Teekay Group Fourth Quarter and Annual 2024 Earnings Presentation The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: potential changes to or termination of Teekay Tankers' capital allocation plan or dividend policy; the declaration of any future cash dividends on our common shares; the Teekay Group's available cash and the levels ...

Financial Data and Key Metrics Changes - Teekay Tankers reported adjusted net income of $52 million or $1.50 per share for Q4 2024, and for the full year 2024, adjusted net income was $355 million or $10.31 per share [7] - The company generated $69 million in free cash flow in Q4 and $450 million for the year, despite softer spot rates towards the end of the year [7] - A quarterly fixed dividend of $0.25 per share was declared, with a total of $3 per share paid in dividends for the full year [13] Business Line Data and Key Metrics Changes - The company sold two 2009-built Suezmaxes and one 2006-built LR2 for a combined $96 million as part of its fleet management strategy [7][8] - A total of five vessels were sold during Q4 for combined proceeds of $160 million, resulting in expected book gains of nearly $60 million [8] - The company signed a Memorandum of Agreement to acquire a modern LR2 tanker, expected to close in Q2 [8] Market Data and Key Metrics Changes - Weak Chinese demand impacted the VLCC market, affecting Suezmax and Aframax spot rates, although rates remained above long-term averages [14] - Spot rates booked to date for Q1 are slightly below Q4 levels but are trending upwards [12] - The imposition of US sanctions on tankers servicing the Russian oil trade has increased rate volatility, particularly in larger crude tanker asset classes [15] Company Strategy and Development Direction - Teekay Tankers is focused on fleet renewal by selling older vessels and acquiring modern tonnage when opportunities arise [9][10] - The company aims to maintain a fully integrated shipping platform within the Teekay Group following the acquisition of Teekay Australia [10] - The investment in Ardmore Shipping Corporation represents a strategic move to gain exposure in the product sector, although it remains a small part of the overall capital allocation plan [11][35] Management's Comments on Operating Environment and Future Outlook - Management highlighted the geopolitical factors affecting the tanker market, including the ongoing conflicts in Ukraine and the Middle East, which could influence tanker demand and supply [16][17] - The company remains optimistic about underlying tanker supply and demand fundamentals, projecting a balanced market over the medium term [28] - Management emphasized the importance of patience in capital deployment, given the current market conditions and the cyclical nature of the business [51] Other Important Information - The company has a low free cash flow breakeven of approximately $14,300 per day, allowing it to generate significant cash flow in various market conditions [28] - The tanker fleet is currently the oldest in over 20 years, with a significant number of vessels over 20 years old, which could lead to increased scrapping in the future [26][27] Q&A Session Summary Question: Insights on the Ardmore investment - Management clarified that the investment in Ardmore is small and opportunistic, aimed at gaining value without straying from core operations [33][35] Question: Continued pace of renewal buying versus selling - Management indicated that while more vessels are being sold than bought, the focus remains on fleet renewal and capital allocation for long-term shareholder value [39][42] Question: Impact of sanctions on the Aframax market - Management confirmed that sanctions have affected Russian oil exports, leading to increased volumes from alternative sources, which has created volatility in the freight market [58][60] Question: Factors driving pressure on rates - Management noted that the Suezmax market experienced a weaker finish to 2024, but recent upticks in demand are expected to improve rates [68][70] Question: Future of the tanker market amid geopolitical uncertainties - Management expressed uncertainty about how quickly trade normalization could occur, emphasizing the unprecedented nature of the current situation [76][77]

Core Insights - Teekay Tankers Ltd. reported its financial results for the quarter and year ended December 31, 2024, and declared a cash dividend of $0.25 per share, payable on March 14, 2025, to shareholders of record as of March 3, 2025 [1]. Company Overview - Teekay Tankers operates a fleet of 39 double-hull tankers, which includes 23 Suezmax tankers and 16 Aframax/LR2 tankers, along with five time-chartered oil and product tankers [3]. - The company's vessels are typically utilized through a combination of spot market trading and short- to medium-term fixed-rate time charter contracts [3]. - Teekay Tankers also owns a Very Large Crude Carrier (VLCC) through a 50 percent-owned joint venture and manages vessels for the Australian Government and energy companies [3]. - Additionally, the company operates a ship-to-ship transfer business that provides full-service lightering and support operations in the U.S. Gulf and Caribbean [3]. - Teekay Tankers was established in December 2007 by Teekay Corporation Ltd. [3].

