TK

Image source: The Motley Fool. Thursday, July 30, 2026 at 11 a.m. ET President and Chief Executive Officer - Kenneth Hvid Chief Financial Officer - Brody Speers VP, Finance and Corporate Development - Ryan Hamilton Director of Research - Christian Waldegrave Operator: Welcome to the Teekay Group Second Quarter 2026 Earnings Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. Now for opening remarks and introductions, I would like to turn the call over to the company. Please go ahead. Lee Edwards: Before we begin, I would like to direct all participants to our website at www.teekay.com, where you will find a copy of the Teekay Group's second quarter 2026 earnings presentation. Kenneth will review this presentation during today's conference call. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from results projected by those forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the second quarter 2026 Teekay Group earnings presentation available on our website. I will now turn the call over to Kenneth, Teekay Corporation and Teekay Tankers' President and CEO, to begin. Kenneth Hvid: Thank you, Ed. Hello, everyone, and thank you very much for joining us today for the Teekay Group's second quarter 2026 earnings conference call. Joining me on the call today for the Q&A session is Brody Speers, Teekay Corporation's and Teekay Tankers' CFO; Ryan Hamilton, our VP, Finance and Corporate Development; and Christian Waldegrave, our Director of Research. Starting on Slide 3 of the presentation, we will cover Teekay Tankers' recent highlights. Teekay Tankers reported GAAP net income of $226 million or $6.49 per share and adjusted net income of $194 million or $5.56 per share in the second quarter, which was 50% better than our results posted last quarter. This quarter also marks the highest ever quarterly adjusted net income for the company, surpassing the previous record set in the first quarter of 2023. Spot tanker rates during the second quarter were the highest ever as well, averaging $109,200 per day and $74,100 per day for our Suezmax and Aframax LR2 fleets, respectively. With our significant spot exposure and a low free cash flow breakeven, we generated approximately $200 million in free cash flow from operations, which along with the vessel sale has increased our cash position to over $1.2 billion with no debt as of quarter end. We continue to execute on our fleet renewal strategy, which includes acquiring modern vessels by selling our older vessels. In the second quarter, we completed the previously announced transactions, including acquiring two Korean Suezmax newbuildings for a total of $190 million, which are expected to be delivered in 2027. And we sold one 2009-built Suezmax for $53.5 million, recording a gain on sale of $32.3 million during the quarter. At the beginning of July, we completed the previously announced VLCC sale for $84.5 million, and we expect to record a gain on sale of approximately $23 million in the third quarter. In addition, I want to highlight that all three Aframaxes acquired at the beginning of the year have been redelivered from the bareboat charters and are now being operating under Teekay technical and commercial management and trading in the strong spot tanker market. Looking ahead to the third quarter, we have secured spot rates of $104,800 per day and $59,900 per day for our Suezmax and Aframax LR2 fleets, respectively, for approximately 44% spot days booked. I'll touch on the market more in the next slide. Lastly, Teekay Tankers has declared its regular fixed quarterly dividend of $0.25 per share. Moving to Slide 4, we look at recent developments in the spot tanker market. Spot tanker rates in the second quarter of 2026 reached a record high with Teekay Tankers achieving average midsized tanker rates of approximately $91,000 per day. This beat the previous record of just over $60,000 per day in the first quarter of 2023 by 50%, highlighting the incredible strength in the spot tanker market. The strength continued in Suezmax tanker segments with rates remaining at near record levels so far in the third quarter. In the Aframax sector, we experienced some softening of rates mid-quarter due to a buildup of tonnage in the Atlantic and a lack of arbitrage opportunities. However, spot rates have strengthened again in the Aframax sector during July, particularly in the Atlantic, where we are currently seeing rates of over $100,000 per day. Turning to Slide 5. We highlight several geopolitical events, which have caused a series of disruptions to trade flows in recent months. While these events have not directly impacted the safety or operations of our vessels, they are driving volatility in the oil and tanker markets. The war between the U.S. and Iran has significantly impacted vessel transits and oil flows through the Strait of Hormuz, which I'll cover in more detail on the next slide. More recently, the resumption of attacks by Houthis in the Red Sea is impacting the flow of oil heading south via the Bab el-Mandeb Strait. Should this continue a safe outlet for Saudi Arabian crude loading from the Red Sea port of Yanbu through the Suez Canal, which would potentially add to tanker ton-mile demand through longer voyage distances. Recent months have also seen an increase in attacks on Russian oil infrastructure, including the targeting of vessels loading from the Caspian Pipeline Consortium, or CPC terminal in the Black Sea. As a result, we are now in an unprecedented situation whereby attacks on vessels are occurring in three separate regions that are vital to the global oil trade. Not only does this represent a severe risk to ships and crews operating in these regions, but also adds further complexity to global oil trade flows and creates fresh trading inefficiencies, which leads to further spot rate volatility. Despite the severe disruption to oil market, to oil exports and attacks on commercial vessels, the crude oil and shipping markets have remained resilient due to a combination of rising exports from other regions, oil inventory drawdowns and lower demand, particularly in Asia. These trends are most clearly demonstrated when looking at the United States and China. U.S. crude oil export reached a record high in June, supported by the release of oil from strategic reserves, which boosted midsized tanker demand in the Atlantic. Meanwhile, Chinese crude oil imports fell to a 10-year low in June due to refinery run cuts and inventory drawdowns, which offered some relief to global oil markets and prevented oil prices from spiraling out of control. How these dynamics play out in the coming months will be key to determining whether the oil market can continue to cope with the loss of oil from key export regions. Turning to Slide 6. We provide an update on the Strait of Hormuz disruption. As shown by the chart on the left, transit through the vital Strait of Hormuz waterway collapsed in March before undergoing a partial recovery in June after the U.S. and Iran signed a framework agreement aimed at ending hostilities. However, renewed hostilities at the start of July, including attacks on vessels transiting the Strait of Hormuz have led to a collapse of the agreement and a sharp slowdown in movement through the Strait. As mentioned on the previous slide, the oil market has adjusted to the loss of Middle Eastern exports through a combination of Saudi Arabia and the UAE diverting supply to alternative ports, including Yanbu and Fujairah, which lie outside of the Middle East Gulf and rising output from the Atlantic Basin. While this doesn't fully cover the loss of supply from the Middle East, a combination of longer voyage distances and increased trading inefficiencies have supported spot tanker rates. Finally, the tanker market has also benefited from vessels being kept off market, either because they are trapped behind the Strait of Hormuz or because they're empty and sitting idle outside of Hormuz, waiting for resolution. Should Asian refiners look to increase supply from the Atlantic Basin in light of new disruptions, a large number of tankers will have to ballast again to the Atlantic, which will stretch the fleet and give support to overall tanker demand. In short, the ongoing disruption to trade flows and resulting inefficiencies could benefit spot tanker rates. Turning to Slide 7, we look at the medium-term tanker supply and demand outlook. Given recent events in the Middle East and the ongoing war between Russia and Ukraine, it is difficult to predict the future pathway for oil supply and demand. However, it is clear that global oil inventories are being depleted due to the reduction in supply from the Middle East with strategic and commercial inventories in the OECD currently at a 20-year low. The eventual replenishment of these inventories once market conditions allow should provide a significant boost to oil and tanker demand. On the fleet supply side, a high level of new tanker orders in 2026 has expanded the order book, which now stretches into 2030. Scrapping activity remains limited, though pressure is building on the dark fleet of older vessels due to fewer trading markets as sanctions are lifted and as regulatory scrutiny increases. In addition, the tanker fleet continues to age with the average age of the midsized tanker fleet now the oldest in over 30 years. We believe the eventual removal of these older vessels should help in reducing the impact of rising tanker deliveries in the coming years. Turning to Slide 8, we continue to build value and have significant financial strength and optionality. This includes first, our ability to generate significant free cash flow with a low free cash flow breakeven. With the majority of our vessels trading in the strong spot market, we generated near record free cash flows in the first half of 2026. As an illustrative example, if