Teekay Corporation Ltd. (Teekay or the Company) (NYSE:TK) today reported results for the three months ended September 30, 2024. These results include the Company’s publicly-listed consolidated subsidiary, Teekay Tankers Ltd. (Teekay Tankers) (NYSE:TNK), and all remaining subsidiaries and equity-accounted investments. Teekay, together with its subsidiaries other than Teekay Tankers, is referred to in this release as Teekay Parent. Please refer to the third quarter of 2024 earnings release of Teekay Tankers, which is available on Teekay’s website at www.teekay.com, for additional information on Teekay Tankers’ results. The information contained on our website is not part of this release.

CEO Commentary

“Teekay posted strong earnings during the third quarter of 2024, as rates for Teekay Tankers’ mid-sized tanker fleet remained historically strong for what is typically the weakest quarter of the year,” commented Kenneth Hvid, Teekay’s President and Chief Executive Officer. “The tanker market fundamentals in the mid-size tanker segment remain firm, which continues to support mid-size spot tanker rates and utilization. Looking ahead, we are seeing several of the market’s seasonal headwinds already transitioning into tailwinds for the fourth quarter. With Teekay Tankers’ fleet heavily weighted towards the spot market, we believe we are well-positioned to benefit from the anticipated seasonal uplift.”

“Over the past few years, the Teekay Group has taken several important steps to streamline the organization, including the recent changes to our group management team structure. In addition, we have now agreed to sell Teekay Australia – Teekay’s asset-light ship management operations primarily servicing the Australian Government – to Teekay Tankers for $65 million in cash, as well as transfer all remaining Teekay management services companies to Teekay Tankers. With these planned transactions, Teekay Tankers will become the sole operating platform within the Teekay Group and Teekay will focus on managing its controlling interest in Teekay Tankers.”

“Since we last reported earnings, Teekay has continued to return capital to shareholders through share repurchases totaling $59.1 million at an average price of $8.56 per share, and today Teekay announced a newly authorized $40.0 million share repurchase program. In addition, Teekay’s Board of Directors has declared a special cash dividend of $1.00 per share which, when combined with the recent share repurchases, equates to a total return of capital to shareholders of approximately $144.1 million since the beginning of the third quarter. Finally, over the past two months Teekay acquired a total of $50.0 million of Teekay Tankers Class A common shares at an average price of $58.85 per share, increasing our economic and voting interest in Teekay Tankers to 31.0% and 55.1%, respectively. Going forward, we believe that the Teekay Group’s combined balance sheet strength and strong operating platform within Teekay Tankers positions us well to continue to drive long-term shareholder returns.”

Summary of Results

The Company’s GAAP net income and adjusted net income attributable to shareholders of Teekay decreased for the third quarter of 2024 compared to the same quarter of the prior year, primarily due to lower average spot tanker rates, the sale of two vessels by Teekay Tankers during late-2023 and early-2024, a higher number of scheduled dry dockings by Teekay Tankers, as well as the redelivery of two chartered-in vessels by Teekay Tankers, partially offset by lower net interest expense and the acquisition of one vessel by Teekay Tankers in July 2024. In addition, GAAP net income in the third quarter of 2024 included restructuring charges of $5.6 million related to changes made to the Company’s senior management team, while GAAP net income in the third quarter of 2023 included a $5.8 million reversal of income tax accruals.

The following table highlights the operating performance of Teekay Tankers’ vessels trading in revenue sharing arrangements (RSAs), voyage charters and full-service lightering, in each case measured in net revenues(a) per revenue day(b), or time-charter equivalent (TCE) rates, before off-hire bunker expenses:

Summary of Recent Events

Teekay Parent

In October 2024, Teekay Parent agreed to sell Teekay Australia to Teekay Tankers for $65.0 million in cash plus any working capital adjustment. Teekay Australia provides crew management, technical management, asset management, and procurement services primarily to the Australian Government, as well as to other oil and gas customers in Australia. Teekay Tankers’ Board of Directors’ Conflicts Committee, comprised of independent directors, reviewed the financial valuation of Teekay Australia and obtained an independent fairness opinion from Deloitte LLP (Canada) in respect of the purchase price.

In addition, Teekay Parent agreed to sell to Teekay Tankers all management service companies not currently owned by Teekay Tankers for a purchase price equal to their net working capital value. Following the completion of these acquisitions, Teekay Tankers will employ directly all of the employees supporting its businesses and be the operating platform within the Teekay Group through which Teekay Parent engages in the shipping business. These transactions are subject to customary closing conditions and are expected to be completed by December 31, 2024.

Since the beginning of August 2024, Teekay has repurchased a total of approximately 6.90 million common shares under its share repurchase programs for a total cost of $59.1 million, representing an average repurchase price of $8.56 per share. Since the commencement of its share repurchase programs in August 2022, Teekay has repurchased a total of approximately 19.56 million common shares under the programs, or approximately 19.2% of the outstanding common shares in August 2022, for a total cost of $125.0 million, representing an average repurchase price of $6.39 per share. In addition, in October 2024, Teekay’s Board of Directors authorized a new repurchase program of up to $40.0 million of Teekay common shares.

In September and October 2024, Teekay acquired 849,532 Teekay Tankers Class A common shares through open market purchases for a total of $50.0 million, or an average price of $58.85 per share. Teekay currently has an economic interest of 31.0% and voting control of 55.1% in Teekay Tankers.

The Company’s Board of Directors declared a one-time special cash dividend in the amount of $1.00 per outstanding common share. This dividend is payable on December 18, 2024 to all Teekay shareholders of record on December 4, 2024.

In October 2024, the Company transferred its legal domicile by changing its jurisdiction of incorporation from the Republic of the Marshall Islands to Bermuda. In accordance with Bermudian legal requirements, the Company also changed its name from “Teekay Corporation” to “Teekay Corporation Ltd.”

Teekay Tankers

In July 2024, a 2021-built Aframax tanker acquired by Teekay Tankers for $70.5 million was delivered. The previously-announced purchase was completed with cash, and the vessel is currently unencumbered.

In October 2024, Teekay Tankers completed the previously announced sale of a 2005-built Suezmax vessel for $34.0 million. The gain on sale, which will be reflected in Teekay Tankers’ fourth quarter results, was approximately $9.5 million. Additionally, a 2005-built Aframax from a previously announced sale is expected to be delivered to the buyer during the first quarter of 2025.

The following table presents Teekay Tankers’ TCE rates booked to date in the fourth quarter of 2024 for its spot- traded fleet, together with the percentage of total revenue days currently fixed for the fourth quarter:

Source: Teekay Tankers