Welcome to Teekay Corporation First Quarter 2018 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. And now, for opening remarks and introductions, I would like to turn the call over to Mr. Kenneth Hvid, Teekay's President and Chief Executive Officer. Please go ahead, sir.

Before we begin, I'd like to direct all participants to our website at www.teekay.com, where you will find a copy of the first quarter 2018 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 first quarter 2018 earnings release and earnings presentation available on our website. I will now turn the call over to Kenneth to begin.

Thank you, Ryan. And thank you all for joining us today for Teekay Corporation's first quarter 2018 earnings conference call. I'm joined this morning by our CFO, Vince Lok. Starting with Slide 3 of the presentation. In the first quarter, Teekay Corporation generated total consolidated Cash Flow from Vessel Operations or CFVO of approximately $168 million, and a consolidated adjusted net loss of approximately $18 million or $0.19 per share, this is a significant improvement from the same period last year. The result was primarily driven by higher cash flows from Teekay Parent's three directly owner FPSO units that have upside exposure to oil prices and production volume as well as the delivery and contract start-off of several growth projects across the group. Our stronger results were partially offset by weaker crude tanker rates. As a reminder, since we deconsolidated Teekay Offshore on September 25 of last year, our consolidated CFVO in the first quarter only includes 14% of Teekay Offshore's CFVO, whereas in the periods prior to the fourth quarter of last year, it included 100% of Teekay Offshore's CFVO. Had we continued to consolidate Teekay Offshore, our reported total CFVO would have been $310 million in the first quarter of 2018 compared to $275 million in the first quarter of 2017. Lastly, it is important to note, as a result of adopting the new revenue accounting standard in the first quarter of 2018, we were required to gross up certain revenues and expenses resulting in an increase of approximately $61 million in voyage [ph] expenses and approximately $14 million in vessel operating expenses in the first quarter of 2018. But this have no impact on the bottom line since revenues increased by the same amounts, in addition, consistent with prior first quarter as we experienced higher G&A during…

[Operator Instructions] Your first question comes from the line of Pottis [ph] of Morgan Stanley. Please go ahead.

I want to ask about the FPSOs that you have and how do you view the three FPSOs that you have at parallel level, the renewal or the extension of the charters; starting of course from the Banff that the terms of contract this year but also the other two that they are -- they still have another couple of years of contracts?

Thanks for that question and -- since you've been on every quarter, you will notice what a difference a year makes here. Of course, all of the three assets are in a much more interesting position today; first of all, our customers are really making very good money on the assets which is always a good starting point. So if you take the Hummingbird Spirit, as we've mentioned on previous calls, our customers did a fairly large production, drilling campaign and that's going really well, the production is up and we -- as we mentioned on the last call -- are benefiting from the upside, both on volume but also we agreed to an oil price tariff. On Banff, we hope next quarter to report on what the new contract structure is for that unit. As you correctly pointed out, we have earlier indicated that the contract was ending in 2018, there is actually an evergreen mechanism in the contract and at the moment the field is producing a lot of gas and a fair bit of oil spill and in this environment we are obviously in very good construction, talks about -- that it makes it a lot of sense to keep the Banff on the field producing. So I can't share the economic details on it on this call but we hope to be able to share that soon. On [indiscernible], I think we're producing around 25,000 barrels per day at the moment; so needless to say that this is a very profitable asset in the BP portfolio. And as we've said earlier, the production profile is quite long on that field, so we have a number of years. So all in all, I think what we are seeing happening here is really that -- of course, it's as -- it makes a big difference whether you're sitting at $45 or $80 as we hit on Brent today, right. And that is basically doing a couple of things, first of all it's extending where it makes sense at current production volumes but also it is actually stimulating the customers interest in potentially doing more production drilling on the existing field so that they can prolong it. And thirdly, of course, it's really -- we can still getting the interest from other companies that of course have fields where these units could be used as production units. So all in all, just a very constructive environment that we're in at the moment.