we annualize our first half 2026 free cash flows, TNK would generate free cash flows of $684 million or almost $20 per share by the end of the year. With a free cash flow breakeven of approximately $9,700 per day over the next 12 months, we believe our operating leverage provides a powerful platform for continued cash generation and long-term value creation. Second, we're executing on our fleet renewal strategy by selling older assets in today's high asset price environment and recycling that capital to acquire more modern vessels in a disciplined manner. Looking back 12 months, we have sold nine older vessels for $369.5 million with combined gains of $125 million and acquired or committed to seven modern vessels for approximately $427 million, including two Suezmax newbuildings delivering in 2027. These transactions have lowered our average fleet age while maintaining significant operating leverage to the strong tanker market as highlighted by our record adjusted net income during the second quarter. Third, we have significant investment capacity, which allows us to incrementally progress our fleet renewal requirements while being patient for larger transactions in the future at more attractive entry points. The tanker shipping industry is capital-intensive, cyclical and increasingly dynamic, and we believe having significant investment capacity provides financial flexibility to pursue opportunities swiftly when the timing is right. Although the near-term tanker market outlook remains complex, unpredictable and subject to significant influence from geopolitical events, we believe Teekay Tankers' low cash flow breakeven levels, significant free cash flow generation and sizable investment capacity positions us well to simultaneously renew our fleet and create shareholder value. With that, operator, we are now available to take questions. Operator: Thank you. [Operator Instructions] We'll now go to your first question that will be coming from Omar Nokta with Clarksons Securities. Omar Nokta: Congrats on a record quarter. I had a couple of questions, maybe one a bit more market specific and then one on Teekay Tankers. And you referenced this in your presentation just in terms of how this market has really been evolving into something quite a bit different than what we've been used to seeing or at least saw in the past. Can you talk about how you're seeing kind of the Suezmax, Aframax segments react in this environment that we're in today? Specifically, now that you're maybe seeing a shift in some of those, as you referenced, the Saudi barrels going up to the Med now, there has been a lot of conversations in the past week or two about how VLCC activity has really picked up to handle some of those cargoes. But I guess maybe long term, how do you think about it if indeed that becomes a new trade, where do the Suezmax, Aframaxes fit in that market? Kenneth Hvid: Omar, thanks for the question here. I think it's a great question. As you say, we're definitely seeing patterns at the moment, which are unprecedented. I think if we look at what happened in the quarter at our fleet, we saw, as I said in my prepared remarks that Suezmaxes held up really well. And I think they were basically just following trailing the VLCC rates throughout. So we saw good utilization, good demand. They're still incredibly flexible vessels. There's a lot of ports where the VLCCs can't go in fully latent. So for example, if you take a VLCC through Suez up north, you can only do it partially latent. So you will need to do STS. All depending on where that VLCC is going, you will have a consideration whether it's more beneficial to use a Suezmax instead for a shorter route. I think you're going to see a lot of those decisions that are going to be going around. And that's before you get to what size of parcels that are being traded. So I think what we have seen for the first half of this year is basically, yes, the Suezmax is performing extremely well, being pulled up by a very, very strong VLCC market. And I think the Aframaxes, if you look at them, have always continued at time to fill some of the slots where, again, you have parcels, you have ports where the Suezmaxes can go into where the Aframaxes come in. For the first time in actually four years, we saw a bigger divergence on the Aframax versus the Suezmax rates. I think it's more better explained by actually that the Vs and the Suezmaxes outran the medium-sized segment or the Aframax segment. But when we look at it in absolute terms, of course, the Aframax rate was just very, very strong. And what we've seen just over the last couple of weeks is that we've actually seen a couple of examples where we are fixing now our Aframaxes out at higher rates than what we're fixing the Suezmax vessels out there. So all I can say is that it's incredibly dynamic, and we seem to be utilizing all of the assets on the water depending on what position that they're in. And I think all three sectors are performing extremely well. Omar Nokta: Yes, certainly. That's helpful detail in terms of just kind of thinking about this market. And I guess maybe as you were talking about, obviously, the balance sheet is exceptionally strong, the best it has ever been for Teekay, and you're continuing to just sort of fine-tune the business and then maybe there's an opportunity that comes your way at a better entry point than obviously where prices are today. But I guess maybe in that context, given capital allocation, the way it's set up at the moment, I wanted to ask about the dividend at this point. You've got the special payout that comes out in the first quarter of each year, at least that has been the case for the past three or four years. But in terms of, say, the base payout of $0.25, which has been in place since the beginning, I think, of '23, you're in a completely different world today, both earnings-wise and then balance sheet-wise. Does it make sense to revisit that base dividend? Not saying it needs to be transitioning to a high payout model, but do you see a world in which, say, TNK starts to ratchet up the payout on an ongoing basis rather than keep it flat at this $0.25 in the past three-plus years? Kenneth Hvid: Yes. First of all, I would say that obviously, I think we all agree this year has turned out much, much stronger for the tanker markets than any one of us saw and even what we saw when we reviewed it with our Board in March here. As I think we've had a good cadence in terms of having the fixed dividend and then the special discussion after the first quarter every year. We like that cadence, but it's clearly something that we need to continue to discuss with our Board at our Board meetings. We normally would signal it to the market that we do it on an annual basis. I don't expect that, that's going to change. But it's clear that the -- when you have this unprecedented cash flow generation, then, of course, we are intensifying our capital allocation discussions with the Board because the position we are in right now is a high-class problem to have, but we have generated a lot of excess cash here. So we're looking at it. Our plan when we entered into the year, and we're very clear on that, I think, on our previous calls was that we expected to have faster fleet renewal. What happens when we see rates like this going on for a couple of quarters is that we're also seeing the highest premiums for underwater tankers that we've seen in probably ever, I think, when you go back. So that makes it a little bit harder and requires that discipline to do that. But of course, we totally understand that by the end of the day, we work for our shareholders. We are always focused on, first and foremost, creating the value. We have a strong conviction in that eventually the market will recognize the value that we're creating as a company. And whether we change the dividend a little bit here, I think it just signals what we believe. But I think our cash flows that we generate, I think, is a clear demonstration of that we're creating a lot of value and making the company a lot more valuable. Operator: Next question will come from the line of Ken Hoexter with Bank of America. Ken Hoexter: I guess maybe just real quick, you mentioned some of the threats and dangers to the ships in multiple regions now that it has changed. Anything you can talk to in actions you've taken or routes that you've changed or insurance cost changes? That's just a preliminary question. My question was going to be on kind of your chart on Page 7, given the oil inventories, which are going to need restocking. Are you seeing accelerating drawdowns in this third quarter, which is normally kind of a period of fixing some kind of drawdowns? Or is that -- you mentioned what China was doing. Are you still seeing that kind of drawdown at this point? Kenneth Hvid: Ken, thanks for the questions. I'll take the first part, and then I'll pass it on to Christian for the second part. I think in terms of trade routes that we are seeing, I think what we are seeing in the world right now is that we're seeing an unprecedented number of attacks on commercial shipping in more regions than we've ever seen historically. And that's the fact. I think -- and that just means that there are fewer areas or more areas where we have to apply our security principles, which is no different from when we had specific regions in the past. I mean we will always go in and assess whether it was safe to go in. And we always have a policy that if we don't deem it to be safe for our crews and vessels, then we won't make the call. So as an example, we haven't been transiting south of through the Red Sea for a long time. We haven't gone into the Strait of Hormuz. That's a decision we've made. Some people have, we have not. There is the ongoing at the moment in the Black Sea, do you go into the