Welcome to the Teekay Group Third Quarter 2025 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.

Before we begin, I would like to direct all participants to our website at www.teekay.com, where you'll find a copy of the Teekay Group's Third Quarter 2025 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 third quarter 2025 Teekay Group earnings presentation available on our website. I will now turn the call over to Kenneth Hvid, Teekay Corporation and Teekay Tankers' President and CEO, to begin.

Thank you, Ed. Hello, everyone, and thank you very much for joining us today for the Teekay Group's Third Quarter 2025 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 the best quarter in the last 12 months with GAAP net income of $92.1 million or $2.66 per share and adjusted net income of $53.3 million or $1.54 per share in the third quarter. Third quarter spot rates remained counter-seasonally strong with rates meaningfully above the historical average for third quarter. Further, with spot rates well above our free cash flow breakeven levels, the company generated approximately $69 million in free cash flow from operations and at the end of the quarter, had a cash position of $775 million with no debt. Teekay Tankers continues to execute on its fleet renewal strategy, delivering on its previously announced transactions. Since the beginning of the third quarter, we have completed the acquisition of 1 modern Suezmax and the remaining 50% ownership interest in a VLCC from our joint venture partner. In addition, the company completed the sales of 5 -- of 4 Suezmax tankers, which delivered to their new owners in the third and fourth quarters. The combined gross proceeds of the 5 vessel sales is $158.5 million, and we expect an estimated book gain on sales of approximately $47.5 million recorded in the third and fourth quarters. In addition, the strength in the spot market supported the time charter market and the company opportunistically out-chartered 1 Suezmax vessel for $42,500 per day and 2 Aframax-sized vessels…

[Operator Instructions] We will go first to Omar Nokta with Jefferies.

Thank you for the update. Just wanted to ask maybe -- I had a couple of questions, but maybe first just on the market and kind of where things sit right now. Clearly, things have gotten much stronger. And when we think -- I think a lot of times when we sort of talk about or think about rising OPEC production, we think a lot about the VLCCs. And certainly, those rates have been shot towards past 100,000 a day. But we're also seeing some real strength in the Suezmax and Aframax segments, which are your bread and butter. Can you just talk a little bit about how these segments maybe interact with each other or maybe move together? And what's really been driving some of the strength we've seen in the midsized segments here recently?

Yes. Thanks, Omar. You are absolutely right. I mean, I think when we look at this year, I think the second half of the year has definitely been one going from strength to strength, and I would argue maybe even stronger than most of us expected. What we've seen just over the last week really is that, that strength just continues to pick up. So the week is finishing stronger both in the VLCC, the Suezmax and the Aframax segment as well as the LR2s, right? So it's really moving up in all of the categories. And if you look back over the last -- well, since April '22, what we had was that we had a period where the Aframax has absolutely outperformed all sectors, as you know. And I think what we've kind of reverted to is more of the traditional dynamics where the larger ships lead the way, that pull up the Suezmaxes and that pull up the Aframaxes. And underlying that, of course, is that we have a very strong product trade as well that's happening. So everything is really working in all of the different segments where maybe it's more a matter of that in the last 3 years, the Aframaxes were really the outliers because we really outperformed everything. But now we're kind of back to what you say would be the normal dynamics in a strong tanker market where everything is balanced. And I think what we're seeing now is that we have, as we say, a record number of barrels that are being transported on the water. Of course, most of these barrels in a traditional sense always goes on the most efficient vessels, which are VLCCs. But when there's this much oil and this tighter supply, then it just pulls up the whole market. And that's, I think, in all some places what we're seeing here.

Yes. Helpful color. And I guess maybe just kind of thinking about where Teekay stands. Clearly, you guys have been in a very strong financial position for the past several quarters, perhaps several years. Cash is building. And you've reiterated several times be patient, be patient, which makes a whole lot of sense given all the unknowns. As we kind of think about where you're headed, I think it was last quarter or maybe the quarter before, you had talked when it came time to maybe reinvest or add more exposure, you were kind of looking to scale more perhaps into the MR segment into products. Is that still the case if you kind of think about where you stand if you wanted to deploy more capital or more net capital, would you want to go into products more deeply? Or do you feel you'd want to either scale up into the VLCCs or perhaps maybe just stay within your back to using the term bread and butter, but the Suezmax, Aframax segment?

