITDA(10)
  $ 617,221     Adjusted EBITDA(10)   $ 250,846  
Cash interest expense(13)
  $ 276,122     Cash distributions from public subsidiaries(15)   $ 130,106  
Cash and cash equivalents
  $ 479,334     Cash distributions from OPCO(16)   $ 54,427  
Total debt (less restricted cash)(14)
  $ 4,605,004     Cash interest expense(13)   $ 108,913  
Ratio of total debt (less restricted cash) to Adjusted EBITDA(10)(12)(14)
    7.5x     Cash and cash equivalents   $ 227,839  
Ratio of total debt less total cash to Adjusted EBITDA(10)(12)(14)
    6.7x     Total debt (less restricted cash)(14)(17)   $ 1,096,570  
Ratio of Adjusted EBITDA to cash interest expense(10)(13)
    2.2x    
Ratio of total debt (less restricted cash) to Adjusted EBITDA(10)(14)(17)
    4.4x  
           
Ratio of total debt less total cash to Adjusted EBITDA(10)(14)(17)
     3.5x  
 
         
Ratio of Adjusted EBITDA to cash interest expense(10)(13)
     2.3x  
The table appearing on page 27 of the Preliminary Prospectus is updated to reflect the following changes:
 
1   A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

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    As adjusted  
    Twelve months ended September 30, 2009  
    (unaudited)    
    Teekay     Public             Teekay  
(in thousands)   consolidated     subsidiaries     Adjustments     Parent  
Income statement data:
                                
Reconciliation of EBITDA and Adjusted EBITDA to Net loss
                                
Net Income (loss)
   $ (578,505 )   $ (6,521 )           $ (571,984 )
Interest expense, net of interest income
     167,489       105,768               61,721  
Income taxes
     (8,980 )     (7,721 )             (1,259 )
Depreciation and amortization
     427,758       244,211               183,547  
 
EBITDA
   $ 7,762     $ 335,737             $ (327,975 )
 
Cash distributions from public subsidiaries(15)
   $ —     $ —     $ (130,106 )   $ 130,106  
Cash distributions from OPCO(16)
     —       —       (54,427 )     54,427  
Restructuring charge
     16,466       7,106               9,360  
Foreign exchange (gain) loss
     15,992       17,191               (1,199 )
Gain on sale of vessels and equipment—net of writedowns
     (30,588 )     —               (30,588 )
Goodwill impairment charge
     334,165       —               334,165  
Amortization of in-process revenue contracts
     (75,411 )     (421 )             (74,990 )
Unrealized losses on derivative instruments
     239,869       133,793               106,076  
Realized losses (gains) on interest rate swaps
     101,662       62,882               38,780  
Realized losses (gains) on interest rate swaps in joint ventures
     7,304       (5,380 )             12,684  
 
Adjusted EBITDA
   $ 617,221     $ 550,908     $ (184,533 )   $ 250,846  
 
Reconciliation of Adjusted EBITDA to Net operating cash flow
                                
Net operating cash flow
   $ 486,502     $ 411,367             $ 75,135  
Expenditures for drydocking
     99,421       47,542               51,879  
Interest expense, net of interest income
     167,489       105,768               61,721  
Change in non-cash working capital items related to operating activities
     (207,041 )     (86,649 )             (120,392 )
Gain on sale of marketable securities
     —       —               —  
Writedown of marketable securities
     (6,272 )     —               (6,272 )
Writedown of intangible assets
     (10,824 )     —               (10,824 )
Loss on bond repurchase
     —       —               —  
Equity income (net of dividends received)
     3,840       11,507               (7,667 )
Other—net
     (27,583 )     (2,865 )             (24,718 )
Employee stock compensation
     (13,743 )     (370 )             (13,373 )
Restructuring charges
     16,466       7,106               9,360  
Realized losses (gains) on interest rate swaps
     101,662       62,882               38,780  
Realized losses (gains) on interest rate swaps in joint ventures
     7,304       (5,380 )             12,684  
Cash distributions from public subsidiaries(15)
     —       —     $ (130,106 )   $ 130,106  
Cash distributions from OPCO(16)
     —       —       (54,427 )     54,427  
 