terminals. That's a very dynamic situation as it is right now. And as of this morning, we saw that there were attacks into the med. So I would say, in terms of our -- how we approach it, it's always safety and security first, irrespective of what region we are looking at. And I think the sheer number of ports that we consider unsafe today, that's definitely at a higher number today than I can recall we've ever had. So the world is getting a lot more complex and much more dynamic because these windows they open and close, and that just leads to a lot of inefficiencies, as I said in my remarks. On your second question, I'll pass it on to Christian to weigh in on the inventory drawdowns and what we -- which numbers we know and what we don't know at the moment. Christian Waldegrave: Yes. Hi, Ken. With regards to the inventory situation, obviously, when inventories get restocked will depend on the situation in the Middle East. At the moment, obviously, we're still in a supply deficit with Hormuz being closed. So inventories continue to get drawn down. So the timing of when inventories might start to get restocked is wholly dependent on that situation getting resolved. Once that situation is resolved, there should theoretically be plenty of oil in the world to restock inventories. If you look at projections by the likes of the IEA, they're forecasting quite a big supply surplus next year should Middle East production get back to somewhat normal levels. At that point, obviously, if there's an oversupply of oil, it should push down prices and that will be the stimulus for oil inventories to start restocking again. And there's a big need for that we've shown on Slide 7. Oil inventories are at a 20-year low in the OECD. Look at the U.S. SPR is down to just over 300 million barrels, which is the lowest in 43 years, I think prior to COVID in 2020 was at 635 million barrels. So that's over 300 million barrels of oil that I think the U.S. would like to restock. China has been probably drawing down their inventories at a rate of about 1 million barrels per day for the past three months. So that's another 100 million barrels of oil. Japan has been drawing down stocks. Europe has released a lot of product inventory. So the need is definitely there, but the pace -- the timing of it will depend on a successful resolution to the situation in the Middle East and the pace of the restocking will depend on market conditions, specifically oil price. But I think it will definitely provide a tailwind to tanker demand as and when it comes, but I can't actually predict right now when that might happen. Ken Hoexter: Great. And then I guess, two quick ones. Kenneth, I think it's on Page 16, you had a 3Q outlook. Thanks for the detail there. Maybe you can just fill us in on your thoughts on what's included there. I know you've got 48% of days booked. I don't know if you want to talk about what the assumptions are to get to the full numbers. And then just -- I'm sorry, but a dumb one on dry docking. Is there any movement on those? I mean just you talked about these record rates in the third quarter and what is normally seasonally low pricing. So I understand why you ramp up the number of days. But given where rates are, is there anything you can do to push that out? Would you want to? Or do you definitely want the vessels ready for the fourth quarter run-up? Maybe just your thoughts on that timing. Kenneth Hvid: Yes, I can take the dry docking timing first, and then I'll pass on to Brody on some of the other details there. Yes, I think the reality is we pushed them out from Q2 to Q3. So we don't have a ton of flexibility. As you know, we have these anniversaries where everybody needs to dry dock their ships and ours are coming due this year. I'm glad we didn't -- that we did -- that we pushed it out to Q3, but I think we need to get on with them now and get them done and then get them out. And of course, the focus is on getting good voyages into the region where we're dry docking, get them turned around as quickly as possible and then get them out again and pick up a cargo. But yes, we need to get on with them. So I don't think we will see a lot of movement in the actual dry dockings that we're doing in Q3. Brody Speers: Yes. Hey Ken, I can take the outlook question. Yes, on the revenue side, as Ken mentioned, we have a number of dry dockings in Q3. So we're projecting 260 days of off-hire related to that. And outside of that, it's just the remaining unfixed days on the spot market. On the cost side, we're expecting OpEx and G&A to come down a little bit in Q3 versus Q2. So we'll see about a $3 million reduction there is what we're expecting and a little bit lower tax expense in Q3 as well. But otherwise, it's obviously largely rate dependent on where we end up. Operator: And it appears there are no additional questions at this time. I will turn the call back to the company for any additional and closing remarks. Kenneth Hvid: Well, thank you very much for tuning in today. We look forward to reporting back to you next quarter. Have a great day. Operator: This concludes today's call. Thank you for your participation. You may now disconnect. Before you buy stock in Teekay, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Teekay wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. 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Teekay (TK) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Teekay (TK) drew fresh attention from investors after reporting second quarter 2026 earnings. The company posted sales of US$379.51 million and net income of US$225.91 million for the period ended June 30. See our latest analysis for Teekay. The second quarter earnings release appears to have acted as a fresh catalyst for Teekay, with a 1 day share price return of 3.10% and a 7 day return of 4.02% helping the stock recover some ground after a 90 day period in which the share price declined 13.45%. Even so, momentum over the year remains strong, with a year to date share price return of 32.09% and a 1 year total shareholder return of 74.19% highlighting how recent gains fit into a much stronger longer term trend that includes a very large 5 year total shareholder return. If Teekay's moves have you thinking about where else capital might work hard, this could be a good time to scan 32 elite gold producer stocks for other potential opportunities. After that earnings jolt and a very large 5 year total return, Teekay still screens at a steep estimated discount to fair value. Is the market rightly cautious about this tanker operator, or is it mispricing the stock? Teekay last closed at $11.65 while screening on a very low P/E of 2.3x. That multiple sits well below both the company’s peers and the wider US Oil and Gas sector. The P/E ratio compares Teekay's share price with its earnings per share and is a common way investors gauge how much they are paying for each dollar of profit. For a tanker and marine services business that is currently profitable, a low P/E can suggest the market is not assigning a high price to those earnings. Here, the contrast is clear. Teekay trades on a P/E of 2.3x, compared with a peer average of 13.4x and a US Oil and Gas industry average of 14x. This is a very wide gap and points to the market valuing Teekay's earnings at a significant discount to many similar companies. See what the numbers say about this price — find out in our valuation breakdown. Result: Price-to-Earnings of 2.3x (UNDERVALUED) However, Teekay's heavy exposure to crude oil shipping cycles and reliance on a relatively concentrated fleet could quickly pressure earnings if charter demand or day rates weaken. Find out about the key risks to this Teekay narrative. While the P/E of 2.3x makes Teekay look cheap against peers, the SWS DCF model presents an even starker picture. At a share price of $11.65, the stock is described as trading at a very large discount to an estimated future cash flow value of $73.51. Could the market be pricing in risks that this model does not fully capture? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Teekay for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With Teekay presenting both appealing valuation signals and clear exposure to shipping cycle risks, it may be useful to conduct your own due diligence and form an independent view using the 2 key rewards and 2 important warning signs. If Teekay has sharpened your focus on where capital works hardest, do not stop here. Broader research can help you stress test your thinking and spot fresh angles. Target potential mispricings by scanning 55 high quality undervalued stocks that combine solid fundamentals with prices that may not fully reflect their financial profile. Strengthen portfolio resilience by reviewing 81 resilient stocks with low risk scores that score well on stability and financial risk metrics. Catch promising stories earlier by checking the screener containing 19 high quality undiscovered gems before they sit firmly on every investor's radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TK. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Teekay Corporation Ltd.? Here are five stocks we like better. Teekay Tankers delivered record results, with second-quarter adjusted net income of $194 million, or $5.56 per share, up 50% sequentially. The company generated about $200 million in operating free cash flow and ended the quarter with more than $1.2 billion in cash and no debt. Historically strong spot tanker rates drove performance, with average rates of $109,200 per day for Suezmax vessels and $74,100 for Aframax LR2 vessels. Geopolitical disruptions, longer trade routes and constrained vessel availability continue to support tanker demand and pricing. Teekay is renewing its fleet by selling older ships and acquiring modern vessels, including two Suezmax newbuildings for $190 million. It maintained its regular $0.25-per-share quarterly dividend while continuing to review broader shareholder distributions. These 3 Beaten-Down Stocks Just Saw $25 Million in Insider Buying Teekay (NYSE:TK) reported record second-quarter results at its Teekay Tankers business, supported by historically strong spot tanker rates, significant spot-market exposure and a debt-free balance sheet. Teekay Tankers posted GAAP net income of $226 million, or $6.49 per share, for the second quarter of 2026. Adjusted net income was $194 million, or $5.56 per share, representing a 50% increase from the prior quarter and the company’s highest quarterly adjusted net income on record, President and CEO Kenneth Hvid said. