Teekay Tankers Ltd. (NYSE:TNK) Q1 2024 Earnings Conference Call May 9, 2024 11:00 AM ET

Company Participants

Kevin Mackay - President and Chief Executive Officer
Stewart Andrade - Chief Financial Officer
Christian Waldegrave - Director of Research and Commercial Performance

Conference Call Participants

Jonathan Chappell - Evercore ISI
Omar Nokta - Jefferies
Ken Hoexter - Bank of America Merrill Lynch

Operator

Welcome to Teekay Tankers Limited First Quarter 2024 Earnings Results Conference Call. During the call, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. [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.

Unidentified Company Representative

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 first quarter 2024 earnings presentation. Kevin and Stewart 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 first quarter 2024 earnings release and earnings presentation available on our website.

I will now turn the call over to Kevin Mackay, Teekay Tankers' President and CEO, to begin.

Kevin Mackay

Thank you, Ed. Hello, everyone, and thank you very much for joining us today for Teekay Tankers' first quarter 2024 earnings conference call. Joining me on the call today is Stewart Andrade, Teekay Tankers' CFO; and Christian Waldegrave, our Director of Research.

Moving to our recent highlights on Slide 3 of the presentation. Teekay Tankers' generated total adjusted EBITDA of $151 million up from the $127 million we generated last quarter. The company reported adjusted net income of $132 million or $3.86 per share, an increase from a $100 million or $2.91 per share in the fourth quarter of 2023.

With our fleet of mid-size tankers trading almost entirely in the strong spot market, Teekay Tankers' high operating leverage enabled us to continue generating significant earnings. As a reminder, for every $5,000 increase in tanker rates above our free cash flow breakeven of $16,000 per day.

We expect to generate approximately $2.40 of annual free cash flow per share. Stewart will provide further information on this later in the presentation. In March, we completed the repurchase of the remaining eight vessels on sale leaseback arrangements for $137 million, reaching the major milestone of being debt free.