Yes, that's a great question. I mean, just to be very clear, our core business is absolutely the medium-sized tankers. And we constantly look for where there's -- where we can find incremental value both in our core, but also the adjacent sectors. I think when we had this call almost a year ago, we talked about the MR sector, which looked interesting at the time relative to some of the other sectors. I think as we're sitting here today, we are 1 year further down the road here and looking at how we renewed the fleet or have taken action on some of our older tankers have started to renew our core fleet. Our focus is -- our #1 priority right now is investing in our core franchise. I wouldn't say that there never would be an opportunity in MR. But relatively speaking now, we actually think that the better value for us is to allocate capital towards our core segments, which are Aframaxes and Suezmaxes.

We'll go next to Ken Hoexter with Bank of America.

This is Tim Chiang on for Ken Hoexter. To kind of extend on Omar's question, you've sold 11 vessels year-to-date. And while sales kind of outpaced purchases thus far, you mentioned last quarter you're focusing on an accelerating pace of fleet renewal going forward. So do you feel you're close to the minimum fleet size now? And do you perhaps aim for purchases of new core Afras and Suez to offset any following sales?

I think the short answer is yes.

Got it. And saw your new time charter out agreement with 3 vessels locking in very favorable rates. Do you expect to engage in more of those given elevated rates near term in 2026?

Yes, that's a good question. I mean we look at every deal opportunistically. There's always a timing and we consider what is the outlook, and it's very dynamic. We think it's prudent when you see strong time charter rates to lock it in, especially if it's with good customers. So it's an ongoing dialogue. It's not a stated strategy that we need to have x percentage of our fleet. We're happy to have spot exposure. But these levels, we know in historical terms are very strong levels. So we can lock it in. And as we pointed out in our prepared remarks, every time we do that, we lower our free cash flow breakeven even further. So as you can see, it's a very, very strong position that we're in, in terms of generating cash flows in the spot market. But at the same time, even if we did another couple of these at these levels, then of course, our free cash flow breakeven would go down even further. So it's -- we look at it as a portfolio and on a deal-by-deal basis.

We'll go next to Frode Morkedal with Clarksons Securities.

My first question is on this new -- well, China-U.S. deal. I guess the Aframax is under the previous USTR regulation was not extended, right? So now with the USTR port fees being suspended for a year, does that improve the Aframax opportunities for you guys? Maybe they -- of course, the exports out of the U.S. Gulf, but also maybe lightering opportunities? Any color you have on that, please?

Yes. Obviously, the deal is very, very, very new. I think the position we took first when the USTR came in and recently also the China port fees is that with the way that our fleet is composed, we don't have massive exposure to either sector. And therefore, I think the outcome of this agreement, I think, overall is positive for the industry. But I don't think it has any significant impact on Teekay, per se, in the same way as the port fees didn't have a significant impact on us either. So overall, I think it's a positive as it was clearly driving some inefficiencies, which I don't think serves the industry well over the long-term. But let's see. I mean, so far, it's only 1 year we note that's been agreed.

Yes. Sure. Makes sense. Next question, I guess, more generally speaking, -- you've clearly proven, I guess, that you have high total shareholder returns, right, TSR, which doesn't really require a high payout model. So how confident are you that the stock market would appreciate that approach today? And given that there's still a slight discount to NAV, what might close the remaining valuation gap in your view?

Yes. I think over the past 7 years, we have been very, very clear on that we first focus on value before we focus on valuation and valuation follows. And I think to your point, I think that is what we are -- we're happy to see that's actually being recognized by the market. So when we look at it through a 5-year lens, you're absolutely right. I think that model is right. Our company should always focus on value creation, and that's what we're focused on here. I think it's in any business in shipping, it is about that we continue to have a strong balance sheet that we can act at times when we see good buying opportunities that we can act when we see good selling opportunities and that we have a strong operating platform with low cash flow breakeven and that's the fortunate position that we, after many years of hard work, have put Teekay back in and operating with that model delivers value every day. And we think we're in a very strong position to continue to build intrinsic value, and we fundamentally believe that, that will always be recognized by the markets ultimately.

With no additional questions holding, I'll now turn the conference back to the company for any additional or closing remarks.

Thank you for listening into our call today. We look forward to reporting back to you next year. Have a great day.

Thank you. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.