Company Performance - Teekay Tankers (TNK) closed at $41.70, reflecting a -1.56% change from the previous day's closing price, underperforming compared to the S&P 500's daily loss of 0.95% [1] - Over the past month, shares of Teekay Tankers have increased by 0.59%, which is lower than the Transportation sector's gain of 4.51% and the S&P 500's gain of 1.86% [1] Upcoming Earnings - Analysts expect Teekay Tankers to report earnings of $1.49 per share, indicating a year-over-year decline of 48.08% [2] - The consensus estimate for revenue is $158.26 million, down 18.62% from the same quarter last year [2] Analyst Estimates - Recent adjustments to analyst estimates for Teekay Tankers are crucial as they reflect short-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [3] Zacks Rank and Valuation - Teekay Tankers currently holds a Zacks Rank of 5 (Strong Sell), with the Zacks Consensus EPS estimate decreasing by 6.56% in the past month [5] - The company has a Forward P/E ratio of 5.95, which is lower than the industry average of 9.03, and a PEG ratio of 1.98 compared to the industry average of 1.44 [6] Industry Context - The Transportation - Shipping industry, which includes Teekay Tankers, ranks in the bottom 6% of all industries according to the Zacks Industry Rank, indicating weaker performance compared to other sectors [7]

Company Performance - Teekay Tankers' stock closed at $41.92, down 1.11% from the previous trading day, underperforming the S&P 500 which lost 0.51% [1] - The stock has increased by 2.76% over the past month, lagging behind the Transportation sector's gain of 5.35% and the S&P 500's gain of 2.87% [1] Upcoming Financial Results - The projected earnings per share (EPS) for Teekay Tankers is $1.49, representing a 48.08% decrease from the same quarter last year [2] - Revenue is estimated to be $158.26 million, indicating an 18.62% decrease compared to the same quarter of the previous year [2] Analyst Estimates and Valuation - Recent changes in analyst estimates for Teekay Tankers are important as they reflect the evolving business trends [3] - The Zacks Rank system, which incorporates estimate changes, currently rates Teekay Tankers as 5 (Strong Sell), with a 6.56% decrease in the consensus EPS estimate over the last 30 days [4][5] - Teekay Tankers has a Forward P/E ratio of 5.95, which is lower than the industry average of 8.65 [6] - The company has a PEG ratio of 1.98, compared to the Transportation - Shipping industry's average PEG ratio of 1.27 [7] Industry Context - The Transportation - Shipping industry, which includes Teekay Tankers, has a Zacks Industry Rank of 248, placing it in the bottom 2% of over 250 industries [8]

Company Performance - Teekay Tankers closed at $39.74, reflecting a +0.61% change from the previous day, which is lower than the S&P 500's gain of 0.92% [1] - The stock has increased by 1.65% over the past month, underperforming the Transportation sector's gain of 5.3% and the S&P 500's gain of 0.81% [1] Earnings Report Expectations - Teekay Tankers is projected to report earnings of $1.67 per share, indicating a year-over-year decline of 41.81% [2] - The consensus estimate anticipates revenue of $158.26 million, representing an 18.62% decrease from the same quarter last year [2] Analyst Estimates and Ratings - Recent adjustments to analyst estimates for Teekay Tankers are being monitored, as they reflect changing business trends [3] - The Zacks Rank system, which evaluates estimate changes, currently ranks Teekay Tankers at 5 (Strong Sell), with the Zacks Consensus EPS estimate having decreased by 4.26% in the past month [4][5] Valuation Metrics - Teekay Tankers has a Forward P/E ratio of 5.41, which is lower than the industry's Forward P/E of 7.9, indicating a valuation discount [6] - The company has a PEG ratio of 1.8, compared to the industry average PEG ratio of 1.17 [6] Industry Context - The Transportation - Shipping industry, which includes Teekay Tankers, has a Zacks Industry Rank of 240, placing it in the bottom 5% of over 250 industries [7] - The Zacks Industry Rank measures the average Zacks Rank of individual stocks within the industry, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Group 1: Company Performance - Teekay Tankers' stock closed at $47.31, reflecting a +0.32% change, which is lower than the S&P 500's gain of 1.83% [1] - Over the past month, shares of Teekay Tankers have increased by 24.63%, outperforming the Transportation sector's decline of 2.55% and the S&P 500's drop of 3.31% [1] Group 2: Upcoming Earnings - The company is expected to report an EPS of $1.81, indicating a 36.93% decrease compared to the same quarter last year [2] - Revenue is anticipated to be $158.26 million, down 18.62% from the prior-year quarter [2] Group 3: Analyst Estimates - Recent changes to analyst estimates for Teekay Tankers reflect shifting business dynamics, with positive revisions indicating analyst optimism about the company's profitability [3] - The Zacks Consensus EPS estimate has decreased by 13.94% over the last 30 days, and Teekay Tankers currently holds a Zacks Rank of 5 (Strong Sell) [5] Group 4: Valuation Metrics - Teekay Tankers has a Forward P/E ratio of 6.18, which is lower than the industry average of 8.03, suggesting it is trading at a discount [6] - The company has a PEG ratio of 2.06, compared to the Transportation - Shipping industry's average PEG ratio of 0.53 [7] Group 5: Industry Context - The Transportation - Shipping industry is ranked 241 in the Zacks Industry Rank, placing it in the bottom 4% of over 250 industries [7][8] - The Zacks Industry Rank indicates that the top 50% of rated industries outperform the bottom half by a factor of 2 to 1 [8]

