TEEKAY CORP LTD

Recent Developments in Teekay Tankers

For additional information about Teekay Tankers, please refer to Teekay Tankers' Annual Report on Form 20-F for the year ended December 31, 2024, as filed with the SEC.

Vessel Sales

During the fourth quarter of 2023, Teekay Tankers agreed to sell one Aframax / LR2 tanker for $23.5 million. The sale resulted in a gain on sale of $11.6 million during the year ended December 31, 2024. The tanker, which was classified as held for sale as at December 31, 2023, was delivered to its purchaser in February 2024.

In May 2024, Teekay Tankers agreed to sell one Suezmax tanker and one Aframax / LR2 tanker for a combined sales price of $64.8 million, which resulted in an aggregate gain on sale of $27.9 million during the year ended December 31, 2024. The Suezmax tanker and Aframax / LR2 tanker were delivered to their purchasers in October 2024 and December 2024, respectively.

In January 2025, Teekay Tankers entered into agreements to sell one Aframax / LR2 tanker and two Suezmax tankers for a combined price of $95.5 million. The Aframax / LR2 tanker and one Suezmax tanker were delivered to their purchasers in February 2025, and the remaining Suezmax tanker is expected to be delivered to its purchaser during March 2025.

In March 2025, Teekay Tankers entered into agreements to sell one Aframax / LR2 tanker and one Suezmax tanker for a combined sales price of $59.0 million. The Aframax / LR2 tanker is expected to be delivered to its purchaser during March 2025, and the Suezmax tanker is expected to be delivered to its purchaser during the second quarter of 2025.

Vessel Sale-Leaseback Repurchases

In March 2024, Teekay Tankers completed the repurchase of eight Suezmax tankers for a total cost of $137.0 million, pursuant to repurchase options under related sale-leaseback arrangements. Currently, the eight vessels are unencumbered.

Vessel Acquisitions

In July 2024, Teekay Tankers completed the acquisition of one 2021-built Aframax / LR2 tanker for a purchase price of $70.5 million.

In February 2025, Teekay Tankers signed an agreement to acquire one 2019-built Aframax / LR2 tanker for a purchase price of $63.0 million. The vessel is expected to be delivered to Teekay Tankers during the second quarter of 2025.

Time Chartered-in Vessels

In May 2024, Teekay Tankers extended one chartered-in contract for an Aframax / LR2 tanker for 12 months at a rate of $34,000 per day and secured an additional 12-month optional period at the same daily rate.

During the third and fourth quarters of 2024, three chartered-in Aframax / LR2 tankers were redelivered to their owners following the expiry of their time chartered-in contracts.

Time Chartered-out Vessel

During the second quarter of 2024, Teekay Tankers entered into a one-year time charter-out contract for an Aframax / LR2 tanker at a rate of $49,750 per day which commenced at the beginning of June 2024.

Bunker Tanker Bareboat and Time Charter Agreements

In September 2024, we entered into an agreement to bareboat charter-in a bunker tanker for a period of four and a half years. At the same time, we entered into an agreement to time charter-out this bunker tanker to a third party for a corresponding period at a rate that is equal to the bareboat cost plus an operational element, which is subject to certain escalations each year. The bunker tanker was delivered to us in November 2024, at which time these two agreements commenced.

Investment in Marketable Securities

In December 2024, Teekay Tankers acquired shares in a publicly traded company which owns and manages a fleet of Medium-Range product and chemical tankers, at a cost of $21.0 million, representing a passive minority investment.

European Union Emissions Trading System (or EU ETS)

Since January 1, 2024, as part of our compliance with the EU ETS requirements, Teekay Tankers has acquired EU allowances (or EUAs) related to greenhouse gas emissions from its vessels and those third-party vessels subject to RSAs that trade to, from, and within the EU and European Economic Area. During the year ended December 31, 2024, Teekay Tankers acquired EUAs for a cost of $5.9 million, which were recorded as indefinite-lived intangible assets. As at December 31, 2024, these intangible assets are presented as other current assets in our consolidated balance sheet as the EUAs will be surrendered to our Union Registry account within one year from the balance sheet date, and we also recorded an accrued liability of $6.6 million in relation to our obligation under EU ETS. In addition, Teekay Tankers recorded voyage expenses related to EU ETS of $6.7 million for the year ended December 31, 2024. Please see "Item 18 – Financial Statements: Note 1 – Summary of Significant Accounting Policies", “Item 18 – Financial Statements: Note 6 – Goodwill and Intangible Assets” and “Item 18 – Financial Statements: Note 7 – Accrued Liabilities and Other and Other Long-Term Liabilities” of this Annual Report for information about EU ETS requirements and our obligation related to EU ETS.

Acquisition of Australian Operations and Management Service Companies

On December 31, 2024, Teekay Tankers completed its acquisition of the Acquired Operations, which included (a) Teekay's Australian operations for a purchase price of $65.0 million plus a working capital adjustment of $15.9 million, and (b) all of Teekay's management service companies not previously owned by Teekay Tankers for a price of $17.3 million, which was the net working capital value of the entities being transferred from Teekay Parent. As part of the acquisition, Teekay Parent transferred to Teekay Tankers its supplemental retirement defined contribution plan liability of $6.0 million, which plan relates to the management services companies included in the Acquired Operations. This liability was deducted from the $98.2 million purchase price for Teekay Parent's Australian operations and Teekay Parent's management service companies, resulting in a net consideration of $92.2 million paid to Teekay Parent.

Other Recent Developments

In the second half of 2024, Teekay Parent purchased 849,532 of Teekay Tankers Class A common shares through open market purchases for $50.0 million at an average price of $58.85 per share, increasing Teekay's economic and voting control of Teekay Tankers to 31.0% and 55.1%, respectively.

During the year ended December 31, 2024, Teekay repurchased approximately 8.0 million common shares for $66.3 million, or an average of $8.24 per share, pursuant to its share repurchase programs, which resulted in it recording a reduction of book value of share capital of $75.1 million and a reduction to accumulated deficit of $8.8 million. As at December 31, 2024, the total remaining share repurchase authorization under Teekay's share repurchase program was $33.0 million.

In October 2024, Teekay's Board of Directors (or Board) declared a one-time special cash dividend in the amount of $1.00 per outstanding common share. This dividend was paid on December 18, 2024 to all Teekay shareholders of record on December 4, 2024.

The green recycling of Teekay Parent's Petrojarl Foinaven FPSO unit was completed mid-2024 in an EU-approved shipyard and, as a result, Teekay Parent has no further interests in FPSOs.

Effective December 31, 2024, the following changes were made to our Board: directors David Schellenberg and Alan Semple retired from the Board, and Poul Karlshoej was appointed to fill one of the two resulting vacancies; the Board determined not to fill the remaining vacancy, and the size of the Board was decreased from six to five members. As part of his retirement from the Board, David Schellenberg also stepped down from his role as Chair of our Board, and Heidi Locke Simon was appointed to such position in addition to being appointed as Chair of our Board's Audit Committee. Please also read "Item 6 – Directors, Executive Officers and Employees".