How do you view long-term ownership of this three assets? In the previous environment that were planned over selling these assets to Teekay Offshore; now the control of Teekay Offshore has passed to Brookfield -- I'm wondering is there still a plan now that the oil market is in recovery with the phase to potentially sell these assets to Teekay Offshore or even a third-party and become a company with no physical assets at the Parent level?

As you rightfully pointed out, Teekay's focus has been basically to sell-off or drop down the assets that we own at the Parent level. And as we noted in our prepared remarks here, last year we redelivered our last two conventional tankers, earlier this year we redelivered our two only LNG carriers, so what we have remaining is the three FPSOs. And what we've always said was that we're not prepared to do a fire sale on these assets which we would have had to do in the oil environment that we've been in. So where we're sitting now, the asset is obviously a lot more valuable than they were a year ago and we are therefore considering our strategic options. TOO has -- of course, and we have an omnipost [ph] agreement where they always will get a first look, and we are of course looking at these assets long-term, which markets do they long-term fit into if they are going to fit into Teekay Offshore coal markets which is in the North Sea and Brazil, then we would expect to have a conversation with them. And -- but it could also be that these assets post their current contracts, at least a couple of them -- there maybe other markets which are not core to Teekay. So we would -- from a Teekay point of view just naturally look at maximizing the value of the assets.

And given the fact that these assets -- it's only a very small component of the group and the total capital deployed by the group; what are the future thoughts because right now apart from these three assets, the Parents look as a derivative play of the three daughter companies. Are there any thoughts of potentially becoming a portfolio company that would invest even in companies outside of the Teekay complex? What are the future thoughts and the purpose of Teekay Parent?

Well, as you know, we came into the current downturn I'd say in end of '14 here with a significant growth portfolio that we were overseeing in the group, we've been executing on that, we've been financing that. Our focus has really been on executing our projects, getting the financings done which we have executed on over the past 18 months. And our focus now is to continue to strengthen our balance sheet and we think that there is significant value creation upside in doing that. We have a very interesting structure, I think in the group where we have the three daughter companies where Teekay will be in a position to dial-up or dial-down it's investment in those three companies. But most importantly, we have a Teekay brand, a Teekay promise to our customers and all our stakeholders out there and we think there is -- it makes a lot of good sense to be very coordinated across the group and we have a lot of overlap in our customer base and operational synergies, relationships with our financial institutions. So we very must look at running the business on a group basis but it's correct that of course we have four listed companies but I can tell you when the senior management team comes together here, we look at what's best for the entire group and we work together as a team.

So does this mean that the Parent will try to focus on supporting still the daughter companies excluding potential future investment? I'm not talking about the next couple of years, I'm talking a little bit more longer term excluding potential investments in other companies which are not part of Teekay structure, and potentially even in other sectors that are not related -- perhaps drybulk or some other sectors that you are not involved right now?

I mean, we clearly run the group based on decisions we need today, what we need to make in the medium term and what we need to make in the long-term, those are all conversations we're having with our Board. I'll say the decision we are making in today and near-term and as well as the mid-term, it is very evident to us to stay very focused on our call, we think that there is a lot of value that we can generate from our core businesses. So by enhancing the balance sheets and continuing to position us in the those core markets, we actually think that there are more than enough interesting opportunities within that space longer term and then we really bring out the crystal ball. Clearly, everybody is focused on the changes that our world is going through but that is I think for future years passed or discussed. Ultimately, the Teekay Group is always focused on building a sustainable company that's going to be around for the next 100 years and one thing is for sure, the world will look different 100 years from now or even 30 years from now and we'll be there and figure out what services that we'll be delivering at that time. But in the near-term and to the medium-term, we see an enormous need for transportation of oil and gas which is the business that we're in, and that's what we're going to be focused on.

We have no further questions at this time. I'd like to hand it back over to Mr. Hvid for closing remarks.

Although that's reflected in our share price volatility this morning, management is excited about the significant project execution and financings undertaken over the past 18 months and believe that we are well set up to again create values to all our shareholders in a recovering energy market. And with that, we look forward to reporting back to you next quarter. Thanks for listening today.

That does conclude today's call. We thank you for your participation. You may now disconnect your lines and have a wonderful day, everyone.