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now These 3 Stocks Boosting Buybacks Have Rallying Potential The company generated approximately $200 million in free cash flow from operations during the quarter. Combined with proceeds from vessel sales, that lifted cash to more than $1.2 billion at quarter-end, with no debt, according to Hvid. Spot tanker rates reached record levels during the quarter. Teekay Tankers reported average rates of $109,200 per day for its Suezmax fleet and $74,100 per day for its Aframax LR2 fleet. Overall mid-size tanker rates averaged about $91,000 per day, exceeding the previous record set in the first quarter of 2023 by roughly 50%. → Microsoft Just Flipped the AI Spending Narrative Overnight 3 Big Dividend Hikes Hit the Market—1 Just Doubled Its Payout For the third quarter, the company had secured spot rates of $104,800 per day for Suezmax vessels and $59,900 per day for Aframax LR2 vessels, based on approximately 44% of spot days booked. Hvid said Suezmax rates had remained near record levels early in the third quarter, while Aframax rates softened temporarily before strengthening again during July, particularly in the Atlantic, where rates had exceeded $100,000 per day. “All three sectors are performing extremely well,” Hvid said during the question-and-answer session, referring to VLCCs, Suezmaxes and Aframaxes. He said Suezmaxes remain flexible because they can access ports that fully laden VLCCs cannot, while Aframaxes can serve cargo sizes and ports that may not accommodate larger vessels. → Carrier Earnings Could Send the Stock to a New All-Time High Teekay Tankers continued its fleet renewal strategy during the quarter, selling older vessels while adding or committing to more modern assets. The company completed the acquisition of two Korean Suezmax newbuildings for a combined $190 million. Those vessels are expected to be delivered in 2027. It also sold a 2009-built Suezmax for $53.5 million, recording a $32.3 million gain on the transaction during the second quarter. In early July, the company completed the previously announced sale of a VLCC for $84.5 million and expects to record an approximately $23 million gain in the third quarter. Three Aframaxes acquired at the beginning of the year have returned from bareboat charters and are now operating under Teekay’s technical and commercial management in the spot market, Hvid said. Over the past 12 months, Teekay Tankers sold nine older vessels for $369.5 million, generating combined gains of $125 million. It acquired or committed to acquire seven modern vessels for approximately $427 million, including the two Suezmax newbuildings. The company said its free-cash-flow breakeven is approximately $9,700 per day over the next 12 months. Using first-half 2026 free cash flow as an illustrative annualized measure, Teekay Tankers said it could generate $684 million, or nearly $20 per share, by year-end. Management said geopolitical events were creating volatility and inefficiencies in global oil and tanker markets. Hvid cited the war between the United States and Iran, renewed Houthi attacks in the Red Sea, and increased attacks on Russian oil infrastructure and vessels loading from the Caspian Pipeline Consortium terminal in the Black Sea. According to Hvid, vessel transits through the Strait of Hormuz collapsed in March, partially recovered in June following a U.S.-Iran framework agreement, and slowed sharply again after renewed hostilities and attacks on transiting vessels in early July. Saudi Arabia and the United Arab Emirates have diverted some oil supplies to alternative ports, including Yanbu and Fujairah, while increased Atlantic Basin production has also helped offset some lost Middle East supply. Management said longer voyage distances, vessels held out of the market and additional trading inefficiencies have supported tanker rates. Hvid said Teekay has not been transiting vessels south through the Red Sea for an extended period and has not entered the Strait of Hormuz. The company assesses safety conditions by region and will not make a port call if it does not consider it safe for vessels and crews, he said. Christian Waldegrave, Teekay’s director of research, said oil inventories continue to decline while Hormuz remains closed. OECD inventories are at a 20-year low, while U.S. strategic petroleum reserves have fallen to just over 300 million barrels, their lowest level in 43 years, he said. Waldegrave said the timing of inventory replenishment depends on resolution of the Middle East situation and oil-market conditions. He added that restocking could provide a tailwind for tanker demand when supplies normalize and prices encourage inventory rebuilding. Teekay Tankers declared its regular fixed quarterly dividend of $0.25 per share. Asked whether the company could revisit that base dividend amid higher earnings and cash levels, Hvid said management continues to discuss capital allocation with the board but expects to maintain its annual cadence for evaluating shareholder distributions. The company expects about 260 off-hire days in the third quarter related to scheduled dry dockings. CFO Brody Speers said Teekay expects operating expenses and general and administrative expenses to decline by about $3 million in the third quarter compared with the second quarter, along with somewhat lower tax expense. Teekay Corporation (NYSE: TK) is a global provider of marine transportation and offshore production solutions for the energy industry. Founded in 1973 and headquartered in Vancouver, Canada, Teekay designs, owns and operates a diversified fleet of tankers and floating production, storage and offloading (FPSO) units. The company specializes in the movement and storage of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), offering integrated services that range from tanker transport to offshore production and marine maintenance. Teekay's core business is organized into three operating segments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Teekay Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly adjusted net income driven by spot tanker rates that surpassed previous 2023 highs by 50%. Performance was bolstered by significant spot market exposure and a low free cash flow breakeven of approximately $9,700 per day. Geopolitical conflicts in the Strait of Hormuz, Red Sea, and Black Sea have created unprecedented trading inefficiencies and increased ton-mile demand. Management noted that while Suezmax rates remained near record levels, Aframax rates saw mid-quarter softening due to Atlantic tonnage buildup before recovering in July. The market has remained resilient despite Middle Eastern export losses due to rising Atlantic Basin output and significant global inventory drawdowns. Strategic fleet renewal continued with the sale of older assets at high prices to fund the acquisition of modern vessels, including two Suezmax newbuildings for 2027 delivery. Third quarter spot bookings show continued strength with Suezmax rates secured at $104,800 per day for approximately 44% of available days. Management anticipates a significant boost to future tanker demand when global oil inventories, currently at 20-year lows, eventually begin a restocking phase. The outlook assumes continued volatility as vessels remain trapped or idle outside the Strait of Hormuz, further stretching global fleet capacity. Fleet supply growth is expected to be partially offset by the aging of the midsized tanker fleet, which is currently at its oldest average age in over 30 years. Q3 projections include 260 days of off-hire related to scheduled dry dockings that were previously deferred from the second quarter. Recorded a $32.3 million gain on the sale of a 2009-built Suezmax and expects a $23 million gain from a VLCC sale in the third quarter. Attacks on commercial vessels in three separate vital regions represent a severe risk to crews and have forced the company to avoid transiting the Red Sea and Strait of Hormuz. The company ended the quarter with a cash position of over $1.2 billion and zero debt, providing significant investment capacity for future market opportunities. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that Suezmaxes are benefiting from VLCC strength and port flexibility where larger tankers cannot enter fully laden. Noted a rare divergence where Aframaxes recently fixed at higher rates than Suezmaxes, highlighting the highly dynamic and inefficient nature of current trade routes. Management acknowledged that the current cash generation creates a 'high-class problem' and necessitates intensified capital allocation discussions with the Board. Indicated they prefer the current annual cadence for special dividend reviews but will continue to evaluate the $0.25 base payout given the record balance sheet strength. Stated that restocking is wholly dependent on a resolution in the Middle East; until then, the market remains in a supply deficit. Highlighted that the U.S. Strategic Petroleum Reserve is at its lowest level in 43 years, representing over 300 million barrels of potential future tanker demand.