Group 1 - Teekay Tankers' stock closed at $42.11, reflecting a -1.31% change from the previous day, underperforming the S&P 500's gain of 0.16% [1] - Over the past month, Teekay Tankers' shares increased by 9.43%, outperforming the Transportation sector's decline of 5.71% and the S&P 500's loss of 2.7% [1] Group 2 - The upcoming earnings disclosure for Teekay Tankers is projected to show an EPS of $1.81, which is a 36.93% decrease compared to the same quarter last year [2] - Revenue is expected to be $158.26 million, indicating an 18.62% decline from the corresponding quarter of the previous year [2] Group 3 - Recent changes in analyst estimates for Teekay Tankers suggest a favorable outlook on the company's business health and profitability [3] - The Zacks Rank system, which evaluates estimated changes, currently ranks Teekay Tankers at 5 (Strong Sell), with a consensus EPS estimate that has decreased by 26.22% in the past month [5] Group 4 - Teekay Tankers is trading at a Forward P/E ratio of 5.52, which is lower than the industry average of 7.11, indicating a discount relative to its peers [6] - The company's PEG ratio stands at 1.84, while the Transportation - Shipping industry has an average PEG ratio of 0.52, suggesting differing growth expectations [7] Group 5 - The Transportation - Shipping industry, to which Teekay Tankers belongs, ranks in the bottom 4% of all industries, with a current Zacks Industry Rank of 241 [7][8]

Company Overview - Teekay Tankers (TNK) closed at $39.91, reflecting a slight decrease of -0.03% from the previous day, underperforming the S&P 500 which gained 0.55% [1] - The upcoming earnings release is anticipated, with an expected EPS of $1.81, indicating a significant decline of 36.93% compared to the same quarter last year [2] - Revenue projections are set at $158.26 million, down 18.62% from the previous year [2] Analyst Estimates - Recent changes in analyst estimates for Teekay Tankers suggest a trend in short-term business performance, with positive revisions indicating analyst optimism [3] - Over the past month, the Zacks Consensus EPS estimate has decreased by 26.22%, leading to a current Zacks Rank of 5 (Strong Sell) for the company [5] Valuation Metrics - Teekay Tankers is currently trading at a Forward P/E ratio of 5.24, which is below the industry average of 6.9, indicating a valuation discount [6] - The company has a PEG ratio of 1.75, compared to the Transportation - Shipping industry's average PEG ratio of 0.52 [6] Industry Context - The Transportation - Shipping industry is ranked 233 in the Zacks Industry Rank, placing it in the bottom 8% of over 250 industries [7] - Historical data shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1, highlighting the competitive landscape [7]

Core Viewpoint - The average brokerage recommendation (ABR) for Teekay Tankers (TNK) is 1.60, indicating a consensus between Strong Buy and Buy, with 80% of recommendations being Strong Buy from five brokerage firms [2]. Group 1: Brokerage Recommendations - The ABR suggests a favorable outlook for Teekay Tankers, but relying solely on this information for investment decisions may not be prudent [4]. - Brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [5][9]. - Analysts' recommendations are frequently more optimistic than warranted, which can mislead investors [9]. Group 2: Zacks Rank Comparison - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term stock performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the potentially outdated ABR [11]. - For Teekay Tankers, the Zacks Consensus Estimate has declined by 2.2% to $11.21, resulting in a Zacks Rank of 5 (Strong Sell), indicating a bearish outlook [12][13]. Group 3: Investment Implications - The decline in earnings estimates and the resulting Zacks Rank suggest caution regarding the investment potential of Teekay Tankers, despite the positive ABR [12][13].