Adjusted EBITDA
   $ 617,221     $ 550,908     $ (184,533 )   $ 250,846  
 

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The tables appearing on page 28 of the Preliminary Prospectus will be updated to reflect the following changes:
The following table reconciles cash interest expense, a non-GAAP financial measure, to interest expense, the most directly comparable GAAP financial measure, for Teekay on both a historical consolidated and as adjusted basis:
                         
   
    Teekay consolidated  
                    Twelve months ended  
    September 30, 2009  
    (unaudited)  
(in thousands)   Historical     Adjustments     As adjusted  
     
Interest expense
   $ 188,962     $ 16,975     $ 205,937  
Interest income
     (39,597 )             (39,597 )
Capitalized interest
     15,502               15,502  
Realized losses on interest rate swaps
     101,662               101,662  
Amortization of capitalized loan costs
     (7,382 )             (7,382 )
     
Cash interest expense
   $ 259,147     $ 16,975     $ 276,122  
 
The following table reconciles cash interest expense to interest expense of Teekay on a consolidated basis and of Teekay Parent, both individually and with respect to each other, each on an as adjusted basis.
                         
   
    Twelve months ended  
    September 30, 2009  
    (unaudited)  
    Teekay     Public        
    consolidated,as     subsidiaries, as     Teekay Parent,  
(in thousands)   adjusted     adjusted     as adjusted  
     
Interest expense
   $ 205,937     $ 137,426     $ 68,511  
Interest income
     (39,597 )     (31,658 )     (7,939 )
Capitalized interest
     15,502       2,096       13,406  
Realized losses on interest rate swaps
     101,662       62,882       38,780  
Amortization of capitalized loan costs
     (7,382 )     (3,537 )     (3,845 )
     
Cash interest expense
   $ 276,122     $ 167,209     $ 108,913  
 
The “Capitalization” section on page 53 of the Preliminary Prospectus will be updated to reflect the following changes ($ in thousands):
         
As further adjusted 8.500% Senior Notes due January 2020
  $450,000(4)
As further adjusted Other debt
  $ 3,987,263  
As further adjusted Retained earnings
  $ 1,564,837  
As further adjusted Total debt
  $5,261,628(1)(4)
 
    (4)The recorded amount of the notes will be reduced by approximately $3.7 million to reflect the issue price of the notes.
Other information (including net proceeds of the offering and other financial information) presented in the Preliminary Prospectus is deemed to have changed to the extent affected by the information contained and changes described herein.
FREE WRITING PROSPECTUS LEGEND
TEEKAY CORPORATION HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS) WITH THE SECURITIES AND EXCHANGE COMMISSION (OR THE “SEC”) FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS TEEKAY CORPORATION HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT TEEKAY CORPORATION AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING THE SEC WEB SITE AT WWW.SEC.GOV. ALTERNATIVELY, TEEKAY CORPORATION, THE UNDERWRITERS OR ANY DEALER PARTICIPATING IN THE OFFERING WILL ARRANGE TO SEND YOU THE PROSPECTUS IF YOU REQUEST THEM FROM: J.P. MORGAN SECURITIES INC., 4 CHASE METROTECH CENTER, CS LEVEL, BROOKLYN, NY 11425, ATTENTION: PROSPECTUS LIBRARY (TEL: 718-242-8002 OR 866-430-0686); CITI, ATTN: PROSPECTUS DEPT., BROOKLYN ARMY TERMINAL, 140 58TH STREET, 8TH FLOOR, BROOKLYN, NY, 11220, TEL: (800) 831-9146; OR DEUTSCHE BANK SECURITIES INC., 100 PLAZA ONE, JERSEY CITY, NJ 07311, ATTENTION: PROSPECTUS DEPARTMENT, TELEPHONE: (800) 503-4611.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.

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