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record high quarterly adjusted net income of $194 million, surpassing previous record by 50%. Generated approximately $200 million in free cash flow from operations with a low free cash flow breakeven of $9,700 per day. Strong spot tanker rates averaging $109,200 per day for Suezmax and $74,100 per day for Afromax LR2 fleets. Executed fleet renewal strategy by selling nine older vessels for $369.5 million and acquiring seven modern vessels for $427 million, lowering average fleet age. Significant investment capacity with over $1.2 billion in cash and no debt, providing financial flexibility for future opportunities. Geopolitical disruptions, including attacks in the Strait of Hormuz, Red Sea, and Black Sea, create operational risks and uncertainty. Spot tanker rates softened in the Afromax sector mid-quarter due to tonnage buildup and lack of arbitrage opportunities. High asset prices for modern vessels make fleet renewal more expensive and require disciplined capital allocation. Global oil inventories are at 20-year lows, and the timing of restocking is uncertain, dependent on Middle East resolution. Increased dry docking days (260 days in Q3) lead to off-hire time, temporarily reducing revenue generation. Here are the key highlights from the Teekay Corp Ltd (NYSE:TK) Q2 2026 earnings call, presented as summarized Q&A pairs. Warning! GuruFocus has detected 3 Warning Sign with TK. Is TK fairly valued? Test your thesis with our free DCF calculator. Q: Can you talk about how the Suezmax and Aframax segments are reacting in this unprecedented environment, especially with a potential shift of Saudi barrels to the Med and increased VLCC activity?A: (Kenneth, President and CEO) It's a great question. We are seeing unprecedented patterns. Suezmax rates have held up incredibly well, trailing strong VLCC rates due to their flexibility in ports where VLCCs can't go fully laden. Aframaxes have also been very strong in absolute terms, though we saw a divergence for the first time in four years. However, just in the last couple of weeks, we've seen examples of our Aframaxes fixing at higher rates than our Suezmaxes. The market is incredibly dynamic, and all three sectors are performing extremely well. Q: Given the exceptionally strong balance sheet and record cash flow generation, does it make sense to revisit the base dividend of $0.25 per share, which has been flat for over three years?A: (Kenneth, President and CEO) We agree this year has turned out much stronger than anyone anticipated. We like the current cadence of a fixed dividend with a special dividend discussion after Q1 each year. However, with this unprecedented cash flow generation, we are intensifying capital allocation discussions with our board. While we are disciplined on fleet renewal, especially with high asset prices, we understand we work for our shareholders. Our strong cash flows are a clear demonstration of the value we are creating. Q: Can you discuss the actions you've taken regarding the threats and dangers to ships in multiple regions, and are you still seeing accelerating oil inventory drawdowns in Q3?A: (Kenneth, President and CEO & Christian Waldergrave, Director of Research) On safety, we are seeing an unprecedented number of attacks on commercial shipping. Our policy is always safety first; we haven't transited the Red Sea or entered the Strait of Hormuz for a long time. The number of ports we consider unsafe is higher than ever, leading to significant market inefficiencies. On inventories, we are still in a supply deficit with Hormuz being closed, so inventories continue to be drawn down. The timing of restocking depends entirely on a resolution in the Middle East. The need is massive, with OECD inventories at a 20-year low and the US SPR at its lowest in 43 years, which will provide a major tailwind for tanker demand when it comes. Q: Regarding the Q3 outlook with 44% of spot days booked, can you provide more detail on the assumptions? Also, on dry docking, given record rates, can you push those out?A: (Kenneth, President and CEO & Brodie Spears, CFO) On dry docking, we already pushed them from Q2 to Q3, so we have limited flexibility. We need to get them done and get the vessels back out to pick up cargo. On the outlook, we are projecting 260 days of off-hire related to dry dockings in Q3. We expect OpEx and G&A to come down by about $3 million in Q3 versus Q2, with slightly lower tax expense as well. The final result is largely dependent on where spot rates end up. Q: How are you thinking about the medium-term tanker supply and demand outlook given the current geopolitical disruptions?A: (Kenneth, President and CEO) It is difficult to predict the future pathway for oil supply and demand. However, global oil inventories are being depleted and are at a 20-year low. The eventual replenishment of these inventories should provide a significant boost to tanker demand. On the supply side, the order book has expanded into 2030, but the fleet is aging, with the average age of mid-sized tankers being the oldest in over 30 years. We believe the eventual removal of these older vessels will help offset the impact of new deliveries. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

HAMILTON, Bermuda, July 14, 2026 (GLOBE NEWSWIRE) -- Teekay Corporation Ltd. (Teekay) (NYSE:TK) and Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK) (collectively, the Teekay Group) plan to release their financial results for the second quarter 2026 after market close on Wednesday, July 29, 2026. The Teekay Group plans to host a conference call on Thursday, July 30, 2026 at 11:00 a.m. (ET) to discuss its results for the second quarter 2026. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options: By dialing 1(800) 330-6710, or 1(647) 361-1999 if outside of North America, and quoting conference ID code 6229932. By accessing the webcast, which will be available on the Teekay Group’s website at www.teekay.com (the archive will remain on the website for a period of one year). The accompanying Teekay Group second quarter 2026 earnings presentation will also be available at www.teekay.com in advance of the conference call start time. About Teekay Teekay is a leading provider of international crude oil marine transportation and marine services. Teekay provides these services through its controlling ownership interest in Teekay Tankers, a leading owner and operator of mid-sized crude tankers. Teekay Tankers has a fleet of 34 double-hull tankers (including 14 Suezmax tankers,18 Aframax / LR2 tankers, and two Suezmax tanker newbuilds) and has three time chartered-in tankers. In addition, Teekay Tankers manages and operates vessels for the Australian government and Australian energy companies as part of the marine services provided by Teekay Tankers and owns a ship-to-ship transfer business that performs full-service lightering and lightering support operations in the U.S. Gulf and Caribbean. Teekay’s common shares trade on the New York Stock Exchange under the symbol “TK”. About Teekay Tankers Teekay Tankers has a fleet of 34 double-hull tankers (including 14 Suezmax tankers, 18 Aframax / LR2 tankers, and two Suezmax tanker newbuilds), and also has three time chartered-in oil tankers. Teekay Tankers’ vessels are typically employed through a mix of spot tanker market trading and short- or medium-term fixed-rate time charter contracts. In addition, Teekay Tankers manages and operates vessels for the Australian Government and Australian energy companies as part of the marine services provided by the Company and owns a ship-to-ship transfer business that performs full service lightering and lightering support operations in the U.S. Gulf and Caribbean. Teekay Tankers was formed in December 2007 by Teekay Corporation Ltd. Teekay Tankers’ Class A common shares trade on the New York Stock Exchange under the symbol “TNK.” For Investor Relations enquiries contact: E-mail: [email protected]: www.teekay.com

Interested in Teekay Corporation Ltd.? Here are five stocks we like better. Teekay Tankers posted a very strong first quarter with GAAP net income of $154 million and adjusted net income of $128 million, helped by spot tanker rates averaging about $61,000 per day. The company also generated roughly $143 million in free cash flow and ended the quarter with nearly $1 billion in cash and no debt. Management sees second-quarter results improving further as tanker rates have moved to record levels, with spot bookings already secured at $141,800 per day for VLCCs, $121,800 for Suezmaxes, and $98,000 for Aframax/LR2 vessels. Teekay also declared a $0.25 regular dividend plus a $1 special dividend. The company is continuing fleet renewal while maintaining a strong balance sheet, buying modern vessels and selling older ships to upgrade its fleet. Teekay said it remains heavily exposed to the spot market, which management views as a key advantage given the current supply disruption and tight tanker market. These 3 Stocks Boosting Buybacks Have Rallying Potential Teekay (NYSE:TK) highlighted sharply stronger tanker market conditions, a debt-free balance sheet and continued fleet renewal activity during its first-quarter 2026 earnings call, as management said spot tanker rates moved near record levels in the quarter and strengthened further early in the second quarter. President and CEO Kenneth Hvid said Teekay Tankers reported GAAP net income of $154 million, or $4.42 per share, and adjusted net income of $128 million, or $3.69 per share, for the first quarter. He said those results were more than $30 million higher than the prior quarter and two to three times the results posted in the same period a year earlier. → Micron Investors Face a High-Stakes Moment After the Latest Rally 3 Big Dividend Hikes Hit the Market—1 Just Doubled Its Payout Hvid said spot tanker rates averaged approximately $61,000 per day across the company’s mid-sized tanker fleet during the quarter, which he described as near record highs for a first quarter. With significant spot exposure and a low free cash flow breakeven, he said Teekay Tankers generated about $143 million in free cash flow from operations, lifting its cash position to just under $1 billion with no debt at quarter-end. Management said the company continued to pursue a strategy of acquiring more modern vessels while selling older tonnage. Hvid said Teekay Tankers entered into agreements to acquire two Korean resale Suezmax newbuildings for a total of $190 million, with expected delivery in 2027. → How Bad Could Tesla’s Cybertruck Recall Be for Shares? NFL and WWE Land on ESPN—The Impact on Disney and TKO Stocks The company also sold one 2009-built Suezmax for $53.5 million, which is expected to result in a $32.5 million gain on sale to be recorded in the second quarter. Hvid said Teekay Tankers completed previously announced sales of two Suezmax tankers for total proceeds of $73 million and recorded gains on sales of $22.7 million in the first quarter. So far this year, Hvid said the company has acquired or agreed to acquire five modern vessels for a total commitment of $332 million and has sold or agreed to sell four vessels for $211 million. Over the last 12 months, he said Teekay Tankers has sold or agreed to sell 11 vessels for $432 million, with combined gains of $139 million, while acquiring or agreeing to acquire eight vessels for $490 million. → Reading the Stripes: Is The Industrial Recession Over? The company also took advantage of the strong market by outchartering one Suezmax vessel for $80,000 per day for 10 to 12 months and, more recently, one Aframax vessel for $60,000 per day for 12 months. Looking ahead, Hvid said Teekay Tankers expects even better results in the second quarter, with tanker rates reaching record levels. As of the call, the company had secured spot rates of $141,800 per day for VLCCs, $121,800 per day for Suezmaxes and $98,000 per day for Aframax/LR2 vessels. Hvid said approximately 71% of VLCC spot days had been booked and, on average, around 57% of Suezmax and Aframax/LR2 spot days had been booked. Teekay Tankers declared its regular fixed quarterly dividend of $0.25 per share and a special dividend of $1 per share, which Hvid said was based on the prior year’s financial results. Hvid said first-quarter spot tanker rates were close to record highs for the period, trailing only the first quarter of 2023. He said rates were already firm before the recent U.S.-Iran conflict due to rising seaborne oil trade volumes, tighter sanctions against Russia, Iran and Venezuela, and fleet consolidation in the VLCC sector. Hvid said the effective closure of the Strait of Hormuz created an “unprecedented oil supply disruption.” He said attacks beginning Feb. 28 and subsequent military developments in the Middle East led to a significant decline in vessel traffic through the strait, reducing Middle East oil production and exports. According to Hvid, crude oil exports from the region have fallen by approximately 10 million barrels per day compared with pre-war levels. He said that decline has been partially offset by increased crude exports from the Atlantic Basin and the West Coast of the Americas, which have risen by about 4.5 million barrels per day since the start of the war. Hvid said U.S. Gulf crude exports reached a record 5 million barrels per day in April 2026, helped by the release of oil from the U.S. Strategic Petroleum Reserve. Management said longer voyage distances and trading inefficiencies have supported tanker rates. Hvid said Teekay counted 100 tankers of Aframax size or larger trapped west of Hormuz, including 59 VLCCs, and another 86 vessels sitting idle outside the Strait of Hormuz or off the west coast of India in anticipation of a potential reopening. Hvid said the timing and pace of any reopening of the Strait of Hormuz make the medium-term tanker demand outlook difficult to assess. However, he said global commercial and strategic oil inventories are being depleted, potentially creating future tanker demand as inventories are replenished. He also said some countries may seek to diversify crude import sources or expand strategic reserves, which could lengthen voyage distances. On the supply side, Hvid said the tanker order book continues to expand, but the global tanker fleet is aging rapidly. He said the order book is largely offset by the number of compliant tankers reaching 20 years of age over the same period, though the timing of vessel exits remains uncertain. In response to analyst questions, Hvid said elevated spot rates, time-charter rates and asset values make investment decisions more complex. He said Teekay Tankers is progressing fleet renewal more slowly on the buying side than it had hoped, while trying to preserve scale, relevance and earnings capacity. “We are very keen on preserving scale relevance and earnings capacity,” Hvid said, adding that the company has “no appetite” to reduce its current level of market exposure. He said more than 80% of the fleet remains in the spot market. Asked about dividends and the company’s growing cash position, Hvid said Teekay Tankers has been consistent in its dividend approach over the past three years. He said the industry is capital-intensive and cyclical, and that a strong cash position gives the company capacity to act when opportunities arise. “You can do a lot more with $1 billion than you can do with $500 million,” Hvid said, adding that management expects to revisit potential uses of cash next year while maintaining what he called an “incredibly strong balance sheet.” Teekay Corporation (NYSE: TK) is a global provider of marine transportation and offshore production solutions for the energy industry. Founded in 1973 and headquartered in Vancouver, Canada, Teekay designs, owns and operates a diversified fleet of tankers and floating production, storage and offloading (FPSO) units. The company specializes in the movement and storage of crude oil, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), offering integrated services that range from tanker transport to offshore production and marine maintenance. Teekay's core business is organized into three operating segments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Teekay Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Image source: The Motley Fool. Thursday, May 14, 2026 at 11 a.m. ET Chief Executive Officer — Kenneth Hvid Chief Financial Officer — Brody Speers Vice President, Finance & Corporate Development — Ryan Hamilton Director of Research — Christian Waldegrave Kenneth Hvid: Thank you, Ryan. Hello, everyone, and thank you very much for joining us today for the Teekay Group's first quarter 26 Earnings Conference Call. Joining me on the call today for the Q&A session is Brody Speers, Teekay Corporation's and Teekay Tankers' CFO. Ryan Hamilton, our VP finance and corporate development and Christian Waldegrave, our director of research. Starting on slide 3 of the presentation, we will cover Teekay Tankers' recent highlights. Teekay Tankers reported GAAP net income of $154 million or $4.42 per share and adjusted net income of $128 million or $3.69 per share in the first quarter, which are over $30 million better than last quarter and 2 to 3x the results posted in the same period of the prior year. Spot tanker rates during the first quarter were near record highs for first quarter, averaging approximately $61 thousand per day across our midsized tanker fleet. With our significant spot exposure and a low free cash flow breakeven, we generated approximately $143 million in free cash flow from operations, which has increased our cash position to just shy of $1 billion with no debt as of quarter end. We continue to execute on our fleet renewal strategy, which includes acquiring modern vessels while selling our older vessels. I am pleased to announce that we have entered into agreements to acquire 2 Korean resale Suezmax newbuildings for a total of $190 million which are expected to be delivered in 2027. We also sold 1 2009-build Suezmax for $53.5 million, resulting in an expected gain on sale of $32.5 million that will be recorded in Q2 2026. In addition, we have completed the previously announced sales of 2 Suezmax tankers for total proceeds of $73 million and recorded gains of sales of $22.7 million in the first quarter So far this year, we have acquired or agreed to acquire 5 modern vessels for a total commitment of $332 million and have sold or agreed to sell 4 vessels for $211 million. We also took advantage of the strong spot market as we opportunistically outchartered 1 Suezmax for $80 thousand per day for 10 to 12 months. And this past week, we outchartered 1 Aframax vessel for $60 thousand per day for 12 months. Looking ahead to the second quarter, we expect even better results with tanker rates reaching record levels. So far in the second quarter, we have secured spot rates of $142 thousand $122 thousand and $98 thousand per day for our VLCC, Suezmax, and Aframax LR2 fleets, respectively, with approximately 71% of spot days booked for our VLCC and on average around 57% of spot days booked for all Suezmax and Aframax LR2 fleet. Lastly, Teekay Tankers has declared its regular fixed quarterly dividend of $0.25 per share. And in addition, we declared a special dividend of $1.00 per share, which, like prior years, is based on the previous year's financial results. Moving to slide 4, we look at recent developments in the spot tanker market. Spot tanker rates in Q1 were close to record highs for first quarter. Just behind rates seen in 2023. It is worth noting that spot rates were very firm even before the recent US Iran conflict. Due to a combination of rising seaborne oil trade volumes, tightening of sanctions against Russia, Iran, and Venezuela, and the impact of fleet consolidation in the VLCC sector. In particular, the removal of President Nicolas Maduro of Venezuela by The United States and the subsequent freeing up of Venezuelan crude oil exports to move on compliant tonnage to destinations such as The US Gulf, Europe, and India benefited midsized crude tanker demand in Q1. Midsized spot tanker rates have continued to rise at the start of Q2 due to the impact of recent events in The Middle East reaching record highs of $120 thousand-plus per day during April, I will talk more about the reasons for these record high rates in the next few slides. Turning to slide 5, we are experiencing an unprecedented oil supply disruption with the effective closure of the Strait of Hormuz. On February 28, the United States and Israel launched a series of attacks against Iran. Targeting military and government sites. Iran subsequently responded by attacking a range of military and civilian assets across the Middle East region, including vessels transiting the Strait of Hormuz. Since then, The US has also implemented a blockade aimed at preventing ships from entering or leaving Iranian ports. The net result has been a significant drop in vessel traffic through the Strait of Hormuz, which in turn has led to a sharp decline in Middle East oil production and exports, while Saudi Arabia and The UAE have been able to divert some of their export volumes to ports outside of the Middle East Gulf namely Yanbu in the Red Sea and Fujairah in the Gulf of Oman, Total crude oil exports from the region have fallen approximately 10 million barrels per day compared to prewar levels. Partially offsetting the supply loss has been a corresponding increase in crude oil exports from the Atlantic Basin and the West Coast Of The Americas where exports have increased by approximately 4.5 million barrels per day since the start of the war. This has been most evident in The US Gulf, where crude oil exports reached a record high of 5 million barrels per day in April 2026. Boosted by the release of oil from the US Strategic Petroleum Reserve. While the increase in supply from the Atlantic is nowhere near enough, to offset the loss of exports from the Middle East Gulf, the resultant increase in voyage, distances and associated trading inefficiencies have combined to boost spot tanker rates as detailed on the next slide. Turning to slide 6. We review the trade inefficiencies which have supported tangle rates. First, a number of vessels are trapped and unable to exit the Middle East Gulf via the Strait of Hormuz, which has reduced effective fleet supply. And at the time of writing, we count a total of 100 tankers of Aframax size or larger, which are trapped west of Hormuz of which 59 are VLCCs, accounting for around 8% of the non- sanctioned fleet. In addition, there are a further 86 vessels of Aframax size or larger, which are currently empty and sitting idle just outside the Strait of Hormuz or off the West Coast Of India in anticipation of a potential reopening, of which over 50 are VLCCs. Secondly, the rush to find replacement barrels, particularly by Asian refiners, which have been most impacted by the loss of Middle East oil, has led to an increase in vessels ballasting long haul from the Pacific Basin to the Atlantic in order to secure cargoes. A large proportion of these vessels are then saving back to Asia once loaded in order to meet Asian refinery demand. Finally, the increase in vessels loading in the Atlantic sailing long haul to Asia has not been limited to the VLCC sector as we have also seen a significant lengthening in laden voyage distances for Aframaxes and Suezmaxes. As shown by the chart, the average Aframax voyage distances for vessels loading in The US Gulf have increased by 30% year-on-year while a record 69 Suezmaxes loaded from The US Gulf during April. Many of which are fixed for Asian destinations. We have even seen 5 Suezmax cargoes load from The US Gulf and transit to Asia via the Panama Canal. Which is a very unusual trade and highlights the lengths to which refiners in Asia are willing to go in order to make up for the shortfall in Middle East oil supply. Turning to slide 7, we look at the medium term tanker supply and demand outlook. Given the ongoing conflict in The Middle East and the high degree of unpredictability regarding when and how the conflict may be resolved, it is very difficult to assess what will happen to tanker tonne mile demand should the Strait of Hormuz reopen as it will depend on how quickly vessel transits resume and the pace at which Middle East oil producers can resume exports. What we do know is that global oil inventories are being depleted across both commercial and strategic stockpiles, This could create additional tanker demand once the conflict is resolved as these inventories will have to be replenished. In addition, a push for energy security could lead to some countries building or expanding their strategic reserves in order to safeguard any future disruption. Some countries may also look to diversify their sources of crude oil imports which could lead to longer voyage distances and therefore higher ton mile demand in the medium term. On the fleet supply side, the tanker order book continues to expand due to the relatively high pace of new vessel ordering in the recent months. However, a lack of scrapping means that the tanker fleet is rapidly aging. With the average age of the global tanker fleet currently the highest in over 30 years. As such, the tanker order book is largely offset by the number of compliant tankers reaching age 20, over the same time frame in which the order book will deliver. Not to mention the large dark fleet of tankers which already has an average age of well over 20 years. In short, while the tanker order book appears large on the surface, these vessels are needed to replace the older fleet of tankers, which are approaching the end of their trading lives in the coming years. Though the timing of when vessels will exist the fleet is uncertain. Turning to Slide 8. We highlight our capability to create long term shareholder value. This includes: first, our ability to generate significant free cash flow with a low free cash flow breakeven. In the last 4 quarters, we have generated $36 million or $11.14 per share in free cash flow or nearly a 30% free cash flow yield based on the closing share price at the end of Q1 25. With our new outcharters and no debt, our current free cash flow breakeven has decreased to approximately $8.2 thousand per day for the next 12 months, which allows us to generate significant cash flows in almost any tanker market. To emphasize the impact, every $5 thousand per day increase in spot tanker rates above our low free cash flow breakeven is expected to produce about $53 million or $1.53 per share of annual free cash flow. Second, we are progressing our fleet renewal by selling older assets in today's high asset price environment and recycling that capital to acquire more modern vessels in a disciplined manner. This recalibration reduces our average age while maintaining significant operating leverage to the strong spot market. Looking back 12 months, we have sold or agreed to sell 11 vessels for $432 million with combined gains of $139 million and acquired or agreed to acquire 8 vessels for $490 million. Going forward, we expect to maintain our earnings capacity with this approach of trading in older assets for more modern vessels. Third, we have significant investment capacity, which allows us to incrementally progress our fleet renewal requirements while being patient. For larger transactions in the future at more attractive entry points. The tanker shipping industry is capital intensive and cyclical, and we believe having significant investment capacity allows us to act quickly when the timing is right. As we look ahead, Teekay has significant operating leverage in this strong market environment and a strong financial footing, which positions the company well to continue renewing our fleet earning cash flow, building intrinsic value and returning capital to shareholders. With that, operator, we are now available to take questions. Operator: Thank you. We will take our first question from John Chappell with Evercore ISI. Analyst (Jonathan Chappell): Thank you. Good morning. Let's start with that last part. I mean, it is something that we have spoken about in several calls, but now that the market's taken this next level higher, so spot, time charter, and asset values, it seems like the investment decision becomes even more complex because there is so many geopolitical factors involved. You bought those 27 Suezmaxes, but does it feel in this period of kind of uncertainty and maybe elevated everything, that we just need to wait a little bit longer? Before some of the significant investment capacity is implemented. Kenneth Hvid: Yeah, John. Good morning. I think you hit the nail on the head here. I think that is what every operator, every owner is looking at the moment. I think as we, I think, finished last year, we were probably all the mindset that we could enter into a softer year this year or more flat year. And then we had some new events that is certainly as we have seen, bring us to record rates in Q1 and into Q2 here. And that has had an impact, as always, on where asset prices are trading. So the effect we have seen, as you know, is that we have seen very high secondhand values for prompt delivery. We are trying to capture that, and there is always this balancing of how much is in the price of the secondhand assets. We sold 1 of our of our oldest vessels and captured a record rate on that. And then we saw an opportunity to redeploy into what we think is a is a fairly near term good opportunity of a quality asset with it on a ship that we are happy to own for the next 20 years in our fleet. So I think it is a little bit of that parking and tackling at a higher watermark than what we expected we would probably have seen. But I would say it is probably-- it is more-- it is not a higher watermark as opposed to a lower watermark in terms of our position at Teekay. We knew we had to get on with our fleet renewal, and that is what we are starting to do. But as I said in my prepared remarks, we are probably going slower on the buying side than we would have hoped to do. Yep. That makes sense. Analyst (Jonathan Chappell): Just my follow-up, I am trying to understand the operational impact. Yes. On the trade inefficiencies. And although I do not think anybody would, be upset with $98 thousand a day, quarter to date for Aframaxes when you look at your slide 4 and see that parabolic move higher in midsize, tanker rates, it feels like maybe higher based on some of the headline rates that we have seen in that particular asset class. So is that a function of timing or maybe some of the quarter to date was booked before? Rates took that next step higher? Is there a lot of excess ballast? Any, you know, situation or issues? Is there any reason why maybe the absorption of the headline rates is not as high for that particular asset class given some of maybe the that you have spoken to? Kenneth Hvid: No. As we know, it is always a timing. I think the way we report these numbers is always I think we look at the positioning, where it is back to the next to the next cargo again. So I feel we are definitely not overpromising on rates that we are doing. But I think that they are reflective of the market that we have seen. I mean, we are globally positioned, and I think we have captured our fair share of the of the fixtures that have been out there when you when you operate on average. But I do think I do agree that there is huge variation on the rates that you are seeing in the in the different regions. So some of it is timing and over a short period, you know, how that can how that can turn out. But I mean, overall, I think we have we have actually secured our fair share of all sorts on the very strong fixtures. So but there is a big range when the market is this volatile. As you know, as you know, you are dealing with big variations in rates on the day. But also in the different areas that you are in. Okay. Thanks, Kenneth. Appreciate it. Operator: We move next to the line of Omar Nokta with Clarkson Securities. Analyst (Omar Nokta): Hi, Kenneth. Good morning. just wanted to-- morning. Kenneth Hvid: Yeah. Analyst (Omar Nokta): Just have a couple of questions and maybe just the first 1. Following up on John's first question and your response in terms of fleet rejuvenation. Guess kind of the thought is from here, given just how expensive things are and uncertainty that the market sort of, you know, has, is the plan still to pair up acquisitions with sales as you have done here over the past several quarters? It sounds like definitely not outpacing that in terms of making more acquisitions and sales. Just want to get a sense, is it still a plan to kind of pair them up? Or would you be more of a net seller as you had been you know, in prior years? Kenneth Hvid: Yeah. I would say there is not a plan to be a net seller. I think, we are balancing a number of objectives. First of all, we are very keen on preserving scale relevance and earnings capacity. And we think the level we are at now is probably close to the very minimum of exposure we want to have. Still, as we say, gives us a lot of very meaningful upside given that over 80% of the fleet is in the spot market. So we like having that level of exposure given the size of the balance sheet, so no appetite to reduce that. Of course, in a market that is that is running as hard as it is right now, it is just very hard to find sensibly priced secondhand values for long term holders and operators like ourselves. So I think that is why we went in and took these, which are new buildings, but 1 year out, But the market is very dynamic, and I am I am sure when we when we speak a year from now, there will have been a number of opportunities, and we will be looking at some very different fundamentals and opportunities. So I think we will to do what we have been doing over the past 3 years. We are trying to be opportunistic, do the best deals we can, as we see them. But at the moment, I think we are balancing continuing to create shareholder value. Capture as much of the strong market as we can, And, of course, keeping our eye on positioning the company for the long term. And making sure that we set the company up in a way where we continue to create long term shareholder value. Thank you, Kenneth. Certainly, that is quite helpful, and thanks for the detail in that. Analyst (Omar Nokta): And then maybe just a simple follow-up, just in terms of fleet deployment here in the second quarter in terms of, say, just I guess, in terms of the VLCC that is going to be sold and be delivered to the buyers in June. How many days do you expect to have for operating, I guess, during the second quarter before she's sold? And then I guess, in terms of the guidance you have given, the remaining, say, 29% of the period, where she is not fixed are those regular operating days, or will they be more nonearning days related to delivery to the buyers? Brody Speers: Yeah. Hey. Omar. it is Brody. In the second quarter, we expect to have 75 operating days for the VLCC. And then the remaining days will just be unavailable days. We will have delivered the ship by that time. that is the expectation. Analyst (Omar Nokta): Okay. Thank you. And so the 71%, 29% that you referenced, that is 75 days. Sorry. Brody Speers: Yeah. So the 71% is based on 90 days. it is actually more like 80-82% of the 75 days has been fixed at that rate level. Analyst (Omar Nokta): Got it. Understood. Okay. Thanks, Brody, and thanks, Kenneth. I will pass it back. Kenneth Hvid: Thank you. Operator: Our next question comes from the line of Ken Hoexter with Bank of America. Analyst (Ken Hoexter): Hey, great. Good morning, Kenneth. So, just interesting commentary on inventories. Not just the rebuild of what you would expect, but maybe some to newer areas. Have you put, I do not know, maybe pen to paper on how meaningful or how long that could go out? And would you expect that rebuild cycle maybe not to start as once we see reopening that traders would allow, I do not know, pricing to maybe come back to normal. And so that would be maybe a long tail leg as opposed to kind of an immediate move. Maybe just thoughts on that inventory side. Kenneth Hvid: Thanks for that question. I think I will have Christian give a bit more color on this. Christian Waldegrave: I think our view on this, Kenneth, coming out once the straits reopen, there definitely will be a need to replenish inventories. The pace at which that is done, I think, will be dependent on market conditions. So to your point, if oil prices are still over $100 a barrel, may not be an urgency to refill the inventories. But as and when Middle East production gets back to normal, and we get back to a more normal situation and the oil prices come down, I think there will be a need that will probably kick start the restocking process And I think there will be a need to rebuild the inventories that have been drawn down. But I think some countries also maybe that do not have strategic reserves will be looking at this in terms of energy security and there may be a need to build some strategic reserves over and above where they were pre-crisis levels. I think also some countries will look at this, especially in Asia, and think that they are possibly have been over relying on the Middle East Gulf region for their oil imports in the past. And, you know, I think that fear is going to be there going forward. So what if this happens again? So I think you will see more diversification of trade as well, which from a tanker market perspective could lead to longer voyage distances as well. So yeah, I think there will be a tailwind from this in terms of a boost to tanker demand. I think to your point, there is a pace at which it will happen will depend a little bit on the market conditions and the oil prices, but it might be a bit more of a longer term rebuild rather than a sudden quick rebuild once the straits reopen. Analyst (Ken Hoexter): So you do not think trading patterns go back to normal just to cut the length of haul over time. Christian Waldegrave: Do you think this structurally changes trading patterns? It might. I think that is that remains to be seen, but I think it is a bit like what happened with Russia. Like, you know, if you think that if the Russia situation went back to normal, would Europe want to be so reliant on Russian energy? I think this energy security issue has become-- is going to be a big driving force once this resolves itself. And then in the first instance, I think Asian countries will wanna take a lot of oil from the Middle East Gulf, right, because it is the shortest distance. But I think over a longer time period, I think every country is looking at these choke points now and looking at ways to mitigate that risk going forward, which could lead to changing trade patterns. Analyst (Ken Hoexter): Great. Thanks for that. And then just thoughts on the dividend, right? So you have declared the special dividend. Thoughts on, I do not know, maybe increased frequency if the market is not accommodative to buying. Maybe your thoughts on capital allocation in the near term Or how large do you want that cash pile to start building? Kenneth Hvid: Yeah. I think we have been pretty consistent over the past 3 years in terms of how we deal with the dividend. So I think the question that is, of course, interesting is when do we have enough cash and as I said in my prepared remarks here, This is this industry is capital intensive and we know sometimes opportunities come suddenly, and of course, you can do a lot more with a billion dollars than you can do with half a billion dollars. But I think we are-- we are probably at the point where yeah, we will we will we can see our cash position grow quite meaningfully over the next quarter as well. That gives us a lot of capacity. But I think it is a discussion that we will have next year again in terms of any other sweeps we may want to do on that cash. Meanwhile, the market is so dynamic that I think we all feel very good about the strong position we are in, and the incredibly strong balance sheet that we have we have managed to build over the past 4 years. Great. Thanks a lot for the thoughts and time. Appreciate it. Analyst (Ken Hoexter): Thank you. Operator: At this time, there are no further questions. I would like to turn the floor back to the company for any additional or closing remarks. Kenneth Hvid: Thank you very much for listening in today. We look forward to reporting back to you for the next quarter in later in the year. So have a great day. Operator: This concludes today's conference. We thank you for your participation. You may disconnect at this time. Before you buy stock in Teekay, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Teekay wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Teekay (TK) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool